Order 20 12

- 7

- 19

Served: July 17 , 20 1 2



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 17 th day of July , 2 01 2

ORDER REQUESTING PROPOSALS

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

E ssential Air S ervice (EAS) at Fort Leonard Wood , Missouri, with or without subsidy, for a new contract period, beginning January 1, 2013

. Interested parties should submit thei r proposals no

later than August 15 , 2012 (See Appendix A for a map .)

Background By Order 2010

- 9

- 9, September 8, 2010, the Department selected Hyannis Air Service, Inc. d/b/a Cape Air (Cape Air), to provide EAS at Fort Leonard Wood for a two

- year period beginning when the carrier inaugurated service

. Cape Air inaugurated service on December 14, 2010, making the expiration date December 31, 2012. The carrier operates four nonstop round trips each day to St. Louis, with 9

- passenger Cessna 402 aircraft

. F ort Leonard Wood also experiences a significant number of passengers deploying to or returning from active duty military service, many of whom are carrying heavy loads of military equipment and supplies. Due to the operational limitations of the Cessna 40 2

, Cape Air operate s accompanying freight

only service when necessary

. Freight

- only flights are subsidized at a rate 90% that of passenger flights.

Request for Proposals As the end of the current rate term approaches, in order to provide sufficient time to complete the

carrier

- selection process before the current contract expires, we are here requesting proposals from carriers interested in providing EAS at Fort Leonard Wood

, with or without subsidy , for a

new contract period beginning January 1, 201 3

. Carriers should file their proposals no later than Essential Air Service at

FORT LEONARD WOOD, MISSOURI

Under 49 U.S.C. § 41731 et seq

. DOCKET DOT

- OST

- 1996

- 1167- 2

-

August 15

, 2012. After that date , our staff will docket proposals, thereby making them public, and direct each carrier to serve a copy of its proposal on the civic parties and other applicants

. Shortly afterwards, we will provide a summary of the proposals to communit y officials and ask

them to submit their final comments

. We will give full consideration to all proposals filed in a timely manner. 1

Interested carriers should prepare their proposals wi th 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 unreasonable or un realistic 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 for their proposals

. We

ex pect 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, they might want to include proposed sch edules as well as supporting data for their subsidy requests, such as projected block hours, revenues and expenses

. We strongly encourage clear, well

- documented proposals that will facilitate their evaluation by the affected community and the Department. 2

With respect to Fort Leonard Wood, we expect proposals consistent with what the community is currently receiving, i.e. four daily round trips ( 28 per week) on 9

- seat aircraft to Chicago O’Hare, Dallas/Fort Worth, St. Louis or another suitable hub airport with airline connections to the national air transportation system . If larger aircraft are contemplated, fewer frequencies should be proposed. If the Department receives proposals for single

- engine aircraft, and the

commu nity ultimately supports the service, in effect waiving their right to twin

- engine aircraft, we would consider the waiver to apply only to the carrier

- selection at hand, i.e. we would not assume that the community would waive their rights for all time. 3 A s always, we wil l formally solicit the community ’ s views on any service options we receive before making a long

- term
carrier selection decision.

1 Carriers should not expect the Department to a ccept 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 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 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. § 41733(c)(1) directs us to consider four factors: (1) service reliability; (2) contractual and marketing ar rangements with a larger carrier at the hub; (3) interline arrangements with a larger carrier at the hub; and (4) community views. In addition, the Consolidated and Further Continuing Appropriations Act, 2012, Public Law 112

- 55 , provides that when selecti ng 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 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.

3 Previously, most EAS communities were entitled to service with 15

- seat or larger aircraft. However, in the Department’s FY2012 appropriation (Consolidated and Further Continuing Appropriations Act, P.L. 112

- 55, November 18, 2011), Congress repealed the 1 5

- seat guarantee, although communities are still entitled to service

with twin

- engine aircraft.- 3

-

We encourage proposals that meet these requirements in an efficient manner

. Carriers are also welcome to pr opose more than one option, if they choose

. T hey need not limit themselves to those requirements if they envision other, potentially more attractive service possibilities (e.g. different hubs or contract length) with subsidy requirements that remain competitive.

Service and Traffic History In order to assist interested carriers in developing traffic and revenue projections for their service proposals, we have summarized some historical origin

- destination traffic in Appendix B. From

2008 to 2010, traffic remained relatively stable at the airport. However, in 2011, traffic increased approximately 48% over 2010. For the m ost recent 12

- month period, ended December 31, 201 1

, there w as an average of 22.8 enplaned pas sengers per day at Fort Leonard Wood

. 4

As Fort Leonard Wood is an active military base, many of the passengers utilizing the airport are either deploying to or returning from active duty

. Carriers should be aware that t hese passengers are often carrying substantial loads of military equipment and supplies (sometimes in excess of

200 pounds per person)

. This can present weight and balance issues depending on the aircraft

used

. Under the existing EAS contract, we have aut horized Cape Air to operate additional freight

- only flights at a subsidy rate 90% that of the passenger service. Over the life of the existing contract, Cape Air has had to operate these freight

- only flight s 58.9% of the time, on

average

. Carriers should take this unique situation into account when drafting their proposals.

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 o n Regulations.gov, each page

should be formatted to be viewed online.

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

- free workplaces, and nondiscrimination. 5 Consequently, all carriers receiving Federal subsidy for essential air service must certify that they are in compliance with Department regulations regarding drug

- free workplaces and nondiscrimination, and those carriers whose subsidies exceed $100,000 o ver the life of the rate term must also certify 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, all carriers that plan to submit proposals involving subsidy should be aware that the selected carrier will be required to complete the required certifications. Interested carriers requiring more detailed

4 Enplaned passengers per day calculated by adding origin and destination passenger totals f rom Appendix B, then dividing by 313 (days), then dividing by 2

. 5 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 Right s 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 (non

- procurement) and government

- wide requirements for drug

- free workplace (grants).- 4

-

information regarding these requirements should contact the Office of Av iation Analysis at (202) 366

- 5903. 6

Community and State Comments

The communit y and state are welcome to submit comments at any time. As noted above, w e encourage prospective applicants to contact the communit y before they submit their proposals so

that they can tailor them to the communit y ’ s 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 August 15 , t he due date for carrier proposals.

This O rder is issued under authority delegated in 49 CFR 1.56a(f).

6 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.- 5

-

ACCORDINGLY,

1

. We request that carriers interested in providing Essential A ir S ervice at Fort Leonard Wood

, Missouri , submit their proposals, with or without subsidy requests, no later than August 15

, 201 2 . P roposals should be e

- mail ed to EAS@dot.gov

, with the subject “Proposal to Provide

Essential Air Service at Fort Leonard Wood , Mi ssouri (Docket DO T

- OST

- 1996

- 1167)

. ” 7

2

. Docket DOT

- OST

- 1997

- 1167 will remain open until further order of the Department; and

3

. We will serve copies of this O rder on the mayors of Waynesville and S aint Robert, Missouri,

pers onnel at Fort Leonard Wood, the airport manager of Waynesville/St. Robert Regional Airport, and the service list for this docket

.

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

Aviation Economic Regulations, 14 CFR 385.50, must file such petitions within ten (10) days

after the date of service of this O rder.

This O rder 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

on the Internet at http://www.regulations.gov

7 Questions regarding filings in response to this Order may be directed to A.J. Muldoon at (202) 366

- 1058 or albert.muldoon@dot.gov

.Appendix A



## AREA MAP

This map is provided by Sabre ® AirVision TM Profit Essentials and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Appendix B Page 1 of 2



### Traffic History 1



### Fort Leonard Wood, MO (TBN)

Year/Quarter Origin Destination Total

2008 Q1 581 799 1,380

Q2 1,315 1,364 2,679

Q3 1,655 2,079 3,734

Q4 1,233 1,437 2,670

2008 Total 4,784 5,679 10,463

2009 Q1 1,120 1,631 2,751

Q2 1,413 1,811 3,224

Q3 1,406 1,555 2,961

Q4 930 1,039 1,969

2009 Total 4,869 6,036 10,905

2010 Q1 719 1,234 1,953

Q2 1,148 1,466 2,614

Q3 1,248 1,430 2,678

Q4 1,039 1,349 2,388

2010 Total 4,154 5,479 9,633

2011 Q1 1,249 1,538 2,787

Q2 1,785 1,884 3,669

Q3 2,125 2,066 4,191

Q4 1,819 1,809 3,628

2011 Total 6,978 7,297 14,275

1 Source

– T

- 100 Market Report, Passengers in Scheduled Passenger Servic e.Appendix B Page 2 of 2

Cape Air Passenger and Freighter Operations by Month 1

1 Source: Cape Air reporting. 0% 10% 20% 30% 40% 50% 60% 70% 80%

0 50 100 150 200 250 300

Dec,

2010 Jan,

2011 Feb,

2011 Mar,

2011 Apr,

2011 May,

2011 Jun,

2011 Jul,

2011 Aug,

2011 Sep,

2011 Oct,

2011 Nov,

2011 Dec,

2011 Jan,

2012 Feb,

2012 Mar,

2012 Apr,

2012 May,

2012 Departures Performed Pax Departures Performed Freight % Freighter UseAppendix 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, suc h 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 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 carrier to provide service on these routes. The carrier must complete all flights that can be safely operated; flight s 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 ex tent 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 carrier may cease to provide service to that specific location without regard to any require ment 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.

Funds are not curren tly available for performance under this solicitation beyond [DATE]

. The Government’s obligation for perform ance under this solicitation beyond [DATE] , is contingent upon the availability of appropriated 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.

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.

All claims for payment must be submitted within 60 days of the last day of service provided under this order

.