Order 2011-8-10

Served: August 8, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 8th of August, 2011

Essential Air Service at

HANCOCK/HOUGHTON, 

MICHIGAN

EAU CLAIRE, WISCONSIN

MUSKEGON, MICHIGAN

PADUCAH, KENTUCKY

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

DOCKET DOT-OST-2009-0302

DOCKET DOT-OST-2009-0306

DOCKET DOT-OST-2009-0301

DOCKET DOT-OST-2009-0299

ORDER REQUESTING PROPOSALS

Summary

By this order, the Department is requesting proposals by August 31, 2011, from carriers 

interested in providing essential air service (EAS) at Eau Claire, Wisconsin, 

Hancock/Houghton (Houghton), and Muskegon, Michigan, and Paducah, Kentucky, for 

the two-year period beginning January 1, 2012, with or without subsidy. 

Background

By Order 2009-10-8, the Department selected SkyWest Airlines, Inc., d/b/a United 

Express (SkyWest), to replace Mesaba Aviation, Inc., and provide subsidized EAS to Eau 

Claire, Houghton, Muskegon, and Paducah, through December 31, 2011. SkyWest began 

service at Muskegon and Paducah on February 11, 2010, and at Eau Claire and Houghton 

on March 1, 2010. Under that order, each community receives 14 nonstop round trips per 

week to Chicago O’Hare with 50-seat regional jets. Annual subsidy for each community 

was as follows: Eau Claire, $1,732,372; Houghton, $1,404,714; Muskegon, $660,720; 

Paducah, $569,923. 

Request for Proposals

As the end of the current rate term approaches, we are hereby requesting proposals from 

carriers interested in providing service at Eau Claire, Houghton, Muskegon, and Paducah, 

with or without subsidy, for the two-year period beginning January 1, 2012. Carriers 

should file their proposals by August 31. Staff will then docket the proposals, thereby 

making them public. Shortly afterwards, we will provide a summary of the proposals to 
-2-

the communities and State and ask them to submit their final comments. We will give 

full consideration to all proposals filed in a timely manner.1 

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

proposals will also be their final and only proposals. 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, if necessary, solicit a new round of 

proposals. However, we anticipate that negotiation or rejection will remain only 

occasional exceptions to the rule.

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 strongly encourage clear, welldocumented proposals that will facilitate their evaluation by the affected communities

and the Department. We do not anticipate any change in our selection criteria, or in the 

general provisions governing subsidy payments for essential air service.2 

With specific respect to Eau Claire, Houghton, Muskegon, and Paducah, we expect 

proposals consisting of two nonstop round trips per day (14 a week) at each community if 

34-seat or larger equipment is proposed; two or three (18 a week) nonstop round trips a 

day with 30-seat aircraft; three (18 a week) or four (24 a week) round trips per day with

19-seat aircraft; and more frequencies with smaller aircraft. We may subsidize additional 

frequencies if the affected community is served in conjunction with another community. 

As always, staff will work with the carriers to ensure service and subsidy are reasonable.

We encourage proposals that meet the communities’ requirements in an efficient manner. 

Carriers are also welcome to propose more than one service option, if they choose; they

need not limit themselves to the current service pattern if they envision other, potentially

more attractive service possibilities – different hubs, or longer terms for the contracted

service – with subsidy requirements that remain competitive.

 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 simply rely on that 

carrier’s subsidy-free service as proposed.

2 In selecting a carrier to provide subsidized essential air service outside of Alaska, 49 U.S.C. 41733(c) (1) 

directs us to consider five 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 Consolidated 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 general provisions.
-3-

We encourage carriers to work with the communities in advance of the due date for 

proposals when proposals can still be adjusted so that they can craft them to best meet the 

communities’ needs. In addition, carriers should be very clear as to whether a specific 

community’s proposal may be considered on a stand-alone basis, or whether it should be 

considered as part of a larger, inseparable package with another community. As always, 

we will fully consider the communities’ views before making a long-term carrierselection decision. 

Filing Format

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.

Historical Traffic

In order to assist carriers in making their traffic and revenue projections, we have 

included historical traffic for the communities in Appendix B. For the year ended 

April 30, 2011, the most recent annual period, Eau Claire generated an average of 57.5

enplaned passengers per day; Houghton, 69.8; Muskegon, 38.2; and Paducah, 59.7.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces, and nondiscrimination.3 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 $100,000 over the life of the rate term must also certify that 

they are in compliance with the regulations governing lobbying activities. Because the 

Department is prohibited from paying subsidy to carriers that do not submit these documents, 

the selected carrier will be required to submit them in order to receive subsidy. Interested 

carriers requiring more detailed information regarding these requirements, as well as copies of 

the certifications, should contact the Office of Aviation Analysis at (202) 366-5903. The 

Department is prohibited from paying subsidy to carriers that do not submit these documents.

Community Comments

Civic officials and the States 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 submit their final comments shortly after August 31, the due date for carrier 

proposals.

This order is issued under authority delegated in 49 CFR 1.56a(f) and re-delegated to the 

Director, Office of Aviation Analysis.

 3 The certifications are available on the web at http://ostpxweb.dot.gov/aviation/index.html.
-4-

ACCORDINGLY,

1. The Department requests proposals from carriers interested in providing essential air 

service at Eau Claire, Wisconsin, Hancock/Houghton, Michigan, Muskegon, Michigan, and 

Paducah, Kentucky. Carriers should submit their proposals, with subsidy if necessary, by 

August 31, 2011. Proposals should be emailed to EAS@dot.gov, with the title “Proposal to 

Provide Essential Air Service at Eau Claire, Houghton, Muskegon, and/or Paducah, 

Kentucky, Dockets DOT-OST-2009-0306, 0302, 0301, and/or 0299, respectively.” 

Questions regarding filings may be directed to Kevin Adams at 202-366-1047 or 

Kevin.Adams@dot.gov;

2. These Dockets will remain open until further order of the Department; and

3. We will serve this order on the service list for this Docket.

Persons entitled to petition the Department for review of this order under the 

Department’s Regulations, 14 CFR 385.50, must file such petitions within ten (10) days 

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 Analysis

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
Appendix A

Nonstop Great Circle Miles from Hancock/Houghton, MI (CMX)

Minneapolis (MSP) 277

Chicago (ORD) 359

Milwaukee (MKE) 293

Detroit (DTW) 425

Green Bay (GRB) 186

Nonstop Great Circle Miles from Eau Claire, WI (EAU)

Minneapolis (MSP) 85

Chicago (ORD) 269

Milwaukee (MKE) 223

Green Bay (GRB) 167

Nonstop Great Circle Miles from Muskegon, MI (MKG)

Chicago (ORD) 118

Milwaukee (MKE) 85

Detroit (DTW) 161

Grand Rapids (GRR) 41

Nonstop Great Circle Miles from Paducah, KY (PAH)

Chicago (ORD) 342

St. Louis (STL) 145

Nashville (BNA) 133

Memphis (MEM) 154

This map is provided by Sabre® AirVisionTM Profit Essentials and is being used with express permission of the 

copyright holder, Sabre Airline Solutions®.
Appendix B

Page 1 of 2

T-100 Market Report, Historical Traffic 

Eau Claire, Wisconsin (EAU) Hancock/Houghton, Michigan, CMX

Year Month Origin Dest O&D Origin Dest O&D

2008 5 1,322 1,283 2,605 2,376 2,393 4,769

2008 6 1,570 1,524 3,094 2,104 2,294 4,398

2008 7 1,502 1,462 2,964 2,440 2,573 5,013

2008 8 1,406 1,390 2,796 2,545 2,649 5,194

2008 9 1,273 1,188 2,461 1,733 1,633 3,366

2008 10 1,337 1,308 2,645 2,178 2,061 4,239

2008 11 1,195 1,180 2,375 1,973 1,966 3,939

2008 12 1,221 1,287 2,508 1,855 1,812 3,667

2009 1 1,170 1,007 2,177 1,696 1,746 3,442

2009 2 1,101 901 2,002 1,811 1,787 3,598

2009 3 1,147 1,097 2,244 2,260 2,173 4,433

2009 4 1,030 1,061 2,091 2,107 2,290 4,397

YE April 30, 2009 15,274 14,688 29,962 25,078 25,377 50,455

2009 5 1,032 992 2,024 2,246 2,154 4,400

2009 6 1,295 1,176 2,471 1,931 2,268 4,199

2009 7 1,196 1,233 2,429 2,583 2,720 5,303

2009 8 1,090 1,066 2,156 2,825 2,811 5,636

2009 9 683 652 1,335 1,897 1,800 3,697

2009 10 683 549 1,232 1,901 1,778 3,679

2009 11 534 542 1,076 1,746 1,730 3,476

2009 12 548 623 1,171 1,733 1,444 3,177

2010 1 841 703 1,544 1,433 1,477 2,910

2010 2 646 617 1,263 1,499 1,495 2,994

2010 3 1,136 1,075 2,211 1,736 1,444 3,180

2010 4 1,375 1,404 2,779 1,389 1,588 2,977

YE April 30, 2010 11,059 10,632 21,691 22,919 22,709 45,628

2010 5 1,384 1,467 2,851 1,356 1,374 2,730

2010 6 1,367 1,397 2,764 1,388 1,436 2,824

2010 7 1,683 1,778 3,461 1,980 2,224 4,204

2010 8 1,759 1,853 3,612 2,481 2,525 5,006

2010 9 1,688 1,656 3,344 1,759 1,684 3,443

2010 10 1,639 1,644 3,283 2,173 1,983 4,156

2010 11 1,566 1,513 3,079 1,882 1,777 3,659

2010 12 1,427 1,536 2,963 2,048 1,805 3,853

2011 1 1,466 1,323 2,789 1,603 1,702 3,305

2011 2 1,039 1,052 2,091 1,577 1,476 3,053

2011 3 1,540 1,546 3,086 2,046 1,875 3,921

2011 4 1,323 1,352 2,675 1,697 1,859 3,556

YE April 30, 2011 17,881 18,117 35,998 21,990 21,720 43,710
Appendix B

Page 2 of 2

T-100 Market Report, Historical Traffic 

Muskegon, Michigan (MKG) Paducah, Kentucky (PAH)

Year Month Origin Dest O&D Origin Dest O&D

2008 5 3,717 3,800 7,517 1,921 1,887 3,808

2008 6 2,629 2,217 4,846 1,918 1,921 3,839

2008 7 2,931 2,804 5,735 1,922 1,896 3,818

2008 8 2,800 2,748 5,548 1,748 1,861 3,609

2008 9 1,530 1,368 2,898 1,812 1,786 3,598

2008 10 1,652 1,514 3,166 1,954 1,960 3,914

2008 11 1,402 1,449 2,851 1,602 1,690 3,292

2008 12 1,490 1,400 2,890 1,594 1,497 3,091

2009 1 1,277 1,132 2,409 1,184 1,132 2,316

2009 2 1,326 1,239 2,565 1,182 1,131 2,313

2009 3 1,277 1,253 2,530 1,422 1,434 2,856

2009 4 1,246 1,300 2,546 1,689 1,736 3,425

YE April 30, 2009 23,277 22,224 45,501 19,948 19,931 39,879

2009 5 1,224 1,266 2,490 1,760 1,728 3,488

2009 6 1,361 1,360 2,721 1,976 1,955 3,931

2009 7 1,735 1,780 3,515 2,007 1,975 3,982

2009 8 1,637 1,498 3,135 1,632 1,653 3,285

2009 9 1,180 1,079 2,259 1,462 1,431 2,893

2009 10 1,205 1,141 2,346 1,494 1,514 3,008

2009 11 1,020 969 1,989 1,341 1,362 2,703

2009 12 997 1,051 2,048 1,368 1,345 2,713

2010 1 1,109 928 2,037 1,095 993 2,088

2010 2 867 806 1,673 1,093 1,073 2,166

2010 3 897 889 1,786 1,536 1,603 3,139

2010 4 1,121 1,265 2,386 1,830 1,778 3,608

YE April 30, 2010 14,353 14,032 28,385 18,594 18,410 37,004

2010 5 831 959 1,790 1,999 1,932 3,931

2010 6 865 925 1,790 1,770 1,674 3,444

2010 7 1,147 1,301 2,448 1,713 1,736 3,449

2010 8 1,273 1,141 2,414 1,607 1,594 3,201

2010 9 1,181 1,105 2,286 1,877 1,838 3,715

2010 10 1,161 1,117 2,278 1,788 1,814 3,602

2010 11 981 996 1,977 1,667 1,667 3,334

2010 12 1,059 1,203 2,262 1,502 1,516 3,018

2011 1 872 640 1,512 1,309 1,260 2,569

2011 2 734 805 1,539 998 996 1,994

2011 3 991 925 1,916 1,186 1,225 2,411

2011 4 798 922 1,720 1,293 1,386 2,679

YE April 30, 2011 11,893 12,039 23,932 18,709 18,638 37,347
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 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 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 communities.

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 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 solicitation beyond 

[DATE]. The Department’s obligation for performance under this solicitation 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 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 payment must be submitted within 60 days of the last day of service 

provided under this order