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Archive for Sunday, August 6, 2006

FAA closes investigation of AirTran subsidies

August 6, 2006

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— More than a year after it began, the Federal Aviation Administration's investigation into how the city of Wichita subsidizes AirTran Airways has ended, city officials said.

City Atty. Gary Rebenstorf told the City Council Friday that the FAA probably closed the investigation because AirTran's agreement with the city ended in May, making the investigation moot.

The closure would resolve lingering fears that Wichita Mid-Continent Airport could risk losing millions of dollars in federal grants if investigators determined officials had violated the grants' conditions.

Delta asked for the investigation in early 2005 after complaining Wichita was offering subsidies to AirTran, which, like Delta, has flights to Atlanta.

One of the conditions in FAA grants prohibits what it calls "economic discrimination."

The FAA said the city had to abide by that condition since it controls Mid-Continent Airport.

But the city disagreed, saying AirTran had generated so much additional traffic to Mid-Continent because of its lower fares that it also generated more business for Delta and other airlines.

Officials also said they weren't violating any rules because the airport authority was a separate entity from the city.

FAA officials, however, said the city was still responsible because the city council doubles as the airport authority, the city manager oversees the airport director and the mayor or city manager sign off on all federal grants.

The city's subsidy of AirTran expired in May, with Sedgwick County taking over the program. Because the county isn't an airport sponsor, it's not bound by the same federal grant rules.

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