Order 2011

- 9

- 9 Served: September 14 , 2011



### UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 14 th day of September , 20 11

ORDER REQUESTING PROPOSALS

Summary By this order, the Department is requesting proposals from carriers interested in providing essential air service ( EAS ) at Burlington Iowa, and Decatur, Illinois, f rom February 1, 2012, through January 31, 2014

, with or without subsidy, by October 11 , 2011 (See Appendix A for a map.)

Background By Order 2009

- 10

- 13, October 22, 2009, Multi

- Aero, Inc. d/b/a Air Choice One (A ir Choice One) was selected to serve Burlington and Decatur, for a two

- year period. At Burlington, service was to consist of 24 weekly nonstop round trips (12 nonstops per week to Chicago O’Hare and 12 to St. Louis). At Decatur, service was to consist of 36 weekly nonstop round trips (18 nonstops per week to Chicago O’Hare and 18 to St. Louis). All service was to be operated with

9

- seat Cessna Grand Caravan aircraft. The Department directed Air Choice One to inaugurate
service from Decatur to St. Louis on or before December 15, 2009, and to Chicago O’Hare by January 15, 2010. If Air Choice One did not inaugurate service at Decatur by those dates, we

had selected Hyannis Air Service, Inc. d/b/a Cape Air as a backup carrier to provide service at

Decatur. Air Choice One inaugurated service at Decatur on December 15, 2009

, to St. Louis and on January 15, 2010, to Chicago O’Hare. The carrier inaugurated service to Burlington on January 15, 201 0 . This made the expiration date of the contract for both communities January 31, 2012

.

Special discussion
Based on the most recent 12

- month period for which data are available ( Ju ly 1, 2010

, through

June 30 , 2011 ), 10,161 passengers were enplaned and deplaned at Burlington , while 9,316

Essential Air Service at

BURLINGTON, IOWA DECATUR, ILLINOIS

Under 49 U.S.C. 41731 et seq

. DOT

- OST

- 2001

- 8731
DOT

- OST

- 2006

- 2392 9- 2

-

passengers were enplaned and deplaned at Decatur . The current annual subsidy amount for Burlington is $ 2,171,241

, and Decatur ’s is $ 3,082,403 . Therefore, the subsidy per passenger at Burlington is $ 2 14 and $ 3 31 at Decatur . The Department is prohibited from subsidizing air
servi ce 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

. 1 Burlington and

Decatur exceed the $200 per passenger cap and both are fewer than 210 miles from a large or

medium hub. Burlington is 1 8 8 miles and Decatur is 126 miles, both from Lambert

- St. Louis International Airport ( STL ) , a medium hub airport

.

Prior to Air Choice One ’s inaugurating service, Great Lakes Airlines served both communities with lower than forecasted passenger loads due to its inability to secure a code

- share arrangement with American Airlines at its then St. Louis hub. The Department recognizes that

Air Choice One has increased its traffic at both communities si nce inaugurating service ; however, the subsidy per passenger remains higher than $200 at both communities. 2 In Order

2009

- 10

- 13, October 22, 2009, which selected Air Choice One to serve Burlington and Decatur, we noted the higher subsidy level for Decatur ’s community recommendation ; however, we believed Air Choice One’s proposal to serve Chicago O’Hare had potential to rejuvenate traffic levels, which, as noted above, it has. We also noted that Air Choice One ha d no electronic ticketing or baggage agreeme nts with major airlines and no presence online with any major online travel providers. Air Choice One has taken steps to increase its availability on consumer travel websites and the carrier states it has a baggage agreement with United Airlines , which

op erates a large hub operation at Chicago O’Hare . However, the electronic ticketing portion of this agreement is not yet in use , and may not be well into 2012, thus hindering passenger traffic growth

. Passenger usage at Decatur has been increasing with Air Choice One’s service, but falls well short of the carrier’s own forecast in its proposal to provide service. The last 12 months of which data are available (Ju ly 1, 2010, through June 30 , 2011) produced 9,316 passengers; almost 4 0% below Air Choice One’s forecast of 15,415 passengers

.

Rather than terminate service eligibility at either communit y , at this stage, the Department will solicit proposals for EAS at both, but the Department will evaluate all proposals submitted

before committ ing to a new contract or making a final determination on Burlington and

Decatur ’s continuing eligibility. During the window prior to the due date for proposals, we expect both communities to work with potential applicants to find ways to increase passenge r traffic and/or lower subsidy levels.

Request for Proposals As the end of the current rate term approaches, we are here requesting proposals from carriers interested in providing service at Burlington and/or Decatur, with or without subsidy, to be filed

no later than October 11 , 2011. After that date, s taff will then docket the proposals, thereby making them public, and direct each carrier to serve a copy of its proposal on the civic parties

1 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 o f 2000.

2 See Appendix B for traffic history.- 3

-

and other applicants. Shortly afterwards, we will provide a summary of the proposals to the

communit y and ask it to submit their final comments. We will give full consideration to all proposals that are timely filed. 3

Interested carriers should prepare their proposals with every expectation that their initial

pro posals will represent their final and only proposals. However, we retain the discretion to negotiate proposals with carriers when we deem it desirable. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and re

- soli cit a new round of proposals. However, negotiation and rejection are only occasional exceptions to the rule.

We are here providing interested carriers with some basic information to serve as guidance when they prepare their proposals, but we will not pre scribe a precise format for their proposals. We expect proposals to adequately describe the service being proposed and the annual amount of subsidy being requested. The applicants can make their own judgments as to the level of detail they wish to presen t; however, they might want to include proposed schedules as well as supporting data for their subsidy requests, such as projected block hours, revenues and expenses.

We strongly encourage clear, well

- documented proposals that will facilitate their evalua tion by

the affected communit y and the Department. 4

With respect to Burlington and Decatur , we expect proposals consisting of service with two

pilot, twin

- engine aircraft with at least 15 passenger seats, and offering two round trips each weekday and week end (12 total round trips per week) to a Chicago O’Hare

, Memphis, Minneapolis/St. Paul, St. Louis , or another large or medium hub airport, offering numerous connecting opportunities to the national air transportation system. I f aircraft with fewer than 15 passenger seats are contemplated, service patterns should consist of what each community is currently receiving . If such a proposal is submitted and the community ultimately supports the service, in effect waiving their right to 15

- seat or larger aircraf t, we would consider the waiver to apply only to the two

- year carrier

- selection at hand, i.e. we would not assume that the community waives their rights for all time.

Regarding proposals for Burlington and Decatur , as stated above, we will evaluate all proposals submitted before committing to a two

- year contract or making a final determination on the two communities’ continuing eligibility. Proposals for Burlington and/or Decatur must address the per passenger subsidy as stated above

, including, but not limited to, lower annual subsidy levels,

3 Carriers should not expect the Department to accept late fillings. In cases where a carrier proposes to provide essential air service without subsidy and we determine that service can be reliably provided wi thout such compensation, we typically do not proceed with the carrier

- selection case. Instead, we generally rely on that carrier’s subsidy

- free service as proposed.

4 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c)(1) directs us to consider four factors: (a) scheduled service reliability; (b) contractual and marketing arrangements with a larger carrier to ensure service beyond the hub; (c) interline arrangements that the applicant has made with a larger carrier at the hub; and (d) community views, giving substantial weight to the views of the elected officials representing the users. In addition, the Consolidated Appropriations Act , 2008, Public Law 110

- 161, provides that when selecting a carrier to provide EAS, the Department may consider the relative subsidy requirements, thus codifying a factor that we have considered since the inception of the program.- 4

-

marketing plans, such as advertising or fare promotions, enhanced access to connections to the national transportation system through electronic ticketing and baggage agreements or codeshare

agre ements with major airlines, and/or wider access to distribution in reservation systems or
consumer websites. We expect proposals from carriers that can reasonably demonstrate that they can operate at Burlington and/or Decatur under the $200 per passenger cap on a sustained basis. By the due date for proposals , we also expect each community to submit plans that it has to address the cap, either a joint effort with the carrier or independent of an air carrier ’s proposal

. Proposals that do not address the per

- passenger subsidy will be rejected.

The c ommunities and air carriers are encouraged to work together in advance of the due date for proposals to craft a service pattern that is desirable to the community and meets the operational

needs of the airline interested in submitting a proposal. In addition, carriers should be very clear as to whether a specific community’s proposal is on a stand

- alone basis, or whether it is part of a larger, inseparable package with other communities.

We encourage proposals that meet these requirements in an efficient manner. Carriers are also welcome to propose more than one service option, if they choose; they need not limit themselves to those requirements if they envision other, potentially more attractive service possi bilities

– different hubs, for example

– with subsidy requirements that remain competitive.

Service and Traffic History
For the 12

- month period ended June 30 , 2011, th e most recent period for which traffic data are available, Burlington averaged 16.2 enpl anements per day, and Decatur 1 4.9

. 5 In order to assist carriers in making their traffic and revenue forecasts, we have included historical traffic data in Appendix B.

Other Carrier Requirements The Department is responsible for implementing various Fede ral statutes governing lobbying activities, drug

- free workplaces, and nondiscrimination. 6 Consequently, all carriers receiving Federal subsidy for essential air service must certify that they are in compliance with Department regulations regarding drug

- fr ee workplaces and nondiscrimination, and those carriers whose subsidies exceed $100,000 over the life of the rate term must also certify that they are in compliance with the regulations governing lobbying activities. Because the Department is prohibited f rom paying subsidy to carriers that do not submit these documents, all carriers that plan to submit proposals involving subsidy should be aware that the selected carrier will be required to complete the required certifications. Interested carriers requiri ng more detailed

5 See Appendix B for histo rical traffic data. Enplanements represent one

- half of total origin

- and

- destination traffic, and average enplanements per day are based on 313 days per service year

. 6 The regulations applicable to these areas are: (1) 49 CFR Part 20

-- New restrictions o n lobbying; (2) 49 CFR Part 21

-- Nondiscrimination in federally

- assisted programs of the Department of Transportation

-- Effectuation of title VI of the Civil Rights Act of 1964; 49 CFR Part 27

-- Nondiscrimination on the basis of disability in programs and activities receiving or benefiting from Federal financial assistance; and 14 CFR Part 382

-

- Nondiscrimination on the basis of disability in air travel; and (3) 49 CFR Part 29

-- Government

- wide debarment and suspension (non

- procurement) and government

- wide requirements for drug

- free workplace (grants).- 5

-

information regarding these requirements should contact the Office of Aviation Analysis at (202) 366

- 5903. 7

Community and State Comments
The communit ies and State s are welcome to submit comments at any time. We encourage prospective applicants to contact the communit y be fore they submit their proposal s so that they

can tailor them to the communit y ’ s needs, as they will not be able to amend it after the due date.

A s noted earlier, we will provide a copy of the proposals to the civic parties and ask them to submit their final comments shortly after October 11 , 2011 , the due date for proposals.

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

- delegated to the Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We request that carriers interested in providing essential air service at Burlington, Iowa,
and/or Decatur, Illinois , submit their proposals, with or without subsidy requests, no later than
October 11 , 2011 . The proposals should be e

- mailed to EAS@dot.gov , with the title “Proposal to
Provide E AS at Burlington, I owa , and/or Decatur, I llinois ”; 8

2. Th ese docket s will remain open until further order of the Department; and

3. We will serve copies of this order on the mayors of Burlington, Iowa, and Decatur, Illinois, and the airport managers of South east Iowa Regional Airport (Burlington) and Decatur Airport, and the parties listed in Appendix D

.

By:

TODD M. HOMAN
Director Office of Aviation Analysis

(SEAL)

An electronic version of this document is available at http://www.regulations.gov

7 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.

8 Questions regarding filings in response to this order may be directed via e

- mail to Kevin Schlemmer at kevin.schlemmer@dot.gov or via phone at (202) 366

- 3176Appendix A



### AREA MAP

This map is provided by Sabre ® AirVision TM Profit Essentials and is being used with express perm ission of the copyright holder,
Sabre Airline Solutions®.Appendix B Page 1 of 2

Traffic History* Burlington, IA (BRL)

Year Month Stn Carrier Inbound Pax Outbound Pax Totals

2009 1 BRL Great Lakes Airlines 124 126 250

2009 2 BRL Great Lakes Airlines 123 119 242

2009 3 BRL Great Lakes Airlines 125 109 234

2009 4 BRL Great Lakes Airlines 99 105 204

2009 5 BRL Great Lakes Airlines 197 167 364

2009 6 BRL Great Lakes Airlines 193 193 386

2009 7 BRL Great Lakes Airlines 222 244 466

2009 8 BRL Great Lakes Airlines 211 207 418

2009 9 BRL Great Lakes Airlines 203 178 381

2009 10 BRL Great Lakes Airlines 205 183 388

2009 11 BRL Great Lakes Airlines 185 187 372

2009 12 BRL Great Lakes Airlines 174 155 329

2010 1 BRL Great Lakes Airlines 84 10 94

2010 1 BRL Multi-Aero, Inc. d/b/a Air Choice One 14 72 86

2010 2 BRL Multi-Aero, Inc. d/b/a Air Choice One 70 66 136

2010 3 BRL Multi-Aero, Inc. d/b/a Air Choice One 79 90 169

2010 4 BRL Multi-Aero, Inc. d/b/a Air Choice One 83 91 174

2010 5 BRL Multi-Aero, Inc. d/b/a Air Choice One 109 130 239

2010 6 BRL Multi-Aero, Inc. d/b/a Air Choice One 103 108 211

2010 7 BRL Multi-Aero, Inc. d/b/a Air Choice One 201 230 431

2010 8 BRL Multi-Aero, Inc. d/b/a Air Choice One 276 312 588

2010 9 BRL Multi-Aero, Inc. d/b/a Air Choice One 316 340 656

2010 10 BRL Multi-Aero, Inc. d/b/a Air Choice One 326 334 660

2010 11 BRL Multi-Aero, Inc. d/b/a Air Choice One 410 425 835

2010 12 BRL Multi-Aero, Inc. d/b/a Air Choice One 567 601 1,168

2011 1 BRL Multi-Aero, Inc. d/b/a Air Choice One 238 246 484

2011 2 BRL Multi-Aero, Inc. d/b/a Air Choice One 422 382 804

2011 3 BRL Multi-Aero, Inc. d/b/a Air Choice One 396 439 835

2011 4 BRL Multi-Aero, Inc. d/b/a Air Choice One 562 597 1,159

2011 5 BRL Multi-Aero, Inc. d/b/a Air Choice One 620 639 1,259

2011 6 BRL Multi-Aero, Inc. d/b/a Air Choice One 637 645 1,282

12

- months of passenger traffic ( 7 /1/10 through 6 /3 0 /11 )

– 10,161

*Source

– T

- 100 Market Report, Passengers in Schedule d Passenger ServiceAppendix B Page 2 of 2

Traffic History* Decatur, IL (DEC)

Year Month Stn Carrier Inbound Pax Outbound Pax Totals

2009 1 DEC Great Lakes Airlines 83 74 157

2009 2 DEC Great Lakes Airlines 50 55 105

2009 3 DEC Great Lakes Airlines 62 50 112

2009 4 DEC Great Lakes Airlines 61 51 112

2009 5 DEC Great Lakes Airlines 55 68 123

2009 6 DEC Great Lakes Airlines 52 55 107

2009 7 DEC Great Lakes Airlines 52 48 100

2009 12 DEC Multi-Aero, Inc. d/b/a Air Choice One 32 27 59

2010 1 DEC Multi-Aero, Inc. d/b/a Air Choice One 51 50 101

2010 2 DEC Multi-Aero, Inc. d/b/a Air Choice One 63 72 135

2010 3 DEC Multi-Aero, Inc. d/b/a Air Choice One 53 68 121

2010 4 DEC Multi-Aero, Inc. d/b/a Air Choice One 55 64 119

2010 5 DEC Multi-Aero, Inc. d/b/a Air Choice One 90 116 206

2010 6 DEC Multi-Aero, Inc. d/b/a Air Choice One 112 120 232

2010 7 DEC Multi-Aero, Inc. d/b/a Air Choice One 151 162 313

2010 8 DEC Multi-Aero, Inc. d/b/a Air Choice One 163 192 355

2010 9 DEC Multi-Aero, Inc. d/b/a Air Choice One 250 260 510

2010 10 DEC Multi-Aero, Inc. d/b/a Air Choice One 302 299 601

2010 11 DEC Multi-Aero, Inc. d/b/a Air Choice One 339 369 708

2010 12 DEC Multi-Aero, Inc. d/b/a Air Choice One 552 595 1,147

2011 1 DEC Multi-Aero, Inc. d/b/a Air Choice One 194 171 365

2011 2 DEC Multi-Aero, Inc. d/b/a Air Choice One 424 399 823

2011 3 DEC Multi-Aero, Inc. d/b/a Air Choice One 349 359 708

2011 4 DEC Multi-Aero, Inc. d/b/a Air Choice One 489 534 1,023

2011 5 DEC Multi-Aero, Inc. d/b/a Air Choice One 651 691 1,342

2011 6 DEC Multi-Aero, Inc. d/b/a Air Choice One 623 798 1,421

12

- months of passenger traffic ( 7 /1/10 through 6 /3 0 /11 )

– 9,316

*Source

– T

- 100 Market Report, Passengers in Schedule d Passenger ServiceAppendix C

Example of General Terms and Conditions for Essential Air Service

The carrier understands that it may forfeit its compensation for any flights that it does not ope rate 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 fo r 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 chang es 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 wh ether 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 ma ke 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 [DATE] . The

Government’s obligation for perform ance under this solicitation beyond [DATE] , 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 aris e for performance under this order beyond [DATE] , until funds are made available to the Department for performance. If funds are not made available for performance beyond [DATE] , the carrier will receive notice in writing by the Department.

Subsidy contr acts 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 paragra ph.

All claims for payment must be submitted within 60 days of the last day of service provided

under this order

.Appendix D

Scheduled Air Carriers, Contiguous US and Puerto Rico
Air Greco/Wings Air Horizon Air, Jeff Cole Air Sunshine, Inc. ICEPR, Luis Irizarry Air Sunshine, Mirmohammad Adili Intrepid Internatl Air, Rick Eyk Air West, Inc., John Raatz Island Air Charters, Linda House Air Wisconsin, Annette Daly Jet Air, Daniel Wolford Air Wisconsin, Jim Rankin Kenmore Air, Tim Brooks Airline Associates, Bill Mishk McCall Aviation, Dan Scott Alaska Airlines, Jeff Cole McCall Aviation, Michelle Alaska Airlines, Sandy Sinick Mesaba, John Spanjers Allegiant Air, Brian Davis Mesaba, Max Shemesh American Airlines, Carl Nelson MidStar Airlines, Jeffrey Fonner American Eagle, Gary Foss Midwest Airlines, Greg Aretakis American Eagle, Robert Emrich MN Aviation, Jose Maldonado Atlantic Southeast, Jon Lindlief Multi Aero, Darnea Atlantic Southeast, Roger Weston Multi Aero, Shane Storz Aviation Technologies/Charter Air Transport Northern Air Cargo, David Karp Bemidji Aviation, Cori Rude Northern Air Cargo, Eric Van Andel Bemidji Aviation, Arlen Rinkenberger NYDC, Henok Araya Cape Air, Andrew Bonney OST, Brian Swanson Cape Air, Dan Wolf OST, Dennis DeVany Cape Air, J. Flaherty OST, Kevin Adams Chautauqua, Josh Pascoe OST, Kevin Schlemmer Classic Aviation, Tony Henderson OST, Michael Martin Colgan Air, Mike Colgan OST, Scott Faulk Colgan Air, Kevin Scott Pacific Aviation Group, Craig Garrick CommutAir, Andy Price Pacific Aviation Group, Ron Pye CommutAir, Joel Raymond Pacific Wings, Frank Ford Consultant, Michael Mooney Pacific Wings, Greg Kahlstorf Consultant, Robert Silverberg PenAir, Danny Seybert Continental, Bruce Keiner PenAir, Scott Bloomquist Continental, Dan Weiss Pinnacle Airlines, Jennifer Gammill Continental, Lorry Halloway Pinnacle Airlines, Megan Rosia Delta, Anthony Canitano Pinnacle Airlines, Phil Reed Delta, Dan Shuman Planemasters, Inc. John Kessler Delta, Dana Debel Planemasters, Inc. Paul Berliner Delta, Jeff Davidman Planemasters, Inc. Todd DeSimone Delta, Jeff Morgan Raytheon, Mike Scheidt Delta, Joe Esposito Saab Group, Polly Prelinger Delta, Kristal Murphy Scenic, Mary Schneider Delta, Sascha Vanderbellen Scenic, Mitzi Daines Delta, Stephen A. Hedden Seaborne Airlines, Shawn Lewis DHS, Bill Ragan Air Choice One Airlines, Daniel Helland DHS, David Bernier Air Choice One /Wings of Alaska, Rob McKinney

Dorado Jets Shuttle America, Jerry Balsano Dorado Jets, Mark McKenna SkyWest, Brad Rawson Era Aviation, Lori Goodman SkyWest, Eric Christensen Executive Airlines, Kate Soled SkyWest, Michael Thompson Frontier Flying, Bob Hajducovich Sovereign Air, Bob Karns Frontier Airlines, Daniel Shurz Sovereign Air, Lois R. Barton

Frontline Aviation Tatonduk, Robert Everts Gem Air, Dan Schroeder Tatonduk, Robert Ragar Gem Air, JoAnn Wolters Tradewind, Eric Zipkin Great Lakes, Chuck Howell TransStates, Fred Oxley Great Lakes, Doug Voss TransStates, Gerry Wigmore Gulfstream, Dave Hackett Transport Azumah, Joel Anabilah

- Azumah Gulfstream, Mickey Bowman United, Alicia Gabriel Gulfstream, T. Cooper United, James Starnes Horizon Air, Dan Russo US Airways, Benjamin Slocum Horizon Air, Jennifer Thompson US Airways, Howard Kass Horizon Air, Mike McQueen US Airways, Jason Reisinger Warbelows Air Ventures, Art Warbelow