Public Funding of Airport Incentives: The Efficacy of the Small Community Air Service Development Grant (SCASDG) Program

Abstract

As U.S. airlines began to restrict available domestic capacity at smaller airports in 2008 as a result of higher fuel prices and an economic downturn, these airports have increasingly started to rely on incentive packages comprised of revenue guarantees, waived or reduced airport use fees, marketing support, or direct subsidies to attract new service. There are two main federal programs that provide funding for such incentives for small U.S. airports: the Essential Air Service (EAS) program and the Small Community Air Service Development Grant (SCASDG) program. While the EAS program has received considerable academic attention, there has been no comprehensive analysis of the success of SCASDG recipients in attracting and retaining their targeted air service. Using a metric of SCASD grant success, this paper evaluates the outcomes of 115 SCASD grantees from 2006-2011. In each year, fewer than half of the grant recipients were ultimately successful in meeting the goals of their proposal. Three case studies suggest that successful grantees often had signi cant community or airline support prior to submitting their grant and were located in slightly larger-than-average communities. Further careful consideration is necessary to determine whether reform of the SCASDG program is warranted to more e ectively support the development of small community air service in the United States.