Order 2013-8-1

Served: August 2, 2013

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 2nd of August, 2013

Essential Air Service at

TATITLEK, ALASKA

Under 49 U.S.C. 41731 et seq. DOCKET DOT-OST-2013-0030

ORDER SELECTING CARRIER

Summary

By this Order, the Department selects Reeve Air Alaska, LLC (Reeve), to provide Essential Air 

Service (EAS) at Tatitlek, Alaska, with two nonstop round trips per week to Anchorage with 

Piper Navajo PA-31 aircraft for a two-year period for $93,080 annual subsidy.1

Background

Order 2013-2-22, February 22, 2013, requested proposals for EAS at Tatitlek. That RFP noted 

that Tatitlek’s EAS determination had been established by Order 1980-1-167, January 25, 1980, 

which set Tatitlek’s level of air service to be one scheduled round trip per week during the peak 

season and one flag-stop round trip per week during the off-peak to Cordova with small aircraft 

having ten or fewer seats and up to two intermediate stops. In addition, the RFP encouraged:

“proposals that meet the community’s requirements in an efficient manner. Consistent 

with the EAS determination, proposals should propose to provide one scheduled 

passenger round trip per week [emphasis added]. Carriers are also welcome to propose 

more than one service option, if they choose; they need not limit themselves to a single 

specific service pattern if they envision other, potentially more attractive service 

possibilities – different hubs, or longer terms for the contracted service – with subsidy 

requirements that remain competitive.” 

 

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds.
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That RFP set March 21, 2013, as the deadline for proposals. On March 11, 2013, J&M Alaska 

Air Tours, Inc., d/b/a Alaska Air Transit (AAT), requested an extension of the deadline, and by 

notice dated March 12, 2013, we extended the deadline to April 4, 2013. We received timelyfiled proposals from AAT, Reeve, and from Security Aviation. 

Order 2013-6-6, June 7, 2013, rejected the proposals from all three carriers, as described in that 

Order. However, during the period for community comments, the civic officials made a strong 

case that two round trips a week were required, rather than the one round trip we had requested in 

the original RFP. Order 2013-6-6 re-solicited proposals but requested proposals for one or two 

round trips a week. Proposals were due June 20, 2013, and we received timely-filed proposals 

from the same three carriers – AAT, Security Aviation, and Reeve. All proposals were 

responsive to our second RFP. On June 21, 2013, we requested community comments, with 

comments due July 1, 2013. The carriers’ proposals are summarized below.

Proposal of AAT

Option 1: $155,168 annual subsidy for two nonstop round trips per week to Anchorage with 

Piper Navajos configured to 7 seats.2 

Option 2: $139,828 annual subsidy for one nonstop round trip per week to ANC with 

Piper Navajos configured to 7 seats. 

Proposal of Security Aviation

The carrier submitted a single option for two nonstop round trips per week to ANC for $1,917 

per round trip, or we infer $199,368 annual subsidy with Piper Navajo, PA-31 equipment.

Proposal of Reeve Air Alaska

Option 1: $46,540 annual subsidy for one nonstop round trip per week to ANC with 

Piper Navajo aircraft.

Option 2: $93,080 annual subsidy for two nonstop round trips per week to ANC with 

Piper Navajo aircraft.

Comments

Mr. David Totemoff, the Village President, stated that “In our view we are hoping that AAT will 

be our designated air carrier.” Mr. Bob Crumley, superintendent of the Chugach school district,

which includes Tatitlek, stated that “The Chugach School District has reviewed the proposals and 

continues to believe the Alaska Air Transit proposal is best for our school, district, students, and 

staff.” Mr. Brandon Moonin, a community health aide, endorsed AAT, indicating they have a 

“great relationship with the community.” 

 

2 Piper Navajos can be configured for up to 9 seats. The carrier indicates that it might upgrade its service to Cessna 

Caravan or Pilatus PC-12 aircraft, but because we cannot require such service, we do not assign that any decisional 

weight. Carriers are always allowed to provide superior service to what they are contracted to provide.
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Mr. Tim Sullivan with the North Pacific Fisheries Management Council and Deputy Director of 

the Alaska Fisheries Development Foundation wrote in support of Reeve based on its safety 

record and customer service. Mr. Hyde Vernon, Construction Manager for the Alaska Native 

Tribal Health Consortium, indicates he regularly uses Reeve for passenger and freight service to 

Tatitlek, and fully endorses them. Mr. Chris Gill, Director of Project Management and 

Implementation for GCI Communications indicates he and his teams have used Reeve and were 

pleased with the carrier. 

We also received several late-filed comments. Ms. Victoria Vlassof and David Totemoff were 

concerned that some of the support letters for Reeve were from people who are not village residents. 

Mr. Olen Harris, Executive Director for the North Pacific Rim Housing Authority reiterated the 

need for frequent air service to Tatitlek, and indicated that his organization had a long and very 

positive relationship with AAT, and had regularly utilized their charters for both passenger and 

freight service. Chugachmiut, the regional health care provider for Tatitlek, indicates they regularly 

use AAT and that it takes “a sincere interest in the well-being of our communities and 

beneficiaries.” 

Decision

Based on the proposals before us, we will select Reeve Air Alaska’s Option 2, two nonstop round 

trips per week to Anchorage with Piper Navajo aircraft for $93,080 annual subsidy. 

Order 2013-6-6 requested proposals for either one or two round trips per week. First, we have 

decided to require two round trips per week rather one, eliminating Reeve’s Option 1, the least 

expensive option -- one nonstop round trip per week to Anchorage for $46,540. As noted in 

Order 2013-6-6, if the community had only one round trip per week, visitors to the community 

would either incur the expense of staying an entire week at Tatitlek, or Anchorage, for that 

matter, or need to charter an aircraft for more immediate access. With two scheduled round trips 

per week, that period when a passenger would be unable to leave Tatitlek would be cut in half, 

and the community would thereby have much better access to the national air transportation 

system. 

Of the remaining proposals that offer two round trips per week, Security Aviation requests 

$199,368 annual subsidy, AAT $155,168, and Reeve $93,080.3 We will eliminate Security 

Aviation’s proposal from further consideration because it was the most expensive and received 

no community support. Of the two remaining proposals, AAT and Reeve, Tatitlek’s civic 

officials indicate that they favor AAT, while Reeve received significant support from some of its 

customers. Although 49 U.S.C. § 41733(c)(1)(d) requires that we consider “the preferences of 

the actual and potential users of air transportation at the eligible place, giving substantial weight 

to the views of the elected officials representing the users,” the Department may also consider the 

relative subsidy requirements when determining between or among carriers competing to provide 

that service.4

 

3 Each of these proposals contemplates nonstop service to Anchorage with Piper Navajo aircraft.

4 See The Consolidated and Further Continuing Appropriations Act, 2012, Public Law No. 112-55, and continued 

by the Full-Year Continuing Appropriations Act, 2013, Public Law No. 113-6.
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In this instance, the difference in subsidy between the two proposals is decisional. AAT requests 

two-thirds5 more subsidy than Reeve for the same level of service. In the initial round of 

proposals that we rejected, AAT requested $170,373 for three nonstop round trips per week with 

the same hub and same aircraft type. A simple pro-rate of that earlier proposal would have 

produced an annual subsidy of $113,582, 6 close to the $93,080 that Reeve has now proposed. 

We are disappointed, given the community’s preference for AAT, that the carrier did not reduce 

its subsidy request proportionally with the reduction in service.7 Based on the information 

before us, we will select Reeve.

Carrier Fitness

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

able to provide reliable service before the Department may subsidize it to provide EAS. Reeve 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. DOT has 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 Part 1.25a(b).

ACCORDINGLY,

1. We select Reeve Air Alaska, LLC., to provide EAS at Tatitlek, Alaska, as described in 

Appendix B;

2. We direct Reeve Air Alaska, LLC., 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 from the service date of the 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;

3. We find that Reeve continues to be fit, willing and able to operate as a commuter air carrier 

and capable of providing reliable Essential Air Service at Tatitlek;

4. This docket will remain open until further Order of the Department; and

 

5 ($155,168 - $93,080) ÷ $93,080 = 66.70 percent.

6 $170,373 x 2 round trips per week ÷ 3 round trips per week = $113,582. 

7 The carrier reduced its projected revenue proportionally with its reduced service, but reduced its projected 

Insurance, Aircraft, Hangar, and Indirect expenses not at all. 
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5. We will serve copies of this Order on the civic officials of Tatitlek, Alaska, the State of 

Alaska Department of Transportation and Public Facilities, on Security Aviation, Inc., on J&M 

Alaska Air Tours, Inc., d/b/a Alaska Air Transit, and on Reeve Air Alaska, LLC.

By:

Susan L. Kurland

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
Appendix A

Nonstop Great Circle Miles to Tatitlek (TEK)

Anchorage, ANC 113

Cordova, CDV 49

Chenega, NCN 71

Valdez, VDZ 24
Appendix B

Reeve, Essential Air Service to be Provided to 

Tatitlek, Alaska, Docket 2013-0030

Effective Period: October 1, 2013, September 30, 2015.

Service: Two nonstop round trips per week to Anchorage with Piper Navajo aircraft;

Annual Subsidy: $93,080

Annual Flights: 2081

Subsidy per Flight: $4482

Weekly Subsidy Ceiling: $1,7923

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.

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.

Funds may not be available for performance under this Order beyond September 30, 2013. The Government’s obligation for 

performance under this Order beyond September 30, 2013, 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, 2013, until funds are made available to the Department for performance. If funds are not made available for 

performance beyond September 30, 2013 or if the funds made available are insufficient to cover the full appropriations period, 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.

 

1 Two round trips per week x two directions x 52 weeks.

2 $93,080 ÷ 208 flights.

3 $448 per flight x 4 flights per week.