Order 2010

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- 16

Served: Novem ber 19 , 2010



### 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 Novem ber, 2010

ORDER RESELECTING CARRIER AND SETTING FINAL SUBSIDY RATES

Summary By this order, the Department is reselecting Great Lakes Aviation, Ltd. (Great Lakes)

, operating as both a Frontier Airlines and United Airlines code

- share partner , to provide subsidized essential air service (EAS) at Dickinson, North Dakota, for an annual subsidy rate of $2,019,177, for the two

- year perio d of February 1, 2011 , through January 3 1, 2013 . (See Appendix A for a map.)

Background By Order 200 8

- 10

- 24, October 21, 2008 , the Department selected Great Lakes to provide

subsidized EAS at Dickinson through January 31, 2011. Under that order, Great L akes was to provide Dickinson with three nonstop round trips to Denver each weekday and each weekend with allowable upline service (most likely to Williston, North Dakota) utilizing 30

- seat Embraer Brasilia aircraft for an annual subsidy rate of $ 2,274,177

.

In anticipation of the end of Great Lakes’ current contract on January 31, 20 11 , the Department issued Order 20 10

- 9

- 8 on September 7, 2010 , soliciting proposals from all

interested air carri ers to provide EAS at Dickinson for a new, two

- year term, either with or without subsidy

, no later than October 4, 2010.

Proposals The proposal and the community letters received by the Department are summarized below

. The public record for this carrier

- selection proceeding may be acc essed online through the

Essential Air Service at

DICKINSON, NORTH DAKOTA

Under 49 U.S.C. 41731 et seq

. Docket DOT

- OST

- 1995

- 697- 2

-

Federal Docket Management System (FDMS) at: http://www.regulations.gov by doing a document s earch on Docket ID: DOT

- OST

- 1995

- 697

.

Great Lakes Great Lakes, the incumb ent EAS provider for Dickinson

, was the only carrier to submit a proposal. O perating as a Frontier and United A irlines code

- share partner, the carrier proposed to continue to provide three nonstop round trip s to Denver each weekday and each weekend, with 30

- seat Embraer Brasilia aircraft for an annual subsidy rate of $ 2,049,027,

with the caveat that the carrier would be permitted to continue to serve an upline community

on six of the eighteen weekly round trips.

Community Comments

On October 7, 2010, the Department sent correspondence to the civic officials of Dickinson, the Airport Manager for the Dickinson Theodore Roosevelt Regional Airport, and the North Dakota Aeronautics Commission requesting comments on the carrier selection decision.

The community strongly suppo rts the reselection of Great Lakes. The Airport Manager and Airport Authority Chairman both also make mention of the recent increase in enplanements and the importance of the stand

- alone (without service to an upline community) round trips. The Airport M anager also notes that the airport is nearing 10,000 enplanements for the year, making it eligible for additional Federal Aviation Administration Airport Improvement Program funding. The City of Dickinson and Stark County Board of Commissioners highlight the importance of air service in the economic development of the city and region.

T he Department also received comments from several local businesses supporting Great

Lakes

.

Decision on Carrier Selection After careful consideration, including the comments of local official s, the Department has

decided to re select Great Lakes to provide EAS at Dickinson in accordan ce with its proposal.

The carrier will continue to provide three nonstop round trip s to Denver each weekday and each weekend, with 30

- se at Embraer Brasilia aircraft for an annual subsidy rate of $ 2,019,027, a decrease in approximately $255,000 when contrasted with the current rate. It will maintain the authority to provide service to an upline community of its choosing on 6 round trips a week.

The carrier

- selection decision is straightforward. Great Lakes was the only carrier to submit a proposal and the community fully support s the carrier. In addition, Great Lakes’ code

share relationship with Un i t ed and Frontier at Denver will provid e Dickinson passengers excellent access to the national air transportation system. Finally, Great Lakes is a well

established carrier and we find both the service and subsidy levels to be reasonable.

The Department shall make this selection contingent up on the Department’s receiving properly executed certifications from Great Lakes that it is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations governing lobbying activities.- 3

-

Carri er Fitness 49 U.S.C. 41737(b) requires that we find an air carrier fi t, willing, and able to provide reliable service before we may subsidize it to provide essential air service. Great Lakes is subject to the Department’s continuing fitness requirements, and no information ha s come to our attention that would cause us to question the car rier's fitness at this time. We have contacted the Federal Aviation Administration, and it has raised no concerns that would negatively affect our fitness finding. We the refore conclude that th e carrier remains fit to conduct the operations proposed here.

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

ACCORDINGLY, 1. The Department re select s Great Lakes Aviation, Ltd. , to provide essential air servi ce at
Dickinson

, North Dakota, and establish the subsidy rates

, as described in Appendix C , f or the period from February 1, 2011 , through January 31, 20 13 ;

2 . The Department directs Great Lakes Aviation, Ltd.

, to retain all books, records, and other

sour ce 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 yea rs 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 Great Lakes Aviation, Ltd.

, continues to be fit, willing and able to operate as

a commuter air carrier and capable of providing reliable essential air service Dickinson, North Dakota;

4 . Th is Docket will remain open until further order of the Department; and

5 . Docket Operations will serve copies of this order on the parties listed in Appendix D

.

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



### DICKINSON, NORTH DAKOTA
AND SURROUNDING COMMUNITIESAppendix B

Great Lakes Aviation, Ltd. Provision of Essential Air Service at Dickinson, North Dakota Calculation of Compensation RequirementAppendix C Page 1 of 2

Great Lakes Aviation, Ltd. Essential Air Service To Be Provided at Dickinson, North Dakota

Effective Period February 1, 2011 through January 31, 2013 : Scheduled Service 18 nonstop round trips to Denver a week : Intermediate stops and upline

service : Service may be permitted to an upline point on 6 subsidized Dickinson flights a week . No service to any intermediate point is contemplated under the terms of the carrier’s proposal; accordingly, no s uch service may be provided on subsidized flights without prior Department approval. Aircraft type: Embraer Brasilia (30 passenger seats). Timing of flights: Flights must be well

- timed and well

- spaced in order to ensure full compensation. Annual compensation: $2,019,027 This rate assumes an annual completion factor of 97.5 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 we ek. Subsidy Rate per Flight : $ 1,102.69 1 Weekly Compensation Ceiling: $ 39,696.84 2

1 $ 2,019,027 divided by 1831 annual departures: 6 flights/day x 313 days x .975 (completion fact or) =1,831.

2 36 flights per week multiplied by $1,102.69 per flight.Appendix C Page 2 of 2

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 ta ke

- 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 elig ible 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 suc h 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

determi ning 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 commu nity.

If the Department unilaterally, either partially or complete ly , 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

r egulations, 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 Decemb er 3 , 2010. The Department’s obligation for performance unde r this order beyond December 3 , 2010, 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 p ayment may arise for performance under this order beyond December 3 , 2010, until funds are made available to the Department for performance. If funds are not made available for performance beyond December 3 , 2010, the Department will provide notice in wri ting to the carrier.

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

under this order.Appendix D

SERVICE LIST

Mr. Jon Frantsvog

Chairman Dickinson Municipal Airport Authority

11120 42 nd St reet SW Dickinson, N orth D akota 58601

Mr. Shawn Kessel City Administrator City of Dickinson

99 2 nd Street East Dickinson, N orth D akota 58601

Mr. Michael O. Matthews

Chief Financial Officer

Great Lakes Airlines 1022 Airport Parkw ay Cheyenne, Wyoming 82001

Mr. Matthew Remynse Airport Manager Dickinson Theodore Roosevelt Regional Airport

11120 42 St reet SW Dickinson, N orth D akota 58601

Mr. Larry Taborsky

Director

North Dakota A eronautics Commission

P.O. Box 5020

Bismarck , N orth D akota 58 502

- 5020

Terri Thiel

Executive Director

Dickinson Convention & Visitors Bureau

72 East Museum Drive Dickinson, North Dakota 58601