Proposed Cuts are Latest Challenge

published: 2/17/2003

Passengers are few, but airport officials say need is served

President Bush's recent push to slash funding for subsidized air service has left four South Dakota airports in limbo.

Brookings Municipal Airport, which boards a mere 1,100 passengers yearly, could be in the most danger since it is only 60 miles from Sioux Falls Regional Airport. Pierre, Huron and Watertown also rely on subsidies for service.

Bush's proposal strives to use funding more effectively by restructuring how participants are approved. Funding would be distributed first to the most isolated communities, and last to those closest to other airports.

"Brookings is always talked about as being on the list of possible closures because of two things - our proximity to Sioux Falls is one of the issues, and the other is the number of boardings that we have," said Gregg Jongeling, city engineer and airport manager. "It's too early in the battle to get too excited about what the president's proposing."

The struggle to keep the Essential Air Service program funded is nothing new. But this latest battle comes while airports nationwide are dealing with decreasing passenger numbers heightened by the Sept. 11, 2001, terror attacks.

In recent years, many airports have been hit with cuts in available flights. About two years ago, Chan Gurney Municipal Airport in Yankton lost its commercial air service completely.

The Essential Air Service program under the U.S. Department of Transportation began in 1978 so smaller communities wouldn't lose service after the airline industry deregulated. Since 2000, three of the state's regional airports - Pierre, Watertown and Huron - started receiving subsidized service.

The Sioux Falls, Rapid City and Aberdeen airports do not receive subsidized service. Pierre Regional Airport receives subsidized air service to Denver, but not for its Minneapolis service.

Bush's proposal would cut the program by 57 percent to $50 million, compared with this year's proposed budget of $113 million.

"It's a big state," said Rep. Bill Janklow, the state's lone U.S. House member. "It's not moral that you drive 400 miles to catch an airplane."

Airports would also have to contribute up to 25 percent for continued air service, according to Sen. Tim Johnson's office. Airports that are more than 210 miles from another airport would pay 10 percent.

"That would spread the money over more communities than would otherwise be the case," Mosley said of the proposal. "It doesn't mean that there would be a 50 percent cut in the communities getting subsidies."

But a contribution up to 25 percent could be too much for some airports.

"It depends what the subsidy levels would be," said Larry Cooper, airport manager at Huron Regional Airport. "I guess that could price us out of business."

Jongeling said if the Brookings airport were cut from funding, it wouldn't continue to operate.

"An airline cannot operate with that small number of passengers," Jongeling said. "They couldn't make any money, and the city could not afford to subsidize.

"If there is not a subsidy available, a number of the smaller communities will not have air service."

Communities that lose subsidized service would be offered other forms of transportation, such as charter flights, air taxis or ground transportation through the program, said Bill Mosley, public affairs specialist for the Department of Transportation.

In South Dakota, the proposal has government officials lobbying for more money.

"This is a less-than-ideal situation for South Dakotans and could result in a loss of EAS funding for South Dakota," Johnson said. "Many rely on air service to get us from here to there because of the rural nature of our state."

Effect of turbo-props

Regional airports across the nation have been struggling for years to keep service.

"There is no one single cause for this," said Maurice Parker, executive director of Regional Aviation Partners.

Following several turbo-prop plane crashes, the Federal Aviation Administration in 1997 moved the aircraft under the same operating requirements as large jet planes, Parker said.

"The cost associated to that rule change to small turbo-prop planes - 10- to 30-seat airplanes - was astronomical," Parker said. Regional jets are being replaced by turbo-props, which are more expensive to operate.

"When these small aircrafts' costs increase, that's when the leakage starts," Parker said. "Most people would rather drive to a larger airport where they can get the lower fares than fly out of a smaller airport."

The reduction of turbo-prop planes is likely to leave some communities without any air service, said George Hamlin, senior vice president for Global Aviation Associates, a Washington-based aviation consulting firm.

"I think over time, as the equipment size gets bigger, the small markets will have a tougher time staying in place. The markets served by 19-seaters now are in trouble," Hamlin said.

But without better service and more options, residents aren't likely to start using the local airports, Short said.

"It's worse for a smaller community like us," said Cooper, the Huron airport official. "If it's not profitable, they (airlines) don't want to do it. It's a Catch-22, essentially."

And that's what many say is happening in South Dakota.

Passenger numbers at the state's two major airports in Sioux Falls and Rapid City have steadily increased in recent years.

Although Sioux Falls experienced a downturn after the Sept. 11, 2001, terrorist attacks, increases during the past several months signify a comeback, said Mike Marnach, airport manager. And Rapid City Regional Airport increased 10 percent, said Torrance Richardson, airport manager.

Both attribute the increase to more competitive airfares, but Richardson added that Rapid City also benefited from a good tourist season.

Reasons to fly from home

Though traffic at Watertown Municipal Airport increased 25 percent in 2002 from 2001, passenger traffic has decreased since 1998, after the Northwest Airlines strike, said Mike Isaacs, airport manager.

Other airports experienced decreases in passenger traffic in 2002. Many said it's difficult to pin the ebb of passenger flow to one cause, but leakage to other airports is a factor.

Phyllis Dagel of Lake Benton, Minn., about 20 miles east of Brookings, usually flies out of Sioux Falls or Minneapolis. She has never used the Brookings airport.

"It's just wherever we can get the best deal," she said. "In Minneapolis, we have family."

In Huron, Cooper said prices and reliability are two reasons passenger traffic has decreased.

"It comes down to pricing and available options," Cooper said of the Huron airport, which in the past two years lost 50 percent of its passengers. "I don't think anybody would prefer to drive, but pricing is important."

Huron, which receives subsidized service from Great Lakes Airlines, has problems with cancellations, flight delays and service changes, Cooper said. In the past several years, passenger traffic decreased from 5,000 to 1,100.

"I think we've proven our ability to board people in the past, if we get a good air service," Cooper said.

In Pierre, where many government employees rely on flights to Denver, essential air service is important, said Mason Short, airport manager. But during the past year, the airline decreased its flights to Denver and Minneapolis by 25 percent.

"Up here, we are a little bit farther away from Sioux Falls or Rapid City ... so that three-hour drive is a justification for continuing our air service," Short said.

Losing an airport could hurt a city's ability to attract new business and residents.

"Any kind of transportation - whether it's air or ground -Êis key to economic development," said Toby Morris, director of business and community development for the South Dakota Governor's Office of Economic Development. "The last thing we really want to do is lose any more service in this state."

Pierre officials are working with area businesses and residents to find out what services they want in a regional airport, said Laurie Gill, airport commissioner.

"Our main goal is to have them use the Pierre Regional Airport versus driving out of the city to fly," Gill said.

In Huron, city officials are going to apply for air service through Brookings and to Omaha instead of to Minneapolis, Cooper said.

"We want to offer something that nobody else in the state offers as a way to get boarding back," Cooper said.

Argus Leader wire services were used in this report. Reach business reporter Kelly Hildebrandt at 331-2322 or via e-mail at khildebr@argusleader.com.

Proposed Cuts are Latest Challenge

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