Order 2013

- 10

- 2 Served: October 1, 2013



### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on the 1 st of October, 2013

Essential Air Service at ABERDEEN, SOUTH DA KOTA, and BEMIDJI, MINNESOTA
Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 20 11

- 013 7 DOCKET DOT

- OST

- 2011

- 0134

ORDER REQUESTING PROPOSALS
Summary By this Order , the Department is requesting proposals by October 2 4 , 2013 , from carriers interested in providing Essential Air Service (EAS) at Aberdeen, South Dakota, and /or Bemidji, Minnesota, for the period beginning March 1, 2014, for two or more years , with or without subsidy.
Background By Order 2012

- 1

- 23, January 26, 2012, the Department selected SkyWest Airlines (SkyWest), to provide 14 nonstop round trips per week each between Aberdeen and Bemidji and Minneapolis

- St. Paul International Airport (MSP) , through February 28, 2014. 1 All of SkyWest’s service is provided with 50

- seat regional jet airc raft and the annual subsidy is set at $ 1,198,222 at Aberdeen and $1,338,293 at Bemidji

. Request for Proposals As the end of the current rate term s approach, we are requesting proposals from carriers int erested in providing service at Aberdeen and /or Bem idji , with or without subsidy, for the period beginning March 1, 2014 . Carriers should file their proposals by October 2 4 , 2013

. S taff will then docket the proposals, thereby making them public. Shortly afterwards, we will provide copies of all timely f iled proposals to the communit ies and request community comments by a specified date . We will give full consideration to all proposals filed in a timely manner. 2 Interested carriers should prepare their proposals with every expectation that their initial proposals will also be their final and only

1 Order 2012

- 1

- 23 also selected SkyWest at Butte, Montana. However, we separately requested proposals for service at Butte by Order 2013

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- 1. 2 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide E AS without subsidy and we determine that basic EAS , required by 49 U.S.C. § 41732 , 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

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proposals. 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 , if necessary, solicit a new round of proposals. However, we anticipate that negotiation or rejection will remain 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 leve l of detail they wish to present; however, we recommend that they include information concerning proposed schedules and projected block hours. In addition, applicants are urged to provide financial data supporting their subsidy requests, including informa tion on their projected expenses and revenues. We strongly encourage clear, well

- documented proposals that will facilitate their evaluation by the communit ies and the Department. We anticipate applying our usual carrier

- selection criteria and the general provisions governing subsidy payments for EAS

. 3
As always, we will formally solicit each community ’ s views on any service options we receive before making a long

- term , carrier

- selection decision. The communit ies and air carrier s are encouraged to work together in advance of the due date for proposals to craft service pattern s that are both desirable to the communit ies and meet the operational needs of the airlines, as carriers cannot amend their proposal s after the due date.
We encourage proposals th at meet the communit ies’ requirements in an efficient manner. Bemidji and Aberdeen are strong traffic generat ing communities and so we will request the maximum service level at each community

– 67 seats per day in both directions and a minimum of two roun d trips per day. 4 Carriers are also welcome to propose more than one service option, if they choose; they need not limit themselves to a single specific service pattern if they envision other, potentially more attractive service possibilities

– different hubs, or longer terms for the contracted service

– with subsidy requirements that remain competitive.
Filing Format Carrier proposals should be submitted to the Department with all materials merged into a single document. In addition, because the documen t will be published on Regulations.gov, each page should be formatted to be viewed online.

3 In selecting a car rier to provide subsidized EAS for an eligible place not in Alaska, 49 U.S.C. § 41733(c) (1) directs us to consider five factors: (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub; (3) interline arrangemen ts with a larger carrier at the hub; (4) communit y views; and (5) whether the carrier has included a plan in its proposal to market the service. In addition , The Consolidated and Further Continuing Appropriations Act, 2012, Public Law No. 112

- 55, and conti nued by the Full

- Year Continuing Appropriations Act, 2013, Public Law No. 113

- 6, provides that when selecting a carrier to provide EAS, the Department may consider the relative subsidy requirements, 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 thos e general provisions. 4 This works out to two round trips per day with regional jets, three round trips per day with 30

- seat aircraft, and four round trips per day with 19

- seat aircraft.- 3

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Historical Traffic In o rder to assist carriers in making traffic and revenue projections, we have included historical traffic for the communit ies in Appendi x B for the most recent annual periods.
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 to support 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 documents, the selected carrier will be required to submit them in o rder to receive subsid y. Interested carriers requiring more detailed information regarding these requirements, as well as copies of the certifications, should contact the Office of Aviation Analysis at (202) 366

- 5903 . The Department is prohibited from paying subsidy to carrie rs that do not submit these documents.
Community Comments Civic officials and the State s are welcome to submit comments on the proposals at any time. As noted earlier, we will provide a summary of the proposals to the civic parties and ask them to submit their final comments shortly after October 2 4 , 2013, the due date for carrier proposals.

This Order is issued under authority delegated in 49 CFR Part 1. 25a(b) and re

- delegated to the Directo r, Office of Aviation Analysis.
ACCORDINGLY,

1

. The Departmen t requests proposals from carriers interested in providing EAS at Aberdeen, South Dakota, and /or Bemidji, Minnesota . Carriers should submit proposals, with subsidy if necessary, by October 2 4 , 2013 . Proposals should be emailed to EAS@dot.gov, with the ti tle “Proposal (s) to Provide EAS at Aberdeen, South Dakota, and/or Bemidji, Minnesota ” 6 ;

2

. Th ese D ocket s will remain open until further Order of the Department; and

3 . We will serve this Order on the s ervice l ist for th ese Docket s

.
Persons entitled to petition the Department for review of this Order under the Department’s Regulations, 14 CFR Part 385. 31 , must file such petitions within seven ( 7 ) days after the date of service of this Order

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5 The certifications are available on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

- rural

- air

- service/essential

- air

- service

. 6 Questions regarding filings may be directed to Kevin Adams a t 202

- 366

- 1047 or Kevin.Adams@dot.gov- 4

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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 at http://www.regulations.govAppendix A

Nonstop Great Circle Miles to Minneapolis (MSP ) RST, Rochester 76 BRD, Bra inerd 114 HIB, Hibbing, 174 FSD, Sioux Falls, 196 BJI, Bemidji 199 FAR, Fargo 223 ABR, Aberdeen 257 PIR, Pierre 350
Nonstop Miles to Bemidji (BJI) FAR, Fargo 97 BRD, Brainerd 85 HIB, Hibbing 99

Nonstop Miles to Aberdeen (ABR) FAR, Fargo 128 PIR , Pierre 117 FSD, Sioux Falls 153Appendix B-1

Historical Scheduled Passengers at Aberdeen (ABR), T-100 Market Report

Origin Dest O&D 2010 8 1,693 1,856 3,549 2010 9 1,586 1,576 3,162 2010 10 2,095 2,178 4,273 2010 11 2,218 2,035 4,253 2010 12 2,016 1,858 3,874 2011 1 1,706 1,695 3,401 2011 2 1,631 1,587 3,218 2011 3 1,927 2,081 4,008 2011 4 1,567 1,617 3,184 2011 5 2,034 1,943 3,977 2011 6 2,001 2,193 4,194 2011 7 2,414 2,258 4,672 YE July 31, 2011 22,888 22,877 45,765

2011 8 1,923 2,020 3,943 2011 9 1,871 1,828 3,699 2011 10 2,729 2,823 5,552 2011 11 2,424 2,311 4,735 2011 12 2,253 2,077 4,330 2012 1 2,001 1,948 3,949 2012 2 1,899 1,828 3,727 2012 3 1,797 1,901 3,698 2012 4 1,680 1,815 3,495 2012 5 2,052 1,825 3,877 2012 6 1,797 1,965 3,762 2012 7 1,998 1,825 3,823 YE July 31, 2012 24,424 24,166 48,590

2012 8 1,952 2,134 4,086 2012 9 1,971 1,943 3,914 2012 10 2,564 2,617 5,181 2012 11 2,582 2,373 4,955 2012 12 2,470 2,140 4,610 2013 1 2,037 2,000 4,037 2013 2 1,841 1,650 3,491 2013 3 1,941 2,162 4,103 2013 4 1,644 1,688 3,332 2013 5 2,126 1,908 4,034 2013 6 2,056 2,193 4,249 2013 7 2,120 2,028 4,148 YE July 31, 2013 25,304 24,836 50,140Appendix B-2

Historical Scheduled Passengers at Bemidji (BJI), T-100 Market Report

Origin Dest O&D 2010 8 2,813 2,507 5,320 2010 9 1,777 1,674 3,451 2010 10 1,707 1,669 3,376 2010 11 1,641 1,568 3,209 2010 12 1,674 1,670 3,344 2011 1 1,595 1,529 3,124 2011 2 1,564 1,454 3,018 2011 3 1,760 1,759 3,519 2011 4 1,573 1,750 3,323 2011 5 1,747 1,768 3,515 2011 6 2,130 2,387 4,517 2011 7 2,672 2,730 5,402 YE July 31, 2011 22,653 22,465 45,118

2011 8 2,788 2,504 5,292 2011 9 2,003 1,890 3,893 2011 10 1,974 1,770 3,744 2011 11 1,740 1,691 3,431 2011 12 1,923 1,940 3,863 2012 1 1,740 1,628 3,368 2012 2 1,647 1,539 3,186 2012 3 1,630 1,612 3,242 2012 4 1,450 1,514 2,964 2012 5 1,583 1,678 3,261 2012 6 1,905 2,127 4,032 2012 7 2,406 2,497 4,903 YE July 31, 2012 22,789 22,390 45,179

2012 8 2,423 2,213 4,636 2012 9 1,825 1,681 3,506 2012 10 1,843 1,754 3,597 2012 11 1,616 1,480 3,096 2012 12 1,751 1,745 3,496 2013 1 1,597 1,458 3,055 2013 2 1,795 1,580 3,375 2013 3 1,599 1,643 3,242 2013 4 1,475 1,499 2,974 2013 5 1,600 1,753 3,353 2013 6 1,940 2,149 4,089 2013 7 2,719 2,724 5,443 YE July 31, 2013 22,183 21,679 43,862App endix 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 a nd 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 destina tion 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 carr ier 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 dur ing the applicable period of th is rate , 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 i n writing by the Department and carrier do not constitute a total or partial reduction or cessation of payment.
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.

Funds may not be available for performance under this Order beyond [DATE]. The Government’s obligation for performance unde r this Order beyond [DATE], 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 [DATE], until funds are mad e available to the Department for performance. If funds are not made available for performance beyond [DATE], the Department will provide notice in writing to the carrier.
All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which compensation is being claimed. For example, claims for service provided in July must be filed by October 31; August claims must be submitted by November 30, and so on.