Order 2012

- 4

- 7 Served: April 5, 2012



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

Issued by the Department of Transportation on the 5 th of April, 2012

Essential Air Service at
CRESCENT CITY, CALIFORN IA

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 1997

- 2649

ORDER REQUESTING PROPOSALS Summary By this Order , the Department is requesting proposals by April 26 , 2012

, from carriers interested in providing Essential Air Service (EAS) at Crescent City

, California

, for the
two

- year period beginning August 1, 2012

, with or without subsidy.

Background By Order 20 10

- 5

- 19

, the Department selected SkyWest Airlines, Inc., d/b/a U nited Express , to provide EAS at Crescent City , California, through July 31 , 201 2. Annual subsidy and service levels were set as 14 nonstop round trips per week to San Francisco and $1,781,888 annual subsidy, with 3 0

- seat Embraer Brasilia aircraft.
Request for Proposals As the end of the current rate term s approach, we are request ing proposals from carriers int erested in providing service at Crescent City

, with or without subsidy, for the two

- year period beginning August 1, 2012 . Carriers should file their proposals by April 26 , 2012

. S taff will then docket the proposals, thereby making them public. Shortly afterwards, we will provide a summary of the proposals to the community and S tate and as k them to submit their final comments. We will give full consideration to all proposals filed in a timely manner. 1 Interested carriers s hould prepare their proposals with every expectation that their initial proposals 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 rejec t outright all unreasonable or unrealistic proposals and , if necessary, solicit a new round of proposals. However, we anticipate that negotiation or rejection will remain only occasional exceptions to the rule.

1 Carriers should not 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 re liably provided without such compensation, we typically do not proceed with the carrier

- selection case. Instead, we simply rely on that carrier’s subsidy

- free service as proposed.- 2

-

We are here providing interested carriers w ith 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 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. We anticipate applying our usual carrier

- selection criteria and the general provisions governing subs idy payments for Essential Air Service

. 2

With specific respect to Crescent City , we expect proposals consisting of two nonstop round trips per day (14 a week) if 3 0

- seat or larger equipment are pro posed; three (18 a week) or four (24 a week) round trip s per day with 19

- seat aircraft ; and more frequencies with smaller aircraft . We may subsidize additional frequencies if the affected community is served in conjunction with another community.

We encourage proposals that meet the community’s requirement s in an efficient manner. Carriers are also welcome to propose more than one service option, if they choose; they need not limit themselves to the current service pattern if they envision other, potentially more attractive service possibilities

– differen t hubs, or longer terms for the contracted service

– with subsidy requir e ments that remain competitive.

We encourage carriers to work with the community in advance of the due date for proposals when proposals can still be adjusted so that they can craft t hem to best meet the community’s needs. As always, we will fully consider the community’s views before making a long

- term carrier

- selection decision.

Filing Format 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.

Historical Traffic In order to assist carriers in making their traffic and revenue projections, we have included historical traffic for the community in Appendix B

. For the year ended December 3 1 , 201 1

, Crescent City generated 2 7,849 passengers, or 44 enplanements per day.

2 In selecting a carrier to provide subsidized Essential Air Service , 49 U. S.C. 41733(c) (1) directs us to consider four fa ctors: (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 Essential Air Service will be included in the selection Order as part of our authorization of subsidy for the selected service. Appendix C of this Order contains tho se general provisions.- 3

-

Other Carrier Requirements The Department is responsible for implementing various Federal sta tutes governing lobbying activities, drug

- free workplaces

, and nondiscrimination. 3 Consequently, all carriers receiving Federal subsidy to support Essential Air Service must certify that they are in compliance with Department regulations regarding drug

- fr ee 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 f rom paying subsidy to carriers that do not submit these documents, the selected carrier will be required to submit them in order to receive subsidy. Interested carriers requiring more detailed information regarding these requirements, as well as copies of the certifications, should contact the Office of Aviation Analysis at (202) 366

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

Community Comments Civic officials and the State are welcome to submit comments on the proposals at any time. 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 April 26 , the due date for carrier proposals.

This order is issued under a uthority delegated in 49 CFR 1.56a(f) and re

- delegated to the Directo r, Office of Aviation Analysis.

ACCORDINGLY,

1

. The Department requests proposals from carriers interested in providing Essential Air Service at Crescent City

, California . Carriers sh ould submit their proposals, with subsidy if necessary, by April 26 , 2012 . Proposals should be emailed to EAS@dot.gov, with the title “Proposal to Provide Essential Air Service at Crescent City

, Docket DOT

- OST

- 1997

- 2649

. ” Questions regarding filings may be directed to Kevin Adams at 202

- 366

- 1047 or Kevin.Adams@dot.gov ;

2

. Th is D ocket will remain open until further Order of the Department; and

3 The certifications are available on the web at http://ostpxweb.dot.gov/aviation/index.html.- 4

-

3 . We will serve this Order on the s ervice l ist for th is Docket.

Persons entitled to petition the Department for review of this Order under the Department’s Regulations, 14 CFR 385.50, must file such petitions within 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 no t preclude its effectiveness.

By:

TODD M. HOMAN Director Office of Aviation Analysis (SEAL)

An electronic version of this document is available on the World Wide Web at http://www.regulations.govAppen dix A

Nonstop Great Circle Miles from Crescent City ACV, Eureka 56 EUG, Eugene 170 PDX, Portland 275 RDD, R edding 134 SFO, San Francisco 304Appendix B

Historical Traffic at Crescent City, California (CEC)

Origin Dest O&D 2009 1 777 645 1,422 2009 2 665 636 1,301 2009 3 907 853 1,760 2009 4 889 844 1,733 2009 5 927 888 1,815 2009 6 1,008 908 1,916 2009 7 1,019 1,032 2,051 2009 8 1,214 1,136 2,350 2009 9 1,035 990 2,025 2009 10 1,029 1,001 2,030 2009 11 951 924 1,875 2009 12 1,069 1,039 2,108 CY 2009 11,490 10,896 22,386

2010 1 742 689 1,431 2010 2 693 674 1,367 2010 3 899 865 1,764 2010 4 1,079 1,034 2,113 2010 5 1,328 1,240 2,568 2010 6 1,403 1,433 2,836 2010 7 1,343 1,379 2,722 2010 8 1,638 1,519 3,157 2010 9 1,462 1,313 2,775 2010 10 1,177 1,174 2,351 2010 11 1,331 1,250 2,581 2010 12 1,214 1,270 2,484 CY 2010 14,309 13,840 28,149

2011 1 944 900 1,844 2011 2 824 794 1,618 2011 3 941 880 1,821 2011 4 1,100 1,019 2,119 2011 5 1,342 1,323 2,665 2011 6 1,216 1,393 2,609 2011 7 1,320 1,261 2,581 2011 8 1,516 1,429 2,945 2011 9 1,244 1,174 2,418 2011 10 1,192 1,133 2,325 2011 11 1,203 1,156 2,359 2011 12 1,268 1,277 2,545 CY 2011 14,110 13,739 27,849

Source: SkyWest Airlines, Inc.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 destinati on 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 carrie r 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 durin g 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 i n 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 [DATE]. The Department’s obligation for per formance 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 Government for any payment may arise for performance under this Or der beyond [DATE], until funds are made available 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 wit hin 60 days of the last day of service provided under this Order