Order 2011

- 11

- 26

Served: November 22, 2011



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 22th day of Novemver , 20 11

Essential Air Service at

BAR HARBOR, MAINE

PRESQUE ISLE /HOULTON , MAINE

PLATTSBURGH, NEW YORK

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 2011

- 0185

DOCKET DOT

- OST

- 2000

- 8012

DOCKET DOT

- OST

- 2003

- 14783



### ORDER PROHIBITING TERMINATION OF SERVICE AND

REQUESTING PROPOSALS

Summary

By this order, the Departme nt is (a) prohibiting Colgan Air, Inc., operating as US Airways

Express (Colgan )

, from terminating its subsidized service at Bar Harbor and Presque

Isle /Houlton

, Maine (Presque Isle) , and Plattsburgh, New York, and (b) requesting proposals

from airlines interested in p roviding replacement es sential air service (EAS) at any or all of th e

communities, with or without subsidy. Pr oposals are due by December 20

, 2011

. (See

Appendix A for a map.)

Background

Colgan has served Presque Isle for several years and was re

- selected in 2010 to provide EAS

for another two

- year contract. Colgan replaced Cape Air in 2010 at Bar Harbor and Plattsburgh

as the communities’ EAS carrier. On September 9, 2011, Colgan filed notice of its intent to

termi nate its subsidized service at all three communities, as summariz ed below:

Community Annual

Subsidy Order Thru Hub Weekly

Round

Trips Stops Aircraft

1. Bar Harbor $2,298,533 2010

- 9

- 28 10/31/12 BOS 14 0 Saab 340

2. Plattsbu r gh $2,117,101 2010

- 3

- 27 06/30/12 BOS 12 0 Saab 340

3 Presque Isle $2,812,853 2010

- 6

- 5 05/31/12 BOS 19 0 Saab 340- 2

-

Hold

- In

Colgan’s proposed termination of service at these communities would leave them with no

scheduled air service. Thus, the Department must prohibit Colgan from terminating such

service for 30 days beyond the end of their 90

- day notice period, through January 7, 2012 , and

will require them to maintain the current level of service at all three communities, for

successive 30

- day periods until we have completed processing the carrier

- replacement case and

the selected carrier(s) begins full EAS.

Request for Proposals

Carriers should file their proposals no later than December 20

, 2011 . After that date, our staff

will docket proposals, thereby making them public, and shortly afterwards will provide a

summary of the proposals to the community and ask them for their final comments. We will

give full consideration to all proposals filed in a timely manner.

Interested carriers should prepare their proposals with every expectation that their initial

proposals will also be their final and only p roposals. We retain the discretion to negotiate

proposals with carriers when we deem it desirable. We also retain the discretion to reject

outright all unreasonable or unrealistic proposals and solicit a new round of proposals.

Carrier proposals should be submitted to the Department with all materials merged into a single

document. In addition, because the document will be published on Regulations.gov, each page

should be formatted to be viewed online.

We are here providing interested carriers with som e basic information to serve as guidance

when they prepare their proposals, but we will not prescribe a precise format. We expect

proposals to adequately describe the service being proposed and the annual amount of subsidy

being requested. The applicants can make their own judgments as to the level of detail they

wish to present; however, they might want to include proposed schedules as well as supporting

data for their subsidy requests, such as projected block hours, revenues and expenses. We

strongly e ncourage clear, well

- documented proposals that will facilitate their evaluation by the

affected community and the Department. 1

Carriers are also welcome to propose more than one option, if they choose; they need not limit

themselves to those requirements if they envision other, potentially more attractive service

possibilities

-- different hubs, frequency or equipment, for example

-- with subsidy

requirements that remain competitive. The community and air carriers are encouraged to work

together in advanc e of the due date for proposals to craft a service pattern that is desirable to

the communit y and meets the operational needs of the airline s

.

1 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c)( 1) directs us to consider

four factors: (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub;

(3) interline arrangements with a larger carrier at the hub; and (4) community views. In addition, the

Consolidat ed Appropriations Act, 2008, Public Law 110

- 161 , provides that when selecting a carrier to provide

EAS, the Department may consider the relative subsidy requirements, thus codifying a factor that we have

considered since the inception of the program. Interested carriers should also be aware that our general

provisions governing EAS will be included in the selection order as part of our authorization of subsidy for the

sele cted service. Appendix C of this order contains those general provisions.- 3

-

Proposals should provide sufficient capacity to accommodate historical levels of traffic. We

expect service le vels that are comparable with what the communities currently receive , with

nonstop service to Boston or any large or medium hub that offers access to the national air

transportation system

. In order to assist carriers in developing traffic and revenue projections

for their proposals, we have provided a summary of historical passengers in Appendix B. For

the year ended June 30, 2011, Bar Harbor, Plattsburgh, and Presque Isle averaged 37, 42, and

47 enplanements a day, respectively.

At Bar Harbor, we note the season ality of enplanements with the third quarter seeing a

significant increase in passengers. During the July 1

– September 30, 2010, quarter,

Bar Harbor generated more passengers than in the other nine months of the year combined,

averaging 78 enplanements a day. For proposals with 30

- 34

- seat aircraft, the Departme nt

expects two round trips each weekday and weekend (12 a week) year round. For proposals

using 19

- seat aircraft, we woul d expect proposals for two round tr ips each weekday and

weekend (12 a week) in the off

- peak season, and three or four round trips each weekday and

weekend ( 18 or 24 a week) during the summer peak season.

With respect to Platt sburgh

, we expect proposals for two round trips each weekday and

weekend (12 a week) using 30

- 34

- seat aircraft, or three round trips each weekday and weekend

(18 a week) using 19

- seat aircraft.

With respect to Presque Isle

, under EAS statutes the community is guaranteed 67 seats p er day

in each direction, which would work out to be two round trips each day. However, due to the

very long stage length to Boston and the resultant need to carry a full load of fuel, under IFR

conditions Colgan’s Saab aircraft are limited to 28

- 31 seats (depending on direction). We

therefore will accept proposals for 19 weekly round trips using 30

- 34

- seat aircraft or 24 weekly

round trips using 19

- seat aircraft.

As always, we will formally solicit the community’s views on any service options we receive

before making a long

- term carrier selection decision.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying

activities, drug

- free workplaces and nondiscrimination. 2 Consequently, all carriers receiving

Federal subsidy to support essential air service must certify that they are in compliance with

Department regulations regarding drug

- free workplaces and nondiscrimination, and those

carriers whose subsidies exceed $10 0,000 over the life of the rate term must also certify that

they are in compliance with the regulations governing lobbying activities. All carriers that plan

to submit proposals involving subsidy should submit the required certifications along with their

proposals. Interested carriers requiring more detailed information regarding these

requirements, as well as copies of the certifications, should contact the Office of Aviation

2 The regulations applicable to these areas are: (1) 49 CFR Part 20

– New restrictions on lobbying; (2) 49 CFR

Part 21

– Nondiscrimination in federally

- assisted programs of the De partment of Transportation

– Effectuation of

title VI of the Civil Rights Act of 1964; 49 CFR Part 27

– Nondiscrimination on the basis of disability in programs

and activities receiving or benefiting from Federal financial assistance; and 14 CFR Part 382

– Nondiscrimination

on the basis of disability in air travel; and (3) 49 CFR Part 29

– Government

- wide debarment and suspension (non

procurement) and government

- wide requirements for drug

- free workplace (grants).- 4

-

Analysis at (202) 366

- 5903. The Department is prohibited from paying subsidy t o carriers that

do not submit these documents. 3

Community and State Comments

Civic officials are welcome to submit comments on the proposals at any time. As noted earlier,

we will provide a summary of the proposals to the civic parties and ask them to su bmit their

final comments shortly after December 20 , the due date for carrier proposals.

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

ACCORDINGLY,

1. We prohibit Colgan Air, Inc., operating as US Airways Express, from suspending service at

Bar Harbor and Presque Isle /Houlton , Maine, and Plattsburgh, New York, at the end of the 90

- day notice period, and require it to maintain service at the communities, as set forth in

Appendix D, for an initial 30

- day period through January 7

, 20 1 2 , or until a carrier capable of

providing reliable EAS actually begins service, whichever is first 4 ;

2. We request that carriers interested in providing essential air service at Bar Harbor and

Presque Isle, Maine, and Plattsburgh, New York

, submit thei r proposals, with or without

subsidy requests, no later than December 20 , 2011 . The proposals should be emailed to:

EAS@dot.gov with the title “Proposal to Provide Essential Air Service at Bar Harbor and

Presque Isle, Mai ne, and Plattsburgh, New York ”; 5

3 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.

4 In accordance with 49 U.S.C. 41734(c), we will extend Colgan Air’s service obligation for successive 30

- day

periods as necessary until replacement service actually begins.

5 Questions regarding fi lings in response to this order should be directed to Michael Martin at 202

- 366

- 6494, or

via email at michael.f.martin@dot.gov

.- 5

-

3

. These docket s will remain open until further order of the Department; and

4

. The Department will serve a copy of this order on the mayor s and airport manager of Bar

Harbor

, Plattsburgh, Presque Isle, Colgan Air, Inc.

, and t he service list for this Docket

.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available on line at

www.regulations.gov

### Appendix A



## Area Map

### APPENDIX B

Page 1 of 3

Historical Origin

- Destination Plane Traffic 1



### Bar Harbor, Maine

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per Day

3 2008 4,979 5,270 10,249 65

4 2008 1,492 1,572 3,064 19

1 2009 686 715 1,401 9

2 2009 2,163 1,689 3,852 25

Annual

Totals 9,320 9,246 18,566 30

3 2009 5,427 5,420 10,847 69

4 2009 1,692 1,793 3,485 22

1 2010 837 902 1,739 11

2 2010 2,664 2,294 4,958 32

Annual

Totals 10,620 10,409 21,029 34

3 2010 6,166 6,172 12,338 78

4 2010 1,576 1,676 3,252 21

1 2011 1,041 1,095 2,136 14

2 2011 2,937 2,492 5,429 35

Annual

Totals 11,720 11,435 23,155 37

1 Source: USDOT Bureau of Transportation Statistics, TransStats Intermodal Datab ase, Schedule T

- 1 00

.

### APPENDIX B

Page 2 of 3

Historical Origin

- Destination Plane Traffic 1



### Presque Isle/Houlton, Maine

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per Day

3 2008 3,656 3,721 7,377 47

4 2008 3,120 3,238 6,358 40

1 2009 2,786 2,829 5,615 36

2 2009 3,581 3,236 6,817 44

Annual

Totals 13,143 13,024 26,167 42

3 2009 3,942 3,944 7,886 50

4 2009 3,169 3,291 6,460 41

1 2010 3,161 3,233 6,394 42

2 2010 3,721 3,567 7,288 47

Annual

Totals 13,993 14,035 28,028 45

3 2010 4,302 4,354 8,656 55

4 2010 3,716 3,803 7,519 48

1 2011 3,097 3,304 6,401 42

2 2011 3,659 3,276 6,935 44

Annual

Totals 14,774 14,737 29,511 47

1 Source: USDOT Bureau of Transportation Statistics, TransStats Intermodal Database, Schedule T

- 1 00

.

### APPENDIX B

Page 3 of 3

Historical Origin

- Destination Plane Traffic 1



### Plattsburgh, New York

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per Day

3 2008 1,542 1,505 3,047 19

4 2008 1,133 1,117 2,250 14

1 2009 953 969 1,922 12

2 2009 1,319 1,321 2,640 17

Annual

Totals 4,947 4,912 9,859 16

3 2009 1,611 1,564 3,175 20

4 2009 1,392 1,487 2,879 18

1 2010 1,287 1,340 2,627 17

2 2010 1,498 1,607 3,105 20

Annual

Totals 5,788 5,998 11,786 19

3 2010 4,146 4,334 8,480 54

4 2010 3,572 3,617 7,189 46

1 2011 2,758 2,819 5,577 36

2 2011 2,574 2,561 5,135 33

Annual

Totals 13,050 13,331 26,381 42

1 Source: USDOT Bureau of Transportation Statistics, TransStats Intermodal Database, Schedule T

- 1 00 for Cape

Air and Colgan

.

### Appendix C

Example of General Terms and Conditions for Essential Air Service

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 ope rate

its flights in full conformance with the order for a significant period, it may jeopardize its entire

subsidy claim for the period in question. If the carrier contemplates any such changes beyond

the scope of the order during the applicable period of these rates, it must first notify the Office of

Aviation Analysis in writing and receive written approval from the Department to be ensured of

full compensation. Should 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 amounts

or at the stipulated servi ce 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 that are mutually agreed to in writing by the Departmen t 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 suc h statutes, regulations,

or amendments thereto shall not operate to controvert the foregoing paragraph.

Funds are not currently available for performance under this solicitation beyond [DATE] . The

Department’s obligation for performance under this soli ci tation beyond [DATE] , is contingent

upon 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 [DATE] , until f unds are made available to the Department for performance. If

funds are not made available for performance beyond [DATE] , the carrier will receive notice in

writing by the Department.

All claims for payment must be submitted within 60 days of the last da y of service provided

under this order.

### APPENDIX D

Essential Air Service to be Maintained at Bar Harbor, Maine

Effective Period : December 8 , 2011, until further Department action

Scheduled Service : 14 weekly nonstop round trips between Bar Harbor and Boston

Aircraft : 34

- seat Saab 340

Essential Air Service to be Maintained at Presque Isle/Houlton, Maine

Effective Period : December 8, 2011, until further Department action

Scheduled Service : 19 weekly nonstop round trips betwee n Presque Isle/Houlton and Boston

Aircraft : Saab 340

Essential Air Service to be Maintained at Plattsburgh, New York

Effective Period : December 8, 2011, until further Department action

Scheduled Service : 12 weekly nonstop round trips between Plattsburgh and Boston

Aircraft : 34

- seat Saab 340