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 12 t h day of December , 20 1 2

ORDER REQUESTING PROPOSALS

Summary By this O rder, the Department is requesting proposals f r om carriers interested in providing Essential A ir S ervice ( EAS ) at Carlsbad, New Mexico, for a new contract period, beginning June 1, 20 1 3 , with or without subsidy. (See Appendix A for a service

area map )

. Carriers should file their proposals no later than January 15, 201 3

.

Background By Order 2011

- 4

- 1 9 ( A pril 2 2, 2011) , the Department re selected Pacific Wings L.L.C.,

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

Carlsbad for the two

- year period beginn ing June 1, 2009

, at a n annual subsidy rate of $ 1, 350,253

. Under that O rder

, New Mexico Airlines provide s two daily nonstop round trips (12 weekly) bet ween 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 providi ng EAS at Carlsbad

, with or without subsidy, for a new

contract period beginning June 1, 201 3 . Carriers should file their proposals no later than January 15

, 201 3

. Staff will then docket proposals, thereby making them public, and shortly afterwards will provide a summary of the proposals to the communit y 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 pro vided without such compensation, we do not proceed with the carrier

- selection case. Instead, we simply rely on that carrier’s

su bsidy

- free service as proposed. Essential Air Service at

CARLSBAD, NEW MEXICO

Under 49 U.S.C. § 41731 et seq

. Docket DOT

- OST

- 2002

- 12802- 2

-

Interested carriers should prepare their proposals with every expectation that their ini tial 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 wil l 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, well

documented proposals that will facilitate the ir evaluation by the affected communit y 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 ro und trips a day with nine

- seat aircraft will provide ample capacity to

accommodate traffic. We e ncourage proposals that meet the se requirements in an efficient manner. Carriers are also welcome to propose more than one service option, if they choose. T h ey need not limit themselves to the se 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

H istorical traffic is detailed in Appendix B. During the year ended May 31

, 20 12

, 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 consi der 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) communi ty 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 consid er 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 m ore 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 Carlsb ad is more than 175 driving miles from the nearest large or medium hub airport, this provision is not applicable.- 3

-

F iling Requirements Carrier proposals should be submitted to the Department with all materials merged into a single document. In addition, because th e document will be published on Regulations.gov, each page should be formatted to be viewed online.

Other Carrier Requirements The Department is responsible for impl ementing 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 prohibite d 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 requ iring 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 appl icants to contact the communit y before they submit their proposals so that they can tailor them to the communit y ’ 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 O rder 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

f inancial 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 government

wide requirements for drug

- free workplace (grants).

5 The certifications are also available on the web at http://www.dot.gov/policy/aviation

- policy/small

community

- rural

- air

- service/essential

- air

- service

.- 4

-

ACCOR DINGLY, 1. We request that ca rriers interested in providing E ssential A ir S ervice at Carlsbad, New

Mexico , submit their proposals, with or without subsidy requests, no later than January 15

, 201 3 . 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

- OST

2002

- 12802 ”;

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

3. We will serve copies of this O rder 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 O rder under the Department’s Aviation Economic Regulations, 14 CFR Part 385.5 0, must file such petitions within ten (10) days aft er the date of service of this O rder.

This O rder will be effective immediately, and the filing of a petition for review shall not preclude its effectiveness.

By:

TODD M. HOMAN

Director

Office of Avia tion Analysis

(SEAL)

An electronic version of this document is available

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



### AREA MAPAppendix B



### Historical O&D Traffic 1

New Mexico Airlines at Carlsbad, NM

Ye ar 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: 8.9 2

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 te rms 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

de stination 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 orde r 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

dev iating 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 a mounts 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

agre ed 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 fro m 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 t his 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 submitt ed within 60 days of the last day of se rvice provided

under this order.