Small Community Air Service Development Program

Order 2007-2-22
OST-2007-27370

Issued and Served February 26, 2007

Order Soliciting Community Grant Proposals

Eligible applicants are those communities that (1) are served by an airport that was not larger than a small hub airport for calendar year 1997 and (2) had insufficient air service or unreasonably high airfares. Communities that do not currently have commercial air service are also eligible, but they must have met or be able to meet in a reasonable period all necessary requirements of the Federal Aviation Administration for the type of service involved in their grant proposals. Communities served by medium and large hubs are ineligible to apply.

EAS communities may apply. Small communities that meet the basic criteria and currently receive subsidized air service under the Essential Air Service program are eligible to apply for funds under the Small Community Program. Indeed, a number of EAS‑subsidized communities applied in past years and some have received grant awards. However, grant awards to EAS‑subsidized communities are limited to (1) marketing or promotion projects that support existing or newly subsidized air services or (2) new air services, such as on‑demand air taxi service. Furthermore, grants funds will not be authorized for EAS‑subsidized communities to support either additional flights by EAS carriers or changes to those carriers' existing schedules.

Communities that propose to use the grant funds for service in a city-pair market that is already served by a carrier must explain in detail why the existing service is insufficient or unsatisfactory, or provide other compelling information to support such proposals. This information is necessary for the Department to consider the competitive implications of giving financial or other tangible incentives for one carrier that the other carrier is not receiving. The Department is concerned generally about subsidizing one carrier but not others in a competitive market and that, while bringing new competition may benefit the community in the short term, a market may prove insufficient to support two carriers and service may deteriorate to the point that the community's service is less beneficial than before.

Proposals should be submitted in the above-referenced docket no later than April 27, 2007

By: Michael Reynolds