Order 20 1 2

- 7

- 15

Served: July 13 , 20 12



### UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 13 th d ay of July , 20 1 2

Essential Air Service at

ATHENS, GEORGIA

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 2002

- 11348



### ORDER REQUESTING PROPOSALS

Summary By this O rder, the Department is requesting proposals

, by August 1, 2012

, from carriers interested in providing E ssential Air S ervice (EAS) at Athens, Georgia

, for a new contract period beginning October 1 , 20 1 2 , with or without subsidy. (See Appendix A for map.)

Background By Order 2010

- 10

- 5

, October 7, 2010 , the Department selected Pacific Wings

, L.L.C . d/b/a Georgia Skies ( Pacific Wings )

, to continue provid ing EAS at Athens for the two

- year period through September 3 0 , 20 1 2 . That order established an annual subsidy rate of $1, 051

, 386 at
Athens for s ervice consist ing of 1 2 nonstop round trips per week. All service i s operated

nonstop to Atlanta with 9

- seat Cessna C

- 208B Grand Caravan aircraft

.

Legislative Changes Which May Affect Future EAS Eligibility at Athens

The F ederal A viation A dministration (FAA) Modernization and Reform Act of 2012 (Public

Law No: 112

- 95) amended 49 U

. S

. C

. § 41731 (a)(1)(B) to change the definition of “eligible place” for the purpose of receiving EAS. The amendment states that to be eligible, a community must maintain an average of 10 enplanements or more per service day, as determined by the Secretary, during the most recent fiscal year beginning after September 30, 2012

. 1 The legislation exemp t s locations in Alaska and Hawaii and communities that are more than 175

1 The Secretary also has authority to waive the 10 passenger requirement, on an annual basis, if the community can demonstrate that the reason the location averages fewer than 10 passengers per day is due to a temporary decline in
enplanements. See 49 U.S.C

. § 41731(e).2

driving miles from the neares t large or medium hub airport. As Athens i s only about 72 miles

fr om the Atlanta airport, the community must meet the 10

- enplanement

- a

- day threshold for EAS

to continue after FY2013, barring a waiver from the Secretary

.

In the most recent fiscal year for which data are available, FY2011 (October 2010

- September 2011)

, Pacific Wings generated a total of 2,839 passengers (inbound and outbound) , or an average of 4.5 enplanements per day. 2 Carriers submitting proposals should provide a discussion on how they would attract enough passengers to meet the 10 enplanements per d ay statutory requirement in order for Athens to remain eligible to continue receiving EAS after FY2013

. Proposing c arriers should also be aware that the Department will continue to monitor Athens’ eligibility to receive EAS in light of these new requireme nts throughout the life of any executed

contract. The Department may cancel a contract for any community receiving EAS if enplanements remain below 10 per day during FY2013. Communities that believe their enplanements are below 10 per day due to a temporar y decline should provide a detailed explanation of the temporary decline to the Department with relevant supporting documents.

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 Athens , wit h or without subsidy support, for a

new contract period beginning October 1, 20 1 2 . Carriers should file their proposals no later than August 1 . After that date , our staff will docket 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 the proposals to communit y officials and ask them to submit their final comments. We will give full consideration to all proposals filed i n a timely manner. 3

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.

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 ca n 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 enco urage clear, well

- documented proposals that will facilitate their evaluation by the affected community and the Department. 4

2 Source: Bureau of Transportation Statistics; Form 41, Schedule T

- 100. Daily averages are based on one

- half of the O&D passengers, divided by 313 service days (314 during leap years).

3 Carriers should not expect the Department to accept lat e filings. 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 typically do not proceed with the carrier

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

- free service as proposed.

4 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c)(1) directs us to consider four factors: (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub;3

In order to assist carriers in developing traffic and revenue projections for their proposals, we have summarized historical passen gers in Appendix B . In 20 11 at Athens, Pacific Wings generated 1,614 O&D passengers, averaging 2. 6 enplanements a day ; a significant decrease from

the 6,715 passengers and 1 0.7 average daily enplanements generated in 2010

.

Given the current low passenger levels, w e request proposals for service consisting of two
nonstop round trips per day (12 a week) with two

- pilot, twin

- engine aircraft. Of course, as always, we will formally solicit the communit y’s views on any service options we receive before making a long

- term carrier selection decision. The communit y and air carriers are encouraged to work together in advance of the due date for proposals to craft a service pattern that is desirable

to the communit y and meets the operational needs of the airline int erested in submitting a proposal.

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, for example

-- with subsidy requirements that remain competitive.

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 governin g 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 a nd 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

(3) interline arrangements with a larger carrier at the hub; and (4) community views. 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. Interested carriers should also be aware that our general provisions governing EAS

will be included in the selec tion order as part of our authorization of subsidy for the selected service. Appendix C of this order contains those general provisions.

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 bene fiting 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 w orkplace (grants).

6 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.4

Community and State Comments Civic officials are welcome to submit comments on the proposals at any time. As noted earlier, we will provide a summary of the proposals to the civic parties and ask them to submit their final comments shortly after August 1 , 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 interes ted in providing Essential Air S ervice at Athens , Georgia

, submit their proposals, with or without subsidy requests, no later than August 1

, 20 1 2 . The proposals should be emailed to: EAS@dot.gov with the title “Proposal to Provide Essential Air

Service at Athens, Georgia , Docket DOT

- OST

- 200 2

- 1 1348 ”

.

2. Docket DOT

- OST

- 200 2

- 11348 will remain open until further order of the Department; and

3. The Depart ment will serve a copy of this O rder on the mayor and airport manager of Athens

, Georgia

, Pacific Wings, L.L.C. d/b/a Georgia Skies

, and the parties listed in Appendix D.

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

Aviation Economic Regulations, 14 CFR 385.50, must file such petitions within ten (10) days

after the date of service of this O rder.

This O rder will be effective immediately, and the filing of a petition for review shall not

pr eclude its effectiveness.

By:

TODD M. HOMAN

Director Office of Aviation Analysis

(SEAL)

An electronic version of this document is available on line at www.regulations.gov

### Appendix A



## Area Map

### Appendix B

Historical O&D Traffic and Average Daily Enplanements 1

Pacific Wings at Athens, GA



### Origin Destination Total

O&D Average Daily Enplanements 1Q2010 1,044 800 1,844 11.8 2Q2010 950 672 1,622 10.4 3Q2010 1,001 741 1,742 11.1 4Q2010 823 684 1,507 9.6

2010 Total: 3,818 2,897 6,715 10.7

1Q2011 284 252 536 3.4 2Q2011 247 194 441 2.8 3Q2011 208 147 355 2.3 4Q2011 141 141 282 1.8

2011 Total: 880 734 1,614 2.6

________________________________ 1Source: Bureau of Transportation Statistics; TranStats Form 41 , Schedule T

- 1 00

. 2 Daily averages are based on one

- half of the O&D passengers, divided by 313 service days (314 during leap years).

### APPENDIX 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 a n 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 co nsidered 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 contemp lates 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 c ircumstances 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 le vels 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 a nd 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 orde r beyond [DATE] . The Government's obligation for performance under this order beyond [DATE] is contingent upon the availability of appropriated funds from which payment for services can be made. No legal liability on the part of the Government for any pa yment may arise for performance under this order beyond [DATE] , until funds are made available to the Department for performance. If funds are not made available for perfo rmance beyond [DATE] , the carrier will receive notice in writing by the Department.

All claims for payment must be submitted within 60 days of the last day of service provided

under this order.

### Appendix D

Scheduled Air Carriers, Contiguous US and Puerto Rico

Air Sunshine, Inc. Jet Air, Daniel Wolford

Air Sunshine, Mirmohammad Adili Kenmore Air, Tim Brooks
Air West, Inc., John Raatz McCall Aviation and Salmon Air, Dan Scott Air Wisconsin, Annette Daly McCall Aviation, Michelle
Airline Associates, Bill Mishk Mesa Air, Jonathan Ornstein

Alaska Airlines, Jeff Cole Mesa Air, Michael Lotz Alaska Airlines, Sandy Sinick Mesa Air, Mike Holcomb Allegiant Air, Robert Ashscroft Mesaba, John Spanjers
American Airlines, Carl Nelson Mesaba, Max Shemesh American Eagle, Jeffrey Hartz Midstar Airlines, Jeffrey Fonner
Atlantic Southeast, Jon Lindlief Midwest Airlines, Anthony Intravia Atlantic Southeast, Roger Weston Midwest Airlines, Greg Aretakis Bemidji Aviation, Cori Rude Midwest Airlines, J.C. Augustson Bemidji Aviation, Arlen Rinken berger MN Aviation, Jose Maldonado Cape Air, Andrew Bonney Multi Aero, Darnea Cape Air, Dan Wolf Multi Aero, Shane Storz Cape Air, J.Flaherty Northwest, Tim McDonald Classic Aviation, Tony Henderson NYDC, Henok Araya Colgan Air, Mike Colgan OST, Brian Swanson CommutAir, Andy Price OST, Dennis DeVany CommutAir, Joel Raymond OST, Kevin Adams Consultant, Robert Silverberg OST, Kevin Schlemmer
Continental, Bruce Keiner OST, Michael Martin
Continental, Dan Weiss OST, A.J. Muldoon
Continental, Lorry Halloway Pacific Wings, Frank Ford Delta, Amy Martin Pacific Wings, Greg Kahlstorf
Delta, Dan Shuman PenAir, Danny Seybert Delta, Jeff Morgan PenAir, Scott Bloomquist Delta, Joe Esposito Pinnacle Airlines, Joe Williams Delta, Karen Zachary Pinnacle Airlines, Phil Reed
Delta, Sascha Vanderbellen Public Charters, Jim Gallagher

Dorato Jets Scenic, Mary Schneider
Dorato Jets, Mark McKenna Scenic, Mitzi Daines
Era Aviation, Mike Lenorman Seaborne Airlines, Wayne D'Amico
Executive Airlines, Kate Soled SeaPort Airlines, Jim Day Frontier Flying, Bob Hajducovich SeaPort Airlines, Rob McKinney
Gem Air, Dan Schroeder Shuttle America, Jerry Balsano
Gem Air, JoAnn Wolters SkyWest, Eric Christensen
Great Lakes, Chuck Howell SkyWest, Michael Tho mpson Great Lakes, Doug Voss Sovereign Air, Bob Karns Great Lakes, Greg Stephens Sovereign Air, Lois R. Barton
Gulfstream, Dave Hackett Tradewind, Eric Zipkin Gulfstream, Mickey Bowman TransStates, Fred Oxley Gulfstream, T. Cooper Transtates, Gerry Wigmore Homeland Security, Bill Ragan United, Alicia Gabriel Homeland Security, David Bernier United, James Starnes Homeland Security, Randy Webb US Airways, Benjamin Slocum
Horizon Airlines, Dan Russo US Airways, Howard Kass Horizon Airlines, Jennifer Thompson US Airways, Jason Reisinger
Horizon, Jeff Cole Warbelows Air Ventures, Art Warbelow ICEPR, Luis Irizarry Wings Air (Air Greco), Aaron Goerlich
Island Air Charters, Linda House