Order 2012

- 4

- 19 Served: April 13, 2012



### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on the 13 th of April, 2012

Essential Air Service at

MERIDIAN , MISSISSIPP I

Under 49 U.S.C. 41731 et seq

. DOCKET DOT

- OST

- 2008

- 0112

ORDER REQUESTING PROPOSALS Summary By this Order , the Department is requesting proposals by May 3 , 2012

, from carriers interested in providing Essential Air Service (EAS) at Meridian

, Mississip pi

, for the two

year period beginning July 1 , 2012

, with or without subsidy.

Background By Order 20 10

- 5

- 28

, the Department selected SkyWest Airlines, Inc., d/b/a Delta Connection

, 1 to provide EAS at Meridian

, Mississippi

, through June 30 , 2012. Annual subsidy and service levels were set as 1 3 nonstop round trips per week to Atlanta and $686,489 annual subsidy, with 5 0

- seat CRJ

- 200 aircraft.
Request for Proposals As the end of the current rate term approach es , we are requesting proposals from carriers int erested in providing service at Meridian

, with or without subsidy, for the two

- year period beginning July 1 , 2012 . Carriers should file their proposals by May 3 , 2012

. S taff will then docket the proposals, thereby making them public. Shortly afterwa rds, we will provide a summary of the proposals to the community and S tate and as k 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 ev ery 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 unreal istic proposals and , if necessary, solicit a new round of proposals. However, we anticipate that negotiation or rejection will remain only occasional exceptions to the rule.

1 ExpressJet Airlines, Inc., a wholly

- owned subsidiary of SkyWest, actually performs the service.
2 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide Essentia l Air Service 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.- 2

-

We are here providing interested carriers with some basic information to serve a s 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, 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 evaluation by the affected community and the Department. We anticipate applying our usual carrier

- selection criteria and the general provisions governing subsidy payments for Essential Air Servic e

. 3

With specific respect to Meridian , we expect proposals consisting of two nonstop round trips per day (1 3 a week) if 3 0

- seat or larger equipment are pro posed; three (18 a week) or four (24 a week) round trips per day with 19

- seat aircraft ; and more f requencies with smaller aircraft . We may subsidize additional frequencies if the affected community is served in conjunction with another community.

We encourage proposals that meet the community’s requirements in an efficient manner. Carriers are als o 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

– different hubs, or longer terms for the contracted service

– with subsidy requir e ments that remain competitive.

We encourage carriers to work with the community in advance of the due date for proposals when proposals can still be adjusted so that they can craft them to best meet the community’s needs. As always, we will fully consider the community’s views before making a long

- term carrier

- selection decision.

Filing Format 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 Regulations.gov, each page should be individually formatted to be viewed online.

Historical Traffic In order to assist carriers in making their traffic and revenue projections, we have included historical traffic for the com munity in Appendix B

. For the year ended January 3 1 , 201 2

, Meridian generated 33,087 passengers, or 53 enplanements per day.

3 In s electing a carrier to provide subsidized Essential Air Service , 49 U.S.C. 41733(c) (1) directs us to consider four fa ctors: (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub; (3) interline arrangements wit h 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 be included in the selection Order as part of our authorization of sub sidy for the selected service. Appendix C of this Order contains those general provisions.- 3

-

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 to support Essential Air Service 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, the selected carrier will be required to submit them in order to receive subsidy. Interested carriers requiring more detailed information regarding these requirements, as well as copies of the certifications, should contact the Office of Aviation Analysis at (202) 366

- 5903 . The Department is prohibited from paying subsidy to carriers that do not submit these documents.

Community Comments Civic officials and the State are welcome to submit comments on the proposals at any ti me. As noted earlier, we will provide a summary of the proposals to the civic parties and ask them to submit their final comments shortly after May 3 , the due date for carrier proposals.

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

- delegated to the Directo r, Office of Aviation Analysis.

ACCORDINGLY,

1

. The Department requests proposals from carriers interested in providing Essential Air Service at Meridian

, Mississippi . Carriers should submit their proposals, with subsidy i f necessary, by May 3 , 2012 . Proposals should be emailed to EAS@dot.gov, with the title “Proposal to Provide Essential Air Service at Meridian

, Docket DOT

- OST

- 2008

- 0112

. ” Questions regarding filings may be directed to Kevin Adams at 202

- 366

- 1047 or Kevin .Adams@dot.gov ;

2

. Th is D ocket will remain open until further o rder of the Department; and

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

-

3 . We will serve this Order on the s ervice l ist for th is Docket.

Persons entitled to petition the Department for review of this Order under the Department’s Reg ulations, 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 M. HO MAN Director Office of Aviation Analysis (SEAL)

An electronic version of this document is available on the World Wide Web at http://www.regulations.govAppendix A

Nonstop Great Circle Miles from Meridian MEM

, Memphis 200 MSY, New Orleans 1 85 ATL, Atlanta 2 67 JAN, Jacks on 7 8Appendix B

Historical Traffic at Meridian, Mississippi (MEI) Source: T-100 Market Report

Year Month Origin Dest O&D
2009 2 1,470 1,277 2,747
2009 3 1,837 1,574 3,411
2009 4 1,519 1,554 3,073
2009 5 1,766 1,484 3,250
2009 6 1,677 1,614 3,291
2009 7 1,784 1,611 3,395
2009 8 1,489 1,559 3,048
2009 9 1,381 1,346 2,727
2009 10 1,484 1,497 2,981
2009 11 1,378 1,414 2,792
2009 12 1,325 1,131 2,456
2010 1 1,053 1,188 2,241 18,163 17,249 35,412

2010 2 1,117 1,190 2,307
2010 3 1,501 1,447 2,948
2010 4 1,412 1,285 2,697
2010 5 1,571 1,473 3,044
2010 6 1,381 1,284 2,665
2010 7 1,450 1,499 2,949
2010 8 1,367 1,296 2,663
2010 9 1,440 1,427 2,867
2010 10 1,534 1,415 2,949
2010 11 1,472 1,440 2,912
2010 12 1,474 1,477 2,951
2011 1 1,111 1,171 2,282 16,830 16,404 33,234

2011 2 1,201 1,125 2,326
2011 3 1,557 1,562 3,119
2011 4 1,371 1,233 2,604
2011 5 1,770 1,620 3,390
2011 6 1,579 1,328 2,907
2011 7 1,471 1,359 2,830
2011 8 1,351 1,342 2,693
2011 9 1,329 1,271 2,600
2011 10 1,454 1,305 2,759
2011 11 1,385 1,394 2,779
2011 12 1,500 1,325 2,825
2012 1 1,082 1,173 2,255 17,050 16,037 33,087Appendix 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 Ord er , 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 fl ight; 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 operat e 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 th ese 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 pro vide 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, ter minates 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 a nd 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

s tatutes, 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 Department’s obligation for performance under this solicitat ion 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 the Government for any payment may arise for performance under this Order beyond [DATE], until fund s are made available to the Department for performance. If funds are not made available for performance beyond [DATE], the carrier will receive notice in writing by the Department.

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