Order: 2012-7-17

Served: July 13, 2012

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 13th day of July, 2012

Essential Air Service at

VICTORIA, TEXAS DOCKET DOT-OST-2005-20454

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

ORDER SELECTING CARRIER

Summary

By this Order, the Department is selecting Sun Air Express, LLC d/b/a Sun Air 

International (Sun Air) to provide Essential Air Service (EAS) at Victoria, Texas

(Victoria), for an annual subsidy of $2,294,036.

1

 Service to be provided will be four 

weekday and four weekend nonstop round trips (24 a week) to George Bush 

Intercontinental Airport (Houston) using 9-passenger, twin-engine Piper Chieftain aircraft

for the two-year period beginning when the carrier commences full EAS.

Background

By Order 2011-5-7, May 5, 2011, the Department selected Colgan Air, Inc., operating as 

Continental Connection (Colgan), to provide EAS at Victoria with 13 nonstop round trips 

per week to Houston for an annual subsidy of $1,856,692, from July 1, 2011, through 

June 30, 2013. Continental Airlines was subsequently merged with United Airlines and, in 

late 2011, Continental Connection service was rebranded as United Express (Colgan).

 1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated 

funds.
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On March 8, 2012, Colgan filed 90-day notices of its intent to terminate subsidized service 

at seven EAS communities, including Victoria. The Department issued Order 2012-3-14,

March 23, 2012, requesting proposals. In response, we received only one proposal for 

Victoria, that from SeaPort Airlines, Inc. (SeaPort), which proposed service with singleengine aircraft. On May 14, 2012, the community submitted comments refusing to waive 

their right to twin-engine aircraft and requested that we rebid the case. Given that 49 

U.S.C. Section 41732(b)(5) entitles communities to EAS with twin-engine aircraft, we 

rejected SeaPort’s proposal and issued Order 2012-5-16, May 17, 2012, soliciting a second 

round of proposals. In response to that Order, we received proposals from SeaPort and 

Sun Air.

Each airline’s complete proposal and the community’s comments may be accessed online 

at http://www.regulations.gov/ by entering DOT-OST-2005-20454 in the search block. 

Proposal of SeaPort

SeaPort proposes two options, both serving Houston with four weekday and four weekend

round trips (24 a week). Option 1 would use 9-passenger, single-engine Cessna Caravan 

aircraft for an annual subsidy of $1,844,889, while Option 2 proposes to use 9-passenger 

twin-engine Piper Chieftain for an annual subsidy of $1,870,444.

Proposal of Sun Air

Sun Air proposes four weekday and four weekend round trips (24 a week) to Houston 

using 9-passenger, twin-engine Piper Chieftain aircraft for an annual subsidy of 

$2,294,036. 

Community Comments

Mr. Jason Milewski, Managing Director for Victoria Regional Airport, submitted 

comments on June 18, 2012, summarizing his community’s views on this air carrier 

selection case:

After careful consideration and much public discussion regarding the Essential Air Service 

proposals for Victoria Regional Airport, we are recommending Sun Air for commercial air service. 

Although both proposals were well thought out, we feel that the added benefit of Sun Air having full 

interline agreements with the major, legacy carriers will offer a more fluid and better connections to 

the national and international air transportation system. It is primarily for this reason that we are 

choosing Sun Air over SeaPort. The ability for our passengers to book a single ticket and have their 

baggage arrive at their ultimate destination more closely matches the service we have now and we 

feel that it will be less disruptive for our existing air travelers. 

Decision

After reviewing both airlines’ proposals and taking into account the community’s 

comments, the Department has decided to select Sun Air. While we are concerned by the 

significantly higher subsidy required by Sun Air compared to SeaPort, we also recognize 

that neither proposal put forth by SeaPort or Sun Air would maintain current service levels 

at Victoria and, as a result, the community will see a large service reduction. Victoria has 

been receiving branded service with Colgan’s 34-passenger, cabin-class aircraft, under 

either a Continental Airlines or United Airlines code-share agreement. Neither SeaPort 
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nor Sun Air would provide these amenities. Furthermore, neither airline meets all four 

criteria for selecting an EAS carrier contained in 49 U.S.C. Section 417339(c).2

 Under 

these circumstances, we will give greater deference to the community views. The 

community supports Sun Air’s proposal and specifically mentions the airline’s full 

interline agreements with major airlines, which may mitigate the effects of the reduction in 

capacity and provide Victoria passengers seamless connections beyond the Houston hub to 

the national air transportation system.3 In addition, we find the service and subsidy levels

proposed by Sun Air to be responsive to our Request for Proposals.

We shall make this selection of Sun Air at Victoria contingent upon the Department’s 

receiving properly executed certifications from the air carrier that it is in compliance with 

the Department’s regulations regarding drug-free workplaces and nondiscrimination, as 

well as the regulations concerning lobbying activities.4

Service Transition

Colgan terminated its entire Houston operation on June 30, 2012. Since Victoria is without 

air service, we expect Sun Air to work with the community on a mutually agreed upon start 

date for full EAS as soon as possible. In addition, United Airlines has assured us that it 

has, or will have, contacted all passengers holding reservations for travel after June 30 to 

assist those passengers in making alternate air transportation arrangements, or to provide a 

refund of the ticket price, without penalty, if requested. 

Carrier Fitness

49 U.S.C. Sections 41737(b) and 41738 require that we find an air carrier fit, willing, and 

able to provide reliable service before we may subsidize it to provide EAS. The 

Department recently found Sun Air fit to conduct scheduled passenger operations as a 

commuter air carrier and no information has come to our attention that would cause us to 

question the airline’s fitness to provide EAS in this market at this time. We therefore 

conclude that the airline is reliable and fit to conduct operations proposed here. 

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

ACCORDINGLY,

1. We select Sun Air Express, LLC d/b/a Sun Air International to provide Essential Air 

Service at Victoria, Texas, contingent upon it receiving full operating authority from both 

the Department and Federal Aviation Administration. We establish an annual subsidy rate

as described in Appendix C;

 2 In selecting an airline to provide EAS, we are required to base our decision on the four carrier-selection 

criteria contained in 49 U.S.C. §41733(c), in addition to its proposed subsidy level: 1) the demonstrated 

reliability in providing scheduled air service; 2) the contractual and marketing arrangements with a larger 

airline to ensure service beyond a hub airport; 3) interline agreements with a larger airline; and 4) support by 

the community’s elected officials for the applicant’s proposal.

3 Sun Air met with Victoria community officials and stated they are close to finalizing arrangements to 

provide passengers with interline access on their service.

4 The certifications are available on the Web at http://ostpxweb.dot.gov/aviation/index.html.
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2. We direct Sun Air Express, LLC d/b/a Sun Air International 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 the Department. Such documentation shall be retained 

for seven years from the service date 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 carrier may forfeit its compensation for any claim that is 

not supported under the terms of this Order;

3. We find that Sun Air Express, LLC d/b/a Sun Air International is fit, willing and able to 

operate as a commuter carrier, and capable of providing reliable Essential Air Service at 

Victoria, Texas;

4. These dockets will remain open pending further Department action; and

5. We will serve copies of this Order on the Mayor and Airport Manager of Victoria, 

Texas, Sun Air Express, LLC d/b/a Sun Air International, SeaPort Airlines, Inc., and 

Colgan Air, Inc.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at

http://www.regulations.gov
Appendix A

AREA MAP

Maps generated by the Great Circle Mapper - copyright © Karl L. Swartz.

 
 Appendix B
 Appendix C

Sun Air Express, LLC d/b/a Sun Air International

Essential Air Service to be Provided at Victoria, Texas

Effective Period: Beginning with full EAS through the end of the 24th month thereafter

Scheduled Service: 24 weekly nonstop round trips to George Bush Intercontinental Airport 

(Houston)

Aircraft: 9-passenger, twin-engine Piper Chieftain

Rate per Eligible Flight: $9381

Weekly Ceiling for each community: $45,0242

Note: 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 this rate, 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 service levels, the carrier may cease to provide service to that 

specific location without regards 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 contract 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, 2012. The Government’s 

obligation for performance under this Order beyond September 30, 2012, is subject to 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, 2012, until funds are made available to the Department for 

performance. If funds are not made available for performance beyond September 30, 2012, the Department will provide 

notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of service provided under this Order.

 1 Annual compensation of $2,294,036 divided by 2,446 annual departures (48 weekly departures x 52 weeks x 98 

percent completion). 2 48 arrivals and departures per week multiplied by $938 per flight.