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Wed, Apr 27, 2005

Local Governments Eye Wichita's Subsidy Battle With FAA

Cities, Airports Coast-To-Coast Eyeing The Concept Of Paying An Airline To Fly Into Town

All across America, local governments and airports alike are keeping close tabs on Wichita's battle with the FAA over the city's multimillion dollar subsidies to AirTran. In the meantime, the clock is ticking on a 30-day deadline under which the FAA has ordered Wichita to "remedy" the situation.

As ANN reported earlier this month, the FAA sent Wichita city leaders a six-page letter saying the $7 million they've spent to subsidize AirTran's daily service to Atlanta. Wichita calls that good business sense -- lowering fares for thousands of passengers. But the FAA calls it "unjust discrimination," saying the city favoring of one airline over another.

City officials say the subsidies don't come from Mid-Continent Airport, but from Wichita itself. The FAA counters that, since the Airport Authority Board was disbanded by the City Council in 1999, the council itself runs the airport. While the City Council does make all airport-related decisions, lawmakers say they do so under a banner separate from the council itself.

"The water has been muddied quite a bit by the FAA's position on Wichita," said Mike Boggs, at Meade & Hunt. He was quoted by the Wichita Eagle.

The venerable Wichita paper reports it's not unusual for local governments to pay airlines for serving their markets.

"I'm trying to think of an airport where it hasn't happened," Darryl Jenkins, visiting professor at Embry-Riddle Aeronautical University in Daytona Beach, FL, told the Eagle. "Without that, you would not have any low-cost service in a lot of markets."

But the FAA's problem seems to center on an airport entity favoring one carrier over another. The agency has threatened Wichita's federal airport grants are at stake. We're talking millions of dollars here.

"It's premature to talk about any sanctions or action that might or might not be taken under the compliance process since the city still hasn't explained its most recent action to us," FAA spokesman Paul Turk told the Wichita paper.

FMI: www.wichita.gov/Government

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