Order 20 1 4

- 2

- 17

Served: February 25

, 20 1 4



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 25 t h day of February , 20 1 4

ORDER RE SELECTING CARRIER

Summary By this Order , we are re selecting Multi

- Aero Inc., d/b/a Air Choice One (Air Choice One) , to

p rovide subsidiz ed Essential A ir S ervice (EAS) at Jonesboro, Arkansas

, with single

- engine,

nine

- passenger Cessna Grand Caravan air craft

, for the four

- year period from March 1, 2014, through February 28 , 201 8, at annual subsidy rate s of $1,942,890 for years one and two, and $1,923,462 for years three and four

. 1 See Appendix A for a map.

Background By Order 2011

- 12

- 14, issued on December 22, 2011, the Department selected Air Choice One to provide three round trips each weekday and weekend (18 weekly) from Jo nesboro to

Lambert

- St. Louis International Airport (STL) using 9

- passenger Cessna Grand Caravan aircraft, for a one year period beginning when the carrier inaugurated service through the end of the 12th month thereafter, at an ann ual subsidy rate of $1,717 ,781. Air Choice One inaugurated service at Jonesboro on February 13, 2012, thus making the expiration date February 28, 2013.

Subsequently, by Order 2013

- 2

- 24 , issued on February 25, 2013, the Department extended the service period of Air Choice One by a one

- year period, from March 1, 2013, through February 28, 2014. 2 Under that Order, Air Choice One continues to provide the same level

of service at the same annual subsidy level , as it was selected to provide in Order 2011

- 12

- 14

.

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the ava ilability of funds.

2 See Order 2013

- 2

- 24 for a complete discussion.

Essential Air Service at :

JONESBORO, AR KANSAS

Under 49 U.S.C. 41731 et seq

. DOT

- OST

- 1997

- 2935- 2

-

In anticipation of t he end of the current rate term

, on October 22, 2013, the Department

issued Order 20 1 3

- 10

- 12 solicit ing proposals to provide EAS , with subsidy support if

necessary, at Jonesboro

. In response to our solicitation we received one proposal from Air

Choice One

, the incumbent

.

Proposals The proposal is briefly summarized below

. A f ull cop y of the proposal and all public

comments received can be accessed at www.regulations.gov by searching for docket

DOT

- OST

- 1997

- 2935

.

Air Choice One Air Choice One’s proposal consists of one service option, offered as either a two

- or four

- year contract. Under the proposal, Air Choice One would continue its existing level of service at Jonesboro, namely, three nonstop round trips each weekday and weekend (18 weekly) to STL. Service would be provided on single

- engine, nine

- passenger Cessna Grand

Caravan aircraft. For a two

- year contract, Air Choice One would require an annual subsidy of $1,942,890. For a four

- year contract, it would require an annual subsidy of $1,942,890 for years one and two, and an annual subsidy of $1,923,462 for years three and four.

Community Comments
On December 6, 2013, we requested community comments on the carrier

- selection case at

Jonesboro. We received c omments from the Jonesboro Municipal Airport Commission as well as several local individuals. The Airport Commission fully supports the reselection of Air Choice One stating that at its December meeting, the commission unanimously voted to support the fou r

- year contract option from Air Choice One. All individual comments also praised Air Choice One’s service and were supportive of its reselection.

Decision

As Air Choice One was the only carrier to submit a proposal in this carrier

- selection case , the

dec ision to reselect them is straightforward

.

Air Choice One has provided reliable EAS at the community for the past two years, the carrier has succeeded in dramatically increasing passenger usage, and the community fully supports their reselection. Howev er, we are concerned that while Air Choice One has demonstrated a clear success in increasing passengers, we have not seen a commensurate drop in subsidy requirement. As such, w e will continue to monitor Air Choice One’s service

to ensure that it remains below the $200 per passenger statutory limit.

We shall make this selection of Air Choice One at Jonesboro contingent upon the Department’s receiving properly executed certifications from the air carrier that it is in compliance with the Department’s regul ations regarding drug

- free workplaces and nondiscrimination, as well as the regulations concerning lobbying activities. 3

3 T h e ce r ti f icati o n s a r e a v a i la b le o n t h e W eb at http://www.dot.gov/poli cy/aviation

- policy/small

- community

rural

- air

- service/essential

- air

- service

.- 3

-

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that we find an air carrier fit, willing, and able to provide reliable servic e before we may subsidize it to provide E ssential A ir S ervice

. Air

Choice One is subj ect 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. We have contacted the Federal Aviation Administration, and it has raised no concerns that would negatively affect our fitness finding. We therefore conclude that the carrier remains fit to conduct the operations proposed here.

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

.

ACCORDINGLY,

1. We re select Multi

- Aero Inc., d/b/a/ Air Choice One t o provide E ssential A ir S ervice at Jonesboro, AR

, at the service levels and subsidy rates as described in Appendix C , f or the period from M arch 1, 201 4 , through February 28, 2018 ;

2. We direct Multi

- Aero Inc., d/b/a/ Air Choice One 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 mann er 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, whicheve r 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 sup ported

under the terms of this O rder;

3 . We find that Multi

- Aero Inc., d/b/a/ Air Choice One c ontinues 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 Jonesboro, AR ;

4

. This d ocket will remain open until further Order of the Department; and

5

. We will serve copies o f this O rder on the mayor of Jonesboro

, Arkansas , the airport manager of the Jonesboro Municipal Airport , and Multi

- Aero Inc., d/b/a/ Air Choice One

.

By:

SUSAN L. KURLAND Assistant Secretary for Aviation

and International Affairs

(SEAL)

An electroni c version of this document is available at: http://www.regulations.gov/Appendi x A

REGIONAL MAP

This map is provided by Sabre ® AirVision TM Profit Essentials and is being used with express permission of the copy right holder,

Sabre Airline Solutions®.APPENDIX BAPPENDIX C Page 1 of 2

Multi

- Aero Inc., d/b/a Air Choice One
Essential Air Service to be Provided at Jonesboro, Arkansas
DOT

- OST

- 1997

- 2935

Effective Period: March 1, 2014

, through February 29 , 201 6

Scheduled Service: 18 weekly non stop round trips to Lambert

- St. Louis International Airport ( STL )

. Aircraft type: Cessna Grand Caravan ( 9 passenger seats). Annual compensation: $1, 942,890 1 Subsidy Rate per Flight: $ 1,059 2 Weekly Ceiling: $ 38,124 3

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, withou t 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 wea ther 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 fo r 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 Departm ent 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 p oints 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 t o the national air transportation system provided to the community.

If the Department unilaterally, either partially or complete, terminates or reduces payments for service or changes service requirements at a specific location provided for under this Ord er, 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 part ial reduction or cessation of payment.

Funds may not be available for perform ance under this Order beyond March 18, 2014 . The Government’s obligation for performance under this Order beyond March 18, 2014 , is subject to the availability of funds from which payment for services can be made. No legal liability on the part of the Go vernment for any payment may arise for performance under this Order beyond March 18, 2014 , until funds are made available to the Department for performance. If sufficient funds are not made available for performance beyond March 18, 2014 , the Department w ill provide notice in writing to the carrier.

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 t hereto shall not operate to controvert the foregoing paragraph.

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 p rovided in July must be filed by October 31 st ; August claims must be submitted by November 30 th , and so on.

1 See Appendix B.

2 $1, 94 2,890 annual compensation divided by 1,835 annual flights ( 36 weekly flights x 52 weeks x 9 8 % completion factor).

3 $ 1,059 per flight x 36 weekly flights

.APPENDIX C Page 2 of 2

Multi

- Aero Inc., d/b/a Air Choice One Essential Air Service to be Provided at Jonesboro, Arkansas

DOT

- OST

- 1997

- 2935

Effective Period: March 1, 201 6, through February 28 , 201 8

Scheduled Service: 18 weekly nonstop round trips to Lambert

- St. Louis International Airport (STL). Aircraft type: Cessna Grand Caravan ( 9 passenger seats). Annual compensation: $1, 923,462 1 Subsidy Rate per Flight: $ 1,048 2 Weekly Ceiling: $ 37,728 3

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 a ny 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 sign ificant 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 Anal ysis 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 al l 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 whic h 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 complete, terminates or reduces payments for service or changes service

re quirements 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 spec ific 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 part ial

reduction or cessation of payment.

Funds may not be available for performance under this Order beyond March 18, 2014 . The Government’s obligation for performance under this Order beyond March 18, 2014 , is subject to the availability of funds from which payment for se rvices can be made. No legal liability on the part of the Government for any payment may arise for performance under this Order beyond March 18, 2014 , until funds are made available to the Department for performance. If sufficient funds are not made avai lable for performance beyond March 18, 2014 , the Department will provide notice in writing to the carrier.

Subsidy contracts are subject to, and incorporate by reference, relevant statutes and Department regulations, as they may be amended from time to ti me. However, any such statutes, regulations, or amendments thereto shall not operate to controvert the foregoing paragraph.

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

1 See Appendix B.

2 $1,923,462 annual compensation divided by 1,835 annual flights (36 weekly flights x 52 weeks x 98% completion factor).

3 $1,048 per flight x 36 weekly flights.