Subsidies are a boost for smaller airports, but Trump questions if they're needed
Hagerstown, Md. - It took decades, but in June, Clifton Gee landed his dream job - as a pilot for Southern Airways Express ferrying passengers on short-hop flights between the tiny one-gate airport in Hagerstown, Maryland, and two larger hubs in Baltimore and Pittsburgh, Pennsylvania.
The work enables Gee, who grew up the western Maryland community, a rare opportunity for a commercial pilot: to fly all day and still be home for dinner almost every night. And Gee is eager to hold on to it. But a proposal by the Trump administration would do away with the program that made Gee's job possible.
As part of an effort to reduce government spending, Trump has proposed cutting $175 million in funding for the Essential Air Service (EAS) program, which offers subsidies to airlines to connect smaller airports such as Hagerstown to larger ones. The plan, unveiled in late May, is part of $2.4 billion in cuts proposed for the U.S. Transportation Department.
"The Administration believes that airport and air service support for small and rural communities can be provided in a better and more efficient way, and the Department anticipates a portion of the upcoming infrastructure bill will be dedicated to the transportation needs of rural communities," a Transportation Department spokeswoman said.
A bipartisan group of lawmakers, many of whom represent rural communities and states that use the program, opposes the cuts and have vowed to save it.
"The USDOT's Essential Air Service program connects over 170 small communities in the United States to the National Air Transportation System, providing them an essential connection point for travel throughout the country," wrote a bipartisan group of senators including Mike Rounds, R-S.D., Dan Sullivan, R-Alaska, Benjamin Cardin, D-Md., and Chris Van Hollen, D-Md., in a letter to the top members of the Senate Appropriations Committee. "Without this program, these communities would lose air service as airlines would move to only serve more profitable markets. That would leave some communities hundreds of miles away from the nearest large- or medium-hub airport."
Added Rep. John Delaney, D-Md., whose district includes Hagerstown: "Eliminating the Essential Air Service might look good on a spreadsheet, but in the real world, in places like Hagerstown, you see how it will hurt local economies that need every boost they can get. The Essential Air Service [program] has been good for Hagerstown and good for the region."
EAS was established in 1978 in the wake of airline deregulation to ensure that smaller communities such as Hagerstown didn't lose service. But in its budget proposal, the Trump administration argued that now is the time to end what was designed to be a temporary program.
The program offers a per-passenger subsidy to offset the cost of offering service in smaller markets. The amount of the subsidy varies by location and is capped. In general, airports must be at least 70 miles from a larger airport to qualify for the program. Hagerstown Regional Airport is about 77 miles on most commonly traveled roadways from Washington Dulles International Airport and 88 miles from Baltimore-Washington International Marshall Airport.
EAS has been a frequent target for those seeking to reduce government spending. Numerous reports over the years have questioned whether the subsidized flights are the most cost-effective way to connect people to the nation's transportation network. Despite Congress's efforts to tighten requirements and control costs, a recent report by the Congressional Research Service said that costs have continued to climb.
As airports go, Hagerstown, which opened in 1928, is a traveler's dream: friendly service, free parking and cheap fares. Walk in the front door and you're just steps from your gate.
Like the airline industry, Hagerstown has experienced its own cycle of boom and bust. At its peak, 50,000 to 60,000 passengers passed through the tiny airport each year. At its lowest point, it lost both its EAS subsidy and regular commercial air service. Even after it won back the subsidy and christened a $62 million runway extension in 2007, it still had trouble attracting a commercial carrier.
But in 2008, Allegiant Air began offering service to several cities in Florida. A year later, it brought on a second carrier, Cape Air, through the EAS program.
Today, Allegiant offers flights four times a week to Florida, along with Southern Airways, which offers daily flights to BWI and Pittsburgh International.
The latter is made possible because of EAS. According to the most recent data from the Transportation Department, Hagerstown receives $1.7 million in subsidies through the program.
"We believe HGR is a strong market as it has already demonstrated with Allegiant service there," said Mark Cestari, executive vice president for business development at Southern Airways Express. "EAS support enables us to maintain the frequency of our operation - and our low fares. Changes to the current system would obviously necessitate a fresh look at our operation and many other market and economic factors."
Cestari said about a dozen people work for Southern at Hagerstown. The airline also contracts with a local outfit that paints the company's nine-seat planes.
"There's definitely a risk that [Southern] would go away," said Phil Ridenour, the airport's director. "The goal is for that airline to do so well, it can sustain its operations if EAS goes away, but they're not close to that point at this time."
Any loss of passengers could put federal dollars that help pay for airport upkeep at risk, he said. As long as Hagerstown records 10,000 enplanements a year, it is eligible to receive $1 million in Federal Aviation Administration grant money. But if those numbers dip below 10,000, the airport would receive only $150,000.
Hagerstown is one of the oldest airports in the country, but it doesn't show its age. The vast parking lot looks freshly paved and striped. The stone accents at the front entrance give it a rustic feel.
The busiest days are at about 8 a.m. Sunday, Monday, Thursday and Friday, when the terminal fills with travelers headed to Florida on Allegiant. A smaller rush of business and vacation travelers fills the terminal the rest of the week for Southern Airways short-hop flights to BWI or Pittsburgh.
Among those is James Lovejoy, 13, whose father, Steven Law, likes the airport because it is smaller than Dulles and BWI.
"It's safe, and they really keep an eye on your child," Law said.
Just the thought of having to drive to Dulles or BWI makes Lorraine Beauparlant shudder. The traffic, the hassle, the crowds.
"That's what I like about [Hagerstown]," she said. "I can avoid all of that."
But that convenience is not without cost.
The Trump plan would replace EAS with Transportation Aviation Assistance to Remote Areas (TAARA), a program focused on airports in the country's neediest communities. Such a shift could mean the end of subsidized service at Hagerstown.
Ridenour said he knows that his airport is only a small piece of a larger effort to reduce federal spending, but sometimes budget documents don't capture the full picture, he said. A 2015 report summed up the economic impact of the airport in Washington County - 1,447 jobs and more than $8.4 million in state and local tax revenue.
Austin Heffernan, owner of Royal Aircraft, is another beneficiary of the EAS program. His Hagerstown business, which specializes in aircraft maintenance and rebuilding, is responsible for repainting Southern Airways's fleet.
"We're looking at expanding our paint shop here and with that would come more employees," Heffernan said. "That's a direct result of" EAS.
Heffernan said people who come to Hagerstown's airport might be pleasantly surprised.
"If you stand around at the main terminal and watch how many people get on and off these little airplanes, it really is amazing," he said. "It really is used."
And then there are the intangibles, such as the ones that matter to Gee, the pilot, who used to commute to Frederick about 40 miles away, where he handled insurance claims for airlines. Now he lives just three miles from work.
Said Gee: "I paid my dues, but this [job] is a dream come true."
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