How Essential is Essential Air Service? A Welfare Analysis of Airport Access for Remote Communities

The Airline Deregulation Act of 1978 gave airlines almost total freedom to determine which domestic markets to serve and which fares to charge. To alleviate fears that newly deregulated airlines would shift their operations to serve large, profitable markets, leaving remote communities without access to the national passenger airline network and the markets and opportunities that come along with such access, Congress established Essential Air Service (EAS), a federal government program that provides subsidies for more than 100 communities in the continental US. This study conducts a welfare analysis of EAS by estimating a discrete choice model of demand using unique data that couple passengers’ choice of flight with their residential ZIP code. These data allows the study team to estimate passengers’ willingness to trade off farther driving distance for lower prices, which in turn allows the team to estimate the monetary value residents place on having access to a nearby airport. The study team finds that subsidies to several EAS airports that are relatively close to a larger hub airport cannot be justified on public finance grounds, suggesting these EAS funds could be put to better use elsewhere.

Language

  • English

Project

  • Status: Active
  • Funding: $15000
  • Contract Numbers:

    NITC-1550

    69A3551747112

  • Sponsor Organizations:

    Office of the Assistant Secretary for Research and Technology

    University Transportation Centers Program
    Department of Transportation
    Washington, DC  United States  20590
  • Managing Organizations:

    TREC at Portland State University

    1900 SW Fourth Ave, Suite 175
    P.O. Box 751
    Portland, Oregon  United States  97201
  • Performing Organizations:

    University of Arizona, Tucson

    PO Box 210072
    Tucson, AZ  United States  85721
  • Principal Investigators:

    Drukker, Austin

  • Start Date: 20220201
  • Expected Completion Date: 20230131
  • Actual Completion Date: 0
  • USDOT Program: University Transportation Centers

Subject/Index Terms

Filing Info

  • Accession Number: 01836403
  • Record Type: Research project
  • Source Agency: National Institute for Transportation and Communities
  • Contract Numbers: NITC-1550, 69A3551747112
  • Files: UTC, RIP
  • Created Date: Feb 22 2022 6:27PM