Order 2014-8-10

Served: August 14, 2014

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 14th day of August, 2014

ORDER REQUESTING PROPOSALS

Summary

By this Order, the Department is requesting proposals from carriers interested in providing 

Essential Air Service (EAS) at any or all of the four communities captioned above for a new 

contract period beginning February 1, 2015, with or without subsidy. (See Appendix A for a 

service area map). Carriers should file their proposals no later than September 17, 2014.

Background

On September 11, 2012, the Department issued Order 2012-9-11, selecting SkyWest Airlines 

(SkyWest), operating with a Delta Air Lines, Inc. (Delta) code-share, to provide subsidized EAS 

between each of the four communities captioned above and the Minneapolis-St. Paul 

International Airport (MSP). The annual subsidy rates for each community under that Order are: 

$2,512,971 at Iron Mountain/Kingsford (Iron Mountain), $1,519,619 at Rhinelander, $1,356,764 

at Brainerd, and $1,107,900 at International Falls. The four communities have a combined 

annual subsidy rate of $6,497,254.

Request for Proposals

As the expiration of the current rate-term approaches, we are here requesting proposals from 

carriers interested in providing EAS at any or all of these communities, with or without subsidy, 

for a new rate-term beginning February 1, 2015. Carriers should file their proposals no later than 

September 17, 2014. Staff will then docket proposals, thereby making them public, and shortly 

afterwards will provide a summary of the proposals to the communities and ask them for their 

Essential Air Service at

IRON MOUNTAIN/KINGSFORD, MICHIGAN

BRAINERD, MINNESOTA

INTERNATIONAL FALLS, MINNESOTA

RHINELANDER, WISCONSIN

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

 DOT-OST-1999-5175

 DOT-OST-2011-0135

 DOT-OST-2009-0304

 DOT-OST-2011-0109
final comments. We will give full consideration to all proposals that are filed in a timely 

manner.1

Interested carriers should prepare their proposals with every expectation that their initial 

proposals will represent their final and only proposals. However, 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 re-solicit a new round of proposals. 

However, negotiation and rejection are only occasional exceptions to the rule.

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 communities and the Department.2

Specifically, we expect proposals to Minneapolis-St. Paul, Detroit, Chicago O’Hare, or any other 

large or medium hub airport offering numerous connections to the national air transportation 

system at service levels consistent with what the communities currently receive, as outlined in 

the table below:

 1 Carriers should not expect the Department to accept late fillings. 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 typically do not proceed with the carrier-selection case. Instead, we usually rely on that carrier’s 

subsidy-free service as proposed.

2 In selecting a carrier to provide subsidized EAS, 49 U.S.C. 41733(c) (1) directs us to consider five factors: (a) 

service reliability; (b) contractual and marketing arrangements with a larger carrier to ensure service beyond the 

hub; (c) interline arrangements that the applicant has made with a larger carrier at the hub; (d) community views, 

giving substantial weight to the views of the elected officials representing the users; and (e) the carrier’s plan to 

market its service to the community. In addition, the Continuing Appropriations Act, 2014, Public Law No. 113-46,

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 B of this Order contains those general provisions.
Community Round Trips per 

Week1 Aircraft Enplanements per Day2

Iron Mountain, MI 13 

(7 nonstop, 6 one-stop) 50-seat CRJ-200 30.1

Rhinelander, WI 14 nonstop 50-seat CRJ-200 64.4

International Falls, MN 12 

(7 nonstop, 5 one-stop) 50-seat CRJ-200 42.3

Brainerd, MN 12 nonstop 50-seat CRJ-200 47.7

Notes: 1. This is the current level of service. We expect similar levels of service to be proposed 

for the new term.

 2. Source – US DOT Bureau of Transportation Statistics, Form T-100 Market Report for 

YE 6/30/2014. Based on origin and destination passengers divided by 2 (for two 

directions), divided by 313 service days, where each weekend is equal to one service 

day.

The communities 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 communities and meets the operational 

need of the airline interested in submitting a proposal. In addition, carriers should be very clear 

as to whether a specific community’s proposal is on a stand-alone basis, or whether it is part of a 

larger, inseparable package with other communities.

Service and Traffic History

In order to assist carriers in developing traffic and revenue projections for their proposals, we 

have summarized passenger traffic in the table above. For the year ended June 30, 2014, Iron 

Mountain averaged approximately 30.1 enplanements a day, Brainerd, 47.7, International Falls, 

42.3, and Rhinelander, 64.4.

Filing Procedures

Carrier proposals should be submitted to the Department with all materials compiled into a single 

document. In addition, because the document will be published on http://www.regulations.gov/, 

each page should be formatted to be viewed online and for easy printing.

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 for 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. Because the Department is 

prohibited from paying subsidy to carriers that do not submit these documents, all carriers that 

plan to submit proposals involving subsidy should be aware that the selected carrier will be 

 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 (non-procurement) and government-wide requirements for drug-free workplace (grants).
required to complete the required certifications. Interested carriers requiring more detailed 

information regarding these requirements should contact the Office of Aviation Analysis at 

(202) 366-5903.4

Community and State Comments

The communities and States are welcome to submit comments at any time. We encourage 

prospective applicants to contact the communities before they submit their proposals so that they 

can tailor them to the communities’ needs, as they will not be able to amend them after the due 

date. 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 September 17, the deadline for carrier 

proposals.

This Order is issued under authority delegated in 49 CFR 1.25a(b) and re-delegated to the 

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We request that carriers interested in providing Essential Air Service at Iron 

Mountain/Kingsford, Michigan, Brainerd and International Falls, Minnesota, and/or

Rhinelander, Wisconsin, submit their proposals, with or without subsidy requests, no later than 

September 17, 2014. The proposals should be e-mailed to: EAS@dot.gov with the title 

“Proposal to Provide Essential Air Service at Iron Mountain, Brainerd, International Falls, 

and/or Rhinelander,”;5

2. These Dockets will remain open until further order of the Department; and

3. We will serve copies of this Order on the mayors of Iron Mountain and Kingsford, Michigan, 

Brainerd, Minnesota, International Falls, Minnesota, Rhinelander, Wisconsin, the airport 

managers at Ford Airport (Iron Mountain/Kingsford), Brainerd Lakes Regional Airport, Falls 

International Airport, and Rhinelander/Oneida County Airport, and the service list for this 

docket.

 4 The certifications are also available on the web at http://www.dot.gov/policy/aviation-policy/small-communityrural-air-service/essential-air-service. 5 Questions regarding filings in response to this Order may be directed to A.J. Muldoon at (202) 366-1058 or 

albert.muldoon@dot.gov. 
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 petitions within seven (7) days 

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 Analysis

(SEAL)

An electronic version of this document is available online at

www.regulations.gov
Appendix A

AREA MAP

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

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 complete, 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 may not be available for performance under this Order beyond [DATE]. The 

Government’s obligation for performance under this Order beyond [DATE], is subject to the 

availability of 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 sufficient funds 

are not made available for performance beyond [DATE], the Department will provide notice in 

writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the 

last day of the month for which compensation is being claimed. For example, claims for service 

provided in July must be filed by October 31st; August claims must be submitted by November 

30th, and so on.