Order: 2011

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- 1 Served: April 1, 2011



### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.
Issued b y the Department of Transportation on the 1st day

of April , 20 11 Essential Air Service at
CHISHOLM/HIBBING, MINNESOTA THIEF RIVER FALLS, MINNESOTA Under 49 U.S.C. 41731 et seq

. DOCKET DOT
- OST
- 2003
- 15796 DOCKET DOT
- OST
- 2001
- 10642



### ORDER REQUESTING PROPOSALS Summary By this order, the Department is requesting proposals from airlines interested in providing essential air service (EAS) at Chisholm/Hibbing and Thief River Falls, Minnesota , for the two

ye ar period beginning November 1, 2011 , with or without subsidy . Proposals are due by May 3, 2011 . (See Appendix A for a map.) Background Mesaba Aviation Inc., operating as Delta Connection (Mesaba) serves Chisholm/Hibbing and Thief River Falls under two different contracts. By Order 2009

- 8

- 8, August 11, 2009, the Department re

- selected Mesaba to provide Chisholm/Hibbing with three nonstop round trips each weekday

and two nonstop round trips on Saturday and Sunday

(19 a week) to Minneapolis/St. Paul International Airport (Minneapolis) using 34

- seat Saab 340 aircraft for the two

- ye ar period beginning November 1, 2009, through October 31, 2011 , for an annual subsidy of $2,938,878 . By

Order 2009

- 4

- 20, April 27, 2009, the Department re

- selected Mesaba to provide Thief River Falls 12 one

- stop round trips per week over a Thie f River Falls

Chisholm/Hibbing

- Minneapolis routing using 34

- seat Saab 340 aircraft for the tw o - year period beginning June 1, 2009, through May 31, 2011 , for an annual subsidy of $1,230,322. Thief River Falls has traditionally been packaged with Fort Dodge and Mason City , I owa. However, because Chisholm/Hibbing and Thief River Falls are now served over the same linear routing, the Department decided that the se two communities should be packaged together and on the same contract cycle

. Therefore, the Department issued Order 2010

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- 29,- 2

-

December 23, 2010, extending Thief River Falls' contract and subsidy rate to end on October 31, 2011, s ynchronizing both communities’ contract expiration dates. R equest for Proposals As the end of the current rate term s approach , we are here requesting proposals from carriers interested in providing service at Chisholm/Hibbing and Thief River Falls , with or without subsidy support, for the two

- year period beginning November 1, 20 1 1 , through October 31, 2013 . Carriers sh ould file their proposals no later than May 3 . After that date, our staff will docket proposals, thereb y making them public, and shortly afterwards will provide a summary of the proposals to the community and ask them for their final comments. We will g ive full consideration to all proposals filed in a timely manner. 1 Interested carriers should prepare their proposals with every expectation that their initial proposals will also be their final and only proposals. We retain the discretion to negotiate proposals with carriers when we deem it desirable. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and solicit a new round of proposals. We are here providing interested carriers with some basic information to s erve as guidance when they

prepare their proposals, but we will not prescribe a precise format. We expect proposals to adequatel y describe the service being proposed and the annual amount of subsidy being requested. The applicants can make their own judgments as to the level of detail they wish to present; however, they might want to include proposed schedules as well as supporting data for their subsidy requests, such as projected block hours, revenues and expenses. We strongl y encourage clear, well

- doc umented proposals that will facilitate their evaluation b y the affected community and the Department. 2 Proposals should provide sufficient capacity to accommodate historical levels of traffic. In order to assist carriers in developing traffic and revenue projections for their proposals, we have provided a summary of historical passengers in Appendix B. For calendar year 2010, Chishol m/Hibbing’s total passengers were 22,085 , and Thief River Fal l s’ total passengers were 4,996, averages of 35 and 8 enplanements a day , respectivel y. W e expect service levels that are c ons istent with what the communities currentl y receive , with service to Minneapolis , or an y hub that offers access to the national air transportation system utilizing 15

- seat or larger aircraft

. Currently , the communities are served over a Thief River Falls

- Chisholm/Hibbing

- Minneapolis routin g. With that service pattern using 30 to 34

- seat aircraft, the Department expects

1 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide essential air service without subsidy and we determine that service can be reliably provided without such compensation, we do not proceed with the carrier

- selection case. Instead, we sim ply rely on that carrier’s subsidy

free service as proposed. 2 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c)(1) directs us to consider four 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; and (4) community vie ws. In addition, the Consolidated Appropriations Act, 2008, Public Law 110

- 161 , provides that when selecting a 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. Interested carriers should also be aware that our general provisio ns governing EAS will be included in the selection order as part of our authorization of subsidy for the selected service. Appendix C of this order contains those general provisions.- 3

-

proposals for three round trips each weekday and four each w eekend (19 a week) at Chisholm/Hibbing, and two round trips each weekday and weekend (12 a week) to Thief River Falls

. For proposals with 19

- seat aircraft over a Thief River Falls

- Chisholm/Hibbing

Minneapolis routing, we would expect four round trips each day at Chisholm/Hibbing and three round trips each day

at Thief River Falls. For carriers that wish to serve the communities independentl y , we expect pro posals for Chisholm/Hibbing to consist of two round trips each day (14 a week) using 30 to 34

- seat aircraft or three round trips each weekday and weekend (18 a week) using 19

- seat aircraft. For Thief River Falls, we expect proposals to consist of two round trips a day

and two round trips each weekend, with 19

- seat or larger aircraft

. We would also entertain proposal s with 8/9

- seat aircraft and additional frequencies. Should the communities agree to aircraft with few er than 15 passenger seats, in effect waiving their right t o 15

- seat or larger aircraft, we would consider the waiver to appl y onl y to the two

- year carrier

selection at hand, i.e. we would not assume that the communities would waive their rights for all time. As alway s, we will formally solic it the communities’ views on any service options we receive before making a long

- term carrier selection decision. Carriers are also welcome to propose more than one option, if they choose; they

need not limit themselves to those requirements if they

envis ion other, potentially more attractive service possibilities

-- different hubs, frequency

or equipment, for example

-- with subsidy requirements that remain competitive. The communities and air carriers are encouraged to work together in advance of the due date for proposals to craft a service pattern that is desirable to the communit ies and meets the operational needs of the airline s . New Filing Procedures Carrier proposals should be submitted to the Department with all materials merged into a single document. In addition, because the document will be published on Regulations.gov, each page should be formatted to be viewed online. Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobb ying activities, drug

- free workplaces and nondiscrimination. 3 Consequently , all carriers receiving Federal subsidy to support essential air service must certify that they are in compliance with Department regulations regarding drug

- free workplaces and nondiscrimination, and those carriers whose subsidies exceed $100,000 over the life of the rate term must also certify that they are in compliance with the regulations governing lobbying activities. All carriers that plan to submit proposals involving subsidy should submit the required certifications along with their proposals. Interested carriers requiring more detailed information regarding these requirements, as well as copies of the certifications, should contact the Office of Aviation Analy sis at (202) 3 66

- 5903. The Department is prohibited from paying subsidy to carriers that do not submit these documents. 4

3 The regulations applicable to these areas are: (1) 49 CFR Part 20

– New restrictions on lobbying; (2) 49 CFR Part 21

– Nondiscrimination in federally

- assisted programs of the Department of Transportation

– Effectuation of title VI of the Civil Rights Act of 1964; 49 CFR Part 27

– Nondiscrimination on the basis o f disability in programs and activities receiving or benefiting from Federal financial assistance; and 14 CFR Part 382

– Nondiscrimination on the basis of disability in air travel; and (3) 49 CFR Part 29

– Government

- wide debarment and suspension (non

proc urement) and government

- wide requirements for drug

- free workplace (grants). 4 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.- 4

-

Community and State Comments Civic officials are welcome to submit comments on the proposals at any time. As noted earlier, we will provide a summ ary of the proposals to the civic parties and ask them to submit the ir final comments shortly

after May 3 , the due date for carrier proposals. This order is issued under authority delegated in 49 CFR 1.56a(f) and re

- delegated to the Director, Office of Av iation Analy sis. AC CORDINGLY, 1. We request that carriers interested in providing essential air service at Chisholm/Hibbing and Thief River Falls, Minnesota , submit their proposals, with or without subsidy requests, no later than May 3, 2011 . The proposals should be emailed to: EAS@dot.gov with the title “Proposal to Provide Essential Air Service at Chisholm/Hibbing and /or Thief River Falls, Minnesota. ”; 5 2. This docket will remain open until further order of the Department; and 3. The Department will serve a cop y of this order on the mayor s and airport manager s of Chisholm, Hibbing, and Thief River Falls; Mesaba Aviation Inc. , and the parties listed in Appendix D. Persons entitled to petition the Department for review of this order under the Department’s Aviation Economic Regulations, 14 CFR 385.50, must file such petitions within ten (10) day s after the date of service of this order. This order will be effective i mmediately , and the filing of a petition for review shall not preclude its effectiveness. By :

TODD M. HOMAN Director Office of Aviation Anal ysis (SEAL) An electronic version of this document is available on line at www.regulations.gov

5 Questions regarding filings in response to this order should be directed to M ichael Martin at 202

- 366

- 6494, or via email at michael.f.martin@dot.gov

.

### Appendix A 

## Area Map

### Appendix B Page 1 of 2

Historical Origin - Destination Plane Traffic 1 

### Chisholm/Hibbing, Minnesota

Quarter Year Deplanements Enplanements Total Traffic Enplanements

per Day 1 2008 1,945 2,029 3,974 26 2 2008 2,251 2,006 4,257 27 3 2008 2,389 2,501 4,890 31 4 2008 2,061 2,042 4,103 26 An nual Totals 8,646 8,578 17,224 28 1 2009 1,930 1,953 3,883 25 2 2009 2,390 2,133 4,523 29 3 2009 2,507 2,544 5,051 32 4 2009 2,143 2,133 4,276 27 An nual Totals 8,970 8,763 17,733 28 1 2010 2,587 2,752 5,339 35 2 2010 2,748 2,521 5,269 34 3 2010 3,053 3,194 6,247 40 4 2010 2,608 2,622 5,230 33 An nual Totals 10,996 11,089 22,085 35

1 Source: USDOT Bureau of Transportation Statistics, TransStats Intermodal Database, Schedule T

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.

### APPENDIX B Page 2 of 2
Historical Origin - Destination Plane Traffic 1 

### Thief River Falls, Minnesota

Quarter Year Deplanements Enplanements Total Traffic Enplanements

per Day 1 2008 917 980 1,897 12 2 2008 880 833 1,713 11 3 2008 688 669 1,357 9 4 2008 619 606 1,225 8 An nual Totals 3,104 3,088 6,192 10 1 2009 654 625 1,279 8 2 2009 669 675 1,344 9 3 2009 737 742 1,479 9 4 2009 654 677 1,331 8 An nual Totals 2,714 2,719 5,433 9 1 2010 713 661 1,374 9 2 2010 555 566 1,121 7 3 2010 611 589 1,200 8 4 2010 639 662 1,301 8 An nual Totals 2,518 2,478 4,996 8

1 Source: USDOT Bureau of Transpo rtation Statistics, TransStats Intermodal Database, Schedule T

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.

### Appendix C

Example of General Terms and Conditions for Essential A ir Service 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 understand s 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 flight s 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 Analy sis 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 safel y operated; flights that overfl y points for lack of traffic will not be compensated. In determining whether subsidy pay ment 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 sy stem provided to the community

. If the Department unilaterally , either partially or completely , terminates or reduces pay ments 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 pay ments 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 pay ment. 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 thi s solicitation beyond [DATE] . The Department’s obligation for performance under this soli citation beyond [DATE] , is contingent upon the availability

of appropriated funds from which pay ment for services can be made. No legal liability

on the part of the Government for any pay ment may arise for performance under this order beyond [DATE] , until funds are made available to the Department for performance. If funds are not made available for performance beyond [DATE] , the carrier will receive notice in writin g b y the Department. All claims for pay

ment must be submitted within 60 day s of the last day of service provided under this order.

### Appendix D Scheduled Air Carriers, Contiguous US and Puerto Rico Air Greco/Wings Air Air Sunshine, Inc. Air Sunshine, Mirmohammad Adili Air Wisconsin, Annette Daly Air Wisconsin, Jim Rankin Airline Associates, Bill Mishk Alaska Airlines, Jeff Cole Alaska Airlines, Sandy Sinick Allegiant Air, Brian Davis American Airlines, Carl Nelson American Eagle, Jeffrey Hartz Bemidji Aviation, Cori Rude Bemidji Aviation, Arlen Rinkenberger Cape Air, Andrew

Bonney Cape Air, Dan Wolf Cape Air, J.Flaherty Colgan Air, Kevin Scott Colgan Air, Mike Colgan Comm utAir, Andy Price CommutAir, Joel Raymond Consultant, Robert Silverberg Continental, Bruce Keiner Continental, Dan Weiss Continental, Lorry Halloway Delta, Anthony Canitano Delta, Dan Shuman Delta, Jeff Morgan Delta, Joe Esposito Delta, Karen Zachary Delta, Kristal Murphy Delta, Sascha Vanderbellen DHS, Bill Ragan DHS, David Bernier Era Aviation, Mike Lenorman Executive Airlines, Kate Soled Frontier Flying, Bob Hajducovich GemAir/Salmon Air, Dan Schroeder GemAir/Salmon Air, JoAnn Wolters Great Lakes, Chuck Howell Great Lakes, Doug Voss Great Lakes, Greg Stephens Gulfstream, Dave Hackett Gulfstream, Mickey Bowman Gulfstream, T. Cooper Horizon Air, Dan Russo Horizon Air, Jennifer Thompson Horizon Air, Mike McQueen Horizon, Jeff Cole ICEPR, Luis Irizarry Intrepid Interntl Air, Rick Eyk Island Air Charters, Linda House Jet Air, Daniel Wolford Kenmore Air, Tim Brooks Mesa Air, Michael Lotz Mesaba, John Spanjers Mesaba, Max Shemesh Midwest Airlines, Greg Aretakis MN Aviation, Jose Maldonado Multi Aero, Darnea Multi Aero, Shane Storz Northwest Airlines, Aaron Murray Northwest, Tim McDonald NYDC, Henok Araya OST, Brian Swanson OST, Dennis DeVany OST, Kevin Adams OST, Kevin Schlemmer OST, Michael Martin OST, Renee Williams Pacific Wings, Greg Kahlstorf PenAir, Danny Seybert PenAir, Scott Bloomquist Pinnacle Airlines, Joe Williams Pinnacle Airlines, Phil Reed Planemasters, Inc., John Kessler Planemasters, Inc., Paul Berliner Planemasters, Inc., Todd DeSimone Public Charters, Jim Gallagher Scenic, Mary Schneider Scenic, Mitzi Daines SeaPort/Wings of Alaska, Jim Day SeaPort/Wings of Alaska, Nate Vallier Seaport/Wings of Alaska, Rob McKinney Shuttle America, Jerry Balsano SkyWest, Eric Christensen SkyWest, Michael Thompson SkyWest, Steve Hart Sovereign Air, Bob Karns Sovereign Air, Lois R. Barton Tradewind, Eric Zipkin Trans States, Fred Oxley Trans States, Gerry Wigmore United, Alicia Gabriel United, James Starnes US Airways, Benjamin Slocum US Airways, Howard Kass US Airways, Jason Reisinger Warbelows Air Ventures, Art Warbelow