Order 2012-6-9

Served: June 15, 2012

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 15th day of June, 2012

ORDER REQUESTING PROPOSALS

Summary

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

providing Essential Air Service (EAS) at any or all of the four communities captioned 

above for a new contract period, with or without subsidy. (See Appendix A for a service 

area map). Carriers should file their proposals no later than July 16, 2012.

Background

On July 15, 2011, Mesaba Aviation, Inc. (Mesaba), and Pinnacle Airlines (Pinnacle), 

subsidiaries of Pinnacle Airlines Corporation, d/b/a Delta Connection (Delta), filed 90-

day notices of their intent to suspend their joint service at Iron Mountain/Kingsford (Iron 

Mountain), Michigan, Brainerd and International Falls, Minnesota, effective 

October 13, 2011.1 By Order 2011-9-5, September 13, 2011, the Department prohibited 

Delta from terminating service at these three communities in accordance with 49 U.S.C. 

§ 41734(b), and requested proposals for replacement service by October 12, 2011, later 

extended to October 14, 2011. The notices at these three communities were triggered by 

Mesaba/Pinnacle’s retirement of its 34-seat Saab aircraft. The service at these three 

communities is now provided with 50-seat regional jets. As a result of the larger jet 

aircraft replacing the smaller Saab 340 aircraft, the Department by several subsequent 

Orders2 has require Delta to maintain the statutory frequency requirement of two round 

trips a day, six days a week, i.e., twelve round trips a week, at annual rates of $2,090,534

 

1 Delta filed notice at twenty four (24) communities. This order addresses only three communities and 

Rhinelander, Wisconsin, where Chautauqua Airlines, Inc. currently provides EAS.

2 See Orders 2011-11-8, 2011-11-33, 2011-12-25, 2012-1-32, 2012-2-19, 2012-3-15, 2012-5-5 and 

2012-6-3.

Essential Air Service at

IRON MOUNTAIN/KINGSFORD, MICHIGAN;

BRAINERD, MINNESOTA;

INTERNATIONAL FALLS, MINNESOTA; and

RHINELANDER, WISCONSIN

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

 DOT-OST-1999-5175;

 DOT-OST-2011-0135;

 DOT-OST-2009-0304; and

 DOT-OST-2011-0109
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at Iron Mountain and $1,309,886 at International Falls.3 We are currently negotiating a 

hold-in subsidy rate with Delta for its Brainerd service.

At Rhinelander, on September 12, 2011, Chautauqua Airlines, Inc., a wholly owned 

subsidiary of Republic Airways Holdings and doing business as Frontier Airlines 

(Chautauqua) filed a 90-day notice with the Department of its intent to terminate its then 

unsubsidized service, effective December 11, 2011. By Order 2011-10-15 

(October 20, 2011), the Department prohibited Chautauqua from suspending service 

through December 11, 2011, and requested proposals from carriers interested in 

providing replacement service. By several subsequent Orders,

4 the Department has 

require Chautauqua to maintain the statutory frequency requirement of two round trips a 

day, six days a week, i.e., twelve round trips a week, utilizing Embraer 135 (37-seats) or 

Embraer 145 (50-seats) at an annual rate of $1,837,638.5

By Orders 2011-11-30 (November 23, 2011), 2012-3-5 (March 7, 2012) and 2012-4-8 

(April 5, 2012), the Department selected Great Lakes Aviation, Ltd. (Great Lakes) to 

provide EAS at all four of communities for a two-year period beginning when it 

inaugurates full service at the communities through the end of the 24th month thereafter.

On June 11, 2012, however, Great Lakes sent an e-mail to the Department encouraging 

the re-solicitation of proposals for EAS at Iron Mountain, Brainerd, International Falls 

and Rhinelander. Great Lakes explained that it has recently experienced an aggressive 

expansion, is in the process of re-engineering its business model (including its approach 

to code-sharing and the associated reservation system infrastructure), has concerns 

regarding availability of gates and facilities to expand further at Minneapolis/St. Paul, 

and does not want to hinder communities from considering other alternatives. In 

response to Great Lakes’ notification, we contacted all four communities and they

support our issuing a new request for proposals. As a result, we will now solicit 

proposals from carriers interested in providing service to any or all of these communities.

Request for Proposals

Carriers should file their proposals no later than July 16, 2012. Staff will then docket 

proposals, thereby making them public, and shortly afterwards will provide a summary of 

the proposals to the communities and ask them for their final comments. We will give 

full consideration to all proposals that are timely filed.6

Interested carriers should prepare their proposals with every expectation that their initial 

proposals will represent their final and only proposals. However, we retain the discretion 

to negotiate proposals with carriers when we deem it desirable. We also retain the 

 

3 See Order 2011-9-5

4 See Orders 2012-4-1, 2012-5-3 and 2012-5-26

5 See Order 2012-3-5

6 Carriers should not expect the Department to accept late fillings. In cases where a carrier proposes to 

provide essential air service without subsidy and we determine that service can be reliably provided without 

such compensation, we typically do not proceed with the carrier-selection case. Instead, we simply rely on 

that carrier’s subsidy-free service as proposed.
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discretion to reject outright all unreasonable or unrealistic proposals and re-solicit a new 

round of proposals. However, negotiation and rejection are only occasional exceptions to 

the rule.

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. 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 affected communities

and the Department.7

Specifically, we expect proposals to Minneapolis/St. Paul, Detroit, Chicago O’Hare, or 

any other large or medium hub airport offering numerous connections to the national air 

transportation system at service levels described in the table below.8

Community Round Trips per Day/Week1

Enplanements 

per Day2

34 seaters 30 seaters 19 seaters

Iron Mountain, MI 2/12 2/14 3/18 32.8

Brainerd, MN 2/12-14 3/18 3-4/18-24 51.8

International Falls, MN 2/12-14 2-3/12-18 3-4/18-24 45.8

Rhinelander, WI 2/12-14 2-3/12-18 3-4/18-24 99.8

Notes: 1. The requested frequency of service assumes that the service would be provided on a nonstop 

turnaround basis. If two communities are service under a linear route, thus sharing seats, we 

would consider proposals with additional frequencies from those outlined above.

2. Source - US DOT Bureau of Transportation Statistics, Forms T-100 Market Report for 

YE 9/30/2011. Based on Origin and Destination Passengers divided by 2 (for two directions), 

divided by 313 service days, where each weekend is equal to one service day.

The communities and air carriers are encouraged to work together in advance of the due 

date for proposals to craft a service pattern that is desirable to the communities and meets 

the operational need of the airline interested in submitting a proposal. In addition, 

 

7 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c) (1) directs us to 

consider four factors: (a) scheduled service reliability; (b) contractual and marketing arrangements with a 

larger carrier to ensure service beyond the hub; (c) interline arrangements that the applicant has made with 

a larger carrier at the hub; and (d) community views, giving substantial weight to the views of the elected 

officials representing the users. In addition, the Consolidated Appropriations Act, 2008, Public Law 110-

161, provides that when selecting a carrier to provide EAS, the Department may consider the relative 

subsidy requirements, thus codifying a factor that we have considered since the inception of the program. 

Interested carriers should also be aware that our general provisions governing EAS will be included in the 

selection order as part of our authorization of subsidy for the selected service. Appendix C of this order 

contains those general provisions.

8 Previously, most EAS communities were entitled to service with 15-seat or larger aircraft. However, for 

FY 2012, Congress repealed the minimum requirement that basic EAS include service with at least 15-seat 

or larger aircraft. See Consolidated and Further Continuing Appropriations Act, P.L. 112-55, 

November 18, 2011. Communities are still entitled to service with twin-engine aircraft.
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carriers should be very clear as to whether a specific community’s proposal is on a standalone basis, or whether it is part of a larger, inseparable package with other communities.

Service and Traffic History

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

we have summarized passenger traffic in table above. For the year ended 

September 30, 2011, Iron Mountain averaged approximately 33 enplanements a day,

Brainerd, 52, International Falls, 46, and Rhinelander, 100.

New Filing Procedures

Carrier proposals should be submitted to the Department with all materials compiled into 

a single document. In addition, because the document will be published on 

http://www.regulations.gov/, each page should be formatted to be viewed online and for 

easy printing.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing 

lobbying activities, drug-free workplaces, and nondiscrimination.9 Consequently, all 

carriers receiving Federal subsidy for Essential Air Service 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, all carriers that plan to submit proposals involving 

subsidy should be aware that the selected carrier will be required to complete the required 

certifications. Interested carriers requiring more detailed information regarding these 

requirements should contact the Office of Aviation Analysis at (202) 366-5903.10

Community and State Comments

The communities and States are welcome to submit comments at any time. We 

encourage prospective applicants to contact the communities before they submit their 

proposals so that they can tailor them to the communities’ needs, as they will not be able 

to amend them after the due date. 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 

July 16, the deadline for carrier proposals.

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

 

9 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 assistance; 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 governmentwide requirements for drug-free workplace (grants).

10 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.
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ACCORDINGLY,

1. We request that carriers interested in providing Essential Air Service at Iron 

Mountain/Kingsford, Michigan, Brainerd and International Falls, Minnesota, and/or 

Rhinelander, Wisconsin, submit their proposals, with or without subsidy requests, no 

later than July 16, 2012. The proposals should be e-mailed to: EAS@dot.gov with the 

title “Proposal to Provide Essential Air Service at Iron Mountain/Kingsford, Michigan, 

Brainerd and International Falls, Minnesota, and/or Rhinelander, Wisconsin,” with the 

docket number corresponding to the communities as shown on the first page of this 

Order;11

2. These Dockets will remain open until further order of the Department; and

3. We will serve copies of this Order on the parties listed in Appendix C.

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

Department’s Aviation Economic Regulations, 14 CFR 385.50, must file such petitions 

within ten (10) 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 online at

www.regulations.gov

 

11 Questions regarding filings in response to this order may be directed to Brian Swanson at (202) 366-

5392 or brian.swanson@dot.gov.
Appendix A

AREA MAP

Maps generated by the Great Circle Mapper - copyright © Karl L. Swartz
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 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 order beyond [DATE]. The 

Department’s obligation for performance under this order beyond [DATE], is subject to 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 [DATE], until funds are made available to the Department for performance. If 

funds are not made available for performance beyond [DATE], the Department will provide 

notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of service provided 

under this order.
Appendix C

SERVICE LIST

Air Choice One Airlines, Shane Storz Delta Air Lines, Stephen A. Hedden Pacific Aviation Group, Craig Garrick

Air Greco/Wings Air Dorado Jets Pacific Aviation Group, Ron Rye

Air Sunshine, Inc. Dorado Jets, Mark McKenna Pacific Wings, Frank Ford

Air Sunshine, Mirmohammad Adili Era Aviation, Lori Goodman Pacific Wings, Greg Kahlstorf

Air West, Inc., John Raatz Executive Airlines, Kate Soled Penn Air, Danny Seybert

Air Wisconsin, Annette Daly ExpressJet, Jon Lindlief Penn Air, Scott Bloomquist

Air Wisconsin, Jim Rankin ExpressJet, Roger Weston Pinnacle Airlines, Jennifer Gammill

Airline Associates, Bill Mishk Frontier Airlines, Daniel Shurz Pinnacle Airlines, Megan Rosia

Alaska Airlines, Jeff Cole Frontier Flying, Bob Hajducovich Pinnacle Airlines, Phil Reed

Alaska Airlines, Sandy Sinick Frontline Aviation Planemasters, Inc., John Kessler

American Airlines, Carl Nelson Gem Air, Dan Schroeder Planemasters, Inc., Paul Berliner

American Eagle, Gary Foss Gem Air, JoAnn Wolters Planemasters, Inc., Todd DeSimone

American Eagle, Robert Emrich Great Lakes Airlines, Chuck Howell RAA, Faye Balck

American Eagle, Patrick Swift Great Lakes Airlines, Doug Voss Raytheon, Mike Schiedt 

Aviation Express, Brad Shriner Homeland Security, Bill Ragan Rectrix, Aviation, Scott LaForge

Aviation Technologies/Charter Air Transport, 

Jim Gallagher Homeland Security, David Bernier Saab Group, Polly Prelinger

Bemidji Aviation, Arlen Rinkenberger Horizon Air, Jennifer Thompson Scenic, Mary Schneider

Bemidji Aviation, Cori Rude Horizon Air, Mike McQeen Scenic, Mitzi Daines

Cape Air, Andrew Bonney Horizon Air, Jeff Cole Seaborne Airlines, Shawn Lewis

Cape Air, Dan Wolf ICEPR, Luis Irizarry SeaPort Airlines, EAS Mailbox

Cape Air, J. Flaherty Intrepid Internatl Air, Rick Eyk SeaPort Airlines. Rob McKinney

Capital Aviation, Mike Colgan Island Air Charters, Linda House Shuttle America, Jerry Balsano

Chautauqua, Josh Pascoe Jet Air, Daniel Wolford Silver Airways, Darrell Richardson

Classic Aviation, Tony Henderson Kenmore Air, Tim Brooks Silver Airways, Mickey Bowman

Colgan Air, Kevin Scott McCall Aviation, Dan Scott SkyWest, Brad Rawson

Colgan Air, Mike Colgan McCall Aviation, Michelle SkyWest, Eric Christensen

CommutAir, Andy Price Mesaba, John Spanjers SkyWest, Michael Thompson

CommutAir, Joel Raymond Mesaba, Max Shemesh Sovereign Air, Bob Karns

Consultant, Jeff Hartz Michigan DOT, Matt Brinker Tailwind International, Michele 

Wilkinson

Consultant, Mike Mooney Midstar Airlines, Jeffrey Fonner Tatonduk, Robert Everts

Consultant, Robert Silverberg Republic Air Line, Greg Aretakis Tatonduk, Robert Ragar

Consultant, Ron McNeil MN Aviation, Jose Maldonado Tradewind, Eric Zipkin

Continental, Bruce Keiner Multi Aero, Darnea Transport Azumah, Joel AnabilahAzumah

Continental, Dan Weiss Multi Aero, Shane Storz Trans States, Fred Oxley

Continental, Lorry Halloway Northern Air Cargo, David Karp Trans States, Gerry Wigmore

Delta Air Lines Anthony Canitano Northern Air Cargo, Eric Van Andel Trans States, Warren Crotty

Delta Air Lines, Dan Shuman NYDC, Henok Araya United, Alicia Gabriel

Delta Air Lines, Dana Debel OST, Brian Swanson United, James Starnes

Delta Air Lines, Jeff Davidman OST, Brooke Chapman US Airways, Benjamin Slocum

Delta Air Lines, Jeff Morgan OST, Dennis DeVany US Airways, Howard Kass

Delta Air Lines, Joe Esposito OST, Kevin Adams US Airways, Jason Reisinger

Delta Air Lines, Kristal Murphy OST, Kevin Schlemmer Warbelows Air Ventures, Art 

Warbelow

Delta Air Lines, Sally Veith OST, Michael Martin IMT, Airport Manager

Delta Air Lines, Sascha Vanderbellen OST, Scott Faulk Iron Mountain, Mayor

BRD, Airport Manager Brainerd, Mayor INL, Airport Manager

International Falls, Mayor RHI, Airport Manager RHI, Commission Chair

Michigan DOT, Matt Brinker