O rder: 2014

- 6

- 14

Served: June 24, 2014



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 24th of June , 20 1 4

ORDER REQUESTING PROPOSALS

Summary By this O rder, the Department is requesting proposals from air ca rriers interested in providing

E ssential A ir S ervice (EAS) at Escanaba , Michigan

, for a new contract period beginning January 1, 201 5 , with or without subsidy

. (See Appendix A for a map). Air c arriers should file their proposals no later than July 28

, 2014

.

Background
By Order 2012

- 4

- 10 (April 6

, 2012 ), the Department sel ected Delta Air Lines, Inc. (Delta) to provide 12 nonstop roun d trips per week to Detroit Metropolitan Wayne County Airport (Detroit) using 50

- passenger Canadair Regional Jet aircraft, for a two

- year period beginning

when Great Lakes inaugurated EAS at Iron Mountain, allowing Delta to terminate its previous obligatio n at Iron Mountain, which it served in conjunction with Escanaba at that time, for an annual subsidy of $2,833,558

. After a series of Orders, 1 the Department clarified Delta’s two

year selection at Escanaba to be from December 15, 2012, through December 3 1, 2014. 2

The complet e public file for EAS at Escanaba may be accessed online through the Federal Dockets Management System at www.regulations.gov by entering “DOT

- OST

- 2003

- 15128 ” in the “Search for Rules, Commen ts, Adjudications, or Supporting Documents” field.

1 See Orders 2012

- 6

- 9, June 15, 2012 ; 2012

- 9

- 11, September 11, 2012; and 2012

- 10

- 10, October 9, 2012, for

full details.

2 Delta proposed to be responsible for the provision of this service itself rather than one of its code

- share partners. Delta indicated that one of its Delta Connection carriers would perform the service and SkyWest is the airline currently operating the service

.

Essential Air Service at

ESCANABA , MICHIGAN

Under 49 U.S.C. § 41731 et seq

. Docket DOT

- OST

- 2003

- 15128- 2

-

Request for Proposals

As the end of the current contract approaches, the Department is requesting proposals from air carriers interested in providing EAS at Escanaba

, with subsidy support if necessary , f or a new contract period beginning January 1

, 201 5

. Carriers should file their proposals no later than July 28

, 20 14

. Staff will the n docket the proposals, thereby making them public

. Shortly afterwards, we will provide a summary of the proposals to the communit y and ask them to submit their final comments. We will give full consideration to all proposals that are timely

filed. 3

Interested air carriers should prepare their proposals with every expectation that their initial proposals will represent the ir final and only proposals. However, we retain the discretion to negotiate proposals with carriers when we deem it desirable; in such cases, of course, we will give all applicants the same opportunity. We also retain the discretion to reject outright al l unreasonable or unrealistic proposals and re

- solicit a new round of proposals. However, negotiation and rejection are only occasional exceptions to the rule.

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

whe n they prepare their proposals, but we will not prescribe a precise format for their proposals. Air carrier proposals should be submitted to the Department with all materials merged into a single document. In addition, because the document will be publis hed on www.regulations.gov

, each page should be formatted to be viewed online. We expect proposals to adequately describe the service being proposed and the annual amount of subsidy being requested. The applican ts can make their own judgments as to the level of detail they wish to present; however, we recommend they include information concerning proposed

schedules and projected block hours . In addition, applicants are urged to provide financial data supporting their subsidy requests, including information on their projected expenses and

revenues. We strongly encourage clear, well

- documented proposals that will facilitate their evaluation by the affected communit ies and the Department. 4

Proposals should provide sufficient capacity to accommodate historical levels of traffic. In order to assist air carriers in developing traffic and revenue projections for their proposals, we

3 Carriers should not expect th e Department to accept late fil ings. In cases where a carrier proposes to provide

EAS without subsidy and we determine that basic EAS, as required by 49 U.S.C. § 41732, can be reliably provided without such compensation, w e typically will not proceed with the carrier

- selection case. Instead, we simply rely on that carrier’s subsidy

- free service as proposed.

4 In selecting a carrier to provide subsidized EAS for an eligible place not in Alaska, 49 U.S.C. § 41733(c)(1)

direc ts us to consider five factors: (a) service reliability; (b) contractual and marketing arrangements with a larger carrier at the hub; (c) interline arrangements with a larger carrier at the hub; (d) community views, giving substantial weight to the views of the elected officials representing the users; and (e) whether the carrier has included a plan in its proposal to market its service to the community. In addition, the Consolidated Appropriations Act, 2014, Public Law No. 113

- 76, provides that when sele cting 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. Interested carriers should also be aware that our general provisions governi ng Essential Air Service 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

-

have provided a summary of historical passengers in Appendi x B. During the year ended

March 31

, 2014, Escanaba averaged 50 enplanements per day. The Department expects proposals that are co nsistent with what the community currently receives, with service to a large

- or medium

- hub airport that provides numerous connecting opportunities to t he national air transportation system. Specifically, air carriers should propose 2 round trips each weekday and weekend (12 per week) with 30

- passenger or larger aircraft. For air carriers proposing

service with 15

- seat to 29

- seat a ircraft, we expect 3 r oun d trips each weekday and weekend (18 per week). We would also consider proposals with 8/9

- seat aircraft and additional frequencies. Air c arriers are also welcome to propose more than one service option, if they

choose. T hey also need not limit themse lves to the se requirements if they envision other, potentially more attractive service possibilities

-- different hubs or length of contract, for example

-- with subsidy requirements that remain competitive.

Community Comments The community and State are welcome to submit comments at any time. We encourage prospective applicants to contact the community before they submit their proposals so that they can tailor them to the community’s needs, as they will not be able to amend them after

the due date. As n oted earlier, we will provide a summary of the proposals to the civic parties shortly after the deadline for carrier proposals, and ask them to submit their final comments.

Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces, and nondiscrimination. 5 Consequently, all carriers receiving Federal subsidy for 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 contract must also certify that they are in compliance with the regulations governing lobbying activities. Because the Department is prohibited from paying subs idy to carriers that do not submit these documents, all carriers that plan to submit proposals involving subsidy should be aware that the selected carrier will be required to complete the required certifications. Interested carriers requiring more detaile d information regarding these requirements should contact the Offic e of Aviation Analysis at (202) 366

- 5903. 6

This Order is issued under authority delegated in 49 CFR Part 1.25a(b) and re

- delegated to the Director, Office of Aviation Analysis.

5 The regulations applicable to these areas are: (1) 49 CFR Part 20

-- New Restrictions on Lobbying; (2) 49 CFR Part 21

-- Nondiscrimination in Federally

- Assisted Programs of the Department of Transportation

-- Effectuation of Title VI of the Civil Rights Act of 1964; (3) 49 CFR Part 27

-- Nondiscrimination on the Bas is of Disability in Programs and Activities Receiving or Benefiting from Federal Financial Assistance; (4)

14 CFR Part 382

-- Nondiscrimination on the Basis of Disability in Air Travel; and (5) 49 CFR Part 29

-- Government

- Wide Debarment and Suspension (No n

- Procurement) and Government

- Wide Requirements for Drug

- Free Workplace (Grants).

6 The certifications are also available on the web at http:// www.dot.gov/policy/aviation

- policy/small

- community

rural

- air

- service/essential

- air

- service

.- 4

-

ACCORDING LY, 1. We request that carriers interested in providing Essential Air Service at Escanaba

, Michigan, submit their proposals, with subsidy support if necessary , no later than July 28

, 20 14 . The proposals should be e

- mailed to: michael.f.martin@dot.gov with the title “Proposal to Provide E AS at Escanaba , Michigan ”; 7

2. Th is docket will remai n open until further O rder of the Department; and

3 . We will serve copies of this O rder on the M ayor of Escanaba , Mic higan

, the Manager of

Delta County Airport , and the service 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(a), must file such petitions within seven (7) day s after the

date of service of this Order.

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 o f this document is available

o nline at www.regulations.gov

.

7 Questions regarding filings in response to this O rder may be directed to Michael Martin at (202) 366

- 6494 or mic hael.f.martin@dot.gov

.Appendix A

AREA MAP

Maps generated by the Great Circle Mapper

- copyright © Karl L. Swartz

.Appendix B

Escanaba, MI

Quarter Year Deplanements Enplanements Total Traffic Enplanements per Day

2011 2 3,207 2,9 98 6,205 40

2011 3 3,592 3,596 7,188 45

2011 4 3,728 3,762 7,490 47

2012 1 2,816 3,186 6,002 39

Annual

Totals 13,343 13,542 26,885 43

2012 2 3,425 2,956 6,381 41

2012 3 3,244 3,481 6,725 43

2012 4 4,344 3,312 7,656 48

2013 1 2,925 3,354 6,2 79 41

Annual

Totals 13,938 13,103 27,041 43

2013 2 3,622 3,309 6,931 44

2013 3 3,839 4,098 7,937 50

2013 4 4,101 3,990 8,091 51

2014 1 3,758 4,460 8,218 53

Annual

Totals 15,320 15,857 31,177 50Appendix C

Example of General Terms and Conditions fo r Essential Air Service

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 fl ight 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 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 flight s 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 go als 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 requiremen ts 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 amounts or at the stipulated service levels, the carrier may cease to provide service to that specific loc ation 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 by the Department and carrier do not constitute a total or partial reduction or cessatio n of payment.

Funds may not be available for performance under this Order beyond [DATE]. The Government’s obligation for performance under this Order beyond [DATE], 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 [DATE], until funds are made available to the Department for performance. If sufficient funds are not made available for performance beyond [DA TE] , 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 time. However, any such statutes, regulat ions, or amendments thereto shall not operate to controvert the foregoing paragraph.

All claims for payment, including any amended cl aims, must be submitted within 9 0 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 st ; August claims must be submitted by November 30 th , and so on.