Official Says Subsidies Might Continue If City Reconstitutes
If the city of Wichita, KS, would only reconstitute its airport
authority as an entity completely separate from the city council,
the FAA says it would probably have "no problem" continuing its
multi-million dollar subsidies to AirTran.
"When we have an airport that's out of compliance, we want to
bring them back into compliance," said FAA Airport Compliance
Manager Charles Erhard, speaking to the Wichita Eagle. "Not punish
them for some decision they made years ago."
As ANN reported over the weekend, the FAA says
Wichita is favoring one airline over another -- violating the terms
of its grants to Mid-Continent Airport -- by covering millions of
dollars in losses incurred by AirTran on its route from Wichita to
Atlanta. Only one other airline, Delta, flies that
route and city officials said no other airline was willing to serve
that route without subsidies. Wichita has paid AirTran $7 million
over the past three years to fly the route, even though it's a
loss-leader. In return, city officials say passengers on that route
have saved $85 million.
But Delta executives, whose inquiry led to the FAA
investigation, say they don't want the subsidies to end. They want
a piece of the pie.
In a letter to city officials dated April 6th, the FAA told
Wichita that it's subsidies to AirTran violated a pledge to treat
all airlines equally and, in violating that pledge, has endangered
millions in grants to Mid-Continent. "Treating these two similarly
situated air carriers differently could constitute a violation,"
said the letter, quoted by the Eagle.
Wichita city leaders don't deny subsidizing the AirTran
route. Instead, they say the subsidies aren't coming from the
airport, but are instead coming from the city itself. However,
since Wichita dissolved the airport board in 1999, the city council
has made all decisions concerning Mid-Continent. There's no FAA
regulation against a city subsidizing an airline.
But FAA managers say that is, in
effect, a ruse. "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."
The solution? As Erhard said, simply reconstituting the airport
authority as a totally separate entity would probably work. And on
the surface, it appears city leaders have no problem with that.
"That's what I would do in a heartbeat," City Manager George
Kolb told the Eagle.
But that won't satisfy Delta. "The FAA has said that these
subsidies are illegal, and we're just saying either eliminate the
program completely or offer it to everyone, including AirTran,"
Delta spokeswoman Benet Wilson told the Wichita paper.