United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Aviation, 

Committee on Commerce, Science and 

Transportation, U.S. Senate 

COMMERCIAL AVIATION

Programs and Options for 

the Federal Approach to 

Providing and Improving Air 

Service to Small 

Communities 

Statement of Gerald L. Dillingham, Director 

Physical Infrastructure Issues 

For Release on Delivery

Expected at 10:00 a.m. EDT 

Thursday, September 14, 2006 

 

GAO-06-398T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 14, 2006

COMMERCIAL AVIATION 

Programs and Options for the Federal 

Approach to Providing and Improving Air 

Service to Small Communities 

Highlights of GAO-06-398T, a report to the 

Subcommittee on Aviation, Committee on 

Commerce, Science and Transportation, 

U.S. Senate 

Over the last decade, significant 

changes have occurred in the 

airline industry. Network carriers 

are facing challenging financial 

conditions and low-cost carriers 

are attracting passengers away

from some small community

airports. These changes, and 

others, have challenged the ability 

of small communities to attract 

adequate commercial air service.

In response to these challenges, 

Congress has established two key 

funding programs—the Essential 

Air Service (EAS) and the Small 

Community Air Service 

Development Program

(SCASDP)—to help small 

communities retain or attract air 

service. However, the 

sustainability of such funding could 

be affected by the federal 

government’s fiscal imbalance. In

addition, GAO reports have raised 

questions about how these 

programs support commercial air 

service to small communities. 

Given this environment, this

testimony discusses (1) the 

development and impact of EAS,

(2) the status of SCASDP and (3) 

options for reforming EAS and

evaluating SCASDP. The testimony 

is based on previous GAO research

and interviews related to these 

programs, along with program 

updates. 

The EAS program guarantees that communities that were served by air 

carriers before deregulation continue to receive a certain level of scheduled 

air service, under certain conditions. A growing number of communities are 

receiving subsidies under this program and funding for the EAS program has 

risen more than four-fold over the past 10 years. The federal subsidies have

resulted in continued air service to the EAS communities, but if the subsidies 

were removed, air service might end at many of these communities. 

SCASDP grantees have used their grants to pursue a variety of goals and 

have used a variety of strategies, including marketing and revenue 

guarantees, to improve air service. The program has had mixed results: 11 of 

the 23 projects completed as of September 30, 2005, showed self-sustaining 

improvements to air service; while the remaining 12 grantees either 

discontinued the improvement or the improvement was not self-sustaining. 

Finally, the number of applications for SCASDP grants has declined—from 

179 in 2002 to 75 in 2006.

There are options for reforming EAS such as consolidating service into 

regional airports, which might make it more cost-effective, but also could 

reduce service to some communities. In 2003, Congress established several 

programs as alternatives for EAS, but these programs have not progressed. 

The Department of Transportation has agreed to evaluate completed 

SCASDP projects, an effort that will be useful when Congress considers the 

reauthorization of this program in 2008; this could also identify “lessons 

learned” from successful projects. 

EAS Communities as of May 2006; SCASDP Communities, 2002-2006 

AK PR

HI

SCASDP only EAS only Both

Source: GAO.

www.gao.gov/cgi-bin/getrpt?GAO-06-398T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gerald

Dillingham at (202) 512-2834 or 

dillinghamg@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

We appreciate the opportunity to testify today on issues related to the 

federal approach to providing air service to small and underserved 

communities. Over the last decade, significant changes have occurred in 

the airline industry that have affected service to small communities. 

Service to small communities decreased as a result of the weak financial 

condition of the airline industry that was exacerbated by the events of 

September 11, 2001. Some network carriers are still facing challenging 

financial conditions which can negatively affect small community air 

service.1

 For example, small communities may become cost-cutting targets 

because they are often the carrier’s least profitable operation. This, as well 

as other changes, have challenged small communities to obtain adequate

commercial air service at reasonable prices.2

Two key federal programs help support air service to small communities—

the Essential Air Service (EAS) program and the Small Community Air 

Service Development Program (SCASDP).3

 EAS, established after airline 

deregulation in 1978, is designed to ensure that small communities that 

received scheduled passenger air service before deregulation continue to 

have access to the nation’s air transportation system. In fiscal year 2006,

Congress appropriated about $109 million to the Department of 

Transportation (DOT) for EAS. For fiscal year 2007, the administration 

requested that $50 million be allocated for the program and paid for by 

overflight fees,4

 while both the House and Senate Appropriations 

Committees are proposing $117 million for the program. Congress 

established SCASDP in 2000 and has appropriated $20 million annually 

 1

The U.S. network carriers are Alaska Airlines, American Airlines, Continental Airlines,

Delta Air Lines, Northwest Airlines, United Airlines, and US Airways. 

2

The nation’s commercial airports are categorized into four main groups based on annual

passenger enplanements—large hubs, medium hubs, small hubs, and nonhubs. The 30 large 

hubs and 37 medium-hub airports together enplaned about 89 percent of the almost 703 

million U.S. passengers in 2004. In contrast, the 69 small hubs enplaned about 8 percent,

and the 374 nonhub airports enplaned about 3 percent of U.S. passengers.

3

Small community airports also receive other financial support from the federal 

government. For example, under the Airport Improvement Program small airports receive 

certain funds for addressing capital improvement needs—such as for runway or taxiway 

improvements. 

4

 Overflight fees are user fees for air traffic control services provided by the Federal 

Aviation Administration (FAA) to aircraft that fly over, but do not land in the United States,

as authorized by the Federal Aviation Reauthorization Act of 1996 (P.L. 104-264). 

Page 1 GAO-06-398T 
from 2002 through 2005 for DOT to award up to 40 grants each year to 

communities that have demonstrated air-service deficiencies or higherthan-average fares. However, in fiscal year 2005, DOT transferred $5 

million of these funds from SCASDP to EAS.5

 For fiscal year 2006, 

Congress authorized $10 million. For fiscal year 2007, the administration 

proposed no funding for SCASDP while the House and Senate 

Appropriations Committees are proposing $20 million and $10 million, 

respectively. In addition, we have reported that it was too early to assess 

the effectiveness of SCASDP and have raised questions about the current 

structure of EAS. 

While the airline industry has been facing fiscal challenges, the federal 

government’s financial condition and long-term fiscal outlook also 

deteriorated. We have reported on the nation’s long-term fiscal imbalances 

and the need for a fundamental and periodic reexamination of the base of 

government, ultimately covering discretionary and mandatory programs as 

well as the revenue side of the budget.6

 In light of these challenges, we 

have identified some options for reforming EAS and recommended that 

DOT evaluate SCASDP. 

My testimony today will discuss (1) the development and impact of EAS, 

(2) the status of SCASDP, and (3) options for reforming EAS and 

evaluating SCASDP. My statement is based primarily on the body of 

research that we have conducted related to these programs, program 

updates, and recent interviews with (and data from) key stakeholders. We

obtained information on the status of projects from the Office of the 

Secretary (OST). Based on assessments conducted during previous 

reviews, we concluded that the data are reliable for the purposes of this 

report. Appendix V contains a list of our related testimonies and reports. 

We conducted our work on EAS from March through December 2002 and

our work on SCASDP from September 2004 through October 2005 in 

accordance with generally accepted government auditing standards. 

 5

The Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, 

and Tsunami Relief, 2005, Pub. L. No. 109-13, recognized that the funds appropriated for

EAS may not be sufficient to meet the service needs of communities encompassed by that

program. The Emergency Supplemental Appropriations Act provided that the Secretary of

Transportation could transfer “such sums as may be necessary to carry out the essential air 

service program from any available amounts appropriated to or directly administered by 

the Office of the Secretary.” 

6

GAO, 21st Century Challenges: Reexamining the Base of Federal Government. 

GAO-05-325SP. (Washington, DC: 2005). February 2005. 

Page 2 GAO-06-398T 
In summary: 

• In recent years, a growing number of communities have received subsidies 

under EAS—expanding from 95 communities in fiscal year 1997 to 152 in

fiscal year 2006. Similarly, funding for EAS has risen more than four-fold 

over this 10-year period—from $25.9 million in fiscal year 1997 to $109.4 

million in fiscal year 2006. In addition, EAS funds were used to subsidize 

about 1 million passenger enplanements in 2004—about 0.15 percent of 

the nation’s 706 million annual passenger enplanements.7

 It is possible that 

air service might end at many of these communities, if these subsidies 

were removed. 

• Our recent review of SCASDP found that the number of grant applications 

was declining, grantees were pursuing a variety of goals and strategies for 

supporting air service, and completed grants had mixed results. 

Specifically, we found that the number of applications for SCASDP has 

declined—from 179 in 2002 to 75 in 2006. We also found that the goals 

grantees are pursuing include trying to add flights and destinations, or 

trying to obtain lower fares. The different strategies grantees are 

employing to improve air service in their communities include offering 

subsidies or revenue guarantees to airlines, marketing, hiring personnel, 

and conducting studies. Finally, although we could not assess the 

effectiveness of the program, since few projects—23 of 157—had been 

completed at the time of our review, we found the results of the completed 

projects were mixed. Of the 23 projects, 11 had implemented a selfsustaining improvement to air service, while the remaining 12 had not. 

• To ensure the effective use of scarce resources, these programs need to be 

examined and options for program improvement need to be addressed. We 

have previously reported on some options for changing EAS to potentially

make it more cost-effective. These options include (1) targeting subsidized 

service to more remote communities, (2) better matching capacity with 

community use, (3) consolidating service to multiple communities into 

regional airports, and (4) changing the form of the federal assistance from 

carrier subsidies to local grants. These changes require legislative action. 

Although these options might make EAS more cost-effective, they could 

also reduce service to some areas. In 2003, the Vision 100-Century of 

Aviation Reauthorization Act, (Vision-100) provided for several alternative 

programs for EAS communities. However, these programs have not 

progressed due, in part, to a lack of response from EAS communities. 

 7

The analysis is based on 2004 national enplanement data—the most recent data available. 

Page 3 GAO-06-398T 
Regarding SCASDP, as we recommended, DOT plans to conduct a 

comprehensive evaluation of completed projects after fiscal year 2006. The 

results of such an evaluation will be useful when Congress considers the 

reauthorization of this program in 2008 and could result in identifying 

“lessons learned” from successful projects. These lessons could be shared 

with other small communities that are trying to improve air service, and, if

needed, to reform and refocus the program. 

Before I discuss these issues in detail, let me sketch the background of air 

service to small communities and these programs. Air service to many 

small communities has declined in recent years, particularly after the 

September 11, 2001 attacks. As of 2005, scheduled departures at small-, 

medium-, and large-hub airports had largely returned to 2000 levels. 

However, departures from nonhub airports continued to decline—the 

number of departures declined 17 percent at nonhub airports between July

2000 and July 2005. Small-hub airports actually had more scheduled 

departures in July 2005 than in July 2000, a fact that clearly distinguishes 

them from nonhub airports. 

Several factors may help explain why some small communities, especially 

nonhubs, face relatively limited air service. First, small communities can 

become cost-cutting targets of air carriers because they are often a 

carrier’s least profitable operation. Consequently, many network carriers 

have cut service to small communities and regional carriers now operate 

at many small communities where the network carriers have withdrawn.8

Second, the “Commuter Rule” that FAA enacted in 1995 brought small 

commuter aircraft under the same safety standards as larger aircraft—a 

change that made it more difficult to economically operate smaller 

aircraft, such as 19-seat turboprops.9

 For example, the Commuter Rule 

required commuter air carriers who flew aircraft equipped with 10 or more 

seats to improve ground deicing programs and carry additional passenger

safety equipment. Additionally, the 2001 Aviation and Transportation 

Background 

 8

A network carrier operates a significant portion of its flights using at least one hub where

connections are made for flights on a spoke system. Regional carriers provide service from 

small communities primarily using regional jets to connect the network carriers’ hub-andspoke system. 

9

 Code of Federal Regulations Title 14 Part 121 (14 CFR Part 121) provides details on 

aircraft certification requirements for aircraft that operate scheduled service with 10 or 

more seats. The Commuter Rule was instituted with 60 Fed. Reg. 65832, December 20, 

1995. 

Page 4 GAO-06-398T 
Security Act instituted the same security requirements for screening 

passengers at smaller airports as it did for larger airports, sometimes 

making travel from small airports less convenient than it had been.10 Third, 

regional carriers had reduced the use of turboprops in favor of regional 

jets, which had a negative effect on small communities that have not 

generated the passenger levels needed to support regional jet service. 

Finally, many small communities experience passenger “leakage”—that is, 

passengers choosing to drive longer distances to larger airports instead of 

using closer small airports. Low-cost carriers have generally avoided flying

to small communities but have offered low fares that encourage 

passengers to drive longer distances to take advantage of them.

11

Mr. Chairman, as you know, Congress established EAS as part of the 

Airline Deregulation Act of 1978 to help areas that face limited service. 

The act guaranteed that communities served by air carriers before 

deregulation would continue to receive a certain level of scheduled air 

service.12 In general, the act guaranteed continued service by authorizing 

DOT to require carriers to continue providing service at these

communities. If an air carrier could not continue that service without 

incurring a loss, DOT could then use EAS funds to award that carrier a 

subsidy.13 Under the Airline Deregulation Act, EAS was scheduled to 

sunset, or end, after 10 years. In 1987, Congress extended the program for 

another 10 years, and in 1998, it eliminated the sunset provision, thereby 

permanently authorizing EAS. 

Funding for EAS comes from a combination of permanent and annual 

appropriations. The Federal Aviation Reauthorization Act of 1996 (P.L. 

104-264) permanently appropriated the first $50 million of such funding—

for EAS and safety projects at rural airports—from the collection of 

overflight fees. Congress can appropriate additional funds from the 

general fund on an annual basis. 

 10Aviation and Transportation Security Act, Section 110 of P.L. 107-71, 115 Stat. 597 (2001). 

11Low-cost carriers follow a business model that may include point-to-point service 

between high-density city pairs, a standardized fleet with high aircraft utilization, low fares,

and minimal onboard service.

12Special provisions guaranteed service to Alaskan communities. 

13Subsidies are used to cover the difference between a carrier’s projected revenues and 

expenses and to provide a minimum amount of profit. 

Page 5 GAO-06-398T 
To be eligible for this subsidized service, communities must meet three 

general requirements. They (1) must have received scheduled commercial 

passenger service as of October 1978, (2) may be no closer than 70 

highway miles to a medium- or large-hub airport, and (3) must require a 

subsidy of less than $200 per person (unless the community is more than 

210 highway miles from the nearest medium- or large-hub airport, in which 

case no average per-passenger dollar limit applies).14 Federal law also 

defines the service that subsidized communities are to receive under 

EAS.15 For example, carriers providing EAS flights are required to use 

aircraft with at least 15 seats unless the community seeks a waiver. In 

addition, flights are to occur at “reasonable times” and at prices that are 

“not excessive.” EAS operations to communities in Alaska are subject to 

different requirements (e.g., carriers may use smaller aircraft). 

Air carriers apply directly to DOT for EAS subsidies. Air carriers set the 

subsidy application process in motion when they file a 90-day notice of 

intent to suspend or terminate service. If no air carrier is willing to or able

to profitably provide replacement air service without a subsidy, DOT 

solicits proposals from carriers who are willing to provide service with a 

subsidy. DOT requires that air carriers submit historical and projected 

financial data, such as projected operating expenses and revenues, 

sufficient to support a subsidy calculation. DOT then reviews these data in

light of the aviation industry’s pricing structure, the size of aircraft 

required, the amount of service required, and the number of projected 

passengers who would use this service in the community.16 Finally, DOT 

selects a carrier and sets a subsidy amount to cover the difference 

between the carrier’s projected cost of operation and its expected 

 14The average subsidy per passenger does not equate to a specific portion of a passenger’s 

ticket price paid for by EAS funds. Ticket pricing involves a complex variety of factors

relating to the demand for travel between two points, the supply of available seats along 

that route, competition in the market, and how air carriers choose to manage and price 

their available seating capacity. 

1549 USC 41732. 

16DOT officials said that they check the reasonableness of the cost and revenue information

received from the air carriers against other data reported to DOT and in documents filed 

with the Securities and Exchange Commission. 

Page 6 GAO-06-398T 
passenger revenues, while providing the carrier with a profit element equal 

to 5 percent of total operating expenses, according to statute.17

Turning now to SCASDP, Congress authorized SCASDP as a pilot program 

in the Wendell H. Ford Aviation Investment and Reform Act for the 21st 

Century (AIR-21),18 to help small communities enhance their air service. 

AIR-21 authorized the program for fiscal years 2002 and 2003, and 

subsequent legislation19 reauthorized the program through fiscal year 2008 

and eliminated the “pilot” status of the program. 

The Office of Aviation Analysis in DOT’s Office of the Secretary is 

responsible for administering the program. The law establishing SCASDP 

allows DOT considerable flexibility in implementing the program and 

selecting projects to be funded. The law defines basic eligibility criteria 

and statutory priority factors, but meeting a given number of priority 

factors does not automatically mean DOT will select a project. DOT also 

considers many other relevant factors in making decisions on projects, 

and the final selection of projects is at the discretion of the Secretary of 

Transportation.20 (See app. I for a list of the factors used in DOT 

selections.) 

SCASDP grants may be made to single communities or a consortium of 

communities, although no more than four grants each year may be in the 

same state. Consortiums are considered one project for the purpose of this 

program. Inclusion of small hubs for eligibility means that some relatively 

large airports qualify for this program. For example, Buffalo Niagara 

International Airport in Buffalo, New York, and Norfolk International 

 17At any time throughout the year, an air carrier providing unsubsidized service to an EASeligible community can file a notice to suspend service if the carrier determines that it can 

no longer provide profitable service, thus triggering a carrier selection case. In addition,

after DOT selects an air carrier to provide subsidized service, that agreement is subject to 

renewal, generally every 2 years, at which time other air carriers are permitted to submit 

proposals to serve that community with or without a subsidy. 

18P.L. 106-181. 

19Vision-100, P.L. 108-176 

20DOT must give priority consideration to communities that (1) have air fares higher than 

average for all communities, (2) provide a portion of the cost of the project from local 

sources other than airport revenues, (3) have—or plan to establish—a public-private 

partnership to facilitate air carrier service to the public, (4) will provide material benefits to

a broad segment of the public that has limited access to the national air transportation 

system, and (5) will use the assistance in a timely manner.

Page 7 GAO-06-398T 
Airport in Norfolk, Virginia, are eligible for the program; these airports 

enplaned over 2.4 million and over 1.9 million passengers in 2005, 

respectively. In contrast, small nonhub airports, such as those in Moab, 

Utah (with about 2,600 enplanements) or Owensboro, Kentucky (with 

about 3,600 enplanements) are also eligible. SCASDP grants are also 

available in the 50 states, the District of Columbia, Puerto Rico, and U.S. 

territories and possessions. As shown in appendix II, DOT’s awards have 

been geographically spread out—covering all states except Delaware, 

Hawaii, Maryland, New Jersey, and Rhode Island. To date, no communities 

in Delaware or Rhode Island have applied for a grant. Appendix III 

includes information on all SCASDP grants awarded as of August 31, 2006. 

Mr. Chairman, demand for EAS subsidies has been growing over the past 

10 years, as has the amount of funds appropriated for the program. As 

shown in table 1, for fiscal year 2006, EAS is providing subsidies to air 

carriers to serve 154 communities—an increase of 57 communities over 

the 1997 low point.21 The funding for EAS has also grown from $25.9 

million in 1997 to $109.4 million in 2006. This amounts to an average of 

about $720,000 per EAS community in fiscal year 2006. Appendix II 

includes a map showing the locations of current EAS communities and 

appendix IV lists EAS communities and their current subsidy amounts. 

Table 1: EAS Program Appropriations and Communities Served, Fiscal Years 1992-

2006 

Number of Airports 

and Amount of EAS 

Subsidies Has Been 

Growing 

Fiscal year Number of communities 

Total EAS appropriations

 (in millions)

1992 130 $38.6

1993 126 38.6

1994 112 33.4

1995 107 33.4

1996 97 22.6

1997 95 25.9

1998 101 50.0

1999 100 50.0

2000 106 50.0

2001 115 50.0

 21The highest number of communities served during the program’s history was 405 in 1980.

Page 8 GAO-06-398T 
Fiscal year Number of communities 

Total EAS appropriations

 (in millions)

2002 123 113.0

2003 126 101.8

2004 140 101.7

2005 146 101.6

2006 154 109.4

Source: DOT. 

In addition, in recent years, the number of communities and states 

receiving EAS funding has increased. Since 1998, when a $50 million 

funding level was established, eight additional states now have EAS 

communities. These states include Alabama, Georgia, Kentucky, Maryland, 

Mississippi, Oregon, Tennessee and Virginia. Excluding Alaska, where 

different program rules apply, four states now have had significant 

increases in the total number of communities served by EAS, compared to 

1998. The number of EAS communities in Pennsylvania increased by five, 

West Virginia and Wyoming increased by four, and New York increased by

three. These states are now among the largest participants in the program, 

in terms of the number of communities served. 

In 2004, slightly more than 1 million passengers enplaned at airports that 

received EAS-subsidized service—about 0.15 percent of the more than 706 

million passenger enplanements in the United States that year.22 As of May 

1, 2006, 13 regional air carriers served the subsidized communities in the 

continental United States, and 15 served those in Alaska, Hawaii, and 

Puerto Rico. The carriers serving the communities in the continental 

United States typically used turboprop aircraft seating 19 passengers, 

whereas in Alaska, Hawaii, and Puerto Rico, the most commonly used 

aircraft seated 4 to 9 passengers. 

If EAS subsidies were removed, air service may end at many small 

communities. EAS subsidies have helped communities that were served by

air carriers before deregulation continue to receive scheduled air service. 

Since air carriers have to show financial data to support a subsidy 

calculation, it is likely that if the subsidy is no longer available commercial 

air service would also end. Furthermore, according to a DOT official, once

a community receives subsidized air service it is rare for an air carrier to

offer to provide unsubsidized air service. Finally, in previous work, we 

 22DOT did not have ridership data available for all EAS communities.

Page 9 GAO-06-398T 
reported that subsidies paid directly to air carriers have not provided an 

effective transportation solution for passengers in many small 

communities.23

Mr. Chairman, our previous work was not able to evaluate the overall

effectiveness of SCASDP; however, we found that SCASDP grantees 

pursued several goals and strategies to improve air service, and that the 

projects have obtained mixed results. In addition, the number of 

applications for SCASDP has declined each year. 

As shown in figure 1, in 2002 (the first year SCASDP was funded) DOT 

received 179 applications for grants; and by 2006 the number of 

applications had declined to 75. DOT officials said that this decline was, in

part, a consequence of several factors, including: (1) many eligible airport

communities had received a grant and were still implementing projects at 

the time; (2) the airport community as a whole was coming to understand 

the importance DOT places on a fulfilling the local contribution 

commitment part of the grant proposal; and (3) legislative changes in 2003 

that prohibited communities or consortiums from receiving more than one 

grant for the same project, and that established the timely use of funds as

a priority factor in awarding grants.24 There have been 182 grant awards 

made in the 5 years of the program. Of these, 56 grants are now 

completed—34 from 2002, 15 from 2003, and seven from 2004.25 Finally, as 

of August 31, 2006, DOT had terminated seven grants it initially awarded.26 

The Small Community 

Grant Program Has 

Had Mixed Results 

 23GAO, Commercial Aviation: Factors Affecting Efforts to Improve Air Service at Small 

Community Airports, GAO-03-330 (Washington, D.C.: 2003). January 17, 2003. 

24The authorizing legislation provides one limitation on the timing of expenditures. If funds

are used to subsidize air service, the subsidy cannot last more than 3 years. However, the

time needed to obtain the service is not included in the subsidy time limit. The legislation 

does not limit the timing of expenditures for other purposes. In fiscal year 2005, DOT 

issued an order specifying that in general, grant funds should be expended within 3 years.

25We considered a grant to be complete when the activities associated with the grant were 

finished and FAA had made final reimbursements of allowable costs.

26According to DOT officials, the agency only initiated the termination for the grant

awarded to Casper/Gillette, Wyoming. The communities awarded the other six grants 

requested the termination of the grants. 

Page 10 GAO-06-398T 
Figure 1: SCASDP Grant Proposals, Awards, Terminations, and Completions, 2002

– 2006 

Note: DOT granted 6 grants in 2004, from reallocated program funds. 

Although at the time of our review it was too soon to determine the overall 

effectiveness of the program, our review of the 23 projects completed by

September 30, 2005, found mixed results. The kinds of improvements in 

service that resulted from the grants included adding an additional air 

carrier, destination, or flights; or changing the type of aircraft serving the 

community. In terms of numbers, airport officials reported that 19 of the 

23 grants resulted in service or fare improvements during the life of the 

grant. In addition, during the course of the grant, enplanements rose at 19 

of the 23 airports. However, after the 23 SCASDP grants were completed, 

11 grants resulted in improvements that were self-sustaining. Three 

additional improvements were still in place, although not self-sustaining; 

thus 14 improvements were in place after the grants were completed. (See

fig. 2.) 

179

40

4 

34

4

170

36

3 2 

108

40

15

6 7

84

75

35

25

Year 

Number of grants

Source: GAO analysis of DOT data.

0

50

100

150

200

Terminated grants

Reallocated awards

Completed grants

Grant awards

Number of proposals

2002 2003 2004 2005 2006

Page 11 GAO-06-398T 
Charleston, West Virginia provides an example of a successful project. 

With the aid of a SCASDP grant, Charleston was able to add a new carrier

and new nonstop service to a major market, Houston. At the time of our 

review, and after the grant was completed, this service was continuing at 

the level the grant provided. 

Figure 2: Air Service Improvement during the Course of 23 Grants and after Project 

Completion 

Finally, for SCASDP grants awarded from 2002 though 2004, we surveyed

airport officials to identify the types of project goals they had for their 

grants. We found that grantees had identified a variety of project goals to 

improve air service to their community. These goals included adding 

flights, airlines, and destinations; lowering fares; upgrading the aircraft 

serving the community; obtaining better data for planning and marketing 

air service; increasing enplanements; and curbing the loss of passengers to 

other airports. (See fig. 3 for the number and types of project goals 

identified by airport directors.) 

Improvement in service

 or fares during the

course of the grant

After completion of grant, 

improvements reported

as still in place 

After completion of grant, 

improvements reported

as self-sustaining

19 14 11

Source: GAO.

Page 12 GAO-06-398T 
Figure 3: Project Goals as Identified by Airport Directors for Grants Awarded 2002 -

2004 

Note: The number of airport directors surveyed may exceed the number of grants in a year because

grants are sometimes awarded to consortiums of airports. We surveyed all grantee airports. 

To achieve these goals, grantees have used many strategies, including 

subsidies and revenue guarantees to the airlines, marketing, hiring 

personnel and consultants, and establishing travel banks in which a 

community guarantees to buy a certain number of tickets. (See fig. 4.) In 

addition, grantees have subsidized the start-up of an airline, taken over 

ground station operations for an airline, and subsidized a bus to transport 

passengers from their airport to a hub airport. Incorporating marketing as

0 5 10 15 20 25 30 35 40

2004

2003

2002

Other

Using larger or smaller aircraft

Completing a study

Adding new carriers

Providing lower fares

Providing service to new destinations

Increasing the frequencies of flights

Recapturing passenger traffic

Increasing enplanements

Increasing service

Goals

Number of airports

Source: GAO survey of grantee airport directors.

Page 13 GAO-06-398T 
part of the project was the most common strategy used by airports. Some 

airline officials said that marketing efforts are important for the success of

the projects. Airline officials also told us that projects that provide direct

benefits to an airline, such as revenue guarantees and financial subsidies, 

have the greatest chance of success. According to these officials, such 

projects allow the airline to test the real market for air service in a 

community without enduring the typical financial losses that occur when 

new air service is introduced. They further noted that, in the current 

aviation economic environment, carriers cannot afford to sustain losses 

while they build up passenger demand in a market. The outcomes of the 

grants may be affected by broader industry factors that are independent of 

the grant itself, such as a decision on the part of an airline to reduce the 

number of flights at a hub. 

Page 14 GAO-06-398T 
Figure 4: Strategies Included in Grant Projects 

Note: Since grant agreements were not available at the time of this analysis, 2006 figures are based

solely on proposals. 

0 10 20 30 40 50

2006

2005

2004

2003

2002

Other

Other subsidy

Personnel

Travel banks

Studies

Reduced airport fees/start-up costs

Revenue guarantee

Marketing

Projects

Number of grants

Source: GAO analysis of grantee proposals and grant agreements.

Page 15 GAO-06-398T 
Mr. Chairman, let me now turn to a discussion of options both for the 

reform of EAS and the evaluation of SCASDP. I raise these options, in part, 

because they link to our previous report on the challenges facing the 

federal government in the 21st century, which notes that the federal 

government’s long-term fiscal imbalance presents enormous challenges to 

the nation’s ability to respond to emerging forces reshaping American 

society, the United States’ place in the world, and the future role of the 

federal government.27 In our previous report, we call for a more 

fundamental and periodic reexamination of the base of government, 

ultimately covering discretionary and mandatory programs as well as the 

revenue side of the budget. In light of these challenges, Congress may wish 

to weigh options for reforming EAS and obtaining additional information 

about SCASDP’s effectiveness—information that could be obtained if DOT 

follows our recommendation to evaluate the program’s effectiveness once 

more grant projects have been completed. 

In previous work, we have identified options for enhancing the 

effectiveness of EAS and controlling cost increases. These options include 

targeting subsidized service on more remote communities than is currently 

the case, improving the matching of capacity with community use, 

consolidating service to multiple communities into regional airports, and 

changing the form of federal assistance from carrier subsidies to local 

grants; all of these options would require legislative changes. Several of 

these options formed the basis for reforms passed as part of Vision-100. 

For various reasons these pilot programs have not progressed, so it is 

premature to assess their impact. Let me now briefly discuss each option,

stressing at the outset that each presents potential negative, as well as 

positive, effects. The positive effects might include lowered federal costs,

increased passenger traffic at subsidized communities, and enhanced 

community choice of transportation options. Potential negative effects 

might include increased passenger inconvenience and an adverse effect on

local economies that may lose scheduled airline service. 

The first option would be to target subsidized service to more remote 

communities. This would mean increasing the highway distance criteria

between EAS-eligible communities and the nearest qualifying airport, and 

expanding the definition of qualifying nearby airports to include small 

hubs. Currently, to be eligible for EAS-subsidized service, a community 

Options Exist for 

Reforming EAS and 

Evaluating SCASDP 

Examine Options for 

Enhancing EAS 

Targeting Subsidized Service to 

More Remote Communities 

 27GAO-05-325SP 

Page 16 GAO-06-398T 
must be more than 70 highway miles from the nearest medium- or largehub airport. We found that, if the distance criterion was increased to 125 

highway miles and the qualifying airports were expanded to include smallhub airport with jet service, 55 EAS-subsidized communities would no 

longer qualify for subsidies—and travelers at those communities would 

need to drive to the nearby larger airport to access air service.28

Limiting subsidized service to more remote communities could potentially 

save federal subsidies. For example, we found that about $24 million 

annually could be saved if service were terminated at 30 EAS airports that 

were within 125 miles of medium- or large-hub airports. This estimate 

assumed that the total subsidies in effect in 2006 at the communities that 

might lose their eligibility would not be obligated to other communities 

and that those amounts would not change over time. On the other hand, 

the passengers who now use subsidized service at such terminated 

airports would be inconvenienced because of the increased driving 

required to access air service at the nearest hub airport. In addition, 

implementing this option could potentially negatively impact the economy 

of the affected communities. For instance, officials from some 

communities, such as Brookings, South Dakota, told us that they are able 

to attract and retain local businesses because of several factors relating to 

the quality of life there—with one important factor being its scheduled air 

service. 

Another option is to better match capacity with community use. Our past 

analysis of passenger enplanement data indicated that relatively few 

passengers fly in many EAS markets, and that, on average, most EAS 

flights operate with aircraft that are largely empty. To better match 

capacity with community use, air carriers could reduce unused capacity—

either by using smaller aircraft or by reducing the number of flights. 

Carriers could use smaller aircraft. For example, we reported that from 

1995 to 2002, total passenger traffic dropped at 9 of 24 EAS communities 

where carriers added flight frequencies. 

Better matching capacity with community use could save federal 

subsidies. For instance, reducing the number of required daily subsidized 

departures could save federal subsidies by reducing carrier costs in some 

locations. Federal subsidies could also be lowered at communities where 

carriers used smaller—and hence less costly—aircraft. On the other hand, 

Better Matching Capacity with 

Community Use 

 28This information was current as of January 2006. 

Page 17 GAO-06-398T 
there are a number of potential disadvantages. For example, passenger 

acceptance is uncertain. Representatives from some communities, like 

Beckley and Bluefield, West Virginia, told us that passengers who are 

already somewhat reluctant to fly on 19-seat turboprops would be even 

less willing to fly on smaller aircraft. Such negative passenger reaction 

may cause more people to drive to larger airports—or simply drive to their 

destinations. Additionally, the loss of some daily departures at certain 

communities would likely further inconvenience some passengers. Lastly, 

reduced capacity may have a negative impact on the economy of the 

affected community.29

Another option is to consolidate subsidized service at multiple 

communities into service at regional airports. As of July 1, 2002, 21 EAS 

subsidized communities were located within 70 highway miles of at least

one other subsidized community. We reported that if subsidized service to 

each of these communities were regionalized, 10 regional airports could 

serve those 21 communities. 

Regionalizing service to some communities could generate federal savings. 

However, those savings may be marginal, because the total costs to serve a 

single regional airport may be only slightly less than the cost to serve two 

or three neighboring airports. For example, in 2002, DOT provided $1.9 

million in annual subsidies to Air Midwest, Inc., to serve Ogdensburg and 

Massena, New York, with stops at another EAS-subsidized community 

(Watertown, New York) before arriving at its final destination of 

Pittsburgh, Pennsylvania. According to an official with Air Midwest, the 

marginal cost of operating the flight segments to Massena and Ogdensburg 

are small in relation to the cost of operating the flight from Pittsburgh to 

Watertown. Another potential positive effect is that passenger levels at the 

proposed regional airports could grow because the airline(s) would be 

drawing from a larger geographic area, which could prompt the airline(s) 

to provide better service (i.e., larger aircraft or more frequent departures). 

There are also a number of disadvantages to implementing this option. 

First, local passengers would be inconvenienced, since they would likely 

have to drive longer distances to obtain local air service. Moreover, the

Consolidating Subsidized 

Service Provided to Multiple 

Communities into Service at 

Regional Airports 

 29As we reported in our 2002 report, although scheduled commercial air service is 

positively correlated with local economic activity, we were unable to locate reliable studies 

that describe the extent to which scheduled commercial air service is directly responsible 

for economic development in small communities in the United States (i.e., whether air

service precedes, follows, or develops simultaneously with local economic activity). 

Page 18 GAO-06-398T 
passenger response to regionalizing local air service is unknown. 

Passengers faced with driving longer distances may decide that driving to 

an altogether different airport is worthwhile, if it offers better service and 

air fares. Additionally, as with other options, the potential impact on the 

economy of the affected communities is unknown. Regionalizing air 

service has sometimes proven controversial at the local level, in part 

because regionalizing air service would require some communities to give

up their own local service for the hypothetical benefits of a less 

convenient regional facility. Even in situations where one airport is larger 

and better equipped than others (e.g., where one airport has longer 

runways, a superior terminal facility, and better safety equipment on site), 

it is likely to be difficult for the other communities to recognize and accept

surrendering their local control and benefits. 

Another option is to change carrier subsidies into local grants. We have 

noted that local grants could enable communities to match their 

transportation needs with individually tailored transportation options to 

connect them to the national air service system. As we previously 

discussed, DOT provides grants to help small communities to enhance 

their air service via SCASDP. 

Our work on SCASDP identified some positive aspects of the program that 

could be beneficial for EAS communities. First, in order for communities 

to receive a Small Community grant, they had to develop a proposal that 

was directed at improving air service locally. In our discussion with some 

of these communities, it was noted that this required them to take a closer 

look at their air service and better understand the market they serve—a 

benefit that they did not foresee. In addition, in one case developing the 

proposal caused the airport to build a stronger relationship with the 

community. SCASDP also allows for flexibility in the strategy a local 

community can choose to improve air service, recognizing that local facts

and circumstances affect the chance of a successful outcome. In contrast, 

EAS has one approach—a subsidy to an air carrier. 

However, there are also differences between the two programs that make 

the grant approach problematic for some EAS communities; these 

differences should be considered. First, because the grants are provided 

on a one-time basis, their purpose is to create self-sustaining air service 

improvements. The grant approach is therefore best applicable where a 

viable air service market can be developed. This could be difficult for EAS 

communities to achieve because, currently, the service they receive is not

profitable unless there is a subsidy. While some EAS communities might 

be able to transition to self-sustaining air service through use of one of the 

Changing Carrier Subsidies to 

Local Grants 

Page 19 GAO-06-398T 
grants, for some communities this would not be the case. In addition, the 

grant program normally includes a local cash match, which may be 

difficult for some EAS communities to provide. This could systematically

eliminate the poorest communities, unless other sources of funds—such 

as state support or local industry support—could be found. 

In Vision-100, Congress authorized several programs relevant to small 

communities. These programs have not progressed for various reasons. 

The Alternate Essential Air Service Pilot Program allows the Secretary of

Transportation to provide assistance directly to a community, rather than 

paying compensation to an air carrier. Under the pilot program, 

communities could provide assistance to air carriers using smaller aircraft, 

fund on-demand air taxi service, provide transportation services to and 

from several EAS communities to a single regional airport or other 

transportation center, and purchase aircraft. Vision-100 also authorized 

the Community Flexibility Pilot Program, which requires the Secretary of 

Transportation to establish a program for up to 10 communities that agree 

to forgo their EAS subsidy for 10 years in exchange for a grant twice the 

amount of the EAS subsidy. The funds may be used to improve airport 

facilities. (The grants can be used for things other than general aviation.) 

DOT has solicited proposals for projects in both of these programs. 

However, according to a DOT official, no communities expressed any 

interest in participating in these programs. Finally, the EAS Local 

Participation Program allows the Secretary of Transportation to select no 

more than 10 designated EAS communities within 100 miles, by road, of a

small hub (and within the contiguous states) to assume 10 percent of their 

EAS subsidy costs for a 4-year period. However, Congress has prohibited 

DOT from obligating or expending any funds to implement this program 

since Vision-100 was enacted. 

We recently recommended that DOT examine the effectiveness of this 

program when more projects are complete.30 Such an evaluation would 

provide DOT and Congress with information about whether additional or 

improved air service was not only obtained, but whether it continues after 

the grant support has ended. This may be particularly important since our 

work on the limited number of completed projects found that, 11 of 23 

Vision-100 Small 

Community Programs 

Have Not Progressed 

Evaluate the Effectiveness 

of SCASDP before 

Reauthorization 

 30GAO, Initial Small Community Air Service Development Projects Have Achieved Mixed 

Results, GAO-06-21 (Washington, D.C.: Nov. 2005). 

Page 20 GAO-06-398T 
grantees reported that the improvements were self-sustaining after the 

grant was complete. In addition, our prior work on the air service to small

communities found that once financial incentives are removed, additional

air service may be difficult to maintain. Since our report, an additional 33 

grants have been completed and DOT’s plans to examine the results from 

these completed grants should provide a clearer and more complete 

picture of the value of this program. Any improved service achieved from 

this program could then be weighed against the cost to achieve those 

gains. This information will be important as Congress considers the 

reauthorization of this program in 2008. 

In addition to the benefit of providing Congress with information upon 

which to evaluate the merits of SCASDP, the evaluation would likely have

additional benefits. In conducting this evaluation, DOT could potentially 

find that certain strategies the communities used were more effective than

others. For example, during our work, we found some opposing views on 

the usefulness of travel banks31 and some marketing strategies as 

incentives for attracting improved service. As DOT officials identify 

strategies that have been effective in starting self-sustaining improvements

in air service, they could share this information with other small 

community airports and, perhaps, consider such factors in its grant award

process. In addition, DOT might find some best practices and could 

develop some lessons learned from which all small community airports 

could benefit. For example, one airport used the approach of assuming 

airline ground operations such as baggage handling and staffing ticket 

counters. This approach served to maintain airline service of one airline 

and to attract additional service from another airline. Sharing information 

on approaches like this that worked (and approaches that did not) may 

help other small communities improve their air service, perhaps even 

without federal assistance. 

In conclusion, Mr. Chairman, Congress is faced with many difficult choices 

as it tries to help improve air service to small communities, especially

given the fiscal challenges the nation faces. Regarding EAS, I think it is 

important to recognize that for many of the communities, air service is 

not—and might never be—commercially viable and there are limited 

 31Businesses or individuals deposit or promise future travel funds to a carrier providing 

new or expanded service. Contributing businesses and individuals can then draw down

from this account. 

Page 21 GAO-06-398T 
alternative transportation means for nearby residents to connect to the

national air system. In these cases, continued subsidies will be needed to

maintain that capability. In some other cases, current EAS communities 

are within reasonable driving distances to alternative airports that can 

provide that connection to the air system. It will be Congress’ weighing of 

priorities that will ultimately decide whether this service will continue or 

whether other, less costly options will be pursued. In looking at SCASDP, I 

would emphasize that we have seen some instances in which the grant 

funds provided additional service, and some in which the funds did not 

work. When enough experience has been gained with this program, the 

Congress will be in a position to determine if the air service gains that are

made are worth the overall cost of the program. I would be pleased to 

answer any questions that you or other Members of the Subcommittee 

may have at this time. 

For further information on this testimony, please contact Gerald L. 

Dillingham at (202) 512-2834 or dillinghamg@gao.gov. Individuals making 

key contributions to this testimony and related work include Robert 

Ciszewski, Catherine Colwell, Daniel Concepcion, Brandon Haller, Dave 

Hooper, Stuart Kaufman, Alex Lawrence, Bonnie Pignatiello Leer, 

Maureen Luna-Long, John Mingus, and Glen Trochelman. 

Contact Information 

Page 22 GAO-06-398T 
Page 23 GAO-06-398T 

 Service-related Factors 

1. How many carriers are serving the community? 

2. How many destinations are served? 

3. What is the frequency of flights? 

4. What size aircraft service the community?

5. Has the level of service been increasing or decreasing over the past 3 years?

6. Have enplanements been increasing or decreasing over the past 3 years?

7. Is the Metropolitan Statistical Area population increasing or decreasing? 

8. Is the per-capita income increasing or decreasing? 

9. Are the number of businesses in the area increasing or decreasing? 

10. What is the proximity to larger air service centers? 

11. What is the quality of road access to other air service centers? 

12. Does the community lac ed top origin and destination 

markets? 

k service in identifi

13. Is the proposal design

• First air service, 

• Second carrier serv

• New destinations, 

• Larger aircraft, or 

hts?

ed to provide: 

ice,

• More frequent flig

14. ct, has the community selected a carrier that is

to serve?

If this is an air service proje

willing and committed

15. If this is an air service project, does the community have a targeted carrier that 

would serve? 

Source: GAO table based on DOT information. 

 Project-related Factors 

1. Do demographic indicators and the business environment support the 

project? 

2. Does the community have a demonstrated track record of implementing air 

service development projects? 

3. Does the project address the stated problem? 

4. Does the community have a firm plan for promoting the service? 

5. Does the community hav

terminating the projec

e a definitive plan for monitoring, modifying, and 

t, if necessary? 

Appendix I: Additional Department of 

Transportation Selection Factors for SCASDP 

Grants 
 Project-related Factors 

6. Does the community if selfsufficiency or completihave a plan for continued support of the project

on is not attained after the grant expires? 

7. If it is mainly a marketing does the community have a firm 

implementation plan i

proposal,

n place? 

8. Is the applicant a participating consortium? 

9. Is the project innovative?

10. Does the project have unique geographical traits or other considerations? 

11. Is the amount of funding

amount of funding ava

requested reasonable compared with the total 

ilable? 

12. Is the local contribution reasonable compared with the amount requested?

13. Can the project be completed during the funding period requested? 

14. Is the applicant a small hub now? 

15. Is the applicant a large nonhub now? 

16. Is the applicant a small nonhub now? 

17. Is the applicant currently subsidized through Essential Air Service? 

18. Is the project for marketing only? 

19. Is the project a study only?

20. Does the project involve intermodal services?

21. Is the project primarily a carrier incentive? 

22. Is the project primarily air fare focused?

23. Does the project involve a low-fare service provider? 

24. Does the proposal shift costs from the local or state level to the federal level?

25. Does the proposal show that proximity to other service would detract from it? 

26. Is the applicant geographically close to a past grant recipient? 

Source: GAO table based on DOT information. 

Page 24 GAO-06-398T 
Page 25 GAO-06-398T 

Appendix II: Essential Air Service Airports 

and Small Community Air Service 

Development Program Grantees 

Figure 5: Airports Receiving Essential Air Service (EAS) as of May 2006 and All Small Community Air Service Development 

Program (SCASDP) Grantees, through August 10, 2006 

AK

PR HI

EAS only

Both

SCASDP only

Source: GAO.

Note: Alaska, Hawaii and Puerto Rico are not to scale. 
Page 26 GAO-06-398T 

2002 Grant Year 

Location Grant amount 

 Status as of 

August 31, 2006 

1. Abilene, TX $85,010 Completed 

2. Akron/Canton, OH 950,000 Completed 

3. Aleutians East Borough, AK 240,000 Completed 

4. Asheville, NC 500,000 Completed 

5. Augusta, GA 759,004 Terminated 

6. Baker City, OR 300,000 Terminated 

7. Beaumont/Port Arthur, TX 500,000 Completed 

8. Bellingham, WA 301,500 Ongoing 

9. Binghamton, NY 500,000 Completed 

10. Bismarck, ND 1,557,500 Ongoing 

11. Brainerd, St Cloud, MN 1,000,000 Completed 

12. Bristol/Kingsport/Johnson City, TN 615,000 Completed 

13. Cape Girardeau, MO 500,000 Completed 

14. Casper, Gillette, WY 500,000 Terminated 

15. Charleston, WV 500,000 Completed 

16. Chico, CA 44,000 Completed 

17. Daytona Beach, FL 743,333 Completed 

18. Fort Smith, AR 108,520 Completed 

19. Fort Wayne, IN 398,000 Completed 

20. Hailey, ID 600,000 Completed 

21. Lake Charles, LA 500,000 Completed 

22. Lake Havasu City, AZ 403,478 Completed 

23. Lamar, CO 250,000 Completed 

24. Lynchburg, VA 500,000 Completed 

25. Manhattan, KS 388,350 Completed 

26. Marion, IL 212,694 Completed 

27. Mason City, IA 600,000 Terminated 

28. Meridian, MS 500,000 Completed 

29. Moab, UT 250,000 Completed 

30. Mobile, AL 456,137 Completed 

31. Paducah, KY 304,000 Completed 

32. Presque Isle, ME 500,000 Completed 

33. Rapid City, SD 1,400,000 Completed 

Appendix III: Status of SCASDP Grants 

Awarded, 2002 - 2006 
2002 Grant Year 

Location Grant amount 

 Status as of 

August 31, 2006 

34. Reading, PA 470,000 Completed 

35. Rhinelander, WI 500,000 Completed 

36. Santa Maria, CA 217,530 Completed 

37. Scottsbluff, NE 950,000 Completed 

38. Somerset, KY 95,000 Completed 

39. Taos/Ruidoso, NM 500,000 Completed 

40. Telluride, CO 300,000 Completed 

Total $19,999,056

Source: GAO analysis of DOT data. 

2003 Grant Year 

Location Grant amount 

Status as of

August 31, 2006 

1. . Aguadilla, PR $626,700 Ongoing 

2. Aleutians East Borough, AK 70,000 Ongoing 

3. AZ Consortium, AZ 1,500,000 Ongoing 

4. Bakersfield, CA 982,513 Ongoing 

5. Bangor, ME 310,000 Ongoing 

6. Charleston, SC 1,000,000 Terminated 

7. Cut Bank, MT 90,000 Completed 

8. Dickinson, ND 750,000 Completed 

9. Dothan, AL 200,000 Completed 

10. Dubuque, IA 610,000 Ongoing 

11. Duluth, MN 1,000,000 Ongoing 

12. Elmira, NY 200,000 Ongoing 

13. Erie, PA 500,000 Completed 

14. Fresno, CA 1,000,000 Ongoing 

15. Friday Harbor, WA 350,000 Completed 

16. Gainesville, FL 660,000 Completed 

17. Grand Island, NE 380,000 Ongoing 

18. Greenville, MS 400,000 Terminated 

19. Gunnison, CO 200,000 Completed 

20. Joplin, MO 500,000 Ongoing 

21. Knoxville, TN 500,000 Terminated 

Page 27 GAO-06-398T 
2003 Grant Year 

Location Grant amount 

Status as of

August 31, 2006 

22. Laredo, TX 400,000 Ongoing 

23. Lewiston-Nez Perce, ID 675,000 Ongoing 

24. Mountain Home (Baxter), AR 574,875 Ongoing 

25. Muskegon, MI 500,000 Completed 

26. NC Consortium, NC 1,200,000 Ongoing 

27. Owensboro, KY 500,000 Ongoing 

28. Parkersburg-Marietta, 

WV/OH

500,000 Ongoing 

29. Pierre, SD 150,000 Completed 

30. Redmond, OR 515,000 Completed 

31. Savannah, GA 523,495 Completed 

32. Shreveport, LA 500,000 Completed 

33. Staunton, VA 100,000 Ongoing 

34. Taos Consortium, NM 1,400,000 Completed 

35. Tupelo, MS 475,000 Completed 

36. Victoria, TX 20,000 Completed 

Total $19,862,583 

Source: GAO analysis of DOT data. 

2004 Grant Year 

Location Grant amount 

Status as of

August 31, 2006 

1. Albany, GA $500,000 Ongoing 

2. Alpena, MI 583,046 Ongoing 

3. Beckley/Lewisburg, WV 300,000 Ongoing 

4. Bloomington, IL 850,000 Ongoing 

5. Butte, MT 360,000 Ongoing 

6. Champaign-Urbana, IL 200,000 Completed 

7. Charlottesville, VA 270,000 Ongoing 

8. Chattanooga, TN 750,000 Ongoing 

9. Clarksburg/Morgantown 

(reallocation), WV 372,286 

Ongoing

10. 0 Columbus, MS 260,000 Ongoing 

11. Del Rio, TX 318,750 Ongoing 

Page 28 GAO-06-398T 
2004 Grant Year 

Location Grant amount 

Status as of

August 31, 2006 

12. Dubois, PA 400,000 Ongoing 

13. Eau Claire, WI 500,000 Ongoing 

14. Elko, NV 222,000 Completed 

15. Evansville/South Bend, IN 1,000,000 Ongoing 

16. Farmington, NM 650,000 Ongoing 

17. Hot Springs (reallocation), AR 195,000 Completed 

18. Huntsville, AL 479,950 Completed 

19. Kalamazoo, MI 500,000 Ongoing 

20. Lafayette, LA 240,000 Ongoing 

21. Latrobe, PA 600,000 Ongoing 

22. Lebanon, NH 500,000 Ongoing 

23. Lincoln, NE 1,200,000 Ongoing 

24. Logan City, UT 530,000 Ongoing 

25. Marquette, MI 700,000 Ongoing 

26. McCook/North Platte, NE 275,000 Ongoing 

27. New Haven, CT 250,000 Ongoing 

28. Pocatello, ID 75,000 Completed 

29. Redding/Arcata, CA 500,000 Ongoing 

30. Richmond, VA 950,000 Ongoing 

31. Rutland (reallocation), VT 240,000 Ongoing 

32. Salem, OR 500,000 Ongoing 

33. Santa Rosa, CA 635,000 Ongoing 

34. Sarasota, FL 1,500,000 Ongoing 

35. Sioux City, IA 609,800 Ongoing 

36. Sioux Falls, SD 350,000 Ongoing 

37. Steamboat Springs, CO 500,000 Ongoing 

38. Sumter, SC 50,000 Completed 

39. Syracuse (reallocation), NY 480,000 Ongoing 

40. Tyler, TX 90,000 Ongoing 

41. Visalia (reallocation), CA 200,000 Ongoing 

42. Walla Walla, WA 250,000 Ongoing 

43. Waterloo, IA 550,000 Ongoing 

44. Wilkes-Barre/Scranton, PA 625,000 Completed 

45. Worcester (reallocation), MA 442,615 Ongoing 

46. Youngstown, OH 250,000 Ongoing 

Page 29 GAO-06-398T 
2004 Grant Year 

Location Grant amount 

Status as of

August 31, 2006 

Total $21,803,447 

Source: GAO analysis of DOT data. 

Note: Program funds from 2002 and 2003 were reallocated to six cities in 2004. 

2005 Grant Year 

Location Grant amount 

Status as of

August 31, 2006 

1. Aberdeen, SD $450,000 Ongoing 

2. Alexandria, LA 500,000 Ongoing 

3. Bradford, PA 220,000 Ongoing 

4. CA Consortium, CA 245,020 Ongoing 

5. Cedar City, UT 155,000 Ongoing 

6. Durango, CO 750,000 Ongoing 

7. Fargo, ND 675,000 Ongoing 

8. Florence, SC 500,000 Ongoing 

9. Great Falls, MT 220,000 Ongoing 

10. Greenville, NC 450,000 Ongoing 

11. Gulfport/Biloxi, MS 750,000 Ongoing 

12. Hancock/Houghton, MI 516,000 Ongoing 

13. Hibbing, MN 485,000 Ongoing 

14. Huntington, WV 500,000 Ongoing 

15. Idaho Falls, ID 500,000 Ongoing 

16. Ithaca, NY 500,000 Ongoing 

17. Jacksonville, NC 500,000 Ongoing 

18. Killeen, TX 280,000 Ongoing 

19. Knox County, ME 555,000 Ongoing 

20. Lawton/Ft. Sill, OK 570,000 Ongoing 

21. Macon, GA 507,691 Ongoing 

22. Marathon, FL 750,000 Ongoing 

23. Marshall, MN 480,000 Ongoing 

24. Massena, NY 400,000 Ongoing 

25. Modesto, CA 550,000 Ongoing 

26. Monterey, CA 500,000 Ongoing 

27. Montgomery, AL 600,000 Ongoing 

Page 30 GAO-06-398T 
2005 Grant Year 

Location Grant amount 

Status as of

August 31, 2006 

28. Oregon/Washington

Consortium, OR/WA 

180,570 Ongoing 

29. Rockford, IL 1,000,000 Ongoing 

30. Ruidoso, NM 600,000 Ongoing 

31. Somerset, KY 950,000 Ongoing 

32. Stewart (Newburgh), NY 250,000 Ongoing 

33. Vernal, UT 40,000 Ongoing 

34. Williamsport, PA 500,000 Ongoing 

35. Wyoming Consortium, WY 800,000 Ongoing 

Total $17,429,281

Source: GAO analysis of DOT data. 

2006 Grant Year 

Location Grant amount

1. Abilene, TX $465,100

2. Big Sandy Region, KY 90,000

3. Brunswick, GA 500,000

4. Cedar Rapids, IA 200,000

5. Chico, CA 472,500

6. Fairbanks, AK 500,000

7. Gallup, NM 600,000

8. Garden City/Dodge City/Liberal, KS 150,000

9. Gary, IN 600,000

10. Grand Forks, ND 350,000

11. Harrisburg, PA 400,000

12. Jackson, MS 400,000

13. Jamestown, NY 150,000

14. Jamestown/Devil’s Lake, ND 100,000

15. Kalispell, MT 450,000

16. Longview, TX 225,000

17. Lynchburg, VA 250,000

18. Melbourne, FL 800,000

19. Monroe, LA 50,000

Page 31 GAO-06-398T 
2006 Grant Year 

Location Grant amount

20. Montrose, CO 450,000

21. North Bend, OR 400,000

22. Palmdale, CA 900,000

23. Springfield, IL 390,000

24. Toledo, OH 400,000

25. Tuscaloosa, AL 400,000

Total $9,692,600

Source: DOT data. 

Page 32 GAO-06-398T 
Page 33 GAO-06-398T 

Table 2: Essential Air Service (EAS) Communities in the Contiguous United States, 

Hawaii, and Puerto Rico 

States and communities May 1, 2006 annual subsidy amounts 

ALABAMA

Muscle Shoals $1,364,697

ARIZONA 

Kingman 1,001,989

Page 1,057,655

Prescott 1,001,989

Show Low 779,325 

ARKANSAS 

El Dorado/Camden 923,456 

Harrison 923,456

Hot Springs 1,385,183 

Jonesboro 923,456

CALIFORNIA 

Crescent City 816,025 

Merced 696,788

Visalia 450,000

COLORADO 

Alamosa 1,083,538

Cortez 853,587

Pueblo 780,997

GEORGIA 

Athens 392,108

HAWAII 

Hana 774,718

Kamuela 395,053

Kalaupapa 331,981

ILLINOIS 

Decatur 954,404

Marion/Herrin 1,251,069

Quincy 1,097,406

IOWA 

Burlington 1,077,847

Fort Dodge 1,080,386 

Mason City 1,080,386 

Appendix IV: Essential Air Service 

Communities and Subsidies as of May 1, 2006
States and communities May 1, 2006 annual subsidy amounts 

KANSAS

Dodge City 1,379,419 

Garden City 1,733,997 

Great Bend 621,945 

Hays 1,540,392

Liberal 1,008,582

Manhattan/ Ft. Riley 487,004 

Salina 487,004

KENTUCKY 

Owensboro 1,127,453

MAINE 

Augusta/Waterville 1,065,475

Bar Harbor 1,065,475

Presque Isle 1,116,423 

Rockland 1,065,475

MARYLAND 

Hagerstown 649,929

MICHIGAN 

Escanaba 290,952

Ironwood/Ashland, WI 409,242 

Iron Mountain/Kingsford 602,761 

Manistee/Ludington 776,051

MINNESOTA 

Chisholm/Hibbing 1,279,329

Thief River Falls 777,709 

MISSISSIPPI 

Laurel/Hattiesburg 1,100,253

MISSOURI 

Cape Girardeau 1,147,453 

Columbia/Jefferson City Order 2006-4-6 requested proposals for 

Columbia/Jefferson City

Fort Leonard Wood 683,201 

Joplin 755,762

Kirksville 840,200

MONTANA 

Glasgow 922,103

Glendive 922,103

Page 34 GAO-06-398T 
States and communities May 1, 2006 annual subsidy amounts 

Havre 922,103

Lewistown 922,103

Miles City 922,103

Sidney 1,306,313

West Yellowstone 247,122 

Wolf Point 922,103

NEBRASKA 

Alliance 655,898

Chadron 655,898

Grand Island 1,198,396 

Kearney 1,166,849

McCook 1,502,651

North Platte 870,504 

Scottsbluff 494,887

NEVADA 

Ely 784,463 

NEW HAMPSHIRE 

Lebanon 998,752

NEW MEXICO 

Alamogordo/Holloman Order 2006-3-26 requested proposals on 

an emergency basis 

Carlsbad 599,671

Clovis 859,057

Hobbs 519,614

Silver City/Hurley/Deming 859,057 

NEW YORK 

Jamestown 1,217,414

Massena 585,945

Ogdensburg 585,945

Plattsburgh 753,964

Saranac Lake 753,964 

Watertown 585,945

NORTH DAKOTA 

Devils Lake 1,329,858 

Dickinson 1,697,248

Jamestown 1,351,677

OKLAHOMA 

Page 35 GAO-06-398T 
States and communities May 1, 2006 annual subsidy amounts 

Enid 636,279 

Ponca City 636,279 

OREGON 

Pendleton 649,974

PENNSYLVANIA 

Altoona 893,774

Bradford 1,217,414

DuBois 643,818

Johnstown 464,777

Lancaster 1,611,707

Oil City/Franklin 683,636 

PUERTO RICO 

Mayaguez 688,551

Ponce 622,056

SOUTH DAKOTA 

Brookings 1,039,364

Huron 1,039,364

Pierre 449,912

Watertown 1,211,589

TENNESSEE 

Jackson 1,179,026

TEXAS 

Victoria 510,185

UTAH 

Cedar City 1,068,608 

Moab 783,608

Vernal 555,771

VERMONT 

Rutland 849,705

VIRGINIA 

Staunton 650,123

WASHINGTON 

Ephrata/Moses Lake 1,698,922 

WEST VIRGINIA 

Beckley 977,858

Clarksburg/Fairmont 306,109

Page 36 GAO-06-398T 
States and communities May 1, 2006 annual subsidy amounts 

Greenbrier/Lewisburg/White 

Sulphur Springs 540,579 

Morgantown 306,109

Parkersburg 439,115

Princeton/Bluefield 977,858

WYOMING 

Laramie 397,400

Riverton 394,046

Rock Springs 390,488 

Sheridan 336,701

Worland 797,844

Source: DOT 

Table 3: Alaskan EAS Communities 

Community May 1, 2006 annual subsidy

Adak $1,617,923 

Akutan 350,381 

Alitak 106,054 

Amook Bay 16,622

Atka 336,303 

Cape Yakataga 30,920 

Central 61,421 

Chatham 6,433 

Chisana Order 2006-4-13 held in 40

-Mile Air and Requested Proposals

Circle 61,421 

Cordova 1,763,179

Elfin Cove 108,297 

Excursion Inlet 9,212 

Funter Bay 6,433 

Gulkana 199,839 

Gustavus 732,217

Healy Lake 51,781 

Hydaburg 54,733 

Icy Bay 30,920 

Karluk 38,880 

Page 37 GAO-06-398T 
Community May 1, 2006 annual subsidy

Kitoi Bay 16,622

Manley 24,768 

May Creek 69,759 

McCarthy 69,759 

Minto 24,768 

Moser Bay 16,622

Nikolski 173,603 

Olga Bay 16,622

Pelican 108,297 

Petersburg 732,217

Port Alexander 48,746 

Port Bailey 16,622

Port William 16,622

Seal Bay 16,622

Uganik 15,715 

West Point 16,622

Wrangell 732,217

Yakutat 1,763,179

Zachar Bay 16,622

Source: DOT. 

Page 38 GAO-06-398T 
Page 39 GAO-06-398T 

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Page 40 GAO-06-398T (540116) 
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