Boutique Air Chosen by USDOT to provide essential air service to Grant County

Category: Front Page News Front Page News
Published: 04 December 2014 04 December 2014

Editor's Note: This information was taken directly from the Order Selecting Carrier Establishing Subsidy Rates. Most, but not all information, is included. Please see the order online to see all information at http://www.regulations.gov

Summary
By this Order, the Department is selecting Boutique Air ("Boutique") to provide Essential Air Service ("EAS") at Silver City/Hurley/Deming, New Mexico, ("Silver City") for the two-year period beginning January 1, 2015, through December 31, 2016. Boutique will provide 24 nonstop round trips each week to Albuquerque International Sunport ("ABQ"), using pressurized 9-seat Pilatus PC-12 aircraft, at an annual subsidy rate of $3,377,495.1

Additionally by this Order, the Department is extending the service period for Great Lakes Aviation, Ltd. ("Great Lakes") to provide EAS at Silver City, from December 1, 2014, or until Boutique commences full EAS at the community, but no later than March 31, 2015. Great Lakes will continue to provide Silver City with 12 nonstop round trips per week between Silver City to Phoenix, Arizona, using Beechcraft 1900D aircraft, at an annual subsidy of $2,237,812.2

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds. 2 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds.

Background
By Order 2012-11-33, issued on November 29, 2012, the Department re-selected Great Lakes Aviation, Ltd. ("Great Lakes") to provide EAS at Silver City with 12 one-stop round trips per week between Silver City and Denver, via Alamosa, Colorado; Santa Fe, New Mexico; or Pueblo, Colorado, or nonstop to Phoenix, Arizona, using 19-seat Beechcraft 1900D aircraft, for the period from December 1, 2012, through November 30, 2014, at an annual subsidy rate of $2,098,460.

In anticipation of the end of the current rate term, the Department issued Order 2014-7-6, on July 10, 2014, soliciting proposals from air carriers interested in providing EAS at Silver City, with subsidy support if necessary, for a new term beginning December 1, 2014. In response to that Order, the Department received proposals from Great Lakes, Boutique, Mokulele Flight Service, Inc., d/b/a Mokulele Airlines ("Mokulele"), and Pacific Wings, LLC.

Those proposals, as well as the complete public file for EAS at Silver City, may be accessed online through the Federal Docket Management System at http://www.regulations.gov by entering Docket number "DOT-OST-1996-1903" in the "SEARCH for: Rules, Comments, Adjudications or Supporting Documents:" field.

Proposal of Great Lakes
Great Lakes proposed to provide Silver City with 12 nonstop round trips per week to Phoenix, using 9-seat Beechcraft 1900D aircraft, at an annual subsidy request of $2,237,812.

Proposal of Boutique
Boutique proposed to provide the community with 24 nonstop round trips per week to Albuquerque, using pressurized 9-seat Pilatus PC-12 aircraft, at an annual subsidy request of $3,377,495.

Proposal of Mokulele
Mokulele proposed to provide 12 nonstop round trips per week to Albuquerque, using 9- seat Cessna Caravan 208EX aircraft, at an annual subsidy request of $1,499,877.

Proposal of Pacific Wings, LLC
Pacific Wings proposed to provide 12 nonstop round trips per week to Albuquerque, using 9-seat Cessna Caravan 208B aircraft, at an annual subsidy request of $1,641,869.

Community Comments
By letter dated September 5, 2014, the Department requested community comments regarding this EAS selection case. In response, by letter dated October 10, 2014, Honorable Michael Morones, Mayor of Silver City, provided support for Boutique. That letter explained the community reviewed all the proposals, received presentations and clarification from the interested airlines, and the community recommended the selection of Boutique. In that letter, the Mayor waived the community's right to twin engine aircraft.3 Additionally, by letter dated October 7, 2014, Mr. Brett Kasten, Chairman of the Grant County Commissioners, recommended the selection of Boutique. In that letter, Mr. Kasten stated "we believe that Boutique Air will provide both reliable service and the routes that will best serve our community." Additionally, the Department received over 50 letters from concerned citizens, the majority of which support air service to Albuquerque.

Decision
In selecting an air carrier to provide subsidized EAS not in Alaska, 49 U.S.C. § 41733(c)(1) directs the Department to consider five factors: (1) service reliability; (2) contractual and marketing arrangements with a larger air carrier at the hub; (3) interline arrangements with a larger air carrier at the hub (4) community views, giving substantial weight to the views of the elected officials representing the users of the serve; and (5) whether the air carrier has included a plan in its proposal to market the service. In addition, the Consolidated Appropriations Act, 2014, Public Law No. 113-76, and continued in the Continuing Appropriations Resolution, 2015, Public Law No. 113-164, 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.

The majority of comments that the Department received support service to Albuquerque; therefore, the Department will eliminate from consideration Great Lakes' proposed service to Phoenix. Additionally, Great Lakes did not receive any community support. Pacific Wings, Mokulele, and Boutique all proposed service to Albuquerque and the elected officials representing the users of the service, including the Mayor of Silver City, support the selection of Boutique.

In this case, the community's support of Boutique is clear. As described above in the Department's statutory selection criteria, the Department is directed to give substantial weight to the views of elected officials. In addition, only Boutique's proposal offers approximately the same number of seats that the Department is currently subsidizing. The selection of Boutique will provide the community with 36 seats inbound and 36 seats outbound each day, still slightly fewer than the 38 per day that Great Lakes is currently contracted to provide. The increased number of arrivals and departures, albeit with aircraft seating fewer seats than what the Department selected for Silver City in the last carrier selection in 2012, will provide numerous connecting opportunities at ABQ and has potential to encourage passenger usage.

3 49 U.S.C. § 41732 (b)(5) outlines minimum requirements for basic EAS, including service provided in aircraft with at least 2 engines and using 2 pilots, unless scheduled air transportation has not been provided to the place in aircraft with at least 2 engines and using 2 pilots for at least 60 consecutive operating days at any time since October 31, 1978.

Note Regarding Eligibility
Silver City is exempt from the $200 per passenger statutory limit4 because it is more than 210 miles from the nearest large- or medium-hub airport; however, the Department wishes to remind Boutique and Silver City about the recently enacted law that established a new subsidy cap at $1,000 per passenger, regardless of distance from hub airports.5 The Department fully expects both parties to work cooperatively to ensure subsidy rates remain below the $1,000 per passenger level to remain eligible for the EAS program.

The Department shall make this selection of Boutique at Silver City contingent upon the Department's receiving properly executed certifications from the air carrier that it is in compliance with the Department's regulations regarding drug-free workplaces and nondiscrimination, as well as the regulations concerning lobbying activities.6

Service Transition
The Department expects Great Lakes and Boutique to work together to make a smooth transition at Silver City. In that regard, before Great Lakes suspends their service, it must notify any passengers holding reservations for travel after the suspension date, assist those passengers in making alternate air transportation arrangements, or provide a refund of the ticket price, without penalty, if requested.

Air Carrier Fitness
49 U.S.C. §§ 41737(b) and 41738 require that the Department finds an air carrier fit, willing, and able to provide reliable service before it can provide subsidized EAS. Boutique and Great Lakes are subject to the Department's continuing fitness requirements, and no information has come to the Department's attention that would bring into question the air carriers' fitness at this time. The Department has contacted the Federal Aviation Administration, and it has raised no concerns that would negatively affect our fitness findings. The Department therefore concludes that the air carrier is reliable and remains fit to conduct the operations proposed here.

This Order is issued under authority delegated in 49 CFR Part 1.25a(b).

ACCORDINGLY,
1. The Department selects Boutique Air to provide Essential Air Service at Silver City/Hurley/Deming, New Mexico, at the service levels and subsidy rate as described in Appendix B, for the period from December 1, 2014, through November 30, 2016;
4 Congress first established the $200 ceiling under P.L. 101-164 for fiscal year 1990, and reestablished it in fiscal years 1994-1999. The ceiling was made permanent by P.L. 106-69, the Department of Transportation and Related Agencies Appropriations Act of 2000.
5 See 49 U.S.C. § 41731(a)(1)(C).
6 The certifications are internet accessible at: http://www.dot.gov/policy/aviation-policy/small-community- rural-air-service/essential-air-service.
Signed by:
BRANDON M. BELFORD
Deputy Assistant Secretary for Aviation and International Affairs
An electronic version of this document is available at
http://www.regulations.gov


2. The Department requires Great Lakes Aviation, Ltd., to continue to provide Essential Air Service at Silver City/Hurley/Deming, New Mexico, from December 1, 2014, or until Boutique commences full EAS at the community, but no later than March 31, 2015;
3. The Department directs Great Lakes Aviation, Ltd. and Boutique Air 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 air carrier may forfeit its compensation for any claim that is not supported under the terms of this Order;
4. The Department finds that Boutique Air is fit, willing and able to operate as a commuter air carrier, and capable of providing reliable Essential Air Service at Silver City/Hurley/Deming, New Mexico;
5. This docket will remain open pending further Department action; and
6. The Department will serve copies of this Order on the civic officials of Silver City, Hurley, and Deming, New Mexico, The Director of the Grant County Airport, Great Lakes Aviation, Ltd., Mokulele Flight Services, Inc., Pacific Wings, LLC, Boutique Air, and the service list for this docket.


Boutique Air
Annual Compensation Requirements for Essential Air Service at Silver City, New Mexico to Albuquerque International Sunport ("ABQ"),
For 24 Round Trips per Week at 98.0% Completion Factor
PHX may be used instead of ABQ for up to 12 frequencies at Boutique's discretion. No upline or downline restrictions.

Content on the Beat

WARNING: All articles and photos with a byline or photo credit are copyrighted to the author or photographer. You may not use any information found within the articles without asking permission AND giving attribution to the source. Photos can be requested and may incur a nominal fee for use personally or commercially.

Disclaimer: If you find errors in articles not written by the Beat team but sent to us from other content providers, please contact the writer, not the Beat. For example, obituaries are always provided by the funeral home or a family member. We can fix errors, but please give details on where the error is so we can find it. News releases from government and non-profit entities are posted generally without change, except for legal notices, which incur a small charge.

NOTE: If an article does not have a byline, it was written by someone not affiliated with the Beat and then sent to the Beat for posting.

Images: We have received complaints about large images blocking parts of other articles. If you encounter this problem, click on the title of the article you want to read and it will take you to that article's page, which shows only that article without any intruders. 

New Columnists: The Beat continues to bring you new columnists. And check out the old faithfuls who continue to provide content.

Newsletter: If you opt in to the Join GCB Three Times Weekly Updates option above this to the right, you will be subscribed to email notifications with links to recently posted articles.

Submitting to the Beat

Those new to providing news releases to the Beat are asked to please check out submission guidelines at https://www.grantcountybeat.com/about/submissions. They are for your information to make life easier on the readers, as well as for the editor.

Advertising: Don't forget to tell advertisers that you saw their ads on the Beat.

Classifieds: We have changed Classifieds to a simpler option. Check periodically to see if any new ones have popped up. Send your information to editor@grantcountybeat.com and we will post it as soon as we can. Instructions and prices are on the page.

Editor's Notes

It has come to this editor's attention that people are sending information to the Grant County Beat Facebook page. Please be aware that the editor does not regularly monitor the page. If you have items you want to send to the editor, please send them to editor@grantcountybeat.com. Thanks!

Here for YOU: Consider the Beat your DAILY newspaper for up-to-date information about Grant County. It's at your fingertips! One Click to Local News. Thanks for your support for and your readership of Grant County's online news source—www.grantcountybeat.com

Feel free to notify editor@grantcountybeat.com if you notice any technical problems on the site. Your convenience is my desire for the Beat.  The Beat totally appreciates its readers and subscribers!  

Compliance: Because you are an esteemed member of The Grant County Beat readership, be assured that we at the Beat continue to do everything we can to be in full compliance with GDPR and pertinent US law, so that the information you have chosen to give to us cannot be compromised.