Order 2011-10-15

Served: October 20, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 20th day of October, 2011

ORDER PROHIBITING SUSPENSION OF SERVICE AND

REQUESTING PROPOSALS

Summary

By this order, the Department is: (a) prohibiting Chautauqua Airlines, Inc., a wholly

owned subsidiary of Republic Airways Holdings and doing business as Frontier Airlines

(Chautauqua) from suspending service at Rhinelander, Wisconsin; and (b) requesting 

proposals from carriers interested in providing essential air service (EAS) at Ironwood, 

Michigan/Ashland, Wisconsin (Ironwood); Manistee/Ludington, Michigan (Manistee); 

and/or Rhinelander for a two-year period, with or without subsidy. (See Appendix A for 

a service area map). Carriers should file their proposals no later than 

November 18, 2011.

Background

By Order 2011-1-16, January 22, 2011, the Department selected Chautauqua, utilizing 

37-seat Embraer 135 aircraft, to provide subsidized EAS at Ironwood and Manistee at a 

combined annual subsidy rate of $3,082,383. With the concurrence of both communities, 

under the authority in 49 U.S.C. § 40109, Order 2011-1-16 also allowed the carrier to 

cease operations at Ironwood and Manistee on 180 days’ notice to the Department and 

communities. Chautauqua inaugurated service at both communities on April 18, 2011. 

On September 12, 2011, Chautauqua filed a filed a 180-day notice of its intention to 

discontinue operations at Ironwood and Manistee, effective March 10, 2012.

At Rhinelander, Chautauqua is providing 13 nonstop round trips to Milwaukee using 37-

seat Embraer 135 aircraft. On the same date as the carrier’s 180-day notice described 

above, it also filed a 90-day notice of its intention to suspend its subsidy-free service at 

Rhinelander, effective December 11, 2012.

Essential Air Service at

IRONWOOD, MICHIGAN/ASHLAND, WISCONSIN

MANISTEE/LUNDINGTON, MICHIGAN

RHINELANDER, WISCONSIN

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

Docket DOT-OST-1996-1266

Docket DOT-OST-1996-1711

Docket DOT-OST-2011-0109
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Copies of the Chautauqua’s filings at each community may be accessed online through 

the Federal Docket Management System (FDMS) at http://www.regulations.gov/ by 

doing a search on the corresponding docket number for each community noted above.

Decision

Chautauqua’s proposed discontinuation of service would leave Ironwood, Manistee and 

Rhinelander with no scheduled service. At Rhinelander, the Department must prohibit 

the carrier from terminating such service at the end of its 90-day notice period, and 

require it to maintain 12 nonstop round trips per week to Milwaukee. We will also 

require Chautauqua to continue to maintain that level of service at Rhinelander for 

successive 30-day periods until we have completed processing the carrier-replacement 

case and the selected carrier has actually started full EAS. At Ironwood and Manistee

and as noted in Order 2011-1-16, the communities waived the normal hold-in 

requirements as described above. Therefore, Chautauqua may discontinue service at 

these two communities on March 10, 2012.1 However, as discussed in detail below, we 

will issue a request for EAS proposals at all three communities.

Request for Proposals

Carriers interested in providing service at Ironwood, Manistee and/or Rhinelander with or 

without subsidy, should file their proposals no later than November 18, 2011. Staff will 

then docket proposals, thereby making them public, and shortly afterwards will provide a 

summary of the proposals to the communities and ask them for their comments and 

preferences. We will give full consideration to all proposals filed in a timely manner.2

Interested carriers should prepare their proposals with every expectation that their initial 

proposals will represent their final and only proposals. However, we retain the discretion 

to negotiate proposals with carriers when we deem it desirable. We also retain the 

discretion to reject outright all unreasonable or unrealistic proposals and re-solicit a new 

round of proposals. However, negotiation and rejection are only occasional exceptions to 

the rule.

We are here providing interested carriers with some basic information to serve as 

guidance when they prepare their proposals, but we will not prescribe a precise format 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 might 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-

 1 Before suspending service, we expect Chautauqua to contact all passengers holding reservations for 

travel after the final date of service, to inform them of the change in service, and to assist them in arranging 

alternate transportation or provide a refund of the ticket price, without penalty.

2 Carriers should not expect the Department to accept late fillings. 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 typically do not proceed with the carrier-selection case. Instead, we simply rely on 

that carrier’s subsidy-free service as proposed.
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documented proposals that will facilitate their evaluation by the affected community and 

the Department.3

With specific respect to Ironwood and Rhinelander, the communities are guaranteed 

service with 15-seat or larger aircraft by virtue of their having averaged 11 or more 

enplanement per day in any year from 1976-1986 (49 U.S.C. § 41732 (b)(3)). 

Rhinelander has historically been a strong traffic-generating community, and, as such, is 

entitled to the maximum seat capacity under the EAS program of 67 seats per day 

inbound and 67 outbound. Therefore, we request proposals for four round trips a day (24 

a week) with 19-seat aircraft, three round trips a day (18 a week) with 30-seat aircraft, or 

two round trips a day (12 a week) with larger aircraft.

Ironwood averaged 2 - 5 enplanements per day from 2008-2010. Traffic increased 

dramatically after Chautauqua inaugurated service in April 2011. During the first four 

months after the carrier transition, May-June 2011, Ironwood generated a total of 2,979 

passengers, an average of 14 enplanements per day. Even with this dramatic increase, 

two round trips a day (12 a week) with 15-seat or larger aircraft are sufficient to easily 

accommodate these passenger levels. We would also entertain proposals with 8- or 9-

seat aircraft and three round trips a day (18 a week). If the Department receives 

proposals for 8- or 9-seat, and either community ultimately supports the service, in effect 

waiving its rights to 15-seat or larger aircraft, we would consider the waiver to apply only 

to the carrier-selection at hand, i.e. we would not assume that the communities would 

waive their rights in perpetuity. Further, if service with 8- or 9-seat aircraft is proposed, 

service from each community to the hub should be nonstop.

Manistee never averaged 11 enplanements per day in any year from 1976-1986; thus, it is 

not entitled to service with 15-seat or larger aircraft. More recently, from 2003-2010, the 

community averaged 5-11 enplanements per day. However, in the four months after 

Chautauqua began service, Manistee generated 12,090 totaled scheduled passengers, an 

average of 58 enplanements per day. For the past 30 years or so, Manistee has generally 

averaged fewer than 10 enplanements per day, but, in the last several months with the 

advent of Chautauqua’s two round trips a day with regional jets, it has averaged 58 

passengers per day, in each direction. These circumstances make it difficult to quantify 

the actual demand and, thus, the service levels that we should be willing to subsidize. 

Given that the EAS program ensures only a safety-net level of service, and not 

necessarily all the service that a community wants or thinks it deserves, we will request 

proposals for three or four round trips a day (18 or 24 a week) with 8- or 9-seat aircraft or 

two round trips a day (12 a week) with 15-seat or larger aircraft.

 3 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c) (1) directs us to to 

consider four factors: (a) scheduled service reliability; (b) contractual and marketing arrangements with a 

larger carrier to ensure service beyond the hub; (c) interline arrangements that the applicant has made with 

a larger carrier at the hub; and (d) community views, giving substantial weight to the views of the elected 

officials representing the users. In addition, the Consolidated Appropriations Act, 2008, Public Law 110-

161, provides that when selecting a carrier 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.
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The communities 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 communities, meets the 

operational needs of the airline, to Milwaukee, Detroit or Minneapolis or any other hub 

that provides access to the national air transportation system. In addition, carriers should 

be very clear as to whether a specific community’s proposal is on a stand-alone basis, or 

whether it is part of a larger, inseparable package with any other community. We 

encourage proposals that meet these requirements in an efficient manner. Carriers are 

also welcome to propose more than one service option, if they choose; they need not limit 

themselves to those requirements if they envision other, potentially more attractive 

service possibilities -- different hubs or length of service terms, for example -- with 

subsidy requirements that remain competitive.

New Filing Procedures

Carrier proposals should be submitted to the Department with all materials compiled into 

a single document. In addition, because the document will be published on 

http://www.regulations.gov/, each page should be formatted to be viewed online and for 

easy printing.

Service and Traffic History

In order to assist carriers in making their passenger and revenue forecasts, we have 

provided historical passenger traffic in Appendix B. During the year ended 

December 31, 2010, Ironwood averaged 2.3 enplanements per service day, Manistee 

10.8, and Rhinelander 79.8. We note that passenger levels at Ironwood and Manistee 

increased dramatically when Chautauqua inaugurated service on April 18, 2011, 

averaging 14 and 58 enplanements per day, respectively.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing 

lobbying activities, drug-free workplaces, and nondiscrimination.4 Consequently, all 

carriers receiving Federal subsidy for essential air service must certify that they are in 

compliance with Department regulations regarding drug-free workplaces 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. Because the Department is prohibited from paying subsidy to carriers 

that do not submit these documents, all carriers that plan to submit proposals involving 

subsidy should be aware that the selected carrier will be required to complete the required

certifications. Interested carriers requiring more detailed information regarding these 

requirements should contact the Office of Aviation Analysis at (202) 366-5903.5

 4 The regulations applicable to these areas are: (1) 49 CFR Part 20 -- New restrictions on lobbying; 

(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 activities 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 governmentwide requirements for drug-free workplace (grants).

5 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.
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Community and State Comments

The communities and States are welcome to submit comments at any time. We 

encourage prospective applicants to contact the communities before they submit their 

proposals so that they can tailor them to the communities’ needs, as they will not be able 

to amend them after the due date. As noted earlier, we will provide a summary of the 

proposals to the civic parties and ask them to submit their final comments shortly after 

November 18, the deadline for carrier proposals.

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

ACCORDINGLY,

1. The Department prohibits Chautauqua Airlines, Inc., a wholly owned subsidiary of 

Republic Airways Holdings and doing business as Frontier Airlines from suspending 

service at Rhinelander, Wisconsin, at the end of its 90-day notice period and requires it to 

maintain at least 12 nonstop round trips per week between the community and 

Milwaukee, Wisconsin, through December 11, 2012, or until a carrier capable of 

providing reliable air service begins full service, whichever comes first;6

2. We will allow Chautauqua Airlines, Inc., a wholly owned subsidiary of Republic 

Airways Holdings and doing business as Frontier Airlines to discontinue its scheduled air 

service at Ironwood, Michigan/Ashland, Wisconsin, and Manistee/Ludington, Michigan, 

as of March 10, 2012;

3. We request that carriers interested in providing essential air service at Ironwood, 

Michigan/Ashland, Wisconsin; Manistee/Ludington, Michigan; and/or Rhinelander, 

Wisconsin, submit their proposals, with or without subsidy requests, no later than 

November 18, 2011. The proposals should be e-mailed to: EAS@dot.gov with the title 

“Proposal to Provide Essential Air Service at Ironwood, Michigan/Ashland, Wisconsin; 

Manistee/Ludington, Michigan; and/or Rhinelander, Wisconsin” with the docket number 

corresponding to the communities as shown on the first page of this order;7

4. The Department directs Chautauqua Airlines, Inc., a wholly owned subsidiary of 

Republic Airways Holdings and doing business as Frontier Airlines 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 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 compensation for any claim that is not 

supported under the terms of this order;

 6 In accordance with 49 U.S.C. 41734(c), we will extend Chautauqua’s service obligation for successive 

30-day periods as necessary until full replacement service is provided.

7 Questions regarding filings in response to this order may be directed to Brian Swanson at (202) 366-5392 

or brian.swanson@dot.gov.
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5. These dockets will remain open until further order of the Department; and

6. We will serve copies of this order on the communities and the parties listed in 

Appendix D.

By:

SUSAN L. KURLAND

Assistant Secretary for Aviation

and International Affairs

(SEAL)

An electronic version of this document is available

at http://www.regulations.gov
Appendix A

AREA MAP

Airport Codes

DTW: Detroit Metropolitan Wayne County Airport

IWD: Gogebic-Iron County Airport (Ironwood, Michigan)

MBL: Manistee County Blacker Airport (Manistee, Michigan)

MKE: General Mitchell International Airport

MSP: Minneapolis – St. Paul International Airport

ORD: Chicago O’Hare International Airport

RHI: Rhinelander/Oneida County Airport

This map is provided by Sabre® AirVisionTM Profit Essentials and is being used with express permission of the 

copyright holder, Sabre Airline Solutions®.
Appendix B

Passenger Traffic

Ironwood/Ashland1

Year

Ended

Total Scheduled 

Passengers

Annual 

Enplanements3

Average Enplanements 

Per Service Day4 

31-Dec-03 4,574 2,287 7.3

31-Dec-04 5,769 2,885 9.2

31-Dec-05 6,405 3,203 10.2

31-Dec-06 6,622 3,311 10.6

31-Dec-07 826 413 1.3

31-Dec-08 2,905 1,453 4.6

31-Dec-09 2,290 1,145 3.7

31-Dec-10 1,445 723 2.3

Jan. - April 2011 1,044

May - Aug. 2011 2,979

Manistee/Ludington1

Year

Ended

Total Scheduled 

Passengers

Annual 

Enplanements3

Average Enplanements 

Per Service Day4 

31-Dec-03 2,917 1,459 4.7

31-Dec-04 3,941 1,971 6.3

31-Dec-05 3,951 1,976 6.3

31-Dec-06 5,551 2,776 8.9

31-Dec-07 6,004 3,002 9.6

31-Dec-08 4,044 2,022 6.4

31-Dec-09 5,472 2,736 8.7

31-Dec-10 6,760 3,380 10.8

Jan. - April 2011 2,399

May - Aug. 2011 12,090

Rhinelander2

Year

Ended

Total Scheduled 

Passengers

Annual 

Enplanements3

Average Enplanements 

Per Service Day4 

31-Dec-03 66,969 33,485 107.0

31-Dec-04 78,559 39,280 125.1

31-Dec-05 86,341 43,171 137.9

31-Dec-06 81,602 40,801 130.4

31-Dec-07 73,889 36,945 118.0

31-Dec-08 52,750 26,375 84.0

31-Dec-09 52,649 26,325 84.1

31-Dec-10 49,938 24,969 79.8

May - Mar. 2011 8,760

Notes:

1. Source: http://mdotwas1.mdot.state.mi.us/public/airportstats/

2. Source: US DOT Bureau of Transportation Statistics, Forms T-100 Market Report

3. Total scheduled passengers divided by two.

4. Average annual enplanements divided by 313 effective annual service days, except for annual 

periods ended 12/31/2004 and 12/31/2008 (314 effective annual service days).
Appendix C

Example of 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 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 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 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 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 

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 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 solicitation beyond [DATE]. The 

Department’s obligation for performance under this solicitation beyond [DATE] is contingent 

upon the availability of appropriated funds from which payment for services can be made. No 

legal liability on the part of the Department for any payment may arise for performance under 

this order beyond [DATE], until funds are made available to the Department for performance. If 

funds are not made available for performance beyond [DATE], 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.
Appendix D

SERVICE LIST

Air Greco/Wings Air Era Aviation, Lori Goodman Pacific Aviation Group, Craig Garrick

Air Sunshine, Inc. Executive Airlines, Kate Soled Pacific Aviation Group, Ron Rye

Air Sunshine, Mirmohammad Adili Frontier Airlines, Daniel Shurz Pacific Wings, Frank Ford

Air West, Inc., John Raatz Frontier Flying, Bob Hajducovich Pacific Wings, Greg Kahlstorf

Air Wisconsin, Annette Daly Frontline Aviation Penn Air, Danny Seybert

Air Wisconsin, Jim Rankin Gem Air, Dan Schroeder Penn Air, Scott Bloomquist

Airline Associates, Bill Mishk Gem Air, JoAnn Wolters Pinnacle Airlines, Jennifer Gammill

Alaska Airlines, Jeff Cole Great Lakes Airlines, Chuck Howell Pinnacle Airlines, Megan Rosia

Alaska Airlines, Sandy Sinick Great Lakes Airlines, Doug Voss Pinnacle Airlines, Phil Reed

Allegiant Air, Brian Davis Gulfstream, Dave Hackett Planemasters, Inc., John Kessler

American Airlines, Carl Nelson Gulfstream, Mickey Bowman Planemasters, Inc., Paul Berliner

American Eagle, Gary Foss Gulfstream, T. Cooper Planemasters, Inc., Todd DeSimone

American Eagle, Robert Emrich Homeland Security, Bill Ragan Raytheon, Mike Schiedt 

Atlantic Southeast, Jon Lindlief Homeland Security, David Bernier Rectrix, Aviation, Scott LaForge

Atlantic Southeast, Roger Weston Horizon Air, Dan Russo Saab Group, Polly Prelinger

Aviation Technologies/Charter Air Transport, 

Jim Gallagher Horizon Air, Jennifer Thompson Scenic, Mary Schneider

Bemidji Aviation, Arlen Rinkenberger Horizon Air, Mike McQeen Scenic, Mitzi Daines

Bemidji Aviation, Cori Rude Horizon Air, Jeff Cole Seaborne Airlines, Shawn Lewis

Cape Air, Andrew Bonney ICEPR, Luis Irizarry SeaPort Airlines, Daniel Helland

Cape Air, Dan Wolf Intrepid Internatl Air, Rick Eyk SeaPort Airlines. Rob McKinney

Cape Air, J. Flaherty Island Air Charters, Linda House Shuttle America, Jerry Balsano

Chautauqua, Josh Pascoe Jet Air, Daniel Wolford SkyWest, Brad Rawson

Classic Aviation, Tony Henderson Kenmore Air, Tim Brooks SkyWest, Eric Christensen

Colgan Air, Kevin Scott McCall Aviation, Dan Scott SkyWest, Michael Thompson

Colgan Air, Mike Colgan McCall Aviation, Michelle Sovereign Air, Bob Karns

CommutAir, Andy Price Mesaba, John Spanjers Sovereign Air, Lois R. Barton

CommutAir, Joel Raymond Mesaba, Max Shemesh Tatonduk, Robert Everts

Consultant, Mike Mooney Michigan DOT, Matt Brinker Tatonduk, Robert Ragar

Consultant, Robert Silverberg Midstar Airlines, Jeffrey Fonner Tradewind, Eric Zipkin

Continental, Bruce Keiner Republic Air Line, Greg Aretakis Transport Azumah, Joel AnabilahAzumah

Continental, Dan Weiss MN Aviation, Jose Maldonado Trans States, Fred Oxley

Continental, Lorry Halloway Multi Aero, Darnea Trans States, Gerry Wigmore

Delta Air Lines Anthony Canitano Multi Aero, Shane Storz United, Alicia Gabriel

Delta Air Lines, Dan Shuman Northern Air Cargo, David Karp United, James Starnes

Delta Air Lines, Dana Debel Northern Air Cargo, Eric Van Andel US Airways, Benjamin Slocum

Delta Air Lines, Jeff Davidman NYDC, Henok Araya US Airways, Howard Kass

Delta Air Lines, Jeff Morgan OST, Brian Swanson US Airways, Jason Reisinger

Delta Air Lines, Joe Esposito OST, Dennis DeVany Warbelows Air Ventures, Art 

Warbelow

Delta Air Lines, Kristal Murphy OST, Kevin Adams Gogebic-Iron County Airport, Duane 

DuRay

Delta Air Lines, Sally Veith OST, Kevin Schlemmer Manistee County Blacker Airport, 

Barry Lind

Delta Air Lines, Sascha Vanderbellen OST, Michael Martin Rhinelander/Oneida County Airport, 

Joseph Brauer

Delta Air Lines, Stephen A. Hedden Michigan Department of 

Transportation, Matthew Brincker

Dorado Jets

Dorado Jets, Mark McKenna