O rder: 2014

- 4

- 22 Served: April 22, 2014



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

Issued by the Department of Transportation on the 22nd of April , 20 1 4

Essential Air Service at
FORT DODGE, IOWA MASON CITY, IOWA

Under 49 U.S.C. 41731 e t seq

. DOCKET DOT

- OST

- 2001

- 10682DO DOCKET DOT

- OST

- 2001

- 10684

ORDER RESOLICITING PROPOSALS

Summary By this O rder, the Department is re

- soliciting proposals from air ca rriers interested in providing Essential Air S ervice (EAS) at Fort Dodge and Mason City, Iowa
, with or without subsidy. Carriers should file their proposals no later than June 2 , 2014 . (See Appendix A for
an area map )

.

Background By Order 2014

- 1

- 20 ( January 31, 2014 ), the Department requested expedited proposals from carriers interest ed in providing EAS a t Fort Dodge and/or Mason City with a due date of February 21, 2014

. The communities have been without air service since February 1, 2014
, when Great Lakes Aviation, Ltd. (Great Lakes) suspended all service at both communities. In res ponse to our request for proposals, we received proposals from Great Lakes and Multi

Aero, Inc. d/b/a Air Choice One (Air Choice One)

. Summary of Proposals At Fort Dodge, Great Lakes proposed two options. 18 weekly round

- trips to Minneapolis/St. Paul In ternational Airport (Minneapolis) or Chicago O’Hare International Airport (Chicago)

, utilizing 19

- seat (reconfigured for 9 seats) Beech 1900D aircraft, or, 12 weekly round

- trips to Chicago utilizing 30

- seat Embraer Brasilia EMB

- 120 aircraft for an annual s ubsidy of $2,577,749

. At Mason City, Great Lakes proposed two options as well. 24 weekly round

- trips to Minneapolis or Chicago on Beech 1900D aircraft or 12 weekly round

- trips to Chicago on Brasilia EMB

- 120s for an annual subsidy of $2,676,869

.- 2

-

Air Choi ce One proposed a multitude of combined service to Fort Dodge and Mason City along with stand

- alone servi ce to Fort Dodge and Mason City. They would utilize either a 9

- seat Cesssna Grand Caravan or an 8

- seat Piper Navajo for these communities.

Combined O ption 1 consists of 18 weekly round

- trips from Ft. Dodge to St. Louis International Airport (St. Louis), 18 weekly round

- trips from Mason City to Chicago and 6 weekly one

- stop round

- trips from Mason City to Ft. Dodge to St. Louis , for an annual subsidy of $6,940,841 for a 2 year contract , d iscounted to $6,871,433 for a 3 or 4 year contract.

Combined Option 2 consists of 18 weekly round

- trips from Ft. Dodge to St, Louis, 6 weekly

one

- stop round

- trips from Ft. Dodge to Mason City to Chicago, 18 weekly round

- trips from Mason City to Chicago and 6 weekly one

- stop round

- trips from Mason City to Ft. Dodge to St. Louis for an annual subsidy of $7,431,905 for a 2 year contract , d iscounted to $7,357,586 for a 3 or 4 year contract.

The Fort Dodge stand

- alone Option consists of 18 weekly round trips from Ft. Dodge to St. Louis for an annual subsidy of $3,685,509 for a 2 year contract

, discounted to $3,648,653 for a 3 or 4 year contract.

The Mason City stand

- alone option consists of 18 weekly round trips from Mason Ci ty to Chicago for an annual subsidy of $4,290,533 for a 2 year contract

, d iscounted to $4,247,628 for a 3 or 4 year contract.

Community Comments The Department soli cited community comments on these proposals, with a due date of March 14, 2014 . The commu nity requested additional time and we gave them until March 21, 2014 to submit comments.

On March 19, 2014 , we received a joint letter from the Mayors of Mason City and Fort Dodge, and a letter from the Mason City Airp ort Manager on March 20, 2014. T he communities rejected proposal s submitted by both Great Lakes and Air Choice One for several reasons. The Mayors of both communities along with the Airport Manager of Mason City exp ressed concern with Great Lakes because of their past experience of unrelia bility and

non

- competitive fares. Their concerns with Air Choice One relate to its use of a single

- engine aircraft as opposed to a twin

- engine aircraft , which the communities are entitled to, and the effect that has on the duration of the flight. T herefo re, we are requesting proposals for a second time.

The complet e public file for EAS at Fort Dodge and Mason City may be accessed online through the Federal Dockets Management System at: www.regulations.gov by e ntering “DOT

- OST

- 2001

- 10682 ” or “ DOT

- OST

- 2001

- 10684 ”: in the “Search for Rules, Comments, Adjudications, or Supporting Documents” field.- 3

-

Request for Proposals 1 As outlined above, at the communities’ request , we are requesting proposals from carriers in terested in providing EAS at Fort Dodge and Mason City, Iowa, with or without subsidy

. 2 Carriers should file their proposals by June 2
, 2014. Staff will then docket the proposa ls, thereby making them public. Shortly afterwards, we will provide copies of all timely filed proposals to the communities and request community comments by a specified date

. We will give full consideration to all propo sals filed in a timely manner. Interested carriers should prepare their proposals with every expectation that t heir initial proposals will also be their final and only proposals. We retain the discretion to negotiate proposals with carriers when we deem it desirable. We also retain the discretion to reject proposals and, if necessary, solicit a new round of propo sals.

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 bei ng 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, we recommend that they include information concerning proposed schedules and projected block hours. In addition, applicants are urged to provide financial data supporting their subsidy requests, including information on their projected expenses and revenues. We strongly encourage clear, well

- documented proposals that will facilitate their evalu ation by the communities and the Department. 3

As always, we will formally solicit each community’s views on any service options we receive before making a long

- term, carrier

- selection decision. The communities and air carriers are encouraged to work toge ther, in advance of the due date for proposals, to craft service patterns that are both desirable to the communities and meet the operational needs of the airlines, as carriers cannot amend their proposals after the due date.

We encourage proposals that m eet the communities’ requirements in an efficient manner. With specific respect to Fort Dodge, the Department expects proposals consisting of three

1 Carriers should not expect the Departmen t to accept late fillings. In cases where a carrier proposes to provide EAS without subsidy and we determine that basic EAS, as required by 49 U.S.C. § 41732, can be reliably provided without such compensation, we typically will not proceed with the carri er

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

- free service as proposed.
2 Applicants should be aware of the provisions of 49 U.S.C. § 41731(a)(1)(B), the ten enplanement rule, discussed above, when preparing their proposals. Staff w ill be available to answer any questions. 3 In selecting a carrier to provide subsidized EAS for an eligible place not in Alaska, 49 U.S.C. § 41733(c) (1) directs us to consider five factors: (1) service reliability; (2) contractual and marketing arrangeme nts with a larger carrier at the hub; (3) interline arrangements with a larger carrier at the hub; (4) community views; and (5) whether the carrier has included a plan in its proposal to market the service. In addition, the Consolidated Appropriations Act, 2014, Public Law No. 113

- 76, 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 sinc e the inception of the program. Interested carriers sho uld 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 B of this Order contains those general provisions.- 4

-

nonstop round trips each day (a total of 18 per week) to Minneapolis, Chicago O’Hare, or another large or me dium hub airport with numerous connections to the national air transportation system using 19

- seat aircraft. At Mason City, we expect four nonstop or one

stop round trips each day (a total of 24 per week), also to a large or medium

- hub airport using 19

- se at aircraft. For service using larger aircraft, we are asking for two nonstop or one

- stop round trips each weekday and weekend (a total of 12 per week)

. If smaller aircraft are contemplated (e.g. 9

- seat aircraft), additional frequencies will be considere d, although we would expect the service to be nonstop from eac h community to the hub airport. We encourage proposals that meet those requirements in an efficient manner. Carriers are also welcome to propose more than one service option, if they choose. They need not limit themselves to the requirements specified above if they envision other, potentially more attractive service possibilities

– different hubs, for example

– with subsidy requirements that remain competitive.

Filing Format 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

w ww.regulations.gov, each page should be formatted to be viewed online.

Historical Traffic Refer to Appendix B in Ord er 2014

- 1

- 20 (January 31, 2014).

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

- free workplaces, and nondiscrimination. 4 Consequently, all carriers receiving Fe deral subsidy for EAS 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 contract must also certify that they ar e 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 Offic e of Aviation Analysis at (202) 366

- 5903.

Community Comments The c ommunities are welcome to submit comments at any time. We encourage prospective
app licants to contact the communities before they submit their proposals so that they can tailor them t o the community’s needs, as they will not be able to amend them after th e due date. As noted earlier, we will provide a summary of the proposals to the civic parties shortly after the deadline for carrier proposals, and ask them to submit their final comments.

4 The certifications are also available on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

rural

- air

- service/essential

- air

- service- 5

-

This Order is issued under authority delegated in 49 CFR Part 1.2 5a(b)

.
ACCORDINGLY 1. The Department requests proposals from carriers interested in providing EAS at Fort Dodge, Iowa, and/or Mason City, Iowa. Carriers should submit proposals, with subsidy if necessary, by June 2 , 2014. Proposals should be emailed to E AS@dot.gov, with the title “Proposal(s) to Provide EAS at Fort Dodge and/or Mason City” 5 ;
2. These Dockets will remain open until further Order of the Department; and

3. We will serve this Order on Mayors of Fort Dodge and Ma son City, the airport manager s at Fort Dodge Regional Airport and Mason City Municipal Airport, the service list for these Dockets.

Persons entitled to petition the Department for review of this Order under the Department’s Regulations, 14 CFR Part 385.31, must file such petitions wi thin 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.

SUSAN KURLAND Assistant Secretary Aviation and International Affairs

(SEAL)

An electronic version of this document is available Online at www.regulations.gov

.

5 Questions regardin g filings may be direct ed to Michael Gormas at 202

- 366

- 1053 or Michael.Gormas @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 stipulati ons 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 constit utes 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 appl icable 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 replace ment 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 sho uld 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 st ipulated 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 s ubject 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 fo r 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 regula tions, 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 cl aims, must be submitted within 9 0 day s 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 st ; August claims must be submitted by November 30 th , and so on.