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OST-1996-1711

EAS Docket

Essential Air Service at Manistee/Ludington, Michigan

Order 97-8-14 OST-96-1711

August 14, 1997

Order Authorizing Subsidy for Increase Service Program-Wide

Manistee, Michigan

Great Lakes Aviation, Ltd.

Order 01-7-17 OST-96-1711	Issued July 31, 2001 Served August 3, 2001	Order Setting Final Subsidy Rate	90-Day Notice to Terminate Air Service at Manistee, Michigan
		Attachments A-B:  Summary of Service to be Provided

 By:  Susan McDermott

Great Lakes Aviation, Ltd.

We will solicit proposals from carriers interested in providing replacement service at Iron Mountain/Kingsford, Manistee/Ludington, Ironwood/Ashland, and Oshkosh. We request proposal options that would provide the communities with service to any of the designated hubs of Chicago, Milwaukee, or Minneapolis/St. Paul (as appropriate), consisting of at least two round trips a day (we encourage carriers interested in serving Iron Mountain/Kingsford to submit proposals offering three round trips a day), nonstop or one-stop, six days a week, with twin-engine, two-pilot, 15-passenger-seat, pressurized aircraft. The proposals should offer at least enough daily seats to accommodate the most recent average daily enplanements at a 60-percent load factor. Notwithstanding Oshkosh's almost 20-year-old essential air service determination, we request proposals for two round trips each day providing sufficient capacity to accommodate recent traffic levels; as service at nearby Appleton has grown, traffic levels at Oshkosh have fallen to very low levels. We will also entertain proposals to serve other hubs that provide access to the national air transportation system in order to give the Department and the communities as broad an array of proposals as possible from which to choose. 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. In order to assist carriers in making their traffic and revenue forecasts, we have included historical traffic data in Appendix B.

By:  Read Van de Water

Great Lakes Aviation, Ltd.

This serves as notice to the public of the action described below, taken by the Department official indicated. (No additional confirming order will be issued in this matter.) By Order 2002-2-18, issued February 27, 2002, served March 4, 2002, the Department requested proposals from air carriers interested in providing essential air service at Iron Mountain/Kingsford, Michigan; Manistee/Ludington, Michigan; Ironwood, Michigan/Ashland, Wisconsin; and Oshkosh, Wisconsin. These proposals were due within 20 days after the date of service of Order 2002-2-18, i.e., by March 25, 2002. We have received a request from Midwest Express Airlines for a ten-day extension of this due date. In support of its request, Midwest Express affirms that it will deliver to the Department of Transportation all required documentation on or before April 3, 2002.

By:  Dennis DeVany

Great Lakes Aviation, Ltd.

By:  Mesa Air Group, Gus Carbonell

Great Lakes Aviation, Ltd.

By:  Great Lakes, Doug Voss

In accordance with Department of Transportation Order 2002-2-18, the undersigned on behalf of Astral Aviation, Inc. d/b/a Skyway Airlines an affiliate of Midwest Express Airlines, Inc., is pleased to submit its proposal to provide essential air service to the communities of Ironwood,     Michigan /Ashland,     Wisconsin,     Iron Manistee/Ludington, Michigan.

The selection of Skyway Airlines and the use of the Milwaukee hub will provide efficient connections to passengers traveling to and from the growing list of 48 cities in the Midwest Express system, as well as 38 additional cities through Midwest Express' codeshare partnerships. Route maps for Midwest Express, Skyway and their code share partners are enclosed. In addition, Skyway's service to Milwaukee will offer a very convenient alternative for travelers heading to or from the Chicago and northern Illinois region. Hence service over the Milwaukee hub will not diminish the quality of service to be made available to these EAS points.

The costs and expenses are conservatively computed and indicate an annual subsidy requirement for each Skyway service offering. As noted, the subsidy being requested by Skyway is anywhere from approximately $67,350 to $112,700 less, depending on the market, than the DOT is currently paying to provide service to the three communities that Skyway seeks to serve.

Counsel:  Silverberg Goldman, Robert Silverberg, 202.944.3300, rsilverberg@sgbdc.com

90-Day Notice to Terminate Air Service at Manistee, Michigan and Great Lakes Aviation, Ltd.

At a public meeting of the Manistee County Blacker Airport Authority on May 2, 2002, discussion and comment took place regarding the location of hub service for the essential air service provided through the airport. After much consideration and discussion, a motion was approved unanimously to request that the hub for essential air service operating out of the Manistee Blacker Municipal Airport be moved from Chicago to Milwaukee, Wisconsin. It was the consensus of the Board that such a move will increase significantly utilization of our local airport. The decision to support moving the location of the hub for airport service was based upon the desire to utilize Midwest Express as our essential air service carrier. Based upon our evaluation of the carriers which have sought the service, the Airport Authority was of the opinion that Midwest Express and the service it will provide is the best option for our community.

By:  Gockerman Wilson, George Saylor

Great Lakes Aviation, Ltd.

While we are pleased by the increased interest expressed by airlines in the EAS markets described under the above dockets, we do have concerns about the limited service levels in some of the proposals. In particular, proposed reductions in scheduled flight frequency and connecting opportunities may lead to reduced ridership and continued long-term dependence on federal subsidy. We recognize that funding limitations do restrict the level of service that may be subsidized. However, we urge US-DOT to consider not only the requested subsidy level but also the number of frequencies, flight timing, and connecting opportunities offered under each proposal.

By:  State of Michigan, Pauline Misjak

By:  Dennis DeVany

Great Lakes Aviation, Ltd.

By:  Dennis DeVany

By:  Dennis DeVany

Great Lakes Aviation, LTD

Correspondence of Manistee County Blacker Airport Authority in support of the Midwest Express/Skyway proposal with some exceptions.

By: William House, Michael Moran  231 723-4351

Essential Air Service at Manistee, Michigan

Correspondence from Michigan Department of Transportation, Bureau of Aeronautics, regarding the selection of Essential Air Service providers at Michigan communities.

By: William Gehman

Essential Air Service at Manistee, Michigan, Iron Mountain/Kingsford, Michigan, Ironwood, Michigan, Ashland, Wisconsin and Oshkosh, Wisconsin

By this order, the Department is selecting Astral Aviation, Inc. d/b/a Skyway Airlines (Skyway), operating as the Midwest Express Connection, a wholly owned subsidiary of Midwest Express Airlines, to provide subsidized essential air service (EAS) for a two-­year period at Manistee/Ludington, Michigan, at an annual rate of $485,545, and at Ironwood, Michigan/Ashland, Wisconsin, for a similar two-year period, at an annual rate of $479,879. Also by this order, the Department is deferring action on selecting a carrier to provide subsidized EAS at Iron Mountain/Kingsford, Michigan. Lastly, we are resoliciting proposals from carriers interested in providing replacement service at Oshkosh, Wisconsin.

As is our normal procedure when we are aware that other carriers are interested in submitting competing bids, by Order 2002-2-18, March 4, 2002, we requested proposals to serve these communities. In response, we received proposals from the incumbent, Great Lakes, as well as from Skyway and from Mesa Air Group on behalf of its wholly owned subsidiary, Air Midwest, Inc. (Air Midwest). Great Lakes currently provides service into O'Hare as a United Air Lines code-share carrier, and it would continue to do so. Air Midwest does not currently serve Chicago O'Hare, and, while it operates as US Airways Express in other markets, it has no code-share arrangements in place at O'Hare. Midwest Express uses Milwaukee as its hub and Skyway provides feed to Midwest Express as a code-share affiliate, as it would if selected to serve these routes.

By: Read Van de Water

Essential Air Service at Manistee, Michigan, Ironwood, Michigan, Ashland, Wisconsin and Oshkosh, Wisconsin

By this order, the Department is tentatively terminating the subsidy eligibility of Oshkosh, Wisconsin, under the Essential Air Service program because the subsidy per passenger exceeds the $200 per passenger statutory ceiling and the community is less than 210 highway miles from the medium hub airport at Milwaukee. The Department is also setting past-period subsidy rates, retroactive to October 1, 2001, for service provided by Great Lakes Aviation, Ltd.  at Oshkosh, as well as at Manistee/Ludington, Michigan, and Ironwood, Michigan/Ashland, Wisconsin.

By: Read Van de Water

Essential Air Service at Iron Mountain/Kingsford, Ironwood, and Manistee/Ludington, Michigan / Ashland, Wisconsin

Order 05-02-03
OST-99-5175 - EAS at Iron Mountain/Kingsford, MI
OST-99-5712 - EAS at Ironwood, MI/Ashland, WI
OST-96-1711 - EAS at Manistee/Ludington, MI

Issued February, 3, 2005 | Served February 8, 2005

Order Requesting Proposals | Word

By this order, the Department is requesting proposals from air carriers interested in providing essential air service at Iron Mountain/Kingsford, Michigan, Ironwood, Michigan/Ashland, Wisconsin, and Manistee/Ludington, Michigan, for a new two-year period, with or without subsidy.

During the year ended September 30, 2004, the most recent 12‑month period for which traffic data are available for the communities, Ironwood/Ashland averaged 9.4 enplanements a day, Iron MountainlKingsford averaged 24.8 enplanements a day, and Manistee/Ludington averaged 7.3 enplanements a day. During 2000, the last calendar year not affected by the terrorist attacks, Ironwood/Ashland averaged 6.4 enplanements a day, Iron MountainlKingsford averaged 28.6 enplanements a day, and Manistee/Ludington averaged 4.0 enplanements per day.

By: Karan Bhatia

OST-99-5175 - EAS at Iron Mountain/Kingsford, MI
OST-99-5712 - EAS at Ironwood, MI/Ashland, WI
OST-96-1711 - EAS at Manistee/Ludington, MI

March 10, 2005

Proposal of Air Midwest - Mesa Airlines

By: Mesa, Mickey Bowman, mickey.bowman@mesa-air.com

March 10, 2005

Proposal of Skyway Airlines - Midwest Connect

By: Midwest, James Rankin, james.rankin@midwestairlines.com

Essential Air Service at Iron Mountain/Kingsford, Ironwood, and Manistee/Ludington, Michigan / Ashland, Wisconsin

Order 2005-3-37
OST-99-5175 - EAS at Iron Mountain/Kingsford, MI
OST-99-5712 - EAS at Ironwood, MI/Ashland, WI
OST-96-1711 - EAS at Manistee/Ludington, MI

Issued March 25, 2005 | Served March 30, 2005

Order Setting Final Rate | Word

By this order, we are setting final prospective subsidy rates for the provision of essential air service by Astral Aviation, Inc., d/b/a Skyway Airlines, of $602,761 on an annual basis at Iron Mountain/Kingsford, Michigan, $409,242 for Ironwood, Michigan/Ashland, Wisconsin, and $776,051 for Manistee/Ludington, Michigan, effective February 1, 2005, until further Department action.

By: Karan Bhatia

OST-1996-1711 - EAS at Manistee/Ludington, MI
OST-1999-5175 - EAS at Iron Mountain/Kingsford, MI
OST-1999-5712 - EAS at Ironwood, MI/Ashland, WI

April 8, 2005

Re: Requests for Comments - Richard Mack, Mayor of Manistee, John Henderson, Mayor of Ludington, William J. House, Airport Manager, Mayor of Iron Mountain, Michigan, Mayor of Kingsford, Michigan, William H. Marchetti of Dickerson County Board of Commissioners, William E. Gehman, Director of Michigan Bureau of Aeronautics, Mayor of Ironwood, Michigan, Mayor of Ashland, Michigan, Airport Manager of Ironwood/Ashland, Michigan, David Greene, Director of Wisconsin Department of Transportation

I would like to update you on the essential air service situation at Manistee/Ludington, Iron MountainlKingsford, and Ironwood/Ashland and to give you an opportunity to submit any comments if you wish. As you know, by Order 2005‑2‑3, February 3, 2005, the Department provided for all interested air carriers to submit proposals to provide essential air service at Ironwood/Ashland, Iron Mountain/Kingsford, and ManisteefLudington. In response to that order, we received seven proposal options from Mesa Air Group, Inc., dlb/a Air Midwest, and three proposal options from Skyway Airlines, Inc., d/b/a Midwest Connect. 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 fill proposals as submitted by the carriers.

By: Office of Aviation Analysis, Dennis DeVany

OST-1996-1711

April 20, 2005

Comments of Manistee County Blacker Airport Authority

At the regular meeting at the Manistee County Blacker Airport Authority on April 11, 2005 a unanimous vote to support the Skyways Airlines, Inc., d/b/a Midwest Connect proposal to provide Essential Air Service at Manistee, Michigan. The determining factors were their excellent service, including on time performance, reliability, schedule, and competitive fares. We are looking forward to your decision in selecting Midwest Connect to continuing service at Manistee, Michigan.

By: Michael Moran, Chairman

OST-1999-5175 - EAS at Mountain/Kingsford
OST-1999-5712 - EAS at Oshkosh
OST-1996-1711 - EAS at Manistee

May 9, 2005

Comments of Michigan Department of Transportation

We have been extremely pleased by the highly‑reliable service provided by Midwest Connect at all the Michigan communities they serve. In particular, our EAS communities have benefited from this excellent service as their limited schedules make them highly sensitive to delays and cancellations.

Based on our analysis, we believe advantages exist both in cost‑savings and hub‑connectivity with the proposals submitted by Skyway Airlines Inc., dlb/a Midwest Connect Furthermore, the contingency required by the proposal of Mesa Air Group, Inc., dlb/a Air Midwest to also receive award of EAS subsidy at six (6) additional locations, imposes undue risk on the future of air service at the Michigan communities of Iron. Mountain, Ironwood, and Manistee.

By: Michigan Department of Transportation, Gerald Edwards

Essential Air Service at Iron Mountain/Kingsford, Ironwood, and Manistee/Ludington, Michigan / Ashland, Wisconsin

Order 2005-5-14
OST-99-5175 - EAS at Iron Mountain/Kingsford, MI
OST-99-5712 - EAS at Ironwood, MI/Ashland, WI
OST-96-1711 - EAS at Manistee/Ludington, MI

Issued May 23, 2005 | Served May 26, 2005

Order Selecting Carrier and Setting Final Subsidy Rate

Given the strong community support and the great subsidy difference, we will select Skyway Airlines, to provide essential air service at Iron Mountain/Kingsford for a subsidy rate of $602,761 annually, at Ironwood/Ashland for $409,242 annually, and at Manistee/Ludington for $776,051 annually. Though not a statutory selection criterion, we note also that Skyway Airlines had done a good job of building passenger levels at all three communities. In particular, as we noted in Order 2005-2-3, traffic at Ironwood/Ashland and Manistee/Ludington has grown to levels well above those experienced in 2000, the last calendar year not affected by the terrorist attacks of September 11.

By: Karan Bhatia

Order 2007-1-2
OST-1999-5175 - EAS at Iron Mountain/Kingsford, MI
OST-1999-5712 - EAS at Ironwood, MI/Ashland, WI
OST-1996-1711 - EAS at Manistee/Ludington, MI
OST-2003-15128 - EAS at Escanaba, MI

Issued January 5, 2007 | Served January 10, 2007

Order Requesting Proposals

By this order, the Department is requesting proposals from air carriers interested in providing essential air service at: Iron Mountain/Kingsford, Michigan; Ironwood, Michigan/Ashland, Wisconsin; Manistee/Ludington, Michigan; and Escanaba, Michigan, for a new two-year period, beginning June 1, 2007, with or without subsidy.

With specific respect to Iron Mountain/Kingsford, Ironwood/Ashland, Manistee/Ludington and Escanaba, the Department expects proposals consisting of service with 19-passenger aircraft and offering a mix of two or three round trips a day between each community and Milwaukee. Larger aircraft, offering fewer daily trips may be substituted in lieu of the 19-passenger aircraft, higher frequency service so long as the number of available seats between the EAS community and the hub are approximately equivalent. Such service is generally consistent with what the communities currently receive, and fully satisfies their essential air service requirements. 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.

By: Todd Homan

Order 2007-2-8
OST-1999-5175 - EAS at Iron Mountain/Kingsford, MI
OST-1999-5712 - EAS at Ironwood, MI/Ashland, WI
OST-1996-1711 - EAS at Manistee/Ludington, MI
OST-2003-15128 - EAS at Escanaba, MI

Issued February 6, 2007 | Served February 9, 2007

Erratum

By Order 2007-1-2, January 5, 2007, the Department requested proposals from air carriers interested in providing essential air service at: Iron Mountain/Kingsford, Michigan; Ironwood, Michigan/Ashland, Wisconsin; Manistee/Ludington, Michigan; and Escanaba, Michigan, for a new two-year period, beginning June 1, 2007, with or without subsidy. Upon review and consultation with the Gogebic-Iron County Airport Manager and Skyway Airlines, Inc., d/b/a Midwest Connect, the incumbent EAS air carrier, it was discovered that the enplanement data detailed in Appendix B of Order 2007-1-2, was incorrect. The corrected data for Calendar Years 2005 and 2006 are detailed in Appendix B.

Carriers should file their proposals no later that February 9, 2007. Consistent with EAS Program practice, we will give full consideration to all proposals filed in a timely manner.

By: Todd Homan

OST-1999-5175 - EAS at Iron Mountain/Kingsford, MI
OST-1999-5712 - EAS at Ironwood, MI/Ashland, WI
OST-1996-1711 - EAS at Manistee/Ludington, MI
OST-2003-15128 - EAS at Escanaba, MI

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	Iron Mountain	Milwaukee	3	1900D	$797,885	17,400	$87.00
2	Escanaba	Milwaukee	3	1900D	$617,415	19,750	$67.00
3	Ironwood	Milwaukee	2	1900D	$799,779	6250	$92.00
4	Manistee	Milwaukee	2	1900D	$957,978	3850	$79.00

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 Milwaukee hub. In addition, we are anticipating executing a code-sharing agreement with Midwest Airlines to allow passengers a seamless connection at Midwest Airlines Milwaukee hub.

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

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

February 2, 2007

Proposal of Mesaba Airlines

In response to the Department’s Order 2007-1-2, Mesaba Aviation, Inc., doing business as Northwest Airlink, is enclosing a detailed subsidy proposal for essential air service at Escanaba, MI at a level of thirteen roundtrip, non-stop flights per week using 34-seat Saab 340 aircraft from Northwest’s DTW hub.

Depart DTW	Arrive ESC	Depart ESC	Arrive DTW
1210	1330	0814	0935
2250	0010	1459	1620

By: Mesaba, John Spanjers

February 9, 2007

Skyway Airlines Will Not Submit Proposals

Skyway will not be in a position to continue to provide these services in the future and, therefore, Skyway respectfully advises the Department that it will not be submitting a proposal to continue to serve the cities in response to Order 2007-1-2. However, as explained below and in the enclosed updated subsidy proposal, Skyway, if necessary, is willing to be held in at the proposed rates for a reasonable period of time until the DOT selects a replacement carrier or carriers.

The principal motivation for the Skyway decision not to submit a proposal in response to the DOT's Order is the fact that the carrier took the decision several years ago to begin disposing of its fleet of Beech 1900 aircraft. Since 2004, 7 of the fleet of 14 aircraft have already been disposed of and the carrier's plan is to retire the remainder of the aircraft type from its fleet during 2007. This aspect of the carrier's fleet simplification plan will be completed prior to the end of the next two year SAG term and, therefore, Skyway is not in a position to commit to the Department that it will have the capability to provide 19 seat aircraft for this SAG service for the upcoming term.

Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3300

OST-1999-5175 - EAS at Iron Mountain/Kingsford, MI
OST-1999-5712 - EAS at Ironwood, MI/Ashland, WI
OST-1996-1711 - EAS at Manistee/Ludington, MI
OST-2003-15128 - EAS at Escanaba, MI

February 16, 2007

Requests for Community Comments of:

• Gogebic-Iron County Airport Authority Chairman
• Gogebic-Iron County Airport Manager
• Wisconsin Department of Transportation Secretary

In anticipation of the end of Skyway Airlines’ current contract on May 31, 2007, the Department issued Order 2007-1-2 on January 5, 2007, to solicit proposals from all interested air carriers to provide EAS at the four communities identified above, for a new two-year term. In response to that order, Skyway Airlines indicated that it is disposing of its fleet of Beech 1900 aircraft, a process that is expected to be completed prior to the end of the next two-year term, and therefore did not submit a long-term proposal. It did, however, submit a request for a higher subsidy rate beginning June 1 in the event carrier transition has not occurred by then. Skyway Airlines will continue to provide EAS at all four communities until a new carrier inaugurates service so that there will be no hiatus in service. Great Lakes Aviation, Ltd. and Mesaba Aviation, Inc. were the only carriers to submit proposals for a new two-year term.

We request that you review the carriers’ proposals 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 March 9, 2007.

By: Brian Swanson

February 16, 2007

Re: Letter to Manistee County Blacker Airport Authority

Re: Letter to Manistee County Blacker Airport

Re: Letter to Michigan Department of Transportation

Great Lakes would require $957,978, approximately $181,900 more than the existing rate, to provide two round trips each weekday and each weekend with an allowable intermediate stop on no more than three of the four one‑way flights.

By: EAS Division, Dennis DeVany

OST-1996-1711 - Manistee/Ludington
OST-1999-5175 - Iron Mountain/Kingsford
OST-1999-5712 - Oshkosh, WI
OST-2003-15128 - Escanaba

February 28, 2007

Re: Delta County Airport Request for an Extension

March 1, 2007

Re: Delta County Airport Granted 7-Day Extension to File Comments

By letters to the communities listed above, dated February 16, the Department offered Escanaba, Michigan the opportunity to provide comments on the essential air service proposals submitted by Great Lakes Aviation, Ltd. and Mesaba Aviation, Inc. The deadline for comments was set as March 9, 2007. In an e-mail dated February 28th, the Manager of the Delta County Airport requested a 7-day extension to file comments. We are hereby granting the community's request and extending the date for comments from the communities listed above until March 16, 2007.

By: EAS & Domestic Analysis, Dennis DeVany

February 28, 2007

Support for Great Lakes Airlines:

• Manistee County Blacker Airport Authority

OST-1996-1711 - Manistee/Ludington
OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba
OST-1996-1266 - Ironwood

March 16, 2007

Comments of Michigan Department of Transportation

We were disappointed to learn that Skyway Airlines did not submit a proposal to continue service in these markets. The excellent service they provided allowed each of these communities reliable access to the national air transportation system while affording a high level of customer service. However, we are encouraged that bids for replacement service have been received from Great Lakes Airlines and, in the case of Delta County Airport, by Mesaba Airlines as well.

In the case of Gogebic-Iron County, Ford, and Manistee-Blacker Airports, Great Lakes Airlines is the lone bidder for replacement service with its offering of daily flights to Milwaukee's General Mitchell International Airport. Once again, we stress the importance of closely monitoring the timing and reliability of service as well as the establishment of a formal codeshare agreement with Midwest Express Airlines. Without such a code-share, service to Milwaukee will only serve origin and destination passengers and stifle market growth in these communities.

While requiring greater subsidy than the proposal offered by Great Lakes Airlines, Mesaba Airlines' proposal to serve Delta County Airport appears to better meet the community's needs. As proposed, the nonstop service to Detroit Metro Airport will enable the community to regain a substantial number of passengers that were migrating to neighboring airports in search of nonstop service and/or larger aircraft. In addition, the myriad connections available through Detroit will enable Escanaba area travelers a host of recreational and business travel opportunities.

By: Director, Rob Abent, 517-373-2080

OST-1996-1711 - Manistee/Ludington
OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba
OST-1996-1266 - Ironwood

March 19, 2007

Statement of Midwest Airlines

Midwest Airlines, Inc. hereby states that Midwest has signed a letter of intent with Great Lakes Aviation, Ltd. to codeshare with Great Lakes on its flights between Midwest's Milwaukee, Wisconsin hub and Iron Mountain/Kingsford, Ironwood/Ashland. Manistee/Lundington and Escanaba in the event that Great Lakes is selected in this proceeding. The letter of intent states that the entry into the code share agreement by Midwest and Great Lakes is subject to mutual agreement on definitive documentation of the arrangement.

Counsel: Silverberg Goldman, Robert Silverberg, 202-944-330

Order 2007-3-21
OST-1996-1711 - Manistee/Ludington
OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba
OST-1996-1266 - Ironwood/Ashland

Issued March 30, 2007 | Served April 4, 2007

Order Selecting Carrier and Setting Final Subsidy Rates

By this order, the Department is selecting Great Lakes Aviation, Ltd. to provide subsidized essential air service at all four of the above-captioned communities for the two-year period beginning when the carrier inaugurates full service. The annual subsidy rates will be set at: $797,885 for Iron Mountain/Kingsford, $799,779 for Ironwood/Ashland; $957,978 for Manistee/Ludington; and $617,415 for Escanaba.

By: Andrew Steinberg

Order 2007-6-5
OST-1996-1711 - Manistee/Ludington
OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba
OST-1996-1266 - Ironwood/Ashland

Issued June 6, 2007 | Served June 11, 2007

Erratum

By this order, the Department is correcting the final operational and financial unit rates it will pay to Great Lakes Aviation, Ltd., to provide subsidized essential air service at the four above-captioned communities for the two-year period beginning when the carrier inaugurates full service. Great Lakes' annual subsidy rates remain unchanged; however, the corrected operational and financial unit rates are summarized in Appendix A. This order also corrects the annual total subsidy rate that Skyway Airlines, Inc., d/b/a Midwest Connect will be compensated for its provision of EAS in the interim period, until Great Lakes inaugurates full service. The Department will only subsidize the number of flights that it subsidized under the previous contract. Therefore, Skyway's annual total subsidy for its provision of EAS at all four communities will be set at $3,682,282, not $3,817,224, as stated in Order 2007-3-21.

By: Todd Homan

Order 2007-10-41
OST-1996-1711 - Manistee/Ludington
OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba
OST-1996-1266 - Ironwood/Ashland

Issued October 29, 2007 | Served November 1, 2007

Order Requesting Proposals | Word

By this order, the Department is re-soliciting proposals from air carriers interested in providing essential air service at any or all of the four communities identified above. The carrier that was selected in March 2007 has not yet inaugurated service and, therefore, we are requesting proposals for a new two-year period, beginning when the carrier inaugurates full service, with or without subsidy. Carriers should file their proposals no later than November 19, 2007.

We vacate Order 2007-3-21, selecting Great Lakes Aviation, Ltd., to provide essential air service at:  Iron Mountain/Kingsford, Michigan; Ironwood, Michigan/Ashland, Wisconsin; Manistee/Ludington, Michigan; and Escanaba, Michigan.

With specific respect to Iron Mountain/Kingsford, Ironwood/Ashland, Manistee/Ludington and Escanaba, the Department expects proposals consisting of service with 19-passenger aircraft and offering a mix of two or three round trips a day between each community and Milwaukee.  We would also entertain proposals with larger aircraft, offering fewer daily trips.  Such service is generally consistent with what the communities currently receive, and fully satisfies their essential air service requirements.  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.

By: Michael Reynolds

OST-1996-1711 - Manistee/Ludington
OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba
OST-1996-1266 - Ironwood/Ashland

November 19, 2007

Proposals of Big Sky Airlines

Big Sky plans on operating this service as Big Sky Airlines. We will work with our code-share partners US Airways and Northwest to attempt to extend our code-share agreements to these communities. Big Sky also understands from conversations with Midwest Airlines that a similar code-share agreement will be possible if Big Sky is awarded service to these markets.

Big Sky will operate the service proposed herein with the 19 seat Beechcraft 1900D aircraft. Big Sky continues to upgrade its reservation system and now offers customers the ability to have interline e-ticketing available for flights connecting to both Northwest Airlines and Alaska/Horizon Air.

The service pattern includes:

• 18 Weekly Escanaba - Milwaukee roundtrips
• 18 Weekly Iron Mountain/Kingsford - Milwaukee roundtrips
• 12 Weekly Ironwood/Ashland - Milwaukee roundtrips
• 12 Weekly Manistee/Ludington - Milwaukee roundtrips

By: Big Sky, Fred deLeeuw, 406-247-3931, fred.deleeuw@bigskyair.com

November 27, 2007

Manistee County Blacker Airport Authority in Support of Midwest Airlines

We are responding to the HAS proposal at Manistee, Michigan by Big Sky Transportation Co. DBA Big Sky Airlines for Order 2007-10-41. Our hub was changed from Chicago-O'Hare to Milwaukee to be a Midwest Connector. Since Midwest has been serving Manistee our enplanements have more then doubled. Midwest Airlines' great schedule, competitive fares and near 100% completion of all flights have contributed to this increase.

We would support the Big Sky proposal based on operating as a Midwest Connector. We have no objections with Big Sky code sharing with other carriers however Midwest is the prime reason for Milwaukee service.

By: Airport Manager, William House

OST-1996-1711 - Manistee/Ludington
OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba
OST-1996-1266 - Ironwood/Ashland

January 2, 2008

Re: Big Sky Airlines Withdraw

Big Sky hereby withdraws from the Michigan case.

By: Fred deLeeuw

OST-1996-1711 - Manistee/Ludington
OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba
OST-1996-1266 - Ironwood/Ashland

January 8, 2008

Michigan State DOT in Support of Mesaba Airlines

While encouraged by the interest of Big Sky Airlines in serving these airports, their recent announcement of reduced operations and possible liquidation precludes them as a viable bidder. Therefore, we support selection of the dtemative bids offered by Mesaba Airlines dba Northwest Airlink for service at Ford and Delta County Airports.

By: Gerald Edwards

Order 2008-1-13
OST-1999-5175 - Iron Mountain/Kingsford
OST-1996-1266 - Ironwood, MI/Ashland, WI
OST-1996-1711 - Manistee/Ludington
OST-2003-15128 - Escanaba

Issued | Served

Order Selecting Carrier, Setting Final Subsidy Rates and Requesting Proposals

By this order, the Department is: (a) selecting Mesaba Aviation, Inc., d/b/a Mesaba Airlines, operating as Northwest Airlink, utilizing 34-seat Saab 340 aircraft to provide subsidized EAS at Iron Mountain/Kingsford and Escanaba Michigan, at a combined annual subsidy rate of $2,251,767; and (b) requesting proposals by February 1 from carriers interested in providing EAS at Ironwood, Michigan/Ashland, Wisconsin, and Manistee/Ludington, Michigan, for a new two-year period, beginning when the carrier inaugurates full service, with or without subsidy. Mesaba will provide EAS at Iron Mountain/Kingsford and Escanaba, Michigan, for a new two-year term beginning when it inaugurates full service.

By: Michael Reynolds

Order 2008-2-12
OST-1996-1266 - Ironwood, MI/Ashland, WI
OST-1996-1711 - Manistee/Ludington

Issued February 8, 2008 | Served February 13, 2008

Order Requesting Proposals

By this order, the Department is re-soliciting proposals from air carriers interested in providing essential air service at the two communities identified above. The carrier that was selected in March 2007 never inaugurated service, and no other carrier responded to the Department’s most recent solicitation for proposals at the two communities, which closed on February 1, 2008. Therefore, we are again requesting proposals for a new two-year period, beginning when the carrier inaugurates full service, with or without subsidy. Carriers should file their proposals no later than February 27, 2008.

With specific respect to Ironwood/Ashland and Manistee/Ludington, the Department expects proposals consisting of service with 19-passenger or larger aircraft and offering two round trips a day between each community and Milwaukee. We would also entertain proposals with smaller aircraft, offering more daily trips, subject to the concurrence of the communities.

By: Todd Homan

OST-1996-1266 - Ironwood, MI/Ashland, WI
OST-1996-1711 - Manistee/Ludington

February 25, 2008

Motion for Extension of Time to Submit Proposals of Pacific Wings

Pacific Wings hereby moves for a 15-day extension of the period set forth in Order 2008-2-12, until March 11, 2008, in order to allow the Department to poll the communities with respect to whether they would entertain service by an air carrier using 9-seat single-engine turboprop aircraft. While Pacific Wings is interested in providing service to these communities, it is reluctant to devote the resotirces necessary to submit a proposal in the absence of an expression from each community of its willingness to be served by aircraft with fewer than 15 seats. The requested extension of time should provide sufficient time for the Department to obtain a written expression of intent from each community and for Pacific Wirgs to submit a proposal should the communities agree to service using 9-seat aircraft.

Counsel: Patton Boggs, Gregory Walden, 202-457-6135, gwalden@pattonboggs.com

OST-1996-1266 - Ironwood, MI/Ashland, WI
OST-1996-1711 - Manistee/Ludington

February 27, 2008

Withdrawal of Motion for Extension of Time to Submit Proposals of Pacific Wings

Pacific Wings Airlines, Ltd., by its counsel, hereby withdraws its motion to extend time to submit proposals in these proceedings. Pacific Wings understands that notwithstanding the urgent pleas from Midwest Connect to Pacific Wings to take its place and serve these Essential Air Service communities, Midwest Connect simultaneously was soliciting one or more other carriers, at least one of whom will submit a proposal. Pacific Wings apologizes to the Department for wasting its time.

Counsel: Patton Boggs, Gregory Walden, 202-457-6135, gwalden@pattonboggs.com

February 27, 2008

Proposal of Great Lakes Airlines

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 Milwaukee hub. In addition, we will endeavor to obtain code-sharing arrangements with major carriers serving the Milwaukee market, to allow passengers in these EAS markets the seamless service, in which they are accustomed to, through Milwaukee to the destinations served by our partners and prospective partners.

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

Proposal Part	Service Point(s)	Hub(s) Served	Round Trips	Equipment	Subsidy Requirement	Passengers Forecast	Average Fare
1	Ironwood	Milwaukee	2	1900D	$1,492,865	6250	$97.92
2	Manistee	Milwaukee	2	1900D	$1,799,395	5750	$79.00

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

OST-1996-1266 - Ironwood, MI/Ashland, WI
OST-1996-1711 - Manistee/Ludington

February 27, 2008

DOT Denying Motion of Pacific Wings to Extend Proposal Date

On February 25, Pacific Wings Airlines, Ltd. filed a motion with the Department requesting a 15-day extension, until March 11, of the proposal due date. Specifically, Pacific Wings stated that the extension of time "should provide sufficient time for the Department to obtain written expression of intent from each community and for Pacific Wings to submit a proposal should the communities agree to service using 9-seat aircraft."

On February 27, the Department telephoned the airport managers at each of the above-mentioned communities to solicit their comments on Pacific Wings' motion. Both airport managers opposed Pacific Wings' motion for a variety of reasons. As a result, we deny Pacific Wings' motion to extend the due date for EAS proposals at these two communities.

By: Dennis DeVany

February 28, 2008

Manistee County Blacker Airport Authority in Support of Great Lakes Aviation

We are responding per request on service at Manistee, Michigan for EAS service by Great Lakes Airlines. We switched from Chicago O'Hare to Milwaukee only because we were very familiar with Midwest Airlines reputation. Since Midwest airlines has been in Manistee our traffic has more then doubled. Reasons for traffic increase are great schedule, meeting all Midwest connections in and out of Milwaukee, competitive fares (when Midwest came here they called their fare structure "Southwest type fares"), and near 100% completion of all flights. They have continued that fare structure since starting in Manistee.

We would support the Great Lakes proposal based on operating as a Midwest Connect carrier. This would include same schedules and Midwest fare structures. We have no objections with Great Lakes code sharing with other airlines in Milwaukee as long as they maintained the Midwest connection.

By: Airport Manager, William House

OST-1999-5175 - Iron Mountain/Kingsford
OST-1996-1266 - Ironwood, MI/Ashland, WI
OST-1996-1711 - Manistee/Ludington
OST-2003-15128 - Escanaba

April 1, 2008

Re: Cessation and Returning of Certificates and Authorities of Skyway Airlines

As the Department is now aware, Skyway Airlines, Inc. will terminate all air carrier service after April 5, 2008. As a result. Skyway will be returning for cancellation its air carrier certificates and authorities to the DOT and FAA for cancellation. This decision was a most reluctant, but necessary one. Skyway has not earned any operating or net profits for at least the last three years and has no prospects for doing so, particularly given the current and all-time high price of aviation fuel. The cessation of all Skyway operations necessarily includes its operations to the communities Iron Mountain/Kingsford, Michigan, Ironwood, Michigan/Ashland, Wisconsin, Manistee/Lundington, Michigan and Escanaba, Michigan.

Skyway has been providing EAS to the Four Communities for many years and has been "held in" (since June 1, 2007) awaiting Great Lakes to commence service—an obligation on which it defaulted leading to the decision of the Department to vacate Order 2007-3-21 selecting Great Lakes to provide subsidized service to the Four Communities. Subsequently another applicant—Big Sky—withdrew its proposal to provide the essential air service and Mesaba chose only to serve two of the four EAS points. Later in response to Order 2008-1-13, Great Lakes proposed to provide the requested air service and then seemingly, once again, backed out, after making a formal proposal to the DOT. All during this time period the Department has been aware of the plans of Skyway to eliminate its Beech 1900 aircraft fleet when the Department was so advised in writing (having previously been orally advised) on February 9, 2007 when Skyway formally announced its intention not to continue to provide the essential air service. Skyway has nonetheless continued to provide uninterrupted EAS to the Four Communities, consistently and well, even though it incurred increasingly higher unit operating costs to do so.

Skyway lacks any ability to continue to offer essential air service to the Four Communities. There is no statutory basis for requiring Skyway to provide to service when it lacks the capacity to do so. Nor is there any basis to take action against Skyway's code share partner. Midwest Airlines, under §41739. This is truly an unfortunate, but totally unavoidable situation. Skyway will continue to reaccommodate previously booked passengers on other services of Midwest provided through Muskegon, Grand Rapids, Green Bay, Central Wisconsin / Wausau, and Appleton.

Skyway is continuing to work with Great Lakes to assist it in achieving its objective of providing essential air service to Ironwood and Manistee and hopes to be able to successfully conclude its agreements with Great Lakes to enable the carrier to serve Ironwood and Manistee. In addtion. Skyway extends this offer of cooperation to any other carrier that may wish to submit a proposal to the DOT to provide subsidized service in response to Order 2008-1-13 should Great Lakes choose not to proceed with its proposal.

Counsel: Silverberg Goldman, Robert Silverberg

Order 2008-4-10
OST-1996-1266 - Ironwood, MI/Ashland, WI
OST-1996-1711 - Manistee/Ludington

Issued April 7, 2008 | Served April 10, 2008

Order Selecting Carrier and Setting Final Subsidy Rates | Word

By this order, the Department is selecting Great Lakes Aviation, Ltd. to provide subsidized essential air service at Ironwood, Michigan/Ashland, Wisconsin, and Manistee/Ludington, Michigan, utilizing 19-seat Beech 1900D aircraft at a combined annual subsidy rate of $3,292,260, for a new two-year term beginning when it inaugurates full service.

This case is very straightforward, Great Lakes was the only carrier to submit a proposal and both communities support the selection of the carrier. Great Lakes is an established carrier, provides a significant amount of subsidized EAS throughout the country, and has previously served these two communities. The carrier anticipates obtaining a code-share agreement with Midwest Airlines and its proposed service would essentially replicate the existing (one-stop and nonstop) service to Milwaukee that Skyway Airlines has successfully provided for several years. We encourage the communities and the carrier to continue to work together to optimize the service patterns under this carrier selection. Finally, we note that Midwest Airlines is in the process of shutting down the operations of Skyway. The plans are for Great Lakes to take over these routes on or about April 6.

By: Michael Reynolds

OST-1996-1711 - Manistee/Ludington
OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba
OST-1996-1266 - Ironwood/Ashland

April 23, 2008

Re: DOT Letter to Congressman Bart Stupak

First, we are not in a position to enforce contracts between third parties. Airline-airport relationships are essentially a landlord-tenant relationship, and the Department has neither the authority nor expertise to adjudicate contractual dispute between third parties.

Second, the EAS program was designed to provide scheduled air service to eligible communities, not to provide revenue to airports in the form of landing fees, rents, or fuel sales. Other than enplanement funds discussed below, the Department does not have the authority to compensate airports for foregone revenues.

Third, we contacted the FAA regarding your question about entitlement funds based on enplanement levels. The lack of service during calendar year 2008 at Delta County Airport may impact the airport's total enplanements and could impact their Airport Improvement Program passenger entitlement funding in FY 2010. However, Section 47114(c)(1)(E) of Title 49 of the United States Code contains a provision that allows the Department the discretion to reapportion the prior year's funding under certain circumstances. The FAA will consider its applicability to this airport and other communities that Skyway Airlines served when we are reviewing the calendar year 2008 enplanements in the spring of 2009.

Finally, DOT has been closely monitoring the negotiations between Great Lakes and Midway Airlines to effect the transfer of aircraft to Great Lakes. Furthermore, meetings and phone calls to both parties have taken place at the Assistant Secretary level, something that is unprecedented in the EAS program. Ultimately, though, this is a commercial transaction that must be resolved by the respective parties. If Great Lakes is not able to start service in a timely fashion, we will re-solicit proposals for replacement service.

By: Dennis DeVany

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