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 itself.

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."

FMI: www.faa.gov, www.wichitagov.org