Order: 2014-4-7

Served: April 8, 2014

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 8th day of April, 2014

ORDER REQUESTING PROPOSALS

Summary

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

providing Essential Air Service (EAS) at Atka and/or Nikolski, Alaska, for a new

contract period, beginning October 1, 2014, with or without subsidy. (See Appendix A for

a map). Carriers should file their proposals no later than May 13, 2014.

Background

By Order 2012-5-20, May 23, 2012, the Department selected Grant Aviation, Inc. (Grant),

to provide subsidized EAS at Atka and Nikolski, Alaska, through September 30, 2014. 

Under that Order, Grant provides Atka with three nonstop round trips per week to Dutch 

Harbor, and provides Nikolski with two nonstop round trips per week to Dutch Harbor. 

Service is provided on nine-passenger Beech King Air 200 aircraft, for a total combined 

annual subsidy rate of $1,174,005 in the first year ($842,574 for Atka and $331,431 for 

Nikolski) and $1,147,443 in the second year ($822,445 for Atka and $324,998 for 

Nikolski).

Request for Proposals

As the end of the current rate term approaches, we are here requesting proposals from 

carriers interested in providing EAS at Atka and Nikolski, Alaska, with or without 

subsidy, for a new contract period beginning October 1, 2014. Carriers should file their 

proposals no later than May 13, 2014. 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 the State and ask them to submit their final comments. 

We will give full consideration to all proposals that are timely filed.1

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

provide EAS without subsidy and we determine that service can be reliably provided without such 

Essential Air Service at

ATKA, ALASKA

NIKOLSKI, ALASKA

Under 49 U.S.C. §41731 et seq.

DOCKET DOT-OST-1995-363
- 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, 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 Atka and Nikolski, we expect proposals consisting of service

consistent with what the communities currently receive, namely three and two nonstop 

round trips (respectively) per week to Dutch Harbor with small aircraft. We encourage 

proposals that meet these 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 

(e.g., a different length of contract) with subsidy requirements that remain competitive.

We encourage carriers to work with the communities as they prepare their proposals in 

order to craft them to best meet the communities’ needs. As always, we will fully 

consider the communities’ views before making a long-term carrier decision.

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.

 

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 in Alaska, 49 U.S.C. § 41733(c)(1) 

directs us to consider six factors: (a) service reliability; (b) contractual and marketing arrangements with a 

larger carrier at the hub; (c) interline arrangements with a larger carrier at the hub; (d) community views, 

giving substantial weight to the views of the elected officials representing the users; and (e) whether the 

carrier has included a plan in its proposal to market its service to the community, and; (f) the experience of 

the applicant in providing, in Alaska, scheduled air service or significant non-scheduled service. In 

addition, the Consolidated Appropriations Act, 2014, Public Law No. 113-76, 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.
- 3 -

Service and Traffic History

In order to assist carriers in making their traffic and revenue projections, we have 

included historical traffic data in Appendix B. For the year ended February 28, 2014, the 

most recent annual period for which data are available, Atka generated approximately 5.2

origin and destination passengers per week as well as approximately 1,121 weekly 

pounds of freight and mail. For the same period, Nikolski averaged 3 passengers per 

week and 653 pounds of freight and mail.

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 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 communities and State are welcome to submit comments at any time. As noted 

earlier, we will provide a copy of the proposals to the civic parties and ask them to submit 

their final comments shortly after May 13, 2014, the due date for proposals.

This Order is issued under authority delegated in 49 CFR 1.25a(b) and re-delegated to the 

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We request that carriers interested in providing EAS at Atka and/or Nikolski, Alaska, 

submit their proposals, with or without subsidy requests, no later than May 13, 2014. The 

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

Essential Air Service at Atka and/or Nikolski, Alaska, Docket DOT-OST-1995-363”;5

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

 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://www.dot.gov/policy/aviation-policy/smallcommunity-rural-air-service/essential-air-service. 

5 Questions regarding filings in response to this Order may be directed to A.J. Muldoon at (202) 366-1058 

or albert.muldoon@dot.gov. 
- 4 -

3. We will serve copies of this Order on the communities of Atka and Nikolski, Alaska, 

the Alaska Department of Transportation 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 385.31(a), 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.regualtions.gov
APPENDIX A

SERVICE AREA MAP
APPENDIX B

Page 1 of 2

Historical Traffic at Atka, Alaska6

Pax Freight (lbs.) Mail (lbs.) Pax Freight (lbs.) Mail (lbs.) Pax Freight (lbs.) Mail (lbs.)

2010 2010 2010

1 12 0 332 1 14 1,608 3,105 1 26 1,608 3,437

2 33 890 297 2 23 1,905 11,482 2 56 2,795 11,779

3 5 190 230 3 21 2,917 4,100 3 26 3,107 4,330

4 35 0 439 4 35 8,572 12,088 4 70 8,572 12,527

5 32 0 331 5 33 5,190 10,000 5 65 5,190 10,331

6 12 1,880 377 6 19 2,902 5,642 6 31 4,782 6,019

7 20 1,740 282 7 13 525 10,012 7 33 2,265 10,294

8 32 1,905 602 8 32 3,526 14,129 8 64 5,431 14,731

9 34 1,123 423 9 35 3,365 9,982 9 69 4,488 10,405

10 34 0 515 10 19 4,789 10,395 10 53 4,789 10,910

11 19 184 213 11 15 2,195 7,035 11 34 2,379 7,248

12 18 102 196 12 27 3,725 8,118 12 45 3,827 8,314

2010 Total 286 8,014 4,237 2010 Total 286 41,219 106,088 2010 Total 572 49,233 110,325

2011 2,011 2,011

1 16 0 33 1 9 3,681 4,368 1 25 3,681 4,401

2 18 57 255 2 17 3,422 6,546 2 35 3,479 6,801

3 32 34 182 3 36 3,445 10,027 3 68 3,479 10,209

4 20 37 276 4 18 2,460 6,524 4 38 2,497 6,800

5 30 444 316 5 28 3,168 3,355 5 58 3,612 3,671

6 11 0 0 6 17 6,056 11,337 6 28 6,056 11,337

7 9 0 162 7 11 4,643 7,668 7 20 4,643 7,830

8 32 15 357 8 40 5,299 9,516 8 72 5,314 9,873

9 23 1,073 173 9 24 4,932 13,260 9 47 6,005 13,433

10 22 168 160 10 25 2,918 9,450 10 47 3,086 9,610

11 29 0 390 11 16 2,402 9,217 11 45 2,402 9,607

12 17 0 723 12 14 7,832 9,545 12 31 7,832 10,268

2011 Total 259 1,828 3,027 2011 Total 255 50,258 100,813 2011 Total 514 52,086 103,840

2012 2012 2012

1 12 180 620 1 19 3,837 7,704 1 31 4,017 8,324

2 15 128 298 2 14 1,653 4,639 2 29 1,781 4,937

3 29 49 257 3 45 5,826 8,138 3 74 5,875 8,395

4 18 600 298 4 16 8,375 11,173 4 34 8,975 11,471

5 36 210 250 5 40 3,539 11,161 5 76 3,749 11,411

6 10 1,400 203 6 23 4,798 14,300 6 33 6,198 14,503

7 37 817 394 7 21 4,721 14,681 7 58 5,538 15,075

8 24 1,571 202 8 31 5,913 6,663 8 55 7,484 6,865

12 2 0 0 12 4 316 476 12 6 316 476

2012 Total 183 4,955 2,522 2012 Total 213 38,978 78,935 2012 Total 396 43,933 81,457

2013 2013 2013

1 7 20 29 1 8 967 3,405 1 15 987 3,434

2 11 0 21 2 18 3,059 1,404 2 29 3,059 1,425

3 18 0 62 3 21 759 6,267 3 39 759 6,329

4 6 0 74 4 4 219 1,136 4 10 219 1,210

5 0 0 0 5 1 694 522 5 1 694 522

6 2 0 28 6 3 0 5,065 6 5 0 5,093

7 14 0 1,431 7 13 0 0 7 27 0 1,431

8 9 0 0 8 28 0 0 8 37 0 0

9 10 0 0 9 16 0 639 9 26 0 639

10 20 0 0 10 25 2,084 4,595 10 45 2,084 4,595

11 5 0 0 11 20 1,317 4,605 11 25 1,317 4,605

12 0 0 32 12 15 1,544 10,124 12 15 1,544 10,156

2013 Total 102 20 1,677 2013 Total 172 10,643 37,762 2013 Total 274 10,663 39,439

2014 2014 2014

1 7 0 0 1 2 2,795 5,214 1 9 2,795 5,214

2 14 0 659 2 16 3,009 5,396 2 30 3,009 6,055

2014 Total 21 0 659 2014 Total 18 5,804 10,610 2014 Total 39 5,804 11,269

Origin Atka Destination Atka Total O&D Atka

 6 Source: Bureau of Transportation Statistics; Form 41, Schedule T-100 Report. 
APPENDIX B

Page 2 of 2

Historical Traffic at Nikolski, Alaska7

Pax Freight (lbs.) Mail (lbs.) Pax Freight (lbs.) Mail (lbs.) Pax Freight (lbs.) Mail (lbs.)

2010 2010 2010

1 0 0 27 1 1 196 552 1 1 196 579

2 7 60 275 2 4 708 2,972 2 11 768 3,247

3 2 0 201 3 6 817 670 3 8 817 871

4 8 0 95 4 9 0 19 4 17 0 114

5 10 524 416 5 17 2,395 3,832 5 27 2,919 4,248

6 8 0 91 6 7 55 624 6 15 55 715

7 8 0 175 7 9 1,046 1,678 7 17 1,046 1,853

8 6 0 68 8 5 474 1,749 8 11 474 1,817

9 8 0 195 9 13 930 1,145 9 21 930 1,340

10 12 0 211 10 15 1,061 1,275 10 27 1,061 1,486

11 6 0 83 11 5 420 819 11 11 420 902

12 1 0 0 12 2 0 596 12 3 0 596

2010 Total 76 584 1,837 2010 Total 93 8,102 15,931 2010 Total 169 8,686 17,768

2011 2011 2011

1 4 0 255 1 4 566 1,224 1 8 566 1,479

2 5 70 96 2 5 570 611 2 10 640 707

3 8 0 87 3 5 769 1,373 3 13 769 1,460

4 6 0 114 4 1 233 1,630 4 7 233 1,744

5 7 0 201 5 12 1,416 984 5 19 1,416 1,185

6 6 0 169 6 8 422 1,029 6 14 422 1,198

7 11 0 66 7 8 1,418 993 7 19 1,418 1,059

8 6 0 131 8 9 718 3,041 8 15 718 3,172

9 3 0 0 9 5 889 799 9 8 889 799

10 4 0 118 10 1 712 863 10 5 712 981

11 8 120 46 11 5 332 1,488 11 13 452 1,534

12 4 70 44 12 2 618 1,584 12 6 688 1,628

2011 Total 72 260 1,327 2011 Total 65 8,663 15,619 2011 Total 137 8,923 16,946

2012 2012 2012

1 8 0 54 1 4 127 373 1 12 127 427

2 0 0 92 2 4 640 2,185 2 4 640 2,277

3 5 0 79 3 0 270 715 3 5 270 794

4 1 0 123 4 8 69 2,213 4 9 69 2,336

5 2 0 54 5 5 212 2,447 5 7 212 2,501

6 4 0 0 6 3 140 1,306 6 7 140 1,306

7 5 0 0 7 4 871 926 7 9 871 926

8 4 0 214 8 13 326 1,238 8 17 326 1,452

12 0 0 0 12 3 0 0 12 3 0 0

2012 Total 29 0 616 2012 Total 44 2,655 11,403 2012 Total 73 2,655 12,019

2013 2013 2013

1 1 0 0 1 3 333 119 1 4 333 119

2 8 0 2 2 17 521 699 2 25 521 701

3 6 0 146 3 16 2,559 1,975 3 22 2,559 2,121

4 1 0 14 4 7 525 2,435 4 8 525 2,449

5 0 0 0 5 0 0 0 5 0 0 0

6 0 0 0 6 2 0 478 6 2 0 478

7 6 0 0 7 7 1,000 142 7 13 1,000 142

8 3 0 0 8 7 1,054 692 8 10 1,054 692

9 2 0 0 9 8 0 185 9 10 0 185

10 20 400 0 10 13 1,181 1,593 10 33 1,581 1,593

11 1 0 0 11 12 3,523 780 11 13 3,523 780

12 0 0 0 12 14 4,818 1,698 12 14 4,818 1,698

2013 Total 48 400 162 2013 Total 106 15,514 10,796 2013 Total 154 15,914 10,958

2014 2014 2014

1 9 0 40 1 11 3,836 850 1 20 3,836 890

2 5 0 23 2 7 2,970 1,052 2 12 2,970 1,075

2014 Total 14 0 63 2014 Total 18 6,806 1,902 2014 Total 32 6,806 1,965

Origin Nikolski Destination Nikolski Total O&D Nikolski

 7 Source: Bureau of Transportation Statistics; Form 41, Schedule T-100 Report. 
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. 

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. 

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. 

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.