Order 2011

- 5

- 9 Served: May

9, 2011


### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.
Issued b y the Department of Transportation on the 9 th day

of May , 20 11 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 Departme nt is requesting proposals from airlines interested in providing essential air service (EAS) at Hydaburg , Alaska , for the two

- ye ar period beginning November 1, 2011 , with or without subsidy . Proposals are due b y June 16 , 2011 . (See Appendix A for a map.) Background By Order 2007

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- 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, ye ar - round, to Ketchikan using seven

- seat aircraft for the four

ye ar 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, 20 1 1 . Carriers should file their proposals no later than June 16 . After that date, our staff will docket proposals, thereb y making them public, and shortly afterwards will provide a summary

of the proposals to the community and ask them for their final comme nts. 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- 2

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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 discretio n 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 adequatel y 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 strongl y encourage clear, well

- documented proposals that will facilitate their evaluation b y 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 ty pically the case in Alaska, significantl y more freight and mail flow from the hub to the EAS community than from the EAS community t o 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 p eak 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 alway s, we will formally

solicit the community ’ s views on any service options we receive before making a long

- term carrier se le ction 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 th e 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 subsidy

free se rvice 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 o fficials 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 ess ential 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.- 3

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Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobb yi ng activities, drug

- free workplaces and no ndiscrimination. 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 sub sidies 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 Analy sis 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 Analy sis. AC CORDINGLY, 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 cop y 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) day s 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 disabil ity 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 (non

procurement) 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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Th is 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 Anal ysis (SEAL) An electronic version of this document is available on line 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 A ir 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 an y such changes beyond the scope of the order during the applicable period of these rates, it must first notify the Office of Aviation Analy sis in writing and receive written approval from the Department to be ensured of full compensation. Should circum stances 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 safel y operated; flights that overfl y points for lack of traffic will not be compensated. In determining whether subsidy pay ment 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 sy stem provided to the community

. If the Department unilaterally , either partially or completely , terminates or reduces pay ments 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 Dep artment does make pay ments 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 pay ment. 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 solicit ation beyond [DATE] . The Department’s obligation for performance under this soli citation beyond [DATE] , is contingent upon the availability

of appropriated funds from which pay ment for services can be made. No legal liability

on the part of the Government for any pay ment 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 b y the Department. All claims for pay

ment must be submitted within 60 day s of the last day of service provided under this order.