Order: 20 10

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Served: November 4 , 20 1 0



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 4 th day of November , 20 10

DO T

- OST

- 200 2

- 13 98 3

ORDER REQUESTING PROPOSALS

Summary By this order

, the Department is requesting proposals from carriers interested in providing

essential air service (EAS) at Grand Island, Nebraska , for the next two

- year period from May 1, 2011, through April 30, 2013 , with or without subsidy . Proposals are due December 14 , 2010

. ( See Appendix A for an area map.)

Background By Order 2008

- 7

- 8, July 3, 2008, the Department selected Great Lakes Aviation, Ltd. (Great Lakes) to provide 18 nonstop round trips per week to Kansas City International Airport using

19

- p assenger Beech 1900 aircraft, for a two

- year period beginning when the carrier inaugurated full EAS, at an annual subsidy amount of $2,271,640. Great Lakes inaugurated service on February 1, 2009, with 12 nonstop round trips per week to Kansas City . On April 8, 2009, Great

Lakes added an additional six weekly round trips to Kansas City , fulfilling the carrier’s full service obligation. By Order 2009

- 10

- 7, October 16, 2009

, the D epartment approved an alternate service pattern for Grand Island that permitted Great Lakes to receive its full subsidy if it operated some or all of its 18 weekly round trips to Denver

. Great Lakes moved all 18 weekly round trips from Kansas City to Denv er on December 1 , 2009

. Essential Air Service at

GRAND ISLAND, NEBRASKA

under 49 U.S.C. 41731 et seq.- 2

-

Request for Proposals

W e are here requesting proposals from carriers interested in providing service at Grand Island , with or without subsidy, to be file d no later than December 14 , 2010

. A fter that date, our staff will docket

the proposals, thereby making them public. Shortly afterwards, we will provide a summary of the proposals to the communit ies and ask them to submit their final comments. We will give full consideration to all proposals that are timely filed. 1

Interest ed 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. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and sol icit a new round of proposals.

We are here providing interested carriers with some basic information to serve as guidance when they prepare their proposals, but we will no t prescribe a precise format for their proposals. We expect 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 pre sent; however, they might want to include proposed schedules as well as supporting data for their subsidy requests, such as projected block hours, revenues and expenses. We strongly encourage clear, well

- documented proposals that will facilitate their eval uation by the affected communities and the Department. 2

With respect to Grand Island, w e ask that carriers submit proposals for t wo round trips per day (12 to 14 round trips per week) with 3 4

- seat or larger aircraf t or three round trips per day ( 18 total round trips per week) with 15

- to 33

- seat aircr aft to Chicago O’Hare, Dallas/Fort Worth,
Denver, Minneapolis/St. Paul

, or another suitable hub where numerous connections to the national air transportation system can be made. Service between Grand Island and the hub m ust be nonstop

.

The c ommunities and air 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 th e airline inter ested in submitting a proposal.

We encourage proposals that meet these requirements in an efficient manner. Carriers are also welcome to propose more than one service option, if they choose; they need not limit themselves to those requirements if they envision other, potentially more at tractive service possibilities

--

1 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide essential air service without subsidy and we determine that service can be reliably provided without such compensation, we do not proceed with the carrier

- selection case. Instead, we si mply rely on that carrier’s subsidy

free service as proposed.

2 In selecting a carrier to provide subsidized essential air service, 49 U.S.C. 41733(c) (1) directs us to consider four

factors : (1) service reliability; (2) contractual and marketing arrangeme nts with a larger carrier at the hub; (3) interline arrangements with a larger carrier at the hub; and (4) community views

. In addition

, the Consolidated Appropriations Act, 2008, Public Law 110

- 161

, 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 should also be aware that our general provisions governing

essential air service will b e 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

-

different hubs or length of service terms , for example

-- with subsidy requirements that remain competitive.

New Filing Procedures Carrier proposals s hould be s ubmitted to the Department with all materials merged into a s ingle

document. The document will be published on Regulations.gov and each page should be

formatted to be viewed online.

Service and Traffic History

For the 12

- month period ending August 31 , 2010

, th e most recent period for which traffic data are available, Grand Island averaged 17.5 enplanements per day. 3 In order to assist carriers in making their traffic and revenue forecasts, we have included historical traffic data in Appendix B.

Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces, and nondiscrimination. 4 Consequently, all carriers receiving Federal subsidy for essential air service must certify t hat 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 rate term must also certify that they are in compliance with the regulation s 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 requir ed to complete the required certifications. Interested carriers requiring more detailed information regarding these requirements should contact the Office of Aviation Analysis at (202) 366

- 5903. 5

Community and State Comments

The communit y and state are w elcome to submit comments on the proposals at any time. As noted earlier, however, we will provide a summary of the proposals to the civic parties and ask them to submit their final comments shortly after December 14 , 2010

, the due date for proposals.

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

- delegated to the Director, Office of Aviation Analysis.

3 See Appendix B for historical traffic data. Enplanements represent one

- half of total origin

- and

- destination traffic, and average enplanements per day are based on 77 weekdays and weekends each quarter , except as noted.

4 The regulations applicable to the se 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

– Nondisc rimination 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) 49 CFR Part 29

– Government

- wide debarment and suspension (non

procurement) and government

- wide requirements for drug

- free workplace (grants).

5 The certifications are also available on the web at http://ostpxweb.dot.gov/aviation/index.html.- 4

-

ACCORDINGLY,

1. We request that carriers interested in providing essential air service at Grand Island,

Nebraska

, for the two

- year period from May 1, 2011, through April 30, 2013

, submit their proposals, with or without requests for subsidy, no later than December 14 , 2010

. The proposals

should be e

- mailed to EAS@dot.gov , with the title: “Proposal to Provide Essential Air Se rvice at Grand Island, Nebraska (Docket DOT

- OST

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- 13983 ) ; 6

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

3 . We will serve co pies of this order on the Mayor of Grand Island, the director of Central Nebraska Regional Airport

, and the parties listed in Appendix D

.

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

Aviation Economic Regulations, 14 CFR 385.50, must file such petitions within ten (10) days

after the date of servi ce of this order.

This order will be effective immediately, 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 at http://www.regulations.gov

6 Questions regarding filings in response to this orde r may be directed via electronic mail to Kevin Schlemmer at kevin.schlemmer@dot.gov or via phone at (202) 366

- 3176.Appendix A



## AREA MAP

This map is provided by Sabre ® AirVision TM Profit Essentials and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Appendix B

Traffic History 7

Grand Island, NE (GRI)

Year Quarter Month Inbound pax Outbound pax Total

2009 1 2 59 77 136

2009 1 3 95 98 193

2009 2 4 156 153 309

2009 2 5 253 263 516

2009 2 6 258 244 502

2009 3 7 278 261 539

2009 3 8 255 212 467

2009 3 9 308 274 582

2009 4 10 263 235 498

2009 4 11 234 235 469

2009 4 12 419 443 862

2010 1 1 459 416 875

2010 1 2 453 459 912

2010 1 3 588 540 1,128

2010 2 4 501 477 978

2010 2 5 561 538 1,099

2010 2 6 593 584 1,177

2010 3 7 618 587 1,205

2010 3 8 613 582 1,195

Average daily enplanements at Grand Island ( 12

- months ending 8 /31/2010 )

– 1 7.5 8

7 Source

– T

- 100 Market Report, Passengers in Scheduled Passenger Service. Great Lakes Airlin es service only.

8 Average daily enplanements= total traffic for the most recent 12

- month period (10,980 passengers) divided by 313 service days divided by 2.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 required service, without prior approval. The carrier understand s 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 flight s 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; flights that overfly points for lack of traffic will not be

com pensated. 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 contracts are subject to, and incorporate by reference, relevant stat utes 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.

Funds are not currently available for performance under this solicitation beyond [DATE]

. The Government’s obligation for perform ance under this solicitation beyond [DATE] , is contingent upon the availability of appropriated funds from which payment for services can be made. No legal liability on the part of t he Government for any payment may arise for performance under this order beyond [DATE] , until funds are made available to the Department for performance. If funds are not made available for performance beyond [DATE] , the carrier will receive notice in wri ting by the Department.

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

.Appendix D

Scheduled Air Carriers, Contiguous US and Puerto Rico
Air Greco/Wings Air McCall Aviation, Michelle
Air Sunshine, Inc. Mesa Air, Michael Lotz
Air Sunshine, Mirmohammad Adili Mesaba, John Spanjers
Air West, Inc., John Raatz Mesaba, Max Shemesh Air Wisconsin, Annette Daly MidStar Airlines, Jeffrey Fonner
Air Wisconsin, Jim Rankin Midwest Airlines, Greg Aretakis
Airline Associates, Bill Mishk MN Aviation, Jose Maldonado
Alaska Airlines, Jeff Cole Multi Aero, Darnea Alaska Airlines, Sandy Sinick Multi Aero, Shane Storz Allegiant Air, Brian Davis Northern Air Cargo, David Karp
American Airlines, Carl Nelson Northern Air Cargo, Eric Van Andel American Eagle, Jeffrey Hartz Northwest, Tim McDonald
Atlantic Southeast, Jon Lindlief Northwest, Aaron Murray Atlantis Southeast, Roger Weston NYDC, Henok Araya Aviation Technologies/ Charter Air Transport OST, Brian Swanson Bemidji Aviation, Cori Rude OST, Dennis DeVany Bemidji Aviation, Arlen Rinkenberger OST, Kevin Adams Cape Air, Andrew Bonney OST, Kevin Schlemmer Cape Air, Dan Wolf OST, Michael Martin Cape Air, J. Flaherty OST, Renee Williams Classic Aviation, Tony Henderson Pacific Aviation Group, Craig Garrick Colgan Air, Mike Colgan Pacific Aviation Group, Ron Pye Colgan Air, Kevin Scott Pacific Wings, Frank Ford CommutAir, Andy Price Pacific Wings, Greg Kahlstorf CommutAir, Joel Raymond PenAir, Danny Seybert Consultant, Robert Silverberg PenAir, Scott Bloomquist
Continental, Bruce Keiner Pinnacle Airlines, Joe Williams
Continental, Dan Weiss Pinnacle Airlines, Phil Reed Continental, Lorry Halloway Planemasters, Inc. John Kessler Delta, Anthony Canitano Planemasters, Inc. Paul Berliner
Delta, Dan Shuman Planemasters, Inc. Todd DeSimone Delta, Jeff Morgan Raytheon, Mike Scheidt Delta, Joe Esposito Saab Group, Polly Prelinger
Delta, Karen Zacha ry Scenic, Mary Schneider Delta, Kristal Murphy Scenic, Mitzi Daines
Delta, Sascha Vanderbellen Seaborne Airlines, Shawn Lewis DHS, Bill Ragan SeaPort Airlines, Daniel Helland
DHS, David Bernier SeaPort /Wings of Alaska , Jim Day

Dorado Jets SeaPort/Wings of Alaska, Nate Vallier
Dorado Jets, Mark McKenna SeaPort /Wings of Alaska , Rob McKinney
Era Aviation, Lori Goodman Shuttle America, Jerry Balsano
Executive Airlines, Kate Soled SkyWest, Brad Rawson Frontier Flying, Bob Hajducovich SkyWest, Eric Christensen

Frontline Aviation SkyWest, Michael Thompson
Gem Air, Dan Schroeder Sovereign Air, Bob Karns
Gem Air, JoAnn Wolters Sovereign Air, Lois R. Barton
Great Lakes, Chuck Howell Tatonduk, Robert Everts Great Lakes, Doug Voss Tatonduk, Robert Ragar
Gulfstream, Dave Hackett Tradewind, Eric Zipkin Gulfstream, Mickey Bowman TransStates, Fred Oxley Gulfstream, T. Cooper TransStates, Gerry Wigmore
Horizon Air, Dan Russo Transport Azumah, Joel Anabilah

- Azumah Horizon Air, Jennifer Thompson United, Alicia Gabriel Horizon Air, Mike McQueen United, James Starnes
Horizon Air, Jeff Cole US Airways, Benjamin Slocum ICEPR, Luis Irizarry US Airways, Howard Kass Intrepid Internatl Air, Rick Eyk US Airways, Jason Reisinger
Island Air Charters, Linda House Warbelows Air Ventures, Art Warbelow
Jet Air, Daniel Wolford

Kenmore Air, Tim Brooks

McCall Aviation, Dan Scott