Orde r 2011-1-2 7 Served : February3 , 201 1 ^s^ ^ 

### f^^^mr

^ UNITE D STATE S O F AMERIC A g ^ H 5 DEPARTMEN T O F TRANSPORTATIO N %\^^^ ^ OFFIC E O F TH E SECRETAR Y ^^^^rfo^^" ^ WASHINGTON , D.C .

Issue d b

ythe Departmen t o f Transportatio n O n the 31s t da

yo f January , 201 1 Essentia l Ai rServic e a t GLASGOW , MONTAN A GLENDIVE , MONTAN A HAVRE , MONTAN A LEWISTOWN , MONTAN A MILE S CITY , MONTAN A SIDNEY , MONTAN A WOL F POINT , MONTAN A Under49U.S.C . 4173 1 etseq . Docke t DOT-OST-1997-260 5

ORDE R SELECTIN G CARRIE R AN D SETTIN G FINA L SUBSID Y RATE S Summar y B y this order , w e ar e selectin g Gulfstrea mInternationa l Airline s (Gulfstream) , t o provid e subsidize dessentia l ai r

servic e (EAS ) with 19-passenge r Beechcraf

t B-1900 D aircraf

t a t Glasgow , Glendive , Havre . Lewistown , Mile s City , Sidne y an dWol f Point , Montana , fo r

a two-year perio dbeginnin g whe n th e carrie r inaugurate s ful

l EA S a t al l seve n communitie s throug h th e en do f

th e 24 ' month thereafter , a t acombine dannua l subsid y rat e o f $10,903,854. ' (Se e Appendi x A fo r amap. ) Backgroun d B y Orde r 2007-12-22 , Decembe r

21 , 2007 , th e Departmen t selecte dGrea t

Lake s Aviation , Ltd. , Inc . (Grea t

Lakes) , operatin g a s both aFrontie r an dUnite dAirline s code-shar e partner , t o provid e subsidize dEA S a t th e seve n Montan acommunities , utilizin g 19-sea t Beech
1900 D aircraft , for

atwo-year

perio da t acombine dannua l subsid y rate of $8,201,992 . Great Lakes ' origina l proposa l wa s fo r servic e t o Billing s wit

h th e prospec t

o f late r ^hangin g th e communities ' hu b fro mBilling s t o Denve r i f suc h achang e coul db e agree dupo n wit h th e communities . Grea t

Lake s commence dful

l EA S unde r

Orde r 2007-12-2 2 i n Apri l 2009 . Suc h subsid y is calculate

dan ddistribute do n afisca l yea r basis , subjec

t t o th e availabilit y o f funds .- 2 -

B y Orde r 2008-7-9 , Jul y 3 , 2008 , th e Departmen t approve dGrea t

Lakes ' reques t

t o provid e servic e t o Denver , instea do f Billings , a

t Lewistown , Mile s Cit y an dSidney . Similarly , b y Orde r 2010-6-8 , Jun e 7 , 2010 , th e Departmen t approve dth e carrier' s reques t t o alte r it s servic e pattern a

t Glendiv e an dprovid e 6 roun dtrip s awee k t o Denve r

an d6 t o Billings . Grea t Lake s obtaine dsuppor t

fro mth e communitie s befor e w e approve dthes e servic e pattern changes . I n anticipatio n o f

th e en do f

th e rat e ter mo n Apri l 30 , th e Departmen t issue dOrde r 2010-11- 6 o n Novembe r

5 , 2010 , solicitin g proposal s t o provid e efficien t EAS , with subsid y suppor t i f necessary , a

t th e seve n Montan acommunities . Proposal s Th e Departmen t

receive dproposal s fro mtw o carrier s i n respons e t o it s solicitation . Grea t Lake s an dGulfstrea msubmitte dinseparabl e packag e bid s for EA S servic e a

t al l 7 Montan a communities . Thes e proposal s ar e summarize dbelow . Eac h carrier' s proposa l an dcommen t letter s ma y b e accesse donlin e throug h th e Federa l Docke t Managemen t

Syste mat : http://www.regulaiions.EOv . b y doin g asearc h o n th e docke t numbe r liste do n th e firs t

page . Grea t Lake s Great Lakes , th e incumben t

carrie r an doperatin g a s aFrontie r an dUnite dAirline s code
shar e partner , propose dt o continu e it s existin g one-sto p o r nonsto p servic e an dschedul e betwee n eac h o f

th e seve n Montan aEA S communitie s an deithe r Denve r o r Billing s utilizin g 19-sea t Beec h 1900 D (o r

30-seat Embrae r 120 Brasilli aaircraf

t a t it s discretion) , for

a combine dannua l subsid y o f $10,697,409 . Th e leve l o f servic e a t eac h communit y i s provide di

n th e tabl e below : Communit y

Glasgo w Glendiv e Havr e Lewistow n Mile s Cit y Sidne y Wol f Poin t Weekl y

Roun dTrip s 1 2 1 2 1 2 1 2 1 2 1 7 1 2 Gulfstrea m Gulfstream , unde r

it s independent

marketin g identity , submitte daproposa l for servic e betwee n eac h EA S communit y an dBilling s utilizin g 19-passenge r Beec h 1900 D aircraft , for acombine dannua l subsid y rat e o f $10,903,854 . Th e carrie r propose dth e sam e exac t frequenc y level s o f

servic e a s detaile di

n th e tabl e above . Lewistown , Mile s City an dSidne y woul dreceiv e nonsto p service , whil e Glasgo w an dWol f Poin t woul dreceiv e amixtur e o f one-sto p an dnonsto p service . Glendiv e an dHavr e woul dreceiv e one-sto p service . Gulfstrea mha s maintaine dticketin g an dbaggag e interlin e agreement s with legac y carrier s a t several larg e airports .- 3 -

Communit y Comment s O n Decembe r

10 , 2010 , th e Departmen t sen t correspondenc e t o th e member s o f th e Montan a Essentia l Ai r

Service Task

Forc e (whic h include s official s fro mth e seve n communitie s an d th e Montan aAeronautic s Division ) summarizin g th e proposal s an drequestin g comment s an d preference s o n th e carrier-selectio n decision . I n response , th e Departmen t receive dalette r

fro mth e Chairma n o f

th e tas k forc e o n Januar y 1 3 indicatin g tha t th e communit y representative s vote d6- 1 i n favo r o f Gulfstream . Decisio n o n Carrie rSelectio n Afte r carefu l consideration , includin g th e comment s o f local officials , th e Departmen t ha s decide dt o selec t

Gulfstrea mt o provid e EA S a t th e seve n communities , i n accordanc e wit

h it s proposa l summarize dabove , fo r tw o year s beginnin g when th e carrie r inaugurate s ful

l EA S a t all communitie s throug h th e en dof th e 24i h mont h thereafter . Th e armua

l combine dsubsid y rate wil l b e se t

a t $10,903,854 . Th e carrier-selectio n decisio n i s straightforward . Gulfstrea mha s year s o f experienc e providing schedule dai r

servic e an dcontinue s t o increas e it s participatio n i n th e EA S program . Whil e Gulfstrea mrequire s abou t $200,00 0 i n additiona l subsidy , that incremen t

i s sprea dove r

seve n communities , o r

les s than $30,00 0 per

community . Th e majorit y o f communities , b y avot e o f 6 t o 1 , favo r

Gulfstrea man dw e fin dboth th e servic e an dsubsid y level s t o b e reasonable . Give n th e rathe r smal l differenc e i

n subsid y o n aper-communit y basis , w e wil l defer

t o th e communities ' view s i n thi s case . Th e Departmen t

shal l mak e thi s selectio n a t th e seve n communitie s contingen t upo n th e Department' s receivin g properl y execute dcertification s fro mGulfstrea mtha t i t i s i n complianc e with th e Department' s regulation s regardin g drug-fre e workplace s an d nondiscrimination , a s wel l a s th e regulation s governin g lobbyin g activities . Compensatio n fo rInterim-Perio d Servic e Great Lakes ' curren t

contrac t expire s o n Apri l 30 , 2011 . I n th e even t

that Gulfstream' s servic e i s no t

full y i n plac e b y that

date , w e wil l requir e th e incumben t carrier , Grea t

Lakes, t o continu e providin g servic e unti l replacemen t servic e begins . Grea t

Lake s i s eligibl e t o b e compensate dfor

th e provisio n o f

EA S a t th e seve n communitie s unti l areplacemen t carrie r inaugurate s full EA S operation s a t th e communities . W e woul dgenerall y us e Grea t Lakes ' prospectiv e proposa l that wa s submitte di n acompetitiv e envirormien t t o establis h ashort
term , hold-i n rate . However , Great Lakes ' prospectiv e rat e i s calculate do n ami x o f both Billing s an dDenve r

service . Th e Denve r

servic e require s substantiall y mor e flyin g than Billings . Shortl y afte

r th e communitie s vote d6- 1 t o support Gulfstream , Great

Lake s issue d apres s releas e sayin g that , effectiv e Februar y 10 , i t woul drevert

t o all-Billing s service , whic h i s what

Great lake s originall y propose dan dupo n whic h th e curren t subsid y calculation s ar c based . Therefore , w e wil l exten dth e curren t subsid y rate s se t

i n Orde r 2007
- 12-2 2 unti l Gulfstream' s servic e i s fully i n place . W e expec t

Grea t Lake s an dGulfstrea mt o wor k togethe r to mak e asmooth transitio n a t th e seve n communities . I n that regard , befor e Great

Lake s suspend s it s service , w e expec t i t t o contac t al l passenger s holdin g reservation s for trave l afte

r it s fina l dat e of service , t o infor m

### - 4 -

the mo f th e chang e i n service , an dt o assis t the mi n arrangin g alternat e transportatio n o r to provid e arefun do f

th e ticke t price , withou t

penalty , i

f requested . 

### Carrie rFitnes s 4 9 U.S.C . 41737(b ) require s that w e fin da

n ai r carrie r fit , willing , an dabl e t o provid e reliabl e servic e befor e w e ma y subsidiz e i t t o provid e essentia l ai r

service . Gulfstea mi s subjec t t o th e Department' s continuin g fitnes s requirements , an dn o informatio n ha s com e t o ou r attentio n that

woul dcaus e u s t o questio n th e carrier' s fitnes s a t thi s lime . W e hav e contacte dth e Federa l Aviatio n Administration , an di t ha s raise dn o concern s that woul d negativel y affec t

ou r fitnes s finding . W e therefor e conclud e that th e carrie r

remain s fi

t t o conduc t th e operation s propose dhere . Thi s orde r

i s issue dunde r

authorit y delegate di n 4 9 CF R1.56 a(f)
- 

### ACCORDINGLY , 1 . W e selec t

Gulfstrea mInternationa l Airlines , t o provid e essentia l ai r servic e a t Glasgow , Glendive . Havre , Lewistown , Mile s City , Sidne y an dWol f Point , Montana , a s describe di n Appendi x C , fo

r atwo-yea

r perio dbeginnin g whe

n th e carrie r

inaugurate s ful

l essential ai r servic e a t al l communitie s throug h th e en do f th e 24t h mont h thereafter ; 2 . Th e Departmen t

direct s Gulfstrea mInternationa l Airlines , t o retai n al l books , records , an d othe r sourc e an dsummary documentatio n t o suppor t claim s for

payment , an dt o preserv e an d maintai n suc h documentatio n i n amanne r tha t readii y pennit s it s audi t

an dexaminatio n b y representative s o f

th e Department . Suc h documentatio n shal l b e retaine dfor seve n year s o r unti l th e Departmen t

indicate s that

th e record s may b e destroyed , whicheve r comes first . Copie s o f flight log s for aircraf t sol do r dispose do f

mus t b e retained . Th e carrie r

may forfei t it s compensatio n for

an y clai mthat

i s no t supporte dunde r

th e term s o f

this order ; 3 . W e fin dthat

Gulfstrea mInternationa l Airlines , continue s t o b e fit , willin g an dabl e t o operat e a s acommute r

ai r carrie r an dcapabl e o f

providing reliabl e essentia l ai r servic e a t Glasgow , Glendive , Havre , Lewistown , Mile s City , Sidne y an dWol f Point , Montana ; 4 . W e will exten dth e annua

l subsid y rate s an dthe rate s pe

r fligh t an dweekly compensatio n ceiling s se

t fo r Grea t Lake s Aviation , Ltd . i

n Order 2007-12-22 , December

21 , 2007 , unti l Gulfstrea mIntemationaJ Airline s inaugurate s ful l essential ai r

service ; 5 . Thi s Docke t

wil l remai n ope n unti l furthe r orde r o f th e Department ; an d- 5
-

6 . W e wil l serv e copie s o f thi s orde r

o n th e partie s liste di n Appendi x D . By : SUSA N L KURLAN D Assistan t Secretar y fo

r Aviatio n an dInternationa l Affair s (SEAL ) A n electroni c versio n o f

this documen t

i s availabl e i n th e Federa l Docke t Managemen t System(FDMS ) a t

littp:/Avww . reuulations . iiov

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t o Q C/ }Appendi x C Pag e 1 o f 3 Gulfstrea m Internationa l Airline s Provisio n o f Essentia l Ai rServic e a t Lewistown , Mile s Cit y an d Sidney , Montan a

Summary o f Servic e T o B e Provide d Effectiv e Period : Tw o year s beginnin g whe n Gulfstrea mInaugurate s ful l servic e a

t all seve n Montan acommunitie s throug h th e en dof th e 24t h mont h thereafter . Schedule dService : Lewistown : twelv e nonsto p roun dtrip s eac h wee k t o Billings . Mile s Cit y I twelv e nonsto p roun d(rip s eac h week t o Billings . Sidney : seventee n nonsto p roun dtrip s eac h wee k t o Billings . Intermediat e stop s an duplin e service : N o servic e t o an y intermediat e o r uplin e point s ar e contemplate dunde r th e term s of

th e carrier' s proposal ; accordingly , n o suc h servic e ma y b e provide don subsidize dflight s withou t prio r Departmen t

approval . Aircraf t tvpe : Beechcraf t B-I9Q0 D (1 9 passenge r

seats) . Timin g o f

flights : Flight s mus t b e well-time dan dwell-space di n orde r t o ensur e ful

l compensation . Annua l compensation : Lewistown : $1,325,73 3 Mile s Citv : $1,621,82 1 Sidney : $2,932,15 2 Thi s rat e assume s a

n annua l completio n facto r of 9 7 percent . A compensatio n ceilin g i s t o b e applie dpe r calenda r wee k suc h that servic e abov e that

ceilin g i n on e wee k

canno t make u p for

servic e shortfall s i

n anothe r week . Subsid y Rat e pe r

Flight : Lewistown : $1,094.74 '

Mile s City : $1,339,24 2 Sidney : $1.709.71 3 Weekl y Compensatio n Ceiling : Lewistown : $26,273.76 ^ Mile s Citv : $32,141.76 ^ Sidney : 58.130.14 6

' $ 1,325,73 3 dividedb

y 1,2 1 I annua

l departures : 2

4 flight s x 5 2 week

s x .97 (completion factor

) = 1.211 . ^ $ 1,621.82 1 dividedb

y 1.21 1 annua

l departures : 2

4 flights x 5 2 week

s x .97 (completion factor

) = 1,211 . -H2,932,15 2 divide db

y 1,71 5 annua

l departures : 3 4 flights x 5 2 week s x .97 (completion factor

) = 1,715 . * * 2 4 flight s pe r wee k multipliedb

y $1,094.7 4 pe

r flight . ^ 2 4 flight s pe r wee k multipliedb

y $1,339.24 pe

r flight. ^ 3 4 flights pe

r wee k multipliedb

y $ 1,709.7 1 pe

r flight.Appendi x C Pag e 2 o f 3 Gulfstrea m Internationa l Airline s Provisio n o f Essentia l Ai rServic e a t Havre , Glendive , Glasgo w an d Wol f Point , Montan a Summary o f Servic e T o B e Provide d Effectiv e Period : Tw o year s beginnin g whe n Gulfstrea minaugurate s ful l servic e a t

al l seve n Montan acommunitie s throug h th e en dof th e 24l h mont

h thereafter . Schedule dService : Havre : twelv e one-sto p roun dtrip s eac h wee k t o Billings . Glendive : twelv e one-sto p roun dtrip s eac h wee k t o Billings . Glasgow : fiv e nonsto p an dseve n one-sto p roun dtrip s eac h wee k t o Billings . Wol f Point : seve n nonsto p an dfive one-sto p roun dtrip s eac h wee k t o Billings . Intermediat e stop s an duplin e service : Havre : a n intermediat e sto p a t

Lewistown , Montan ai s permitted . Glendive : a

n intermediat e sto p a

t Mile s City , Montan ai s permitted . Glasgow : a

n intermediat e sto p a

t Wol f Point , Montan ama

y b e serve d o n seve n weekl y subsidize droun dtrips . Wol f Point : an intermediat e sto p a t Glasgow , Montan ama

y b e serve d on fiv e weekl y subsidize droun dtrips . N o servic e t o an y intermediat e poin t i s contemplate dunde r

th e term s o f th e carrier' s proposal ; accordingly , n o suc h servic e may b e provide do n subsidize dflight s withou t prio r Departmen t

approval . Beechcraf t B-1900 D (1 9 passenge r seats) . Timin g of

flights : Flight s mus t b e well-time dan dwell-space di n orde r t o ensur e ful

l compensation . Annual compensation : Havre : $1,162,32 9 Glendive : $1,193,39 1 Glasgow : $1,166,04 9 Wol f Point : $1,502,37 8 Thi s rat e assume s a

n annua l completio n facto r of 9 7 percent . A compensatio n ceilin g i s t o b e applie dpe r calenda r week suc h that servic e abov e that

ceilin g i n on e wee k

canno t make u p fo

r servic e shortfall s i

n anothe r week . Subsid y Rat e pe r

Flight : Havre : $959.81 '

Glendive : $985.46

- Glasgow : $962.88 ^ Wol f Point : $1,240.61 ^ Weekl y Compensatio n Ceiling : Havre : $23,035.44 ^ Glendive : $23,651.04 ^ Glasgow : $23,109.12" ^ Wol f Point : $29,774.64 «

' $1,162,32 9 dividedb

y 1.21 1 annua

l departures : 2 4 flights x 5 2 week s x .97 (completion factor

) = 1,211 . ^ $1,193,39 1 dividedb

y 1.21 1 anmia

l departures : 2

4 flights x 5 2 week

s x .97 (completion factor

) = 1,2 1 1 . •Hl,166.04 9 dividedb

y 1.21 1 annua

l departures : 2

4 flights x 5 2 week

s x .97 (completion factor

) = 1,211 . " * $1,502,37 8 dividedb

y 1,21 1 annua

l departures : 2

4 flights x 5 2 week

s x .97 (completion factor

) = 1,211 . 5 2 4 flights pe

r wee k multipliedb

y $959.8 1 pe

r flight. ^ 2 4 flights pe

r wee k multipliedb

y $985.4 6 pe

r flight. " ^ 2 4 flights pe

r wee k multipliedb

y $962.8 8 pe

r flight. ^ 2 4 flights pe

r wee k multipliedb

y $ 1,240.6 1 pe

r flight.Appendi x C Pag e 3 o f 3 NOTE : Th e carrie r

understand s tha t

i t may forfei t

it s compensatio n for

an y flight s that

i t doe s no t operat e i n conformanc e wit

h th e term s an dstipulation s o f th e rat e order , includin g th e servic e p]an s outline di n th e orde r

an dan y othe r

significan t

element s o f

th e require dservice , withou t prio r approval . Th e carrie r

understand s tha

t a n aircraf t take-of f an dlandin g a

t it s schedule d destinatio n constitute s acomplete dflight ; absen t a n explanatio n supportin g subsid y eligibilit y fo r aflight that ha s no t bee n completed , suc h a s certai n weathe r cancellations , onl y complete d flight s ar e considere deligibl e for subsidy . I

n addition , i

f th e carrie r

doe s no t schedul e o r

operat e it s flight s i n ful l conformanc e with th e orde r for asignifican t

period , i t may jeopardiz e it s entir e subsid y clai mfo r

th e perio di

n question . I

f th e carrie r

contemplate s an y suc h change s beyon d th e scop e o f

th e orde r durin g th e applicabl e perio do f thes e rates , i

t mus t firs t notif y th e Offic e o f Aviatio n Analysi s i n writin g an dreceiv e writte n approva l fro mth e Departmen t t o b e ensure do f fUl l compensation . Shoul dcircumstance s warrant , th e Departmen t may locat e an dselec t

a replacemen t

carrie r t o provid e servic e o n thes e routes . Th e carrie r mus t complet e al l flight s tha

t can b e safel y operated ; flight s tha t overfl y point s for

lac k o f traffi c wil l no t

b e compensated . I

n determinin g whethe r

subsid y paymen t

fo r adeviatin g flight

shoul db e adjuste do r

disallowed , th e Departmen t

wil l conside r

th e exten t

t o whic h th e goal s o f

th e progra mare me t

an dth e exten t

o f acces s t o th e nationa l ai r

transportatio n syste mprovide dt o th e community . I f th e Departmen t

unilaterally , eithe r

partiall y o r

completely , terminate s o r reduce s payment s for servic e o r change s servic e requirement s a t aspecifi c locatio n provide dfor unde r this order , then , a t th e en do f

th e perio dfor

whic h th e Departmen t

doe s mak e payment s i n th e stipulate damount s o r a t th e stipulate dservic e levels , th e carrie r may ceas e t o provid e servic e t o that specifi c locatio n withou t

regar dt o an y requiremen t fo r notic e o f suc h cessation . Thos e adjustment s i n th e level s o f

subsid y and/o r

servic e that

ar e mutuall y agree dt o i n writin g b y th e Departmen t an d carrie r d o no t constitut e atotal o r

partia l reductio n o r

cessatio n o f

payment . Subsid y contract s ar e subjec t to , an dincorporat e b y reference , relevan t statute s an dDepartmen t regulations , a s the y may b e amende dfro mtim e t o time . However , an y suc h statutes , regulations , o r amendment s theret o shal l no t operat e t o controver t

th e foregoin g paragraph . Fund s ar e no t

currentl y availabl e fo r

performanc e unde r

thi s orde r

beyon dMarc h 3 , 2011 . Th e Department' s obligatio n fo r performanc e unde r

this orde r

beyon dMarc h 3 , 2011 , i s subjec t t o th e availabilit y o f

appropriate dfund s fro mwhic h paymen t for service s ca n b e made . N o legal liability o n th e part

of th e Governmen t

fo r an y paymen t

may aris e for

performanc e unde r

thi s orde r beyon dMarc h 3 , 2011 , unti l fund s ar e mad e availabl e t o th e Departmen t for performance . I f fund s ar e no t

mad e availabl e for

performanc e beyon dMarc h 3 , 2011 , th e Departmen t wil l provid e notic e i n writin g t o th e carrier . Al l claim s for

paymen t mus t b e submitte dwithi n 6 0 day s o f th e las t da y o f servic e provide d unde r thi s order .

### Appendi x D SERVIC E LIS T Debbi e Alk e BradSchmid t Administrato r

Bo x 91 0 Montan aAeronautic s Divisio n Mile City , Montan a5930 1 P.O . Bo x 20050 7 Helena , Montan a59620-050 7 Micke y Bowma n Vic e Presiden t

o f Corporat e Developmen t Gulfstrea mInternationa l Airline s 320 1 Griffi n Road , 4 ^ Floo r Ft . Lauderdale , Florid a3331 2 Bre t Carpente r Basi n Stat e Ban k Bo x 59 8 Lewistown , Montan a5945 7 Elme r Egl i 198 1 Wyomin g Avenu e Glendive , Montan a5933 0 Gerry Grabofsky 131 5 12' ^ Stree t Havre , Montan a5950 1 Ric k Isl e Cit y o f Wol f Poin t 2014'*'Avenu e South Wol f Point , Montan a5920 1 Michae l O . Matthew s Vic e Presiden t

& Chie f Financia l Officer Grea t Lake s Aviation , Ltd . 102 2 Airport

Parkwa y Cheyerme , Wyomin g 8200 1 Wal t McNutt 11 0 12 ^ Ave r Sidney , Montan a5927 0 11 0 12 ^ Avenue , S W Joh n Rabenber g Chairma n Montan aEssentia l Ai r

Service Task

Forc e 64 3 Remud aCree k

Roa d Fort Peck , Montan a5922 3