Order 2010-7-20

July 27, 2010

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 27th of July, 2010

Essential Air Service at

LAKE MINCHUMINA, ALASKA

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

DOCKET OST-2008-0237

PETITION FOR RECONSIDERATION

Summary

By this order we grant Lake Minchumina’s Petition for Reconsideration of Order 2010-7-14 and rescind 

Order 2010-7-14 selecting Warbelow’s Air Ventures, Inc. On reconsideration, we select Wright Air 

Service, Inc., Option 2, for $93,0801 annual subsidy, to provide essential air service (EAS) to Lake 

Minchumina, Alaska.

Background

In anticipation of the end of the current EAS contract on September 30, 2010, by

Order 2010-5-13 we requested proposals for a new two-year contract at Lake Minchumina, 

Alaska. We received proposals from three carriers, Everts Air Cargo, Inc., d/b/a Tatonduk 

Outfitters (the incumbent), Warbelow’s, and Wright. By letter dated June 18 we summarized the 

carriers’ proposals and requested community comment by July 1. On June 28 we received 

comment from Mr. Thomas Green, Vice President of the Lake 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-equipped3 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 community opinion.

3 Instrument Flight Rule (IFR)-equipped aircraft can safely operate in weather conditions that aircraft limited to 

visual flight rule (VFR) conditions cannot.
- 2 -

email dated June 29, 2010, we received a request from 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 11 we received an email from Ms. 

Green, stating that:

“After reviewing 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 Service, 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 Homeowner’s 

Association 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 11 from Ms. Green merely represented that individual’s wishes, and not those of the 

community as a whole. As President of the Homeowner’s Association, she confirmed that the 

community had not, in fact, reversed its decision on June 28 favoring Wright’s Option 2. The 

letter went on to say that the community now unanimously, including Ms. Green, supports the 

selection of Wright. On July 19 we received another e-mail from Ms. Green confirming that her 

July 11 email represented only herself at the time.

“I am deeply sorry for any confusion my email [of July 11] may have caused in the 

selection process.” 

Decision

Order 2010-7-14 selected Warbelow’s on the straightforward basis that two critical carrierselection criteria both favored Warbelow’s, i.e., Warbelow’s had overwhelming community

support and was less expensive than the community’s second choice, Wright. It is now clear that 

that is not the case, and the community strongly supports 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 requests 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 Wright. 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 to 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 findings. DOT therefore concludes that the carrier remains fit to conduct the operations 

proposed here.

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 grant the petition of Lake 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 Lake 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 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 Wright Air Service, Inc., continues 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. This 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 Lake Minchumina.

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

Distance to Fairbanks 

LMA, Lake Minchumina 148 

MNT, Minto 50 

MLY, Manley Hot Springs 83 

RMP, Lake Minchumina 82 

CEM, Central 104 

IRC, Circle 131 

SVS, Stevens Village 90

ANC, Anchorage 261

This map is provided by Sabre® AirVisionTM 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-2008-0237

Effective Period: October 1, 2010, through September 30, 2012.

Scheduled Service: Two nonstop round trips 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 206, $2741

Weekly Ceiling: $1,7802

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 this rate, 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 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 

operate 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 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, 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 this 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 flight and $616 per 9-seat Cessna 208 flight.

2 2 flights/week x $274 plus 2 flights/week x $616.