Or der: 20 1 2

- 4

- 9

Served : April 6 , 201 2



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 6th of April , 201 2

Essential Air S ervice at

WEST YELLOWSTONE

, MONTANA

under 49 U.S.C. 41731 et seq. Docket DOT

- O ST

- 2003

- 14626

ORDER SELECTING CARRIER

Summary By this O rder

, the Department is s electing SkyWest A irlines ( “SkyWest” ) to continue to provide

E ssential A ir S ervice (EAS) at West Yellowstone

, Montana , at a n an nual subsidy rate of
$ 389,412

, for the next summer season from June 1 through September 30, 201 2

. 1

Background By Order 2010

- 3

- 30, March 25, 2010, the Department selected SkyWest Airlines, Inc. d/b/a Delta Connection (SkyWest) to provide subsidized EAS at West Yellowstone for the 2010 and 2011 summer seasons at a subsidy rate of $427,757 for each four

- month season. Under that

O rder, SkyWest provided 14 nonstop round trips per week to Salt Lake City International Airport (Salt Lake City) as Delta Connection, with 30

- seat Embraer Brasilia aircraft.

I n anticipation of the end of the rate term, the Department issued Order 20 1 1

- 1 2

- 3

, December 12,

2011

, solicit ing proposals to provide efficient EAS , with subsidy support if necessary, at West

Yellowstone

, for the next two summer seasons

.

Proposal s
I n response to that order, we received proposals from two carriers, SkyWest, the incumbent

, and Silver Airways

.

SkyWest proposes to continue its historical level of subsidized service 14 nonstop round trips per

week to Salt Lake City as Delta Connection for the 2012 summer, from Ju ne 1, 201 2 , through

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.September 30, 201 2 , utilizing 30

- passenger Embraer Brasilia aircraft for a subsidy of $ 389,412

. SkyWest’s proposal is for the summer 2012 season only, which was done in anticipation of West Yellowstone’s completion of the regulatory approval process to receive scheduled, commercial jet service, prior to the 2013 season

.

Silver Airways proposes one option with 19 nonst o p round trips per week to Billings, Montana, using 19

- seat Beech 1900D turboprops for a subsidy of $ 704,236 for each four

- month season

.

The complete proposal s of both carriers may be accessed online at http://www.regulations.gov/ by entering “DOT

- OST

- 2003

- 14626 .”

Community and State Comments

On February 24, 2012 , we requested co mmunity co mment s regarding the carrier selection at
West Yellowstone

.

In a March 6 letter to the Department, Mayor Jerry Johnson , Town of West Yellowstone (“the Town”) stated that the Town “supports the proposal submitted by SkyWest.” He also says the

Town “has enjoye d a re lationship with SkyWest Airlines since 1987 and appreciates the dependable and important service the airline has provided to West Yellowstone and the surrounding area.” The letter also mentions that “SkyWest is well

- established in the market.”

The Department also received a March 8 letter from Tim Reardon, M ontana Department of Transportation (“MDT”)

, stating it is “encouraged to see competition in th is market .” It

commends S ilver Airways f or its proposal, but states, “ Sky West Airlines has provided [the] region for many years with excellent service, qualified staff and supportive local interaction .”

and MDT states that it supports SkyWest’ s service option for the 2012 summer season.

Decision SkyWest has served West Yellowstone for many years and continues to provide them with

reliable essential air service. The c ommunity fully supports SkyWest and we find that its subsidy request is reasonable. Therefore, we will reselect SkyWest operating with 30

- seat Embraer Brasilia aircraft, to provide service from West Yellowstone to Salt Lake City, for the

2012 summer season, at an annual subsidy rate of $ 389,412

.

We shall make SkyWest’s selection at West Yellowstone contingent upon the Department’s receiving properly executed certifications from SkyWest that it is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations governing lobbying activities.

Carrier Fitness

49 U.S.C. 41 737(b) and 417 3 8 require that we find an air carrier fit, willing, and able to provide reliable service before we may subsidize it to provide essential air service

. SkyWest is sub j ect to the Department’s continuing fitness requirements, and no information has come to our attention that would cause us to question the carrier's fitness at this time. We have contacted the Federal Aviation Administration, and it has raised no concerns that would negatively affect our fitnessfinding. We therefore conclude th at the carrier remains fit to conduct the operations proposed

here.

This order is issued under authority delegated in 49 CFR 1.56a(f).

ACCORDINGLY,

1. We select SkyWest A irlines to provide essential air service at West Yellowstone

, Montana ;

2 . We set the final rate of compensation for SkyWest Airlines for the provision of essential air

service at West Yellowstone

, Montana , as described in Appendix C ;

3 . We direct SkyWest Airlines to retain all books, records, and other source and summary

do cumentation to support claims for payment, and to preserve and maintain such documentation in a manner that readily permits its audit and examination by representatives of the Department. Such documentation shall be retained for seven years from the servi ce date of this order or until the Department indicates that the records may be destroyed, whichever comes first. Copies of flight logs for aircraft sold or disposed of must be retained. The carrier may forfeit its compensation for any claim that is not supported under the terms of this O rder;

4 . We find that SkyWest A irlines continue s to be fit, willing and able to operate as a certificated

carrier and capable of providing reliable essential air service at West Yellowstone

, Montana ;

5 . Th is docket will remain open until further order of the Department; and

6 . We will serve copies of this order on the Mayor and Operations Manager of the Town of

West Yellowstone

, the Montana Department of Transportation, Aeronautics Division, SkyWest

A irline s, and Silver Airways

.

By:

SUSAN L. KURLAND Assistant Secretary

for Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the Internet at http://www.regulations.govAppendix A



## AREA MAPAppendix BAppendix C

SkyWest A irlines

Essential Air Service to be Provided at West Yellowstone

, Montana

Effective Period : June 1 through September 30 , 20 12

Scheduled Service : 1 4 nonstop round trips t o Salt Lake City International Airport each week

Aircraft : Embraer Brasilia (EMB 120) , 30 seat s Rate per Eligible Flight: $ 815 1
Weekly Ceilin g : $ 2 2,820 2

Note: 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 explanati on 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 con formance 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 rou tes. 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 Departmen t 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 complete ly , terminates or reduces paymen ts 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 c ease 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 constit ute 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 order beyond September 30, 2012. The Governmen t’s obligation for performance under this order beyond September 30, 20 12 , is subject to 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 September 30, 2012 , until funds are ma de available to the Department for performance. If funds are not made available for performance beyond September 30, 2012 , the Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last d ay of service provided under this order

.

1 Annual compensation of $389,412 divided by 478 annual departures (122 service days x 4 flights per day x 98 percent completion).

2 28 flights per week multiplied by $815 per flight.