UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 27th day of September, 2010

Essential Air Service at

GULKANA, ALASKA

MAY CREEK, ALASKA

MCCARTHY, ALASKA

DOCKET OST-1995-492

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

ORDER REQUESTING PROPOSALS 

Summary

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

essential air service (EAS) at Gulkana, May Creek, and McCarthy, Alaska, for the twoyear period beginning February 1, 2011, with or without subsidy. Proposals are due by 

October 25, 2010. (See Appendix A for a map.)

Background

By Order 2008-12-19, the Department selected Ellis Air Taxi, Inc. d/b/a Copper Valley Air 

Service (Ellis Air), to continue providing EAS at Gulkana, May Creek, and McCarthy, 

Alaska, for the two-year period ending January 31, 2011, for a combined annual subsidy

rate of $424,652. Gulkana currently receives two round trips per week to Anchorage with 

six-seat Piper PA-31 aircraft; May Creek and McCarthy both receive two nonstop or onestop round trips per week to Gulkana using three-seat Cessna 185 aircraft during winter 

months and four-seat Cessna 206 aircraft during summer months. 

Request for Proposals

As the end of the current contract approaches, we are here requesting proposals for a new 

two-year period beginning February 1. Interested carriers should prepare their proposals

Order: 2010-9-27

Served: September 27, 2010
- 2 -

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 resolicit a new round of proposals. However, we anticipate that 

negotiation or rejection will remain only occasional exceptions to the rule. Shortly after 

October 25, 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.1

We are here providing interested carriers with some basic information to assist them as 

they prepare their proposals, but we will not prescribe a precise format for their 

preparation. We expect proposals to adequately describe the service being proposed and 

the annual amount of subsidy being requested. 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 community and the Department.2

With specific respect to these communities, carriers should provide sufficient capacity to 

accommodate historical levels of traffic. In that regard, as is typically the case in Alaska, 

significantly more freight and mail flow from the hub to EAS communities than from the 

EAS communities to the hub. For Gulkana, we are requesting proposals for two nonstop 

round trips to Anchorage each week with aircraft having a capacity of four to six seats. At 

May Creek and McCarthy, we expect proposals consisting of two round trips each week 

over a Gulkana-McCarthy-May Creek-Gulkana routing with aircraft having a capacity of 

at least three seats during the six-month winter season, and four seats during the six-month 

summer season. Such service is consistent with what the communities currently receive, 

and fully satisfies their essential air service requirements.3 As always, we will formally

solicit the communities’ views on any service options we receive before making a longterm carrier selection decision. 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 

 

1 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 subsidy-free service as proposed.

2 In selecting a carrier to provide subsidized essential air service in Alaska, 49 U.S.C. 41733(c)(1) directs us 

to consider five factors: (1) scheduled service reliability; (2) contractual and marketing arrangements with a 

larger carrier to ensure service beyond the hub; (3) interline arrangements that the applicant has made with a 

larger carrier at the hub; (4) community views, giving substantial weight to the views of the elected officials 

representing the users; and (5) the experience of the applicant in providing, in Alaska, scheduled air service. 

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.

3

Carriers are free to set their peak-period service at different periods based on the peak traffic demand as 

shown in Appendix B.
- 3 -

to the community and meets the operational needs of the airline interested in submitting a 

proposal.

We encourage proposals that meet those 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, for example -- with subsidy requirements that remain 

competitive.

New Filing Procedures

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

single document. In addition, because the document will be published on Regulations.gov, 

each page should be formatted to be viewed online.

Historical Traffic

In order to assist prospective applicants in making traffic and revenue forecasts, we have 

included historical traffic for each community in Appendix B.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing 

lobbying activities, drug-free workplaces, and nondiscrimination.4 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 expected to complete the required 

certifications. Interested carriers requiring more detailed information regarding these 

requirements as well as copies of the certifications should contact the Office of Aviation 

Analysis at (202) 366-5903.5

Community and State Comments

The communities and the state are welcome to submit comments at any time. We 

encourage prospective applicants to contact the community before they submit their 

proposals in order to tailor them to the community’s needs. As noted earlier, we will 

provide a copy of the proposals to the civic parties and ask them to submit their final 

comments shortly after October 25, the deadline for filing carrier proposals.

 

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 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 (non-procurement) and government-wide requirements for 

drug-free workplace (grants).

5 The certifications are also available on the World Wide Web athttp://ostpxweb.dot.gov/aviation/index.html.
- 4 -

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 Gulkana, May

Creek, and McCarthy, Alaska, submit their proposals, with or without subsidy requests, no 

later than October 25, 2010. The proposals should be e-mailed to EAS@dot.gov, with the 

title: “Proposal to Provide Essential Air Service at Gulkana, May Creek, and McCarthy, 

Alaska, Docket DOT-OST-1995-492”; 

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

3. We will serve copies of this order on the parties listed in Appendix D.

Persons entitled to petition the Department for review of this order under the Department’s 

Regulations, 14 CFR Part 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 on the World Wide Web at

http://www.regulations.gov
Appendix A

 
Appendix B

Page 1 of 3

Historical Traffic - Gulkana, May Creek, and McCarthy, Alaska

Gulkana

Origination Destination Origin and Destination

Year Quarter Pax

Freight 

PEQ Mail PEQ Total Pax

Freight 

PEQ Mail PEQ Total Pax

Freight 

PEQ

Mail 

PEQ Total

2007 1 14 1 36 51 5 0 4 9 19 1 40 60

2007 2 49 5 45 99 49 1 4 54 98 6 49 153

2007 3 49 4 36 89 52 1 6 59 101 5 42 148

2007 4 7 2 30 39 6 0 3 9 13 2 33 48

Total 119 12 147 278 106 2 17 125 225 14 164 403

2008 1 12 1 32 45 12 2 4 18 24 3 36 63

2008 2 28 6 48 82 26 2 4 32 54 8 52 114

2008 3 57 4 42 103 50 2 7 59 107 6 49 162

2008 4 18 1 28 47 14 0 5 19 32 1 33 66

Total 115 12 150 277 102 6 20 128 217 18 170 405

2009 1 11 2 25 38 11 0 4 15 22 2 29 53

2009 2 34 3 50 87 33 0 6 39 67 3 56 126

2009 3 58 7 34 99 59 8 10 77 117 15 44 176

2009 4 10 0 21 31 7 0 4 11 17 0 25 42

Total 113 12 130 255 110 8 24 142 223 20 154 397

2010 1 15 1 22 38 13 0 2 15 28 1 24 53

2010 2 42 6 34 82 34 3 3 40 76 9 37 122

Total 57 7 56 120 47 3 5 55 104 10 61 175
Appendix B

Page 2 of 3

Historical Traffic - Gulkana, May Creek, and McCarthy, Alaska

May Creek

Origination Destination Origin and Destination

Year Quarter Pax

Freight 

PEQ Mail PEQ Total Pax

Freight 

PEQ Mail PEQ Total Pax

Freight 

PEQ

Mail 

PEQ Total

2007 1 1 0 1 2 2 0 8 10 3 0 9 12

2007 2 2 0 0 2 6 0 4 10 8 0 4 12

2007 3 2 0 0 2 4 0 7 11 6 0 7 13

2007 4 1 0 0 1 1 0 4 5 2 0 4 6

Total 6 0 1 7 12 0 23 35 18 0 24 42

2008 1 1 0 1 2 1 0 7 8 2 0 8 10

2008 2 22 0 0 22 21 2 23 46 43 2 23 68

2008 3 3 0 0 3 6 0 1 7 9 0 1 10

2008 4 2 0 0 2 2 0 4 6 4 0 4 8

Total 28 0 1 29 30 2 35 67 58 2 36 96

2009 1 0 0 0 0 0 0 7 7 0 0 7 7

2009 2 3 0 1 4 1 0 0 1 4 0 1 5

2009 3 13 1 0 14 12 1 1 14 25 2 1 28

2009 4 1 0 0 1 1 0 2 3 2 0 2 4

Total 17 1 1 19 14 1 10 25 31 2 11 44

2010 1 1 0 0 1 1 0 9 10 2 0 9 11

2010 2 0 0 0 0 10 0 0 10 10 0 0 10

Total 1 0 0 1 11 0 9 20 12 0 9 21
Appendix B

Page 3 of 3

Historical Traffic - Gulkana, May Creek, and McCarthy, Alaska

McCarthy

Origination Destination Origin and Destination

Year Quarter Pax

Freight 

PEQ Mail PEQ Total Pax

Freight 

PEQ Mail PEQ Total Pax

Freight 

PEQ

Mail 

PEQ Total

2007 1 1 0 3 4 8 1 28 37 9 1 31 41

2007 2 25 0 4 29 27 5 43 75 52 5 47 104

2007 3 44 0 6 50 30 4 36 70 74 4 42 120

2007 4 0 0 3 3 4 2 26 32 4 2 29 35

Total 70 0 16 86 65 12 133 210 135 12 149 296

2008 1 4 2 3 9 3 1 25 29 7 3 28 38

2008 2 7 1 4 12 10 5 47 62 17 6 51 74

2008 3 26 1 7 34 29 4 41 74 55 5 48 108

2008 4 7 0 5 12 4 1 24 29 11 1 29 41

Total 44 4 19 67 46 11 137 194 90 15 156 261

2009 1 2 0 3 5 3 2 18 23 5 2 21 28

2009 2 14 0 5 19 14 3 50 67 28 3 55 86

2009 3 24 3 10 37 31 5 33 69 55 8 43 106

2009 4 3 0 4 7 4 0 20 24 7 0 24 31

Total 43 3 22 68 52 10 121 183 95 13 143 251

2010 1 7 0 2 9 7 1 13 21 14 1 15 30

2010 2 13 0 3 16 25 6 34 65 38 6 37 81

Total 20 0 5 25 32 7 47 86 52 7 52 111
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.

Funds are not currently available for performance under this solicitation beyond [DATE]. The 

Department’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 Department 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.

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.
Appendix D

SERVICE LIST

Aero Twin, AACA, Tony Cestnik Northern Air Cargo, Keven Schlosstein

Alaska Air Carriers Association, Joy Journeay Pacific Airways, Steve Montanus

Alaska Airlines, Joe Sprague PenAir Consultant, Patrick Rizzi

Alaska Airlines, Sandy Sinick PenAir, Betty Gonzalez

Alaska Central Express, John Seamon PenAir, Danny Seybert

Alaska Central Express, Mike Bergt PenAir, Orin Seybert

Alaska Central Express, Steve Endlich PenAir, Robert Cohn

Alaska DOT, Christine Klein PenAir, Scott Bloomquist

Alaska DOT, Rebecca Cronkhite PM, Air, d/b/a Promech, Marc Sessoms

Alaska DOT- Medicaid Passenger Fares RITA, Bernard Stankus

Alaska Seaplanes, Craig Loken Servant Air, Wes Osowski

Alsek Air, Les and Debra Hartley Skagway, Ben Lingle

Arctic Circle, Donald Singsass Smokey Bay Air, Claire McCann

Arctic Circle, Kelly Harris Spernak Airways, Mike Spernak

Arctic Transportation Services (ATS), Wilfred Ryan Tanana Air Service, Brian Martin

Arctic Transporation Services, (ATS), Jim Hjelm Taquan Air Service, Brian Salazaar

Baker Aviation, Marjorie Baker Taquan, Beckie Allen

Bering Air, Allen Haddadi Tatonduk, Controller, Tina Paylor

Bering Air, Jim Rowe Tatonduk, Marketing, Robert Ragar

Congressional, Murkowski, Arne Fuglvog Tatonduk, Owner, Robert Everts

Congressional, Young, Jeremy Price USPS, Greg Garcia

Consultant, Hank Myers USPS, Joel Rosen

Consultant, Ken Acton USPS, Mary Tobias

Consultant, Norm Israelson USPS, Meredith Chavez, Consultant

Ellis Air Taxi, Lynn Ellis USPS, Steve Deaton

Era Aviation, Mike Lenorman USPS, Mary T. Taylor

ERA, David M. Richards USPS, Tina Campbell

Frontier Flying, Bob Haiducovich USPS, William Jones

Grant Aviation, Bruce McGlasson Warbelow’s Air Ventures, Arthur Warbelow

Hageland, Mike Hageland Ward Air, Kiesel

Hageland, Patrick Thurston Wings of Alaska, Bob Jacobsen

Hageland, Steve Wahrnke Wings of Alaska, Michelle Donahue

Harris Air, Fly Hackett Wright Air Service, Bob Bursiel

Harris Air, Scott Harris Yute, Tim Vottis

Homeland Security, David Bernier

Homeland Security, William Ragan

Homer Air, Andy Smircich

Iliamna Air, Tim LaPorte

Inland Aviation, Stephen Hill

Island Air Service, Bob Stanford

Katmai Air, Sonny Peterson