Order: 2011-8-27

 Served: August 31, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 31st of August, 2011 

Essential Air Service at

JACKSON, TENNESSEE

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

DOT-OST-2000-7857

ORDER PROHIBITING TERMINATION OF SERVICE AND REQUESTING 

PROPOSALS

Summary

By this order, the Department is (1) prohibiting Pacific Wings, LLC (Pacific Wings) from 

terminating its subsidized Essential Air Service (EAS) at Jackson, Tennessee, for 30 days 

beyond the end of its 90-day notice period; and (2) soliciting proposals from carriers interested in 

providing EAS at Jackson, with or without subsidy. Proposals are due September 30, 2011. (See 

Appendix A for a map.)

Background

By Order 2009-6-17 (June 22, 2009), the Department selected Pacific Wings to provide 18 

nonstop round trips per week from Jackson to Nashville using a 9-passenger Cessna Grand 

Caravan, for 24 months beginning when the carrier inaugurated service, for an annual subsidy 

rate of $1,225,628. Pacific Wings inaugurated service at Jackson on August 31, 2009. The 

current contract will expire on August 31, 2011. Pacific Wings operates the service under the 

brand names Kentucky Skies and Tennessee Skies.

Before Pacific Wings inaugurated service at Jackson, the community experienced an extended 

service hiatus. The previous carrier, Big Sky Airlines, ceased operations at Jackson on 

January 6, 2008. Great Lakes Aviation, Ltd. (Great Lakes) was selected to serve Jackson by

Order 2008-2-1 (February 6, 2008), but Great Lakes never began service. Thus, Jackson was 

without scheduled air service from January 7, 2008, until August 31, 2009.
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In anticipation of the expiration of Pacific Wings’ contract on August 31, 2011, the Department 

issued Order 2011-1-19 (January 21, 2011), soliciting proposals on or before March 16, 2011,

from carriers interested in providing service at Jackson. On March 15, 2011, prior to the due 

date for proposals, Pacific Wings notified the Department of its intention to provide subsidy-free 

service at Jackson, effective September 1, 2011, the end of its current contract. As a result, the 

Department notified the community and ceased the carrier-selection process.

On June 30, 2011, Pacific Wings filed with the Department a 90-day notice of its intent to 

terminate service at Jackson, as well as Owensboro, Kentucky,

1 effective September 30, 2011. 

Pacific Wings stated that despite many attempts, it had been “unable to procure counter or gate 

space at [Nashville International Airport] on reasonable terms.” The carrier stated that these 

“barriers to access continue to impede and frustrate our service delivery efforts.”

Discussion

Public Law 112-27, signed into law on August 5, 2011, amended the definition of “eligible 

place” for the purpose of receiving EAS. See 49 U.S.C. § 41731. The amendment states that to 

be eligible, a community must be located not less than 90 miles from the nearest medium or large 

hub airport and must have had an average subsidy per passenger of less than $1,000 during the 

most recent fiscal year, as determined by the Secretary of Transportation. Section 41731, as 

amended, also grants the Secretary the authority to issue a waiver of the 90-mile criterion if the 

Secretary determines that the “geographic characteristics of the location result in undue difficulty

in accessing the nearest medium or large hub airport.” 49 U.S.C. § 41731(d). The Department is 

currently working on a Notice of Proposed Rulemaking regarding the new provisions under 49 

U.S.C. § 41731, as amended, which it plans to issue in the near future.

Because Pacific Wings’ proposed termination of service would leave Jackson without any

scheduled air service, we must prohibit the carrier from terminating such service at the end of its 

90-day notice period and request proposals from carriers interested in providing service to the 

community. To honor that obligation, and to serve the public interest, we will require Pacific 

Wings to continue to maintain service at the community for 30 days, and successive 30 day

periods as necessary, at least until a new carrier is selected and begins service or the Department 

completes the forthcoming new regulation implementing Section 41731, as amended, and 

determines Jackson’s status as an EAS community under the new rule, whichever is earlier.

2 

In addition, the Department is prohibited from subsidizing air service at a community where the 

subsidy per passenger exceeds $200, unless the community is more than 210 highway miles from 

the nearest large or medium hub airport.3 Based on the most recent fiscal year for which data are

available (12 months ending September 30, 2010), 5,252 passengers were enplaned and deplaned 

at Jackson. The annual subsidy amount for Jackson is $1,225,628. Therefore, the subsidy per 

 

1 See Order 2011-8-6 for information regarding Owensboro.

2 We take this action pursuant to 49 U.S.C. §§ 40101(a) (7), (11), and (16), 40109(c), and 41731-42; see also 14 

CFR Parts 271, 323, and 325. 

3 Congress first established the $200 ceiling under P.L. 101-164 for fiscal year 1990, and reestablished it in fiscal 

years 1994-1999. The ceiling was made permanent by P.L. 106-69, the Department of Transportation and Related 

Agencies Appropriations Act of 2000.
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passenger is $233 at Jackson. Thus, Jackson presently exceeds the $200 per passenger cap and is 

fewer than 210 miles from a large or medium hub airport.

As stated above, before Pacific Wings inaugurated service at Jackson, the community

experienced an extended service hiatus from January 7, 2008, until August 31, 2009. Rather 

than terminate service eligibility at the community based only on the most recent data following 

the hiatus, the Department will solicit proposals for EAS and evaluate all proposals submitted 

before committing to a new contract or making a final determination of Jackson’s continuing 

eligibility under the $200 per passenger ceiling. Prior to the due date for proposals, we expect 

the community to work aggressively with all potential applicants to mitigate some of the risks 

that the carriers may face in an attempt to lower their subsidy levels and/or substantially increase 

usage of the air service.

Request for Proposals

We are requesting proposals from carriers interested in providing service at Jackson, with or without 

subsidy, to be filed no later than September 30, 2011. After that date, our staff will docket the 

proposals, thereby making them public. Shortly afterwards, we will provide a summary of the 

proposals to the community and ask them to submit their final comments. We will give full 

consideration to all proposals that are timely filed.4 

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 solicit a new round of proposals.

We are 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 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-documented proposals that will facilitate their evaluation by the affected 

communities and the Department.5

 

4 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide EAS 

without subsidy and we determine that service can be reliably provided without such compensation, we do not 

proceed with the carrier-selection case. Instead, we simply rely on that carrier’s subsidy-free service as proposed.

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

factors: (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub; (3) 

interline arrangements with a larger carrier at the hub; and (4) community views. In addition, the Consolidated 

Appropriations Act, 2008, PL 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. 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 B of this Order contains 

those general provisions. 
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Because Jackson is already over the $200 cap, we will only consider credible proposals from 

operating carriers that can reasonably demonstrate that they can operate at Jackson under the 

$200 per passenger cap on a sustained basis.

We ask that carriers submit proposals for two nonstop round trips per day (12 round trips per 

week) with 15-seat or larger aircraft to Atlanta, Memphis, St. Louis, or another suitable hub 

where numerous connections to the national air transportation system can be made.

Although the Department often awards two-year contracts for subsidized EAS at a community,

proposals should reflect an understanding that the community’s EAS status may be affected by

the recent amendment and pending rulemaking, which may impact the terms of any new 

contract. 

While Jackson is entitled to service with 15-seat or larger aircraft, we would also entertain 

proposals for eight- or nine-seat aircraft with an additional frequency (18 to 21 round trips per 

week) for the community. If the Department receives proposals for eight- or nine-seat aircraft, 

and the community ultimately supports the service, in effect waiving their right 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 community would waive their rights for all time. As always, we will 

formally solicit the community’s views on any service options we receive before making a longterm carrier selection decision. If service with eight- or nine-seat aircraft is proposed, service 

from the community to the hub should be nonstop.

The community 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 community and meets the operational 

needs of the airline. 

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

welcome to propose more than one service option and, if they so choose, they need not limit 

themselves to the requirements set forth in this request 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 merged into a single 

document. The document will be published on Regulations.gov and each page should be 

formatted to be viewed online. 

Service and Traffic History

For the most recent fiscal year (October 1, 2010 through September 30, 2010), 5,252 passengers 

were enplaned and deplaned at Jackson, an average of 8.4 enplanements per day (at Jackson).

6 

 

6 5,252 passengers used the service to and/or from Jackson for the period October 1, 2009 through September 30, 

2010. Enplanements represent one-half of total origin-and-destination traffic, and average enplanements per day

are based on 313 days per year.
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Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces, and nondiscrimination.7 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) 366-5903.8

Community and State Comments

The community and State are welcome to submit comments on the proposals at any time. As 

noted earlier, however, we will provide a summary of the proposals to the civic parties and ask 

them to submit their final comments shortly after September 30, 2011, the due date for proposals.

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

ACCORDINGLY,

1. We prohibit Pacific Wings, LLC from suspending service at Jackson, Tennessee at the end of 

its 90-day notice period (September 30, 2011), and require it to maintain service as set forth in 

Appendix A, for an initial 30-day period through October 30, 2011;9

2. We request that carriers interested in providing essential air service at Jackson, Tennessee, 

submit their proposals, with or without requests for subsidy, no later than September 30, 2011. 

The proposals should be e-mailed to EAS@dot.gov, with the title: “Proposal to Provide Essential 

Air Service at Jackson, Tennessee (Docket DOT-OST-2000-7857)”.

10

3. We direct Pacific Wings, LLC to retain all books and other source and summary 

documentation to support claims for payment, and to preserve and maintain such documentation 

 

7 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 (nonprocurement) and government-wide requirements for drug-free workplace (grants).

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

9 As stated above, we will extend Pacific Wings’ service obligation for successive 30-day periods as necessary, at 

least until replacement service actually begins or the Department completes the forthcoming rulemaking and 

Jackson’s continuing status as an EAS community is determined under the new rule, whichever is earlier.

10 Questions regarding filings in response to this order may be directed via electronic mail to Kevin Schlemmer at 

kevin.schlemmer@dot.gov or via phone at (202) 366-3176.
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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 is earlier. Copies of 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. This docket will remain open until further order of the Department; and

5. We will serve copies of this order on the Mayor of Jackson, the manager of McKellar-Sipes 

Regional Airport, Pacific Wings, LLC, and the parties listed in Appendix C. 

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

PACIFIC WINGS, LLC

dba KENTUCKY SKIES

dba TENNESSEE SKIES

ESSENTIAL AIR SERVICE TO BE MAINTAINED 

JACKSON, TENNESSEE

EFFECTIVE PERIOD 30 days beyond September 30, 2011, until further Department action

SERVICE 18 weekly nonstop round trips to Nashville International Airport 

(3 nonstop round trips each weekday and 3 nonstop round trips each weekend)

AIRCRAFT TYPE Cessna Grand Caravan (9 seats)

TIMING OF

FLIGHTS Flights must be well timed and well spaced to ensure full compensation

SUBSIDY RATE As outlined in Order 2009-6-17, June 22, 2009, effective September 1, 

2011, until further Department action
Appendix B

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 

Government’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 Government 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 C

Scheduled Air Carriers, Contiguous US and Puerto Rico

Air Greco/Wings Air McCall Aviation, Dan Scott

Air Sunshine, Inc. McCall Aviation, Michelle

Air Sunshine, Mirmohammad Adili Mesaba, John Spanjers 

Air West, Inc., John Raatz Mesaba, Max Shemesh

Air Wisconsin, Annette Daly MidStar Airlines, Jeffrey Fonner

Air Wisconsin, Jim Rankin Midwest Airlines, Greg Aretakis

Airline Associates, Bill Mishk MN Aviation, Jose Maldonado 

Alaska Airlines, Jeff Cole Multi Aero, Darnea

Alaska Airlines, Sandy Sinick Multi Aero, Shane Storz

Allegiant Air, Brian Davis Northern Air Cargo, David Karp

American Airlines, Carl Nelson Northern Air Cargo, Eric Van Andel

American Eagle, Jeffrey Hartz Northwest, Tim McDonald 

Atlantic Southeast, Jon Lindlief Northwest, Aaron Murray

Atlantis Southeast, Roger Weston NYDC, Henok Araya

Aviation Technologies/Charter Air Transport OST, Brian Swanson

Bemidji Aviation, Cori Rude OST, Dennis DeVany

Bemidji Aviation, Arlen Rinkenberger OST, Kevin Adams

Cape Air, Andrew Bonney OST, Kevin Schlemmer

Cape Air, Dan Wolf OST, Michael Martin 

Cape Air, J. Flaherty Pacific Aviation Group, Craig Garrick

Classic Aviation, Tony Henderson Pacific Aviation Group, Ron Pye

Colgan Air, Mike Colgan Pacific Wings, Frank Ford

Colgan Air, Kevin Scott Pacific Wings, Greg Kahlstorf

CommutAir, Andy Price PenAir, Danny Seybert

CommutAir, Joel Raymond PenAir, Scott Bloomquist

Consultant, Robert Silverberg Pinnacle Airlines, Jennifer Gammill

Continental, Bruce Keiner Pinnacle Airlines, Megan Rosia 

Continental, Dan Weiss Pinnacle Airlines, Phil Reed

Continental, Lorry Halloway Planemasters, Inc. John Kessler

Delta, Anthony Canitano Planemasters, Inc. Paul Berliner

Delta, Dan Shuman Planemasters, Inc. Todd DeSimone

Delta, Jeff Morgan Raytheon, Mike Scheidt

Delta, Joe Esposito Saab Group, Polly Prelinger

Delta, Karen Zachary Scenic, Mary Schneider

Delta, Kristal Murphy Scenic, Mitzi Daines

Delta, Sascha Vanderbellen Seaborne Airlines, Shawn Lewis

DHS, Bill Ragan SeaPort Airlines, Daniel Helland

DHS, David Bernier SeaPort/Wings of Alaska, Jim Day

Dorado Jets SeaPort/Wings of Alaska, Nate Vallier

Dorado Jets, Mark McKenna SeaPort/Wings of Alaska, Rob McKinney

Era Aviation, Lori Goodman Shuttle America, Jerry Balsano 

Executive Airlines, Kate Soled SkyWest, Brad Rawson

Frontier Flying, Bob Hajducovich SkyWest, Eric Christensen

Frontier, Daniel Shurz SkyWest, Michael Thompson

Frontline Aviation Sovereign Air, Bob Karns

Gem Air, Dan Schroeder Sovereign Air, Lois R. Barton

Gem Air, JoAnn Wolters Tatonduk, Robert Everts

Pacific Wings, Chuck Howell Tatonduk, Robert Ragar

Pacific Wings, Doug Voss Tradewind, Eric Zipkin 

Gulfstream, Dave Hackett TransStates, Fred Oxley 

Gulfstream, Mickey Bowman TransStates, Gerry Wigmore

Gulfstream, T. Cooper Transport Azumah, Joel Anabilah-Azumah

Horizon Air, Dan Russo United, Alicia Gabriel

Horizon Air, Jennifer Thompson United, James Starnes

Horizon Air, Mike McQueen US Airways, Benjamin Slocum

Horizon Air, Jeff Cole US Airways, Howard Kass

ICEPR, Luis Irizarry US Airways, Jason Reisinger 

Intrepid Internatl Air, Rick Eyk Warbelows Air Ventures, Art Warbelow

Island Air Charters, Linda House

Jet Air, Daniel Wolford

Kenmore Air, Tim Brooks