Order: 2014-4-1

Served: April 1, 2014

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 1st day of April, 2014

ORDER REQUESTING PROPOSALS

Summary

By this Order, the Department is requesting proposals from carriers interested in 

providing Essential Air Service (EAS) at Chatham and Funter Bay, Alaska, for a new

contract period, beginning October 1, 2014, with or without subsidy. (See Appendix A for

a map). Carriers should file their proposals no later than April 30, 2014.

Background

By Order 2012-9-2, September 4, 2012, the Department re-selected Ward Air, Inc. (Ward

Air), to provide subsidized EAS at Chatham and Funter Bay, Alaska, through 

September 30, 2014. Under that Order, Ward Air provides one round trip per month

between Chatham and Juneau; and one round trip per week between Funter Bay and 

Juneau. All of the service is provided on DeHavilland Beaver, Cessna 185, or Cessna 206 

aircraft, for a total combined annual subsidy rate of $23,936 in the first year ($11,040 for 

Chatham and $12,896 for Funter Bay), and $24,888 in the second year ($11,472 for 

Chatham and $13,416 for Funter Bay).

Request for Proposals

As the end of the current rate term approaches, we are here requesting proposals from 

carriers interested in providing EAS at Chatham and Funter Bay, Alaska, with or without 

subsidy, for a new contract period beginning October 1, 2014. Carriers should file their 

proposals no later than April 30, 2014. Staff will then docket the proposals, thereby 

making them public, and direct each carrier to serve a copy of its proposal on the civic 

parties and other applicants. Shortly afterwards, we will provide a summary of the 

proposals to the communities and ask them to submit their final comments. We will give 

full consideration to all proposals that are timely filed.1

 1 Carriers should not expect the Department to accept late fillings. In cases where a carrier proposes to 

provide EAS without subsidy and we determine that service can be reliably provided without such 

Essential Air Service at

CHATHAM, ALASKA

FUNTER BAY, ALASKA

Under 49 U.S.C. §41731 et seq.

DOCKET DOT-OST-1997-3134
Interested carriers should prepare their proposals with every expectation that their initial 

proposals will represent their final and only proposals. However, we retain the discretion 

to negotiate proposals with carriers when we deem it desirable. We also retain the 

discretion to reject outright all unreasonable or unrealistic proposals and re-solicit a new 

round of proposals. However, negotiation and rejection are only occasional exceptions to 

the rule.

We are here providing interested carriers with some basic information to serve as 

guidance when they prepare their proposals, but we will not prescribe a precise format for 

their proposals. We expect proposals to adequately describe the service being proposed 

and the annual amount of subsidy being requested. The applicants can make their own 

judgments as to the level of detail they wish to present; however, we recommend they 

include information concerning proposed schedules and projected block hours. In 

addition, applicants are urged to provide financial data supporting their subsidy requests, 

including information on their projected expenses and revenues. We strongly encourage 

clear, well-documented proposals that will facilitate their evaluation by the affected 

communities and the Department.2

With specific respect to Chatham and Funter Bay, we expect proposals consisting of 

service to Juneau with one round trip per month from Chatham, and one round trip per 

week from Funter Bay, all with small aircraft. We encourage proposals that meet these 

requirements in an efficient manner. Carriers are also welcome to propose more than one 

service option, if they choose; they need not limit themselves to those requirements if 

they envision other, potentially more attractive service possibilities (e.g., a different 

length of contract) with subsidy requirements that remain competitive. We encourage 

carriers to work with the communities as they prepare their proposals in order to craft 

them to best meet the communities’ needs. As always, we will fully consider the 

communities’ views before making a long-term carrier decision.

Filing Procedures

Carrier proposals should be submitted to the Department with all materials compiled into 

a single document. In addition, because the document will be published on 

http://www.regulations.gov/, each page should be formatted to be viewed online and for 

easy printing.

 

compensation, we typically do not proceed with the carrier-selection case. Instead, we simply rely on that 

carrier’s subsidy-free service as proposed.

2 In selecting a carrier to provide subsidized EAS for an eligible place in Alaska, 49 U.S.C. § 41733(c)(1) 

directs us to consider six factors: (a) service reliability; (b) contractual and marketing arrangements with a 

larger carrier at the hub; (c) interline arrangements with a larger carrier at the hub; (d) community views, 

giving substantial weight to the views of the elected officials representing the users; and (e) whether the 

carrier has included a plan in its proposal to market its service to the community, and ; (f) the experience of 

the applicant in providing, in Alaska, scheduled air service or significant non-scheduled service. In 

addition, the Consolidated Appropriations Act, 2014, Public Law No. 113-76, provides that when selecting 

a carrier to provide EAS, the Department may consider the relative subsidy requirements, thus codifying a 

factor that we have considered since the inception of the program. Interested carriers should also be aware 

that our general provisions governing Essential Air Service will be included in the selection Order as part of 

our authorization of subsidy for the selected service. Appendix C of this Order contains those general 

provisions.
Service and Traffic History

In order to assist carriers in making their traffic and revenue projections, we have 

included historical traffic data in Appendix B. As is typically the case in Alaska, 

significantly more freight and mail flow from the hub to the EAS communities than from 

the EAS communities to the hub. 

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing 

lobbying activities, drug-free workplaces, and nondiscrimination.3 Consequently, all 

carriers receiving Federal subsidy for EAS must certify that they are in compliance with 

Department regulations regarding drug-free workplaces and nondiscrimination, and those 

carriers whose subsidies exceed $100,000 over the life of the rate-term must also certify 

that they are in compliance with the regulations governing lobbying activities. Because 

the Department is prohibited from paying subsidy to carriers that do not submit these 

documents, all carriers that plan to submit proposals involving subsidy should be aware 

that the selected carrier will be required to complete the required certifications. Interested 

carriers requiring more detailed information regarding these requirements should contact 

the Office of Aviation Analysis at (202) 366-5903.4

Community and State Comments

The communities and State are welcome to submit comments at any time. As noted 

earlier, we will provide a copy of the proposals to the civic parties and ask them to submit 

their final comments shortly after April 30, 2014, the due date for proposals.

This Order is issued under authority delegated in 49 CFR 1.25a(b) and re-delegated to the 

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We request that carriers interested in providing EAS at Chatham and Funter Bay, 

Alaska, submit their proposals, with or without subsidy requests, no later than April 30, 

2014. The proposals should be e-mailed to: EAS@dot.gov with the title “Proposal to 

Provide Essential Air Service at Chatham and Funter Bay, Alaska, Docket DOT-OST1997-3134”;5

2. This docket will remain open until further order of the Department; and

 3 The regulations applicable to these areas are: (1) 49 CFR Part 20 -- New restrictions on lobbying; 

(2) 49 CFR Part 21 -- Nondiscrimination in federally-assisted programs of the Department of 

Transportation -- Effectuation of title VI of the Civil Rights Act of 1964; 49 CFR Part 27 --

Nondiscrimination on the basis of disability in programs and activities receiving or benefiting from Federal 

financial assistance; and 14 CFR Part 382 -- Nondiscrimination on the basis of disability in air travel; and 

(3) 49 CFR Part 29 -- Government-wide debarment and suspension (non-procurement) and governmentwide requirements for drug-free workplace (grants).

4 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.

5 Questions regarding filings in response to this Order may be directed to A.J. Muldoon at (202) 366-1058 

or albert.muldoon@dot.gov. 
3. We will serve copies of this Order on the Alaska Department of Transportation and 

the service list for this docket.

Persons entitled to petition the Department for review of this Order under the 

Department’s Regulations, 14 CFR 385.31(a), must file such petitions within seven (7) 

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

(SEAL)

An electronic version of this document is available

on the World Wide Web at http://www.regualtions.gov
APPENDIX A

Great Circle Miles

Chatham to Juneau 60

Funter Bay to Juneau 14

Chatham to Funter Bay 51
APPENDIX B

Historical Traffic at Chatham and Funter Bay, Alaska6

Passengers Freight (lbs.) Mail (lbs.) Passengers Freight (lbs.) Mail (lbs.) Passengers Freight (lbs.) Mail (lbs.)

2012 1Q 0 0 23 0 795 40 0 795 63

2Q 9 9 3 6 9 25 15 18 28

3Q 4 0 4 0 0 39 4 0 43

4Q 1 0 6 2 120 45 3 120 51

2013 1Q 0 0 18 0 895 45 0 895 63

2Q 1 0 5 4 0 54 5 0 59

3Q 1 0 9 1 0 113 2 0 122

4Q 3 0 13 0 684 165 3 684 178

Origin Destination Total

Chatham, AK

Passengers Freight (lbs.) Mail (lbs.) Passengers Freight (lbs.) Mail (lbs.) Passengers Freight (lbs.) Mail (lbs.)

2012 1Q 2 0 80 1 0 180 3 0 260

2Q 10 3 48 5 45 273 15 48 321

3Q 6 0 62 3 0 505 9 0 567

4Q 23 4 57 22 3 642 45 7 699

2013 1Q 8 23 39 4 0 266 12 23 305

2Q 12 0 20 8 0 325 20 0 345

3Q 0 61 34 8 4 395 8 65 429

4Q 3 0 18 2 0 411 5 0 429

Funter Bay, AK

Origin Destination Total

 6 Source: Bureau of Transportation Statistics; Form 41, Schedule T-100. 
1

APPENDIX C

Example of General Terms and Conditions for Essential Air Service

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 plans 

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 the 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 ensured 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 complete, 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 stipulated amounts 

or at the stipulated 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 Department and carrier do not 

constitute a total or partial reduction or cessation of payment. 

Funds may not be available for performance under this Order beyond [DATE]. The 

Government’s obligation for performance under this Order beyond [DATE], is subject to the 

availability of 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 [DATE], 

until funds are made available to the Department for performance. If sufficient funds are not 

made available for performance beyond [DATE], the Department will provide notice in writing 

to the carrier. 

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, including any amended claims, must be submitted within 90 days of the 

last day of the month for which compensation is being claimed. For example, claims for service 

provided in July must be filed by October 31st; August claims must be submitted by November 

30th, and so on.