Order 2013

- 3

- 13 Issued: March 28, 2013



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 28 th day of March , 2013

ORDER TO SHOW CAUSE PROPOSING TERMINATION
OF ESSENTIAL AIR SER V ICE ELIGIBILITY

Summary By this O rder, the Department is directing interested persons to show cause as to why the Department should not terminate the eligibility of Lewistown and Miles City, Montana, under the Essential Air Service (“EAS”) program and allow Silver Airways, Inc. (formally Gulfstream International Airlines) (“Silver”) , to suspend service at the communities . Objec tions to the Department’s tentative decisions are due within 20 days of the service date of this Order. An area map is attached as Appendix A.

Background By Order 2011

- 1

- 27, issued on February 3, 2011, we selected Silver to provide subsidized EAS

with 19

- passenger Beechcraft B

- 1900D aircraft at the above communities , for the two

- year period ending May 31, 2013, at an annual subsidy rate of $ 1,325,733 for Lewistown and $ 1 ,621,821 for Miles City

.

The complete public file for EAS at each of the communities may be accessed online through the Federal Dockets Management System at: http://www.regulations.gov by entering “DOT

- OST

1997

- 2605” in the “SEARCH for: Rules, Comments, Adjudications or Supporting Docu ments :”

field.

Recent Developments The Federal Aviation Administration ( “ FAA ” ) Modernization and Reform Act of 2012 (Public

Law 112

- 95), signed into law on February 14, 2012, amended the definition of “eligible place” for the purpose of receiving EAS. 1 The amendment, among other things, states that to be eligible, a community must have had an average subsidy per passenger of less than $1,000 during the most recent fiscal year, as determined by the Secretary of Transportation.

1 See 49 U.S.C. § 41731.

Essential Air Service at

LEWISTOWN, MONTANA MILES CITY, MONTANA

Under 49 U.S.C. 41731 et seq

. D ocket DOT

- OST

- 1997

- 26052

Passenger Traffic and S ubsidy History Silver has operated subsidized service at Lewistown and Miles City since 2011. Based on a

review of the Bureau of Transportation Statistics’ T

- 100 Market Data for fiscal year ended September 30, 2012, Lewistown and Miles City generated 660 and 694 total passengers, respectively, resulting in an average per passenger EAS subsidy of $2,009 for Lewistown and $2,337 for Miles City

. 2

Decision
After careful consideration of this matter, the Department has tentatively determined that,

pursuant to 49 U.S.C. § 41731 (a)(1)(C) , it is required to terminate the subsidy eligibility of Lewistown and Miles City under the EAS program and allow Silver to end service at the communities due to the fact that the communities are no longer eligible to receive EAS.

We will give interested persons 20 days after the service date of this Order to submit objections. Objections should be fully documented and contain complete information on the data used by the persons objecting. If we later finalize the tentative find ings in a subsequent Order, the Department would make the Order effective 30

- 45 days thereafter to allow for an orderly shutdown. In that event, if Silver decides to suspend service upon the effective date of that Order, we will expect it to contact all p assengers who hold reservations for flights that will be suspended to inform them of the suspension, and assist them in arranging alternative transportation or to provide a refund of the ticket price, without penalty, if requested.

This O rder is issued un der authority delegated in 49 CFR Part 1.25a(b)

.

ACCORDINGLY,

1. The Department has tentatively determined that, pursuant to 49 U.S.C. § 41731(a)(1)(C), it is required to terminate the subsidy eligibility of Lewistown and Miles City

, Montana ;

2. The Department directs all interested persons to show cause within 20 days of the date of service of this Order why we should not make final the tentative findings and conclusions set forth above. Objections should be filled with Docket Operations, M

- 30, West Building Ground Floor, Room W12

- 140, 1200 New Jersey Avenue, SE, Washington, DC 20590 ; 3

3

. The Department directs Silver Airways, Inc. to retain all books, records, and other source and summary documentation to support claims for payment, and to preserv e 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 service date of this Order or until the Department indicates t hat 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;

2 See Appendix B for historical traffic data.

3 In addition, copies of comments may be e

- mailed to dennis.devany@dot.gov

, scott.faulk@dot.gov

, eas@dot.gov

, or faxed to the Chief, EAS & Domestic Analysis Division, at (202) 366

- 7638. Regardless of whether copies are sent to the EAS & Domestic Analysis Division, all objections should be filed with Docket Operations, M

- 30, at the

above address.3

4

. We will afford full consideration to the matters and issues raised in any timely and properly filed objections before we take further action;

5

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

6. We wil l serve copies of this O rde r on the parties listed in Appendix C

.

By:

SUSAN L. KURLAND Assistant Secretary

for Aviation and International Affairs (SEAL) An electronic version of this document is available on the World Wide Web at http://www.regulations.govAppendix A



# AREA MAPAppendix B

Passenger Traffic and Annual Essential Air Service Subsidy at Montana 1

Lewistown

12 Months

Ended Total
Enplanements Total
Deplanements Total

Traffic Annual
Subsidy at

April 1 Subsidy per Pax

Sep. 30, 2012 337 323 660 $ 1,325,733 $ 2,009

Miles City

Year Ending Total Enplanements Total Deplanements Total

Traffic Annual
Subsidy at

April 1 Subsidy per Pax

Sep. 30

, 2012 350 344 694 $ 1,621,821 $ 2,33 7

1 Source: Bureau of Transportation Statisti cs: Schedule T

- 100Appendix C

SERVICE LIST

MR KEVIN MYHRE

CITY MANAGER

305 WEST WATSON

LEWISTOWN MT 59457 MR MICKEY BOWMAN

SILVER AIRWAYS

1100 LEE WAGENER BLVD

SUITE 201

FT LAUDERDALE FL 33315

MBOWMAN@GOSILVER.COM

MR CHRIS A GRENZ

MAYOR

CITY OF MILES CITY

PO BOX 910

MILES CITY MT 59301

- 0910 MONTANA DOT

2701 PROSPECT AVENUE

HELENA MT 59601