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Swanson, Brian (OST) 

Friday, July 06, 2012 11:49 AM 

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/\ fl: ::_;,_'Mario Cifuentez'; 'ssalomon@ci.visalia.ca.us'; 'Elliott Ron'; 'bramblej@cityofmerCed.org' 

Mike Mathews (mmatthews@flygreatlakes.com); Chuck Howell 

(chowell@flygreatlakes.com); Tim Sieber [tsieber@seaportair.com] 

(tsieber@seaportair.com) 

Soliciting Comments on Proposal for EAS at Merced and Visalia, California - Due August 

1, 2012 ' 

I would like to update you on the Essential Air Service (EAS) situation at Merced and Visalia, California, and 

give you an opportunity to submit comments if you wish. 

In anticipation of the end of Great Lakes' curren~ contract on September 30;2012, the Department issued 

Order 2012-5-11 on May 10, 2012, to solicit proposals from all interested air carriers to provide EAS at Merced 

and/or Visalia, for a new contract period. In response to that Order, we received proposals from two 

carriers. Great Lakes submitted an inseparable package proposal (serving both communities only) with a single 

service pattern. SeaPort Airlines, Inc. (SeaPort) also submitted an inseparable package bid with one linear 

service pattern, but included the use of two 9-seat aircraft types (either Cessna Caravan or Piper Chieftains). 

Copies of the proposals may also be accessed online through the Federal Docket Management System 

at: http://www.regulations.gov, by typing "DOT-OST-1998-3521" (Merced) or "DOT-O§T-2004-19916" 

(Visalia) in the "SEARCH for: Rules, Comments, Adjudications or Supporting Documents:" field. Hyperlinks 

have been provided for your convenience; however, each carrier's proposal is briefly summarized below. 

Before summarizing each carrier's proposal, we would like to note that EAS definitions call for service with 

two-pilot, twin-engine aircraft. Second, we are proh?bited from paying subsidy for EAS at any community 

where the per-passenger rate exceeds $200, unless the community is greater than 210 highway miles from the 

nearest large or medium hub. In this case, Merced and Visalia are fewer than 210 highway miles from a large 

or medium hub and, therefore, are subject to the $200 subsidy-per-passenger ceiling. We noted in the Request 

for Proposals that passenger levels at both Merced and Visalia are very low. Both communities are well over 

the $200 per passenger cap, so the communities should address that issue. 

Great Lakes would utilize 19-passenger Beech 1900D aircraft and its code-share agreements where applicable, 

as summarized in the table below. 

Hub(s) Served/ Daily Annual 

Community Service Pattern Round Subsidy 

Trips Requirement 

one-stop to Los Angeles (LAX), Ontario ( ONT), or 2 Merced Orange County (SNA); or (12 weekly) $1,698,878 

non-stop to Las Vegas (LAS) 

Visalia nonstop to Los Angeles (LAX), Ontario (ONT) or 2 $1,697,929 Orange County (SNA) (12 weekly) 

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As mentioned above, SeaPort submitted a proposal with two different 9-seat aircraft types. The carrier also 

states that it would offer thE communities a fo.!;!£ year option at no increase in annu:1l subsidie.s in table 

below." The cattier proposed .. a linegr 'service pattern thaLwoulci b'e rollted Oakland (OAk)- Merced- VisaliaBurbank (BUR)- San Diego (SAN) and consist of 18 arrivals and departures each week at each 

community. We note, however, that statutory EAS provides service from a designated community to a hub 

airport, and we cannot require the hub to hub service proposed. · 

Ann1.,1al 

Community Aircraft Type Subsidy . Required 

Merced Cessna Caravan $1,578,113 

. Piper Chieftain -$1,604,249 

Visalia Cessna Caravan $1,857,912 

Piper Chieftain $1,890,839 

Please note that the average passenger fares shown in each proposal do not necessarily reflect the average local 

fare passengers would actua~ly pay, but, -rather, reflect a prorated portion ef the·total ticket price (e.g., the 

Visalia- Los Angeles portion of a Visalia- Los Angeles- Chicago ticket) that the subsidized carrier would 

realize. Also, the fare shown is net of certain charges such as Federal transportation security fees? excise or 

ticket taxe~and Passenger Facility Charges. Of course, carriers have the discretion to charge fares they deem 

appropriate, and the passenger fares presented in their proposals have been developed for subsidy rate 

computation purposes only. Based on the cost elements incorporated in the carriers' computation summaries, 

the carriers would have to realize passenger fares comparable to the averages shown in their proposals in order 

to achieve break-even or profitable.operations without subsidy. 

Ymt should also note that the carriers' ·schedules may change to reflect changing conditions (e.g., to better meet 

shifting connecting bank times at the hub). The Department does expect subsidized air carriers to maintain 

well-timed and well-spaced flights in order to ensure full compensation. 

We ret1fuest·that you submit any comments you may have·as soon as possible, but in any case no later than 

August 1, 2012. Please send your comments by fax to 202-366-7638 or by email to both 

dcnnis.dcvany@dot.gov and brian.swanson@dot.gov. Our rules require that you send your comments to both 

applicants as well. If you have any questions, or need more time to reply, please feel free to contact Brian 

Swanson of my staff at 202-366-5392. 

Sincerely, 

Dennis J. DeVany ,,~ 

Chief, Essential Air Service Division, X-53 

-Office of Aviation Analysis 

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