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.