Order 2011-12-6

Served: December 14, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 14th of December, 2011

Essential Air Service at

DEVILS LAKE, NORTH DAKOTA

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

DOCKET OST-1997-2785

ORDER MAKING SHORT-TERM CARRIER SELECTION

Summary

By this Order, the Department is selecting Great Lakes Aviation, Ltd. (Great Lakes) to provide 

Essential Air Service (EAS) at Devils Lake, North Dakota, for an annual subsidy of $2,797,467, 

effective with the start of service by Great Lakes. We anticipate that Great Lakes will start 

service on or about December 17, 2011. This Order will remain in effect until further 

Departmental action.1

Background

By Order 2009-8-6, we selected Mesaba Aviation, Inc., and Pinnacle Airlines, d/b/a Delta 

Connection (Delta), to provide EAS at Devils Lake through September 30, 2011. The annual 

subsidy level was $1,459,493 for two round trips per day to Minneapolis operated with a mixture 

of one-stop and nonstop service, with 34-seat Saab 340 aircraft. 

On July 15, 2011, Delta filed 90-day notices of intent to suspend service at Devils Lake, as well 

as at 23 other EAS communities, effective October 13, 2011.2 By Order 2011-9-5, we 

prohibited Delta from terminating service at Devils Lake and requested proposals for 

replacement service by October 21, 2011. We received timely filed proposals from two carriers, 

Great Lakes and Sovereign Air.

 

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

2 This order addresses only Devils Lake.
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Subsequent Developments

Effective November 30, 2011, Delta retired the last of its Saab 340 aircraft and planned to 

backfill its Saab service with 50-seat Canadair Regional Jets (CRJ). However, because the

runway is not long enough for CRJs to land safely except in ideal weather conditions, Delta has 

been unable to provide reliable service. In fact, for the week of December 12-16, 2011, Delta

has cancelled all flights into and out of Devils Lake and is reaccommodating passengers by 

busing them to nearby Grand Forks, to board another Delta flight there.

Decision

Devils Lake has received almost no air service since December 1, 2011, so immediate action is 

warranted. The only proposals that we received were from Great Lakes and Sovereign. However, 

Sovereign does not have the requisite operating authority from either the Federal Aviation 

Administration or the Department, and, because time is of the essence here, we did not pursue 

replacement service with Sovereign. 

Great Lakes’ initial proposal does not meet the criteria set out in the Department’s Request for 

Proposals in that it proposed two round trips a day instead of the three round trips that we requested. 

Given the time urgency caused by the lack of service at Devils Lake, however, we decided to forego 

soliciting another round of proposals or negotiations with Great Lakes, which could become 

protracted, and instead requested that Great Lakes submit a short-term, stopgap proposal that could 

be implemented quickly, on an interim basis. In response, Great Lakes proposes to operate two daily 

(14 per week) nonstop round trips to Minneapolis with 19-seat B 1900D aircraft, for an annual 

subsidy rate of $2,797,467, and is making every effort to inaugurate the service on December 17, 

2011. We recognize that the community wants more than two round trips per day. While we will 

work with Great Lakes to secure an additional round trip in the near future, our principal concern is 

securing reliable service as soon as possible. We have contacted the community, and the Mayor of 

Devils Lake has indicated that this solution is acceptable on a temporary basis.

Certifications

We shall make these selections contingent upon the Department’s receipt of properly executed 

certifications from Great Lakes that it is in compliance with the Department’s regulations 

regarding drug-free workplaces and nondiscrimination, as well as the regulations governing 

lobbying activities.

Carrier Fitness

49 U.S.C. 41737(b) requires that we find an air carrier fit, willing, and able to provide reliable 

service before we may subsidize it to provide Essential Air Service. Great Lakes is subject to the 

Department’s continuing fitness requirements, and no information has come to our attention that 

would cause us to question the carrier’s fitness at this time. We have contacted the Federal 

Aviation Administration, and it has raised no concerns that would negatively affect our fitness 

finding. We therefore conclude that the carrier remains fit to conduct the operations proposed 

here.

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

1. We select Great Lakes Aviation, Ltd., to provide Essential Air Service at Devils Lake, North 

Dakota;

2. We set the final rates of compensation for Great Lakes Aviation, Ltd., for the provision of 

Essential Air Service at Devils Lake, North Dakota, as described in Appendix C;

3. We direct Great Lakes Aviation, Ltd., 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 it begins 

providing Essential Air Service 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;

4. We find that Great Lakes Aviation, Ltd., continues to be fit, willing and able to operate as a 

commuter carrier and capable of providing reliable Essential Air Service at the these 

communities;

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

6. We will serve copies of this Order on the Mayors and Airport Managers of Devils Lake, 

North Dakota.

By:

Susan Kurland

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
Appendix A

Nonstop Great Circle Miles 

Devils Lake (DVL) to Minneapolis (MSP) 351

Jamestown (JMS) to Minneapolis (MSP) 299

Grand Forks (GFK) to Minneapolis (MSP) 284

Fargo (FAR) to Minneapolis (MSP) 223

Devils Lake to Grand Forks (GFK) 81

Jamestown to Fargo (FAR) 88

Devils Lake to Jamestown 83
Appendix B

Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Devils Lake, North Dakota to Minneapolis/St. Paul ( MSP )

Two Round Trips - B1900

98.0% completion factor

Temporary - Interim Pattern of Service

Departures: 1,431 1/

Block Hours: 2,265

Revenue Passenger Miles: 2,457,000

Available Seat Miles: 9,543,339

Operating Revenues:

Pax. DVL-MSP 7,000 psgrs at $137.82 $964,740

Other: (at 0.62% of passenger revenue) $5,981

Total Operating Revenues: $970,721

Operating Expenses:

Direct: Aircraft and Hull Insurance $365,710

Fuel and Oil $1,301,253

Flying Operations $396,692

Maintenance $516,639

Total Direct Expenses: $2,580,294

Total Indirect Expenses: $1,008,456

Total Operating Expenses: $3,588,751

Operating Loss ($2,618,029)

Profit Element (5.0% of Total Operating Expenses) $179,438

Annual Compensation Requirement: $2,797,467

1/ 14 flights per week x 2 directions x 52 weeks x .98 x 313/312 = 1,431.
Appendix C

Great Lakes Aviation, Ltd. Essential Air Service 

to be Provided to Devils Lake, North Dakota

Effective Period: From start of service until further Department action.

Service: 14 nonstop round trips per week to Minneapolis (MSP).

Aircraft: Beech 1900D, 19 seats.

Rate per Eligible One-Way Flight: $1,955 1

Weekly Ceilings: $54,740 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 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 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 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 $2,797,467 divided by 1,431 estimated annual completed departures and arrivals:

4 flights/day x 365 days x 98 percent completion.

2 $1,955 x 28 flights per week = $54,740.