Order 2010-6-15

Served: June 11, 2010

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 11th day of June, 2010

ORDER REQUESTING PROPOSALS

Summary

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

essential air service (EAS) at Cape Yakataga and Icy Bay, Alaska, for a new two-year period, 

beginning November 1, 2010, with or without subsidy. (See Appendix A for a map). Carriers 

should file their proposals no later than July 13, 2010.

Background

By Order 2008-7-28, July 30, 2008, the Department re-selected Alsek Air Service, Inc.

(Alsek), to provide subsidized EAS at Cape Yakataga and Icy Bay, through October 31, 2010. 

Under that order, Alsek provides three round trips each week to Yakutat from May through 

October, and two round trips each week from November through April, with an intermediate 

stop at the East Icy Bay, utilizing 4-seat Cessna aircraft, for an annual subsidy rate for both 

communities of $78,000.

Request for Proposals

As the end of the current rate term approaches, we are here requesting proposals from carriers 

interested in providing service at Cape Yakataga and Icy Bay, with or without subsidy, for the 

two-year period beginning November 1, 2010. Carriers should file their proposals no later 

than July 13, 2010. Staff will then docket the proposals, thereby making them public, and 

direct each carrier to serve a copy of its proposal on the civic parties and other applicants. 

Shortly afterwards, we will provide a summary of the proposals to the communities and ask 

Essential Air Service at

CAPE YAKATAGA, ALASKA

ICY BAY, ALASKA

Under 49 U.S.C. 41731 et seq.

DOCKET DOT-OST-1996-2009
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them to submit their final comments. We will give full consideration to all proposals that are 

timely filed.1

Interested 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. We also retain the discretion to 

reject outright all unreasonable or unrealistic proposals and 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 will not prescribe a precise format for their 

proposals. 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, they might want to include proposed 

schedules as well as supporting data for their subsidy requests, such as projected block hours, 

revenues and expenses.

We strongly encourage clear, well-documented proposals that will facilitate their evaluation 

by the affected communities and the Department.2

With specific respect to Cape Yakataga and Icy Bay, we expect proposals consisting of service

with small aircraft (e.g., those with 3-5 seats) and offering each community three round trips a 

week during the peak season and two weekly round trips during the off-peak season to

Yakutat or any other suitable hub, such as Cordova. In that regard, our understanding is that 

weather conditions have typically allowed for a higher percentage of completed flights to 

Yakutat, so we encourage carriers to give consideration to providing service to Yakutat, at 

least as one option. Further, flights meeting EAS guidelines at Alaskan communities should

provide sufficient capacity to accommodate passenger, freight and mail demand. Such service 

is generally consistent with what the communities currently receive, and fully satisfies their 

EAS requirements. We encourage proposals that meet those 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 those requirements if they envision other, potentially more 

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

essential air service 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.

2 In selecting a carrier to provide subsidized essential air service in Alaska, 49 U.S.C. 41733(c)(1) directs us to 

consider five factors: (1) scheduled service reliability; (2) contractual and marketing arrangements with a larger 

carrier to ensure service beyond the hub; (3) interline arrangements that the applicant has made with a larger 

carrier at the hub; (4) community views, giving substantial weight to the views of the elected officials 

representing the users; and (5) the experience of the applicant in providing, in Alaska, scheduled air service. In 

addition, the Consolidated Appropriations Act, 2008, Public Law 110-161, 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 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.
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attractive service possibilities -- different hubs, for example -- with subsidy requirements that 

remain competitive.

New Filing Procedures

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.

Service and Traffic History

Alsek has served Cape Yakataga and Icy Bay since fall 2006. In order to assist carriers in 

making their traffic and revenue projections, we have included historical traffic data, as 

provided by Alsek in Appendix B. As is typically the case in Alaska, significantly more 

freight and mail flow from the hub to EAS communities than from EAS communities to the 

hub. In addition, the data show that there is some seasonal peaking of traffic. Proposals 

should accommodate both of these factors.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces, and nondiscrimination.3 Consequently, all carriers receiving 

Federal subsidy for essential air service 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) 366-5903.4

Community and State Comments

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

prospective applicants to contact the communities before they submit their proposals so that 

they can tailor them to the communities’ needs, as they will not be able to amend them after 

the due date. As noted earlier, we will provide a copy of the proposals to the civic parties and 

ask them to submit their final comments shortly after July 13, the due date for proposals.

 3 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 government-wide requirements for drugfree workplace (grants).

4 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.
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This order is issued under authority delegated in 49 CFR 1.56a(f) and re-delegated to the 

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We request that carriers interested in providing essential air service at Cape Yakataga and 

Icy Bay, Alaska, submit their proposals, with or without subsidy requests, with or without 

subsidy requests, no later than July 13, 2010. The proposals should be e-mailed to: 

EAS@dot.gov with the title “Proposal to Provide Essential Air Service at Cape Yakataga and 

Icy Bay, Docket DOT-OST-1996-2009”;5

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

3. We will serve copies of this order on the parties listed in Appendix D.

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

Regulations, 14 CFR 385.50, must file such petitions within ten (10) 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

on the World Wide Web at http://www.regualtions.gov

 5 Questions regarding filings in response to this order may be directed to Brian Swanson at (202) 366-5392 or 

brian.swanson@dot.gov. Proposals should also be e-mailed to brian.swanson@dot.gov and

dennis.devany@dot.gov.
Appendix A

SERVICE AREA MAP
Appendix B

Aviation activity at Cape Yakataga and Icy Bay, Alaska

Month/Year Passengers Mail (lbs.) Freight (lbs.)

November 2006 8 20 300

December 2006 2 0 0

January 2007 0 29 1133

February 2007 0 22 405

March 2007 11 70 3072

April 2007 18 249 3400

May 2007 35 233 3747

June 2007 29 103 4920

July 2007 32 320 4234

August 2007 26 254 2346

September 2007 20 62 1099

October 2007 16 117 857

November 2007 3 115 442

December 2007 2 60 1165

January 2008 4 25 434

February 2008 3 11 450

March 2008 1 60 959

November 2008 19 90 2264

December 2008 3 1403 1071

January 2009 4 3 417

February 2009 2 7 76

March 2009 5 915 48

April 2009 9 173 180

May 2009 32 266 2413

June 2009 15 587 796

July 2009 8 1918 1067

August 2009 25 518 1018

September 2009 45 1273 4635

October 2009 12 263 2608

November 2009 3 140 355

December 2009 0 145 155

January 2010 2 245 36

February 2010 4 667 803

March 2010 4 95 1276

April 2010 9 152 2514

Source: Alsek Air Service, Inc.
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 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 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 are not currently available for performance under this solicitation beyond [DATE]. 

The Department’s obligation for performance under this solicitation beyond [DATE] is 

contingent upon the availability of appropriated funds from which payment for services can 

be made. No legal liability on the part of the Department for any payment may arise for 

performance under this order beyond [DATE], until funds are made available to the 

Department for performance. If funds are not made available for performance beyond 

[DATE], the carrier will receive notice in writing by the Department.

All claims for payment must be submitted within 60 days of the last day of service provided 

under this order.
Appendix D

SERVICE LIST

Aero Twin, AACA, Tony Cestnik Northern Air Cargo, John Eckles

Alaska Air Carriers Association, Joy Journeay Northern Air Cargo, Keven Schlosstein

Alaska Airlines, Joe Sprague Pacific Airways, Steve Montanus

Alaska Airlines, Sandy Sinick PenAir Consultant, Patrick Rizzi

Alaska Central Express, John Seamon PenAir, Betty Gonzalez

Alaska Central Express, Mike Bergt PenAir, Danny Seybert

Alaska Central Express, Steve Endlich PenAir, Orin Seybert

Alaska DOT, Christine Klein PenAir, Robert Cohn

Alaska DOT, Rebecca Cronkhite PenAir, Scott Bloomquist

Alaska DOT- Medicaid Passenger Fares PM, Air, d/b/a Promech, Marc Sessoms

Alaska Seaplanes, Craig Loken RITA, Bernard Stankus

Alsek Air, Les and Debra Hartley Servant Air, Wes Osowski

Arctic Circle, Donald Singsass Skagway, Ben Lingle

Arctic Circle, Kelly Harris Smokey Bay Air, Claire McCann

Arctic Transportation Services (ATS), Wilfred Ryan Spernak Airways, Mike Spernak

Arctic Transporation Services, (ATS), Jim Hjelm Tanana Air Service, Brian Martin

Baker Aviation, Marjorie Baker Taquan Air Service, Brian Salazaar

Bering Air, Allen Haddadi Taquan, Beckie Allen

Bering Air, Jim Rowe Tatonduk, Controller, Tina Paylor

Congressional, Murkowski, Arne Fuglvog Tatonduk, Marketing, Robert Ragar

Congressional, Young, Jeremy Price Tatonduk, Owner, Robert Everts

Consultant, Hank Myers USPS, Greg Garcia

Consultant, Ken Acton USPS, Joel Rosen

Consultant, Norm Israelson USPS, Mary Tobias

Ellis Air Taxi, Lynn Ellis USPS, Meredith Chavez, Consultant

Era Aviation, Mike Lenorman USPS, Steve Deaton

ERA, David M. Richards USPS, Mary T. Taylor

Frontier Flying, Bob Haiducovich USPS, Tina Campbell

Grant Aviation, Bruce McGlasson USPS, William Jones

Hageland, Mike Hageland Warbelow’s Air Ventures, Arthur Warbelow

Hageland, Patrick Thurston Ward Air, Kiesel

Hageland, Steve Wahrnke Wings of Alaska, Bob Jacobsen

Harris Air, Fly Hackett Wings of Alaska, Michelle Donahue

Harris Air, Scott Harris Wright Air Service, Bob Bursiel

Homeland Security, David Bernier Yute, Tim Vottis

Homeland Security, William Ragan

Homer Air, Andy Smircich

Iliamna Air, Tim LaPorte

Inland Aviation, Stephen Hill

Island Air Service, Bob Stanford

Katmai Air, Sonny Peterson