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United States of America Department of Transportation Office of the Secretary Washington, D.C

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United States of America Department of Transportation Office of the Secretary Washington, D.C Order 2006-7- 19 Served: July 20, 2006 UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Issued by the Department of Transportation on the 17'" day of Jdy, 2006 Essential air service at ALAMOSA, COLORADO Docket 0 S T- 19 97-2 9 6 0 CORTEZ, COLORADO Docket OST- 1998-3508 under 49 U.S.C. 41 73 1 ct seq. I ORDER SELECTING CARRIER S it mm arj, By this order, we are selecting Great Lakes Aviation, Ltd. (Great Lakes) to provide subsidizcd essential air service (EAS) at Alamosa and Corte7, Colorado, for two years, beginning August 1, 2006. Alamosa will receive three nonstop round trips to Denver each weekday and weekend (1 8 total round trips per week) at an annual subsidy rate of S 1,150,205. Coi-tez will rcceiL e three nonstop round trips to Denver each weekday and weekend at an annual subsidy rate of $796,577. Each community will be served with 19- passenger Beech 1900-D aircraft. Background By Order 2004-7- 10. issued Jiily 20, 2004, the Department selected Great Lakes Aviation, Ltd.. to provide subsidixd EAS at Alamosa and Cortw for the two-year period through JUIY3 1, 2006. 'That order established subsidy rates ofS 1,053,538 and $853,557 per year for Alnmosa and Corte;l, respectively, with each community receiving three weekday and three weekend nonstop round trips to Denver with 19-passenger Beech 1900D aircraft. In anticipation of the end of the rate term. the Department issued Order 2006-4-5 on April IO, 2006, soliciting propcxals to pro\ iclc efficient essential air servicc, with subsidy support if necessary. at Alamosa and Cortez, for a new, two-year period. -2- Pro po s a 1s The Department received a total of 12 service options in response to its solicitation. Big Sky siibinitted a proposal with one option each for Alamosa and Cortez. Great Lakes Aviation, Ltd. submitted a proposal with foirr options (two for Alaniosa and two for Cortez). Mesa Air Group Inc. d/b/a Air Midwest Inc. proposed six options (three options for Alamosa, two options for Coi-tez, and one option that included service to both coininunities). These proposals are suininarized below and inay be accessed online through the Department’s Dockets Management System at: http://diiis.dot.gov/ by doing a “simple search” on docket nuinber 2900 or 3508. Bir Slip Big Sky’s proposal contains two options: one for Alaniosa and one for Corte7. each of which Big Sky would be willing to operate on a stand alone basis. Big Sky would operate 19-seat Beech 1900 aircraft. Option 1 proposes three weekday and three weekend nonstop round trips fi-om Coi-tez to Denver at an annual subsidy of $798,034. Option 2 proposes three weekday and three weekend nonstop round trips from Alamosa to Denver at an annual subsidy of $944,6 10. Greut Lulies Great Lakes’ proposal contains four options: two for Alamosa and two for Cortu, all operatcd with Beech 1 OOOD aircraft, and all of the Denver service would be operated under code-share at-rangements with both United Airlines and Frontier Airlines. Option I proposes thrcc weekday and three weekend nonstop round trips fi-om Alamosa to Denver for 9; I, 150,208. Option 2 proposes two weekday round trips and two weekend round trips froin Alamosa to Dcnver and one weekday round trip and one weekend round trip to Albuquerque at an annual subsidy of$ 1,150,642. Option 3 proposes three weekday and three weekend nonstop round trips from Corte7 to Denver for $796,577. Option 4 proposes two weekday round trips and two weekend round trips from Cortez to Denver and one weekday round trip and onc weekcnd round trip to either Phoenix or Las Vegas at an annual subsidy of $796,953. !Mesu Air Groiii~,Itic. d/Wu Air !Widwest Air Midwest proposes six options: two for Cortw, three for Alaniosa, and one that involves both Alainosa and Cortw. All tlights would be operated as America West/US Airways Express with 19-passenger Beech 1 OOOD aircraft. Air Midwest’s options are as follows. Option 1 proposes two weekday and weekend one-stop round trips from Carte/ to Salt Lake City (via Moab, Utah) and one weekday and weekend nonstop round trip from Coi-tez to Phoenix for S699, I73 annually. Option 2 offers the following service from Cortez to Phoenix: three nonstop round trips on Monday, Wednesday, and Friday; two nonstop round trips on Tuesclay, Thursday, and Sunday, and one nonstop round trip on Satiirday at an annual subsidy ot’$1,079,873. Option 3 proposes three weekday and three weekend nonstop round trips from Alainosa to Albuquerque for $1,248,986 annually. Option 4 proposes two weekday and two weekend nonstop round trips from Alaniosa to Albuquerque for 5849,42 1 . Option 5 offcrs two weekday nonstop and two weekend nonstop round trips from Alainosa to Albiiqucrque and two weekday nonstop and two weekend nonstop round trips from Alamosa to Colorndo Springs for S700,705 annually. Option 6 offers Alaniosa one-stop sen ice to Phoenix (\la Cortw) and Cortez would receive nonstop serkice to Phoenix over an Alamosa - Corter ~ Phoenix itinerary. Three roiind trips would be otYcrcd Monday. Wednesday, and Friday; two round trips Tuesday, Thursday, and Sunday: and one round trip on Saturday at an annual subsidy of $1,939,467. Conimunity Coninients By letters clated May 24, 2006, we solicited the views of the Mayors and Airport Managers of both Alaniosa and Cortez, as to which carrier(s) and service option(s) they would prefer. We rece i v cd coni metits frotii each eotmii uni t y , su in tiiarized as fo 11 ow s . A 1a mos a We recciL et1 a letter from the San Luis Valley Regional Airport Board of Control stating the Airpoi-t Board’s recommendation to select Great Lakes Airlines Option 1 (three weekday and weekend nonstop round trips to Denver), maintaining their current level of service. The Board states that “Great Lakes past service has been excellent” and “fliglit patterns arc very good with regard to coverage of equipment failure.” We also received an e-mail from Bonnie Moinct, Interim City Manger, on behalf of Fairis Bervig, Mayor of the City of Alamosa, supporting the decision made by the Board stating, “We have every confidence in t h e Ai rpo rt Board cleci s i o n .” Cortez We received a letter from the Mayor of Cortez stating that the Cortez City Council supports re-selection of their current service -- three nonstop weekday and weekend round trips to Denver on Great Lakes Airlines. Decision on Carrier Selection After a thorough review of the carriers’ proposals and the communities’ comments, we have decided to select Great Lakes’ three weekday and weekend round trips to Denver (18 total round trips per week) for both Alaniosa and Cortu. This represents status quo service for each community and the total subsidy is only $9,720 higher than the existing rates. We find both the proposed service and subsidy levels are reasonable and Great Lakes’ service at its o t h er subsid i ~edE AS co mni u 11 it i es coti t i n ues to be sat i sfac t o r y . In selecting a carrier to provide subsidiLed essential air service, 49 U.S.C. 4 1733(c)(1) directs us to consider four factors: (a) scheduled service reliability; (b) contractual and marketing arrangements with a larger carrier to ensure service beyond the hub: (c) interline arrangements that the applicant has made with a larger carrier at the hub; and (d) community views, giving substantial weight to the views of the elected officials representing the users. I n add i t i o ti, t h e Transport at i o n , Treasury , Housing and Urb an Develop men t . the .I id i cia r y, the District of Columbia, and Independent Agencies Appropriations Act, 2006, Public Law 109- 1 15. pro\ ides that when selecting a carrier to provide EAS. the Department may consicler the relative subsidy requirements, codifying a factor that we have considered since the inception of the prograin. At Cortez, the decision is relatively straightfor~~/ard.There is one option that requires nearly 9; 1 00,000 less subsidy than Great Lakes’ three weekday and weekend round trips to Denver. Howe\w, that option. Air Midwest’s Option 1 . would provide one-stop service to Salt Lake City and one nonstop round trip to Phoenix. It would involve service to hubs that are not supported by the community. and two of the three round trips a day would be clowngraded to -4- one-stop service. Great Lakes, by virtue of its code-share affiliations with both United Airlines and Frontier Airlines, would provide superior access to the national air transportation system, and it has the hill support of the community, both statutory carrier- selection criteria. We find that these factors warrant authorizing the additional subsidy for Great Lakes ’ option . For Alaniosa, we note that traftic levels have steadily risen over the past several years demonstrating that Great Lakes is providing reliable servicc. In addition, Great Lakes’ online connections with United Airlines and Frontier Airlines at Denver provide excellent access to the national air transportation system, a statutorily inandated carrier-selection criterion. The conmiunity strongly supports maintaining Great Lakes’ three weekday and weekend round trips to Denver, and community support is also a statutory selection criterion.
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