### u.s.Departmentof Transportation OfficeoftheSecretary ofTransportation

July 8, 2010 The Honorable Sonja L. Hawkins Mayor ofthe City ofOil City 21 Seneca St. Oil City, PA 16301 Dear Mayor Hawkins:**~** =,-.:-;- ....,**~ -~-"**  - - .............**-~-',t'"\t** I

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I would like to update you onthe essential air service (EAS) situation at Oil CitylFranklin and give you an opportunityto submit any comments ifyou wish. In anticipation ofthe end ofGulfstream's current contract on September 30,2010, the Department issued Order 2010-5-22, May 19, 2010, to solicitproposals from all interested air carriers to provideEAS at Oil CitylFranklin. Inresponseto that order, we received proposals from two carriers: Gulfstream, the incumbent, and Charter Air Transport. Copies ofthe proposals maybe accessed online through the Federal Docket Management System (FDMS) at: http://www.regulations.gov/by entering "DOT-OST1997-2523" in the "Enter Keyword orID" field. Gulfstreamproposes to continue its 18 round trips per week to Cleveland Hopkins International Airport, operating on a Cleveland

- DuBois

- Oil CitylFranklin

- Cleveland or a Cleveland

- Oil CitylFranklin

- DuBois

- Clevelandrouting, for an annual subsidy of$915,101. This assumes Oil CitylFranklin's continued eligibility in the EAS program, which the Department is reviewing in the context ofthe proposals received from both carriers and any comments you provide onbehalfofthe community. All service would beoperated as Continental Connection, utilizing Beech 1900D aircraft. We are also currently reviewing Gulfstream's compensationrequirement. CharterAirTransport proposes to operate 12 nonstop round trips per week to Pittsburgh utilizing 19-seatJetstream 32 aircraft, for an annual subsidy of$1,375,684. Mypurpose inwriting to you at this time is to request anyfinal comments you might have onthe carriers' service and subsidyproposals before we submit arecommendation onthe carrier-selection issue to the Assistant Secretaryfor Aviation and hlternational Affairs.

### - 2 - Please note that the average**p~s5enger** f<lres shown in each proposal do not necessarily reflect the average local fare Franklin passengers would actually pay, but, rather, reflect a prorated portion ofthe total ticket price, e.g., the Oil CitylFranklin

- Cleveland portion of an Oil CitylFranklin

- Cleveland

- Seattle/Tacomaticket that the subsidized carrier would realize. Also, the fare shown is net ofcertain charges such as Federal transportation security fees, excise or ticket taxes, and Passenger Facility Charges. Of course, carriers have the discretion to charge fares they deem appropriate, and the passenger fares presented in their proposals have been developed for subsidy rate computation purposes only. Based on the cost elements incorporated in the carrier's computation summaries, Gulfstream would have to realize passenger fares comparable to the averages shown in their proposals in order to achieve break-even or profitable operations without subsidy. You should also note that the schedules that the carrierhas submitted are illustrative only, and that they may make schedule changes to reflect changing conditions, e.g., to better meet shifting connecting bank times at the hub. The Department expects subsidized air carriers to maintain well-timed and well-spaced flights in order to ensure full compensation. We request that you review each proposal and service option and submit any comments you mayhave before we submit a recommendation to the Assistant Secretary. As you are aware, Oil CitylFranklin is well over the statutory $200 subsidy perpassenger cap, and the community's continued eligibility remains uncertain. As a result, your comments should address the features ofthe various carrierproposals that you believe will result in increased passenger levels to lower the subsidy perpassenger below the $200 cap. We ask that you submit any comments you may have as soon as possible, but in any case no later than July 30,2010. We will carefully consider your comments before we submit a recommendation to the Assistant Secretary for a decision. We appreciate that there are significant issues for you to consider, so ifyou have any questions or ifyou find that you need additional time to draft your comments, please let us know. Please send your comments via e-mail to EAS@dot.gov orbyfax to 202-366-7638. If you have any questions, please feel free to contact Kevin Schlemmer ofmy staffat kevin.schlemmer@dot.gov or 202-366-3176. Similar letters have been sent to the civic officials ofthe other EAS communities at issue here. Sincerely,

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# d-- Dennis J . DeVany Chief, Essential Air Service Division, X-53 Office ofAviation Analysis