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 23rd 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 service levels were set at 14 nonstop round trips per week with 30-seat Embraer 

Brasilia aircraft to San Francisco and $1,781,888 annual subsidy. By Order 2012-4-7, April 5, 

2012, in anticipation of the end of the current EAS contract, the Department requested 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 30-seat 

aircraft, as well as proposals with different aircraft 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 distributed on a fiscal year basis, subject to the availability of appropriated funds.
- 2 -

Proposal of SkyWest

SkyWest proposes to continue to operate fourteen (14) nonstop round trips per week to San 

Francisco for $1,996,959 annual subsidy. All service would be with 30-seat Brasilia aircraft as 

United Express.

Community Comments

The City Manager indicates that the community looks forward 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 

experienced 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 community with seamless access to the national air transportation system. 

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 concerns that would negatively affect our fitness findings. The Department therefore 

concludes that the carrier remains fit to conduct the operations proposed here.

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

ACCORDINGLY,

1. We re-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, California; 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 and 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 Airlines, Inc., continues 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. This 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.gov
Appendix A

Nonstop Great Circle Miles from Crescent City

ACV, Eureka 56

EUG, Eugene 170

PDX, Portland 275

RDD, Redding 134

SFO, San Francisco 304
Appendix 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 Period: August 1, 2012, through July 31, 2014

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

Aircraft: 30-seat Brasilias

Annual Subsidy $1,996,959

Annual Flights 1,4271

Rate per Flight $1,3992

Weekly Ceiling $39,1723

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 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.