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Wed, Jun 14, 2006

KS State, County Governments Offer To Bolster AirTran Subsidies

Would Take Funding Burden Off Wichita... But What Will The FAA Think?

If you run an airport that accepts FAA grants, you can't treat one airline any different than another. That's the rule. But since 2002, the city of Wichita, KS has drawn the ire of the federal government for subsidies it pays Atlanta-based AirTran.

For each the past four years, Wichita has spent about $7 million to keep AirTran's business -- much to the dismay of rival carrier Delta, which the Wichita Eagle reports had asked for similar subsidies.

Wichita city leaders say Delta overcharges for flights to that captive market, so they decided to dig deep to attract another carrier like AirTran.

In spite of complaints from other carriers, and warnings from Washington, the subsidies continue -- and the threat of a showdown with the FAA has loomed just over the horizon.

Now, however, the state of Kansas has stepped in, by offering to bolster the subsidy fund.

At a meeting scheduled for Wednesday night, Sedgewick County commissioners could decide to take over the entire subsidy program from the city of Wichita.

Under terms of the proposal, the three-year contract would commit up to $7 million per year to subsidize AirTran's three daily round-trip flights to Atlanta from ICT. The Wichita Eagle reports most of that money -- approximately $5 million -- would come from the state through its Regional Economic Area Partnership fund.

County Manager Bill Buchanan said the city and county would then split whatever is needed beyond the state money, up to $1 million each.

The city would also stop subsidizing AirTran's Saturday flight to Orlando, FL.

"It wasn't a flight that was huge for us to subsidize," said Andy Schlapp, director of government relations for the county.

That might -- just MIGHT -- head the subsidy battle off at the pass. But would that indeed quash the FAA's case against city-based subsidies? Stay tuned.

FMI: www.airtran.com, www.wichitagov.org/

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