Order 2012-4-10

Served: April 6, 2012

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 6th of April, 2012

Essential Air Service at

CHISHOLM/HIBBING, MINNESOTA

ESCANABA, MICHIGAN

PELLSTON, MICHIGAN

SAULT STE. MARIE, MICHIGAN

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

 DOCKET DOT-OST-2003-15796

 DOCKET DOT-OST-2003-15128

 DOCKET DOT-OST-2011-0133

 DOCKET DOT-OST-2009-0303

ORDER SELECTING CARRIER

SUMMARY

By this Order, the Department is selecting Delta Air Lines, Inc.,1 to provide essential air service 

(EAS) at Chisholm/Hibbing, Minnesota, and Escanaba, Pellston, and Sault Ste. Marie, Michigan, 

for $2,517,770, $2,833,558, $1,055,361, and $1,676,136, respectively. At Pellston, the service is 

to consist of 12 nonstop round trips per week to Detroit in the off-peak, and 14 per week in the 

peak period. At Sault Ste. Marie, the service will be 13 round trips per week year round. At the 

remaining two communities, service is to consist of 12 nonstop round trips per week year round. 

All service is to be operated with 50-seat CRJ-200 aircraft.2

BACKGROUND

On July 15, 2011, Mesaba Aviation, Inc., and Pinnacle Airlines, subsidiaries of Pinnacle Airlines 

Corporation, d/b/a Delta Connection (Delta) filed 90-day notices of their intent to suspend their 

 

1 Delta Air Lines proposed to be responsible for the provision of this service itself, rather than one of its code share 

partners. Delta indicates that it would parcel out the EAS responsibilities at separate times to one of its code share 

partners, including Pinnacle, Atlantic Southeast, SkyWest, Mesaba, or Chautauqua, depending on availability of 

aircraft and other considerations in order to afford Delta maximum flexibility to meet its obligations.

2 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.
- 2 -

joint service at the above captioned communities, effective October 13, 2011.3 By

Order 2011-9-5, September 13, 2011, we prohibited Delta from terminating service and 

requested proposals for replacement service by October 12, 2011, later extended to October 14, 

2011. In light of the volume of traffic and because it had never received subsidy-supported EAS, 

that Order required the maximum level of service guaranteed by the EAS program for Pellston, 

i.e., 14 round trips per week with 34-seat or larger equipment. At the three remaining 

communities, the Order required the level of service consistent with what we were subsidizing at 

the time Delta filed notice. 

Because Delta’s notices were triggered by Mesaba/Pinnacle’s replacing its fleet of smaller 34-seat 

Saab 340 turboprops with 50-seat regional jets, by Order 2011-12-25, December 29, 2011, we 

reduced the required frequency at all four communities to 12 round trips per week. 

CARRIER PROPOSALS

We received timely-filed proposals from Delta Airlines, Inc., Sovereign Air, Multi-Aero, Inc., d/b/a 

Air Choice One, and Intrepid, as described below. However, some of the proposals have already 

been rendered moot because of the way they were packaged and the processing of other companion 

EAS cases. Specifically, Air Choice One’s lone option (to serve Chisholm/Hibbing) was premised 

on its also being selected to provide EAS at Thief River Falls, Minnesota. By Order 2011-11-30, 

November 23, 2011, we selected Great Lakes Aviation to provide EAS at Thief River Falls, thus 

rendering moot Air Choice One’s Chisholm/Hibbing proposal.4 Similarly, Sovereign’s proposal to 

serve Escanaba was part of an inseparable EAS package with Iron Mountain, and we selected Great 

Lakes to serve Iron Mountain by Order 2011-11-30. Also, Sovereign proposed three options to 

serve Chisholm/Hibbing, and one was linked with Thief River Falls, which was awarded to Great 

Lakes as we mention above. We will now summarize the viable proposals.

Chisholm/Hibbing, Minnesota

Delta proposes nonstop service to Minneapolis (MSP) with 50-seat CRJ-200 aircraft.

Option 1: 14 round trips per week for $3,032,756 annual subsidy. 

Option 2: 12 round trips per week for $2,517,770 annual subsidy. 

Sovereign proposes nonstop service to Minneapolis (MSP) with different aircraft types.

Option 1: 24 round trips per week over an International Falls-Chisholm/Hibbing-Minneapolis routing 

with 30-seat Jetstream 41 turboprops for a combined annual subsidy of $4,174,536.

Option 2: Same as Option 1 except with 30-seat jet aircraft for a combined annual subsidy of 

$3,703,670.

 

3 Delta filed notice at a total of twenty four (24) communities. This Order addresses only these four communities. 

We have selected Great Lakes Aviation, Ltd., to replace Delta at Fort Dodge and Mason City, Iowa; Iron Mountain, 

Michigan; Brainerd and Thief River Falls, Minnesota; Devils Lake and Jamestown, North Dakota, and Watertown, 

South Dakota; American Eagle at Sioux City and Waterloo, Iowa; and SkyWest at Aberdeen, South Dakota; 

Bemidji, Minnesota; and Butte, Montana. We are processing carrier-selection proceedings at the remaining

communities. We will address the other communities in subsequent Orders. 

4 In addition, Air Choice One proposed service with single-engine aircraft and the community was not willing to 

waive its right to twin-engine aircraft (see 49 U.S.C. 41732(b)(5)).
- 3 -

Escanaba, Michigan 

Delta proposes nonstop service to Detroit (DTW) with 50-seat CRJ-200 aircraft.

Option 1: 14 round trips per week for $3,443,512 annual subsidy. 

Option 2: 12 round trips per week for $2,833,558 annual subsidy. 

Pellston, Michigan

Delta proposes nonstop service to Detroit (DTW) with 50-seat CRJ-200 aircraft.

Option 1: 14 round trips per week for $1,374,319 annual subsidy. 

Option 2: 14 and 12 round trips per week in the 26-week peak and off-peak for $1,055,322 annual subsidy. 

Option 3: 21, 14, and 12 round trips per week in 13-week peak, shoulder, and 26-week off-peak 

for $467,220 annual subsidy. 

Sault Ste. Marie, Michigan 

Delta proposes nonstop service to Detroit (DTW) with 50-seat CRJ-200 aircraft.

Option 1: 14 round trips per week for $1,978,910 annual subsidy. 

Option 2: 12 round trips per week to Detroit (DTW) for $1,373,361 annual subsidy. 

Intrepid proposes four one-stop round trips per week over Alpena to Lansing, Michigan, with 19-

seat Jetstream 32 turboprop aircraft for $911,800 annual subsidy. 

COMMUNITY COMMENTS

Chisholm/Hibbing

We received comments from the Mayors and Chambers of Commerce of Chisholm and Hibbing, 

the Chisholm/Hibbing Airport Authority, and from the Laurentian Chamber of Commerce.5 All 

supported the selection of Delta, and also of Delta’s Option 1, which would provide two 

additional round trips per week (14 vs. 12) for an additional $514,986 annual subsidy compared 

to Delta’s Option 2. The parties favored Delta because it is the incumbent with a wellestablished frequent flier program, worldwide interline connections, an upgrade in aircraft type 

from the 34-seat turboprop to a 50-seat jet, and provides local jobs at the Delta reservation center 

in Chisholm. 

The Mayor of Chisholm favored Option 1 because “More frequency is proven better for our 

customers’ scheduling needs as we demonstrated by adding the third flight.” 6 

The Mayor of Hibbing noted that over the last two years its “passengers have increased by 

approximately 30%....Specifically, providing an additional daily flight Monday-Friday enhanced 

the schedule assisting our travelers to better meet their connections, reduces layovers at 

Minneapolis and provides convenient arrival times into Hibbing. Reducing flights from 19 

weekly round trips to 14 weekly round trips will have a negative impact on the success we have 

enjoyed in our air service.” 

 

5 This chamber represents the nearby communities of Virginia, Eveleth, Mt. Iron, and Gilbert, as well as others.

6 Because there was upline service to Thief River Falls, Order 2009-8-8, August 11, 2009, selected Mesaba to 

provide 19 nonstop round trips per week with a 34-seat aircraft. If the flights had not been shared between two 

communities, we would not have authorized subsidy for 19 round trips a day.
- 4 -

Escanaba

We received comments from the Delta County Airport Board/Delta County Board of 

Commissioners (Escanaba), and from the Michigan Department of Transportation. Both 

supported the selection of Delta’s Option 1. 

Escanaba indicated that “Option 1 of two flights a day is essential to maintain a minimum 

frequency. Many of our travelers use Sundays, in particular, as a travel day....The Delta County 

Airport Board and County Board of Commissioners see Option 1 as our best chance to generate 

more airport revenue and work towards eliminating EAS dependency.” The Michigan DOT 

indicated that “14 round trips per week [is] the level necessary to provide the greatest economic 

benefit to the community.” The Michigan DOT supported Option 1 as well. 

Pellston

We received comments from the Mayor and from the Pellston Regional Air Service Task Force. 

Both recommend the selection of Delta’s Option 1.

The Mayor indicates that “A reduction in flights to one per day, at any time of the year, is not a 

viable option. One of the most obvious reasons: Even if aircraft maintenance and operations 

were 100 percent certain, we still have the weather to contend with in Pellston. In the last couple 

years, dozens of flights have been canceled here due to the weather. Fortunately, passengers 

have had the option of catching other flights once conditions improved. If there was only one 

flight a day, and it was canceled, passengers would quickly become disenchanted with flying 

from Pellston and they will seek other options – and airlines....While our busiest season has 

traditionally been in the summer months, that trend is changing. Our county is home to two of 

the Midwest’s best and most popular ski resorts, which continue to grow.” The Task Force and 

the Michigan DOT also supported Option 1 and raised concerns about the difficult weather at 

Pellston.7

Sault Ste. Marie

We received comments from the Chippewa County Board of Commissioners, the Chippewa 

County Economic Development Corporation, and from the Michigan DOT. All favored Delta’s 

Option 1. The Board of Commissioners notes that Option 1 “commits to the same high level of 

service the community currently receives from Delta Air Lines, the same being two round trips, 

7 days per week, utilizing CRJ-200 aircraft.” The Economic Development Corporation indicates 

that “Delta’s Option 1 continues current [service] levels – equipment, capacity, and frequency. 

The Michigan DOT supports Delta’s Option 1 for similar reasons as it gave for supporting 

Option 1 for Pellston.

 

7 The community asserts that without two round trips a day, seven days a week, weather cancellations on days with 

only one round trip would require passengers to wait perhaps another 24 hours, and thereby encourage them to drive 

to alternative service.
- 5 -

DECISION

First, we will not select the proposals of Sovereign Air or Intrepid. Sovereign Air has no 

operating authority from either the FAA or the Department and no immediate prospect of receiving 

any.8 Intrepid’s proposal of four round trips per week to Lansing falls short of the EAS guarantee of 

a minimum of two round trips a day, six days a week, to a medium or large hub airport.

The only viable proposals before us at these four communities are those by Delta, and the only 

issue is how many flights to subsidize on weekends. For ease of reference, we summarize 

Delta’s proposals in the chart below.9 

As background, only the biggest traffic generators in the EAS program receive service with 

regional jets, and only the biggest of those receive more than 12 round trips per week. We note 

that we require only 13 nonstop round trips per week at Meridian, Mississippi, Waterloo, Iowa;

and Sioux City, Iowa, and annual traffic at those communities for the year ended September 30, 

2011, was 33,563, 42,740, and 55,970, respectively -- each one significantly exceeding the 

historical traffic at Chisholm/Hibbing and Escanaba. A 12-round-trip-a-week service pattern 

provides 61,152 seats per year (24 flights/week x 52 weeks x 50 seats x an assumed 98% 

completion factor), and adequately accommodates current passenger levels at Chisholm/Hibbing 

and Escanaba with average load factors of 36% and 40%, respectively. As a result, we will 

select Delta’s 12-round-trip option.

Pellston generates about double the passenger levels of Chisholm/Hibbing and Escanaba but is 

very seasonal. During 2011, Pellston generated more than 8,000 passengers in each of the 

months of June and July, compared to a little more than 2,000 per month from November-April. 

Even 14 round trips per week during the summer is not sufficient to accommodate all the 

passengers, which is why carriers historically have added service in the summer months. 

However, 12 round trips a week are more than adequate to accommodate off-peak demand. For 

example, a 12 round-trip pattern would provide 4,800 seats per month (24 flights per week x 4 

weeks x 50 seats), which will still result in load factors below 50%. Therefore, we will select 

Delta’s option for 14 round trips a week for the peak six months and 12 per week in the 

remaining off-peak six months.

The community of Sault Ste. Marie argues that we should select Delta’s Option 1, which would 

provide the maximum service level the EAS program would allow. Sault Ste. Marie is a strong 

 

8 Order 2010-10-21, issued on October 27, 2010, dismissed Sovereign’s application for authority to operate 

scheduled passenger service, and Order 2011-2-3, issued on February 3, 2011, affirmed that decision after Sovereign 

petitioned for reconsideration.

9 We omit Delta’s Option 3 at Pellston, where Delta proposed only 7 round trips per week in the off-peak period. 

Because that option does not provide a minimum of 12 round trips per week, we cannot select that option.

Chisolm/Hibbing Escanaba Sault Ste. Marie Pellston 

Pax, YE 9-30-11 22,213 24,526 34,805 46,623

12/Week Subsidy Option $2,517,770 $2,833,558 $1,373,361 $1,055,322

14/Week Subsidy Option $3,032,756 $3,443,512 $1,978,910 $1,374,319
- 6 -

traffic generator, with 34,805 passengers during the year ended September 30, 2011. This level 

of traffic puts it into a higher category of traffic generators than Chisholm/Hibbing and 

Escanaba, though not the very highest. The community’s traffic is much less seasonal than 

Pellston’s, generating significantly more passengers than Pellston in the off-peak period. As a 

result, we will authorize subsidy for 13 round trips a week. While Delta submitted options for 

only 12 and 14 round trips a week, we will use the simple average of those two rates to establish 

a 13-round-trip rate. The carrier has agreed to this modification.10

CARRIER FITNESS

49 U.S.C. 41737(b) and 41738 requires that the Department find an air carrier fit, willing, and 

able to provide reliable service before the Department may subsidize it to provide EAS. Delta 

Air Lines, Inc., is subject to the Department’s continuing fitness requirements We contacted the 

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

fitness findings. The Department therefore concludes 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 Delta Air Lines, Inc., to provide essential air service at Chisholm/Hibbing, 

Minnesota, and at Escanaba, Pellston, and Sault Ste. Marie, Michigan;

2. We set the final rates of compensation for Delta Air Lines, Inc., for the provision of essential 

air service at Chisholm/Hibbing, Minnesota, and at Escanaba, Pellston, and Sault Ste. Marie, 

Michigan, as described in Appendix C;

3. We direct Delta Airlines, Inc., 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 from the service date of this Order 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 Delta Air Lines, Inc., continues to be fit, willing and able to operate as a 

certificated carrier and capable of providing reliable essential air service at the these 

communities;

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

 

10 We will not show cause this technical modification of Delta’s proposal, which came after the deadline for 

proposals. No other carrier is aggrieved by our action. Also, the only other carrier to submit a timely-filed proposal 

at Sault Ste. Marie was Intrepid, and, as discussed, its proposal is not selectable. 
- 7 -

6. We will serve copies of this Order on the Mayors and Airport Managers of 

Chisholm/Hibbing, Minnesota, and at Escanaba, Pellston, and Sault Ste. Marie, Michigan, 

Mesaba/Pinnacle Airlines, Delta Airlines, Inc., SkyWest Airlines, Inc., and Sovereign Air, MultiAero, Inc., d/b/a Air Choice One, and Intrepid. 

By:

Susan 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-1

Nonstop Great Circle Miles

to Detroit (DTW) Other Great Circle Miles

FNT, Flint, 56 Escanaba (ESC) to Marquette (MQT), 46

LAN, Lansing, 74 Pellston (PLN) to Sault Ste. Marie (CIU) 49

MBS, Saginaw, 98 Pellston (PLN) to Traverse City (TVC) 69

AZO, Kalamszoo, 113

GRR, Grand Rapids, 120

APN, Alpena, 198

TVC, Traverse City, 207

PLN, Pellston, 243

MQT, Marquette, 349

CIU, Sault Ste. Marie, 284

ESC, Escanaba, 306
Appendix A-2

Nonstop Great Circle Miles to Minneapolis (MSP)

RST, Rochester, 76

BRD, Brainerd, 114

DLH, Duluth, 144

HIB, Hibbing, 174

BJI, Bemidji, 199

FAR, Fargo, 223

INL, International Falls, 255

TVF, Thief River Falls, 261

GFK, Grand Forks, 284
Appendix B

Essential Air Service to be Provided to Chisholm/Hibbing, Escanaba, Pellston

and Sault Ste. Marie, Dockets 2003-15796, 2003-15128, 2011-0133, & 2009-0303

Chisholm/

Hibbing Escanaba Pellston 2/ Sault Ste. Marie

Hub MSP DTW DTW DTW

Weekly Trips 12 12 14/12 13

Completion 98% 98% 98% 98%

Passengers 20,149 21,352 39,602

Departures 1,227 1/ 1,227 1/ 1,329 2/ 1,329 3/

Block Hours 1,289 1,473 1,582

Passenger Revenue $1,798,097 $1,931,929 $4,284,936

Other Revenue $216,657 $232,783 $516,302

Total Revenue $2,014,754 $2,164,712 $4,801,238

Pilots $480,427 $549,060 $589,431

Fuel $1,355,806 $1,549,492 $1,663,425

Maintenance $611,613 $698,986 $750,382

Aircraft $508,530 $581,177 $623,910

Total Directs $2,956,376 $3,378,715 $3,627,147

Total indirects $1,360,313 $1,381,542 $1,950,529

Total Operating $4,316,689 $4,760,257 $5,577,676

Profit @ 5% $215,834 $238,013 $278,884

Total Economic Cost $4,532,524 $4,998,270 $5,856,560

Annual Subsidy $2,517,770 $2,833,558 $1,055,322 $1,676,136 4/

1/ Chisolm/Hibbing, and Escanaba: 

12 round trips per week x 2 directions x 52 weeks x .98 x 313/312 = 1,227.

2/ Pellston: 

Peak: 14 round trips per week x 2 directions x 26 weeks x .98 x 313/3 716

Off-Peak: 12 round trips per week x 2 directions x 26 weeks x .98 x 3 613

3/ Sault. Ste. Marie:

13 round trips per week x 2 directions x 52 weeks x .98 x 313/312 = 1,329.

4/ The average of Option 1 and Option 2 proposed by Delta.

($1,978,910 + $1,373,361) ÷ 2 = $1,676,136.
Appendix C-1

Delta Air Lines, Inc., Essential Air Service to be Provided to 

Chisholm/Hibbing, Minnesota, Docket 2003-15796

Effective Period: Start of Great Lakes’ Service at Thief River Falls, allowing Delta to terminate its service 

obligation at Thief River Falls, through the 24th month thereafter.

Scheduled Service: 12 nonstop round trips per week to Minneapolis (MSP)

Aircraft Type: CRJ-200, 50 seats

Rate per Flight: $2,0521

Weekly Ceiling: $49,2482

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 this rate, 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 contract 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 Order beyond September 30, 2012. The Government’s obligation 

for performance under this Order beyond September 30, 2012, 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, 2012, until funds are made available to the Department for performance. If funds are not 

made available for performance beyond September 30, 2012, the Department will 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.

 

1 Annual compensation of $2,517,770, divided by 1,227 annual flights, calculated as follows:

12 round trips per week x 2 directions x 52 weeks x .98 completion x 313/312 =1,227. 

2 24 flights per week x $2,052.
Appendix C-2

Delta Air Lines, Inc., Essential Air Service to be Provided to 

Escanaba, Michigan, Docket 2003-15128

Effective Period: Start of Great Lakes’ Service at Iron Mountain, allowing Delta to terminate its service 

obligation at Iron Mountain, through the 24th month thereafter.

Scheduled Service: 12 nonstop round trips per week to Detroit (DTW)

Aircraft Type: CRJ-200, 50 seats

Rate per Flight: $2,3091

Weekly Ceiling: $55,416 2

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 this rate, 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 contract 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 Order beyond September 30, 2012. The Government’s obligation 

for performance under this Order beyond September 30, 2012, 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, 2012, until funds are made available to the Department for performance. If funds are not 

made available for performance beyond September 30, 2012, the Department will 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.

 

1 Annual compensation of $2,833,558, divided by 1,227 annual flights, calculated as follows:

12 round trips per week x 2 directions x 52 weeks x .98 completion x 313/312 =1,227. 

2 24 flights per week x $2,309.
Appendix C-3

Delta Air Lines, Inc., Essential Air Service to be Provided to 

Pellston, Michigan, Docket 2011-0133

Effective Periods: October 13, 2011, through October 31, 2013

Scheduled Service: 14 nonstop round trips per week year-round to Detroit (DTW) initially, decreasing to 

12 nonstop round trips per week in the off-peak, and 14 nonstops per week in the peak on January 1, 2012

Aircraft Type: CRJ-200, 50 seats

Year Round Off-Peak Peak Off-Peak Peak

10-13-11 to 1/1/12 to 5-6-12 to 11-4-12 to 5-5-13 to

Seasonality 12-31-11 5/5/12 11-3-12 5-4-13 10-31-13

Rate per Flight: $9601 $794 2 $794 $794 $794

Weekly Ceiling: $26,8803 $19,056 4 $22,2325 $19,056 $22,232

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 this rate, 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 contract 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 Order beyond September 30, 2012. The Government’s obligation 

for performance under this Order beyond September 30, 2012, 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, 2012, until funds are made available to the Department for performance. If funds are not 

made available for performance beyond September 30, 2012, the Department will 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.

 

1 Annual compensation of $1,374,319, divided by 1,431 annual flights, calculated as follows:

14 round trips per week x 2 directions x 52 weeks x .98 completion x 313/312 =1,431. 

2 Annual compensation of $1,055,322, divided by 1,329 annual flights, calculated as follows:

Off-Peak: 12 round trips per week x 2 directions x 26 weeks x .98 completion x 313/312 = 613

 Peak: 14 round trips per week x 2 directions x 26 weeks x .98 completion x 313/312 = 716

3 28 flights per week x $960.

4 24 flights per week x $794.

5 28 flights per week x $794.
Appendix C-4

Delta Air Lines, Inc., Essential Air Service to be Provided to 

Sault Ste. Marie, Michigan, Docket 2009-0303

Effective Period: January 11, 2012, 1 through January 31, 2014.

Scheduled Service: 13 nonstop round trips per week to Detroit (DTW) 

Aircraft Type: CRJ-200, 50 seats

January 11, 2012, to Start of 13 Round

the Start of 13 Round Trips per Week Service

Trips per Week Service to January 31, 2014

Rate per Flight: $1,119 2 $1,2613

Weekly Ceiling: $26,856 4 $32,7865

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 this rate, 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 contract 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 Order beyond September 30, 2012. The Government’s obligation 

for performance under this Order beyond September 30, 2012, 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, 2012, until funds are made available to the Department for performance. If funds are not 

made available for performance beyond September 30, 2012, the Department will 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.

 

1 January 11 is 180 days after Delta filed its notice on July 15. Through January 10, Delta is compensated at the 

prior rate set by Order 2010-5-18, which was due to expire on May 31, 2012. 

2 Annual compensation of $1,373,361 divided by 1,227 annual flights, calculated as follows:

12 round trips per week x 2 directions x 52 weeks x .98 completion x 313/312 =1,227.

3 Annual compensation of $1,676,136 [($1,978,910+$1,373,361÷2)] ÷ 1,329 annual flights, calculated as follows:

13 round trips per week x 2 directions x 52 weeks x .98 completion x 313/312 =1,329. 

4 24 flights per week times $1,119.

5 26 flights per week times $1,261.