2010
- 7
- 12 Served: July

15, 2010 

### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION 

### OFFICE OF THE SECRETARY WASHINGTON, D.C.

Is sued by the Department of Transportation on the 15 th of July , 2010 Essential Air Service at GREENVILLE , MISSISSIPPI Under 49 U.S.C. 41731 et seq . DOCKET OST - 2008 - 0 2 09

ORDER RE SELECTING CARRIER Summary By this order, the Department is selecting Mesaba Aviation , Inc., d/b/a Delta Connection , (Mesaba) to provide essential air service at Greenville , Mississippi , at an annu al subsidy rate of $ 1,606,662 1 thru September 30 , 2011, or 180 days after Mesaba informs the Department of the retirement of the Saab aircraft Mesaba proposed for this service, whichever comes sooner. Background Order 2008
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- 23 , August 25, 2008, selected Mesaba to provide 1 4 nonstop round trips per week to Memphis with 3 4
- seat Saab 340 aircraft, for the two
- ye ar period ending September 30 , 2010, at the annual subsidy

rate of $1, 355,693 . In anticipation of the end of the current contract on September 30 , b y Order 2010
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- 2 we requested proposals for replacement service, with proposals due June 3 . We received timely filed proposal from two carriers, Alaska Juneau Aeronautics, Inc., d/b/a Seaport Airlines (SeaPort), and Mesaba, and requested comments from the community . On June 23 we received comments from the community, and the issue is ripe for decision. SeaPort SeaPort proposes to provide a total of thirty (30) nonstop round trips per week: twelve to New Orleans and eighteen to Memphis

– for a total annu al subsidy of $2,339,882 the first year and $2,409,325 the second year. All service would be with 9
- seat, single
- engine, pressurized, turboprop Pilatus PC
- 12 aircraft.
1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.- 2
-

Mesaba Mesaba proposes to continue its current level of service

– fourteen nonstop ro und trips per week to Memphis

– for a to t al annual subsidy of $1,606,662. All service would be with 34
- seat Saab 340s, a twin
- engine, turboprop, and pressurized aircraft. As part of its proposal, Mesaba indicated that it would be : “retiring its fleet o f Saab 340 a ircraft before the end of 2011 , and therefore cannot commit to a

..... standard 2
-year period. Accordingly, Mesaba hereby amends its proposal to stipulate an end to the proposed subsidy rate on the earlier of October 1, 2011 , or 180 days after M esaba informs the Department of the retirement of the Saab aircraft used for this service. At the appropriate time, Mesaba intends to submit a new bid proposal based on the aircraft that are available [at the time] in Mesaba's fleet. ” Community Comments On June 10 we requested community comment s regarding the carrier selection at Greenville
. W e received a joint c omment from the mayor and airport manager. The community indicated they had examined the SeaPort proposal , and , al though they appreciated th at carrier’s potential for providing them service, they thought that Mesaba was a b e tter choice for them at this time. Decision We have reviewed each carrier’s proposal and the community ’s comments, and have decided to select Mesaba
. This case is straight forward
. As we noted in our letter to the community, Greenville’s EAS calls for service with 15
- seat, twin
- engine aircraft , “ Thus it is likely we would only select SeaPort if the community waive s those assurances.” The community has not waived those assurances, Mesaba’s proposal appears reasonable for the service it proposes, and so we will reselect Mesaba. Mesaba conditions its proposal on being selected for something less than the ty pical two
- ye ar period. As Mesaba indicates, we ty pically select a car

rier for two
- ye ar periods, balancing the need s of the carrier and community for a reasonable planning period, against the need to discipline program costs through the competitive
- bidding process
. However, n othing requires us to select a carrier for a two
- ye ar period, and so we will select Mesaba for the period October 1, 2010, thru September 30 , 2011, or for up to 180 days after it files a notice to terminate service , whether due to its anticipated disposal of its fleet of Saab 340 aircraft , or any other reason, whichever occurs sooner . 2 Also, we note that any Mesaba notice to suspend service would not obviate its requirement to continue to provide EAS during our processing of a carrier
- selection proceeding. Carrier Fitness 49 U.S.C. 41737(b) requires that DOT find an air carrier fit, willing, and able to provide reliable service before DOT may

subsidize it to provide essential air service. Mesaba Aviation, Inc., is subject to the Department’s continuing fitness requirements, and no information has come to our 2 In the event Mesaba d oes not dispose of its Saab 340 aircraft or file a notice , we would consider extend ing this contract for the typical two
- year period, thru September 30, 2012 , after consulting with the carrier and community
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-

attention that would cause us to question the carrier ’ s fitness at this time. DOT has contacted the Federal Aviation Administration, and it has raised no concerns that would negatively affect our fitness finding s . DOT therefore concludes that the c arrier remain s fit to conduct the operations proposed here. This order is issued under authority delegated in 49 CFR 1.56a(f). ACCORDINGLY, 1. We select Mesaba Aviation, Inc. , d/b/a Delta Connection , to provide essential air service at Greenville , Miss issippi ; 2 . We set the final rate of compensation for Mesaba Aviation , In c., for the provision of essential air service at Greenville , Mississippi , as described in Appendix C ; 3 . We direct Mesaba Aviation , In c., to retain all books, records, and other source and summary documentation to support claims for pay ment, and to preserve and maintain such documentation in a manner that readily

permits its audit and examination by representatives of the Department. Such documentation shall be retained for seven ye ars or until the Department indicates that the records may

be destroyed, whichever comes first. Copies of flight logs for aircraft sold or disposed of must be retained. The carrier may forfeit its compensation for any claim that is not supported under the terms of this order; 4 . We find that Mesaba Aviation , In c., continue s to be fit, willing and able to operate as a certificated carrier and capable of providing reliable essential air service at Greenville , Mississippi ; 5 . Th is docket will remain open until further order of the Department; and 6 . We will serve copies of this order on the Mayor and Airport Manager of Greenville , Miss issippi , Alaska Juneau Aeronautics, Inc., d/b/a Seaport Airlines, and Mesaba Aviation , Inc . By , Susan L. Kurland Assistant Secretary

for Aviation and International Affairs (SEAL) An electronic version of this document is available on the W orld W ide W eb at http://www.regulations.govAppendix A

Nonstop, Great Circl e Miles from Greenville ( GLH ) Atlanta, ATL 378 Memphis, MEM 122 New Orleans, MSY 245 Jackson, JAN 97 Birmingham, BHM 244 Columbus, GTR 138 Hattiesburg, PIB 1 69

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

Proposal of Mesaba Aviation, Inc., Essential Air Service at Greenville, Mississippi, Docket 2009-0209 Round trips per Week 14 Passengers 9,913 Block Hours 1,272 Departures 1,416 1/ Completion Factor 0.97 Passenger Revenue $743,505 Other Revenue $93,777 Total Revenue $837,282 Pilots $318,023 Fuel $318,426 Maintenance $545,856 Aircraft $289,044 Total Directs $1,471,349 Total Indirects $839,709 Total Operating $2,311,058 Inflation @ 0.75% $17,333 Profit at 5% $115,553 Economic Cost $2,443,944 Annual Subsidy $1,606,662 1/ 28 one-way flights per week x 52 weeks * 0.97 completion x 365/364 days.Appendix C Mesaba Aviation , Inc. , Inc., Essential Air Service to be Provided to

Greenville , Mississippi , Docket OST - 2008 - 02 09 Effective Period : Oc tober 1, 2010, thru September 30 , 2011, or 180 days Mesaba files notice to suspend service with Saab 340 aircraft due to termination of that aircraft type , whichever comes sooner
. Scheduled Service : 1 4 nonstop round trips per week to Memphis
. Aircraft : Saab 340 , 3 4 seats
. Rate per Eligible Flight: $ 1, 135 1 Weekly Ceiling : $ 31, 780 2 Note: 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, inc luding 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; a bsent 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 f lights 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 this rate , 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 serv ice 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 disallowe d, 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 ly , terminates o r 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 w hich the Department does make payments in the stipulated amounts or at the stipulated service levels, t he 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 contract 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 are not currently available for performance under this order beyond September 30, 2010 . The Government’s obligation for performance under this order beyond S eptember 30, 2010 , is subject to 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 September 30, 2010 , until funds are made available to the Department for performance. If funds are not made available for performance beyond September 30, 2010 , the Department will provide notice in writing to the carrier. All claims for payment must be submitted within 60 day s of the last day of service provided under this order.
1 Annual compensation of $1,606,662 divided by 1,325 estimated annual completed departures and arrivals : 28 one
- way flights/week x 52 weeks x 97 percent completion x 365/364 days = 1,416 departures per year
. 2 28 flights/week x $ 1,135
.