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Airport could face tough financial situation if Essential Air Service cut is OKd

ALPENA — Alpena County and other local entities have worked hard to make sure there is reliable air service to and from Alpena County Regional Airport.

The current air service could be stalled or drastically changed, however, if Congress approves President Donald Trump’s proposed 2018 budget, which includes deep cuts to the Essential Air Service program.

In his budget recommendations, Trump and his administration have targeted the program that helps to subsidize small regionally isolated airports and airline companies that provide air service for them.

The Alpena Country Regional Airport falls into that category and relies heavily on the federal funding to airlines that provide service at rural airports.

Currently SkyWest Airline, the regional air service provider, receives $2.35 million in federal support annually. Its current contract is set to expire in 2018. If Congress instituted the cuts to EAS as proposed, the impact on it could be so dramatic that difficult and costly decision would need to be made beyond that.

Airport Manager Steve Smigelski said any budget decision made in Washington would not have an impact this year, and depending on what transpires in Congress, there is room for maneuvering that could help the airport stay afloat.

“SkyWest is in the business of moving passengers to hub airports, not just in Michigan but in many states, so it may be viable enough to continue service without EAS,” Smigelski said. “Routes and schedules would have to be modified, and likely more airports would have to be ‘tagged’ such as Alpena and Pellston already are.”

A tagged airport is one that is encouraged to include stops at other airports to pick up passengers and fill the jet as close to capacity as possible. Smigelski said Alpena and Pellston already are doing that.

Alpena Area Chamber of Commerce President/CEO Jackie Krawczak said the airline business is a turbulent one and to ensure the longevity of the airport and SkyWest, and bolstering the number of people who use it imperative. She said the chamber has been in contact with elected officials in Washington and it is monitoring the budget process closely.

“It absolutely concerns us that the proposal is to eliminate the EAS program. The airline industry is extremely challenging. It is more important than ever to use our local service,” she said. “Whether this particular cut actually happens or not, let this be a lesson that we have to support our local air service, understanding it may not be perfect, but also understanding that it is not a right or entitlement of ours. It is a service that we have to prove we want.”

Currently there are 115 communities in the contiguous 48 states and Alaska. The Department of Transportation and Related Agencies Appropriations Act 2000, prohibits the Department from subsidizing EAS to communities located within the 48 contiguous states receiving per passenger subsidy amounts exceeding $200, unless the communities are located more than 210 miles from the nearest large or medium hub airport.

The Trump administration said the cuts would save the federal government $174 million and is justified because many of the flights are well below capacity. After a strong start enplanements in Alpena began to slump, but a recent schedule change that features an early morning flight to Alpena with a brief stop in Pellston has led to number climbing again.

This isn’t the first time EAS has faced deep cuts or complete elimination.

In 2011 former Michigan 1st Congressional Congressman Dan Benishek voted for an amendment for the Federal Aviation Administration Reauthorization and Reform Act that would have phased out essential air service and terminate the program on Oct. 1, 2013. The only EAS airports that would have continued to receive subsidies would have been those in Alaska and Hawaii. Ultimately the amendment revised and EAS was spared and in 2012 it was passed.

Sen. Gary Peters said in a statement that doing away with EAS would cost jobs in rural areas and would limit options for those who need convenient and dependable transportaion. He intends to fight the proposed cuts vigorously.

“I am deeply alarmed at President Trump’s proposed elimination of the Essential Air Service program. Michiganders in northern Michigan communities like Alpena rely on EAS for safe, reliable transportation, and this program serves as a vital economic lifeline for rural communities,” Peters said. “This proposal would harm Michigan’s rural communities, and as a member of the Commerce, Science and Transportation Committee, I will be working with my colleagues on both sides of the aisle to prevent these cuts from being implemented.”

Alpena County Commissioner Bob Adrian, who chairs the airport committee, said it is too early to jump to conclusions and speculate about what may or may not happen. He said if there are limited cuts to EAS, Alpena could be OK because a study done by Michigan Department of Transportation showed that because of Alpena’s isolation, it would be well down the list of potential cuts. He said if Trump and Congress do away with the program altogether, however, the potential negative impact on the airport would be huge.

“It would be devastating to the airport and community. If it was a complete cut our fate could well fall into the hands of SkyWest and be completely out of our hands,” Adrian said. “It is all just speculation right now, so we’ll have to watch to see how this plays out.”

Smigelski said it is important for people to remember the proposed cut are just recommendations to Congress and it will be up to the House to set the budget and both chambers vote to approve it. He said he remains confident there is enough support to avoid the cuts and until the situation becomes more clear, the airport is going to operate as it has and continue to provide the service people deserve.

“Obviously, the budget any president presents is more or less a suggestion to Congress as the House authors the budget and the Senate has approval authority,” Smigelski said. “In the case of EAS, there are many supporters on both sides of the aisle that do not want it to go away, so I personally think it will remain.”

Steve Schulwitz can be reached via email at sschulwitz@thealpenanews.com or by phone at 358-5689. Follow Steve on Twitter ss_alpenanews.

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