Order: 2010-9-26

Served: September 30, 2010

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 27th day of September, 2010

ORDER REJECTING AND RESOLICITING PROPOSALS

Summary

By this order, the Department is again requesting proposals from carriers interested in 

providing essential air service (EAS) at Ironwood, Michigan/Ashland, Wisconsin

(Ironwood), and/or Manistee/Ludington, Michigan (Manistee), for a new two-year term. 

(See Appendix A for a map.) Carriers should file their proposals no later than October 18.

Background

By Order 2008-4-10, April 7, 2008, the Department selected Great Lakes Aviation, Ltd. 

(Great Lakes), to provide subsidized EAS at Ironwood and Manistee utilizing 19-seat Beech 

1900D aircraft for a new two-year term beginning when it inaugurated full service. Under 

that order, Great Lakes provides Ironwood with two daily one-stop (at Rhinelander, 

Wisconsin) round trips to Milwaukee for an annual subsidy rate of $1,492,865. Great Lakes 

also provides Manistee with two daily nonstop round trips to Milwaukee for an annual 

subsidy of $1,799,395, or a combined annual subsidy rate of $3,292,260. Great Lakes 

commenced service at the two communities on May 5, 2008, meaning that the contract was 

originally scheduled to expire on May 31, 2010.

In anticipation of the end of the rate terms and in order to attract as many applicants as 

possible, the Department issued Order 2010-2-18 on February 19 synchronizing the contract 

end dates at the two communities with two additional EAS communities in Michigan – Iron 

Mountain/Kingsford and Escanaba.

Essential Air Service at

IRONWOOD, MICHIGAN/ASHLAND, WISCONSIN

MANISTEE/LUNDINGTON, MICHIGAN

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

Docket DOT-OST-1996-1266

Docket DOT-OST-1996-1711
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On June 4, by Order 2010-6-4, the Department selected Mesaba Airlines to serve Iron 

Mountain/Kingsford and Escanaba and requested proposals from carriers interested in 

providing EAS at Ironwood and/or Manistee only, for a new two-year term.

Proposals

In response to Order 2010-6-4, Charter Air Transport, Inc. (Charter Air) and 

Sovereign Air, Inc. (Sovereign) submitted proposals.

Copies of the proposals and community comments may be accessed online through the 

Federal Docket Management System at: http://www.regulations.gov, by doing a search on 

the docket numbers listed on the first page. Each carrier’s proposal is briefly summarized 

below.

Charter Air

Charter Air submitted an inseparable two-city package (due to aircraft routing) bid for 

service to Milwaukee with 30-passenger Embraer 120 aircraft. Specifically, Charter Air 

would provide each community 12 one-stop or nonstop round trips a week for an annual 

subsidy of $3,491,513. Charter Air would operate the service as public charters under 

14 CFR Part 380 of the Department’s aviation regulations, in conjunction with Public 

Charters, Inc., a public charter operator, which would provide ticketing, reservations, and 

other customer services.

Sovereign

Sovereign’s proposal comprises two options, both with service to Chicago-O’Hare. The first 

option would utilize 8-seat King Air C90 aircraft and provide each community with 21 onestop or nonstop round trips a week for an annual subsidy of $2,551,725. The second option 

would provide each community 14 one-stop or nonstop round trips a week, utilizing 9-seat 

King Air 200 aircraft, for an annual subsidy of $2,053,759.

Community Comments

On July 7, the Department solicited the views of the civic officials of both communities, and 

the Michigan State Department of Transportation.

The Manistee County Blacker and Gogebic-Iron County Airport Boards (representing 

Ironwood/Ashland), in a unanimous vote, endorsed Charter Air. In follow-up 

correspondence, both airport managers acknowledged Charter Air’s lack of code-share and 

marketing agreements, but restated their preference for Charter Air.

The Air Service Specialist, Aviation Services Division, Bureau of Aeronautics & Freight 

Services, Michigan Department of Transportation, supported the community preferences as 

summarized above, stating “we support the selection of Charter Air Transport as we believe 

their proposal offers the highest possibility of long-term success.”

Decision

After careful consideration, we have decided to re-solicit proposals for EAS at Ironwood 

and/or Manistee by October 18.
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When Congress established the EAS program in 1978, it established certain minimum 

standards. “Basic essential air service provided under [49 U.S.C.] section 41733 of this title 

is scheduled air transportation of passengers and cargo.” 49 U.S.C. § 41732 (emphasis 

added). In order to provide scheduled air transportation under the EAS program, carriers 

must hold (1) the necessary operating authority from the Department to conduct scheduled

air transportation and (2) the necessary safety authority from the FAA that is consistent with 

the carrier’s operating authority. Scheduled operations means “any common carriage 

passenger-carrying operation for compensation or hire conducted by an air carrier...for which 

the certificate holder or its representative offers in advance the departure location, departure 

time, and arrival location. It does not include any passenger-carrying operation that is 

conducted as a public charter operator under [14 CFR] [P]art 380....”1

With respect to Sovereign, the carrier does not have the necessary operating authority from 

the Department to conduct scheduled air transportation and therefore does not meet the 

requirements of the EAS program. Sovereign currently holds exemption authority under 

Part 298 of the Department’s rules (14 CFR Part 298) to conduct on-demand charter

operations. Charter air transportation is not scheduled air transportation. 2 Further, 

Sovereign has not received any community support.

Regarding Charter Air, the carrier also fails to meet the EAS Program requirements because 

it does not hold authority from the Department and the FAA to operate 30-seat aircraft in 

scheduled operations. The company currently holds (1) economic authority from the 

Department to conduct charter air transportation and economic authority from the 

Department to conduct scheduled air transportation as a commuter air carrier pursuant to 

14 CFR Part135,3 and (2) safety authority from the FAA in the form of an air carrier 

certificate authorizing it to operate under the on-demand rules of 14 CFR Part 135.

Although Charter Air has the appropriate form of economic authority to undertake the 

operations it proposes using 30-seat Embraer Brasilia aircraft, it seeks to conduct these 

pursuant to a 14 CFR Part 380 public charter program.4 Public charter operations are not 

considered, by definition, scheduled operations.5

 1 14 CFR § 119.3.

 In addition, under 49 U.S.C § 41732, 

essential air service must be conducted as scheduled air transportation, and charter air 

transportation is not scheduled air transportation. Moreover, the Department limited Charter 

Air’s economic authority to operations conducted pursuant to 14 CFR Part 135. Under 

14 CFR Part 135, carriers can conduct on-demand operations with 30-seats or less aircraft 

2 See 14 CFR §§ 119.3, 380.2. A charter flight is defined as “a flight operated under the terms of a charter 

contract between a direct air carrier and its customer. It does not include scheduled air transportation....” 14 

CFR § 380.2.

3 See Order 2010-3-8, issued March 8, 2010, in Docket DOT-OST-2009-0187. The Department imposed 

limitations on Charter Air based on the operating plans it described in its application for economic authority. 

Those plans included the use of aircraft with passenger seating capacity ranging from 9 to 30 seats in operations 

conducted as a public charter pursuant to 14 CFR Part 380. Operations conducted as public charters are 

considered on-demand operations and not scheduled operations. See 14 CFR §§ 119.3, 380.2.

4 We note that performing the proposed operations in this manner, i.e., as a public charter, would allow Charter 

Air to continue to operate under its current form of FAA safety authority. In addition, our determination in this 

case does not impact the carrier’s ability to provide service under Part 380 in a context other than EAS.

5 See 14 CFR §§ 119.3, 380.2.
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and scheduled operations with non turbojet aircraft having no more than 9 passenger seats. 

However, Charter Air’s proposal seeks to use 30-seat Embraer Brasilia aircraft, for which it 

does not possess the requisite FAA safety authority to use in scheduled air transportation. 

In light of the above, we have determined it necessary to reject the proposals received and to 

re-solicit proposals.

We appreciate Charter Air’s and Sovereign’s interest in participating in the EAS program, 

and we note that Charter Air has at least two remedies at its disposal. If Charter Air wants to 

pursue opportunities in the EAS program, one course of action is to pursue full FAA Part 121 

authority as all other EAS providers operating 10-seat aircraft or larger have done. The 

second option is to propose service with nine-seat or smaller non-turbojet aircraft, for which 

it currently has all the requisite authority from the FAA and Department. Similarly, 

Sovereign could also pursue obtaining full scheduled operating authority.

Compensation for Interim-Period Service

During this long carrier-replacement case, we will require the incumbent carrier, Great 

Lakes, to continue providing service until replacement service begins. Great Lakes is 

eligible to be compensated for the provision of EAS at the two communities until a 

replacement carrier inaugurates full EAS operations at the communities. Thus, pursuant to 

U.S.C. 41734(d), the Department will continue to compensate Great Lakes the subsidy 

amounts set in Order 2008-4-10.

Request for Proposals

As noted above, we are re-soliciting proposals from all carriers interested in providing 

service at Ironwood/Ashland and/or Manistee/Ludington with or without subsidy, for the 

two-year period beginning when the carrier inaugurates full service. Carriers should file their 

proposals no later than October 18. Staff will then docket the proposals, thereby making 

them public, and direct each carrier to serve a copy of its proposal on the civic parties and 

other applicants. Shortly afterwards, we will provide a summary of the proposals to the 

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

all proposals that are timely filed.6

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 resolicit 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 

 6 Carriers should not expect the Department to accept late fillings. 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 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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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 communities and the Department.7

With specific respect to Ironwood/Ashland and Manistee/Ludington, the Department expects

proposals consisting of service with 19-passenger or larger aircraft and offering two round 

trips a day (12 a week) between each community and Milwaukee, Detroit, Minneapolis, or 

any other hub that provides good access to the national air transportation system. We would 

also entertain proposals with smaller aircraft, offering three round trips a day (18 a week), 

subject to the concurrence of the communities. Such service is generally consistent with 

what the communities currently receive, and fully satisfies their essential air service 

requirements.

Communities and air carriers are encouraged to work together in advance of the due date for 

proposals to craft a service pattern that is desirable to the community and meets the 

operational requirements of the airline interested in submitting a proposal. In addition, 

carriers should be very clear as to whether their proposals are for both Ironwood/Ashland and 

Manistee/Kingsford as an inseparable package, or whether they would serve either 

community individually.

We encourage proposals that meet those 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 those requirements if they envision other, potentially more attractive service 

possibilities -- different hubs, for example -- with subsidy requirements that remain 

competitive.

New 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

Historical traffic for Ironwood/Ashland and Manistee/Ludington is detailed in Appendix C. 

During the year ended December 31, 2009, Ironwood/Ashland averaged 3.1 enplanements a 

day, and Manistee/Ludington 7.5.

 7 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c) (1) directs us to consider 

four 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; and (4) community views. 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 EAS 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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Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces, and nondiscrimination.8 Consequently, all carriers receiving 

Federal subsidy for 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, 

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) 366-5903.9

Community and State Comments

The communities and State are welcome to submit comments at any time. We encourage 

prospective applicants to contact the communities before they submit their proposals so that 

they can tailor them to the communities’ 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 and ask them to submit their final comments shortly after October 18.

This order is issued under authority delegated by the Assistant Secretary for Aviation and 

International Affairs in 49 CFR 1.56a(f).

ACCORDINGLY,

1. We request that carriers interested in providing essential air service at Ironwood, 

Michigan/Ashland, Wisconsin and/or Manistee/Ludington, Michigan, submit their proposals, 

with or without subsidy requests, no later than October 18, 2010. The proposals should be emailed to: EAS@dot.gov with the title “Proposal to Provide Essential Air Service at

Ironwood, Michigan/Ashland, Wisconsin and/or Manistee/Ludington, Michigan,” with the 

docket numbers corresponding to the communities as shown on the first page of this order;10

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

 8 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; 49 CFR Part 27 -- Nondiscrimination on the basis of 

disability in programs and activities receiving or benefiting from Federal financial assistance; and 

14 CFR Part 382 -- Nondiscrimination on the basis of disability in air travel; and (3) 49 CFR Part 29 --

Government-wide debarment and suspension (non-procurement) and government-wide requirements for drugfree workplace (grants).

9 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.

10 Questions regarding filings in response to this order may be directed to Brian Swanson at (202) 366-5392 or 

brian.swanson@dot.gov.
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3. We will serve copies of this order on the parties listed in Appendix C.

By:

SUSAN L. KURLAND 

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available in the Federal Docket Management 

System (FDMS) at http://www.regulations.gov
Appendix A

AREA MAP
Appendix B

Page 1 of 2

Historical Enplanements1

Ironwood/Ashland

Year 

Ended

Total 

Scheduled 

Passengers

Annual 

Enplanements2

Average 

Enplanements 

Per Day3 

31-Dec-03 4,574 2,287 6.3

31-Dec-04 5,769 2,885 7.9

31-Dec-05 6,405 3,203 8.8

31-Dec-06 6,622 3,311 9.1

31-Dec-07 5,826 2,913 8.0

31-Dec-08 2,905 1,453 4.0

31-Dec-09 2,290 1,145 3.1

Manistee/Ludington

Year 

Ended

Total 

Scheduled 

Passengers

Annual 

Enplanements2

Average 

Enplanements 

Per Day3 

31-Dec-03 2,917 1,459 4.0

31-Dec-04 3,941 1,971 5.4

31-Dec-05 3,951 1,976 5.4

31-Dec-06 5,551 2,776 7.6

31-Dec-07 6,004 3,002 8.2

31-Dec-08 4,044 2,022 5.5

31-Dec-09 5,472 2,736 7.5

Notes:

1. Source: http://mdotwas1.mdot.state.mi.us/public/airportstats/

2. Total scheduled passengers divided by two.

3. Average annual enplanements divided by 365 service days, except for 

annual periods ended 12/31/2004 and 12/31/2008 (366 service days).
Appendix B

Page 2 of 2

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 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 Department 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.
Appendix C

SERVICE LIST

Air Sunshine, Inc. Jet Air, Daniel Wolford

Air Sunshine, Mirmohammad Adili Kenmore Air, Tim Brooks

Air West, Inc., John Raatz McCall Aviation and Salmon Air, Dan Scott

Air Wisconsin, Barbara Jones McCall Aviation, Michelle

Airline Associates, Bill Mishk Mesa Air Group, Jonathan Ornstein

Alaska Airlines, Jeff Cole Mesa Air Group, Michael Lotz

Alaska Airlines, Sandy Sinick Mesa Air Group, Mike Holcomb

Allegiant Air, Robert Ashscroft Mesaba, Max Shemesh

American Airlines, Carl Nelson Mesaba, John Spanjers

American Eagle, Jeff Hartz Midstar Airlines, Jeffrey Fonner

Atlantic Southeast, Jon Lindlief Midwest Airlines, Greg Aretakis

Atlantic Southeast, Roger Weston MN Aviation, Jose Maldonado

Bemidji Aviation, Arlen Rinkenberger Multi Aero, Darnea

Bemidji Aviation, Cori Rude Multi Aero, Shane Storz

Cape Air, Andrew Bonney Northwest, Tim McDonald

Cape Air, Dan Wolf NYDC, Henok Araya

Cape Air, J. Flaherty OST, Brian Swanson

Classic Aviation, Tony Henderson OST, Dennis DeVany

Colgan Air, Mike Colgan OST, Kevin Adams

CommutAir, Andy Price OST, Kevin Schlemmer

CommutAir, Joel Raymond OST, Michael Martin

Consultant, Robert Silverberg OST, Renee Williams

Continental, Bruce Keiner Pacific Wings, Frank Ford

Continental, Dan Weiss Pacific Wings, Greg Kahlstorf

Continental, Lorry Halloway Penn Air, Danny Seybert

Delta Air Lines Amy Martin Penn Air, Scott Bloomquist

Delta Air Lines, Jeff Morgan Pinnacle Airlines, Joe Williams

Delta Air Lines, Dan Shuman Pinnacle Airlines, Phil Reed

Delta Air Lines, Joe Esposito Public Charters, Jim Gallagher

Delta Air Lines, Sascha Vanderbellen Scenic, Mary Schneider

Delta Air Lines, Karen Zachary Scenic, Mitzi Daines

Dorado Jets Seaborne Airlines, Wayne D’Amico

Dorado Jets, Mark McKenna SeaPort Airlines. Jim Day

Era Aviation, Mike Lenorman SeaPort Airlines. Rob McKinney

Executive Airlines, Kate Soled Shuttle America, Jerry Balsano

Frontier Flying, Bob Hajducovich SkyWest, Eric Christensen

Gem Air, Dan Schroeder SkyWest, Michael Thompson

Gem Air, JoAnn Wolters Sovereign Air, Bob Karns

Great Lakes Airlines, Chuck Howell Sovereign Air, Lois R. Barton

Great Lakes Airlines, Doug Voss Tradewind, Eric Zipkin

Gulfstream, Dave Hackett Trans States, Fred Oxley

Gulfstream, Mickey Bowman Trans States, Gerry Wigmore

Gulfstream, T. Cooper United, Alicia Gabriel

Homeland Security, Bill Ragan United, James Starnes

Homeland Security, David Bernier US Airways, Benjamin Slocum

Homeland Security, Randy Webb US Airways, Howard Kass

Horizon Air, Dan Russo US Airways, Jason Reisinger

Horizon Air, Jennifer Thompson Warbelows Air Ventures, Art Warbelow

Horizon Air, Jeff Cole Wings Air (Air Greco), Aaron Goerlich

ICEPR, Luis Irizarry State of Michigan, Matt Brinker

Intrepid Internatl Air, Rick Eyk Gogebic - Iron County Airport, Duane DuRay

Island Air Charters, Linda House Manistee County Blacker Airport, Barry Lind