Order: 20 1 2

- 2

- 14

Served: Febr uary 17 , 20 1 2



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 17 th day of Febr uary , 20 1 2

Docket DOT

- OST

- 1996

- 1901

FINAL ORDER TERMINATING ELIGIBILITY

AND ALLOWING SUSPENS ION OF SERVICE

Summary By this O rder, th e Department is : (1) terminating the eligibility of Alamogordo/Holloman Air Force Base, New Mexico (Alamogordo), under the E ssential

A ir S ervice (EAS) program ; and (2) allow ing Pacific Wings L.L.C., d/b/a New Mexico Airlines (New Mexico Airlines)

, to susp end service at the community , if it chooses. An area map is attached as Appendix A.

Background By Order 2011

- 12

- 8, the Department tentatively determined to terminate the eligibility of Alamogordo under the EAS program. Our tentative decision was based o n the statutory requirement that the average subsidy per passenger must be less than $1,000 during the most recent fiscal year. 1 For FY2011, New Mexico Airlines transported 809 total passengers at an annual subsidy rate of $1,169,337, or an average p er pa ssenger subsidy of $1,445

- above the $1,000 per passenger cap. While not dis posit ive

, Order 2011

- 12

- 8

also noted that the average per passenger subsidy has been over $1,000 in each of the last four fiscal years. 2

1 Public Law 112

- 27, signed into law on August 5, 2011, amended the definition of “eligible place” for the purpose of receiving EAS

. Among other things, t he amendment states that to be eligible, a community must have had an average subsidy per passenger of less than $1,000 dur ing the most recent fiscal year

. Public Law 112

- 9 5, sig ned into law February 14 , 2012, made amendments to the EAS statute, but not the $1,000 per passenger cap included in the definition of an “eligible” community.

2 See Appendix B. Essential Air Service at

ALAMOGORDO/HOLLOMAN AIR FORCE
BASE , NEW MEXICO

under 49 U.S.C. 41731 et seq.- 2

-

The Order directed all interested parties to show cause by January 6, 2012, as to why the Department should not make final its tentative finding and conclusions.

Objections The Mayor of Alamogordo and New Mexico Airlines filed comments in response to the Department’s tentative de termination . Th eir comments are summarized below. T he complete public file for EAS at Alamogordo may be accessed online through the Federal Dockets Management System (FDMS) at http://www.regulations.gov by using a keyword

or ID s earch on : DOT

- OST

- 1996

- 1901.

The Department received a letter dated December 16, 2011, from the Mayor of Alamogordo. In the letter, the Mayor sug gests that to maintain EAS at the community

that is in conformance with Public Law 112

- 27, the Department co uld modify the existing contract with New Mexico Airlines to allow for the reduction of frequency of flights (thereby reducing the carrier’s operational costs), service to a larger hub airport

with service to international destinations (resulting in increa sed passenger traffic and reducing the per passenger subsidy ), or a combination of both

. The Mayor also makes

mention of the influx of personnel and dependents associated with the German Air Force Flying Center’s recent decision to use Holloman Air Force Base as a Euro Fighter training site. Lastly, t he Mayor states that the Commander of the German Air Force Flying Center has indicated that a direct flight between the community and Phoenix Sky Harbor International Airport would be heavily utilized by thei r personnel and dependents.

On January 5, 2012, New Mexico Airlines submitted comments concurring with and supporting the Mayor of Alamogordo’s comments. The carrier confirms that reduced frequencies would result in a consolidation of passenger traffic i nto a single daily flight,

re duced operati onal costs

, and would, therefore, allow New Mexico Airlines to provide EAS at the community in conform ance with Public Law 112

- 27. The carrier also proposed to provide six weekly round trips at the community for $ 593,766, and states that it believes that by working with the community and Air Force officials, it can operate in Alamogordo at a per

- passenger subsidy requirement below the $1,000 maximum.

Decision Neither the community nor New Mexico Airlines has dispu ted our tentative determination that the community’s average subsidy per passenger for FY 2011 was $1,445

– above the $1,000 limit. As stated above, Public Law 112

- 27 amended the definition of “eligible place” to include the requirement that during the mo st recent fiscal year, a community must have had an average subsidy per passenger o f less than $1,000.

T he statute does not allow the Department to look prospectively when determining whether the community meets the eligibility requirement. Rather, the s tatute requires the Department to look back to the most recent prior fiscal year. Therefore, while the community and carrier offer suggestions t o modify the EAS contract to red uce flight s or change the service destination, and provide information on the p otential influx of passenger levels due to the German Air Force Flying Training Center’s announcement

that it will conduct training at Holloman Air Force Base, the statute does not permit the- 3

-

Department to consider information other than the average subsid y per passenger in the most recent prior fiscal year when making its decision.

Based on all of the above, effective April 1, 2012, the Department hereby finalizes its tentative finding in Order 2011

- 12

- 8, and we allow New Mexico Airlines to te rminate

serv ice o n or after that effective date

. 3 I f New Mexico Airlines does decide to suspend service at Alamogordo, the Department expects it to contact all passengers who hold

reservations for flights that will be suspended to inform them of the suspension, and t o assist them in arranging alternate transportation or to provide them with a refund of their ticket price, without penalty, if requested.

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

ACCORDINGLY,

1 . We terminate the eligibility of Alamogordo/Holloman Air Force Base, New Mexico,

u nder the Essential Air Service p rogram , effective April 1, 2012 ;

2. We will continue to pay Pacific Wings L.L.C., d/b/a New Mexico Airlines, for the provision of EAS at Alamogor do/Holloman Air Force Base, New Mexico

, as described in Appendix C of Order 2011

- 12

- 8, through March 31, 2012 ;

3 . We allow Pacific Wings L.L.C., d/b/a New Mexico Airlines, to suspend service at Alamogordo/Holloman Air Force Base, New Mexico, on or after April 1, 2012, if it

choose s;

4 . We will close this docket; and

5

. We will serve copies of this O rder on the parties listed in Appendix C.

By:

SUSAN KURLAND Assistant Secretary for Aviation

and International Affairs

(SEAL)

An electronic version of this document is availab le on the World Wide Web at : http://www.regulations.gov/

3 We take this action pursuant to 49 U.S.C. §§ 40101(a)(7), (11), and (16), an d 41731

- 42; see also 14 CFR Parts 271, 323, and 325Appendix A



### REGIONAL MAPAppendix B

Passenger Traffic and Annua l Essential Air Service Subsidy at Alamogordo/Holloman Air Force Base, New Mexico

Year

Ended Enplane d Passengers Deplaned Passengers Enplaned + Deplaned Passengers Annual

Federal Subsidy Subsidy

Per Passenger

9/30/2008 256 293 549 $948,437 $1,727.57

9/30/2009 358 360 718 $994,623 $1,385.27

9/30/2010 406 419 825 $1,125,659 $1,364.44

9/30/2011 358 451 809 $1,169,337 $1,445. 41

Source: BTS T

- 100 Market DataAppendix C

SERVICE LIST

Parker Bradley

, Alamogordo

- White Sand Regional Airport

Colonel Robert Cole, Mission Support Group Commander, Holloman AFB The Honorable Ron Grigg s, City of Alamogordo

Colo nel Kevin Huyck, Vice Wing Commander, Holloman AFB Greg Kahlstorf

, Pacific Wings LLC
Jane Lucero, New Mexico Department of Transportation Mark B. Roath, Esq.

, City of Alamogordo