i

ReportoftheWorkingGroupOnImproving

AirServicetoSmallCommunities

May9,2017

ii

Table of Contents Acknowledgements………………………………………………………………………………………………….iiiExecutiveSummary…………………………………………………………………………………………………ivMissionoftheWorkingGroupandOverviewoftheProcess…………………..……………..…1AnIntroductiontothePresentStateofAirServiceinSmallCommunities……..…………2ObstaclestoAttractingandMaintainingAirTransportationServicetoSmallCommunities…………………………………………………………………………………………………...5RecommendationsforMaintainingandImprovingAirTransportationServiceinSmallCommunities………………………………………………………………………………….18ExamplesofPublicPrivatePartnershipsSuccessfulinAttractingandRetainingAirServiceinSmallCommunities……………………………………………………………27AppendixA:SummaryofOutreachEfforts………………………………………………………………30AppendixB:Section2303ofP.L.114‐190……………………………………………………………….32AppendixC:WorkingGrouponImprovingAirServicetoSmallCommunitiesMemberList………………………………………………………………………………………34AppendixD:MeetingsoftheWorkingGroup…………………………………………………………..36AppendixE:AcronymsUsedinthisReport……………………………………………………………..37AppendixF:DissentsofWorkingGroupMembers………………………………………………….38

iii

Acknowledgements ThemembersoftheWorkingGroupwouldliketothanktheDepartmentofTransportationOfficeofAviationandInternationalAffairsforprovidingmeetingspaceandlogisticalsupportduringthisprocess.Also,wethanktheLasVegasVisitorsandConventionBureauandtheDenverInternationalAirportforprovidingmeetingspace.TheWorkingGroupalsoacknowledgesthesuperlativeworkofDr.RussellMillsforhisleadroleinwritingandeditingthisreportonbehalfoftheWorkingGroup.

                      

    

iv

Executive Summary 

Section23031oftheFAAExtension,Safety,andSecurityActof2016(P.L.114‐190)directedtheSecretaryofTransportationtoestablishaWorkingGrouponImprovingAirServicetoSmallCommunities(referredtohereafteras“theWorkingGroup”).TheSecretaryappointed25stakeholdersrepresentingacross‐sectionofairportofficials,stateaviationofficials,airlineexecutives,apilotunion,consultants,andacademics.2ThemandateoftheWorkingGroupwastoconsiderthreesubjectareas:

Currentorpotentialnewairserviceprograms,includingtheEssentialAirServiceprogramandtheSmallCommunityAirServiceDevelopmentprogram;

Initiativestohelpsupportpilottrainingandaviationsafety; Whetherfederalfundingforairportsservingsmallcommunitiesisadequate.

TheWorkingGroupwasalsodirectedtoreporton“public‐privatepartnershipsthataresuccessfulinattractingandretainingairtransportationservice”.TheWorkingGroupfulfillsitsmandatewiththefollowingreport.Uponbeingappointed,theWorkingGroupmetinpersonfourtimesduringthefirstquarterof2017.TheWorkingGroupconductedoutreachviaanonlinesurvey,whichwasdistributedtotheNationalAssociationofStateAviationOfficials,amongothers.Theoutreacheffortsrevealed,andconsensusoftheWorkingGroupconcurred,thatsmallcommunityairserviceisvitallyimportanttotheeconomicandsocialwell‐beingofsmallcommunities,andtobindthenationtogetherasawhole.RecommendationsTheWorkingGroupachievedconsensuson21recommendationsforimprovingairserviceatsmallcommunities.TheconsensusoftheWorkingGroupwasthattwosubjectsinparticularmeritspecialattention:resolvingthenationwidepilotshortageandbolsteringtheEssentialAirServiceprogram.PilotshortageThenationwidepilotshortageisthedominantthemeinmanyoftoday’schallengestosmallcommunityairservice.Whiledemographicsandbusinesscyclesplayarole,amajordriverofthepilotshortageisthe2013FirstOfficerQualification(FOQ)Rule,whichbutforafewexceptions3,requirespilotstohaveatleast1,500hoursofflighttimeandanAirTransportPilot(ATP)certificatebeforetheycanbeconsideredfortheirfirstairlinepilotjob.Thisnew1,500hoursrequirementisanincreasefromthelong‐standingstatutoryrequirementthatfirstofficershadatleastanFAACommercialPilotcertificate,whichrequiredaminimumof250flighthours.Theimpositionofthenew1,500hoursrequirementhas

1SeeAppendixAforcompletewordingofSection2303ofP.L.114‐1902SeeAppendixBforcompletelistingofworkinggroupmembersandaffiliations.3ApilotcanearnaRestrictedAirTransportPilot(r‐ATP)rating,permittingserviceasafirstofficerinaPart121aircarrier,with750hoursiftheywereamilitarypilotor1,000hoursforgraduatesofcertainbaccalaureatedegreeprograms,and1,250forgraduatesofcertainassociatedegreeprograms.

v

drasticallyincreasedthetimeandcostforaspiringaviatorstobecomecommercialairlinepilots,inmanycasesputtingthepilotingcareeroutofreach.Meanwhile,the2015PilotSourceStudyindicatesthatfirstofficershiredsincetheincreasedflighthoursrequirementwasimposedhaveadecreasedrateofnew‐hiringtrainingcompletion,and“requiredsignificantlymoreextratraining”.Anotherstudy,the2010PilotSourceStudy,concludedthatthehighestnew‐hiretrainingcompletionratesforfirstofficersandlowest“extratrainingrequired”rateswereforpilotswith501‐1000flighthoursexperience—notthosewithmorethan1,500hours,asisnowrequiredbyFOQ.Therefore,amongotherimportantrecommendations,theWorkingGrouprecommendsthatCongressdirecttheFAAto:

1) ReevaluateandincreasetheamountofhoursofcreditawardedtoacademicpathwaysfortheissuanceofaRestrictedATP.Congressshouldaffirmthatqualifying“academic”trainingshouldnotbelimitedtomilitaryandaviationdegreeprograms.

2) Awardsubstantialhoursofcredittowardacarrier‐specificandtype‐specificRestrictedATPbasedoncarrier‐specificandtype‐specifictrainingandtesting.  

Effectiveimplementationofbothoftheserecommendationswouldre‐openthepathwayforaspiringaviatorstobecomecompetentprofessionalairlinepilots.BolsteringtheEssentialAirServiceProgramTheWorkingGroupconcludesthattheEASprogramisthebackboneofsmallcommunityairserviceintheUnitedStatesandmustbemaintainedandoptimized.ItisvitalthatCongressenhancesandfullyfundstheEASprogram.ManyoftheperceivedinefficienciesintheEASprogramaresymptomsoflargerissues,especiallytheshortageofqualifiedpilots.Therefore,theDOT,FAA,andCongressshouldtakeurgentstepstoaddressthepilotshortagetoimprovetheEASprogram.Additionally,theWorkingGroupconcludesmanyoftheeligibilityrequirementsontheEASprogramareoverlyrestrictive,preventcommunitieswithlegitimateairserviceneedsfromaccessingairservice,anddonottakeintoaccounttheseasonalityofserviceinmanycommunities.Finally,theWorkingGroupbelievesitisessentialtoenhancethedecision‐makingroleforcommunitiesintheEASprogram.Eachofthe21recommendationsoftheWorkingGroupwascarefullyconsidered,andshouldbeimplementedbytherelevantagency,departmentorCongress.

1

Mission of the Working Group and Overview of the Process 

Section23034oftheFAAExtension,Safety,andSecurityActof2016(P.L.114‐190)directedtheSecretaryofTransportationtoestablishaWorkingGrouponImprovingAirServicetoSmallCommunities(referredtohereafteras“theWorkingGroup”).TheWorkingGroupiscomprisedof25stakeholdersrepresentingacross‐sectionofairportofficials,stateaviationofficials,airlineexecutives,apilotunion,consultants,andacademics.5ThefirstmeetingoftheWorkingGroupwasheldonJanuary25,2017attheDepartmentofTransportationheadquartersinWashington,D.C.Duringthismeeting,Mr.AndrewBonney(CapeAir)waselectedchairmanandMr.JoshuaAbramson(EasterwoodAirport)waselectedvice‐chairmanoftheWorkingGroup.TheWorkingGroupagreedtocloselyfollowthestatuteindeterminingthescopeofitswork.Specifically,Section2303directstheworkinggrouptoboth“identifyobstaclestoattractingandmaintainingairtransportationservicetoandfromsmallcommunities”and“developrecommendationsformaintainingandimprovingairtransportationservicetoandfromsmallcommunities.”Section2303ofP.L.114‐190didnotdefine“smallcommunity,”andtheWorkingGroupusedthecommonmeaningwithoutfurtherdefinition.ThestatutedirectedtheWorkingGrouptoconsiderthreepotentialimpedimentstoairserviceinsmallcommunities:

Considerwhetherfundingfor,andthetermsof,currentorpotentialnewprogramsaresufficienttohelpensurecontinuationoforimprovementtoairtransportationservicetosmallcommunities,includingtheEssentialAirServiceprogramandtheSmallCommunityAirServiceDevelopmentprogram;

Identifyinitiativestohelpsupportpilottrainingandaviationsafetytomaintainairtransportationservicetosmallcommunities;

Considerwhetherfederalfundingforairportsservingsmallcommunities,including

airportsthathavelostairtransportationservicesorhaddecreasedenplanementsinrecentyears,isadequatetoensurethatsmallcommunitieshaveaccesstoquality,affordableairtransportationservice.

Additionally,thestatutedirectedtheWorkingGroupto“identifyinnovativeStateorlocaleffortsthathaveestablishedpublic‐privatepartnershipsthataresuccessfulinattractingandretainingairtransportationserviceinsmallcommunities”.

4SeeAppendixBforcompletewordingofSection2303ofP.L.114‐1905SeeAppendixCforcompletelistingofworkinggroupmembersandaffiliations.

2

Attheinitialmeeting,theWorkingGroupdecidedtoholdthreeadditionalmeetingstocoordinateandcompleteitswork.Thedates,location,andtopicsdiscussedforeachmeetingareoutlinedinAppendixD.

An Introduction to the Present State of Air Service in Small Communities AcrosstheU.S.,smallercommunitiesfaceachallengingenvironmentforattractingandretainingcommercialairservice.Aseriesoffactorsincludingairlineconsolidation,airlinefleetchangesincludingupgauging(thepracticeofusinglargeraircraftonaparticularroute),evolvingairlinebusinessmodels,inadequatefundingforairports,anincreasinglycomplexregulatoryenvironment,macro‐economicinfluences,andmorerecently,ashortageinqualifiedpilotshasresultedinasignificantdecreaseinaircarrierserviceatsmallandnon‐hubairportsasclassifiedbytheNPIAS.Figure1illustratesthedecreaseofserviceatsmallandnon‐hubairportscomparedtolargehubs.Since2007,smallercommunitieshavelostover31%ofscheduleddepartures,17%ofseats,and13.4%oftotalconnectivity.Importantly,since2007,over50communitieshavelostallscheduledairservicewithanother150communitiesatriskoflosingallornearlyallairservice.6Figure1:AirServiceChangesintheUnitedStates(2007‐2016)

Source:InterVISTASanalysisofBTSdataTherearesevereeconomicconsequencesforsmallcommunitieswhoexperienceatotalorpartiallossordecreaseofairservice.InmanysmallcommunitiesaroundtheUnitedStates,airportsserveasanengineofaregion’seconomy.Inadditiontodirecteconomicimpactsassociatedwithemploymentandpurchasing,airportsfacilitatetrade,enhanceand

6RegionalAirServiceAlliance.

3

enabletourism,andprovideconnectivitytotheglobaleconomy.Nationwide,thenumbersarestaggering:aviationaccountsformorethan5%ofgrossdomesticproduct(GDP),contributes$1.6trillionintotaleconomicactivityandsupportsnearly11millionjobs.7Airportsinsmallcommunitiesprovidevitallinkstothelargeraviationnetworkthatfacilitatethislevelofeconomicactivity.Whilesmallandnon‐hubairportsaccountforonly12%ofallpassengertraffic,theymakeup88%ofthecommunitieswherepassengersaccessthecommercialserviceairlinenetworkintheUnitedStates.Theseairportsprovidevitaleconomicactivitytotheircommunities.Theseairportsaretypicallyservedbyregionalairlines;infact,regionalairlinesprovidetheonlysourceofscheduled,commercialairserviceat2/3ofournation’sairports.8Figure2:TheScopeofRegionalAirlineServiceintheUnitedStates

Source:RegionalAirlineAssociation

In2016,smallandnon‐hubairportscontributed$121billionineconomicoutputsupporting1.1millionjobs.9Additionally,smallandnon‐hubairportsaccountfor30‐45%ofdeparturesatlargeandmediumhubairportssuchasCharlotte(CLT),Dallas/FortWorth(DFW),andAtlanta(ATL).Therefore,lossordeclineofserviceinsmallercommunitieshasseriouseconomicconsequencesnotonlyforsmallandnon‐hubs,butalsoforlargerhubsreliantonconnectingtraffic.

7TheEconomicImpactofCivilAviationontheU.S.Economy.FAA.November2016.8RAAAnnualReport.https://cloud.3dissue.com/130636/137753/161104/RAA2016AnnualReport/html5/index.html?page=1&noflash9EconomicImpactofSmallCommunityAirportsandthePotentialThreattoEconomieswiththeLossofAirService.InterVISTASConsulting.January2017.

4

Figure3:RegionalAirlineServiceatU.S.Airports

Source:RegionalAirlineAssociationanalysisofPlaneStatsOAGdataThestatutorymissionoftheWorkingGroupwastoconductoutreachwithstakeholderstoidentifytheobstaclesthatareleadingtothislossofserviceinsmallercommunitiesacrosstheU.S.andtodeveloprecommendationstoaddressthesechallenges.Inthesectionsbelow,weprovideanoverviewofthemajorobstaclestoattractingandmaintainingairtransportationserviceinsmallcommunities.Wethenproviderecommendationsformaintainingandimprovingserviceinsmallcommunitiesaswellasaddressingtheshortageofqualifiedpilots.Finally,wehighlightexamplesofpublic‐privatepartnershipsfromsmallcommunitiesthathavebeensuccessfulinattractingandretainingairservice.

5

Obstacles to Attracting and Maintaining Air Transportation Service to Small Communities AnInadequateSupplyofPilotsThreatenstheFutureofSmallCommunityAirServiceOneofthemostseriousthreatstothefutureofairserviceinsmallcommunitiesistheinadequatesupplyofqualifiedpilots.AstudypublishedbytheUniversityofNorthDakotafoundthatoverthenextdecade,majorairlineswillneedtohirealmost50,000pilotsresultinginashortageofapproximately14,000pilotsatmajorairlinesaloneby2026.10Figure4illustratestheprojectedshortfallofpilots.Figure4:ProjectedPilotShortage2016‐2026

Source:UniversityofNorthDakotaPilotForecast(2016)Figure5belowshowsthenumberofactivepilotcertificatesofthoseaged20‐59.Thetotalnumberofprivate,commercialandATPcertificatesheldbypilotsaged20‐59hasdecreasedby19.7%since2009.Thisshortagewillbeexperiencedbytheregionalaircarriersfirstastheyserveasthebottomrungonthepilotcareerladderandthemajoraircarriershireamajorityoftheirpilotsfromthispoolofapplicants.Thereareseveralfactorsthathavecontributedtothepilotshortagefacingthecountry.

102016UniversityofNorthDakotaPilotSourceStudy.

6

Figure5:EstimatedActivePilotCertificates

Source:FAAUSCivilAirmenStatistics,Table12Amajordriverofthedevelopingpilotshortageisthe2013FirstOfficerQualification(FOQ)Rule,whichbutforafewexceptions11,requirespilotstohaveatleast1,500hoursofflighttimeandanAirTransportPilot(ATP)certificatebeforetheycanbeconsideredfortheirfirstairlinepilotjob(the“1,500HourRule”).Thisnew1,500hoursrequirementisanincreasefromthelong‐standingstatutoryrequirementthatfirstofficershadatleastanFAACommercialPilotcertificate,whichrequiredaminimumof250flighthours.Theimpositionofthenew1,500hoursrequirementhasdrasticallyincreasedthetimeandcostforaspiringaviatorstobecomecommercialairlinepilots,inmanycasesputtingitoutofreach.Thishasdecreasedthesupplyofavailablepilotsandevensuppresseddemandforstudentsenteringthecareertrack.A2016studybytheUniversityofNorthDakotaandtheUniversityofNebraskaOmahafoundtheFOQruleprompted20%ofaspiringpilotstothinktwiceaboutanairlinecareerwhile8%ofthoseformerlyplanningairlinecareersnolongerplannedtoflyforairlines.12Mostimportantly,thereisaninversecorrelationbetweenincreasedflighthoursofexperienceandfirstofficerperformance.ThePilotSourceStudyfoundpilotshiredaftertheFOQruleoftenrequiredmoreremedialtrainingthanthosehiredbeforetheimplementationoftherule,despitethefactthattheyhadmoreflighthoursloggedthanthecomparablegroupbeforeFOQ.1311ApilotcanearnaRestrictedAirTransportPilot(r‐ATP)rating,permittingserviceasafirstofficerinaPart121aircarrier,with750hoursiftheywereamilitarypilotor1,000hoursforgraduatesofcertainbaccalaureatedegreeprograms,and1,250forgraduatesofcertainassociatedegreeprograms.12Lutte,RebeccaandKentLovelace.2016.“AirlinePilotSupplyintheUS:FactorsInfluencingtheCollegiatePilotPipeline.JournalofAviationTechnologyandEngineering.6:153‐63.13Bjerke,Elizabeth,etal.2016.PilotSourceStudy2015:USRegionalAirlinePilotHiringBackgroundCharacteristicChangesConsequenttoPublicLaw111‐216andtheFAAFirstOfficerQualificationsRule.JournalofAviationTechnologyandEngineering.5:2:3‐14.

7

Thereareseveraladditionalfactorsthatexacerbatetheshortageofpilots.First,thereisincreasedcompetitionforfirstofficersandcaptainsbyrapidlygrowinginternationalcarriersintheMiddleEastandAsia,wherepilotsmaybegintheircareerswithacommercialairman’scertificateandjust250hoursofflighttime.Infact,the2015PilotCareerAspirationsStudy14foundthatoverhalfofpilotssurveyedwere“likely”or“verylikely”torelocateabroadforanearliercareerstart.Second,commercialairlinepilotsarerequiredtoretireatage65,somanypilotshiredfollowingthederegulationboominthe1980sarequicklyapproachingretirementage.Thispredictablewaveofretirementsatthemajorairlines,whichissimilartotheairtrafficcontrolshortage,isresultinginmajorairlineshiringpilotsfromtheregionalairlines.AmericanAirlinesneedstohireapproximately100pilotsamonthinordertoreplaceretiringpilots.15Infact,forecasthiringatU.S.majorairlinesalone,neededtokeeppacewithAge65relatedretirements,growth,andotherattrition,isforecastatbetween3,400–5,000pilotsperyearbetween2017‐2026.Figure6:ForecastHiringatMajorAirlines

Source:UniversityofNorthDakotaPilotForecast(2016)Atthesametime,farfewernewpilotsarestartingdowntheairlinepilotcareerpath.AccordingtoFAAairmendata,between1990and2016,thenumberofnewpilotcertificateshasdeclinedsignificantly.Duringthisperiodissuanceofnewprivatepilotcertificatesdecreasedby59percent,andissuanceofnewcommercialpilotcertificates14https://www.halldale.com/files/halldale/attachments/Kent%20Lovelace.pdf15UniversityofNorthDakotaPilotSourceStudy.

8

declinedby34percent.16Duringthissametimeperiod,ATPcertificatesincreasedby19percentbutthisincreasebeganwhenPL111‐216spurredthenewFOQrule,andisassociatedwiththerulechangethatrequiredallPart121commercialairlinepilotstoholdthatcertificate.Figure7:OriginalAirmenCertificatesIssuedbyCategory(1990‐2016)

Source:RAAAnalysisofFAAUSCivilAirmenStatistics,Table12InMarch2017,therewere124,598ATPsintheFAA’sAirmenCertificationDatabase.17Amongthese,only90,353ATPcertificateholdersresidedintheU.S.andalsoheld1stor2ndclassmedicals(requiredbytheFAAforairlineemployment).Thesenioritylistsforthelegacy,regional,lowcost,national,andlargecargoaircarriersexceed86,000,anddonotincludepilotsemployedbybusinessaviationorbyoperatorswhodonotpublishsenioritylists.Thisleavesfarfewerthan5,000U.S.ATPswithunexpired1stor2ndclassmedicalswhoareactuallyqualifiedandavailable.Critically,theselistsdonotaccountforage,pilotingskillandleadershipskills,ortheexistenceofotherbackgroundeventsthatwouldprecludehiring.In2016RegionalAirlineAssociationmemberscollectivelysoughttohiremorethan7,100pilots,butwereonlyabletohire64percentofpilotsdesired.

16FAAAirmenCertificateDatabase.https://www.faa.gov/licenses_certificates/airmen_certification/releasable_airmen_download/17https://www.faa.gov/licenses_certificates/airmen_certification/releasable_airmen_download/

9

Figure8:ATPCertificatesbyMedicalQualifications

Source:FederalAviationAdministrationU.S.CivilAirmenStatisticsandAirmenCertificationDatabaseMarch2017;RAAhiringtrendssource:RAAMembershipPilotStaffingData,2016Overall,thepilotcareerpathislucrative;analysisbyBrownAviationLeaseshowsapilot’sreturnoneducationandtraininginvestmentishealthy;foreverydollarinvestedineducation,pilotsearn$33–higherthantheROIforteachers,doctorsandlawyers.18However,thecostoftraining,whichhasincreasedduetothe“1,500HourRule”,nowexceeds$150,000forfirstofficers.19Theseinitialinvestmentcostsofbecomingfirstofficersmaydeterpotentialpilotsfrompursuingacareerintheairlineindustry.Theeffectsofthepilotshortagehaverippledthroughouttheairlineindustry.Severalregionalcarriershavehadsuchdifficultyfindingpilots,theyhavehadtoendserviceonroutesandcancelflightswhenpilotsarenotavailable.Whensmallregionalcarrierscancelflightsinsmallermarkets,ithastheeffectofsuppressingdemandaspassengerschoosemorereliablemodesoftransportationincludingdrivingtoairportsthreeormorehoursaway.Thepassengersarenotprivytothe‘reasonsbehindthecancellation’andsimplyattributeittounreliableairlineserviceintheircommunity,leadingtodecreaseusage.ThepilotshortageissoseverethatRepublicAirwayscitedtheshortageasoneofthefactorsthatledtothecompanyfilingbankruptcyinFebruary2016.TheCEOofSkyWestAirlines,RussellChilds,testifiedinaCongressionalhearingonMarch8,2017thatmanysmallcommunitiesareatriskoflosingserviceduetothepilotshortage,whichheestimatesmayresultintheparkingofuptotwo‐thirdsoftheregionalairlinefleet.20

18https://static1.squarespace.com/static/56c8c4cdd51cd438176c4c01/t/56d8a64ba3360ca9404f4344/1457038924614/ROI‐Graphic.jpg19Shane,Nancy.TheRelationshipOfAPilot’sEducationalBackground,AeronauticalExperienceAndRecencyOfExperienceToPerformanceInInitialTrainingAtARegionalAirline.Ph.D.Dissertation.20Karp,Aaron.SkyWestCEOwarnspilotshortagecouldleadtobigservicecuts.AirTransportMagazine.March8,2017.

10

Regionalairlineshavetakenstepstoreducetheimpactofthepilotshortageandasof2017areofferingtheshrinkingpoolofqualifiedpilotslucrativehiringincentives.TheRegionalAirlineAssociationreportsthatmembercarriershaveincreasednewhireFirstOfficertotalcompensationmorethan105%betweenfirstquarter2015andfirstquarter2017.MostregionalairlineshavedevelopedflowprogramstomajorcarriersandallPart121regionalairlinesalsoofferfinancialincentivestonewATPpilots.Insomecasesthesebonusesexceed$30,000,inadditiontopilots’minimumguarantee(base)pay.Almostallregionalcarriersnowhaveestablishedpipelineprogramswithflighttrainingschoolsanduniversitiesdesignedtoattractgraduatestotheirairlines.Thiscompetitionforgraduatesofuniversitiesandflightschoolshasalsoputpressureonflighttrainingprogramsthatstruggletomaintainacadreofcertifiedflightinstructorstotrainthenextgenerationofpilots.Theairlinesarerecruitingtheflightinstructorsintoairlinepilotjobs.However,notallsmalleraircarriershavebeenabletocompeteaseffectivelyforpilots.AslargerregionalcarriersthatarepartnersofnetworkcarriersandhavesignificantsizeandscaleofoperationhaveraisedFOpay,theentiregroupofindependentregionalairlines(bothPart121andPart135),whichfocusalmostexclusivelyonsmallcommunityandEASservice,finditmoredifficulttorecruitandretainpilots.

EASisEssentialtoSmallCommunityAirServiceandMustbeFullyFunded

Aspartofthe1978AirlineDeregulationAct,CongresscreatedtheEssentialAirService(EAS)programtoensureallcommunitiesreceivingcommercialairservicebeforederegulationwouldcontinuetoreceivecommercialairserviceinaderegulatedmarket.Theprogramrecognizedthatreliable,scheduledairserviceisakeyeconomicdriverforcommunitiesofallsizes;however,lowerdensity,ruralmarketsaremorevulnerabletoairservicelosswhentheycompetewithhigherdensity,higheryieldmarkets.Tohelpsmallercommunitiesremainviable,theDepartmentofTransportationprovidesasubsidytooffsetlackofpassengerrevenueatcertaincommunitiesinordertopreserveaccesstotheNationalAirTransportationSystem.Thesesubsidiesallowaircarriersservingthesemarketsaprofitmarginallowanceoffivepercent.Afivepercentoperatingprofitonaroutethathas$2,000,000incombinedrevenuefromEASandticketrevenuenetstheairline$100,000,providedcosttargetsaremet.However,EASsubsidiesalsopayforaircraft,maintenance,stationcosts,andsalariesforallworkgroups,includingpilots.ThepilotshortagediscussedaboveisimpactingtheEASProgramaswell,bothdirectly,becausetherearetoofewpilotstoflyalltheroutes;andindirectly,aspilotcompensationstrategiesassociatedwithpilotrecruitmentincreasethecostofprovidingairservicetoEAScommunities,whichdirectlyincreasesoverallprogramcosts.TheWorkingGroupconcludesthattheEASprogramisthebackboneofsmallcommunityairserviceintheUnitedStatesandmustbemaintainedandoptimized.ItisvitalthatCongressrecognizetheneedtomaketheEASprogramapermanentpartoftheDOT’stransportationframework.ThisalsoincludestheneedtofullyfundtheEASprogram.

11

Inadditiontoprovidingvitalaccesstotheairtransportationsystem,EASserviceprovidessignificanteconomicbenefitstocommunities.DetailedeconomicimpactstudiesattwoEssentialAirServiceAirports(Clarksburg,WestVirginiaandKearney,Nebraska)producedsimilarresults.OnaverageEASserviceinthesetwocitieswasestimatedtogenerate23localfulltimeequivalent(FTE)jobsbydirecteffectandatotalof31localFTEjobswiththeadditionofindirectandinducedeffects.Localannualpayrollaveraged$1.1millionandtotalannuallocaleconomicoutputaveraged$4.1million.AlthoughtheEASprogramprovidesenormouseconomicbenefittoruralcommunitieswhileimprovingthequality‐of‐lifeforAmericansresidinginthosecommunities,theprogramhasbeenreformedanumberoftimestofocusresourcesonthosecommunitieshavingfewalternativestocommercialairservice.Pointsthatareconsideredtobewithinshortdrivingdistanceofhubairportsandpointswithaveryhighperpassengersubsidyhavebeeneliminatedthrougheligibilitychangesovertheyears.Specifically:

The2000DepartmentofTransportationandRelatedAgenciesAppropriationsActmadepermanentaprohibitionenactedin1990onsubsidiesforcommunitiesinthecontiguousUnitedStateswithin70milesofalargeormediumhubairportandforcommunitieswithaper‐passengersubsidyover$200unlessthatcommunityismorethan210milesfromthenearestlargeormediumhubairport.

TheAirportandAirwayExtensionActof2011,CongressprohibitedDOTfromprovidingEAStocommunitieswithannualper‐passengersubsidiesover$1,000,regardlessoftheirdistancefromalargeormediumhubairport.

TheFAAModernizationandReformActof2012amendedeligibilitycriteriatocommunitieswhoparticipatedintheprogrambetweenSeptember30,2010andSeptember30,2011andcommunitieswith10ormoreenplanementsperservicedayunlessitismorethan175drivingmilesfromthenearestlargeormediumhubairportorunlessthedecreaseinenplanementsistemporary.Additionally,theActwaivedtherequirementthatcarriersuseaircraftwith15ormoreseats.21

InadditiontoamendingtheeligibilitycriteriafortheEASprogram,Congressalsocreatedtwopilotprogramstoenhancetheflexibilityoftheprogram.Inthe2003Vision100‐CenturyofAviationReauthorizationAct,CongressdirectedtheDOTtodeveloptheAlternateEASprogramandtheCommunityFlexibilityPilotProgram.UnderAlternateEAS,communitiescanforgosubsidiesinexchangeforagranttospendonothertransportationoptionsincludingon‐demandairtaxiserviceoron‐demandsurfacetransportation.Atotalof5citiesareparticipatingintheAlternateEASProgram.TheCommunityFlexibilityProgramallowscommunitiestoobtainafederalgrantequaltotwicethesubsidythattheDOTpaidtotheEAScarrierinthemostrecent12‐monthperiodinexchangeforforegoingtheirsubsidizedEASfor10years.Todate,onecommunity,Visalia,California,hasparticipatedinthisprogram.Congresshasalready—andrecently—actedtoreformtheprogramtoensureconnectivitywhilemoderatingcosts.Meanwhile,EAScommunities,likeothersmallcommunities,have

21Tang,Rachel.2015.“EssentialAirService”.CongressionalResearchService.R44176.

12

beenchallengedtomaintainacceptableserviceduetothepilotshortage,yethavenomeaningfulcontroloverthereliabilityoftheairservice.WhenEASservicebecomesunreliableduetoalackofpilotsoranyotherreason,passengersandthecommunitytendnottopatronizetheservicebecauseofitsunreliability.Thishastheeffectofincreasingtheoverallprogramcosts.TheDOT,FAA,andCongressshouldtakestepstoaddressthepilotshortage,andgivethosestepsachancetowork,beforeconsideringareductioninfundingoreligiblecommunitiesfortheEASprogram.Importantly,cuttingtheEASprogrammayalsoexacerbatethepilotshortageasmanypilotsearntheirATP‐requiredhoursasfirstofficersforPart135EAScarriers.Finally,oneofthemajorlimitationsoftheEASprogramisthatitisstructuredasacontractbetweenanaircarrierandtheDepartmentofTransportationandwhilecommunitycommentisanimportantcomponentofaselectiondecision,EASdoesnotcurrentlyprovideasubstantiveroleforthecommunityorairportduringthetermofacontract.Thisisparticularlyproblematicwhenanaircarriercannotprovideanadequatelevelofservice,leavingthecommunitywithlittleornorecourse.Whenreliabilitysuffersfewerpassengersusetheservice.Theresultingerosionofenplanementsthreatensacommunity’sEASeligibility.Becausecommunitieslackameaningfulvoiceafterselectingacarrier,theybearmuchoftheriskbuthavelittlecontroloverwhathappenswiththeirservice.BygivingcommunitiesameaningfulvoiceinDOT’sselectionandmonitoringprocess,theDepartmentcanstrengthentheProgramandgrantcommunitiesgreaterinfluenceoverdecisionsrelatedtotheirairservice.SmallCommunityAirServiceDevelopmentProgram(SCASDP)isanImportantandEffective

ComplementtoEASthatWarrantsFurtherInvestment

TheSmallCommunityAirServiceDevelopmentProgram(SCASDP)beganasapilotprogramin2000,authorizedundertheWendellH.FordAviationInvestmentandReformActforthe21stCentury(AIR‐21),P.L.106‐181.Whilenofundswereappropriatedinthefirstyearofthepilotprogram’sauthorization,Congressprovided$20millionforSCASDPin2002.TheprogramwasmadepermanentintheVision100‐CenturyofAviationReauthorizationActof2003(Vision100)andhasbeenreauthorizedthroughFY2017.CongressoutlinedseveraleligibilitycriteriainSCASDP’sauthorizingstatuteincluding:

CommunitiesmustbeservedbyanairportnotlargerthanasmallhubbasedonFAA1997enplanementdata

Haveinsufficientaircarrierservice Haveunreasonablyhighairfares Aregeographicallydiverseorpresentuniquecircumstances

Inaddition,Congresslimitedthenumberofgrantsthatcanbeallocatedinonefiscalyearto40,withnomorethan4grantsawardedtothesamestate(DOTOrder2014‐6‐17).Also,Congressinsertedaprovisionthatlimitscommunitiestoonlytryingaspecificairserviceprojectonce.Forexample,ifanairportwonaSCASDPgranttoincentivizeacarriertoprovideservicetoDenver,thatcommunitycouldneverreceiveanotherSCASDPgrantfor

13

servicetoDenverregardlessiftheprojectwassuccessfulornot.Finally,Congressoutlined6statutoryprioritiesfortheallocationofgrantsincluding:

Airfaresarehigherthantheaverageairfaresforallcommunities; Localcommunitywillprovideaportionofthecostoftheactivityfromlocalsources

otherthanairportrevenue; Thecommunitywillestablishapublic‐privatepartnershiptofacilitateaircarrier

servicetothepublic; Theassistancewillprovidebenefitstoabroadsegmentofthetravellingpublic

includingbusiness,educationalinstitutions,andotherenterprises; Thegrantwillbeusedwithin3‐years; Consolidationofairportserviceintooneregionalairport.

AnimportantrestrictionoutlinedbyCongressisthatonceacommunityreceivesaSCASDPgrant,theyareprohibitedfromreceivinganothergrantwhiletheircurrentgrantisactive,oftenaperiodofthreeyears(DOTOrder2014‐6‐17).CommunitieswithEASareeligibleforSCASDPfunding,butonlytomarkettheEASservice.InadditiontothestatutoryprioritiesoutlinedbyCongress,theDOTOfficeofAviationAnalysis(OAA)hasdevelopedasetofsecondaryselectioncriteriaincluding:

Developingnewandinnovativesolutionstoairtransportationissuesfacingthecommunityincludingintermodalsolutions.

Whethertheprojecthasbroadcommunityparticipation,includingsupportfromelectedofficials.

Thegeographiclocationofthecommunityincludingconsiderationsofnearbylargecentersofairserviceandlow‐farealternativesandwhetherthecommunity’sproximitytoanexistingorpriorgrantrecipientcouldadverselyaffectthatproject.

Otherfactorsincludingtheratioofproposedfederalfundstocommunityfundsandifthecommunityhasaletterofsupportfromanairlinenetworkplanningofficeinitsapplication.22

IfcommunitiesareawardedaSCASDPgrant,theyenterintoareimbursableagreementwiththeDOTforthefederalportionoftotalairserviceprojectexpenses.Importantly,whiletheDOTallocatesfundstocommunities,therearenoguaranteesthattheywillbeused.Anewrouteintroducedbyacarriermaybesosuccessfulthatitdoesnotrequiresubsidiestoachievetheagreeduponprofitabilitymargin.Conversely,aircarriersmayviewarouteorcommunityassounprofitable,thatitwillnotenterintoanagreementfornewserviceevenwithmillionsofdollarsinrevenueguaranteesavailable.Inthiscase,theunusedfundsarereturnedtotheDOTandreusedforfuturegrantrecipients.FundingforSCASDPhasdeclinedprecipitouslyoverthepast5years,asillustratedinFigure9.Specifically,fundinghasdecreasedfromroughly$15Min2012toonly$5Min2016.Thisdecreaseinfundinghasalsolimitedthenumberofgrantsawardedtocommunities,withtheDOTawardingonly9grantsin2016.

22DOTdocketDOT‐OST‐2016‐0037,ordersolicitingSCASDproposals,March28,2016.

14

Figure9:SCASDPFundingandGrantsAwarded2002‐2016

Source:BowlingGreenStateUniversitySeveralrecentstudieshavetriedtoexaminetheeffectivenessofSCASDPinattractingandretainingairserviceinsmallcommunities.OnestudyfromMITfoundthatSCASDPgrantsweresuccessfulinlessthanhalfofthesmallsampleofcasesstudied.23EvaluatingtheeffectivenessofSCASDPgrants,particularlythoseformarketing,isdifficultbecauseofthemulti‐facetednatureofairservicedevelopmenteffortsandthemultiplefactorsthatdeterminecommunitysupportforaparticularroute.However,asthenumberofaircarriershasdecreasedduetoconsolidation(seebelow),thecompetitionbetweencommunitiesforairserviceisintense.SCASDPprovidesanimportanttoolforsmallercommunitiestoleveragefederaldollarstorallyprivateandlocalinvestmenttoattractorretainairservice.

IndustryConsolidationLeadstoFewerOptionsforSmallerCommunities

DeregulationoftheU.S.airlineindustryhasovertimeledtodramaticconsolidationofmajorcarriers.Figure10illustratesthescaleofrecentconsolidationamongmajornetworkcarriersfrom2000‐2015.Thenumberofmajoraircarriershasdecreasedfromtentosixoverthepast15years.ThefourlargestU.S.carriers(Delta,United,Southwest,andAmerican)todayprovide80%ofthedomesticservice.AlthoughtheWorkingGroupdidnotevaluatethespecificimpactsthatconsolidationhashadonservicetosmallcommunities,therewasgeneralagreementthatmajorairlineconsolidationsresultedinfeweroptionsforsmallcommunitieslookingtoattractorretainairservice.

23Wittman,Michael.2014.PublicFundingofAirportIncentives:TheEfficacyoftheSmallCommunityAirServiceDevelopmentGrant(SCASDG)Program.MIT.

15

Figure10:AirlineConsolidationintheU.S.(2000‐2015)

Source:InterVISTAS

AirlineFleetChangesLeaveSomeSmallCommunitiesBehind

Fleetchangesatmajorairlinesandtheirregionalairlinepartnershavesignificantlyimpactedairserviceinsmallcommunities.The50‐seatregionaljethasbeenaworkhorseofsmallcommunityairserviceoverthepasttwodecades.However,networkcarriersandtheirfeefordepartureregionalpartnersarereducing50‐seatfleetsduetothepilotshortage,businessrelatedreasonsandpassengerpreference:

Thepilotshortagenecessitatesairlinesuseascarceresource(pilots)toflyasmanyavailableseatmilesaspossible,whichmeanslarger,fasteraircraft. 

Airlines’desiretoup‐gaugefleetstoequipmentwithmoreseatsthatresultinlowerloadfactorsbecausetheaircraftistoolargeforthemarket,whichraisesper‐milecosts. 

Worseningcostprofileofthefleetof50‐seatregionaljetsastheyage  Passengers’preferencefordualclasscabinservices.Thisincludespassengersflying

fromsmallcommunities. 

Forthesereasons,many50‐seatjetsarebeingretiredandreplacedwithlarger76‐seatand100‐seatjets.Figure11illustratesthedrasticshiftindomesticairlinefleetsbetween2011and2016.Thenumberofdeparturesusingturbopropsand30‐50seatregionaljetshasdecreaseddrasticallywhiletheuseoflarger70‐seatregionaljetshasincreasedby83%from2011to2016.Notethatthereisnoreplacementforturbopropsorthe50‐seatregionaljetbeingdevelopedbyaircraftmanufacturersatthistime.

16

Figure11:ShiftinAirlineFleets2011‐2016

Source:Mead&HuntAscarriersupgaugetoeconomizeonuseofscarcepilots,decreaseunitcostsorforsomeotherreason,somesmallcommunitiesinevitablyareunabletosustaintheservicebecausethelargeraircraftsimplyhavetoomanyseatsfortheirsmallermarkets.Forthesmallcommunitieswheretheupgaugingdecisionsweremadeandthemarketsarestillfundamentallyviable,theupgaugingmaymeanalossinfrequencies,andthereforeconnectivity.Theimpactateachairportlargelydependsonthedemandforairtravel.BurdensomeRegulationsandInflexibleFundingMechanismsLimitAirportSelf‐Sufficiency

Regulationsandrequirementsimposedonairportshavegrownsubstantiallysince2000.Thereisaneedforregulatoryreliefandempowermentforairports.TheairportindustrygroupsoftheAmericanAssociationofAirportExecutives(AAAE)alongwiththeAirportsCouncilInternational–NorthAmerica(ACI‐NA)havedemonstratedintheirwhitepaperdatedMarch31,2017,thattheregulatoryenvironmentneedstobere‐focusedtoallowairportstobeinnovativeandentrepreneurial24.TheAirportCooperativeResearchProgram(ACRP)Report90,identified291regulatoryandcomplianceactionsimposedonairports,ofallsizes,overthepastdecade25.From2000to2010thesenewlyimposedregulationshavecostsmallcommunityairportsnearly$2billion.Theseregulationsgofarbeyond“protectingthepublicinterest”incivilaviation.TiedtotheAirportImprovementProgramgrantfundsare39grantassurances,withmultiplesubpartsandover50otherfederallaws.Thisover‐archingsetoffederallawsandobligationshavecrippledthe

24AAAEandACI‐NAWhitePaper.ReducingRegulatoryBurdensonAirports.2017.25ACRPReport90:ImpactofRegulatoryComplianceCostsonSmallAirports,2013

17

airports’abilitytobecompetitive,innovative,andentrepreneurial.DuetotheburdenoftheseregulationsthecurrentlevelofAIPandPFCfundingdoesnotmeetthefinancialneedsofcapitalimprovementprojects.TheFAAisatremendousforceforgoodwhenfocusedonsafety.TheWorkingGroup,however,recognizesthattheroleofFAAshouldbemorelimitedin1)non‐aeronauticallanduses;2)non–airfieldfacilities;3)airportcontractsandleases;and4)airserviceincentives.TheWorkingGroupconcludesthatsmallcommunityairportswouldhavemoresuccessattractingandmaintainingaircarrierserviceiftheyhadmorelatitudeinthesemattersbyenablingthemtoreducetheiroperatingcostsandbemorecompetitive.

18

Recommendations for  Maintaining and Improving Air Transportation Service  

in Small Communities Usingtheinputprovidedbystakeholdersduringtheoutreachprocessaswellastheexpertiseofitsmembers,theWorkingGroupdevelopedthefollowingsetofrecommendationstomaintainandimproveairservicetosmallcommunities.The24activemembersoftheWorkingGroupachievedconsensusontherecommendationsbelow.Toensureaninclusiveprocess,individualmemberswereabletosubmitdissentingopinionsifneeded,whicharelistedinAppendixFofthereport.Threewerereceived.AddresstheShortageofPilotsthatThreatenstheFutureofSmallCommunityAirServiceGoal:Scalableimprovementinaccesstotheairlinepilotprofessionsoaspiringaviatorscanbecomehighlycompetentprofessionalairlinepilots,whichwillinturnmeantherecanbeenoughpilotsintheUnitedStatestostaffthecockpitsthatservesmallcommunityAmerica.TheinadequatesupplyofqualifiedpilotsposesanexistentialthreattothefutureofsmallcommunityairserviceintheUnitedStates.Whilenottheonlyreasonfortoday’spilotshortage,thehoursrequirementsofthe2013“PilotCertificationandQualificationRequirementsforAirCarrierOperations”(“FOQRule”)isamajorcontributor.However,thepremiseofthehoursrequirementspartofFOQwasatleastpartiallyincorrect:

Regionalairlinenewhirefirstofficertraining“completionsdecreasedfrom93.4%inthePre‐Lawdatasetto83.6%inthePost‐Lawdataset,andthePost‐Lawpilotsrequiredsignificantlymoreextratraining”(emphasisintheoriginal).26

AccordingtothePilotSourceStudy2010airlinenew‐hirefirstofficerswith501‐1000hoursrequiredfewerextratrainingeventsandtrainingnon‐completionsthananyotherhours‐accumulationcategory,includingthosewithover1,500flighthours.Thisistosay,thebestairlinefirstofficertraineeshadbetween501and1,000flighthours—notmorethan1,500hours.

Data‐drivenacademicresearchhasproventhatqualityandstructureoftraininginapilot’sbackground,ratherthanasetnumberofhours,iscorrelatedwithpilotproficiency.27

o OtherpilotcareertracksworkwithoutthehoursrequirementsofFOQ.o NotethattheUSNavyhaspilotslandingonaircraftcarriersatjustseveral

hundredhours,flying: Multi‐milliondollar,supersonicaircraft Combat

26Bjerke,Elizabeth,etal.2016.PilotSourceStudy2015:USRegionalAirlinePilotHiringBackgroundCharacteristicChangesConsequenttoPublicLaw111‐216andtheFAAFirstOfficerQualificationsRule.JournalofAviationTechnologyandEngineering.5:2:3‐14.27Shane,Nancy.TheRelationshipOfAPilot’sEducationalBackground,AeronauticalExperienceAndRecencyOfExperienceToPerformanceInInitialTrainingAtARegionalAirline.Ph.D.Dissertation.

19

Armedwithweapons Solo

o Foreignairlineshireandtrainfirstofficerswithasfewas250hours,includingthosepresentlyflyingtotheU.S.ThesecarriersrecruitAmericanpilotsandfurtherdepletetheU.S.pilotsupply.

o America’sownhistorybetweenWorldWarIIand2013,68yearsduringwhichfirstofficerscouldservebasedontheircommercialpilot’slicensewithouttherequirementsofanATPcertificate.

Theimportantrequirementforfirstofficersshouldbecompetencyasmeasuredbyqualityoftrainingandtesting,notsimplytheamountofflighthourslogged.

ThehoursrequirementsofFOQhashadnumerousadverseimpacts:

Severelyconstrictedandmassivelyelongatedthepilottrainingpipeline,constrainingaccesstotheproudprofessionofcommercialairlinepilot.

ReductionoroutrightlossofairserviceatsmallercommunitiesacrossAmericaduetolackofpilots;Manycommunitiesnotyetaffectedarethreatened.

Aircraftmanufacturersarereluctanttobeginnewdevelopmentprogramsforaircraftsuitableforsmallcommunityairservicebecauseofuncertaintytherewillbepilotstoflythem,andbyextensionairlineswillingtofinancetheaircraftacquisitioncost.

USairlinesareatacompetitivedisadvantagewhencomparedtoforeignairlinesonthesameinternationalroutes;theforeigncarrierdoesnotrequireitsfirstofficertohaveanATP.

FOQ’sprerequisiteformassivelyincreasedflighthoursaccumulationbeforebecominganairlinepilotperverselymandatesthatmoreofanaspiringaviator’sformationhappenoutsideaprofessionalairlineenvironment(orevenoutsideofastructuredtrainingenvironment).ThisisexactlytheoppositeofwhatFOQintended.TheATPwasinitiallyrequiredofcommercialairlinepilotsupgradingtoPilotinCommand(Captain).Underthisscenario,apilotwouldhavegainedthisexperienceintheprofessionalcockpit.Whenthisrequirementismovedtocareeroutset,theoptionsforamassingthesehoursaresharplylimited.Norequirementforthequalityofthosehoursisincludedintheregulation,norcanbereasonablymet,sinceopportunitiesforpilotprofessionaldevelopmentthroughflyingareexceedinglyscarceinthepre‐hireenvironment.

Unstructuredtrainingbydefinitionhasnosystematicchecksagainstdevelopmentofbadhabitsandunprofessionalbehaviorduringthenewlymandatedhoursaccumulation.

Rawaccumulationofhoursinlighttrainingaircraftmaynotdevelopcockpitresourcemanagementskills,whichareinvaluableforanairlinepilot.

Therefore,theWorkingGroupmakesthefollowingrecommendations.Recommendation#1:CongressshoulddirecttheFAAtouseitsexistingauthoritytoreevaluateandincreasetheamountofhoursofcreditawardedtoacademicpathwaysforthe

20

issuanceofaRestrictedATP.CongressshouldaffirmtoFAAthat“academic”trainingisnotlimitedtomilitaryandaviationdegreeprograms.Thisrecommendationissupportedbydatapublishedinthe2010PilotSourceStudythatindicatesbestairlinenewhirefirstofficertrainingandtestingperformanceinthe501‐1000hourrange.Thisrecommendationisscalable,maintainssafety,andpromotesanaffordablepathwaytobecominganairlinepilotinAmerica.

Recommendation#2:CongressshoulddirecttheFAAtoawardsubstantialhoursofcredittowardacarrier‐specificandtype‐specificRestrictedATPforfirstofficersbasedoncarrier‐specificandaircraft‐type‐specifictrainingandtesting.Thecarrierandtype‐specifictrainingandtestingshouldbepartoftheairline’sFAAapprovedtrainingprogram.CongressshouldaffirmtoFAAthat“academic”trainingshouldnotbelimitedtomilitaryandaviationdegreeprograms.TheWorkingGroupintendsthisrecommendationtofundamentallyre‐openthepathwayforaspiringcommercialpilotstobecomecompetent,safefirstofficersinAmericaandtherebybegintheirairlinepilotcareer.Thepurposeofaffordingthiscredittowardtotalflighthoursrecognizesthatacademicandothertrainingcoursesofferedbycolleges,certificatedaircarriers,andotherqualifiedprovidersnotlimitedtotheaforementioned,willprovidemeaningfulenhancementstosafety.Thisrecommendationissupportedbyempiricaldata.Inadditiontothedatadiscussedabove,whichdemonstratesairlinenewhirefirstofficertrainingandtestingperformancetobebestatbetween501‐1000hours,the2015PilotSourceStudyshowsthatpilotscomingthroughstructured,continuoustrainingprograms,withoutinterruption,progressthroughregionalairlinetrainingmoresuccessfullythantheircounterparts.Recommendation#3:DeveloplegislationtoincreasetheborrowinglimitsforbothsubsidizedandunsubsidizedloansfortheFederalStudentLoanprogramforstudentspursingATPs/r‐ATPs;createastudentloanforgivenessprogramforstudentspursuingATPs/r‐ATPs;andexpandGIBillreimbursementforveteranspursingflighttraining.Thisrecommendationisdesignedtomakeacareerasapilotamoreattractiveandaffordableoptionforfuturegenerationsbyprovidingadditionaloptionsforstudentstofinancethecostofobtainingabachelor’sdegreewiththeappropriateflighttrainingleadingtoanATP/r‐ATP(oftenover$150,000).Specifically,thisrecommendationwouldincreaseboththelifetimecap(currentlycappedat$57,500forindependentundergraduatestudents)andthemaximumsubsidizedloancap(currently$23,000forindependentundergraduatestudents).TheWorkingGrouprecommendsincreasingthesecapstothecurrentlimitsforprofessionaldegrees,whichare$138,000and$65,500respectively,andindexingthemtoinflation.Also,theworkinggrouprecommendsCongressallowgraduatespursinganATP/r‐ATPbyservingasaflightinstructoraspartofacareerpipelineprogramtodeferstudentloanpaymentsuntiltheyarehiredbyaPart121orPart135carrier.Additionally,theWorking

21

GrouprecommendsthatCongresscreateaprogram(s)similartothePublicSectorForgivenessProgram(PSLF),TeacherLoanForgiveness,orPerkinsLoanCancellationforTeacherswheregraduateswhoworkforaPart121orPart135certificatedaircarrierasanairlinepilotforatotalof5yearswouldhavetheremainingbalanceoftheirstudentloansforgiveniftheymake60consecutiveon‐timepayments.EssentialAirService(EAS)istheBackboneofSmallCommunityAirServiceandMustBeFully

FundedandOptimized

TheWorkingGroupconcludesthattheEASprogramisthebackboneofsmallcommunityairserviceintheUnitedStatesandmustbemaintainedandoptimized.ItisvitalthatCongressenhancesandfullyfundstheEASprogram.ManyoftheperceivedinefficienciesintheEASprogramaresymptomsoflargerissues,especiallytheshortageofqualifiedpilots.Therefore,theDOT,FAA,andCongressshouldtakeurgentstepstoaddressthepilotshortagetoimprovetheEASprogram.Additionally,theWorkingGroupconcludesmanyoftheeligibilityrequirementsontheEASprogramareoverlyrestrictive,preventcommunitieswithlegitimateairserviceneedsfromaccessingairservice,anddonottakeintoaccounttheseasonalityofserviceinmanycommunities.Finally,theWorkingGroupbelievesitisessentialtoenhancethedecision‐makingroleforcommunitiesintheEASprogram.Recommendation#1:FullyandpredictablyfundEAS,thebackboneofsupportforsmallcommunityairserviceinAmerica,whileencouragingtheSecretaryofTransportationtoreviewandenforceexistingstatutoryrequirementstoimprovetheoverallefficiencyoftheprogram.TheDOT,FAA,andCongressshouldtakestepstoaddressthepilotshortage,andgivethosestepsachancetoworkbeforemakingwholesalechangestotheEASprogram.Recommendation#2:DirecttheSecretaryofTransportationtodevelopandimplementanEASCommunityBillofRightsthatempowersthechiefelectedofficialofeachEAScommunitytolodgewithDOTa“voteofnoconfidence”ifthecommunityhassubstantiateddataindicatingunacceptableoperationalperformance.AvoteofnoconfidencewouldrequiretheDOTwithin2monthstoreviewtheoperationalperformanceoftheEASserviceinquestion.IfDOTdeterminesthattheoperationalperformanceoftheEASserviceinquestionisinadequate,DOTmayterminatethecontractandrebidtheservice.Recommendation#3:FollowingthecreationoftheBillofRightsoutlinedabove,directtheSecretarytoselecta“fresh”startdatefortheenforcementofallterminationorders.ThendirecttheSecretarytoenforceexistingprogramcriteriawhereitmayimprovetheoverallhealthandaccountabilityoftheEASProgram.

Recommendation#4:AllowairportseligibleforEASbeforethe2012eligibilityrequirementchange,toparticipateinanAlternativeEASProgramwherebythecommunitiesarevestedthroughalocal/statematchoffunding.ThisrecommendationsisintendedtohelpmarketsthatexitedthesubsidizedEASprogrampriorto2012onthemeritsofeconomicallyself‐sustainingservicebutthatsubsequentlylostallunsubsidizedserviceafter2013.

22

Recommendation#5:CongressshouldrequesttheDOTtoconveneaseparateworkinggrouptoreviewthelistofeligibleEASMarkets.Congressshouldupdateoriginalcommunityorderdeterminationsthatspecifylevelsofservicetoincludeaminimumservicedefinitiontoaccountfordayofweekandseasonalitybyupdatingservicegoalstoatotalnumberofdepartures/seatsinayear.SmallCommunityAirServiceDevelopmentProgram(SCASDP)isanImportantandEffective

ComplementtoEASthatWarrantsFurtherInvestment

TheWorkingGroupconcludesthatSCASDPisimportantinensuringairserviceinsmallcommunitiesandwarrantsfurtherinvestmentbyCongress.Additionally,theWorkingGroupconcludesmanyoftheprogrammaticrestrictionsimposedbyCongressaroundSCASDP,includingthestaticindexingto1997enplanementlevelsandtheprohibitiononreceivingagrantforthesameproject,areoverlyprescriptiveandmaylimitthesuccessoftheprogram.Finally,theWorkingGroupsuggestsFAAandDOTrevisittherestrictionsonairportofficialscollaboratingwithordirectingcommunityairservicedevelopmentefforts.Recommendation#1:RestoretheauthorizationforSmallCommunityAirServiceDevelopmentProgramto2002levels($20M),plusadditionaldedicatedfundsforprogramadministrationtoallowtheprogramtooperatewitharegularandpredictableannualfundingschedule.TheWorkingGrouprecommendsCongressinvest$20MannuallyinSCASDPtoenhancethenumberofcommunitiesthatcanaccessfundstosupplementtheircommunityairservicedevelopmentefforts.SCASDPreceivesmanymoreapplicationsfromsmallcommunitiesthanitcanfundgivenits$5Mappropriationreceivedinrecentyears.TheWorkingGroupalsorecommendsCongressgrantDOTanadditionalappropriationtoinvestinprogramadministrationtoassistintheadministrationandevaluationofSCASDPtobettertargetfuturegrants.Recommendation#2:Revise49U.S.C.41743(c)tocreatetwoseparatecompetitionsforapplicants(small‐hubsontheonehandandnon‐hubsorsmallerontheother)toensurethesmallestcommunitieshaveafairchanceatbeingselectedforagrant.TheWorkingGroupproposesCongresscreatetwoapplicantpoolswithinSCASDPtoallowfundstobedirectedtowardscommunitieswiththemostpressingairserviceneeds.Specifically,theWorkingGroupsuggestsCongresscreatessmall‐hubandnon‐hubandsmallerclassificationswithinSCASDP.Thespecificallocationoffundsamongthesmall‐hubsandnon‐hubsandsmallerwouldbeatthediscretionoftheDOTbasedonthenumberofapplicationsreceivedineachclassification.Recommendation#3:Revise49U.S.C.41743(c)toallowcommunitiestoapplyforSCASDPfundingforthesameprojectif3yearshavepassedsincetheprojectwasawardedorclosedout.

23

AmajorlimitationofSCASDPisthatonceacommunityhasreceivedanawardtopursueairservicetoaparticulardestination,itisineligibletoapplyforservicetothatsamecityinfutureyears.ThisisproblematicforsmallercommunitiesthathavelostserviceonpreviouslysuccessfulSCASDP‐supportedroutesduetofactorsoutsidetheircontrolsuchasthepilotshortage,consolidation,fleetchanges,etc.TheWorkingGrouprecommendsCongressrevisethestatutorylanguagetoallowcommunitiestoapplyforaSCASDPgranttosupportservicetoapreviouslyawardeddestinationifthatservicenolongerexistsorif3‐yearshaveelapsedsincetheinitialprojectawardorprojectcloseout.Recommendation#4:DirecttheFAAandDOTtouseexistingauthoritytoremovetheprohibitionintheFAA’sRevenueUsePolicyagainstsmallcommunityairportsponsors’staffparticipatingin,organizingandcoordinatingcommunityairserviceincentiveinitiatives.TheFAARevenueUsePolicyprohibitsairportofficialsfromcoordinatingandbeingdirectlyinvolvedincommunityfundedairservicedevelopmentefforts.Specifically,manyChambersofCommerce,EconomicDevelopmentCorporations(EDC),ConventionandVisitorBureaus(CVB),andlocalbusinessesoftenworktogethertodevelopfundsforminimumrevenueguarantees,marketingfunding,andstart‐upcostoffsetstoreducetherisktocarrierstostartairservice.UndertheFAA’sRevenueUsePolicy,airportmanagers,whooftenhavespecificexpertisetoinformthesecommunityefforts,areprohibitedfromconsultingwithorhelpingtocoordinatetheseefforts.TheWorkingGroupconcludesallowingtheairportstafftoassistdirectlyincommunityairserviceeffortscouldimprovetheeffectivenessoftheseefforts.IncentivizeAircraftManufacturestoProduceAircrafttoServeSmallerCommunitiesTheWorkingGroupconcludesthatCongressshouldtakeactiontoincentivizeaircraftmanufacturerstoproduceaircraftthatareright‐sizedtoservesmallcommunities.Becauseoftheseverityofthepilotshortage,producingaircraftthatservesmallcommunitiesisviewedbymanufacturersasariskyinvestment.Recommendation#1:Congressshouldpasslegislationtocreatefederaltaxincentives(orR&Dfunding)tospuraircraftmanufacturerstoproduce9to50seatairlinersdesignedfortheneedsofconnectingsmall‐communityAmericatothenationalairtransportationsystem.Airlinesbalancethreekeyinputs:traveldemand,pilotsandaircraft.TherearefewifanyaircraftcurrentlyinproductionthatwouldbeoptimalforsmallcommunityairserviceinAmerica.TheBeech1900,oncethebackboneoftheEASprogram,wentoutofproductionin2001.Inthe30‐seatclass,theDash8‐100,EMB‐120andSaab340allwentoutofproductionbetween2001and2003.Asaresult,eachdaythe19‐30seatfleetages,itbecomesincreasinglymoreexpensivetomaintain,whileapproachingservicelifelimits.Therearenoairframeprogramsonthehorizontofillthe19‐30‐seataircraftgap.Tomaintainairtransportationservicetosmallcommunitiesthefleetofregionalaircraftneedstoberecapitalized.Newregionalairlinersofbetween9and50seatswillbeneededtomatchsmallermarkets’demand,whilemaintainingfrequency.Progressonresolvingthe

24

nationwidepilotshortage,pertherecommendationsabove,willalsoimprovemanufacturers’viewofthe9‐50seatmarket.ProvideAirportswithRegulatoryFlexibilitytoBetterManageInfrastructureInvestmentsRecommendation#1:DirecttheSecretaryofTransportationtoprohibittheFAAandotherfederallyauthorizedentitiesfromplacingunfundedsafetyorsecuritymandatesuponpublicuseairports.Anynewregulationsandrequirementsmustbeaccompaniedbyfundingorawaiverprocess.Throughthemodernera,federal,state,andlocalgovernmentshavecontinuallyincreasedregulatoryrequirementsatU.S.airports.Meetingthemhasraisedcosts.Thisisagrowingconcernforsmallhubandnon‐hubairportsthathavelimitedstaffandfinancialresourceswithwhichtofulfilltheircomplianceresponsibilities.Formanysmallhubandnon‐hubairports,lowerpassengerenplanementslimittheirabilitytoraiserevenueorcutcostssignificantlytomakeupforthecostsofincreasedrequirements.Withbudgetsalreadystretchedbyoperatingcostsandcapitalexpenditures,manysmallhubandnon‐hubairportsarestrugglingtoabsorbcompliancecostsassociatedwiththecumulativerequirements.Whilegovernmentagenciesprovidesomefundingfornewregulatoryinitiatives,manycostsattributedtoongoingcomplianceremainunfunded.From2000throughtheendof2010atotalof291regulatoryandcomplianceactionsrelatedtoFAA/DOT,environmental,security,andoccupationalsafetyandhealthrequirementswereissued.Putanotherway,thefederalagenciesadoptednewrequirementsatarateequivalenttoonerequirementevery2weeksduringthestudyperiod.Manynewrequirements,whilewellintentioned,addongoingcoststoairportsbyspecifyingperiodicupdates,inspections,andmonitoring.Figure12:SummaryofComplianceCostsforSmallAirports

Source:ACRPReport90.

25

Recommendation#2:AllowU.S.AirportstheabilitytosimplifyNationalEnvironmentalPolicyAct(NEPA)requirementswithrespecttoaprojectaslongastherelevantairportmeetstheenvironmentalrequirementsofthestategovernment.Thiswouldapplyonlytoprojectsthatwouldgeneratenon‐aeronauticalrevenuefortheairport.InmanycasestheFAAcanmakethecategoricalexclusion(CATEX)determinationwithouttheairport’sparticipationresultingintensofthousandsofdollarssaved,fundswhichinsteadcanbeusedforthestructuralcomponentsoftheprojectsrequiringstudy.Presently,forsmallcommunitiesandtheirairportsasignificantamountofairportfundsaccompaniedbyAIPgrantsgotowardshiringaconsultanttocompleteresearchandapplicationrequirements.ThesefundscouldbebetterutilizedatsmallairportsinbrickandmortarratherthanthecostsandoverheadofconsultantworktosatisfyNEPArequirements.ProposedprojectsqualifyingforanEnvironmentalImpactStatement(EIS)aregenerallylimitedatsmallairportsprimarilybasedonthelevelofoperationsandneedforneworupdatedfacilities.ThehigherpercentageofairportsparticipatinginEnvironmentalAssessments(EAs)ratherthanparticipatinginCATEXsisnotconsistentwiththeoverwhelminglyhighpercentageofFAAactionsaffectingairportsqualifyingforaCATEX.Themostlikelyexplanationisthatinmanycases,theFAAcanmaketheCATEXdeterminationwithouttheairport’sparticipation,thusfreeingupAIPfundsfortheactualproject.

ImprovetheAirportImprovementProgram(AIP)byImprovingFlexibilityforSmallerCommunities

Recommendation#1:ForAIPfunding,allowapro‐ratafundingmodelthatsupportmarketsonaperpassengerratioforairportswithcommercialairserviceortobestructuredforsmallandnon‐primaryairportsbaseduponaweightedquarterlyaverageofpassengers’useoftheterminalbuilding.Manysmallairportshavestrongseasonalityintheirpassengerenplanementnumberswhichmakesitdifficultforentitlementfundingcategorization.Therefore,smallcommunitieswithunusualseasonalityshouldbeallowedtohavetheirenplanementdataconsideredbasedontheirstrongestquarter,notnecessarilyanannualaverage.Recommendation#2:Allowairportoperationalfundingunderanew,grantbased,programseparatefromCapitalexpendituresorairservicedevelopment.Non‐primary,commercialserviceairportshaveincreasedfinancialoperatingburdensduetocompliancewithFARPart139.Adheringtotheregulationspertainingtosnowremoval,firefighting,lawenforcement,wildlifehazards,safetymanagementsystemsandsecurityitemshaveplacedastrainonsmallairportoperatingbudgets.Anew,separategrantprogramshouldbeestablishedfortheseairportstodrawupon,tonotbedependentontheirjurisdictionorsponsor.

26

Recommendation#3:ChangetheAIPfundingscaletoalinearscalefrom2,500enplanementsto10,000,toeliminatethefundingcliffat10,000enplanements,whichascurrentlyconstructedincreasesAIPentitlementfrom$150,000peryearto$1,000,000basedonjusta10,000thpassengerenplanementinacalendaryear.Thisrecommendationeliminatesasignificantandseeminglyarbitraryfundingcliffforsmallerairports.Airportsthatenplane9,999passengersinayearhavenearlyidenticalcostsasonethatenplanes10,000,yettheAIPfundingincreasesby6.66timesat10,000enplanements.Thisfundingcliffcreatesundulypowerfulandpotentiallyunhealthyincentivesforcommunitiestohit10,000passengers.Recommendation#4:Non‐hubandnon‐primaryairportAIPlocalmatchshouldbereducedfrom10%to5%.Duetotheoveralllimitedbudgetsatsmallairports,theWorkingGrouprecommendsthatallAIP‐eligibleprojectsbefundedatthe95%levelbytheFAA.Recommendation#5:TheSecretaryofTransportationshoulddirecttheFAAtobemoreflexibleallowingtheFAAtoutilizearevieworwaiverprocessforsafetyoroperationalissuesorequipmentspecifictoairportsoperationsthatmaynotbeAIPeligible.Manysmallairportshavefacedsignificanthurdlesinprocuringequipmentfortheirairportoperations.Congressshouldallowlocalflexibilitywhenpurchasingdecisionsaremadeforpurchasesofequipment,suchasbutnotlimitedtoAWOS,onnon‐primarycommercialserviceairports.

ConsidertheImpactofLargerAviationFundingInitiativesonSmallerCommunities

Recommendation#1:RecommendtheSecretaryconsidertheimpactonsmallairportsofanuncappedPFCFeeonconnectingpassengers,particularlythosewhoaremakingmorethanonedomesticconnection(e.g.morethantwoconnections)fromsmallcommunities.IfCongressincreasesthePFCcap,theWorkingGrouprecommendsmaintainingacapfortransferringpassengersfromsmallhub,non‐hub,ornon‐primaryairportstravelingthroughlargeandmediumhubairports.TheWorkingGrouprecommendsaconsiderationofacaponPassengerFacilityCharges(PFCs)atconnectingairportsfortransferpassengersfromasmallhubornon‐primaryairport.Local,originanddestination(O&D),PFCsarereasonable,approved,andusedlocallybyairportstobuildandupgraderunways,terminalsandotherfacilities.Furthermore,PFCsprovideapathformanyairportstoreducetheirneedsforAirportImprovementProgramfundsbyparticipatinginthelocallyfundedPFCprogram.However,totalcustomerchargesatnon‐hubandsmallhubairportscouldbenegativelyimpactedbyanunlimitedPFCattransferringairportswheretheassociatedchargesarenotcontrolledbythelocalairport.Thetotalcustomercharges(parking,ticketprices,baggagefees,PFCsetc.)atnon‐hubandsmallhubairportsareasignificantfactorwhencustomersmaketheirdecisionstoflyfromthelocalairportordrive. 

27

Examples of Public Private Partnerships Successful in Attracting and Retaining Air Service in Small Communities 

Section2303directedtheWorkingGrouptoidentifyinnovativeStateorlocaleffortsthathaveestablishedpublic‐privatepartnershipsthataresuccessfulinattractingandretainingairtransportationserviceinsmallcommunities.Fortunately,thereareaplethoraofexistingresourcesthatdocumentsuccessfulexamplesofpublicprivatepartnershipsandbestpracticesinairservicedevelopmentinsmallcommunities.TheWorkingGroupreferencesthefollowingreportsproducedaspartoftheAirportCooperativeResearchProgram(ACRP):

ACRPReport142:EffectsofAirlineIndustryChangesonSmallandNon‐HubAirports

ACRPSynthesis68:StrategiesforMaintainingAirService ACRPReport18:PassengerAirServiceDevelopmentTechniques

TheWorkingGroupusedthesereportsandexamplesfrommemberstolistsuccessfulpublicprivatepartnerships.Thislistisillustrative,notexhaustive.HectorInternationalAirport,Fargo,NDHectorInternationalAirport(FAR)isasmall‐hubairportinFargo,NDthathasbeensuccessfulingrowingitsairserviceoverthepastdecade.FAR’sairservicedevelopmentstrategyhasfocusedoncollaborationandcoordination,amongtheairport,theeconomicdevelopmentcorporation(EDC),theConventionandVisitorsBureau(CVB)andtheChamberofCommerce.TheEDC,CVB,Chamber,andairportshareboardmembers,whichhelpstofostereffectivecommunicationregardingASDefforts.TheEDCandCVBhavealsocontributedfundsasmatchforSCASDPgrantsforsuccessfulairservicedevelopmentefforts.Theairportmanagerandtheairport’sconsultantroutinelytraveltolocalChamberandserviceorganizationmeetingstoeducateandupdatethecommunityonairserviceefforts.CharlesSchultzAirport,Sonoma,CACharlesSchultzAirport(STS)isanon‐hubairportinSantaRosa,CAthathasbeenasuccessstoryincommunityinvolvementandairservicedevelopment.In2002,theSonomaCountyBoardofSupervisorscreatedtheAirlineAttractionCommittee(AAC)tolureservicetoSTS,whichatthetimedidnothavescheduledcommercialservice.TheAACiscomprisedofrepresentativesfromtheBoardofSupervisors,localbusinesses,theSonomaCountyTourismBureau,andtheSantaRosaChamberofCommerce.Inlate2004,theAACleveraged$500,000intravelbankcommitmentsfromlocalbusinessestosecurea$635,000SCASDPgrantthatledAlaskaAirlinestoannouncein2006itssubsidiaryHorizonAirwouldbeginservicetoLosAngeles(LAX)andSeattle(SEA).In2017,STSannouncedadditionalserviceonUnitedAirlinestoSanFrancisco(SFO)andAmericanAirlinestoPhoenix(PHX).

28

BozemanYellowstoneInternationalAirport,Bozeman,MTAirServiceDevelopmentatBozemanYellowstoneInt’lAirport(BZN)includespartnershipsbetweenBigSkyAreaSkiResorts,theYellowstoneClubandtheBozemanChamberofCommerceutilizingadetailedplanofattractingservicetonewdestinationsandadditionalairlines.Thefocusofthegroupistomitigaterisk(throughshorttermrevenueguarantees),waivedlandingfeesand/orcomprehensivemarketingprogramsthatincludeadvertisinginvestmentsbystate,regionalandlocaltourismentitiestoencouragenewserviceinitiallyonaseasonalbasisandthenorganicallygrowtheservicetoyearround(whenpossible).Overthepastdecade,BZNhasincreasedpassengerenplanementsfrom317,000toover554,000,non‐stopdestinationsfromseventofifteenandyear‐rounddestinationsfromfourtoeight.Onlytwoofthenewdestinationshaverequiredminimumrevenueguarantees(inconjunctionwithSCADSPgrants)toobtainservice(Newark,Dallas/Ft.Worth)andonlyoneofthosetodatehasactuallyhadtoexpendanyfunds(Newark).Newarkhasbeenself‐sustainingforseveralyearsandalsogeneratedinterestbyUnitedinservingHouston(successfulandwithoutguarantees)andbyDeltatoserveNewYorkLaGuardia(alsosuccessfulandwithoutguarantees).WyomingAirServiceEnhancementProgramIn2003,theWyomingStateLegislaturefoundthat“anadequateandcomprehensivesystemofairserviceinWyomingisvitalforeconomicdevelopmentwithinWyoming”,andpassedSenateFile120appropriatingmoneytotheWyomingAirServiceEnhancementProgram(ASEP).Today,theASEPisoneofthefewstateenabledprogramsfocusedonenhancingcommercialairservice.SincetheASEP’sinception,allofWyoming’scommunitieswithcommercialairportshaveparticipatedintheprogramwithover$29millionbeinggrantedinMinimumRevenueGuarantees(MRG)andmarketingsupporttodate.TheASEPprovidesacompetitiveadvantagetoWyoming’scommercialairports;inthepastthree(3)years,amidtheissuesfacingsmallcommunitiesinattractingandsustainingairservice,theASEPhasbeenabletohelpWyomingairportsmitigatesomeofthesethreatsthroughfundingassistance.Additionally,theASEPhasassistedseveralotherWyomingairportstogrowandexpandtheirairservice.EASatPittsburghInternationalAirportPittsburgh’sregionalairserviceportfoliohasgrowndramaticallyinthelastseveralyears.Pittsburgh,Pennsylvania’ssecondlargestcity,isnowconnectedtosmallercommunitiesinPennsylvania,NewYork,WestVirginiaandMarylandwithhighfrequencyairservice.TheseroutesprovideanefficientmeansoftraveltoandfromPittsburghforbusiness,especiallyforthemanyenergyandnaturalgascompaniesthatoperatewithintheregionandmaintainregionalofficesinPittsburgh.Additionally,residentsofthesecommunitiescanseamlesslyconnectthroughPittsburghtoover65nonstopdestinationson16carriers.Throughapublic‐privatepartnership,SouthernAirwaysExpresshasquicklyexpandedtotenmarkets,includingtheresumptionofservicetoHarrisburg,Pennsylvania’sstatecapitol,afternearlyadecadewithoutnonstopflights.ThroughtheDepartmentofTransportation’sEssentialAirService(EAS)program,Southernisgivenasubsidyinordertoprofitablyoperatethisservice,withtheexceptionofHarrisburgwhichisflownat‐riskwithnofederalsubsidy.FederalfundsfortheEASprogramaregeneratedinpartfromthecollectionofoverflightfeesofforeignaircraftthroughU.S.airspace.Tomaximize

29

awarenessanduseofthisservice,theCommonwealthofPennsylvaniaandtheAlleghenyCountyAirportAuthority,operatorofPittsburghInternationalAirport,haveprovidedfundsthatsupplementmarketingeffortsbySouthernAirwaysExpressprimarilyinthesmallercommunities.Additionally,thePittsburghInternationalAirport,SouthernAirways,andtheregionalmarketsservingPittsburghholdquarterlymeetingstoexchangemarketingideas,discusswaystoimprovetheservice,andtoensureacollectivestrategytomaximizeenplanements.Thepartnershipprogramisgrowing,withover30,000passengerscarriedonSouthernAirwaysthroughPittsburghin2016.

30

Appendix A: Summary of Outreach Efforts 

Section2303ofP.L.114‐190directedtheworkinggrouptoconsultwiththefollowinggroups:

Interestedgovernors RepresentativesofStateandlocalagencies,andotherofficialsandgroups,

representingruralStatesandotherruralareas; OtherrepresentativesofrelevantStateandlocalagencies;and Membersofthepublicwithexperienceinaviationsafety,pilottraining,economic

development,andrelatedissues.Additionally,thestatutedirectstheWorkingGrouptoincludeasummaryoftheviewsexpressedbytheparticipantsintheoutreacheffortinthefinalreporttotheSecretaryofTransportation.Theworkinggroupusedthelanguageofthestatutetoformulateanonlinesurveyinordertoreachalargeraudienceandengageabroaderconversationaboutairserviceandsmallcommunities.Qualtrics™onlinesurveysoftwarewasutilizedunderthesitelicenseoftheUniversityofNorthDakota(UND).MontanaTransportationDirector,MichaelTooleyforwardedthesurveytotheNationalAssociationofStateAviationOfficials(NASAO)asameansofincreasedoutreachwiththeirmembership.Onehundredandtwo(102)uniqueresponseswerereceivedinatwo‐weekperiod.Theseopen‐ended(qualitative)responseswerethendividedintothemesorcategoriesusedfordiscussionbytheworkinggroupmembersattheirmeetings.Thebreakdownofrespondentswasprimarilyairportoperators(55%),governmentagencies(19%),airlines(17%),consumers(5%)andconsultants(5%).Theresponsesreportedbelowcharacterizetherawfeedbackreceivedfromthesurveyrespondents,anddoesnotalwaysreflecttheconsensusandrecommendationsoftheWorkingGroup.Question1askedtherespondentstoidentify2‐3currentobstaclestoattractingandmaintainingairtransportationtosmallcommunities.Thetwomaincategoriesarecategorizedas:a)issueswithaircarriers,andb)financialobstaclesfortheairport.

a) Issueswithaircarrierserviceinsmallcommunities: Availabilityofqualifiedpilotsforhirebytheregionalairlines; Impositionofthe2013FirstOfficerQualification(FOQ)rulesforFARPart135

andFARPart121aircarrieroperations; Reasonableandreliableaircarrierserviceforsmallcommunities; Right‐sizedaircraft(19‐40seats);theregionaljetisnotappropriatelysizedfor

allmarkets; GenerallackofqualifiedemployeesforTSAandairlinestaffingatthesmall

communities; Generallackofinterlineagreementsforbaggagetransferandthroughticketing

forsmallaircarriers;

31

Airlineconsolidationhasledtoclosureofmultiplesmallhubsthatwerecriticaltosmallcommunities;examplesbeingMemphis,Cleveland,andCincinnati.

b) Financialbarriersforairportsservingsmallcommunities(EASandnonEAS)withairservice: Theoverallavailabilityofappropriateairnavigation(approaches)andweather

equipment(ASOS/AWOS); Runwaylengthsrequiredforregionaljetservice; CostofmaintainingFARPart139airportcompliancecertificate(AircraftRescue

FireFightingequipment,SnowRemovalEquipmentandstaffing,LawEnforcementOfficerrequirements);

TheEntitlementfundinggapsthatexistwithinAirportImprovementProgram(AIP)fundstiedtotheNationalPlanofIntegratedAirportsSystemairportcategorizations.

o GeneralAviation(noairservice)=$150,000o CommercialServiceAirports(2500‐9999passengers)=$150,000o PrimaryNonHubAirports(10,000+passengers)=$1,000,000+

TheEssentialAirService(EAS)programisnottiedtoinflation—ConsumerPriceIndex.

Question2askedthe102respondentstoshare2‐3recommendationsformaintainingandimprovingairtransportationtosmallcommunities.Thegeneralthemethatemergedintheseanswerscenteredonregulatoryissues,andcanbesubdividedbetweenaircarrierandairportregulations.

a) AirCarrierRegulations: ReviseorcreatealternativepathwaystothecurrentAirTransport

Pilot/Restricted‐ATPrequirements; Encourageorincentivizeaircraftmanufacturerstoproduce19‐49seat

aircrafttoallowairlinestorightsizetheaircraftforthemarket; EncourageinterlineagreementsforEAScarriers; FundastrongEASprogram,whichfunctionstosomedegreeasapipelinefor

pilotsenteringtheairlinecareerpath.b) AirportRegulations:

ReviseNPIAScategoriesand/ortheAIPfundingcategories.CommercialserviceairportscurrentlyreceivethesamefundinglevelasGAairports,yethavetocertifyunderFARPart139whichcanbeafinancialburdenformanysmallairports;

IncreasefrequencyofEssentialAirServiceminimumflightsto3perday,aninflectionpointforpassengerconvenience

ReviewtheSmallCommunityAirServiceDevelopmentProgram(SCASDP)guidanceandincreasethefunding

32

Appendix B: Section 2303 of P.L. 114‐190 

SEC.2303Workinggrouponimprovingairservicetosmallcommunities(a)Ingeneral.—Notlaterthan120daysafterthedateofenactmentofthisAct,theSecretaryofTransportationshallestablishaworkinggroup—

(1)toidentifyobstaclestoattractingandmaintainingairtransportationservicetoandfromsmallcommunities;and(2)todeveloprecommendationsformaintainingandimprovingairtransportationservicetoandfromsmallcommunities.

(b)Outreach.—Incarryingoutsubsection(a),theworkinggroupshallconsultwith—(1)interestedGovernors;(2)representativesofStateandlocalagencies,andotherofficialsandgroups,representingruralStatesandotherruralareas;(3)otherrepresentativesofrelevantStateandlocalagencies;and(4)membersofthepublicwithexperienceinaviationsafety,pilottraining,economicdevelopment,andrelatedissues.

(c)Considerations.—Incarryingoutsubsection(a),theworkinggroupshall—(1)considerwhetherfundingfor,andthetermsof,currentorpotentialnewprogramsaresufficienttohelpensurecontinuationoforimprovementtoairtransportationservicetosmallcommunities,includingtheessentialairserviceprogramandthesmallcommunityairservicedevelopmentprogram;(2)identifyinitiativestohelpsupportpilottrainingandaviationsafetytomaintainairtransportationservicetosmallcommunities;(3)considerwhetherFederalfundingforairportsservingsmallcommunities,includingairportsthathavelostairtransportationservicesorhaddecreasedenplanementsinrecentyears,isadequatetoensurethatsmallcommunitieshaveaccesstoquality,affordableairtransportationservice;(4)identifyinnovativeStateorlocaleffortsthathaveestablishedpublic‐privatepartnershipsthataresuccessfulinattractingandretainingairtransportationserviceinsmallcommunities;and(5)considersuchotherissuesastheSecretaryconsidersappropriate.

(d)Composition.—(1)INGENERAL.—TheworkinggroupshallbefacilitatedthroughtheSecretaryortheSecretary’sdesignee.(2)MEMBERSHIP.—MembersoftheworkinggroupshallbeappointedbytheSecretaryandshallincluderepresentativesof—(A)Stateandlocalgovernment,includingStateandlocalaviationofficials;(B)StateGovernors;(C)aviationsafetyexperts;(D)economicdevelopmentofficials;and(E)thetravelingpublicfromsmallcommunities.

(e)Reportandrecommendations.—Notlaterthan1yearafterthedateofenactmentofthisAct,theSecretaryshallsubmittotheappropriatecommitteesofCongressareport,including—

33

(1)asummaryoftheviewsexpressedbytheparticipantsintheoutreachundersubsection(b);(2)adescriptionoftheworkinggroup'sfindings,includingtheidentificationofanyareasofgeneralconsensusamongthenon‐Federalparticipantsintheoutreachundersubsection(b);and(3)anyrecommendationsforlegislativeorregulatoryactionthatwouldassistinmaintainingandimprovingairtransportationservicetoandfromsmallcommunities.

34

Appendix C: Working Group on Improving Air Service to Small Communities Member List 

Mr.AndrewBonney(Chairman),SeniorVicePresidentofPlanning,CapeAirMr.JoshuaAbramson(ViceChairman),AirportDirector,EasterwoodAirport,CollegeStation,TexasMr.TimothyBradshaw,Roanoke‐BlacksburgRegionalAirport,Roanoke,VirginiaMr.BryanDietz,VicePresident,AirServiceDevelopmentatAlleghenyCountyAirportAuthorityMr.JackDokken,ProgramManager,SouthDakotaDepartmentofTransportation,OfficeofAeronautics

Mr. Toby Fauver, Deputy Secretary for Multimodal Transportation, Pennsylvania Dept. of Transportation

Mr.BarryGriffith,Manager/AirportDirector,NorthwestAlabamaRegionalAirport,MuscleShoals,AlabamaMs.LaurieGill,MayorofPierre,SouthDakotaDr.KimKenville,Professor,JohnD.OdegardSchoolofAerospaceSciences,UniversityofNorthDakotaMr.DougKimmel,AirportDirector,VeteransAirportofSouthernIllinois,Marion,IllinoisMr.BrianKinsey,AssistantDirector,MarketingandBusinessDevelopment,St.Louis‐LambertInternationalAirport,St.Louis,MissouriMr.StanLittle,ChairmanandCEO,SouthernAirwaysExpressMs.FayeMalarkeyBlack,President,RegionalAirlineAssociation(RAA)Mr.RichardB.McQueen,President&CEO,Akron/CantonRegionalAirport,OhioDr.RussellW.Mills,ResearchFellow,CenterforRegionalDevelopment,AssociateProfessorPoliticalScience,BowlingGreenStateUniversityMr.MikeMooney,AirServiceConsultant,VolaireAviationConsultingMr.StephenMorrissey,VicePresident,RegulatoryandPolicyAffairs,UnitedAirlines

Mr.PatrickMurphy,formerDeputyAssistantSecretaryofAviationandInternationalAffairs,U.S.DepartmentofTransportation

35

Mr.PaulRyder,ResourceCoordinator,AirLinePilotsAssociation(ALPA)Mr.BrianSowa,ExecutiveDirector,RuralAirServiceAlliance,Inc.(Note:appointedbutdidnotparticipate)Mr.BrianSprenger,AirportDirector,BozemanYellowstoneInternationalAirport,MontanaMr.WilliamS.“Bill”Swelbar,ExecutiveVicePresident,InterVISTASConsultingandExecutiveDirectorRegionalAirServiceAllianceMs.SheriTaylor,AirServiceDevelopmentProgramManageratWyomingDepartmentofTransportationAeronauticsDivisionMr.MikeThompson,COO,SkyWestAirlinesMr.MichaelTooley,Director,MontanaDepartmentofTransportation

SubjectMatterExperts(SME)Mr.RobBurke,Manager,AirCarrierTrainingSystems&VoluntarySafetyProgramsBranch,FederalAviationAdministration(FAA)Ms.BarbaraAdams,Analyst,FlightStandardsService‐AirCarrierTrainingSystemsandVoluntarySafetyProgramsBranch,FederalAviationAdministration(FAA)

   

36

Appendix D: Meetings of the Working Group  

Date Location TopicsDiscussed

January25,2017 WashingtonD.C. Selectchairmanandvice‐chairmanoftheworkinggroup.Reviewstatutoryrequirementsandsetmissionofthegroup.Identifyfuturemeetingsandtopicstobediscussed.

February14,2017 LasVegas,NV Identifyinitiativestohelpsupportpilottrainingandaviationsafetytomaintainairtransportationservicetosmallcommunities.

March7,2017 Denver,CO Considerwhetherfundingfor,andthetermsof,currentorpotentialnewprogramsaresufficienttohelpensurecontinuationoforimprovementtoairtransportationservicetosmallcommunities,includingtheessentialairserviceprogramandthesmallcommunityairservicedevelopmentprogramConsiderwhetherFederalfundingforairportsservingsmallcommunities,includingairportsthathavelostairtransportationservicesorhaddecreasedenplanementsinrecentyears,isadequatetoensurethatsmallcommunitieshaveaccesstoquality,affordableairtransportationservice.IdentifyinnovativeStateorlocaleffortsthathaveestablishedpublic‐privatepartnershipsthataresuccessfulinattractingandretainingairtransportationserviceinsmallcommunities.

March28,2017 Washington,DC ReviewDraftFinalReport,reviewandintegrateinputfromoutsidestakeholdersandconfirmthedraftreportcapturedtheintentoftheWorkingGroup.

   

37

Appendix E: Acronyms Used in this Report ACRP–AirportCooperativeResearchProgramAIP–AirportImprovementProgramASD‐AirServiceDevelopmentASEP–AirServiceEnhancementProgramASOS–AutomaticSurfaceObservingSystemATP–AirlineTransportPilotAWOS–AutomaticWeatherObservingSystemCRJ–CanadairRegionalJetDOT–DepartmentofTransportationEAS–EssentialAirServiceFAA–FederalAviationAdministrationFAR–FederalAviationRegulationFOQ–FirstOfficerQualificationsFTE–FullTimeEquivalentGA–GeneralAviationGI–GovernmentIssuedMRG–MinimumRevenueGuaranteeNASAO–NationalAssociationofStateAviationOfficialsNEPA–NationalEnvironmentalPolicyActNPIAS–NationalPlanofIntegratedAirportSystem(NH/SH/MH/LH–nonhub,smallhub,mediumhub,largehub)NTSB–NationalTransportationSafetyBoardPFC–PassengerFacilityCharger‐ATP–RestrictedAirlineTransportPilotRJ–RegionalJetSCASDP–SmallCommunityAirServiceDevelopmentProgramTSA–TransportationSecurityAdministrationUND–UniversityofNorthDakota

38

Appendix F: Dissents of Working Group Members DissentofPatrickV.Murphy,Jr.Supportedby:BrianSprenger

OurReportdoesnotaddressthefundamentalproblemaffectingtheEssentialAirServesProgram(EAS).TheReportcorrectlydescribesEASasthebackboneofsmallcommunityairservice.Unfortunately,thiscrucialprogramhasgrowninefficientandsubsidyfundsarerisingsignificantly.IwasdeeplyinvolvedwiththedesignoftheEASprogramwhileworkingattheCivilAeronauticsBoardin1978.EASwasakeypartofthepackageleadingtoairlinederegulation.IassembledtheEASstaffandsupervisedtheprogramforitsfirstdecade.Theprogramwascreatedtoguaranteeairserviceforonlytenyearstoanycommunitythatmightloseallitsairlineflightsbecauseoftherestructuringcausedbyderegulation.Theconceptwasbasedontheuseof14‐19seatturbopropaircraftthatwerethenpopulatingtheemergingcommuterairlineindustry.Thoseaircraftarenolongerflyinginlargenumbers.Consequentlytheirefficienteconomieshavebeenlost.Furthermore,theeconomicforcesaffectingthedemandforairserviceatmanysmallcommunitieshavechangeddramatically.And,ofcourse,theoverallairlineindustryisverydifferenttoday.Consequently,subsidycostshaverisensharplyinrecentyears‐‐farbeyondanythingenvisioned.Subsidyhasjumpedfrom$50millionperyearin2000toover$250milliontoday,withnoappreciableincreaseorimprovementinservice.Thisfivefoldincreasehasprovidedmoreammunitionforcriticswholabeltheprogramasaprimeexampleofgovernmentwasteandcallforitstermination.ThePresidenthasjoinedthosecallingforanendtotheprogramwithhisinitialbudgetrequest.Thecriticsarecorrect.Therearetoomanysmallcommunitiesreceivingfederalfundsforflightswhensuperiorserviceisavailableonly45to90minutesaway.ToomanyEASflightsarefarlessthanhalffull.Attoomanycommunities90percentoflocalpassengersdonotusethesubsidizedflights,butdrivetonearbyairportswheresuperiorserviceisprovided,oftenbylowfareairlines.Certaincommunitieshavemadeclearbytheirowntravelchoicesthatsubsidyisnolongerjustified.Unlessthe39yearoldEASprogramisrevised,allcommunitiesintheprogram‐‐whetherdeservingornot‐‐areatrisk.IrecommendthatCongressdirecttheGAOorDOTtoprepareananalysisofeverysubsidizedcommunitytodeterminewhichshouldbedeletedfromtheprogram,whichshouldhaveservicereducedandwhichshouldhaveserviceincreased.Congresscanthendecidehowtoreshapetheprogram.Whilethisreviewisunderway,DOTshouldbedirectedtoenforcetheverymodesttrafficandsubsidyperformancestandardscurrentlyinthelawforeachcommunity.DOThasnotseenfittoenforcethesestandards,eventhoughtheirimplementationcouldsavemillionsofdollarswhileimpactingonlyahandfulofcommunities.Untilthesedifficultkindsofstepsaretaken,theEASprogramwillremainaprimeexampleofgovernmentwaste,andallsmallcommunitysubsidywillbeatrisk.Furthermore,subsidylevelswillcertainlycontinuetoescalate,sinceaircraftandcrewcostsarenowrisingrapidly.Ontheotherhand,ifreformsaremade,therearemorethansufficientfundsintheprogramtomaintain,andevenimprove,servicetodeservingcommunities.

39

DissentofBrianKinseySupportedbyBryanDietzandRichardMcQueen

WerespectfullydisagreewiththerecommendationthatifCongressincreasesthePFCcap,itshouldmaintainacapfortransferringpassengersfromsmallairportstravellingthoughlargeandmediumhubs.AnincreaseinthestatutoryPFCcaptohelpfundmuchneededairportsafety,security,andcapacityinfrastructureprojectsshouldnotnegativelyimpactairserviceatsmall(andlarger28)airportsthatrelyonlargerhubairportsforconnectionstoairlinenetworks.First,justbecausethestatutoryPFCcapisincreasedoreliminateddoesnotmeanthatairports,particularlylargeandmediumhubairportsthatserveconnectingpassenger,willincreasethePFCstheycharge.Hubairportscompetewitheachotherforairserviceandpassengers.Ifahubairportweretoraiseitscoststoohigh,itwouldloseconnectingpassengerstootherhubswithwhichitcompetesfortraffic.Andforhubairports,losingapassengerismorethanjustlosingthePFCincomefromthatpassenger;italsomeanslosingvaluableconcessionrevenueand,ultimately,riskingthereductionorlossofairlineservice.Second,whilePFCsareincludedintheticketprices,itdoesnotmeanthathigherPFCsresultinhigherticketprices.Airlinescompetewitheachother,andpricetheirticketspragmatically,basedonwhatthemarketwillbearandnotonthecostsofoperatinginaparticularmarket.AhigherorlowerPFCatanyparticularairportdoesnotmeanacorrespondinglyhigherorlowerticketprice.Thiswasmostvividlydemonstratedin2011whentheFederalAviationAdministrationbudgetauthorityexpiredandwithit,alsotheauthorityforairlinestocollectexcisetaxesontickets.FromJuly22untilAugust7ofthatyear,theairlinesdidnotcollectexcisetaxes.But,forthemostpart,ticketpricesdidnotchange.Instead,asitwaswidelyreportedatthetime,29mostairlinessimplyraisedthe“airfare”componentoftheticketpricebyroughlythesameamountthattheywouldhaveremittedtothefederalgovernmenthadtheexcisetaxesnotexpired,whichreportedlyamountedto$37onatypical$400domesticroundtripticket.30Inotherwords,themarketpriceofticketsdidnotchange;theairlinescontinuedchargingwhatthemarketwouldbearandpocketedthetaxsavings.Asairlinescompetewitheachother,throughdifferenthubs,thepricestheychargeforticketsareafunctionoftheotherchoicespassengershave,notthelevelofPFCsoroperatingcosts31atdifferentairports.Lastly,increasingoreliminatingthePFCcapwoulddirectlybenefitpassengersatsmallerairports.Providingnewfundingresourceswouldallowconnectinghubairportsthatarecurrentlyspaceconstrainedtobuildnewessentialfacilities,includingnewgates,which,inturn,shouldleadtomoreandmorereliableairservicetoawidervarietyofdestinations.AllofthesefactorssuggestthathigherPFCswouldnotnecessarilyimposeanundueburdenonairservicetosmallerairports.Onthecontrary,havingamechanismtofundmuchneededairportinfrastructureprojectsshouldbenefittheentireNationandallpassengersalike.

28 Up to 27% of passengers from certain large hub airports must complete their journey by connecting at other large or medium hub airports. 29 See e.g., Jane Engle, Airline ticket tax holiday is windfall – for airlines, L.A. Times, July 23, 2011; and Joe Sharkey, A Bonanza for Airlines as Taxes End, N.Y. Times, July 25, 2011. 30 See Airline tax holiday in effect. Act fast, Travel Skills, July 23, 2011. 31 According to the U.S. Department of Transportation, airport costs account for only 4.76% of average airline operating costs.

40

DissentofPaulRyder

Theworkinggroupcensoredthisdissentto1page.ALPAdoesnotbelievethatapilotshortageisthetopissuefacingairservicetosmallcommunities.Therearemanyindicatorsthattheendresultswerepredetermined,beforethegroupofficiallymet.AlthoughduetoCongressfromtheDOTonJuly15,2017,thegrouppressedtofinalizethisreportassoonaspossible,meetingonlyfourtimes.TherewasnodiscussionontheuniqueneedsofAlaska,norsuggestimprovementstoensureAlaskaisnotimpacted.ThegroupmadelittleefforttoadjustrecommendationstoachieveALPAconsensus,andpressedALPAintoadissentpositionalmostimmediately.Intheirrush,theworkinggroupmadenoeffortstoevaluatedata,usescientificmethodologyforanalysis,orengageinmeaningfuldialogueduringmeetings,inordertoensureadequatepeerreviewofthecontentoffellowmembers.Also,therewasaninsufficienteffortplacedonobtainingfeedbackfromgovernors.Thegroupmadeerrorsindocumentingairlineconsolidation,omittingmergers(Alaska/VirginAmerica)andignoringthefactthatmanynationalcarrierswhoservesmallcommunities,haveemerged(Allegiant,Frontier,Spirit,Silver).Frommyperspectivethegroupappearedtohaveapreconceivednotionofintent,adisingenuousperspectivetowardsALPA,andafinaloutcomealreadydeterminedatonset.

Inrecommendation1,thegroupcallsforCongresstodirecttheFAAtoevaluatearollbackofsafetyrulestoaddresssmallcommunityairservice.Supportersforthisreductioninsafetyincludesamayor,stateDOT,andotherpublicofficialsservinginelectedorappointedpositions.Theydidnotproveapilotshortageexistswhenpay,work‐lifebalance,andcareerprogressionarecompetitive.ThereportdoesnotincludedatasourcedbyFAA,thatmorethan9,000ATPcertificateswereissuedin2016andthattheaveragerateofATPissuanceisinexcessof6,000certificates,higherthaneventhemostoptimisticdemandforecasts.

TheygrosslyexaggeratetimeapilotwhograduatesfromabaccalaureateprogramatanaccreditedaviationuniversityreachestheflighttimenecessaryforanR‐ATPanddidnotacknowledgehistoricallyhigherflighthourrequirementsbytheregionalairlines.Afterfouryearsofuniversity,ALPAestimatesthat750hoursofflightexperiencecanbeachievedinabout1year.Thatishardlya“drasticallyincreasedtime.”Fromasafetyriskperspectiveitisjustified,accordingtoanaviationrulemakingcommittee‐includingsomeofthecurrentworkinggroupmembers‐thatreachedconsensus.Thereportmischaracterizesthe2016pilotsourcestudyontrainingcostsasastudythatprovesthenewlyhiredpostFOQrulepilotsarelesssuitablethanlow‐hourpilotswithlessexperience.Theseclaimsarebasedpurelyontrainingtimes,andtestingcostsattheairlines.TheyalsofailedtosubstantiateclaimsthatthenewFOQrulescoststudentpilotsmoremoneythanbeforetheFOQrule.Thegroupdidnoteventaketherelativelyeasysteptodocumentinflationasafactor.

Thegrouprefusedtoaddareferencetothe2014GAOreportquestioningthemethodologyUNDusesintheirpilotshortageclaim.Also,theirshortageforecasthasbeendownwardlyadjusted.TheyalsofailtonotethatUND’sclaimthat5,000pilotsperyearneededoverthenext10yearsiswellbelowtheaveragenumberofATP’scurrentlyissued.Noothershortagestudieswereprovided,butthereareothers,includingGAO.Thegroupignoredoursuggestionstopromotepilotingcareersandaddresstheneedforpilotcareerprogression.

Inadditionthegroupdidnotconductadetailedanalysisofallfactorsaffectingairlinedecisionmakingtochangeairservice,rejectingALPAsuggestionstocallforreformsthatwouldenhance/improvethebusinessmodelsofairlines.ThegrouprejectedALPA’ssuggestiontoreferenceaDOTInspectorGeneralstudyinMarch2017that1)Spotlightsissueswiththeairlinebusinessmodel,fundamentallyimpactingsmallcommunityairservice,and2)documentsthat“carriersstatedthatpilotswithfewerflighthourscontributedtoreductionsintheexperiencelevelandqualityofnewhirepilots.”TheydocumentspeculativetestimonybytheCEOofSkyWestataCongressionalhearingonsmallcommunities,andignoretheCEO’sfactualstatementthatday,thattheyhavenotcancelledflightsduetopilotshortage.

WhendiscussingtheneedforsmallregionalaircraftthereportignoresnewsfromBoeingandJetBlueonApril5thatreplacementturbopropsareindevelopment.Theyfailtostatethat50‐seatregionalaircraftareoutoffavorduetoeconomicreasonsandthatmanyareparked,butavailableforusebyairlines.Thegroupalsofailstoinvestigatetherootcauseofairlinefleetchanges,noruseanydatatojustifyopinionspresented.Therewasalsoalackofdiscussionondecisionsthatairlinesmakewhendecidingtoupgaugeaircraft.

Summary:Theysquanderedtheperfectopportunitytoaddresstherealissuesfacingsmallcommunities.

ALPAperspectivesweredocumentedinasubsequentlettertoDOTSecretaryChao.www.alpa.org/Chaoletter