Order 2010-12-8

Served: December 6, 2010

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 6

th of December, 2010

ORDER RE-SELECTING CARRIER

AND ESTABLISHING SUBSIDY RATES

Summary

By this order, the Department is re-selecting Ellis Air Taxi Inc. d/b/a Copper Valley Air Service 

(Copper Valley),

1 to provide subsidized essential air service (EAS) at Gulkana, May Creek, and

McCarthy, Alaska, for the two-year period beginning February 1, 2011, at the annual subsidy

rates of $262,220 for Gulkana, and $176,692 for both May Creek and McCarthy.

2 (See 

Appendix A for a map of the service area.)

Background

By Order 2008-12-19, the Department selected Copper Valley to continue providing EAS at 

Gulkana, May Creek, and McCarthy, Alaska, for the two-year period ending January 31, 2011, 

for a combined annual subsidy rate of $424,652. Gulkana currently receives two nonstop round 

trips per week to Anchorage with six-seat Piper PA-31 aircraft; May Creek and McCarthy each

receive two nonstop or one-stop round trips per week to Gulkana using three-seat Cessna 185 

aircraft during winter months and four-seat Cessna 206 aircraft during summer months.

 

1 The air carrier has notified the Federal Aviation Administration that they are in the process of officially changing 

the name of the company to simply Copper Valley Air Service. For purposes of consistency, we will refer to the 

name of the company throughout the rest of the order as Copper Valley.

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

Essential Air Service at

GULKANA, ALASKA

MAY CREEK, ALASKA

MCCARTHY, ALASKA

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

DOCKET OST-1995-492
2

As the end of the contract was approaching, the Department issued Order 2010-9-27, 

September 27, 2010, requesting proposals from carriers interested in providing service at the 

communities, with or without subsidy, for a new, two-year period beginning February 1, 2011. 

In response, only the incumbent carrier submitted a proposal.

Carrier Proposal

Copper Valley proposed one service option to continue to provide its historical service levels at 

the communities. At Gulkana, it would use six-seat twin engine Piper PA-31 aircraft and 

operate two nonstop round trips each week year-round to Anchorage for an annual subsidy of 

$262,220. At May Creek and McCarthy, Copper Valley proposed to provide two nonstop or 

one-stop round trips per week to Gulkana using three-seat Cessna 185 aircraft during winter 

months and four-seat Cessna 206 aircraft during summer months for an annual subsidy of 

$176,692.

Community Comments

On October 29, 2010, we requested community comments regarding the carrier-selection

decision at the three communities. We received a letter from Marc Luiken, Deputy

Commissioner of Aviation for the State of Alaska, expressing support for the EAS program at 

these three communities. We also received e-mails and phone calls from citizens of the 

communities expressing their satisfaction with Copper Valley and the importance of air service 

to the livelihood of the communities. 

Decision

The carrier-selection decision is straightforward. Copper Valley is the only applicant and all 

feedback we received pointed to their re-selection. We find the service and subsidy levels 

proposed by Copper Valley to be reasonable. We shall make this selection contingent upon the 

Department’s receiving properly executed certifications from Copper Valley that it is in 

compliance with the Department’s regulations regarding drug-free workplaces and 

nondiscrimination, as well as the regulations governing 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. Copper Valley 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 Federal 

Aviation Administration, and it 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. The Department selects Copper Valley Air Service, to continue to provide EAS at Gulkana,

May Creek, and McCarthy, Alaska, and establishes the subsidy rates, as detailed in 

Appendix B, for the two-year period beginning February 1, 2011;
3

2. We set the final rate of compensation at $262,220 for Gulkana, and $176,692 for May Creek

and McCarthy, for the provision of essential air service as described in Appendix C;

3. We direct Copper Valley Air Service 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. The Department finds that Copper Valley Air Service continues to be fit, willing and able to 

operate as a certificated air carrier and capable of providing reliable EAS at Gulkana, May

Creek, and McCarthy;

5. Docket OST-1995-492 will remain open until further order of the Department; and

6. The Department will serve a copy of this order on the communities of Gulkana, May Creek, 

and McCarthy, Copper Valley Air Service, and the State of Alaska Department of 

Transportation.

By:

SUSAN L. KURLAND

Assistant Secretary for Aviation

 and International Affairs

(SEAL)

An electronic version of this document is available online at

www.regulations.gov
Appendix A
Appendix B

Page 1 of 2
Appendix B

Page 2 of 2
Appendix C

Page 1 of 2

Copper Valley Air Service

Essential Air Service to be Provided at Gulkana, Alaska

Effective Period: February 1, 2011, through January 31, 2013

Scheduled Service: Two weekly nonstop round trips between Gulkana and Anchorage

Aircraft: Six-seat twin engine Piper PA-31

Rate per Eligible Flight: $1,2611

Weekly Ceiling: $5,0442

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 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 December 3, 2010. The 

Department’s obligation for performance under this solicitation beyond December 3, 2010, 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 December 3, 2010, until funds 

are made available to the Department for performance. If funds are not made available for performance beyond 

December 3, 2010, 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.

 

1 Annual compensation of $262,220 divided by 208 annual departures (4 weekly departures x 52 weeks x 100 

percent completion).

2 4 arrivals and departures per week multiplied by $1,261 per flight.
Appendix C

Page 2 of 3

Copper Valley Air Service

Essential Air Service to be Provided at May Creek, Alaska

Effective Period: February 1, 2011, through January 31, 2013

Scheduled Service: May Creek: 2 nonstop or one-stop round trips per week to Gulkana

Aircraft: 3-seat Cessna 185 (winter months)

4-seat Cessna 206 (summer months)

Rate per Eligible Flight: $4251;

Weekly Ceiling: $1,7002

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 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 December 3, 2010. The 

Department’s obligation for performance under this solicitation beyond December 3, 2010, 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 December 3, 2010, until funds 

are made available to the Department for performance. If funds are not made available for performance beyond 

December 3, 2010, 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.

 

1 Annual compensation of $176,692 divided by 2 = $88,346; $88,346 divided by 208 annual departures (4 weekly 

departures x 52 weeks x 100 percent completion).

2 4 arrivals and departures per week multiplied by $425 per flight.
Appendix C

Page 3 of 3

Copper Valley Air Service

Essential Air Service to be Provided at McCarthy, Alaska

Effective Period: February 1, 2011, through January 31, 2013

Scheduled Service: McCarthy: 2 nonstop or one-stop round trips per week to Gulkana

Aircraft: 3-seat Cessna 185 (winter months)

4-seat Cessna 206

Rate per Eligible Flight: $4251;

Weekly Ceiling: $1,7002

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 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 December 3, 2010. The 

Department’s obligation for performance under this solicitation beyond December 3, 2010, 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 December 3, 2010, until funds 

are made available to the Department for performance. If funds are not made available for performance beyond 

December 3, 2010, 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.

 

1 Annual compensation of $176,692 divided by 2 = $88,346; $88,346 divided by 208 annual departures (4 weekly 

departures x 52 weeks x 100 percent completion).

2 4 arrivals and departures per week multiplied by $425 per flight.