Order: 2013-11-15

Served November 21, 2013

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 21st day of November, 2013

Essential Air Service at

GLASGOW, MONTANA

GLENDIVE, MONTANA

HAVRE, MONTANA

SIDNEY, MONTANA

WOLF POINT, MONTANA

under 49 U.S.C. § 41731 et seq. 

Docket DOT-OST-1997-2605

ORDER EXTENDING SERVICE OBLIGATION

Summary

By this Order, the Department prohibits Silver Airways (“Silver”), from terminating Essential 

Air Service (“EAS”) operations at Glasgow, Glendive, Havre, Sidney, and Wolf Point, Montana, 

for 30 days, through December 25, 2013. 

Background

By Order 2011-1-27, served on February 3, 2011, the Department selected Gulfstream 

International Airlines, subsequently re-named Silver Airways, to provide subsidized EAS with 

19-passenger Beechcraft B-1900D aircraft at Lewistown, Miles City, Glasgow, Glendive, Havre, 

Sidney, and Wolf Point, Montana, for a two-year period beginning when the carrier inaugurated 

service through the end of the 24th month thereafter. The carrier inaugurated full EAS at the 

Montana communities on May 15, 2011, thus setting an expiration date of May 31, 2013. 

Subsequently, by Order 2013-6-3, issued on June 4, 2013, the Department extended that contract 

until further Departmental action to ensure that Silver will continue to receive EAS subsidy for 

its service and to prevent a service hiatus at the above communities. By Order 2013-6-13, issued

on June 12, 2013, the Department finalized the termination of eligibility of Lewistown and Miles 

City, and allowed Silver to suspend service at both communities, if it chose to, effective 

July 16, 2013.1

That Order also solicited proposals for a new contract period for the remaining five Montana 

communities. 

 1 In addition to Order 2013-6-13, see Order 2013-3-13, issued on March 28, 2013, for a complete discussion of 

legislative changes that affected Lewiston and Miles City’s eligibility in the EAS program.
2

The complete public file for EAS for the Montana 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 

Documents:” field. 

Notice of Silver to Terminate Service and Subsequent Developments

On June 28, 2013, Silver filed a 90-day notice of its intent to terminate its subsidized service at 

Lewistown, Miles City, Glasgow, Glendive, Havre, Sidney, and Wolf Point effective 

September 26, 2013. On July 19, 2013, the Department issued Order 2013-7-16, prohibiting 

Silver from terminating service for 30 days beyond the end of the 90-day notice period, until 

October 26, 2013.

Proposals and Selection Order

As noted above, by Order 2013-6-13, the Department requested proposals from air carriers interested 

in providing EAS at Glasgow, Glendive, Havre, Sidney, and Wolf Point. In response to that Order, 

the Department received three proposals, and by Order 2013-9-4, issued on September 5, 2013, the 

Department selected Hyannis Air Service, Inc., D/B/A Cape Air (“Cape Air”), to provide EAS 

with 9-passenger Cessna 402 aircraft at Glasgow, Glendive, Havre, Sidney, and Wolf Point, 

Montana, for a two-year period beginning when Cape Air begins full EAS operations at all five 

of the above communities through the end of the 24th month thereafter. 

Hold-In

Cape Air intends to start providing EAS at Glasgow, Glendive, Havre, Sidney, and Wolf Point 

on December 10, 2013, and its flights are currently available for sale. The current hold-in 

period, established by Order 2013-10-6, runs through November 25, 2013. Therefore, in 

accordance with 49 U.S.C. § 41734(c), we must extend the service obligations of Silver for an 

additional 30 days, through December 25, 2013, or until Cape Air actually begins service at all 

five of the above communities, whichever occurs first.2

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

ACCORDINGLY,

1. The Department prohibits Silver Airways from suspending its service at Glasgow, 

Glendive, Havre, Sidney, and Wolf Point, Montana, for 30 days and requires it to maintain its 

current level of service, as specified in Appendix A of this Order, through 

December 25, 2013, or until Hyannis Air Service, Inc., D/B/A Cape Air actually begins EAS 

operations, whichever comes first;

2. We direct Silver Airways to retain all books, records, and other source and summary 

documentation to support subsidy 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 date of service 

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 air 

 2 In accordance with 49 U.S.C. § 41734(c), the Department will extend Silver’s service obligation for successive 

30-day periods as necessary until replacement service actually begins. During this process, we will continue to 

compensate Silver at rates pursuant to Order 2011-1-27. 
3

carrier may forfeit its compensation for any claim that is not supported under the terms of this 

Order. 

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

4. We will serve copies of this Order on the mayors of Glasgow, Glendive, Havre, Sidney, and 

Wolf Point, Montana, and the airport managers of Wokal Field/Glasgow International Airport, 

Dawson Community Airport (Glendive), Havre City-County Airport, Sidney-Richland 

Municipal Airport, L.M. Clayton Airport (Wolf Point), and the service list for this docket.

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

Aviation Economic 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

(SEAL)

An electronic version of this document is available at

http://www.regulations.gov
Appendix A

Page 1 of 2

Silver Airways Essential Air Service

to be Provided at Havre, Glendive, and Glasgow, Montana

Effective Period: November 26, 2013, through December 25, 2013

Schedule Service: Havre: twelve one-stop round trips each week to Billings

Glendive: twelve one-stop round trips each week to Billings

Glasgow: five nonstop and seven one-stop round trips each week 

to Billings

Intermediate Stop and 

Upline Service:

Havre: No service to any intermediate or upline points are 

permitted; accordingly, no such service may be provided on 

subsidized flights without prior Department approval.

Glendive: No service to any intermediate or upline points are 

permitted; accordingly, no such service may be provided on 

subsidized flights without prior Department approval.

Glasgow: an intermediate stop at Wolf Point, Montana may be 

served on seven weekly subsidized round trips. 

Aircraft Type: Beechcraft B-1900D (19 passenger seats)

Timing of Flights: Flights must be well-timed and well-spaced in order to ensure full 

compensation.

Annual Compensation: Havre: $1,162,329

Glendive: $1,193,391

Glasgow: $1,166,049 

This rate assumes an annual completion factor of 97 percent. A 

compensation ceiling is to be applied per calendar week such that 

service above that ceiling in one week cannot make up for service 

shortfalls in another week.

Subsidy Rate per Flight: Havre: $9603

Glendive: $9864

Glasgow: $9635

Weekly Compensation 

Ceiling:

Havre: $23,0406

Glendive: $23,6647

Glasgow: $23,1128

 3 $1,162,329 divided by 1,211 annual departures: 24 flights x 52 weeks x .97 (completion factor) = 1,211. 4 $1,193,391 divided by 1,211 annual departures: 24 flights x 52 weeks x .97 (completion factor) = 1,211. 5 $1,166,049 divided by 1,211 annual departures: 24 flights x 52 weeks x .97 (completion factor) = 1,211. 6 24 flights per week multiplied by $960 per flight.

7 24 flights per week multiplied by $986 per flight.

8 24 flights per week multiplied by $963 per flight.
Appendix A

Page 2 of 2

Silver Airways Essential Air Service

to be Provided at Sidney and Wolf Point, Montana

Effective Period: November 26, 2013, through December 25, 2013

Schedule Service: Sidney: Seventeen nonstop round trips each week to Billings

Wolf Point: Seven nonstop and five one-stop round trips per 

week to Billings

Intermediate Stop and 

Upline Service:

Sidney: No service to any intermediate or upline points are 

permitted; accordingly, no such service may be provided on 

subsidized flights without prior Department approval.

Wolf Point: an intermediate stop at Glasgow, Montana may be 

served on five weekly subsidized round trips.

Aircraft Type: Beechcraft B-1900D (19 passenger seats). 

Timing of Flights: Flights must be well-timed and well-spaced in order to ensure full 

compensation.

Annual Compensation: Sidney: $2,932,152

Wolf Point: $1,502,378

This rate assumes an annual completion factor of 97 percent. A 

compensation ceiling is to be applied per calendar week such that 

service above that ceiling in one week cannot make up for service 

shortfalls in another week.

Subsidy Rate per Flight: Sidney: $1,7109

Wolf Point: $1,24110

Weekly Compensation 

Ceiling:

Sidney: $58,13111

Wolf Point: $29,77512

 9 $2,932,152 divided by 1,715 annual departures: 34 flights x 52 week x .97 (completion factor) = 1,715. 10 $1,502,378 divided by 1,211 annual departures: 24 flights x 52 week x .97 (completion factor) = 1,211. 11 34 flights per week multiplied by $1,710 per flight.

12 24 flights per week multiplied by $1,241 per flight.
Appendix B

NOTE:

The air 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 air 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 air 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 air 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 air carrier to provide service on these routes. The air 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 air 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 air 

carrier do not constitute a total or partial reduction or cessation of payment.

Funds may not be available for performance under this Order beyond January 15, 2014. The 

Government’s obligation for performance under this Order beyond January 15, 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 

January 15, 2014, until funds are made available to the Department for performance. If 

sufficient funds are not made available for performance beyond January 15, 2014, the 

Department will provide notice in writing to the carrier. 

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.

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 31st; August claims must be submitted by November 

30th, and so on.