# Order 2010

- 5

- 13 Served: May

11, 2010


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

Issued b y the Department of Transportation

on the 11 th 

# of May, 2010
Essential Air Service at
LAKE MINCHUMINA , ALASKA
Under 49 U.S.C. 41731 et seq

. DOCKET OST

-2008

- 0237

ORDER REQUESTING PROPOSALS Summary By this order, the Department is requesting proposals by June 10 , 2010 , from carriers interested in providing essential air service (EAS) at Lake Minchumina , Alaska , for a new two

- ye ar period, beginning November 1 , 2010 , with or without subsidy. Background By Order 2008

- 9

- 21 , September 16 , 2008 , the Department selected Tatonduk Outfitters, Ltd., d/b/a Everts Air Cargo (Everts) , to provide subsidized EAS between Lake Minchumina and Fairbanks, Alaska , through October 31 , 2010

. Under that order Everts provides one nonstop round trip per week for 26 weeks with IFR

- equipped 9

- seat Cessna 208 Caravan aircraft, and one nonstop round trip per week for 26 weeks with 5

- seat Piper PA

- 32 aircraft that are not so equipped, at an annual subsidy of $42,560. Request for Proposals As the end of the current rate term approaches , we are hereby requesting proposals from carriers interested in providing service at Lake Minchumina , with or without subsidy, for the two

- ye ar period beginning November 1 , 2010 . Carriers should file their proposals by June 10

. S taff will then docket proposals, thereb y making them public, and direct each carrier to serve a cop y of its proposal on the civic parties and other applicants. Shortly afterwards, we will provide a summary

of the proposals to the community and S tate and ask them to submit their final comments. We will give full consideration to all proposals filed in a timely manner. 1 

# 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 , if necessary, solicit a new round of proposals. However, we anticipate that negotiation or rejection will remain only occasional exceptions to the rule.

1 

## Carriers should not expect the Department to accept late 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 do not proceed with the carrier

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

- free service as proposed.

# - 2

-

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 preci se 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 strongl y encourage clear, well

documented proposals that will facilitate their evaluation by the af fected community and the Department. We do not anticipate any change in our selection criteria, or in the general provisions governing subsidy pay ments for essential air service. 2 

# 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.
Historical Traffic In order to assist carriers in making their traffic and revenue projections, we have included historical traffic for the community in Appendix B. With specific respect to Lake Minchumina, we expect proposals consisting of one or two round trips per week with small aircraft. However, we would not dismiss any proposal out of hand without first consulting with the community officials. For the most recent annual period, Lake Minchumina generated an average of 4.3 deplaned passenger equivalents per week. 3 

# In view of this level of traffic, we would also entertain proposals having two round trips per week with smaller, single

- engine piston aircraft such as the PA

- 32 or one round trip per week with larger IFR

- equipped aircraft such as the 9

- seat Cessna 208. We encourage proposals that meet the community ’s requirements in an efficient manner. Carriers are also welcome to propose more than one service option, if they choose; they need not limit themselves to the current service pattern if they envision other, potentially more attractive service possibilitie s

– different hubs, or seasonal service

– with subsidy requirements that remain competitive. We encourage carriers to work with the community as they are preparing their proposals so that they

can craft them to best meet the community ’s needs. As always, we will fully consider the community ’s views before making a long

-term carrier

- selection decision.

2 

## In selecting a c arrier to provide subsidized essential air service in Alaska , 49 U.S.C. 41733(c) (1) directs us to consider f

ive 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 vie ws ; and (5) experience of the applicant in providing, in Alaska, scheduled air service or significant non

- scheduled air 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. Interested carriers should also be aware that our ge neral provisions governing essential air service will be included in the selection order as part of our authorization of subsidy for the selected service. Appendix C of this order contains those general provisions. 3 

## We have used deplanements, because deplanements at Lake Minchumina, as is typical of bush Alaska, exceed enplanements. Also, we have used passenger equivalents, where 200 pounds of mail or freight is one passenger equivalent, to reflect the importance of mail and freight in Alaska.

# - 3

-

Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobb ying activities, drug

- free workplaces and nondiscrimination. 4 

# 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. Community Comments Civic officials and the State are welcome to submit comments on the proposals at any time. As noted earlier, we will provide a summary of the propos als to the civic parties and ask them to submit their final comments shortly after June 10 , 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. The Department requests proposals from carriers interested in providing essential air service at Lake Minchumina , Alaska

. Carriers should submit their proposals, with subsidy if necessary, by June 10 , 2010

. Proposals should be emailed to EAS@dot.gov, with the title “Proposal to Provide Essential Air Service at Lake Minchumina , Alaska , Docket DOT

OST

- 2008

- 0237

. ” Questions regarding filings may be directed to Kevin Adams at 202

- 366

- 1047 or Kevin.Adams@dot.gov ;
2

. This D ocket will remain open until further order of the Department; and

4 

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

# - 4

-

3 . We will serve this order on the s ervice l ist for this Docket. Persons entitled to petition the Department for review of this order 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 order. This order will be effective immediately, and the filing of a petition for review shall not preclude its effectiveness.
B y:

TODD M. HOMA N 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 Currently Subsidized Communities with Fairbanks as the Hub

Carriers: 3Z, Tatonduk, Q5, 40

- Mile, 4W, Warbelow ’s



# Nonstop, Great Circle Miles from Fairbanks (FAI) Central (CEM) 104 Circle (IRC) 131 Heal y Lake (HKB) 110 Lake Minchumina (LMA) 148 Manley (MLY) 83 Minto (MNT) 50 Rampart (RMP 82

This map is provided by Sabre® AirVision TM Profit Essentials and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Ap pend ix B
Enpl an ed, Lake Minc hu mina Dep lan ed, Lak e Min chu mina O&D, Lake Min ch um in a Ps gr . Eq uival en ts Ps gr . Eq uivalent s Ps gr . Eq uival ent s Year Mont h Ps gr s. Fr eig ht Mail To tal Ps gr s. Fr eig ht Mail To tal Ps gr s. Fr eig ht Mail To tal 2007 4 9 0.9 1.8 11.7 3 7. 8 6. 1 16.9 12 8.7 7.9 28.6 2007 5 1 0.0 1.0 2.0 2 1. 2 5. 5 8. 8 3 1.2 6.6 10.8 2007 6 11 0.1 0.7 11.8 9 2. 1 8. 3 19.4 20 2.2 9.0 31.2 QE 6/30/07 21 1.0 3.6 25.5 14 11.1 19.9 45.0 35 12.1 23.5 70.6

2007 7 6 0.1 0.7 6.8 5 0. 9 9. 8 15.8 11 1.0 10.5 22.6 2007 8 6 1.1 2.0 9.0 4 1. 6 24.4 30.1 10 2.7 26.4 39.1 2007 9 8 0.7 0.8 9.5 12 7. 7 5. 8 25.4 20 8.4 6.5 35.0 QE 9/30/07 20 1.9 3.5 25.4 21 10.3 40.0 71.2 41 12.1 43.5 96.6

2007 10 1 1.0 1.3 3.3 1 2. 7 20.0 23.7 2 3.7 21.4 27.0 2007 11 3 0.0 1.6 4.6 5 6. 7 15.3 27.0 8 6.7 16.9 31.6 2007 12 2 0.0 2.2 4.2 1 4. 2 20.1 25.3 3 4.2 22.3 29.6 QE 12/31/07 6 1.0 5.2 12.2 7 13.6 55.4 76.0 13 14.6 60.6 88.2

2008 1 0 0.0 0.9 0.9 0 1. 2 7. 6 8. 8 0 1.2 8.5 9.7 2008 2 3 0.0 0.8 3.8 2 0. 1 5. 1 7. 1 5 0.1 5.9 10.9 2008 3 7 1.2 0.9 9.1 2 3. 3 8. 4 13.7 9 4.5 9.3 22.8 QE 3/31/08 10 1.2 2.6 13.8 4 4. 6 21.1 29.7 14 5.8 23.6 43.4 YE 3 /3 1/08 57 5.1 14.8 76.9 46 39.5 136.4 221.9 103 44.6 151.2 298.8 2008 4 11 1.8 1.3 14.0 8 0. 7 14.5 23.2 19 2.4 15.8 37.2 2008 5 3 0.5 1.1 4.6 5 1. 4 5. 1 11.5 8 1.9 6.2 16.1 2008 6 3 0.2 0.5 3.6 4 11.2 8. 6 23.8 7 11.3 9.1 27.4 QE 6/30/08 17 2.4 2.9 22.3 17 13.3 28.2 58.5 34 15.7 31.1 80.7

2008 7 2 0.0 0.7 2.7 0 0. 4 3. 1 3. 5 2 0.4 3.8 6.2 2008 8 3 0.1 1.2 4.3 7 6. 5 16.1 29.6 10 6.6 17.4 33.9 2008 9 4 1.9 1.2 7.1 7 6. 9 11.4 25.3 11 8.8 12.6 32.4 QE 9/30/08 9 2.0 3.1 14.1 14 13.8 30.6 58.4 23 15.7 33.8 72.5

2008 10 3 4.5 1.0 8.5 1 0. 2 13.9 15.1 4 4.7 14.9 23.6 2008 11 2 0.0 0.3 2.3 1 1. 4 10.8 13.2 3 1.4 11.2 15.5 2008 12 3 0.2 2.1 5.3 1 1. 7 18.6 21.4 4 1.9 20.8 26.6 QE 12/31/08 8 4.7 3.4 16.1 3 3. 4 43.4 49.7 11 8.0 46.8 65.8

2009 1 0 0.0 0.5 0.5 0 0. 1 8. 3 8. 4 0 0.1 8.8 8.9 2009 2 0 0.0 0.5 0.5 1 0. 1 11.3 12.4 1 0.1 11.8 12.9 2009 3 0 0.0 0.9 0.9 1 0. 4 17.2 18.7 1 0.4 18.1 19.6 QE 3/31/09 0 0.0 1.9 1.9 2 0. 6 36.9 39.5 2 0.6 38.8 41.4 YE 3 /3 1/09 34 9.0 11.3 54.4 36 31.0 139.1 206.0 70 40.0 150.4 260.4 2009 4 3 0.4 0.8 4.1 6 2. 5 19.0 27.5 9 2.9 19.7 31.6 2009 5 1 0.1 0.5 1.5 1 0. 6 5. 4 7. 0 2 0.7 5.8 8.5 2009 6 5 0.6 1.5 7.1 5 2. 3 8. 3 15.7 10 2.9 9.8 22.7 QE 6/30/09 9 1.0 2.7 12.7 12 5. 5 32.6 50.1 21 6.5 35.4 62.9

2009 7 0 0.0 0.4 0.4 4 0. 2 2. 3 6. 4 4 0.2 2.6 6.8 2009 8 1 0.1 0.9 2.0 4 7. 3 10.2 21.5 5 7.5 11.1 23.5 2009 9 1 2.9 0.8 4.7 10 5. 1 13.9 29.0 11 8.0 14.7 33.8 QE 9/30/09 2 3.1 2.1 7.1 18 12.6 26.3 57.0 20 15.7 28.4 64.1

2009 10 4 1.0 0.3 5.3 3 0. 7 10.9 14.6 7 1.6 11.2 19.9 2009 11 1 0.6 1.2 2.7 3 6. 0 13.6 22.7 4 6.6 14.8 25.4 2009 12 1 0.2 0.5 1.7 1 3. 9 12.0 17.0 2 4.1 12.5 18.6 QE 12/31/09 6 1.7 2.0 9.7 7 10.6 36.6 54.2 13 12.3 38.5 63.9

2010 1 1 0.0 0.9 1.9 2 6. 8 11.2 20.0 3 6.8 12.1 21.9 2010 2 0 0.0 0.6 0.6 2 2. 1 7. 0 11.2 2 2.1 7.6 11.8 2010 3 5 0.8 0.5 6.4 7 3. 2 19.7 29.9 12 4.0 20.2 36.3 QE 3/31/ 10 6 0.8 2.0 8.8 11 12.2 37.9 61.1 17 13.0 39.9 69.9 YE 3 /3 1/ 10 23 6.6 8.8 38.4 48 40.9 133.4 222.4 71 47.5 142.2 260.7

# 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 an aircraft take

- off and landing at its schedule d 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 pay ments 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 pay ments 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 mutuall y agreed to in writing by the Department and carrier do not constitute a total or partial reduction or cessation of pay ment. 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 solicitation beyond [DATE]. The Department’s obligation for performance under this solicitation beyond [DATE], is contingent upon the availability of appropriated funds from which pay ment for services can be made. No legal liability on the part of the Government for any pay ment 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 performance beyond [DATE], the carrier will receive notice in writing b y the Department. All claims for pay

ment must be submitted within 60 days of the last day of service provided under this order.

# Appendix D Page 1 of 2 Distribution List , Alaska Bush Carriers

40

- Mile Air, Leif Wilson 40

- Mile Air, Vanessa Thompson Adams, Kevin, Work Aero Twin, AACA, Tony Cestnik Air Excursions, Mike Loverink 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, 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

# Appendix D Page 2 of 2
Michael Duffy (Michael.Duffy@dhs.gov) Myers, Larry (OST) Northern Air cargo, Dave Squier Northern Air Cargo, Keven Schlosstein OST, Dennis DeVany OST, Renee Williams 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 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, G reg Garcia USPS, Leonard Kilburn USPS, Mary Tobias USPS, Steve Deaton USPS, Tina Campbell USPS, William Jones Warbelows Air Ventures, Art Warbelow Everts , Ed Kiesel Wings of Alaska/SeaPort, Nate Vallier Wings of Alaska/Seaport, Rob McKinney Wright Air Service, Bob Bursiel Yute, Tim Vottis