Order 2010-2-18

Served: February 19, 2010

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 19th day of February, 2010

ORDER REQUESTING PROPOSALS AND SYNCHRONIZING CONTRACT 

EXPIRATION DATES

Summary

By this order, the Department is requesting proposals, by March 25, from air carriers interested 

in providing essential air service (EAS) at: Iron Mountain/Kingsford, Michigan; Ironwood, 

Michigan/Ashland, Wisconsin; Manistee/Ludington, Michigan; and/or Escanaba, Michigan, for 

a new two-year period, beginning September 1, 2010, with or without subsidy. (See Appendix A 

for a service area map.)

To synchronize the current contract expiration dates at all the above captioned communities, we 

are also extending the rates at Ironwood/Ashland and Manistee/Ludington through 

August 31, 2010.

Background

By Order 2008-4-10, April 7, 2008, the Department selected Great Lakes Aviation, Ltd. (Great 

Lakes), to provide subsidized EAS at Ironwood/Ashland and Manistee/Ludington utilizing 19-

seat Beech 1900D aircraft for a new two-year term beginning when it inaugurated full service. 

Under that order, Great Lakes provides Ironwood/Ashland with two daily one-stop (at 

Rhinelander, Wisconsin) round trips for an annual subsidy rate of $1,492,865. Great Lakes also 

provides Manistee/Ludington with two daily nonstop round trips, for an annual subsidy of 

$1,799,395. The combined annual subsidy rate of $3,292,260. Great Lakes commenced service 

at the two communities on May 5, 2008, meaning that the contract expires on May 31, 2010.

Similarly, on August 14, 2008, the Department issued Order 2008-8-14, reselecting Mesaba 

Aviation, Inc., d/b/a Mesaba Airlines (Mesaba), operating as Northwest Airlink, utilizing 34-seat 

Saab 340 aircraft to provide subsidized EAS at Iron Mountain/Kingsford and Escanaba for a new 

Essential Air Service at

IRON MOUNTAIN/KINGSFORD, MICHIGAN

IRONWOOD, MICHIGAN/ASHLAND, 

WISCONSIN

MANISTEE/LUDINGTON, MICHIGAN

ESCANABA, MICHIGAN

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

Docket DOT-OST-1999-5175

Docket DOT-OST-1996-1266

Docket DOT-OST-1996-1711

Docket DOT-OST-2003-15128
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two-year period, beginning August 15, 2008, through August 31, 2010. Under the order, Mesaba 

provides seven one-stop or nonstop round trips each week between each community and both 

Detroit and Minneapolis (28 weekly flights per community) for a combined annual subsidy rate 

of $2,870,236.

Request for Proposals

In order to attract as many potential applicants as possible, we find that good cause exists to put 

all four communities on the same time cycle.

As the end of the current rate terms approach, we are here requesting proposals from carriers 

interested in providing service at: Iron Mountain/Kingsford; Ironwood/Ashland; 

Manistee/Ludington; and/or Escanaba, with or without subsidy, for the two-year period 

beginning September 1, 2010. Carriers should file their proposals no later than March 25, 2010. 

At the end of that period, our staff will docket proposals, thereby making them public, and direct 

each carrier to serve a copy of its proposal on the civic parties and other applicants. Shortly 

afterwards, we will provide a summary of the proposals to the communities and ask them to 

submit their final comments. We will give full consideration to all proposals that are timely 

filed.1

Interested 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 outright all 

unreasonable or unrealistic proposals and resolicit a new round of proposals. However, 

negotiation and rejection are 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 being 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

With specific respect to these four communities, the Department expects proposals consisting of 

service with 19-passenger aircraft and offering a mix of two or three round trips a day between 

 1 Carriers should not expect the Department to accept late fillings. In cases where a carrier proposes to provide 

essential air service without subsidy and we determine that service can be reliably provided without such 

compensation, we do not proceed with the carrier-selection case. Instead, we simply rely on that carrier’s subsidyfree service as proposed.

2 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c) (1) directs us to consider four 

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; and (4) community views. In addition, the Consolidated 

Appropriations Act, 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. Interested carriers should also be aware that our general provisions governing EAS 

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.
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each community and Milwaukee, Detroit or Minneapolis, or any hub that provides good access 

to the national air transportation system. Larger aircraft, offering fewer daily trips may be 

substituted in lieu of the 19-passenger aircraft, higher frequency service so long as the number of 

available seats between the EAS community and the hub are approximately equivalent. Such 

service is generally consistent with what the communities currently receive, and fully satisfies 

their essential air service requirements.

Communities and air carriers are encouraged to work together in advance of the due date for 

proposals to craft a service pattern that is desirable to the community and meets the operational 

requirements of the airline interested in submitting a proposal. In addition, carriers should be 

very clear as to whether a specific community’s proposal is a stand-alone option, or whether it is 

part of a larger, inseparable package and connected to other communities.

We encourage proposals that meet those requirements in an efficient manner. Carriers are also 

welcome to propose more than one service option, if they choose; they need not limit themselves 

to those requirements if they envision other, potentially more attractive service possibilities --

different hubs, for example -- with subsidy requirements that remain competitive.

New Filing Procedures

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 Regulations.gov, each page 

should be formatted to be viewed online.

Service and Traffic History

Historical traffic for Iron Mountain/Kingsford, Ironwood/Ashland, Manistee/Ludington and 

Escanaba is detailed in Appendix B. During the year ended December 31, 2009, Escanaba 

averaged 22.0 enplanements a day, Ironwood/Ashland 3.7, and Manistee/Ludington 8.7. For 

period January 1, 2009 through October 31, 2009, Iron Mountain/Kingsford generated an 

average of 18.3 enplanements per day.

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 for 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. Because the Department is 

prohibited from 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 requiring more detailed 

information regarding these requirements should contact the Office of Aviation Analysis at 

(202) 366-5903.4

 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 1964; 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.
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Community and State Comments

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

prospective applicants 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 and ask 

them to submit their final comments shortly after, March 25, the end of the 30-day period for 

carrier proposals.

ACCORDINGLY,

1. We request that carriers interested in providing essential air service at: Iron 

Mountain/Kingsford, Michigan; Ironwood, Michigan/Ashland, Wisconsin; Manistee/Ludington, 

Michigan; and/or Escanaba, Michigan, submit their proposals, with or without subsidy requests, 

no later than March 25, 2010. The proposals should be e-mailed to: EAS@dot.gov with the title 

with the title “Proposal to Provide Essential Air Service at Iron Mountain/Kingsford, Michigan; 

Ironwood, Michigan/Ashland, Wisconsin; Manistee/Ludington, Michigan; and Escanaba, 

Michigan,” with the docket numbers corresponding to the communities as shown on the first 

page of this order;5

2. We extend the rates set by Order 2008-4-10 for Iron Mountain/Kingsford, Michigan; 

Ironwood, Michigan/Ashland, Wisconsin, that were due to expire on May 31, 2010, through 

August 31, 2010;

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

4. We will serve copies of this order on the parties listed in Appendix D.

By:

SUSAN L. 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

 5 Questions regarding filings in response to this order may be directed to Brian Swanson at (202) 366-5392 or 

brian.swanson@dot.gov.
Appendix A

AREA MAP
Appendix B

Page 1 of 2

Historical Enplanements

Ironwood/Ashland

Year 

Ended

Total 

Scheduled 

Passengers

Annual 

Enplanements2

Average 

Enplanements 

Per Service 

Day3 

31-Dec-03 4,574 2,287 7.3

31-Dec-04 5,769 2,885 9.2

31-Dec-05 6,405 3,203 10.2

31-Dec-06 6,622 3,311 10.6

31-Dec-07 5,826 2,913 9.3

31-Dec-08 2,905 1,453 4.6

31-Dec-09 2,290 1,145 3.7

Historical Enplanements1

Iron Mountain/Kingsford

Year Ended

Total 

Scheduled 

Passengers

Annual 

Enplanements2

Average 

Enplanements 

Per Service 

Day3 

31-Dec-03 10,383 5,192 16.6

31-Dec-04 14,567 7,284 23.2

31-Dec-05 16,860 8,430 26.9

31-Dec-06 15,485 7,743 24.7

31-Dec-07 12,927 6,464 20.7

31-Dec-08 8,042 4,021 12.8

1/1/2009 - 10/31/2009 9,522 4,761 18.3

Notes:

1. Source: http://mdotwas1.mdot.state.mi.us/public/airportstats/

2. Total scheduled passengers divided by two.

3. Average annual enplanements divided by 313 effective annual service 

days, except for annual periods ended 12/31/2004 and 12/31/2008 (314 

effective annual service days).
Appendix B

Page 2 of 2

Historical Enplanements1

Manistee/Ludington

Year 

Ended

Total 

Scheduled 

Passengers

Annual 

Enplanements2

Average 

Enplanements 

Per Service 

Day3 

31-Dec-03 2,917 1,459 4.7

31-Dec-04 3,941 1,971 6.3

31-Dec-05 3,951 1,976 6.3

31-Dec-06 5,551 2,776 8.9

31-Dec-07 6,004 3,002 9.6

31-Dec-08 4,044 2,022 6.4

31-Dec-09 5,472 2,736 8.7

Historical Enplanements1

Escanaba

Year 

Ended

Total 

Scheduled 

Passengers

Annual 

Enplanements2

Average 

Enplanements 

Per Service 

Day3 

31-Dec-03 16,223 8,112 25.9

31-Dec-04 17,856 8,928 28.4

31-Dec-05 19,029 9,515 30.4

31-Dec-06 18,485 9,243 29.5

31-Dec-07 17,216 8,608 27.5

31-Dec-08 10,277 5,139 16.4

31-Dec-09 13,779 6,890 22.0

Notes:

1. Source: http://mdotwas1.mdot.state.mi.us/public/airportstats/

2. Total scheduled passengers divided by two.

3. Average annual enplanements divided by 313 effective annual 

service days, except for annual periods ended 12/31/2004 and 

12/31/2008 (314 effective annual service days).
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, 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 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 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.

Funds are not currently available for performance under this solicitation beyond [DATE]. The 

Department’s obligation for performance under this solicitation beyond [DATE], is contingent 

upon the availability of appropriated funds from which payment for services can be made. No 

legal liability on the part of the Department for any payment may arise for performance under 

this order beyond [DATE], until funds are made available to the Department for performance. If 

funds are not made available for performance beyond [DATE], the carrier will receive notice in 

writing by the Department.

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, regulations, 

or amendments thereto shall not operate to controvert the foregoing paragraph.

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

under this order.
Appendix D

SERVICE LIST

Air Greco, d/b/a Wings Air, Aaron Goerlich Kenmore Air, Tim Brooks

Air Greco, d/b/a Wings Air, Charles Mintz Mesa Air Group, Jonathan Ornstein

Air Greco, d/b/a Wings Air, Robert Rupard Mesa Air Group, Michael Lotz

Air Sunshine, Mirmohammad Adili Mesa Air Group, Mike Holcomb

Air Wisconsin, Barbara Jones Mesaba, Max Shemesh

Alaska Airlines, Jeff Cole Mesaba, John Spanjers

Alaska Airlines, Sandy Sinick Midwest Airlines, Anthony Intravia

Allegiant Air, Robert Ashscroft Midwest Airlines, David Reeve

Alliance Air, Paul Berliner Midwest Airlines, Greg Aretakis

American Airlines, Carl Nelson MN Aviation, Jose Maldonado

American Eagle, Jeff Hartz Multi Aero, Darnea

Bemidji Aviation, Arlen Rinkenberger Multi Aero, Shane Storz

Bemidji Aviation, Cori Rude NYDC, Henok Araya

Cape Air, Andrew Bonney Northwest, Aaron Murray

Cape Air, Dan Wolf Northwest, Tim McDonald

Cape Air, J. Flaherty OST, Dennis DeVany, Renee Williams,

Caribbean Sun Airlines, John Rupert OST, Kevin Adams, Brian Swanson

Colgan Air, Mike Colgan Pacific Wings, Frank Ford

Colgan Air, Kevin Scott Pacific Wings, Greg Kahlstorf

CommutAir, Andy Price Pinnacle Airlines, Joe Williams

CommutAir, Joel Raymond Pinnacle Airlines, Phil Reed

Continental, Bruce Keiner Public Charters, Jim Gallagher

Continental, Dan Weiss Salmon Air, Dan Schroeder

Continental, Lorry Halloway Salmon Air, JoAnn Wolters

Delta Air Lines Amy Martin Scenic, Mary Schneider

Delta Air Lines, Jeff Morgan Scenic, Mitzi Daines

Delta Air Lines, Dan Shuman Seaborne Airlines, Wayne D’Amico

Delta Air Lines, Joe Esposito SeaPort Airlines. Rob McKinney

Delta Air Lines, Sascha Vanderbellen Shuttle America, Jerry Balsano

Delta, Karen Zachary SkyWest, Eric Christensen

Executive Airlines, Kate Soled SkyWest, Michael Thompson

Great Lakes Airlines, Chuck Howell Sovereign Air, Bob Karns

Great Lakes Airlines, Doug Voss Sovereign Air, Lois R. Barton

Great Lakes Airlines, Greg Stephens Tradewind, Eric Zipkin

Gulfstream, Dave Hackett Trans States, Bill Mishk

Gulfstream, Mickey Bowman Trans States, Gerry Wigmore

Gulfstream, T. Cooper United, Alicia Gabriel

Homeland Security, Michael Duffy United, James Starnes

Homeland Security, Randy Webb US Airways, Howard Kass

Horizon Air, Dan Russo US Airways, Jason Reisinger

Horizon Air, Jennifer Thompson US Airways, Benjamin Slocum

Horizon Air, Jeff Cole Vintage Props and Jets, Nate Vallier

ICEPR, Luis Irizarry Wings of Alaska, Bob Jacobsen

Island Air Charters, Linda House Wings of Alaska, Michelle Donohue

Jet Air, Daniel Wolford