Order: 2015-1-2

Served: January 6, 2015

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 6th day of January, 2015

Essential Air Service at

MASSENA, NEW YORK DOT-OST-2012-0163

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

ORDER RE-SELECTING AIR CARRIER

Summary

By this Order, the Department is re-selecting Hyannis Air Service, Inc. d/b/a Cape Air 

(Cape Air) to provide Essential Air Service (EAS) at Massena, New York (Massena) to 

Boston Logan International Airport (BOS) via Albany International Airport (ALB) using 9-

passenger Cessna 402 aircraft for the two-year term from April 1, 2015, through 

March 30, 2017. The annual subsidy rates are $2,608,773 for the first year, and $2,713,124 

for the second year.1

Background

By Order 2013-12-21 (February 22, 2013), the Department re-selected Cape Air to provide 

EAS at Massena for the two-year term from April 1, 2013 to March 30, 2015. Under that 

Order, Cape Air provides Massena with three daily nonstop round trips (21 per week) to 

BOS using Cessna 402 aircraft for a total annual subsidy of $2,090,949.

As the end of the contract was approaching, the Department issued Order 2014-9-14 

(September 23, 2014) requesting proposals from air carriers interested in providing EAS at 

 1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds.
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Massena for a new contract term. In response to that Order, two air carriers submitted 

proposals: Boutique Air and Cape Air (the incumbent air carrier).

Each air carrier’s complete proposal and community comments may be accessed online at 

www.regulations.gov by entering Docket number DOT-OST-2012-0163 in the search 

block.

Proposal of Boutique Air

Boutique Air submitted a proposal to provide 12 nonstop round trips per week to ALB and

12 nonstop round trips per week to John F. Kennedy International Airport (JFK) in New 

York City using single-engine 9-passenger Pilatus PC-12 aircraft for an annual subsidy of 

$3,768,147.

Proposal of Cape Air

Cape Air submitted two-year and four-year options to serve Massena from BOS via ALB

using 9-passenger Cessna 402 aircraft. Cape Air proposes to maintain its current service 

level, with three daily nonstop round trips (21 per week) to BOS. With regard to its annual 

subsidy request, Cape Air states in its bid that, in order to align revenue with operating 

costs over time, the airline has incorporated a 4% increase in annual subsidy for each year 

of the EAS contract. Cape Air’s proposed subsidy is summarized below:

Massena proposed annual subsidy

Two-Year Reselection Annual Subsidy

Year 1 $2,608,773

Year 2 $2,713,124

Four-Year Reselection

Year 1 $2,549,293

Year 2 $2,651,265

Year 3 $2,757,315

Year 4 $2,867,608

Community Comments

On October 28, 2014, the Department requested comments from Massena regarding this 

EAS air carrier-selection case. In response, Supervisor Joseph D. Gray submitted 

comments on behalf of the Town of Massena, supporting Cape Air’s proposal to provide 

EAS for a new, two-year term. In his letter, Supervisor Gray wrote, “The Council was 

pleased to see additional interest in the Massena EAS contract. We heard presentations 

from Cape Air and Boutique Air. While we were impressed with both, our positive 

experience with Cape Air was the deciding factor this year.”

Decision

After carefully reviewing each air carrier’s proposal and taking into account community 

feedback, the Department has decided to re-select Cape Air for a new, two-year term. We 
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base our decision on the five factors 49 U.S.C. § 41733(c)(1) directs us to consider: 1) 

service reliability; 2) contractual and marketing arrangements with a larger carrier at the 

hub; 3) interline agreements with a larger carrier at the hub; 4) community views, giving 

substantial weight to the views of the elected officials representing the users; 5) whether 

the carrier has included a plan in its proposal to market its service to the community. 

First, Cape Air has a proven record of providing reliable EAS at Massena, as well as 

several EAS communities. In addition, Cape Air’s service to BOS, a large hub airport,

coupled with its established interline ticketing and baggage agreements with most major 

U.S. airlines, will provide customers with seamless connections to the national air 

transportation system. Furthermore, Cape Air has community support, a key carrierselection criterion and included annual marketing expenses in its proposal, samples of print 

advertisements for its service, and noted that, in 2011, Cape Air opened a ticket office in 

Massena to provide greater community awareness and ticket sales to the public. 

Moreover, Boutique Air does not currently have the required slots from the FAA to 

provide its proposed service to JFK. Lastly, Cape Air’s total subsidy request for a twoyear contract is significantly lower than that of Boutique Air ($5,321,897 for Cape Air vs. 

$7,536,294 for Boutique Air). 

The Department shall make this selection contingent upon its receiving properly executed 

certifications from Cape Air that it is in compliance with the Department’s regulations 

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

concerning lobbying activities.2

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that the Department find an air carrier fit, 

willing, and able to provide reliable service before the Department may subsidize it to 

provide EAS. Cape Air is subject to the Department’s continuing fitness requirements, and 

no information has come to our attention that would cause us to question the air carrier’s 

fitness at this time. The Department has contacted the Federal Aviation Administration, 

and it has raised no concerns that would negatively affect our fitness findings. The 

Department therefore concludes that Cape Air is reliable and fit to conduct the operations 

proposed here.

This Order is issued under authority delegated in 49 CFR Part 1.25a(b).

ACCORDINGLY,

1. The Department re-selects Hyannis Air Service, Inc. d/b/a Cape Air to provide

Essential Air Service at Massena, New York, and establishes the annual subsidy rates as 

described in Appendix C;

2. The Department directs Hyannis Air Service, Inc. d/b/a Cape Air to retain all books, 

records, and other source and summary documentation to support claims for payment, and 

 2 The certifications are available online under “Reports and Publications” at 

http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/essential-air-service
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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 from the service date of this Order 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 carriers may forfeit their compensation for any claim 

that is not supported under the terms of this Order;

3. The Department finds that Hyannis Air Service, Inc. d/b/a Cape Air is fit, willing and 

able to operate as a commuter air carrier, and capable of providing reliable Essential Air 

Service at Massena, New York;

4. This docket will remain open pending further Department action; and

5. The Department will serve a copy of this Order on the Mayor and Town Supervisor of 

Massena, New York; the Airport Manager of Massena International Airport; Boutique Air, 

and Hyannis Air Service, Inc. d/b/a Cape Air.

By:

BRANDON M. BELFORD

Deputy Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at

www.regulations.gov
Appendix A

AREA MAP

Maps generated by the Great Circle Mapper - copyright © Karl L. Swartz.

 
 Appendix B

Page 1 of 2

Essential Air Service at Massena, New York
 Appendix B

Page 2 of 2
Appendix C

Page 1 of 2

Hyannis Air Service, Inc. d/b/a Cape Air

Essential Air Service to be Provided at Massena, New York

DOT-OST-2012-0163

Annual Subsidy: $2,608,773

Effective Period: April 1, 2015, through March 30, 2016

Hub: Boston Logan International Airport (BOS)

via Albany International Airport (ALB)

Scheduled Service: 21 one-stop round trips per week to BOS

Aircraft: 9-passenger Cessna 402

Rate per Eligible Flight:1 $1,231

Weekly Ceiling:

2 $51,702

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 service levels, the carrier may cease to provide service to that 

specific location without regards 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 may not be available for performance under this Order beyond January 14, 2015. The Government’s obligation for 

performance under this Order beyond January 14, 2015, is subject to the availability of 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 January 14, 2015, until funds are made available to the Department for performance. If sufficient funds are not 

made available for performance beyond January 14, 2015, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the 

month for which compensation is being claimed. For example, claims for service provided in July must be filed by 

October 31; August claims must be submitted by November 30, and so on.

 1 Annual compensation of $2,608,773 divided by 2,119 annual departures (42 weekly departures x 52 weeks x 97 

percent completion) 2 42 arrivals and departures per week multiplied by $1,231
 Appendix C

Page 2 of 2

Hyannis Air Service, Inc. d/b/a Cape Air

Essential Air Service to be Provided at Massena, New York

DOT-OST-2012-0163

Annual Subsidy: $2,713,124

Effective Period: April 1, 2016, through March 30, 2017

Hub: Boston Logan International Airport (BOS)

via Albany International Airport (ALB)

Scheduled Service: 21 one-stop round trips per week to BOS

Aircraft: 9-passenger Cessna 402

Rate per Eligible Flight:1 $1,280

Weekly Ceiling:

2 $53,760

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 service levels, the carrier may cease to provide service to that 

specific location without regards 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 may not be available for performance under this Order beyond January 14, 2015. The Government’s obligation for 

performance under this Order beyond January 14, 2015, is subject to the availability of 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 January 14, 2015, until funds are made available to the Department for performance. If sufficient funds are not 

made available for performance beyond January 14, 2015, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the 

month for which compensation is being claimed. For example, claims for service provided in July must be filed by 

October 31; August claims must be submitted by November 30, and so on.

 1 Annual compensation of $2,713,124 divided by 2,119 annual departures (42 weekly departures x 52 weeks x 97 

percent completion)

2 42 arrivals and departures per week multiplied by $1,280