Order: 2011-3-4

Served: March 1, 2011

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 1

st day of March, 2011

Essential Air Service at

KINGMAN, ARIZONA

PAGE, ARIZONA

PRESCOTT, ARIZONA

SHOW LOW, ARIZONA

DOCKET DOT-OST-1996-1899

DOCKET DOT-OST-1997-2694

DOCKET DOT-OST-1996-1899

DOCKET DOT-OST-1998-4409

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

ORDER RE-SELECTING CARRIER

Summary

By this order, the Department is re-selecting Great Lakes Aviation, Ltd. (Great Lakes) to 

provide essential air service (EAS) at Kingman, Page, Prescott, and Show Low, Arizona 

for the two-year period from May 1, 2011, to April 30, 2013, for a combined annual 

subsidy of $5,596,114.

1

Background

The four communities are served by Great Lakes under two different contracts. By Order 

2008-6-11, June 10, 2008, the Department selected Great Lakes to provide Kingman 

12 nonstop round trips a week to Las Vegas for an annual subsidy of $1,275,771, and

Prescott 18 nonstop round trips per week to Phoenix or Las Vegas (later amended by Order 

2008-8-12, August 13, 2008, to include service to Ontario, California) for an annual 

subsidy of $1,622,719. By Order 2009-8-5, August 10, 2009, the Department selected 

 

1

Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated 

funds.
- 2 -

Great Lakes to provide Page 19 nonstop or one-stop round trips per week to Phoenix,

Denver or Las Vegas for an annual subsidy of $1,995,273, and Show Low, 19 nonstop 

round trips each week to Phoenix for an annual subsidy of $ 1,407,255. All the contracts 

expire April 30, 2011

As the end of the contracts was approaching, we issued Order 2010-11-17,

November 17, 2010, requesting proposals to serve the four communities for a new term. 

In response, we received proposals from Great Lakes, Gulfstream International Airlines 

(Gulfstream), SeaPort Airlines (SeaPort), and SkyWest Airlines (SkyWest). 

Each carrier’s complete proposal and community comments may be accessed online at 

http://www.regulations.gov/ by entering the community’s Docket number in the search 

block as per the front page of this order. On February 2, Gulfstream notified the 

Department that they were withdrawing their proposal to provide EAS at Kingman, Page, 

Prescott, and Show Low due to the carrier’s having been selected on February 1 to provide 

EAS at seven Montana cities. Therefore, we will only consider the proposals of the 

remaining three carriers, and will summarize them briefly here.

Proposal of Great Lakes

Great Lakes proposed six options to serve all four communities (two each for Page and 

Show Low, one each for Kingman and Prescott), each to be considered on a stand-alone 

basis, using 19-seat Beechcraft 1900D aircraft. Its Denver options would operate with 

both the United Airlines and Frontier Airlines code. 

At Kingman, Great Lakes proposed 12 nonstop round trips a week to either Las Vegas or 

Phoenix for an annual subsidy of $1,168,390. 

At Page, the carrier offered two options. Option 1 would provide the equivalent of three 

round trips a day, with four weekday round trips (reduced weekend service) during the 

peak season and two round trips a day during the non-peak season for an annual subsidy of 

$1,559,206. Service would be to Phoenix, with an option that one round trip a day may be 

substituted to either Denver (one-stop) or Las Vegas (nonstop). Option 2 is the same as 

Option 1 except Great Lakes would provide 19 weekly nonstop round trips year-round for 

an annual subsidy of $1,494,404.

For Prescott, Great Lakes proposed service of 18 weekly nonstop round trips to either Los 

Angeles or Ontario, and/or one-stop service to Denver for an annual subsidy of 

$1,832,233. 

At Show Low, the carrier offered two options. Option 1 would serve Phoenix nonstop 

with 14 weekly round trips for an annual subsidy of $1,396,315. Option 2 would provide

18 weekly nonstop round trips to Phoenix, with an option to serve Denver with one round 

trip a day, for an annual subsidy of $1,719,058. 
- 3 -

Proposal of SeaPort

SeaPort proposed to serve Show Low only, with a total of two nonstop round trips each 

weekday and weekend (12 a week) to Albuquerque, and two nonstop round trips 

(12 a week) to Phoenix, all using 9-seat Pilatus PC-12 aircraft for a first-year subsidy of 

$1,771,566, and a second-year subsidy of $1,773,648.

Proposal of SkyWest

SkyWest proposed to serve Page only, with two daily nonstop round trips, one to Salt Lake 

City operating as Delta Connection and one to Las Vegas operating as United Express

(14 total round trips), using 30-seat Embraer Brasilia EMB-120 aircraft for an annual 

subsidy of $2,443,182.

Community Comments

On January 21, 2011, we requested community comments regarding this carrier-selection 

case. We heard from all four communities, and each endorsed the proposal submitted by

Great Lakes.

David C. French, Executive Director at Kingman Airport Authority, fully supports the 

selection of Great Lakes. Lyle Dimbatt, Mayor of Page, supported Great Lakes Option #1 

and stated that the carrier’s service to Phoenix and Denver, and the airline’s interline ticket 

and baggage agreements with a number of major airlines, were important deciding factors. 

Mayor Dimbatt, however, did express concern over Great Lakes’ reliability, stating, “...

there has been a decline in dependable service (late or cancelled flights), causing passenger 

leakage...,” also adding, “Passenger support has declined and complaints have increased.” 

Prescott Mayor Marlin Kuyendall requested in his letter that Great Lakes work with the 

community “to develop a reasonable flight schedule to ensure that service is provided at 

the highest level possible.” Rick Fernau, Mayor of Show Low, states that Great Lakes’ 

Option #2 and its presence as Show Low’s current carrier skewed the City Council in its 

favor. Mayor Fernau also added, “We prefer the larger, more comfortable aircraft that 

Great Lakes flies and the interline agreements Great Lakes already has in place.” 

Decision

After carefully reviewing each carrier’s proposal and taking into account community

feedback, we have decided to re-select Great Lakes at all four communities to fulfill the 

EAS contract for another two-year term. With the withdrawal of Gulfstream’s proposal, 

Great Lakes was left as the only carrier to bid on service at Kingman and Prescott. Both 

communities supported Great Lakes’ proposal and we find the subsidy and service levels 

reasonable and will meet both communities’ needs. 

At Page we were faced with a choice between Great Lakes and SkyWest and, again, the 

decision is straightforward. The community supports Great Lakes’ Option #1, and Great 

Lakes’ annual subsidy request of $1,559,206 is significantly lower than SkyWest’s annual 

subsidy request of $2,443,182. We are concerned, however, by the community’s 

comments about the reliability of service provided by Great Lakes. A key component of 

EAS carrier selection criteria is demonstrated reliability in providing scheduled service, 
- 4 -

and we expect Great Lakes to work to address the community’s concerns regarding its 

service reliability. 

With respect to Show Low, the decision to choose Great Lakes is straightforward. The 

community supports Great Lakes Option #2, which is a continuation of status-quo service,

and the carrier’s annual subsidy of $1,719,058 is slightly less than SeaPort’s annual 

subsidy of $1,771,556. 

Although we are selecting Great Lakes to serve Kingman and Show Low for a two-year 

period, both communities are currently over the $200 subsidy cap (Kingman at $629, Show 

Low at $250), and, in particular, Kingman’s per passenger subsidy is extremely high. 

While we are aware that Kingman suffered a ten-month service hiatus from May 31, 2008, 

through April 17, 2009, the Department is nonetheless prohibited from subsidizing air 

service at a community where the subsidy per passenger exceeds $200, unless the 

community is more than 210 highway miles from the nearest large or medium hub airport.2 

Kingman is 121 miles from Las Vegas McCarren International, a large hub airport. We 

expect both communities and Great Lakes to work together to maximize use of the service 

to lower the subsidy per passenger to $200 or less. We will continue to monitor 

enplanements during the course of Great Lakes’ term and will take appropriate action if 

necessary, including termination of eligibility for subsidy under the EAS program.

We shall make these selections of Great Lakes contingent upon the Department’s receiving 

properly executed certifications from the carrier 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) requires that we find an air carrier fit, willing, and able to provide 

reliable service before we may subsidize it to provide essential air service. Great Lakes is

subject to the Department’s continuing fitness requirements, and no information has come 

to our attention that 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 findings. We therefore conclude that the carrier remains fit to 

conduct the operations proposed here.

This order is issued under authority delegated in 49 CFR 1.56a(f).

ACCORDINGLY,

1. We select Great Lakes Aviation, Ltd., to provide essential air service at Kingman, Page, 

Prescott, and Show Low, Arizona, and establish the subsidy rates, as described in 

Appendix C, for the period May 1, 2011, through April 30, 2013;

 

2

Congress first established the $200 ceiling under P.L. 101-164 for fiscal year 1990, and reestablished it in 

fiscal years 1994-1999. The ceiling was made permanent by P.L. 106-69, the Department of Transportation 

and Related Agencies Appropriations Act of 2000.
- 5 -

2. 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 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;

3. 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 Kingman, 

Page, Prescott, and Show Low, Arizona;

4. These dockets will remain open pending further Department action; and

5. We will serve copies of this order on the Mayors and Airport Managers of Kingman,

Page, Prescott, Show Low, Great Lakes Aviation, Ltd., SeaPort Airlines, and SkyWest 

Airlines.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available online at

www.regulations.gov
Appendix A

AREA MAP

 
Appendix B

Page 1 of 4
Appendix B

Page 2 of 4
Appendix B

Page 3 of 4
Appendix B

Page 4 of 4
 Appendix C

Page 1 of 4

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at Kingman, Arizona

Effective Period: May 1, 2011, through April 30, 2013

Scheduled Service: 12 nonstop round trips a week to either Las Vegas or Phoenix

Aircraft: 19-seat Beechcraft 1900D

Rate per Eligible Flight: $9551

Weekly Ceiling: $22,9202

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 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 the 

carrier do not constitute a total or partial reduction or cessation of payment.

Funds are not currently available for performance under this order beyond March 3, 2011. The Department’s 

obligation for performance under this order beyond March 3, 2011, is subject to 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 March 3, 2011, until funds are made available to the 

Department for performance. If funds are not made available for performance beyond March 3, 2011, 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 $1,168,390 divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98 

percent completion factor).

2

24 arrivals and departures per week multiplied by $955.
 Appendix C

Page 2 of 4

 

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at Page, Arizona

Effective Period: May 1, 2011, through April 30, 2013

Scheduled Service: 19 weekly nonstop round trips to Phoenix, with an option that one round trip 

a day may be substituted to either Denver (one-stop) or Las Vegas (nonstop)

Aircraft: 19-seat Beechcraft 1900D

Rate per Eligible Flight: $8051

Weekly Ceiling: $30,5902

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 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 the 

carrier do not constitute a total or partial reduction or cessation of payment.

Funds are not currently available for performance under this order beyond March 3, 2011. The Department’s 

obligation for performance under this order beyond March 3, 2011, is subject to 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 March 3, 2011, until funds are made available to the 

Department for performance. If funds are not made available for performance beyond March 3, 2011, 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 $1,559,206 divided by 1,936 annual departures (38 weekly departures x 52 weeks x 98 

percent completion).

2

38 arrivals and departures per week multiplied by $805 per flight.
 Appendix C

Page 3 of 4

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at Prescott, Arizona

Effective Period: May 1, 2011, through April 30, 2013

Scheduled Service: 18 weekly nonstop round trips to either Los Angeles or Ontario, and /or onestop service to Denver

Aircraft: 19-seat Beechcraft 1900D

Rate per Eligible Flight: $9991

Weekly Ceiling: $35,9642

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 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 the 

carrier do not constitute a total or partial reduction or cessation of payment.

Funds are not currently available for performance under this order beyond March 3, 2011. The Department’s 

obligation for performance under this order beyond March 3, 2011, is subject to 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 March 3, 2011, until funds are made available to the 

Department for performance. If funds are not made available for performance beyond March 3, 2011, 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 $1,832,233 divided by 1,835 annual departures (36 weekly departures x 52 weeks x 98 

percent completion).

2

36 arrivals and departures per week multiplied by $999.
 Appendix C

Page 4 of 4

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at Show Low, Arizona

Effective Period: May 1, 2011, through April 30, 2013

Scheduled Service: 18 weekly nonstop round trips to Phoenix, with an option to serve Denver 

with one round trip a day

Aircraft: 19-seat Beechcraft 1900D

Rate per Eligible Flight: $9371

Weekly Ceiling: $33,7322

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 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 the 

carrier do not constitute a total or partial reduction or cessation of payment.

Funds are not currently available for performance under this order beyond March 3, 2011. The Department’s 

obligation for performance under this order beyond March 3, 2011, is subject to 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 March 3, 2011, until funds are made available to the 

Department for performance. If funds are not made available for performance beyond March 3, 2011, 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 $1,719,058 divided by 1,835 annual departures (36 weekly departures x 52 weeks x 98 

percent completion).

2

36 arrivals and departures per week multiplied by $937.