Order 2015

- 6

- 8

Served : June 8, 2 015

U N

I T E D S

T A T E S O F A

M E R I C A D E P A R T M E N T O F T R A N S P O R T A T

I O

N UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 8 th day of June , 20 1 5

Essential Air Service at

PADUCAH, KENTUCKY

HANCOCK/HOUGHTON, MICHIGAN

MUSKEGON, MICHIGAN

EAU CLAIRE, WISCONSIN

Under 49 U.S. C. § 47131 et seq. DOCKET DOT

- OST

- 2009

- 0299

DOCKET DOT

- OST

- 2009

- 0302

DOCKET DOT

- OST

- 2009

- 0301

DOCKET DOT

- OST

- 2009

- 0306



### ORDER REQUESTING PROPOSALS

Summary

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

Essential Air Service ( EAS) at Paducah, Kentucky; Hancock/Houghton

, Michigan; Muskegon

, Mi chigan; an d /or Eau Claire, Wisconsin

, with or without subsidy support

, for a new term

beginning February 1, 2016 . Proposals are due J uly 10, 2015

. (See Appendix A for a map. )

B a c k g r o un d

By Order 2013

- 10

- 8 , issued on October 21, 2013

, the Department re

- selected SkyWest Airlines

(SkyWest) to provide subsidized EAS at the above communitie s , using 50

- seat Canadair CRJ

200 aircraft , with 1 4 nonstop round trips per week per community to Chicago O’Hare (ORD)

, for

the period from January 1, 2014 , through January 31, 2016

, at a combined annual subsidy rate of

$5,661,624 ($2,034,160 for Paducah, $1,546,536 for Eau Claire, $1,389,952 for Muskegon, and

$690,976 for Hancock/Houghton). 1

That Order, as well as the complete public file for EAS at the above communities

, may be

accessed online through the Federal Docket Management System at www.regulations.gov , by

entering each community’s respective docket number in the “ SEARCH for: Rules, Comments,

Adjudications or Supporting Documents:” field.

Request for Proposals

As the end of the current rate term approac hes, the Department is requesting proposals from air

carriers interested in providing EAS at Paducah, Hancock/Houghton

, Muskegon, and Eau Claire

,

1 That Order also selected carriers to serve Pellston and Sault Ste. Marie, Michigan, and Watertown, New York.

The Department will solicit proposals for a new term for those communitie s in a separate Order.- 2

-

with or without subsidy support , for the two

- year period beginnin g February 1, 2016 . Air

carriers should file their proposals no later than July 10, 2015

. After that date, Departmental

staff will docket the proposals, thereby making them public. Additionally, the Department

request s each air carrier serve a copy of its proposal on the civic parties at the above captioned

communities and on the other applicants. Shortly afterwards, the Department will provide a

summary o f the proposals to the civic officials representing the communities and ask them to

submit any formal comments on this carrier

- selection case. The Department will give full

consideration to all proposals that are timely filed. 2

The following consists of some basic informa tion to serve as guidance when air carriers

prepare their proposals, but the Department will not prescribe a precise format for proposals.

P roposals should be submitted to the Department with all materials merged into a single

document. In addition, because the document will be published on www.regulations.gov

, each page should be fo rmatted to be viewed online. The Department expect s 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, the Department recommend s they include information concerning proposed

schedules and projected block hours. In addition, applicants are encouraged to provide

financial data supporting their subsidy requests, including information on their project ed

expenses and revenues. The Department strongly encourage s clear, well

- documented

proposals that will facilitate their evalua tion by the affected community (s) and the

Department. 3

The Department encourages proposals that meet the communities’ requireme nts in an efficient

manner. All of the above communities ar e strong traffic generators ; therefore, the Department

will request proposals consisting of 12 to 14 weekly round trips. Air carriers are also

welcome to propose more than one service option, if they choose ; they need not limit

themselves to a single specific service pattern if they envision other, potentially more

attractive service possibilities

-- different hubs or length of contract, for example

-- with

subsidy requirements that remain competi tive.

In order to assist air carriers in developing traffic and revenue projections for their proposals,

Appendix B presents historical passenge r levels at each community . In the most recent

2 Air carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide

EAS without subsidy and the Department determine s that service can be reliably provi ded without such

compensation, the Department usually do es not proceed with the carrier

- selection case. Instead, the Department

simply rel ies on that carrier’s subsidy

- free service as proposed.

3 In selecting a carrier to provide subsidized EAS for an el igible place not in Alaska, 49 U.S.C. § 41733(c)(1)

directs the Department to consider five factors: (1) service reliability; (2) contractual and marketing arrangements

with a larger air carrier at the hub; (3) interline arrangements with a larger air carr ier at the hub (4) community

views , giving substantial weight to the views of the elected officials representing the users ; and ( 5 ) whether the air

carrier has included a plan in its proposal to market the service. In addition, the Consolidated Appropriat ions Act,

2012, Public Law 112

- 55, and continued by the Consolidated and Further Continuing Appropriations Act, 2015,

Public Law No. 113

- 235, provides that when selecting a carrier to provide EAS, the Department may consider the

relative subsidy requiremen ts, thus codifying a factor that has been considered since the inception of the program.

Interested air carriers should also be aware of the general provisions governing EAS, which will be included in the

selection Order as part of the Department’s authori zation of subsidy for the selected service. Appendix C of this

Order contains those general provisions.- 3

-

12

- month period for which data are available ( January 1, 2015

, through December 31, 201 5 )

Paducah generated 41,555 total origin and destination passengers, Eau Claire generated 36,809

total origin and destination passengers , Muskegon generated 28,208 total origin and destination

passengers , and Hancock/Houghton genera ted 45,962 total origin and destination passengers

.

Interested air carriers should prepare their propo s al with every expectation that their initial

proposal will also be their final and only proposal. The Department retain s the discretion to

negotiate pr oposals with air carriers when deem ed desirable; in such cases the Department

will give all applicants the same opportuni t y. The Department retain s the discretion to reject

outright all unreasonab l e or unrealistic proposals and solicit a new round of prop osals.

However, negotiation s or rejection s will remain on l y occasional exceptions to the rule.

O t h e r Air Ca rr i e r R e qu i reme n t s

The Department is responsible for implementing various Federal statutes governing l obbying

activities , drug

- free workplaces and nondiscrimination

. Consequent l y, all air carriers

receiving Federal subsidy to support EAS must certify that they are in compliance with

Department regulations regarding drug

- free workplaces and nondiscrimination, and those air

carr i ers whose subsidies ex ceed $100,000 over the life of the rate term must also certify that

they are in compliance with the regu l ations governing lobbying activities. All air carriers that

plan to submit proposals involving subsidy should submit the required certifications along

with their proposals. Interested air carriers requiring more detailed infor m ation regarding

the s e requirements, as well as copies of the certifications, should contact the Off i ce of

Aviation Ana l ysis at (202) 366

- 5903. The Department is prohibited from paying subsidy to

air carriers that do not submit these document s

. 4

C o m m un i t y C o m m e n ts

Civic officials and the State s are welco m e to submit comments at any time. The Department

encourage s prospective applicants to contact the communi t y before they submit their

proposals so that they can tailor them to the communi t y’s needs, as they will not be ab l e to

amend them after the due date. As noted earlier, the Department will provide a copy of the

propo s als to the civic parties and ask them to submit their fina l comments short l y after

July 10, 2015 , the due da t e for air carr i er proposals.

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

- delegated to the

Director, Office of Aviation Analysis.

4 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 assis tance; 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 government

- wide requirements for drug

- free workplace (grants). The certificati ons are available

on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

- rural

- air

- service/essential

- air

- service

.- 4

-

ACCORDI N G L Y,

1. The Department request s that air carriers interested in providing E ssential A ir S erv i ce at

Paducah, Kentucky; Hancock/Houghton, Michigan, Muskegon, Michigan; and /or Eau Claire,

Wisconsin, submit their proposals, with or without subsidy requests, no later than

July 10, 2015 . Th e proposals should be emailed to: EAS@dot.gov with the title “Proposal to

Provide EAS at [name of community(s)] ; ” 5

2

. These Dockets will remain open until furt her Order of the Department; and

3

. The Department will serve cop i es of this Order on the civic offic i als of Paducah, Kentucky;

Hancock/Houghton, Michigan; Muskegon, Michigan; and Eau Claire, Wisconsin ; t he Director s

of the Barkley Regional Airport, Chippewa Valley Airport, Muskegon County Airport, and

Houghton County Airport ; and the service list for this docket

.

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

Regulations, 14 CFR Part 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

An electronic version of this document is available

onlin e at www.regulations.gov.

5 Question s regarding filings in response to this Order should be directed to Mr. Scott Faulk at scott.faulk@dot.gov

or (202) 366

- 9967.Appendix A



### A R EA M AP

M ap s g ene r a t e d b y t h e G r eat Ci r cle M appe r

- c op y r i g h t © Ka r l L. S w a r t z

.Appendix B

Page 1 of 4



### Paducah, Kentucky 1

Year Quarter Enplanements Deplanements Total

2012 1 3,869 3,860 7,729

2012 2 5,650 5,631 11,281

2012 3 5,650 5,744 11,394

2012 4 5,334 5,397 10,731

Total 20,503 20,632 41,135

Year Quarter Enplanements Deplanements Total

2013 1 4,130 4,143 8,273

2013 2 5,324 4,986 10,310

2013 3 5,402 5,246 10,648

2013 4 5,330 5,529 10,859

Total 20,186 19,904 40,090

Year Quarter Enplanements Deplanements Total

2014 1 4,019 4,084 8,103

2014 2 5,768 5,689 11,457

2014 3 5,392 5,571 10,963

2014 4 5,465 5,567 11,032

Total 20,644 20,911 41,555

1 Source: Bureau of Transportati on Statistics; Schedule T

- 100.Appendix B

Page 2 of 4



### Eau Claire, Wisconsin 1

Year Quarter Enplanements Deplanements Total

2012 1 5,396 5,109 10,505

2012 2 5,349 5,269 10,618

2012 3 5,036 4,955 9,991

2012 4 4,706 4,604 9,310

Total 20,487 19,937 40,424

Year Quarter Enplanements Deplanements Total

2013 1 4,941 4,748 9,689

2013 2 4,920 4,611 9,531

2013 3 5,204 5,219 10,423

2013 4 4,741 4,739 9,480

Total 19,806 19,317 39,123

Year Quarter Enplanements Deplanements Total

2014 1 4,319 4,239 8,558

2014 2 4,899 4,646 9,545

2014 3 4,838 4,944 9,782

2014 4 4,492 4,432 8,924

Total 18,548 18,261 36,809

1 Source: Bureau of Transportation Statistics; Schedule T

- 100.Appendix B

Page 3 of 4



### Muskegon, Michigan 1

Year Quarter Enplanements Deplanements Total

2012 1 4,236 3,660 7,896

2012 2 4,231 4,750 8,981

2012 3 4,930 4,601 9,531

2012 4 3,779 3,842 7,621

Total 17,176 16,853 34,029

Year Quarter Enplanements Deplanements Total

2013 1 3,959 3,583 7,542

2013 2 3,635 3,996 7,631

2013 3 4,491 4,305 8,796

2013 4 3,739 3,637 7,376

Total 15,824 15,521 31,345

Year Quarter Enplanements Deplanements Total

2014 1 3,486 3,265 6,751

2014 2 3,534 3,850 7,384

2014 3 4,101 3,869 7,970

2014 4 2,944 3,159 6,103

Total 14,065 14,143 28,208

1 Source: Bureau of Transportation Statistics; Schedule T

- 100.Appendix B

Page 4 of 4



### Hancock/Houghton, Michigan 1

Year Quarter Enplanements Deplanements Total

2012 1 5,567 5,454 11,021

2012 2 6,210 6,539 12,749

2012 3 7,362 7,345 14,707

2012 4 6,396 5,877 12,273

Total 25,535 25,215 50,750

Year Quarter Enplanements Deplanements Total

2013 1 5,473 5,137 10,610

2013 2 5,695 5,968 11,663

2013 3 7,747 7,810 15,557

2013 4 6,045 5,691 11,736

Total 24,960 24,606 49,566

Year Quarter Enplanements Deplanements Total

2014 1 5,078 4,833 9,911

2014 2 5,404 5,515 10,919

2014 3 6,805 6,850 13,655

2014 4 6,025 5,452 11,477

Total 23,312 22,650 45,962

1 Source: Bureau of Transportation Statistics; Schedule T

- 100.Appendix C

Example of General Terms and Conditions for Eassential Air Service

The air c a rr i e r un d er st a nds t h a t it m a y f o rfe it its c omp e ns a tion f or a n y f li g hts th a t it do e s not

op era te in c o n f o r m a n c e with the t er ms a nd stipul a tions of the ra te Order

, i n c luding the s er vi c e

pl a ns outlin e d in the Order a nd a n y oth e r s i g ni f i c a nt e l e m e nts of the re qui re d s er vi ce , without

p r ior a p p r ov a l. The air c arr i e r und e r st a nds th a t a n a i r cr a f t t a k e

- o f f a nd l a nding a t its s c h e du l e d

d e stin a tion c onstitut e s a c ompl e t e d f li g ht; a bs e nt a n e x pl a n a tion suppo r ting subsi d y e li g i b ili t y f o r

a f l i g ht th a t h a s n ot b ee n c ompl e t e d, su c h a s cer t a in w ea th e r ca n ce ll a tions, o n l y c ompl e t e d f li g hts

a r e c onsid ere d e l i g ible f or su b si d y

. I n a ddition, if the air carr i e r d o e s not s c h e dule or o p era t e its

f li g hts in f ull c on f o r m a n c e with the Order f o r a s i g ni f i ca nt p e r iod, it m a y j e op ar di z e its e nti r e

subsi d y c l a i m f or t he p er iod in qu e stion. I f the air c a rr i e r c ont e mpl a t e s a n y su c h c h a ng e s b e y ond

the s c ope o f the Order du r ing the a ppli ca ble p e r iod of th e se ra t e s, it must f i r st noti f y the O ff i c e of

Avi a tion An a l y sis in w r iti n g a nd r ece ive w r itt e n a pp r o v a l f r om the D e p a r tm e nt to be e nsu re d o f

f ull c omp e ns a tion. S hould c i rc umst a n ce s w ar r a n t , the D e p ar tm e nt m a y l o c a te a nd s e l e c t a

re pl a ce m e nt air c arr i e r to p r ovide s er vi c e on th e se r out e s. The air c a rr i e r must c ompl e te a ll

f li g hts th a t ca n b e s a f e l y op era t e d; f l i g ht s th a t ov e rf l y points f o r l ac k of t r a f f ic will not be

c omp e ns a t e d. I n d e t er m i ning wh e t h e r subsi d y p a y m e nt f o r a d e v i a ting f l i ght should be a djust e d

or dis a llow e d, t he D e p a r tm e nt will c onsid e r the e x t e nt to whi c h the g o a ls of the p r og ra m a r e m e t

a nd the e x t e nt of acce ss to the n a tion a l a ir t ra nspo r t a tion s y s t e m p r ovid e d to the c ommuni t y

.

I f the D e p ar tm e nt unil a t e ra l l y

, e ith e r p a r ti a l l y or c ompl e t e l y , t er min a t e s or re du ce s p a y m e nts f or

s e r vi c e or c h a ng e s s er vi c e r e qui re m e nts a t a sp ec i f ic lo c a tion p r ovid e d f or und e r this Order, th e n,

a t the e nd of the p e r iod f or whi c h the D e p ar tm e nt d o e s m a ke p a y m e nts in the stipul a t e d a mounts

or a t the stipul a t e d s er vi c e l e v e ls, the air c a rr i e r m a y cea se to p r ovide s er v i c e t o th a t sp ec i f ic

lo c a tion without re g a r d to a n y r e q ui re m e nt f or noti c e of su c h c e ss a tion. Those a djustm e nts in the

l e v e ls of subsi d y a nd/or s er vi c e th a t ar e mutu a l l y a g r ee d to in w r iting b y the D e p ar tm e nt a nd air

ca r r i e r do not c on s titute a tot a l or p ar ti a l re d u c tion or ce ss a tion of p a y m e nt.

S ubsi d y c ont r a c ts ar e su b j ec t to, a nd in c o r po r a te b y r ef e re n c e

, r e l e v a nt st a t ut e s a nd D e p ar tm e nt

r e g ul a tions, a s th e y m a y be a m e nd e d fr om time to tim e . How e v er

, a n y su c h st a tut e s, r e g ul a tions,

or a m e ndm e nts th ere to sh a ll not op era te to c ont r o v er t the f o r e g oi n g p ar a g r a ph.

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 liabi lity 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 Dep artment 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 i n July must be filed by October 31 st ; August claims must be submitted by November

30 th , and so on.