Order 201 3

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- 06

Served: January 0 8 , 201 3



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 8 th day of January , 201 3

FINAL ORDER

By Order 2012

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- 13 (August 10, 2012), we requested proposals from carriers interested in providing Essential Air Service (EAS) at Pendleton, OR, for a new contract period beginning January 1, 2013. In response, we received proposals from two air carriers

-- SeaPort Airlines, Inc. (SeaPort) and Sovereign Air, Inc. After examining the proposals and soliciting community comments, we decided to accept SeaPort’s proposal for a four

- year contract, but at a slightly lower subsidy level than was requested by SeaP ort. As such, we issued Order

2012

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- 21 (December 28, 2012), tentatively selecting SeaPort and direct ing the involved parties to show cause why we should not make final our award of a four

- year con tract to
SeaPort , to provide subsidized EAS at Pendleton, OR, at the service and subsidy levels

described therein. We gave the parties ten (10) days to file objections or revised proposals. We stated that if no objections or revised proposals were submitted, we would delegate to the

Direct or, Office of Aviatio n Analysis the authority to issue an Order making final the

tentative findings of Order 2012

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- 21.

No objections or revised proposals were received in the time provided. Additionally, SeaPort submitted a statement affirmatively accepting our award at t he lower subsidy level.

This Order is issued under authority delegated by Order 2012

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- 21.

Essential Air Service at

PENDLETON, OREGON

Under 49 U.S.C. 41731 et seq

. Docket DOT

- OST

- 2004

- 19934- 2

-

ACCORDINGLY,

1. We make final our findings as stated in Order 2012

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- 21, and select SeaPort Airlines, Inc., to provided Essential Air Service at Pendleton, OR, for the four

- year period beginning January 1, 2013, at the service and subsidy levels described therein (and as attached to this Order as Appendix A).

2

. The Department directs SeaPort Airlines

, Inc. 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 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. Th e carrier may forfeit its compensation for any claim that is not supported under the terms of this order;

3 . We find that SeaPort Airlines

, Inc. continues to be fit, willing and able to operate as a

commuter air carrier and capable of providing reliable E ssential A ir S ervice at Pendleton, Oregon;

4 . Th is Docket will remain open until further O rder of the Department; and

5

. We will serve copies of this Order on SeaPort Airlines, Inc., Sovereign Air, Inc., the

mayor of Pendleton, OR, and the airport man ager of the Eastern Oregon Regional Airport.

Persons entitled to petition the Department for review of this O rder under the Department’s

Aviation Economic Regulations, 14 CFR Part 385.50, must file such petitions within ten (10) days after the date of service of this O rder.

This O rder will be effective immediately, and the filing of a petition for review shall not preclude its effectiveness.

By:

TODD M. HOMAN Director,

Offic e of Aviation Analysis

(SEAL)

An electronic version of this document is available on the World Wide Web at: http://www.regulations.gov/Appendix A Page 1 of 2

SeaPort Airlines , Inc.
Essential Air Service t o b e Provided at Pendleton, Oregon

Effective Period : January 1, 201 3

, through Dec ember 31 , 201 6

. Scheduled Service : Three daily nonstop round trips between Pendleton and Portland. Intermediate stops and upline

service : No service may be permitted to upline point s on subsidized Pendleton flights. No service to any intermediate point is contemplated under the terms of the carrier’s propo sal; accordingly, no such service may be provided on subsidized flights without prior Department approval. Aircraft type: Cessna Caravan (9 passenger seats). Timing of flights: Flights must be well

- timed and well

- spaced in order to ensure full

compen sation. Annual compensation: $1, 834,708 This rate assumes an annual completion factor of 99 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. Subsidy Rate per Flight : $ 849 per each arrival and departure from Pendleton 1

Wee kly Compensation Ceiling: $3 5,658 2

1 2,184 scheduled annual arrivals/departures x 99% completion factor = 2,162 annual arrivals/departures. $1,834,708 divided by 2,162 arrivals/departures = $849.

2 $849 per arrival/departure x 42 arrivals/departures per week.Appendix A Page 2 of 2

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 subsi dy 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 o rder 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 o f 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 m ust 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 ly , 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 se rvice 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 par tial 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 March 31, 2013 . The Department’s obligation for performance unde r this order beyond March 31, 2013 , is subject to

the avai lability 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 March 31, 2013 , until funds are made available to the Department for performance. If funds are not made available for performance beyond March 31, 2013 , 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.