Order: 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 16th day of April, 2015

ORDER REQUESTING PROPOSALS

Summary

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

proposals from air carriers interested in providing Essential Air Service (EAS) at Hydaburg, 

Alaska, for a new contract period beginning November 1, 2015, with or without subsidy. (See 

Appendix A for a map). Air carriers 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 contract period from November 1, 2011, through October 31, 2015, for an annual subsidy 

of $151,773.

The complete 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 

carriers interested in providing EAS at Hydaburg, with subsidy support if necessary, for a new 

contract period beginning November 1, 2015. Carriers should file their proposals no later 

than May 21, 2015. Staff will then docket the proposals, thereby making them public. 

Shortly afterwards, we will provide a summary of the proposals to the community and ask 

Essential Air Service at

HYDABURG, ALASKA

Under 49 U.S.C. § 41731 et seq.

DOT-OST-1999-6245
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them to submit their final comments. We will give full consideration to all proposals that are 

timely filed.1

Interested air carriers should prepare their 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 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. Air carrier proposals should be submitted to the Department with all materials 

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 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, 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 communities 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-selection decision. The community and air 

 1 Carriers should not expect the Department to accept late filings. 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 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 EAS for an eligible place in Alaska, 49 U.S.C. § 41733(c)(1) directs 

us to consider six factors: (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 officials 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 community. 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 

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 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.
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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 proposal. 

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 certify 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 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 information 

regarding these requirements should contact the Office 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 later than May 21, 2015. The 

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

EAS at Hydaburg”;5

2. This docket will remain open until further Order of the Department; and

3. We will serve copies of this Order 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 Department’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 – Nondiscrimination 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 workplace (grants).

4 The certifications are also available on the web at http://www.dot.gov/policy/aviation-policy/small-communityrural-air-service/essential-air-service.

5 Questions regarding filings in response to this Order may be directed to Michael Martin at (202) 366-6494 or

michael.f.martin@dot.gov. 
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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

online 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

2012 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 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.

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.

Funds may not be available for performance under this Order beyond [DATE]. The Government’s 

obligation for performance 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 funds 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 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 31st; August claims must be submitted by November 30th, and so on.