A strategic approach for improving rural air transport in the United States

Commercial air transport in rural and remote areas of the United States has a long history. After the Airline Deregulation Act of 1978, carriers were free to serve any cities and routes they wished. In anticipation of carriers gravitating toward large urban markets, the Essential Air Service (EAS) program was created to maintain commercial service in smaller and more geographically isolated locales throughout the United States. EAS has been continuously funded since 1978, but has recently attracted the attention of many fiscal hawks. Serving only six passengers per flight, on average, with costs approaching $200 million, there are long held concerns that EAS is a poor use of federal monies. The purpose of this paper is to highlight costs of the EAS program and identify systemic inefficiencies in the allocation of EAS resources. We show that service redundancies exist, with EAS markets being cannibalized by both peer EAS airports and other commercial alternatives. Further, we highlight strategic consolidation possibilities for EAS allocations and services, facilitating federal appropriations reduction without sacrificing existing geographic service needs.