Order 2012-12-4

Served: December 12, 2012

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 12th day of December, 2012

ORDER REQUESTING PROPOSALS

Summary

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

providing Essential Air Service (EAS) at Carlsbad, New Mexico, for a new contract

period, beginning June 1, 2013, with or without subsidy. (See Appendix A for a service 

area map). Carriers should file their proposals no later than January 15, 2013.

Background

By Order 2011-4-19 (April 22, 2011), the Department reselected Pacific Wings L.L.C., 

d/b/a New Mexico Airlines (New Mexico Airlines) to provide subsidized EAS at 

Carlsbad for the two-year period beginning June 1, 2009, at an annual subsidy rate of 

$1,350,253. Under that Order, New Mexico Airlines provides two daily nonstop round 

trips (12 weekly) between Carlsbad and Albuquerque, utilizing single-engine, 9-

passenger Cessna Grand Caravan (C-208B) turboprop aircraft.

Request for Proposals

As the end of the current contract approaches, we are here requesting proposals from 

carriers interested in providing EAS at Carlsbad, with or without subsidy, for a new 

contract period beginning June 1, 2013. Carriers should file their proposals no later than 

January 15, 2013. Staff will then docket proposals, thereby making them public, and 

shortly afterwards will provide a summary of the proposals to the community 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 fillings. In cases where a carrier proposes to 

provide EAS without subsidy and we determine that service can be reliably provided without such 

compensation, we do not proceed with the carrier-selection case. Instead, we simply rely on that carrier’s 

subsidy-free service as proposed.

Essential Air Service at

CARLSBAD, NEW MEXICO

Under 49 U.S.C. § 41731 et seq.

Docket DOT-OST-2002-12802
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Interested carriers should prepare their proposals with every expectation that their initial 

proposals will represent their final and only proposals. However, 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 re-solicit a new 

round of proposals. However, negotiation or rejection are only an occasional exception to 

the rule.

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 for 

their proposals. 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, welldocumented proposals that will facilitate their evaluation by the affected community and 

the Department.2

The Department expects proposals that are consistent with what the community currently 

receives (12 weekly round trips with nine-seat aircraft). Given the traffic levels described 

below, two round trips a day with nine-seat aircraft will provide ample capacity to 

accommodate traffic. We encourage proposals that meet these requirements in an 

efficient manner. Carriers are also welcome to propose more than one service option, if 

they choose. They need not limit themselves to these requirements if they envision other, 

potentially more attractive service possibilities (e.g. different hubs or length of contract)

with subsidy requirements that remain competitive.

The community and air carriers are encouraged to work together in advance of the due 

date for proposals to craft service patterns that are desirable to the community and meet 

the operational requirements of the airline.

Service and Traffic History

Historical traffic is detailed in Appendix B. During the year ended May 31, 2012, 

Carlsbad generated 5,552 total passengers to and from Albuquerque, or an average of 8.9

enplanements per day, a slight increase over the previous period.3

 2 In selecting a carrier to provide subsidized EAS, 49 U.S.C. § 41733(c)(1) directs us to consider four 

factors: (a) scheduled service reliability; (b) contractual and marketing arrangements with a larger carrier to 

ensure service beyond the hub; (c) interline arrangements that the applicant has made with a larger carrier at 

the hub; and (d) community views, giving substantial weight to the views of the elected officials 

representing the users. 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. 3 Recent legislation requires that to remain eligible for subsidized EAS, a community must maintain an 

average of 10 enplanements or more per service day during the most recent fiscal year beginning after 

September 30, 2012. 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 Carlsbad is more than 175 

driving miles from the nearest large or medium hub airport, this provision is not applicable.
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Filing Requirements

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.

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 for 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. Because 

the Department is prohibited from paying subsidy to carriers that do not submit these 

documents, all carriers that plan to submit proposals involving subsidy should be aware 

that the selected carrier will be required to complete the required certifications. Interested 

carriers requiring more detailed information regarding these requirements should contact 

the Office of Aviation Analysis at (202) 366-5903.5

Community and State Comments

The community and State are welcome to submit comments at any time. We encourage 

prospective applicants to contact the community before they submit their proposals so 

that they can tailor them to the community’s needs, as they will not be able to amend 

them after the due date. 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 January 15, the 

deadline for carrier proposals.

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

to the Director, Office of Aviation Analysis.

 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 (non-procurement) and governmentwide requirements for drug-free workplace (grants).

5 The certifications are also available on the web at http://www.dot.gov/policy/aviation-policy/smallcommunity-rural-air-service/essential-air-service.
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ACCORDINGLY,

1. We request that carriers interested in providing Essential Air Service at Carlsbad, New 

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

January 15, 2013. The proposals should be e-mailed to: EAS@dot.gov with the title 

“Proposal to Provide Essential Air Service at Carlsbad, New Mexico, Docket DOT-OST2002-12802”;

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

3. We will serve copies of this Order on the mayor and airport manager of Carlsbad, New 

Mexico, New Mexico Airlines, and the service list for this docket.

Persons entitled to petition the Department for review of this Order under the 

Department’s Aviation Economic Regulations, 14 CFR Part 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

on the World Wide Web at http://www.regulations.gov
Appendix A

AREA MAP
Appendix B

Historical O&D Traffic1

New Mexico Airlines at Carlsbad, NM

Year Month Origin Destination

Total 

O&D

2010 6 259 273 532

2010 7 216 207 423

2010 8 214 204 418

2010 9 257 241 498

2010 10 184 190 374

2010 11 228 197 425

2010 12 203 166 369

2011 1 169 160 329

2011 2 185 161 346

2011 3 220 216 436

2011 4 241 207 448

2011 5 212 218 430

2011 6 225 226 451

2011 7 239 229 468

2011 8 225 217 442

2011 9 247 251 498

2011 10 241 246 487

2011 11 234 211 445

2011 12 260 261 521

2012 1 201 198 399

2012 2 223 210 433

2012 3 250 236 486

2012 4 250 218 468

2012 5 238 216 454

Average Daily Enplanements YE May, 2012: 8.92

 1 Source: Bureau of Transportation Statistics Form 41: Schedule T-100 Domestic Market.

2 Average Daily Enplanements calculated by dividing total O&D passengers by 313 service days, divided 

by 2 directions.
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 Department 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.