Order: 2014-12-3

Served: December 3, 2014

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 3rd day of December, 2014

ORDER SETTING TEMPORARY RATES

Summary

By this Order, the Department is extending the service period and setting temporary rates for

Great Lakes Aviation, Ltd. (Great Lakes) to provide Essential Air Service (EAS) at Kearney, 

North Platte, and Scottsbluff, Nebraska, from November 1, 2014, until further Departmental 

action, but no later than March 31, 2015. Great Lakes will continue to provide Kearney, North 

Platte, and Scottsbluff with three nonstop weekday and weekend round trips (18 per week) to 

Denver International Airport (DEN) for a combined annual subsidy rate of $7,296,552 

($2,034,866 for Kearney, $2,818,163 for North Platte, and $2,443,523 for Scottsbluff). 1

Background

By Order 2012-8-23 (August 20, 2012), the Department re-selected Great Lakes Aviation, Ltd., 

operating as both a United Airlines and Frontier Airlines code-share partner (Great Lakes), to 

provide EAS at the above-mentioned communities for the two-year term from 

November 1, 2012, through October 31, 2014, for a combined annual rate of $4,848,765 

($1,752,904 for Kearney, $1,697,510 for North Platte, and $1,398,351 for Scottsbluff). Under 

that Order, Great Lakes provides each community with three nonstop round trips (18 per week) 

to DEN with 9- or 19-passenger Beechcraft 1900D aircraft.

By Order 2014-4-30 (April 29, 2014), the Department requested proposals from air carriers 

interested in providing EAS at Kearney, North Platte, and/or Scottsbluff. In response, the 

Department received only one proposal, from Great Lakes. On June 13, 2014, the Department 

 1 Subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds. 

Essential Air Service at

KEARNEY, NEBRASKA

NORTH PLATTE, NEBRASKA

SCOTTSBLUFF, NEBRASKA

Under 49 U.S.C. § 41731 et seq.

 DOT-OST-1996-1715

 DOT-OST-1999-5173

 DOT-OST-2003-14535
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solicited comments on Great Lakes’ proposal. All three communities responded, and requested 

that the Department reject the proposal and re-solicit a new round of proposals. 

By Order 2014-8-20 (August 28, 2014), the Department re-solicited proposals from air carriers 

interested in providing EAS at the three communities. In response to the Department’s request, 

four air carriers submitted proposals: Aerodynamics, Inc. (ADI), Boutique Air, Great Lakes, 

and ViaAir LLC.

Those proposals, as well as the complete public file for EAS at Kearney, North Platte, and 

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

http://www.regulations.gov, by entering DOT-OST-1996-1715 for Kearney, DOT-OST-1999-

5173 for North Platte, and DOT-OST-2003-14535 for Scottsbluff in the “Search for: Rules, 

Comments, Adjudications or Supporting Documents” field.

Community Comments

On October 8, 2014, the Department requested community comments for the second round of 

proposals submitted for this air carrier selection case, which were due November 7, 2014. As 

the Department has not finalized this air carrier selection case before the end of the current 

contract period it must, in accordance with 49 U.S.C. § 41734(c), extend the service obligation

of Great Lakes until this carrier selection case has concluded.

Decision

The Department will extend Great Lakes’ service period until further Departmental action, but 

no later than March 31, 2015. Consistent with past practice, we will set this contract extension 

at annual subsidy rates of $2,034,866 for Kearney, $2,818,163 at North Platte, and $2,443,523 

at Scottsbluff, as described in Great Lakes’ most recent service proposal dated October 7, 2014, 

and further detailed in Appendix B of this Order. In Great Lakes’ proposal, the carrier stated 

that it is currently operating service to North Platte and Scottsbluff with 9-seat Beech 1900D 

aircraft, and that is the rate that the Department will set for those two communities. The rate 

for Kearney is based on the proposal for 19-seat aircraft.

This Order is issued under authority delegated in 49 CFR Part 1.25a(b).
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ACCORDINGLY,

1. The Department requires Great Lakes Aviation, Ltd., to continue to provide Essential Air 

Service at Kearney, North Platte, and Scottsbluff, Nebraska, until further Departmental action, 

but no later than March 31, 2015;

2. We set the rate of compensation for Great Lakes Aviation, Ltd., for the provision of 

Essential Air Service at Kearney, North Platte, and Scottsbluff, as described in Appendix B; 

3. The Department directs Great Lakes Aviation, Ltd. 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 issuance 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 carrier 

may forfeit its compensation for any claim that is not supported under the terms of this Order;

4. These dockets will remain open until further order of the Department; and

5. The Department will serve copies of this Order on the mayors of Kearney, North Platte, and 

Scottsbluff, Nebraska; the airport managers of Kearney Regional Airport and North Platte 

Regional Airport, and the airport director of Western Nebraska Regional Airport; Great Lakes 

Aviation, Ltd.; and the service list for this docket.

By:

BRANDON M. BELFORD

Deputy Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available online at

www.regulations.gov
Appendix A

Page 1 of 3
Appendix A

Page 2 of 3
Appendix A

Page 3 of 3
Appendix B

Page 1 of 3

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at Kearney, Nebraska

DOT-OST-1996-1715

Annual Subsidy: $2,034,866

Contract Term: November 1, 2014, through March 31, 2015

Scheduled Service: 18 nonstop round trips per week

Hub: Denver International Airport (DEN)

Aircraft: 19-passenger Beechcraft 1900D

Rate per Flight:2 $1,109

Weekly Ceiling:3 $39,924

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 December 11, 2014. The Government’s obligation for 

performance under this Order beyond December 11, 2014, 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 December 11, 2014, until funds are made available to the Department for performance. If sufficient funds are 

not made available for performance beyond December 11, 2014, 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.

 2 Annual compensation of $2,034,866 divided by 1,835 annual departures (36 weekly departures x 52 weeks x 98 

percent completion)

3 36 arrivals and departures per week multiplied by $1,109 per flight
Appendix B

Page 2 of 3

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at North Platte, Nebraska

DOT-OST-1999-5173

Annual Subsidy: $2,818,163

Contract Term: November 1, 2014, through March 31, 2015

Scheduled Service: 18 nonstop round trips per week

Hub: Denver International Airport (DEN)

Aircraft: 9-passenger Beechcraft 1900D

Rate per Flight:4 $1,536

Weekly Ceiling:5 $55,296

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 December 11, 2014. The Government’s obligation for 

performance under this Order beyond December 11, 2014, 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 December 11, 2014, until funds are made available to the Department for performance. If sufficient funds are 

not made available for performance beyond December 11, 2014, 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.

 4 Annual compensation of $2,818,163 divided by 1,835 annual departures (36 weekly departures x 52 weeks x 98 

percent completion)

5 36 arrivals and departures per week multiplied by $1,536 per flight
Appendix B

Page 3 of 3

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at Scottsbluff, Nebraska

DOT-OST-2003-14535

Annual Subsidy: $2,443,523

Contract Term: November 1, 2014, through March 31, 2015

Scheduled Service: 18 nonstop round trips per week

Hub: Denver International Airport (DEN)

Aircraft: 9-passenger Beechcraft 1900D

Rate per Flight:6 $1,332

Weekly Ceiling:7 $47,952

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 December 11, 2014. The Government’s obligation for 

performance under this Order beyond December 11, 2014, 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 December 11, 2014, until funds are made available to the Department for performance. If sufficient funds are 

not made available for performance beyond December 11, 2014, 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.

 6 Annual compensation of $2,443,523 divided by 1,835 annual departures (36 weekly departures x 52 weeks x 98 

percent completion)

7 36 arrivals and departures per week multiplied by $1,332 per flight