Order 2010-6-5

Served: June 2, 2010

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 2nd day of June, 2010

Essential Air Service at

PRESQUE ISLE, MAINE Docket DOT-OST-2000-8012

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

ORDER SELECTING CARRIER

Summary

By this order, the Department is selecting Colgan Air Inc., operating as US Airways 

Express (Colgan), to provide essential air service (EAS) at Presque Isle, Maine, for an 

annual subsidy of $2,812,853 for the two-year period from June 1, 2010 to May 31, 2012.

1

Background

By Order 2008-2-53, the Department selected Colgan to provide the community 19 weekly 

nonstop round trips to Boston at an annual subsidy of $2,643,588, for the two-year period 

from June 1, 2008, through May 31, 2010. As the end of the contract was approaching, we 

issued Order 2010-3-3, March 3, 2010, requesting proposals to serve Presque Isle for a 

new, two-year term. In response, we received proposals from Colgan, Charter Air 

Transport (Charter Air), and Sovereign Air (Sovereign).

Each carrier’s complete proposal may be accessed online at http://www.regulations.gov/

by entering DOT-OST-2000-8012 in the search block.

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

funds.
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Proposal of Charter Air

Charter Air proposed one service option using 30-seat Embraer EMB-120 aircraft 

operating two nonstop round trips, six days a week, over a Presque Isle-Boston routing for 

an annual subsidy of $2,737,133. 

Proposal of Colgan

Colgan proposed one service option that would continue to provide three nonstop round 

trips each weekday and two nonstop round trips on Saturday and Sunday (19 a week), over 

a Presque Isle-Boston routing for an annual subsidy of $2,812,853 using 34-seat Saab 340 

aircraft. Colgan did make clear, however, that under Instrument Flights Rules (IFR), due 

to the length of haul and flight time, and Federal Aviation Administration (FAA) approved 

passenger and baggage weights, the actual number of seats available for sale is fewer than 

34. Due to these conditions, Colgan states that on the Boston to Presque Isle leg the 

aircraft is limited to 28 passengers, and from Presque Isle to Boston the aircraft is limited 

to 31 passengers. (The difference in seat availability by direction is due to the proximity 

of alternate airports to Boston compared to Presque Isle.) Therefore, Colgan believes its 

proposal of three round trips a day is required to meet the community’s guaranteed 67 

seats per day in each direction.

Proposal of Sovereign

Sovereign Air proposed two service options over a Presque Isle-Boston routing. Option 1 

would offer four daily nonstop round trips using 19-seat Jetstream 32 aircraft for an annual 

subsidy of $2,082,548. Option 2 would offer five daily nonstop round trips using 12-seat 

Beechcraft 350 King Air aircraft for an annual subsidy of $1,867,936. Option 2, however, 

does not meet the 15-seat requirement in the EAS governing statutes (see 49 USC §41732 

(b)(3)).

Community Comments

On March 31, 2010, we requested community comments regarding the carrier selection at 

Presque Isle. In a letter dated April 21, 2010, James Bennett, Presque Isle City Manager,

stated that it was the recommendation of the Presque Isle City Council that Colgan be 

awarded the EAS contract for the next two years. Mr. Bennett stated the principal reasons 

for Colgan’s selection were: 1) its proposal of 19 flights per week, including Saturday 

service; 2) the carrier’s significant experience in providing scheduled air service to the 

Presque Isle community; and 3) it was the only proposal to have a code share with a major 

carrier, in this case, US Airways.

Decision

After carefully reviewing each carrier’s proposal and taking into account community 

feedback, we have decided to select Colgan’s proposal of three Presque Isle-Boston 

nonstop round trips each weekday and two nonstop round trips on Saturday and Sunday (19 

a week) for an annual subsidy of $2,812,853. We find that the service and subsidy levels 

are reasonable, and will meet the community’s EAS needs.

We base our decision to choose Colgan on the four carrier-selection criteria contained in 

49 U.S.C. §41733(c): 1) the demonstrated reliability in providing scheduled air service; 2)
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the contractual and marketing arrangements with a larger carrier to ensure service beyond a

hub airport; 3) interline agreements with a larger carrier; and 4) support by the 

community’s elected officials for the applicant’s proposal. Colgan’s proposal meets all 

four statutory criteria. Colgan is an established scheduled air carrier serving communities 

throughout the U.S., and, in the case of Presque Isle, has provided the community reliable 

air service for several years. Colgan has a code share with US Airways and, therefore, can 

provide its passengers connections beyond the Boston hub to the national air transportation 

network with relative ease. Colgan, through its code share with US Airways, has interline 

agreements with most major air carriers, enabling passengers to reach their destination with 

one reservation, ticket, and baggage check-in. Lastly, the community, in particular the 

elected officials, overwhelmingly supports Colgan’s proposal.

Neither Charter Air’s nor Sovereign’s proposals meets any of the above statutory criteria, 

and, in the case of Sovereign, the carrier currently does not have the requisite operating 

authority from either the FAA or the Department of Transportation’s Economic Fitness 

Division to operate its proposed service.

Colgan has stated that its aircraft are consistently weight limited to 28 or 31 seats 

(depending on direction), under IFR conditions, such that two round trips a day would not 

be sufficient to meet Presque Isle’s EAS determination of 67 seats a day. We therefore 

find that Colgan’s proposal does not exceed the program guidelines of 67 seats per day in 

each direction. 

Therefore, based on all of the above, we will select Colgan to provide EAS at Presque Isle 

for a new two-year term at its proposed service and subsidy levels.

We shall make this selection of Colgan contingent upon the Department’s receiving 

properly executed certifications from the 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.

Carrier Fitness

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

reliable service before we may subsidize it to provide essential air service. Colgan 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. We have 

contacted the Federal Aviation Administration, and it has raised no concerns that would 

negatively affect our fitness finding. We therefore conclude 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 Colgan Air Inc., to provide essential air service at Presque Isle; Maine;
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2. We set the final rate of compensation for $2,812,853 for the provision of essential air 

service at Presque Isle, Maine, as described in Appendix C;

3. We direct Colgan Air 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 Colgan Air Inc. continues to be fit, willing and able to operate as a 

certificated carrier and capable of providing reliable essential air service at Presque Isle, 

Maine;

5. Docket 2000-8012 will remain open pending further Department action; and

6. We will serve copies of this order on the City and Airport Managers of Presque Isle,

Colgan Air Inc., Charter Air Transport, and Sovereign Air.

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

AREA MAP

 
Appendix B
 Appendix C

 

Colgan Air Inc.

Essential Air Service to be Provided at Presque Isle, Maine

Effective Period: June 1, 2010 through May 31, 2012

Scheduled Service: 19 weekly nonstop round trips between Presque Isle and Boston

Aircraft: Saab 340 aircraft

Rate per Eligible Flight: $1,4671

Weekly Ceiling: $55,7462

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 the 

carrier do not constitute a total or partial reduction or cessation of payment.

Funds are not currently available for performance under this order beyond September 30, 2010. The Department’s 

obligation for performance under this order beyond September 30, 2010, 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 30, 2010, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 30, 2010, the 

Department will provide notice in writing to the carrier.

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.

All claims for payment must be submitted within 60 days of the last day of service provided under this order.

 1 Annual compensation of $2,812,853 divided by 1917 annual departures (38 weekly departures x 52 weeks x 97 

percent completion). 2 38 arrivals and departures per week multiplied by $1,467 per flight.