Order 2011

- 3

- 11 Served: March 9, 2011 

### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION 

### OFFICE OF THE SECRETARY WASHINGTON, D.C.

Is sued by the Department of Transportation on the 9 th of March, 2011 Essential Air Service at ELFIN COVE , ALASKA, AND PELICAN , ALASKA Under 49 U.S.C. 41731 et seq
. DOCKET OST - 200 2 - 11586 DOCKET OST - 200 2 - 11586

ORDER RESELECTING CARRIER Summary By this order , the Department is reselecting Alaska Seaplane Service, LLC. , to provide essential air service (EAS) at Elfin Co ve and Pelican , Alaska , at annual subsidy rate s of $75,391 at Elfin Cove and $185,721 at Pelican , from June 1, 2011 , through January 31, 2015
. 1 Background Order 2007

- 9

- 7 selected Alaska Seaplane to provide service with 6

- seat DHC

- 2 Beaver aircraft at an annual subsidy

of $185,772 for the two communities from June 1, 2007, through May 31, 2011 . Under th at contract, which expires May 31, Elfin Cove receive s one round trip per week during the 26

- week off

- peak period and 5 flagstop round trips per week during the 26

- week peak period , while Pelican receive s six round trips per week year round. All of the service was to be operated with six seat D HC

- 2 Beaver aircraft to Juneau. Inanticipation of the end of the current contract, by

Order 2010

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- 33 we request ed proposals for replacement service. We received a proposal from only

one carrier, Alaska Seaplane , and requested comments from the communities and state

. W e received informal comments from the state , and the issue is ripe for decision.

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

Carrier Propos al s Elfin Cove Five round trips per week to Juneau in the 18

- week peak and two round trips per week in the 34

- week off

- peak for $75,391 annual subsidy . All of the service would be operated with single

- engine DeHavilland Beaver aircraft , and the contrac t would extend from June 1, 2011, though January

31, 2015, in order to sy

nchronize this rate with the expiration of Alaska Seaplane’s rates at Angoon and Tenakee

. Pelican Six nonstop round trips per week to Juneau ye ar round for $185,721 annual subsidy

. All of the service would be operated with single

- eng ine DeHavilland Beaver aircraft, and the contract would extend from June 1, 2011, though January 31, 2015, in order to sy

nchronize this rate with the expiration of Alaska Seaplane’s rates at Angoon and T enakee

. Community Comments The communities and state continue to support the EAS provided by Alaska Seaplane, and state that: “Due to the isolated location of these communities and the complete lack of any road

system connection, this subsidized air serv ice is their only form of scheduled transportation. The communities of Elfin Cove and Pelican depend on scheduled air freight, passenger, and mail service for basic necessities, routine medical and health services, and economic welfare.” Decision Alaska Seaplane is the only carrier to submit a proposal, it submitted only one option, and w e have decided to select it for the four

- ye ar period it proposed , June 1, 2011, through January 31, 2015
. We find that the carrier’s proposed service and subsidy level s are reasonable , and we are not aware of any

reason why

we should not re

- select the carrier to provide the proposed level of service. The Department shall make this selection contingent upon our receiving properly executed certifications from the carri er that it is in compliance with the regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations governing lobby ing activities. Carrier Fitness 49 U.S.C. 41737(b) and 41738 require that DOT find an air carrier fit, willing, and able to provide reliable service before DOT may subsidize it to provide essential air service. Alaska Seaplane Service, LLC. is subject to the Department’s continuing fitness requirements, and no information has come to our attention that would cau se us to question the carrier ’ s fitness at this time. DOT has contacted the Federal Aviation Administration, and it has raised no concerns that would negatively

affect our fitness finding s . DOT therefore concludes that the carrier remain s fit to conduct the operations proposed here. This order is issued under authority delegated in 49 CFR 1.56a(f).- 3
-

ACCORDINGLY, 1. We re select Alaska Seaplane Service, LLC. , to provide essential air service at Elfin Cove and Pelican , Alaska , as described in Appendix C ; 2 . We direct Alaska Seaplane Service, LLC. , 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 examinatio n 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 retain ed. The carrier may forfeit its compensation for any claim that is not supported under the terms of this order; 3 . We find that Alaska Seaplane Service, LLC. , continue s to be fit, willing and able to operate as a certificated carrier and capable of prov iding reliable essential air service at Elfin Cove and Pelican , Alaska ; 4 . Th is docket will remain open until further order of the Department; and 5 . We will serve copies of this order on the Office of Statewide Aviation of the Alaska Department of Transportation and Public Facilities, and Alaska Seaplane Service, LLC. 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.govAppendix A

Great Circle Miles to Juneau (JNU) Elfin Cove (AGN) 59 Pelican (TKE) 50 Hoonah, HNH 35 Pelican (PEC) 67 Elfin Cove (ELV) 64 Gustavus (GST) 41 Excursion Inlet (EXI) 32 Haines (HNS) 70 Skagway (SGY) 81Appendix B

Annual Subsidy Need at Elfin Cove and Pelican, Alaska

Docket 2002-11586

Elfin Cove Pelican Aircraft Type DHC-2 DHC-2 Block Hours 1/ 248 562 Passengers 521 1,045 Freight Lbs. 22,899 105,040 Mail Lbs. 31,339 58,566 Passenger $68,851 $137,928 Freight $12,594 $57,772 Mail $45,187 $87,382 Total Revenue $126,632 $283,082

Economic Cost $202,023 $468,803 Annual Subsidy $75,391 $185,721

1/ Blk. Hrs. Flights Elfin Cove Peak 18 weeks x 10 flights in each direction x 47 min/60 = 141 180 Off-Peak 34 weeks x 4 flights in each direction x 47 min/60 = 107 136 248 316 Pelican 52 weeks x 12 flights in each direction x 54 min/60 = 562 624Appendix C

- 1 Alaska Seaplane Service, LLC ., Essential Air Service to be Provided to

Elfin Cove , Alaska , Docket OST

- 200 2

- 11586 Effective Period : June 1, 2011 , through January 31, 2015
. Scheduled Service : Five nonstop round trip s per week in the 18

- week peak and two nonstop round trips per week in the 34

- week off

- peak to Juneau

. Aircraft : DeHavailland Beaver, six seats Rate per Eligible Flight: $239 1 Weekly Ceiling : Off

- Peak: $ 239 2 ; Peak: $956 3 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 fli ght 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 p eriod, 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 this rate, 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 complete ly , terminates or reduces payments for service or changes service requirement s at a specific location provided for under this order, then, at the end of the period for w hich 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 contract 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 contro vert the foregoing paragraph. Funds are not currently available for performance under this order beyond March 18, 2011 . The Government’s obligation for performance under this order beyond March 18, 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 March 18, 2011 , until funds are made available to the Department for performance. If funds are not made available for performance beyond March 18, 2011 , 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 $75,391 annual subsidy ÷ divided by 316 annual flights, calculated as follows: P eak: 18 weeks * 5 round trips * 2 directions = 180 annual flights; Off Peak: 34 weeks * 2 round trips * 2 directions * 136 annual flights. 2 10 flights x $239 = $2,390

. 3 4 flights x $239 = $956

.Appendix C

- 2 Alaska Seaplane Service, LLC., Essential Air Service to be Provided to

Pelican , Alaska, Docket OST

- 200 2

- 11586 Effective Period : June 1, 2011, through January 31, 2015. Scheduled Service : Six nonstop round trips per week ye ar round to Juneau. Aircraft : DeHavailland Beaver, six seats Rate per Eligible Flight: $298 1 Weekly Ceiling : $ 3,576 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 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 o perate 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 this rate, 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 w hich the Department does make payments in the stipulated amounts or at the stipulated servi ce 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 Departmen t and carrier do not constitute a total or partial reduction or cessation of payment. Subsidy contract 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 March 18, 2011 . The Government’s obligation for performance under this order beyond March 18, 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 March 18, 2011 , until funds are made available to the Department for performance. If funds are not made available for performance beyond March 18, 2011 , 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 $ 185,721 annual subsidy ÷ divided by 624 annual flights, calculated as follows: 6 round trips x 2 directions * 52 weeks. 2 1 2 flights x $ 298.