Order 2013-12-14

Served: December 23, 2013

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 23rd day of December, 2013

ORDER REQUESTING PROPOSALS

Summary

By this Order, the Department is requesting proposals from carriers interested in providing 

Essential Air Service (EAS) at Ironwood, Michigan/Ashland, Wisconsin (Ironwood), Thief River 

Falls, Minnesota and/or Watertown, South Dakota, for a new contract period, beginning 

June 1, 2014, with subsidy support if necessary. (See Appendix A for a map). Carriers should 

file their proposals no later than January 22, 2014.

Background

By Order 2011-11-30 (November 23, 2011), the Department selected Great Lakes Aviation, Ltd.

(Great Lakes), to provide subsidized EAS at Thief River Falls, Minnesota, utilizing 19-seat 

Beech 1900D aircraft, with 12 nonstop round trips a week to Minneapolis at an annual subsidy 

rate of $1,881,815; and at Watertown, utilizing 19-seat Beech 1900D aircraft, with 18 nonstop 

round trips a week to Minneapolis, at an annual subsidy rate of $1,710,324, each for a two-year 

period. Great Lakes inaugurated service to Watertown on April 2, 2012, and at Thief River Falls 

on May 17, 2012.

By Order 2012-3-5 (March 7, 2012), the Department selected Great Lakes to provide subsidized 

EAS at Ironwood, utilizing 19-seat Beech 1900D aircraft, with 12 nonstop round trips a week to 

Minneapolis/St. Paul at an annual subsidy rate of $1,747,326, for two years beginning when 

Great Lakes inaugurated service at Ironwood and Rhinelander, Wisconsin. Great Lakes 

inaugurated service to Ironwood on March 11, 2012, but ultimately did not inaugurate service at 

Rhinelander, and another carrier was later selected to serve Rhinelander. 

Essential Air Service at

IRONWOOD, MICHIGAN/ASHLAND, 

WISCONSIN 

THIEF RIVER FALLS, MINNESOTA 

WATERTOWN, SOUTH DAKOTA 

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

Docket DOT-OST-1996-1266

Docket DOT-OST-2001-10642

Docket DOT-OST-2001-10644
2

Subsequently, by Order 2012-6-23 (June 26, 2012), the Department stated that it would use 

May 17, 2012, as the effective start-date when Great Lakes established EAS at Thief River Falls 

and a number of other communities. The contracts will thus expire at the end of the two year

period through the end of the 24th month thereafter, May 31, 2014.

Finally, by Order 2012-9-17 (September 14, 2012), the Department established the end date for 

Great Lakes’ contract to provide service at Ironwood as May 31, 2014, to synchronize it with 

other EAS contracts with Great Lakes into its Minneapolis-St. Paul hub (described above for 

Thief River Falls and Watertown).

The complete public file for EAS at Ironwood, Thief River Falls, and Watertown may be 

accessed online through the Federal Dockets Management System at: www.regulations.gov by 

entering “DOT-OST-1996-1266”; “DOT-OST-2001-10642”; “DOT-OST-2001-10644” in the 

“Search for Rules, Comments, Adjudications, or Supporting Documents” field.

Request for Proposals

As the end of the current contract approaches, the Department is requesting proposals from 

carriers interested in providing EAS at Ironwood, Thief River Falls, and/or Watertown, with 

subsidy support if necessary, for a new rate term beginning June 1, 2014. Carriers should file 

their proposals no later than January 22, 2014. Staff will then docket the proposals, thereby 

making them public. Shortly afterwards, we will provide a summary of the proposals to the 

community and ask them to submit their final comments. We will give full consideration to all 

proposals that are timely filed.1

Interested carriers should prepare their proposals with every expectation that their initial 

proposals will represent their 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 all 

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 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, we recommend they include information concerning proposed 

schedules and projected block hours. In addition, applicants are encouraged to provide financial 

data supporting their subsidy requests, including information on their projected expenses and 

 1 Carriers should not expect the Department to accept late fillings. 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, we typically will not proceed with the carrier-selection case. Instead, we simply rely on 

that carrier’s subsidy-free service as proposed.
3

revenues. We strongly encourage clear, well-documented proposals that will facilitate their 

evaluation by the affected communities and the Department.2

The Department expects proposals that are consistent with what the community currently 

receives, with service to a suitable hub airport that provides numerous connecting opportunities 

to the national air transportation system. If aircraft seating 30 passengers or larger are 

contemplated, we request proposals for 12 nonstop or one-stop round trips at each of the three 

communities. If smaller aircraft (9 seats) are contemplated, we may consider additional 

frequencies. We encourage proposals that meet these guidelines in an efficient manner. Carriers 

are also welcome to propose more than one service option, if they choose. They also need not 

limit themselves to these requirements if they envision other, potentially more attractive service 

possibilities -- different hubs or length of contract, for example -- with subsidy requirements that 

remain competitive.

Filing Procedures

Carrier proposals should be submitted to the Department with all materials merged into a single 

document. In addition, because the document will be published on Regulations.gov, each page 

should be formatted to be viewed online.

Service and Traffic History

For the most recent 12-month period where data is available, Ironwood average 8.1 enplanements 

per day, Thief River Falls 6.9, and Watertown 15.1. We have provided some historic traffic data 

for the communities in Appendix B. Traffic has deceased year over year. At Ironwood, 

passengers decreased by 659 (-11.51%), at Thief River Falls by 1,472 (-25%) and at Watertown 

by 5,046 (-35%), respectively.

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 

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

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 and Further Continuing Appropriations Act, 

2012, Public Law No. 112-55, and continued by the Full-Year Continuing Appropriations Act, 2013, Public Law 

No. 113-6, and the Continuing Appropriations Act, 2014, Public Law No. 113-46, 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. Interested carriers should also be aware that our general 

provisions governing 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 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 Basis 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 (Non-Procurement) and Government-Wide Requirements for DrugFree Workplace (Grants).
4

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 

subsidy 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 detailed information regarding these 

requirements should contact the Office of Aviation Analysis at (202) 366-5903.4

Community Comments

The community is 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 

noted 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.

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

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We request that carriers interested in providing Essential Air Service at Ironwood, 

Michigan/Ashland, Wisconsin, Thief River Falls, Minnesota, and Watertown, South Dakota, 

submit their proposals, with subsidy support if necessary, no later than January 22, 2014. The

proposals should be e-mailed to: EAS@dot.gov with the title “Proposal to Provide EAS at

Ironwood, MI, Thief River Falls, MN, and/or Watertown, SD”;5

2. These dockets will remain open until further Order of the Department; and

3. We will serve copies of this Order on the mayors of Ironwood, Michigan, Ashland, 

Wisconsin, Thief River Falls, Minnesota, and Watertown, South Dakota, the airport managers of 

Gogebic-Iron County Airport (Ironwood/Ashland), Thief River Falls Regional Airport, 

Watertown Regional Airport, and the service list for these dockets.

 4 The certifications are also available on the web at http://www.dot.gov/policy/aviation-policy/small-communityrural-air-service/essential-air-service. 

5 Questions regarding filings in response to this Order may be directed to Michael Gormas at (202) 366-1853 or mail

to:michael.gormas@dot.gov. 
5

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) days 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 of this document is available

online at http://www.regulations.gov. 
Appendix A

AREA MAP

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

Page 1 of 2 

EAS Carrier Traffic at:

Ironwood, MI/Ashland, WI (IWD)

1

Thief River Falls, MN (TVF)

Watertown, SD (ATY)

Ironwood, Michigan

Quarter Year Deplanements Enplanements Total Traffic

Enplanements per 

Day2

4 2011 957 982 1,939 12.3

1 2012 591 674 1,265 8.2

2 2012 495 444 939 6.0

3 2012 784 798 1,582 10.0

Annual 

Totals 2,827 2,898 5,725 9.1

4 2012 604 616 1,220 7.7

1 2013 477 544 1,021 6.6

2 2013 637 531 1,168 7.5

3 2013 809 848 1,657 10.5

Annual 

Totals 2,527 2,539 5,066 8.1

Thief River Falls, Minnesota

Quarter Year Deplanements Enplanements Total Traffic

Enplanements per 

Day

4 2011 556 648 1,204 7.6

1 2012 740 761 1,501 9.7

2 2012 731 660 1,391 8.9

3 2012 876 823 1,699 10.8

Annual 

Totals 2,903 2,892 5,795 9.3

4 2012 561 575 1,136 7.2

1 2013 529 531 1,060 6.9

2 2013 497 499 996 6.4

3 2013 584 547 1,131 7.2

Annual 

Totals 2,171 2,152 4,323 6.9
Appendix B

Page 2 of 2

Watertown, South Dakota

Quarter Year Deplanements Enplanements Total Traffic

Enplanements per 

Day

4 2011 2,548 2,566 5,114 32.4

1 2012 2,243 2,306 4,549 29.5

2 2012 1,056 994 2,050 13.1

3 2012 1,416 1,385 2,801 17.7

Annual 

Totals 7,263 7,251 14,514 23.2

4 2012 1,289 1,289 2,578 16.3

1 2013 1,259 1,093 2,352 15.3

2 2013 1,245 1,166 2,411 15.5

3 2013 1,088 1,039 2,127 13.5

Annual 

Totals 4,881 4,587 9,468 15.1

Notes:

1. Source: Bureau of Transportation Statistics T-100 Market.

2. Enplanements per Day = Total Traffic/2/313 annual service days (314 in leap years).
Appendix C

Example of General Terms and Conditions for 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 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 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 complete, 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 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 by the Department and carrier do not 

constitute a total or partial reduction or cessation 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 [DATE], 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, regulations, or 

amendments thereto shall not operate to controvert the foregoing paragraph.

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 31st; August claims must be submitted by November 30th, and so on.