Order 201 4

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- 12

Served: August 14 , 201 4



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION


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

Issued by the Department of Transportation

on the 14 th of August , 201 4

Essential Air Service at

MANLEY , ALASKA

MINT O
, ALASKA

Under 49 U.S.C. § 41731 et seq

. DOCKET DOT

- OST

- 2004

- 17563

ORDER RESELECTING CARRIER

Summary By this O rder

, the Department is reselecting Warbelow’s Air Ventures , Inc., ( Warbelow’s ) to provide Essential Air S ervice (EAS) at Manley and Mint o
, Alaska

, at a combined annual subsidy rate of $94,722 ($47,361 per community) for the period from September 1, 2014

, through August 31, 2016. 1

Background By Order 20 1 2

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- 10 , issued August 3 , 2012, we re selected Warbelow’s to provide EAS at Manley and Mi nto through August 31, 2014, consisting of three round trips per week to

Fairbanks on a Fairbanks

- Manley

- M into

- Fairbanks routing. Service is provided with either eight

- seat Cessna 206 or nine

- seat Piper PA

- 31

- 350 Navajo aircraft at a combined annual subsi dy rate of $91,068 ($45,534 at each community).

In anticipation of the end of the current contract, on April 2 , 2014 we issued Order 201 4

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, request ing proposals from carriers interested in providing EAS at the communities for a new contract period, b eginning September 1, 201 4

. We received two proposal s, from Warbelow’s

, the incumbent, and Tatonduk Outfitters Limited d/b/a Everts Air Alaska (Everts).

1 Such subsidy is calculated on a fiscal year basis, subject to the availability of funds.- 2

-

The carrier s’ complete proposal s and community comments may be accessed online at www.regulations.gov by entering “DOT

- OST

- 2004

- 17563 ” in the search box . Therefore, we will only briefly summarize the proposal s and comments below.

Proposal of W arbelow’s

Warbelow ’s prop osal included only one service option, to co ntinue its existing service

, consisting of three weekly round trips to Fairbanks, routed Fairbanks

- Manley

- Minto

- Fairbanks. Service will be provided with a twin

- engine, nine

- seat Piper PA

- 31

- 350 Navajo aircraft. For this service, Warbelow’s will require a combined annual subsidy of $94,722 ($47,361 at each community).

Proposal of Everts Everts proposal also consists of three weekly round trips to Fairbanks. Everts would route the flights Fairbanks

- Minto

- Manley

- Fairbanks. Service would be provided with e ither single

- engine

Pilatus PC

- 12 or Cessna 208 aircraft, both with nine passenger seats. For this service, Everts would require a combined annual subsidy of $84,207.

Community Comments On May 7 , 2014, we requested comments from the community and S tate r egarding the carrier

selection case. We received multiple comments in support of continuation of Warbel ow’s

service from individuals in the communities as well as the Minto Development Corporation and

Seth

- De

- Ya

- Ah Corporation. We received one comment in favor of Everts. The comments we

received in favor of Warbelow’s cited their reliability and good customer service. In their support of Warbelow’s, both the Minto Development Corporation and Seth

- De

- Ya

- Ah Corporation cited, among other factors, Warbelow ’s use of twin

- engine aircraft.

Decision

The carrier

- sele ction issue is straightforward. When selecting a carrier to provide EAS in Alaska, 49 U.S.C. § 41733(c)(1) directs us to consider six factors: (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub; (3) interline arrangements with a larger carrier at the hub; (4) community views; (5) the carrier’s plan to market its service to the community; and ( 6 ) the experience of the applicant in providing

scheduled air service or significant patterns of non

- scheduled air service. In addition, the Continuing Appropriations Act, 2014, Public Law No. 113

- 46, provides that when selecting a carrier to provide EAS, the Department may consider the relative subsidy require ments, thus codifying a factor that we have considered sin ce the inception of the program.

Everts has an advantage in terms of required subsidy, requesting $10,515 less annually than Warbelow’s. However, in this case, the communities desire to continue twin

- engine service is

decisional. The Minto Development Corporation cites twin

- engine service as necessary to provide the capacity needed to support its growing tourism development efforts. The Seth

- De

Ya

- Ah Corporation also cited the additional lift c apacity of twin engine aircraft for when they require the shipment of inventory by air. We will therefore select Warbelow’s to continue providing EAS at Manley and Minto, Alaska.- 3

-

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that DOT find an ai r carrier fit, willing, and able to provide reliable service before DOT may subsidize it to provide E ssential A ir S ervice. 2

Warbelow’s 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 finding s . DOT therefore concludes that the carrier remain s fit to

condu ct the operations proposed here.

This order is issued under authority delegated in 49 CFR Part 1. 25 a( b ).

ACCORDINGLY,

1. We re select Warbelow’s Air Ventures , Inc., to provide Essential Air S ervice at Manley and

Minto

, Alaska , as described in Appendix C ;

2 . We direct Warbelow’s Air Ventures , 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 examinati on by representatives of the Department. Such documentation shall be retained for seven years from the date of service of this Order, or until the Department indicates that the records may be destroyed, whichever comes first. Copies of flight logs for ai rcraft sold or disposed of must be retained. The carrier may forfeit its compensation for any claim that is not sup ported under the terms of this O rder;

3 . We find that Warbelow’s Air Ventures , Inc., continue s to be fit, willing and able to operate as

a certificated air carrier and capable of providing reliable E ssential A ir S ervice at Manley and

Minto

, Alaska ;

4 . Th is docket will remain open until further order of the Department; and

2 Warbelow’s is authorized to provide services as a commuter carrier under Part 135 of the Federal Aviation
Regulations (FARs) and Part 298 of our regulations (14 CFR 298).- 4

-

5 . We will serve copies of this O rder on the Division of Statewid e Aviation of the Alaska Department of Trans portation, the civic parties of Manley and Minto, Alaska, Warbelow’s Air

Ventures and Tatonduk Outfitters Limited d/b/a Everts Air Alaska

.

By:

SUSAN L. KURLAND Assistant Secretary for Aviation

and Internat ional Affairs

(SEAL)

An electronic version of this document is available at http://www.regulations.govAPPENDIX A

SERVICE AREA MAPAPPENDIX B Page 1 of 2APPENDIX B Page 2 of 2APPENDIX C Warbelow’s Air Ventures, Inc.
Essential Air Service to be Provided at Manle y and Minto

, Alaska
DOT

- OST

- 200 4

- 17563

Effective Period: September 1 , 2014

, through August 31, 2016

Scheduled Service: Manley: Three (3) weekly nonstop or one

- stop round trips to Fairbanks
Minto: Three (3) weekly nonstop or one

- stop round trips to Fairba nks Aircraft type: Nine

- seat Piper PA

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- 350 Navajo Manley Minto

Annual Subsidy : 1 $47,361 $47,361 Annual Flights: 2 312 312 Subsidy per Flight: 3 $152 $152 Weekly Ceiling: 4 $912 $912

Note: The carrier understands that it may forfeit its compens ation 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 t he required service, without prior approval. The carr ier 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 cert ain weather cancellations, only co mpleted 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 perio d in question. If the carrier contemplates any such changes beyond the scope of the Order during the applicable period of these rates, it mu st first notify the Office of Aviation Analysis in writing and receive written approval from the Department to be ensured of full c ompensation. 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 w ill 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 transpor tation system provided to the community.

If the Department unilaterally, either partially or complete, terminates or reduces payments for service or changes service r equirements 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 wi thout regard to any requirement for notice of such cessation. Those adj ustments 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, re levant 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 forego ing 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 Gove rnment 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 Depart ment will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 9 0 days of the last day of the month for which compensation is being claimed. For example, claims for service provided in J uly must be filed by October 31 st ; August claims must be submitted by November 30 th , and so on.

1 See Appendix B. Annual subsidy of $94,722 divided by 2 communities.

2 3 round trips per week x 2 directions x 52 weeks = 31 2

. 3 Annual subsidy di vided by annual flights.

4 Subsidy per flight x weekly flights.