Order 2015-1-5

Served: January 5, 2015

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 5th day of January, 2015

ORDER RESELECTING CARRIER 

Summary

By this Order, the Department is reselecting SkyWest Airlines (SkyWest), operating as Delta 

Connection, to provide subsidized Essential Air Service (EAS) with 50-passenger Canadair 

Regional Jet 200 (CRJ200) aircraft, between each of the four communities captioned above

and the Minneapolis-St. Paul International Airport (MSP), for the two-year period from 

February 1, 2015, through January 31, 2017. The annual subsidy rates will be set at 

$2,970,122 for Iron Mountain/Kingsford (Iron Mountain), Michigan, $1,671,602 for 

Brainerd, Minnesota, $2,197,037 for International Falls, Minnesota, and $2,050,889 for 

Rhinelander, Wisconsin, for a combined total of $8,889,650. See Appendix A for a map.

Background

By Order 2012-9-11, issued on September 11, 2012, the Department selected SkyWest to 

provide EAS at Iron Mountain,, Brainerd, International Falls, and Rhinelander, for the two 

year period beginning when the carrier initiated full-EAS at all four communities. SkyWest 

inaugurated service at Brainerd, International Falls, and Iron Mountain on December 15, 

2012, and at Rhinelander on January 4, 2013, thus setting the contract expiration as 

January 31, 2014. Under that Order, SkyWest provides each of the communities with service

as summarized in the following table.

Essential Air Service at

IRON MOUNTAIN/KINGSFORD, MICHIGAN;

BRAINERD, MINNESOTA;

INTERNATIONAL FALLS, MINNESOTA; and

RHINELANDER, WISCONSIN

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

 DOT-OST-1999-5175

 DOT-OST-2011-0135

 DOT-OST-2009-0304

 DOT-OST-2011-0109
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Community Round Trips per 

Week1 Aircraft Annual Subsidy

Iron Mountain, MI 13 

(7 nonstop, 6 one-stop)

50-seat CRJ-200

$2,512,971

Rhinelander, WI 14 nonstop $1,519,619

International Falls, MN 12 

(7 nonstop, 5 one-stop) $1,107,900

Brainerd, MN 12 nonstop $1,356,764

On August 14, 2014, the Department issued Order 2014-8-10, requesting proposals from 

carriers interested in providing EAS at any or all of the communities for a new contract 

period. In response to that request, the Department received one proposal, from SkyWest, 

the incumbent. A copy of the proposal, along with all public comments received, may be 

accessed online through the Federal Docket Management System at: www.regulations.gov, 

by searching for docket “DOT-OST-1999-5175” (Iron Mountain), “DOT-OST-2011-0135” 

(Brainerd), “DOT-OST-2009-0304” (International Falls), or “DOT-OST-2011-0109” 

(Rhinelander).

Proposal of SkyWest Airlines

SkyWest submitted a service proposal for all four communities. All service would be 

provided to MSP and would be operated with a Delta Air Lines code-share, utilizing

Canadair Regional Jet 200 (CRJ200) aircraft with 50 passenger seats. The service to be 

provided each community and the associated subsidy requirements are summarized in the 

table below:

Community Round Trips per 

Week1 Aircraft Annual Subsidy

Iron Mountain, MI 13 

(7 nonstop, 6 one-stop)

50-seat CRJ-200

$2,970,122

Rhinelander, WI 14 nonstop $2,050,889

International Falls, MN 12 

(7 nonstop, 5 one-stop) $2,197,037

Brainerd, MN 12 nonstop $1,671,602

Community Comments

On October 2, 2014, the Department sent correspondence to the airport managers and other 

civic officials of the four communities summarizing the proposal and requesting comments 

on the carrier-selection decision.

In response, the Department received comments from numerous potential EAS customers, 

civic and elected officials, including the Dickinson County Board of Commissioners, the 

Crow Wing County Board of Commissioners, the Mayor of Brainerd, the President of the 

Brainerd City Council, Brainerd Lakes Regional Airport Commission, the Brainerd Lakes 

Area Economic Development Corporation, and the Rhinelander/Oneida County Airport. All 

of the parties strongly endorsed SkyWest, many noting the excellent service it has provided 

the communities and its reliable on-time performance. 
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Decision on Carrier Selection

The decision in this case is straightforward. SkyWest was the only carrier to submit a 

proposal. SkyWest has been providing reliable EAS at these communities for nearly two 

years and it has received community support for its reselection. As such, the Department has 

decided to reselect SkyWest to provide EAS between each of the four communities captioned 

above and MSP, in accordance with its proposal, for the two-year period from

February 1, 2015, through January 31, 2017. The annual subsidy rates will be set at 

$2,970,122, $1,671,602, $2,197,037, and $2,050,889 at Iron Mountain, Brainerd, 

International Falls, and Rhinelander, respectively, or a combined total of $8,889,650.

The Department is, nonetheless, concerned with the level of subsidy SkyWest requires, 

which has increased substantially. We expect the communities to proactively work with 

SkyWest in order to maximize passenger levels and revenue thus, potentially reducing

subsidy levels in future years.

The Department shall make this selection at the four communities contingent upon the 

Department’s receiving properly executed certifications from SkyWest that it is in 

compliance with the Department’s regulations regarding drug-free workplaces and 

nondiscrimination, as well as the regulations governing 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 

essential air service. SkyWest is subject to the Department’s continuing fitness requirements, 

and no information has come to the Department’s attention that would cause the Department

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 the 

Department’s 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 Part 1.25a(b).

ACCORDINGLY,

1. The Department reselects SkyWest Airlines to provide Essential Air Service at Iron 

Mountain/Kingsford, Michigan, Brainerd and International Falls, Minnesota, and 

Rhinelander, Wisconsin, and establishes the service levels and subsidy rates as described in 

Appendix C;

2. The Department directs SkyWest Airlines 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 service date of this Order or until the Department indicates that the records may be 

destroyed, whichever comes first. Copies of flight logs for aircraft sold or disposed of must 
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be retained. The carrier may forfeit its compensation for any claim that is not supported 

under the terms of this order;

3. The Department finds that SkyWest Airlines, continues to be fit, willing and able to 

operate as a certificated air carrier and capable of providing reliable EAS at Iron 

Mountain/Kingsford, Michigan, Brainerd and International Falls, Minnesota, and 

Rhinelander, Wisconsin;

4. These Dockets will remain open until further order of the Department; and

5. The Department will serve copies of this Order on the mayors of Iron Mountain and 

Kingsford, Michigan, Brainerd, Minnesota, International Falls, Minnesota, Rhinelander, 

Wisconsin, the airport managers at Ford Airport (Iron Mountain/Kingsford), Brainerd Lakes 

Regional Airport, Falls International Airport (International Falls), and Rhinelander/Oneida 

County Airport, and the service list for this docket.

By:

BRANDON M. BELFORD

Deputy Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at:

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

AREA MAP

Maps generated by the Great Circle Mapper - copyright © Karl L. Swartz
Appendix B

Proposal of SkyWest Airlines

Essential Air Service at

Iron Mountain/Kingsford, Michigan, International Falls and Brainerd, Minnesota, 

and Rhinelander, Wisconsin
Appendix C

Page 1 of 2

SkyWest Airlines

Provision of Essential Air Service at

Iron Mountain/Kingsford, Michigan, Rhinelander, Wisconsin, and International Falls and 

Brainerd, Minnesota

Summary of Service To Be Provided

Effective Period: February 1, 2015 through January 31, 2017

Scheduled Service: Iron Mountain/Kingsford: 7 nonstop and 6 one-stop (at 

Rhinelander, Wisconsin) round trips each week to MSP.

Rhinelander: 14 nonstop round trips each week to MSP.

International Falls: 7 nonstop and 5 one-stop (at Hibbing, 

Minnesota) round trips each week to MSP.

Brainerd: 12 nonstop round trips per week to MSP.

Aircraft type: Canadair Regional Jet 200 (CRJ200) – 50 passenger seats

Annual compensation:1 Iron Mountain/Kingsford: $2,970,122

Rhinelander: $2,050,889

International Falls: $2,197,037

Brainerd: $1,671,602

Subsidy Rate per Flight:2 Iron Mountain/Kingsford: $2,242

Rhinelander: $1,437

International Falls: $1,796

Brainerd: $1,367

Weekly Compensation 

Ceiling:3

Iron Mountain/Kingsford: $58,292

Rhinelander: $40,236

International Falls: $43,104

Brainerd: $32,808

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 

 1 See Appendix B.

2 Annual Compensation divided by annual flights. Carrier proposal assumes a 98% completion factor which is 

applied here.

3 Subsidy rate per flight multiplied by weekly flights (26 at Iron Mountain, 28 at Rhinelander, 24 at International 

Falls, and 24 at Brainerd).
Appendix C

Page 2 of 2

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 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.