Order 2012-5-16

Served: May 17, 2012

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 May, 2012

Essential Air Service at

VICTORIA, TEXAS

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

DOCKET DOT-OST-2005-20454

 

ORDER REQUESTING PROPOSALS

Summary

By this Order, the Department is requesting a second round of proposals from airlines

interested in providing Essential Air Service (EAS) at Victoria, TX, with or without subsidy, 

for a new rate term. Proposals are due by June 6, 2012. (See Appendix A for a map.)

Background

By Order 2009-6-10, June 11, 2009, the Department selected Colgan Air, Inc., operating as 

Continental Connection (Colgan), to provide EAS at Victoria, TX, for the period from

July 1, 2009, through June 30, 2011, for an annual subsidy of $1,593,922 for 13 nonstop round 

trips per week to Houston-Bush Intercontinental Airport. Continental Airlines was 

subsequently merged into United Airlines and, in late 2011, Continental Connection service 

was rebranded as United Express (Colgan).

On March 8, 2012, Colgan filed notice of its intent to terminate subsidized service at seven 

EAS communities, including Victoria. The Department issued Order 2012-3-14, 

March 23, 2012, prohibiting Colgan from suspending service at all seven communities and 

requesting proposals. In response, we received only one proposal for Victoria, that from 

SeaPort Airlines, Inc. (SeaPort), which proposed service with single-engine aircraft. On 

May 14, 2012, the community submitted comments refusing to waive their right to twin-engine 

aircraft and requesting that we rebid the case. Given that 49 U.S.C. 41732(b)(5) entitles 

communities to EAS with twin-engine aircraft, we have no choice but to reject SeaPort’s 

proposal and solicit another round of proposals that meet the minimum EAS statutory 

requirements. 
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Request for Proposals

Air carriers should file their proposals no later than June 6, 2012. After that date, our staff will 

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

of the proposals to the community and ask them for their final comments. We will give full 

consideration to all proposals filed in a timely manner. 

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 

proposals with carriers when we deem it desirable. We also retain the discretion to reject 

outright all unreasonable or unrealistic proposals and solicit a new round of 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. 

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. 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.1

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 communities 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.

Proposals should provide sufficient capacity to accommodate historical levels of traffic. In 

order to assist carriers in developing traffic and revenue projections for their proposals, we 

have provided a summary of historical passengers in Appendix B. During the year ended 

December 31, 2011, Victoria averaged 16 enplanements per day. We expect service levels that 

are consistent with what the community currently receives, with service to George Bush 

Intercontinental Airport (Houston), Dallas-Fort Worth International Airport (Dallas), or any

medium- or large-hub airport that offers access to the national air transportation system

utilizing twin-engine aircraft. Specifically, two round trips a day (12 a week) with 30-seat or 

larger aircraft; or three round trips a day (18 a week) with 19-seat aircraft. We will also 

consider proposals with 8/9-seat aircraft with additional frequencies. Should the community

 1 In selecting a carrier to provide subsidized 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 EAS 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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agree to single-engine aircraft, in effect waiving their right to single-engine aircraft, we would 

consider the waiver to apply only to the length of the contract term at hand, i.e. we would not 

assume that the community would waive their rights for all time. As always, we will formally 

solicit the community’s views on any service options we receive before making a long-term 

carrier selection decision. 

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces and nondiscrimination.2 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.3

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 June 6, 2012 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 Aviation Analysis.

ACCORDINGLY,

1. We request that carriers interested in providing essential air service at Victoria, Texas,

submit their proposals, with or without subsidy requests, no later than June 6, 2012. The 

proposals should be emailed to: EAS@dot.gov with the title “Proposal to Provide Essential Air 

Service at Victoria, Texas”;4

2. This docket will remain open until further order of the Department; and

 2 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 (nonprocurement) and government-wide requirements for drug-free workplace (grants).

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

4 Questions regarding filings in response to this order should be directed to Michael Martin at 202-366-6494, or 

via email at michael.f.martin@dot.gov.
3. The Department will serve a copy of this order on the Mayor and Airport Manager of 

Victoria; Colgan Air, Inc. (Colgan), and the service list for this Docket.

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

Aviation Economic Regulations, 14 CFR 385.50, 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 of Aviation Analysis

(SEAL)

An electronic version of this document is available online at

www.regulations.gov
Appendix A

Area Map
APPENDIX B

Historical Origin-Destination Plane Traffic1

Victoria, Texas

Quarter Year Deplanements Enplanements

Total 

Traffic

Enplanements 

per Day

1 2009 1,274 1,333 2,607 17

2 2009 1,405 1,473 2,878 18

3 2009 1,406 1,447 2,853 18

4 2009 1,346 1,372 2,718 17

Annual 

Totals 5,431 5,625 11,056 18

1 2010 1,095 1,208 2,303 15

2 2010 1,270 1,303 2,573 16

3 2010 1,246 1,260 2,506 16

4 2010 1,314 1,267 2,581 16

Annual 

Totals 4,925 5,038 9,963 16

1 2011 920 1,028 1,948 13

2 2011 1,325 1,373 2,698 17

3 2011 1,391 1,447 2,838 18

4 2011 1,400 1,350 2,750 17

Annual 

Totals 5,036 5,198 10,234 16

 1 Source: USDOT Bureau of Transportation Statistics, TransStats Intermodal Database, Schedule T-100.
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 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.

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 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 

funds are not made available for performance beyond [DATE], the carrier will receive notice in 

writing by the Department.

All claims for payment must be submitted within 60 days of the last day of service provided 

under this order.