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 3 rd day of December , 201 4

ORDER SETTING TEMPORARY RATES

Summary By this O rder, 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

a ction , but no later than March 31 , 2015

. Great Lakes will continue to provide Kear ney, North Platte, and Scottsbluff with three nonstop weekday and weekend round trips (18 per week) to Denver International Airport (DEN) for a combined annua l 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 Aviat ion, Ltd., operating as both a U nited Airlines and Frontier Airlines code

- share partner (Great Lakes), to provide EAS at the above

- mentioned c ommunities 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 c ommunity with three nonstop round trips (18 per week)

to DEN with 9

- or 19

- passenger Beechcraft 1900 D 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 f iscal year basis, subject to the availability of funds. Essential Air Service at

KEARNEY, NEBRASKA
NORTH PLATTE, NEBRASKA

S COTTSBLUFF, NEBRASKA

Under 49 U.S.C. § 41731 et seq

. DOT

- OST

- 1996

- 1715

DOT

- OST

- 1999

- 5173

DOT

- OST

- 2003

- 14535- 2

-

solicited comments on Great Lakes’ proposal. All three communities responded, and requested that the Department reject the pr oposal 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 carrie rs submitted proposals: Aerodynamics, Inc. (ADI), Boutique Air, Great Lakes,

and ViaAir LLC.

Those proposals, as well as t he complete p ublic file for EAS at Kearney, North Platte, and

Scottsbluff , may be accessed online through the Federal Docket Manageme nt 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, Adjudi cations 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 f inalized this air carrier selection case before the end of the current

contract period it must, i n accordance w ith 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 f urther Departmental action , bu t
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. 25 a( b ).- 3

-

ACCORDINGLY,

1. The Department requires Great Lakes Aviation, Ltd.

, to continue to provide E ssential A ir

S ervice 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

E ssential A ir S ervice at Kearney, North Platte, and Scottsbluff , as described in Appendix B ;

3. The Department direct s 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 fo rfeit its compensation for any claim that is not supported under the terms of this O rder;

4

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

5

. The Department will serve cop i es of this Order on the mayors of Kearney, North Pla tte, 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:

B RANDON M. BELFORD Deputy Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available on line at www.regulations.govAppendix A Page 1 of 3Appendix A Page 2 of 3Appendix A Page 3 of 3Appendix B Page 1 of 3

Great Lakes Aviation, Lt d.

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 (DE N)

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 o f 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 sche dule 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 applicabl e 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 ca rrier 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 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 service levels, the carri er 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 no t 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, regulati ons, 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, 201 4, 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 wi thin 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 A nnual compensation of $2,034,866 divide d by 1,835 annual departures (36 weekly departures x 52 weeks x 98 percent completion)

3 36 arrivals and departu res per week multiplied by $1,109 per flightAppendix B Page 2 of 3

Great Lakes Aviation, Ltd.

Essenti al 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)

Ai rcraft : 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 comp leted 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 o r 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 peri od 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 adjust ed 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 completel y, 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 cons titute 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, o r 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 D epartment 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 9 0 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 multi plied by $1,536 per flightAppendix 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 O rder, 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 oper ate 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 pro vide 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, ter minates 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 amen dments 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 subjec t 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 Departm ent 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 compensat ion of $2,443,523 divided by 1,835 ann ual departures (36 weekly departures x 52 weeks x 98 percent completion)

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