The state role in the development of scheduled passenger air service to small communities

The purpose of this dissertation was to identify specific measures which can be initiated and administered at the state level of government for the purpose of developing scheduled passenger air service to small and/or isolated communities. . These measures can enable the states to assume more of what has heretofore been a responsibility primarily of the federal government.

The motivation for this research was twofold. First, the direct operating subsidy required by the local service class of air carriers (locals) to provide scheduled passenger service to unremunerative points has been increasing during the 1970s. Simultaneously, however, the total number of points in the 48 contiguous United States receiving scheduled passenger air service from the locals has, with the exception of four years, declined since l962. Second, the Airline Deregulation Act of 1978 obligates the federal government to guarantee an "essential" level of small community service through 24 October 1988. The new Act makes the commuter class of air carriers eligible for the first time to receive a direct operating subsidy by providing scheduled passenger service to subsidy eligible communities. Consequently, there is a distinct possibility that the total subsidy outlay will increase as many communities and air carriers strive to obtain and to provide guaranteed service with federal support.

The research briefly reviewed the historical precedents for state level initiatives in the development of transportation services and facilities. It also reviewed the history of federal policy toward the locals since the mid-l94Os. It demonstrated that commuter air carriers have been successfully developing a characteristically short-haul, lighter density scheduled passenger service to small communities without the benefit of federal economic regulation or aid. In contrast, federal economic regulation and aid extended to the locals for the purpose of insuring small community service has proven to be an essentially frustrating and self-defeating experience.

The present negative (economic regulatory) and positive (promotional) roles of six states were examined in order to test the hypothesis that the states generally play a very limited role in the development of scheduled passenger air service to their respective small and/or isolated communities. The six states investigated included Texas, Florida, Virginia, Kentucky, Tennessee, and Georgia. Information was obtained from interviews with one or more aeronautics officials of each of the six states, the applicable aeronautics laws, rules, and regulations of each of the six states, and the oral testimony presented by each of the six states at one of nine Civil Aeronautics Board (C.A.B.) regional meetings on small community service. It was concluded that overall these six states play at least a moderate role in the development of small community service.

A questionnaire Survey of 32 commuter airline operators serving one or more points in one or more of the six states investigated was conducted by mail. The survey's purpose was to obtain the attitudes and opinions of commuter airline operators with respect to the present and potential state-commuter airline role in the development of Small community service. Nineteen useable questionnaires were returned. The responses were used to test the hypothesis that commuter air carriers should play a leading role in assisting a state's efforts to assume more responsibility for the development of small community scheduled passenger air service. The hypothesis was accepted.

The research concluded by recommending four categories of positive measures which can be initiated and administered at the state level for the purpose of contributing to the development of small community service via commuter air carriers. These measures were categorized as tax incentives, contractual purchasing, conveniences, and equipment loan guarantees. The general and specific conditions which should attach to these possible state aids were also specified.

A proposed Declaration of State Policy concerning small community scheduled passenger air service was also articulated. This policy provides the philosophical framework which can guide a state's efforts in this area. . It was proposed that this policy be implemented and executed within the boarder context of a state's overall program to meet its inter- and intrastate air transport needs.