Order: 2012-7-11

Served: July 10, 2012

 UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 10th day of July, 2012

ORDER REQUESTING PROPOSALS

Summary

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

providing Essential Air Service (EAS) at Chatham and Funter Bay, Alaska, for a new

contract period, beginning October 1, 2012, with or without subsidy. (See Appendix A for

a map). Carriers should file their proposals no later than August 8, 2012.

Background

By Order 2010-5-11, May 11, 2010, the Department re-selected Ward Air, Inc. (Ward), to 

provide subsidized EAS at Chatham and Funter Bay, Alaska, through September 30, 

2012. Under that Order, Ward provides one round trip per month between Chatham and 

Juneau; and one round trip per week between Funter Bay and Juneau. All of the service is 

provided on DeHavilland Beaver, Cessna 185, or Cessna 206 aircraft, for a total

combined annual subsidy rate of $19,584.

Request for Proposals

As the end of the current rate term approaches, we are here requesting proposals from 

carriers interested in providing service at Chatham and Funter Bay, Alaska, with or 

without subsidy, for a new contract period beginning October 1, 2012. Carriers should 

file their proposals no later than August 8, 2012. Staff will then docket the proposals, 

thereby making them public, and direct each carrier to serve a copy of its proposal on the 

civic parties and other applicants. Shortly afterwards, we will provide a summary of the 

proposals to the communities and ask them to submit their final comments. We will give 

full consideration to all proposals that are timely filed.1

 1 Carriers should not expect the Department to accept late fillings. 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.

Essential Air Service at

CHATHAM, ALASKA

FUNTER BAY, ALASKA

Under 49 U.S.C. §41731 et seq.

DOCKET DOT-OST-1997-3134
2

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 re-solicit a new 

round of proposals. However, negotiation and rejection are 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 their 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 clear, welldocumented proposals that will facilitate their evaluation by the affected communities and

the Department.2

With specific respect to Chatham and Funter Bay, we expect proposals consisting of 

service to Juneau with one round trip per month from Chatham, and one round trip per 

week from Funter Bay, all with small aircraft. We encourage proposals that meet these 

requirements in an efficient manner. Carriers 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 (e.g. different hubs or 

length of contract) with subsidy requirements that remain competitive. We encourage 

carriers to work with the communities as they prepare their proposals in order to craft 

them to best meet the communities’ needs. As always, we will fully consider the 

communities’ views before making a long-term carrier decision.

New Filing Procedures

Carrier proposals should be submitted to the Department with all materials compiled into 

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

http://www.regulations.gov/, each page should be formatted to be viewed online and for 

easy printing.

Service and Traffic History

In order to assist carriers in making their traffic and revenue projections, we have 

included historical traffic data in Appendix B. As is typically the case in Alaska, 

 2 In selecting a carrier to provide subsidized EAS in Alaska, 49 U.S.C. § 41733(c)(1) directs us to consider 

five factors: (1) scheduled service reliability; (2) contractual and marketing arrangements with a larger 

carrier to ensure service beyond the hub; (3) interline arrangements that the applicant has made 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) the experience of the applicant in providing, in Alaska, scheduled air service. 

In addition, the Consolidated and Further Continuing Appropriations Act, 2012, Public Law 112-55, 

provides that when selecting a carrier to provide EAS, the Department may consider the relative subsidy 

requirements of the carriers, thus 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 selected service. Appendix C 

of this Order contains those general provisions.
3

significantly more freight and mail flow from the hub to the EAS communities than from 

the EAS communities to the hub. 

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing 

lobbying activities, drug-free workplaces, and nondiscrimination.3 Consequently, all 

carriers receiving Federal subsidy for EAS 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 subsidy 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 detailed information regarding these requirements should contact 

the Office of Aviation Analysis at (202) 366-5903.4

Community and State Comments

The communities and State are welcome to submit comments at any time. 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 August 1, the due date for proposals.

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

Director, Office of Aviation Analysis.

 3 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 (non-procurement) and governmentwide requirements for drug-free workplace (grants).

4 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.
4

ACCORDINGLY,

1. We request that carriers interested in providing EAS at Chatham and Funter Bay, 

Alaska, submit their proposals, with or without subsidy requests, no later than August 8, 

2012. The proposals should be e-mailed to: EAS@dot.gov with the title “Proposal to 

Provide Essential Air Service at Chatham and Funter Bay, Alaska, Docket DOT-OST1997-3134”;5

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

3. We will serve copies of this Order on the parties listed in Appendix D.

Persons entitled to petition the Department for review of this Order under the 

Department’s Regulations, 14 CFR 385.30, must file such petitions within ten (10) 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.regualtions.gov

 5 Questions regarding filings in response to this Order may be directed to A.J. Muldoon at (202) 366-1058 

or albert.muldoon@dot.gov. 
APPENDIX A

Great Circle Miles

Chatham to Juneau 60

Funter Bay to Juneau 14

Chatham to Funter Bay 51
APPENDIX B

Historical Traffic at Chatham and Funter Bay, Alaska6

Chatham

Origin Destination Total

Passengers Freight (lbs.) Mail (lbs.) Passengers Freight (lbs.) Mail (lbs.) Passengers Freight (lbs.) Mail (lbs.)

2008 1Q 0 0 3 0 0 51 0 0 54

2Q 1 0 37 4 0 35 5 0 72

3Q 4 0 26 5 0 54 9 0 80

4Q 3 0 44 0 414 100 3 414 144

2008 Total 8 0 110 9 414 240 17 414 350

2009 1Q 0 0 56 0 647 106 0 647 162

2Q 1 0 78 3 0 126 4 0 204

3Q 1 0 54 3 0 170 4 0 224

4Q 1 0 117 1 0 147 2 0 264

2009 Total 3 0 305 7 647 549 10 647 854

2010 1Q 0 0 18 0 456 8 0 456 26

2Q 3 0 27 2 0 58 5 0 85

3Q 4 0 23 2 0 41 6 0 64

4Q 1 0 15 1 65 20 2 65 35

2010 Total 8 0 83 5 521 127 13 521 210

2011 1Q 0 0 31 0 705 57 0 705 88

2Q 4 0 30 2 0 27 6 0 57

3Q 3 0 30 1 0 45 4 0 75

4Q 1 0 17 2 135 55 3 135 72

2011 Total 8 0 108 5 840 184 13 840 292

 6 Source: Bureau of Transportation Statistics; Form 41, Schedule T-100. 
APPENDIX B

Historical Traffic at Chatham and Funter Bay, Alaska

Funter Bay

Origin Destination Total

Passengers Freight (lbs.) Mail (lbs.) Passengers Freight (lbs.) Mail (lbs.) Passengers Freight (lbs.) Mail (lbs.)

2008 1Q 1 0 205 7 0 568 8 0 773

2Q 2 94 215 10 0 413 12 94 628

3Q 9 0 157 16 0 270 25 0 427

4Q 4 0 159 13 0 295 17 0 454

2008 Total 16 94 736 46 0 1,546 62 94 2,282

2009 1Q 0 0 162 5 0 324 5 0 486

2Q 9 0 117 12 0 161 21 0 278

3Q 3 0 233 9 180 287 12 180 520

4Q 0 0 306 14 0 309 14 0 615

2009 Total 12 0 818 40 180 1,081 52 180 1,899

2010 1Q 6 0 146 1 0 286 7 0 432

2Q 3 0 90 13 0 250 16 0 340

3Q 0 0 111 7 0 181 7 0 292

4Q 2 0 123 9 0 183 11 0 306

2010 Total 11 0 470 30 0 900 41 0 1,370

2011 1Q 3 0 86 2 0 152 5 0 238

2Q 2 0 95 4 0 177 6 0 272

3Q 8 0 93 9 0 143 17 0 236

4Q 2 0 115 5 0 182 7 0 297

2011 Total 15 0 389 20 0 654 35 0 1,043
APPENDIX 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 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 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 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.

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 

Department’s obligation for performance under this Order beyond [DATE], 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 

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 

Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of service 

provided under this Order.
APPENDIX D

Service List

40-Mile Air, Leif Wilson

40-Mile Air, Vanessa Thompson

Aero Twin, AACA, Tony Cestnik

Air Excursions, Marion Broughton

Air Excursions, Mike Loverink

Alaska Air Carriers Association, Joy 

Journeay

Alaska Airlines, Jeff Munro

Alaska Airlines, Joe Sprague

Alaska Airlines, Sandy Sinick

Alaska Airlines, Torque Zubeck

Alaska Central Express, John Seamon

Alaska Central Express, Mike Bergt

Alaska Central Express, Steve Deaton

Alaska Central Express, Steve Endlich

Alaska DOT, Linda Bustamante

Alaska DOT, Rebecca Cronkhite

Alaska DOT, Steven D. Hatter

Alaska DOT-Medicaid Passenger Fares

Alaska Seaplane, Kent Craford

Alsek Air, Les and Debra Hartley

Arctic Circle, Donald Singsaas

Arctic Transportation Services (ATS), 

Wilfred Ryan

Arctic Transportation Services, (ATS), Jim 

Hjelm

Bering Air, David Olsen

Bering Air, Jim Rowe

Congressional, Begich, James Feldman

Congressional, Begich, Schawna Thomas

Congressional, Murkowski, Jeremy Price 

Congressional, Murkowski, Karen McCarthy

Congressional, Murkowski, Warren Wright

Consultant, Hank Myers

Consultant, Ken Acton

Consultant, Norm Israelson

Copper Valley Air, Dave Parmenter

Copper Valley Air, Todd Hand

Dorato Jets, Mark McKenna

DOT, Richard Sewell

ERA Aviation, Lori Goodman

Era Aviation, Walter Dallis

Frontier Flying, Paul Hendrickson

Frontier/ERA/Hageland, Bob Hajducovich

Grant Aviation, Bruce McGlasson

Hageland, Mike Hageland

Hageland, Patrick Thurston

Harris Air, Fly Hackett

Harris Air, Scott Harris

Homeland Security, David Bernier

Homeland Security, Michael Duffy

Homeland Security, Ragan, William

Homer Air, Andy Smircich

Iliamna Air, Tim LaPorte

Inland Aviation, Stephen Hill

Island Air, Bob Stanford

Island Air, Jennifer Stanford

Katmai Air, Sonny Peterson

LAB Flying Service, Eric Bennett

Larrys Flying, Jean Chenaille

Northern Air Cargo, Dave Squier

Northern Air Cargo, David Karp

Northern Air Cargo, Eric Van Andel

Pacific Airways, Steve Montanus

PenAir, Danny Seybert

PenAir, Kim Kawaguchi

PenAir, Patrick Rizzi

PenAir, Scott Bloomquist

ProMech, Mark Sessoms

Seaport, EAS Mailbox

Seaport, Rob McKinney

Servant Air, Terry Cratty

Servant Air, Wes Osowski

Smokey Bay Air, Claire McCann

Spernak Airways, Mike Spernak

Tanana Air Service, Brian Martin

Taquan Air Service, Brien Salazaar

Taquan, Beckie Allen

Tatonduk, Controller, Tina Paylor

Tatonduk, Robert Everts

Tatonduk, Robert Ragar

USDOT, Dennis DeVany

USDOT, Jennifer Thibodeau

USDOT, Kevin Schlemmer

USDOT, Richard Leonard

USPS, Greg Garcia

USPS, Joseph Anzalone

USPS, Joy Doby

USPS, Kevin Hartner

USPS, Leonard Kilburn

USPS, Mary Taylor

Ward Air, Ed Kiesel

Ward Air, Tom Williams

Wings Airline Services, Bob Jacobsen

Wings Airline Services, Holly Johnson 

Wright Air Service, Bob Bursiel

Yute, Tim Vottis