Order: 2011-11-21

 Served: November 17, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 17th of November, 2011

Essential Air Service at

EL DORADO/CAMDEN, ARKANSAS

HARRISON, ARKANSAS

HOT SPRINGS, ARKANSAS

under 49 U.S.C. 41731 et seq.

 Docket DOT-OST-1997-2935

 Docket DOT-OST-1997-2935

 Docket DOT-OST-1997-2935

ORDER RE-SELECTING CARRIER

Summary

By this order, the Department is re-selecting SeaPort Airlines, Inc. (SeaPort) to provide 

subsidized essential air service (EAS) at El Dorado/Camden (El Dorado), Harrison, and Hot 

Springs, Arkansas, at a combined annual subsidy rate of $5,990,780 ($2,436,074 for El Dorado, 

$2,080,318 for Harrison, and $1,474,388 for Hot Springs) for the two-year period from 

November 1, 2011, through October 31, 2013.1 SeaPort will continue to provide these three

communities with 18 round trips per week using nine-seat Pilatus PC-12 aircraft.

Background

In anticipation of the end of SeaPort’s current contract on October 31, 2011, the Department 

issued Order 2011-4-15 on April 15, 2011. Because the proposals did not address the high perpassenger subsidy at Hot Springs and Jonesboro, the Department issued 2011-6-25 on June 27, 

2011, re-soliciting proposals from all interested air carriers. Proposals were also solicited for 

Jonesboro, but we will deal with that community separately. In response to the Order, SeaPort 

and Multi-Aero, Inc. d/b/a Air Choice One (Air Choice One) submitted proposals.

 

1 Subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.
- 2 -

SeaPort, the incumbent carrier, submitted proposals for El Dorado, Harrison, and Hot Springs, 

utilizing 9-passenger Pilatus PC-12 aircraft. SeaPort’s proposals are summarized in the table 

below:

# round trips Annual 

per week Subsidy Aircraft

El Dorado 12-DAL & 6-MEM $ 2,436,074 Pilatus PC-12

Harrison 12-MEM & 6 MCI $ 2,080,318 Pilatus PC-12

Hot Springs (option 1) 12-DAL & 6 MEM $ 2,116,435 Pilatus PC-12

Hot Springs (option 2) 12 - DAL (1 nonstop &) $ 1,474,388 Pilatus PC-12

1 one-stop)

6 - MEM 

Air Choice One proposes service using 9-passenger Cessna Grand Caravan aircraft (summarized 

below).

# round trips Annual 

per week/Hub Subsidy Aircraft

El Dorado and 18 -DFW $ 4,321,925 Caravan

Hot Springs

Harrison 18 - STL $ 1,759,777 Caravan

Copies of both carriers’ proposals may also be accessed online through the Federal Docket 

Management System (FDMS) at: http://www.regulations.gov/ by entering DOT-OST-1997-

2935.

Community Comments

On September 9, we requested community comments regarding the carrier selection at these 

three Arkansas communities.

El Dorado

We received a letter from Frank Hash, the Mayor of the City of El Dorado. He states, “SeaPort 

has demonstrated on numerous occasions its desire to be a true partner with El Dorado,” by 

working closely with the airport commission to increase enplanements, by providing on-time and 

friendly service. Mayor Hash cites positive comments by its citizens about the service and 

increased enplanements. Further, he states that the community wants access to Dallas Love 

Field, rather than Dallas/Fort Worth [Air Choice One’s proposal], so that passengers can connect 
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to Southwest Airlines flights. The community also wants to continue supporting SeaPort’s 

flights to Memphis.

Harrison

The Department received a letter from Jeff Crocket, the Mayor of Harrison, stating that the City 

of Harrison supports SeaPort. He states that SeaPort has increased enplanements by 77% in one 

year and that SeaPort’s flights to Memphis and Kansas City have supported their business and 

leisure travelers.

We also received a letter from the Airport Manager at Boone County Regional Airport. She 

states “[t]he Boone County Airport Administrative Board is unanimous in their decision to 

[recommend] SeaPort to remain as our Essential Air Service carrier.” She cites SeaPort’s 

involvement in meeting the community’s travel needs and minimal cancellations. Further, she 

says that Air Choice One would not be a good fit for the community, because service to St. Louis 

does not meet the needs for local businesses. In addition, the airport has not received one 

complaint about SeaPort’s service in the last two years.

Hot Springs

The Department received a letter from Ruth Carney, Mayor of Hot Springs. She states that the 

City of Hot Springs, the Hot Springs Memorial Airport Committee, the Hot Springs Chamber of 

Commerce, the Hot Springs Advertising & Promotion Commission, all “wholeheartedly” support 

SeaPort as their selection. She says that the City believes SeaPort “will best serve our 

community based on our experiences and their proven track record of providing [EAS] to Hot 

Springs during the past twenty-two (22) months.”

Decision

We have decided to select SeaPort to continue to serve El Dorado, Harrison, and Hot Springs. 

All three communities support SeaPort2 and SeaPort requires less subsidy than Air Choice One 

for El Dorado and Hot Springs. In addition, Harrison stated that service to St. Louis, as proposed 

by Air Choice One, does not meet their needs. While Air Choice One’s proposal for Harrison 

requires less subsidy than SeaPort’s proposal, when viewed as all three communities together, 

SeaPort’s proposal (using the lower-priced option for Hot Springs) requires a lower annual 

subsidy than Air Choice One’s proposal ($5.99 million vs. Air Choice One’s $6.08 million). 

Finally, we note that enplanements have increased dramatically under SeaPort’s service.

Nonetheless, we remained concerned about the subsidy per passenger at Hot Springs. There has 

been an increase in enplanements at Hot Springs since SeaPort initiated an alternate service 

pattern on July 15, 2011, changing two of its three Memphis flights to Dallas Love Field.3 

However, the community is subject to the $200 per subsidy per passenger cap, therefore, we will 

examine traffic levels after 12 months of continued service and take appropriate action if the per 

 2 By endorsing SeaPort, the three communities effectively waive their right to 15-seat aircraft, which we consider 

only in effect for the two-year term after SeaPort inaugurates service.

3 The Department approved the alternate service pattern in Order 2010-6-7, June 3, 2010.
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passenger subsidy levels exceed $200.4 For this reason, we are selecting Option #2 for Hot 

Springs at the lower annual subsidy of $1,474,388 vs. Option #1 at 2,116,435. We expect the 

community and the carrier to work aggressively to increase traffic at Hot Springs to lower the per 

passenger subsidy and avoid termination of subsidized EAS.

We shall make this selection at El Dorado/Camden, Harrison, and Hot Springs contingent upon 

the Department’s receiving properly executed certifications from SeaPort that it is in compliance 

with the Department’s regulations regarding drug-free workplaces and nondiscrimination, as 

well as the regulations concerning lobbying activities.

Carrier Fitness

49 U.S.C. 41737(b) requires that we find an air carrier fit, willing, and able to provide reliable 

service before we may subsidize it to provide essential air service. SeaPort is subject to the 

Department’s continuing fitness requirements, and no information has come to our attention that 

would cause us to question the carrier's fitness at this time. We have contacted the Federal 

Aviation Administration, and it has raised no concerns that would negatively affect our fitness 

finding. We therefore conclude that the carrier remains fit to conduct the operations proposed 

here.

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

ACCORDINGLY,

1. We select SeaPort Airlines, Inc., to provide essential air service at El Dorado/Camden, 

Harrison, and Hot Springs, Arkansas;

2. We set the final rate of compensation for SeaPort Airlines, Inc., for the provision of essential 

air service at El Dorado/Camden, Harrison, and Hot Springs, Arkansas, as described in 

Appendix C;

3. We direct SeaPort Airlines, Inc., 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 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. We find that SeaPort Airlines, Inc., continues to be fit, willing and able to operate as a 

commuter carrier and capable of providing reliable essential air service at El Dorado/Camden, 

Harrison, and Hot Springs, Arkansas; 

5. This docket will remain open until further order of the Department; and

 

4 Congress first established the $200 ceiling under P.L. 101-164 for fiscal year 1990, and reestablished it in fiscal 

years 1994-1999. The ceiling was made permanent by P.L. 106-69, the Department of Transportation and Related 

Agencies Appropriations Act of 2000.
-5-

6. We will serve copies of this order on the Mayors of El Dorado, Camden, Harrison, and Hot 

Springs, and the Airport Managers of South Arkansas Regional Airport at Goodwin Field (El 

Dorado/Camden), Boone County Regional Airport (Harrison), and Hot Springs Memorial Field 

Airport, SeaPort Airlines, Inc., and Multi-Aero, Inc. d/b/a Air Choice One.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is at

http://www.regulations.gov
Appendix A

AREA MAP

This map is provided by Planet Profitability Forecasting System and is being used with express permission of the 

copyright holder, Sabre Airline Solutions®.
Appendix B

Page 1 of 3

SeaPort Airlines, Inc.

El Dorado/Camden, AR

2 RT ELD-DAL + 1 RT ELD-MEM

18 Weekly Round Trips (3 x 6/day week)

Departures 1,825

Block Hours 2,062.5

Projected Annual Passengers 5,500

REVENUES

Operating Revenue $425,410

Other Revenue $4,680 

TOTAL Revenue $430,090

EXPENSES

Direct

Insurance $ 73,269

Fuel/Oil $ 860,413

Flying Operations $ 765,363

Maintenance $ 575,689

Total Direct $ 2,274,734 

Total Indirect $ 454,947 

TOTAL Expenses $ 2,729,681

Operating Loss ($ 2,299,590)

Return (5%) $ 136,484

Annual Compensation Requirement $ 2,436,074
Appendix B

Page 2 of 3

SeaPort Airlines, Inc.

Harrison, AR

2 RT HRO-MEM + 1 RT HRO-MCI

18 Weekly Round Trips (3 x 6/day week)

Departures 1,825

Block Hours 1,904.3

Projected Annual Passengers 7,000

REVENUES

Operating Revenue $595,791

Other Revenue $6,554 

TOTAL Revenue $602,345

EXPENSES

Direct

Insurance $ 67,650

Fuel/Oil $ 794,423

Flying Operations $ 735,489

Maintenance $ 531,536 

Total Direct $ 2,129,098

Total Indirect $ 425,819 

TOTAL Expenses $ 2,129,098

Operating Loss ($ 1,952,572)

Return (5%) $ 127,746

Annual Compensation Requirement $ 2,080,318
Appendix B

Page 3 of 3

SeaPort Airlines, Inc.

Hot Springs, Arkansas

1x HOT-DAL + 1x HOT-ELD-DAL + 1x HOT-MEM

18 Weekly Round Trips (3 x 6/day week)

Departures 1,825

Block Hours 1,545.3

Projected Annual Passengers 6,200

REVENUES

Operating Revenue $740,425

Other Revenue $8,145 

TOTAL Revenue $748,570

EXPENSES

Direct

Insurance $ 54,898

Fuel/Oil $ 644,676

Flying Operations $ 633,336

Maintenance $ 431,342 

Total Direct $ 2,764,252

Total Indirect $ 352,851 

TOTAL Expenses $ 2,117,103

Operating Loss ($ 1,368,533)

Return (5%) $ 105,855

Annual Compensation Requirement $ 1,474,388

 
Appendix C

Page 1 of 3

SeaPort Airlines, Inc.

Essential Air Service to be Provided at El Dorado/Camden, Arkansas

Effective Period: November 1, 2011, through October 31, 2013

Scheduled Service: 12 nonstop round trips each week to Dallas Love Field and 6 nonstop round 

trips each week to Memphis International Airport

Aircraft: Pilatus PC-12, 9 seats

Rate per Eligible Flight1: $1,335

Weekly Ceiling2: $48,060

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 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; 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 complete, 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 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.

Funds are not currently available for performance under this order beyond November 18, 2011. The Department’s 

obligation for performance under this order beyond November 18, 2011, is subject to the availability of appropriated 

funds from which payment for services can be made. No legal liability on the part of the Department for any 

payment may arise for performance under this order beyond November 18, 2011, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond November 18, 2011, the 

Department will provide notice in writing to the carrier.

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.

 1 Annual compensation of $2,436,074, divided by 1,825 annual departures (36 weekly departures x 52 weeks x 97.5 

percent completion). 2 36 arrivals and departures per week multiplied by $1,335 per flight.
Appendix C

Page 2 of 3

SeaPort Airlines, Inc.

Essential Air Service to be Provided at Harrison, Arkansas

Effective Period: November 1, 2011, through October 31, 2013

Scheduled Service: 12 nonstop round trips each week to Memphis International Airport and 

6 nonstop round trips each week to Kansas City International Airport

Aircraft: Pilatus PC-12, 9 seats

Rate per Eligible Flight1: $1,140

Weekly Ceiling2: $41,040

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 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; 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 complete, 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 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.

Funds are not currently available for performance under this order beyond November 18, 2011. The Department’s 

obligation for performance under this order beyond November 18, 2011, is subject to the availability of appropriated 

funds from which payment for services can be made. No legal liability on the part of the Department for any 

payment may arise for performance under this order beyond November 18, 2011, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond November 18, 2011, the 

Department will provide notice in writing to the carrier.

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.

 1 Annual compensation of $2,080,318, divided by 1,825 annual departures (36 weekly departures x 52 weeks x 97.5 

percent completion). 2 36 arrivals and departures per week multiplied by $1,140 per flight.
Appendix C

Page 3 of 3

SeaPort Airlines, Inc.

Essential Air Service to be Provided at Hot Springs, Arkansas

Effective Period: November 1, 2011, through October 31, 2013

Scheduled Service: 6 nonstop round trips and 6 one-stop round trips each week to Dallas Love 

Field and 6 nonstop round trips each week to Memphis International Airport

Aircraft: Pilatus PC-12, 9 seats

Rate per Eligible Flight1: $808

Weekly Ceiling2: $29,088

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 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; 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 complete, 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 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.

Funds are not currently available for performance under this order beyond November 18, 2011. The Department’s 

obligation for performance under this order beyond November 18, 2011, is subject to the availability of appropriated 

funds from which payment for services can be made. No legal liability on the part of the Department for any 

payment may arise for performance under this order beyond November 18, 2011, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond November 18, 2011, the 

Department will provide notice in writing to the carrier.

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.

 1 Annual compensation of $1,474,388, divided by 1,825 annual departures (36 weekly departures x 52 weeks x 97.5 

percent completion). 2 36 arrivals and departures per week multiplied by $808 per flight.