Order 2013-1-06

Served: January 08, 2013

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 8th day of January, 2013

FINAL ORDER

By Order 2012-8-13 (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 SeaPort. As such, we issued Order 

2012-12-21 (December 28, 2012), tentatively selecting SeaPort and directing the involved 

parties to show cause why we should not make final our award of a four-year contract 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 

Director, Office of Aviation Analysis the authority to issue an Order making final the 

tentative findings of Order 2012-12-21. 

No objections or revised proposals were received in the time provided. Additionally, SeaPort 

submitted a statement affirmatively accepting our award at the lower subsidy level.

This Order is issued under authority delegated by Order 2012-12-21.

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 2012-12-21, 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. The 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 Essential Air Service at Pendleton, 

Oregon;

4. This Docket will remain open until further Order 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 manager of the Eastern Oregon Regional Airport.

Persons entitled to petition the Department for review of this Order 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 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 on the World Wide Web at:

http://www.regulations.gov/
Appendix A

Page 1 of 2

SeaPort Airlines, Inc.

Essential Air Service to be Provided at Pendleton, Oregon

Effective Period: January 1, 2013, through December 31, 2016.

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

Intermediate stops and upline 

service: 

No service may be permitted to upline points on subsidized 

Pendleton flights. No service to any intermediate point is 

contemplated under the terms of the carrier’s proposal; 

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 

compensation.

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 Pendleton1

Weekly Compensation 

Ceiling:

$35,6582

 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 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 order beyond March 31, 2013. The 

Department’s obligation for performance under this order beyond March 31, 2013, 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 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.