O rder: 2014

- 4

- 4 Served: April 3, 2014



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 3 rd of April , 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 Alpena, Michigan

, for a new contract period beginning

October 1, 201 4 , wi th or without subsidy

. (See Appendix A for a map). Air c arriers should file their proposals no later than May 14

, 2014

.

Background
By Order 2012

- 6

- 20 (June 22

, 2012 ), the Department selected SkyWest Airli nes, operating as

Delta Connection (SkyWest) to p rovide EAS at Alpena for a two

- year period beginning when the airline inaugurated full EAS at the community. 1 Under that Order, SkyWest provides Alpena with 12 nonstop round trips per week to either Minneapolis

- St. Paul International Airport (Minneapolis ) or Detroit Metropolitan Wayne County Airport (Detroit) using 50

- passenger Canadair Regional Jet CRJ200 (CRJ200 ) aircraft for an annual subsidy of $3,098,472.

The complet e public file for EAS at Alpena may be accessed online through the Federal

Dockets Ma nagement System at www.regulations.gov by entering “DOT

- OST

- 2009

- 0300 ” in the “Search for Rules, Comments, Adjudications, or Supporting Documents” field.

Request for Proposals

As the end of the current contract a pproaches, the Department is requesting proposals from air carriers interested in providing EAS at Alpena

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

, 201 4

. Carriers should file their proposals no later than

1 SkyWest inaugurated service at Alpena on September 5, 2012

, and thus making the contract expiration date September 30, 2014.

Essential Air Service at

ALPENA, MICHIGAN

Under 49 U.S.C. § 41731 et seq

. Docket D OT

- OST

- 2009

- 0300- 2

-

May 14

, 2 0 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 submit their final comments. We will give full consideration to all proposals that are timely

filed. 2

Interested air 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; 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 proposals and re

- solicit a new round of proposals. However, negotiation and rejecti on 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, but we will not prescribe a precise format for their proposals. Air carrier propo sals 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 as 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 cle ar, well

- documented proposals that will facilitate their evaluation by the affected communit ies and the Department. 3

Proposals should provide sufficient capacity to accommodate historical levels of traffic. In order to assist air carriers in developing t raffic 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, Alpena averaged 50 enplanements per day. The Department expects proposals that are co nsistent with what the community currently receives, with service to a large

- or medium

- hub airport that provides numerous connecting opportunities to the national air transportation system. Specifically, air carriers should propose 2 round trips each weekday

2 Carriers should not expect th e Department to accept late fil ings. In cases where a carrier propo ses 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

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

- free service as proposed.

3 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 reliability; (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 i ts 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 consider the relative subsidy requirements, thus c odifying 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 subs idy for the selected service. Appendix C of this Order contains those general provisions.- 3

-

and weekend (12 per week) with 30

- passenger or larger aircraft. For air carriers proposing

service with 15

- seat to 29

- seat a ircraft, we expect 3 roun d trips each weekday and weekend (18 per week). We would also consider proposals with 8/9

- seat aircraft and a dditional frequencies. Air c arriers are also welcome to propose more than one service option, if they

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 competitive.

Community Comments The community is welcome to submit comments at any time. We encourage prospective applicants to contact the community before they submit the ir 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 proposa ls, 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. 4 Consequently, all carriers re ceiving Federal subsidy for EAS 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 contract must also certify th at 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 a ware that the selected carrier will be required to complete the required certifications. Interested carriers requiring more detailed information regarding these requirements should contact the Offic e of Aviation Analysis at (202) 366

- 5903. 5

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 Alpena, Michigan, submit their proposals, w ith subsidy support if necessary , no later than May 14

, 20 14 . The

4 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 P rograms 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 Drug

- Free Workplace (Grants).

5 The certification s are also available on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

rural

- air

- service/essential

- air

- service

.- 4

-

proposals should be e

- mailed to: michael.f.martin@dot.gov with the title “Proposal to Provide

E AS at Alpena, Michigan ”; 6

2. Th is docket wil l remai n open until further O rder of the Department; and

3 . We will serve copies of this O rder on the mayor of Alpena, Michigan

, the airport director

of Alpena County Regional Airport , and the service list for this docket.

Persons entitled to petition t he 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, and the filing of a petitio n 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.regulations.gov

.

6 Ques tions regarding filings in response to this O rder may be directed to Michael Martin at (202) 366

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

.Appen dix A

AREA MAP

Maps generated by the Great Circle Mapper

- copyright © Karl L. Swartz

.Appendix B

Alpena, MI

Quarter Year Deplanements Enplanements Total Traffic Enplanements per Day

1 2010 1,576 1,752 3,328 22

2 2010 2,019 1,880 3,899 25

3 2010 2,646 2,769 5,415 34

4 2010 2,209 2,229 4,438 28

Annual

Totals 8,450 8,630 17,080 27

1 2011 2,187 2,461 4,648 30

2 2011 3,097 2,904 6,001 38

3 2011 3,526 3,839 7,365 47

4 2011 2,966 2, 985 5,951 38

Annual

Totals 11,776 12,189 23,965 38

1 2012 2,261 2,444 4,705 31

2 2012 2,830 2,561 5,391 35

3 2012 3,663 4,020 7,683 49

4 2012 3,789 3,836 7,625 48

Annual

Totals 12,543 12,861 25,404 41

1 2013 3,550 3,830 7,380 48

2 2 013 4,614 4,448 9,062 58

3 2013 3,959 4,274 8,233 52

4 2013 3,291 3,341 6,632 42
15,414 15,893 31,307 50Appendix C

Example of General Terms and Conditions for Essential Air Service

The carrier understands that it may forfeit its compensation for any fligh ts 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 tha t 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 cont emplates 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. Shoul d 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 compensa ted. 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 provi ded to the community.

If the Department unilaterally, either partially or complete, 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 t he 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 lev els 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.

Funds may not be available for performance under this Order beyond [DATE]. The Gove rnment’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 performance. 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 t o, 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 fo r 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.