Order: 2011

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Served: November 18, 2011



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 18 th day of November, 20 1 1

Essential Air Service at

CODY, WYOMING DOCKET DOT

- OST

- 2011

- 0121

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



### ORDER SELECTING CARRIER

Summary By this order, the Department is selecting SkyWest Airlines, operating as Delta Connection ( Delta Connection )

, to provide essential air service (EAS) at Cody, Wyoming , from

October 4, 2011, through May 31, 2012, and from October 4, 2012, through May 31, 2013.

Delta Connection’s service will be to Salt La ke City International Airport (Salt Lake City) using 50

- seat Canadair Regional Jet 200 aircraft for an annual subsidy of $ 352,058

. 1

Background Cody is an EAS community by virtue of its being listed on a certificated airline’s

certificate on October 24, 1978, the date of enactment of the Airline Deregulation Act.

Currently, Delta Connection operates two daily nonstop round trips (14 a week) to Salt Lake City on 30

- seat Brasilia EMB

- 120 aircraft. In addition, SkyWest also operates

service to Denver as United Express (United Express) providing two daily round trips

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropr iated

funds.- 2

-

during the four

- month peak season and one daily round trip the other eight months of the year, all on 50

- seat Canadair regional jet aircraft

.

On June 27, 2011, SkyWest filed a 90

- day notice of its intent to terminate service as Delta Connection to Salt Lake City, effective September 25 . In response to Delta Connection’s filing, we issu ed Order 2011

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, August 30

, 2011, requesting proposals from carriers interested in providin g EAS at the community

. Because United Express operates two daily round trips to Denver four months of the ye ar and one daily round trip to Denver the other eight months, we requested proposals for only one round trip a day for eight months of the

year. In response to that order, we received a prop osal from the incumbent, SkyWest

.

The carrier’s complete proposal and community comments may be accessed online at http://www.regulations.gov/ by entering Docket number DOT

- OST

- 2011

- 0121 in the

search block

.

Proposal of SkyWest SkyWest proposed one daily round trip (7 a week) operating as Delta Connection to Salt Lake City from October 4, 2011, through May 31, 2011, and from October 4, 2012, through May 31, usi ng 50

- seat Canadair Regional Jet 200 aircraft for an annual subsidy of $352,058

.

Community Comments

On September 1 4

, 2011, we requested community comments regard ing this carrier

selection case. In response, we received a letter from Cody Yellowstone Air Im provement

Resources

, an organization of leading community officials including Mayor Nancy Tia Brown and Yellowstone Regional Airport Manager Bob Hooper that is committed to enhancing Cody’s air service

. Speaking on behalf of the community, Cody Yellowstone Air Improvement Resources expressed support for Delta Connection’s proposal and

s trongly encouraged its selection . The organization stated that Cody has enjoyed a long relationship with SkyWest and Delta and that the Salt Lake City hub is an important medical and educational destination for Cody’s residents.

Decision The decision is straightforwa rd and clearly points to the selecti on of Delta Connection to provide EAS in the off peak season. The community fully supports Delta Connection’s proposal and the airline has served Cody for several years. In addition, the Salt Lake City hub is a crucial link for the community to the natio nal air transportation system. Finally

, we find that the subsidy proposed is reasonable for the service to be provided.

W e shall make this selection of Delta Connection at Cody contingent upon the Department’s receiving properly executed certifications from the carrier that it is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations concerning lobbying activities.

Carrier Fi tness- 3

-

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

. SkyWest is subj ect to the Department’s continuing fitness requirements, and no

information has come to our attention tha t would cause us to questio n 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 s . We th erefore conclude that the

carrier is reliable and remain s fit to conduct the operations proposed here.

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

ACCORDINGLY,

1. We select SkyWest Airlines, operating as Delta Connection, to provide essential air

service at Cody, Wyoming

, an d establish an annual subsidy rate of $ 352,058

, as described in Appendix C;

2. We direct SkyWest Airlines 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 r ecords 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 . We f i nd that SkyWest Airlines continue s to be fit, willing and able to operate as a certificated carrier

, and capable of providing reliable essential air service at Cody ;

4. This docket will remain open pending further Department action ; and

5 . We will serve copies of thi s order on the Mayor of Cody

, the airport manager of Yellowstone Regional Airport

, Cody Yellowstone Air Improvement Resources, and SkyWest Airlines

.

B y:

SUSAN L. KURLAND Assistant Secretary for

Aviation and International Affairs

(SEAL)- 4

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An electronic version of this document is ava ilable at http://www.regulations.govAppendix A



## AREA MAPAppendix BAppendix C

SkyWest Airlines

Essential Air Service to be Provided at Cody, Wyoming

Effective Period : October 4

, 2011 , through May 31, 2012, and October 4, 2012, through May 31, 2013

Scheduled Service : One daily round trip (7 a week) to Salt Lake City

Aircraft : 50

- seat passenger Canadair Regional Jet 200 (CRJ200) Rate per Eligible Flight: $ 746 1
Weekly Ceiling : $ 10,444 2

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 s cheduled 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 addit ion, 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 paymen t 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 ly , 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 the carrier do not constitute a total or partial reduction or cessation of payment.

Funds are not currently available for performance under this order beyond November 18 , 2011

. The Department’s obligati on for performance under this order beyond November 18 , 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 unde r this order beyond November 18 , 2011 , until funds are made available to the Department for performance. If funds are not made available for perf ormance beyond November 18 , 2011 , 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 pa ragraph.

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

1 Annual compensation of $352,058 divided by 472 annual departures (2 flights a day x 241 days x 98 percent completion).

2 14 arrivals and departures per week multiplied by $746 per flight.