Order 2012-4-13

Served: April 10, 2012

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 10th day of April, 2012

Essential Air Service at

EXCURSION INLET, ALASKA

KAKE, ALASKA

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

DOCKET DOT-OST-2002-12014

DOCKET DOT-OST-2008-0217 

ORDER REQUESTING PROPOSALS

Summary

By this Order, the Department is requesting proposals from airlines interested in providing 

Essential Air Service (EAS) at Excursion Inlet and Kake, Alaska, for a new rate term beginning 

September 1, 2012, with or without subsidy. Proposals are due by May 8, 2012. (See 

Appendix A for a map.)

Background

By Order 20010-8-9, August 17, 2010, the Department selected Alaska Juneau Aeronautics, 

Inc., operating as Wings of Alaska, Inc. (Wings), to provide EAS at Excursion Inlet for an 

annual subsidy rate of $33,919, and Air Excursions LLC (Air Excursions) at Kake for a firstyear subsidy rate of $213,405 and a second-year subsidy rate of $229,939 for the two-year 

period from September 1, 2010, through August 31, 2012.

Request for Proposals

As the end of the current rate term approaches, we are here requesting proposals from air 

carriers interested in providing EAS at Excursion Inlet and Kake, with or without subsidy 

support, for a new rate term beginning September 1, 2012. Airlines should file their proposals 

no later than May 8, 2012. After that date, our staff will docket proposals, thereby making 

them public, and shortly afterwards will provide a summary of the proposals to the 

communities and ask them for their final comments. We will give full consideration to all 

proposals filed in a timely manner.1

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

Essential Air Service without subsidy and we determine that service can be reliably provided without such 
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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. 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 proposals that will facilitate their evaluation by the 

affected community and the Department.2

Interested carriers should prepare their proposals with every expectation that their initial 

proposals will also be their final and only proposals. We retain the discretion to negotiate 

proposals with carriers when we deem it desirable. We also retain the discretion to reject 

outright all unreasonable or unrealistic proposals and solicit a new round of proposals.

Carrier proposals should be submitted to the Department with all materials merged into a single 

document. In addition, because the document will be published on Regulations.gov, each page 

should be formatted to be viewed online.

With specific respect to these communities, air carriers should provide sufficient capacity to 

accommodate historical levels of traffic. In order to help carriers make traffic and revenue 

projections, we have included historical traffic in Appendix B. During the third quarter of 

2011, the peak quarter for both communities, Wings generated the equivalent of 64 inbound 

passengers (including freight and mail) to Excursion Inlet, and Air Excursions generated the 

equivalent of 663 inbound passengers (including freight and mail) to Kake. For Excursion 

Inlet, we are requesting proposals for status-quo service of three round trips a week to Juneau

during the peak season and one round trip a week during off-peak season with 10-passenger or 

less aircraft, or comparable capacity levels. For Kake, we are requesting status-quo service of

14 round trips per week to Juneau during peak season and 7 round trips a week during off-peak 

season using 10-seat or less aircraft, or comparable capacity levels.3 As always, we will 

formally solicit the communities’ 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 desirable to 

the community and meets the operational needs of the airline interested in submitting a 

proposal.

 

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 in Alaska, 49 U.S.C. 41733(c)(1) directs us to 

consider five factors: (1) scheduled service reliability; (2) contractual and marketing arrangements with a larger 

carrier to ensure service beyond the hub; (3) interline arrangements that the applicant has made 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) the experience of the applicant in providing, in Alaska, scheduled air service. 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 selected service. Appendix C of this Order contains those general provisions.

3 Carriers are free to set their peak-period service at different periods based on the peak traffic demand as shown in 

Appendix B.
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Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces and nondiscrimination.4 Consequently, all carriers receiving 

Federal subsidy to support EAS 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. All carriers that plan to submit 

proposals involving subsidy should submit the required certifications along with their 

proposals. Interested carriers requiring more detailed information regarding these 

requirements, as well as copies of the certifications, should contact the Office of Aviation 

Analysis at (202) 366-5903. The Department is prohibited from paying subsidy to carriers that 

do not submit these documents.5

Community and State Comments

Civic officials are welcome to submit comments on the proposals at any time. As noted earlier, 

we will provide a summary of the proposals to the civic parties and ask them to submit their 

final comments shortly after May 8, 2012, the due date for carrier proposals.

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 request that carriers interested in providing Essential Air Service at Excursion Inlet and 

Kake, Alaska, submit their proposals, with or without subsidy requests, no later than 

May 8, 2012. The proposals should be e-mailed to: EAS@dot.gov with the title “Proposal to 

Provide Essential Air Service at Excursion Inlet and Kake, Alaska”;6

2. These dockets will remain open until further order of the Department; and

 4 The regulations applicable to these areas are: (1) 49 CFR Part 20 – New restrictions on lobbying; (2) 49 CFR 

Part 21 – Nondiscrimination in federally-assisted 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 assistance; 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 (nonprocurement) and government-wide requirements for drug-free workplace (grants).

5 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.

6 Questions regarding filings in response to this Order should be directed to Michael Martin at 202-366-6494, or 

via email at michael.f.martin@dot.gov.
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3. The Department will serve a copy of this Order on the community leaders of Excursion Inlet 

and Kake, the Alaska Department of Transportation, Alaska Juneau Aeronautics, Inc., d/b/a

Wings of Alaska, Air Excursions LLC, and the parties listed in Appendix C.

Persons entitled to petition the Department for review of this order under the Department’s 

Aviation Economic Regulations, 14 CFR 385.50, must file such petitions within ten (10) days 

after the date of service of this order.

This order 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 online at

www.regulations.gov
Appendix A

Area Map
APPENDIX B

Page 1of 2

Historical Traffic - Excursion Inlet, Alaska

Origination Destination Origin and Destination

Year Quarter Pax

Freight 

PEQ Mail PEQ Total Pax

Freight 

PEQ Mail PEQ Total Pax

Freight 

PEQ

Mail 

PEQ Total

2009 1 0 0 0 0 3 0 3 6 3 0 3 6

2009 2 7 0 1 8 3 10 16 29 10 10 17 37

2009 3 14 0 9 23 7 6 4 17 21 6 13 40

2009 4 0 0 0 0 0 1 2 3 0 1 2 3

Total 21 0 10 31 13 17 25 55 34 17 35 86

2010 1 6 0 0 6 4 1 3 8 10 1 3 14

2010 2 2 0 1 3 4 2 12 18 6 2 13 21

2010 3 4 0 9 13 12 6 15 33 16 6 24 46

2010 4 0 0 1 1 0 8 7 15 0 8 8 16

Total 12 0 11 23 20 17 37 74 32 17 48 97

2011 1 2 0 1 3 2 3 4 9 4 3 5 12

2011 2 2 0 1 3 7 4 13 24 9 4 14 27

2011 3 8 0 16 24 15 6 18 39 23 6 34 63

2011 4 3 0 1 4 1 1 3 5 4 1 4 9

Total 15 0 19 34 25 14 38 77 40 14 57 111
APPENDIX B

Page 2of 2

Historical Traffic - Kake, Alaska

Origination Destination Origin and Destination

Year Quarter Pax

Freight 

PEQ Mail PEQ Total Pax

Freight 

PEQ Mail PEQ Total Pax

Freight 

PEQ

Mail 

PEQ Total

2009 1 152 9 17 178 159 50 98 307 311 59 115 485

2009 2 405 58 19 481 396 69 104 569 801 127 122 1050

2009 3 356 49 23 428 373 65 111 549 729 114 134 977

2009 4 283 55 25 363 219 71 123 413 502 126 148 775

Total 1196 171 82 1449 1147 255 436 1837 2343 426 518 3287

2010 1 152 11 19 182 213 55 93 361 365 65 113 543

2010 2 415 49 22 485 429 73 96 598 844 122 117 1083

2010 3 402 84 15 501 395 63 74 532 797 148 89 1033

2010 4 247 37 27 311 250 73 138 461 497 110 165 772

Total 1216 180 83 1479 1287 265 401 1952 2503 445 484 3432

2011 1 176 14 22 212 248 50 114 412 424 65 136 625

2011 2 416 64 30 510 443 99 112 654 859 162 142 1163

2011 3 441 67 23 531 431 109 123 663 872 176 146 1194

2011 4 340 39 27 406 365 89 143 597 705 128 170 1003

Total 1373 185 102 1660 1487 347 492 2326 2860 531 594 3985
Appendix C

Example of General Terms and Conditions for Essential Air Service

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

Department’s obligation for performance 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.

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

under this order.