Order: 2014-4-19

Served April 22, 2014

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 22nd day of April, 2014

Essential Air Service at

CLOVIS, NEW MEXICO DOCKET DOT-OST-1996-1902

under 49 U.S.C. § 41731 et seq.

ORDER SELECTING CARRIER AND

ESTABLISHING SUBSIDY RATES 

Summary

By this Order, the Department is selecting Boutique Air, to provide Essential Air Service 

(“EAS”) at Clovis, New Mexico, for the two-year period beginning June 1, 2014, through 

May 31, 2016. Boutique Air will provide Clovis with 18 nonstop round trips each week to 

Dallas/Fort Worth International Airport (“DFW”), using 9-seat Pilatus PC-12 (“PC-12”)

aircraft, at an annual subsidy rate of $3,179,857.

1

Background

By Order 2012-11-33, issued on November 29, 2012, the Department re-selected Great 

Lakes Aviation, Ltd. (“Great Lakes”) to provide EAS at Clovis with 12 one-stop round 

trips per week between Clovis and Denver, via Alamosa, Colorado; Liberal, Kansas; Santa 

Fe, New Mexico; or Pueblo, Colorado, using 19-seat Beechcraft 1900D aircraft, for the 

period from December 1, 2012, through November 30, 2014, at an annual subsidy rate of 

$1,954,490.

On December 10, 2013, Great Lakes filed a 90-day notice of its intention to terminate its 

scheduled air transportation service at Clovis, effective March 10, 2014. In that notice, 

 1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated 

funds.
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Great Lakes explained that it had offered the community several service options over the 

years, including different hubs, and the community currently takes the position that DFW 

would most likely provide the best air service options for the community. While Great 

Lakes agrees with the community, it did not operate service at DFW at the time, and 

therefore the air carrier filed notice to terminate its operations at Clovis. 

In response to Great Lakes’ notice to terminate its operations at Clovis, the Department 

issued Order 2014-1-10, on January 14, 2014, prohibiting Great Lakes from terminating 

service at the community for 30 days beyond the end of the air carrier’s 90-day notice 

period, i.e. April 9, 2014. Additionally by that Order, the Department requested proposals 

from air carriers interested in providing EAS at Clovis, with subsidy support if necessary. 

In response to that Order, the Department received proposals from Boutique Air, SeaPort 

Airlines, Inc. (“SeaPort”), and On the Way – Clovis Cabs. 

A copy of those proposals, as well as the complete public file for EAS at Clovis, may be 

accessed online through the Federal Docket Management System at 

http://www.regulations.gov, by entering “DOT-OST-1996-1902” in the SEARCH for: 

Rules, Comments, Adjudications or Supporting Documents:” field.

Termination of Service by Great Lakes

On January 31, 2013, Great Lakes terminated all service to Clovis, leaving the community 

without scheduled air transportation.

Proposal of Boutique Air

Boutique Air proposed to provide the community with 24 nonstop round trips per week to 

DFW, using 9-seat Pilatus PC-12 aircraft, at an annual subsidy request of $3,888,274.

Proposal of SeaPort Airlines, Inc.

SeaPort proposed to provide 12 one-stop round trips per week to Dallas Love Field via 

Abilene, Texas, using 9-seat Cessna Caravan aircraft, at an annual subsidy request of 

$2,813,992.

Proposal of On the Way – Clovis Cabs

On the Way – Clovis Cabs proposed three round trips on ground transportation using a 47-

passenger charted bus and/or two 15-passenger vans, with service to Albuquerque 

International Sunport, at an annual subsidy request of $1,800,000. 

Community Comments

By letter dated February 20, 2014, the Department requested community comments 

regarding this EAS case. In response, we received a letter from the Honorable David 

Lansford, Mayor of Clovis. That letter explained that the Clovis City Commission

recommends Boutique Air to serve the Clovis market. Mayor Lansford explained that his 

constituents have frequently expressed a desire for service to the Dallas/Fort Worth

Metroplex, and the aircraft used by Boutique Air, a 9-seat PC-12, presents the safest and 

most comfortable options for the community. Additionally by that letter, Mayor Lansford 
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expressed that the community is supportive of service consisting of fewer than 24 round 

trips per week. 

Subsequent Developments 

On April 10, 2014, Boutique Air filed an amendment to its proposal by adding a second 

option consisting of 18 round trips to DFW for a two-year term, using 9-seat PC-12 

aircraft, at a subsidy request of $3,179,857. SeaPort was afforded an opportunity to amend 

its proposal, but declined to make any adjustments to its original proposal.

Decision

In selecting an air carrier to provide subsidized EAS not in Alaska, 49 U.S.C. 

§ 41733(c)(1) directs us to consider five factors: (1) service reliability; (2) contractual and 

marketing arrangements with a larger air carrier at the hub; (3) interline arrangements with 

a larger air carrier at the hub (4) community views; and (5) whether the air carrier has 

included a plan in its proposal to market the service. In addition, the Consolidated and 

Further Continuing Appropriations Act, 2012, Public Law No. 112-55, and continued by 

the Full-Year Continuing Appropriations Act, 2013, Public Law No. 113-6, and Continuing 

Appropriations Act, 2014, Public Law No. 113-46, provides that when selecting an air 

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. 

Regarding On the Way – Clovis Cabs, it proposes ground transportation, which is not 

responsive to the Department’s request for proposals for air service. Moreover, the 

community is entitled to air service, which On the Way – Clovis Cabs would not provide. 

Therefore, we will not consider this application further.

As between Boutique Air and SeaPort, we have decided to select Boutique Air. SeaPort

proposed two one-stop round trips a day with 9-seat Cessna Caravans. In our request for 

proposals, we requested service levels that were comparable to the then-existing service 

levels, e.g., two round trips a day with 19-seat aircraft, or more frequencies with 9-seat 

aircraft.2 Not only did SeaPort not propose increased frequencies with 9-seat aircraft, the 

carrier also proposes an intermediate stop, further reducing the capacity available to Clovis 

passengers. Assuming that one half of the seats would be available to Clovis passengers

and one half for Abilene passengers (boarding at the intermediate stop), Clovis effectively 

would have 4 1⁄2 seats available per flight or 9 outbound seats per day, contrasted with the 

38 seats per day that we had requested (2 departures x 19 seats). Further, the community 

did not support SeaPort’s proposal.

Regarding Boutique Air, the Mayor of Clovis states that the community fully supports 

Boutique Air’s proposal. However, perhaps recognizing that Boutique Air’s original 

proposal requires nearly $1 million more than SeaPort’s proposal, the community on its 

 2 In Order 2014-1-10, the Department solicited service consistent with what Clovis received, which was 12 

weekly round trips with 19-seat aircraft. Selecting Boutique to provide 6 additional weekly round trips more 

than what Clovis received, but with 9-seat aircraft instead of 19-seat aircraft will accommodate the current 

passenger enplanements of approximately 5 per day while giving the community room to grow its 

enplanements beyond that.
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own motion stated that it was willing to accept fewer than 24 round trips a day. The 

difference between SeaPort’s bid of 12 one-stop round trips per week at $2,813,992 is only 

slightly less than Boutique Air’s amended proposal of 18 nonstop round trips per week at 

$3,179,857.

When possible, and within budgetary limitations, we accede to a community’s 

recommendations for its air carrier choice. As discussed above, Clovis recommends the 

selection of Boutique Air. We are also highly cognizant of the fact the Clovis is currently 

without any scheduled air service and has been since February 1, 2014. Under these 

circumstances, we will select Boutique Air’s amended proposal of 18 nonstop round trips 

per week, for an annual subsidy of $3,179,857. 

About Boutique Air

Boutique Air was formed as a corporation under the laws of the State of California on 

June 1, 2007. The company was originally called Shasta Flyers Aviation, Inc. The air 

carrier has a successful record of performing on-demand charters, pilot training, and air 

attack patrol services for government sectors, such as the U.S. Forest Service, Bureau of 

Land Management, and California Department of Forestry and Fire Protection. On 

September 20, 2011, Shasta Flyers was purchased by Open Trip, Inc., which subsequently 

changed the name of the company to Boutique Air, Inc. 

On July 2, 2012, Boutique Air, which at the time was operating as an on-demand air taxi 

serving the Northern California area and operating under Part 298 of the Department’s 

regulations and Part 135 of the Federal Aviation Regulations, filed an application in Docket 

DOT-OST-2012-0108 for authority to conduct scheduled passenger operations as a 

commuter air carrier.

By Order 2012-12-07, issued December 14, 2012, the Department found Boutique Air fit to 

conduct scheduled passenger service as a commuter air carrier and Boutique Air currently 

provides scheduled service between Los Angeles and Las Vegas. 

Note Regarding Eligibility

We note that Clovis is exempt from the $200 per passenger statutory limit3 because it is 

more than 210 miles from the nearest large or medium hub airport; however, the 

Department wishes to remind Boutique Air and Clovis about the recently enacted law that 

established a new subsidy cap at $1,000 per passenger regardless of distance from hub 

airports.4

 The Department fully expects both parties to work cooperatively to ensure 

subsidy rates remain well below the $1,000 per passenger level to remain eligible for the 

EAS program. 

 

 3 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. 

4 See 49 USC § 41731(a)(1)(C).
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We shall make this selection of Boutique Air at Clovis contingent upon the Department 

receiving properly executed certifications from the air carrier that it is in compliance with 

the Department’s regulations regarding drug-free workplaces and nondiscrimination, as

well as the regulations concerning lobbying activities.

5

Air Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that we find an air carrier fit, willing, and able to 

provide reliable service before we may subsidize it to provide EAS. Boutique 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. We 

have contacted the Federal Aviation Administration, and it has raised no concerns that 

would negatively affect our fitness findings. We therefore conclude that the air carrier is 

reliable and remains 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 selects Boutique Air to provide Essential Air Service at Clovis, New 

Mexico, at the service levels and subsidy rate as described in Appendix B, for the period 

from June 1, 2014, through May 31, 2016; 

2. We direct Boutique Air 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 

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 air carrier may forfeit its compensation for any claim that is not 

supported under the terms of this Order;

3. We find that Boutique Air is fit, willing and able to operate as a commuter air carrier,

and capable of providing reliable Essential Air Service at Clovis, New Mexico;

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

 5 The certifications are internet accessible at: http://www.dot.gov/policy/aviation-policy/small-communityrural-air-service/essential-air-service.
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5. The Department will serve copies of this Order on the civic officials of Clovis, New 

Mexico, the Manager at Clovis Municipal Airport, Boutique Air, SeaPort Airlines, Inc., On 

the Way – Clovis Cabs, and the service list for this docket.

By:

 

 SUSAN L. KURLAND

 Assistant Secretary for

 Aviation and International Affairs

(SEAL)

An electronic version of this document is available at

http://www.regulations.gov

 
Appendix A

Boutique Air

Annual Compensation Requirements for Essential Air Service at

Clovis, New Mexico to Dallas/Ft. Worth International Airport (DFW)

For 24 Round Trips per Week at 98.0% Completion Factor

As Originally Proposed

-------------------------------------------Amended Proposal-----------------------------------------------

RTs per Week Destination Subsidy Request Term

24 DFW (may move up to 12 to ABQ) $3,888,274 2 years

18 DFW (may move up to 12 to ABQ) $3,179,857 2 years

Operations

Scheduled 

Flights 2,496

Completion Factor of 98% 2,446

Scheduled Block Hours 4,056

Scheduled Seats 22,464

Scheduled ASMs 8,154,432

Revenue

Passengers 4,400

Average Fare $119.50 

Fare Revenue $252,824 

Total Revenue $525,824 

Expenses

Fuel $1,290,604 

Ownership $660,000 

Maintenance and Reserves $1,297,920 

Staff $694,682 

Marketing and Distribution $17,601 

Other Indirect Costs $243,097 

Total Costs $4,203,904 

Profit Element $210,195 

Margin 5.00%

Total Subsidy Requirement $3,888,274 
 Appendix B

Boutique Air

Essential Air Service to be provided at Clovis, New Mexico

Effective Period: June 1, 2014, through May 31, 20161

Scheduled Service: Eighteen nonstop round trips each week to Dallas/Ft. Worth

Aircraft: 9-Seat Pilatus PC-12

Rate per Eligible Flight: $1,7282

Weekly Ceiling: $62,2083

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 September 30, 2014. The Government’s obligation for 

performance under this order beyond September 30, 2014, 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 September 30, 2014, until funds are made available to the Department for performance. If sufficient funds are 

not made available for performance beyond September 30, 2014, 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 We selected June 1, 2014 as a budgetary marker. If Boutique Air plans to initiate service at Clovis prior to June 1, 

we request that the carrier coordinate with the Department.

2 Annual compensation of $3,179,857 divided by 1,840 annual departures (313 service days x 6 flights per service 

day x 98 percent completion).

3 36 flights per week multiplied by $1,728 per flight.