### 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 19 th 

### day of April , 20 10

Essential Air Service at

MANLEY HOT SPRING S , 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 1 7

, 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, 20 10 . (See

Appendix A for map.)

Background

By Order 2008

- 7

- 20

, issued July 15 , 200 8 , the Department selected Warbelow’s Air

Venture s

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

the two

- year period ending August 31 , 20 10 . That order established an annual subsidy rate

of $ 84,170 for three flights a week over a Fairbanks

- Manley

- Rampart

- Minto

- Fairbank s

routing with 3

- seat Cessna 206 / 207 aircraft. 1



### Request for Proposals

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

the carrier

- selection process before the current contract expire s , 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, 20 10

. Carriers should file

their proposals no later than Ma y 1 7 , 20 10 . 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 anticip ate 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 w ant 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 com munities 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 re ceive

, 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 asymmet rical, 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 the se communit ies

. 4



### We encourage propo sals 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 possibili ties

–

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 subsi dy

- 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 A laska, 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 requirem ents, 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 D epartment’s

authorization of subsidy for the selected service.

4 We note that Wright Air Service and Frontier Flying Service occasionally provide d 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 workp laces 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

carrie rs 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 cer tifications 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 pro hibited 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 communit ies before they submit th eir proposals so that

they can tailor them to the communit ies ’ 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 sho rtly after Ma y 1 7 , 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 ess ential air service at Manley Hot Springs

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

May 1 7 , 20 10

. The p roposals 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

- OST

2004

- 17563 ) ” ; 7



### 2. D ocket 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 disabili ty 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) a nd 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 Q uestions regarding filings in response to this order should be directed to Renée Willi ams at

renee.williams@dot.gov or (202) 366

- 1058.

### 4

3. The D epartment will serve copies of this order on the c ivic 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, 1 4 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

Of fice 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

Historica l Origin

- Destination Traffic at

Manley Hot Springs

, Alaska 1

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

351 8 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 PEQs 2 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 PEQs 2 61 79 65 70 274



### ___________________ 1 

### Sour ce: 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

Historica l Origin

- Destination Traffic at

Minto , Alaska 1

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 PEQs 2 92 116 112 154 473

12 Months ended Decemb er 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 PEQs 2 104 143 118 146 511



### ___________________ 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 can cellations, 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 pe riod 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 b e 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 fo r 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 na tional 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, th en, 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 incorp orate 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 av ailable for performance under this order beyond September 30

, 20 10 . The Government's obligation for performance under this order beyond

September 30 , 20 10 , 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 , 20 10

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

available for performance beyond September 30 , 20 10 , 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, Vanes sa 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 Cen tral 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

Arct ic 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 Foste r

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, Ly nn 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

Harr is 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 Peter son

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 P aylor

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