Order 201 2

- 9

- 2

Served: September 4 , 2012



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION



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

Issued by the Department of Transportation

on the 4 th of September , 201 2

Essential Air Service at

CHATHAM, ALASKA, AND

FUNTER BAY

, ALASKA

Under 49 U.S.C. § 41731 et seq

. DOCKET OST

- 1997

- 3134

ORDER RESELECTING CARRIER Summary By this O rder

, the Department is reselecting Ward Air , Inc. (Ward Air)

, to provide Essential Air

S ervice (EAS) at Chatham and Funter Bay

, Alaska

, at annual subsidies of $ 11,040 at Chatham and $12,896 at Funter Bay , from October 1, 2012 , through September 30, 2013; and $11,472 at Chatham and $13,416 at Funter Bay, from October 1, 2013

, through September 30, 2014. 1

Background
Order 20 10

- 7

- 11 (July 15, 2010) selected Ward Air to provide Chatham with one one

- stop round trip per month to Juneau and Funter Bay with one nonstop round trip per week to Juneau through September 30, 2012

. All the service is provided with single

- engine piston aircraft for a combined $1 9,584 annual subsidy.

In anticipation of the end of the current contract, we issued Order 201 2

- 7

- 11 (July 10, 2012) request ing proposals from carriers interested in providing EAS at the communities for a new contract period, beginning O ctober 1, 2012

. We received proposals from two carriers : Ward Air and Alaska Seaplane Service

.

1 Such subsidy is calculated on a fiscal year basis, subject to the availability of appropriated funds.The carriers’ complete proposals and community comments may be accessed online at www.regulations.gov by entering “D OT

- OST

- 1997

- 3134” in the search box, so we will only briefly summarize the proposals and comments below.

Proposal of Ward Air

Ward Air ’s prop osal included only one service option, to continue its existing service, as follows:

Chatham : O ne round trip pe r month to Juneau for $ 11,040 annual subsidy in the first year, and $11,472 in the second year . All of the service would be operated with single

- engine piston aircraft, either DeHavilland Beaver, Cessna 185, or Cessna 206 aircraft.

Funter Bay : One round trip per week to Juneau for $ 12,896 annual subsidy the first year, and $13,416 in the second year . All of the service would be operated with single

- engine piston aircraft, either DeHavilland Beaver, Cessna 185, or Cessna 206 aircraft.

Proposal of Alaska Seaplane Service Alaska Seaplane Service also submitted a proposal to serve the communities. It likewise included only one service option as follows:

Chatham: One round trip per month to Juneau for $11,759 annual subsidy for two years . All of

the servic e would be operated with single

- engine piston aircraft, either Cessna 180 or Cessna 206
aircraft.

Funter Bay: One round trip per week to Juneau for $9,825 annual subsidy for two years . All of the service would be operated with single

- engine piston aircr aft, either Cessna 180 or Cessna 206
aircraft.

Community Comments On August 9, 2012, we requested comments regarding the carrier

- selection decision at the two

communities. We received several e

- mails and letters from citizens of the communities expressin g their satisfaction with Ward Air and supporting their proposal to continue service at Chatham and Funter Bay.

Decision

Ward Air , Inc. submitted a competitive proposal and received unanimous support from the community respondents

. The selection of Alas ka Seaplane Service would offer a savings of less

than $ 2,500 at both communities in the first year, combined. However, we find that the statutorily mandated criterion of community support outweighs the modest difference in subsidy.
In addition, w e find t hat Ward Air ’s proposed service and subsidy level s are reasonable

. We shall make the selection of Ward Air contingent upon the Department’s receiving properly executed certifications from the carrier that it continues to comply with the Department’s regul ations regarding drug

- free workplaces and non

- discrimination.Carrier Fitness

49 U.S.C. § 41737(b) and 41738 require that DOT find an air carrier fit, willing, and able to provide reliable service before DOT may subsidize it to provide E ssential A ir S er vice. Ward Air

is subject to the Department’s continuing fitness requirements, and no information has come to our attention that would cause us to question the carrier ’ s fitness at this time. DOT has contacted the
Federal Aviation Administration, and it has raised no concerns that would negatively affect our fitness finding s . DOT therefore concludes that the carrier remain s fit to conduct the operations proposed here.

This order is issued under authority delegated in 49 CFR 1.56a(f) and re

- delegated to the

Directo r, Office of Aviation Analysis.

ACCORDINGLY,

1. We re select Ward Air

, Inc., to provide Essential Air S ervice at Chatham and Funter Bay

, Alaska , as described in Appendix C ;

2 . We direct Ward Air

, 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 seve n years from the date of service 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 carrier may forfeit its compensation for any claim that is not sup ported under the terms of this O rder;3 . We find that Ward Air

, Inc., continue s to be fit, willing and able to operate as a certificated

carrier and capable of providing reliable E ssential A ir S ervice at Chatham and Funter B ay

, Alaska ;

4 . Th is docket will remain open until further order of the Department; and

5 . We will serve copies of this O rder on the Division of Statewide Aviation of the Alaska Department of Transportation and Public Facilities, and Ward Air, Inc.

Per sons entitled to petition the Department for review of this O rder under the Department’s Regulations, 14 CFR 385.50, must file such petitions within ten (10) days after the date of

service of t his O rder.

This O rder will be effective immediately, and the f iling of a petition for review shall not preclude

its effectiveness.

By:

Todd Homan

Director Office of Aviation Analysis

(SEAL)

An electronic version of this document is available on the World Wide Web at

ht tp://www.regulations.govAppendix A

Great Circle Miles
Chatham to Juneau 60 Funter Bay to Juneau 14 Chatham to Funter Bay 51Appendix BAppendix C

Ward Air Airlines , Inc., Essential Air Service to be Provided to
Chatham and Funter Bay Alaska , Docket : OST

- 1997

- 3134

Effective Period : October 1 , 20 1 2 , through September 30, 201 4

. Scheduled Service : Chatham: One round trip per calendar month to Juneau. Funter Bay: One round trip per week to Juneau.

Aircraft : Single

- Engine Piston

— DeHavailland Beaver, Cessna 185, or Cessna 206

.

Chatham Funter Bay

1 st Year 2 nd Year 1 st Year 2 nd Year
Annual Subsidy 1 $11,040 $11,472 $12,896 $13,416

Annual Flights 2 24 24 104 104
Rate per Flight 3 $460 $478 $124 $129
Monthly/Weekly Ceiling 4 $920 $956 $248 $ 258

Note: The c arrier 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 significan t
elements of the r equired 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 complet ed, such 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 per iod, 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 this rate, it must first notify the Office of Aviation Analysis in writing and receive written appr oval 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; f lights 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 t he extent of access to the national air transportation system provided to the community.

If the Department unilaterally, either partially or complete ly , terminates or reduces payments for service or changes service requirements at a specific location prov ided for 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 re quirement 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 contrac t 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.

1 See Appendix B

2 Chatham: One trip per month x 2 directions x 12 months = 24; Funter Bay: One trip per month x 2 directions x 52 weeks = 104.

3 Annual subsidy divided by annual flights

. 4 Monthly ceiling applies to Chatham, weekly ceiling to Funter Bay. Rate per flight divided by monthly/weekly flights.Appendix C

Funds are not currently available for performance under this order beyond September 30, 201 2 . The Government’s obligation for performance under this order beyond September 30, 201 2 , is subject to the availability of appropriated 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 September 30, 201 2 , until funds are made available to the Department for performance. If funds are not made avai lable for performance beyond September 30, 201 2 , the Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of se rvice provided under this order.