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Planes to nowhere? Congress plans to increase small-town airline subsidies

The Essential Air Service spends as much as thousands per passenger in remote areas. Critics say the program is wasteful and was to be phased out after a period of adjustment to '70s deregulation.

September 19, 2009|Alexander C. Hart

WASHINGTON — Ely is a Nevada mining town with a population of 4,000. Located about a four-hour drive north of Las Vegas, it is perhaps most famous as the birthplace of former First Lady Pat Nixon.

Ely also is a beneficiary of Essential Air Service, a federal program established in the 1970s after airline deregulation to prevent small communities from losing access to air travel. But opponents call the program wasteful spending, noting that much of the money provides service to areas with fewer than 30 passengers a day.

This week, the Senate passed a transportation bill that includes a $38-million funding increase for the program, which now stands to receive $175 million.

In 2008, according to Senate Appropriations Committee data, Great Lakes Airlines received a subsidy of about $1.8 million for the 414 passengers it flew to and from Ely -- about $4,500 per person.

Since the program requires companies to offer at least two round trips most days, some subsidized flights were almost certainly empty. Service contracts usually last two years.

Ely is just one of many communities receiving heavily subsidized flights; in June 2009, 152 towns and cities participated, according to the Department of Transportation.

Costs vary widely in part because of differences in ridership. Glendive, Mont., saw a per-passenger subsidy of more than $2,500 for each of the 418 people who flew last year. The 23,581 passengers using the airport in Manhattan, Kan., only cost the government $50.82 each.

Steve Ellis, vice president of the watchdog group Taxpayers for Common Sense, said that the program "was supposed to go away over a period of time as we made the transition [from deregulation]. . . . Congress made sure it hasn't."

But residents of small towns defend the program.

"We are very isolated," said Karen Rajala, coordinator for the White Pine County Economic Diversification Council, which covers Ely. "The subsidy provides us a link to the urban areas of our state and the West."

But in a time of soaring deficits, Congress must be careful with how it spends money, Ellis said. "I'm not saying there aren't people who benefit from this program," he said. "But the real question is, are the taxpayers as a whole getting their money's worth?"

Attempting to scale back the program, however, is difficult, as President George W. Bush learned when he proposed cutting funding to $50 million in his 2006 budget. His push, which also included a cost-sharing requirement for cities receiving service, collapsed in the face of congressional opposition.

The House's transportation bill also contains $175 million for the program. The two bills will be sent to a conference committee before President Obama signs a final version into law.

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alex.hart@latimes.com

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