Order: 2014-8-16

Served: August 18, 2014

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 18th day of August, 2014

ORDER SELECTING CARRIER AND DEFERRING ACTION

Summary

By this Order, the Department is: 1) selecting Multi-Aero Inc. d/b/a Air Choice One, to 

provide Essential Air Service (EAS) at Mason City, Iowa, using 9-passenger Cessna Grand 

Caravan or 8-passenger Piper Navajo aircraft to Chicago O’Hare International Airport 

(Chicago O’Hare), for 24 weekly round trips, for the two-year period from November 1, 

2014, through October 31, 2016, for an annual subsidy of $4,290,5331; and 2) deferring 

action at Fort Dodge, Iowa, until further Order from the Department. See Appendix A for 

a map.

Background

Per Order 2011-11-30 (November 23, 2011), the Department selected Great Lakes 

Aviation, Ltd. (Great Lakes), to provide EAS at Fort Dodge and Mason City. Order 2012-

6-23 (June 26, 2012), established the effective dates, which were May 17, 2012, through 

May 31, 2014. 

 

1

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

Essential Air Service at

FORT DODGE, IOWA

MASON CITY, IOWA

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

DOCKET DOT-OST-2001-10682

DOCKET DOT-OST-2001-10684
- 2 -

On January 27, 2014, Great Lakes announced in a press release that service to these 

communities would be suspended as of February 1, 2014, without filing the requisite 90-

day notice of its intent to suspend service. The Department issued Order 2014-1-20 

(January 31, 2014), requesting proposals for replacement service on an expedited basis.

We received proposals from Great Lakes and Air Choice One. Both communities asked

that we re-solicit proposals due to Great Lakes’ suspending operations and its unreliable 

service, and Air Choice One for proposing single-engine aircraft. Neither community was 

willing to waive its right to twin-engine service at that time. By Order 2014-4-22 (April 

22, 2014), the Department re-solicited proposals from air carriers interested in providing 

EAS at Fort Dodge and Mason City, with or without subsidy. Again, we received 

proposals from only Great Lakes and Air Choice One.

Summary of Proposals 

Great Lakes

Great Lakes submitted options for Mason City, each with service to Minneapolis-St. Paul 

International Airport (Minneapolis or MSP). The first option is 24 weekly round trips 

using 9-passenger Beech 1900 aircraft for $2,987,002 in annual subsidy, or 24 weekly 

round trips using 19-passenger Beech 1900 aircraft for $2,475,336 in annual subsidy. The 

second option is 18 weekly round trips with 9-seat aircraft for $2,429,954, or 18 weekly 

round trips with 19-seat aircraft for $1,952,477.2

Air Choice One

Air Choice One submitted proposals that were combined packages and stand-alone

options. The combined packages included Fort Dodge and Mason City; however, since 

action on Fort Dodge is being deferred at this time, we will only address the stand-alone 

option at Mason City. If the Department grants Fort Dodge a waiver, we will revisit the 

various options. 

The Mason City stand-alone option consists of 24 weekly round trips to Chicago O’Hare

for an annual subsidy of $4,290,533, for a two-year term, or a discounted annual rate of 

$4,247,628 for a four-year term.

Community Comments

On June 3, 2014, the Department solicited comments from the community regarding this 

air carrier selection case. We received a letter from Mr. Eric Bookmeyer, Mayor of Mason 

City, and Ms. Joni Dunn, Chair of the Mason City Airport Commission, supporting Air 

Choice One’s proposal for 24 weekly round trips to Chicago O’Hare, described above. 

The Mason City Airport Commission voted unanimously to recommend Air Choice One’s 

option for 24 weekly round trips to Chicago O’Hare. The community also affirmatively 

waived their right to twin-engine aircraft. The community stated their willingness to 

 

2 As an alternative, Great Lakes provided proposals that lower subsidy requirements assuming that the 

aircraft can be returned to a 19-seat configuration requirement.
- 3 -

support Air Choice One’s service to ensure that they conform to the $200 per passenger 

subsidy.

Carrier Selection for Mason City

The community supports Air Choice One to provide EAS at Mason City, and the 

Department finds the service and subsidy levels to be reasonable. In addition, Air Choice 

One’s service to Chicago O’Hare will provide Mason City with excellent access to the 

national air transportation system, and the carrier has a good track record of providing 

reliable service in the EAS program. Therefore, we will select Air Choice One to provide 

EAS at Mason City for a two-year term.

We make this selection of Air Choice One at Mason City contingent upon the 

Department’s receiving properly executed certifications from the air 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.3

Legislative Changes That May Affect Future EAS Eligibility 

Public Law No. 112-95 amended 49 U.S.C. §41731(a)(1)(B) to change the definition of 

“eligible place” for the purpose of receiving EAS. The amendment states that to be 

eligible, a community must maintain an average of 10 enplanements or more per service 

day, as determined by the Secretary, during the most recent fiscal year beginning after 

September 30, 2012.4 The legislation exempts locations in Alaska and Hawaii and 

communities that are more than 175 driving miles from the nearest large or medium hub 

airport. Additionally, the Department of Transportation and Related Agencies 

Appropriations Act, 2000, prohibits the Department from subsidizing EAS to communities 

located within the 48 contiguous States receiving per passenger subsidy amounts exceeding 

$200, unless the communities are located more than 210 miles from the nearest large or 

medium hub airport. As Mason City is within 175 miles of a large or medium hub airport, 

Minneapolis/St. Paul International Airport (MSP) and, thus, is also within 210 miles of a 

large or medium hub, the communities must meet the 10-enplanement-a-day threshold and 

not exceed the $200 subsidy per passenger cap for EAS to continue, barring a waiver from 

the Secretary.5

Public Law 112-27, signed into law on August 5, 2011, further amended the definition of 

“eligible place” for the purpose of receiving EAS.6 The amendment, among other things, 

 

3 The certifications are available online under “Reports and Publications” at 

http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/essential-air-service

4 The Secretary also has authority to waive the 10 passenger requirement, on an annual basis, if the 

community can demonstrate that the reason the location averages fewer than 10 passengers per day is due to a 

temporary decline in enplanements and to waive the $200 subsidy-per-passenger limit for a limited period of 

time, on a case-by-case basis. See 49 U.S.C. § 41731(e); Public Law 112-95.

5 On May 1, 2014, a Notice of Proposed Enforcement Policy on the $200 per passenger subsidy cap was 

published in the Federal Register (Volume 79, Issue 84). It outlined the Department’s proposed policy on this 

issue, which would use traffic data from November 1, 2014, through September 30, 2015, to measure 

compliance. The Department has solicited public comments on the policy and the comment period closed 

June 30, 2014. Refer to www.regulations.gov and search “DOT-OST-2014-0061” for more information. 

6 See 49 U.S.C. § 41731.
- 4 -

states that to be eligible, a community must have had an average subsidy per passenger of 

less than $1,000 during the most recent fiscal year, as determined by the Secretary of 

Transportation. 

Air Choice One and the community should be aware that the Department will continue to 

monitor eligibility to receive EAS in light of these requirements throughout the life of the 

EAS contract. The Department may cancel a contract for any community receiving EAS if 

it does not average 10 or more enplanements per service day during FY2014 and all

subsequent fiscal years. Average enplanements and per passenger subsidies will be 

calculated based on end of fiscal year data.

The Department highly encourages Air Choice One and Mason City to work together to 

remain in compliance with the statute.

Special discussion about Fort Dodge

Order 2014-4-26, issued on April 24, 2014, found that Fort Dodge was within 175 miles of 

Omaha Airport-Eppley Airfield (OMA), a medium hub, averaged fewer than 10 

enplanements per day in fiscal year 2013 and, thus, tentatively terminated its EAS 

eligibility. That tentative decision was made final by Order 2014-6-6, issued 

June 24, 2014, which also described the waiver process and announced our intention not to 

terminate EAS subsidy during the processing of any waiver petitions, which were due to 

the Department by July 24. Fort Dodge submitted a timely waiver application, so its longterm status in the EAS program will not be known until the waiver process has concluded. 

Therefore, we will not address any Fort Dodge proposals or any proposals that include Fort 

Dodge as part of an inseparable package.

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that we find an air carrier fit, willing, and able to 

provide reliable service before we may subsidize it to provide EAS. Air Choice One is

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

to our attention that would cause us to question the air 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 Air Choice One is 

reliable and fit to conduct the operations proposed here.

This Order is issued under authority delegated in 49 CFR Part 1.25a(b).

ACCORDINGLY,

1. We select Multi-Aero Inc. d/b/a Air Choice One to provide EAS at Mason City, Iowa,

and establish the annual subsidy rate as described in Appendix C;

2. We will defer action on a long-term carrier selection decision at Fort Dodge, Iowa, until 

further Department action;

3. We direct Multi-Aero Inc. d/b/a Air Choice One to retain all books, records, and other 

source and summary documentation to support claims for payment, and to preserve and 
- 5 -

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 

from the service date of this Order 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;

4. We find that Multi-Aero Inc. d/b/a Air Choice One is fit, willing and able to operate as a 

commuter air carrier, and capable of providing reliable Essential Air Service at Mason 

City;

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

6. The Department will serve a copy of this Order on the Mayors of Fort Dodge and 

Mason City, Iowa, the airport managers of Fort Dodge Regional Airport and Mason City 

Municipal Airport, Multi-Aero, Inc. d/b/a Air Choice One, and Great Lakes Aviation, Ltd.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at

http://www.regulations.gov
Appendix A

AREA MAP

Maps generated by the Great Circle Mapper - copyright © Karl L. Swartz.
Appendix B

Air Choice One Proposal for EAS at Mason City
Appendix C

Multi-Aero Inc. d/b/a Air Choice One

Essential Air Service to be provided at Mason City, Iowa

Docket DOT-OST-2001-10684

Effective Period: November 1, 2014, through October 31, 2016

Scheduled Service: 24 weekly nonstop round trips to Chicago (ORD)

Aircraft: 9-passenger Cessna Grand Caravan or 8-passenger Piper Navajo

Rate per Eligible Flight: $1,7481

Weekly Ceiling: $83,9042

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 this 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 service levels, the carrier may cease to provide service to that 

specific location without regards 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.

Subsidy contract 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 September 30, 2014. The Government’s obligation for 

performance under this order beyond September 30, 2014, 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 September 30, 2014, until funds are made available to the Department for performance. If sufficient funds are 

not made available for performance beyond September 30, 2014, 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.

 

1 Annual compensation of $4,290,533 divided by the 2,454 annual departures (8 flights per day x 313 days x 98

percent completion).

2

48 arrivals and departures per week multiplied by $1,748 per flight.