Order: 2014-9-10 

Served: September 15, 2014 

UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Issued by the Department of Transportation 

on the 15th day of September, 2014 

Essential Air Service at 

PIERRE, SOUTH DAKOTA 

Under 49 U.S. C. § 47131 et seq. 

 DOT-OST-2011-0138

ORDER REQUESTING PROPOSALS 

Summary 

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

Essential Air Service (EAS) at Pierre, South Dakota, with or without subsidy support, beginning 

as soon as possible. Proposals are due October 15, 2014. (See Appendix A for a map.) 

Background

Great Lakes Aviation, Ltd. (“Great Lakes”) has provided EAS at Pierre on a subsidy-free basis 

for a number of years. However, for the last eight months or more, Great Lakes has experienced 

severe operational issues. The carrier cites the current pilot shortage, which in turn was triggered 

by Congressional and regulatory changes to pilot requirements, as the principle reason for its 

deterioration of service. On January 16, 2014, we received a letter from Laurie Gill, the Mayor 

of Pierre, outlining Great Lakes’ service problems and asking that the Department issue a 

Request for Proposals for EAS service on the grounds that Great Lakes’ service was so 

unreliable as to not constitute EAS. At that time, Great Lakes indicated that it was taking steps 

to fix its operational problems,1 and we decided to take a wait-and-see approach. 

On July 9, 2014, we received a second letter from Mayor Gill indicating that not only had the 

service not improved, it had deteriorated further. The Mayor stated that cancellation rates were 

23%, 29% and 24 % for this March, April and May, respectively, and that Great Lakes’ on-time 

performance is below 50 percent. According to the Mayor, enplanements have “plummeted” as 

a result of the poor service. 

The complete public file for EAS at Pierre may be accessed online through the Federal Docket 

Management System at www.regulations.gov, by entering “DOT-OST-2011-0138” in the 

“SEARCH for: Rules, Comments, Adjudications or Supporting Documents:” field. 

 

1 Among other things, Great Lakes stated that it was taking 10 seats out of most of its 19-seat Beech 1900Ds to 

allow it to operate under the FAA’s Part 139 regulations that have different pilot requirements than the Part 121 

regulations. 

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION
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Decision 

In the FAA Modernization and Reform Act of 2012, Pub. L. 112-95 (Feb. 14, 2012), Congress 

amended 49 U.S.C. § 41731(a)(1)(B) to change the definition of “eligible place” for the purpose 

of receiving EAS. Under the amendment, eligible communities are those that (among other 

things), at any time during the period between September 30, 2010, and September 30, 2011, 

inclusive— (i) received essential air service for which compensation was provided to an air 

carrier under this subchapter; or (ii) received a 90-day notice of intent to terminate essential air 

service and the Secretary required the air carrier to continue to provide such service to the 

community. 

On July 16, 2011, Mesaba Aviation, Inc. (Mesaba) and Pinnacle Airlines d/b/a Delta Connection 

(Pinnacle) filed notice to terminate service at Pierre, along with 23 other EAS communities (24 

total). The Secretary required those carriers to continue to provide EAS to 23 communities by 

Order dated September 23, 2011 (DOT Order 2011-9-5) and, separately, to Pierre by 

Order 2011-11-4, dated November 2, 2011. Under Order 2011-11-4 (and two subsequent Orders 

that extended their service obligation, Orders 2011-12-25 and 2012-1-7), the Department 

required Mesaba and Pinnacle to continue to provide EAS to Pierre through February 1, 2012. 

Given the dates outlined above, the fact that Pierre was receiving unsubsidized service at the 

time Mesaba and Pinnacle terminated service to Pierre, and because the Secretary did not require 

Mesaba and Pinnacle to continue to provide Pierre with EAS until after September 30, 2011, the 

statute, on its face, terminates Pierre’s eligibility for EAS. However, taking into consideration 

the particular facts involved here, the similar circumstances experienced by Pierre and the other 

23 communities affected by Mesaba and Pinnacle’s termination, and the fact that Pierre is an 

eligible EAS community in all other respects, we find that it is in the public interest to exempt 

Pierre from the requirement at 49 U.S.C. § 41731(a)(1)(B) and maintain its status as an “eligible 

place” under the EAS program. 49 U.S.C. § 40109(c); 49 CFR 1.25a(b)(4)(i). Pierre’s 

continued eligibility for EAS is in the public interest because it supports the goal of maintaining 

a complete and convenient system of continuous scheduled air transportation for small 

communities and isolated areas.” 49 U.S.C. § 40101(a)(11). 

As regards Mayor Gill’s request for a resolicitation, when a carrier provides subsidy-free EAS 

service and we determine that service can be provided reliably without subsidy, we typically do 

not conduct a carrier-selection proceeding. However, due to the community’s concerns about 

Great Lakes’ EAS service, the disruptions in Pierre’s service described by the Mayor in her 

letters to the Department, and the severe operational issues confronted by Great Lakes over the 

past several months, we will request proposals for EAS service for Pierre. 

Request for Proposals

We are requesting proposals from air carriers interested in providing EAS at Pierre, with or 

without subsidy support, for a two-year period.2 Air carriers should file their proposals no later 

than October 15, 2014. After that date, our staff will docket the proposals, thereby making them 

public. Additionally, we request each air carrier serve a copy of its proposal on the civic parties 

at Pierre and on the other applicants. Shortly afterwards, we will provide a summary of the 

 

2 Under 49 U.S.C. § 41734(a), Great Lakes may not end, suspend, or reduce air transportation to Pierre without first 

providing at least 90 days’ advanced notice to the Department, the State of South Dakota, and the City of Pierre. 
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proposals to the community and ask them to submit any formal comments on this carrierselection case. We will give full consideration to all proposals that are timely filed.3 

We are providing interested air 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. Air carrier proposals should be submitted to the Department with all materials 

merged into a single document. In addition, because the document will be published on 

www.regulations.gov, each page should be formatted to be viewed online. 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, we recommend they include information concerning proposed 

schedules and projected block hours. In addition, applicants are encouraged to provide 

financial data supporting their subsidy requests, including information on their projected 

expenses and revenues. We strongly encourage clear, well-documented proposals that will 

facilitate their evaluation by the affected communities and the Department.4

Proposals should provide sufficient capacity to accommodate historical levels. Specifically, 

we request proposals to a major hub airport such as Denver or Minneapolis/St. Paul that will 

provide good access to the national air transportation system. Regarding capacity and 

frequency levels, for proposals with 34-seat or larger aircraft, we expect 12 round trips a 

week; for service with 30-seat aircraft, we expect 18 round trips a week; and if 19-seat aircraft 

are proposed, we expect 24 round trips per week. Alternatively, we will accept proposals 

consisting of additional frequencies if smaller aircraft (9-passenger) are contemplated. We 

encourage proposals that meet these guidelines in an efficient manner. Air carriers are also 

welcome to propose more than one service option, if they choose. They also need not limit 

themselves to these requirements if they envision other, potentially more attractive service 

possibilities -- different hubs or length of contract, for example -- with subsidy requirements 

that remain competitive. 

In order to assist air carriers in developing traffic and revenue projections for their proposals, we 

have summarized historical passenger levels at Pierre in Appendix B. In the most recent 12-

month period for which data are available (July 1, 2013, through June 30, 2014), Pierre 

generated a total of 23,461 total origin and destination passengers, or an average of 37.5 

 

3 Air 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 subsidy-free service 

as proposed. 

4 In selecting a carrier to provide subsidized EAS for an eligible place not in Alaska, 49 U.S.C. § 41733(c)(1) 

directs us to consider five factors: (a) service reliability; (b) contractual and marketing arrangements with a larger 

carrier at the hub; (c) interline arrangements with a larger carrier at the hub; (d) community views, giving substantial 

weight to the views of the elected officials representing the users; and (e) whether the carrier has included a plan in 

its proposal to market its service to the community. In addition, the Consolidated and Further Continuing 

Appropriations Act, 2012, Public Law No. 112-55, and continued by the Full-Year Continuing Appropriations Act, 

2013, Public Law No. 113-6, and the Continuing Appropriations Act, 2014, Public Law No. 113-46, 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. 
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enplanements per day.5 We note that this represents a marked decrease for the first and second 

quarter of 2014, compared to previous years, as can be readily seen in Appendix B. 

Interested air carriers should prepare their proposal with every expectation that their initial 

proposal will also be their final and only proposal. We retain the discretion to negotiate 

proposals with air carriers when we deem it desirable; in such cases we will give all 

applicants the same opportunity. We also retain the discretion to reject outright all 

unreasonable or unrealistic proposals and solicit a new round of proposals. 

Other Air Carrier Requirements 

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces and nondiscrimination. Consequently, all air 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 air 

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. All air carriers that 

plan to submit proposals involving subsidy should submit the required certifications along 

with their proposals. Interested air 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 

air carriers that do not submit these documents.6

Community Comments

Civic officials and the State are welcome to submit comments at any time. We encourage 

prospective applicants to contact the community before they submit their proposals so that 

they can tailor them to the community’s needs, as they will not be able to amend them after 

the due date. As noted earlier, we will provide a copy of the proposals to the civic parties and 

ask them to submit their final comments shortly after October 15, 2014, the due date for air 

carrier proposals. 

ACCORDINGLY,

1. We request that air carriers interested in providing Essential Air Service at Pierre, South 

Dakota, submit their proposals, with or without subsidy requests, no later than 

October 15, 2014. The proposals should be emailed to: EAS@dot.gov with the title “Proposal 

to Provide Essential Air Service at Pierre, South Dakota, Docket DOT-OST-2011-0138;”7

 

5 In calculating enplanements per day, we take total annual origin and destination passenger numbers and divide by 

two to get passengers in one direction (enplanements at the EAS community), and then by 313 days to get average 

daily enplanements at the EAS community. 

6 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). The certifications are available 

on the web at http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/essential-air-service. 

7 Questions regarding filings in response to this Order should be directed to Michael Gormas at 

michael.gormas@dot.gov or (202) 366-1853. 
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2. Great Lakes Aviation, Ltd. has seven days to provide a substantive response to the City’s 

concerns described in the Mayor’s letters to the Department (in the Docket DOT-OST-2011-

0138). 

3. Docket DOT-OST-2011-0138 will remain open until further Order of the Department; and 

4. The Department will serve copies of this Order on the civic officials of Pierre, South 

Dakota, Great Lakes Aviation, Ltd., and the service list for this docket. 

By: 

SUSAN L. KURLAND

Assistant Secretary for Aviation 

and International Affairs 

An electronic version of this document is available

online at www.regulations.gov.
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 

Pierre, South Dakota (PIR)1

Historical traffic 

Year Quarter Uniquecarriername Enplanements Deplanements Totals

2011 3 Mesaba Airlines 2,983 2,863 5,846

2011 3 Great Lakes Airlines 1,067 1,072 2,139

2011 4 Mesaba Airlines 2,598 2,434 5,032

2011 4 Great Lakes Airlines 1,479 1,539 3,018

2012 1 Endeavor Air Inc. 265 148 413

2012 1 Great Lakes Airlines 1,938 2,003 3,941

2012 2 Great Lakes Airlines 2,492 2,443 4,935

25,324

2012 3 Great Lakes Airlines 2,949 2,865 5,814

2012 4 Great Lakes Airlines 3,806 3,683 7,489

2013 1 Great Lakes Airlines 3,013 2,945 5,958

2013 2 Great Lakes Airlines 3,381 3,517 6,898

26,159

2013 3 Great Lakes Airlines 3,643 3,606 7,249

2013 4 Great Lakes Airlines 3,989 3,828 7,817

2014 1 Great Lakes Airlines 2,029 2,000 4,029

2014 2 Great Lakes Airlines 2,164 2,202 4,366

23,461

 

1 Source: Bureau of Transportation Statistics; Schedule T-100 
Appendix C 

Example of General Terms and Conditions for Essential Air Service 

The air 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 air 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 air 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 air 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 air carrier to provide service on these routes. The air 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 air 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 air 

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 may not be 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 sufficient funds 

are not made available for performance beyond [DATE], the Department will provide notice in 

writing to the carrier. 

All claims for payment, including any amended claims, must be submitted within 90 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.