Order 2011-11-30

Served: November 23, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 23rd of November, 2011

Essential Air Service at

FORT DODGE, IOWA

MASON CITY, IOWA

IRON MOINTAIN, MICHIGAN

BRAINERD, MINNESOTA

THIEF RIVER FALLS, MINNESOTA

WATERTOWN, SOUTH DAKOTA

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

DOCKET OST-2001-10682

DOCKET OST-2001-10684

DOCKET OST-1999-5175

DOCKET OST-2011-0135

DOCKET OST-2001-10642

DOCKET OST-2001-10644

Order Selecting Carrier

Summary

By this order, the Department is selecting Great Lakes Aviation, Ltd., to provide essential air 

service (EAS) at the six communities captioned above at the following annual subsidy rates: 

Brainerd, Minnesota, $959,865; Fort Dodge, $1,798,693; Iron Mountain, $1,707,841; Mason 

City, $1,174,468; Thief River Falls, Minnesota, $1,881,815; and Watertown, $1,710,324, for the

two-year period beginning when Great Lakes inaugurates full EAS at all six communities.

1

Background

On July 15, 2011, Mesaba Aviation, Inc., and Pinnacle Airlines, d/b/a Delta Connection (Delta) 

filed 90-day notices of their intent to suspend their joint service at these six communities 

effective October 13.

2 By Order 2011-9-5 we prohibited Delta from terminating service and 

requested proposals for replacement service. When a carrier files a 90-day notice of its intent to 

suspend service at a community, we have a legal obligation to make every effort to secure 

replacement service and release the suspending carrier. In that context, the decision at these six

 

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.

2 Delta filed notice at a total of twenty four (24) communities. This order addresses only these six communities. 

We will address those other communities in subsequent orders.
- 2 -

communities is very straightforward and so we will issue a final decision now to allow the 

carriers to start to work out smooth transitions as we continue to process the carrier-selection 

decisions at the remaining communities. Except for Brainerd, these communities were all 

receiving subsidized service from Delta with 34-seat Saab 340s at the time it filed notice, and we 

have summarized the service and subsidy levels in the following chart: 

Carrier Proposals

In response to our request for proposals, we received proposals from Bemidji Aviation Services, 

Inc., Great Lakes Aviation (Great Lakes), Multi-Aero, Inc., d/b/a Air Choice One, and Sovereign 

Air.3 While the chart below outlines the critical elements of each carrier’s proposals, there are 

other considerations. Great Lakes indicated that it would not be able to provide the service under 

any of its proposals unless we selected them at a minimum of five communities, so that it would 

have sufficient flights to open a new hub at Minneapolis. Air Choice One’s proposals are all 

stand-alone proposals; however, its aircraft do not meet the two-engine requirement. Sovereign 

Air’s Fort Dodge and Mason City proposals are a two-city package. By Order 2010-10-21, the 

Department dismissed Sovereign Air’s application for Commuter Air Carrier Authority, and by 

Order 2011-2-3, the Department dismissed its petition for reconsideration of that order. 

Therefore, the carrier does not currently have, nor has it any current prospect of receiving soon, 

the requisite operating authorities to provide scheduled air service from either DOT or FAA.

 

3 Sovereign Air submitted a number of options. We summarize above the option that requires the least subsidy. All 

of Sovereign Air’s proposals, our letters to the community requesting comment, and the communities’ comments 

can be seen on www.regulations.gov in each community’s Docket as listed on the front page of this order..

Annual Weekly 

Communities Thru Order Subsidy Hub Stops Frequency

1. Brainerd NA NA NA MSP 0 14

2. Fort Dodge 10/31/2011 2011-6-7 $1,910,995 MSP 0 14

3. Iron Mountain 8/31/2012 2010-6-4 $2,090,534 MSP/DTW 1 21

4. Mason City 10/31/2011 2011-6-7 $1,017,545 MSP 0 14

5. Thief River Falls 10/31/2011 2010-12-9 $1,230,322 MSP 1 12

6. Watertown 10/31/2011 2011-6-6 $1,769,019 MSP 0 14
- 3 -

Bemidji submitted a proposal at only one community, Thief River Falls. It proposed service 

with twin-engine 9-seat Beech C-99 aircraft.4 The carrier requested $2,358,963 annual subsidy 

for nineteen nonstop round trips per week to Minneapolis.

Community Comments

On October 21, the staff sent letters to each community requesting comments regarding the proposals 

and we have now received responses from six communities, summarized below. 

 

4 The Beech C-99 can be configured with up to 15 seats. Bemidji’s proposal configures the aircraft to 9 seats, 

presumably to stay within its Part 135 authority.

Great Lakes Aviation, Ltd.

Brainerd Fort Dodge Iron Mountain Mason City Thief River Watertown

Subsidy $959,865 $1,798,693 $1,707,841 $1,174,468 $1,881,815 $1,710,324

Stops 0 0 0 0 0 0

Hub MSP MSP MSP MSP MSP MSP

Aircraft BE-1900 BE-1900 BE-1900 BE-1900 BE-1900 BE-1900

Engines Two Two Two Two Two Two

Seats 19 19 19 19 19 19

Frequency 24 18 18 24 12 18

Sovereign Air 3/

Brainerd Fort Dodge Iron Mountain Mason City Thief River Watertown

Subsidy $1,577,562 $1,182,997 $1,577,562 $880,093

Stops 1 0 0 1

Hub MSP MSP MSP MSP

Aircraft J-41 J-41 J-41 J-41

Engines 2 2 2 2

Seats 30 30 30 30

Frequency 19 19 19 14

Multi-Aero, Inc., d/b/a Air Choice One

Brainerd Fort Dodge Iron Mountain Mason City Thief River Watertown

Subsidy $2,677,806 $2,874,914 $2,522,445 $2,039,463 $2,682,627

Stops 0 0 0 1 0

Hub MSP MSP MSP MSP MSP

Aircraft C-208 C-208 C-208 C-208 C-208

Engines 1 1 1 1 1

Seats 9 9 9 9 9

Frequency 36 36 47 18 36
- 4 -

Brainerd

Great Lakes was the only carrier to submit a proposal for Brainerd. The Mayor of Brainerd stated 

that he is “disappointed in the outcome of the bid process, but thankful that we are EAS eligible and 

will continue to have air service.” The Mayor endorsed the comments of the Airport Manager and 

business community, which were also disappointed with the size and seating capacity of the B-1900s 

proposed by Great Lakes, compared to the significantly larger equipment they replace, as well as the 

lack of lavatories and flight attendants, and their reduced ability to handle golf clubs, hockey bags, 

and other accessories. The community was concerned that Great Lakes’ 19 seat Beech 1900 would 

not always accommodate the early morning passengers that could be accommodated on the larger 34-

seat Saab 340 currently operated by Delta. The community was especially frustrated that they were 

gearing up for a jet bridge at their terminal, but that the Beech 1900 requires ground boarding, both at 

Brainerd and at the hub, Minneapolis.

Fort Dodge

The City of Fort Dodge endorses the proposal of Great Lakes, but recommends that Great Lakes 

increase the frequency from three round trips per day to four. The city notes the importance of 

competitive and low fares, on-time performance, and minimum cancellations. The community 

endorses the “unprecedented cooperation between Delta and Great Lakes” which will “provide 

our region with seamless worldwide connectivity by offering interline and ticketing 

arrangements with Delta Airlines.” 

The airport commission supports Great Lakes, but would like to have the same frequency of 

service as Mason City, and was also concerned that its fares be competitive with that nearby 

airport.

Iron Mountain

The Dickinson County Board of Commissioners “strongly supports the bid of Great Lakes Aviation. 

The 19-seat Beech 1900D aircraft has proved to be a reliable aircraft for weather conditions in the 

Upper Peninsula. The support of Delta Airlines for Great Lakes through an interline and ticketing 

arrangement, code-shares and booking capability on delta.com enhances the attractiveness of Great 

Lakes.” 

Mason City

The airport manager of Mason City recommends the selection of Great Lakes. “First and foremost, 

as good financial stewards, we must evaluate the cost difference between the three proposals.” Great 

Lakes' proposal is much less expensive, requiring $1,174,468, vs. $2,522,445 for Air Choice One and 

$1,577,562 for Sovereign Air.

5 Also, Mason City prefers that its service not be tagged with Fort 

Dodge, as Sovereign Air proposes. It notes that while Air Choice One proposes a higher frequency 

in view of its smaller aircraft, those aircraft are not pressurized, unlike those of Great Lakes. Finally, 

the community indicates that “A very important point to consider was that Sovereign Air is currently 

trying to acquire its funding and scheduled-service authority.” Great Lakes currently has “more 

interline agreements, more code-shares and the ability to issue frequent flyer miles on Delta.” 

 

5 Sovereign Air requested $3,155,123 for Fort Dodge/Mason City combined, and we have assigned half of that 

package to Mason City for comparison purposes. 
- 5 -

Thief River Falls

The Thief River Falls Regional Airport Authority favors Great Lakes because its baggage handling 

and interline agreements at Minneapolis allow for seamless service to the final destination, and 

because of its general e-ticketing through Delta.com. Great Lakes’ proposed non-stop service to 

Minneapolis is critically important to the community. “[C]ommunity comments regarding air service 

have overwhelmingly identified the current one-stop structure as a major factor for not utilizing the 

service [more].” Sovereign Air and Air Choice One both proposed one-stop service. While Bemidji 

Aviation proposes three nonstops a day to Minneapolis, the community is concerned that it provides 

“limited ability for passengers to connect to other destinations. 

Watertown

The airport manager indicates that he visited with both Air Choice One and Great Lakes, and 

appreciated their time and interest in proposing service. He notes that the interior of the Air Choice 

One aircraft are configured in an executive style that could prove very comfortable. However, while 

the aircraft is important, 

“it is the ease of use of the entire service that matters the most to the public. Great Lakes 

Aviation has more interline agreements, more code-shares, and the future ability to issue 

frequent flyer miles on Delta. Air Choice one is working on agreements for ticket and 

baggage with Delta and other airlines. However, they are not finalized. ...Great Lakes will 

have the ability to have tickets purchased from Delta.com, is currently listed on major travel 

websites, and can issue boarding passes through to the destination where Air Choice One 

does not.” 

Decision

After reviewing all the carriers’ proposals and the communities’ comments, the carrierselection decisions are very straightforward, and we have decided to select Great Lakes. 

All of the communities support the selection of Great Lakes, and the proposals of each of the 

other applicants do not meet minimum program requirements. Air Choice One operates singleengine aircraft, and the EAS program ensures communities of service with twin-engine aircraft

(49 U.S.C. 41732(b)(5). As noted by several of the communities, Sovereign Air does not 

currently have the requisite authority to operate their proposed service from either the Federal 

Aviation Administration or the Department. In addition, we find that the service levels proposed 

by Great Lakes are responsive to our Request for Proposals and that its subsidy levels are 

reasonable. Finally, though not determinative, we note that Delta is working with Great Lakes in 

an attempt to make the connecting service at Minneapolis as seamless as possible, as noted in 

Delta’s letter dated October 20: 

“Due to the retirement of our 34-seat Saab aircraft fleet, Delta no longer has suitable 

aircraft to serve the smaller EAS markets. To that end, we are cooperating with Great 

Lakes Aviation to enhance their EAS bids in nine small communities where they 

recently submitted bids. If Great Lakes is selected, Delta intends to assist Great Lakes 

through an interline and ticketing arrangement, participation in our SkyMiles frequent 

flyer program, and booking capability on Delta.com.”
- 6 -

The communities have expressed appreciation for Delta’s support in this endeavor, which is 

tantamount to a code-share arrangement in many ways and promises to provide the communities 

with seamless access to the national air transportation system. 

Service Transition

We expect Great Lakes and Delta to work together to make a smooth transition at these 

communities. In that regard, before Delta suspends its service we expect it to notify any 

passengers holding reservations for travel after the suspension date, to assist those passengers in 

making alternate air transportation arrangements, or to provide a refund of the ticket price, without 

penalty, if requested. In this regard, the EAS staff will be working with Delta to establish new 

hold-in subsidy rates as the current contracts become eligible for renegotiation.

Certifications

We shall make these selections contingent upon the Department’s receiving properly executed

certifications from Great Lakes that it is in compliance with the Department’s regulations 

regarding drug-free workplaces and nondiscrimination, as well as the regulations governing 

lobbying activities.

Carrier Fitness

49 U.S.C. 41737(b) requires that we find an air carrier fit, willing, and able to provide reliable 

service before we may subsidize it to provide essential air service. Great Lakes is subject to the 

Department’s continuing fitness requirements, and no information has come to our attention that 

would cause us to question the carrier’s fitness at this time. We have contacted the Federal 

Aviation Administration, and it has raised no concerns that would negatively affect our fitness 

finding. We therefore conclude that the carriers remain fit to conduct the operations proposed 

here.

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

ACCORDINGLY,

1. We select Great Lakes Aviation, Ltd. to provide essential air service to Brainerd, Minnesota;

Fort Dodge and Mason City, Iowa; Iron Mountain, Michigan; Thief River Falls, Minnesota; and 

Watertown, South Dakota;

2. We set the final rates of compensation for Great Lakes Aviation, Ltd., for the provision of 

essential air service at Brainerd, Minnesota, Fort Dodge and Mason City, Iowa; Iron Mountain, 

Michigan; Thief River Falls, Minnesota; and Watertown, South Dakota; as described in 

Appendix C;
- 7 -

3. We direct Great Lakes Aviation, Ltd., to retain all books, records, and other source and 

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

documentation 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 comes first. Copies of flight 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. We find that Great Lakes Aviation, Ltd., continues to be fit, willing and able to operate as a 

commuter carrier and capable of providing reliable essential air service at the these communities

5. These dockets will remain open until further order of the Department; and

6. We will serve copies of this order on the Mayors and Airport Managers of Brainerd, 

Minnesota, Fort Dodge and Mason City, Iowa; Iron Mountain, Michigan; Thief River Falls, 

Minnesota; and Watertown, South Dakota; Sovereign Air, Multi-Aero, Inc., d/b/a Air Choice 

One, and Great Lakes Aviation, Ltd..

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.gov
Appendix A

Nonstop Great Circle Miles to Minneapolis (MSP)

Brainerd, BRD 114

Fort Dodge, FOD 168

Iron Mountain, IMT 257

Mason City, MCW 119

Thief River Falls (TVF) 261

Watertown, ATY 193
Appendix B

Page 1 of 6

Great Lakes Aviation, Ltd. Essential Air Service 

to be Provided to Brainerd, Minnesota

Effective Period: Two-year period beginning when Great Lakes begins full EAS at each of these 

communities through the 24th month thereafter.

Service: 24 nonstop round trips per week to Minneapolis (MSP).

Aircraft: Beech 1900D, 19 seats.

Rate per Eligible One-Way Flight: $391 1

Weekly Ceilings: $18,768 2

Note: 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 this rate, 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 contract 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 order beyond September 30, 2012. The Government’s 

obligation for performance under this order beyond September 30, 2012, is subject to 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 September 30, 2012, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 30, 2012, the 

Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of service provided under this order.

 

1 Annual compensation of $959,865 divided by 2,454 estimated annual completed departures and arrivals:

24 flights/week x 2 directions x 52 weeks x 313/312 x 98 percent completion.

2 $391 x 48 flights per week = $18,768.
Appendix B

Page 2 of 6

Great Lakes Aviation, Ltd. Essential Air Service 

to be Provided to Fort Dodge, Iowa

Effective Period: Two-year period beginning when Great Lakes begins full EAS at each of these 

communities through the 24th month thereafter.

Service: 18 nonstop round trips per week to Minneapolis (MSP).

Aircraft: Beech 1900D, 19 seats.

Rate per Eligible One-Way Flight: $978 1

Weekly Ceilings: $35,208 2

Note: 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 this rate, 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 contract 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 order beyond September 30, 2012. The Government’s 

obligation for performance under this order beyond September 30, 2012, is subject to 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 September 30, 2012, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 30, 2012, the 

Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of service provided under this order.

 

1 Annual compensation of $1,798,693, divided by 1,840 estimated annual completed departures and arrivals:

18 flights/week x 2 directions x 52 weeks x 313/312 x 98 percent completion.

2 $978 x 36 flights per week = $35,208.
Appendix B

Page 3 of 6

Great Lakes Aviation, Ltd. Essential Air Service 

to be Provided to Iron Mountain, Michigan

Effective Period: Two-year period beginning when Great Lakes begins full EAS at each of these 

communities through the 24th month thereafter.

Service: 18 nonstop round trips per week to Minneapolis (MSP).

Aircraft: Beech 1900D, 19 seats.

Rate per Eligible One-Way Flight: $928 1

Weekly Ceilings: $33,408 2

Note: 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 this rate, 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 contract 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 order beyond September 30, 2012. The Government’s 

obligation for performance under this order beyond September 30, 2012, is subject to 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 September 30, 2012, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 30, 2012, the 

Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of service provided under this order.

 

1 Annual compensation of $1,707,841, divided by 1,840 estimated annual completed departures and arrivals:

18 flights/week x 2 directions x 52 weeks x 313/312 x 98 percent completion.

2 $928 x 36 flights per week = $33,408.
Appendix B

Page 4 of 6

Great Lakes Aviation, Ltd. Essential Air Service 

to be Provided to Mason City, Iowa

Effective Period: Two-year period beginning when Great Lakes begins full EAS at each of these 

communities through the 24th month thereafter.

Service: 24 nonstop round trips per week to Minneapolis (MSP).

Aircraft: Beech 1900D, 19 seats.

Rate per Eligible One-Way Flight: $479 1

Weekly Ceilings: $22,992 2

Note: 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 this rate, 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 contract 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 order beyond September 30, 2012. The Government’s 

obligation for performance under this order beyond September 30, 2012, is subject to 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 September 30, 2012, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 30, 2012, the 

Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of service provided under this order.

 

1 Annual compensation of $1,174,468, divided by 2,454 estimated annual completed departures and arrivals:

24 flights/week x 2 directions x 52 weeks x 313/312 x 98 percent completion.

2 $479 x 48 flights per week = $22,992.
Appendix B

Page 5 of 6

Great Lakes Aviation, Ltd. Essential Air Service 

to be Provided to Thief River Falls, Minnesota

Effective Period: Two-year period beginning when Great Lakes begins full EAS at each of these

communities through the 24th month thereafter.

Service: 12 nonstop round trips per week to Minneapolis (MSP).

Aircraft: Beech 1900D, 19 seats.

Rate per Eligible One-Way Flight: $1,534 1

Weekly Ceilings: $36,816 2

Note: 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 this rate, 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 contract 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 order beyond September 30, 2012. The Government’s 

obligation for performance under this order beyond September 30, 2012, is subject to 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 September 30, 2012, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 30, 2012, the 

Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of service provided under this order.

 

1 Annual compensation of $1,881,815, divided by 1,227 estimated annual completed departures and arrivals:

12 flights/week x 2 directions x 52 weeks x 313/312 x 98 percent completion.

2 $1,534 x 24 flights per week = $36,816.
Appendix B

Page 6 of 6

Great Lakes Aviation, Ltd. Essential Air Service 

to be Provided to Watertown, South Dakota

Effective Period: Two-year period beginning when Great Lakes begins full EAS at each of these 

communities through the 24th month thereafter.

Service: 18 nonstop round trips per week to Minneapolis (MSP).

Aircraft: Beech 1900D, 19 seats.

Rate per Eligible One-Way Flight: $930 1

Weekly Ceilings: $33,480 2

Note: 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 this rate, 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 contract 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 order beyond September 30, 2012. The Government’s 

obligation for performance under this order beyond September 30, 2012, is subject to 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 September 30, 2012, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 30, 2012, the 

Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of service provided under this order.

 

1 Annual compensation of $1,710,324, divided by 1,840 estimated annual completed departures and arrivals:

18 flights/week x 2 directions x 52 weeks x 313/312 x 98 percent completion.

2 $930 x 36 flights per week = $33,480.