Airport Commission: How essential is essential air service?
The Brainerd Lakes Regional Airport commission Thursday morning talked about what would happen to the airport if the federal Essential Air Service program were eliminated.
A recent budget proposal from President Donald Trump included the elimination of the program. Thursday, airport director Steve Wright provided some information on the airport's connection to the program.
SkyWest Airlines provides commercial air service at the airport and the U.S. Department of Transportation recently renewed the EAS subsidy for SkyWest, effective February 2017 to February 2019, Wright said.
The EAS program is funded through overflight fees paid to the Federal Aviation Administration by foreign aircraft that use U.S. airspace without landing or taking off in the country, Wright said. Recently, Congress began supplementing the EAS program using other FAA funds in the amount of $175 million annually, he said. This $175 million figure is the amount proposed to be eliminated in Trump's budget, he said.
If the EAS subsidy were eliminated, there could be three responses, Wright said. The EAS program could be replaced with a long-term federal program, the airport could partner with the Minnesota Department of Transportation, or the airport could look for local subsidies through community support, he said.
"We really need to begin to grasp as a community, how do we appreciate, how do we value this air service," Wright said. "How would we react if Essential Air Service does go away?"
Commercial flights from the Brainerd airport are on average 46 percent full, Wright said. He noted in March 2017, the airport passed the 50 percent load factor threshold for the first time, a sign of passenger growth at the airport.
"That's a magical number in the airline world and they like to see 50 percent or higher," Wright said. "So Brainerd continues to embrace this air service."
This increase in passengers has lead to a decrease in the per passenger EAS subsidy at the airport, Wright said. The current subsidy per passenger is $57, he said, which totals $1,671,602 annually. The subsidy helps support commercial air service in the slower winter months, he said.
"Basically, SkyWest really needs this subsidy during those slower months," Wright said. "The flights do just fine on their own during the summer months."
If the EAS program were eliminated, commission member Don Jacobson asked, then would the airlines increase ticket prices by $57 to make up for the loss of the subsidy? Airlines are driven by profit, Wright replied, so ticket prices would increase. The average cost of a roundtrip ticket to Minneapolis-St. Paul International Airport is about $150, Wright said.
The $283 million investment in the EAS program generates $1.7 billion in economic benefit, Wright said. For a regional airport like the one in Brainerd, the area would lose $15.4 million in economic impact if the EAS subsidy were eliminated and commercial air service left the market, he said. There are 80-90 jobs at the airport, he said.
Steve Barrows, who works in constituent services for U.S. Rep. Rick Nolan's Brainerd office, said Trump's budget proposal is just a proposal and is not final.
"I don't want anybody jumping off the cliff based on what is out there at this point," Barrows said. "There will be a lot of discussions."
Nolan is adamant about keeping the EAS program in place, Barrows said, and he understands the economic value of regional airports.
"He will fight tooth and nail, and if anybody of you do know him personally, he will literally fight tooth and nail to save that," Barrows said.
In order to keep growing, the airport needs to embrace marketing, commission chair Andy Larson said. The airport needs to emphasize its benefits, he said, which include free parking and a short security line.
From February 2013 to January 2015, the airport partnered with the Falls International Airport in International Falls to provide flights to Minneapolis-St. Paul International Airport, Wright said. Since February 2015, the local airport has provided direct flights to Minneapolis-St. Paul International Airport without the Falls International Airport partnership.
In other business, the commission approved a motion to send a letter to the city of Brainerd asking for an update on the airport utility extension project. A project, completed last fall by Ryan Contracting, installed water and sewer infrastructure at the airport.
Those pipes are waiting to connect to a separate project undertaken by Tom's Backhoe Service, which is designed to bring Brainerd Public Utilities water and sewer service to the airport.
Commission members said the letter should ask when the Tom's Backhoe Service project is scheduled to be completed and when the two projects can be connected. The letter will also state the airport will incur a cost from bringing Ryan Contracting back to connect the lines.