EGREGIOUS, ASININE, AND SHAMEFUL (EAS)

The USG willfully provides Eau Claire, WI (EAU) a competitive advantage v. its neighbor to the south - LaCrosse, WI (LSE) that is not subsidized by spending $6.5 million to lure a ULCC to replace SkyWest. Or Rochester, MN for that matter.

After 40+ years of watching and studying this industry, today on this the 13th day of July in the year 2022, the U.S. DOT granted an Essential Air Service (EAS) award to #SunCountryAirlines (SY) to serve EAU. Yes, Deputy Asst. Secretary for Aviation and International Affairs #JoelSzabat just threw the 44-year-old program into what will assuredly become a swamp full of unintended consequences.

There have been some questionable decisions over time, but this is ... well ... It is true that the EAS program needs a re-think about what is essential in 2022 versus 1978, but surely this is not it. This is a complete tone-deaf "something" to rectify an issue facing 1 of 29 small community airports. The line outside of your office will grow.

As I wrote in May, if this proposal were to become the definition of ESSENTIAL AIR SERVICE (EAS) in 2022, MAYBE Congress will learn in real time the difference between being connected to the grid v. simply having access to some leisure destination offering low fares. The latter is a utility that takes local money and spends it elsewhere. Nice to have. The former has the potential to import passengers that will spend in the local community.

Isn't there an economic development component to awarding EAS flying? I digress.

Finally, we have challenged whether the USG should be subsidizing any service that competes with a struggling small airport in close proximity that cannot use airport money to address a government-funded competitive disadvantage (think LaCrosse, WI).

SY proposed, and the DOT bought a proposal to provide an average of 4 RT/Week consisting of 2 RT/week to MSP with 2 additional RT/Week on a seasonally adjusted schedule to either RSW, MCO, or LAS, using a 186-seat B737-800 aircraft, at an annual subsidy of $6,460,988. SY has interline agreements with Hawaiian Airlines, Inc., Condor Airlines, China Airlines, Eva Air, and Icelandair. SY intends to spend $40K to market the air service.

Now in the eyes of the USG, Orlando, Ft. Myers, and Las Vegas are essential. Yep, take those Wisconsin dollars and contribute further to the Pandemic-induced windfalls realized in the states of FL and NV.

And... given the touch points created by the awarded service, the good folks at EAU, will have connections to Hawaii, China, Taiwan, Germany and Iceland. That should maximize the utility of EAU travelers on whatever days the service might run.

Sec. Szabat, if this is the direction you are going you should commission a new DOT study be undertaken to replace the "Southwest Effect" work done in the early 90s. The 2022 version might be called "The Government-Induced EAS Effect". It is another way to rid small airports from the grid.

July 11, 2022