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US. Deportment Of 

Transportation 

Office of the Secretary 

of Transportation 

1200 New Jersey Avenue, SE 

Washington, DC 20590 

The Honorable Kelly Schellong April 21, 2010 

Mayor, Crescent City 

377 J. Street 

Crescent City, CA 95531 

Dear Mayor Schellong: 

As you know, SkyWest Airlines, Inc., d/b/a United Express (SkyWest) provides subsidized air 

service under the essential air service (EAS) program at Crescent City, California. By 

Order 2010-3-22, the Department requested "best and final" proposals to serve Crescent City, 

and SkyWest was the only carrier to apply. The Department's current contract with SkyWest 

calls for an annual subsidy of $1,136,896 to provide Crescent City with twelve nonstop round 

trips per week to San Francisco and six one-stop round trips per week to Sacramento with 30-

seat Brasilia aircraft, and expires July 31. 

My purpose in writing is to inform you of the results of the carrier's service and subsidy proposal 

before we submit a recommendation on the carrier-selection issue to the Assistant Secretary for 

Aviation and International Affairs for decision. Since there are no other options before the 

Department at this time, you need not respond to this letter. However, we wanted to give you the 

opportunity to submit any comments if you wish. Copies of the carrier's full proposal may be 

accessed online through the Department's Dockets Management System at 

http://www.regulations.gov/ by entering "DOT-OST 1997-2649" in the "enter Keyword or ID" 

field, so we will only summarize it here. SkyWest proposes to provide fourteen nonstop round 

trips per week to San Francisco for $1,781,888 annual subsidy. In other words, SkyWest would 

drop the six one-stop round trips to Sacramento but add two additional nonstop round trips to 

San Francisco. The contract would be effective from August 1, 2010, through July 31, 2012. As 

we noted in the request for proposals, the Sacramento flights averaged only four passengers per 

flight, whereas the San Francisco service averages about fifteen. 

Please note that the average passenger fare shown in the carrier's proposal does not necessarily 

reflect the average local fares passengers would pay, but, rather, it reflects the prorated portion of 

the total ticket price, e.g., the Crescent City - San Francisco portion of a Crescent City - San 

Francisco - Chicago ticket that the carrier would realize. Also, the fare shown is net of certain 

charges such as federal transportation security fees, excise or ticket taxes, and passenger facility 

charges. Of course, carriers have the discretion to charge fares they deem appropriate, and the 

passenger fares presented have been developed for subsidy rate computation purposes only. 

Based on the cost elements incorporated in the carrier's computation summaries, a carrier would 

have to realize passenger fares comparable to the averages shown in its proposal in order to 

achieve break-even or profitable operations even with subsidy. 
- 2 -

While SkyWest did not include a flight schedule in its original proposal, it subsequently 

provided the schedule below.' You should also note that this schedule is illustrative only, and 

the carrier may make schedule changes to reflect changing conditions, e.g., to better meet 

shifting connecting bank times at the hub. The Department expects subsidized air carriers to 

maintain well-timed and well-spaced flights in order to ensure full compensation. 

We know this matter is important to you and we will act as quickly as possible upon receipt of your 

letter. In order to expedite the case, please submit your comments by email to EAS@dot.gov by 

May 3. If you have any questions or do not wish to submit formal comments, please contact 

Kevin Adams at (202) 366-1047. 

Sincerely, 

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9 ^ Dennis J. DeVany 

Chief, Essential Air Service Division 

Office of Aviation Analysis 

cc: Airport Manager, SkyWest 

' SkyWest's tentative daily schedule is as follows: 

CEC SFO SFO CEC 

9:00 10:35 11:41 13:14 

14:26 16:00 16:19 17:45