Or der: 20 1 2

- 4

- 32

Served : April 30 , 201 2



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 30 th of April , 201 2

Essential Air Service at

BECKLEY, WEST VIRGINIA CLARKSBURG/FAIRMONT, WEST VIRGINIA MORGANTOWN, WEST VIRGINIA

Under 49 U.S.C. 41731 et seq

. Docket DOT

- OST

- 1997

- 2761

Docket DOT

- OST

- 2005

- 20736

Docket DOT

- OST

- 2005

- 20735

ORDER SELECTING CARRIER

Summary By this O rder

, the Department is s electing Silver Airways ( “ Silver ” ) to provide E ssential A ir

S ervice (EAS) at Beckley, Clarksburg/Fairmont (“Clarksburg”) and Morgantown, W est Virginia

, for a combined annual subsidy of $5,968,744 ( $2,512,494 for Beckley; $3,456,250 for Clarksburg and Morgantown )

, for the two

- year period beginning when the carrier begins full

EAS at all three communities

. 1

Background By Order 2012

- 2

- 16, February 23, 2012, the Department solicited proposals from all interested air carriers to provide service at these three West Virginia communities for a new two

- year term beginning August 1, 2012. Subsequent to that Order, on March 8, 2012, Pinnacle Airlines Corp. (“Pinnacle”), the parent company of Colgan Air (“Colgan”), the incumbent, filed a 90

- day termination notice with the Department. That notice stated Pinnacle’s intention to end Colgan’s service at all three communities, in add ition to four other communities not discussed here,

effective June 8 , 2012

. We then issued an Order prohibiting the suspension of service at all of

the noticed communities and requesting proposals for the other four

. Since the request for proposals for t he three West Virginia communities was already issued, we did not set a new due date for proposals, leaving it April 3, 2012, as in Order 2012

- 2

- 16.

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.Proposal from Silver Airways In response to that O rder, Silver was the only carrier to submit a proposal. Silver was previously

known as Gulfstream International Airlines but assumed its new name in December 2011. Silver provides subsidized EAS at several communities in Montana, Pennsylvania, New York, and West Virginia.

For Morgantown and Clarksburg, Silv er proposes 18 nonstop or one

- stop round trips per week to Washington Dulles International Airport (“Dulles”) for an annual combined subsidy of $3,456,250. Flights would operate on a Dulles

- Morgantown

- Clarksburg

- Dulles or Dulles

Clarksburg

- Morgantown

- Dull es routing

. For Beckley, Silver proposes 13 round trips per week ( seven nonstops and six one

- stops at an intermediate point to be determined at a later date) to Dulles for an annual subsidy of $2, 664,565

. The service proposed is one round trip per week

m ore than what the Department requested for Beckley. As result, in its proposal, Silver “would be amenable” to providing 12 round trips at a prorata subsidy adjustment. All service to the three communities would be operated with 34

- passenger Saab 340B+ ai rcraft. Silver states that it is proposing to operate flights under its existing codeshare with United Airlines (“United”) ; however, a definitive agreement extending that code

- share had not been reached at the time of filing and, therefore, the proposal w a s contingent upon that agreement being finalized.

Silver’s complete proposal may be accessed online at : http://www .regulations.gov/ by entering

“ DOT

- OST

- 1997

- 2761 ” (Beckley), “ DOT

- OST

- 2005

- 20735 ” (Morgantown), or “DOT

- OST

2005

- 20736” (Clarksburg/Fairmont) in the “Enter Keyword or ID” field.

Community and State Comments

On April 4 , 201 2 , we requested co mmunity co mment s regarding the carrier selection at three

com munities.

Beckley In an April 17 letter, the Raleigh County Memorial Airport Authority (BKW) notified the Department that it “has unanimously chosen the proposal offered by Silver Airways, with 26 weekly frequencies.” It notes that the proposal is contingent upon an agree ment with United, but if that fails, it requests DOT’s “consideration of a link with Greenbrier Valley Airport, Lewisburg, WV (LWB) service to Atlanta.”

Clarksburg The Interim Airport Director at the North Central West Virginia Airport (CKB) sent the Depa rtment a letter stating that CKB and the Benedum Air port A uthority are “ pleased that Silver wishes to continue a similar service to what Colgan Air is currently providing.” He s ays that “serving Clarksburg and Morgantown with 18 round trips per week is ve ry important” and “ any aircraft smaller than the 34

- passenger Saab 340B+ would not be opportune ” for the community. He further explains that while he understands the flight schedule has not been finalized, he has some operational concerns about how the “r ound robin” flights will be scheduled. Because Clarksburg’s runway is longer, he proposes the flights be routed Dulles

- Morgantown

- Clarksburg for afternoon and evening flights , and cites operational statistics to substantiate his reasoning.Morgantown

In an April 11 letter, t he d irector of Morgantown Municipal Airport, stated that the university, business, and residents of the region need “a carrier that can provide connectivity and service” for business and leisure travelers and “Silver Airways proposal d oes that.” He says that Washington Dulles with domestic and international flights will serve the community well.

Decision All three communities support Silver Airways’ proposal and Silver Airways is a well

- established airline in the EAS program, serving communities in Montana, New York, Pennsylvania, and West Virginia. Furthermore, the proposed service to Washington Dulles would provide the communities with excellent, seamless access to the National air transportation system. While

we understand that th is proposal is contingent upon Silver Airways’ obtaining a United codeshare agreement to include the Beckley, Clarksburg, and Morgantown flights, we are optimistic this can be achieved given that Silver Airways has an existing United code

- share at

Clevelan d

- Hopkins International Airport and in Florida and the Bahamas.

While we recognize that Beckley would appreciate the additional weekly round trip that Silver proposed, the EAS is designed to provide a safety

- net level of service of access to the national air transportation system, and the current level of service (12 weekly round trips with 34

- passenger Saab 340B+ aircraft) will provide enough capacity to accommodate current passenger traffic.

Overall, w e find the requested subsidy reasonable for the serv ice proposed. T hus

, we select

Silver t o provide EAS at the three communities for a combined annual subsidy of $5,968,744 ( $2,512,494 for Beckley; $3,456,2 50 for Clarksburg and Morgantow n ) , for the two

- year period beginning when the carrier begins full EAS at all three communities. Beckley’s subsidy rate will be prorated to reflect seven nonstop and five one

- stop round trips per week, rather than the seve n nonstop and six one

- stop round trips per week, as Silver initially proposed.

We shall make Silver ’ s selection at Beckley, Clarksburg, and Morgantown contingent upon the Department’s receiving properly executed certifications from Silver that it is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as wel l as the regulations governing lobbying activities.

As a final matter, we expect Silver and Colgan to work together to make a smooth transition at

all three communities . In that regard, before Colgan suspends its service, we expect it to contact all passengers holding reservations for travel after the final date of service, to inform them of the change in service, and to assist them in arranging alternate transportation or to provide a refund

of the t icket price, without penalty, if requested.

Carrier Fitness

49 U.S.C. 41737(b) requires that we find an air carrier fit, willing, and able to provide reliable service before we may subsidize it to provide essential air service

. Silver is sub j ect to the

D epartment’s continuing fitness requirements, and no information has come to our attention that would cause us to question either carrier's fitness at this time. We have contacted the Federal Aviation Administration, and it has raised no concerns that woul d negatively affect our fitnessfinding. We therefore conclude that the carrier s remain fit to conduct the operations proposed

here.

This O rder is issued under authority delegated in 49 CFR 1.56a(f).

ACCORDINGLY,

1. We select Silver Airways

, to provide E ssential Air S ervice at Beckley, Clarksburg/Fairmont, and Morgantown, West Virginia ;

2 . We set the final rate of compensation for Silver Airways

, for the provision of essential air

service at Beckley, Clarksburg/Fairmont, and Morgantown, West Virginia , as described in Appendix C ;

3 . We direct Silver Airways

, 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 i ts audit and examination by representatives of the Department. Such documentation shall be retained for seven years from when EAS begins 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;

4 . We find that Silver Airways

, continue s to be fit, willing and able to operate as a commuter
carrier and capable of providing reliable E ssential A ir S ervice at Beckley, Clarksburg/Fairmont, and Morgantown, West Virginia

5

. Th ese docke ts will remain open until further order of the Department; and

6 . We will serve copies of this O rder on the Ma yor s of Beckley, Clarksburg, Fairmont, and Morgantown, West Virginia, and the managers of Morgantown Municipal Airport, North Central West Virginia Airport (Clarksburg/Fairmont), and Raleigh County Memorial Airport (Beckley), Silver Airways, and Colgan Air

.

By:

SUSAN L. KURLAND Assistant Secretary

for Aviation and International Affairs

(SEAL)

An electronic version of this document is available at http://www.regulations.govAppendix A



## AREA MAP

This map is provided by Sabre ® AirVision TM Profit Essentials and is being used with express permission of the copyright holder,

Sabre Airline Solutions®.Appendix B Page 1 of 2

Beckley’s prorated subsidy

– 5/6 th of $912,427=$760,356 + $1,752,138 = $2,512,494Appendix B Page 2 of 2Appendix C Page 1 of 2

Silver Airways

Essential Air Service to be Provided at Beckley, W V

Effective Period : Beginning with full EAS at Beckley, Clarksburg, and Morgantown, through the

end of the 24 th month thereafter

Scheduled Service : 1 2 weekly round trips (7 nonstop and 5 one

- stops) t o Washington Dulles International Airport Intermediate stops and upline service : An intermediate stop is permitted on five ( 5 ) of the

1 2 weekly round trips

Aircraft : Saab 340 B+

, 34 seats Rate per Eligible Flight: $ 2,054 1 Weekly Ceilin g : $ 49,296 2

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 t he 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 or der 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 a nd 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 d eviating 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 unilaterall y, either partially or complete ly , 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 ag reed 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 order beyond September 30, 2012

. The Governmen t’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 per formance 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 $2,512,494 , divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98 percent completion)

. 2 2 4 flights per week multiplied by $ 2,054 per flight.Appendix C Page 2 of 2

Silver Airways

Essential Air Service to be Provided at Clarksburg/Fairmont and Morgantown, W V

Effective Period : Beginning with full EAS at Beckley, Clarksburg, and Morgantown, through the

end of the 24 th month thereafter

Scheduled Service : 18 weekly nonstop or one

- stop round trips over a Clarksburg

- Morgantown

Washington Dulles or Morgantown

- Clarksburg

- Washington Dulles routing Intermediate stops and upline service: Service may be routed over Morgantown or Clarksburg

Aircraft : Saab 340 B+ , 34 seats Rate per Eligible Flight: $ 942 1 Weekly Ceiling : $ 33,912 per community 2

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 comple ted, 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 a pproval 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 an d the extent of access to the national air transportation system provided to the community.

If the Department unilaterally, either partially or complete ly , terminates or reduces payments for service or changes service requirements at a specific location p rovided 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 cont racts 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 paragr aph.

Funds are not currently available for performance under this order beyond September 30, 2012

. The Governmen t’s obligation for performance under this order beyond September 30, 2012 , is subject to the availability of appropriated funds from which pay ment 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 $3,456,250 , divided by 3,669 annual departures (36 weekly departures x 52 weeks x 98 percent completion x 2 communities).

2 36 flights per week per community multiplied by $ 942 pe r flight.