WASHINGTON — A Minnesota Congressman is helping negotiate a plan on how to limit subsidies for air travel to regional airports just as small airports in northern Minnesota wait to see what will happen to their regional routes.
The House of Representatives passed a bill on Wednesday that included provisions to cap the amount the federal government provides to subsidize travel to some regional airlines.
Those subsidies, provided under a program called “Essential Air Service,” currently go to a Delta Airlines subsidiary flying to three airports in Minnesota. Those airports, Range Regional (previously Chisholm-Hibbing), Thief River Falls Regional and Falls International are among a group of five Greater Minnesota airports that Delta recently said it would soon stop serving.
The EAS program is one of many contentious pieces of a Federal Aviation Administration reauthorization measure that members of the House and the Senate cannot agree on. The House version of the bill, passed in April, would phase out the program for the continental United States by 2013, according to House Transportation Committee staff. The Senate wants to keep the program. Both chambers have approved a provision ending EAS eligibility for regional airports within 90 miles of major hubs, which affects 10 airports but none in Minnesota.
Tasked with helping to solve these issues is Chip Cravaack. The freshman Republican is heading up a working group trying to negotiate a compromise between the chambers’ proposals.
On May 1, 2010, there were 109 EAS contracts worth more than $163 million for airlines serving rural airports in the continental United States. That money comes from a special Aviation Trust Fund that is supported by taxes on aviation necessities like fuel and purchased planes, said Shaun Germolus, the executive director of the Chisholm-Hibbing Airport Authority.
“If you’re not paying for something, you’re not subsidizing this,” he said.
But Cravaack said the state of the economy means Congress should look at every program to see where it can save money.
“We don’t want any city to be adversely effected, but we’re out of money,” he said. “We have to look at savings wherever we can.”
Cravaack said he and his work group used a mathematical formula that calculated, among other things, the number of passengers using a regional airport and the distance from that airport to a larger hub to determine which airports should be EAS eligible. The first plan was to stop funding trips to 60 airports; over time, that number fell to where it is now — 13 — after senators resisted a bigger cut.
In addition to the 90-mile restriction, the plan in Wednesday’s legislation ends EAS eligibility for communities whose subsidies amount to more than $1,000 per traveler — in other words, those who don’t have enough travelers to justify a high subsidy. The Senate approved the 90-mile restriction in April, but hasn’t supported the second provision.
The larger cuts have drawn consternation from Democrats, including Minnesota Sen. Al Franken, who pointed to Delta’s recent move out of the state as justification for more EAS funding.
“Delta’s announcement reinforces the case for protecting EAS,” he wrote in a letter to the ranking members of the Senate Transportation Committee. “Without EAS, five airports in my state would no longer have commercial service. This would be devastating.”
Delta must help find a replacement
The five EAS eligible airports Franken mentioned are located in Thief River Falls, Chisholm-Hibbing, International Falls, Brainerd and Bemidji. The first three are currently EAS subsidized, but the Delta move might change that.
Mesaba Airlines has a more than $5 million contract with the government to fly a few routes a day between those airports and the hub at Minneapolis-St. Paul International. But Delta, which owns Mesaba and has suffered a $14 million annual loss flying to many small airports, has indicated it will stop flying those routes in order to save money.
But things aren’t that simple. Because those airports are EAS-eligible, federal law requires some flights to them. If Delta withdraws, other airlines can bid for the right to serve the airports without receiving subsidies, the thought being that they can fly those routes and remain profitable. Should there be no takers for that offer, airliners can bid to fly the routes and negotiate an EAS contract with the government, which, as Franken notes, will further burdening the EAS program. If no carrier wants to do that, Delta must convince a company to take the routes, or it’ll be stuck flying them.
“Delta can’t just pull out,” Cravaack said. “They have to find someone else.”
Germolus said Delta plans to bid for a new subsidy level for its routes into the Range Regional Airport. But even if they get a new contract, they’ll use different plains and a lighter travel schedule.
Germolus said Great Lakes Airlines is considering bidding on routes to other northern airports, a fact a Delta spokeswoman confirmed to Twin Cities Business this week.
But even though the EAS cuts passed in Wednesday’s bill wont affect Minnesota communities, Germolus is still worried about what they’ll mean for communities that do lose their eligibility.
“Any reduction of EAS will be detrimental to the rural communities,” he said. “It puts us at a greater disadvantage.”
Thief River Falls Mayor Steve Nordhagen agreed, though he was sympathetic with lawmakers pressured to find ways to cut the budget.
“I understand what they’re talking about. There is only so much money to go around,” he said. “I just don’t want the rural United States to get left out.”
Devin Henry can be reached at email@example.com.