Order: 2013

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Served: June 4, 2013



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 4 th day of June , 20 1 3

Docket DOT

- OST

- 1997

- 2605

ORDER TEMPORARILY EXTENDING CURRENT SUBSIDY

Summary By this Order, the Department is extending the contract established under Order 2011

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, issued on February 3, 2011 , for Silver Airways , Inc. (formally Gulf stream International Airlines) (“Silver”)

, to provide Essential Air Service (“EAS”) operations at Lewistown, Miles City, Glasgow, Glendive, Havre, Sidney, and Wolf Point, Montana, from June 1, 2013, until further

notice b y the Department.

Background By Order 2011

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- 27, the Department selected Silver to provide subsidized EAS with 19

- passenger Beechcraft B

- 1900D aircraft at the above communities, for the two

- year period ending May 31, 2013. The level of service and subsidy levels for each community under that contract is

as follows:

Lewistown $1,325,733 12 RTs per week Miles City $1,621,821 12 RTs per week Glasgow $1,166,049 12 RTs per week

Glendive $1,193,391 12 RTs per week

Havre $1,162,329 12 RTs per week Essential Air Service at

LEWISTOWN, MONTANA MILES CITY, MONTANA GLASGOW, MONTANA GLENDIVE, MONTANA HAVRE, MONTANA SIDNEY, MONTANA WOLF POINT, MONTANA

under 49 U.S.C. 41731 et seq.- 2

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Sidney $2,932,152 17 RTs per week

Wolf Point $1,502,378 12 RTs per week

The complete public file for EAS at each of the above Montana communities may be accessed online through the Federal Dockets Management System at: http://www.regulations.gov by entering “DOT

- OST

- 1997

- 2605” in the “SEARCH for: Rules, Comments, Adjudications or Supporting Documents:” field.

Legislative Changes The Federal Aviation Administration (“FAA”) Modernization and Reform Act of 2012 (Public

Law 112

- 95), signed into law on February 14, 2012, amended the definition of “eligible place” for the purpose of receiving EAS. 1 The amendment, among other things, states that to be eligible, a community must h ave had an average subsidy per passenger of less than $1,000 during the most recent fiscal year, as determined by the Secretary of Transportation

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Order to Show Cause By Order 2013

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- 13, issued on March 28, 2013, the Department tentatively determined to terminate the eligibility of Lewistown and Miles City under the EAS program. Our tentative decision was based on the statutory requirement that the average subsidy per passenger must be less than $1,000 during the most recent fiscal year per 49 U.S.C. § 4 1731(a)(1)(C).

For the most recent fiscal year (FY 2012), Silver transported 660 total passengers at Lewistown and 694 total passengers at Miles City at annual subsidy rate s of $1,325,733 and $1,621,821, respectively. Thus, the corresponding average per passenger subsidy for FY 2012 is $2,009 at Lewistown, and $2,337 at Miles City. Order 2013

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, directed all interested parties to show cause by April 17, 2013, as to why the Department should not make final its tentative findings

and conclusions.

In response to the show cause Order, t he Department received a significant number of letters 3 from various concerned parties objecting to the Department’s tentative decision to terminate EAS at Lewistown and Miles City, Montana, including Governor Steve Bullo ck, elected community officials, County Commissioners, multiple civic organizations, travel and tourism groups, small business owners, and concerned citizens. 4

Decision Silver’s current EAS contract for all seven communities expires on May 31, 2013. The show

cause Order is currently under review , and we may not issue a final decision by May 31, 2013. Therefore, in order to ensure that the communities will continue to re ceive continuous, uninterrupted service and that Silver will be compensated, we will temporarily extend the EAS contract awarded to Silver as established by Order 2011

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- 27 , issued on February 3, 2011, until

such time as the case has been fully resolved

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1 See 49 U.S.C. § 41731.

2 Communities in Alaska and Hawaii are exempt.

3 The Department also received Resolution No. 3811 from the City of Lewistown requesting the Secretary of Transportation delay suspension of EAS service at Lewistown.

4 The Department also received several letters in support of our tentative decision.- 3

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

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ACCORDINGLY,

1. The Department require s Silver Airways, Inc. to continue to provide Essential Air Service at Lewistown, Miles City, Glasgo w, Glendive, Havre, Sidney, and Wolf Point, Montana , at service levels and subsidy rates as established in Order 2011

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- 27, until further notice;

2. We direct Silver Airways, Inc

. to retain all books, records, and other source and summary

documentation to s upport claims for payment, and to preserve and maintain such documentation

in a manner t hat readily permit s its audit and examination by representatives of the Department.

Such documentation shall be retained for seven years from the issuance date 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 air carrier may forfeit its compensation for any claim that is not supported u nder the terms of this Order;

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

4. We will serve copies of this Order on the mayors of Lewistown, Miles City, Glasgow, Glendive, Havre, Sidney, and Wolf Point, Montana, and the airport managers of Lewistown Municipal Airport, Miles City Airport/Frank Wiley Field, Wokal Field/Glasgow Interna tional Airport, Dawson Community Airport, Havre City

- County Airport, Sidney

- Richland Municipal Airport, Wolf Point International Airport, and the service list for this docket.

By:

SUSAN L. KURLAND Assistant Secretary for Aviation

and International Affairs

(SEAL)

An electronic version o f this document is available online at : http://www.regulations.gov/