O rder: 2014

- 2

- 6 Served: February 6, 2014



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 6th of February , 20 1 4

ORDER REQUESTING PROPOSALS

Summary By this O rder, the Department is requesting proposals from air ca rriers interested in providing

E ssential A ir S ervice (EAS) at Altoona and /or Johnstown, Pennsylvania

, for a new contract period beginning August 1, 201 4 , with or without subsidy

. (See Appendix A for a map). Air

c arriers should file their proposals no later than March 11

, 2014

.

Background
By Order 2012

- 4

- 30 (April 2 6

, 2012 ), the Department selected Silver Airways (Silver) to provide EAS at Altoona and Johnstown to Washington Dulles International Airport (Washington Dulles ) using 34

- passenger Saab 340 aircraft , for a two

- year period beginning when Silver inaugurated full EAS at bo th communities through the end of the 24 th month thereafter. Silver inaugurated service to Altoona and Johnstown on August 1, 2012, setting an expiration of July 31, 2014 . The combined annual subsidy for both communities is $3,997,187 and b oth communitie s receive 18 weekly nonstop and one

- stop round trips over an

Altoon a

- Johnstown

- Washington Dulles o r a Johnstown

- Altoona

- Washington Dulles routing.

The complet e public file for EAS at Altoona and Johnstown may be accessed online through

the Federal Dockets Management System at: www.regulations.gov by entering the community’s respective docket number in the “Search for Rules, Comments, Adjudications, or Supporting Documents” field.

Essential Air Service at

ALTOONA, PENNSYLVANIA JOHNSTOWN, PENNSYLVANIA

Under 49 U .S.C. § 41731 et seq

. Docket DOT

- OST

- 2002

- 11446

Docket DOT

- OST

- 200 2

- 11451- 2

-

Special d iscussion concerning Alt oona The Department is prohibited from subsidizing air service at a community where the subsidy per passenger exceeds $200, unless the community is more than 210 highway miles from the nearest large or medium hub airport. Altoona is 112 miles from Pittsbu rgh International Airport (a medium hub airport) and b ased on FY2013 data (October 1, 2012 , through September 30, 2013), 7,830 passengers were enplaned and de planed at Altoona . The annual subsidy amount for Altoona is $1,998,594 . Therefore, the subsidy p er passenger at Altoona is $255, above the subsidy per passenger ceiling . Rather than termin ate the community’s eligibility at this stage, the Department will solicit proposals for EAS and evaluate all proposals submitted before either committing to a two

- year contract or making a final

determination on Altoona ’s continuing eligibility to receive EAS in light of its current subsidy per passenger being above the $200 ceiling. Before the due date for proposals, we expect the community to work aggressively w ith all potential applicants to mitigate some of the risks that

the air carriers may face in an attempt to lower their subsidy levels. We also expect air carriers to detail in their proposals how they will work with the community in getting the subsidy pe r passenger under the $200 cap.

Request for Proposals

As the end of the current contract approaches, the Department is requesting proposals from air carriers interested in providing EAS at Altoona and/or Johnstown

, with subsidy support if

necessary , for a new contract period beginning August 1, 201 4

. Carriers should file their proposals no later than March 11

, 20 14

. Staff will the n docket the proposals, thereby making them public

. Shortly afterwards, we will provide a summary of the proposals to the

com munit y and ask them to submit their final comments. We will give full consideration to all proposals that are timely filed. 1

Interested air carriers should prepare their proposals with every expectation that their initial proposals will represent their f inal 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

un reasonable or unrealistic proposals and re

- solicit a new round of proposals. However, negotiation and rejection are only occasional exceptions to the rule.

We are here providing interested carriers with some basic information to serve as guidance

when th ey prepare their proposals, but we will not prescribe a precise format for their proposals. Air 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. 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, we recommend they include information concerning proposed schedules

1 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide

EAS without subsidy and we determine that basic EAS, as required by 49 U.S.C. § 41732, can be reliably provided without such compensation, we typically will not proceed with the carrier

- selection case. Instead, we simply rely on that carrier’s subsidy

- free service as proposed.- 3

-

and projected block hours . In addition, applicants are encouraged to provide financial data supporting their subsidy requests, including information on their projected expenses and

revenues. We strongly encourage clear, well

- documented proposals that will facilitate their evaluation by the affected communit ies and the Department. 2

Proposals should provide sufficient capacity to accommodate historical levels of traffic. In order to assist air carriers in developing traffic and revenue projections for their proposals, we have provided a summary of historical passengers in Appendi x B. During the year ended September 30

, 2013, Altoona averaged 13 enplan ements per day and Johnstown averaged 20 enplanements per day

. For Altoona and Johnstown , t he Department expects proposals to offer

service to a large

- or medium

- hub airport that provides numerous connecting opportunities to the national air transportatio n system. If air carriers choose to serve both communities on shared flights, we expect proposals consisting of three round trips on weekdays and weekends (18 a week) with 30 to 50

- seat aircraft, or four round trips (24 a week) with 19

- seat aircraft.

Sh ould air carriers wish to serve the communities nonstop to/from the hub airport, we would expect proposals for two weekday and two weekend round trips (12 a week) using 30

- seat or larger aircraft for each community. We would also accept proposals for thre e round trips each weekday and weekend (18 a week) using 19

- passenger aircraft. We will also accept proposals using 8/9

- seat aircraft with additional frequencies , though we would expect service to be nonstop to/from the hub airport

.

Air c arriers are also welcome to propose more than one service option, if they choose. T hey

also need not limit themselves to the se requirements if they envision other, potentially more

attractive service possibilities

-- different hubs or length of contract, for example

-- w ith subsidy requirements that remain competitive.

Community Comments

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

app licants to contact the communities before they submit their proposals so that they ca n tailor

the m 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 shortly after the deadline for carrier proposals, and ask them to submit their final comments.

2 In selecting a carrier to provide subsidized EAS for an eligible place not in Alaska, 49 U.S.C. § 41733(c)(1) directs us to consider five factors: (a) service reliability; (b) contractual and marketing arrangements with a larger carrier at the hub; (c) interline arrangements with a larger carrier at the hub ; (d) community views, giving substantial weight to the views of the elected officials representing the users; and (e) whether the carrier has included a plan in its proposal to market its service to the community. In addition, the Consolidated Appropriat ions Act, 2014, Public Law No. 113

- 76, 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 car riers 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.- 4

-

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 for EAS 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 contract must also certify that they are in compliance with

the re gulations 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 b e required to complete the required certifications. Interested carriers requiring more detailed information regarding these requirements should contact the Offic e of Aviation Analysis at (202) 366

- 5903. 4

This Order is issued under authority delegated in 49 CFR Part 1.25a(b) and re

- delegated to the Director, Office of Aviation Analysis.

3 T he regulations applicable to these areas are: (1) 49 CFR Part 20

-- New Restrictions on Lobbying; (2) 49 CFR Part 21

-- Nondiscrimination in Federally

- Assisted Programs of the Department of Transportation

-- Effectuation of Title VI of the Civil Rights A ct of 1964; (3) 49 CFR Part 27

-- Nondiscrimination on the Basis of Disability in Programs and Activities Receiving or Benefiting from Federal Financial Assistance; (4)

14 CFR Part 382

-- Nondiscrimination on the Basis of Disability in Air Travel; and (5) 49 CFR Part 29

-- Government

- Wide Debarment and Suspension (Non

- Procurement) and Government

- Wide Requirements for Drug

- Free Workplace (Grants).

4 The certifications are also available on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

rural

- air

- service/essential

- air

- service

.- 5

-

ACCORDINGLY, 1. We request that carriers interested in providing Essential Air Service at Altoona and Johnstown, Pennsylvania

, submit their proposals, with subsidy suppo rt if necessary , no later

than March 11

, 20 14 . The p roposals should be e

- mailed to: michael.f.martin@dot.gov with

the title “Proposal to Provide E AS at Altoona and/or Johnstown, Pennsylvania ”; 5

2. Th ese do cket s will remai n open until further O rder of the Department; and

3 . We will serve copies of this O rder on the mayor s of Altoona and Johnstown, Pennsylvania

, the airport manager of Altoona/Blair County Airport

, the manager of Johnstown Cambria Regional A irport, and the service list for this docket.

Persons entitled to petition the Department for review of this Order under the Department’s Regulations, 14 CFR Part 385.31(a), must file such petitions within seven (7) 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

o nline a t www.regulations.gov

.

5 Questions regarding filings in response to this O rder may be directed to Michael Martin at (202) 366

- 6494 or michael.f.martin@dot.gov

.Appendix A

AREA MAP

Maps generated by the Great Circle Mapper

- copyright © Karl L. Swartz

.Appendix B Page 1 of 2

Altoona, Pennsylv ania

Quarter Year Deplanements Enplanements Total Traffic Enplanements per Day

4 2009 1,388 1,351 2,739 17

1 2010 1,078 1,014 2,092 14

2 2010 884 939 1,823 12

3 2010 1,263 1,148 2,411 15

Annual

Totals 4,613 4,452 9,065 14

4 2010 1,349 1,194 2,543 16

1 2011 769 745 1,514 10

2 2011 1,184 1,100 2,284 15

3 2011 1,195 1,157 2,352 15

Annual

Totals 4,497 4,196 8,693 14

4 2011 1,130 1,102 2,232 14

1 2012 742 653 1,395 9

2 2012 860 804 1,664 11

3 2012 976 857 1,833 12

Annual

Totals 3 ,708 3,416 7,124 11

4 2012 1,023 920 1,943 12

1 2013 807 768 1,575 10

2 2013 1,060 944 2,004 13

3 2013 1,260 1,048 2,308 15

Annual

Totals 4,150 3,680 7,830 13Appendix B Page 2 of 2

Johnstow n, Pennsylvania

Quarter Year Deplanements Enplanements Total Traffic E nplanements per Day

4 2009 2,000 1,967 3,967 25

1 2010 1,240 1,282 2,522 16

2 2010 2,103 2,353 4,456 29

3 2010 2,411 2,331 4,742 30

Annual

Totals 7,754 7,933 15,687 25

4 2010 2,117 2,129 4,246 27

1 2011 1,379 1,536 2,915 19

2 2011 2,070 2,0 98 4,168 27

3 2011 2,132 2,124 4,256 27

Annual

Totals 7,698 7,887 15,585 25

4 2011 1,809 1,971 3,780 24

1 2012 1,066 1,173 2,239 15

2 2012 1,743 1,825 3,568 23

3 2012 1,911 2,047 3,958 25

Annual

Totals 6,529 7,016 13,545 22

4 2012 1 ,612 1,694 3,306 21

1 2013 1,225 1,265 2,490 16

2 2013 1,609 1,591 3,200 21

3 2013 1,611 1,680 3,291 21

Annual

Totals 6,057 6,230 12,287 20Appendix C

Example of General Terms and Conditions for Essential Air Service

The carrier understands that it may forf eit 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 appr oval. 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 cancell ations, 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 en sured 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 la ck 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 nation al air transportation 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 cessat ion. 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.

Funds may not be available for performance under t his Order beyond [DATE]. The Government’s obligation for performance under this Order beyond [DATE], is subject to the availability of 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 sufficient funds are not made available for performance beyond [DATE] , the Department will provide notice in writing to the carrier

.

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 f oregoing paragraph.

All claims for payment, including any amended cl aims, must be submitted within 9 0 days of the last day of the month for which compensation is being claimed. For example, claims for service provided in July must be filed by October 31 s t ; August claims must be submitted by November 30 th , and so on.