Order: 2012-7-28

Served: July 25, 2012

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 25th day of July, 2012

Essential Air Service at

GULKANA, ALASKA

MAY CREEK, ALASKA

MCCARTHY, ALASKA

DOCKET DOT-OST-1995-492

under 49 U.S.C. § 41731 et seq.

ORDER REQUESTING PROPOSALS 

Summary

By this Order, the Department is requesting proposals from carriers interested in providing

Essential Air Service (EAS) at Gulkana, May Creek, and McCarthy, Alaska, for a new 

contract period beginning February 1, 2013, with or without subsidy. Proposals are due no 

later than August 28, 2012. (See Appendix A for a map.)

Background

By Order 2010-12-8 (December 6, 2010), the Department selected Ellis Air Taxi, Inc. 

d/b/a Copper Valley Air Service (Copper Valley), to continue providing EAS at Gulkana, 

May Creek, and McCarthy, Alaska, for the two-year period ending January 31, 2013, for a 

combined annual subsidy rate of $438,912. Gulkana currently receives two nonstop round 

trips per week to Anchorage with six-seat Piper PA-31 aircraft; May Creek and McCarthy 

both receive two nonstop or one-stop round trips per week to Gulkana using three-seat 

Cessna 185 aircraft during winter months and four-seat Cessna 206 aircraft during summer 

months. 
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Request for Proposals

As the end of the current rate term approaches, we are here requesting proposals from 

carriers interested in providing EAS at Gulkana, May Creek, and McCarthy, Alaska with or 

without subsidy, for a new contract period beginning February 1, 2013. Carriers should 

file their proposals no later than August 28, 2012. Staff will then docket the proposals, 

thereby making them public, and direct each carrier to serve a copy of its proposal on the 

civic parties and other applicants. Shortly afterwards, we will provide a summary of the 

proposals to the communities and ask them to submit their final comments. We will give 

full consideration to all proposals that are timely filed.1

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. However, negotiation and rejection are only occasional exceptions to 

the rule.

We are here providing interested carriers with some basic information to serve as guidance 

when they prepare their 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 level 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-documented proposals 

that will facilitate their evaluation by the affected communities and the Department.2

With specific respect to these communities, carriers should provide sufficient capacity to 

accommodate historical levels of traffic. For Gulkana, we are requesting proposals for two 

nonstop round trips to Anchorage each week with aircraft having a capacity of four to six 

seats. At May Creek and McCarthy, we expect proposals consisting of two round trips 

each week over a Gulkana-McCarthy-May Creek-Gulkana routing with aircraft having a 

capacity of at least three seats during the six-month winter season, and four seats during 

 1 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to

provide EAS without subsidy and we determine that service can be reliably provided without such 

compensation, we typically do not proceed with the carrier-selection case. Instead, we simply rely on that 

carrier’s subsidy-free service as proposed.

2 In selecting a carrier to provide subsidized EAS in Alaska, 49 U.S.C. § 41733(c)(1) directs us to consider 

five factors: (1) scheduled service reliability; (2) contractual and marketing arrangements with a larger carrier 

to ensure service beyond the hub; (3) interline arrangements that the applicant has made with a larger carrier 

at the hub; (4) community views, giving substantial weight to the views of the elected officials representing 

the users; and (5) the experience of the applicant in providing, in Alaska, scheduled air service. In addition, 

the Consolidated and Further Continuing Appropriations Act, 2012, Public Law 112-55, provides that when 

selecting a carrier to provide EAS, the Department may consider the relative subsidy requirements of the 

carriers, thus codifying a factor that we have considered since the inception of the program. Interested 

carriers should also be aware that our general provisions governing EAS 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.
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the six-month summer season. Such service is consistent with what the communities 

currently receive, and fully satisfies their EAS requirements.3 As always, we will formally 

solicit the communities’ views on any service options we receive before making a longterm carrier selection decision. 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.

We encourage proposals that meet these 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 (e.g. different hubs or length of contract) with subsidy requirements that 

remain competitive.

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 

www.regulations.gov, each page should be formatted to be viewed online and for easy 

printing.

Historical Traffic

In order to assist prospective applicants in making traffic and revenue forecasts, we have 

included historical traffic data for each community in Appendix B. From 2008 through

2011, Gulkana averaged 315 O&D passengers and 35,511 pounds of freight and mail per 

year; May Creek averaged 35 O&D passengers and 4,557 pounds of freight and mail; and 

McCarthy averaged 111 O&D passengers and 32,324 pounds of freight and mail.4

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing 

lobbying activities, drug-free workplaces, and nondiscrimination.5 Consequently, all 

carriers receiving Federal subsidy for EAS 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 

 3 Carriers are free to set their peak-period service at different periods based on the peak traffic demand as 

shown in Appendix B.

4 Carriers should refer to Appendix B for more detail. All three communities have varying traffic profiles

with significant peaks and directionality. 5 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 benefiting 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-free workplace (grants).
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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 contact 

the Office of Aviation Analysis at (202) 366-5903.6

Community and State Comments

The communities and the state are welcome to submit comments at any time. We 

encourage prospective applicants to contact the communities before they submit their 

proposals in order to tailor them to the communities’ needs. As noted earlier, we will 

provide a copy of the proposals to the civic parties and ask them to submit their final 

comments shortly after August 28, 2012, the deadline for filing carrier proposals.

This order is issued under authority delegated in 49 CFR Part 1.56a(f) and re-delegated to 

the Director, Office of Aviation Analysis.

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

1. We request that carriers interested in providing WAS at Gulkana, May Creek, and 

McCarthy, Alaska, submit their proposals, with or without subsidy requests, no later than 

August 28, 2012. The proposals should be e-mailed to EAS@dot.gov, with the title: 

“Proposal to Provide Essential Air Service at Gulkana, May Creek, and McCarthy, Alaska,

Docket DOT-OST-1995-492”;7

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

3. We will serve copies of this Order on the communities of Gulkana, May Creek, and 

McCarthy, Alaska, the State of Alaska Department of Transportation and the service list 

for this docket.

Persons entitled to petition the Department for review of this Order under the Department’s 

Regulations, 14 CFR Part 385.50, must file such petitions within ten (10) days after the 

date of service of this order.

This Order will be effective immediately, and the filing of a petition for review shall not 

preclude its effectiveness.

By:

TODD M. HOMAN

Director

Office of Aviation Analysis

(SEAL)

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

http://www.regulations.gov

 7 Questions regarding filings in response to this Order may be directed to A.J. Muldoon at (202) 366-1058 or 

albert.muldoon@dot.gov. 
Appendix A

 
Appendix B

Page 1 of 3

Gulkana

Origin Destination Total

Pax Freight (lbs.) Mail (lbs.) Pax Freight (lbs.) Mail (lbs.) Pax Freight (lbs.) Mail (lbs.)

2008

1Q 51 303 6,342 47 451 732 98 754 7,074

2Q 48 1,152 9,560 39 333 823 87 1,485 10,383

3Q 87 828 8,346 68 351 1,462 155 1,179 9,808

4Q 18 283 5,598 14 6 1,021 32 289 6,619

2008 Total 204 2,566 29,846 168 1,141 4,038 372 3,707 33,884

2009

1Q 30 402 4,991 30 57 729 60 459 5,720

2Q 38 653 9,993 36 26 1,099 74 679 11,092

3Q 96 6,515 6,860 90 6,551 1,944 186 13,066 8,804

4Q 23 40 4,282 19 25 760 42 65 5,042

2009 Total 187 7,610 26,126 175 6,659 4,532 362 14,269 30,658

2010

1Q 16 112 4,392 13 - 335 29 112 4,727

2Q 49 1,428 6,870 36 775 683 85 2,203 7,553

3Q 68 1,276 5,806 66 940 2,120 134 2,216 7,926

4Q 8 280 4,385 10 351 562 18 631 4,947

2010 Total 141 3,096 21,453 125 2,066 3,700 266 5,162 25,153

2011

1Q 12 330 4,421 8 110 507 20 440 4,928

2Q 22 853 4,252 26 1,073 838 48 1,926 5,090

3Q 91 727 7,421 80 110 1,163 171 837 8,584

4Q 11 375 6,233 8 370 425 19 745 6,658

2011 Total 136 2,285 22,327 122 1,663 2,933 258 3,948 25,260
Appendix B

Page 2 of 3

May Creek

Origin Destination Total

Pax Freight (lbs.) Mail (lbs.) Pax Freight (lbs.) Mail (lbs.) Pax Freight (lbs.) Mail (lbs.)

2008

1Q 1 - 161 1 - 1,324 2 - 1,485

2Q 22 - 55 21 446 4,580 43 446 4,635

3Q 3 - 21 6 - 161 9 - 182

4Q 2 - 53 2 - 795 4 - 848

2008 Total 28 - 290 30 446 6,860 58 446 7,150

2009

1Q - - 67 - 12 1,411 - 12 1,478

2Q 3 - 103 1 - 80 4 - 183

3Q 14 145 34 12 152 213 26 297 247

4Q 1 - 45 1 - 351 2 - 396

2009 Total 18 145 249 14 164 2,055 32 309 2,304

2010

1Q 1 - 43 1 - 1,754 2 - 1,797

2Q - - 50 10 - 50 10 - 100

3Q 4 - 40 3 - 116 7 - 156

4Q 3 10 54 1 10 1,189 4 20 1,243

2010 Total 8 10 187 15 10 3,109 23 20 3,296

2011

1Q 1 30 72 1 - 1,493 2 30 1,565

2Q 3 275 30 4 302 91 7 577 121

3Q 7 15 32 5 47 160 12 62 192

4Q 4 - 39 2 87 2,029 6 87 2,068

2011 Total 15 320 173 12 436 3,773 27 756 3,946
Appendix B

Page 3 of 3

McCarthy

Origin Destination Total

Pax Freight (lbs.) Mail (lbs.) Pax Freight (lbs.) Mail (lbs.) Pax Freight (lbs.) Mail (lbs.)

2008

1Q 4 300 571 3 188 5,018 7 488 5,589 

2Q 7 214 768 10 1,059 9,314 17 1,273 10,082 

3Q 30 110 1,441 33 784 8,185 63 894 9,626 

4Q 7 - 968 4 263 4,803 11 263 5,771 

2008 Total 48 624 3,748 50 2,294 27,320 98 2,918 31,068 

2009

1Q 2 10 662 3 355 3,580 5 365 4,242 

2Q 15 167 996 15 759 9,913 30 926 10,909 

3Q 45 622 1,925 36 16,201 6,629 81 16,823 8,554 

4Q 3 - 715 4 40 3,931 7 40 4,646 

2009 Total 65 799 4,298 58 17,355 24,053 123 18,154 28,351 

2010

1Q 8 - 292 7 105 2,638 15 105 2,930 

2Q 13 35 633 25 1,163 6,807 38 1,198 7,440 

3Q 28 445 2,080 28 816 5,690 56 1,261 7,770 

4Q 5 310 508 7 218 3,196 12 528 3,704 

2010 Total 54 790 3,513 67 2,302 18,331 121 3,092 21,844 

2011

1Q 3 40 435 7 268 2,928 10 308 3,363 

2Q 9 40 808 3 545 4,161 12 585 4,969 

3Q 36 - 1,131 39 655 7,261 75 655 8,392 

4Q 2 170 386 4 317 4,721 6 487 5,107 

2011 Total 50 250 2,760 53 1,785 19,071 103 2,035 21,831 
Appendix 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. 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 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.

Funds are not currently available for performance under this solicitation beyond [DATE]. The 

Department’s obligation for performance 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 the Department 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 writing 

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 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.