Order: 2013-2-13

Served: February 11, 2013

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 11th of February, 2013

Essential Air Service 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 Order, the Department is reselecting Great Lakes Aviation, Ltd. (Great Lakes) to provide 

Essential Air Service (EAS) at Alliance and Chadron, Nebraska, for a combined annual subsidy 

rate of $2,619,729, for the two-year period from June 1, 2013, through May 31, 2015.1

Background

By Order 20011-4-9 (April 7, 2011), the Department reselected Great Lakes to provide 12 

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

passenger Beech 1900D aircraft, from June 1, 2011, through May 31, 2013, for a combined

annual subsidy rate of $2,217,401.

In anticipation of the end of the current rate term, the Department issued Order 2012-12-2 on 

December 5, 2012, soliciting 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 Lakes 

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.
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between each community and Denver International Airport. Service would be provided on twinengine, 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-share 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 each 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, 2013, we requested community comments 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 

Airlines 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 activities. 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 Administration 

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 voiced 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, 

2013, through May 31, 2015. 

We shall make this selection at Alliance and Chadron 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 subject to the 

Department’s continuing fitness requirements, and no information has come to our attention that 
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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 

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

here.

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

ACCORDINGLY,

1. We select Great Lakes Aviation, Ltd., to provide Essential Air Service at Alliance and 

Chadron, Nebraska;

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

Essential Air Service at Alliance and Chadron, Nebraska, as described in Appendix C;

3. We direct Great Lakes Aviation, 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 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 Great Lakes Aviation, Ltd., continues to be fit, willing and able to operate as a 

commuter carrier and capable of providing reliable Essential Air Service at Alliance and 

Chadron, Nebraska; 

5. This docket will remain open until further Order of the Department; and

6. We will serve copies of this Order 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 Aviation, Ltd.

By:

SUSAN L. KURLAND

Assistant Secretary

for Aviation and International Affairs

(SEAL)

An electronic version of this document is available at

http://www.regulations.gov
Appendix A

AREA MAP

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

Sabre Airline Solutions®.
Appendix B
Appendix C

Great Lakes Aviation, Ltd.

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

Effective Period: June 1, 2013, through May 31, 2015.

Scheduled Service: 12 weekly roundtrips from each community to 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: $1,0711

Weekly Ceiling: $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 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 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 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 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 Department 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 arrivals and departures per week (per community) multiplied by $1,071 per flight.