NCPA - National Center for Policy Analysis

SUBSIDIES KEEP SMALL-AIRPORT FLIGHTS IN THE AIR

January 3, 2008

Each day, about 3,000 passengers enjoy mostly empty, heavily subsidized flights, financed by a 30-year-old program that requires the U.S. government to guarantee commercial air service to scores of small communities that can't support it themselves, says USA Today.

Consider:

  • The Department of Transportation (DOT) pays a few small airlines $110 million a year total so they can profitably carry as few as four passengers per day to nearby hubs, often for rock-bottom fares.
  • The flight subsidies were conceived in 1978 as a 10-year program to keep flights going to small communities while the newly deregulated industry found a way to serve them or dropped them.
  • The subsidies, which come from fees and taxes paid by passengers and airlines on non-subsidized flights, fill the gap between an airline's estimate of the flights and its estimate of passenger ticket revenue, plus a 5 percent add-on for airlines' profits.

Further, as Congress has escalated subsidies through the years, the program has increasingly paid for flights between major airports and places that are neither rural nor isolated: 

  • Twenty-four communities with subsidized air service are within 90 miles of an airport that had at least 1 million passengers in 2006; those subsidies cost $22 million a year.
  • In Jackson, Tenn., just 85 miles from Memphis International Airport, the DOT has paid $906,000 a year for 12 round-trip flights a week to Cincinnati/Northern Kentucky International Airport.
  • The flight takes about 1 1/2 hours; the same as driving from Jackson to the Memphis airport.
  • In Athens, Ga., DOT pays $1 million a year for 13 weekly round trips to Charlotte-Douglas International Airport.
  • In about 90 minutes, Athens residents could drive 82 miles to Atlanta's airport, the busiest in the world, with twice as many flights a day as Charlotte.

Source: Thomas Frank, "Subsidies keep small-airport flights in the air," USA Today, January 1, 2007.

For text:

http://www.usatoday.com/news/washington/2007-12-30-cheap-flights_N.htm

 

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