If you're of a certain relatively youthful age, you may not know that prior to 1978, airlines were regulated. As Alana Semuels recaps in a lengthy piece for Time, until that point the government "saw airlines as an essential service, kind of like the post office." The Civil Aeronautics Board was the federal agency that determined the routes airlines had to fly and the fares they could charge, and the idea behind deregulation was that competition would increase and air travel would get even cheaper. The opposite has come to pass, and Semuels argues that America's small cities are among the biggest victims. She points to the situation in Cheyenne, Wyoming, which lost commercial air service in 2018 when Great Lakes Airlines, which served it, filed for bankruptcy.
The 96,000-person metro area had two options: Go without, or woo an airline with what's known as a "minimum revenue guarantee." It went with the latter and ended up inking a deal with SkyWest that will see it pay the airline $2.5 million this year to service the airport. "The alternative is bleak," Semuels writes, noting that since 2019, 14 US airports were dropped by all commercial providers; a study found American, Delta, and United have ended flights to a combined 68 cities since April 2020. Forking over millions to airlines that make billions "may seem irrational on its face," but the reality is that the blow to business, tourism, and population growth that can result is a very real concern. As one industry expert puts it, "Air service is one of the most critical economic development tools in the tool chest." (Read the full story for much more.)