Or der: 20 10

- 6

- 2 5

Served : June 2 9 , 2010



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 2 9th of June , 2010

Essential Air Service at

BECKLEY, WEST VIRGINIA CLARKSBURG/FAIRMONT, WEST VIRGINIA MORGANTOWN, WEST VIRGINIA PARKERSBURG, WEST VIRGINIA/ MARIETTA, OHIO

Under 49 U.S.C. 41731 et seq

. Docket DOT

- OST

- 1997

- 2761

Docket DOT

- OST

- 2005

- 20736

Docket DOT

- OST

- 2005

- 20735

Docket DOT

- OST

- 2005

- 20734

ORDER SELECTING CARRIER S

Summary By this order

, the Department is re

- s electing Colgan Air, Inc. (Colgan) to provide essential air service (EAS) at Clarksburg/Fairmont and Morgantown, WV, for a combined annual subsidy of $2,976,438, and at Beckley , WV, for an annual subsidy of $2,313,457 , for the two

- year period from August 1, 2010, through July 31, 2012

. The Department is selecting Gulfstream

Intern ational Airlines, Inc. (Gulfstream)

, to provide EAS at Parkersburg, WV/Marietta, O H , at an annual subsidy rate of $ 2, 642,237

, for a two

- year period beginning when the carrier inaugurates

full EAS through the end of the 24 th mo nth thereafter

. 1 The total annual subsidy for all four communities is $ 7,923,132.

Background By Order 20 10

- 3

- 16, March 12, 2010 , the Department requested proposals from carriers interested in serving the West Virginia communities discussed here, for the two

- year period from August 1, 2010, though July 31, 2012.

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.- 2

-

The Department synchronized the four communities’ expiration dates by extending Colgan’s

contract at Clarksburg/Fairmont and Morgantown by two months, to expire July 31, 2010, the same day as Beckley and Parker sburg/Marietta’s contracts are set to expire.

Proposal s In response to that order, we received proposals from t hree carriers: Colgan, Gulfstream , and Charter Air Transport.

Colgan proposes to operate all of its service as United Express. Gulfstream in tends to operate its proposed service to Cleveland as Continental Connection, while its service to Pittsburgh would

be unbranded , but would offer interline ticketing and baggage agreements with many major

carriers . Charter Air Transport does not currently have code

- sharing or ticketing / baggage

a greements with any other airlines.

The complete proposal s of all three carriers may be accessed online at : http://www.regulations.gov/ by entering “DOT

- OST

- 1997

- 2761 (Beckley), DOT

- OST

- 2005

- 20734 (Parkersburg), DOT

- OST

- 2005

- 20735 (Morgantown), or DOT

- OST

- 2005

- 20736 (Clarksburg/Fairmont) in the “Enter Keyword or ID” field. Due to the extensive number of options offered in the proposals, we have a provided a summary of the proposals in Appendix B.

Community and S tate Comments

On April 27 , 2010 , we requested co mmunity co mment s regarding the carrier selection at all four

communities. A summary of the comments received follows.

Beckley

In an e

- mail to the Department, Emmett Pugh, Mayor of the City of Beckley, says

, “Colgan Air

Inc. is the carrier that will best serve our community. Their proposal will provide 12 round trips per week operated as a combination of one stop and non stop service to Washington Dulles Airport.” He also appreciates “the option of requesti ng Colgan to provide three daily one stop flights at no additional subsidy which will help protect this potential market.” Further, “[t] he City of Beckley appreciates the EAS program and realize s the enormous potential it can provide. ”

A letter from Tom Cochran, Airport Manger of Raleigh County Memorial Airport, states “the Raleigh County Memorial Airport Authority (BKW) has unanimously chosen the proposal offered by Colgan Air Inc., with 12 round trips per week operated as a combination of one

- stop
and n on

- stop service to Washington DC Dulles Airport. ” The airport authority also requests that Colgan offer three daily one

- stop flights at no additional subsidy funding.

Clarksburg A May 19 letter to the Department states, “it is the consensus of the Board of the Benedum Airport Aut hority that service by [Gulfstream] to Cleveland serving only Clarksburg/Fairmont (CKB), independent of Morgantown, would be the most beneficial service to provide for air service to North Central West Virginia Airport (CKB). The Board understands that this service

to be as follows: CKB

- CLE 36 flights per week.”- 3

-

In a letter, dated May 27, Richard Rock, Interim Director for the North Central West Virginia Airport

, state s that the Benedum Airport Authority Board wished to reconside r its earlier

comments at a spe cial meeting held on May 26, when it heard presentations from Colgan and Gulfstream. After proper consideration of the proposals, “the Board determined that service most beneficial to the area served by CKB would be continua tion of Colgan service to Dulles, if and only if, two direct flights from CKB to and from Dulles Airport were provided on a daily basis, with one such flight returning from Dulles to CKB in the 5:30 to 7:00 time frame.” He further states, “[i]f such servi ce scheduled as above cannot be provided by Colgan

, then it is the recommendation of the Board that service by Gulfstream serving only CKB be provided to Cleveland in accordance with one of Gulfstream’s proposals.”

Morgantown In a May 6 letter, Calvin G. Kelly III, Director of Morgantown Municipal Airport, states, “Colgan’s service has been outstanding” and he “fully supports Colgan Air Inc. dba United Express to c ontinue commercial air service at Morgantown Municipal Airport ( MGW) with flights to Dulles International Airport (IAD).”

Parkersburg /Marietta Robert D. Newell, Mayor of the City of Parkersburg , states, “[w]e have reviewed all bids closely and have selected the bid of Gulfstream [for 24 flights a week].” He says over the past two years, “the lack of flight frequency an d schedule flexibility has not only in hibited enplanement growth at our airport it has compelled many businesses to seek more convenient service in other cities.” Colgan’s proposal to maintain status qu o is “unsatisfactory for our community.”

D. Blair Couch, President of the Mid

- Ohio Valley Regional Airport Authority states that the Authority unanimous ly supports Gulfstream ’s proposal for four nonstop round trips a day (24 a week, to Cleveland.

A letter from Michael Mullen, Mayor of the City of Marietta, Ohio, states, “we have reviewed the bids and strongly support the select ion of Gulfstream Internat i onal Airlines [for 24 flights a week, four non

- stop round trips each service day, to Cleveland Ho pkins Airport] by the Mid Ohio Valley Regional Airport Authority.” Mayor Mullen says the “four daily flights with 19 passenger aircraft give our airport true passenger growth potential and the kind of service we have been longing for over the past several years.”

The Board of Commission er s of Washington County (Ohio) also support s the Mid

- Ohio Valley Regional Airport’s decision to endorse Gulfstream

. The Board states “[t]he Cleveland option not only cements a traditional Ohio relationship, but with app ropriate connecting accommodations greatly improves the competitiveness advantage of our small metro community.” We also

received l et ters supporting Gulfstream’s 24

- round

- trip proposal from the Chamber of Commerce

of the Mid

- Ohio Valley.

Other letters We received a letter from Pittsburgh International Airport, encouraging t he Department to designate Pittsburgh as Clarksburg and Morgantown’s EAS hub. Similarly, we received a l etter- 4

-

from the Director of Cleveland Airport System

, and on behalf of the City of Cleveland

, support ing Gulfstream’s EAS proposals that would serve Cleveland/Hopkins International

Ai r port

.

Decision Charter Air Transport does not meet any of the four statutorily mandated carrier

- selection criteria: (1) it has no demonstrated relia bility in providing scheduled air service; (2) it does not have contractual and marketing arrangements with a larger carrier to ensure service beyond the hub; (3) it does not have interline arrangements with a larger carrier to allow passengers and

cargo a t the hub to be transported through one reservation, ticket, and baggage check in; and (4)

it d id not receive any community support. We have therefore eliminated Charter Air Transport

from further consideration.

The decision at Beckley is straightforward. Colgan’s requested annual subsidy to serve Beckley is less than Gulfstream’s and Colgan received the community’s full support

. We find the requested subsidy reasonable for the service proposed. T hus

, we select Colgan

, operating as

Unite d Express, to provide EAS at Beckley, for two years, from August 1, 2010, through July 31,

2012

, at an annual subsidy rate of $ 2,313,457. Although we are selecting Colgan’s proposed service of a combination of 12 weekly nonstop and one

- stop round trips to Washington Dulles, the community has requested that Colgan provide 18 weekly one

- stop round trips to Dulles at no additional subsidy.

The decision for Morgantown and Clarksburg is somewhat complicated due to the May 27

comments received from the Clarksbu rg community. Morgantown supports Colgan and it is the least expensive, selectable option between Colgan and Gulfstream. 2 However, Colgan’s only Morgantown and Clarksburg proposal is an inseparable package that serves both communities. The May 27 commen ts from Benedum Airport Authority support Colgan, but only if Colgan serves Clarksburg with two “direct” flights to and from Dulles and with one of those flights returning in the 5:30 to 7:00 [p.m.] time frame. In this case, the comments assume “direct” t o be defined as “nonstop.” If these criteria aren’t provided by Colgan, then Cl arksburg endorses

Gulfstream’s 18 weekly nonstop round trips to Cleveland.

The Clarksburg community has recommended a proposal that does n o t exist, because Colgan’s only Clarksburg proposal would also serve Morgantown on the same flights. In addition, the schedule Colgan provided in its proposal does not show a flight departing Dulles for Clarksburg

within the timeframe requested by the community. Moreover, t he EAS progr am does not dictate

or guarantee specific flight times, but s imply stipulat es that flights be “well

- timed throughout the day

. ” If the Department were to select the community’s recommended proposal from Gulfstream, essentially its second choice (36 nonsto p weekly round trips to Cleveland ), that would cost almost $2.3 M, forcing us to select a stand alone proposal for Morgantown at a minimum subsidy amount of $1.4M for a carrier (Gulfstream) and a hub (Cleveland or Pittsburgh) that Morgantown does not support

, for a minimum total of $3.7M. Colgan’s proposal for Morgantown and Clarksburg requires significantly less subsidy ($2.9M) vs. these

2 Gulfstream has one les s expensive option, which would provide service to Pittsburgh. However, Morgantown supports Colgan while Clarksburg supports Gulfstream, but only its option to Cleveland, not Pittsburgh. Thus selecting that option would not give either community its firs t choice.- 5

-

stand

- alone proposals from Gulfstream, and is supported by Morgantown and

, to a lesser extent, Clarksburg.

It should b e noted that both Clarksburg and Morgantown have experienced increased enplanements since Colgan inaugurated service , an indication that the service is working well. Considering these factors, we will select Colgan

, operating as United Express, to serve Morgantown and Clarksburg/Fairmont with 18 nonstop or one

- stop round trips to Washington Dulles using 34

- seat Saab 340 aircraft, for two years from August 1, 2010, through July 31,

2012 , at an annual subsidy rate of $2,976,438 for both communities . We strongly encourage Colgan to work with both communities, particularly Beckley and Clarksburg/Fairmont

, to ensure
the schedule and service levels meet each community’s needs. If , during the new, two

- year contract period, Colgan presents an alternativ e service pattern other than what we are selecting here (18 nonstop or one

- stop round trips), it has the support of both communities and does n o t require additional subsidy, the Department would be inclined to approve it.

The Parkersburg/Marietta communit y recommends Gulfstream’s 24 nonstop weekly round trips to Cleveland. The subsidy required is only slightly higher ($43,000 annually) than Colgan’s 12 nonstop weekly round trips to Washington Dulles

. In its comments, the community has cited its

desire fo r more frequent service (four nonstop round trips each weekday and weekend) vs. the current and proposed service from Colgan (two nonstop round trips each weekday and weekend )

. Given the relatively small difference in subsidy requirements, we will accede to the community’s

wishes and will select Gulfstream

, operating as Continental Connection, to serve Parkersburg/Marietta with 24 weekly nonstop round trips to Cleveland using 19

- seat Beech 1900

aircraft . The two

- year contract period will begin when the carrier inaugurates full service through the end of the 24 th month thereafter, for an annual subsidy rate of $2,642,237.

We shall make Colgan and Gulfstream’s selection at the four West Virginia communities

discussed here contingent upon th e Department’s receiving properly executed certifications from Colgan and Gulfstream that both carriers are in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations governing lobbying activities.

As a final matter, we expect Colgan and Gulfstream to work together to make a smooth transition at Parkersburg. In that regard, before Colgan suspends its service at Parkersburg, we expect it to contact all passengers holding reservations for travel after the final date of service, to inform them of the change in service, and to assist them in arranging alternate transportation or to provide a refund of the ticket price, without penalty, if requested.

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

. Colgan and Gulfstream are

sub j ect to the Department’s continuing fitness requirements, and no information has come to our attention that would cause us to question either 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 s remain fit to conduct the operations proposed here.- 6

-

This order is issued under authority delegated in 49 CFR 1.56a(f).

ACCORDINGLY,

1. We select Colgan Air, Inc.

, to provide essential air service at Beckley, Clarksburg/Fairmont, and Morgantown, West Virginia ;

2 . We set the final rate of compensation for Colgan Air, Inc., for the provision of essential air

service at Beckley, Clarksburg/Fairmont, and Morgantown, West Virginia , as described in Appendix D ;

3 . We direct Colgan Air, Inc.

, 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 representat ives 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 Colgan Air, Inc.

, continue s to be fit, willing and able to operate as a certificated

carrier and capable of providing reliable essential air service at Beckley, Clarksburg/Fairmont, and Morgantown, West Virginia

5 . We select Gulfstream International Airlines, Inc.

, to provide essential air service at Parkersburg, West Virginia/Marietta, Ohio;

6 . We set the final rate of compensation for Gul fstream International Airlines, Inc.

, for the provision of essential air service at Parkersburg, West Virginia/Marietta, Ohio , as described in Appendix D ;

7 . We direct Gulfstream International Airlines, Inc

. , to retain all books, records, and other

sourc e 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 year s 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;

8 . We find that Gulfstream International Airlines, Inc

. , continues to be fit, willing and able to

operate as a c ommuter carrier and capable of providing reliable essential air service at Parkersburg, West Virginia/Marietta, Ohio ;

9

. Th ese docke ts will remain open until further order of the Department; and- 7

-

10 . We will serve copies of this order on the Mayor s of Beckley, Clarksburg, Fairmont, Morgantown, and Parkersburg, West Virginia, and Marietta, Ohio, the managers of Mid

- Ohio Valley Regional Airport (Parkersburg/Marietta), Morgantown Municipal Airport, North Central West Virginia Airport (Clarksburg/Fairmon t), and Raleigh County Memorial Airport (Beckley), Gulfstream International Airlines, Inc., Colgan Air, Inc.

, and Charter Air Transport.

By:

SUSAN L. KURLAND Assistant Secretary

for Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the Internet at http://www.regulations.govAppendix A



## AREA MAP

This map is provided by Sabre ® AirVision TM Profit Essentials and is being used with express permission of the copyright holder,

Sabre Airline Solutions®.Appendix B

Hub (# of flights Subsidy amount

Community Carrier per week) Aircraft per community Combined with Notes

Beckley Colgan IAD (24) Saab 340 $2,313,457 n/a

CAT* CLT (24)/IAD (12) EMB-120 $2,330,866 Parkersburg

CAT* IAD (24) EMB-120 $1,821,239 Parkersburg

CAT* CLT (24) EMB-120 $1,555,803 Parkersburg aircraft based at PKB

CAT* CLT (24) EMB-120 $1,931,964 Parkersburg aircraft based at BKW

CAT* CLT (24) EMB-120 $2,198,850 n/a

CAT* IAD (24) J32 $1,893,863 n/a

CAT* CLT (24) J32 $1,724,161 n/a

Gulfstream CLE (24) B-1900 $2,399,389 n/a

Gulfstream PIT (24) B-1900 $2,322,422 n/a

Parkersburg/ Colgan IAD (24) Saab 340 $2,598,975 n/a

Marietta CAT* CLT (24)/IAD (12) EMB-120 $2,330,866 Beckley

CAT* IAD (24) EMB-120 $1,821,239 Beckley

CAT* CLT (24) EMB-120 $1,555,803 Beckley aircraft based at PKB

CAT* CLT (24) EMB-120 $1,931,964 Beckley aircraft based at BKW

CAT* IAD (24) EMB-120 $2,287,944 n/a

Gulfstream CLE (48) B-1900 $2,642,237 n/a

Gulfstream CLE (36) B-1900 $2,112,390 n/a

Gulfstream PIT (48) B-1900 $2,573,454 n/a

Gulfstream PIT (36) B-1900 $2,040,004 n/a

Clarksburg/ Colgan IAD (36) Saab 340 $1,488,219 Morgantown

Fairmont CAT* IAD (24)/CLT (12) EMB-120 $1,548,570 Morgantown

CAT* IAD (24) EMB-120 $1,815,272 n/a

CAT* CLT (24) EMB-120 $2,446,250 n/a

Gulfstream CLE (48) B-1900 $1,547,242 Morgantown

Gulfstream PIT (48) B-1900 $1,373,478 Morgantown

Gulfstream CLE (36) B-1900 $2,265,024 n/a

Gulfstream PIT (36) B-1900 $1,832,897 n/a

Morgantown Colgan IAD (36) Saab 340 $1,488,219 Clarksburg

CAT* IAD (24)/CLT (12) EMB-120 $1,548,570 Clarksburg

CAT* IAD (24) EMB-120 $1,689,077 n/a

CAT* CLT (24) EMB-120 $3,203,424 n/a

Gulfstream CLE (48) B-1900 $1,547,242 Clarksburg

Gulfstream PIT (48) B-1900 $1,373,478 Clarksburg

Gulfstream CLE (36) B-1900 $2,030,281 n/a

Gulfstream PIT (36) B-1900 $1,421,065 n/a

CAT=Charter Air Transport

CLT=Charlotte; IAD=Washington-Dulles; PIT=Pittsburgh

* CAT proposes 1 single-stop or nonstop round trip to Myrtle Beach per week that would be unsubsidized2Appendix C Page 1 of 3

Colgan Air, Inc. ( Proposal for Beckley )Appendix C Page 2 of 3

Colgan Air, Inc. (Proposal for Clarksburg/Fairmont and Morgantown)Appendix C Page 3 of 3

Gulfstream International Airlines, Inc. (Proposal for Parkersburg)

GULFSTREAM INTERNATIONAL AIRLINES

Essential Air Service Proposal

Parkersburg, WV

- Cleveland, OH

Option 1A

Parkersburg

Hub Served Cleveland

Number of Roundtrips per Service Day 4

Operating Statistics

Assumed Completion % 98%

Annual Adjusted Block Hours 2,335.77

Annual Adjusted Departures 2,452.81

Annual Adjusted ASMs 6,710,879

Annual RPMs 1,912,278

Projected Load Factor 28.5%

Revenue Projections

Enplaned Passengers 13,280

Mileage (Average as Operated) 144

Average Fare $ 70.00

Passenger Revenue $ 929,580

Expense Projections

Flight Operations $276,393

Ownership $306,360

Maintenance $870,400

Reservations, Stations & Administration $1,102,700

Fuel $840,877

Marketing $5,000

Total Annual Expenses $3,401,730

Projected Profit / (Loss) ($2,472,150)

Profit Element @ 5% $170,086

Annual Subsidy Required $2,642,237

Subsidy per Departure $1,077.23

Subsidy per Passenger $198.97Appendix D Page 1 of 3

Colgan Air, Inc

. Essential Air Service to be Provided at Beckley, WV

Effective Period : August 1 , 2010, through July 31, 201 2

Scheduled Service : 12 weekly round trips t o Washington Dulles International Airport Intermediate stops and upline service

Aircraft : Saab 340

, 34 seats : Nonstop or one

- stop service is permitted

Rate per Eligible Flight: $ 1, 906 1
Weekly Ceilin g : $ 45,744 2

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 t he 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 or der 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 a nd 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 d eviating 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 unilaterall y, either partially or complete ly , 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 ag reed 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 order beyond September 30 , 20 10. The Governmen t’s

obl igation for performance under this order beyond September 30 , 20 10 , 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 performanc e under this order beyond September 30 , 20 10 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30 , 20 10 , the Department will provide notice in writing to the carrier.

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

1 Annual compensation of $2,313,457 , divided by 1,214 annual departures (313 service days x 4 flights per service day x 97 percent completion)

. 2 24 flights per week multiplied by $ 1,906 per flight.Appendix D Page 2 of 3

Colgan Air, Inc.

Essential Air Service to be Provided at Clarksburg/Fairmont and Morgantown, WV

Effective Period : August 1, 2010, through July 31, 2012

Scheduled Service : 18 weekly nonstop or one

- stop round trips to Washington Dulles Intermediate stops and upline service: Service may be routed over Morgantown or Clarksburg

Aircraft : Saab 340, 34 seats Rate per Eligible Flight: $ 820 1
Weekly Ceiling : $ 2 9,520 per community 2

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 ra te 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 comple ted 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 adjust ed 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 l y , 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 se rvice 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 Depart ment 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 order beyond September 30 , 20 10. The Governmen t’s obligation for performance under thi s order beyond September 30 , 20 10 , 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 , 20 10 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30 , 20 10 , the Department will provide notice in writing to the carrier.

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

1 Annual compensation of $2,976,438 , divided by 3,632 annual departures (36 weekly departures x 52 weeks x 97 percent completion x 2 communities).

2 36 flights per week per community multiplied by $ 820 per flight.Appendix D Page 3 of 3

Gulfstream International Airlines, Inc.

Essential Air Service to be Provided at Parkersburg, WV/Marietta, OH

Effective Period : 24 m onths beginning when Gulfstream inaugurates service through the end of

the 24 th month thereafter

Scheduled Service : 24 weekly nonstop round trips t o Cleveland Hopkins International Airport Intermediate stops and upline service: Service must be nonstop

Aircraft : Beech 1900, 19 seats Rate per Eligible Flight: $ 1, 077 1
Weekly Ceilin g : $ 51,696 2

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 ra te 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 comple ted 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 adjust ed 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 ly , 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 s ervice 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 Depar tment 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 order beyond September 30 , 20 10. The Governmen t’s obligation for performance under th is order beyond September 30 , 20 10 , 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 , 20 10 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30 , 20 10 , the Department will provide notice in writing to the carrier.

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

1 Annual compensation of $2,642,237 , divided by 2,454 annual departures (313 service days x 8 flights per service day x 98 percent completion)

. 2 48 flights per week multiplied by $ 1,077 per flight.