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Federal grants subsidize airport, airline in congressman's hometown

Locair pilot Conrad Pillai walks his only two passengers to the plane before taking off May 8 from the Lake Cumberland Regional Airport in Somerset, Ky.
Locair pilot Conrad Pillai walks his only two passengers to the plane before taking off May 8 from the Lake Cumberland Regional Airport in Somerset, Ky. David Stephenson/Lexington Herald-Leader/MCT

WASHINGTON — Lake Cumberland Regional Airport's new $3 million, federally funded commercial terminal sat virtually empty for three years while renovations were completed and local officials struggled to persuade a carrier to provide service to rural Somerset, Ky., population about 12,000.

Next month, that long-awaited carrier, Locair, which now makes four 45-minute round-trip flights to Nashville, Tenn., each week, will add service from Somerset to Washington Dulles International Airport on Monday mornings and Friday evenings — the same days and times that government officials and companies with government contracts tend to travel to and from Washington.

Fort Lauderdale, Fla.-based Locair offers discounted fares starting at $39 on its nine-seat planes, and passengers initially will pay less than $200 per ticket thanks to a $1 million taxpayer-subsidized grant. Taxpayers could pay more than $2,000 per flight.

Since 2002, under the direction of Congress, the Department of Transportation has pumped $110 million into the Small Community Air Service Development Program, a pilot program that small cities such as Somerset that have problems luring consistent air service or that must pay high airfares, are using to subsidize air service.

Over the past decade, Congress also has channeled more than $1 billion into an Essential Air Service program, which also subsidizes flights to rural communities. Somerset doesn't participate in the Essential Air Service program.

Critics say the air service to rural Somerset is a good concept with disastrous execution.

"It would make more sense to rent a car when you get to Louisville and drive," said aviation consultant Michael Boyd. "They're running a 19-seat airplane with nine seats on it. North of them, they have Louisville with a lot of service, and south of them they have Nashville with a lot of service. A lot of these ideas are nutty fruitcake and just don't work."

Somerset is a 90-minute drive south of Lexington, two and a half hours south of Louisville and roughly three hours north of Nashville, and other cities that participate in the programs are within driving distance of larger airports.

A 2007 review by the Department of Transportation's Inspector General found that communities that used Small Community Air Service Development Program grants had only a 30 percent success rate in sustaining air service in the year after those grants expired.

"A lot of times these cities think, 'If we don't have this, we won't get economic development,'" Boyd said. "That presupposes that those are places people want to fly to, and it also presupposes it's airplanes people will get on."

Rep. Hal Rogers, R-Ky., a senior member of the House Appropriations Committee, which allocates funds for the grant program, said that Locair's new service to his hometown is part of an important drive to spur development and tourism in southern and eastern Kentucky.

"It should come as no surprise to anyone that I support initiatives throughout the region that will encourage economic development, improve our environment, increase public safety, and grow tourism," said Rogers.

"The carrier has to make good business decisions, and routing is an integral component of that," Rogers said. "Any misplaced assertions that I somehow secured the grant, selected the carrier and determined the routes are simply not true."

For nearly two decades, Somerset officials have pinned their hopes on the idea that air service would bolster the area's economic development efforts.

In 2004, the city received a $3 million FAA airport improvement grant to construct a new terminal. However, several regional carriers refused to consider Somerset because, at the time, the airport didn't have an Instrument Landing System, which enables planes to land safely even if visibility is limited, said Ron Swartz, the manager of the Lake Cumberland Regional Airport.

Airport officials worked to get an ILS in place, and in 2005 Rogers wrote to Norman Mineta, a former congressman who was then the transportation secretary, in support of Somerset's grant application.

"As you evaluate applications for the Small Community Air Service Development Program, I am confident that with an initial federal investment — short term air service funds coupled with an aggressive marketing campaign — this proposal will be successful," Rogers wrote.

Somerset, one of 37 cities to win grants in 2005, has scrambled every year since to secure extensions as air carriers backed out on contracts, ran afoul of Federal Aviation Administration regulations or folded altogether. It now has roughly a year to make its new air service a success.

Last year, local officials were able to woo Locair by highlighting the possibility of capitalizing on the burgeoning crop of small defense-related businesses and tourist facilities near Lake Cumberland, said Nate Vallier, Locair's general manager.

"When we told the congressman's office, they were thrilled. They never, ever imagined they would see a flight," Vallier said.

The relationship with Rogers' office is "leading us into other businesses," he said. "One company alone wants to buy four seats each way every week. That's half my seats right there."

Other members of Congress have come under fire for using their influence to renovate near-empty airports in rural sections of their district.

Rep. John Murtha, D-Pa., who also sits on the powerful House Appropriations Committee, has helped channel $150 million in federal funds to an airport in Johnstown that locals have dubbed "Fort Murtha." Murtha considers the airport critical to plans to transform the area into a military nerve center.

Like the planned commercial flights from Somerset to Washington, the Johnstown airport is utilized largely by small commuter craft that fly back and forth to Dulles.

The air service industry is second only to the mining industry in contributions to Rogers' campaigns.

The air service industry has contributed $228,775 over the course of his career, according to an analysis by the Center for Responsive Politics, a nonprofit organization that tracks money in politics and public policy. During the 2007-2008 cycle, the Aircraft Owners and Pilots Association contributed $20,000 to Rogers' campaign.

Meanwhile, Somerset is paying $10,000 a month to cover its airport's operating costs — non-reimbursable expenses that have forced the city to increase its transportation budget from $40,000 to $250,000, said Somerset Mayor Eddie Girdler.

"We've received no assurance after the grant expires that there'll be additional money" to subsidize flights, Girdler said. "It will take two to three years to establish the market. We're still concerned that without additional networking where the cost is shared by other cities we would be in the same predicament as major airlines."

Worse, he said, without subsidized air service, the new, glass-front air terminal could go dark again.

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