IMPROVING AIR SERVICE TO SMALL AND RURAL COMMUNITIES

Good morning, Chairman Rockefeller, Senator Lott and members of the Subcommittee on Aviation. My name is Karen Miller and I am a County Commissioner in Boone County, Missouri. I am here representing the National Association of Counties (NACo).  I want to thank you for the invitation to testify on Improving Air Service to Small and Rural Communities.

 

Essential Air Service (EAS) is extremely important to NACo members in small and rural communities, to Boone County, Missouri and to approximately 143 other rural communities served by EAS in 36 states.   The other EAS communities in Missouri include Fort Leonard Wood, Joplin, Kirksville and Cape Girardeau.

 

In a nutshell, EAS keeps all these communities connected to the rest of America.  It provides a link for citizens to travel to the larger communities plus a link to the nation and world through the hub airports to which EAS connects.  EAS plays a key role in local communities by attracting and retaining businesses that depend on commercial air service and in health care by enabling our citizens to more easily access sophisticated healthcare that is often absent in rural communities.  NACo hopes that the final aviation reauthorization legislation will extend EAS and provide an authorized level of funding and dedicated source of funding that is adequate for meeting the demands and costs of the program and make a number of reforms to the program. 

 

Columbia Regional Airport, located in Boone County, Missouri began receiving EAS service in October 2006 when Trans State Airlines pulled out of the market.  Mr. Chairman, please note that this occurred not because of a decrease in enplanements but because Trans State decided to change from turbo prop planes to regional jets and that made Columbia uneconomic to serve.  Columbia Regional Airport serves an area of about 428,000 people and includes the University of Missouri and the state capital in Jefferson City.  We also have a strong business community that is always looking for more employers.  Believe when I say one of the first questions we get from businesses looking to relocate to our area is, “How far are you from a commercial airport.”  It dramatically improves our competitiveness to say 10 miles rather than 115 miles to St. Louis or 135 miles to Kansas City.    

 

While having EAS has been important to our region, the result of the change from non-subsidized to subsidized service has not been without challenges and we have seen a reduction in enplanements—from almost 20,000 in 2005 to 13,673 in 2006 to a projected level of less than 10,000 in 2007.   Until July 7, 2007, Columbia received four EAS flights per day during the week and two flight per day on the weekend, all provided by Air Midwest. The flights were split evenly between Kansas City and St. Louis. Due to the unreliability of the flights and the schedule, we agreed to a change in service. Many of Air Midwest’s flights were leaving 1-3 hours late and this lack of reliability was driving away passengers.  Furthermore, the ability of business travelers to complete a one day return trip was not very practical.  The first flights out of Columbia to St. Louis left too late for the first round of connecting flights from St. Louis and the last flight back to Colombia from St. Louis left too early for the connecting returning flights, and the last flight from Kansas City created a long wait for returning travelers.  Effective July 8, all these flights will go to Kansas City where Air Midwest has its own gate and maintenance operation.  We hope moving all flights to Kansas City will improve reliability, make our service more attractive and increase enplanements.

 

NACo has a number of suggestions for improving the Essential Air Service Program.  The goal of a number of these recommendations is to build up the enplanements in a community so that air carriers can offer service without an EAS subsidy.    There needs to be more funding.  It is certainly fair to say that the cost of fuel, equipment and operations of air service has increased.  We applaud the Commerce Committee for increasing EAS funding to $133 million.  Certainly, the Administration’s proposal to reduce the program to $50 million and limit EAS to 78 communities makes little sense as does proposing limiting eligibility for EAS to those communities currently in the program.  We also need more funds so we can subsidize better service.  Like any other product or service, EAS has to be attractive to the customer.  Hopefully with more funds, the issues often raised by EAS communities concerning frequency, convenience, and type of aircraft can be better addressed.   In the last Congress, both the House and Senate recognized the increasing needs and funded EAS at $117 million only to have the final funding reduced to $109 million, the same figure as FY2006.

 

We also ask this subcommittee to help identify an additional dedicated or guaranteed source of revenue for the EAS program. The Airport Improvement Program has it, the highway program and transit program both have it.  While the international over flight fee generates $50 million annually for EAS, the remainder currently has to come from the General Fund and this creates an uncertainty for the communities and the air carriers.  An additional dependable source, such as the Airport and Airway Trust Fund, which assures communities and air carriers that the program will be fully funded, would make EAS a stronger program.  Another option would be to require the Trust Fund to help fund EAS to the extent that the over flight fee and general fund contribution failed to reach the fully authorized level.

 

We believe the Local Participation Program, currently in law but never implemented, which requires a 10% match requirement in ten communities should be repealed.  Many of the small and rural communities that would be required to provide a local match are not able to find the tens of thousands of dollars the match would require. 

 

The $200 subsidy cap should be increased and indexed.  It has been in place since 1989 and while we are not opposed to the concept of a cap, one that hasn’t been changed in 18 years needs adjustment.     

 

We believe that there needs to be either an incentive for improved service or a penalty for those air carriers who provide unreliable service.  Carriers get paid for completed service, whether on time or three hours late.   Section 405 of S. 1300 moves in the right direction but we would recommend requiring the Secretary of Transportation to provide incentives for carriers to improve air service, as opposed to this being discretionary, and include penalties for poor service.  

 

There needs to be more marketing of EAS service to the community.  Marketing funding should be provided directly through the EAS program.  NACo supports the provision now included in S. 1300 requiring airlines who are bidding on EAS service to include a funded marketing plan in their proposal. 

 

One final suggestion to improve EAS service is that we need to study approaches to encouraging more airlines to bid on providing EAS service.  More competition may result in better service. 

 

As I conclude, let me also indicate NACo’s support for the Small Community Air Service Development Program. This program needs to be funded at a level that comes close to meeting the demand and the $35 million annual authorized level in S.1300 is a positive step.  Every year grant applications exceed the available funding by a substantial margin and the $10 million appropriated for FY2007 is inadequate.  In particular, small communities need marketing dollars to help them get the word out to their residents that airline service is available.  We also believe the match requirement for this program need to be modified, perhaps to reflect community size. 

 

This concludes my testimony and I would be happy to answer any questions subcommittee members may have.