Order 2012

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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 14 th day of December , 20 1 2

Docket DOT

- OST

- 199 5

- 361

ORDER TO SHOW CAUSE PROPOSING TERMINATI ON OF

E SSENTIAL A IR S ERVICE ELIGIBILITY

Summary By this O rder, the Department is directing interested persons to show cause as to why the Department should not terminate the eligibility of Ely, Nevada

, under the E ssential A ir

S ervice (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 O rder. 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 a n annual subsidy of $ 1,752,067 . Su bsidized

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

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- 18, issued on November 16, 2012, the Department extended the subsidy rate for Great Lakes

, e stablished by Order 2010

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- 13

, for the period

October 1, 2012

, until further Depar tmental 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 Ma nagement System (FDMS) at : http://www.regulations.gov by entering Essential Air Service at

ELY, NEVADA

under 49 U.S.C. 41731 et seq.- 2

-

“ DOT

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- 199 5

- 36 1” 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,

stat es 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 recen t fiscal year (FY 201 2 )

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

. Thus, the c orresponding average per passenger subsidy for FY 201 2 was $ 1,637.45

.

Decision

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

te rminate 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 O rder to submit objections. Objections should be fully documented and contain complete informa tion 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 there after 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 O rder 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. O bjections should be filled with Docket Operations, M

- 30,

1 See 49 U.S.C. § 41731- 3

-

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 Departm ent 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 O rder 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 AAppendix B

Passenger Traffic and Annua l Essential Air Service Subsidy at Ely, Nevada

Year

Ended Enplane d 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 8 51 $1, 752

, 067 $ 2,058

. 83

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

Source: BTS T

- 100 MarketAppendix 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 e xplanation 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 mus t 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 t hese 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

D epartment 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 or reduce s 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 carri er 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, regulati ons, 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 unde r 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 se rvice provided

under this order.Appendix D

SERVICE LIST

Great Lakes, Chuck Howell Great Lakes, Michael Matthews Ely Airport, Patrice Lytle