O rder: 2014

- 5

- 11 Served: May 22, 2014



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 22nd of May , 20 1 4

ORDER REQUESTING PROPOSALS

Summary By this O rder, the Department is requesting proposals from air ca rriers interested in providing

E ssential A ir S ervice (EAS) at Lebanon, New Hampshire/White River J unction, Vermont (Lebanon)

, for a new contract period beginning December 1, 201 4 , with or without subsidy

. (See Appendix A for a map). Air c arriers should file their proposals no later than

June 30

, 2014

.

Background
By Order 2010

- 10

- 12 (October 19, 2010 ), the Department re

- selected Hyannis Air Service, Inc. d/b/a Cape Air (Cape Air)

, to provide EAS at Lebanon for a four

- year period beginning

December 1, 2010

. Under that Order, Cape Air provides Lebanon with 4 daily nonstop round trips (28 per week) to B oston Logan International Airport (Boston) and 2 daily nonstop round trips (14 per wee k) to Westchester County Airport in White Plains, New York (White Plains) using 9

- passenger Cessna 402 aircraft for an annual subsidy of $2,347,744

.

The complet e public file for EAS at Lebanon may be accessed online through the Federal Dockets Management System at www.regulations.gov by entering “DOT

- OST

- 2003

- 14822 ” in the “Search for Rules, Comments, Adjudications, or Supporting Documents” field.

Request for Proposals

As the end of the current contract approaches, the Department is requesting proposals from air carriers interested in providing EAS at Lebanon

, with subsidy support if necessary , for a new contract period beginning December 1

, 201 4

. Carriers should file their proposals no later than

June 30

, 20 14

. Staff will the n docket the proposals, thereby making them public

. Shortly afterwards, we will provide a summary of the proposals to the communit y and ask them to

Essential Air Service at

LEBANON, NEW HAMPSHIRE/ WHITE RIVER JUNCTION, VERMONT

Under 49 U.S.C. § 41731 et seq

. Docket DOT

- OST

- 200 3

- 14822- 2

-

submit their final comments. We will give full consideration to all proposals that are timely

filed. 1

Interested air carriers should prepare their proposals with every expectation that their initial proposals will represent their final and only proposals. How ever, we retain the discretion to negotiate proposals with carriers when we deem it desirable; in such cases, of course, we will give all applicants the same opportunity. We also retain the discretion to reject outright all unreasonable or unrealistic pro posals and re

- solicit a new round of proposals. However, negotiation and rejection are 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, b ut we will not prescribe a precise format for their proposals. 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. 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 a s to the level of detail they wish to present; however, we recommend they include information concerning proposed

schedules and projected block hours . In addition, applicants are urged to provide financial data supporting their subsidy requests, including information on their projected expenses and

revenues. We strongly encourage clear, well

- documented proposals that will facilitate their evaluation by the affected communit ies and the Department. 2

Proposals should provide sufficient capacity to accommoda te historical levels of traffic. In order to assist air carriers in developing traffic and revenue projections for their proposals, we have provided a summary of historical passengers in Appendi x B. During the year ended

December 31

, 2013, Lebanon averag ed 32 enplanements per day. The Department expects proposals that are co nsistent with what the community currently receives (six daily round trips

with 9

- passenger aircraft) to a hub airport that provides numerous connecting opportunities to

the national air transportation system. For carriers proposing 19

- seat aircraft, we expect proposals for 3 round trips a day (18 per week), or 2 round trips a day (12 per week) with larger aircraft. Air c arriers are also welcome to propose more than one service optio n, if they

1 Carriers should not expect th e Department to acce pt late fil ings. In cases where a carrier proposes to provide

EAS without subsidy and we determine that basic EAS, as required by 49 U.S.C. § 41732, can be reliably provided without such compensation, we typically will not proceed with the carrier

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

- free service as proposed.

2 In selecting a carrier to provide subsidized EAS for an eligible place not in Alaska, 49 U.S.C. § 41733(c)(1) directs us to consider five factors: (a) service reliabil ity; (b) contractual and marketing arrangements with a larger carrier at the hub; (c) interline arrangements with a larger carrier at the hub; (d) community views, giving substantial weight to the views of the elected officials representing the users; and (e) whether the carrier has included a plan in its proposal to market its service to the community. In addition, the Consolidated Appropriations Act, 2014, Public Law No. 113

- 76, provides that when selecting a carrier to provide EAS, the Department may co nsider the relative subsidy requirements, thus codifying a factor that we have considered since the inception of the program. Interested carriers should also be aware that our general provisions governing

Essential Air Service will be included in the sele ction Order as part of our authorization of subsidy for the selected service. Appendix C of this Order contains those general provisions.- 3

-

choose. T hey also need not limit themselves to the se requirements if they envision other, potentially more attractive service possibilities

-- different hubs or length of contract, for example

-- with subsidy requirements that remain competitiv e.

Community Comments The community and State are welcome to submit comments at any time. We encourage prospective applicants to contact the community before they submit their proposals so that they can tailor them to the community’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 shortly after the deadline for carrier proposals, and ask them to submit their final comments.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces, and nondiscrimination. 3 Consequently, all carriers receiving Federal subsidy for EAS must certify that they are in compliance with Dep artment regulations regarding drug

- free workplaces and nondiscrimination, and those carriers whose subsidies exceed $100,000 over the life of the contract must also certify that they are in compliance with the regulations governing lobbying activities. Be cause the Department is prohibited 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 certific ations. Interested carriers requiring more detailed information regarding these requirements should contact the Offic e of Aviation Analysis at (202) 366

- 5903. 4

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

- delegated to the Director, Office of Aviation Analysis.

ACCORDINGLY, 1. We request that carriers interested in providing Essential Air Service at Lebanon, New Hampshire/White River Junction, Vermont

, submit their proposals, with subsidy support if

necessary , no later th an June 30

, 20 14 . The proposals should be e

- mailed to: michael.f.martin@dot.gov with the title “Proposal to Provide E AS at Lebanon ”; 5

2. Th is docket will remai n open until further O rder 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; (3) 49 CFR Part 27

-- Nondiscrimination on the Basis of Disability in Programs and Activities Receiving or Benefiting from Federal Financial Assistance; (4)

14 CFR Part 382

-- Nondiscrimination on the Basis of Disability in Air Travel; and (5) 49 CFR Part 29

-- Government

- Wide Debarment and Suspension (Non

- Procurement) and Government

- Wide Requirements for

D rug

- Free Workplace (Grants).

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

- policy/small

- community

ru ral

- air

- service/essential

- air

- service

. 5 Questions regarding filings in response to this O rder may be directed to Michael Martin at (202) 366

- 6494 or michael.f.martin@dot.gov

.- 4

-

3 . We will serve copies of this O rder on the M ayor s of Lebanon

, New Hampshire, and White River Junction, Vermont; the Airport Manager of Lebanon Municipal Airport; the Vermont Department of Transportation; and the service list for this docket.

Perso ns entitled to petition the Department for review of this Order under the Department’s Regulations, 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, an d 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

o nline at www.regu lations.gov

.Appendix A

AREA MAP

Maps generated by the Great Circle Mapper

- co pyright © Karl L. Swartz

.Appendix B

Lebanon, NH

Quarter Year Deplanements Enplanements Total Traffic Enplanements per Day

1 2010 1,406 1,424 2,830 18

2 2010 1,930 1,963 3,893 25

3 2010 2,144 2,096 4,240 27

4 2010 2,2 00 2,216 4,416 28

Annual

Totals 7,680 7,699 15,379 25

1 2011 1,756 1,676 3,432 22

2 2011 2,255 2,314 4,569 29

3 2011 2,613 2,620 5,233 33

4 2011 2,411 2,471 4,882 31

Annual

Totals 9,035 9,081 18,116 29

1 2012 2,181 2,143 4,324 28

2 2012 2,488 2,538 5,026 32

3 2012 2,703 2,667 5,370 34

4 2012 2,720 2,551 5,271 33

Annual

Totals 10,092 9,899 19,991 32

1 2013 2,145 2,020 4,165 27

2 2013 2,468 2,457 4,925 32

3 2013 2,589 2,638 5,227 33

4 2013 2,970 2,842 5,812 37

Annual

To tals 10,172 9,957 20,129 32Appendix 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 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

com pleted 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 per iod 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 carri er 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 adj usted 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 comple te, 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 s ervice 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 Depar tment and carrier do not constitute a total or partial reduction or cessation of payment.

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 on 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 perform ance. If sufficient funds are not made available for performance beyond [DATE] , the Department will provide notice in writing to the carrier.

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.

All claims for payment, including any amended cl aims, must be submitted within 9 0 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.