Swanson, Brian (OST) 

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Swanson, Brian (OST) 

Tuesday, July 31, 2012 10:03 AM 

"Joe Brauer' Ubrauer@newnorth.net)'; 'Rhinelander Oneida County Airport 

(rhiarpt@newnorth.net)'; 'thowen58@hotmail.com'; 'brosenl307@gmail.com'; 'Matthew Brincker 

(BrinkerM@michigan.gov)'; 'mayor@ci.brainerd.mn.us'; 'rick@brainerdairport.com'; 'Susan 

Baratono (sabaratono@midco.net)'; 'shawnm@ci.international-falls.mn.us'; 'Bob Anderson' 

Devany, Dennis <OST> (Dennis.DeVany@dot.gov); Chuck Howell (chowell@flygreatlakes.com); 

Mike Thompson; 'bob@sovereignairinc.com' 

Soliciting Comments on EAS Proposals at Iron Mountain/Kingsford, Michigan, Brainerd and 

International Falls, Minnesota, and/or Rhinelander, Wisconsin -DUE August 17, 2012 

I would like to update you on the Essential Air Service (EAS) situation at Iron Mountain/Kingsford, Michigan (Iron 

Mountain), Brainerd and International Falls, Minnesota, and Rhinelander, Wisconsin, and give you an opportunity to 

submit comments if you wish. 

In response to Great Lakes' June 11, 2012 e-mail explaining that it has recently experienced an aggressive expansion, is 

in the process of re-engineering its business model (including its approach to code-sharing and the associated 

reservation system infrastructure), has concerns regarding availability of gates and facilities to expand further at 

Minneapolis/St. Paul, and does not want to hinder communities from considering other alternatives, the Department 

issued Order 20 12-6-9 on 1 une 15, 2012, to solicit a new round of proposals from all interested air carriers to provide 

EAS at any or all of the four communities, for a new contract period. In response to that Order, we received proposals 

from Great Lakes, SkyWest Airlines (SkyWest) and Sovereign Air Inc.. ' 

Copies of the proposals may be accessed online through the Federal Docket Management System 

at: http://www.regulations.gov, by typing 

"DOT-OST -1999-5175" (Iron Mountain), "DOT -OST-2011-0 135" (Brainerd), "DOT-OST -2009-0304" (International 

Falls), or 

"DOT-OST-2011-0lOY" (Rhinelander) in the "SEARCH for: Rules. Comments, Adjudications or Supporting 

Documents:" field. Each carrier's proposal is briefly summarized below. 

Great Lakes submitted "stand alone" service options for nonstop service between each of the four communities and 

Minneapolis/St. Paul, utilizing 19-passenger Beech 1900D aircraft and its code-share agreements where applicable, as 

summarized in the table below. 

Community Daily Annual Subsidy 

Round Trips Requirement 

Iron Mountain 3 $1,857,610 ( 18 weekly) 

Brainerd 4 $1,785,221 (24 weekly) 

International 3 $1,797,644 Falls (18 weekly) 

Rhinelander 3 $1,857,610 ( 18 weekly) 

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SkyWest,.operating w.ith a Delta Air Lines code-share and utilizing Canadair Regional Jet 200 (CRJ200) aircraft, 

submitted two package bids for service to Minneapolis/St. Paul, one to serve Iron Mot:mtain and Rhinelander, and the 

other for service at Brainerd and International Falls. Iron Mountain would receive a minimum of 13 (7 nonstop) round 

trips a week and Rhinelander would receive a minimum of 14 nonstop round trips a week, for a combined annual 

subsidy rate of $4,032,589 ($2,512,971 at Iron Mountain and $1,519, 619 at Rhinelander). Brainerd would receive a 

minimum of 12 nonstop round trips a week, and International Falls would receive a minimum of 13 (7 nonstop) round 

trips a week, for a combined annual subsidy rate of $2,464,663 ($1,356,764 at Brainerd and $1,107,900 at International 

Falls). 

Sovereign Air Inc. submitted various service options proposal for service at all of the communities as summarized in 

the table below. 

Hub(s) Served/ Aircraft Daily Annual 

Option Community (ies) Type Round Subsidy Service Pattern (Seats) Trips Requirement 

1 International Falls one-stop (at Brainerd) to Jetstream 41 4 $1,472.093 and Brainerd Minneapolis/St. Paul (MSP) (29) (24 weekly) 

2 Brainerd one-stop (at St. Cloud) to Chicago Domier 328 3 $1,302,781 O'Hare International Airport (ORD) (30) (18 weekly) 

3 Iron Mountain and one-stop (at Rhinelander) to Chicago Dornier 328 5 $1,960,453 Rhinelander O'Hare International Airport (ORO) (30) (30 weekly) 

We also note that Sovereign Air Inc. lias not obtained the required operating authority from either the Federal Aviation 

Administration or the Department. 

Please note that the average passenger fares. shown in each proposal do not necessarily ret1ect the average local fare· 

passengers would actually pay, but, rather, ret1ect a prorated portion of the total ticket price (e.g., the BrainerdMinneapoli·sJSt. Paul portion of a Brainerd- Minneapolis/St. Paul- Las Vegas ticket) that the subsidized carrier would 

realize. Also, the fare shown is net of certain charges such as Federal transportation security fees, excise or ticket 

taxes, and Passenger Facility' Charges. Of course, carriers have the discretion to charge fares they deem appropriate, 

and the passenger fares presented in their propo~als have been developed for subsidy rate computation purposes 

only. Based on the cost elements incorporated in the carriers' computation summaries, the carriers would have to 

realize passenger fares comparable to the averages shown in their proposals in order to achieve break-even or profitable 

operations without subsidy. 

You should also note that the carriers' schedules may change to ret1ect changing conditions (e.g., to better meet shifting 

connecting bank times at the hub). The Department does expect subsidized air carriers to maintain well-timed and 

well-spaced t1ights in order to ensure full compensation. 

We request that you submit any comments you may have as soon as possible, but in any case no later than August 17, 

2012. Please send your comments by fax to 202-366-7638 or by email to both dennis.devany@1dot.gov and 

hrian.swanson@clot.gov. Our rules require that you send your comments to both applicants as well. If you have any 

questions, or need more time to reply, please feel free to contact Brian Swanson of my staff at 202-366-5392. 

Sincerely, 

Dennis J. DeVany 

Chief, Essential Air Service Division, X-53 

Office of Aviation Analysis 

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