House starting work on airport-fund cut

Flight subsidies for 4 state airfields at stake

— WASHINGTON - A Senate-passed bill that would ground government subsidized air service to four small Arkansas airports now awaits action in the House of Representatives.

When House members return to Washington today, they will begin deliberations on a bill that threatens to end the taxpayer-financed flights at small airports across the country.

Without the subsidy, Sea-Port Airlines, a Portland, Ore.-based carrier, said it would not be able to provide service to El Dorado, Harrison, Hot Springs and Jonesboro.

“It’s looking bleak,” said Philip Steed, director of the Jonesboro Airport. “We’re just kind of keeping our fingers crossed.”

Earlier this month, as part of a wide-ranging aviation policy bill, the Senate voted to limit Essential Air Service subsidies, in which air carriers get taxpayer money in return for offering flights to out-of-the-way airports.

Proponents of cutting the subsidy say the payments are a waste of taxpayer money because they attract too few passengers. Supporters say air service is a necessary economic-development tool, without which smaller towns would not be able to persuade big companies to locate factories in rural areas.

Under the legislation, the payments would no longer be available to companies serving airports within 90 miles of a major air hub and would be reserved for service at airports that book at least 10 passengers a day.

In Arkansas, SeaPort receives the payments (which vary depending on total passenger loads) for flights to El Dorado, Harrison, Hot Springs and Jonesboro. None of the four airports has attracted enough passengers to qualify for the payments under the pending legislation. Of the four, only Jonesboro would be disqualified by the proximity rule because of its nearness to Memphis, a major air hub. Little Rock National Airport, Adams Field, does not have enough traffic to claim major-air-hub status.

The bill now heads to the Republican-controlled House, which has made spending cuts a priority.

Rep. Rick Crawford, a Republican who represents the 1st District, which includes Jonesboro, is a member of the Republican Study Committee, a group of more than 175 House members that has advocated eliminating the flight subsidy entirely.

“It’s belt-tightening time,” Crawford said.

The airport is convenient for local employers flying employees and vendors in and out of the area, he said, but he stressed that the Memphis airport - a large hub with hundreds of connecting flights, is just a little more than an hour’s drive away.

“Yes, it’s good for Jonesboro, but in a bigger sense ... it’s kind of a luxury item in this economic climate,” Crawford said. “When things bounce back, maybe we can revisit it.”

Crawford said the issue did not come up in meetings he had last week with the Jonesboro Chamber of Commerce and that he has not gotten any feedback on the issue from larger employers in the area, such as Anheuser-Busch and Frito-Lay.

Rep. Mike Ross, a Democrat from the 4th District, which includes El Dorado and Hot Springs, said local companies such as Murphy Oil in El Dorado benefit from the flights.

“These airports connect these commuters with the region and the world,” he said, adding that the subsidy “not only helps create jobs, but it provides a boost to the local economy.”

The Essential Air Service program, which was introduced as a part of a broad airline deregulation in 1978, is currently funded at $175 million each year through a direct congressional appropriation and through fees assessed to airlines.

When the matter was before the Senate last week, both of Arkansas’ senators voted to kill an amendment offered by Arizona’s Sen. John McCain that would have zeroed out the program.

Both Democratic Sen. Mark Pryor and Republican Sen. John Boozman said they support the Essential Air Service Congress’ watchdog arm, subsidies range from $13 per passenger to $677 per passenger nationally. The median subsidy is $98 per ticket.

Until it liquidated its regional carrier in 2008, Phoenix-based Mesa Airlines provided service to Arkansas’ small airports. Mesa filed for bankruptcy protection in January 2010.

After a year of no service, SeaPort Airlines got the goahead from the U.S. Department of Transportation to offer subsidized flights in October 2009.

Since then, the airline has failed to attract as many cusprogram. The amendments to limit the subsidy, which were offered by Oklahoma Republican Sen. Tom Coburn, were passed by a voice vote.

Pryor voted to table - or reject - Coburn’s amendments. Boozman voted against tabling the amendment that sets the 90-mile distance limit for subsidy recipients.

“I was very much against eliminating it altogether,” Boozman said of the program. “The reality is there is a finite amount of money, and we have to reduce expenditures.”

According to the Government Accountability Office,tomers as Mesa. In 2010, for instance, only 466 passengers traveled on the 803 Jonesboro-Memphis flights that were offered. In 2008, 3,105 passengers had boarding passes on Mesa’s 632 Jonesboro-Dallas flights.

Pryor said the takeoffs and landings helped anchor businesses in rural areas. The struggle to attract passengers, he said, had a lot to do with the poorly performing economy over the past few years.

“I don’t think it’s wise to base a policy on recession-era numbers,” he said.

Rob McKinney, SeaPort’s chief executive officer, said the company has taken steps to attract more fliers, including adding a Jonesboro-Kansas City, Mo., route at the end of January.

Several planes on that route, he said, had been filled to capacity over the past month. He expects flights to Dallas from El Dorado and Hot Springs to begin soon, perhaps within the next 30 days.

Last July, the airline, which employs 35 people in Arkansas, signed a deal with US Airways to provide seamless ticketing. Flights are now advertised on popular travel websites Expedia.com and Travelocity.com, and McKinney said a deal with Orbitz.com is in the works.

While the “status quo” is not expected to hold, McKinney hopes that a two- or fouryear sunset provision, which is in drafts of the legislation a House committee will begin debating this week, will survive, giving the company more of a chance to market the flights.

“We can make it work,” he said, “but we need a little more time.”

Front Section, Pages 1 on 02/28/2011

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