Order 2014-7-16 

Served: July 23, 2014 

 UNITED STATES OF AMERICA 

 DEPARTMENT OF TRANSPORTATION 

 OFFICE OF THE SECRETARY 

 WASHINGTON, D.C. 

Issued by the Department of Transportation 

on the 23rd day of July, 2014 

ORDER SETTING ANNUAL SERVICE LEVEL AND TOTAL COSTS UNDER THE 

ALTERNATE ESSENTIAL AIR SERVICE PROGRAM 

Summary 

By this Order, we are selecting Manistee County Blacker Airport Authority’s (“Manistee” or 

“Airport Authority”) application under the Alternate Essential Air Service (AEAS) Program. 

The Department will enter into a Grant Agreement with the community to provide funding for 

regularly scheduled charter service flights between the Manistee County Blacker Airport and 

Chicago Midway International Airport (MDW) or alternate large or medium hub airport, for the 

four-year period beginning July 26, 2014, through July 31, 2018. By the terms of the Grant 

Agreement, service will be provided utilizing two-pilot, twin-engine aircraft, with either 19 or 

30 seats, using BAE Jetstream 41 and/or 31 or equivalent aircraft, at an annual rate of no more 

than $2,328,104. Flight frequency will vary seasonally, with once daily service during the off 

peak season and twice daily service during peak season. 

Alternate Essential Air Service Background 

On December 12, 2003, President Bush signed into law the Vision 100--Century of Aviation 

Reauthorization Act, P.L. 108-176 (Vision 100), which, among other things, directed the 

Department to establish certain Community and Regional Choice Programs. 1

One of those is the Alternate Essential Air Service (AEAS). Congress established this Pilot 

Program to provide communities with an alternative to the traditional EAS-type service. 

Typically, the EAS program pays subsidy to regional air carriers to provide two or three round 

trips a day to a major hub airport with 19-seat aircraft. The AEAS Program is designed to 

 

1 See Appendix A for a copy of the statute. 

Alternate Essential Air Service at: 

MANISTEE/LUDINGTON, MICHIGAN 

Under 49 U.S.C. 41731 et seq. and 41745

DOT-OST-1996-1711 

DOT-OST-2004-18715
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allow communities to forego their EAS for a prescribed amount of time in exchange for 

receiving a grant to spend in a variety of ways that might better suit their individual needs.2 

These options are spelled out in statute and include more frequent service with smaller aircraft, 

on-demand air taxi service, scheduled or on-demand surface transportation, regionalized air 

service, or purchasing an aircraft. Each community awarded a grant must execute a grant 

agreement with the Department before it begins spending funds under a grant award. By notice 

dated July 27, 2004, the Department established AEAS and invited communities to submit 

proposals under the program. 

On May 3, 2012, the U.S. Department of Transportation and the Airport Authority, in 

association with Manistee, Michigan, entered into a grant agreement, for up to $4,199,075, for 

AEAS for two years, to allow the Airport Authority to contract with a Part 380 indirect air 

carrier to provide scheduled public charter air transportation from the Community to MDW, a 

large-hub airport. Manistee established a relationship with Public Charters, Inc. (Public 

Charters) to facilitate its air service to MDW. The Grant Award comprised reimbursement of 

start-up costs and costs incurred per completed flight segment using two-pilot, twin-engine 

aircraft with 19 seats or larger equipment. In addition, service levels of no more than 32,951 

passenger seats flown in the first year of service and no more than 14,398 passenger seats 

flown in the second year of service were eligible for funding under the Grant Agreement. 

The complete public file for EAS/AEAS at Manistee may be accessed online through the 

Federal Dockets Management System at: www.regulations.gov by entering “DOT-OST-1996-

1711” or “DOT-OST-2004-18715” in the “Search for Rules, Comments, Adjudications, or 

Supporting Documents” field. 

Proposals 

As Manistee’s grant was set to expire May 31, 2013, the Department’s solicited proposals for a 

new term by Order 2014-2-1, February 4, 2013. Manistee’s grant was subsequently extended 

through July 25, 2014. In response to the Department’s solicitation, one proposal for 

traditional EAS was received, from Sun Air Express, LLC dba Sun Air International (“Sun 

Air”) one option offering service to Milwaukee and Chicago Midway for an annual subsidy of 

$3,184,192, and a second option offering service to Milwaukee for an annual subsidy of 

$2,595,134. 

Subsequently, Manistee submitted an application for a new grant agreement under the Alternate 

EAS Program. Manistee proposes to continue its relationship with Public Charters but with 

additional flexibility on which hub airport it serves by having its subsidy calculated based on 

ASMs (available seat miles) flown, rather than number of seats, which it used for its previous 

grant. 

Decision 

After careful consideration, including the comments of local officials, the Department has 

decided to approve the Airport Authority’s application for AEAS, pending execution of a Grant 

Agreement. 

 

2 Under no circumstances could a community participate in both the traditional EAS Program and the AEAS 

Program at the same time. Communities choosing to withdraw from the AEAS Program may request to be 

reinstated in the traditional EAS program, but there could be a hiatus in service. 
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The community cites several well-reasoned arguments for continuing service under AEAS. 

The Manistee Blacker Airport Authority voted unanimously for continuation of AEAS. The 

incumbent direct air carrier, Corporate Flight Management, has continually operated AEAS at 

Manistee since November 15, 2012, to MDW. The fares are reasonable and the carrier has 

demonstrated quality service, which is indicated by the very high rates of flights completed and 

on-time departures. Manistee has a good working relationship with the indirect air carrier, 

Public Charters, and holds frequent strategy and planning meetings with Public Charters. The 

community has invested significant time into developing the AEAS service, along with Public 

Charters, and states it is in the community’s best interest to continue AEAS in order to continue 

to build on the two-year investment. 

The Department will enter into a Grant Agreement with the community to provide funding for 

regularly scheduled charter service flights between the Manistee County Blacker Airport and 

MDW, or alternate large or medium hub airport, for the four-year period from July 26, 2014, 

through July 31, 2018. By the terms of the Grant Agreement, service will be provided utilizing 

two-pilot, twin-engine aircraft, with either 19 or 30 seats, using BAE Jetstream 41 and/or 31 or 

equivalent aircraft, at an annual rate of no more than $2,328,104. Flight frequency will vary 

seasonally, with once daily service during the off peak season and twice daily service during 

peak season. 

ACCORDINGLY,

1. We select the application as submitted by the Manistee County Blacker Airport Authority, 

serving Manistee/Ludington, Michigan, for Alternate Essential Air Service, for four years upon 

execution of a Grant Agreement with the Department and beginning July 26, 2014, through 

July 31, 2018; 

2. The Department directs the Airport Director at Manistee County Blacker Airport and the 

Part 380 indirect air carrier or other air carrier contracted as part of the AEAS Grant Agreement 

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. 

3. These Dockets will remain open until further Order of the Department; and 
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4. Docket Operations will serve copies of this Order on the parties listed in Appendix B. 

By: 

SUSAN L. KURLAND 

 Assistant Secretary for Aviation 

 and International Affairs 

(SEAL) 

An electronic version of this document is available at 

http://www.regulations.gov/
Appendix A 

49 U.S.C. § Sec. 41745. Community and regional choice programs 

(a) ALTERNATE ESSENTIAL AIR SERVICE PILOT PROGRAM 

(1) ESTABLISHMENT - The Secretary of Transportation shall establish an alternate essential 

air service pilot program in accordance with the requirements of this section. 

(2) ASSISTANCE TO ELIGIBLE PLACES - In carrying out the program, the Secretary, 

instead of paying compensation to an air carrier to provide essential air service to an eligible 

place, may provide assistance directly to a unit of local government having jurisdiction over the 

eligible place or a State within the boundaries of which the eligible place is located. 

(3) USE OF ASSISTANCE - A unit of local government or State receiving assistance for an 

eligible place under the program may use the assistance for any of the following purposes: 

(A) To provide assistance to air carriers that will use smaller equipment to provide the 

service and to consider increasing the frequency of service using such smaller 

equipment if the Secretary determines that passenger safety would not be compromised 

by the use of such smaller equipment and if the State or unit of local government waives 

the minimum service requirements under section 41732(b). 

(B) To provide assistance to an air carrier to provide on-demand air taxi service to and 

from the eligible place. 

(C) To provide assistance to a person to provide scheduled or on-demand surface 

transportation to and from the eligible place and an airport in another place. 

(D) In combination with other units of local government in the same region, to provide 

transportation services to and from all the eligible places in that region at an airport or 

other transportation center that can serve all the eligible places in that region. 

(E) To purchase aircraft to provide transportation to and from the eligible place or to 

purchase a fractional share in an aircraft to provide such transportation after the 

effective date of a rule the Secretary issues relating to fractional ownership. 

(F) To pay for other transportation or related services that the Secretary may permit.
Appendix B 

SERVICE LIST 

Manistee Blacker County Airport, Barry Lind 

Michigan Department of Transportation, Matthew Brinker 

Public Charters, Inc., Jim Gallagher