Laramie and Cody could lose air service if Congress approves President Donald Trump’s proposed budget.
Trump wants to eliminate the Essential Air Service program, which provides subsidies for commercial carriers to serve rural communities around the United States.
SkyWest Airlines currently receives $2.18 million from the U.S. Department of Transportation to serve Laramie.
“It provides all our service,” said Laramie Regional Airport manager Jack Skinner. “It’s always been subsidized.”
Cody also benefits from the EAS program.
While Yellowstone Regional Airport is able to attract commercial flights without a subsidy during the summer, SkyWest receives $938,000 to service the airport during the eight winter months.
YRA manager Bob Hooper said without the subsidy, Cody could lose winter air service entirely.
“The worst-case scenario is we would possibly have no air service at all,” Hooper said.
The subsidy program was created in 1978 after Congress deregulated the airline industry. It is intended to ensure airlines did not abandon smaller and less lucrative markets.
The Department of Transportation is required to connect cities that had commercial air service prior to deregulation. That’s done through the national air transit network by subsidizing flights to hubs where passengers can connect to other destinations.
SkyWest, which contracts with Delta and United airlines in Wyoming, serves Cody from Salt Lake City and Laramie from Denver.
The airport managers say the subsidy is important for keeping small Wyoming cities accessible.
“It enables communities like Laramie to connect with the rest of the world,” Skinner said. “It allows folks to work and live in communities like Laramie and still be able to efficiently and profitably operate their business in rural communities.”
University of Wyoming spokesman Chad Baldwin said the academic community also relies on local air service.
“Faculty, staff and students at the university do rely on good reliable air service at the Laramie airport,” Baldwin said. “Air service to Laramie Regional Airport is really important.”
But Trump’s budget proposal — titled “America First: A Budget Blueprint to Make America Great Again” — states that the subsidy is wasteful and unnecessary.
“EAS flights are not full and have high subsidy costs per passenger,” the budget states. “Several EAS eligible communities are relatively close to major airports, and communities that have EAS could be served by other existing modes of transportation.”
Cody is a two-hour drive from Billings Logan International Airport, which offers regular service to Salt Lake City, Denver, Minneapolis and other hubs.
Laramie is about two and a half hours from Denver, a major hub, and nearby Cheyenne offers regular commercial service to Denver.
Hooper said Cody’s airport served 40,000 passengers last year.
Laramie served just over 29,000 passengers in 2016, according to Skinner.
The subsidies are multi-year agreements, and the contracts with SkyWest for service to both airports are good for at least another 12 months.
If the subsidy is eliminated, there are other options for ensuring that air service continues in the two cities.
Other communities in Wyoming, such as Riverton, offer subsidies to commercial airlines through revenue guarantees.
Separate from the federal EAS subsidy, these programs ensure commercial airlines a minimum amount of revenue each month. If the airline does not meet the threshold through ticket sales, local and state government will cover the difference. That arrangement could be an option in Laramie and Cody if Congress approves Trump’s request to cancel the subsidy.
Hooper said the Cody airport already offers revenue guarantees to airlines during the popular summer months.
But Skinner said that while Laramie might look into revenue guarantees if needed, the Wyoming Department of Transportation funding that supports those programs is already scarce due to the economic downturn.
“The state fund is limited,” he said. “We’d rather continue to have the federal subsidies.”
Trump’s budget proposal is essentially a list of recommendations for Congress, which must draft a formal budget and approve it this spring.
While it does not reduce the deficit, the budget recommends increasing the defense budget and a few other departments by cutting domestic spending.
It proposes reducing the federal Department of Transportation by 13 percent.
But airline analyst Gary Leff wrote on his blog, “View From the Wing,” that Congress is unlikely to cut the EAS subsidy program.
“Members of Congress and constituents in districts receiving these subsidies care a great deal about them and are willing to exert muscle and treasure to keep them, while the public at large cares very little about the program,” Leff wrote.
Eliminating the subsidy would save $175 million.
But Skinner, the Laramie airport manager, noted that overflight fees — paid by foreign airlines that cross U.S. airspace without landing — fund an additional $100 million or so of the program’s costs.
“I know our congressional folks back in Washington are in favor of the program,” Skinner said.