Order: 2014

- 6

- 8

Served June 17, 2014

U N I T E D S

T A T E S O F A

M E R I C A D E P A R T M E N T O F T R A N S P O R T A T

I O N UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 17 th day of June , 20 1 4

Essential Air Service at

LAKE MINCHUMINA, ALASKA

RAMPART , ALASKA

Under 49 U.S. C. § 47131 et seq. DOCKET DOT

- OST

- 2008

- 0237
DOCKET DOT

- OST

- 2008

- 0201



### ORDER REQUESTING PROPOSALS

Summary By this Order, the Department is requesting proposals from air carriers interested in providing Essential Air Service (“EAS”) at Lake Minchumina and Rampart , Alaska

, with or without subsidy support , beginning November 1, 2014 . Proposals are due July 16 , 201 4

. (See Appendix A for a map. )

B a c k g r o un d By Order 2012

- 10

- 14 , issued on October 11, 2012

, the Department re

- selected Wrigh t Air

Service , Inc.

, (“ Wright ”) to provide subsidized EAS at Lake Minchumina, Alaska, using 9

- and

4

- seat aircraft, with two nonstop round trips per week to Fairbanks, for the period of

November 1, 2012, through October 31, 2014, at an annual subsidy rate of $102,300. Also by that Order, the Department re

- selected Warbelow’s Air Ventures, Inc., (“Warbelows”) to provide subsidized EAS at Rampart, Alaska, using 9

- seat aircraft, with two nonstop round trips per week to Fairbanks, for the period of November 1, 2012, through October 31, 2014, at an annual subsidy rate of $76,416.

That Order, as well as the complete public file for EAS at Lake Minchumina and Rampart

, may be accessed online through the Federal Docket Management System at http://www.regulations.gov , by entering “DOT

- OST

- 2008

- 0237 ” for Lake Minchumina and

“DOT

- OST

- 2008

- 0201 ” for Rampart in the “ SEARCH for: Rules, Comments, Adjudications or Supporting Documents:” field.

Request for Proposals

As the end o f the current rate term approaches, we are here requesting proposals from air carriers interested in providing EAS at Lake Minchumina and/or Rampart

, with or without subsidy
support , for the two

- year period beginnin g November 1, 2014. Air carriers should file their2

proposals no later than July 16 , 201 4. After that date, our staff will docket the proposals, thereby making them public. Additionally, we request each air carrier serve a copy of its proposal on the civic parties at Lake Minchumina and Rampart and on the other applicants. Shortly afterwards, we will provide a s ummary of the proposals to the community and ask them to submit any

formal comments on this carrier

- selection case. We will give full consideration to all proposals that are timely file d. 1

We are here providing interested air carriers with some basic information to serve as guidance when they prepare their proposals, but we will not prescribe a precise format for their proposals. Air carrier proposals should be submitted to the Depar tment with all materials merged into a single document. In addition, because the document will be published on www.regulations.gov , each page should be formatted to be viewed online. We expect proposals to adequat ely describe the service being proposed and the annual amount of subsidy being requested. The applicants can make their own judgments as to the level of detail they wish to present; however, we recommend they include information concerning proposed

schedu les and projected block hours. In addition, applicants are encouraged to provide financial data supporting their subsidy requests, including information on their projected expenses and revenues. We strongly encourage clear, well

- documented proposals that will

facilitate their evalua tion by the affected communities and the Department. 2

Proposals should provide sufficient capacity to accommodate historical levels. Specifically, we request proposals for two nonstop round trips a week between the EAS communi ty and Fairbanks , or another suitable hub airport, with small aircraft ( 9

- seats or less). In order to assist air carriers in making traffic and revenue forecasts, we have included historical traffic in Appendix B. Typically in Alaska, mail and freight fl ows are asymmetrical, with up to 90% of the total mail and freight flowing

outbound from the hub airport to the EAS communities. Historical traffic data (Appendix B) show that two round trips a week is sufficient to fulfill the EAS needs of each community

.

Interested air carriers should prepare their propo s al with every expectation that their initial proposal will also be their final and only proposal. We retain the discretion to negotiate proposals with air carriers when we deem it desirable; in such c ases we will give all applicants the same opportuni t y. We also retain the discretion to reject outright all

1 Air carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide

EA S without subsidy and we determine that service can be reliably provided without such compensation, we usually do not proceed with the carrier

- selection case. Instead, we simply rely on that carrier’s subsidy

- free service as proposed.

2 In selecting a ca rrier to provide subsidized EAS in Alaska, 49 U.S.C. § 41733(c)(1) directs us to consider six factors: (1) service reliability; (2) contractual and marketing arrangements with a larger air carrier at the hub; (3) interline arrangements with a larger air ca rrier at the hub (4) community views; (5) the experience of the applicant in providing, in Alaska, scheduled air service or significant patterns of non

- scheduled air service; and (6) whether the air carrier has included a plan in its proposal to market the service. In addition
, Consolidated Appropriations Act, 2012, Public Law 112

- 55, and continued by the Full

- Year Continuing Appropriations Act, 2013, Public Law

No. 113

- 6, provides that when selecting a carrier to provide EAS, the Department may consider t he relative subsidy requirements, thus codifying a factor that we have considered since the inception of the program. Interested air carriers should also be aware that our general provisions governing Essential Air Service will be included in the

selection Order as part of our authorization of subsidy for the selected service. Appendix C of this Order contains those general provisions.3

unreasonab l e or unrealistic proposals and solicit a new round of proposals. However, we anticipate that negotiation or rejection will remain on l y occasional exceptions to the rule.

O t h e r Air Ca rr i e r R e qu i reme n t s The Department is responsible for implementing various Federal statutes governing l obbying

activities , drug

- free workplaces and nondiscrimination

. Consequent l y, all air carriers receiving Federal subsidy to support EAS must certify that they are in compliance with Department regulations regarding drug

- free workplaces and nondiscrimination, and those air

carr i ers whose subsidies exceed $100,000 over the life of the rate term must also certif y that they are in compliance with the regu l ations governing lobbying activities. All air carriers that plan to submit proposals involving subsidy should submit the required certifications along with their proposals. Interested air carriers requiring mor e detailed infor m ation regarding

the s e requirements, as well as copies of the certifications, should contact the Off i ce of

Aviation Ana l ysis at (202) 366

- 5903. The Department is prohibited from paying subsidy to

air carriers that do not submit these docum ent s

. 3

C o m m un i t y C o m m e n ts
Civic officials and the State are welco m e to submit comments at any time. We encourage prospective applicants to contact the communi t ies before they submit their proposals so that they can tailor them to the communi t ie s’ needs, as they will not be ab l e to amend them after the due date. As noted earlier, we will provide a copy of the propo s als to the civic parties and

ask them to submit their final comments short l y after July 16 , 2014 , the due da t e for air carr i er proposals.

Thi s Order is issued under authority delegated in 49 CFR Part 1.25a(b) and re

- delegated to the Director, Office of Aviation Analysis.

ACCORDI N G L Y,

1. We request that air carriers interested in providing E ssential A ir S erv i ce at Lake Minchumina and Rampart

, Alaska, submit their proposals, with or without subsidy requests,

no later than July 16, 2014 . The proposals should be emailed to: EAS@dot.gov with the title “Proposal to Provide Essential Air Service at L ake Minchumi na , Alaska ” and/or “Proposal to

Provide Essential Air Service at Rampart , Alaska ; ” 4

2

. Dockets DOT

- OST

- 2008

- 0237 and DOT

- OST

- 2008

- 0201 will remain open until furt her Order of the Department; and

3 The regulations applicable to these areas are: (1) 49 CFR Part 20

– New restrictions on lobbying; (2) 49 CFR

Part 21

– N ondiscrimination in federally

- assisted programs of the Department of Transportation

– Effectuation of title VI of the Civil Rights Act of 1964; 49 CFR Part 27

– Nondiscrimination on the basis of disability in programs and activities receiving or benefiting from Federal financial assistance; and 14 CFR Part 382

– Nondiscrimination on the basis of disability in air travel; and (3) 49 CFR Part 29

– Government

- wide debarment and suspension (non

procurement) and government

- wide requirements for drug

- free workpla ce (grants). The certifications are available

on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

- rural

- air

- service/essent ial

- air

- service

. 4 Questions regarding filings in response to this Order should be directed to Mr. Scott Faulk at scott.faulk@dot.gov or (202) 366

- 9967.4

3

. The Department will serve cop i es of this Order on the civic offic i als of Lake Minchumina and Rampart , Alaska

, the Alaska Department of Transportation and Public Facilities, and the

service list for this docket

.

Persons entitled to petition the Department for review of this Order under the Department’s Regula tions, 14 CFR Part 385.31(a), must file such petitions within seven (7) days after the date

of service of this Order.

This Order will be effective immediately, and the filing of a petition for review shall not preclude its effectiveness.

By:

TODD M. HOMAN

Director Office of Aviation Analysis

An electronic version of this document is available

online at www.regulations.gov.Appendix A



### A R EA M AP

M ap s g ene r a t e d b y t h e G r eat Ci r cle M appe r

- c op y r i g h t © Ka r l L. S w a r t z

.Appendix B

1 of 2


### Lake Minchumina , Alaska 1

Year Quarter Pax Freight
PEQ Mail
PEQ Total Year Quarter Pax Freight
PEQ Mail
PEQ Year Quarter Pax Freight
PEQ Mail
PEQ Total

2011 3 50 7 3 60 2011 3 59 34 25 118 2010 4 109 41 27 177

2011 4 19 1 3 23 2011 4 20 23 33 76 2011 1 39 23 36 98

2012 1 9 1 1 11 2012 1 13 12 40 65 2011 2 22 13 41 76

2012 2 28 1 4 33 2012 2 36 8 31 75 2011 3 64 9 35 108

Total 106 10 11 127 128 77 129 334 234 87 140 461

2012 3 63 1 2 66 2012 3 67 23 29 119 2011 4 130 24 31 185

2012 4 17 1 2 20 2012 4 21 11 29 61 2012 1 38 11 31 80

2013 1 28 1 1 30 2013 1 25 7 35 67 2012 2 53 9 36 98

2013 2 33 6 1 40 2013 2 35 21 19 75 2012 3 68 27 20 115

Total 141 9 6 156 148 62 112 322 289 71 118 478

2013 3 47 15 2 64 2013 3 61 26 17 104 2012 4 108 42 19 169

2013 4 14 4 2 20 2013 4 22 11 22 55 2013 1 36 15 24 75

2014 1 21 1 2 24 2014 1 25 19 34 78 2013 2 46 19 36 101

2014 2 18 5 2 25 2014 2 21 12 20 53 2013 3 39 17 22 78

Total 100 25 8 133 129 68 93 290 229 93 101 423 Origination Origin and Destination Destination

1 Source: Bureau of Transportation Statistics; Schedule T

- 100. PEQs: Passenger Equivalents. Every 200 pounds of freight or mail is the equivalent of one passenger.Appendix B
2 of 2



### Rampart , Alaska 1

Year Quarter Pax Freight
PEQ Mail
PEQ Total Year Quarter Pax Freight
PEQ Mail
PEQ Total Year Quarter Pax Freight
PEQ Mail
PEQ Total

2011 3 33 2 3 38 2011 3 33 19 9 61 2011 3 66 66 13 145

2011 4 30 1 1 32 2011 4 33 18 7 58 2011 4 63 19 9 91

2012 1 35 2 2 39 2012 1 33 16 8 57 2012 1 68 18 10 96

2012 2 59 2 1 62 2012 2 56 25 7 88 2012 2 115 28 8 151

157 7 7 171 155 78 31 264 312 131 40 483

2012 3 59 2 3 64 2012 3 93 33 7 133 2012 3 152 35 10 197

2012 4 37 1 1 39 2012 4 38 17 8 63 2012 4 75 18 64 157

2013 1 36 1 1 38 2013 1 36 15 9 60 2013 1 72 16 10 98

2013 2 63 1 2 66 2013 2 58 30 9 97 2013 2 121 31 11 163

195 5 7 207 225 95 33 353 420 100 95 615

2013 3 59 2 1 62 2013 3 47 39 6 92 2013 3 106 41 7 154

2013 4 39 1 1 41 2013 4 43 24 7 74 2013 4 82 25 8 115

2014 1 30 3 1 34 2014 1 29 24 5 58 2014 1 59 27 6 92

2014 2 13 1 1 15 2014 2 26 11 2 39 2014 2 39 12 3 54

141 7 4 152 145 98 20 263 286 105 24 415 Destination Origination Origin and Destination

1 Source: Bureau of Transportation Statistics; Schedule T

- 100. PEQs: Passenger Equivalents. Every 200 pounds of freight or mail is the equivale nt of one passenger.Appendix C

Example of General Terms and Conditions for Eassential Air Service

T he air c a rr i e r un d er st a nds t h a t it m a y f o rfe it its c omp e ns a tion f or a n y f li g hts th a t it do e s not

op era te in c o n f o r m a n c e with the t er ms a nd stipul a tions of the ra te Order

, i n c luding the s er vi c e pl a ns outlin e d in the Order a nd a n y oth e r s i g ni f i c a nt e l e m e nts of the re qui re d s er vi ce , without

p r ior a p p r ov a l. The air c arr i e r und e r st a nds th a t a n a i r cr a f t t a k e

- o f f a nd l a nding a t its s c h e du l e d

d e stin a tion c onstitut e s a c ompl e t e d f li g ht; a bs e nt a n e x pl a n a tion suppo r ting subsi d y e li g i b ili t y f o r

a f l i g ht th a t h a s n ot b ee n c ompl e t e d, su c h a s cer t a in w ea th e r ca n ce ll a tions, o n l y c ompl e t e d f li g hts

a r e c onsid ere d e l i g ible f or su b si d y

. I n a ddition, if the air carr i e r d o e s not s c h e dule or o p era t e its

f li g hts in f ull c on f o r m a n c e with the Order f o r a s i g ni f i ca nt p e r iod, it m a y j e op ar di z e its e nti r e subsi d y c l a im f or t he p er iod in qu e stion. I f the air c a rr i e r c ont e mpl a t e s a n y su c h c h a ng e s b e y ond

the s c ope o f the Order du r ing the a ppli ca ble p e r iod of th e se ra t e s, it must f i r st noti f y the O ff i c e of

Avi a tion An a l y sis in w r iti n g a n d r ece ive w r itt e n a pp r o v a l f r om the D e p a r tm e nt to be e nsu re d o f

f ull c omp e ns a tion. S hould c i rc umst a n ce s w ar r a n t , the D e p ar tm e nt m a y l o c a te a nd s e l e c t a

re pl a ce m e nt air c arr i e r to p r ovide s er vi c e on th e se r out e s. The air c a rr i e r must c ompl e te a ll

f li g hts th a t ca n b e s a f e l y op era t e d; f l i g hts th a t ov e rf l y points f o r l ac k of t r a f f ic will not be

c omp e ns a t e d. I n d e t er m i ning wh e t h e r subsi d y p a y m e nt f o r a d e v i a ting f l i ght should be a djust e d

or dis a llow e d, t he D e p a r tm e nt will c onsid e r the e x t e nt to whi c h the g o a l s of the p r og ra m a r e m e t

a nd the e x t e nt of acce ss to the n a tion a l a ir t ra nspo r t a tion s y s t e m p r ovid e d to the c ommuni t y

.

I f the D e p ar tm e nt unil a t e ra l l y , e ith e r p a r ti a l l y or c ompl e t e l y , t er min a t e s or re du ce s p a y m e nts f or

s e r vi c e or c h a ng e s s er vi c e r e qui re m e n ts a t a sp ec i f ic lo c a tion p r ovid e d f or und e r this Order, th e n,

a t the e nd of the p e r iod f or whi c h the D e p ar tm e nt d o e s m a ke p a y m e nts in the stipul a t e d a mounts

or a t the stipul a t e d s er vi c e l e v e ls, the air c a rr i e r m a y cea se to p r ovide s er v i c e t o th a t sp ec i f ic

lo c a tion without re g a r d to a n y r e qui re m e nt f or noti c e of su c h c e ss a tion. Those a djustm e nts in the

l e v e ls of subsi d y a nd/or s er vi c e th a t ar e mutu a l l y a g r ee d to in w r iting b y the D e p ar tm e nt a nd air

ca r r i e r do not c on s titute a tot a l or p ar ti a l re d u c tion or ce ss a tion of p a y m e nt.

S ubsi d y c ont r a c ts ar e su b j ec t to, a nd in c o r po r a te b y r ef e re n c e
, r e l e v a nt st a t ut e s a nd D e p ar tm e nt

r e g ul a tions, a s th e y m a y be a m e nd e d fr om time to tim e . How e v er
, a n y su c h st a tut e s, r e g ul a tions,

or a m e ndm e nts th ere to sh a ll not op era te to c ont r o v er t the f o r e g oi n g p ar a g r a ph.

Funds may not be available for performance under this Order beyond [DATE] . The Government’s obligation for performance under this Order beyond [DATE] , is subject to the availability of funds from which payment for s ervices can be made. No legal liability on the part of the Government for any payment may arise for performance under this Order beyond [DATE] , until funds are made available to the Department for performance. If sufficient funds

are not made available for performance beyond [DATE] , 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 exa mple, claims for service provided in July must be filed by October 31 st ; August claims must be submitted by November

30 th , and so on.