Order: 2010-9-10

Served: September 8, 2010

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 8th day of September, 2010

Essential Air Service at

KEARNEY, NEBRASKA

NORTH PLATTE, NEBRASKA

SCOTTSBLUFF, NEBRASKA

Docket DOT-OST-1996-1715

Docket DOT-OST-1999-5173

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 Lakes 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 subsidy of $5,344,690 for the two-year period from November 1, 2010 to 

October 31, 2012.

1

Background

By Order 2008-7-33, the Department selected Great Lakes to provide each community 18 

weekly nonstop round trips to Denver at a combined annual subsidy of $5,373,700, for the 

two-year 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 

proposals 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-alone basis. Service to 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 each 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 subsidy 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 Mayor Stanley Clouse on behalf of the City of Kearney 

expressing support for continued service by Great Lakes. Mayor Clouse cites the 

community’s satisfaction with Great Lakes’ service, its code-shares with 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 Platte 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 for seamless connections to the 

national air transportation system. In the case of Kearney, it has received affirmative

community support. On the other hand, Sovereign Air does not currently have the requisite 

operating authority from either the FAA or the Department of Transportation’s Economic 

Fitness Division to operate its proposed service. In addition, we find that Great Lakes’ 

proposed service and subsidy levels are reasonable, and will meet the communities’ EAS 

needs.

We shall make this selection of Great Lakes contingent upon the Department’s receiving 

properly 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 regulations concerning lobbying 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 

subject 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 would 

negatively 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).

ACCORDINGLY,

1. We select Great Lakes Aviation Ltd., 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 provision of essential air service 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 years 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 carrier may

forfeit its compensation for any claim that is not supported under the terms of this order;

4. We find 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 copies of this order on the City and Airport Managers 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 available on the World Wide Web at

http://www.regulations.gov
Appendix A

AREA MAP

 
Appendix B

Page 1 of 3
Appendix B

Page 2 of 3
 Appendix B

Page 3 of 3

 
 Appendix 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: 18 weekly nonstop round trips between Kearney and Denver

Aircraft: 19-seat Beechcraft 1900 aircraft

Rate per Eligible Flight: $1,074

1

Weekly Ceiling: $38,6642

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 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; 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 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 writing 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 writing 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 compensation 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 week 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 weekly nonstop round trips between North Platte and Denver

Aircraft: 19-seat Beechcraft 1900 aircraft

Rate per Eligible Flight: $1,0221

Weekly Ceiling: $36,7922

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 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; 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 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 writing 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 writing 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 compensation of $1,871,765 divided by 1,831 annual departures (6 flights a day x 313 days x 97.5 percent 

completion).

2

36 arrivals and departures per week 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 weekly nonstop round trips between North Platte and Denver

Aircraft: 19-seat Beechcraft 1900 aircraft

Rate per Eligible Flight: $823

1

Weekly Ceiling: $29,6282

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 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; 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 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 writing 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 writing 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 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 week multiplied by $823 per flight.