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OST-2000-8012

http://www.flypresqueisle.com/ - Northern Maine Regional Airport

EAS Docket

Essential Air Service at Presque Isle/Houlton, Maine

The Applicant hereby notifies the office of the Secretary, Department of Transportation, of its intent to terminate all scheduled air service at the Northern Maine Regional Airport and such termination shall be effective 90 days from the date the Secretary receives this letter of termination unless otherwise specified by the Office of the Secretary.  This service is provided with 19 seat Beech Craft 1900D models.

By:  Joel Raymond, 518.562.2700

By:  Francisco Sanchez

Counsel:  Colgan Air

Counsel:  Champlain Enterprises, Andrew Price

By:  Randall Bennett

By:  Dennis DeVany

By:  Northern Maine Development Commission

By:  Northern Maine Regional Airport, Gregory Williard

By:  Continental Connection, Andrew Price

By:  Loring Commerce Centre, Brian Hamel

By:  Maine Public Service, Paul Cariani

By:  S Advertising, Sam Surprise

By:  Susan McDermott

By:  Continental, Hershel Kamen

By:  Champlain Enterprises, Andrew Price

By:  Randall Bennett

By:  Randall Bennett

By:  Susan McDermott

On September 25, 2000, CommutAir, Inc.'2 filed a 90-day notice of its intent to suspend all scheduled service at Presque Isle, effective December 26, 2000. By Order 2000-11-17, November 15, 2000, the Department prohibited CommutAir from suspending service beyond the end of its 90-day notice period, through January 25, 2001, and requested proposals, with subsidy if necessary, from carriers interested in providing replacement service. As required by 49 U.S.C. 41734, we have extended CommutAir's service obligation for additional 30-day periods, the latest through April 27, 2001, by Order 2001-3-26.

By Order 2001-2-9, issued February 9, 2001, the Department selected Colgan Air, Inc., to provide essential air service at Presque Isle for a two-year period. This service is expected to begin on or about May 15t; thus, in accordance with 49 U.S.C. 41734(c), we will extend CommutAir's service obligation at Presque Isle for an additional 30 days, or until Colgan Air actually begins service, whichever occurs first.

By:  Randall Bennett

Essential Air Service at Beckley and Bluefield/Princeton, West Virginia; Essential Air Service at Augusta/Waterville, Bar Harbor, and Rockland, Maine, and Rutland, Vermont; and CommutAir

Order 2002-3-27 sets short-term subsidy rates, retroactive to October 1, 2001, for Colgan Air's essential air service (EAS) at Augusta/Waterville, Bar Harbor, and Rockland, Maine, and Rutland, Vermont, through December 31, 2002; at Presque Isle, Maine, through May 31, 2003; and at Beckley and Princeton/Bluefield, West Virginia, trhough July 31, 2002.

Colgan was selected to provide subsidized service to Beckley and Princeton/Bluefield by Order 2000-8-16, with the rate due to expire on July 31, 2002; to Presque Isle/Houlton, Maine, by Order 2001-2-9, expiring May 31, 2003; and at Augusta/Waterville, Bar Harbor, and Rockland, Maine, and Rutland Vermont, by Order 2001-1-22, expiring December 31, 2002. Colgan and the staff have agreed to new subsidy rates for its three subsidized routes. On each route, we have recognized decreased revenue based on the carrier's actual experience since October 1, 2001, and a projected gradual recovery of traffic going forward.

By:  Read Van de Water

Let me make a few points which you may not be aware of. Under our Maintenance Program, we are required to put our SAAB Aircraft down for a C-check which is an extensive airframe check every two years. Four of our SAABs are due C­Checks between now and December 1. We currently have an airplane going through a C-Check at an overhaul shop in Lansing Michigan, we expect these overhauls to take three weeks, this overhaul will be followed by three additional aircraft taking three weeks each. Therefore, during this time period we are short, one SAAB Airplane. It was our intent to replace the SAAB with a Beech 1900 on the Presque Isle run during the winter months that is, December, January, February and perhaps March, then come back in with the SAAB in April assuming that the traffic is strong enough to justify a SAAB. However, since it was necessary to put the airplane down, we moved our schedule up several months.

On the service between Boston and Presque Isle, we are operating four round trip flights each day, the actual flying time of the aircraft is approximate 295 hours per month. Our SAAB operating cost is $ 1,850 per hour. This figure X 295 hours = $ 545,750 in operating cost per month. The D.O.T. Subsidy is $ 127,000 subtract this figure from $ 545,750 leaves us $ 418,750 we need to make in revenue in order to break even. Our fare on this operation for the month of July was $ 96.76 and for the month of August, our fare averaged $ 96.88 therefore, we assume an average fare of $ 97.00 per passenger. We need 4,317 passengers to break even. In July, we carried 3,952 passengers, in August, 4,047 so neither of the "good months " showed a profit on Presque Isle.

Quite frankly, our fare is too low. However, we deal with U.S. Airways on the pro­rate and they set the fares- We feel our passenger numbers are going to decline rather dramatically through the fall and winter months. In fact, we are projecting 3,000 passengers for September, therefore, we expect to show a substantial loss on Presque Isle during the month of September.

By: Charles Colgan

Essential Air Service at Augusta/Waterville, Bar Harbor, Rockland, and Presque Island, Maine, Keene, New Hampshire, and Rutland, Vermont

Issued June 2, 2003 | Served June 5, 2003

Order 03-6-2
OST-00-8012 - EAS at Presque Island, ME
OST-97-2784 - EAS at Augusta/Waterville, Bar Harbor, Rockland, ME, Kenne, NH, and Rutland, VT

Order to Show Cause

We will tentatively reselect Colgan to provide essential air service at all of these communities as detailed in Appendix C, for an additional two-year period, except for Rutland. The level of service is the same as before. The proposed rate of $1,166,135 at Presque Isle reflects a significant reduction from the current rate of $1,480,513. The combined rate of $4,722,588 at the other four communities is slightly less than the prior rate of $4,823,420, notwithstanding that Rutland's traffic has decreased dramatically from the last round. 1 Since Colgan's contract at AugustaIWaterville, Bar Harbor, Rockland, and Rutland expired on December 31, 2002, the rate will be effective January 1, 2003. At Presque Isle, the new rate will be effective June 1, 2003.

We request that carriers interested in providing EAS at Presque Isle, Bar Harbor, Rockland, and/or AugustalWaterville, with or without subsidy requests, file proposals within 20 days of the date of service date of this order. We will give full consideration to all proposals filed in a timely manner.

By: Read C. Van de Water

June 25, 2003

OST-97-2784 - EAS at Augusta/Waterville, Bar Harbor, and Rockland, ME
OST-00-8012 - EAS at Presque Isle, ME

Request of Air Midwest for Extension to File Proposal

Air Midwest, Inc. respectfully requests from the Department of Transportation an extension to file its proposal for subsidized air service to Presque Isle, Augusta/Waterville, Bar Harbor, and Rockland, Maine.

The Department served its Order To Show Cause, 2003-6-2, on June 5, 2003. The Department requested that carriers submit competing proposals within twenty (20) days of the date of service referenced in the Order.

Air Midwest, Inc. requests a one-day extension to file its proposal with the Department

By: Mesa, Scott Lyon, 602-685-4368

Essential Air Service at Presque Isle/Houston, Augusta/Waterville, Bar Harbor and Rockland, Maine

Order 04-07-28
OST-97-2784 - EAS at Augusta/Waterville, Bar Harbor, and Rockland, ME
OST-00-8012 - EAS at Presque Isle, ME

Issued July 27, 2004 | Served July 30, 2004

Order Requesting Proposals

By this order, the Department is requesting proposals from carriers interested in providing essential air service at the four Maine communities listed above for a future two-year period, with or without subsidy.

Colgan has served these communities for a number of years. For the year ended April 30, 2004, the most recent 12‑month period for which traffic data are available, Augusta/Waterville averaged 10.0 enplanements a day, Bar Harbor 29.5, Presque Isle/Houston 41.3, and Rockland 18.6.

By: Karan Bhatia

August 30, 2004

Proposal of Colgan Air to Provide Subsidized EAS

The proposed service options for the Northern Maine Communities are as follows: Augusta/Waterville 12 non‑stop and 12 one‑stop round trips each week to Boston; Bar Harbor 12 non‑stop and 12 one‑stop round trips each week to Boston; Rockland 18 nonstop and 6 one‑stop round trip each week to Boston; Presque Isle 19 non‑stop round trips each week to Boston. Although the service proposal utilizes Beech 1900 aircraft, Colgan currently operates a Saab 340 in Presque Isle, and will continue to do so as long as the traffic in the market supports that additional service.

By: Colgan, Michael Colgan, 703-331-3101

August 30, 2004

Mesa Air Group d/b/a Air Midwest Proposal to Provide EAS

Mesa currently serves several markets in the Northeast with US Airways code share and, if selected, would make reasonable efforts to extend the marketing partnership to these Boston routes.

By: Mesa, Linda Larsen, 602-685-4126

OST-97-2784 - EAS at Augusta/Waterville, Bar Harbor, and Rockland, ME
OST-00-8012 - EAS at Presque Isle, ME

August 31, 2004

Re: Request for Comments (Thomas Stevens)

I would like to update you on the essential air service situation at Presque Isle and to give you an opportunity to submit any comments if you wish.

As you know, by Order 2004-7-28, July 27, 2004, the Department solicited proposals from all interested air carriers to provide service at Presque Isle/Houston, Augusta/Waterville, Bar Harbor and Rockland, Maine. In response to that order, we received proposals from two carriers-Mesa Air Group, Inc., d/b/a Air Midwest, and Colgan Air, Inc.

By: Dennis DeVany

August 31, 2004

Re: Request for Comments (Tom Hall)

I would like to update you on the essential air service situation at Rockland and to give you an opportunity to submit any comments if you wish.

As you know, by Order 2004-7-28, July 27, 2004, the Department solicited proposals from ail interested air carriers to provide service at Presque Isle/Houlton, AugustdWaterville, Bar Harbor and Rockland, Maine. In response to that order, we received proposals from two carriers-Mesa Air Group, Inc., d/b/a Air Midwest, and Colgan Air, Inc.

By: Dennis DeVany

OST-97-2784 - EAS at Augusta/Waterville, Bar Harbor, and Rockland, ME
OST-00-8012 - EAS at Presque Isle, ME

September 8, 2004

Re: Request for Extension of Comment Period

In the matter of EAS Service Proposals for the Augusta, Bar Harbor and Rockland, Maine, and Presque Isle, Maine, 294727 and 294728 I respectfully ask that the community comment period be extended from September 15th to September 30th. This request is necessary in order to meet the schedules for the various governing boards that should respond to the proposals.

By: Robert Cossette

September 8, 2004

Re: Extension of Comment Period

At the request of the Manager of the Hancock County Bar Harbor Airport in Trenton, Maine, we are extending the deadline for filing community comments for the carrier selection case in the above-listed dockets from September 15, 2004, to September 30, 2004.

By: Dennis DeVany

OST-97-2784 - EAS at Augusta/Waterville, Bar Harbor, and Rockland, ME
OST-00-8012 - EAS at Presque Isle, ME

September 8, 2004

Re: Hancock County Commissioners Request for Service Documents to be sent to Robert Cossette

By: Kenneth Shea

September 8, 2004

Re: Hancock County Commissioners Letter in Support of Colgan Air

Colgan Air has provided scheduled airline services to our airport since 1991. The service provided by Colgan has been reasonable and reliable. They have worked hard to provide this market with airline service that meets the needs of the market. As is evident by the growth in passengers between 1991 and 2004 their efforts seem to have paid off. We are satisfied with the service provided by Colgan. Therefore, we strongly encourage the US-DOT to award the service for the Augusta, Bar Harbor and Rockland, Maine markets to Colgan Air, Inc.

By: Kenneth Shea and Royce Perkins

September 29, 2004

Re: The City of Presque Isle Letter in Support of Colgan Air

They are the current provider of services. There is no compelling reason, in aircraft provided, schedules of costs that would justify disrupting the current provider of services.

The continuation of a SAAB 340 is preferred to a Beech 1900 aircraft. The City has steadfastly maintained its preference of the larger aircraft and continues to do so. It’s size, cabin class features and bathroom facilities is preferred over the Beech 1900 aircraft. Though we continue to work towards a regional jet type aircraft in the future, the SAAB 340 is the preferred aircraft.

The Colgan Air, Inc. schedule continues the current schedule. This schedule does not cause a disruption to the public.

By: Thomas Stevens

September 22, 2004

Re: The City of Rockland Letter in Support of Colgan Air

In conclusion, Colgan offers the communities serviced by the Knox County Regional Airport more frequent flights, proven flexibility, experienced pilots and a track record of customer satisfaction and trust. Continuation, of our long-term relationship is important and recommended. The Knox County Board of Commissioners, comprised of three elected officials, is responsible for the operations at the Knox County Regional Airport. They have reviewed this letter and also support the recommendation.

By: City of Rockland

OST-97-2784 - EAS at Augusta/Waterville, Bar Harbor, and Rockland, ME
OST-00-8012 - EAS at Presque Isle, ME

September 30, 2004

Re: The Mayor and Council of the City of Augusta, the Augusta City Manager and the Augusta State Airport Letter in Support of Colgan Air

The service proposal offered by Colgan Air is the same as or an improvement over the service pattern they currently operate, a service pattern which adequately meets the demands of the traveling public to and from Augusta.

By: J. Robert McGee

Essential Air Service at Presque Isle/Houston, Augusta/Waterville, Bar Harbor and Rockland, Maine

Order 04-10-16
OST-97-2784 - EAS at Augusta/Waterville, Bar Harbor, and Rockland, ME
OST-00-8012 - EAS at Presque Isle, ME

Issued October 25, 2004 | Served October 28, 2004

Order Selecting Carrier and Setting Subsidy Rate | Word

After careful review of this matter, including the comments submitted by the communities, we have decided to select Colgan to continue providing EAS at Presque Isle/Houlton, Augusta/Waterville, Bar Harbor and Rockland. We will establish an annual subsidy of $1,116,423 for Colgan's service at Presque Isle/Houlton for two years, and we will establish an annual subsidy of $3,196,426 for the carrier's service at Augusta/Waterville, Bar Harbor and Rockland, also for two years. We find that the subsidy amounts requested are reasonable for the service to be provided.

By: Karan Bhatia

Order 2006-6-27
OST-2000-8012
OST-1997-2784

Issued June 22, 2006 | Served June 27, 2006

Order Requesting Proposals

By Order 2004-10-16, October 28, 2004, the Department selected Colgan Air, Inc., to provide essential air service with subsidy support at Presque Isle/Houlton ($1,116,423 annually), August/Waterville, Bar Harbor, and Rockland, Maine ($3,196,426 annually for the three communities), through October 31, 2006, for a combined subsidy of $4,312,849 annually. Under that order, Colgan provides 19 nonstop round trips each week from Presque Isle to Boston, 12 nonstop and 12 one-stop round trips each week from both Augusta/Waterville and Bar Harbor to Boston, and 18 nonstop and 6 one-stop round trips each week from Rockland to Boston. All of Colgan’s service operates under a code-share agreement with US Airways as US Airways Express, and the contract calls for service with 19-passenger Beech 1900 aircraft, although Colgan provides Presque Isle with 34-passenger Saab 340 aircraft at no additional cost to the Department.

As the end of the current rate term approaches, we are here requesting proposals from carriers interested in providing service at the four Maine communities, with or without subsidy, for the two-year period beginning November 1, 2006. Carriers should file their proposals within 30 days of the date of service of this order.

With specific respect to Presque Isle, we ask that carriers submit proposals for three round trips a day to Boston (19 round trips per week) with 15-seat or larger, pressured aircraft. At Bar Harbor, Rockland, and Augusta/Waterville, we expect proposals for four round trips a day (24 per week) if the communities are served over linear routes, or three round trips a day if the service is nonstop turnaround. In order to give the Department and the communities as broad an array of proposals as possible from which to choose, carriers are also welcome to prepare more than one service option.

By: Todd Homan

OST-1997-2784 - Augusta/Waterville, Bar Harbor, and Rockland
OST-2000-8012 - Presque Isle

July 28, 2006

Proposals of Colgan Air

By Order 2006-6-27, the Department requested proposals from carriers interested in providing Essential Air Service for a two-year period beginning on November 1, 2006.

Colgan Air, Inc. respectfully submits a proposal to continue providing subsidized air service between the communities of Augusta/Waterville, Bar Harbor, Rockland, and Preseque Isle/Houlton, Maine and Boston’s Logan International Airport. Our proposal for Augusta/Waterville, Bar Harbor and Rockland uses Beech 1900 aircraft and would require an annual subsidy of $3,575.592. Our proposal for Presque Isle is budgeted for a Beech 1900 at an annual subsidy of $1,201,476. If awarded the Presque Isle service, Colgan would continue to fly a Saab-340 as long as it remains economically viable.

Colgan is a regional airline operating Saab 340A, Saab 340B and Beech 1900-D aircraft. Colgan operates regional scheduled service as Continental Connection, United Express and USAirways Express under three separate agreements with Continental Airlines, United Airlines and USAirways respectfully. The services offered by Colgan to Augusta/Waterville, Bar Harbor, Rockland & Presque Isle, Maine from Boston Logan Airport will be operated as USAirways Express and will allow for seamless connections to USAirways route system as well as to all Star Alliance member airlines who carry the USAirways code. Colgan is the incumbent carrier, and as such, has consistently surpassed community air service needs as well as demonstrating a commitment to outstanding passenger service.

By: Michael Colgan, 703-331-3101

OST-1997-2784 - Augusta/Waterville, Bar Harbor, and Rockland
OST-2000-8012 - Presque Isle

July 28, 2006

DOT Letters Requesting Comments of:

• Mayor of Presque Isle
• Northern Maine Regional Airport Director
• Mayor of Augusta
• Augusta State Airport Director
• Town Manager of Town of Bar Harbor
• Hancock County-Bar Harbor Airport Director
• City Manager of Rockland
• Knox County Regional Airport Manager

I would like to update you on the essential air service situation at Presque Isle and give you an opportunity to submit any comments if you wish. In anticipation of the end of Colgan Air's current contract on October 31, 2006, the Department issued Order 2006-6-27, June 27, 2006, to solicit proposals from all interested air carriers to provide EAS at Presque Isle, as well as at Augusta/Waterville, Bar Harbor, and Rockland, Maine, for a new two-year term. At this stage, we would normally ask for your preferences for various carrier and service options. However, in response to that order, Colgan, the incumbent, was the only carrier to submit a proposal. Nonetheless, we want to give you an opportunity to submit any final comments for the record that you may have.

We request that you review Colgan's proposal and submit any comments you may have before we submit a recommendation to the Assistant Secretary. We ask that you submit any comments you may have as soon as possible, but in any case no later than August 18, 2006.

By: Dennis DeVany

Order 2006-8-24
OST-1997-2784 - Augusta/Waterville, Bar Harbor, and Rockland
OST-2000-8012 - Presque Isle

Issued August 25, 2006 | Served August 30, 2006

Order Reselecting Carrier

By this order, the Department is reselecting Colgan Air. Inc., operating as US Airways Express, to provide subsidized essential air service at Presque Isle/Houlton, Augusta/Waterville, Bar Harbor, and Rockland, Maine, at a total annual subsidy rate of $4,774,068 ($3,572,592 for Augusta/Waterville, Bar Harbor, and Rockland; $1,201,476 for Presque Isle/Houlton), for the two-year period of November 1, 2006, through October 31, 2008.

By: Michael Reynolds

OST-1997-2784 - Augusta/Waterville, Bar Harbor, and Rockland
OST-2000-8012 - Presque Isle/Houlton

March 28, 2008

Ninety-Day Notice of Colgan Air to Terminate Scheduled EAS Service

Colgan Air Inc. gives notice of its intent to terminate service at Presque Isle/Houlton, Maine ninety days from the date of this notice. Colgan Air plans to cease service at Presque Isle/Houlton effective June 28, 2008.

Colgan presently operates 19 non-stop round trips weekly to Presque Isle from Boston. The current service order calls for service with a 19 passenger Beech 1900 aircraft. Colgan currently operates a 34 passenger Saab 340B aircraft on this service.

By: Colgan, George Casey, 703-368-8880

Order 2008-4-14
OST-2000-8012

Issued and Served April 8, 2008

Order Prohibiting Termination of Service and Requesting Proposals | Word

By this order, the Department is (a) prohibiting Colgan Air, Inc. d/b/a US Airways Express from terminating its subsidized service at Presque Isle/Houlton, Maine, for 30 days beyond the end of its 90-day notice period, and (b) requesting long-term proposals from carriers interested in providing essential air service, with or without subsidy, by May 2, 2008.

With respect to Presque Isle/Houlton, we expect proposals consisting of three round trips on weekdays and weekends with 15-seat or larger aircraft to Boston’s Logan International Airport or another suitable hub airport with airline connections to the national air transportation system. Carriers interested in filing proposals, with or without subsidy requests, should file them no later than May 2, 2008.

Colgan was selected to provide EAS at Presque Isle/Houlton from November 1, 2006, through October 31, 2008, by Order 2006-8-24, August 25, 2006. On March 28, 2008, Colgan filed a 90-day notice with the Department of its intent to terminate its subsidized service at Presque Isle/Houlton effective June 28, 2008. Colgan said it “has determined that it cannot continue to operate this service economically, without an increase in subsidy due to the unprecedented increase in fuel costs.”

By: Michael Reynolds

May 2, 2008

Proposal of Colgan Air

Colgan Air, Inc. respectfully submits a proposal to continue providing subsidized service between the community of Presque Isle/Houlton, Maine and Boston's Logan International Airport. This proposal uses Saab 340 aircraft and would require an annual subsidy of $2,643,588. Colgan operates regional scheduled service as US Airways Express under agreement with US Airways.

The proposed service options for the Presque Isle community is as follows: 19 round-trips per week operated as non-stop service to Boston's Logan International Airport. Colgan indends to maintain 19 round trips per week as reducing weekend frequencies would adversely impact the marketplace as it relies heavily on nonresident tourism.

By: Colgan, George Casey, 703-331-3101

Order 2008-5-23
OST-2000-8012

Issued May 19, 2008 | Served May 22, 2008

Order Reselecting Carrier

By this order, the Department is reselecting Colgan Air, Inc., operating as US Airways Express (Colgan), to provide subsidized essential air service at Presque Isle/Houlton, Maine, at an annual subsidy rate of $2,643,588, for the two-year period of May 15, 2008, through May 31, 2010.

Colgan has served the Presque Isle community for many years and continues to provide them with reliable essential air service. Historically, Colgan has provided service at Presque Isle with Saab 340 aircraft, featuring increased seating capacity, even though the Department was subsidizing Colgan for the smaller Beech 1900 aircraft. Colgan is planning to retire its fleet of Beech 1900 aircraft by the end of 2008. We find that both the service and subsidy levels are reasonable. Therefore, we will reselect Colgan Air, Inc. operating under its code-share agreement with US Airways, for an additional two-year period, from May 15, 2008, through May 31, 2010, to provide 19 weekly nonstop round trips to Boston Logan International Airport with Saab 340 aircraft.

By: Michael Reynolds

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