Order 2011-6-22

Served: June 23, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 23rd day of June, 2011

Essential Air Service at

MUSCLE SHOALS, ALABAMA

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

DOCKET DOT-OST-2000-7856

ORDER REQUESTING PROPOSALS

Summary

By this order, the Department is requesting proposals by July 8 from carriers interested in 

providing essential air service (EAS) at Muscle Shoals, with or without subsidy, for a new rate 

term beginning when the carrier begins full EAS. (See Appendix A for map.)

Background

By Order 2011-3-26, March 18, 2011, the Department selected Gulfstream International 

Airlines (Gulfstream) to replace Mesaba Aviation, Inc., operating as Delta Connection 

(Mesaba), as the subsidized EAS carrier at Muscle Shoals. Gulfstream was to provide three 

nonstop round trips a day to Memphis (18 a week) with 19-seat Beechcraft 1900D aircraft for 

an annual subsidy of $2,553,283. On June 1, Gulfstream notified the Department in writing 

that it was withdrawing its offer to serve Muscle Shoals as a result of failed negotiations to 

obtain a code-share agreement with Delta Air Lines, Inc. (Delta).

Request for Proposals

Since Gulfstream has notified the Department that it will not provide EAS at Muscle Shoals,

we are here requesting proposals from carriers interested in providing service, with or without 

subsidy support, for a new rate term commencing when the carrier inaugurates full EAS. 

Carriers should file their proposals no later than July 8. After that date, our staff will docket 

proposals, thereby making them public, and direct each carrier to serve a copy of its proposal 

on the civic parties and other applicants. Shortly afterwards, we will provide a summary of the 
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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 unrealistic 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 proposals 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 as well as supporting data for their subsidy requests, such as projected block hours, 

revenues and expenses. We strongly encourage clear, well-documented proposals that will 

facilitate their evaluation by the affected community and the Department.2

Proposals should provide sufficient capacity 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. We note that traffic has been increasing 

and averaged 27 enplanements a day during calendar year 2010. Specifically for Muscle 

Shoals, we expect proposals that are consistent with what the community currently receives --

14 nonstop round trips per week with 30- or 34-seat aircraft, with service to Atlanta, Memphis, 

or any hub that offers access to the national air transportation system. For proposals with 19-

seat aircraft, we would expect proposals for three round trips a day (18 a week). We would 

also entertain proposals with 8/9-seat aircraft and additional frequencies. Should the 

community agree to aircraft with fewer than 15 passenger seats, in effect waiving their right to 

15-seat or larger aircraft, we would consider the waiver to apply only to the two-year carrier 

selection at hand, i.e. we would not assume that the community would waive their rights for all 

time. As always, we will formally solicit the community’s views on any service options we 

receive before making a long-term carrier selection decision. 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 attractive 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 airlines submitting proposals.

 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 service can be reliably provided without such 

compensation, we do not proceed with the carrier-selection case. Instead, we simply rely on that carrier’s subsidyfree 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 views. 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 aware 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 provisions.
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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 

should be formatted to be viewed online.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces and nondiscrimination.3 Consequently, all carriers receiving 

Federal 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 subsidy 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 

Analysis at (202) 366-5903. The Department is prohibited from paying subsidy to carriers that 

do not submit these documents.4

Community and State Comments

Civic officials are welcome to submit comments on the proposals at any 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 July 8, the due date for carrier proposals.

This order is issued under authority delegated in 49 CFR 1.56a(f).

ACCORDINGLY,

1. We request that carriers interested in providing essential air service at Muscle Shoals, 

Alabama, submit their proposals, with or without subsidy requests, no later than July 8, 2011. 

The proposals should be emailed to: EAS@dot.gov with the title “Proposal to Provide 

Essential Air Service at Muscle Shoals, Alabama, Docket DOT-OST-2000-7856”;5

2. This docket will remain open until further order of the Department; and

 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 Rights 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) 49 CFR Part 29 – Government-wide debarment and suspension (nonprocurement) 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 regarding filings in response to this order should be directed to Michael Martin at 202-366-6494, or 

via email at michael.f.martin@dot.gov.
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3. The Department will serve a copy of this order on the mayor and airport manager of Muscle 

Shoals, Mesaba Aviation, Inc., operating as Delta Connection, and the service list for this 

Docket.

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

Historical Origin-Destination Plane Traffic1

Muscle Shoals, Alabama

Quarter Year Deplanements Enplanements

Total 

Traffic

Enplanements 

per Day

1 2008 1,009 1,050 2,059 13

2 2008 1,215 1,211 2,426 16

3 2008 1,190 1,209 2,399 15

4 2008 1,552 1,573 3,125 20

Annual 

Totals 4,966 5,043 10,009 16

1 2009 925 942 1,867 12

2 2009 1,094 1,161 2,255 14

3 2009 2,240 2,336 4,576 29

4 2009 2,397 2,455 4,852 31

Annual 

Totals 6,656 6,894 13,550 22

1 2010 1,501 1,562 3,063 20

2 2010 2,071 2,194 4,265 27

3 2010 2,175 2,257 4,432 28

4 2010 2,561 2,661 5,222 33

Annual 

Totals 8,308 8,674 16,982 27

 1 Source: USDOT Bureau of Transportation Statistics, TransStats Intermodal Database, Schedule T-100.
Appendix C

Example of 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 solicitation beyond [DATE]. The 

Department’s obligation for performance under this solicitation beyond [DATE], 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 [DATE], until funds are made available to the Department for performance.

If funds are not made available for performance beyond [DATE], 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.