Essential Air Service

People traveling to or within the United States of America are used to seeing big airports with a high level of air traffic. This makes perfect sense as most of those airports represent the main hubs for big airlines like United Airlines having their major hub in Chicago’s O’Hare, and Delta Airlines in Atlanta’s Hartsfield–Jackson which is considered the world’s largest airline hub.

However, what many do not know is that there are communities that do not have the benefits of owning air services, and where access to air transportation requires long road trips to the nearest airport.

In other words, many travelers take the service availability for granted while it is not always a given.

Fortunately, the essential air service program exists to cover the needs of those communities mentioned above. If you want to learn what is Essential Air Service (EAS) and how it works, we invite you to keep reading as we disclose all the details.

When was the Essential Air Service (EAS) program created?

Air service was regulated in the United States until 1978 when the Airline Deregulation Act conceded air carriers the power to decide which cities in the country they wished to serve and the price of their air service.

The result was that many small communities in the country could not be sure whether they would still have air service. If not, these residents would be forced to drive long distances to reach a bigger airport, especially when needing medical care that would be provided in bigger hospitals.

Here is where the Essential Air Service (EAS) program kicks in.

What is the Essential Air Service (EAS) program?

The program was created and added to the Airline Deregulation Act with the intention of ensuring the small communities can still have access to airline service.

This program runs through the Department of Transportation (DOT) and it offers federal subsidies to air carriers interested in participating in the program.

To be eligible for EAS service, a community must meet certain criteria and any interested air carrier must present a proposal that meets certain requirements in order to be chosen during the selection process.

First, let’s talk about the eligibility requirements for communities.

Subsidized air service requirements for communities

For a community to be eligible to receive EAS funding, the airport serving the community must comply with the following criteria as presented by the US Department of Transportation:

• Subsidy received per passenger must not exceed $200 unless the community is more than 210 miles from the nearest medium or large hub airport.
• The community must maintain an average of 10 or more enplanements per service day to continue to qualify for EAS funding.
• The community must be located more than 70-highway-miles from the nearest medium or large hub airport.

However, Alaska, Hawaii, and any other community that is more than 175 driving miles from the nearest large- or medium-hub airport are exempt from this legislation.

Also, it is important to highlight that the Departement of Transportation states “a community must have had an average subsidy per passenger of less than $1,000 during the most recent fiscal year, as determined by the Secretary of Transportation or face termination of subsidy eligibility, regardless of the distance to a hub airport.”

Finally, the Secretary can waive the 10-enplanement standard on an annual basis. This only applies provided that the community can demonstrate that not meeting the requirement corresponds to a temporary decline in enplanements. Otherwise, EAS funding is cut.

Now, let us show you the requirements for the proposal presented by any air carrier.

Requirements for an air carrier proposal

Air carriers are required to present service and subsidy proposals in order to enter the selection process. These proposals must comply with the following requirements:

• Proposals should be submitted on a sealed bid and “best and final” basis.
• Proposals should set forth the level of service — frequency, aircraft size, and hubs
• The level of service should be appropriate for the community given its location and traffic history.

After the proposals are submitted accordingly, the selection process begins with communities providing their views on those proposals and specifying which carrier and scheduled air service option they prefer as requested by the Department of Transportation.

From here on, the Department of Transportation applies specific criteria for their selection. Here’s a look at the criteria.

Criteria applied by the Department of Transportation for air carrier selection

1. Demonstrated reliability of the applicant in providing scheduled air service.
2. Ensured service beyond the hub airport through the contractual and marking arrangements the applicant has made with a large carrier.
3. Warrant that the interline agreements that the applicant has made with larger carriers will allow passengers and cargo of the applicant at the hub airport to be transported by the larger carrier(s) through one single reservation, ticket, and baggage check-in.
4. Consider the preferences of the actual and potential users of air transportation at the eligible place, giving substantial weight to the views of the elected officials representing the users of the service
5. Inclusion of a plan to market its service to the local community in the proposal.

How much does essential air service cost?

There are many factors that account for the total amount granted to EAS communities. The main reason is that all EAS communities are different, so the number of flights, the number of passengers per flight, the distance covered to the hub, and many other things may vary. And this results in a variety of budgets to support EAS communities.

For example, considering the $200 per passenger subsidy cap, the cost will not be the same for EAS communities requiring 10 roundtrip flights on 30-seat aircraft weekly, as EAS communities require 20 roundtrip flights on 50-seat aircraft.

To give you a better view of this, in the report presented in February 2022 by the DoT regarding Subsidized EAS for communities in 48 states, the subsidy rates for Presque Isle/Houlton in the state of Maine goes up to $6,838,045 while the rates for Garden City in the state of Kansas are just at $772,065.

You can see this and other reports on the US Department of Transportation website.

How is the EAS funded?

According to the Congressional Research Service, “the EAS program is funded from overflight fees paid to the Federal Aviation Administration by foreign aircraft that transit U.S. airspace without landing in or taking off from the United States. Since FY2002, Congress has supplemented the overflight fees with discretionary annual appropriations of varying sizes.”

Alaska and Hawaii are the special cases

Given the nature and how isolated these territories are, both Alaska and Hawaii are treated with some special conditions.

For example, apart from being exempt from the requirements mentioned above, for an air carrier to service the Alaskan territory, it must demonstrate experience in providing scheduled air service, in Alaska, or significant patterns of non-scheduled air service under an exemption granted under § 40109(a) and (c)-(h).

Also, the community of Diomede, which was not eligible for EAS, is receiving service through a program that allows state or local officials to propose to the Secretary of Transportation that DoT provide compensation to an air carrier to serve a place that is not EAS-eligible, with a 50% local share. The program is called ATNEP.

Kalaupapa, a Hawaiian community that was the only community out of 10 in Hawaii that was out of the EAS program, has also gotten the service via ATNEP.

Although many taxpayers may think differently when seeing part of the budget diverted to this purpose, the truth is that the EAS service has been successful in providing a stable and necessary service for isolated communities that would not see airplanes reaching their airfields otherwise.

Moreover, it was a good way for many small carriers to keep afloat during the pandemic time since they had a stable contract that was easy to fulfill.