Order: 2013-6-3

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 4th day of June, 2013

Docket DOT-OST-1997-2605

ORDER TEMPORARILY EXTENDING CURRENT SUBSIDY

Summary

By this Order, the Department is extending the contract established under Order 2011-1-27, 

issued on February 3, 2011, for Silver Airways, Inc. (formally Gulfstream 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 by the Department.

Background

By Order 2011-1-27, 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.
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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 have had an average subsidy per passenger of less than $1,000 

during the most recent fiscal year, as determined by the Secretary of Transportation.2

Order to Show Cause

By Order 2013-3-13, 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. § 41731(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 rates 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 2013-3-13, 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, the Department received a significant number of letters3

from various concerned parties objecting to the Department’s tentative decision to terminate 

EAS at Lewistown and Miles City, Montana, including Governor Steve Bullock, 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 receive continuous, 

uninterrupted service and that Silver will be compensated, we will temporarily extend the EAS 

contract awarded to Silver as established by Order 2011-1-27, issued on February 3, 2011, until 

such time as the case has been fully resolved. 

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

ACCORDINGLY,

1. The Department requires Silver Airways, Inc. to continue to provide Essential Air Service at 

Lewistown, Miles City, Glasgow, Glendive, Havre, Sidney, and Wolf Point, Montana, at service 

levels and subsidy rates as established in Order 2011-1-27, until further notice;

2. We direct Silver Airways, Inc. to retain all books, records, 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 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 under the terms of this Order; 

3. 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 International 

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 of this document is available online at:

http://www.regulations.gov/