Order 20 10

- 5

- 26

Served: May 24 , 20 10



### UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 24 th day of May , 20 10

Essential Air Service at

HURON, SOUTH DAKOTA

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 2000

- 7138



### ORDER REQUESTING PROPOSALS

Summary By this order, the Department is requesting proposals , by June 2 8

, from carriers interested in providing essential air service (EAS) at Huron, South Dako ta

, for a new two

- year period beginning October 1 , 20 10 , with or without subsidy. (See Appendix A for map.)

Background By Order 2008

- 7

- 34

, July 31 , 200 8 , the Department selected Great Lakes Aviation, Ltd. ( G reat
Lak es )

, to continue provid ing EAS at Huron for the two

- year period through September 3 0

, 20 10 . That order established an annual subsidy rate of $1, 78 1

, 733 for s ervice consist ing of 1 2

nonstop or one

- stop round trips per week to Denver with 1 9

- seat Beech 1900D aircraft

.

Request for Proposals

As t he 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 Huron , with or without subsidy support, for the

two

- year period beginning October 1, 20 10 . Carriers should file their proposals no later than

June 2 8 . After that date , our staff will docket 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 communit y officials and ask them to- 2

-

submit their final comments. We will give full consideration to all proposals filed in a time ly

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. We a lso retain the discretion to reject outright all unreasonable or unrealistic proposals and solicit a new round of proposals.

We are here providing interested carriers with some basic information to serve as guidance, but we will not prescribe a precise fo rmat 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 mi ght 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 affecte d community and the Department. 2

Proposals should offer service with sufficient capacity to accommodate historical levels of

traffic , i.e. two round trips per day (12 a week) and, at a minimum, should be provided with two

pilot, twin

- engine aircraft with at least 15 passenger seats, unless the communit y agree s to
smaller aircraft. In that event, we would also consider proposals for three round trips a day (18 a week) with eight

- or nine

- seat aircraft. If aircraft with fewer than 15 passenger seats are

co ntemplated, service patterns should consist of nonstop service between the community and the proposed hub airport

. If a proposal offering aircraft fewer than 15 seat s is submitted and the community support s the service, in effect waiving its right to 15

- s eat or larger 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 commu nity waive s its rights for all time. Of course, as always, we will formally

solicit the communit y’s views on any service options we receive before making a long

- term
carrier selection decision. The communit y 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

a nd meets the operational needs of the airline interested in submitting a proposal. 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, for example

-- with subsidy requirements that remain competitive.

1 Carriers should not exp ect the Department to accept late filings. 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 ca se. Instead, we simply rely on that carrier’s subsidy

free service as proposed.

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 m arketing arrangements with a larger carrier at the hub; (3) interline arrangements with a larger carrier at the hub; and (4) community views. In addition, the Consolidated Appropriations Act, 2008, Public Law 110

- 161 , provides that when selecting a carrie r 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 provisions.- 3

-

Service and Traffic History

Great Lakes has served Huron since October 2006 and traffic has almost doubled since the

carrier inaugurated service. In 2009, Huron generated 4

, 331 O&D passengers, averaging 6

. 9 enplanements a day . That is s ligh t ly lower than the 4,762 passengers, or 7.6 daily enplanements, it generated in 2008. In order to assist carriers in developing traffic and revenue projections for their proposals, we have summarized historical passengers in Appendix B.

New Filing Procedures Carrier proposals should be submitted to the Department with all materia ls 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 statute s 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 wo rkplaces 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 An alysis 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 wi ll provide a summary of the proposals to the civic parties and ask them to submit their final comments shortly after June 2 8 , the due date for carrier proposals.

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

- delegated to the

Dir ector, Office of Aviation Analysis.

ACCORDINGLY, 1. We request that carriers interested in providing essential air service at Huron, South Dakota

, submit their proposals, with or without subsidy requests, no later than June 2 8 , 20 10 . The

3 The regulations applicable to these areas are: (1) 49 CFR Part 20

– New restrictions on lobb ying; (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 activi ties 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 requir ements for drug

- free workplace (grants).

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

-

proposals shou ld be emailed to: EAS@dot.gov with the title “Proposal to Provide Essential Air

Service at Huron, South Dakota , Docket DOT

- OST

- 200 0

- 7 138 ”; 5

2. Docket s DOT

- OST

- 200 0

- 7 138 will remain open until further order of the Depa rtment; and

3. The Department will serve a copy of this order on the mayor and airport manager of Huron

, Great Lakes, Ltd.

, and the parties listed in Appendix D.

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

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 line at www.regulations.gov

5 Questions regarding filings in response to this order should be directed to Renée Williams at 202

- 366

- 1058, or v ia

email at renee.williams@dot.gov . Parties may call 202

- 366

- 5903 to confirm receipt of their EAS proposals.

### Appendix A



## Area Map

### Appendix B

Historical O&D Traffic and Average Daily Enplanements at Huron, South Dakota 1



### Average Daily

O&D Traffic Enplanements 2



### 1Q09 976 6.3

2Q09 1,024 6.6
3Q09 1,066 6.7
4Q09 1,265 8.0

2009 Totals: 4,331 6.9

1Q08 1,150 7.4

2Q08 1,255 8.0

3Q08 1,361 8.6

4Q08 996 6.3

2008 Totals: 4,762 7.6

________________________________ 1 Source: Bureau of Transportation Statistics; TranStats Form 41 , Schedule T

- 1 00

. 2 Daily averages are based on one

- half of the O&D passengers

, divided by 3 13 service days (314 during leap years).

### 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 se rvice 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 expl anation 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 ful l 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 f irst 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 thes e 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 Depa rtment 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 p ayments 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 co nstitute 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 3 0, 2010, is contingent upon 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 fu nds are made available to the Department for performance. If funds are not made available for performance beyond September 30, 2010, 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.

### App endix D

Scheduled Air Carriers, Contiguous US and Puerto Rico

Air Greco/Wings Air Air Sunshine, Inc. Air Sunshine, Mirmohammad Adili Air Wisconsin, Annette Daly Air Wisconsin, Jim Rankin

Airline Associ ates, Bill Mishk Alaska Airlines, Jeff Cole Alaska Airlines, Sandy Sinick Allegiant Air, Brian Davis American Airlines, Carl Nelson American Eagle, Jeffrey Hartz Bemidji Aviation, Cori Rude Bemidji Aviation, Arlen Rinkenberger Cape Air, Andrew Bo nney Cape Air, Dan Wolf Cape Air, J.Flaherty Colgan Air, Kevin Scott Colgan Air, Mike Colgan CommutAir, Andy Price CommutAir, Joel Raymond Consultant, Robert Silverberg Continental, Bruce Keiner Continental, Dan Weiss Continental, Lorry Hallow ay Delta, Anthony Canitano Delta, Dan Shuman Delta, Jeff Morgan Delta, Joe Esposito Delta, Karen Zachary Delta, Kristal Murphy Delta, Sascha Vanderbellen DHS, Bill Ragan DHS, David Bernier Era Aviation, Mike Lenorman Executive Airlines, Kate Soled fford@pacificwings.com Frontier Flying, Bob Hajducovich GemAir/Salmon Air, Dan Schroeder GemAir/Salmon Air, JoAnn Wolters Great Lakes, Chuck Howell Great Lakes, Doug Voss Great Lakes, Greg Stephens Gulfstream, Dave Hackett Gulfstream, Micke y Bowman Gulfstream, T. Cooper Horizon Air, Dan Russo Horizon Air, Jennifer Thompson Horizon Air, Mike McQueen Horizon, Jeff Cole ICEPR, Luis Irizarry Intrepid Interntl Air, Rick Eyk Island Air Charters, Linda House Jet Air, Daniel Wolford

Kenmo re Air, Tim Brooks Mesa Air, Michael Lotz Mesaba, John Spanjers Mesaba, Max Shemesh Midwest Airlines, Greg Aretakis MN Aviation, Jose Maldonado Multi Aero, Darnea Multi Aero, Shane Storz Northwest Airlines, Aaron Murray Northwest, Tim McDonald NYDC, Henok Araya OST, Brian Swanson OST, Dennis DeVany OST, Kevin Adams OST, Kevin Schlemmer OST, Michael Martin OST, Renee Williams Pacific Wings, Greg Kahlstorf PenAir, Danny Seybert PenAir, Scott Bloomquist Pinnacle Airlines, Joe Williams Pinnacle Airlines, Phil Reed Planemasters, Inc., John Kessler Planemasters, Inc., Paul Berliner Planemasters, Inc., Todd DeSimone Public Charters, Jim Gallagher Scenic, Mary Schneider Scenic, Mitzi Daines SeaPort/Wings of Alaska, Jim Day

SeaPort /Wings of Alaska, Nate Vallier Seaport/Wings of Alaska, Rob McKinney Shuttle America, Jerry Balsano SkyWest, Eric Christensen SkyWest, Michael Thompson SkyWest, Steve Hart Sovereign Air, Bob Karns Sovereign Air, Lois R. Barton Tradewind, Eric Zipk in Trans States, Fred Oxley Trans States, Gerry Wigmore United, Alicia Gabriel United, James Starnes US Airways, Benjamin Slocum US Airways, Howard Kass US Airways, Jason Reisinger Warbelows Air Ventures, Art Warbelow