Order 2013-12-5

Served: December 6, 2013

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 6th day of December, 2013

ORDER SELECTING CARRIER

Summary

By this Order, we are selecting SkyWest Airlines (SkyWest), to provide subsidized Essential 

Air Service (EAS) at Vernal and Moab, Utah, with 30-passenger Embraer Brasilia aircraft,

for the two-year period from January 1, 2014, through December 31, 2015. The annual 

subsidy rate for Vernal will be set at $1,415,696, and $2,303,347 for Moab, for a combined 

total of $3,719,043.1 See Appendix A for a map.

Background

By Order 2011-12-19 (December 23, 2011), the Department reselected Great Lakes Aviation,

Ltd. (Great Lakes), to provide subsidized EAS at Vernal and Moab utilizing 19-passenger 

Beech B-1900D aircraft, through December 31, 2013. Under that Order, Great Lakes 

provides Vernal with 12 weekly nonstop round trips to Denver for an annual subsidy rate of 

$1,299,194. At Moab, Great Lakes also provides 12 weekly nonstop round trips to Denver

for an annual subsidy rate of $1,816,486. The combined annual subsidy rate for both 

communities is $3,115,680.

In anticipation of the end of the current rate term, the Department issued Order 2013-6-19 

(June 26, 2013), soliciting proposals to provide EAS, with subsidy support if necessary, at 

Vernal and/or Moab. In response to our solicitation we received proposals from Great Lakes 

(the incumbent), SkyWest, and Boutique Air (Boutique).

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

Essential Air Service at:

VERNAL, UTAH

MOAB, UTAH

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

DOT-OST-1997-2706

DOT-OST-1997-2827
- 2 -

Proposals

The proposals are briefly summarized below. Full copies of the proposals and all public 

comments received can be accessed at www.regulations.gov by searching for docket DOTOST-1997-2706 (Vernal) or DOT-OST-1997-2827 (Moab).

Great Lakes

Great Lakes submitted two service options for Vernal and one for Moab. All service would 

be provided with twin-engine, 19-passenger Beechcraft 1900D aircraft. At Vernal, under its 

first service option, Great Lakes would provide two daily (12 weekly) nonstop round trips to

Denver for an annual subsidy of $1,297,615. Under its second service option, Great Lakes 

would provide three daily (18 weekly) nonstop round trips to Denver for an annual subsidy 

of $1,657,570. 

At Moab, Great Lakes would provide two daily (12 weekly) nonstop round trips to Denver 

for an annual subsidy of $1,798,772.

SkyWest

SkyWest submitted one proposal for each community. At both communities, SkyWest

would utilize twin-engine, 30-passenger Embraer Brasilia aircraft. At Vernal, SkyWest 

would provide two daily (12 weekly) nonstop round trips to Salt Lake City for an annual 

subsidy of $1,415,696. At Moab, SkyWest would also provide two daily (12 weekly) 

nonstop round trips to Salt Lake City for an annual subsidy of $2,303,347.

Boutique

Boutique submitted a proposal with seven service options, which are summarized in the 

below table. All service would be provided with single-engine, nine-passenger Pilatus PC-12 

aircraft. 

Option Round trips 

per week Routing Annual Subsidy

1

22 CNY-LAS

$4,302,201 22 CNY-SLC (via VEL)

22 VEL-SLC

22 VEL-LAS (via CNY)

1B

22 CNY-LAS

$5,103,672 22 CNY-DEN (via VEL)

22 VEL-DEN

22 VEL-LAS (via CNY)

2

18 CNY-LAS

$3,757,607 18 CNY-SLC (via VEL)

18 VEL-SLC

18 VEL-LAS (via CNY)

2B

18 CNY-LAS

18 CNY-DEN (via VEL) $4,427,784

18 VEL-DEN
- 3 -

18 VEL-LAS (via CNY)

3

12 CNY-LAS $3,140,636 12 CNY-DEN

12 VEL-SLC $1,677,669 12 VEL-DEN

4 18 CNY-SLC $1,709,560

18 VEL-SLC $865,470

5

18 CNY-DEN

$3,097,526 12 CNY-SLC (via VEL)

18 VEL-SLC

12 VEL-DEN (via CNY)

Community Comments

On July 26, 2013, we solicited community comments on the carrier-selection decision at 

Vernal and Moab. From Vernal, we received a letter of support for SkyWest from the Uintah 

County Commission, co-signed by Mayor Gary Showalter of Vernal City. From Moab, we 

received responses from the Grand County Council, Moab Mayor David Sakrison, the 

Canyon Fields Airport Board, and several other local, county, and state organizations and 

individuals supporting SkyWest’s proposed service. We also received several comments 

from individuals in Vernal in the oil and gas industry who did not support a change in hub 

from Denver to Salt Lake City.

Specifically, the Uintah County Commission stated that at a recent joint meeting of Uintah 

County and Vernal City officials, “a vote was taken and the group unanimously voted to 

request a change from Great Lakes to SkyWest for Essential Air Service.” Similarly, at 

Moab, the Grand County Council stated in their letter that “The Grand County Airport Board 

and Grand County Council have reviewed the [EAS] proposals submitted by SkyWest, Great 

Lakes, and Boutique Airlines. After considerable discussion, we strongly [emphasis in 

original] urge your office to accept the SkyWest Airlines EAS proposal.” We also received 

over 45 letters of support for SkyWest from various local businesses and individuals in the 

Moab community supporting SkyWest and highlighting Great Lakes’ recent reliability issues 

and how they have impacted them.

Finally, we also received a letter from Utah Governor Gary Herbert. The letter states:

“[t]he Moab community has a strong connection to Salt Lake City. The 

proposal from SkyWest Airlines to provide service to Salt Lake City 

International Airport under an existing operating agreement with Delta 

Airlines would allow seamless travel by tourists and locals alike. 

Additionally, the SkyWest proposal enjoys strong support from the local 

community, including local business owners, the chair of the Grand 

County Airport Board, and chair of the Grand County Council.”
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Decision

After careful consideration, including the comments of local officials, the Department has

decided to Select SkyWest to provide EAS at Vernal and Moab, in accordance with its 

proposal.

In examining the proposals, we first looked to Boutique. Boutique’s proposal did not receive 

support from either community. Nor does it have the codeshare and/or interline agreements 

with other carriers at the hub as SkyWest and Great Lakes offer. Additionally, the subsidy 

required by Boutique would be well in excess of that required by either of the other carriers

for similar capacity levels. Therefore, we will not select Boutique at either community.

Vernal

When selecting a carrier, 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 the 

hub; (3) interline arrangements with a larger carrier at the hub; (4) community views, giving 

substantial weight to the views of the elected officials representing the users, and;

(5) whether the carrier has included a plan to market its services to the community. In 

addition the Consolidated and Continuing Appropriations Act, 20122, 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. 

Both SkyWest and Great Lakes have long histories of providing EAS. Both carriers also 

have codeshare arrangements with major carriers at their respective hubs3 and interline 

agreements with most other carriers. While the subsidy required by SkyWest is slightly 

higher than that of Great Lakes, we find it to be reasonable for the level of service to be 

provided. Additionally, the community is firmly in support of SkyWest’s selection. We will 

therefore select SkyWest to provide EAS at Vernal, consistent with its proposal.

Moab

At Moab we face a similar situation where both carriers submitted competitive bids and we

must rely on the statutory criteria in order to select an EAS provider. Here again, community 

support was firmly behind SkyWest’s proposal. So much so in fact, that the community even 

offered to forego one round trip per week in order to reduce the subsidy requirement. 

We are concerned about the reliability issues that Moab has experienced with Great Lakes 

and its negative impacts on the community.4 As described earlier, the Department has 

received several letters from local businesses and community members specifically detailing 

the service issues with Great Lakes and how they have impacted them. Additionally, 

SkyWest has a greater ability to handle the steadily increasing traffic at Moab with its 30-seat 

aircraft. Furthermore, in addition to the statutory requirement that we give substantial weight 

 2 Public Law No. 112-55, and continued by the Full-Year Continuing Appropriations Act, 2013, Public Law 

No. 113-6, and the Continuing Appropriations Act, 2014, Public Law No. 113-46. 3 SkyWest codeshares with Delta at Salt Lake City, and Great Lakes codeshares with both United and Frontier 

at Denver.

4 Based on T-100 traffic data for the year-ended August 31, 2013, Great Lakes service between Moab and 

Denver has averaged only a 90% completion factor. This is much lower than it projected in its proposal (98%).
- 5 -

to the views of the elected officials in the community (which in this case unanimously 

support SkyWest’s proposal), our regulations also state that when selecting which hub 

service should be provided to, we consider the commercial, geographic, and political ties of 

the hub to the community.5 Whereas Salt Lake City is both the state capital of Utah and, as 

outlined in several of the community comments we received, has significantly more 

commercial ties to Moab than does Denver, it unquestionably has an advantage under this 

guideline. 

The Department recognizes that the relative subsidy requirements for SkyWest are higher 

than Great Lakes. However, in view of the strong community support for SkyWest, together 

with the factors discussed above, we will select SkyWest to provide EAS at Moab, consistent 

with its proposal.

The Department shall make SkyWest’s selection at Vernal and Moab 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.

Service Transition

We expect Great Lakes and SkyWest to work together to make a smooth transition at Vernal 

and Moab. In that regard, before Great Lakes suspends its service they must notify any 

passengers holding reservations for travel after the suspension date, and assist those 

passengers in making alternate air transportation arrangements, or provide a refund of the 

ticket price, without penalty, if requested.

Great Lakes’ current EAS contract at Vernal and Moab expires on December 31, 2013, and 

SkyWest may not be able to begin full EAS by then. In that event, consistent with 

established program policy, we typically use the incumbent air carrier’s prospective proposal 

that was submitted during the competitive bid process to establish a bridge rate until the new 

air carrier inaugurates service. After reviewing Great Lakes’ proposed rates for Vernal and 

Moab, we find that they appear reasonable for the proposed service levels. We will therefore 

establish those rates as the final rates for the air carrier’s service at Vernal and Moab for the 

period from January 1, 2014, until SkyWest inaugurates full EAS, but no later than January 

31, 2014.

Carrier Fitness

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

provide reliable service before we may subsidize it to provide essential air service. SkyWest 

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

to our attention that would cause us to question the carrier's fitness at this time. We have 

contacted the Federal Aviation Administration, and it has raised no concerns that would 

negatively affect our fitness finding. We therefore conclude 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).

 5 14 C.F.R. Part 398.2(c)(ii).
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ACCORDINGLY,

1. We select SkyWest Airlines to provide Essential Air Service at Vernal, UT, at the service

levels and subsidy rates as described in Appendix C, for the period from January 1, 2014, 

through December 31, 2015;

2. We select SkyWest Airlines to provide Essential Air Service at Moab, UT, at the service 

levels and subsidy rates as described in Appendix C, for the period from January 1, 2014, 

through December 31, 2015;

3. If SkyWest Airlines is not able to begin full Essential Air Service at Vernal or Moab, UT, 

by January 1, 2014, we will continue to provide subsidy to Great Lakes Aviation, Ltd., at the 

rates described in Appendix C, until such time as SkyWest Airlines inaugurates full Essential 

Air Service, but no later than January 31, 2014;

4. We direct 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 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 be retained. The carrier may forfeit its 

compensation for any claim that is not supported under the terms of this Order;

5. We direct Great Lakes Aviation, Ltd. 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 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 be retained. The carrier may forfeit its 

compensation for any claim that is not supported under the terms of this Order;
- 7 -

6. We find that SkyWest Airlines continues to be fit, willing and able to operate as a 

certificated air carrier and capable of providing reliable Essential Air Service at Vernal and 

Moab, UT;

7. These Dockets will remain open until further Order of the Department; and

8. We will serve copies of this Order on SkyWest, Great Lakes Aviation, Ltd., and Boutique

Air, as well as the mayors and airport managers of Vernal and Moab, UT.

By:

SUSAN L. KURLAND

Assistant Secretary for Aviation

and International Affairs

(SEAL)

An electronic version of this document is available at:

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

Page 1 of 4
APPENDIX B

Page 2 of 4
APPENDIX B

Page 3 of 4
APPENDIX B

Page 4 of 4
APPENDIX C

Page 1 of 4

SkyWest Airlines

Essential Air Service to be Provided at Vernal, Utah

DOT-OST-1997-2706

Effective Period: January 1, 2014 through December 31, 2015

Scheduled Service: 12 weekly nonstop round trips to Salt Lake City.

Aircraft type: Embraer EMB-120 Brasilia (30 passenger seats).

Annual compensation: $1,415,6961

Subsidy Rate per Flight: $1,1582

Weekly Ceiling: $27,7923

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 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.

Funds may not be available for performance under this Order beyond January 15, 2014. The Government’s 

obligation for performance under this Order beyond January 15, 2014, 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 15, 2014, until funds are made available to the Department 

for performance. If sufficient funds are not made available for performance beyond January 15, 2014, the 

Department will provide notice in writing to the carrier.

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.

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.

 1 See Appendix B.

2 $1,415,696 annual compensation divided by 1,223 annual flights (24 weekly flights x 52 weeks x 98% 

completion factor).

3 $1,158 per flight x 24 weekly flights.
APPENDIX C

Page 2 of 4

SkyWest Airlines

Essential Air Service to be Provided at Moab, Utah

DOT-OST-1997-2827

Effective Period: January 1, 2014 through December 31, 2015

Scheduled Service: 12 weekly nonstop round trips to Salt Lake City.

Aircraft type: Embraer EMB-120 Brasilia (30 passenger seats).

Annual compensation: $2,303,3471

Subsidy Rate per Flight: $1,8832

Weekly Ceiling: $45,1923

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 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.

Funds may not be available for performance under this Order beyond January 15, 2014. The Government’s 

obligation for performance under this Order beyond January 15, 2014, 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 15, 2014, until funds are made available to the Department 

for performance. If sufficient funds are not made available for performance beyond January 15, 2014, the 

Department will provide notice in writing to the carrier.

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.

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.

 1 See Appendix B.

2 $2,303,347 annual compensation divided by 1,223 annual flights (24 weekly flights x 52 weeks x 98% 

completion factor).

3 $1,883 per flight x 24 weekly flights.
APPENDIX C

Page 3 of 4

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at Vernal, Utah

DOT-OST-1997-2706

Effective Period: January 1, 2014 until SkyWest inaugurates full EAS at Vernal, UT, but no 

later than January 31, 2014.

Scheduled Service: 12 weekly nonstop round trips to Denver.

Aircraft type: Beechcraft 1900-D (19 passenger seats).

Annual compensation: $1,297,6151

Subsidy Rate per Flight: $1,0612

Weekly Ceiling: $25,4643

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 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.

Funds may not be available for performance under this Order beyond January 15, 2014. The Government’s 

obligation for performance under this Order beyond January 15, 2014, 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 15, 2014, until funds are made available to the Department 

for performance. If sufficient funds are not made available for performance beyond January 15, 2014, the 

Department will provide notice in writing to the carrier.

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.

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.

 1 See Appendix B.

2 $1,297,615 annual compensation divided by 1,223 annual flights (24 weekly flights x 52 weeks x 98% 

completion factor).

3 $1,061 per flight x 24 weekly flights.
APPENDIX C

Page 4 of 4

Great Lakes Aviation, Ltd.

Essential Air Service to be Provided at Moab, Utah

DOT-OST-1997-2827

Effective Period: January 1, 2014 until SkyWest inaugurates full EAS at Moab, UT, but no 

later than January 31, 2014.

Scheduled Service: 12 weekly nonstop round trips to Denver.

Aircraft type: Beechcraft 1900-D (19 passenger seats).

Annual compensation: $1,798,7721

Subsidy Rate per Flight: $1,4712

Weekly Ceiling: $35,3043

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 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.

Funds may not be available for performance under this Order beyond January 15, 2014. The Government’s 

obligation for performance under this Order beyond January 15, 2014, 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 15, 2014, until funds are made available to the Department 

for performance. If sufficient funds are not made available for performance beyond January 15, 2014, the 

Department will provide notice in writing to the carrier.

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.

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.

 1 See Appendix B.

2 $1,798,772 annual compensation divided by 1,223 annual flights (24 weekly flights x 52 weeks x 98% 

completion factor).

3 $1,471 per flight x 24 weekly flights.
APPENDIX C

Page 5 of 4