Airline Service In Smaller Markets Takes Nosedive With the price of jet fuel doubling in the past year, airlines are trying to rid themselves of unprofitable routes. Since it's hard to make a profit flying short distances into small and medium-sized airports, some airlines are drastically cutting back service or getting out of those markets altogether.

Airline Service In Smaller Markets Takes Nosedive

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RENEE MONTAGNE, host:

Here's another way that demand for oil is going down, at least for now: airlines are flying less. To save money, they're dropping routes and hiking fares. NPR's Kathleen Schalch reports.

KATHLEEN SCHALCH: The financial triage has only just begun. To glimpse the future, I checked with my travel agent.

Ms. MEIKE BUXTON (Travel Agent): My name is Meike Buxton and I'm a travel consultant for National Public Radio.

SCHALCH: I asked her to book a flight from Dulles Airport in Virginia to Fort Lauderdale, Florida.

Ms. BUXTON: As long as you travel by the end of August, you'll be fine.

SCHALCH: What happens if I try to travel in September?

Ms. BUXTON: Starting the second of September, those flights are gone. Chattanooga, Montgomery, Alabama, Oakland, Palm Springs, California...

SCHALCH: Flights symbolized on Buxton's screen by columns of letters and numbers are vanishing.

Ms. BUXTON: Some of these airlines will stop flying to cities that they've been flying for years.

SCHALCH: Big city travelers will still have other options. They can switch airlines or fly through different hubs. But in small and medium-sized cities it may not be that easy. The planes that serve them burn a lot of fuel just taking off and landing. They may be small but they still need pilots, co-pilots and flight attendants just like big planes, so labor costs per passenger can be sky high.

Mr. THOMAS GREER (General Manager, Monterey, California Airport): At $130 a barrel for oil, the airlines tell me that there is no business model that works.

SCHALCH: Tom Greer is general manager of the airport in Monterey, California. He and other airport directors gathered recently in Washington to talk about what's happening in their town.

Mr. GREER: We've already had our first casualty. Express Jet announced that they were ceasing operations in September. They were pulling out of some 30, over 30 markets. It wasn't just Monterey.

Mr. RICHARD GRIFFITH (Airport Director, Butte, Montana): We're down to one airline and two flights a day.

SCHALCH: Rick Griffith of Butte, Montana and Skip Miller of Louisville, Kentucky say they're worried.

Mr. GRIFFITH: I'm just devastated. I can't tell you anymore. Because companies aren't going to move to an area that doesn't have good air service.

Mr. CHARLES "SKIP" MILLER (Airport Director, Louisville, Kentucky): It's just like 100 years ago with the railroads. If you didn't have a railroad and you weren't connected to the rest of the rail system in the country, your community died.

SCHALCH: The smallest cities in the most remote places may be hit hardest of all. Christine Klein helps oversee Alaska's state-run airport system.

Ms. CHRISTINE KLEIN: We depend on aviation to get to the majority of our communities - 280 of our communities. It's the only way in and out.

SCHALCH: The federal government actually pay their lines to keep serving communities like these. They created the subsidy program called Essential Air Service back when they deregulated the airlines. But most subsidies can't exceed $200 per passenger, and with today's fuel prices many carriers that's nowhere near enough, so they're giving up. Klein says they've already backed out of contracts to fly into three communities in her state.

Ms. KLEIN: Basically what that means is those communities have no service at this time at all.

SCHALCH: Some lawmakers believe that government needs to step in. Minnesota Democrat Jim Oberstar chairs the House Transportation Committee.

Representative JIM OBERSTAR (Democrat, Minnesota): The airspace is the common heritage of all Americans. It doesn't belong to the CEOs of the airlines. It doesn't belong to the shareholders of the airlines, belongs to all Americans.

SCHALCH: And unless something's done, Oberstar says, more and more Americans are going to be left out. Oberstar doesn't want to re-regulate the airlines exactly. Instead he's pushing to expand the Essential Air Service program. The House has already approved legislation that would boost the subsidies. Lawmakers are also considering changing the rules so that more airports qualify.

But some question whether it makes sense to keep planes flying where the market says they shouldn't. Tom Fiery of the Cato Institute says in most places essential air service isn't essential and is a waste of money.

Mr. THOMAS FIERY (Cato Institute): On average only three passengers are flying each of these flights. So we're paying a significant subsidy to fly mostly empty airplanes.

SCHALCH: He says that's because most air travelers in most states can simply drive to nearby cities to catch flights.

Mr. FIERY: Consumers have already backed out of this. They're already going to the major airports. The only people who can't seem to back out of it is Congress because this is a nice little gift to give their districts.

Rep. OBERSTAR: That's an elitist attitude.

SCHALCH: Congressman Oberstar says it shows contempt for small-town America.

Rep. OBERSTAR: Where there are businesses, where there is tourism activity, where there are enterprises that market internationally.

SCHALCH: But there may be limits to what the government can do. To break even in some smaller markets, the airlines may need to double or triple airfares, and even that may not help much. When tickets are too expensive, people think twice about flying. Empty seats could cost the airlines even more money and force them to cut service to even more communities come winter.

Kathleen Schalch, NPR News, Washington.

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