Order 201 4

- 7

- 9

Served: Ju ly 1 5 , 201 4



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION


### OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 1 5 th of Ju ly , 201 4

Essential Air Service at

CHATHAM, ALASKA

FUNTER B AY
, ALASKA

Under 49 U.S.C. § 41731 et seq

. DOCKET DOT

- OST

- 1997

- 3134

ORDER RESELECTING CARRIER

Summary By this O rder

, the Department is reselecting Ward Air , Inc. (Ward Air) to provide Essential Air

S ervice (EAS) at Chatham and Funter Bay

, Alaska

, a t annual subsidies of $ 5,452 at Chatham and $12, 309 at Funter Bay , from October 1, 201 4 , through September 30, 201 5 ; and $ 5,715 at Chatham and $ 12,928 at Funter Bay, from October 1, 201 5

, through September 30, 201 6

. 1

Background By Order 20 1 2

- 9

- 2, issued S eptember 4, 2012, we re selected Ward Air to provide Chatham with

one (1) one

- stop round trip per month to Juneau and Funter Bay with one nonstop round trip per week to Juneau through September 30, 2014

. All service is provided with single

- engine piston

ai rcraft for a combined annual subsidy of $ 22,512 in the first year and $26,312 in the second

year

.

In anticipation of the end of the current contract, on April 1, 2014 we issued Order 201 4

- 4

- 1

, request ing proposals from carriers interested in providing E AS at the communities for a new contract period, beginning October 1, 201 4

. We received one proposal

, from Ward Air , the

incumbent.

1 Such subsidy is calculated on a fiscal year basis, subject to the availability of appropriated funds.The carrier ’ s complete proposal and community comments may be accessed online at www.regulations.gov by entering “DOT

- OST

- 1997

- 3134” in the search box . Therefore, we will only briefly summarize the proposal and comments below.

Proposal of Ward Air

Ward Air ’s prop osal included only one service option, to continue its existing servic e, as follows:

Chatham : O ne round trip per month to Juneau for $ 5,452 annual subsidy in the first year, and $ 5,715 in the second year . All of the service would be operated with single

- engine piston aircraft, either DeHavilland Beaver, Cessna 185, or Ce ssna 206 aircraft.

Funter Bay : One round trip per week to Juneau for $ 12, 309 annual subsidy the first year, and $ 12,928 in the second year . All of the service would be operated with single

- engine piston aircraft, either DeHavilland Beaver, Cessna 185, o r Cessna 206 aircraft.

Community Comments On May 1, 2014, we requested comments from the community and state regarding the carrier selection case. On June 24, 2014, we received a letter from the Alaska Department of Transportation and Public Facilities, Division of Statewide Aviation. In the letter, the State expresses its support for the EAS program in Alaska and notes that the communities of Chatham and Funter Bay rely on EAS for basic neccesities including mail, medical, and health services.

Decision The decision is this case is straightforward. Ward Air was the only carrier to submit a service proposal. Ward Air has been providing reliable EAS at the se communities for many years and

t he service levels proposed and subsidy requested are reasonable. We shall make the selection of Ward Air contingent upon the Department’s receiving properly executed certifications from the carrier that it continues to comply with the Department’s regulations regarding drug

- free workplaces and non

- discrimination.

Carr ier Fitness

49 U.S.C. §§ 41737(b) and 41738 require that DOT find an air carrier fit, willing, and able to provide reliable service before DOT may subsidize it to provide E ssential A ir S ervice. 2 Ward Air

is subject to the Department’s continuing fitness r equirements, and no information has come to our attention that would cause us to question the carrier ’ s fitness at this time. DOT has contacted the Federal Aviation Administration, and it has raised no concerns that would negatively affect our

fitness fin ding s . DOT therefore concludes that the carrier remain s fit to conduct the operations proposed here.

This order is issued under authority delegated in 49 CFR Part 1. 25 a( b ).

2 Ward Air is authorized to provide on

- demand air taxi services under Part 135 of the Federal Aviation Regulations
(FARs) and Part 298 of our regulations (14 CFR 298).ACCORDINGLY,

1. We re select Ward Air

, Inc., to provide Essential Air S ervice at Chatham and Funter Bay

, Alaska , as described in Appendix C ;

2 . We direct Ward Air

, Inc., 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 manne r that readily permits its audit and examination by representatives of the Department. Such documentation shall be retained for seven years from the date of service of this Order, or until the Department indicates that the records may be destroyed, whiche ver 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 sup ported under the terms of this O rder;

3 . We find that Ward Air

, Inc., continue s to be fit, w illing and able to operate as an air taxi and capable of providing reliable E ssential A ir S ervice at Chatham and Funter Bay

, Alaska ;

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

5 . We will serve copies of this O rder on the Division of Statewide Aviation of the Alaska Department of Transportation and Public Facilities, and Ward Air, Inc.

Persons entitled to petition the Department for review of this O rder under the Department’s Regulations, 14 CFR Part 385.50, must file suc h petitions within seven ( 7 ) days after the date of

service of t his O rder.

This O rder will be effective immediately, and the filing of a petition for review shall not preclude

its effectiveness.

By:

SUSAN L. KURLAND Assistant Secretary for Aviation

a nd International Affairs

(SEAL)

An electronic version of this document is available at http://www.regulations.govAppendix A

Great Circle Miles

Chatham to Juneau 60 Funter Bay to Juneau 14

Chatham to Fu nter Bay 51Appendix BAppendix C Page 1 of 2

Ward Air , Inc., Essential Air Service to be Provided to

Chatham
, Alaska , Docket : OST

- 1997

- 3134

Effective Period : October 1 , 20 1 4 , through September 30, 201 6

. Scheduled Service : One round trip per calendar month to Juneau.

Aircraft : Single

- Engine Piston

— DeHavailland Beaver, Cessna 185, or Cessna 206

.

October 1 ,2014

– September 30, 2015 October 1, 2015

– September 30, 2016
Annual Subsidy 1 $5,452 $5,715
Annual Flights 2 24 24
Rate per Flight 3 $227 $238
Monthly/Weekly Ceilin g 4 $454 $476

Note: The carrier understands that it may forfeit its compensation for any flights that it does not operate in conformance wi th the terms and stipulations of the rate Order, including the service plans outlined in the Order and any other si gnificant 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 fligh t 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 per iod, 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 mu st first notify the Office of Aviation Analysis in wri ting 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 t hat 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 complete, terminates or reduces payments for service or changes service r equirements at a specific location provided for under this Order, then, at the end of the period for which the Department does make payme nts in the stipulated amounts or at the stipulated service levels, the carrier may cease to provide service to that specific locati on without regard to any requirement for notice of such cessation. Those adjustments in the levels of subsidy and/or service that are mutually ag reed to in writing by the Department and carrier do not constitute a total or partial reduction or cessation o f 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 controve rt 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 9 0 days of the last day of the month for which compensation is being 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.

1 See Appendix B

2 One trip per month x 2 direction s x 12 months = 24

3 Annual su bsidy divided by annual flights.

4 Rate per flight multiplied by monthly flights.Appendix C Page 2 of 2

Ward Air, Inc., Essential Air Service to be Provided to Funter Bay Alaska, Docket : DOT

- OST

- 1997

- 3134

Effective Period : October 1, 201 4 , through September 30, 2016.

Scheduled Service : One round trip per week to Juneau.

Aircraft : Single

- Engine Piston

— DeHavailland Beaver, Cessna 185, or Cessna 206.

October 1 ,2014

– September 30, 2015 October 1, 2015

– September 30, 2016
Annual Subsidy 5 $12,309 $12,928
Annual Flights 6 104 104
Rate per Flight 7 $118 $124
Monthly/Weekly Ceiling 8 $472 $496

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 t he required service, without prior approval. The carrier understands that an aircra ft 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 cert ain 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 perio d in question. If the carrier contemplates an y 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 comp ensation.

Should circumsta nces 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 co mpensated. In

de termining whether subsidy payment for a deviating flight should be adjusted or disallowed, the Department will consider the e xtent 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 changes service r equirements at a specific location provided for under this Order, then, at the end of the period for which the Departme nt does make payments in the stipulated amounts or at the stipulated service levels, the carrier may cease to provide service to that specific location wi thout regard to any requirement for notice of such cessation. Those adjustments in the levels of subs idy 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 forego ing paragraph.

Funds may not be available for performance under this Order beyond September 3 0, 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 ari se 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 wr iting to the carrier.

All claims for payment, including any amended claims, must be submitted within 9 0 days of the last day of the month for which compensation is being claimed. For example, claims for service provided in July must be filed by October 3 1 st ; August claims must be submitted by November 30 th , and so on.

5 See Ap pendix B

6 One trip per week x 2 directions x 52 weeks = 104

7 Annual subsidy divided by annual flights.

8 Rate per flight multiplied by weekly flights.