The White House in its FY2020 budget request indicated plans to reform the Essential Air Service (EAS) program, opening up a schism between the Trump administration and rural airport operators who depend on the pre-deregulation-era program to make sure carriers continue flying to their communities.

The administration’s budget proposal aims to reduce discretionary funding for EAS from $175 million to $125 million in FY2020—a $50 million reduction. Proposed reforms to the program include adjustments to eligibility, as well as limitations to per-passenger subsidies for communities that are relatively close to large airports.

The reductions to EAS discretionary funding will be largely offset by an estimated $151 million in expected mandatory overflight fees that would bring the program’s total funding level to approximately $276 million, down slightly from $288 million in FY2018.

The US Department of Transportation (DOT), in its 2020 Budget Highlights, said the “Office of the Secretary looks forward to working with Congress on reforms to the existing program that ensure federal funds are efficiently targeted at the communities most in need.”

EAS, which subsidizes commercial air service to rural airports, was conceived over 40 years ago to help rural communities transition into the age of deregulation. Proponents of reform argue the program was only intended to be temporary, and many EAS flights are operating well under capacity, resulting in high per-passenger subsidy costs for taxpayers. They also say that replacing flights with less-expensive shuttle bus service would be a more efficient alternative for small airports located relatively close to larger airports.

Others, however, worry that commercial air service would grind to a halt for many smaller and rural areas if the program is either curtailed or eliminated outright. The DOT says on its website that, if not for the federal subsidies, many rural airports “would not receive any scheduled air service.”

“Although some of the EAS flights aren’t very full and sometimes fly empty, which is bound to happen from time to time, those aircraft fly into large airports which feed the aviation system and feed revenues to the airport of origination, the transfer airport and the destination airport,” said Jeff Price, an expert in aviation security and airport safety. “The EAS program needs more funding, not less.”

The president’s 2019 budget request noted that EAS spending had increased 600% since 1996 and 132% since 2008, and that previous efforts to reform the program have failed. The Congressional Research Service, in a December 2018 report, said the rising costs may be a feature of the program, since “the statute governing EAS does not list cost among the four factors that DOT must consider ... and neither the carriers nor the communities receiving subsidized service are obliged to select options that minimize the government’s costs.”

There are currently 115 airports in the lower 48 states receiving subsidies through the EAS program, in addition to 60 airports in Alaska. Under the program’s rules, any airport located more than 70 miles from another commercial airport is eligible for subsidies of up to $200 per passenger.

“Each year that this program is reviewed, the results show the economic impact provided far exceeds the cost of the program,” said Mike Hainsley, executive director at Golden Triangle Regional Airport in Columbus, Mississippi. “The Essential Air Service program provides the access to the global transportation network that communities need to do business.”

Ben Goldstein, Ben.Goldstein@aviationweek.com