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 O rder, the Department of T ransportation extends the current subsidy rate for Great Lakes Aviation, Ltd. ( “ Great Lakes ” )

, e stablished by Order 2010

- 9

- 13

, is sued on

x September 14, 2010 , for the provision of E ssential Air S ervice (“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 a n annual subsidy of $ 1,752,067 . Sub sidized 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 d ata for fiscal year 2012 will not be available for several more months, but, based on partial year data

, i t 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, w e 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 eligib ility 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 O rder 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

E ssential Air S ervice at Ely, Nevada , established by Order 2010

- 9

- 13, issued on September 14, 2010 , for the period October 1, 20 1 2, until furt her 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 o f 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 O rder;

3. This docket will remain open until further o rder of the Department; and

4. We will serve copies of this O rder on t he 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.govAPPENDIX A

Great Lakes Aviation, Ltd. Provision of Essential Air Service at Ely, Nevada Summary of Service To Be Provided

Effective Period : October 1, 20 1 2, 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 carr ier’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 en sure full compensation. Annual compensation: $1,752,067 This rate assumes an annual completion factor of 9 8.5 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 : $ 2,853.53 1 Weekly Compensation Ceiling: 34,242.36 2

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

6 14.

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 s tipulations 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 r eplacement 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 flig ht 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 par tially 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 leve ls, 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 statu tes, 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 fun ds 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 l ast day of service provided under this Order.APPENDIX C

SERVICE LIST

Great Lakes, Chuck Howell Great Lakes, Michael Matthews Ely Airport, Patrice Lytle