Order 2011

- 12

- 12 Served: December 20, 2011


### UNITED STA**TES OF A MERICA**  **DEPA RTMENT OF TRA** **NSPORTA TION**  **OFFICE OF THE SECRETA RY**  **WA SHINGTON, D.C.** 
Issued b y the Department of Transportation on the 20 th day

of December, 2011 Essential Air Service at **PO RT A**  **LEX ANDER**  **, A LA** **SKA** Under 49 U.S.C. 41731 et seq
. **DOCKET DOT -** **OST -**  **1999 -** **6244**



### ORDER REQUESTING PROPOSA **LS**
**Summary** By this Order, the Department is requesting proposals , by January 18 , 2012 , from carriers interested in providing E ssential Air S ervice (EAS) at Port Alexander, Alaska, for a new two
ye ar period, with or without subsidy, beginning March 1 , 2012 . (See Appendix A for map.) **Background** By Order 2009

- 12

- 3 , issued December 7, 2009, the Department selected Harris Aircraft Services , Inc . ( “H arris Air”), to provide subsidized EAS at Port Alexander for the two
- ye ar period through February 2 9 , 20 1 2

. That order established an annual subsidy rate of $ 60,083 for service consisting of two nonstop round trips each week to Sitka with three

- seat Cessna 185 aircraft. **Request for**  **Proposals** As the end of the current rate term approaches , in order to provide sufficient time to complete the carrier

- selection process before the current contract expire s , we are here requesting proposals from carriers interested in providing service at Port Alexander, with or without subsidy support, for the two
- year period beginning March 1 , 2012

. Carriers should file their proposals no later than January 18 , 2012

. S hortly thereafter, our staff will docket the proposals, thereb y making them public, and direct each carrier to serve a copy o f its proposal on the civic parties and other applicants. We will then provide a summary o f the proposals to the community

and state and ask them to submit their final comments. We will give full consideration to all proposals filed in a timely manner. 1

1 In cases where a carrier proposes to provide Essential Air Service without subsidy and we determine that service can be reliably provided without such com pensation, wetypically do not proceed with the carrier selection case. Instead, we sim ply rely on that carrier’s subsidy

- free service as proposed.2

Interested carriers should prepare their proposals with every expectation that their initial proposals will also be their final and only proposals. 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 outright all unreasonable or unrealistic proposals and solicit a new round of proposals. H owev er, we anticipate that negotiation or rejection will remain only occasional exceptions to the rule. 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 for their proposals. 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, they might want to include proposed schedules as well as supporting data for their subsidy requests, such as projected block hours, revenues and expenses. We strongly encourage clear, well

- documented proposals that will facilitate their evaluation by the affected communities and the Department. 2 Proposals should provide sufficient capacity to accommodate historical levels. S pecifically for Port Alexander, we request proposals for two nonstop round trips a week to Sitka with small aircraft (ten seats or less). In order to assist carriers in making their traffic and revenue forecasts, we have included historical traffic in Appendix B. Typ ically in Alaska, mail and freight flows are as ymmetrical, with up to 90% of total mail and freight flowing outbound from the hub to the EAS communities. H owever, that is not the case with Port Alexander. Harris Air reports that it carries only minimal cargo and no mail, because those items are generally transported via barge. Historical traffic data (Appendix B) show that two round trips a week is sufficient to fulfill the EAS needs of the community

. We encourage proposals that meet these requirements in an efficient manner. C arriers are also welcome to propose more than one option, if they choose; they

need not limit themselves to those requirements if they envision other, potentially more attractive service possibilities

– different hubs or longer

- term contracts , for example

– with subsidy requirements that remain competitive.

2 In se lecting a carrier to provide subsidized Essential Air S ervice to an Alaskan community , 49 U.S.C. 41733(c)(1) directs us to consider five factors: (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub; (3) interline arrangements with a larger carrier at the hub; (4) community views , giving substantial we ight to the views of the elected officials representing the users; and (5) the experience of the applicant in providing, in Alaska, scheduled air service or significant non - scheduled service. In addition , the Consolidated Appropriations Ac t, 2008, Public Law 110

- 161 , 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

. Appendix C contains the general provisions governing essential air service; as in the past, these provisions will be included in the selection order as part of the Department’s authorization of subsidy for the selected service.3

**New Filing Procedures** Carrier propos als 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. **Other Carrier Requirements** The Department is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces and nondiscrimination. 3 Consequently, all carriers receiving Federal subsidy

to support essential air service 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 rate term must also certify that they are in compliance with the regulations governing lobbying activities. All carriers that plan to submit proposals involving subsidy should submit the required certifications along with their proposals. Interested carriers requiring more detailed information regarding these requirements, as well as copies o f the certifications, should contact the Office of Aviation Analysis at (202) 366

- 5903. The Department is prohibited from paying subsidy to carriers that do not submit these documents. 4 **Community Comments** Civic officials and the State are welcome to submit comments at any time. We encourage prospective applicants to contact the community before they submit their proposals so that they c an tailor them to the community ’ s needs, as they will not be able to amend them after the due date. As noted earlier, w e will provide a copy of the proposals to the civic parties and ask them to submit their final comments shortly after January

1 8 , 2012 , the due date for carrier proposals. This Order is issued under authority delegated in 49 CFR 1.56a(f) and re - delegated to the Director, Office of Aviation Analysis. **ACCORDINGLY,** 1. We request that carriers interested in providing E ssential Air S ervice at Port Alexander , Alaska, submit their proposals, with or without subsidy requests, no later January 18 , 2012

. The proposals should be emailed to: EAS@dot.gov with the title “Proposal to Provide Essential Air Service at Port Alexander, Alaska (Docket DOT

- OST

- 1999

- 6244 ) ” ; 5 2. D ocket DOT

- OST

- 1999

- 6244 will remain open until further order of the Department; and

3 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 1 964; 49 CFR Part 27

– Nondiscrimination on the basis of disability in programs and activities receiving or benefiting from Federal financial assistance; and 14 CFR Part 382

– Nondiscrimination on the basis of disability in air travel; and (3) 49 CFR Part 29

– Government

-wide debarment and suspension (non

-procurement) and government

-wide requirements for drug

- free workplace (grants). 4 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html. 5 Questions regarding filings in response to this order should be directed to Scott Faulk at scott.faulk@dot.gov.4

3. The D epartment will serve a cop y of this Order on the civic officials of Port Alexander, the Alaska Department of Transportation and Public Facilities, and the parties listed in Appendix D. Persons entitled to petition the Department for review of this Order under the Department’s Regulations, 14 CFR 385.50, must file such petitions within ten (10) days after the date of service of this O rder. This Order will be effective immediately, and the filing of a petition for review shall not preclude its effectiveness. By :

**TODD M. HOMAN** Director Office of Aviation Analysis (SEAL) An electronic version of this document is available on the World W ide Web at http://www.regulations.gov

### Appendix A

AREA MAP

### Appendix B

**Hi storical Origin** 
**- Destination Passenger Traffic from Port Alexander, Alaska to Sitka, Alaska**  **1**


## 2008 2008 Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 9 4 11 20 20 19 18 19 4 6 18 16 164



## 2009 2009 Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 11 3 13 12 17 27 22 18 20 6 10 6 165



## 2010 2010 Total Jan Feb Mar A pr May Jun Jul Aug Sep Oct Nov Dec 4 8 15 13 21 2 33 15 9 7 11 4 142



## 2011 2011 Total Jan Feb Mar Apr May Jun Jul Aug Sep 8 1 8 12 20 17 14 23 16 119

1 Source: Bureau of Transportation Statistics; Schedule T

- 100

### App endix C

**Ex a**  **mple of General Terms and Conditions for Essential A** **ir Service** The carrier understands that it may forfeit its compensation for any f lights 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

e ligibility

f or a flight that has not been completed, such as certain weather cancellations, only c ompleted 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 j eopardize its entire subsidy c laim 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. S hould circumstances warrant, the Department may l ocate 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 p ay ment 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 reduc es pay ments 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 pay ments 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 pay ment. Subsidy c ontracts are subject to, and incorporate by reference, relevant statutes and Department regulations, as they may b e amended from time to time. H owever, 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 March 1, 2014

. The Department's obligation for performance under this order beyond March 1, 201 4 , is subject to the availability o f appropriated funds from which pay ment for services can be made. No legal liability on the part of the Government for any pay ment may

arise for performance under this order beyond March 1, 2014 , until funds are made available to the Department for performance. If funds are not made available for performance beyond March 1, 2014 , the Department will provide notice in writing to the carrier. All claims for pay

ment must be submitted within 60 days of the last day o f servi ce provided under this order.

### Appendix D Page 1 of 2

SERVICE LIST FOR THE STATE OF ALASKA
Aaron Air Golden Plover Air Aero Tech Flight Service, Inc. Grant Aviation, Inc. Air Excursions Great Northern Air Guides Air Lift Alaska Gulf Air Taxi, Inc. Air Madura Gulf Aviation, Inc. Alaska Air Carriers Association Gulkana Air Service, Inc. Alaska Airlines, Inc. Hageland Aviation Services, Inc. Alaska Bush Carrier, Inc. Haines Airways, Inc. Alaska Central Express , Inc. Heli

- Lift, Inc. Alaska Coastal Airlines, Inc. Homer Air Alaska Fly ’ N Fish Charters Hudson Air Service, Inc. Alaska Flyers Iliamna Air Taxi, Inc. Alaska Helicopters, Inc. Island Air Service Alaska Island Air, Inc. Island W ing s Air Service Alaska Seair Adventures Jim Air, Inc. Alaska W est Air, Inc. K2 Aviation Aleutian Air, Ltd. Kachemak Air Service, Inc. Aleutian Specialty Aviation Kachemak Bay Flying Service, Inc. Amerijet International, Inc. Katmai Air Arctic Air Alaska, Inc. Kenai Air Alaska, Inc. Arctic Circle Air Service, Inc. Kenai Aviation Baker Aviation, Inc. Kenai Fjords Outfitters, Inc. Bellair, Inc. Kenair Beluga Lake Float Plane Service Ketchikan Air Service, Inc. Bering Air, Inc. Ketchum Air Service, Inc. Bran

-Air & Branham Adventures Kodiak Air Service Camai Air Koyukon Air, Inc. Canning Air Service Kupreanof Flying Service Cape Smythe Air Service, Inc. Kusko Aviation, Inc. Cassaron Turbo Helicopters L.A.B. Flying Service, Inc. Chugiak Aviation Larry ’ s Flying Service Clearwater Air, Inc. Loken Aviation, Inc. Coastal Helocopters, Inc. Lone Star Airlines, Inc. Cordova Air Service, Inc. Lone W olf Aero Services, Inc. CPA Air Serv ice Maritime Helicopters, Inc. Customized Alaskan Adventures MarkAir Express, Inc. Delta Connection MarkAir, Inc. Denali Air Metroflight, Inc. Egli Air Haul, Inc. Midway Airlines, Inc. Ellis Air Taxi, Inc. Midwest Express Airli nes, Inc. Ellison Air, Inc. Misty Fjords Air & Outfitting ERA Aviation, Inc. Mountain Aviation F.S. Air Service, Inc. Mountain Helicopters Fishing and Flying Nash W est Aviation, Ltd. Fiskehauk Aero Services Natron Air Forty (40) Mi le Air, Ltd. Nordic Air

### Appendix D Page 2 of 2

SERVICE LIST FOR THE STATE OF ALASKA

Frontier Flying Service, Inc. North Star Air Cargo, Inc. Northern Air Cargo, Inc. Umiat Enterprises, Inc. Northwest Airlink Umiat Enterp rises, Inc. Olson Air Service, Inc. Uyak Air Service, Inc. Pacific W ing, Inc. Vernair Peninsula Airways, Inc. Wa rbelow's Air Ventures, Inc. Promech, Inc. Wa rd Air Ram Air, Inc. Wi ngs of Alaska Ray Atkins Registered Guide Wo ods Ai r Service, Inc. Rediske Air, Inc. Wrangell Mountain Air, Inc. Reeve Aleutian Airways, Inc. Wright Air Service, Inc. Regal Air Yukon Helicopters Reid Air Yutana Airlines, Inc. Rust's Flying Service, Inc. Yute Air Alaska, Inc. Ryan Air Service, Inc. Scenic Mountain Air, Inc. Alaska Juneau Aeronautics, Inc. Seaside Air Service Ken Bannon Security Aviation, Inc. E.B. Freeman Seward Flying Service, Inc. A. Edward Jenner Silver Bay Logging, Inc. John McFarlane Skagway Air Service, Inc. Kevin Thomas Soloy Helicopters, Inc. Pat Dempsey Southcentral Air, Inc. Specialized Air Service Spernak Airways, Inc. Sunrise Aviation, Inc. Tamarack Air, Ltd. Tanana Air Service Taquan Air Service, Inc. Tatonduk Outfitters, Ltd. Temsco Helicopters, Inc. Totem Air Trans

-Alaska Helicopters, Inc. Trans

- Porter Alaska, Inc. Tundra Copters, Inc.