Order 2012-9-6

Served: September 6, 2012

 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 September, 2012

Essential Air Service at

MACON, GEORGIA DOCKET DOT-OST-2007-28671

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

ORDER SELECTING CARRIER

AND ESTABLISHING SUBSIDY RATES

Summary

By this Order, the Department is selecting Sun Air Express, LLC d/b/a Sun Air 

International (Sun Air) to provide Essential Air Service (EAS) at Macon, Georgia, for an

annual subsidy of $1,946,266.

1

 The service to be provided will be four nonstop round trips 

per weekday and four per weekend (24 a week) to Atlanta Hartsfield International Airport 

(Atlanta) using 9-passenger, twin-engine Piper Chieftain aircraft for the two-year period 

beginning when the carrier commences full EAS.

Background

The Department’s FY 2012 appropriation (P.L. 112-55) limited eligibility in the EAS 

program in the lower 48 states to certain communities, including those that received 

subsidized EAS “at any time between September 30, 2010, and September 30, 2011, 

inclusive.” Macon is eligible for subsidized service because it was receiving service on a 

subsidized basis from Pacific Wings, L.L.C., d/b/a Georgia Skies (Pacific Wings) through 

January 24, 2011, and subsidy-free service starting January 25, 2011. However, on 

 1

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

funds.
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April 26, 2012, Pacific Wings filed a 90-day notice of its intent to terminate its 

unsubsidized service at Macon, which triggered this carrier-selection case.

 

By Order 2012-5-25, issued on May 24, 2012, the Department prohibited Pacific Wings 

from terminating service for 30 days beyond the end of the 90-day notice period, i.e. 

August 25, 2012, and requested proposals from air carriers interested in providing EAS at 

Macon, with or without subsidy. In response to that Order, we received two proposals.

Copies of the proposals may be accessed online through the Department’s Dockets 

Management System at: http://www.regulations.gov/ by entering “DOT-OST-2007-28671” 

in the “Enter Keyword or ID” field. 

Proposal of American Aviation Group, Inc. d/b/a Twin Air Calypso

American Aviation Group, Inc. d/b/a Twin Air Calypso (TAC), proposes to offer six daily

nonstop round trips (42 a week) between Macon and Atlanta utilizing an eight-passenger,

single-engine Cessna Caravan aircraft, for an annual subsidy of $1,555,825.2 

TAC currently has an application pending before the Department for authority to conduct 

scheduled passenger operations as a commuter air carrier. That application, as well as the 

Department’s request for additional information pertaining to that application, can be 

accessed online through the Department’s Dockets Management System by entering 

“DOT-OST-2011-0143” in the “Enter Keyword or ID” field. 

 

Proposal of Sun Air

Sun Air proposes four nonstop round trips per weekday, two round trips on Saturday, and 

two round trips on Sunday (24 a week) to Atlanta using 9-passenger, twin-engine Piper 

Chieftain aircraft for an annual subsidy of $1,946,266. The Department recently found Sun 

Air fit to conduct scheduled passenger operations as a commuter air carrier, and the air 

carrier is currently working with the Federal Aviation Administration (FAA) to finalize that 

operating authority. 

According to its application, Sun Air has made significant investments to acquire access to 

industry interline and baggage agreements with major air carriers. Additionally, it has 

made arrangements to use gate space within the sterile concourse at Atlanta, thereby

eliminating the need for passengers to re-clear security upon arrival and allowing for 

seamless baggage transfers. 

Community Comments

By letter dated July 31, 2012, the Honorable Robert Reichert, Mayor of Macon, provided 

support for Sun Air’s application. The Mayor points out the advantages Sun Air has over 

TAC, which include investments in interline agreements with major air carriers and the 

 

2 Most EAS communities are guaranteed service with twin-engine aircraft. However, because Macon has 

received single-engine service for “at least 60 consecutive operating days since October 31, 1978,” in 

accordance with 49 U.S.C. § 41732 (b)(5), Macon is not guaranteed twin-engine air service. For this reason, 

TAC’s proposal is eligible for consideration. 
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convenience of direct terminal access. Furthermore, the community is concerned about the 

time required for TAC to obtain full operating authority.

Decision

After reviewing both airlines’ proposal and taking into account the community’s 

comments, the Department has decided to select Sun Air. The community supports Sun 

Air’s proposal and specifically mentions the importance of interline agreements with major 

airlines and the convenience of direct terminal access, both of which Sun Air has stated it 

has taken measures to obtain. 

Further, by Order 2012-2-20, issued on February 24, 2012, the Department issued a 

consent order concerning unauthorized scheduled passenger service as a commuter air 

carrier by TAC in violation of 49 U.S.C. §§ 41101, 41712, and 41738 and 

14 CFR Part 298, the Department’s commuter air carrier requirements, as well as Order 

2005-3-38. That Order directed TAC to cease and desist from further violating those 

statutory provisions, federal regulations, and Order and assed TAC a compromised civil 

penalty of $70,000. Under these circumstances, the Department is concerned with the 

recent enforcement action against TAC and the lengthy time that may be required for it to 

obtain its operating authority. 

We find both the service and subsidy levels proposed by Sun Air to be reasonable. We 

shall make this selection of Sun Air at Macon contingent upon the Department’s receiving 

properly executed certifications from the air carrier that it is in compliance with the 

Department’s regulations regarding drug-free workplaces and nondiscrimination, as well as 

the regulations concerning lobbying activities.

3

Service Transition

We expect Pacific Wings and Sun Air to work together to make a smooth transition at 

Macon. In that regard, before Pacific Wings suspends its service it must notify any 

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

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

without penalty, if requested.

Legislative Changes Which May Affect Future EAS Eligibility at Macon

The FAA Modernization and Reform Act of 2012 (Public Law No: 112-95) amended 

49 U.S.C. § 41731(a)(1)(B) to change the definition of “eligible place” for the purpose of 

receiving EAS. The amendment states that to be eligible, a community must maintain an 

average of 10 enplanements or more per service day, as determined by the Secretary, 

during the most recent fiscal year beginning after September 30, 2012.4 The legislation 

exempts locations in Alaska and Hawaii and communities that are more than 175 driving 

miles from the nearest large or medium hub airport. As Macon is only about 81 miles from 

 

3 The certifications are available on the Web at http://ostpxweb.dot.gov/aviation/index.html.

4 The Secretary also has authority to waive the 10 passenger requirement, on an annual basis, if the 

community can demonstrate that the reason the location averages fewer than 10 passengers per day is due to a 

temporary decline in enplanements. See 49 U.S.C. § 41731(e).
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the Atlanta airport, the community must meet the 10-enplanement-a-day threshold for EAS 

to continue after FY2013, barring a waiver from the Secretary. 

In the most recent fiscal year for which data are available, FY2011 (October 2010-

September 2011), Pacific Wings generated a total of 1,988 passengers (inbound and 

outbound), or an average of about 3 enplanements per day.5 Sun Air and Macon should be 

aware that the Department will continue to monitor Macon’s eligibility to receive EAS in 

light of these new requirements throughout the life of any executed contract. The 

Department may cancel a contract for any community receiving EAS if enplanements 

remain below 10 per day during FY2013, barring a waiver from the Secretary. 

Additionally, communities are not eligible for subsidized air service if their per passenger 

subsidy exceeds $1,000.

6 The estimated subsidy per passenger based on FY11 origin and 

destination passengers at Macon is $979. However, that figure is based on unsubsidized air 

service provided by Pacific Wings. In its proposal, Sun Air states that its airfares will be 

50% to 70% lower than the current fare, and therefore will become more affordable to a 

greater number of travelers. This has the potential to increase enplanements, thereby 

decreasing the subsidy per passenger rate. The Department strongly encourages Macon 

and Sun Air to work together to increase enplanements and bring its rate of subsidy per 

passengers into compliance in order to avoid termination of eligibility for subsidy under the 

EAS program. We will monitor both the subsidy per passenger rate and the 

10-enplanement threshold during this upcoming two-year contract to ensure compliance 

with the statute. 

Carrier Fitness

49 U.S.C. Sections § 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 EAS. The 

Department recently found Sun Air fit to conduct scheduled passenger operations as a 

commuter air carrier and no information has come to our attention that would cause us to 

question the air carrier’s fitness to provide EAS in this market at this time. We therefore 

conclude that Sun Air is reliable and fit to conduct the operations proposed here. 

This Order is issued under authority delegated in 49 CFR Part 1.56a(f).

ACCORDINGLY,

1. We select Sun Air Express, LLC d/b/a Sun Air International to provide Essential Air 

Service at Macon, Georgia, contingent upon it receiving full operating authority from both 

the Department and Federal Aviation Administration. We establish an annual subsidy rate

as described in Appendix B;

2. We direct Sun Air Express, LLC d/b/a Sun Air International to retain all books, records,

and other source and summary documentation to support claims for payment, and to 

 

5 Source: Bureau of Transportation Statistics; Form 41, Schedule T-100. Daily averages are based on onehalf of the O&D passengers, divided by 313 service days (314 during leap years).

6

 See 49 USC Section 41731(a)(1)(C). 
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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 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 Sun Air Express, LLC d/b/a Sun Air International is fit, willing and able to 

operate as a commuter air carrier, and capable of providing reliable Essential Air Service at 

Macon, Georgia;

4. Docket DOT-OST-2007-28671 will remain open pending further Department action; 

and

5. We will serve copies of this Order on the Mayor and Airport Manager of Macon, 

Georgia, Sun Air Express, LLC d/b/a Sun Air International, and American Aviation Group, 

Inc. d/b/a Twin Air Calypso.

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

Sun Air International, LLC

Annual Compensation Requirements for Essential Air Service at

Macon, Georgia to Atlanta, Georgia

Four daily round trips per weekday and four round trips per weekend (24 a week) 

98.0% Completion Factor

Projected Operations

Annual 

MCN-ATL

Passenger $477,034

Other Revenues $7,156

TOTAL OPERATING 

REVENUE $484,190

OPERATING EXPENSES

Flight Operations $195,500

Fuel and Into-Plane $562,162

Maintenance $496,603

Passenger Service $717,263

Aircraft Ownership $169,952

Other $173,240

TOTAL OPERATING COST $2,314,720

OPERATING INCOME/LOSS -$1,830,530

PROFIT ELEMENT (5% OF 

OPERATING COST) $115,736

SUBSIDY REQUIRED $1,946,266
 Appendix B

Sun Air Express, LLC d/b/a Sun Air International

Essential Air Service to be Provided at Macon, Georgia

Effective Period: Beginning with full EAS through the end of the 24th month thereafter

Scheduled Service: 24 weekly nonstop round trips to Atlanta Hartsfield International Airport

(Atlanta)

Aircraft: 9-passenger, twin-engine Piper Chieftain

Rate per Eligible Flight: $7961

Weekly Ceiling for each community: $38,2082

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 service levels, the carrier may cease to provide service to that 

specific location without regards 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, 2012. The Government’s 

obligation for performance under this Order beyond September 30, 2012, 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, 2012, until funds are made available to the Department for 

performance. If funds are not made available for performance beyond September 30, 2012, 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 Annual compensation of $1,946,266 divided by 2,446 annual departures (48 weekly departures x 52 weeks x 98 

percent completion). 2 48 arrivals and departures per week multiplied by $1,591 per flight.