Order: 2015-1-1

Served: January 6, 2015

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 6th day of January, 2015

Essential Air Service at

OGDENSBURG, NEW YORK DOT-OST-1997-2842

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

ORDER RE-SELECTING AIR CARRIER

Summary

By this Order, the Department is re-selecting Hyannis Air Service, Inc. d/b/a Cape Air 

(Cape Air) to provide Essential Air Service (EAS) at Ogdensburg, New York

(Ogdensburg) to Boston Logan International Airport (BOS) via Albany International 

Airport (ALB) using 9-passenger Cessna 402 aircraft for the four-year term from 

April 1, 2015, through March 30, 2019. The annual subsidy rates are as follows:1

Year Annual Subsidy

1 $2,419,820

2 $2,516,612

3 $2,617,277

4 $2,721,968

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

Background

By Order 2011-1-6 (January 7, 2011), the Department re-selected Hyannis Air Service, Inc. 

d/b/a Cape Air (Cape Air), to provide EAS at Ogdensburg for a four-year period beginning 

when Cape Air inaugurated its new service pattern, which offered through service to BOS 

(via ALB) until the 48th month thereafter.2

 Cape Air provides Ogdensburg with 3 daily 

round trips (21 per week) to ALB, with continuing service to BOS, using 9-passenger 

Cessna 402 aircraft for an annual subsidy of $1,708,911.

As the end of the contract was approaching, the Department issued Order 2014-10-5

(October 9, 2014) requesting proposals from air carriers interested in providing EAS at 

Ogdensburg for a new contract term. In response to that Order, two air carriers submitted 

proposals: Boutique Air and Cape Air.

Each air carrier’s complete proposal and community comments may be accessed online at 

www.regulations.gov by entering Docket number DOT-OST-1997-2842 in the search 

block.

Proposal of Boutique Air

Boutique Air submitted a proposal with two options, both using single-engine 9-passenger 

Pilatus PC-12 aircraft. Option 1 proposes 18 weekly nonstop round trips to BOS for an 

annual subsidy of $2,948,861. Option 2 proposes 12 weekly nonstop round trips to BOS 

and 12 weekly nonstop round trips to ALB (24 round trips total) for an annual subsidy of 

$3,610,182.

Proposal of Cape Air

Cape Air submitted two-year and four-year options to serve Ogdensburg from BOS via 

ALB using 9-passenger Cessna 402 aircraft. Cape Air proposes to maintain its current 

service level, with three daily one-stop round trips (21 per week) to BOS. With regard to

its annual subsidy request, Cape Air states in its bid that, in order to align revenue with 

operating costs over time, the airline has incorporated a 4 percent increase in annual 

subsidy for each year of the EAS contract. Cape Air’s proposed subsidy is summarized 

below:

 2 Cape Air began its new service pattern at Ogdensburg, with through service to BOS on March 8, 2011, 

thereby making the contract expiration date March 31, 2015.
- 3 -

Ogdensburg proposed annual subsidy3

Two-Year Reselection Annual Subsidy

Year 1 $2,476,279

Year 2 $2,575,330

Four-Year Reselection

Year 1 $2,419,820

Year 2 $2,516,612

Year 3 $2,617,277

Year 4 $2,721,968

Community Comments

On October 28, 2014, the Department requested comments from Ogdensburg regarding 

this EAS air carrier-selection case. In response, The Honorable William D. Nelson, Mayor 

of Ogdensburg, submitted comments on behalf of the community, supporting Cape Air’s 

proposal to provide EAS for another four-year term. In his letter, Mayor Nelson wrote, 

“The City Council voted unanimously to endorse Cape Air as the provider of choice and 

believe they have provided the best proposal for Essential Air Service for Ogdensburg and 

North Country.” Mayor Nelson also added, “Cape Air has provided exceptional service to 

the community as our EAS provider over the past six years, with high customer 

satisfaction, exceptional on-time flight ratings, increased ridership, and tremendous 

community involvement. Because of this proven track record, the Council supports and 

encourages the USDOT to consider a four-year contract for EAS service with Cape Air.”

Decision

After carefully reviewing each air carrier’s proposal and taking into account community 

feedback, the Department has decided to re-select Cape Air for another four-year term. 

We base our decision on the five factors 49 U.S.C. § 41733(c)(1) directs us to consider: 1) 

service reliability; 2) contractual and marketing arrangements with a larger carrier at the 

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

substantial weight to the views of the elected officials representing the users; 5) whether 

the carrier has included a plan in its proposal to market its service to the community. 

First, Cape Air has a proven record of providing reliable EAS at Ogdensburg, as well as 

several EAS communities. In addition, Cape Air’s service to BOS, a large hub airport,

coupled with its established interline ticketing and baggage agreements with most major 

U.S. airlines, will provide customers with seamless connections to the national air 

transportation system. Furthermore, Cape Air has community support, a key carrierselection criterion and included annual marketing expenses in its proposal, samples of print 

advertisements for its service, and Cape Air opened a ticket office in Ogdensburg to 

provide greater community awareness and ticket sales to the public. Lastly, Cape Air’s 

total subsidy request for a four-year contract offers the Department some savings vs. the 

 3 See Appendix B
- 4 -

carrier’s two-year contract and is significantly less expensive than that of Boutique Air’s

proposed subsidy.

The Department shall make this selection contingent upon its receiving properly executed 

certifications from Cape Air that it is in compliance with the Department’s regulations 

regarding drug-free workplaces and nondiscrimination, as well as the regulations 

concerning lobbying activities.4

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that the Department find an air carrier fit, 

willing, and able to provide reliable service before the Department may subsidize it to 

provide EAS. Cape Air is subject to the Department’s continuing fitness requirements, and 

no information has come to our attention that would cause us to question the air carrier’s 

fitness at this time. The Department has contacted the Federal Aviation Administration, 

and it has raised no concerns that would negatively affect our fitness findings. The 

Department therefore concludes that Cape Air is reliable and fit to conduct the operations 

proposed here.

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

ACCORDINGLY,

1. The Department re-selects Hyannis Air Service, Inc. d/b/a Cape Air to provide

Essential Air Service at Ogdensburg, New York, and establishes the annual subsidy rates

as described in Appendix C;

2. The Department directs Hyannis Air Service, Inc. d/b/a Cape Air 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 from the service date of this Order 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 carriers may forfeit their compensation for any claim 

that is not supported under the terms of this Order;

3. The Department finds that Hyannis Air Service, Inc. d/b/a Cape Air is fit, willing and 

able to operate as a commuter air carrier, and capable of providing reliable Essential Air 

Service at Ogdensburg, New York;

 4 The certifications are available online under “Reports and Publications” at 

http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/essential-air-service
- 5 -

4. This docket will remain open pending further Department action; and

5. The Department will serve a copy of this Order on the Mayor and Town Supervisor of 

Ogdensburg, New York; the Airport Manager of Ogdensburg International Airport; the 

Executive Director of Ogdensburg Bridge and Port Authority; Boutique Air, and Hyannis 

Air Service, Inc. d/b/a Cape Air.

By:

BRANDON M. BELFORD

Deputy Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at

www.regulations.gov
Appendix A

AREA MAP

Maps generated by the Great Circle Mapper - copyright © Karl L. Swartz.

 
 Appendix B

Page 1 of 2

Essential Air Service at Ogdensburg, New York
 Appendix B

Page 2 of 2
Appendix C

Page 1 of 2

Hyannis Air Service, Inc. d/b/a Cape Air

Essential Air Service to be provided at Ogdensburg, New York

DOT-OST-1997-2842

Contract Term: April 1, 2015, through March 30, 2019

Hub: Boston Logan International Airport (BOS)

via Albany International Airport (ALB)

Scheduled Service: 21 one-stop round trips per week to BOS

Aircraft: 9-passenger Cessna 402

Compensation Schedule:

Effective Period Annual Subsidy Rate per Flight1 Weekly Ceiling2

April 1, 2015 –

March 30, 2016 $2,419,820 $1,142 $47,964

April 1, 2016 –

March 30, 2017 $2,516,612 $1,188 $49,896

April 1, 2017 –

March 30, 2018 $2,617,277 $1,235 $51,870

April 1, 2018 –

March 30, 2019 $2,721,968 $1,285 $53,970

 1 Annual compensation divided by 2,119 annual departures (42 weekly departures x 52 weeks x 97 percent 

completion)

2 42 weekly departures multiplied by rate per flight
 Appendix C

Page 2 of 2

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 this rate, 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 service 

levels, the carrier may cease to provide service to that specific location without regards 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 contract 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 January 14, 2015. The 

Government’s obligation for performance under this Order beyond January 14, 2015, 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 January 14, 2015, until 

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

for performance beyond January 14, 2015, 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 31; August claims must be submitted by 

November 30, and so on.