Order: 2010-1-1 Served: January 4, 2010



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 1 st day of January, 2010

Essential Air Service at

WEST YELLOWSTONE, MONTANA

under 49 U.S.C. 41731 et seq. Docket DOT-OST-2003-14626

ORDER REQUESTING PROPOSALS

Summary By this order, the Departm ent is requesting proposals from carriers interested in providing essential air service (EAS) at West Yellowstone, Montana, for the next two summer seasons from June 1 through September 30, with or w ithout subsidy. Proposals are due February 5, 2010. (See Appendix A for an area map.)

Background By Order 2008-1-4, January 10, 2008, the Departm ent selected SkyWest Airlines, Inc. d/b/a Delta Connection (SkyWest) to provide subsidized EAS at West Yellowstone for the 2008 and 2009 summer seasons at a subsidy rate of $431,996 for each four-month season. Under that order, SkyWest provides 14 nonstop round trips per week to Salt Lake City as Delta Connection,

with 30-seat Embraer Brasilia aircraft.

Request for Proposals In order to give the selected carrier sufficient tim e to market its services, we request that any carriers interested in providing essential air service at West Yellowstone, with or without subsidy, file their proposals no later than February 5, 2010. After that date, our staff will docket proposals, thereby making them public, and direct each carrier to serve a copy of its proposal on the civic parties and- 2 -

other applicants. Shortly afterwards, we will provide a sum mary of the proposals to the community and ask them to submit their final comments. We will give full consideration to all proposals that are timely filed. 1

Interested 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; in such cases, of course, we will give all applicants the same opportunity. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and solicit a new round of proposal s. However, negotiation or rejections are only occasional exceptions to the rule.

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, 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 communities and the Department. 2

With respect to West Yellowstone, we ask that carriers submit proposals for two round trips per day (14 total round trips per week) with 30-seat or larger aircraft or three round trips per day (21 total round trips per week) with 19-seat aircraft to Salt Lake City or Denver. We will also entertain proposals to serve other hubs that provide access to the national air transportation system in order to give the Department and the community as broad an array of proposals as possible from which to choose. Of course, as always, we will formally solicit the 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 community and meets the operational needs of the airline interested 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 attractive service possibilities -- different hubs, for example -- with subsidy requirements that remain competitive.

1 Carriers should not expect the Depart ment to accept late filings. In cases where a carrier proposes to provide essential air service without subsidy and we determin e that service can be reliably provided without such compensation, we do not proceed with th e carrier-selection case. Instead, we si mply rely on that carrier’s subsidyfree service as proposed.

2 In selecting a carrier to provide subsidized essential air se rvice, 49 U.S.C. 41733(c) (1) directs us to consider four factors. (1) service reliability; (2) contractual and marketing a rrangements with a larger carrier at the hub; (3) interline arrangements with a larger carrier at the hub; and (4) community views. In addition
, 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 subsidy for the selected service. Appendix C of this order contains those general provisions.- 3 -

Carrier proposals should be subm itted to the Department with all materials merged into a single document. The document will be published on Regulations.gov and each page should be

formatted to be viewed online.

Service and Traffic History During the 2009 summer season for roughly June 1 through September 30, the most recent period for which traffic data are available, West Yellowstone averaged 34.6 enplanements a day. 3 In order to assist carriers in making their traffic and reve nue forecasts, we have included historical traffic data in Appendix B.

Other Carrier Requirements The Departm ent 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 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. 5

Community and State Comments

The com munity and state are welcome 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 February 5, 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.

ACCORDINGLY,

1. W e request that carriers interested in providing essential air service at West Yellowstone, Montana, during June 1 through September 30, 2010, and 2011, submit their proposals, with or without requests for subsidy, no later than February 5, 2010. The proposals should be e-mailed

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 w eekdays and weekends each quarter, except as noted.

4 The regulations applicable to these areas are: (1) 49 CFR Part 20 – New restrictions on lobbying; (2) 49 CFR Part

21 – Nondiscrimination in fede rally-assisted programs of the Department of Transportation – Effectuation of title VI of the Civil Rights Act of 1964; 49 CFR Part 27 – Nondi scrimination on the basis of disability in programs and activities receiving or benefiting from Fe deral financial assistance; and 14 CF R Part 382 – Nondiscrimination on the basis of disability in air travel; and (3) 49 CFR Pa rt 29 – Government-wide de barment and suspension (nonprocurement) and government-wide require ments for drug-free workplace (grants).

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

to EAS@dot.gov, with the title: “Proposal to Provide Essential Air Service at West Yellowstone, Montana, Docket DOT-OST-2003-14626; 6

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

3. We will serve copies of this order on the Mayor and operations manager of the Town of West Yellowstone, the Montana Department of Trans portation, Aeronautics Division, and the parties listed in Appendix D.

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 M. HOMAN

Director Office of Aviation Analysis

(SEAL)

An electronic version of this document is available on the Internet at http://www.regulations.gov

6 Questions regarding filings in response to this orde r may be directed via e-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 Planet Profitability Forecasti ng System and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Appendix B

Traffic History*

Year Quarter Airport Outbound Inbound Total traffic

2005 2 WYS 676 838 1,514

2005 3 WYS 3,690 3,456 7,146

2006 2 WYS 574 673 1,247

2006 3 WYS 3,446 2,945 6,391

2007 2 WYS 610 797 1,407

2007 3 WYS 3,219 2,833 6,052

2008 2 WYS 719 833 1,552

2008 3 WYS 3,461 3,017 6,478

2009 2 WYS 639 771 1,410

2009 3 WYS 3,356 3,679 7,035

Average daily enplanements at West Yellowstone – 34.6**

*Source – T-100 Market Report, Passengers in Scheduled Passenger Service, includes traffic for SkyWest Airlines only.

**Average daily enplanements is total traffic for the most recent 2 quarters (8,445 for 2Q2009 and 3Q2009) divided by 122 service days (June 1 – September 30) 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 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 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.

Funds are not currently available for perf ormance under this solicitation beyond [DATE]. The Government’s obligation for performance 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 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 funds are not made available for performance beyond [DATE], the carrier will receive notice in writing by the Department.

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.

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 Sunshine, Inc. Jet Air, Daniel Wolford Air Sunshine, Mirmohammad Ad ili Kenmore Air, Tim Brooks Air West, Inc., John Raatz McCall Aviation and Salmon Air, Dan Scott Air Wisconsin, Annette Daly McCall Aviation, Michelle Airline Associates, Bill Mishk Mesa, Jonathan Ornstein Alaska Airlines, Jeff Cole Mesa, Michael Lotz Alaska Airlines, Sandy Sinick Mesa, Mike Holcomb Allegiant Air, Robert Ashscroft Mesaba, John Spanjers American Airlines, Carl Nelson Mesaba, Max Shemesh American Eagle, Jeffrey Hartz Midstar Airlines, Jeffrey Fonner Atlantic Southeast, Jon Lindlief Midwest Airlines, Anthony Intravia Atlantis Southeast, Roger Weston Midwest Airlines, Greg Aretakis Bemidji Aviation, Cori Rude Midwest Airlines, J.C. Augustson Bemidji Aviation, Arlen Rinkenberger MN Aviation, Jose Maldonado Cape Air, Andrew Bonney Multi Aero, Darnea Cape Air, Dan Wolf Multi Aero, Shane Storz Cape Air, J. Flaherty Northwest, Tim McDonald Classic Aviation, Tony Henderson NYDC, Henok Araya Colgan Air, Mike Colgan OST, Brian Swanson CommutAir, Andy Price OST, Dennis DeVany CommutAir, Joel Raymond OST, Kevin Adams Consultant, Robert Silverberg OST, Kevin Schlemmer Continental, Bruce Keiner OST, Michael Martin Continental, Dan Weiss OST, Renee Williams Continental, Lorry Halloway Pacific Wings, Frank Ford Delta, Amy Martin Pacific Wings, Greg Kahlstorf Delta, Dan Shuman PenAir, Danny Seybert Delta, Jeff Morgan PenAir, Scott Bloomquist Delta, Joe Esposito Pinnacle Airlines, Joe Williams Delta, Karen Zachary Pinnacle Airlines, Phil Reed Delta, Sascha Vanderbellen Public Charters, Jim Gallagher

Dorado Jets Scenic, Mary Schneider Dorado Jets, Mark McKenna Scenic, Mitzi Daines Era Aviation, Mike Lenorman Seaborne Airlines, Wayne D'Amico Executive Airlines, Kate Soled SeaPort Airlines, Jim Day Frontier Flying, Bob Hajducovich SeaPort Airlines, Rob McKinney Gem Air, Dan Schroeder Shuttle America, Jerry Balsano Gem Air, JoAnn Wolters SkyWest, Eric Christensen Great Lakes, Chuck Howell SkyWest, Michael Thompson Great Lakes, Doug Voss Sovereign Air, Bob Karns Great Lakes, Greg Stephens Sovereign Air, Lois R. Barton Gulfstream, Dave Hackett Tradewind, Eric Zipkin Gulfstream, Mickey Bowman TransStates, Fred Oxley Gulfstream, T. Cooper TransStates, Gerry Wigmore Homeland Security, David Bernier United, Alicia Gabriel Homeland Security, Randy Webb United, James Starnes Horizon Air, Dan Russo US Airways, Benjamin Slocum Horizon Air, Jennifer Thompson US Airways, Howard Kass Horizon Air, Jeff Cole US Airways, Jason Reisinger ICEPR, Luis Irizarry Warbelow s Air Ventures, Art Warbelow Island Air Charters, Linda House Wings Air (Air Greco), Aaron Goerlich