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Swanson, Brian (OST) 

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Swanson, Brian (OST) 

Friday, June 04, 2010 11:43 AM 

'elyjetcenter@yahoo.com'; 'Mario Cifuentez'; 'molmos@ci.visalia.ca.us'; 

'ssalomon@ci.visalia.ca.us'; 'diazg@cityofmerced.org'; 'Elliott, Ron'; 

'cahillb@cityofmerced.org' 

'Chuck Howell'; 'Iaura@mccallaviation.com'; Devany, Dennis (OST) 

Soliciting Comments on EAS bids at MCE, VIS and ELY - Due July 8, 2010 

I would like to update you on the Essential Air Service (EAS) situation at Merced and Visalia, California, amj-Ely, 

Nevada. and give you an opportunity to submit comments if you wish. - , 

In anticipation of the end of Great Lakes' current contract on September 30, 20 I 0, the Department issued Order 20 I 0-5-4 

on May 4,2010, to solicit proposals from all interested air carriers to provide EAS at Merced, Visalia, and/or Ely, for a 

new two-year term. In response to that order, we received proposals from two carriers. Great Lakes submitted a proposal 

with a single option at each community. McCall Aviation Inc.'s (McCall) proposal contained three different service 

options for service at Ely only. 

Copies of the proposals may also be accessed online through the Federal Docket Management System at: 

http://www.regulations.gov, by doing a search on by doing a search on Dockets DOT-OST-1998-3521 (Merced), DOTOST -2004-19916 (\lerrrql), or DOT -OST -1995-361 (Ely). For your convenience, each carrier's proposal is briefly 

summarized below.~lS..tra... 

Before summarizing each carrier's proposal, we would like to note that all three of the communities' EAS definitions call 

for service with two-pilot, twin-engine aircraft with at least 15- seats by virtue of the fact that they generated more than I I 

enplanements per day in at least one calendar year from 1976-1986. Second, we are prohibited from paying subsidy for 

EAS at any community where the per-passenger rate exceeds $200, unless the community is greater than 210 highway 

miles from the nearest large or medium hub. In this case, Merced and Visalia are fewer than 210 highway miles from a 

large or medium hub and, therefore, are subject to the $200 subsidy-per-passenger ceiling. We noted in the Request for 

Proposals that passenger levels at both Merced and Visalia are very low. Both communities are well over the $200 per 

passenger cap, so the communities might want to address that issue. Ely, on the other hand, is farther than 210 miles from 

the nearest large or medium hub and, thus, is exempt from the $200 per passenger cap. 

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Great Lakes would utilize 19-passenger Beech 1900D aircraft and its code-share agreements where applicable, and the 

proposal for each community is on a stand-alone basis (i.e., it is not a three-city all or nothing proposal). 

Hub(s) Served/ Daily Annual 

Community Service Pattern Round Subsidy 

Trips Requirement 

Nonstop to Las Vegas or one-stop to Denver; 

Merced no upline restrictions on one round trip; 2 $1,961,174 upline service routing would be one-stop to Ontario, (14 weekly) 

Los Angeles or Orange County 

Nonstop to Ontario, Los Angeles or Orange County; 

Visalia no upline restrictions on one round trip; upline 2 $1,746,507 service routing would be one-stop to Denver or Las (14 weekly) 

Vegas 

No upline restrictions; I Ely Service routing would be nonstop to Las Vegas or (6 weekly) $1,752,067 

one-stop to Denver 

As summarized below, McCall submitted a proposal with three different options, all for nonstop service between Ely and 

Salt Lake City, utilizing 8-seat aircraft. 

Service Weekly Annual 

Aircraft Type Subsidy Option # Round trips Required 

1 7 Piper PA31-350 $1,081,360 Navajo Chieftain 

2 7 Beech-20O $1,756,822 

3 12 Piper PA31-350 $1,602,627 Navajo Chieftain 

While McCall's proposal does not meet the IS-seat requirement, the carrier notes that based on the historical passenger 

traffic it is difficult to justify larger aircraft. 

Please note that the average passenger fares shown in each proposal do not necessarily reflect the average local fare 

passengers would actually pay, but, rather, reflect a prorated portion of the total ticket price (e.g., the Ely - Salt Lake City 

portion of a Ely- Salt Lake City - Chicago ticket) that the subsidized carrier would realize. Also, the fare shown is net of 

certain charges such as Federal transportation security fees, excise or ticket taxes, and Passenger Facility Charges. Of 

course, carriers have the discretion to charge fares they deem appropriate, and the passenger fares presented in their 

proposals have been developed for subsidy rate computation purposes only. Based on the cost elements incorporated in 

the carriers' computation summaries, the carriers would have to realize passenger fares comparable to the averages shown 

in their proposals in order to achieve break-even or profitable operations without subsidy. 

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You should also note that the carriers' schedules may change to reflect changing conditions (e.g .. to better meet shifting 

connecting bank times at the hub). The DepaJiment does expect subsidized air calTiers to maintain well-timed and wellspaced flights in order to ensure full compensation. 

We request that you submit any comments you may have as soon as possible, but in any case no later than July 8, 2010. 

Please send your comments by fax to 202-366-7638 or by email to both dennis.devany@dot.gov and 

brian.s'vvanson@dot.gov. Our rules require that you send your comments to both applicants as well. If you have any 

questions, or need more time to reply, please feel free to contact Brian Swanson of my staff at 202-366-5392. 

Sincerely, 

Dennis J. DeVany 

Chief, Essential Air Service Division, X-53 

Office of Aviation Analysis 

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