O rder: 2014

- 11

- 15 Served: November 25, 2014



### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.
Issued by the Department of Transportation on the 25th of November , 20 1 4

ORDER REQUESTING PROPOSALS 1 Summary By this O rder, the Department is requesting proposals from air ca rriers interested in providing E ssential A ir S ervice (EAS) at Page, Prescott, and /or Show Low, Arizona, for a new contract period beginning May 1, 201 5 , with or without subsidy

. (See Appendix A for a map). Air
c arriers should file their proposals no later than December 22 , 2014

. Background By Order 2013

- 6

- 1 (June 3, 2013 ), the Department re

- selected Great Lak es Aviation Ltd. (Great Lakes) to provide EAS at Kingman, Page, Prescott, and Show Low, Arizona, for the two

- year period from May 1, 2013, through April 3 0, 2015, for a combined annual subsidy of $7,873,533 ( $1,635,180 for Kingman, $2,472,028 for Page, $2,094,325 for Prescott, and $1,672,000 for Show Low). 2 Page currently receives service to Denver, Los Angeles, and Phoenix; Prescott receives service to Lo s Angeles ; and Show Low receives service to Phoenix. All of the above communities are served with Beechcraft 1900D aircraft.
The complet e public file for EAS at the above communities may be accessed online through the Federal Dockets Management System at www.regulations.gov by entering the respective Docket number in the “Search for Rules, Comments, Adjudications, or Supporting Documents” field.

1 As stated in Order 2014

- 9

- 21 (September 26, 2014), Kingman is now over the $1,000 subsidy

- per

- passenger cap. Therefore, the Department is not requesting proposals for Kingman; rather, the Department will address Kingman in a separate Order. Essential Air Service at
KINGMAN, ARIZONA PAGE, ARIZONA PRESCOTT, ARIZONA SHOW LO W, ARIZONA

Under 49 U.S.C. § 41731 et seq

. DOCKET DOT

- OST

- 1996

- 1899 DOCKET DOT

- OST

- 1997

- 2694 DOCKET DOT

- OST

- 1996

- 1899 DOCKET DOT

- OST

- 1998

- 4409- 2

-

Request for Proposals As the end of the current contract s approach, the Department is requesting proposals from air carriers interested in providing EAS at Page, Prescott, and /or Show Low , with subsidy support if necessary , for a new contract period beginning May 1 , 201 5

. Carriers should file their proposals no later tha n December 22 , 20 14

. Staff will the n docket the proposals, thereby making them public

. Shortly afterwards, the Department will provide a summary of the proposals to the communit y and ask them to submit their final comments. The Department will give full consideration to all proposals that are timely filed. 3

Interested air carriers should prepare their proposals with every expectation that their initial proposals will represent their final and only proposals. However, the Department retain s the discreti on to negotiate proposals with carriers when we deem it desirab le; in such cases, of course, the Department will give all appl icants the same opportunity. The Department also retain s the discretion to reject outright all unreasonable or unrealistic propos als and re

- solicit a new round of proposals. However, negotiation and rejection are only occasional exceptions to the rule.
The Department is providing interested carriers with some basic information to serve as guidance when they prepare their proposals , but it will not prescribe a precise format for their proposals. Air 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 www.regulations.gov , each page should be formatted to be viewed online. The Depar t ment expect s 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, it is recommend 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. The Department strongly encourage s clear, well

- documented proposals that will facilitate their evaluation by the affected communit ies and the Department. 4

3 Carriers should not expect th e Department to accept late fil ings. In cases where a carrier proposes to provide EAS without subsidy and we determine that basic E AS, as required by 49 U.S.C. § 41732, can be reliably provided without such compensation, we typically will not proceed with the carrier

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

- free service as proposed. 4 In selecting a carrier t o provide subsidized EAS for an eligible place not in Alaska, 49 U.S.C. § 41733(c)(1) directs us to consider five factors: (a) service reliability; (b) contractual and marketing arrangements with a larger carrier at the hub; (c) interline arrangements wit h a larger carrier at the hub; (d) community views, giving substantial weight to the views of the elected officials representing the users; and (e) whether the carrier has included a plan in its proposal to market its service to the community. In addition , the Consolidated Appropriations Act, 2014, Public Law No. 113

- 76, and continued in the Continuing Appropriations Resolution, 2015, Public Law No. 113

- 164, provides that when selecting a carrier to provide EAS, the Department may consider the relative sub sidy 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

-
Proposals should provide sufficient capacity to accommodate historical levels of traffic. In order to assist air carriers in developing traffic and revenue pro jections for their proposals, the Department has provided a summary of historical passengers in Appendi x B

. The Departme nt expects proposals that are co nsistent with what the c o mmunities currently receive, 12 to 22 weekly round trips at Page, and 12 to 18 weekly round trips at Show Low, depending on the
sea sonal demand , and 18 round trips at Prescott , using 19

- passenger air craft. The Department will contemplate 12 weekly round trips , if 30

- to 50

- passenger aircraft are proposed . If smaller aircraft (9

- passenger) are proposed, the Department will co nsider additional frequencies. A ir c arriers are also welcome to propose mor e than one service option, if they choose. T hey also need not limit themselves to the se requirements if they envision other, potentially more attractive service possibilities

-- different hubs or length of contract, for example

-- with subsidy requirement s that remain competitive. Service and Traffic History For the fiscal year ending 2014 (10/1/13

- 9/30/14), Page average d 16. 2 enplanements per day, Prescott, 13.2 , and Show Low, 7.2 . Additional details can be found in Appendix B. Special Discussion on El igibility To maintain eligibility in the EAS program, communities must comply with all eligibility requirements. The Department of Transportation and Related Agencies Appropriations Act 2000, prohibits the Department from subsidizing EAS to communities lo cated within the 48 contiguous States receiving per passenger subsidy amounts exceeding $200, unless the communities are located more than 210 miles from the nearest large or medium hub. 5 Prescott and Show Low are located approximately 102 miles and 154 m iles, respectively, of P hoenix Sky Harbor International Airport (PHX), a large hub airport, and therefore are subject to the $200 cap. Based on the most recent data available, both Prescott and Show Low’s subsidy per passenger exceeds $200 (Prescott at $2 53 and Show Low at $370). 6 The Department fully expects the communit ies to work cooperatively with the prospective carrier to ensure subsidy rates are in compliance with the $200 per passenger cap to remain eligible for EAS. 7
Additionally, Prescott and Show Low must maintain an average of 10 enplanements per service day. Public Law No. 112

- 95 amended 49 U.S.C. §41731(a)(1)(B) to change the definition of “eligible place” for the purpose of receiving EAS. The amendment states that to

5 Congress first established the $200 ceiling under P.L. 101

- 164 for fiscal year 1990, and reestablished it in fiscal years 1994

- 1999. The c eiling was made permanent by P.L. 106

- 69, the Department of Transportation and Related Agencies Appropriations Act of 2000. 6 The most recent data shows that Prescott had 8,281 total passengers and Show Low had 4,521 total passengers. The annual subsidy for Prescott is $2,094,325 and $1,672,000 for Show, resulting in subsidy per passenger calculations of $253 and $370, respectively. 7 On May 1, 2014, a Notice of Proposed Enforcement Policy on the $200 per passenger subsidy cap was published in the Federa l Register (Volume 79, Issue 84). After a 60

- day public comment period and review, t he Department issued a final notice of enforcement policy on the $200 cap in October 2014

. All communities in the 48 contiguous States within 210 miles of the nearest lar ge or medium hub airport receiving subsidized air service under EAS program have until September 30, 2015, based on data from October 1, 2014, through September 30, 2015, to ensure compliance with the $200 subsidy cap or face termination of subsidy eligibi lity.- 4

-
be eligible, a comm unity must maintain an average of 10 enplanements or more per service day, as determined by the Secretary, during the most recent fiscal year beginning after September 30, 2012 , except for those communities located more than 175 driving miles from the near est large or medium hub

. 8 As noted above, Prescott and Show Low are both within 175 miles of PHX, a large hub airport. Prescott ’s current average enplanements per day is 13.2

. Show Low’s is 7.2, below the statutory requirement of 10. 9 Community Comment s The communities and State are welcome to submit comments at any time. The Department encourage s prospective app licants to contact the communities before they submit their proposals so that they ca n tailor them to the communities needs, as they will not be able to amend them after the due date. As noted earlier, a summary of the proposals will be provided to the civic parties shortly after the dead line for carrier proposals, ask ing them to submit their final comments. Other Carrier Requirements The Depa rtment is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces, and nondiscrimination. 10 Consequently, all carriers receiving Federal subsidy for EAS must certify that they are in compliance with Departm ent 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 are in compliance with the regulations governing lobbying activities. Becaus e 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 certificatio ns. Interested carriers requiring more detailed information regarding these requirements should contact the Offic e of Aviation Analysis at (202) 366

- 5903. 11
This Order is issued under authority delegated in 49 CFR Part 1.25a(b) and re

- delegated to the Dir ector, Office of Aviation Analysis.

8 The Secretary also has authority to waive the 10 passenger requirement, on an annual basis, if the community can demonstrate that the reason the location averages fewer than 10 passengers per day is due to a te mporary decline in enplanements. See 49 U.S.C. § 41731(e). Additionally, the Secretary may waive the $200 subsidy

per

- passenger cap, on a case

- by

- case basis for a limited period of time. See Pub. L. 112

- 95, Sec. 426(c) (Feb. 14, 2012 )

. 9 The Department intends to address all communities und er the 10

- enplanement standard for FY2014 in one Order once all the data are available. Thus, Show Low’s long

- term eligibility in the EAS program is unclear at this time. 10 The regulations applicable to these areas are: (1) 49 CFR Part 20

-- New Restrict ions 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; (3) 49 CFR Part 27

-- Nondiscrimination on the Basis of Disability in Programs and Activities Receiving or Benefiting from Federal Financial Assistance; (4) 14 CFR Part 382

-- Nondiscrimination on the Basis of Disability in Air Travel; and (5) 49 CFR Part 29

-- Government

- Wide Debarment and Suspension (Non

- Procurement) and Government

- Wide Requirements for Drug

- Free Workplace (Grants). 11 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

-

ACCORDINGLY, 1. The Department request s that carriers interested in providing Essential Air Service at Page, Prescott, and/or Show Low, Arizona , submit their proposals, with subsidy support if necessary , no later than December 22 , 20 14 . The proposals should be e

- mailed to: eas@dot.gov with the title “Proposal to Provide E AS at Page, Prescott, and /or Show Low ”; 12

2. Th ese docket s will remai n open until further O rder of the Department; and

3

. The Department will serve copies of this Order on the Mayors, civic and a irport officials of Kingman, Page, Prescott, and Show Low, Arizona

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

o nline at www.regulations.gov

.

12 Questions regarding filings in response to this O rder may be directed to Michael Gormas at (202) 366

- 1853 or michael.gormas@dot.gov

.Appendix A

AREA MAP

Maps generated by the Great Circl e Mapper

- copyright © Karl L. Swartz

.Appendix B Page 1 of 3

Passenger Traffic at Page 1 / 2

Page, AZ PGA

FY2012 Enplanements Deplanements Total Enplanements Per day 2011--10 315 327 642 2011--11 256 303 559 2011--12 202 199 401 2012--1 161 196 357 2012--2 227 159 386 2012--3 291 274 565 2012--4 677 506 1183 2012--5 723 631 1354 2012--6 836 665 1501 2012--7 927 769 1696 2012--8 981 943 1924 2012--9 849 957 1806 6445 5929 12374 19.8

FY2013 2012--10 514 567 1081 2012--11 395 402 797 2012--12 249 195 444 2013--1 254 239 493 2013--2 240 242 482 2013--3 439 386 825 2013--4 488 437 925 2013--5 711 615 1326 2013--6 845 664 1509 2013--7 875 807 1682 2013--8 859 818 1677 2013--9 700 738 1438 6569 6110 12679 20.3

FY2014 2013--10 352 398 750 2013--11 391 366 757 2013--12 247 236 483 2014--1 176 193 369 2014--2 174 144 318 2014--3 203 186 389 2014--4 474 231 705 2014--5 653 335 988 2014--6 793 440 1233 2014--7 878 454 1332 2014--8 1198 492 1690 2014--9 624 473 1097 6163 3948 10111 16.2

1 Source: Bureau of Transportation Statistics: Schedule T

- 100; FY = Fiscal Year 2 Enplanements per Day = Total Traffic/2/313 annual service days (314 in leap years).Appendix B Page 2 of 3

Passenger Traffic at Prescott

Prescott, AZ PRC

FY2012 Enplanements Deplanements Total Enplanements Per day 2011--10 470 427 897 2011--11 471 470 941 2011--12 513 503 1016 2012--1 383 385 768 2012--2 332 311 643 2012--3 427 411 838 2012--4 396 440 836 2012--5 446 429 875 2012--6 519 479 998 2012--7 493 478 971 2012--8 466 425 891 2012--9 427 394 821 5343 5152 10495 16.8

FY2013 2012--10 450 443 893 2012--11 449 462 911 2012--12 470 490 960 2013--1 360 306 666 2013--2 325 321 646 2013--3 472 395 867 2013--4 436 420 856 2013--5 450 487 937 2013--6 571 525 1096 2013--7 594 538 1132 2013--8 540 462 1002 2013--9 421 410 831 5538 5259 10797 17.2

FY2014 2013--10 442 431 873 2013--11 336 339 675 2013--12 473 515 988 2014--1 230 214 444 2014--2 214 205 419 2014--3 342 339 681 2014--4 327 317 644 2014--5 366 370 736 2014--6 375 367 742 2014--7 357 388 745 2014--8 389 344 733 2014--9 291 310 601 4142 4139 8281 13.2Appendix B Page 3 of 3

P a ssenger Traffic at Show Low

Show Low, AZ SOW

FY2012 Enplanements Deplanements Total Enplanements Per day 2011--10 389 371 760 2011--11 288 319 607 2011--12 317 243 560 2012--1 220 328 548 2012--2 231 202 433 2012--3 270 252 522 2012--4 258 250 508 2012--5 383 383 766 2012--6 370 380 750 2012--7 393 429 822 2012--8 429 463 892 2012--9 305 332 637 3853 3952 7805 12.5

FY2013 2012--10 316 315 631 2012--11 276 245 521 2012--12 259 258 517 2013--1 178 258 436 2013--2 158 133 291 2013--3 222 224 446 2013--4 211 214 425 2013--5 345 339 684 2013--6 405 422 827 2013--7 450 457 907 2013--8 444 494 938 2013--9 397 441 838 3661 3800 7461 11.9

FY2014 2013--10 317 280 597 2013--11 231 250 481 2013--12 260 232 492 2014--1 161 234 395 2014--2 167 155 322 2014--3 159 123 282 2014--4 119 127 246 2014--5 125 137 262 2014--6 154 162 316 2014--7 177 172 349 2014--8 210 212 422 2014--9 144 213 357 2224 2297 4521 7.2Appendix C Example of General Terms and Conditions for Essential Air Service

T he 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 t he 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
com pleted, 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 writte n 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 opera ted; 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 an y 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 n ot 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 par t 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 p rovide 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 theret o shall not operate to controvert the foregoing paragraph.
All claims for payment, including any amended cl aims, must be submitted within 9 0 days of the last day of the month for which compensation is being claimed. For example, claims for service provid ed in July must be filed by October 31 st ; August claims must be submitted by November 30 th , and so on.