... was the focus of an audit released this month from the Office of the Inspector General at the U.S. DOT. The report isn’t good news, though it does offer insight into how small communities can better achieve success with such federal grant monies.
Since 2001, DOT’s Office of Aviation Analysis (OAA) has administered the SCASDP. The objective of the audit, says the I.G., was to determine the effectiveness of SCASDP in helping small-hub and non-hub communities in achieving sustainable air service. To achieve this objective, the I.G. reviewed SCASDP grants to determine: 1) which grants succeeded and which ones failed; and, 2) whether certain project characteristics or project types lead to a greater likelihood of grant success.
The audit found that 70 percent of the grants reviewed failed to fully achieve their objectives. Specifically, 50 percent of the grants were unable to achieve any of the articulated grant objectives, 12.5 percent were voluntarily terminated prior to any substantive progress being achieved; and, 7.5 percent were unable to obtain or achieve all the grant objectives. The I.G. also found that grants targeting the introduction of new service rather than the expansion of existing service were more successful (50 percent versus 20 percent). Revenue guarantees for new service were more successful than for existing service (56 percent versus 33 percent) and marketing grants for new service were more successful than for existing service (40 percent versus 12 percent).
The I.G. also points out that communities may not be able to fully utilize the program due to ‘same project limitation’, which precludes a community from pursuing follow-on grants using grant strategies that have worked for them in the past. The lack of funding flexibility may negatively impact the effectiveness of the program, says the I.G.
Perhaps the most significant point of the audit is the I.G.’s assertion that communities which conduct in-depth market analysis and support their grants through substantive financial and non-financial support are more likely to succeed. Accordingly, the I.G. recommends that OAA give priority to those communities that include an in-depth market analysis with their grant application and involve substantive levels of financial and non-financial community participation. The I.G. notes a strong correlation between communities that had performed a market study and those who had successfully enhanced their existing air service.
Whether or not the SCASDP is continued is up for debate – that is, the debate that never seems to get off the ground in Congress regarding aviation funding. The Bush Administration opposes the program. The minor victories associated with the SCASDP suggest such a program can help small communities, but they should first study the Inspector General’s list of ‘lessons learned’ before applying.
Of course, considering the state of the U.S. airline industry, it may all be a moot point.
Thanks for reading. jfi