Order: 20 1 3

- 2

- 13

Served: February 11 , 20 1 3



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 11 th of February , 20 1 3

Essential Air S ervice at

ALLIANCE AND CHADRON, NEBRASKA

under 49 U.S.C. § 41731 et seq. Docket DOT

- OST

- 2000

- 8322

ORDER RE

- SELECTING CARRIER

Summary By this O rder

, the Department is res electing Great Lakes Aviation, Ltd. (Great Lakes) to provide

E ssential Air S ervice (EAS) at Alliance and Chadron

, Nebraska

, for a combined annual subsidy

rate of $2, 619

, 729 , for the two

- year period from June 1, 201 3 , through May 31, 201 5

. 1

Background By Order 20011

- 4

- 9 ( April 7, 20 11) , the Department res elected Great Lakes to provide 12

nonstop or one

- stop round trips per week from Alliance and Chadron to Denver using 19

- passenger Beech 1 900D aircraft, from June 1, 2011 , through May 31, 201 3, for a combined annual subsidy rate of $ 2,217,401.

I n anticipation of the end of the current rate term, the Department issued Order 20 1 2

- 12

- 2 on December 5 , 20 1 2 , solicit ing proposals to provide EAS , with or without subsidy, at Alliance and

Chadron , for a new contract period. In response to our request, we received proposals from two carriers: Great Lakes ( the incumbent) and Sovereign Air, Inc. (Sovereign). The proposals are

summarized below. The full proposals may be accessed at www.regulations.gov by searching

for docket DOT

- OST

- 2000

- 8322.

Proposal of Great Lak es Great Lakes, the incumbent, proposed to continue operating its current level of service at Alliance and Chadron, consisting of two daily (12 per week) nonstop or one

- stop round trips

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

-

between each community and D enver International Airport . Service would be provided on twin

engine, 19

- passenger Beech 1900D aircraft. Great Lakes would provide this service for a combined annual subsidy of $2,619,729. Great Lakes notes that it offers connections with its

code

- shar e partners (United Airlines and Frontier Airlines) beyond Denver and the carrier maintains interline ticket and baggage agreements with the majority of the other carriers serving

Denver

.

Proposal of Sovereign Sovereign proposed to operate three nonstop or one

- stop round trips eac h weekday and two

nonstop or one

- stop roundtrips each weekend

- day (19 per week ) between each community and Denver. Sovereign would provide service on twin

- engine, 19

- passenger Jetstream 31/32 aircraft. Sovereign would offer this service for a combined annual subsidy of $2,265,852.

Community Comments

On January 15 , 20 1 3 , we requ ested community comment s regarding the carrier selection at
Alliance and Chadron

. On February 4, 2013, we received a letter from the Airport Manager for the City of Alliance . The letter states: “Alliance Municipal Airport requests that Great Lakes

Airlin es be awarded the bid to provide air service in Alliance. We are working very hard to

preserve and increase commercial service in Alliance and feel that Great Lakes Airlines is

the best company to assist us in reaching our goal.” The letter goes on to state that Alliance Municipal Airport and the City of Alliance appreciate Great Lakes’ willingness to work with the community to improve air service and notes Great Lakes’ participation in the local “Fly Alliance” marketing group in several other airport a ctivities. We did not receive any correspondence from Chadron.

Decision The decision in this case is straightforward. Sovereign does not currently have the requisite authority to operate the service it has proposed from either the Federal Aviation Admin istration or the Department, and it did not receive any community support. Great Lakes has served

Alliance and Chadron for many years and continues to provide reliable EAS

. Although we did not receive formal comments from Chadron, the community has not v oiced any complaints or

concerns about Great Lakes’ service. Great Lakes’ code

- share arrangements and multiple interline agreements will continue to provide the communities with seamless access to the

national air transportation system. We find that both the service and subsidy levels are

reasonable

. Therefore, we will reselect Great Lakes for a new two

- year period, from June 1,

201 3 , through May 31, 201 5.

We shall make this selection at Alliance and Chad ron contingent upon the Department’s receiving properly executed certifications from Great Lakes 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 Fitness

49 U.S.C. §§ 41737(b) and 41738 require that we find an air carrier fit, willing, and able to provide reliable service before we may subsidize it to provide EAS

. Great Lakes is sub j ect to the Department’s continuing fitness requirements, and no information has come to our attention that- 3

-

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

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

here.

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

ACCORDINGLY,

1. We select Great Lakes Aviation, Ltd. , to provide E ssential Air S ervice at Alliance and

Chadron

, Nebraska ;

2 . We set the final rate of compensation for Great Lakes Aviation, Ltd

., for the provision of

E ssential A ir S ervice at Alliance and Chadron

, Nebraska , as described in Appendix C ;

3 . We direct Great Lakes A viation, Ltd

. 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 Depar tment. 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 re tained. The carrier may forfeit its compensation for any claim that is not supported under the terms of this O rder;

4 . We find that Great Lakes Aviation, Ltd

., continue s to be fit, willing and able to operate as a

commuter carrier an d capable of providing reliable Es sential A ir S ervice at Alliance and

Chadron

, Nebraska ;

5 . Th is docket will remain open until further O rder of the Department; and

6 . We will serve copies of this O rder on the Mayor and City Manager of Chadron, Nebraska, the Mayor of Alliance, Nebraska, and the Airport Manager of Alliance Municipal Airport

, and Great

Lakes A viation , Ltd.

By:

S USAN L. KURLAND Assistant Secretary
for Aviation and International Affairs

(SEAL)

An electronic version of this document is available 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 BAppendix C

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at Alliance and Chadron, Nebraska

Effective Period : June 1, 201 3 , through May 31, 201 5

. Scheduled Service : 1 2 weekly r ound trips from each community t o Denver International Airport

. Intermediate stops and upline service : Nonstop or one

- stop service permitted, no upline

restrictions

. Aircraft : Beech 1900D

, 19 seats

. Rate per Eligible Flight: $ 1,071 1 Weekly Ceilin g : $ 51,408 ($ 25,704 per community) 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 unders tands 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 fl ights 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 car rier 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 compensatio n. 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 sys tem 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 fo r 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 i n 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 may not be available for performance under this order beyond March 27, 2013. The Government’s obligation for performance under this order beyond March 27, 2013

, is subject to the availability of 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 March 27, 2013, until funds are made available to the Department for performance. If funds are not made available for performance beyond March 27, 2013, the D epartment 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 $ 2,619,729 divided by 2 communities, divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98 percent completion)

. 2 24 arriva ls and departures per week (per community) multiplied by $ 1,071 per flight

.