### O rder: 2015

- 6

- 4

Served: June 3, 2015



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 3 rd 

### of June , 20 1 5

ORDER REQUESTING PROPOSALS

Summary

By this O rder, the U.S. Department of Transportation (the Department) is requesting

proposals from air ca rriers interested in providing E ssential A ir S ervice (EAS) at Central

and /or Circle , Alas ka

, for a new contract period beginning December 1, 201 5 , with or without

subsidy

. (See Appendix A for a map). Air c arriers should file their proposals no later than

July 8

, 2015

.

Background

By Order 2013

- 9

- 17 ( September 24, 2013 ), the Department re

- sel ected Warbelow’s Air

Service, Inc. (Warbelow’s)

, to provide EAS at Central and Circle with five weekly round trips

using 8

- pa ssenger Piper Navajo Chieftan (PA31

- 350) aircraft over a Fairbanks

- Central

- Circle

Fairbanks routing for the con tract period from De cember 1, 2013, through

November 30, 2015, f or a combined annual subsidy of $305,803 ($152,902 for each

community).

The complet e public file for EAS at Central and Circle may be accessed online through the

Federal Dockets Management System at www.regulations.gov by entering “DOT

- OST

- 1998

-

3621 ” in the “Search for Rules, Comments, Adjudications, or Supporting Documents” field.

Request for Proposals

As the end of the current contract approaches, the Department is re questing proposals from air

carriers interested in providing EAS at Central and/or Circle

, with subsidy support if

necessary , for a new contract period beginning December 1

, 201 5

. Carriers should file their

proposals no later than July 8

, 20 15

. Staff wil l the n docket the proposals, thereby making

them public

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

Essential Air Service at

CENTRAL , ALASKA

CIRCLE, ALASKA

Under 49 U.S.C. § 41731 et se q

. DOT

- OST

- 199 8

- 3621

### - 2

-

communit y and ask them to submit their final comments. We will give full consideration to

all proposals that are timely filed. 1



### Interested air carriers should prepare their proposals with every expectation that their initial

proposals will represent their final and only proposals. However, we retain the discretion to

negotiate proposals with carriers when we deem it desirable; i n such cases, of course, we will

give all applicants the same opportunity. We also retain the discretion to reject outright all

unreasonable or unrealistic proposals and re

- solicit a new round of proposals. However,

negotiation and rejection are only occ asional exceptions to the rule.

We are here providing interested 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. Air 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

www.regulations.gov

, each page should be formatted to be viewed online. We exp ect

proposals to adequately describe the service being proposed and the annual amount of subsidy

being requested. The applicants can make their own judgments as to the level of detail they

wish to present; however, we recommend they include information co ncerning proposed

schedules and projected block hours . In addition, applicants are urged to provide financial

data supporting their subsidy requests, including information on their projected expenses and

revenues. We strongly encourage clear, well

- docume nted proposals that will facilitate their

evaluation by the affected communit ies and the Department. 2



### W ith specific respect to Central and Circle

, air carriers should provide sufficient capacity to

accommodate historical levels of traffic. In order to he lp carriers make traffic and revenue

projections, we have included historical traffic in Appendix B. In that regard, as is typically

the case in Alaska, significantly more freight and mail flow from the hub to the EAS

community than from the EAS community to the hub. We therefore request proposals for five

round trips a week with eight

- seat aircraft

, or more frequencies with smaller aircraft. As

always, we will formally solicit the views of the community and State on any service options

we receive before making a long term carrier

- selection decision. The community and air

1 Carriers should not expect th e Department to accept late fil ings. In cases where a carrier proposes to provide

EAS without subsidy and we determine that basic E AS, as required by 49 U.S.C. § 41732, can be reliably

provided without such compensation, we typically will not proceed with the carrier

- selection case. Instead, we

simply rely on that carrier’s subsidy

- free service as proposed.

2 In selecting a carrier t o provide subsidized EAS for an eligible place in Alaska, 49 U.S.C. § 41733(c )(1) directs

us to consider six factors: (1) service reliability; (2 ) contractual and marketing arrangements with a larger carrier

at the hub; (3 ) interline arrangements with a l arger carrier at the hub; (4 ) community views, giving substantial

weight to the views of the elected official s representing the users; (5) the experience of the applicant in

providing, in Alaska, scheduled air service or significant patterns of non

- schedul ed air service; (6 ) whether the

carrier has included a plan in its proposal 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,

2 015, 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 shou ld also be aware that our general provisions governing Essential Air Service

will be included in the selection Order as part of our authorization of subsidy for the selected service. Appendix

C of this Order contains those general provisions.

### - 3

-

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

service pattern that is desirable to the community and meets the operational needs of the

ai rline interested in submitting a proposal.

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying

activities, drug

- free workplaces, and nondiscrimination. 3 

### Consequently, all carriers receiv ing

Federal subsidy for 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 contract must also certify that t hey are in compliance with

the regulations governing lobbying activities. Because the Department is prohibited from

paying subsidy to carriers that do not submit these documents, all carriers that plan to submit

proposals involving subsidy should be aware that the selected carrier will be required to

complete the required certifications. Interested carriers requiring more detailed information

regarding these requirements should contact the Offic e of Aviation Analysis at

(202) 366

- 5903. 4



### This Order is iss ued under authority delegated in 49 CFR Part 1.25a(b) and re

- delegated to the

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We request that carriers interested in providing Essential Air Service at Central and/or

Circle , Alaska

, submit their pro posals, with subsidy support if necessary , no later than

July 8

, 20 15. The proposals should be e

- mailed to: michael.f.martin@dot.gov with the title

“Proposal to Provide E AS at Central and/or Circle ”; 5



### 2. T h is docket will remai n open until further O rder of the Department; and

3 The regulat ions 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 basis 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) 2 CFR Part 1200

– Go vernment

- wide debarment

and suspension (non

- procurement) and government

- wide requirements for drug

- free workplace (grants).

4 The certifications are also available on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

rural

- air

- service/essential

- air

- service

. 5 Questions regarding filings in response to this O rder may be directed to Michael Martin at (202) 366

- 6494 or

michael.f.martin@dot.gov

.

### - 4

-

3 . We will serve copies of this O rder on the civic officials of Central and Circle

, the Alaska

Department of Transportation & Public Facilities

, and the service list for this docket.

Persons entitled to petition the Department for review of this Order under the Department’s

Regulations, 14 CFR Part 385.31(a), must file such petitions within seven (7) days after the

date of service of this Order.

This Order will be effective immediat ely, 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

o nline at w ww.regulations.gov

.

### Appendix A

AREA MAP

### Appendix B

Page 1 of 2

Historical Traffic

- Central, Alaska

Origination Destination Origin and Destination

Year Quarter Pax Freight

PEQ Mail PEQ Total Pax Freight

PEQ Mail PEQ Total Pax Fr eight

PEQ Mail

PEQ Total

2013 1 6 0 4 10 9 5 27 42 15 5 31 51

2013 2 7 0 3 10 12 2 27 41 19 2 31 52

2013 3 7 0 7 14 6 2 25 33 13 2 32 47

2013 4 6 0 6 12 4 4 31 39 10 4 37 51

Total 26 0 20 46 31 14 110 155 57 14 130 201

201 4 1 3 0 4 7 5 3 27 35 8 3 30 42

2014 2 2 0 4 6 5 3 27 35 7 3 31 41

2014 3 2 0 6 8 0 2 32 34 2 2 38 41

2014 4 3 0 5 8 2 2 35 39 5 2 39 47

Total 10 0 18 28 12 10 120 142 22 10 139 171

### Appendix B

Page 2 of 2

Historical Traffic

- Circle, Alaska

Origination Destination Origin and Destination

Year Quarter Pax Freight

PEQ Mail PEQ Total Pax Freight

PEQ Mail PEQ Total Pax Freight

PEQ Mail

PEQ Total

2013 1 129 0 2 132 110 17 14 141 239 17 17 273

2013 2 80 0 3 83 78 1 3 16 107 158 13 18 190

2013 3 100 1 2 103 73 16 21 111 173 17 23 213

2013 4 58 1 3 62 64 25 21 111 122 26 24 173

Total 367 2 10 379 325 72 72 469 692 74 82 848

2014 1 87 1 2 90 86 36 17 139 173 37 20 229

2014 2 85 0 3 88 56 13 14 83 141 14 17 172

2014 3 101 3 3 108 75 26 20 121 176 29 23 228

2014 4 80 0 4 84 71 32 22 125 151 32 26 209

Total 353 5 12 370 288 107 73 468 641 112 85 838

### 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 require d service, without 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, su ch 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 claim 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 Department 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; fligh ts that overfly 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 e xtent of access 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 f or 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 requirem ent for notice 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.

Fun ds 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 Departmen t will provide notice in writing to the carrier.

All claims for payment, including any amended cl aims, must be submitted within 9 0 days of the last

day of the month for which compensation is being claimed. For example, claims for service provided

in July must be filed by October 31 st 

### ; August claims must be submitted by November 30 th 

### , and so on.