Or der: 20 10

- 3

- 30

Served : March 25 , 2010



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 25 th of March, 2010

Essential Air S ervice at

WEST YELLOWSTONE

, MONTANA

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

- O ST

- 2003

- 14626

ORDER SELECTING CARRIER

Summary By this order

, the Department is s electing SkyWest A irlines d/b/a Delta Connection ( “SkyWest” )

to continue to provide essential air service (EAS) at West Yellowstone

, Montana , at a n an nual subsidy rate of $ 427,757

, for the next two summer seasons from June 1 through September 30,

2010 and 2011. 1

Background By Order 2008

- 1

- 4, January 10, 2008, the Department selected SkyWest to provide subsidized EAS at West Yellowstone for the 2008 and 2009 summer seasons at a subsidy rate of $431,996

for each four

- month season. Under that order, SkyWest provided 14 nonstop round trips per week to Salt Lake City International Airport (SLC) as Delta Connection, with 30

- seat Embraer

Brasilia aircraft.

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.- 2

-

I n anticipation of the end of the rate term, the Department issued Order 20 10

- 1

- 1, January 4,

2010

, solicit ing proposals to provide efficient EAS , with subsidy support if necessary, at West

Yellowstone

, for the next two summer seasons

.

Proposal s I n response to that order, we received proposals from two carriers, SkyWest, the incumbent

, and Sovereign Air, Inc. (“Sovereign Air”).

SkyWest proposes to continue its historical level of subsidized service of two daily nonstop round trips to Salt Lake City as Delta Connection for the next two summers, from June 1, 2010, through September 30, 2 010, and during the same months in 2011, utilizing 30

- passenger Embraer Brasilia aircraft for a subsidy of $427,757 for each four

- month season

.

Sovereign Air has proposed to operate four daily nonstop round trips flights to Salt Lake City using 16

- passe nger Metroliner III aircraft for a subsidy of $497,935 for each four

- month season

.

The complete proposal s of both carriers may be accessed online at http://www.regulations.gov/ by entering “DOT

- OST

- 2003

- 14626 .”

Community and State Comments

On February 16, 2010 , we requested co mmunity co mment s regarding the carrier selection at
West Yellowstone

.

In a March 11 letter to the Department, Jamie Greene, Operations Manager for the Town of West Yellowstone (“the Town”) stated that the Town “strongly supports the proposal submitted by SkyWest.” He also says “has enjoyed a superb relationship with SkyWest Airlines since 1987 and appreciates the dependable and important service the airline has provided to West Yellowstone and the surrounding area.” The letter also mentions that last summer, “SkyWest demonstrated its willingness to work with our community by altering its flight schedule to better

serve visitors to West Yellowstone.”

The Department also received a letter from the M ontana Department of Transport ation (“MDT”) stating it is “encouraged to see competition in the market for the West Yellowstone

– Salt Lake City route.” It commends Sovereign Air for its proposal, but states, “[w]ithout approval of its pending application before the USDOT for authorit y to operate as an air carrier, and knowing the application has been in process for over one year, MDT cannot recommend its selection with the

close service start

- up date of June 1, 2010. ” It says that SkyWest has served the region with

“efficient service , personnel, and excellent dialogue with the airport and community on air service issues,” and it supports SkyWest’ service option for the next two seasons.

Decision Sovereign Air does not have the requisite operating authority from either the Federal Aviation Administration or the Department of Transportation to operate its proposed service. Moreover, there was no community support for the carrier’s proposal, and t he requested subsidy is great er than SkyWest ’s

.- 3

-

SkyWest has served West Yellowstone for many years and continues to provide them with

reliable essential air service. The c ommunity supports SkyWest and we find that its subsidy request is reasonable. Therefore, we will reselect SkyWes t, operating as Delta Connection with

30

- seat Embraer Brasilia aircraft, to provide service from West Yellowstone to Salt Lake City, for the next two summer seasons, at an annual subsidy rate of $427,757.

We shall make SkyWest’s selection at West Yellows tone contingent upon the Department’s receiving properly executed certifications from SkyWest that it is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations governing lobbying act ivities.

Carrier Fitness

49 U.S.C. 41737(b) 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

. SkyWest 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 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

fi nding. We therefore conclude that the carrier remains 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 A irlines d/b/a Delta Connection to provide essential air service at West

Yellowstone

, Montana ;

2 . We set the final rate of compensation for SkyWest Airlines d/b/a Delta Connection

, for the provision of essential air service at West Yellowstone

, Montana , as described in Appendix C ;

3

. We direct SkyWest Airlines d/b/a Delta Connection

. 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 that 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;

4 . We find that SkyWest A irlines d/b/a Delta Connection continue s to be fit, willing and able to

operate as a certificated carrier and capable of providing reliable essential air service at West

Yellowstone

, Montana ;

5 . Th is docket will remain open until further order of the Department; and- 4

-

6 . We will serve copies of this order on the Mayor and Operations Manager of the Town of

West Yellowstone

, the Montana Department of Transportation, Aeronautics Division, SkyWest

A irlines, and Sovereign Air.

By:

SUSAN L. KURLAND Assistant Secretary

for Aviation and International Affairs

(SEAL)

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



## AREA MAPAppendix BAppendix C

SkyWest A irlines d/b/a Delta Connection

Essential Air Service to be Provided at West Yellowstone

, Montana

Effective Period : June 1 through September 30

, 2010 and 2011

Scheduled Service : 1 4 nonstop round trips t o Salt Lake City International Airport each week

Aircraft : Embraer Brasilia, 30 seats
Rate per Eligible Flight: $ 895 1
Weekly Ceilin g : $ 25, 060 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. T he 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 ques tion. 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 tr affic 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 t ransportation system provided to the community.

If the Department unilaterally, either partially or complete, 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. Th ose 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.

Funds are not currently available for performance under th is order beyond September 30 , 20 10

. The Department’s obligation for performance under this order beyond September 30 , 20 10 , 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 , 20 10 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30 , 20 10 , the Department will provide notice in writing to the carrier.

Subsidy contracts are subject to, and incorporate by reference, releva nt 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.

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

1 Annual compensation of $427,757

, divided by 478 annual departures (122 service days x 4 flights per day x 98 percent completion)

. 2 28 flights per week multiplied by $ 895 per flight.