O rder: 2014

- 5

- 8

Served: May 21, 2014



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 21st of May , 20 1 4

ORDER REQUESTING PROPOSALS

Summary

By this O rder, the Department is requesting proposals from air ca rriers interested in providing

E ssential A ir S ervice (EAS) at Augusta/Waterville (Augusta) and /or Rockland, Ma ine, for a

new contract period beginning November 1, 201 4 , with or without subsidy

. (See Appendix A

for a map). Air c arriers should file their proposals no later than June 23

, 2014

.

Background

By Order 2010

- 9

- 28 (September 2 8, 2010 ), the Department sele cted Hyannis Air Service, Inc.

d/b/a Cape Air (Cape Air) to provide EAS at Augusta and Rockland to Boston Logan

International Airport (Boston) using 9

- passenger Cessna 402 aircraft , for a four

- year period

from November 1

, 2010

, through October 31, 2014. A t Augusta, Cape Air provides 28

weekly nonstop round trips during peak season (Memorial Day through Columbus Day) and

21 weekly nonstop round trips during off

- peak season for a n a nnual subsidy of $1,362,616.

At Rockland, Cape Air provides 35 weekly nonsto p round trips in July and August, 28 weekly

nonstop round trips in June and September, and 21 weekly nonstop round trips from October

through May for an annual subsidy of $1,420,545

.

The complet e public file for EAS at Augusta and Rockland may be accessed online through

the Federal Dockets Management System at: www.regulations.gov by entering Docket

number DOT

- OST

- 1997

- 2784 in the “Search for Rules, Comments, Adjudications, or

Supporting Documents” field.

Essential Air Service at

AUGUSTA/WATERVILLE, MAINE

ROCKLAND, MAINE

Under 49 U.S.C. § 41731 et seq

. Docket DOT

- OST

- 1997

- 2784- 2

-

Reques t for Proposals

As the end of the current contract approaches, the Department is requesting proposals from air

carriers interested in providing EAS at Augusta and /or Rockland

, with subsidy support if

necessary , for a new contract period beginning November 1, 201 4

. Carriers should file their

proposals no later than June 23

, 2014

. Staff will the n docket the proposals, thereby making

them public

. Shortly afterwards, we will provide a summary of the proposals to the

communit ies and ask them to submit their f inal comments. We will give full consideration to

all proposals that are timely filed. 1

Interested air carriers should prepare their proposals with every expectation that their initial

proposals will represent their final and only proposals. However, we retain the discretion to

negotiate proposals with carriers when we deem it desirable; in such cases, of course, we will

give all applicants the same opportunity. We also retain the discretion to reject outright all

unreasonable or unrealistic proposals a nd re

- solicit a new round of proposals. However,

negotiation and rejection are only occasional exceptions to the rule.

We are here providing interested carriers with some basic information to serve as guidance

when they prepare their proposals, but we wi ll not prescribe a precise format for their

proposals. Air carrier proposals should be submitted to the Department 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 adequately 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 would recommend that they include information concerning

proposed schedules and projected block hours . In add ition, applicants are urged to provide

financial data supporting their subsidy requests, includ ing information on their projected

expenses and revenues. We strongly encourage clear, well

- documented proposals that will

facilitate their evaluation by the affected communit ies and the Department. 2

Proposals should provide sufficient capacity to accomm odate historical levels of traffic. In

order to assist air carriers in developing traffic and revenue projections for their proposals, we

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

EAS without subsidy and we determine that basic EAS, as required by 49 U.S.C. § 41732, can be reliably

provided without such compensation, we typically will not proceed with the carrier

- selection case. Instead, we

simply rely on that carrier’s subsidy

- free service as proposed.

2 In selecting a carrier to provide subsidized EAS for an eligible place not in Alaska , 49 U.S.C. § 41733(c) (1)

directs us to consider five factors: (a) service reliability; (b) contractual and marketing arrangements with a

larger carrier at the hub; (c) interline arrangements with a larger carrier at the hu b; (d) community views, giving

substantial weight to the views of the elected officials representing the users; and (e) whether the carrier has

included a plan in its proposal to market its service to the community. In addition, the Consolidated

Appropria tions Act, 2014, Public Law No. 113

- 76, provides that when selecting a carrier to provide EAS, the

Department may consider the relative subsidy requirements, thus codifying a factor that we have considered since

the inception of the program. Interested ca rriers 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

-

have provided a summary of historical passengers in Appendi x B. 3 During the year ended

December 31

, 2013, Augusta av eraged 18 enplanements per day and Rockland averaged 23

enplanements per day

. The Department expects proposals similar to what the communities

currently receive , with service to Boston or other large

- or medium

- hub airport that provides

access to the nati onal air transportation system. At both communities, air carriers should take

into account the seasonality of each market.

Air c arriers are also welcome to propose more than one service option, if they choose. T hey

also need not limit themselves to th e se requirements if they envision other, potentially more

attractive service possibilities

-- different hubs or length of contract, for example

-- with

subsidy requirements that remain competitive.

Community Comments

The communities are welcome to submit comments at any time. We encourage prospective

app licants to contact the communities before they submit their proposals so that they ca n tailor

them to the communities’ needs, as they will not be able to amend them after the due date. As

noted earlier, w e will provide a summary of the proposals to the civic parties shortly after the

deadline for carrier proposals, and ask them to submit their final comments.

Other Carrier Requirements

The Department is responsible for implementing various Federal statute s governing lobbying

activities, drug

- free workplaces, and nondiscrimination. 4 Consequently, all carriers receiving

Federal subsidy for EAS must certify that they are in compliance with Department regulations

regarding drug

- free workplaces and nondiscrimi nation, and those carriers whose subsidies

exceed $100,000 over the life of the contract must also certify that they are in compliance with

the regulations governing lobbying activities. Because the Department is prohibited from

paying subsidy to carriers that do not submit these documents, all carriers that plan to submit

proposals involving subsidy should be aware that the selected carrier will be required to

complete the required certifications. Interested carriers requiring more detailed information

r egarding these requirements should contact the Offic e of Aviation Analysis at

(202) 366

- 5903. 5

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

- delegated to the

Director, Office of Aviation Analysis.

3 Source: Bureau of Transportation Statistics, Schedule T

- 100

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

-- New Restrictions on Lobbying;

(2) 49 CFR Part 21

-- Nondiscrimination in Federally

- Assisted Programs of the Department of T ransportation

-- Effectuation of Title VI of the Civil Rights Act of 1964; (3) 49 CFR Part 27

-- Nondiscrimination on the Basis of

Disability in Programs and Activities Receiving or Benefiting from Federal Financial Assistance; (4)

14 CFR Part 382

-- Nondi scrimination on the Basis of Disability in Air Travel; and (5) 49 CFR Part 29

--

Government

- Wide Debarment and Suspension (Non

- Procurement) and Government

- Wide Requirements for

Drug

- Free Workplace (Grants).

5 The certifications are also available on the we b at http://www.dot.gov/policy/aviation

- policy/small

- community

rural

- air

- service/essential

- air

- service

.- 4

-

ACCORDINGLY,

1. We requ est that carriers interested in providing Essential Air Service at Augusta and/or

Rockland, Maine

, submit their proposals, with subsidy support if necessary , no later than

June 23

, 2014 . The proposals should be e

- mailed to: michael.f.martin@dot.gov with the title

“Proposal to Provide E AS at Augusta and/or Rockland ”; 6

2. Th is docket will remai n open until further O rder of the Department; and

3 . We will serve copies of this O rder on the M ayor s of Augusta, Waterville, and Rockland,

Maine , the Airport Manager of Augusta State Airport

, the Airport M anager of Knox County

Regional Airport

, Hyannis Air Service, I nc. d/b/a Cape Air, and the service list for this docket.

Persons entitled to petition the Department for review of this Order under the Department’s

Regulations, 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

(SEAL)

An electronic version of this document is available

o nline at www.regulations.gov

.

6 Questions regarding filings in res ponse to this O rder may be directed to Michael Martin at (202) 366

- 6494 or

michael.f.martin@dot.gov

.Appendix A

AREA MAP

Maps generated by the Great Circle Mapper

- copyright © Karl L. Swar tz

.Appendix B

Page 1 of 2

Augusta, Maine

Quarter Year Deplanements Enplanements Total Traffic Enplanements per

Day

1 2010 633 670 1,303 8

2 2010 952 751 1,703 11

3 2010 1,497 1,566 3,063 19

4 2010 1,199 1,117 2,316 15

Annual

Totals 4,281 4,104 8,385 13

1 2011 877 933 1,810 12

2 2011 1,422 1,299 2,721 17

3 2011 2,119 2,108 4,227 27

4 2011 1,203 1,221 2,424 15

Annual

Totals 5,621 5,561 11,182 18

1 2012 1,016 1,058 2,074 13

2 2012 389 338 727 5

3 2012 2,114 2,040 4,154 26

4 2012 1,183 1,188 2,371 1 5

Annual

Totals 4,702 4,624 9,326 15

1 2013 975 1,047 2,022 13

2 2013 1,615 1,462 3,077 20

3 2013 1,912 1,840 3,752 24

4 2013 1,217 1,201 2,418 15

5,719 5,550 11,269 18Appendix B

Page 2 of 2

Rockland, Maine

Quarter Year Deplanements Enplanements Total Traf fic Enplanements per

Day

1 2010 818 932 1,750 11

2 2010 1,690 1,547 3,237 21

3 2010 3,168 3,301 6,469 41

4 2010 1,462 1,546 3,008 19

Annual

Totals 7,138 7,326 14,464 23

1 2011 1,063 1,206 2,269 15

2 2011 1,722 1,626 3,348 21

3 2011 3,044 3, 160 6,204 39

4 2011 1,628 1,672 3,300 21

Annual

Totals 7,457 7,664 15,121 24

1 2012 1,188 1,338 2,526 16

2 2012 2,035 1,928 3,963 25

3 2012 3,202 3,292 6,494 41

4 2012 1,486 1,514 3,000 19

Annual

Totals 7,911 8,072 15,983 26

1 2013 1,086 1,245 2,331 15

2 2013 1,834 1,713 3,547 23

3 2013 2,893 2,933 5,826 37

4 2013 1,287 1,375 2,662 17

Annual

Totals 7,100 7,266 14,366 23Appendix C

Example of General Terms and Conditions for Essential Air Service

The carrier understands that it may for feit 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 app roval. 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 cancel lations, 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 perio d 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 e nsured 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 l ack 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 natio nal air transportation system provided to the

community.

If the Department unilaterally, either partially or complete, terminates or reduces payments for

service or changes service requirements at a specific location provided for under this Order, then, a t

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 cessa tion. 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.

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 services can be made. No legal liability on the part of the Government for

any payment ma y 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 carrie r.

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, including any amended cl aims, must be submitted within 9 0 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 st ; August claims must be submitted by November 30 th , and so on.