Order 2011-3-22

Served: March 17, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

 

 Issued by the Department of Transportation

on the 17th of March, 2011

ORDER APPROVING CARRIER SUBSTITUTION

By Order 2010-5-18 the Department selected Mesaba Airlines, at the time a wholly

owned subsidiary of Delta Air Lines, to provide essential air service at Alpena and Sault 

Ste. Marie, Michigan, from June 10, 2010, through May 31, 2012. Since that time, 

Mesaba has become a wholly owned subsidiary of Pinnacle Airlines Corporation, along 

with Pinnacle Airlines, another wholly owned subsidiary.

By letters dated February 22 and March 11, Pinnacle Airlines Corporation requested that 

its subsidiary, Pinnacle Airlines, be allowed the flexibility to substitute its 50-seat 

regional jets for the 34-seat Saab 340 turboprops of its other subsidiary, Mesaba, at 

Alpena and Sault Ste. Marie. The rates of compensation would not change from those

specified in Order 2010-5-18. 

We have decided to approve Pinnacle’s requests. Both communities endorse the requests. 

Both carriers operate as Delta Connection, and Delta coordinates schedules for both 

carriers. The weekly compensation ceilings and subsidy rates per flight amounts remain 

the same as issued in Order 2010-5-18 and detailed in Appendix C of that order. 

Essential Air Service at

ALPENA, MICHIGAN

SAULT STE. MARIE, MICHIGAN

Under 49 U.S.C. 41731 et seq.

 Docket DOT-OST-2009-0300

 Docket DOT-OST-2009-0303
- 2 -

ACCORDINGLY,

1. We approve the change in operating carrier requested by Pinnacle Airlines 

Corporation on behalf of Mesaba and Pinnacle Airlines to meet obligations under 

Order 2010-5-18 at Alpena and Sault Ste. Marie, Michigan;

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

3. We will serve a copy of this order on the mayors and airport managers of Alpena and 

Sault Ste. Marie, and on Pinnacle Airlines Corporation.

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
Appendix A

Page 1 of 3

Subsidy Rate Agreement for the Provision of Essential Air Service by Pinnacle/Mesaba at 

Alpena, Michigan, Docket 2009-0300

______________________________________________________________________

EFFECTIVE PERIOD: June 10, 2010, thru May 31, 2012.

________________________________________________________________________

SERVICE: 13 round nonstop round trips per week between Alpena and Detroit. 

________________________________________________________________________

AIRCRAFT TYPE: Saab 340 or CRJ-200

________________________________________________________________________

TIMING OF FLIGHTS: Flights must be well-timed and well-spaced to ensure full 

compensation. 

_______________________________________________________________________

ANNUAL SUBSIDY RATE: $1,532,660

RATE PER FLIGHT: $1,1661

WEEKLY CEILING: $30,3162

 

1 Annual compensation of $1,532,660 divided by 1,315 annual flights, calculated as follows: 

26 flights per week x 52 weeks x 365/364 days x .97 completion = 1,315.

2 $1,166 times 26 flights per week.
Appendix A

Page 2 of 3

Subsidy Rate Agreement for the Provision of Essential Air Service by Pinnacle/Mesaba at 

Sault Ste. Marie, Michigan, Docket 2009-0303

______________________________________________________________________

EFFECTIVE PERIOD: June 10, 2010, thru May 31, 2012

________________________________________________________________________

SERVICE: 14 nonstop round trips per week between Sault Ste. Marie and Detroit. 

________________________________________________________________________

AIRCRAFT TYPE: Saab 340 or CRJ-200

________________________________________________________________________

TIMING OF FLIGHTS: Flights must be well-timed and well-spaced to ensure full 

compensation. 

_______________________________________________________________________

ANNUAL SUBSIDY RATE: $237,825 

RATE PER FLIGHT: $168 1

WEEKLY CEILING: $4,704 2

 

1 Annual compensation of $237,825 divided by 1,416 annual flights, calculated as follows: 

4 flights per day x 365 days x .97 completion = 1,416.

2 $168 times 28 flights per week.
Appendix A

Page 3 of 3

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 September 30, 2010. The 

Government’s obligation for performance under this solicitation beyond September 30, 2010, is contingent 

upon the availability of appropriated 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 

September 30, 2010, until funds are made available to the Department for performance. If funds are not 

made available for performance beyond September 30, 2010 , 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.

This rate assumes an annual completion factor of 97 percent. A compensation ceiling is to be applied each 

week, such that service above that ceiling in one week cannot make up for service shortfalls in another 

week.