Wichita, Kan. City Council OKs Airline Subsidy

The Wichita City Council on Tuesday approved a $2.5 million public subsidy for AirTran Airways despite complaints of economic discrimination from a rival airline and the Federal Aviation Administration.

Mayor Carlos Mayans and his fellow council members said the subsidy, which the city is providing for a fourth straight year, is needed to sustain reduced airfares that help Wichita businesses and make tickets affordable for consumers.

"We have, in the past, been discriminated against, rate-wise," Mayans said.

Council members also signaled they have no intention of relinquishing control of the airport by re-establishing an independent authority to govern Wichita Mid-Continent Airport, a move an FAA official says is necessary if the city wants to both subsidize AirTran and continue receiving FAA grants.

In approving the subsidy on a 6-1 vote, the council rejected arguments from Delta Air Lines representatives Doug Blissit and Harold Bevis, who had asked the FAA to examine the city's subsidy.

"We're only looking for a level playing field," Blissit said.

The council's decision followed developments that have heightened controversy surrounding the AirTran subsidy.

Last week, Charles Erhard, manager of the FAA's airport compliance division, sent a letter informing city officials that the FAA staff believes the subsidy violates nondiscrimination conditions on federal grants.

Erhard's letter gave the city 30 days to tell the FAA how Wichita officials would remedy the problem. He could not be reached for comment Tuesday.

On Monday, Erhard said the city of Wichita could probably put an end to the conflict between the city and the FAA if it re-established an independent board to oversee the airport.

In 1999, the city took control of the airport and disbanded the airport authority, which at the time favored firing then-airport director Bailis Bell, who has since retired. Council members also were concerned that the authority wasn't doing enough about high airfares.

The entity in control of the airport receives federal grant funds and must comply with grant language prohibiting discrimination among airlines.

But City Attorney Gary Rebenstorf said the FAA is wrong in its efforts to have the council give up control of the airport.

Opposition to the AirTran subsidy also came from newly elected council member Jim Skelton. He had requested two more weeks to take the issue to neighborhood leaders in his southeast Wichita district despite Mayans' appeal for a unanimous vote.

Based on the city's action Tuesday, the Sedgwick County Commission plans to consider its own $1 million AirTran subsidy during its regularly scheduled meeting this morning, county spokesman Kristi Zukovich said.

The city of Wichita has provided AirTran with $7 million in the past three years.

The city has a huge economic interest in continuing AirTran service and remaining in good standing with the FAA.

The AirTran subsidy, which started in 2002, is credited with bringing low-fare service to Wichita and saving airline passengers about $85 million. Since AirTran started serving Wichita, airfares have fallen 30 percent and the number of passengers using the airport has increased 33 percent, city officials say.

Also, the city is seeking substantial FAA funding to finance a $150 million new terminal for Wichita Mid-Continent Airport. The terminal is in the planning stages.

Local business leaders said that protecting the AirTran subsidy is a prime concern, although they're willing to leave the details to the city government.

Wess Galyon, president of the Wichita Area Builders Association, said members of his organization were among the first to pledge that their travel dollars would be spent on AirTran flights whenever possible, to help support the service.

"If they're going anywhere east, they're flying AirTran," he said.

He added that "the subsidy to AirTran has been a huge benefit to the business community," which in turn benefits the whole city. "We think the money spent by the city of Wichita is well spent," he said.

He also said WABA didn't have any problems with an independent airport authority before 1999, when the council took control.

And, he said, the organization would support re-establishing the authority if necessary to comply with FAA rules governing airport improvement grants.

"If that fixes the problem, they (city officials) ought to take a serious look at that," Galyon said. "It's a move that needs to be looked at carefully -- and quickly."

J.V. Lentell, chairman of the Greater Wichita Economic Development Coalition and vice chairman of Intrust Bank, said he hadn't had a chance to talk to other coalition members since the FAA issue surfaced on Sunday.

"I'm sure that the city is working this out," he said.

Like Galyon, he said his group thinks low-fare air service is critical to the economic health of the community.

"I can just tell you among the people I deal with, they're pretty unanimous we need to make a deal and keep the service," he said. "Everybody agrees how badly we need that discount carrier."