Order 20 10

- 5

- 33

Served: May 28 , 20 10



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

Issued by the Department of Transportation

on the 28 th day of May , 20 10

Essential Air Service at

ATHENS, GEORGIA
MAC ON, GEORGIA

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 2002

- 11348
DOCKET DOT

- OST

- 2007

- 28671



### ORDER REQUESTING PROPOSALS

Summary By this order, the Department is requesting proposals , by June 2 1, from carriers interested in providing essential air service (EAS) at Athens and Macon, Georgia

, for a new two

- year period beginning October 1 , 20 10 , with or without subsidy. (See Appendix A for map.)

Background By Order 2008

- 5

- 43

, May 29 , 200 8 , the Department selected Pacific Wings

, L.L.C . d/b/a Georg ia Skies ( Georgia Skies )

, to provide EAS at Athens and Macon for the two

- year period through September 3 0 , 20 10 . That order established an annual subsidy rate of $1, 051

, 386 at
Athens for s ervice consist ing of 1 2 nonstop round trips per week, and $1,386,30 6 at Macon for 26 nonstop round trips per week. All service was operated nonstop to Atlanta with 9

- seat
Cessna C

- 208B Grand Caravan aircraft

.

Special discussion concerning Macon

Based on available data for 2009, there were 2

, 98 7 passengers enplaned and d eplaned at Macon

. The annual subsidy amount for Macon is $1,3 86

, 306 , resulting in a subsidy per passenger of $ 464 . The Department is prohibited from subsidizing air service at a community where the subsidy per passenger exceeds $200

, unless the com munity is more than 210 highway miles from- 2

-

the nearest large or medium hub airport

. 1 Macon is 82 miles from Atlanta

- Hartsfield International Airport

.

Rather than terminate Macon’s service eligibility at this stage, the Department will solicit proposals for EAS , but will evaluate all proposals submitted before committing to a two

- year contract or making a final determination on Macon ’s continuing eligibility. During the 30

- day window for proposals, we expect the community to work aggressively with all potential applicants to mitigate some of the risks that the carriers may face in an attempt to lower subsidy

levels.

Request for Proposals As the end of the current rate term approaches, in order to provide sufficient time to complete the

carrier

- selection process before the current contract expires, we are here requesting proposals from carriers interested in providing service at Athens and Macon , with or without subsidy support, for the two

- year period beginning October 1, 20 10 . Carriers should file their propos als

no later than June 2 1 . After that date , our staff will docket proposals, thereby making them public, and direct each carrier to serve a copy of its proposal on the civic parties and other applicants. Shortly afterwards, we will provide a summary of t he proposals to communit y officials and ask them to submit their final comments. We will give full consideration to all proposals filed in a timely manner. 2

Interested carriers should prepare their proposals with every expectation that their initial

prop osals will also be their final and only proposals. We retain the discretion to negotiate proposals with carriers when we deem it desirable. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and solicit 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 se rvice being proposed and the annual amount of subsidy being 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 community and the Department. 3

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

- 164 for fiscal year 1990, and reestablished 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.

2 Carriers should n ot 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 do not proceed with the carrier

- select ion 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 views. 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 the inception of the program. Interested carriers should also be aware that our general provisions governing EAS

w ill 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

-

In order to assist carriers in developing traffic and revenue projections for their proposals, we have summarized historical passengers in Appendix B. In 2009, Athens generated 9,214 O&D passengers, averaging 14.7 enplanements a day , a significant increase from the 6,550 passengers it generated i n 2008

.

Macon, however, has experienced a dramatic drop in passenger levels over the last several years. During 2009, it generated a total of 2,987 O&D passengers, drastically lower than the previous year during which there were 19,460 enplanements, or a n average of 31 daily enplanements.

As stated above, we will evaluate all proposals submitted before committing to a two

- year contract or making a final determination on Macon ’s continuing eligibility.

Proposals should provide sufficient capacity to acco mmodate historical levels of traffic. In order to assist carriers in developing traffic and revenue projections for their proposals, we have summarized historical passengers in Appendix B. Specifically for these communities

, we expect proposals that are consistent with what the communities currently receive (three or four daily round trips with nine

- seat aircraft)

. We note that EAS at the communities calls for service with

15

- seat aircraft. However, during the current two

- year contract, the communities approved the

service with nine

- seat aircraft. For carriers proposing 15

- seat or larger aircraft, we expect proposals for two round trips a day (12 per week). Service should be to Atlanta, Charlotte, Nashville or any hub that offers access to the national air transportation system. Carriers are also welcome to propose more than one option, if they choose; they need not limit themselves to those requirements if they envision other, potentially more attractive service possibilities

-- different hubs, for ex ample

-- with subsidy requirements that remain competitive. 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 communit ies and meets the operational needs of the airline interested in submitting a proposal.

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

-- different hubs, for example

-- with subsidy requirements that remain competitive.

New Filing Procedures Carrier proposals should be submitted to the Department with all materials merged into a single document. In addition, because the document will be published on Regulations.gov, each page

should be formatted to be viewed online.- 4

-

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 to support 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. All carriers that plan to submit pr oposals involving subsidy should submit the required certifications along with their proposals. Interested carriers requiring more detailed information regarding these requirements, as well as copies of the certifications, should contact the Office of Avi ation Analysis at (202) 366

- 5903. The Department is prohibited from paying subsidy to carriers that do not

submit these documents. 5

Community and State Comments Civic officials are welcome to submit comments on the proposals at any time. As noted earlie r, we will provide a summary of the proposals to the civic parties and ask them to submit their final comments shortly after June 2 1 , the due date for carrier 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 essential air service at Athens and/or Macon, Georgia

, submit their proposals, with or without subsidy requests, no later than June 2 1 , 20 10

. T he proposals should be emailed to: EAS@dot.gov with the title “Proposal to Provide Essential

Air Service at Athens, Georgia , Docket DOT

- OST

- 200 2

- 1 1348 ” and/or “Proposal to Provide Essential Air Service at Macon, Georgia , Docket DOT

- OST

- 2007

- 28671” ; 6

2. Docket s DOT

- OST

- 200 2

- 11348 and DOT

- OST

- 2007

- 28671 will remain open until further order of the Department; and

3. The Department will serve a copy of this order on the mayors and airport managers of Athens

and Macon

, Ge orgia

, Pacific Wings, L.L.C. d/b/a Georgia Skies

, and the parties listed in Appendix D.

4 The regulations applicable to these areas are: (1) 49 CFR Part 20

– New restrictions o n 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 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

– Government

- wide debarment and suspension (non

procurement) and government

- wide requirements for drug

- free workplace (grants).

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

6 Questions regarding filings in response to this order should be directed to Renée Williams at 202

- 366

- 1058 , or via

email at renee.williams@dot.gov

.- 5

-

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 wit hin 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 elec tronic version of this document is available on line at www.regulations.gov

### Appendix A



## Area Map

### Appendix B

Historical O&D Traffic and Average Daily Enplanements 1

Athens, GA



### Average Daily
O&D Traffic En planements 2


### 1Q09 2,280 14.8 2Q09 2,180 14.0 3Q09 2,058 13.0 4Q09 2,696 17.1
2009 Totals: 9,214 14.7

1Q08 3,339 21.4 2Q08 1,383 8.9 3Q08 113 0.7 4Q08 1,715 10.9
2008 Totals: 6,550 10.4

Macon , GA



### Average Daily
O&D Traffic Enplanements 2


### 1Q09 721 4.7 2Q09 821 5.3 3Q09 655 4.1 4Q09 790 5.0
2009 Totals: 2,987 4.8

1Q08 4,857 31.1 2Q08 6,554 42.0 3Q08 5,852 37.0 4Q08 2,197 13.9
2008 Totals: 19,460 31.0

________________________________ 1 Source: Bureau of Transportation S tatistics; TranStats Form 41 , Schedule T

- 1 00

. 2 Daily averages are based on one

- half of the O&D passengers

, divided by 3 13 service days (314 during leap years).

### Appendix C

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 completed, such as certain weather ca ncellations, 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 p eriod 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 f or 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 n ational 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, t hen, 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 a vailable for performance under this order beyond September 30, 2010. The Government's obligation for performance under this order beyond September 30, 2010, is contingent upon the availability of appropriated funds from which payment for services can be

m ade. 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 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.

### Appendix D

Scheduled Air Carriers, Contiguous US and Puerto Rico

Air Sunshine, Inc. Jet Air, Daniel Wolford
Air Sunshine, Mirmohammad Adili Kenmore Air, Tim Brooks
Air West, Inc., John Raatz McCall Aviation and Salmon Air, Dan Scott Air Wisconsin, Annette Daly McCall Aviation, Michelle
Airline Associates, Bill Mis hk Mesa Air, Jonathan Ornstein
Alaska Airlines, Jeff Cole Mesa Air, Michael Lotz Alaska Airlines, Sandy Sinick Mesa Air, Mike Holcomb Allegiant Air, Robert Ashscroft Mesaba, John Spanjers
American Airlines, Carl Nelson Mesaba, Max Shemesh

American Eagle, Jeffrey Hartz Midstar Airlines, Jeffrey Fonner
Atlantic Southeast, Jon Lindlief Midwest Airlines, Anthony Intravia Atlantic Southeast, Roger Weston Midwest Airlines, Greg Aretakis Bemidji Aviation, Cori Rude Midwest Airlines, J.C. Augustson Bemidji Aviation, Arlen Rinkenberger MN Aviation, Jose Maldonado Cape Air, Andrew Bonney Multi Aero, Darnea Cape Air, Dan Wolf Multi Aero, Shane Storz Cape Air, J.Flaherty Northwest, Tim McDonald Classic Aviation, Tony Henderson NYDC, Henok Araya Colgan Air, Mike Colgan OST, Brian Swanson CommutAir, Andy Price OST, Dennis DeVany CommutAir, Joel Raymond OST, Kevin Adams Consultant, Robert Silverberg OST, Kevin Schlemmer
Continental, Bruce Keiner OST, Michael Martin
Continental, Dan Weiss OST, Renee Williams Continental, Lorry Halloway Pacific Wings, Frank Ford Delta, Amy Martin Pacific Wings, Greg Kahlstorf
Delta, Dan Shuman PenAir, Danny Seybert Delta, Jeff Morgan PenAir, Scott Bloomquist Delta, Joe Esposito Pinnacle Airlines, Joe Wil liams Delta, Karen Zachary Pinnacle Airlines, Phil Reed
Delta, Sascha Vanderbellen Public Charters, Jim Gallagher

Dorato Jets Scenic, Mary Schneider
Dorato Jets, Mark McKenna Scenic, Mitzi Daines
Era Aviation, Mike Lenorman Seaborne Airlines, Wayne D'Amico
Executive Airlines, Kate Soled SeaPort Airlines, Jim Day Frontier Flying, Bob Hajducovich SeaPort Airlines, Rob McKinney
Gem Air, Dan Schroeder Shuttle America, Jerry Balsano
Gem Air, JoAnn Wolters SkyWest, Eric Christensen
Great Lakes, Chuc k Howell SkyWest, Michael Thompson Great Lakes, Doug Voss Sovereign Air, Bob Karns Great Lakes, Greg Stephens Sovereign Air, Lois R. Barton
Gulfstream, Dave Hackett Tradewind, Eric Zipkin Gulfstream, Mickey Bowman TransStates, Fred Oxley
Gulfstream, T. Cooper Transtates, Gerry Wigmore Homeland Security, Bill Ragan United, Alicia Gabriel Homeland Security, David Bernier United, James Starnes Homeland Security, Randy Webb US Airways, Benjamin Slocum
Horizon Airlines, Dan Russo US Airways, Howard Kass Horizon Airlines, Jennifer Thompson US Airways, Jason Reisinger
Horizon, Jeff Cole Warbelows Air Ventures, Art Warbelow ICEPR, Luis Irizarry Wings Air (Air Greco), Aaron Goerlich
Island Air Charters, Linda House