Total Taxpayer Bill for Watertown–Denver Round Trip Flight: $11,063

An eager reader points us toward the U.S. Department of Transportation order selecting Aerodynamics Inc. as the subsidized provider of flights from Watertown to Pierre to Denver and back. That order provides data showing that we taxpayers are footing just about 75% of the bill for each flight.

Pierre Watertown
Destination Denver Pierre
Roundtrips per service day 2 2
Routes per week 12 12
Assumed completion 98.00% 98.00%
Annual adjusted block hours 1,524.69 787.93
Annual adjusted departures 1,228 1,228
Enplaned passengers 23,095 8,952
Mileage 385 159
Average fare 83.16 83.16
Passenger revenue 1,920,645 744,473
Miscellaneous revenue 48016 18612
Flight operations 579,337 99,796
Ownership 723,650
Maintenance 1,333,855 594,070
Reservations, stations, administration 1,757,055 846,554
Fuel 1,777,714 1,334,572
Marketing 12,000 12,000
Total annual expenses 6,183,611 2,886,992
Projected profit/(loss) -4,214,950 -2,123,907
Profit element 309,181 144,350
Annual subsidy required 4,524,131 2,268,257
Subsidy per departure 3,684 1,847
Subsidy per passenger 196 253
Subsidy/cost 73.2% 78.6%

Note that Aerodynamics Inc.’s projections assume that their 50-seat jets will carry an average of 7.3 passengers from Watertown and 18.8 passengers from Pierre. The $83.16 they plan to charge each of those passengers isn’t enough to pay for the fuel those planes will burn, let alone the ownership, maintenance, administration, and advertising costs. Plus, our subsidy covers an industry-standard 5% profit for Aerodynamics Inc.

With fewer passengers flying from Watertown, we taxpayers are paying less per flight but more per passenger from Watertown than from Pierre. Add up the subsidies per departure and multiply by two, and we taxpayers will spend $11,063 to fly each plane from Watertown to Pierre to Denver and back.

Update 10:08 CDT: An eager reader points out that the Watertown Public Opinion responded testily to KSTP’s unfavorable coverage of their new flight subsidy. Freedom Foundation of Minnesota CEO Annette Meeks called the Essential Air Service program’s subsidy of the Watertown–Denver route “another fleecing of the taxpayer.” WPO rebuts, “What the TV report failed to mention is that a large chunk of EAS funding comes from fees paid by foreign airlines for flying over U.S. air space.” True: according to the Congressional Research Service, overflight fee collections made up $108 million of the proposed $283 million in funding for EAS this budget year. Under that proposal, taxpayers would only pick up $175 million, or not quite 62% of the cost of EAS. Thus, the direct taxpayer share of each Watertown–Denver round trip would be $6,841.

But technically, if we weren’t using $4,222 in overflight fee collections (interesting, taxation without representation?) for each EAS-subsidized flight from Watertown, we could use that money for other government expenditures to alleviate our tax burden. So in a way, even those foreign dollars affect the money coming out of our pockets.

11 Responses to Total Taxpayer Bill for Watertown–Denver Round Trip Flight: $11,063

  1. Nick Nemec

    I’ve flown the Denver-Pierre flight many times and would be surprised if Pierre boardings ever reach the 19 passenger estimate. I suspect many Watertown passengers headed east will opt to drive to Minneapolis-St. Paul and take a flight from there rather than fly all the way to Denver before heading to their East Coast destination.

  2. These prices are so cheap they are likely creating demand to go to Denver that would not otherwise be there. Essentially creating a want rather than meeting a need.

  3. $11,000 could provide a lot of meals and a lot of shelter to families in need. However I’m continually reminded by my conservative friends that Welfare leads to people not wanting to find work.

    So when we hand out welfare to frequent fliers does it make them not want to drive?

    What a joke. Millions of taxpayer dollars funneled to the privileged and we get press releases about it from our Congresswoman as if this is a good thing. It is just another form of welfare for those least in need.

  4. Craig, exactly! When it helps me it is an “essential service”; when it doesn’t directly help me, it is welfare for the “takers.” The true beneficiary is the company doing the flying – they make the money in a subsidized market that “market forces” and “free trade” have already spoken to.

  5. Roger Elgersma

    Craig, Exactly! When Motel 8 moved their headquarters to Aberdeen about twenty years ago they bought their own planes and were impressed that they had no layovers. The less short flights you take the less layover time spent and that layover could go well to offset driving time. The market can balance this out better than the tax payer can.

  6. Medicaid Expansion should be an “essential service”, but not in republican lala land. There has to be some corruption in here to make it worthwhile for the venture. Where is Joop and his sidekick, Rounds on how to screw the taxpayer.

  7. KSTP is right and the WPO is wrong. I am gold status with a major carrier. I will keep flying out of FSD or FAR. This 11,000 a flight could have prevented a one half percent sales tax increase. once the subsidiary is expired so will ADI. The Watertown Mayor and Council should be embarrassed.

  8. Ror is right: if Aberdeen had an $83 flight to Denver, I’d strongly consider flying there on a lark. It is unlikely that folks in Denver are going to leap at an $83 ticket for a lark to Watertown, except maybe during hunting season. I would love to survey travelers, find out how many go to Denver to spend money and how many come from Denver to spend money here. That would be an interesting comparison of economic gain versus economic drain. Then add a survey of reasons for travel: how many flyers are going for recreation, and how many are traveling for more substantial, ongoing economic development reasons—e.g., how many flyers are CEOs coming for business expansion talks, how many are using the flights to expand their markets.

  9. SD is a big fat welfare queen. True Conservatives are few and far between. SD takes way more federal dollars than MN. Pigs.

  10. Sam2, I agree in spirit, but the total subsidy, $6.8 million, is only a small fraction of the $100M+ sales tax increase passed this year in HB 1182 for teacher pay.

    I also am interested to see if Aerodynamics Inc can build the market enough to continue service after the subsidy ends. We set time limits on unemployment benefits and other welfare for individuals; shouldn’t corporations also be expected to get off the dole and fly on their own two wings?

  11. I like to hear the blathering of our three circus clowns about the national debt and how “terrible” it is. This helps to prove, without a doubt, our clowns could care less about debt and that proves they are what they are, obstructionists. The idea that our clowns* would block development of economic development for other states and for other regions and then take subsidy money for this shows how fake they really are. The vast majority of other projects requesting federal money for development that would surely be more cost effective that our clowns* deny, is breath taking. John Thune, number 2 clown, voted against Hurricane Sandy relief and then begged for dollars for the Atlas snow storm. Our clowns steal as much as they can and then greedily keep others from getting relief. Fly the friendly sky’s of the hypocrites.

    * NOem
    * Thune
    * Rounds