Order: 2014-9-20 Served: September 26, 2014



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION



### OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 26 th day of September, 2014

Air Transportation to Noneligible Places

LOS ALAMOS, NEW MEXICO

Under 49 U.S.C. 41736 DOT-OST-2014-0127



### ORDER DENYING APPLICATION

Summary By this Order, the Department is denying th e application of Los Alamos, New Mexico, for inclusion in the Air Transportation to Noneligible Places (ATNEP) program.

Background

In accordance with 49 U.S.C. § 41736(a), a Stat e or local government may propose that the Department assist in providing compensation to an air carrier to provide air transportation to a community that is not eligible for Essential Air Service (EAS). The Depa rtment shall designate the community as eligible and approve a proposal for compensation if a part y is willing and able to pay 50 percent of the compensation for provi ding the transportation, an d if the Department determines the proposal to be reasonable. In de termining whether a proposal is reasonable, the Department must consider, among other things, (1 ) the traffic-generating potential of the point; (2) the cost to the Federal government of provi ding the proposed transportation; and (3) the distance from the point to the closest hub airport.

By letter dated July 14, 2014, the County Administ rator of Los Alamos County, on behalf of the city of Los Alamos (the community), requested that Los Alamos be included in the ATNEP program and that the U.S. Department of Tran sportation authorize comp ensation to be provided to an air carrier to supply air transportation to/from Los Alamos.- 2 -

Proposal of Los Alamos
The community has asked for a grant of a revenue guarantee of 50% of any shortfall, but not to exceed $250,000 per year, for a period of five years. The community has agreed to fund the balance of any revenue shortfall. In support of its proposal, the community states that it received

scheduled air service as far back as 1 948 from funding provided by the Atomic Energy Commission and generated 35,000 passe ngers in the late 1980s. Th e community lost service in 1996. In 2013, Los Alamos received a grant from the Department’s Small Community Air Service Program (SCASDP) of $272,000 to rest art commercial air service. The County contracted with Pacific Wings, LLC (d/b/a New Mexico Airlines ) to provide three daily round trips to from Los Alamos County Airport (L AM) to Albuquerque Inte rnational Sunport (ABQ)

with nine-seat Cessna Caravan aircraft at a one -way ticket price of $49. The community states that passenger levels are increasi ng and all trends are pos itive. The community cites a number of

economic and environmental benefits of the commercial air service.

Decision After carefully reviewing the community’s application to receive compensation under 49 U.S.C. § 41736(a), we have decided to deny it.

We have assessed the community’s proposal und er the criteria listed in 49 U.S.C. §
41736(a)(2). 1 In terms of traffic-generating potential , according to the co mmunity’s application, LAM generated 6,324 passengers from April 2013 through May 2014, an average of 486 per month. It appears that the co mmunity divided the to tal passengers by 13 months to get the average per month. However, it appears that the time period the community used, as reinforced by the chart in their Attachment B, comprises 14 months, not 13. For the most recent 12 months for which data are available, Los Alamos generated 5,722 inbound and outbound passengers. (See Appendix A.) In calculating enplanem ents per day for EAS purposes, longstanding program practice is to take total annual origin and destination passenge r numbers divided by two to get passengers in one direc tion (enplanements at the EAS co mmunity), and then by 313 days to get average daily enplanements at the EA S community. We do not use 365 days in our calculation because EAS is typically the e quivalent of six-day-a-week service, i.e ., reduced service on weekends. Consistent with that methodology, Los Alamos averaged 9.1 enplanements per day in the most recent year.

In addition, according to the community, Los Alam os is 97 miles from ABQ, classified as a medium hub. ABQ offers 92 weekday depa rtures to 24 airports on 7 airlines. 2 Furthermore, Santa Fe Municipal Airport (SAF) is less than 50 miles away, and it rece ives daily jet service from United Express to Denver (DEN) and American Eagle to Dallas/Fort Worth (DFW) and Los Angeles (LAX), thus, providing the community with multiple options for air service. The proximate availability of that service further inhibits the community’s ability to generate significant passenger levels.

1 In determining whether a proposal is reasonable, the Department must consider, among other things, (1) the traffic-generating potential of the point; (2) the cost to the Federal government of providing the proposed transportation; and (3) the distance from the point to the closest hub airport.

2 Based on published schedules for August 2014.- 3 -

In order to approve a community ’s application for inclusion in ATNEP, the Department must conclude that the proposal is “r easonable.” Given the community ’s proximity to two airports with scheduled jet serv ice, one being a medium hub, its current low enplanements, and our finding that the community does not have significant traffic generati ng potential, we find that the proposal is not reasonable. 3

In addition, we view the commun ity’s application in the broader context of the entire EAS program. In two recent laws, The Airport and Airway Extension Act of 2011, Pub. L. 112-27,

and The FAA Modernization and Reform Act of 2012, Pub L. 112-95, Congress enacted several reforms to the EAS program that tightened the crit eria for continued qualification as an “eligible place” (except for Alaska and Hawaii).

Thus, we deny the petition of Los Alamos for incl usion in the Air Transportation to Noneligible Places (ATNEP) program.

This Order is issued under authorit y delegated in 49 CFR part 1.56a(f).

ACCORDINGLY,

1. We deny the application of Los Alamos , New Mexico, for incl usion in the “Air Transportation to Non-eligible Place s” program under 49 U.S.C. § 41736(a);

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

3. We will serve copies of this Order on the civic officials of Los Alamos, New Mexico.

By:

SUSAN L. KURLAND Assistant Secretary for

Aviation and International Affairs (SEAL)

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

3 49 U.S.C. § 41736(a)(2).Appendix A

TRAFFIC

Los Alamos County Airport, NM (LAM) 1

Apt Year Month Uniquecarriername Enplaned pax Deplaned pax Totals

LAM 2013 4 Pacific Wings Airlines 141 58 199

LAM 2013 5 Pacific Wings Airlines 247 156 403

LAM 2013 6 Pacific Wings Airlines 257 161 418

LAM 2013 7 Pacific Wings Airlines 286 186 472

LAM 2013 8 Pacific Wings Airlines 293 209 502

LAM 2013 9 Pacific Wings Airlines 273 185 458

LAM 2013 10 Pacific Wings Airlines 227 159 386

LAM 2013 11 Pacific Wings Airlines 275 219 494

LAM 2013 12 Pacific Wings Airlines 296 204 500

LAM 2014 1 Pacific Wings Airlines 259 166 425

LAM 2014 2 Pacific Wings Airlines 254 165 419

LAM 2014 3 Pacific Wings Airlines 275 219 494

LAM 2014 4 Pacific Wings Airlines 335 200 535

LAM 2014 5 Pacific Wings Airlines 342 277 619

5,722 (Total, 12

months of traffic

‐ June 1, 2013,
through May 31,
2014)

9.1 enplanements

per day (June 1,

2013, through

May 31, 2014)

5,722 divided by

313 divided by 2

1 Department of Transportation T-100 Market data.Appendix B

0 100 200 300 400 500 600 700

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr MayAXISTITLE

ENPLANED PASSENGERS 

### Attachment A: Los Alamos Airline Service Emplanements

2013

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