Order: 20 10

- 1 1

- 9 Served: November 10 , 20 1 0


### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Issued b y the Department of Transportation on the 10 th day

of November , 20 10

DO T - OST - 1996 - 1902 DOT - OST - 1996 - 1903

ORDER REQUESTING PROPOSALS Summary By this order , the Department is requesting proposals from carriers interested in providing essential air service (EAS) at Clovis and Silver City /Hurley /Deming, New Mexico (Silver City ) , for the next two
- ye ar period from May 1, 2011, through April 30, 2013 , with or without subsidy

. Proposals are due December 8, 2010

. ( See Appendix A for an area map.) Background By Order 200 9

- 3

- 3, March 6, 2009 , the Department selected Great Lakes Aviation, Ltd. (Great Lakes) to provide 1 2 nonstop round trips per week from Clovis to Albuquerque or Dallas and 12 nonstop round trips per week from Silver City to Albuquerque or Phoenix using 19

- p assenger Beech 1 900

- D aircraft, f

rom May 1, 2009, through April 30, 2011, at a combined annual subsidy rate of $2,959,451 ($1,517,277 for Clovis and $1,442,174 for Silver City)

. Great Lakes has served both communities from Albuquerque International Sunport during the entire rate term. Request for Proposals A s the end of the current rate term approaches , w e are here requesting proposals from carriers interested in providing service at Clovis and Silver City, with or without subsidy , to be file d no later than December 8, 2010

. A fter that date, our staff will docket the proposals, thereb y making them public. Shortly

afterwards, we will provide a summary of the proposals to the communities and ask Essential Air Service at CLOVIS, NEW MEXICO SILVER CITY/HURLEY/DEMING, NEW MEXICO under 49 U.S.C. 41731 et seq.- 2

-

them to submit their final comments. We will give full consideration to all proposals that are timel y filed. 1 Interested carriers should prepare their proposals with every expectation that their initial proposals will represent their final and only proposals. However, we retain the discretion to negotiate proposals with carri ers when we deem it desirable. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and sol icit a new round of proposals. We are here providing interested carriers with some basic information to serve as guidance when they prepare their proposals, but we will not prescribe a precise format for their proposals. 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 strongl y encourage clear, well

- documented proposals that will facilitate their evaluation by the affected communities and the Department. 2 With respect to Clovis and Silver City, w e ask that carriers submit proposals for two round trips per day (12 round trips per week) with 15

- seat or larger aircraf t to Albuquerque, Dallas/Fort Worth, Denver, Phoenix, or another suitable hub where numerous connections to the national air transportation sy stem can be made. Service to nearby hubs should be nonstop while service to Denver, for example, can be nonstop or one

- stop
. Both communities are guaranteed service with 15

- seat or larger aircraft ; however, we would also entertain proposals for eight

- or nine

- seat aircraft with an additional frequency (18 nonstop round trips per week) for either or both communities. If the Department receives proposals for eight

or nine

- seat, and the community ultimatel y supports the service, in effect waiving their right to 15

- seat or larger aircraft, we would consider the waiver to appl y onl y to the carrier

- selectio n at hand, i.e. we would not assume that the community would waive their rights for all time. As alway s, we will formally

solicit the communities’ views on any service options we receive before making a long

- term carrier selection decision. The c ommunities and air carriers are encouraged to work together in advance of the due date for proposals to craft a service pattern that is desirable to the community and meets the operational needs of the airline

. In addition, carriers should be very clear a s to whether a specific

1 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide essential air service without subsidy and we determine that service can be reliably provided without such compensation, we do not proceed with the carrier

- selection case. Instead, we sim ply rely on that carrier’s subsidy

free service as proposed. 2 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 Consolidate d 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 essential air service will be included in the selection order as part of our authorization of subsidy for the selected service. Appendix C of this order contains those genera l provisions.- 3

-

community ’s proposal is on a stand

- alone basis, or whether it is part of a larger, inseparable package with other communities. We encourage proposals that meet these requirements in an efficient manner. Carriers are also welcome t o propose more than one service option, if they choose; they

need not limit themselves to those requirements if they envision other, potentially more attractive service possibilities

-- different hubs or length of service terms , for example

-- with subsidy requirements that remain competitive. New Filing Procedures Carrier proposals s hould be s ubmitted to the Department with all materials merged into a single document. The document will be published on Regulations.gov and each page should be formatted to be viewed online. Service and Traffic History For the 12

- month period ending August 31 , 2010 , th e most recent period for which traffic data are available, Clovis averaged 6.8 enplanements per day and Silver City averaged 5.1

. 3 In order to assist carriers in making their traffic and revenue forecasts, we have included historical traffic data in Appendix B. Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobb yi ng activities, drug

- free workplaces, and nondiscrimination. 4 Consequently , all carriers receiving Federal subsidy for 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 $100,000 over the life of the rate term must also certify that they are in compliance with the regulations governing lobb yi ng activities. Because the Department is prohibited from paying subsidy to carriers that do not submit these documents, all carriers that plan to submit proposals involving subsidy should be aware that the selected carrier will be required to complete the required certifications. Interested carriers requiring more detailed information regarding these requirements should contact the Office of Aviation Analy sis at (202) 366

- 5903. 5 Community and State Comments The communities and state are welcome to submit comments on the proposal s at any time. As noted earlier, however, we will provide a summary of the proposals to the civic parties and ask them to submit their final comments shortly after December 8, 2010 , the due date for proposals.

3 See Appendix B for historical traffic data. Enplanements represent one

- half of total origin

- and

- destination traffic, and average enplanements per day are based on 77 we ekdays and weekends each quarter , except as noted. 4 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 Department 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

– Governme nt
- wide debarment and suspension (non

procurement) and government

- wide requirements for drug

- free workplace (grants). 5 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.- 4

-

This order is issued under authority delegat ed in 49 CFR 1.56a(f) and re

- delegated to the Director, Office of Aviation Analy sis. ACCORDINGLY, 1. We request that carriers interested in providing essential air service at Clovis and Silver City /Hurley /Deming, New Mexico , for the two

- ye ar period from May 1, 2011, through April 30, 2013 , submit their proposals, with or without requests for subsidy , no later than December 8, 2010

. The proposals should be e - mailed to EAS@dot.gov , with the title: “Proposal to Provide Essential Air Service at Clovis (Docket DOT

- OST

- 1996

- 1902) and /or Silver City /Hurley /Deming, New Mexico (Docket DOT

- OST

- 1996

- 190 3 ) ; 6 2. Th ese docket s will remain open until further order of the Department; and 3 . We will serve co pies of this order on the Mayor s of Clovis, Silver City, Deming, and Hurley , the managers of Clovis Municipal Airport and Grant County Airport (serving Silver City , Deming, and Hurley) , and the parties listed in Appendix D
. Persons entitled to petition the Department for review of this order under the Department’s Aviation Economic Regulations, 14 CFR 385.50, must file such petitions within ten (10) day s after the date of service of this order.
This order will be effective immediately , and the filing of a petition for review shall not preclude its effectiveness. By :

TODD M. HOMAN Director Office of Aviation Anal ysis (SEAL) An electronic version of this document is available at http://www.regulations.gov

6 Questions regarding filings in resp onse to this order may be directed via electronic mail to Kevin Schlemmer at kevin.schlemmer@dot.gov or via phone at (202) 366

- 3176.Appendix A


## AREA MAP

This map is provided by Sabre ® AirVision TM Profit Essentials and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Appendix B Page 1 of 2 Traffic History 7 Clovis, NM (CVN)

Year Month Quar

te r Ou tb ound Inbound Tota l 2008 9 3 191 206 397 2008 10 4 170 192 362 2008 11 4 177 175 352 2008 12 4 181 204 385 2009 1 1 163 133 296 2009 2 1 162 161 323 2009 3 1 173 177 350 2009 4 2 152 150 302 2009 5 2 146 156 302 2009 6 2 222 186 408 2009 7 3 217 208 425 2009 8 3 176 170 346 4,248 2009 9 3 159 162 321 2009 10 4 183 173 356 2009 11 4 157 175 332 2009 12 4 173 177 350 2010 1 1 176 138 314 2010 2 1 174 154 328 2010 3 1 167 149 316 2010 4 2 172 193 365 2010 5 2 213 215 428 2010 6 2 154 137 291 2010 7 3 210 194 404 2010 8 3 218 215 433 4,238 Average dail y enplanements at Clovis (12

- m onths ending 8 /31/2010 )

– 6.8 8

7 Source

– T
- 100 Market Report, Passengers in Scheduled Passenger Service. Great Lakes Airlines service only. 8 Average daily enplanements= total traffic for the most recent 12

- month period ( 4,238 passengers) divided by 313 service days divided by 2.Appendix B Page 2 of 2
Silver City, NM (SVC) 9

Year Month Quarter In bound Ou

tb ound Tota l 2008 9 3 229 242 471 2008 10 4 243 225 468 2008 11 4 163 167 330 2008 12 4 179 178 357 2009 1 1 170 151 321 2009 2 1 143 147 290 2009 3 1 155 153 308 2009 4 2 172 162 334 2009 5 2 158 164 322 2009 6 2 150 166 316 2009 7 3 153 137 290 2009 8 3 167 179 346 4,153 2009 9 3 145 152 297 2009 10 4 153 158 311 2009 11 4 115 118 233 2009 12 4 143 136 279 2010 1 1 124 120 244 2010 2 1 122 121 243 2010 3 1 113 104 217 2010 4 2 141 127 268 2010 5 2 152 149 301 2010 6 2 136 113 249 2010 7 3 148 163 311 2010 8 3 108 116 224 3,177
Average dail y enplanements at Silver City (12

- months ending 8/31/2010)

– 5.1 10

9 Source

– T
- 100 Market Report, Passengers in Scheduled Passenger Service. Great Lakes Airlines service only. 10 Average daily enplanements= total traffic for the most recent 12

- month period ( 3,177 passengers) divided by 313 service days divided by 2.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 outl ined 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 supporti ng 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 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 Analy sis 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 c arrier must complete all flights that can be safel y 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 cons ider 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 serv ice 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 pay ments in the stipulated amounts or at the stipulated service levels, the carrier may cease to pro vide 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 mutuall y agreed to in writing b y the Department and carrier do not constitute a total or partial reduction or cessation of pay 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 the foregoing paragraph. Funds are not currently

available for performance under this solicitation beyond [DATE]

. The Government’s obligation for perform ance under this solicitation beyond [DATE] , is contingent upo n the availability of appropriated funds from which pay ment 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 funds 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 pay

ment must be submitted within 60 day s of the last day of service provided under this order

.Appendix D Scheduled Air Carriers, Contiguous US and Puerto Rico Air Greco/Wings Air McCall Aviation, Michelle Air Sunshine, Inc. Mesa Air, Michael Lotz Air Sunshine, Mirmohammad Adili Mesaba, John Spanjers Air West, Inc., John Raatz Mesaba, Max Shemesh Air Wisconsin, Annette Daly MidStar Airlines, Jeffrey Fonner Air Wisconsin, Jim Rankin Midwest Airlines, Greg Aretakis Airline Associates, Bill Mishk MN Aviation, Jose Maldonado Alaska Airlines, Jeff Cole Multi Aero, Darnea Alaska Airlines, Sandy Sinick Multi Aero, Shane Storz Allegiant Air, Brian Davis Northern Air Cargo, David Karp American Airlines, Carl Nelson Northern Air Cargo, Eric Van Andel American Eagle, Jeffrey Hartz Northwest, Tim McDonald Atlantic Southeast, Jon Lindlief Northwest, Aaron Murray Atlantis Southeast, Roger Weston NYDC, Henok Araya Aviation Technologies/Charter Air Transport OST, Brian Swanson Bemidji Aviation, Cori Rude OST, Dennis DeVany Bemidji Aviation, Arlen Rinkenberger OST, Kevin Adams Cape Air, Andrew Bonney OST, Kevin Schlemmer Cape Air, Dan Wolf OST, Michael Martin Cape Air, J. Flaherty OST, Renee Williams Classic Aviation, Tony Henderson Pacific Aviation Group, Craig Garrick Colgan Air, Mike Colgan Pacific Aviation Group, Ron Pye Colgan Air, Kevin Scott Pacific Wings, Frank Ford CommutAir, Andy Price Pacific Wings, Greg Kahlstorf CommutAir, Joel Raymond PenAir, Danny Seybert Consultant, Robert Silverberg PenAir, Scott Bloomquist Continental, Bruce Keiner Pinnacle Airlines, Joe Williams Continental, Dan Weiss Pinnacle Airlines, Phil Reed Continental, Lorry Halloway Pla nemasters, Inc. John Kessler Delta, Anthony Canitano Pla nemasters, Inc. Paul Berliner Delta, Dan Shuman Pla nemasters, Inc. Todd DeSimone Delta, Jeff Morgan Raytheon, Mike Scheidt Delta, Joe Esposito Saab Group, Polly Prelinger Delta, Karen Zachary Scenic, Mary Schneider Delta, Kristal Murphy Scenic, Mitzi Daines Delta, Sascha Vanderbellen Seaborne Airlines, Shawn Lewis DHS, Bill Ragan SeaPort Airlines, Daniel Helland DHS, David Bernier SeaPort/Wings of Alaska , Jim Day Dorado Jets SeaPort/Wings of Alaska, Nate Vallier Dorado Jets, Mark McKenna SeaPort/Wings of Alaska , Rob McKinney Era Aviation, Lori Goodman Shuttle America, Jerry Balsano Executive Airlines, Kate Soled SkyWest, Brad Rawson Frontier Flying, Bob Hajducovich SkyWest, Eric Christensen Frontline Aviation SkyWest, Michael Thompson Gem Air, Dan Schroeder Sovereign Air, Bob Karns Gem Air, JoAnn Wolters Sovereign Air, Lois R. Barton Great Lakes, Chuck Howell Tatonduk, Robert Everts Great Lakes, Doug Voss Tatonduk, Robert Ragar Gulfstream, Dave Hackett Tradewind, Eric Zipkin Gulfstream, Mickey Bowman TransStates, Fred Oxley Gulfstream, T. Cooper TransStates, Gerry Wigmore Horizon Air, Dan Russo Transport Azumah, Joel Anabilah

- Azumah Horizon Air, Jennifer Thompson United, Alicia Gabriel Horizon Air, Mike McQueen United, James Starnes Horizon Air, Jeff Cole US Airways, Benjamin Slocum ICEPR, Luis Irizarry US Airways, Howard Kass Intrepid Internatl Air, Rick Eyk US Airways, Jason Reisinger Island Air Charters, Linda House Warbelows Air Ventures, Art Warbelow Jet Air, Daniel Wolford Kenmore Air, Tim Brooks McCall Aviation, Dan Scott