By Jonathan Grass
February 8, 2011
Sen. John McCain, R-Ariz., addressed the Senate on Monday on a bill that would amend the Essential Air Service program, essentially cutting a large chunk in subsidies from the program. Many Alaskan air services and rural communities are taking this proposal hard, hoping it doesn’t pass.
McCain is proposing a bill amendment that would eliminate the $200 million program, as he feels it’s unnecessary and outlived its purpose. Yet, many rural Alaska communities feel just the opposite. They feel the daily air service is their lifeline.
The Empire contacted McCain’s office on Monday, but a response was not received by press time. However, McCain spoke on the Senate floor Monday, saying he feels the program is unnecessary and promotes needless government spending at time when voters are calling for less.
The amendment to repeal $200 million in government subsidies “may not, may not be significant, $200 million in light of a $1.5 trillion deficit this year is probably not a lot of money, but a lot of Americans on Nov. 2 said they wanted us to stop spending things that are not absolutely essential. Although this program is called the Essential Air Service, in my view it’s far from essential,” he said.
He said the program’s expendability stems from that most Americans live within 120 miles to major hub airports and so bypass EAS flights. He said the program originated because airline deregulations inspired Congress to subsidize carriers to service small communities “at a loss because otherwise no sane business would serve a market at a loss.”
He said the $200 million savings may not make much of a difference in reducing the national debt, “but it might be nice to start somewhere.”
However, the driving distance point of McCain’s argument does not reflect the many Alaska communities that have no outgoing roads and rely on EAS for the majority their of goods and services, virtually everything from medical equipment and laboratory work to fresh seafood, not to mention visitors and tourists that represent large contributions to community economies. Alaska’s lawmakers are fighting on this point.
In a release, Sen. Mark Begich stated, “This amendment is worse than political grandstanding, it’s just plain reckless and seriously endangers thousands of Alaskans in dozens of communities from getting food on their tables, heating fuel for their homes and medical supplies in their clinics. Eliminating EAS means driving up the price of air transportation which inflates the cost of milk, toilet paper, diapers and everything Sen. McCain’s constituents can find in a box store or shopping mall.”
In a Feb. 1 letter to McCain, Begich writes, “We are writing to express our opposition to your amendment to the FAA Reauthorization bill repealing the Essential Air Service (EAS) program. É Eliminating the program will have a devastating impact on the economies of rural communities. At a moment when the nation’s economic recovery is starting to gain momentum, it makes little sense to reduce personal and business travel volume by cutting off residents of rural areas. And at a time when jobs are already so hard to come by in our rural communities, it makes even less sense to enact cuts that will only make the problem worse.”
The letter was also signed by Sens. Benjamin Nelson (D-Neb.), Robert P. Casey Jr. (D-Pa.) and Joe Manchin (D-W.Va.).
McCain quoted the letter yet did not identify the senators behind it. He responded, “I believe the real devastation to rural communities, big communities, small communities, medium-size communities, if we don’t stop mortgaging our children and grandchildren’s futures, if we don’t stop doing things that are unnecessary. This program was put into being in 1978, was supposed to be there for 10 years, was a few million dollars, and now according to this bill it’s going to be $200 million. So it’s about time that we matched our redirect with our votes.”
Of the total $200 million in EAS funding, $12,564,599, or about 6.3 percent of it went to Alaska last year, serving 44 communities. Alaska Air Carriers Association Executive Director Joy Journeay said federal subsidies are essential in the Alaskan market since many communities, several in the Southeast, rely on the program for almost all of their needs and some even have no their ways to get vital services. These are the communities accessible only by sea or air.
In his speech, McCain brought up this fact, quoting Severin Bornstein of the University of California as saying, “‘Some communities can make a credible claim they need the services, particularly in Alaska, but I think these are a relatively small part of the program,'” he said. Bornstein is a business professor and expert on airline competition.
Several air services and communities fiercely want the EAS to remain intact, and have written in support of Begich’s opposition. Some of these include Calista Corp., Ward Air, PenAir, Alaska Air Carriers Association and the Organized Village of Kake.
Kake relies on EAS contracts for everything like basic household goods, mail, medicine, utility maintenance and educational needs, said Gary Williams, executive director of the Organized Village of Kake. He said that as an island community, they rely on it for everything. Adding to the necessity of EAS, he said the ferry service can be sparse, increasing the reliance on daily air service.
“I frankly can’t imagine being without that service. It would isolate and cripple us on many levels,” Williams said.
Kake Mayor Henrich Kadake Sr. agrees, saying many people in rural areas like this live on fixed incomes and this is their only link to Juneau, so the loss would hurt them badly. He said many can’t afford to find other ways out for family emergencies or even school functions.
“Working for a tribal government, we have a responsibility to make sure the welfare of the community is taken care of. We’re watching this one. That’s why we jumped on it with a quick response,” Williams said of the letter to Begich.
Wrangell is another example of an isolated place that fully supports the EAS program. The borough’s economic development director, Carol Rushmore, said it’s critical to continue such service contracts to transport all manners of goods, services, cargo and people, as well as anything they need to export. She said the ability to fly everything in or out is a vital part of its economy.
As for the argument that EAS carriers are too expensive, Wings of Alaska Regional Manager Richard Cole said the loss of subsidies would increase service costs.
It’s not only the small carriers that feel this way.
“In terms of the impact, the EAS program is critical in the state of Alaska to those smaller communities like Adak, and those in Southeast, where there is truly no alternative for getting essential supplies and connecting to the nation’s transportation system. Obviously, we are not in favor of a change that would negatively impact Alaskan communities, like this would,” said Marianne Lindsey, a spokeswoman for Alaska Airlines, which holds two EAS contracts.
McCain said EAS has been proposed for cuts or elimination many times over the years but has remained resilient, partly because of lawmakers for rural states and districts. He said in July 2009 the Government Accountability Office questioned whether EAS had outlived its usefulness and said growth of air services, especially low cost carriers serving most U.S. hub airports, weighed against relatively high fares and inconvenience of EAS flights that can lead people to bypass EAS and drive to hub airports anyway.
He added that many watchdog organizations like Citizens Against Government Waste and National Taxpayers Union support his amendment.
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