Order: 2014-6-3

Served: June 6, 2014

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of 

Transportation on the 6

th day of June, 2014

ORDER REQUESTING PROPOSALS

Summary

By this Order, the Department requests proposals from air carriers interested in providing 

Essential Air Service (EAS) at Akutan, Alaska, for a new contract period beginning 

October 1, 2014, with or without subsidy. Proposals should be filed no later than July 9, 2014. 

(See Appendix A for a map.)

Background

By Order 2012-11-15, November 16, 2012, the Department selected Grant Aviation, Inc. (Grant) 

to provide EAS at Akutan for an initial annual subsidy rate of $724,025 for the first six months 

of service, and $579,220 annually for the remainder of the contract term (through 

September 30, 2014). Under that contract, Akutan receives 12 nonstop round trips per week to 

Dutch Harbor with 9-seat Piper PA-31 Navajo aircraft. Grant began service to the community on 

November 28, 2012.

Unique Situation at Akutan

EAS at Akutan had traditionally been provided via the Akutan Seaplane Base. For years, that 

service was operated by Peninsula Airways, Inc. (PenAir) using a Grumman Goose aircraft, 

which was particularly suited to land on waters that are typical for the Aleutians that were too 

rough for other seaplanes to land on. However, the aircraft was very old with no suitable 

replacement, and, thus, its retirement was forthcoming.1 In September 2012, the Alaska 

Department of Transportation and Public Facilities commissioned a new airport (7AK) with a 

paved 4,500 foot runway, on Akun Island, about 7 miles from Akutan. Prior to the last EAS 

carrier-selection case, both the State and community indicated that they would prefer service to 

 

1 PenAir retired the aircraft in November 2012.

Essential Air Service at

AKUTAN, ALASKA

Under 49 U.S.C. §41731 et seq.

DOCKET DOT-OST-2000-7068
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the new airport rather than the seaplane base at Akutan. Under the current EAS contract, Grant 

provides service between Dutch Harbor and 7AK. Initially, the Aleutians East Borough 

subsidized a hovercraft operation to transport passengers, cargo, and mail between 7AK and 

Akutan. This service proved to be financially unsustainable. Currently, the community has 

contracted with a helicopter service to provide a link between 7AK and Akutan. While 

helicopter service has proven more reliable, it still presents a significant financial burden for the 

community. Under either scenario, passengers are required to buy a separate ticket, in addition 

to the EAS service, for passage between 7AK and Akutan. Because of this unique situation, the 

State has requested assistance through EAS in transporting passengers between 7AK and 

Akutan.

Request for Proposals

We are here requesting proposals from carriers interested in providing EAS at Akutan, with or 

without subsidy support, for a new contract period beginning October 1, 2014. Carriers should 

file their proposals no later than July 9, 2014. After that date, our staff will docket the proposals, 

thereby making them public. Shortly afterwards, we will provide a summary of the proposals to 

community officials and ask them to submit their final comments. We will give full 

consideration to all proposals filed in a timely manner.2

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

proposals will also be their final and only proposals. 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 solicit 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 not 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 present; however, we recommend they include information concerning proposed 

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

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

expenses. We strongly encourage clear, well-documented proposals that will facilitate their 

evaluation by the affected community and the Department.3

 

2 Carriers should not expect the Department to accept late fillings. In cases where a carrier proposes to provide EAS 

without subsidy and we determine that service can be reliably provided without such compensation, we typically do 

not proceed with the carrier-selection case. Instead, we simply rely on that carrier’s subsidy-free service as 

proposed.

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

to consider six factors: (a) service reliability; (b) contractual and marketing arrangements with a larger carrier at the 

hub; (c) interline arrangements with a larger carrier at the hub; (d) community views, giving substantial weight to 

the views of the elected officials representing the users; and (e) whether the carrier has included a plan in its 

proposal to market its service to the community, and; (f) the experience of the applicant in providing, in Alaska, 

scheduled air service or significant non-scheduled service. In addition, the Consolidated Appropriations Act, 2014, 

Public Law No. 113-76, provides that when selecting a carrier to provide EAS, the Department may consider the 
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As stated above, a unique situation exists at Akutan whereby the airport serving the community 

is located on a different island, without any ability to access it via roads. Rather than request a 

specific number of minimum weekly frequencies as we would in a typical solicitation for 

proposals, we will work with the State and community to craft a flexible solution.4 In 

recognition of the unique circumstances here, we are willing to entertain proposals for EAS that

would also contemplate connecting passengers between 7AK and Akutan. Because there is 

already a working helipad on Akutan, we would also consider proposals for nonstop helicopter 

service from Dutch Harbor directly to Akutan, thus eliminating the need for passengers (and 

freight and mail) to connect at 7AK for the seven-mile trip from 7AK to Akutan. 

As always, we encourage proposals that meet the community’s 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 the current service pattern if they envision other, potentially 

more attractive service possibilities with subsidy requirements that remain competitive –

different hubs, linking service to hubs with service to other communities, or longer terms for 

the contracted service. With respect to Akutan, a single carrier or two carriers presenting a 

joint proposal that would address the community’s air service needs may respond to this 

solicitation. As noted in footnote 2, the Department may consider the relative subsidy 

requirements when reviewing carrier proposals.

We will formally solicit the State and community’s views on any service options we receive 

before making a long-term carrier selection decision. The community 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 communities and meets the operational needs of the airline submitting the 

proposal.

Service and Traffic History

In order to assist carriers in developing traffic and revenue projections for their proposals, we 

have provided historical traffic in Appendix B. At Akutan, as with most of Alaska, freight and 

mail volumes on the outbound leg from the hub to the community far exceed those volumes in 

the other direction. Proposals for EAS at Akutan should provide sufficient capacity so that 

passengers, mail, and freight can be accommodated at a reasonable load factor on the critical 

outbound leg. 

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces, and nondiscrimination.5 Consequently, all carriers receiving 

 

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 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.

4 See 49 U.S.C. § 41732(b)(1)(B).

5 The regulations 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 -
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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 rate-term must also certify that they 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 Office of Aviation Analysis at (202) 366-5903.6

Community and State Comments

The communities and State are welcome to submit comments at any time. As noted earlier, we 

will provide a copy of the proposals to the civic parties and ask them to submit their final 

comments shortly after July 9, 2014, the due date for proposals.

This Order is issued under authority delegated in 49 CFR 1.25a(b) and re-delegated to the 

Director, Office of Aviation Analysis.

 

- 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).

6 The certifications are also available on the web at http://www.dot.gov/policy/aviation-policy/small-communityrural-air-service/essential-air-service. 
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ACCORDINGLY,

1. We request that carriers interested in providing Essential Air Service at Akutan, Alaska, 

submit their proposals, with or without subsidy requests, no later than July 9, 2014. The 

proposals should be e-mailed to: EAS@dot.gov with the title “Proposal to Provide EAS at 

Akutan, Alaska”;7

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

3. We will serve copies of this Order on the community of Akutan, Alaska, the Alaska 

Department of Transportation 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 385.31(a), must file such petitions within seven (7) 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 M. HOMAN

Director

Office of Aviation Analysis

(SEAL)

An electronic version of this document is available

at http://www.regualtions.gov

 

7 Questions regarding filings in response to this Order may be directed to A.J. Muldoon at (202) 366-1058 or 

albert.muldoon@dot.gov. 
APPENDIX A

Page 1 of 2

AREA MAP
APPENDIX A

Page 2 of 2
APPENDIX B

Historical Traffic at Akutan – T-100 Segment Report

Year Month Pax Freight (Lbs.) Mail (Lbs.) Year Month Pax Freight (Lbs.) Mail (Lbs.) Year Month Pax Freight (Lbs.) Mail (Lbs.)

2011 1 47 1,168 1,157 2011 1 408 3,245 12,117 2011 1 455 4,413 13,274

2011 2 66 450 473 2011 2 65 1,820 8,503 2011 2 131 2,270 8,976

2011 3 121 3,452 1,005 2011 3 138 2,868 11,303 2011 3 259 6,320 12,308

2011 4 111 40 953 2011 4 63 2,198 7,555 2011 4 174 2,238 8,508

2011 5 72 68 460 2011 5 104 5,671 5,318 2011 5 176 5,739 5,778

2011 6 56 0 982 2011 6 277 898 8,007 2011 6 333 898 8,989

2011 7 147 96 1,941 2011 7 166 3,871 10,534 2011 7 313 3,967 12,475

2011 8 82 543 704 2011 8 97 3,713 12,522 2011 8 179 4,256 13,226

2011 9 70 125 393 2011 9 98 2,863 8,453 2011 9 168 2,988 8,846

2011 10 79 311 1,590 2011 10 119 3,388 8,370 2011 10 198 3,699 9,960

2011 11 89 116 1,374 2011 11 76 1,944 6,987 2011 11 165 2,060 8,361

2011 12 78 189 527 2011 12 99 2,439 7,109 2011 12 177 2,628 7,636

1,018 6,558 11,559 1,710 34,918 106,778 2,728 41,476 118,337

2012 1 14 16 554 2012 1 63 1,314 10,442 2012 1 77 1,330 10,996

2012 2 81 15 1,636 2012 2 90 1,896 6,635 2012 2 171 1,911 8,271

2012 3 44 45 1,692 2012 3 53 2,482 10,615 2012 3 97 2,527 12,307

2012 4 50 0 867 2012 4 48 1,851 7,631 2012 4 98 1,851 8,498

2012 5 98 243 771 2012 5 119 4,292 6,371 2012 5 217 4,535 7,142

2012 6 96 0 285 2012 6 202 1,529 13,476 2012 6 298 1,529 13,761

2012 7 133 0 417 2012 7 179 6,273 9,976 2012 7 312 6,273 10,393

2012 8 43 0 258 2012 8 49 2,647 7,039 2012 8 92 2,647 7,297

2012 9 98 74 635 2012 9 88 2,470 16,590 2012 9 186 2,544 17,225

2012 10 70 15 915 2012 10 48 1,827 5,275 2012 10 118 1,842 6,190

2012 11 2 0 0 2012 11 15 0 3,720 2012 11 17 0 3,720

2012 12 77 170 75 2012 12 95 2,899 6,210 2012 12 172 3,069 6,285

806 578 8,105 1,049 29,480 103,980 1,855 30,058 112,085

2013 1 49 0 128 2013 1 190 3,754 8,967 2013 1 239 3,754 9,095

2013 2 36 0 0 2013 2 86 2,564 6,903 2013 2 122 2,564 6,903

2013 3 73 0 0 2013 3 99 1,806 9,879 2013 3 172 1,806 9,879

2013 4 27 876 233 2013 4 38 966 8,455 2013 4 65 1,842 8,688

2013 5 8 0 0 2013 5 13 0 0 2013 5 21 0 0

2013 6 18 0 880 2013 6 14 0 1,982 2013 6 32 0 2,862

2013 7 15 0 0 2013 7 5 0 510 2013 7 20 0 510

2013 8 27 0 0 2013 8 78 0 114 2013 8 105 0 114

2013 9 44 0 0 2013 9 122 466 1,389 2013 9 166 466 1,389

2013 10 71 20 23 2013 10 116 3,644 5,283 2013 10 187 3,664 5,306

2013 11 20 0 0 2013 11 96 4,441 8,218 2013 11 116 4,441 8,218

2013 12 42 0 84 2013 12 228 10,687 8,845 2013 12 270 10,687 8,929

430 896 1,348 1,085 28,328 60,545 1,515 29,224 61,893

2014 1 22 0 0 2014 1 364 3,571 10,069 2014 1 386 3,571 10,069

2014 2 14 0 0 2014 2 88 1,794 10,948 2014 2 102 1,794 10,948

2014 3 85 0 0 2014 3 123 5,576 9,945 2014 3 208 5,576 9,945

2014 4 388 0 100 2014 4 116 2,354 7,039 2014 4 504 2,354 7,139

509 0 100 691 13,295 38,001 1,200 13,295 38,101

2011 Total

2012 Total

2013 Total

2014 YTD

Origin and Destination

2011 Total

2012 Total

2013 Total

2014 YTD

Destination Akutan

2011 Total

2012 Total

2013 Total

2014 YTD

Origin Akutan
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 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 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 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 complete, 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 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.

Funds 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 Department will provide notice in 

writing to the carrier. 

All claims for payment, including any amended claims, must be submitted within 90 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 31st; August claims must be submitted by November 

30th, and so on.