Order 20 10

- 11

- 17

Served: November 17, 2010



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

o n the 17th day of November , 20 10

Essential Air Service at

KINGMAN, ARIZONA

PAGE, ARIZONA

PRESCOTT, ARIZONA

SHOW LOW, ARIZONA

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 1996

- 1899

DOCKET DOT

- OST

- 1997

- 2694

DOCKET DOT

- OST

- 1996

- 1899

DOCKET DOT

- OST

- 1998

- 4409



### ORDER REQUESTING PROPOSALS

Summary

By this order, the Departme nt is requesting proposals from airlines interested in providing

essential air service (EAS) at Kingman, Page

, Prescott, and Show Low, Arizona, for the two

year period beginning May 1, 2011 , with or without subsidy. Pr oposals are due by

December 21, 2010 . (See Appendix A for a map.)

Background

Great Lakes Aviation Ltd. (Great Lakes) serves all four commu nities under two different

contracts. After Air Midwest, the then

- incumbent carrier at Kingman and Prescott, ceased all

operations on June 1, 2008, b y Order 200 8

- 6

- 11

, June 10, 200 8 , the Department selected Great

Lakes to provide EAS at both communities for two years. Great Lakes started service at

Prescott in September 2008, and Kingman in April 2009. As a result

, their current contract

ends April 30, 2011, the same date the contract s for Page and Show Low expire. For Kingman,

t hat order established a n annual subsidy rate of $ 1,275,771 for s ervice consist ing of 12 nonstop

round trips a week to Las Vegas. A t Prescott, the order established an annual subsidy rate of

$1,622,719 for 18 nonstop round trips per week to Phoenix or Las Vegas. By

Order 2008

- 8

- 12, August 13, 2008, the Department approved a request by Great Lakes and the

community for an alternate service pattern at Prescott, with service to Ontario, California.- 2

-

By Order 2009

- 8

- 5, August 10, 2009, the Department selected Great Lakes to provide EAS at

Page and Show Low for the period from October 1, 2009, through April 30, 2011. For Page,

t hat order established an annual subsidy of $1,995,27 3 for 19 nonstop or one

- stop round trips

per week to Phoenix, and Denver or Las Vegas. At Show Low, the order established an annual

subsidy of $1,407,255 for 19 nonstop round trips per week to Phoenix.

Request for Proposals

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

interested in providing service at Kingman, Page

, Prescott, and /or Show Low, with or without

subsidy support, for the two

- year period beginning May 1, 20 1 1 . Carriers should file their

proposals no later than December 21 . After that date, our staff will docket proposals, thereby

making them public, and shortly afterwards will pro vide a summary of the proposals to the

communities and ask them for their final comments. We will give full consideration to all

proposals filed in a timely manner.

Interested carriers should prepare their proposals with every expectation that their initial

proposals will also be their final and only proposals. We retain the discretion to negotiate

proposals with carriers when we deem it desirable. We also retain th e discretion to reject

outright all unreasonable or unrealistic proposals and solicit a new round of proposals.

We are here providing interested carriers with some basic information to serve as guidance

when they prepare their proposals, but we will not p rescribe a precise format. 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 m ight 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

affect ed community and the Department. 1

Proposals should provide sufficient capacity to accommodate historical levels of traffic. In

order to assist carriers in developing traffic and revenue projections for their proposals, we

have provided a summar y of histo rical passengers in Appendix B. W e expect service levels

that are c onsistent with what the communities currently receive , with service to Phoenix

, Las

Vegas, Denver, or any hub that offers access to the national air transportation system utilizing

15

- seat or larger aircraft

. With specific respect to Kingman, the Department expects proposals

for two round trips each weekday and weekend (12 a week) and for Page, Prescott, and Show

Low, we expect proposals for three round trips each day (18 a week). We would also entertain

proposals with 8/9

- seat aircraft and an additional frequency. Should the communities agree to

aircraft with few er than 15 passenger seats, in effect waiving their right t o 15

- seat or larger

aircraft, we would consider th e waiver to apply only to the two

- year carrier

- selection at hand,

1 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c)( 1) directs us to consider

four factors: (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub;

(3) interline arrangements with a larger carrier at the hub; and (4) community views. In addition, the

Consolidat ed Appropriations Act, 2008, Public Law 110

- 161 , 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. Inte rested carriers should also be aware that our 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.- 3

-

i.e. we would not assume that the communities’ views on any service options we receive before

making a long

- term carrier selection decision. Carriers are also welcome to propose more than

o ne option, if they choose; they need not limit themselves to those requirements if they

envision other, potentially more attractive service possibilities

-- different hubs, frequency or

equipment, for example

-- with subsidy requirements that remain compet itive.

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 communit y and meets the

operational needs of the airline s

. 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.

Special discussion concerning Kingman

Based on the most recent 12

- month period for which data are available (October 1, 2009

, through September 30, 2010), 2,027 passengers were enplaned and de planed at Kingman . The

annual subsidy amount for Kingman is $1,275,771 . Therefore, the subsidy per p assenger at

Kingman is $629

. While we are aware that Kingman suffered a nine

- month service hiatus, t he

Department is prohibited from subsidizing air service at a community where the subsidy per

passenger exceeds $200, unless the community is more than 21 0 highway miles from the

nearest large or medium hub airport. 2 Kingman exceeds the $20 0 per passenger cap and is 1 21

miles from Las Vegas McCarren Airport. Rather than terminate the community’s eligibility, at

this stage, the Department will solicit prop osals for EAS, and evaluate all proposals submitted

before committing to a two

- year contract or making a final determination on Kingman ’s

continuing eligibility. During the 30

- day 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.

New Filing Procedures

Carrier proposals should be submitted to the Department with all materials merged into a single

document. In addition, because the document will be published on Regulations.gov, each page

should be formatted to be viewed online.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying

activities, d rug

- free workplaces and nondiscrimination. 3

2 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. Consequently, all carriers receiving

Federal subsidy to support essential air service must certify that they are in compliance with

Department regulations regarding drug

- free workplaces and nondiscrimination, an d 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. All carriers that plan

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 Ac t 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).- 4

-

to submit proposals involving subsidy should submit th e required certifications along with their

proposals. Interested carriers requiring more detailed information regarding these

requirements, as well as copies of the certifications, should contact the Office of Aviation

Analysis at (202) 366

- 5903. The Dep artment is prohibited from paying subsidy to carriers that

do not submit these documents. 4

Community and State Comments

Civic officials are welcome to submit comments on the proposals at any time. 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 December 21 , the due date for carrier proposals.

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

- delegated to the

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We request that carriers interested in providing essential air service at Kingman, Page

, Prescott , and Show Low, Arizona, submit their proposals, with or without subsidy requests, no

later than December 21, 2010 . The proposals should be emailed to: EAS@dot.gov with the

title “Proposal to Provide Essential Air Service at Kingman, Page, Prescott

, and /or Show Low,

Arizona”; 5

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

3. The Department will serve a copy of this order on the mayor s and airport manager s of

Kingman, Page, Prescott, Show Low

, Great Lakes Aviation, Ltd. (Great Lakes)

, and the parties

listed in Appendix D.

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

Aviation Economic Regulations, 14 CFR 385.50, must file such petitions within ten (10) 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 on line at

www.regulations.gov

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

5 Questions regardi ng filings in response to this order should be directed to Michael Martin at 202

- 366

- 6494, or

via email at michael.f.martin@dot.gov

.

### Appendix A



## Area Map

### APPENDIX B

Page 1 of 4

Historical Origin

- Destination Plane Traffic 1



### Kingman, Arizona 2

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per Day 3

4 2006 602 606 1,208 8

1 2007 444 460 904 6

2 2007 572 554 1,126 7

3 2007 574 552 1,126 7

Annual

Totals 2,192 2,172 4,364 7

4 2007 775 554 1,329 8

1 2008 694 552 1,246 8

2 2008 528 865 1,393 9

3 2008 0 0 0 0

Annual

Totals 1,997 1,971 3,968 6

4 2008 0 0 0 0

1 2009 0 0 0 0

2 2009 240 182 422 3

3 2009 388 343 731 5

Annual

Totals 628 525 1,153 2

4 2009 433 334 767 5

1 2010 235 268 503 3

2 2010 248 190 438 3

3 2010 146 173 319 2

Annual

Totals 1,062 965 2,027 3

1 Source: USDOT Bureau of Transportation Statistics, TransStats Intermodal Database, Schedule T

- 1 00

. 2 Kingman received no air service from June 1, 2008 through April 7, 2009.

3 Average daily enplanements are calculated by dividing total enplanements and deplanements by 77,78 , 79, and 79

service days, for the first quarter, second quarter, third quarter, and fourth quarter, respectively, then by 2. Average

annual daily enplanements are calculated by diving the total enplanements and deplanements by 2, then by 313.

### APPENDIX B

Page 2 of 4

Historical Origin

- Destination Plane Traffic 1



### Page, Arizona

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per day 2

4 2006 1,268 1,316 2,584 16

1 2007 782 803 1,585 10

2 2007 1,639 1,448 3,087 20

3 2007 1,988 1,906 3,894 25

Annual

Totals 5,677 5,473 11,150 18

4 2007 1,076 1,142 2,218 14

1 2008 883 831 1,714 11

2 2008 1,672 1,526 3,198 21

3 2008 1,956 1,919 3,875 25

Annual

Totals 5,587 5,418 11,005 18

4 2008 958 1,007 1,965 12

1 2009 715 711 1,426 9

2 2009 1,361 1,215 2,576 17

3 2009 1,841 1,695 3,536 22

Annual

Totals 4,875 4,628 9,503 15

4 2009 1,072 1,086 2,158 14

1 2010 868 802 1,670 11

2 2010 1,790 1,627 3,417 22

3 2010 2,248 2,172 4,420 28

Annual

Totals 5,978 5,687 11,665 19

1 Source: USDOT Bureau of Transportation Statistics, TransStats Intermodal Database, Schedule T

- 1 00

. 2 Average daily enplanements are calculated by dividing total enplanements and deplanements by 77,78, 79, and 79

service days, for the first quarter, second quarter, third quarter, and fourth quarter, respectively, then by 2. Average

annual daily enplanements are calculated by diving the total enplanements and deplanements by 2, then by 313.

### APPENDIX B

Page 3 of 4

Historical Origin

- Destination Plane Traffic 1



### Prescott, Arizona 2

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per day 3

4 2006 915 1,081 1,996 13

1 2007 682 634 1,316 9

2 2007 698 701 1,399 9

3 2007 615 619 1,234 8

Annual

Totals 2,910 3,035 5,945 9

4 2007 1,697 1,998 3,695 23

1 2008 1,130 1,266 2,396 16

2 2008 775 844 1,619 10

3 2008 566 595 1,161 7

Annual

Totals 4,168 4,703 8,871 14

4 2008 2,933 2,990 5,923 37

1 2009 2,132 2,123 4,255 28

2 2009 2,918 2,920 5,838 37

3 2009 3,239 3,217 6,456 41

Annual

Totals 11,222 11,250 22,472 36

4 2009 3,324 3,388 6,712 42

1 2010 2,026 1,910 3,936 26

2 2010 2,486 2,484 4,970 32

3 2010 1,742 1,719 3,461 22

Annual

Totals 9,578 9,501 19,079 30

1 Source: USDOT Bureau of Transportation Statistics, TransStats Intermodal Database, Schedule T

- 1 00

. 2 Prescott received no service from an EAS carrier from June 1, 2008

– September 7, 2008. Prescott continued to

receive non

- subsidized EAS service from Horizon Air during this period and the numbers above reflect that traffic.

3 Average daily enplanements are calculated by dividing total enplanements and deplanements by 77,78, 79, and 79

service days, for the first quarter, second quarter, third quarter, and fourth quarter, respectively, then by 2. Average

annual daily enplaneme nts are calculated by diving the total enplanements and deplanements by 2, then by 313.

### APPENDIX B

Page 4 of 4

Historical Origin

- Destination Plane Traffic 1



### Show Low, Arizona

Quarter Year Deplanements Enplanements Total

Traffic Enplanements

per day 2

4 2006 1,219 1,219 2,438 15

1 2007 932 1,057 1,989 13

2 2007 1,585 1,680 3,265 21

3 2007 2,100 2,163 4,263 27

Annual

Totals 5,836 6,119 11,955 19

4 2007 1,474 1,540 3,014 19

1 2008 914 1,020 1,934 13

2 2008 1,220 1,373 2,593 17

3 2008 1,743 1,813 3,556 23

Annual

Totals 5,351 5,746 11,097 18

4 2008 1,085 1,118 2,203 14

1 2009 672 784 1,456 9

2 2009 833 863 1,696 11

3 2009 1,140 1,201 2,341 15

Annual

Totals 3,730 3,966 7,696 12

4 2009 797 796 1,593 10

1 2010 508 584 1,092 7

2 2010 742 797 1,539 10

3 2010 654 742 1,396 9

Annual

Totals 2,701 2,919 5,620 9

1 Source: USDOT Bureau of Transportation Statistics, TransStats Intermodal Database, Schedule T

- 1 00

. 2 Average daily enplanements are calculated by dividing total enpl anements and deplanements by 77,78, 79, and 79

service days, for the first quarter, second quarter, third quarter, and fourth quarter, respectively, then by 2. Average

annual daily enplanements are calculated by diving the total enplanements and deplaneme nts by 2, then by 313.

### 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 e ligibility

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

Av iation 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 ext ent 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 chang es 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 shal l not operate to controvert the foregoing paragraph.

Funds are not currently available for performance under this solicitation beyond December 3,

2010. The Department’s obligation for performance under this solicitation beyond December 3,

2010, is contin gent upon 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 December 3, 2010, until funds are made availab le to the

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

December 3, 2010, the carrier will receive notice in writing by the Department.

All claims for payment must be submitted within 60 days of the last day of servic e provided

under this order.

### Appendix D

Scheduled Air Carriers, Contiguous US and Puerto Rico

Air Greco/Wings Air

Air Sunshine, Inc.

Air Sunshine, Mirmohammad Adili

Air Wisconsin, Annette Daly

Air Wisconsin, Jim Rankin

Airline Associates, Bill Mishk

Alaska Airlines, Jeff Cole

Alaska Airlines, Sandy Sinick

Allegiant Air, Brian Davis

American Airlines, Carl Nelson

American Eagle, Jeffrey Hartz

Bemidji Aviation, Cori Rude

Bemidji Aviation, Arlen Rinkenberger

Cape Air, Andrew Bonney

Cape Air, Dan Wolf

Cape Air, J.Flaherty

Colgan Air, Kevin Scott

Colgan Air, Mike Colgan

CommutAir, Andy Price

CommutAir, Joel Raymond

Consultant, Robert Silverberg

Continental, Bruce Keiner

Continental, Dan Weiss

Continental, Lorry Halloway

Delta, Anthony Canitano

Delta, Dan Shuman

Delta, Jeff Morgan

Delta, Joe Esposito

Delta, Karen Zachary

Delta, Kristal Murphy

Delta, Sascha Vanderbellen

DHS, Bill Ragan

DHS, David Bernier

Era Aviation, Mike Lenorman

Executive Airlines, Kate Soled

Frontier Flying, Bob Hajducovich

GemAir/Salmon Air, Dan Schroeder

GemAir/Salmon Air, JoAnn Wolters

Great Lakes, Chuck Howell

Great Lakes, Doug Voss

Great Lakes, Greg Stephens

Gulfstream, Dave Hackett

Gulfstream, Mickey Bowman

Gulfstream, T. Cooper

Horizon Air, Dan Russo

Horizon Air, Jennifer Thompson

Horizon Air, Mike McQueen

Horizon, Jeff Cole

ICEPR, Luis Irizarry Intrepid Interntl Air, Rick Eyk

Island Air Charters, Linda House

Jet Air, Daniel Wolford

Kenmore Air, Tim Brooks

Mesa Air, Michael Lotz

Mesaba, John Spanjers

Mesaba, Max Shemesh

Midwest Airlines, Greg Aretakis

MN Aviation, Jose Maldonado

Multi Aero, Darnea

Multi Aero, Shane Storz

Northwest Airlines, Aaron Murray

Northwest, Tim McDonald

NYDC, Henok Araya

OST, Brian Swanson

OST, Dennis DeVany

OST, Kevin Adams

OST, Kevin Schlemmer

OST, Michael Martin

OST, Renee Williams

Pacific Wings, Greg Kahlstorf

PenAir, Danny Seybert

PenAir , Scott Bloomquist

Pinnacle Airlines, Joe Williams

Pinnacle Airlines, Phil Reed

Planemasters, Inc., John Kessler

Planemasters, Inc., Paul Berliner

Planemasters, Inc., Todd DeSimone

Public Charters, Jim Gallagher

Scenic, Mary Schneider

Scenic, Mitzi Daines

SeaPort/Wings of Alaska, Jim Day

SeaPort/Wings of Alaska, Nate Vallier

Seaport/Wings of Alaska, Rob McKinney

Shuttle America, Jerry Balsano

SkyWest, Eric Christensen

SkyWest, Michael Thompson

SkyWest, Steve Hart

Sovereign Air, Bob Karns

Sovereign Air, Lois R. Barton

Tradewind, Eric Zipkin

Trans States, Fred Oxley

Trans States, Gerry Wigmore

United, Alicia Gabriel

United, James Starnes

US Airways, Benjamin Slocum

US Airways, Howard Kass

US Airways, Jason Reisinger

Warbelows Air Ventures, Art Warbelow