-

- Order 20 10

- 6

- 9

Served: June 8 , 20 1 0



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 8 th day of June , 2 010

ORDER PROHIBITING TERMINATION OF SERVICE

AND REQUESTING PROPOSALS

Summary By this order, the Department is (a) prohibiting Great Lakes Aviation, Ltd. ( Great Lakes ) from terminating its subsidized service at Fort Leonard Wood and Joplin, Missouri

, for 30 days beyond the end of its 90

- day notice peri od, and (b) requesting long

- term proposals from carriers interested in providing essential air service (EAS)

, with or without subsidy, by July 15 , 20 10 . (See Appendix A for a map .)

Background

Great Lakes was selected to provide EAS at Fort Leonard Wood and Joplin through two separate orders 1 u sing 19

- seat Beechcraft 1900D aircraft. Great Lakes was to provide Joplin with 18 weekly nonstop round trips to Kansas City for a two

- year period beginning when it inaugurated full EAS through the end of the 24 th mo nth thereafter , at an annual subsidy of $997,680 . Great Lakes inaugurated service at Joplin on September 8 , 2008, with two round trips and inaugurated a third round trip on September 29 , 2008

. By Order

2009

- 10

- 13, Great Lakes is providing Fort Leonard Wo od with 18 weekly nonstop round trips to Kansas City or St. Louis from November 1, 2009, through October 31, 2011 , for an annual subsidy of $1,292,906

.

1 Order 2009

- 10

- 13, October 22, 2009, for Fort Leonard Wood and Order 2008

- 7

- 8, July 3, 2008, f or Joplin Essential Air Service at

FORT LEONARD WOOD, MISSOURI JOPLIN, MISSOURI

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 1996

- 1167

DOCKET DOT

- OST

- 2006

- 2393 2- 2

-

-

- -

- On Ma y 4

, 20 1 0, Great Lakes filed a 90

- day notice with the Department of its intent to

terminate its subsidized service at Fort Leonard Wood and Joplin effective August 2,

20 10

. In its notice, Great Lakes s tates that during the past two years, it “has seen significant capacity reductions a n d a further deterioration of Kansas City International Airport as a Hub,” and “terminal facilities are not conducive to connectivity with passengers having to undergo security rescreening, not only in our existing terminal facility but also within the tran sfer of passengers between the three terminal facilities.”

Decision

Because Great Lakes’ proposed termination of service would leave Fort Leonard Wood and Joplin wi thout any scheduled air service, we must prohibit the carrier from terminating such service at the end of its 90

- say notice period and request proposals for replacement service . We will also require it to maintain service at the communit y for an

initial 30

- day period after the original 90

- day notice period consist ent with the current

contract. Furthermore, we will require Great Lakes to continue to maintain service at the

communit ies for successive 30

- day periods until we have completed processing the carrier replacement case and the new carrier has actually started service.

Request for Prop osals Carriers interested in filing proposals, with or without subsidy requests, should file them

no later than July 15 , 20 10 . At the end of that period, our staff will docket the proposals, thereby making them public, and direct each carrier to serve a c opy of its proposal on the civic parties and other applicants. Shortly afterwards, we will provide a summary of the proposals to the communi ty officials and ask them to submit their final comments. We will give full consideration to all proposals that ar e timely filed. 2

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. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and re

- solicit a new round of proposals.

We are here providing interested carriers with some basic information to serve as guidance when they prepare th eir proposals, but we will not prescribe a precise format for their proposals. We expect proposals to adequately describe the service being proposed and the annual amount of subsidy being requested. The applicants can make their own judgments as to the l evel 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

-

2 Carriers should not expect the Department to accept late filings. 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 wit h the carrier

- selection case. Instead, we simply rely on that carrier’s subsidy

- free service as proposed.- 3

-

-

- -

- documented proposal s that will facilitate their evaluation by the affected communities and the Department. 3

With respect to Fort Leonard Wood and Joplin , we expect proposals consisting of four round trips on weekdays and weekends with 15

- to 29

- seat aircraft (24 per week), three round trips on weekdays and weekends with 30 to 33

- seat aircraft (18 per week), or two daily round trips (14 per week) with 34

- seat or larger aircraft to Chicago O’Hare, Dallas/Fort Worth, Memphis or a nother suitable hub airport with airline connecti ons to the national air transportation system

. Carriers that s ubmit proposals using aircraft with

fewer than 15 seats may propose more frequencies beyond the four round trips described

above. If a proposal offering aircraft with fewer than 15 seats is su bmitted for either community discussed here and the community ultimately supports the service, in effect waiving their right to 15

- seat or larger aircraft, we would consider the waiver to apply only to the two

- year carrier

- selection at hand, i.e. we would not assume that the community waives their rights for all time.

The 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 needs of the airline interested in submitting a proposal. In addition, carriers should be very clear as to whether a specific community’s proposal is on a stand

alone basis, or whether it is part of a larger, inseparable package with other co mmunities.

We encourage proposals that meet th e se 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.

Service and Traffic History In order to assist interested carriers in developing traffic and revenue projections for the ir service proposals, we have summarized some historical origin

- destination traffic in Appendix B. For the most recent 12

- month period, ending March 31, 2010

, there w as an average of 16.1 enplaned passengers per day at Fort Leonard Wood and 12.2 per day

J oplin 4

.

3 49 U.S.C. 41733(c)(1) directs us to consider four factors in selecting a carrier to provide subsidized essential air service: (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, sta tes that when selecting a carrier to provide essential air service, the Department may consider the carriers’ relative subsidy requirements, thus codifying a factor that we have considered since the inception of the program.

Interested carriers should als o be aware that our general provisions governing essential air service 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.

4 Enplaned pas sengers per day calculated by adding enplanement and deplanement totals f rom Appendix B, then dividing by 313 (days), then dividing by 2

.- 4

-

-

- -

- 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.

Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces, and n ondiscrimination. 1 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 contac t the Office of Aviation Analysis at (202) 366

- 5903. 2

Community and State Comments

The communit ies and state are welcome to submit comments at any time. As noted above, w e encourage prospective applicants to contact the communities before they

submit th eir proposals so that they can tailor them to the communit y ’ s needs, as they will not be able to amend them after the due date. As noted earlier, we will provide a copy of the proposals to the civic parties and ask them to submit their final comments shor tly

after July 15 , the due date for carrier proposals.

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

ACCORDINGLY, 1. We prohibit Great Lakes Aviation, Ltd. from suspending service at Fort Leonard Wood and Joplin, Missouri

, at the end of its 90

- day notice period, and require it to

maintain service a s set forth in Appendix D, for an initial 30

- day period through September 2, 2010, or until a carrier c apable of providing reliable essentia l air service actually begins service, whichever is first; 3

1 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 b enefiting 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 drug

- f ree workplace (grants).

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

3 In accordance with 49 U.S.C. 41734(c), we will extend Great Lakes’ service obligation for successive

30

- day periods as necessar y until replacement service actually begins.- 5

-

2. We direct Great Lakes A viation, Ltd. to retain all books 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 documentat ion shall be retained for seven years or until the Department indicates that the records may be destroyed, whichever is earlier. Copies of 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;

3. We request that carriers interested in providing essential air service at Fort Leonard Wood and Joplin, Missouri , submit their proposals, with or without subsidy requests, no

later than July 15, 2010 . T he proposals should be via e

- mail to EAS@dot.gov , with the subject “Proposal to Provide Essential Air Service at Fort Leonard Wood (Docket DO T

OST

- 1996

- 1167) and /or Joplin, Missouri

, (D ocket DOT

- OST

- 200 6

- 2393 2 ) ; ” 4

4. Th ese docket s will remain open until f urther order of the Department; and

5. We will serve copies of this order on the mayors of Joplin, Waynesville, and S aint Robert, Missouri, personnel at Fort Leonard Wood, and the airport manager s of Joplin Regional Airport and Waynesville/St. Robert Reg ional Airport, and the parties listed in Appendix E

.

By:

SUSAN L. KURLAND Assistant Secretary for Aviation and

International Affairs

(SEAL)

An electronic version of this document is available

on the Internet at http://www.regulations.govAppendix A



## AREA MAP

This map is provided by Sabre ® AirVision TM Profit Essentials and is being used with express permission of the copyright holder,

Sabre Airline Solutions®.Appendix B Page 1 of 2

Traffic History *

Fort Leonard Wood, Missouri (TBN)

*Source

– T

- 100 Market Report, Passengers in Scheduled Passenger Service, includes traffic for Regions

Air and Great Lakes A irlines only

**Service hiatus 2Q and 3Q 2007 due to the shutdown of Regions Air, Inc.Appendix B Page 2 of 2

Traffic History*

Joplin , Missouri ( JLN)

*Source

– T

- 100 Market Report, Passengers in Scheduled Passenger Service, includes traffic for Air
Midwest, Inc. and Great Lakes A irlines onlyAppendix C

Example of 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. T he 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 ques tion. 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 tr affic 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 t ransportation 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 e nd 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 solicitation beyond [DATE] . The

Government’s obligation for perform ance 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 t he Government 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

wri ting by the Department.

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 opera te 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

.Appendix D

GREAT LAKES A VIATION, LTD

. ESSENTIAL AIR SERVICE TO BE MAINTAINED FORT LEONARD WOOD AND JOPLIN, MIS SOURI

EFFECTIVE PERIOD September 2 , 2010 , until further Department action

SERVICE 1 8 weekly nonstop round trips to Kansas City International Airport

AIRCRAFT TYPE Beech craft 1900 D (19 seats)

TIMING OF

FLIGHTS Flights must be well timed and well spaced to ensure full compensationAppendix E

DistributionAppendix D