How Trump's budget could impact small airports
Credit: Michael S. Williamson/The Washington Post via Getty Images

Originally published on March 17th, 2017.

About 31,000 people live in Jamestown, New York. It sits between Buffalo and Pittsburgh, although it’s not particularly close to either. The city is famed in a few circles, but not quite yet on the national radar.

Jamestown is where Lucille Ball was born — and where the Lucille Ball Desi Arnaz Museum is now located. It hosts an annual comedy festival that attracts the likes of Jerry Seinfeld, Trevor Noah, and Jim Gaffigan.

To get there, visitors have only two options: drive a few hours from one of the closest cities or fly in through the Jamestown Regional Airport.

“It’s our portal, the way that our residents and business community connect to the rest of the country,” Ron Almeter, manager of airports and parks in Chautauqua County, told Travel + Leisure.

However, the future of the Chautauqua County-Jamestown Airport is unclear. It is one of 112 regional airports across the continental U.S. where funding will be cut if the Trump administration’s budget proposal passes.

The $175-million Question

In 1978, the Airline Deregulation Act passed, allowing airlines freedom to determine which markets to service and what prices to charge. However, amidst fears that smaller, rural markets would be forgotten as airlines moved to more lucrative markets, Congress approved the Essential Air Services (EAS) program, as part of the Federal Aviation Act.

The EAS was enacted to “guarantee that small communities that were served by certificated air carriers before airline deregulation maintain a minimal level of scheduled air service,” according to the Department of Transportation.

But according to the Trump administration’s proposal documents, released last week, these airports now cost more than they are worth. The flights are rarely full and “have high subsidy costs per passenger.” The administration also believes that the communities who use these subsidized airports “could be served by other existing modes of transportation.”

The EAS costs the nation about $175 million per year. Policymakers believe that cutting the EAS program would “'make the system more efficient and innovative while maintaining safety,” the budget proposal stated. “This would benefit the flying public and taxpayers overall.”

Over the past few decades, the EAS program has become a contentious issue — with both sides making persuasive arguments.

How it Works

Most airports that receive benefits from the EAS are given enough funding to provide two round-trip flights per day to a hub airport.

In 2014, amidst concerns that the EAS was becoming an unwieldy financial burden, the DOT placed a cap on program funding. No airport would receive subsidies greater than $200 per passenger unless they were at least 210 miles from the nearest hub airport.

But that doesn’t mean that spending on the program has been completely reigned in. There are instances where subsidies rose as high as $900 per passenger. And the Lancaster Airport in Pennsylvania, for example, receives EAS funding although it is only about 35 miles away from Harrisburg International Airport. There are several other similar examples throughout the country.

The most expensive airport in the EAS program is the Pierre Regional Airport in South Dakota, which receives about $4.5 million in annual subsidies. The airport offers daily service to Denver. The next closest airport is the Sioux Falls Regional Airport, about 225 miles away.

However this is certainly not the case for every airport. And not every airport that currently receives funding has needed to do so since 1978. The Falls International Airport in International Falls, Minnesota has received EAS funding for only the past four years.

It used to operate on its own until the 2008 recession. “Then our number of passengers traveling from our airport declined significantly enough that the airline that served us could not continue without some subsidy,” Bob Anderson, the town’s mayor and chair of the airport commission, told T+L.

Anderson said that it’s 300 miles (a five-hour drive) to the closest major airport in Minneapolis-St. Paul.

How the Airports Make Money

“While we’re dependent on EAS subsidies from a business model standpoint, it’s only a part of the portfolio,” Almeter said.

Although many of the smaller airports act as a link for locals and businessmen looking to invest in smaller areas, many are also used by more high-profile passengers who choose to fly private.

Because the Falls International Airport is located directly on the border between the U.S. and Canada, it has been a point for many travelers to pass through customs before continuing on to private airports — Anderson cited Brad Pitt and Angelina Jolie as celebrities who have passed through customs there.

The airports also make money by charging airlines directly for use of counter space and other facilities.

The Battle

There are over 100 regional airports around the country that are eligible for support from the EAS. The vast majority of the counties in which these regional airports exist did vote for Trump in the 2016 election, however the battle over slashing EAS funding is neither new nor unique to this administration.

With every new Congress, the legal battle over EAS funding is given renewed energy. The program was originally only meant to last 10 years, to help rural airports transition into self-sufficiency — obviously, that never happened. It has since been viewed by some as a money-suck for taxpayers.

“Contrary to a lot of folks’ understanding, the money for the EAS does not come from income taxes. It comes from user fees — taxes on the tickets — fuel taxes paid by the airlines and a tax for using the Air Traffic Control system,” Anderson told T+L. “It’s the people who are using these airports and flying these airlines that are paying for it.”

According to a Congressional study, the program is funded by “overflight fees paid to FAA by foreign aircraft that transit U.S. airspace without landing in or taking off from the United States,” in addition to “discretionary annual appropriations of varying size.”

Despite the fact that politicians have, over the past few administrations, continuously considered eliminating the EAS program, spending on the program has increased 600 percent since 1996 — the two biggest funding increases in the program’s history were immediately after the 9/11 terrorist attacks in 2001 and following the economic downturn in 2008.

According to a study Congress commissioned in 2015, many of the reasons the EAS budget has increased are external, including the rising price of fuel and higher pilot wages. But the study also admitted that “certain features of the EAS program itself may have contributed to the rising costs,” including the fact that airlines are not obligated to choose the most cost-effective services when receiving subsidies.

The Impact

Since the EAS program was introduced in the '70s, Anderson has gone to Washington to speak to Congress about the impact the program has on smaller communities. When asked if he thought he would have to head to Washington to talk about the EAS again this year, Anderson laughed and said: “That would not surprise me.”

Anderson said his mission in going to speak to Congress is to educate “the new people in Congress and the new administration about the value of air service to small and medium-sized cities.”

Many of the communities and counties who, overwhelmingly, put this administration in office rely on small regional airports as their main connection to the rest of the American transportation system.

“If you’re going to have mines to mine minerals, if you’re going to have paper mills, they need to be located where the natural resources are,” Anderson said. “And so, the question becomes: Should there be regional airports and should there be access for the miners and the timber harvesting paper makers of the world? Should there be service out to these communities? Should those locations have access to the transportation system of the world?”