House EAS Bill Could Threaten Commercial Air Service to Laramie [UPDATE]
[UPDATE 1/6/12] Bills circulating through the house and senate in Washington could potentially threaten the commercial air service into Laramie currently provided by Great Lakes Airlines. If you were not aware, there is a government subsidy program in place by the name of “Essential Air Service” that actually pays Great Lakes Airlines a predetermined amount for every passenger that they transport to and from the Laramie airport. For many airlines that service small airports across the US, this program that began back in 1978 is what makes it feasible for them to provide commercial services in rural locations. Without it airlines would most likely drop their service to these airports for monetary reasons and focus on larger operations. At present their are 162 EAS supported airports which must be at least 90 miles from a medium or large airport hub to qualify, Laramie being one of those. The Worland airport also receives these funds.
With declining numbers of people using many small rural airports over the last few years some politicians are now proposing that the Essential Air Service subsidy is obsolete and that the government should no longer pay for the program which has an allocated budget of $193 million dollars in 2012. They would rather have the money spent on other important improvements like a new FAA traffic system. A bill currently in the house proposes that all EAS subsidies be eliminated except for those in Alaska & Hawaii. Obviously this would have some pretty significant impacts on Laramie’s airport and Great Lakes Airlines as they would lose all subsidies on their daily flights; currently there are around 3 flights in and out of town on any given week day. Airport manager, Jack Skinner, mentioned that:
On average the flights to Denver are approximately 40% full with a 19 passenger aircraft so there are about 8 passengers per flight.
Great Lakes Airlines, which is headquartered out of Cheyenne, makes about half of their revenue from the EAS subsidy so you can easilly see why losing it would be such a huge hit for them. Jack Skinner explained the following details about EAS and Great Lakes Airlines:
The Essential Air Service subsidy for the airline, Great Lakes Airlines, is approximately $1,180,000 per year. This subsidizes 19 flights per week and only the Denver flights are subsidized. The Airport does not receive any of the EAS money, only the airline. The EAS subsidy for each community is calculated by the DOT in Washington and is based on the money needed to bring in the airline serving the community up to a break-even point.
There is also a Senate bill proposing that there be an EAS subsidy cap of $200 maximum per passenger as some airlines received over $3,000 per transported passenger in certain locations for 2011. In comparison Jack Skinnertold us that Laramie’s per-passenger subsidy to Great Lakes Airlines is closer to $80. This smaller subsidy does lessen chances of losing commercial service to the Laramie airport, but everything will of course depend upon the bill passed. Total loss of EAS funding would also take a big toll on Laramie’s airport even though they are not directly funded by the subsidy:
This would affect the revenues of the Airport greatly. We receive revenues from landing fees and building and space rent from the airline. We also receive passenger facility charges ($4.45/passenger) on each departing passenger out of Laramie. We also receive office rent from the TSA and that would go away. We also have a car rental agency (Hertz) who operates out of the terminal building and without an airline I don’t know that they would stick around. Hertz also provides the Airport with revenue.
While the loss of air service might not be a huge issue to many people in the community it could have other negative effects on Laramie’s economic growth:
Economic Development efforts would be hurt. Companies looking to relocate, start-up, or continue to operate in Laramie rely on being connected with the rest of the country and the world and commercial air service helps these companies do that.
As for the time being Jack Skinner exhibited confience that subsidy for the Laramie airport would not be harmed by and bill saying:
There will be some changes to the program but the program won’t go away. Congress is talking about eliminating communities within 100 miles of a medium or large hub airport, and communities where the per passenger subsidy exceeds $1,000/passenger. The people that I’ve talked to in Washington have indicated that Laramie is safe from being cut from the program.
A compromise between the two bills currently on the table is expected by January of 2012.
We are curious how often you use the Laramie airport? It seems like a lot of people do drive down to the Denver airport for a more affordable trip but we are curious, let us know how often you use the Laramie airport in the poll below.