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BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Essential Air Service at

ALTOONA, PENNSYLVANIA

BRADFORD, PENNSYLVANIA

FRANKLIN/OIL CITY, PENNSYLVANIA

JAMESTOWN, NEW YORK

Under 49 U.S.C. § 41731 et seq.

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Docket DOT-OST-2002-11446

Docket DOT-OST-2003-14528

Docket DOT-OST-1997-2523

Docket DOT-OST-2003-14950

MOTION OF SEAPORT AIRLINES, INC.

TO REOPEN AND RESOLICIT EAS PROPOSALS

Communications with respect to this document should be addressed to:

Timothy Sieber

Executive Vice President

SeaPort Airlines, Inc.

7505 NE Airport Way

Portland, Oregon 97218

tsieber@seaportair.com

Robert E. Cohn

Patrick R. Rizzi

HOGAN LOVELLS US LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

+1 202 637 4999/5659

robert.cohn@hoganlovells.com

patrick.rizzi@hoganlovells.com

Counsel for SeaPort Airlines, Inc.

April 8, 2015
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BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Essential Air Service at

ALTOONA, PENNSYLVANIA

BRADFORD, PENNSYLVANIA

FRANKLIN/OIL CITY, PENNSYLVANIA

JAMESTOWN, NEW YORK

Under 49 U.S.C. § 41731 et seq.

)

)

)

)

)

)

)

)

)

Docket DOT-OST-2002-11446

Docket DOT-OST-2003-14528

Docket DOT-OST-1997-2523

Docket DOT-OST-2003-14950

MOTION OF SEAPORT AIRLINES, INC.

TO REOPEN AND RESOLICIT EAS PROPOSALS

Material changes have occurred to the essential air service (“EAS”) being

provided at Altoona, Bradford, Franklin/Oil City, and Jamestown, which completely

undermine and negate the Department’s selection of Sun Air Express, LLC (“Sun Air”)

to provide EAS at those communities. In light of those material changes, SeaPort

Airlines, Inc. (“SeaPort”) respectfully requests the Department of Transportation to

reopen its selection determination and resolicit EAS proposals to serve each of these

communities.

SeaPort is an experienced EAS carrier and recognizes that this Motion to reopen

the award and resolicit EAS proposals in the middle of the EAS term for these

communities is unusual. However, SeaPort is compelled to take this action in light of

significantly changed circumstances involving service by the selected EAS carrier.

Instead of providing EAS with a two-engine aircraft consistent with the proposal on

which its selection was premised, the service is now being provided with a single-engine

aircraft, and not by Sun Air, but by another carrier. These service changes, already

made at Jamestown, Bradford and Altoona and proposed at Franklin/Oil City, are so
Motion of SeaPort Airlines

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fundamentally inconsistent with Sun Air’s EAS proposal as to effectively eliminate the

very bases on which the Department made its EAS selections. To allow the selected

EAS carrier to so materially change its service – including relying on an unrelated third

party to provide a different service (single-engine aircraft) than it proposed –

undermines the credibility of DOT’s EAS selection process and establishes a dangerous

precedent for future EAS carrier-selection proceedings.

The Department has awarded several EAS routes recently to Sun Air based on

its commitment to operate twin-engine Piper Chieftain aircraft on these routes. The

twin-engine Piper Chieftain was a critical and dispositive operational attribute under the

Statute, which requires a two-engine aircraft be used unless the community waives it.

Significantly, the communities refused to waive that requirement during the EAS

selection process. As a result, the Department summarily rejected EAS proposals to

operate single-engine aircraft (e.g., Boutique Air). See DOT Order 2014-10-21, at 3;

DOT Order 2014-7-11, at 7. Other potential EAS bidders with single-engine aircraft,

such as SeaPort, simply did not submit proposals in light of the communities’ refusals to

waive the two-engine requirement. As a result, the Department was effectively

compelled to select Sun Air.

“This leaves Sun Air as the only carrier with a proposal that offers twinengine aircraft and is supported by Altoona and Jamestown.” DOT Order

2014-7-11, at 7.

“Therefore, Sun Air is the only carrier with a proposal that offers twinengine aircraft and is supported by Bradford and Franklin.” DOT Order

2014-10-21, at 3
Motion of SeaPort Airlines

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In addition, Sun Air’s bid made no mention of a proposal to utilize another airline

to provide the service. Consequently, the DOT’s awards for EAS to Altoona,

Jamestown, Bradford and Franklin/Oil City specifically identified the selected EAS

carrier as Sun Air Express, LLC d/b/a Sun Air International and further expressly

identified the aircraft to be used as an “8-seat Piper Chieftain”. See, DOT Order

2014-7-11, Appendix B, at 2, 7; and DOT Order 2014-10-21, Appendix C, at 1, 2.

After having received the EAS awards on the Altoona, Jamestown and Bradford

routes based on Sun Air’s commitment to provide service with a two-engine aircraft,

Sun Air changed its service offering in two material ways. First, the EAS service is now

being provided with a single-engine aircraft (Cessna Caravan), not the two-engine Piper

Chieftain on which its bid was selected. Second, Sun Air is not itself providing the

service. Rather, the service is being provided by another unrelated carrier (Mokulele

Airlines). See http://flysunairexpress.com. Sun Air is also planning on implementing the

same aircraft type/operating carrier switch on the Franklin/Oil City route.1

This is not simply a schedule change, nor is this a case where a mainline major

carrier is using a regional carrier partner to operate EAS with regional jet aircraft under

its brand, consistent with the EAS bid it submitted and the corresponding EAS award.

Rather, this represents a material, substantive post-award service commitment reversal

that eliminates the fundamental reasons for which Sun Air was selected: i.e., the

operation by Sun Air of twin-engine aircraft.

Moreover, it does not appear that there will be any reduction in the subsidy for

the change in aircraft type or operating carrier. A single-engine aircraft with an

1

Letter from Venango County/Venango Regional Airport to DOT EAS Division (March 19, 2015), Docket

DOT-OST-1997-2523.
Motion of SeaPort Airlines

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additional passenger seat may well have lower operating costs than the twin-engine

Piper Chieftain. For example, with respect to Franklin/Oil City, Boutique Air (with a

single-engine, 9-seat Pilatus aircraft) proposed a subsidy of $1,287,147 for 18 weekly

roundtrips, whereas Sun Air (with its twin-engine, 8-seat Chieftain) sought a higher

subsidy of $1,442,788 (for 19 weekly roundtrips). See DOT Order 2014-10-21. This is

particularly important given the budget pressures on the EAS Program as a whole and

the fact that a number of EAS communities including Bradford, Jamestown, Altoona,

and Franklin/Oil City are subject to the $200 per passenger subsidy cap.2

At its core, this post-award change in aircraft and the operating carrier is nothing

less than an EAS version of bait-and-switch. The Department should not countenance

such gamesmanship because it undercuts the fairness of the EAS proposal-andselection process. It unfairly penalizes other carriers who submit (or, as in the case of

SeaPort, would have submitted) good faith EAS proposals with single-engine aircraft.

And, it does a major disservice to the EAS communities themselves.

If the Department fails to correct this situation by reopening the selection and

resoliciting EAS proposals, the precedent would be very troubling for future EAS

proceedings. It would encourage carriers to overpromise EAS service to the

communities and the Department, as Sun Air did here, and thereby discourage costeffective and competitive EAS proposals from single-engine aircraft bidders; and to do

so with impunity because, as a result of this precedent, those same carriers would know

that, once selected, such carriers could reverse course and change to single-engine

aircraft (and use another carrier) without jeopardizing the award via a resolicitation

proceeding. To be sure, the communities would need to waive the two-engine aircraft

2

See DOT Order 2014-7-11, at 7, and DOT Order 2014-10-21, at 3-4.
Motion of SeaPort Airlines

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service requirement now and for all future EAS bids, and indeed two of the communities

faced with Sun Air’s recent aircraft type/operating carrier switch reversed their positions

post-award and waived that minimum service requirement (Jamestown, NY; Bradford,

PA)3. The EAS communities, however, should not be faced with such a post-award

take-it-or-leave-it proposition from the EAS provider that effectively forces them to waive

(now and for the future) the very statutory requirement they only recently declined to

waive during the EAS solicitation-and-award proceeding (when there were multiple

applicants). Indeed, Venango County Airport (serving Franklin/Oil City) would not waive

its right to twin-engine aircraft service recently, instead offering to temporarily waive that

right for a period of 60 days.4 And, if the EAS communities are strong-armed by the

incumbent carrier into waiving the two-engine aircraft requirement in the middle of the

EAS term, the communities should at least be allowed to re-consider and evaluate

service proposals from all eligible carriers, including single-engine aircraft operators.

At a minimum, when Sun Air informed the communities and the Department

about its desire to have another carrier operate the EAS and with single-engine aircraft

(instead of Sun Air’s twin-engine Piper Chieftain) and the EAS communities conveyed a

willingness to acquiesce and waive the two-engine aircraft requirement, the Department

should have reopened the EAS award and resolicited bids from all EAS carriers,

including single-engine aircraft operators like SeaPort. Without such a remedy, the

Department will open the EAS proposal-and-selection process to the very

gamesmanship and unfairness described above, to the substantial detriment of the

3

Letter from Chautauqua County Airports to DOT EAS Division (February 25, 2015), Docket DOT-OST-2003-

14950; Letter from Interim Airport Manager for Bradford Regional Airport to DOT EAS Division (February 2, 2015),

Docket DOT-OST-2003-14528.

4

Letter from Venango County/Venango Regional Airport to DOT EAS Division (March 19, 2015), Docket

DOT-OST-1997-2523.
Motion of SeaPort Airlines

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communities, the EAS program, and the public interest. For the Department to allow

that to happen would be arbitrary, capricious, and an abuse of discretion.

In conclusion, for the reasons set forth above, SeaPort respectfully requests that

the Department issue an order reopening the EAS awards and resoliciting EAS service

proposals for Altoona, Bradford, Jamestown, and Franklin/Oil City, making clear that

single-engine aircraft proposals are now eligible for consideration.

Respectfully submitted,

___________________________________

Robert E. Cohn

Patrick R. Rizzi

HOGAN LOVELLS US LLP

555 Thirteenth Street, NW

Washington, DC 20004

+1 202 637 4999/5659

Counsel for

SeaPort Airlines, Inc.
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CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Motion of SeaPort Airlines has

been served this 8th day of April 2015, upon each of the following:

Mayor Matt Pacifico

City of Altoona, Pennsylvania

council@altoonapa.gov

Tracy A. Plessinger, Manager

Altoona-Blair County Airport

Fax: +1 814 793 2655

Mayor Tom Riel

City of Bradford, Pennsylvania

Fax: +1 814 368 3335

cityofbradford@atlanticbb.net

Alicia O. Dankesreiter

Interim Airport Manager

Bradford Regional Airport

alicia@bradfordairport.net

Mayor Douglas A. Baker

City of Franklin, Pennsylvania

dbaker@franklinpa.gov

Mayor Barbara F. Crudo

City of Oil City, Pennsylvania

Fax: +1 814 678 3086

Otho C. Bell, Airport Manager

Venango Regional Airport

Fax: +1 814 432 2684

Mayor Samuel Teresi

City of Jamestown, New York

Fax: +1 716 483 7591

Vincent W. Horrigan, County Executive

Chautauqua County, New York

horriganv@co.chautauqua.ny.us

William Tucker

Manager of Airports and Parks

Chautauqua County, New York

Fax +1 716 487 1322

David Hackett

Chief Executive Officer

Sun Air Express, LLC

dhackett@gosunair.com

Jonathan Echmalian