Order: 2011-12-14

 Served: December 22, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 22nd of December, 2011

Essential Air Service at

JONESBORO, ARKANSAS

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

 Docket DOT-OST-1997-2935

ORDER SELECTING CARRIER

Summary

By this order, the Department is selecting Multi-Aero, Inc. d/b/a Air Choice One (Air Choice 

One) to provide subsidized essential air service (EAS) at Jonesboro, Arkansas, for a one-year 

period.1 The one-year period will begin when Air Choice One inaugurates full EAS and will run

through the end of the 12th month thereafter. The selection of Air Choice One will provide 

Jonesboro with 18 nonstop round trips per week to Lambert St. Louis International Airport using 

9-passenger Cessna Grand Caravan aircraft at an annual subsidy rate of $1,717,781.

Background

In anticipation of the end of SeaPort’s current contract on October 31, 2011, the Department 

issued Order 2011-4-15 on April 15, 2011, requesting proposals for a new contract period.

Because the proposals did not address the high per-passenger subsidy at Hot Springs and 

Jonesboro, the Department issued 2011-6-25 on June 27, 2011, re-soliciting proposals from all 

interested air carriers. In response to the Order, SeaPort Airlines, Inc. (SeaPort), the incumbent, 

and Air Choice One submitted proposals.

Proposals

Air Choice One proposes three nonstop round trips each weekday and weekend (18 per week) to 

Lambert-St. Louis International Airport, using nine-passenger Cessna Grand Caravan for an 

annual subsidy of $1,717,781.

 

1 Subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.
- 2 -

SeaPort initially proposed service of 12 weekly nonstop round trips to St. Louis and 6 weekly 

nonstop round trips to Memphis, for an annual subsidy of $1,509,850, but withdrew its proposal 

on October 19.

Copies of each proposal may be accessed online at http://www.regulations.gov by entering 

DOT-OST-1997-2935 in the “Enter Keyword or ID” section.

Discussion

Since Order 2011-6-25 was issued, Public Law 112-27, signed into law on August 5, 2011, 

amended the definition of “eligible place” for the purpose of receiving EAS. See 49 U.S.C. § 

41731. The amendment states that to be eligible, a community must be located not less than 90 

miles from the nearest medium or large hub airport and must have had an average subsidy per 

passenger of less than $1,000, regardless of isolation, during the most recent fiscal year, as 

determined by the Secretary of Transportation. Section 41731, as amended, also grants the 

Secretary the authority to issue a waiver of the 90-mile criterion if the Secretary determines that 

the “geographic characteristics of the location result in undue difficulty in accessing the nearest 

medium or large hub airport.” 49 U.S.C. § 41731(d). The Department is currently preparing a 

Notice of Proposed Rulemaking regarding the new provisions under 49 U.S.C. § 41731, as 

amended. Jonesboro’s long-term eligibility may be affected by this amendment.

Community Comments

On October 24, we requested community comments regarding the carrier selection at Jonesboro. 

We notified the community that, based on existing law and the proposed rulemaking discussed 

above, the Department was prepared to select Air Choice One, the only carrier proposing service, 

to serve Jonesboro for a one-year term. We also stated that any subsequent service that may be

subsidized will be determined once the rulemaking process has been completed and the 

continuing eligibility of the community is decided. We received comments from the Jonesboro 

Municipal Airport Commission and the Mayor of Jonesboro. Philip Steed, Manager of 

Jonesboro Municipal Airport, states that Jonesboro has been in the EAS program for many years 

and has had many different carriers and destinations and the community is currently 

experiencing growth and “having an airline service enables Jonesboro to attract and keep 

industries.” Mr. Steed also states, “[we] are prepared to graciously accept Air Choice One as a 

replacement to our current carrier [for a one year contract].” We also received a letter from 

Harold Perrin, Mayor of Jonesboro. He states, “[t]he City of Jonesboro would accept the offer of 

Air Choice One.”

Decision

The community supports the selection of Air Choice One, the only proposal available for 

Jonesboro. Jonesboro’s status in the EAS program may be affected by the new eligibility 

criteria, as discussed above. In order to give enough time for completing the rulemaking process 

and determining the status of Jonesboro’s eligibility in the EAS program, we will select Air 

Choice One for a one-year period, rather than a typical two-year period.2 After the rulemaking 

 2 For communities that fall within the 90-mile provision, we typically would continue to compensate the incumbent 

carrier until the community’s eligibility is determined. In this case, however, the incumbent carrier, SeaPort, has 

withdrawn its proposal.
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process, when Jonesboro’s eligibility status is determined, the Department will take further 

action on Jonesboro’s service. The selection of Air Choice One will provide Jonesboro with

three nonstop round trips to St. Louis each weekday and weekend (18 total per week).

In its proposal, Air Choice One projects 4,700 passengers. During the most recent 12 months for 

which data are available (September 1, 2010, through August 31, 2011), SeaPort, the current 

carrier, enplaned and deplaned a total of 1,748 passengers. We expect Air Choice One and the 

community to aggressively promote the service, as Air Choice One’s passenger projections are 

270% above the current traffic. The community remains subject to the $200 per passenger 

subsidy cap3 and the $1000 per passenger subsidy cap (see Discussion section, above). We will 

monitor the per passenger subsidy at the end of the 12 month period and take appropriate action, 

including termination of eligibility for subsidized service, if required.

We shall make this selection at Jonesboro contingent upon the Department’s receiving properly 

executed certifications from Air Choice One that it is in compliance with the Department’s 

regulations regarding drug-free workplaces and nondiscrimination, as well as the regulations 

concerning lobbying activities.

Carrier Transition

We expect SeaPort and Air Choice One to coordinate a smooth transition in service at Jonesboro, 

including setting a date to switch services from SeaPort to Air Choice One. We expect SeaPort 

to contact all passengers holding reservations for travel after that date, to notify them of the 

suspension of service, and to secure alternate air transportation for such passengers or to provide 

a full refund of the ticket price, without penalty, if requested. We will compensate SeaPort at its 

current subsidy rates, set in Order 2009-6-25, issued June 26, 2009, and finalized in

Order 2009-7-8, July 9, 2009, for its service until Air Choice One inaugurates full EAS. Also, 

see Appendix C, page 2, of this Order.

Carrier Fitness

49 U.S.C. 41737(b) requires that we find an air carrier fit, willing, and able to provide reliable 

service before we may subsidize it to provide essential air service. Air Choice One is subject 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 fitness 

finding. We therefore conclude that 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 Multi-Aero, Inc. d/b/a Air Choice One, to provide essential air service at 

Jonesboro, Arkansas;

 3 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.
- 4 -

2. We set the final rate of compensation for Multi-Aero, Inc. d/b/a Air Choice One, for the 

provision of essential air service at Jonesboro, Arkansas, as described in Appendix C;

3. We direct Multi-Aero, Inc. d/b/a Air Choice One to retain all books, records, and other source 

and summary documentation 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 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 order;

4. We find that Multi-Aero, Inc. d/b/a Air Choice One continues to be fit, willing and able to 

operate as a commuter carrier and capable of providing reliable essential air service at Jonesboro, 

Arkansas; 

5. We will extend the subsidy rate per flight and weekly compensation set for SeaPort Airlines 

in Order 2009-7-8, July 9, 2009, for its service until Air Choice One inaugurates full EAS;

6. This docket will remain open until further order of the Department; and

7. We will serve copies of this order on the Mayor of Jonesboro, the Airport Manager of 

Jonesboro Municipal Airport, SeaPort Airlines, Inc. and Multi-Aero, Inc. d/b/a Air Choice One.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at

http://www.regulations.gov
Appendix A

AREA MAP

This map is provided by Planet Profitability Forecasting System and is being used with express permission of the 

copyright holder, Sabre Airline Solutions®.
Appendix B
Appendix C

Page 1 of 2

Multi-Aero, Inc. d/b/a Air Choice One

Essential Air Service to be Provided at Jonesboro, Arkansas

Effective Period: One year (12 months) beginning when Air Choice One inaugurates full EAS

through the end of the 12th month thereafter

Scheduled Service: 3 nonstop round trips each weekday (Monday through Friday) and 3 nonstop 

round trips each weekend (18 total round trips per week) to Lambert-St. Louis International

Airport

Aircraft: Cessna Grand Caravan, 9 seats

Rate per Eligible Flight1: $936

Weekly Ceiling2: $33,696

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 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 order beyond September 30, 2012. The Government’s 

obligation for performance under this order beyond September 30, 2012, 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 made 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 day of service provided under this order.

 1 Annual compensation of $1,717,781, divided by 1,835 annual departures (36 weekly departures x 52 weeks x 98 

percent completion).

2 36 flights per week multiplied by $936 per flight.
Appendix C

Page 2 of 2

SeaPort Airlines

Essential Air Service to be Provided at Jonesboro, Arkansas

Effective Period: November 1, 2011, until Air Choice One inaugurates full EAS.

Scheduled Service: 18 weekly nonstop round trips to Memphis International Airport. Some 

service may be substituted with service to Kansas City International Airport, as outlined in Order

2011-1-5, January 7, 2011

Aircraft: Pilatus PC-12, 9 seats

Rate per Eligible Flight1: $434

Weekly Ceiling2: $15,624

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 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 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 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.

Funds are not currently available for performance under this order beyond September 30, 2012. The Department’s 

obligation for performance under this order beyond September 30, 2012, is subject to the availability of appropriated 

funds from which payment for services can be made. No legal liability on the part of the Department for any 

payment may arise for performance under this order beyond September 30, 2012, until funds are made 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.

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.

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

 1 Annual compensation of $799,992, divided by 1,844 annual departures (36 weekly departures x 52 weeks x 98.5 

percent completion).

2 36 arrivals and departures per week multiplied by $434.