Order 2013-9-4

Served: September 5, 2013

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 5th day of September, 2013

Essential Air Service at

GLASGOW, MONTANA

GLENDIVE, MONTANA

HAVRE, MONTANA

SIDNEY, MONTANA

WOLF POINT, MONTANA

Docket DOT-OST-1997-2605

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

ORDER SELECTING CARRIER

AND ESTABLISHING SUBSIDY RATES

Summary

By this Order, the Department is selecting Hyannis Air Service, Inc., D/B/A Cape Air 

(“Cape Air”), to provide Essential Air Service (“EAS”) with 9-passenger Cessna 402 

aircraft at Glasgow, Glendive, Havre, Sidney, and Wolf Point, Montana, for a two-year 

period beginning December 1, 2013, through November 30, 2015, at a combined annual 

subsidy of $11,950,426.

1

 The subsidy and level of service for each community under this

contract is as follows:

Community Subsidy Round trips Per Day

Glasgow $2,046,800 2

Glendive $1,944,467 2

Havre $2,036,254 2

Sidney $3,777,579 5

Wolf Point $2,145,326 2

 1

 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds.
- 2 -

Background 

By Order 2011-1-27, served on February 3, 2011, the Department selected Silver Airways, 

Inc. (formally Gulfstream International Airlines) (“Silver”) to provide subsidized EAS with 

19-passenger Beech 1900-D aircraft at the above five communities, plus Lewistown and 

Miles City, for the two-year period ended May 31, 2013, at a combined annual subsidy rate 

of $10,903,854. 

The complete public file for EAS at each of the above Montana communities may be 

accessed online through the Federal Dockets Management System (“FDMS”) at: 

http://www.regulations.gov by entering “DOT-OST-1997-2605” in the “SEARCH for: 

Rules, Comments, Adjudications or Supporting Documents:” field. 

Legislative Changes That Affected Lewistown and Miles City

The Federal Aviation Administration (“FAA”) Modernization and Reform Act of 2012 

(Public Law 112-95), signed into law on February 14, 2012, amended the definition of 

“eligible place” for the purpose of receiving EAS.2 The amendment, among other things, 

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

less than $1,000 during the most recent fiscal year, as determined by the Secretary of 

Transportation.3

Order to Show Cause

By Order 2013-3-13, issued on March 28, 2013, the Department tentatively determined to 

terminate the eligibility of Lewistown and Miles City, Montana, under the EAS program. 

Our tentative decision was based on the statutory requirement that the average subsidy per 

passenger must be less than $1,000 during the most recent fiscal year. 

For the most recent fiscal year (FY 2012), Silver transported 660 total passengers at 

Lewistown and 694 total passengers at Miles City at annual subsidy rates of $1,325,733 

and $1,621,821, respectively. Thus, the corresponding average per passenger subsidy for 

FY 2012 is $2,009 at Lewistown, and $2,337 at Miles City. Therefore, by Order 

2013-3-13, the Department directed all interested parties to show cause by April 17, 2013, 

as to why the Department should not make final its tentative findings and conclusions. 

Final Order, Allowing Suspension of Service, and Request for Proposals

Lewistown and Miles City objected to the Show Cause Order, raising a number of issues. 

However, they did not dispute our factual finding that both were over the cap. Therefore, 

by Order 2013-6-13, issued on June 12, 2013, the Department: (1) terminated the eligibility 

of Lewistown and Miles City, Montana, effective July 16, 2013, under the EAS program; 

(2) allowed Silver to suspend service at Lewistown and Miles City after July 15, 2013, if it 

chose to do so; and (3) solicited proposals from air carriers interested in providing EAS at 

Glasgow, Glendive, Havre, Sidney, and/or Wolf Point, Montana, for a new contract, with 

or without subsidy. Those proposals were due by July 15, 2013. 

Notice of Silver to Terminate EAS at Montana

On June 28, 2013, Silver filed a 90-day notice of its intent to terminate its subsidized 

service at Lewistown, Miles City, Glasgow, Glendive, Havre, Sidney, and Wolf Point 

 2

 See 49 U.S.C. § 41731.

3

 Communities in Alaska and Hawaii are exempt under 49 U.S.C. § 41731(c). 
- 3 -

effective September 26, 2013. However, since we would not have completed the carrierselection process and have a new carrier in place by the end of the 90-notice period, 

consistent with 49 U.S.C. 41734(c), and to ensure there is no service hiatus, by Order 

2013-7-16, issued on July 19, 2013, we extended Silver’s service obligation at Glasgow, 

Glendive, Havre, Sidney, and Wolf Point for 30 days beyond the end of the 90-day notice 

period, i.e., October 26, 2013, or until replacement service actually begins, whichever 

occurs first. 

Proposals

As noted above, by Order 2013-6-13, the Department requested proposals from air carriers 

interested in providing EAS at Glasgow, Glendive, Havre, Sidney, and Wolf Point. In 

response to that Order, the Department received proposals from three air carriers. All of

the proposals have been posted in Docket DOT-OST-1997-2605, and we summarize them 

below.

Boutique Air, Inc. 

Boutique Air, Inc., (“Boutique”), submitted a proposal consisting of three stand-alone 

options, all using nine-seat Pilatus PC-12 aircraft.

Option A consists of 12 weekly nonstop round trips from Havre to Billings Logan 

International Airport (“Billings”), at an annual subsidy request of $2,185,695. 

Boutique Air’s Option A

EAS Community Subsidy Weekly Round Trips

Havre $2,185,695 12

Option B consists of 12 weekly nonstop round trips from Glasgow and Wolf Point to

Billings, at a combined annual subsidy request of $2,941,760. 

Boutique Air’s Option B

EAS Community Subsidy Weekly Round Trips

Glasgow $1,470,880 12

Wolf Point $1,470,880 12

Option C consists of 30 weekly round trips from Sidney to Billings, with 12 of those flights

being routed through Glendive, at a combined annual subsidy request of $5,069,962. 

Boutique Air’s Option C

EAS Community Subsidy Weekly Round Trips

Sidney $4,221,519 30

Glendive $848,443 12

Boutique Air offered to reduce the annual subsidy requested by $325,000 if we selected 

two of its three proposed options as a result of synergies created at the Billings hub. If we

were to select all three of its proposed options, Boutique would reduce the annual subsidy 

requested by $675,000.

 
- 4 -

Cape Air

Cape Air, which has interline ticketing and baggage agreements with all of the legacy air 

carriers and Frontier, proposed two options. Both options are contingent upon being 

selected to provide EAS at no fewer than three of the Montana communities in order for the 

air carrier to assume the EAS routes. Cape Air proposed to provide nonstop service 

between each of the five communities and Billings utilizing Cessna 402 aircraft configured 

with nine passenger seats.

Cape Air’s Option A consists of three daily nonstop round trips from Havre, Glasgow, 

Wolf Point, and Glendive to Billings, and five daily nonstop round trips from Sidney to 

Billings, with an annual combined subsidy requirement of $14,112,169.

Cape Air’s Option A

EAS Community Subsidy Weekly Round Trips

Glasgow $2,590,286 20

Glendive $2,440,124 20

Havre $2,573,713 20

Sidney $3,777,579 34

Wolf Point $2,730,467 20

Cape Air’s Option B consisted of two daily nonstop round trips from Havre, Glasgow, 

Wolf Point, and Glendive to Billings, and four daily nonstop round trips from Sidney to 

Billings, with an annual combined subsidy requirement of $11,552,393. Option B is 

summarized in the table below:

Cape Air’s Option B

EAS Community Subsidy Weekly Round Trips

Glasgow $2,046,800 13

Glendive $1,944,467 13

Havre $2,036,254 13

Sidney $3,379,546 27

Wolf Point $2,145,326 13

Great Lakes Aviation Ltd.

Great Lakes Aviation Ltd. (“Great Lakes”), which has code-share agreements with United 

Airlines and Frontier Airlines at Denver, as well as interline ticketing and baggage 

agreements with American Airlines, Delta Air Lines, Frontier Airlines, United Airlines, 

and US Airways, submitted a proposal to serve Glendive and Sidney on a stand-alone 

basis. That proposal would offer one-stop service from Glendive and Sidney to Denver 

International Airport utilizing 19-seat Beech 1900-D aircraft,4 for a combined annual 

subsidy of $4,484,573.

 4

 Great Lakes reserved the right to use 30-seat Embraer 120 Brasilias at the air carrier’s discretion subject to 

seat utilization. 
- 5 -

EAS Community Subsidy Weekly Round trips

Glendive $1,904,876 12

Sidney $2,579,697 17

Community Comments

On July 16, 2013, the Department sent correspondence to the members of the Montana 

Essential Air Service Task Force (which includes officials from the five communities and 

the Montana Aeronautics Division) summarizing the proposals and requesting comments 

and preferences on the carrier-selection decision.

On July 26, 2013, the Department received a letter from the Chairman of the Montana 

Essential Air Service Task Force, Mr. John Rabenberg, indicating that the Montana 

communities unanimously voted in favor of Cape Air’s Option A.5 

Decision

When selecting a carrier to provide subsidized EAS, 49 U.S.C. § 41733(c)(1) directs us to 

consider five factors: (a) scheduled service reliability; (b) contractual and marketing 

arrangements with a larger air carrier to ensure service beyond the hub airport; (c) interline 

arrangements that the applicant has made with a larger air carrier at the hub; (d) community 

views, giving substantial weight to the views of the elected officials representing the users; 

and (e) whether the air carrier has included a plan in its proposal to market its service to the 

community. In addition, the Consolidated Appropriations Act, 2012, Public Law No. 

112-55, and continued by the full-year Continuing Appropriations Act, 2013, Public Law 

No. 113-6, provides that, when selecting an air 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.

After careful consideration, including the comments of the Montana Essential Air Service 

Task Force, the Department has decided to select Cape Air as the EAS carrier for all five 

communities.

In narrowing the field of options, we first examined Boutique’s proposal. Although 

Boutique acquired the requisite authority to operate as a scheduled passenger commuter air 

carrier on February 7, 2013,6 it currently does not provide scheduled service. 

Additionally, Boutique does not have any contractual, marketing, or interline arrangements 

with larger air carriers, and it received no community support. Because it does not meet 

any of the statutory, carrier-selection criteria, we will not consider its proposal further. 

The decision then boils down to Great Lakes or Cape Air, and Great Lakes submitted 

proposals for only Glendive and Sidney. At Glendive, Great Lakes offers only minimal 

subsidy savings compared to Cape Air’s two-round-trip option -- $1,904,876 compared to 

$1,944,467. We will defer to the community’s wishes given the small difference in 

subsidy -- about 2%.

 5

 By letter dated August 2, 2013, the City of Billings Aviation and Transit Department submitted support for 

Cape Air’s Option A.

6

 See Order 2013-2-8.
- 6 -

At Sidney the subsidy difference is much greater -- about 37% when compared to Cape 

Air’s Option A and 26% when compared to Cape Air’s Option B. This subsidy difference 

for one community would usually be decisional. However, in this case, we are mindful of 

the Montana Task Force’s decades-old position that having one carrier serving all of the 

EAS communities in eastern Montana is in the best long-term interests of the communities 

and the State’s transportation system. Viewed in that context, the subsidy difference can 

effectively be spread over all five communities, and the difference is not nearly as great. 

We also note several other factors. Sidney’s current service to Billings generated more 

than 22,000 passengers during the year ended March 31, 2013, the most recent year for 

which we have data. However, Great Lakes has forecast that only 14,000 passengers will 

use its service to Denver. On the other hand, Cape Air forecast nearly 16,000 passengers. 

One could conclude that the air carriers believe that Billings is the better hub for Sidney. 

(We acknowledge that both carriers’ passenger forecasts are well below current levels, but 

the reason may be that the service at Williston, North Dakota has increased dramatically 

over the last year or so.) In further support of that theory, we note that nonstop jet service 

to Denver is available at nearby Williston, about a 45-minute drive from Sidney. As a 

result, subsidizing service to Denver for Sidney would be somewhat duplicative of the 

nonstop jet service to Denver at Williston. 

Based on all the above, we will select Cape Air to serve Glasgow, Glendive, Havre, 

Sidney, and Wolf Point.

In choosing between Cape Air’s Option A (three round trips and five round trips a day) 

and Option B (two round trips and four round trips a day), we examined current and 

historical passenger levels. During the year ended March 31, 2013, the most recent period 

for which we have data, Glasgow averaged 6 enplanements a day, Glendive 2, Havre 4, 

Sidney 36, and Wolf Point 10. Therefore, with the exception of Sidney, Cape Air’s 

Option B providing two round trips a day in nine-seat aircraft provides more than an 

adequate supply of seats to meet the communities’ demand, and we will select that option.

7

 

At Sidney, Cape Air has proposed two different options using 9-seat aircraft-- one for four 

round trips a day and one for five. Total passenger traffic at Sidney has grown 

considerably over the last few years. Sidney experienced a 58% increase in total passenger 

traffic from 2010 to 2011, and a 113% increase from 2011 to 2012. Given this impressive 

trend, we will select Cape Air’s five-round-trip option to accommodate the upward

demand.

The core objective of the EAS program is to connect smaller communities to the national 

air transportation system, and these service levels fully meet that objective. Cape Air is a 

well-established air carrier that provides EAS at many communities and maintains interline 

 7 As noted above in the Legislative Changes Section, Public Law No: 112-95 amended 49 U.S.C. 

§ 41731(a)(1)(B) to change the definition of “eligible place” for the purpose of receiving EAS. The 

amendment, among other things, states that to be eligible, a community must maintain an average of 10 

enplanements or more per service day, as determined by the Secretary, during the most recent fiscal year 

beginning after September 30, 2012. The legislation has an exception for locations in Alaska and Hawaii and 

communities that are more than 175 driving miles from the nearest large or medium hub airport. Glasgow, 

Glendive, Havre, Sidney, and Wolf Point are all greater than 175 driving miles from the nearest large or 

medium hub airport, and therefore fall under this exception as codified in 49 U.S.C. § 41731(d).
- 7 -

baggage and ticketing agreements with most of the major air carriers. Additionally, we 

find both the service and subsidy levels of this option to be reasonable. 

We shall make this selection of Cape Air at the above five Montana communities 

contingent upon the Department’s receiving properly executed certifications from the air 

carrier that it is in compliance with the Department’s regulations regarding drug-free 

workplaces and nondiscrimination, as well as the regulations concerning lobbying 

activities.

8

Service Transition

We expect Silver and Cape Air to work together to make a smooth transition at Glasgow, 

Glendive, Havre, Sidney, and Wolf Point. In that regard, before Silver suspends its service,

it must notify any passengers holding reservations for travel after the suspension date, 

assist those passengers in making alternate air transportation arrangements, or provide a 

refund of the ticket price, without penalty, if requested.

Future EAS Eligibility at Glasgow, Glendive, Havre, Sidney, and Wolf Point

As stated above, the FAA Modernization and Reform Act of 2012 (Public Law 112-95), 

amended the definition of “eligible place” for the purpose of receiving EAS.9 The 

amendment, among other things, states that to be eligible, a community must have had an 

average subsidy per passenger of less than $1,000 during the most recent fiscal year, as 

determined by the Secretary of Transportation. We will monitor the subsidy per passenger 

rate at each of the five Montana communities during the upcoming contract. The 

Department highly encourages all parties involved to work together to maintain or increase

enplanements in order to remain in compliance with the statute. 

Carrier Fitness

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

provide reliable service before we may subsidize it to provide EAS. Cape Air is subject to 

the Department’s continuing fitness requirements, and no information has come to our 

attention that would cause us to question the air carrier's fitness at this time. We have 

contacted the FAA, and it has raised no concerns that would negatively affect our fitness 

finding. We therefore conclude that Cape Air remains fit to conduct the operations 

proposed here.

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

ACCORDINGLY,

1. The Department selects Hyannis Air Service, Inc., D/B/A Cape Air, at Glasgow, 

Glendive, Havre, Sidney, and Wolf Point, Montana, and establishes the subsidy rate as 

detailed in Appendix B;

2. We direct Hyannis Air Service, Inc., D/B/A Cape Air, 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 

 8 The certifications are available on the Web at http://ostpxweb.dot.gov/aviation/index.html.

9

 See 49 U.S.C. § 41731. 
- 8 -

examination by representatives of the Department. Such documentation shall be retained 

for seven years from the service date 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. We find that Hyannis Air Service, Inc., D/B/A Cape Air, continues to be fit, willing and 

able to operate as a commuter air carrier, and capable of providing reliable Essential Air 

Service at Glasgow, Glendive, Havre, Sidney, and Wolf Point, Montana;

4. Docket DOT-OST-1997-2605 will remain open pending further Department action; and

5. We will serve copies of this Order on Great Lakes Aviation, Ltd., Boutique Air, Inc., the 

mayors of Glasgow, Glendive, Havre, Sidney, and Wolf Point, Montana, the airport 

managers at Wokal Field/Glasgow International Airport, Dawson Community Airport, 

Havre City-County Airport, Sidney-Richland Municipal Airport, Wolf Point International 

Airport; and the members of the Montana Essential Air Service Task Force.

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

Hyannis Air Service, Inc., D/B/A Cape Air

Annual Compensation Requirements for Essential Air Service at

Glasgow, Glendive, Havre, Sidney, and Wolf Point, Montana 

Two Daily Round Trips per weekday (Five Daily for Sidney) 

95.0% Completion Factor

Havre Glasgow Wolf Point Sidney Glendive

Daily Round Trips 2 2 2 5 2

Departures (net of completion) 1,416 1,416 1,416 3,541 1,416

Pax/Dpt 2.7 2.7 2.7 4.5 2.7

Load Factor 30% 30% 30% 50% 30%

fare (net) $ 42 $ 42 $ 42 $ 42 $ 42

Pax Rev $ 160,597 $ 160,597 $ 160,597 $ 669,155 $ 160,597

Fuel $ 522,247 $ 528,952 $ 575,884 $ 1,424,808 $ 475,316

Maintenance $ 384,895 $ 388,593 $ 414,482 $ 1,022,725 $ 359,005

Pilots $ 264,675 $ 264,675 $ 264,675 $ 301,651 $ 264,675

Ownership $ 129,425 $ 131,174 $ 143,417 $ 355,026 $ 117,182

Stations $ 416,449 $ 414,315 $ 422,851 $ 596,336 $ 414,315

Landing Fees $ 6,384 $ 6,384 $ 6,384 $ 15,614 $ 6,384

Marketing $ 45,333 $ 45,333 $ 45,333 $ 61,594 $ 45,333

General & Admin/Other $ 317,600 $ 317,600 $ 317,600 $ 446,643 $ 317,600

Operating Expense $ 2,087,009 $ 2,097,027 $ 2,190,627 $ 4,224,397 $ 1,999,811

Return of 5% $ 109,843 $ 110,370 $ 115,296 $ 222,337 $ 105,253

Economic Expense $ 2,196,851 $ 2,207,397 $ 2,305,923 $ 4,446,734 $ 2,105,064

Passenger Revenue $ 160,597 $ 160,597 $ 160,597 $ 669,155 $ 160,597

Profit $(2,036,254) $(2,046,800) $(2,145,326) $(3,777,579) $(1,944,467)

Subsidy Required $ 2,036,254 $ 2,046,800 $ 2,145,326 $ 3,777,579 $ 1,944,467

per Departure $ 1,438 $ 1,445 $ 1,515 $ 1,067 $ 1,373

Per Passenger $ 533 $ 535 $ 561 $ 237 $ 509
 Appendix B

 Page 1 of 2

Hyannis Air Service, Inc., D/B/A Cape Air Essential Air Service

to be Provided at Havre, Glasgow and Wolf Point, Montana

Effective Period: December 1, 2013, through November 30, 2015

Schedule Service: Havre: 14 nonstop round trips per week to Billings

Glasgow: 14 nonstop round trips per week to Billings

Wolf Point: 14 nonstop round trips per week to Billings

Intermediate Stop and 

Upline Service:

No service to any intermediate or upline points are contemplated 

under the terms of the air carrier's proposal; accordingly, no such 

service may be provided on subsidized flights without prior 

Department approval.

Aircraft Type: Cessna 402 (9 passenger seats)

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

compensation.

Annual Compensation: Havre: $2,036,254

Glasgow: $2,046,800

Wolf Point: $2,145,326 

This rate assumes an annual completion factor of 95 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: Havre: $1,4381

Glasgow: $1,4452

Wolf Point: $1,5153

Weekly Compensation 

Ceiling:

Havre: $34,5124

Glasgow: $34,6805

Wolf Point: $36,3606

 1

 $2,036,254 divided by 1,416 annual departures: (28 flights per week x .97) = 1,438. 2

 $2,046,800 divided by 1,416 annual departures = 1,445. 3

 $2,145,326 divided by 1,416 annual departures = 1,515. 4

 28 flights per week multiplied by $1,438 per flight. 5

 28 flights per week multiplied by $1,445 per flight. 6

 28 flights per week multiplied by $1,515 per flight.
Appendix B

Page 2 of 2

Hyannis Air Service, Inc., D/B/A Cape Air Essential Air Service 

to be Provided at Sidney and Glendive, Montana

Effective Period: December 1, 2013, through November 30, 2015

Schedule Service: Sidney: Thirty-four nonstop round trips each week to Billings

Glendive: Thirteen nonstop round trips per week to Billings

Intermediate Stop and 

Upline Service:

No service to any intermediate or upline points are contemplated 

under the terms of the air carrier's proposal; accordingly, no such 

service may be provided on subsidized flights without prior 

Department approval.

Aircraft Type: Cessna 402 (9 passenger seats)

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

compensation.

Annual Compensation: Sidney: $3,777,579

Glendive: $1,944,467

This rate assumes an annual completion factor of 95 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: Sidney: $1,0677

Glendive: $1,3738

Weekly Compensation 

Ceiling:

Sidney: $74,6209

Glendive: $32,95210

 7

 $3,777,579 divided by 3,541 annual departures (70 flights per week x .97 completion ) = 1,067

8

 $1,944,467 divided by 1,416 annual departures (28 flights per week x .97 completion) = 1,373

9

 70 flights per week multiplied by $1,067 per flight. 10 28 flights per week multiplied by $1,373 per flight.
Appendix C

Note:

The air 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 air 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 air 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 air 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 air carrier to provide service on these routes. The air 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 air 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 air 

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 September 30, 2013. The

Government's obligation for performance under this Order beyond September 30, 2013, 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 September 30, 2013, until funds are made available to the Department for

performance. If sufficient funds are not made available for performance beyond 

September 30, 2013, the Department will provide notice in writing to the air 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 for 

provided in July must be filed by October 31; August claims must be submitted by 

November 30, and so on.