Order 2013

- 10

- 1 Served: October 1, 2013



### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on the 1 st of October, 2013

Essential Air Service at
BUTTE, M ONTANA

Un der 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 20 11

- 0136

ORDER REQUESTING PROPOSALS

Summary By this Order , the Department is requesting proposals by October 24 , 2013

, from carriers interested in providing Essential Air Service (EAS) at Butte, M ontan a , beginning January 1, 2014, for a period of two or more years

, with or without subsidy.

Background By Order 2012

- 1

- 23, January 26, 2012, the Department selected SkyWest Airlines (SkyWest)

, to provide 14 nonstop round trips per week between Butte, Mont ana, and Salt Lake City, Utah , through December 31, 2013. 1 All of SkyWest’s service is provided with 50

- seat regional jet aircraft and the annual subsidy is set at $ 672,230

. Request for Proposals As the end of the current rate term approach es , we are r equesting proposals from carriers int erested in providing service at Butte
, with or without subsidy, for the period beginning January 1 , 2014 . Carriers should file their proposals by October 24 , 2013

. S taff will then docket the proposals, thereby making them public. Shortly afterwards, we will provide a summary of the proposals to the communit y and ask them to submit their final comments. We will give full consideration to all proposals filed in a timely manner. 2 Interested carriers should prepare thei r 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 unr easonable or unrealistic proposals and , if necessary, solicit a new round of

1 Order 2012

- 1

- 23 also selected SkyWest to provide EAS at Aberdeen, SD, and Bemidji, MN . We will deal with th ose communities separate ly

. 2 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to
pr ovide E AS without subsidy and we determine that basic EAS

, as required by 49 U.S.C. § 41732

, can be reliably provided without such compensation, we typically do not proceed with the carrier

- selection case. Instead, we simply rely on that carrier’s subsidy

- free service as proposed.- 2

-

proposals. However, we anticipate that negotiation or rejection will remain only occasional exceptions to the rule.

We are here providing interested carriers with some basic inf ormation 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 s ubsidy being requested. The a pplicants can make their own judgments as to the level of detail they wish to present; however, we recommend that they include information concerning proposed schedules and projected block hours. In addition, applicants are urged 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 communit y and the Department. We anticipate applying o ur usual carrier

- selection criteria and the general provisions governing subsidy payments for EAS

. 3

As always, we will formally solicit the communit y’ s views on any service options we receive before making a long

- term , carrier

- selection decision. The c ommunit y and air carrier s are encouraged to work together in advance of the due date for proposals to craft a service pattern that is both desirable to the communit y and meets the operational needs of the airlines, as carriers cannot amend their proposal s after the due date.

We encourage proposals that meet the communit y’s requirements in an efficient manner. Butte is a strong traffic generator and so we will request the maximum service level at the communit y

– 67 seats per day in both directions and a m inimum of two round trips per day. 4 Carriers are also welcome to propose more than one service option, if they choose; they need not limit themselves to a single specific service pattern if they envision other, potentially more attractive service possibil ities

– different hubs, or longer terms for the contracted service

– with subsidy requirements that remain competitive.

Filing Format Carrier proposals should be submitted to the Department with all materials merged into a single document. In addition, b ecause the document will be published on Regulations.gov, each page should be formatted to be viewed online.

Historical Traffic In o rder to assist carriers in making traffic and revenue projections, we have included historical traffic for the communit y in Appendi x B for the most recent annual periods.

3 In selecting a carrier to provide subsidized EAS for an eligible place not in Alaska , 49 U.S.C. § 41733(c) (1) directs us to consider five factors: (1) service reliability; (2) contractual and marketing arrangements with a large r carrier at the hub; (3) interline arrangements with a larger carrier at the hub; (4) communities views; and (5) whether the carrier has included a plan in its proposal to market the service. In addition , The Consolidated and Further Continuing Appropriat ions Act, 2012, Public Law No. 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 codi fying a factor that we have considered since the inception of the program. Interested carriers should also be aware that our general provisions governing EAS 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.
4 This works out to two round trips per day with regional jets, three round trips per day (18 a week) with 30

- seat aircraft, and four round trips per day (24 a week) with 19

- seat aircraf t.- 3

-

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

- free workplaces

, and nondiscrimination. 5 Consequently, all carriers r eceiving Federal subsidy to support EAS 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 c ertify that they are in compliance with the regulations governing lobbying activities. Because the Department is prohibited from paying subsidy to carriers that do not submit these documents, the selected carrier will be required to submit them in o rder t o receive subsidy. 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

.
Community Comments Civic officials and t he State 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 October 24

, 2013, the due date for carrier
pr oposals.

This Order is issued under authority delegated in 49 CFR Part 1. 25a(b) and re

- delegated to the Directo r, Office of Aviation Analysis.

ACCORDINGLY,

1

. The Department requests proposals from carriers interested in providing EAS at Butte, Montana

. Carriers should submit proposals, with subsidy if necessary, by October 24

, 2013 . Proposals should be emailed to EAS@dot.gov, with the title “Proposal to Provide EAS at Butte , Montana ” 6 ;

2

. Th is D ocket will remain open until further Order of the Depar tment; and

3 . We will serve this Order on the s ervice l ist for th is Docket.

Persons entitled to petition the Department for review of this Order under the Department’s Regulations, 14 CFR Part 385. 31 , must file such petitions within seven ( 7 ) days after the date of service of this Order

.

5 The certifications are available on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

- rural

- air

- service/essential

- air

- service

. 6 Questions regarding filings may be directed to Kevin Adams at 202

- 366

- 1047 or Kevin.Adams@dot.gov- 4

-

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 at http://www.regulations.govAppendix A

Nonstop Great Circle Miles to Butte (BTM) BZN, Bozeman 66 MSO, Missoula 101 BIL, Billings 191 BOI, Boise 247 GEG, Spokane 265 SLC, Salt Lake 358 SEA, Seattle 477 DEN, Denver 578 SFO, San Francisco 768 M SP, Minneapolis 938Appendix B

Historical Scheduled Passengers at Butte, Transported by SkyWest, T-100 Market Report

Year Month Origin Dest O&D 2010 8 2,725 2,583 5,308 2010 9 2,419 2,373 4,792 2010 10 2,169 2,127 4,296 2010 11 1,803 1,740 3,543 2010 12 1,960 1,917 3,877 2011 1 1,638 1,541 3,179 2011 2 1,568 1,455 3,023 2011 3 1,845 1,827 3,672 2011 4 1,748 1,763 3,511 2011 5 2,059 2,062 4,121 2011 6 2,183 2,206 4,389 2011 7 2,341 2,285 4,626 YE July 31, 2011 24,458 23,879 48,337

2011 8 2,422 2,280 4,702 2011 9 2,383 2,309 4,692 2011 10 2,016 1,781 3,797 2011 11 1,685 1,650 3,335 2011 12 1,831 1,656 3,487 2012 1 1,458 1,525 2,983 2012 2 1,466 1,384 2,850 2012 3 1,686 1,523 3,209 2012 4 1,545 1,612 3,157 2012 5 1,671 1,692 3,363 2012 6 1,604 1,691 3,295 2012 7 2,098 2,054 4,152 YE July 31, 2012 21,865 21,157 43,022

2012 8 2,080 2,085 4,165 2012 9 1,742 1,466 3,208 2012 10 1,741 1,729 3,470 2012 11 1,668 1,627 3,295 2012 12 1,712 1,629 3,341 2013 1 1,551 1,487 3,038 2013 2 1,426 1,375 2,801 2013 3 2,211 2,091 4,302 2013 4 2,012 2,086 4,098 2013 5 2,470 2,435 4,905 2013 6 2,688 2,915 5,603 2013 7 3,016 3,095 6,111 YE July 31, 2013 24,317 24,020 48,337App endix 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 schedu le 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 th is 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 carr ier 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 ad justed 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 communities

. If the Department unilaterally, either partially or com pletely, 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 stipula ted 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 may not be available for performance under this Order beyond [DATE]. The Government’s obligation for performance under this Order beyon d [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 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 th is Order