Colgan recently asked to get out of contracts serving six cities in West Virginia, Maine and Pennsylvania, but it hopes to rebid for those contracts and ask for a greater subsidy to reflect the surge in fuel prices.
That's currently the only way an airline can adjust a subsidy contract for higher fuel costs -- ask to get out of its obligation, wait 180 days as the department mulls the request and then rebid for the contract, Malarkey said.
"It really is just about the worst thing you can do to the service," she said. "You've got the community up in arms. They don't quite understand. The airline seems to be abandoning them."
The Regional Airline Association has called for changes to the subsidy program for several years, so that airlines wouldn't have to struggle to make rural flights profitable. Malarkey said the Department of Transportation should boost subsidies to allow for higher profit margins and give airlines a one-time grant to pay for the rise in fuel costs.
A Transportation Department spokesman said the agency agrees there's need for reform but is not in favor of creating flexible subsidies to reflect the rising cost of fuel. Its solution is to limit subsidies to only the most isolated communities.
"EAS reform is needed to ensure the program serves the people it was designed to serve -- those who have no other viable travel options," spokesman Bill Mosely said in a statement.
The Essential Air Service program was created 30 years ago after the airline industry was deregulated. Carriers weren't going to fly unprofitable routes to tiny communities, so the federal government agreed to pay some of their costs.
Communities now consider them a lifeline. Subsidized flights encourage businesses to expand outside urban centers, and they give residents quick access to medical centers and international airline hubs in bigger cities.
"It's a necessity, not a luxury," said W. Gary Edwards, a town supervisor in Massena, N.Y., a community of about 11,500 near the U.S.-Canada border. Edwards said Big Sky Airlines pulled out of town in November, and Massena is now waiting for new service from Capital Air Services Inc. to begin in September.
"We're all the way at the top of New York state," Edwards said. "We don't have a four-lane highway. All our roads up here are country roads."
Prescott, Arizona's former territorial capital, is wedged between national forests about 100 miles north of Phoenix Sky Harbor International Airport.
It's grown into a haven for wealthy retirees, luring them out of cities with its promise of mountain views, ample hiking trails and clean air. About 129,000 people now live within 20 miles of the Prescott Airport -- enough to expect decent air service, said Gary Buck, president and CEO of a vision technology company in the town.
"Right now, you have a choice to take an airport shuttle to Phoenix, or you could drive directly," Buck said. "It takes about two hours each way. It's just a pain."
Buck's company, Visual Pathways Inc., requires him to travel out of the city about four times a month and bring in clients two or three times a month. He used to fly Air Midwest, though the service was unreliable. The last time Buck entrusted the carrier with his travel plans, he returned in a bus.
"They said it was a mechanical error," he said. "They always say that."
Buck said Prescott deserves a variety of carriers, each competing for business.
That may be a far-flung hope, given the price of fuel and state of the airline industry. But Prescott officials said they'll keep their plans to expand the runway and ask other regional carriers to fly into the airport.
Great Lakes Aviation also has offered to replace Air Midwest, and in September, Horizon Airlines is expected to return commercial flights to Prescott with service to Los Angeles International Airport.
Without air service, "are people going to stay here?" Mayor Wilson said. "No. If we lose the airline, we start losing people. We lose businesses as well."