### January 

### I6, 20I 4

The Hon. Susan Kurland Assistant Secretaryfor Policy and InternationalAffairs Department ofTransportation 

## on the river• on the move**~** 1200 New JerseyAve., S.E. Washington, DC 20590

Re: Essential Air Service·for Pierre. South Dakota

Dear Ms. Kurland:

I am writing to urge your action with respect to the failure ofGreat Lakes Aviation**("G[~at** Lakes") to provide an adequate level ofessential airservice to Pierre, the capital ofSouth Dakota. Even at the lowfrequency the carrier is now operating, its service is so unreliable that, quite simply, it is killing the air service market at our city. I am asking for your assistanceto remedy this situation.which may include a new commercial air carrier and eligibility forthe essential airservice funding in Pierre.

Two years ago, the Departmenttook decisive action to keep Delta Air Lines from withdrawing its service at Pierre. By Orders 2011-11-4 and 2012-1-7, the Departmentheld in Delta's Pierre-Minneapolis service until Great Lakes was able to initiate its own service (subsidy-free) on that route in February 2012. This supplemented the carrier's existing service to Denver. The Department required the carrierto provide two daily round trips to MSP.

Great Lakes got offto a slow start in 2012, as reflected in the monthly and annual passenger numbers at PIR. The announced pullout of Delta and its irregular service in the last few months before its termination cut deeply into passenger bookings, and Great Lakeswas not able to buildtraffic even close to previous levels until 2013. Priorto lastAugust, Great Lakes
was offering eight daily roundtrip flights at PIR; this was reduced to six, and then December 1, tofour (two each to Denver and Minneapolis). It is our understanding that these reductions
were not driven primarily by a drop in traffic demand, but resulted from the difficulties the carrier has had with implementing the new FAA rules on minimum qualifications forco-pilots, which has resulted in layoff ofa large proportion ofthe carrier's crews. This has led to an enormous cutback in the carrier's capacity

-- a reduction of38.1% in December2012 v. 2013. (PR Newswire, January 7, 2013.)

More serious thanthe infrequency ofthe service, however, is its extreme unreliability. In Novemberand December of2013, Great Lakes' cancellation rate was 21% and 20%, respectively. In otherwords, one out of

### five flights didn't show up. This was a substantial increase from the already-poor levels of9% in August ahd October, and 7% in September. While winterweather always increases flight cancellations somewhat, the weatherwas notthe primaryfactor in this dramatic increase; indeed, my conversations with Great Lakes management and othercommunities confirms that**th~se** statistics reflect a system-wide problem. And the problem is not limited to cancellations; ofthe 100flights (out of 124 scheduled) that operated in December, only 53 were on time (using the Department's standard 15-minutewindowfor determining flight**d~lays).** Combined with the cancellations, this means thatwe are experiencing an unacceptable 43% on-time departure rate:

LEGAL\18032247\1 Finance Office (605) 773-7407 222 East Dakota• PO Box 1253 Pierre, South Dakota 57501-1253 http://ci.pierre.sd.us Fax (605) 773-7406 Public Works (605) 773-7341 , ..,.•Air service**unr~liability** is now the number-one complaint that I receive as Mayorof Pierre; business leaders, government officials, lodge owners and private travelers tell methat they would rather drive hoursto Rapid City or Sioux Falls than take such a substantial riskthat theirflight will not

### even operate. And with such a reduced schedule, each flight becomes more critical, and its cancellation more damaging.

The Department has always recognized the great importance to the EAS program of maintaining reliable, timely service. It assumes a 98% completion factor in calculating subsidy payme.nts. It is a standard condition of EAS subsidy orders that "the carrier must complete all flights that can be safely operated." The Statute itself requires that in awarding EAS to a particular carrier, the Department consider, asthefirst criterion, "the demonstrated reliability of the applicant in providing scheduled air service." (49 U.S.C. 

### § 41733(c)(1)(A). The reason is obvious: passenger boardings at an airport will decline as soon as the flying public realizes that it can't depend on the schedules offered. This undercuts the stated goal ofthe program,to help communities develop their air service markets so as to avoid the necessity of requiring subsidy to maintain the statutorily guaranteed airservice.

While Pierre has thus far not required subsidy, the lasttwo months have seen such a shrinkage in its air service market that it will be difficult to rebuild sufficient confidence in air service to ensure a self-sufficient air service market.

We have reluctantly concluded thatthe onlything that will salvage our airservice market is forthe Departmentto declare that the service being provided by Great Lakesdoes not meet the requirements of Essential Air Service, and open a proceeding for bids to provide this service. Ifthis can be donewithout subsidy, all the better; however, given the rapidity ofthe. market's deterioration, quick action must be taken orthe Department will not be able to avoid paying subsidy for service to Pierre.

Ourcity is anxious towork with the Department to bring about the kind ofair service to which Pierre is entitled. We hope to speakwith you and your staff in the nearfuture.

Sincerely,

# '//,w~~· 

# .(.**~ ~uZ~;:ayor**  City of Pierre

Cc: Sen. Tim Johnson Sen. JohnThune Rep. Kristi Noem Kevin Schlemmer Dennis DeVany

LEGAL\18032247\1 

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