Order: 2015

- 3

- 13

Served: March 25, 201 5



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 25 th day of March 20 1 5

Essential Air Service at

ALEKNAGIK, ALASKA DOT

- OST

- 2014

- 0219

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



### ORDER SELECTING AIR CARRIER

Summary By this Order

, the United States Department of Transportation (the Department ) is selecting Grant Aviation to provide E ssential Air Service (E AS ) at Aleknagik

, Alaska, for

the two

- year term from April 5, 2015, through April 30

, 2017

. Aleknagik will receive three weekly nonstop round trips to Dillingham, Alaska, using 6

- passenger Cessna C

- 207 or Gipps Aero GA

- 8 aircraft for an annual subsidy rate of $118,667

. 1

Background Aleknagik is an EAS community by virtue of its being l isted on a certificated airline’s

certificate on October 24, 1978, the date of enactment of the Airline Deregulation Act. Aleknagik’s EAS determination (Order 80

- 1

- 167) guarantees the community a minimum of two round trips per week. Currently Grant Aviation operates three weekly round t rips to Dillingham on 6

- passenger Cessna C

- 207 aircraft.

On December 5, 2014, Grant Aviation filed a 90

- day notice of its intent to terminate

service effective March 5, 2015. By Order 2015

- 1

- 3 (January 6, 2015), the Department prohibited the air carrier from suspending service for 30 days beyond the end of its 90

- day

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

-

notice period, ( i.e. April 5

, 2015 ) , and requested proposals from air carriers interested in providing replacement EAS at the community. In response, two air carriers submitted

propo sals: Grant Aviation (the incumbent), and Servant Air, Inc. (Servant Air).

Each air carrier’s complete proposal and community comments may be accessed online at www.regulations.gov by entering docket number DOT

- OST

- 2014

- 0219 in the search

block.

Proposal of Grant Aviation

Grant Aviation submitted a proposal fo r a two

- year term to provide three weekly nonstop

round trips to Dillingham using either 6

- passenger Cessna C

- 207 aircraft or 6

- passenger Gipps Aero GA

- 8 aircraft for annual subsidy of $118,667.

Proposal of Servant Air Servant Air submitted a proposal with two options, both serving Dillingham. Option 1 would provide the community with three weekly nonstop round trips using 5

- passenger Piper Cherokee PA

- 32 aircraft for an annual subsidy of $257,342. Option 2 would provide the community with the six weekly nonstop round trips using 3

- passenger Piper Cherokee

PA

- 28 aircraft for an annual subsidy of $224,985.

Community Comments On February 11

, 2015, the Depa rtment requested comments from Aleknagik regarding this

EAS air carrier

- selection case. In respons e, we received a letter from The Honorable Jane

Gottschalk

, Mayor of the City of Aleknagik. Mayor Gottschalk’s letter stated that the city

council decided i n favor of Grant Aviation, with the understanding that “[the airline] plans to improve its service...” and added that the community would like “regular mail service

when feasible.”

Decision After carefully reviewing each air carrier’s proposal and taking into account community feedback, the Department has decided to select Grant Aviation to provide EAS at Aleknagik for a two

- year term. The Department finds the subsidy and service levels proposed by Grant Aviation to be reasonable. Furthermore, Grant Avia tion has the support of the community (a key air carrier

- selection criterion) and its proposed subsidy is less

than that of Servant Air. In its request, the community requested “regular mail service when feasible.” Mail service, if applicable, is contrac ted separately, thus, is not directly affected by the Department’s selection of Grant Aviation to provide Aleknagik with passenger service.

The Department shall make this selection contingent upon its receiving properly executed

certifications from Grant Aviation that it is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations concerning lobbying activities. 2

2 The certifications are available online under “Reports and Publications” at http://www.dot.gov/policy/aviation

- policy/small

- community

- rural

- air

- service/essential

- air

- service- 3

-

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 the Department may subsidize it to provide EAS

. Grant Aviation is subject to the Department’s continuing fitness requirements, and no information has come to our atte ntion that would cause us to question

the air 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

findin gs. The Department therefore conc lude s that Grant Aviation is reliable and fit to conduct the operations proposed here.

This Order is issued under authority delegated in 49 CFR Part 1

. 25a(b)

.

ACCORDINGLY,

1. The Department select s Grant Aviation, Inc. to provide Essential Air S ervice at Aleknagik, Alaska

, and establish es the annual subsidy rate as described in Appendix C ;

2

. The Department direct s Grant Aviation, 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 d ocumentation shall be retained for seven years

from the service date 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 ca rrier s may forfeit their compensation for any claim that is not supported under the terms of this Order ;

3

. The Department f i nd s that Grant Aviation, Inc. is fit, willing and able to operate as a certificated air carrie r
, and capable of providing reliable Essential Air S ervice at Aleknagik,

Alaska ;- 4

-

4

. Th is docket will remain open pending further Department action ; and

5

. The Department will serve a copy of this O rder on the mayor of Aleknagik, Alaska, the Alaska Depar tment of Transportation & Public Facilities , Grant Aviation, Inc., and Servant Air, Inc.

B y:

BRANDON M. BELFORD Deputy Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at www.regulations.govAppendix A



## AREA MAP

Source: Map Data @ Google 2014Appendix B



### Grant Aviation Proposal at Aleknagik, AlaskaAppendix C

Grant Aviation, Inc.

Essential Air Service to be provided at Aleknagik, Alaska

DOT

- OST

- 2014

- 0219

Annual Subsidy : $118,667

Contract Term : April 5 , 2015, through April 30

, 2017

Hub : Dillingham, Alaska

Scheduled Service : 3 non stop round trips per week to Dillingham

Aircraft : Cessna C

- 207 or Gipps Aero GA

- 8 Rate per Eligible Flight : $ 380 1
Weekly Ceiling: $ 2,280 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 land ing 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 subsid y. 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 beyon d 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 Depa rtment 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

subs idy 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 Dep artment 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 payment s in the stipulated service levels, the carrier may cease to provide service to that specific location without regards to any requirement for notice of such cessation. Those adjustments in the levels of subsidy and/or service that are mutually agreed to i n 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 t o time. However, any such statutes, regulations, or amendments thereto shall not operate to controvert the foregoing paragraph.

Funds may not be available for performance under this Order beyond September 30, 2015

. The Government’s obligation for perfor mance under this Order beyond September 30, 2015 , is subject to the availability of 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 Septe mber 30, 2015 , until funds are made available to the Department for performance. If sufficient funds are not made available for performance beyond September 30, 2015 , the Department will provide notice in writing to the carrier.

All claims for payment, i ncluding any amended claims, must be submitted within 90 days of the last day of the month for which compensation is being claimed. For example, claims for service provided in July must be filed by

October 31; August claims must be submitted by November 3 0, and so on.

1 A nnual compensation of $118,667 divided by 3 12 annual departures (6 weekl y departures x 52 weeks x 100 percent completion).

2 6 arrivals and departur es per week multiplied by $380 per flight.