Essential Air Service (EAS):
Frequently Asked Questions
Rachel Tang
Analyst in Transportation and Industry
October 3, 2012
Congressional Research Service
7-5700
www.crs.gov
R41666
CRS Report for Congress
Pr
epared for Members and Committees of Congress
Essential Air Service (EAS): Frequently Asked Questions
Contents
Introduction...................................................................................................................................... 1
What Is Essential Air Service?......................................................................................................... 1
What Are the Eligibility Requirements?.......................................................................................... 2
How Is EAS Funded? ...................................................................................................................... 3
How Does DOT Select EAS Carriers? ............................................................................................ 4
What Is EAS Hold-In Authority?..................................................................................................... 4
How Many Communities Are Receiving EAS Subsidies? .............................................................. 5
Tables
Table 1. Essential Air Service Funding (FY2011-FY2015)............................................................. 3
Table 2. List of Subsidized EAS Outside of Alaska ........................................................................ 5
Table 3. List of Subsidized EAS in Alaska ...................................................................................... 9
Contacts
Author Contact Information........................................................................................................... 10
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Essential Air Service (EAS): Frequently Asked Questions
Introduction
On February 14, 2012, President Obama signed into law a four-year reauthorization of Federal
Aviation Administration (FAA) programs, the FAA Modernization and Reform Act of 2012 (P.L.
112-95; hereinafter referred to as the 2012 FAA Reauthorization Act). The act is the first long-
term authorization for federal civil aviation programs since 2007, and was enacted following 23
short-term extensions.
The Essential Air Service (EAS) program was a focus of controversy during this legislative
process. The final legislation included policy reforms and changes to the funding of the EAS
program.
This report provides an overview of the EAS program and discusses the changes introduced by
the FAA reauthorization bill.1
What Is Essential Air Service?
The Airline Deregulation Act of 1978 (P.L. 95-504) gave airlines almost total freedom to
determine which domestic markets to serve and what airfares to charge. This raised the concern
that communities with relatively low passenger levels would lose service as carriers shifted their
operations to serve larger and often more-profitable markets.
To address this concern, Congress added Section 419 to the Federal Aviation Act,2 which
established the Essential Air Service (EAS) program to ensure that smaller communities could
retain a link to the national air transportation system. The purpose of the EAS program was to
provide a continuation of service to those small communities that were served by certificated air
carriers before deregulation, with subsidies if necessary. It continues to ensure at least a minimum
level of air service to small communities which would otherwise be unprofitable for commercial
airlines.
The EAS program is administered by the Department of Transportation (DOT),3 which
determines the minimum level of service required at each eligible community by specifying
• a hub through which the community is linked to the national network;
• a minimum number of round trips and available seats that must be provided to
that hub;
• certain characteristics of the aircraft to be used; and
• the maximum permissible number of intermediate stops to the hub.
1 The major source used for this report is information and data of the Essential Air Service Program provided by the
U.S. Department of Transportation (DOT), Office of Aviation Analysis, http://ostpxweb.dot.gov/aviation/X-
50%20Role_files/essentialairservice.htm, as viewed on September 20, 2012.
2 Effective June 1994, the Federal Aviation Act was recodified as subtitles II, III, and V-X of 49 U.S.C.,
“Transportation.” The former Section 419 of the Federal Aviation Act is now 49 U.S.C. Sections 41731-41742.
3 The EAS program is administered by the Office of the Secretary of Transportation.
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Essential Air Service (EAS): Frequently Asked Questions
Where necessary, DOT provides federal subsidies to a carrier to ensure that the specified level of
service is provided.
What Are the Eligibility Requirements?
The Airline Deregulation Act of 1978 made communities receiving scheduled air service from a
certificated carrier on October 24, 1978, eligible for EAS benefits. At that time, there were 746
eligible communities, including approximately 200 in Alaska.
Over the years, Congress and DOT have worked to streamline the program and make it more
efficient, mostly by eliminating subsidy support for communities within a reasonable driving
distance from a major hub airport. The 2012 FAA Reauthorization Act adopted additional EAS
reform measures, including Section 421, which amends the definition of an “EAS eligible place”4
to require a minimum number of daily enplanements.
Under the act, for locations to remain EAS-eligible they must have participated in the EAS
program at any time between September 30, 2010, and September 30, 2011. An EAS-eligible
place is now defined as a community that, during this period, either received EAS for which
compensation was paid under the EAS program or received from the incumbent carrier a 90-day
notice of intent to terminate EAS following which DOT required it to continue providing service
to the community (known as “holding in” the carrier). Starting October 1, 2012, no new
communities can enter the program should they lose their unsubsidized service.
This change limits EAS subsidies to those already receiving them and, in effect, eliminates the
eligibility of airports that were formerly eligible but did not receive subsidies at any time between
September 30, 2010, and September 30, 2011.
These EAS communities from FY2011 remain eligible for EAS subsidy if5
• they are located more than 70 miles from the nearest large or medium hub
airport;
• they require a rate of subsidy per passenger of $200 or less, unless the
community is more than 210 miles from the nearest hub airport;
• the average rate of subsidy per passenger is less than $1,000 during the most
recent fiscal year at the end of each EAS contract, regardless of the distance from
hub airport;
• the communities have an average of 10 or more enplanements per service day
during the most recent fiscal year beginning after September 30, 2012,6 unless
these locations are more than 175 driving miles from their nearest medium or
4 49 U.S.C. §41731.
5 The Department of Transportation Appropriations Act of 2000 (P.L. 106-69) Section 332 enacted the 70-mile rule and
the $200-per-passenger subsidy rule.
6 In effect, it would push the implementation of these criteria into FY2014.
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Essential Air Service (EAS): Frequently Asked Questions
large hub airport or if DOT is satisfied that any decline below 10 enplanements is
temporary.7
These limitations apply only to the contiguous 48 states and Puerto Rico. EAS communities in
Alaska and Hawaii are exempt from these requirements.
How Is EAS Funded?
The EAS program is funded through annual transfers of fees paid to FAA by foreign aircraft
overflying the United States, supplemented by annual appropriations of varying size. In FY2011,
the total EAS authorization was $200 million, including $50 million in annual mandatory funding
from FAA overflight fees, along with a discretionary appropriation of $150 million.
Section 428 of the FAA Modernization and Reform Act authorizes appropriation for the
discretionary portion of EAS funding of $143 million for FY2012, followed by gradually
decreasing annual funding over the next three years: $118 million for FY2013; $107 million for
FY2014; and $93 million for FY2015. However, it also authorizes all overflight fee revenues,
rather than just the $50 million provided historically, to be made immediately available to the
EAS program.
Consequently, while there seem to be annual reductions in spending levels for the program, these
discretionary funding cutbacks are expected to be matched by an increase in mandatory funds
generated by an increase in the revenues from overflight fees charged on foreign aircraft that fly
through U.S. airspace but do not land in the country. As a result, funding of the EAS program is
projected to remain at $193 million each year from FY2013 to FY2015 (see Table 1).
Table 1. Essential Air Service Funding (FY2011-FY2015)
(in Millions)
FY2011 FY2012 FY2013 FY2014 FY2015
Discretionary
$ 150
$ 143
$ 118
$ 107
$ 93
Appropriation
Overflight Fee
$ 50
$ 50
$ 75
$ 86
$ 100
Collections
Total Funding
$ 200
$ 193
$ 193
$ 193
$ 193
Source: U.S. Department of Transportation.
Note: Projected overflight fee col ections provided by Office of Management and Budget (OMB) Max Database.
7 An April 2000 General Accounting Office (GAO) report, Essential Air Service: Changes in Subsidy Levels, Air
Carrier Costs, and Passenger Traffic (GAO/RCED-00-34), provided analysis of EAS passenger traffic and subsidy
levels. This minimum-enplanement requirement could affect a small number of EAS communities, based on historical
data.
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Essential Air Service (EAS): Frequently Asked Questions
How Does DOT Select EAS Carriers?
DOT issues a request for proposals (RFP) to all scheduled carriers to provide service to an
eligible community and institutes a carrier selection proceeding using a bid system. However,
DOT does not automatically select the carrier submitting the lowest bid because DOT is required
by the governing statutes to use the following four criteria when selecting air carriers to serve
EAS communities:
• service reliability;
• contractual and marketing arrangements with a larger carrier at the hub;
• interline arrangements with a larger carrier at the hub; and
• community views.
The RFPs from DOT advise air carriers that their proposals for subsidy should be submitted on a
sealed bid, “best and final” basis, and set forth the level of service (frequency, aircraft size, and
hubs) that would be appropriate for the community given its location and traffic history. Once the
carrier proposals are received, DOT formally solicits the views of the communities as to which
carrier and option they prefer.
After receiving the communities’ input, DOT issues a decision designating the selected air carrier
and specifying the specific service pattern (routing, frequency, and type of aircraft), annual
subsidy rate, and effective period of the rate. DOT generally establishes a two-year EAS service
contract, which allows for the competitive bidding process and gives communities and DOT
flexibility to switch carriers.
What Is EAS Hold-In Authority?
If the last air carrier serving an EAS community wants to discontinue service, it must first file a
90-day notice of its intent to suspend service under the EAS statutes. Hold-in authority prevents
the incumbent carrier from suspending service until a replacement carrier begins service.
During the 90-day period, DOT will try to find a carrier willing to enter the market on a subsidy-
free basis. If unsuccessful, DOT issues an order prohibiting the suspension and requesting
proposals for replacement service, either with or without subsidy.
The incumbent carrier is eligible for compensation for being held in after the end of its original
90-day notice period, if it was serving a community subsidy-free. If the incumbent was already
serving a community with EAS subsidy, that carrier would continue to receive the same subsidy
rate for six months, at which time it is eligible for a rate increase.8
8 The six-month period discourages carriers from deliberately submitting below-cost proposals to get selected and
immediately coming back to DOT hoping to get a higher subsidy rate.
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Essential Air Service (EAS): Frequently Asked Questions
How Many Communities Are Receiving
EAS Subsidies?
DOT currently subsidizes air service to serve more than 160 communities across the country that
otherwise would not receive any scheduled commercial air service. As of May 1, 2012, DOT was
subsidizing service at 120 communities in the contiguous 48 states, Hawaii, and Puerto Rico, and
43 communities in Alaska. In general, DOT subsidizes two to four round trips a day with small
aircraft from an EAS community to a major hub airport.
Table 2 provides a list of the subsidized EAS communities in the contiguous 48 states, Hawaii,
and Puerto Rico, together with their annual subsidy rates, as of October 1, 2012. Table 3 lists the
subsidized EAS communities in Alaska and their annual subsidy rates (as of October 1, 2012).
Table 2. List of Subsidized EAS Outside of Alaska
Number of
EAS Subsidy
EAS
Rate as of
State
Communities EAS
Community Hub(s)
Oct. 1, 2012
Alabama 1
Muscle
Shoals
MEM
$2,603,365
Arizona 4
Kingman
PHX
$1,168,390
Arizona
Page
PHX
$1,559,206
Arizona
Prescott
LAX/DEN $1,832,233
Arizona
Show
Low
PHX
$1,719,058
Arkansas 4
El
Dorado/Camden DAL/MEM
$2,436,074
Arkansas
Harrison
MEM/MCI $2,080,318
Arkansas
Hot
Springs
DAL/MEM $1,474,388
Arkansas
Jonesboro
STL
$1,717,781
California 4
Crescent
City
SFO
$1,996,959
California
El
Centro
LAX
$1,852,091
California
Merced
LAX
$1,698,878
California
Visalia
LAX
$1,697,929
Colorado 3
Alamosa
DEN
$2,078,676
Colorado
Cortez
DEN
$2,240,766
Colorado
Pueblo
DEN
$1,592,276
Georgia 2
Athens
ATL
$1,051,386
Georgia
Macon
ATL
$1,946,266
Hawai 1
Kalaupapa
HNL/MKK
$932,772
Illinois 3
Decatur
ORD/STL
$2,750,435
Illinois
Marion/Herrin
STL
$2,053,783
Illinois
Quincy
STL
$1,946,270
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Essential Air Service (EAS): Frequently Asked Questions
Number of
EAS Subsidy
EAS
Rate as of
State
Communities EAS
Community Hub(s)
Oct. 1, 2012
Iowa 5
Burlington
ORD/STL
$1,976,872
Iowa
Fort
Dodge
MSP $1,798,693
Iowa
Mason
City
MSP $1,174,468
Iowa
Sioux
City
ORD $1,512,799
Iowa
Waterloo
ORD $1,541,824
Kansas 6
Dodge
City
DEN
$1,688,598
Kansas
Garden
City
DFW $2,919,026
Kansas
Great
Bend
DEN
$1,082,020
Kansas
Hays
DEN
$2,164,041
Kansas
Liberal/Guymon
DEN
$2,555,150
Kansas
Salina
MCI
$1,490,479
Kentucky 2
Owensboro
STL
$1,529,913
Kentucky
Paducah
ORD
$1,710,775
Maine 4
Augusta/Waterville
BOS
$1,362,616
Maine
Bar
Harbor
BOS $1,631,223
Maine
Presque
Isle/Houlton
BOS $4,341,967
Maine
Rockland
BOS $1,420,545
Maryland 1
Hagerstown
BWI
$1,368,273
Michigan 9
Alpena
DTW
$2,554,977
Michigan
Escanaba
DTW
$2,833,558
Michigan
Hancock/Houghton
ORD
$934,156
Michigan
Iron
Mountain/Kingsford
DTW/MSP $2,512,971
Michigan
Ironwood/Ashland
MKE
$1,747,326
Michigan
Manistee
MDW
$2,143,294
Michigan
Muskegon
ORD
$1,576,067
Michigan
Pellston
DTW
$1,055,322
Michigan
Sault Ste. Marie
DTW
$1,676,136
Minnesota 5
Bemidji
MSP
$1,338,293
Minnesota
Brainerd
MSP
$1,356,764
Minnesota
Chisholm/Hibbing
MSP
$2,517,770
Minnesota
International
Falls
MSP
$1,107,900
Minnesota
Thief River Falls
MSP
$1,881,815
Mississippi 4
Greenville
MEM
$3,522,398
Mississippi
Hattiesburg/Laurel
MEM
$2,965,667
Mississippi
Meridian
ATL
$1,681,857
Mississippi
Tupelo
MEM
$3,522,398
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Essential Air Service (EAS): Frequently Asked Questions
Number of
EAS Subsidy
EAS
Rate as of
State
Communities EAS
Community Hub(s)
Oct. 1, 2012
Missouri 4
Cape
Girardeau
STL
$1,469,715
Missouri
Fort Leonard Wood
STL
$2,437,766
Missouri
Joplin
DFW
$2,778,756
Missouri
Kirksville
STL
$1,648,249
Montana 9
Butte
SLC $672,230
Montana
Glasgow
BIL
$1,166,049
Montana
Glendive
BIL
$1,193,391
Montana
Havre
BIL
$1,162,329
Montana
Lewistown
BIL
$1,325,733
Montana
Miles
City
BIL
$1,621,821
Montana
Sidney
BIL
$2,932,152
Montana
West
Yellowstone
SLC
$389,412
Montana
Wolf
Point
BIL
$1,502,378
Nebraska 7
Alliance
DEN
$1,108,701
Nebraska
Chadron
DEN
$1,108,701
Nebraska
Grand
Island
DFW
$2,215,582
Nebraska
Kearney
DEN
$1,965,740
Nebraska
McCook
DEN
$1,796,795
Nebraska
North
Platte
DEN
$1,871,765
Nebraska
Scottsbluff
DEN
$1,507,185
Nevada 1
Ely
LAS
$1,752,067
New Hampshire
1
Lebanon/White River Jct.
BOS/HPN
$2,347,744
New Mexico
3
Carlsbad
ABQ
$1,350,253
New Mexico
Clovis
ABQ
$1,592,157
New Mexico
Silver City/Hurley/Deming
ABQ
$1,594,092
New York
6
Jamestown
CLE
$1,639,254
New York
Massena
ALB
$1,708,911
New York
Ogdensburg
ALB
$1,702,697
New York
Plattsburgh
BOS
$2,685,207
New York
Saranac Lake/Lake Placid
BOS
$1,366,538
New York
Watertown
ORD
$3,047,972
North Dakota
3
Devils Lake
MSP
$2,797,467
North Dakota
Dickinson
DEN
$2,019,177
North Dakota
Jamestown
MSP
$1,987,655
Oregon 1
Pendleton
PDX
$1,502,521
Pennsylvania 6
Altoona
IAD $1,998,594
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Essential Air Service (EAS): Frequently Asked Questions
Number of
EAS Subsidy
EAS
Rate as of
State
Communities EAS
Community Hub(s)
Oct. 1, 2012
Pennsylvania
Bradford
CLE
$1,087,306
Pennsylvania
DuBois
CLE
$2,228,996
Pennsylvania
Franklin/Oil
City
CLE
$915,101
Pennsylvania
Johnstown
IAD
$1,998,594
Pennsylvania
Lancaster
BWI
$1,647,112
Puerto Rico
1
Mayaguez
SJU
$1,198,824
South Dakota
3
Aberdeen
MSP
$1,198,222
South Dakota
Huron
DEN
$1,742,886
South Dakota
Watertown
MSP
$1,710,324
Tennessee 1
Jackson
BNA/MEM
$1,149,703
Texas 1
Victoria
IAH
$2,294,036
Utah 3
Cedar
City
SLC
$1,859,403
Utah
Moab
DEN $1,816,486
Utah
Vernal
DEN $1,299,194
Vermont 1
Rutland
BOS $797,141
Virginia 1
Staunton
IAD
$3,394,629
West Virginia
5
Beckley
IAD
$2,512,494
West Virginia
Clarksburg
IAD
$1,728,125
West Virginia
Greenbrier/White Sulphur Springs
ATL/IAD
$3,484,710
West Virginia
Morgantown
IAD
$1,488,219
West Virginia
Parkersburg/Marietta
CLE
$2,642,237
Wisconsin 2
Eau
Claire
ORD
$1,733,576
Wisconsin
Rhinelander
MSP
$1,519,619
Wyoming 3
Cody
SLC $352,058
Wyoming
Laramie
DEN
$1,181,572
Wyoming
Worland
DEN
$1,770,336
Total
120
$218,344,908
Source: Office of Aviation Analysis, U.S. Department of Transportation (DOT).
Note: Information provided in Table 2 is subject to change.
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Essential Air Service (EAS): Frequently Asked Questions
Table 3. List of Subsidized EAS in Alaska
Alaskan EAS Community
Hub(s)
EAS Subsidy Rate as of Oct. 1, 2012
Adak ANC
$1,675,703
Akutan DUT $710,157
Alitak ADQ
$13,179
Amook Bay
ADQ
$13,179
Angoon JNU $145,734
Atka DUT
$492,894
Cape Yakataga
YAK
$39,000
Central FAI $137,799
Chatham JNU
$6,311
Chisana TOK $81,040
Circle FAI $137,799
Cordova
ANC/JNU
$2,154,200
Elfin Cove
JNU
$75,391
Excursion Inlet
JNU
$27,111
Funter Bay
JNU
$13,273
Gulkana ANC $262,220
Gustavus
JNU
$538,550
Healy Lake
FAI
$104,703
Hydaburg KTN $151,773
Icy Bay
YAK
$39,000
Kake JNU
$163,621
Kitoi Bay
ADQ
$13,179
Lake Minchumina
FAI
$93,080
Manley FAI $45,534
May Creek
GKN
$88,346
McCarthy GKN $88,346
Minto FAI $45,534
Moser Bay
ADQ
$13,179
Nikolski DUT $595,508
Olga Bay
ADQ
$13,179
Pelican JNU $185,721
Petersburg JNU/KTN
$1,707,994
Port Alexander
SIT
$75,293
Port Bailey
ADQ
$13,179
Port Williams
ADQ
$13,179
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Essential Air Service (EAS): Frequently Asked Questions
Alaskan EAS Community
Hub(s)
EAS Subsidy Rate as of Oct. 1, 2012
Rampart FAI
$97,679
Seal Bay
ADQ
$13,179
Tenakee JNU $135,576
Uganik ADQ $13,179
West Point
ADQ
$13,179
Wrangell JNU/KTN
$1,707,994
Yakutat ANC/JNU
$2,154,200
Zachar Bay
ADQ
$13,179
Total
$14,122,056
Source: Office of Aviation Analysis, U.S. Department of Transportation (DOT).
Note: Information provided in Table 3 is subject to change.
Author Contact Information
Rachel Tang
Analyst in Transportation and Industry
rtang@crs.loc.gov, 7-7875
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