US says subsidies for rural airline service to expire Sunday

By David Shepardson WASHINGTON (Reuters) -The Trump administration said on Monday that funds from a U.S. government program that subsidizes commercial air service to rural airports are set to expire Sunday because of an ongoing partial government shutdown. The U.S. Transportation Department said the subsidies in the Essential Air Service program will end Sunday after the department transferred unrelated funding from the Federal Aviation Administration as an advance unless a government funding standoff is resolved. USDOT will stop reimbursing carriers on Sunday under the program and told them they can stop flights they had signed contracts to fly, according to a notice seen by Reuters. The government told airlines if they fly Essential Air Service flights beyond Sunday during the government shutdown they "do so at their own risk as the department may not be able to pay the contracted subsidy." The department is in the process of alerting communities of the potential impacts. The government has about $350 million in annual funding. In May, the White House proposed cutting funding by $308 million for Essential Air Service, which is popular with Republican lawmakers because it provides services to rural, largely Republican areas. To be eligible, the program requires a subsidy per passenger of less than $650, unless the community is 175 miles or more from the nearest major airport. During the first Trump administration, the White House proposed killing the Essential Air Service program, but Congress opted to boost funding. The program generally subsidizes two round trips a day with 30- to 50-seat aircraft, or additional frequencies with smaller aircraft. The department says under the program about 65 communities in Alaska receive service and 112 communities in the other 49 states and Puerto Rico that otherwise may not receive any airline service.  "Every state across the country will be impacted," Transportation Secretary Sean Duffy said at a press conference, noting it has bipartisan support. "We don't have the money for that program moving forward." (Reporting by David Shepardson; Editing by Aurora Ellis)

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