Order 20 11

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- 18

Served: J anuary 26 , 20 11



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 21s t day of J anuary , 20 11

ERRATUM

By this order, the Department is correcting the final operational and financial unit rates it will

pay to Chautauqua Airlines, Inc. d/b/a Frontier Airlines (Frontier)

, a wholly owned subsidiary of Republic Airways Holdings, Inc., to provide subsidized essential air service (EAS) at the

two above

- ca ptioned communities for the two

- year period beginning when the carrier inaugurates full EAS

. Frontier ’ s annual subsidy rate s remain unchanged; however, t he corrected operational and financial unit rates are summarized in Appendix A

.

By Order 20 11

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- 16

, J anuary 18

, 2011, the Department selected Frontier to provide

subsidized EAS at Ironwood, Michigan/Ashland, Wisconsin (Ironwood), and Manistee/Ludington, Michigan (Manistee). Service will be provided with 37

- seat Embraer

135 aircraft for a two

- year period beginning when the carrier inaugurates full EAS at both

communities through the end of the 24 th month thereafter, at a combined annual subsidy rate of $3,082,383. Order 2011

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- 16 based the payout formula on Frontier providing 12 round trips a week between each community and Milwaukee, whereas the correct number of round trips is 13 a week. Appendix A corrects the operational and financial unit rates.

ACCORDINGLY,

1. The Department correct s the final rate of compensation for Chautauqua Airlines, Inc. d/b /a

Frontier Airlines , for the provision of essential air service at Ironwoo d, Michigan/Ashland, Wisconsin and Manistee/Ludington, Michigan , as described in Appendix B of Order 20 11

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- 16 , for the two

- year period , beginning when the carrier inaugurates full EAS at the two
communities , payable as follows: for each month during which essential air service is provided, the amount of compensation shall be subject to the weekly ceiling set forth in

Essential Air Service at

IRONWOOD, MICHIGAN/ASHLAND, WISCONSIN
MANISTEE/LU DINGTON, MICHIGAN

Under 49 U.S.C. 41731 et seq

. Docket DOT

- OST

- 199 6

- 1266
Docket DOT

- OST

- 199 6

- 1711- 2

-

Appendix A , and shall be determined by multiplying the subsidy

- eli gible arrivals and departures completed during the month by $ 1,04 4.09 for Ironwood/Ashland, and $ 1,27 5

. 24 for Manistee/Ludington ;

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

3 . Docket Operations will serve copies of thi s order on the parties listed in Appendix B

.

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.

Th is 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 W ide Web at http:// www.regulations.govAppendix A Page 1 of 3

Chautauqua Airlines, Inc. d/b/a Frontier Airlines
Essential Air Service to Be Provided at Ironwood

, Michigan/Ashland, Wisconsin

Effective Period Two years beginning when Frontier inaugurates full service through the end of the 24 th month thereafter. :

Scheduled Service 1 3 one

- stop round trips to Milwaukee a week : Intermediate stops and upline

service : An i nterm ediate stop at Rhinelander or Wausau/Stevens Point, Wisconsin is permitted

.

No service to any other inte rmediate point is contemplated under the terms of the carrier’s proposal; accordingly, no such service may be provided on subsidized flights without prior Department approval. Aircraft type: Embraer 135 (3 7

- seats) or 145 (50

- seats)

. Timing of flights: Flights must be well

- timed and well

- spaced in order to ensure full compensation. Annual compensation: $ 1

, 387,589 This rate assumes an annual completion factor of 98 percent. A compensation ceiling is to be applied per

calendar week such that service above that ceiling in one week cannot make up for service shortfalls in another

week. Subsidy Rate per Flight : $ 1,044

. 09 1 Weekly Compensation Ceiling: $ 27, 146

. 34 2

1 $ 1,387,589 divided by 1,329 annual departures: 26 flights x 52 weeks x .98 (completion factor) + 1 day at 4 departures = 1,329.

2 26 flights per week multiplied by $1,044. 09 per flight.Appendix A Page 2 of 3

Chautauqua Airlines, Inc. d/b/a Frontier Airlines
Essential Air Service to Be Provided at Manistee/Ludington

, Michigan

Effective Period Two years beginning when Frontier inaugurates full service through the end of the 24 th month thereafter. :

Scheduled Service 1 3 nonstop round trips to Milwaukee a week : Intermediate stops and upline

servi ce : No service to any intermediate point is contemplated under the terms of the carrier’s proposal; accordingly, no such service may be provided on subsidized flights without prior Department approval. Aircraft type: Embraer 135 (3 7

- seats) or 145 (50

- seats)

. Timing of flights: Flights must be well

- timed and well

- spaced in order to ensure full compensation. Annual compensation: $1,694,794 This rate assumes an annual completion factor of 98 percent. A compensation ceiling is to be applied per

cale ndar week such that service above that ceiling in one week cannot make up for service shortfalls in another

week. Subsidy Rate per Flight : $ 1, 27 5

. 24 3 Weekly Compensation Ceiling: 33, 156.2 4 4

3 $ 1,694,794 divided by 1,329 annual departures: 26 flights x 52 weeks x .98 (completion factor) + 1 day at 4 departures =1,329.

4 26 flights per week multiplied by $1,275.24 per flight.Appendix A Page 3 of 3

Note:

The carrier understands that it may forfeit its compe nsation 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 ca rrier 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

transp ortation system provided to the community.

If the Department unilaterally, either partially or complete ly , 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 referenc e, 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 perfo rmance under this order beyond March 3 , 201 1

. The Department’s obligation for performance unde r this order beyond March 3, 2011 , is subject to the availability of appropriated funds from which payment for services can be made. No legal liability on the p art of the Government for any payment may arise for performance under this order beyond March 3, 2011 , until funds are made available to the Department for performance. If funds are not made available for performance beyond

March 3, 2011 , the Department w ill provide notice in writing to the carrier.

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

under this order.Appendix B

SERVICE LIST

Mr. Duane DuRay Manager Gogebic

- Iron County Airport

E5560 Airport Road

Ironwood

, Michigan 499 38

Mr. Gerald E. Edwards Assistant Administrator, Aviation Services

Division Bureau of Aeronautics & Freight Services Michigan Department of Transportation Aeronautics Building 2700 Port Lansing Road Lansing, Michigan 48906

Mr. Barry Lind

Ma nager Manistee County Blacker Airport 2323 Airport Road Manistee, Michigan 49960