Order: 2014-1-19 

Served: January 30, 2014 

UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Issued by the Department of Transportation 

on the 30th of January, 2014 

Essential Air Service at 

DEVILS LAKE, NORTH DAKOTA 

JAMESTOWN, NORTH DAKOTA 

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

DOCKET DOT-OST-1997-2785 

ORDER SELECTING CARRIER 

Summary 

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

Service (EAS) at Devils Lake, North Dakota, for $3,224,917 annually, and Jamestown, North 

Dakota, for $3,126,564 annually, with service set at eleven (11) nonstop or one-stop round trips 

per week at each community to Denver International Airport (DEN).1

Background 

By Order 2012-1-17, January 23, 2012, we selected Great Lakes Aviation, Ltd. (Great Lakes) to 

provide 18 nonstop round trips per week with 19-seat Beech 1900 aircraft between Jamestown 

and Minneapolis/St. Paul International Airport, MSP (Minneapolis) for a two-year period from 

the start of its service for an annual subsidy of $1,987,655. As the carrier inaugurated service in 

mid-March 2012, the rate was set to end on March 31, 2014. 

By Order 2011-12-6, December 14, 2011, we selected Great Lakes to provide 14 nonstop round 

trips per week between Devils Lake and Minneapolis with 19-seat Beech 1900 aircraft until 

further Department action for an annual subsidy of $2,797,467. Order 2012-11-25, 

November 21, 2012, specified March 31, 2014, as the end of the contract, thereby making the 

rates at the two communities expire at the same time. 

 

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

By Order 2013-10-14, October 28, 2013, we requested proposals for EAS at Devils Lake and 

Jamestown as the end of contract period was approaching. In response to that Order, the 

Department received proposals from Great Lakes, SkyWest and Sovereign Air, Inc. (Sovereign) 

as summarized below. We issued a request for community comments, comments have been 

received, and the issue is ripe for decision. 

Subsequent Developments 

On January 27, 2014, Great Lakes announced that it was suspending all operations at Devils 

Lake, Jamestown, and four other communities effective February 1, 2014, due to a severe pilot 

shortage at the carrier.2

Proposals 

Great Lakes requests $3,998,951 annual subsidy for service to both communities with 19-seat 

Beech 1900 aircraft to Minneapolis. The service would be a mixture of nonstop and one-stop 

service at each community, and the carrier projects 97 percent completion. As the service at 

Devils Lake and Jamestown would be linked on an operational basis, the carrier indicated that its 

proposal at each community was submitted as part of an inseparable package. Although Great 

Lakes announced that it will be suspending service at both communities effective February 1, 

2014, it did not withdraw its proposal from consideration. However, given the fact that it will 

shut down its Minneapolis hub operation as of that date, the Department does not deem its 

proposal credible at this time. 

Sovereign proposes to operate twenty four (24) nonstop round trips per week at Jamestown and 

24 one-stop round trips per week at Devils Lakes, with all service going to Minneapolis and a 

projected 97 percent completion factor. Sovereign requested $2,781,456 annual subsidy at 

Devils Lake and $1,968,000 at Jamestown with 19-seat, Jetstream 31 or 32 aircraft. 

SkyWest originally proposed to operate seven (7) nonstop round trips per week between 

Jamestown and Denver with 50-seat regional jets. The carrier requested $3,126,564 annual 

subsidy and projected 98 percent completion. 

At Devils Lake, SkyWest originally proposed to operate seven (7) nonstop round trips per week 

to Denver with 50-seat regional jets and requested $3,126,564 annual subsidy and projected 98 

percent completion. 

However, SkyWest has recently stated that it can increase the number of round trips from seven 

(7) nonstop to each community to eleven (11) nonstop or one-stops at the same subsidy rates 

mentioned above (further details below).3 

 

 

2 The other communities include Thief River Falls, Minnesota; Fort Dodge and Mason City, Iowa; and Ironwood, 

Michigan. 

3 See e-mail from SkyWest to Kevin Schlemmer, Chief of the EAS Program, dated January 24, 2014, and available 

on the docket at www.regulations.gov.
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Summary of Proposals Before the Department4

Community Comments5

Devils Lake 

The community strongly and unanimously supported the selection of SkyWest. The City of 

Devils Lake indicates that it feels: 

strongly that SkyWest should be awarded the EAS contract. Our bookings had been 

climbing steadily over the years when we were being served by Delta with Saab 

aircraft. Since the switch to Great Lakes we have seen significant change. Their 

dependability continues to erode, there have been booking problems and the local 

travelers have simply lost all trust in them as a carrier. We are very excited about the 

possibilities that SkyWest would present. They are a dependable, major carrier with jet 

service. We would concur with waiving the 12 round trips per week required in the 

current [SkyWest] proposal. 

The airport authority also supports SkyWest. It too notes the fact that passenger traffic climbed 

steadily before Great Lakes began service and then declined when Great Lakes inaugurated 

service. The authority cites similar causes. However, the key issue is flight cancellations and 

unreliable service: 

The pilot shortage that [Great Lakes] has experienced resulted in a cancellation of 39 

flights of a scheduled 90 flights during November [2013]. In December, [Great Lakes] 

reduced the number of scheduled flights per day from three to two per day, a reduction 

of 31 flights, and still cancelled an additional 22 flights. With the current trend of air 

 

4 Great Lakes estimated its subsidy at Devils Lake and Jamestown to be $3,998,951, and we have divided that 

amount by two. 

5 The communities based their comments on SkyWest’s original proposal of seven (7) round trips per week. 

Weekly

Community Carrier Hub Aircraft Trips Stops Subsidy Passengers

Devils Lake Great Lakes MSP B-1900 18 1/0 $1,999,476 7,250

Sovereign MSP J-31/32 24 1 $2,781,456 10,000

SkyWest DEN R. Jets 11 1/0 $3,224,917 8,000

Jamestown Great Lakes MSP B-1900 18 1/0 $1,999,476 7,250

Sovereign MSP J-31/32 24 0 $1,968,000 10,000

SkyWest DEN R. Jets 11 1/0 $3,126,564 8,000

Combined

Great Lakes Total MSP B-1900 18 1/0 $3,998,951 14,500

Sovereign Total MSP J-31/32 24 1/0 $4,749,456 20,000

SkyWest Total DEN R. Jets 11 1/0 $6,351,481 16,000
- 4 - 

service at DVL, we feel that any plan that Great Lakes is working toward to correct 

their pilot shortage will not be soon enough to rectify our situation at DVL and we 

cannot support their proposal. .... [SkyWest’s] association with a major air carrier, 

United Airlines, brings with them the credibility, proven dependability, and perks that 

are needed to bring our airport service and consumer confidence back [to pre-Great 

Lakes periods]. We are aware that in their proposal [SkyWest] offers one round trip per 

day, and we request that that requirement for two flights [per day] be waived. We 

believe this one flight [per day by SkyWest] will be very attractive service for our 

airport and we are excited to begin marketing this program. We fully support their 

proposal. 

Jamestown 

The city of Jamestown strongly and unanimously supports SkyWest. The community leaders 

indicate that: 

Though we believe the Jamestown area traveling public still prefers to fly into 

Minneapolis/St. Paul, Great Lakes Airlines has not provided our community the 

reliable, affordable air service expected. We’ve suffered from very expensive throughfares and poor service for travelers connecting with other airlines at MSP, and Great 

Lakes has exhibited dismal reliability for the duration of their contract. Therefore, we 

support the bid for air service submitted by SkyWest in partnership with United 

Airlines. We are fully aware that the SkyWest bid does not meet the 12 round trip/week 

requirement as stipulated in the RFP, but still affirm that this is our best option. 

SkyWest’s performance history as a reliable airline and the relationship with United 

Airlines in the form of a seamless and integrated marketing agreement make SkyWest 

the only viable bidder. 

The airport also strongly supports SkyWest, for the reasons outlined by the other commenters: 

[O]ver 40% of [Great Lakes] flights for the Jamestown market were cancelled in 

November 2013 as a consequence of operational issues. This is very indicative of a 

general lack of reliability, which has had a profound adverse impact on our boarding 

numbers. We’ve gone down from an average monthly passenger boarding figure of 474 

back in 2011 [before Great Lakes] to an average monthly figure of 223, a staggering 

loss of 53% of our market share. To proceed with the bid offered by Great Lakes would 

be conducive to a furtherance of the present situation, which is untenable. We’ve 

received community feedback from over 100 individuals, members of businesses, and 

organizations who have overwhelmingly and emphatically recommended the selection 

of SkyWest as our commercial air carrier. To reiterate, we’re fully aware that the 

SkyWest bid does not meet the 12 round-trip/week requirement as stipulated in the 

RFP, but still affirm that this is our best and only option. 

 
- 5 - 

Decision 

Sovereign requests $4,749,456, a level of subsidy very close to Great Lakes’ current annual 

subsidy rate, and proposes service that would fully meet EAS. However, it does not have the 

authority to provide scheduled service, and so we will not consider their proposal further. 

Orders 2012-1-17 and 2011-12-6 selected Great Lakes to provide EAS at Devils Lake and 

Jamestown. At both communities the carrier was selected to provide 12 or more round trips per 

week, (14 for Devils Lake and 18 for Jamestown). Great Lakes entered these two markets and 

four others under the aegis of the EAS program, inaugurating service to Minneapolis, a new hub 

operation for the company. Due to Great Lakes’ severe pilot shortage as described in its 

January 27, 2014, press release, it has not been able to meet the terms of its contract, as discussed 

above, including total suspension of service at Devils Lake and Jamestown effective February 1, 

2014. Although Great Lakes has submitted a proposal in response to the RFP, the carrier has 

provided no concrete evidence that its operational problems will be resolved, thereby enabling it 

to meet the terms of the new contract. We note that for the last several months, the carrier’s 

completion factor has continued to deteriorate at Devils Lake and Jamestown. Although Great 

Lakes’ proposal requesting $3,998,951 requires the lowest subsidy of all proposals, and fully 

meets the communities’ EAS level, we cannot select it because we cannot currently rely on it to 

provide the service it proposes. 

SkyWest submitted a timely-filed proposal, and that proposal was for one nonstop round trip per 

day, seven days per week, although it did not meet the statutory minimum level of two daily 

round trips, six days a week as required by 49 U.S.C. § 41732(b)(1)(A). However, SkyWest has 

a long-term record of providing excellent service for the EAS program. Moreover, after 

considering the five factors that the Department considers when selecting an air carrier for EAS, 

SkyWest clearly meets those factors, including experience in providing reliable service, 

contractual, marketing, and interline arrangements with larger carriers, and favorable community 

views.6 All of the EAS communities where it is currently subsidized praise SkyWest in terms of 

its reliability, responsiveness to their communities, and marketing of their service. In brief, the 

carrier has a well-deserved, stellar reputation and demonstrated ability to deliver on its 

commitments. 

After the deadline for proposals, EAS staff reached out to both Great Lakes and SkyWest to 

discuss the deficiencies with each proposal, including SkyWest not offering both communities at 

least basic EAS as specificed in 49 U.S.C. § 41732(b)(1)(A) and Great Lakes’ current service not 

meeting basic EAS in terms of frequency requirements.7 While Great Lakes stated that its 

 

6 In selecting an air carrier to provide subsidized EAS, 49 U.S.C. § 41733(c)(1) directs us to consider five factors: 

(1) service reliability; (2) contractual and marketing arrangements with a larger air carrier at the hub; (3) interline 

arrangements with a larger air carrier at the hub (4) community views; and (5) whether the air carrier has included a 

plan in its proposal to market the service. In addition, the Consolidated Appropriations Act, 2014, Public Law No. 

113-76, 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 since the inception of the program. 

7 See e-mail from Kevin Schlemmer to SkyWest and Great Lakes dated January 22, 2014, and available on the 

docket at www.regulations.gov. 
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service capacity “would be at the level originally requested in the RFP,”8 its decision to suspend 

service at both communities and four others effective February 1, 2014, brings that assertion into 

doubt. SkyWest, while unable to promise the community its basic EAS, stated that its “proposal 

for Jamestown and Devils Lake is to provide eleven (11) one-stop round trips at the same 

subsidy rate as originally proposed.”9 This is a four round trip a week increase from its original 

proposal. 

The communities fully endorse SkyWest. Even though SkyWest’s service does not meet the 

technical specifications of EAS, we find that selecting SkyWest is the best and only practical 

alternative. And because SkyWest has indicated to the Department its willingness to increase the 

number of weekly round trips in its proposal from seven (7) originally proposed to eleven (11) at 

the same subsidy rate, we are comfortable selecting SkyWest to provide EAS at both 

communities. However, we ask that SkyWest work together with both communities to increase 

its number of round trips to the statutory minimum of two daily round trips, six days a week as 

required by 49 U.S.C. § 41732(b)(1)(A). 

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. DOT 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 Devils Lake and Jamestown, North Dakota, as 

described in Appendix B-1 and B-2; 

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; 

 

8 See e-mail from Great Lakes to Kevin Schlemmer dated January 22, 2014, and available on the docket at 

www.regulations.gov. 

9 See e-mail from SkyWest to Kevin Schlemmer dated January 24, 2014, and available on the docket at 

www.regulations.gov. 
- 7 - 

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

carrier and capable of providing reliable EAS at Devils Lake and Jamestown, North Dakota; 

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 Devils Lake and Jamestown, North 

Dakota, and on Great Lakes Aviation, Ltd., Sovereign Air, Inc. and 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 Devils Lake (DVL) 

Fargo (FAR) 128 

Jamestown (JMS) 83 

Denver (DEN) 638 

Chicago (ORD) 684 

Nonstop Great Circle Miles to Jamestown (JMS) 

Minneapolis (MSP) 299 

Grand Forks (GFK) 100 

Pierre (PIR) 192 
Appendix B-1 

SkyWest Airlines EAS to be Provided to Devils Lake, North Dakota 

Docket 1997-2785 

Effective Period: April 1, 2014, through June 30, 2016;1

Service: Eleven (11) nonstop or one-stop round trips per week to Denver (DEN); 

Aircraft Type: 50-seat regional jet 

Annual Subsidy: $3,224,917 

Annual Flights: 1,1212

Subsidy per Flight: $2,8773

Weekly Subsidy Ceiling: $63,294 4

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 September 30, 2014. The Government’s obligation for 

performance under this Order beyond September 30, 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 

September 30, 2014, until funds are made available to the Department for performance. If sufficient funds are not made available for 

performance beyond September 30, 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 Because a budgetary marker is required, we have indicated a start date of April 1, 2014, but realize that the actual 

start-up date will be determined by SkyWest’s operational requirements and its partner, United Airlines. 

2 11 flights per week x two directions x 52 weeks x 0.98 completion = 1,121 flights. 

3 $3,224,917 ÷ 1,121 flights. 

4 $2,877 per flight x 22 flights per week.
Appendix B-2 

SkyWest Airlines, EAS to be Provided to Jamestown, North Dakota 

Docket 1997-2785 

Effective Period: April 1, 2014, through June 30, 2016;1

Service: Eleven (11) nonstop or one-stop round trips per week to Denver (DEN); 

Aircraft Type: 50-seat regional jet 

Annual Subsidy: $3,126,564 

Annual Flights: 1,1212

Subsidy per Flight: $2,7893

Weekly Subsidy Ceiling: $61,358 4

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 September 30, 2014. The Government’s obligation for 

performance under this Order beyond September 30, 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 

September 30, 2014, until funds are made available to the Department for performance. If sufficient funds are not made available for 

performance beyond September 30, 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 Because a budgetary marker is required, we have indicated a start date of April 1, 2014, but realize that the actual 

start-up date will be determined by SkyWest’s operational requirements and its partner, United Airlines. 

2 11 flights per week x two directions x 52 weeks x 0.98 completion = 1,121flights. 

3 $3,126,564 ÷ 1,121 flights. 

4 $2,789 per flight x 22 flights per week.