### Order: 2010

- 3

- 22 Served: March 17, 2010



## UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 17 th 

### day of March, 2010

Essential Air Service at

CRESCENT CITY

, CALIFORNIA

Under 49 U.S.C. 41731 et seq

. DOCKET OST

- 1997

- 2649

ORDER REQUESTING PROPOSALS Summary By this order, the Department is requesting proposals by April 19

, 2010

, from carriers interested in providing essential air service (EAS) at Crescent City

, California

, for a new

two

- year period, beginning August 1 , 2010

, with or without subsidy.

Background By Order 2008

- 4

- 23

, April 15, 2008 , the Department selected SkyWest Airlines, Inc. , d/b/a United Express ( SkyWest )

, to provide subsidized EAS to Crescent City

, California

, through

Ju ly 3 1 , 2010

. Under that order, the Department authorized subsidy for SkyWest consisting

of twelve nonstop round trips per week to San Francisco

, California, and six one

- stop round trips to Sacramento

. All of the service was to be with 3 0

- seat Brasilia aircraft for an annual

subs idy of $1,136,896

.

Request for Proposals As the end of the current rate term approach es , we are here by requesting proposals from carriers interested in providing service at Crescent City

, with or without subsidy, for the

two

- year period beginning August 1 , 2010 . Carriers should file their proposals by April

19

. S taff will then docket 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 prov ide a summary of the proposals to the community and S tate and

as k them to submit their final comments. We will give full consideration to all proposals filed in a timely manner. 1



### Interested carriers should prepare their proposals with every expectation that their initial proposals will also be their final and only proposals. We retain the discretion to negotiate

1 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide essential air service without subsidy and we determine that service can be reliably provided without such compensation, we do not proceed with the carrier

- selection case. Instead, we simply rely on that carrier’s subsidy

- free service as proposed.

### - 2

-

proposals with carriers when we deem it desirable. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and , if necessary, solicit a new round of proposals. However, we anticipate that negotiation or rejection will remain 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 judgm ents as to the level of detail they wish to present; however, they might want to include proposed schedules as well as supporting data for their subsidy requests, such as projected block hours, revenues and expenses. We strongly encourage clear, well

docu mented proposals that will facilitate their evaluation by the affected community and the Department. We do not anticipate any change in our selection criteria, or in the general provisions governing subsidy payments for essential air service. 2



### In order to assist carriers in making their traffic and revenue projections, we have included historical traffic for the community in Appendix B. A s can readily be seen from Appendix B , passengers overwhelmingly use the nonstop flights to San Francisco compared t o the one

- stop service to Sacramento. The San Francisco flights average 1 5 passengers while the Sacramento service averages only 4 pass engers per fli ght. Carriers may propose service corresponding to the historical service pattern, service to both San

Fr ancisco and Sacramento, but we will look closely at substituting two more round trips a

week to San Francisco (14 a week) in lieu of the little

- used service to Sacramento. Service should be to San Francisco or any other suitable hubs with connecti ons to t he national air transportation system.

Service should be with two

- pilot, twin

- engine aircraft, with at least 15 passenger seats. We request proposals for up to two nonstop round trips a day (14 per week), with 3 0

- seat or larger aircraft. If the seats are shared with another community, 3

2 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c) (1) directs us to

consider four factors: (1) service rel iability; (2) contractual and marketing arrangements with a larger carrier at the hub; (3) interline arrangements with a larger carrier at the hub; and (4) community views. In

addition

, The Consolidated Appropriations Act, 2008, Public Law 110

- 161, provid es 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 p rovisions 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. 

### we would consider three round trips a day (18 per week ) . If service is with 19

- seat aircraft and does not share seats with another community, we would consider propos als for three round trips a day (18 a week)

. We wou ld also consider proposals with eight

- or nine

- seat aircraft and

five or six round trips a day (30 or 36 a week ) , and service should be nonstop to the hub

. If such a proposal is submitted and the community ultimately supports the service and

waives their r ight to 15

- seat or larger aircraft , we would consider the waiver to apply only

to the two

- year carrier

- selection at hand, i.e., rather than for all time. As always, we will formally solicit the community’s views on any service options we receive before ma king a long

- term

, carrier

- selection decision. The community and air carriers are encouraged to

3 Crescent City currently has a total of 12 n onstop round trips a week to a hub and six one

- stop round trips per week to another hub.

### - 3

-

work together in advance of the due date for proposals to craft a service pattern that is both desirable to the community and meets the operational needs of the airline.

We encourage proposals that meet th e se requirements in an efficient manner. As we have mentioned, c arriers are welcome to propose more than one service option, if they choose; they need not limit themselves to those requirements if they envisio n other, potentially more attractive service possibilities

– different hubs, for example

– with subsidy requirements that remain competitive.

Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing

lobb ying activities, drug

- free workplaces and nondiscrimination. 4 

### Consequently, all carriers receiving Federal subsidy to support essential air service must certify that they are in compliance with Department regulations regarding drug

- free workplaces and

non discrimination, 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. All carriers that plan to submit proposals involving subsid y should submit the required certifications along with their proposals. Interested carriers requiring more detailed information regarding these requirements, as well as copies of the certifications, should contact the Office of Aviation Analysis at (202) 366

- 5903 . The Department is prohibited from paying subsidy to carriers that do not submit these

documents. 5



### Community Comments Civic officials and the State are welcome to submit comments on the proposals at any time. As noted earlier, we will provide a summary of the proposals to the civic parties and ask them to submit their final comments shortly after April 19 , the due date for carrier proposals.

This order is issued under authority delegated in 49 CFR 1.56a(f) and re

- delegated to the

Directo r, Offi ce of Aviation Analysis.

ACCORDINGLY,

1. The Department requests proposals from carriers interested in providing essential air

service at Crescent City

, California

. Carriers should submit their proposals, with subsidy if necessary, by April 19

, 2010 . P roposals should include all the data required by section 204.4 of the Department’s Regulations (14 CFR 204.4). Proposals should be emailed to EAS@dot.gov, with the title “Proposal to Provide Essential Air Service at Crescent City

, California , Docket DOT

- O ST

- 1997

- 2649

. ” Questions regarding filings may be directed to

Kevin Adams at 202

- 366

- 1047 or Kevin.Adams@dot.gov ;

2

. Th is D ocket will remain open until further order of the Department; and

3 . We will serve this order on the s ervice l ist for th is Docket

.

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

### - 4

-

Persons entitled to petition the Department for review of this order under the Department’s Regulations, 14 CFR 385.50, must file such petitions within ten (10) 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.regulations.govAppendix A



### Nonstop, Great Circle Miles from Crescent City ( CEC )

San Francisco 304

Eureka 56

Sacramento 255

Portland 276

Medford 81

This map is provided by Sabre ® AirVision TM Profit Essentials and is bei ng used with express permission of the copyright holder, Sabre Airline Solutions®.Appendix B

Historical Passengers and Departures, Nonstop Service, T-100 Segment Data

Crescent City to Eureka Crescent City to San Francisco

Year Qtr. Deps. Pax. Pax./Dep. Deps. Pax. Pax./Dep.

2006 1 154 961 6.2 89 1,707 19.2

2006 2 152 890 5.9 91 1,843 20.3

2006 3 143 799 5.6 85 1,976 23.2

2006 4 83 372 4.5 161 2,912 18.1

532 3,022 5.7 426 8,438 19.8

2007 1 86 437 5.1 152 2,342 15.4

2007 2 87 460 5.3 158 2,831 17.9

2007 3 88 474 5.4 172 3,238 18.8

2007 4 85 500 5.9 172 2,858 16.6

346 1,871 5.4 654 11,269 17.2

2008 1 88 469 5.3 154 2,220 14.4

2008 2 90 478 5.3 166 2,601 15.7

2008 3 88 405 4.6 178 2,957 16.6

2008 4 85 372 4.4 168 2,599 15.5

351 1,724 4.9 666 10,377 15.6

2009 1 83 345 4.2 160 1,997 12.5

2009 2 86 338 3.9 167 2,460 14.7

2009 3 79 382 4.8 171 2,876 16.8

2009 4 80 499 6.2 172 2,547 14.8

328 1,564 4.8 670 9,880 14.7

Eurkea to Crescent City San Francisco to Crescent City

Year Qtr. Deps. Pax. Pax./Dep. Deps. Pax. Pax./Dep.

2006 1 150 776 5.2 89 1,718 19.3

2006 2 155 561 3.6 91 2,058 22.6

2006 3 146 423 2.9 89 2,033 22.8

2006 4 81 391 4.8 161 2,853 17.7

532 2,151 4.0 430 8,662 20.1

2007 1 82 364 4.4 156 2,394 15.3

2007 2 86 437 5.1 161 3,018 18.7

2007 3 84 344 4.1 177 3,337 18.9

2007 4 86 320 3.7 170 2,975 17.5

338 1,465 4.3 664 11,724 17.7

2008 1 85 345 4.1 158 2,371 15.0

2008 2 86 366 4.3 172 2,763 16.1

2008 3 84 281 3.3 179 2,938 16.4

2008 4 85 343 4.0 172 2,757 16.0

340 1,335 3.9 681 10,829 15.9

2009 1 81 163 2.0 159 2,119 13.3

2009 2 84 266 3.2 169 2,536 15.0

2009 3 77 235 3.1 176 2,987 17.0

2009 4 76 419 5.5 177 2,701 15.3

318 1,083 3.4 681 10,343 15.2

### Appendix C

Example of General Terms and Conditions for Essential Air Service

The carrier understands that it may forfeit its compensat ion 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 carrie r 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 comp leted 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 com pensation. 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 wil l 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 transporta tion 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 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 adj ustments 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 are not currently available for performance under this soli citation beyond [DATE]. The Government’s obligation for performance under this solicitation beyond [DATE], is contingent upon the availability of appropriated funds from which payment

for services can be made. No legal liability on the part of the Govern ment for any payment may arise for performance under this order beyond [DATE], until funds are made available to the Department for performance. If funds are not made available for performance beyond [DATE], the carrier will receive notice in writing by t he 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 con trovert the foregoing paragraph.

All claims for payment must be submitted within 60 days of the last day of service provided under this order.Appendix D
Page 1 of 3

Distribution List Name: Scheduled Air Carriers, Contiguous US and Puerto Rico

Air Sunsh ine, Inc.
Air Sunshine, Mirmohammad Adili
Air West, Inc., John Raatz
Air Wisconsin, Annette Daly
Airline Associates, Bill Mishk
Alaska Airlines, Jeff Cole
Alaska Airlines, Sandy Sinick
Allegiant Air, Robert Ashscroft

American Airlines, Carl Nelson
American Eagle, Jeffrey Hartz
Atlantic Southeast, Jon Lindlief
Atlantic Southeast, Roger Weston
Bemidji Aviation, Cori Rude
Bemidji Aviation, Arlen Rinkenberger
Cape Air, Andrew Bonney
Cape Air, Dan Wolf
Cape Air, J.Flaherty

Classic Aviation , Tony Henderson
Colgan Air, Mike Colgan
CommutAir, Andy Price
CommutAir, Joel Raymond
Consultant, Robert Silverberg
Continental, Bruce Keiner
Continental, Dan Weiss
Continental, Lorry Halloway
Delta, Amy Martin
Delta, Dan Shuman
Delta, Jeff Mo rgan Delta, Joe Esposito
Delta, Karen Zachary
Delta, Sascha Vanderbellen

Dorato Jets
Dorato Jets, Mark McKenna
Era Aviation, Mike Lenorman
Executive Airlines, Kate Soled
Frontier Flying, Bob Hajducovich
Gem Air, Dan Schroeder

Gem Air, JoAnn Wo lters

### - 2

-

Appendix D
Page 2 of 3

Distribution List Name: Scheduled Air Carriers, Contiguous US and Puerto Rico

Great Lakes, Chuck Howell
Great Lakes, Doug Voss
Great Lakes, Greg Stephens
Gulfstream, Dave Hackett
Gulfstream, Mickey Bowman

Gulfstrea m, T. Cooper
Homeland Security, Bill Ragan
Homeland Security, David Bernier
Homeland Security, Randy Webb
Horizon Airlines, Dan Russo
Horizon Airlines, Jennifer Thompson
Horizon, Jeff Cole

ICEPR, Luis Irizarry
Intrepid Interntl Air, Rick Eyk

Is land Air Charters, Linda House
Jet Air, Daniel Wolford
Kenmore Air, Tim Brooks
McCall Aviation and Salmon Air, Dan Scott
McCall Aviation, Michelle
Mesa Air, Jonathan Ornstein
Mesa Air, Michael Lotz
Mesa Air, Mike Holcomb
Mesaba, John Spanjers

M esaba, Max Shemesh
Midstar Airlines, Jeffrey Fonner
Midwest Airlines, Anthony Intravia
Midwest Airlines, Greg Aretakis
Midwest Airlines, J.C. Augustson
MN Aviation, Jose Maldonado
Multi Aero, Darnea
Multi Aero, Shane Storz
Northwest, Tim McDonald
NYDC, Henok Araya

OST, Brian Swanson
OST, Dennis DeVany
OST, Kevin Adams
OST, Kevin Schlemmer
OST, Michael Martin
OST, Renee Williams
Pacific Wings, Frank Ford
Pacific Wings, Greg Kahlstorf

### - 3

-

Appendix D
Page 3 of 3

Distribution List Name: Sch eduled Air Carriers, Contiguous US and Puerto Rico

PenAir, Danny Seybert
PenAir, Scott Bloomquist
Pinnacle Airlines, Joe Williams
Pinnacle Airlines, Phil Reed
Public Charters, Jim Gallagher
Scenic, Mary Schneider

Scenic, Mitzi Daines

Seaborne Ai rlines, Wayne D'Amico
SeaPort Airlines, Jim Day
SeaPort Airlines, Rob McKinney
Shuttle America, Jerry Balsano
SkyWest, Eric Christensen
SkyWest, Michael Thompson
Sovereign Air, Bob Karns

Sovereign Air, Lois R. Barton
Tradewind, Eric Zipkin

Tran sStates, Fred Oxley

Transtates, Gerry Wigmore
United, Alicia Gabriel

United, James Starnes
US Airways, Benjamin Slocum
US Airways, Howard Kass

US Airways, Jason Reisinger
Warbelows Air Ventures, Art Warbelow
Wings Air (Air Greco), Aaron Goerlich