Order: 2014

- 3

- 9 Served: March 14, 2014

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 14 th o f March, 2014

Essential Air Service at

DODGE CITY, KANSAS GARDEN CITY, KANSAS GREAT BEND, KANSAS HAYS, KANSAS, and LIBERAL, KANSAS

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 1998

- 3502

DOCKET DOT

- OST

- 1998

- 3503

DOCKET DOT

- OST

- 1998

- 3496

DOCKET DOT

- OS T

- 1998

- 3497

DOCKET DOT

- OST

- 1998

- 3498

Order Summary By this Order

, the Department is select ing American Airlines (American) to provide Essential Air Service (EAS) at Garden City, Kansas

, for $1,445,172 annually; SeaPort Airlines, Inc. ( SeaPort ) at Great B end for $1,434,472; and SkyWest Airlines (SkyWest) at Hays for $2,253,132 . The Order also re

- select s Great Lakes Airlines (Great Lakes) at Dodge City and Liberal, Kansas

, for $2,339,131 and $2,236,180 respectively

, and sets bridge rates for Great

Lakes at Great Bend and Hays until the start of replacement service

. 1

Background

Order 2011

- 10

- 24, October 31, 2011, tentatively selected American Eagle Airlines to provide EAS at Garden City, and Great Lakes at Dodge City, Great Bend, Hays, and Liberal , Kansas

. 2 No parties objected, and Order 2011

- 11

- 14, November 14, 2011, finalized th at show cause

Order , summarized in the table below.

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

2 The Order was issued on a tentative basis because Great Lakes proposal was for a five

- city package without separate subsidy calculations for each community. This required us t o recalculate the level of subsidy required at the remaining communities.- 2

-

Summary of Service Secured by Order 2011

- 11

- 14 3

Intermediate Weekly Passengers Community Hub Carrier Aircraft Stops Trips Subsidy Projected Per RFP Dodge City Denver Great Lakes B-1900 0 17 $1,688,598 14,000 11,708
Garden City Dallas American R. Jets 0 14 $3,252,359 39,347 45,480
Hays Denver Great Lakes B-1900 0 24 $2,164,041 20,000 18,278

Great Bend Denver Great Lakes B-1900 1 12 $1,082,020 2,200 1,937

Liberal Denver Great Lakes B-1900 0 18 $2,555,150 9,000 11,833

Total $10,742,168

The Department selected the carriers to provide service for two years begi nning when American Eagle inaugurated service at Garden City, through the end of the 24 th month thereafter. American Eagle began service at Garden City on April 3, 2012, thus setting an expiration date of April 30, 2014. As the end of the rate term appro ached, the Department issued Order 2013

- 11

- 2, November 1, 2013, soliciting proposals for a new rate term. In response to that Order, the Department received proposals from American, SeaPort, and SkyWest, and those are outlined

below.

Proposals Dodge City Great Lakes requests $ 2,339,131 annual subsidy for service with 19

- seat Beech 1900 aircraft and eighteen (1 8 ) nonstop round trips per week to Denver (DEN)

– one more than the current level of service we require.

SeaPort proposes to operate twenty four ( 24 ) nonstop round trips per week to Wichita Mid

Continent Airport ( ICT )

, for $2, 008,596 annual subsidy with 9

- seat

, Cessna 208 s , a single

- engine turboprop aircraft

.

Garden City

American proposes to continue to operate fourteen (1 4 ) nonstop round trips per week to Dallas/Fort Worth International Airport (DFW) for $ 1,445,172 annual subsidy with 44

- seat or larger regional jets.

American requested the fle xibility to use either 50

- or 44

- seat r egional j ets for the same level of subsidy, and the actual servi ce provider would be a code

- share partner of American. Both provisions would increase American’s flexibility as well as the reliability of its service to the communities. American’s proposals at EAS communities are predicated on a continuation of the

3 Order 2011

- 11

- 14 recognized that Garden City and Dodge City would benefit on a regional basis : those airports are 43 miles apart, and people from each community would be able to drive to the other for nonstop service to either

Denver or Dallas . At Great Bend and Hays the separate rates above were based on a combined total of $3,246,061 annual subsidy, assigned between each community on the basis of departures , which did not neces sarily reflect the cost of serving each community separately . The $3,252,359 subsidy for Garden City above included $333,333 annual subsidy contributed by local parties.- 3

-

wai ver, initially granted at Garden City by Order 2011

- 11

- 14

, to allow it to leave on 120 days’

notice. Here again American warrants that it would provide a 120

- day notice, after which time it

would be free to terminate service. There were no other bids inv olving Garden City.

Great Bend Great Lakes requests $ 1,975,110 annual subsidy for twelve ( 12 ) one

- stop round trips per week to Denver (DEN) with 19

- seat Beech 1900 aircraft

-- the same level of service it currently provides.

SeaPort proposes to operate eighteen ( 18 ) nonstop round trips per week to Wichita for $ 1,434,472 annual subsidy with 9

- seat , single

- engine Cessna 208 aircraft

.

Hays

Great Lakes ’ Option 1 requests $ 1,669,520 annual subsidy for service with 19

- seat Beech 1900 aircraft and eighteen (18) non stop round trips per week to Denver (DEN)

. 4 Great Lakes ’ Option 2 requests $ 1,4 9 9,508 annual subsidy for service with 30

- seat Brasilia aircraft and fourteen (14) non stop round trips per week to Denver (DEN)

.

SkyWest requests $ 2,253,132 annual s ubsidy for twelve ( 12 ) non stop round trips per week to

Denver (DEN) with 50

- seat regional jet aircraft. SkyWest w ould operate as United Express.

Liberal Great Lakes requests $2,236,1 80 annual subsidy for eighteen (1 8 ) non stop round trips per week

to Denv er (DEN) with 19

- seat Beech 1900 aircraft

-- the same level of service it currently provides.

SeaPort proposes to operate twenty four ( 24 ) nonstop round trips per week to Wichita for $ 2,790,489 annual subsidy with 9

- seat, single

- engine Cessna 208 aircra ft

.

Summary of Proposals Before the Department

Round Proj.
Community Carrier Hub Aircraft Stops Trips Subsidy Psgrs.

1

. Dodge City Great Lakes DEN B-1900 0 18 $2,339,131 15,000
Seaport ICT C-208 0 24 $2,008,596 11,500

2

. Garden City American DFW R.Jet 0 14 $1,445,172 46,866

3

. Great Bend Seaport ICT C-208 0 18 $1,434,472 3,100

Great Lakes DEN B-1900 1 12 $1,975,110 3,000

4

. Hays SkyWest DEN R.Jet 0 12 $2,253,132 26,000

Great Lakes DEN B-1900 0 18 $1,699,520 22,000

Great Lakes DEN Brasilia 0 14 $1,499,508 22,000

5

. Liberal Great Lakes DEN B-1900 0 18 $2,236,180 15,000
Seaport ICT C-208 0 24 $2,790,489 11,500

4 This is a reduction from the 24 nonstop round trips per week Great Lakes is curren tly required to provide.- 4

-

Community Comments Dodge City The community supports Great Lakes’ proposal. “A primary factor in our endorsement of the Denver service, as proposed by Great Lakes, is that such service allows for the c ontinuation of the regional air service concept initiated through the joint efforts of Dodge City and Garden City during the last contract term. Since the introduction of Dallas service at Garden City and Denver service at Dodge City and Liberal, passenge r boardings at all three communities have more than doubled.” The community is concerned with the number of cancellations by Great Lakes at Dodge City and Liberal. “We have been assured by Great Lakes ’ officials that steps are being taken to remedy, or a t least mitigate, this troublesome issue [of cancelled flights] and that improvement should appear in the next few months.”

Liberal The City of Liberal supports Great Lakes’ proposal.

“ [Great Lakes ’ ] bid to provide three weekday round trip flights and four round trip

weekend flights 5 to Denver will continue to provide our community with convenient,

cost

- effective connections to the nation’s air transportation system. Great Lakes Aviation has had a presence in Liberal for many years and has provided ai r transportation with good connections .”

Great Bend The City of Great Bend supports the selection of SeaPort . It favors SeaPort because of the greater frequency of flights the carrier proposes (18 nonstop s vs. 12 one

- stops) ; the reduced fares

SeaPort pr oposes compared to Great L akes ; 6 the aircraft proposed by SeaPort which the community believes would be more reliable ; the increasingly unreliable service demonstrated by

Great Lakes ; and SeaPort ’s success at providing EAS at nearby Salina, Kansas, as meas ured by increased passenger loads. The city notes that :

“By any measure, Great Lakes has cancelled approximately 30 percent of its scheduled flights for Great Bend since November 2013. As of January 6, only one scheduled flight

into Great Bend has occu rred in 2014.”

Garden City Garden City recommends that we select American. The community again waives its right to

hold

- in American past the 120

- day notice period the carrier based its proposal upon.

Hays The City of Hays recommends the selection of Sk yWest. “The City of Hays and its residents give the strongest possible endorsement to the air service proposal of SkyWest Airlines. We

5 Great Lakes proposed 18 round trips per week, not 19.

6 The fares proposed by carriers in their proposals are not guaranteed by the Department, since the Department does not regulate air fares under deregulation.- 5

-

urge the Department to award the Hays EAS contract to SkyWest in a prompt manner.” The community notes that Great Lake s in the several years it has served Hays has not attained the 97 percent completion projected by Great Lakes , and the service has recently gotten worse

. 7 Hays

contrasts this with the historical record of SkyWest. “We are aware of SkyW e st’s outstanding

r eputation for reliable and on time air service, for high quality customer service and for working with airport partners to achieve maximum traffic and revenue results in every small city they serve.” The community notes that in four nearby communities whe re American 8 replaced Great

Lakes (Garden City, Grand Island, Joplin, and Manhattan) the traffic generated at the community

has more than doubled and two years after the transition to American the level of subsidy has decreased significantly

.

We also rec eived letters from the Hays Medical Center, Fort Hays State University, the Hays Area Chamber of Commerce, and the Ellis County Coalition for Economic Develo pment. The Medical Center indicates it has “lost confidence in the air flight service [of Great La kes] due to last minute cancellations, lack of on

- time service, and inconsistent operations. At times we have been forced to utilize other air service out of Wichita, Manhattan, and Kansas City to meet our

business needs. ” Fort Hays State University indi cates that Great Lakes’ service “has never been good, but the rapid deterioration in reliability over the past year has created even greater hardships for FHSU faculty, staff, and students. Considering that Great Lakes has not been able to provide even mi nimally adequate service under its current contract, I cannot imagine how it proposes to improve its service with a greatly reduced EAS subsidy.” Midwest Energy states that “Attempting to fly Great Lakes is no longer a viable option for our travelers, and today nearly all our company travel is accomplished from Wichita, Kansas City, or Denver; respectively three, four, and five hours away.”

Decision Summary of Proposals Selected

Round Proj.
Community Carrier Hub Aircraft Stops Trips Subsidy Psgrs. Dodge City Great Lakes DEN B-1900 0 18 $2,339,131 15,000
Garden City American DFW R. Jet 0 14 $1,445,172 46,866

Great Bend Seaport ICT C-208 0 18 $1,434,472 3,100
Hays SkyWest DEN R.Jet 0 12 $2,253,132 26,000

Liberal Great Lakes DEN B-1900 0 18 $2,236,180 15,000
$9,708,087

At Dodge City and Liberal, the decision is straightforward in favor o f selecting Great Lakes : Both communities support the selection of Great Lakes ; the levels of subsidy requested by Great

7 The carrier ’s on

- time and completion performance was as follows, respectively: July, 62% and 86%; August, 59% and 89%; September, 65% and 90%; October, 52% and 70%; November 43% and 60%.

8 American’s service at these communities was with regional jets on a code

- shar e partner to a major hub (DFW) of the parent; SkyWest’s proposal reflects similar changes in parameters

– United, regional jets, DEN.- 6

-

Lakes and by SeaPort, the only other applicant, are similar ; 9 and SeaPort proposes service with single

- engine aircraft. 10

The reselec tion of American at Garden City is straightforward: only one carrier submitted a proposal. In addition the carrier requests significantly less subsidy than its current rate and the community fully supports the carrier . W e will therefore re

- select America n

. Because the only bid at Garden City is from American, which is requesting a waiver of the hold

- in provisions of 49 U.S.C. § 41734, we will accept American’s request to cease operations at Garden City on 120 days’ notice under 49 U.S.C. § 40109 as in th e public interest. To not do so would risk Garden City potentially losing its service as no other carrier provided a proposal for service. 11 Under 49 U.S.C. § 40101(a)(11), “maintaining a complete and convenient system of continuous scheduled

interstate a ir transportation f or small communities and isolated areas with direct financial assistance from the United States Government when appropriate” must be considered as being in the public interest as the Department administers the EAS Program.

We now turn t o Hays and Great Bend. 12 Those two communities strongly favor SkyWest and

SeaPort

, respectively, and the difference in annual subsidy between them and Great Lakes is

small

. 13 In addition, Great Lakes contacted us on March 12 to say that they were suspendin g service at Great Bend on April 1, 2014, due to a lack of pilots. I n light of Great Lakes’ recent
inconsistent service

, we assign more than the usual weight to the communities’ recommendation

that we not select Great Lakes

.

Finally , we recognize the a dvantages provided by regional service 14 at Dodge City, Liberal, and Garden City provided by SkyWest and Great Lakes , and selecting SkyWest and SeaPort at Great Bend and Hays will have similar advantages : Great Bend passengers will be able to drive to

nearb y Hays for service to Denver , a large hub and connect to a large selection of destinations,

domestic and international

, while Hays passengers will be able to drive to nearby Great Bend for

service to a different airport, Wichita , a small hub, which provide s service to several destinations across the country

.

Carrier Transition Our goal is to keep all five of these communities on the same time cycle as there could be economies of scale in the out years. However, we are selecting new carriers for Hays (Sky West) and Great Bend (SeaPort), and we do not know when either will be able to inaugurate service.

9 Great Lakes requests a total of $4,575,311 at the two communities while SeaPort requests $4,799,085.

10 Great Lakes initi ally indicated that its bid at Dodge City and Liberal were part of an inseparable package with Great Lakes’ bid at Great Bend and Hays. It recently indicated it has removed that provision from its proposal

. 11 American’s current service is provided subject to that same 120 days ' notice provision.

12 Great Bend ’s support for SeaPort was critically important, because SeaPort ’ s C

- 208 does not meet the statutory
guarantee of twin

- engine aircraft, and could only be selected if the community waived this guarantee.

13 Great Lakes requested $1,975,110 at Great Bend and either $ 1,499,508 or $1,699,520 at Hays, or $3, 4 74,6 1 0

total

. SkyWest requested $2,253,132 at Hays and Sea P ort $1,434,472 at Great Bend , or $3,687,604 total

. 14 By regional service, we mean that at D odge City, Garden City, and Liberal, passengers at each community can drive to nearby airports to obtain air service going to two different hubs.- 7

-

As mentioned above, Gr e at Bend will be without any scheduled service, effective April 1. Thus, we encourage SeaPort to make every effort to begin service a s soon as possible.

Otherwise, i n order to allow for a long lead time, we will set the end of the contracts as July 31, 2016, even if that may result in slightly more than the typical two

- year periods. We expect Great Lakes, SkyWest and SeaPort to work together to make a smooth transition at Great Bend and Hays. In that regard, before Great Lakes suspends its service at Hays and Great Bend, we expect it to notify any passengers holding reservations for travel after the suspension date, to assist those passengers in making alternate air transportation arrangements, or to provide a refund of the ticket price, without penalty, if requested.

Finally, we will make the rates proposed by Great Lakes at Dodge City and Liberal effective from May 1, 2014, thro ugh the twenty

- fourth complete month of service. We will also make the rates proposed by Great Lakes for its service to Hays and Great Bend effective from May 1, 2014, until SkyWest and SeaPort begin service to these communities.

Carrier Fitness

49 U.S .C. §§ 41737(b) and 41738 require that the Department find an air carrier fit, willing, and able to provide reliable service before the Department may subsidize it to provide EAS. American, SkyWest, SeaPort , and Great Lakes are subject to the Department’s continuing fitness requirements, and no information has come to our attention that would cause us to question the

carriers ’ fitness at this time. DOT has contact ed the Federal Aviation Administration, and it has raised no concerns that would negatively a ffect our fitness findings. We therefore conclude that

the four carrier s remain fit to conduct the operations proposed here.

This Order is issued under authority delega ted in 49 CFR Part 1. 25 a (b)

.

ACCORDINGLY,

1 . We select American to provide EAS

, at G arden City, Kansas, as described in Appendices C

- 1 ; SeaPort to provide EAS at Great Bend, Kansas, as described in Appendix C

- 2 ; SkyWest to provide EAS at Hays

, Kansas, as described in Appendix C

- 3 ; and Great Lakes to provide EAS at Dodge City and Liberal, as described in Ap pendices C

- 4 and C

- 5, respectively;

2. We set bridge rates for Great Lakes at Great Bend and Hays, Kansas, as described in Appendices D

- 1 and D

- 2, respectively;

3 . We direct American, Great Lakes, SeaPort , and SkyWest to retain all book s, 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

the 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 i ts compensation for any claim that is not supported under the terms of this Order ;- 8

-

4 . We find that American, Great Lakes, SeaPort

, and SkyWest, continue to be fit, willing and able to operate as commuter and certificated air carrier s and capable of provid ing reliable EAS at Dodge City, Garden City, Great Bend, Hays, and Liberal, Kansas ;

5 . Under our authority in 49 U.S.C. § 40109, w e will allow American t o cease operations at Garden City on 120 days ’ notice;

6 . Th ese docket s will remain open until furth er Order of the Department; and

7 . We will serve copies of this Order on the civic officials of Dodge City, Garden City, Great Bend, Hays, and Liberal, Kansas

, and on American, Great Lakes, SeaPort, and SkyWest

.

By:

S USAN L. K URLAND

Assistant Secret ary for

Aviation and International Affairs (SEAL)

An electronic version of this document is available at http://www.regulations.govAppendix A

Nonstop Great Circle Miles Denver (DEN) to Liberal (LBL) 280 Denver (DEN) to Dodge City (DDC) 292 Denver (DEN) to Hays (HYS) 298

Dallas (DFW) to Gard en City 404 Wichita (ICT) to Great Bend 91

Great Bend to Hays 41 Garden City to Liberal 62 Garden City to Dodge City 43Appendix B

Summary of Proposals Selected

Dodge City Garden City Great Bend Hays Liberal

Carrier Great Lakes American Seaport SkyWest Great Lakes

Docket 1998-3502 1998-3503 1998-3496 1998-3497 1998-3498

Hub DEN DFW ICT DEN DEN Aircraft Type B-1900 Regional Jet C-208 Regional Jet B-1900 Round Trips Per Week 18 14 18 12 18

Seats 1/ 19 50 1/ 9 50 19
Passengers 15,000 46,866 3,100 26,000 15,000 Stage Length 292 404 91 297 280 Completion 97.00% 98.00% 98.50% 98.00% 97.00% Departures Performed 1,822 2/ 1,431 3/ 1,844 4/ 1,223 5/ 1,822 6/

Block Time 1.4000 2/ 1.5000 3/ 0.6665 4/ 1.2333 5/ 1.3330 6/

Annual Block Hours 2,551 2/ 2,147 3/ 1,229 4/ 1,508 5/ 2,429 6/

Passenger Fare $128.75 $119.00 $51.30 $99.00 $128.09

Passenger Revenue 7/ $1,931,250 $5,577,054 $159,030 $2,574,000 $1,921,350

Other Revenue 8/ $11,974 $1,160 $3,976 $0 $11,912

Total Revenue $1,943,224 $5,578,214 $163,006 $2,574,000 $1,933,262

Direct Expenses $2,887,926 $5,650,895 $944,143 $3,529,693 $2,798,370

Indirects $1,190,507 $1,038,043 $577,264 $1,067,576 $1,172,527

Total Operating $4,078,433 $6,688,938 $1,521,407 $4,597,269 $3,970,897

Profit @ 5% $203,922 $334,447 $76,070 $229,863 $198,545

Total Economic $4,282,355 $7,023,385 $1,597,477 $4,827,132 $4,169,442

Annual Subsidy $2,339,131 $1,445,172 $1,434,472 $2,253,132 $2,236,180

1/ The carrier would have flexibility to substitute 44-seat regional jets. 2/ 18 trips x 2 directions x 52 weeks x 313/312 days x .97 = 1,822 deps.; 1,822 deps x 84 minutes = 2,551 3/ 2 trips/day x 2 directions x 365 days x .98 = 1,431 deps.; 1,431 x 90 minutes = 2,147 4/ 18 trips x 2 directions x 52 weeks x .985 = 1,844 deps.; 1,844 x 40 minutes = 1,229 5/ 12 trips x 2 directions x 52 weeks x .98 = 1,223 deps.; 1,223 x 74 minutes = 1,508 6/ 18 trips x 2 directions x 52 weeks x 313/312 days x .97 = 1,822 deps.; 1,822 deps x 80 minutes = 2,429 7/ Projected passengers multiplied by projected passenger fare above. 8/ Difference between passenger revenue above and projected total revenue.Appendix C

- 1

American Airlines

, EAS to be Provided to Garden City, Kansas

Docket 1998

- 3503

Effective Period : May 1, 20 14, through July 31 , 2016;

Service: Fourteen (14) nonstop round trips per week to Dallas (DFW); Aircraft Type : 44

- seat or larger Regional Jet Annual Subsidy : $ 1,445,17 2 Annual Flights : 1,431 1
Subsidy per Flight : $ 1,010 2
Weekly Subsidy Ceiling : $ 28,280 3

T he 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 t he 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 com pleted, 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 jeopardiz e 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 receiv e writ ten 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 op e rated; flights that overfly points for lack of traffic will not be compensated. In determining whether subsidy payment for a deviat ing flight should be adjusted or disallowed, the Department will consider the extent to which the goals of the program are m et 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 locat ion 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 spec ific location without regard t o 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 pa yment.

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 forego ing

p aragraph.

Funds may not be available for performance under this Order beyond September 30, 2014 . The Government’s obligation for performance under this Order beyond September 30, 2014 , is subject to the availability of funds from which payment for service s 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, 2014 , until funds are made available to the Department for performance. If sufficient funds are not made availa ble for performance beyond September 30, 2014

, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which compensation is bein g claimed. For example, claims filed for service provided in July must be filed by October 31; August claims must be submitted by November 30, and so on.

1 14 trips per week x two directions x 52 weeks x 0 .98 completion x 313/312 = 1, 431 flights.

2 $ 1,445,172 ÷ 1, 431 flights.

3 $1,010 per flight x 28 flights per week.Appendix C

- 2

SeaPort Airlines, Inc. , EAS to be Provided to Great Bend, Kansas

Docket 1998

- 3496

Ef fective Period : Start of service through July 31 , 2016 ; 1

Service: Eighteen (18) nonstop round trips per week to Wichita (ICT); Aircraft Type : C

- 208 Caravan Annual Subsidy : $ 1,434,47 2 Annual Flights : 1,844 2
Subsidy per Flight : $ 778 3
Weekly Subsidy Ceilin g : $ 28,008 4

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 ha s 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 question. If the carrier contemplates any such changes beyond the scop e of the order during the applicable period of these rates, it must first notify the Office of Aviation Analysis in writing an d 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 deviat ing 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 amounts or at the stipulated service levels, the carrier may cease to provide service to that spec ific location

wi thout regard 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 pa y ment.

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 t he foregoing paragraph.

Funds may not be available for performance under this Order beyond September 30, 2014 . The Government’s obligation for performance under this Order beyond September 30, 2014 , is subject to the availability of funds from which payme nt 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, 2014 , until funds are made available to the Department for performance. If sufficient funds are not made available for performance beyond September 30, 2014

, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which

compe nsation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims must be submitted by November 30, and so on.

1 At this juncture it is not clear when SeaPort will replace Great Lakes. Because a budgetary marker is required, we

have inserted Ju ly 1 , 2014

. 2 18 trips per w eek x two directions x 52 weeks x 0

. 9 85 completion = 1,844 flights.

3 $ 1,434,472 ÷ 1,844 flights.

4 $ 778 per flight x 36 flights per week.Appendix C

- 3

SkyWest Airlines EAS to be Provided to Hays , Kansas

Docket 199 8

- 3498

E ffective Period : July 1, 2014, through July 31 , 2016; 1

Service: Twelve (12) nonstop round trips per week to Denver ( DEN) ; Aircraft Type : 50

- seat regional jet Annual Subsidy : $ 2,2 53,132 Annual Flights : 1, 223 2
Subsidy per Flight : $ 1, 842 3
Weekly Subsidy Cei ling : $ 44, 208 4

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 signific ant 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 per iod, it may jeopardize its entire subsidy claim for the period in question. If the carrier contemplates any such changes beyond the scop e 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 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 deviat ing 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 amounts or at the stipulated service levels, the carrier may cease to provide service to that spec ific location without regard to any requirement for notice of such cessation. Those adjustments in the levels of subsidy and/or service th at are mutually agreed to in writing by the Department and carrier do not constitute a total or partial reduction or cessation of payment.

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 controver t the foregoing paragraph.

Funds may not be available for performance under this Order beyond September 30, 2014 . The Government’s obligation for performance under this Order beyond September 30, 2014 , is subject to the availability of funds from which pa yment 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, 2014 , until funds are made available to the Department for performance. If sufficient funds ar e not made available for performance beyond September 30, 2014, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which

com pensation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims must be submitted by November 30, and so on.

.

1 At this juncture it is not clear when SkyWest and SeaPort will replace Great Lakes. Because a budgetary marker is required, we have inserted Ju ly 1 , 2 014

. 2 12 trips per w eek x two directions x 52 weeks x 0 .98 completion = 1, 223 flights.

3 $ 2,253,132 ÷ 1, 223 flights.

4 $ 1, 842 per flight x 24 flights per week.Appendix C

- 4

Great L akes Aviation, Ltd., EAS to be Provided to Dodge City , Kansas

Docket 1998

- 3 502

Effective Period : May 1, 2014 , through July 31 , 2016 ; 1

Service: Eighteen (1 8 ) nonstop round trips per week to Denver (DEN); Aircraft Type : Beech 1900 Annual Subsidy : $ 2, 339,131 Annual Flights : 1,822 2
Subsidy per Flight : $ 1,2 84 3
Weekly S ubsidy Ceiling : $ 4 6,224 4

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 othe r 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 f light 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 significa nt period, it may jeopardize its entire subsidy claim for the period in question. If the carrier contemplates any such changes beyond the scop e 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 circumstances warrant, the Department may locate and select a replacement carrier to provide service on these routes. The carrier must complete all fli ghts that can be safely operated; flights that overfly points for lack of traffic will not be compensated. In determining whether subsidy payment for a deviat ing 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 requi rements at a specific location provided for under this order, then, at the end of the period for which the Department does ma ke payments in the stipulated amounts or at the stipulated service levels, the carrier may cease to provide service to that spec ifi c location without regard to any requirement for notice of such cessation. Those adjustments in the levels of subsidy and/or service th at are mutually agreed to in writing by the Department and carrier do not constitute a total or partial reduction or ces sation of payment.

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.

Funds may not be available for performance under this Order beyond September 30, 2014 . The Government’s obligation for performance under this Order beyond September 30, 2014 , is subject to the availability of funds fro m 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, 2014 , until funds are made available to the Department for performance. If sufficien t funds are not made available for performance beyond September 30, 2014, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which compensation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims must be submitted by November 30, and so on.

1 At this juncture it is not clear when SkyWest and SeaPort will replace Great Lakes. Becaus e a budgetary marker is required, we have inserted July 31 , 201 6

. 2 1 8 round trips per w eek x two directions x 52 weeks x 0.9 7 completion x 313/312 = 1, 822 flights.

3 $ 2,339,131 ÷ 1, 822 flights.

4 $ 1, 284 per flight x 36 flights per week.Appendix C

- 5

Great Lakes Aviation, Ltd., EAS to be Provided to Liberal

, Kansas

Docket 1998

- 3 498

Effective Period : May 1, 2014, through July 31 , 2016 ; 1

Service: Eighteen (18) nonstop round trips per week to Denver (DEN); Aircraft Type : Beech 1900 Annual Subsidy : $ 2,236,180 Annual Flights : 1,822 2
Subsidy per Flight : $ 1,2 27 3

W eekly Subsidy Ceiling : $ 4 4,172 4

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 a ny 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 si gnificant period, it may jeopardize its entire subsidy claim for the period in question. If the carrier contemplates any such changes beyond the scop e of the order during the applicable period of these rates, it must first notify the Office of Aviation An alysis 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 deviat ing flight should be adjusted or disallowed, the Department will consider the extent to wh ich 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 servic e requirements at a specific location provided for under this order, then, at the end of the period for which the Department do es 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 subsidy and/or service th at are mutually agreed to in writing by the Department and carrier do not constitute a total or partial reduction or cessation of payment.

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 ope rate to controvert the foregoing paragraph.

Funds may not be available for performance under this Order beyond September 30, 2014 . The Government’s obligation for performance under this Order beyond September 30, 2014 , is subject to the availability of fu nds 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, 2014 , until funds are made available to the Department for performance. If su fficient funds are not made available for performance beyond September 30, 2014, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the mo nth for which compensation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims must be submitted by November 30, and so on.

1 At this junctu re it is not clear when SkyWest will replace Great Lakes. Because a budgetary marker is required,

we have inserted July 31 , 201 6

. 2 18 round trips per w eek x two directions x 52 weeks x 0.97 completion x 313/312 = 1,822 flights.

3 $ 2,236,180 ÷ 1,822 fli ghts.

4 $ 1,2 27 per flight x 36 flights per week.Appendix D

- 1 Bridge Rate

Great Lakes Aviation, Ltd., EAS to be Pr ovided to Hays, Kansas

Docket 1998

- 3497

Effective Period : May 1, 2014 through July 31, 2014 ; 1

Service: Eighteen (18) nonstop round trips per week to Denver (DEN); Aircraft Type : Beech 1900 Annual Subsidy : $ 1,699,520 Annual Flights : 1,822 2
Subsidy per Fl ight : $ 933 3
Weekly Subsidy Ceiling : $ 33,588 4

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 th e 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 consi dered eligible for subsidy.

In addition, if the carrier does not schedule or operate its flights in full conformance with the o rder 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 o f 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 servi ce on these routes.

The carrier m ust 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 c hanges 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 amounts or at the stipulated service levels, the carrier may cease to provide ser vice to that specific location without regard 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 Departmen t and carrier do not constitute a total or part ial reduction or cessation of payment.

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.

Funds may not be available for performance under this Order beyond September 30, 2014. The Government’s obligation for perfor mance under this Order beyond September 30, 2014, is subject to the ava ilability of 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, 2014, until funds are made available to the Department for perf ormance. If sufficient funds are not made available for performance beyond September 30, 2014, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the la st day of the month for which compensation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims must be sub mitted by November 30, and so on.

1 At this juncture it is not clear SkyWest will replace Great Lakes. Because a budgetary marker is required, we have

inserted July 31 , 2014

. 2 18 round trips per w eek x two directions x 52 weeks x 0.97 co mpletion x 313/312 = 1,822 flights.

3 $ 1,699,520 ÷ 1,822 flights.

4 $ 933 per flight x 36 flights per week.Appendix D

- 2 Bridge Rate

Great Lakes Aviation, Ltd ., EAS to be Provided to Great Bend, Kansas

Docket 1998

- 3496

Effective Period : May 1, 2014 through July 31, 2014 ; 1 2

Service: Twelve (12) one

- stop round trips per week to Denver (DEN); Aircraft Type : Beech 1900 Annual Subsidy : $ 1,975,110 Annual Flights : 1 ,822 3
Subsidy per Flight : $ 1,631 4
Weekly Subsidy Ceiling : $ 39,144 5

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 servic e 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 explanat ion supporting subsidy eligibility for a flight that has not been completed, such as certain weather cancellations, only completed flights a re 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 fir st 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 servi ce on these routes. The carrier must complete all flights that can be safely operated; flights that overfly points for lack of traffic will not b e compensated. In determining whether subsidy payment for a deviating flight should be adjusted or disallowed, the Depart ment 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 pay ments 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 amounts or at the stipulated service levels, the carrier ma y cease to provide service to that specific location without regard 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 Departmen t and carrier do not

cons titute a total or partial reduction or cessation of payment.

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.

Funds may not be available for performance under this Order beyond September 30, 2014. The Government’s obligation for perfor mance under this Order beyond September 30, 2014, is subject to the availability of 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, 2014, until funds are made available to t he Department for performance. If sufficient funds are not made available for performance beyond September 30, 2014, the Departm ent will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted wi thin 90 days of the last day of the month for which compensation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims must be sub mitted by November 30, and so on.

1 We expect Great Lakes and SeaPort , and SkyWest to coordinate the carrier transition at Great Bend and Hays.

2 At this juncture it is not clear when SkyWest and SeaPort will replace Great Lakes. Because a budgetary marker is required, we have inserted July 1 , 2014

. 3 12 round trips per w eek x two directions x 52 weeks x 0.97 completion = 1, 211 flights.

4 $ 1,975,110 ÷ 1,211 flights.

5 $ 1,631 per fli ght x 24 flights per week.