Order : 2013

- 7

- 22

Served: J uly 30, 2013



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 3 0 th day of July , 2013

Essential Air Service at

CEDAR CITY, UTAH

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 2003

- 16395



### ORDER REQUESTING PROPOSALS

Summary By this O rder, the Departme nt is requesting proposals from airlines interested in providing

Essential Air S ervice (EAS) at Cedar City

, Utah

, with or without subsidy , for a new rate term beginning January 1, 2014 . Pr oposals are due September 10 , 2013

.

Background By Order 2011

- 9

- 10

, September 15, 2011 , the Department re

- selected SkyWest Airlines, operating as Delta Connection (SkyWest), to pro vide EAS at Cedar City for an annual subsidy of $2,272,395 . It provides two nonstop round trips a day to Salt Lake City International Airport (Salt Lake City) using 50

- seat Canadair Regional Jet 200 (CRJ) aircraft for a two

- year term ending December 31, 2 013

. 1

Request for Proposals Air carriers should file their prop osals no later than September 10, 2013

. After that date, our staff will 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. We will give full consideration to all proposals filed in a timely manner.

Interested carriers should prepare their proposals with every expectation that their initial proposals will also be their final a nd only proposals. We retain the discretion to negotiate

1 The Department approved a request by Sky West to temporarily delay use of the CRJ effective January 1, 2012, until further notice, and adjusting their annual subsidy to $1,859,403. See Order 2012

- 3

- 11. SkyWest commenced service using the CRJ on June 1, 2 012

, at the annual subsid y stated in the selection order and above.- 2

-

proposals with carriers when we deem it desirable. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and solicit a new round of proposals. Air carrier pro posals should be submitted to the Department with all materials merged into a single document. In addition, because the document will be published on www.regulations.gov , each page should be formatted to be viewe d online.

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. 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 a s projected block hours, revenues and expenses. We strongly encourage clear, well

- documented proposals that will facilitate their evaluation by the affected community and the Department. 2

Air c arriers 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, frequency or equipment, for example

-- with subsidy requirements that remain competitive. The communities and air carriers are encouraged to work together in advance of the due date for proposals to craft a service pattern that is desirable

to the communit y and meets the operational needs o f the airline s

.

Proposals should provide sufficient capacity to accommodate historical levels of traffic. In order to assist carriers in developing traffic and revenue projections for their proposals, we have provided a summar y of historical passengers i n Appendix B. D uring the year ended

March 31

, 2013

, Cedar City averaged 51 enplanements per day. W e expect service levels that

are c ons istent with what the community currently receive s , with service to any large

- or medium

- hub airport that offers access to the national air transportation system. Specifically, air carriers should propose two or three round trips a day (12 or 18 a week) with 30

- s eat or larger aircraft; or four round trips a day (24 a week) with 15

- seat or larger aircraft. We would also

entertain proposals with 8/9

- seat aircraft and additional frequencies. As always, we will formally solicit the community ’ s views on any service options we receive before making a long

- term carrier selection decision.

Other Carrier Requirements The Depart ment is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces and nondiscrimination. 3 Consequently, all carriers receiv ing

2 In selecting a carrier to provide subsidized EAS, 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; and (5) whether the carrier has included a plan in its proposal to market the service

. In addition

, Consolidated Appro p riations Act, 2012, Public Law 112

- 55, and continued by the Full

- Year Continuing Appropriations Act, 2013, Public Law No. 113

- 6, provides that when selecting a carrier to provide EAS, the Department may consider the relative subsidy requirements, thus codifying

a factor that we hav e 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.

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- 3

-

Federal subsidy to support Essential Air S ervice must certify that they are in c ompliance 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 lobby ing activities. All air 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 and State Comments Civic officials are welcome to submit comments on the proposals at any time. As noted earlier, we will provide a summary of the proposals to the civic parties and ask them to submit their final comments shortly after September 10, 2013

, the due date for c arrier proposals.

This O rder is issued under authority delegated in 49 CFR Part 1. 25a(b) and re

- delegated to the Director, Office of Aviation Analysis.

ACCORDINGLY, 1. We request that air carriers interested in providing Essential Air Service at Cedar City, Utah

, submit their proposal , with or without subsidy requests, no later than September 10, 2013 . The proposal should be emailed to: EAS@dot.gov with the title “Proposal to Provide Essential Air

Service at Cedar Ci ty ”; 5

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

and activities receiving o r 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 available online under “Reports and Publications” at http://www.dot.gov/policy/aviation

pol icy/small

- community

- rural

- air

- service/essential

- air

- service

5 Questions regarding filings in response to this order should be directed to Michael Martin at 202

- 366

- 6494, or

via email at michael.f.martin@dot.gov

.- 4

-

3. The Department will serve a copy of this O rder on the Mayor and Airport M anager of Cedar City, and the service list for this Docket

.

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

Aviation Economic Regulations, 14 CFR Part 385.31(a) , must fil e 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 fil ing 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 line at www.regulations.gov

### Appendix A



## Area Map

Maps generated by the Great Circle Mapper

- copyright © Karl L. Swartz

.

### APPENDIX B

Historical Origin

- Destination Plane Traffic 1



### Cedar City, Utah

Quarter Year Deplanements Enplanements Total
Traffic Enplanements per Day

2 2010 1,199 1,298 2,497 16

3 2010 1,753 1,729 3,482 22

4 2010 1,618 1,817 3,435 22

1 2011 1,207 1,199 2,406 16

Annual

Totals 5,777 6,043 11,820 19

2 2011 1,779 2,084 3,863 25

3 2011 2,476 2,447 4,923 31

4 2011 2,833 2,851 5,684 36

1 2012 2,706 2,447 5,153 33

Annual

Totals 9,794 9,829 19,623 31

2 2012 4,456 4,454 8,910 57

3 2012 5,566 5,541 11,107 70

4 2012 3,219 3,339 6,558 42

1 2013 2,659 2,687 5,346 35

Annual

Totals 15,900 16,021 31,921 51

1 Source: USDOT Bureau of Transportation Statistics, TransStats Intermodal Database, Schedule T

- 1 00

.

### 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 explanati on 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 con formance 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 rou tes. 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 Departmen t 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 paymen ts 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 c ease 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 constit ute 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 solicitation beyond [DATE] . The Department’s obligation for performance under this soli citation beyond [DATE] , is contingent

upon 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 pe rformance. 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 t he month for which compensation is being claimed. For example, claims for service provided in July must be filed by October 31; August claims must be submitted by

November 30, and so on.