Order: 2010
- 3
- 26 Served: March 19, 2010 

### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Is sued by the Department of Transportation on the 19 th day of March, 2010

ORDER SETTING FINAL RATES On July 14, 200 9, Mesaba Airlines, Inc., d/b/a Delta Connection, 1 filed 90
- day notices of intent to suspend its subsidy
- free service at the four communities above, effective October 12. By

Order 2009
- 7 - 16, we prohibited Mesaba from terminating service and requested prop osals while requir ing it to continue to maintain service
. By Order 2009
- 10
- 8 , we selected Sky West Airlines, Inc., d/b/a United Express, to replace Mesaba at these four communities, and Sky West inaugurated its proposed service at all four communities in F ebruary , relieving Mesaba of its obligation to continue providing essential air service at these four communities
. 2 Nevertheless, Mesaba is entitled to compensation for its forced service. We have reviewed Mesaba’s proposals for compensation at these c ommunities, and , after meeting with the carrier, have reached agreement as to the reasonable levels of compensation. The rates are those reflected in Appendices A and B . This order is issued under authority delegated in 49 CFR 1.56a(f).

1 Mesaba is a w

holly
- ow ned subsidiary of Delta Air Lines. 2 Mesaba also filed 90
- day notices at Alpena, International Falls, Paducah, and Tupelo at the same time it filed notice at these four communities. We will be issuing orders addressing those communities’ essential air service in the near future. Essential Air Service at EAU CLAIRE, WISCONSIN, HANCOCK/HOUGHTON AND MUSKEGON, MICHIGAN, AND PADUCAH, KENTUCKY Under 49 U.S.C. 41731 et seq . DOCKET OST - 200 9 - 0306 DOCKET OST - 2009 - 0302 DOCKET OST - 2009 - 0301 DOCKET OST - 2009 - 0299A CCORDINGLY ,

1. We set the final rates for Mesaba Airlines, Inc., for its provision of essential air service at Hancock/Houghton and Muskegon, Michigan, Eau Claire, Wisconsin, and Paducah, Kentucky , as descri bed in Appendices A and B ; 2. We direct Mesaba Airlines, In c., 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 readily permits the audit and examination by representatives of the Department. Suc h 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 compensatio n for any claim that is not supported under the terms of this order; 3. Th e s e Docket s will remain open until further Department action; and 4. The Department will serve copies of this order on the Mesaba Airlines, Inc., and on Delta Air L ines, Inc. By :

Susan Kurland Assistant Secretary

for Aviation and International Affairs (SEAL) An electronic version of this document is available on the World Wide Web at http://www.regulations.govAppendix A Annual Subsidy Rate at Four Communities Where SkyWest Replaced Mesaba

Total CMX EAU MKG PAH Docket Numbers 2009-0302 2009-0306 2009-0301 2009-0299 Hub(s) MSP MSP DTW MEM R./T.Week 14 14 14 14 Completion Factor 97% 97% 97% 98% Pax 1/ 117,139 32,573 28,439 28,324 27,803 Block Hours 1/ 6,435 2,148 1,157 1,652 1,478 Flts. to/from Hub 1/ 5,679 1,416 1,416 1,416 1,431 Pax. Revenue $8,101,074 $2,605,808 $1,371,270 $2,011,004 $2,112,992 Other Rev. $1,047,150 $403,158 $189,665 $265,299 $189,028 Total Revenue $9,148,224 $3,008,966 $1,560,935 $2,276,303 $2,302,020 Pilot $1,536,163 $512,770 $276,199 $394,366 $352,828 Fuel $1,549,741 $517,303 $278,640 $397,851 $355,947 Maintenance $2,234,297 $745,807 $401,722 $573,591 $513,177 Aircraft $1,309,780 $437,204 $235,496 $336,248 $300,832 Total Directs $6,629,981 $2,213,084 $1,192,057 $1,702,056 $1,522,784 Total Indirects $5,024,646 $1,507,345 $1,068,295 $1,243,618 $1,205,388 Total Operating $11,654,627 $3,720,429 $2,260,352 $2,945,674 $2,728,172 Profit @ 5% $582,732 $186,021 $113,018 $147,284 $136,409 Economic Cost $12,237,359 $3,906,450 $2,373,370 $3,092,958 $2,864,581 Annual Subsidy Rate $3,089,135 $897,484 $812,435 $816,655 $562,561

1/ Nonstop Flts./ Days/ Completion Block Block Nonstops Pax. To/ City-Pair Miles Day Year Percent Time Hours to/from Hub From Hub CMX-MSP 277 4 365 0.97 91 2,148 1,416 32,573 MKG-DTW 161 4 365 0.97 70 1,652 1,416 28,324 PAH-MEM 154 4 365 0.98 62 1,478 1,431 27,803 EA U-MSP 85 4 365 0.97 49 1,157 1,416 28,439 6,435 5,679 117,139Appendix B Page 1 of 5 Subsidy Rate Agreement for the Provision of Essential Air Service by Delta/Mesaba at Hancock/Houghton, Michigan, Docket 2009
- 0302

______________________________________________________________________ EFFECTIVE PERI OD : October 12, 2009, thru February 28, 2010.

________________________________________________________________________ SERVI CE: 14 round nonstop round trips per week between Hancock/Houghton and Minneapolis.

___________________________________________ _____________________________ AIRCRAFT TYPE: Saab 340

________________________________________________________________________ TIMI NG OF FLIGHTS: Flights must be well
- timed and well
- spaced to ensure full compensation.

________________________________ _______________________________________ ANNUAL SUBSIDY RATE: $897,484 RATE PER FL IG HT: $634 1 WEEKLY CEI LING: $17,752 2 This rate assumes an annual completion factor of 97 percent. A compensation ceiling is to be applied each week , such that service ab ove that ceiling in one week cannot make up for service shortfalls in another week.

1 Annual compensation of $897,484 divided by 1,416 annual flights, calculated as follows: 4 flights per day x 365 days x .97 completion = 1,416 2 $634 times 28 flights per week.Appendix B Page 2 of 5 Subsidy Rate Agreement for the Provision of Essential Air Service by Delta/Mesaba at Eau Claire, Wisconsin, Docket 2009
- 0306

________________

______________________________________________________ EFFECTIVE PERI OD: October 12, 2009, thru February 28, 2010.

________________________________________________________________________ SERVI CE: 14 round nonstop round trips per week between Eau Clair e and Minneapolis.

________________________________________________________________________ AIRCRAFT TYPE: Saab 340

________________________________________________________________________ TIMI NG OF FLIGHTS: Flights must be well
- timed and well
- spaced t o ensure full compensation.

_______________________________________________________________________ ANNUAL SUBSIDY RATE: $812,435 RATE PER FL IG HT: $574 1 WEEKLY CEI LING: $16,072 2 This rate assumes an annual completion factor of 97 percent. A comp ensation ceiling is to be applied each week , such that service above that ceiling in one week cannot make up for service shortfalls in another week.

1 Annual compensation of $812,435 divided by 1,416 annual flights, calculated as follows: 4 flights per day x 365 days x .97 completion = 1,416 2 $574 times 28 flights per week.Appendix B Page 3 of 5 Subsidy Rate Agreement for the Provision of Essential Air Service by Delta/Mesab a at Muskegon, Michigan, Docket 2009
- 0301

_____________________________________________________________________ EFFECTIVE PERI OD: October 12, 2009, thru February 11 , 2010
.

________________________________________________________________________ SERV IC E: 14 round nonstop round trips per week between Muskegon and Detroit.

________________________________________________________________________ AIRCRAFT TYPE: Saab 340

________________________________________________________________________ TIMI NG OF FLIGHTS: Flights must be well
- timed and well
- spaced to ensure full compensation.

_______________________________________________________________________ ANNUAL SUBSIDY RATE: $816,655 RATE PER FL IG HT: $577 1 WEEKLY CEI LING: $16,156 2 This rate assumes an annual completion factor of 97 percent. A compensation ceiling is to be applied each week , such that service above that ceiling in one week cannot make up for service shortfalls in another week.

1 Annual compensation of $816,655 divided by 1,416 annual flights, calculated as follows: 4 flights per day x 365 days x .97 completion = 1,416 2 $577 times 28 flights per week.Appendix B Page 4 of 5 Subsidy Rate Agreement fo r the Provision of Essential Air Service by Delta/Mesaba at Paducah, Kentucky , Docket 2009
- 0299

______________________________________________________________________ EFFECTIVE PERI OD: October 12, 2009 , thru February 11, 2010

_________________________ _______________________________________________ SERVI CE: 14 round nonstop round trips per week between Paducah and Memphis.

________________________________________________________________________ AIRCRAFT TYPE: Saab 340

_______________________________ _________________________________________ TIMI NG OF FLIGHTS: Flights must be well
- timed and well
- spaced to ensure full compensation.

_______________________________________________________________________ ANNUAL SUBSIDY RATE: $562,561 RATE PER FL IG H T: $393 1 WEEKLY CEI LING: $11,004 2 This rate assumes an annual completion factor of 98 percent. A compensation ceiling is to be applied each week , such that service above that ceiling in one week cannot make up for service shortfalls in another week.

1 Annual comp ensation of $562,561 divided by 1,431 annual flights, calculated as follow s: 4 flights per day x 365 days x .98 completion = 1,431 2 $393 times 28 flights per week.Appendix B Page 5 of 5 General Terms and Conditions for Essential Air Service Note: The carrier understands that it may forfeit its compensation for any flights that it d id not operate in conformance with the terms and stipulations of th is order, inclu ding 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; abse nt 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 d id not schedule or operate its flight s 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 contemplate d any such changes beyond the scope of the order during the applicable period of this rate, it s hould have first notif ied the Office of Aviation Analysis in writing and receive d wr itten approval from the Department to be ensured of full compensation. The carrier must complete all flights that can be safely operated; flights that overfly points for l ack 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 nation al air transportation system provided to the community. Subsidy contracts are subject to, and incorporate by reference, relevant statutes and Department regulations, as they may be awarded from time to time. However, any such statutes, regulations, or amendments thereto shall not operate to controvert the foregoing paragraph. All claims for payment must be submitted within 60 days of the issuance of this order
.