Order: 20 12

- 4

- 27

Served: April 20 , 20 1 2



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 20th day of April, 2012

Docket DOT

- OST

- 200 0

- 7138

ORDER REQUE STING PROPOSALS

Summary By this order

, the Department is requesting proposals from carriers interested in providing

E ssential A ir S ervice (EAS) at Huron, South Dakota , for a new two

- year period beginning October 1, 2012, with or without subsidy . Propos als are due May 15 , 2012 . ( See Appendix A for an area map.)

Background By Order 2010

- 8

- 12

, August 25, 2010

, the Department select ed Great Lakes Aviation, Ltd. , to
continue provid ing subsidized EAS at Huron, South Dakota, for the two

- year period from

Oct ober 1, 2010, through September 30, 2012, at an annual subsidy rate of $1,742,886.

Request for Proposals As the end of the current contract is approaching, in order to provide sufficient time to complete the

carrier

- selection process before the current contract expires, we are here requesting proposals from air carriers interested in providing EAS at Huron, with or without subsidy, for the period beginning October 1, 2012. Air carriers should file their proposals for Huron no later than May 15 , 2012

. A fter that date, our staff will docket proposals, thereby making them public, and direct each carrier to serve a copy of its proposal on the civic parties and other applicants. Shortly afterwards, we will Essential Air Service at

HURON, SOUTH DAKOTA

under 49 U.S.C. 41731 et seq.- 2

-

provide a summary of the proposals to the communit y and ask them to submit their final comments. We will give full consideration to all proposals that are timely filed. 1

Interested carriers should prepare their proposals with every expectation that 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 also retain the discretion to reject outright all unreasonab le or unrealistic proposals and solicit a new round of proposals. However, negotiation or rejections are only occasional exceptions to the rule.

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 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 proposal s that will facilitate their evaluation by the affected communities and the Department. 2

Proposals should offer service with sufficient capacity to accommodate historical levels of traffic, i.e. two round trips per day (12 a week) , using 19

- seat, twin

- eng ine aircraft , to Minneapolis/St. Paul,
Denver, or a ny suitable large or medium hub that provides access to the national air transportation system. In that regard, we recently received a letter from the Huron Airport Authority indicating that they would pr efer Minneapolis as their hub rather than the current service to Denver. If 8/9

- seat
aircraft are proposed, we would consider three round trips per day (18 a week). 3 Should the

communit y agree to single

- engine aircraft, in effect waiving their right to t win

- engine aircraft, we would consider the waiver to apply only to the two

- year carrier

- selection at hand, i.e. we would not assume that the community waives its rights for all time.

Of course, as always, we will formally solicit the community’s views on any service options we receive before making a long

- term carrier selection decision. The community and air carriers are encouraged to work together in advance of the due date for proposals to craft a service pattern that is

1 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide

essential air service witho ut subsidy and we determine that service can be reliably provided without such compensation, we typically do not proceed with the carrier

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

- free service as proposed.

2 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c) (1) dire cts 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 selec ted service. Appendix C of this order contains those general provisions.

3 Previously, most EAS communities were entitled to service with 15

- seat or larger aircraft. However, in the Department’s FY2012 appropriation (Consolidated and Further Continuing Appropriations Act, P.L. 112

- 55, November 18, 2011), Congress repealed the 15

- seat guarantee, although communities are still entitled to service with

twin

- engine aircraft.- 3

-

desirable to the community and meets the operational needs of the airline interested in submitting a proposal.

We encourage proposals that meet these requirements in an efficient manner. Carriers are also welcome to propose more than one option, if they choose; they need not limit t hemselves to those requirements if they envision other, potentially more attractive service possibilities

-- different hubs, for example

-- with subsidy requirements that remain competitive. Carrier proposals s hould be s ubmitted to the Department with all materials merged into a single

document. The document will be published on Regulations.gov and each page should be

formatted to be viewed online.

Service and Traffic History In order to assist carriers in making their traffic and revenue forecasts, we h ave included historical

traffic data in Appendix B for service years 2010, and 2011 , th e most recent period s for wh ich traffic

data are available for Huron, South Dakota. 4 For calendar year 20 11 , Huron generated 3,453 O&D

passengers, averaging 5.5 enplane ments a day.

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

- free workplaces, and nondiscrimination. 5 Consequently, all carriers receiving Federal subsidy for essent ial 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. 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 s elected 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. 6

Community and State Comments

The communit y and state 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 15 , 2012

, the du e date for proposals.

This O rder is issued under authority delegated in 49 CFR 1.56a(f) and re

- delegated to the Director, Office of Aviation Analysis.

4 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 service days.

5 The regulations applicable to these areas are: (1) 49 CFR Part 20

– New restrictions on lobbying; (2) 49 CFR Part

21

– Nondiscrimination in federally

- a ssisted 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 assista nce; 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).

6 The certificat ions are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.- 4

-

ACCORDINGLY,

1. We request that carriers interested in providing E ssential A ir S ervice at Huron, Sout h Dakota

, beginning October 1, 2012

, submit their proposals, with or without requests for subsidy, no later

than May 15, 2012

. The proposals should be e

- mailed to EAS@dot.gov , with the title: “Proposal

to Provide EAS at H uron , S D , Docket DOT

- OST

- 200 0

- 7138

. 7

2. Th is docket will remain open until further order of the Department;

3 . We will serve copies of this O rder on the Mayor of Huron, the airport manager of Huron Regional Airport , Great Lakes Aviation , Ltd., and the service list for this Docket.

P ersons entitled to petition the Department for review of this O rder under the Department’s Regulations, 14 CFR 385.50, must file such petitions within ten (10) days after the date of

service of this order.

This O rder 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 at http://www.regu lations.gov

7 Questions regarding filings in response to this order may be directed via e

- mail to Brooke Chapman at brooke.chapman@dot.gov or via phone at (202) 366

- 0577.Appendix A



## AREA MAP

This map is provided by Planet Profitability Forecasting System and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Historical Data at Huron, SD

Year Month Or igin Dest O&D

2010 1 140 129 269

2010 2 119 132 251

2010 3 149 165 314

2010 4 121 146 267

2010 5 138 178 316

2010 6 184 190 374

2010 7 216 219 435

2010 8 172 169 341

2010 9 156 173 329

2010 10 193 190 383

2010 11 202 211 413

2010 12 207 224 4 31

CY 2010 Totals 1997 2126 4123

2011 1 157 152 309

2011 2 142 146 288

2011 3 168 161 329

2011 4 140 157 297

2011 5 169 174 343

2011 6 155 218 373

2011 7 149 153 302

2011 8 145 157 302

2011 9 105 119 224

2011 10 92 129 221

2011 11 100 10 1 201

2011 12 132 132 264

CY 2011 Totals 1654 1799 3453

Average daily enplanements for CY 2011 were 5.5.

* Source

– T

- 100 Market Report, Passengers in Scheduled Passenger Service, includes traffic for Great Lakes, Ltd, onl y

.

**Average daily enplanements is total traffic for CY 2011 divided by 3 13 service days divided by 2 ( ( 3453 / 3 13) /2)

.Appendix D Example of General Terms and Conditions for Essential Air Service

The carrier understands that it may forfeit its compensation for any flights that it doe s 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 el igible 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 s uch 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 circumstance s 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 deter mining 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 com munity.

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 Departmen t 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

subsi dy 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 are not currently available for performance under this solicitation beyond [DATE].

The Go vernment’s obligation for perform ance 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.

Subsidy contrac ts 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

.

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