The Essential Air Service Program

In response to a congressional request, GAO discussed its report on the small communities Essential Air Service Subsidy Program and provided related updated information. GAO found that the Civil Aeronautics Board (CAB) has successfully implemented this program, ensuring continued air service to more than 500 small communities protected by the Airline Deregulation Act. However, the number of passengers using air service at approximately 100 subsidized communities has decreased by over 50 percent since deregulation began. GAO commented that, unless the communities make progress toward self-sustaining service, carriers are likely to substantially reduce service to these communities when the program ends in 1988. GAO concluded in its report that the Essential Air Service Program could be more cost effective and useful to communities and suggested that Congress consider changing program eligibility criteria to temporarily increase subsidies to communities where there is a potential to develop markets and discontinue subsidies to communities unlikely to support air service after 1988. However, GAO noted that discontinuing subsidies would represent a clear change in guarantees provided by the 1978 act. GAO also suggested that Congress consider permitting CAB the flexibility to allow communities with greater air service needs to replace lower priority air service communities if States propose such replacement. GAO also examined the transfer of the air service program to the Department of Transportation (DOT) when CAB is terminated in 1985. Although GAO found no compelling reasons for the program not to be transferred, it noted that DOT has made little progress with respect to the organization and administration of the program within the department.