Order 2010 - 7 - 20 July 27, 2010 

### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION 

### OFFICE OF THE SECRETARY WASHINGTON, D.C.

Is sued by the Department of Transportation on the 27 th of July , 2010 Essential Air Service at LAKE MINCHUMINA , ALASKA Under 4 9 U.S.C. 41731 et seq . DOCKET OST - 2008 - 02 37

PETITION FOR RECONSIDERATION Summary By this order we grant Lake Minchumina’s P etition for Reconsideration of Order 2010 - 7 - 14 and rescind Order 2010 - 7 - 14 selecting Warbelow’s Air Ventures, Inc. On reconsid eration, w e select Wright Air Service, Inc., Option 2, for $93,080 1 annual subsidy, to provide essential air service (EAS) to Lake Minchumina, Alaska . Background Inanticipation of the end of the current EAS contract on September 30, 2010 , by Order 2010 - 5 - 13 we requested proposals for a new two - ye ar contract at L ake Minchumina, Alaska. We received proposal s from three carriers, Everts Air Cargo, Inc., d/b/a Tatonduk Outfitters ( the incumbent ), Warbelow ’ s, and Wright. By letter dated June 18 we summarize d the carriers’ proposals and requested community comment by July 1. On June 28 we received comment from Mr. Thomas Green, Vice President of the L ake Minchumina Homeowners ’ Association, 2 recommending that we select Wright, Option 2. Under that option the community would receive a total of two round trips each week, one with IFR - equipped 3 C - 208 aircraft and one with single - engine Cessna 206 piston aircraft , for a total annual subsidy of $93,080. By 1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds. 2 There is no local government at this community. The Homeowners’ Association is the best, if not only, representative of co mmunity opinion. 3 Instrument Flight Rule (IFR) - equipped aircraft can safely operate in w eather conditions that aircraft limited to visual flight rule (VFR) conditions cannot.- 2 -

email dated June 29, 2010, we received a request fr o m Ms. Penny Green, wife of Mr. Thomas Green, for an extension until July 10 for the community to submit additional comments, and by Notice dated July

1, 2010, we granted that request. On July 1 1 we received an email from Ms. Green , stating that : “After revie wing the information we feel Warbelow ’ s Option #2 or # 3 is the first choice to meet our needs and Wright’s #1 as a second choice since you requested different carriers.” By Order 2010 - 7 - 14, July

16, 2010, we selected Warbelow’s Air Ventures, Option 3 -- two round trips per week with a Cessna 206 aircraft for $62,400 annual subsidy , with the following basis for the decision. “The selection of Warbelow’s is straightforward. While there is some community support for Warbelow’s and some for Wright Air Serv ice, the support for Warbelow’s is from the Homeowners ’ Association while the support for Wright is from two individual residents. Moreover, either of Warbelow’s two options favored by the H omeowner’s A ssociation is less expensive than either of Wright’s Options.” On July 19, shortly

after our serving Order 2010 - 7 - 14 on all the parties, we received a letter from Ms. Julie Collins, President of the Homeowners ’ Association. The letter indicated that the letter dated July

1 1 from Ms. Green merely represente d th at individual’s wishes, and not th ose of the community as a whole . As President of the Homeowner’s Association, she co n f i rmed that the community

had not, in fact, reversed its decision on June 28 favor ing Wright ’s Option 2. The letter went on to say that the community now unanimously , including Ms. Green, support s the selection of Wright. O n July 19 we received another e - mail from Ms. Green confirming that her July 11 email represent ed only herself at the time. “I am deeply

sorry for any confusion my email [of July 1 1 ] may have caused in the selection process. ” Decision Order 20 10 - 7 - 14 selected Warbelow’s on the straightforward basis that two critical carrier selection criteria both favored Warbelow’s , i.e., Warbelow’s had overwhelming community s upport and was less expensive than the community ’s second choice, Wright. It is now clear that that is not the case, an d th e community strongly support s Wright . Although the community ’s support for Wright is stronger than the community support relied on by Order 2010 - 7 - 14 to select Warbelow’s , it remains the case that Warbelow’s request s less subsidy than Wright . Although the $30,680 difference in subsidy between those two options is significant , we will defer to the community ’s strong endorsement of Wri ght. Finally , we find that the service and subsidy levels proposed by

Wright’s Option 2 are reasonable. We will therefore rescind Order 2010 - 7 - 14 and select Wright.- 3 -

Carrier Fitness 49 U.S.C. 41737(b) requires that DOT find an air carrier fit, willing, and able to provide reliable service before DOT may

subsidize it to provide essential air service. Wright Air Service, Inc. , is subject to the Department’s continuing fitness requirements, and no information has come to our attention that would cause us t o question the carrier ’ s fitness at this time. DOT has contacted the Federal Aviation Administration, and it has raised no concerns that would negatively affect our fitness finding s . DOT therefore concludes that the carrier remain s fit to conduct the ope rations proposed here. This order is issued under authority delegated in 49 CFR 1.56a(f) and re - delegated to the Directo r, Office of Aviation Analy sis. ACCORDINGLY, 1. We grant the petition of L ake Minchumina, Alaska, for reconsideration of Order 2010 - 7 - 14; 2. On reconsideration, we rescind Order 2010 - 7 - 14 and select Wright Air Service, Inc., to provide essential air service at L ake Minchumina , as described in Appendix B; 3. We direct Wright Air Service, Inc., to retain all books, records, and other source and summary documentation to support claims for pay ment, 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 s even 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 Wright Air Service, Inc., continue s to be fit, willing and able to operate as a certificated carrier and capable of providing reliable essential air service at Lake Minchumina , Alaska ; 5 . Th is docket will remain open until further order of the Department; and- 4 -

6 . We will serve copies of this order on the Office of Statewide Aviation of the Alaska Department of Transportation and Public Facilities, Everts Air Cargo, Inc., Warbelow’s Air Ventures , Inc. , Wright Air Service, Inc., and the community of L ake Minchumina. By :

TODD M. HOMAN Director Office of Aviation Analy sis (SEAL ) An electronic version of this document is available on the World Wide Web at http://www.r egulations.govAppendix A

Distance to Fairbanks LM A, L ake Minchumina 148 MNT, Minto 50 MLY, Manley

Hot Springs 83 RMP, Lake Minchumina 82 CEM, Central 104 IR C, Circle 131 SVS, Stevens Village 90 ANC, Anchorage 261

This map is provid ed by Sabre ® AirVision TM Profit Essentials and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Appendix B Wright Air Service , Inc., Essential Air Service to be Provided to Lake Minchumina , Alaska , Dockets OST - 2008 - 02 37 Effec tive Period : October 1 , 20 1 0 , through September 30, 2012 . Scheduled Service : Two nonstop round trip s per week to Fairbanks , one C - 208 and one C - 206 . Aircraft : Cessna 206 , 4 seats, Cessna 208 , 9 seats . Rate per Eligible Flight: Cessna 208, $616; Cessna 20 6, $274 1 Weekly Ceiling : $ 1, 780 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 orde r 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 eligi bility 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 this rate, it must first notify the Office of Aviation Analysis in wr iting 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 comple te 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 ly , 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 w hich the Department does make payments in the stipulated amounts or at the stipulated service levels, the carrier may cease to provide service to th at 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 reduct ion or cessation of payment. Subsidy contract 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 o perate to controvert the foregoing paragraph. Funds are not currently available for performance under this order beyond September 30, 2010 . The Government’s obligation for performance under this order beyond September 30, 2010 , is subject to the availabi lity 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, 2010 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30, 2010 , 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 t his order.
1 Annual compensation of $93,080 divided by the estimated annual completed departures and arrivals: 2 flights/week x 52 weeks x 4 seats/Cessna 206 and 2 flights per week x 52 weeks x 9 seats/ per C - 208 = 1,352 seats . $93,080 ÷ 1,352 = $68.46 per seat, or $274 per 4 - seat Cessna 206 flig ht and $616 per 9 - seat Cessna 208 flight. 2 2 flights/week x $ 274 plus 2 flights/week x $616 .