### Order 2013

- 7

- 9

Served : July 11, 2013



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 1 1th day of July, 2013

Essential Air Service at

CENTRAL, ALASKA

CIRCLE, ALASKA

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 1998

- 3621



## ORDER REQUESTING PROPOSALS

Summary

By this O rder, the Departme nt is requesting proposals from airlines interested in providing

Essential Air S ervice (EAS) at Central and Circle

, Alaska, with or without subsidy , for a new

rate term beginning December 1, 2013 . Pr oposals are due August 13, 2013 . (See Appendix A

for a map.)

Background

By Order 20 11

- 9

- 11

, issued on September 15, 2011, the Department re

- selected Warbelow’ s

Air Ventures, Inc. (Warbelow’s), to provide EA S at Central and Circle for a combined annual

subsidy of $275,598 ($137,799 for each community) from December 1, 2011, through

November 30, 2013. Warbelow’s provides five weekly round trips over a Fairbanks

- Central

Circle

- Fairbanks routing with 9

- seat Cessna 208B aircraft.

Request for Proposals

Air carriers should file their prop osals no later than August 13 , 2013

. After that date, our staff

will docket proposals, thereby 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

give full consideration to all proposals filed in a timely manner.

Interested carriers should prepare their proposals with ev ery 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 unreal istic proposals and solicit a new round of proposals.

### - 2

-

Air 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

www.regulations.gov , each page should be formatted to be viewed online.

We are here providing interested carriers with some basic information to serve as guidance

when they prepare their proposals, but we will not prescribe a precise format. We expect

proposals to adequately 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

strongly encourage clear, well

- documented proposals that will facilitate their evaluation by the

affected community and the Departmen t. 1



### Air c arriers are also welcome to propose more than one option, if they choose; they need not

limit themselves to those requirements if they envision 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 y and meets the operati onal needs of the airline s

.

With specific respect to Central and Circle, air carriers should provide sufficient capacity to

accommodate historical levels of traffic. Further, flights meeting EAS guidelines at Alaskan

communities should provide sufficient capacity to accommodate passenger, freight, and mail

demand on the critical outbound segment. In that regards, as is typically the case in Alaska,

significantly more freight and mail flow from the hub to the EAS community than from the

EAS community to t he hub. We therefore expect proposals consisting of five round trips a

week with eight

- seat aircraft, or more frequencies with smaller aircraft. In order to help air

carriers make traffic and revenue projections, we have included historical traffic in

Ap pendix B. As always, we will formally solicit the communities’ views , as well as the views

of the Alaska Department of Transportation, on any service options we receive before making a

carrier selection decision.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying

activities, drug

- free workplaces and nondiscrimination. 2 

### Consequently, all carriers receiv ing

1 In selecting a carrier to provide subsidized 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) co mmunity views; (5) the experience of the applicant in

providing, in Alaska, scheduled air service or significant patterns of non

- scheduled air service; and (6 ) whether the

carrier has included a plan in its proposal to market the service

. In addition

, the Conso lidated Appropriations Act,

2012, Public Law 112

- 55

, and continued by the Full

- Year Continuing Appropriations Act, 2013, Public Law No.

113

- 6, provides that when selecting a carrier to provide EAS, the Department may consider the relative subsidy

re quirements, thus codifying a factor that we have considered since the inception of the program. Interested

carriers should also be aware that our general provisions governing Essential Air Service will be included in the

selection Order as part of our auth orization of subsidy for the selected service. Appendix C of this Order contains

those general provisions.

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

– New restrictions on lobbying; (2) 49 CFR

Part 21

– Nondiscrimination in feder ally

- 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 of disability in programs

and activities receiving or benefiting from Federal financial a ssistance; and 14 CFR Part 382

– Nondiscrimination

### - 3

-

Federal subsidy to support Essential Air S ervice must certify that they are in compl iance 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. Interested carriers

requiring more detailed information regarding these requirements, as well as copies of the

certifications, should contact the Office of Aviation Analysis at (202) 366

- 5903. The

Department is prohibited from paying subsidy to carriers that do not submit these documents. 3



### Community and State Comments

Civic officials are welcome to submit comments on the proposals at any time. As noted earlier,

we will provide a summary of the proposals to the civic parties and ask them to submit their

final comments shortly after August 13 , 2013

, the due date for carrier proposals.

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

- delegated to the

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We request that air carriers interested in providing Essential Air Service at Central and /or

Circle

, Alaska

, submit their proposal s , with or without subsidy requests, no later than

August 13, 2013 . The proposal should be emailed to: EAS@dot.gov with the title “Proposal to

Provide Essential Air Service at Central and /or Circle, Alaska ”; 4



### 2. This docket will remain open until further order of the Department; and

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

– Government

- wide debarment and suspension (non

procurement) and government

- wide requirements for drug

- free workplace (grants).

3 The certi fications are available online under “Reports and Publications” at http://www.dot.gov/policy/aviation

policy/small

- community

- rural

- air

- service /essential

- air

- service

4 Questions regarding filings in response to this order should be directed to Michael Martin at 202

- 366

- 6494, or

via email at michael.f.martin@dot.gov

.

### - 4

-

3. The Department will serve a copy of this O rder on the community leaders of Cen tral and

Circle, the Alaska Department of Transportation, and the service list for this Docket

.

Persons entitled to petition the Department for review of this O rder under the Department’s

Aviation Economic Regulations, 14 CFR Part 385.31(a) , must fil e suc h petitions within seven

(7) days aft er the date of service of this O rder.

This O rder will be effective immediately, and the filing of a petition for review shall not

preclude its effectiveness.

By:

TODD M. HOMAN

Director

Office of Aviation Analysis

(SEAL)

An electronic version of this document is available on line at

www.regulations.gov

## Appendix A



# Area Map

## Appendix B

Page 1 of 2

Historical Traffic

- Central, Alaska

Origination Destination Origin and Destination

Year Quarter Pax Freight

PEQ Mail PEQ Total Pax Freight

PEQ Mail PEQ Total Pax Freight

PEQ Mail

PEQ Total

2011 1 11 0 4 15 10 7 25 43 21 7 30 58

2011 2 6 0 5 11 5 1 33 39 11 1 39 50

2011 3 5 0 6 11 5 2 29 36 10 2 35 47

2011 4 3 0 5 8 4 5 34 42 7 5 39 51

Total 25 0 21 47 24 15 121 160 49 15 142 206

2012 1 1 0 4 5 2 3 31 36 3 3 35 41

2012 2 5 0 4 9 6 2 29 38 11 2 33 47

2012 3 4 0 6 10 3 2 23 28 7 2 30 38

2012 4 4 0 5 9 3 7 34 44 7 7 39 54

Total 14 0 20 34 14 14 118 146 28 14 137 179

## Appendix B

Page 2 of 2

Historical Traffic

- Circle, Alaska

Origination Destination Origin and Destination

Year Quarter Pax Freight

PEQ Mail PEQ Total Pax Freight

PEQ Mail PEQ Total Pax Freight

PEQ Mail

PEQ Total

2011 1 75 1 10 86 63 7 26 96 138 9 36 182

2011 2 77 0 4 82 50 12 14 76 127 13 18 158

2011 3 54 0 8 62 48 14 51 113 102 14 58 174

2011 4 97 0 3 100 89 14 26 129 186 14 30 230

Total 303 2 25 330 250 47 117 414 553 49 142 744

2012 1 101 7 8 116 78 18 15 111 179 25 23 227

2012 2 71 1 2 74 64 8 16 88 135 9 18 162

2012 3 94 1 3 98 82 24 26 132 176 25 30 230

2012 4 110 1 3 114 91 31 24 146 201 32 27 260

Total 376 10 16 403 315 81 81 477 691 91 98 880

## Appendix C

Example of General Terms and Conditions for Essential Air 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 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, suc h 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 these rates, 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; flight s 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 ex tent 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 amounts

or at the stipulated service levels, the carrier may cease to provide service to that specific

location without regard to any require ment 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 contracts ar e 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 may not be available for performance under this solicitation beyond [DATE] . The

Department’s obligation for performance under this soli citation beyond [DATE] , is contingent

upon the availability of 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 [DATE] , until funds are made available to the Department for performance. If funds are

not made available for performance beyond [DATE] , th e carrier will receive notice in writing by

the Department.

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

under this order.