O rder 2014

- 12

- 2

Served : December 3, 2014

U N I T E D S

T A T E S O F A

M E R I C A D E P A R T M E N T O F T R A N S P O R T A T

I O N UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 3 rd day of December , 20 1 4

Essential Air Service at

EL CENTRO, CALIFORNIA

Under 49 U.S. C. § 47131 et seq. DOCKET DOT

- OST

- 2008

- 0299



### ORDER REQUESTING PROPOSALS

Summary By this Order, the Department is requesting proposals from air carriers interested in pr oviding Essential Air Service ( EAS) at El Centro, California

, with or without subsi dy support , beginning May 1, 2015 . Proposals are due January 7 , 201 5

. (See Appendix A for a map. )

B a c k g r o un d By Order 201 3

- 1

- 2 , issued on January 2, 2013

, the Department selected SeaPort Airlines, Inc. (SeaPort) to provide subsidized EAS at El Centro

, using 9

- seat Cessna Caravan aircraft , with 29

nonstop round trips per week to San Diego

, from May 1, 2013 , through April 30, 2015 , at an annual subsidy rate of $ 1,943,751

.

That Order, as well as the complete public file for EAS at El Centro

, may be acce ssed online through the Federal Docket Management System at www.regulations.gov , by entering “DOT

OST

- 2008

- 0299 ” in the “ SEARCH for: Rules, Comments, Adjudications or Supporting

Documents:” field.

Legislative Ch anges that Affected El Centro The Federal Aviation Administration (FAA) Modernization and Reform Act of 2012 (Public

Law No: 112

- 95) amended 49 U.S.C. § 41731(a)(1)(B) to change the definition of “eligible place” for the purpose of receiving EAS. The ame ndment states that to be eligible, a community must maintain an average of 10 enplanements or more per service day, as determined by the Secretary, during the most recent fiscal year beginning after September 30, 2012. The legislation exempts locations in Alaska and Hawaii and communities that are more than 175 driving miles from the nearest large

- or medium

- hub airport. As El Centro is located within 175 miles of San Diego International Airport (SAN) , a large

- hub airport, it is required to meet the 10

-

en planement

- a

- day threshold for EAS to continue or otherwise face termination of its eligibility to receive EAS, barring a waiver from the Secretary.- 2

-

By Order 2014

- 4

- 26, issued on April 24, 2014, the Department issued a show

- cause Order directing interested parties to submit objections to the Department’s tentative findings that El

Centro enplaned fewer than 10 passengers per day. In response to that Order, the Department received objections from the community, but none of those objections disputed our find ings that

El Centro enplaned fewer than 10 passengers per day during FY 2013.

B y Order 2014

- 6

- 6, issued on June 24, 2014, the Department made final its tentative decision in

Order 2014

- 4

- 26, thereby terminating the EAS eligibility of El Centro . On July 2 2, 2014, Mr. Ralph Cordova, Jr., Imperial County Executive Office r
, submitted an application for a waiver on behalf of the community of El Centro

.

By Order 2014

- 9

- 21, issued on September 26, 2014, the Department granted the waiver pet ition

submitted on behalf of El Centro . That Order states that El Centro ’s compliance with 49 U.S.C. § 41731(a)(1)(B) will be re

- assessed based on Fiscal Year 2015 data (October 1, 2014, through September 30, 2015).

Request for Proposals

W e are here requesting proposals from air carriers interested in providing EAS at El Centro

, with or without subsidy support , for a new period beginnin g May 1 , 201 5 . Air carriers should file their proposals no later than January 7, 2015 . After that date, our staff will docket the propos als, thereby making them public. Additionally, we request each air carrier serve a copy of its proposal on the civic parties at El Centro and on the other applicants. Shortly afterwards, we will provide a s ummary of the proposals to the community and ask them to submit any formal

comments on this carrier

- selection case. We will give full consideration to all proposals that are timely filed. 1

The Department is here providing interested air carriers with some basic information to serve as guidance when they prepare their proposals, but the Department 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 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 dat a supporting their subsidy requests, including information on their projected expenses and revenues. The Department strongly encourage clear, well

- documented proposals that will facilitate their evalua tion by the affected communities and the Department. 2

1 Air carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide

EAS without subsidy and the Department determine s that service can be reliably provided without such compensation, the Department usually do es not proceed with the carrier

- selection case. Instead, the Department simpl y relies on that carrier’s sub sidy

- free service as proposed.

2 In selecting a carrier to provide subsidized EAS for an eligible place not in Alaska, 49 U.S.C. § 41733(c)(1)

directs the Department to consider five factors: (a) service reliability; (b) contractual and marketing arrange ments 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- 3

-

Proposals should provide sufficient capacity to accommodate historical passenger levels. Specific ally, the Department expects proposals consisting of two round trips per day (12 a week) if 9

- seat or larger aircraft is proposed. If smaller aircraft are pro posed, the Department may consider additional frequencies than what is described above. The Department

encourage s proposals that meet these guidelines in an efficient manner. Air carriers are also welcome to propose more than one service option, if they choose. They also need not limit themselves to these requirements if they envision other, potentially more attractive service possibilities

-- different hubs or length of contract, for example

-- with subsidy requirements that remain competitive.

In orde r to assist air carriers in developing traffic and revenue projections for their proposals, the Department has summarized historical passenge r levels at El Centro in Appendix B. In the most

recent 12

- month period for which data are available ( October 1

, 2 013

, through September 30, 2014 ) El Centro generated 4,591 total origin and destination passengers, or an average of 7.3 enplanements per day. 3

Interested air carriers should prepare their propo s al with every expectation that their initial proposal will a lso be their final and only proposal. The Department retain s the discretion to negotiate proposals with air carriers when deemed desirable; in such cases the Department will give all applicants the same opportuni t y. The Department also retain s the discre tion to reject outright all unreasonab l e or unrealistic proposals and solicit a new round of proposals. However, negotiation or rejection will remain on l y occasional exceptions to the rule.

Special Discussion on Eligibility The Department wish e s to remin d El Centro and any perspective EAS air carrier about the $200 per passenger statutory limit 4 because the community is located fewer than 210 miles from the nearest large

- or medium

- hub airport (SAN)

. Based on the most recent data available, (October 1, 2 013, through September 30, 2014), El Centro’s subsidy per passenger is $393, above the $200 cap. The Department fully expects the community to work cooperatively with prospective air carriers to ensure subsidy rates are in compliance with the $200 per pas senger cap to remain eligible for EAS. 5

included a pla n in its proposal to market its service to the community. In addition, the Consolidated and Further Continuing Appropriations Act, 2012, Public Law No. 113

- 7 6, and continued in the Continuing Appropriations Resolution, 2015, Public Law No. 113

- 164 , provid es that when selecting a carrier to provide EAS, the Department may consider the relative subsidy requirements, thus codifying a factor that has been considered since the inception of the program. Interested carriers should also be arare that the Departme nt’s general provisions governing EAS will be included in the selection Order as part of the Department’s authorization of subsidy for the selected service. Appendix C of this Order contains those general provisions.

3 In calculating enplanements per day

, the Department take s total annual origin and destination passenger numbers and divide by two to get passengers in one direction (enplanements at the EAS community), and then by 313 days to get average daily enplanements at the EAS community.

4 Congress first established the $200 ceiling under P.L. 101

- 164 for fiscal year 1990, and reestablished it in fiscal years 1994

- 1999. The ceiling was made permanent by P.L. 106

- 69, the Department of Transportation and Related Agenc ies Appropriations Act of 2000

. 5 On May 1, 2014, a Notice of Proposed Enforcement Policy on the $200 per passenger subsidy cap was published in the Federal Register (Volume 79, Issue 84). After a 60

- day public comment period and review, the Department

iss ued a final notice of enforcement policy on the $200 cap in October 2014. All communities in the 48 contiguous States within 210 miles of the nearest large

- or medium

- hub airport receiving subsidized air service under EAS- 4

-

O t h e r Air Ca rr i e r R e qu i reme n t s The Department is responsible for implementing various Federal statutes governing l obbying

activities , drug

- free workplaces and nondiscrimination

. Consequent l y, all air carriers

receiv ing Federal subsidy to support EAS must certify that they are in compliance with Department regulations regarding drug

- free workplaces and nondiscrimination, and those air

carr i ers whose subsidies exceed $100,000 over the life of the rate term must also ce rtify that they are in compliance with the regu l ations governing lobbying activities. All air carriers that plan to submit proposals involving subsidy should submit the required certifications along with their proposals. Interested air carriers requiring more detailed infor m ation regarding

the s e requirements, as well as copies of the certifications, should contact the Off i ce of

Aviation Ana l ysis at (202) 366

- 5903. The Department is prohibited from paying subsidy to

air carriers that do not submit these d ocument s

. 6

C o m m un i t y C o m m e n ts
Civic officials and the State are welco m e to submit comments at any time. The Department

encourage s prospective applicants to contact the communi t y before they submit their proposals so that they can tailor them to the commu ni t y’s needs, as they will not be ab l e to amend them after the due date. As noted earlier, the Department’s staff will provide a copy of the propo s als to the civic parties and ask them to submit their final comments short l y after January 7, 2015 , the due da t e for air carr i er proposals.

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

- delegated to the Director, Office of Aviation Analysis.

ACCORDI N G L Y,

1. The Department request s that air carriers interested in providing E sse ntial A ir S erv i ce at El Centro, California

, submit their proposals, with or without subsidy requests, no later than January 7, 2015 . The proposals should be emailed to: EAS@dot.gov with the title “Proposal

to Provide E ssential Air Service at El Centro, California ; ” 7

2

. Docket DOT

- OST

- 2008

- 0299 will remain open until furt her Order of the Department; and

3

. The Department will serve cop i es of this Order on the civic offic i als of El Centro,

California

, Imperial County

, California, and the service list for this docket

.

program have until September 30, 2 015, based on data from October 1, 2014, through September 30, 2015, to ensure compliance with the $200 subsidy cap or face termination of subsidy eligibility.

6 The regulations applicable to these areas are: (1) 49 CFR Part 20

– New restrictions on lobbyi ng; (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

activiti es 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 requirem ents for drug

- free workplace (grants). The certifications are available

on the web at http://www.dot.gov/policy/aviation

- policy/small

- communit y

- rural

- air

- service/essential

- air

- service

. 7 Questions regarding filings in response to this Order should be directed to Mr. Scott Faulk at scott.faulk@dot.gov or (202) 366

- 9967.- 5

-

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 immediately, and the filing of a petition for review shall not preclude its effectiveness.

By:

TODD M. HOMAN

Director Office of Aviation Analysis

An electronic version of this document is available

online at www.regulations.gov.Appendix A



### A R EA M AP

M ap s g ene r a t e d b y t h e G r eat Ci r cle M appe r

- c op y r i g h t © Ka r l L. S w a r t z

.Appendix B



### El Centro, California 1

Year Quarter Enplanements Deplanements Total

2011 4 1,821 1,945 3,766

2012 1 1,620 1,646 3,266

2012 2 1,634 1,618 3,252

2012 3 1,290 1,361 2,651

Total 6,365 6,570 12,935

Year Quarter Enplanements Deplanements Total

2012 4 947 1,028 1,975

2013 1 789 821 1,610

2013 2 682 622 1,304

2013 3 543 518 1,061

Total 2

, 961 2,989 5,950

Year Quarter Enplanements Deplanements Total

2013 4 616 605 1,221

2014 1 669 554 1,223

2014 2 703 618 1,321

2014 3 426 400 826

Total 2,414 2,177 4,591

1 Source: Bureau of Transportat ion Statistics; Schedule T

- 100.Appendix C

Example of General Terms and Conditions for Eassential Air Service

The air c a rr i e r un d er st a nds t h a t it m a y f o rfe it its c omp e ns a tion f or a n y f li g hts th a t it do e s not

op era te in c o n f o r m a n c e with the t er ms a nd stipul a tions of the ra te Order

, i n c luding the s er vi c e pl a ns outlin e d in the Order a nd a n y oth e r s i g ni f i c a n t e l e m e nts of the re qui re d s er vi ce , without

p r ior a p p r ov a l. The air c arr i e r und e r st a nds th a t a n a i r cr a f t t a k e

- o f f a nd l a nding a t its s c h e du l e d

d e stin a tion c onstitut e s a c ompl e t e d f li g ht; a bs e nt a n e x pl a n a tion suppo r ting subsi d y e li g i b ili t y f o r

a f l i g ht th a t h a s n ot b ee n c ompl e t e d, su c h a s cer t a in w ea th e r ca n ce ll a tions, o n l y c ompl e t e d f li g hts

a r e c onsid ere d e l i g ible f or su b si d y

. I n a ddition, if the air carr i e r d o e s not s c h e dule or o p era t e its

f li g hts in f ull c on f o r m a n c e with the Order f o r a s i g ni f i ca nt p e r iod, it m a y j e op ar di z e its e nti r e subsi d y c l a im f or t he p er iod in qu e stion. I f the air c a rr i e r c ont e mpl a t e s a n y su c h c h a ng e s b e y ond

the s c ope o f the Order du r ing the a ppli ca ble p e r iod of th e se ra t e s, it must f i r st noti f y the O ff i c e of

Avi a tion An a l y sis in w r iti n g a nd r ece ive w r itt e n a pp r o v a l f r om the D e p a r tm e nt to be e nsu re d o f

f ull c omp e ns a tion. S hould c i rc umst a n ce s w ar r a n t , the D e p ar tm e nt m a y l o c a te a nd s e l e c t a

re pl a ce m e nt air c arr i e r to p r ovide s er vi c e on th e se r out e s. The air c a rr i e r must c ompl e te a ll

f li g hts th a t ca n b e s a f e l y op era t e d; f l i g hts th a t ov e rf l y points f o r l ac k of t r a f f ic will not be

c omp e ns a t e d. I n d e t er m i ning wh e t h e r subsi d y p a y m e nt f o r a d e v i a ting f l i ght should be a djust e d

or dis a llow e d, t he D e p a r tm e nt will c onsid e r the e x t e nt to whi c h the g o a ls of the p r og ra m a r e m e t

a nd the e x t e nt of acce ss to the n a tion a l a ir t ra nspo r t a tion s y s t e m p r ovid e d to the c ommuni t y

.

I f the D e p ar tm e nt unil a t e ra l l y
, e ith e r p a r ti a l l y or c ompl e t e l y , t er min a t e s or re du ce s p a y m e nts f or

s e r vi c e or c h a ng e s s er vi c e r e qui re m e nts a t a sp ec i f ic lo c a tion p r ovid e d f or und e r this Order, th e n,

a t the e nd of the p e r iod f or whi c h the D e p ar tm e nt d o e s m a ke p a y m e nts in the stipul a t e d a mounts

or a t the stipul a t e d s er vi c e l e v e ls, the air c a rr i e r m a y cea se to p r ovide s er v i c e t o th a t sp ec i f ic

lo c a tion without re g a r d to a n y r e qui re m e nt f or noti c e of su c h c e ss a tion. Those a djustm e nts in the

l e v e ls of subsi d y a nd/or s er vi c e th a t ar e mutu a l l y a g r ee d to in w r iting b y the D e p ar tm e nt a nd air

ca r r i e r do not c on s titute a tot a l or p ar ti a l re d u c tion or ce ss a tion of p a y m e nt.

S ubsi d y c ont r a c ts ar e su b j ec t to, a nd in c o r po r a te b y r ef e re n c e
, r e l e v a nt st a t ut e s a nd D e p ar tm e nt

r e g ul a tions, a s th e y m a y be a m e nd e d fr om time to tim e . How e v er
, a n y su c h st a tut e s, r e g ul a tions,

or a m e ndm e nts th ere to sh a ll not op era te to c ont r o v er t the f o r e g oi n g p ar a g r a ph.

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 pa yment 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 av ailable 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 claim ed. 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.