Air Service to Cities Abandoned by Piedmont Aviation Since Deregulation

Southeastern Geographer Vol. 25, No. 1, May 1985, pp. 16-29 AIR SERVICE TO CITIES ABANDONED BY PIEDMONT AVIATION SINCE DEREGULATION Thomas A. Maraffa and Don Kiel In 1978 Congress passed the Airline Deregulation Act (ADA) which curtailed the authority of the Civil Aeronautics Board (CAB) over the location, quality, and price of air passenger service. The Act was a response to the high cost of subsized air service to small communities, and to the belief that the public could be served more efficiently by an unrestricted commercial aviation industry. (J) A central issue in the ensuing debate on the wisdom of airline deregulation was whether or not major carriers' attempts to maximize profits in response to the Act have led to lower quality air service to small cities. Representatives of small, and even medium-sized cities, feared the reduction or elimination of air passenger service when federal subsidies to the major carriers were phased out, particularly if the airlines concentrated their equipment on the most profitable, high volume routes between the largest hubs. Proponents of deregulation countered that these smaller communities would be served without subsidy by emerging commuter airlines , operating limited networks with more economical equipment. Moreover, the Act contains several provisions promoting commuter airlines , and subsidizes service by commuters to small communities through 1988. (2) PURPOSE. One appropriate test of the impact of airline deregulation on small cities is to examine how one established airline has altered its route geography since 1978 and to evaluate the quality of service to cities dominated by the airline prior to 1978, but then abandoned by it in response to deregulation. To address this issue data were collected on the route system of Piedmont Aviation. (3) In particular, interest was focused on whether the cities abandoned by Piedmont became more or less integrated with the U.S. urban system in air travel connections . For this reason, two general measures of air service for each city were examined: quality of nonstop connections and travel time Dr. Maraffa is Assistant Professor of Geography at Virginia Polytechnic Institute and State University in Rlacksburg, VA 24061. Mr. Kiel is Transportation Planner with city ofJohnson City, TN 37601. Vol. XXV, No. 1 17 accessibility to three major U.S. cities—Atlanta, New York, and Washington , D. C. Piedmont Aviation represents a useful case because one of its primary functions prior to deregulation was to provide subsidized service to small communities. Since deregulation, the airline drastically modified its operating strategy, abandoning many subsidized routes in the process. It has become one of the most successful airlines of the postregulation era, evolving from a stable, regional carrier to a rapidly growing airline of national scope. BACKGROUND. Since 1978 the air passenger industry has been in a period of transition. The major carriers have altered their networks and fare policies as they jockeyed for a competitive advantage in the new regulatory environment. (4) New airlines have been formed at an unprecedented rate. Almost weekly, the air traveler faces announcements of service change or fare discounts. The first studies of the impact of the Airline Deregulation Act have begun to appear. Research on air service to small and medium-sized cities since deregulation demonstrates mixed results concerning whether or not deregulation is a beneficial public policy. For example, an extensive study commissioned by the Appalachian Regional Commission (ARC) concluded that air service to the small communities of the region has deteriorated since the passage of the Act. (5) The report cited the fact that air passenger traffic in the region had declined by 10 percent from 1978 to 1980, compared to a stable U.S. passenger market during the same two years. The decline is attributed to numerous instances in which certificated carriers abandoned service to communities in the region, to the growth in service by less reliable commuter carriers , and to air fares in Appalachia that are estimated to be 25 percent higher than would have been permitted by the CAB, prior to 1978. Studies by Stephenson and Beier, Chan, and Oster, while agreeing that service to smaller cities has been reduced, question the magnitude of and significance of this reduction. (6) The withdrawal of major carriers reduced the...