When Dave Keselica emerged from the nine-seat Cape Air prop plane at the Augusta State Airport earlier this month, the Nevada resident was eager to get to his new second home in Maine.

It cost federal taxpayers $129 for the Reno-based mining executive to fly from Boston. But Keselica said that if he hadn’t been able to fly commercially to Augusta, he might not have bought a home near there.

Additional Photos

Passengers walk from a terminal gate to a Cape Air plane at the Augusta State Airport last week. The airline flies several trips a day between there and Boston s Logan Airport. Joe Phelan/Kennebec Journal

“It makes getting in and out much easier,” Keselica said.

But the federal subsidy program that allows Cape Air to fly between Boston and Augusta has been targeted for elimination by some in Congress, especially House Republicans.

The Essential Air Service program is paying out subsidies this year of more than $188 million to airlines operating at 153 airports in 35 states and Puerto Rico. That includes four airports in Maine: Augusta, Rockland, Bar Harbor and Presque Isle.

Maine’s congressional delegation and airport officials and civic leaders from the communities benefiting from the program say it fills a vital need, providing commercial air service to more remote locations.

But detractors note that the program originally was supposed to last just 10 years and its annual cost has mushroomed from about $50 million 10 years ago to the current cost approaching $200 million. Some routes — one between Las Vegas and Ely, Nev., often is cited as an example — have mostly empty planes and subsidies that far exceed $1,000 per passenger.

WASTEFUL OR ‘ESSENTIAL’?

The program has outlived its intended life and is a wasteful use of federal dollars, said Michael Needham, chief executive officer of Heritage Action for America, a conservative group affiliated with the Heritage Foundation think tank in Washington.

If Maine believes the subsidies make sense, then “maybe there is a role for state government to look at it” because federal regulators shouldn’t decide where subsidized air service is needed, he said.

“We need to have a prioritization of federal spending,” Needham said.

But Peter Thompson, president and CEO of the Kennebec Valley Chamber of Commerce, said that “essential” is a great word for the program.

Commercial air service is a key to the Kennebec Valley’s economic stability and ability to attract and retain businesses, Thompson said.

He points to people such as consultant Dale Shaller, who also flew Cape Air from Boston into Augusta earlier this month.

Shaller said it was difficult to easily fly from his home state of Minnesota to Portland. But he didn’t want to drive three hours from Boston to get to a meeting in Augusta.

The Cape Air flight “made the trip a lot more efficient for me,” Shaller said.

‘A MATTER OF EQUITY’

Thompson said he hopes the Augusta airport’s Cape Air service will become so popular that it could function without the subsidy. He compares the air subsidy to federal money that supports transportation and other infrastructure in urban areas.

“We make a huge investment in infrastructure in larger cities,” Thompson said. “Is it fair to reach down to the next level a bit and be supportive at the next level? It is a matter of equity.”

DELEGATION FAVORS KEEPING EAS

All four members of Maine’s congressional delegation — Democratic U.S. Reps. Mike Michaud and Chellie Pingree and Republican U.S. Sens. Susan Collins and Olympia Snowe — support keeping the subsidies for the four Maine airports.

Snowe earlier this year said ending the program would have “a crippling effect on commerce and commuters and would turn back the clock on economic development in rural regions.”

Snowe says the program could be scaled back, by eliminating airports that are within 90 miles of major hub airports like Boston — Portland is not considered a major hub for this purpose — and places where the per person subsidy exceeds $1,000.

Cape Air, which began flying from Boston to Augusta and Rockland in December, says the flights — which average about $62 one-way in Augusta and about $67 one-way in Rockland — are increasingly popular. Using smaller planes has made the route more efficient and allowed for lower fares, the airline says.

PASSENGERS INCREASING

Cape Air offers four flights daily on the Augusta-Boston route from Memorial Day through Columbus Day, dropping to three times daily after that. The Rockland route features five daily flights during July and August, four daily flights in June and September and three between October and May.

In June, 1,175 passengers flew in and out of Augusta on the Cape Air flight, Cape Air says. That is almost double the 635 passengers who flew the route in June 2010, and is the highest number of passengers in any June since at least 1995, according to the airline.

Cape Air receives a $1.36 million annual subsidy for the Augusta route and a $1.42 million subsidy for the Rockland route, which the airline says also is showing a marked increase in passenger traffic.

Cape Air said in the spring that in March 2011, 494 passengers flew out of Knox County Regional Airport, more than any March since at least 1985 and a 25 percent increase over March 2010. Those numbers have increased further this summer, to 1,494 passengers in June and 2,278 passengers in July, Cape Air said.

The numbers equate to a per passenger subsidy of $129 for Augusta and $98 for Rockland, says Andrew Bonney, Cape Air’s vice president of planning.

While the routes are popular, “we could not do it without the EAS program,” Bonney said.

Bonney says Cape Air has 39 destinations across New England and elsewhere, 15 of which are part of the EAS program. Cape Air only began flying the vast majority of its federally subsidized routes in 2007 and could continue on profitably as an airline without those routes if the EAS program was eliminated, Bonney said.

But, “being on the air transportation grid is a huge piece of the economic development effort for a community,” Bonney said. “The arrangement in the EAS program is for (the benefit of) the community, not the airline.”

Colgan Air Inc., the airline flying the routes to Presque Isle and Bar Harbor, gets a larger federal subsidy, but says taxpayers’ per passenger cost is about the same as for Augusta and Rockland.

Colgan, which flies as US Airways using 34-seat turboprops at Presque Isle and Bar Harbor, receives an annual subsidy of $2.29 million for the Bar Harbor route and $2.81 million for the Presque Isle route, with per- passenger subsidies coming to $100 for Bar Harbor and $109 for Presque Isle, said airline spokesman Joe Williams.

HIGHER COSTS, HIGHER SUBSIDIES

About 23,000 passengers a year use the Bar Harbor route, which has four round trips daily during the summer. Just under 26,000 use the Presque Isle route, but the subsidy rate is higher for Presque Isle because it is further north and fuel costs are higher, Williams said. Colgan flies three round-trips on weekdays and two on weekends.

Asked whether Colgan would continue to serve Bar Harbor and Presque Isle without the subsidy, Williams said via email that, “that’s a speculative question and the answer involves multiple considerations and parameters.”

But Scott Wardwell, the airport director of Northern Maine Regional Airport in Presque Isle, said he believes the Presque Isle-Boston route is close to being profitable. Most of the flights in and out are crowded, he said, and that demonstrates “what the EAS program should be about.”

“What would happen if the program completely died?” he said. “We can’t say.”

For years, Presque Isle — which hosts the World Cup Biathlon and many other outdoors activities — had a self-sustaining market with competing carriers, Wardwell notes. But fewer flights have meant more people loading into cars for long drives to bigger airports, and more traffic accidents, he said.

Wardwell said he’d like Congress to consider revising laws passed in the 1990s that require regional carriers to operate under the same rules as larger airlines. While they were intended to improve safety, Wardwell said some provisions can unnecessarily add to the cost of doing business for regional carriers.

If the regulations were reformed to reduce the costs of air service to small markets, “Presque Isle has a decent shot of getting off the program and saving the EAS program about $2.8 million a year,” Wardwell said.

MaineToday Media Washington Bureau Chief Jonathan Riskind can be contacted at 791-6280 or at:

jriskind@mainetoday.com

Twitter: MaineTodayDC

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