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Swanson, Brian (OST) 

From: Swanson, Brian (OST) 

Sent: Thursday, January 20, 2011 11:12 AM 

To: 'dale.janway@cityofcarlsbadnm.com'; 'ssummers@cityofclovis.org'; 

'gbrumfield@cityofclovis.org'; 'jthomas@cityofclovis.org'; 'asilva@cityofdeming.org'; 

'mayor@townofhurleynm.com'; 'mayor@townofsilvercity.org'; 'jsaari@grantcountynm.com'; 

'Truitt, Lee, NMDOT'; 'Robert L. Scavron'; 'Lucero, Jane, NMDOT' 

Cc: Devany, Dennis (OST); 'Chucl< Howell (chowell@flygreatlakes.com)'; 'Greg Kahlstorf'; 

'Seaport/Wings of Alaska, Rob McKinney'; 'Mickey Bowman (mbowma@gulfstreamair.com)'; 

'Alpert, Dan (Bingaman)'; 'Swallow, Kristina (Tom Udall)'; Kim, David (OST); Letteney, Robert 

(OST) 

Subject: Update on the solicitation of comments on EAS proposals at Carlsbad, Clovis, and Silver City, 

New Mexico - Now due February 22 Mar 

All: 

This is a follow-up to my e-mail message of January 11. That message updated you on the essential air service 

(EAS) situation at Carlsbad, Clovis, and Silver City, New Mexico; explained that the Department would rely on 

New Mexico Airlines' proposed subsidy-free flights to serve as EAS at Clovis; and solicited your comments 

and preferences on the proposals under consideration. We based that opinion at Clovis on the fact that under 

49 U.S.C § 41732 (b)(3) of our governing statues, the community is not guaranteed service with 15-seat or 

larger aircraft if subsidy-free service is provided with smaller aircraft. However, after further review, we have 

now determined that the twin-engine, two pilot requirement contained in 49 U.S.C § 41732 (b)(5) is not 

trumped by a subsidy-free proposal. The only exception to the two engine, two pilot requirement is if the 

community received only single pilot, single engine service for 60 or more consecutive days. We are unaware 

of any scheduled air transportation that has not utilized two engines and two pilots at the community for at least 

60 consecutive days at any time since October 31, 1978. As a result, we will not terminate the carrier-selection 

proceeding at Clovis as we said originally but, instead, will continue to process a normal carrier-selection case. 

There has been one additional development in this case. Gulfstream International Airlines, Inc. (Gulfstream) 

has submitted a proposal to serve seven EAS communities in Montana, and the communities recently voted 6-1 

to support Gulfstream. On January 20 Gulfstream sent us an e-mail stating that if the Department selected 

Gulfstream as the EAS carrier in that case, it would be forced to withdraw its proposal for EAS in New Mexico, 

as well as Arizona. We expect to issue a decision on the Montana case within about two weeks. Therefore, 

based on all the above, we will repeat and/or clarify our discussion of the proposals under consideration for 

EAS at the Carlsbad, Clovis and Silver City. 

As previously stated, copies of the proposals may also be accessed online through the Federal Docket 

Management System at: http://www.regulations.gov, by doing a search on by doing a search on DOT-OST2002-12802 (for Carlsbad), DOT-OST-1996-1902 (for Clovis) and DOT-OST-21996-1903 (for Silver City). In 

response to the requests for proposals. Great Lakes, New Mexico Airlines, Gulfstream, and Alaska Juneau 

Aeronautics, Inc. d/b/a SeaPort Airlines (SeaPort) submitted proposals, which are summarized briefly below. 

As in the past, I would also ask you to note that the aircraft types proposed by New Mexico Airlines and 

SeaPort do not meet the two-engine or 15-or-more-passenger-seat standards required by our governing statutes 

(49 U.S.C. § 41732(b)(3) and (b)(6)), although a community can waive these requirements. 

New Mexico Airlines 

New Mexico Airlines submitted "stand-alone" proposals at Carlsbad and Silver City for service to 

Albuquerque, utilizing 9-seat Cessna 208B aircraft. At Carlsbad, the carrier would provide 12 weekly nonstop 

round trips for an annual subsidy requirement of $1,350,253. At Silver City, the carrier would provide 18 

weekly nonstop round trips for $1,332,184. 
Gulfstream 

Gulfstream, utilizing 19-seat Beech 1900 aircraft, submitted a proposal for service at Carlsbad, Clovis and 

Silver City. However, the carrier's proposal for service at the 3 New Mexico EAS communities was also 

packaged together with service at 4 Arizona EAS communities in an "all or nothing" bid. The level of service, 

hub served and annual subsidy requirement at each community is provided in the table below. Silver City will 

receive dual-hub service for a combined annual subsidy of $1,749,879. 

.Community 

Carlsbad 

Clovis 

Silver City 

Weekly 

Round Trips 

12 

12 

6 

6 

Hub Served 

Albuquerque 

Albuquerque 

Albuquerque 

Phoenix 

Annual Subsidy 

Requirement 

$1,749,272 

$2,658,122 

$776,119 

$973,760 

SeaPort 

SeaPort would utilize 9-seat Pilatus PC-12 aircraft and has proposed to operate from non-sterile gates at Silver 

City, Carlsbad and Albuquerque. At Carlsbad, the carrier proposed to provide 12 nonstop round trips per week 

to Albuquerque for a first-year subsidy of $1,156,001 and a second-year rate of $1,152,468. 

At Clovis and Silver City, SeaPort proposed two service options. Option #1 would provide 18 round trips 

between each EAS community and Albuquerque a week for an annual subsidy of $1,449,352. Option #2 would 

provide 14 daily round trips between each EAS community and Albuquerque a week for annual for $1,127,805 

in annual subsidy. Please note that the number of weekly round trips at Silver City for Options #1 and #2 are 

consistent with the text of SeaPort's proposal but differ slightly from the exhibits the carrier submitted. 

Both of SeaPort's proposals include mention of an interline agreement with US Airways; however, the details 

and applicability of the agreement at Albuquerque are not discussed. 

Great Lakes 

Great Lakes, the incumbent carrier at Clovis and Silver City, submitted a proposal with stand-alone options for 

EAS at the two communities, utilizing 19-seat Beech 1900 aircraft. At Clovis, Great Lakes proposed to provide 

12 nonstop round trips per week between the community and Albuquerque or Denver, one-stop over Santa Fe or 

Pueblo at annual subsidy of $1,592,157. At Silver City, the carrier proposes to provide 12 nonstop round trips 

per week between the community and Albuquerque, Phoenix or Denver, one-stop over Santa Fe or a 

combination of Phoenix and Denver via Santa Fe at annual subsidy of $1,594,092. 

Please note that the average passenger fare shown its proposal does not necessarily reflect the average local fare 

passengers would actually pay, but, rather, reflect a prorated portion of the total ticket price (e.g., the Carlsbad -

Albuquerque portion of a Carlsbad - Albuquerque - Washington, D.C. ticket) that the subsidized carrier would 

realize. Also, the fare shown is net of certain charges such as Federal transportation security fees, excise or 

ticket taxes, and Passenger Facility Charges. Of course, carriers have the discretion to charge fares they deem 

appropriate, and the passenger fare presented in the proposal has been developed for subsidy rate computation 

purposes only. Based on the cost elements incorporated in the carriers' computation summary, the carriers 

would have to realize passenger fares comparable to the averages shown in their proposals in order to achieve 

break-even or profitable operations without subsidy. 

You should also note that the carriers' schedules may change to reflect changing conditions (e.g., to better meet 

shifting connecting bank times at the hub). The Department does expect subsidized air carriers to maintain 

well-timed and well-spaced flights in order to ensure full compensation. 
As a result of the confusion over New Mexico Airlines' subsidy-free service at Clovis and today's development 

regarding Gulfstream, we have decided to extend the due date for comments and preferences until February 22. 

Because we expect to decide the Montana case within two weeks, that date should give the communities 

sufficient time after Gulfstream's status in this case is clarified. Please send your comments by fax to 202-366-

7638 or by email to both dennis.devany@dot.gov and brian.swanson@dot.gov. Our rules require that you send 

your comments to carriers as well. If you have any questions, or need more time to reply, please feel free to 

contact Brian Swanson of my staff at 202-366-5392. 

Sincerely, 

Dennis J. DeVany 

Chief, Essential Air Service Division, X-53 

Office of Aviation Analysis