&%$>£dF* FLIGHT TRANSPORTATION LARORATORY AIR SERVICE TO SMALL COMMUNITIES DIRECTIONS FOR THE FUTURE FINAL REPORT OF THE WORKSHOP ON LOW/MEDIUM DENSITY AIR TRANSPORTATION M.I.T. FLIGHT TRANSPORTATION LABORATORY February, 1974 Edited by Joseph F. Vittek, Jr. This report was prepared under joint NASA/ DOT/FAA Contract No. NASW-2524. The views expressed herein are not necessarily the official opinions of the sponsoring agencies. Most photographs courtesy of Lou Davis, Director, Public Relations, Air Line Pilots Association, Int'l. Portions of this report may be quoted without permission when credited. FLIGHT TRANSPORTATION LABORATORY MASSACHUSETTS INSTITUTE OF TECHNOLOGY CAMBRIDGE, MASS. 02139 TABLE OF CONTENTS Executive Summary The Workshop 5 Summary of Recommendations and Comments 5 Epilog 10 Introduction The Workshop Concept 12 The Workshop on Low/Medium Density Air Transportation 13 Background Information The Federal Program 14 Subsidy 15 Development of the Carriers 17 Industry and Market Structure 23 Workshop Report National Transportation Policy Issues 27 National Air Transportation Policy Issues 32 Low/Medium Density Air Transportation Policy Issues 39 Technology Issues 43 Comments and Minority Views Modified Workshop Recommendations 50 Comments on Workshop Recommendations 53 Comments on the Text 64 Epilog 67 Appendix A Keynote Speeches ' 69 Appendix B Panels 69 Appendix C Participants 72 V, -.g, EXECUTIVE SUMMARY In the decade between 1962 and 1972, The recommendations which resulted certificated air service was deleted at about from the Workshop are documented in this 250 points in the United States. In some of report and, although not unanimous in all these cases, the service was no longer cases, they do represent the majority con- needed because of improved highway ac- sensus. Significant comments and minority cess to communities of interest. In other views are also presented, as is a concluding cases, the rapidly emerging commuter car- epilog written by the Workshop Director re- rier industry replaced certificated carriers at flecting upon the overall impact of the Work- marginal points. However, in many cases, shop and anticipated future results. the cities were left without adequate trans- It is hoped that this discussion and the as- portation. In addition, many cities that have sociated recommendations will provide never received air service now face a similar valuable input to transportation planning at plight. the national, state and local levels, par- The federal government, through the cre- ticularly for low and medium density areas, ation of the local service air carriers in the and that the referenced agencies will accept mid-1940s and their subsequent subsidy, them as constructive suggestions for further has attempted to provide better air service consideration. to the nation's smaller towns. But the ques- tions persist: Is the federal subsidy program effective? Should federal regulation and/or Summary of Recommenda- subsidy be extended to commuter carriers? tions and Comments Indeed, should the federal government sub- sidize this type of service at all? What na- The issues raised at the Workshop were tional goals does subsidy support? Perhaps classified in four major topic areas: National most important, who should be formulating Transportation Policy Issues, National Air the answers to these questions? Transportation Policy Issues, Low/Medium Density Air Transportation Policy Issues and Technology Issues. This report follows the The Workshop same topical structure. In August, 1973, the Flight Transporta- NATIONAL TRANSPORTATION POLICY tion Laboratory of the Massachusetts Insti- ISSUES tute of Technology hosted a month-long The first issues considered were broad seminar at Aspen, Colorado, on the prob- policy concerns that affect all modes of lems of providing air service to low and transportation in all areas of the country. medium density points. This Workshop was These have a direct impact on low/medium jointly sponsored by the National Aero- density markets even if not specifically ad- nautics and Space Administration and the dressing their problems. Although some Department of Transportation. More than Workshop participants felt that the current 175 participants, including 130 panelists and and often conflicting profusion of federal speakers, represented various interest statutes, regulations and programs repre- groups and points of view. sented a Congressional policy of "non- Two predominant philosophical positions policy," the majority felt that a clear national held by participants often led to conflict. In policy for transportation was needed and general, federal officials and academics fa- that the federal Department of Transporta- vored policies that relied heavily on market tion had failed to provide leadership in forces. Government intervention was con- formulating such a policy. Therefore, the sidered necessary only for limited specific Workshop recommended that purposes. In contrast, state, local and in- dustry participants often relied on the public The DOT should take an active, aggres- policy issue of a perceived need for service. sive role in the formulation and coordina- Inability to provide that service indicated tion of integrated national transportation that the market was not working and govern- policy. In taking the lead in transporta- ment intervention was required. This dichot- tion planning and coordination, the DOT omy is frequently reflected in the difference should consider modal economic effi- between the majority and minority views. ciency (including all private and public costs and benefits), modal energy re- service to the nation's smaller communities, quirements and consumer desires in recommending that formulating policy. DOT, as part of its planning process, The Workshop felt that a clear statement should attempt to strike a better balance on subsidy should be included in this policy. between rural and urban transportation Based on a conclusion that the rationale for services. present subsidy programs is often unclear The federal government should support and inconsistent and that the major benefit state or regional demonstrations for im- of these programs accrues more often to a proving transportation services to small particular area than to the nation as a whole, communities. the Workshop recommended that Several federal agencies responded that 1. Federal subsidies to transportation this was not appropriate for the federal should be paid only when government or, if it were, some other A. There is a clear national policy that agency, not theirs, should be responsible. the subsidy payments encourage The Workshop could not identify popula- or support; or tion dispersion as a clear national goal. Nor B. The subsidies are limited experi- was it clear that federally subsidized trans- ments to demonstrate the poten- portation would actually disperse popula- tial of new concepts to the private tion, although better transportation might market, which would take over im- prevent further concentration. It was there- plementation if the demonstration fore recommended that were successful. 2. This policy toward transportation sub- The DOT, with other government agen- sidies should apply to all modes. cies, should determine if in fact popula- tion dispersal is a valid national goal and Several comments were received on this how transportation aids or detracts from recommendation, with two major thrusts: that goal. 1. Since the nation is made up of individuals who live in local areas, what benefits those NATIONAL AIR TRANSPORTATION individuals benefits the nati6n as a whole; POLICY ISSUES and 2. There are specific national benefits that Although again the issues are broader accrue to the nation as a whole from good than low/medium density areas, there is a local transportation systems (e.g. popula- direct connection. The Workshop concen- tion dispersion). trated on the impact of national policy to- The Workshop did not totally disagree with ward air transportation as it affects the three these comments. It supported improved aviation segments that primarily serve the smaller communities: general aviation, local of locals to trunk status as present ex- service airlines and commuter carriers. cess capacity is absorbed with the con- comitant elimination of local service sub- General Aviation General aviation provides sidies and deletion of subsidized points. basic transportation service to smaller com- munities although it is not "public transpor- It was expected that commuter carriers tation" in the usual sense. But because of would provide service to many of the towns poor data, its true costs and benefits were deleted by local service carriers, although hard to quantify. Therefore, the Workshop local subsidies might be needed to ensure a recommended that commuter's success. The major objection to this recommenda- The FAA and DOT should obtain better tion came not from the carriers but from the statistics on general aviation. The first towns and unions. The Workshop felt both step is to better coordinate existing data sources of objection could be quieted. Once from various fragmentary sources. New the communities realized they might get bet- data acquisition programs should then ter service from a commuter, they would ap- be initiated to provide missing informa- prove. The incentive for the unions would be tion. the long-term potential for higher salaries and status that would accompany gradual The Workshop did agree in principle with expansion into trunk markets and larger