Order: 2010-5-10

Served: May 10, 2010

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 10th day of May, 2010

Essential Air Service at

ALTOONA, PENNSYLVANIA

JOHNSTOWN, PENNSYLVANIA

Docket DOT-OST-2002-11446

Docket DOT-OST-2002-11451

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

ORDER SELECTING CARRIER

Summary

By this order, the Department is selecting Colgan Air Inc., operating as United Express (Colgan),

to provide essential air service (EAS) at Altoona and Johnstown, Pennsylvania, for a combined

annual subsidy of $3,348,294, for the two-year period from July 1, 2010 to June 30, 2012.

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Background

By Order 2008-6-10, the Department selected Colgan to provide the communities of Altoona 

and Johnstown 18 weekly nonstop or one-stop round trips to Washington Dulles at a combined

annual subsidy of $2,788,785 for the two-year period from June 15, 2008, through 

June 30, 2010. As the end of the contract was approaching, we issued Order 2010-2-28, 

February 26, 2010, requesting proposals to serve both communities for a new, two-year term. In 

response, we received proposals from Charter Air Transport (Charter Air), Colgan, Gulfstream 

International Airlines (Gulfstream) and Sovereign Air, Inc. (Sovereign). Each carrier’s complete 

proposal may be accessed online at http://www.regulations.gov/ by entering DOT-OST-2002-

11446 for Altoona and DOT-OST-2002-11451 for Johnstown in the search block.

 

1

Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.
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Proposal of Charter Air

Charter Air proposed one service option using 30-seat Embraer EMB-120 aircraft operating two 

round trips each day except Saturday over an Altoona-Johnstown-Washington Dulles routing, 

and one round trip each day except Saturday over an Altoona-Johnstown-Pittsburgh routing for a

combined annual subsidy of $2,960,205.

Proposal of Colgan

Colgan proposed one service option to provide both communities with three round trips each 

weekday and each weekend (18 a week), with a mix of nonstop and one-stop service over an 

Altoona-Johnstown-Washington Dulles or Johnstown-Altoona-Washington Dulles routing using 

34-seat Saab 340 aircraft for an annual subsidy of $3,348,294.

Proposal of Gulfstream

Gulfstream proposed four service options, all of which would use 19-seat Beechcraft 1900 

aircraft. Option 1 would operate to Cleveland as Continental Express; Options 2-4 would 

operate to Pittsburgh and be without a code share. Option 1 would offer four weekday round 

trips and a total of four weekend round trips (24 a week), over a Cleveland-Altoona-JohnstownCleveland routing or Cleveland-Johnstown-Altoona-Cleveland routing, for an annual subsidy of 

$3,874,464. Option 2 would offer three nonstop round trips each weekday and weekend (18 a 

week) over an Altoona-Pittsburgh routing for an annual subsidy of $1,983,918. Option 3 would 

offer three nonstop round trips each weekday and weekend (18 a week) over a JohnstownPittsburgh routing for an annual subsidy of $1,749,981. (Options 2 and 3 total $3,733,899.) 

Option 4 would offer four weekday round trips and a total of four weekend round trips with a 

mix of nonstop and one-stop service over a Pittsburgh-Altoona-Johnstown-Pittsburgh routing or 

Pittsburgh-Johnstown-Altoona-Pittsburgh routing for an annual subsidy of $3,301,212. 

Proposal of Sovereign

Sovereign proposed three service options. While all three options would use King Air 350 

aircraft, under Option 1, it would be configured with 12 seats, and under Options 2 and 3, 9 

seats. Option 1 would offer five daily round trips (35 a week) over a Johnstown-AltoonaWashington Dulles routing for an annual subsidy of $1,103,603. Option 2 would offer four 

daily nonstop round trips (28 a week) over a Johnstown-Washington Dulles routing for an 

annual subsidy of $1,117,417. Option 3 would offer four daily nonstop round trips (28 a week) 

over an Altoona-Washington Dulles routing for an annual subsidy of $1,231,939. (Options 2 

and 3 total $2,349,356.) We must note, however, that none of these options meet the 15-seat 

requirement in the EAS governing statutes (see 49 USC §41732 (b)(3)).

Community Comments

On March 29, 2010, we requested comments from members of the Altoona and Johnstown 

communities regarding the selection of an air carrier. We received several letters from business 

leaders, airport officials and elected representatives. The vast majority of feedback favored the 

re-selection of Colgan. In a letter dated April 20, 2010, William Schirf, Mayor of Altoona,

expressed support for Colgan’s proposal, stating that the “Dulles service offered by Colgan 

Air/United Express is a popular connection for many of our residents and business people. 

Colgan also offers dependable, safe and affordable air transportation at the Altoona-Blair County 

Airport facility.” 
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The Johnstown-Cambria County Airport Authority and Blair County Airport Authority jointly 

submitted a detailed letter also supporting Colgan’s proposal, citing continuity of service, the 

connections offered at Washington Dulles, and the interline ticketing and baggage agreements 

that Colgan, through its code share with United, has with most major carriers as the principal 

reasons for their decision. Both the Cleveland and Pittsburgh airports submitted letters 

supporting Gulfstream’s proposal.

Decision

After carefully reviewing each carrier’s proposal and taking into account community feedback, 

we have decided to select Colgan’s proposal of three round trips each weekday and each 

weekend (18 a week), with a mix of nonstops and one-stop service over an Altoona-JohnstownWashington Dulles or Johnstown-Altoona-Washington Dulles routing using 34-seat Saab 340 

aircraft for an annual subsidy of $3,348,294. We find that the service and subsidy levels are 

reasonable, and will meet the community’s EAS needs.

We base our decision to choose Colgan on the four carrier-selection criteria contained in 49 

U.S.C. §41733(c): 1) the demonstrated reliability in providing scheduled air service; 2) the 

contractual and marketing arrangements with a larger carrier to ensure service beyond a hub 

airport; 3) interline agreements with a larger carrier; and 4) community support. Colgan’s 

proposal meets all four statutory criteria. Colgan is an established scheduled air carrier serving 

communities throughout the U.S., and, in the case of Altoona and Johnstown, has provided the 

two communities reliable air service for several years. Colgan has a code share with United 

Airlines and, therefore, can provide its passengers connections beyond the Washington Dulles 

hub to the national air transportation network with relative ease. Colgan, through its code share 

with United Airlines, has interline agreements with most major air carriers, enabling passengers 

to reach their destination with one reservation, ticket and baggage check-in. Lastly, the 

communities overwhelmingly support Colgan’s proposal.

While Gulfstream has a code sharing agreement with Continental Airlines that would provide 

seamless service beyond the hub, it would offer no appreciable subsidy savings (its least 

expensive option is only $48,000 less than Colgan’s for both communities combined and the 

others are more expensive.) Moreover, it received no local support. 

Regarding the proposals of Charter Air and Sovereign, there was no community support for 

either carrier’s proposals, and, in the case of Sovereign, the carrier currently does not have the 

requisite operating authority from either the Federal Aviation Administration (FAA) or the 

Department of Transportation’s Economic Fitness Division to operate its proposed service.

We shall make this selection of Colgan contingent upon the Department’s receiving properly 

executed certifications from the carrier that it is in compliance with the Department’s regulations 

regarding drug-free workplaces and nondiscrimination, as well as the regulations concerning 

lobbying activities.

Carrier Fitness

49 U.S.C. 41737(b) requires that we find an air carrier fit, willing, and able to provide reliable 

service before we may subsidize it to provide essential air service. Colgan is subject to the

Department’s continuing fitness requirements, and no information has come to our attention that 

would cause us to question the carrier's fitness at this time. We have contacted the FAA, and it 
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has raised no concerns that would negatively affect our fitness finding. We therefore conclude 

that the carrier remains fit to conduct the operations proposed here.

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

ACCORDINGLY,

1. We select Colgan Air Inc., operating as United Express, to provide essential air service at 

Altoona and Johnstown, Pennsylvania;

2. We set the final rate of compensation for $3,348,294 for the provision of essential air service 

at Altoona and Johnstown, as described in Appendix C;

3. We direct Colgan Air Inc. 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 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;

4. We find that Colgan Air Inc. continues to be fit, willing and able to operate as a certificated

carrier and capable of providing reliable essential air service at Altoona and Johnstown, 

Pennsylvania;

5. Dockets DOT-OST-2002-11446 and DOT-OST-2002-11451 will remain open pending 

further Department action; and

6. We will serve copies of this order on the City and Airport Managers of Altoona and 

Johnstown, Colgan Air Inc., Charter Air Transport, Gulfstream International Airlines, and 

Sovereign Air.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
Appendix A

AREA MAP
Appendix B
 Appendix C

 

Colgan Air Inc.

Essential Air Service to be Provided at Altoona and Johnstown, Pennsylvania

Effective Period: July 1, 2010 through June 30, 2012

Scheduled Service: 18 weekly nonstop and one-stop round trips over an Altoona-JohnstownWashington Dulles or Johnstown-Altoona-Washington Dulles routing

Aircraft: Saab 340 34-seat aircraft

Rate per Eligible Flight: $9221

Weekly Ceiling for each community: $33,1922

Note: 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 the 

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 order beyond September 30, 2010. The Department’s 

obligation for performance under this order beyond September 30, 2010, is subject to 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 September 30, 2010, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 30, 2010, the 

Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of service provided under this order.

 

1 Annual compensation of $3,348,294 divided by3,632 annual departures (36 weekly departures x 2 communities 

x 52 weeks x 97 percent completion).

2

36 arrivals and departures per week multiplied by $922 per flight.