Keeping Rural Communities Connected

July 31, 2012

Free Market Foundation

A new report by M.J. Bradley and Associates for the Reason Foundation compares the current subsidised air service provided to rural communities under the Essential Air Service (EAS) program, to an alternative method of connecting these communities to the air transport system. The alternative is the use of scheduled intercity coach bus service between these rural communities and nearby regional hub airports.

The results of the comparison, both in financial cost to the traveller and government, in addition to the environmental impact, are significant:

While the current system of two to three flights per day has a maximum passenger volume of 1,539,720, the bus system maintaining the same frequency would have capacity for 4,347,200.

Total costs for the current EAS program for the 38 communities examined amounts to $131,490,975 (46 per cent of which is subsidised by the government), while the bus system’s expenses (accounting for additional travel time) would be $41,958,794.

Total fuel use is currently 7,930,259 gallons per year, compared to bus estimates of 2,213,595.

Emissions would drop dramatically, notably carbon dioxide emissions (88,149 tons annually to 24,605).

Given the financial figures alone, it becomes clear that the bus system makes a great deal more fiscal sense. Passengers would pay cheaper fares, the government would allocate fewer subsidies and the environmental impact would be lessened.

Source: Dana Lowell, Tom Curry, Lily Hoffman-Andrews and Lea Reynolds, Keeping Rural Communities Connected: Comparison of Essential Air Service Program to Alternative Coach Bus Service, Reason Foundation, September 2011.

For text: http://reason.org/files/essential_air_service_coach_bus_service_full.pdf

For more on Tax and Spending Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=25

First published by the National Center for Policy Analysis, United States

FMF Policy Bulletin/ 04 October 2011