Order 2011-6-7

Served: June 8, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 8

th of June, 2011

Essential Air Service at

FORT DODGE, IOWA, AND 

MASON CITY, IOWA

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

DOCKET OST-2001-10682

DOCKET OST-2001-10684

ORDER SELECTING CARRIER

SUMMARY

By this order, the Department is re-selecting Mesaba Aviation, Inc., d/b/a Delta Connection 

(Mesaba), to provide essential air service (EAS) at Fort Dodge and Mason City, Iowa, at annual 

subsidy rates of $1,910,995 and $1,017,545 at Mason City, respectively,

1 for the five-month 

period June 1, 2011, through October 31, 2011.

BACKGROUND

By Order 2009-4-20, April 27, 2009, the Department selected Mesaba to provide subsidized EAS to 

Fort Dodge and Mason City, Iowa, through May 31, 2011. Under that order, the Department 

authorized subsidy for Mesaba consisting of eighteen round trips per week over a Fort Dodge to 

Mason City to Minneapolis routing. All of the service was to be provided with 34-seat Saab 340 

aircraft for a total annual subsidy of $2,225,213. By Order 2010-2-30 the Department approved an 

alternate service pattern decoupling Fort Dodge from Mason City, such that both communities would 

receive nonstop service. Under that service pattern, Mason City continued to receive 18 nonstop 

round trips per week; Fort Dodge, in lieu of receiving 18 one-stop round trips per week, agreed to 

reduce its frequency to 14 nonstop round trips per week, with all service to Minneapolis.2

 

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

2 Mason City will continue to receive 18 round trips at the subsidy rate specified in Order 2009-4-20 through 

May 31, the end of the current contract. Effective June 1, we are authorizing subsidy for 14 round trips per week. 

Program guidelines preclude us from subsidizing more than 67 seats per day to any community. Mason City 

received 18 round trips only because it was linked with Fort Dodge. Mason City will receive 68 seats effective 

June 1 because of a separate requirement that communities receive at least two round trips a day.
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By Order 2011-1-12 we requested proposals at Fort Dodge and Mason City, as the end of the 

contract was approaching, with proposals due by March 11. On February 11 we issued a notice 

granting Mesaba’s request extending the deadline for proposals to April 5. We received timelyfiled proposal from Multi-Aero, SeaPort, Mesaba, and Chautauqua at Fort Dodge. At Mason 

City, we received timely proposals from Multi-Aero, SeaPort, and Mesaba. We requested 

community comments and received them from Mason City and Fort Dodge on May 6, and the 

issues are ripe for decision. 

FORT DODGE

Multi-Aero

All of Multi-Aero’s proposals are for either a two-year or four-year period, with a four-year 

contract requiring slightly less annual subsidy. All of the proposals contemplate 30-seat aircraft, 

though they do not specify the exact aircraft type – presumably Embraer Brasilia or Saab 340 

equipment. Multi-Aero does not currently have the requisite authority from either the Federal 

Aviation Administration or the Department to operate 30-seat aircraft in scheduled service.3

Option 1: 14 nonstop round trips per week to Chicago O’Hare. The carrier requests 

$2,692,138 annual subsidy for a two-year contract, and $2,638,295 annual subsidy for a 

four-year contract.

Option 2: 14 nonstop round trips per week to Minneapolis. The carrier requests 

$2,508,592 annual subsidy for a two-year contract, and $2,458,420 annual subsidy for a 

four-year contract.

Option 3: This option is part of an inseparable package with Mason City in which Fort 

Dodge would receive 14 nonstop round trips per week to Chicago and Mason City

would receive 19 nonstop round trips to Chicago per week for a combined annual 

subsidy of $5,456,099 for two years or $5,346,977 for four years. However, the level of 

service proposed for Mason City exceeds program guidelines and we would not select 

it, thus leaving this option moot for Fort Dodge as well as Mason City.

SeaPort Airlines

SeaPort proposes 28 nonstop round trips per week to Minneapolis with 9-seat Pilatus PC-12 

aircraft, a single-engine, pressurized, turboprop aircraft. The carrier requests $1,600,064 subsidy

the first year and $1,652,942 subsidy the second year. Because Fort Dodge is guaranteed service 

with twin-engine, 15-seat aircraft, SeaPort’s proposal would not be selected unless the 

community waived its right to those standards.

Mesaba Aviation, Inc.

Mesaba proposes a five-month term, from June 1 through October 31, for 14 nonstop round trips 

per week to Minneapolis with 34-seat Saab 340 aircraft. The carrier requests $1,910,995 annual 

 

3 Multi-Aero currently holds economic authority from the Department to conduct operations pursuant to 14 CFR 

Part 135. As determined in Order 2011-1-16, such authority permits a carrier to provide scheduled service with 9-

seat or smaller, non-turbo-jet aircraft, and public charter service with up to 30-seat aircraft, under 14 CFR Part 380. 

However, as discussed in Order 2011-1-16, such authority is insufficient to enable the carrier to operate 30-seat 

aircraft for essential air service.
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subsidy for this level of service, which it revised downward from its initial proposal after 

discussions with the staff.4 Mesaba would operate as Delta Connection. Mesaba, a whollyowned subsidiary of Pinnacle Airlines Holding, would be compensated on a one-for-one basis 

for regional jets operated by Pinnacle in lieu of Mesaba’s Saab 340 equipment. 

Chautauqua

Chautauqua proposes 13 nonstop round trips per week to Milwaukee with regional jets, either 

37-seat ERJ-135 or 50-seat ERJ-145 aircraft, and operated under a code-share agreement with 

Frontier. The carrier requests $4,148,224 annual subsidy for this level of service. The contract 

would presumably be for a typical two-year period.

MASON CITY

Multi-Aero

All of Multi-Aero’s proposals are for either a two-year or four-year period, with a four-year 

contract requiring slightly less annual subsidy. All of the proposals contemplate 30-seat aircraft, 

though they do not specify the exact aircraft type – presumably Embraer Brasilia or Saab 340. 

Multi-Aero does not currently have the requisite authority from either the Federal Aviation 

Administration or the Department to operate 30-seat aircraft in scheduled service.

Option 1: 19 nonstop round trips per week to Chicago O’Hare. The carrier requests 

$2,789,224 annual subsidy for a two-year contract, and $2,733,439 annual subsidy for a 

four-year contract.

Option 2: 14 nonstop round trips per week to Chicago. The carrier requests $2,642,194 

annual subsidy for a two-year contract, and $2,589,350 annual subsidy for a four-year 

contract.

Option 3: 19 nonstop round trips per week to Minneapolis. The carrier requests 

$2,686,177 annual subsidy for a two-year contract, and $2,632,453 annual subsidy for a 

four-year contract.

Option 4: This option is part of an inseparable package with Mason City in which Fort 

Dodge would receive 14 nonstop round trips per week to Chicago and Mason City

would receive 19 nonstop round trips to Chicago per week for a combined annual 

subsidy of $5,456,099 for two years or $5,346,977 for four years. However, the level of 

service proposed for Mason City exceeds program guidelines and we would not select 

it, thus leaving this option moot for Mason City as well as Fort Dodge.

SeaPort Airlines

SeaPort proposes 28 nonstop round trips per week to Minneapolis with 9-seat Pilatus PC-12 

aircraft, a single-engine, pressurized, turboprop aircraft. The carrier requests $957,764 subsidy

the first year and $1,003,306 subsidy the second year. Because Mason City is guaranteed service 

with twin-engine, 15-seat aircraft, SeaPort’s subsidized proposal would not be selected unless the 

community waived its right to those standards.

 

4 Chautauqua indicated it could not significantly reduce its bid. Because the proposals of SeaPort and Multi-Aero 

were not selectable, staff did not discuss revisions with those carriers.
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Mesaba Aviation, Inc.

Mesaba proposes only a five-month term, from June 1 through October 31, and would operate 14 

nonstop round trips per week to Minneapolis with 34-seat Saab 340 aircraft. The carrier requests 

$1,017,545 annual subsidy for this level of service, which it revised downward from its initial 

proposal after discussions with the staff.5 Mesaba would operate as Delta Connection. Mesaba, 

a wholly-owned subsidiary of Pinnacle Airlines Holding, would be compensated on a one-forone basis for regional jets operated by Pinnacle in lieu of Mesaba’s Saab 340 equipment.

COMMUNITY COMMENTS

On April 14 we requested community comments regarding the carrier selection at Fort Dodge 

and Mason City and received comments from the Ford Dodge Director of Aviation, and from the 

Mayor and Airport Commission at Mason City. 

Fort Dodge supports the proposal of either Mesaba or Chautauqua. The community notes the 

following: 

“The proposal by Mesaba Aviation provides our community with quality air service and 

worldwide seamless connectivity. As you know, Mesaba made improvements to our air 

service in June 2010 by providing us with direct flights and a better-timed schedule.

Even though we lost one daily flight in exchange for the direct flights, the support for 

this change was reflected in utilization by our businesses and community. 

Enplanements were up by 50% at the end of 2010 and are up 85% for the first quarter of 

2011. These increases were attained with only two daily flights compared to three 

which is reflective of the importance of direct service, time of departures/arrivals, and 

competitive fares. The downside of the Mesaba proposal is that it is only for five 

months and the fact that the SAAB 340 aircraft is being removed from their fleet 

without a similar size aircraft as a replacement. 

Mason City also supports the proposal of Mesaba. The Airport Commission indicated that “After 

reviewing these proposals, the Commission unanimously chose to support the Mesaba proposal.” 

The Mayor indicated that “Mesaba’s proposal will ensure there is a superior quality of air service 

available from the Mason City airport which is very important to the residents and businesses of 

Mason City as well as the surrounding communities.” 

DECISIONS

We have reviewed each carrier’s proposal and the communities’ comments, and have decided to 

re-select Mesaba, based largely on community support. 

Fort Dodge favored either Mesaba or Chautauqua. However, Mesaba requested an annual 

subsidy of $1,910,995, less than half of the $4,148,224 Chautauqua requested. That difference 

between the two is clearly decisional. Regarding the other two applicants, each of Multi-Aero’s 

several proposals requested significantly more subsidy than Mesaba, and did not receive 

community support. SeaPort requests $1,652,942 -- about $310,000 less subsidy than Mesaba –

and its subsidy advantage strongly supports SeaPort’s selection. However, Fort Dodge is 

 

5 Because the proposals of SeaPort and Multi-Aero were not selectable, staff did not discuss revisions with those 

carriers.
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guaranteed service with twin-engine, 15-seat aircraft, so without the community waiving their 

guarantee we would not select SeaPort. Finally, Multi-Aero requested significantly more 

subsidy than Mesaba, the community did not favor their selection, and they do not currently have 

authority to operate the service they proposed, so we will not select them.

Mason City strongly favored Mesaba. SeaPort requested less subsidy than Mesaba, requesting 

$957,764 subsidy vs. Mesaba’s $1,017,545. However, as with Fort Dodge, Mason City is 

guaranteed service with twin-engine, 15-seat aircraft, so absent the community waiving their 

guarantee we would not select SeaPort. Finally, Multi-Aero requested significantly more 

subsidy than Mesaba, the community did not favor their selection, and they do not currently have 

authority to operate the service they proposed, so we will not select them. 

Mesaba’s proposal meets all of the statutorily mandated carrier-selection criteria. Mesaba is a 

well-established carrier and its code-share arrangement with Delta allows for reservations, ticket 

and baggage check-in for passengers traveling beyond the hub.

The amount of subsidy requested by Mesaba has increased significantly, from $2,225,213 

previously to $2,928,540 annually for the two communities combined, but appears reasonable. 

Part of the cause for the increase is that Mesaba no longer operates the two communities in a 

linear pattern to Minneapolis. However, as Fort Dodge mentioned, their traffic has responded 

favorably to the new nonstop service, even with a frequency reduction from 18 round trips a 

week to 14. We anticipate that traffic will continue to grow at Fort Dodge in response to the 

nonstop service, which may defray future subsidy expenditures.

We note that Mesaba’s proposal is very unusual, in that it is only for a five-month period, rather 

than the typical two years. Mesaba explains this deviation as follows: 

“As the Department is aware, the Saab 340 aircraft are scheduled to be retired from 

Mesaba's fleet by the end of 2011. No decision has yet been made on replacement 

aircraft or replacement flying. Accordingly, Mesaba's bid is for a short term EAS 

contract period ending on November 1, 2011. Mesaba will advise the Department as 

soon as a decision is made regarding long term plans for service at these communities.”

While our request for proposals asked for two-year bids, the Department has discretion to award 

contracts that are longer than or shorter than that when we find that the individual facts provide 

compelling reason to do so. This is one of those cases. In brief, SeaPort’s proposals do not meet 

either community’s 15-seat and twin-engine guarantee, Multi-Aero does not have authority to 

operate the 30-seat equipment they proposed, and Chautauqua’s proposal to serve Fort Dodge 

requests double Mesaba’s subsidy, a rate we cannot justify paying. Because of Mesaba’s shortterm contract, we will soon be issuing another RFP for service beginning November 1. 

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

certifications from the carrier that it is in compliance with the regulations regarding drug-free 

workplaces and nondiscrimination, as well as the regulations governing lobbying activities. 
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Carrier Fitness

49 U.S.C. 41737(b) requires that DOT find an air carrier fit, willing, and able to provide reliable 

service before DOT may subsidize it to provide essential air service. Mesaba Aviation, Inc., is 

subject to the Department’s continuing fitness requirements, and no information has come to our 

attention that would cause us to question the carrier’s fitness at this time. DOT has contacted the 

Federal Aviation Administration, and it has raised no concerns that would negatively affect our 

fitness findings. DOT therefore concludes that the carrier remains fit to conduct the operations 

proposed here.

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

ACCORDINGLY,

1. We select Mesaba Aviation, Inc., d/b/a Delta Connection, to provide essential air service at 

Fort Dodge and Mason City, Iowa;

2. We set the final rate of compensation for Mesaba Aviation, Inc., for the provision of essential 

air service at Fort Dodge and Mason City, Iowa, as described in Appendix C;

3. We direct Mesaba Aviation, Inc., 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 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 carrier may forfeit its compensation for any claim that is not 

supported under the terms of this order;

4. We find that Mesaba Aviation, Inc., continues to be fit, willing and able to operate as a 

certificated carrier and capable of providing reliable essential air service at Fort Dodge and 

Mason City, Iowa; 

5. These dockets will remain open until further order of the Department; and

6. We will serve copies of this order on the Mayors and Airport Managers of Fort Dodge and 

Mason City, Iowa, Multi-Aero, SeaPort, Chautauqua, and Mesaba Aviation, Inc.

By, 

Susan L. Kurland

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
Appendix A

Nonstop, Great Circle Miles from Mason City (MCW) and Fort Dodge (FOD)

Fort Dodge (FOD)

Mason City (MCW) 60

Des Moines (DSM) 75

Omaha (OMA) 123

Minneapolis (MSP) 168

Milwaukee (MKE) 321

Chicago (ORD) 325

Mason City (MCW)

Fort Dodge (FOD) 60

Des Moines (DSM) 113

Omaha (OMA) 184

Minneapolis (MSP) 120

Milwaukee (MKE) 275

Chicago (ORD) 288

This map is provided by Sabre® AirVisionTM Profit Essentials and is being used with express permission of the copyright holder, 

Sabre Airline Solutions®.
Appendix B

Annual Subsidy Rates at Fort Dodge and Mason City, Iowa

Dockets 2001-10682 and 10684

Fort Dodge Mason City

Effective Period June 1, 2011, thru June 1, 2011, thru 

October 31, 2011 October 31, 2011

Code Share Delta Delta

Round trips per Week 28 28

Stops None None

Hub Minneapolis Minneapolis

Aircraft Type Saab 340 Saab 340

Passengers 18,194 27,228

Departures 1,416 1,416

Block Hours 1,625 1,290

Passenger Revenue $1,115,041 $1,574,350

Total Revenue $1,292,611 $1,825,065

Total Directs $1,934,534 $1,535,854

Total Indirects $1,116,519 $1,171,394

Total Operating $3,051,053 $2,707,248

Profit $152,553 $135,362

Economic Cost $3,203,606 $2,842,610

Annual Subsidy Rate $1,910,995 $1,017,545
Appendix C-1

Mesaba/Pinnacle Essential Air Service to be Provided to 

Fort Dodge, Iowa, Docket OST-2001-10682

Effective Period: June 1, 2011, thru October 31, 2011.

Scheduled Service: 14 nonstop round trips per week to Minneapolis.

Aircraft: Saab 340, 34 seats, or CRJ-200 equipment.

Rate per Eligible Flight: $1,350 1

Weekly Ceiling: $37,800 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 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 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 are not currently available for performance under this order beyond September30, 2011. The Government’s 

obligation for performance under this order beyond September 31, 2011, 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 September 31, 2011, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 31, 2011, 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.

 

1 Annual compensation of $1,910,995 divided by 1,416 estimated annual completed departures and arrivals: 

4 one-way flights per day x 365 days x 97 percent completion = 1,416 departures per year.

2 28 flights/week x $1,350.
Appendix C-2

Mesaba/Pinnacle Essential Air Service to be Provided to 

Mason City, Iowa, Docket OST-2001-10684

Effective Period: June 1, 2011, thru October 31, 2011.

Scheduled Service: 14 nonstop round trips per week to Minneapolis.

Aircraft: Saab 340, 34 seats, or CRJ-200 equipment.

Rate per Eligible Flight: $719 1

Weekly Ceiling: $20,132 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 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 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 are not currently available for performance under this order beyond September 31, 2011. The Government’s 

obligation for performance under this order beyond September 31, 2011, 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 September 31, 2011, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 31, 2011, 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.

 

1 Annual compensation of $1,017,545 divided by 1,416 estimated annual completed departures and arrivals: 

4 one-way flights per day x 365 days x 97 percent completion = 1,416 departures per year.

2 28 flights/week x $719.