Order 2010-7-5

Served: July 13, 2010

 

UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Issued by the Department of Transportation

on the 13th day of July, 2010

ORDER SELECTING CARRIER

AND ESTABLISHING SUBSIDY RATES

Summary

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

providing subsidized essential air service (EAS) at Alamosa and Cortez, Colorado, for the twoyear period beginning August 1, 2010, at the annual subsidy rates of $1,987,155 and 

$1,847,657, respectively.1 (See Appendix A for a map of the service area.)

Background

Alamosa and Cortez are guaranteed to receive at least a minimum level of air service under the 

EAS program by virtue of the fact that they appeared on a certificated carrier’s Civil 

Aeronautics Board-issued certificate on October 24, 1978, the date the Airline Deregulation Act 

of 1978 was signed into law. (See 49 U.S.C. 41731-41744 for the EAS program’s governing 

statutes.) By Order 2008-5-24, May 20, 2008, the Department selected Great Lakes to provide 

EAS at the communities for the two-year period through July 31, 2010. That order established 

annual subsidy rates of $1,853,475 for Alamosa, and $1,297,562 for Cortez, for service 

consisting of 18 nonstop round trips per week from each community to Denver, operated with 

19-seat Beech 1900D aircraft.

In anticipation of the end of the rate term, the Department issued Order 2010-3-34, March 30,

2010, requesting proposals from carriers interested in providing replacement service at the 

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

Essential Air Service at

ALAMOSA, COLORADO 

CORTEZ, COLORADO 

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

 

 

DOCKET DOT-OST-1997-2960 

DOCKET DOT-OST-1998-3508
2

communities, with subsidy support if necessary, for the two-year period beginning August 1, 

2010.

Carrier Proposals

Great Lakes, the only carrier to respond, proposes to continue providing its current level of 

service, under code-share agreements with United Express and Frontier Airlines, consisting of 

18 nonstop round trips per week between each community and Denver, with 19-seat 

Beech 1900D aircraft. Great Lakes proposes to provide this service at the annual subsidy rates

of $1,987,155 for Alamosa and $1,847,657 for Cortez.

Community Comments

In response to our request for comments, we received responses from both communities. 

Mayor Kathleen Rogers, of Alamosa, stated that she had no negative comments regarding Great 

Lakes’ service and expressed being pleased by the carrier’s proposed continuation of service. 

She noted that, while the community is grateful for its service to Denver, many constituents 

would appreciate service to Albuquerque, where fares for connecting flights are less expensive.

Mr. Barry Shioshita, Manager of SLV Regional Airport in Alamosa, notes that the community 

has been fortunate to have an avenue of access to commercial aviation, and that EAS is a 

critical part of that opportunity, stating that “commercial aviation service enables our regional 

customers to have access to a quicker mode of transportation and travel”. He further notes, 

however, that there have recently been cancellations and delays causing customers to have to 

revise their schedules or make other arrangements. Like Mayor Rogers, Mr. Shioshita also 

expresses the desire for additional service – to Albuquerque or Phoenix.

Mayor Dan Porter, of Cortez, states that the City of Cortez supports the re-selection of Great 

Lakes to provide EAS at the community. However, he notes that the community has recently 

experienced an increase in complaints from air travelers about Great Lakes’ service; 

specifically, mechanical delays, crew availability, and unscheduled stops at other communities. 

Mr. Porter concluded by noting that the City of Cortez appreciates the continuation of the EAS 

program and that the community looks forward to working with Great Lakes.

Decision

After careful consideration of the carrier’s proposal, as well as the communities’ comments, we 

have decided to select Great Lakes to continue to provide subsidized EAS at Alamosa and 

Cortez, as proposed, for a new two-year period beginning August 1, 2010.

We find that the proposed service and subsidy levels are reasonable. However, we expect the 

carrier to address some of the deficiencies noted by community officials and continue to work 

with the communities to develop well-timed and well-spaced flight schedules that will 

efficiently meet the communities’ EAS needs.

We shall make this selection contingent upon the Department’s receiving properly executed 

certifications from Great Lakes that it is in compliance with the Department’s regulations 
3

regarding drug-free workplaces and nondiscrimination, as well as the regulations governing 

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 

finding. 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. The Department selects Great Lakes Aviation, Ltd., to continue to provide EAS at Alamosa 

and Cortez, Colorado, and establishes the subsidy rates, as detailed in Appendix B, for the twoyear period beginning August 1, 2010;

2. We set the final rate of compensation for Great Lakes, for the provision of essential air 

service at Alamosa, payable as follows: for each month during which EAS is provided, the 

amount of compensation shall be subject to the weekly ceiling set forth in Appendix C and shall 

be determined by multiplying the subsidy-eligible arrivals and departures completed during the 

month by $1,080;2

3. We set the final rate of compensation for Great Lakes, for the provision of essential air 

service at Cortez, payable as follows: for each month during which EAS is provided, the 

amount of compensation shall be subject to the weekly ceiling set forth in Appendix C and shall 

be determined by multiplying the subsidy-eligible arrivals and departures completed during the 

month by $1,004;3

4. The Department finds that Great Lakes continues to be fit, willing and able to operate as a 

commuter air carrier and capable of providing reliable EAS at Alamosa and Cortez;

5. We direct Great Lakes 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 

 2 See Appendix C for the calculation of this rate, which assumes the use of the aircraft designated. If the carrier 

reports a significant number of aircraft substitutions, a revision of this rate may be required.

3 See Appendix C for the calculation of this rate, which assumes the use of the aircraft designated. If the carrier 

reports a significant number of aircraft substitutions, a revision of this rate may be required.
4

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;

6. Dockets DOT-OST-1997-2960 and DOT-OST-1998-3508 will remain open until further 

order of the Department; and

7. The Department will serve a copy of this order on the mayors and airport managers of 

Alamosa and Cortez, 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 online at

www.regulations.gov
Appendix A

Area Map
Appendix B

Page 1 of 2

GREAT LAKES AVIATION, LTD.

ANNUAL COMPENSATION REQUIREMENT FOR ESSENTIAL AIR SERVICE AT

ALAMOSA, COLORADO
Appendix B

Page 2 of 2

GREAT LAKES AVIATION, LTD.

ANNUAL COMPENSATION REQUIREMENT FOR ESSENTIAL AIR SERVICE AT

CORTEZ, COLORADO
Appendix C

Page 1 of 3

GREAT LAKES AVIATION, LTD.

ANNUAL COMPENSATION REQUIREMENT FOR ESSENTIAL AIR SERVICE AT

ALAMOSA, COLORADO

Effective period: August 1, 2010, through July 31, 2012

Service: 18 nonstop round trips per week to Denver

Aircraft type: Beechcraft 1900D aircraft (19 seats)

Timing of flights: No upline or intermediate service is permitted without prior 

Department approval. Flights must be well-timed and wellspaced in order to ensure full compensation.

Annual compensation: $1,987,155

Subsidy Rate Per

Arrival/Departure: $1,0801

Weekly Compensation 

Ceiling: 2 $38,8803

___________________________

1

 Annual compensation of $1,987,155 divided by 1,840 annual arrivals and departures calculated as 

follows: 6 flights x 313 service days x 98% completion = 1,840. 2

 This rate assumes an annual completion factor of 97 percent. A compensation ceiling is to be applied 

per calendar week such that service above that ceiling in one week cannot make up for service shortfalls

in another week.

3

 Subsidy rate per arrival/departure of $1,080 multiplied by 36 eligible arrivals and departures.
Appendix C

Page 2 of 3

GREAT LAKES AVIATION, LTD.

ANNUAL COMPENSATION REQUIREMENT FOR ESSENTIAL AIR SERVICE AT

CORTEZ, COLORADO

Effective period: August 1, 2010, through July 31, 2012

Service: 18 nonstop round trips per week to Denver

Aircraft type: Beechcraft 1900D aircraft (19 seats)

Timing of flights: No upline or intermediate service is permitted without prior 

Department approval. Flights must be well-timed and wellspaced in order to ensure full compensation.

Annual compensation: $1,847,657

Subsidy Rate Per

Arrival/Departure: $1,0041

Weekly Compensation 

Ceiling: 2 $36,1443

___________________________

1

 Annual compensation of $1,847,657 divided by 1,840 annual arrivals and departures calculated as 

follows: 6 flights x 313 service days x 98% completion = 1,840. 2

 This rate assumes an annual completion factor of 97 percent. A compensation ceiling is to be applied 

per calendar week such that service above that ceiling in one week cannot make up for service shortfalls

in another week.

3

 Subsidy rate per arrival/departure of $1,004 multiplied by 36 eligible arrivals and departures.
Appendix C

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 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 are not currently available for performance under this order beyond September 30, 2010. 

The Government's obligation for performance under this order beyond September 30, 2010, 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 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 carrier will receive notice in writing by the Department.

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

under this order.