USPS subsidy proposed for cuts ‘absolutely critical’ for Alaskan airfreight

Alaska’s bypass mail program could soon be abandoned on the cutting room floor, but airlines with cargo operations in the state say that would be disastrous for the state’s freight connectivity. Louis DeJoy, the controversial U.S. postmaster general proposed cutting Alaska’s Bypass Mail program during an Aug. 21 Senate hearing on the USPS. The proposal would add to a series of cost-saving measures implemented by DeJoy since his appointment to the position in May 2020. The Alaska Bypass Program helps subsidize the cost of mail delivery in Alaska, with shippers paying a portion of normal costs for remote shipments by air and the USPS subsidizing the remainder. As a subsidy program, the Bypass is a net loss in financial terms for the USPS, according to a 2014 congressional hearing on the program. However, given the importance of air cargo in serving many remote communities in the northernmost U.S. state, cargo carriers operating within the state told Air Cargo World that the subsidy is crucial for both passenger and cargo service in a state where many communities are accessible only by air during parts of the year. Carriers, as well as politicians in favor of the subsidy like Alaska Congressman Don Young , also argue that without the program, mail operations in Alaska would be more expensive and less efficient. The post office is the largest customer of Anchorage-based Northern Air Cargo (NAC), General Manager Gideon Garcia told Air Cargo World . NAC operates a small fleet of 737 and 767 freighter aircraft and flies mail to communities within the state of Alaska. Garcia said the bypass subsidy is “absolutely critical to Alaskans who do not live on the road system,” and “a vital part of ensuring all Americans receive postal services as specified by the U.S. Constitution.” “One thing that many folks don't understand about Alaska is that there are locations — villages, towns — that do not have road access, and you cannot get there except by airplane or by boat, and boat is only accessible in the times when there's no ice,” explained Garcia. “So the markets we serve, we can serve year-round through air.” Seattle-based Alaska Airlines, which operates three 737 freighters and more than 100 passenger aircraft despite reduced passenger demand amid the COVID-19 pandemic, agreed that the Bypass program is important for the viability of cargo service within its market. Of the 21 communities Alaska Airlines serves in Alaska, only three are part of a road system in the state. “The current program is much more efficient and cost-effective for the USPS because it eliminates the extra handling and delivery of goods to areas in rural Alaska,” according to a statement from the carrier’s cargo division. “An important objective of the 2002 Rural Services Improvement Act expressly provided that Bypass Mail revenues are to be used to support passenger, as well as mail, service to many isolated rural communities.” While the decline of passenger demand during Alaska’s typically busy summer tourist season has curtailed air networks within the state, NAC’s Garcia said the pandemic has had a limited impact on interstate mail cargo beyond the bankruptcy of regional passenger carrier RavnAir . The airline operated to more than 100 communities within Alaska and offered some capacity for carrying small amounts of mail and cargo. Garcia said NAC absorbed some of those volumes when RavnAir stopped operations, but that may not be the case for long, as RavnAir is planning a comeback after reorganizing under new ownership. Regulatory filings during the carrier's reorganization suggest its intention of resuming service to several remote communities in Alaska. “We’re all looking forward to seeing what that looks like,” added Garcia.

USPS subsidy proposed for cuts ‘absolutely critical’ for Alaskan airfreight

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