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DOT Order Re-Selecting Skywest

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DOT Order Re-Selecting Skywest Order 2016-5-19 Served: May 24, 2016 UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Issued by the Department of Transportation on the 24th day of May, 2016 Essential Air Service at DEVILS LAKE, NORTH DAKOTA DOT-OST-1997-2785 JAMESTOWN, NORTH DAKOTA under 49 U.S.C. § 41731 et seq. ORDER RE-SELECTING CARRIER AND ESTABLISHING SUBSIDY RATES Summary By this Order, the United States Department of Transportation (the Department) is re-selecting SkyWest Airlines, Inc. (SkyWest) to provide Essential Air Service (EAS) at Devils Lake and Jamestown, North Dakota, at annual subsidy rates of $3,990,807, and $2,798,531, respectively,1 for the two-year period from July 1, 2016, through June 30, 2018. SkyWest will provide each community with twelve nonstop or one-stop round trips per week to Denver International Airport (DEN), using 50-seat Canadair CRJ-200 aircraft. Background By Order 2014-1-19, issued on January 30, 2014, the Department selected SkyWest to provide EAS at Devils Lake and Jamestown, at annual subsidy rates of $3,224,917 and $3,126,564, respectively. Under the terms of that contract, SkyWest has been providing each community with 11 nonstop or one-stop round trips per week to DEN. In anticipation of the end of that rate term, the Department issued Order 2016-2-8, on February 10, 2016, soliciting proposals from air carriers interested in providing EAS, with subsidy support if necessary, at the above communities for a new term beginning July 1, 2016. In response to that Order, the Department received proposals from Great Lakes Aviation, Ltd. (Great Lakes), and SkyWest. Those proposals, as well as the complete public file for EAS at Devils Lake and Jamestown, may be accessed online through the Federal Docket Management System at: 1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds. - 2 - http://www.regulations.gov, by entering “DOT-OST-1997-2785” in the “SEARCH for: Rules, Comments, Adjudications or Supporting Documents:” field. Proposals Great Lakes submitted one inseparable proposal consisting of twelve nonstop round trips per week between Devils Lake and Minneapolis/St. Paul Airport and eighteen nonstop round trips per week between Jamestown and Minneapolis/St. Paul Airport, with Beechcraft 1900D aircraft, at annual subsidy rates of $2,881,828 (Devils Lake) and $3,257,520 (Jamestown). Great Lakes’ proposal is contingent on the Federal Aviation Administration (FAA) granting the air carrier’s October 2015 exemption request which would allow the air carrier’s first officers to operate Beechcraft 1900D aircraft in a 19-seat configuration under Part 135 of FAA’s regulations. Currently, the air carrier is limited to 9-seat operations under Part 135. SkyWest proposed to continue providing EAS at both communities for a new term consisting of twelve nonstop or one-stop round trips per week to Denver, using 50-seat Canadair CRJ-200 aircraft, at annual subsidy rates of $3,990,807 (Devils Lake) and $2,798,531 (Jamestown). Community Comments On March 11, 2016, the Department requested community comments regarding this air carrier selection case. In response, the Department received several letters of support for SkyWest’s proposal from local elected officials and concerned citizens from Devils Lake and Jamestown. The Department did not receive any letters of support for Great Lakes’ proposals. The Honorable John Grabinger, North Dakota State Senator, provided a letter of support for SkyWest’s proposal and asked that “great consideration be given to the bid from SkyWest in hope that we may continue to grow and proposer as a community with their continued service.” Mr. Kyle Wanner, Executive Director of North Dakota Aeronautics Commission, provided support for SkyWest’s proposal by stating, “I support the decision of Jamestown and Devils Lake to pursue the acceptance of the bid for air service submitted by SkyWest Airlines, a company that has a strong reputation and proven track record within both of these communities.” Mr. Wanner explained that as a result of transitioning from Great Lakes to SkyWest, Jamestown has experienced a 223% growth in passenger traffic, and Devils Lake experienced a 91% growth in traffic. The Honorable Richard Johnson, Mayor of the City of Devils Lake, stated by letter to the Department, “We feel strongly that SkyWest should again be awarded the EAS contract. Our bookings had been climbing steadily since SkyWest began service.” Mr. John M. Nord, Airport Manager at Devils Lake Regional Airport, provided a letter of support for SkyWest’s proposal. Mr. Nord explained that Great Lakes previously provided EAS at Devils Lake, which resulted in numerous flight cancellations due to a pilot shortage, and Great Lakes reduced its flight schedule before ceasing all operations at the community, leaving Devils Lake without any air service. Mr. Nord further explained that, “the credibility and reliability that - 3 - SkyWest brings to the table can only be measured by the confidence that is shown by the increase number of travelers using the Devils Lake Regional Airport.” Ms. Myrna J. Heisler, Chairman of the Ramsey County Commission, provided a letter of support for SkyWest’s proposal which explained, “The Ramsey County Commission strongly supports and requests your approval of SkyWest Airlines to continue to be the selected air service provider for the Devils Lake Regional Airport.” The Honorable Katie Andersen, Mayor of Jamestown, explained by letter to the Department, “While Great Lakes Aviation had the EAS contract in prior years, we had many problems, boarding dropped and eventually they terminated service to our airport in January 2014 leaving our community without any commercial air service for almost 5 months.” Additionally, the Mayor stated, “The Jamestown Community has enjoyed and strongly supported the current airline SkyWest operating as United Express with jet service to and from Denver.” The Mayor also noted in that letter that the station crew at Jamestown competed against 58 other airports in SkyWest’s network and won the airline’s 4th quarter Customer Support Award for small stations. The Honorable Jessica Haak, District 12 Representative of the North Dakota House of Representatives, provided a letter of support for SkyWest’s proposals by stating, “SkyWest has served the community of Jamestown well, and brings positive economic activity to Jamestown.” Mr. Jim Boyd, Chairman of the Jamestown Regional Airport, and Mr. Sam Seafeldt, Manager of the Jamestown Regional Airport, expressed by letter to the Department the airports displeasure with Great Lakes’ prior EAS performance at Jamestown, and provided support for SkyWest’s proposal by stating, “Jamestown Regional Airport strongly recommends SkyWest be awarded the EAS contract for having superior aircraft, customer service, passenger boarding ramps, and overall professionalism.” Ms. Searle Swedlund, Executive Director of Discover Jamestown, stated by letter, “On behalf of Jamestown Tourism and visitors to the Jamestown community, we feel strongly the superior service and relationship of SkyWest best meets the expectation of the community and its visitors.” Ms. Lynn Lambrecht, President of the Jamestown Downtown Association, provided support for SkyWest’s proposal and explained, “We join the Jamestown Regional Airport and other civic organizations to encourage you to give strong consideration to the bid for EAS service from SkyWest Airlines, operating as United Express. SkyWest’s performance has been fantastic resulting in a more than 200% increase in market share.” Ms. Brandi Van Gilder, Owner of Jamestown Travel, Inc., expressed her displeasure with Great Lakes’ past performance at the community by stating, “We will not support the sales of tickets on Great Lakes Aviation after their very unprofessional departure from our community.” Additionally, Ms. Van Gilder stated, “We would like to recommend that SkyWest be awarded the EAS contract. We have been working with them since June of 2014 and we find them very dependable.” - 4 - Ms. Becky Thatcher-Keller, Executive Director of the Jamestown Area Chamber of Commerce, stated that, “Previously, when Great Lakes Aviation was the provider, we had many issues with their customer service, the quality and timeliness of the flights, and serval times the flights were cancelled without a good cause.” Additionally, Ms. Thatcher-Keller explained, “SkyWest has done a remarkable job of providing the services our community has needed, and we strongly support having them continue to provide these services.” Ms. Connie J. Ova, Chief Executive Officer of the Jamestown/Stutsman Development Corporation, stated to the Department, “This community cannot afford to have Great Lakes Aviation as our carrier again. Proof of this lies in the fact that the last full calendar year of 2013 for Great Lakes Aviation showed boardings of 2672 passengers compared to SkyWest’s 2015 of 8642, an increase of 223%!!” Mr. Jonathan L. Cave, President of First Class Aviation, Inc., a fixed base operator at Jamestown Regional Airport, explained, “Great Lakes Airlines has had a history of numerous cancelled flights due to shortage of aircrew and mechanical issues with little or no explanation.” Additionally, Mr. Cave stated, “SkyWest has been very dependable with highly maintained aircraft, extremely professional pilots who all seem happy.” Mr. Mark Klose, Chairman of the Stutsman County Board of Commissioners, provided support for SkyWest’s proposals,
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