Order 2010-12-30

Served: December 23 , 2010

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 23rd day of December, 2010

ORDER PROHIBITING SUSPENSION OF SERVICE AND

REQUESTING PROPOSALS

Summary

By this order, the Department is prohibiting Pacific Wings L.L.C. (Pacific Wings) from 

suspending service at Kalaupapa, Hawaii, and requesting proposals from carriers 

interested in providing essential air service (EAS) at the community for a two-year 

period, with or without subsidy. (See Appendix A for a service area map). Carriers 

should file their proposals no later than January 27, 2011.

Background

Pacific Wings has provided subsidy-free EAS at Kaluapapa since April 1, 2007. On 

December 6, Pacific Wings filed a 90-day notice of its intention to suspend its subsidyfree service at Kalaupapa, effective March 6, 2011. Pacific Wings currently provides 21 

weekly one-stop (at Molokai) and nonstop round trips between Kalaupapa and Honolulu

with 9-seat Cessna Caravan aircraft. A copy of the Pacific Wings’ filing may be accessed 

online through the Federal Docket Management System (FDMS) at 

http://www.regulations.gov/ by doing a search on Docket DOT-OST-2000-6773.

Decision

Pacific Wings’ proposed termination of service would leave Kalaupapa with no 

scheduled service. Thus, the Department must prohibit the carrier from terminating such 

service at the end of its 90-day notice period, and require it to maintain 12 nonstop round 

trips per week to Honolulu using its 9-seat Cessna Caravan aircraft. We will also require 

Pacific Wings to continue to maintain that level of service at the community for 

successive 30-day periods until we have completed processing the carrier-replacement 

case and the selected carrier has actually started full EAS.

Essential Air Service at

KALAUPAPA, HAWAII

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

Docket DOT-OST-2000-6773
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Request for Proposals

Carriers interested in providing service at Kalaupapa, with or without subsidy, should file 

their proposals no later than January 27, 2011. Staff will then docket proposals, thereby 

making them public, and shortly afterwards will provide a summary of the proposals to 

the community and ask them for their final comments. We will give full consideration to 

all proposals filed in a timely manner.1

Interested 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. 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. 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, they might want to 

include proposed schedules as well as supporting data for their subsidy requests, such as 

projected block hours, revenues and expenses. We strongly encourage clear, welldocumented proposals that will facilitate their evaluation by the affected community and 

the Department.2

The Department expects proposals that are consistent with what the community currently 

receives (12 weekly round trips with nine-seat aircraft). We encourage proposals that 

meet those requirements in an efficient manner. Carriers are also welcome to propose 

more than one service option, if they choose; they need not limit themselves to those 

requirements if they envision other, potentially more attractive service possibilities --

different hubs, for example -- with subsidy requirements that remain competitive.

The community and air carriers are encouraged to work together in advance of the due 

date for proposals to craft service patterns that are desirable to the community and meet 

the operational requirements of the airline.

 

1 Carriers should not expect the Department to accept late fillings. In cases where a carrier proposes to 

provide essential air service without subsidy and we determine that service can be reliably provided without 

such compensation, we do 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 essential air service, 49 U.S.C. 41733(c) (1) directs us to to 

consider four factors: (a) scheduled service reliability; (b) contractual and marketing arrangements with a 

larger carrier to ensure service beyond the hub; (c) interline arrangements that the applicant has made with a 

larger carrier at the hub; and (d) community views, giving substantial weight to the views of the elected 

officials representing the users. In addition, the Consolidated Appropriations Act, 2008, Public Law 110-

161, 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.
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New Filing Procedures

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 

http://www.regulations.gov/, each page should be formatted to be viewed online and for 

easy printing.

Service and Traffic History

Pacific Wings has served Kaluapapa since 1998. In order to assist carriers in making 

their passenger and revenue forecasts, we have provide historical passenger traffic in 

Appendix B. During the year ended December 31, 2009, Kaluapapa averaged 6.7

enplanements a service day, a decrease when contrasted with the previous two calendar 

years.

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 essential air service 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 rate-term 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

Community and State Comments

The community and State are welcome to submit comments at any time. We encourage 

prospective applicants to contact the community before they submit their proposals so 

that they can tailor them to the community’s needs, as they will not be able to amend 

them after the due date. As noted earlier, we will provide a summary of the proposals to 

the civic parties and ask them to submit their final comments shortly after January 27, the 

deadline for carrier proposals.

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

 

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) 49 CFR Part 29 -- Government-wide debarment and suspension (non-procurement) and governmentwide requirements for drug-free workplace (grants).

4 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.
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ACCORDINGLY,

1. The Department prohibits Pacific Wings L.L.C. from suspending service at 

Kaluapapa, Hawaii, at the end of its 90-day notice period and requires it to maintain at 

least 12 nonstop round trips per week between the community and Honolulu, Hawaii, 

with 9-seat Cessna Caravan aircraft through April 5, 2011, or until a carrier capable of 

providing reliable air service begins full service, whichever comes first;5

2. We request that carriers interested in providing essential air service at Kaluapapa, 

Hawaii, submit their proposals, with or without subsidy requests, no later than 

January 27, 2011. The proposals should be e-mailed to: EAS@dot.gov with the title 

“Proposal to Provide Essential Air Service at Kaluapapa, Hawaii, Docket DOT-OST2000-6773.”;6

3. The Department directs Pacific Wings L.L.C. 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. This docket will remain open until further order of the Department; and

5. We will serve copies of this order on the community and the parties listed in 

Appendix D.

By:

SUSAN L. KURLAND

Assistant Secretary for Aviation

and International Affairs

(SEAL)

An electronic version of this document is available

at http://www.regulations.gov

 

5 In accordance with 49 U.S.C. 41734(c), we will extend Pacific Wings’ service obligation for successive 

30-day periods as necessary until full replacement service is provided.

6 Questions regarding filings in response to this order may be directed to Brian Swanson at (202) 366-5392 

or brian.swanson@dot.gov.
Appendix A

AREA MAP
Appendix B

Historical Enplanements1

Kaluapapa, Hawaii

Year Ended Recorded 

Passengers

Average 

Annual 

Enplanements2

Average 

Enplanements 

Per Service 

Day3 

31-Dec-03 3,232 1,616 5.2

31-Dec-04 3,257 1,629 5.2

31-Dec-05 3,737 1,869 6.0

31-Dec-06 2,642 1,321 4.2

31-Dec-07 6,358 3,179 10.2

31-Dec-08 6,576 3,288 10.5

31-Dec-09 4,209 2,105 6.7

1/1/2010 - 6/30/2010 1,119 560

Notes:

2. Origin-destination passengers divided by two.

1. Source: Order 2006-10-15 and USDOT Bureau of Transportation 

Statistics, Form T-100

3. Average annual enplanements divided by 313 effective annual service 

days, except for annual periods ended 12/31/2004 and 2008 (314 

effective annual service days).
Appendix C

Example ofGeneral 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 completely, 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 are not currently available for performance under this solicitation beyond [DATE]. The 

Department’s obligation for performance under this solicitation beyond [DATE] is contingent 

upon 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 [DATE], until funds are made available to the Department for performance. If 

funds are not made available for performance beyond [DATE], the carrier will receive notice in 

writing by the Department.

All claims for payment must be submitted within 60 days of the last day of service provided 

under this order.
Appendix D

SERVICE LIST

Air Greco/Wings Air Frontier Airlines, Daniel Shurz OST, Renee Williams

Air Sunshine, Inc. Frontier Flying, Bob Hajducovich Pacific Aviation Group, Craig Garrick

Air Sunshine, Mirmohammad Adili Frontline Aviation Pacific Aviation Group, Ron Rye

Air West, Inc., John Raatz Gem Air, Dan Schroeder Pacific Wings, Frank Ford

Air Wisconsin, Annette Daly Gem Air, JoAnn Wolters Pacific Wings, Greg Kahlstorf

Air Wisconsin, Jim Rankin Great Lakes Airlines, Chuck Howell Penn Air, Danny Seybert

Airline Associates, Bill Mishk Great Lakes Airlines, Doug Voss Penn Air, Scott Bloomquist

Alaska Airlines, Jeff Cole Gulfstream, Dave Hackett Pinnacle Airlines, Jennifer Gammill

Alaska Airlines, Sandy Sinick Gulfstream, Mickey Bowman Pinnacle Airlines, Megan Rosia

Allegiant Air, Brian Davis Gulfstream, T. Cooper Pinnacle Airlines, Phil Reed

American Airlines, Carl Nelson Homeland Security, Bill Ragan Planemasters, Inc., John Kessler

American Eagle, Jeff Hartz Homeland Security, David Bernier Planemasters, Inc., Paul Berliner

Atlantic Southeast, Jon Lindlief Horizon Air, Dan Russo Planemasters, Inc., Todd DeSimone

Atlantic Southeast, Roger Weston Horizon Air, Jennifer Thompson Raytheon, Mike Schiedt 

Aviation Technologies/Charter Air Transport, 

Jim Gallagher Horizon Air, Mike McQeen Saab Group, Polly Prelinger

Bemidji Aviation, Arlen Rinkenberger Horizon Air, Jeff Cole Scenic, Mary Schneider

Bemidji Aviation, Cori Rude ICEPR, Luis Irizarry Scenic, Mitzi Daines

Cape Air, Andrew Bonney Intrepid Internatl Air, Rick Eyk Seaborne Airlines, Shawn Lewis

Cape Air, Dan Wolf Island Air Charters, Linda House Seaport, Daniel Helland

Cape Air, J. Flaherty Jet Air, Daniel Wolford SeaPort Airlines. Jim Day

Classic Aviation, Tony Henderson Kenmore Air, Tim Brooks SeaPort Airlines, Nate Vallier

Colgan Air, Kevin Scott McCall Aviation, Dan Scott SeaPort Airlines. Rob McKinney

Colgan Air, Mike Colgan McCall Aviation, Michelle Shuttle America, Jerry Balsano

CommutAir, Andy Price Mesaba, John Spanjers SkyWest, Brad Rawson

CommutAir, Joel Raymond Mesaba, Max Shemesh SkyWest, Eric Christensen

Consultant, Robert Silverberg Midstar Airlines, Jeffrey Fonner SkyWest, Michael Thompson

Continental, Bruce Keiner Midwest Airlines, Greg Aretakis Sovereign Air, Bob Karns

Continental, Dan Weiss MN Aviation, Jose Maldonado Sovereign Air, Lois R. Barton

Continental, Lorry Halloway Multi Aero, Darnea Tatonduk, Robert Everts

Delta Air Lines Anthony Canitano Multi Aero, Shane Storz Tatonduk, Robert Ragar

Delta Air Lines, Dan Shuman Northern Air Cargo, David Karp Tradewind, Eric Zipkin

Delta Air Lines, Jeff Morgan Northern Air Cargo, Eric Van Andel Transport Azumah, Joel AnabilahAzumah

Delta Air Lines, Joe Esposito Northwest Airlines, Aaron Murray Trans States, Fred Oxley

Delta Air Lines, Sascha Vanderbellen Northwest, Tim McDonald Trans States, Gerry Wigmore

Delta Air Lines, Karen Zachary NYDC, Henok Araya United, Alicia Gabriel

Delta Air Lines, Kristal Murphy OST, Brian Swanson United, James Starnes

Dorado Jets OST, Dennis DeVany US Airways, Benjamin Slocum

Dorado Jets, Mark McKenna OST, Kevin Adams US Airways, Howard Kass

Era Aviation, Lori Goodman OST, Kevin Schlemmer US Airways, Jason Reisinger

Executive Airlines, Kate Soled OST, Michael Martin Warbelows Air Ventures, Art 

Warbelow

Administrator, Hawaii Department of 

Transportation, Airports Division

Administrator, Department of Health, 

State of Hawaii