Order 2012

- 5

- 21 Served: May 23, 2012



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION


### OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 23 rd of May, 2012.

Essential Air Service at

CRESCENT CITY
, CALIFORNIA

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 1997

- 2649

ORDER RE

- SELECTING CARRIER Summary By this Order

, the Department is re

- selecting SkyWest Airlines, Inc., d/b/a United Express (SkyWest) to provide Essential Air Service (EAS) at Crescent City, California

, for $1,996,959 annual subsidy

. 1

Background By Order 2010

- 5

- 19, May 17, 2010, the Department selected SkyWest Airlines, Inc., d/b/a United Express, to provide EAS at Crescent City, California, through July 31, 2012. Annual subsidy and s ervice levels were set a t 14 nonstop round trips per week with 30

- seat Embraer

Brasilia aircraft to San Francisco and $1,781,888 annual subsidy. By Order 20 1 2

- 4

- 7

, April 5, 2012, in an t i c ipation of the end of the current EAS contract, the Department reque sted proposals

for a new two

- year contract at Crescent City

. The Order requested proposals consistent with the historical service pattern of 14 nonstop round trips per week to San Francisco with 3 0

- seat aircraft, as well as proposals with different aircra ft types to different hubs , with proposals due April 26, 2012 . We received proposals from only one carrier, the incumbent, SkyWest , and on April 30 , 2012, requested comments, with comments due May 22 , 2012

.

1 Such subsidy is calculated and distribut ed on a fiscal year basis, subject to the availability of appropriated funds.- 2

-

Propos al of SkyWest SkyWest proposes to con tinue to operate fourteen (14) nonstop round trips per week to San

Francisco for $1, 996,959 annual subsidy. All service would be with 3 0

- seat Brasilia aircraft as United Express.

Community Comments The City Manager indicates that the community looks forw ard to continued, reliable Essential Air Service from SkyWest Airlines.

“In the coming years, we would like to request the airline work with us to create a schedule best suited to the needs of our users. A schedule that enhances the growth of

passenger enplanements currently experienced and forecast to continue for this regional airport. We support the action awarding the EAS contract to SkyWest as of August 1, 2012. We look forward to continuing the excellent working relationship that we have experie nced previously with SkyWest Airlines.”

Decision The decision is straightforward: we have only one proposal from one carrier and the community favors the selection of that proposal. The subsidy requested by SkyWest has increased by 12 percent, a small level given fuel price increases, and traffic is steady. SkyWest is a known,
proven operator

. Furthermore, its code

- share arrangement with United Airlines at San Francisco provides the communit y with seamless access to the national air transportation sys tem.

Carrier Fitness

49 U.S.C. 41737(b) and 41738 require that the Department find an air carrier fit, willing, and able to provide reliable service before Department may subsidize it to provide Essential Air

Service

. SkyWest Airlines , Inc., 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. The Department has contacted the Federal Aviation Administration, and it has

raised no c oncerns that would negatively affect our fitness finding s

. The Department therefore

concludes that the carrier remain s fit to conduct the operations proposed here.

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

ACCORDINGLY,

1. We r e

- select SkyWest Aviation, Inc., d/b/a United Express, to provide Essential Air Service at Crescent City

, California ;

2 . We set the final rate of compensation for SkyWest Aviation, Inc., for the provision of

Essential Air Service at Crescent City

, Califo rnia ; as described in Appendix C ;- 3

-

3 . We direct SkyWest

, 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 a nd examination by representatives of the Department. Such documentation shall be retained for seven years from the service date of the 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 ;

4 . We find that SkyWest A irlines , Inc., continue s to be fit, willing and able to operate as a certificated carrier and capable of providing reliable Essential Air Service at the these

communities

5 . Th is docket will remain open until further Order of the Department; and

6 . We will serve copies of this Order on the Mayor and Airport Manager of Crescent City

, California

, and on SkyWest Airlines, Inc.

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.govAppendix A

Nonstop Great Circle Miles from Crescent City ACV, Eureka 56 EUG, Eugene 170 PDX, Portland 275 RDD, Redding 134 SFO, San Francisco 304Appendix B

Essential Air Service at Crescent City, California

Docket 1997-2649

Crescent City to San Franciso

Miles to SFO 304
Aircraft Type Brasilia

Round Trips per Week 14

Departures 1,427
Block Time (Min) 93

Block Hours 2,212

Passengers 23,400

Passenger Fares $100.00

Revenue $2,340,000

Direct Expenses $3,118,446

Indirect Expenses $1,011,991

Operating Expenses $4,130,437

Profit at 5% $206,522

Economic Cost $4,336,959

Subsidy $1,996,959

1/ 14 trips per week x 2 directions x 52 weeks x .98 = 1,427.Appendix C

SkyWest Airlines, Inc., d/b/a United Express , Essential Air Service to be Provided to Crescent City

, California

, Docket 1997

- 2649

Effective Perio d : August 1 , 20 1 2 , through July 31

, 201 4

Scheduled Service : 14 nonstop round trips per week to San Francisco

Aircraft : 30

- seat Brasilias

Annual Subsidy $1,996,959 Annual Flights 1,427 1
Rate per Flight $1,399 2
Weekly Ceiling $39,172 3

Note: The carrier u nderstands 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 s ubsidy 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 fro m 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 t hat 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 exten t 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 requiremen t 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 su bject 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 ser vices 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 fo r 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 14 trips per week x 2 directions x 52 weeks x .98 = 1,427.

2 $1,996,9569 ÷ 1,427 flights.

3 $1,399 x 14 trips x 2 directions.