O rder: 2014

- 3

- 1 3

Served: March 21, 2014



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 21 st day of March , 20 1 4

Essential Air Service at

CHISHOLM/HIBBING, MINNESOTA DOCKET DOT

- OST

- 2003

- 15796

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



### ORDER SELECTING AIR CARRIER

Summary By th is O rder, the Department is selecting SkyWest Airlines , operating as Delta Connection ( SkyWest )

, to provide Essential Ai r Service (EAS) at Chisholm/Hibbing

, Minnesota (Hibbing)

, using 50

- passenger Canadair Regional Jet CRJ200 (CRJ200) aircraft to Minneapolis

- St. Paul International Airport (Minneapolis) f or the two

- year term from

Ju ne 1, 2014, through May 31, 2016 for an annual subsidy of $2,535,502

.

Background By Order 2012

- 4

- 10 (April 6, 2012), the Department selected Delta Air Lines, Inc. (Delta) to provide 12 nonstop round trips per week from Hibbing to Minneapolis using CRJ200

aircraft for a two

- year period which is scheduled to expire on May 31, 2014 , at an annual subsidy of $2,517,770

. 1

1 Hibbing’s contract start date was established to coincide when Great Lakes Aviation, Ltd. inaugurated service at Thief River Falls, Minnesota. Thief River Falls and Hibbing were traditionally packaged on one EAS order since both had been served by Mesaba Aviation, Inc., operating as Delta Connection. Great Lakes inaugurated service at Thief River Falls on May 18, 2012 and thus making the expiration date of Delta’s

c ontract to serve Hibbing May 31, 2014.- 2

-

As the end of the contract was approaching, we issued Order 2013

- 11

- 24 (November 26, 2013) requesting proposals from air carriers interested in providing EAS at the community for a new term. In respo nse to that Order, SkyWest, the airline currently providing the service on behalf of Delta, was the onl y airline to submit a proposal. 2

SkyWest’s complete proposal and the community’s comments may be accessed online at www.regulations.gov by entering DOT

- OST

- 2003

- 15796 in the search block.

Proposal of SkyWest Airlines SkyWest submitted a proposal for a two

- year term for 12 weekly n onstop round trip s to Minneapolis usi ng CRJ200 aircraft for an annual subsidy of $2,535,502

. It plans to operate the service as Delta Connection.

Community Comments

On January 8, 2014 , the Department solicited comments from the community regarding

this air carrier selection case. We received a joint letter from Shaun J. Germolus,

Executive Director of the Chisholm

- Hibbing Airport Authority (CHAA), The Honorable

Rick Can nata, Mayor of Hibbing and The Honorable Michael Jugovich, Mayor of Chisholm supporting SkyWest’s proposal to continue providing EAS at

Chisho lm/Hibbing. The communities noted their particular support for SkyWest’ s proposal to operate as a Delta Connectio n carrier , which gives passengers access to Delta’s frequent flyer program, SkyMiles; worldwide connections through Delta’s hub at Minneapolis; and the use of the CRJ200 aircraft.

Decision Since SkyWes t was the only air carrier to submit a proposal for Chisholm/ Hibbing’s EAS

case
, t he co mmunity fully supports the carrier’s proposal and w e find the service and subsidy levels to be reasonable , the decision to select them is clear

.

We shall make this selection of SkyWest at Chisholm/Hibbing contingent upon the Department’s receiving properly executed certifications from the air carrier s that they are in compliance with the Department’s regu lations regarding drug

- free workplaces and nondiscrimination, as well as the regulations concerning lobb ying activities. 3

2 This reflects a change from the previous Order in that SkyWest will be responsible for this service, rather than Delta, but will operate as Delta Connection , thus providing the community with virtually the same

serv ice it has been receiving under the previous contract

. 3 The certifications are available online under “Reports and Publications” at http://www.dot.gov/policy/aviation

- policy/small

- community

- rural

- air

- service/essential

- air

- service- 3

-

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that we find an air carrier fit, willing, and able to provide reliable service before we may subsidize it to provide EAS

. SkyWest is subject to the Department’s continuing fitnes s requirements, and no information has come to our

attention that would cause us to question the air carrier’s fitness at this time. We have contacted the Federal Aviation Administration, and it has raised no concerns that would negatively affect our fitness findin gs. We therefore conclude that SkyWest is reliable and fit to conduct the operations proposed here.

This Order is issued under authority delegated in 49 CFR Part 1

. 25a(b)

.

ACCORDINGLY,

1

. We select SkyWest Airlines to provide Essential Air S ervice at Chisholm/Hibbing,

Minnesota

, and establish the annual subsidy rate as described in Appendix C;

2

. We direct SkyWest Airlines 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

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 s may forfeit its compensation for any claim that is not supported under the terms of this Order ;

3 . We f i nd that SkyWest Airlines is fit, willing and able to operate as a c ertificated air

carrie r
, and capable of providing reliable Essential Air S ervice at Chisholm/Hibbing ;- 4

-

4

. This docket will remain open pending further Department action ; and

5

. The Department will serve a copy of this O rder on the Mayor s of Chisholm and Hibbing, Minnesota, the Executive Director at Chisholm

- Hibbing Airport Authority

, and SkyWest A irlines.

B y:

SUSAN L. KURLAND Assistant Secretary for

Aviation and International Affairs

(SEAL)

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



## AREA MAP

Maps generated by the Great Circle Mapper

- copyright © Karl L. Swartz

.Appendix B



### SkyWes t Proposal for EAS at Chisholm/HibbingAppendix C

SkyWest Airlines

Essential Air Service to be Provided at Chisholm/Hibbing, Minnesota

Effective Period : June 1, 2014

, through May 31

, 2016

Scheduled Service : 12 weekly nonst op round trips to Minneapolis

Aircraft : 50

- passenger CRJ200 Rate per Eligible Flight: $ 2,073 1
Weekly Ceiling : $ 49,752 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 significan t elements of the required service, without prior approval. The carrier understands that an aircraft take

- off and lan ding 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 subsi dy. In addition, if the carrier does not schedule or operate its flights in full conformance with the Order for a significant per iod, it may jeopardize its entire subsidy claim for the period in question. If the carrier contemplates any such changes beyo nd 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 Dep artment 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. I n determining whether sub sidy 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 De partment 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 paymen ts in the stipulated service levels, the carrier may cease to provide service to that specific location without regards 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 may not be available for pe rformance under this O rder beyond September 30, 2014

. The Government’s obligat ion for performance under this O rder beyond September 30, 2014

, is subject to the availability of 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 u nder this order beyond September 30, 2014 , until funds are made available to the Department for performance. If sufficient funds are

not made available for performance beyond September 30, 2014 , the Department will provide notice in writing to the carrier

.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which compensation is being claimed. For example, claims for service provided in July must be filed by

October 31; August claims mus t be submitted by November 30, and so on.

1 A nnual compensation of $2,535,502 divide d by the 1,223 annual departures (24 weekly departures x 52 weeks x 98 percent completion)

. 2 24 arrivals and depa rt ures per week multiplied by $ 2,073 per flight

.