May 19, 2021
Mandated by the Federal Aviation Administration Reauthorization Act of 2018
DOT Appropriately Relied on Unsubsidized Carriers in Accordance With Its Policy but Conducted Limited Oversight of the Essential Air Service Communities They Serve
What We Looked At
The Airline Deregulation Act of 1978 (ADA) gave airlines the freedom to determine which markets to serve and what fares to charge. However, it also raised concerns that communities with relatively low traffic levels might lose service entirely if carriers shifted their operations to larger, potentially more lucrative markets. Through the Essential Air Service (EAS) Program, the Department of Transportation (DOT) determines the requirements for each eligible community and subsidizes air carriers when necessary. In 2018, Congress directed our office to determine whether DOT was providing sufficient oversight of the unsubsidized air carriers providing basic essential air service. Accordingly, our objectives were to evaluate whether DOT (1) appropriately relied on unsubsidized air carriers for small communities and (2) conducted oversight of the services provided by those air carriers.
What We Found
DOT appropriately relied on unsubsidized air carriers in accordance with its policy. Specifically, if an air carrier proposed to provide air service without a subsidy and the Department determined the carrier could reliably do so, DOT relied on the carrier’s service as proposed. Federal law does not require DOT to consider community views when it relies on unsubsidized carriers, and the Department did not prescribe specific content for their proposals. We also found that DOT conducted limited oversight of the EAS communities served by unsubsidized carriers. Federal law requires eligible communities to be provided with basic essential air service and air carriers to file a 90-day notice of their intent to end, suspend, or reduce such service. While unsubsidized carriers typically met the minimum departure criteria for their communities, officials in seven of the nine communities we reviewed were unaware that they could petition Department when issues arose. DOT also did not conduct required periodic reviews of the designated levels of service in unsubsidized communities, which limited its awareness of their essential air service needs.
We made two recommendations to improve DOT’s oversight of EAS communities served by unsubsidized carriers. The Department concurred with recommendation 1 and partially concurred with recommendation 2, which we consider to be open and unresolved pending a decision from DOT.