Order: 20 1 2

- 5

- 10
Served: May 9 , 2012



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

Issued by the Department of Transportation
on the 9 th day of May , 2012

Essential Air Service at

BRADFORD, PENNSYLVANIA DuBOIS, PENNSYLVANIA OIL CITY/FRANKLIN, PENNSYLVANIA JAMESTOWN, NEW YORK KIRKSVILLE, MISSOURI PARKERSBURG, WEST VIRGINIA/ MARIETTA, OHIO

Under 49 U.S.C. 41731 et seq

. Docket DOT

- OST

- 2003

- 14528
Docket DOT

- OST

- 2004

- 17617
Docket DOT

- OST

- 1997

- 2523
Docket DOT

- OST

- 2003

- 14950
Docket DOT

- OST

- 1997

- 2 515
Docket DOT

- OST

- 2005

- 20734



### ORDER REQUESTING PROPOSALS

Summary By this Order

, the Department is requesting proposals from carriers interested in providing
E ssential A ir Se rvice (EAS) at Bradford, DuBois, and Oil City/Franklin (“Franklin”), Pennsylvania ; Jamestown, New York ; Kirksville, Missouri ; and Parkersburg, West Virginia /Marietta, Ohio (“Parkersburg”)

, beginning October 1, 2012 , through September 30,
2014 , with or without subsidy . Proposals are due June 7 , 2012

. ( See Appendix A for an area map.)

Background By a series of Order s , 1 the Department selected Gulfstream International Airlines, which was renamed Silver Airways (“Silver”) in December 2011

, to provide subsidized EAS at Bradford,

1 Order 2010

- 6

- 6, June 3, 2010 (Kirksville); Order 2010

- 6

- 25, June 29, 2010 (Parkersburg); and Order 2010

- 9

- 12, September 9, 2010 (Bradford, DuBois, Franklin, and Jamestown).- 2

-

DuBois, Franklin, Jamestown, and Parkersburg, and Hyannis Air Service, Inc. d/b/a Cape Air ( “ Cape Air ” ) at Kirksville, for a two

- year period

. Silver was re

- selected at Bradford, DuBois, Franklin, and Jamestown, for the two

- year period from October 1, 2010 , through September 30, 2012. The annual subsidy amounts are as follows: Bradford ($1,087 ,306), DuBois ($2,228,996), Franklin ($915,101), Jamestown ($1,639,254), Kirksville ($1,422,110), and Parkersburg ($2,642,237). Cape Air inaugurated service to Kirk sville on September 17 , 2010

, and Silver began service to Parkersburg on October 1, 2010, thus making all the contracts expire on September 30, 2012. Cape Air operates its s ervice to Kirksville with nine

- passenger, twin

engine Cessna 402 aircraft to Lambe rt

- St. Louis International Airport under a code

- share agreement with American Airlines

. Silver operates its service to the five other communities with
19

- passenger Beech 1900 aircraft to Cleveland Hopkins International Airport under a code

- share agreement with United Airlines.

Request for Proposals
W e are here requesting proposals from carriers interested in providing service at the six communities
named above , with or without subsidy, to be file d no later than June 7 , 2012

. A fter that date, our staff will docket the proposals, thereby making them public. Shortly afterwards, we will provide a summary of the proposals to the communit ies and ask them to submit their final comments. We will give full consideration to all proposals that are time ly filed. 2

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 desi rable. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and sol icit a new round of proposals.

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 o f 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 w ill facilitate their evaluation by the affected communities and the Department. 3

2 Carriers should not expect the Department to accept late filings. 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 typically do not proceed with the carrier

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

- free service as proposed.
3 In selecting a carrier to provide subsidized Essential Air Service , 49 U.S.C. 41733(c) (1) directs us to consider
four factors : (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub; (3) interline arrangements with a larger carrier at the hub; and (4) community vi ews

. 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

t he 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 selected
service. Appendix C of this order contains those general provisions.- 3

-

With respect to all six communities, we ask that carriers submit proposals for service consistent with the communities are currently receiving. For DuBois and Parkersburg, four roun d trips per weekday and weekend (24 total per week) with 19

- seat aircraft. Parkersburg’s service should be all nonstop to/from the hub. For Bradford and Jamestown, three nonstop or one

- stop round trips each weekday and weekend (18 total per week ) with 19

- seat aircraft. For Kirksville, three round trips each day (21 total per week) with nine

- seat aircraft. For Franklin, two round trips each weekday and weekend (12 total per week) with 19

- seat aircraft. Service should serve to C leveland, Detroit , Washington Dulles, St. Louis, or another suitable hub where numerous connections to the national air transportation system can be made. T he Depar tment may consider larger aircraft with fewer frequencies per day or if smaller aircraft are proposed (for communities other than Kirksville), we will consider a dditional frequencies

.

If the Department receives proposals for single

- engine aircraft, a nd the community ultimately supports the service, in effect waiving their right to twin

- engine ai rcraft, we would consider the waiver to apply only to the carrier

- selection at hand, i.e. we would not assume that the community would waive their rights for all time 4

. A s always, we will formally solicit the
communit ies’ views on any service options we r eceive before making a long

- te rm carrier
selection decision.

The c ommunities 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
needs of the airline inter ested in submitting a proposal. In addition, carriers should be very clear as to whether a specific community’ s proposal is on a stand

- alone basis, or whether it is part of a larger, inseparable package with other communities.

We encourage proposals that meet these requirements in an efficient manner. Carriers are also welcome to propose more than one service op tion, if they choose; they need not limit themselves to those requirements if they envision other, potentially more attractive service possibilities

-- different hubs or length of service terms , for example

-- with subsidy requirements that remain competit ive.

Special discussion concerning Jamestown and Franklin
Based on the most recent 12

- month period for which data are available ( January 1, 2011, through December 31, 2011)

, 6,895 passengers were enplaned and deplaned at Jamestown , while 2, 5 31

passengers were enplaned and deplaned at Franklin. The annual subsidy amount for Jamestown is $1, 639,254 and Franklin’s is $ 915,101 . Therefore, the subsidy per passenger at Jamestown is $238 and $ 362 at F ranklin. The Department is prohibited from subsidizing air s ervice 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 5

. Jamestown and Franklin exceed the $200 per passenger cap and both are fewer than 210 miles from a large or medium

4 Previously, most EAS communities were entitled to service with 15

- seat or larger aircraft. However, in the Department’s FY2012 appropriation (Consolidated and Further Continuing Appropriatio ns Act, P.L. 112

- 55, November 18, 2011), Congress repealed the 15

- seat guarantee, although communities are still entitled to service
with twin

- engine aircraft.

5 Congress first established the $200 ceiling under P.L. 101

- 164 for fiscal year 1990, and reest ablished it in fiscal years 1994

- 1999. The ceiling was made permanent by P.L. 106

- 69, the Department of Transportation and Related Agencies Appropriations Act of 2000.- 4

-

hub. Jamestown is 7 7 miles from Buffalo Niagara Internat ional Airport (BUF) and Franklin is
85 miles from Pittsburgh International Airport (PIT).

Regarding Franklin’s subsidy per passenger, i n Order 2 008

- 5

- 3, May 6, 2008, we expressed our
concern that the subsidy level for F ranklin was high when viewed in the context of passenger usage. The Department encouraged the community and Silver (then known as Gulfstream ) to work together to maximize use of the service to av oid exceedi ng the $200 per passenger cap. We also addressed Franklin’s high subsidy per passenger again in Order 2010

- 9

- 12, September 9, 2010, when we re

- selected Silver to serve another two

- year term. We noted that Silver had a plan to work with the co mmunity and airport to partner in a large marketing outreach program to increase passenger usage. Examining passenger traffic (see Appendix B), we see that passenger traffic has not increased, but in fact, has fallen, from 2,749 passengers in CY2010 to 2, 531 passenger in CY2011

.

Rather than terminate service eligibility at either communit y , at this stage, the Department will solicit proposals for EAS at both, but the Department will evaluate all proposals submitted before committing to a two

- year contract or making a final determination on Jamestown and Franklin’s continuing eligibility. Prior to the due date for p roposals, we expect both communities to work aggressively with all potential applicants to mitigate some of the risks that the carriers may face in an attempt to lower their subsidy levels.

Special discussion concerning Bradford and Franklin
T he current average daily enplanements at Bradford and Franklin are 8.8 and 4.0, respectively.
Commensurate with the FAA Modernization and Reform Act of 2012, February 14, 2012, P. L. 112

- 95 , communities will not be eligible for subsidized EAS if enplanements per day are fewer than 10 and the community is located within 175 driving miles of a large or medium hub airport. Bradford is
76 miles from Buffalo Niagara International Airport, a medium hub airport, and Franklin is 85 miles from Pittsburgh International Airport, also a medium hub. As stated in P.L. 112

- 95 , the fewer than 10 enplanements per day provision will be measured using FY2013 passenger data (October 1, 2012, through September 30, 2013). That data will likely be available by January 2014, and the communities’ eligible status will be determined accordingly. Any carrier that proposes service at
Bradford and/or Franklin should be aware of this situation and aggressively promote and stimulate
traffic at both communities to ensure their continued eligibility in the EAS Program.

New Filing Procedures Carrier proposals s hould be s ubmitted to the Department with all materials merged into a single
document. The document will be published on Regulations.gov and each page should be
formatted to be viewed online.

Service and Traffic History In order to assist carriers in making their traffic and revenue forecasts, we have included historical
traffic data in Appendix B. For the 12

- month period ending December 31 , 201 1

, th e most recent period for which traffic data are available, Bradford averaged 8.8 enplanements a day

, DuBois 1 8.9

, Franklin 4. 0

, Jamestown 1 1.1 , Kirksville 13.6 , and Parkersburg 2 3.6

. 6

6 See Appendix B for historical traffic data. Enplanements represent one

- half of total origin

- and

- destination traffic, and average enplanements per day are based on 77 weekdays and weekends each quarter , except as noted.- 5

-

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

- free workplaces, and nondiscrimination. 7 Consequently, all carriers receiving Federal subsidy for essential air ser vice 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 car rier will be required to complete the required certifications. Interested carriers requiring more detailed information regarding these requirements should contact the Office of Aviation Analysis at (202) 366

- 5903. 8

Community and State Comments
The commun it ies and state s are welcome to submit comments on the proposals at any time. As noted earlier, however, we will provide a summary of the proposals to the civic parties and ask them to submit their final comments shortly after June 7 , 2012

, the due date f or proposals.

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

- delegated to the Director, Office of Aviation Analysis.

ACCORDINGLY,
1. We request that carriers interested in providing E ssential A ir S ervice at Bradford, DuBois, Franklin, Jamestown, Kirksville, and/or Parkersburg

, for the two

- year period from October 1,
201 2 , through September 30, 2014

, submit their proposals, with or without requests for subsidy,
no later than June 7 , 2012

. The proposals should be e

- mailed to EA S@dot.gov , with the title: “Proposal to p rovide E AS at Bradford, DuBois, Franklin, Jamestown, Parkersburg, and/or
Kirksville ; 9

2. Th ese docket s will remain open until further order of the Department; and

3 . We will serve co pies of this Order on the Mayor s of Bradford, DuBois, Franklin, Oil City, Jamestown, Kirksville, Parkersburg, and Marietta, the managers of Bradford Regional Airport

, DuBois Regional Airport, Venango Regional Airport (Oil City/Franklin), Chautauqua County

-

7 The 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 Act of 1964; 49 CFR Part 27

– Nondiscrimination on the basis of disability in programs and activities receiving or benefiti ng 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 workp lace (grants).

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

9 Questions regarding filings in response to this order may be directed via electronic mail to Kevin Schlemmer at kevin.schlemmer@dot.gov or via phone at (202) 366

- 3176.- 6

-

Jamestown Airport, Kirksville Regional Airport, and Mid

- Ohio Valley Regional Airport (Parkersburg/Marietta)

, and the service list for these dockets

.

Persons entitled to petition the Department for review of this Order under the Department’s
Aviation Economic 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 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 a t http://www.regulations.govAppendix A Page 1 of 2



## AREA MAP

New York/Pennsylvania/West Virginia

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 A Page 2 of 2



## AREA MAP

Missouri

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

Traffic History *

Stn Year O&D Pax

BFD 2009 5,028

BFD 2010 5,786

BFD 2011 5,495

DUJ 2009 10,312

DUJ 2010 11,290

DUJ 2011 11,836

FKL 2009 2,841

FKL 2010 2,749

FKL 2011 2,531

JHW 2009 7,083

JHW 2010 7,234

JHW 2011 6,895

PKB 2009 10,104

PKB 2010 10,129

PKB 2011 14,792

IRK 2009 1,877

IRK 2010 4,041

IRK 2011 9,952

Average daily enplanements for CY2011 **

• Bradford (BFD)

– 8.8

• DuBois (DUJ)

– 1 8.9

• Oil City/Franklin (FKL)

– 4.0

• Jamestown (JHW)

– 1 1

. 0

• Parkersburg (PKB)

– 2 3.6

• K irksville (IRK)

– 13. 6

*Source

– Silver Airways and Tran S tats T

- 100 market data

** Average daily enplanements=total traffic divided by 313 service days divided by 2 , except for Kirksville. Since Kirksville receives 3 round trips each day, its total traffic is divided by 365 ser vice days

.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 a n 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 co nsidered 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 contemp lates 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 c ircumstances 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 th e 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 leve ls 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 Government’s obligation for perform ance 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 Go vernment 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

.