Order: 2015-3-10 

Served: March 24, 2015 

 UNITED STATES OF AMERICA 

 DEPARTMENT OF TRANSPORTATION 

 OFFICE OF THE SECRETARY 

 WASHINGTON, D.C. 

Issued by the Department of Transportation 

on the 24th day of March, 2015 

Essential Air Service at 

 

 EL CENTRO, CALIFORNIA DOT-OST-2008-0299 

 

under 49 U.S.C. § 41731 et seq. 

ORDER RE-SELECTING CARRIER AND 

ESTABLISHING SUBSIDY RATES 

Summary 

By this Order, the Department is re-selecting SeaPort Airlines, Inc. (SeaPort) to provide 

Essential Air Service (EAS) at El Centro, California, for the two-year period beginning 

May 1, 2015, through April 30, 2017. SeaPort will provide 12 nonstop round trips per 

week to Burbank and 12 nonstop round trips per week to San Diego (24 total round trips 

per week), using 9-seat Cessna Caravan aircraft, at an annual subsidy rate of $2,264,008.1

Background 

By Order 2013-1-2, issued on January 2, 2013, the Department selected SeaPort to provide 

subsidized EAS at El Centro using 9-seat Cessna Caravan aircraft, for the two-year period 

from May 1, 2013, through April 30, 2015. Under the terms of that contact, SeaPort has 

been providing El Centro with 29 weekly nonstop round trips to San Diego, at an annual 

subsidy of $1,943,751. 

In anticipation of the end of that rate term, the Department issued Order 2014-12-2, on 

December 3, 2014, soliciting proposals from air carriers interested in providing EAS at El 

Centro, with subsidy support if necessary. In response to that Order, the Department 

received proposals from Great Lakes Aviation, Ltd. (Great Lakes), and SeaPort. 

 

1

 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds. 
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Those proposals, as well as the complete public file for EAS at El Centro, may be accessed 

online through the Federal Docket Management System at http://www.regulations.gov, by 

entering “DOT-OST-2008-0299” in the “SEARCH for: Rules, Comments, Adjudications 

or Supporting Documents:” field. 

Proposal of Great Lakes 

Great Lakes proposed to provide El Centro with 12 nonstop round trips per week to Los 

Angeles International Airport (LAX), using 30-seat Embraer EMB-120 Brasilia aircraft, at 

an annual subsidy request of $2,086,922. Great Lakes has a code share in place with 

United Airlines at LAX, and electronic interline ticketing and baggage agreements with 

American Airlines, Delta Air Lines, and United Airlines. 

Proposal of SeaPort 

SeaPort proposed to provide El Centro with 12 nonstop round trips per week to Burbank 

and 12 nonstop round trips per week to San Diego (24 total weekly round trips), using 9-

seat Cessna Caravan aircraft, at an annual subsidy request of $2,264,008. 

Community Comments 

By letter dated January 8, 2015, the Department requested community comments regarding 

this EAS selection case by February 13, 2015. By letter dated February 10, 2015, Mr. 

Ryan Kelley, Chairman of the County of Imperial Board of Supervisors, provided support 

for the re-selection of SeaPort. In that letter, Mr. Kelley stated that, “the Board determined 

that SeaPort has demonstrated its ability to collaborate with the region to increase 

enplanements and provide the residents and visitors of Imperial County more flights and 

options.” The Chairman further explained that, “the continued willingness of SeaPort to 

work closely with the community in determining schedules and to help [the community] 

market the airport locally is a definite plus that is resulting in turning around the declining 

enplanements.” 

By letter dated February 12, 2015, the Honorable Efrain Silva, Mayor of El Centro, 

provided support for the re-selection of SeaPort. In that letter, Mayor Silva explained that 

local agencies such as the County of Imperial, Imperial Irrigation District, and local 

businesses have been encouraged to use the air transportation services provided by 

SeaPort. The Mayor further stated that, “SeaPort Airlines has been implementing a very 

aggressive five year marketing strategy to promote its carrier service in the community and 

is committed to continue offering its service.” 

By letter dated February 12, 2015, Ms. Marlene D. Best, City Manager of the City of 

Imperial, provided support for SeaPort. In that letter, Ms. Best explained that, “SeaPort 

has become a good community partner and is pursuing a major marketing push.” The City 

Manager further stated, “SeaPort’s proposal offers the opportunity for same day 

connections from other areas of southern California to attend meetings and functions in our 

region and have the convenience of returning home in the same day. This service is just 

beginning to be realized by public agencies and businesses and it’s not offered in the Great 

Lakes proposal.” 
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By letter dated February 12, 2015, the Honorable George A. Nava, Mayor of the City of 

Brawley, stated that there is a “significant need for the continuance of the EAS Program in 

our community. The City of Brawley is committed to the Program’s success and fully 

understands the importance of the resource.” 

Decision 

In selecting an air carrier to provide subsidized EAS not in Alaska, 49 U.S.C. 

§ 41733(c)(1) directs the Department to consider five factors: (1) service reliability; (2) 

contractual and marketing arrangements with a larger air carrier at the hub; (3) interline 

arrangements with a larger air carrier at the hub (4) community views, giving substantial 

weight to the views of the elected officials representing the users of the service; and (5) 

whether the air carrier has included a plan in its proposal to market the service. In addition,

the Consolidated and Further Continuing Appropriations Act, 2012, Public Law No. 112-

55, and continued in the Continuing Appropriations Resolution, 2015, Public Law No. 113-

164, provides that when selecting an air carrier to provide EAS, the Department may 

consider the relative subsidy requirements, thus codifying a factor that has been considered 

since the inception of the program. 

The community fully supports the re-selection of SeaPort, which has been providing 

reliable EAS at El Centro since May 2013, and is proposing 24 weekly round trips to 

Burbank and San Diego. Great Lakes, on the other hand, is proposing 12 weekly round 

trips to LAX, a hub destination that the community does not support. Additionally, the 

Department notes that SeaPort has allotted funds in its proposal for a multi-year marketing 

campaign at the community. 

Great Lakes has a code share, electronic interline ticketing, and baggage agreements with 

larger air carriers at LAX; however, as described above in the Department’s statutory 

selection criteria, the Department is directed to give substantial weight to the views of 

elected officials representing the users of EAS. SeaPort has gained the unanimous support 

of all facets of the community and will provide El Centro with an appropriate mix of 

available seats and frequencies. The Department notes that SeaPort’s proposal requested 

an annual subsidy that is more than Great Lakes; however, SeaPort is proposing twice the 

amount of frequencies and has a proven record of providing reliable EAS at El Centro and 

other EAS markets in the U.S. Additionally, the air carrier’s service package will allow 

passengers to connect to air service provided by a variety of full service, low-fare/cost, and 

international carriers at San Diego and additional domestic carriers at Burbank. This 

selection of SeaPort will ensure the citizens of El Centro have access to the National 

Airspace System (NAS). 

The Department shall make this selection of SeaPort at El Centro contingent upon 

receiving properly executed certifications from the air carrier that it is in compliance with 

the Department’s regulations regarding drug-free workplaces and nondiscrimination, as

well as the regulations concerning lobbying activities.2 

 

2 The certifications are internet accessible at: http://www.dot.gov/policy/aviation-policy/small-communityrural-air-service/essential-air-service. 
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Legislative Changes That May Affect Future EAS Eligibility at El Centro 

The Federal Aviation Administration (FAA) Modernization and Reform Act of 2012 

(Public Law No: 112-95) amended 49 U.S.C. § 41731(a)(1)(B) to change the definition of 

“eligible place” for the purpose of receiving EAS. The amendment states that to be 

eligible, a community must maintain an average of 10 enplanements or more per service 

day, as determined by the Secretary, during the most recent fiscal year beginning after 

September 30, 2012. The legislation exempts locations in Alaska and Hawaii and 

communities that are more than 175 driving miles from the nearest large- or medium-hub 

airport. As El Centro is within 175 miles of San Diego International Airport (SAN), a 

large-hub airport, it must meet the 10-enplanement-a-day threshold for EAS to continue 

after FY2013 or otherwise face termination of its eligibility to receive EAS, barring a 

waiver from the Secretary. 

Additionally, the Department is prohibited from subsidizing air service at a community 

where the subsidy per passenger exceeds $200, unless the community is more than 210 

highway miles from the nearest large- or medium-hub airport. This applies to El Centro 

due to the fact that it is located less than 210 miles from SAN, a large-hub airport.3

By Order 2014-4-26, issued on April 24, 2014, the Department issued a show-cause Order 

directing interested parties to submit objections to the Department’s tentative findings that 

El Centro enplaned fewer than 10 passengers per day. In response to that Order, the 

Department received objections from the community, but none of those objections disputed 

our findings that El Centro enplaned fewer than 10 passengers per day during FY 2013. 

Therefore, by Order 2014-6-6, issued on June 24, 2014, the Department made final its 

tentative decision in Order 2014-4-26, thereby terminating the EAS eligibility of El Centro. 

On July 22, 2014, Mr. Ralph Cordova, Jr., Imperial County Executive Officer, submitted 

an application for a waiver on behalf of the community of El Centro. 

By Order 2014-9-21, issued on September 26, 2014, the Department granted the waiver 

petition submitted on behalf of El Centro. That Order states that El Centro’s compliance 

with 49 U.S.C. § 41731(a)(1)(B) will be re-assessed based on Fiscal Year 2015 data 

(October 1, 2014, through September 30, 2015). 

 

3 Congress first established the $200 ceiling under P.L. 101-164 for fiscal year 1990, and re-established 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. 
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Air Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require the Department to find an air carrier fit, willing, 

and able to provide reliable service before it can provide subsidized EAS. SeaPort is 

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

to the Department’s attention that would bring into question the air carrier's fitness at this 

time. The Department’s staff has contacted the Federal Aviation Administration, and it has 

raised no concerns that would negatively affect the Department’s fitness findings. The 

Department therefore concludes that SeaPort is reliable and remains fit to conduct the 

operations proposed here. 

This Order is issued under authority delegated in 49 CFR Part 1.25a(b). 

ACCORDINGLY,

1. The Department selects SeaPort Airlines, Inc. to provide Essential Air Service at El 

Centro, California, at the service levels and subsidy rate as described in Appendix B, for 

the period from May 1, 2015, through April 30, 2017; 

2. The Department directs SeaPort Airlines, 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 

from the service date of this Order 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 air carrier may forfeit its compensation for any claim that is not 

supported under the terms of this Order; 

3. The Department finds SeaPort Airlines, Inc. fit, willing and able to operate as a 

certificated air carrier, and capable of providing reliable Essential Air Service at El Centro, 

California; 

 
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4. This docket will remain open pending further Department action; and 

5. The Department will serve copies of this Order on the civic officials of El Centro, 

Imperial, and Brawley, California, the Manager of Imperial County Airport, SeaPort 

Airlines, Inc., Great Lakes Aviation, Ltd., and the service list for this docket. 

By: 

 

 BRANDON M. BELFORD 

 Deputy Assistant Secretary for 

 Aviation and International Affairs 

(SEAL) 

An electronic version of this document is available at 

 http://www.regulations.gov 
Appendix A 

SeaPort Airlines, Inc. 

Annual Compensation Requirements for Essential Air Service at El Centro, California 

12 Round Trips per Week to San Diego and 12 Round Trips per Week to Burbank 

98.0% Completion Factor 

Operations Projections

Average Sector Length (sm) 140

Scheduled Departures 2,496

Scheduled Block Hours 2,496

Projected Completion Factor 98%

Projected Completed Departures 2,446

Projected Completed Block Hours 2,446.1

Passenger Projections

Projected Passengers 7,675

Passengers per Departure 3.1

Projected Average Fare $72.24  

Revenue Passenger Miles (RPMs)

                  

1,074,500

Available Seat Miles (ASMs) 3,082,061

Projected Load Factor 34.9%

Financial Projections

Revenues

Passenger Ticket Revenues $554,428  

Ancillary Revenues $13,861  

Total $568,289  

Expenses

Flight Operations $269,069  

Aircraft Ownership/Lease $531,000  

Fuel & Oil $614,211  

Sales & Marketing $25,000  

Traffic Servicing $451,337  

Insurance $51,368  

Maintenance $403,603  

Sub‐Total ‐ Direct $2,345,588  

Indirect $351,838  

Total Expenses $2,697,426  

Projected Operating Profit/(Loss) ($2,129,137)

Subsidy Calculations

Operating Loss $2,129,137  

Economic Return @ 5% $134,871  

Required Subsidy $2,264,008  
 Appendix B 

 

 

SeaPort Airlines, Inc.

Essential Air Service to be provided at El Centro, California 

Effective Period: May 1, 2015, through April 30, 2017 

Scheduled Service: 12 nonstop round trips each week to San Diego and 12 nonstop round trips 

each week to Burbank (24 total round trips per week) 

Aircraft: 9-Seat Cessna Caravan 

Rate per Eligible Flight: $9231 

Weekly Ceiling: $44,3042

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 service levels, the carrier may cease to provide service to that specific location 

without regards 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 may not be available for performance under this order beyond September 30, 2015. The Government’s obligation for 

performance under this order beyond September 30, 2015, 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 September 30, 2015, until funds are made available to the Department for performance. If sufficient funds are 

not made available for performance beyond September 30, 2015, the Department will provide notice in writing to the carrier. 

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 31; 

August claims must be submitted by November 30, and so on. 

 

1

 Annual compensation of $2,264,008 divided by 2,454 annual departures (313 service days x 8 flights per service 

day x 98 percent completion). 

2 48 flights per week multiplied by $923 per flight.