Order 2014-12-11

Served: December 16, 2014

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 16th day of December, 2014

ORDER REQUESTING PROPOSALS

Summary

By this Order, the Department is requesting proposals from carriers interested in 

providing Essential Air Service (EAS) at Carlsbad, New Mexico, for a new contract

period, beginning June 1, 2015, with or without subsidy. (See Appendix A for a service 

area map). Carriers should file their proposals no later than January 20, 2015.

Background

By Order 2013-5-5, issued May 6, 2013, the Department reselected 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 an annual 

subsidy rate of $1,397,081. Under that Order, New Mexico Airlines provides two daily

nonstop round trips (12 weekly) between Carlsbad and Albuquerque, utilizing singleengine, 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, 2015. Carriers should file their proposals no 

later than January 20, 2015. Staff will then docket proposals, thereby making them 

public, and shortly afterwards will provide a summary of the proposals to the community

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

subsidy-free service as proposed.

Essential Air Service at

CARLSBAD, NEW MEXICO

Under 49 U.S.C. § 41731 et seq.

Docket DOT-OST-2002-12802
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Interested carriers should prepare their proposals with every expectation that their initial 

proposals will represent their final and only proposals. However, the Department retains

the discretion to negotiate proposals with carriers when we deem it desirable. The 

Department also retains the discretion 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 expects 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 and expenses. The Department strongly 

encourages clear, well-documented proposals that will facilitate their evaluation by the 

affected communities and the Department.2

The Department expects proposals that are consistent with what the community currently 

receives, namely 12 weekly round trips to a hub airport with numerous connections to the 

national air transportation system. The Department encourages proposals that meet these 

requirements in an efficient manner. Carriers are also welcome to propose more than one

service option, if they choose. They need not limit themselves to these requirements if 

they envision other, potentially more attractive service possibilities (e.g. different hubs or 

length of contract) with subsidy requirements that remain competitive.

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 History

Historical 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 our 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 
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Filing Requirements

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 

Regulations.gov, each page should be formatted to be viewed online.

Other Carrier Requirements

The Department is responsible for 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 regarding 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 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 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

encourages prospective applicants to contact the community before they submit their 

proposals so that they can tailor them to the community’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 Order is issued under authority delegated in 49 CFR Part 1.25a(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 

more 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 Part 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 governmentwide requirements for drug-free workplace (grants).

5 The certifications are also available on the web at http://www.dot.gov/policy/aviation-policy/smallcommunity-rural-air-service/essential-air-service.
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ACCORDINGLY,

1. The Department requests that carriers interested in providing Essential Air Service at 

Carlsbad, New Mexico, submit their proposals, with or without subsidy requests, no later 

than January 20, 2015. The proposals should be e-mailed to: EAS@dot.gov with the title 

“Proposal to Provide EAS 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 Order 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 Order under the 

Department’s Aviation Economic Regulations, 14 CFR Part 385.50, 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

at http://www.regulations.gov
Appendix A

AREA MAP
Appendix B

Historical O&D Traffic at Carlsbad, NM1

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

Average Daily Enplanements Year-Ended September 30, 2014: 6.42

 1 Source: Bureau of Transportation 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-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 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 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 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 

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.

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 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 example, claims for service 

provided in July must be filed by October 31st; August claims must be submitted by November 

30th, and so on.