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To: "fbo.iwdgichaiteintemet.com": "thowenSS-jaJhotmail.com": "aiiDOtt^deltacountvmi.org" 

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"buichellfflicitvofiionwood.oro"; "fotmhousebigichaitenntefnet.com": 'ochevesgiescanaba.OfQ" 

Cc: 'aea t Lakes, Chuck Howeir; "Zacharv. Karen R": "Van der Be)en. Atexandet": ''fci727": 'Jon Payne": Devany. 

Dennis fOSTi 

Subject: Sotcittng Comments on EA5 bids at ESC, IMT, IWD and MBL 

Date: Tuesday, March 30, 2010 3:05:24 PM 

AU: 

I would like to update you on the Essential Air Service (EAS) situation at: Escanaba 

(ESC), Iron Mountain/Kingsford (IMT), Ironwood/Ashland (IWD), and Manistee/Ludington 

(MBL), and give you an opportunity to submit comments if you wish. 

In anticipation of the end of Mesaba's and Great Lakes' current contracts, the 

Department issued Order 2010-2-18 on February 19, 2010, synchronizing the contract end 

dates (to August 31) at the four communities and soliciting proposals from all interested air 

carriers to provide EAS at any or all of the communities, for a new two-year term. In 

response to that order, we received proposals from: the incumbent carriers (Mesaba and Great 

Lakes), Charter Air Transport and Sovereign Air. 

We have directed each carrier to serve its proposal on you. Copies of the proposals 

may also be accessed online through the Federal Docket Management System at: 

http://www.regulations.gov, by doing a simple search on by doing a search on Dockets: 

DOT-OST-2003-15128 (ESC), DOT-OST-1999-5175 (IMT), DOT-OST-1996-1266 (IWD), 

and/or DOT-OST-1996-1711 (MBL). For your convenience, each carrier's proposal is briefly 

summarized below. 

As summarized in the table below, Mesaba, d/b/a Delta Connection, submitted a threeservice option proposal, utilizing 34-passenger Saab 340 aircraft, to provide EAS at IMT and 

ESC only. Options 1 and 2 can be combined for an annual subsidy rate of approximately 

$4.485M. 
Option 

# 

1 

2 

3 

Community 

ESC 

IMT 

ESC and IMT 

Weekly round 

trips 

14 (nonstop) 

14 (nonstop) 

21 (one-stop & 

nonstop) 

Hub 

Served 

Detroit 

Minneapolis 

Detroit and 

Minneapolis 

Annual 

Subsidy 

Requirement 

$2,310 M 

$2,176 M 

$4,181 M 

Great Lakes submitted a four-community package bid {all or nothing) for service to 

Milwaukee (where it will utilize its code-share agreement with Frontier Airlines) with 19-

passenger Beech 1900D aircraft. Its proposed service levels for each community and annual 

subsidy requirement are summarized below 

Community 

ESC 

IMT 

IWD 

MBL 

Weeldy 

round trips 

18 

18 

14 

14 

Annual Subsidy Requirement 

Service pattern notes 

no restrictions upline 

no restrictions upline 

one-stop authority over IMT, ESC or 

Rhinelander, Wisconsin. 

no restrictions upline 

$6,471 M 

Charter Air Transport submitted a proposal with seven options. Each option stands on 

its own and can be combined with other options utilizing additional aircraft. Its proposed 

service levels for each community and armual subsidy requirements are summarized below. 

Option 

# 

1 

2 

Community 

ESC 

MBL 

IWD 

IMT 

Aircraft type 

(pax seats) -

upline service 

Embraerl20(30)-

shared with MBL 

Embraerl20(30)-

shared with ESC 

Embraer 120(30)-

shared with IMT 

Embraer 120 (30)-

shared with IWD 

Weekly 

round trips 

18 (one-stop 

and nonstop) 

12 (one-stop 

and nonstop) 

12 (one-stop 

and nonstop) 

12 (one-stop 

and nonstop) 

Hub 

Served 

Milwaukee 

Annual 

Subsidy 

Requirement 

$3,477 M 

$3,173 M 
Option 

# 

3 

4 

5 

6 

7 

Community 

ESC 

MBL 

MBL 

IWD 

IMT 

Aircraft type 

(pax seats) 

Embraer 120 

(30) 

BAE 3200 

Jetstream 

(19) 

BAE 3200 

Jetstream 

(19) 

BAE 3200 

Jetstream 

(19) 

Embraer 120 

(30) 

Weekly 

round trips 

12 

(nonstop) 

12 

(nonstop) 

12 

(nonstop) 

12 

(nonstop) 

12 

(nonstop) 

Hub 

Served 

Milwaukee 

Chicago -

Midway 

Milwaukee 

Annual 

Subsidy 

Requirement 

$2,254 M 

$1,746 M 

$1,899 M 

$1.918M 

$2,254 M 

Sovereign Air's proposal, utilizing I2-seat King Air 350 aircraft with service to 

Chicago-O'Hare is summarized in the table below. 

Community 

ESC 

MBL 

IWD 

IMT 

Weekly round trips 

28 

(one-stop and nonstop) 

28 

(one-stop and nonstop) 

28 

(one-stop and nonstop) 

28 

(one-stop and nonstop) 

Annual 

Subsidy 

Requirement 

$2,462 M 

$2,147 M 

While Sovereign Air notes that its proposed aircraft can accommodate 15-seats, as 

currently configured, its aircraft does not meet the I5-or-more-passenger-seat standard 

required by our governing statutes (49 U.S.C. § 41732(b)(3) and (b)(6)) at ESC, IWD, and 

IMT. If the communities indicate their willingness to waive their right to receive EAS with 

pressurized aircraft with 15 or more passenger seats, we will consider the wavier to apply 

only to the new term under consideration at this time. (I.e., we would not assume that the 

communities waive their rights in perpetuity.) Further, Sovereign Air does not currently have 

the requisite operating authority from either the Department or the Federal Aviation 

Administration to provide scheduled air service, although it has submitted applications. 

Please note that the average passenger fares shown in each proposal do not necessarily 

reflect the average local fare passengers would actually pay, but, rather, reflect a prorated 

portion of the total ticket price (e.g., the ESC - Milwaukee portion of an ESC - Milwaukee -

Washington D.C. ticket) that the subsidized carrier would realize. Also, the fare shown is net 

of certain charges such as Federal transportation security fees, excise or ticket taxes, and 

Passenger Facility Charges. Of course, carriers have the discretion to charge fares they deem 
appropriate, and the passenger fares presented in their proposals have been developed for 

subsidy rate computation purposes only. Based on the cost elements incorporated in the 

carriers' computation summaries, the carriers would have to realize passenger fares 

comparable to the averages shown in their proposals in order to achieve break-even or 

profitable operations without subsidy. 

You should also note that the carriers' schedules may change to reflect changing 

conditions (e.g., to better meet shifting connecting bank times at the hub). The Department 

does expect subsidized air carriers to maintain well-timed and well-spaced flights in order to 

ensure full compensation. 

We request that you submit any comments you may have as soon as possible, but in any 

case no later than April 23, 2010. Please send your comments by fax to 202-366-7638 or by 

email to both dennis.devanv@dot.gov and brian.swanson@dot.gov. Our rules require that 

you send your comments to each applicant as well. If you have any questions, or need more 

time to reply, please feel free to contact Brian Swanson of my staff at 202-366-5392. 

Sincerely, 

Dennis J. DeVany 

Chief, Essential Air Service Division, X-53 

Office of Aviation Analysis