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All: Swanson, Brian (OST) Friday, May 04, 2012 11 :53 AM 'khuber@ lancasterairport.com'; 'deberly@ lancasterairport.com'; 'pridenour@washco-md.net'; 'glarsen @washco-md.net' ?ii17 Devany, Dennis (OST); 'David Hackett'; 'tlcooper@gosunair.com'' ., • Soliciting Comments on Proposal for EAS at Hagerstown, Maryland, and Lancaster, Pennsylvania

- Due May 24, 2012

I would like to update you onthe Essential Air Service (EAS) situation at Hagerstown, Maryland, and Lancaster, Pennsylvania, and give you an opportunityto submit comments ifyou wish.
In response to the FAA Modernization and Reform Act of2012 (P. L. 112-95), which, among other things, extended both communities' eligibility for subsidized EAS through September 30, 2015, and because no proposals were submitted in response to Order 2012-2- 13 (the first request for EAS proposals at the two communities), the Department issued Order 2012-3-16 onMarch 23, 2012, soliciting a second-round ofproposals at either or both ofthe communities, through September 30, 2015.
SunAirExpress, LLC d/b/a SunAir International (SunAir) was the only carrier to submit a proposal. However, there are two options for your consideration, and we want to give you an opportunityto submit any comments for the record that you mayhave before we make a recommendation to the Assistant Secretary for Aviation and International Affairs. Copies ofthe proposal maybe accessed online through the Federal Docket Management System at: http://www.regulations.gov, bydoing a "search" onDockets DOT-OST-2006- 25228 (Hagerstown) orDOT-OST-2002-11450 (Lancaster). For your convenience, Sun Air's proposal is briefly summarized below.
SunAir submitted an inseparable proposal forboth communities utilizing nine passenger twin-engine Piper Chieftain aircraft with service to either Baltimore/Washington International Thurgood Marshall Airport (BWI) orWashington Dulles International Airport (lAD). At Hagerstown, the carrier would provide 24 nonstop round trips a week to BWI for an annual subsidy requirement of$1,724,486, or to lAD for $1,785,638. At Lancaster, the carrierproposed to provide 30 nonstop round trips a week to BWI for an annual subsidy rate of$2,350,403, orto lAD for $2,504,174. We note that Sun Air, a registered air taxi operator, does not currently have the requisite operating authorities from either the Department orthe Federal Aviation Administration to provide scheduled

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passenger operations more than four round trips per week between two ormore points according to a published schedule. While Sun Airhas submitted an application for the necessary economic authority to allow it to engage in more than the four round trips per week as described above, that application is still pending before the Department.
Please notethat the average passenger fares shown in each proposal do not necessarily reflect the average local fare passengers would actually pay, but, rather, reflect a prorated portion ofthe total ticket price (e.g., Hagerstown- BWI- Atlanta ticket) that the subsidized carrier would realize. Also, the fare shown is net ofcertain charges such as Federal transportation security fees, excise orticket taxes, and Passenger Facility Charges. Ofcourse, carriers have the discretion to charge fares they deem appropriate, and the passenger fares presented in their proposals have been developed for subsidyrate computation purposes only. Based onthe cost elements incorporated in the carriers' computation summaries, the carriers would have to realize passenger fares comparable to the averages shown intheirproposals in order to achieve break-even or profitable operations without subsidy.
You should also note that the carrier's schedule may change to reflect changing conditions (e.g., to better meet shifting connecting bank times at the hub). The Department does expect subsidized air carriers to maintain well-timed and well-spaced flights in order to ensure full compensation.
We request that you submit any comments you mayhave as soon as possible, but in any case no laterthan May 24, 2012. Please send your comments by fax to 202-366-7638 or byemail to both dennis.devany@dot.gov and brian.swanson@dot.gov. Ourrules require that you send your comments to the applicant as well. Ifyou have any questions, or need more time to reply, please feel free to contact Brian Swanson ofmy staffat 202-366- 5392.
Sincerely,

Dennis J. DeVany Chief, Essential Air Service Division, X-53 Office ofAviation Analysis

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