### Swanson, Brian (OST) From: Sent: To: Swanson, Brian (OST) Monday, August 29, 2011 1:37 PM Swanson, Brian (OST) 

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Subject: FW: Soliciting Comments and Prefereneces QO f=A$**pr!?l,l,OS~** at,ye.rn 

### 1 al and Moab, UtahDue September 28, 2011

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From: Swanson, Brian (OST) Sent: Monday, August 29, 2011 1:26 PM To: 'cbaird@grand.utah.gov'; 'wmjgroff@hotmail.com'; 'jdnyland@grand.utah.gov'; 'MelindaBrimhall@grand.utah.gov'; 'kbraun@grand.utah.gov'; 'mmckee@co.uintah.ut.us'; 'gshowalter@vernalcity.gov' Cc: 'Chuck Howell'; 'Tim Sieber'; Devany, Dennis (OST) Subject: Soliciting Comments and Prefereneces on EAS proposals at Vernal and Moab, Utah- Due September 28, 2011 

### All: I would like to update you onthe Essential Air Service (EAS) situation at Vernal and Moab and give you an opportunity to submit comments ifyou wish. In anticipation ofthe end ofGreat Lakes' current contract on January 1, 2012, the Department issued Order 2011-7-3 on July 1, 2011, to solicit proposals from all interested air carriers to provide EAS**a~** 

### Vernal and/or Moab, for a new two-year term. In response to that order, Great Lakes and SeaPort Airlines, Inc. (SeaPort) submitted proposals. Wehave directed each carrierto serve its proposal on you. Copies ofthe proposals may also be accessed online through the Federal DocketManagement System at: http://www.regulations.gov, bydoing a search onDockets DOT-OST-1997-2827 (Moab) or DOT-OST-1997-2706 (Vernal). For your convenience, each carrier's proposal is briefly summarizedbelow. Before summarizing each carrier's proposal, we would like to remind you ofseveral important statutory requirements in the EAS Program. First, both communities are guaranteed to receive air service with two-pilot, twin-engine aircraft. Second, Vernal is guaranteed service with at least 15-passengers aircraft by virtue ofthe fact that it generated more than 11 enplanements per day in any calendar yearfrom 1976-1986. Third, we are prohibited from paying subsidy for EAS at any community where the per-passengerrate exceeds $200, unless the community is greater than 210 highway miles from the nearest large or mediumhub. In this case, Vernal is clearly fewer than 210 highway miles from Salt Lake City and, therefore, is subject to the $200 subsidy-perpassenger ceiling. Moab is farther than 210 miles from the nearest large ormedium hub and, thus, is exempt from the $200 perpassengercap. Great Lakes, operating as a United Airlines and FrontierAirlines code-share partner, submitted "stand-alone" service options to provide EAS at both communities. Great Lakes would provide twelve nonstop round trips a week from each Vernal and Moab to Denver, utilizing 19-passengerBeech 1900D aircraft. The annual subsidy requirement at Vernal is $1,299,194 and for Moab, $1,816,486. SeaPort submitted a proposal for each community on a "stand-alone"basis. SeaPort would utilize pressurized Pilatus PC-12 aircraft configured for 9-passengers with three service options at each community with all service being nonstop, as summarizedbelow.

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### Service Annual Subsidy Option Proposed Service Required 

### # Vernal Moab 1 18 round trips a week to Salt Lake City (SLC) $1,566,015 $2,074,620 2 11 round trips a weekto Denver (DEN); and $1,855,925 $2,278,580 7 round trips a weekto SLC 3 7 round trips a week to DEN; and $1,701,407 $2,197,787 11 round trips a week to SLC SeaPort's options do not meet the 15-seatrequirement for Vernal identified above, and the Department would not select SeaPort at Vernal unless we receive written community support. Based on the historical passenger traffic included in Order 2011-7-3, SeaPort's per-passenger subsidyrequirements for service options #s 1and 3 are below the statutory cap at Vernal, but service option#3 is not. Please note that the average passengerfares shown in each proposal do notnecessarily reflect the average local fare passengers would actually pay, but, rather, reflect a proratedportion ofthe total ticket price (e.g., the Vernal

- Salt Lake City portion ofa Vernal- SaltLake City- SanFrancisco ticket) that the subsidized carrier would realize. Also, the fare shownis net ofcertain charges such as Federal transportation securityfees, excise orticket taxes, and PassengerFacility Charges. Ofcourse, carriers have the discretion to chargefares they deem appropriate, and the passengerfares presented in theirproposals havebeen developed for subsidyrate computationpurposes only. Based onthe cost elements incorporated inthe carriers' computation summaries, the carriers would have to realize passengerfares comparable to the averages shown in theirproposals in order to achieve break-even orprofitable operations without subsidy. You should also note thatthe carriers' schedules may change to reflect changing conditions (e.g., to better meet shifting connectingbank times at the hub). TheDepartment does expect subsidized air carriers to maintain well-timed and well-spaced flights in orderto ensure full compensation. Werequest that you submit any comments you may have as soon as possible, but in any case no laterthan September 28, 2011. Please send yourcomments byfax to 202-366-7638 orby email to both dennis.devany@dot.gov and bric.m.swanson@dot.gov. Ourrules require that you send your comments to both applicants as well. Ifyouhave any questions, or need more time to reply, please feel free to contact Brian Swanson ofmy staffat 202-366-5392. Sincerely,

Dennis J. DeVany Chief, Essential Air ServiceDivision, X-53 Office ofAviation Analysis

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