Order 20 1 4

- 1 1

- 10

Served: November 12 , 20 1 4



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 12 th day of Nov ember , 20 1 4

Essential Air Service at

ALLIANCE, NEBRASKA

CHADRON, NEBRASKA

Under 49 U.S.C. § 41731 et seq

. DOCKET DOT

- OST

- 200 0

- 8322



### ORDER REQUESTING PROPOSALS

Summary

By this O rder, the Department is requesting proposals , by December 17 , 201 4

, from carriers

interested in providing E ssential Air S ervice (EAS) at Alliance and /or Chadron

, Nebraska

, for a

new contract period beginning June 1 , 20 1 5 , with or without subsidy. (See Appendix A for

map.)

Background

By Order 201 3

- 2

- 13, issued February 11, 2013 , the Department re selected Great Lakes Aviation,

Ltd. (Great Lakes)

, to provid e EAS at Alliance and Chadron for the two

- year period ending

May 31

, 201 5 . That O rder established a combined annual subsidy rate for both communities of

$ 2,619,729 for s ervice consist ing of 1 2 nonstop or one

- stop round trips per week to Denver

International Airport (DEN) from each community

. S ervice i s provided on twin

- engine Beech

1900D aircraft with 19 passenger seats

. Currently, Great Lakes is providing Alliance and

Chadron with only 6 round trips per week using a Beech 1900D aircraft configured for 9

passenger seats. 1

Request for Proposals

As the end of the current rate term approaches, and in order to provide sufficient time to

complete the carrier

- selection process before the current contract expires, we are here requesting

proposals from carriers interested in providing service at Alliance and Chadron , with or without

subsidy support, for a new contract period beginning June 1 , 201 5 . Carriers should file their

1 From published flight schedules (November 2014) and www.flygreatlakes.com

.2

proposals no later than December 17 , 201 4 . After that date, our staff will docket the proposals

, thereby making them public

. Shortly afterwards, we will provide a summary of the proposals to

community officials and ask them to submit their final comments. We will give full

consideration to all proposals filed in a timely manner. 2

Interested carriers should prepare their proposals with every expectat ion that their initial proposal

will also be their final and only proposal. We retain the discretion to negotiate proposals with

carriers when we deem it desirable. We also retain the discretion to reject outright all

unreasonable or unrealistic proposals and solicit a new round of proposals.

The Department is here providing in terested 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. The Department expect s proposals to adequately describe the service being proposed

and th e 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 supporting data for their subsidy requests, such as p rojected block

hours, revenues and expenses. The Department strongly encourage s clear, well

- documented

proposals that will facilitate their evaluation by the affected communit ies and the Department. 3

The Department request s proposals for service consistent with what the community currently

receives, namely, two daily nonstop or one

- stop round trips (12 per week) with 19

- seat or larger

aircraft to Denver International Airport or another suitable hub with convenient connections to

the national air t ransportation system. If smaller aircraft are proposed, the Department may

consider additional frequencies than the two daily round trips described above. The Department

encourage s proposals that meet these 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 or length of contract , for example

-- with subsidy requirements that remain

competitive.

The Department will formally solicit the communit ies’ views on any service options the

Department receive s before making a long

- term carrier selection decision. The community and

air carriers are encouraged to work together in advance of the due date for proposals to craft a

service pattern th at is desirable to the communities and meets the o perational needs of the airline

submitting the proposal.

2 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide EAS

without subsidy and we determine that service can be reliably provided without such compensation, we typically do

not proceed with the car rier selection case. Instead, we simply rely on that carrier’s subsidy

- free service as

proposed.

3 In selecting a carrier to provide subsidized EAS , 49 U.S.C. 41733(c) (1) directs us to consider five factors: (a)

service reliability; (b) contractual and marketing arrangements with a larger carrier to ensure service beyond the

hub; (c) interline arrangements that the applicant has made with a larger carrier at the hub; (d) community views,

giving substantial weight to the views of the elected officials rep resenting the users ; and (e) the carrier’s plan to

market its service to the community

. In addition, the Consolidated Appropriations Act, 2014, Public Law No. 113

- 76, and continued in the Continuing Appropriations Resolution, 2015, Public Law No. 113

- 164, provides that when

selecting a carrier 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

ge neral provisions governing EAS will be included in the selection O rder as part of our authorization of subsidy for

t he selected service. Appendix B of this O rder contains those general provisions.3

Service and Traffic History

In order to assist carriers in developing traffic and revenue projections for the ir proposals, the

Department ha s provided some historical passenger data in Appendix B. For the year ende d

August 31, 2014, Alliance generated 1,601 total origin and destination passengers, or 2.6 average
daily enplanements. For the same period, Chadron generated 2,466 origin an d destination

passengers, or 3.9 average daily enplanements. It should be noted, however, that for most of

2014, both Alliance and Chadron have received less than their minimum service level due to

operational difficulties at Great Lakes. Carriers should note that pre

- 2014 passenger levels are

likely more indicative of the traffic

- ge nerating potential of these communities.

Filing Procedures

Proposals should be submitted via email to EAS@dot.gov

. Carrier proposals should be

submitted to the Department with all materials merged into a single document. In addition,

because the document will be published on Regulations.gov, each page should be formatted so as

to be easily viewed online.

Other Carrier Requirements

The Department is responsible for implementing various Feder al statutes governing lobbying

activities, drug

- free workplaces and nondiscrimination. 4 Consequently, all carriers receiving

Federal subsidy to support EAS 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. All carriers that plan to submit

proposals involvin g subsidy should submit the required certifications along with their proposals.

Interested carriers requiring more detailed information regarding these requirements, as well as

copies of the certifications, should contact the Office of Aviation Analysis a t (202) 366

- 5903.

The Department is prohibited from paying subsidy to carriers that do not submit these

documents. 5

Community and State Comments

Civic officials are welcome to submit comments on the proposals at any time. As noted earlier,

we will provi de a summary of the proposals to the civic parties and ask them to submit their final

comments shortly after December 17, 2014 , the due date for carrier proposals.

This O rder is issued under author ity delegated in 49 CFR Part 1.25 a( b ) and re

- delegated to the

Director, Office of Aviation Analysis.

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

– New restrictions 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; 49 CFR Part 27

– Nondiscrimination on the basi s of disability in programs

and activities 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

p rocurement) and government

- wide requirements for drug

- free workplace (grants).

5 The certifications are also available on the web at http://w ww.dot.gov/policy/aviation

- policy/small

- community

rural

- air

- service/essential

- air

- service

.4

ACCORDINGLY,

1. The Department request s that carriers interes ted in providing Essential Air S ervice at Alliance

and /or Chadron

, Nebraska

, submit their proposals, with or without subsidy requests, no later than

December 17 , 20 1 4 . The proposals should be emailed to EAS@dot.gov with the title “Proposal

to Provide Essential Air Service at Alliance and /or Chadron, Nebraska , Docket DOT

- OST

- 200 0

-

8322 ”

.

2. Docket DOT

- OST

- 200 0

- 8322 will remain open until further O rder of the Department; and

3. The Depart ment will serve a copy of this O rder on the mayor s and airport manager s of

Alliance and Chadron , Nebraska

, and the service list for this docket

.

Persons entitled to petition the De partment for review of this O rder under the Department’s

Aviation Economic Regulations, 14 CFR Part 385.50, must file such petitions within seven ( 7 )

days after the date of service of this O rder.

This O rder 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 on line at

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 Airlines Solutions ®.Appendix B



### Historical O&D Traffic

Alliance , NE 1

Year Month Origin Destination Total O&D

2012 8 137 127 264

9 114 127 241

10 167 156 323

11 139 170 309

12 148 163 311

2013 1 108 115 223

2 87 95 182

3 107 129 236

4 86 101 187

5 136 170 306

6 155 158 313

7 153 146 299

8 107 134 241

9 139 120 259

10 129 148 277

11 96 109 205

12 96 151 247

2014 1 41 29 70

2 23 23 46

3 11 17 28

4 32 42 74

5 45 45 90

6 46 56 102

7 53 71 124

8 31 48 79

Average Daily Enplanements YE August 21 , 201 4 : 2.6 2

1 Source: Bureau of Transportation Statistics Form 41: T

- 100 Domestic Market.

2 Average Daily Enplanements calculated by dividing total O&D passengers by 2 directio ns, and then dividing by

313 service days.Appendix B

Chadron , NE 3

Year Month Origin Destination Total O&D

2012 8 183 212 395

9 144 143 287

10 160 154 314

11 200 174 374

12 204 159 363

2013 1 137 169 306

2 138 121 259

3 169 175 344

4 147 139 286

5 246 194 440

6 198 203 401

7 229 247 476

8 213 255 468

9 248 196 444

10 197 180 377

11 120 102 222

12 193 137 330

2014 1 109 109 218

2 44 40 84

3 27 41 68

4 60 57 117

5 95 73 168

6 72 69 141

7 81 60 141

8 57 99 156

Average Daily Enplanements YE August 31 , 201 4 : 3.9 4

3 Source: Bureau of Transportation Statistics Form 41: T

- 100 Domestic Market.

4 Average Daily Enplanements calculated by dividing total O&D passengers by 2 directions, and then dividing by

313 service days.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 elements of the required service, wi thout 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 clai m 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 Dep artment 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 overf ly 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

acce ss 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 notic e 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 [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 provid e 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 file d by October 31 st ; August claims must be submitted by November

30 th , and so on.