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OST-1998-3344

http://www.portofmoseslake.com/gcia.htm - Grant County International Airport

Essential Air Service at Ephrata/Moses Lake, Washington

Order 98-1-15 | OST-98-3344 (41541) | Issued January 20, 1998 | Served January 26, 1998

Order Tentatively Selecting Carrier and Setting Subsidy Rate

By this order, the Department is tentatively selecting Horizon Air Industries, Inc. (Horizon), to provide essential air service at Ephrata/Moses Lake, Washington, for a two-year period, at an annual subsidy of $219,483

• Appendix A:  Historical Enplanements
• Appendix B:  Essential Air Serive to be Provided by Horizon
• Appendix C:  Subsidy Calculation
• Appendix D:  Service List

By:  Charles Hunnicutt

Essential Air Service at Ephrata/Moses Lake, Washington

By:  Horizon, Patrick Zachwieja 

Essential Air Service at Ephrata/Moses Lake, Washington

By:  Bradley Mims

Essential Air Service at Ephrata/Moses Lake, Washington

By:  Susan McDermott

Essential Air Service at Ephrata/Moses Lake, Washington

By:  Susan McDermott

Essential Air Service at Ephrata/Moses Lake, Washington and Big Sky Aviation

After reviewing Big Sky's proposal, the carrier and staff have agreed on new final rates for the carrier to continue to provide Ephrata/Moses Lake with three nonstop round trips a day to Seattle with 19-seat Metro aircraft. As appears to be common in the industry, Big Sky suffered its worst losses shortly after the September 11 attacks, and we would expect traffic and revenues to be rebounding. Thus, we have agreed to a two-tiered rate for Big Sky: the first from October 1, 2001, through November 30, 2002, at an annual rate of $1,132,911, and an annual rate of $895,986 from December 1, 2002, through July 31, 2003. The vast majority of the dramatic increase in subsidy is driven by the reduction in passenger revenue with some offsetting reductions in passenger-related expenses. Increased liability and hull insurance costs represent a considerable increase in expenses.

By:  Read Van de Water

Essential Air Service at Ephrata/Moses Lake, Washington

Issued and Served August 5, 2003

Order 03-8-6
OST-98-3344 - EAS at Ephrata/Moses Lake, WA

Order Setting Final Rate

Order 2003-8-6, the Department sets the final subsidy rate for Big Sky Airlines, Inc., for the provision of essential air service at Ephrata/Moses Lake, Washington, to be payable as follows: for each calendar month during which essential air service is provided, the amount of compensation shall be subject to the weekly ceiling and shall be determined by multiplying the subsidy-eligible flights completed during the month to Seattle by $740.39.

By: Michael Reynolds

Essential Air Service at Ephrata/Moses Lake, Washington

Order 04-09-03
OST-98-3344 - EAS at Ephrata/Moses Lake, WA

Issued September 1, 2004 | Served September 7, 2004

Order Requesting Proposals | Word

By this order, the Department is requesting proposals from carriers interested in providing essential air service at Ephrata/Moses Lake, Washington, for a two-year period, with or without subsidy. By Order 2003-8-6, issued August 5, 2003, the Department set a final annual subsidy rate of $1,344,577 for Big Sky's service at Ephrata/Moses Lake, effective August 1, 2003, until further Department action. That order also stated that the Department would issue an order requesting proposals from all carriers interested in providing EAS at the community.

During the year ended March 31, 2004, the most recent 12‑month period for which traffic data are available, the community averaged 13.1 enplanements a day. During 2000, the last calendar year not affected by the terrorist attacks, Ephrata/Moses Lake averaged 31.3 enplanements per day.

By: Karan Bhatia

OST-98-3344 - EAS at Ephrata/Moses Lake, WA

October 6, 2004

Re: Proposal of Big Sky Airlines

Big Sky Transportation Co. is pleased to provide proposals to continue providing Essential Air Service to Ephrata/Moses Lake, Washington. It is our belief that the proposal being made herein is unique and offers the Ephrata/Moses Lake communities an opportunity for improved service. Big Sky is proposing two options. The first option includes service to both Portland, Oregon and Boise, Idaho. The service pattern of 18 weekly flights includes two weekday and two weekend flights to Portland and one weekday and one weekend flight to Boise. The second option includes service exclusively to Portland. The service would include three daily weekday flights and three flights during the weekend. While we are aware that the market currently uses Seattle as its connecting hub, we believe that similar connecting opportunities are available at Portland, weather conditions at the airport and air traffic congestion issues are better and the terminal facilities allow for easier connections than does Seattle. The current service to Seattle is problematic, primarily due to continuing escalating airport costs, airport congestion, and unfavorable weather conditions. While the flight mileage to Portland is 50 miles further than Seattle, we believe that the flying times will be similar. The addition of the hub airport of Boise, southeast of Ephrata/Moses Lake, creates a new opportunity for passengers connecting to destinations in the South, Midwest and East.

Big Sky seeks and is prepared to begin this enhanced service to Ephrata/Moses Lake in accordance with the service proposals contained herein in coordination with the community.

By: Craig Denney, 406-247-3912, craig.denney@bigskyair.com

November 12, 2004

Re: Request for an Extension of Time

The Port is very interested in maintaining air service, and working with the carrier to promote the service, whereby we can increase passenger travel, and lower subsidy levels. I have met with the Board of Commissioners on this issue, and they have requested that we meet with Big Sky prior to our written comments being submitted to your department. Based on the Thanksgiving Holiday, and scheduling conflicts, we hereby request that the comment period be extended from November 26, 2004 until December 10, 2004.

By: Craig Baldwin

November 15, 2004

Re: Letter Granting Extension of Time

At the request of the Executive Manager of the Grant County International Airport in Moses Lake, Washington, we are extending the deadline for filing community comments for the carrier selection case in the above‑listed dockets from November 26, 2004, to December 10, 2004.

By: Dennis DeVany

OST-98-3344 - EAS at Ephrata/Moses Lake, WA

December 3, 2004

Re: Comments of Port of Moses Lake

By: Craig Baldwin

Essential Air Service at Ephrata/Moses Lake, Washington

Order 04-12-18
OST-98-3344 - EAS at Ephrata/Moses Lake, WA

Issued December 27, 2004 | Served December 30, 2004

Order Selecting Carrier and Establishing Subsidy Rate | Word

By this order, the Department is selecting Big Sky Transportation Company, Inc., to continue providing essential air service at Ephrata/Moses Lake, Washington, for a new two-year period. This order establishes a subsidy of $1,698,922 per year for service consisting of twelve nonstop round trips to Portland and six nonstop round trip to Boise each week.

We have decided to select Big Sky to continue providing essential air service at Ephrata/Moses Lake in accordance with its Option 1. We will establish an annual subsidy of $1,698,922 for Big Sky's service for two years consisting of twelve weekly nonstop round trips between Ephrata/Moses Lake and Portland, and six weekly nonstop round trips between Ephrata/Moses Lake and Boise. We find that the subsidy amount requested is reasonable for the service to be provided.

We base our decision on the support for Big Sky from the community, and on the fact that the community supports Big Sky's service to a hub other than Seattle. Portland is a medium hub destination and, like Seattle, offers excellent access to the nation's air transportation system. Boise, a small hub destination, will afford Ephrata and Moses Lake passengers extra flexibility in arranging travel plans, especially to destinations to the east.

By: Karan Bhatia

OST-1998-3344 - EAS-Ephrata/Moses Lake

April 22, 2005

Letter Requesting Information

As you know, the Department of Transportation subsidizes scheduled service at Ephrata/Moses Lake under the essential air service program. Since 2001, that service has been provided by Big Sky Airlines, Inc. Currently, Big Sky operates 12 round trips a week to Portland and another 6 a week to Boise with 19‑seat aircraft, at a subsidy of $1,698,922 annually.

We must inform you, however, that the continued subsidy eligibility of your community is in jeopardy. As we mentioned in Order 2004-12-18, authorizing subsidy for Big Sky's Ephrata/Moses Lake service, under the program's statutes, the Department is prohibited from subsidizing service at communities where the subsidy amounts to more than $200 per passenger, unless they are more than 210 highway miles from the nearest large or medium hub. Based on our analysis of Ephrata/Moses Lake's traffic data for the year ended March 31, 2004, the most recent period for which data was available at that time, we advised you of our concerns about declining traffic levels at Ephrata/Moses Lake and how that could affect the community's continued eligibility to receive subsidized air service. Since we issued that order, passenger levels have continued to decline. Our review indicates that, for the 12-month period ended December 31, 2004, Ephrata/Moses Lake registered 6,925 origin-and-destination passengers. Consequently, Ephrata/Moses Lake's subsidy per passenger is $245.33. That amount exceeds the statutory limit. In addition, the BphrataJMoes Lake community is less than 210 miles from Seattle, a large hub.

By: Karan Bhatia

May 23, 2005

Comments of City of Moses Lake

There is no reasonable basis for the Department to determine that essential air service at EphratalMoses Lake exceeds the statutory cost limitation especially given the recent selection of Big Sky by the Department to serve the communities with a new service pattern. It is premature to make such a determination at this point. We pledge to work with the airline and within the communities to promote Big Sky's air service.

By: Craig Baldwin

October 28, 2005

Re: Comments of City of Moses Lake - Per-Passenger-Subsidy Issues

We have now reviewed the first seven months of traffic under the new service pattern, and our review indicates that Ephrata/Moses Lake registered 4,655 origin and destination passengers. Subsidy for that period was $991,038 (7/l2ths of the annual rate of $1,698,922). That results in a subsidy per passenger of $212.90, and that amount exceeds the statutory limit under the program's statutes. In fact, there has been only one month (August) in which the subsidy per passenger has been below $200. For the most recent month, September, the community registered 664 passengers resulting in a subsidy per passenger of $213.22. We are also concerned that, in response to our letter requesting what the community was doing to bring the subsidy per passenger below $200, you recited things that the carrier was doing to increase traffic, but nothing that the community was doing. Nonetheless, before taking the final step of terminating Ephrata/Moses Lake's subsidy eligibility, we have decided to take into consideration traffic results for an additional four months, through the end of January. If the subsidy-per-passenger has not fallen below $200 for the period from March 1, 2005, through January 31, 2006, we will take formal steps to terminate Ephrata/Moses Lake's subsidy eligibility.

By: Office of Aviation and International Affairs, Susan McFermott for Michael Reynolds

OST-1998-3344

January 11, 2006

Comments of City of Moses Lake

I am in receipt of a letter from your office, dated October 28, 2005, concerning the Essential Air Services for Ephrata/Moses Lake. This letter discussed the continued high subsidy rates for air service, which exceed the allowable $200 per passenger. The letter also indicated that the community would have until January 31, 2006 to bring the subsidy levels down. The period to be used is March 1, 2005 - January 31, 2006.

The letter we received also indicated that you were concerned about what the community was doing to maintain air service, as our previous response only indicated what the air carrier was doing. In an effort to clarify the previous letter, the community had partnered with Big Sky Airlines to market the service. The community, not the airlines, has paid for all marketing and advertising mentioned in our previous response to the DOT.

The community has worked hard with Big Sky Airlines to encourage people to fly from Moses Lake. This has been a result of the Chamber of Commerce, Port of Moses Lake, and local airline personnel attending local groups and organizations to discuss air service.

Although it has taken us a few months to bring the subsidy level below the $200 per passenger level, we are pleased with the way the community does support the service, as demonstrated by increased growth for 9 of the 10 past months. We knew it would be a slow start, but we fully believe we will continue to grow the air service.

With the commitments from the leaders of the community, the expanded efforts of everyone into other communities, and the natural economic growth of our community, we see nothing but continued growth for this service, a service that is truly needed here in Washington.

By: Mayor Ronald Covey

Order 2006-6-8
OST-1998-3344

Issued June 7, 2006 | Served June 12, 2006

Order Tentatively Terminating Subsidy Eligibility and Allowing Suspension of Service - Bookmarked

We will first address the Mayor's contention that the subsidy per-passenger was $198.05 for the period from March 1, 2005-December 31, 2005. That per-passenger subsidy requirement was calculated using data provided by Big Sky and included passengers traveling between Boise and Portland. The Department subsidizes service between Ephrata/Moses Lake and Boise and Ephrata/Moses Lake and Portland only. The Department is not subsidizing Boise-Portland service, and, thus, passengers between Boise and Portland should not he included in the per passenger subsidy calculation. As shown in Appendix B, the per-passenger subsidy requirement for the period March 1, 2005-December 31, 2005 was $217.65.

We also note that Ephrata/Moses Lake is approximately 61 highway miles from Panghorn Memorial Airport in Wenatchee, which offers four daily nonstop flights to Seattle with 37-seat Bombardier Q200 aircraft It appears that Big Sky's service may no longer be able to effectively compete with the Wenatchee service. Nevertheless, whatever factor or factors have caused the demand for air service at Ephrata/Moses Lake to stagnate or decline, its subsidy remains above the $200 cap.

By this order, the Department is directing interested persons to show cause why the Department should not terminate the subsidy eligibility of Ephrata/Moses Lake, Washington, under the essential air service program and allow Big Sky Transportation Company, Inc., d/b/a Big Sky Airlines to suspend service there as of August 1, 2006. Objections to the Department's tentative decision are due within 20 days of the service date of this order.

By: Michael Reynolds

OST-1998-3344

June 27, 2006

Congressman Doc Hastings Requesting Time Extension

By: Doc Hastings

Order 2006-6-35
OST-1998-3344

Issued June 28, 2006 | Served July 3, 2006

Order Extending Time for Filing Objections

By Order 2006‑6‑8, June 7. 2006. the Department requested interested persons to show cause why it should not terminate the essential air service subsidy eligibility of Ephrata/Moses Lake. Washington, and allow Big Sky Transportation Company, Inc., d/b/a Big Sky Airlines to suspend its subsidized service at this community on August 1, 2006. The Department's tentative decision was based on a review of enplanement data and the corresponding per passenger subsidy requirement for the year ended February 28, 2006. The Department's analysis indicated that subsidy at Ephrata/Moses Lake exceeds the statutory ceiling of 8200 per passenger. Ephrata/Moses Lake is located within 210 miles of the nearest large or medium hub airport and, consequently, Order 2006‑6‑8 tentatively terminated its subsidy eligibility. That order directed all interested persons to show cause why the Department should not make its tentative findings and conclusions final by July 3, 2006.

In a letter dated June 19, the City of Moses Lake requests a 45‑day extension to the comment period in order to allow adequate time to prepare its response. In its request, the community referenced Order 2004‑6‑12, June 13, 2004, in which the Department extended the comment period regarding the termination of essential air service subsidy eligibility of Brownwood, Texas, for a total of 35 days.

By: Michael Reynolds

June 28, 2006

Re: Opposition of Big Sky Airlines to Grant of 45 Day Extension

Big Sky Airlines is opposed to granting the Moses Lake parties a 45 day extension to the request made by your department. Big Sky is losing substantial money serving Moses Lake as a result of lower than projected traffic and significantly higher fuel expense.

By: Big Sky

OST-1998-3344

June 30, 2006

Comments of Grant County Emergency Management

The Port of Moses Lake has completed a site-capabilities assessment within the last two months to identify what resources it has available as a disaster distribution center. The airport would serve as a distribution center for the entire Pacific Northwest in a major disaster event. The airport can park numerous planes of varying sizes from small single-engine planes to 747 jets. Commercial air service will be a vital component in managing resources and transporting people in disaster situations. It will also serve the growing population of the area that is sure to continue.

Grant County is growing. Please do not terminate the EAS program.

By: Grant County Emergency Management

June 19, 2006

Comments of TRANSCO

The community is working with the current carrier, Big Sky Airlines, and with USDOT to look at improving flight routes and schedules and passenger numbers. We are aware that the federal government and the airlines are feeling the squeeze of increased fuel costs as well as other pressures, but calculations for determining EAS requirements and allocations need to include those factors on behalf of communities and traveling citizens as well.

By: Karen Bonaudi

OST-1998-3344

June 27, 2006

Re: Letter from Doc Hastings - Request for 20-Day Comment Period Extension

I am writing with serious concerns about plans to terminate Essential Air Service in Moses Lake, Washington. At nearly 7 percent, the unemployment rate in Grant County is well above the national average. However, progress is being made with businesses like Microsoft, Google, and Yahoo making plans to enter the area over the past year. I am concerned about the impact that termination of EAS would have as we seek to create jobs and grow the Grant County economy. As you. know, convenient and accessible air service is a key to drawing new businesses to rural communities like Moses Lake.

Additionally, I understand that the cost per passenger has been reduced – demonstrating, that significant progress is being made. I respectfully request an extension of the 20 day comment period in order to provide time for the compilation and thorough review of information about ongoing efforts to further reduce the cost per passenger and the impact to the local economy.

By: Doc Hastings, Member of Congress

OST-1998-3344

July 31, 2006

Washington State DOT in Opposition to Termination of Service

On behalf of the Governor’s Office, the Washington State Department of Transportation Aviation urges the U.S. Department of Transportation to reconsider its decision to terminate the Essential Air Service subsidy at Ephrata/Moses Lake, Washington. It is in WSDOT’s interest that EAS at Ephrata/Moses Lake is maintained, as it provides a vital regional transportation link for the efficient movement of people, goods and services in our state.

WSDOT Aviation has reviewed a draft statement by Ephrata/Moses Lake management that outlines the reasons why the Community believes it has made significant strides in meeting DOT’s $200 subsidy cap. It is WSDOT’s understanding that factors such as discrepancies in passenger counting and calculation of subsidies, flight cancellations and delays, service locations and airline ticketing issues, etc. have contributed to the overage on the subsidy cap. However, WSDOT believes that Moses Lake has an effective strategy in place to maintain subsidy levels under $200 going forward. This includes reducing expenditures with Big Sky Airlines, negotiating service with other carriers, improving ticketing services, eliminating previous counting discrepancies, etc.

As several Washington State airports face challenges with maintaining air service we strongly recommend that DOT weigh the reasons for and importance of preserving this valuable state service at Moses Lake.

By: John Sibold

OST-1998-3344

July 31, 2006

Re: Response of The City of Moses Lake to Order Tentatively Terminating Subsidy Eligibility and Allowing Suspension of Service

The Community of Ephrata/Moses Lake requests that the DOT reverse its decision to terminate subsidy eligibility at Ephrata/Moses Lake based on some of the extenuating circumstances that took place during the past year. Although some records would indicate our subsidy continues to be above the $200 cap, we believe that some of the numbers are inaccurate.

We further believe that after our meetings with Horizon Air, Big Sky Airlines, and Kenmore Air, that a favorable, cost effective route will be determined. We also believe that the ability to locate Moses Lake as a ticket purchase option will greatly enhance our passenger numbers, as well as our Community's tremendous growth. We know that a few years ago, with Horizon Airlines, our community was supporting almost 22,000 passengers, and with the current growth, we will exceed that again, thereby we provide our commitment to provide a revenue guarantee.

We also believe that should the DOT allow the contract to complete, and then rebid the service, that a cost effective service will be obtainable, possibly through another carrier. The carriers need some additional time to accurately determine if they can provide service to this community.

It is requested that the DOT take into consideration some of the issues the Community of Ephrata/Moses Lake has dealt with, and the tremendous improvement on the subsidy rate, and grant us continuation of the EAS Subsidy, and allow a new bid process for service. With this request, the Community commits that they will continue to reduce the subsidy rate, support the air carrier, utilize the services, and provide a revenue guarantee. We also request the numbers for March and December 2005 be reviewed, and that the subsidies pay be re-evaluated.

By: City of Moses Lake

August 1, 2006

Re: Port of Moses Lake - Grant County International Airport - Maintain EAS

On behalf of the Port of Moses Lake, we want to go on record in support of maintaining air service at Ephrata/Moses Lake, and request that the Department reconsider its decision to tentatively terminate service.

Big Sky Airlines and the Port are also working together to find solutions to lowering the operational costs of Big Sky. We understand that we either need to reduce costs, or increase passengers. Passenger numbers are increasing, and with some cost reductions, we can assure the Department of remaining below the subsidy cap. We are also looking at alternate routes, such as two flights per day to Boise and dropping Portland, or connecting with another City to offer reduced costs.

As a Port Commission, we urge you to reconsider your tentative order, and approve the continuance of subsidy eligibility at Ephrata/Moses Lake.

By: Port of Moses Lake Board of Commissioners

August 2, 2006

Re: Regional Aviation Partners Objections

Regional Aviation Partners objects to the Department of Transportation’s tentative decision to terminate the EAS subsidy at Ephrata/Moses Lake, WA and asks the DOT to vacate Order 2006-6-8.

In light of RAP’s findings that additional revenue passengers exist which were not used previously in the DOT’s calculation of Ephrata/Moses Lakes’ per passenger subsidy cap, we have determined that the community is not above the $200 cap as stated by the Department. The correct per passenger subsidy rate is $194.875. As the administering agency of the EAS program, the DOT is able to apply discretion in situations it deems necessary and fair to EAS communities and carriers. We believe this is one such example.

In the case of Ephrata/Moses Lake, we have pointed out an issue surrounding the DOT’s calculation of the per passenger subsidy rate for EAS communities with two hub airports which we believe requires revising to reflect the best interest of the communities.

Should the Department disagree with our per passenger subsidy calculations, we would ask that the DOT provide Ephrata/Moses Lake officials with the necessary time to pursue subsidized air service under the cap with one of the carriers the community is currently pursuing.

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

Order 2006-8-16
OST-1998-3344

Issued August 17, 2006 | Served August 22, 2006

Final Order Terminating Subsidy Eligibility and Allowing Suspension of Service

By Order 2006-6-8, June 7, 2006, the Department directed interested persons to show cause why it should not terminate the EAS subsidy eligibility of Ephrata/Moses Lake, and allow Big Sky to suspend its subsidized service at this community on August 1. Our tentative decision was based on a statutory prohibition against subsidizing service at communities where the subsidy accounts to more than $200 per passenger, unless they are located more than 210 driving miles from the nearest large or medium hub. The Department's tentative decision was also based on a review of passenger data and the corresponding per passenger subsidy requirement for the year ended February 28, 2006. The Department's analysis indicated that subsidy at Ephrata/Moses Lake exceeded the statutory ceiling of $200 per passenger. Ephrata/Moses Lake is located within 210 miles of the nearest large or medium hub airport and, consequently, Order 2006-6-8 tentatively terminated its subsidy eligibility.

By this order, the Department is terminating the subsidy eligibility of Ephrata/Moses Lake, Washington, under the essential air service program and allowing Big Sky Transportation Company, Inc., d/b/a Big Sky Airlines to suspend service, if it chooses.

By: Michael Reynolds

OST-1998-3344

August 24, 2006

Ex-Parte Letter to Congressman Doc Hastings

The Department of Transportation remains committed to the efficient and effective management of the Federal programs that affect air service to rural communities across the Nation. Consistent with the program's governing statutes, the Department issued Order 2006-8-16 terminating Ephrata/Moses Lake's eligibility in the program because the subsidy per passenger exceeds the $200 statutory cap. This order also allows Big Sky Airlines to suspend service as of September 1, 2006, if it chooses.

By: Michael Reynolds

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