### Order 2013

- 11

- 3 Served: November 1, 2013



## UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on the 1 st 

### of November, 2013

Essential Air Service at
SIOUX CITY , IOWA , and WATERLOO , IOWA
Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 20 11

- 013 1 DOCKET DOT

- OST

- 2011

- 013 2

ORDER REQUESTING PROPOSALS
Summary By this Order , the Department is requesting proposals no later than December 2 , 2013
, from carriers interested in providing Essential Air Service (EAS) at Sioux City and /or Waterloo
, Iowa , for the period beginning May 1, 2014 , for two or more years , with or without subsidy.
Background By Order 201 1

- 12

- 2
, December 8 , 201 1
, the Department selected American Eagle A irlines (American Eagle ) to provide 1 3 nonstop round trips per week each between Sioux City and Waterloo , Iowa, and Chicago O’Hare International Airport ( ORD )
, for a two

- year period beginning when American Eagle inaugurated EAS at both communities through the end of the 24 th 

### month thereafter. The carrier inaugurated service at both communities on April 3, 2012, thus making the expiration date April 30, 2014

. All of American Eagle ’s service is provided with regional jet aircraft having 44 or more seats and the annual subsidy is set at $ 1, 512,799 at Sioux City and $1, 541,824 at Waterloo

. At Sioux City, the carrier was selected to provide service with 50

- seat aircraft
, and 44

- seat aircraft at Waterloo.
Request for Proposals As the end of the current rate te rm s approach, we are requesting proposals from carriers int erested in providing service at Sioux City and /or Waterloo
, with or without subsidy, for the period beginning May 1, 2014 . Carriers should file their proposals by December 2 , 2013

. S taff will the n docket the proposals, thereby making them public. Shortly afterwards, we will provide copies of all timely filed proposals to the communit ies and request community comments by a specified date . We will give full

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consideration to all proposals filed in a timely manner. 1 

### Interested carriers should prepare their proposals with every expectation that their initial proposals will also be their final and only proposals. 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 , if necessary, solicit a new round of proposals. However, we anticipate that negotiation or rejection will remain 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 propos ed 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 that 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 communit ies and the Department. 2


### As always, we will formally solicit each community ’ s views on any service options we receive before making a long

- term , carrier

- selection decision. The communit ies and air carrier s are encouraged to work together in advance of the due date for proposals to craft service pattern s that are both desirable to the communit ies and meet the operational needs of the airlines, as carriers cannot amend their proposal s after the due date.
We encourage proposals that meet the communit ies’ requirements in an efficient manner. Waterloo and Sioux City are strong traffic generat ing communities and so we expect proposals to be consistent with what the communities are currently receiving, namely 13 nonstop round trips per week using regional jets to Chicago O’Hare or another suitable hub

. 3 

### Carriers are also welcome to propose more than one service option, if they choose; they need not limit themselves to a single specific service pattern if they envision other, potentially more attr active service possibilities

– different hubs, or longer terms for the contracted service

– with subsidy requirements that remain competitive.

1 Carriers should not expect the Department to accept late filings. In ca ses where a carrier proposes to provide E AS without subsidy and we determine that basic EAS
, required by 49 U.S.C. §41732
, can be reliably provided without such compensation, we typically 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 EAS for an eligible place not in Alaska, 49 U.S.C. § 41733(c) (1) directs us to consider five factors: (1) service reliability; (2) contractual and mark eting arrangements with a larger carrier at the hub; (3) interline arrangements with a larger carrier at the hub; (4) communit y views; and (5) whether the carrier has included a plan in its proposal to market the service. In addition , The Consolidated and Further Continuing Appropriations Act, 2012, Public Law No. 112

- 55, and continued by the Full

- Year Continuing Appropriations Act, 2013, Public Law No. 113

- 6, provides that when selecting a carrier to provide EAS, the Department may consider the relative su bsidy 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 EAS 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 This works out to two round trips per day with regional jets, three round trips per day with 30

- seat aircraft, and four round trips per day with 19

- seat ai rcraft.

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Filing Format Carrier proposals should be submitted to the Department with all materials merged into a single doc ument. In addition, because the document will be published on

www.r egulations.gov, each page should be formatted to be viewed online.

Historical Traffic In o rder to assist carriers in making traffic and revenue projections, we have included historical tr affic for the communit ies in Appendi x B for the most recent annual periods. For the most recent 12

- month period for which data are available, Sioux City had 81 enplanements per day, and Waterloo had 60

. Other Carrier Requirements The Department is resp onsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces
, and nondiscrimination. 4 

### Consequently, all carriers receiving Federal subsidy to support EAS must certify that they are in compliance with Department reg ulations 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, the selected carrier will be required to submit them in o rder to receive subsidy. Interested carriers requiring more detailed information regarding these requirem ents, as well as copies of the certifications, should contact the Office of Aviation Analysis at (202) 366

- 5903 . The Department is prohibited from paying subsidy to carriers that do not submit these documents.
Community Comments Civic officials and the S tate s are welcome to submit comments on the proposals at any time. 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 December 2
, 2013, the due date for carrier propo sals.

This Order is issued under authority delegated in 49 CFR Part 1. 25a(b) and re

- delegated to the Directo r, Office of Aviation Analysis.
ACCORDINGLY,

1

. The Department requests proposals from carriers interested in providing EAS at Sioux City
, Iowa , and /or Waterloo
, Iowa . Carriers should submit proposals, with subsidy if necessary, by December 2 , 2013 . Proposals should be emailed to EAS@dot.gov, with the title “Proposal (s) to Provide EAS at Sioux City
, Iowa , and/or Waterloo
, Iowa ” 5 

### ;

2

. Th ese D ock et s will remain open until further Order of the Department; and

3 . We will serve this Order on the s ervice l ist for th ese Docket s

.

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

- policy/small

- community

- rural

- air

- service/essential

- air

- service

. 5 Questions regarding filings may be directed to Kevin Adams at 202

- 366

- 1047 or Kevin.Adams@dot.gov

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Persons entitled to petition the Department for review of this Order under the Department’s Regulations, 14 CFR Part 385. 3 1 , must file such petitions within seven ( 7 ) days after the date of service of this Order

.
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 at http://www.regulations.gov

### Appendix A

Nonstop Great Circle Miles to Sioux City (SUX) OMA, Omaha, 80 FSD, Sioux Falls, 83 FOD, Fort Dodge, 112 DSM, Des Moines 152 MCW, Mason City, 164 RST, Rochester, 222 MSP, Minneapolis, 233 ORD, Chicago, 436
Nonstop Great Circle Miles to Waterloo ( ALO ) CID, Cedar Rapids 58 MCW, Mason City, 63 DBQ, Dubuque 87 FOD, Fort Dodge, 91 RST, Rochester, 93 MLI, Moline, 124 MSP, Minneapolis 166 ORD, Chicago 234Appendix B-1 Historical Traffic between Sioux City, Iowa (SUX), and Minneapolis (MSP) and Chicago (ORD) 1/ Passengers Flights Passengers Hub Enplaned Deplaned O&D To Hub From Hub Total Per Flight 2010 9 MSP 2,238 2,303 4,541 83 82 165 27.5 2010 10 MSP 2,505 2,422 4,927 88 88 176 28.0 2010 11 MSP 2,416 2,389 4,805 82 82 164 29.3 2010 12 MSP 2,503 2,514 5,017 85 85 170 29.5 2011 1 MSP 2,109 2,047 4,156 86 86 172 24.2 2011 2 MSP 1,741 1,744 3,485 73 73 146 23.9 2011 3 MSP 1,937 2,064 4,001 89 89 178 22.5 2011 4 MSP 1,973 2,067 4,040 84 83 167 24.2 2011 5 MSP 2,302 2,286 4,588 86 86 172 26.7 2011 6 MSP 2,256 2,437 4,693 83 83 166 28.3 2011 7 MSP 2,708 2,767 5,475 81 80 161 34.0 2011 8 MSP 2,932 2,949 5,881 87 87 174 33.8 YE 8/31/11 27,620 27,989 55,609 1,007 1,004 2,011 27.7

2011 9 MSP 2,471 2,467 4,938 63 63 126 39.2 2011 10 MSP 2,459 2,468 4,927 62 61 123 40.1 2011 11 MSP 2,260 2,240 4,500 57 57 114 39.5 2011 12 MSP 2,313 2,296 4,609 57 57 114 40.4 2012 1 MSP 2,022 1,983 4,005 57 57 114 35.1 2012 2 MSP 1,834 1,860 3,694 52 52 104 35.5 2012 3 MSP 1,873 1,881 3,754 53 53 106 35.4 2012 4 MSP 100 95 195 3 4 7 27.9 2012 4 ORD 2,067 2,082 4,149 56 55 111 37.4 2012 5 ORD 2,361 2,281 4,642 54 54 108 43.0 2012 6 ORD 2,296 2,383 4,679 54 54 108 43.3 2012 7 ORD 2,308 2,392 4,700 57 57 114 41.2 2012 8 ORD 2,445 2,603 5,048 58 57 115 43.9 YE 8/31/11 26,809 27,031 53,840 683 681 1,364 39.5

2012 9 ORD 2,445 2,389 4,834 55 55 110 43.9 2012 10 ORD 2,227 2,284 4,511 58 58 116 38.9 2012 11 ORD 2,141 2,157 4,298 55 55 110 39.1 2012 12 ORD 2,071 2,054 4,125 55 55 110 37.5 2013 1 ORD 1,890 1,843 3,733 56 56 112 33.3 2013 2 ORD 1,759 1,789 3,548 49 49 98 36.2 2013 3 ORD 2,024 2,148 4,172 54 54 108 38.6 2013 4 ORD 1,923 2,020 3,943 51 51 102 38.7 2013 5 ORD 2,372 2,221 4,593 56 56 112 41.0 2013 6 ORD 2,177 2,297 4,474 54 54 108 41.4 2013 7 ORD 2,119 2,183 4,302 58 58 116 37.1 2013 8 ORD 2,184 2,297 4,481 57 57 114 39.3 YE 8/31/11 25,332 25,682 51,014 658 658 1,316 38.8 Source: T-100 Segment Report

1/ Prior to American Eagle's selection at Sioux City, Delta Connection served the community on a subsidyfree basis to Minneapolis.Appendix B-2 Historical Traffic between Sioux City, Iowa (SUX), and Minneapolis (MSP) and Chicago (ORD) Passengers Flights Passengers Hub Enplaned Deplaned O&D To Hub From Hub Total Per Flight 2010 9 MSP 1,982 2,031 4,013 86 85 171 23.5 2010 10 MSP 2,057 1,947 4,004 87 87 174 23.0 2010 11 MSP 1,894 1,913 3,807 82 82 164 23.2 2010 12 MSP 1,903 1,865 3,768 79 78 157 24.0 2011 1 MSP 1,548 1,590 3,138 63 61 124 25.3 2011 2 MSP 1,443 1,418 2,861 53 52 105 27.2 2011 3 MSP 1,845 1,891 3,736 88 88 176 21.2 2011 4 MSP 1,612 1,576 3,188 89 89 178 17.9 2011 5 MSP 1,837 1,833 3,670 85 85 170 21.6 2011 6 MSP 2,011 1,991 4,002 88 87 175 22.9 2011 7 MSP 1,868 1,855 3,723 84 83 167 22.3 2011 8 MSP 1,795 1,991 3,786 89 88 177 21.4 YE 8/31/11 21,795 21,901 43,696 973 965 1,938 22.5

2011 9 MSP 1,515 1,503 3,018 64 63 127 23.8 2011 10 MSP 1,592 1,527 3,119 62 62 124 25.2 2011 11 MSP 1,576 1,598 3,174 58 58 116 27.4 2011 12 MSP 1,731 1,653 3,384 59 60 119 28.4 2012 1 MSP 1,267 1,381 2,648 53 52 105 25.2 2012 2 MSP 1,419 1,342 2,761 47 47 94 29.4 2012 3 MSP 1,531 1,670 3,201 52 53 105 30.5 2012 4 MSP 132 65 197 3 4 7 28.1 2012 4 ORD 1,323 1,367 2,690 56 55 111 24.2 2012 5 ORD 1,881 1,781 3,662 55 55 110 33.3 2012 6 ORD 1,612 1,580 3,192 55 55 110 29.0 2012 7 ORD 1,414 1,347 2,761 56 56 112 24.7 2012 8 ORD 1,234 1,499 2,733 56 55 111 24.6 YE 8/31/12 18,227 18,313 36,540 676 675 1,351 27.0

2012 9 ORD 1,359 1,344 2,703 55 55 110 24.6 2012 10 ORD 1,598 1,544 3,142 57 57 114 27.6 2012 11 ORD 1,685 1,673 3,358 55 55 110 30.5 2012 12 ORD 1,542 1,392 2,934 52 52 104 28.2 2013 1 ORD 1,457 1,605 3,062 56 56 112 27.3 2013 2 ORD 1,497 1,440 2,937 47 47 94 31.2 2013 3 ORD 1,568 1,706 3,274 55 55 110 29.8 2013 4 ORD 1,567 1,635 3,202 52 52 104 30.8 2013 5 ORD 1,838 1,659 3,497 54 55 109 32.1 2013 6 ORD 1,670 1,713 3,383 52 52 104 32.5 2013 7 ORD 1,576 1,659 3,235 56 55 111 29.1 2013 8 ORD 1,481 1,802 3,283 56 56 112 29.3 YE 8/31/13 18,838 19,172 38,010 647 647 1,294 29.4 Source: T-100 Segment Report

1/ Prior to American Eagle's selection at Waterloo, Delta Connection served the community on a subsidyfree basis to Minneapolis.

### App endix 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 flig ht; 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 th is 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 disa llowed, 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, termina tes 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 leve ls, 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 c arrier 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 statu tes, 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 sub ject 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 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 31; August claims must be submitted by November 30, and so on.