Order 2013-7-16

Served: July 19, 2013

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 19th day of July, 2013

Essential Air Service at

GLASGOW, MONTANA

GLENDIVE, MONTANA

HAVRE, MONTANA

SIDNEY, MONTANA

WOLF POINT, MONTANA

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

Docket DOT-OST-1997-2605

ORDER EXTENDING SERVICE OBLIGATION

Summary

By this Order, the Department prohibits Silver Airways, Inc. (“Silver”), from terminating 

Essential Air Service (“EAS”) operations at Glasgow, Glendive, Havre, Sidney, and Wolf Point, 

Montana, for 30 days beyond the end of the 90-day notice period, i.e., October 26, 2013. 

Background

By Order 2011-1-27, served on February 3, 2011, the Department selected Silver (formally 

Gulfstream International Airlines) to provide subsidized EAS with 19-passenger Beechcraft 

B-1900D aircraft at Lewistown, Miles City, Glasgow, Glendive, Havre, Sidney, and Wolf Point, 

Montana, for the two-year period ended May 31, 2013. We have since extended the contract 

until further Departmental action by Order 2013-6-3, issued on June 4, 2013, to ensure that 

Silver will continue to receive EAS subsidy for its service. 

The complete public file for EAS at each of the above Montana communities may be accessed 

online through the Federal Dockets Management System at: http://www.regulations.gov by 

entering “DOT-OST-1997-2605” in the “SEARCH for: Rules, Comments, Adjudications or 

Supporting Documents:” field. 

Legislative Changes

The Federal Aviation Administration (“FAA”) Modernization and Reform Act of 2012 (Public 

Law 112-95), signed into law on February 14, 2012, amended the definition of “eligible place” 
2

for the purpose of receiving EAS.1 The amendment, among other things, states that to be 

eligible, a community must have had an average subsidy per passenger of less than $1,000 

during the most recent fiscal year, as determined by the Secretary of Transportation.2

Order to Show Cause

By Order 2013-3-13, issued on March 28, 2013, the Department tentatively determined to 

terminate the eligibility of Lewistown and Miles City under the EAS program. Our tentative 

decision was based on the statutory requirement that the average subsidy per passenger must be 

less than $1,000 during the most recent fiscal year.3

For the most recent fiscal year (FY 2012), Silver transported 660 total passengers at Lewistown 

and 694 total passengers at Miles City at annual subsidy rates of $1,325,733 and $1,621,821, 

respectively. Thus, the corresponding average per passenger subsidy for FY 2012 is $2,009 at 

Lewistown, and $2,337 at Miles City. By Order 2013-3-13, the Department directed all 

interested parties to show cause by April 17, 2013, as to why the Department should not make 

final its tentative findings and conclusions. 

Final Order, Allowing Suspension of Service, and Request for Proposals

The objecting parties to the Department’s show cause Order did not dispute our tentative 

determination that the communities’ average per passenger subsidy for FY 2012 is $2,009 at 

Lewistown, and $2,337 at Miles City - well above the $1,000 limit. Therefore, by 

Order 2013-6-13, issued on June 12, 2013, the Department: (1) terminated the eligibility of 

Lewistown and Miles City, Montana, effective July 16, 2013, under the EAS program;4 (2) 

allowed Silver to suspend service at Lewistown and Miles City after July 15, 2013, if it chose to 

do so; and (3) solicited proposals from air carriers interested in providing EAS at Glasgow, 

Glendive, Havre, Sidney, and/or Wolf Point, Montana, for a new contract, with or without 

subsidy. Those proposals are due by July 15, 2013. 

Notice of Silver to Terminate EAS at Montana

On June 28, 2013, Silver filed a 90-day notice of its intent to terminate its subsidized service at 

Lewistown, Miles City, Glasgow, Glendive, Havre, Sidney, and Wolf Point effective 

September 26, 2013.

Hold-In

As stated above, by Order 2013-6-13, the Department requested proposals from air carriers 

interested in providing EAS at the five eligible Montana EAS communities; however we may not 

have completed this carrier-selection case by September 26, 2013, the end of the 90-day notice 

period. Therefore, in accordance with 49 U.S.C. 41734(c), and to ensure there is no service 

 1 See 49 U.S.C. § 41731.

2 Communities in Alaska and Hawaii are exempt. 

3 See 49 U.S.C. § 41731(a)(1)(C).

4 Miles City and Lewistown filed Petitions for Reconsideration of Order 2013-6-13, which terminated their 

eligibility. We will address those Petitions separately.
3

hiatus, we must extend Silver’s service obligation for 30 days, or until replacement service 

actually begins, whichever occurs first.5 

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

ACCORDINGLY,

1. The Department prohibits Silver Airways, Inc., from suspending its service at Glasgow, 

Glendive, Havre, Sidney, and Wolf Point, Montana, at the end of its 90-day notice period and 

require it to maintain its current level of service, as specified in Order 2011-1-27, issued on 

February 3, 2011, through October 26, 2013, or until an air carrier capable of providing 

reliable Essential Air Service actually begins service, whichever comes first;6

2. We direct Silver Airways, Inc., to retain all books, records, and other source and summary 

documentation to support subsidy 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 date of service 

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 air 

carrier may forfeit its compensation for any claim that is not supported under the terms of this 

Order. 

3. This Docket will remain open until further order of the Department; and 

4. We will serve copies of this Order on the mayors of Lewistown, Miles City, Glasgow, 

Glendive, Havre, Sidney, and Wolf Point, Montana, and the airport managers of Lewistown 

Municipal Airport, Miles City Airport/Frank Wiley Field, Wokal Field/Glasgow International 

Airport, Dawson Community Airport, Havre City-County Airport, Sidney-Richland Municipal 

Airport, Wolf Point International Airport, and the service list for this docket.

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.gov

 5 In accordance with 49 U.S.C. § 41734(c), the Department will extend Silver’s service obligation for successive 

30-day periods as necessary until replacement service actually begins. During this process, we will continue to 

compensate Silver at rates pursuant to 2013-6-3.