Order: 2011
- 5
- 7 Served: May

5, 2011 

### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON , D.C. Issued b y the Department of Transportation on the 5 th day

of May , 20 1 1 Essential Air Service at VICTORIA, TEXAS DOCKET DOT - OST - 2005 - 20454 under 49 U.S.C. 41731 et seq.



### ORDER RE - SELECTING CARRIER Summary By this order, the Department is re - selecting Colgan Air, Inc. , operating as Continental Connection (Colgan) to provide essential air service (EAS) at Victoria, Texas , using 34
- seat Saab 340 aircraft for a two - year period beginning July 1, 2011, through June 30 , 2013 for an annual subsidy

of $ 1,856,692
. 1 Background By Order 2009
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- 10, June 11, 2009, the Department selected Colgan to provide EAS at Victoria for the period from July 1, 2009, through June 30, 2011, for an annual subsidy of $1,593,922 for 13 nonstop round trips per week to George Bush Intercontinental Ai rport (Houston). As the end of the contract was approac hing, we issu ed Order 2011
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- 11 , January 14, 2011, requesting proposals from carriers interested in providing EAS at the community , for a new , two - ye ar period beginning July 1, 2011 . In response to that order, we received prop osals from the incumbent, Colgan , as well as SeaPort Airlines, Inc. (SeaPort).
1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.- 2
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Each carrier’s complete proposal and community comments may

be accessed online at http://www.regulations.gov/ by entering Docket number DOT
- OST
- 2005
- 20454 in the search block
. Proposal of Colgan Colgan proposed two weekday and three weekend nonstop round trips (13 a week) to Houston usi ng 34
- seat Saab 340 aircraft for an annual subsi dy of $1,856,692
. Proposal of SeaPort SeaPort proposed three daily nonstop round trips (21 a week) to Dallas Love Field (Dallas) using 9
- seat Pilatus PC
- 12 aircraft for an annual subsidy of $2,013,352 for the first year and $2,087,314 for the second ye ar. Community Comments On February 25 , 2011, we requested community comments regard ing this carrier
- selection case. In response, we received letters from Jason Milewski, Managing Director at Victoria Regional Airport, and Zuckert, Scoutt & Rasenberger, L. L.P., Counsel for the City of Houston and the Greater Houston Partnership. Both letters strongl y supported Colgan’s EAS proposal at Victoria. Mr. Milewski indicated that between Colgan and SeaPort, Colgan’s proposal “better meets our community ’s needs .” Mr. Milewski did add, however, that if Colgan is re
- selected, the community would like the airline to improve their completion ratio for all flights. Decision The decision is straightforward and clearl y points to the re
- selection of Colgan for a new , two - ye ar term. The community fully supports Colgan’s proposal and the airline has provided reliable EAS at Victoria for several years. Inadditi on, Colgan’s subsidy request is slightly less than SeaPort’s. Furthermore, the community was unwilling to wa ive its right to 15
- seat or larger aircraft, thus eliminating SeaPort’s proposal altogether. We do expect, however, Colgan to work to address the community ’s concerns regarding its service reliability
. W e shall make this selection of Colgan at Victoria c ontingent upon the Department’s receiving properl y 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 lobb yi ng acti vities. Carrier Fitness 49 U.S.C. 41737(b) and 41738 require 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 subj ect to the Department’s continuing fitness requirements, and no information has come to our attention that would cause us to questio n the carrier's fitness at this time. We have contacted the Federal Aviation Administration, and it has raised no concerns that would negativel y affect our fi tness finding s . We therefore conclude that the carrier is reliable and remain s fit to conduct the operations proposed here.- 3
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This order is issued under authority delegated in 49 CFR 1.56a(f). AC CORDINGLY, 1. We select Colgan Air, Inc. to provide essential air service at Victoria, Texas , an d establish an annual subsidy rate of $ 1,856,692 , as described in Appendix C; 2. We direct Colgan Air, Inc. to retain all books, records, and other source and summary documentation to support claims for pay ment, 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 ye ars 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 an y claim that is not supported under the terms of this order; 3 . We f i nd that Colgan Air, Inc. continue s to be fit, willing and able to operate as a commuter carrier , and capable of providing reliable essential air service at Victoria ; 4. This docket will remain open pending further Department action ; and 5 . We will serve copies of this order on the Mayor of Victoria , the Managing Director of Victoria Regional Airport, Zuckert, Scoutt & Rasenberger, L. L.P., Colgan Air, Inc. , and SeaPort Airlines, Inc. B y:

SUSAN L. KURLAND Assistant Secretary for Aviation and Internatio nal Affairs (SEAL) An electronic version of this document is ava ilable at http://www.regulations.govAppendix A 

## AREA MAPAppendix BAppendix C Colgan Air, Inc. Essential Air Service to be Provided at Victoria, Texas Effective Period : July

1, 2011, through June 30, 2013 Scheduled Service : Two weekday and three weekend nonstop round trips (13 a week) to Houston Aircraft : 3 4
- seat Saab 340 Rate per Eligible Flight: $ 1,416 ; 1 Weekly Ceiling : 36,816 2 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 destinatio n 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 f light 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 complete ly , 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 o r 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 wr iting by the Department and the carrier do not constitute a total or partial reduction or cessation of payment. Funds are not currently available for performance under this order beyond April 8 , 2011
. The Department’s obligation for performance under this order beyond April 8 , 2011 , 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 April 8 , 2011 , until funds are made available to the Department for performance. If funds are not made available for perf ormance beyond April 8 , 2011 , the Department will provide notice in w

riting to the carrier. Subsidy contracts are subject to, and incorporate by reference, relevant statutes and Department regulations, as they may be amended from time to time. However, any such statutes, regulations, or amendments thereto shall not operate to controvert the foregoing paragraph. All claims for payment must be submitted within 60 days of the last day of service provided under this order.

1 Annual compensation of $1, 856,692 divided by 1,311 annual departures (26 w eekly departures x 52 weeks x 97 percent completion). 2 26 arrivals and departures per week multiplied by $1,416 per flight.