Order: 201 5

- 2

- 4

Served Februrary 9 , 201 5

U N I T E D S

T A T E S O F A

M E R I C A D E P A R T M E N T O F T R A N S P O R T A T

I O N UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 9 th day of Februrary , 20 1 5

Essential Air Service at

TATITLEK , ALASKA

Under 49 U.S. C. § 47131 et seq. DOCKET DOT

- OST

- 2013

- 0030



### ORDER REQUESTING PROPOSALS

Summary By this Order, the Department is requesting proposals from air carriers interested in pr oviding Essential Air Service (EAS ) at Tatitlek , Alaska

, with or without subsidy sup port , beginning

October 1, 201 5 . Proposals are due March 20 , 201 5

. (See Appendix A for a map. )

B a c k g r o un d By Order 2013

- 8

- 1 , issued on August 2, 2013

, the Department selected Reeve Air Alaska, LLC (Reeve), to provide subsidized EAS at Tatitlek , using P iper Navajo PA

- 31 aircraft with up to 7

passenger seats , with two nonstop round trips per week to Anchorage , for the period of

October 1, 2013 , through September 30, 2015 , at an annual subsidy rate of $ 93,080

.

That Order, as well as the complete public file for EAS at Tatitlek

, may be accessed online through the Federal Docket Management System at http://www.regulations.gov , by entering

“DOT

- OST

- 2013

- 0030 ” in the “ SEARCH for: Rules, Comments, Adjudications or Su pporting

Documents:” field.

Request for Proposals

As the end of the current rate term approaches, the Department is requesting proposals from air carriers interested in providing EAS at Tatitlek

, with or without subsidy support , for the two

- year period b eginnin g October 1, 2015 . Air carriers should file their proposals no later than

March 20, 2015 . After that date, Departmental staff will docket the proposals, thereby making them public. Additionally, the Department request s each air carrier serve a co py of its proposal on the civic parties at Tatitlek and on the other applicants. Shortly afterwards, the Department will provide a s ummary of the proposals to the community and ask them to submit any formal2

comments on this carrier

- selection case. The De partment will give full consideration to all proposals that are timely filed. 1

The following consists of some basic informa tion to serve as guidance when air carriers prepare their proposals, but the Department will not prescribe a precise format for pr oposals. Air 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 www.regulations.gov , each page should be formatted to be viewed online. The Department

expect s 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 prese nt; however, the Department recommend s they include information concerning proposed schedules and projected block hours. In addition, applicants are encouraged to provide financial data supporting their subsidy requests, including information on their pro jected expenses and revenues. We strongly encourage clear, well

- documented proposals that will facilitate their evalua tion by the affected community and the Department. 2

Proposals should provide sufficient capacity to accommodate historical levels. Speci fically, the Department request s proposals for two nonstop round trips a week between T atitlek and Anchorage , or another suitable hub airport, with small aircraft ( 9

- seats or less). Appendix B

contains historical traffic levels to assist air carriers in m aking traffic and revenue forecasts

. Typically in Alaska, mail and freight flows are asymmetrical, with up to 90% of the total mail and freight flowing outbound from the hub airport to the EAS community

. Historical traffic data (Appendix B) show that two round trips a week is sufficient to fulfill the EAS needs of Tatitlek

.

Interested air carriers should prepare their propo s al with every expectation that their initial proposal will also be their final and only proposal. The Department retain s the discr etion to negotiate proposals with air carriers when the Department deem s it desirable; in such cases the Department will give all applicants the same opportuni t y. The Department also retain s the discretion to reject outright all unreasonab l e or unrealisti c proposals and solicit a new round of proposals. However, negotiation or rejection s will remain on l y occasional exceptions to

the rule.

1 Air carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide

EAS without subsidy and we determine that s ervice can be reliably provided without such compensation, we usually do not proceed with the carrier

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

- free service as proposed.

2 In selecting a carrier to provide subsidized EAS in Alaska , 49 U.S.C. § 41733(c)(1) directs the Department to consider six factors: (1) service reliability; (2) contractual and marketing arrangements with a larger air carrier at the hub; (3) interline arrangements with a larger air carrier at the hub (4) communit y views; (5) the experienc e of the applicant in providing air service in Alaska, scheduled air service or significant patterns of non

- scheduled air service; and (6) whether the air carrier has included a plan in its proposal to market the service. In addi tion, the Consolidated Appropriations Act, 2012, Public Law 112

- 55, and continued by the Consolidated and Further Continuing Appropriations Act, 2015, Public Law No. 113

- 235 , provides that when selecting a carrier to provide EAS, the Department may conside r the relative subsidy requirements, thus codifying a factor that has been considered since the inception of the program. Interested air carriers should also be aware of the general provisions governing EAS , which will be included in the selection Order as part of the Department’s authorization of subsidy for the selected service. Appendix C of this Order contains those general provisions.3

O t h e r Air Ca rr i e r R e qu i reme n t s The Department is responsible for implementing various Federal statutes governing l obb ying

activities , drug

- free workplaces and nondiscrimination

. Consequent l y, all air carriers receiving Federal subsidy to support EAS must certify that they are in compliance with Department regulations regarding drug

- free workplaces and nondiscrimination, and those air

carr i ers whose subsidies exceed $100,000 over the life of the rate term must also certify that they are in compliance with the regu l ations governing lobbying activities. All air carriers that plan to submit proposals involving subsidy shoul d submit the required certifications along with their proposals. Interested air carriers requiring more detailed infor m ation regarding

the s e requirements, as well as copies of the certifications, should contact the Off i ce of

Aviation Ana l ysis at (202) 366

- 5903. The Department is prohibited from paying subsidy to

air carriers that do not submit these document s

. 3

C o m m un i t y C o m m e n ts
Civic officials and the State are welco m e to submit comments at any time. The Department

encourage s prospective applicants to contact the communi t y before they submit their proposals so that they can tailor them to the communi t y ’ s needs, as they will not be ab l e to amend them after the due date. As noted earlier, the Department will provide a copy of the

propo s als to the civic parties and ask them to submit their final comments short l y after

March 20, 2015 , the due da t e for air carr i er proposals.

This Order is issued under authority delegated in 49 CFR Part 1.25a(b) and re

- delegated to the Director, Office of Aviation Analysis.

ACCORDI N G L Y,

1. The Department request s that air carriers interested in providing E ssential A ir S erv i ce at
Tatitlek

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

March 20, 2015 . The proposals should be emailed to: EAS@dot.gov with the title “Proposal

to Provide Essential Air Service at T atitlek , Alaska ; ” 4

2

. Docket DOT

- OST

- 20 13

- 0030 will remain open until furt her Order of the Department; and

3 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 benefi ting 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 wor kplace (grants). The certifications are available

on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

- rural

- air

- service/es sential

- air

- service

. 4 Questions regarding filings in response to this Order should be directed to Mr. Scott Faulk at scott.faulk@dot.gov or (202) 366

- 9967.4

3

. The Department will serve cop i es o f this Order on the civic offic i als of T atitlek , Alaska

, the Alaska Department of Transportation and Public Facilities, and the service list for this docket

.

Persons entitled to petition the Department for review of this Order under the Department’s Regul ations, 14 CFR Part 385.31(a), must file such petitions within seven (7) 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

An electronic version of this document is available

online at www.regulations.gov.Appendix A



### A R EA M AP

M ap s g ene r a t e d b y t h e G r eat Ci r cle M appe r

- c op y r i g h t © Ka r l L. S w a r t z

.Appendix B



### Tatitlek , Alaska 1

Year Quarter Freight
PEQ Mail
PEQ PAX Total Year Quarter Freight
PEQ Mail
PEQ PAX Total Year Quarter Freight
PEQ Mail
PEQ PAX Total

2011 4 0 2 0 2 2011 4 14 49 0 63 2011 4 14 51 0 65

2012 1 1 1 0 2 2012 1 22 48 0 70 2012 1 23 49 0 72

2012 2 1 3 7 11 2012 2 2 33 7 43 2012 2 3 36 14 54

2012 3 1 6 0 7 2012 3 11 42 0 53 2012 3 12 48 0 60

3 12 7 22 49 173 7 229 52 185 14 251

2012 4 1 3 0 4 2012 4 15 40 0 54 2012 4 16 43 0 58

2013 1 1 2 0 3 2013 1 1 37 0 38 2013 1 2 39 0 41

2013 2 1 2 0 3 2013 2 5 31 0 36 2013 2 6 33 0 39

2013 3 0 2 7 9 2013 3 8 37 6 51 2013 3 8 39 13 60

3 9 7 19 28 145 6 179 31 154 13 198

2013 4 0 2 29 31 2013 4 48 35 28 111 2013 4 48 37 57 142

2014 1 5 2 30 37 2014 1 53 32 41 126 2014 1 58 34 71 163

2014 2 2 3 62 67 2014 2 106 30 48 184 2014 2 108 34 110 251

2014 3 1 12 60 73 2014 3 83 35 58 176 2014 3 84 46 118 248

8 19 181 208 289 132 175 596 297 151 356 804 Origination Destination Total Origin and Destination

1 Source: Bureau of Transportation Statistics; Schedu le T

- 100. PEQs: Passenger Equivalents. Every 200 pounds of freight or mail is the equivalent of one passenger.Appendix C

Example of General Terms and Conditions for Eassential Air Service

The air c a rr i e r un d er st a nds t h a t it m a y f o rfe it its c omp e ns a tion f or a n y f li g hts th a t it do e s not

op era te in c o n f o r m a n c e with the t er ms a nd stipul a tions of the ra te Order

, i n c luding the s er vi c e pl a ns outlin e d in the Order a nd a n y oth e r s i g ni f i c a nt e l e m e nts of the re qui re d s er vi ce , without

p r ior a p p r ov a l. The air c arr i e r und e r st a nds th a t a n a i r cr a f t t a k e

- o f f a nd l a nding a t its s c h e du l e d

d e stin a tion c onstitut e s a c ompl e t e d f li g ht; a bs e nt a n e x pl a n a tion suppo r ting subsi d y e li g i b ili t y f o r

a f l i g ht th a t h a s n ot b ee n c ompl e t e d, su c h a s cer t a in w ea th e r c a n ce ll a tions, o n l y c ompl e t e d f li g hts

a r e c onsid ere d e l i g ible f or su b si d y

. I n a ddition, if the air carr i e r d o e s not s c h e dule or o p era t e its

f li g hts in f ull c on f o r m a n c e with the Order f o r a s i g ni f i ca nt p e r iod, it m a y j e op ar di z e its e nti r e subsi d y c l a im f or t he p er iod in qu e stion. I f the air c a rr i e r c ont e mpl a t e s a n y su c h c h a ng e s b e y ond

the s c ope o f the Order du r ing the a ppli ca ble p e r iod of th e se ra t e s, it must f i r st noti f y the O ff i c e of

Avi a tion An a l y sis in w r iti n g a nd r ece ive w r itt e n a pp r o v a l f r om the D e p a r tm e nt to be e nsu re d o f

f ull c omp e ns a tion. S hould c i rc umst a n ce s w ar r a n t , the D e p ar tm e nt m a y l o c a te a nd s e l e c t a

re pl a ce m e nt air c arr i e r to p r ovide s er vi c e on th e se r out e s. The air c a rr i e r must c ompl e te a ll

f li g hts th a t ca n b e s a f e l y op era t e d; f l i g hts th a t ov e rf l y points f o r l ac k of t r a f f ic will not be

c omp e ns a t e d. I n d e t er m i ning wh e t h e r subsi d y p a y m e nt f o r a d e v i a ting f l i ght should be a djust e d

or dis a llow e d, t he D e p a r tm e nt will c onsid e r the e x t e nt to whi c h the g o a ls of the p r og ra m a r e m e t

a nd the e x t e nt o f acce ss to the n a tion a l a ir t ra nspo r t a tion s y s t e m p r ovid e d to the c ommuni t y

.

I f the D e p ar tm e nt unil a t e ra l l y
, e ith e r p a r ti a l l y or c ompl e t e l y , t er min a t e s or re du ce s p a y m e nts f or

s e r vi c e or c h a ng e s s er vi c e r e qui re m e nts a t a sp ec i f ic lo c a tion p r ovid e d f or un d e r this Order, th e n,

a t the e nd of the p e r iod f or whi c h the D e p ar tm e nt d o e s m a ke p a y m e nts in the stipul a t e d a mounts

or a t the stipul a t e d s er vi c e l e v e ls, the air c a rr i e r m a y cea se to p r ovide s er v i c e t o th a t sp ec i f ic

lo c a tion without re g a r d to a n y r e qui re m e nt f or noti c e of su c h c e ss a tion. Those a djustm e nts in the

l e v e ls of subsi d y a nd/or s er vi c e th a t ar e mutu a l l y a g r ee d to in w r iting b y the D e p ar tm e nt a nd air

ca r r i e r do not c on s titute a tot a l or p ar ti a l re d u c tion or ce ss a tion of p a y m e nt.

S ubsi d y c ont r a c ts ar e su b j ec t to, a nd in c o r po r a te b y r ef e re n c e
, r e l e v a nt st a t ut e s a nd D e p ar tm e nt

r e g ul a tions, a s th e y m a y be a m e nd e d fr om time to tim e . How e v er
, a n y su c h st a tut e s, r e g ul a tions,

or a m e ndm e nts th ere to sh a ll not op era te to c ont r o v er t the f o r e g oi n g p ar a g r a ph.

Funds may not be available for performance under this Order beyond [DATE] . The Government’s obligation for performance under this Order beyond [DATE] , is subject to the availability of funds from which payment for services can be made. No legal liability o n the part of the Government for any payment may arise for performance under this Order beyond [DATE] , until funds are made available to the Department for performance. If sufficient funds are not made available for performance beyond [DATE] , the Departmen t will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which compensation is being claimed. For example, claims for service provided in July must be filed by October 31 st ; August claims must be submitted by November

30 th , and so on.