FAA Says AirTran Subsidy is Problem for Mid-Continent Airport

The FAA views the multimillion dollar AirTran subsidy as an unacceptable case of economic discrimination against other airlines.


Even if the Wichita City Council gives up control of Mid-Continent Airport, it may not be enough to resolve the ongoing issue over subsidies to AirTran Airways, a key official in the Federal Aviation Administration said.

David Bennett, director of airport safety and standards, said the FAA would likely continue to view the multimillion dollar AirTran subsidy as an unacceptable case of economic discrimination against other airlines, no matter how the airport board is configured.

Bennett's statement contradicts comments made to The Eagle last week by Charles Erhard, manager of the FAA's Airport Compliance Division.

Bennett is Erhard's boss in the agency.

Erhard had said in an interview that he thought the ongoing dispute between Wichita and the FAA would probably be settled if the city spun off control of the airport to an independent board.

Bennett said the FAA is waiting for a response from Wichita before making any final determinations, but one way for the city to resolve the issue would be to stop subsidizing AirTran.

He said that the city has received millions of dollars in federal grants since 1999, when the City Council disbanded the independent airport board and appointed the seven members of the council to serve as the Airport Authority.

As the agency that received the grant funds, Wichita is bound by nondiscrimination clauses in the grant awards that run "for the life of the grant contract, a long way into the future," Bennett said.

According to city records, the FAA has provided $35 million in airport grants since 1999.

The bulk of that, $28 million, has come since 2002, when the city started subsidizing AirTran.

Some of the contracts won't expire until 2044.

Bennett said the FAA has no interest in influencing the local decision of who governs the airport.

In the case of AirTran, "the real issue is the subsidy itself and how it's done," Bennett said.

In an April 6 letter to the city, the FAA gave Wichita 30 days to explain "how the (airport) authority will resolve this issue of unjust economic discrimination and provide a timeline for resolution."

Wichita has previously argued that the Airport Authority and the city government are separate -- which would allow the city to subsidize any airline it chooses. The city also argued that the subsidy to AirTran is not discriminatory.

The FAA rejected both points in its letter.

However, airport director Tom Nolan said he thinks Wichita's position is "strong."

He said there is a legal distinction between the Airport Authority and the City Council, although the same people serve on both boards.

"The Wichita City Council wears two hats but the legal entity (of the Airport Authority) is different," he said.

He also pointed out that the AirTran subsidy comes exclusively from city funds and not airport revenue.

"The city is responding to the FAA to clarify that position further," he said.

The city provided about $7 million to lure AirTran to town and keep its service going for the past three years.

The service to AirTran's hub in Atlanta opened up low-fare service to most popular destinations in the eastern United States.

The city's expenditure is credited with lowering fares by 30 percent and increasing Mid-Continent passenger traffic by 33 percent.

The city has calculated that travelers have saved about $85 million because of the subsidy.

Delta Air Lines, AirTran's chief competitor on the Wichita-Atlanta route, initiated the federal inquiry into the AirTran subsidy.

Delta asked the city to quit subsidizing AirTran in a presentation at Tuesday's City Council meeting.

The council rejected Delta's request and voted to renew the AirTran subsidy for another year at $2.5 million. Sedgwick County commissioners voted Wednesday to add an additional $1 million.

Delta Air Line officials have talked to the FAA this week about the matter, said spokeswoman Benet Wilson. But she did not know the details of the conversation.

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