### Order: 2014

- 4

- 24

Served: April 22, 2014



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 22 nd 

### of April , 2014

Essential Air Service at

MUSCLE SHOALS, ALABAMA

GREENVILLE, MISSISSIPPI

LAUREL/HA TTIESBURG, MISSISSIPPI

MERIDIAN, MISSISSIPPI

TUPELO, MISSISSIPPI

Under 49 U.S.C. 41731 et seq

. Docket DOT

- OST

- 2000

- 7856

Docket DOT

- OST

- 2008

- 0209

Docket DOT

- OST

- 2001

- 10685

Docket DOT

- OST

- 2008

- 0112

Docket DOT

- OS T

- 2009

- 0305

ORDER PR OHIBITING TERMINTATION OF SERVICE

AND REQUESTING PROPOSALS

Summary

By this Order, the Department prohibits Silve r Airways Corp. ( Silver ), from terminating service

at Muscle Shoals

, Alabama, Greenville, Laurel/Hattiesburg, Meridian, and Tupelo, Mississipp i

, for 30 days beyond the end of the air carrier’s 90

- day notice period, i.e. August 7 , 2014. We are

also requesting proposals from air carriers interested in providing Es sential Air Service ( EAS ) at

Muscle Shoals, Greenville, Laurel/ Hattiesburg, Meridian , and/or Tupelo . (See Appendix A for a

map). Proposals are due May 19 , 2014

.

Background

By Order s 2012

- 5

- 17 (May 22, 2012 ) , the Department selected Silver to provide subsidized EAS

at Muscle Shoals, Greenville, Laurel/ Hattiesburg, and Tupelo

, 1 

### for a c ombined annual subsidy of

$1 2,613,828 ($2,603,365 for Muscle Shoals

, $ 7,044,796 for Greenville and Tupelo

, and

$2,965,667 for Laurel/ Hattiesburg ). By Order 2012

- 7

- 35 (July 30, 2012) , the Department

selected Silver to provide service to Meridian for an ann ual subsidy of $2,417,808. Both Orders

1 Order 2012

- 5

- 17 also selected Silver to provide EAS at Greenbrier/White Sulphur Springs, West Virginia, but that

community is not affected by Silver’s 90

- day termination notices at the five communities discussed here.

### 2

selected Silver to provide service for a two

- year period beginning when Silver inaugurated full

EAS through the end of the 24 th 

### month thereafter

. Silver inaugurated service at all five

communities on October 1, 2012 , thus setting an expiration date of September 30, 2014. Silver

operates its service to all five communities with 34

- passenger Saab 340 aircraft to Hartsfield

Jackson Atlanta International Airport (Atlanta).

On April 9, 2014

, Silver filed a 90

- day notice of its intention to terminate scheduled air service at

Muscle Shoals, Greenville, Laurel/ Hattiesburg, Meridian

, and Tupelo effective July 8, 2014. In

that notice, Silver explains it is no longer able to provide subsidized service to these cities due to

m ultiple factors

. Among those factors are increased costs associated with the new Federal

regulatory requirements in which an air transport pilot certification is required as well as new

flight and duty limitation and rest rules for flight crew members , th e impact of the recent

nationwide pilot shortage, and disappointing traffic resu lts in some of these cities

. Because

Silver’s termination would mean that the communities would not have scheduled air service that

they are entitled to under the EAS program

, the Department must initiate a new carrier

- selection

process.

We note that 49 U.S.C. § 41731(a)(1)(B) provides that communities enplaning fewer than ten

passengers per day based on traffic for the year ended September 30, 2013, are not eligible for

EAS support, barring a waiver from the Secretary. The Department is working towards

implementation of that provision, and we anticipate addressing that matter in the near future

, which could affect some, but likely not all of these five communities . In the meantime, the

communities will soon be without their required EAS. As developments on the ten enplanement

provision proceed, we will keep potential applicants and the communities fully informed and will

take appropriate action.

The complete public file for EAS at all five communities may be accessed online through the

Federal Dockets Management System at: www.regulations.gov by entering each community’s

respective docket number in the “ Search for Rules, Commen ts, Adjudications, or Supporting

Documents ” field.

Hold

- In

Silver’s proposed termination of service at Muscle Shoals, Greenville, Laurel/ Hattiesburg,

Meridian, and Tupelo would cause service levels to drop below the EAS guaranteed levels

established by th e Department. Thus, the Department must prohibit the air carrier from

terminating such service at the end of its 90

- day notice , i.e. July 8 , 2014 . We will require Silver

to continue to maintain its current level of service at these five communities for su ccessive 30

- day periods until we have completed processing the air carrier

- replacement case and the selected

air carrier has actually started service. 2

2 In accordance with 49 U.S.C. 41734(c), we will extend Silver’s service obligation for successive 30

- day periods as

necessary unti l replacement service actually begins.

### 3

R e qu e st f or P r o p osals 3



### In order to provide sufficient time to complete the air carrier

- selection proces s before Silver

terminates its service, we are here by requesting proposals from air carriers interested in

providing service at Muscle Shoals, Greenville, Laurel/ Hattiesburg, Meridian, and Tupelo

, with or without subsidy support, for a new two

- year period. Air carriers should file their

proposals no later than May 19

, 2014 . After that date, our staff will docket proposals, thereby

making them public, and direct each air carrier to serve a copy of its proposal on the civic

parties and other applicants. Sh ortly thereafter, we will provide a summary of the proposals to

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

consideration to all proposals filed in a timely manner

. 4



### Interested air carriers should prepare their prop osals 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; in such cases, of course, we will

give all applicant s the same opportunity. 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 provid ing interested air 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. Carrier proposals should be submitted to the Department with all materials merg ed

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

each page should be formatted to be viewed online. We expect proposals to adequately describe

the service being proposed and the annual amount of subsidy b eing requested. The applicants

can make their own judgments as to the level of detail they wish to present; however, we

recommend they include information concerning proposed schedules and projected block

hours. In addition, applicants are encouraged to provide financial data supporting their subsidy

requests, including information on their projected expenses and revenues. We strongly

encourage clear, well

- documented proposals that will facilitate their evaluation by the affected

community and the Depart ment. 5

3 Applicants should be aware of the provisions of 49 U.S.C. § 41731(a)(1)(B), the ten enplanement rule, discussed

above, when preparing their proposals. Staff will be available to answer any questions

.

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

without subsidy and we determine that basic EAS, required by 49 U.S.C. § 41732, 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.

5 In selecting a carrier to provide subsidized EAS for an eligible place not in Alaska, 49 U.S.C. § 41733(c)(1)

directs us to consider fi ve factors: (a) service reliability; (b) contractual and marketing arrangements with a larger

carrier at the hub; (c) interline arrangements with a larger carrier at the hub; (d) community views, giving substantial

weight to the views of the elected offici als representing the users; and (e) whether the carrier has included a plan in

its proposal to market its service to the community. In addition, the Consolidated and Further Continuing

Appropriations Act, 201 4 , Public Law No. 11 3

- 76 , provides that when se lecting 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 gover ning

Essential Air Service will be included in the selection Order as part of our authorization of subsidy for the

selected service. Appendix D of this order contains those general provisions.

### 4

We have provided some historic traffic data for the communities in Appendix B. 6 

### Traffic has

decreased year over year

. T he Department expects proposals similar to what ea ch community

currently rec eives using 30

- passenger or larger seat aircraft t o a large

- or medium

- hub that

provides access to the national air transportation system

.

Muscle Shoals 12 weekly nonstop round trips

Greenville 12 weekly nonstop roundtrips or 18 weekly

one

- stop round trips

Laurel/ Hattiesburg 12 weekly nonstop round t rips

Meridian 1 2 or 1 3 weekly nonstop round trips

Tupelo 12 weekly nonstop round trips or 18

weekly one

- stop round trips

Alternatively, we will accept proposals consisting of additional frequencies if smaller aircraft

(9

- passenger) are contemplated. We encourage proposals that meet these guidelines in an

efficient manner. Air c arriers are also welcome to propose more than one service option, if

they choose. They also need not limit themselves to these requirements if they envision other,

potentiall y more attractive service possibilities

-- different hubs or length of contract, for

example

-- with subsidy requirements that remain competitive.

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 EAS 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 contract 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 no t 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 th ese

requirements should contact the Offic e of Aviation Analysis at (202) 366

- 5903. 8

6 Source: Bureau of Transportation Statistics T

- 100 Market.

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; (3) 49 CFR Part 27

-- Nondiscrimination on the Basis of

Disability in Programs and Activities Receiving or Benefiting from Federal Financial Assistance; (4)

14 CFR Part 382

-- Nondiscrimination on the Basis of Disability in Air Travel; and (5) 49 CFR Part 29

--

Government

- Wide Debarment and Suspension (Non

- Procurement) and Government

- Wide Requirements for Drug

Free Workplace (Grants).

8 The certifications are also available on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

rural

- air

- service/essential

- air

- service

.

### 5

Community Comments

Civic officials and the states are welcome to submit comments at any time. We encourage

prospective appl icants to contact communities before they subm it their proposals so that they can

tailor them to the communit y ’ s 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 shortly after the

deadline for carrier p roposals, and ask them to submit their final comments.

This Order is issued under authority delegated in 49 CFR Part 1.25a(b) and re

- delegated to the

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We prohibit Silver Airways Corp. from suspendin g service at Muscle Shoals, Greenville,

Laurel/ Hattiesburg, Meridian, and Tupelo, at the end of the 90

- day notice period, and require it to

maintain its current level of service at the commu nities , as set forth in Appendix C , for an initial

30

- day period t hrough August 7 , 2014 , or until an air carrier capable of provid ing reliable EAS

actually begins service, whichever is first;

2. We request that air carriers interested in providing EAS at Muscle Shoals, Greenville,

Laurel/ Hattiesburg, Meridian, and Tupe lo , submit their proposal, with or without subsidy

requests, no later than May 19 , 2014 . The pr oposal should be emailed to:

michael.f.martin@dot.gov with the title “Proposal to Pro vide EAS at Muscle Shoals, G reenville,

Laurel/ Hattiesburg, Meridian, and/or Tupelo 9 

### ”;

2. Th ese docket s will remai n open until further O rder of the Department; and

3 . We will serve copies of this O rder on the mayor s of Muscle Shoals, Greenville, Hattiesburg,

Laurel, Meridian, and Tupelo

, the airport manager s of Northwest Alabama Regional Airport

, Mid

- Delta Regional Airport, Hattiesburg

- Laurel Regional Airport, Meridian Regional Airport,

and Tupelo Regional Airport, and the service list for th ese docket s

.

9 Questions regarding filings in response to this order shou ld be directed to Mich ael Martin at 202

- 366

- 6494 , or via

email at mail to:mic hael.f.martin @dot.gov

.

### 6

Persons entitled to petit ion the Department for review of this Order under the Department’s

Regulations, 14 CFR Part 385.31(a), must file such petitions within seven (7) days after the date

of service of this Order.

This Order will be effective immediately, and the filing of a pe tition for review shall not preclude

its effectiveness.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available

o nline at w ww.regulations.gov

.

### Appendix A

AREA MAP

Maps generated by the Great Circle Mapper

- copyright © Karl L. Swartz

### Appendix B

Page 1 of 5

Muscle Shoals, Alabama

Quarter Year Deplanements Enplanements Total Traffic Enplanements

per Day

1 2010 1,501 1,562 3,063 20

2 2010 2,071 2,194 4,265 27

3 2010 2,175 2,257 4,432 28

4 2010 2,468 2,567 5,035 32

Annual

Totals 8,215 8,580 16,795 27

1 2011 1,709 1,775 3,484 23

2 2011 1,866 1,915 3,781 24

3 2011 1,387 1,423 2,810 18

4 2011 2,207 2,251 4,458 28

Annual

Totals 7,169 7,364 14,533 23

1 2012 1,730 1,779 3,509 23

2 2012 1,044 930 1,974 13

3 2012 943 946 1,889 12

4 2012 433 411 844 5

Annual

Totals 4,150 4,066 8,216 13

1 2013 499 509 1,008 7

2 2013 566 552 1,118 7

3 2013 504 499 1,003 6

4 2013 489 453 942 6

Annual

Totals 2,058 2,013 4,071 7

### Appendix B

Page 2 of 5

Greenville, Mississippi

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per Day

2010 1 1055 1088 2,143 14

2010 2 1376 1450 2,826 18

2010 3 1652 1752 3,404 22

2010 4 1792 1840 3,632 23

Ann ual

Totals 5,875 6,130 12,005 19

2011 1 1390 1408 2,798 18

2011 2 1784 1877 3,661 23

2011 3 1897 1903 3,800 24

2011 4 2010 2008 4,018 25

Annual

Totals 7,081 7,196 14,277 23

2012 1 1289 1277 2,566 17

2012 2 1544 1563 3,107 20

2012 3 1463 1484 2,947 19

2012 4 814 793 1,607 10

Annual

Totals 5,110 5,117 10,227 16

2013 1 764 753 1,517 10

2013 2 583 734 1,317 8

2013 3 716 679 1,395 9

2013 4 635 658 1,293 8

Annual

Totals 2,698 2,824 5,522 9

### Appendix B

Page 3 of 5

Hattiesburg/Laurel, Mississipp i

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per Day

2010 1 3205 2928 6,133 40

2010 2 3395 3121 6,516 42

2010 3 3501 3367 6,868 44

2010 4 3550 3326 6,876 44

Annual

Totals 13,651 12,742 26,393 42

2011 1 2974 2876 5,850 38

2011 2 3747 3617 7,364 47

2011 3 3752 3640 7,392 47

2011 4 4485 4240 8,725 55

Annual

Totals 14,958 14,373 29,331 47

2012 1 3629 3375 7,004 45

2012 2 2651 2739 5,390 35

2012 3 3093 3364 6,457 41

2012 4 1407 1274 2,681 17

Annual

Totals 1 0,780 10,752 21,532 34

2013 1 1666 1505 3,171 21

2013 2 1523 1492 3,015 19

2013 3 1518 1445 2,963 19

2013 4 1382 1349 2,731 17

Annual

Totals 6,089 5,791 11,880 19

### Appendix B

Page 4 of 5

Meridian, Mississippi

Quarter Year Deplanements Enplanements Total

Traff ic Enplanements

per Day

2010 1 3825 3671 7,496 49

2010 2 4042 4364 8,406 54

2010 3 4222 4257 8,479 54

2010 4 4332 4480 8,812 56

Annual

Totals 16,421 16,772 33,193 53

2011 1 3858 3869 7,727 50

2011 2 4181 4720 8,901 57

2011 3 3972 4151 8,123 51

2011 4 4024 4339 8,363 53

Annual

Totals 16,035 17,079 33,114 53

2012 1 3792 3841 7,633 50

2012 2 3973 4364 8,337 53

2012 3 3990 4330 8,320 53

2012 4 1883 1797 3,680 23

Annual

Totals 13,638 14,332 27,970 45

2013 1 1909 1573 3,482 23

2013 2 1652 1583 3,235 21

2013 3 1539 1616 3,155 20

2013 4 1333 1416 2,749 17

Annual

Totals 6,433 6,188 12,621 20

### Appe ndix B

Page 5 of 5

Tupelo, Mississippi

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per Day

2010 1 2267 2275 4,542 29

2010 2 2940 3103 6,043 39

2010 3 3508 3631 7,139 45

2010 4 2936 2998 5,934 38

Annual

Totals 11,651 12,007 23,658 38

2011 1 2593 2687 5,280 34

2011 2 2895 3164 6,059 39

2011 3 2690 2938 5,628 36

2011 4 2663 2818 5,481 35

Annual

Totals 10,841 11,60 7 22,448 36

2012 1 2024 2132 4,156 27

2012 2 2128 2310 4,438 28

2012 3 1949 1949 3,898 25

2012 4 1382 1323 2,705 17

Annual

Totals 7,483 7,714 15,197 24

2013 1 1353 1319 2,672 17

2013 2 1696 1434 3,130 20

2013 3 1469 1462 2,931 19

20 13 4 1489 1505 2,994 19

Annual

Totals 6,007 5,720 11,727 19

### Appendix C

Essential Air Service to be Maintained at Muscle Shoals, Alabama, Greenville,

Laurel/Hattiesburg, Meridian, and Tupelo, Mississippi

Effective Period: August 7, 2014 , until further Departme nt action

Hub airport served: Hartsfield

- Jackson Atlanta International Airport (ATL)

Scheduled Service 1 

### : 12 weekly nonstop round trips to Muscle Shoals

12 weekly one

- stop round trips to Greenville

12 weekly nonst op round trips to Hattiesburg

13 weekly nonstop round trips to Meridian

12 weekly nonstop round trips to Tupelo

Aircraft: 34

- passenger Saab 340

1 Greenville and Tupelo negotiated a lower level of service in Order to improve reliability of Silver’s operation. We

expect Silve r to maintain service at that level.

### Appendix D

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 out lined

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 support ing 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 w ith

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 con sider 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, terminates or reduces payments for

servi ce 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 prov ide 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.

Funds may not be available for performance under this Order beyond [DATE]. The Government’s

obligation for performance under this Order beyond [DATE], is subject to the availability of funds

from which paymen t 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 sufficient funds are not made avai lable for

performance beyond [DATE], the Department will provide notice in writing to the carrier.

Subsidy contracts are subject to, and incorporate by reference, relevant statutes and Department

regulations, as they may be amended from time to time. How ever, any such statutes, regulations, or

amendments thereto shall not operate to controvert the foregoing paragraph.

All claims for payment, including any amended claims, must be submitted within 90 days of the

last day of the month for which compensation is being claimed. For example, claims for service

provided in July must be filed by October 31 st 

### ; August claims must be submitted by November 30 th



### , and so on.