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Planes to Nowhere
Imagine an aviation system in which planes fly two-thirds empty, fares are as low as $46 and the government pays up to 93% of the cost of a flight....that system exists in the USA — and quietly is expanding...
That is from USA Today talking about the millions spent on the "Essential Air Service" program. Do you think that the program protects small rural communities? Nah, try small community airlines.
...as Congress has escalated subsidies through the years, the program has increasingly paid for flights between major airports and places that are neither rural nor isolated. [For example,] in October, the DOT agreed to one of the program's largest subsidies ever — $2 million a year to Atlantic Southeast Airlines. That pays 60% of ASA's cost to fly two round-trips a day between Macon, Ga., and Atlanta's Hartsfield-Jackson International Airport, 81 miles away. The airline projects that passengers will pay an average of $78 for a one-way ticket — and that flights, typically on planes with fewer than 70 seats, will run 83% empty.
Need I tell you that the program was supposed to be temporary? Here's some more data from USA Today.
| Community | Destination | Annual subsidy | Subsidy per passenger | Average pass. per flight |
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| El Dorado, Ark. | Dallas/Fort Worth | $923,456 | $250 | 3.1 |
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| Devils Lake, N.D. | Minneapolis | $1,329,858 | $203 | 5.7 |
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| Worland, Wyo. | Denver | $797,844 | $187 | 4.2 |
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| Bradford, Pa. | Pittsburgh | $1,217,414 | $174 | 3.6 |
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| Jamestown, N.Y. | Pittsburgh | $1,217,414 | $135 | 4.7 |
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| Salina, Kan. | Kansas City | $487,004 | $131 | 2.1 |
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Sources: Department of Transportation, USA TODAY analysis of DOT and airline data
Posted by Alex Tabarrok on January 2, 2008 at 08:10 AM in Economics | Permalink
Comments
I wonder how much carbon dioxide the program puts into the air.
Posted by: Alex F at Jan 2, 2008 9:08:34 AM
You will find, if you look more deeply into it, that this is just one of numerous subsidies paid to residents and services based in rural areas.
A similar pattern exists inside cities, where the taxes paid by businesses and residents in the denser urban core subsidize residents and services living in the more dispersed suburbs.
It is worth noting - even though others have made the same point - that recipient communities tend to vote conservative (Republican in the U.S., Conservative in Canada, etc.).
Residents in such communities are very often (ironically) anti-subsidy and anti-big-government. An analysis of their criticisms, though, shows that their platforms are based on self-interest: they oppose in the larger part measures that help people living in urban centers (notable examples include their opposition to support for welfare, support for the arts, support for urban transportation, etc.).
When in government, these same conservatives tend to be financially irresponsible, accelerating subsidies and other supports to their 'base' in the rural community, creating large government deficits as a result (which they inevitably blame on the subsequent more liberal administrations elected to clean up the result).
This situation is exaggerated by the distribution of voting districts, which tends to grant disproportionate representation to rural residents.
Speaking as someone from the left, I understand the need to provide these subsidies to rural and suburban regions. They are necessary because the free market, left to its own devices, would leave these regions completely unserved.
This would greatly exaggerate the 'time warp' effect, whereby rural regions would be decades behind urban regions, not only in technology, but also education and health care, and ultimately, attitudes and behaviours.
This - not coincidentally - is the same result we see worldwide, especially in areas where subsidies are not in place. The same supports that keep the rural regions of the United States (marginally) in the twenty-first century are simply not in place in Africa, Asia and South America.
This - it should be noted - is why we see decades-old attitudes and behaviours, things like tribalism, religious fanaticism, and the like. And we see the same antipathy toward more liberal (and wealthier, and more generous) regions. And (interestingly) for the same reasons: the fear that government is changing traditional values, making too many demands, and costing too much.
It turns out - and we have the empirical evidence for this now - that it is much cheaper to provide subsidies to these regions rather than to take a 'law and order' approach. Responding to religious fanaticism, tribalism and the like by war and invasion costs hundreds of billions of dollars - a non-productive subsidy that amounts to thousands of dollars per resident.
It is understandable that voters in rural and suburban regions in the U.S. (and elsewhere) support the 'law and order' approach. They just don't *get* the other approach, they don't understand it, can't accept it, because it flies in the face of their own myth of self-reliance. People should not receive subsidies, they cry - while at the same time accepting subsidies of their own, and paying even *more* to try to enforce law and order.
Recognizing that a subsidy to rural regions exists is the first step. Understanding *why* it exists is the second step, and the step that most populist and conservative politicians and supporters are unable - or unwilling - to take.
For after all, the way to address 'needless' expenses on 'planes to nowhere' is, of course, to eliminate the disproportional representation received by rural residents in the legislature, to ensure that one rural vote is worth exactly the same as one urban vote. And what right-winger is willing to do that?
Posted by: Stephen Downes at Jan 2, 2008 9:45:53 AM
Meanwhile I keep reading and hearing how America's infrastructure is falling apart. Investing in the maintenance of bridges to prevent their collapse would seem a slightly better use of public funds than subsidizing short-haul flights. But that's just me.
Posted by: Vincent Clement at Jan 2, 2008 9:50:54 AM
Some more background (via Wikipedia and the DOT website): The plan was created in 1978 and politically enabled passage of the Airline Deregulation Act of 1978. It was supposed to expire in 1988, but it's been reauthorized since then. A lot of the subsidized routes are in Alaska.
It sounds like more pork that should be trimmed, but I wonder what effect cutting it would have on Alaska.
Posted by: MostlyAPragmatist at Jan 2, 2008 9:54:34 AM
Some more background (via Wikipedia and the DOT website): The plan was created in 1978 and politically enabled passage of the Airline Deregulation Act of 1978. It was supposed to expire in 1988, but it's been reauthorized since then. A lot of the subsidized routes are in Alaska.
It sounds like more pork that should be trimmed, but I wonder what effect cutting it would have on Alaska.
Posted by: MostlyAPragmatist at Jan 2, 2008 9:56:46 AM
I once took a Pittsburgh-Bradford roundtrip. How would one get to Bradford, PA (or, as I was going, to Coudersport, PA, an hour away from Bradford) without a flight to Bradford? That entire region would be even worse off if it was left entirely disconnected from the transportation network, so it's entirely possible that that million dollars is well spent for an El Dorado or Devils Lake that would die without it. Of course, it should be the state or local government that subsidizes the airline, rather than the feds, and it's unclear (other than typical porky log-rolling) why Jamestown needs its own subsidy if there are flights to Bradford not to mention unsubsidized flights to Erie.
Posted by: Ted at Jan 2, 2008 9:57:07 AM
Depressing, but not surprising.
Posted by: Chris Meisenzahl at Jan 2, 2008 9:58:04 AM
Stephen Downes: " I understand the need to provide these subsidies to rural and suburban regions. They are necessary because the free market, left to its own devices, would leave these regions completely unserved."
U.S. international carriers are frequently subsidized for routes they fly to smaller island nations and to international cities which would otherwise be "underserved". In all cases of which I am aware, it is the citizens/residents of the island nations and the citizens/residents of the less-desirable cities who pay bear the burden of those subsidies.
I suspect that free market advocates would not object if the residents and property owners of Salina, KS, or Worland, WY, voted to subsidize routes to those cities. In that case, the recipients of the subsidies would be paying for them. But that's not what is happening. Those residents and property owners receive the benefit that the rest of us pay for.
Why do you claim that the towns listed are "unserved"? Public transportation from most of them to larger cities does exist.
Steven Downes: " rural regions would be decades behind urban regions, not only in technology, but also education and health care, and ultimately, attitudes and behaviours."
Are you suggesting that those who choose to live in remote regions are "entitled" to the same amenities as those who choose to move closer to hospitals and schools of more populated regions?
I suspect your major problem is with the very last part of your statement, that the rural residents do not share your "attitudes and behaviors". Did it ever occur to you that some folks who live in rural regions moved there because they are sick to the point of disgust of the attitudes, behaviors, and governments of socialist urbanites? I know many rural residents who have expressed exactly that reason for their continued "self-deprivation".
Posted by: John Dewey at Jan 2, 2008 10:06:58 AM
Ted: Government shouldn't be subsidizing private enterprise. Period. Besides, the last I looked, there are plenty of roads in and out of Bradford so exactly how is it disconnected from the transportation network?
Posted by: Vincent Clement at Jan 2, 2008 10:25:05 AM
John Dewey: But it doesn't seem to stop them from voting for people that support rural subsidies. So much for continued self-deprivation.
Posted by: Vincent Clement at Jan 2, 2008 10:31:48 AM
On a related note, this is not neccessarily due to some govt. regulation but a quirk of airport regulations apparently. Who knows how many other airports do this practice also:
BA flying empty 'ghost planes' across Atlantic.
Posted by: jon at Jan 2, 2008 10:36:16 AM
Not to detract in any way from the basic point that subsidies are bad, but it's worth noting that the presence of mostly-empty flights by themselves don't necessarily indicate waste.
Unused capacity is not wasteful if the capacity is *sometimes* fully utilized but cannot be easily expanded or contracted when it is not.
Sure, if you have two half-full flights a day, you could still get everyone there by running a single flight - but if your passengers are willing to pay twice as much for the extra convenience of going when *they* want to instead of when *you* want to, then you haven't actually saved anything by packing the plane full. And flying a smaller plane may not be an option because you need the extra seats on Thanksgiving.
The current number of empty seats almost certainly *is* wasteful, i.e. non-optimal, thanks to the subsidies. But even in a perfectly efficient system, there will almost certainly be a large number of flights with a large number of empty seats.
Until we get our flying cars, of course.
Posted by: eddie at Jan 2, 2008 10:38:59 AM
Devils Lake, ND, is also served by federally subsidized AMTRAK. Competing with subsidized airline and rail transit, it is surprising that Rimrock Bus Service can even serve Devil's Lake five days a week. but it somehow does.
Posted by: John Dewey at Jan 2, 2008 10:42:58 AM
I once took a Pittsburgh-Bradford roundtrip. How would one get to Bradford, PA (or, as I was going, to Coudersport, PA, an hour away from Bradford) without a flight to Bradford? That entire region would be even worse off if it was left entirely disconnected from the transportation network
One would drive on the (sometimes more locally) subsidized roads, ride a bicycle, or walk (the last perhaps the best option for Alex F). Of course the Zippo lighters all hop planes to reach the rest of the planet. Praise the subsidy.
Ted goes on to point out that Erie is closer. So are Buffalo, Rochester, and Cleveland. Indeed it is an easy two day walk from downtown Buffalo, a 5 hour bicycle ride, and a 90 minute automobile excursion.
It'd be nice to see this sort of thing trimmed from the margins of the budget particularly as I-86 reaches "completion."
Posted by: rluser at Jan 2, 2008 10:49:58 AM
Vincent Clement: "But it doesn't seem to stop them from voting for people that support rural subsidies."
How do you know how the people I refer to actually vote? You are making a very general statement for which you can offer no proof.
Even if conservatives vote for an office-holder who supports subsidies, one cannot conclude that conservative voter approves of the office-holder's stand on every issue. I have written many letters to politicians expressing my displeasure about their positions. But when election came around, I still voted for most of them because the alternative candidates were much less likely to represent my total views.
Posted by: John Dewey at Jan 2, 2008 10:59:05 AM
From a public policy perspective, isn't the important question whether the greater public good is served by propping up these communities through this and other rural-based subsidies? If the subsidies were not provided, the migration to urban centers would simply be accelerated instead of leaving pockets of 'time-warps' as Stephen Downes suggests.
So then, do small towns provide something important to society at large that it is worth trying to save?
(Unless of course, one believes that cheap transportation is a basic 'right'.)
Posted by: Tim at Jan 2, 2008 11:15:05 AM
"How would one get to Bradford, PA (or, as I was going, to Coudersport, PA, an hour away from Bradford) without a flight to Bradford?"
One simple way is to fly to Erie, PA, or Buffalo, NY, and then use ground transportation for the remaining 80 to 90 miles. Even those who cannot drive can get to Bradford. Greyhound provides bus service along I-86 between Erie, PA, and Salamanca, NY. I'm sure that either Reed's Cab Service of Salamanca or Valley Taxi of Bradford would be willing to carry a non-driver the remaining 18 miles between the two towns.
My guess is that private bus lines would offer even better service to the Bradford, PA, area were the government not subsidizing the small airline routes.
Posted by: John Dewey at Jan 2, 2008 11:28:33 AM
If, as Stephen Downes suggests, the true rationale for rural subsidies is to change attitudes and behaviors, would it not be more efficient to simply pay the local yokels to change them?
Or, if direct subsidies won't change people's minds, perhaps you'd get more bang for your tax-dollar buck by installing government-approved teachers, preachers, and pro wrestlers to extoll whatever attitudes and behaviors the urbanites deem best.
Posted by: Bob Knaus at Jan 2, 2008 11:28:44 AM
Eddie: "And flying a smaller plane may not be an option because you need the extra seats on Thanksgiving."
I agree with most of your post, Eddie. But I want to clear up any misconception about airline practices in absence of subsidies. Few profit-seeking airlines, large or small, allocate aircraft based on demand for the few peak days of the year. Most schedules are based on optimizing profits over the full schedule period. Airlines recognize that demand will be much greater around certain holidays. For the most popular routes they often add frequencies. For the rest they use price to ration seats. In general, there are many more high-discount fares during late September or during February than around the Thanksgiving or Christmas holidays.
Posted by: John Dewey at Jan 2, 2008 11:37:21 AM
Bob Knaus: "perhaps you'd get more bang for your tax-dollar buck by installing government-approved teachers, preachers, and pro wrestlers to extoll whatever attitudes and behaviors the urbanites deem best."
Most state governments already tightly control the textbooks rural public school systems may use. Many state education agencies take steps to ensure "controversial" viewpoints are not being presented to virgin minds. Yet somehow the urban elites are still unable to completely control young rural minds. I suspect an evil libertarian conspiracy has infiltrated our rural school systems. We need to reconvene a new, modernized House Un-American Activities Committee to investigate this threat to the collectivist agenda.
Posted by: John Dewey at Jan 2, 2008 11:54:39 AM
John Dewey: Where is your proof that "many rural residents" moved "there because they are sick to the point of disgust of the attitudes, behaviors, and governments of socialist urbanites"? I'll ignore that "some" became "many". Don't accuse me of making a general statement when you are guilty of the same action.
Posted by: Vincent Clement at Jan 2, 2008 12:15:38 PM
I can't believe I'm going to say this (I almost always agree with AT and I almost never have anything nice to say about the government), but how is this different from the government paying for roads (esp highways/toll roads which could be excludable)? Both of them subsidize transportation.
Or is the issue that the government shouldn't be providing highways/toll roads either? I guess I could get on board with that, but it would be interesting to compare the two and see if there are reasons one is a good idea and not the other.
Posted by: Josh at Jan 2, 2008 12:20:49 PM
Vincent Clement,
You have mangled my comment to meet your own purposes. I did not state that "many rural residents moved there because they are sick to the point of disgust of the attitudes, behaviors, and governments of socialist urbanites". I said that "some" such rural residents - including many residents I know personally - stated they moved for that reason.
Your claim - I think - was that those such persons I know voted for politicians who support subsidies. Did I misundersrtand your assertion?
Posted by: John Dewey at Jan 2, 2008 12:26:10 PM
Corporate welfare combined with subsidies for rural/red state America:
A powerful combination.
Posted by: A student of economics at Jan 2, 2008 12:27:48 PM
Josh,
I think we've discussed the public expenditure for streets and highways before. Here's what I remember:
1. Both federal and state highways are, for the most part, paid for by the gasoline taxes collected from motorists - the users of those highways;
2. Toll roads are certainly paid for by toll road users;
3. Local access roads are usually - but not always - paid by property and sales tax assessments in the communities which receive the benefit of such roads;
4. Residential streets are usually paid by developers who pass on the costs of those streets to home buyers through housing prices;
5. Maintenance of streets and access roads are usually - but not always - paid for through tax assessments on the local population.
So, for the most part, those who benefit from highways, roads, and streets pay for their construction and maintenance.
On the other hand, federal subsidies of rural airline routes - and federal subsidies of Amtrak - benefit a few users but are paid for by all of us.
Posted by: John Dewey at Jan 2, 2008 12:38:12 PM
