Order 2012-11-18

Served: November 16, 2012

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 16th day of November, 2012

 Docket DOT-OST-1995-361

ORDER EXTENDING CURRENT SUBSIDY RATE

Summary

By this Order, the Department of Transportation extends the current subsidy rate for 

Great Lakes Aviation, Ltd. (“Great Lakes”), established by Order 2010-9-13, issued on 

xSeptember 14, 2010, for the provision of Essential Air Service (“EAS”) at Ely, Nevada, 

for the period October 1, 2012, until further Departmental action while we examine Ely’s 

long-term eligibility in the EAS program.

Background 

By Order 2010-9-13, the Department re-selected Great Lakes to provide subsidized EAS 

at Ely utilizing 19-seat Beech 1900D turboprop aircraft, for the two-year period through 

September 30, 2012, at an annual subsidy of $1,752,067. Subsidized service was to 

consist of either 6 nonstop round trips a week to Las Vegas or 6 one-stop round trips a 

week to Denver.

Recent Legislative Changes That May Affect Future EAS Eligibility 

Public Law 112-27, signed into law on August 5, 2011, amended the definition of 

“eligible place” for the purpose of receiving EAS. Among other things, the amendment 

states that to be eligible, a community must have an average subsidy per passenger of less 

than $1,000 during the most recent fiscal year. Passenger data for fiscal year 2012 will 

not be available for several more months, but, based on partial year data, it appears likely 

that Ely will be over the $1,000 cap. In the meantime, Great Lakes’ current subsidy rate

expired on September 30, 2012. In order to prevent a hiatus in air service at the 

community, we have contacted the air carrier; and it has agreed to our extending the 

current subsidy rate for the period from October 1, 2012, until further Departmental 

action while we examine Ely’s long-term eligibility in the EAS program.

Essential Air Service at

ELY, NEVADA

under 49 U.S.C. 41731 et seq.
-2-

We note that Great Lakes remains subject to the 90-day notice provisions in 49 U.S.C. 

§ 41734 while we determine Ely’s long-term eligibility in the EAS program.

This Order is issued under authority delegated in 49 Part CFR 1.56(a)(f).

ACCORDINGLY,

1. We extend the current subsidy rate for Great Lakes Aviation, Ltd., for the provision of 

Essential Air Service at Ely, Nevada, established by Order 2010-9-13, issued on 

September 14, 2010, for the period October 1, 2012, until further Departmental action;

2. We direct Great Lakes Aviation, Ltd., 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 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 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. This docket will remain open until further order of the Department; and

4. We will serve copies of this Order on the parties listed in Appendix C.

By:

SUSAN L. KURLAND

Assistant Secretary

for Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
APPENDIX A

Great Lakes Aviation, Ltd.

Provision of Essential Air Service at Ely, Nevada

Summary of Service To Be Provided

Effective Period: October 1, 2012, Until Further Departmental Action

Scheduled Service: Six weekly nonstop round trips each week to Las Vegas or 

one-stop round trips each week to Denver.

Intermediate stops and upline 

service: 

No upline restrictions.

No service to any intermediate point is contemplated under 

the terms of the carrier’s proposal; accordingly, no such 

service may be provided on subsidized flights without prior 

Department approval.

Aircraft type: Beechcraft B-1900D (19 passenger seats).

Timing of flights: Flights must be well-timed and well-spaced in order to ensure 

full compensation.

Annual compensation: $1,752,067

This rate assumes an annual completion factor of 98.5

percent. A compensation ceiling is to be applied per calendar 

week such that service above that ceiling in one week cannot 

make up for service shortfalls in another week.

Subsidy Rate per Flight: $2,853.531

Weekly Compensation 

Ceiling:

34,242.362

 1 $1,752,067 divided by 614 annual departures: 2 flights x 6 days x 52 weeks x .985 (completion factor) = 

614.

2 12 flights per week multiplied by $2,853.53 per flight.
APPENDIX B

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 are not currently available for performance under this Order beyond March 31, 2013. The 

Government’s obligation for performance under this Order beyond March 31, 2013, is subject to 

the availability of appropriated 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 March 31, 2013, until funds are made available to the Department for 

performance. If funds are not made available for performance beyond March 31, 2013, the 

Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of service 

provided under this Order.
APPENDIX C

SERVICE LIST

Great Lakes, Chuck Howell

Great Lakes, Michael Matthews

Ely Airport, Patrice Lytle