Or der: 20 11

- 1 2

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Served : December 13 , 2011



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 13 th of Decem ber, 2011

Essential Air S ervice at

PUEBLO, COLORADO

under 49 U.S.C. 41731 et seq. Docket DOT

- O ST

- 1999

- 6589

ORDER SELECTING CARRIER

Summary By this order

, the Department is re

- s electing Great Lakes Aviation, Ltd. (Great Lakes) to
continue to provide essential air service (EAS) at Pueblo, Colorado , at a n an nual subsidy rate of $1,592,276

, for the two

- year period from February 1, 2012, through January 31, 2014

. 1

Background By Order 2009

- 11

- 15, November 23, 2009, the Department selected Great Lakes Aviation, Ltd. (Great Lakes) to provide 12 nonstop round trips per week to Denver International Airport using

19

- passenger Beech 1900 aircraft, for the two

- year period from February 1, 2010, through January 31, 2012, at an annual subsidy amount of $1 ,299,821.

Beginning prior to the current contract, Great Lakes provided one additional daily round trip at Pueblo. On June 9, 2011, Great Lakes added a second unsubsidized round trip for a total of 24 round trips per week, double the amount of service we selected it to provide. On September 30, 2011, one of the four round trips was scheduled to be shared with Liberal/Guymon, Kansas (another subsidized

- EAS community). On November 20, 2011, one of the remaining three

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.- 2

-

nonstop round trips between Pueblo and Denver was discontinued, leaving two nonstop round trips (12 per week) and an additional round trip shared with Liberal/Guymon (6 per week). 2

I n anticipation of the end of the current rate term, the Department issued Order 2011

- 8

- 18

, August 16 , 20 11

, sol icit ing proposals to provide efficient EAS , with or without subsidy support,

at Pueblo , for a new, two

- year period.

Proposal of Great Lakes Great Lakes, the incumbent, was the only carrier to submit a proposal. Great Lakes ’ proposal offers two options, both utilizing 19

- seat aircraft, for a two

- year period. The first option is two nonstop round trips each weekday and weekend to Denver (12 per week), for an annual subsidy

of $1,592,276 . The second option is three nonstop r ound trips each weekday and weekend to Denver (18 per week), for an annual subsidy of $1, 988,345 . Order 2011

- 8

- 18 requested 12 nonstop round trips per week with 15

- seat or larger aircraft or 18 nonstop round trips per week on aircraft with less than 15 pa ssenger seats. Thus, Great Lakes’ three

- round

- trip pattern exceeds our requested level of service. Great Lakes’ complete proposal may be accessed online

at http://www.regulations.gov/ by entering “DOT

- OST

- 1999

- 6589 ” in the “Keyword or ID”

field.

Community Comments

On September 15, 2011 , we requested community comment s regarding the carrier selection at
Pueblo

. We received an e

- mail from the Mark Lovin, Director of Aviation at Pueblo Memorial Airport. Mr. Lovin states, “[w]e do not have any opera tional concerns regarding the Great Lakes

service in Pueblo ” and Great Lakes has improved the realiability and timeliness of its service. Further, “ the City of Pueblo prefers the higher subsidy rate of 3 flights per day. However, we recognize the DOT service level of Option 1, 2 flights per day.”

Decision

Great Lakes has served Pueblo for several years and continues to provide them with reliable essential air service. We find that both the service and subsidy levels are reasonable

. Therefore,

we will reselect Great Lakes for an additional two

- year period, from February 1, 2012, through January 31, 2014 , to provide Pueblo with 12 nonstop round trips a week to Denver with

Beech craft 1900 aircraft.

We shall make this selection at Pueb lo contingent upon the Department’s receiving properly executed certifications from Great Lakes that it is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations concerning lobbying activities.

Carrier Fitness

49 U.S.C. 41737(b) requires that we find an air carrier fit, willing, and able to provide reliable service before we may subsidize it to provide essential air service

. Great Lakes is sub j ect to the Department’s continuing fitness requirements, and no information has come to our attention that

2 While Great Lakes has provided service well above Pueblo’s EAS levels over the course of the contract period, we will continue to subsidize the service nonetheless. In short, Great Lakes is only able to offer the additional, subsidy

free service because many of its fixed costs, station costs, for example, are em bedded in the subsidy rate for the first two round trips a day that constitute basic EAS.- 3

-

would cause us to question the carrier's fitness at this time. We have contacted the Federal Aviation Administration, and it has raised no concerns that would negatively affect our fi tness finding. We therefore conclude that the carrier remains fit to conduct the operations proposed

here.

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

ACCORDINGLY,

1. We select Great Lakes Aviation, Ltd. , to provide essential ai r service at Pueblo

, Colorado ;

2 . We set the final rate of compensation for Great Lakes Aviation, Ltd

., for the provision of

essential air service at Pueblo

, Colorado , as described in Appendix C ;

3 . We direct Great Lakes Aviation, Ltd

. 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 d ocumentation shall be retained for seven years 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 f or any claim that is not supported under the terms of this order;

4 . We find that Great Lakes Aviation, Ltd

., continue s to be fit, willing and able to operate as a

commuter carrier and capable of providing reliable essential air service at Pueblo

, Color ado ;

5 . Th is docket will remain open until further order of the Department; and

6 . We will serve copies of this order on the City Manager of Pueblo, Colorado, the Director of

Aviation at Pueblo Memorial Airport

, and Great Lakes A viation , Ltd.

By:

SUSAN L. KURLAND Assistant Secretary

for Aviation and International Affairs

(SEAL)

An electronic version of this document is available at http://www.regulations.govAppendix A



## AREA MAPAppendix BAppendix C

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at Pueblo

, Colorado

Effective Period : February 1, 2012, through January 31, 2014

Scheduled Service : 1 2 nonstop round trips each week t o Denver International Airport

Aircraft : Beechcraft 1900

- D

, 19 seats Rate per Eligible Flight: $ 1, 298 1
Weekly Ceilin g : $ 31,1 5 2 2

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 elemen ts 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 b een 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 jeop ardize 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

safel y 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 complete, terminates or reduces payments for service or changes service requirements at a specific lo cation 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 regar d 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.

Fund s are not currently available for performance under this order beyond September 30, 2012

. The Department’s obligation for performance under this order beyond September 30, 2012 , is subject to the availability of appropriated funds from which payment for s ervices can be made. No legal liability on the part of the Department 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.

Subsidy contracts are subject to, and incorporate by reference, relevant statutes and Department regulations, as they may be amended from time to tim e. 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.

1 Annual compensation of $1,592,276 , divided by 1,227 annual departures (313 service days x 4 flights per service day x 98 percent completion)

. 2 24 arrivals and depa rtures per week (per community) multiplied by $ 1,298 per flight.