Six North Carolina cities are proposing incentives of $5.4 million to help establish additional airline service. The communities — Fayetteville, Hickory, Kinston, Moore County (Pinehurst and Southern Pines), New Bern, and Wilmington — hope to combine federal grant money with local funds to attract a commuter air carrier to start flights to Raleigh. Many uncertainties, however, remain before the flights become a permanent fixture.

The Small Community Air Service Development Pilot Program is a federal initiative that helps smaller communities attract new air service. Under the program, the Department of Transportation awards grants to up to 40 applicants a year. Program funds may be used to subsidize an air carrier for up to three years.

The law creating the program requires priority consideration be given to communities or consortia of communities when:

• Air fares are higher than average;

• The community or consortium will proved a portion of the from local sources other than airport revenues;

• The community or consortium has established, or will establish, a public-private partnership to facilitate air carrier service;

• Assistance will provide material benefits to a broad segment of the traveling public, including business, educational institutions, and other enterprises, whose access to the national air transportation system is limited.

As might be expected of a federal grant program, SCASDP is popular. In fiscal 2002,179 applications were submitted requesting a total of more than $142 million. Most applications were turned down, however, as Congress provided only $20 million for the program. Asheville was the only North Carolina airport have its application approved in 2002. It received a $500,000 grant.

For the 2003 round of the program, the six North Carolina airports have formed a consortium with and are requesting a total of $3.6 million, or $600,000 each. The program has $20 million to distribute this year and requests for funding are again expected to greatly exceed that amount.

In addition to the requested federal funds, the six communities would also put in up to a total of $1.8 million to help start service to Raleigh. Unlike the federal grant request, however, the local incentives would vary widely; the cities that don’t have air service are willing to contribute greater amounts of money.

Fayetteville, which has flights to Charlotte and Atlanta, would provide up to $76,000 to attract air service to Raleigh. New Bern, which is served by an US Airways affiliated commuter airline from Charlotte, is willing to provide about $62,000 in incentives.

Wilmington would put up $79,000. Several airlines serve Wilmington and offer nonstop flights to Atlanta, Charlotte, New York City, and Washington, D.C.
Kinston, Hickory, and Moore County lost all of their scheduled air service in the last few years. As a result, they have been willing to ante up greater amounts to see service restored.

In the case of Kinston’s Global TransPark, the incentive package totals $280,000. Hickory, meanwhile, offers $339,000. The value of the package Moore County is offering just under $1 million.

The application lists Corporate Airlines as interested in providing the service. The airline operates 19-seat Jetstream turboprop aircraft under contract as an American Airlines-associated commuter carrier. Most of Corporate’s current flights are in support of American’s St. Louis hub.

Should the SCASDP application be approved, Corporate would serve each of the cities at least three times a day from Raleigh on Jetstreams. Corporate has also pledged to work to obtain an American Airlines code share for the routes.

Despite the airline’s interest and willingness of the communities to provide incentives, the success of the routes is far from certain. Federal funding is not assured. Even with the subsidies, the application projects that Corporate will lose $3.2 million on the routes in the first year. The hope is that demand will build over time, allowing the routes to eventually become profitable.

Whether that demand will materialize is questionable. Or as the Boyd Group, a respected, Colorado-based aviation consultancy recently noted on its website:

“In lots of thinly-populated, non-growing areas, there isn’t a solution that will provide real connectivity to the air transportation system, at least not one under the current situation that consumers will use.”

Lowrey is a Charlotte-based associate editor at Carolina Journal.