Order: 2011

- 7

- 12

Served: July 27, 2011



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 27 th day of July , 20 1 1

Essential Air Service at

HYDABURG, ALASKA DOCKET DOT

- OST

- 1999

- 6245

under 49 U.S.C. 41731 et seq.



### ORDER RE

- SELECTING CARRIER

Summary

By this order, the Department is re

- selecting Venture Travel, LLC, operating as Taquan Air

Service (Taquan Air ), to provide essential air service (EAS) at Hydaburg, Alaska

. Taquan Air

will provide three weekly nonstop round trips to Ketchikan using 6

- seat de Havilland Canada

DHC

- 2 Beaver ai rcraft for a four

- year contract period beginning November 1, 2011, through

October 3 1

, 2015

, for an annual subsidy of $ 151,773

. 1

Background

By Order 2007

- 10

- 12

, October 16, 200 7 , the Dep artment selected Taquan Air to provide EAS at

Hydaburg for the contract period from November 1

, 2007 , through October 31, 2011, for an

annual subsidy of $ 86,755 for three weekly nonstop roun d trips to Ketchikan

.

As the end of the contract was approac hing, we issu ed Order 2011

- 5

- 9

, May 9

, 2011, requesting

proposals from carriers interested in providing EAS at the community

, for a term beginning

November 1, 2011 . In response to that order, we received a prop osal from the incumbent

carrier

, Taquan Air

.

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.- 2

-

The carrier’s complete proposal and community comments may be accessed online at

http://www.regulations.gov/ by entering Docket number DOT

- OST

- 1999

- 6245 in the search

block

, so we will only briefly summarize the proposals below

.

Proposal of Taquan Air

Taquan Air proposed three weekly nonstop round trips to Ketchikan usi ng 6

- seat de Havilland

Canada DHC

- 2 Beaver aircraft for an annual subsidy of $ 145,809 for a two

- year term, or

$151,773 for a four

- year term

.

Community Comments

Mayor Anthony Christianson submitted a resolution by the City of Hydaburg, dated June 7,

2011, supporting Taquan Air’s four

- year proposal, stating that the carrier’s three weekly flights

“are lifelines for the community

, ” adding that “Taquan has done an excellent job o f maintaining

schedules, sometimes in challenging weather conditions...”

Decision

Given that Taquan Air was the only carrier to submit a proposal to provide EAS at Hydaburg,

and given that the community fully supports the carrier’s proposal, it is clear i n this case that the

decision points to the re

- selection of Taquan Air. Taquan Air has served Hydaburg reliably for a

number of years and it is an established EAS carrier. As between Taquan Air’s two

- year or four

year proposal, the community supports the four

- year option, and we see no reason not to select

the four

- year option for $151,773. We find the subsidy and service levels proposed by Taquan

Air to be reasonable.

W e shall make this selection of Taquan Air at Hydaburg contingent upon the Department’s

receiving properly executed certifications from the carrier that it is in compliance with the

Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the

regulations concerning lobbying act ivities.

Carrier Fitness

49 U.S.C. 41737(b) and 41738 require that we find an air carrier fit, willing, and able to provide

reliable service before we may subsidize it to provide essential air service

. Taquan Air is subj ect

to the Department’s continuing fitness requirements, and no information has come to our

attention tha t would cause us to questio n the carrier's fitness at this time. We have contacted the

Federal Aviation Administration, and it has raised no concerns that would negatively affect our

f itness finding s . We therefore conclude that the carrier is reliable and remain s fit to conduct the

operations proposed here.

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

ACCORDINGLY,

1. We select Venture Travel, LLC, operating as Taquan Air Service, to provide essential air

service at Hydaburg

, Alaska, an d establish an annual subsidy rate of $ 151,773

, as described in

Appendix C;- 3

-

2. We direct Venture Travel, LLC, to retain all books, records, and other source and summary

documen tation to support claims for payment, and to preserve and maintain such documentation

in a manner that readily permits its audit and examination by representatives of the Department.

Such documentation shall be retained for seven years or until the Depart ment indicates that the

records may be destroyed, whichever comes first. Copies of flight logs for aircraft sold or

disposed of must be retained. The carrier may forfeit its compensation for any claim that is not

supported under the terms of this order;

3 . We f i nd that Venture Travel, LLC, continue s to be fit, willing and able to operate as a

certificated carrier

, and capable of providing reliable essential air service at Hydaburg ;

4. This docket will remain open pending further Department action ; and

5 . We will serve copies of this order on the Mayor of Hydaburg

, the Alaska Department of

Transportation

, and Venture Travel, LLC

.

B y:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is ava ilable at

http://www.regulations.govAppendix A



## AREA MAPAppendix B

Page 1 of 2

ESSENTIAL AIR SERVICE AT HYDABURG, AK

OPERATIONS DHC

- 2 A/C Page 1 of 2

MARKET DEPS/YEAR AVG BLOCK TOTAL BLOCK

WFB

- HYG 156 32 4992

HYG

- WFB 156 32 4992

TOTAL 312 9984

Block Hours 166.4

EXPENSES

Item Units YE 12/09

- 3/11 2012 Unit Costs 2012 Costs 2013 Costs 2014 Costs 2015 Costs

Pilot & CoPilot 166.4 $194.51 $206.18 $34,308.45 $35,680.79 $37,108.02 $38,592.34

Fuel & Oil 166.4 $187.29 $198.53 $33,034.96 $34,356.36 $35,730.61 $37,159.84

All Insurance 166.4 $41.60 $44.10 $7,337.57 $7,631.08 $7,936.32 $8,253.77

Maintenance 166.4 $216.16 $229.13 $38,127.17 $39,652.25 $41,238.34 $42,887.88

Depreciation 166.4 $84.71 $89.79 $14,941.49 $15,539.15 $16,160.71 $16,807.14

TOTAL DIRECTS $724.27 $767.73 $127,749.64 $132,859.63 $138,174.01 $143,700.97

Traffic Related 312 $66.74 $70.74 $22,072.25 $22,955.14 $23,873.35 $24,828.28

Departure Related 312 $94.23 $99.88 $31,163.75 $32,410.30 $33,706.71 $35,054.98

TOTAL INDIRECTS $160.97 $170.63 $53,236.00 $55,365.44 $57,580.06 $59,883.26

SUBTOTAL $180,985.64 $188,225.06 $195,754.07 $203,584.23

CAPACITY RELATED 15.00% $27,147.85 $28,233.76 $29,363.11 $30,537.63

TOTAL SYSTEM $208,133.48 $216,458.82 $225,117.18 $234,121.86

Specific Ground Support

Vehicle Insurance $1,400.00 $1,456.00 $1,514.24 $1,574.81 $1,637.80

Vehicle Maintenance $2,700.00 $2,808.00 $2,920.32 $3,037.13 $3,158.62

Vehicle Fuel $3,300.00 $3,432.00 $3,569.28 $3,712.05 $3,860.53

TOTAL HYG VEHICLE $7,400.00 $7,696.00 $8,003.84 $8,323.99 $8,656.95

TOTAL OP. EXPENSES $215,829.48 $224,462.66 $233,441.17 $242,778.82

PROFIT @ 5% MARKUP $10,791.47 $11,223.13 $11,672.06 $12,138.94

TOTAL ALL EXPENSES $226,620.96 $235,685.80 $245,113.23 $254,917.76Appendix B

Page 2 of 2

ESSENTIAL AIR SERVICE AT HYDABURG, AK

TRAFFIC per Blk Hr Sched Traffic 2012 Proj. Yield Page 2 of 2

PASSENGERS 0.191 40 $110.24 $4,379.61 $4,554.80 $4,736.99 $4,926.47

FREIGHT 52.1 10837 $0.84 $9,074.74 $9,437.73 $9,815.23 $10,207.84

MAIL 275 57200 $1.23 $70,202.15 $73,010.24 $75,930.65 $78,967.88

TOTAL $83,656.51 $87,002.77 $90,482.88 $94,102.19

SUBSIDY NEED $142,964 $148,683 $154,630 $160,816

SUBSIDY NEED/DEPARTURE $458.22 $476.55 $495.61 $515.43Appendix C

Venture Travel, LLC

Essential Air Service to be Provided at Hydaburg, Alaska

Effective Period : November 1, 2011, through October 31, 2015

Scheduled Service : Three weekly nonstop round trips to Ketchikan

Aircraft : 6

- seat de Havilland Canada DHC

- 2 Beaver

Rate per Eligible Flight: $ 486 ; 1

Weekly Ceiling : $ 2,919 2

Note: The carrier understands that it may forfeit its compensation for any flights that it do es 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 e ligible 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 circumstanc es 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 dete rmining 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 co mmunity.

If the Department unilaterally, either partially or complete ly , 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

Departme nt 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 subs idy and/or service that are mutually agreed to in writing by the Department and the

carrier 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, 2011

. The Department’s

obligation for performance under this order beyond September 30, 2011 , is subject to the availability of appropriated

funds from which payment for services can be made. No legal liability on the part of the Government for any

payme nt may arise for performance under this order beyond September 30, 2011 , until funds are made available to

the Department for performance. If funds are not made available for perf ormance beyond September 30, 2011 , the

Department will provide notice in wri ting 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 must be submitted within 60 days of the last day of service provided under this order.

1 Annual compensation of $151,773 divided by 312 annual departures (6 weekly departures x 52 weeks x 100

percent completion).

2 6 arrivals and departures per week multiplied by $486 per flight.