### O rder: 2014

- 8

- 20

Served: August 28, 2014



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 28th of August , 20 1 4

ORDER RESOLICITING PROPOSALS

Summary

By this O rd er, the Department is re

- soliciting proposals from air ca rriers interested in

providing E ssential A ir S ervice (EAS) at Kearney, North Platte, and /or Scottsbluff, Nebraska

, for a new contract period beginning November 1, 201 4 , with or without subsidy

. (See

Appendix A for a map). Air c arriers should file their proposals no later than

Septembe r 29

, 2014

.

Background

By Order 2014

- 4

- 30 (April 29, 2014 ), the Department requested proposals from air carriers

interested in providing EAS at Kearney, North Platte, and or Scottsbluff with a due date of

May 28, 2014, which was subsequently extended unti l June 12, 2014. In response to our

request, we received a proposal from the incumbent carrier, Great Lakes Aviation, Ltd. (Great

Lakes).

The complet e publ ic file for EAS at the three communities may be accessed online through

the Federal Dockets Manage ment System at www.regulations.gov by entering each

community’s respective docket number in the “Search for Rules, Comments, Adjudications,

or Supporting Documents” field.

Summary of Great Lakes’ p roposal

Great L akes proposed an inseparable package for Kearney, North Platte, and Scottsbluff that

would provide 18 round trips per week from each community to Denver International Airport Essential Air Service at

KEARNEY, NEBRASKA

NORTH PLATTE, NEBRASKA

SCOTTSBLUFF, NEBR ASKA

Under 49 U.S.C. § 41731 et seq

. Docket DOT

- OST

- 1996

- 1715

Docket DOT

- OST

- 199 9

- 5173

Docket DOT

- OST

- 2003

- 14535

### - 2

-

(DEN) using Beechcraft 1900D aircraft

. 1 

### There are two annual subsidy rates

, depe nding on

the number of sale able seats on its Beechcraft 1900 D aircraft. The annual subsidy at Kearney

is $2,993,938 for 9

- seats and $2,034,866 for 19

- seats. At North Platte the annual subsidy is

$2,818,163 for 9

- seats and $2,117,119 for 19

- seats. At Sco ttsbluff the annual subsidy is

$2,443,523 for 9

- seats and $1,765,849 for 19

- seats.

In addition, Great Lakes mentioned that as an alternative to its 9

- seat proposals, the airline

would commit to upgrading to 37

- seat or larger regional jet aircraft at each of the

communities, operating 12 round trips a week to DEN for the same annual subsidy as the 9

- seat proposals.

Community Comments

On June 13, 2014, the Department solicited community comments on Great Lakes’ proposal

. A ll three communities re sponded, a nd requested that the Department reject the proposal and

re

- solicit a new round of proposals.

Mr. Michael W. Morgan, City Manager of Kearney, and The Honorable Dwight Livingston,

Mayor of North Platte, submitted identical letters that detailed their reaso n s for not supporting

Great Lakes’ bid. They cited their concern that the proposal for 9

- seat aircraft would greatly

diminish passenger traffic at their communities and expressed skepticism that 9

- seat aircraft

would improve the airline’s servic e reliabil ity . In addition, both commenters stated that they

needed greater clarity on the regional jet and 19

- seat aircraft proposal ; specifically, the

timeline that Great Lakes would commence such service and the reliability of such service.

Darwin Skelton, Ai rport Director for Western Nebraska Regional Airport (Scottsbluff)

, echoed the sentiments expressed by Kearney and North Platte, adding that his community has

always done its best to work with Great Lakes in the past and it hope s they will submit a new

bid that is clearer and more descriptive.

Request of Proposals

As outlined above, at the communities’ request, we are re

- soliciting proposals from carriers

interested in providing EAS at Kearney, North Platte, and/or Scottsbluff, with or without

subsidy , for a new contract period beginning November 1

, 201 4

. Carriers should file their

proposals no later than September 29

, 20 14

. Staff will the n docket the proposals, thereby

making them public

. Shortly afterwards, we will provide a summary of the proposals to the

communit y and ask them to submit their final comments. We will give full consideration to

all proposals that are timely filed. 2

1 Many Great Lakes Beechcraft 1900D aircraft have been reconfigured to 9 seats from 19 seats. Great Lakes

states it will return to 19 seats when restricted Air Transport Pilot certificates have been issued to crew.

2 Carriers should not expect th e Department to accept late fil ings. In cases where a carrier proposes to prov ide

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

provided without such compensation, we typically will not proceed with the carrier

- selection case. Instead, we

simply rely on that carrier’s subsidy

- free service as proposed.

### - 3

-

Interested air 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; in such cases, of course, we will

give all applicants the same opportunity. We also retain the discretion to reject outrigh t all

unreasonable or unrealistic proposals and re

- sol icit a new round of proposals.

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 f or their

proposals. Air carrier proposals should be submitted to the Department with all materials

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

www.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

being requested. The applicants can make their own judgments as to the level of detail they

wish to prese nt; however, we recommend they include information concerning proposed

schedules and projected block hours . In addition, applicants are urged to provide financial

data supporting their subsidy requests, including information on their projected expenses an d

revenues. We strongly encourage clear, well

- documented proposals that will facilitate their

evaluation by the affected communit ies and the Department. 3 

### In that regard, we note that the

communities requested that the applicants be more specific regardin g the exact service levels

and start dates.

Proposals should provide sufficient capacity to accommodate historical levels of traffic. In

order to assist air carriers in developing traffic and revenue projections for their proposals, we

have provided a su mmary of historical passengers in Appendi x B. 4 

### F or the year ended

December 31

, 2013 , Kearney, North Platte, and Scottsbluff averaged 42, 27, and 30 passenger

enplanements per day, respectively : We note also that passenger levels have generally been

incre asing the last several years. The Department expects proposals that are co nsistent with

what the communities currently receive

, with service to a large

- or medium

- hub airport that

provides numerous connecting opportunities to the national air transportati on system.

Specifically, for 30

- passenger or larger aircraft, we expect proposals for two round trips per

week day and weekend (1 2 per week). For proposals with aircraft seating around 19

passengers, the Department expects three round trip s each weekday a nd weekend (18 per

week). For proposals with 8/9

- seat aircraft, we would expect proposals for four or five round

trips per day (24

- 30 per week). Air c arriers are also welcome to propose more than one

service option, if they choose. T hey also need not li mit themselves to the se requirements if

3 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 five factors: (a) service reliability; (b) contractual and marketing arrangements with a larg er

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 officials 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

Appropriations Act, 2014, Public Law No. 113

- 76, 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

Essential Air Service 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 Source: Bureau of Transportation Statistics; Schedule T

- 100.

### - 4

-

they envision other, potentially more attractive service possibilities

-- different hubs or length

of contract, for example

-- with subsidy requirements that remain competitive.

Community Comments

The communities an d State are welcome to submit comments at any time. We encourage

prospective app licants 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

shortly after the deadline for carrier proposals, and ask them to submit their final comments.

Other Carrier Requirements

The Department is responsible for implem enting various Federal statutes governing lobbying

activities, drug

- free workplaces, and nondiscrimination. 5 

### Consequently, all carriers receiving

Federal subsidy for EAS must certify that they are in compliance with Department regulations

regarding drug

- f

ree 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

f rom 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 requiri ng more detailed

information regarding these requirements should contact the Offic e of Aviation Analysis at

(202) 366

- 5903. 6



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

ACCORDINGLY,

1. We request that carriers interested in p roviding Essential Air Service at Kearney, North

Platte, and /or Scottsbluff , Nebraska

, submit their proposals, with subsidy support if necessary

, no later than September 29

, 20 14 . The proposals should be e

- mailed to:

michael.f.martin@dot.gov with the title “Proposal to Provide E AS at Kearney, North Platte,

and/or Scottsbluff

”; 7



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

5 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 Recei ving 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 f or

Drug

- Free Workplace (Grants).

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

- policy/small

- communit y

rural

- air

- service/essential

- air

- service

.

7 Questions regarding filings in response to this O rder may be directed to Michael Martin at (202) 366

- 6494 or

michael.f.martin@dot.gov

.

### - 5

-

3 . We will serve copies of this O rder on the mayor s of Kearney, North Platte

, and

Scottsbluff; Nebraska, the airport manager s of Kearney Regional Airport and North Platte

Regional Airport, and the airport director of Western Nebraska Regional Airport; and the

service list for this docket.

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

Regulations, 14 CFR Part 385.31, 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 petition 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 www.regulations.gov

.

### Appendix A

AREA MAP

Maps generated by the Great Circle Mapper

- copyright © Karl L. Swartz

.

### Appendix B

Page 1 of 3



## Kearney, Nebraska

Quarter Year Deplanements Enplanements T otal

Traffic Enplanements

per Day

2010 1 2162 2210 4,372 28

2010 2 2327 2384 4,711 30

2010 3 2524 2438 4,962 31

2010 4 2361 2403 4,764 30

Annual

Totals 9,374 9,435 18,809 30

2011 1 2423 2439 4,862 32

2011 2 2709 2699 5,408 35

2011 3 2931 29 56 5,887 37

2011 4 2925 2838 5,763 36

Annual

Totals 10,988 10,932 21,920 35

2012 1 2867 2916 5,783 38

2012 2 3185 3118 6,303 40

2012 3 3068 3261 6,329 40

2012 4 3288 3204 6,492 41

Annual

Totals 12,408 12,499 24,907 40

2013 1 3275 31 54 6,429 42

2013 2 3356 3414 6,770 43

2013 3 3377 3321 6,698 42

2013 4 2984 3151 6,135 39

Annual

Totals 12,992 13,040 26,032 42

### Appendix B

Page 2 of 3



## North Platte, Nebraska

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per day

2010 1 1691 1682 3, 373 22

2010 2 2098 2025 4,123 26

2010 3 2165 2254 4,419 28

2010 4 1919 1950 3,869 24

Annual

Totals 7,873 7,911 15,784 25

2011 1 1799 1912 3,711 24

2011 2 2262 2255 4,517 29

2011 3 2313 2395 4,708 30

2011 4 1964 2055 4,019 25

Annual

Totals 8,338 8,617 16,955 27

2012 1 1872 1894 3,766 24

2012 2 2118 2104 4,222 27

2012 3 2273 2296 4,569 29

2012 4 1966 2016 3,982 25

Annual

Totals 8,229 8,310 16,539 26

2013 1 1840 1866 3,706 24

2013 2 2231 2232 4,463 29

2013 3 2243 2296 4 ,539 29

2013 4 1959 2073 4,032 26

Annual

Totals 8,273 8,467 16,740 27

### Appendix B

Page 3 of 3



## Scottsbluff, Nebraska

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per day

2010 1 2094 2107 4,201 27

2010 2 2233 2245 4,478 29

2010 3 2213 2238 4,451 28

2010 4 2332 2136 4,468 28

Annual

Totals 8,872 8,726 17,598 28

2011 1 1963 2036 3,999 26

2011 2 2236 2313 4,549 29

2011 3 2675 2773 5,448 34

2011 4 2243 2224 4,467 28

Annual

Totals 9,117 9,346 18,463 29

2012 1 1931 1987 3,918 25

2012 2 2271 2241 4,512 29

2012 3 2352 2448 4,800 30

2012 4 2368 2378 4,746 30

Annual

Totals 8,922 9,054 17,976 29

2013 1 2217 2348 4,565 30

2013 2 2484 2478 4,962 32

2013 3 2349 2410 4,759 30

2013 4 2149 2268 4,417 28

Annual

Totals 9,199 9,504 18,703 30

### 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, includ ing 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 does not schedule or operate its flig hts 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 servi ce

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, terminates or r educes 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 d o 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, reg ulations, or

amendments thereto shall not operate to controvert the foregoing paragraph.

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 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 performa nce. If sufficient funds are not made available for

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

All claims for payment, including any amended cl aims, must be submitted within 9 0 days of the last

day of the mon th 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.