Order 201 4

- 12

- 11
Served: December 16 , 201 4



### UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 16 th day of December , 20 1 4

ORDER REQUESTING PROPOSALS

Summary By this O rder, the Department is requesting proposals f r om carriers interested in providing Essential A ir S ervice ( EAS ) at Carlsbad, New Mexico, for a new contract period, beginning June 1, 20 1 5 , with or without subsidy. (See Appendix A for a service

area map )

. Carriers should file their proposals no later than January 20

, 201 5

.

Background By Order 201 3

- 5

- 5, issued May 6, 2013, the Department re selected Pacific Wings L.L.C.,
d/b/a New Mexico Airlines (New Mexico Airlines) to provide subsidized EAS at
Carlsbad for the two

- year period from June 1, 2013

, through May 31, 2015, at a n annual subsidy rate of $ 1, 3 97,081

. Under that O rder

, New Mexico Airlines provide s two daily
nonstop round tr ips (12 weekly) between Carlsbad and Albuquerque, utilizing single

engine, 9

- passenger Cessna Grand Caravan (C

- 208B) turboprop aircraft.

Request for Proposals As the end of the current contract approaches, the Department is here requesting proposals from carriers interested in providing EAS at Carlsbad

, with or without subsidy,

for a new contract period beginning June 1, 201 5 . Carriers should file their proposals no later than January 20

, 201 5

. Staff will then docket proposals, thereby making them public , and shortly afterwards will provide a summary of the proposals to the communit y and ask them for their final comments. The Department will give full consideration to all proposals filed in a timely manner. 1

1 Carriers should not expect the Department to accept late fillings. In cases where a carrier proposes to provide EAS without subsidy and we determine that service can be reliably provided without such compensation, we do not proceed with the c arrier

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

su bsidy

- free service as proposed. Essential Air Service at

CARLSBAD, NEW MEXICO

Under 49 U.S.C. § 41731 et seq

. Docket DOT

- OST

- 2002

- 12802- 2

-

Interested carriers should prepare their propo sals with every expectation that their initial proposals will represent their final and only proposals. However, the Department retain s the discretion to negotiate proposals with carriers when we deem it desirable

. The Department also retain s the discret ion to reject outright all unreasonable or unrealistic proposals and re

- solicit a new round of proposals. However, negotiation or rejection are only an occasional exception to the rule.

The Department is here providing interested 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. The Department expect s 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, they might want to include proposed schedules as well as supporting data for their subsidy requests, such as projected block hours, revenues an d expenses. The Department strongly

encourage s clear, well

- documented proposals that will facilitate their evaluation by the

affected communit ies and the Department. 2

The Department expects proposals that are consistent with what th e community currently receives, namely 12 weekly round trips to a hub airport with numerous connections to the national air transportation system

. The Department e ncourage s proposals that meet the se requirements in an efficient manner. Carriers are also welcome to propose mor e than one service option, if they choose. T hey need not limit themselves to the se requirements if they envision other, potentially more attractive service possibilities (e.g. different hubs or length of contract) with subsidy requirements that remain com petitive.

The community and air carriers are encouraged to work together in advance of the due date for proposals to craft service patterns that are desirable to the community and meet the operational requirements of the airline.

Service and Traffic Hist ory
H istorical traffic is provided in Appendix B. For the year ended September 30, 2014

, Carlsbad generated 4,033 total passengers to and from Albuquerque , or an average of 6.4 enplanements per day

. 3

2 In selecting a carrier to provide subsidized EAS, 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 to ensure service beyond the hub; (c) interline arrangements that the applicant has made with a larger carrier at the hub; (d) community views, giving substantial weight to the views of the elected officials representing the users; and (e) the carrier’s plan to market its service to the community. In addition, the Consolidated Appropriations Act, 2014, Public Law No. 113

- 76, and continued in the Continuing Appropriations Resolution, 2015, Public Law No. 113

- 164, 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 carriers should also be aware that ou r general provisions governing EAS 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 Recent legislation requires that to remain eligible for subsidized EAS , a community must maintain an average of 10 enplanements or more per service day during the most recent fiscal year beginning after- 3

-

F iling Requirements Carrier proposals should be submit ted to the Department with all materials merged into a single document. In addition, because th e document will be published on Regulations.gov, each page should be formatted to be viewed online.

Other Carrier Requirements The Department is responsible fo r implementing various Federal statutes 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 regardin g drug

- free workplaces and nondiscrimination, and those carriers whose subsidies exceed $100,000 over the life of the rate

- term must also certify that they are in compliance with the regulations governing lobbying activities. Because the Department is pro hibited 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

carrier s requiring more detailed information regarding these requirements should contact the Office of Aviation Analysis at (202) 366

- 5903. 5

Community and State Comments The community and State are welcome to submit comments at any time. The Department

encourag e s prospective applicants to contact the communit y before they submit their proposals so that they can tailor them to the communit y ’ s needs, as they will not be able to amend them after the due date. As noted earlier, the Department will provide a

summary of the proposals to the civic parties and ask them to submit their final comments shortly after January 20

, 2015, the deadline for carrier proposals.

This O rder is issued under author ity delegated in 49 CFR Part 1.25 a( b ) and re

- delegated to the Director, Office of Aviation Analysis.

September 30, 2012. The legislation exempts locations in Alaska and Hawaii and communities that are

mor e than 175 driving miles from the nearest large or medium hub airport. As Carlsbad is more than 175 driving miles from the nearest large or medium hub airport, this provision is not applicable.

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

-- New restrictions on lobbying; (2) 49 CFR Part 21

-- Nondiscrimination 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 workplace (grants).

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

- policy/small

community

- rural

- air

- service/essential

- air

- service

.- 4

-

ACCORDINGLY,

1. The Department request s that ca rriers interested in providing E ssential A ir S ervice at Carlsbad, New Mexico , submit their proposals, with or without subsidy requests, no later

than January 20

, 201 5 . The prop osals should be e

- mailed to: EAS@dot.gov with the title “Proposal to Provide E AS at Carlsbad, New Mexico ”;

2. This docket will remain open until further order of the Department; and

3. The Department will serve copies of this O rder on the mayor of Carlsbad, New Mexico, the airport manager at Cavern City Air Terminal, Pacific Wings, L.L.C. d/b/a New Mexico Airlines, and the service list for this docket.

Persons entitled to petition the Department for review of this O rde r under the Department’s Aviation Economic Regulations, 14 CFR Part 385.50, must file such petitions within seven ( 7 ) days aft er the date of service of this O rder.

This O rder 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

at http://www.regulations.govAppendix A



### AREA MAPAppendix B



### Historical O &D Traffic at Carlsbad, NM 1

Month Origin Destination Total O&D
October-11 246 241 487

November-11 211 234 445

December-11 261 260 521

January-12 198 201 399 February-12 210 223 433

March-12 236 250 486

April-12 218 250 468 May-12 216 238 454

June-12 215 233 448 July-12 212 213 425 August-12 205 246 451 September-12 218 224 442 YE September 30, 2012 2,646 2,813 5,459

October-12 229 262 491

November-12 211 215 426

December-12 224 220 444

January-13 204 184 388 February-13 180 204 384

March-13 258 263 521

April-13 201 240 441 May-13 213 256 469

June-13 225 203 428 July-13 231 225 456 August-13 253 247 500 September-13 219 196 415 YE September 30, 2012 2,648 2,715 5,363

October-13 167 192 359

November-13 150 147 297

December-13 218 229 447

January-14 159 158 317 February-14 122 140 262

March-14 198 187 385

April-14 198 184 382 May-14 182 197 379

June-14 162 163 325 July-14 148 144 292 August-14 159 147 306 September-14 150 132 282 YE September 30, 2012 2,013 2,020 4,033

Ave rage Daily Enplanements Y ear
- E nded September 30, 2014 : 6.4 2

1 Source: Bureau of Tra nsportation Statistics Form 41: Schedule T

- 100 Domestic Market.

2 Average Daily Enplanements calculated by dividing total O&D passengers by 313 service days, divided by 2 directions.Appendix C

Example of General Terms and Conditions for Essential Air Service

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

- o ff 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 ch anges 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 warr ant, 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 complete, 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 m ake 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/o r 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 contracts are subject to, and incorporate by reference, relevant statutes and Department regulat ions, 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 [DATE]. The

Govern ment’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 may arise for performance under this Or der 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 example, claims for service provided in July must be filed by October 31 st ; August claims must be submitted by November

30 th , a nd so on.