Order 2014-1-4

Served: January 8, 2014

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 8th of January, 2014

Essential Air Service at

ABERDEEN, SOUTH DAKOTA, and

BEMIDJI, MINNESOTA

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

DOCKET DOT-OST-2011-0137

DOCKET DOT-OST-2011-0134

ORDER RE-SELECTING CARRIER

By this Order, the Department is re-selecting SkyWest Airlines (SkyWest), to provide Essential 

Air Service (EAS) at Aberdeen, South Dakota, for $1,043,719 and at Bemidji, Minnesota, for 

$1,118,050 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 at Aberdeen, South Dakota, and at Bemidji, Minnesota, 

to Minneapolis-St. Paul International Airport (Minneapolis), from the date SkyWest inaugurated 

service through February 28, 2014.2 SkyWest began service to Aberdeen and Bemidji on 

March 2, 2012. All of SkyWest’s service is provided with 50-seat regional jet aircraft, and the 

annual level of subsidy is set at $1,198,222 at Aberdeen and $1,338,293 at Bemidji. 

By Order 2013-10-2, October 1, 2013, the Department requested proposals for EAS at Aberdeen 

and Bemidji, Minnesota, for a new term. The Order requested proposals consistent with the 

historical service pattern of 14 nonstop round trips per week to Minneapolis with aircraft to 

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

The deadline for proposals was set at October 24, 2013, but by notice we extended the deadline 

 

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

2 Order 2012-1-23 also selected SkyWest at Butte, Montana. However, we have separately dealt with Butte, 

reselecting SkyWest by Order 2013-12-8, December 30, 2013.
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to November 15, 2013. We received a proposal from only one carrier, the incumbent, SkyWest. 

On November 18, 2013, we requested comments from each community regarding the carrier 

selection decision. 

Proposals of SkyWest

At Aberdeen SkyWest proposes to continue to operate fourteen (14) nonstop round trips per 

week to Minneapolis with the same CRJ-200 regional jets it currently provides, and requests 

$1,043,719 annual subsidy, a decrease of $154,503 in annual subsidy from the current rate of 

$1,198,222. 

At Bemidji SkyWest proposes to continue to operate fourteen (14) nonstop round trips per week 

to Minneapolis with the same CRJ-200 regional jets it currently provides, and requests 

$1,118,050 annual subsidy, a decrease of $220,243 in annual subsidy from the current rate of 

$1,338,293. 

Community Comments, Aberdeen

On November 18, 2013, we requested community comments. On November 21, 2013, the 

Aberdeen Airport Board recommended that we reselect SkyWest. “SkyWest has provided 

quality, reliable air service since they began serving Aberdeen in early 2012. The use of CRJ200 aircraft to provide two daily flights, seven days per week to Minneapolis/St.Paul 

International Airport is appropriate EAS for our community.” 

On November 25, the Mayor of Aberdeen also recommended that we reselect SkyWest. 

“SkyWest Airlines has provided our community with quality air service and we are pleased that 

they wish to continue to provide us with this high level of service. The Aberdeen market has 

seen increased passenger enplanements over the past three years which appears to have resulted 

in a lower subsidy request by SkyWest. ....[The Mayor indicates that t]he Aberdeen City 

Council would like to see passenger counts high enough to support a third flight and to allow an 

airline to operate without a subsidy. We feel that SkyWest has proven to be a reliable air carrier 

that is able to continue working with the City to make this a reality.” 

Absolutely Aberdeen, an Economic Development Group, and the Chamber of Commerce also 

indicated they were pleased with SkyWest, and expressed hope for additional service.3

Community Comments, Bemidji

On November 18, 2013, we received a jointly signed letter from the Mayor, City Manager, and 

the Bemidji Regional Airport Authority recommending that we reselect SkyWest. They indicate 

that the airport “Authority and the community as a whole are looking forward to continuing to

work closely with SkyWest to ensure this critical service is successful and to grow this market 

with the goal of this market being self-sustaining and not requiring subsidy in the future.”

 

3 Staff contacted the civic officials and indicated that SkyWest and any carrier could supplement the community’s 

EAS, but that the service provided by SkyWest was the maximum level by statute that the Department could 

subsidize.
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Decision

The decision is straightforward: we have only one proposal from one carrier for each community 

and each community strongly and unanimously favors the selection of that proposal. 

We are pleased that the subsidy requested by SkyWest has decreased at each community, 

notwithstanding a slight decrease in the number of passengers generated at Bemidji. SkyWest is 

a known, proven operator. Furthermore, its code-share arrangement with Delta Air Lines at 

Minneapolis provides Aberdeen and Bemidji 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 

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 Aberdeen and Bemidji, Minnesota, 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 Aberdeen and Bemidji, Minnesota;

4. These dockets will remain open until further Order of the Department; and
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5. We will serve copies of this Order on the civic officials of Aberdeen and Bemidji, Minnesota, 

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 Minneapolis (MSP)

BRD, Brainerd 114

HIB, Hibbing, 174

FSD, Sioux Falls, 196

BJI, Bemidji 199

FAR, Fargo 223

ABR, Aberdeen 257

PIR, Pierre 350

Nonstop Miles to Bemidji (BJI)

FAR, Fargo 97

BRD, Brainerd 85

HIB, Hibbing 99

Nonstop Miles to Aberdeen (ABR)

FAR, Fargo 128

PIR, Pierre 117

FSD, Sioux Falls 153
Appendix B

SkyWest Airlines, Essential Air Service at Aberdeen, South Dakota, 

and Bemidji, Minnesota, Dockets 2011-0137 and 2011-0134

Aberdeen Bemidji

Weekly Trips 14 14

Hub MSP MSP

Stage Length 257 199

Aircraft Type CRJ-200 CRJ-200

Seats 50 50

Scheduled Departures 1/ 1,456 1,456

Completion Factor 98.00% 98.00%

Block Minutes 73 62

Passengers 47,000 43,000

Passenger Fare $96.00 $87.00

Deps. Performed 1,427 1,427

Block Hours 1,736 1,475

RPMs 12,079,000 8,557,000

ASMs 18,709,600 14,487,200

Passenger Fare $96.00 $87.00

Revenue $4,512,000 $3,741,000

Direct Operating Expense $4,062,327 $3,450,196

$/Block Hour $2,339.80 $2,339.80

RPM Related $41,189 $29,179

Departure Related $1,013,270 $1,013,270

ASM Related $174,373 $135,021

Indirects $1,228,834 $1,177,471

Total Operating $5,291,161 $4,627,667

Profit $264,558 $231,383

Economic Cost $5,555,719 $4,859,050

Subsidy @ 98% $1,043,719 $1,118,050

1/ 14 flights per week x 2 direction x 52 weeks = 1,456
Appendix C-1

SkyWest Airlines, Essential Air Service to be Provided to Aberdeen, South Dakota,

Docket 2011-0137

Effective Period: March 1, 2014, through February 28, 2016;

Service: Fourteen (14) nonstop round trips per week to Minneapolis (MSP)

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

Annual Subsidy: $1,043,719

Annual Flights: 1,4271

Subsidy per Flight: $7312

Weekly Subsidy Ceiling: $20,4683

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 $1,043,719 ÷ 1,427 flights.

3 $731 per flight x 28 flights per week.
Appendix C-2

SkyWest Airlines, Essential Air Service to be Provided to Bemidji, Minnesota,

Docket 2011-0134

Effective Period: March 1, 2014, through February 28, 2016;

Service: Fourteen (14) nonstop round trips per week to Minneapolis (MSP)

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

Annual Subsidy: $1,118,050

Annual Flights: 1,4271

Subsidy per Flight: $7832

Weekly Subsidy Ceiling: $21,9243

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 $1,118,050 ÷ 1,427 flights.

3 $783 per flight x 28 flights per week.