Order: 2013-8-13

 Served: August 23, 2013

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 23rd day of August, 2013

Essential Air Service at

EL DORADO/CAMDEN, ARKANSAS

HARRISON, ARKANSAS

HOT SPRINGS, ARKANSAS

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

 Docket DOT-OST-1997-2935

 Docket DOT-OST-1997-2935

 Docket DOT-OST-1997-2935

ORDER RE-SELECTING CARRIER

Summary

By this Order, the Department is re-selecting SeaPort Airlines, Inc. (SeaPort) to provide 

subsidized Essential Air Service (EAS) at El Dorado/Camden (El Dorado), Harrison, and Hot 

Springs, Arkansas, at a combined annual subsidy rate of $5,865,372 ($1,977,153 for El Dorado, 

$2,251,207 for Harrison, and $1,637,012 for Hot Springs) for the four-year period from 

November 1, 2013, through October 31, 2017.1 

Background

By Order 2011-11-21 (November 17, 2011), the Department re-selected SeaPort to provide 

subsidized EAS at El Dorado, Harrison, and Hot Springs, Arkansas, for the two-year period from 

November 1, 2011, through October 31, 2013. Under that Order, SeaPort provides each 

community with 18 weekly round trips to a hub airport using single-engine, nine-passenger 

Pilatus PC-12 aircraft, for a combined annual subsidy of $5,990,780. SeaPort provides El 

Dorado with service to Dallas Love Field (DAL) and Memphis International Airport (MEM), 

Harrison with service to Kansas City International (MCI) and MEM, and Hot Springs with 

service to DAL and MEM.

 1 Subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds.
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In anticipation of the end of SeaPort’s current contract on October 31, 2013, the Department 

issued Order 2013-4-6 (April 12, 2013). In response to that Order, SeaPort, Multi-Aero, Inc. 

d/b/a Air Choice One (Air Choice One), Boutique Air (Boutique), and Osage Airlines, LLC 

(Osage) submitted proposals. The carriers’ proposals are summarized below. The complete 

proposals are available at www.regulations.gov by searching for docket: DOT-OST-1997-2935.

SeaPort

SeaPort, the incumbent carrier, submitted a proposal for El Dorado, Harrison, and Hot Springs, 

utilizing single-engine, nine-passenger Cessna Caravan aircraft. For El Dorado, SeaPort would 

provide 12 weekly nonstop round trips to DAL, and 12 weekly nonstop or one-stop round trips to 

MEM. This service would be provided for an annual subsidy of $1,977,153.

Harrison would receive 12 weekly nonstop round trips to MEM and 6 weekly nonstop round 

trips to MCI, requiring an annual subsidy of $2,251,207.

Finally, Hot Springs would receive nine weekly nonstop round trips to MEM and nine weekly 

one-stop round trips to DAL for an annual subsidy of $1,637,012. 

The proposal is submitted as an inseparable package that would require a combined annual 

subsidy of $5,865,372 for a four-year term.

Air Choice One

Air Choice One proposed three standalone options for Harrison as well one option for combined 

service for El Dorado/Camden and Hot Springs. All service would be operated with 

single-engine, nine-passenger Cessna Caravans. Air Choice One has offered each service option 

for either a two- or four-year term. Air Choice One’s proposed service patterns are summarized 

in the table below:

Harrison

Round trips per 

week

Annual 

Subsidy2 Aircraft

Option 1 10-MEM & 8-STL $2,294,435 Caravan

Option 2 18-STL $2,235,910 Caravan

Option 3 18-MEM $2,092,092 Caravan

El Dorado & Hot Springs

Round trips per 

week

Annual 

Subsidy2 Aircraft

Option 1 18-MEM (from 

each community) $4,138,189 Caravan

 2 Required subsidy for a two-year contract. Subsidy would be slightly discounted if selected for 

four years.
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Boutique

Boutique Air proposed several service options in various combinations. They are summarized in 

the table below. All service would be offered with single-engine, nine passenger Pilatus PC-12 

aircraft and are offered for a two-year term.

Option

Round 

trips per 

week

Routing Annual Subsidy

1

18 DFW-HOT-HRO-MEM $4,082,475

12 ELD-DFW $1,374,155 6 ELD-MEM

2

12 DFW-HOT-HRO-MEM $3,037,784

12 ELD-DFW $1,467,688 6 ELD-MEM

3 12 DFW-ELD-HRO-MEM $3,255,330

4

12 DFW-ELD-HOT-MEM $3,577,516

12 HRO-MEM

6 HRO-DFW $1,460,655

4B

12 DFW-ELD-HOT-MEM $3,577,516

12 HRO-MEM $1,561,921 6 HRO-MCI

5

12 ELD-DFW $2,547,046 6 ELD-MEM

12 HRO-MEM $2,110,913 6 HRO-DFW

5B 18 ELD-DFW $1,980,104

Osage

Osage submitted a proposal with seven service options for various combinations of the 

communities. Osage proposes to operate their service with a single-engine Cessna Stationair 8 

(C-206). Osage states that its proposal is contingent upon the Department’s approval of its 

application for Commuter Air Carrier Authority. To date, the Department has not yet received 

such application from Osage. For this reason, we will not consider its proposal further; however, 

the full document is available at www.regulations.gov. 

Community Comments

On May 20, 2013, we requested community comments regarding the carrier selection at these 

communities.

El Dorado

We received a letter from Frank Hash, Mayor of the City of El Dorado. He states, “[T]he El 

Dorado Airport Commission voted ... to recommend the reselection of SeaPort Airlines, Inc. as 
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the provider of Essential Air Service at our community.” Mayor Hash cites the more than

doubling of enplanements since SeaPort began service at the community. Further, he states that 

the community is concerned about Boutique’s lack of experience in the EAS program.

Additionally, the community did not favor Air Choice One’s proposal as it would not provide 

access to Dallas.

Harrison

The Department received a letter from Jeff Crocket, the Mayor of Harrison, stating that the City 

of Harrison supports the reselection of SeaPort and its request for a four-year contract. Mayor 

Crocket states, “Our recommendation to reselect SeaPort is also based on the airline’s track 

record of providing reliable service, reasonable fares, and friendly and personal service.”

We also received a letter from Bob Reynolds, Chairman of the Boone County Airport

Administrative Board. He states “Based on the review of the proposals ... but equally as much 

on the dependable and affordable service that SeaPort Airlines has provided our community 

since 2009, the Boone County Airport Administrative Board recommends that Seaport Airlines 

be reselected...” 

Hot Springs

The Department received a letter from Ruth Carney, Mayor of Hot Springs. She states that the 

Hot Springs Memorial Airport Committee, the Hot Springs Chamber of Commerce, the Hot 

Springs Advertising & Promotion Commission, and the City of Hot Springs all support the 

reselection of SeaPort as their EAS provider. She says that the City believes SeaPort “will

continue to provide reliable air service to our community based on a proven track record 

experienced during the last forty three (43) months.”

Additional Comments

The Department also received numerous comments from private citizens. These comments were

nearly unanimous in their support of the reselection of SeaPort. Many of the commenters noted 

SeaPort’s reliability, convenience, and customer service as reasons for their support.3

Decision

In narrowing the field of options, we first turned to Osage. Osage stated in its proposal that its 

ability to provide service is contingent upon it’s receiving Commuter Air Carrier Authority from 

the Department. As stated above, we have not received an application for such authority from 

Osage and will therefore not consider its proposal further.

This leaves us with the proposals of Air Choice One, Boutique and SeaPort. All three carriers 

submitted responsive, competitive proposals. In order to distinguish among them, we must look 

to the prescribed statutory selection criteria. When selecting a carrier, 49 U.S.C. § 41733(c)(1) 

directs us to consider five 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; (4) community views, giving substantial weight to the views of the elected officials 

representing the users; and (5) whether the carrier has included a plan to market its services to 

 

3 All public comments received are available in docket: DOT-OST-1997-2935 at www.regulations.gov.
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the community. In addition, The Consolidated and Further Continuing Appropriations Act, 

2012,

4 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.

SeaPort has been providing EAS at these communities since 2009. It has provided reliable 

service with an average completion factor of 92% since it inaugurated service, and over 98% in 

the most recent year-ended period. SeaPort received unanimous support from the civic officials 

in the three communities. We note that SeaPort has done a commendable job in increasing 

enplanements at all three communities since it inaugurated service. 

While Boutique’s subsidy requirements were generally lower than SeaPort’s, it did not receive 

support from any of the communities. Nor does it have any interline agreements or contractual 

or marketing arrangements with a major carrier at the hub. Therefore, we will not select 

Boutique.

Regarding Air Choice One, its proposal did not receive any community support and it would 

require the highest subsidy of all the applicants. Based on these factors, we will not select Air 

Choice One.

For these reasons, we have decided to re-select SeaPort to continue to serve El Dorado, Harrison, 

and Hot Springs. We shall make this selection at El Dorado/Camden, Harrison, and Hot Springs

contingent upon the Department’s receiving properly executed certifications from SeaPort that it 

is in compliance with the Department’s regulations regarding drug-free workplaces and 

nondiscrimination, as well as the regulations concerning lobbying activities.

As noted in the Order Requesting Proposals, the Department is prohibited from subsidizing air 

service at a community where the subsidy per passenger exceeds $200, unless the community is 

more than 210 highway miles from the nearest large or medium hub airport.5 Hot Spring’s 

current subsidy per passenger is $310.6 Rather than terminate Hot Spring’s eligibility at this 

stage, the Department expects Hot Springs and SeaPort to work together to maximize use of the 

service awarded under this Order to avoid exceeding the $200 per passenger cap, which could 

result in the termination of eligibility for subsidy under the EAS program. We appreciate the 

steps SeaPort plans to take, as outlined in its proposal, to continue to stimulate traffic and lower 

costs at Hot Springs in order to decrease the per passenger subsidy. 

 4 Public Law No. 112-55, and continued by the Full-Year Continuing Appropriations Act, 2013, Public Law No. 

113-6.

5 Congress first established the $200 ceiling under P.L. 101-164 for fiscal year 1990, and reestablished it in fiscal 

years 1994-1999. The ceiling was made permanent by P.L. 106-69, the Department of Transportation and Related 

Agencies Appropriations Act of 2000.

6 Subsidy per passenger is calculated by dividing the annual subsidy by the total passengers enplaned and deplaned 

at the airport. Hot Spring’s annual subsidy is $1,474,388. The total number of passengers enplaned and deplaned 

during the last 12 months (January, 2012 – December, 2012) is 4,751, resulting in a per passenger subsidy of $310. 
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Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that we find an air carrier fit, willing, and able to 

provide reliable service before we may subsidize it to provide essential air service. SeaPort is 

subject 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 finding. We therefore conclude that the carrier remains fit to conduct the operations 

proposed here.

This Order is issued under authority delegated in 49 CFR Part 1.25a(b).

ACCORDINGLY,

1. We select SeaPort Airlines, Inc., to provide Essential Air Service at El Dorado/Camden, 

Harrison, and Hot Springs, Arkansas;

2. We set the final rates of compensation for SeaPort Airlines, Inc., for the provision of Essential 

Air Service at El Dorado/Camden, Harrison, and Hot Springs, Arkansas, as described in 

Appendix C;

3. We direct SeaPort 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;

4. We find that SeaPort Airlines, Inc., continues to be fit, willing and able to operate as a 

commuter carrier and capable of providing reliable essential air service at El Dorado/Camden, 

Harrison, and Hot Springs, Arkansas; 

5. This docket will remain open until further Order of the Department; and
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6. We will serve copies of this Order on the Mayors of El Dorado, Camden, Harrison, and Hot 

Springs, and the Airport Managers of South Arkansas Regional Airport at Goodwin Field (El 

Dorado/Camden), Boone County Regional Airport (Harrison), and Hot Springs Memorial Field 

Airport, SeaPort Airlines, Inc., Multi-Aero, Inc. d/b/a Air Choice One, Boutique Air, and Osage 

Airlines, LLC.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is at

http://www.regulations.gov
Appendix A

AREA MAP

This map is provided by Planet Profitability Forecasting System and is being used with express permission of the

copyright holder, Sabre Airline Solutions®.
Appendix B

Page 1 of 3
Appendix B

Page 2 of 3
Appendix B

Page 3 of 3
Appendix C

Page 1 of 3

SeaPort Airlines, Inc.

Essential Air Service to be Provided at El Dorado/Camden, Arkansas

Effective Period: November 1, 2013, through October 31, 2017

Scheduled Service: 12 weekly nonstop round trips to DAL and 12 weekly nonstop or one-stop 

roundtrips to MEM

Aircraft: Cessna Caravan, 9 seats

Rate per Eligible Flight1: $796

Weekly Ceiling2: $38,208

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 complete, 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.

Funds may not be available for performance under this Order beyond September 30, 2013. The Government’s 

obligation for performance under this Order beyond September 30, 2013, 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 September 30, 2013, until funds are made available to the 

Department for performance. If sufficient funds are not made available for performance beyond September 30, 

2013, the Department will provide notice in writing to the carrier.

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.

All claims for payment, including any amended claims, must be submitted within 80 days of the last day of the 

month for which compensation is being claimed. For example, claims for service provided in July must be filed by 

October 31st; August claims must be submitted by November 30th, and so on.

 1 Annual compensation of $1,977,153, divided by 2,484 annual departures (48 weekly arrivals and departures x 52 

weeks x 99.5 percent completion). 2 48 arrivals and departures per week multiplied by $796 per flight.
Appendix C

Page 2 of 3

SeaPort Airlines, Inc.

Essential Air Service to be Provided at Harrison, Arkansas

Effective Period: November 1, 2013, through October 31, 2017

Scheduled Service: 6 weekly nonstop round trips to MCI and 12 weekly nonstop round trips to 

MEM

Aircraft: Cessna Caravan, 9 seats

Rate per Eligible Flight1: $1,208

Weekly Ceiling2: $43,488

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 complete, 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.

Funds may not be available for performance under this Order beyond September 30, 2013. The Government’s 

obligation for performance under this Order beyond September 30, 2013, 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 September 30, 2013, until funds are made available to the 

Department for performance. If sufficient funds are not made available for performance beyond September 30, 

2013, the Department will provide notice in writing to the carrier.

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.

All claims for payment, including any amended claims, must be submitted within 80 days of the last day of the 

month for which compensation is being claimed. For example, claims for service provided in July must be filed by 

October 31st; August claims must be submitted by November 30th, and so on.

 1 Annual compensation of $2,251,207, divided by 1,863 annual departures (36 weekly departures x 52 weeks x 99.5 

percent completion). 2 36 arrivals and departures per week multiplied by $1,208 per flight.
Appendix C

Page 3 of 3

SeaPort Airlines, Inc.

Essential Air Service to be Provided at Hot Springs, Arkansas

Effective Period: November 1, 2013, through October 31, 2017

Scheduled Service: 9 weekly one-stop round trips to DAL and 9 weekly nonstop round trips to 

MEM

Aircraft: Cessna Caravan, 9 seats

Rate per Eligible Flight1: $879

Weekly Ceiling2: $31,644

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 complete, 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.

Funds may not be available for performance under this Order beyond September 30, 2013. The Government’s 

obligation for performance under this Order beyond September 30, 2013, 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 September 30, 2013, until funds are made available to the 

Department for performance. If sufficient funds are not made available for performance beyond September 30, 

2013, the Department will provide notice in writing to the carrier.

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.

All claims for payment, including any amended claims, must be submitted within 80 days of the last day of the 

month for which compensation is being claimed. For example, claims for service provided in July must be filed by 

October 31st; August claims must be submitted by November 30th, and so on.

 1 Annual compensation of $1,637,012, divided by 1,863 annual departures (36 weekly departures x 52 weeks x 99.5 

percent completion). 2 36 arrivals and departures per week multiplied by $879 per flight.