Order: 2011

- 9

- 10 Served: September 15, 2011



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 15 th day of September , 20 1 1

Essential Air Service at

CEDAR CITY, UTAH DOCKET DOT

- OST

- 2003

- 16395

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



### ORDER RE

- SELECTING CARRIER

Summary By this order, the Department is re

- selecting SkyWest Airlines, operating as Delta Connection (SkyWest)

, to provide essential air service (EAS) at Cedar City, Utah

, using

50

- seat Canadair Regional Jet 200 aircraft for a two

- year period beginning J anuary 1, 2012, through December 31

, 2013

, fo r an annual subsidy of $ 2,273,395

. 1

Background By Order 2009

- 11

- 7, November 5, 2009 , the Department selected SkyWest to provide

EAS at Cedar City for the period from J anu ary 1, 2010, through December 31

, 2011 , for an annual subsidy of $1, 477,125 for 12 nonstop round trips per week to Salt Lake City International Airport (Salt Lake City) on 30

- seat Embraer Brasilia aircraft.

As the end of the contract was approac hing, we issu ed Order 2011

- 6

- 27

, June 27, 2011, requesting proposals from carriers intereste d in providing EAS at the community

, for a

new
, two

- year period beginning January 1, 2012 . In response to that order, we received

prop osals from the incumbent, SkyWest , as well as SeaPort Airlines, Inc. (SeaPort).

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

funds.- 2

-

Each carrier’s complete proposal and community comments may be accessed online at http://www.regulations.gov/ by entering Docket number DOT

- OST

- 2003

- 16395 in the

search block

.

Proposal of SkyWest SkyWest proposed two weekday and two weekend nonstop round trips (12 a week) to Salt Lake City usi ng 50

- seat Canadair Regional Jet 200 aircraft for an annual subsidy of $ 2,273,395

.

Proposal of SeaPort SeaPort proposed three weekday and three weekend nonstop round trips (18 a week) to

Salt Lake Cit y using 9

- seat Pilatus PC

- 12 aircraft for an annual subsidy of $ 1,956,900.

Community Comments

On August 4 , 2011, we requested community comments regard ing this carrier

- selection

case. In response, we received letters from Joe Burgess, Mayor of Cedar City, the City Council of Cedar City, and Russ Volk, Airport Manager at Cedar City Regional Airport. All three letters overwhelmingly supported SkyWest for a new two

- year term. Mayor Burge ss states: “SkyWest has served this community for more than 30 years, and over this time has earned a sterling reputation for reliable, quality performance. Over the past four months, our enplanement numbers have been 35 to 50 higher than the same period last year.” Mr. Volk commented

, “It is my belief that the planned switch to regional jets will generate additional passenger flows, thus creating increased economic development opportunities and tourism travel to visit local attractions, as well as our ma ny regional national monuments and parks.” All three letters clearly stated tha t Cedar City will not

waive its entitlement to 15

- s eat or larger aircraft, and therefore cannot support th e proposal put forth by SeaPort.

Decision The decision is straightfo rward and clearly points to the re

- selection of SkyWest for a new

, two

- year term. The community fully supports SkyWest’s proposal and the airline has provided reliable EAS at Cedar City for several years. We acknowledge that SkyWest’s subsidy request is significantly higher than its present subsidy, although that is due at least in part to the upgrade in aircraft from 3 0

- seat Brasilia’s to 50

- seat regional jets. ( However

, because the community has seen an increase in enplanements

, the per passenger subsi d y is $122, well under the $200 subsidy cap. ) Moreover, the community has affirmatively not waived its right to 15

- seat or larger aircraft.

W e shall make this selection of SkyWest at Cedar City contingent upon the Department’s receiving properly executed certifications from the carrier that it is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations concerning lobbying activities.- 3

-

Carrier F itness

49 U.S.C. 41737(b) and 41738 require that we find an air carrier fit, willing, and able to provide reliable service before we may subsidize it to provide essential air service

. SkyWest 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 carrier's fitness at this time. We have contacted the Federal Aviation Administration, and it has raised no concerns that would negatively affect our fitness finding s . We t herefore 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 1.56a(f).

ACCORDINGLY,

1. We select SkyWest Airlines, operating as Delta Connection, to provide essential air

service at Cedar City, Utah

, an d establish an annual subsidy rate of $ 2,273, 395

, as described in Appendix C;

2. We direct SkyWest Airlines to retain all books, records, and other source and summary documentation to support claims for payment, and to preserve and maintain such documentation in a manner that readily permits its audit and examination by representatives of the Department. Such documentation shall be retained for seven years or until the Department indicates tha t 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 SkyWest Airlines continue s to be fit, willing and able to operate as a certificated carrier

, and capable of providing reliable essential air service at Cedar City ;- 4

-

4. This docket will remain open pending further Department action ; and

5 . We will serve copies of this order on the Mayor of Cedar City

, the City Council of Cedar City, the airport manager of Cedar City Regional Airport, SkyWest Airlines

, and SeaPort Airlines, Inc.

B y:

SUSAN L. KURLAND Assistant Secretary for

Aviation an d International Affairs

(SEAL)

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



## AREA MAPAppendix BAppendix C

SkyWest Airlines

Essential Air Service to be Provided at Cedar City, Utah

Effective Period : January 1, 2012, through December 31 , 2013

Scheduled Service : Two weekday and weekend nonstop round trips (12 a week) to Salt Lake City

Aircraft : 50

- seat passenger Canadair Regional Jet 200 (CRJ200) Rate per Eligible Flight: $ 1,859 ; 1
Weekly Ceiling : $44,616 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 understan ds 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 fligh ts are considered eligible for subsidy. In addition, if the carrier does not schedule or operate its flights in full conformance with the order for a significant period, it may jeopardize its entire subsidy claim for the period in question. If the carrie r 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 co mpensated. 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 complete ly , 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 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 Department and the carrier do not constitute a total or partial reduction or cessation of payment.

Funds are not currently available for performance under this order beyon d September 30 , 2011

. The Department’s obligation for performance under this order beyond September 30 , 2011 , 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 , 2011 , until funds are made available to the Department for performance. If funds are not made available for perf ormance beyond September 30 , 2011 , the Department wi ll provide notice in writing to the carrier.

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 t hereto shall not operate to controvert the foregoing paragraph.

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

1 Annual compensation of $2,273,395 divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98 percent completion).

2 24 arrivals and departures per week multiplied by $1,859 per flight.