### Order 20 1 1 - 3 - 22 Served: March 17, 2011 

## UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Is sued by the Department of Transportation on the 17 th 

### 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 f

or the 34
- seat Saab 340 turboprops of its other subsidiary, Mesaba, at Alpena and Sault Ste. Marie. The rate s 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 ceiling s and subsidy rate s 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 - 200 9 - 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

_____________________________________________________________ ___________ TIMI NG OF FLIGHTS: Flights must be well
- timed and well
- spaced to ensure full compensation.

_______________________________________________________________________ ANNUAL SUBSIDY RATE: $1,532,660 RATE PER FLIGHT: $1,166 1 WEEKLY CEILING: $30, 316 2

1 Annual compensation of $1,532,660 divided by 1,315 annual flights, calculated as follows: 26 flights per we ek 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

________________________________________________________________________ TIMI NG 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 under stands 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 we ather cancellations, only completed f lights 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 compensati on. 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 b e 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 w

hich 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 adjustment s in the levels of subsidy and/or service that are mutually agreed to in w

riting 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 solicitatio n beyond September 30, 2010. T he Government’s obligation for performance under this solicitation beyond September 30, 2010, is contingent upon the availability of appropriated funds from w hich payment for services can be made. No legal liability on the p art 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 c arrier 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 compe nsation ceiling is to be applied each we ek, such that service above that ceiling in one week cannot make up for service shortfalls in another we ek.