Order: 2014-1-12

Served January 16, 2014

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 16th day of January, 2014

 Essential Air Service at

 CHISANA, ALASKA 

 HEALY LAKE, ALASKA

Under 49 U.S. C. § 47131 et seq.

 DOCKET DOT-OST-1998-4574

 DOCKET DOT-OST-1998-3546

 

ORDER REQUESTING PROPOSALS

Summary

By this Order, the Department is requesting proposals from air carriers interested in providing 

Essential Air Service (“EAS”) at Chisana and Healy Lake, Alaska, with or without subsidy

support, beginning June 1, 2014. Proposals are due February 18, 2014. (See Appendix A for a 

map.) 

Background

By Order 2012-6-18, issued on June 22, 2012, the Department re-selected 40-Mile Air, Inc., 

(“40-Mile Air”) to provide subsidized EAS at Chisana with two trips per week to Tok, Alaska,

using 3-seat Cessna 185 or 4-seat Cessna 206-207 aircraft, and at Healy Lake with two round 

trips per week to Fairbanks using 5-seat Cessna 206 or 207 aircraft, for the period of

June 1, 2012, through May 31, 2014, at annual subsidy rates of $81,040 (Chisana) and $104,703

(Healy Lake). That Order, as well as the complete public file for EAS at Chisana and Healy 

Lake, may be accessed online through the Federal Docket Management System at 

http://www.regulations.gov, by entering “DOT-OST-1998-4574” for Chisana and “DOT-OST1998-3546” for Healy Lake in the “SEARCH for: Rules, Comments, Adjudications or 

Supporting Documents:” field.

Request for Proposals

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

interested in providing EAS at Chisana and/or Healy Lake, with or without subsidy support, for 

the two-year period beginning June 1, 2014. Air carriers should file their proposals no later than 

February 18, 2014. After that date, our staff will docket the proposals, thereby making them 

public. Additionally, we request each air carrier serve a copy of its proposal on the civic parties 

at Chisana and Healy Lake and on the other applicants. Shortly afterwards, we will provide a 
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summary of the proposals to the community and ask them to submit any formal comments on 

this carrier-selection case. We will give full consideration to all proposals that are timely filed.1 

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

when they prepare their proposals, but we will not prescribe a precise format for their 

proposals. 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, we recommend they include information 

concerning proposed schedules and projected block hours. In addition, applicants are 

encouraged to provide financial data supporting their subsidy requests, including information 

on their projected expenses and revenues. We strongly encourage clear, well-documented 

proposals that will facilitate their evaluation by the affected communities and the 

Department.2

Proposals should provide sufficient capacity to accommodate historical levels. Specifically, we 

request proposals for two nonstop round trips a week between Chisana and Tok, or another suitable 

airport, and two nonstop round trips a week between Healy Lake and Fairbanks, or another suitable 

hub, with small aircraft (10 seats or less). In order to assist air carriers in making traffic and revenue 

forecasts, we have included historical traffic in Appendix B. Typically in Alaska, mail and freight 

flows are asymmetrical, with up to 90% of total mail and freight flowing outbound from the hub to 

the EAS communities. Historical traffic data (Appendix B) show that two round trips a week is 

sufficient to fulfill the EAS needs of Chisana and Healy Lake.

Interested air carriers should prepare their proposal with every expectation that their initial 

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

proposals with air carriers when we deem it desirable; in such cases we will give all 

applicants the same opportunity. We also retain the discretion to reject outright all 

unreasonable or unrealistic proposals and solicit a new round of proposals. However, we 

anticipate that negotiation or rejection will remain only occasional exceptions to the rule.

Other Air Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying

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

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

EAS without subsidy and we determine that service can be reliably provided without such compensation, we 

usually do not proceed with the carrier-selection case. Instead, we simply rely on that carrier’s subsidy- free service 

as proposed.

2 In selecting a carrier to provide subsidized EAS in Alaska, 49 U.S.C. § 41733(c)(1) directs us to consider six 

factors: (1) service reliability; (2) contractual and marketing arrangements with a larger air carrier at the hub; (3) 

interline arrangements with a larger air carrier at the hub (4) community views; (5) the experience of the applicant 

in providing, in Alaska, scheduled air service or significant patterns of non-scheduled air service; and (6) whether 

the air carrier has included a plan in its proposal to market the service. In addition, Consolidated Appropriations 

Act, 2012, Public Law 112-55, and continued by the Full-Year Continuing Appropriations Act, 2013, Public Law 

No. 113-6, 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 air 

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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receiving Federal subsidy to support EAS must certify that they are in compliance with 

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

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 air carriers that 

plan to submit proposals involving subsidy should submit the required certifications along 

with their proposals. Interested air 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 

air carriers that do not submit these documents. 3

Community Comments

Civic officials and the State are welcome to submit comments at any time. We encourage

prospective applicants to contact the communities before they submit their proposals so that 

they can tailor them to the communities’ needs, as they will not be able to amend them after 

the due date. As noted earlier, we will provide a copy of the proposals to the civic parties and 

ask them to submit their final comments shortly after February 18, 2014, the due date for air 

carrier proposals.

This Order is issued under authority delegated in 49 CFR Part 1.25a(b) and re-delegated to the

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We request that air carriers interested in providing Essential Air Service at Chisana and 

Healy Lake, Alaska, submit their proposals, with or without subsidy requests, no later than 

February 18, 2014. The proposals should be emailed to: EAS@dot.gov with the title 

“Proposal to Provide Essential Air Service at Chisana, Alaska” and/or “Proposal to Provide 

Essential Air Service at Healy Lake, Alaska;”4

2. Dockets DOT-OST-1998-4574 and DOT-OST-1998-3546 will remain open until further 

Order of the Department; and 

 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). The certifications are available 

on the web at http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/essential-air-service. 

4 Questions regarding filings in response to this Order should be directed to Mr. Scott Faulk at scott.faulk@dot.gov 

or (202) 366-9967.
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3. The Department will serve copies of this Order on the civic officials of Chisana and Healy 

Lake, Alaska, the Alaska Department of Transportation and Public Facilities, and the service 

list for this docket.

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

Regulations, 14 CFR Part 385.31(a), must file such petitions within seven (7) days after the date 

of service of this Order.

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

An electronic version of this document is available

online at www.regulations.gov.
Appendix A

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AREA MAP OF CHISANA, ALASKA

Maps generated by the Great Circle Mapper - copyright © Karl L. Swartz.
Appendix A

2 of 2

AREA MAP OF HEALY LAKE, ALASKA 

Maps generated by the Great Circle Mapper - copyright © Karl L. Swartz.
Appendix B

1 of 2

Chisana, Alaska1

Year Quarter Pax

Freight 

PEQ

Mail 

PEQ Total Year Quarter Pax

Freight 

PEQ

Mail 

PEQ Total Year Quarter Pax

Freight 

PEQ

Mail 

PEQ Total

2010 4 8 4 1 13 2010 4 10 41 7 58 2010 4 18 45 7 70

2011 1 17 5 1 23 2011 1 11 42 5 58 2011 1 28 47 6 81

2011 2 13 4 1 18 2011 2 12 31 12 55 2011 2 25 35 13 73

2011 3 12 2 1 15 2011 3 26 22 12 60 2011 3 38 23 13 74

50 15 4 69 59 136 36 231 109 150 39 298

2011 4 11 8 3 22 2011 4 9 50 3 62 2011 4 20 58 6 84

2012 1 9 4 1 14 2012 1 11 57 6 74 2012 1 20 61 7 88

2012 2 7 3 1 11 2012 2 19 17 10 46 2012 2 26 20 11 57

2012 3 18 13 2 33 2012 3 26 43 9 78 2012 3 44 55 11 110

45 28 7 80 65 167 28 260 110 194 35 339

2012 4 19 8 2 29 2012 4 14 42 4 60 2012 4 33 50 6 89

2013 1 9 9 1 19 2013 1 9 98 8 115 2013 1 18 107 9 134

2013 2 12 3 1 16 2013 2 19 86 7 112 2013 2 31 89 8 128

2013 3 47 17 1 65 2013 3 45 79 13 137 2013 3 92 96 14 202

87 37 5 129 87 305 32 424 174 342 37 553

Origination Destination Origin and Destination

 1 Source: Bureau of Transportation Statistics; Schedule T-100. PEQs: Passenger Equivalents. Every 200 pounds of freight or mail is 

the equivalent of one passenger. 
Appendix B

2 of 2

Healy Lake, Alaska1

Year Quarter Pax

Freight 

PEQ

Mail 

PEQ Total Year Quarter Pax

Freight 

PEQ

Mail 

PEQ Year Quarter Pax

Freight 

PEQ

Mail 

PEQ Total

2010 4 1 1 0 2 2010 4 15 7 1 23 2010 4 16 8 1 25

2011 1 0 0 0 0 2011 1 3 4 1 8 2011 1 3 4 1 8

2011 2 0 0 0 0 2011 2 4 5 1 10 2011 2 4 5 1 10

2011 3 5 2 0 7 2011 3 13 6 1 20 2011 3 18 8 1 27

Total 6 3 0 9 35 22 4 61 41 25 4 70

2011 4 0 0 0 0 2011 4 8 8 1 17 2011 4 8 8 1 17

2012 1 0 1 0 1 2012 1 7 5 2 14 2012 1 7 6 2 15

2012 2 8 4 0 12 2012 2 27 12 1 40 2012 2 35 16 1 52

2012 3 10 2 1 13 2012 3 27 10 1 38 2012 3 37 12 2 51

Total 18 7 1 26 69 35 5 109 87 42 6 135

2012 4 2 0 0 2 2012 4 5 3 1 9 2012 4 7 3 1 11

2013 1 7 1 1 9 2013 1 3 1 1 5 2013 1 10 2 2 14

2013 2 30 5 1 36 2013 2 45 27 1 73 2013 2 75 32 2 109

2013 3 5 2 0 7 2013 3 34 5 1 40 2013 3 39 7 1 47

Total 44 8 2 54 87 36 4 127 131 44 6 181

Origination Destination Origin and Destination

 1 Source: Bureau of Transportation Statistics; Schedule T-100. PEQs: Passenger Equivalents. Every 200 pounds of freight or mail is 

the equivalent of one passenger. 
Appendix C

Example of General Terms and Conditions for Eassential Air Service

The air 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 air 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 air 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 air 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 air carrier to provide service on these routes. The air 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 air 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 air 

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 may not be available for performance under this Order beyond [DATE]. The 

Government’s obligation for performance under this Order beyond [DATE], 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 

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

are not made available for performance beyond [DATE], 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 31st; August claims must be submitted by November 

30th, and so on.