Order 2013

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- 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 19 th day of July , 201 3

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, serv ed on February 3, 2011, the Department selected Silver (formally

Gulf stream International Airlines) to provide subsidized EAS with 19

- passenger Beechcraft

B

- 1900D aircraft at Lewistown, Miles City, Gl asgow, G lendive, 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 re ceive 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

- 9 5), 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 O rder 2013

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- 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 pass enger must be less than $1,000 during the most recent fiscal year

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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 $1,621,82 1, 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

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- 13 , the Department directed all interested parties to show cause by April 17, 2013, as to why the Departm ent 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 s how c ause 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, b y Order 2013

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- 13, issued on June 12, 2013, the Department: (1) termin ated the eligibility of Lewistown and Miles City, Montana , effective July 16, 2013 , under the EAS program; 4 (2) allowed Silver to suspend service at Lew istown and Miles City after July 15, 2013 , if it ch ose to do so; and (3) solicited proposals from air ca rriers 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

, Si lver 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

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- 13, the Department request ed 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 no tice 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

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- 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 issue d 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

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- 27 , issued on February 3, 2011 , through October 26, 2013 , or until an air carrier capable of providing
reliable Essential Air Ser vice actually begins service, whichever comes first; 6

2. We direct Silver Airways, Inc., to retain all book s , 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

O rder.

3

. Th is Docket will remain open until further o rder 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:

SUSA N 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

compe nsate Silver at rates pursuant to 2013

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