Order 2012-2-8

Served: February 10, 2012

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 10th of February, 2012

Essential Air Service at

ADAK, ALASKA

ATKA, ALASKA

NIKOLSKI, ALASKA

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

DOCKET DOT-OST-2000-8556

DOCKET DOT-OST-1995-363

DOCKET DOT-OST-1995-363

ORDER REQUESTING PROPOSALS

Summary

By this Order, the Department is requesting proposals by March 9, 2012, from carriers 

interested in providing Essential Air Service (EAS) at Adak, Atka, and/or Nikolski, 

Alaska, for the two-year period beginning July 1, 2012, with or without subsidy. 

Background

By Order 2010-7-9 the Department selected Alaska Airlines, Inc., to provide EAS at 

Adak and Peninsula Airways, Inc. (PenAir) at Atka and Nikolski through June 30, 2012. 

Annual subsidy and service levels were established as follows: Adak, $1,675,703 for two 

nonstop or one-stop round trips per week to Anchorage with Boeing 737-400 aircraft; 

Atka, $290,780 for three nonstop round trips per week to Dutch Harbor with eight-seat 

Metro III aircraft;1 and Nikolski, $639,008 for two nonstop round trips per week to Dutch 

Harbor with nine-seat Grumman Goose aircraft. 

Request for Proposals

As the end of the current rate terms approach, we are requesting proposals from carriers 

interested in providing service at Adak, Atka, and/or Nikolski, with or without subsidy, 

for the two-year period beginning July 1, 2012. Carriers should file their proposals by 

March 9, 2012. Staff will then docket the proposals, thereby making them public. 

Shortly afterwards, we will provide a summary of the proposals to the communities and 

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

proposals filed in a timely manner.2

 1 A Metro III is typically configured for 19 seats. PenAir removed seats to afford more cargo capacity.

 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 

2 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 typically do not proceed with the carrier-selection case. Instead, we simply 

rely on that carrier’s subsidy-free service as proposed.
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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.

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, welldocumented proposals that will facilitate their evaluation by the affected communities

and the Department. We anticipate applying our usual carrier-selection criteria and the 

general provisions governing subsidy payments for Essential Air Service.3 

At Adak, during the prior bid process two years ago, PenAir proposed service consisting 

of five one-stop round trips per week to Anchorage with 34-seat Saab 340 aircraft for 

$849,435 annual subsidy. We did not select that proposal, largely at the behest of the 

state of Alaska, which preferred Alaska Airlines’ jet proposal at that time. 

However, on February 6, 2012, the State of Alaska submitted a letter re-evaluating its 

earlier positions favoring jet service. The State still sees EAS as a lifeline for Adak, but 

is fully aware of the nationwide budgetary pressures on the program. Specifically, the 

letter states: 

“However, the time has come for all of us to consider afresh what would be the 

most cost-effective and appropriate options, which may no longer include jet 

service.”

At Atka, we selected PenAir to provide three nonstop turnaround round trips per week to 

Dutch Harbor with Metro III aircraft. Since that time, PenAir has ceased operating that 

aircraft type, and beginning in May of 2011 began providing all of its service to Atka 

with larger Saab 340 aircraft. In view of the size of the Saab 340 aircraft, two nonstop 

turnaround round trips to Atka with would be appropriate. Of course, carriers may 

propose to link Atka with nearby Adak, in which case an additional frequency at Atka 

may be appropriate. 

At Nikolski

 3 In selecting a carrier to provide subsidized Essential Air Service in Alaska, 49 U.S.C. 41733(c) (1) directs 

us to consider five 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 

, a significant level of scheduled service has been provided by Alaska Central 

Express, and we encourage that carrier to consider submitting a subsidy proposal. 

(5) experience 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. 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.
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We encourage proposals that meet the communities’ requirements in an efficient manner. 

Carriers are also welcome to propose more than one service option, if they choose; they

need not limit themselves to the current service pattern if they envision other, potentially

more attractive service possibilities with subsidy requirements that remain competitive –

different hubs, linking service to the hubs with service to other communities, or longer 

terms for the contracted service.

We encourage carriers to work with the communities in advance of the due date for 

proposals when proposals can still be adjusted so that they can craft them to best meet the 

communities’ needs. In addition, carriers should be very clear as to whether a specific 

community’s proposal may be considered on a stand-alone basis, or whether it should be 

considered as part of a larger, inseparable package with another community. Based on 

the State’s comments regarding Adak, we encourage proposals with turboprop aircraft. 

As always, we will fully consider the communities’ views before making a long-term

carrier-selection decision. 

At all three of these markets, as with most of Alaska, freight and mail volumes on the 

outbound leg from the hub to the community far exceed those volumes in the other 

direction. Proposals at all of the communities should provide sufficient capacity so that 

passengers, mail, and freight can be accommodated at a reasonable load factor on the 

critical outbound leg. 

Filing Format

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.

Historical Traffic

In order to assist carriers in making their traffic and revenue projections, we have 

included historical traffic for the communities in Appendix B. For the year ended 

October 31, 2011, in the critical outbound directions Adak generated an average of 34 

passengers per week along with 42 passenger equivalents (PEQs)4

14 PEQs of mail and freight, for a total of 19 PEQs; Nikolski generated an average of 1 

passenger per week along with 9 PEQs of mail and freight, for a total of 10 PEQs.

of mail and freight, for 

a total of 76 PEQs; Atka generated an average of 5 passengers per week along with 

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces, and nondiscrimination.5

 4 200 pounds of mail or freight is equivalent to one PEQ.

 Consequently, all carriers receiving 

Federal subsidy to support Essential Air Service 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 lobbying 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 

5 The certifications are available on the web at http://ostpxweb.dot.gov/aviation/index.html.
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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 we noted, the state says that it is open to service at Adak with non-jet aircraft, which it 

has in the past rejected. We will provide a summary of the proposals to the civic parties and 

ask them to submit their final comments shortly after March 9, the due date for carrier 

proposals.

This Order is issued under authority delegated in 49 CFR 1.56a(f) and re-delegated to the 

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. The Department requests proposals from carriers interested in providing Essential Air 

Service at Adak, Atka, and Nikolski, Alaska. Carriers should submit their proposals, with 

subsidy if necessary, by March 9, 2012. Proposals should be emailed to EAS@dot.gov, 

with the title “Proposal to Provide Essential Air Service at Adak, Atka, and /or Nikolski,

Dockets DOT-OST-2000-8556 and/or 1995-363.” Questions regarding filings may be

directed to Kevin Adams at 202-366-1047 or Kevin.Adams@dot.gov;

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

3. We will serve this Order on the service list for these Dockets.

Persons entitled to petition the Department for review of this Order under the 

Department’s Regulations, 14 CFR 385.50, must file such petitions within ten (10) 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 on the World Wide Web at

http://www.regulations.gov
Appendix A

Nonstop Great Circle Miles from Anchorage (ANC))

Adak (ADK) 1,192

Atka (AKB) 1,100

Nikolski (IKO) 905

Dutch Harbor (DUT) 791

Cold Bay (CDB) 620

Other Nonstop Great Circle Miles

ADK-AKB 107

AKB-IKO 231

IKO-DUT 116

ADK-DUT 445

AKB-DUT 339
Appendix B-1

Origin of Adak (ADK) Destination of Adak (ADK) Origin and Dest. of Adak (ADK)

Year Month Pax. Frt. Mail ∑ PEQs Pax. Frt. Mail ∑ PEQs Pax. Frt. Mail ∑ PEQs

2008 11 130 54.4 4.7 189.1 105 99.6 121.1 325.7 235 154.0 125.8 514.8

2008 12 95 14.6 4.4 114.0 90 90.7 40.7 221.4 185 105.3 45.1 335.4

2009 1 78 18.2 6.6 102.9 159 174.7 75.2 408.9 237 192.9 81.8 511.7

2009 2 79 14.6 5.8 99.4 122 327.0 110.6 559.5 201 341.6 116.3 658.9

2009 3 159 33.2 6.2 198.4 184 460.2 83.9 728.1 343 493.4 90.1 926.5

2009 4 260 3.2 6.9 270.1 135 168.4 96.3 399.7 395 171.6 103.3 669.8

2009 5 112 14.3 3.8 130.2 176 134.1 111.2 421.3 288 148.4 115.1 551.5

2009 6 135 95.5 2.9 233.4 145 125.0 92.3 362.3 280 220.5 95.2 595.7

2009 7 173 63.1 9.1 245.2 228 223.9 107.8 559.7 401 287.0 116.9 804.9

2009 8 230 82.6 5.3 317.9 200 173.4 104.5 477.9 430 256.0 109.8 795.9

2009 9 198 56.5 15.1 269.6 130 135.3 153.5 418.7 328 191.8 168.6 688.4

2009 10 228 60.4 14.0 302.4 200 232.3 48.9 481.2 428 292.8 62.9 783.6

YE 10/31/09 1,877 510.8 84.9 2,472.7 1,874 2,344.4 1,146.0 5,364.5 3,751 2,855.2 1,230.9 7,837.1

2009 11 122 26.6 8.5 157.2 104 108.0 50.6 262.6 226 134.7 59.1 419.8

2009 12 82 19.0 4.2 105.2 88 70.5 77.1 235.6 170 89.5 81.3 340.8

2010 1 151 29.0 6.3 186.3 163 156.4 96.5 415.9 314 185.4 102.8 602.2

2010 2 80 7.8 6.1 93.9 107 94.6 73.8 275.4 187 102.5 79.9 369.3

2010 3 208 2.5 6.7 217.2 163 109.7 99.9 372.6 371 112.3 106.6 589.8

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

YE 10/31/10 1,984 753.6 90.2 2,827.7 1,875 1,569.5 997.0 4,441.4 3,859 2,323.0 1,087.2 7,269.2

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

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 8 234 15.1 4.4 253.5 187 135.9 129.9 452.8 421 151.0 134.3 706.3

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

YE 10/31/11 1,775 872.6 68.9 2,716.5 1,784 1,422.7 775.8 3,982.5 3,559 2,295.3 844.7 6,699.0

Note: 200 pounds of mail or freight is one passegner equivalent (PEQ).
Appendix B-2

Origin of Atka (AKB) Destination of Atka (AKB) Origin and Dest. of Atka (AKB)

Year Month Pax. Frt. Mail ∑ PEQs Pax. Frt. Mail ∑ PEQs Pax. Frt. Mail ∑ PEQs

2008 11 32 29.0 2.9 63.9 25 35.4 48.0 108.4 57 64.4 50.9 172.4

2008 12 30 0.0 3.6 33.6 23 11.9 64.5 99.3 53 11.9 68.1 133.0

2009 1 11 0.1 2.0 13.0 13 8.0 46.6 67.6 24 8.1 48.5 80.6

2009 2 18 4.8 1.8 24.6 21 11.2 39.1 71.3 39 15.9 40.9 95.8

2009 3 18 3.2 2.0 23.2 31 10.6 29.2 70.8 49 13.8 31.1 93.9

2009 4 36 3.0 2.6 41.6 35 106.9 77.5 219.4 71 109.9 80.1 261.0

2009 5 43 1.1 4.3 48.4 49 71.6 34.0 154.6 92 72.7 38.3 203.0

2009 6 29 4.8 3.4 37.2 26 30.9 59.8 116.8 55 35.7 63.2 153.9

2009 7 57 3.5 1.9 62.4 50 60.4 54.7 165.1 107 63.9 56.6 227.4

2009 8 32 3.1 0.0 35.1 32 46.2 28.4 106.7 64 49.3 28.4 141.8

2009 9 42 19.1 2.2 63.3 42 40.6 86.2 168.8 84 59.7 88.4 232.1

2009 10 35 1.6 5.7 42.3 29 29.5 18.7 77.2 64 31.1 24.4 119.5

YE 10/31/09 383 73.2 32.3 488.5 376 463.2 586.7 1,426.0 759 536.4 619.0 1,914.4

2009 11 22 1.1 1.4 24.4 22 11.8 53.8 87.6 44 12.9 55.2 112.1

2009 12 19 1.6 1.1 21.7 18 14.6 52.1 84.7 37 16.3 53.2 106.5

2010 1 12 0.0 1.7 13.7 14 8.0 15.5 37.6 26 8.0 17.2 51.2

2010 2 33 4.5 1.5 38.9 23 9.5 57.4 89.9 56 14.0 58.9 128.9

2010 3 8 1.0 1.3 10.3 21 14.3 11.1 46.4 29 15.3 12.5 56.8

2010 4 35 0.0 2.2 37.2 35 42.9 60.4 138.3 70 42.9 62.6 175.5

2010 5 32 5.8 1.7 39.4 33 59.5 50.0 142.5 65 65.3 51.7 181.9

2010 6 12 9.4 1.9 23.3 19 15.3 28.2 62.5 31 24.7 30.1 85.8

2010 7 20 8.7 1.4 30.1 13 2.6 50.1 65.7 33 11.3 51.5 95.8

2010 8 32 9.5 3.0 44.5 32 32.1 70.6 134.7 64 41.6 73.7 179.3

2010 9 34 5.6 2.1 41.7 35 21.0 49.9 106.0 69 26.7 52.0 147.7

2010 10 34 0.0 2.6 36.6 19 44.6 52.0 115.6 53 44.6 54.6 152.2

YE 10/31/10 293 47.2 21.8 361.9 284 276.3 551.3 1,111.6 577 323.5 573.0 1,473.5

2010 11 19 0.9 1.1 21.0 15 11.0 35.2 61.2 34 11.9 36.2 82.1

2010 12 18 0.5 1.5 20.0 27 18.3 40.3 85.6 45 18.8 41.8 105.6

2011 1 16 0.0 0.3 16.3 9 18.4 21.8 49.2 25 18.4 22.2 65.6

2011 2 18 0.3 1.3 19.6 17 17.1 32.7 66.8 35 17.4 34.0 86.4

2011 3 30 0.2 0.9 31.1 32 16.8 48.5 97.3 62 17.0 49.4 128.4

2011 4 20 0.2 1.4 21.6 18 12.3 32.6 62.9 38 12.5 34.0 84.5

2011 5 30 4.5 3.1 37.6 28 15.8 16.8 60.6 58 20.3 19.9 98.2

2011 6 11 7.4 0.7 19.1 17 29.8 56.7 103.4 28 37.2 57.3 122.5

2011 7 9 0.0 0.8 9.8 11 23.2 38.3 72.6 20 23.2 39.2 82.4

2011 8 32 0.1 1.8 33.9 40 26.5 47.6 114.1 72 26.6 49.4 147.9

2011 9 23 5.4 0.9 29.2 24 24.7 66.3 115.0 47 30.0 67.2 144.2

2011 10 22 0.8 0.8 23.6 25 15.1 47.3 87.4 47 16.0 48.1 111.0

YE 10/31/11 248 20.2 14.5 282.7 263 229.0 484.1 976.1 511 249.3 498.6 1,258.8

Note: 200 pounds of mail or freight is one passegner equivalent (PEQ).
Appendix B-3

Origin of Nikolski (IKO) Destination of Nikolski (IK0) Origin and Dest. of Nikolski (IKO)

Year Month Pax. Frt. Mail ∑ PEQs Pax. Frt. Mail ∑ PEQs Pax. Frt. Mail ∑ PEQs

2008 11 21 22.1 0.7 43.8 20 17.9 20.1 58.0 41 39.9 20.8 101.8

2008 12 11 0.0 2.8 13.8 8 19.8 25.5 53.3 19 19.8 28.3 67.1

2009 1 13 0.0 1.6 14.7 15 10.2 16.5 41.6 28 10.2 18.1 56.3

2009 2 5 0.0 1.6 6.6 3 10.3 14.6 27.9 8 10.3 16.2 34.5

2009 3 12 0.9 1.6 14.5 11 15.1 32.5 58.6 23 16.0 34.2 73.1

2009 4 8 0.0 1.3 9.3 5 4.5 14.9 24.4 13 4.5 16.2 33.7

2009 5 22 1.3 4.0 27.2 40 6.8 23.5 70.4 62 8.1 27.5 97.6

2009 6 35 0.0 10.4 45.4 23 20.1 16.6 59.8 58 20.1 27.0 105.2

2009 7 21 2.7 1.6 25.3 22 5.5 9.2 36.7 43 8.1 10.8 61.9

2009 8 12 0.0 2.3 14.3 4 6.0 9.3 19.3 16 6.0 11.5 33.6

2009 9 16 0.0 4.4 20.4 22 42.6 16.3 80.9 38 42.6 20.7 101.3

2009 10 30 0.0 3.3 33.3 33 21.6 18.4 72.9 63 21.6 21.6 106.2

YE 10/31/09 206 27.0 35.5 268.5 206 180.4 217.4 603.7 412 207.3 252.8 872.2

2009 11 5 7.5 3.4 15.9 2 47.7 7.0 56.7 7 55.2 10.4 72.5

2009 12 3 0.0 3.7 6.7 4 14.3 10.5 28.8 7 14.3 14.2 35.5

2010 1 0 3.1 0.1 3.3 1 8.6 2.8 12.4 1 11.8 2.9 15.7

2010 2 7 0.3 1.4 8.7 4 23.5 14.9 42.4 11 23.8 16.2 51.1

2010 3 2 0.0 1.0 3.0 6 18.9 3.4 28.3 8 18.9 4.4 31.3

2010 4 8 0.0 0.5 8.5 9 21.7 0.1 30.8 17 21.7 0.6 39.3

2010 5 10 2.6 2.1 14.7 17 62.6 19.2 98.7 27 65.2 21.2 113.4

2010 6 8 0.0 0.5 8.5 7 0.3 3.1 10.4 15 0.3 3.6 18.9

2010 7 8 0.0 0.9 8.9 9 103.0 8.4 120.4 17 103.0 9.3 129.3

2010 8 6 0.0 0.3 6.3 5 11.2 15.0 31.2 11 11.2 15.3 37.6

2010 9 8 3.0 1.0 12.0 13 34.8 5.7 53.5 21 37.8 6.7 65.5

2010 10 12 0.0 1.1 13.1 15 7.2 6.4 28.6 27 7.2 7.4 41.7

YE 10/31/10 77 16.6 15.8 109.4 92 353.9 96.3 542.3 169 370.5 112.1 651.6

2010 11 6 2.1 0.4 8.5 5 8.6 4.1 17.7 11 10.6 4.5 26.1

2010 12 1 0.0 0.0 1.0 2 4.4 3.0 9.4 3 4.4 3.0 10.4

2011 1 4 0.0 1.3 5.3 4 27.4 6.1 37.5 8 27.4 7.4 42.8

2011 2 5 0.4 0.5 5.8 5 2.9 3.1 10.9 10 3.2 3.5 16.7

2011 3 8 3.4 0.4 11.8 5 52.1 6.9 64.0 13 55.5 7.3 75.8

2011 4 6 1.0 0.6 7.6 1 16.4 8.2 25.5 7 17.4 8.7 33.1

2011 5 7 0.0 1.0 8.0 12 7.1 4.9 24.0 19 7.1 5.9 32.0

2011 6 6 0.0 0.8 6.8 8 19.2 6.2 33.5 14 19.2 7.1 40.3

2011 7 11 0.0 0.3 11.3 8 17.5 5.0 30.5 19 17.5 5.3 41.8

2011 8 6 0.0 0.7 6.7 9 3.6 35.4 48.0 15 3.6 36.1 54.7

2011 9 3 0.0 0.0 3.0 5 27.6 4.0 36.6 8 27.6 4.0 39.6

2011 10 4 12.7 2.9 19.5 1 47.0 4.3 52.4 5 59.7 7.2 71.9

YE 10/31/11 67 19.4 8.9 95.3 65 233.7 91.1 389.8 132 253.1 100.0 485.1

Note: 200 pounds of mail or freight is one passegner equivalent (PEQ).

Note: Traffic volumes above include a significant amount of traffic carried by Alaska Central Express in 

scheduled service.
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 communities.

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 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.

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.

Funds are not currently 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 appropriated 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 funds are not made available for 

performance beyond [DATE], the carrier will receive notice in writing by the 

Department.

All claims for payment must be submitted within 60 days of the last day of service 

provided under this Order