Order 20 10

- 8

- 3 Served: August 2 , 20 10



### UNITED STATES OF A MERICA DEPA RTMENT OF TRA NSPORTA TION OFFICE OF THE SECRETA RY WASHINGTON, D.C.

Issued b y the Department of Transportation on the 2 nd day

of August , 20 10 Essential Air Service at

LEBA NON, NH/WH ITE RIVER JUNCTION, VT

Under 49 U.S.C. 41731 et seq

. DOCKET DOT - OST - 2003 - 14822



### ORDER REQUESTING PROPOSA LS Summary By this order, the Department is requesting proposals , by August 27 , from carriers interested in providing essential air service ( EAS) at Lebanon , for a new two

- ye ar period beginning December 1 , 20 10 , with or without subsidy

. (See Appendix A for map.) Background By Order 2008

- 7

- 27 , July 25 , 200 8 , the Department selected Hyannis Air Service, Inc. d/b/a Cape Air (Cape A ir) to provide EAS at Lebanon for the two

- ye ar period through Nov ember 3 0 , 20 10 . That order established an annual subsidy rate of $ 2 , 245 , 669, for s ervice consist ing of six daily nonstop round trips (42 round trips per week ) between Lebanon and Boston International Airp ort , with 9

- seat Cessna 402 aircraft

. On February 5, 2010, Cape Air requested permission to alter Lebanon’s service pattern b y eliminating two of its six daily nonstop round trips to Boston and replacing them with two daily nonstop round trips to Westches ter County Airport in White Plains, New York. By

Order 2010

- 2

- 21, with the full support of the community , the Department granted Cape Air’s request. Request for Proposals As the end of the current rate term approaches, in order to provide sufficient time to complete the carrier

- selection process before the current contract expires, we are here requesting proposals from carriers interested in providing service at Le banon , with or without subsidy support, for the two

- ye ar period beginning December 1, 20 10

. Carriers should file their proposals no later than August 27 . After that date , our staff will docket proposals, thereb y making them public, and- 2

-

direct each carrier to serve a cop y of its proposal on the civic parties and other applicants. Shortly afterw ards, we will provide a summary of the proposals to community officials and ask them to submit their final comments. We will give full consideration to all proposals filed in a timely manner. 1 Interested carriers should prepare their proposals with every expectation that their initial proposals will also be their final and only proposals. 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 unrealist ic proposals and solicit a new round of proposals. We are here providing interested carriers with some basic information to serve as guidance when they prepare their proposals, but we will not prescribe a precise format for their proposals. We expect pro posals 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 present; however, they might want to include proposed schedules a s well as supporting data for their subsidy requests, such as projected block hours, revenues and expenses. We strongl y encourage clear, well

- documented proposals that will facilitate their evaluation by the affected community

and the Department. 2 Propos als should provide sufficient capacit y to accommodate historical levels of traffic. In order to assist carriers in developing traffic and revenue projections for their proposals, there is a summary of historical passengers in Appendix B. Specificall y for Lebanon , we expect proposals that are consistent with what the community currently receive s ( six daily

round trips with nine

seat aircraft)

. We note that EAS at Lebanon calls for service with 15

- seat aircraft. However, during the current tw o - ye ar contra ct, the community approved the service with nine

- seat aircraft

. For carrie rs proposing 19

- seat aircraft, we expect proposals for three round trips a day (1 8 per week) , or two round trips a day (12 per week) with larger aircraft

. Service should be to Bost on, or an y hub that offers access to the national air transportation system. Carriers are also welcome to propose more than one option, if they choose; they

need not limit themselves to those requirements if they

envision other, potentially more attractiv e service possibilities

-- different hubs, frequency

or equipment, for example

-- with subsidy requirements that remain competitive. The community 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 s submitting proposal s
.

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

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

free service as proposed. 2 In selecting a carrier to provide subsidized essential air service, 49 U .S.C. 41733(c)(1) directs us to consider four factors: (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub; (3) interline arrangements with a larger carrier at the hub; and (4) community vie ws. 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. Interested carriers should also be aw are that our general provisions governing EAS will be included in the selection order as part of our authorization of subsidy for the selected service. Appendix C of this order contains those general provisi ons.- 3

-

T he Airport Manager of Lebanon Municipal Airport has indicated that the airport has met and continues to meet FAA Part 139 Class I requirements. He also notes that the FAA recentl y reclassified Lebanon to Part 139 Class IV, as the current nine

- seat aircraft serving the airport do not warrant Class I status. H owever, he stated that the FAA would upgrade its classification to Class I if the EAS contract was awarded for larger aircraft

. New Filing Procedures Carrier proposals should be submitted to the Department with all materials merged into a single document. In addition, because the document will be published on Regulations.gov, each page s hould be formatted to be viewed online. Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobb yi ng activities, drug

- free workplaces and nondiscrimination. 3 Consequently , all carriers receiving Fe deral subsidy

to support essential air service must certify that they are in compliance with Department regulations regarding drug

- free 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. All carriers that plan to submit proposals involving subsid y should submit the required certifications along with their proposals. Interested carriers requiring more detailed information regarding these requirements, as well as copies of the certifications, should contact the Office of Aviation Analy sis at (202) 366

- 5903. The Department is prohibited from paying subsidy to carriers that do not submit these docum ents. 4 Community and State Comments Civic officials are welcome to submit comments on the proposals at an y time. As noted earlier, we will provide a summary of the proposals to the civic parties and ask them to submit their final comments shortly

after August 27 , the due date for carrier proposals. This order is issued under authority delegated in 49 CFR 1.56a(f) and re

- delegated to the Director, Office of Aviation Analy sis. AC CORDINGLY, 1. We request that carriers interested in providing essential air service at Lebanon, NH/White River Junction, VT , submit their proposals, with or without subsidy requests, no later than August 27 , 20 10 . The proposals should be emailed to: EAS@dot.gov with the title “Proposal to Pro vide Essential Air Service at Lebanon, NH/White River Junction, VT , Docket DOT

- OST

2003

- 14822 ” ; 5

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

– New restrictions on lobbying; (2) 49 CFR Part 21

– Nondiscrimination in federally

- assisted programs of the Department of Transportation

– Effectuation of title VI of the Civil Rig hts 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) 4 9 CFR Part 29

– Government

- wide debarment and suspension (non

procurement) and government

- wide requirements for drug

- free workplace (grants). 4 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html. 5 Questions r egarding filings in response to this order should be directed to Renée Williams at 202

- 366

- 1058, or via email at renee.williams@dot.gov . Parties may call 202

- 366

- 5903 to confirm receipt of their EAS proposals

.- 4

-

2. This docket will remain open until further order of the Department; and 3. The Department will serve a cop y of this order on the mayor and airport manag er of Lebanon , Hyannis Air Service, Inc. d/b/a Cape Air , and the parties listed in Appendix D. Persons entitled to petition the Department for review of this order under the Department’s Aviation Economic Regulations, 14 CFR 385.50, must file such petitio ns within ten (10) day s after the date of service of this order. This order will be effective immediately , and the filing of a petition for review shall not preclude its effectiveness. By :

TODD M. HOMAN Director Office of Aviation Anal ysis (SEAL) A n electronic version of this document is available on line at www.regulations.gov

### Appendix A 

## Area Map

### Appendix B

### Appendix C

General Terms and Conditions for Essential A ir Service The carrier understands that it may forfeit its compensat ion for an y 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 carrie r 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 comp leted 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. I f 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 Analy sis 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 safel y operated; flights that overfl y points for lack of traffic wil l not be compensated. In determining whether subsidy pay ment 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 sy stem provided to the community

. If the Department unilaterally , either partially or completely , terminates or reduces pay ments 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 pay ments 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 adj ustments 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 pay ment. Subsidy contracts are subject to, and incorporate by reference, r elevant 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 performan ce 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 pay ment for services can be made. No legal liabili ty

on the part of the Government for any pay ment 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, 2 010, the carrier will receive notice in writing b y the Department. All claims for pay

ment must be submitted within 60 day s of the last day of service provided under this order.

### Appendix D Scheduled Air Carriers, Contiguous US and Puerto Rico Air Greco/Wings Air Air Sunshine, Inc. Air Sunshine, Mirmohammad Adili Air Wisconsin, Annette Daly Air Wisconsin, Jim Rankin Airline Associates, Bill Mishk Alaska Airlines, Jeff Cole Alaska Airlines, Sandy Sinick Allegiant Air, Brian Davis American Airlines, Carl Ne lson American Eagle, Jeffrey Hartz Bemidji Aviation, Cori Rude Bemidji Aviation, Arlen Rinkenberger Cape Air, Andrew

Bonney Cape Air, Dan Wolf Cape Air, J.Flaherty Colgan Air, Kevin Scott Colgan Air, Mike Colgan CommutAir, Andy Price CommutA ir, Joel Raymond Consultant, Robert Silverberg Continental, Bruce Keiner Continental, Dan Weiss Continental, Lorry Halloway Delta, Anthony Canitano Delta, Dan Shuman Delta, Jeff Morgan Delta, Joe Esposito Delta, Karen Zachary Delta, Kristal Murphy Delta, Sascha Vanderbellen DHS, Bill Ragan DHS, David Bernier Era Aviation, Mike Lenorman Executive Airlines, Kate Soled Frontier Flying, Bob Hajducovich GemAir/Salmon Air, Dan Schroeder GemAir/Salmon Air, JoAnn Wolters Great Lakes, Chuck How ell Great Lakes, Doug Voss Great Lakes, Greg Stephens Gulfstream, Dave Hackett Gulfstream, Mickey Bowman Gulfstream, T. Cooper Horizon Air, Dan Russo Horizon Air, Jennifer Thompson Horizon Air, Mike McQueen Horizon, Jeff Cole ICEPR, Luis Irizarry Intrepid Interntl Air, Rick Eyk Island Air Charters, Linda House Jet Air, Daniel Wolford Kenmore Air, Tim Brooks Mesa Air, Michael Lotz Mesaba, John Spanjers Mesaba, Max Shemesh Midw est Airlines, Greg Aretakis MN Aviation, Jose Maldonado M ulti Aero, Darnea Multi Aero, Shane Storz Northwest Airlines, Aaron Murray Northwest, Tim McDonald NYDC, Henok Araya OST, Brian Swanson OST, Dennis DeVany OST, Kevin Adams OST, Kevin Schlemmer OST, Michael Martin OST, Renee Williams Pacific Win gs, Greg Kahlstorf PenAir, Danny Seybert PenAir, Scott Bloomquist Pinnacle Airlines, Joe Williams Pinnacle Airlines, Phil Reed Planemasters, Inc., John Kessler Planemasters, Inc., Paul Berliner Planemasters, Inc., Todd DeSimone Public Charters, Ji m Gallagher Scenic, Mary Schneider Scenic, Mitzi Daines SeaPort/Wings of Alaska, Jim Day SeaPort/Wings of Alaska, Nate Vallier Seaport/Wings of Alaska, Rob McKinney Shuttle America, Jerry Balsano SkyWest, Eric Christensen SkyWest, Michael Thompso n SkyWest, Steve Hart Sovereign Air, Bob Karns Sovereign Air, Lois R. Barton Tradewind, Eric Zipkin Trans States, Fred Oxley Trans States, Gerry Wigmore United, Alicia Gabriel United, James Starnes US Airways, Benjamin Slocum US Airways, How ard Kass US Airways, Jason Reisinger Warbelows Air Ventures, Art Warbelow