1. SWAAAE Conference January 31, 2012 Essential Air Service Program Peter Morana Elon Wright

2. SWAAAE Conference January 31, 2012 Overview History/Background Current State of the Essential Air Service Program Benefits of the Program Possible Improvements

3. SWAAAE Conference January 31, 2012 History/Background Began in 1978 when the Airline Deregulation Act was enacted Congress added section 419 to the Federal Aviation Act Program was designed to expire in 1988 Mid-90s, subsidies rose 41 percent for service to communities outside of Alaska

4. SWAAAE Conference January 31, 2012 Current State of EAS Serves 153 communities at a cost of $200 million annually – 45 in Alaska Requirements for Subsidies, more than 70 miles and ticket subsidy cannot exceed $200 Bill passed by House of Representatives to phase out EAS by 2013, excluding Alaska and Hawaii Airlines currently starting to pull out of smaller communities

5. SWAAAE Conference January 31, 2012

6. Benefits of the Program Connects smaller communities that would not normally see funding to large hubs Helps gives funding to smaller airports Creates airport related jobs Creates and sustains jobs in rural communities

7. SWAAAE Conference January 31, 2012 Possible Improvements Acknowledge that many small communities are now well connected to highway network Allow seasonal fluctuations Lower the minimum service level Regulate what flights are operating out of each airport

8. SWAAAE Conference January 31, 2012 Questions?