Despite the efforts of the regional airline industry last year to reform the Essential Air Service (EAS) program in the Federal Aviation Administration reauthorization bill, the Bush administration, in its fiscal year 2005 budget proposal, has recommended drastic cuts in the program that would gut service levels to at least half of all current EAS markets (CRAN, Jan. 26).

The president's budget would cap the program at $50 million, less than half its current funding level, said Faye Malarkey, vice president of legislative affairs at the Regional Airline Association. It also would strip the program of its current "entitlement" status, which means EAS communities currently guaranteed two flights a day, six days a week, would receive no air service guarantee in the future.

In addition to the funding cap, the budget would divide communities into three groups. The first group -- communities farther than 210 miles from a large or medium hub airport -- would keep their air service if they begin paying a local share of 10 percent of their subsidy. But because the budget strips the program of its entitlement status, these communities would have no guarantee of service.

The budget would end subsidies altogether for a second group of communities within 100 miles of a medium or large hub, within 75 miles of a small hub airport, or within 50 miles of jet service. Instead of subsidizing air service, the government would have the option of paying 50 cents on the dollar for communities investing in surface transportation.

Finally, for those groups falling between the two extremes, the government would divide up any remaining funds among communities able to pay a 25 percent matching fee for their transportation needs. The government appears to be relegating these communities to surface transportation by opening the program up to surface transportation alternatives, Malarkey said.

The president's budget proposal "sets up a complicated reform that takes the 'air' out of 'essential air service,' telling residents of smaller communities that convenient, reliable air service is a luxury they can't have; instead they have to settle for surface alternatives," Malarkey said.

"We find it especially ironic that the same budget recommendation that recommends extensive reforms to Amtrak would leave some communities currently receiving air service subsidies forced to consider rail or other means of surface transportation in lieu of their current air service," she said.

>>Contact: Faye Malarkey, Regional Airline Association, 202-367-1273.<<