Order: 2011-1-19

Served: January 21, 2011

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 21st day of January, 2011

 DOT-OST-2000-7855

DOT-OST-2000-7857

ORDER REQUESTING PROPOSALS

Summary

By this order, the Department is requesting proposals from carriers interested in providing 

essential air service (EAS) at Owensboro, Kentucky, and Jackson, Tennessee, for the next twoyear period from September 1, 2011, through August 31, 2013, with or without subsidy. 

Proposals are due March 16, 2011. (See Appendix A for an area map.) 

Background

By Order 2009-6-17, June 22, 2009, the Department selected Pacific Wings, LLC (Pacific 

Wings) to provide 18 nonstop round trips per week from Owensboro and Jackson to Nashville

using 9-passenger Cessna Grand Caravan, for 24 months from when the carrier inaugurated 

service, for a combined annual subsidy rate of $2,294,401 ($1,068,773 for Owensboro and 

$1,225,628 for Jackson). Pacific Wings inaugurated service at both communities on August 31, 

2009, meaning the current contract will expire August 31, 2011. Pacific Wings operates the 

service under the brand names Tennessee Skies and Kentucky Skies.

Special discussion

Based on the most recent 12-month period for which data are available (November 1, 2009, 

through October 31, 2010), 1,284 passengers were enplaned and deplaned at Owensboro, while

Essential Air Service at

OWENSBORO, KENTUCKY

JACKSON, TENNESSEE 

under 49 U.S.C. 41731 et seq.
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5,098 passengers were enplaned and deplaned at Jackson. The annual subsidy amount for 

Owensboro is $1,068,773 and Jackson is $1,225,628. Therefore, the subsidy per passenger is

$832 at Owensboro and $240 at Jackson. The Department is prohibited from subsidizing air 

service at a community where the subsidy per passenger exceeds $200, unless the community is 

more than 210 highway miles from the nearest large or medium hub airport.

1 Owensboro and 

Jackson exceed the $200 per passenger cap and both are fewer than 210 miles from a large or 

medium hub. Owensboro is 140 miles from Nashville International Airport (BNA), a medium 

hub. Jackson is 90 highway miles away from Memphis International Airport (MEM), also a 

medium hub. 

Prior to Pacific Wings’ inaugurating service at Owensboro and Jackson, both communities 

experienced an extended service hiatus. The previous carrier, Big Sky Airlines, ceased 

operations at Owensboro and Jackson on January 6, 2008. Great Lakes Aviation, Ltd. (Great 

Lakes) was selected to serve both communities by Order 2008-2-1, February 6, 2008, but Great 

Lakes never inaugurated service. Thus, Owensboro and Jackson were without scheduled air 

service from January 7, 2008, until August 31, 2009.

Particularly in view of the service hiatuses, rather than terminate service eligibility at either

community, at this stage, the Department will solicit proposals for EAS at both, but the 

Department will evaluate all proposals submitted before committing to a two-year contract or 

making a final determination on Owensboro and Jackson’s continuing eligibility. Prior to the 

due date for proposals, we expect both communities to work aggressively with all potential 

applicants to mitigate some of the risks that the carriers may face in an attempt to lower their 

subsidy levels and/or substantially increase usage of the air service.

Request for Proposals

As the end of the current rate term approaches, we are here requesting proposals from carriers 

interested in providing service at Owensboro and Jackson, with or without subsidy, to be filed no 

later than March 16, 2011. After that date, our staff will docket the proposals, thereby making them 

public. Shortly afterwards, we will provide a summary of the proposals to the communities and ask 

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

filed.2 

Interested carriers should prepare their proposals with every expectation that their initial proposals 

will represent their final and only proposals. However, 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.

 

1 Congress first established the $200 ceiling under P.L. 101-164 for fiscal year 1990, and reestablished it in fiscal 

years 1994-1999. The ceiling was made permanent by P.L. 106-69, the Department of Transportation and Related 

Agencies Appropriations Act of 2000.

2 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 subsidyfree service as proposed.
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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 want 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 communities and the Department.3

With respect to Owensboro and Jackson, we ask that carriers submit proposals for two nonstop 

round trips per day (12 round trips per week) with 15-seat or larger aircraft to Atlanta, Memphis, 

St. Louis, or another suitable hub where numerous connections to the national air transportation 

system can be made. 

While both communities are entitled to service with 15-seat or larger aircraft, we would also 

entertain proposals for eight- or nine-seat aircraft with an additional frequency (18 to 21 round 

trips per week) for either or both communities. If the Department receives proposals for eightor nine-seat, and the community ultimately supports the service, in effect waiving their right to 

15-seat or larger aircraft, we would consider the waiver to apply only to the carrier-selection at 

hand, i.e. we would not assume that the community would waive their rights for all time. As 

always, we will formally solicit the communities’ views on any service options we receive 

before making a long-term carrier selection decision. If service with eight- or nine-seat aircraft 

is proposed, service from each community to the hub should be nonstop.

The communities 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 community and meets the operational 

needs of the airline. In addition, carriers should be very clear as to whether a specific 

community’s proposal is on a stand-alone basis, or whether it is part of a larger, inseparable 

package with the other community.

We encourage proposals that meet these 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 those requirements if they envision other, potentially more attractive service possibilities --

different hubs or length of service terms, for example -- with subsidy requirements that remain 

competitive.

As stated above, we will evaluate all proposals submitted before committing to a two-year 

contract or making a final determination on Owensboro and Jackson’s continuing eligibility.

 

3 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) 

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 

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. 
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New Filing Procedures

Carrier proposals should be submitted to the Department with all materials merged into a single 

document. The document will be published on Regulations.gov and each page should be 

formatted to be viewed online. 

Service and Traffic History

For the 12-month period ended October 31, 2010, the most recent period for which traffic data are 

available, Owensboro averaged 2.1 enplanements per day and Jackson averaged 8.1.

4 In order to 

assist carriers in making their traffic and revenue forecasts, we have included historical traffic data in 

Appendix B.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces, and nondiscrimination.5 Consequently, all carriers receiving 

Federal subsidy for 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. Because 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 certifications. Interested carriers requiring more detailed 

information regarding these requirements should contact the Office of Aviation Analysis at 

(202) 366-5903.6

Community and State Comments

The communities and states are welcome to submit comments on the proposals at any time. As 

noted earlier, however, we will provide a summary of the proposals to the civic parties and ask 

them to submit their final comments shortly after March 16, 2011, the due date for 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 essential air service at Owensboro, Kentucky, 

and Jackson, Tennessee, beginning September 1, 2011, submit their proposals, with or without 

 

4 See Appendix B for historical traffic data. Enplanements represent one-half of total origin-and-destination traffic, 

and average enplanements per day are based on 77 weekdays and weekends each quarter, except as noted.

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 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 (nonprocurement) and 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.
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requests for subsidy, no later than March 16, 2011. The proposals should be e-mailed to 

EAS@dot.gov, with the title: “Proposal to Provide Essential Air Service at Owensboro, 

Kentucky (Docket DOT-OST-2000-7855) and/or Jackson, Tennessee (Docket DOT-OST-2000-

7857)”;7

2. These dockets will remain open until further order of the Department; and

3. We will serve copies of this order on the Mayors of Owensboro and Jackson, the managers of 

Owensboro-Daviess County Regional Airport, McKellar-Sipes Regional Airport (Jackson), and 

the parties listed in Appendix D. 

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.

By:

TODD M. HOMAN

Director

Office of Aviation Analysis

(SEAL)

An electronic version of this document is available at http://www.regulations.gov

 

7 Questions regarding filings in response to this order may be directed via electronic mail to Kevin Schlemmer at 

kevin.schlemmer@dot.gov or via phone at (202) 366-3176.
Appendix A

AREA MAP

This map is provided by Sabre® AirVisionTM Profit Essentials and is being used with express permission of the 

copyright holder, Sabre Airline Solutions®.
 Appendix B

 Page 1 of 2

Traffic History8

Owensboro, KY (OWB)

Year Quarter Month Dest T110 Rpax T110 Rpax Totals Uniquecarriername

2009 3 9 OWB 103 164 267 Pacific Wings Airlines

2009 4 10 OWB 69 106 175 Pacific Wings Airlines

2009 4 11 OWB 65 97 162 Pacific Wings Airlines

2009 4 12 OWB 78 81 159 Pacific Wings Airlines

2010 1 1 OWB 67 74 141 Pacific Wings Airlines

2010 1 2 OWB 62 49 111 Pacific Wings Airlines

2010 1 3 OWB 66 71 137 Pacific Wings Airlines

2010 2 4 OWB 63 76 139 Pacific Wings Airlines

2010 2 5 OWB 55 59 114 Pacific Wings Airlines

2010 2 6 OWB 24 49 73 Pacific Wings Airlines

2010 3 7 OWB 25 42 67 Pacific Wings Airlines

2010 3 8 OWB 15 17 32 Pacific Wings Airlines

2010 3 9 OWB 28 32 60 Pacific Wings Airlines

2010 4 10 OWB 45 44 89 Pacific Wings Airlines

1,284 (12-month total)

Average daily enplanements at Owensboro (12-months ending 10/31/2010) – 2.19

 

8 Source – T-100 Market Report, Passengers in Scheduled Passenger Service.

9 Average daily enplanements= total traffic for the most recent 12-month period (1,284 passengers) divided by 313 

service days divided by 2.
 Appendix B

 Page 2 of 2

Jackson, TN (MKL)10

Year Quarter Month Apt Inbound Outbound Totals Uniquecarriername

2009 3 9 MKL 189 269 458 Pacific Wings Airlines

2009 4 10 MKL 205 262 467 Pacific Wings Airlines

2009 4 11 MKL 245 319 564 Pacific Wings Airlines

2009 4 12 MKL 263 337 600 Pacific Wings Airlines

2010 1 1 MKL 212 183 395 Pacific Wings Airlines

2010 1 2 MKL 173 237 410 Pacific Wings Airlines

2010 1 3 MKL 202 224 426 Pacific Wings Airlines

2010 2 4 MKL 206 263 469 Pacific Wings Airlines

2010 2 5 MKL 192 248 440 Pacific Wings Airlines

2010 2 6 MKL 152 219 371 Pacific Wings Airlines

2010 3 7 MKL 194 232 426 Pacific Wings Airlines

2010 3 8 MKL 150 180 330 Pacific Wings Airlines

2010 3 9 MKL 147 207 354 Pacific Wings Airlines

2010 4 10 MKL 142 171 313 Pacific Wings Airlines

5,098 (12- month total)

Average daily enplanements at Jackson (12-months ending 10/31/2010) – 8.111

 

10 Source – T-100 Market Report, Passengers in Scheduled Passenger Service. Pacific Wings Airlines service only.

11 Average daily enplanements= total traffic for the most recent 12-month period (5,098 passengers) divided by 313 

service days divided by 2.
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 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 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 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 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 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 Government’s obligation for performance under this solicitation 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 payment 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 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 Greco/Wings Air McCall Aviation, Dan Scott

Air Sunshine, Inc. McCall Aviation, Michelle

Air Sunshine, Mirmohammad Adili Mesaba, John Spanjers 

Air West, Inc., John Raatz Mesaba, Max Shemesh

Air Wisconsin, Annette Daly MidStar Airlines, Jeffrey Fonner

Air Wisconsin, Jim Rankin Midwest Airlines, Greg Aretakis

Airline Associates, Bill Mishk MN Aviation, Jose Maldonado 

Alaska Airlines, Jeff Cole Multi Aero, Darnea

Alaska Airlines, Sandy Sinick Multi Aero, Shane Storz

Allegiant Air, Brian Davis Northern Air Cargo, David Karp

American Airlines, Carl Nelson Northern Air Cargo, Eric Van Andel

American Eagle, Jeffrey Hartz Northwest, Tim McDonald 

Atlantic Southeast, Jon Lindlief Northwest, Aaron Murray

Atlantis Southeast, Roger Weston NYDC, Henok Araya

Aviation Technologies/Charter Air Transport OST, Brian Swanson

Bemidji Aviation, Cori Rude OST, Dennis DeVany

Bemidji Aviation, Arlen Rinkenberger OST, Kevin Adams

Cape Air, Andrew Bonney OST, Kevin Schlemmer

Cape Air, Dan Wolf OST, Michael Martin 

Cape Air, J. Flaherty Pacific Aviation Group, Craig Garrick

Classic Aviation, Tony Henderson Pacific Aviation Group, Ron Pye

Colgan Air, Mike Colgan Pacific Wings, Frank Ford

Colgan Air, Kevin Scott Pacific Wings, Greg Kahlstorf

CommutAir, Andy Price PenAir, Danny Seybert

CommutAir, Joel Raymond PenAir, Scott Bloomquist

Consultant, Robert Silverberg Pinnacle Airlines, Jennifer Gammill

Continental, Bruce Keiner Pinnacle Airlines, Megan Rosia

Continental, Dan Weiss Pinnacle Airlines, Phil Reed

Continental, Lorry Halloway Planemasters, Inc. John Kessler

Delta, Anthony Canitano Planemasters, Inc. Paul Berliner

Delta, Dan Shuman Planemasters, Inc. Todd DeSimone

Delta, Jeff Morgan Raytheon, Mike Scheidt

Delta, Joe Esposito Saab Group, Polly Prelinger

Delta, Karen Zachary Scenic, Mary Schneider

Delta, Kristal Murphy Scenic, Mitzi Daines

Delta, Sascha Vanderbellen Seaborne Airlines, Shawn Lewis

DHS, Bill Ragan SeaPort Airlines, Daniel Helland

DHS, David Bernier SeaPort/Wings of Alaska, Jim Day

Dorado Jets SeaPort/Wings of Alaska, Nate Vallier

Dorado Jets, Mark McKenna SeaPort/Wings of Alaska, Rob McKinney

Era Aviation, Lori Goodman Shuttle America, Jerry Balsano 

Executive Airlines, Kate Soled SkyWest, Brad Rawson

Frontier Flying, Bob Hajducovich SkyWest, Eric Christensen

Frontier, Daniel Shurz SkyWest, Michael Thompson

Frontline Aviation Sovereign Air, Bob Karns

Gem Air, Dan Schroeder Sovereign Air, Lois R. Barton

Gem Air, JoAnn Wolters Tatonduk, Robert Everts

Pacific Wings, Chuck Howell Tatonduk, Robert Ragar

Pacific Wings, Doug Voss Tradewind, Eric Zipkin 

Gulfstream, Dave Hackett TransStates, Fred Oxley 

Gulfstream, Mickey Bowman TransStates, Gerry Wigmore

Gulfstream, T. Cooper Transport Azumah, Joel Anabilah-Azumah

Horizon Air, Dan Russo United, Alicia Gabriel

Horizon Air, Jennifer Thompson United, James Starnes

Horizon Air, Mike McQueen US Airways, Benjamin Slocum

Horizon Air, Jeff Cole US Airways, Howard Kass

ICEPR, Luis Irizarry US Airways, Jason Reisinger 

Intrepid Internatl Air, Rick Eyk Warbelows Air Ventures, Art Warbelow

Island Air Charters, Linda House

Jet Air, Daniel Wolford

Kenmore Air, Tim Brooks