Order 2012

- 3

- 14 Served: March 23, 2012



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 23 rd day of March , 2012

Ninety

- day Notice of Colgan Airlines, Inc.

Of termination of Essential Air Service at:

Altoona, Pennsylvania Johnstown, Pennsylvania Victoria, Texas Staunton, Virginia Beckley, West Virginia Clarksburg/Fairmont, West Virginia Morgantown, West Virginia

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 2002

- 11446

DOCKET DOT

- OST

- 2002

- 11451

DOCKET DOT

- OST

- 2005

- 20454

DOCKET DOT

- OST

- 2002

- 11378

DOCKET DOT

- OST

- 1997

- 2761

DOCKET DOT

- OST

- 2005

- 20736

DOCKET DOT

- OST

- 2005

- 20735



### ORDER PROHIBITING SU SPENSION OF SERVICE

AND REQUESTING PROPOSALS

Summary By this O rder, the Departme nt prohibits Colgan Airlines , Inc. d / b / a United Airlines Express (“United Express”), from terminating service at Altoona and Johnstown, PA; Victoria, TX; Staunton, VA; and Beckley, Clarksburg/Fairmont, and Morgantown, WV, for 30 days beyond

the end of the 90

- day notice period, i.e. July 8, 2012. We are also requesting proposals by April 25, 2012, from air carriers interested in providing replacement Essential Air Service (“EAS”) at Victoria, TX; and Staunton, VA, for a new term, with or without subsidy.

Background By Order 2012

- 2

- 9, issued on February 14, 2012, the Department requested proposals from air carriers interested in providing EAS at Altoon a and Johnstown, PA, for a new term beginning July 1, 201 2, with or without su bsidy. Tho se proposals were due by March 14, 2012.

Additionally, by Order 2012

- 2

- 16, issued on February 23, 2012, the Department requested proposals from air carriers interested in providing EAS at Beckley, Clarksburg/Fairmont,- 2

-

and/or Morgantown, WV, for a new term beginning August 1, 2012, with or without subsidy

. Tho se proposals are due by April 3, 2012.

On March 8, 2012, United Express filed notice of its intent to terminate its currently subsidized

service at the se ven above

- captioned communities, effective June 8, 2012.

Hold

- In United Express’ s proposed terminations of service at the above communities would cause service levels to drop below the EAS guarantee levels established by the Department. Thus, the Department must prohibit the air carrier from terminating such service at the end of its 90

- day notice, i.e. June 8, 2012. We will requ ire United Express to continue to maintain that level of service at the above communities, for successive 30

- day periods until we have completed 1 processing the air carrier

- replacement case and the selected air carrier has actually started

service.

Requ est for Proposals at Victoria, Texas, and Staunton, Virginia

Air c arriers should file their proposals no later than April 25

, 2012 . After that date, our staff

will docket the proposals, thereby making them public, and shortly afterwards will provide a summary of the proposals to the communities and ask them for their final comments. We will give full consideration to all proposals filed in a timely manner.

Interested air carriers should prepare their proposals w ith every expectation that their initial proposals will also be their final and only proposals. We retain the discretion to negotiate proposals with air carriers when we deem it desirable. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and solicit a new round of proposals.

Air c arrier proposals 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.

We are here providing interested air carriers with basic information to serve as guidance when they prepare their proposals, but we wi ll not prescribe an exact format. 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 inclu de 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 community and t he Department. 2

1 In accordance with 49 U.S.C. 41734(c), we will extend United Express’s service obligation for successive 30

- day periods as necessary until replacement service actually begins.

2 In selecting a carrier to provide subsidized E ssential Air S ervice, 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, t he Consolidated Appropriations Act, 2008, Public Law 110

- 161 , provides that when selecting a n air 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 prov isions.- 3

-

Air 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, frequency or e quipment, for example

-- with subsidy requirements that remain competitive. The community 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 communit y and meets the operational needs of the airline s

.

Proposals should provide sufficient capacity to accommodate historical levels of traffic. In

order to assist air carriers in developing traffic and revenue projections for their proposals, we have provided a summar y of historical passengers at Victoria, TX

, and Staunton, VA

, in Appendix B. During year ended September 30, 2011, Victoria averaged 1 6 enplanements per day and Staunton

, 39 . W e expect service levels that are c o mparable with what the communities currently re ceive , with service to a large or medium hub that offers access to the national air transportation system utilizing twin

- engine aircraft

. Specifically

, two round trips a day (12 a week) with 30

- seat or larger aircraft; or three round trips a day (18 a week) with 19

- seat aircraft and additional frequencies with 8/9 seat aircraft. Should the communities agree to single

engine aircraft, in effect waiving their right t o twin

- engine aircraft, we would cons ider the waiver to apply only for the length of the term of the air carrier

- selection at hand, i.e. we would

not assume that the communities would waive their rights for all time. As always, we will formally solicit the communites’ views on any service options we receive before making a long

- term carrier selection decision.

Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces and nondi scrimination. 3 Consequently, all air carriers receiving Federa l subsidy to support Essential Air S ervice must certify that they are in compliance with Department regulations regarding drug

- free workplaces and nondiscrimination, and those air carriers whos e 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 air carriers that plan to submit proposals involving subsidy should submit the required certif ications along with their proposals. Interested air carriers requiring more detailed information regarding these requirements, as well as copies of the certifications, should contact the Office of Aviation Analysis at (202) 366

- 5903. The Department is pr ohibited from paying subsidy to carriers that do not submit these documents. 4

Community and State Comments Civic officials are welcome to submit comments on the proposals at any time. 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 April 25 , 2012 , the due date for air c arrier proposals.

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

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.- 4

-

ACCORDINGLY,

1. The Department request s proposals from air carriers interested in providing Essential Air Service at Victoria, Texas or Staunton, Virginia, with subsidy if necessary, by April 25, 2012. Proposals should include all the data required by section 204.4 of the Department’s Regulati ons (14 CFR 204.4). Proposals should be emailed to EAS@dot.gov and entitled “Proposals to Provide Essential Air Service” at (specify which of the two communities your proposal pertains and the corresponding docket number ). Proposals may be for one or both communities; but air

carriers should make clear whether or not their proposals can be considered on a stand

- alone basis. Service should be consistent with that discussed in the body of the Order. Questions regarding f iling may be directed to Scott Faulk at 202

- 366

- 9967;

2. The Department prohibits Colgan Airlines, Inc. a wholly

- owned subsidiary of Pinnacle Airlines Corporation, d/b/a United Airlines Express, from suspending their service at Altoona and Johnstown, Pen nsylvania; Victoria, Texas; Staunton, Virginia; and Beckley, Clarksburg/Fairmont, and Morgantown, West Virginia; at the end of its 90

- day notice period and requires it to maintain its current level of service

, as specified in the various carrier

selection orders

, 5 through July 8, 2012, or until an air carrier capable of providing reliable Essential Air Service actually begins service, whichever comes first; 6

3

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

4

. The Department will serve a copy of this O rder on the M ayor s and Airport M anager s of Victoria, Texas, and Staunton Virginia

, Colgan Air, Inc.

, and t he service list for these Docket s

.

By:

SUSAN L. KURLAND Assistant Secretary

for Aviation and International Affairs

(SEAL)

An electronic version of this document is available on line at www.regulations.gov

5 See Order 2010

- 5

- 10, issued May 10, 2010, (Altoona, and Johnstown, PA); Order 2011

- 5

- 7, issued May 5, 2011, (Victoria, TX); Order 2011

- 3

- 2, issued March 1, 2011, (Staunton, VA); Order 2010

- 6

- 25, issued June 29, 2010, (Beckley, Clarksburg/Fairmont, and M organtown, WV).

6 In accordance with 49 U.S.C. 41734(c), we will extend the air carrier’s service obligation for successive 30

- day periods as necessary until replacement service actually begins.

### Appendix A Page 1 of 2



## Area Map

Victoria, Texas

### Appendix A Page 2 of 2



## Area Map

Staunton, Virginia

### Appendix B Page 1 of 2

Historical Origin

- Destination Plane Traffic 1



### Victoria, Texas

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per Day

1 2009 1,274 1,333 2,607 17

2 2009 1,405 1,473 2,878 18

3 2009 1,406 1,447 2,853 18

4 2009 1,346 1,372 2,718 17

Annual

Totals 5,431 5,625 11,056 18

1 2010 1,095 1,208 2,303 15

2 2010 1,270 1,303 2,573 16

3 2010 1,246 1,260 2,506 16

4 2010 1,314 1,267 2,581 16

Annual

Totals 4,925 5,038 9,963 16

1 2011 920 1,028 1,948 13

2 2011 1,325 1,373 2,698 17

3 2011 1,391 1,447 2,838 18

4 2011 1,400 1,350 2,750 17

Annual

Totals 5,036 5,198 10,234 16

1 Source: USDOT Bureau of Transportation Statistics, TransStats Intermodal Database, Schedule T

- 1 00

.

### APPENDIX B Page 2 of 2 Historical Origin

- Destination Plane Traffic 1



### Staunton, Virginia

Quarter Year Deplanements Enplanements Total

Traffic Enplanements per Day

1 2009 1,851 1,662 3,513 23

2 2009 2,094 2,058 4,152 27

3 2009 2,307 2,181 4,488 28

4 2009 2,442 2,407 4,849 31

Annual

Totals 8,694 8,308 17,002 27

1 2010 1,912 1,846 3,758 24

2 2010 2,670 2,764 5,434 35

3 2010 2,506 2,383 4,889 31

4 2010 3,638 3,369 7,007 44

Annual

Totals 10,726 10,362 21,088 34

1 2011 2,620 2,606 5,226 34

2 2011 3,209 3,212 6,421 41

3 2011 2,725 2,570 5,295 34

4 2011 3,691 3,635 7,326 46

Annual

Totals 12,245 12,023 24,268 39

1 Source: USDOT Bureau of Transportation Statistics, TransStats Intermodal Database, Schedule T

- 1 00

.

### 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 eligib ility 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 Aviatio n 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 compl ete 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 t o 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 se rvice 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 t hat 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 reduc tion or cessation of payment.

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.

Funds are not currently available for performance under this solicitation beyond September 31, 2012 . The Department’s obligation for performance under this soli citation beyond September 31, 2012 , is conting ent upon 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 31, 2012 , until

funds are made availa ble to the Department for performance. If funds are not made available for performance beyond September 31, 2012 , the carrier will receive notice in writing by the Department.

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

under this Order

.