Order 2011-5-9

Served: May 9, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 9th day of May, 2011

Essential Air Service at

HYDABURG, ALASKA

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

DOCKET DOT-OST-1999-6245

 

ORDER REQUESTING PROPOSALS

Summary

By this order, the Department is requesting proposals from airlines interested in providing 

essential air service (EAS) at Hydaburg, Alaska, for the two-year period beginning 

November 1, 2011, with or without subsidy. Proposals are due by June 16, 2011. (See 

Appendix A for a map.)

Background

By Order 2007-10-12, October 16, 2007, the Department selected Venture Travel, LLC, 

operating as Taquan Air Service (Taquan Air), to provide EAS at Hydaburg, Alaska, with three 

nonstop round trips per week, year-round, to Ketchikan using seven-seat aircraft for the fouryear period from November 1, 2007, through October 31, 2011, for an annual subsidy of 

$86,755.

Request for Proposals

As the end of the current rate term approaches, we are here requesting proposals from carriers 

interested in providing service at Hydaburg, with or without subsidy support, for the period 

beginning November 1, 2011. Carriers should file their proposals no later than June 16. After 

that date, our staff will docket proposals, thereby making them public, and shortly afterwards 

will provide a summary of the proposals to the community and ask them for their final 

comments. We will give full consideration to all proposals filed in a timely manner.1

 

1 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide 

essential air service without subsidy and we determine that service can be reliably provided without such 
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Interested carriers should prepare their proposals with every expectation that their initial 

proposals will also be their final and only proposals. We retain the discretion to negotiate 

proposals with carriers when we deem it desirable. We also retain the discretion to reject 

outright all unreasonable or unrealistic proposals and solicit a new round of proposals.

We are here providing interested carriers with some basic information to serve as guidance 

when they prepare their proposals, but we will not prescribe a precise format. We expect 

proposals to adequately describe the service being proposed and the annual amount of subsidy

being requested. The applicants can make their own judgments as to the level of detail they

wish to present; however, they might want to include proposed schedules as well as supporting 

data for their subsidy requests, such as projected block hours, revenues and expenses. We 

strongly encourage clear, well-documented proposals that will facilitate their evaluation by the 

affected community and the Department.2

With specific respect to Hydaburg, carriers should provide sufficient capacity to accommodate 

historical levels of traffic. In that regard, as is typically the case in Alaska, significantly more 

freight and mail flow from the hub to the EAS community than from the EAS community to 

the hub. In order to help carriers make traffic and revenue projections, we have included 

historical traffic in Appendix B. During the third quarter of 2010, the peak quarter, Taquan 

generated the equivalent of 76 passengers (including freight and mail) to Hydaburg, on the 39 

scheduled flights (13 weeks x 3 flights). We are here requesting proposals for three nonstop 

round trips to Ketchikan, the closest hub and Hydaburg’s principal historical destination. As 

always, we will formally solicit the community’s views on any service options we receive 

before making a long-term carrier selection decision. The community and air carriers are 

encouraged to work together in advance of the due date for proposals to craft a service pattern 

that is desirable to the community and meets the operational needs of the airline interested in 

submitting a proposal.

New Filing Procedures

Carrier proposals should be submitted to the Department with all materials merged into a single 

document. In addition, because the document will be published on Regulations.gov, each page 

should be formatted to be viewed online.

 

compensation, we do not proceed with the carrier-selection case. Instead we simply rely on that carrier’s subsidyfree service as proposed.

2 In selecting a carrier to provide subsidized essential air service in Alaska, 49 U.S.C. 41733(c)(1) directs us to 

consider five factors: (1) scheduled service reliability; (2) contractual and marketing arrangements with a larger 

carrier to ensure service beyond the hub; (3) interline arrangements that the applicant has made with a larger 

carrier at the hub; (4) community views, giving substantial weight to the views of the elected officials 

representing the users; and (5) the experience of the applicant in providing, in Alaska, scheduled air service. In 

addition, the Consolidated Appropriations Act, 2008, Public Law 110-161, provides that when selecting a carrier 

to provide EAS, the Department may consider the relative subsidy requirements, thus codifying a factor that we 

have considered since the inception of the program. Interested carriers should also be aware that our general 

provisions governing essential air service will be included in the selection order as part of our authorization of 

subsidy for the selected service. Appendix C of this order contains those general provisions.
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Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces and nondiscrimination.3 Consequently, all carriers receiving 

Federal subsidy to support essential air service must certify that they are in compliance with 

Department regulations regarding drug-free workplaces and nondiscrimination, and those 

carriers whose subsidies exceed $100,000 over the life of the rate term must also certify that 

they are in compliance with the regulations governing lobbying activities. All carriers that plan 

to submit proposals involving subsidy should submit the required certifications along with their 

proposals. Interested carriers requiring more detailed information regarding these 

requirements, as well as copies of the certifications, should contact the Office of Aviation 

Analysis at (202) 366-5903. The Department is prohibited from paying subsidy to carriers that 

do not submit these documents.4

Community and State Comments

Civic officials are welcome to submit comments on the proposals at any time. As noted earlier, 

we will provide a summary of the proposals to the civic parties and ask them to submit their 

final comments shortly after June 16, the due date for carrier proposals.

This order is issued under authority delegated in 49 CFR 1.56a(f) and re-delegated to the 

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We request that carriers interested in providing essential air service at Hydaburg, Alaska

submit their proposals, with or without subsidy requests, no later than June 16, 2011. The 

proposals should be emailed to: EAS@dot.gov with the title “Proposal to Provide Essential Air 

Service at Hydaburg, Alaska”;5

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

3. The Department will serve a copy of this order on the mayor of Hydaburg, the Alaska 

Department of Transportation, Venture Travel, LLC, and the parties listed in Appendix D.

Persons entitled to petition the Department for review of this order under the Department’s 

Aviation Economic Regulations, 14 CFR 385.50, must file such petitions within ten (10) days 

after the date of service of this order.

 

3 The regulations applicable to these areas are: (1) 49 CFR Part 20 – New restrictions on lobbying; (2) 49 CFR 

Part 21 – Nondiscrimination in federally-assisted programs of the Department of Transportation – Effectuation of 

title VI of the Civil Rights Act of 1964; 49 CFR Part 27 – Nondiscrimination on the basis of disability in programs 

and activities receiving or benefiting from Federal financial assistance; and 14 CFR Part 382 – Nondiscrimination 

on the basis of disability in air travel; and (3) 49 CFR Part 29 – Government-wide debarment and suspension (nonprocurement) and government-wide requirements for drug-free workplace (grants).

4 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.

5 Questions regarding filings in response to this order should be directed to Michael Martin at 202-366-6494, or 

via email at michael.f.martin@dot.gov.
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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 online at

www.regulations.gov
Appendix A

Area Map
APPENDIX B

Historical Traffic - Hydaburg, Alaska

Origination Destination Origin and Destination

Year Quarter Pax

Freight 

PEQ Mail PEQ Total Pax

Freight 

PEQ Mail PEQ Total Pax

Freight 

PEQ

Mail 

PEQ Total

2008 1 5 0 5 10 1 5 33 39 6 5 38 49

2008 2 2 1 5 8 1 4 42 47 3 5 47 55

2008 3 2 0 7 9 6 8 27 41 8 8 34 50

2008 4 0 0 9 9 2 6 30 38 2 6 39 47

Total 9 1 26 36 10 23 132 165 19 24 158 201

2009 1 0 0 1 1 1 2 13 16 1 2 14 17

2009 2 4 0 7 11 6 28 36 70 10 28 43 81

2009 3 5 1 8 14 6 42 51 99 11 43 59 113

2009 4 4 1 9 14 12 24 54 90 16 25 63 104

Total 13 2 25 40 25 96 154 275 38 98 179 315

2010 1 4 0 10 14 2 9 47 58 6 9 57 72

2010 2 2 1 6 9 10 9 53 72 12 10 59 81

2010 3 4 2 10 16 5 16 55 76 9 18 65 92

2010 4 3 1 9 13 7 15 63 85 10 16 72 98

Total 13 4 35 52 24 49 218 291 37 53 253 343
Appendix C

Example of General Terms and Conditions for Essential Air Service

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 solicitation beyond [DATE]. The 

Department’s obligation for performance under this solicitation beyond [DATE], is contingent 

upon 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 [DATE], until funds are made available to the Department for performance. If 

funds are not made available for performance beyond [DATE], the carrier will receive notice in 

writing by the Department.

All claims for payment must be submitted within 60 days of the last day of service provided 

under this order.