Order 2014-7-9

Served: July 15, 2014

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 15th of July, 2014

Essential Air Service at

CHATHAM, ALASKA 

FUNTER BAY, ALASKA

Under 49 U.S.C. § 41731 et seq. 

DOCKET DOT-OST-1997-3134

ORDER RESELECTING CARRIER

Summary

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

Service (EAS) at Chatham and Funter Bay, Alaska, at annual subsidies of $5,452 at Chatham and 

$12,309 at Funter Bay, from October 1, 2014, through September 30, 2015; and $5,715 at 

Chatham and $12,928 at Funter Bay, from October 1, 2015, through September 30, 2016.1

Background

By Order 2012-9-2, issued September 4, 2012, we reselected 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 

aircraft 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 2014-4-1,

requesting proposals from carriers interested in providing EAS at the communities for a new 

contract period, beginning October 1, 2014. 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 proposal included only one service option, to continue its existing service, as follows:

Chatham: One 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 Cessna 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, or 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 these communities for many years and 

the 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.

Carrier 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 Essential Air Service.2 Ward Air

is subject to the Department’s continuing fitness requirements, 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 findings. DOT therefore concludes that the carrier remains fit to conduct the operations 

proposed here.

This order is issued under authority delegated in 49 CFR Part 1.25a(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 reselect Ward Air, Inc., to provide Essential Air Service 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 manner 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, 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 Ward Air, Inc., continues to be fit, willing and able to operate as an air taxi and 

capable of providing reliable Essential Air Service at Chatham and Funter Bay, Alaska; 

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

5. We will serve copies of this Order 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 Order under the Department’s 

Regulations, 14 CFR Part 385.50, 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:

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

Great Circle Miles

Chatham to Juneau 60

Funter Bay to Juneau 14

Chatham to Funter Bay 51
Appendix B
Appendix 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, 2014, through September 30, 2016.

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 Subsidy1 $5,452 $5,715

Annual Flights2 24 24

Rate per Flight3 $227 $238

Monthly/Weekly Ceiling4 $454 $476

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 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 complete, 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 for service provided in July must be filed by October 31st; August claims must be 

submitted by November 30th, and so on.

 

1 See Appendix B

2 One trip per month x 2 directions x 12 months = 24

3 Annual subsidy 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, 2014, 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 Subsidy5 $12,309 $12,928

Annual Flights6 104 104

Rate per Flight7 $118 $124

Monthly/Weekly Ceiling8 $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 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 complete, 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 for service provided in July must be filed by October 31st; August claims must be 

submitted by November 30th, and so on.

 

5 See Appendix 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.