Order 20 1 2

- 2

- 7

Served: February 9 , 20 1 2



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 9 th day of February , 20 1 2

ORDER PROHIBITING TERMINATION OF SERVICE AND REQUESTING PROPOSALS

Summary By this O rder, the Department is (a) prohibiting Pinnacle Airlines, Inc., Inc. and Atlantic Southeast Airlines, Inc., Inc. d/b/a Delta Connection ( Delta ) from terminating its subsid y

- free

service at Greenbrier/White Sulphur Springs

, West Virginia (Greenbrier)

, for 30 days beyond the

end of its 90

- day notice period, and (b) requesting long

- term proposals from ca rriers interested in providing Essential Air S ervice (EAS)

, with or without subsidy, by March 16 , 2012

. (See Appendix A for a map .)

Backg round

Gulfstream International Airlines d/b/a Continental Connection (Gulfstream) provided subsidized EAS at Greenbrier for a number of years, most recently through September 30, 2010,

pursuant to Order 2008

- 5

- 3

. Gulfstream was rebranded as Silver Airways effective

December 15, 2011. In anticipation of the end of that contract

, we would typically have issued a Request for Proposals in late spring of 2010 for a new contract. However, Atlantic Southeast Airlines, Inc. and Pinnacle Airlines, Inc. , both operating as Delta, had announced their intent to inaugurate subsidy

- free service from Greenbrier Valley Airport to both Atlanta Hartsfield Jackson International Airport and New York LaGuardia Airport (LaGuardia) . As a result, we Essential Air Service at

GREENBRIER/WHITE SULPHUR SPRINGS,

WEST VIRGINIA

Under 49 U.S.C. 41731 et seq

. Docket DOT

- OST

- 2003

- 15553- 2

-

issued Order 2010

- 5

- 22, M ay 19 , 2010, stat ing that th is level of service met Greenbrier’s EAS requirements

, and that we would rely on Delta’s subsidy

- free service and not request proposals. 1

Currently, Delta provides seven (7) weekly nonstop round trips between Greenbrier and New York JFK International Airport (JFK) and seven ( 7 ) weekly nonstop round trips between Greenbrier and Atlanta Hartsfield Jackson International Airport using 50

- passenger CRJ

- 200

aircraft

. Delta moved the Greenbrier

- LaGuardia round trip to JFK on O ctober 31, 2010. In

addition , Gulfstream provides one nonstop round trip on Saturday and one on Sunday between Greenbrier and Cleveland Hopkins International Airport on a subsidy

- free basis.

On December 1 6 , 2011, Delta filed a 90

- day notice to terminate a ll of its service at Greenbrier,

effective March 1 5

, 2012

.

Comments In a December 19 letter from Delta, the carrier confirms its December 16 filing of a 90

- day termination notice for its Greenbrier service, citing “heavy losses” and “booked load factors f or January” of “24% on the Atlanta service and 6% on the JFK service.” To mitigate losses, it states it will offer 10 weekly flights between Atlanta and Greenbrier on a one

- stop basis via Roanoke, Virginia.

An objection was filed on January 4 on behalf of Greenbrier Hotel Corporation. The objection requests that the Department issue an Order prohibiting termination of Delta’s service. It also suggests a reasonable level of essential air service as two inbou nd and two outbound flights a day, seven days per week, with an additional inbound and outbound flight on weekend days. Further, the service should be to Atlanta (ATL) and LaGuardia “to ensure access to major hub cities.” The objection asserts that Delta ’s reason for termination, specifically that it is “no longer economical” is flatly incorrect, noting a Revenue Guaranty Agreement between Delta and Justice Family Group, LLC dba The Greenbrier. It also states that there is currently a dispute regarding

t hat agreement between Delta and Justice Family Group.

Decision The Department’s FY 2012 appropriation (P.L. 112

- 55) limited eligibility in the EAS program in

the lower 48 states to certain communities , including those that received subsidized EAS “at any time between September 30, 2010, and September 30, 2011, inclusive.” Greenbrier is eligibl e for subsidized service because it was receiving service on a subsidized basis from Gulfstream on Septemb er 30, 2010

.

Greenbrier’s EAS is defined in Order 85

- 8

- 77, August 26, 1985, as two daily one

- stop round trips to Charlotte or Washington, D.C/Baltimore, except during the winter season, when service may be provided six day s per week.

Because Delta ’s proposed termination of service would leave Greenbrier/White Su lphur Springs

wi th only Gulfstream’s two round trips a week, we must prohibit the carrier from terminating

suc h service at the end of its 90

- d ay notice period and request proposals for replacement service

.

1 Consistent with program practice, we allowed the contract with Gulfstream to run its term and expire as scheduled on September 30, 2010.- 3

-

W e will require Delta to maintain at least 10 round trips per week to a large or medium hub for

an initial 30

- day period after the original 90

- day notice period

, i.e. , through April 14 , 2012

. 2 As Delta stated in its December 19 letter, it plans to operate these 10 round trips per week to

Atlanta. Fu rthermore, we will require Delta to continue to maintain service at the communit y for

successive 30

- day periods until we have completed processing the carrier replacement case and the new carrier has actually started service. Delta’s 10

- round

- trip

- per

- wee k pattern should continue through May 1, the traditional start of Greenbrier’s summer season. Delta’s 10 round trips per week, plus Gulfstream’s 2 round trips per week w ill provide Greenbrier with 12 round trips per week. Although Charlotte and Washingto n, D.C./Baltimore are Greenbrier’s stated EAS hubs, Atlanta and Cleveland will continue to provide access to hub airports, providing access to the national air transportation system.

Request for Proposals Carriers interested in filing proposals, with or without subsidy requests, should file them no later

than March 16, 2012 . At the end of that period, we will docket the proposals, thereby making them public, and direct each carrier to serve a copy of its p roposal on the civic parties and other applicants. Shortly afterwards, we will provide a summary of the proposals to the communi ty
officials and ask them to submit their final comments. We will give full consideration to all proposals that are timely filed. 3

Interested carriers should prepare their proposals with every expectation that their initial proposals will represent their final and only proposals. However, we retain the discretion to negotiate proposals with carriers when we deem it desirable ; in such cases, of course, we will give all applicants the same opportunity. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and re

- solicit a new round of proposals. However, negotiation or rejection are only o ccasional exceptions to the rule.

We are here providing interested carriers with some basic information to serve as guidance when they prepare their proposals, but we will not prescribe a precise format for their proposals. We expect proposals to adequat ely describe the service being proposed and the annual amount of subsidy being requested. The applicants can make their own judgments as to the level of detail they wish to present; however, they might want to include proposed schedules as well as

support ing data for their subsidy requests, such as projected block hours, revenues and expenses. We strongly encourage clear, well

- documented proposals that will facilitate their evaluation by

the affected communit y and the Department. 4

2 This level of service, coupled with Gulfstream’s two round trips a week, will provide the community with 12 round trips a week during the winter season and 14 round trips a week during the summer season.

3 Carriers should not expect the Department to ac cept late filings. In cases where a carrier proposes to provide Essential Air Service without subsidy and we determine that service can be reliably provided without such compensation, we typically do not proceed with the carrier

- selection case. Instead, we simply rely on that carrier’s subsidy

- free service as proposed.

4 49 U.S.C. 41733(c)(1) directs us to consider four factors in selecting a carrier to provide subsidized Essential Air Service: (1) service reliability; (2) contractual and marketing arran gements with a larger carrier at the hub; (3) interline arrangements with a larger carrier at the hub; and (4) community views. In addition, the Consolidated Appropriations Act, 2008, Public Law 110

- 161, states that when selecting a carrier to provide Ess ential Air Service, the Department may consider the carriers’ relative subsidy requirements. Interested carriers should also be aware- 4

-

With respect to Greenbr ier

, if 15

- seat or larger aircraft are proposed, we expect proposals consisting of t wo daily round trips (1 4 total per week) in the summer season (roughly May 1 through October 31) and two round trips each weekday and weekend (12 total per week) in the

win ter season (roughly November 1 through April 30) to Atlanta, Charlotte, Cleveland, Washington, D.C, or a nother suitable hub airport with airline connections to the national air transportation system

. If aircraft seating fewer than 15 passengers are propos ed, we would consider subsidizing additional frequencies

. 5 The com munit y and air carriers are encouraged to work together in advance of the due date for proposals to craft service pattern s that are desirable to the community and meet the operational needs of the airline interested in submitting a proposal

.

We encourage proposals that meet th e se requirements in an efficient manner. Carriers are also welcome to propose more than one service option, if they choose; they need not limit themselves to those requirements if they envision other, potentially more attractive service possibilities

-- different hubs, for example

-- with subsidy requirements that remain competitive.

Service and Traffic History In order to assist interested carriers in developing traffic and revenue projections for their service proposals, we have summarized some historical origin

- destination traffic in Appendix B. For the

most recent 12

- month period, end ed September 30, 2011

, there were 4 5.4 enplaned passengers per day at Greenbrier

. 6

Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces, and nondiscrimination. 7 Consequently, all carriers receiving Federal subsidy for essential air service must certify that they are in compliance with Department regulations regarding drug

- free workplaces and nondiscrimination, and those carriers whose subsidies exceed $100,000 over the life of the rate term must also certify that they are in compliance with the regulations governing lobbying activities. Because the Department is prohibited from paying subsidy to carriers that do not submit these documents, all carriers that plan to submit proposal s involving subsidy should be aware that the selected carrier will be required to complete the required certifications. Interested carriers requiring more detailed

that our general provisions governing Essential Air Service will be included in the selection order as part of our

author ization of subsidy for the selected service. Appendix C of this Order contains those general provisions.

5 Since the EAS program was first reauthorized in 1988, most EAS communities were guaranteed to receive service

with 15

- seat or larger aircraft. Ho wever, in the Department’s FY 2012 appropriation (Consolidated and Further Continuing Appropriations Act, P.L. 112

- 55, November 18, 2011), Congress repealed the 15

- seat guarantee, although communities are still entitled to service with twin

- engine aircraft

. 6 Enplaned passengers per day is calculated by adding enplanement and deplanements totals f rom Appendix B, then dividing by 313 (days), then dividing by 2

. 7 The regulations applicable to these areas are: (1) 49 CFR Part 20

-- New restrictions on lob bying; (2) 49 CFR Part 21

-- Nondiscrimination in federally

- assisted programs of the Department of Transportation

-- Effectuation of title VI of the Civil Rights Act of 1964; 49 CFR Part 27

-- Nondiscrimination on the basis of disability in programs and a ctivities receiving or benefiting from Federal financial assistance; and 14 CFR Part 382

-

- Nondiscrimination on the basis of disability in air travel; and (3) 49 CFR Part 29

-- Government

- wide debarment and suspension (non

- procurement) and Government

- wide requirements for drug

- free workplace (grants).- 5

-

information regarding these requirements should contact the Office of Aviation Analysis at (202) 366

- 5903. 8

Community and State Comments

The communit y and S tate are welcome to submit comments at any time. As noted above, w e encourage prospective applicants to contact the communities before they submit their proposals so that they can tailor them to the communit y ’ s needs, as they will not be able to amend them after the due date. As noted earlier, we will provide a copy of the proposals to the civic parties and ask them to submit their final comments shortly after March 16, 2012

, the due date for carrier proposals.

This order is issued under authority delegated in 49 CFR 1.56a(f).

ACCORDINGLY, 1. We prohibit Pinnacle Airlines, Inc. and Atlantic Southeast Airlines, Inc. d/b/a Delta

Connection from suspending service at Greenbrier/White Sulph ur Springs

, West Virginia

, at the

end of its 90

- day notice period, and require it to maintain service at 1 0 round trips a week to a medium or large hub airport with 50

- seat regional jets for an initial 30

- day period through April 14

, 2012 , or until a carrier c apable of providing reliable Essential Air S ervice actually begins service, whichever is first; 9

2. We direct Pinnacle Airlines, Inc. and Atlantic Southeast Airlines, Inc. d/b/a Delta Connection

to retain all books 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 serv ic e date of this Order or until the Department indicates that the records may be destroyed, whichever is earlier. Copies of logs for aircraft sold or disposed of must be retained. The carrier may forfeit its compensation for any claim that i s not sup ported under the

terms of this O rder;

3. We request that ca rriers interested in providing Essential Air S ervice at Greenbrier/White Sulphur Springs

, West Virginia , submit their proposals, with or without subsidy requests, no

later than March 16, 2012 . The proposals should be e

- mailed to EAS@dot.gov

, with the subject

line “Proposal to Provide E AS at Greenbrier

, W V

, D O T

- OST

- 20 03

- 15553 ; ” 10

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

8 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.

9 In accordance with 49 U.S.C. 41734(c), we will extend Delta’s service obligation for successive 30

- day periods as necessary until replacement service actually begins.

10 Questions regarding filings in response to this order may be directed to Kevin Schlemmer at (202) 366

- 3176. Proposals should be e

- mailed to k evin .schlemmer@dot.gov , and to dennis.devany@dot.gov , or faxed to their attention at: (202) 366

- 7638.- 6

-

5. We will serve copies of this order on the M ayors of Lewisburg and White Sulphur Springs, the airport manager of Greenbrier Valley Airport

, Pinnacle Airlines, Inc.

, Atlantic Southeast Airlines, Inc. , Delta Air Lines, and the persons listed in Appendix E

.

By:

SUSAN L. KURLAND Assistant Secretary for Aviation and

International Affairs

(SEAL)

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



## AREA MAP

This map is provided by Sabre ® AirVision TM Profit Essentials and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Appendix B

Traffic History 1

Greenbrier/White Sulphur Springs, WV (LWB)

Quarter Stn Inbound Outbound Totals

1 LWB 672 688 1,360

2 LWB 1,616 1,559 3,175

3 LWB 2,568 2,613 5,181

4 LWB 1,537 1,563 3,100

1 LWB 531 518 1,049

2 LWB 1,389 1,384 2,773

3 LWB 1,650 1,686 3,336

4 LWB 983 992 1,975

1 LWB 565 574 1,139

2 LWB 1,612 1,518 3,130

3 LWB 5,640 5,757 11,397

4 LWB 4,003 4,185 8,188

1 LWB 2,705 3,003 5,708

2 LWB 4,510 4,557 9,067

3 LWB 5,115 5,063 10,178

Average daily enplanements at LWB (12

- months ended 9/30/2011) 2

- 45.4

1 Source

– T

- 100 Market Report , Passengers in Scheduled Passenger Service

2 Average daily enplanements= total t raffic for the most recent 12

- month period (33,141 passengers) divided by 365 service days divided by 2.Appendix C

Example of General Terms and Conditions for Essential Air Service

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 ele ments 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 no t 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 j eopardize 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 rece ive 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 sa fely 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

progr am 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 specif ic 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 for egoing paragraph.

Funds are not currently available for performance under this solicitation beyond [DATE]

. The Government’s obligation for perform ance under this solicitation beyond [DATE] , is contingent upon the availability of appropriated 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 [DATE] , until funds are made availa ble to the Department for performance. If funds are not made available for performance beyond [DATE] , the carrier will receive notice in writing by the Department.

All claims for payment must be submitted within 60 days of the last day of service provide d under this order

.Appendix D

Scheduled Air Carriers, Contiguous US and Puerto Rico

Air Choice One Airlines, Shane Storz Horizon Air, Mike McQueen Air Greco/Wings Air Horizon Air, Jeff Cole
Air Sunshine, Inc. ICEPR, Luis Irizarry
Air Sunshine, Mirmohammad Adili Intrepid Internatl Air, Rick Eyk
Air West, Inc., John Raatz Island Air Charters, Linda House Air Wisconsin, Annette Daly Jet Air, Daniel Wolford
Air Wisconsin, Jim Rankin Kenmore Air, Tim Brooks
Airline Associates, Bill Mishk McCall Aviation, Dan Scott
Alaska Airlines, Jeff Cole McCall Aviation, Michelle Alaska Airlines, Sandy Sinick Mesaba, John Spanjers Allegiant Air, Brian Davis Mesaba, Max Shemesh
American Airlines, Carl Nelson Michigan DOT, Matt Brinker American Eagle, Gary Foss MidStar Airlines, Jeffrey Fonner American Eagle, Robert Emrich Midwest Airlines, Greg Aretakis American Eagle, Patrick Swift MN Aviation, Jose Maldonado
Atlantic Southeast, Jon Lindlief Multi Aero, Darnea Atlantic Southeast, Roger Weston Multi Aero, Shane Storz Aviation Express, Brad Shriner Northern Air Cargo, David Karp Aviation Technologies/Charter Air Transport Northern Air Cargo, Eric Van Andel Bemidji Aviation, Cori Rude NYDC, Henok Araya Bemidji Aviation, Arlen Rinkenberger OST, Brian Swanson Cape Air, Andrew Bonney OST, Brooke Chapman Cape Air, Dan Wolf OST, Dennis DeVany Cape Air, J. Flaherty OST, Kevin Adams Chautauqua, Josh Pascoe OST, Kevin Schlemmer Classic Aviation, Tony Henderson OST, Michael Martin Capital Aviation, Mike Colgan OST, Scott Faulk Colgan Air, Kevin Scott Pacific Aviation Group, Craig Garrick Colgan Air, Mike Colgan Pacific Aviation Group, Ron Pye CommutAir, Andy Price Pacific Wings, Frank Ford

Commut Air, Joel Raymond Pacific Wings, Greg Kahlstorf Consultant, Michael Mooney PenAir, Danny Seybert Consultant, Robert Silverberg PenAir, Scott Bloomquist
Consultant, Jeff Hartz Pinnacle Airlines, Inc. , Jennifer Gammill
Consultant, Ron McNeill Pinnacle Airlines, Inc. , Megan Rosia
Continental, Bruce Keiner Pinnacle Airlines, Inc. , Phil Reed
Continental, Dan Weiss Planemasters, Inc. John Kessler Continental, Lorry Halloway Planemasters, Inc. Paul Berliner Delta, Anthony Canitano Planemasters, Inc. Todd DeSimone
Delta, Dan Shuman Raytheon, Mike Scheidt
Delta, Dana Debel Rectrix Aviation, Scott LaForge
Delta, Jeff Davidman Saab Group, Polly Prelinger Delta, Jeff Morgan Scenic, Mary Schneider Delta, Joe Esposito Scenic, Mitzi Daines
Delta, Kristal Murphy Seaborne Airlines, Shawn Lewis Delta, Sally Veith SeaPort Airlines, EAS Mailbox
Delta, Sascha Vanderbellen SeaPort/Wings of Alaska, Rob McKinney Delta, Stephen A. Hedden Shuttle America, Jerry Balsano DHS, Bill Ragan SkyWest, Brad Rawso n DHS, David Bernier SkyWest, Eric Christensen

Dorado Jets SkyWest, Michael Thompson
Dorado Jets, Mark McKenna Sovereign Air, Bob Karns
Era Aviation, Lori Goodman Tatonduk, Robert Everts
Executive Airlines, Kate Soled Tatonduk, Robert Ragar

Frontier Flying, Bob Hajducovich Tradewind, Eric Zipkin
Frontier Airlines, Daniel Shurz TransStates, Fred Oxley

Frontline Aviation TransStates, Gerry Wigmore
Gem Air, Dan Schroeder Transport Azumah, Joel Anabilah

- Azumah
Gem Air, JoAnn Wolters United, Alicia Gabriel
Great Lakes, Chuck Howell United, James Starnes Great Lakes, Doug Voss US Airways, Benjamin Slocum
Gulfstream, Dave Hackett US Airways, Howard Kass Gulfstream, Mickey Bowman US Airways, Jason Reisinger Gulfstream, T. Cooper Warbelows Air Ventures, Art Warbelow Horizon Air, Jennifer Thompson