### Order 2013
-4
- 7 Served: April 12, 2013 

## UNITED STATES OF AMERICA **DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY**  **WASHINGTON, D.C.** Issued b y the Department of Transportation

on the 12 th 

### of April, 2013 Essential Air Service at **ADAK ,**  **ALASKA** Under 4 9 U.S.C. 41731 et seq . **DOCKET DOT -**  **OST -** **20 00**  **- 8556** 

**ORDER REQUESTING PROPOSALS**  **Summary** By this Order, the Department is requesting proposals by May 9 , 2013 , from carriers interested in providing Essential Air Service (EAS) at Adak, Alaska, for a two - ye ar period, with or without subsidy
. **Background** By Order 2012
- 9
- 10, September 11, 2012, the Department selected Alaska Airlines, Inc., to provide EAS at Adak, Alaska, for a one
- ye ar period through September 30, 201 3
. An annual subsidy of $1,675,703 was established for two nonstop or one
- stop round trips per week to Anchorage with Boeing 737
-400 combi
- aircraft. **Request for Proposals** As the end of the current rate term approaches , we are requesting proposals from carriers interested in providing service at Adak, with or without subsidy, for the period beginning October 1 , 201 3 . Carriers should file their proposals by May 9, 201 3
. S taff will then docket the proposals, thereb y making them public. Shortly afterwards, we will provide a summary of the proposals to the community and S tate and ask them to submit their final comments. We will give full consideration to all proposals filed in a timely manner. 1 

### Interested carriers should prepare their proposals with every expectation that their initial proposals will also be their final and only proposals. We retain the discretion to negotiate proposals with carriers when we deem it desirable. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and, if necessary, solicit a new round of proposals. However, we anticipate that negotiation or rejection will remain only occasional exceptions to the rule.

1 

### Carriers should not expect the Department to accept late filings. 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 ty pically do not proceed with the carrier
- selection case. Instead, we sim ply rely on that carrier’s subsidy
- free service as proposed.

### - 2
-

We are here providing interested carriers with some basic information to serve as guidance when they

prepare their proposals, but we will not prescribe a precise format for their proposals. 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 include 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 the Department. We anticipate applying our usual carrier
- selection criteria and the general provisions governing subsidy pay ments for EAS
. 2 

### As always, we will formally solicit the community ’ s view s on any service options we receive before making a long
-term carrier
- selection decision. 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 both desirable to the community and meets the operational needs of the airlines, as carriers cannot amend their proposal after the due date. We encourage proposals that meet the community ’ s requirements in an efficient manner. Proposals should propose to provide one - or two sche duled round trip s per week with 60
- seat or larger aircraft

– although more capacity may be needed to accommodate historical traffic if smaller aircraft are proposed
. Carriers are also welcome to propose more than one service option, if they choose; they need not limit themselves to a single specific service pattern if they

envision other, potentially more attractive service possibilities

– different hubs, or longer terms for the contracted service

– with subsidy requirements that remain competitive. We note that since the last carrier
- selection proceeding, the new airport at Akutan (7AK) has begun to operate, and that there is fuel service available at that airport to carriers. If service to Anchorage is proposed, carriers may consider making intermediate stops at Akutan , either to transport Akutan passengers or simply to refuel aircraft. **Filing Fo**  **rmat** Carrier proposals should be submitted to the Department with all materials merged into a single document. In addition, because the document will be publi shed on Regulations.gov, each page should be formatted to be viewed online.

2 

### In selecting a carrier to provide subsidized EAS in Alaska , 49 U.S.C. § 4 1733(c) (1) directs us to consider f ive 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; (4) community views; and (5) experienc e of the applicant in providing, in Alaska, scheduled air service or significant non
- scheduled air service. In addition**,** The Consolidated Appropriations Act, 2008, Public Law 110
- 161 , provides that when selecting a 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. Intereste d carriers should also be aware that our general provisions governing EA S 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 provisions.

### - 3
-

**Historical Traffic** In order to assist carriers in making their traffic and revenue projections, we have included historical traffic for the community in Appendix B for the most re cent annual periods. **Other Carrier Requirements** The Department is responsible for implementing various Federal statutes governing lobbying activities, drug
- free workplaces , and nondiscrimination. 3 

### Consequently, all carriers receiving Federal subsidy to support EAS must certify that they are in compliance with Department regulations regarding drug
- free workplaces and nondiscrimination, and those carriers whose subsidies exceed $100,000 over the life of the rate term must also certify that they are in compliance with the regulations governing lobb ying activities. Because the Department is prohibited from paying subsidy to carriers that do not submit these documents, the selected carrier will be required to submit them in order to receive subsidy. Interested 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 prohibited from paying subsidy to carriers that do not submit these documents. **Community Comments**  Civic officials and the State 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 May 9 , the due date for carrier proposals. This Order is issued under authority delegated in 49 CFR Part 1. 25 a(b) and re
- delegated to the Director, Office of Aviation Analysis. **ACCORDINGLY,** 1
. The Department requests proposals f rom carriers interested in providing EAS at Adak, Alaska . Carriers should submit their proposals, with subsidy if necessary, by May 9 , 2013
. Proposals should be emailed to EAS@dot.gov, with the title “Proposal to Provide EAS at Adak, Docket DOT
- OST
- 2000
- 8556
. ” Questions regarding filings may be directed to Kevin Adams at 202
- 366
- 1047 or Kevin.Adams@dot.gov ; 2
. This D ocket will remain open until further Order of the Department; and 3 . We will serve this Order on the s ervice list for this Docket. Persons entitled to petition the Department for review of this Order under the Department’s Regulations, 14 CFR Part 385. 31 , must file such petitions within seven ( 7 ) days after the date of service of this Order
.

3 The certifications are available on the web at http://www.dot.gov/policy/aviation
-policy/small
- community
-rural
- air
- service/essential
- air
- service

### -4
-

This Order will be effective immediately, and the filing of a petition for review shall not preclude its effectiveness. By :

**TODD M. HOMAN** Director Office of Aviation Analysis (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 Anchorage (ANC)) Shemya (SYA) 1 , 455 Adak (ADK) 1,192 Atka (AKB) 1,100 Dutch Harbor (DUT) 791 Ak utan (7AK) 753 Cold Bay (CDB) 620 Other Nonstop Great Circle Miles ADK
-AKB 107 ADK
- DUT 445 ADK
- 7AK 486 ADK
- CDB 617Ap pe ndi x B Ad akO ri gi n Ad akDe st in at io n Ad akO&D Pa sse nge r Eq ui va le nts Pa sse ng erE qui va le nts Pa sse ng erE qui va le nts Yea r Mont h Ps gr s. Fr ei gh t Ma il Tota l Ps gr s. Fre ig ht Ma il To ta l Ps gr s. Fre ig ht Ma il To ta l 2010 3 208 2. 5 6. 7 217. 2 163 108. 5 99. 9 371. 4 371 111. 0 106. 6 588. 6 2010 4 143 1. 2 15. 8 159. 9 101 133. 6 62. 7 297. 4 244 134. 8 78. 5 457. 3 2010 5 131 24. 3 6. 8 162. 1 182 146. 5 78. 8 407. 3 313 170. 8 85. 5 569. 4 2010 6 153 154. 1 4. 1 311. 2 141 125. 1 108. 2 374. 3 294 279. 1 112. 3 685. 5 2010 7 155 144. 3 3. 4 302. 7 155 174. 3 67. 3 396. 6 310 318. 6 70. 7 699. 3 2010 8 240 160. 8 8. 0 408. 8 239 151. 4 110. 7 501. 1 479 312. 1 118. 7 909. 8 2010 9 253 101. 0 15. 1 369. 2 197 196. 6 67. 0 460. 6 450 297. 6 82. 2 829. 8 2010 10 266 82. 9 5. 3 354. 2 235 102. 8 104. 2 442. 1 501 185. 7 109. 5 796. 2 2010 11 161 57. 3 5. 3 223. 6 142 71. 7 75. 6 289. 3 303 129. 1 80. 9 513. 0 2010 12 130 21. 5 6. 8 158. 3 117 56. 3 49. 0 222. 3 247 77. 8 55. 8 380. 6 2011 1 89 14. 9 2. 7 106. 7 97 68. 8 36. 9 202. 7 186 83. 8 39. 7 309. 4 2011 2 85 17. 2 4. 4 106. 6 84 68. 7 69. 4 222. 1 169 85. 9 73. 8 328. 7 YE 2/ 28/ 11 2, 014 782. 0 84. 4 2, 880. 3 1, 853 1, 404. 4 929. 9 4, 187. 2 3, 867 2, 186. 3 1, 014. 2 7, 067. 5 2011 3 121 104. 6 3. 9 229. 6 114 84. 1 68. 2 266. 3 235 188. 7 72. 2 495. 9 2011 4 88 74. 7 1. 0 163. 7 102 101. 2 44. 8 248. 0 190 175. 9 45. 8 411. 7 2011 5 146 61. 5 5. 4 212. 9 146 173. 4 75. 7 395. 0 292 234. 9 81. 1 608. 0 2011 6 139 77. 5 12. 8 229. 4 177 140. 3 47. 3 364. 6 316 217. 8 60. 2 594. 0 2011 7 176 238. 7 11. 3 426. 0 190 263. 1 58. 3 511. 4 366 501. 9 69. 5 937. 4 2011 8 232 15. 1 4. 4 251. 5 187 135. 9 129. 9 452. 8 419 151. 0 134. 3 704. 3 2011 9 176 96. 1 6. 7 278. 8 188 137. 1 60. 1 385. 2 364 233. 2 66. 8 664. 0 2011 10 230 93. 4 4. 0 327. 4 240 122. 0 60. 7 422. 6 470 215. 4 64. 6 750. 0 2011 11 180 16. 7 2. 9 199. 6 157 94. 6 80. 5 332. 2 337 111. 4 83. 4 531. 8 2011 12 183 21. 9 4. 2 209. 1 174 77. 4 51. 7 303. 1 357 99. 3 55. 9 512. 2 2012 1 131 52. 1 5. 1 188. 2 129 144. 2 72. 0 345. 2 260 196. 4 77. 1 533. 4 2012 2 101 62. 2 3. 7 166. 9 266 119. 6 50. 7 436. 3 367 181. 8 54. 4 603. 2 YE 2/ 28/ 12 1, 903 914. 7 65. 4 2, 883. 1 2, 070 1, 592. 9 799. 8 4, 462. 7 3, 973 2, 507. 6 865. 3 7, 345. 9 2012 3 187 237. 5 5. 3 429. 7 181 148. 7 70. 4 400. 1 368 386. 1 75. 7 829. 8 2012 4 268 43. 9 10. 1 322. 0 116 174. 7 94. 7 385. 4 384 218. 6 104. 8 707. 4 2012 5 172 213. 1 17. 8 402. 9 182 184. 1 53. 7 419. 8 354 397. 2 71. 5 822. 8 2012 6 223 335. 7 3. 1 561. 8 234 139. 5 66. 9 440. 4 457 475. 2 70. 0 1, 002. 2 2012 7 190 361. 0 3. 0 554. 0 175 173. 9 83. 4 432. 3 365 534. 9 86. 4 986. 3 2012 8 215 190. 4 6. 1 411. 5 243 184. 7 61. 4 489. 1 458 375. 0 67. 5 900. 5 2012 9 161 227. 7 2. 7 391. 4 133 107. 1 88. 0 328. 1 294 334. 9 90. 7 719. 6 2012 10 146 98. 1 2. 4 246. 5 150 76. 9 44. 2 271. 2 296 175. 0 46. 7 517. 7 2012 11 204 73. 8 5. 3 283. 1 190 71. 3 53. 2 314. 5 394 145. 1 58. 5 597. 5 2012 12 197 12. 5 2. 9 212. 5 197 75. 1 73. 2 345. 3 394 87. 7 76. 1 557. 7 2013 1 103 20. 2 3. 3 126. 5 129 72. 7 45. 0 246. 6 232 92. 9 48. 2 373. 1 2013 2 66 68. 4 4. 6 139. 0 154 106. 4 55. 9 316. 3 220 174. 8 60. 5 455. 3 YE 2/ 28/ 13 2, 132 1, 882. 4 66. 5 4, 080. 9 2, 084 1, 515. 0 790. 1 4, 389. 1 4, 216 3, 397. 3 856. 6 8, 470. 0 No te: 200 pounds of m ail or fre ig hti s onepa sse ng erequi va le nt(PE Q)
. Source : T-1 00 M ark et Repo rt

### Appendix C Example of General Terms and Conditions for Essential Air Ser vice 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 be en 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 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 pay ments for service or changes service requirements at a specific l ocation provided for under this Order, then, at the end of the period for which the Department does make pay ments 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 b y the Department and carrier do not constitute a total or partial reduction or cessation of pay ment. Sub sidy 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 may not be available for performance under this solicitation beyond [DATE]. The Department’s obligation for performance under this solicitation beyond [DATE], is contingent upon the availability of funds from which pay ment for service s can be made. No legal liability

on the part of the Government for any pay ment may arise for performance under this Order beyond [DATE], until funds are made available to the Department for performance. If funds are not made available for performance beyond [DATE], the carrier will receive notice in writing by the Department. All claims for pay

ment must be submitted within 60 days of the last day of service provided under this Order