Order: 2010

- 9

- 10 Served: September 8, 2010


### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.
Issued b y the Department of Transportation on the 8 th day

of September , 20 10
Essential Air Service at KEARNEY, NEBRASKA NORTH PLATTE, NEBRASKA SCOTTSBLUFF, NEBRASKA Docket DOT - OST - 1996 - 1715 Docket DOT - OST - 199 9 - 5173 Docket DOT - OST - 2003 - 14535 under 49 U.S.C. 41731 et seq.



### ORDER RE - SELECTING CARRIER Summary By this order, the Department is re - selecting Great L akes Aviation, Ltd. , operating as both a United Airlines and Frontier Airlines code share

- partner (Great Lakes) , to provide essential air service (EAS) at Kearney , North Platte, and Scottsbluff , Nebraska, for a combined annual subsid y of $5,344,690 f or the two

- ye ar period from November 1, 2010 to October 31 , 201 2
. 1 Background By Order 2008

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- 3 3 , the Department selected Great Lakes to provide each community 18 weekl y nonstop round trips to Denver at a combined annual subsidy of $ 5,373,700, for the two
- y ear period from November 1, 2008 , through October 31, 2010
. As the end of the contract was approaching, we issued Order 2010

- 6

- 16, June 11 , 2010 , requesting proposals to serve the three communities for a new, two

- year term. In response, we received propos a ls from Great Lakes and Sovereign Air , Inc. (Sovereign Air)

.
1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.- 2

-

Each carrier’s complete proposal and community comments may

be accessed online at http://www.regulations.gov/ by entering in the search block DOT

- OST

- 1996

- 1715 for Kearney , DOT

- OST

- 1999

- 5173 for North Platte, and DOT

- OST

- 2003

- 14535 for Scottsbluff. Proposal of Great Lakes Great Lakes proposed one service option for each community , each option to be considered on a stand

- al one basis. Service t o each community would be three nonstop round trips each weekday and weekend (18 a week) from Denver using 19

- seat Beechcraft 1900 aircraft for annual subsidy of $1,965,740 at Kearney , $1,871,765 at North Platte, and $1,507,185 at Scottsbluff. Proposal of Sovereign Air Sovereign Air proposed for e ach community three round trips a day

Tuesday through Saturday and two round trips a day on Sunday and Monday , for a total of 19 round trips a week to Denver using 19

- seat Beechcraft aircraft for an annual subsid y of $2,374,457 at Kearney , $1,516,012 at North Platte, and $836,231 at Scottsbluff. Community Comments On July 19 , 2010, we requested community comments regarding this carrier

- selection case. We received a letter from May or Stanley Clouse on behalf of the Cit y of Kearney expressing support for continued service b y Great Lakes. May or Clouse cites the community ’s satisfaction with Great Lakes’ service, its code

- shares wi th United Airlines and Frontier Airlines, and the preference for service to Denver with its large number of connection possibilities as being the principal reasons for supporting Great Lakes’ proposal. We received no community comments from either North P latte or Scottsbluff. Decision The decisions for all three communities are straightforward. Great Lakes meets all of the statutory carrier

- selection criteria. It is a well

- established carrier and its code

- share arrangements with United and Frontier at Denver allow fo r seamless connections to the national air transportation sy stem . In the case of Kearney , it has receiv ed affirmative community support. On the other hand, Sovereign A ir does not currently have the requisite operating authorit y from ei ther the FAA or the Department of Transportation’s Economic Fitness Division to operate its proposed service. In addition, w e find that Great Lakes’ proposed service and subsidy levels are reasonab le, and will meet the communities’ EAS needs. We shall make this selection of Great Lakes contingent upon the Department’s receiving properl y executed certifications from the carrier that it is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the re gulations concerning lobb yi ng activities.- 3

-

Carrier Fitness 49 U.S.C. 41737(b) requires that we find an air carrier fit, willing, and able to provide reliable service before we may subsidize it to provide essential air service

. Great Lakes is subj ect to the Department’s continuing fitness requirements, and no information has come to our attention that would cause us to question the carrier's fitness at this time. We have contacted the Federal Aviation Administration, and it has raised no concerns that wo uld negativel y affect our fitness finding. We therefore conclude that the carrier remains fit to conduct the operations proposed here. This order is issued under authority delegated in 49 CFR 1.56a(f).
AC CORDINGLY, 1. We select Great Lakes Aviation Lt d

. , to provide essential air service at Kearney , North Platte, and Scottsbluff, Nebraska ; 2. We set the final rate of compensation for $1,965,740 at Kearney , $1,871,765 at North Platte, and $1,507,185 at Scottsbluff, for the provis ion of essential air se rvice as described in Appendix C; 3. We direct Great Lakes Aviation Ltd

. , 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 ye ars or until the Department indicates that the records may be destroy ed, whichever comes first. Copies of flight logs for aircraft sold or disposed of must be retained. The carrier may forfeit its compensation for any claim that is not supported under the terms of this order; 4. We f i nd that Great Lakes Aviation, Ltd

. , continues to be fit, willing and able to operate as a commuter carrier and capable of providing reliable essential air service at Kearney , North Platte, and Scottsbluff, Nebraska ; 5
. These dockets will remain open pending further Department action ; and- 4

-

6. We will serve cop ies of this order on the City and Airport Manager s of Kearney , North Platte, Scottsbluff, Great Lakes Aviation, Ltd. , and Sovereign Air.

By :

SUSAN L. KURLAND Assistant Secretary for Aviation and International Affairs (SEAL) An electronic version of this document is ava ilable on the World W ide Web at http://www.regulations.govAppendix A


## AREA MAPAppendix B Page 1 of 3Appendix B Page 2 of 3Appendix B Page 3 of 3Appendix C Page 1 of 3 Great Lakes Aviation, Ltd. Essential Air Service to be Provided at Kearney, Nebraska Effective Period : November 1 , 2010 , through October 31 , 2012 Scheduled Service : 1 8 weekl y nonstop round trips between Kearney and Denver Aircraft : 19

- seat Beechcraft 1900 aircraft Rate per Eligible Flight: $ 1,07 4 1 Weekly Ceiling : $ 38, 664 2 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 comple ted, 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 these rates, it must first notify the Office of Aviation Analysis in writing and receive written a pproval 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 disallow ed, the Department will consider the extent to which the goals of the program are met an d the extent of access to the national air transportation system provided to the community. If the Department unilaterally, either partially or complete ly , terminates or reduces payments for service or changes service requirements at a specific location p rovided for under this order, then, at the end of the period for which the Department does make payments in the stipulated amounts or at the stipulated service levels, the carrier may cease to provide service to that specific location without regard to any requirement for notice of such cessation. Those adjustments in the levels of subsidy and/or service that are mutually agreed to in w riting by the Department and the carrier do not constitute a total or partial reduction or cessation of payment. Funds are not currently available for performance under this order beyond September 30, 2010

. The Department’s obligation for performance under this order beyond September 30, 2010 , is subject to the availability of appropriated funds from which payment f or services can be made. No legal liability on the part of the Government for any payment may arise for performance under this order beyond September 30, 2010 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30, 2010 , the Department will provide notice in w riting to the carrier. Subsidy contracts 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. All claims for payment must be submitted within 60 days of the last day of service provided under this order.

1 Annual compensatio n of $1,965,740 divided by 1,831 annual departures (6 flights a day x 313 days x 97.5 percent completion)

. 2 36 arrivals and departures per w eek multiplied by $1,074 per flight

.Appendix C Page 2 of 3 Great Lakes Aviation, Ltd. Essential Air Service to be Provided at North Platte, Nebraska Effective Period : November 1, 2010 , through October 31 , 2012 Scheduled Service : 18 weekl y nonstop round trips between North Platte and Denver Aircraft : 19

- seat Beechcraft 1900 aircraft Rate per Eligible Flight: $ 1, 022 1 Weekly Ceiling : $ 3 6, 792 2 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 aircra ft 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 these rates, 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 circumsta nces 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 de termining whether subsidy payment for a deviating flight should be adjusted or disallow ed, 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 complete ly , 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 amounts or at the stipulated service levels, the carrier may cease to provide service to that specific location without regard to any requirement for notice of such cessation. Those adjustments in the levels of subsidy and/or service that are mutually agreed to in w riting by the Departm ent and the carrier do not constitute a total or partial reduction or cessation of payment. Funds are not currently available for performance under this order beyond September 30, 2010

. The Department’s obligation for performance under this order beyond September 30, 2010 , is subject to the availability of appropriated 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 September 30, 2010 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30, 2010 , the Department will provide notice in w riting to the carrier. Subsidy contracts 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. All claims for payment must be sub mitted within 60 days of the last day of service provided under this order.

1 Annual compensation of $1,871,765 divided by 1,831 annual departures (6 flig hts a day x 313 days x 97.5 percent completion)

. 2 36 arrivals and departures per w eek multiplied by $1,022 per flight

.Appendix C Page 3 of 3 Great Lakes Aviation, Ltd. Essential Air Service to be Provided at Scottsbluff, Nebraska Effective Period : November 1, 2010 , through October 31, 2012 Scheduled Service : 18 weekl y nonstop round trips between North Platte and Denver Aircraft : 19

- seat Beechcraft 1900 aircraft Rate per Eligible Flight: $ 82 3 1 Weekly Ceiling : $ 29, 628 2 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, suc h 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 these rates, 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; flight s that overfly points for lack of traffic will not be compensated. In determining whether subsidy payment for a deviating flight should be adjusted or disallow ed, 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 complete ly , 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 amounts or at the stipulated service levels, the carrier may cease to provide service to that specific location without regard to any require ment for notice of such cessation. Those adjustments in the levels of subsidy and/or service that are mutually agreed to in w riting by the Department and the carrier do not constitute a total or partial reduction or cessation of payment. Funds are not currently available for performance under this order beyond September 30, 2010

. The Department’s obligation for performance under this order beyond September 30, 2010 , is subject to the availability of appropriated 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 September 30, 2010 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30, 2010 , the Department will provide notice in w riting to the carrier. Subsidy contracts 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. All claims for payment must be submitted within 60 d ay s of the last day of service provided under this order.

1 Annual compensation of $1,507,185 divided by 1,831 annual departures (6 flights a day x 313 days x 97.5 percent completion)

. 2 36 arrivals and departures per w eek multiplied by $823 per flight

.