U.S.Department of Transportation Office ofthe Secretary ofTransportation

Mr. Francisco Torres President Air Charter, Inc. dbaAir Flamenco P.O. Box 224 Culebra, PR 00775
DearMr. Torres: Assistant Secretary
October 25, 2012 1200 New Jersey Ave.: S.E. Washington, DC 20590
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Thank youfor your letter ofSeptember 6, 2012, to SecretaryRay LaHood, regarding the Department's Small Community Air Service Development Program (the "Program" or "SCASDP"). In your letter, you express a number ofconcerns, including that a grant award made underthe Program was based on inaccurate information about the community's service needs, andthatthe air carrier contemplated for providing the service lacks suitable aircraft. Secretary LaHood asked me to respond to your letter.
As background, SCASDP was enacted in 2000 aspartofthe Wendell H. Ford Aviation Investment and Reform Act for the 21st Century to assist communities served by airports that are not larger than a small hub and thathave insufficient air carrier service orunreasonably high air fares. The criteria for participation and types ofassistance available under the Program canbe found inTitle 49 ofthe United States Code, at Section 41743. Awards are made to communities, not air carriers, and applications for the grants are solicited once each year through a Request for Proposal (RFP) published in the Federal Register (see 77 FR 28655, May 15, 2012, for this year's notice). Applications are received and grants are awarded through a public docket.
For fiscal year 2012, the Department was able to make available up to $14 million in grant awards underthe Program. A total of61 applications were received and evaluated, and ultimately the Department made awards to 33 communities. Among those was an awardto a consortium ofthe Puerto Rico Tourism Company and theRhode Island Airport Corporation to provide revenue guarantee support for seasonal service to Culebra, PR, from SanJuan, andto Block Island, RI, from Providence. Your concerns relate to this award. First, you state thatthe consortium's application incorrectly represented that Culebra did not have direct air service to the Luis Munoz Marin International Airport at San Juan (SJU), as Air Flamenco and other carriers fly the route. However, according to Air Flamenco's current website, AirFlamenco lists scheduled operations from Culebra to Isla Grande and Ceiba airports, but not to SJU. A similar check onthe website for Culebra airport did not show any scheduledPage2 flights to SJU. While AirFlamenco and others may operate charter flights, the grant would support new scheduled service.
You also contend thatthe consortium's application inaccurately stated thatthe residents of Culebra do nothave access to the mainland for medical, shopping, and professional reasons because Air Flamenco has a contract to provide lift for such needs. In fact, though, the relevant passage from the application stated that ''residents in Culebra need access to the mainland for medical, shopping, [and] professional reasons," and that "adirect service to the Luis Munoz MarinInternational Airport would provide another alternative for residentsto reach the mainland for their everyday necessities." This statement indicates that the consortium is seeking alternative, or additional, service, and hence we do not find a misrepresentation orinaccuracy in its statement

.. Another ofyour concerns relates to the fact that the proposed service maybe operatedby Cape Air, a carrierthatprovides Essential Air Service (EAS), and the RFP specifiedthat no funds wouldbe authorized to support additional flights by EAS carriers or changes to those carriers' existing schedules. However, any SJU-Culebra flights supported bythe grant would notbe ones under the EAS program. In addition, the language yourecited from the RFP is focused on additional flights by EAS carriers inthe EAS markets they serve, and Cape Air does not provide ' EAS at Benjamin RiveraNoriegaAirport (CPX).
You further assert that Cape Airlacks suitable aircraft for operations to Culebra. In a letter included in the docket from Cape Air, its Vice-President for Planning stated that, while Cape Air currently lacks suitable aircraft for short runways like those at Culebra, itis "nowpoisedto acquire" such aircraft. We took notice ofthis letter, but, as we stated above, SCASDP grants are awarded to communities and not to specific carriers. To accomplish this grant project, andto receive funding under SCASDP, the consortium will need to secure the SJU-Culebra service from a carrier able to safely operate at CPX.
Inyour letter, you also express concern aboutthe corporate leadership ofCape Air, arguing that having a state senator as a CEO creates a conflict ofinterest inthe operations ofCape Air. While it is not clear that this concern directly relates to the SCASDP selectionprocess, we have found no evidence ofany conflict ofinterest in the Department's grant selectionprocess. In addition, we notethat all members ofthe public

- including prospective grant applicants, air carrier management, and state and local officials

- have access to the same information. The. notice seeking SCASDP applications is published inthe Federal Register and posted onthe Program's website, andthe applications and all correspondence related to the applications are available on a public docket.I

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After considering your concerns, wehave found no basis to suspend the award ofthe grant as yourequested.
As isournormal practice, I amplacing a copy ofyour letter and this response inDocket DOT-OST-2012-0069 as a contact outside the record ofthis matter. Should youhave any further questions, please feel free to contact me.

Sincerely,

Susan 

### L. Kurland Assistant Secretary for Aviation and International Affairs