Blog Mirror: The Aerodrome: Air Subsidies Continue for Cody and Laramie. . . for now.

Air Subsidies Continue for Cody and Laramie. .. for now.

 

From Today's Casper Star Tribune, the following headline:

Air service subsidies expected to continue in Cody and Laramie. But larger questions loom.

But that apparently doesn't mean that such subsidies aren't on the firing line still, to some degree.

For those who might not be aware, air travel to Cody is subsidized by the Federal Government for the winter months, and for all passengers all year long for Laramie.  This provides for twice a day winter flights, for example, to and from Cody to Denver during the winter months.

It's pretty safe to assume that without these funds air travel to Cody would be impaired and for Laramie it would simply end.  The Tribune notes, regarding how this works;

United’s new contract to provide service to Cody guarantees the airline an annual payment of $850,000 to provide 14 nonstop trips each week from Cody to Denver between October and May.

That doesn't provide a reason to continue the subsidy, of course, and pure free marketers would argue that if the market doesn't support it, it should end.  On the other hand, it's been proven that a lack of convenient air transportation hinders Wyoming's economy fairly massively.  

For this reason, the state actually seriously took a look, and still somewhat is, on subsidizing air travel withing the state itself, although it didn't get to that. As the Tribune summarized it:

The Wyoming Department of Transportation presented an ambitious fix to the state’s reliance on commercial air carriers, who can currently decide whether and when to provide service — allowing the fortune’s of Cowboy State communities to rise and fall based on the whims of national corporations.

WYDOT proposed effectively creating its own airline, determining which communities would receive service as well as schedules, ensuring, for example, that it was possible for business people to catch an early morning flight into Casper or Rock Springs.

The state would contract with the same regional providers, like SkyWest or GoJet, that United and Delta Air Lines use on branded flights to connect relatively small communities, like those in Wyoming, with major hubs in Denver and Salt Lake City. These arrangements are known as capacity purchase agreements.

“This idea of capacity purchase agreements, for decades, has worked very well for airlines,” WYDOT director Bill Panos told lawmakers last summer.

At a bare minimum, a lack of air service certainly isolates Wyoming's economy.  So, at the end of the day, the argument somewhat comes the degree to which you favor practicality over economic purity, or whether you believe the government should have any role in subsidizing transportation.  The Governor's office noted, according to the Trib:

“Commercial air service is a significantly limiting factor,” Endow’s Jerimiah Reiman said earlier this year. “There’s a lack of air service particularly to global destinations.”

Of course, if we're going to go for economic purity, at some point we'd have to request that the Federal Government cease funding highway construction, which is a subsidy and a fairly direct one.  I can't see that request coming any time soon, but its interesting how in a state that tends to argue for a fairly laissez faire type of economics, we don't feel that way about highways.  No, not at all.  Of course, to be fair, funding the infrastructure, massively expensive though it is, is not the same as funding transportation itself.  I.e., there's no Federal bus subsidy, or Federal car subsidy. 

There isn't a Federal rail subsidy of any kind in most places, of course, although we do still have Amtrak, so I guess that's not fully true.  When railroads carried passengers everywhere cars were not as commonly used for over the road transportation and the Federal Government hadn't gotten in to highway funding yet.  Indeed, if the Federal Government quit funding highway construction it'd change the transportation infrastructure massively and we'd have to wonder if railroads and airlines would be big benefactors.  Anyhow, even at that time the railroads weren't necessarily super excited about passengers and the Federal Government somewhat forced the rail lines to carry them, but it didn't subsidize them.  The U.S. Mail was a big moneymaker for railroads back then, which it no longer is in any fashion, so the railroads had to listen to the Federal Government for that reason if none other.

Today In Wyoming's History: December 26. Boxing Day

Today In Wyoming's History: December 26. Boxing Day:

1917     The U.S. government took over operation of the nation's railroads during World War One.

 U.S. Capitol as viewed from a Washington D. C. rail yard, 1917.

This was a big deal.

The extent to which labor strife was a factor in the early US history of World War One is a story that tends to be drowned out by the opposite story during World War Two.  With the lesson of the first war behind it, labor was highly cooperative during the Second World War and, for that matter, the war brought massive employment relief from the ongoing Great Depression.

The story wasn't at all same in regards to World War One.  Going into the war the nation was faced with labor strife in the critical coal and railroad industries.  On this day the Federal Government, giving a late unwelcome present to the railroads, nationalized rail and put the lines under the United States Railroad Administration.  The USRA would continue to administer rail until March 1, 1920.

The action wasn't solely designed to address the threat of rail stoppages by any means.  Rail was critical to the nation and formed the only means of interstate national transportation.  This would largely remain the case in World War Two as well, of course, but by then there were beginning to be some changes to that. For that matter, its frankly the case far more today than people imagine.  But in the teens, rail was absolutely predominant.

In spite of that, and in spite of their best efforts, the railroads simply found themselves unable to address the massively increased burden on the various national private companies, the accompanying inflation in rail prices, and addressing the needs of labor.  The Interstate Commerce Commission did what it could, but it finally recommended nationalization in December, 1917.  The President took action on the recommendation on this day.

The USRA's sweep was surprisingly broad, and it even included the standardization of locomotives and rail cars.  Over 100,000 railroad cars and 1,930 locomotives were ordered for the war effort, which the USRA then leased.

USRA Light Mikado pattern locomotive.

Showing, perhaps, the radical spirit of the time, the railroad employees unions not only supported the nationalization, but hoped and urged it to continue following the war.  This of course had no support outside unions and more radical quarters.  Nonetheless, because the formal legislative act that approved the nationalization, which came in March, had provided that the rail lines had to be returned to private ownership within 21 months following the conclusion of the war the failure of the United States to sign the Versailles Treaty necessitated a separate act to do the same, with that act strengthening the powers of the ICC.