President Trump Wants To Eliminate The Essential Air Service Program

The New York Times ran a story this week outlining President Trump’s proposed budget cuts. Among those is a proposal to eliminate the Essential Air Service program.

For those of you not familiar, the Essential Air Service program is a federal program that guarantees air service to small communities that are otherwise underserved. This was enacted after deregulation, to ensure that airlines continue to fly to small communities that airlines couldn’t otherwise profitably serve.

Over 150 markets are served thanks to the Essential Air Service program, and according to Wikipedia:

  • This program costs the federal government $250+ million per year
  • Of the 150+ markets, 44 of them are in Alaska
  • In the 48 contiguous states and Puerto Rico, per passenger subsidies range from $10 to $977+ per passenger

The EAS program is pretty controversial, and I can see both sides of it. For example, I see merit to the EAS program for many markets in Alaska, where there’s really no other practical way for citizens to get to airports.

However, there are also some other markets that are more questionable. For example, Lancaster Airport has an EAS subsidy, even though it’s just a ~34 mile and ~35 minute drive from Harrisburg Airport. Should taxpayers really be subsidizing that?

Even among those who support the EAS program in some form, there’s debate as to whether funding should be on the federal or state level. For example, I think most can agree there’s merit to some sort of subsidies in rural Alaska, though many argue it’s something that the state government should pay for, rather than the federal government.

Do keep in mind that some EAS services even fly completely empty, without a single passenger. Airlines are only paid by the federal government if they operate the flight, and many flights are profitable through the subsidy alone. So under this program airlines are encouraged to operate completely empty flights. What sense does that make?

To provide one example (that I learned about last year), Mokulele operates 4x daily flights between Los Angeles and El Centro-Imperial. The airline is paid $2.44 million per year to operate the route. To break down the numbers, that’s a subsidy of ~$6,700 per day, or ~$835 per flight in each direction, or ~$93 per seat per direction.

Mokulele

Bottom line

It’ll be interesting to see if the Essential Air Service program is eliminated altogether. Personally I think the program is wasteful in its current form, and they need to cut back the number of markets and frequencies that get this subsidy. At the same time, I can see the need for the EAS subsidy in some markets, including in many parts of Alaska. Whether that should fall on the federal or state government, though, is a different story.

If the big U.S. carriers wanted to be consistent with their logic then they should 100% support this. After all, government subsidies of any sort are evil, according on them.

If the budget for the EAS program is in fact cut, expect airlines to pull out of a lot of small markets.

What do you make of the Essential Air Service program, and do you support the federal government eliminating funding for it?

About lucky

Ben Schlappig (aka Lucky) is a travel consultant, blogger, and avid points collector. He travels about 400,000 miles a year, primarily using miles and points to fund his first class experiences. He chronicles his adventures, along with industry news, here at One Mile At A Time.

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Comments

  1. As I was reading through, I was thinking (before I got to your line) that the big US carriers should be in 100% in favor of this since as they mentioned, subsidies are rubbish.

    On a practical, I agree with the thought of this being handled at a state level, however if it’s something that the states want to take up, prepare for another cut in education.

  2. Regardless of whether or not you support Trump, we don’t have enough money for all of these programs. Something has to give. I don’t know if it’s this program or which, but the economy isn’t going to grow fast enough to pay off the debt without cuts. Again, I don’t know what the answer is. Everyone has a reason to not kill every program. But they all can’t live.

  3. “This program costs the federal government $250+ million per year”

    Er, no, this costs the TAXPAYERS 250m. In Germany there’s no word for “Goverment-money”,they have only Steuergeld = “Taxpayer’s money”.

  4. It doesn’t need to be all or nothing. If its too expensive to keep, reduce the budget by say half. Keep those services that are actually essential (like Alaska) but eliminate the subsidies for those services that are convenient for people, but not essential, such as the Lancaster example above.
    Ultimately even a $250m saving is a tiny drop in the ocean of Americas financial problems so unless there are 100 schemes like this to cut its not going to make much difference to the country overall.
    A 10% reduction in military spending would pay for The Wall and countless new schools and hospitals.

  5. Ironically, destinations that supported Trump will be more negatively affected by ESA cuts than non-Trump supporters.

  6. @Ben

    Every cut is a drop in the bucket. After awhile, though, it adds up, and it’s hard to justify throwing money at programs (including the bottomless pit of “education”) that either don’t work, make little/no sense, or don’t return an adequate return on investment.

    Throwing money at problems, alone, solves nothing. Even the best programs can be made more efficient and live with cuts. It happens all the time in the private sector. The stewards of taxpayer money, at the local, state, and federal levels, should spend and invest our money responsibly … for a change.

  7. Seen from outside the US, the question needing to be asked is, “Do we want to ensure that small communities can survive or are we happy for them to fold and people move to bigger communities?”

    I realise that’s a huge policy question for all US citizens, but if the former, then EAS is justifiable. It’s a service to keep a community thriving, just like funding a hospital or the local fire brigade.

    I do agree that there should be limits, as per your Lancaster/Harrisburg example. Although there is likely to be rivalry over which airport got the nod, some co-operation between a set of communities could be the solution so that EAS continues and taxpayers get the best deal for the money spent.

  8. @ Nei S. Gee, I just don’t know where to cut community services that help US citizens. But there’s always more money for military boondoggles, am I right?

  9. @Lisa – Well, you just made my point. Note I said nothing about a military build-up, or whether or not I agreed with the president. I simply said something has to give, and there is always a case to be made by someone or some group about why every program is the wrong program to cut. Hard to have an intellectual debate when people jump right to “military boondoggles” though I suppose I’m the idiot for expecting civil debate in the comments section of a blog.

  10. EAS isnt funded out of the general fund, but from the FAA, which receives its moneys from the taxes paid on each gallon of gas sold. Airlines can recoup *some* of this by means of the 7.5% tax on domestic tickets.

  11. I love the chumps budget. This is the best opportunity we have of killing of the old and poor Americans. He is doing it for us. And most people would rather die, than be led by black, Muslim president.

    Looks like win, win. All trumpeteers, please post your misery here when the cuts start hitting close to home. I want to enjoy your misery. What do you have to lose?

  12. Costs inhere to living in both rural and urban settings. I pay a pretty penny for not much of a townhouse located 4 miles from DCA. And if folks who choose to live in Montana want air service, they need to get used to the idea that they will pay for it, or perhaps find that commercial air service ends up available in only a handful of cities, with many cites losing it altogether.

    I’ve been on an EAS route – a 41 mile flight from Gustavus to Juneau (I had chartered a flight from Juneau to Gustavus a couple days earlier. This “essential” service catered to tourists going to Glacier Bay National Park. This service constitutes a subsidy to the upper middle class. Nor is it an underserved route in the summer – AS had a 737 (not even a combi) assigned to that route.

  13. As a former Alaskan, who lived and worked in the bush, cutting off subsidies to the small AK villages is both a medical and cultural death sentence for Native Alaskans. Native villages rely on subsidized flight to exist. It’s not luxury travel, or MR’s, those subsidies allow Native villages off the road system to exist. Plain and simple. And then, there is the issue of those planes being lifelines to needed medical care that otherwise is not avaliable.
    On another more selfish note, I live 10 miles from LNS (Lancaster) and it’s my favorite way to connect to IAD. Leave it the hell alone! One less fighter plane the military probably doesn’t even want would cover the whole program!


  14. Ironically, destinations that supported Trump will be more negatively affected by ESA cuts than non-Trump supporters.”

    Well then, I’m all for it! God forbid they make cuts to the program based on locations that actually don’t need the service – just throw the baby out with the bath water.

  15. I say perfect!!!
    Eliminate it
    Most of the people in these small town in rural GA, AL, ect voted for trump because they know no better
    I say do it!!!!!
    Make them pay more
    I live in a non rural area. Why should I subsidize them
    After trump does it don’t worry they won’t admit he is dirt. They will act like he did them a favor by eliminating it.
    Hahahhaha

  16. Killing the program entirely isn’t wise, but as pointed out, there’s plenty of waste / corruption going on in this program that needs to be addressed.

    On the Lancaster / Harrisburg deal, I’d imagine that someone shady (Allegiant?) would gladly pick up the slack and probably be able to do the route at a modest profit.

  17. @Neil S – you’ve missed the bigger point of Trump’s budget proposal. Yes he’s proposing the elimination of funding for EAS, but he’s also proposing the complete elimination of 19 federal agencies/departments, not to mention substantial cuts to the State Department (28% cut) and EPA (31% cut). All this while simultaneously proposing an increase to defense spending of $54 billion. And to your comment on “something has to give”, do keep in mind this budget proposal still has the nation deficit-spending and does nothing to pay down the national debt. So the proposal really only robs one department to reward another.

    I think this is what @Lisa was referring to.

  18. The EAS program has had a big bullseye on its back for a couple of decades. And it’s still here. I’m sure the Republican senators from Mississippi, Montana, Utah, Missouri, North Dakota, Kansas, Nebraska, Arizona, South Dakota and Arkansas will all make impassioned speeches as to why communities in their states absolutely deserve taxpayer funded air services:

    “It is unconscionable and immoral to even discuss depriving airline service from the god-loving citizens of East Pigfart! Instead, let us return to the important work of stripping 24 million Americans of their health insurance!”

  19. As others have noted, the impacts of these cuts impact Trump supporters the most.

    According to the AP, Trump received more than 50 percent of the vote in 86 of the 111 communities served by EAS.

  20. @Josh – I always miss the point. Story of my life. So what’s your proposal for paying down the deficit while repairing infrastructure, fixing healthcare, saving essential air travel, and supporting every government department and program without cuts?

  21. Alaska is *the* state that should cover their own costs. They have surplus cash and do not tax their residents, rather gives them a “stipend”.

  22. @Neila

    Increase taxes.

    I personally don’t mind the increased probability of terrorism and living under Russian rule. All you nervous Nellies should pay up more for defense, if you can’t fathom a little more risk. Why am I subsidizing your peace of mind ?

  23. @Neil S – in short: everything must be on the table. Entitlement reform, social program spending cuts, but also military spending cuts and tax increases on the wealthiest Americans. We already have the most powerful military in the world – by a long shot, and our marginal tax rates for the highest earners among us are relatively low among other industrialized nations. (Not to mention that giving tax breaks to the wealthiest does very little to benefit the economy since their spending is pretty well-insulated from tax policy.)

    I would take your comment on “something has to give” and tweak it slightly by suggesting that EVERYTHING has to give, a little.

  24. One of the things Trump campaigned on is cutting government waste. And now people are ‘shocked, shocked I tell you’, that he actually intends to do what he promised to do. And no, he didn’t get elected because a bunch of tiny hamlets voted for him. Rather 3,084 out of 3,141 US counties voted for him. It wasn’t the 100 votes from 3 Horse Montana that put him over the top.

    And for everyone who thinks “just cut the Military to pay for more wasteful spending”, that’s already been done for the last 8 years, seriously hurting our military in terms of both readiness and morale:
    ……………………………..
    “Only three of the Army’s 58 Brigade Combat Teams are ready to fight; 53 percent of Navy aircraft can’t fly; the Air Force is 723 fighter pilots short; and the Marine Corps needs 3,000 more troops.

    “We’re just flat-out out of money” to address those immediate needs and provide the additional personnel and maintenance funding to plan for the future, Navy Adm. William Moran said Tuesday in summing up the concerns of four-star officers across the services.

    In testimony before the House Armed Services Committee, Moran and other officers said their first priority is for Congress to scrap the budget caps known as sequestration under the Budget Control Act of 2011.

    The Air Force currently is the smallest, the oldest, the most poorly maintained and the “least ready in our history,” said Gen. Stephen Wilson, vice chief of staff of the Air Force.

    “Your Air Force needs Congress’ support to repeal the Budget Control Act,” he said. “We need to act now before it’s too late.”

    Gen. Glenn Walters, assistant commandant of the Marine Corps, said 3,000 more Marines are urgently needed to bolster a force that is “insufficiently manned, trained and equipped.”

    In addition, the Marine Corps faces a $9 billion backlog for infrastructure, he said.”
    ………………………………..

    And if you’ve been following the news at all, you know that the POTUS is working hard to cut waste and excess spending on military programs and equiptment, even as he works to build up capacity.

    When you read about the 28% cut to the State Department, realize that a lot of that is coming from cuts to the UN, where the US pays far more than it’s fair share, while the unelected bureaucrats there scheme new ways to undercut the US and Israel, while putting countries like China, Saudi Arabia, UAE, Venezuela, and Cuba on it’s “Human Rights Council” (sic).

  25. @Robert Hanson – anyone can spin the results of an election to make things sound like a landslide but the very simple fact of the matter is the person who received the most votes was deemed the loser. Full stop.

    With regard to the rest of your comment, you’ve over-simplified the matter while also throwing out snarky comments on the previous administration. That probably makes you feel good but in truth you’ve weakened your argument.

    I agree we need reform, but that must include having those who CAN pay more step up and actually pay more.

  26. @Josh who decides who can pay more? We can all sit here and say, “Oh the billionaires of the U.S. can pay more.” But when you do the math and realize that even taxing them an exorbitant amount wouldn’t do much, what do you do then? Gotta tax everyone else. Then when does it stop? Who decides who makes enough to be taxed the extra amount? The government I assume? But of course they wouldn’t tax themselves and just get more and more corrupt, taking more and more of our money until what’s left of our middle class (which isn’t much) is finally no more.

    This country has a spending problem and it needs to cut its spending (or at least somehow stop corruption in the spending, which I have no idea how you do that anymore).

  27. I work for ExpressJet, and this could hurt us and SkyWest. I do get it that subsidizing airports less than an hour from a larger hub makes little sense, however there needs to be some compromise here. It does not have to be all or none.
    Atlanta, GA.

  28. @j

    I agree with you but in a different context. We have been fighting Islamic terrorists for more than 20 years and still haven’t defeated them. New ones pop up to replace the dead ones.

    Who is to say that we need to keep on fighting? Who decides when enough is enough?

    I think we all need to convert to Islam and put an end to this war that is costing us billions.

    I think my logic is as sound aa yours.

  29. I’m from Alaska. While I agree this should be revamped and made more cost effective, throwing this out all together would completely devastate small communities in Alaska. I hope the constituents reach out to their representatives to make some noise

  30. I’m sorry guys but the reality is, if Trump Administration want to save a lot of money, they should bring back all the soldiers that are in the middle east, they spend billions (not millions) of dollars per year…

    oh wait… many companies are making a lot of money selling supplies/providing services… and those are the same companies that had inverted $$$ on campaigns….

    For Education is the same, they will not cut on Education, what they will do is pay a private company (Charters schools) to provide less programs to the students, make a profit on it and this Charters schools will not want to take ESE students (students with disabilities etc) and I know this very well.

  31. “I’m sorry guys but the reality is, if Trump Administration want to save a lot of money, they should bring back all the soldiers that are in the middle east, they spend billions (not millions) of dollars per year…”

    We tried this, remember? We pulled almost all US troops out of Iraq, and ISIS took over much of Iraq and Syria. We’ve spent years trying to get rid of them. That worked well… 🙁

    “many companies are making a lot of money selling supplies/providing services… and those are the same companies that had inverted $$$ on campaigns”

    You are entitled to your own opinion, but not your own “facts”. From the very anti-Trump Washington Post:

    “In 2016 the Clinton campaign spent $1.4 Billion, the Trump campaign spent $957,6 Million”…..

    “I think we all need to convert to Islam and put an end to this war that is costing us billions”

    I know that was supposed to be sarcasm, but it wouldn’t work at all. The Shia and Sunni factions of Islam hate each other more than they hate us. In Pakistan Sunni suicide bombers target Shia Mosques on Shia holy days when those mosques are full of Shia worshipers. Meanwhile Sunni Saudi Arabia is terrified of Shia Iran getting a workable atomic weapon to use against them. 😉

  32. The States can pay for it. Alaska can collect some income tax and/or state sales tax and pay for it themselves.

  33. Cancel tax cuts until we have a balanced budget. Do we need all the ships and planes that are supposedly awaiting parts? If so, cancel new weapons systems until the old ones are repaired. If not, get them off the books instead of using them as a bargaining tool. The military is not the only part of our country suffering from a lack of funding for infrastructure. Along with smarter spending, come up with some way to raise more money. whether it’s taxes or bake sales.:)

  34. And the ex. given with LAX – IPL, that shows why regulations its not working as intended, its a shorter flight than LAX – LAS but more expensive even tough it get subsidized – mo money for owners.
    What happen with university tuition when government loan for education became available for everyone tuition skyrocketed, and every time congress upped the ante on the loan limit the tuition roused – study by New York Fed.

    So let the market regulate the prices by it self, remember in the early aviation days how regulation restricted the air travel market, without the de-regulation this site would be about couponing in Wallmart and this weeks offer in Kmart shop smart 🙂

  35. For LAX-IPL, I flew from SMX-LAX on Mokulele and from what I’ve seen, it’s actually a very popular route and is often pretty full. A lot of people connect in LAX and then continue on to IPL

  36. America is woefully in debt, and the only way to claw our way out is to cut spending or increase revenue (taxes). Nobody seems to want to pay more taxes so that leaves spending cuts, unfortunately. Of course, if more people are working and companies are selling more stuff those will both increase revenues/taxes.

  37. @Josh You are my new hero. All of your comments are exactly what I was thinking, but you said it better than I could 🙂

    Agree that if there are going to be budget cuts, they shojld be across the board. Trump’s proposed budget is a wash. The cuts he wants are off set by increases in other areas.

    There is some value to EAS (remote cities with no other airport within a 3 hour drive), but there are a ton of examples of routes that could be cut out. I live in MO and there are a few that come to mind where they are only a 2 hour drive from STL.

  38. Ending flight subsidies is a great idea. I have never understood how someone could move to a busy intersection and then complain about the noise and traffic. And if you are in the country side you understand you won’t have the same infrastructure as the city. If Alaska wants to subsidize these flights let them use the oil distributions. Seems like a local issue to be settled. Our urban infrastructure is so far behind first world countries now it is insane we haven’t had a bi-partisan stampede to bring us out of chughole city!

  39. I hope the UA’s island hopper (Guam – Honolulu) won’t be affected by these cuts, as it is on my bucket list.

  40. Absolutely should be a state issue – the federal government is not well positioned to choose and compare local communities for aid related to questionably valuable services.

    also, @credit, you clearly have no grasp of geopolitics, history or logic. so please be quiet.

  41. @Josh – You could tax the wealthiest earners at 100% and it wouldn’t even make a dent in our debt/deficit. Non-citizens are earning social program benefits which is just ridiculous, and that spending is more than defense which is also totally out of control. Social programs surpassed 1 TRILLION dollars. That’s trillion with a T. That’s $3,134 for every legal citizen in this country, so it doesn’t even count the 11 million or 40 million or whatever arbitrary number of illegals we have here now who are sucking this country dry. Spending cuts need to be made across the board with no spending increases anywhere. There is so much waste in the government it would make you sick and it needs to end. We live in a sanctuary city now and it’s horrible. Most don’t speak English and refuse to learn, and Walmart is full of EBT abusers with an army of children.

    I’ve worked in state government for years. You could eliminate half of all agencies and it wouldn’t affect anybody’s workload because very rarely does anyone do any actual work. It was a total waste of my time and the reason why I left to start my own business. It was eye opening and sad at the same time. We kept hiring people in my department because if we didn’t that money would be removed form the budget the following fiscal year. So we hired people to warm chairs all day long with nothing to do.

    I don’t know how to fix our broken system, but we sure as hell can’t spend our way out of debt.

  42. @Josh
    Same story with his healthcare plan.
    I foresee a landslide in 2020 for the challenger.
    Maybe the biggest ever loss for an incumbent. Bigger than 1980.

  43. We don’t need no stinkin wall and we don’t need that ass clown to be playing gold every weekend. I say eliminate HIM!

  44. Robert Hanson – Indeed, it’s simply miraculous that the US hasn’t been invaded with such an incredibly weak military. Its clear that spending more on the military than the next 10(?) highest spending countries combined isn’t anywhere near enough.

    Your name is synonymous on here with hate and ignorance, but this is ignorance on a whole new level!

  45. The Essential Air Service is needed, no required, in rural Montana. Without this service from Billings to small towns, residents are basically stranded if they cannot or do not want to drive to get to appointments. Rural Montana needs this service as do other areas in the same situations. I fully agree that the budget needs trimming. But why take away something that people need and use on a regular basis in the United States? Personally I believe that the United States should keep our money at home to provide for our children, disabled and elderly. We definitely need the money to keep the Essential Air Service going so rural America will stay connected to the world. I sincerely hope that Congress will remember that this was put in place many years ago for a reason.

  46. Well, at least YUL officials would be relieved, PBG stole way too much traffic from them thanks to the EAS subsidy to keep the prices low.

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