**Order 2008-7-9**

**Served: July 9, 2008**

**UNITED STATES OF AMERICA**

**DEPARTMENT OF TRANSPORTATION**

**OFFICE OF THE SECRETARY**

**WASHINGTON, D.C.**

Issued by the Department of Transportation

  -----------------------------------------------------------------------
  on the 3^rd^ day of July, 2008

  -----------------------------------------------------------------------

+---------------------------------------+------------------------------+
| Essential Air Service at              | **Docket DOT-OST-1997-2605** |
|                                       |                              |
| **LEWISTOWN, MONTANA**                |                              |
|                                       |                              |
| **MILES CITY, MONTANA**               |                              |
|                                       |                              |
| **SIDNEY, MONTANA**                   |                              |
|                                       |                              |
| Under 49 U.S.C. 41731 *et seq*.       |                              |
+---------------------------------------+------------------------------+

**ORDER APPROVING AN ALTERNATE SERVICE PATTERN**

## Background

By Order 2007-12-22, December 21, 2008, the Department selected Great
Lakes Aviation, Ltd., Inc. (Great Lakes), operating as operating as both
a United Airlines and Frontier Airlines code-share partner, to provide
subsidized essential air service (EAS) between seven Montana
communities, including Lewistown, Miles City and Sidney, and Billings,
utilizing 19-seat Beech-1900D aircraft, for a two-year period at annual
subsidy rate of \$8,201,992 for all seven communities. Great Lakes'
original proposal offered the prospect of later changing the
communities\' hub from Billings to Denver if such a change could be
agreed upon with the communities.

While the Department has encouraged Great Lakes to begin service as soon
possible since issuing Order 2007-12-22, the carrier has faced hurdles
in acquiring the necessary aircraft and hiring and training crews. Great
Lakes has not yet commenced service at any of the seven Montana
communities.

**Great Lakes' Proposal**

On May 29, 2008, the Department received a copy of letter from Great
Lakes to the Montana EAS Task Force detailing the impact of increased
fuel costs on Great Lakes' proposal to provide EAS at the seven Montana
communities, including Lewistown, Miles City and Sidney, and suggesting
that it would be "willing to consider living with its current assigned
rates, so long as it receives fully community support to transition
Lewistown, Miles City and a portion of the Sidney flying to its Denver
hub." On July 2, 2008, Great Lakes confirmed its intent to change in the
communities\' hub from Billings to Denver, with the Department.
Specifically, Great Lakes service would constitute the same frequency
level as detailed in Order 2007-12-22: 12 at Lewistown; 12 at Miles
City; and 17 at Sidney; however, all service would be one stop over
intermediate points of its choosing in Wyoming and Nebraska. Great Lakes
intends to begin this new service pattern on or about September 3, 2008.

**Community Comments**

Representatives from the Montana Department of Transportation and the
communities have stressed the importance of EAS to their respective
communities. On May 29, 2008, the communities and State informally
expressed (via a conference call) their support for Great Lakes' revised
proposal, noting that are eagerly awaiting the resumption of EAS at
their respective communities.

**Decision**

We will approve Great Lakes' request, which meets the three conditions
necessary for approval under authority assigned under 14 CFR
395.12(k)(3) of the Department's Regulations: (1) the alternate service
pattern is equal to or greater than that determined to be essential; (2)
the community does not object to the alternate service pattern; and (3)
the alternate service pattern will not increase Great Lakes' subsidy.
Great Lakes may revert to its originally proposed pattern described in
Order 2007-12-22 should the new service pattern fail to generate the
revenue needed to cover its costs. As always, we encourage communities
and carriers to continue to work together to optimize the service
patterns. We also remind Great Lakes that Order 2007-12-22 awarded the
EAS contract to the carrier at all seven Montana communities and Great
Lakes' amended proposal, while proposing the Denver hub for Lewistown,
Miles City and Sidney, also was predicated on the other four receiving
service to Billings. We expect service at the remaining four communities
to commence as soon as possible.

This order is issued under authority assigned in 14 CFR 385.12(k)(3).

## ACCORDINGLY,

1\. We approve the alternate service pattern requested by Lewistown,
Miles City and Sidney, Montana, as detailed in Appendix A;

2\. These dockets will remain open until further order of the
Department; and

3\. We will serve a copy of this order on the parties listed in
Appendix B.

Persons entitled to petition the Department for review of this order
under the Department's Regulations, 14 CFR 385.30, must file such
petitions within ten days after the date of service of this order.

This order will be effective immediately, and the filing of a petition
for review shall not preclude its effectiveness.

By:

> **TODD M. HOMAN**
>
> Director
>
> Office of Aviation Analysis

(*An electronic version of this document is available in the Federal
Docket Management System (FDMS) at
[http://www.regulations.gov](http://www.regulations.gov/)*

**Great Lakes Aviation, Ltd.**

**Provision of Essential Air Service at Lewistown, Miles City and
Sidney, Montana**

**[Alternate Service Pattern Summary]{.underline}**

+-----------------------+----------------------------------------------+
| [Effective            | Immediately, and running through the 24^th^  |
| Period]{.underline}:  | full month after Great Lakes begins full EAS |
|                       | at all seven Montana communities.            |
+-----------------------+----------------------------------------------+
| [Scheduled            | **[Lewistown:]{.underline}** 12 one-stop     |
| Service]{.underline}: | round trips to Denver each week.             |
|                       |                                              |
|                       | **[Miles City:]{.underline}** 12 one-stop    |
|                       | round trips to Denver each week.             |
|                       |                                              |
|                       | **[Sidney:]{.underline}** 17 one-stop round  |
|                       | trips to Denver each week.                   |
+-----------------------+----------------------------------------------+
| [Intermediate Stops   | **[Lewistown:]{.underline}** An intermediate |
| and upline            | stop is permitted in either Wyoming or       |
| service:]{.underline} | Nebraska.                                    |
|                       |                                              |
|                       | **[Miles City:]{.underline}** An             |
|                       | intermediate stop is permitted in either     |
|                       | Wyoming or Nebraska.                         |
|                       |                                              |
|                       | **[Sidney:]{.underline}** An intermediate    |
|                       | stop is permitted in either Wyoming or       |
|                       | Nebraska.                                    |
|                       |                                              |
|                       | No service to any other points are           |
|                       | contemplated under the terms of the          |
|                       | carrier's proposal; accordingly, no such     |
|                       | service may be provided on subsidized        |
|                       | flights without prior Department approval.   |
+-----------------------+----------------------------------------------+
| [Aircraft             | Beech 1900D (19 passenger seats).            |
| type:]{.underline}    |                                              |
+-----------------------+----------------------------------------------+
| [Timing of            | Flights must be well-timed and well-spaced   |
| flights:]{.underline} | in order to ensure full compensation.        |
+-----------------------+----------------------------------------------+
| [Subsidy Rate per     | **[Lewistown:]{.underline}** \$849.34[^1]    |
| Arrival/De            |                                              |
| parture]{.underline}: | **[Miles City:]{.underline}** \$865.34[^2]   |
|                       |                                              |
|                       | **[Sidney:]{.underline}** \$1,248.32[^3]     |
+-----------------------+----------------------------------------------+
| [Weekly Compensation  | **[Lewistown:]{.underline}** \$20,384.16[^4] |
| Ceiling par           |                                              |
| Co                    | **[Miles City:]{.underline}**                |
| mmunity:]{.underline} | \$20,768.16[^5]                              |
|                       |                                              |
|                       | **[Sidney:]{.underline}** \$42,442.88[^6]    |
+-----------------------+----------------------------------------------+

**NOTE:**

The carrier understands that it may forfeit its compensation for any
flights that it does not operate in conformance with the terms and
stipulations of the rate order, including the service plan outlined in
the order and any other significant elements of the required service,
without prior approval. The carrier understands that an aircraft
take-off and landing at its scheduled destination constitutes a
completed flight; absent an explanation supporting subsidy eligibility
for a flight that has not been completed, such as certain weather
cancellations, only completed flights are considered eligible for
subsidy. In addition, if the carrier does not schedule or operate its
flights in full conformance with this order for a significant period, it
may jeopardize its entire subsidy claim for the period in question. If
the carrier contemplates any such changes beyond the scope of the order
during the applicable period of these rates, it must first notify the
Office of Aviation Analysis in writing and receive written approval from
the Department to be assured of full compensation. Should circumstances
warrant, the Department may locate and select a replacement carrier to
provide service on these routes. The carrier must complete all flights
that can be safely operated; flights that overfly points for lack of
traffic will not be compensated. In determining whether subsidy payment
for a deviating flight should be adjusted or disallowed, the Department
will consider the extent to which the goals of the program are met and
the extent of access to the national air transportation system provided
to the community.

If the Department unilaterally, either partially or completely,
terminates or reduces payments for service or changes service
requirements at a specific location provided for under this order, then,
at the end of the period for which the Department does make payments in
the agreed amounts or at the agreed service levels, the carrier may
cease to provide service to that specific location without regard to any
requirement for notice of such cessation. Those adjustments in the
levels of subsidy and/or service that are mutually agreed to in writing
by the parties to the agreement do not constitute a total or partial
reduction or cessation of payment.

Funds are not currently available for performance under this Order
beyond September 30, 2008. The Government's obligation for performance
under this Order beyond September 30, 2008 is contingent upon the
availability of appropriated funds from which payment for services can
be made. No legal liability on the part of the Government for any
payment may arise for performance under this Order beyond September 30,
2008, until funds are made available to the Department for performance. 
If funds are not made available for performance beyond September 30,
2008, the carrier will receive notice in writing from the Department.

Subsidy contracts are subject to, and incorporate by reference, relevant
statutes and Department regulations, as they may be amended from time to
time. However, any such statutes, regulations, or amendments thereto
shall not operate to controvert the foregoing paragraph.

All claims for payment must be submitted within 60 days of the last day
of service provided under this order.

**SERVICE LIST**

The Honorable Chris Grenz

Mayor, City of Miles City

P.O. Box 910

17 S. 8th Street

Miles City, Montana 59301

Mr. Kevin Myhre

City Manager

City of Lewistown

305 W. Watson Street

Lewistown, Montana 59427

Mr. John Rabenberg

Chairman

Essential Air Service Task Force

643 Remuda Creek Road

Fort Peck, Montana 59223

The Honorable Bret Smelser

Mayor, City of Sidney

115 Second Street Southwest

Sidney, Montana 59270

[^1]: Annual compensation of \$2,073,232 divided by 2,441 annual
    arrivals and departures at 97.5 percent completion factor,
    calculated as follows: 8 departures x 313 service days x .975 =
    2,441.

[^2]: Annual compensation of \$2,112,304 divided by 2,441 annual
    arrivals and departures at 97.5 percent completion factor,
    calculated as follows: 8 departures x 313 service days x .975 =
    2,441.

[^3]: Annual compensation of \$2,159,591 divided by 1,730 annual
    arrivals and departures at 97.5 percent completion factor,
    calculated as follows: 6 departures x 261weekdays x .975 = 1,527 + 4
    departures x 52 weekends x .975 = 203; 1,730+203 = 1,730.

[^4]: Subsidy rate per arrival/departure of \$849.34 multiplies by 24
    subsidy-eligible arrivals and departures each week.

[^5]: Subsidy rate per arrival/departure of \$865.34 multiplies by 24
    subsidy-eligible arrivals and departures each week.

[^6]: Subsidy rate per arrival/departure of \$1,248.32 multiplies by 34
    subsidy-eligible arrivals and departures each week.