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From: Swanson, Brian (OST) ;:[ rprcATjrJMq 

Sent: Tuesday, January 11, 2011 11:10 AM • --• ' v^' -

To: 'dale.janway@cityofcarlsbadnm.com'; 'ssummers@cityofclovis.orc|'; 

'gbrumfield@cityofclovis.org'; 'jtliomas@cityofy!yvife.brg'f^^ilva^cityofdeming.org'; 

'mayor@townofhurleynm.com'; 'mayor@townofsilvercity.org'; 'jsaari@grantcountynm.com'; 

'Truitt, Lee, NMDOT' 

Cc: Devany, Dennis (OST); 'Ctiucl< Howell (chowell@flygreatlakes.com)'; 'Greg Kahlstorf'; 

'Seaport/Wings of Alaska, Rob McKinney'; 'Mickey Bowman (mbowma@gulfstreamair.com)' 

Subject: Soliciting Comments on EAS in New Mexico 

All: 

I would like to update you on the Essential Air Service (EAS) situation in New Mexico and give you an opportunity to 

submit comments if you wish. 

In anticipation of the end of Great Lakes' current contract on April 30, 2011, the Department issued Order 2010-11-9 on 

November 10, 2010, to solicit proposals from all interested air carriers to provide EAS at Clovis and/or Silver 

City/Hurley/Deming (Silver City), for a new two-year term, beginning May 1, 2011. Similarly, by Order 2010-12-10 on 

December 6, 2010, and in anticipation of the end of New Mexico Airlines' current contract at Carlsbad on May 31, 2011, 

the Department solicited proposals from all interested air carriers to provide EAS at Carlsbad, for a new two-year term, 

beginning June 1, 2011. In response to the requests for proposals. Great Lakes, New Mexico Airlines, Gulfstream 

International Airlines, Inc. (Gulfstream), and Alaska Juneau Aeronautics, Inc. d/b/a SeaPort Airlines (SeaPort) submitted 

proposals, which are summarized briefly below. 

On January 7, 2011, New Mexico Airlines provided notice to the Department that it will launch three daily nonstop round 

trips between Albuquerque and Clovis, on a subsidy-free basis, utilizing 9-seat Cessna 208B aircraft, starting 

May I, 2011. We noted in footnote I of Order 2010-11-9, "In cases where a carrier proposes to provide essential air 

service without subsidy and we determine that service can be reliably provided without such compensation, we do not 

proceed with the carrier-selection case. Instead, we simply rely on that carrier's subsidy-free service as proposed." (See 

also 49 U.S.C. §§ 41732 (b)(3)(A) and 41733 (d), stating that the Secretary shall pay compensation only when it is 

necessary to maintain EAS at the community.) As a result, the Department will rely on New Mexico Airlines' proposed 

subsidy-free flights to serve as EAS at Clovis. We will also synchronize the end dates for the new two year contracts for 

EAS at Carlsbad and Silver City. 

We assure Clovis, however, that the community is still entitled to EAS. Therefore, if at some point in the future New 

Mexico Airlines decided to suspend service at Clovis, it would first have to file a 90-day notice of its intent to suspend 

service, and the Department would require New Mexico Airlines to continue to provide service until we could secure 

replacement service through a carrier-selection process. 

New Mexico Airlines 

New Mexico Airlines submitted "stand-alone" proposals at Carlsbad and Silver City for service to Albuquerque, utilizing 

9-seat Cessna 208B aircraft. At Carlsbad, the carrier would provide 12 weekly nonstop round trips for an annual subsidy 

requirement of $1,350,253. At Silver City, the carrier would provide 18 weekly nonstop round trips for $1,332,184. 

Gulfstream 

Gulfstream submitted a proposal for service at Carlsbad, Clovis and Silver City. However, the carrier's proposal for 

service at the 3 New Mexico EAS communities was also packaged together with service at 4 Arizona EAS communities 

in an "all or nothing" bid, and because we will rely on New Mexico Airlines' subsidy-free service at Clovis, Gulfstream's 

proposal will not be considered. 

SeaPort 

SeaPort would utilize 9-seat Pilatus PC-12 aircraft and has proposed to operate from non-sterile gates at Silver City, 

Carlsbad and Albuquerque. At Silver City, SeaPort proposed two service options. Option #1 would provide 18 nonstop 

1 
round trips to Albuquerque a week for an annual subsidy of $1,449,352. Option #2 would provide 14 daily nonstop round 

trips to Albuquerque a week for annual for $1,127,805 in annual subsidy. Please note that the number of weekly round 

trips at Silver City for Options #1 and #2 are consistent with the text of SeaPort's proposal but differ slightly from the 

exhibits the carrier submitted. At Carlsbad, the carrier proposed to provide 12 nonstop round trips per week to 

Albuquerque for a first-year subsidy of $1,156,001 and a second-year rate of $1,152,468. SeaPort's proposal includes 

mention of an interline agreement with US Airways; however, the details and applicability of the agreement at 

Albuquerque are not discussed. 

Great Lalces 

Great Lakes, the incumbent carrier at Clovis and Silver City, submitted a proposal with stand-alone options for EAS at the 

two communities utilizing 19-seat Beech 1900 aircraft. Under its proposal, Great Lakes proposes to provide 12 nonstop 

round trips per week between Silver City and Albuquerque, Phoenix or Denver, one-stop over Santa Fe or a combination 

of Phoenix and Denver via Santa Fe at annual subsidy of $1,594,092. 

Copies of the proposals were sent via email last week and may also accessed online through the Federal Docket 

Management System at: http://www.regulations.gov. by doing a search on DOT-OST-2002-12802 (for Carlsbad) and 

DOT-OST-21996-1903 (for Silver City). 

Please note that the average passenger fare shown its proposal does not necessarily reflect the average local fare 

passengers would actually pay, but, rather, reflect a prorated portion of the total ticket price (e.g., the Carlsbad -

Albuquerque portion of a Carlsbad - Albuquerque - Washington, D.C. ticket) that the subsidized carrier would realize. 

Also, the fare shown is net of certain charges such as Federal transportation security fees, excise or ticket taxes, and 

Passenger Facility Charges. Of course, carriers have the discretion to charge fares they deem appropriate, and the 

passenger fare presented in the proposal has been developed for subsidy rate computation purposes only. Based on the 

cost elements incorporated in the carriers' computation summary, the carriers would have to realize passenger fares 

comparable to the averages shown in their proposals in order to achieve break-even or profitable operations without 

subsidy. 

You should also note that the carriers' schedules may change to reflect changing conditions (e.g., to better meet shifting 

connecting bank times at the hub). The Department does expect subsidized air carriers to maintain well-timed and wellspaced flights in order to ensure full compensation. 

We request that you submit any comments you may have as soon as possible, but in any case no later than February 11, 

2011. Please send your comments by fax to 202-366-7638 or by email to both dennis.devany@dot.gov and 

brian.swanson@dot.gov. Our rules require that you send your comments to carriers as well. If you have any questions, or 

need more time to reply, please feel free to contact Brian Swanson of my staff at 202-366-5392. 

Sincerely, 

Dennis J. DeVany 

Chief, Essential Air Service Division, X-53 

Office of Aviation Analysis 

From: Swanson, Brian (OST) 

Sent: Friday, January 07, 2011 4:03 PM 

To: 'daie.janway@cityofcarlsbadnm.com'; 'administration@cityofciovis.org'; 'mayor@cityofciovis.org'; 

'mayor@townofsilvercity.org'; 'hurley@hurleynm.com'; 'services@cityofdeming.org'; 'ssummers@cityofclovis.org' 

Cc: Devany, Dennis (OST); Chuck Howell (chowell@flygreatlakes.com); 'Greg Kahlstorf; 'Seaport/Wings of Alaska, Rob 

McKinney'; Mickey Bowman (mbowma@gulfstreamair.com); Truitt, Lee, NMDOT 

Subject: New Mexico EAS proposals 

All: 
In advance of the weekend, attached please find the proposals submitted for EAS at Carlsbad, 

Clovis, and Silver City/Hurley/Deming, New Mexico. 

A second e-mail/letter will follow shortly summarizing the proposals and soliciting community 

comments and preferences. 

Regards, 

Brian Swanson, AICP 

U.S. Department of Transportation 

Office of Aviation Analysis, X-50 

W86-473 

1200 New Jersey Avenue, S.E. 

Washington, DC 20590 

Tel 202.366.5392 

Fax 202.366.7638