Order 2013

- 2

- 22 Served: February 22, 2013



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

Issued by the Department of Transportation on the 22 nd of February, 2013

Essential Air Service at

TATITLEK , ALAS KA

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 2013

- 0030

ORDER REQUESTING PROPOSALS Summary By this Order , the Department is requesting proposals by March 21, 2013

, from carriers interested in providing Essential Air Service (EAS) at Tatitlek

, Alask a , for a two

- year period

, with or without subsidy.

Background Arctic Circle Air Service, Inc., provided sched uled passenger service to Tatitlek through April of 2008 and terminated its service at that time without filing a 90

- day notice of its intent to suspend that service . The carrier ceased all operations in August of 2010.

By letter dated February 4, 2013, the V il lage of Tatitlek indicated that:

Tatitlek can only be reached by sea on the Alaska State Ferry (seasonally) or by chartered and errat ic air service from Anchorage, Alaska. Our mail service is irregular and arrives on a chartered cargo

- only airplane. Our community does not have reliable mail or freight service or an affordable means to travel to Anchorage for medical, educational, or b usiness purposes.

The mail service is provided by Alaska Central Express under a Direct Air Taxi Contract with the United States Postal Service.

Request for Proposals Order 1980

- 1

- 167, January 25, 1980, issued EAS determinations for the State of Alaska, including Tatitlek. Th at Order required Tatitlek’s level of air service to be no less than one scheduled round trip per week during the peak season and one flag

- stop round trip per week during the off

- peak to Cordova with small aircraft having ten or few er seats and up to two intermediate stops.- 2

-

Because there is no regularly scheduled air service to Tatitlek and it is guaranteed EAS, we will request proposals for EAS. W e are requesting proposals from carriers int erested in providing service at Tatitle k

, with or without subsidy, from the start of their service pursuant to a Department Order for a two

- year period. Carriers should file their proposals by March 21, 2013

. S taff will then docket the proposals, thereby making them public. Shortly afterward s, we will provide a summary of the proposals to the community and S tate and as k 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 ever y expectation that their initial proposals will also be their final and 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 unrealis tic proposals and , if necessary, solicit a new round of proposals. However, we anticipate that negotiation or rejection will remain only occasional exceptions to the rule.

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 th eir 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 cl ear, well

documented proposals that will facilitate their evaluation by the affected community and the Department. We anticipate applying our usual carrier

- selection criteria and the general provisions governing subsidy payments for EAS

. 2

As always, we will formally solicit the community ’ s views on any service options we receive before making a long

- term carrier

- selection decision. The community and air carriers are encouraged to work together in advance of the due date for proposals to craft a service pattern that is both desirable to the community and meets the operational needs of the airlines, as carriers cannot amend their proposal after the due date.

We encourage proposals that meet the community ’ s requirements in an efficient manner. Consisten t with the EAS determination, proposals should propose to provide one scheduled passenger round trip per week. Carriers are also welcome to propose more than one service option, if they choose; they need not limit themselves to a single specific

1 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide EAS 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 subs idy

- free service as proposed.
2 In selecting a carrier to provide subsidized EAS in Alaska , 49 U.S.C. § 4 1733(c) (1) directs us to consider f ive fa ctors: (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; and (5) experienc e of the applicant in providing, in Alaska, scheduled air service or significant non

- scheduled air service. 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 shoul d 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 G of this Order contains those general provisions.- 3

-

service p attern if they envision other, potentially more attractive service possibilities

– different hubs, or longer terms for the contracted service

– with subsidy requir e ments that remain competitive.

Filing Format Carrier proposals should be submitted to the D epartment 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.

Historical Traffic In o rder to assist carriers in making their traffic and revenue projections, we have included historical traffic for the community in Appendi x B for the most recent annual periods.

Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobbying activi ties, drug

- free workplaces

, and nondiscrimination. 3 Consequently, all carriers receiving Federal subsidy to support EAS must certify that they are in compliance with Department regulations regarding drug

- free workplaces and nondiscrimination, and those ca rriers 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, the selected carrier will be required to submit them in o rder to receive subsidy. 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.

Community Comments Civic officials and the State are welcome to submit comments on the proposals 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 March 21 , the due date for carrier proposals.

This Order is issued under authority delegated in 49 CFR Part 1.56a(f) and re

- delegated to the Directo r, Office of Aviation Analysis.

ACCORDINGLY,

1

. The Department requests proposals from carriers interested in providing EAS at Tatitlek

, Alaska . Carriers should submit their proposals, with subsidy if necessary, by March 21, 201 3 . Proposals should be emailed to EAS@dot.gov, with the title “Proposal to Provide EAS at Tatitlek

, Docket DOT

- OST

- 2013

- 0030

. ” Questions regarding filings may be directed to Kevin Adams at 202

- 366

- 1047 or Kevin.Adams@dot.gov ;

2

. Th is D ocket will remain open until further Order of the Department; and

3 The certifications are availa ble on the web at http://ostpxweb.dot.gov/aviation/index.html.- 4

-

3 . We will serve this Order on the s ervice l ist for th is Docket.

Persons entitled to petition the Department for review of this Order under the Department’s Regulations, 14 CFR 385. 31 , must file such petit ions within seven ( 7 ) 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 on the World Wide Web at http://www.regulations.govAppendix A

Nonstop Great Circle Miles to Tati t lek (TEK) Anchorage, ANC 113 Cordova, CDV 49 Chen e ga, NCN 71 Valdez, VDZ 24Appendix B
Historical Traffic at Tatitlek (TEK) Origin, Tatitlek Dest, Tatilek O&D, Tatilek

Year Month Freight Mail Freight Mail Freight Mail 2010 1 0.1 0.8 8.4 11.8 8.5 12.6 2010 2 0.0 0.7 2.1 10.8 2.1 11.5 2010 3 0.0 0.2 1.1 9.1 1.2 9.3 2010 4 0.0 1.1 2.2 11.1 2.2 12.2 2010 5 0.2 0.9 0.8 6.1 1.0 6.9 2010 6 0.2 1.7 1.6 10.1 1.8 11.7 2010 7 0.1 1.0 0.3 7.4 0.4 8.4 2010 8 0.0 0.4 7.1 6.2 7.2 6.6 2010 9 0.0 0.2 6.6 11.8 6.6 12.0 2010 10 0.0 0.2 0.5 12.4 0.5 12.5 2010 11 5.0 0.2 3.3 12.3 8.3 12.6 2010 12 10.1 0.7 1.2 19.1 11.2 19.8 Total 15.8 8.0 35.1 128.2 50.9 136.2

2011 1 0.0 0.6 2.0 6.0 2.0 6.6 2011 2 0.1 0.3 0.1 9.3 0.2 9.6 2011 3 0.0 1.1 0.9 8.0 0.9 9.1 2011 4 0.0 0.3 3.9 8.3 3.9 8.6 2011 5 0.0 0.6 6.8 9.1 6.8 9.7 2011 6 0.0 0.2 4.9 17.7 4.9 17.9 2011 7 0.0 0.4 0.7 11.6 0.7 12.0 2011 8 0.0 1.6 4.0 19.3 4.0 20.9 2011 9 0.2 0.3 3.3 20.7 3.5 21.0 2011 10 0.0 0.6 4.2 13.9 4.2 14.5 2011 11 0.0 0.2 2.0 19.0 2.0 19.2 2011 12 0.0 1.4 8.1 15.9 8.1 17.3 Total 0.3 7.6 40.9 158.9 41.1 166.5

2012 1 0.0 0.5 6.9 16.8 6.9 17.3 2012 2 0.7 0.4 10.7 12.6 11.4 13.0 2012 3 0.0 0.0 4.1 18.8 4.2 18.8 2012 4 0.1 0.1 0.6 10.2 0.8 10.4 2012 5 0.2 1.3 0.6 9.6 0.9 10.9 2012 6 0.0 1.6 0.9 13.6 0.9 15.2 2012 7 0.0 0.9 1.6 9.6 1.6 10.5 2012 8 0.0 4.4 8.0 15.6 8.0 20.0 2012 9 0.0 0.9 1.4 17.1 1.4 18.0 2012 10 0.1 0.9 4.8 16.6 4.8 17.4 2012 11 0.0 1.6 8.4 8.0 8.4 9.6 2012 12 0.0 0.6 1.4 15.2 1.4 15.9 Total 1.2 13.2 49.5 163.7 50.7 176.9

Source: T-100 Market Report Note: All data in passenger equivalents -- 200 pounds of mail or freight is one passenger equivalent (PEQ).
Note: There was a de minimis level of charter, or of scheduled passenger service reported.Appendix C

Example of General Terms and Conditions for Essential Air Service The carrier u nderstands 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 s ubsidy 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 f rom 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 ext ent 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 f or 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 requirem ent 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.

Fun ds are not currently available for performance under this solicitation beyond [DATE]. The Department’s obligation for performance under this solicitation beyond [DATE], is contingent upon the availability of appropriated funds from which payment for servi ces 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 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