Order: 2011-1-24

 Served: January 28, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 28th of January, 2010

Essential Air Service at

MUSCLE SHOALS, ALABAMA

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

 Docket DOT-OST-2000-7856

 

ORDER ESTABLISHING TEMPORARY RATE

Summary

By this order, the Department is establishing a temporary subsidy rate for Mesaba Airlines, Inc., 

operating as Delta Connection (Mesaba) for its subsidized essential air service (EAS) at Muscle 

Shoals, Alabama, for the period from February 1, 2011, until a replacement carrier is selected 

and inaugurates full EAS.

Background

By Order 2008-10-17, October 16, 2008, the Department selected Mesaba to serve Muscle 

Shoals to Memphis for the period from February 1, 2009, through January 31, 2011, for an 

annual subsidy rate of $1,782,928. Order 2009-4-24, April 28, 2009, approved a request from

the community and Mesaba to change Muscle Shoals’ service pattern from Memphis to Atlanta, 

with no change in subsidy.

By Order 2010-10-13, October 19, 2010, the Department requested proposals from interested 

airlines to serve Muscle Shoals with a due date of November 22. Because the Department

received several requests to extend the deadline for proposals, as well as the due date for 

community comments, we do not have enough time to issue a carrier-selection decision before 

the contract expiration date of January 31. Therefore, we need to establish a subsidy rate for 

Mesaba to serve Muscle Shoals from February 1 until a carrier is selected and starts service 

there. 
- 2 -

Decision

Consistent with established program policy, we typically use a carrier’s prospective proposal that 

was submitted during the competitive bid process to establish a bridge rate until the new carrier 

inaugurates service. However, in this case Mesaba did not submit a proposal to continue service 

at Muscle Shoals. We contacted the carrier about a short-term, temporary rate, and the carrier 

agreed to extend the terms of the existing contract. We will therefore establish it as the final rate

for the period from February 1, 2011, until a replacement carrier inaugurates service.

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

ACCORDINGLY,

1. We extend the subsidy rate set by Order 2008-10-17 for Mesaba Airlines, Inc. for essential air 

service at Muscle Shoals, Alabama, as described in Appendix B;

2. We direct Mesaba 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 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;

3. This docket will remain open until further order of the Department; and

4. We will serve copies of this order on the City and Airport Managers of Muscle Shoals and 

Mesaba Airlines, Inc.

By:

SUSAN L. KURLAND

Assistant Secretary for 

Aviation and International Affairs

(SEAL)

An electronic version of this document is available online at www.regulations.gov
Appendix A
Appendix B

Mesaba Airlines, Inc.

Essential Air Service to be provided at Muscle Shoals, Alabama

Effective Period: February 1, 2011, until another airline inaugurates full EAS.

Scheduled Service: 14 nonstop round trips per week to Atlanta

Rate per Eligible Flight1

Weekly Ceiling per Community

: $1,262

2: $35,336

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 this order beyond March 3, 2011, 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 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.

 

1 Annual compensation of $1,782,928, divided by1,412 annual departures (28 weekly flights x 52 weeks x 97 

percent completion).

2 28 arrivals and departures per week multiplied by $1,262 per flight.