Order 2012-11-34

Served: November 30, 2012

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 30th of November, 2012

ORDER RE-SELECTING CARRIER

AND ESTABLISHING SUBSIDY RATES

Summary

By this Order, the Department is re-selecting Copper Valley Air Service (Copper Valley), to 

provide subsidized Essential Air Service (EAS) at Gulkana, May Creek, and McCarthy, Alaska,

for the two-year period beginning February 1, 2013, at the annual subsidy rates of $269,189 for 

Gulkana, and $206,198 for both May Creek and McCarthy.

1 (See Appendix A for a map of the 

service area.)

Background

By Order 2010-12-8 (December 6, 2010), the Department selected Copper Valley to continue 

providing EAS at Gulkana, May Creek, and McCarthy, Alaska, for the two-year period ending 

January 31, 2013, for a combined annual subsidy rate of $438,912. Gulkana currently receives 

two nonstop round trips per week to Anchorage with six-seat Piper PA-31 aircraft; May Creek 

and McCarthy each receive two nonstop or one-stop round trips per week to Gulkana using 

three-seat Cessna 185 aircraft during winter months and four-seat Cessna 206 aircraft during 

summer months.

 

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.

Essential Air Service at

GULKANA, ALASKA

MAY CREEK, ALASKA

MCCARTHY, ALASKA

Under 49 U.S.C. § 41731 et seq.

DOCKET OST-1995-492
-2-

With the end of the contract approaching, the Department issued Order 2012-7-28 (July 25, 

2012), requesting proposals from carriers interested in providing EAS at the communities, with 

or without subsidy, for a new contract period beginning February 1, 2013. In response, only the 

incumbent carrier submitted a proposal.

Carrier Proposal

Copper Valley proposed one service option to continue providing its historical service levels at 

the communities. At Gulkana, it would use six-seat twin engine Piper PA-31 aircraft and 

operate two nonstop round trips each week year-round to Anchorage for an annual subsidy of 

$269,189.

2 At May Creek and McCarthy, Copper Valley proposed to provide two nonstop or 

one-stop round trips per week to Gulkana using three-seat Cessna 185 aircraft during winter 

months and four-seat Cessna 206 aircraft during summer months for an annual subsidy of 

$206,198.

3

Community Comments

On August 30, 2012, we requested community comments regarding the carrier-selection

decision at the three communities. In response, we received a letter from the State of Alaska, 

Department of Transportation and Public Facilities. The State expressed its strong support for 

the continuation of EAS at these communities, citing the communities’ dependence on reliable 

air service for basic necessities, mail service and access to medical care.

Decision

The carrier-selection decision is straightforward. Copper Valley is the only applicant and they

meet all of the required selection criteria. We find the service and subsidy levels proposed by

Copper Valley to be reasonable. We shall make this selection contingent upon the 

Department’s receiving properly executed certifications from Copper Valley that it is in 

compliance with the Department’s regulations regarding drug-free workplaces and 

nondiscrimination, as well as the regulations governing lobbying activities.

Carrier Fitness

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. Copper 

Valley is subject to the Department’s continuing fitness requirements, and no information has 

come to our attention that would cause us to question 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. We therefore conclude that the carrier remains fit to 

conduct the operations proposed here.

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

 

2 Copper Valley may substitute a nine-passenger Cessna 441Conquest as a backup aircraft or to accommodate 

increased passenger demand.

3 Copper Valley may substitute a six-passenger DHC-2 Beaver as a backup aircraft or to accommodate increased 

passenger demand.
-3-

ACCORDINGLY,

1. The Department selects Copper Valley Air Service, to continue to provide EAS at Gulkana,

May Creek, and McCarthy, Alaska, and establishes the subsidy rates, as detailed in 

Appendix C, for the two-year period beginning February 1, 2013;

2. We direct Copper Valley Air Service 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 from the date of service of 

this Order or until the Department indicates that the records 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. The Department finds that Copper Valley Air Service continues to be fit, willing and able to 

operate as a certificated air carrier and capable of providing reliable EAS at Gulkana, May

Creek, and McCarthy;

4. Docket OST-1995-492 will remain open until further order of the Department; and

5. The Department will serve a copy of this Order on the communities of Gulkana, May Creek, 

and McCarthy, Alaska, Copper Valley Air Service, and the State of Alaska Department of 

Transportation and Public Facilities.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available online at

www.regulations.gov
Appendix A
Appendix B

Page 1 of 3
Appendix B

Page 2 of 3
Appendix B

Page 3 of 3
Appendix C

Page 1 of 3

Copper Valley Air Service

Essential Air Service to be Provided at Gulkana, Alaska

Effective Period: February 1, 2013, through January 31, 2015

Scheduled Service: Two weekly nonstop round trips between Gulkana and Anchorage

Aircraft: Six-seat twin engine Piper PA-31

Rate per Eligible Flight: $1,2941

Weekly Ceiling: $5,1762

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 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 solicitation beyond March 31, 2013. The 

Department’s obligation for performance under this solicitation beyond March 31, 2013, is contingent upon 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 March 31, 2013, until funds 

are made available to the Department for performance. If funds are not made available for performance beyond 

March 31, 2013, 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.

 

1 Annual compensation of $269,189 divided by 208 annual departures (4 weekly departures x 52 weeks).

2 4 arrivals and departures per week multiplied by $1,294 per flight.
Appendix C

Page 2 of 3

Copper Valley Air Service

Essential Air Service to be Provided at May Creek, Alaska

Effective Period: February 1, 2013, through January 31, 2015

Scheduled Service: May Creek: 2 nonstop or one-stop round trips per week to Gulkana

Aircraft: 3-seat Cessna 185 (winter months)

4-seat Cessna 206 (summer months)

Rate per Eligible Flight: $4961;

Weekly Ceiling: $1,9842

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 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 solicitation beyond March 31, 2013. The 

Department’s obligation for performance under this solicitation beyond March 31, 2013, is contingent upon 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 March 31, 2013, until funds 

are made available to the Department for performance. If funds are not made available for performance beyond

March 31, 2013, 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.

 

1 Annual compensation of $206,198 divided by 2 = $103,099; $103,099 divided by 208 annual departures (4 

weekly departures x 52 weeks).

2 4 arrivals and departures per week multiplied by $496 per flight.
Appendix C

Page 3 of 3

Copper Valley Air Service

Essential Air Service to be Provided at McCarthy, Alaska

Effective Period: February 1, 2013, through January 31, 2015

Scheduled Service: McCarthy: 2 nonstop or one-stop round trips per week to Gulkana

Aircraft: 3-seat Cessna 185 (winter months)

4-seat Cessna 206

Rate per Eligible Flight: $4961;

Weekly Ceiling: $1,9842

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 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 solicitation beyond March 31, 2013. The 

Department’s obligation for performance under this solicitation beyond March 31, 2013, is contingent upon 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 March 31, 2013, until funds 

are made available to the Department for performance. If funds are not made available for performance beyond 

March 31, 2013, 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.

 

1 Annual compensation of $206,198 divided by 2 = $103,099; $103,099 divided by 208 annual departures (4 

weekly departures x 52 weeks).

2 4 arrivals and departures per week multiplied by $496 per flight.