Order: 2015

- 4

- 17

Served: April 20, 201 5



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 20 th day of April, 20 1 5

Essential Air Service at

KEARNEY, NEBRASKA NORTH PLATTE, NEBRASKA SCOTTSBLUFF, NEBRASKA DOT

- OST

- 1996

- 1715

DOT

- OST

- 1999

- 5173

DOT

- OST

- 2003

- 14535

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



### ORDER SELECTING AIR CARRIER

Summary By this Order

, the United States Department of Transportation (the Department ) is re

selecting Great Lakes Aviation, Ltd. (Great Lakes) to provide E ssential Air Service (E AS )

at Kearney, North Platte, and Scottsbluff, Nebraska

, for a new contract term beginning April 1, 2015, through October 31, 2016. All three communities will receive two weekday and weekend nonstop round trips (12 per week) to Denver International Airport (DEN ) using 30

- passenger Embraer Brasilia EMB

- 120 (EMB

- 120) aircraft

. 1 Great Lakes will be compensated at annual subsidy rates of $ 1,998,178 for Kearney, $1,995,396 for North
Platte, and $ 1,764,806 for Scottsbluff

. 2

1 Great Lakes has informed the Department that EMB

- 120 will be introduced gradually at North Platte and Scottsbluff. Both communities will receive one round trip with the EMB

- 120 as of April 1, 2015, but the second round trip will be with 9

- passenger Beech craft 1900 aircraft. Great Lakes stated that they will

introduce the second EMB

- 120 round trip at North Platte on May 15, and at Scottsbluff on June 15.

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

-

Background By Order 2012

- 8

- 23 (August 20, 2012), the Department re

- selected Great Lakes , operating

as both a United Airlines and Frontier Airlines code

- share partner, to provide EAS at the

above

- mentioned communities for the two

- year term from November 1, 2012, through

October 31, 2014, for a combined annual rate of $4,848,765. Under that Order, Great Lakes provide d each community with three nonstop round trips (18 per week) to DEN with

9

- or 19

- passenger Beechcraft 1900D (Beech 1900D) aircraft.

By Order 2014

- 4

- 30 (April 29, 2014), the Depart ment requested proposals from air carriers interested in providing EAS at the three communities . In response, the Department received only proposal, from Great Lakes. On June 13, 2014, the Department solicited comments on Great Lakes’ proposal. All thre e communities responded, and requested that the Department reject the proposal and re

- solicit a new round of proposals.

By Order 2014

- 8

- 20 (August 28, 2014), the Department re

- solicited proposals from air

carriers interested in providing EAS at the thre e communities. In response to the Department’s request, four air carriers submitted proposals: Aerodynamics, Inc. (ADI), Boutique Air, Great Lakes, and Public Charters d/b/a Via Air LLC (Via Air)

.

Each air carrier’s complete proposal and community comm ents may be accessed online at www.regulations.gov by entering the community’s respective docket number in the search

block.

Proposal of ADI ADI submitted a proposal to serve all three communities with 12 nonstop round trips per week to DEN using 50

- passenger Embraer ERJ 145 (ERJ 145) aircraft. The combined annual subsidy for all three communities was proposed as $11,609,468 ($3,860,583 for Kearney, $4,144,698 for North Platte, and $3,604,187 for Scottsbluff). At the time ADI submitted their proposal, they were awaiting approval from the Department’s Air Carrier

Fitness Division (Fitness) to provide scheduled air service, a pre

- requisite for providing

basic EAS.

Proposals of Boutique Air Boutique Air submitte d a proposal to serve all three communities with single

- engine 9

- passenger Pilatus PC

- 12 aircraft . At Kearney, the airline proposed two options: 30 nonstop round trips per week to DEN for an annual subsidy of $3,903,978

, or 36 nonstop round trips per week to DEN for an annual subsidy of $4,807,926. 3 At North Platte, the airline proposed 24 nonstop round trips per week to DEN for an annual subsidy of $2,996,432. At Scottsbluff, the airline proposed 30 nonstop round trips per week to DEN

for an annual subs idy of $2,729,616.

3 The airline noted that, at their discretion, they may fly up to 50 percent of their frequencies to Kansas City International Airport, contingent on community support.- 3

-

Proposal of Great Lakes

Great Lakes submitted a proposal to serve all three communities with three options. All service would be to DEN and is contingent on Great Lakes being selected all three

communities. The ir proposal is summarized in the chart below

Great Lakes

– Option A

Community Annual Subsidy Aircraft Seats Stops Weekly Frequency Kearney $2,993,938 Beech 1900D 9 0 18

North Platte $2,818,163 Beech 1900D 9 0 18

Scottsbluff $2,443,523 Beech 1900D 9 0 18

Great Lakes

– Option B

Community Annual Subsidy Aircraft Seats Stops Weekly Frequency Kearney $2,034,866 Beech 1900D 19 0 18

North Platte $2,117,119 Beech 1900D 19 0 18

Scottsbluff $1,765,849 Beech 1900D 19 0 18

Great Lakes

– Option C

Community Annual Subsidy Aircraft Seats Stops Weekly Frequency Kearney $1,998,178 EMB

- 120 30 0 12

North Platte $1,995,396 EMB

- 120 30 0 12

Scottsbluff $1,764,806 E MB

- 120 30 0 12

Proposal of Via Air Via Air submitted a proposal to provide all three communities with 12 nonstop round trips per week to DEN using EMB

- 120 aircraft for a combined annual subsidy of $8,986,028 ($2,842,395 for Kearney, $3,572,932 for North Platte, and $2,570,701 for Scottsbluff). The proposal was contingent on Via Air being selected at minimum two out of the three

communities

. 4 It should be noted that Via Air does not have the requisi te authority from the Department’s Fitness Division to provide scheduled air service with the type of aircraft proposed. 5

Community Comments

On October 8, 2014

, the Department reque ste d comments from the communities regarding

this EAS air carrier

- selection case. In response, we received letters from the City of Kearney, the City of North Platte, and the City of Scottsbluff. All three communities supported the proposal put forth by ADI.

4 Via Air also noted that should the carrier be awarded all three EAS routes, the combined annual subsidy may be lowered by $982,788, assuming if North Platte agreed to one

- stop service on some of its frequencies.

5 See Order 2011

- 4

- 11 ( April 8, 2011 )

.- 4

-

The Honorable Stanley A. Clouse, Mayor of Kearney, stated in his letter that the service from the current EAS provide r, Great Lakes, has been unreliable for several months. The

Honorable Dwight Livingston, Mayor of North Platte, believed the upgra de to ERJ

- 145 aircraft would greatly enhance the community’s air service, and would have a lasting

beneficial effect on the overall economy of North Platte. The Honorable Randy Meininger, Mayor of Scottsbluff stated that the airport board’s unanimous support for ADI was critical to the economic revitalization of the airport and the region’s economy.

Decision

This EAS air ca rrier

- selection case is unusual and complicated. In many cases the Department would select the air carrier the communities support. Although ADI had yet to receive its authority to provide scheduled air service

, it s Fitness application was in the final

s tage for approval. However, in November 2014, the Department became aware of information that jeopardized ADI’s Fitness application for approval of interstate scheduled

air service authority . By Order 2015

- 1

- 16 (January 22, 2015) the Department issued an Order to Show Cause, tentatively finding that ADI’s application for interstate scheduled passenger authority should be denied and its interstate and foreign charter passenger

certificates should be revoked. 6

In light of this development, the Department communicated to the communities the following options for moving forward: 1) sub mit comments to the Department with respect to its tentative finding on ADI’s fitness and wait until the Department issues a final

decision on that matter ; 2) re

- evaluate the o ther air carrier proposals that were submitte d; 3) request that the Department issue another Order requesting a third round of proposals. In response, the communities communicated to the Department that they would support

Great Lakes ’ Option C

. 7

Theref ore, a fter reviewing each air carrier’s proposal and taking into account community feedback, the Department has decided to select Great Lakes to provide EAS at Kearney, North Platte, and Scottsbluff for a 19

- month contract term , from April 1, 2015, through October 31, 2016 . Great Lakes has the qualified support of each community, a key selection criterion. We also find the service and proposed subsidy to be reasonable. As compared to Boutique Air, Great Lakes requires significantly less subsidy at each

c ommunity. Regarding ADI and Via Air, as noted above, neither air carrier has the requisite economic authority from the Fitness Division to operate its proposed service.

The Department acknowledges that Great Lakes’ past service at the three commun ities h as not been satisfactory, although t he Department is aware that Great Lakes suffered serious operational problems over the past two years. Nevertheless, one of the EAS program’s responsibilities is to ensure reliable air service to all EAS communities. I n that regard, the

6 Se e docket DOT

- OST

- 2014

- 0114 for all information regarding ADI’s air carrier fitness case.

7 Originally, the communities stated they wanted a contract term from March 1, 2015, through February 29, 2016. Great Lakes, however, requested a contract term from April 1, 2015, through

October 31, 2016, to which the communities agreed.- 5

-

Department is reminding Great Lakes that poor service could cause a drop in passenger usage at the airports the airline serves, which could potentially jeopardize a community’s future eligibility in the EAS program. The Department expec ts that Great Lakes will use this selection as an opportunity to demonstrate, definitively, to the communities, as well as

to the Department, that it is committed to providing consistent, reliable air service.

The Department shall make this selection cont ingent upon its receiving properly executed

certifications from Great Lakes that it is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations concerning lobbying activities. 8

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that the Department find an air carrier fit, willing, and able to provide reliable service before the Department may subsidize it to provide EAS

. Great Lakes is subject to the Department’s continuing fitness requirements,

and no information has come to our attention that would cause us to question the air

carrier’s fitness at this time. The Department has contacted the Federal Aviation Administration, and it has raised no concerns that would negatively affect our fitness

findin gs. The Department therefore conclude s that Great Lakes is reliable and fit to conduct the operations proposed here.

This Order i s issued under authority delegated in 49 CFR Part 1

. 25a(b)

.

ACCORDINGLY,

1. The Department select s Great Lakes Aviation, Ltd. to provide Essential Air S ervice at Kearney, North Platte, and Scottsbluff, Nebraska

, and establish es the annual subsidy rate s as described in Appendix C ;

2

. The Department direct s Great Lakes Aviation, Ltd. 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 representatives of the Department. Such d ocumentation shall be retained for seven years from the service date of this Order 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 ca rrier s may forfeit their compensation for any claim that is not supported under the terms of this Order ;

3

. The Department f i nd s that Great Lakes Aviation, Ltd. is fit, willing and able to operate

as a commuter air carrie r
, and capable of providing relia ble Essential Air S ervice at Kearney, North Platte, and Scottsbluff, Nebraska ;

4

. Th ese docket s will remain open pending further Department action ; and

8 The certifications are available online under “Reports and Publications” at http://www.dot.gov/policy/aviation

- policy/small

- community

- rural

- air

- service/essential

- air

- service

.- 6

-

5

. The Department will serve a copy of this O rder on the mayors of Kearney, North Platte,

and Scottsbluff, Nebraska, the airport managers of Kearney Regional Airport and North Platte Regional Airport, and the airport director of Western Nebraska Regional Airport

, Aerodynamics, Inc., Boutique Air, Charter Air Transport Inc. d/b/a Via Air, LLC, and

G r eat Lakes Aviation, Ltd.

B y:

BRANDON M. BELFORD Deputy Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at www.regulations.govAppendix A



## AREA MAP

Maps generated by the Great Circle Mapper

- copyright © Karl L. Swartz

.Appendix B Page 1 of 3



### Great Lakes Proposal at KearneyAppendix B Page 2 of 3



### Great Lakes Proposal at North PlatteAppendix B Page 3 of 3



### Great Lakes Proposal at ScottsbluffAppendix C Page 1 of 5

Great Lakes Aviation, LLC

Essential Air Service to be provided at Kearney, Nebraska

DOT

- OST

- 1996

- 1715

Annual Subsidy : $ 1,998,178

Contract Term : April 1, 2015, through October 31

, 2016

Hub : Denver International Airport (DEN )

Scheduled Service : 12 non stop round trips per week to DEN

Aircraft : 30

- passenger EMB

- 120 Rate per Eligible Flight : $ 1,634 1
Weekly Ceiling: $ 39,216 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. T he 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 ques tion. If the carrier contemplates any such changes beyond the scope of the Order during the applicable period of this rate, it must first notify the Office of Aviation Analysis in writing and receive written approval from the Department to be ensured of f ull 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 traf fic 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 tra nsportation 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 service levels, the carrier may cease to provide service to that specific location without regards to any requirement for notice of such cessation. Those adjustments in the level s 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 contract are subject to, and incorporate by reference, relevant statutes and D epartment 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 Order beyond September 30, 2015

. The Government’s obligation for performance under this Order beyond September 30, 2015 , is subject to the availability of funds from which payment for

services can be made. No legal liability on the part of the Government for any paym ent may arise for performance under this order beyond September 30, 2015 , until funds are made available to the Department for performance. If sufficient funds are not made available for performance beyond September 30, 2015 , the Department will provide n otice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which compensation is being claimed. For example, claims for service provided in July must be filed b y October 31; August claims must be submitted by November 30, and so on.

1 Annual compensation of $1,998,178 divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98 percent completion).

2 24 arrival s and departures per week multiplied by $1,634 per flight.Appendi x C Page 2 of 5 Great Lakes Aviation, LLC Essential Air Service to be provided at North Platte, Nebraska

DOT

- OST

- 1999

- 5173

Annual Subsidy : $1, 995,396

Contract Term : April 1

, 2015, through May 15, 2015

Hub : Denver International Airport (DEN)

Scheduled Service : 12 nonstop round trips per week to DEN

Aircraft : 30

- passenger EMB

- 120 , 9

- passenger Beech 1900D Rate per Eligible Flight : $ 1,632 1 ; $1,536 2
Weekly Ceiling: $ 19,584 3 ; $ 18,432 4

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

supp orting 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 conformanc e 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 this rate, it must first notify th e 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 co nsider 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 se rvice 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 service levels, the carrier may cease to provide service to that specif ic location without regards 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 c essation of payment.

Subsidy contract 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 t o controvert the foregoing paragraph.

Funds may not be available for performance under this Order beyond September 30, 2015

. The Government’s obligation for performance under this Order beyond September 30, 2015 , is subject to the availability of funds f rom 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, 2015 , until funds are made available to the Department for performance. If suffic ient funds are not made available for performance beyond September 30, 2015 , 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 the

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.

1 Annual compensation of $1,995,396 divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98 percent completion).

2 Annual compensatio n of $2,818,163 divided by 1,835 annual dep artures (36 weekly departures x 52 weeks x 98 percent completion).

3 12 arrivals and departur es per week multi plied by $1,632 per flight.

4 12 arrivals and departur es per week multiplied by $1,536 per flight

.Appendix C Page 3 of 5

Great Lakes Aviation, LLC Essential Air Service to be provided at North Plat te, Nebraska

DOT

- OST

- 1999

- 5173

Annual Subsidy : $ 1,995,396

Contract Term : May 1 6

, 2015, through October 31

, 2016

Hub : Denver International Airport (DEN)

Scheduled Service : 12 nonstop round trips per week to DEN

Aircraft : 30

- passenger EMB

- 120

, 9

- passenger Beech 1900D Rate per Eligible Flight : $ 1,632 5
Weekly Ceiling: $ 39,168 6

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 the carrier does not schedule or ope rate 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 this rate, 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 pr ovide 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, te rminates 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 service levels, the carrier may ceas e to provide service to that specific location without regards 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 constitut e a total or partial reduction or cessation of payment.

Subsidy contract 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 ame ndments thereto shall not operate to controvert the foregoing paragraph.

Funds may not be available for performance under this Order beyond September 30, 2015

. The Government’s obligation for performance under this Order beyond September 30, 2015 , is sub ject to 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 September 30, 2015 , until funds are made available to the Dep artment for performance. If sufficient funds are not made available for performance beyond September 30, 2015 , 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 the 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.

5 Annual compensation of $1,995,396 divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98 percent completion).

6 24 arrivals and departures per week multiplied by $1,632 per flight.Appendix C Page 4 of 5 Great Lakes Aviation, LLC Essential Air Service to be provided at Scottsbluff, Nebraska

DOT

- OST

- 2003

- 14535

Contract Term : April 1, 2015, through June 15, 2015

Hub : Denver International Airport (DEN)

Scheduled Service : 12 nonstop round trips per week to DEN

Aircraft : 30

- passenger EMB

- 120 , 9

- passenger Beech 1900D Rate per Eligible Flight : $ 1,443 1 (EMB

- 120), $ 1,332 2 (Beech 1900D) Weekly Ceiling: $ 17,316 3 (EMB

- 120), $ 15,984 4 (Beech 1900D)

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, suc h 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 this rate, it must first notify the Office of Aviation Analysis in writing and receive written approval fr om 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 exte nt 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 fo r under this Order, then, at the end of the period for which the Department does make payments in the stipulated service levels, the carrier may cease to provide service to that specific location without regards to any requirement for notice of such cessat ion. 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 contract are subject to, and incorporate b y 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 pe rformance under this Order beyond September 30, 2015

. The Government’s obligation for performance under this Order beyond September 30, 2015 , is subject to the availability of funds from which payment for

services can be made. No legal liability on the p art of the Government for any payment may arise for performance under this order beyond September 30, 2015 , until funds are made available to the Department for performance. If sufficient funds are not made available for performance beyond September 30, 2 015 , 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 the month for which compensation is being claimed. For example, claims for servic e provided in July must be filed by

October 31; August claims must be submitted by November 30, and so on.

1 Annual compensation of $1,764,806 divide d by 1,223 annual departures (24 weekly departures x 52 weeks x 98 percent completion).

2 A nnual compensation of $2,443,523 divided by 1,835 annual departures (36 weekly departures x 52 weeks x 98 percent completion).

3 12 arrivals and departures per week mu ltiplied by $1,443 per flight.

4 12 arrivals and departur es per week multiplied by $1,332 per flight.Appendix C Page 5 of 5 Great Lakes Aviation, LLC Essential Air Service to be provided at Scottsbluff, Nebraska

DOT

- OST

- 2003

- 14535

Annual Subsidy : $ 1,764,806

Contract Term : June 16

, 2015, through October 31

, 2016

Hub : Denver International Airport (DEN)

Scheduled Service : 12 nonstop round trips per week to DEN

Aircraft : 30

- passenger EMB

- 120 Rate per Eligible Flight : $ 1,443 5
Weekly Ceiling: $ 34,632 6

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 comple ted, 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 this rate, it must first notify the Office of Aviation Analysis in writing and receive written app roval 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 pro vided for under this Order, then, at the end of the period for which the Department does make payments in the stipulated service levels, the carrier may cease to provide service to that specific location without regards to any requirement for notice of suc h 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 contract are subject to, and incor porate 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 availabl e for performance under this Order beyond September 30, 2015

. The Government’s obligation for performance under this Order beyond September 30, 2015 , is subject to 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 September 30, 2015 , until funds are made available to the Department for performance. If sufficient funds are not made available for performance beyond Septemb er 30, 2015 , 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 the month for which compensation is being claimed. For example, claims fo r service provided in July must be filed by

October 31; August claims must be submitted by November 30, and so on.

5 Annual compensation of $1,764,806 divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98 percent completion).

6 24 arrivals and de partures per week multiplied by $1,443 per flight.