### O rder: 2015

- 4

- 9

Served: April 16, 2015



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 16 th 

### day of April , 20 1 5

ORDER REQUESTING PROPOSALS

Summary

By this O rder, the U.S. Department of Transportation (the Department) is requesting

proposals from air ca rriers interested in providing E ss ential A ir S ervice (EAS) at Hydaburg,

Alaska

, for a new contract period beginning November 1, 201 5 , with or without subsidy

. (See

Appendix A for a map). Air c arriers should file their proposals no later than May 21, 2015

.

Background

By Order 2011

- 7

- 12 ( July 27, 2011 ), the Department selected Venture Travel, LLC, operating

as Taquan Air Service (Taquan Air)

, to provide EAS at Hydaburg with three weekly nonstop

round trips to Ketchikan using 6

- passenger de Havilland Canada DHC

- 2 Beaver aircraft for

the con tract period from November 1, 2011, through October 31, 2015, for an annual subsidy

of $151,773

.

The complet e public file for EAS at Hydaburg may be accessed online through the Federal

Dockets Management System at www.regulations.gov by entering “DOT

- OST

- 1999

- 6245 ” in

the “Search for Rules, Comments, Adjudications, or Supporting Documents” field.

Request for Proposals

As the end of the current contract approaches, the Department is requesting proposals from air

c arriers interested in providing EAS at Hydaburg

, with subsidy support if necessary , for a new

contract period beginning November 1

, 201 5

. Carriers should file their proposals no later

than May 21

, 20 15

. Staff will the n docket the proposals, thereby makin g them public

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

Essential Air Serv ice at

HYDABURG, ALASKA

Under 49 U.S.C. § 41731 et seq

. DOT

- OST

- 1999

- 6245

### - 2

-

them to submit their final comments. We will give full consideration to all proposals that are

timely filed. 1



### Interested air carriers should prepare t heir proposals with every expectation that their initial

proposals will represent their final and only proposals. However, we retain the discretion to

negotiate proposals with carriers when we deem it desirable; in such cases, of course, we will

give all applicants the same opportunity. We also retain the discretion to reject outright all

unreasonable or unrealistic proposals and re

- solicit a new round of proposals. However,

negotiation and rejection are only occasional exceptions to the rule.

We are he re 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. Air carrier proposals should be submitted to the Department with all mater ials

merged into a single document. In addition, because the document will be published on

www.regulations.gov

, each page should be formatted to be viewed online. We expect

proposals to adequately describe the s ervice 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, we recommend they include information concerning proposed

schedules and projected block hours . In addition, applicants are urged to provide financial

data supporting their subsidy requests, including information on their projected expenses and

revenues. We strongly encourage clear, well

- documented proposals that will facilitate their

evaluation by the affected communit ies and the Department. 2



### With specific respect to Hydaburg, carriers should provide sufficient capacity to accommodate

historical levels of traffic. In that regard, as is typically the case in Alaska, significantly more

freight and mail flow from the hub to the EAS community than from the EAS community to

the hub. In order to help carriers make traffic and revenue projections, we have included

historical traffic in Appendix B. We are here requesting proposals for three weekly nonstop

round trips to Ketchikan, the closest hub and Hydaburg’s principal historical destination. As

always, we will formally solicit the views of the community and State on any service options

we receive before making a long term carrier

- selecti on decision. The community and air

1 Carriers should not expect th e Department to accept late fil ings. In cases where a carrier proposes to provide

EAS without subsidy and we determine that basic EAS, as required by 49 U.S.C. § 41732, can be reliably

provided without such compensation, we typically will no t 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 EAS for an eligible place in Alaska, 49 U.S.C. § 41733(c )(1) directs

us to consider six f actors: (1) service reliability; (2 ) contractual and marketing arrangements with a larger carrier

at the hub; (3 ) interline arrangements with a larger carrier at the hub; (4 ) community views, giving substantial

weight to the views of the elected official s representing the users; (5) the experience of the applicant in

providing, in Alaska, scheduled air service or significant patterns of non

- scheduled air service; (6 ) whether the

carrier has included a plan in its proposal to market its service to the commu nity. In addition, the Consolidated

Appropriations Act, 2014, Public Law No. 113

- 76, and continued in the Continuing Appropriations Resolution,

2015, Public Law No. 113

- 164, provides that when selecting a carrier to provide EAS, the Department may

conside r 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 Essential Air Service

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

-

carriers are encouraged to work together in advance of the due date for proposals to craft a

service pattern that is desirable to the community and meets the operational needs of the

airline interested in submitting a pr oposal.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying

activities, drug

- free workplaces, and nondiscrimination. 3 

### Consequently, all carriers receiving

Federal subsidy for EAS must ce rtify that they are in compliance with Department regulations

regarding drug

- free workplaces and nondiscrimination, and those carriers whose subsidies

exceed $100,000 over the life of the contract must also certify that they are in compliance with

the regu lations 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 information

regarding these requirements should contact the Offic e of Aviation Analysis at

(202) 366

- 5903. 4



### This Order is issued under authority delegated in 49 CFR Part 1.25a(b) and re

- delegated to the

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We request that carriers interested in providing Essential Air Service at Hydaburg, Alaska

, submit their proposals, with subsidy support if necessary , no la ter than May 21

, 20 15. The

proposals should be e

- mailed to: michael.f.martin@dot.gov with the title “Proposal to Provide

E AS at Hydaburg ”; 5



### 2. Th is docket will remai n open until further O rder of the Depart ment; and

3 . We will serve copies of this O rder on the mayor of Hydaburg

, the Alaska Department of

Transportation & Public Facilities

, and the service list for this docket.

Persons entitled to petition the Department for review of this Order under the D epartment’s

Regulations, 14 CFR Part 385.31(a), must file such petitions within seven (7) days after the

date of service of this Order.

3 The regulations applicable to these areas are: (1) 49 CFR Part 20

– New restrictions on lobbying; (2) 49 CFR

Part 21

– N ondiscrimination in federally

- assisted programs of the Department of Transportation

– Effectuation of

title VI of the Civil Rights 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) 2 CFR Part 1200

– Government

- wide debarment

and suspension (non

- procurement) and government

- wide requirements for drug

- free workpl ace (grants).

4 The certifications are also available on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

rural

- air

- service /essential

- air

- service

. 5 Questions regarding filings in response to this O rder may be directed to Michael Martin at (202) 366

- 6494 or

michael.f.martin@dot.gov

.

### - 4

-

This Order 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

o nline at www.regulations.gov

.

### Appendix A

AREA MAP

### Appendix B

Historical Traffic

- Hydaburg, Alaska

Origination Destination Origin and Destination

Year Quarter Pax Freight

PEQ Mail PEQ Total Pax Freight

PEQ Mail PEQ Total Pax Freight

PEQ Mail

PEQ Total

2011 1 3 0 1 4 2 0 5 7 5 0 5 11

2011 2 13 0 1 14 12 0 5 18 25 1 6 31

2011 3 17 0 1 18 12 1 5 18 29 1 6 35

2011 4 1 0 1 2 2 0 5 7 3 0 6 9

Total 34 0 3 37 28 2 20 50 62 2 22 87

2012 1 1 0 1 2 1 0 4 6 2 0 5 7

2012 2 4 0 1 5 4 1 4 9 8 1 5 13

2 012 3 4 0 1 5 6 0 4 10 10 0 5 15

2012 4 0 0 1 1 2 1 5 8 2 1 6 8

Total 9 0 3 12 13 2 17 32 22 2 20 44

2013 1 4 0 1 5 1 1 5 6 5 1 5 11

2013 2 3 0 1 4 3 0 4 7 6 0 5 11

2013 3 7 0 1 8 7 1 7 14 14 1 8 22

2013 4 2 0 1 3 0 1 5 6 2 1 6 8

Total 16 0 3 19 11 2 21 34 27 2 24 53

2014 1 4 0 1 5 2 0 4 6 6 0 5 11

2014 2 12 0 1 13 15 1 4 20 27 1 5 32

2014 3 9 0 0 9 8 1 4 12 17 1 4 22

2014 4 3 0 0 4 4 1 3 8 7 1 4 11

Total 28 0 2 31 29 2 15 46 57 2 17 77

### Appendix 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 sched uled 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 t he 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 loc ate 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 fo r 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 unilat erally, 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 stipula ted 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.

Subsidy contracts are subject to, and incorporate by reference, relevant statutes and Department

regulations, as they may be amende d 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 [DATE]. The Government’s

obligation for perfo rmance under this Order beyond [DATE], 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 [DATE], until fu nds are made

available to the Department for performance. If sufficient funds are not made available for

performance beyond [DATE] , the Department will provide notice in writing to the carrier.

All claims for payment, including any amended cl aims, must b e 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 st 

### ; August claims must be submitted by November 30 th 

### , and so on.