Presenter Email
peckm@erau.edu
Location
Jim W. Henderson Administration & Welcome Center (Bldg. #602)
Start Date
8-13-2018 10:30 AM
End Date
8-13-2018 12:00 PM
Submission Type
Presentation
Keywords
Essential Air Service, pilot shortage, salary
Abstract
The Essential Air Service (EAS) program, established in 1978 by the federal government as a temporary measure designed to help remote communities cope with the impact of airline deregulation, subsidizes flights to certain destinations that would not otherwise have ready access to commercial air service. The airlines participating in this program fly relatively smaller aircraft and have traditionally hovered at the lower end of the salary scale. Their pilots are, nevertheless, subject to the same flight experience requirements as the major carriers. The national (or perhaps international) pilot shortage has caused some EAS carriers to abruptly terminate service leaving the related communities in the lurch. The service disruptions and increasing cost of the program over its 40-year history has not gone unnoticed by Congress. Although it would appear to be low hanging fruit for budget minded legislators, efforts to radically reduce expenditures have been only marginally successful. The lack of a ground swell movement to eliminate the program can be explained by the economic theory of concentrated benefits and disbursed costs – that is to say, the benefits of the program are concentrated in a localized few who can serve as an active voting block while the costs are disbursed among all taxpayers who hardly notice the miniscule charge. I would argue that it is reasonable and prudent at this time to dramatically reduce the number of serviced communities through incentives and sunset provisions and, furthermore, that such a reduction will have very little impact on the communities being served.
Presenter Biography
Michael Peck is an Adjunct Assistant Professor at Embry-Riddle Aeronautical University - Worldwide where he teaches courses in Aviation/Aerospace Law, Business Law and Aviation Legislation. In addition, he is a retired Partner in the Global Finance Group of Sidley Austin LLP, a global law firm of more than 1800 lawyers with offices in the United States, Europe and Asia. Primarily located in the New York City office, Mr. Peck practiced for 36 years in the area of asset-backed finance (including aircraft finance) and structured securitization. He is admitted to practice in the federal and state courts of New York and Georgia as well as before the Supreme Court of the United States. He is currently the Chair of the Aviation Finance Subcommittee of the Association of the Bar of The City of New York. After a four-year period of active duty with the United States Army in Asia and Europe, Mr. Peck remained in the Army Reserves, rose to the rank of Lieutenant Colonel and retired in 1998.
Mr. Peck is a graduate of the Institute of Air and Space Law at McGill University (Montreal, Canada), has JD and MBA degrees from Vanderbilt University (Nashville, Tennessee), an MA degree in Anthropology from Duke University (Durham, North Carolina) and a BA degree from Washington & Lee University (Lexington, Virginia). He is also a graduate of (i) the Defense Strategy Course at the U.S. Army War College, (ii) the U.S. Army Command and General Staff College and (iii) the Department of Defense Equal Opportunity Management Institute.
An avid pilot since 1978, Mr. Peck holds a commercial pilot’s certificate with instrument rating as well as a remote pilot’s certificate with small unmanned aircraft systems rating. He is also a certified flight instructor, instrument instructor and advanced ground instructor.
Original PowerPoint, Full-res
Essential Air Service: A Lower Rung on the Pilot Shortage Food Chain?
Jim W. Henderson Administration & Welcome Center (Bldg. #602)
The Essential Air Service (EAS) program, established in 1978 by the federal government as a temporary measure designed to help remote communities cope with the impact of airline deregulation, subsidizes flights to certain destinations that would not otherwise have ready access to commercial air service. The airlines participating in this program fly relatively smaller aircraft and have traditionally hovered at the lower end of the salary scale. Their pilots are, nevertheless, subject to the same flight experience requirements as the major carriers. The national (or perhaps international) pilot shortage has caused some EAS carriers to abruptly terminate service leaving the related communities in the lurch. The service disruptions and increasing cost of the program over its 40-year history has not gone unnoticed by Congress. Although it would appear to be low hanging fruit for budget minded legislators, efforts to radically reduce expenditures have been only marginally successful. The lack of a ground swell movement to eliminate the program can be explained by the economic theory of concentrated benefits and disbursed costs – that is to say, the benefits of the program are concentrated in a localized few who can serve as an active voting block while the costs are disbursed among all taxpayers who hardly notice the miniscule charge. I would argue that it is reasonable and prudent at this time to dramatically reduce the number of serviced communities through incentives and sunset provisions and, furthermore, that such a reduction will have very little impact on the communities being served.
Comments
Presented during Session 2: Pilot Supply