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OST-1997-2935

EAS Docket

Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, and Jonesboro, Arkansas

Order 1997-9-31
OST-1997-2935

Issued September 30, 1997 | Served October 6, 1997

Order Tentatively Reselecting Carrier and Establishing Subsidy Rate

By this order, the Department is revising the service levels and subsidy rates for Exec Express II, d/b/a Aspen Mountain Air/Lone Star Airlines (Lone Star) for its provision of essential air service (EAS) at El Dorado/Camden, Harrison, Hot Springs, and Jonesboro, Arkansas. We are setting the new service and subsidy levels to be effective from October 1, 1997, or when the new service is implemented, whichever is later, through the remainder of the carrier's present rate term, which ends on November 30, 1997; and we are tentatively reselecting Lone Star to provide subsidized essential air service at the four communities for a new two-year rate term through November 30,1999.

Appendix A | Appedix B | Appendix C | Appendix D | Appendix E

By: Charles Hunnicutt

By this order, the Department places Exec Express II, d/b/a Aspen Mountain Air (AMA, formerly Lone Star Airlines) on notice that it may not suspend essential air service (EAS) at the communities captioned above until it has first fully complied with the 90 day notice provision of 49 U.S.C. 41734, and then only when a replacement carrier actually begins service. We also request proposals to provide emergency replacement service at the seven communities.

By:  Linda Prete, 202.366.1051

By this order, the Department approves the transfer of essential air service responsibilities and the accompanying subsidy rates for El Dorado/Camden (E1 Dorado),Jonesboro, Harrison, and Hot Springs, Arkansas; Enid and Ponca City, Oklahoma; and Brownwood, Texas, from Exec Express II, d/b/a Aspen Mountain Air (AMA, formerly LoneStar Airlines) to Big Sky Airlines, effective when replacement service actually begins. (See Appendix A for a map.)

By:  Charles Hunnicutt

By:  Bradley Mims

By:  Bradley Mims

By:  Boone County Airport Judy McCutcheon

By:  Harrison Chamber of Commerce, Layne Wheeeler

By:  City of Harrison, Robert Reynolds

By:  Harrison, Ennis DeVaney

By:  Randall Bennett

According to traffic data reported by Big Sky, Harrison registered 4,936 origin-and­destination passengers, or 2,468 enplanements (half of total origin and-destination passengers), during the 12 months ended March 31, 2001 -- an average of 7.9 enplanements a day, based on 313 weekdays and weekends in a year. Of that total, Harrison's service to St. Louis accounted for just 1,020 origin-and-destination passengers, or 510 enplanements -- an average of only 1.6 enplanements a day, or less than one passenger per flight on 19-seat aircraft. It seems clear that the Harrison community prefers service to Dallas/Ft. Worth, whereas the St. Louis service is hardly used at all.

Furthermore, in the enclosed Order 2000-12-21, December 22, 2000, the Department discussed Harrison's program status in view of statutory prohibitions against our paying subsidy to support service at communities that fail to meet certain eligibility criteria, including communities whose subsidy exceeds $200 per passenger unless they are located more than 210 highway miles from the nearest large or medium hub. Harrison is 183 highway miles from a medium-hub airport at Tulsa, Oklahoma, and its subsidy, based on the traffic data noted above and one-half of the annual subsidy rate it shares with Hot Springs, currently amounts to $228 per passenger. The high subsidy-per­ passenger figure is strongly influenced by the poorly used service to St. Louis, which is jeopardizing Harrison's continued eligibility for any subsidized service at all.

By:  Dennis DeVany

In reply to your letter of June 25, 2001 regarding the essential air service program, the City of Harrison would definitely like to continue the subsidized service to Dallas/Ft. Worth. We would also like to continue with the St. Louis subsidized service but concur that the improvement in the service to Dallas/Ft. Worth would be of more value to our community than the service to St. Louis has proven to be. The Harrison community seems to prefer and does not wish to jeopardize any funding or service to Dallas/Ft. Worth even if it means the discontinuance of subsidy to the St. Louis service.

By:  City of Harrison, Robert Reynolds

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

Objection of the Greater Hot Springs Chamber of Commerce and Garland County Economic Development Corporation to Hot Springs, Arkansas being eliminated from the Essential Air Service subsidy program.

By:  Greater Hot Springs Chamber of Commerce, Jay Chhesshir

By:  Regional Aviation Partners, Maurice Parker

By:  Big Sky Airlines, Craig Denney, 406.247.3912

By:  Harrison & Boone County, Arkansas, Layne Wheeler

Under Orders 99-12-28, December 29, 1999, and 2000-12-21, December 22, 2000, the Department has authorized Big Sky Transportation Co., d/b/a Big Sky Airlines, to provide subsidized essential air service at Harrison, Arkansas, for the two-year period ending November 30, 2001, by operating two and a half round trips to Dallas/Ft. Worth and one and a half round trips to St. Louis each weekday and weekend with 19-seat Fairchild Metro III or Metro 23 aircraft. Big Sky provides Harrison's service over routes that also serve Hot Springs, Arkansas, whose service to Dallas/Ft. Worth is subsidized, and Mountain Home, Arkansas, whose service is not subsidized. Subsidy for the routes is currently $2,251,181 annually.

By letter dated September 18, 2001, Big Sky now requests that it be allowed to implement a modified service pattern providing Harrison with a full three round trips each weekday and weekend via Hot Springs to Dallas/Ft. Worth in lieu of any service to St. Louis, beginning October 1, at the current subsidy rate. Since Big Sky would no longer be operating any service to/from St. Louis, Hot Springs' service would be limited to its designated hub of Dallas/Ft. Worth and Mountain Home would lose service entirely.

We will approve the alternative service pattern proposed by Big Sky, which has the Harrison community's support, effective October 1 through November 30, 2001, the end of the current rate term. As we previously discussed in Order 2000-12-21, Big. Sky's service to St. Louis service is little used by the Harrison community, averaging less than one passenger per flight on 19-seat aircraft. We expect that the community will be better served by three round trips a day to Dallas/Ft. Worth. Concomitant with our approval, we will adjust Big Sky's subsidy payout (subsidy per arrival and departure) to ensure that the carrier receives the same total subsidy under the modified service pattern as under the present one.

We recognize that Hot Springs and Mountain Home have been incidental beneficiaries of Harrison's service to St. Louis, and that the elimination of that route will affect those two communities. However, Hot Springs is guaranteed service to Dallas/Ft. Worth only, and it will continue to receive the three round trips each weekday and weekend to Dallas/Ft. Worth that we have been supporting. On the other hand, Mountain Home is not an essential air service point as defined by 49 U. S.C. 4173 1 (a), and thus not guaranteed service at all. Consequently, we may not spend program funding to pay subsidy for Big Sky or any other carrier to maintain scheduled service at Mountain Home.

By:  Susan McDermott

By:  Randall Bennett

By this order, the Department is tentatively reselecting Big Sky Transportation Co., d/b/a Big Sky Airlines, to provide essential air service at the seven communities named above for the two-year period beginning December l, 2001, at annualized subsidy rates totaling $8,146,535 for the first 6 months of the period, through May 31, 2002, and $7,781,317 for the remaining 18 months, through November 30, 2003. The order also provides for objections or competing proposals from other interested carriers.

By:  Read Van de Water

By:  Corporate Airlines

By:  Corporate Airlines

By:  Corporate Airlines  

By:  Corporate Airlines

By:  Gus Carbonell

By:  Gus Carbonell

By:  Dennis DeVany

By:  Dennis DeVany

By:  Dennis DeVany

By:  Dennis DeVany

By:  Dennis DeVany

By:  Jonesboro Municipal Airport Commission, Mike Medlock

By:  City of Hot Springs, Mike Bush

By Order 2002-2-9, February 11, 2002, the Department tentatively reselected Big Sky to provide subsidized service at seven communities in Arkansas, Oklahoma and Texas for the two-year period beginning December 1, 2001, at annualized subsidy rates totaling $8,146,535 during the first 6 months and $7,781,317 during the remaining 18 months. Under the terms of that order, Big Sky was authorized to continue providing the following services with 19-seat Metro III or Metro 23 aircraft: 12 Jonesboro-El Dorado/Camden-Dallas/Ft. Worth and 6 El Dorado/Camden-Dallas/Ft. Worth round trips a week; 18 Harrison-Hot Springs-Dallas/Ft. Worth round trips a week; 17 Enid-Ponca City-Dallas/Ft. Worth and 7 Enid-Ponca City-Denver round trips a week; and 18 Brownwood-Dallas/Ft. Worth round trips a week.

We have also traditionally given considerable weight to the amount of subsidy required by each applicant. In this regard, Air Midwest's proposal again stands foremost. Air Midwest proposes services identical to those already authorized for the incumbent, Big Sky, but would require about $1.1 million a year less subsidy than Big Sky. The difference in subsidy requirements between Air Midwest and Corporate is even greater. Corporate's least expensive service package, Option B, is nearly $170,000 a year above Air Midwest's proposal, but does not reflect the additional subsidy that would be required in our selecting another carrier to serve Enid and Brownwood, which are not included in Corporate's proposal at all. Moreover, Corporate's Option B would provide El Dorado/Camden, Harrison and Hot Springs with less service than Air Midwest's proposal -- 12 round trips a week rather than 18.

By:  Read Van de Water

The Department's failure to scrutinize Air Midwest's proposal despite the serious issues raised about not only threatens continued service in the affected communities but also encourages other airlines to submit unrealistic proposals and use similar tactics to secure community support in future Essential Air Service proceedings. The Department should reconsider its decision in this case and, upon reconsideration, select Big Sky to continue subsidized service in the affected markets.

Counsel:  Crowell Morning, Lorraine Halloway, 202.624.2538

This letter supports the Petition for Reconsideration and Motion for Stay filed by Big Sky Airlines. At no time has Ponca City switched its support to Mesa/Air Midwest. Our interest is in developing a long-term, stable relationship with a company that will live up to its promises, and Big Sky has traditionally met and even exceed its commitments to our community.

After Mesa/Air Midwest received my letter of June 17, 2002, 1 received a call from the company about my references to the tenuous assumptions in its subsidy calculation. Simply stated, Mesa/Air Midwest incredibly claims it can significantly raise passenger boardings without raising costs. The Mesa/Air 'Midwest official who called me seemed upset by the sincere questions raised in my letter. Without my knowledge he then contacted our Public Works Director, and asked him to write a letter to D.O.T. supporting Mesa/Air Midwest and directly opposing my position, which is also that of our advisory board. To put this as kindly as possible, his indignant attitude and surreptitious behavior raise red flags about the quality and duration of Mesa/Air Midwest's service to our community

By:  City of Ponca City, Tom Leonard

Contrary to Big Sky's assertion, Air Midwest properly filed a proposal to provide essential air service with the Department on March 5, 2002, one day prior to the due date. Upon subsequent request by the Department, Air Midwest resubmitted its proposal within twenty-four hours of such request, with minor revisions. Air Midwest cannot be faulted for the actions or requests of the Department.  There is no basis for re-opening the record to second-guess the Department's thorough evaluation of Air Midwest's proposal and subsidy requirements. The Department's Office of Aviation Analysis staff is highly experienced in reviewing EAS service proposals, traffic forecasts and subsidy amounts. Big Sky's efforts to re-draft Air Midwest's proposal based on different assumptions are without merit and should be rejected.

By:  Air Midwest, Brian Gillman

After fully considering the issues raised by Big Sky and the answers from Ponca City and Mesa, we have decided to deny Big Sky's petition for reconsideration and motion for a stays. As Mesa correctly notes, it has been our consistent practice to accept late-filed proposals to the extent practicable. In our orders requesting proposals for essential air service, including Order 2002-2-9, we routinely note the availability to interested carriers of an explanatory document called "Air Carrier Selection Procedures" that describes our process for handling carrier replacement cases and discusses in detail the process of requesting proposals, conducting reviews of applicants, and selecting a replacement carrier. That document is also included in the package of information we regularly furnish to carriers newly interested in the program generally.

We remain comfortable with the prospect that Mesa will be able to sustain service at its proposed subsidy rate. We disagree that the traffic projections in Mesa's proposal are unrealistic. For example, Big Sky notes that Mesa's traffic projections are 36 percent above what Big Sky achieved in calendar year 2001. However, in view of the dissatisfaction with Big Sky's reliability expressed by several of the communities, we find it entirely reasonable that a competing carrier would demonstrate confidence in its own ability to provide more reliable service by forecasting an improvement in ridership. A 36-percent traffic improvement over Big Sky's performance might seem substantial at first glance, but the markets at issue are very thin: a 36-percent increase in markets that averaged only 8.2 enplanements a day during calendar year 2001 amounts to an improvement of just 3.0 enplanements a day per community. And such an improvement must also be viewed in the context of total local demand for scheduled air service. Improving traffic at a community's local airport by 3.0 enplanements a day does not require a major shift in the proportion of local travelers using that airport versus those driving to other airports.

By:  Read Van de Water

By:  Read Van de Water

Order 04-06-12
OST-97-2935
OST-97-2401
OST-97-2402

Issued June 14, 2004 | Served June 17, 2004

Order to Show Cause - Tentatively Terminating Subsidy Eligibility and Allowing Suspension of Service

By this order, the Department is requesting interested persons to show cause why we should not terminate the essential air service subsidy eligibility of Jonesboro, Arkansas, Enid and Ponca City, Oklahoma, and Brownwood, Texas, and allow Air Midwest to suspend its subsidized services at those communities as of October 1, 2004, when the current rate term expires. Objections to the Department's tentative decision are due within 30 days of the service date of this order.

With the end of the current rate term approaching, we have conducted a review of the communities' traffic results in anticipation of requesting carrier proposals for a new rate term beginning October 1. During calendar year 2003, the most recent 12-month period for which data are available, El Dorado/Camden averaged 5.9 enplanements a day, Jonesboro 6.5, Harrison 9.4, Hot Springs 9.1, Enid 6.4, Ponca City 4.2 and Brownwood 5.8. None of the seven communities have attained the traffic levels projected by Mesa/Air Midwest in its subsidy proposal. Only Harrison and Hot Springs have even approached those projections, whereas the other five communities' traffic levels range from 21 to 70 percent below the projections. In view of the below-projected traffic results and increasing carrier costs, particularly with respect to fuel, it is very likely that the subsidy necessary to support the communities' services beyond the current rate term will be substantially higher.

By: Karan Bhatia

Order 04-07-02
OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas
OST-97-2401 - EAS at Enid and Ponca City, Oklahoma
OST-97-2402 - Essential Air Service at Brownwood, Texas

Order to Show Cause | Word

By Order 2004-6-12, June 14, 2004, the Department requested interested persons to show cause why it should not terminate the essential air service subsidy eligibility of Jonesboro, Arkansas, Enid and Ponca City, Oklahoma, and Brownwood, Texas, as of October 1, 2004, and allow Air Midwest, Inc., to suspend its subsidized services at those four communities as of the same date. The Department’s tentative decision was based on a review indicating that subsidy at the four communities exceeds the statutory ceiling of $200 per passenger; that those four communities are located within 210 miles of the nearest large or medium hub; and that, consequently, they are no longer eligible for subsidy to support their scheduled service. Objections to the Department’s tentative decision are due no later than July 19.

By: Karan Bhatia

OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas
OST-97-2401 - EAS at Enid and Ponca City, Oklahoma
OST-97-2402 - Essential Air Service at Brownwood, Texas

July 1, 2004

Re: City of Brownwood Request for a 90-Day Extension

The City of Brownwood hereby requests a 90-day extension of time within which to respond to Show Cause Order 2004-6-12 in the above referenced docket. We have found inaccuracies in the Department’s passenger count numbers for Brownwood and need additional time to validate and provide corrected information to the Department of Transportation.

Further, the two-year contract period for MESA Airlines does not expire until September 30 of this year, so it would appear we could be granted additional time. Additionally, the 30-day window to provide objections to the Order does not allow us time to adequately prepare show cause information.

By: Bert Massey II

Order 04-07-06
OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas
OST-97-2401 - EAS at Enid and Ponca City, Oklahoma
OST-97-2402 - Essential Air Service at Brownwood, Texas

Issued July 9, 2004 | Served July 14, 2004

Order Extending Time For Filing of Objections | Word

By Order 2004-6-12, June 14, 2004, the Department requested interested persons to show cause why it should not terminate the essential air service subsidy eligibility of Enid and Ponca City, Oklahoma, and Brownwood, Texas, as of October 1, 2004, and allow Air Midwest, Inc., to suspend its subsidized services at those communities as of the same date. The Department’s tentative decision was based on a review indicating that subsidy at the three communities exceeds the statutory ceiling of $200 per passenger; that those three communities are located within 210 miles of the nearest large or medium hub; and that, consequently, they are no longer eligible for subsidy to support their scheduled service. Under Order 2004-6-12, objections to the Department’s tentative decision are due no later than 30 days after the order’s service date -- i.e., by July 19.

By: Randall Bennett

July 1, 2004

Re: Request for 90-Day Extension of Time

By: Bert Massey II

OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas
OST-97-2401 - EAS at Enid and Ponca City, Oklahoma
OST-97-2402 - Essential Air Service at Brownwood, Texas

July 23, 2004

Re: Petition for Review of Order

The two-week extension granted by the Department in the Extension Order still does not provide the City adequate time to secure an alternative operating carrier prepared to submit credible service proposals tor a new rate term with subsidy requirements of less than $200.00 per passenger as required by the Show Cause Order. Since the Show Cause Order was issued, the City has been diligently working with Mesa Airlines to address the issues raised in the Show Cause Order and to ascertain their intent as to providing essential air services with subsidy requirements of less than $200.00 per passenger. As an alternative, the City has been seeking other carriers who are willing to provide air service within the $200.00 per passenger subsidy cap. The City is currently working with Mr. Richard A. Bauer, President and CEO of AirCap Partners, LLC, to secure a qualified carrier prepared to submit a proposal with subsidy requirements of less than $200.00 per passenger. As indicated by Mr. Bauer's letter to the City attached hereto as Exhibit "A," he is diligently working towards securing the alternative carriers who may be eligible for the EAS subsidy, but needs at least until August 20, 2004 to gather and provide this information to the City, and a few days to finalize all details before submitting the actual hid to the Department. The City has pressed Mr. Bauer for details as to which carriers he may be presenting to the City, but he is not at liberty to provide that information as of yet. Therefore, the City respectfully requests that the Department grant the City an additional twenty five (25) days, until August 27, 2004, to file objections to the Show Cause Order so that the City may provide the Department with alternative carriers who are willing to provide air service within the $200.00 per passenger subsidy cap.

By: Bert Massey

Order 04-07-30
OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas
OST-97-2401 - EAS at Enid and Ponca City, Oklahoma
OST-97-2402 - Essential Air Service at Brownwood, Texas

Issued July 30, 2004 | Served August 4, 2004

Order Extending Time For Filing Objections | Word

We have decided to extend the time for the filing of objections until August 13. Interested persons have already been given nearly seven weeks for preparing objections and/or proposals. That period goes well beyond the usual allowances of 20 days for objections or 30 days for carrier proposals. However, we want to ensure that the affected communities will have had every reasonable opportunity to respond to Order 2004-6-12. We will therefore give interested persons a short while longer to prepare their objections and/or to develop proposals in conjunction with bona fide operating carriers.

By: Karan Bhatia

July 1, 2004

Re: The Chamber of El Dorado/Harrison Arkansas Letter in Opposition to Reductions of EAS

The current schedule is a good fit for our business community in that it allows the traveling business person to spend the day in El Dorado or Dallas/Ft. Worth then return without an overnight stay. This is very beneficial to the traveling public as well.

By: Don Wales

July 20, 2004

Re: LaVerne Grayson Letter in Support of EAS at El Dorado, AR

Mesa Airlines currently serves our regional airport as the EAS provider. Their clean planes and steady service record, combined with a marketing push and solid support fiom our businesses, have allowed Mesa boardings to grow. The Harrison facilities have reached the estimates originally made during the EAS negotiations. Other cities in the network have not been so fortunate. Our concern is that dropping cities in Oklahoma (Enid and Ponca City) and Texas (Brownwood) will prevent an airline from providing us service in an affordable manner. We feel the entire network is being punished for the soft economy and the recession that followed 9/11.

By: LaVerne Grayson

July 23, 2004

Re: Main Street Harrison Letter in Support of EAS at El Dorado, AR

By: Ken Steffen

July 14, 2004

Re: City of Harrison Letter in Support of EAS at Harrison, AR

Mesa Airlines currently serves our regional airport as the EAS provider. Their clean planes and steady service record, combined with a marketing push and solid support from our businesses have allowed Mesa boardings to grow. The Harrison facilities have reached the estimates originally made during the EAS negotiations. Other cities in the network have not been so fortunate. Our concern is that dropping cities in Oklahoma (Enid and Ponca City) and Texas (Brownwood) will prevent an airline from providing us service in an affordable manner. We feel the entire network is being punished for the soft economy and the recession that followed 9/11. We ask that you consider finding service to the entire network in order to make each leg a viable business opportunity for an air carrier. Air service is important to our community and to our continued growth. Thank you for your support and your work on this important issue.

By: Robert Reynolds

July 14, 2004

Re: Boone County Airport Commission Letter in Support of EAS at Harrison, AR

By: Sandra Reynolds

August 5, 2004

Re: Harrison Chamber of Commerce Letter in Support of EAS at Harrison, AR

By: Scott Miller, Glen Curtis, and Layne Wheeler

OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas
OST-97-2401 - EAS at Enid and Ponca City, Oklahoma
OST-97-2402 - Essential Air Service at Brownwood, Texas

August 12, 2004

Re: Request for Extension of Time

Therefore, the City respectfully requests that the Department grant the City an additional ten (10) days, until August 23, 2004, to file objections to the Show Cause Order so that the City and all cities affected may lawfully meet to consider the revised proposal of Mesa and to complete negotiations on the proposal.

The City files this Request not for delay, but so that it may obtain additional information to provide the Department in making a decision that will be critical to the economic stability of the City. The City has been receiving an EAS subsidy for approximately 25 years and the subsidy has been critical to the growth and economic success of the City and Brown County.

By: Bert V. Massey, II

August 12, 2004

Re: The Greater Enid Chamber of Commerce Letter in Support of EAS at Enid, OK

By: Jon Blankenship

Order 04-08-15

Issued August 13, 2004 | Served August 18, 2004

Order Extending Time for Filing Objections | Word

Accordingly, We extend the due date for the filing of objections to Order 2004-6-12 until August 23,2004. These dockets will remain open until further order of the Department; and We will serve copies of this order on the mayors and airport managers of El Dorado/Camden, Jonesboro, Harrison and Hot Springs, Arkansas, Enid and Ponca City, Oklahoma, and Brownwood, Texas, and on Air Midwest, Inc.

By: Karan Bhatia

OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas
OST-97-2401 - EAS at Enid and Ponca City, Oklahoma
OST-97-2402 - Essential Air Service at Brownwood, Texas

August 23, 2004

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

Proposes to provide the revised Essential Air Service schedules at Enid, Ponca City and Brownwood. Mesa plans to operate pressurized turboprop Beech 1 900Ds with 19 seats roundtrip from Dallas Fort-Worth as Mesa Airlines (YV).

Mesa has created two options that have been sent to the Department of Transportation proposing service to Enid, Ponca City and Brownwood. Option 1 (one) combines Enid, Ponca City and Brownwood into one cost efficient group, which Mesa is prepared to serve on a breakeven basis. Option 2 (two) combines Hot Springs, Harrison, Jonesboro, and El Dorado, Arkansas with Brownwood, Texas. Both of these options are contingent upon being selected for the other Arkansas markets

By: Mesa, Linda Larsen

Order 04-09-10
OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas
OST-97-2401 - EAS at Enid and Ponca City, Oklahoma
OST-97-2402 - Essential Air Service at Brownwood, Texas

Issued September 9, 2004 | Served September 14, 2004

Order Requesting Proposals, Reducing Authorized Service Levels, and Establishing Final Subsidy Rates

By this order, the Department is (a) deferring action with respect to its tentative decision to terminate the subsidy eligibility of Enid and Ponca City, Oklahoma, and Brownwood, Texas, as of October 1,2004, (b) requesting proposals from carriers interested in providing essential air service at those three communities as well as at El Dorado/Camden, Jonesboro, Harrison and Hot Springs, Arkansas, for a new rate term, and (c) reducing the authorized service levels and establishing a final subsidy rate for the ongoing service being provided by Air Midwest, Inc., at Enid, Ponca City and Brownwood from October 1 , 2004, until further Department action.

For all seven communities, we expect proposals consisting of service with two‑pilot, twin‑engine aircraft with at least 15 passenger seats. We have already discussed at length our specific expectations regarding proposals for service at Enid, Ponca City and Brownwood. Insofar as the four Arkansas communities are concerned, we expect proposals offering 12 round trips a week from El Dorado/Camden, Jonesboro and Hot Springs, and 18 from Harrison, to Dallas/Ft. Worth.

By: Karan Bhatia

OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas
OST-97-2401 - EAS at Enid and Ponca City, Oklahoma
OST-97-2402 - Essential Air Service at Brownwood, Texas

October 14, 2004

Proposal of Corporate Airlines d/b/a American Connection

By: Corporate Airlines, Inc. d/b/a American Connection

October 14, 2004

Proposal of Great Lakes Aviation

This contains the response of Great Lakes Aviation, LTD. to Order Requesting Proposals, Reducing Authorized Service Levels, and Establishing Final Subsidy Rates 2004-9-10.

Great lakes Aviation, ltd. is pleased to submit these proposals to provide essential air transportation at these points in Arkansas, Oklahoma and Texas.

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. Great Lakes will provide service at these Arkansas, Oklahoma and Texas points as Great Lakes Airlines to DFW, and with our interline agreements with all the Major airlines, will be able to offer connecting bag service through the Dallas/Ft. Worth hub. In addition we will endeavor to extend our code-share arrangement with Frontier and United, who both service the Dallas - Denver market, to allow seamless service through Dallas and Denver to all the destinations served by our partners.

By: Dave Thomas and Charles Howell

October 14, 2004

Proposal of Mesa Airlines

In response to Order 2004-9-10, Mesa Air Group, Inc. d/b/a Air Midwest proposes to provide Essential Air Service at El Dorado/Camden, Jonesboro, Harrison, and Hot Springs, Arkansas; Enid and Ponca City, Oklahoma; and Brownwood, Texas. Mesa would plan to operate pressurized turboprop Beech l900Ds with 19 seats roundtrip from Dallas-Fort Worth as Mesa Airlines (YV).

When the Order to Show Cause was sent to Ponca City, Enid, and Brownwood in June 2004, Mesa united with the communities and political leaders to maintain Essential Air Service. Coupled with the support from the Arkansas cities, these communities were given a chance to continue with the economic development and recruitment opportunities that arise from scheduled air service. Mesa has created a partnership with the communities and intends to continue with the positive momentum.

As requested in the Order, service patterns in Enid, Ponca City and Brownwood have been adjusted to efficiently utilize costs. Since the schedule adjustments, October 1st ridership from the four Arkansas communities has held steady. Unfortunately, ridership from Enid, Ponca City and Brownwood has experienced a significant decline; therefore we have selectively adjusted our revenue assumptions accordingly.

By: Linda Larsen

October 12, 2004

Proposal of Multi-Aero, Inc. d/b/a Air Choice One, Inc. (Jonesboro, AK)

Multi-Aero, Inc. d/b/a Air Choice One, Inc. is pleased to submit this proposal to provide Essential Air Service to the community of Jonesboro, Arkansas.

Included in this proposal are several options for the community and DOT to consider. The bids Multi-Aero is submitting have varying levels of frequency and link the community in different service patterns.

By: Shane Storz

OST-97-2401 - EAS at Enid and Ponca City, Oklahoma
OST-97-2402 - Essential Air Service at Brownwood, Texas
OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas

October 26, 2004

Re: Request for Comments of Dick Stone, Mayor of the City of Ponca City

By: Dennis DeVany

October 26, 2004

Re: Request for Comments of Bert Massey II, Mayor of the City of Brownwood

By: Dennis DeVany

October 26, 2004

Re: Request for Comments of Ernie Currier, Mayor of the City of Enid

By: Dennis DeVany

October 26, 2004

Re: Request for Comments of Robert Reynolds, Mayor of Harrison

By: Dennis DeVany

October 26, 2004

Re: Request for Comments of Mike Bush, Mayor of the City of Hot Springs

By: Dennis DeVany

OST-97-2401 - EAS at Enid and Ponca City, Oklahoma
OST-97-2402 - Essential Air Service at Brownwood, Texas
OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas

October 26, 2004

Re: Request for Comments of Hubert Brodell, Mayor of the City of Jonesboro

By: Dennis DeVany

October 26, 2004

Re: Request for Comments of Chris Claybaker, Mayor of the City of Camden

By: Dennis DeVany

October 26, 2004

Re: Request for Comments of Bobby Beard, Mayor of the City of El Dorado

By: Dennis DeVany

October 26, 2004

Re: Request for Comments of Gary Ness, North Dakota Aeronautics Commission

By: Dennis DeVany

OST-97-2401 - EAS at Enid and Ponca City, Oklahoma
OST-97-2402 - Essential Air Service at Brownwood, Texas
OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas

November 1, 2004

Re: Follow up Letter to Request for Comments from Bobby Beard, Mayor of the City of El Dorado

As a result of our second review, several other options have come into play. In addition, recent traffic declines at Brownwood would eliminate Corporate's Option 1 because Corporate's proposed subsidy per passenger for Brownwood, based on updated traffic figures, now exceeds the $200 ceiling. However, Corporate's Option 1 fully complies with the $200 ceiling based on the calendar year 2003 traffic data that the Department published in Order 2004‑9‑10, and it is entirely reasonable that the carrier relied on those data. Moreover, considering the borderline nature of Brownwood's status, we have decided to take the broader view and keep Brownwood in play. Please note, however, that Corporate's Option 1 is the only selectable option that includes Brownwood.

By: Dennis DeVany

November 1, 2004

Re: Follow up Letter to Request for Comments from Chris Claybaker, Mayor of the City of Camden

By: Dennis DeVany

November 1, 2004

Re: Follow up Letter to Request for Comments from Hubert Brodell, Mayor of the City of Jonesboro

By: Dennis DeVany

OST-97-2401 - EAS at Enid and Ponca City, Oklahoma
OST-97-2402 - Essential Air Service at Brownwood, Texas
OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas

November 1, 2004

Re: Follow up Letter to Request for Comments from Robert Reynolds, Mayor of the City of Harrison

As a result of our second review, several other options have come into play. In addition, recent traffic declines at Brownwood would eliminate Corporate's Option 1 because Corporate's proposed subsidy per passenger for Brownwood, based on updated traffic figures, now exceeds the $200 ceiling. However, Corporate's Option 1 fully complies with the $200 ceiling based on the calendar year 2003 traffic data that the Department published in Order 2004‑9‑10, and it is entirely reasonable that the carrier relied on those data. Moreover, considering the borderline nature of Brownwood's status, we have decided to take the broader view and keep Brownwood in play. Please note, however, that Corporate's Option 1 is the only selectable option that includes Brownwood.

By: Dennis DeVany

November 1, 2004

Re: Follow up Letter to Request for Comments from Mike Bush, Mayor of the City of Hot Springs

By: Dennis DeVany

November 1, 2004

Re: Follow up Letter to Request for Comments from Ernie Currier, Mayor of the City of Enid

By: Dennis DeVany

November 1, 2004

Re: Follow up Letter to Request for Comments from Dick Stone, Mayor of the City of Ponca

By: Dennis DeVany

November 1, 2004

Re: Follow up Letter to Request for Comments from Bert Massey II, Mayor of the City of Brownwood

By: Dennis DeVany

November 17, 2004

Re: The City of El Dorado Letter in Support of Mesa Airlines

By: Bobby Beard

November 17, 2004

Re: The City of Harrison Letter in Support of Mesa Airlines

By: Bob Reynolds

October 29, 2004

Re: The City of Hot Springs Letter in Support of Mesa Airlines

By: Mike Bush

November 19, 2004

Re: The City of Hot Springs Letter in Support of Mesa Airlines

By: Mike Bush

November 15, 2004

Re: The City of Jonesboro Letter in Support of Mesa Airlines

By: Hubert Brodell

Order 2005-1-14
OST-1997-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, Arkansas
OST-1997-2401 - EAS at Enid and Ponca City, Oklahoma
OST-1997-2402 - Essential Air Service at Brownwood, Texas

Issued January 19, 2005 | Served January 25, 2005

Order Selecting Carriers, Establishing Subsidy Rates, Terminating Subsidy Eligibility, and Allowing the Suspension of Service

By this order, the Department is (a) selecting Air Midwest, Inc., to provide essential air service at El Dorado/Camden, Jonesboro, Harrison and Hot Springs, Arkansas, at a subsidy rate of $4,155,550 annually for a two-year rate term, (b) selecting Great Lakes Aviation, Ltd., to provide essential air service at Enid and Ponca City, Oklahoma, at a subsidy rate of $1,272,557 annually for a two-year rate term, and (c) terminating the subsidy eligibility of Brownwood, Texas, and allowing Air Midwest to discontinue its service there, if it chooses to do so.

By: Karan Bhatia

March 17, 2005

Re: Subsidy Calculation

By: Mesa Air Group

Order 2005-03-33
OST-97-2935 - Essential Air Service at Harrison, Hot Springs, El Dorado/Camden, Jonesboro, AK

Issued March 24, 2005 | Served March 29, 2005

Order Establishing Final Subsidy Rate

By: Karan Bhatia

July 22, 2005

Request of Air Midwest to Alter the Essential Air Service Pattern

Intent to alter the subsidized pattern of service for Harrison and Hot Springs set forth in Order 2005-03-33 between Harrison and Hot Springs, Arkansas and Dallas/Ft. Worth International Airport. In that order, the DOT selected Air Midwest to operate two one-stop and one nonstop roundtrip each service day between Harrison and Dallas. While passenger ridership has been strong, Mesa and Harrison feel that changing the one nonstop flight from Dallas to Kansas City International Airport would greatly benefit the community.

The absence of a true low-fare carrier, such as Southwest Airlines, at Dallas/Ft Worth has continued to lead to a leakage in passengers that Mesa feels would be reduced greatly by altering the route and providing nonstop service to Kansas City. AirTran, Frontier and Southwest Airlines have a significant presence at Kansas City, and would enable the passengers from Harrison and Hot Springs access to their low-fare system. This change would also allow Hot Springs to regain a third trip, a one-stop over Harrison, at no additional cost to the DOT. This third trip for Hot Springs was removed in Order 2005-03-33.

By: Mesa Air, Mickey Bowman, 602-685-4130

July 26, 2005

Harrison Airport Board Support of Alteration of the EAS Pattern of Service by Air Midwest

At the Boone County Airport Administrative Board Meeting on Tuesday, July 19, 2005, the Boone County Airport Board voted to support Air Midwest, d/b/a Mesa Airlines, and their request to change their pattern of service for our Essential Air Service. Currently Mesa is serving our airport with two one-stop flights and one nonstop flight to Dallas/Ft Worth International Airport each service day.

By: Judy McCutcheon

Order 2005-7-27
OST-1997-2935

Issued July 28, 2005 | Served August 2, 2005

Order Approving Alternate Service Pattern

We will approve Air Midwest's request, which meets the three conditions necessary for approval under authority assigned under 14 CFR 395.12(k)(3) of the Department's Regulations: (1) the alternate service pattern is equal to or greater than that determined to be essential; (2) the community does not object to the alternate service pattern and (3) the alternate service pattern will not increase Air Midwest's Subsidy. In approving the alternate service pattern for Harrison, we will allow Air Midwest to serve Hot Springs as an upline point at its own discretion. Of course, Air Midwest will also retain the discretion to revert to the service pattern originally authorized by Order 2005-1-14, if it chooses to do so.

By: Randall Bennett

Order 2006-10-9
OST-1997-2935

Issued October 18, 2006 | Served October 23, 2006

Order Requesting Proposals

By this order, the Department is requesting proposals from carriers interested in providing essential air service at the four Arkansas communities listed above for the two-year period beginning April 1, 2007.

With respect to the four Arkansas communities specifically, we expect proposals consisting of service, at a minimum, with two-pilot, twin-engine aircraft offering at least 15 passenger seats. The communities essential air service determinations, as last established by Orders 1992-11-54, November 27, 1992, and 1993-10-27, October 15, 1993, required a minimum of two nonstop or one-stop round trips each weekday and weekend to Dallas/Ft. Worth providing at least 17 inbound and outbound seats for El Dorado/Camden, 18 for Harrison, and 22 for Hot Springs.

Consequently, we request proposals contemplating 18 round trips a week for Harrison and 12 round trips a week for the other three communities, consistent with the services we currently subsidize, to Dallas/Ft. Worth or any other suitable hub. Carriers are welcome to propose more than one service option if they envision other, potentially more attractive service possibilities with subsidy requirements that remain competitive.

By: Todd Homan

November 22, 2006

Proposal of Air Midwest

Air Midwest submits four proposals to provide EAS at El Dorado, Hot Springs, Harrison and Jonesboro, Arkansas. Mesa's proposed options would continue service to Dallas/Ft. Worth and/or Kansas City. Mesa proposes to operate all flights as Mesa Airlines. We will continue to pursue placement of this service under one of our codeshare agreements in the future.

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

Option #	Hub(s)	Service	Annual Subsidy
1	DFW MCI	2 RT - JBR & ELD to DFW 2 RT - HOT & HRO to DFW & 1 RT MCI	$4,296,348
2	DFW	2 RT - JBR & ELD to DFW 2 RT - HOT to DFW 3 RT - HRO to DFW	$4,561,409
3	DFW MCI	2 RT - HOT & HRO to DFW & 1 RT MCI	$2,078,727
4	DFW	2 RT - JBR & ELD to DFW	$2,256,007

By: Jeffrey Hartz

November 24, 2006

Request for Comments of:

Mayor of the City of Camden

Mayor of the City of El Dorado

Mayor of the City of Harrison

Mayor of the City of Hot Springs

Mayor of the City of Jonesboro

December 7, 2006

Comments of the City of Hot Springs in Support of Mesa Air's Option 1

In the past ten years, we have had numerous changes in air carriers. These changes have led to distrust on the part of potential air travelers resulting in a negative effect on ridership in our community. We believe that continuation of air service provided by Mesa Air Group would be best for our community and will build on the foundation established over the last four years.

The City of Hot Springs supports Mesa Air Group's Option #1 as our highest priority.

By: Mayor Mike Bush

December 15, 2006

Comments of the City of Harrison

The City of Harrison supports Mesa Air Group's Option 1 as our preference.

By: Mayor, Bob Reynolds, 870-741-2777

December 15, 2006

Comments of the City of Jonesboro

The citizens of Jonesboro are fortunate to be recipients of the quality service provided by Mesa Airlines/Air Midwest. We truly desire to continue the exceptional air service we have received in our area.

By: Mayor, Hubert Brodell

December 18, 2006

Comments of the City of El Dorado

After reviewing the proposals from Mesa Air Group, the City of El Dorado feels they are the City's first choice.

By: Mayor, Bobby Beard

Order 2007-1-7
OST-1997-2935

Issued January 9, 2007 | Served January 12, 2007

Order Selecting Carrier and Establishing Subsidy Rate - Bookmarked

We select Air Midwest, Inc., to provide essential air service at El Dorado/Camden, Jonesboro, Harrison and Hot Springs, Arkansas at a subsidy rate of $4,296,348 annually for the two-year rate term beginning April 1, 2007 through March 31, 2009.

We set the final rate of compensation for Air Midwest, Inc., for the provision of essential air service at El Dorado/Camden, Jonesboro, Harrison and Hot Springs, Arkansas, as described in Appendix B, from April 1, 2007, through March 31, 2009, payable as follows: for each month during which essential air service is provided, the amount of compensation shall be subject to the weekly ceiling set forth in Appendix B, and shall be determined by multiplying the subsidy-eligible arrivals and departures completed during the month by $782.43.

By: Andrew Steinberg

January 22, 2008

Notice of Air Midwest to Terminate Scheduled Service

By Order 2007-1-7, January 9, 2007 Air Midwest was awarded a 24 month service agreement at an annual subsidy rate of $4,296,348 for a two year term commencing April 1, 2007 12 roundtrips per week on a routing Jonesboro-El Dorado-Dallas, 12 roundtrips per week in a routing Harrison-Hot Springs-Dallas and 6 roundtrips each week Harrison-Kansas City utilizing Beech 1900D aircraft.

At present, Air Midwest is the sole provider of certificated scheduled air service at El Dorado, Jonesboro, Harrison and Hot Springs, Arkansas. Air Midwest is hereby providing public notice of its intent to terminate scheduled air service with the expiration of the 90-day notice as required.

By: Tom Bacon, Mesa Air, 602-685-3565

OST-1997-2935 - El Dorado/Camden, Harrison, Hot Springs and Jonesboro

January 23, 2008

Re: City of Harrison in Opposition to Termination of Service

This letter is to strongly object to Air Midwest Inc.'s intent to discontinue essential air service to Harrison, Arkansas, along with other cities in Arkansas. This will put an economic hardship on the cities involved. With only 90 days notice, the cities involved cannot find a replacement airline to replace this essential service.

Air Midwest was awarded a subsidized contract to serve these communities in 2007. This contract was for 24 months and Air Midwest should be required to fulfill their part of this contract. This would at least allow some time for the Boone County Airport to search for another carrier.

By: Mayor, Pat Moles

Order 2008-2-2
OST-2002-13983 - Grand Island
OST-1997-3005 - McCook
OST-1997-2935 - El Dorado/Camden, Harrison, Hot Springs and Jonesboro
OST-2006-23931 - Columbia/Jefferson City
OST-2006-23932 - Joplin
OST-1997-2515 - Kirksville

Issued February 1, 2008 | Served February 6, 2008

Order Prohibiting Termination of Service and Requesting Proposals | Word

By this order, the Department is (a) prohibiting Air Midwest from terminating its subsidized service at the nine, above-captioned communities 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 at any or all of the communities, with or without subsidy, by February 29.

On January 22, 2008, Air Midwest filed 90-day notices with the Department of its intent to terminate its subsidized service at all nine of the above-captioned communities, plus Manhattan and Salina, Kansas,2 effective April 21, 2008. Air Midwest’s parent company, Mesa Air Group, Inc. in its 4Q2007 Revenue and Earnings statement, said that it has incurred “significant losses (at Air Midwest),” and “with little prospect of future profitability we have reluctantly begun to liquidate those assets and operations.”

With respect to each community, we expect proposals consisting of service with 15-seat or larger aircraft to a suitable hub airport, with airline connections to the national air transportation system. Service levels should be comparable to those in the table on page 2 and in Appendix D. Grand Island has specifically requested that we solicit standalone service (not connected with another city) to Kansas City (18 weekly round trips) or a combination of Kansas City (12 weekly round trips) and Denver (6 weekly round trips) service. Communities and air carriers are encouraged to work together in advance of the due date for proposals to craft a service pattern that is desirable to the community and meets the operational needs of the airline interested in submitting a proposal. In addition, carriers should be very clear as to whether a specific community’s proposal is on a stand-alone basis, or whether it is part of a larger, inseparable package with other communities.

By: Michael Reynolds

OST-2002-13983 - Grand Island, NE
OST-1997-3005 - McCook, NE
OST-1997-2935 - El Dorado/Camden, Harrison, Hot Springs and Jonesboro, AR
OST-2006-23931 - Columbia/Jefferson City, MO
OST-2006-23932 - Joplin, MO
OST-1997-2515 - Kirksville, MO

February 27, 2008

Re: Extension of Proposal Dates

By Order 2008-2-2, February 1, 2008, the Department requested proposals from air carriers interested in providing essential air service at any or all of the above communities for a two-year period beginning when the selected carrier or carriers is ready to inaugurate service. In an email dated February 26, the Chief Operating Office of Hawaii Island Air requested a three-week extension of the due date for filing carrier proposals for all of the communities, from February 29 to March 21. He stated in his email that he needed the additional time to better assess the markets and determine the feasibility of filing a proposal. In response, also by email dated February 26, we requested input from each of the affected communities regarding the carrier's request. Most of the communities support the request, and none objected. Therefore, we will grant the request and extend the due date for carrier proposals from February 29 to March 21.

By: Dennis DeVany

OST-2002-13983 - Grand Island
OST-1997-3005 - McCook
OST-1997-2935 - El Dorado/Camden, Harrison, Hot Springs and Jonesboro
OST-2006-23931 - Columbia/Jefferson City
OST-2006-23932 - Joplin
OST-1997-2515 - Kirksville

February 26, 2008

Email Message - Hawaii Island Air Request for Three-Week Extension

Hawaii Island Air is requesting a 3 week extension to better assess market and cost analysis to determine feasibility of our pending EAS application. Our intent is to bring in Dash 8 -100's to service these communities and if awarded we would like to target initial service within a 3-6 month period. I am confident that we will be able to provide an upgraded service to what is presently available to these and other out-lying communities.

By: Hawaii Island Air, Les Murashige, lmurashige@islandair.com

March 18, 2008

Service Proposals of Air Choice One

Please find our proposals to provide Essential Air Service to the communities of El Dorado, AR; Harrison, AR; Hot Springs, AR; Jonesboro, AR; Kirksville, MO. We will utilize 9-seat, twin engine turbine powered, Raytheon/Beechcraft King Air configured for 9 passenger seats. For option 12 on Kirksville we would be using a twin engine piston aircraft with six passenger seats. The aircraft will be operating with two crew members 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

March 21, 2008

Proposals of Great Lakes Aviation

Great Lakes Aviation, Ltd. is pleased to submit these proposals to provide essential air transportation at these points in Arkansas, Missouri and Nebraska. Each proposal should be considered a stand alone proposal.

We were not able to provide a proposal for Kirksville, MO that would comply with current legislation which limits subsidy, per passenger, at a $200 maximum. El Dorado and Hot Springs, AR are not commercially feasible for Great Lakes to serve to hubs within our current system and we feel would be better served by a carrier with an established hub in Dallas, TX.

Great Lakes will provide service at these Essential Air Service points in a similar fashion as is offered at our Denver hub and utilize our codeshare and interline agreements, which will enable connecting bag service through our Kansas City and St. Louis hubs. All proposals contemplate the use of 19 seat Beechcraft 1900D airliner equipment.

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

OST-2002-13983 - Grand Island, NE
OST-1997-3005 - McCook, NE
OST-1997-2935 - El Dorado/Camden, Harrison, Hot Springs and Jonesboro, AR
OST-2006-23931 - Columbia/Jefferson City, MO
OST-2006-23932 - Joplin, MO
OST-1997-2515 - Kirksville, MO

March 21, 2008

Proposals of Hawaii Island Air

Hawaii Island Air dba Island Air respectively submits 13 proposal options for Essential Air Service at these 7 markets. These options would provide passenger service to Kansas City International Airport operating as Island Air.

Island Air currently operates 37-seat DeHavilland Dash-8-100 series aircraft in our inter-island service, and plan on utilizing the same aircraft for this service. Island Air's primary goal, besides operating within our current communities, will be to commence service to these communities in a timely manner and feel comfortable with being able to commence service within 90 to 120 days of selection.

Island Air currently operates with code shares for United Airiines & Continental Airlines and plan on having those same code shares to these markets in Kansas City. We also plan on pursuing other code share relationships in Kansas City that would be beneficial to our customers.

We would like to also reserve the right to substitute a similar 30+ seat cabin-class aircraft in place of the Dash-8 in the future, allowing us to keep our options open to growing into other aircraft.

By: Hawaii Island Air, Les Murashige, 808-840-2310, lmurashige@islandair.com

OST-2002-13983 - Grand Island, NE
OST-1997-3005 - McCook, NE
OST-1997-2935 - El Dorado/Camden, Harrison, Hot Springs and Jonesboro, AR
OST-2006-23931 - Columbia/Jefferson City, MO
OST-2006-23932 - Joplin, MO
OST-1997-2515 - Kirksville, MO

April 1, 2008

DOT Memorandum Extending Comment Period

By Order 2008-2-2, February 1, 2008, the Department prohibited Air Midwest, Inc. from terminating service at the above communities and solicited requests for proposals for essential air service. Proposals were due February 29, 2008. On February 26, Hawaii Island Air requested a 3 week extension, so that it could better assess the market and its pending EAS application. On March 25, we sent an e-mail to all of the above communities that included all proposals received for service and requested comments by April 18, 2008.

In an e-mail received April 1, the City of Columbia, Missouri, notified us of its intention to "hold a public hearing regarding the EAS proposals so that the City Coimcil will have the opportimity to hear public comments prior to making the City's determination." The city would like to set a pubhc hearing for the April 21 council meeting.

In order to give the City of Columbia enough time to summarize its response to the hearing, we will extend the deadline for community comments at all of the communities until April 23, 2008.

By: Dennis DeVany

OST-2002-13983 - Grand Island, NE
OST-1997-3005 - McCook, NE
OST-1997-2935 - El Dorado/Camden, Harrison, Hot Springs and Jonesboro, AR
OST-2006-23931 - Columbia/Jefferson City, MO
OST-2006-23932 - Joplin, MO
OST-1997-2515 - Kirksville, MO

April 8, 2008

Withdrawal of Service Options of Island Air

Please accept this as Island Air's formal withdrawal of options 3,4,6,&13 that have McCook included.

We still look forward to the opportunity to serve the other airports in this RFP and appreciate the DOT's help with this matter.

By: Island Air, Jeffrey Hartz, imapilot@gmail.com

April 15, 2008

Re: El Dorado Airport Commission and El Dorado City Council in Opposition to Air Choice One

The El Dorado Airport Commission and the Ei Dorado City Council have unanimously voted to reject the air service provider bid submitted by Multi-Aero for El Dorado-Camden (Goodwin Field) to replace Air Midwest. We do not believe a 9 passenger service would meet our needs nor do we believe the St. Louis hub would improve our boardings.

El Dorado requests the Department of Transportation - Essential Air Service Division issue a new RFP for service from El Dorado to either Houston or Dallas. Texas. Following a community survey, the El Dorado Airport Commission has determined that Houston would be the first choice and Dallas our second choice.

By: Mayor Mike Dumas, 870-862-7911

April 18, 2008

Re: Jonesboro Regional Chamber of Commerce in Support of Great Lakes Aviation | Word

After much discussion, the Aviation Committee of the Chamber of Commerce is endorsing the proposal from Great Lakes to serve the city of Jonesboro. We believe that they will be the best choice for us. Members of city government and the Jonesboro Municipal Airport Commission were present at the discussion.

By: Dave Davidson

April 21, 2008

Re: City of Harrison in Support of Island Air

The City of Harrison, Arkansas, and the Boone County Airport Administrative Board have reviewed the new options available to us under the Essential Air Services program. We support Island Air as our first option and Great Lakes as our second option.

By: Mayor, Pat Moles, 870-741-2777

April 23, 2008

Re: City of Hot Springs in Support of Island Air Option 9

The City of Hot Springs, Arkansas has reviewed the options available to us under the Essential Air Services program. We support Island Air's Proposal Option #9.

Our biggest concern with the current choices is the size of the aircraft being offered by Multi-Aero. We certainly oppose any option that would require us to utilize the smaller aircraft. Through experience, the smaller aircraft would have a very negative affect on the local flying public. Island Air provides us the best opportunity to promote Kansas City as a destination and low fare hub for connections. The 37 passenger Dash-8 will be a tremendous asset as we continue to strive for increased enplanements. We feel that Island Air has expressed a sincere and committed desire to start service in the mainland of the u.s. and with fewer cities being served, we feel they will be able to focus on providing the best service and reliability to Hot Springs.

Multi-Aero cannot provide us with the service being proposed by Island Air and the smaller aircraft is not a practical solution for our community and its continued growth.

By: Mayor, Mike Bush, 501-617-0085

Order 2008-5-2
OST-2002-13983 - Grand Island, NE
OST-1997-3005 - McCook, NE
OST-1997-2935 - El Dorado/Camden, Harrison, Hot Springs and Jonesboro, AR
OST-2006-23931 - Columbia/Jefferson City, MO
OST-2006-23932 - Joplin, MO
OST-1997-2515 - Kirksville, MO

Issued and Served May 5, 2008

Order Selecting Carriers, Setting Final Subsidy Rates and Requesting Proposals - Bookmarked | Word

We request that carriers interested in providing essential air service at El Dorado/Camden, Arkansas, submit their proposals, with or without subsidy requests, no later than June 13, 2008.

The Department selects Hawaii Island Air d/b/a Island Air to provide essential air service at Grand Island, Nebraska, Harrison and Hot Springs, Arkansas, and Joplin, Missouri, as described in Appendix C, pages 1-4, beginning when the carrier inaugurates full service at all four communities through the 24th month thereafter.

The Department selects Great Lakes Aviation, Ltd. to provide essential air service at McCook, Nebraska, and Jonesboro, Arkansas, as described in Appendix C, pages 5 and 6, beginning when the carrier inaugurates full service at both communities through the 24th month thereafter.

The Department selects Mesaba Aviation, Inc. d/b/a Northwest Airlink to provide essential air service at Columbia/Jefferson City, Missouri, as described in Appendix C, page 7, beginning when the carrier inaugurates service through the 24th month thereafter.

The Department selects Multi-Aero, Inc. d/b/a Air Choice One to provide essential air service at Kirksville, Missouri, as described in Appendix C, page 8, beginning when the carrier inaugurates service through the 24th month thereafter.

The Department sets the final rate of compensation for Hawaii Island Air d/b/a Island Air for the provision of essential air service at Grand Island, Nebraska, Harrison and Hot Springs, Arkansas, and Joplin, Missouri, as described in Appendix B, page 1, payable as follows: for each calendar month during which essential air service is provided, the amount of compensation shall be subject to the weekly ceilings set forth in Appendix C, pages 1-4, and shall be determined by multiplying the subsidy-eligible flights completed during the month by $1,233.08 (Grand Island); $1,949.02 (Harrison); $1,140.67 (Hot Springs); and $703.09 (Joplin).

The Department sets the final rate of compensation for Great Lakes Aviation, Ltd. for the provision of essential air service at McCook, Nebraska, and Jonesboro, Arkansas, as described in Appendix B, page 2 and 3, payable as follows: for each calendar month during which essential air service is provided, the amount of compensation shall be subject to the weekly ceilings set forth in Appendix C, pages 5 and 6, and shall be determined by multiplying the subsidy-eligible flights completed during the month by $1,290.36 (McCook); and $1,310.01 (Jonesboro).

The Department sets the final rate of compensation for Mesaba Aviation, Inc. d/b/a Northwest Airlink for the provision of essential air service at Columbia/Jefferson City, Missouri, as described in Appendix B, page 4, payable as follows: for each calendar month during which essential air service is provided, the amount of compensation shall be subject to the weekly ceilings set forth in Appendix C, page 6, and shall be determined by multiplying the subsidy-eligible flights completed during the month by $1,083.54.

The Department sets the final rate of compensation for Multi-Aero, Inc. d/b/a Air Choice One for the provision of essential air service at Kirksville, Missouri, as described in Appendix B, page 5, payable as follows: for each calendar month during which essential air service is provided, the amount of compensation shall be subject to the weekly ceilings set forth in Appendix C, page 8, and shall be determined by multiplying the subsidy-eligible flights completed during the month by $717.23.

By: Michael Reynolds

May 14, 2008

Re: Service Termination of Air Midwest

Air Midwest reluctantly advises the Department that it has decided to discontinue all air carrier operations, liquidate its assets and surrender its FAA and DOT certificates. The service terminations will occur on the following schedule:

• May 23 - Athens, Dubois, Franklin/Oil City, Greenbrier/White Sulphur Springs/Lewisburg
• May 31 - Ely, Visalia, Merced, Kingman, Prescott
• June 30 - Columbia, EI Dorado, Harrison, Hot Springs, Jonesboro, Grand Island, Kirksville, Joplin, and McCook

Air Midwest has no choice but to shutdown operations. Air Midwest has determined that it does not have the financial resources to continue air carrier operations. Air Midwest is in severe financial distress due to the fact that it has incurred significant and unrelenting losses over many years and has no prospect of future profitability, particular in light of current conditions, including record high fuel prices.

This decision should come as no surprise to the Department as Air Midwest previously advised the Department of its intention to withdraw its services beginning over a year ago with its first traunch of termination notices. In addition, representatives of Air Midwest met with Dennis DeVany on March 6, 2008 to advise that Air Midwest would shortly go out of business.

While the Department solicited proposals for subsidized replacement service at these points, to date replacement services have commenced at only six points-Cedar City, Moab, Vernal, Manhattan, Salina and Alamogordo. Over nine months ago the Department selected Great Lakes Aviation to provide subsidized essential air service at Merced, Visalia, and Ely, but inexplicably Great Lakes has not yet commenced its proposed service at those points.

Air Midwest's situation is similar to the situations involving Big Sky Airlines and Skyway Airlines, both of which terminated all of their air services earlier this year. On December 20, 2007, Big Sky announced its intent to terminate all service on January 7, 2008. Although the Department issued a hold-in Order and sought replacement carriers on an emergency basis, it recognized that Big Sky would not provide service during the hold-in period. See DOT Order 2007-12-20. Similarly, Skyway Airlines terminated all air service on April 5, 2008, after a long hold-in period and prior to the commencement of service by replacement carriers. As with Big Sky and Skyway, Air Midwest does not have the financial wherewithal to continue its air carrier operations.

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

Mesa Air to shut Air Midwest, cut small city stops

Order 2008-5-20
OST-2002-13983 - Grand Island, NE
OST-1997-3005 - McCook, NE
OST-1997-2935 - El Dorado/Camden, Harrison, Hot Springs and Jonesboro, AR
OST-2006-23931 - Columbia/Jefferson City, MO
OST-2006-23932 - Joplin, MO
OST-1997-2515 - Kirksville, MO

Issued May 16, 2008 | Served May 21, 2008

Order Extending Service Obligation | Word

By this order, the Department of Transportation extends the essential air service obligation of Air Midwest, Inc., at the above-captioned communities, for an additional 30 days, through June 20, 2008.

On May 14, 2008, Mesa Air Group, the holding company that owns Air Midwest, gave notice to the Department of its intention to liquidate the airline and shut it down completely on June 30. Mesa’s notice in no way absolves Air Midwest from its statutory requirement to continue providing service at these communities.

By: Todd Homan

Order 2008-6-9
OST-2002-13983 - Grand Island, NE
OST-1997-2935 - El Dorado/Camden, Harrison and Hot Springs, AR
OST-2006-23932 - Joplin, MO

Issued and Served June 9, 2008

Order Requesting Proposals | Word

By this order, the Department is requesting long-term proposals from carriers interested in providing essential air service at Harrison, Hot Springs, Joplin and Grand Island with or without subsidy, by June 20. We are also extending the deadline for EAS proposals for El Dorado/Camden set by Order 2008-5-2 from, June 13 to June 20.

Because Island Air’s notice and withdrawal will leave the four communities where it was selected without air service after June 30, we will re-solicit proposals. We will do so on an expedited basis, and set the deadline for submitting proposals as June 20, instead of the usual 30 days. In addition, we will extend the deadline for EAS proposals for El Dorado/Camden from June 13 to June 20 because these communities have traditionally been served together, and there may be some economies of scale to be achieved.

With respect to each community, we expect proposals consisting of service levels comparable to those in the table on page two of this order. Grand Island has specifically requested that we solicit stand-alone service (not connected with another city) to Kansas City (18 weekly round trips) or a combination of Kansas City (12 weekly round trips) and Denver (6 weekly round trips) service.

By: Todd Homan

Order 2008-6-19
OST-2002-13983 - Grand Island, NE
OST-1997-3005 - McCook, NE
OST-1997-2935 - El Dorado/Camden, Harrison, Hot Springs and Jonesboro, AR
OST-2006-23931 - Columbia/Jefferson City, MO
OST-2006-23932 - Joplin, MO
OST-1997-2515 - Kirksville, MO

Issued June 16, 2008 | Served June 19, 2008

Order Extending Service Obligation

On January 22, 2008, Air Midwest filed a 90-day notice of its intent to suspend its subsidized service at the communities captioned above, effective April 21. By Order 2008-2-2, February 1, 2008, the Department prohibited the carrier from suspending service through May 21 at the communities, 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 Air Midwest’s service obligation for additional 30-day periods, the latest through May 21, 2008, by Order 2008-5-20.

By this order, the Department of Transportation extends the essential air service obligation of Air Midwest, Inc., at the above-captioned communities, for an additional 30 days, through July 21, 2008.

By: Todd Homan

OST-2002-13983 - Grand Island, NE
OST-1997-2935 - El Dorado/Camden, Harrison, Hot Springs and Jonesboro, AR
OST-2006-23932 - Joplin, MO

June 20, 2008

Re: Proposals of Great Lakes Aviation

Proposal #	Service Point	Hub(s) Served	Round Trips	Equipment	Subsidy Requirement	Passengers Forecast	Average Fare
1	Harrison, AR	Kansas City and/or Dallas	3	1900D	$1,587,067	9850	$107.72
2	El Dorado/Camden, AR	Dallas	2	1900D	$2,311,637	4000	$99.72
3	Hot Springs, AR	Dallas	2	1900D	$1,991,307	7500	$99.72
4	Joplin, MO	Kansas City	3	1900D	$997,660	27,750	$79.27
5	Grand Island, NE	Kansas City	3	1900D	$2,271,640	15,000	$99.17

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

OST-1997-2935 - El Dorado/Camden, Harrison, Hot Springs and Jonesboro, AR

June 19, 2008

Service Proposals of Multi-Aero d/b/a Air Choice One

Option #	Hub(s)	Route Service	Frequency	Annual Subsidy	Equipment
1