Order: 2015-3-13

Served: March 25, 2015

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 25th day of March 2015

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 Essential Air Service (EAS) 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 listed 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 trips 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.
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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 

proposals: 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 for 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 Department requested comments from Aleknagik regarding this 

EAS air carrier-selection case. In response, 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 in 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 Aviation 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 contracted 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
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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 attention 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 

findings. The Department therefore concludes 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 selects Grant Aviation, Inc. to provide Essential Air Service at 

Aleknagik, Alaska, and establishes the annual subsidy rate as described in Appendix C;

2. The Department directs 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 documentation 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 carriers may forfeit their compensation for any claim that is not 

supported under the terms of this Order;

3. The Department finds that Grant Aviation, Inc. is fit, willing and able to operate as a 

certificated air carrier, and capable of providing reliable Essential Air Service at Aleknagik, 

Alaska;
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4. This docket will remain open pending further Department action; and

5. The Department will serve a copy of this Order on the mayor of Aleknagik, Alaska, the 

Alaska Department of Transportation & Public Facilities, Grant Aviation, Inc., and Servant 

Air, Inc.

By:

BRANDON M. BELFORD

Deputy Assistant Secretary for

Aviation and International Affairs

(SEAL)

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

AREA MAP

Source: Map Data @ Google 2014

 
 Appendix B

Grant Aviation Proposal at Aleknagik, Alaska
Appendix 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 nonstop round trips per week to Dillingham

Aircraft: Cessna C-207 or Gipps Aero GA-8

Rate per Eligible Flight: $3801

Weekly Ceiling: $2,2802

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 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 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 may not be available for performance under this Order beyond September 30, 2015. The Government’s obligation for 

performance 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 September 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, including 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 30, and so on.

 1 Annual compensation of $118,667 divided by 312 annual departures (6 weekly departures x 52 weeks x 100

percent completion).

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