Order: 2013-1-17

Served: January 25, 2013

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 25th day of January, 2013

Docket DOT-OST-2002-13983

ORDER REQUESTING PROPOSALS

Summary

By this Order, the Department is requesting proposals from carriers interested in providing 

Essential Air Service (EAS) at Grand Island, Nebraska, for the contract period beginning July 1, 

2013, with or without subsidy. Proposals are due February 28, 2013. (See Appendix A for an 

area map.) 

Background

By Order 2011-1-25, January 31, 2011, the Department selected American Eagle Airlines

(American Eagle) to provide 13 nonstop round trips per week to Dallas/Fort Worth International 

Airport (DFW) using a mix of 37-, 44-, and 50-seat Embraer regional jet aircraft for a two-year 

period beginning when the carrier inaugurated full EAS, at an annual subsidy amount of

$2,215,582. American Eagle inaugurated service at Grand Island on June 9, 2011, with

13 nonstop round trips per week to DFW. Thus, American Eagle’s contract expires June 30, 

2013.

Request for Proposals

As the end of the current rate term approaches, we are here requesting proposals from carriers 

interested in providing service at Grand Island, with or without subsidy, to be filed no later than 

February 28, 2013. After that date, our staff will docket the proposals, thereby making them public. 

Essential Air Service at

GRAND ISLAND, NEBRASKA

under 49 U.S.C. 41731 et seq.
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Shortly afterwards, we will provide a summary of the proposals to the community and ask them to 

submit their final comments. We will give full consideration to all proposals that are timely filed.1 

Interested carriers should prepare their proposals with every expectation that their initial proposals 

will represent their final and only proposals. However, 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 providing 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 annual 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 projected block hours, revenues and expenses. 

We strongly encourage clear, well-documented proposals that will facilitate their evaluation by 

the affected communities and the Department.2

With respect to Grand Island, we ask that carriers submit proposals for two nonstop round trips 

per day (13 round trips per week) with 34-seat or larger aircraft, to Chicago O’Hare, Dallas/Fort 

Worth, or another suitable hub where numerous connections to the national air transportation 

system can be made. For service with 19-seat aircraft, we would support proposals for three or 

four round trips a day (18 or 24 a week).

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 community and meets the operational 

needs of the airline interested in submitting a proposal.

We encourage proposals that meet these requirements in an efficient manner. Carriers are also 

welcome to propose more than one service option, if they choose; they need not limit themselves 

to those requirements if they envision other, potentially more attractive service possibilities --

different hubs or length of service terms, for example -- with subsidy requirements that remain 

competitive.

 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 typically do not proceed with the 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 provisions 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. 
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Carrier proposals should be submitted to the Department with all materials merged into a single 

document. The document will be published on Regulations.gov and each page should be 

formatted to be viewed online. 

Service and Traffic History

For the 12-month period ended September 30, 2012, the most recent period for which traffic data are 

available, Grand Island averaged. 74.6 enplanements per day.3 Since American Eagle inaugurated 

service at the Central Nebraska Regional Airport, which serves the Grand Island area, passenger 

traffic has increased substantially, from approximately 18 enplanements per day to almost 75 per 

day. In order to assist carriers in making their traffic and revenue forecasts, we have included 

historical traffic data in Appendix B.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces, and nondiscrimination.4 Consequently, all carriers receiving 

Federal subsidy for essential air service must certify that they are in compliance with Department 

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. Because the Department is 

prohibited from paying subsidy to carriers that do not submit these documents, all carriers that 

plan to submit proposals involving subsidy should be aware that the selected carrier will be 

required to complete the required certifications. Interested carriers requiring more detailed 

information regarding these requirements should contact the Office of Aviation Analysis at 

(202) 366-5903.5

Community and State Comments

The community and state are welcome to submit comments on the proposals at any time. As 

noted earlier, however, we will provide a summary of the proposals to the civic parties and ask 

them to submit their final comments shortly after February 28, 2013, the due date for proposals.

This order is issued under authority delegated in 49 CFR Part 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 Grand Island, 

Nebraska, beginning July 1, 2013, submit their proposals, with or without requests for subsidy, 

 3 See Appendix B for historical traffic data. Enplanements represent one-half of total origin-and-destination traffic, 

and average enplanements per day are based on 77 weekdays and weekends each quarter, except as noted.

4 The regulations applicable to these areas are: (1) 49 CFR Part 20 – New 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 (nonprocurement) and government-wide requirements for drug-free workplace (grants).

5 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.
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no later than February 28, 2013. The proposals should be e-mailed to EAS@dot.gov, with the 

title: “Proposal to Provide EAS at Grand Island, Nebraska;6

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

3. We will serve copies of this Order on the Mayor of Grand Island, the director of Central 

Nebraska Regional Airport, and the service list for this docket.

Persons entitled to petition the Department for review of this order under the Department’s 

Aviation Economic Regulations, 14 CFR Part 385.50, must file such petitions within ten (10) 

days after the date of service 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 available at http://www.regulations.gov

 6 Questions regarding filings in response to this order may be directed via electronic mail to Kevin Schlemmer at 

kevin.schlemmer@dot.gov or via phone at (202) 366-3176.
Appendix A

AREA MAP

This map is provided by Sabre® AirVisionTM Profit Essentials and is being used with express permission of the 

copyright holder, Sabre Airline Solutions®.
 Appendix B

 

Traffic History7

Grand Island, NE (GRI)

Year Quarter Carrier Inbound pax Outbound pax Total

2009 4 Great Lakes Airlines 916 913 1,829

2010 1 Great Lakes Airlines 1,500 1,415 2,915

2010 2 Great Lakes Airlines 1,655 1,599 3,254

2010 3 Great Lakes Airlines 1,833 1,742 3,575

11,573

2010 4 Great Lakes Airlines 1,652 1,654 3,306

2011 1 Great Lakes Airlines 1,856 1,765 3,621

2011 2 Great Lakes Airlines 1,552 1,547 3,099

2011 2 American Eagle Airlines Inc. 1,092 1,089 2,181

2011 3 American Eagle Airlines Inc. 5,470 5,567 11,037

23,244

2011 4 American Eagle Airlines Inc. 5,963 5,928 11,891

2012 1 American Eagle Airlines Inc. 5,977 5,942 11,919

2012 2 American Eagle Airlines Inc. 5,808 5,726 11,534

2012 3 American Eagle Airlines Inc. 5,704 5,642 11,346

46,690

Average daily enplanements at Grand Island (12-months ending 9/30/2012) – 74.68

 

7 Source – T-100 Market Report, Passengers in Scheduled Passenger Service. Great Lakes Airlines and American 

Eagle Airlines service only.

8 Average daily enplanements= total traffic for the most recent 12-month period (46,690 passengers) divided by 313 

service days divided by 2.
Appendix C

Example of 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 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 [DATE] The

Government’s obligation for performance under this order beyond [DATE] 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 [DATE], until funds are made available to the Department for performance. 

If funds are not made available for performance beyond [DATE], 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