Order 2010-1-18

Served: January 26, 2010 

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 26th day of January, 2010

Essential Air Service at

CHISANA, ALASKA

HEALY LAKE, ALASKA

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

DOCKET DOT-OST-1998-4574

DOCKET DOT-OST-1998-3546

ORDER REQUESTING PROPOSALS

Summary

By this order, the Department is requesting proposals, by March 1, from carriers interested in 

providing essential air service (EAS) at Chisana and Healy Lake, Alaska, for a new two-year 

period, with or without subsidy, beginning June 1, 2010. (See Appendix A for map.)

Background

By Order 2008-4-41, issued April 29, 2008, the Department selected 40-Mile Air, Inc. (40-

Mile Air), to continue providing subsidized EAS at Chisana and Healy Lake for the two-year 

period through May 31, 2010. That order established an annual subsidy rate of $65,546 for 

two nonstop round trips per week between Chisana and Tok with 3-seat Cessna 185 or 4-seat 

Cessna 206-207 aircraft; and $77,683 for two nonstop round trips between Healy Lake and 

Fairbanks with 5-seat Cessna 206 or 207 aircraft.

Request for Proposals

As the end of the current rate term approaches, in order to provide sufficient time to complete 

the carrier-selection process before the current contract expires, we are here requesting 

proposals from carriers interested in providing service at Chisana and Healy Lake, with or 

without subsidy support, for the two-year period beginning June 1, 2010. Carriers should file 

their proposals no later than March 1, 2010. Shortly after that date, our staff will 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 
2

the proposals to the community and state and ask them to submit their final comments. We 

will give full consideration to all proposals filed in a timely manner.1

Interested carriers should prepare their proposals with every expectation that their initial 

proposals will also be their final and only proposals. We retain the discretion to negotiate 

proposals with carriers when we deem it desirable; in such cases, of course, we will give all 

applicants the same opportunity. We also retain the discretion to reject outright all 

unreasonable or unrealistic proposals and solicit a new round of proposals. However, we 

anticipate that negotiation or rejection will remain 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

Proposals should provide sufficient capacity to accommodate historical levels. Specifically, 

we request proposals for two nonstop round trips a week between Chisana and Tok and two 

nonstop round trips a week between Healy Lake and Fairbanks, with small aircraft (10 seats 

or less). In order to assist carriers in making traffic and revenue forecasts, we have included 

historical traffic in Appendix B. Typically in Alaska, mail and freight flows are 

asymmetrical, with up to 90% of total mail and freight flowing outbound from the hub to the 

EAS communities. Historical traffic data (Appendix B) show that two round trips a week is 

sufficient to fulfill the EAS needs of these communities.

We encourage proposals that meet these requirements in an efficient manner. Carriers are 

also welcome to propose more than one option, if they choose; they need not limit themselves 

to those requirements if they envision other, potentially more attractive service possibilities –

different hubs or longer-term contracts, for example – with subsidy requirements that remain 

competitive.

 1 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 to an Alaskan community, 

49 U.S.C. 41733(c)(1) directs us to consider five factors: (1) service reliability; (2) contractual and marketing 

arrangements with a larger carrier at the hub; (3) interline arrangements 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 or significant non-scheduled 

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. Appendix C contains the general 

provisions governing essential air service; as in the past, these provisions will be included in the selection order 

as part of the Department’s authorization of subsidy for the selected service.
3

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.

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 to support 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. All carriers that 

plan to submit proposals involving subsidy should submit the required certifications along 

with their proposals. Interested carriers requiring more detailed information regarding these 

requirements, as well as copies of the certifications, should contact the Office of Aviation 

Analysis at (202) 366-5903. The Department is prohibited from paying subsidy to carriers 

that do not submit these documents.4

Community Comments

Civic officials and the State are welcome to submit comments at any time. We encourage 

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, we will provide a copy of the proposals to the civic parties and 

ask them to submit their final comments shortly after March 1, the due date for carrier 

proposals.

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 Chisana and Healy 

Lake, Alaska, submit their proposals, with or without subsidy requests, no later than March 1, 

2010. The proposals should be emailed to: EAS@dot.gov with the title “Proposal to Provide 

Essential Air Service at Chisana, Alaska (Docket DOT-OST-1998-4574)” and/or “Proposal to 

Provide Essential Air Service at Healy Lake, Alaska (Docket DOT-OST-1998-3546)”;5

 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 drug-free workplace (grants).

4 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.

5 Questions regarding filings in response to this order should be directed to Renée Williams at 

renee.williams@dot.gov or (202) 366-1058.
4

2. Dockets DOT-OST-1998-4574 and DOT-OST-1998-3546 will remain open until further 

order of the Department; and

3. The Department will serve copies of this order on the civic officials of Chisana and Healy 

Lake, the Alaska Department of Transportation and Public Facilities, and 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.regulations.gov
Appendix A

AREA MAP
Appendix B

Page 1 of 2

Historical Origin-Destination Traffic at

Chisana, Alaska1

12 Months ended September 30, 2009

4Q 08 1Q 09 2Q 09 3Q 09 Total

Passengers

From Chisana 7 7 4 12 30

To Chisana 1 2 8 16 27

8 9 12 28 57

Cargo

From Chisana 255 177 200 25 657

To Chisana 10848 12539 9441 11050 43878

11103 12716 9641 11075 44535

Mail

From Chisana 505 367 73 294 1239

To Chisana 4009 13444 1453 1626 20532

4514 13811 1526 1920 21771

Total Outbound PEQs2 86 142 68 93 389

12 Months ended September 30, 2008

4Q 07 1Q 08 2Q 08 3Q 08 Total

Passengers

From Chisana 8 4 8 12 32

To Chisana 5 4 14 16 39

13 8 22 28 71

Cargo

From Chisana 858 776 1838 25 3497

To Chisana 4537 9080 4047 11050 28714

5395 9856 5885 11075 32211

Mail

From Chisana 266 205 413 178 1062

To Chisana 7535 3497 5690 5685 22407

7801 3702 6103 5863 23469

Total Outbound PEQs2

79 76 82 113 349

___________________

1 Source: Bureau of Transportation Statistics; Schedule T-100. 2 PEQs: Passenger Equivalents. Every 200 pounds of freight or mail is the equivalent of one 

passenger.
Appendix B

Page 2 of 2

Historical Origin-Destination Traffic at

Healy Lake, Alaska1

12 Months ended September 30, 2009

4Q 08 1Q 09 2Q 09 3Q 09 Total

Passengers

From Healy Lake 9 0 9 5 128

To Healy Lake 27 1 13 15 131

36 1 22 20 259

Cargo

From Healy Lake 8 0 375 406 4276

To Healy Lake 1238 142 2028 1338 15208

1246 142 2403 1744 19484

Mail

From Healy Lake 3 1 4 8 16

To Healy Lake 572 364 348 725 2009

575 365 352 733 2025

Total Outbound PEQs2 45 4 36 32 367

12 Months ended September 30, 2008

4Q 07 1Q 08 2Q 08 3Q 08 Total

Passengers

From Healy Lake 25 0 23 2 50

To Healy Lake 33 3 33 13 82

58 3 56 15 132

Cargo

From Healy Lake 1196 97 400 782 2475

To Healy Lake 3698 241 985 1606 6530

4894 338 1385 2388 9005

Mail

From Healy Lake 46 2 8 0 56

To Healy Lake 396 487 371 409 1663

442 489 379 409 1719

Total Outbound PEQs2 85 7 65 29 186

___________________

1 Source: Bureau of Transportation Statistics; Schedule T-100. 2 PEQs: Passenger Equivalents. Every 200 pounds of freight or mail is the equivalent of one 

passenger.
Appendix C

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 order beyond September 30, 

2010. The Government'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.

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

provided under this order.
Appendix D

Aero Twin, AACA, Tony Cestnik DHS, Randy Webb

Alaska Air Carriers Association, Joy Journeay Northern Air Cargo, John Eckles

Alaska Airlines, Joe Sprague Northern Air Cargo, Keven Schlosstein

Alaska Airlines, Sandy Sinick Pacific Airways, Steve Montanus

Alaska Central Express, John Seamon PenAir Consultant, Patrick Rizzi

Alaska Central Express, Mike Bergt PenAir, Betty Gonzalez

Alaska Central Express, Steve Endlich PenAir, Danny Seybert

Alaska DOT, Christine Klein PenAir, Orin Seybert

Alaska DOT, Rebecca Cronkhite PenAir, Robert Cohn

Alaska DOT-Medicaid Passenger Fares PenAir, Scott Bloomquist

Alaska Seaplanes, Craig Loken PM Air, d/b/a Promech, Marc Sessoms

Alsek Air, Les and Debra Hartley RITA, Benard Stankus

Arctic Circle, Donald Singsaas Servant Air, Wes Osowski

Arctic Circle, Kelly Harris Skagway, Ben Lingle

Arctic Transportation Services (ATS), Wilfred Ryan Smokey Bay Air, Claire McCann

Arctic Transportation Services, (ATS), Jim Hjelm Spernak Airways, Mike Spernak

Baker Aviation, Marjorie Baker Tanana Air Service, Brian Martin

Bering Air, Allen Haddadi Taquan Air Service, Brien Salazaar

Bering Air, Jim Rowe Taquan, Beckie Allen

Congressional, Murkowski, Arne Fuglvog Tatonduk, Controller, Tina Paylor

Congressional, Begich, Amanda Clausen 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, Taylor, Mary T 

Frontier Flying, Bob Hajducovich USPS, Tina Campbell 

Grant Aviation, Bruce McGlasson USPS, William Jones

Hageland, Mike Hageland Warbelows Air Ventures, Arthur Warbelow

Hageland, Patrick Thurston Ward Air, Ed Kiesel 

Hageland, Steve Wahrnke Wings of Alaska, Bob Jacobsen

Harris Air, Fly Hackett Wings of Alaska, Michelle Donohue

Harris Air, Scott Wright Air Service, Bob Bursiel 

Harris Air, Scott Harris Yute, Tim Vottis

Homer Air, Andy Smircich 

Iliamna Air, Tim LaPorte 

Inland Aviation, Stephen Hill

Island Air Service, Bob Stanford

Katmai Air, Sonny Peterson