Order: 20 10

- 9

- 9 Served : September 8 , 2010


### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Issued b y the Department of Transportation on the 8 th of September , 2010
Essential Air Service at JOPLIN , MISSOURI F ORT LEONARD WOOD , MISSOURI
Under 49 U.S.C. 41731 et seq
. Docket DOT - OST - 200 6 - 23932 Docket DOT - OST - 1996 - 1167

ORDER SELECTING CARRIER S Summary By this order , the Department is s electing Executive Airlines d/b/a American Eagle Airlines (American Eagle) to provide essential air service (EAS) at Joplin , Missouri, for an annual subsidy of $2,778,756, for a two

- ye ar period beginning when the carrier inaugurates service. The Department is selecting Hyannis Air Service, Inc. d/b/a Cape Air (Cape Air) to provide EAS at Fort Leonard Wood , for an annual subsidy of $ 1,478,102, also for a two

- ye ar period beginning when the carrier inaugurates service

. An additional $959,664 in annual subsidy may be incurred when all

- cargo flights are used to transport luggage to/from Fort Leonard Wood. 1 Background In response to Great Lakes Aviation’s notice of intent to terminate its scheduled air service at Joplin and Fort Leonard Wood, the Department issued Order 2010

- 6

- 9, June 8, 2010, to solicit proposals from all interested air carriers to provide EAS at Joplin and/or Fort Leonard Wood. Proposal s In response to that order, we received proposals from four carriers: Alaska Juneau Aeronautics, In c. d/b/a SeaPort Airlines (SeaPort), Hyannis Air Service, Inc. d/b/a Cape Air (Cape Air), Executive Airlines d/b/a American Eagle Airlines (American Eagle), and Multi

- Aero, Inc. d/b/a Air Choice One (Air Choice One).
1 Such subsidy is calculated and distributed on a fiscal year basis, subject to th e availability of appropriated funds.SeaPort Airlines

SeaPort proposes to serve Fort Leonard Wood with two daily nonstop round trips to St. L ouis (14 total per week) and two daily nonstop round trips to Kansas City (14 total per week), utilizing 9

- passenger Pilatus PC

- 12 aircraft. Its first year subsidy request is $1,838,255, and its second year subsidy request is $1,888,509. Cape Air Cape Air has proposed service from Fort Leonard Wood to St. L ouis using 9

- passenger Cessna 402 aircraft. It proposes to operate four nonstop round trips each day (28 total per week) to St. Louis for an annual subsidy of $1,478,102. Depending on the communit y’s luggage demand, Cape Air proposes a combination of passenger and freighter service. The freighter service would only be used when required. As an example, if 70% of departures required the freighter service, it would result in an additional $959,664 in annual subsidy

. Am erican Eagle American Eagle proposes to ope rate two dail y nonstop round trips (14 total per week) from Joplin to Dallas/Fort Worth International Airport, for an annual subsidy rate of $2,778,756. American Eagle proposes to operate 66

- passenger ATR

- 72 aircraft. American Eagle requests the ability t o substitute, when needed, a 44

- passenger Embraer 140 or a 50

- passenger Embraer 145 aircraft, to be reimbursed at the same subsidy rate. American Eagle also requested that the DOT and Joplin waive the right to hold

- in upon issuance of a 120 day notice to terminate service. Air Choice One Air Choice One has proposed service to Joplin and Fort Leonard Wood. It would operate 9

- passenger Cessna Caravan aircraft to St. L ouis under all of its proposals. There are two options for Joplin

- four nonstop round trips each weekday and weekend (24 total per week) for an annual subsidy

of $2,054,483, or five nonstop round trips each weekday and weekend (30 total per week), for an annual subsidy of $2,442,623. There are three options for Fort Leonard Wood

– four non stop round trips each weekday and weekend (24 total per week) for an annual subsidy of $1,704,203, five nonstop round trips each weekday and weekend (30 total per week), for an annual subsidy

of $1,960,797, or six nonstop round trips each weekday and weeke nd (36 total per week), for an annual subsidy of 2,263,853. The complete proposal s of the four carriers may be accessed online at : http://www.regulations.gov/ by entering DOT

- OST

- 200 6

- 23932 ( Joplin ) or DOT

- OST

- 1996

- 1167 ( Fort Leonard Wood), in th e “Enter Key word or ID” field. Community and State Comments On July 26 , 2010 , we requested co mmunity co mment s regarding the carrier selection at Joplin and Fort Leonard Wood

. A summary of the comments received follows. Joplin In a l etter from the Airport Manager of Joplin Regional Airport , he states that the Joplin City Council “unanimously

endorses the bi d of American Eagle” providing two round trips per day toDallas/Fort Worth. The letter acknowledges American Eagle’s request to the Department to be

allowed to exit on 120 day s notice and the community has no objections. Fort Leonard Wood We received a joint letter from the City of Way nesville and the City

of Saint Robert stating the communities “were pleased by the caliber of the companies submitting proposa ls” and based on the review of the proposals and “discussions with Fort Leonard Wood officials, the Cities of Way nesville and St. Robert recommend the proposal submitted by Cape Air.” The communities told us that Cape Air’s proposal offered man y advantage s including an attractive proposed fare structure, on
- time performance and dependability record, the ability to add aircraft to meet additional demand, and the capability to offer a dedicated aircraft for cargo to meet baggage requirement of military

passe ngers. Airport Board members stated appreciat ion for the proposal and community

involvement from Air Choice One. The letter also stated that the Board felt the facilities could not support the non

- TSA model offered b y SeaPort. The Department also receiv ed a letter from the Chief of the Transportation Division at Fort Leonard Wood. It states that after reviewing and hearing proposals submitted by SeaPort, Air Choice One, and Cape Air, the Fort Leonard Wood Installation recommends Cape Air. Among the pro posal’s attractive features were Cape Air’s code share with American Airlines, interline e

ticketing and baggage agreements with other airlines at St. L ouis, comparable rates, and their ability to send more aircraft, if needed , for passengers and/or baggage. Itnoted Air Choice One’s comfortable and newer aircraft and lower basic prices, but w as concerned about the inability to move more than eight persons at a time and that the carrier onl y has an agreement with United Airline s, causing personnel to claim baggage and re

- ticket and re

- check baggage on all airlines other than United. Other letters In a July 27 letter to the Department , American Airlines (American) “enthusiastically supports” Cape Air’s proposal to serve Fort L eonard Wood

. American expects to expand its existing codeshare agreement with Cape Air into the Fort Leonard Wood market, “providing seamless booking and travel on American Airlines’ worldwide network. ” Decision The decision at Joplin is straightforward

. American Eagle’s proposal is the only one that meets the statutory

requirement for 15

- seat or larger aircraft, provides tic keting and baggage arrangements, and offers a large number of connecting opportunities to the national air transportation sy stem through American Airlines’ Dallas/Fort Worth hub. Further, American Eagle’s proposal is strongl y supported b y the community

. The subsidy requested is reasonable for the service provided. At Fort Leonard Wood, all three carriers propose 9

- seat aircraft

. Ho wever , only Cape Air’s propo s al offers interline ticketing and baggage agreements, including a code

- share with American Airlines , and the communit ies of Way nesville and Saint Robert and the Fort Leonard Wood Installation fully

support its proposal. Fort Leonard Wood is served through the Way nesville

- St. Robert Regional Airport at Forney Field, a joint military

/civilian use facility

. Although citizens and visitors to the neighboring communities use the facility , a large number ofpassengers using the air port are active

- dut y military personnel, and , in general, their luggage demands are larger (in terms of volume and weight) and their travel may be extremely

time

sensitive, more so than the general population of airline passengers. Cape Air’s proposal ad dresses this unique situation by providing freighter service when the greater luggage demands of Fort Leonard Wood passengers prohibit the carrier from transporting all passengers and baggage on a single flight. Finally , Cape Air has demonstrated reliabil ity at other communities it serves under the EAS program. We shall make th ese selection s at Joplin and Fort Leonard Wood contingent upon the Department’s receiving properl y executed certifications from American Eagle and Cape Air, that each carrier is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations concerning lobb yi ng activities. As a final matter, we expect Great Lakes to work together with American Eagle and Cape Air to ensure a smooth transition in service at the respective communities. In that regard, before Great Lakes suspends its service at Joplin and Fort Leonard Wood, we expect it to contact all passengers holding reservations for travel after the final date of s ervice, to inform them of the change in service, and to assist them in arranging alternate transportation or to provide a refund of the ticket price, without penalty , if requested. Carrier Fitness 49 U.S.C. 41737(b) requires that we find an air carrier fi t, willing, and able to provide reliable service before we may

subsidize it to provide essential air service

. American Eagle and Cape Air are sub

j ect to the Department’s continuing fitness requirements, and no information has come to our attention that wo uld cause us to question either carrier's fitness at this time. We have contacted the Federal Aviation Administration, and it has raised no concerns that would negativel y affect our fitness finding. We therefore conclude that the carrier s remain fit to c onduct the operations proposed here. This order is issued under authority delegated in 49 CFR 1.56a(f). ACCORDINGLY, 1. We select Executive Airlines d/b/a American Eagle Airlines to provide essential air service at Joplin , Missouri ; 2 . We set the final rate of compensation for Executive Airlines d/b/a American Eagle for the provision of essential air service at Joplin , Missouri , as described in Appendix C ; 3 . We direct Executive Airlines d/b/a American Eagle to retain all books, rec ords, and other source and summary

documentation to support claims for pay ment, and to preserve and maintain such documentation in a manner that readil y permits its audit and examination by representatives of the Department. Such documentation shall be re tained for seven ye ars 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 carrier may forfeit its compensation for any claim that is not supported under the terms of this order;4 . We find that Executive Airlines d/b/a American Eagle continue s to be fit, willing and able to

operate as a certificated carrier and capable of providing reliable essential air service at Joplin , M issouri ; 5. Under our authority

in 49 U

. S

. C

. 40109, w e will allow Executive Airlines d/b/a American Eagle to cease operations at Joplin on 120 days notice; 6

. We select Hyannis Air Service, Inc. d/b/a Cape Air to provide essential air service at Fort Leonard Wood, Missouri ; 7 . We set the final rate of compensation for Hyannis Air Service, Inc. d/b/a Cape Air for the provision of essential air service at Fort Leonard Wood, Missouri, as described in Appendix C; 8 . We direct Hyannis Air Service, Inc. d/b/a Ca pe Air to retain all books, records, and other source and summary

documentation to support claims for pay ment, and to preserve and maintain such documentation in a manner that readil y permits its audit and examination by representatives of the Department. Such documentation shall be retained for seven years 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 carrier may forfeit its compens ation for an y claim that is not supported under the terms of this order; 9 . We find that Hyannis Air Service, Inc. d/b/a Cape Air continues to be fit, willing and able to operate as a commuter carrier and capable of providing reliable essential air servi ce at Fort Leonard Wood, Missouri; 10

. Th ese docke ts will remain open until further order of the Department; and 1 1

. We will serve copies of this order on the mayors of Joplin, Way nesville, and Saint Robert, Missouri, personnel at Fort Leonard Wood, and the airport managers of Joplin Regional Airport and Way nesville

- S t. Robert Regional Airport, Executive Airlines d/b/a American Eagle, Hyannis Air Service, Inc. d/b/a Cape Air, Alaska Juneau Aeronautics, Inc. d/b/a SeaPort Airlines, and Multi

- Aero, Inc. d/b/a Air Choice One. By :

SUSAN L. KURLAND Assistant Secretary for Aviation and International Affairs (SEAL) An electronic version of this document is available on the Internet at http://www.regulations.govAppendix A



## AREA MAP

This map is provided by Sabre ® AirVision TM Profit Essentials and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Appendix B Page 1 of 2

Executive Airlines d/b/a American Eagle Airlines

Proposal to serve Jopli nAppendix B Page 2 of 2 Hyannis Air Service, Inc. d/b/a Cape Air Proposal to serve Fort Leonard WoodAppendix C Page 1 of 2 Executive Airlines d/b/a American Eagle Airlines Essential Air Service to be Provided at Joplin , Missouri Effective Period : Two ye ars beginning when American Eagle inaugurates service , through the end of the 24 th month thereafter Scheduled Service : 1 4 weekl y round trips t o Dallas/Fort Worth International Airport Intermediate stops and upline service : Service must be nonstop Aircraft : ATR

- 72, 66 seats ; Embraer 140, 44 seats ; or Embraer 145, 50 seats Rate per Eligible Flight: $ 1, 962 1 Weekly Ceilin g : $ 54,936 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 signific ant 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 operate its flights in full conformance with the order for a significant period, i t 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 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 th e 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 complete ly , 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 amounts or at the stipulated service levels, the carrier may cease to provide service to that specific location w ithout 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 w riting 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 order beyond September 30 , 20 10. The Government’s obligation for performance under this order beyond September 30 , 20 10 , is subject to 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 , 20 10 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30 , 20 10 , the Department will provide notice in w riting to the carrier. All c laims for payment must be submitted within 60 days of the last day of service provided under this order.

1 Annual compensation of $2,778,756 , divided by 1,416 annual departures (365 service days x 4 flights per service day x 97 percent completion)

. 2 28 flights per week multiplied by $ 1,962 per flight.Appendix C Page 2 of 2 Hyannis Air Service, Inc. d/b/a Cape Air Essential Air Service to be Provided at Fo rt Leonard Wood , Missouri Effective Period : Two ye ars beginning when Cape Air inaugurates service , through the end of the 24 th month thereafter Scheduled Service : 28 weekl y nonstop round trips to St. L ouis Intermediate stops and upline service: Service must be nonstop Aircraft : Cessna 402 , 9 seats or all

- cargo Rate pe r Eligible Flight: $ 506 1 (passenger); $470 2 (freighter

– as needed) Weekly Ceiling : $ 28,336 3 (passenger); $18,800 (freighter) 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 schedu led 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 question. If the carrier contemplates any such changes beyond the scope of th e 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 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 complete ly , 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 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 w riting 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 b e 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 , 20 10. The Governme nt’s obligation for performance under this order beyond September 30 , 20 10 , is subject to 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 , 20 10 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30 , 20 10 , the Department will provide notice in w riting to the carrier. All claims for payment must be submitted within 60 days of the last day of service provided under this order. 1 Annual compensation of $1,478,102 divided by 2,920 annual departures (365 service days x 8 flights per service day). Assumes 100 percent completion. 2 Per carrier proposal. See Appendix B, Page 2. 3 56 flights per week multiplied by $506 per flight. 4 4 0 flights per week multiplied by $470 per flight.