Order: 2010-9-12

 Served: September 9, 2010

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 9

th of September, 2010

Essential Air Service at

BRADFORD, PENNSYLVANIA

DuBOIS, PENNSYLVANIA

OIL CITY/FRANKLIN, PENNSYLVANIA

JAMESTOWN, NEW YORK

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

 Docket DOT-OST-2003-14528

 Docket DOT-OST-2004-17617

 Docket DOT-OST-1997-2523

 Docket DOT-OST-2003-14950

ORDER SELECTING CARRIER

Summary

By this order, the Department is re-selecting Gulfstream International Airlines (Gulfstream) to 

provide essential air service (EAS) at Bradford, DuBois, and Oil City/Franklin, Pennsylvania, 

and Jamestown, New York, for a combined annual subsidy of $5,870,657 ($1,087,306 for 

Bradford, $2,228,996 for DuBois, $915,101 for Oil City/Franklin, and $1,639,254 for 

Jamestown), from October 1, 2010, through September 30, 2012.1

Background

Gulfstream is the incumbent carrier at all four communities. In anticipation of the expiration of 

its current contract at all four communities, by Order 2010-5-22, May 19, 2010, the Department 

requested proposals from carriers interested in serving any or all of the four communities for the 

two-year period from October 1, 2010, through September 30, 2012. 

Proposals 

In response to that order, we received proposals from two carriers: Charter Air Transport and 

Gulfstream.

 

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.
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Charter Air Transport

Charter Air Transport submitted proposals to serve only Oil City/Franklin and Jamestown.

At Oil City/Franklin, Charter Air Transport proposes to operate 12 nonstop round trips per week 

to Pittsburgh utilizing 19-seat Jetstream 32 aircraft, for an annual subsidy of $1,375,684.

At Jamestown, Charter Air Transport proposes to operate 11 nonstop round trips per week to 

Buffalo, with two options for the type of aircraft utilized. If 19-seat J32 aircraft are used, the 

annual subsidy rate is $1,441,308. If 30-seat EMB-120 aircraft are used, the annual subsidy rate 

is $1,796,925.

Gulfstream International Airlines

Gulfstream proposed to continue its service to all four communities, operating its service as 

Continental Connection to Cleveland Hopkins International Airport, utilizing 19-passenger 

Beech 1900D aircraft. 

For Bradford and Jamestown, it proposes to continue its 18 round trips per week, operating on a 

Cleveland – Bradford – Jamestown – Cleveland or a Cleveland – Jamestown – Bradford –

Cleveland routing, for annual subsidy amounts of $1,087,306 (Bradford) and $1,639,254 

(Jamestown). 

For DuBois and Oil City/Franklin, it proposes to continue its 24 round trips per week at DuBois, 

and 12 round trips per week at Oil City/Franklin, operating on a Cleveland – DuBois – Oil 

City/Franklin – Cleveland or a Cleveland – Oil City/Franklin – DuBois – Cleveland routing, for

annual subsidy amounts of $2,228,996 (DuBois) and $915,101 (Oil City/Franklin). As a result 

of the routing of these flights, Oil City/Franklin would receive an additional 6 round trips per 

week; however, the subsidy request is based on 12 weekly round trips.

As we mentioned in the request for proposals, Order 2010-5-22, the subsidy per passenger at 

Bradford and Oil City/Franklin exceeds the statutory cap of $200. The Department is prohibited 

from subsidizing air service at a community where the subsidy per passenger exceeds $200 

unless it is farther than 210 highway miles from the nearest large or medium hub2, which is not 

the case here3. We asked both communities to work aggressively with all potential applicants to 

mitigate some of the risks that the carriers may face in an attempt to lower their subsidy levels.

Although Gulfstream explained its detailed plans for reducing Oil City/Franklin’s subsidy per 

passenger, it provided proposed subsidy rates for the other three communities in the event that 

the Department decided to terminate Oil City/Franklin’s eligibility to receive subsidized air 

service through the EAS program. Those rates are as follows: $1,116,213 (Bradford), 

$1,662,715 (Jamestown), and $2,247,023 (DuBois). 

 

2 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.

3 Bradford is 84 miles from Buffalo Niagara International Airport (BUF) and Oil City/Franklin is 100 miles from 

Pittsburgh International Airport (PIT), both medium-hub airports.
- 3 -

The complete proposals of the two carriers may be accessed online at: 

http://www.regulations.gov/ by entering “DOT-OST-2003-14528” (Bradford), “DOT-OST2004-17617” (DuBois), “DOT-OST-1997-2523” (Oil City/Franklin), or “DOT-OST-2003-

14950” (Jamestown) in the “Enter Keyword or ID” field.

Community and State Comments

On July 8, 2010, we requested community comments regarding the carrier selection at all four 

communities. A summary of the comments received follows.

Bradford

We received a letter from the Airport Director at Bradford Regional Airport supporting 

Gulfstream’s proposal that assumes Oil City/Franklin’s continued eligibility in the EAS program.

DuBois

The Department received letters from the Mayor of DuBois, the Clearfield County 

Commissioners, and the Chairman of the Clearfield-Jefferson Counties Regional Airport 

Authority. All unanimously support continued service from Gulfstream under its proposal that 

includes its service shared with Oil City/Franklin. The Mayor of DuBois states, “We are 

extremely happy with the excellent service we have received from Gulfstream and the DuBois 

Regional Airport and look forward to continuing this relationship.”

Oil City/Franklin

We received dozens of letters and e-mail comments concerning the carrier selection at Oil 

City/Franklin. Civic officials from Franklin and Oil City, businesses, individuals, business 

organizations, and other stakeholders unanimously support Gulfstream’s service to Cleveland 

and voiced the desire to continue to have air service to Venango Regional Airport, which serves 

the Franklin and Oil City area.

Jamestown

Letters from the Manager of Chautauqua County Airport – Jamestown and the Chautauqua 

County Executive fully support Gulfstream’s proposal to continue service to Cleveland. The 

letters also detail the struggles the community has experienced with several carrier and hub 

transitions over the past few years. They also state that Gulfstream has delivered on everything 

they have promised and that if Charter Air Transport was selected, the community would again 

face significant marketing hurdles to battle the negative effects of having three airlines serve the 

community in a 2 1⁄2 year period.

Other letters

The Director of Airports for Cleveland Airport Systems expressed his support and that of the 

City of Cleveland for the continuation of Gulfstream’s service from all four communities 

discussed here to Cleveland Hopkins International Airport. 

Decision

For Bradford and DuBois, the decision is straightforward. Gulfstream, the incumbent, was the 

only applicant and the carrier has the full support of both communities. For Bradford, 
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Gulfstream addressed the Department’s request for proposal concerning Bradford’s per 

passenger subsidy rate and lowered the annual subsidy request. If traffic levels remain at current 

levels at Bradford, the subsidy going forward will be less than $200 per passenger. We therefore 

find that the subsidy requested is reasonable for the service provided.

For Oil City/Franklin and Jamestown, Charter Air Transport does not meet any of the four 

statutorily mandated carrier-selection criteria: (1) it has no demonstrated reliability in providing 

scheduled air service; (2) it does not have contractual and marketing arrangements with a larger 

carrier at the hub; (3) it does not have interline arrangements with a larger carrier to allow 

passengers and cargo at the hub to be transported through one reservation, ticket, and baggage 

check in; and (4) it did not receive any support from Jamestown or the Franklin/Oil City 

communities. In addition, its proposals would require a higher annual subsidy than 

Gulfstream’s. We have therefore eliminated Charter Air Transport from further consideration. 

At Jamestown, Gulfstream was the only applicant other than Charter Air Transport, and we find 

its subsidy request reasonable for the service provided.

At Franklin/Oil City, this leaves Gulfstream with a selectable proposal. As in its proposal for 

Bradford, Gulfstream responded to the Department’s request for proposals and presented several 

items that may help in reducing the subsidy per passenger at Oil City/Franklin. Gulfstream’s 

proposal for Oil City/Franklin offers a multi-faceted approach that it has planned with the 

community to increase enplanements and lower the per passenger subsidy. Gulfstream is 

prepared to waive any administrative fees associated with flying the route and has waived the 5% 

profit element in support of keeping air service to the Oil City/Franklin area. The community 

has pledged to allow Gulfstream to operate at the Venango Regional Airport free of airport 

charges, and the Oil Region Alliance, the Venango County Chamber of Commerce, the Franklin 

Area Chamber of Commerce, the Venango County Regional Planning Commission, and other 

stakeholders in the community have pledged to partner with Gulfstream in a large marketing 

outreach program called “SOS” or “Save Our Service.” Based on the large number of 

community letters we received, there appears to be serious interest and motivation in increasing 

the usage of the community’s subsidized air service. Although we are selecting Gulfstream to 

continue to serve Oil City/Franklin, we will continue to monitor enplanements and take 

appropriate action if necessary.

We shall make this selection at the four communities discussed here contingent upon the 

Department’s receiving properly executed certifications from Gulfstream 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 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. Gulfstream is subject to the 

Department’s continuing fitness requirements, and no information has come to our attention that 

would cause us to question either 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 
- 5 -

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 Gulfstream International Airlines to provide essential air service at Bradford, 

DuBois, and Oil City/Franklin, Pennsylvania, and Jamestown, New York;

2. We set the final rates of compensation for Gulfstream International Airlines for the provision 

of essential air service at Bradford, DuBois, and Oil City/Franklin, Pennsylvania, and 

Jamestown, New York, as described in Appendix C;

3. We direct Gulfstream International Airlines 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 Gulfstream International Airlines continues to be fit, willing and able to operate 

as a commuter carrier and capable of providing reliable essential air service at Bradford, DuBois, 

and Oil City/Franklin, Pennsylvania, and Jamestown, New York,

5. These dockets will remain open until further order of the Department; and

6. We will serve copies of this order on the Mayors of Bradford, DuBois, Oil City, Franklin, 

and Jamestown, the managers of Bradford Regional Airport, DuBois Regional Airport, Venango 

Regional Airport (Oil City/Franklin), Chautauqua County/Jamestown Airport, Gulfstream 

International Airlines and Charter Air Transport.

By:

SUSAN L. KURLAND

Assistant Secretary

for Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the Internet at http://www.regulations.gov
Appendix A

AREA MAP

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

Page 1 of 2

Gulfstream International Airlines (Proposal for Bradford and Jamestown)
Appendix B

Page 2 of 2

Gulfstream International Airlines (Proposal for DuBois and Oil City/Franklin)
Appendix C

Page 1 of 4

Gulfstream International Airlines

Essential Air Service to be Provided at Bradford, Pennsylvania

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

Scheduled Service: 18 weekly round trips to Cleveland

Intermediate stops and upline service: Service may be nonstop or routed via Jamestown, NY

Aircraft: Beech 1900D, 19 seats

Rate per Eligible Flight: $5971

Weekly Ceiling: $21,4922

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, 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 $1,087,306, divided by 1,822 annual departures (313 service days x 6 flights per service 

day x 97 percent completion).

2 36 flights per week multiplied by $597 per flight.
Appendix C

Page 2 of 4

Gulfstream International Airlines

Essential Air Service to be Provided at DuBois, Pennsylvania

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

Scheduled Service: 24 weekly nonstop or one-stop round trips to Cleveland 

Intermediate stops and upline service: Service may be nonstop or routed over Oil City/Franklin

Aircraft: Beech 1900D, 19 seats

Rate per Eligible Flight: $9131

Weekly Ceiling: $43,8242

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, 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 $2,228,996, divided by 2,441 annual departures (313 service days x 8 flights per service 

day x 97.5 percent completion).

2 48 flights per week per community multiplied by $913 per flight.
Appendix C

Page 3 of 4

Gulfstream International Airlines

Essential Air Service to be Provided at Oil City/Franklin, Pennsylvania

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

Scheduled Service: 12 weekly nonstop or one-stop round trips to Cleveland 

Intermediate stops and upline service: Service may routed over DuBois

Aircraft: Beech 1900D, 19 seats

Rate per Eligible Flight: $7541

Weekly Ceiling: $18,0962

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, 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 $915,101, divided by 1,214 annual departures (313 service days x 4 flights per service 

day x 97 percent completion).

2 24 flights per week multiplied by $754 per flight.
Appendix C

Page 4 of 4

Gulfstream International Airlines

Essential Air Service to be Provided at Jamestown, New York

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

Scheduled Service: 18 weekly nonstop or one-stop round trips to Cleveland

Intermediate stops and upline service: Service may be nonstop or routed over Bradford, PA

Aircraft: Beech 1900D, 19 seats

Rate per Eligible Flight: $9001

Weekly Ceiling: $32,4002

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, 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 $1,639,254, divided by 1,822 annual departures (313 service days x 6 flights per service 

day x 97 percent completion).

2 36 flights per week multiplied by $900 per flight.