Or der: 20 10

- 6

- 3

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 2 nd of June , 2010

Essential Air S ervice at

MCCOOK, NEBRASKA

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

- OST

- 1997

- 3005

ORDER SELECTING CARRIER

Summary By this order

, the Department is s electing Great Lakes Aviation, Ltd. ( “ Great Lakes ” ) to
continue to provide essential air service (EAS) at McCook, Nebraska , at a n an nual subsidy rate

of $ 1,796,795

, for the next two

- year period from June 1 , 2010, through May 31, 2012

. 1

Background By Order 2008

- 5

- 2, May 5, 2008, the Department selected G reat Lakes to provide 12 weekly nonstop flights using Beechcraft 1900D aircraft from McCook to Denver International Airport,

for a two

- year period beginning when the carrier inaugurated service through the end of the 24 th

month thereaf ter, at an annual subsidy of $1,583,277. Great Lakes inaugurated service to
McCook on June 1, 2008.

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.- 2

-

In anticipation of the end of Great Lakes’ current contract on May 31, 2010, the Department

issued Order 20 10

- 2

- 14

, February 16, 2010

, to solicit propos als from all interested air carriers to provide service at McCook

.

Proposal s In response to that order, we received proposals from t hree carriers, Great Lakes , the incumbent ; Alaska Juneau Aeronautics d/b/a SeaPort Airlines (“SeaPort”) ; and TransportAzumah.

Great Lakes’ proposal would continue to offer 12 nonstop round trips per week from McCook to Denver International Airport utilizing 19

- seat Beech craft 1900 D aircraft, for an annual subsidy of $1,796,795.

TransportAzumah proposes to offer 14 nonstop round trips per week from McCook to Denver International Airport using 30

- passenger EMB

- 120ER aircraft, for an annual subsidy of $2,412,865. This proposal offers two more round trips per week than the Department solicited using 15

- seat or larger aircraft.

SeaPort’s proposal offers 18 nonstop round trips per week between McCook and Denver’s business aircraft center using 9

- seat Pilatus PC

- 12 aircraft, for a first year subsidy of $1,963,367, and a second year subsidy of $1,991,516.

Th e complete proposal s of all three carriers may be accessed online at http://www.regulations.gov/ by entering “ DOT

- OST

- 1997

- 3005 .”

Community and State Comments

On March 24 , 2010 , we requested co mmunity co mment s regarding the carrier selection at
McCook

.

In an April 27 e

- mail to the Department, Mayor Dennis Berry stated that in its final vote, the McCook City Council voted 5

- 0 for Great Lakes’ proposal, but SeaPort did receive serious consideration by t he McCook City Council and the Airport Advisory . He states that the community remains very concerned that Great Lakes “ has no marketing in the area and our enplanements are weak. [Great Lakes] seems to charge rates that drive passengers away. ” Further, he states that Great Lakes flies past McCook fairly often without stopping and its service is spotty at best , and appear s unresponsive to the concerns of passengers or the city. Mayor Berry says, “ the users of the service would like to see improvements made in a reliable schedule, cost of the flights and g eneral service. ” Therefore, although the city of McCook, Nebraska

, voted to approve Great Lakes, “major concerns exist .”

Decision TransportAzumah does not have the requisite operating authority from either the Federal Aviation Administration or the Depar tment of Transportation to operate its proposed service. Moreover, there was no community support for the carrier’s proposal, and the requested subsidy

is greater than Great Lakes ’

.- 3

-

SeaPort proposed to use aircraft with fewer than 15 seats, and McCook di d not waive its statutory right to 15

- seat aircraf t. Its proposed subsidy is larger than Great Lakes and

, while it

receiv ed some consideration in the community, it was not recommended by the community

.

Great Lakes was recommended by the community, although with serious concerns, and we find that its requested subsidy is reasonable. Therefore, we will reselect Great Lakes to provide

service from McCook to Denver, for the next two year period from June 1, 2010, throu gh May 31, 2012, at an annual subsidy rate of $ 1,796,795 . We expect Great Lakes to work with the community of McCook to address any concerns it has regarding its marketing, schedule reliability, and fares.

We shall make Great Lakes’ selection at McCook c ontingent upon the Department’s receiving properly executed certifications from Great Lakes that it is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations governing lobbying activ ities.

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

. Great Lakes is sub j ect 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

fi nding. 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 Great Lakes Aviation, Ltd. to provide essential air service at McCook, Nebraska ;

2 . We set the final rate of compensation for Great Lakes Aviation, Ltd.

, for the provision of

essential air service at McCook, Nebraska , as described in Appendix C ;

3 . We direct Great Lakes Aviation, Ltd. 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 Great Lakes Aviation, Ltd. continue s to be fit, willing and able to operate as a certificated carrier and capable of providing reliable essential air service at McCook, Nebraska ;

5 . Th is doc ket will remain open until further order of the Department; and- 4

-

6 . We will serve copies of this order on the Mayor of McCook, the manager at McCook Regional Airport, Great Lakes Aviation, Ltd., Alaska Juneau Aeronautics, Inc. d/b/a SeaPort Airlines, and TransportAzumah.

By:

SUSAN L. KURLAND Assistant Secretary

for Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the Internet at http://www.regulations.govAppendix A



## AREA MAP

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

Sabre Airline Solutions®.Appendix BAppendix C

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at McCook, Nebraska

Effective Period : June 1 , 2010, through May 31, 201 2

Scheduled Service : 1 2 nonstop round trips t o Denver International Airport each week

Aircraft : Beech 1900

, 19 seats Rate per Eligible Flight: $ 1,464 1
Weekly Ceilin g : $ 35,136 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 lan ding 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 subsi dy. 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 beyo nd 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 D epartment 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

s ubsidy 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 complete ly , 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 paym ents 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 servic e 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 September 30 , 20 10

. The Governmen t’s obligation for performance under this order beyond September 30 , 20 10 , 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 , 20 10 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30 , 20 10 , the Department will provide notice in writing t o 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 $1,796,795 , divided by 1,227 annual departures (313 service days x 4 flights per service day x 98 percent comple tion)

. 2 24 flights per week multiplied by $ 1,464 per flight.