Order: 2014-2-22

Served: February 27, 2014

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 27th day of February, 2014

Essential Air Service at

CODY, WYOMING DOCKET DOT-OST-2011-0121

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

ORDER SELECTING AIR CARRIERS

Summary

By this Order, the Department is selecting SkyWest Airlines (SkyWest or SkyWest/Delta 

Connection) and United Airlines, Inc. (United or SkyWest/United Express) to provide 

Essential Air Service (EAS) at Cody, Wyoming, using 50-passenger Canadair Regional Jet 

CRJ200 (CRJ200) aircraft for a two-year term beginning on the date of this contract’s 

issuance and ending through the 24th month thereafter for a combined annual subsidy of 

$1,380,779. 

SkyWest/Delta Connection will provide part of Cody’s EAS with one daily nonstop round 

trip (seven a week) to Salt Lake City International Airport (Salt Lake City) for an annual 

subsidy of $617,462. 

SkyWest/United Express will provide the remainder of Cody’s EAS for the same two-year 

term as SkyWest/Delta Connection. United, which plans to contract the service with 

SkyWest, will provide one daily nonstop round trip to Denver International Airport 

(Denver) for an annual subsidy of $763,317 from October 1 through May 31.

1

 From 

 1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds.
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June 1 through September 30, the Department is selecting United to operate at least one 

daily nonstop round trip unsubsidized.

Background

On June 27, 2011, SkyWest/Delta Connection filed a 90-day notice of its intent to 

terminate service to Salt Lake City, effective September 25, 2011. At the time of the 

filing, SkyWest/Delta Connection provided two daily nonstop round trips (14 a week) to 

Salt Lake City on 30-passenger EMB-120 Brasilia (Brasilia) aircraft. In addition, 

SkyWest/United Express provided one round trip a day to Denver with CRJ200 aircraft 

year-round and one additional round trip a day during the four-month peak season using a 

30-passenger Brasilia.

In response to SkyWest/Delta Connection’s filing, we issued Order 2011-8-26 

(August 30 2011), prohibiting the suspension and requesting proposals from air carriers 

interested in providing EAS at Cody. Because SkyWest/United Express operated two 

daily round trips to Denver four months of the year and one daily round trip to Denver the 

other eight months, we requested proposals for only one round trip a day for eight months 

of the year. In response to that Order, we received a proposal from the incumbent, 

SkyWest/Delta Connection.

By Order 2011-11-24 (November 18, 2011), the Department selected SkyWest/Delta 

Connection to provide EAS at Cody from October 4, 2011, through May 31, 2012, and 

from October 4, 2012, through May 31, 2013, for an annual subsidy of $352,058. Under 

the EAS subsidy contract, SkyWest/Delta Connection provided Cody one daily round trip 

(seven a week) to Salt Lake City using CRJ200 aircraft; the service to Denver was 

provided subsidy-free.

By Order 2013-4-18, (April 25, 2013), the Department re-selected SkyWest/Delta 

Connection to provide EAS at Cody to Salt Lake City using CRJ200 aircraft from 

October 1, 2013, through May 31, 2014, and October 1, 2014, through May 31, 2015, for 

an annual subsidy of $627,696.

On August 1, 2013, SkyWest/United Express filed a 90-day notice of its intent to terminate 

its subsidy-free service to Denver, effective November 1, 2013. This would leave Cody 

with only one daily round trip (seven a week) to Salt Lake City for eight months of the 

year. Since Cody is guaranteed a minimum of 12 round trips a week to a large- or 

medium-hub, the Department decided to solicit a new round of proposals. 

Rather than solicit proposals for the difference in service, we felt it was more convenient 

for the community if we consolidated all of its EAS into one contract. Therefore, we 

issued Order 2013-10-15 (October 29, 2013) soliciting proposals from air carriers to 

provide all of Cody’s subsidized service. In response to that Order, we received proposals 

from SkyWest and United.

The airlines’ complete proposals and the community’s comments may be accessed online 

at www.regulations.gov by entering DOT-OST-2011-0121 in the search block.
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Proposal of SkyWest Airlines

SkyWest submitted a proposal for one daily nonstop round trip (seven a week) to Salt Lake 

City on a year-round basis using CRJ200 aircraft for an annual subsidy of $617,462. It 

plans to operate the service as Delta Connection.

Proposal of United Airlines 

United submitted a proposal for one subsidized daily nonstop round trip (seven a week) to 

Denver from October 1 through May 31 for an annual subsidy of $763,317. From June 1 

through September 30, United will operate at least one daily nonstop round trip, 

unsubsidized. It plans to operate the service contracted with SkyWest as United Express, 

using CRJ200 aircraft.

Community Comments

On November 27, 2013, the Department solicited comments from the community 

regarding this air carrier selection case. We received letters from several entities in Cody, 

including the Honorable Tina Brown, Mayor of Cody, as well as Robert Whisonant, 

Chairman of the Yellowstone Regional Airport Joint Powers Board. Both expressed 

support for the proposals put forth by SkyWest and United.

Decision

Since SkyWest and United were the only air carriers to submit proposals for Cody’s EAS 

case the decision to re-select them is clear and these selections are subject to the provisions 

contained in Appendix C, pages 1 and 2. The community fully supports both air carriers’

proposals and we find the service and subsidy levels to be reasonable.

By selecting United’s proposal, we are relying on the carrier to provide unsubsidized 

service from Cody to Denver for four months of the year, from June 1 through 

September 30 to fulfill Cody’s EAS requirement.

We shall make this selection of SkyWest and United at Cody contingent upon the 

Department’s receiving properly executed certifications from the air carriers that they are

in compliance with the Department’s regulations regarding drug-free workplaces and 

nondiscrimination, as well as the regulations concerning lobbying activities.2

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that we find an air carrier fit, willing, and able to 

provide reliable service before we may subsidize it to provide EAS. SkyWest and United

are subject to the Department’s continuing fitness requirements, and no information has 

come to our attention that would cause us to questions either air carrier’s fitness at this 

time. We have contacted the Federal Aviation Administration, and it has raised no 

concerns that would negatively affect our fitness findings. We therefore conclude that both 

SkyWest and United are reliable and fit to conduct the operations proposed here.

 2 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
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This Order is issued under authority delegated in 49 CFR Part 1.25a(b).

ACCORDINGLY,

1. We re-select SkyWest Airlines to provide Essential Air Service from Cody, Wyoming 

to Salt Lake City, Utah, and establish the annual subsidy rate as described in Appendix C;

2. We select United Airlines, Inc. to provide Essential Air Service from Cody, Wyoming 

to Denver, Colorado, and establish the annual subsidy rate as described in Appendix C;

3. We rely on United Airlines, Inc. to provide Essential Air Service from Cody, Wyoming 

to Denver, Colorado on an unsubsidized basis from June 1 through September 30 of each 

year this Order is in effect;

4. We direct SkyWest Airlines and United Airlines, Inc. 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 its compensation for any claim that 

is not supported under the terms of this Order;

5. We find that SkyWest Airlines and United Airlines, Inc. are fit, willing and able to 

operate as a certificated air carriers, and capable of providing reliable Essential Air Service 

at Cody;

5. This docket will remain open pending further Department action; and

6. The Department will serve a copy of this Order on the Mayor of Cody, the airport 

manager at Yellowstone Regional Airport, SkyWest Airlines, United Airlines, Inc., and the 

Wyoming Department of Transportation.

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

AREA MAP

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

 
 Appendix B

Page 1 of 2

SkyWest Proposal for EAS at Cody

 
Appendix B

Page 2 of 2

United Airlines Proposal for EAS at Cody
 Appendix C

Page 1 of 2

SkyWest Airlines

Essential Air Service to be Provided at Cody, Wyoming

Effective Period: February 27, 2014, through February 29, 2016

Scheduled Service: Seven (7) weekly nonstop round trips to Salt Lake City

Aircraft: 50-passenger CRJ200

Rate per Eligible Flight: $8661

Weekly Ceiling: $12,1242

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 March 18, 2014. The Government’s obligation for 

performance under this order beyond March 18, 2014, 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 March 18, 2014, until funds are made available to the Department for performance. If sufficient funds are not made 

available for performance beyond March 18, 2014, 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 $617,462 divided by the 713 annual departures (14 weekly departures x 52 weeks x 98 

percent completion). 2 14 arrivals and departures per week multiplied by $866 per flight.
Appendix C

Page 2 of 2

United Airlines, Inc.

Essential Air Service to be Provided at Cody, Wyoming

Effective Period: February 27, 2014, through May 31, 2014; October 1, 2014, through 

May 31, 2015, and October 1, 2015, through February 29, 2016

Scheduled Service: Seven (7) weekly nonstop round trips to Denver

Aircraft: 50-passenger CRJ200

Rate per Eligible Flight: $1,5713

Weekly Ceiling: $21,9944

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 March 18, 2014. The Government’s obligation for 

performance under this order beyond March 18, 2014, 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 March 18, 2014, until funds are made available to the Department for performance. If sufficient funds are not made 

available for performance beyond March 18, 2014, 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.

 3 Annual compensation of $763,317 divided by the 486 annual departures (2 flights a day x 243 days x 100 percent 

completion). 4 14 arrivals and departures per week multiplied by $1,571 per flight.