## Order 2010

- 9

- 16 Served: September 14, 2010



## UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued b y the Department of Transportation

on the 14 th 

## of September, 2010

Essential Air Service at

ANGOON AND T ENAKEE , ALASKA

Under 49 U.S.C. 41731 et seq

. DOCKET OST

-200 6

-25542

ORDER REQUESTING PROPOSALS Summary By this order, the Department is requesting proposals by October 13 , 2010 , from carriers interested in providing essential air service (EAS) at Angoon and Tenakee , Alaska, for a new two

- ye ar period, beginning February 1 , 201 1 , with or without subsidy

. Background By Order 2008

- 12

- 27 , December 29 , 2008 , the Department selected Alaska Seaplane Service, LLC. , to provide subsidized EAS to Angoon and Tenakee , Alaska, through January 31, 2011

. Under that order, the Department authorized subsidy for Alaska Seaplane consisting ten round trip s per week in the peak and five in the off

-peak to Angoon, and s even round trips per week in the peak and three in the off

-peak to Tenakee, for $101,359 and $63,748, respectively. All of the service is to be provided on a nonstop basis to Juneau with 5

- seat DeHavilland Beaver aircraft

. Request for Proposals As the end of the current rate term approaches , we are hereb y requesting proposals from carriers interested in providing service at Angoon and Tenakee , with or without subsidy, for the two

-ye ar period beginning February 1 , 201 1 . Carriers should file their proposals by October 13

. S taff will then docket proposals, thereby making them public, and direct each carrier to serve a cop y of its proposal on the civic parties and other applicants. Shortly afterwards, we 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 filed in a timely
manner. 1


## Interested carriers should prepare their proposals with every expectation that their initial proposals will also be their final and only proposals. We retain the discretion to negotiate

1 

### Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provi de essential air service without subsidy and we determine that service can be reliably provided without such compensation, we do not proceed with the carrier

- selection case. Instead, we simply rely on that carrier’s subsidy

- free service as proposed.

## - 2

-

proposals with carriers when we deem it desirable. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and, if necessary, solicit a new round of proposals. However, we anticipate that negotiation or rejection will remain 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, well

documented proposals that will facilitate their evaluation by the affected community and the Department. We do not anticipate any change in our selection criteria, or in the general provisions governing subsidy pay ments for essential air service. 2


## As always, we will formally solicit the communities’ views on any service options we receive before making a long

-term carrier

- selection decision. 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 both desirable to the communities and meets the operational needs of the airline , as carriers cannot amend their proposals after the due date

. We encourage proposals that meet the se requirements in an efficient manner. As we have mentioned, c arriers are welcome to propose more than one service option, if they choose; they

need not limit themselves to those requirements if they envision other, potentially

more attractive service possibilities

– different hubs, for example

– with subsidy requirements that remain competitive.
New Filing Procedures Carrier proposals should be submitted to the Department with all materials merged into a single document. In addition, because the document will be published on Regulations.gov, each page should be formatted to be viewed online.

Historical Traffic In order to assist carriers in making their traffic and revenue projections, we have included historical traffic for the communities in Appendix B

. For the most recent annual period, Angoon generated 254 deplaned passenger equivalents 3 

## in its best month and no

2 

### In selecting a carrier to provide subsidized essential air service in Alaska , 49 U.S.C. 41733(c) (1) directs us to consider f

ive factors. (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub; (3) interline arrangements with a larger carrier at the hub; (4) community vie ws ; and (5) experience of the applicant in providing, in Alaska, scheduled air service or significant non

- scheduled air service. 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 essential air service 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. 3 

### We have used deplanements, b ecause deplanements at Angoon and Tenakee, as is typical of bush Alaska, exceed enplanements. Also, we have used passenger equivalents, where 200 pounds of mail or freight is one passenger equivalent, to reflect the importance of mail and freight in Alaska.

## - 3

-

85 per month in its lowest month . Similarly, Tenakee’s monthly traffic ranged between 149 and 28 deplaned passenger equivalents

. Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces , and nondis crimination. 4 

## Consequently, all carriers receiving Federal subsidy to support essential air service must certify that they are in compliance with Department regulations regarding drug

- free workplaces and nondiscrimination, and those carriers whose subsidi es 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 should be aware that the selected carriers must complete the required certifications before they can be compensated. Interested carriers requiring more detailed information regarding these requirements, as well as copies of the certifications, should contact the Office of Aviation Analysis at (202) 366

- 5903

. Community Comments Civic officials and the state are welcome to submit comments on the proposals at any time. 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 October 13 , the due date for carrier proposals.
This order is issued under authority delegated in 49 CFR 1.56a(f) and re

- delegated to the Director, Office of Avi ation Analysis.
ACCORDINGLY, 1. The Department requests proposals from carriers interested in providing essential air service at Angoon and Tenakee , Alaska

. Carriers should submit their proposals, with subsidy if necessary, by October 13 , 2010

. Proposals should be emailed to EAS@dot.gov, with the title “Proposal to Provide Essential Air Service at Angoon and Tenakee , Alaska, Docket DOT

- OST

- 200 6

- 25542 .” Questions regarding filings may be directed to Kevin Adams at 202

- 366

- 1047 or Kevin.Adams@dot.gov ;

2

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

4 

### The certifications are available on the web at http://ostpxweb.dot.gov/aviation/index.html.

## -4

-

3 . We will serve this order on the s ervice list for this Docket.
Persons entitled to petition the Department for review of this order under the Department’s Regulations, 14 CFR 3 85.50, 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 o f Aviation Analysis (SEAL) An electronic version of this document is available on the World Wide Web at http://www.regulations.gov

## Appendix A

Great Circle Miles, Airport

-to Airport, to Juneau Excursion I nlet, EXI 32 Gustavus, GST 41 Tenakee, TKE 50 Angoon, AGN 59 Elfin Cove, ELV 64 Pelican, PEC 67 Kake, KAE 98 Ketchikan, KTN 234

This map is provided by Sabre® AirVisionTM Profit Essentials and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Appendi x B- 1
Angoon,A la sk

a (A GN), Sc heduled Se rv ic e, T-100 M ar ke t Repor t

Orig in De stin ation Ori gi n & Des ti nation

Pas senger E

qui valen ts Pa sse nger E qui valents Pa sse nger E qui vale nts Ye ar Month Pax. Fre ig ht Mail To tal Pax

. Fre ig ht Mail To tal Pax

. Fre ig ht Mail To tal 2007 8 249 8.6 10.2 267.8 236 25.8 35.0 296.8 485 34.4 45.2 564.6 2007 9 161 3.8 12.1 176.9 112 19.3 38.9 170.2 273 23.1 51.0 347.1 2007 10 120 4.1 7. 8 131.9 88 23.5 37.0 148.5 208 27.6 44.8 280.4 2007 11 131 2.4 4. 6 138.0 86 21.2 29.6 136.8 217 23.6 34.2 274.8 2007 12 64 1.9 5. 5 71.4 53 11.1 37.7 101.8 117 13.0 43.2 173.2 2008 1 63 1.4 7. 0 71.4 50 7.2 22.3 79.5 113 8. 6 29.3 150.9 2008 2 71 2.2 7. 1 80.3 55 11.1 23.5 89.6 126 13.3 30.6 169.9 2008 3 94 3.4 4. 8 102.2 61 15.6 28.1 104.7 155 19.0 32.9 206.9 2008 4 138 5.2 6. 9 150.1 135 21.1 26.3 182.4 273 26.3 33.2 332.5 2008 5 142 3.4 16.4 161.8 135 20.8 29.7 185.5 277 24.2 46.1 347.3 2008 6 208 4.0 10.1 222.1 203 24.0 28.1 255.1 411 28.0 38.2 477.2 2008 7 218 6.7 4. 3 229.0 210 34.9 26.7 271.6 428 41.6 31.0 500.6 To tal 1,659 47.1 96.8 1,802.9 1,424 235.6 362.9 2,022.5 3, 083 282.7 459.7 3, 825.4

2008 8 245 8.8 7. 5 261.3 209 38.6 29.9 277.5 454 47.4 37.4 538.8 2008 9 167 4.9 9. 4 181.3 117 34.7 33.0 184.7 284 39.6 42.4 366.0 2008 10 114 1.6 6. 4 122.0 91 21.8 33.0 145.8 205 23.4 39.4 267.8 2008 11 121 2.4 4. 6 128.0 94 17.8 30.2 142.0 215 20.2 34.8 270.0 2008 12 82 2.5 7. 8 92.3 58 20.5 31.5 110.0 140 23.0 39.3 202.3 2009 1 53 1.4 2. 8 57.2 40 9.3 16.9 66.2 93 10.7 19.7 123.4 2009 2 66 2.0 3. 5 71.5 65 19.0 28.7 112.7 131 21.0 32.2 184.2 2009 3 73 2.3 6. 8 82.1 47 16.6 18.7 82.3 120 18.9 25.5 164.4 2009 4 140 8.7 3. 6 152.3 111 26.7 22.1 159.8 251 35.4 25.7 312.1 2009 5 155 3.5 4. 0 162.5 139 32.3 27.4 198.7 294 35.8 31.4 361.2 2009 6 241 3.2 4. 1 248.3 214 36.4 27.7 278.1 455 39.6 31.8 526.4 2009 7 231 8.6 7. 2 246.8 202 36.6 26.9 265.5 433 45.2 34.1 512.3 To tal 1,688 49.9 67.7 1,805.6 1, 387 310.3 326.0 2,023.3 3, 075 360.2 393.7 3, 828.9

2009 8 201 9.8 6. 5 217.3 166 36.2 19.2 221.4 367 46.0 25.7 438.7 2009 9 170 8.6 7. 9 186.5 150 30.4 22.7 203.1 320 39.0 30.6 389.6 2009 10 174 6.9 5. 5 186.4 172 47.9 29.0 248.9 346 54.8 34.5 435.3 2009 11 80 4.6 3. 8 88.4 78 20.9 21.6 120.5 158 25.5 25.4 208.9 2009 12 97 1.2 7. 2 105.4 57 16.1 28.9 102.0 154 17.3 36.1 207.4 2010 1 66 2.6 3. 6 72.2 52 13.9 19.1 85.0 118 16.5 22.7 157.2 2010 2 86 2.0 3. 2 91.2 86 21.6 19.8 127.4 172 23.6 23.0 218.6 2010 3 108 4.3 4. 3 116.6 75 24.8 20.7 120.5 183 29.1 25.0 237.1 2010 4 141 11.0 3. 6 155.6 99 39.7 30.2 168.9 240 50.7 33.8 324.5 2010 5 172 11.6 5. 9 189.5 143 66.9 27.6 237.5 315 78.5 33.5 427.0 2010 6 163 6.0 3. 1 172.1 141 37.1 25.3 203.4 304 43.1 28.4 375.5 2010 7 218 13.0 3. 0 234.0 199 28.4 26.5 253.9 417 41.4 29.5 487.9 To tal 1,676 81.6 57.6 1,815.2 1,418 383.9 290.6 2,092.5 3, 094 465.5 348.2 3, 907.7Appendi x B-2

Ten ak ee,A la sk a (TKE ), Sc heduled Serv ic e,T-100 M ark et Repor t
Orig in De st Orig inand De stin ation

Pa ssenger

E qui valents Pa ssenger E qui valen ts Pas senger E qui valents Ye ar Month Pax. Fre ig ht Mail To tal Pax

. Fre ig ht Mail Total Pax. Fre ig ht Mail Total 2007 8 126 3.3 4.9 134.1 145 19.6 26.5 191.0 271 22.9 31.4 325.1 2007 9 55 1.1 3.3 59.5 49 6.4 19.9 75.3 104 7.5 23.2 134.8 2007 10 53 3.5 5.3 61.8 37 10.8 17.5 65.3 90 14.3 22.8 127.1 2007 11 34 1.5 7.9 43.4 46 12.1 16.7 74.8 80 13.6 24.6 118.2 2007 12 5 0.3 2.3 7. 6 6 9.5 12.5 27.9 11 9.8 14.8 35.5 2008 1 17 0.1 4.2 21.3 6 13.2 11.3 30.5 23 13.3 15.5 51.8 2008 2 6 0.1 2.7 8. 8 9 6.7 8.5 24.2 15 6.8 11.2 33.0 2008 3 16 0.2 2.7 18.8 24 8.2 15.8 48.0 40 8.4 18.5 66.8 2008 4 36 0.6 3.2 39.7 23 11.6 18.8 53.3 59 12.2 22.0 93.0 2008 5 96 2.0 4.0 102.0 84 12.9 16.2 113.1 180 14.9 20.2 215.1 2008 6 72 0.8 3.2 76.0 68 11.1 16.7 95.8 140 11.9 19.9 171.8 2008 7 107 3.1 3.2 113.3 107 22.9 23.6 153.5 214 26.0 26.8 266.8 To tal 623 16.6 46.9 686.3 604 145.0 204.0 952.7 1,227 161.6 250.9 1,639.0

2008 8 115 1.6 5.0 121.6 101 18.5 24.6 144.1 216 20.1 29.6 265.7 2008 9 59 3.9 4.1 66.9 58 17.8 23.8 99.5 117 21.7 27.9 166.4 2008 10 20 0.2 2.6 22.7 22 12.5 19.7 54.2 42 12.7 22.3 76.9 2008 11 20 0.1 3.2 23.3 24 10.8 17.0 51.7 44 10.9 20.2 75.0 2008 12 18 1.4 4.3 23.6 8 10.2 17.7 35.9 26 11.6 22.0 59.5 2009 1 3 0.0 1.6 4. 7 1 5.2 10.5 16.7 4 5.2 12.1 21.4 2009 2 8 0.8 2.6 11.4 1 12.3 17.0 30.2 9 13.1 19.6 41.6 2009 3 12 0.1 2.1 14.2 11 9.9 11.6 32.5 23 10.0 13.7 46.7 2009 4 25 1.1 3.4 29.6 27 18.4 11.8 57.2 52 19.5 15.2 86.8 2009 5 85 2.3 1.9 89.1 61 21.6 17.0 99.6 146 23.9 18.9 188.7 2009 6 71 0.8 2.6 74.4 70 23.3 18.3 111.6 141 24.1 20.9 186.0 2009 7 108 3.8 2.8 114.5 94 25.0 13.7 132.7 202 28.8 16.5 247.2 To tal 544 16.1 36.2 596.0 478 185.5 202.7 865.9 1, 022 201.6 238.9 1,461.9

2009 8 110 1.7 3.0 114.8 74 18.3 11.5 103.8 184 20.0 14.5 218.6 2009 9 65 2.4 2.9 70.2 63 27.2 11.8 102.1 128 29.6 14.7 172.3 2009 10 47 3.0 3.6 53.6 26 25.9 13.2 65.1 73 28.9 16.8 118.7 2009 11 22 0.3 2.0 24.2 21 13.1 9.8 43.9 43 13.4 11.8 68.1 2009 12 9 0.5 3.4 13.0 13 19.3 13.1 45.4 22 19.8 16.5 58.4 2010 1 12 0.2 2.8 15.0 7 10.4 10.2 27.6 19 10.6 13.0 42.6 2010 2 8 0.0 2.0 10.0 14 13.9 9.9 37.9 22 13.9 11.9 47.9 2010 3 8 0.2 3.1 11.3 19 20.1 9.3 48.4 27 20.3 12.4 59.7 2010 4 31 0.5 2.2 33.7 37 17.7 37.1 91.8 68 18.2 39.3 125.5 2010 5 52 1.8 2.0 55.8 51 18.8 15.0 84.7 103 20.6 17.0 140.5 2010 6 91 1.5 2.8 95.3 75 24.5 14.9 114.4 166 26.0 17.7 209.7 2010 7 98 5.0 3.5 106.5 100 27.7 20.8 148.5 198 32.7 24.3 255.0 To tal 553 17.1 33.3 603.4 500 236.9 176.6 913.6 1, 053 254.0 209.9 1,517.0

## Appendix C 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 pay ments 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 pay ments 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 b y the Department and carrier do not constitute a total or partial reduction or cessation of pay ment. 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 solicitation beyond [DATE]. The Department’s obligation for performance under this solicitation beyond [DATE], is contingent upon the availability of appropriated funds from which pay ment for services can be made. No legal liability on the part of the Government for any pay ment 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 carrier will receive notice in writing b y the Department. All claims for pay

ment must be submitted within 60 days of the last day of service provided under this order.

### Appendix D

40

- Mile Air, Leif Wilson 40

- Mile Air, Vanessa Thompson Adams, Kevin, Work Aer o Twin, AACA, Tony Cestnik Air Excursions, Marion Broughton Air Excursions, Mike Loverink Alaska Air Carriers Association, Joy Journeay Alaska Airlines, Joe Sprague Alaska Airlines, Sandy Sinick Alaska Central Express, John Seamon Alaska Ce ntral Express, Mike Bergt Alaska Central Express, Steve Endlich Alaska DOT, Marc Luiken Alaska DOT, Rebecca Cronkhite Alaska DOT

- Medicaid Passenger Fares Alaska Seaplanes, Craig Loken Alsek Air, Les and Debra Hartley Arctic Circle, Donald Sin gsaas Arctic Circle, Kelly Harris Arctic Transportation Services (ATS), Wilfred Ryan Arctic Transportation Services, (ATS), Jim Hjelm Bering Air, Allen Haddadi Bering Air, Jim Rowe Bob Stanford (Islairbk@Alaska.com) Congressional, Begich, Da vid Ramseur Congressional, Begich, Megan Foster Congressional, Begich, Tiffany Zulkosky Congressional, Murkowski, Arne Fuglvog Congressional, Young, Jeremy Price Consultant, Hank Myers Consultant, Ken Acton Consultant, Norm Israelson Copp er Valley Air, Dave Parmenter Copper Valley Air, Todd Hand Dorato Jets Dorato Jets, Mark McKenna ERA Aviation, Lori Goodman Era Aviation, Steve Wahrnke Frontier Flying, Bob Hajducovich Frontier Flying, Paul Hendrickson Grant Aviation, Bruce McGlasson Hageland, Mike Hageland Hageland, Patrick Thurston Harris Air, Fly Hackett Harris Air, Scott Harris Air, Scott Harris Homeland Security, David Bernier Homeland Security, Ragan, William Homer Air, Andy Smircich Iliamna Ai r, Tim LaPorte Inland Aviation, Stephen Hill Island Air, Bob Stanford Island Air, Jennifer Stanford

## - 2

-
Katmai Air, Sonny Peterson LAB Flying Service, Eric Bennett Larrys Flying, Jean Chenaille Michael Duffy (Michael.Duffy@dhs.gov) Myers, Lar ry (OST) Northern Air cargo, Dave Squier Northern Air Cargo, Keven Schlosstein OST, Dennis DeVany OST, Renee Williams Pacific Airways, Steve Montanus PenAir Consultant, Patrick Rizzi PenAir, Danny Seybert PenAir, Kim Kawaguchi PenAir, Ori n Seybert PenAir, Robert Cohn PenAir, Scott Bloomquist ProMech, Mark Sessoms RITA, Benard Stankus Salmon Air, Ron Salmon Seaport/Wings of Alaska, Nate Vallier Seaport/Wings of Alaska, Rob McKinney Servant Air, Wes Osowski Skagway, Ben L ingle Smokey Bay Air, Claire McCann Spernak Airways, Mike Spernak Steve Warnke (sw@flyera.com) Tanana Air Service, Brian Martin Taquan Air Service, Brien Salazaar Taquan, Beckie Allen Tatonduk, Controller, Tina Paylor Tatonduk, Marketing, R obert Ragar Tatonduk, Owner, Robert Everts USPS, Greg Garcia USPS, Leonard Kilburn USPS, Mary Tobias USPS, Steve Deaton USPS, Tina Campbell USPS, William Jones Warbelows Air Ventures, Art Warbelow Ward Air, Ed Kiesel Ward Air, Tom Wi lliams Wings Airline Services, Bob Jacobsen Wings Airline Services, Holly Johnson Wright Air Service, Bob Bursiel Yute, Tim Vottis

## Appendix D Page 1 of 2