Order: 2011

- 6

- 31 Served: June 30, 2011



### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on the 30 th day of June, 2011

Essential Air Service at

FORT DODGE AND MASON CITY , IOWA

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 200 1

- 10682 DOCKET DOT

- OST

- 2001

- 10684

ORDER REQUESTING PROPOSALS Summary By this order, the Department is requesting proposals by August 9

, 201 1

, from carriers interested in providing essential air service (EAS) at Fort Dodge and Mason City

, Iowa

, for a new two

- year period, beginning November 1, 2011

, with or without subsidy.

Background By Order 20 11

- 6

- 7 , the Department selected Mesaba Aviation, Inc., d/b/a Delta Connection ( Mesaba ) to provide subsidized EAS to Fort Dodge and Mason City

, Iowa

, for the five

- month period from June 1 , 201 1 , through October 31, 2011

. Under that order, the Department authorized subsidy for Mesaba consisting of fourteen nonstop round trips per week to Minneapolis for both Fort Dodge and Mason City

. All of the service i s provided with 34

- seat Saab 340 aircraft

, for annual subsidy rates of $1,910,995 at Fort Dodge and $1,017,545 at Mason City

.

As discussed in O rder 2011

- 6

- 17, we selected Mesaba for the five

- month period it proposed . While it is unusual for the Department to select a proposal for only a five

month period, rather than the typical two years, we found that there were compelling reasons to do so. 1

Request for Proposals As the end of the current rate term approach es , we are here by requesting proposals from carriers interested in providing service at Fort Dodge and Mason City

, with or without subsidy, for the two

- year period beginning November 1, 2011 . Carriers should file their proposals by August 9

. S taff will then docket the proposals, thereby making them public. Shortly afterwards, we will provide a summary of the proposals to the communit ies and S tate and as k them to submit their final comments. We will give full consideration to all proposals filed in a timely manner. 2

1 See Order 2011

- 6

- 6 for a complete discussion.
2 Carriers should not expect the Department to accept late fillings. In cases where a carrier proposes to provide basic essential air service without sub sidy and we determine that service can be provided reliably- 2

-
Interested carriers should prepare their proposals with every expectation that their initial proposals will also be their final and only pr oposals. We retain the discretion to negotiate proposals with carriers when we deem it desirable. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and , if necessary, solicit a new round of proposals. However, we anticipate that negotiation or rejection will remain only occasional exceptions 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 aff ected communities and the Department. We do not anticipate any change in our selection criteria, or in the general provisions governing subsidy payments for essential air service. 3

With specific respect to Fort Dodge and Mason City , we expect proposals consisting of
two nonstop round trips per day (14 a week) at each community if 30

- or 34

- seat equipment is provided

, or three nonstop round trips a day (18 a week) with 19

- seat aircraft , and more frequencies with smaller aircraft . We may subsidize additi onal frequencies if the affected community is served in conjunction with another community. As always, staff will work with the carrier to ensure service and subsidy is reasonable.

We encourage proposals that meet the communit ies ’ 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 the current service pattern if they envision other, potentially more attractive servic e possibilitie s

-- different hubs, or longer terms for the contracted service

-- with subsidy requir e ments that remain competitive.

We encourage carriers to work with the communities in advance of the due date for proposals when proposals can still be adjusted so that they can craft them to best meet the communit ies ’ needs. In addition, carriers should be very clear as to whether a specific community’s proposal may be considered on a stand

- alone basis, or whether it should be considered as part of a larger, ins eparable package with another community. As always, we will fully consider the communit ies ’ views before making a long

- term carrier

selection decision.

without such compensation, we typically do not proceed with the carrier

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

- free service as proposed.
3 In selecting a carrier to provide subsidized essential air service in Iowa , 49 U.S.C. 41733(c) (1) directs us to consider f ive factors. (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub; (3) interline arrangements with a larger car rier at the hub; (4) community views ; and 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 fa ctor that we have considered since the inception of the program. Interested carriers 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 s elected service. Appendix C of this order contains those general provisions.- 3

-
Filing Format 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.

Historical Traffic In order to assist carriers in making their traffic and revenue projections, we have included historical traffic for the communities in Appendix B

. For the year ended March 31 , 201 1 , the most recent annual period, Fort Dodge generated an average of 2 4.2

e nplaned passenger s per day and Mason City

, an average of 3 8. 3 enplanements per day

. Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces

, and nondiscrimination. 4 Consequently, all carriers receiving Federal subsidy to support essential air service must certify that they are in compliance with Department regulations regarding drug

- free workplaces and nondiscrimination, and those carriers wh ose 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 do cuments, the selected carrier will be required to submit them in order to receive subsidy. Interested carriers requiring more detailed information regarding these requirements, as well as copies of the certifications, should contact the Office of Aviation Analysis at (202) 366

- 5903 . The Department is prohibited from paying subsidy to carriers that do not submit these documents.

Community Comments Civic officials and the State are welcome to submit comments on the proposals at any time. 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 August 9 , the due date for carrier proposals.

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

- delegated to the Directo r, Office of Aviation Analysis.

ACCORDINGLY,

1. The Department requests proposals from carriers interested in providing essential air service at Fort Dodge and Mason City

, Iowa

. Carriers should submit their proposals, with subsidy if necessary, by August 9

, 201 1

. Proposals should be emailed to EAS@dot.gov, with the title “Proposal to Provide Essential Air Service at Fort Dodge and Mason City

, Iowa , Docket s DOT

- OST

- 200 1

- 10682 and 10684, respectively

. ” Questions regarding filings may b e directed to Kevin Adams at 202

- 366

- 1047 or Kevin.Adams@dot.gov ;

2

. Th ese D ocket s will remain open until further order of the Department; and

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

-

3 . We will serve this order on the s ervice l ist for th is Docket.

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. This order will be effective immediately, and th e 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 on the World Wide Web at http://www.regulations.govAppendix A

Nonstop Great Circle Miles from Fort Dodge (FOD) Minneapolis ( MSP ) 168 Chicago ( ORD ) 325 Milwaukee ( MKE ) 321 Omaha (OMA) 123 Mason City (MCW) 60 Des Moines (DSM) 75 Cedar Rapids (CID) 136

Nonstop Great Circle Miles from M ason City (MCW) Minneapolis (MSP) 120 Chicago (ORD) 288 Milwaukee (MKE) 275 Omaha (OMA) 184 Fort Dodge (FOD ) 60 Des Moines (DSM) 113 Cedar Rapids (CID) 121

This map is provided by Sabre ® AirVision TM Profit Essentials and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Appendix B

Passengers, Ford Dodge and Mason City, Iowa, T-100 Market Report

Fort Dodge, Iowa (FOD) Mason City, Iowa, (MCW)
Year Month Enplaned Deplaned O & D Enplaned Deplaned O & D
2008 4 551 468 1,019 929 988 1,917
2008 5 530 538 1,068 1,012 982 1,994
2008 6 555 514 1,069 937 1,016 1,953
2008 7 534 543 1,077 1,217 1,155 2,372
2008 8 445 513 958 1,003 995 1,998
2008 9 447 400 847 900 919 1,819
2008 10 420 434 854 941 931 1,872
2008 11 454 425 879 919 875 1,794
2008 12 470 478 948 957 910 1,867
2009 1 440 388 828 840 818 1,658
2009 2 373 363 736 955 796 1,751
2009 3 378 435 813 831 934 1,765
YE 3-31-09 5,597 5,499 11,096 11,441 11,319 22,760

2009 4 326 341 667 716 764 1,480
2009 5 441 430 871 876 858 1,734
2009 6 519 574 1,093 987 1,078 2,065
2009 7 536 504 1,040 1,114 1,041 2,155
2009 8 444 501 945 999 940 1,939
2009 9 483 445 928 843 784 1,627
2009 10 437 459 896 770 754 1,524
2009 11 446 432 878 795 795 1,590
2009 12 537 476 1,013 858 797 1,655
2010 1 404 376 780 770 725 1,495
2010 2 414 475 889 885 740 1,625
2010 3 458 635 1,093 878 944 1,822
YE 3-31-11 5,445 5,648 11,093 10,491 10,220 20,711

2010 4 416 440 856 805 796 1,601
2010 5 552 640 1,192 1,053 980 2,033
2010 6 660 697 1,357 1,203 1,278 2,481
2010 7 760 721 1,481 1,461 1,325 2,786
2010 8 751 792 1,543 1,351 1,333 2,684
2010 9 834 825 1,659 1,209 1,161 2,370
2010 10 831 758 1,589 1,230 1,198 2,428
2010 11 748 720 1,468 1,231 1,197 2,428
2010 12 888 812 1,700 1,279 1,188 2,467
2011 1 763 767 1,530 1,176 1,135 2,311
2011 2 717 654 1,371 1,013 928 1,941
2011 3 911 987 1,898 1,191 1,274 2,465
YE 3-31-11 8,831 8,813 17,644 14,202 13,793 27,995Appendix 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 a n 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 o n 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, th e 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 communit ies

. If the Department unilaterally, either partially or completely, terminates or r educes 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 d o 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, reg ulations, 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 Government 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
p rovided under this order