The average cost of an airline ticket out of the Manitowoc, Wis., airport is $89 -- plus $515 in taxpayer subsidy.
This lopsided arrangement is the result of yet another well-intended federal program that went a little haywire: the Essential Air Service Program. It was passed by Congress 10 years ago to ease the hardship inflicted on rural communities by the Airline Deregulation Act.
The idea was to have a 10-year "phased transition" to free-market air service. Airlines would be subsidized to provide scheduled service to rural airports until the flights somehow became self-supporting in the new era of deregulation.
In its first year of operation, the law subsidized air service to 202 communities in the continental United States, at a cost of $71 million. Unlike most federal programs, Essential Air Service has actually shrunk in the years since. As of Jan. 1, only 102 communities were getting the subsidized service, and the cost to taxpayers was $21 million. The number of passengers on the subsidized flights had dropped by 54 percent since 1978.
A Department of Transportation analysis, obtained by our reporter Frank Byrt, estimates that if subsidies were ended, about 70 of the 102 communities would be without air service. Of those 70, the report notes, 43 served fewer than five passengers a day and 33 were within 75 highway miles of an airport with scheduled, unsubsidized flights. One was only 16 miles from such an airport.
Take Manitowoc: Its little airport is 39 freeway miles from Green Bay's and is within reasonable driving distance from Milwaukee's. Regular bus, train and limousine service can take a passenger from Manitowoc to either airport for as little as $11. But the EAS subsidy to the airline that serves Manitowoc is $371,000 a year. The airline serves an average of two passengers a day there, five days a week. So every passenger who flies out of Manitowoc costs the taxpayers, on average, almost six times as much as the price of the airline ticket.
There were several cases, according to the DOT report, where the federal subsidy was more than $1,000 a day to provide air service for one or two passengers. In each of those cases, the subsidized airport was barely an hour's drive from a larger airport.
The Senate has passed a bill that would extend the program for 10 years and eliminate the subsidy for any airport within 50 highway miles of a bigger one. The House version calls for a 35-mile limit. The matter will be resolved in conference.
Sen. J. James Exon (D-Neb.) said he thinks that people aren't taking the subsidized flights because of inferior service. He proposed an amendment that requires "enhanced service" -- airplanes with at least 15 seats, with two pilots, two engines and a six-day-a-week schedule. He would also expand the program to any community willing to pay 50 percent of the cost.
The Congressional Budget Office has estimated that the cost of continuing the EAS subsidy for another 10 years -- without the Exon provisions -- would be $357 million to $443 million. The improvements in quality that Exon proposes would add $100 million to $150 million.