Editorials

End of air subsidies?

Would Southwest Airlines serve Wichita without a subsidy?
Would Southwest Airlines serve Wichita without a subsidy?

The public subsidy of low-fare air service to Wichita was meant to be temporary and transitional.

But it’s worrisome that the end of the Kansas Affordable Airfares Program appears to be nearing without certainty that Southwest Airlines and its fares will continue to be available to local fliers long term.

Three governors including Sam Brownback and multiple Legislatures have approved $5 million annually to help fund the program, which partners with the city of Wichita and Sedgwick County to support and sustain low-fare service at Wichita Mid-Continent Airport. Garden City’s airport has been receiving $250,000 annually as well.

The city of Wichita’s 2015 legislative agenda calls for full $5 million funding for the 2016 state budget, crediting the affordable airfares program with $1.446 billion in savings for airport users since 2002. Airport officials say Southwest not only provides low fares itself but leverages them on its routes – including 55 percent lower to Dallas and 31 percent lower to Chicago. It also flies between Wichita and Las Vegas.

But last week Brownback proposed cutting the state funding to $4 million and $3 million in fiscal 2016 and 2017, respectively.

The Wichita Metro Chamber of Commerce has a counterproposal of $5 million for one more year, with the understanding that no future state funding would be requested. A chamber newsletter says the “arrangement with Southwest Airlines calls for the program to expire” after fiscal 2016, also describing the governor’s proposed 2017 funding as “unnecessary” – a word likely to be heeded as legislators grasp every dollar they can to fill the budget hole.

Though Southwest was not in the habit of seeking or planning its service based on public subsidies, it made clear before it took over AirTran Airways and entered the Wichita market that those dollars would be an important component to its decision making. It asked for and received the full state and local subsidy amount of $6.5 million last year.

Will Southwest be willing to serve Wichita after fiscal 2016 without tapping taxpayer dollars?

As all carriers have benefited from falling oil prices, the Dallas-based airline has begun taking advantage of the expiration of the Wright Amendment restrictions by expanding its U.S. reach and even adding international routes.

Worries about whether the newly renamed Wichita Dwight D. Eisenhower National Airport would fit into Southwest’s business model were furthered last fall by the 68 percent load factor that Southwest reported on Wichita’s Dallas and Chicago flights.

The worst-case scenario of a Southwest pullout would resemble what happened when low-fare Vanguard Airlines left in 1997 – spikes of 223 and 137 percent in the average cost of flights to two cities it served, as passenger counts declined.

Though the end of the subsidies will be worthy of celebration, that will only be true if air service doesn’t suffer as a result.

For the editorial board, Rhonda Holman

  Comments