Commercial Aviation:

Initial Small Community Air Service Development Projects Have Achieved Mixed Results

GAO-06-21: Published: Nov 30, 2005. Publicly Released: Nov 30, 2005.

Additional Materials:


Gerald Dillingham, Ph.D.
(202) 512-4803


Office of Public Affairs
(202) 512-4800

Over the last decade significant changes have occurred in the airline industry. Many legacy carriers are facing challenging financial conditions and low cost carriers are attracting passengers away from some small community airports. These changes, and others, have challenged small communities to attract adequate commercial air service. To help small communities improve air service, Congress established the Small Community Air Service Development Program in 2000. This study reports on (1) how the Department of Transportation (DOT) has implemented the program; and (2) what goals and strategies have been used and what results have been obtained by the grants provided under the program.

The Small Community Air Service Development Program grants are awarded at the discretion of the Secretary of Transportation. GAO found that DOT considered the statutory eligibility criteria and priority factors as well as other factors in evaluating proposals and in making awards. The number of grant applications has declined since 2002. DOT officials see this as a consequence of the large number of ongoing grants and the impact of 2003 legislative changes. In surveying airport directors we found that grantee airports generally responded positively to DOT's process for awarding grants, about two-thirds were satisfied with the clarity of the selection criteria, while about one-third of directors at airports not receiving grants were satisfied with the clarity. DOT oversight is based on reviews of grantee reports and reimbursement requests, and DOT has terminated some projects and reallocated the unexpended funds to others. Individual grant projects had goals including adding flights, airlines and destinations, lowering fares, obtaining better planning data, increasing enplanements, and curbing the loss of passengers to other airports. Grantees used a number of strategies to achieve their goals, including subsidies and revenue guarantees to the airlines, marketing to the public and to the airlines, hiring personnel and consultants, and establishing travel banks. Results for the 23 projects completed by September 30, 2005 were mixed: about half of the airports reported air service improvements that were self-sustaining after the grant was over. Some projects were not successful due to factors beyond the project, such as an airline decision to reduce flights at a hub. However, it is too soon to assess the overall effectiveness of the program, because most funded projects are not complete--127 of the 157 awarded grants are ongoing. DOT designates one airport each year as an Air Service Development Zone. The communities selected in 2002, 2003, and 2004 expressed similar concerns about the usefulness of this designation. None of the communities could cite any effect the Air Service Development Zone had for them. Instead, communities expressed confusion as to what DOT's designation was supposed to provide.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In response to this recommendation, the DOT Inspector General conducted a review of the Small Community Air Service Development Program. Specifically, the DOT Inspector General reviewed 40 grants issued between 2002 and 2006 (excluding feasibility studies) that had been closed for 12 months or more as of March 31, 2007 to determine whether the projects could sustain themselves without continued Federal support. As a result of its review, the DOT Inspector General's final report, issued in May 2008, made further recommendations to improve the grant award process.

    Recommendation: To ensure the effectiveness of the Small Community Air Service Development Program, the Secretary of Transportation should conduct an evaluation of the Small Community Air Service Development Program in advance of the program's reauthorization in 2008. Such an evaluation should occur after additional grant projects are complete and include a determination of the extent to which the program is meeting its intended purpose of improving air service to small communities.

    Agency Affected: Department of Transportation

  2. Status: Closed - Implemented

    Comments: In response to our recommendation, DOT included enhanced guidance for communities considering requesting designation as an Air Service Development Zone in its January 2006 order requesting proposals for the fiscal year 2006 program. Specifically, the order clarified the information that the applicant is expected to provide to support his request including a detailed plan that outlines what goals the community expects to achieve and the types of activities on which it would like to work with DOT in achieving those goals. In addition, the order specifies that DOT would work with the grant recipient to help direct the community's efforts to appropriate government agencies that could provide further support and guidance for achieving the community's goals. The order also states that DOT will serve as a liaison in helping the selected community connect directly with others that have the expertise and ability to support the community's development activities.

    Recommendation: To ensure the effectiveness of the Small Community Air Service Development Program, the Secretary of Transportation should clarify what support and services it will provide to communities that are designated as Air Service Development Zones.

    Agency Affected: Department of Transportation


Explore the full database of GAO's Open Recommendations »

Nov 24, 2020

Nov 19, 2020

Nov 16, 2020

Nov 9, 2020

Oct 29, 2020

Sep 30, 2020

Sep 8, 2020

Sep 2, 2020

Looking for more? Browse all our products here