Order 20 1 5

- 1

- 22 Served: January 27 , 20 1 5



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

Issued by the Department of Transportation

on the 27 th day of January , 20 1 5

Essential Air Service at

GRAND ISLAND, NEBRASKA

Under 49 U.S.C. § 41731 et seq

. DOCKET DOT

- OST

- 200 2

- 13983



### ORDER REQUESTING PROPOSALS
Summary By this O rder, the Department is requesting proposals , by February 25 , 201 5

, from carriers interested in providing E ssential Air S ervice (EAS) at Grand Island, Nebraska

, for a new contract period beginning July 1 , 20 1 5 , with or without subsidy. (See Appendix A for map.)

Background By Order 201 3

- 5

- 10

, issued May 10, 2015 , the Department selected American A irlines (American)

, to provid e EAS at Grand Island for the two

- year period from July 1, 2013, through June 30 , 201 5 . That O rder established an annual subsidy rate of $ 1,837,012 for s ervice consist ing of 1 3 round trips per week to Dallas/Fort Worth International Airport (DFW )

. S ervice i s provided on CRJ

- 200 or EMB

- 145 50

- seat regional jets , or EMB

- 140 44

- seat regional jets

, operated by American’s regional subsidiary, American Eagle

. Request for Proposals As the end of the current rate term approaches, and in order to provide sufficient time to complete the carrier

- selection process before the current contract expires, t he Department is here requesting proposals from carriers interested in providing EAS at Grand Island , with or without subsidy support, for a new contract period beginning July 1, 201 5 . Carriers should file their proposals no later than February 25, 2015 . After that date, staff will docket the proposals

, thereby making them public . Shortly afterwards, the Department will provide a summary of the2

proposals to community officials and ask them to submit their final comments. The Department will give full consideration to all proposals filed in a timely manner. 1

Interested carriers should prepare their proposals with e very expectation that their initial proposals will also be their final and only proposals. The Department retain s the discretion to negotiate proposals with carriers when deemed desirable. The Department also retai ns the discretion to reject outright all unreasonable or unrealistic proposals and solicit a new round of proposals.

The Department is here providing interested carriers with some basic information to serve as guidance when they prepare their proposals, but we will not prescribe a precise forma t for their proposals. The Department expect s 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; howeve r, the Department recommend s they include information concerning proposed schedules and projected block hours. In addition, applicants are urged to provide financial data supporting their subsidy requests, including information on their projected expenses and revenues. The Department strongly encourage s clear, well

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

In order to assist carriers in developing traffic and revenue projections for their proposals, the Department ha s summarized historical passengers in Appendix B. In the most recent 12

- month period for which data are available ( November 1, 2013

- October 31, 2014), G rand Island generated 46,832 origin and destination passengers, or approximately 75 enplanements per service day

. The Department request s proposals for service consistent with what the community currently receives, namely, two daily round trips with regional jet aircraft to DFW, Chicago

- O’Hare, Denver , or another suitable hub airport with convenient connections to the national air transportation system. Carriers using smaller aircraft may propose more frequencies than the two daily roundtrips described above. The Department encourage s 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, potent ially more attractive service possibilities

-- different hubs or length of contract , for example

-- with subsidy requirements that remain competitive.

1 Carriers should not expect the Department to accept late filings. 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 car rier selection case. Instead, we simply rely on that carrier’s subsidy

- free service as proposed.
2 In selecting a carrier to provide subsidized EAS , 49 U.S.C. § 41733(c)(1) directs us to consider five 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

. In addition, the Consolidated Appropriations Act, 2012, Public Law 112

- 55, and continued by the Consolidated and Further Continuing Appropriations Act, 2015, Public Law No. 113

- 23 5

, 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.

.3

The Department will formally solicit the community’s views on any service options we receive before ma king 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 o perational needs of the airli ne submitting the proposal.

Filing Procedures Proposals should be submitted via email to EAS@dot.gov

. Carrier proposals should be submitted to the Department with all materials merged into a single document. In additio n, because the document will be published on Regulations.gov, each page should be formatted so as to be easily viewed online.

Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces and nondiscrimination. 3 Consequently, all carriers receiving Federal subsidy to support 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. All carriers that plan to submit proposals involving subsidy should submit the required certi fications along with their proposals. 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 prohi bited from paying subsidy to carriers that do not submit these documents. 4

Community and State Comments Civic officials are welcome to submit comments on the proposals at any time. As noted earlier, the Department will provide a summary of the proposals to the civic parties and ask them to submit their final comments shortly after February 25, 2015 , the due date for carrier proposals.

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

- delegated to the Director, Office of Aviation An alysis.

3 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

– Nondiscrimination on the basis of disability in air travel; and (3) 49 CFR Part 29

– Government

- wide debarment and suspensio n (non

procurement) and government

- wide requirements for drug

- free workplace (grants).
4 The certifications are also available on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

rural

- air

- service/essential

- air

- service

.4

ACCORDINGLY, 1. The Department request s that carriers interes ted in providing Essential Air S ervice at G rand Island, Nebraska

, submit their proposals, with or without subsidy requests, no later than February 25, 2014 . The proposals should be emailed to EAS@dot.gov with the title “Proposal to Provide E AS at Grand Island, Nebraska , Docket DOT

- OST

- 200 2

- 13983 ”

.

2. Docket DOT

- OST

- 200 2

- 1 39 83 will remain open until further order of the Department; and

3. The Depart ment will serve a copy of this O rder on the mayor of Grand Island, the Executive Director of Central Nebraska Regional Airport

, American Airlines

, and the service list for this docket

. Persons entitled to petition the Department for review of this O rder under the Department’s Aviation Economic Regulations, 14 CFR 385.31(a), must file such petitions within seven (7) days after the date of service of this Order.

This O rder will be effective immediately, and the filing of a petition for review shall no t preclude its effectiveness.

By:

TODD M. HOMAN Director Office of Aviation Analysis

(SEAL)

An electronic version of this document is available on line at www.regulations.govAppendix A



## Area Map

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



### Historical O&D Traffic 1 EAS Traffic at Grand Island, NE

1 Source: Bureau of Transportation Statistics Form 41: T

- 100 Domestic Market. Year Month O&D Passengers
2012 1 4,018
2012 2 3,985
2012 3 3,886
2012 4 3,515
2012 5 3,989
2012 6 4,030
2012 7 3,906
2012 8 3,754
2012 9 3,686
2012 10 3,794
2012 11 3,740
2012 12 3,616 2012-Total 45,919
2013 1 3,819
2013 2 3,701
2013 3 3,762
2013 4 3,319
2013 5 3,940
2013 6 3,607
2013 7 3,711
2013 8 3,886
2013 9 3,883
2013 10 4,089
2013 11 3,642
2013 12 3,653 2013-Total 45,012
2014 1 3,880
2014 2 3,775
2014 3 4,011
2014 4 3,694
2014 5 4,077
2014 6 4,149
2014 7 4,177
2014 8 3,781
2014 9 3,777
2014 10 4,216 2014-YTD Total 39,537Appendix 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 com pleted, 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 i ts 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 prov ided 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 re quirement 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 contrac ts 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 liabilit y 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 Depart ment 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 J uly must be filed by October 31st; August claims must be submitted by November 30th, and so on.