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 20 th day of August, 20 1 2

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 th is 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 Serv ice (EAS) at Kearney, North Platte, and Scottsbluff, Nebraska , for a t wo

year term beginning November 1, 2012, for a combined annual subs idy of $4,848,765. 1

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

to Denver Inter national 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 c ommunities 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 contract s were appro aching, we issue d Order 2012

- 6

- 2

, June 5, 2012

, requesting proposals from air carriers interested in p roviding EAS at the communities for a new term beginning November 1, 2012. In respo nse to that Order, we received proposal s only from Great Lakes

.

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

at http://www.regulations.gov/ by entering each community’s Docket num ber in the search block: Kearney, Docket DOT

- OST

- 1996

- 1715

, North Platte, Docket DOT

- OST

- 1999

- 5173 and Scottsbluff, Docket DOT

- OST

- 2003

- 1 4535

.

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 agreement s 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 importanc e 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. Darw in 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 w e find the subsidy and

service levels reasonable . In addition, Great Lakes’ service to Denver with its dual code

share will enab le passengers to connect with ease to the national air transportation system.

We are conce rn ed, however, by Kearney’s dissatisfaction with Great Lakes’ current quality of service at that community. We fully expect Great Lakes to address the se rvice 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

carri er that it is in compliance with the Department’s regu lations 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 carri er fit, willing, and able to provide reliable service before we may subsidize it to provide EAS. Great Lakes 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 c arrier ’s fitness at this time. We have contacted the Federal Aviation Administration, and it has raised no concerns that would negatively affect our fitness 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 Part 1.56a(f).

ACCORDINGLY,

1 . We re

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

, North Platte, and Scottsbluff, Neb raska, 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

doc umentation 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 f i nd that Great Lakes Aviation, Ltd. continue s to be fit, willing and able to operate

as a commuter air carrie r
, and capable of providing reliable Essential Air S ervice at Kearney, North Platte, and Scottsbluff, Nebraska ;- 4

-

4

. These docket s will remain ope n pending further Department action ; and

5 . We will serve copies of this Order on the Mayor s and Airport Managers of Kearney, North Platte, and Scottsbluff, Nebraska; and Great Lakes Aviation, Ltd.

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 MAP

Maps generated by the Great Circle Mapper

- copyright © Karl L. Swartz

.Appendix B Page 1 of 3Appendix B Page 2 of 3Appendix B Page 3 of 3Appendix 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

- passeng er Beechcraft 1900 Rate per Eligible Flight: $ 955 1
Weekly Ceiling for each community : $ 3 4,380 2

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 significan t elements of the required service, without prior approval. T he 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 per iod, it may jeopardize its entire subsidy claim for the period in ques tion. 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 f ull 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 traf fic 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 tra nsportation 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 level s 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 b eyond 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 Gove rnment 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 p rovide 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: $ 925 1

W eekly Ceiling for each community : $ 33,3 00 2

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 su bsidy 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 th e 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. I n determining whether subsidy payment for a deviating flight should be adjusted or disallowed, the Department will consider

th e 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 locati on 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 controv ert 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

per formance. 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 Orde r.

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 p er 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: $ 762 1
Weekly Ceiling for each community : $ 27,432 2

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 significan t elements of the required service, without prior approval. The carrier understands that an aircraft take

- off and landing at its

s cheduled 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 addit ion, 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 l ocate 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. I n 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 unil aterally, 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 sti pulated 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. How ever, 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 beyo nd 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

.