Order 2013-10-8

Served: October 21, 2013

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 21st of October, 2013

Essential Air Service (EAS) at

PADUCAH, KENTUCKY

HANCOCK/HOUGHTON, MICHIGAN

MUSKEGON, MICHIGAN

PELLSTON, MICHIGAN

SAULT STE. MARIE, MICHIGAN

WATERTOWN, NEW YORK

EAU CLAIRE, WISCONSIN

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

DOCKET DOT-OST-2009-0299

DOCKET DOT-OST-2009-0302

DOCKET DOT-OST-2009-0301

DOCKET DOT-OST-2011-0133

DOCKET DOT-OST-2009-0303

DOCKET DOT-OST-1997-2842

DOCKET DOT-OST-2009-0306

ORDER SELECTING CARRIERS AT SIX COMMUNITIES AND TENTATIVELY 

SELECTING CARRIER AT WATERTOWN, NEW YORK

Summary

By this Order, the Department is reselecting Delta Air Lines, Inc. (Delta), to provide Essential 

Air Service (EAS) at Pellston and Sault Ste. Marie, Michigan; and SkyWest Airlines (SkyWest), 

at Paducah, Kentucky; Hancock/Houghton, and Muskegon, Michigan; and Eau Claire, 

Wisconsin. The Order also tentatively reselects American Airlines (American), at Watertown, 

New York.1

Background and Proposals

By a series of Orders, the Department selected carriers to provide EAS at the above communities 

at various subsidy rate levels shown below. All of the service at these communities is currently 

provided with regional jets on a nonstop basis, and critical current and proposed rate and service 

elements are shown in the table below. As the contracts were about to expire, by Order 

 

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds.
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2013-5-13, May 21, 2013, the Department requested proposals for EAS at the seven above 

captioned communities, with proposals due no later than June 26, 2013. After two separate 

requests from American, by two separate notices we granted extensions to that deadline. The 

first notice extended the deadline through July 10, and the second through July 15, 2013. On that 

date, we received one proposal and one option for each community from the incumbent carrier 

currently serving that community. All of the proposals contemplated nonstop service with 

regional jet aircraft and the same frequency of service as that which is currently subsidized and 

that we requested in the RFP, except for Watertown. At Watertown, American has proposed to 

increase its level of service from 12 round trips per week to 13. American also requested that 

Watertown and the Department agree to waive their hold-in authority under 49 U.S.C.§41734 

and instead agree to allow American to terminate service upon 120 days’ notice. The table 

outlines the current status of these communities and also summarizes the proposals most recently 

submitted. We received final community comments on September 11, 2013.

Miles to Selection Rate Subsidy Rates Forecast Passengers

Community Carrier Hub Hub Order Expires Current Proposed Prior Proposed

Muskegon, MI SkyWest ORD 118 2012-2-11 12/31/2013 $1,576,067 $1,389,952 25,000 33,700

Eau Claire, WI SkyWest ORD 268 2012-2-2 12/31/2013 $1,733,576 $1,546,536 35,000 40,000

Pellston, MI 2 Delta DTW 293 2012-4-10 10/31/2013 $1,055,322 $1,077,413 39,602 42,230

Sault Ste. Marie, MI 2 Delta DTW 341 2012-4-10 1/31/2014 $1,676,136 $1,765,393 40,732 40,732

Paducah, KY SkyWest ORD 342 2012-2-2 12/31/2013 $1,710,775 $2,034,160 35,000 42,230

Hancock/Houghton, MI SkyWest ORD 359 2012-2-2 12/31/2013 $934,156 $690,976 44,000 50,000

Watertwon, NY 2 American ORD 617 2011-3-34 11/30/2013 $3,047,972 $3,636,045 28,737 40,228 2

Community Comments

There were strong endorsements for Delta from each community where it proposed service. 

Sault Ste. Marie indicates that commercial “passenger air service is essential to the economy of 

Sault Ste. Marie and the Eastern Upper Peninsula [of Michigan.] [The community] would 

encourage you to accept the proposal from Delta Air Lines to continue with Essential Air Service 

to Sault Ste. Marie.” Pellston indicates that “with any community the more service the better. 

Having said this, the Village of Pellston is thankful for the service Delta currently provides to 

Pellston and appreciates Delta’s latest proposal.” 

There were strong endorsements for SkyWest from each community where it proposed service. 

Eau Claire supported SkyWest, noting that in “response to the increase in passenger traffic, the 

Airport Commission [and community] is pleased that SkyWest has been able to reduce their 

subsidy request by almost $200,000 over the prior two-year period. The Airport will work with 

SkyWest to continue reducing that subsidy over the next two years with continued growth in 

passenger traffic.” Paducah indicates that it has “reviewed the essential air service proposal of 

SkyWest Airlines and [is] looking forward to a continued profitable partnership for another two 

years.” Houghton states that reliable air service is very important to the economic welfare of the 

area, and that Michigan Technological University and hundreds of small high-tech firms could 

not survive without air service. “The City of Houghton strongly endorses SkyWest’s proposal 

for essential air service.” Hancock says that it “has been pleased with the performance and 

 

2 As requested, we will afford Delta and American the flexibility to pick any of their several code-share partners to 

actually operate the service, while the subsidy payments for that service will flow through the parent.
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pricing of SkyWest/United via O’Hare during the last four years, and believes SkyWest is suited 

to undertake the next two years as well.” Muskegon endorsed SkyWest’s proposal. However, 

the community continues to want SkyWest to inaugurate “an everyday morning originating flight 

and evening return flight [otherwise] business travelers have far less occasion to use our airport.”

Watertown strongly endorses American’s proposal. “Added to American’s continuing 

commitment to [Watertown] and the surrounding area is the now documented ease of purchasing 

a very reasonably priced ticket, the convenience of reaching almost any destination within the 

country in short order and the airline’s plan to add another much needed flight on Sunday. 

[American] has more than met all of our expectations in the initial two-year period that we have 

worked with one another.”3 The community also accepted American’s request that it be allowed 

to terminate its service on 120 days' notice.

Decisions at Eau Claire, Hancock/Houghton, Muskegon, Paducah, Pellston, and Sault Ste. Marie

All seven communities are among the strongest traffic generators in the EAS program. 

Compared to each carrier’s proposals two years ago, traffic is constant at Sault Ste. Marie; 

slightly increased at Pellston; and substantially increased at the remaining five, i.e., Eau Claire, 

Hancock/Houghton, Muskegon, Paducah, and Watertown.

At the six communities captioned above, the carrier-selection decision is straightforward. As 

shown in the above table, less subsidy is required at three communities, and slightly more at three

others. Overall the level of subsidy has decreased by two percent from that in the prior carrierselection cycle. The carriers propose to maintain the same level of service that they are currently 

providing and all six communities strongly endorse the incumbent carriers. We will therefore reselect Delta and SkyWest at the service and subsidy levels that they have proposed.

Tentative Decision at Watertown

At the seventh community, Watertown, American characterizes its service as a success and 

proposes to increase its service to 13 round trips per week, one more than the 12 round trips per 

week it provides under the current contract. Two years ago American projected that it would 

transport 28,737 passengers, a four-fold increase over that transported by the prior EAS carrier.4 

American has, in fact, beaten that target, transporting 37,546 passengers in the year ended 

July 31, 2013, the most recent year reported by the carrier.

However, the clear success American achieved in generating passengers causes us to be 

concerned, because it has not been matched by an ability to reduce its need for subsidy. The 

carrier requests $3,636,045 annual subsidy – an increase of almost 20 percent from the current 

rate of $3,047,972. It indicates that the “proposed EAS subsidy is higher than our previous 

 

3 A commenter, a single individual, was concerned with the high level of subsidy requested by American. He noted

that while traffic has responded to American’s service, “they are asking for even more taxpayer dollars than what is 

in their current contract. .....I would like to see Watertown’s airport succeed, but not at the expense of an inflated 

subsidy that could jeopardize the entire Essential Air Service program.”

4 Cape Air transported 5,115 and 6,434 in the years ended October 31, 2010 and 2011, the last two full years before 

it was replaced by American. Cape Air’s level of traffic exceeded what its predecessors had carried.
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agreement primarily due to the proposed additional departure” each week.5 The EAS staff met 

with officials from American to attempt to resolve this paradox of both substantially increased 

traffic and subsidy, but there was no resolution.6 

Order 2013-5-13 requested 12 round trips per week. As shown in Appendix B-2, American 

projects a 69 percent load factor at Watertown, indicating that unused seats remain available with 

the current service level of 12 round trips per week, and making the need to require additional 

service even more problematic.7 In addition, the EAS program is not in an expansion mode. 

Congress has tightened eligibility standards, and several communities have recently lost service 

altogether. A number of additional communities may soon lose all EAS subsidy as Congress has 

further tightened eligibility standards based on Fiscal Year 2013 data. For the reasons cited 

above, we have tentatively decided not to increase the required level of service at Watertown, 

and direct American to show cause as to why we should not select it to continue the current level 

of service, i.e., 12 nonstop round trips per week with regional jets to Chicago O’Hare, with the 

annual subsidy level set at $3,356,349.8 

We expect that with another two years of American’s service, the carrier and the community will 

develop ways to not only maintain Watertown’s current high traffic levels, but also work toward 

reducing the subsidy requirements for that service. 

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that the Department find an air carrier fit, willing, and 

able to provide reliable service before the Department may subsidize it to provide EAS. 

American, Delta, and SkyWest are subject to the Department’s continuing fitness requirements, 

and no information has come to our attention that would cause us to question the carriers’ fitness 

at this time. DOT has contacted the Federal Aviation Administration, and it has raised no 

concerns that would negatively affect our fitness findings. We therefore conclude that the three 

carriers remain fit to conduct the operations proposed here.

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

 

5 In fact, 43 percent of the subsidy increase is due to the increased service: 

$3,046,972 x 13/12 = $3,301,970;$3,301,970 - $3,046,972 = $253,998. The overall increase in subsidy was 

$588,073; and $253,998 is 43 percent of that amount.

6 SkyWest’s proposal at Paducah, the most expensive of the proposals at the other six communities, also projected 

increased traffic and increased subsidy. However, unlike American’s proposals at Watertown, SkyWest’s is for 

status-quo service. 

7 We note that carriers can always, and they occasionally do, operate more service than they contract to provide but 

without subsidy.

8 $3,636,045 x 12/13 = $3,356,349. Even with that reduced level of service Watertown’s subsidy is still very high. 

Compared to Paducah, the most expensive of the other communities at issue here, Watertown requires two-thirds 

more annual subsidy: $3,356,349 ÷ $2,034,160.
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ACCORDINGLY,

1. We direct American to show cause within ten (10) business days of the service date of this 

Order why we should not select it to provide EAS at Watertown, New York, as described in this 

Order and in Appendix C-1. If we receive no objection, we delegate to the Director, Office of 

Aviation Analysis, authority to make this decision final;

2. We select Delta to provide EAS at Pellston and Sault Ste. Marie, Michigan, as described in 

Appendices C-2 and C-3, respectively;

3. We select SkyWest to provide EAS at Eau Claire, Wisconsin, Hancock/Houghton and 

Muskegon, Michigan, and Paducah, Kentucky, as described in Appendices C-4, C-5, C-6, and 

C-7, respectively;

4. We direct American, Delta, and SkyWest 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 from the service date of 

the Order 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;

5. We find that American, Delta, and SkyWest, continue to be fit, willing and able to operate as 

certificated air carriers and capable of providing reliable EAS at Eau Claire, Wisconsin; 

Hancock/Houghton, Muskegon, Pellston, Sault Ste. Marie, Michigan; Paducah, Kentucky; and 

Watertown, New York;

6. Under our authority in 49 U.S.C. § 40109, we will allow American to cease operations at 

Watertown on 120 days’ notice; 

7. These dockets will remain open until further Order of the Department; and
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8. We will serve copies of this Order on the civic officials of Eau Claire, Wisconsin; 

Hancock/Houghton, Muskegon, Pellston, Sault Ste. Marie, Michigan; Paducah, Kentucky; and 

Watertown, New York, and on American, Delta, and on SkyWest.

By:

Susan L. Kurland

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at

http://www.regulations.gov
Appendix A

Nonstop Great Circle Miles to Chicago (ORD) Nonstop Miles to Watertown (ART)

Muskegon, MKG 118 New York, EWR 247

Eau Claire, EAU, 268 Boston, BOS 277

Pellston, PLN, 293 Philadelphia, PHL 287

Hancock/Houghton, CMX 359 Pittsburgh, PIT 324

Sault Ste. Marie, CIU, 341 Cleveland, CLE 346

Paducah, PAH 343 Washington, DCA 359

Watertown, ART, 617 Detroit, DTW 391

Chicago, ORD 617

Nonstop Great Circle Miles to Detroit (DTW)

Muskegon, MKG 161

Pellston, PLN, 243

Sault Ste. Marie, CIU, 284

Watertown, ART, 391

Hancock/Houghton, CMX 425

Eau Claire, EAU, 447

Paducah, PAH 458 
Appendix B-1

Essential Air Service to be Provided to Eau Claire, WI; Hancock/Houghton, Muskegon, Pellston, Sault Ste. Marie, MI; 

and Paducah, KY; and Watertown, NY

Carrier American 1/ Delta SkyWest 

Community Watertown Pellston Sault Ste. Marie Eau Claire Houghton Muskegon Paducah

Docket 1997-2842 2011-0133 2009-0303 2009-0306 2009-0302 2009-0301 2009-0299

Weekly Round Trips 12 13 13 14 14 14 14

Hub ORD DTW DTW ORD ORD ORD ORD

Aircraft Type RJs RJs RJs RJs RJs RJs RJs

Seats 44 50 50 50 50 50 50

Departures 1,227 1,330 1,330 1,427 1,427 1,427 1,427

Stage Length 617 293 341 268 359 118 342

Available Seat Miles 33,301,324 19,484,500 22,676,500 19,121,800 25,614,650 8,419,300 24,401,700

Revenue Passenger Miles 22,911,678 12,373,390 13,889,612 10,720,000 17,950,000 3,976,600 13,680,000

Block Time 2.12 1.17 1.25 1.13 1.20 0.77 1.30

Block Hours 2,606 1,553 1,662 1,617 1,712 1,094 1,855

Passengers 37,134 42,230 40,732 40,000 50,000 33,700 40,000

Passenger Fare $132.00 $112.96 $108.73 $93.00 $98.00 $73.00 $97.00

Passenger Revenue $4,918,901 $4,770,498 $4,428,872 $3,719,999 $4,900,000 $2,460,100 $3,880,001

Other Revenue $0 $653,559 $606,756 $0 $0 $0 $0

Total Revenue $4,918,901 $5,424,057 $5,035,628 $3,719,999 $4,900,000 $2,460,100 $3,880,001

Direct Expenses $6,654,388 $3,767,625 $4,031,811 $3,784,086 $4,006,679 $2,559,823 $4,340,569

Indirect Expenses $1,226,802 $2,308,515 $2,324,283 $1,231,662 $1,318,060 $1,106,893 $1,291,965

Operating Expenses $7,881,190 $6,076,140 $6,356,094 $5,015,748 $5,324,739 $3,666,716 $5,632,534

Profit $394,060 $425,330 $444,927 $250,787 $266,237 $183,336 $281,627

Economic Cost $8,275,250 $6,501,470 $6,801,021 $5,266,535 $5,590,976 $3,850,052 $5,914,161

Annual Subsidy $3,356,349 $1,077,413 $1,765,393 $1,546,536 $690,976 $1,389,952 $2,034,160

1/ Reflects an application of the factor of 12/13 to American's proposal.
Appendix B-2

American's Current and Prior SkyWest's Current and Prior

Proposals at Watertown Proposals at Paducah

Percent Percent

2011 2013 Change 2011 2013 Change

Miles 617 617 343 343

Departures 1,223 1,329 8.67% 1,427 1,427 0.00%

Blk Time 1.94 2.12 9.28% 1.30 1.30 0.00%

Completion 98.00% 98.00% 98.00% 98.00%

Seats 44 44 50 50

ASMs 33,203,090 36,076,434 8.65% 24,473,050 24,879,600 1.66%

RPMs 17,730,450 24,820,857 39.99% 12,005,000 13,680,000 13.95%

Load Factor 53.00% 68.80% 49.05% 54.98%

Passengers 28,737 40,228 39.99% 35,000 40,000 14.29%

Average Fare $142 $132 -7.04% 115 97 -15.65%

Revenue $4,094,786 $5,328,809 30.14% $4,025,000 $3,880,000 -3.60%

Total Expenses $6,802,627 $8,537,956 25.51% $5,462,643 $5,632,534 3.11%

Economic Cost $7,142,758 $8,964,854 25.51% $5,735,775 $5,914,161 3.11%

Subsidy $3,047,972 $3,636,045 19.29% $1,710,775 $2,034,161 18.90%

Revenue ÷ RPMs $0.2309 $0.2147 -7.04% $0.3353 $0.2836 -15.41%

Expense ÷ ASM $0.2151 $0.2485 15.51% $0.2344 $0.2377 1.43%

BELF 1/ 93.15% 115.75% 24.26% 69.90% 83.81% 19.90%

1/ Breakeven Load Factor: Revenue per RPM ÷ Expense per ASM. For example,

$0.2151 Expense per ASM ÷ $0.2309 Revenue per RPM = 93.15 percent. If Expense per ASM 

exceeds Revenue per RPM, then regardless of the number of passengers carried (recognizing that load 

factor can never exceed 100 percent), the community will continue to require subsidy support.
Appendix C-1

American, Essential Air Service to be Provided to 

Watertown, New York Docket 1997-2842

Effective Period: December 1, 2013, through January 31, 2016;

Service: Twelve (12) nonstop round trips per week to Chicago O’Hare (ORD);

Aircraft Type: Embraer-140 Regional Jet1

Annual Subsidy: $3,356,349

Annual Flights: 1,2272

Subsidy per Flight: $2,7353

Weekly Subsidy Ceiling: $65,6404

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 may not be available for performance under this Order beyond January 15, 2014. The Government’s obligation for 

performance under this Order beyond January 15, 2014, 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 

January 15, 2014, until funds are made available to the Department for performance. If sufficient funds are not made available for 

performance beyond January 15, 2014, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which

compensation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims 

must be submitted by November 30, and so on.

 

1 Flights may be operated by American Eagle or Chautauqua, as American deems appropriate

2 12 trips per week x two directions x 52 weeks x 313/312 days x .98 completion = 1,227 flights.

3 $3,356,349 ÷ 1,227 flights.

4 $2,735 per flight x 24 flights per week.
Appendix C-2

Delta, Essential Air Service to be Provided to 

Pellston, Michigan Docket 2011-0133

Effective Period: November 1, 2013, through January 31, 2016;

Service: Off peak: Twelve (12) nonstop round trips per week to Detroit (DTW); Peak: Fourteen (14) 

nonstop round trips per week to Detroit (DTW) with CRJ-200 Aircraft;

Annual Subsidy: $1,077,413

Annual Flights: 1,3291

Subsidy per Flight: $8112

Seasonality3 Off-Peak Period Peak Period

Weekly Subsidy Ceiling: $19,4644 $22,7085

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 may not be available for performance under this Order beyond January 15, 2014. The Government’s obligation for 

performance under this Order beyond January 15, 2014, 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 

January 15, 2014, until funds are made available to the Department for performance. If sufficient funds are not made available for 

performance beyond January 15, 2014, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which 

compensation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims 

must be submitted by November 30, and so on.

 

1 Off-Peak, 26 weeks: 12 trips per week x two directions x 26 weeks x 0.98 = 612 flights;

Peak, 26 weeks: 14 trips per week x two directions x 26 weeks x 0.98 x 183/182 days = 717 flights.

2 $1,077,413 ÷ 1,329 flights.

3 Off-Peak, 11/1/13--5/3/14; Peak, 5/4/14—11/1/14; Off-Peak, 11/2/14—5/2/15; Peak, 5/3/15-10/31/15; Off-peak, 

11/1/15 – 1/31/16

4 $811 per flight x 24 flights per week.

5 $811 per flight x 28 flights per week.
Appendix C-3

Delta, Essential Air Service to be Provided to 

Sault Ste. Marie, Michigan Docket 2009-0303

Effective Period: February 1, 2014, through January 31, 2016;

Service: Thirteen nonstop round trips per week to Detroit (DTW);

Aircraft Type: CRJ-200

Annual Subsidy: $1,765,393

Annual Flights: 1,3291

Subsidy per Flight: $1,3282

Weekly Subsidy Ceiling: $34,5283

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 may not be available for performance under this Order beyond January 15, 2014. The Government’s obligation for 

performance under this Order beyond January 15, 2014, 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 

January 15, 2014, until funds are made available to the Department for performance. If sufficient funds are not made available for 

performance beyond January 15, 2014, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which 

compensation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims 

must be submitted by November 30, and so on.

 

1 13 trips per week x two directions x 52 weeks x 313/312 days x .98 completion = 1,329 flights.

2 $1,765,393 ÷ 1,329 flights.

3 $1,328 per flight x 26 flights per week.
Appendix C-4

SkyWest, Essential Air Service to be Provided to 

Eau Claire, Wisconsin Docket 2009-0306

Effective Period: January 1, 2014, through January 31, 2016;

Service: Fourteen (14) nonstop round trips per week to Chicago O’Hare (ORD);

Aircraft Type: CRJ-200

Annual Subsidy: $1,546,536

Annual Flights: 1,4311

Subsidy per Flight: $1,0812

Weekly Subsidy Ceiling: $30,2683

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 may not be available for performance under this Order beyond January 15, 2014. The Government’s obligation for 

performance under this Order beyond January 15, 2014, 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 

January 15, 2014, until funds are made available to the Department for performance. If sufficient funds are not made available for 

performance beyond January 15, 2014, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which 

compensation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims 

must be submitted by November 30, and so on.

 

1 14 trips per week x two directions x 52 weeks x 313/312 days x .98 completion = 1,431 flights.

2 $1,546,536 ÷ 1,431 flights.

3 $1,081 per flight x 28 flights per week.
Appendix C-5

SkyWest, Essential Air Service to be Provided to 

Hancock/Houghton, Michigan Docket 2009-0302

Effective Period: January 1, 2014, through January 31, 2016;

Service: Fourteen (14) nonstop round trips per week to Chicago O’Hare (ORD);

Aircraft Type: CRJ-200

Annual Subsidy: $690,976

Annual Flights: 1,4311

Subsidy per Flight: $4832

Weekly Subsidy Ceiling: $13,5243

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 may not be available for performance under this Order beyond January 15, 2014. The Government’s obligation for 

performance under this Order beyond January 15, 2014, 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 

January 15, 2014, until funds are made available to the Department for performance. If sufficient funds are not made available for 

performance beyond January 15, 2014, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which 

compensation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims 

must be submitted by November 30, and so on.

 

1 14 trips per week x two directions x 52 weeks x 313/312 days x .98 completion = 1,431 flights.

2 $690,976 ÷ 1,431 flights.

3 $483 per flight x 28 flights per week.
Appendix C-6

SkyWest, Essential Air Service to be Provided to 

Muskegon, Michigan Docket 2009-0301

Effective Period: January 1, 2014, through January 31, 2016;

Service: Fourteen (14) nonstop round trips per week to Chicago O’Hare (ORD);

Aircraft Type: CRJ-200

Annual Subsidy: $1,389,952

Annual Flights: 1,4311

Subsidy per Flight: $9712

Weekly Subsidy Ceiling: $27,1883

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 may not be available for performance under this Order beyond January 15, 2014. The Government’s obligation for 

performance under this Order beyond January 15, 2014, 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 

January 15, 2014, until funds are made available to the Department for performance. If sufficient funds are not made available for 

performance beyond January 15, 2014, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which 

compensation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims 

must be submitted by November 30, and so on.

 

1 14 trips per week x two directions x 52 weeks x 313/312 days x .98 completion = 1,431 flights.

2 $1,389,952 ÷ 1,431 flights.

3 $971 per flight x 28 flights per week.
Appendix C-7

SkyWest, Essential Air Service to be Provided to 

Paducah, Kentucky Docket 2009-0299

Effective Period: January 1, 2014, through January 31, 2016;

Service: Fourteen (14) nonstop round trips per week to Chicago O’Hare (ORD);

Aircraft Type: CRJ-200

Annual Subsidy: $2,034,160

Annual Flights: 1,4311

Subsidy per Flight: $1,4212

Weekly Subsidy Ceiling: $39,7883

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 may not be available for performance under this Order beyond January 15, 2014. The Government’s obligation for 

performance under this Order beyond January 15, 2014, 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 

January 15, 2014, until funds are made available to the Department for performance. If sufficient funds are not made available for 

performance beyond January 15, 2014, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which 

compensation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims 

must be submitted by November 30, and so on.

 

1 14 trips per week x two directions x 52 weeks x 313/312 days x .98 completion = 1,431 flights.

2 $2,034,160 ÷ 1,431 flights.

3 $1,421 per flight x 28 flights per week.