Order: 2015-1-12

Served: January 13, 2015

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 13th of January, 2015

Essential Air Service at

FORT LEONARD WOOD, MISSOURI

Under 49 U.S.C. § 41731 et seq.

 Docket DOT-OST-1996-1167

ORDER RESELECTING CARRIER

Summary

By this Order, the Department is reselecting Hyannis Air Service, Inc. d/b/a Cape Air (Cape Air) 

to provide Essential Air Service (EAS) at Fort Leonard Wood, Missouri, for the four-year period 

beginning January 1, 2015, through December 31, 2018, at an annual subsidy of $1,631,476 in 

the first year. An additional $1,197,682 in annual subsidy may be paid in the first year if

freighter flights are used to transport luggage to/from Fort Leonard Wood, for a maximum total 

first-year subsidy of $2,829,158.1,2

Background

By Order 2012-11-35, November 30, 2012, the Department reselected Cape Air to provide EAS 

at Fort Leonard Wood for the two-year period from January 1, 2013, through December 31, 

2014. Under that Order the carrier operates four daily nonstop round trips to Lambert-St. Louis 

International Airport (STL), with 9-passenger Cessna 402 aircraft. Fort Leonard Wood 

experiences a significant number of passengers deploying to or returning from active duty 

military service, many of whom are carrying heavy loads of military equipment and supplies. 

Due to the operational limitations of the Cessna 402, Cape Air operates freighter service when 

necessary. In anticipation of the expiration of that contract, the Department issued Order 2014-

7-9, July 1, 2014, soliciting proposals from carriers interested in providing EAS at Fort Leonard 

Wood for a new contract period beginning January 1, 2015. 

 1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds.

2 Annual subsidy amounts (passenger and freighter flights) will increase 4% per year through the life of the contract. 

See Appendix B for Cape Air’s full proposal and Appendix C for the payout calculations.
Proposals

In response to that Order, the Department received proposals from two carriers: Cape Air, the 

incumbent, and Multi-Aero, Inc. d/b/a Air Choice One (Air Choice One). The proposals are 

summarized below. The complete proposals of both carriers, along will all public comments, 

may be accessed online at: http://www.regulations.gov by entering DOT-OST-1996-1167 in the 

search box.

Cape Air

Cape Air proposes to maintain its existing service level at Fort Leonard Wood. Cape Air would 

provide four daily (28 weekly) nonstop round trips to STL, utilizing twin-engine, nine passenger 

Cessna 402 aircraft. As is currently the case, Cape Air would also operate freighter service to 

accommodate passenger luggage demand, when needed. Passenger service would be operated 

for a first-year annual subsidy of $1,687,484 for a two-year contract, or $1,631,476 in the first 

year of a four-year contract. Freighter service would be used only on an as-needed basis and its 

subsidy would be capped at $1,197,682 in the first year, regardless of the length of contract.3

Air Choice One

Air Choice One proposed to provide 28-weekly nonstop round trips to STL. Service would be 

provided on nine-passenger, single-engine Cessna Grand Caravan aircraft, for a two-year term. 

Air Choice One would require an annual subsidy of $2,177,417.

Community Comments

On August 28, 2014 and September 5, 2014, the Department received comments from the 

mayors of Saint Robert, MO, and Waynesville, MO, respectively. Both mayors expressed 

support for Cape Air and recommended that it be reselected for a four-year term. 

Additionally, on September 18, 2014, the Department received comments from Ms. Darlene 

Battle, Installation Transportation Officer at Fort Leonard Wood. Ms. Battle states that Fort 

Leonard Wood also recommends the reselection of Cape Air, stating that “Cape Air has 

continued to maintain quality service and have increased ridership immensely... Their on-time 

and success rates far exceed typical airlines standards and professes encouragement with 

confidence in meeting our traveling needs to and from the St. Louis Lambert Airport.”

Other Comments

In a letter to the Department dated August 13, 2014, American Airlines (American) states that it

“enthusiastically supports” Cape Air’s proposal to serve Fort Leonard Wood with the American 

codeshare which allows Fort Leonard Wood customers to seamlessly book travel on American’s 

worldwide network.

Decision

When selecting a carrier to provide EAS, 49 U.S.C. §41733(c)(1) directs us to consider five

factors: (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at 

 3 Subsidy requests for both passenger and freighter service are subject to an annual 4% increase through the life of 

the contract. Freighter flights are capped at 70% usage.
the hub; (3) interline arrangements with a larger carrier at the hub; (4) community views; and (5) 

the carrier’s plan to market its service to the community. In addition, the Continuing 

Appropriations Act, 2014, Public Law No. 113-46, provides that when selecting a carrier to 

provide EAS, the Department may consider the relative subsidy requirements, thus codifying a 

factor that the Department has considered since the inception of the program. 

After careful consideration of the proposals and the comments of local officials, the Department 

has decided to reselect Cape Air. Cape Air has been providing reliable EAS at Fort Leonard 

Wood for almost four years. It has received the unanimous support of both the military 

installation and the surrounding communities and the Department finds its proposed service level 

and subsidy request to be reasonable. Therefore, the Department will reselect Cape Air to

continue providing EAS between Fort Leonard Wood and STL, in accordance with its proposal,

for the four-year period from January 1, 2015, through December 31, 2018.4

The Department shall make this selection contingent upon the Department’s receiving properly

executed certifications from Cape Air that it is in compliance with the Department’s regulations 

regarding drug-free workplaces and nondiscrimination, as well as the regulations concerning 

lobbying activities.

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that the Department find an air carrier fit, willing, and 

able to provide reliable service before the Department may subsidize it to provide EAS. Cape 

Air is subject to the Department’s continuing fitness requirements, and no information has come 

to the Department’s attention that would cause us to question the carrier's fitness at this time. 

The Department has contacted the Federal Aviation Administration, and it has raised no concerns 

that would negatively affect our fitness finding. The Department therefore concludes that the 

carrier remains fit to conduct the operations proposed here.

This order is issued under authority delegated in 49 CFR 1.25a(b).

ACCORDINGLY,

1. The Department reselects Hyannis Air Service, Inc. d/b/a Cape Air to provide Essential Air 

Service at Fort Leonard Wood, Missouri for the four-year period beginning January 1, 2015, 

through December 31, 2018;

2. The Department sets the final rates of compensation for Hyannis Air Service, Inc. d/b/a Cape 

Air for the provision of Essential Air Service at Fort Leonard Wood, Missouri, as described in 

Appendix C;

3. The Department directs Hyannis Air Service, Inc. d/b/a Cape Air to retain all books, records, 

and other source and summary documentation to support claims for payment, and to preserve 

and maintain such documentation in a manner that readily permits its audit and examination by 

representatives of the Department. Such documentation shall be retained for seven years from 

the date of service of the Order or until the Department indicates that the records may be 

 4 Subsidized freighter flights are subject to the same record keeping and auditing requirements as passenger flights.
destroyed, whichever comes first. Copies of flight logs for aircraft sold or disposed of must be 

retained. The carrier may forfeit its compensation for any claim that is not supported under the 

terms of this order;

4. The Department finds that Hyannis Air Service, Inc. d/b/a Cape Air continues to be fit, 

willing and able to operate as a commuter carrier and capable of providing reliable Essential Air 

Service at Fort Leonard Wood, Missouri;

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

6. The Department will serve copies of this Order on the mayors of Waynesville and Saint 

Robert, Missouri, personnel at Fort Leonard Wood, the airport manager of Waynesville-St.

Robert Regional Airport, Hyannis Air Service, Inc. d/b/a Cape Air, and Multi-Aero, Inc. d/b/a 

Air Choice One.

By:

BRANDON M. BELFORD

Deputy Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available 

online at http://www.regulations.gov
Appendix A

AREA MAP

This map is provided by Sabre® AirVisionTM Profit Essentials and is being used with express permission of the copyright holder, 

Sabre Airline Solutions®.
Appendix B

Hyannis Air Service, Inc. d/b/a Cape Air

Proposal to serve Fort Leonard Wood
Appendix C

Page 1 of 2

Hyannis Air Service, Inc. d/b/a Cape Air

Essential Air Service to be Provided at Fort Leonard Wood, Missouri

Effective Period: January 1, 2015 through December 31, 2018.

Scheduled Service: 28 weekly nonstop round trips to St. Louis.

Aircraft: Cessna 402 - 9 passenger seats or freighter.

Annual Subsidy:1 Passenger Freighter

January 1, 2015 - December 31, 2015: $1,631,476 $1,197,682

January 1, 2016 - December 31, 2016: $1,696,735 $1,245,590

January 1, 2017 - December 31, 2017: $1,764,605 $1,295,413

January 1, 2018 - December 31, 2018: $1,835,189 $1,347,230

Rate per Flight:2

January 1, 2015 - December 31, 2015: $578 $591

January 1, 2016 - December 31, 2016: $601 $614

January 1, 2017 - December 31, 2017: $625 $639

January 1, 2018 - December 31, 2018: $650 $664

Weekly Ceiling:3

January 1, 2015 - December 31, 2015: $32,345 $23,032

January 1, 2016 - December 31, 2016: $33,639 $23,954

January 1, 2017 - December 31, 2017: $34,984 $24,912

January 1, 2018 - December 31, 2018: $36,384 $25,908

Note: 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 

 1 See Appendix B.

2 Annual subsidy divided by annual flights (28 flights per week x 2 directions x 52 weeks x 97% completion factor 

= 2,825).

3 56 weekly flights multiplied by rate per flight.
Appendix C

Page 2 of 2

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 may not be available for performance under this Order beyond January 14, 2015. The Government’s 

obligation for performance under this Order beyond January 14, 2015, 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 January 14, 2015, until funds are made available to the Department for 

performance. If sufficient funds are not made available for performance beyond January 14, 2015, the Department 

will provide notice in writing to the carrier. 

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.