Order 2012-9-2

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 4th of September, 2012

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 Order, the Department is reselecting Ward Air, Inc. (Ward Air), to provide Essential Air 

Service (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 2010-7-11 (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 $19,584 annual subsidy. 

In anticipation of the end of the current contract, we issued Order 2012-7-11 (July 10, 2012)

requesting proposals from carriers interested in providing EAS at the communities for a new 

contract period, beginning October 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 “DOT-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 proposal included only one service option, to continue its existing service, as follows:

Chatham: One round trip per 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, Cessna185, or Cessna206 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, Cessna185, or Cessna206 aircraft.

Proposal of Alaska Seaplane Service

Alaska Seaplane Service also submitted a proposal to serve the communities. It likewiseincluded 

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 service would be operated with single-engine piston aircraft, either Cessna180 or Cessna206 

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 aircraft, either Cessna180 or Cessna206 

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 

expressing 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 Alaska 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, we find that Ward Air’s proposed service and subsidy levels 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 

regulations 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 Essential Air Service. 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 findings. DOT therefore concludes that the carrier remains 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 

Director, Office of Aviation Analysis.

ACCORDINGLY,

1. We reselect Ward Air, Inc., to provide Essential Air Service 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 seven 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 supported under the terms of this Order;
3. We find that Ward Air, Inc., continues to be fit, willing and able to operate as a certificated 

carrier and capable of providing reliable Essential Air Service at Chatham and Funter Bay, 

Alaska; 

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

5. We will serve copies of this Order on the Division of Statewide Aviation of the Alaska 

Department of Transportation and Public Facilities, and Ward Air, Inc.

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

Regulations, 14 CFR 385.50, must file such petitions within ten (10) days after the date of 

service of this Order.

This Order will be effective immediately, and the filing 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

http://www.regulations.gov
Appendix A

Great Circle Miles

Chatham to Juneau 60

Funter Bay to Juneau 14

Chatham to Funter Bay 51
Appendix B
Appendix 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, 2012, through September 30, 2014.

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

1st Year 2nd Year 1st Year 2nd Year

Annual Subsidy1 $11,040 $11,472 $12,896 $13,416

Annual Flights2 24 24 104 104

Rate per Flight3 $460 $478 $124 $129

Monthly/Weekly Ceiling4 $920 $956 $248 $258

Note: 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 required 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, 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 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 this rate, 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; flights 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 extent of access to the national air transportation 

system provided to the community.

If the Department unilaterally, either partially or completely, terminates or reduces payments for service or changes 

service requirements at a specific location provided 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 requirement 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 contract 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, 2012. The Government’s 

obligation for performance under this order beyond September 30, 2012, 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, 2012, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 30, 2012, 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 service provided under this order.