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Less-Friendly Skies Seen For America's Rural Jet Set

DEREGULATION of the airline industry almost two decades ago left much of rural America to the puddle-jumper airlines, many generously subsidized by Uncle Sam.

But for the tiny regional carriers that service out-of-the-way places from Vermont to Montana, the skies are about to become a lot less friendly.

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President Clinton has pledged to sign a bill that would reduce the Essential Air Service, a federal program started in 1978 that subsidizes small-time carriers. A ticket from Rutland, Vt., to Newark, N.J., on Colgan Air, for example, costs only $169, $140 of which is subsidized.

In an era when all public spending is under scrutiny, the proposed cutbacks show that the Clinton administration wants out of the small-town airline business. Officially, the bill would cut the air program from $33 million to $22.6 million; Clinton officials originally wanted it eliminated altogether.

Critics of the air program say the government cannot afford to support an unprofitable business. But supporters, who note that the entire air-program budget equals only 1/10 of the federal aid given to Washington's subway system in a year, say the cutback has broad implications for rural citizens. Coming on top of cutbacks in Amtrak rail service, in the future, folks from Ephrata, Wash., to Danville, Va., may have to take the interstate, or the bus, just to get around.

Already, towns like Rutland are bracing for the worst. ''We should know the final amount [of the cuts] in the next couple of weeks,'' says Tom Trudeau, manager of the Rutland Airport. ''What our airport does is allow us to grow as a region,'' he says. ''We have a new mall here because various company executives could fly in and out. And in winter, skiers fly here. Take the airline away and we stop growing.''

In addition to Rutland and other locations, Colgan Air flies to Keene, N.H., and in summer to the resort town of Bar Harbor, Maine. ''Our subsidy now is about $968,000,'' says Mike Colgan, co-owner of the airlines, ''and it's divided between Rutland and Keene.''

Through September, Colgan has carried 5,548 fliers in and out of Rutland, a 1,000-passenger increase since last year.

The airline has three flights daily carrying 19 passengers to Newark and back, all in a Beechcraft pressurized plane.

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''We'll probably have the subsidy cut back,'' says Mr. Colgan. ''It'll be a hard decision for Congress. They can't really cut us by a third and expect us to survive and stay. It's not like we are being overpaid by a third.''

But some airline experts say many small rural communities don't generate enough viable business even with subsidies. At the same time, many of the smaller airlines will survive if the subsidies disappear because they have a rising commuter customer base plus good connections to the hubs of the dominant airlines.

''It's the really small communities that have to worry,'' says Michael Boyd, president of Aviation Systems Research in Golden, Colo. ''Most of the airlines in the lower 48 can probably survive without a subsidy. With the new mood in Congress to cut back spending, I think programs like [Essential Air Service] will be viewed more as pork barrel, and they will be eliminated.''

Congress initially authorized the program for 10 years through 1988, then tacked on another 10 years. The intent was not to create a permanent subsidy, and some 26 communities have since become ineligible for aid because they had become more profitable.

''If the local communities such as Rutland want an airline,'' says Mr. Boyd, ''let the good folks at the ski areas support it themselves. If the airline is good for the community, fine; let them support it.''

Rural America's other source of public transport, Amtrak, is also facing cuts, and possible elimination. The Government Accounting Office concluded this year that the national rail service couldn't survive without several billion dollars of new equipment and modernization.

Yet when eight states - California, Michigan, Wisconsin, Missouri, Pennsylvania, Illinois, and Vermont - learned that Amtrak services would be reduced, they pitched in state funds to stay on the grid, says Clifford Black, a spokesman for Amtrak. ''This speaks eloquently about the importance of passenger trains to them.''

Some companies are watching the anticipated cutbacks, and planning accordingly. Last week, Greyhound Lines announced that it will enter in agreement with Amtrak to tie bus operations to train terminals in five cities. ''If the airline service to cities we serve is eliminated,'' says Marty Heires, a Greyhound spokesman, ''we would increase our service there.''

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