Order 2012-5-11

Served: May 10, 2012

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 10th day of May, 2012

Essential Air Service at

MERCED, CALIFORNIA Docket DOT-OST-1998-3521

VISALIA, CALIFORNIA Docket DOT-OST-2004-19916

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

ORDER REQUESTING PROPOSALS

Summary

By this Order, the Department is requesting proposals from carriers interested in providing 

Essential Air Service (EAS) at Merced and/or Visalia, California, for a new contract period, 

beginning October 1, 2012, with or without subsidy. (See Appendix A for a service area map). 

Carriers should file their proposals no later than June 11, 2012.

Background

By Order 2010-9-13, September 14, 2010, we re-selected Great Lakes to provide subsidized EAS 

at the two communities, utilizing 19-seat Beech 1900D turboprop aircraft, for the two-year period 

through October 1, 2012, at a combined annual subsidy of $3,707,681. Subsidized service at 

Merced was to consist of either 14 nonstop round trips a week to Las Vegas or 14 one-stop round 

trips to Denver. At Visalia, service was to consist of 14 nonstop round trips to Ontario, Los 

Angeles or Orange County. On May 15, 2011, Great Lakes began providing service between Los 

Angeles International Airport (LAX) and both Merced and Visalia.

Based on passenger traffic data for the year ending September 31, 2011, 5,700 passengers were 

enplaned and deplaned at Merced, while 5,051 passengers were enplaned and deplaned at Visalia. 

The annual subsidy amount for Merced is $1,961,174 and Visalia’s is $1,746,507. Therefore, the 

subsidy per passenger at Merced is approximately $344 and $346 at Visalia. The Department is 

prohibited from subsidizing air service at a community where the subsidy per passenger exceeds 

$200, unless the community is more than 210 highway miles from the nearest large or medium hub 

airport1. Merced and Visalia exceed the $200 per passenger cap and both are fewer than 210 miles 

 1 Congress first established the $200 ceiling under P.L. 101-164 for fiscal year 1990, and reestablished it in fiscal 

years 1994-1999. The ceiling was made permanent by P.L. 106-69, the Department of Transportation and Related 

Agencies Appropriations Act of 2000.
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from a large or medium hub. Merced is 107 miles from Mineta San Jose International Airport 

(SJC) and Visalia is 178 miles from Bob Hop Airport (BUR) in Burbank, California.

Rather than terminate service eligibility at either community at this stage, the Department will 

solicit proposals for EAS at both communities, but the Department will evaluate all proposals 

submitted before committing to a contract or making a final determination on Merced’s and 

Visalia’s continuing eligibility. We note that since the switch in hub served to LAX on 

May 15, 2011, traffic at both communities has increased and that the carrier is currently providing 

additional service, beyond the 14 weekly round trips subsidized under Order 2010-9-13. During 

the window for proposals, we expect both communities to work aggressively with all potential 

applicants to mitigate some of the risks that the carriers may face in an attempt to lower their 

subsidy levels.

Request for Proposals

As the end of the current contracts approach, we are requesting proposals from carriers interested 

in providing service at Merced and/or Visalia, with or without subsidy, for a new contract period 

beginning October 1, 2012. Carriers should file their proposals no later than June 11, 2012. Staff 

will then docket the proposals, thereby making them public, and direct each carrier to serve a copy 

of its proposal on the civic parties and other applicants. Shortly afterwards, we will provide a 

summary of the proposals to the communities and ask them to submit their final comments. We 

will give full consideration to all proposals that are timely filed.2

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, well-documented proposals that will facilitate their evaluation by the 

affected communities and the Department.3

 2 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 typically do not proceed with the carrier-selection case. Instead, we simply rely on that carrier’s 

subsidy-free service as proposed.

3 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c) (1) directs us 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. Interested carriers should also be aware that our 
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Specifically, for service with 19-seat or larger aircraft, we expect proposals for two or three round 

trips a day (12 or 18 a week) to Los Angeles, Las Vegas, or any other large or medium hub airport 

offering numerous connections to the national air transportation system. If 8/9-seat aircraft are 

proposed, we would expect four or five round trips a day (24 or 30 a week).4

The communities and air carriers are encouraged to work together in advance of the due date for 

proposals to craft a service pattern that is desirable to the communities and meets the operational 

need of the airline interested in submitting a proposal. In addition, carriers should be very clear as 

to whether a specific community’s proposal is on a stand-alone basis, or whether it is part of a 

larger, inseparable package with other communities.

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, or length of contract, for example -- with subsidy requirements that remain 

competitive.

New Filing Procedures

Carrier proposals should be submitted to the Department with all materials compiled 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

In order to assist carriers in making their passenger and revenue forecasts, we have included 

historical passenger data in Appendix B. For year ending December 31, 2010, Merced generated 

approximately 6.5 enplanements a day; and Visalia, 5.8. As noted above, passenger traffic has 

increased with a change in service pattern to LAX.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces, and nondiscrimination.5 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 

 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.

4 Previously, most EAS communities were entitled to service with 15-seat or larger aircraft. However, for FY 2012, 

Congress revoked the minimum requirement that basic EAS include service with at least 15-seat or larger aircraft. See 

Consolidated and Further Continuing Appropriations Act, P.L. 112-55, November 18, 2011. Communities are still 

entitled to service with twin-engine aircraft.

5 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 government-wide requirements for drug-free workplace (grants).
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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) 366-5903.6

Community and State Comments

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

prospective applicants to contact the communities before they submit their proposals so that they 

can tailor them to the communities’ 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 June 11, the deadline for carrier proposals.

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

ACCORDINGLY,

1. We request that carriers interested in providing essential air service at Merced and/or Visalia, 

California, submit their proposals, with or without subsidy requests, no later than June 11, 2012. 

The proposals should be e-mailed to: EAS@dot.gov with the title “Proposal to Provide Essential 

Air Service at Merced and Visalia, California,” with the docket numbers corresponding to the 

communities as shown on the first page of this Order;7

2. These dockets will remain open until further Order of the Department; and

3. We will serve copies of this Order on the communities of Merced and Visalia, California; and 

the parties listed in Appendix D.

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

Regulations, 14 CFR 385.50, must file such petitions within ten (10) days after the date of service 

of this Order.

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

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

brian.swanson@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

at http://www.regulations.gov
Appendix A

• Ely 

• Merced 

• Visalia 
Appendix B

Historical Passenger Traffic1

Merced, California

Year Enplanements Deplanements Total

Average Annual 

Enplanements per 

Day2

2003 7,510 7,509 15,019 24.0

2004 8,004 7,936 15,940 25.5

2005 8,596 8,447 17,043 27.5

2006 7,864 7,770 15,634 25.1

2007 9,033 9,400 18,433 28.9

20083 1,332 1,429 2,761 -

2009 999 1035 2,034 3.2

2010 2,046 1,997 4,023 6.5

Jan. – October 2011 2,521 2,531 5,052 -

Visalia, California

Year Enplanements Deplanements Total

Average Annual 

Enplanements per 

Day2

2003 1,355 1,329 2,684 4.3

2004 1,085 1,046 2,131 3.5

2005 2,377 2,234 4,611 7.6

2006 4,289 4,383 8,672 13.7

2007 6,617 6,398 13,015 21.1

2008 1,674 1,789 3,463 -

2009 2,433 2,305 4,738 7.8

2010 1,828 1,842 3,670 5.8

Jan. – October 2011 2,375 2,240 4,615 -

 1 U.S. DOT, Bureau or Transportation Statistics, T-100 Market data and Orders 2008-5-42 and 2010-5-4.

2 Annual Enplanements divided by 313 days, 314 for leap years.

3 Data for June, July and August was not reported
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 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 order beyond [DATE]. The 

Department’s obligation for performance under this order beyond [DATE], is subject to the 

availability of appropriated 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 must be submitted within 60 days of the last day of service provided 

under this order.
Appendix D

SERVICE LIST

Air Choice One Airlines, Shane Storz Delta Air Lines, Stephen A. Hedden Pacific Aviation Group, Craig Garrick

Air Greco/Wings Air Dorado Jets Pacific Aviation Group, Ron Rye

Air Sunshine, Inc. Dorado Jets, Mark McKenna Pacific Wings, Frank Ford

Air Sunshine, Mirmohammad Adili Era Aviation, Lori Goodman Pacific Wings, Greg Kahlstorf

Air West, Inc., John Raatz Executive Airlines, Kate Soled Penn Air, Danny Seybert

Air Wisconsin, Annette Daly ExpressJet, Jon Lindlief Penn Air, Scott Bloomquist

Air Wisconsin, Jim Rankin ExpressJet, Roger Weston Pinnacle Airlines, Jennifer Gammill

Airline Associates, Bill Mishk Frontier Airlines, Daniel Shurz Pinnacle Airlines, Megan Rosia

Alaska Airlines, Jeff Cole Frontier Flying, Bob Hajducovich Pinnacle Airlines, Phil Reed

Alaska Airlines, Sandy Sinick Frontline Aviation Planemasters, Inc., John Kessler

American Airlines, Carl Nelson Gem Air, Dan Schroeder Planemasters, Inc., Paul Berliner

American Eagle, Gary Foss Gem Air, JoAnn Wolters Planemasters, Inc., Todd DeSimone

American Eagle, Robert Emrich Great Lakes Airlines, Chuck Howell RAA, Faye Balck

American Eagle, Patrick Swift Great Lakes Airlines, Doug Voss Raytheon, Mike Schiedt 

Aviation Express, Brad Shriner Homeland Security, Bill Ragan Rectrix, Aviation, Scott LaForge

Aviation Technologies/Charter Air Transport, 

Jim Gallagher Homeland Security, David Bernier Saab Group, Polly Prelinger

Bemidji Aviation, Arlen Rinkenberger Horizon Air, Jennifer Thompson Scenic, Mary Schneider

Bemidji Aviation, Cori Rude Horizon Air, Mike McQeen Scenic, Mitzi Daines

Cape Air, Andrew Bonney Horizon Air, Jeff Cole Seaborne Airlines, Shawn Lewis

Cape Air, Dan Wolf ICEPR, Luis Irizarry SeaPort Airlines, EAS Mailbox

Cape Air, J. Flaherty Intrepid Internatl Air, Rick Eyk SeaPort Airlines. Rob McKinney

Capital Aviation, Mike Colgan Island Air Charters, Linda House Shuttle America, Jerry Balsano

Chautauqua, Josh Pascoe Jet Air, Daniel Wolford Silver Airways, Darrell Richardson

Classic Aviation, Tony Henderson Kenmore Air, Tim Brooks Silver Airways, Mickey Bowman

Colgan Air, Kevin Scott McCall Aviation, Dan Scott SkyWest, Brad Rawson

Colgan Air, Mike Colgan McCall Aviation, Michelle SkyWest, Eric Christensen

CommutAir, Andy Price Mesaba, John Spanjers SkyWest, Michael Thompson

CommutAir, Joel Raymond Mesaba, Max Shemesh Sovereign Air, Bob Karns

Consultant, Jeff Hartz Michigan DOT, Matt Brinker Tailwind International, Michele 

Wilkinson

Consultant, Mike Mooney Midstar Airlines, Jeffrey Fonner Tatonduk, Robert Everts

Consultant, Robert Silverberg Republic Air Line, Greg Aretakis Tatonduk, Robert Ragar

Consultant, Ron McNeil MN Aviation, Jose Maldonado Tradewind, Eric Zipkin

Continental, Bruce Keiner Multi Aero, Darnea Transport Azumah, Joel AnabilahAzumah

Continental, Dan Weiss Multi Aero, Shane Storz Trans States, Fred Oxley

Continental, Lorry Halloway Northern Air Cargo, David Karp Trans States, Gerry Wigmore

Delta Air Lines Anthony Canitano Northern Air Cargo, Eric Van Andel Trans States, Warren Crotty

Delta Air Lines, Dan Shuman NYDC, Henok Araya United, Alicia Gabriel

Delta Air Lines, Dana Debel OST, Brian Swanson United, James Starnes

Delta Air Lines, Jeff Davidman OST, Brooke Chapman US Airways, Benjamin Slocum

Delta Air Lines, Jeff Morgan OST, Dennis DeVany US Airways, Howard Kass

Delta Air Lines, Joe Esposito OST, Kevin Adams US Airways, Jason Reisinger

Delta Air Lines, Kristal Murphy OST, Kevin Schlemmer Warbelows Air Ventures, Art 

Warbelow

Delta Air Lines, Sally Veith OST, Michael Martin MCE, Ron Elliott

Delta Air Lines, Sascha Vanderbellen OST, Scott Faulk MCE, John Bramble

VIS, Steve Salomon VIS, Mario Cifuentez, II