Order: 2010-5-4

Served: May 4, 2010

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 4th day of May, 2010

Essential Air Service at

MERCED, CALIFORNIA Docket DOT-OST-1998-3521

VISALIA, CALIFORNIA Docket DOT-OST-2004-19916

ELY, NEVADA Docket DOT-OST-1995-361

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

ORDER REQUESTING PROPOSALS

Summary

By this order, the Department is requesting proposals from carriers interested in providing 

essential air service (EAS) at Merced and Visalia, California, and/or Ely, Nevada, for a new

two-year period, beginning October 1, 2010, with or without subsidy. (See Appendix A for a 

service area map). Carriers should file their proposals no later than June 1, 2010.

Background

By Order 2008-6-26, June 23, 2008, the Department selected Great Lakes Aviation, Ltd. 

(Great Lakes), to provide subsidized EAS at Merced and Visalia, California, and Ely, Nevada, 

for the two-year period beginning October 1, 2008, at a combined annual subsidy of 

$4,900,401 with 19-seat Beech 1900D turboprop aircraft.

Request for Proposals

As the end of the current contracts approach, we are requesting proposals from carriers 

interested in providing service at Merced, Visalia, and/or Ely, with or without subsidy, for the 

two-year period beginning October 1, 2010. Carriers should file their proposals no later than 

June 1, 2010. Staff will then docket the proposals, thereby making them public, and direct 

each carrier to serve a copy of its proposal on the civic parties and other applicants. Shortly 
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afterwards, we will provide a summary of the proposals to the communities and ask them to 

submit their final comments. We will give full consideration to all proposals that are timely 

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 carriers when we deem it desirable; in such cases, of course, we will 

give all applicants the same opportunity. We also retain the discretion to reject outright all 

unreasonable or unrealistic proposals and re-solicit a new round of proposals. However, 

negotiation or rejection are only an occasional exception 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, well-documented proposals that will 

facilitate their evaluation by the affected communities and the Department.2

With specific respect to these three communities, for Merced and Visalia we expect proposals 

consisting of service with 15-seat or larger aircraft offering two or three round trips each 

weekday and weekend to Las Vegas, Los Angeles, or any suitable hub with airline connections 

to the national air transportation system. We would consider subsidizing three or even four 

round trips a day if the communities are served together on the same flights. At Ely, we expect 

one daily nonstop or one-stop round trip to Las Vegas or Denver, or another suitable hub with 

airline connections to the national air transportation system. Such service is generally 

consistent with what the communities currently receive. We encourage proposals that meet 

those 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 those requirements if they 

envision other, potentially more attractive service possibilities -- different hubs, for example --

with subsidy requirements that remain competitive.

Communities 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 

requirements of the airline interested in submitting a proposal. In addition, carriers should be 

 1 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, 49 U.S.C. 41733(c)(1) directs us to consider 

four factors: (a) scheduled service reliability; (b) contractual and marketing arrangements with a larger carrier to 

ensure service beyond the hub; (c) interline arrangements that the applicant has made with a larger carrier at the 

hub; and (d) community views, giving substantial weight to the views of the elected officials representing the 

users. 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. 
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very clear as to whether a specific community’s proposal is a stand-alone option, or whether it 

is part of a larger, inseparable package connected to other communities.

We encourage proposals that meet those 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 those requirements if they envision other, potentially more attractive service 

possibilities -- different hubs, for example -- with subsidy requirements that remain 

competitive.

New Filing Procedures

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.

Service and Traffic History

In order to assist carriers in making their passenger and revenue forecasts, we have included 

historical passenger data in Appendix B. From January 1 through October 31, 2009, Merced 

generated an average of 2.6 enplanements a day; Visalia, 6.6; and Ely less than one. Both 

Merced and Visalia suffered a service hiatus two years ago when Air Midwest suddenly ceased 

all operations. In an effort to minimize the hiatus, Great Lakes started service to LA/Ontario 

rather than the preferred hub of Las Vegas due to operational reasons. However, on April 7, 

Great Lakes started Merced - Las Vegas service, replacing service to LA/Ontario, and plans to 

begin Visalia – Las Vegas on July 1. Based on the advanced bookings, we understand that 

passenger levels are significantly increasing since the change in hub from Ontario to Las 

Vegas.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces, and nondiscrimination.3

 3 The regulations applicable to these areas are: (1) 49 CFR Part 20 -- New restrictions on lobbying; 

 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 lobbying 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 

(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 --

Government-wide debarment and suspension (non-procurement) and government-wide requirements for drug-free 

workplace (grants).
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more detailed information regarding these requirements should contact the Office of Aviation 

Analysis at (202) 366-5903.4

Community and State Comments

The communities and States are welcome to submit comments at any time. We encourage 

prospective applicants to contact the communities before they submit their proposals so that 

they can tailor them to the communities’ needs, as they will not be able to amend them after the 

due date. 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, June 1, the end of the 30-day period for 

carrier proposals.

This order is issued under authority delegated in 49 CFR 1.56a(f).

ACCORDINGLY,

1. We request that carriers interested in providing essential air service at Merced and Visalia, 

California, and/or Ely, Nevada, submit their proposals, with or without subsidy requests, no 

later than June 1, 2010. The proposals should be e-mailed to: EAS@dot.gov with the title 

“Proposal to Provide Essential Air Service at Merced and Visalia, California and/or Ely, 

Nevada,” with the docket numbers corresponding to the communities as shown on the first 

page of this order;5

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

3. We will serve copies of this order on the communities of Merced and Visalia, California; 

Ely, Nevada; and the parties listed in Appendix D.

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.

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

5 Questions regarding filings in response to this order may be directed to Brian Swanson at (202) 366-5392 or 

brian.swanson@dot.gov.
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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

at http://www.regulations.gov
Appendix A

• Ely 

• Merced 

• Visalia 
Appendix B

Historical Passenger Traffic1

Community Year Enplanements Deplanements Total

Average Annual 

Enplanements per 

Service Day2

Ely

2003 899 797 1,666 2.9

2004 1,253 1,127 2,380 4.0

2005 3,591 3,448 7,039 11.5

2006 4,565 4,516 9,081 14.6

2007 644 485 1,129 2.1

20083 204 210 414 < 1

2009

(Jan. – Oct.)

151 145 296 < 1

Community Year Enplanements Deplanements Total Average Annual 

Enplanements per Day

Merced

2003 7,510 7,509 15,019 20.6

2004 8,004 7,936 15,940 21.9

2005 8,596 8,447 17,043 23.6

2006 7,864 7,770 15,634 21.5

2007 9,033 9,400 18,433 24.7

20083 1,332 1,429 2,761 4.9

2009

(Jan. – Oct.)

789 834 1,623 2.6

Community Year Enplanements Deplanements Total Average Annual 

Enplanements per Day

Visalia

2003 1,355 1,329 2,684 3.7

2004 1,085 1,046 2,131 3.0

2005 2,377 2,234 4,611 6.5

2006 4,289 4,383 8,672 11.8

2007 6,617 6,398 13,015 18.1

2008 1,674 1,789 3,463 4.6

2009

(Jan. – Oct.)

2,017 1,873 3,890 6.6

 1 U.S. DOT, Bureau or Transportation Statistics, T-100 Market data and Order 2008-5-42. 2 Annual Enplanements divided by 313 days, 314 days for 2004 and 2008, leap years.

3 Data for June, July and August is not reported.
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 community.

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 Department 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.
Appendix D

SERVICE LIST

Air Greco, d/b/a Wings Air, Aaron Goerlich Kenmore Air, Tim Brooks

Air Greco, d/b/a Wings Air, Charles Mintz Mesa Air Group, Jonathan Ornstein

Air Greco, d/b/a Wings Air, Robert Rupard Mesa Air Group, Michael Lotz

Air Sunshine, Mirmohammad Adili Mesa Air Group, Mike Holcomb

Air Wisconsin, Barbara Jones Mesaba, Max Shemesh

Alaska Airlines, Jeff Cole Mesaba, John Spanjers

Alaska Airlines, Sandy Sinick Midwest Airlines, Anthony Intravia

Allegiant Air, Robert Ashscroft Midwest Airlines, David Reeve

Alliance Air, Paul Berliner Midwest Airlines, Greg Aretakis

American Airlines, Carl Nelson MN Aviation, Jose Maldonado

American Eagle, Jeff Hartz Multi Aero, Darnea

Bemidji Aviation, Arlen Rinkenberger Multi Aero, Shane Storz

Bemidji Aviation, Cori Rude NYDC, Henok Araya

Cape Air, Andrew Bonney Northwest, Aaron Murray

Cape Air, Dan Wolf Northwest, Tim McDonald

Cape Air, J. Flaherty OST, Dennis DeVany, Renee Williams,

Caribbean Sun Airlines, John Rupert OST, Kevin Adams, Brian Swanson

Colgan Air, Mike Colgan Pacific Wings, Frank Ford

Colgan Air, Kevin Scott Pacific Wings, Greg Kahlstorf

CommutAir, Andy Price Pinnacle Airlines, Joe Williams

CommutAir, Joel Raymond Pinnacle Airlines, Phil Reed

Continental, Bruce Keiner Public Charters, Jim Gallagher

Continental, Dan Weiss Salmon Air, Dan Schroeder

Continental, Lorry Halloway Salmon Air, JoAnn Wolters

Delta Air Lines Amy Martin Scenic, Mary Schneider

Delta Air Lines, Jeff Morgan Scenic, Mitzi Daines

Delta Air Lines, Dan Shuman Seaborne Airlines, Wayne D’Amico

Delta Air Lines, Joe Esposito SeaPort Airlines. Rob McKinney

Delta Air Lines, Sascha Vanderbellen Shuttle America, Jerry Balsano

Delta, Karen Zachary SkyWest, Eric Christensen

Executive Airlines, Kate Soled SkyWest, Michael Thompson

Great Lakes Airlines, Chuck Howell Sovereign Air, Bob Karns

Great Lakes Airlines, Doug Voss Sovereign Air, Lois R. Barton

Great Lakes Airlines, Greg Stephens Tradewind, Eric Zipkin

Gulfstream, Dave Hackett Trans States, Bill Mishk

Gulfstream, Mickey Bowman Trans States, Gerry Wigmore

Gulfstream, T. Cooper United, Alicia Gabriel

Homeland Security, Michael Duffy United, James Starnes

Homeland Security, Randy Webb US Airways, Howard Kass

Horizon Air, Dan Russo US Airways, Jason Reisinger

Horizon Air, Jennifer Thompson US Airways, Benjamin Slocum

Horizon Air, Jeff Cole Vintage Props and Jets, Nate Vallier

ICEPR, Luis Irizarry Wings of Alaska, Bob Jacobsen

Island Air Charters, Linda House Wings of Alaska, Michelle Donohue

Jet Air, Daniel Wolford