O rder: 2014

- 2

- 4

Served: February 5, 2014



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 5th of February , 20 1 4

ORDER REQUESTING PROPOSALS

Summary By this O rder, the Department is requesting proposals from air ca rriers interested in providing

E ssential A ir S ervice (EAS) at Crescent City, California

, for a new contract period beginnin g August 1, 201 4 , with or without subsidy

. (See Appendix A for a map). Air c arriers should file their proposals no later than March 13

, 2014

.

Background
By Order 2012

- 5

- 21 (May 23

, 2012 ), the Department re

- selected SkyWest Airlines, operating

as United Express (SkyWest) to provide EAS at Crescent City from August 1, 2012, through July 31, 2014 at an annual subsidy rate of $1,996,959. Under that Order, SkyWest provides Crescent City with 14 nonstop round trips per week to San Francisco International Airp ort (San Francisco) using 30

- passenger Embraer 120 Brasilia (EMB120) aircraft.

The complet e public file for EAS at Crescent City may be accessed online through the Federal Dockets Management System at: www.regulat ions.gov by entering “DOT

- OST

- 1997

- 2649 ” in the “Search for Rules, Comments, Adjudications, or Supporting Documents” field.

Request for Proposals

As the end of the current contract approaches, the Department is requesting proposals from air

carriers inte rested in providing EAS at Crescent City with subsidy support if necessary , for a new contract period beginning August 1

, 201 4

. Carriers should file their proposals no later

than March 13

, 20 14

. Staff will the n docket the proposals, thereby making them p ublic

. Shortly afterwards, we will provide a summary of the proposals to the communit y and ask

Essential Air Service at

CRESCENT CITY, CALIFORNIA

Under 49 U.S.C. § 41731 et seq

. Docket DOT

- OST

- 1997

- 2649- 2

-

them to submit their final comments. We will give full consideration to all proposals that are timely filed. 1

Interested air carriers should prepare their pro posals 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 applican ts 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 and rejection are only occasional exceptions to the rule.

We are here provi ding 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. Air carrier proposals should be submitted to the Department with all materials

mer ged into a single document. In addition, because the document will be published on www.regulations.com

, each page should be formatted to be viewed online. We expect proposals to adequately describe the service b eing 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, we recommend they include information concerning proposed

schedules and projected block ho urs . In addition, applicants are urged to provide financial data supporting their subsidy requests, including information on their projected expenses and

revenues. We strongly encourage clear, well

- documented proposals that will facilitate their

evaluati on by the affected communit ies and the Department. 2

Proposals should provide sufficient capacity to accommodate historical levels of traffic. In order to assist air carriers in developing traffic and revenue projections for their proposals, we have provi ded a summary of historical passengers in Appendi x B. During the year ended September 30

, 2013, Crescent City averaged 40 enplanements per day. The Department expects proposals that are co nsistent with what the community currently receives, with service to a large

- or medium

- hub airport that provides numerous connecting opportunities to the national air transportation system. Specifically, air carriers should propose two daily round trips (14 a week) with 30

- passenger or larger aircraft. For air carrier s proposing service with

15

- seat to 29

- seat aircraft, we expect three daily roun d trips (21 a week). We would also

1 Carriers should not expect th e Department to accept late fil ings. In cases where a carrier proposes to provide

EAS without subsidy and we determine that basic EAS, as required by 49 U.S.C. § 41732, can be reliably provided without such compensation, we typically w ill not proceed with the carrier

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

- free service as proposed.

2 In selecting a carrier to provide subsidized EAS for an eligible place not in Alaska, 49 U.S.C. § 41733(c)(1)

directs us to cons ider five factors: (a) service reliability; (b) contractual and marketing arrangements with a larger carrier at the hub; (c) interline arrangements with a larger carrier at the hub; (d) community views, giving substantial weight to the views of the electe d officials representing the users; and (e) whether the carrier has included a plan in its proposal to market its service to the community. In addition, the Consolidated Appropriations Act, 2014, Public Law No. 113

- 76, provides that when selecting a carri er 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. Interested carriers should also be aware that our general provisions governing

Essential Air Service will be included in the selection Order as part of our authorization of subsidy for the selected service. Appendix C of this Order contains those general provisions.- 3

-

consider proposals with 8/9

- seat aircraft and additional frequencies. Air c arriers are also welcome to propose more than one service option , if they choose. T hey also need not limit

themselves to the se requirements if they envision other, potentially more attractive service possibilities

-- different hubs or length of contract, for example

-- with subsidy requirements that remain competitive

.

Community Comments The community is welcome to submit comments at any time. We encourage prospective applicants to contact the community before they submit their proposals so that they can tailor them to the community’s needs, as they will not be able to amend them after the due date. As noted earlier, we will provide a summary of the proposals to the civic parties shortly after the deadline for carrier proposals, and ask them to submit their final comments.

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

- free workplaces, and nondiscrimination. 3 Consequently, all carriers receiving Federal subsidy for EAS must certify that they are in compliance with Department regu lations regarding drug

- free workplaces and nondiscrimination, and those carriers whose subsidies exceed $100,000 over the life of the contract must also certify that they are in compliance with the regulations governing lobbying activities. Because the De partment is prohibited from paying subsidy to carriers that do not submit these documents, all carriers that plan to submit proposals involving subsidy should be aware that the selected carrier will be required to complete the required certifications. Int erested carriers requiring more detailed information regarding these requirements should contact the Offic e of Aviation Analysis at (202) 366

- 5903. 4

This Order is issued under authority delegated in 49 CFR Part 1.25a(b) and re

- delegated to the Director, O ffice of Aviation Analysis.

ACCORDINGLY, 1. We request that carriers interested in providing Essential Air Service at Crescent City, California, submit their proposals, with subsidy support if necessary , no later than

March 13

, 20 14 . The proposals shoul d be e

- mailed to: michael.f.martin@dot.gov with the

title “Proposal to Provide E AS at Crescent City, California ”; 5

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

-- New Re strictions on Lobbying; (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; (3) 49 CFR Part 27

-- Nondiscrimination on the Basis of

Disabil ity in Programs and Activities Receiving or Benefiting from Federal Financial Assistance; (4)

14 CFR Part 382

-- Nondiscrimination on the Basis of Disability in Air Travel; and (5) 49 CFR Part 29

-- Government

- Wide Debarment and Suspension (Non

- Procurement ) and Government

- Wide Requirements for Drug

- Free Workplace (Grants).

4 The certifications are also available on the web at http://www.dot.gov/p olicy/aviation

- policy/small

- community

rural

- air

- service/essential

- air

- service

. 5 Questions regarding filings in response to this O rder may be directed to Mr. Michael Martin at (202) 366

- 6494

or michael.f.ma rtin@dot.gov

.- 4

-

2. Th is docket will remai n open until further O rder of the Department; and

3 . We will se rve copies of this O rder on the mayor of Crescent City, California

, the airport

director of Crescent City Border Coast Regional Airport , and the service list for this docket.

Persons entitled to petition the Department for review of this Order under the D epartment’s Regulations, 14 CFR Part 385.31(a), 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:

TODD M. HOMAN

Director Office of Aviation Analysis (SEAL) An electronic version of this document is available

o nline at www.regulations.gov

.Appendix A

AREA MAP

Maps generated by the Great Circle Mapper

- copyright © Karl L. Swartz

.Appendix B

Crescent City, CA

Quarter Year Deplanements Enplanements Total Traffic Enplanements per Day

4 2009 3,048 3,123 6,171 39

1 2010 2,334 2,330 4, 664 30

2 2010 3,847 3,930 7,777 50

3 2010 4,390 4,335 8,725 55

Annual

Totals 13,619 13,718 27,337 44

4 2010 3,770 3,879 7,649 48

1 2011 2,707 2,658 5,365 35

2 2011 3,628 3,761 7,389 47

3 2011 4,107 3,960 8,067 51

Annual

Totals 14,212 14,25 8 28,470 45

4 2011 3,666 3,627 7,293 46

1 2012 2,959 2,891 5,850 38

2 2012 3,085 3,526 6,611 42

3 2012 3,383 3,624 7,007 44

Annual

Totals 13,093 13,668 26,761 43

4 2012 3,114 3,267 6,381 40

1 2013 2,464 2,906 5,370 35

2 2013 3,032 3, 307 6,339 41

3 2013 3,628 3,561 7,189 46
12,238 13,041 25,279 40Appendix 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

conformanc e 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 add ition, 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 scop e 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 m ay 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 paym ent 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 s tipulated 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 mu tually agreed to in writing by the Department and carrier do not constitute a total or partial reduction or cessation of payment.

Funds may not be available for performance under this Order beyond [DATE]. The Government’s obligation for performance under this Order beyond [DATE], 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 [DATE], until funds are made available to the Department for performance. If sufficient funds are not made available for performance beyond [DATE] , the Department will provide notice in writing to the carrier.

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.

All claims for payment, including any amended cl aims, 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.