Stevens: Mail bills still alive

Posted: Friday, December 28, 2001

ANCHORAGE - Legislation to reform Alaska's rural mail system failed to move forward in Congress this year but will be revived next session, U.S. Sen. Ted Stevens said Thursday.

A bill introduced in mid-November by Stevens is similar to a measure sponsored by U.S. Rep. Don Young. Both Alaska Republicans' bills would redesign what's called the bypass mail system as it applies to mainline and Bush carriers that haul mail and cargo throughout the state.

Stevens said he considered last-minute attempts to attach the legislation to a number of bills.

"It was stalled by opposition from portions of the industry here that are part of the problem," he said during a visit to Anchorage.

Some critics have said the proposed changes would hurt small carriers and overall service to rural Alaska. Other carriers say changes are necessary to improve mail and passenger service in the Bush.

The present system, designed by Stevens three decades ago, is named because it generally bypasses post offices. Four mainline carriers - Alaska Airlines, Northern Air Cargo, Lynden Air Cargo and Air Cargo Express - fly larger shipments or cargo-passenger combinations from Anchorage and Fairbanks to Bush hubs such as Bethel, Barrow and Nome. From there, shipments are divided, then distributed by smaller planes to villages.

Shippers pay parcel post, which is usually cheaper than air freight. The Postal Service reimburses air carriers at a rate designed to cover industry costs, plus a profit.

The problem with the present system, Stevens said, is that some companies are flying the mail and collecting the subsidy but are not carrying many passengers or much freight as designed by the bypass mail program. Stevens said smaller villages are suffering because of it, and the Postal Service lost $100 million on the bypass system this year.

"The mail was intended to go on planes that carry passengers," he said. "The Postal Service has said if we don't reform the system, they'll have to do away with it."

The pending legislation gives priority for Bush routes to passenger carriers. They would share 70 percent of the mail if they provided 20 percent of the passenger service on a given route. Under the present system, there's no passenger minimum, according to Stevens' staff.

Frontier Flying Service is among the rural carriers that support the bills. "If nothing changes, we can still play the game," said Bob Hajdukovich, president of the Fairbanks-based carrier. "But eventually the present system will self-destruct."

New carriers generally would be barred from carrying bypass mail on mainline routes if they carry cargo only. Among the few exceptions, they would be allowed if existing service deteriorated to the point of necessity or if a given route needed passenger service and they were willing to carry passengers.

Mike Hart, president of Lynden Air Cargo, said such a change is necessary because there are too many carriers in the market.

"It would be healthy for the industry," he said. "And it would mean more security for carriers that are already in it."

However, that kind of arrangement would exclude Evergreen Aviation, which has operated in Alaska for 40 years, according to Jerry Rock of the Anchorage company. Rock said Evergreen has flown mail to Southeast Alaska for nine years under a special contract with the Postal Service. The company also wanted to carry mail on mainline routes.

Changing the rules would eliminate those opportunities, according to Rock.

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