Order: 2012-8-23

Served: August 20, 2012

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 20th day of August, 2012

Essential Air Service at

KEARNEY, NEBRASKA

NORTH PLATTE, NEBRASKA

SCOTTSBLUFF, NEBRASKA

DOCKET DOT-OST-1996-1715

DOCKET DOT-OST-1999-5173

DOCKET DOT-OST-2003-14535

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

ORDER RE-SELECTING AIR CARRIER

Summary

By this Order, the Department is re-selecting Great Lakes Aviation, Ltd., operating as both 

a United Airlines and Frontier Airlines code-share partner (Great Lakes), to provide 

Essential Air Service (EAS) at Kearney, North Platte, and Scottsbluff, Nebraska, for a twoyear term beginning November 1, 2012, for a combined annual subsidy of $4,848,765. 1

 

Each community will receive three nonstop weekday and weekend round trips (18 a week) 

to Denver International Airport (Denver), with 19-passenger Beechcraft 1900 aircraft.

Background

By Order 2010-9-10, September 8, 2010, the Department selected Great Lakes to provide 

EAS at the above-mentioned communities through October 31, 2012, at the same service 

levels we are selecting prospectively, for a combined annual subsidy of $5,344,690.

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

funds.
- 2 -

As the end of the contracts were approaching, we issued Order 2012-6-2, June 5, 2012, 

requesting proposals from air carriers interested in providing EAS at the communities for a 

new term beginning November 1, 2012. In response to that Order, we received proposals

only from Great Lakes.

Great Lakes’ complete proposal and the communities’ comments may be accessed online 

at http://www.regulations.gov/ by entering each community’s Docket number in the search 

block: Kearney, Docket DOT-OST-1996-1715, North Platte, Docket DOT-OST-1999-

5173 and Scottsbluff, Docket DOT-OST-2003-14535.

Proposal of Great Lakes

Great Lakes proposed an inseparable package for Kearney, North Platte and Scottsbluff, 

maintaining status-quo service. All three communities would receive three nonstop round 

trips each weekday and weekend (18 a week) to Denver using 19-passenger Beechcraft 

1900 aircraft for a combined annual subsidy of $4,848,765. All flights will continue to 

operate under code-share agreements with both United Airlines and Frontier Airlines.

Community Comments

On July 11, 2012, we requested comments from all three communities regarding this EAS 

selection case. In response, we received letters from the communities of Kearney and 

Scottsbluff. Mayor Stanley A. Clouse of Kearney states that while the community 

recognizes the importance of the existing air service on Great Lakes to Denver, the City is 

dissatisfied with Great Lakes in a variety of areas, including customer service, frequent 

maintenance delays, and Great Lakes’ lack of marketing expenditures in the local area. 

Mr. Darwin Skelton, Airport Director at Western Nebraska Regional Airport in 

Scottsbluff, states in his letter that “Great Lakes has done a good job for us overall. When 

we have concerns we contact them and they do their best to work with us.”

We received no official comments from the community of North Platte.

Decision

Great Lakes was the only bidder at the three communities, and we find the subsidy and 

service levels reasonable. In addition, Great Lakes’ service to Denver with its dual codeshare will enable passengers to connect with ease to the national air transportation system. 

We are concerned, however, by Kearney’s dissatisfaction with Great Lakes’ current 

quality of service at that community. We fully expect Great Lakes to address the service 

issues Mayor Clouse mentions in his official comments on this selection case. 

We shall make this re-selection of Great Lakes at Kearney, North Platte, Scottsbluff 

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 

activities.2

 2 The certifications are available on the Web at http://ostpxweb.dot.gov/aviation/index.html.
- 3 -

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 EAS. Great Lakes is subject 

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

attention that would cause us to question 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 fitness findings. We therefore conclude that the carrier is reliable and 

remains fit to conduct the operations proposed here.

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

ACCORDINGLY,

1. We re-select Great Lakes Aviation, Ltd. to provide Essential Air Service at Kearney,

North Platte, and Scottsbluff, Nebraska, and establish an annual subsidy rate as described 

in Appendix C;

2. We direct Great Lakes Aviation, Ltd., to retain all books, records, and other source and 

summary documentation 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 

from the service date of this Order or until the Department 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 find that Great Lakes Aviation, Ltd. continues to be fit, willing and able to operate 

as a commuter air carrier, and capable of providing reliable Essential Air Service at 

Kearney, North Platte, and Scottsbluff, Nebraska;
- 4 -

4. These dockets will remain open pending further Department action; and

5. We will serve copies of this Order on the Mayors and Airport Managers of Kearney, 

North Platte, and Scottsbluff, Nebraska; and Great Lakes Aviation, Ltd.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at

http://www.regulations.gov
Appendix A

AREA MAP

Maps generated by the Great Circle Mapper - copyright © Karl L. Swartz.

 
 Appendix B

Page 1 of 3
Appendix B

Page 2 of 3
 Appendix B

Page 3 of 3
 Appendix C

Page 1 of 3

Great Lakes Aviation

Essential Air Service to be Provided at Kearney, Nebraska

Effective Period: November 1, 2012, through October 31, 2014

Scheduled Service: 18 weekly nonstop round trips to Denver

Aircraft: 19-passenger Beechcraft 1900

Rate per Eligible Flight: $9551

Weekly Ceiling for each community: $34,3802

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 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 this rate, 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 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 service levels, the carrier may cease to provide service to that 

specific location without regards 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.

Subsidy contract 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.

Funds are not currently available for performance under this Order beyond September 30, 2012. The Government’s 

obligation for performance under this Order beyond September 30, 2012, 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 payment may arise 

for performance under this Order beyond September 30, 2012, until funds are made available to the Department for 

performance. If funds are not made available for performance beyond September 30, 2012, the Department will provide 

notice in writing to the carrier.

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

 1 Annual compensation of $1,752,904 divided by 1,835 annual departures (36 weekly departures x 52 weeks x 98 

percent completion). 2 36 arrivals and departures per week multiplied by $955 per flight.
 Appendix C

Page 2 of 3

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at North Platte, Nebraska

Effective Period: November 1, 2012, through October 31, 2014

Scheduled Service: 18 weekly nonstop round trips to Denver

Aircraft: 19-passenger Beechcraft 1900

Rate per Eligible Flight: $9251

Weekly Ceiling for each community: $33,3002

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 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 this rate, 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 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 service levels, the carrier may cease to provide service to that 

specific location without regards 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.

Subsidy contract 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.

Funds are not currently available for performance under this Order beyond September 30, 2012. The Government’s 

obligation for performance under this Order beyond September 30, 2012, 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 payment may arise 

for performance under this Order beyond September 30, 2012, until funds are made available to the Department for 

performance. If funds are not made available for performance beyond September 30, 2012, the Department will provide 

notice in writing to the carrier.

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

 1 Annual compensation of $1,697,510 divided by 1,835 annual departures (36 weekly departures x 52 weeks x 98 

percent completion). 2 36 arrivals and departures per week multiplied by $925 per flight.
 Appendix C

Page 3 of 3

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at Scottsbluff, Nebraska

Effective Period: November 1, 2012, through October 31, 2014

Scheduled Service: 18 weekly nonstop round trips to Denver

Aircraft: 19-passenger Beechcraft 1900

Rate per Eligible Flight: $7621

Weekly Ceiling for each community: $27,4322

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 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 this rate, 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 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 service levels, the carrier may cease to provide service to that 

specific location without regards 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.

Subsidy contract 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.

Funds are not currently available for performance under this Order beyond September 30, 2012. The Government’s 

obligation for performance under this Order beyond September 30, 2012, 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 payment may arise 

for performance under this Order beyond September 30, 2012, until funds are made available to the Department for 

performance. If funds are not made available for performance beyond September 30, 2012, the Department will provide 

notice in writing to the carrier.

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

 1 Annual compensation of $1,398,351 divided by 1,835 annual departures (36 weekly departures x 52 weeks x 98 

percent completion). 2 36 arrivals and departures per week multiplied by $762 per flight.