Order 20 13

- 9

- 21

Served: September 30 , 20 13



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 30 th day of September , 20 13

ORDER REQUESTING PROPOSALS

Summary By this O rder, the Department is requesting proposals from ca rriers interested in providing

E ssential A ir S ervice (EAS) at Saranac Lake/Lake Placid, New York , for a new contra ct period, beginning March 1, 201 4

, with subsidy support if necessary

. (See Appendix A for a map). Carriers should file their proposals no later than October 30

, 20 13

.

Background
By Order 2010

- 3

- 27, March 25

, 20 1 0

, the Department re

- selected Hyannis Air Service, Inc., d/b/a Cape Air (Cape Air) , to provide subsidized EAS at Saranac Lake/Lake Placid for the period from March 1, 2010, through February 2 8 , 201 4

. Under that O rder, Cape Air provides

the community with three daily (21 weekly) nonstop round tri ps to Boston Logan International Airport (BOS) with twin

- engine, nine

- seat Cessna 402 aircraft for an annual subsidy of $1,366,538

.

Request for Proposals

As the end of the current contract approaches, the Department is requesting proposals from

carriers interested in providing EAS at Saranac Lake/Lake Placid

, with subsidy support if

necessary , for a new contract period beginning March 1, 201 4

. Carriers should file their proposals no later than October 30

, 20 13

. S taff will the n docket the proposals, the reby making them public

. Shortly afterwards, we will provide a summary of the proposals to the

communit y and ask them to submit their final comments. We will give full consideration to all proposals that are timely filed. 1

1 Carriers should not expect the Department to accept late fillings. In cases where a carrier proposes to provide

EAS without subsidy and we determine that basic EAS, as required by 49 U.S.C. § 41732 can be reliably provided without such compensation, we typically will not proceed with the carrier

- selection case. Instead, we simply rely on that carrier’s subsidy

- free service as proposed.

Essential Air Service at

SARANAC LAKE/LAKE PLACID, NEW YORK

Under 49 U.S.C. 41731 et seq

. Docket DOT

- OST

- 2000

- 8025- 2

-

Interested carriers should pre pare their proposals with every expectation that their initial proposals will represent their final and only proposals. However, we retain the discretion to negotiate proposals with carriers when we deem it desirable; in such cases, of course, we will giv e all applicants the same opportunity. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and re

- solicit a new round of proposals. However, negotiation and rejection are only occasional exceptions to the rule.

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 for their proposals. We expect proposals to adequately describe the service being propose d 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, we recommend they include information concerning proposed schedules and projected block hours . In add ition, applicants are encouraged to provide financial data supporting their subsidy requests, including information on their projected expenses and revenues. We strongly encourage clear, well

- documented proposals that will facilitate their evaluation by t he affected communit ies and the Department. 2

The Department expects proposals that are co ns istent with what the community currently

receive s
, with service to a suitable hub airport that provides numerous connecting opportunities to the national air transp ortation system. We encourage proposals that meet these guidelines in an effi cient manner. Carriers are also welcome to propose more than one service option, if they choose. T hey also need not limit themselves to the se requirements if they envision othe r, potentially more attractive service possibilities

-- different hubs or length of contract, for example

-- with subsidy requirements that remain competitive.

Filing Procedures Carrier proposals should be submitted to the Department with all materials me rged into a single document. In addition, because the document will be published on Regulations.gov, each page should be formatted to be viewed online.

2 In selecting a carrier to provide subsidized EAS for an eligible place not in Alaska , 49 U.S.C. § 41733(c) (1)

directs us to consider five factors: (a) service reliability; (b) contractual and marketing arrangements wit h a larger carrier at the hub; (c) interline arrangements with a larger carrier at the hub; (d) community views, giving substantial weight to the views of the elected officials representing the users ; and (e) whether the carrier has included a plan in its proposal to market its service to the community

. In addition, the Consolidated and Further Continuing Appropriations Act, 20 12 , Public Law No. 11 2

- 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 requirements

, thus codifying a factor that we have considered sinc e the inception of the program

. Interested carriers should also be aware that our general provisi ons governing Essential Air Service will be included in the selection Order as part of our authorization of subsidy for the selected service. Appendix C of this Order contains those general provisions.- 3

-

Service and Traffic History We have provided some historic traffic data for the community in Append ix B. Traffic has been rising steadily in the market since Cape Air began serving the route in 2008, growing from 8,112 annual passengers in 2008 to 11,909 passengers in 2012.

Other Carrier Requirements The Department is responsible for implementing vari ous Federal statutes governing lobbying activities, drug

- free workplaces, and nondiscrimination. 3 Consequently, all carriers receiving Federal subsidy for EAS must certify that they are in compliance with Department regulations regarding drug

- free workpla ces and nondiscrimination, and those carriers whose subsidies exceed $100,000 over the life of the contract must also certify that they are in compliance with the regulations governing lobbying activities. Because the Department is prohibited from paying subsidy to carriers that do not submit these documents, all carriers that plan to submit proposals involving subsidy should be aware that the selected carrier will be required to complete the required certifications. Interested carriers requiring more det ailed information regarding these requirements should contact the Office of Aviation Analysis at (202) 366

- 5903. 4

Community and State Comments

The communit y and State are welcome to submit comments at any time. We encourage prospective appl icants to cont act the community before they submit their proposals so that they can tailor them to the communit y ’ s needs, as they will not be able to amend them after the due date. As noted earlier, we will provide a summary of the proposals to the civic parties

shortl y after the deadline for carrier proposals, and ask them to submit their final comments.

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

- delegated to the Director, Office of Aviation Analysis.

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

-- New Restrictions on Lobbying; (2) 49 CFR Part 21

-- Nondiscrimination in Federally

- Assisted Programs of the Department of Transportation

-- Effectuation of Title VI of the Civil Rights Act of 1964; (3) 49 CFR Part 27

-- Nondiscrimination on the Basis of Disability in Programs and Activities Receiving or Benefiting from Federal Financial Assistance; (4)

14 CFR Part 382

-- Nondiscrimination on the Basis of Disability in Air Travel; and (5) 49 CFR Part 29

-- Government

- Wide Debarment and Sus pension (Non

- Procurement) and Government

- Wide Requirements for Drug

- Free Workplace (Grants).

4 The certifications are also available on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

rural

- air

- service/essential

- air

- service

.- 4

-

ACCORDINGLY, 1. We request th at carriers interested in providing Essential Air Service at
Saranac Lake/Lake Placid, New York

, submit their proposals, with subsidy support if

necessary , no later than October 30

, 20 13 . The proposals should be e

- mailed to: EAS@dot.gov with the title “Proposal to Provide E AS at Saranac Lake/Lake Placid,

N ew Y ork ”; 5

2. Th is docket will remai n open until further O rder of the Department; and

3 . We will serve copies of this O rder on the mayor s of Saranac Lake and Lake Placid

, N ew Y ork

, the town supervisor of Harrietstown, N ew Y ork

, the airport manager of Adirondack Regional Airport , and the service list for this docket.

Persons entitled to petition the Department for review of this Order under the Department’s Regulat ions, 14 CFR Part 385.31(a), must file such petitions within seven (7) days after the

date of service of this Order.

This Order will be effective immediately, and the filing of a petition for review shall not preclude its effectiveness.

By:

TODD M. H OMAN

Director Office of Aviation Analysis (SEAL) An electronic version of this document is available

o nline at http://www.regulations.gov

.

5 Questions regarding filings in response to this O rder may be directed to A.J. Muldoon at (202) 366

- 1058 or albert.muldoon@dot.gov

.Appendix A

SARANAC LAKE/LAKE PLACID, NEW YORK

REGIONAL MAPAppendix B

EAS Carrier Traffic

Saranac Lake /Lake Placid , NY (SLK)

Period Origin &
Destination Passengers 1 Annual Enplanements 2 Average Enplanements per Service Day 3

2008 8,112 4,056 13.0

2009 9,463 4,732 15.1

2010 11,336 5,668 18.1

2011 11,543 5,772 18.4

2 012 11,909 5,955 19.0
1Q

- 2013 1,797 899 11.5

Notes : 1. Source: Bureau of Transportation Statistics T

- 100 Market

. 2. Origin

- destination passengers divided by two.

3. Annual enplanements divided by 313 annual service days (314 in leap years).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 subs idy 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 th e 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 complete, terminates or reduces payments for

service or ch anges 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 serv ice 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 parti al reduction or cessation of payment.

Funds may not be available for performance under this Order beyond [DATE]. The Government’s obligation for performance under this Order beyond [DATE], is subject to the availability of funds from which payment for se rvices 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 sufficient funds are not made available fo r performance beyond [DATE] , the Department will provide notice in writing to the carrier.

Subsidy contracts are subject to, and incorporate by reference, relevant statutes and Department regulations, as they may be amended from time to time. However, an y such statutes, regulations, or amendments thereto shall not operate to controvert the foregoing paragraph.

All claims for payment, including any amended cl aims, must be submitted within 9 0 days of the last day of the month for which compensation is bein g claimed. For example, claims for service provided in July must be filed by October 31 st ; August claims must be submitted by November 30 th , and so on.