Order 2012-12-8

Served: December 14, 2012 

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 14th day of December, 2012

Docket DOT-OST-1995-361

ORDER TO SHOW CAUSE PROPOSING TERMINATION OF

ESSENTIAL AIR SERVICE ELIGIBILITY

Summary

By this Order, the Department is directing interested persons to show cause as to why the 

Department should not terminate the eligibility of Ely, Nevada, under the Essential Air 

Service (EAS) program and allow Great Lakes Aviation, Ltd. (Great Lakes), to suspend 

service at the community. Objections to the Department’s tentative decision are due 

within 20 days of the service date of this Order. An area map is attached as Appendix A.

Background

By Order 2010-9-13, September 14, 2010, we re-selected Great Lakes to provide 

subsidized EAS at Ely utilizing 19-seat Beech 1900D turboprop aircraft, for the two-year 

period through September 30, 2012, at an annual subsidy of $1,752,067. Subsidized 

service was to consist of either 6 nonstop round trips a week to Las Vegas or 6 nonstop or

one-stop round trips a week to Denver.

By Order 2012-11-18, issued on November 16, 2012, the Department extended the 

subsidy rate for Great Lakes, established by Order 2010-9-13, for the period 

October 1, 2012, until further Departmental action while we examine Ely’s long-term 

eligibility in the EAS program.

The complete public file for EAS at Ely may be accessed online through the Federal 

Dockets Management System (FDMS) at: http://www.regulations.gov by entering 

Essential Air Service at

ELY, NEVADA

under 49 U.S.C. 41731 et seq.
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“DOT-OST-1995-361” in the “SEARCH for: Rules, Comments, Adjudications or 

Supporting Documents:” field.

Recent Developments

The Federal Aviation Administration (FAA) Modernization and Reform Act of 2012 

(Public Law 112-95), signed into law on February 14, 2012, amended the definition of 

“eligible place” for the purpose of receiving EAS.1 The amendment, among other things, 

states that to be eligible, a community must have had an average subsidy per passenger of 

less than $1,000 during the most recent fiscal year, as determined by the Secretary of 

Transportation.

Passenger Traffic and Subsidy History

Great Lakes has served the community since March 2008. Historical traffic and annual 

subsidy rates are detailed in Appendix B. For the most recent fiscal year (FY 2012), 

Great Lakes transported 1,070 total passengers at an annual subsidy rate of $1,752,067. 

Thus, the corresponding average per passenger subsidy for FY 2012 was $1,637.45.

Decision

After careful consideration of this matter, the Department has tentatively decided to 

terminate the subsidy eligibility of Ely under the EAS program and allow Great Lakes to 

end service at the community because the community is no longer eligible to receive 

EAS.

We will give interested persons 20 days after the service date of this Order to submit 

objections. Objections should be fully documented and contain complete information on 

the data used by the persons objecting. If we later finalize the tentative findings in a 

subsequent Order, the Department would make the Order effective 30-45 days thereafter

to allow for an orderly shutdown. In that event, if Great Lakes decides to suspend service

upon the effective date of that Order, we will expect it to contact all passengers who hold 

reservations for flights that will be suspended to inform them of the suspension, and 

assist them in arranging alternative transportation or to provide a refund of the ticket 

price, without penalty, if requested.

This Order is issued under authority delegated in 49 CFR Part 1.56a(f).

ACCORDINGLY,

1. The Department tentatively finds that Ely, Nevada, is no longer an eligible EAS 

community;

2. The Department directs all interested persons to show cause within 20 days of the date 

of service of this Order why we should not make final the tentative findings and 

conclusions set forth above. Objections should be filled with Docket Operations, M-30, 

 1 See 49 U.S.C. § 41731
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West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE, 

Washington, DC 20590.2

3. The Department directs Great Lakes Aviation, Ltd. to retain all books, records, and 

other source and summary documentation to support claims for payment, 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 years from the service date of this Order 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 will afford full consideration to the matters and issues raised in any timely and 

properly filed objections before we take further action.3

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

6. Docket Operations will serve copies of this Order on the parties listed in Appendix D.

By:

SUSAN L. KURLAND

Assistant Secretary for Aviation

and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at:

http://www.regulations.gov/

 2 In addition, copies of comments may be e-mailed to dennis.devany@dot.gov, scott.faulk@dot.gov, 

eas@dot.gov, or faxed to the Chief, EAS & Domestic Analysis Division, at (202) 366-7638. Regardless of 

whether copies are faxed to the EAS & Domestic Analysis Division, all objections should be filed with 

Docket Operations, M-30, at the above address.

3 Since the Department is providing for the filing of objections to this Order, we will not entertain petitions 

for reconsideration.
Appendix A
Appendix B

Passenger Traffic and Annual Essential Air Service Subsidy at 

Ely, Nevada

Year 

Ended

Enplaned

Passengers

Deplaned

Passengers

Enplaned +

Deplaned

Passengers

Annual

Federal 

Subsidy

Subsidy 

Per 

Passenger

9/30/2010 204 222 426 $1,864,717 $4,377.27

9/30/2011 433 418 851 $1,752,067 $2,058.83

9/30/2012 540 530 1,070 $1,752,067 $1,637.45

Source: BTS T-100 Market
Appendix C

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, 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.

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.

Funds are not currently available for performance under this order beyond March 31, 2013. The 

Department’s obligation for performance under this order beyond March 31, 2013, 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 March 31, 2013, until funds are made available to the Department for 

performance. If funds are not made available for performance beyond March 31, 2013, the 

Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last day of service provided 

under this order.
Appendix D

SERVICE LIST

Great Lakes, Chuck Howell

Great Lakes, Michael Matthews

Ely Airport, Patrice Lytle