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OST-2000-8322

Essential Air Service at Alliance and Chadron, Nebraska

By:  Douglas Voss

By:  Francisco Sanchez

By:  Randall Bennett

By:  Randall Bennett

By:  Randall Bennett

By:  Randall Bennett

By:  Randall Bennett

 By:  Susan McDermott

After reviewing Great Lakes' proposal, the carrier and staff have agreed on subsidy rates for the carrier to continue to provide Alliance and Chadron with three round trips a day to Denver. As appears to be common in the industry, Great Lakes suffered its worst losses immediately following the September 11 attacks, and passenger traffic appears to be rebounding. Thus, we have agreed to a two-tiered rate for Great Lakes: the first from October 1, 2001, through May 31, 2002, at an annual rate of $2,025,747 and an annual rate of $1,943,839 from June 1, 2002, through November 30, 2003. The increase in subsidy is driven principally by two factors. First, there was, as noted above, a drop in revenues. Second, the cost of insurance has risen precipitously. Taking these factors into consideration, the proposed rates appear reasonable for the service at issue and the carrier's performance continues to be satisfactory.

By:  Read Van de Water

Great Lakes Aviation, Ltd. hereby submits an alternative lower cost proposal in response to DOT Order 2002-4-10 for the provision of Essential Air Service between Alliance and Chadron, Nebraska and the Hub city of Denver, Colorado for the Department of Transportation's consideration. If selected Great Lakes would be willing to provide both Communities with service anchored by a city with historically greater traffic levels thus reducing subsidy requirements and improving the schedule timing. This proposal is subject to DOT rate agreement concurrence and support from communities of the schedule pattern proposed.

Counsel:  Great Lakes, Doug Voss, 307.432.7000

Counsel:  Mesa Air Group, Gus Carbonell, 602.685.4108, gus.carbonell@mesa-air.com 

Counsel:  Great Lakes, Doug Voss, 307.432.7000

The enplanements at our airport have drastically declined due to poor airline service for several years. Statistics show Mesa Airlines to be a very reliable airline, which would be a huge factor in winning back our community's trust and support of our local airline service.  Mesa has expressed a willingness to work with us on community promotions to raise awareness and drive traffic. We are confident that working together we can rebuild enplanements and make this a win-win situation for the DOT as well as our community.

By:  Alliance Airport Authority, Bradley Williams

By: Susan Baird

As mentioned in our previous letter of support, our enplanements have drastically declined due to years of poor service from Great Lakes Airlines. We believe Mesa Airlines will win back many of our dissatisfied customers with better reliability and customer service and three round trips (provided in Option 1) will be crucial in meeting the diverse needs of our travelers.

By:  Alliance Airport Authority, Bradley Williams

In summary the City Council is in support of the three flights per weekday option. Having had no prior experience with Air Midwest, the Council would continue to support the re-selection of Great Lakes Aviation for this service.

By: Larry Teahon

By: Bradley Williams

By: Tom Osbourne

By: L.J. Maloney

The Department selects Great Lakes Aviation, Ltd. , to provide essential air service at Alliance and Chadron, Nebraska, as described in Appendix B, for the two-year period beginning when the carrier commences service, or 60 days after the service date of this order, whichever occurs sooner.

The subsidy difference between the two applicants’ two-round-trip proposals is not sufficiently wide to be material. As noted above, Great Lakes Aviation seeks $1,084,825 annually, while Air Midwest seeks $1,091,648—a difference of only $6,823, or less than a one-percent annual subsidy savings. As we see it, the principal element distinguishing these proposals is that Great Lakes Aviation has code-share arrangements in place with both United Air Lines and Frontier Airlines, which enhances the service to connecting passengers for service beyond the hub. We recognize that Mesa Airlines, also a subsidiary of Mesa Air Group, does have a code-share agreement with Frontier Airlines for regional jet service; however, Air Midwest has no such agreement in place. Accordingly, on the strength of this statutorily-mandated criterion, we will select Great Lakes Aviation to provide two round trips each weekday and each weekend between Alliance and Chadron and the Denver hub for a subsidy rate of $1,084,825 annually.

By:  Read C. Van de Water

Order 2005-1-4
OST-2000-8322

Issued January 7, 2005 | Served January 12, 2005

Order Requesting Proposals | Word

We expect proposals consisting of service, at a minimum, with two-pilot, twin-engine aircraft, offering two round trips each weekday and each weekend from Alliance and Chadron to a suitable hub such as Denver or any other hub offering convenient access to the nation’s transportation system. Such service is generally consistent with what the communities currently receive. We encourage proposals that meet those requirements in an efficient manner. Carriers are also welcome to propose more than one service option, if they choose; they need not limit themselves to those requirements if they envision other, potentially more attractive service possibilities-different hubs, for example-with subsidy requirements that remain competitive. Finally, while Alliance and Chadron are guaranteed to receive service with twin-engine aircraft, carriers could offer service with single-engine aircraft, if the communities were willing to accept that service.  We would expect carriers to work with the communities before submitting such a proposal.

Historical traffic for Alliance and Chadron is detailed in Appendix B.  During the year ended September 30, 2004, the most recent 12-month period for which traffic data are available for the communities, Alliance averaged 4.1 enplanements a day, and Chadron averaged 4.2 enplanements a day. During 2000, the last calendar year not affected by the terrorist attacks, Alliance averaged 4.3 enplanements a day, and Chadron averaged 6.5 enplanements per day.

By: Karan Bhatia

February 8, 2005

Proposal of Big Sky Airlines

Is pleased to provide a proposal to provide Essential Air Service to Alliance and Chadron, Nebraska. It is our belief that the proposal being made herein is unique and offers both Alliance and Chadron travelers more traveling options and improved service than is being provided by the incumbent carrier. The Big Sky proposal includes service to Denver with two flights per weekday and two flights over the weekend. Big Sky seeks and is prepared to begin service to Alliance and Chadron in accordance with the service proposal contained herein.

By: Big Sky, Fred deLeeuw, freddel@snet.net

February 11, 2005

Proposal of Great Lakes Aviation

In the recent successful bids for service points in Wyoming, Nebraska, Colorado and South Dakota, Great Lakes bid to provide service in the local markets to Denver as Great Lakes Airlines, and scheduled the service to connect with our code‑share partners Frontier Airlines and United Airlines. As in these previous bids, Great Lakes will provide service at these Nebraska points as Great Lakes Airlines to DEN, and with code sharing partners beyond Denver to the extent of their route structure. In addition, Great Lakes maintains interline ticket and baggage agreements with the majority of the other carriers serving Denver, which allows for maximum utility of our air service to the airline customers flying in and out of Chadron and Alliance.

By: Great Lakes, Dave Thomas

February 11, 2005

Proposal of Mesa Air Group

All operations proposed would utilize our modem fleet of Raytheon/Beecheraft B‑1 900D airliners. These aircraft offer a very comfortable 19‑seat, pressurized cabin with two turboprop engines. Mesa has a long history of offering Essential Air Service throughout the country, from Arizona to New York. Mesa plans on operating the service as Mesa Airlines, while pursuing all available options for future code share opportunities in both Denver and Omaha.

We believe that the option to Omaha, with a presence from Southwest Airlines, is a cost effective alternative that allows for a much needed intrastate link. That, tied together with Mesa's commitment to providing its communities with a cost effective ticket, will hopefully facilitate an increase in passengers in Alliance and Chadron throughout the term of the EAS contract.

By: Mesa, Jeffrey Hartz, jeffrey.hartz@mesa-air.com

February 11, 2005

Re: Proposal of Westward Airways

By: Kristi Feusner

Order 2005-03-01
OST-00-8322 - EAS at Alliance and Chadron, NE

Issued March 2, 2005 | Served March 7, 2005

Order Setting Final Rate

By this order, we are setting a final prospective subsidy rate of $1,311,795 for Great Lakes Aviation's provision of essential air service at Alliance and Chadron, Nebraska, effective February 1,2005, until further Department action.

By: Karan Bhatia

March 7, 2005

Letter to City Manager/Airport Manager of Chadron Seeking Comments

I would like to update you on the essential air service situation at Alliance and Chadron and to give you an opportunity to submit any comments if you wish. As you know, by Order 2005‑1‑4, January 7, 2005, the Department provided for all interested air carriers to submit proposals to provide essential air service at Alliance and Chadron. In response to that order, we received one proposal option from Big Sky Transportation Co., d/b/a Big Sky Airlines, six proposal options from Great Lakes Aviation, Ltd., two proposal options from Mesa Air Group, Inc., d/b/a Air Midwest, and one proposal option from Westward Airways, Inc. I am attaching brief summaries of these proposals to this letter. Attachment A summarizes the subsidy calculations, while Attachment B summarizes the proposed schedules. I would also urge you to review the full proposal as submitted by the carrier.

By: EAS Division, Dennis DeVany

March 7, 2005

Letter to Airport Manager of Alliance Seeking Comments

By: EAS Division, Dennis DeVany

March 7, 2005

Letter to Mayor of Alliance Seeking Comments

By: EAS Division, Dennis DeVany

March 7, 2005

Letter to Mayor of Chadron Seeking Comments

By: EAS Division, Dennis DeVany

March 7, 2005

Letter to Director of Nebraska Department of Aeronautics

By: EAS Division, Dennis DeVany

March 31, 2005

Re: Request for Community Comment Extension

The representatives from Mesa Air Group have been trying to schedule a meeting with my City Manager for the last few weeks. Due to constant schedule conflicts, they have been unsuccessful. We are hoping to meet with Mesa next week and would like a two week extension to the community comment deadline

By: Alliance Municipal Airport

Issued March 31, 2005

Notice of Extension

We have received a request dated March 31, 2005, from the Airport Manager of Alliance, requesting an extension until April 18, 2005, for submitting the civic parties' comments. In support of her request, the Airport Manager cites difficulties in scheduling a meeting between the City Manager of Alliance and representatives of Mesa Air Group.

By: EAS and Domestic Analysis, Dennis DeVany

April 18, 2005

Re: Comments of Alliance Municipal Airport

The City of Alliance would like to express their strong support of Mesa Air Group to provide Essential Air Service for our community. Between the options submitted, we support Option One: Service to both Alliance and Chadron ‑ two linear round trips to Denver.

Mesa has reasonable fares to Denver, with connecting fares through its codesbare partnerships with America West, US Airways, United and Midwest Express. The fares proposed in Option One are much cheaper than the fares Great Lakes currently has in place. Periodically Mesa will have fare sales and customers have the opportunity to purchase tickets in bulk

By: Barbara Watson, Airport Manager

April 18, 2005

Re: Comments of the City of Chadron, NE

I am sending you this e‑mail on behalf of the City of Chadron, Nebraska. Please be advised that the Chadron City Council held a City Council Meeting tonight and discussed the issue of essential air service for the City of Chadron. The members of the Council voted to go on record in support of Great Lakes Aviation. The Councilmembers recognize the fact that Great Lakes Aviation has been offering reliable service to the City of Chadron. The members of the Council are also of the opinion that the company provides good customer service to the community and surrounding area. The City Council would like to see Great Lakes Aviation continue to provide air service to the City of Chadron.

By: Donna Rust, Interim City Manager

April 20, 2005

Re: Manistee County Blacker Airport Authority Letter in Support for Midwest Connect

At the regular meeting at the Manistee. County Blacker Airport Authority on April 11, 2005 a unanimous vote to support the Skyways Airlines, Inc., dlb/a Midwest Connect proposal to provide Essential Air Sen'ice at Manistee, Michigan. The determining factors were their excellent service, including on time performance, reliability, schedule, and competitive fares.

By: Michael Moran, Chairman

Order 2005-5-6
OST-2000-8322

Issued May 12, 2005 | Served May 17, 2005

Order Selecting Carrier and Setting Final Subsidy Rate

By this order, the Department is selecting Great Lakes Aviation, Ltd., to provide essential air service at Alliance and Chadron, Nebraska, for a two‑year period at an annual subsidy rate of $1,311,795.

Considering each of these factors in turn, we find that: (I) both applicants have substantial experience and have demonstrated comparable reliability in providing scheduled air service; (2) Great Lakes Aviation has code‑sharing arrangements with United Air Lines and Frontier Airlines at Denver, while Air Midwest does not currently code‑share with a major carrier at Denver; (3) both carriers are known to have interline arrangements with other carriers; and (4) as noted above, the communities are split in their preferences for their choice of carrier, with Alliance supporting Mesa Air Group/Air Midwest, while Chadron favors Great Lakes Aviation.

By: Karan Bhatia

Order 2007-1-12
OST-2000-8322

Issued January 22, 2007 | Served January 25, 2007

Order Requesting Proposals

By this order, the Department is requesting proposals from carriers interested in providing essential air service at Alliance and Chadron, Nebraska, for the two-year period beginning June 1, 2007, with or without subsidy.

With specific respect to Alliance and Chadron, we expect proposals consisting of service with two-pilot, twin-engine aircraft with at least 15 passenger seats, and offering two round trips to Denver each weekday and each weekend. 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; they need not limit themselves to these requirements if they envision other, potentially more attractive service possibilities, different hubs, for example, with subsidy requirements that remain competitive. Such service is generally consistent with what the communities currently receive. Of course, as always, we will formally solicit the communities’ views on any service options we receive before making a long-term carrier selection decision.

By: Todd Homan

Re: Letter to Mayor of the City of Alliance - Request for Community Comments

Re: Letter to Alliance Airport Authority - Request for Community Comments

Re: Letter to Mayor of the City of Chadron - Request for Community Comments

Re: Letter to Chadron Municipal Airport - Request for Community Comments

Great Lakes proposes to continue its existing service pattern at Alliance and Chadron, for a combined annual subsidy of $1,497,269, for the next two‑year period. We are currently reviewing Great Lakes' compensation requirement.

Please note that the average passenger fares shown in each proposal do not necessarily reflect the average local fare Alliance passengers would actually pay, but, rather, reflect a prorated portion of the total ticket price, e.g., the Alliance ‑ Denver portion of an Alliance ‑ Denver ‑Washington, D.C. ticket that the subsidized carrier would realize. Also, the fare shown is net of certain charges such as Federal transportation security fees, excise or ticket taxes, and Passenger Facility Charges. Of course, carriers have the discretion to charge fares they deem appropriate, and the passenger fares presented in their proposals have been developed for subsidy rate computation purposes only.

By: EAS Division, Dennis DeVany

February 26, 2007

Proposal of Great Lakes Aviation

Great Lakes will continue to provide service marketed as Great Lakes Airlines from these Nebraska communities to our Denver International Airport hub. Passengers are able to seamlessly connect with our code-share partners, Frontier Airlines and United Airlines, which allows for maximum utilitization of our air service to Chadron and Alliance. The attached proposal assumes no upline restrictions and contemplates the continued authority to "one stop a round trip for Alliance and one stop both round trips for Chadron. All proposals presume the use of 19 seat Beech 1900D Airliner equipment.

By: Great Lakes, Michael Matthews

Order 2007-4-3
OST-2000-8322

Issued April 3, 2007 | Served April 6, 2007

Order Reselecting Carrier

By this order, the Department is reselecting Great Lakes Aviation, Ltd. to provide subsidized essential air service at Alliance and Chadron, Nebraska, at a total annual subsidy rate of $1,497,269, for the two-year period of June 1, 2007, through May 31, 2009.

By: Andrew Steinberg

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