Orders City To Remedy "Unjust Discrimination"
The FAA has given Wichita, KS, 30 days to describe how it will
remedy what the federal agency calls "unjust economic
discrimination" in its subsidies to AirTran. FAA officials
say millions of dollars in federal grant money to Mid-Continent
Airport are on the line.
AirTran has competed head-to-head with Delta on the non-stop
route from Wichita to Atlanta since it began daily service to
Mid-Continent May 8, 2002. At the time, Wichita city leaders, who'd
reportedly asked other airlines to compete in the market in order
to lower air fares, offered AirTran $4.5 million in compensation
for losses anticipated on the route during the first two years of
service, and another $2.5 million to cover losses during the third
year of operations.
Earlier this month, the city agreed to pay another $2.5 million
to subsidies AirTran flights to and from Atlanta for another year.
That deal must still be approved by the Wichita City Council and
the Sedgwick County Commission.
Delta: No, Sir, We Don't Like It
Delta, which (until
AirTran was lured to town) provided the only non-stop to Atlanta,
has never liked the AirTran deal. Now, since the city started the
process of extending its subsidy arrangement with AirTran, Delta
has finally taken its beef to Washington. But the airline doesn't
want an end to the AirTran subsidies. Instead, the financially
beleaguered carrier wants a piece of that pie for itself.
"We want to see a level playing field," Delta spokeswoman Benet
Wilson told the Eagle. "We're just saying we want to get what
AirTran is getting."
Delta will reportedly send a delegation to Tuesday's Wichita
City Council meeting with just such a request. But the
Atlanta-based carrier has gone beyond the Wichita City Council,
making its complaint about AirTran subsidies known at the FAA in
Washington. Hence, the FAA's interest in the whole deal.
In a letter obtained Friday by the Wichita Eagle, the FAA warned
city leaders that "treating these two similarly situated air
carriers differently could constitute a violation," said the FAA in
that April 6th letter to city leaders.
The City's Argument
Wichita officials don't deny that they're financially favoring
AirTran over Delta. They make no apologies. But city leaders don't
think the FAA has anything to say about the situation because the
subsidies don't come from Mid-Continent. They come from the city
FAA grant assurances require airports to treat airlines equally.
Wichita city leaders figured they could get around that requirement
by making sure everyone knew the AirTran subsidy came from the
city, not the airport itself. But Wichita disbanded its independent
airport authority six years ago. Now, the city council makes most
of the decisions when it comes to running the airport.
"We still are of the opinion that the airport and the city are
different," City Manager George Kolb told the Eagle. "They have two
different funding sources, and the funds do not mingle."
But the FAA doesn't buy
that. In the April 6th letter, the FAA said, "You (Wichita) provide
minutes from the Aug. 10 City Council meeting purporting to show a
separate City Council agenda and airport agenda," the FAA letter
said. "Both agendas, however, are included under the broad title of
'City Council proceedings.' In addition, a notice immediately
following the heading for the airport agenda states, 'The City
Council is meeting as the governing body of the airport.' In our
view, this statement supports our contention that the City Council
is the governing body of the airport."
There's a pretty simple fix to that problem, Kold told the
Eagle: reconstitute the airport authority, if necessary. "That's
what I would do in a heartbeat," he said. But "I haven't seen where
the current system is broken. There are advantages for an
authority, and there's advantages to keeping it the way it is."
Apparently, Wichita's attorney doesn't think there's a problem.
With regard to the AirTran subsidies, Council Member Bob Martz told
the Wichita paper, "We always ask our legal staff whether we're
doing it right," Martz said. "The last time we had a discussion on
it, I was told it was okay."