Or der: 20 1 2

- 9

- 23

Served : September 27 , 201 2



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 27 th of September , 201 2

Essential Air Service at

BRADFORD, PENNSYLVANIA DuBOIS, PENNSYLVANIA

FRANKLIN/ OIL CITY, PENNSYLVANIA JAMESTOWN, NEW YORK PARKERSBURG, WEST VIRGINIA/ MARIETTA, OHIO

Under 49 U.S.C. 41731 et seq

. Docket DOT

- OST

- 2003

- 14528

Docket DOT

- OST

- 2004

- 17617

Docket DOT

- OST

- 1997

- 2523

Docket DOT

- OST

- 2003

- 14950

Docket DOT

- OST

- 2005

- 20734

ORDER SELECTING CARRIER

Summary By this O rder

, the Department is s electing Silver Airways ( “ Silver ” ) to provide E ssential A ir

S ervice (EAS) at Bradford, DuBois, Franklin/Oil City (“Franklin”), Pennsylvania, Jamestown, New York, and Parkersburg, West Virginia/Marietta, Ohio (“Parkersburg”)

, for a combined annual subsidy of $10,348,117 ($1,940,272 for Bradford; $2,587,029 for DuBois, $1,293,515 for Franklin, $1,940,272 for Jamestown, and $2,587,029 for Parkersburg), from October 1, 2012

, through September 30, 2014

. 1

Background By a series of Orders, 2 the Department selected Gulfstream International Airlines, which was renamed Silver Airways in December 2011, to provide subsidized EAS at Bradford, DuBois, Franklin, Jamestown, and Parkersburg, for the two

- year period from October 1, 2010, through September 30, 2012. The annual subsidy amounts are as follows: Bradford ($1,087,306), DuBois ($2,228,996), Franklin ($915,101), Jamestown ($1,639,254), and Parkersburg

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

2 Order 2010

- 6

- 25, June 29, 2010 (Parkersburg); and Order 2010

- 9

- 12, September 9, 2010 (Bradford, DuBois, Franklin, and Jamestown).- 2

-

($2,642,237). Silver began service to Parkersburg on October 1, 2010, thus making all the contracts expire on September 30, 2012. Silver ope rates its service with 19

- passenger Beech 1900 aircraft to Cleveland Hopkins International Airport under a code

- share agreement with

United Airlines.

In anticipation of the current contract on September 30, 2012 , b y Order 2012

- 5

- 12, May 9, 2012,

the Department solicited proposals from all interested air ca rriers to provide service at any or all

five communities

, 3 for a new term beginning October 1, 2012. Proposals for service were due June 7, 2012, but Silver requested two extensions. The second ext ension revised the due date to June 29, 2012.

In response to that Order, we received proposals from Silver, the incumbent

, and TransportAzumah. Copies of both proposals may be accessed via www.regulations.gov

.

Proposal from Silver Airways Silver proposes to continue its status

- quo service operating to Cleveland Hopkins International Airport (CLE) at all five communities: four nonstop or one

- stop round trips at DuBois (24 per week), four nonstop round trips at Parkersburg (24 per week), three nonstop or one

- stop round trips at Bradford and Jamestown (18 per week each), and two nonstop or one

- stop trips at Franklin (12 per week) for a combined annual subsidy of $13,267,470, over a two

- year term.
Service would ut ilize Beech 1900D turboprop aircraft and would continue to operate under a

code

- share agreement with United Airlines. Silver proposes this service as “all

- or

- nothing” with the award of all five cities required. Silver requested the ability to suspend ser vice after 120 days’ notice.

Proposal from TransportAzumah TransportAzumah proposes ground transportation options for Bradford, Jamestown, DuBois, and Franklin, utilizing a passenger bus at no cost to passengers. Bradford would receive three daily

round trips and Jamestown would receive four daily round trips to Buffalo Niagara International Airport (BUF) for annual subsidy amounts of $832,000, and $876,000, respectively. DuBois would receive four daily round trips and Franklin would receive three daily round trips to Pittsburgh International Airport (PIT) for annual subsidy amounts of $1,226,400, and $814,680, respectively.

Community and State Comments

On July 11 , 201 2 , we requested co mmunity co mment s regarding the carrier selection at the five

com munities.

Bradford The airport director at Bradford Regional Airport wrote to the Department and stated his support for the proposal for Silver. He states that the community will work with Silver to mitigate its financial risk and he strongly recommends discussions between all stakeholders before Silver would suspend service under the carriers’ 120

- day out clause

.

3 Proposals for Kirksville, Missouri, were also solicited in that Order, but they were dealt with in a separate Order.- 3

-

DuBois

The Chairman of Clearfield

- Jefferson Counties Regional Airport Authority wrote a letter offering his support for Silver. He cites Sil ver’s excellent service and on

- time performances as

reasons that have brought back passengers to the airport.

Franklin In a July 13, 2012 letter, the manager of Venango Regional Airport stated that the airport supports the proposal submitted by Silver Airways. He says, “[the] air carrier has provided service since September 2008 and has performed reasonably well.” Further, he explains that service through the Cleveland hub offers the mo st efficient and realistic connection between the regional and the national air transportation system. In the context of the subsidy per passenger,

t he community and airport are working with Silver to reduce its financial risk wherever possible.

Addition ally, he notes that Silver has requested the ability to suspend service on 120 days’ notice, but strongly suggests that there be discussions between Silver, the airport, the community, and DOT prior to the approval of any suspension of service.

Parkersbur g The president of the Mid Ohio Valley Regional Airport Authority stated his support for Silver in an August 1, 2012 letter to the Department. He states that Silver’s four daily flights with 19

- passenger aircraft give the airport true passenger growth pot ential and continue the service its users have come to expect. Further, he states that Silver’s request to waive the right to hold

- in Silver Airways upon issuance of a 120 day notice to terminate service would set a bad precedent

and pose a significant th reat to the EAS program, “we feel compelled to agree with it in order to have any air service at all.”

We received no comments from the community of Jamestown

.

Decision

All of the responding communities fully support the selection of Silver as the ir carrier , and

Silver has provided reliable subsidized EAS to all five communities for the past several years.

Further more, the proposed service to Cleveland will continue to provide the communities with

access to the n atio nal air transportation system.

R egarding TransportAzumah, it proposes ground transportation, which was not responsive to the Department’s request for proposal for air service. Moreover, the community is entitled by statu t e to air service.

Silver’s proposal requested that the Department exempt it from the hold

- in requirement under 49 U.S.C. § 41734(b), although it proposes to provide 120 days’ notice before suspending service, 30 more days than is required under the EAS statute. Only one community, Parkersburg, agrees with this exemption , although it was not enthusiastic about it. Bradford and Franklin acknowledged Silver’s request in their support letters, but requested that discussions occur between all interested parties prior to suspension of service. DuBois and Jamestown did not

ad dress the issue.- 4

-

In response to the communities’ concerns regarding the 120

- day provision, the EAS staff contacted Silver to discuss the issue. Based on those discussions, on September 26, 2012, Silver submitted a letter saying that it was withdrawing that stipulation from its proposal.

While we are concerned with the increase in subsidy over the current rate, we find the requested subsidy reasonable for the service proposed. T hus

, we select Silver t o provide EAS at the five

communities for a combined annual subsidy of $10,348,117 ( $1,940,272 for Bradford ; $2,587,029 for DuBois, $1,293,515 for Franklin, $1,940,272 for Jamestown, and $2,587,029 for Parkersburg )

, from October 1, 2012, through September 30, 2014.

We shall make Silver ’ s selection at Bradford

, DuBois

, Franklin , Jamestown, and Parkersburg contingent upon the Department’s receiving properly executed certifications from Silver that it is in compliance with the Department’s regulations regarding drug

- free workplaces and

nond iscrimination, as well as the regulations governing lobbying activities.

Recent l egislative Changes That May Affect Future EAS Eligibility The Federal Aviation Administration (FAA) Modernization and Reform Act of 2012 (Public

Law No: 112

- 95) amended 49 U.S.C. § 41731(a)(1)(B) to change the definition of “eligible place” for the purpose of receiving EAS. The amendment states that to be eligible, a community must maintain an average of 10 enplanements or more per service day, as determined by the Secretary , during the most recent fiscal year beginning after September 30, 2012. 4 The legislation exempts locations in Alaska and Hawaii and communities that are more than 175 driving miles from the nearest large or medium hub airport. All five communities are w ithin 175 miles from the nearest hub airport

– DuBois and Franklin/Oil City are 112 miles and 85 miles, respectively, from Pittsburgh International Airport (PIT). Bradford and Jamestown are 77 miles and 76 miles, respectively, from Cleveland Hopkins Inter national Airport (CLE). Parkersburg is

110 miles from Port Columbus International Airport (CMH). CLE, CMH, and PIT are medium hub airports.

Thus, all five communities must meet the 10

- enplanement

- a

- day threshold for EAS to continue after FY2013, barring a waiver from the Secretary.

In the most recent fiscal year for which data are available, April 1, 2011, through March 31,

2012

, Silver generated passenger totals (inbound and outbound) as follows: 5,014 at Bradford; 11,587 at DuBois; 2,581 at Franklin, 6,706 at Jamestown; and 15,038 at Parkersburg, or an average of 8.0 enplanements per day at Bradford, 18.5 at DuBois, 4.1 at Franklin, 10.7 at Jamestown, and 24.0 at Parkersburg

. 5 Using th ese data, Bradford and Franklin have fewer than 10 enplanements per day and Jamestown is just over 10 at 10.7. Silver and the communities, particularly Bradford and Franklin, must attract additional passengers

, thus increasing enplanements to meet the 10 enp lanements per day statutory requirement in order for them to remain eligible to continue receiving EAS after FY2013 , i.e. after September 30, 2013.

4 The Secretary also has authority to waive the 10

- passenger requirement, on an annual basis, if the community can

demonstrate that the reason the location averages fewer than 10 passengers per day is due to a temporary decline in enplanements. See 49 U.S.C. §41731(e).

5 313 service days annually- 5

-

In addition, Public Law 112

- 27, signed into law on August 5, 2011, amended the definition of “eligible place” for the purpose of receiving EAS. Among other things, the amendment states that to be eligible, a community must have had an average subsidy per p assenger of less than $1,000 during the most recent fiscal year.

Silver and the communities should be aware that the Department will continue to monitor their eligibility to receive subsidized EAS in light of these new requirements throughout the life o f

this contract. The Department may cancel a contract for any community receiving EAS if enplanements remain below 10 per day during FY2013

.

Furthermore , all five communities are subject to the $200 per passenger cap and should

maximize traffic to avoid possible termination from receiving subsidized EAS. 6 The Department fully expects that the communities and Silver will work together to ensure that the subsidy per

passenger is below $200

.

C arrier Fitness

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

. Silver is

sub j ect to the Department’s continuing fitness requirements, and no information has come to our attention that would cause us to question either 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. We therefore conclude that the carrier s remain fit to conduct the operations proposed here.

This O rder is issued under authority delegated in 49 CFR part 1.56a(f).

ACCORDINGLY,

1. We select Silver Airways

, to provide E ssential Air S ervice at Bradford

, DuBois

, Franklin/ Oil City

, Pennsylvania; Jamestown, New York; and Parkersburg, West Vir ginia /Marietta, Ohio ;

2 . We set the final rate of compensation for Silver Airways

, for the provision of E ssential A ir

S ervice at Bradford

, DuBois , and Franklin/ Oil City, Pennsylvania; Jamestown, New York; and Parkersburg, West Virginia/Marietta, Ohio , as described in Appendix C ;

3 . We direct Silver Airways 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 e xamination by representatives of the Department. Such documentation shall be retained for seven years from the service date of this Order or until the Department indicates that the records may be destroyed, whichever comes first. Copies of

6 Congres s first established the $200 ceiling under P.L. 101

- 164 for fiscal year 1990, and reestablished it in fiscal years 1994

- 1999. The ceiling was made permanent by P.L. 106

- 69, the Department of Transportation and Related Agencies Appropriations Act of 2000. The Department is prohibited from paying subsidy for EAS at any community where the per

- passenger rate exceeds $200, unless the community is greater than 210 miles from the nearest large or medium hub. In this case, all five communities are clearly less t han 210 miles from a large or

medium hub.- 6

-

flight logs fo r 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;

4 . We find that Silver Airways

, continue s to be fit, willing and able to operate as a commuter

c arrier and capable of providing reliable E ssential A ir S ervice at Bradford, DuBois, and

Franklin/ Oil City, Pennsylvania; Jamestown, New York; and Parkersburg, West Virginia/Marietta, Ohio;

5

. Th ese docke ts will remain open until further order of the Department; and

6 . We will serve copies of this O rder on the Mayor s of Bradford

, DuBois

, Franklin, and Oil City

, Pennsylvania, Jamestown, New York, Parkersburg, West Virginia, and Marietta, Ohio, the

managers of Bradford Regional Airport, DuBois Regional Airport, Venango Regional Airport ( Franklin/Oil City )

, Chautauqua

- Jamestown Regional Airport, and Mid

- Ohio Valley Regional Airport (Parkersburg/Marietta), Silver Airways , and TransportAzumah

.

By:

SUSAN L. KURLAND Assistant Secretary

for Aviation and International Affairs

(SEAL)

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

Silver Airways Proposal for Bradford, DuBois, Franklin/Oil City, Jamestown, and Parkersburg/MariettaAppendix C Page 1 of 4

Silver Airways

Essential Air Service to be Provided at Bradford

, PA

, and Jamestown, NY

Effective Period : October 1, 2012, through September 30, 2014

Scheduled Service : 1 8 weekly nonstop or one

- stop round trips t o Cleveland Hopkins International Airport over a Cleveland

- Bradford

- Jamestown

- Cleveland or Cleveland

- Jamestown

Bradford

- Cleveland routing

Aircraft : Beech 1900D

, 19 seats Rate per Eligible Flight: $ 1,058 1 Weekly Ceilin g per community : $ 38,088 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, includi ng 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; absen t 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 fligh ts 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 servic e 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 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

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 controvert the foregoing paragraph.

Funds are not currently available for performance under this order beyond September 30, 2012

. The Governmen t’s obligation for performance under this order beyond September 30, 2012 , 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, 2012 , un til funds are made available to the Department for performance. If funds are not made available for performance beyond September 30, 2012 , the Department will provide notice in writing to the carrier.

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

1 Annual compensation of $3,880,544 , divided by 3,669 annual departures (36 weekly departures x 52 weeks x 98 percent completion x 2 communities)

. 2 36 flights per week multiplied by $ 1,058 per flight.Appendix C Page 2 of 4

Silver Airways

Essential Air Service to be Provided at DuBois, PA

Effective Period : October 1, 2012, through September 30, 2014

Scheduled Service : 24 weekly nonstop or one

- stop round trips Intermediate stops and upline service: Service may be routed via Franklin /Oil City, PA

Aircraft : Beech 1900D

, 19 seats Rate per Eligible Flight: $1,058 1 Weekly Ceiling : $ 50,784 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 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 weat her 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 Analysis in writing and receive written approval from the Departme nt 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 po ints 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 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 carrier do not constitute a total or partial reduction or cessation of payment.

Subsidy contracts are subject to, a nd 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 cur rently available for performance under this order beyond September 30, 2012

. The Governmen t’s obligation for performance under this order beyond September 30, 2012 , is subject to the availability of appropriated funds from which payment for services can b e made. No legal liability on the part of the Government for any payment may arise for performance under this order beyond September 30, 2012 , until funds are made available to the Department for performance. If funds are not made available for performan ce beyond September 30, 2012 , the Department will provide notice in writing to the carrier.

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

1 Annual compensation of $2,587,029 , divided by 2,446 annual departures (48 weekly departures x 52 weeks x 98 percent completion).

2 48 flights per week multiplied by $1,058 per flight.Appendix C Page 3 of 4

Silver Airways

Essential Air Service to be Provided at Franklin/Oil City, PA

Effective Period : October 1, 2012, through September 30, 2014

Scheduled Service : 12 weekly nonstop or one

- stop round trips Intermediate stops and upline service: Service may be routed via DuBois , PA

Aircraft : Beech 1900D

, 19 seats Rate per Eligible Flight: $ 1,058 1 Weekly Ceiling : $ 25,39 2 2

Note: The carrier understands that it may forfeit its compensation for any flights that it does not operate in

confo rmance 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 a t 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. I n 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 Analysis in writing and receive written approval from the Department to be ensured of full compensation. Should circumstances warrant, the Departm ent 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 Depart ment 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 i n 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 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 controvert the foregoing paragraph.

Funds are not currently available for performance under this order beyond September 30, 2012. The G overnmen t’s obligation for performance under this order beyond September 30, 2012 , 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, 2012 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30, 2012 , the Department will provide notice in writing to the carrier.

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

1 Annual compensation of $1,293,515, divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98 percent completion).

2 24 flights per week multiplied by $ 1,058 per flight.Appendix C Page 4 of 4

Silver Airways

Essential Air Service to be Provided at Parkersburg, WV/Marietta, OH

Effective Period : October 1, 2012, through September 30, 2014

Scheduled Service : 24 weekly nonsto p round trips to Cleveland Hopkins International Airport Intermediate stops and upline service: No intermediate stops permitted

Aircraft : Beech 1900D

, 19 seats Rate per Eligible Flight: $1,058 1 Weekly Ceiling : $ 50,7 84 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 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 are considered eligible for subsidy. In addition, if the carrier does not schedule or operate its flights in full co nformance 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 ro utes. 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 Departme nt 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 payme nts 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

carrier do not consti tute 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 are not currently available for performance under this order beyond September 30, 2012. The Governmen t’s obligation for performance under this order beyond September 30, 2 012 , 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, 2012 , until funds are m ade available to the Department for performance. If funds are not made available for performance beyond September 30, 2012 , the Department will provide notice in writing to the carrier.

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

1 Annual compensation of $2,587,029 , divided by 2,446 annual departures (48 weekly departures x 52 weeks x 98 percent completion).

2 48 flight s per week multiplied by $1,058 per flight.