Order 2013-12-18

Served: December 30, 2013

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 30th of December, 2013

Essential Air Service at

BUTTE, MONTANA

Under 49 U.S.C. 41731 et seq. 

DOCKET DOT-OST-2011-0136

ORDER SELECTING CARRIER

By this Order, the Department is re-selecting SkyWest Airlines d/b/a Delta Connection

(SkyWest), to provide Essential Air Service (EAS) at Butte, Montana, for $735,956 annual 

subsidy.1

Background

By Order 2012-1-23, January 26, 2012, the Department selected SkyWest Airlines (SkyWest), to 

provide 14 nonstop round trips per week between Butte, Montana, and Salt Lake City, Utah, 

through December 31, 2013. SkyWest was to provide the service with 50-seat regional jet 

aircraft for an annual subsidy of $672,230. 

By Order 2013-10-1, October 1, 2013, the Department requested proposals for EAS at Butte, 

Montana, for a new term. The Order requested proposals consistent with the historical service 

pattern of 14 nonstop round trips per week to Salt Lake City with aircraft to accommodate its 

traffic levels, as well as proposals with different aircraft types to different hubs, with proposals 

due October 24, 2013. We received a proposal from only one carrier, the incumbent, SkyWest. 

Proposal of SkyWest

SkyWest proposes to continue to operate fourteen (14) nonstop round trips per week to Salt Lake 

City with CRJ-200 regional jets for $735,956 annual subsidy, a slight increase over the current 

rate of $672,230. 

 

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.
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Community Comments

On October 25, 2013, we requested community comments. On October 28, 2013, we received 

comments from the Chancellor of the University of Montana. The Chancellor indicates general 

satisfaction with SkyWest’s service but indicates that increased frequency of service would be 

appreciated. However, he recognizes that there are financial constraints on the level of service 

provided to small town airports such as Butte. 

On November 27, 2013, we received comments from the Executive Director of the Butte 

Chamber of Commerce, Mr. Mario Lucich. 

“Butte is very fortunate to have an airline such as SkyWest servicing our community. I 

have personally had the opportunity to fly out of Butte on SkyWest Airlines on 

numerous occasions. My experiences have been exceptionally good and very 

professional. The fourteen flights per week into our community are essential and 

necessary for the residents of Butte and surrounding areas. The presence of SkyWest in 

the Butte community is paramount to the economic development and growth of Butte. 

As we recruit new businesses and professionals, one of the priorities and selling points 

of our community is that we have air service that comes right into Butte and that they 

are five to ten minutes from any destination in the community. Service and convenience 

are key factors in selecting an airline and SkyWest provides both of these to Butte.”

On November 29, 2013, we received comments from the Chief Executive of the county of ButteSilver Bow, Mr. Matt Vincent. He indicates he is “very pleased with the service and the 

cooperation the community has received from SkyWest, and strongly supports the carrier’s 

proposal.” He does indicate that the community would like additional frequencies and larger 

aircraft.2

Decision

The decision is straightforward: we have only one proposal from one carrier and the community 

favors the selection of that proposal. The subsidy requested by SkyWest has increased by 

$63,726 or 9.4 percent from the current rate, while in the most recent year traffic has increased

significantly, attaining the same number of passengers Butte generated before it was subsidized. 

SkyWest is a known, proven operator. Furthermore, its code-share arrangement with Delta Air

Lines at Salt Lake City provides Butte with seamless access to the national air transportation 

system. 

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that the Department find an air carrier fit, willing, and 

able to provide reliable service before the Department may subsidize it to provide EAS. 

SkyWest is subject to the Department’s continuing fitness requirements, and no information has 

 

2 Staff contacted the Chief Executive, and indicated that SkyWest and any carrier could supplement the community’s 

EAS, but that the service by SkyWest was the maximum level that the Department could subsidize.
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come to our attention that would cause us to question the carriers’ fitness at this time. EAS staff 

has contacted the Federal Aviation Administration, and it has raised no concerns that would 

negatively affect our fitness findings. We therefore conclude that SkyWest remains fit to conduct

the operations proposed here.

This Order is issued under authority delegated in 49 CFR Part 1.25a(b).

ACCORDINGLY,

1. We select SkyWest Airlines to provide EAS at Butte, Montana, as described in Appendix C;

2. We direct SkyWest Airlines 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 service date of the 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 carrier may forfeit its 

compensation for any claim that is not supported under the terms of this Order;

3. We find that SkyWest Airlines continues to be fit, willing and able to operate as a certificated 

air carrier and capable of providing reliable EAS at Butte, Montana;

4. This docket will remain open until further Order of the Department; and

5. We will serve copies of this Order on the civic officials of Butte, Montana, and on SkyWest

Airlines.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at

http://www.regulations.gov
Appendix A

Nonstop Great Circle Miles to Butte (BTM)

BZN, Bozeman 66

MSO, Missoula 101

BIL, Billings 191

BOI, Boise 247

GEG, Spokane 265

SLC, Salt Lake 358

SEA, Seattle 477

DEN, Denver 578

SFO, San Francisco 768

MSP, Minneapolis 938
Appendix B

SkyWest, Essential Air Service to be Provided to

Butte, Montanaq, Docket 2011-0136

Passengers 49,000

Skd. Departures 1,456 1/

Completion 98.00%

Stage Length 358

Departures Performed 1,427

Block Time 77

Annual Block Hours 1,831

Seats 50

Available Seat Miles 26,062,400 2/

RPMs 17,542,000

Passengers Passenger Fare $105.00

Revenue $5,145,000

Direct Expenses $4,284,921

RPM Related $59,817

Departure Related $1,013,270

ASM Related $242,902

Indirect Expenses $1,315,989

Operating Expense $5,600,910

Profit at 5% $280,046

Economic Costs $5,880,956

Annual Subsidy $735,956

1/ 14 nonstop flights per week to SLC x 2 directions x 52 weeks = 1,456

2/ 1,456 deps. x 50 seats x 358 miles = 26,062,400
Appendix C

SkyWest Airlines, Essential Air Service to be Provided to Butte, Montana,

Docket 2011-0136

Effective Period: January 1, 2014, through December 31, 2015;

Service: Fourteen (14) nonstop round trips per week to Salt Lake City (SLC)

Aircraft Type: CRJ-200, Regional Jet, 50 seats

Annual Subsidy: $735,956

Annual Flights: 1,4271

Subsidy per Flight: $5162

Weekly Subsidy Ceiling: $14,4483

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 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; 

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 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 payment.

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 may not be available for performance under this Order beyond January 15, 2014. The Government’s obligation for 

performance under this Order beyond January 15, 2014, is subject to 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 

January 15, 2014, until funds are made available to the Department for performance. If sufficient funds are not made available for 

performance beyond January 15, 2014, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which

compensation is being claimed. For example, claims filed for service provided in July must be filed by October 31; August claims 

must be submitted by November 30, and so on.

 

1 14 flights per week x two directions x 52 weeks x .98 completion = 1,427 flights.

2 $735,956 ÷ 1,427 flights.

3 $516 per flight x 28 flights per week.