Order 2011 - 4 - 24 Served: April 28, 2011 

### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Issued b y the Department of Transportation on the 28 th day

of April , 20 11 Essential Air Service at PONCE, PUERTO RICO Under 49 U.S.C. 41731 et seq . DOCKET DOT - OST - 1999 - 6592



### ORDER GRANTING MOTION TO FILE AND DENYING PETITION FOR

REVIEW OF STAFF ACTION Summary By this order, the Departme nt is granting the motions of Richard F. and Pam Taylor, A. Ray Petty , Ed.D., Miguel A. Casillas, former airport manager at Ponce, the Honorable Maria E. Melendez Altieri, DMD, Mayor of Ponce, and the President and Members of the Municipal Legislature of the Autonomous Municipality of Ponce, Puerto Rico, to file a petition for review of staff action of Order 2010 - 12 - 31, December 23, 20 10, and upon review, denying their petition. Background For several ye ars, Mayaguez and Ponce have received subsidi zed essential air service (EAS). Cape Air is the incumbent carrier at both communities and its current contracts, established by Order 2009 - 3 - 1, expire April 30, 2011. Mayaguez is served onl y b y Cape Air and we have requested proposals for a new EAS contract. However, at Ponce, in addition to the subsidi zed service prov ided by

Cape Air, JetBlue Airlines (JetBlue) provides subsidy - free jet service on a daily basis

– one daily round trip to Orlando and one daily round trip to New York JFK Internation al Airport (New York)

– provided with 150 - seat Airbus A320 aircraft. Th at level of service far exceeds Ponce’s EAS requirements; therefore, consistent with program practice, by

Order 2010 - 12 - 31, we did not seek proposals for a new EAS contract, but rather relied on JetBlue’s subsidy - free service to continue connecting the community to the national air2

transportation sy stem. We note d that Ponce’s receiving subsidy - free service does not change its status as an EAS community . Should JetBlue in the future decide that it no longer intended to serve Ponce or want to decrease flights below the minimum guarantee, it would first have to file a 90 - day notice of its intent to suspend service. At that point, the Department would initiate the carrier - selection process by issuing an order requesting proposals for replacement service and p rohibiting JetBlue from leaving until replacement service was in place. Motion to File Petition for Review of Staff A ction The Department received two petition s for review and reconsideration of staff action regarding Order 2010 - 12 - 31, and the decision not to seek solicitation of proposals for replacement of EAS between Ponce and San Juan. They argue that due to Ponce’s unique ties (commercial, geographical, and political) to its capital, San Juan, the substitution of Orlando and New York as Ponce’s EAS designated serv ice hubs at earl y morning departure times is a service level less than the basic EAS level established by the Civil Aeronautics Board (CAB) and/or United States Department of Transportation (DOT), and therefore is prohibited without Ponce’s express ed consent. In support of the request, a letter from Richard F. and Pam Taylor, dated February 10, 2011, f iling individually

as consumers, cites the following: (1) the Civil Aeron autics Board EAS Determination for Po nce (EAS - 647) issued on Octob er 25, 1979 (CAB 79 - 10 - 165) states that essential air service needs of Ponce is satisfied b y guaranteeing service to San Juan; (2) Section 419(f) of the Essential Air Service Act defines essential air transportation as “scheduled air transportation of persons to a point...which satisfies the needs of the community concerned for air transportation to one or more communities of interest and insures access to the Natio ns’s air transportation sy stem;” 1 (3) S ubsequent EAS Determinations for Ponce issued on Oct ober 4 , 1984, and March 27, 1985, require a minimum of two daily nonstop round trips to San Juan at convenient times ; and (4) the community of Ponce must agree to a service level less than basic EAS ; in this case , service to a hub other than San Juan. Decision We have decided to grant the petition for review of staff action and , upon reconsideration, we affirm the decision made not to solicit a new round of proposals for EAS at Ponce. The primary objective of the EAS program is to provide a safety - net level of air service to connect communities to the national air transportation sy stem that otherwise would not have air service.

1 We note that the definition of EAS was subsequently amended by PL100 - 223, December 30, 19 87, to require only two round trips a day to a large or medium hub airport with connections to the national air transportation system, and deleted the reference to ensuring service to a community of interest.3

The program’s governing statute , specificall y 49 U.S.C. 41732(b)(1)(A), require s only that a community

receive two round trips a day , six day s a week, to a large or medium hub with 15 - seat or larger aircraft. We recognize that San Juan was designated as Ponce’s hub in its previous EAS determination s . However, as we stated in O rder 7 9 - 10 - 165, October 25, 1979, establishing Ponce’s EAS deter

mination, and has been longstanding program practice , i f service is available that connects the community to the national air transportation sy stem other than through the designated hub, we would co nsider whether that service meet s the community ’s needs. 2 Inthis case, we find that even without nonstop service to San Juan, JetBlue’s service to Orlando and New York , both large hubs, fully provides Ponce’s link to the national air transportation s ys te m. 3 Finally , in calendar year 2010, the total traffic enplan ing and deplaning at Ponce was 192,087 passengers. Of those passengers, only 9,660 used Cape Air’s s ubs idized service to San Juan, while 182,427 passengers flew on JetBlue to Orlando and New York . At the time we established Ponce’s EAS determination in 1979, we noted, “In the fiscal year 1978, Ponce generated 128,517 O&D travelers with 69.8 percent of those travelers moving in the Ponce San Juan market. Another 23.8 perce nt travelled to New York City , Chicago and Miami.” (See CAB Order 79 - 10 - 165 at page 11.) Clearly the Ponce travel patterns have changed in the last 30 ye ars and, while we understand the community ’s desire to retain air service to San Juan, we emphasize that the EAS program provides a safety net when a community would otherwise receive no scheduled air service at all. Since the vast majority of passengers flying out of Ponce are now using JetBlue’s jet services to Orlando and New York , we cannot reasonabl y justify providing Federal subsidy to a community

that has more than sufficient air service connecting it to the national air transportation sy stem. 4 Based on all of the above, we find that JetBlue’s service to Orlando and New York full y meets the community ’s EAS needs.

2 In a similar situation involving EAS at Manhattan, Kansas, the Department did not seek proposals for a new , two year contract when American Eagle announced that they wo uld serve the community on a subsidy - free basis to Dallas/Fort Worth even though Kansas City was Manhattan’s designated EAS hub. See Order 2009 - 11 - 25. 3 Though not dispositive, we note that, effective this June, JetBlue has announced an additional daily round trip in the Ponce - Orlando market (for a total of two daily round trips to Orlando) and an additional round trip to New York on T uesdays and Wednesdays. 4 We also note that when the CAB originally established an EAS determination for Ponce and all other EAS communities, the CAB mailed out a questionnaire regarding the community’s air service needs. In response, the then - Mayor state d, “Ponce regards service to the Mainland as essential, and requests that [the CAB] guarantee three daily flights, seven days per week, to the Mainland.” In addition, the Mayor stated, that the city required single plane service to the Mainland, and “the economic viability of the area depends on better Ponce - Mainland service.” In Ponce’s EAS determination, the CAB recognized the high volume of passengers that connected at San Juan to destinations such as New York, Chicago, and Miami, but decided that San Juan was a sufficient hub determination, based on existing traffic numbers at that time.4

AC CORDINGLY, 1. We grant the motion to file a Petition for Review of Staff Actio n of Order 2010 - 12 - 31, filed by Richard F. and Pam Taylor; A. Ra y Petty, Ed.D.; Miguel A. Casillas, former airport manager at Ponce; the Honorable Maria E. Melendez Altieri, DMD, Mayor of Ponce; and the President and Members of the Municipal Legislature of the Autonomou s Municipality of Ponce, Puerto, and upon review, den y the Petition; and 2. We will serve a cop y of this order on the above mentioned persons, and Cape Air. By :

SUSAN L. KURLAND Assistant Secretary

for Aviation and International Affairs (SEAL) An electronic version of this document is available on line at www.regulations.gov