# Essential Air Service (EAS)

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URL: https://www.frixlaw.com/law-library/documents/crs%3AR44176

## Record

- **Collection:** Congressional research report
- **Document type:** CRS Report
- **Published:** December 19, 2018
- **Citation:** R44176

## Text

Essential Air Service (EAS)
(name redacted)
Analyst in Transportation and Industry
Updated December 19, 2018

Congressional Research Service
7-....
www.crs.gov
R44176

Essential Air Service (EAS)

SUMMARY
The Airline Deregulation Act of 1978 gave airlines almost total freedom to determine which
domestic markets to serve and what airfares to charge. This raised the concern that communities
with relatively low passenger levels would lose service as carriers shifted their operations to serve
larger and often more profitable markets. To address this concern, Congress established the
Essential Air Service (EAS) program to ensure that small communities that were served by
certificated air carriers before deregulation would continue to receive scheduled passenger
service, with subsidies if necessary.
The EAS program is administered by the Office of the Secretary of the U.S. Department of
Transportation (DOT), which enforces the eligibility requirements and determines the level of
service required at eligible communities. By the end of FY2018, 174 communities in the United
States received subsidized service under EAS.
Over the years, Congress has limited the scope of the program, mostly by eliminating subsidy
support for communities within a specified driving distance of a major hub airport and capping
subsidies under certain criteria. The FAA Modernization and Reform Act of 2012 included
additional EAS reform measures, including the requirement that a community have a minimum
number of daily enplanements to remain eligible for subsidy. Further, the Consolidated
Appropriations Act of 2014 (P.L. 113-76) and the Continuing Appropriations Resolution of 2015
(P.L. 113-164) introduced additional measures to shrink the program. The FAA Reauthorization
Act of 2018 (P.L. 115-254) changed certain requirements regarding application of subsidy caps
and would discontinue the Air Transportation to Noneligible Places (ATNEP) program in 2020.
Despite these efforts to limit spending for EAS subsidies, inflation-adjusted program expenditures
have risen 132% since 2008. Some factors contributing to the rising program costs are external,
such as high aviation fuel prices from 2008 through 2014 and the prospect of higher pilot wage
costs due to changes in federal regulations. However, certain features of the EAS program itself
may have contributed to the challenge of controlling costs. The statute governing EAS does not
list cost among the four factors that DOT must consider when evaluating air carriers’ bids to
provide subsidized EAS service, and neither the carriers nor the communities receiving
subsidized service are obliged to select service options that minimize the government’s costs.
EAS traditionally has been authorized in laws reauthorizing the Federal Aviation Administration
and other civil aviation programs. The 2018 FAA reauthorization act reauthorized the program
through FY2023.

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Contents
Introduction ..................................................................................................................................... 1
Legislative History .......................................................................................................................... 1
Current Eligibility Requirements .................................................................................................... 2
EAS Communities in Alaska and Hawaii ................................................................................. 3
Alaska ................................................................................................................................. 3
Hawaii ................................................................................................................................. 4
Program Administration .................................................................................................................. 4
Selection of EAS Carriers ......................................................................................................... 4
Payment Procedures .................................................................................................................. 5
EAS Hold-In Authority ............................................................................................................. 5
Program Costs ................................................................................................................................. 5
Measures to Shrink the Program ..................................................................................................... 8
70-Mile Rule ............................................................................................................................. 8
$1,000 Subsidy Cap .................................................................................................................. 9
$200 Subsidy Cap ..................................................................................................................... 9
Minimum Daily Enplanement ................................................................................................. 10
Cost Sharing If Near a Small Hub ............................................................................................11
Community and Regional Choice Pilot Programs .................................................................. 12
Issues and Options ......................................................................................................................... 12

Figures
Figure 1. Annual EAS Expenditures, FY1985-FY2018 .................................................................. 6

Tables
Table 1. Essential Air Service Funding, FY2012-FY2018 .............................................................. 7

Appendixes
Appendix A. Subsidized EAS Outside of Alaska .......................................................................... 14
Appendix B. Subsidized EAS in Alaska........................................................................................ 18

Contacts
Author Contact Information .......................................................................................................... 20

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Introduction
The Airline Deregulation Act of 1978 (P.L. 95-504) granted U.S. passenger airlines almost total
freedom to determine which domestic markets to serve and what airfares to charge. With the
advent of deregulation, there were concerns that small communities would lose air service
because airlines would shift their operations to serve larger and often more profitable markets. To
address these concerns, Congress established the Essential Air Service (EAS) program in the
Airline Deregulation Act to ensure continuous air service to small communities.
Initially, approximately 746 communities were eligible. However, not all eligible communities
required EAS subsidies. Some communities have been receiving unsubsidized service because air
carriers have been willing to offer service without subsidy; some have been receiving subsidized
service under EAS from the very beginning; others initially supported unsubsidized service, but
later sought subsidies, or vice versa; some were subsidized but later lost their eligible status and
are no longer in the program.
Over time, Congress has tightened the conditions under which communities can receive
subsidized air service. Nonetheless, program expenditures have increased, more than doubling in
inflation-adjusted terms between 2008 and 2018. At the end of FY2018, a total of 174
communities received subsidized EAS service.

Legislative History
Section 419 of the Federal Aviation Act,1 as amended by the Airline Deregulation Act in 1978,
established a program to continue airline service to small communities. The program was initially
seen as transitional and was set to expire after 10 years. This program was originally administered
by the Civil Aeronautics Board (CAB), whose duties were later transferred to the U.S.
Department of Transportation (DOT). The Airline Deregulation Act authorized CAB to require
carriers to continue providing scheduled service at eligible communities after deregulation,2 with
subsidies if necessary.
The Airline Deregulation Act made communities receiving scheduled air service from a
certificated carrier on October 24, 1978, eligible for EAS benefits. At that time, there were 746
eligible communities, including 237 in Alaska and 9 in Hawaii. According to a DOT estimate,
nearly 300 of these 746 communities received subsidized service under EAS at some point
between 1979 and 2016.
As the original 10-year expiration date approached in 1988, Congress extended EAS for another
10 years. In the Federal Aviation Reauthorization Act of 1996 (P.L. 104-264), Congress removed
the 10-year time limit, extending the program indefinitely.3
For the first 12 years of the program, the sole criterion for EAS eligibility was whether the
community was receiving scheduled air service on October 24, 1978, the date that the Airline
Deregulation Act was signed into law. Over the following years, Congress has worked to limit the
1 Effective June 1994, the Federal Aviation Act was recodified as subtitles II, III, and V-X of 49 U.S.C.,

“Transportation.” The former Section 419 of the Federal Aviation Act is now 49 U.S.C. §§41731-41742.
2 Before deregulation, air carriers’ operating certificates for most of these communities required carriers to provide two
daily round trips. The prospect of allowing carriers to terminate scheduled service without federal approval raised
concern in Congress that communities with relatively low traffic levels would lose air service entirely as airlines shifted
their operations to larger and potentially more profitable markets.
3 P.L. 104-264 §278 amended 49 U.S.C. §41742, eliminating the EAS program expiration date of September 30, 1998.

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scope of the program, mostly by eliminating subsidy support for communities within a specified
driving distance of a major hub airport.
The Department of Transportation and Related Agencies Appropriations Act of 2000 (P.L. 10669, §332) enacted two EAS eligibility requirements, prohibiting subsidies to carriers for service
provided to (1) communities in the 48 contiguous states that are located fewer than 70 highway
miles from the nearest large or medium hub airport; or (2) communities that require a perpassenger subsidy rate in excess of $200 unless such point is greater than 210 miles from the
nearest large or medium hub airport.
In 2003, Vision 100—Century of Aviation Reauthorization Act (P.L. 108-176, §405) directed
DOT to establish Community and Regional Choice Programs as alternatives to the traditional
EAS service. In the following year, DOT established two pilot programs designed to allow
communities to explore options that better suit their transportation needs while keeping costs
under control. EAS eligibility requirements were not changed. For more on these two pilot
programs, see the section “Measures to Shrink the Program.”
In 2011, the Airport and Airway Extension Act (P.L. 112-27, Part IV) prohibited DOT from
providing EAS to communities with annual per-passenger subsidies of over $1,000, regardless of
their distance from the nearest hub airport. Also in 2011, the Consolidated and Further Continuing
Appropriations Act, 2012 (P.L. 112-55) waived the requirement that carriers provide EAS flights
using aircraft with 15 or more seats, allowing the use of smaller planes where passenger counts
are low.
The Federal Aviation Administration Modernization and Reform Act of 2012 (P.L. 112-95)
adopted additional EAS reform measures, including Section 421, which amended the definition of
an “EAS eligible place”4 to require a minimum number of daily enplanements. The 2012 act also
provided that for locations outside of Alaska and Hawaii to remain EAS-eligible, they must have
participated in the EAS program at some time between September 30, 2010, and September 30,
2011. This officially overrode the original list of eligible communities (except for those in Alaska
and Hawaii) and capped the number of communities that are eligible for EAS.
The FAA Extension, Safety, and Security Act of 2016 (P.L. 114-190) reauthorized the program
through FY2017 without program modification. The FAA Reauthorization Act of 2018 (P.L. 115254) reauthorized the program through FY2023 and introduced several legislative measures,
including Section 453, which amends 49 U.S.C. §41736 to sunset the Air Transportation to
Noneligible Places (ATNEP) program in 2020. The law also requires the Secretary of
Transportation to waive application of the subsidy-per-passenger cap under certain conditions.
See the section “Measures to Shrink the Program” for details.

Current Eligibility Requirements
Except in Alaska and Hawaii, an EAS-eligible place is now defined as a community that, between
September 30, 2010, and September 30, 2011, either received EAS for which compensation was
paid or received from the incumbent carrier a 90-day notice of intent to terminate EAS following
which DOT required the carrier to continue providing service to the community (known as
“holding in” the carrier). Starting October 1, 2012, no new communities can enter the program
should they lose their unsubsidized service, except in Alaska and Hawaii. Airports that were
formerly eligible but did not receive subsidized service during the specified year are no longer
eligible for subsidized service and may not reenter the program.
4 49 U.S.C. §41731.

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A community receiving subsidy during FY2011 remains eligible for EAS subsidy if
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it is located more than 70 miles from the nearest large or medium hub airport;
it requires a rate of subsidy per passenger of $200 or less, unless the community
is more than 210 miles from the nearest large or medium hub airport;
the average rate of subsidy per passenger was less than $1,000 during the most
recent fiscal year at the end of each EAS contract, regardless of the distance from
a hub airport; and
it had an average of 10 or more enplanements per service day during the most
recent fiscal year, unless it is more than 175 driving miles from the nearest
medium or large hub airport or unless DOT is satisfied that any decline below 10
enplanements is temporary.

EAS Communities in Alaska and Hawaii
Communities in Alaska and Hawaii are generally exempt from almost all EAS eligibility
requirements, except one measure established by the Consolidated Appropriations Act of 2014
(P.L. 113-76) and the Continued Appropriations Resolution of 2015 (P.L. 113-164). Both laws
directed that no EAS funds “shall be used to enter into a new contract with a community located
less than 40 miles from the nearest small hub airport before the Secretary has negotiated with the
community over a local cost share.”
This requirement does not affect any Alaska EAS communities since none is within 40 miles of
the nearest small hub airport. However, one community in Hawaii, Kamuela, was affected and
entered a cost-sharing arrangement in 2018.

Alaska
There were 237 Alaska communities on the original list of EAS-eligible communities. At the end
of FY2018, 63 communities in Alaska received subsidized service (see Appendix B), leaving 174
unsubsidized communities eligible for EAS subsidies. This represents a considerable increase
from the 44 subsidized communities in 2015. The increase is due to additional Alaskan
communities requesting subsidized service, which is permitted by law.
Diomede, a community in Alaska that was not on the original list, is receiving service from EAS
funds via ATNEP (49 U.S.C. §41736), a program under which a state or local government may
propose to the Secretary of Transportation that DOT provide compensation to an air carrier to
serve a place that is not EAS-eligible, with a 50% local share.5 Section 453 of the FAA
Reauthorization Act of 2018 (P.L. 115-254) would sunset the ATNEP program in two years,
within which no more communities will be admitted into the program. Diomede, the only
community currently in ATNEP, would become a full EAS community, meaning no local cost
share would be required after the current agreement ends June 30, 2020.
The number of passengers served by EAS flights in Alaska is not readily available. The EAS
program office does not compile this information as there are no requirements regarding
minimum enplanement figures or per-passenger subsidies in Alaska.

5 http://www.gpo.gov/fdsys/pkg/USCODE-2011-title49/pdf/USCODE-2011-title49-subtitleVII-partA-subpartii-

chap417-subchapII-sec41736.pdf. Absent from the original list of EAS communities in Alaska, Diomede is not
considered an EAS community, but it is receiving subsidized air service via ATNEP, which is administered by the EAS
program office and the DOT finance office. The federal share for Diomede comes out of the EAS program budget.

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Hawaii
At the end of FY2018, two communities in Hawaii, Hana and Kamuela, received subsidized
service under EAS (see Appendix A). There are 10 EAS-eligible communities in Hawaii—nine
on the original list of EAS communities plus Kalaupapa, which came into the EAS program via
ATNEP and became a permanent EAS community with the 2012 FAA reauthorization.6

Program Administration
The EAS program is administered by the Office of the Secretary of Transportation, which
determines the minimum level of service required at each eligible community by specifying
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a hub through which the community is linked to the national passenger airline
network;
a minimum number of round trips and available seats that must be provided to
that hub;
certain characteristics of the aircraft to be used; and
the maximum permissible number of intermediate stops to the hub.

In general, DOT subsidizes two to four round trips a day with small aircraft from an EAS
community to a large or medium hub airport, but in some cases it subsidizes flights to more than
one hub.

Selection of EAS Carriers
DOT issues a request for proposals (RFP) to all scheduled carriers to provide service to an
eligible community and institutes a carrier selection proceeding using a bid system. It is required
by law to use the following four key criteria when considering carriers’ proposals to provide
subsidized service to EAS communities:7
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



service reliability;
contractual and marketing arrangements with a larger carrier at the hub;
interline arrangements with a larger carrier at the hub; and
community views.

The RFPs advise air carriers that their proposals for subsidy should be submitted on a sealed bid,
“best and final” basis, and set forth the level of service (frequency, aircraft size, and potential
hubs) that would be appropriate for the community given its location and traffic history. DOT
typically receives one to three proposals per RFP. Once the carrier proposals are received, DOT
formally solicits the views of the community as to which carrier and option it prefers.
After receiving the communities’ input, DOT issues a decision designating the selected air carrier
and specifying the service pattern (routing, frequency, and type of aircraft), annual subsidy rate,

6 DOT order 91-4-6, OST-00-6773-3. Kalaupapa became an eligible community because it received a termination

notice between September 30, 2010, and September 30, 2011, and DOT held the incumbent carrier in while it selected
a replacement carrier.
7 49 U.S.C. §41733(c)(1). In addition, the Consolidated Appropriations Act, 2016 (P.L. 114-113), provided that when
“determining between or among carriers competing to provide service to a community, the Secretary may consider the
relative subsidy requirements of the carriers.”

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and effective period of the rate. DOT generally establishes two-year EAS service contracts, which
allows for frequent bidding and gives communities as well as DOT flexibility to switch carriers.

Payment Procedures
DOT pays the air carriers in arrears at the end of every month. Carriers submit invoices based on
the number of flights actually completed in conformance with the contract. They are paid
according to the per-flight rate established in the contract, not according to passenger numbers.
If ad hoc service adjustments are made because of operational exigencies, the carrier reports those
deviations on its invoice, and DOT makes appropriate adjustments in payment to the carrier.

EAS Hold-In Authority
By statute, if the air carrier serving an EAS community wants to discontinue service, it must first
file a 90-day notice of its intent to suspend service. Hold-in authority prevents the incumbent
carrier from suspending service until a replacement carrier begins service. DOT uses this
authority to avoid service disruptions.
During the 90-day period, DOT will try to find a carrier willing to enter the market on a subsidyfree basis. If unsuccessful, DOT issues an order prohibiting the suspension and requesting
proposals for replacement service, either with or without subsidy.
If it was serving an EAS-eligible community without subsidy, the incumbent carrier is eligible for
compensation for being held in after the end of its original 90-day notice period. If the held-in
carrier was already serving a community with EAS subsidy, it would continue to receive the same
subsidy rate for six months, at which time it would be eligible for a rate increase.8

Program Costs
The EAS program is funded from overflight fees paid to the Federal Aviation Administration by
foreign aircraft that transit U.S. airspace without landing in or taking off from the United States.9
Since FY2002, Congress has supplemented the overflight fees with discretionary annual
appropriations of varying size.

8 The six-month period discourages carriers from deliberately submitting below-cost proposals to get selected and

immediately coming back to DOT hoping to get a higher subsidy rate.
9 The Federal Aviation Administration Reauthorization Act of 1996 (P.L. 104-264) authorized the collection of
overflight fees.

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Figure 1. Annual EAS Expenditures, FY1985-FY2018

Source: CRS and U.S. Department of Transportation.
Notes: Inflation adjustment based on Bureau of Economic Analysis Price Index for Government Consumption
Expenditures and General Government Gross Output, National Income and Product Accounts Table 3.10.4, Line
12, “Federal consumption expenditures.”

Figure 1 shows that total EAS program expenditures have increased sharply over time. In
constant 2018 dollars, spending has increased 600% since 1996 and 132% since 2008. Spending
has spiked sharply on two occasions, one after the 2001 terrorist attacks that temporarily
disrupted the aviation market and led to an economic downturn and the other in 2008 and 2009,
when oil prices rose sharply during a deep recession.
The FAA Modernization and Reform Act of 2012 sought to reduce discretionary spending on
EAS through FY2015. Section 428 authorized appropriations for the discretionary portion of EAS
funding of $143 million for FY2012, declining to $93 million for FY2015. However, the law also
authorized all overflight fee revenues, rather than just the $50 million provided historically, to be
made immediately available to the EAS program. This has had the effect of increasing total
outlays for EAS subsidies, contrary to the expressed intent of at least some members of Congress.
The Consolidated and Further Continuing Appropriations Act of 2015 (P.L. 113-235) provided
$263 million in total EAS funding for FY2015, including $108 million in funding from overflight
fees and $155 million in discretionary appropriation. The FAA Extension, Safety, and Security
Act of 2016 (P.L. 114-190) reauthorized the program at the existing level through FY2017. The
FAA Reauthorization Act of 2018 (P.L. 115-254) authorized appropriations for the discretionary
portion of EAS funding of $155 million for FY2018; $158 million for FY2019; $161 million for
FY2020; $165 million for FY2021; $168 million for FY2022; and $172 million for FY2023. The
program’s total funding, including both appropriations and overflight revenues, was $288 million
in FY2018.
Annual EAS funding from FY2012 to FY2018 is shown in Table 1.

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Table 1. Essential Air Service Funding, FY2012-FY2018
(in millions of nominal dollars)
FY2012

FY2013

FY2014

FY2015

FY2016

FY2017

FY2018

Discretionary
Appropriation

$ 143

$ 135

$ 149

$ 155

$175

$150

$155

Overflight Fee
Collections

$ 50

$ 98

$ 119

$ 108

$108

$122

$133

Total Funding

$ 193

$ 233

$ 268

$ 263

$283

$272

$288

Source: U.S. Department of Transportation.

Between FY2012 and FY2018, annual EAS expenditures rose more than 49% in nominal dollars.
These increases have occurred despite the numerous measures Congress has adopted over the
years to contain program spending. Certain features of the program may have contributed to the
challenge of controlling costs:
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





Few carriers may bid for any particular EAS contract. Although in some
instances two or three carriers may offer proposals in response to an RFP, in
some cases there is only one proposal with no competing bid, providing little
incentive for the carrier to minimize its subsidy request.
Subsidy cost is not among the four major factors DOT is required by statute to
consider when evaluating bids.
DOT is required by statute to consider the views of the community when
selecting a carrier to provide subsidized service. If more than one carrier is
proposing to offer service, local officials are under no obligation to favor the
proposal that entails the lowest cost to the federal government.
The law10 does not limit a community’s subsidized flights to a single route. More
than 30 of the 174 EAS communities had subsidized flights to more than one hub
airport in FY2018.
Although eligibility for EAS service, except in Alaska and Hawaii, depends in
part on an airport’s distance from the nearest large or medium hub airport, the
law does not specify that the EAS-subsidized flights must serve that hub. In an
unknown number of cases, subsidized flights link EAS communities with more
distant airports rather than with the nearest hub, perhaps at greater cost to the
government.
For technical reasons or because of its own operational needs, a carrier may
utilize a plane for an EAS flight that is larger than necessary for the traffic on the
route, incurring high per-passenger costs. DOT estimates that 20% to 25% of
EAS communities are served by aircraft that are larger than passenger numbers
might require. According to 2014 testimony by the Government Accountability
Office (GAO), EAS flights, on average, had 49% of their seats filled with paying
passengers in 2013, versus an average of 83% for all domestic flights.11

10 49 U.S.C. §41732 sets forth minimum requirements for EAS service, typically two daily round trips six days a week

to a hub airport with convenient connecting service to a substantial number of destinations.
11 GAO-14-454T, Commercial Aviation: Status of Air Service to Small Communities and the Federal Programs
Involved, April 30, 2014, p. 11.

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

Costs per passenger may be high because air carriers may lack an incentive to
maximize the number of passengers on a flight. Once a carrier and DOT have
agreed on the subsidy amount for a flight, the carrier is free to set fares as it
desires. The carrier may find it more profitable to charge high fares to relatively
few passengers than to maximize the passenger load with lower fares.

In FY2017, EAS subsidies in the contiguous 48 states plus Puerto Rico ranged from $9 to more
than $778 per passenger. DOT does not have readily available data allowing calculation of
changes in individual communities’ per-passenger subsidy rates over time.
Two tables at the end of this report provide information about subsidies to individual EAS
communities as of September 2018. Appendix A provides a list of the subsidized communities in
the contiguous 48 states, Hawaii, and Puerto Rico. Appendix B lists the subsidized EAS
communities in Alaska.

Measures to Shrink the Program
Over the years, Congress has sought to limit the scope of the EAS program, mostly by
eliminating subsidy support for communities within a reasonable driving distance of a major hub
airport and by imposing a cap on the per-passenger subsidy. Although numerous communities
have been removed from the program, these efforts have generally failed to contain overall
spending on EAS.
Some provisions in effect since the passage of the 2012 FAA reauthorization (P.L. 112-95) could
delay, if not negate, the law’s attempt to shrink the program. For example, Section 426(c)
authorizes the Secretary of Transportation, subject to the availability of funds, to grant waivers to
communities exceeding the $200 subsidy-per-passenger cap on a case-by-case basis; Section
421(e) authorizes an unlimited number of waivers that may be granted, on an annual basis, to
communities not meeting the minimum daily enplanement requirement; and Section 425 permits
restoration of EAS eligibility to a community determined ineligible for subsidized EAS once
these conditions are met.
The FAA Reauthorization Act of 2018 included some provision requiring the Secretary of
Transportation to waive application of the $200 subsidy-per-passenger cap under certain
conditions (see section titled “$200 Subsidy Cap” for details).

70-Mile Rule
The Department of Transportation and Related Agencies Appropriations Act of 2000 prohibited
DOT from subsidizing carriers that provide EAS service to communities in the 48 states plus
Puerto Rico that are located fewer than 70 highway miles from the nearest large or medium hub
airport. As a result, a few communities lost eligibility to receive EAS subsidy, including
Hagerstown, MD, which is within 70 driving miles of Washington Dulles International Airport,
and Lancaster, PA, which is within 70 driving miles of Philadelphia International Airport.12
However, Section 409 of Vision 100 (P.L. 108-176) allowed these two communities to petition
DOT to review their mileage determinations. Based on certifications from the governor of each
state that their communities were more than 70 miles from the nearest medium or large hub via
the “most commonly used route,” DOT reinstated both communities’ eligibility for EAS subsidy.
Since then, the “most commonly used route” standard has been extended multiple times, leaving
12 DOT Order 2004-3-26 (Lancaster, PA) and DOT Order 2005-4-17 (Hagerstown, MD).

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both communities eligible for subsidized flights. The FAA Reauthorization Act of 2018 (P.L. 115254) extended their eligibility through FY2023.13 The annual per-passenger subsidy in FY2017
was approximately $344 for Hagerstown and $268 for Lancaster, both of which have EAS flights
to both Baltimore-Washington International Airport and Pittsburgh International Airport.

$1,000 Subsidy Cap
A 2011 law, the Airport and Airway Extension Act (P.L. 112-27), further limited EAS subsidies to
$1,000 per passenger, regardless of the distance from the nearest hub airport, except for
communities in Alaska and Hawaii. This resulted in eight communities with per-passenger
subsidy over $1,000 becoming ineligible: Alamogordo/Holloman Air Force Base, NM; Ely, NV;
Lewistown, MT; Miles City, MT; Kingman, AZ; Great Bend, KS; Huron, SD; and Worland, WY.
Unlike other EAS statutory requirements, the $1,000-per-passenger subsidy limit may not be
waived by the Secretary of Transportation.

$200 Subsidy Cap
During the late 1980s and early 1990s, EAS program eligibility requirements were revised by
Congress and DOT in response to insufficient program funding. The Dire Emergency
Supplemental Appropriations Act of 1989 (P.L. 101-45) prohibited DOT from subsidizing air
service after September 30, 1989 to and from any EAS point in the contiguous 48 states for which
subsidy exceeded $300 per passenger. As a result, six communities became ineligible for
subsidized EAS service.14
This $300 cap was lowered to $200 for FY1990 in P.L. 101-164, and that cap was repeated in
several later appropriations acts through the 1990s. It was made permanent by the Department of
Transportation and Related Agencies Appropriations Act of 2000,15 which set a maximum subsidy
of $200 per passenger, except in Alaska and Hawaii, unless the community is more than 210
miles from the nearest large or medium hub airport. DOT has routinely provided notice of this
statutory mandate to communities that appeared to be at risk of exceeding the cap, with the
expectation that they would work with prospective EAS air carriers to keep the subsidy per
passenger below the $200 cap. Between 1990 and 2006, 33 communities lost their eligibility
because their per-passenger EAS subsidy exceeded the $200 maximum.
In late 2006, there were no communities whose subsidies were over the $200 cap. For the
following eight years, DOT stopped enforcing the $200 cap in response to a number of shocks
that affected the EAS program during that time. These included the cessation of operations by
four air carriers in 2008, prolonged lapses in scheduled service at more than 35 EAS
communities, and higher subsidy requests from carriers resulting from higher fuel prices. 16
On May 20, 2016, DOT issued order 2016-5-17, finding 30 communities had exceeded the $200per-passenger subsidy cap in FY2015. Among these 30 communities, eight had experienced
service hiatus and received waivers from DOT (Order 2016-8-21). The remaining 22
communities all submitted petitions for a waiver and eventually received waivers, per DOT Order

13 P.L. 115-254 §457.
14 DOT order 89-9-37, effective October 1, 1989.
15 P.L. 106-69, 113 Stat. 986.
16 Email correspondence between CRS and DOT.

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2016-11-8. All continued to receive subsidized EAS service or remain eligible to participate in the
community and regional choice pilot programs.
In September 2017, DOT indicated in Order 2017-9-23 that 27 communities exceeded the subsidy
cap in FY2016, among which six also failed to meet the daily 10-enplanment requirement.17
Among these 27 communities, waivers were granted to eight communities that had experienced
service hiatus during FY2016. On December 29, 2017, in its final Order 2017-12-2, DOT granted
waivers to 18 of the 19 communities seeking waivers to one or both eligibility requirements. It
denied the petition for waiver from Jamestown, NY, which failed to comply with either
requirement but has the closest proximity (76 driving miles) to a medium hub airport, Buffalo
Niagara International Airport. In FY2016, Jamestown had the second-highest per-passenger
subsidy ($460) and the lowest average daily enplanements (seven) among EAS communities.
On May 11, 2018, DOT issued Order 2018-5-14, finding that 25 communities did not meet one or
both statutory eligibility requirements during FY2017. Four of these communities had service
hiatus in FY2017 and were therefore granted waivers. The remaining 21 communities submitted
petitions for a waiver and received waivers in August 2018, per DOT Order 2018-8-2.
The FAA Reauthorization Act of 2018 requires the Secretary of Transportation to waive
application of the subsidy-per-passenger cap if the community’s subsidy per passenger for a fiscal
year is lower than its subsidy per passenger for any of the three previous fiscal years. The law
also requires the Secretary to waive application of the subsidy-per-passenger cap if a
community’s per-passenger subsidy for a fiscal year is less than 10% higher than its highest
subsidy per passenger in any of the three previous fiscal years, but this may be waived only once
per community. This means the communities that meet the criteria would be exempt from the
$200 per-passenger subsidy cap, while the ones that do not meet the criteria may still petition
DOT for a waiver.

Minimum Daily Enplanement
The FAA Modernization and Reform Act of 2012 amended 49 U.S.C §41731(a)(1)(B) to change
the definition of “eligible place” for EAS, such that a community must maintain an average of 10
or more enplanements per day to be eligible. This requirement, however, does not apply to
locations in Alaska and Hawaii or to communities more than 175 driving miles away from the
nearest large or medium hub airport.18 The Secretary of Transportation may also waive, on an
annual basis, the 10-enplanement requirement if a community demonstrates to the Secretary’s
satisfaction that its low average daily enplanement level is caused by a temporary decline in
enplanements.19
On April 24, 2014, DOT issued a tentative order20 indicating its intention to enforce the 10passengers-per-day rule. Based on FY2013 EAS data, this would have ended subsidized service
to 13 communities: Athens, GA; Bradford, PA; El Centro, CA; Fort Dodge, IA; Franklin/Oil City,
PA; Greenville, MS; Hagerstown, MD; Jackson, TN; Lancaster, PA; Kingman, AZ; Macon, GA;
Merced, CA; and Muscle Shoals, AL.

17 DOT Order 2017-12-2. The list of six communities not meeting the 10-enplanement requirement was later adjusted

down to five, after DOT received updated enplanement numbers.
18 49 U.S.C. §41731(c) & (d).
19 49 U.S.C. §41731(e).
20 DOT Order 2014-6-6.

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All the communities except Athens, GA, filed petitions for waivers. On September 26, 2014,
DOT issued Order 2014-9-21, granting these 12 communities temporary waivers. DOT indicated
that these communities’ compliance with the 10-passengers-per-day requirement would be
reassessed based on FY2015 data. EAS service to Athens, GA, ended on September 30, 2014.
In May 2015, DOT issued another tentative order21 indicating its intention to enforce the 10passengers-per-day rule based on FY2014 data. This would have affected subsidized service to
three communities: Mason City, IA; Show Low, AZ; and Victoria, TX. All three communities filed
petitions for a waiver. DOT granted waivers to all three, per order 2015-11-19. In DOT order 20165-17, mentioned previously, DOT found that in FY2015, 12 of the 30 communities that had
exceeded the $200 subsidy cap also failed to meet the requirement of at least 10 enplanements per
day. Four communities were in the group of eight that had experienced service hiatus. DOT Order
2016-8-21 granted waivers to these communities. The remaining eight communities filed for and
were granted waivers by DOT Order 2016-11-8. They continue to receive subsidized EAS service
or remain eligible to participate in the community and regional choice pilot programs.
In September 2017, DOT’s Order 2017-9-23 stated that six communities failed to meet the
average daily 10-enplanment requirement. DOT later updated the traffic data and determined that
one community, Bradford, PA, met the enplanement requirement. Among the remaining five
communities, waivers were granted to all except Jamestown, NY.22 EAS service to Jamestown,
NY, ended on January 16, 2018.
On May 11, 2018, DOT indicated in Order 2018-5-14 that 25 communities did not meet one or
both statutory eligibility requirements in FY2017. Four of these communities had service hiatus
in FY2017 and were therefore tentatively granted waivers. Among the remaining 21 communities,
four did not meet the requirement of an average of 10 daily enplanements. They submitted
petitions and were granted waivers in August 2018.23

Cost Sharing If Near a Small Hub
The Consolidated Appropriations Act, 2014, the Continued Appropriations Resolution, 2015, and
the Consolidated Appropriations Act, 2018, directed that no EAS funds “shall be used to enter
into a new contract with a community located less than 40 miles from the nearest small hub
airport before the Secretary has negotiated with the community over a local cost share.” This
requirement does not exempt communities in Alaska and Hawaii. This would affect two
communities that are within a 40-mile distance of a small hub airport—Lancaster, PA, and
Kamuela, HI.24
Lancaster’s EAS contract was extended for an additional six-month duration three times after it
expired on September 30, 2017. This was caused by the uncertainty of Lancaster’s eligibility
during the multiple short-term extensions of EAS authority before the passage of the FAA
Reauthorization Act of 2018, which made DOT unable to go through the regular request-forproposal process. After Lancaster’s eligibility was confirmed in the FAA Reauthorization Act,
21 DOT Order 2015-5-14 finds four communities not compliant with the 10-passengers-per-day requirement:

Jamestown, NY; Mason City, IA; Show Low, AZ; and Victoria TX. Later, DOT order 2015-5-20 confirmed that
Jamestown, NY, averaged more than 10 enplanements per day in FY2014 and, therefore, remains EAS-eligible.
22 DOT Order 2017-12-2.
23 DOT Order 2018-8-2.
24 Driving distance between Lancaster, PA, and its nearest small hub airport, Harrisburg International airport, is under
40 miles, as is the distance between Kamuela, HI, and its nearest small hub airport, Kona International Airport.

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DOT issued a request for proposals with local cost sharing.25 A one-year cost-share agreement for
Kamuela was reached among DOT, the County of Hawaii, and the selected air carrier, with the
County of Hawaii paying 5% of the subsidy cost.26

Community and Regional Choice Pilot Programs
Section 405 of Vision 100—Century of Aviation Reauthorization Act directed DOT to establish
certain Community and Regional Choice Programs to provide communities with alternatives to
traditional EAS service. In the following year, 2004, DOT established two pilot programs: the
Alternate Essential Air Service Pilot Program (Alternate EAS)27 and the Community Flexibility
Pilot Program.28 All communities receiving subsidized EAS at the time of application can
participate.
Alternate EAS (AEAS) allows communities to forgo subsidized EAS for a prescribed amount of
time in exchange for a grant to spend on options that may better suit their transportation needs.
These options include more frequent air service with smaller aircraft, on-demand air taxi service,
scheduled or on-demand surface transportation, or purchasing an aircraft. The maximum grant
amount may not exceed the annual EAS subsidy at the time of application to the program.
Participating communities still need to meet the statutory eligibility criteria for EAS. Currently,
AEAS has seven participants: Beckley, WV; Crescent City, CA; Macon, GA;
Manistee/Ludington, MI; Page, AZ; Parkersburg, WV/Marietta, OH; and Tupelo, MS. All are
using the proceeds to secure public charter service.29
The Community Flexibility Pilot Program allows as many as 10 communities that are receiving
subsidized EAS to forgo EAS for 10 years in exchange for a grant equal to no more than two
years’ EAS subsidy. The grant can be used for a wide range of airport projects. Currently, Visalia,
CA, which entered the program in March 2017, is the only participating community.30

Issues and Options
The rate of increase in EAS spending remains a central issue of concern to Congress. However,
program spending should be examined in conjunction with the number of communities served.
According to a GAO report, 95 communities received subsidized EAS service in 1995 and 150 in
2008.31 In 2018, this number was 174 (see Appendix A).

25 DOT Order 2018-11-1.
26 DOT Order 2018-4-14.
27 Docket OST-2004-18715.
28 Docket OST-2000-8556
29 https://www.transportation.gov/office-policy/aviation-policy/dot-regulation-14-cfr-380-public-charters.
30 DOT order 2017-1-2. Visalia will forgo participation in the traditional EAS Program for a 10-year period, beginning

March 1, 2017, in exchange for a grant to provide funding for the construction of airport hangers.
31 GAO-09-753, National Transportation System: Options and Analytical Tools to Strengthen DOT’s Approach to
Supporting Communities’ Access to the System, July 2009, p. 4.

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Nevertheless, the growth rate of average subsidy per EAS community over the years has been
significant. The average annual EAS subsidy in non-Alaska communities rose from $1 million
per community in FY200232 to $2.6 million in FY2018.33
In addition to multiple contributing factors previously discussed, government regulations may
affect the provision of air service to small communities. For example, a 2013 FAA pilot
qualification rule34 increased the qualification requirements for airline pilots. Many pilots
working for regional airlines did not meet the new minimum qualifications. The rules appear to
have forced small carriers to raise salaries in order to attract qualified pilots, potentially raising
EAS subsidy costs as well.35
In a 2009 report, GAO offered a number of options for modifying the EAS program: 36







limiting program eligibility to communities participating as of a specified date;
allowing carriers more flexibility on type of aircraft and/or service frequency;
awarding long-term EAS agreements and incorporating financial incentives;
allowing renegotiation of EAS agreements;
consolidating EAS flights at regional airports; and
focusing EAS service on the most remote communities.

The first three options were adopted and included in federal laws. GAO also suggested that a
multimodal approach to provide financial assistance could potentially be more responsive to
communities’ needs.37 It reiterated this recommendation in its 2014 report, suggesting that
multimodal solutions, such as bus service to large airports or air taxi service to connect
communities, could be more cost-effective than the current EAS program.38
Despite the changes that have been made to limit communities’ eligibility for EAS and to permit
the use of smaller aircraft, it appears that eligible communities, air carriers, and DOT may lack
incentives to minimize program expenditures. The changes adopted in recent years, including in
the FAA Modernization and Reform Act of 2012, have not proven effective in controlling
program costs, in part because communities that fail to meet certain eligibility requirements
almost always are granted waivers upon request. The FAA Reauthorization Act of 2018 provides
that certain eligibility requirements will not apply to a number of these communities as long as
they meet certain criteria.

32 GAO-14-454T, Commercial Aviation: Status of Air Service to Small Communities and the Federal Programs

Involved, April 30, 2014, p. 9.
33 CRS calculations based on DOT data in Appendix A.
34 Required by Airline Safety and FAA Extension Act of 2010, P.L. 111-216 §217 (c)(1), 124 Stat. 2348, 2368.
35 Statement of Russell “Chip” Childs, President and CEO, SkyWest, Inc., before House Committee on Transportation
and Infrastructure, Subcommittee on Aviation, hearing “Building a 21st Century Infrastructure for America: Air
Transportation in the United States in the 21st Century,” March 8, 2017.
36 GAO-09-753, National Transportation System: Options and Analytical Tools to Strengthen DOT’s Approach to
Supporting Communities’ Access to the System, July 2009, pp. 25-33.
37 Ibid., pp. 34-36.
38 GAO-14-454T, Commercial Aviation: Status of Air Service to Small Communities and the Federal Programs
Involved, April 30, 2014, pp. 18-19.

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Appendix A. Subsidized EAS Outside of Alaska
State

Number of
EAS
Communities

EAS Community

Hub(s)

Annual Subsidy Rate as
of Sept. 1, 2018

Alabama

1

Muscle Shoals

ATL/BNA

$2,778,811

Arkansas

4

El Dorado/Camden

DFW

$2,306,627

Arkansas

Harrison

DFW/MEM

$2,397,188

Arkansas

Hot Springs

DFW

$2,378,312

Arkansas

Jonesboro

STL

$2,040,947

Page

LAS/PHX

$4,398,924

Arizona

Prescott

DEN/LAX

$3,983,055

Arizona

Show Low

PHX

$1,673,267

Crescent City

OAX

$3,310,503

California

El Centro

LAX

$2,488,824

California

Merced

LAX/OAK

$3,249,944

Alamosa

DEN

$2,593,050

Colorado

Cortez

DEN/PHX

$3,580,480

Colorado

Pueblo

DEN

$2,548,067

Arizona

California

Colorado

3

3

3

Georgia

1

Macon

BWI

$4,687,979

Hawaii

2

Hana

OGG

$114,099

Kamuela

OGG

$377,584

Burlington

ORD/STL

$2,439,963

Iowa

Fort Dodge

MSP/STL

$2,949,904

Iowa

Mason City

MSP/ORD

$2,949,904

Iowa

Waterloo

ORD

$1,727,411

Decatur

ORD/STL

$2,915,273

Illinois

Marion/Herrin

STL

$2,840,958

Illinois

Quincy/Hannibal, MO

ORD

$2,659,328

Dodge City

DEN

$3,621,182

Kansas

Garden City

DFW

$873,861

Kansas

Hays

DEN

$3,123,573

Kansas

Liberal/Guymon, OK

DEN

$3,747,998

Kansas

Salina

DEN/ORD

$2,995,087

Owensboro

STL

$2,107,191

Paducah

ORD

$2,787,695

Hawaii
Iowa

Illinois

Kansas

Kentucky

4

3

5

2

Kentucky

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State

Number of
EAS
Communities

EAS Community

Hub(s)

Annual Subsidy Rate as
of Sept. 1, 2018

Maryland

1

Hagerstown

BWI/PIT

$1,785,638

Maine

4

Augusta/Waterville

BOS

$2,045,122

Maine

Bar Harbor

BOS

$3,177,651

Maine

Presque Isle/Houlton

EWR

$4,780,955

Maine

Rockland

BOS

$2,127,026

Alpena

DTW

$2,348,781

Michigan

Escanaba

DTW

$2,832,133

Michigan

Hancock/Houghton

ORD

$2,024,076

Michigan

Iron Mountain/Kingsford

DTW/MSP

$3,924,019

Michigan

Ironwood/Ashland, WI

MSP/ORD

$3,513,814

Michigan

Manistee/Ludington

MDW

$2,990,575

Michigan

Muskegon

ORD

$2,608,523

Michigan

Pellston

DTW

$1,346,679

Michigan

Sault Ste. Marie

DTW/MSP

$1,998,416

Bemidji

MSP

$1,309,684

Minnesota

Brainerd

MSP

$1,653,672

Minnesota

Chisholm/Hibbing

MSP

$2,792,813

Minnesota

International Falls

MSP

$3,274,852

Minnesota

Thief River Falls

MSP

$3,350,312

Cape Girardeau/Sikeston

ORD

$2,984,760

Missouri

Fort Leonard Wood

STL

$3,182,419

Missouri

Joplin

DFW

$839,513

Missouri

Kirksville

STL

$1,989,635

Greenville

BNA/DFW

$2,724,153

Mississippi

Laurel/Hattiesburg

DFW/ORD

$3,133,072

Mississippi

Meridian

DFW/ORD

$2,985,821

Mississippi

Tupelo

BNA

$3,932,032

Butte

SLC

$881,665

Montana

Glasgow

BIL

$2,194,011

Montana

Glendive

BIL

$2,132,813

Montana

Havre

BIL

$2,212,162

Montana

Sidney

BIL

$4,124,531

Montana

West Yellowstone

SLC

$580,957

Michigan

Minnesota

Missouri

Mississippi

Montana

9

5

4

4

7

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Essential Air Service (EAS)

State

Number of
EAS
Communities

EAS Community

Hub(s)

Annual Subsidy Rate as
of Sept. 1, 2018

Wolf Point

BIL

$2,327,384

Devils Lake

DEN

$3,935,087

North Dakota

Dickinson

DEN

$4,162,080

North Dakota

Jamestown (ND)

DEN

$2,688,493

Alliance

DEN

$2,273,850

Nebraska

Chadron

DEN

$2,066,589

Nebraska

Grand Island

DFW

$907,348

Nebraska

Kearney

DEN

$3,675,276

Nebraska

McCook

DEN

$2,462,456

Nebraska

North Platte

DEN

$3,575,926

Nebraska

Scottsbluff

DEN

$3,152,294

BOS/HPN

$3,343,904

Carlsbad

ABQ/DFW

$3,041,207

New Mexico

Clovis

DFW

$4,281,129

New Mexico

Silver City/Hurley/Deming

ABQ/PHX

$3,368,032

Massena

BOS

$2,870,608

New York

Ogdensburg

ALB/BOS

$2,721,962

New York

Plattsburgh

IAD

$3,371,895

New York

Saranac Lake/Lake Placid

BOS

$2,045,854

New York

Watertown (NY)

PHL

$3,949,646

Montana
North Dakota

Nebraska

3

7

New
Hampshire

1

New Mexico

3

New York

Lebanon/White River Jct.

5

Oregon

1

Pendleton

PDX

$2,273,823

Pennsylvania

6

Altoona

BWI/PIT

$2,371,942

Pennsylvania

Bradford

PIT

$2,045,826

Pennsylvania

DuBois

BWI/PIT

$2,967,587

Pennsylvania

Franklin/Oil City

PIT

$1,442,788

Pennsylvania

Johnstown

BWI/PIT

$2,912,558

Pennsylvania

Lancaster

BWI/PIT

$2,504,174

Puerto Rico

1

Mayaguez

SJU

$1,550,803

South Dakota

3

Aberdeen

MSP

$1,389,795

South Dakota

Pierre

DEN

$4,651,586

South Dakota

Watertown (SD)

DEN

$2,406,155

Tennessee

1

Jackson

ATL/STL

$1,884,399

Texas

1

Victoria

AUS/IAH

$2,660,000

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Essential Air Service (EAS)

State

Number of
EAS
Communities

EAS Community

Hub(s)

Annual Subsidy Rate as
of Sept. 1, 2018

Cedar City

SLC

$2,645,932

Utah

Moab

DEN

$3,991,840

Utah

Vernal

DEN

$3,097,656

Utah

3

Virginia

1

Staunton

IAD/ORD

$2,992,903

Vermont

1

Rutland

BOS

$1,360,481

Wisconsin

2

Eau Claire

ORD

$2,464,972

Rhinelander

MSP

$1,714,307

Beckley

CLT

$2,828,034

West Virginia

Clarksburg/Fairmont

IAD/ORD

$2,850,452

West Virginia

Greenbrier/W. Sulphur Sps

IAD/ORD

$3,994,423

West Virginia

Morgantown

BWI/PIT

$2,989,432

West Virginia

Parkersburg/Marietta, OH

CLT

$1,938,219

Cody

DEN

$850,000

Laramie

DEN

$2,182,244

Wisconsin
West Virginia

Wyoming

5

2

Wyoming
Total

111

$293,612,625

Source: Department of Transportation, Non-Alaska U.S. Carriers Subsidy Reports, September 2018.
https://www.transportation.gov/office-policy/aviation-policy/essential-air-service-reports.

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Appendix B. Subsidized EAS in Alaska
Annual Contract Subsidy Rate
as of September 1, 2018

Alaska EAS Community

Hub(s) Served

Adak

ANC

$2,907,935

Akhiok

AKN

$238,460

Akutan

DUT

$890,001

Alitak

ADQ

$36,655

Amook Bay

ADQ

$36,655

Angoon

JNU

$303,298

Atka

DUT

$990,578

Central

FAI

$162,474

Chatham

JNU

$6,048

Chignik

AKN

$362,099

Chignik Lake

AKN

$362,099

Chisana

TKJ

$96,810

Circle

FAI

$162,474

Clark’s Point

DLG

$120,978

Cordova

ANC/JNU

$3,107,161

Diomede*

OME/WAA

$190,476

Egegik

AKN

$386,567

Ekwok

DLG

$102,288

Elfin Cove

JNU

$124,795

Excursion Inlet

JNU

$30,792

False Pass

CDB

$228,927

Funter Bay

JNU

$14,040

Gulkana

ANC

$206,128

Gustavus

JNU

$776,790

Healy Lake

FAI

$113,203

Hydaburg

WFB

$195,319

Igiugig

AKN

$200,933

Kake

JNU

$181,621

King Cove

CDB

$638,087

Kitoi Bay

ADQ

$36,655

Koliganek

DLG

$314,029

Lake Minchumina

FAI

$102,300

Levelock

AKN

$188,636

Manley

FAI

$43,333

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Essential Air Service (EAS)

Annual Contract Subsidy Rate
as of September 1, 2018

Alaska EAS Community

Hub(s) Served

Manokotak

DLG

$308,849

May Creek

GKN

$130,964

McCarthy

GKN

$130,964

McGrath

ANC

$669,103

Minto

FAI

$43,333

Moser Bay

ADQ

$36,655

New Stuyahok

DLG

$103,877

Nikolski

DUT

$331,986

Olga Bay

ADQ

$36,655

Pelican

JNU

$348,103

Perryville

AKN

$647,373

Petersburg

JNU/KTN

$470,525

Pilot Point

AKN

$212,971

Port Alexander

SIT

$99,364

Port Bailey

ADQ

$36,655

Port Heiden

AKN

$491,662

Port Williams

ADQ

$36,655

Seal Bay

ADQ

$36,655

South Naknek

AKN

$143,791

St. George

SNP/ANC

$354,910

Tatitlek

MRI

$102,779

Tenakee

JNU

$152,127

Twin Hills

DLG

$233,103

Uganik

ADQ

$36,655

Ugashik

AKN

$212,971

West Point

ADQ

$36,655

Wrangell

JNU/KTN

$470,525

Yakutat

ANC/JNU

$3,107,161

Zachar Bay

ADQ

Total: 63

$36,655
$22,918,323

Source: U.S. Department of Transportation, Alaskan Subsidized EAS Reports, September 2018.
https://www.transportation.gov/office-policy/aviation-policy/essential-air-service-reports.

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Essential Air Service (EAS)

Author Contact Information
(name redacted)
Analyst in Transportation and Industry
/redacted/@crs.loc.gov
, 7-....

Congressional Research Service

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20

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3AR44176. Public record. Not legal advice.