Order 20 10

- 5

- 32

Served: May 28 , 20 10



### UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 28 th day of May , 20 10

Essential Air Service at

MASSENA, OGDENSBURG AND WATERTOWN, NEW YORK

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 1997

- 2842



### ORDER REQUESTING PROPOSALS

Summary By this order, the Department is requesting proposals , by June 30

, from carriers interested in providing essential air service (E AS) at Massena, Ogdensburg and Watertown

, for a new two

year period beginning October 1 , 20 10 , with or without subsidy. (See Appendix A for map.)

Background By Order 2008

- 3

- 15

, March 14 , 200 8 , the Department selected Hyannis Air Service, Inc. d/b/a Cape Air (Cape A ir) to provide EAS at the three communities for the two

- year period through September 3 0 , 20 10 . That order established a total annual subsidy rate of $ 3

, 879

, 863 for s ervice

consist ing of 21 nonstop round trips per week between each community an d Albany County Airport

, with 9

- seat Cessna 402 aircraft

.

Request for Proposals As the end of the current rate term approaches, in order to provide sufficient time to complete the

carrier

- selection process before the current contract expires, we are here requesting proposals from carriers interested in providing service at Massena, Ogdensburg and Watertown , with or without subsidy support, for the two

- year period beginning October 1, 20 10 . Carriers should file their proposals no later than June 30 . After that date , our staff will docket proposals, thereby making them public, and direct each carrier to serve a copy of its proposal on the civic parties and other applicants. Shortly afterwards, we will provide a summary of the proposals to- 2

-

communit y officia ls and ask them to submit their final comments. We will give full consideration to all proposals filed in a timely manner. 1

Interested carriers should prepare their proposals with every expectation that their initial proposals will also be their final an d only proposals. We retain the discretion to negotiate proposals with carriers when we deem it desirable. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and solicit a new round of proposals.

We are here provi ding interested carriers with some basic information to serve as guidance when they prepare their proposals, but we will not prescribe a precise format for their proposals. We expect proposals to adequately describe the service being proposed and the annu al amount of subsidy being requested. The applicants can make their own judgments as to the level of detail they wish to present; however, they might want to include proposed schedules as well as supporting data for their subsidy requests, such as project ed block hours, revenues and expenses. We strongly encourage clear, well

- documented proposals that will facilitate their evaluation by the affected community and the Department. 2

Proposals should provide sufficient capacity to accommodate historical leve ls of traffic. In order to assist carriers in developing traffic and revenue projections for their proposals, we have summarized historical passengers in Appendix B. Specifically for these three communities

, we expect proposals that are consistent with w hat the communities currently receive (three daily round trips with nine

- seat aircraft)

. We note that EAS at the communities calls for service with

15

- seat aircraft. However, during the current two

- year contract, the communities approved the

service with nine

- seat aircraft

. For carriers proposing 15

- seat or larger aircraft, we expect proposals for two round trips a day (12 per week). If the proposed service contemplates serving two communities on the same flight s with 15

- seat aircraft, then proposals sh ould reflect three round trips a day (18 per week). Service should be to Albany, Boston, New York or any hub that offers access to the national air transportation system. Carriers are also welcome to propose more than one option, if they choose; they nee d not limit themselves to those requirements if they envision other, potentially more attractive service possibilities

-- different hubs, for example

-- with subsidy requirements that remain competitive. 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 ies and meets the operational needs of the airline interested in submitting a proposal.

1 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide essential air service without subsidy and we determine that service can be reliably provided without such compensation, we do not proceed with t he carrier

- selection case. Instead, we simply rely on that carrier’s subsidy

free service as proposed.

2 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 Consolidated 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. Interested carriers should also be aware that our general provision s 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

-

New Filing Procedures Carrier proposals should be su bmitted 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 responsibl e for implementing various Federal statutes governing lobbying activities, drug

- free workplaces and nondiscrimination. 3 Consequently, all carriers receiving Federal subsidy to support essential air service must certify that they are in compliance with Dep artment regulations regarding drug

- free workplaces and nondiscrimination, and 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. A ll carriers that plan to submit proposals involving subsidy should submit the 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 Department 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 propo sals 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 June 30 , the due date for carrier proposals.

This order is issued under authority delegated in 4 9 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 Massena, Ogdensburg,

and W atertown, New York

, submit their proposals, with or without subsidy requests, no later

than June 30 , 20 10 . The proposals should be emailed to: EAS@dot.gov with the title “Proposal

to Provide Essential Air Service at Massena, Ogdensburg and Watertown, New York,

Docket DOT

- OST

- 1 997

- 2842 ” ; 5

2. Docket DOT

- OST

- 1997

- 2842 will remain open until further order of the Department; and

3 The regulations applicable to these areas are: (1) 49 CFR Part 20

– N ew 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 Act 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 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.

5 Questions regarding filings in response to this order should be directed to Renée William s at 202

- 366

- 1058, or via

email at renee.williams@dot.gov . Parties may call 202

- 366

- 5903 to confirm receipt of their EAS proposals.- 4

-

3. The Department will serve a copy of this order on the mayors and airport managers of Massena, Ogdensburg, and Watertown, Hyannis Air Service, Inc. d/ b/a Cape Air

, 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 s ervice 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 av ailable on line at www.regulations.gov

### Appendix A



## Area Map

### Appendix B

Historical O&D Traffic and Average Daily Enplanements 1

Massena, NY



### Average Daily

O&D Traffic Enplanements 2



### 2007 3,420 1.5

2008 1,79 3 2.9

2009 6,402 10.2

Ogdensburg, NY



### Average Daily

O&D Traffic Enplanements 2



### 2007 4,784 7.6

2008 1,166 1.9

2009 3,976 6.4

Watertown, NY



### Average Daily

O&D Traffic Enplanements 2



### 2007 18,232 29.1

2008 1,217 1.9

2009 4,832 7.7

________________________________ 1 Source: Bureau of Transportation Statistics; TranStats Form 41 , Schedule T

- 1 00

. 2 Daily averages are based on one

- half of the O&D passengers

, divided by 3 13 service days (314 during leap years).

NOTE: Due to Big Sky’s shu tdown, the communities were without service for most of 2008.

### Appendix C

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

destinati on 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 carrie r 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 durin g 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 i n 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, 2010. The Government's obligation fo r performance under this order beyond September 30, 2010, is contingent 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 und er 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 carrier will receive notice in writing by the Department.

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

under this order.

### App endix D

Scheduled Air Carriers, Contiguous US and Puerto Rico

Air Greco/Wings Air Air Sunshine, Inc. Air Sunshine, Mirmohammad Adili Air Wisconsin, Annette D aly 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 Av iation, 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

Co ntinental, 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 Avi ation, 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 Hac kett 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 Al aska, 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. Barto n 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