Right time. - Regional Airline Association

More documents

Recommendations

Info

ESSENTIAL AIR SERVICE 120 Essential Air Service By Faye Malarkey, RAA Vice President–Legislative Affairs A key component of the Airline Deregulation Act of 1978 was the guarantee of essential air service (EAS) to small and medium size communities. The original essential air service program provided for a continuation of air transportation for 10 years to all cities certificated on the date of the Act's enactment into law, October 24, 1978. The Essential Air Service program was modified and extended by the Airport and Airway Safety and Capacity Expansion Act of 1987 and enacted into law December 30, 1987. The modified EAS program, effective October 1, 1988 through September 30, 1998, permitted new or enhanced service for many cities but required communities to be located 45 miles or more from the nearest hub airport in order to receive service. Airline service would have to be provided two times per day and six days per week, with aircraft with an effective capacity of 15 passengers or more except in cases where passenger traffic has continually been less than 11 persons per flight or in cases where the community agrees to the use of smaller aircraft. All aircraft must be twin engine, two-pilot equipment, and must be pressurized if the flight regularly exceeds 8,000 feet. Additionally, compensation rules for carriers providing subsidized essential air service were modified. On June 30, 1989, Public Law 101-45, the Dire Emergency Supplemental Appropriations Act of 1989, was enacted. This statute provided that, after September 30, 1989, no subsidy paid for any service to or from any EAS air service point in the contiguous United States could exceed $300 per passenger. On December 19, 1989, the Department of Transportation further modified the EAS program, establishing more strin- RAA 2006 Annual Report gent eligibility criteria effective January 1, 1990, which prohibited qualified communities from requiring a per-passenger subsidy exceeding $200. The statute further changed eligibility criteria for communities, requiring EAS points to be located 70 highway miles or more from the nearest medium or large hub airport, 55 highway miles or more from the nearest small hub airport, or 45 highway miles or more from the nearest non-hub airport with 100 or more passenger enplanements per day. The statute made exceptions for certain state capitals as well as EAS points in Alaska, Hawaii and the Pacific. The Airport Safety and Capacity Expansion Act of 1990, enacted on November 5, 1990, contained several provisions related to the Essential Air Service program. The statute authorized the Department of Transportation to fund subsidized EAS service at $38.6 million for each fiscal year from 1992-1998, with funding authorized from the Airport and Airway Trust Fund. The statute additionally prohibited the Department of Transportation from declaring any existing EAS point ineligible for federal subsidy based on perpassenger subsidy amounts. The Department of Transportation Appropriations Act for fiscal year 1992 (Public Law 102-143, enacted on October 28, 1992) modified the Essential Air Service Program further, providing that payments to air carriers be funded from the Airport and Airway Trust Fund. This law also prohibited the Department of Transportation from authorizing EAS payments for service to communities that had not received service during fiscal year 1991 in cases where the community is located no more than 200 miles from a hub airport, unless the community provides the required matching funds. The statute also prohibited DOT from increasing service levels to existing EAS points unless the Secretary certifies in writing that the increased service level will result in selfsufficiency within three years of initiation of the increased level of service. Additional changes have been recently proposed for the EAS program. In 1994, Vice President Gore's National Performance Review recommended reduced EAS funding and more stringent criteria for service. In response to this report, the FY 1995 Department of Transportation budget, submitted to Congress, included a proposed reduction in EAS funding of $7.8 million. Additionally, a provision was proposed to prohibit communities located more than 70 miles from a small hub airport from receiving EAS funding. Congress did not, however, enact the proposed changes to the EAS program at that time. The DOT Fiscal Year 1997 Appropriations Act, signed into law by President Clinton on September 30, 1996, included language expressing Congress’ desire that the Department enable increased access to Chicago O’Hare Airport for small and medium-sized communities. The conference report directed DOT to “make the fullest possible use of existing exemption powers, for example by combining essential air service slots with the pool of slots at O’Hare Airport for military operations in a way that would increase the Department’s flexibility with regard to the time of day assigned to Essential Air Service slots. The
act also directed DOT to use its exemption authority to improve service to non-hub airports where significant improvements could be achieved. This directive was limited to O’Hare International Airport and aircraft carrying less than 60 passengers.” The FAA Reauthorization Act of 1996, signed into law by President Clinton on October 9, 1996, significantly changed funding for the EAS program. This law contained a provision, entitled the Rural Survival Act of 1996, which removed the September 30, 1997 sunset of the Essential Air Service Program and set no new date for the program to end. Further, the Act codified a permanent funding stream for the program, mandating that a standing annual Appropriations of $50 million for the EAS program. The source of this funding was to be obtained from certain fees, established by Federal Aviation Administration in May 1997 for a variety of aviation services provided to foreign governments, as well as fees paid by foreign airlines for overflights of the United States. After a successful court challenge, however, FAA was forced to amend its fee structure, resulting in a significant reduction in revenue, which in turn necessitated FAA to provide the remaining funding. Faced with funding shortfalls, DOT has issued several service termination notices, triggering broad opposition from communities and air carriers. Congress subsequently moved to increase funding for the program, raising EAS funding to $113 million in Fiscal Year 2003. This funding increase resulted largely from concerns that the post-September 11 and Iraq war reductions in traffic would force carriers discontinue service to small communities, thus triggering new EAS subsidies. In certain cities, where the community was guaranteed air service under the Deregulation Act and the air carrier was providing the only scheduled air service, DOT could force the airline to continue to serve the market, paying “hold in monies” for that service. In recent years, communities, carriers and Congress have pointed to the program's failure to keep pace with changes in the airline industry and other modes of transportation that impact passenger traffic at EAS points. New highways and increased speed limits, for instance, have resulted in greater numbers of passengers driving to nearby airports in search of lower fares. The increased operational costs of 19 seat turboprop aircraft, coupled with passenger migration to nearby hubs, have caused Program costs associated with EAS to climb steadily since its inception. On December 13, 2003, the President signed into law HR 2115, the Century of Aviation Reauthorization Act (Vision 100). This law included several provisions impacting the EAS program. One such provision, requiring DOT to select ten EAS cities to pay up to ten percent of their EAS subsidy cost, was prohibited for one year by a law passed in early 2004, the FY2004 Omnibus Appropriations Act. The status of this provision now depends upon further action by appropriators to prohibit implementation of the measure in future fiscal years. Should appropriators fail to include such a prohibition in FY05 spending measures, the provision will be implemented. If implemented, and in such cases where EAS subsidies are lost due to a community’s inability to contribute its designated local share, carriers will be exempted from 30day service continuation requirements. Other provisions of the 2003 FAA Reauthorization law also stand to impact the EAS Program. The law enacted many RAAnegotiated provisions seeking to alleviate some of the difficulties faced by EAS carriers. One such provision exempts carriers from EAS hold-in requirements in cases where a carrier elects to provide new air service to a currently unserved market (thereby freeing carriers from hold-in concerns if the market fails to develop). Another provision provides DOT with a tool to gauge carrier cost increases and adjust EAS compensation rates accordingly without requiring carriers to file termination notices in order to renegotiate contracts. Unfortunately DOT has yet to implement the cost-adjustment mechanism, citing a lack of resources and the need for a specific appropriation. The 2003 Reauthorization mandated other changes to the EAS Program, such as a code-sharing pilot program where DOT may direct major air carriers to enter into code-sharing agreements with EAS carriers and a provision requiring EAS carriers to file semi-annual on-time reports to DOT. The law also directed DOT to establish an alternative essential air service pilot program in which compensation for the service is paid directly to the local government of the community instead of to the air carrier and established a code-sharing pilot program where DOT may direct major air carriers to enter into code-sharing agreements with EAS carriers. Another change, among those mandated by the 2003 FAA Reauthorization, directs DOT, when determining program eligibility to consider the most "commonly used route" in determining EAS eligibility status for communities located more than 70 miles from the nearest hub airport. In current and recent Budget Requests, the current administration has continually sought even greater changes to the program and, each year, proposes to strip the EAS Program of its entitlement status, cutting program funding in half, and enacting further-reaching community match programs, with respect to funding, that would reduce air service to all but the most remote communities. RAA continues to lobby Congress on the importance of full EAS funding and, in recent years, has been successful in obtaining appropriate funding levels to carry out the program. RAA has further lobbied Congress on a codification of the cost-adjustment mechanism afforded to DOT in the 2003 Reauthorization Act and expects to examine per-passenger subsidy caps and further issues related to “EAS reform” in the FAA Reauthorization bill expected next year. In the meantime, RAA projects that Program funding levels to remain adequate through FY07, despite continued political pressure to reduce funding. ESSENTIAL AIR SERVICE RAA 2006 Annual Report 121
Page 2 and 3:
Right size. Right cost. Right time.
Page 4 and 5:
2 Table of Contents Report from the
Page 6 and 7:
RAA REGIONAL AIRLINE ASSOCIATION 4
Page 8 and 9:
6 Thank you! to all of our 2006 spo
Page 10 and 11:
GE Aviation well traveled The CF34
Page 12 and 13:
2005 YEAR AT A GLANCE 10 Year at a
Page 14 and 15:
2005 YEAR AT A GLANCE 12 Top 50 Reg
Page 16 and 17:
2005 YEAR AT A GLANCE 14 Regional P
Page 18 and 19:
2005 YEAR AT A GLANCE 16 Regional A
Page 20 and 21:
REGIONAL AIRLINE SAFETY 18 Regional
Page 22 and 23:
AIRCRAFT 20 Aircraft In 2005 the nu
Page 24 and 25:
AIRCRAFT 22 Summary of Passenger Ai
Page 26 and 27:
��
Page 28 and 29:
FINANCIAL REVIEW 26 Regional Airlin
Page 30 and 31:
FINANCIAL REVIEW 28 regional jets (
Page 32 and 33:
FINANCIAL REVIEW 30 Conclusion The
Page 34 and 35:
INDUSTRY PROJECTIONS 32 Michael J.
Page 36 and 37:
INDUSTRY PROJECTIONS 34 spoke netwo
Page 38 and 39:
LABOR RELATIONS 36 Labor Relations
Page 40 and 41:
The tag that’s in demand. Since 1
Page 42 and 43:
AIRLINE DIRECTORY 40 Regional Aircr
Page 44 and 45:
AIRLINE DIRECTORY 42 Aero-Charter a
Page 46 and 47:
AIRLINE DIRECTORY 44 Bering Air, In
Page 48 and 49:
AIRLINE DIRECTORY 46 CSA Air, Inc.
Page 50 and 51:
AIRLINE DIRECTORY 48 Great Lakes Av
Page 52 and 53:
AIRLINE DIRECTORY 50 Mesa Airlines,
Page 54 and 55:
AIRLINE DIRECTORY 52 Rhoades Aviati
Page 56 and 57:
AIRLINE DIRECTORY 54 Transportation
Page 59 and 60:
Associate Member Directory Aircraft
Page 61 and 62:
Aircraft Interiors / Furnishings B/
Page 63 and 64:
Northwest Airlines 5101 Northwest D
Page 65 and 66:
Sandel Avionics, Inc. 2401 Dogwood
Page 67 and 68:
Flight Deck Resources, Inc. (cont
Page 69 and 70:
Aero-Mach Labs, Inc. 7707 E. Funsto
Page 71 and 72: Aviatron, Inc. 25 Customs Drive Ric
Page 73 and 74: ExelTech (cont’d) Quebec City. Ex
Page 75 and 76: Liebherr-Aerospace Saline Co. 1465
Page 77 and 78: Pacific Propeller, International LL
Page 79 and 80: Saint-Gobain Performance Plastics C
Page 81 and 82: CAVOK International, Inc. 720 Whitl
Page 83 and 84: Ameron Global, Inc. (cont’d) Stat
Page 85 and 86: Matrix Aviation, Inc. 1701 South Ho
Page 87 and 88: GE - Aviation One Neumann Way Room
Page 89 and 90: Total Aviation Services, Inc. (cont
Page 91 and 92: Unitron, LP (cont’d) available in
Page 93 and 94: Paint and Markings Aviation Exterio
Page 95 and 96: Aeroxchange, Ltd. (cont’d) suppli
Page 97 and 98: LJK Companies, Inc. 10225 Yellow Ci
Page 99 and 100: 3M Company . . . . . . . . . . . .
Page 101 and 102: Saywell International, Inc. . . . .
Page 103 and 104: Mark Your Calendar! The 2007 RAA An
Page 105 and 106: Services in North America RAA 2006
Page 107 and 108: Top-50 US Regional Carrier Airports
Page 109 and 110: Key to Airline Designators MAJOR AI
Page 111 and 112: Passenger Service in North America
Page 121: Essential Air Service RAA 2006 Annu
Page 125 and 126: Essential Air Service Section 419 C
Page 127 and 128: Annual State E.A.S. Point Subsidize
Page 129 and 130: Talent shows. One of the key issues
show all

Right time. - Regional Airline Association

Create successful ePaper yourself

Delete template?

Save as template?