Order : 2012

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Served: March 6, 2012



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 6 th day of March , 20 12

Essential Air Service at

MUSCLE SHOALS, ALABAM A

GREENVILLE, M ISSISSIPPI

LAUREL/HATTIESBURG, MISSISSIPPI

TUPELO, MISSISSIPPI

Under 49 U.S.C. 41731 et seq

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DOCKET DOT

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DOCKET DOT

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### ORDER REQUESTING PROPOSALS

Summary

By this Order , the Departme nt is requesting a third round of proposals from airlines interested

in providing Essential Air S ervice (EAS) at any or all of the four communities captioned above.

Pr oposals are due by April 10, 2012 . (See Appendix A for a map.)

Background

By a series of Order s, the Department selected Mesaba Aviation, Inc., operating as Northwest

Airlink ( now D elta Connection ) t o provide subsidized EAS at Greenville, Laurel/Hattiesburg

and Tupelo, MS, and Muscle Shoals, AL. 1

On July 15 , 2011

, Mesaba filed notices to terminate their subsidized service at 24 EAS

communities, i ncluding these 4. W e issued Order 2011

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- 5, September 13, 2011 , requesting

proposals for these four communities. In response, we received proposals from Multi

- Aero Inc.

d/b/a Air Choice One (Air Choice One) and SeaP ort Airlines , Inc. (SeaPort) . Both carriers

proposed service with single

- engine aircraft

, whe reas all of the communities are entitled by

statute to service with twin

- engine aircraft. Since all four communities refused to waive their

right to twin

- engine aircraft, we had no choice but to reject th ose proposals and solicit another

round of proposal s that meet the minimum aircraft requirements.

By Order 2011

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- 29, November 23, 2011, we requested a second round of proposals for the

four communities listed above. In response to that Order, we received proposals from Air

1 See Orders 2010

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- 12

, 2010

- 5

- 16

, 2011

- 1

- 24 and 2010

- 5

- 18

.- 2

-

Choice One, Citizens Capital Corp. d/b/a Blue Sky Airlines (Blue Sky), SeaPort, and Sun Air

Express, LLC . ( Sun Air). Air Choice One and SeaPort once again proposed service with single

engine aircraft, which all four communities refused to waive their right to twin

- engine aircraft.

B lue Sky and Sun Air proposed service with larger aircraft but currently do not have the

authority from either the F ederal A viation A dministration or the Department to operate such

service. We, therefore, have no choice but to reject the current proposals and solicit another

round of proposals that meet the minimum EAS statutory requirements.

Request for Proposals

Air c arriers should file their proposals no later than April 10

, 2012 . After that date, our staff

will docket proposals, thereby making them public, and shortly afterwards will provide a

summary of the proposals to the communities and ask them for their final comments. We will

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

Interested air 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. We also retain the discretio n to reject

outright all unreasonable or unrealistic proposals and solicit a new round of proposals.

Carrier proposals should be submitted to the Department with all materials merged into a single

document. In addition, because the document will be publi shed on www.Regulations.gov , each

page should be formatted to be viewed online.

We are here providing interested carriers with some basic information to serve as guidance

when they prepare their proposals, but we wi ll not prescribe an exact 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; howeve r, 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 t he

affected community and the Department. 2

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

-- differe nt hubs, frequency or equipment, for example

-- 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 a service pattern that is desirable to

the communit y and meets the operational needs of the airline s

.

2 In selecting a carrier to provide subsidized Essential Air Service , 49 U.S.C. 41733(c)(1) directs us to consider

four 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; and (4) community views. In add ition, 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 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 p rovisions.- 3

-

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 pr ovided a summar y of historical passengers in Appendix B. W e expect service levels

that are c o mparable with what the community currently receive s , with service to Atlanta,

Memphis, Nashville or any large

- or medium

- hub that offers access to the national air

transportation system utilizing twin engine aircraft

. Specifically

, for proposals with 15

- seat or

larger aircraft, the Department expects proposals for three round trips each weekday and

weekend (1 8 a week)

. For 30

- seat or larger aircraft, we expect proposals for two round trips a

day (12 a week). For proposals with 8/9

- seat aircraft, we would expect proposals for four

round trips a day ( 24 a week). Should the community agree to single

- engine aircraft, in ef fect

waiving their right t o twin

- engine aircraft, we would consider the waiver to apply only to the

two

- year carrier

- selection at hand, i.e. we would not assume that the community would waive

its rights for all time. As always, we will formally solicit th e communit ies’ views on any

service options we receive before making a long

- term, carrier

- selection decision.

Given that we are requesting service to a total of four communities, carriers should be very

clear as to whether their proposals are for individual cities or part of a larger, inseparable

package.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying

activities, drug

- free workplaces and nondiscrimination. 3 Consequently, all air carriers

receiving Federal subsidy to support 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 t erm 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 r equiring 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 the se 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 April 10 , 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.

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 Civ il 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.- 4

-

ACCORDINGLY,

1. We request that ca rriers interested in providing Essential Air S ervice at Muscle Shoals, AL,

Greenville, MS, Hattiesburg/Laurel , MS, and/or Tupelo, MS, submit their proposals, with or

without subsidy requests, no later than April 10

, 2012 . The proposals should be emailed to:

EAS@dot.gov with the title “Proposal to Provide Essential Air Service at (specify the EAS

community and corresponding docket number from the first page) ; 5

2. The s e docket s will remain open until further o rder of the Departm ent; and

3. The Department will serve a copy of this Order on the M ayor s and Airport M anager s of the

above mentioned communities

, Capital Citizens Corp. d/b/a Blue Sky Airlines, Multi

- Aero Inc.

d/b/a Air Choice One, SeaPort Airlines

, Inc., Sun Air Express LLC., and t he 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 385.50, must file such petitions within ten (10) days

afte r the date of service of this Order

.

Thi s 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 line at

www.regulations.gov

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

.

### Appendix A



## Area Map

### APPENDIX B

Page 1 of 4

Historical Origin

- Destination Plane Traffic 1



### Muscle Shoals, Alabama

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per Day

3 2008 1,190 1,209 2,399 15

4 2008 1,552 1,573 3,125 20

1 2009 925 942 1,867 12

2 2009 1,094 1,161 2,255 14

Annual

Totals 4,761 4,885 9,646 15

3 2009 2,240 2,336 4,576 29

4 2009 2,397 2,455 4,852 31

1 2010 1,501 1,562 3,063 20

2 2010 2,071 2,194 4,265 27

Annual

Totals 8,209 8,547 16,756 27

3 2010 2,175 2,257 4,432 28

4 2010 2,561 2,661 5,222 33

1 2011 1,709 1,775 3,484 23

2 2011 1,866 1,915 3,781 24

Annual

Totals 8,311 8,608 16,919 27

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

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.

### APPENDIX B

Page 2 of 4

Historical Origin

- Destination Plane Traffic 1



### Greenville, Mississippi

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per Day

3 2008 1,360 1,443 2,803 18

4 2008 1,530 1,504 3,034 19

1 2009 965 1,026 1,991 13

2 2009 1,564 1,556 3,120 20

Annual

Totals 5,419 5,529 10,948 17

3 2009 2,075 2,154 4,229 27

4 2009 1,487 1,526 3,013 19

1 2010 1,055 1,088 2,143 14

2 2010 1,419 1,492 2,911 19

Annual

Totals 6,036 6,260 12,296 20

3 2010 1,852 1,928 3,780 24

4 2010 2,058 2,100 4,158 26

1 2011 1,390 1,488 2,878 19

2 2011 1,925 2,018 3,943 25

Annual

Totals 7,225 7,534 14,759 24

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

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.

### APPENDIX B

Page 3 of 4

Historical Origin

- Destination Plane Traffic 1



### Hattiesburg/Laurel, Mississ i ppi

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per Day

3 2008 2,987 2,899 5,886 37

4 2008 3,273 3,054 6,327 40

1 2009 2,553 2,166 4,719 31

2 2009 3,373 2,897 6,270 40

Annual

Totals 12,186 11,016 23,202 37

3 2009 4,087 3,885 7,972 50

4 2009 4,143 4,019 8,162 52

1 2010 3,230 2,928 6,158 40

2 2010 3,395 3,121 6,516 42

Annual

Totals 14,855 13,953 28,808 46

3 2010 3,777 3,645 7,422 47

4 2010 4,253 4,072 8,325 53

1 2011 2,974 2,876 5,850 38

2 2011 3,926 3,844 7,770 50

Annual

Totals 14,930 14,437 29,367 47

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

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.

### APPENDIX B

Page 4 of 4

Historical Origin

- Destination Plane Traffic 1



### Tupelo, Mississippi

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per Day

3 2008 3,861 3,873 7,734 49

4 2008 4,019 3,805 7,824 50

1 2009 3,189 3,254 6,443 42

2 2009 3,667 3,783 7,450 48

Annual

Totals 14,736 14,715 29,451 47

3 2009 3,114 3,121 6,235 39

4 2009 2,795 3,155 5,950 38

1 2010 2,480 2,380 4,860 32

2 2010 3,095 3,256 6,351 41

Annual

Totals 11,484 11,912 23,396 37

3 2010 3,631 3,631 7,262 46

4 2010 3,820 3,478 7,298 46

1 2011 2,736 2,733 5,469 36

2 2011 2,966 3,233 6,199 40

Annual

Totals 13,153 13,075 26,228 42

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

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.

### 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

outl ined 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 supporti ng 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 wi th 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 c arrier 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 cons ider 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

serv ice 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 pro vide 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 soli citation beyond [DATE] , is contingent

upo n 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 [DATE] , until funds are made available to the Departme nt 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

.