The Deregulation Act of 1978 allows airlines freedom to introduce, increase, and reduce or eliminate service to existing markets. Under the Essential Air Service Program, which is administered by the U.S. Department of Transportation ("DOT"), certain communities that received scheduled air service prior to the passage of the Deregulation Act are guaranteed specified levels of "essential air service." The DOT may authorize federal subsidies to compensate a carrier for providing essential air service in otherwise unprofitable or minimally profitable markets.
Mesa serves several subsidized Essential Air Service communities in several of its divisions. Mesa also serves a number of unsubsidized Essential Air Service communities. The Essential Air Service subsidy orders are normally issued for a period of one or two years.
An airline providing essential air service is required to give the DOT ninety days advance notice before it may terminate or reduce service. The DOT may require the continuation of existing service until a replacement carrier is found, but in that event it must compensate the carrier for actual losses sustained in continuing to serve the community during this period.