### Order 2012

- 7

- 20

Served: Ju ly 17 , 2012



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 17 t h day of Ju ly , 20 1 2

ORDER PROHIB ITING SUSPENSION OF SERVICE AND
REQUESTING PROPOSALS

Summary By this O rder, the Department is prohibiting Great Lakes Aviation, Ltd. (Great Lakes) from suspending service at Clovis and Silver City/Hurley/Deming (Silver City),

New Mexico

, and requesting proposals from ca rriers interested in providing Essential Air

Se rvice (EAS) at either or both communities for a new contract period

, with or without

s ubsidy. (See Appendix A for a service area map )

. Carriers should file their proposals

no later than August 15

, 20 12

.

Background By Order 2011

- 4

- 19 , April 22 , 2011, the Department re

- selected Great Lakes to provide

subsidized EAS with 19

- passenger Beechcraft B

- 1900D aircraft at Clovis and Silver City/Hurley/Deming for the period from May 1, 2011

, to May 31, 2013, at a combined annual subsidy rate of $3,186,249. Currently, G reat Lakes provide s 12 nonstop round trips per week between Clovis and Albuquerque at an annual subsidy of $1,592,157. At Silver City, the carrier provide s 12 nonstop round trips per week to Albuquerque at an annual subsidy of $1,594,092.

O n June 4

, 2012, Great Lakes filed a 90

- day notice of its intention to terminate scheduled

air service at both communities , effective September 3, 2012

. A copy of the Great

Lake s ’ filing may be accessed online through the Federal Docket Management System (FDMS) at http://www.regulations.gov , by entering “DOT

- OST

- 1996

- 1902 ” ( Clovis ) or “DOT

- OST

- 1996

- 1903 ” (Silver City ) in the “ SEARCH for: Rules, Comments, Adjudications or Supporting Documents : ” field. Essential Air Service at

CLOVIS, NEW MEXICO SILVER CITY/HURLEY/DEMING, NEW MEXICO

Under 49 U.S.C. 41731 et seq

. Docket DOT

- OST

- 1996

- 1902

Docket DOT

- OST

- 1996

- 1903

### - 2

-

Hold

- In

Great Lake s ’ proposed termination of service would leave the two communities with no scheduled service. Thus, the Department must prohibit the carrier from terminating such

service for 30 days beyond the end of its 90

- day notice period , i.e., October 3, 2012, and

req uire it to maintain the current level of service at each community as described above

. We will require Great Lake s to continue to maintain its current l evel of service at the

communities for successive 30

- day periods until we have completed processing the

carrier

- replacement case and the selected carrier has actually started full EAS.

Request for Proposals

C arriers interested in providing service at Clovis and/or Silver City

, with or without subsidy, should file their proposals no later than August 15

, 20 1 2

. Staff will then docket proposals, thereby making them public, and shortly afterwards will provide a summary of the proposals to the community and ask them for their final comments. We will give full consideration to all proposals filed in a timely ma nner. 1



### 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 carr iers when we deem it desirable

. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and re

- solicit a new round of proposals. However, negotiation and rejection are 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 bei ng 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 affected communit y and the Department. 2



### Specifically, for service with 19

- seat or larger aircraft, we expect proposals for two round trips a day (12 a week) to Albuquerque, or any other large or medium hub airport offering

1 Carriers should not expect the Department to accept late fillings. 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 pro ceed with the carrier

- selection case. Instead, we simply rely on

that carrier’s su bsidy

- free service as proposed.

2 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c) (1) directs us to to consider four factors: (a) sche duled service reliability; (b) contractual and marketing arrangements with a larger carrier to ensure service beyond the hub; (c) interline arrangements that the applicant has made with a larger carrier at the hub; and (d) community views, giving substanti al weight to the views of the elected officials representing the users. 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 req uirements, thus codifying a factor that we have considered since the inception of the program.

### - 3

-

numerous connections to the national air transportation system. If 8/9

- seat aircraft are proposed, we would expect three round trips a day ( 18 a week). 3



### The communities 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 communities and meets the operational need s of the airline interested in submitting a proposal. In addition,

carr iers 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 those 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 those requirements if they envision other, potentially more attractive service possibilities

-- different hubs, or length of contract, for example

-- with subsidy requirements that remain competitive.

New Filing Procedures Carrier proposals should be submitted to the Department with all materials compiled into a single document. In addition, because the document will be published on http://www.regulations.gov/ , each page should be formatted to be viewed online and for easy printing.

Service and Traffic History In order to assist carriers in making their passenger and revenue forecasts, we hav e provide d historical passenger traffic in Appendix B. During the year ended September 30

, 20 11

, Clovis averaged 7.0 enplanements a service day

, which has been steadily increasing. Silver City averaged 4.9 enplanements a service day , a decrease

when contrasted with the previous two fiscal year s

.

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 for essential air service 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

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

- seat or larger aircraft. However, for

FY 2012, Congress re p ea l ed the minimum requirement tha t basic EAS include service with at least 15

- seat or larger aircraft. See Consolidated and Further Continuing Appropriations Act, P.L. 112

- 55,

November 18, 2011. Communities are still entitled to service with twin

- engine aircraft.

4 The regulations appli cable 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 Pa rt 27

-- Nondiscrimination on the basis of disability in programs and activities receiving or benefiting from Federal financial assistance; and 14 CFR Part 382

-- Nondiscrimination on the basis of disability in air travel; and (3) 49 CFR Part 29

-- Governm ent

- wide debarment and suspension (non

- procurement) and government

wide requirements for drug

- free workplace (grants).

### - 4

-

that do not submit these documents, all carriers that plan to submit prop osals involving subsidy should be aware that the selected carrier 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. 5



### Community and State Comments

The communities and State are welcome to submit comments at any time. We encourage prospective applicants to contact each communit y before they submit their proposals so that they can tailor them to the c ommunit ies’ needs, as they will not be able to amend them after the due date. 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 15

, the

deadline for carrier proposals.

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

ACCORDINGLY,

1

. The Department prohibits Great Lakes Aviation, Ltd. from suspending service at Clovis and Silver City/Hurley/Deming, New Mexico , at the end of its 90

- day noti ce period and requires it to maintain at least 12 nonstop round trips per week between each community and Albuquerque, New Mexico

, as subsidy rates specified in Order 2011

- 4

- 19, with 1 9

- seat Beechcraft 1900D aircraft through Octo ber 3, 2012 , or until a car rier capable of providing reliable air service begins full service, whichever comes first; 6



### 2 . We request that ca rriers interested in providing Essential Air S ervice at Clovis and /or Silver City/Hurley/Deming, New Mexico submit their proposals, with or without subsidy requests, no later than August 15

, 2012

. The proposals should be e

- mailed to: EAS@dot.gov with the title “ Proposal to Provide Essential Air Service at Clovis and/or

Silve r City/Hurley/Deming, New Mexico

, ” with the docket number s corresponding to the

communit ies as s hown on the first page of this O rder ; 7



### 3. The Department directs Great Lakes Aviation, Ltd. to retain all books, records, and other source and summary documen tation 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 date of th is 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 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.

6 In accordance with 49 U.S.C. 41734(c ), we will extend Great Lakes ’ service obligation for successive 30

- day periods as necessary until full replacement service is provided.

7 Questions regarding filings in response to this order may be directed to Brian Swanson at (202) 366

- 5392

or brian.swanson@dot.gov

.

### - 5

-

4. The s e docket s will remain open until further order of the Department; and

5 . We will serve copies of this order on the community and the parties listed in Appendix D.

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



# AREA MAP

Airport Codes
ABQ : Albuquerque International Sunport

CNM : Clovis Municipal Airport

CVN : Cavern City Airport (Carlsbad)

DEN : Denver International Airport

PHX : Phoenix Sky Harbor International Airport

PUB : Pueblo Memorial Airport
SAF: Santa Fe Municipal Airport

SVC : Grant County Airport ( Silver City)

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 Page 1 of 2 Traffic History 1



### Clovis, N ew M exico (CVN)

Year Month Outbound Inbound Total Year Month Outbound Inbound Total

2008 10 170 192 362 2010 10 182 199 381

2008 11 177 175 352 2010 11 200 212 412

2008 12 181 204 385 2010 12 208 171 379

2009 1 163 133 296 2011 1 136 177 313

2009 2 162 161 323 2011 2 166 187 353

2009 3 173 177 350 2011 3 203 205 408

2009 4 152 150 302 2011 4 164 181 345

2009 5 146 156 302 2011 5 199 206 405

2009 6 222 186 408 2011 6 164 190 354

2009 7 217 208 425 2011 7 208 208 416

2009 8 176 170 346 2011 8 174 183 357

2009 9 159 162 321 2011 9 132 146 278

4,172 4,401

2009 10 183 173 356

2009 11 157 175 332

2009 12 173 177 350

2010 1 176 138 314

2010 2 174 154 328

2010 3 167 149 316

2010 4 172 193 365

2010 5 213 215 428

2010 6 154 137 291

2010 7 210 194 404

2010 8 218 215 433

2010 9 212 179 391

4,308



### Average daily enplanements at Clovis (12

- months ending 8/31/2010)

– 7

. 0 2

1 Source

– T

- 100 Market Report, Passengers in Scheduled Passenger Service. Great Lakes Airlines service only.

2 Average daily enplanements= t otal traffic for the 12

- month period from 10/1/2010 to 9/30/2011 (4,401 passengers) divided by 313 service days divided by 2

.

### Appendix B Page 2 of 2

Silver City, N ew M exico (SVC) 3

Year Month Outbound Inbound Total Year Month Outbound Inbound Total

2008 10 243 225 468 2010 10 117 118 235

2008 11 163 167 330 2010 11 125 116 241

2008 12 179 178 357 2010 12 94 111 205

2009 1 170 151 321 2011 1 59 82 141

2009 2 143 147 290 2011 2 109 105 214

2009 3 155 153 308 2011 3 134 127 261

2009 4 172 162 334 2011 4 152 154 306

2009 5 158 164 322 2011 5 149 166 315

2009 6 150 166 316 2011 6 152 141 293

2009 7 153 137 290 2011 7 150 159 309

2009 8 167 179 346 2011 8 147 159 306

2009 9 145 152 297 2011 9 109 132 241

3,979 3,067

2009 10 153 158 311

2009 11 115 118 233

2009 12 143 136 279

2010 1 124 120 244

2010 2 122 121 243

2010 3 113 104 217

2010 4 141 127 268

2010 5 152 149 301

2010 6 136 113 249

2010 7 148 163 311

2010 8 108 116 224

2010 9 146 138 284

3,164



### Average daily enplanements at Silver City (12

- months ending 9/30/2011 )

– 4.9 4

3 Source

– T

- 100 Market Report, Passengers in Scheduled Passenger Service. Great Lakes Airlines service only.

4 Average daily enplanements= t otal traffic for the 12

- m onth period from 10/1/2010 to 9/30/2011 (3,067 passengers) divided by 313 service days divided by 2.

### 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 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 co mpleted, 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 writt en 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 oper ated; 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 me t 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 reg ard 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.

Su bsidy 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 forego ing paragraph.

Funds are not currently available for performance under this solicitation beyond [DATE] . The Department’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 Department for any payment may arise for performance under this order beyond [DATE] , until funds are made availab le 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 se rvice provided

under this order.

### Appendix D

SERVICE LIST

Air Choice One Airlines, Shane Storz Delta Air Lines, Stephen A. Hedden Pacific Aviation Group, Craig Garrick

Air Greco/Wings Air Dorado Jets Pacific Aviation Group, Ron Rye

Air Sunshine, Inc. Dorado Jets, Mark McKenna Pacific Wings, Frank Ford

Air Sunshine, Mirmohammad Adili Era Aviation, Lori Goodman Pacific Wings, Greg Kahlstorf

Air West, Inc., John Raatz Executive Airlines, Kate Soled Penn Air, Danny Seybert

Air Wisconsin, Annette Daly Ex pressJet, Jon Lindlief Penn Air, Scott Bloomquist

Air Wisconsin, Jim Rankin ExpressJet, Roger Weston Pinnacle Airlines, Jennifer Gammill

Airline Associates, Bill Mishk Frontier Airlines, Daniel Shurz Pinnacle Airlines, Megan Rosia

Alaska Airlines, Jeff Cole Frontier Flying, Bob Hajducovich Pinnacle Airlines, Phil Reed

Alaska Airlines, Sandy Sinick Frontline Aviation Planemasters, Inc., John Kessler

American Airlines, Carl Nelson Gem Air, Dan Schroeder Planemasters, Inc., Paul Berliner

American Eagle, Gary Foss Gem Air, JoAnn Wolters Planemasters, Inc., Todd DeSimone

American Eagle, Robert Emrich Great Lakes Airlines, Chuck Howell RAA, Faye Balck

American Eagle, Patrick Swift Great Lakes Airlines, Doug Voss Raytheon, Mike Schiedt

Aviation Express, Brad Shriner Homeland Security, Bill Ragan Rectrix, Aviation, Scott LaForge
Aviation Technologies/Charter Air Transport, Jim Gallagher Homeland Security, David Bernier Saab Group, Polly Prelinger

Bemidji Aviation, Arlen Rinkenberger Horizon Air, Jennifer Thompson Scenic, Mary Schneider

Bemidji Aviation, Cori Rude Horizon Air, Mike McQeen Scenic, Mitzi Daines

Cape Air, Andrew Bonney Horizon Air, Jeff Cole Seaborne Airlines, Shawn Lewis

Cape Air, Dan Wolf ICEPR, Luis Irizarry SeaP ort Airlines

, EAS Mailbo x
Cape Air, J. Flaherty Intrepid Internatl Air, Rick Eyk SeaPort Airlines. Rob McKinney

Capital Aviation, Mike Colgan Island Air Charters, Linda House Shuttle America, Jerry Balsano

Chautauqua, Josh Pascoe Jet Air, Daniel Wolford Silver Airways, Darrell Richardson

Classic Aviation, Tony Henderson Kenmore Air, Tim Brooks Silver Airways, Mickey Bowman

Colgan Air, Kevin Scott McCall Aviation, Dan Scott SkyWest, Brad Rawson

Colgan Air, Mike Colgan McCall Aviation, Michelle SkyWest, Eric Christensen

Commu tAir, Andy Price Mesaba, John Spanjers SkyWest, Michael Thompson

CommutAir, Joel Raymond Mesaba, Max Shemesh Sovereign Air, Bob Karns

Consultant, Jeff Hartz Michigan DOT, Matt Brinker Tailwind International, Michele

Wilkinson
Consultant, Mike Mooney Midstar Airlines, Jeffrey Fonner Tatonduk, Robert Everts

Consultant, Robert Silverberg Republic Air Line , Greg Aretakis Tatonduk, Robert Ragar

Consultant, Ron McNeil MN Aviation, Jose Maldonado Tradewind, Eric Zipkin

Continental, Bruce Keiner Multi Aero, Darnea Transport Azumah, Joel Anabilah

Azumah

Continental, Dan Weiss Multi Aero, Shane Storz Trans States, Fred Oxley

Continental, Lorry Halloway Northern Air Cargo, David Karp Trans States, Gerry Wigmore

Delta Air Lines Anthony Canitano Nor thern Air Cargo, Eric Van Andel Trans States, Warren Crotty

Delta Air Lines, Dan Shuman NYDC, Henok Araya United, Alicia Gabriel

Delta Air Lines, Dana Debel OST, Brian Swanson United, James Starnes

Delta Air Lines, Jeff Davidman OST, Brooke Chapman US Airways, Benjamin Slocum

Delta Air Lines, Jeff Morgan OST, Dennis DeVany US Airways, Howard Kass

Delta Air Lines, Joe Esposito OST, Kevin Adams US Airways, Jason Reisinger

Delta Air Lines, Kristal Murphy OST, Kevin Schlemmer Warbelows Air Ventures, Art

Warbelow
Delta Air Lines, Sally Veith OST, Michael Martin NM DOT, Jane Lucero

Delta Air Lines, Sascha Vanderbellen OST, Scott Faulk Grant County, Jon Saari
Clovis Municipal Airport, Gene

Bieker