Order: 2015-4-14

Served: April 17, 2015

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the 17th day of April, 2015

Essential Air Service at

CLARK’S POINT, ALASKA

FALSE PASS, ALASKA

SOUTH NAKNEK, ALASKA

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

DOCKET DOT-OST-2015-0058

DOCKET DOT-OST- 2015-0059

DOCKET DOT-OST- 2015-0060

ORDER PROHIBITING TERMINATION OF SERVICE AND 

REQUESTING PROPOSALS

Summary

By this Order, the Department is (a) prohibiting Grant Aviation, Inc. (Grant Aviation) from 

terminating its unsubsidized service at Clark’s Point, False Pass, and South Naknek, Alaska,

and requiring that it continue its current service until conclusion of this Essential Air Service 

(EAS) case and (b) requesting proposals from airlines interested in providing EAS at Clark’s 

Point, False Pass, and South Naknek, with or without subsidy. Proposals are due by

May 18, 2015.

Background and Eligibility

On March 16, 2015, Grant Aviation filed 90-day notices of its intent to terminate service at all 

three communities, effective June 14, 2015.

Clark’s Point, False Pass, and South Naknek are EAS communities by virtue of them being 

listed on a certificated airline’s certificate on October 24, 1978, the date of enactment of the 

Airline Deregulation Act. In the FAA Modernization and Reform Act of 2012, Pub. L. 112-95 

(Feb. 14, 2012), Congress amended 49 U.S.C. § 41731(a)(1)(B) to change the definition of 

“eligible place” for the purpose of receiving EAS. Under the amendment, eligible communities 

are those that (among other things), at any time during the period between September 30, 2010, 

and September 30, 2011, inclusive— (i) received Essential Air Service for which compensation 

was provided to an air carrier under this subchapter; or (ii) received a 90-day notice of intent to 

terminate Essential Air Service and the Secretary required the air carrier to continue to provide 

such service to the community.
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49 U.S.C. § 41731(c) states that subparagraphs (B), (C), and (D), of subsection (a)(1) shall not 

apply with respect to locations in the State of Alaska or the State of Hawaii. Thus, Clark’s 

Point, False Pass, and South Naknek are eligible to receive EAS.

Clark’s Point, False Pass, and South Naknek’s EAS determination (Order 80-1-167) guarantee 

the communities a minimum of two round trips per week. 

Hold-In

By DOT Order 80-1-167, Clark’s Point, False Pass, and South Naknek are guaranteed a 

minimum of two round trips Dillingham, Cold Bay, King Salmon, or other suitable hubs. Grant 

Aviation’s proposed termination of service would cause these three communities to be left with 

no air service and, therefore, the Department is required by law to prohibit Grant Aviation from 

terminating such service at the end of its 90-day notice, i.e., June 14, 2015. As such, the 

Department will require Grant Aviation to continue to maintain its current level of service at 

these communities for successive 30-day periods until the Department has completed 

processing the air carrier-replacement case and the selected air carrier(s) have initiated service.1

Request for Proposals

Carriers should file their proposals no later than May 18, 2015. After that date, our staff will 

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

of the proposals to the communities and the State of Alaska and ask them for their final 

comments. The Department will give full consideration to all proposals filed in a timely 

manner.

The Department is providing interested carriers with some basic information to serve as 

guidance when they prepare their proposals, but we will not prescribe a precise format. The 

Department expects 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 may want to include proposed schedules as 

well as supporting data for their subsidy requests, such as projected block hours, revenues and 

expenses. The Department strongly encourages clear, well-documented proposals that will 

facilitate their evaluation by the affected community and the Department.2

 1 In accordance with 49 U.S.C. 41734(c), the Department will extend Grant Aviation’s service obligation for 

successive 30-day periods as necessary until replacement service begins. Should the Department require Grant 

Aviation to serve beyond June 14, 2015, Grant Aviation will be compensated in accordance with 49 U.S.C. 

41734(e). If Grant Aviation continued service and compensation is needed, the Department will address this in a 

separate Order.

2 In selecting a carrier to provide subsidized EAS in Alaska, 49 U.S.C. § 41733(c)(1) directs us to consider six 

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 views; (5) the experience of the applicant in 

providing, in Alaska, scheduled air service or significant patterns of non-scheduled air service; and (6) whether the 

carrier has included a plan in its proposal to market the service. In addition, the Consolidated Appropriations 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 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.
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Carriers are also welcome to propose more than one option, if they choose; they need not limit 

themselves to those requirements if they envision other, potentially more attractive service 

possibilities -- different hubs, frequency or equipment, for example -- with subsidy 

requirements that remain competitive. The community 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 community and meets the operational needs of the airlines.

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.

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

proposals will also be their final and only proposals. The Department retains the discretion to 

negotiate proposals with carriers when we deem it desirable. The Department also retains the 

discretion to reject outright all unreasonable or unrealistic proposals and solicit a new round of 

proposals. As always, the Department will formally solicit the communities’ views on any 

service options it receives before making a long-term carrier selection decision.

With specific respect to Clark’s Point, False Pass, and South Naknek, air carriers should 

provide sufficient capacity to accommodate historical levels of traffic, consisting of two or 

three round trips per week. Further, flights meeting EAS guidelines at Alaskan communities 

should provide sufficient capacity to accommodate passenger, freight, and mail demand on the 

critical outbound segment. In that regard, as is typically the case in Alaska, significantly more 

freight and mail flow from the hub to the EAS community than from the EAS community to 

the hub. In order to help air carriers make traffic and revenue projections, historical traffic 

levels are included in Appendix B.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces and nondiscrimination.3 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 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. All carriers that plan 

to submit proposals involving subsidy should submit the required certifications along with their 

proposals. 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. The Department is prohibited from paying subsidy to carriers that 

do not submit these documents.4

 3 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) 2 CFR Part 1200 – Government-wide debarment and suspension 

(non-procurement) and government-wide requirements for drug-free workplace (grants).

4 The certifications are also available on the web at http://www.dot.gov/policy/aviation-policy/small-communityrural-air-service/essential-air-service.
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Community and State Comments

Civic officials 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 May 18, 2015, the due date for carrier proposals.

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

ACCORDINGLY,

1. The Department prohibits Grant Aviation, Inc. from suspending service at Clark’s Point, 

False Pass, and South Naknek, Alaska, at the end of the 90-day notice period, and require it to 

maintain service at the community, as set forth in Appendix D, for an initial 30-day period 

through July 14, 2015, or until a carrier capable of providing reliable EAS actually begins 

service, whichever is first; 

2. The Department requests that carriers interested in providing Essential Air Service at 

Clark’s Point, False Pass, and South Naknek, Alaska, submit their proposals, with or without 

subsidy requests, no later than May 18, 2015. The proposals should be emailed to eas@dot.gov

with the title “Proposal to Provide Essential Air Service at Clark’s Point, False Pass, and South 

Naknek, Alaska”;5

3. These dockets will remain open until further order of the Department; and

4. The Department will serve a copy of this Order on the Alaska Department of Transportation

& Public Facilities; the civic officials of Clark’s Point, False Pass, and South Naknek, Alaska;

Grant Aviation, Inc.; and the service list for this docket.

By:

BRANDON M. BELFORD

Deputy Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available online at

www.regulations.gov

 5 Questions regarding filings in response to this Order should be directed to Michael Gormas at 202-366-1853, or 

via email at michael.gormas@dot.gov.
Appendix A

Area Map

Source: Great Circle Mapper, 2015, Karl L. Swartz.
Appendix B

Page 1 of 3

Historical Traffic – Clark’s Point, AK1

 1 T100 Market Enplanement Data
Appendix B

Page 2 of 3

Historical Traffic – False Pass, AK
Appendix B

Page 3 of 3

Historical Traffic – South Naknek, AK
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 complete, 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.

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 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 sufficient funds 

are not made available for performance beyond [DATE], 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.
Appendix D

Essential Air Service to be maintained at Clark’s Point, False Pass, and South Naknek, 

Alaska

Effective Period: June 14, 2015, until further Department action

Scheduled Service: Clark’s Point; Three weekly round trips to Dillingham

 False Pass; Three weekly round trips to Cold Bay

 South Naknek; Three weekly round trips to King Salmon

Aircraft: 6-passenger Cessna 407, 7-passenger GA-8, and 9-passenger Piper Navajo Chieftain