Order 2012

- 3

- 16

Served: March 23 , 2012



### UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 23rd day of March , 2012

ORDER REQUESTING PROPOSALS

Summary By this O rder, the Depa rtment is requesting a second round of proposals from carriers interested in providing Essential Air Service ( EAS ) at Hagerstown , Maryland, and/or
Lancaster, Pennsylvania, through September 30, 2015

, with or without subsidy. (See Appendix A for a service area map )

. Carriers should file their proposals no later than April 26

, 2012.

Background

On February 14 , 201 2

, the President signed the FAA Modernization and Reform Act of

2012

, (P. L. 112

- 95 ) . T h is law, among other t hings, extend ed both communities’ eligibility for subsidized EAS through September 30, 2015

.

By Order 2012

- 2

- 13, February 17, 2012, the Department extended the contract of Hyannis Air Service, Inc. d/b/a Cape Air (Cape Air) to provide subsidized EAS at Hagerstown and Lancaster until further notice 1 and requested proposals from carriers interested in providing EAS at Hagerstown and/or L ancaster, through September 30, 2015

, with or without subsidy. Proposal s were due on March 1 5, 2012; however, no proposal s were submitted. As a result, the Department is requesting proposals a second time from carriers interested in providing service at Hagerstown and/or Lancaster, with or without subsidy, through September 30, 2015.

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated

funds. Essential Air Service at

HAGERSTOWN, MARYLAND LANCASTER, PENNSYLVANIA

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 2006

- 25228
DOCKET DOT

- OST

- 2002

- 11450- 2

-

Request for Proposals Carriers should file their proposals no later than April 2 6

, 2012

. 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 final comments. We will give full consideration to all proposals that are timely filed. 2

Interested car riers 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

d iscretion 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 infor mation 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 app licants 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 str ongly encourage clear, well

documented proposals that will facilitate their evaluation by the affected communit ies and the Department. 3

Specifically, for service with 19

- seat or larger aircraft, we expect proposals for two round trips a day (12 a week) to Washington, Pittsburgh, New York, or any other large or medium hub airport offering numerous connections to the national air transportation system. If 8/9

- seat aircraft are proposed, we would expect four or five round trips a day (24 or 30 a week) to mai ntain the current level of service

. 4

The communities and air carriers are encouraged to work together in advance of the due date for proposals to craft a service patter n that is desirable to the communities and meets

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.

3 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c) (1) directs us 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 ap plicant 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 w hen selecting a carrier to provide EAS, the Department may consider the relative subsidy requirements

. Interested carriers should also be aware that our general provisions governing EAS will be included in the selection order as part of our authorization of subsidy for the selected service. Appendix C of this order contains those general provisions.

4 Previously, most EAS communities were entitled to service with 15

- seat or larger aircraft. However, for

FY 2012, Congress revoked the minimum requirement t hat basic EAS include service with at least 15

- seat or larger aircraft. See Consolidated and Further Continuing Appropriations Act, P.L. 112

- 55,

November 18, 2011. Communities are still entitled to service with twin

- engine aircraft.- 3

-

the operational need of the airline in terested in submitting a proposal. 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 other communities

.

Service and Traffic History In order to assist carriers in developing traffic and revenue projections for their proposals, we have summarized historical passenger traffic in Appendix B. For the year ended Septe mber 30, 20 11 , Hagerstown averaged 11 enplanements a day

, and Lancaster, 20

.

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.

Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces, and no ndiscrimination. 5 Consequently, all

carriers receiving Federal subsidy for Essential Air S ervice 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 c arriers 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. 6

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 Apr il 2 6 , the deadline for carrier proposals.

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

5 The regulations app licable 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

-- Gover nment

- wide debarment and suspension (non

- procurement) and government

wide requirements for drug

- free workplace (grants).

6 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.- 4

-

ACCORDINGLY,

1 . We request that ca rriers interested in providing Essential Air S ervice at Hagerstown, Maryland

, and/or Lancaster, Pennsylvania , submit their proposals, with or without subsidy requests, no later than April 26

, 2012. The proposals should be e

- mailed to: EAS@dot.gov with the title “Proposal to Provide Essential Air Service at Hagerstown, Marylan d

, and/or Lancaster, Pennsylvania ” with the docket number corresponding to the

communit ies as s hown on the first page of this O rder; 7

2 . Dockets DOT

- OST

- 2006

- 25228 and 2002

- 11450 will remain open until further order of the Department; and

3

. We will serve copies of this O rder on the parties listed in Appendix D

.

Persons entitled to petition the Department for review of this order under the Department’s Aviation Economic Regulations, 14 CFR 385.50, must file such petitions within ten (10) days after t he date of service of this order.

This order will be effective immediately, and the filing of a petition for review shall not preclude its effectiveness.

By:

TODD M. HOMAN

Director Office of Aviation Analysis

(SEAL)

An electronic version of this document is available online at www.regulations.gov

7 Questions regarding filings in res ponse to this order may be directed to Brian Swanson at (202) 366

- 5392

or brian.swanson@dot.gov

.

### Appendix A

AREA MAP

### Appendix B

Notes : 1. Source: US DOT Bureau of Transportation Statistics, Form T

- 100

2. Origin

- destination passengers divided by two.

3. Average annual enplanements divided by 313 effective annual service days.

4. No data reported for October, November, and December.

5. Hiatus in EAS

– October 2007 through March 2009. Allegiant Air commenced service between Hagerstown and Orlando on November 14, 2008. Year Ended Origin &

Destination Passengers Annual

Enplanements 2 Average Enplanements Per Service Day

31-Dec-05 3 9,852 4,926 15.7

31-Dec-06 3 11,711 5,856 18.7

31-Dec-07 4 5,413

- -
31-Dec-08 5

- - -
31-Dec-09 5 4,871 2,436

-
31-Dec-10 3 6,283 3,142 10.0

30-Sept-11 3 6,744 3,372 10.8

Year Ended Origin &

Destination Passengers Annual

Enplanements 2 Average Enplanements Per
Service Day 3

31-Dec-05 3 11,717 5,859 18.7

31-Dec-06 3 13,353 6,677 21.3

31-Dec-07 4 8,820

- -
31-Dec-08 5

- - -
31-Dec-09 5 7,162 3,581

-
31-Dec-10 3 11,210 5,605 17.9

30-Sept-11 3 12,633 6,317 20.2 Historical Enplanements 1
Lancaster, Pennsylvania Historical Enplanements 1

Hagerstown, Maryland

### 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 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 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 servi ce 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 Departmen t 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 suc h statutes, regulations, or amendments thereto shall not operate to controvert the foregoing paragraph.

Funds are not currently available for performance under this order beyond [DATE] . The Department’s obligation for performance unde r this order beyond [DATE] , 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 [DATE] , until funds are made avail able to the Department for performance. If funds are not made available for performance beyond [DATE] , the Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of se rvice provid ed

under this order.

### Appendix D

SERVICE LIST

Air Choice One Airlines, Shane Storz Delta Air Lines, Stephen A. Hedden Pacific Aviation Group, Craig Garrick

Air Greco/Wings Air Dorado Jets Pacific Aviation Group, Ron Rye

Air Sunshine, Inc. Dorado Jets, Mark McKenna Pacific Wings, Frank Ford

Air Sunshine, Mirmohammad Adili Era Aviation, Lori Goodman Pacific Wings, Greg Kahlstorf

Air West, Inc., John Raatz Executive Airlines, Kate Soled Penn Air, Danny Seybert

Air Wisconsin, Annette Daly ExpressJet, Jon Lindlief Penn Air, Scott Bloomquist

Air Wisconsin, Jim Rankin ExpressJet, Roger Weston Pinnacle Airlines, Jennifer Gammill

Airline Associates, Bill Mishk Frontier Airlines, Daniel Shurz Pinnacle Airlines, Megan Rosia

Alaska Airlines, Jeff Cole Frontier Flying, Bob Hajducovich Pinnacle Airlines, Phil Reed

Alaska Airlines, Sandy Sinick Frontline Aviation Planemasters, Inc., John Kessler

American Airlines, Carl Nelson Gem Air, Dan Schroeder Planemasters, Inc., Paul Berliner

American Eagle, Gary Foss Gem Air, JoAnn Wolters Planemasters, Inc., Todd DeSimone

American Eagle, Robert Emrich Great Lakes Airlines, Chuck Howell RAA, Faye Balck

American Eagle, Patrick Swift Great Lakes Airlines, Doug Voss Raytheon, Mike Schiedt

Avi ation Express, Brad Shriner Homeland Security, Bill Ragan Rectrix, Aviation, Scott LaForge
Aviation Technologies/Charter Air Transport, Jim Gallagher Homeland Security, David Bernier Saab Group, Polly Prelinger

Bemidji Aviation, Arlen Rinkenberger Horizon Air, Jennifer Thompson Scenic, Mary Schneider

Bemidji Aviation, Cori Rude Horizon Air, Mike McQeen Scenic, Mitzi Daines

Cape Air, Andrew Bonney Horizon Air, Jeff Cole Seaborne Airlines, Shawn Lewis

Cape Air, Dan Wolf ICEPR, Luis Irizarry SeaP ort Airlines

, EAS Mailbox

Cape Air, J. Flaherty Intrepid Internatl Air, Rick Eyk SeaPort Airlines. Rob McKinney

Capital Aviation, Mike Colgan Island Air Charters, Linda House Shuttle America, Jerry Balsano

Chautauqua, Josh Pascoe Jet Air, Daniel Wolford Si lver Airways, Darrell Richardson

Classic Aviation, Tony Henderson Kenmore Air, Tim Brooks Silver Airways, Mickey Bowman

Colgan Air, Kevin Scott McCall Aviation, Dan Scott SkyWest, Brad Rawson

Colgan Air, Mike Colgan McCall Aviation, Michelle SkyWest, Eric Christensen

CommutAir, Andy Price Mesaba, John Spanjers SkyWest, Michael Thompson

CommutAir, Joel Raymond Mesaba, Max Shemesh Sovereign Air, Bob Karns

Consultant, Jeff Hartz Michigan DOT, Matt Brinker Tailwind International, Michele

Wilkinson
Consultant, Mike Mooney Midstar Airlines, Jeffrey Fonner Tatonduk, Robert Everts

Consultant, Robert Silverberg Republic Air Line , Greg Aretakis Tatonduk, Robert Ragar

Consultant, Ron McNeil MN Aviation, Jose Maldonado Tradewind, Eric Zipkin

Continental, Bruce Keiner Multi Aero, Darnea Transport Azumah, Joel Anabilah

Azumah

Continental, Dan Weiss Multi Aero, Shane Storz Trans States, Fred Oxley

Continental, Lorry Halloway Northern Air Cargo, David Karp Trans States, Gerry Wigmore

Delta Air Lines Anthon y Canitano Northern Air Cargo, Eric Van Andel Trans States, Warren Crotty

Delta Air Lines, Dan Shuman NYDC, Henok Araya United, Alicia Gabriel

Delta Air Lines, Dana Debel OST, Brian Swanson United, James Starnes

Delta Air Lines, Jeff Davidman OST, Brooke Chapman US Airways, Benjamin Slocum

Delta Air Lines, Jeff Morgan OST, Dennis DeVany US Airways, Howard Kass

Delta Air Lines, Joe Esposito OST, Kevin Adams US Airways, Jason Reisinger

Delta Air Lines, Kristal Murphy OST, Kevin Schlemmer Warbelows Air Ventures, Art

Warbelow
Delta Air Lines, Sally Veith OST, Michael Martin HGR, Phil Ridenour

Delta Air Lines, Sascha Vanderbellen OST, Scott Faulk HGR, Greg Larson

LNS, David Eberly LNS, Kim Huber