Order: 2010-3-17

 Served: March 12, 2010

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 12th day of March, 2010

Essential Air Service at

SALINA, KANSAS

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

Docket DOT-OST-2002-11376

ORDER SELECTING CARRIER

Summary

By this order, the Department is selecting SeaPort Airlines (SeaPort) to provide essential air 

service (EAS) at Salina, Kansas, for a first-year annual subsidy of $1,489,435 and a second-year 

of $1,493,381 for the two-year period beginning when it inaugurates full EAS.

1

Background

By Order 2008-2-5, the Department selected Great Lakes Aviation, Ltd. (Great Lakes), to provide

the communities of Manhattan with 18 weekly nonstop round trips to either Kansas City or St. 

Louis, and Salina with 12 weekly nonstop round trips to either Kansas City or Denver, at a 

combined annual subsidy of $1,997,237, for the two-year period from April 1, 2008, through 

March 31, 2010. 

 

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of 

appropriated funds.
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In August 2009, American Eagle inaugurated twice-daily 50-seat regional jet service from 

Dallas/Fort Worth to Manhattan on a subsidy-free basis. Since that level of service fully meets 

Manhattan’s EAS requirements, we issued Order 2009-11-25 requesting proposals from carriers 

interested in serving only Salina for a new, two-year term. In response, we received proposals 

from Great Lakes, SeaPort, Sovereign Air and TransportAzumah.

Proposal of Great Lakes

Great Lakes, the incumbent carrier, proposed one service option to provide Salina with two 

nonstop round trips each weekday and each weekend (12 a week) to Kansas City or Denver with 

19-seat Beechcraft 1900D aircraft for an annual subsidy of $1,517,138.

Proposal of SeaPort 

SeaPort proposed one service option to provide Salina with three nonstop round trips each 

weekday and weekend (18 a week) to Kansas City with 9-seat Pilatus PC-12 aircraft for a firstyear annual subsidy of $1,489,435 and a second year of $1,493,381.

Proposal of Sovereign Air

Sovereign Air has proposed two service options, both of which would use 9-seat Beechcraft 350 

aircraft. Option 1 would offer five daily (35 a week) nonstop round trips to Kansas City for an 

annual subsidy of $899,995. Option 2 would offer four daily (28 a week) nonstop round trips to 

Kansas City for an annual subsidy of $840,028.

Proposal of TransportAzumah

TransportAzumah proposed to act as a Part 380 Indirect Air Carrier and to hire Charter Air 

Transport, a certificated air carrier, to actually operate the service. TransportAzumah has 

proposed two service options, both using 30-seat Embraer EMB 120 aircraft. Option 1 would 

offer 12 weekly Salina to Kansas City round trips for an annual subsidy of $2,806,156. Option 2

would offer 18 weekly Salina to Kansas City round trips for an annual subsidy of $3,868,860.

Each carrier’s complete proposal may be accessed online at http://www.regulations.gov/

by entering “DOT-OST-2002-11376.”

Community Comments

On January 12, 2010, we requested community comments regarding the carrier selection at 

Salina. In a letter dated February 17, 2010, Luci Larson, Mayor of Salina, states that “it is the 

opinion of local political and civic leaders that the SeaPort Airlines proposal will best meet 

Salina’s scheduled air service needs.” Mayor Larson elaborates by saying that their decision to 

choose SeaPort was influenced by the carrier’s greater frequency of flights, “right-sized” aircraft, 

and a fare structure that will encourage local travelers to use the service.

Decision

After carefully reviewing each carrier’s proposal and taking into account community feedback, 

we have decided to select SeaPort’s proposal of three Salina-Kansas City nonstop round trips a 

day (18 a week) for a first-year annual subsidy of $1,489,435 and a second-year of $1,493,381. 
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We find that the service and subsidy levels are reasonable, and will meet the community’s EAS 

needs. 

Regarding the proposals of Sovereign and TransportAzumah, neither carrier has the requisite 

operating authority from either the Federal Aviation Administration or the Department of 

Transportation to operate its proposed service. Moreover, there was no community support for 

either of the carrier’s proposals, and in the case of TransportAzumah, the requested subsidy was 

far greater than the other bids. As between Great Lakes and SeaPort, SeaPort’s bid was less 

expensive than Great Lakes and received strong community support, therefore pointing to the 

selection of SeaPort.

We shall make this selection of SeaPort contingent upon the Department’s receiving properly 

executed certifications from SeaPort that it is in compliance with the Department’s regulations 

regarding drug-free workplaces and nondiscrimination, as well as the regulations concerning 

lobbying activities.

Carrier Transition

We expect Great Lakes and SeaPort to coordinate a smooth transition in service at Salina, 

including setting a date to switch services from Great Lakes to SeaPort. We expect Great Lakes 

to contact all passengers holding reservations for travel after that date, to notify them of the 

suspension of service, and to secure alternate air transportation for such passengers or to provide 

a full refund of the ticket price, without penalty, if requested. In this regard, Great Lakes’ current 

contract expires on March 31. In the event at SeaPort has not inaugurated service by then, we 

will compensate Great Lakes at the subsidy rates contained in its proposal for Salina from April 

1, 2010, until SeaPort begins full EAS at Salina.

Carrier Fitness

49 U.S.C. 41737(b) requires that we find an air carrier fit, willing, and able to provide reliable 

service before we may subsidize it to provide essential air service. SeaPort is subject to the 

Department’s continuing fitness requirements, and no information has come to our attention that 

would cause us to question the carrier's fitness at this time. We have contacted the Federal 

Aviation Administration, and it has raised no concerns that would negatively affect our fitness 

finding. We therefore conclude that the carrier remains fit to conduct the operations proposed 

here.

This order is issued under authority delegated in 49 CFR 1.56a(f).

ACCORDINGLY,

1. We select SeaPort Airlines, to provide essential air service at Salina, Kansas;

2. We set the final rate of compensation for SeaPort Airlines, for the provision of essential air 

service at Salina, Kansas, as described in Appendix C;
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3. We direct SeaPort Airlines to retain all books, records, and other source and summary 

documentation to support claims for payment, and to preserve and maintain such documentation 

in a manner that readily permits its audit and examination by representatives of the Department. 

Such documentation shall be retained for seven years or until the Department indicates that the 

records may be destroyed, whichever comes first. Copies of flight logs for aircraft sold or 

disposed of must be retained. The carrier may forfeit its compensation for any claim that is not 

supported under the terms of this order;

4. We find that SeaPort Airlines, continues to be fit, willing and able to operate as a commuter

carrier and capable of providing reliable essential air service at Salina, Kansas;

5. This docket will remain open until further order of the Department; and

6. We will serve copies of this order on the Mayors and Airport Managers of Salina, Kansas and

SeaPort Airlines.

By:

SUSAN L. KURLAND

Assistant Secretary

for Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
Appendix A

AREA MAP
Appendix B

 Page 1 of 2

 
Appendix B

Page 2 of 2
Appendix C

 Page 1 of 2

 

SeaPort Airlines

Essential Air Service to be Provided at Salina, Kansas

Effective Period: One year from date the carrier inaugurates full EAS.

Scheduled Service: 18 weekly nonstop round trips from Salina to Kansas City

Aircraft: Pilatus PC-12 aircraft 9-seat aircraft

Rate per Eligible Flight: $8161

Weekly Ceiling: $29,3762

Note: 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 are not currently available for performance under this order beyond September 30, 2010. The Department’s 

obligation for performance under this order beyond September 30, 2010, is subject to 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 September 30, 2010, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 30, 2010, 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 must be submitted within 60 days of the last day of service provided under this order.

 

1 Annual compensation of $1,489,435 divided by 1825 annual departures (36 weekly departures x 52 weeks x 97.5 

percent completion).

2 36 arrivals and departures per week (per community) multiplied by $816 per flight.
 Appendix C

 Page 2 of 2

SeaPort Airlines

Essential Air Service to be Provided at Salina, Kansas

Effective Period: April 1, 2011, through March 31, 2012.

Scheduled Service: 18 weekly nonstop round trips from Salina to Kansas City

Aircraft: Pilatus PC-12 aircraft 9-seat aircraft

Rate per Eligible Flight: $8181

Weekly Ceiling: $29,4482

Note: 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 are not currently available for performance under this order beyond September 30, 2010. The Department’s 

obligation for performance under this order beyond September 30, 2010, is subject to 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 September 30, 2010, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 30, 2010, 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 must be submitted within 60 days of the last day of service provided under this order.

 

1 Annual compensation of $1,493,381 divided by 1825 annual departures (36 weekly departures x 52 weeks x 97.5 

percent completion).

2 36 arrivals and departures per week (per community) multiplied by $818 per flight.