Order 2012-10-14

Served: October 11, 2012

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 11th of October, 2012

Essential Air Service at

Lake Minchumina, Alaska

Rampart, Alaska

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

Docket DOT-OST-2008-0237

Docket DOT-OST-2008-0201

ORDER RE-SELECTING CARRIERS

Summary

By this Order, the Department is re-selecting Wright Air Service, Inc. (Wright), to provide 

Essential Air Service (EAS) at Lake Minchumina, Alaska, for $102,300 annually for two 

nonstop round trips per week to Fairbanks – one with a 9-seat IFR Certified aircraft and one with 

4-seat single-engine piston aircraft – through October 31, 2014.1 Also, we are re-selecting 

Warbelow’s Air Ventures, Inc. (Warbelows), to provide EAS at Rampart, Alaska, for $76,416 

annually for two nonstop round trips per week to Fairbanks with Piper Navajo equipment 

through October 31, 2014. 

Background

By Order 2010-7-20, July 27, 2010, the Department selected Wright to provide EAS at Lake 

Minchumina through October 31, 2012,2 consisting of two nonstop round trips per week to 

Fairbanks, one with a 9-seat aircraft and one with a 4-seat aircraft for an annual subsidy of 

$93,080. Likewise, by Order 2010-7-10, July 15, 2010, the Department selected Warbelows to 

provide EAS at Rampart through September 30, 2012, consisting of two nonstop round trips per 

week to Fairbanks with 9-seat Piper Navajo aircraft for an annual subsidy of $97,679. 

 

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

2 By memo dated August 3, 2010, we clarified that Wright’s selection period extends through October 31, 2012. 
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As the end of the current rate terms were approaching, Order 2012-6-8, June 12, 2012, requested 

proposals at both communities by July 9, 2012. We received proposals from the two 

incumbents, Wright and Warbelows, at Lake Minchumina and Rampart, respectively. On 

July 10, 2012, we requested community comments at both communities regarding those two 

carriers’ proposals. 

By Notice dated August 3, 2012, we extended the deadline for comments at Rampart to 

August 29, 2012. As discussed in that notice, on August 2, 2012, Tatonduk Outfitters, Ltd. 

(Tatonduk), contacted Department staff and asserted that they had, in fact, submitted a timelyfiled proposal for Rampart. The Department’s IT security experts confirmed Tatonduk’s 

assertion, indicating that Tatonduk’s proposal had been dropped by the Department’s security 

filter, thus initially preventing the EAS staff from seeing Tatonduk’s proposal. The notice 

extended the deadline for comments at Rampart to August 29.

Proposals at Lake Minchumina

Under Option 1, Wright proposes to provide one nonstop round trip per week to Fairbanks with 

9-seat IFR certified aircraft – either Cessna 208 single-engine turboprop or Piper Navajo twinengine piston aircraft. Wright requests $74,360 annual subsidy for this service.

Under Option 2, Wright would supplement the service it proposes in Option 1 with one 

additional nonstop round trip per week to Fairbanks with a 4-seat single-engine piston aircraft, 

either Cessna 206 or Beech Bonanza. Wright requests a total of $102,300 annual subsidy under 

this option. The service in Option 2 corresponds to that selected by Order 2010-7-20.

Proposals at Rampart

Tatonduk

Tatonduk proposes to provide two nonstop round trips per week to Fairbanks for $46,187 

annually. Over the course of a year, 30 round trips would be provided with either a Pilatus 

PC-12 or Cessna Caravan, both of which are 9-seat IFR certified single-engine turboprop 

aircraft, and 74 round trips with a 5-seat single-engine Piper Lance aircraft. 

Warbelows

Under Option 1, Warbelows proposes to provide two nonstop round trips per week to Fairbanks 

with 9-seat Piper Navajo twin-engine piston aircraft. Warbelows request $76,416 annual subsidy 

for this service.

Under Option 2, Warbelows proposes to provide three nonstop round trip per week to Fairbanks 

with 9-seat Piper Navajo twin-engine piston aircraft. Warbelows request $119,445 annual 

subsidy for this service.

Community Response, Lake Minchumina

We received comments on July 23, 2012, from the Lake Minchumina Homeowner’s Association. 

The community endorses Wright’s Option 2 -- twice weekly service. It discusses its need for twiceweekly service as follows: 
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“We have had the once-weekly option in the past and found it inadequate to meet our needs. 

It results in delayed bills, accounting, and deadlines. It also means any appointment with 

doctors or other professionals requires residents to stay a whole week in town for a single 

visit, which get prohibitively costly when staying in a hotel. The twice-weekly schedule is 

ideal for our economic future since many visitors and tourists can only come for half of a 

week. ....[We also] compliment Wright for their outstanding service. It is the most reliable 

service this village has ever had, with on-time flights and reliable, helpful staff. Many days 

of bad weather would have prevented Scheduled VFR flights, but the routine availability of 

an IFR aircraft has nearly eliminated missed flights. Wright has certainly earned the good, 

trusting relationship that was lacking with other carriers.” 

Community Response, Rampart

By letter dated August 27, 2012, Ms. Peggy Wright, the Post Mistress for Rampart, supported

Tatonduk “providing weekly Essential Air Service to the Village of Rampart. Village residents 

desire direct non-stop service between Fairbanks and Ramparts and [Tatonduk] is best suited for 

this service. In the past, the service into and out of Rampart has not been direct non-stop to 

Fairbanks.” 

By letter dated August 28, the Rampart Village Council supported the proposal of Warbelow’s 

Air Ventures. The Village Council feels that “Warbelow’s staff, service, and schedule are an 

asset to the people of this community, and their proposal for twin-engine air transportation will 

provide us the level of service, safety, and commitment we need.” On August 29 Baan o yeel 

kon Corporation indicated that “On behalf of the Community of Rampart we are in support of the 

air carrier services Warbelow’s Air Ventures. The community needs to have consistent, reliable 

air carriers service to Rampart each week.”

Decision, Lake Minchumina

The carrier-selection issue at Lake Minchumina is straightforward. Wright is the only carrier 

proposing service, the requested level of subsidy appears reasonable, and the community favors 

the incumbent carrier, Wright. The carrier has submitted two options, Option 1 -- one trip per 

week with 9 seat aircraft for $74,360 annual subsidy and Option 2 – two trips per week, one with 

9-seat aircraft and one with 4-seat aircraft for a total of $102,300 annual subsidy. The service in 

Wright’s Option 2 matches the level of service it was selected to provide by Order 2010-7-20, 

July 27, 2010, and there is only a modest increase in subsidy from the current rate, from $93,080 

to $102,300. 

We will select Option 2. A second round trip, as mentioned by the community, doubles its 

access to the national transportation system, and Wright has kept this option viable in terms of 

subsidy by proposing to provide that second flight with smaller, 4-seat aircraft. The service 

proposed under Option 1, while less expensive, would not fully accommodate historical traffic 

for several months of the most recent year, as shown in the request for proposals. In brief, both 

service and subsidy levels appear reasonable and we will select that proposal.

Decision, Rampart 

The first issue at Rampart is which level of service to select – two round trips per week or three. 

The three round trips per week proposed by Warbelow would require significantly more subsidy 

than its two round trips per week option, and more than double the level of subsidy requested by 
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Tatonduk. Moreover, based on historical traffic, the third round trip is unnecessary because 

either carrier’s two- round-trips-per-week option would accommodate historical traffic for each 

month of the year, as shown in the request for proposals. 

The second issue is which carrier’s two round trip per week option to select. Tatonduk has a 

clear advantage in terms of the level of subsidy requested; in terms of community support, 

Warbelows has an advantage. The single letter of support for Tatonduk was from the Rampart 

Post Mistress. However, the letters supporting Warbelows were from local organizations, 

including the Village Council, and those two letters better reflect the views of the community 

overall. We note that traffic has been stable to slightly increasing at Rampart. The Village 

Council values twin-engine aircraft. Warbelows proposal is for strictly twin-engine aircraft. The 

single-engine turboprops proposed by Tatonduk – either Pilatus or Cessna 208s – are comparable 

to the twin-engine piston aircraft proposed by Warbelows. However, Tatonduk proposes to use 

single-engine piston aircraft more than 70 percent of the time. Warbelows’ historical subsidy 

requests reflect a good downward trend -- $97,679 two years ago versus $76,416 now. Finally, 

Warbelows is the incumbent at Rampart, and selecting them would not require a carrier 

transition. The levels of service and subsidy that Warbelows requests appear reasonable, and we 

will therefore select that carrier 

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require the Department to find an air carrier fit, willing, and 

able to provide reliable service before the Department may subsidize it to provide EAS. Both 

Warbelows Air Ventures, Inc., and Wright Air Service, Inc., are subject to the Department’s 

continuing fitness requirements. The Department has contacted the Federal Aviation 

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

The Department therefore concludes that the carriers remain fit to conduct the operations 

proposed here.

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

ACCORDINGLY,

1. We select Wright Air Service, Inc., to provide EAS at Lake Minchumina, Alaska;

2. We set the final rate of compensation for Wright Air Service, Inc., for the provision of 

Essential Air Service at Lake Minchumina, Alaska, as described in Appendix B-1;

3. We select Warbelows Air Ventures, Inc., to provide EAS at Rampart, Alaska;

4. We set the final rate of compensation for Warbelows Air Ventures, Inc., for the provision of 

Essential Air Service at Rampart, Alaska, as described in Appendix B-2;
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5. We direct Warbelows Air Ventures, Inc., and Wright Air Service, Inc., 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 from the service date of this Order, 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;

6. We find that Warbelows Air Ventures, Inc., continues to be fit, willing and able to operate as 

a certificated carrier and capable of providing reliable EAS at Rampart, Alaska;

7. We find that Wright Air Service, Inc., continues to be fit, willing and able to operate as a 

certificated carrier and capable of providing reliable EAS at Lake Minchumina, Alaska;

8. These docket will remain open until further order of the Department; and

9. We will serve copies of this Order on the civic officials of Lake Minchumina and Rampart, 

Alaska, the Alaska Department of Transportation and Public Facilities, and on Tatonduk 

Outfitters, Ltd., Warbelows Air Ventures, Inc., and Wright Air Service, Inc.

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
Appendix A

Nonstop Great Circle Miles from Fairbanks (FAI)

Minto (MNT) 50

Healy Lake (HKB) 74

Ramparts (RMP) 82

Manley (MLY) 83

Central (CEM) 104

Circle (IRC) 130

Lake Minchumina (LMA) 148
Appendix B-1

Essential Air Service to be Provided to Lake Minchumina, Alaska, Docket 2008-0237

Effective Period: November 1, 2012, through October 31, 2014

Scheduled Service: Two nonstop round trips per week to Fairbanks; one with 9-seat C-208 or Navajo; one 

with 4-seat Cessna 206 or Beech Bonanza aircraft.

Rate per Eligible Flight1 9-seat aircraft, $681; 4-seat aircraft, $303.

Weekly Ceiling 2 $1,968

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 $102,300 divided by the estimated annual completed departures, arrivals, and seats, as 

follows: 2 flights/week x 52 weeks x 4 seats and 2 flights/week x 52 weeks x 9 seats = 1,352 seats.

$102,300 ÷ 1,352 = $75.67 per seat, or $303 per 4-seater and $681 per 9-seater.

2 $681 x 2 directions + $303 x 2 directions = $1,968.
Appendix B-2

Essential Air Service to be Provided to Rampart, Alaska, Docket 2008-0201

Effective Period: October 1, 2012, through October 31, 2014.1

Scheduled Service: Two nonstop round trips per week to Fairbanks.

Aircraft Type: Piper Navajo, 9-seats.

Rate per Eligible Flight2 $367.

Weekly Ceiling 3 $1,468.

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 We are extending Warbelows’ rate to a 25-month period, to make that rate coterminous with Wright’s rate.

2 Annual compensation of $76,416 divided by the estimated annual completed departures and arrivals:

2 flights/week x 52 weeks x 2 directions = 208.

3 2 round trips per week x 2 directions x $367.