Order 2015-3-9

Served: March 23, 2015

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 March, 2015

Air Service at

DIOMEDE, ALASKA

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

DOCKET DOT-OST-2009-0260

ORDER REQUESTING PROPOSALS

Summary

By this Order, the Department is requesting proposals by April 13, 2015, from carriers

interested in providing helicopter air service to Diomede, Alaska, for the one-year period 

July 1, 2015, through June 30, 2016.1 The service is requested under 49 U.S.C § 41736, 

Air Transportation to Non-eligible Places (ATNEP).2 

Background

By letter dated June 20, 2012, the Alaska Department of Commerce, Community, and 

Economic Development, on behalf of Kawerak, Inc.,3 proposed to the Secretary of 

Transportation that air compensation be provided to an air carrier as part of ATNEP. By 

Order 2012-9-25, the Department selected Evergreen Helicopters, Inc. (Erickson)4 to provide 

ATNEP to Diomede, Alaska, through June 30, 2013.5 Since then, Erickson has been selected 

each year to provide ATNEP at Diomede. 

The latest rate was set at $377,520 from July 1, 2014, through June 30, 2015.6 The level of 

service was set at one round trip per week on a Nome-Diomede-Wales-Diomede-Nome 

routing, utilizing 4-seat, BO-105 twin-engine helicopters. Erickson has also recently used 9-

seat twin-engine helicopters. The subsidized service was only to be provided for 44-weeks, 

 1 A map of the area is provided in Appendix A.

2

A State or local government may propose to the Secretary that compensation be provided to an air carrier 

to provide air transportation to a place not eligible to receive Essential Air Service (aka ATNEP). ATNEP 

provides that the Department will pay its share of the subsidy only so long as a State or local government or 

a person is willing and able to pay 50 percent of the compensation. The subsidized carrier may end, 

suspend, or reduce its service by filing a 30-day notice. 

3 Kawerak is a non-profit tribal consortium authorized to make compacts and provide services on behalf of 

20 tribes in the Bering Strait Region of Alaska. The funding ultimately comes from the State of Alaska, but 

passes through to Kawerak which is the local partner matching the Department’s subsidy payments.

4 Evergreen Helicopters was later acquired by Erickson Air-Crane Incorporated, which renamed the 

operation to Erickson Helicopters, Inc.

5 The State’s fiscal year ends on June 30 each year, thus necessitating annual contracts in order to obtain 

annual designated legislative grants from the State. 6 See Order 2014-7-4, issued July 8, 2014. The amount paid by the Department is not to exceed $188,760.
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during the warmer months of the year when the ocean near Diomede typically does not freeze. 

Historically, for some periods of time during the coldest months of the year, an ice runway 

has formed, allowing fixed-wing aircraft to land at Diomede, making the subsidized 

helicopter service unnecessary. 

Kawerak has again requested funding from the State and at this point it appears that 

continued state funding will be available. As such, the Department is requesting proposals 

for ATNEP at Diomede for a new contract period.

Request for Proposals

As the end of the current contract approaches, we are requesting proposals from carriers

interested in providing ATNEP at Diomede under 49 U.S.C. § 41736(c)(2)7 for the oneyear period beginning July 1, 2015, through June 30, 2016. Carriers should file their 

proposals by April 13, 2015. Staff will then docket the proposals, thereby making them 

public. Shortly afterwards, we will provide a summary of the proposals to the 

stakeholders and ask them to submit their final comments. We will give full 

consideration to all proposals filed in a timely manner. Interested carriers should prepare 

their proposals with every 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 unresponsive, 

unreasonable or unrealistic proposals and, if necessary, solicit a new round of proposals. 

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.8 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 community, State and the 

Department.

As always, we will formally solicit the community’s views on any service options we 

receive before making a 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. 

Carriers are also welcome to propose more than one service option, if they choose; they 

need not limit themselves to the current service pattern if they envision other, potentially 

more attractive service possibilities that remain competitive and remain within the budget 

jointly provided by Kawerak and the Department.

 7 In determining whether to approve a proposal, the Secretary shall consider, among other factors, (A) the 

factors listed in 49 U.S.C. § 41733(c)(1), and (B) the views of the state or local government or person 

agreeing to pay compensation for the transportation.

8 We note that the amount of subsidy available will be limited by the amount of subsidy made available by 

the State to Kawerak. 
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We expect proposals that request no more than $380,9529 annual subsidy -- the same 

level as the current year. Carriers are free to request less subsidy for a given service 

level. As the State has indicated, one round trip per week connecting the community to 

the national transportation system during the ice-free months of the year is the goal, but 

carriers are free to offer more than one-round trip per week or less than that level of 

service. Carriers will only be expected to provide air carrier services during times in 

which there is no alternative transportation to and from Diomede by fixed wing aircraft 

using an ice runway. In years past, an ice runway has formed that has allowed fixed wing 

aircraft to fly into and out of Diomede. However, no ice runway has been formed for the 

last two years. Given that this is a possibility again during the contract period, carriers

are encouraged to address in proposals the best level of service they can provide over the 

course of the year in the event an ice runway does not form or forms for a shorter period 

than in years past. 

Carriers are also encouraged to address in proposals how they can ensure that there will 

not be disruptions in service due to maintenance or aircraft repair. 

Assuming that the Department approves a proposal for air service, we would then intend 

to enter into a contract with a carrier and the applicable non-Federal party or parties (i.e., 

Kawerak, Inc.,) responsible for payment of its 50 percent share to ensure funding for 

ATNEP at Diomede based on 49 U.S.C. § 41736(a)(1)(B), in which the Department will 

only pay the remaining 50 percent of each monthly bill from the carrier after the 

applicable non-Federal party or parties directly pays the carrier the initial 50 percent. The 

Department will continue to pay its 50 percent share as long as the carrier maintains the 

established level of air transportation, Kawerak continues to pay its 50 percent share, and 

the Secretary of Transportation decides that the Department's 50 percent compensation is 

necessary to maintain transportation at Diomede.10

Filing Format

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 

Regulations.gov, each page should be formatted to be viewed online.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces, and nondiscrimination.11 Consequently, all carriers receiving 

Federal subsidy 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, the selected carrier will 

be required to submit them in order to receive subsidy. Interested carriers requiring more 

detailed information regarding these requirements, as well as copies of the certifications, 

 9

Kawerak would provide maximum funding of $190,476 and the Department would provide matching

funds of $190,476 for a total of $380,952. 10 49 U.S.C. § 41736(d). 11

The certifications are available on the web at http://www.dot.gov/policy/aviation-policy/smallcommunity-rural-air-service/essential-air-service. 
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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.12

Additionally, in order to receive federal subsidy, a carrier must hold economic operating 

authority from either the Department or Federal Aviation Administration.

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 April 13, 2015, the due date for Carrier 

proposals.

This Order is issued under authority delegated in 49 CFR 1.25a(b) and re-delegated to the 

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. The Department requests proposals from carriers interested in providing ATNEP at 

Diomede, Alaska. Carriers should submit their proposals by April 13, 2015. Proposals 

should be emailed to EAS@dot.gov, with the title “Proposal to Provide ATNEP at 

Diomede, Docket DOT-OST-2009-0260.” 

2. This Docket will remain open until further Order of the Department; and

3. We will serve this Order on the service list for this Docket.

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

Department’s Aviation Economic Regulations, 14 CFR 385.31(a), must file such 

petitions 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.gov

 12 The certifications are also available on the web at http://www.dot.gov/policy/aviation-policy/smallcommunity-rural-air-service/essential-air-service.
Appendix A

Nonstop Great Circle Miles

Diomede (DIO) to Wales (WAA) 26

Diomede (DIO) to Nome (OME) 134

Nome (OME) to Wales (WAA) 109

Nome (OME) to Bethel (BET) 283

Nome (OME) to Savoonga (SVA) 163

Diomede (DIO) to Savoonga (SVA) 151
Appendix B

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 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. 

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.