Order: 2014-7-12

Served: July 14, 2014

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 14th day of July, 2014

Essential Air Service at

LAUREL/HATTIESBURG, MISSISSIPPI

MERIDIAN, MISSISSIPPI

DOCKET DOT-OST-2001-10685

DOCKET DOT-OST-2008-0112

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

ORDER SELECTING AIR CARRIER

Summary

By this Order, the Department is selecting ExpressJet Airlines (ExpressJet), to provide 

Essential Air Service (EAS) at Laurel/Hattiesburg and Meridian, Mississippi, using 50-

passenger Canadair Regional Jet (CRJ200) aircraft to Dallas/Fort Worth International 

Airport (Dallas or DFW) for the period from November, 1, 2014, through 

October 31, 2016. At each community, ExpressJet will provide 12 nonstop or one-stop 

round trips per week over a Meridian-Laurel/Hattiesburg-Dallas or Laurel/HattiesburgMeridian-Dallas routing for a combined annual subsidy of $7,821,307 ($3,910,654 for each 

community).

1

Background

By Orders 2012-5-17 (May 22, 2012) and 2012-7-35 (July 30, 2012), the Department 

selected Silver Airways (Silver) to provide 12 nonstop round trips per week at 

Laurel/Hattiesburg and 13 nonstop round trips per week at Meridian for an annual subsidy 

of $2,965,667 and $2,417,808, respectively. At both communities, Silver operates 34-

passenger Saab 340 aircraft to Hartsfield-Jackson Atlanta International Airport (Atlanta).2 

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

2 By Order 2012-5-17, the Department also selected Silver to provide EAS at Muscle Shoals, Alabama, 

Greenville, and Tupelo, Mississippi. We will address those communities’ EAS in a separate Order.
- 2 -

On April 9, 2014, Silver filed a 90-day notice of its intention to terminate scheduled air 

service at Laurel/Hattiesburg and Meridian. As a result of that notification, the Department 

issued Order 2014-4-24 prohibiting Silver from terminating service and requesting 

proposals from air carriers interested in providing EAS at the communities for a new term.3 

In response to that Order, three air carriers submitted proposals: Aerodynamics, Inc. (ADI), 

ExpressJet, and Sun Air Express, LLC d/b/a Sun Air International (Sun Air).

All three air carrier’s proposals and the communities’ comments may be accessed online at 

www.regulations.gov by entering each community’s respective Docket number in the 

search block.

Proposal of ADI

ADI submitted proposals to serve Laurel/Hattiesburg and Meridian as an inseparable, “allor-nothing” package – meaning that their proposal to provide EAS is on the condition that 

they are awarded the EAS contract for all three communities.4

 At Laurel/Hattiesburg, ADI 

proposed to provide 12 nonstop round trips per week to Atlanta using 50-passenger 

Embraer-145 aircraft (EMB145) for an annual subsidy of $4,443,553. At Meridian, ADI 

proposed to provide 14 nonstop round trips per week to Atlanta using EMB145 aircraft for 

an annual subsidy of $4,119,628.

Proposal of ExpressJet

ExpressJet proposed to provide 12 round trips per week at both Laurel/Hattiesburg and 

Meridian from DFW using CRJ200 aircraft for a combined annual subsidy of $7,821,307. 

The airline will provide a mix of nonstop and one-stop service over a MeridianLaurel/Hattiesburg-DFW or Laurel/Hattiesburg-Meridian-DFW routing. ExpressJet states 

that under its proposal, passengers would be seamlessly connected into American Airlines’ 

global network. 

Proposal of Sun Air

Sun Air proposed to provide service at Laurel/Hattiesburg with 26 nonstop round trips per 

week to Louis Armstrong New Orleans International Airport (New Orleans) using 8-

passenger twin-engine Piper Chieftain aircraft for an annual subsidy $2,543,285.

Community Comments

We received comments from the Mayors of Hattiesburg, Laurel, and Meridian, all strongly 

supporting the selection of ExpressJet to provide EAS at their communities. The Mayors 

of Laurel and Hattiesburg both based their support of ExpressJet on the fact that the carrier 

would use 50-passenger regional jets and offer service to Dallas/Fort Worth International 

Airport, both of which they believed would provide travelers better service and more 

connecting opportunities. The Mayor of Meridian noted that ExpressJet’s codeshare with 

American Airlines, its approval by the Department of Defense to carry military personnel, 

 3 Silver also filed notice to terminate service at Muscle Shoals, Alabama, Greenville, and Tupelo, Mississippi,

and Order 2014-4-24 prohibited Silver from terminating service at those communities as well. 4 ADI also proposed service to Tupelo, which was included with Laurel/Hattiesburg and Meridian as part of 

the air carrier’s inseparable package. 
- 3 -

and its authority from the Department of Transportation's Economic Fitness Division to 

provide scheduled passenger service, all pointed in favor of supporting ExpressJet’s 

proposal. 

Decision

After carefully reviewing all the airlines’ proposals and the communities’ comments, the 

Department has decided to select ExpressJet to provide EAS at Laurel/Hattiesburg and 

Meridian. The communities overwhelmingly support ExpressJet’s proposal and we find 

the service levels proposed to be reasonable. We base our decision on the five carrier 

selection criteria contained in 49 U.S.C. §41733(c), in addition to its proposed subsidy 

level: 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, 

giving substantial weight to the views of the elected officials representing the users; and 5) 

whether the carrier has included a plan in its proposal to market its service to the 

community. 

First, ExpressJet, a wholly-owned subsidiary of SkyWest, Inc.,

5 has a proven record of 

providing reliable EAS. ExpressJet previously provided EAS at Meridian from Atlanta, as 

a Delta Connection carrier, and SkyWest Airlines has extensive experience providing EAS 

at numerous communities throughout the country. ExpressJet’s service would operate as 

American Eagle and, thus, would provide passengers access to American Airlines’ global 

network. In addition, ExpressJet’s service to DFW International Airport, a large hub 

airport and the largest hub for American Airlines, will provide customers with seamless 

connections to the national air transportation system. Furthermore, ExpressJet has 

unanimous community support, a key carrier-selection criterion. While ExpressJet did not 

include in their proposal a plan to market their service, neither did ADI nor Sun Air.

We are concerned that ExpressJet projects a subsidy per passenger of $313 for each

community. Currently the subsidies per passenger based on FY2013 data for 

Laurel/Hattiesburg and Meridian are $250 and $192, respectively. Service provided by 

Silver was not satisfactory, and, as a result, traffic levels dropped significantly. However, 

the Department of Transportation and Related Agencies Appropriations Act 2000, 

prohibits the Department from subsidizing EAS to communities located within the 48 

contiguous States receiving per passenger subsidy amounts exceeding $200, unless the 

communities are located more than 210 miles from the nearest large or medium hub.6

 

Both Laurel/Hattiesburg and Meridian are within 210 miles of Memphis International 

Airport, a medium hub airport, and therefore subject to the $200 cap. The Department 

fully expects both communities and ExpressJet to work cooperatively to ensure subsidy 

rates are in compliance with the $200 per passenger cap to remain eligible for EAS.7

 

 5 SkyWest, Inc. is also the holding company of SkyWest Airlines.

6 Congress first established the $200 ceiling under P.L. 101-164 for fiscal year 1990, and reestablished it in 

fiscal years 1994-1999. The ceiling was made permanent by P.L. 106-69, the Department of Transportation 

and Related Agencies Appropriations Act of 2000.

7 On May 1, 2014, a Notice of Proposed Enforcement Policy on the $200 per passenger subsidy cap was 

published in the Federal Register (Volume 79, Issue 84). It outlined the Department’s proposed policy on 

this issue, which would use traffic data from October 1, 2014, through September 30, 2015, to measure 
- 4 -

Based on ExpressJet’s prior experience to provide reliable service, we have a high degree 

of confidence that traffic levels will increase dramatically, which will ensure that the

communities’ subsidy per passenger will be in compliance with the $200 per passenger 

subsidy cap.

Service Transition

We expect Silver to maintain its current service levels at the subsidy rates described in 

Order 2012-5-17 and 2012-7-35, until ExpressJet begins operations at both communities, 

which, at this time, is expected to begin in November 2014.

We expect Silver and ExpressJet to work together to make a smooth transition at both 

communities. In that regard, before Silver suspends its service, we expect it to notify all 

passengers holding reservations for travel after the suspension date, to assist those 

passengers in making alternate air transportation arrangements, or to provide a refund of 

the ticket price, without penalty, if requested. 

This decision is contingent upon the Department’s receiving properly executed 

certifications from the air carrier that they are in compliance with the Department’s 

regulations regarding drug-free workplaces and nondiscrimination, as well as the 

regulations concerning lobbying activities.8

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. ExpressJet is subject 

to the Department’s continuing fitness 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 findings. We therefore conclude that ExpressJet 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 ExpressJet Airlines to provide Essential Air Service at Laurel/Hattiesburg 

and Meridian, Mississippi, and establish the annual subsidy rates as described in 

Appendix C;

2. We direct ExpressJet 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 documentation shall be retained for seven years 

 

compliance. The Department solicited public comments on the policy and they were due June 30, 2014. 

Refer to www.regulations.gov and search “DOT-OST-2014-0061” for more information. 8 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
- 5 -

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 may forfeit its compensation for any claim that is not 

supported under the terms of this Order;

3. We find that ExpressJet Airlines is fit, willing and able to operate as a certificated air 

carrier, and capable of providing reliable Essential Air Service at Laurel/Hattiesburg and 

Meridian, Mississippi;

4. We require Silver Airways to maintain its current service at Laurel/Hattiesburg and 

Meridian, Mississippi, until ExpressJet Airlines commences service;

5. These dockets will remain open pending further Department action; and

6. The Department will serve a copy of this Order on the mayors of Hattiesburg, Laurel, 

and Meridian, Mississippi; the airport managers of Hattiesburg-Laurel Regional Airport 

and Meridian Regional Airport; Aerodynamics, Inc., ExpressJet Airlines; and Sun Air 

Express, LLC d/b/a Sun Air International.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at

www.regulations.gov
Appendix A

AREA MAP

Maps generated by the Great Circle Mapper - copyright © Karl L. Swartz.

 
 Appendix B

ExpressJet Proposal for EAS at Laurel/Hattiesburg and Meridian, MS
Appendix C

Page 1 of 2

ExpressJet Airlines

Essential Air Service to be Provided at Laurel/Hattiesburg, Mississippi

DOT-OST-2001-10685

Annual Subsidy: $3,910,654

Effective Period: November 1, 2014 through October 31, 2016

Scheduled Service: 12 nonstop and one-stop round trips per week to Dallas/Fort International 

Airport (DFW)

Aircraft: 50-passenger CRJ200 (50 passenger seats)

Rate per Eligible Flight: $3,1981

Weekly Ceiling: $76,7522

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 

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 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 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 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 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 payments 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 performance under this Order beyond September 30, 2014. The Government’s obligation for 

performance under this Order 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 under 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 must be submitted by November 30, and so on.

 1 Annual compensation of $3,910,654 divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98

percent completion). 2 24 arrivals and departures per week multiplied by $3,198 per flight.
 Appendix C

Page 2 of 2

ExpressJet Airlines

Essential Air Service to be Provided at Meridian, Mississippi

DOT-OST-2008-0112

Annual Subsidy: $3,910,654

Effective Period: November 1, 2014, through October 31, 2016

Scheduled Service: 12 nonstop and one-stop round trips per week to Dallas/Fort Worth 

International Airport (DFW)

Aircraft: CRJ200 (50 passenger seats)

Rate per Eligible Flight: $3,1981

Weekly Ceiling: $76,7522

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 

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 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 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 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 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 payments 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 performance under this Order beyond September 30, 2014. The Government’s obligation for 

performance under this Order 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 under 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 must be submitted by November 30, and so on.

 1 Annual compensation of $3,910,654 divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98

percent completion). 2 24 arrivals and departures per week multiplied by $3,198 per flight.