Order: 2012

- 11

- 13

Served November 15, 2012



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 15 th day of November , 2012

Essential Air Service at

MACON, GEORGIA

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 2007

- 28671



### ORDER ESTABLISHING HOLD

- IN SUBSIDY RATE

Summary By this O rder, the Departme nt of Transportation authorizes compensation to Pacific Wings,

L.L.C. d/b/a Georgia Skies (“Pacific Wings”) for providing Essential Air Service (“ EAS ”) at

Macon

, Georgia, beyond the air carrier’s 90

- day notice of its intent to terminate its unsubsidized

EAS at the community

.

Backgr ound Macon is guaranteed to receive at least a minimum level of air service under the EAS program by virtue of the fact that it appeared on a certificated carrier’s Civil Aeronautics Board

- issued

certificate on October 24, 1978, the date the Airline Deregu lation 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

- 43, issued on June 3 , 2008, the Department selected Pacific Wings to provide EAS at the community for the two

- year period through September 30, 2010, for $1,386,306 annual subsidy

. B y Order 2010

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- 5, issued on October 7, 2010, we extended that rate until further Department action. That service consisted of 26 round trips a week, operated with 9

- seat Cessna 208

- B

aircraft.

On April 26, 2012, Pacific Wings filed a 90

- day notice of its intent to terminate its unsubsidized service at Macon, effective July 26, 2012. By Order 2012

- 5

- 25, issued on May 24, 2012, the Department prohibited Pacific Wings from suspending service at M acon and requested proposals, with subsidy if necessary, from air carriers interested in providing replacement service. In response to that Order, we received two proposals.2

By Order 2012

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- 6, issued on September 6, 2012, the Depa rtment selected Sun Air Express,

L

. L

. C

. d/b/a Sun Air International to provide subsidized EAS at Macon for a two

- year contract. However, r eplacement service will not commence before the end of the current hold

- in period. Therefore, i n accordance with 49 U.S.C. § 41734(c), we must extend the service obligations of Pacific Wings until replacem ent service actually begins

.

By letter dated September 13, 2012, Pacific Wings requested compensation for providing EAS beginning on the 91 st day after it filed its notice to suspend service, i.e. July 26, 2012, and continuing through the hold

- in period. The compensation requested is equal to the compensation agreed upon in the previous carrier

- selection case at Macon, which was conducted unde r competitive conditions. 1

Pacific Wings is eligible to receive compensation on the 91 st day following the air carrier’s letter of intent to cease operation s
, which in this case is July 26, 2012

. Pursuant to 49 U.S.C. § 41734(d), the Department will provide compensation to Pacific Wings until Sun Air

commences service at Macon. W e find both the service and subsidy levels of Pacific Wings to
be reasonable.

This Order is issued under the authority assigned in 14 CFR P art 1.56(a).

ACCORDINGLY,

1. The Department authorizes compensation to Pacific Wings, L.L.C. d/b/a Georgia Skies

, for providing Essential Air Service at Macon, Georgia , as described in Appendix A, from July 26, 2012, until further Department action ;

2

. The Department directs Pacific Wings, L.L.C., d/b/a Georgia Skies

, to retain all books, records, and other source and summary documentation to support subsidy 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 date of service of this 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 air carrier may forfeit its compensation for any claim that is not supported under the terms of this Order ;

3

. D ocket DOT

- OST

- 2007

- 28671 will remain open until further O rder of the Department; and

1 See Order 2008

- 5

- 43, issued on June 3, 2008.3

4

. The Department will serve a copy of this Order on Pacific Wings, L.L.C., d/b/a Georgia

Skies.

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.govAppendix A

PACIFIC WINGS, LLC. d/b/a GEORGIA SKIES ANNUAL COMPENSATION REQUIREMENT FOR ESS ENTIAL AIR SERVICE AT MACON, GEORGIA

Effective period: July 26 , 201 2 , until further Department action.

Service: 26 nonstop round trips per week to Atlanta

Aircraft type: Cessna 208B aircraft (9 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: $1,386,306

Subsidy Rate Per Arrival/Departure: $523 1

Weekly Compensation

Cei ling: 2 $27,196 3

1 Annual compensation of $1,386,306 divided by 2,650 annual arrivals and departures calculated as follows: 52 flights per week x 52 weeks x 98% completion = 2,650.

2 This rate assumes an annual completion factor of 98 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 $523 multiplied by 52 eligible arrivals and departures.Appendix B

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 land ing 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 subsid y. 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 beyon d 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 De partment 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 su bsidy 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 D epartment 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 payme nts 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, 201 2

. The Government's obligation for performance under this order beyond September 30, 201 2 , 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, 201 2 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30, 201 2 , 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.