Order 2010-7-14

Served: July 16, 2010

DELTA STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 16th of July, 2010

Essential Air Service at

LAKE MINCHUMINA, ALASKA

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

DOCKET OST-2008-0237

ORDER RESELECTING CARRIER

Summary

By this order, the Department is selecting Warbelow’s Air Ventures, Inc., to provide essential air 

service (EAS) at Lake Minchumina, Alaska, at an annual subsidy rate of $62,400.

1 The selection 

extends from November 1, 2010, through October 31, 2012.

Background

Order 2008-9-21 selected Tatonduk Outfitters, Ltd., d/b/a Everts Air Cargo (Everts) to provide 

Lake Minchumina with one nonstop round trip per week to Fairbanks for 26 weeks with IFRequipped 9-seat Cessna 208 Caravan aircraft, and one round trip per week for 26 weeks with 

5-seat Piper PA-32 aircraft that are not so equipped, at an annual subsidy of $42,560.

2 In 

anticipation of the end of the current contract, by Order 2010-5-13 we requested proposals for 

replacement service, as follows: 

“For the most recent annual period, Lake Minchumina generated an average of 4.3 

deplaned passenger equivalents per week. In view of this level of traffic, we would also 

entertain proposals having two round trips per week with smaller, single-engine piston 

aircraft such as the PA-32 or one round trip per week with larger IFR-equipped aircraft 

such as the 9-seat Cessna 208.”

 

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

2 Instrument Flight Rule (IFR)-equipped aircraft can safely operate in weather conditions that aircraft limited to 

visual flight rule (VFR) conditions cannot.
- 2 -

We received proposals from three carriers, Everts -- the incumbent – Warbelow’s, and Wright 

Air Service, Inc., and requested comments from the community and state, with comments due 

July 1. On June 29 we received a request from the community for an extension of the comment 

period until July 10. We have received comments, and the issue is ripe for decision.

Carrier Proposals

Each of the carriers proposes nonstop service between Lake Minchumina and Fairbanks for a 

two-year period. Each of the carrier’s single-engine Cessna 208 Caravan turboprops and twinengine piston Piper Navajo PA-31 aircraft would be IFR equipped; all of the remaining singleengine piston aircraft are not so equipped.

Everts Air Cargo Everts proposes to provide, for the same weekly subsidy, either one round trip per 

week with a Cessna Caravan or, in the alternative, two round trips per week with a Piper PA-32 

Lance, for an annual subsidy of $74,928 

Warbelow’s Air Ventures

Option 1 26 weeks of peak and off-peak service. For the off-peak period, Warbelow’s would 

provide one round trip per week with a Cessna 206 aircraft, and during the peak period one round 

trip per week with either a Cessna Caravan or Piper Navajo. Warbelow’s requests $39,000 

annual subsidy for this level of service.

Option 2 An annual total of 78 annual round trips, 39 with a Cessna 206 and 39 with either a 

Cessna Caravan or Piper Navajo. Warbelow’s requests $58,500 annual subsidy for this level of 

service.

Option 3 Two round trips per week with a Cessna 206 aircraft. Warbelow’s requests $62,400 

annual subsidy for this level of service.

Option 4 One round trip per week with a Cessna Caravan aircraft. Warbelow’s requests $46,800 

annual subsidy for this level of service.

Wright Air Service

Option 1 One round trip per week with either a Cessna Caravan or Piper Navajo. Wright 

requests $67,600 annual subsidy for this level of service. 

Option 2 The service in Option 1 would be supplemented with a Cessna 206 aircraft operating 

once a week. In other words, the community would receive a total of two round trips each week, 

one with IFR-equipped aircraft and one with single-engine piston aircraft. Wright requests

$93,080 annual subsidy for this service. 
- 3 -

Community Comments

We solicited comments from the Lake Minchumina Homeowner’s Association and State of 

Alaska’s office of Statewide Aviation. The State of Alaska did not favor a particular carrier, but 

expressed its support for the EAS program. 

We received comments on July 6 from two Lake Minchumina residents, Mr. Dennis Hannan and 

Ms. Lisa Griffiths, favoring Wright Air Service and specifically Wright Option 2, two round trips 

a week for $93,080 annual subsidy. 

“And based on our personal experience with all three bidding airlines, Wrights, in our 

opinion, is far and away the most reputable, reliable, friendly and accommodating. 

Wrights also knows the community well. Based on past transactions, as well as word of 

mouth, we harbor the upmost confidence in their commitment to customer satisfaction. 

Likewise, we also favor the 2 day a week option believing that the community's 

economic viability will improve significantly with more frequent (and reliable) mail and 

travel opportunities.”

We received initial comments on June 28 from Mr. Thomas Green, Vice President of the Lake 

Minchumina Homeowner’s Association supporting the selection of Wright Air Service and 

Wright’s Option 2. However, at the request of Mr. Green, we issued a notice extending the 

deadline for comments until July 10. We received additional comments from Mr. Green on 

July 11. In its latest comments, the community reversed its earlier recommendation to now favor 

Warbelow’s, either Option 2 or 3. 

“Warbelow’s came out after we held a community meeting and we were impressed with 

their detailed submission and options and their interest in helping the community with 

ideas to help with employment and growth if it so desired. Art was also informative 

about what they did in other communities and the EAS workings, though recognizing 

each community is different. We also especially appreciated facts right away about their 

proposed lower air fares and freight costs as these are a prime consideration for us here 

trying to survive as 3rd generation Minchuminites with a cabin rental business. Costs 

are a major factor as well as dependability, safety, and times that fit peoples travel 

schedules as well as hauling our mail in a timely manner. The awareness of what 

customer service means is essential. ...on a second call [to Wrights] I was given 

detailed fare and freight rates by Bob Bursiel that were later faxed to us during our 

meeting and that were also lower than Everts but higher than Warbelow’s, though we 

understand all [of the carriers’ fares] can change as they see fit.

After reviewing the information we feel Warbelow’s option #2 or 3 is our first choice to 

meet our needs and Wrights #1 as a second choice since you requested different carriers. 

We feel lower fares and working with our businesses are critical to increased traffic and 

a sustainable business and played a huge part in our move to charter more over the past 

two years as a community. The next option we need is the availability of occasional 

IFR aircraft as weather indicates to keep people moving... .”
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Decision

The selection of Warbelow’s is straightforward. While there is some community support for 

Warbelow’s and some for Wright Air Service, the support for Warbelow’s is from the 

Homeowner’s Association,3 while the support for Wright is from two individual residents. 

Moreover, either of Warbelow’s two options favored by the homeowner’s association is less 

expensive than either of Wright’s Options.

Between those two Warbelow’s options, we will select Warbelow’s Option 3: two round trips per 

week, 104 round trips per year, with a Cessna 206 aircraft for $62,400 annual subsidy. This 

option is slightly more expensive than the equally favored Option 3, 78 round trips per year, 39 

weeks each year with an IFR aircraft and 39 with a VFR aircraft.

4 

We will select Option 3, which entails slightly more subsidy. Option 2 contemplates a 13-week 

period each year when there would only be one round trip per week with a VFR aircraft. 

Option 3, on the other hand, will provide the greater reliability of two round trips a week year 

round. In addition, we will permit Warbelow’s to substitute, as necessary, a single round trip 

with an IFR-equipped aircraft (Piper Navajo or a Cessna Caravan) for two round trips with a 

Cessna 206 and receive the same level of compensation, further enhancing the reliability of this 

option.

Carrier Fitness

49 U.S.C. 41737(b) requires that DOT find an air carrier fit, willing, and able to provide reliable 

service before DOT may subsidize it to provide essential air service. Warbelow’s Air Ventures, 

Inc., 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. DOT has 

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

affect our fitness findings. DOT therefore concludes that the carrier remains fit to conduct the 

operations proposed here.

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 select Warbelow’s Air Ventures, Inc., to provide essential air service at Lake 

Minchumina, Alaska, as described in Appendix B;

 

3 It appears that the community support is due, in part, to promises from Warbelow’s that it will offer low fares. 

However, the community recognizes, consistent with our request for comment, that such promises can only be 

tentative, and that the Department cannot require the carrier to maintain any specified fare level.

4 In other words, there would be three levels of service during each annual period: a peak period of two round trips 

per week, one with IFR aircraft and one with VFR aircraft; a shoulder period with IFR-only aircraft; and an off-peak 

period of VFR-only aircraft. 
- 5 -

2. We direct Warbelow’s Air Ventures, Inc., 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;

3. We find that Warbelow’s Air Ventures, Inc., continues to be fit, willing and able to operate as 

a certificated carrier and capable of providing reliable essential air service at Lake Minchumina, 

Alaska; 

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

5. We will serve copies of this order on the Office of Statewide Aviation of the Alaska 

Department of Transportation and Public Facilities, Everts Air Cargo, Inc., Wright Air Service, 

inc., and Warbelow’s Air Ventures, Inc., and the community of Lake Minchumina.

By:

TODD M. HOMAN

Director

Office of Aviation Analysis

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
Appendix A

Distance to Fairbanks 

LMA, Lake Minchumina 148 

MNT, Minto 50 

MLY, Manley Hot Springs 83 

RMP, Lake Minchumina 82 

CEM, Central 104 

IRC, Circle 131 

SVS, Stevens Village 90

ANC, Anchorage 261

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

Wright Airlines, Inc., Essential Air Service to be Provided to 

Lake Minchumina, Alaska, Dockets OST-2008-0237

Effective Period: October 1, 2010, through September 30, 2012.

Scheduled Service: Two nonstop round trips per week to Fairbanks.

Aircraft: 4-seat Cessna 2061

Rate per Eligible Flight: $3002

Weekly Ceiling: $1,2003

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 this rate, 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 contract 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 order beyond September 30, 2010. The Government’s 

obligation for performance under this order beyond September 30, 2010, is subject to 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 September 30, 2010, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 30, 2010, the 

Department will provide notice in writing to the carrier.

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

 

1 For payout purposes, we will assign 9 seats to Piper Navajo or Cessna 208 aircraft.

2 Annual compensation of $62,400 divided by the estimated annual completed departures and arrivals: 

4 flights/week x 52 weeks = 208 total.

3 4 flights/week x $300.