Order: 2014-7-8

Served: July 10, 2014

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 10th day of July , 2014

Essential Air Service at

ALPENA, MICHIGAN DOCKET DOT-OST-2009-0300

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

ORDER RE-SELECTING AIR CARRIER

Summary

By this Order, the Department is re-selecting SkyWest Airlines (SkyWest), to provide 

Essential Air Service (EAS) at Alpena, Michigan, using 50-passenger Canadair Regional 

Jet (CRJ200) aircraft to Detroit Metropolitan Wayne County Airport (Detroit) for the twoyear period from October 1, 2014, through September 30, 2016, for an annual subsidy of 

$2,168,995.

1

Background

By Order 2012-6-20 (June 22, 2012), the Department selected SkyWest to provide

12 nonstop round trips per week from Alpena to either Minneapolis-St. Paul International 

Airport (Minneapolis) or Detroit using CRJ200 aircraft at an annual subsidy of $3,098,472,

for a two-year contract which is scheduled to expire on September 30, 2014.

As the end of the contract was approaching, we issued Order 2014-4-4 (April 3, 2014) 

requesting proposals from air carriers interested in providing EAS at the community for a 

new term. In response to that Order, SkyWest, the airline currently providing the service,

was the only airline to submit a proposal.

 1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds.
- 2 -

SkyWest’s complete proposal and the community’s comments may be accessed online at 

www.regulations.gov by entering DOT-OST-2009-0300 in the search block.

Proposal of SkyWest Airlines

SkyWest submitted a proposal to provide Alpena 12 weekly nonstop round trips to Detroit

using CRJ200 aircraft for an annual subsidy of $2,168,995, for a two-year term. It plans to 

operate the service as Delta Connection and consolidate its Alpena service to Detroit, rather 

than the current schedule which serves hubs at Detroit and Minneapolis. SkyWest notes, 

“This change from the current schedule continues to provide passengers with access to 

nearly 500 Delta or Delta Connection departures per day through [Detroit], ensuring 

passengers are able to get to destinations around the world. In addition to being a major 

hub, we have found that Detroit is also the top destination for the community.”

Community Comments

On May 15, 2014, the Department solicited comments from the community regarding this 

air carrier selection case. The Honorable Matthew J. Waligora, Mayor of Alpena, 

submitted a letter on behalf of the community supporting SkyWest’s proposal noting, “We 

appreciate [SkyWest’s] ongoing efforts to further improve the flight schedule to best suit 

our business and recreational travelers.” In addition, we received a letter from Ms. Billi 

McRoberts, Airport Manager at Alpena County Regional Airport, strongly supporting 

SkyWest’s proposal to Detroit. Ms. Roberts noted that “SkyWest has been an excellent air 

service provider for our community and I look forward to a continued working relationship 

and to the new flight pattern.”

Decision

Since SkyWest was the only air carrier to submit a proposal for Alpena’s EAS case, and 

we find the service and subsidy levels to be reasonable (in fact, SkyWest’s proposed 

annual subsidy is $929,477 less than the previous contract), we shall make this re-selection 

of SkyWest at Alpena. This decision is contingent upon the Department’s receiving 

properly executed certifications from the air carrier that they are in compliance with the 

Department’s regulations regarding drug-free workplaces and nondiscrimination, as well 

as the regulations concerning lobbying activities.2

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 EAS. SkyWest is subject to 

the Department’s continuing fitness requirements, and no information has come to our 

attention that would cause us to question the air 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 findings. We therefore conclude that SkyWest is reliable and 

fit to conduct the operations proposed here.

 2 The certifications are available online under “Reports and Publications” at 

http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/essential-air-service
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This Order is issued under authority delegated in 49 CFR Part 1.25a(b).

ACCORDINGLY,

1. We select SkyWest Airlines to provide Essential Air Service at Alpena, Michigan and 

establish the annual subsidy rate as described in Appendix C;

2. We direct SkyWest Airlines 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 service date 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. We find that SkyWest Airlines is fit, willing and able to operate as a certificated air 

carrier, and capable of providing reliable Essential Air Service at Alpena, Michigan;

4. This docket will remain open pending further Department action; and

5. The Department will serve a copy of this Order on the Mayor of Alpena, Michigan, the 

Airport Director at Alpena County Regional Airport, and SkyWest Airlines.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at

www.regulations.gov
Appendix A

AREA MAP

Maps generated by the Great Circle Mapper - copyright © Karl L. Swartz.

 
 Appendix B

SkyWest Proposal for EAS at Alpena

 
Appendix C

SkyWest Airlines

Essential Air Service to be Provided at Alpena, Michigan

DOT-OST-2009-0300

Effective Period: October 1, 2014, through September 30, 2016

Scheduled Service: 12 weekly nonstop round trips to Detroit

Aircraft: 50-passenger CRJ200

Rate per Eligible Flight: $1,7741

Weekly Ceiling: $42,5762

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 this rate, 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 service levels, the carrier may cease to provide service to that 

specific location without regards 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 contract 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 may not be available for performance under this Order beyond September 30, 2014. The Government’s obligation for 

performance under this Order beyond September 30, 2014, is subject to the availability of 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 September 30, 2014, until funds are made available to the Department for performance. If sufficient funds are 

not made available for performance beyond September 30, 2014, the Department 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 in July must be filed by 

October 31; August claims must be submitted by November 30, and so on.

 1 Annual compensation of $2,168,995 divided by the 1,223 annual departures (24 weekly departures x 52 weeks x 

98 percent completion). 2 24 arrivals and departures per week multiplied by $1,774 per flight.