Small(ish) airports vie for $30+ million in US DOT support

Small enough to need a little help, but not small enough that the DOT will pay for all the flights. That’s the position scores of airports across the United States find themselves in each year as they vie for funding from the Small Community Air Services Development Program (SCASDP).

Unlike the Essential Air Service (EAS) markets, SCASDP offers airports a way to entice new airlines or new routes, typically through minimum revenue guarantees should the fares not support profitable operations. But the grants are time-limited, and the DOT tends to not offer funding to the same airport repeatedly. It is critical that applicants find compelling markets and a cooperative airline to convert the short-term subsidy into a longer-term success.

The 2024 cycle of applications is in, with more than $30 million requested by 40 airports across the country.

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Some interesting comments

Three of the applications offer a particularly interesting angle on their request, and reflect recent shifts that have occurred more broadly in the US market.

Fayetteville, NC wants service to both Florida and Washington, DC. Demand appears limited, but Breeze supports the Orlando service while Southern Airways Express says it is willing to support the DC push. The airport acknowledges its DC service would be to Dulles (IAD), not National (DCA), but it is OK with that substitution, thanks to the new Silver Line transit connection:

While air traveler preference to the Washington, DC area has always skewed heavily towards DCA, the new Dulles Airport Metrorail now offers IAD travelers direct access to/from downtown Washington, DC with its numerous Federal agencies as well as efficient access to the Pentagon with a transfer to the Blue line. With this new transit service at Dulles, both IAD and DCA are viable options for FAY travelers to the National Capital Region.

For Elko, NV (EKO), service to Salt Lake City and beyond on Delta is hugely important to the local market. But the airport also recognizes the demand challenges. As Delta retired its 50-seat regional jets in December 2023 Elko was among the airports that got pushed into the 76-seat market. And, as the airport notes, that was terrible for everyone:

In December 2023, the last single-cabin RJs were discontinued with Delta, and that one daily flight was upgraded to a 76-passenger CRJ900. With the added capacity on just the single daily connection, load factors did not perform on the larger, more costly aircraft, as was expected. Other small markets from SLC experienced this same challenge.

Since then, however, the CRJ550 has entered Delta’s fleet, several years after United pioneered the type. Elko switched back to the smaller plane and has seen a rebound in the market, so much that the airport now hopes a second flight can be added. It seeks $800,000 from the DOT to guarantee the revenue on that additional capacity, but also comes to the table with the highest share of local commitments to boost its application.

In Stillwater, OK (SWO), home of Oklahoma State University, only 14% of the catchment area flies from the local airport, served twice daily by American Airlines to DFW. That route, operated since 2016 and recently up-gauged to a larger regional jet, exists because of a 2013 SCASDP grant. Arguably, that the service is still flying a decade after the initial grant is a sign of success. But it only operates because the city and university continued to offer minimum revenue guarantees, to the tune of $5.2 million total through 2026, after the original federal subsidy expired. The airport authority hopes that a boost in marketing funds will help boost local demand sufficiently to make the subsidy unnecessary going forward. Calling it marketing funds rather than a redo on subsidizing the route also gives them a better chance to secure the win.

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Letters of Support

Airports often partner with airlines for SCASDP requests. After all, it should be easier to convince the DOT to commit the cash when an airline is on board, rather than the airport taking additional time to hunt down a partner. The letters are typically careful to offer no guarantees, but they do lend credibility to the requests. For the current cycle 27 of the 41 requests include a supporting airline.

Breeze Airways tops the 2024 list, with its letterhead included in nine of the requests. No doubt the carrier would be happy to cash in on more than $10 million in subsidies ($7 million requested from the DOT) to launch new routes over the next couple years. Interestingly, one of those options – Huntsville, AL for service to the NYC area – also includes a letter from Delta Air Lines, that carrier’s first SCASDP endorsement in at least five years (it also is looking to grow at Elko, NV, albeit with SkyWest as the operator, noted above). Presumably Delta would serve the market from LaGuardia while Breeze plans operations at Newark.

Half the other Breeze-supported markets show that carrier’s affinity for its “BreezeThrough” direct flight operations, delivering transcon services via an intermediate stop. Among them, Greenville, SC wants to add service to San Francisco (or San Diego or Las Vegas) twice weekly, while Lansing, MI would like to be the pit stop for an A220 between Newark and the west coast. Knoxville, TN explicitly mentions connecting Los Angeles with Providence, RI and Ogden, UT wants to connect to Phoenix, which has been used as a BreezeThrough point in the past, launching as a stopping point between Provo, UT and Charleston, SC.

Breeze’s other support goes to east coast markets such as Bangor, ME; Ocean City, MD; Columbia, SC; and Fayetteville, NC.

United provided letters of support to seven airports, four connecting to Denver, and one each to Los Angeles, Dulles, and Houston.

American Airlines is supporting five applications, including an effort to bring back a failed 2021 route to Fairbanks, discussed below.

Finally, Allegiant signed on to support two markets, both of which it already serves. Hagerstown, MD wants to make sure it doesn’t lose its service from the carrier, and hopes that $325k from the DOT helps ensure that. Further west, MidAmerica St. Louis Airport (BLV) in Bellville, IL is seeking $750k to help Allegiant build out a crew base. The carrier flies to a dozen routes already, but BLV is not a base for the carrier yet.

How much money?

Requests typically top out at $1 million; eleven of the 2024 requests came in at that level, while Baton Rouge asked for $1.6mn this year. United Airlines is named as a supporting partner airline in five of the million dollar pitches, three of which would feed its Denver hub.

The requests, on average, ask the DOT to fund about 60% of the subsidy. Beyond that they include local airport investment – typically a non-cash contribution via waiver of landing fees and terminal rent – as well as local business commitments.

The request at Elko, NV to grow Delta service (via SkyWest) has just 25% of the total package value from the federal government. At the other end of the spectrum, American Airlines and Fairbanks, AK are hoping the DOT will cover more than 80% of the package to guarantee revenue for summer service to DFW. American tried that route in 2021 and came up short of profitability. It is unclear that the lack of sufficient tourism infrastructure, blamed for that failure, has been resolved.

Too little, or too late?

The smallest request was for $100,000 at Lakeland Airport to support Avelo‘s expansion in Florida. That the airline and airport already committed to the market, without the funding, might make it harder to convince the DOT to share that expense.

Similarly, Tallahassee, FL asked for $300,000 in an effort to keep its JetBlue service to Fort Lauderdale. Alas, the carrier announced earlier this summer (though after the applications went in) that the route would be killed. Also, it is not clear that $300,000 would’ve been enough to save it; by all accounts that route was an abysmal failure financially.

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Also, three of the filings are clearly fraudulent. But the DOT publishes everything submitted, so we get to read those, too.

My full notes on the applications are here. The DOT docket is here.