BISMARCK, N.D. (AP) – An airline that for two decades has received federal subsidies to fly to a small North Dakota city says it no longer needs taxpayer help because the oil boom in the area has made the service self-sufficient.
Great Lakes Aviation will stop collecting a $2 million annual subsidy for its flights to Dickinson when the current federal contract expires on Feb. 1, spokeswoman Monica Taylor-Lee told The Associated Press on Monday.
“We will continue to provide service without subsidies,” Taylor-Lee said.
The Cheyenne, Wyo.-based air carrier has notified federal Transportation Department officials that it would not pursue subsidies under the under the Essential Air Service Program, established in 1978 to ensure small communities retain a link to the national air transportation system.
Bill Mosely, spokesman for the U.S. Department of Transportation, said it would terminate the subsidy-free service to Dickinson at the airline’s request.
In just six years, North Dakota has risen from the nation’s ninth-leading oil producer to No. 2 behind Texas, with advanced horizontal drilling techniques in the rich Bakken shale and Three Forks formations in the western part of the state.
Dickinson is one of 163 communities nationwide that receives a taxpayer subsidy from the federal government under the Essential Air Service Program, DOT’s Mosely said. The program’s annual budget is $214 million, he said.
Only 3,722 boarded airplanes in Dickinson in 1993, the first year of service by the air carrier, Taylor-Lee said. The Dickinson airport had about 19,000 boardings last year and has recorded about 17,000 boardings already through August, she said.
State data show the number of boardings has jumped 120 percent since August 2010, to almost 2,000 for the month.
“We don’t always have a 100 percent load factor but we’re fuller than we’ve ever been,” Taylor-Lee said.
Theodore Roosevelt Regional Airport Manager Matthew Remynse said the federal program was needed to lure airlines to Dickinson for the past two decades.
Taylor-Lee said Great Lakes has 35 federally subsidized routes in 14 states, including three in North Dakota. The air carrier will continue to collect about $3.5 million in subsidies for service to Jamestown and Devils Lake, she said.
The airport at Jamestown is within 100 miles of bigger airports in Fargo and Bismarck; while at Devils Lake airport is within 100 miles of the larger and better-served Grand Forks airport.
The North Dakota Aeronautics Commission said 2011 was a record year for airline boardings at the state’s eight commercial airports, bolstered by big gains in the western part of the state, where booming oil development is spurring more airline activity. The Fargo airport was the only one of the eight that saw a drop in boardings over the year.
The EAS program increasingly has been criticized as a waste of money by Congress. An attempt to scrap the program by House Republicans last year was reversed by a coalition of Senate Democrats and Republicans representing rural America.
It’s rare for communities to pull out of the EAS program. But Taylor-Lee said that’s always the aim.
“One goal of the EAS program is to get the service to be self-sustaining,” she said.
DOT’s Mosely said Dickinson would be only the fourth contract to be dropped under the program since 2010. The others were for Manhattan, Kan., Akhiok, Alaska and a combined contract for Columbia and Jefferson City, Mo., he said.
State Aeronautics Commissioner Larry Taborsky said airports in Dickinson, Williston and Minot have set boarding records nearly every month for the past four years in response to the region’s booming oil industry. But only Dickinson received a subsidy under the Essential Air Service program.
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)