O Memorandum 

U.1 Department of - . . _;. j 

Transportation 

Office ot the Secrerary 

of Transportation 

Subject; Weekly compensation ceiling payout clarification at Grand Date" ^^^y ^^' ^^^ ^ 

Island, Nebraska (Docket DOT-OST-2002-13983) 

From, Dennis J. DeVany Reply to Kevin Schlemmer, X-53 

EAS and Domestic Analysis, X-53 Attn of: ^'''' ^""^^ 

To: Greg Frazier, S-3.6 

Reference: Order 2011-1-25 

Weekly Ceiling Payout clarification 

In Order2011-l-25, January 31, 2011, the Department selected American Eagle Airlines to 

provide essential air service (EAS) at Grand Island, Nebraska, for two years at an annual subsidy 

rate of $2,215,582. American Eagle inaugurated service at Grand Island on June 9, 2011, thus its 

rate will expire on June 30, 2013. Under that rate, the carrier provides 13 weekly nonstop round 

trips to Dallas/Fort Worth International Airport on 37, 44, or 50 passenger Embraer regional jet 

aircraft. 

When calculating the weekly compensation ceiling, there was a typographical error in 

Appendix C of Order 2011-1-25. The correct weekly ceiling compensation should be 543,472, 

rather than $43,372, as stated in that Order. 

Attached is the page showing the revised calculations. 

If you have any questions, please call Kevin Schlemmer at (202) 366-3176. 

cc: American Eagle Airlines 
Appendix C 

Page 1 of 2 

American Eagle Airlines 

Essential Air Service to be Provided at Grand Island, Nebraska 

Effective Period: Two years beginning when American Eagle inaugurates service (on or after 

May 1, 2011), through the end of the 24'** month thereafter 

Scheduled Service: 13 weekly round trips to Dallas/Fort Worth International Airport 

Intermediate stops and upline service: Service must be nonstop 

Aircraft: Embraer 135 (37 seats); Embraer 140 (44 seats); or Embraer 145 (50 seats) 

Rate per Eligible Flight: $1.672' 

Weekly Ceiling: $43,472^ 

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 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 March 3, 2011. The Government's 

obligation for performance under Ihi.s order beyond March 3, 2011, is subject ro 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 March 3, 2011, until funds are made available to the 

Department for performance. If funds are not made available for performance beyond March 3. 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. 

' Annual compensation of $2,215,582. divided by 1,325 annual departures (26 flights per week x 52 weeks plus 4) 

X 98 percent completion). 

' 26 flights per week multiplied by $ 1,672 per flight.