Order 20 11
- 4
- 15 Served: April 15 , 20 11



### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Is sued by the Department of Transportation on the 15 th day

of April , 20 11

ORDER REQUESTING PROPOSALS Summary By this order, the Department is requesting proposals from carriers interested in providing essential air service (EAS) at any or all of the communities listed above , with or without subsidy, for the two
- ye ar period from November 1, 2011, through October 31, 2013 . Proposal s are due May 25, 2011 . (See Appendix A for a map .) Background Air Midwest ceased operations at the four Arkansas communities discussed here on June 30, 2008. Great Lakes Aviation, Ltd. (Great Lakes) was selected to provi de EAS at these communities by

a series of orders. 1 Great Lakes never inaugurated service and notified the Department it would not inaugurate the s ervice it was selected to provide. In response, the Department solicited proposals to provide service. By Order 2009
- 6
- 25, June 26, 2009, the Department selected Alaska Juneau Aeronautics, Inc. d/b/a SeaPort Airlines (SeaPort) to serve all four communiti es for a two
- year period , at a combined first
- ye ar subsidy rate of $6,046,789

1 Order 2008
- 5
- 2, May 5, 2008, for Jonesboro, and Order 2008
- 7
- 8, July 3, 2008, for El Dorado/Camden, Harrison, and Hot Springs
. Essential Air Service at EL DORADO/CAMDEN, ARKANSAS HARRISON, ARKANSAS HOT SPRINGS, ARKANSAS JONESBORO, ARKANSAS Under 49 U.S.C. 41731 et seq . Docket DOT - OST - 1997 - 2935 Docket DOT - OST - 1997 - 2935 Docket DOT - OST - 1997 - 2935 Docket DOT - OST - 1997 - 2935- 2
-

(El Dorado/Camden [El Dorado]: $2,095,517, Harrison: $1,695,929, Hot Springs: $1,419,102, Jonesboro: $836,241)

. The combined second
- ye ar subsidy rate is $5,740,363 (El Dorado: $2,060,725, Harrison: $1,591,119, Hot Springs: $1,288,527, Jonesboro: $799,992). Service was to consist of 18 weekl y nonstop round trips between each community and Memphis, with 9
- seat Pilatus PC
- 12 aircraft. T he Order was tentative since the Department selected SeaPort at service and subsidy

levels less than it had proposed. We gave SeaPort 10 days to object or to accept the terms and conditions . SeaPort did not object and we issued Order 2009
- 7
- 8, July 9, 20 09, finalizing our selection of SeaPort at the above service and subsidy levels. SeaPort inaugurated service at all four communities on October 26, 2009, thus making the expiration date of its contract October 30, 2011. Since SeaPort inaugurated service, the Department has issued several Orders 2 allowing alternate service patterns at all four communities , all with the full support of the communities . SeaPort currentl y operates service from Harrison and Jonesboro to Memphis and Kansas City. SeaPort currentl y operates service from El Dorado and Hot Springs to Memphis. Service from El Dorado and Hot Springs to Dallas Love Field has not been inaugurated, although an alternate service pattern permitting it was issued. See footnote 2. Special discussion concerning Hot Springs and Jonesboro Based on the most recent 12
- month period for which data are available ( February 1, 2010 , through January

31, 2011 ), 1,602 passengers were enplaned and deplaned at Hot Springs , while 952 passengers were enplaned and deplaned at Jonesboro . The current annual subsidy 3 amount for Hot Springs is $1, 288,527 and Jonesboro’s is $799,992 . Therefore, the subsidy per passenger at Hot Springs is $ 804 and $ 840 at Jonesboro . The Department is prohibited from subsidizing air service at a community where the subsidy

per passenger exceeds $200, unless the community is more than 210 highway miles from the nearest large or medium hub airport4

. Hot Springs and Jonesboro well exceed the $200 per passenger cap and both are fewer than 210 miles from a large or medium hub. Hot Springs is 198 miles and Jonesboro is 82 miles, both from Memphis International Airport (MEM ) , a medium hub airport
. Both communities experienced a hiatus in service between Air Midwest’s cessati on of operations on June 30, 2008, and the inauguration of service from SeaPort on October 26, 2009. We note that these four communities suffered the longest service hiatus of all the communities affected by four EAS carrier shut downs and, while we allow for traffic to rebuild after such a hiatus, enplanements at both communities remain quite low, averaging 2.6 enplanements per day at Hot Springs and 1.5 per day

at Jonesboro
. 5 As noted above, the per
-passenger subsidy exceeds the $200 cap b y over four ti mes, with both communities having a per passenger subsidy in excess of

2 Order 2010
- 4
- 3, April 7, 2010, allowing service from Harrison to Kansas City, in addition to Memphis; Order 2010
- 6
- 7, June 3, 2010, allowing service from El Dorado and Hot Springs to Dallas Love Field, in addition to Mem phis; and Order 2011
- 1
- 5, January 7, 2011, allowing service from Jonesboro to Kansas City, in addition to Mem phis. 3 Annual subsidy rates listed here are second
- year rates, lower than first
- year rates, as proposed by SeaPort. 4 Congress first established the $200 ceiling under P.L. 101

- 164 for fiscal year 1990, and reestablished it in fiscal years 1994
- 1999. The ceiling was made permanent by P.L. 106
- 69, the Department of Transportation and Related Agencies Appropriations Act of 2000. 5 See Appendix B for traffic history.- 3
-

$800. However , rather than terminate service eligibility at either community , at this stage, the Department will solicit proposals for EAS at both, but the Department will evaluate all proposals submitted before committing to a two
- ye ar contract or making a final determination on Hot Springs and Jonesboro’s c ontinuing eligibility . During the window prior to the due date f or proposals, we expect both communities to work aggressivel y with all potential applicants to mitigate some of the risks that the carriers may face in an attempt to lower their subsidy levels and/or increase passenger traffic
. Request for Proposals As the end of the current rate term s a pproach, we are here requesting proposals from carriers interested in providing service at El Dorado, Harrison, Hot Springs, and/or Jonesboro, with or without subsidy, for the two
- year period from November 1, 2011, through October 31, 2013. Carriers shoul d file their proposals no later than May 25, 2011 . After that date, our staff will docket the proposals, thereb y 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 to submit their final comments. We will give full consideration to all proposals that are timely filed. 6 Interested carriers should prepare their proposals with every expectation th at their initial proposals will represent their final and only proposals. However, we retain the discretion to negotiate proposals with carriers when we deem it desirable; in such cases, of course, we will give all applicants the same opportunity . We als o retain the discretion to reject outright all unreasonable or unrealistic proposals and re
- solicit a new round of proposals. However, negotiation or rejection are only occasional exceptions to the rule. We are here providing interested carriers with som e 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 reques ted. 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 strongl y encourage clear, well
- documented proposals that will facilitate their evaluation by the affected communities and the Department. 7

6 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide 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 sim ply rely on that carrier’s subsidy
free service as proposed. 7 In selecting a carrier to provide su bsidized essential air service, 49 U.S.C. 41733(c) (1) directs us to consider four 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; and (4) community views
. 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.- 4
-

With respect to each community, we expect proposals consisting of service with two
-pilot, twin
engine aircraft with at least 15 passenger seats, and offering two round trips each weekday and weekend (12 total round trips per week) to a suitable hub airport ( e.g. Dallas/Fort Worth, Houston George Bush Intercontinental, Kansas City , Memphis, or St. Louis ), that offers numerous connecting opportunities to the national air transportation s ys tem
. Two communities may be served on a linear basis, where traffic demand and aircraft size are appropriate ( e . g . Harrison

– Hot Springs

– Dallas/Fort Worth). I f aircraft with fewer than 15 passenger seats are contemplated, service patterns should consist of three nonstop round trips each weekday and weekend (18 total round trips per week). If such a proposal is submitted and the community ultimately

supports th e service, in effect waiving their right to 15
- seat or larger aircraft, we would consider the waiver to appl y only to the two
- ye ar carrier
- selection at hand, i.e. we would not assume that the community waives their rights for all time. Harrison and Hot Sp rings have requested that we solicit proposals that include at least one option to a specific hub, but service proposals to other hubs will also considered. The list below summarizes the hubs that those two communities have noted are of high interest to them.

 Harrison

– Dallas/Fort Worth International , Kansas City, or Memphis  Hot Springs

– Dallas/Fort Worth International or Dallas Love Field Regarding proposals for Hot Springs and Jonesboro, as s tated above, we will evaluate all proposals submitted before committing to a two
- year contract or making a final determination on those two communities’ continuing eligibility
. Proposals including Hot Springs and/or Jonesboro should acknowledge the per passenger subsidy as stated above, and describe specific plans to address the issue, including, but not limited to, lower annual subsidy levels, marketing plans, such as advertising or fare promotions, enhanced access to connections to the national transportation sy stem, codeshare a greements with major airlines, and/or wider access to distribution in reservation sy stems or consumer websites. Communities and air carriers are encouraged to work together in advance of the due date for proposals to craft a service pattern that is desira ble to the community

and meets the operational needs of the airline interested in submitting a proposal
. Inaddition, carriers should be very clear as to whether a specific community ’s proposal is on a stand
- alone basis, or whether it is part of a larger, inseparable package with other communities. We encourage proposals that meet th e se 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 those requirements if they envision other, potentially more attractive service possibilities

– different hubs, for example

– with subsidy requirements that remain competitive. Service and Traffic History For the 12
- month period ended January 31 , 2011, th e most recent period for which traffic data are available, El Dorado averaged 4. 0 enplanements per day , Harrison 5.7 , Hot Springs, 2.6 , and Jonesboro 1.5
. 8 Inorder to assist carriers in making their traffic and revenue forecasts, we have included historical traffic data in Appendix B. 8 See Appendix B for historical traffic data. Enplanements represent one
- half of total origin
- and
- destination traffic, and average enplanements per day are based on 313 days per service year
.- 5
-

Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobb ying activities, drug
- free workplaces, and nondiscrimination. 9 Consequently , all carriers receiving Federal subsidy for 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 lobb yi ng 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 Office of Aviation Analysis at (202) 366
- 5903. 10 Community and State Comments The communities and state s are welcome to submit comments on the proposals at any time. As noted earlier, however, we will provide a summary of the proposals to the civic parties and ask them to submit their final comments shortly after May

25 , the due date for proposals. This order is issued under authority delegated in 49 CFR 1.56a(f) and re
- delegated to the Director, Office of Aviatio n Analysis. ACCORDINGLY, 1. W e request that carriers interested in providing essential air service at El Dorado/Camden, Harrison, Hot Springs, and/or Jonesboro, Arkansas , submit their proposals, with or without subsidy requests, no later than May 25, 2011 . The proposals should be e - mailed to EAS@dot.gov , with the title “Proposal to Provide Essential Air Service at (community or communities of interest), DOT
- OST
- 1997
- 2935” ; 11 2 . This docket will remain open until further order of the Department; and 3 . We will serve copies of this order on the mayors of El Dorado, Camden, Harrison, Hot Springs, and Jonesboro, and the airport managers of South Arkansas Regional Airport /Goodwin Field (El Dorado/Camden), Boone County Regi onal Airport (Harrison), Hot Springs Memorial Field Airport, and Jonesboro Municipal Airport, and the parties listed in Appendix D
.

9 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) 49 CFR Part 29
-- Government
- wide debarment and suspension (non
-procurement) and government
- wide requirements for drug
- free workplace (grants). 10 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html. 11 Questions re garding filings in response to this order may be directed via e
- mail to Kevin Schlemmer at kevin.schlemmer@dot.gov or via phone at (202) 366
- 3176.- 6
-

Persons entitled to petition the Department for review of this order under the Department’s Regulations, 14 CFR 385.50, mu st file such petitions within ten (10) days after the date of service of this order. This order will be effective immediatel y, and the filing of a petition for review shall not preclude its effectiveness. By :

TODD M. HOMAN Director Office of Aviation Anal ysis (SEAL) An electronic version of this document at http://www.regulations.govAppendix A 

## AREA MAP

This map is provided by Sabre ® AirVision TM Profit Essentials and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Appendix B Page 1 of 2 Traffic History *

Stn Ye ar Mo nth Inbound traf fic Outbound tr af fic To tal s ELD 2009 10 23 2 25 ELD 2009 11 70 59 129 ELD 2009 12 77 66 143 ELD 2010 1 77 72 149 ELD 2010 2 44 76 120 ELD 2010 3 88 82 170 ELD 2010 4 96 94 190 ELD 2010 5 99 102 201 ELD 2010 6 101 119 220 ELD 2010 7 116 127 243 ELD 2010 8 126 115 241 ELD 2010 9 200 120 320 ELD 2010 10 136 144 280 ELD 2010 11 89 69 158 ELD 2010 12 102 100 202 ELD 2011 1 92 83 175 2, 520 (1 2- months tr affice ndi ng 1/ 31/ 11)

Stn Ye ar Mo nth Inbound traf fic Outbound tr af fic To tal s HO T 2009 10 27 19 46 HO T 2009 11 34 38 72 HO T 2009 12 30 32 62 HO T 2010 1 34 41 75 HO T 2010 2 50 53 103 HO T 2010 3 51 54 105 HO T 2010 4 79 68 147 HO T 2010 5 56 56 112 HO T 2010 6 58 72 130 HO T 2010 7 62 71 133 HO T 2010 8 54 59 113 HO T 2010 9 115 105 220 HO T 2010 10 78 75 153 HO T 2010 11 52 47 99 HO T 2010 12 86 79 165 HO T 2011 1 60 62 122 1, 602 (1 2- months tr affice ndi ng 1/ 31/ 11)Appendix B Page 2 of 2 Traffic History (continued) Stn Ye ar Mo nth Inbound traf fic Outbound tr af fic To tal s HRO 2009 10 19 22 41 HRO 2009 11 128 111 239 HRO 2009 12 103 112 215 HRO 2010 1 94 113 207 HRO 2010 2 107 104 211 HRO 2010 3 113 116 229 HRO 2010 4 157 153 310 HRO 2010 5 112 103 215 HRO 2010 6 125 132 257 HRO 2010 7 121 110 231 HRO 2010 8 153 163 316 HRO 2010 9 253 242 495 HRO 2010 10 170 197 367 HRO 2010 11 130 144 274 HRO 2010 12 193 198 391 HRO 2011 1 158 143 301 3, 597 (1 2- months tr affice ndi ng 1/ 31/ 11)

Stn Ye ar Mo nth Inbound traf fic Outbound tr af fic To tal s JB R 2009 10 9 9 18 JB R 2009 11 21 28 49 JB R 2009 12 24 29 53 JB R 2010 1 24 37 61 JB R 2010 2 19 38 57 JB R 2010 3 28 45 73 JB R 2010 4 28 36 64 JB R 2010 5 36 37 73 JB R 2010 6 36 38 74 JB R 2010 7 29 43 72 JB R 2010 8 34 33 67 JB R 2010 9 65 58 123 JB R 2010 10 39 40 79 JB R 2010 11 36 61 97 JB R 2010 12 51 49 100 JB R 2011 1 43 30 73 952 (1 2- months tr affice ndi ng 1/ 31/ 11) ELD=El Dorado/Camden; HOT=Hot Springs; HRO=Harrison; JBR=Jonesboro *Source

– T
- 100 Market Report, Passengers in Schedule d Passenger Service ; Traffic figures reflect SeaPort Airlines only
.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
- o ff 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 ch anges 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 safel y operated; flights that overfly points for lack of traffic will not be compensated. In determining whether subsidy pay ment 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 mutuall y 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 regul ations, 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 [DA TE]
. The Government’s obligation for perform ance 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 payment 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 by 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 Scheduled Air Carriers, Contiguous US and Puerto Rico Air Greco/Wings Air Kenmore Air, Tim Brooks Air Sunshine, Inc. McCall Aviation, Dan Scott Air Sunshine, Mirmohammad Adili McCall Aviation, Michelle Air West, Inc., John Raatz Mesaba, John Spanjers Air Wisconsin, Annette Daly Mesaba, Max Shemesh Air Wisconsin, Jim Rankin MidStar Airlines, Jeffrey Fonner Airline Associates, Bill Mishk Midwest Airlines, Greg Aretakis Alaska Airlines, Jeff Cole MN Aviation, Jose Maldonado Alaska Airlines, Sandy Sinick Multi Aero, Darnea Allegiant Air, Brian Davis Multi Aero, Shane Storz American Airlines, Carl Nelson Northern Air Cargo, David Karp American Eagle, Jeffrey Hartz Northern Air Cargo, Eric Van Andel Atlantic Southeast, Jon Lindlief Northwest, Tim McDonald Atlantis Southeast, Roger Weston Northwest, Aaron Murray Aviation Technologies/Charter Air Transport NYDC, Henok Araya Bemidji Aviation, Cori Rude OST, Brian Swanson Bemidji Aviation, Arlen Rinkenberger OST, Dennis DeVany Cape Air, Andrew Bonney OST, Kevin Adams Cape Air, Dan Wolf OST, Kevin Schlemmer Cape Air, J. Flaherty OST, Michael Martin Classic Aviation, Tony Henderson Pacific Aviation Group, Craig Garrick Colgan Air, Mike Colgan Pacific Aviation Group, Ron Pye Colgan Air, Kevin Scott Pacific Wings, Frank Ford CommutAir, Andy Price Pacific Wings, Greg Kahlstorf CommutAir, Joel Raymond PenAir, Danny Se ybert Consultant, Robert Silverberg PenAir, Scott Bloomquist Continental, Bruce Keiner Pinnacle Airlines, Jennifer Gammill Continental, Dan Weiss Pinnacle Airlines, Megan Rosia Continental, Lorry Halloway Pinnacle Airlines, Phil Reed Delta, Anthony Canitano Pla nemasters, Inc. John Kessler Delta, Dan Shuman Pla nemasters, Inc. Paul Berliner Delta, Jeff Morgan Pla nemasters, Inc. Todd DeSimone Delta, Joe Esposito Raytheon, Mike Scheidt Delta, Karen Zachary Saab Group, Polly Prelinger Delta, Kristal Murphy Scenic, Mary Schneider Delta, Sascha Vanderbellen Scenic, Mitzi Daines DHS, Bill Ragan Seaborne Airlines, Shawn Lewis DHS, David Bernier SeaPort Airlines, Daniel Helland Dorado Jets SeaPort/Wings of Alaska , Jim Day Dorado Jets, Mark McKenna SeaPort/Wings of Alaska, Nate Vallier Era Aviation, Lori Goodman SeaPort/Wings of Alaska , Rob McKinney Executive Airlines, Kate Soled Shuttle America, Jerry Balsano Frontier Flying, Bob Hajducovich SkyWest, Brad Rawson Frontier, Daniel Shurz SkyWest, Eric Christensen Frontline Aviation SkyWest, Michael Thompson Gem Air, Dan Schroeder Sovereign Air, Bob Karns Gem Air, JoAnn Wolters Sovereign Air, Lois R. Barton Great Lakes, Chuck Howell Tatonduk, Robert Everts Great Lakes, Doug Voss Tatonduk, Robert Ragar Gulfstream, Dave Hackett Tradewind, Eric Zipkin Gulfstream, Mickey Bowman TransStates, Fred Oxley Gulfstream, T. Cooper TransStates, Gerry Wigmore Horizon Air, Dan Russo Transport Azumah, Joel Anabilah
- Azumah Horizon Air, Jennifer Thompson United, Alicia Gabriel Horizon Air, Mike McQueen United, James Starnes Horizon Air, Jeff Cole US Airways, Benjamin Slocum ICEPR, Luis Irizarry US Airways, Howard Kass Intrepid Internatl Air, Rick Eyk US Airways, Jason Reisinger Island Air Charters, Linda House Warbelows Air Ventures, Art Warbelow Jet Air, Daniel Wolford