Order: 20 1 3

- 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 25 th day of January, 2013

Docket DO T

- OST

- 200 2

- 13 98 3

ORDER REQUESTING PROPOSALS

Summary By this O rder

, the Department is requesting proposals from carriers interested in providing

E ssential A ir S ervice (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 20 11

- 1

- 25 , January 31, 2011 , the Department selected American Eagle Airlines ( American Eagle ) to provide 1 3 nonstop round trips per week to Dallas/Fort Worth International Airport (DFW) using a mix of 37

- , 44

- , and 50

- seat Embraer regional jet ai rcraft for a two

- year period beginning when the carrier inaugurated full EAS, at an annual subsidy amount of $2,2 15, 5 82

. American Eagle inaugurated service at Grand Island on June 9, 2011, wit h

1 3 nonstop round trips per week to D FW. Thus, American Eagle’s contract expires June 30,

2013

.

Request for Proposals

A s 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 file d no later than February 28, 2013

. A fter 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.- 2

-

Shortly afterwards, we will provide a summary of the proposals to the communit y 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 sol icit 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 sc hedules 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, w e ask that carriers submit proposals for t wo nonstop round trips per day (1 3 round trips per week) with 3 4

- seat or larger aircraf t

, 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 c ommunities and air carriers are encouraged to work together in advance of th e due date for proposals to craft a service pattern that is desirable to the community and meets the operational

needs of the airline inter ested in submitting a proposal.

We encourage proposals that meet these requirements in an efficient manner. Carrier s 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 exa mple

-- 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, t hus 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 s elected service. Appendix C of this order contains those general provisions.- 3

-

Carrier proposals s hould be s ubmitted 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 end ed September 30, 2012

, th e most recent period for which traffic data are available, Grand Isla nd averaged. 7 4.6 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 al most 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 su bsidy 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 detai led information regarding these requirements should contact the Office of Aviation Analysis at (202) 366

- 5903. 5

Community and State Comments

The communit y and state are welcome to submit comments on the proposals at any time. As noted earlier, however, w e 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 E ssential A ir S ervice at Grand Island,

Nebraska

, beginning July 1, 201 3

, 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 Transportat ion

– 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 t he 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).

5 The certifications are also available on the web at http://ostp xweb.dot.gov/aviation/index.html.- 4

-

no later than February 28, 2013

. The proposals should be e

- mailed to EAS@dot.gov , with the title: “Proposal to Provide E AS at Grand Island, N ebraska ; 6

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

3 . We will serve co pies o f this O rder 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 O rder 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 ® AirVision TM Profit Essentials and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Appendix B

Traffic History 7

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 )

– 74.6 8

7 So urce

– 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

servic e days divided by 2.A ppendix 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 o rder 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 el igibility 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 Avi ation 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 c omplete 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 exte nt 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 change s 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 r eduction 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 t his order beyond [DATE], until fund s 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 submitt ed within 60 days of the last day of service provided under this order