Order 2010-4-11

Served: April 19, 2010

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 19th day of April, 2010

Essential Air Service at

MANLEY HOT SPRINGS, ALASKA

MINTO, ALASKA

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

DOCKET DOT-OST-2004-17563

ORDER REQUESTING PROPOSALS

Summary

By this order, the Department is requesting proposals, by May 17, from carriers interested in 

providing essential air service (EAS) at Manley Hot Springs (Manley) and Minto, Alaska, for 

a new two-year period, with or without subsidy, beginning September 1, 2010. (See 

Appendix A for map.)

Background

By Order 2008-7-20, issued July 15, 2008, the Department selected Warbelow’s Air

Ventures, Inc. (Warbelow’s), to continue providing subsidized EAS at Manley and Minto for 

the two-year period ending August 31, 2010. That order established an annual subsidy rate 

of $84,170 for three flights a week over a Fairbanks-Manley-Rampart-Minto-Fairbanks 

routing with 3-seat Cessna 206/207 aircraft.1

Request for Proposals

As the end of the current rate term approaches, in order to provide sufficient time to complete 

the carrier-selection process before the current contract expires, we are here requesting

proposals from carriers interested in providing service at Manley and Minto, with or without 

subsidy support, for the two-year period beginning September 1, 2010. Carriers should file 

their proposals no later than May 17, 2010. Shortly after that date, our staff will docket the 

proposals, thereby making them public, and direct each carrier to serve a copy of its proposal 

on the civic parties and other applicants. Shortly afterwards, we will provide a summary of 

 1 Although that order selected 3-seat Cessna 206/207 aircraft, the carrier began providing the service with 4-seat 

Cessna 206/207 aircraft shortly thereafter.
2

the proposals to the communities and state and ask them to submit their final comments. We 

will give full consideration to all proposals filed in a timely manner.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. 

However, we anticipate that negotiation or rejection will remain only occasional exceptions 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, well-documented proposals that will 

facilitate their evaluation by the affected communities and the Department.3

Proposals should provide sufficient capacity to accommodate historical traffic levels. 

Specifically for Manley and Minto, we request proposals offering service identical or similar 

to the service the communities currently receive, i.e., three round trips a week, with small 

aircraft (10 seats or less). In order to assist carriers in making traffic and revenue forecasts, 

we have included historical traffic in Appendix B. Typically in Alaska, mail and freight flows 

are asymmetrical, with up to 90% of total mail and freight flowing outbound from the hub to 

the EAS communities. Historical traffic data (Appendix B) show that three round trips a 

week is sufficient to fulfill the EAS needs of these communities.4

We encourage proposals that meet these requirements in an efficient manner. Carriers are 

also welcome to propose more than one option, if they choose; they need not limit themselves 

to those requirements if they envision other, potentially more attractive service possibilities –

different hubs or longer-term contracts, for example – with subsidy requirements that remain 

competitive.

 2 In cases where a carrier proposes to provide essential air service 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.

3 In selecting a carrier to provide subsidized essential air service to an Alaska community, 49 U.S.C. 41733(c)(1) 

directs us to consider five factors: (1) service reliability; (2) contractual and marketing arrangements with a 

larger carrier at the hub; (3) interline arrangements 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 or significant non-scheduled 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. Appendix C contains the general provisions governing essential 

air service; as in the past, these provisions will be included in the selection order as part of the Department’s 

authorization of subsidy for the selected service.

4 We note that Wright Air Service and Frontier Flying Service occasionally provided sporadic service at the 

communities.
3

New Filing Procedures

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.5 Consequently, all carriers receiving 

Federal subsidy to support essential air service 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.6

Community Comments

Civic officials and the State are welcome to submit comments at any time. We encourage 

prospective applicants to contact the communities before they submit their proposals so that 

they can tailor them to the communities’ needs, as they will not be able to amend them after 

the due date. As noted earlier, we will provide a copy of the proposals to the civic parties and 

ask them to submit their final comments shortly after May 17, 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 Manley Hot Springs 

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

May 17, 2010. The proposals should be emailed to: EAS@dot.gov with the title “Proposal to 

Provide Essential Air Service at Manley Hot Springs and Minto, Alaska (Docket DOT-OST2004-17563)”;7

2. Docket DOT-OST-2004-17563 will remain open until further order of the Department; and

 5 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 government-wide requirements for drug-free workplace (grants).

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

7 Questions regarding filings in response to this order should be directed to Renée Williams at 

renee.williams@dot.gov or (202) 366-1058.
4

3. The Department will serve copies of this order on the civic officials of Manley Hot Springs

and Minto, the Alaska Department of Transportation and Public Facilities, and the parties 

listed in Appendix D.

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

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 on the World Wide Web at

http://www.regulations.gov
Appendix A

AREA MAP
Appendix B

Page 1 of 2

Historical Origin-Destination Traffic at

Manley Hot Springs, Alaska1

12 Months ended December 31, 2009

1Q 09 2Q 09 3Q 09 4Q 09 Total

Passengers

From Manley 4 9 25 3 41

To Manley 9 13 18 7 47

13 22 43 10 88

Cargo

From Manley 0 152 18 110 280

To Manley 3518 2800 1222 360 7900

3518 2952 1240 470 8180

Mail

From Manley 918 1121 1193 1404 4636

To Manley 8199 8425 7747 9169 33540

9117 9546 8940 10573 38176

PEQs from Manley 9 15 31 11 66

PEQs to Manley 68 69 63 55 254

Total PEQs2 77 84 94 66 320

12 Months ended December 31, 2008

1Q 08 2Q 08 3Q 08 4Q 08 Total

Passengers

From Manley 9 14 9 11 43

To Manley 9 14 4 15 42

18 28 13 26 85

Cargo

From Manley 4 341 1 0 346

To Manley 520 1277 628 546 2971

524 1618 629 546 3317

Mail

From Manley 1034 774 1379 1515 4702

To Manley 7071 7687 8457 6571 29786

8105 8461 9836 8086 34488

PEQs from Manley 14 20 16 19 68

PEQs to Manley 47 59 49 51 206

Total PEQs2 61 79 65 70 274

___________________

1 Source: Bureau of Transportation Statistics; Schedule T-100. 2 PEQs: Passenger Equivalents. Every 200 pounds of freight or mail is the equivalent of one 

passenger.
Appendix B

Page 2 of 2

Historical Origin-Destination Traffic at

Minto, Alaska1

12 Months ended December 31, 2009

1Q 09 2Q 09 3Q 09 4Q 09 Total

Passengers

From Minto 28 47 51 67 193

To Minto 27 38 33 55 153

55 85 84 122 346

Cargo

From Minto 40 8 13 41 102

To Minto 1077 591 704 200 2572

1117 599 717 241 2674

Mail

From Minto 505 1131 788 691 3115

To Minto 5770 4380 4055 5424 19629

6275 5511 4843 6115 22744

PEQs from Minto 31 53 55 71 209

PEQs to Minto 61 63 57 83 264

Total PEQs2 92 116 112 154 473

12 Months ended December 31, 2008

1Q 08 2Q 08 3Q 08 4Q 08 Total

Passengers

From Minto 34 44 33 43 154

To Minto 26 33 29 33 121

60 77 62 76 275

Cargo

From Minto 27 70 376 13 486

To Minto 734 4805 860 5838 12237

761 4875 1236 5851 12723

Mail

From Minto 1034 774 1379 1515 4702

To Minto 7071 7687 8457 6571 29786

8105 8461 9836 8086 34488

PEQs from Minto 39 48 42 51 180

PEQs to Minto 65 95 76 95 331

Total PEQs2 104 143 118 146 511

___________________

1 Source: Bureau of Transportation Statistics; Schedule T-100. 2 PEQs: Passenger Equivalents. Every 200 pounds of freight or mail is the equivalent of one 

passenger.
Appendix C

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 order beyond September 30, 

2010. The Government's obligation for performance under this order beyond 

September 30, 2010, 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, 2010, 

until funds are made available to the Department for performance. If funds are not made 

available for performance beyond September 30, 2010, 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.
Appendix D

40-Mile Air, Leif Wilson

40-Mile Air, Vanessa Thompson

Adams, Kevin, Work

Aero Twin, AACA, Tony Cestnik

Alaska Air Carriers Association, Joy Journeay

Alaska Airlines, Joe Sprague

Alaska Airlines, Sandy Sinick

Alaska Central Express, John Seamon

Alaska Central Express, Mike Bergt

Alaska Central Express, Steve Endlich

Alaska DOT, Christine Klein

Alaska DOT, Rebecca Cronkhite

Alaska DOT-Medicaid Passenger Fares

Alaska Seaplanes, Craig Loken

Alsek Air, Les and Debra Hartley

Arctic Circle, Donald Singsaas

Arctic Circle, Kelly Harris

Arctic Transportation Services (ATS), Wilfred Ryan

Arctic Transportation Services, (ATS), Jim Hjelm 

Bering Air, Allen Haddadi

Bering Air, Jim Rowe

Bob Stanford (Islairbk@Alaska.com)

Congressional, Begich, David Ramseur

Congressional, Begich, Megan Foster 

Congressional, Begich, Tiffany Zulkosky

Congressional, Murkowski, Arne Fuglvog 

Congressional, Young, Jeremy Price

Consultant, Hank Myers

Consultant, Ken Acton

Consultant, Norm Israelson

Dorato Jets

Dorato Jets, Mark McKenna

Ellis Air Taxi, Lynn Ellis

Era Aviation, Mike Lenorman

ERA, David M. Richards

Frontier Flying, Bob Hajducovich

Grant Aviation, Bruce McGlasson

Hageland, Mike Hageland

Hageland, Patrick Thurston

Hageland, Steve Wahrnke

Harris Air, Fly Hackett

Harris Air, Scott

Harris Air, Scott Harris

Homeland Security, David Bernier

Homeland Security, Ragan, William

Homer Air, Andy Smircich 

Iliamna Air, Tim LaPorte 

Inland Aviation, Stephen Hill

Island Air, Bob Stanford

Island Air, Jennifer Stanford

Katmai Air, Sonny Peterson

LAB Flying Service, Eric Bennett 

Larrys Flying, Jean Chenaille

DHS, Michael Duffy 

Myers, Larry (OST)

Northern Air cargo, Dave Squier

Northern Air Cargo, Keven Schlosstein

OST, Dennis DeVany

Pacific Airways, Steve Montanus

PenAir Consultant, Patrick Rizzi

PenAir, Danny Seybert

PenAir, Kim Kawaguchi

PenAir, Orin Seybert

PenAir, Robert Cohn

PenAir, Scott Bloomquist

ProMech, Mark Sessoms

RITA, Benard Stankus

Salmon Air, Ron Salmon

SeaPort Airlines, Jim Day

SeaPort Airlines, Rob McKinney

SeaPort, Daniel Helland

Servant Air, Wes Osowski

Skagway, Ben Lingle

Smokey Bay Air, Claire McCann

Spernak Airways, Mike Spernak

Tanana Air Service, Brian Martin

Taquan Air Service, Brien Salazaar

Taquan, Beckie Allen

Tatonduk, Controller, Tina Paylor

Tatonduk, Marketing, Robert Ragar

Tatonduk, Owner, Robert Everts

USPS, Greg Garcia USPS, Leonard Kilburn

USPS, Mary Tobias

USPS, Steve Deaton

USPS, Tina Campbell

USPS, William Jones

Warbelows Air Ventures, Art Warbelow

Ward Air, Ed Kiesel

Wings of Alaska, Mike Steadman

Wright Air Service, Bob Bursiel

Yute, Tim Vottis