Order: 2015-3-15

Served: March 26, 2015

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 26th day of March 2015

Essential Air Service at

MOAB, UTAH

VERNAL, UTAH

DOT-OST-1997-2827

DOT-OST-1997-2706

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

ORDER SELECTING AIR CARRIER

Summary

By this Order, the United States Department of Transportation (the Department) is 

selecting Great Lakes Aviation, Ltd. (Great Lakes) to provide Essential Air Service (EAS)

at Moab and Vernal, Utah, for the two-year term from May 1, 2015, through 

April 30, 2017. Both communities will receive two nonstop weekday and weekend round 

trips (12 per week) to Denver International Airport (DEN) using 30-passenger Embraer 

Brasilia EMB-120 (EMB-120) turboprop aircraft. Great Lakes will be compensated at 

annual subsidy rates of $2,245,247 for Moab and $2,024,577 for Vernal.1

Background

By Order 2014-2-18 (February 25, 2014), the Department selected SkyWest Airlines, 

operating as Delta Connection (SkyWest), to provide EAS at Moab and Vernal to Salt Lake 

City International Airport (SLC) using EMB-120 aircraft at annual subsidy rates of 

$2,303,347 (Moab) and $1,415,696 (Vernal).2

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

2 By that same Order, the Department also selected SkyWest, operating as United Express, to provide EAS at 

Pueblo, Colorado to DEN. 
- 2 -

On November 18, 2014, SkyWest filed 90-day notices to terminate its air service (all 

provided with turboprops) at Moab and Vernal, effective April 30, 2015. In the notices, 

SkyWest stated that it will transition to an all jet fleet in 2015 and will eliminate the EMB120 aircraft from its fleet. Because SkyWest’s termination would result in the 

communities’ not having EAS, the Department issued Order 2014-11-18 

(November 25, 2014) prohibiting SkyWest from terminating service and requesting 

proposals from air carriers interested in providing EAS at the communities.3 In response 

to that Order, three air carriers submitted proposals: Boutique Air, Great Lakes, and Arrow 

West Aviation, Inc. d/b/a Redtail Aviation (Redtail).

Each air carrier’s complete proposal and community comments may be accessed online at 

www.regulations.gov by entering the community’s respective docket number in the search 

block.

Air Carrier Proposal Summary for Moab

Air 

Carrier

Annual 

Subsidy Aircraft Seats Stops

Weekly 

Frequency Hub

Boutique 

Air $2,523,089 PC-12 9 0 21 SLC

Great 

Lakes $2,245,247 EMB-120 30 0 14 DEN

Redtail $1,858,685

Kodiak 

100 9 0 12/2 SLC/LAS

Air Carrier Proposal Summary for Vernal

Air 

Carrier

Annual 

Subsidy Aircraft Seats Stops

Weekly 

Frequency Hub

Boutique 

Air $2,490,399 PC-12 9 0 21 DEN

Great 

Lakes $2,024,577 EMB-120 30 0 14 DEN

Community Comments

On January 16, 2015, the Department requested comments from the communities

regarding this EAS air carrier-selection case. In response, we received letters from the 

Grand County Council, representing the community of Moab, and the Uintah County 

Commission, representing the community of Vernal. 

 3 SkyWest also filed notices to terminate service at Crescent City, California, and Pueblo, Colorado, and 

Order 2014-11-18 prohibited the airline from terminating service at those communities as well. We will 

address Crescent City’s and Pueblo’s EAS in a separate Order.
- 3 -

Moab supports the proposal put forth by Great Lakes because of its service to DEN and its 

use of 30-passenger, pressurized, twin-engine EMB-120 aircraft. The community also 

cited that Great Lakes has existing interline agreements with several larger airlines that 

will enable passengers to connect to the national air transportation system with relative 

ease.

Vernal also supported Great Lakes’ proposal. The community states that Boutique Air was 

not a suitable option and, therefore, Great Lakes was selected by default. The community 

does, however, have serious concerns about Great Lakes and its ability to provide reliable 

air service based on its experience with the airline. The community states, “In the past, 

Great Lakes provided very poor service to this community...flights were often 

unexpectedly cancelled or late. It’s very hard to increase enplanements when passengers 

cannot be assured that their flight will take off or that they will get home on a return 

flight.” The Unitah County Commission also added, “We are more than willing to 

welcome Great Lakes back, but only after some serious discussions about our needs, 

followed by assurances on their part of a willingness to provide better service.”

Decision

After carefully reviewing each air carrier’s proposal and taking into account community 

feedback, the Department has decided to select Great Lakes to provide EAS at Moab and 

Vernal for a two-year term. Great Lakes has the support of Moab and the qualified support 

of Vernal, which is a key selection criterion. We also find the service and subsidy 

proposed to be reasonable. As compared to Boutique Air, Great Lakes requires less 

subsidy at each community – by $465,000 at Vernal and $278,000 at Moab. Regarding

Redtail, the air carrier does not currently have the requisite economic authority from the

U.S. Department of Transportation’s Air Carrier Fitness Division to operate its proposed 

service and does not have any community support.

As noted by Vernal’s comments, the Department acknowledges that Great Lakes’ past 

service has not been satisfactory. The Department is aware that Great Lakes suffered 

serious operational problems over the past two years. Nonetheless, one the EAS 

program’s responsibilities is to ensure reliable air service to all EAS communities. In that 

regard, the Department is reminding Great Lakes that poor service could cause a drop in 

passenger usage at the airports the carrier serves, which could potentially jeopardize a 

community’s future eligibility in the EAS program. The Department expects that Great 

Lakes will to use this selection as an opportunity to demonstrate, definitively, to the 

communities, as well as the Department, that it is committed to providing consistent, 

reliable air service.

The Department shall make this selection contingent upon its receiving properly executed 

certifications from Great Lakes that it is in compliance with the Department’s regulations 
- 4 -

regarding drug-free workplaces and nondiscrimination, as well as the regulations 

concerning lobbying activities.4

Service Transition

We expect SkyWest to maintain its current service levels at the subsidy rates described in 

Order 2014-2-18, until Great Lakes begins full EAS at both communities, which, at this 

time, is expected to begin in May 2015.

We expect SkyWest and Great Lakes to work together to make a smooth transition at both 

communities. In that regard, before SkyWest suspends its service, we expect it to notify 

all passengers holding reservations for travel after the suspension date, to assist those 

passengers in making alternate air transportation arrangements, or to provide a refund of 

the ticket price, without penalty, if requested. 

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that the Department find an air carrier fit, 

willing, and able to provide reliable service before the Department may subsidize it to 

provide EAS. Great Lakes is subject to the Department’s continuing fitness requirements, 

and no information has come to our attention that would cause us to question the air 

carrier’s fitness at this time. The Department has contacted the Federal Aviation 

Administration, and it has raised no concerns that would negatively affect our fitness 

findings. The Department therefore concludes that Great Lakes is reliable and fit to 

conduct the operations proposed here.

This Order is issued under authority delegated in 49 CFR Part 1.25a(b).

ACCORDINGLY,

1. The Department selects Great Lakes Aviation, Ltd. to provide Essential Air Service at 

Moab and Vernal, Utah, and establishes the annual subsidy rates as described in 

Appendix C;

2. The Department directs Great Lakes Aviation, Ltd. 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 from the service date of this 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 carriers may forfeit their compensation for any claim 

that is not supported under the terms of this Order;

3. The Department finds that Great Lakes Aviation, Ltd. is fit, willing and able to operate 

as a commuter air carrier, and capable of providing reliable Essential Air Service at Moab 

and Vernal, Utah;

 4 The certifications are available online under “Reports and Publications” at 

http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/essential-air-service
- 5 -

4. We require SkyWest Airlines, operating as Delta Connection, to maintain its current 

service at Moab and Vernal, Utah, as described in Order 2015-3-3, and any subsequent 

Orders extending its service obligations, until Great Lakes Aviation, Ltd. begins service at 

each community;

5. These dockets will remain open pending further Department action; and

6. The Department will serve a copy of this Order on the mayors of Moab and Vernal, 

Utah, the Unitah County Commission, the airport managers at Canyonlands Field (Moab), 

Vernal Regional Airport, Arrow West Aviation, Inc. d/b/a Redtail Aviation, Boutique Air, 

Great Lakes Aviation, Ltd., and SkyWest Airlines, operating as Delta Connection.

By:

BRANDON M. BELFORD

Deputy Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at www.regulations.gov
Appendix A

AREA MAP

Maps generated by the Great Circle Mapper - copyright © Karl L. Swartz.

 
 Appendix B

Page 1 of 2
 Appendix B

Page 2 of 2
Appendix C

Page 1 of 2

Great Lakes Aviation, Ltd.

Essential Air Service to be provided at Moab, Utah

DOT-OST-1997-2827

Annual Subsidy: $2,245,247

Contract Term: May 1, 2015, through April 30, 2017

Hub: Denver International Airport (DEN)

Scheduled Service: 12 nonstop round trips per week to DEN

Aircraft: 30-passenger EMB-120

Rate per Eligible Flight: $1,8361

Weekly Ceiling: $44,0642

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 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 which the 

Department does make payments in the stipulated service levels, the carrier may cease to provide service to that 

specific location without regards 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 controvert 

the foregoing paragraph.

Funds may not be available for performance under this Order beyond September 30, 2015. The Government’s obligation for 

performance under this Order beyond September 30, 2015, is subject to the availability of 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 September 30, 2015, until funds are made available to the Department for performance. If sufficient funds are 

not made available for performance beyond September 30, 2015, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the 

month for which compensation is being claimed. For example, claims for service provided in July must be filed by 

October 31; August claims must be submitted by November 30, and so on.

 1 Annual compensation of $2,245,247 divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98 

percent completion).

2 24 arrivals and departures per week multiplied by $1,836 per flight.
 Appendix C

Page 2 of 2

Great Lakes Aviation, Ltd.

Essential Air Service to be provided at Vernal, Utah

DOT-OST-1997-2706

Annual Subsidy: $2,024,577

Contract Term: May 1, 2015, through April 30, 2017

Hub: Denver International Airport (DEN)

Scheduled Service: 12 nonstop round trips per week to DEN

Aircraft: 30-passenger EMB-120

Rate per Eligible Flight: $1,6551

Weekly Ceiling: $39,7202

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 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 which the 

Department does make payments in the stipulated service levels, the carrier may cease to provide service to that 

specific location without regards 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 controvert 

the foregoing paragraph.

Funds may not be available for performance under this Order beyond September 30, 2015. The Government’s obligation for 

performance under this Order beyond September 30, 2015, is subject to the availability of 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 September 30, 2015, until funds are made available to the Department for performance. If sufficient funds are 

not made available for performance beyond September 30, 2015, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the 

month for which compensation is being claimed. For example, claims for service provided in July must be filed by 

October 31; August claims must be submitted by November 30, and so on.

 1 Annual compensation of $2,024,577 divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98 

percent completion).

2 24 arrivals and departures per week multiplied by $1,655 per flight.