Airlines Eye Additional Onboard Ads

On a recent East Coast U.S Air flight I came across this advertisement for Verizon on my tray table. This addition to the U.S Airways fleet, which began several months ago, is expected to provide additional revenue to the airline and help curb the high cost of fuel.

The idea and location of the ads, which at first glance seem a bit comical when lowering the tray table, are anything but funny for a suffering airline industry desperately to again fly high.

With the recent drop in fuel prices, can we still expect advertisement-covered tray tables to encroach on your airline of choice?

Possibly so.

Although the worst seems to be over for airlines' record high fuel costs, it has prompted an industry-wide reaction on methods to increase revenue, without necessarily raises the base cost of airline tickets. If passengers find the advertising on U.S Airways flights is not overly intrusive, it may go over well, and thus adopted by other airlines.

Although advertising revenue from tray tables will not alleviate all the financial pains of the airlines, it is one of many steps the airlines can take to move in the direction of profitability.

What is the Essential Air Service Program?

By Mike Grasso

Back in the late 1970's with airline deregulation, air carriers had much freedom to choose which domestic routes they wanted to fly. Favoring larger markets which offered high passenger loads and yielding higher returns often meant bypassing services to smaller communities.

So the government stepped in and introduced the Essential Air Service Program (EAS). Rural cities distanced more than 70 miles from a medium or large commercial airport qualified for a partial federal subsidy. Greater than 210 miles - no cap on the governments subsidy. So while United Airlines/Skywest Airlines may not want to provide air service from San Francisco to Crescent City, on the far north coast, a nice kickback from the government helps them reconsider.

Approximately 140 cities across the United States are part of the EAS program, mostly throughout the Midwest and Alaska. In California, SkyWest Airlines to Crescent City, and Air Midwest, serving Visalia and Merced, receive federal funds of up to $1 Million each year.

Opponents of the program say having service to rural communities promotes business opportunities, and better connects people to the rest of the country.

Critics say the essential air program is actually unessential, citing many flights actually depart with only a couple passengers, an unnecessary government expenditure. They also argue that since the program was developed nearly 30 years ago, regional airports have absorbed much of the demand coming from rural areas, making this program unnecessary.

Related:

AirMidwest to suspend operations by June 30th.