EAS Program a Complete Taxpayer Waste

Published May 31, 2016

The Essential Air Service Program, a truly lame-brained government subsidy whose fate played a role in the recent near-shutdown of the Federal Aviation Administration, deserves its place on the chopping block. In fact, there’s a good argument that the program, which cost a tick over $180 million last year, is the single most wasteful program in the government. Members of Congress from both parties should agree to eliminate EAS right away if they want to show they’re at all serious about cutting government waste. The program, originally created in 1978 after the deregulation of airline fares and routes, supposedly exists to ensure continued air service to rural communities. Although it may have struck some as a needed precautionary stopgap then, its time has long since passed. Much of the service it subsidizes goes to communities such as the Baltimore suburb of Hagerstown, Maryland ($1.57 million in subsidies) and the Arkansas resort of Hot Springs ($1.41 million in subsidies) that are within easy driving distance of airports with lots of service. Since almost all those taking EAS flights are heading for connecting flights anyway, some of the time saved by flying rather than driving to a reasonably close airport will get eaten up by waiting for a connection. When one considers the relatively low speed of the slow turboprop planes used for all EAS service—some Amtrak trains move faster—the great majority of people using EAS service don’t even save much time. As a result, the service isn’t very popular. Even though more than half of all EAS planes have 19 or fewer seats (about a sixth the number of a typical regional jet), flights typically go out less than half full, and many airlines that get the subsidies find they still can’t break even. Hot Springs, for example, has lost all air service at least twice. And because the service is so unreliable, the spinoff business benefits of having an airport with commercial service probably don’t actually accrue to towns that get the subsidies. No business that believes it needs nearby commercial air service to succeed is going to locate where the service is expensive, uncertain, and reliant on a politically controversial subsidy. Even in places such as the Alaska interior where there may be a decent case for some air service subsidies (many towns there have no road access), it’s difficult to figure out why the states shouldn’t meet these inherently local transportation needs themselves. Alaska certainly should be able to find somewhere in its $11 billion annual budget the $13 million in subsidies or so it got from the feds. With the federal government paying farmers not to grow crops, subsidizing the rebuilding of beachfront mansions, and underwriting product development for private, profitable companies, EAS has a good deal of competition for the title of most wasteful government program. But it still deserves that dishonor, for no matter how silly these other programs are, at least it’s possible to quantify some benefits from them. EAS, it appears, doesn’t really benefit anyone except perhaps the managers of airports that can brag about having one or two marginal flights a day. Cutting EAS, of course, won’t solve the federal budget problem. Its total elimination is trivial in the context of a budget that tops $4 trillion. But if Congress wants to show it’s serious about cutting waste, the Essential Air Service Program has got to go as soon as Congress gets back into town. Eli Lehrer ([email protected]) is vice president of Washington, DC operations for The Heartland Institute and national director of its Center on Finance, Insurance, and Real Estate.