Why the Most Successful Small Community Air Service Grants are the Biggest Indictment of the Program

Cranky Flier likes the federal government’s Small Community Air Service Development grant program.

He outlined this year’s winners that he liked on Monday, and I explained why the best of the best is proof enough why the program isn’t worth it.

This morning he looks at what he considers to be successes from last year’s program.

And of the 29 winners from 2011, he can find four.

South Bend, Indiana wanted low cost carrier service to Denver. It took awhile, but Frontier will begin service in October.

Grand Forks, North Dakota wanted Denver as well, and it will be getting service on United that same month.

Bozeman, Montana wanted a New York flight. It got it with Saturday-only service this summer on United.

Harrisburg, Pennsylvania wanted a Denver flight like the others and it might be the biggest success. Frontier delivered with a summer seasonal flight and it did well enough for the airline to extend it by a couple of months through the end of October.

It seems like a pretty low standard for success, though, to say that an airport that wanted service got that service (and a lower standard still when it’s seasonal or once weekly service).

The relevant question is whether the airport getting that service is worth the investment.

These things have to be judged on an opportunity cost basis. How big a benefit relative to the alternatives are provided, and how does that compare to what would have otherwise happened to the money?

  • In private hands (money wasn’t taken away from those who earned it)
  • Reducing debt (government finances are a train wreck, should we be spending money to encourage Saturday service between Bozeman and New York?)
  • Other investments of those dollars (surely there are more important government functions than subsidizing Bozeman-New York air service, people flying between those cities might be expected to pony up for it themselves, or connect…?)

Rather than focusing on the silly applications that didn’t get funded, or the worst applications that did, I think it’s fair to highlight the ‘very best’ and ‘most successful’ grants and ask whether the program seems worthwhile — including the cost of the grants themselves, the government’s cost to administer the programs, and the local governments’ costs trying to attract those grants.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community Milepoint.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I live about 4 miles from DCA, and pay handsomely for the itty bit of real estate I own. I truly do not know why we do not attibute the impact of limited commerical interest in air service to obscure areas as the bitter that comes with the sweet of being permitted to choose to be in Bozeman, South Bend or wherever else.

  2. If the economics of providing air service to a given market don’t work on their own, why would they work with government subsidies? The subsidies won’t be there forever, and in an economic environment like the current one, how can you justify spending government/tax money on something that will beneift so few people?

    And for people who say, “These communities won’t have air service without this program!” – tough. If regular commercial air service is that important to you, move closer to a city that has regular service and can sustain it.

  3. Without being a jerk, this article smacks of your personal bias vis a vis political views.

    I’m not even saying you’re wrong – but you’re talking about opportunity cost, and other uses, with absolutely no data backing any of this up. What’s the median return on investment of government dollars? What’s the economic benefit to the markets (surely the money creates jobs).

    I’d love to see thoughtful analysis on why this isn’t worth it – and data that supports that view!

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