OST-2000-7857 - EAS at Jackson, TN

Order 2001-3-22 is extending Northwest Airlink's service obligation at Owensboro, Kentucky, Muscle Shoals, Alabama and Jackson, Tennessee, for an additional 30 days, through April 23, 2001.

By: Randall Bennett

Order 01-4-27
OST-00-7855
OST-00-7856
OST-00-7857

Issued April 20, 2001
Served April 25, 2001

Order Extending Service Obligation

Terminate Air Service Owensboro Davies County Regional Airport Northwest Alabama & Jackson, TN

By: Randall Bennett

Order 01-8-9
OST-00-7856
OST-00-7855
OST-00-7857
OST-96-1352
OST-96-1901
OST-97-2935
OST-99-6589
OST-99-6502
OST-97-2833
OST-97-2784
OST-00-7556
OST-97-2842
OST-97-2401
OST-97-2523
OST-99-6592
OST-99-5712

Issued August 7, 2001
Served August 10, 2001

Statement of Proposed Policy Regarding Program Deductions

Essential Air Services At Muscle Shoals, AL; Owensboro Davies County Regional Airport; Jackson, TN; Topeka, Kansas; Alamogordo/Hollman AFB, New Mexico; Hot Springs and Jonesboro, Arkansas; Pueblo, Colorado; Hana, Hawaii; Kamuela, Hawaii; Augusta/Waterville; Oneida County Airport; Massena, New York; Enid, OK; Oil City/Franklin, Pennsylvania; Ponce, Puerto Rico; Oshkosh, Wisconsin

Because a $50 million budget can no longer cover the program's current commitments, the Administration's budget proposal also includes a proposal to revise some of the standards under which communities are ineligible for subsidy-supported scheduled air service. Under the proposed revisions, communities would not be eligible if they are:

Located within 100 highway miles of the nearest large or medium hub airport² The current standard is 70 highway miles for both large and medium hubs. Located within 70 highway miles of the nearest small hub airport. There is no current standard addressing communities' proximity to small hub airports.
Located within 50 highway miles of the nearest non-hub airport offering jet service. There is no current standard addressing communities' proximity to non-hub jet service.

The statutory prohibition against continuing to subsidize communities requiring subsidy of more than $200 per passenger, except for exceptionally isolated points, would remain unchanged. The proposed revisions would allow the Department to continue to meet its core obligation of ensuring that truly isolated communities continue to receive at least a minimum level of scheduled air service and thereby remain connected to the national air transportation system. At the same time, it would curtail spending for local service at communities that are within reasonable driving distances of service at other airports.

In light of the program's current spending rate and the Administration's budget proposal, we have decided to issue this statement of proposed policy now, to give the communities and carriers ample notice of the program reductions that we will implement in the event that Congress enacts them into law. Those reductions will result in the termination of subsidy at the 17 communities listed below as of October 1, 2001 -- the first day of fiscal year 2002 -- and will allow the carriers providing subsidized service at those communities to discontinue service on the same date, if they choose, without the need to provide individual notice. Implementation of the reductions at the very outset of the next fiscal year is necessary for program spending to remain within the proposed $50 million budget. Waiting to initiate the process until Congress has already acted could delay implementation of the reductions and require us to make even deeper program cuts, affecting more communities, in order to remain within our budgetary constraints.

By: Susan McDermott

OST-00-7855
OST-00-7856
OST-00-7857

February 1, 2002
Docketed February 20, 2002

Request for Subsidy andEssential Air Service Proposal of Northwest Airlink, Express Airlines

Terminate Air Serviceat Owensboro Davies County Regional Airport Northwest Alabama & Jackson, TN

As a result of the Department's Order 2000-10-3, Express Airlines I (Express 1) was compelled to provide essential air service at the above-captioned points and is entitled to subsidy for such service. With respect to Owensboro, Kentucky and Jackson, Tennessee, Express I is entitled to subsidy for essential air services provided beginning on November 22, 2000, the date upon which Express I's 90-day notice elapsed and Order 2000-10-3 compelled Express I to continue service, through April 30, 2001, the date upon which Express I terminated service pursuant to Order 2001-3-21, selecting Corporate Airlines, Inc. to provide replacement service effective May 1, 2001. With respect to Muscle Shoals, Alabama, Express I provided essential air service beginning November 22, 2000, pursuant to Order 2001-10-3, through February 21, 2002, pursuant to Order 2002-1-1. Attached are Express I's detailed subsidy reimbursement proposals for provision of the above-described services.

In addition, attached is Express I's subsidy proposal for continued essential air service at Muscle Shoals, Alabama, at a level of two or three roundtrip flights per day. Express I proposes to operate the proposed Muscle Shoals essential air service using 33-seat Saab 340 aircraft, as it does currently.

By: Northwest Airlink, Curtis Sawyer

Order 03-5-7
OST-01-8731 - Burlington, IA
OST-96-1559 - Cape Girardeau / Ft. Leonard Wood, MO
OST-96-1167 - Cape Girardeau / Ft. Leonard Wood, MO
OST-97-2515 - Kirksville, MO
OST-00-7857 - Jackson, TN
OST-00-7881 - Marion, IL
OST-00-7855 - Owensboro, KY

Issued May 6, 2003 | Served May 9, 2003

Order Setting Final Rates

We have made adjustments to the rates consistent with the framework established by Order 2002-2-13, namely, that we would make up for revenue reductions to the extent that they fell below those forecast in the final subsidy rates in effect on September 11, and insurance increases directly attributable to the September 11 attacks. Even though Corporate's revenue fell after September 11, only at Cape Girardeau and Kirksville did they fall below those forecast in the subsidy rate, and we adjusted those rates accordingly. At all seven communities, the only other adjustments we made were for increased hull and liability insurance (other than general and administrative and return elements which are set as a percentage of expenses).

By: Read C. Van de Water

Order 03-5-12
OST-01-8731 - Burlington, IA
OST-96-1559 - Cape Girardeau / Ft. Leonard Wood, MO
OST-96-1167 - Cape Girardeau / Ft. Leonard Wood, MO
OST-97-2515 - Kirksville, MO
OST-00-7857 - Jackson, TN
OST-00-7881 - Marion, IL
OST-00-7855 - Owensboro, KY
OST-03-14492 - Quincy, IL

Issued May 9, 2003 | Served May 14, 2003

Order Setting Final Rates | Word

As discussed in Order 2002-2-13, the Department authorized emergency EAS payments to all subsidized carriers because of the losses suffered by them in the face of generally lower revenue and higher costs after the terrorist attacks of September 11, 2001, combined with the fact that the EAS carriers are paid on a pre-agreed, fixed rate per flight. Recently, Order 2003-5-7, issued May 6, 2003, set final rates for seven of the above communities (all except Quincy) from October 1, 2001, until the respective ends of the various contracts. This Order sets final rates that go into effect at the expiration of those contracts, and will remain in effect until further Department action while we process the various carrier selection proceedings for all the communities.

By: Read C. Van de Water

Order 04-12-13
OST-01-8731 - EAS at Burlington, IA
OST-96-1559 - EAS at Cape Girardeau, MO
OST-96-1167 - EAS at Ft. Leonard Wood, MO
OST-97-2515 - EAS at Kirksville, MO
OST-00-7857 - EAS at Jackson, TN
OST-00-7881 - EAS at Marion/Herrin, IL
OST-00-7855 - EAS at Owensboro, KY

Issued and Served December 22, 2004

Order requesting Proposals, and Order to Show Cause Tentatively Termination Subsidy Eligibility and Allowing Suspension of Service | Word

By this order, the Department is requesting interested persons to show cause why we should not terminate the essential air service subsidy eligibility of Kirksville, Missouri, and allow Corporate Airlines, Inc., d/b/a American Connection, to suspend its subsidized service. The Department is also requesting proposals from carriers interested in providing EAS at the other communities identified above for new two-year periods. Proposals to provide subsidized EAS at each of the above communities, as well as objections to the Department’s tentative decision to terminate the subsidy eligibility of Kirksville, are due within 30 days of the service date of this order.

With the end of the current rate term approaching, we conducted a review of the communities' traffic results in anticipation of requesting carrier proposals for a new rate term beginning at the end of their current two-year terms. During calendar year 2003, Burlington averaged 24.0 enplanements a day, Cape Girardeau 23.7, Ft. Leonard Wood 20.0, Jackson 14.0, Marion/Herrin 34.6, Owensboro 17.6, and Kirksville 7.1. The Department is prohibited from subsidizing service at communities where the subsidy amounts to more than $200 per passenger, unless they are more than 210 highway miles from the nearest large or medium hub.' Based on the 2003 traffic level of 4,428 passengers and the current subsidy rate of $968,249, Kirksville's subsidy per passenger is $218.67 and, thus, exceeds the $200-per-passenger ceiling.

We request that any carriers interested in providing essential air service at any or all of the communities, including Kirksville, and with or without subsidy, file their proposals within 30 days of the service date of this order. With respect to each community, we expect proposals consisting of service, at a minimum, with two‑pilot, twin‑engine aircraft with at least 15 passenger seats, and offering two or three one‑stop or nonstop round trips each weekday and each weekend period to St. Louis or any other suitable hub such as Kansas City or Memphis.

By: Karan Bhatia

January 27, 2005

Proposal of Corporate Airlines d/b/a American Connection - Jackson, TN

By: Corporate Airlines d/b/a American Connection

January 31, 2005

Proposal of Great Lakes Aviation - Jackson, TN

By: Great Lakes Aviation

January 28, 2005

Proposal of Mesa Airlines - Jackson, TN

By: Mickey Bowman

January 28, 2005

Proposal of Mesaba Airlines - Jackson, TN

By: John Spanjers

January 20, 2005

Proposal of Multi-Aero d/b/a Air Choice One - Jackson, TN

By: Shane Storz and Darena Wood

OST-96-1167 - EAS at Ft. Leonard Wood, MO
OST-00-7855 - EAS at Owensboro, KY
OST-00-7857 - EAS at Jackson, TN
OST-00-7881 - EAS at Marion/Herrin, IL
OST-01-8731 - EAS at Burlington, IA
OST-96-1559 - EAS at Cape Girardeau, MO
OST-97-2515 - EAS at Kirksville, MO

February 9, 2005

Re: Request for Comments from The Honorable Cliff Hammock, Mayor of The City of Waynesville

I would like to update you on the essential air service situation at Ft. Leonard Wood and give you an opportunity to submit any comments if you wish. As you know, by Order 2004-12-13, December 29, 2004, the Department solicited proposals from all interested air carriers to provide service at Ft. Leonard Wood and six other communities in Iowa, Illinois, Kentucky, and Tennessee. In response to that order, we received a total of 42 proposal options from five carriers - Corporate Airlines, Inc. d/b/a American Connection, Great Lakes Aviation, Ltd., Mesa Air Group d/b/a Air Midwest, Mesaba Aviation d/b/a Northwest Airlink, and Multi-Aero, Inc. d/b/a Air Choice One, Inc. Please note that while Corporate, Great Lakes, and Air Midwest submitted a number of service options, each of their options represents an indivisible package that cannot be separated on a community by community basis. Also, some carriers submitted options involving fewer than six communities. For example, Mesaba submitted a proposal for just Jackson, Tennessee. While we would normally write up a brief summary of all the proposals, it is not practical in this case given the number of options. While we would normally write up a brief summary of all the proposals, it is not practical in this case given the number of options.

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from Tim Bradshaw, Owensboro-Daviess County Regional Airport Airport Manager

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from The Honorable Robert Butler, Mayor of The City of Marion, IL

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from Gary Chick, Waynesville Regional Airport Airport Manager

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from The Honorable Mike Edwards, Mayor of Burlington, IA

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from The Honorable Charles Farmer, Mayor of The City of Jackson, TN

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from Mayor Jerry Gist, Madison County Courthouse

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from The Honorable Rodney Hendrix, Jackson-Madison County Airport Authority

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from Douglas Kimmel, Williamson County Airport Authority Airport Manager

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from The Honorable Jay Knudtson, Mayor of Cape Girardeau, MO

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from Sharon Leeper, Southeast Iowa Regional Airport Airport Manager

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from Bruce Loy, Cape Girardeau Regional Airport Airport Manager

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from The Honorable Debbie Masten, Mayor of The City of Kirksville, MO

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from The Honorable Waymond Morris, Mayor of The City of Owensboro, KY

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from Brian Morrissey, Ft. Leonard Director of Logistics

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from The Honorable Victor Ritter, Mayor of The City of Herrin, IL

By: Dennis DeVany

February 9, 2005

Re: Request for Comments from Jody Sayer, Kirksville, Regional Airport Airport Supervisor

By: Dennis DeVany

OST-01-8731 - Burlington, IA
OST-96-1559 - Cape Girardeau / Ft. Leonard Wood, MO
OST-96-1167 - Cape Girardeau / Ft. Leonard Wood, MO
OST-97-2515 - Kirksville, MO
OST-00-7857 - Jackson, TN
OST-00-7881 - Marion, IL
OST-00-7855 - Owensboro, KY

February 15, 2005

Re: Southeast Iowa Regional Airport Letter Requesting Extension of Deadline

By: Sharon Leeper

February 16, 2005

Re: Letter Extending Deadline for Filing Community Comments

At the request of the Southeast Iowa Regional Airport Authority, as well as of several other communities, we are extending the deadline for filing community comments for the carrier selection case in the above-listed dockets from February 25, 2005, to March 15, 2005.

By: Dennis DeVany

February 22, 2005

Re: Comments of James Hart

By: James Hart

February 22, 2005

Re: Comments of Joe Neisler

By: Joe Neisler

February 13, 2005

Re: Comments of Greg Whitehead | Word

By: Greg Whitehead

February 24, 2005

Re: Comments of Leonard Bruce

By: Leonard Bruce

February 24, 2005

Re: Comments of Jeffrey Hildebrand

By: Jeffrey Hildebrand

February 24, 2005

Re: Comments of Paul Olexa

By: Paul Olexa

February 27, 2005

Re: Comments of Thomas Elizer

By: Thomas Elizer

February 27, 2005

Re: Comments of Donna Patterson

By: Donna Patterson

February 16, 2005

Re: Comments of Yevrah Kahn | Word

By: Yevrah Kahn

February 25, 2005

Comments of Regina Mullins

By: Regina Mullins

March 7, 2005

Re: Comments of Frank Kos

By: Frank Kos

March 2, 2005

Re: Comments of City of Henderson

The City of Henderson appreciates the opportunity to be able to submit our comments regarding an essential air service provider for Jackson, TN. We ask that you approve the proposal submitted by Mesaba Airlines, d/b/a Northwest Airlink. We have been informed of the various proposals submitted and believe that service to Memphis best meets the needs of our local community. Northwest is the only airline in the area that operates a true hub and spoke system. This will result in many more connection opportunities than are available in the other proposed cities.

By: Charles Patterson, Mayor

March 1, 2005

Re: Comments of City of Humboldt

The City of Humboldt would like to express its support for Mesaba Airlines to provide essential air service to McKellar‑Sipes Regional Airport in Jackson. Humboldt has a large industrial base and we hear quite often of corporate management personnel and perspective corporate management personnel flying into Memphis and renting vehicles for travel to our area. We feel certain that this segment of air travelers would certainly appreciate the availability of convenient air travel to Jackson. Northwest Airlink uses larger aircraft than the other airlines and connects with Northwest's large number of daily flights from Memphis.

By: Allen Barker, Mayor

March 1, 2005

Re: Comments of Jackson-Madison County Airport Authority

As you are aware, Northwest Airlink served Jackson from 1987 until 2001 without EAS subsidy. During this time our boardings were consistent with steady increases. The community has expressed that it was generally pleased with their service. Our passengers especially liked their 34 passenger aircraft, the large number of connecting Northwest flights available in Memphis and their frequent flyer program. In the rare event the carrier had a cancellation due to weather or mechanical problems, passengers were transported to or from Memphis by van. In many cases today, passengers have to wait in St. Louis until the following day for another flight.

The local Chamber of Commerce has recently sponsored a number of meetings with various segments of their membership to discuss air service issues. It is clear from their responses that the current service to St. Louis is unacceptable and a change is needed. High ticket prices and the lack of reasonable connections has resulted in a 66% reduction in local boardings during the last three years. In addition, it appears that the carrier has changed our flight schedules to maximize aircraft usage rather than accommodate local business travelers. We see no indication that AmericanConnection's St Louis service will improve.

We believe that the lack of a code‑sharing arrangement by Mesa at the Nashville airport and the fact that the dominant carrier, Southwest Airlines does not share ticketing or baggage handling with other carriers will be unacceptable to leisure travelers. They will have to purchase two tickets; pick up their luggage at baggage claim; recheck it and go through security again. We have compiled the Nashville and Memphis connecting flights available within two hours of the respective carriers' proposed schedules and found that Northwest provides two to three times the number of available flights for our passengers. We plan to work with Mesaba to secure additional non‑subsidized flights.

By: Russell Farmer, Chairman

March 3, 2005

Re: Comments of Madison County

By: Jerry Gist, County Mayor

OST-01-8731 - EAS at Burlington, IA
OST-96-1559 - EAS at Cape Girardeau, MO
OST-96-1167 - EAS at Ft. Leonard Wood, MO
OST-97-2515 - EAS at Kirksville, MO
OST-00-7857 - EAS at Jackson, TN
OST-00-7881 - EAS at Marion/Herrin, IL
OST-00-7855 - EAS at Owensboro, KY

March 9, 2005

Re: Extension of Time to File Community Comments

The Airport Manager of Cape Girardeau, Missouri, has requested a second extension, from March 15, until March 25, to file the community's comments in response to our letter of February 9, 2005. The extension is necessary because of an unforeseen scheduling conflict involving the Cape Girardeau's City Council meeting, scheduled for March 21, and a meeting of the community's Airport Advisory Board that was scheduled to review the various carrier proposals and make a carrier‑selection recommendation to the Cape Girardeau City Council.

This is to advise all parties that we have decided to grant the requested extension to file community comments. Community comments must now be filed no later than March 25, 2005.

By: EAS & Domestic Analysis Division, Dennis DeVany

March 10, 2005

Comments of Ben Mehr

By: Ben Mehr

March 14, 2005

Re: Annette Fann Letter in Opposition to Mesaba Airlines d/b/a Northwest Airlink

By: Annette Fann

March 8, 2005

Re: City of Lexington Letter in Support of Mesaba Airlines d/b/a Northwest Airlink

By: Bennie Scott, Mayor

March 2, 2005

Re: The West Tennessee Industrial Association Letter in Support of Mesaba Airlines d/b/a Northwest Airlink

Our agency works with a large number of industrial prospects and understands the importance of dependable local airline service. Northwest Airlink previously served Jackson for many years and has a large number of connecting flights available in Memphis. They also use larger 34‑passenger aircraft. Our current service to St. Louis does not have reasonable connections and if they have a late flight or cancellation, travelers have to stay in St. Louis overnight. They then become dissatisfied and no longer use the service.

Travelers planning to use the major Nashville carrier, Southwest Airlines, will have to buy two tickets, handle their own luggage and go through security twice. We believe this proposal will not meet the air travel needs of our community.

By: Michael Philpot

March 11, 2005

Re: The Jackson Area Chamber of Commerce Letter in Support of Mesaba d/b/a Northwest Airlink

By: Paul Latture, III

March 15, 2005

Re: Jackson-Madison County Airport Authority Letter in Support of Mesaba d/b/a Northwest Airlink

By: Rodney Hendrix

March 29, 2005

Re: Comments of Jeffrey Hildebrand

By: Jeffrey Hildebrand

March 16, 2005

Comments of Beverly Stein Walker in Support of Mesaba Airlines

Order 2005-6-14
OST-01-8731 - EAS at Burlington, IA
OST-96-1559 - EAS at Cape Girardeau, MO
OST-96-1167 - EAS at Ft. Leonard Wood, MO
OST-97-2515 - EAS at Kirksville, MO
OST-00-7857 - EAS at Jackson, TN
OST-00-7881 - EAS at Marion/Herrin, IL
OST-00-7855 - EAS at Owensboro, KY

Issued June 15, 2005 | Served June 20, 2005

Order Reselecting Carrier and Terminating Show-Cause Proceeding

By this order, the Department is reselecting RegionsAir, Inc. d/b/a American Connection, formerly known as Corporate Airlines (RegionsAir), to provide subsidized essential air service at each of the above communities for a new two-year period from June 1, 2005, through May 31, 2007, for a combined annual subsidy of $7,306,249. Also by this order, the Department is terminating the show-cause proceeding tentatively terminating subsidy at Kirksville, Missouri, as RegionsAir's selected proposal is below the $200-per-passenger cap.

This was a difficult decision based on the number of proposals presented and the fact that all of the applicants, with the exception of Multi-Aero, are current providers of EAS and have demonstrated their ability to provide reliable air service at other communities across the country. It is further complicated by the fact that the carriers' proposals cannot be broken apart. There is no combination of proposals that would provide each community with the service they support. This means we are faced with a decision that, by its very nature, must go against some of the communities' wishes. We also note that some support service options that would provide more service than they currently receive, and we are not in a position to subsidize increased service levels. The EAS program is designed to ensure that every eligible community receives a safety-net level of service that provides access to the national air transportation system, which may not be the level of service that communities would like to receive.

By: Karan Bhatia

July 1, 2005

Re: EAS Subsidy in Jeopardy - Letter to Mayor of Jackson
Re: EAS Subsidy in Jeopardy - Letter to Mayor of Madison County

We must inform you that the continued subsidy eligibility of your community is in jeopardy. As we mentioned in Order 2005-6-14 authorizing subsidy for service to Jackson, under the program's statutes, the Department is prohibited from subsidizing service at communities where the subsidy amounts to more than $200 per passenger, unless they are more than 210 highway miles from the nearest large or medium hub, which Jackson is not. Based on our analysis of Jackson's traffic data for the year 2004, the most recent period for which data were available at the time we requested proposals from interested air carriers to serve there, we noted in Order 2005-6-14 that Jackson's subsidy per passenger was precariously close to the statutory ceiling of $200. In fact, passenger levels have slipped since then. Our review indicates that, for the 12-month period ended March 31, 2005, Jackson generated 5,031 origin-and-destination passengers. (See historical passenger traffic enclosed.) Coupled with the annual subsidy rate of $1,179,026 Jackson's subsidy per passenger is $234.35, an amount in excess of the $200 statutory limit.

By: Karan Bhatia

July 1, 2005

Re: Letter from DOT to Jackson-Madison County Airport Authority

We must inform you, however, that the continued subsidy eligibility of your community is in jeopardy. As we mentioned in Order 2005‑6‑14 authorizing subsidy for service to Jackson, under the program's statutes, the Department is prohibited from subsidizing service at communities where the subsidy amounts to more than $200 per passenger, unless they are more than 210 highway miles from the nearest large or medium hub, which Jackson is not. Based on our analysis of Jackson's traffic data for the year 2004, the most recent period for which data were available at the time we requested proposals from interested air carriers to serve there, we noted in Order 2005‑614 that Jackson's subsidy per passenger was precariously close to the statutory ceiling of $200. In fact, passenger levels have slipped since then. Our review indicates that, for the 12‑month period ended March 31, 2005, Jackson generated 5,031 origin‑and‑destination passengers. (See historical passenger traffic enclosed.) Coupled with the annual subsidy rate of $1,179, 026, Jackson's subsidy per passenger is $234.35, an amount in excess of the $200 statutory limit.

By: Karan Bhatia

July 11, 2005

Re: Response of Jackson-Madison County Airport Authority

We have been proactive for many months, trying to correct this unfortunate situation. We have had a number of meetings with the present carrier, attempting to get fares reduced and better connections. We have also participated in local marketing efforts with the carrier. Our consultant, Mr. David Byers and I visited with you in Washington in May, 2004 to discuss the problems we were having with our airline service and the alternate EAS carriers available. We were verbally assured of your cooperation if another carrier could be found. After the meeting, I began working toward getting Mesaba Airlines to provide Northwest Airlink service to Memphis again. I was successful in getting them to bid on the service. However, their $856 per flight proposal was not accepted by your department. In total, five proposals were received by your department for air service to Jackson for the next two years. The enclosed spreadsheet shows the proposals which ranged from $375 per flight to $968.80. I must state that your department chose the most expensive of these proposals against our wishes, pushing us over the $200 per passenger limit

I have discussed your letter with Regions Air president Doug Caidwell. He has agreed to seek some promotional fares from American Airlines. We will assist him in making the community aware of the fares if they are implemented. We will continue to monitor their service and attempt to obtain more competitive fares and reasonable, dependable schedules in order to increase local boardings. However, we are at a loss to understand why we were apparently set up for failure by continuing the EAS agreement with AmericanConnection. Our community is eager for good air service and will support it but we really need cooperation from your department in order to correct this problem.

By: Rodney Hendrix

OST-2000-7855 - EAS at Owensboro, KY
OST-2000-7857 - EAS at Jackson, TN

July 29, 2005

Re: Response of RegionsAir Regarding EAS Programs

RegionsAir is working with both airports on additional promotions and specials that will stimulate traffic and increase visibility of the airports. The Jackson‑Madison County Airport Authority indicated in its July 11, 2005 response that it will assist RegionsAir in making the community aware of such promotional fares.

The subsidies at issue here have been in place for less than two months. RegionsAir deserves a reasonable opportunity to prove that its pricing initiatives and other marketing plans will result in compliance with the $200 cap. Early indicators are that the reduced fares are working. Additionally, RegionsAir has seen a very positive trend in most markets since early this spring when the major carriers initiated a new simplified fare structure. Given the ever‑increasing price of gasoline and the attractiveness of American Airlines' connecting flights at St. Louis, RegionsAir believes that compliance with the $200 cap is attainable and can be sustained for the duration of the subsidy award.

Counsel: The Wicks Group, Margaret Giugliano, 202-457-7790

September 20, 2005

Letter Explaining Selection of RegionsAir d/b/a American Connection

Thank you for your letter regarding the selection of RegionsAir, d/b/a American Connection, at Jackson, Tennessee, and six other communities in the region under the essential air service program administered by the Department of Transportation.

While I appreciate your concerns, the Department’s decision in this case was fully supported by the record. Although RegionsAir was not the preferred carrier of Jackson, our selection process in EAS cases must be guided by all relevant statutory criteria, such as each carrier’s marketing, code-share, and interline relationships with larger carriers at hub airports, as well as the overall subsidy cost.

Unfortunately, it was not possible to combine the selection of Mesaba with any of the other 36 proposals that would have resulted in a competitive subsidy amount. While the option we selected cost $7,306,249 in subsidy for all seven communities, Mesaba’s proposal of $1,122,082 for Jackson, when combined with the lower cost proposal of the two proposals it could have been paired with to arrive at an alternative seven-community package, would have resulted in an annual subsidy of $7,917,320 -- an amount more than $610,000 greater than the cost of the proposal we selected.

By: Karan Bhatia

Order 2006-2-11
OST-2000-7857

Issued February 16, 2006 | Served February 22, 2006

Order Tentatively Terminating Subsidy Eligibility and Allowing Suspension of Service

By Order 2005-6-14, June 20, 2005, the Department reselected RegionsAir to provide essential air service at Jackson for the two-year period beginning June 1, 2005. Specifically, the Department authorized an annual subsidy of $1,179,026 for RegionsAir to provide 12 nonstop round trips each week between Jackson and the St. Louis hub with 19-seat Jetstream 32 turboprop aircraft.

Not only has Jackson’s traffic continued to erode, the community’s efforts to reduce the subsidy per passenger below the $200 statutory cap have not been successful. In addition, based on passenger data for the year ended October 31, 2005, the community generated just 4,728 passengers resulting in a subsidy per passenger of $249.37 - an amount even greater than the $234.35 subsidy per passenger based on year ended March 31, 2005, data. In other words, no progress has been made in reducing Jackson’s per passenger subsidy, and, in fact, the subsidy per passenger has steadily increased. We also note that Jackson is only 86 highway miles via Interstate 40 from Memphis International Airport, a medium hub, which, according to the Official Airline Guide for December 2005, offered nonstop service to some 90 domestic and international destinations. It appears that either RegionsAir’s service may no longer be able to compete with the highway to Memphis, or some other factor or factors have caused the reduction in demand at Jackson. In any event, Jackson’s subsidy remains well above the $200 cap, and the community has made no compelling demonstration that the subsidy per passenger will fall below the statutory limit.

Because the Department is prohibited from subsidizing service at communities where the subsidy amounts to more than $200 per passenger, unless they are more than 210 miles from the nearest large or medium hub, the Department has tentatively decided to terminate Jackson’s subsidy eligibility as of April 1, 2006, and to allow RegionsAir to discontinue service there after that date.

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 person objecting. If we later finalize our tentative findings and RegionsAir decides to suspend service, we will expect it to contact all passengers who hold reservations for flights that will be suspended, to inform them of the suspension, and to assist them in arranging alternate transportation.

By: Michael Reynolds

February 18, 2006

Individual Opposition to Termination of Subsidy

By: Andrew Gallina

February 24, 2006

Individual Opposition to Termination of Subsidy

By: Terris Henderson

February 22, 2006

Comments of Jackson-Madison County Airport Authority

The Authority maintains a log of airline passengers, late flights and cancellations from daily reports of our security personnel at the airline gate. Our records show that the Jackson EAS subsidy was less than $200 per passenger for the most recent 12 months ended January 31, 2006. The records also reflect that the airline usage has increased by 45% in the last six months compared to the same period a year ago.

We first exceeded the $200 subsidy allowance after Corporate Airline's devastating crash at Kirksville, MO on October 19, 2004. It appears that our flight schedules were changed in order for us to share a plane with other cities. During the two months following the accident, the number of cancelled flights skyrocketed to almost 15%. It also became more difficult to make good connections in St. Louis. Our records for the 6-month period ended April 30, 2004 showed a 33% decrease in boardings compared to the prior year.

We have taken the corrective action outlined in our letter to you dated July 11, 2005. We set up meetings with local media and the airline. As a result, they have begun to run some local advertisements. In addition, the airline accepted our recommendation to change the morning flight to an earlier time. The airline has also reduced some of their fares and begun to rebuild the local customer base. Per our calculations, the $200 subsidy cap has not been exceeded since July 2005 and the average subsidy for the last 12 months ended January 31, 2006 was $196.95.

Our documentation clearly shows that Jackson remains under the $200 per passenger cap and that air traffic is growing, after circumstances beyond our control caused the decline of late 2004 and early 2005. Therefore, Order 2006-2-11 should be rescinded.

By: Rodney Hendrix

February 25, 2006

Individual Comments Supporting Jackson Airport

By: Julia Farmer

February 22, 2006

Re: Letter from Madison County to DOT

Madison County was recently provided statistics from the Jackson/Madison County Airport Authority that show that for the past six months the monthly subsidy ranged from a low of $150 per month to a high of $190 per month. The last month that the subsidy was above $200 per enplane was July 2005, when the cost was $228 per passenger.

Due to the importance that Jackson/Madison County places on its provision of air service to the residents of Jackson/Madison County and to the industries which are located in the area, and considering the fact that for the past six months air service has been provided for less than the $200 base, Madison County herein asks that this termination plan be lifted.

By: Jerry Gist, Mayor

March 6, 2006

Re: Response of Regional Aviation Partners

Regional Aviation Partners requests the Department to reconsider their tentative decision to terminate the EAS subsidy at Jackson, TN and vacate Order 2006-2-11, dated February 16, 2006. It is our view that Jackson, TN has made clear and significant progress in satisfying the Department’s stated requirement to “work closely with the incumbent air carrier to create a plan to stay below the $200 cap.”

In the DOT’s letter of October 28, 2005, they chose to focus on the O&D numbers for the 7 month period following the DOT’s warning to Moses Lake, WA. [Whereas in Jackson,] the DOT applied O&D passenger traffic data from the period prior to the Department’s warning to the community. RAP argues that if the DOT applied the same standard to Jackson, TN, using the numbers following the warning that they afforded Moses Lake, WA, the per passenger subsidy rate for Jackson would be $184 for the 5 month period ending on November 30, 2005.

In fairness, RAP asks the DOT to apply the much improved O&D passenger traffic data at Jackson, in the same fashion as they did in Moses Lake, WA. Since the DOT mandate, the community and the air carrier have consistently demonstrated that the per passenger subsidy rate at Jackson is once again below the $200 cap.

If this is done, we think an equitable result will be achieved and this community will be able to retain their valuable air service link to the national transportation system.

By: RAP, Maurice Parker, exdir@regionalaviationpartners.org

February 22, 2006

Opposition of Congressman John Tanner

I am writing to object to your Department’s recent decision to terminate the Essential Air Service subsidy eligibility for McKellar-Sipes Regional Airport in Jackson, Tennessee. The claim that Jackson’s passenger levels continue on a downward trend is I not supported by careful analysis of the 2005 figures. And most importantly, focused analysis proves that the per-passenger subsidy has fallen back below the $200 cap since. the Department of Transportation notified the Jackson-Madison County Airport Authority in July that it was exceeding its limit.

By: John Tanner

March 13, 2006

Objection of RegionsAir, Inc. - Bookmarked

RegionsAir respectfully disagrees with the reasons the Department cites in its Tentative Order for eliminating the essential air service subsidy for air service at Jackson, TN. The subsidy which is the subject of the Tentative Order was awarded by Order of the Department issued June 15, 2005 for a two year period commencing June 1, 2005, covering air service at seven geographically diverse communities, namely: Burlington, IA, Cape Girardeau, MO, Ft. Leonard Wood, MO, Jackson, TN, Marion/Herrin, IL, Owensboro, KY and Kirksville, MO. Barely two weeks after issuing the Award Order, the Department, in its letter of July 1, 2005 warned RegionsAir and the Jackson community that the subsidy eligibility was “in jeopardy” of exceeding statutory caps and of being terminated.

RegionsAir respectfully submits that the data cited in the Tentative Order is not indicative of the passenger traffic for the period that the subsidy has been in place, nor for the twelve-month period prescribed by applicable rule and law. In fact, the average subsidy per passenger as based on data submitted to the Department’s Bureau of Transportation Statistics since the June 1, 2005 award is $195.65. Even taking into account the period preceding this award, the cost per passenger for the most recent twelve month period barely exceeds the $200 cap.

Further, the Department’s assertions that “no progress has been made in reducing Jackson’s per passenger subsidy, and, in fact the subsidy has steadily increased” are simply not supported by the facts. Following receipt of the Department’s warning letter of July 1, 2005, passenger enplanements increased from 405 in July 2005 to 494 in August, 579 in September, 592 in October and 603 in November, 2005, respectively. As a result of the initiates taken by RegionsAir in response to the Department’s July 1, 2005 letter, the average subsidy per passenger fell to $186.15, well below the statutory $200 cap. Indeed, since the Department’s reselection of RegionsAir to provide essential air service at Jackson for the two-year period beginning June 1, 2005, passenger traffic has been maintained at a consistently higher rate than passenger traffic during the same period in the prior year.

Counsel: The Wicks Group, Margaret Giugliano, 202-457-7790, mgiugliano@wicks-group.com

March 14, 2006

Objection of RegionsAir, Inc. - Errata

Enclosed please find a replacement Attachment A for the above-referenced filing. We inadvertently included the wrong page as Attachment A to yesterday’s filing.

Counsel: The Wicks Group, Lisa Harig, 202-457-7790

March 2, 2006

Tennessee DOT in Opposition to Termination of Service

The state of Tennessee is concerned that existing air service opportunity may be decreasing for citizens in Jackson and endorse the appropriate rebuttal which has been sent to the U.S. DOT.

By: Randy Lovett

Order 2006-3-30
OST-2000-7857

Issued March 29, 2006 | Served April 3, 2006

Order Terminating Show Cause Proceeding - Bookmarked

By Order 2006-2-11, February 16, 2006, the Department tentatively terminated the subsidy eligibility of Jackson, Tennessee, under the EAS program based on passenger data for the year ended October 3 1, 2005, that resulted in a subsidy per passenger of $234.35 - an amount well above the statutory ceiling of $200 per passenger. On July 1, 2005, shortly after we issued Order 2005-6-14 re-selecting RegionsAir d/b/a American Connection to provide subsidized EAS at Jackson and several other communities, we sent the community a letter stating that the number of passengers using the McKellar-Sipes Regional Airport was continuing to decline and that the subsidy per passenger was “precariously close to the $200 cap.” While the community responded to our letter indicating the actions that had been taken and were being taken to reduce the subsidy per passenger, passenger traffic for the year ended October 31, 2005, was below the prior year’s traffic. With 2005 traffic below 2004, and with the subsidy per passenger exceeding $234 - well over the $200 cap, we issued Order 2006-2-11 tentatively terminating Jackson’s subsidy. Consistent with long-standing program practice, we gave the community 20 days to object to our findings.

After carefully reviewing all of the community’s comments, as well as those submitted on behalf of the community and more recent traffic data, we find that Jackson‘s subsidy per passenger is now below $200.

By this order, the Department is terminating the show-cause proceeding that tentatively terminated the subsidy eligibility of Jackson, Tennessee, under the essential air service program. Based on passenger data for the six-month period ended December 31, 2005, Jackson’s subsidy per passenger is now below the statutory ceiling of $200 per passenger.

By: Michael Reynolds

Order 2006-12-25
OST-2001-8731 - Burlington, IA
OST-1996-1559 - Cape Giradeau, MO
OST-1996-1167 - Ft. Leonard Wood, MO
OST-2000-7857 - Jackson, TN
OST-2000-7881 - Marion/Herrin, IL
OST-2000-7855 - Owensboro, KY

Issued December 27, 2006 | Served January 2, 2007

Order Requesting Proposals

Passenger traffic has increased slightly at each of the six communities compared to calendar year 2004 levels. Passenger enplanements for 2006 range from a high of 36 a day at Marion/Herrin to a low of 11 a day at Jackson, while the number of enplanements at Burlington, Cape Girardeau, and Ft. Leonard Wood each average about 24 a day, and at Owensboro, they average about 15 a day.

By: Todd Homan

OST-2001-8731 - EAS at Burlington, IA
OST-1996-1559 - EAS at Cape Girardeau, MO
OST-1996-1167 - EAS at Ft. Leonard Wood, MO
OST-2000-7857 - EAS at Jackson, TN
OST-2000-7881 - EAS at Marion/Herrin, IL
OST-2000-7855 - EAS at Owensboro, KY

January 30, 2007

Extension of Proposal Due Date

By Order 2006-12-25, December 27, 2006, the Department requested proposals from carriers interested in providing essential air service at any or all of the above communities no later than February 1, 2007. In an email dated January 29, Mesa Air Group, Inc. requested a one-week extension of the due date for filing proposals until February 8. Before responding to the carriier, we contacted each of the six communities listed above either by phone or email to learn whether they supported or did not support Mesa's request. Only one community opposed the extension. Thus, we are hereby granting Mesa's request and extending the due date for proposals from all interested carriers until February 8.

By: Mike Waters

February 8, 2007

Proposals of Air Midwest - Bookmarked

Mesa's proposed options would contemplate service with a combination of hubs at Chicago Midway, Kansas City, Memphis, Nashville, and St. Louis.

Mesa proposes to operate all flights as a combination of Mesa Airlines, US Airways Express and Midwest Connect. All operations at Chicago Midway will be Mesa Airlines. Mesa plans on pursuing a primary codeshare relationship with American Airlines in both St Louis and Nashville if awarded service to those respective hubs as we assume the incumbent carrier will not serve these markets without subsidy. Option #2, with service to Memphis, is contingent upon receiving a Northwest Airlines codeshare, which we are currently pursuing. We have established an internal deadline of March 1 for this process and reserve the right to rescind this option should we be unable to come to terms with Northwest.

All operations proposed would utilize our modern fleet of Raytheon/Beechcraft B-1900D airliners. These aircraft offer a very comfortable 19-seat, pressurized cabin with two turboprop engines.

By: Mesa Airlines, Jeffrey Hartz

Feburary 8, 2007

Proposals of RegionsAir

RegionsAir is proposing 6 options that would offer a variety of services to continue operating the vital link to American Airlines’ hub city of St. Louis, Missouri. All flights will be sold and marketed as AmericanConnection utilizing 19 seat BAe Jetstream 32 turboprop aircraft. Flights will be timed to offer optimal connecting opportunities to American Airlines’ flights at St. Louis Lambert International Airport.

Unfortunately the company has had some operational issues in the past few months that have negatively impacted performance causing an increase in cancellations and delays. The primary problem was unexpected engine removals last summer and fall compounded with significantly higher fuel costs than anticipated in the current contracts. The company is addressing capital issues with funding from an outside investment group. The company’s Cleveland operation, which further strained resources, is ending this spring.

The company realizes that many passengers were impacted by recent and unexpected cancellations, it anticipates the capital infusion to allow a rapid return to the previous high standard. By early summer, RegionsAir will have sufficient Jetstream aircraft, to provide an optimal schedule including an operational spare aircraft to assure reliability.

By: RegionsAir

February 8, 2007

Proposals of Big Sky Airlines - Bookmarked

All flights will be operated with modern 19 passenger Beechcraft 1900D aircraft.

Community Proposal 1 Proposal 2 Proposal 3 Proposal 4

Burlington St. Louis Cincinnati St. Louis N/A

Cape Girardeau St. Louis Cincinnati N/A Cincinnati

Ft. Leonard Wood St. Louis Cincinnati St. Louis N/A

Jackson St. Louis Cincinnati N/A Cincinnati

Marion/Herrin St. Louis Cincinnati St. Louis N/A

Owensboro St. Louis Cincinnati N/A Cincinnati

Annual Subsidy $6,838,269 $8,356,955 $3,243,889 $3,247,440

Counsel: Big Sky, Fred deLeeuw, 406-247-3912, fred.deleeuw@bigskyair.com

February 8, 2007

Proposal of Great Lakes Aviation

Proposal Part Service Point(s) Hub(s) Served Round Trips Equipment Subsidy Requirement Passengers Forecast Average Fare

1 Burlington St. Louis 3 1900D $943,793 16,000 $79.00

2 Cape Girardeau St. Louis 3 1900D $949,956 16,500 $69.00

3 Ft. Leonard Wood St. Louis 3 1900D $519,858 17,500 $89.00

4 Jackson St. Louis 2 1900D $1,072,948 7500 $99.00

5 Marion/Herrin St. Louis 4 1900D $1,126,810 25,000 $59.00

6 Owensboro St. Louis 2 1900D $968,470 10,500 $77.00

Great Lakes will provide service at these Essential Air Service points in a similar fashion as is offered in Denver and utilize our interline agreements with all the major carriers, which will (enable connecting bag service through the St. Louis hub. In addition, we will endeavor to obtain code-sharing arrangements with major carriers serving the St. Louis market, to allow passengers in these EAS markets the seamless service, in which they are accustomed to, through St. Louis to the destinations served by our partners and prospective partners.

All proposals contemplate the use of 19 seat Beechcraft 1900D airliner equipment.

Counsel: Great Lakes, Michael Matthews, 307-432-7000

February 12, 2007

DOT Letters Requesting Community Comments of:

As you know, RegionsAir, Inc. d/b/a American Connection, serves your community, as well as five others, to St. Louis, and their contract expires on May 31, 2007. In anticipation of that, we issued Order 2006-12-25, December 27, 2006, soliciting proposals from carriers interested in providing subsidized service at all six communities in the region, for a new, two-year period, beginning June 1. In response to our request, we received proposals from RegionsAir, Inc. (6 options), Mesa Air Group d/b/a Air Midwest, Inc. (8 options), Big Sky Airlines, Inc. (4 options), and Great Lakes Aviation, Ltd. (6 options). While we would normally compose a brief summary of all of the proposals, that is not practical in this case given the number of options.

With specific respect to Marion/Herrin, we note that the community recently began to receive service to Chicago in addition to RegionsAir’s service to St. Louis under the Department’s essential air service program. For the present, we are willing to continue to subsidize service to St. Louis, or some other hub, in recognition of the joint state-and-local effort to build Marion/Herrin’s air service, and in view of the fact that Air Midwest’s service has just begun. We intend to defer our consideration of the implications of this new service on Marion/Herrin’s air service needs until we can assess the results of the new service.

My purpose in writing to you at this time is to request any final comments you might have on the proposals before we submit a carrier-selection recommendation to the Assistant Secretary for Aviation and International Affairs. We request that you review the proposal and submit any comments you may have as soon as possible, but in no case later than March 7.

By: Dennis DeVany

February 23, 2007

Re: Kansas City International Airport Support for Air Midwest Option 4 or 5

Air Midwest's proposals include a unique fare product which will offer low local fares that then become "add‑on" fares on connecting flights. This will stimulate local traffic to Kansas City. In addition to the convenient online options Air Midwest proposes with its mainline partners, EAS travelers will have the ability to connect with all major airlines using Air Midwest's convenient local fare "add‑on" product.

When compared to the other connecting hubs listed in the competing proposals, fares from Kansas City International Airport are substantially lower. Kansas City fares are 37 percent lower than Cincinnati, 29 percent lower than Memphis, and 9 percent lower than St. Louis. While the average fares at ChicagoMidway are compelling, travelers connecting in Chicago-Midway instead of Kansas City International Airport have fewer nonstop destinations and one third less marketing airlines to connect to.

By: Mark VanLoh

February 23, 2007

Re: Madison County Support for Big Sky Airlines

I am asking that you approve the proposal submitted by Big Sky Airlines for service to Cincinnati. I have reviewed the various proposals submitted and believe that service to the Cincinnati‑Northern Kentucky airport best meets the needs of the local community. Delta operates a true hub and spoke system from that airport and I believe that their proposal will result in many more connection opportunities than are available in the other proposed cities. Madison County plans to work with the airline and our Airport Authority to increase our boardings, hopefully reducing or eliminating the need for future EAS assistance.

February 26, 2007

Re: Jackson-Madison County Airport Authority Support for Big Sky Airlines

We have discussed the various proposals with the local Chamber of Commerce and community leaders. It is clear from their responses that me currant service to St Louis Is unacceptable and a change is needed. We like the bid from Great Lakes Airlines and have great respect for Its President. Our boardings constantly increased under his leadership while Corporate Airlines was providing EAS service to Jackson However, we feel that the increased connection opportunities at Cincinnati will result in much greeter usage of our local airport than we would have if we continue service to St. Louis.

Our local economy is growing rapidly. Many worldwide companies such as Procter and Gamble, Black and Decker. Delta Faucet, Whirlpool, and OwensComing have major facilities here. Toyota has recently opened a $100 million facility in the Industrial park adjacent to the airport. Delta's direct international service from their Cincinnati hub and their extensive nationwide coverage makes the selection of Big Skye proposal the best bet for Increasing our boardings and reducing or eliminating our need for EAS support in the future.

March 2, 2007

Statement of American Airlines

American Airlines, Inc. hereby states that it has signed a letter of intent with Great Lakes Aviation, Ltd. To operate American Connection‑branded service to from St. Louis in the event that Great Lakes Aviation is selected in this proceeding.

Counsel: American, Carl Nelson, 202-496-5647

March 2, 2007

Opposition of Great Lakes Aviation bid by RegionsAir

We feel that the Department should reject Great Lakes bid for the 6 markets currently served by RegionsAir to St. Louis.

Great Lakes submitted a bid that was $1,000,000 less than the current contract and over $800,000 less than their bid two years ago even though fuel costs have climbed dramatically during that time. Their bid is approximately $1,300,000 less than Big Sky’s and almost $2,000,000 less than Air Midwest both flying the same aircraft as Great Lakes and proposing essentially the same service.

We find this extremely disturbing in light of Great Lake’s communications to RegionsAir. During the first few days of February the Chairman of Great Lakes called us wanting to know if the sale of our airline had closed. He said that he was interested in our Saab certification but had little interest in St. Louis as they had determined that short haul flying under a prorate contract was not a very good business. He stated that their prime focus was in Milwaukee but they would probably make a token bid for St. Louis as they had 2 years previously.

Clearly Great Lakes has by far the lowest bid. However, we feel that Great Lakes in part submitted this extremely low bid as a means of preventing RegionsAir from completing a transaction to refinance the airline and put a competitor out of business.

By: RegionsAir, Douglas Caldwell

March 5, 2007

Support Letters of:

Benton County/Camden, TN Chamber of Commerce

March 7, 2007

Statement of Delta Air Lines

Delta Air Lines, Inc. submits this statement in support of the submission of Big Sky Transportation Co. d/b/a Big Sky Airlines to the extent it proposes to provide essential air service between the above-referenced communities and Cincinnati, Ohio. Delta further hereby advises the Department that if one of Big Sky's Cincinnati proposals (either proposal 2 or proposal 4) is selected, Delta intends to codeshare with Big Sky on those EAS flights. A codeshare relationship with Big Sky would offer passengers from the affected EAS communities access to Delta's global transportation system.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com

Letters in Support:

Ken Rogers - Big Sky Service to Cincinnati
Mona Miller - Wants Service to Nashville
Jimmy White - Big Sky Service to Cincinnati
Anonymous - Wants Service to Memphis and Nashville

Order 2007-3-5
OST-2001-8731 - EAS at Burlington, IA
OST-1996-1559 - EAS at Cape Girardeau, MO
OST-1996-1167 - EAS at Ft. Leonard Wood, MO
OST-2000-7857 - EAS at Jackson, TN
OST-2000-7881 - EAS at Marion/Herrin, IL
OST-2000-7855 - EAS at Owensboro, KY

Issued March 9, 2007 | Served March 14, 2007

Order Selecting Carriers and Establishing Subsidy Rates

As the end of the two-year contract period was approaching, the Department issued Order 2006-12-25, December 27, 2006. requesting proposals for a new two-year period beginning June 1, 2007, with or without subsidy. In response to our request. we received proposals from four earners: the incumbent, Regions, Air Midwest Inc., a wholly owned subsidiary of Mesa Air Group, Inc., d/b/a US Airways Express (Air Midwest), Big Sky, and Great Lakes.

By this order, the Department is selecting Big Sky Transportation Co., d/b/a Big Sky Airlines, and Great Lakes Aviation, Ltd. to provide subsidized essential air service at the above communities for the two-year period from June 1, 2007, through May 31, 2009, using 19-seat Beech 1900D turboprop aircraft as follows: Big Sky at Cape Girardeau, Jackson, and Owensboro for a combined annual subsidy of $3,247,440: and Great Lakes at Burlington, Fort Leonard Wood, and Marion/Herrin for a combined annual subsidy of $2,590,461.

By: Andrew Steinberg

December 19, 2007

Notice of Termination of Service of Big Sky Airlines

Big Sky Transportation Co. d/b/a Big Sky Airlines d/b/a Delta Connection hereby gives notice of the termination of its scheduled services at Jackson, Tennessee effective on January 7, 2008.

Termination of service on January 7, 2008 is both regrettable and unavoidable and is the result of enormous unsustainable financial losses Big Sky has incurred, and which Big Sky is unable to continue to endure, on its Eastern U.S. route system (those routes serving Boston and Cincinnati). The Company does not have the financial resources to continue to absorb these mounting and unacceptable losses and has determined that it has no alternative but to terminate service.

Big Sky currently operates one daily roundtrip flight between Jackson and Cincinnati using 19-seat Beech 1900D aircraft.. No other carrier currently provides service at Jackson. Big Sky has a codeshare arrangement with Delta Air Lines. Big Sky has advised Delta of the service termination and Delta has informed Big Sky that Delta will contact passengers holding reservations on the discontinued flights to notify them of the schedule changes and to provide refunds or assist them in arranging alternative transportation.

Big Sky is concurrently filing notices of termination of service covering the other EAS points it serves, including its western essential air service points. However, Big Sky is currently in discussions with another carrier to take over Big Sky's Montana EAS services within about 60 days, and Big Sky intends to work with the Department and the replacement airline to effect a seamless transfer of those services.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com

Order 2007-12-20
OST-1996-1559 - Cape Giradeau
OST-2000-7857 - Jackson
OST-1997-2842 - Massena, Ogdensburg and Watertown
OST-2000-7855 - Owensboro
OST-2003-14783 - Plattsburgh
OST-2000-8025 - Saranac Lake/Lake Placid

Issued December 20, 2007 | Served December 27, 2007

Emergency Request for Proposals for Replacement Service

By this order, the Department is (a) prohibiting Big Sky Transportation Co., d/b/a Big Sky Airlines, from suspending its service at the eight above-captioned communities at the end of its 90-day notice period, and (b) requesting proposals, with or without subsidy requests, from carriers interested in providing replacement service. Because of the emergency nature of this case, proposals are due January 11.

Big Sky was selected to provide essential air service at the eight communities by a series of orders. Big Sky serves all eight communities with 19-seat Beech 1900 aircraft. All five communities in New York receive three round trips to Boston on weekdays and weekends, the levels called for in the existing contracts. At Jackson, Owensboro and Cape Girardeau, Big Sky is providing less than the contract amount, as it had been ramping up its service after replacing RegionsAir. Jackson and Owensboro currently receive one round trip a day to Cincinnati instead of the two called for in the contract, and Cape Girardeau receives two round trips a day instead of three.

On December 20, 2007, Big Sky filed notices of intent to suspend its subsidized EAS at all eight of the communities. Big Sky is the only carrier providing scheduled service at the communities In its notices, Big Sky states that it is incurring unsustainable losses on these routes and that it will be forced to cease all operations at these communities on January 7, notwithstanding the statutory EAS obligations that require a full 90-day notice period.

By: Michael Reynolds

OST-1996-1559 - Cape Giradeau
OST-2000-7857 - Jackson
OST-2000-7855 - Owensboro

January 10, 2008

Proposals of Air Choice One

We will utilize 9-seat, single-engine turbine powered, Cessna Grand Caravan configured for 9 passenger seats. The aircraft will be operating with two crewmembers and air conditioning for passenger safety and comfort. All proposals are using St. Louis, MO as the hub.

By: Air Choice One, Shane Storz, 866-435-9847, shane@airchoiceone.com

January 11, 2008

Proposal of Great Lakes Aviation

Great Lakes will provide service at these Essential Air Service points in a similar fashion as is offered in our Denver hub. We will utilize our interline ticketing and baggage handling agreements, as well as, code share agreements that are available at commercially reasonable terms.

The communities should assume that the average fare proposed is based on travel distance to a St. Louis hub. If an alternate hub is chosen, average fares will increase or decrease relative to distance traveled.

The proposals for Jackson and/or Owensboro are contingent on, and require that Great Lakes be selected for Cape Girardeau. All proposals contemplate the use of 19 seat Beechcraft 1900D airliner equipment.

By: Michael Matthews

January 15, 2008

Re: Jackson Chamber of Commerce in Support of Great Lakes Airlines

The Jackson Area Chamber of Commerce Board of Directors met on January 15, 2008, and voted unanimously to request air service to Cincinnati with Great Lakes Airlines. Our reason for this request is that the service to Cincinnati with Big Sky Airlines had much more interest and passengers than when we had service to St. Louis. Particularly in light of the large number of late and/or cancelled flights, the enthusiasm for this connection was much better than any previous air service connection we have had.

By: Paul Latture

January 15, 2008

Re: Jackson-Madison County Airport in Support of Great Lakes

We have discussed the various proposals with the local Chamber of Commerce and community leaders. It is clear from their responses that service to Cincinnati is by far the community's choice. In spite of the large number of late flights and cancellations by Big Sky Airlines, our recent Cincinnati rights had greater usage than we had previously experienced to St. Louis. We would like to see this trend continue.

Many worldwide companies such as Procter and Gamble, Black and Decker, Delta Faucet. Whirlpool, Owens‑Corning and Toyota have major facilities here. The availability of direct international service from Cincinnati and its many daily flights to US cities makes the selection of Great Lakes proposal for Cincinnati service the best bet for increasing our boardings and reducing or eliminating our need for EAS support in the future.

By: Russell Farmer

January 17, 2008

Re: Madison County Mayor in Support of Great Lakes Airlines

I would like to go on record requesting the EAS service for McKellar-Sipes Airport, Jackson, Tennessee be awarded to Great Lakes Airlines with service to Cincinnati. In talking with our local industries and travel agents, I feel Cincinnati would be the most beneficial destination for our air service. There was much excitement in our community when Big Sky started service to Cincinnati even with the many issues they had with late and cancelled flights. If Great Lakes will give us reasonable service, I believe we can build an acceptable passenger count out of Jackson to Cincinnati.

By: Mayor, Jimmy Harris, 731-423-6020

Order 2008-2-1
OST-1996-1559 - Cape Girardeau
OST-2000-7857 - Jackson
OST-2000-7855 - Owensboro

Issued February 1, 2008 | Served February 6, 2008

Order Selecting Carrier and Establishing Subsidy Rates | Word

By this order, the Department is selecting Great Lakes Aviation, Ltd. to provide subsidized essential air service at the above communities for the two-year period beginning when the carrier starts full EAS at all three communities.

The communities fully support the selection of Great Lakes, and we find that the carrier’s proposed subsidy rates are reasonable for the service it intends to provide. Great Lakes is fully experienced in operating regional carrier service both as a general matter and within the essential air service program specifically. Moreover, Multi-Aero’s proposals do not meet the statutory minimum aircraft standards and did not receive the requisite endorsement from any of the communities. We note that Great Lakes is continuing discussions with American Airlines to develop a code-share agreement at St. Louis, but our decision here is not contingent on such an agreement.

Subsidy Rate per Departure: $771.13
Weekly Compensation Ceiling: $29,302.94

By: Michael Reynolds

Community	Proposal 1	Proposal 2	Proposal 3	Proposal 4
Burlington	St. Louis	Cincinnati	St. Louis	N/A
Cape Girardeau	St. Louis	Cincinnati	N/A	Cincinnati
Ft. Leonard Wood	St. Louis	Cincinnati	St. Louis	N/A
Jackson	St. Louis	Cincinnati	N/A	Cincinnati
Marion/Herrin	St. Louis	Cincinnati	St. Louis	N/A
Owensboro	St. Louis	Cincinnati	N/A	Cincinnati
Annual Subsidy	$6,838,269	$8,356,955	$3,243,889	$3,247,440

Proposal Part	Service Point(s)	Hub(s) Served	Round Trips	Equipment	Subsidy Requirement	Passengers Forecast	Average Fare
1	Burlington	St. Louis	3	1900D	$943,793	16,000	$79.00
2	Cape Girardeau	St. Louis	3	1900D	$949,956	16,500	$69.00
3	Ft. Leonard Wood	St. Louis	3	1900D	$519,858	17,500	$89.00
4	Jackson	St. Louis	2	1900D	$1,072,948	7500	$99.00
5	Marion/Herrin	St. Louis	4	1900D	$1,126,810	25,000	$59.00
6	Owensboro	St. Louis	2	1900D	$968,470	10,500	$77.00