Order 2010

- 7

- 5

Served: July 13 , 20 10



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

Issued by the Department of Transportation

on the 13 th day of July, 2010

ORDER SELECTING CARRIER
AND ESTABLISHING SUBSIDY RATE S

Summary By this order, the Department is select ing Great Lakes Aviation

, Ltd

. ( Great Lakes )

, to continue provid ing subs idized essential air service (EAS) at Alamosa and Cortez, Colorado

, for the two

year period beginning August 1, 20 10 , at the annual subs idy rate s of $ 1,98 7

, 155 and $1,847,657, respectively

. 1 (See Appendix A for a map of the service area

. )

Background

Alam osa 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. 417 3 1

- 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 J uly 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 antici pation of the end of the rate term, the Department issued Order 20 10

- 3

- 34

, March 30

, 20 10 , 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 approp riated 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

- 35082

communit ies , with subsidy support if necessary, for the two

- year period beginni ng August 1,

2010

.

Carrier Proposal s 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

1 8 nonstop round trips per wee k between each community and Denver, with 19

- seat
Beech 1900D aircraft . Great Lakes proposes to provide this service at the annual subsidy rate s of $1,98 7

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

Community Comments In response to our request for commen ts , 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, whi le 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 commu nity 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. L ike 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 fro m 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 communit ies’ comments, w e 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, 20 10

.

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

wit h the communities to develop well

- timed and well

- spaced flight schedules that will efficiently meet the comm unit ie s ’ 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 regulations3

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 car rier'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 , a nd establishes the subsidy rate s , as detailed in Appendi x B , for the two

year period beginning August 1, 20 10 ;

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 compens ation 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

t he 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 c alculation 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 forf eit its compensation for any claim that is not supported under the terms of this order;

6 . Docket s 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 m ayor s 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 on line 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 peri od: August 1, 20 10 , through Ju ly 3 1, 201 2

Service: 1 8 non stop 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. Fl ights must be well

- timed and well

spaced in order to ensure full compensation.

Annual compensation: $ 1, 987

, 155

Subsidy Rate Per Arrival/Departure: $ 1,080 1

Weekly Compensation Ceiling: 2 $ 38

, 880 3

___________________________ 1 Annua l compensation of $ 1, 987

, 155 divided by 1, 840 annual arrivals and departures calculated as

follows: 6 flights x 3 13 service days x 9 8 % completion = 1, 840

. 2 This rate assumes an annual completion factor of 9 7 percent. A compensation ceiling is to be app lied 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

GREA T LAKES AVIATION, LTD

. ANNUAL COMPENSATION REQUIREMENT FOR ESSENTIAL AIR SERVICE AT CORTEZ, COLORADO

Effective period: August 1, 2010, through Ju ly 3 1 , 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 well

spaced in order to ensure full compensation.

Annual compensation: $1, 847

, 657

Subsidy Rate Per

Arrival /Departure: $ 1,004 1

Weekly Compensation Ceiling: 2 $ 36,144 3

___________________________ 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% com pletion = 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 r ate 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 do es 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 e ligible 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 circumstanc es 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 dete rmining 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

co mmunity.

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 Departme nt 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 subs idy 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 Departmen t 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 Sep tember 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 Governme nt 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.