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OST-1999-5175

EAS Docket

Essential Air Service at Iron Mountain/Kingsford, Michigan

OST-1999-5175	March 1, 1999	Notice to Terminate EAS	Iron Mountain/Kingsford, MI
		Service List

In spite of well-timed schedules and competitive published fares, revenues generated in the Iron Mountain/ Kingsford-Chicago and beyond markets are currently insufficient to cover the costs of operating the service.

By:  Douglas Voss, President & CEO, Great Lakes Aviation, 712.262.1000

OST-1999-5175

March 2, 1999

Objection of Michigan Department of Transportation, Bureau of Aeronautics

Ninety Day Notice to Terminate Essential Air Service at Iron Mountain/Kingsford, Michigan

By:  William E. Gehman, Deputy Director, 517.335.9283

Order 99-5-11 OST-99-5173 OST-1999-5175 OST-99-5177

Issued May 24, 1999 Served May 26, 1999

Order Prohibiting Suspension of Service and Requesting Proposals for Replacement Service

EAS - North Platte, NB / Iron Mountain/Kingsford, MI / Williston, ND

By:  Bradley Mims

Order 99-5-12 OST-1999-5175 OST-99-5173 OST-99-5177	Issued May 24, 1999 Served May 26, 1999	Order Prohibiting Suspension of Service and Requesting Proposals for Replacement Service	EAS at Iron Mountain/Kingsford, Michigan/Williston, North Dakota/North Platte, Nebraska
		Appendix A:  Map
		Appendix B:  Historical Origin-Destination Passenger Traffic and Average Daily Enplanements
		Appendix C:  Great Lakes Aviation, Inc., d/b/a United Express Essential Air Service to be Maintained at Iron Mountain, Michigan; Williston, North Dakota; and North Platte, Nebraska
		Appendix D:   Service List for the State of Michigan
		Appendix E:  Service List for the State of North Dakota
		Appendix F:  Service List for the State of Nebraska

Great Lakes is the only carrier providing scheduled air service at all three cities, providing three round trips a day between Iron Mountain and Chicago-O'Hare International Airport with 30-seat Brasilia aircraft, and between Williston and Denver, and North Platte and Denver, with 19-seat Beech 1900 ah-craft. On March 2, 1999, Great Lakes filed 90-day notices of intent to suspend its subsidy-free essential air service at all three communities, effective May 31, 1999. Great Lakes states that its revenues on all three routes are currently insufficient to cover its costs of operating the service. In addition, it states that low-fare competition at Omaha and Lincoln, Nebraska, has had an impact on North Platte traffic.

By:  Bradley Mimms

Order 99-6-19 OST-99-5173 OST-1999-5175 OST-99-5177

June 23, 1999

Order Extending Service Obligation

EAS - Iron Mountain/Kingsford, Michigan, Williston, North Dakota, and North Platte, Nebraska

Order 99-6-19 requires Great Lakes Aviation, Ltd., d/b/a United Express, to maintain essential air service at Iron Mountain/Kingsford, Michigan, Williston, North Dakota, and North Platte, Nebraska, as set forth in Appendix C of Order 99-5-12, for an additional 30-day period through July 29, 1999, or until a carrier capable of providing reliable replacement service actually begins service, whichever is first, effective immediately, and the filing of a petition for review shall not preclude its effectiveness.

By:  John Coleman

On March 2, 1999, Great Lakes Aviation, Ltd., d/b/a United Express, tiled 90-day notices of intent to suspend its subsidy-free essential air service at Iron Mountain/Kingsford, Michigan, Williston, North Dakota, and North Platte, Nebraska, effective May 31, 1999. By Order 99-5-12, May 24, 1999, the Department prohibited Great Lakes from suspending service at the communities for 30 days beyond the end of its 90-day notice period, through June 29, 1999, and requested proposals from carriers interested in providing replacement service at the three communities. As required by 49 U.S.C. 41734, we have extended Great Lakes’ service obligation for additional 30day periods, the latest through July 29, 1999, by Order 99-6-19. On June 10, 1999, Great Lakes submitted proposals, with subsidy, for two years at the three communities. We have also received a competing proposal from Equity Air Holdings, Inc. The final deadline for submissions is August 2. Since this case will not be completed before the end of the current 30-day hold-in period, in accordance with 49 U.S.C. 41734(c), we will extend Great Lakes’ service obligation at the three communities for an additional 30 days, through August 30, 1999, or until replacement service actually begins, whichever occurs first.

By:  John Coleman

By:  John Coleman

Order 99-9-21 requires Great Lakes Aviation, Ltd., d/b/a United Express, to maintain essential air service at Iron Mountain/Kingsford, Michigan, Williston, North Dakota, and North Platte, Nebraska, as set forth in Appendix C of Order 99-5-12, for an ...

By:  John V. Coleman

Order 99-11-1 requires Great Lakes Aviation, Ltd. d/b/a United Express to maintain essential air service at Iron Mountain/Kingsford, Michigan, Williston, North Dakota, and North Platte, Nebraska, as set forth in Appendix C of Order 99-5-12, for an additional 30-day period through December 1, 1999, or until a carrier
capable of providing reliable replacement service actually begins service, whichever is first. 

By:  John Coleman

By:  John Coleman

By:  Great Lakes Aviation, Ltd.

By:  Bradley Mims

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

By:  Read Van de Water

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

By:  Dennis DeVany

Request of Astral Aviation d/b/a Skyway Airlines for a ten day extension to respond to the Department's Order Requesting Proposals for air service at Manistee, Ironwood, and Iron Mountain, Michigan.

By:  Astral Aviation, Christopher Svoboda, 414.570.2300

By:  Mesa Air Group, Gus Carbonell

By:  Great Lakes, Doug Voss

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

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

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

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

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

By:  State of Michigan, Pauline Misjak

By:  Read Van de Water

By:  Dennis DeVany

By:  Dennis DeVany

By:  Dennis DeVany

By:  Dennis DeVany

Having received service from Great Lakes Airlines for over a decade, there have been some bumps in the road. We do believe, however, that Great Lakes has been responsive to the community's air service needs. When greater flight frequency was desired, it was provided. When reliability concerns arose, they were addressed. Our relationship with the Company is a comfortable one and its continued interest in the IMT market is appreciated. It is for this and the above stated reasons that the Dickinson County Board of Commissioners urges the USDOT to renew its designation of Great Lakes as the EAS provider at Iron Mountain/Kingsford.

By:  Dickinson County Board

However, in the case of Iron Mountain, we believe that the service proposal offered by the incumbent carrier, Great Lakes Airlines, best meets the community's air service needs. Not only does the proposal offer the greatest capacity in terms of available seats, but it also provides nonstop service to Chicago O'Hare and access to the multitude of international connections available on the United Airlines system. Also, the community has expressed a desire to maintain the services of Great Lakes Airlines because they believe its service proposal offers the best chance to continue its growth and, in the near future, reach primary airport status (enplaning greater than 10,000 passengers annually). Reaching this milestone would entitle the airport to receive Airport Improvement Program (AIP) funding of $1,000,000 annually.

Furthermore, we have specific concerns with the proposals submitted by Air Midwest, Inc., as they appear to lack connecting opportunities through Chicago O'Hare. In addition, the carrier has announced its termination of service at MBS International-the only airport it currently serves in Michigan. In fact, MBS International was the only airport in the Great Lakes region receiving service by the carrier.

By: William Gehman

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

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

By: Read Van de Water

The Department is selecting Astral Aviation, Inc., d/b/a Skyway Airlines (Skyway), operating as Midwest Express Connection, a wholly owned subsidiary of Midwest Express Airlines, to provide subsidized essential air service for a two-year period at Iron Mountain/Kingsford, Michigan, at an annual rate of $ 478,693.

Given the large difference in subsidy of Great Lakes' proposal compared to those submitted by Skyway and Air Midwest, the Department would typically select the less expensive option. In spite of the fact that Great Lakes' subsidy proposal compared to Skyway's was about $276,000 (70 percent) higher, we did not do that in this case because of the very strong community preference for Great Lakes' service to Chicago. Rather, by Order 2002-10-26, the Department provided a 20-day period for the carrier and the community to make a good faith effort to come up with a plan to narrow the large gap between Great Lakes' proposal and Skyway's. Unfortunately, the community and Great Lakes have been unable to lower the subsidy cost. In fact, Great Lakes, in reexamining its revenues and expense elements in its original proposal, has now determined that it would not be able to provide its proposed service at the original $674,328 level, principally because as its operations at O'Hare continue to shrink, the unit costs of serving the O'Hare hub escalate rapidly. As a practical matter, then, Great Lakes is no longer a viable applicant.

By: Read Van de Water

June 20, 2003

Corresponde of John and Karen Lee

By: John and Karen Lee

July 14, 2004

Re: The Dickinson County Board of Commissioners Letter Noting Exemplary Service

By: William Marchetti

Order 2005-2-3
OST-99-5175 - EAS at Iron Mountain/Kingsford, MI
OST-99-5712 - EAS at Ironwood, MI/Ashland, WI
OST-96-1711 - EAS at Manistee/Ludington, MI

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

Order Requesting Proposals | Word

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

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

By: Karan Bhatia

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

March 10, 2005

Proposal of Air Midwest - Mesa Airlines

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

March 10, 2005

Proposal of Skyway Airlines - Midwest Connect

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

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

Issued March 25, 2005 | Served March 30, 2005

Order Setting Final Rate | Word

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

By: Karan Bhatia

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

April 8, 2005

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

I would like to update you on the essential air service situation at Manistee/Ludington, Iron MountainlKingsford, and Ironwood/Ashland and to give you an opportunity to submit any comments if you wish. As you know, by Order 2005‑2‑3, February 3, 2005, the Department provided for all interested air carriers to submit proposals to provide essential air service at Ironwood/Ashland, Iron Mountain/Kingsford, and ManisteefLudington. In response to that order, we received seven proposal options from Mesa Air Group, Inc., dlb/a Air Midwest, and three proposal options from Skyway Airlines, Inc., d/b/a Midwest Connect. I am attaching brief summaries of these proposals to this letter. Attachment A summarizes the subsidy calculations, while Attachment B summarizes the proposed schedules. I would also urge you to review the fill proposals as submitted by the carriers.

By: Office of Aviation Analysis, Dennis DeVany

April 25, 2005

Re: Comments of Dickinson County Ford Airport

As to its proposal, Midwest Connect generally proposes to continue its service as provided today. Specifically, 19 seat Beechcraft 1900 D aircraft would provide service to Milwaukee three times weekdays and twice on Saturdays and Sundays. Two of the three weekday flights and one‑half of the weekend flights would be non‑stop. One of the departing flights each day is shared with Marquette while one of the arriving flights is shared with Escanaba.

Besides a shortage of available seats on some occasions, about the only other re-occurring complaint concerning the service of Midwest Connect involves the departing flight shared with Marquette. Because service is routed from MT to Marquette to Milwaukee on this flight, IMT outbound passengers are perplexed to find they must first travel 80 miles north to Marquette before reversing to fly south to Milwaukee. Passenger resistence to using this flight is particularly problematic during the winter given the weather extremes in Marquette and the possibility of getting stranded there. This routing also requires passengers to travel two hours, rather than one, on a small plane that does not have a restroom.

While Chicago Midway has a reputation for being a home to low cost carriers, the lack of an operating agreement between the Airport, other carriers and Air Midwest, would seem to suggest that it would be premature to endorse such a carrier to meet IMT's essential air service needs. Its interest in serving IMT, however, is positive and the circumstances for service by Air Midwest may change in the future.

By: William Marchetti, Airport Manager

April 29, 2005

Re: Gogebic-Iron County Board of Airport Commissioners Comments on Order 2005-2-3

By a unanimous vote of the elected officials and members of the public from Gogebic County, Michigan and Iron County, Wisconsin who make up the Gogebic‑Iron County Airport Board of Commissioners, we urge you to act favorably on the proposal from Skyway Airlines, Inc., d/b/a Midwest Connect. In doing so, we want to impress upon you and the Department how strongly the public has responded to your wise decision to grant the current contract to this carrier.

I suspect few airports needing the valuable assistance of the Essential Air Service Program have experienced such a significant increase in boarding and deplanements as we have. The people of the local community have put their money where our mouths are, so to speak, in showing us that they desire the services of Skyway Airlines, Inc. Note the figures from the first quarter below and you will see that the number of passengers using our essential services provider has more than doubled - in some cases tripled - since you appointed this carrier to serve us.

By: Gene Cisewski, Gogebic-Iron County Board of Airport Commissioners

April 20, 2005

Re: Comments of The City of Kingsford

The Kingsford City Council by unanimous consensus is recommending that the U.S. Department of Transportation award Skyway Airlines, d/b/a Midwest Connect the Essential Air Service contract for Iron Mountain/Kingsford, Ironwood/Ashland and Manistee/Ludington. It is well documented by Ford Airport Manager, Mr. William Marchetti, that Midwest connect completed 99.17% of scheduled flights in 2004 and enplanements have increased by 40.3% for the period of Dec. 31, 2003 ‑ Dec. 31, 2004. It is requisite that we maintain the level of service that has become exemplary under the Midwest Connect service agreement.

By: Steven Zurcher, Mayor

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

May 9, 2005

Comments of Michigan Department of Transportation

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

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

By: Michigan Department of Transportation, Gerald Edwards

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

Issued May 23, 2005 | Served May 26, 2005

Order Selecting Carrier and Setting Final Subsidy Rate

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

By: Karan Bhatia

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

Issued January 5, 2007 | Served January 10, 2007

Order Requesting Proposals

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

With specific respect to Iron Mountain/Kingsford, Ironwood/Ashland, Manistee/Ludington and Escanaba, the Department expects proposals consisting of service with 19-passenger aircraft and offering a mix of two or three round trips a day between each community and Milwaukee. Larger aircraft, offering fewer daily trips may be substituted in lieu of the 19-passenger aircraft, higher frequency service so long as the number of available seats between the EAS community and the hub are approximately equivalent. Such service is generally consistent with what the communities currently receive, and fully satisfies their essential air service requirements. We encourage proposals that meet those requirements in an efficient manner. Carriers are also welcome to propose more than one service option, if they choose; they need not limit themselves to those requirements if they envision other, potentially more attractive service possibilities -- different hubs, for example -- with subsidy requirements that remain competitive.

By: Todd Homan

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

Issued February 6, 2007 | Served February 9, 2007

Erratum

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

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

By: Todd Homan

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

February 8, 2007

Proposal of Great Lakes Aviation

Proposal Part	Service Point(s)	Hub(s) Served	Round Trips	Equipment	Subsidy Requirement	Passengers Forecast	Average Fare
1	Iron Mountain	Milwaukee	3	1900D	$797,885	17,400	$87.00
2	Escanaba	Milwaukee	3	1900D	$617,415	19,750	$67.00
3	Ironwood	Milwaukee	2	1900D	$799,779	6250	$92.00
4	Manistee	Milwaukee	2	1900D	$957,978	3850	$79.00

Great Lakes will provide service at these Essential Air Service points in a similar fashion as is offered in Denver and utilize our interline agreements with all the major carriers, which will enable connecting bag service through the Milwaukee hub. In addition, we are anticipating executing a code-sharing agreement with Midwest Airlines to allow passengers a seamless connection at Midwest Airlines Milwaukee hub.

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

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

February 2, 2007

Proposal of Mesaba Airlines

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

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

By: Mesaba, John Spanjers

February 9, 2007

Skyway Airlines Will Not Submit Proposals

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

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

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

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

February 16, 2007

Requests for Community Comments of:

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

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

We request that you review the carriers’ proposals and submit any comments you may have before we submit a recommendation to the Assistant Secretary. We ask that you submit any comments you may have as soon as possible, but in any case no later than March 9, 2007.

By: Brian Swanson

February 16, 2007

Re: Letter to Ford Airport - Request for Community Comments

Re: Letter to Dickinson County Board of Commissioners - Request for Community Comments

Re: Letter to Michigan Department of Transportation - Request for Community Comments

Great Lakes - Three round trips each weekday and each weekend, with no restrictions upline and the authority to one-stop on one round trip, for an subsidy rate of $797,885 or approximately $195,000 more the current subsidy rate.

By: EAS Division, Dennis DeVany

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

February 28, 2007

Re: Delta County Airport Request for an Extension

March 1, 2007

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

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

By: EAS & Domestic Analysis, Dennis DeVany

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

March 16, 2007

Comments of Michigan Department of Transportation

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

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

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

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

OST-1999-5175 - Iron Mountain/Kingsford
OST-1996-1266 - Ironwood

March 15, 2007

Comments of City of Wakefield

The city would like Great Lakes Aviation, or whatever airline becomes the EAS carrier, to continue the same or a very similar schedule to the one that is currently place in place with Midwest Connect. The City is appreciative of the early morning departures and evening incoming flights. However, additional flights would enhance the service being offered at the GI Airport.

By: City Manager, John Siira

March 15, 2007

Comments of Dickinson County Board of Commissioners

The proposal from Great Lakes shows non-stop service to and from MKE but also contains language that could be used to reduce the number of seats available to IMT passengers. Dickinson County supports the removal of such language.

Great Lakes is proposing two RT’s on Saturdays to ESC but only one RT Saturday to IMT. Dickinson County strongly requests an additional RT on Saturdays, particularly if Great Lakes is chosen to serve both communities.

Should the proposal from Great Lakes be accepted by the DOT, it is vital that the transition proceed as seamlessly as possible and that the fare structure remain competitive with surrounding airports.

By: Chairman, Joe Stevens

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

March 19, 2007

Statement of Midwest Airlines

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

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

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

Issued March 30, 2007 | Served April 4, 2007

Order Selecting Carrier and Setting Final Subsidy Rates

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

By: Andrew Steinberg

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

Issued June 6, 2007 | Served June 11, 2007

Erratum

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

By: Todd Homan

September 4, 2007

Comments of Ford Airport

Enclosed is a letter received from Avis, the only national franchise rent a car company serving IMT, dated 8/16/07. Avis is currently evaluating the viability of continuing service at IMT even though they have done so for the 25+ years I’ve served as Airport Manager. Service was also previously provided by Hertz.

Something must be done and done soon. As things currently stand, I can’t even respond to the many questions from the public as to if Midwest now intends to stay or if the USDOT will be rebidding EAS service at Iron Mountain.

Some local leaders believe we should begin a letter writing campaign to our congressional leaders. While such a move could happen at any time, a simple letter explaining the plans of Midwest Connect and the USDOT concerning the future of air service at IMT would go a long way in allaying local community concerns.

By: Airport Manager, William Marchetti

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

Issued October 29, 2007 | Served November 1, 2007

Order Requesting Proposals | Word

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

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

With specific respect to Iron Mountain/Kingsford, Ironwood/Ashland, Manistee/Ludington and Escanaba, the Department expects proposals consisting of service with 19-passenger aircraft and offering a mix of two or three round trips a day between each community and Milwaukee.  We would also entertain proposals with larger aircraft, offering fewer daily trips.  Such service is generally consistent with what the communities currently receive, and fully satisfies their essential air service requirements.  We encourage proposals that meet those requirements in an efficient manner.  Carriers are also welcome to propose more than one service option, if they choose; they need not limit themselves to those requirements if they envision other, potentially more attractive service possibilities -- different hubs, for example -- with subsidy requirements that remain competitive.

By: Michael Reynolds

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

November 19, 2007

Proposals of Big Sky Airlines

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

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

The service pattern includes:

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

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

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

January 2, 2008

Re: Big Sky Airlines Withdraw

Big Sky hereby withdraws from the Michigan case.

By: Fred deLeeuw

January 8, 2008

Email Message - Dickinson County Board of Commissioners in Support of Mesaba Option 2

The Dickinson County Board of Commissioners met late yesterday PM and unanimously endorsed the Mesaba Option Two Proposal with service to BOTH MSP and DTW.

By: Bill Marchetti, airmanbill@mac.com

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

January 8, 2008

Michigan State DOT in Support of Mesaba Airlines

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

By: Gerald Edwards

January 10, 2008

Re: Systems Control in Support of Mesaba Airlines

We strongly suggest Mesaba Airlines proposal for two round trips per day to both Minneapolis and Detroit as the best option for long term economic viability.

By: Al Bloniarz, 906-776-3372

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

Issued | Served

Order Selecting Carrier, Setting Final Subsidy Rates and Requesting Proposals

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

By: Michael Reynolds

OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba

January 18, 2008

Email Message - Comments of Northwest

As we're going through the process of routing this new service for this coming summer, we're realizing (from a crew and aircraft resources standpoint) the schedule works better for us to schedule the IMT/ESC via both hubs in an "Option 3" scenario (same concept as Option #2, however, a morning departure to DTW and afternoon departure to MSP - overall pattern/tags would stay the same). I would like to approach each community and ask for their support on this change, while maintaining the same subsidy. I think you guys will be ok with this, but I just wanted to give you the heads-up in advance.

By: Northwest, Tim McDonald, tim.mcdonald@nwa.com

Order 2008-1-27
OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba

Issued January 28, 2008 | Served January 31, 2008

Order Approving an Alternate Service Pattern | Word

At the urging of both communities, we received a request from Mesaba on January 18 to comport to the communities’ wishes and provide dual-hub service. Specifically, Mesaba would utilize 34-seat Saab 340 aircraft to provide seven round trips each week over an Escanaba-Iron Mountain/Kingsford-Minneapolis-Iron Mountain/Kingsford-Escanaba routing and seven round trips each week over an Detroit-Escanaba-Iron Mountain/Kingsford-Escanaba-Detroit routing for a the same annual subsidy requirement ($2,251,767) as approved by Order 2008-1-13. This alternate service pattern will also constitute the same frequency level as described in Order 2008-1-13 (14 weekly round trips). Mesaba intends to begin this new service pattern in June.

By: Todd Homan

January 22, 2008

Email Message - Ford Airport Support for Mesaba

Pleased be advised that Dickinson County supports the above referenced proposal that would provide daily service to both MSP and DTW rather than service to MSP only as contained in the DOT Order dated 1/17/08. It is our understanding that Northwest and Mesaba are agreeable to doing this with no change in subsidy.

By: Airport Manager, Bill Marchetti, airmanbill@mac.com

February 7, 2008

Re: Dickinson Area Partnership in Support of Mesaba

On behalf of the Dickinson Area Partnership, representing over 400 businesses in the Dickinson area business community, I would like to take this opportunity to thank the Department of Transportation for approving Mesaba Airline's proposal for service to both the Twin Cities and Detroit hubs with 34-seat Saab 340 aircraft to Ford Airport in Iron Mountain, Michigan, docket number 5175. As the voice of the business community, the Partnership supports continued quality air service that is safe and reliable. We feel that this new opportunity using 34-seat aircraft and having features such as a lavatory and reclining leather seats will not only improve, enhance service, and support but increase passenger activity.

By: Bruce Orttenburger, 906-774-2002

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

April 1, 2008

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

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

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

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

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

Counsel: Silverberg Goldman, Robert Silverberg

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

April 23, 2008

Re: DOT Letter to Congressman Bart Stupak

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

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

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

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

By: Dennis DeVany

OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba

June 12, 2008

Re: DOT Response to Congressman Bart Stupak

Thank you for your letter of June 6 urging the Department to authorize an automatic fuel cost adjustment and increasing the subsidy amount paid to Mesaba Airlines for providing essential air service at Iron Mountain and Escanaba.

The Department is very cognizant of the financial hardship that record‑high fuel costs are exerting on transportation‑related services and the key role air service plays in connecting rural communities to the national air transportation system. These same record‑high fuel costs are also placing severe budgetary pressure on the entire EAS program. As you know, air carriers operating smaller, less fuel‑efficient aircraft types have chose to discontinue operation of that equipment or are no longer, in business, existing contracts are typically being renewed at significantly higher subsidy levels, and many communities that were formerly served subsidy‑free now require EAS subsidy.

By: Dennis DeVany

Order 2008-6-38
OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba

Issued and Served June 26, 2008

Order Prohibiting Termination of Service and Requesting Proposals

By this order, the Department is: (a) prohibiting Mesaba Aviation, Inc., d/b/a Mesaba Airlines, operating as Northwest Airlink, from terminating its subsidized service at Iron Mountain/Kingsford and Escanaba, Michigan, for 30 days beyond the end of its 90-day notice period; and (b) requesting long-term proposals from carriers interested in providing essential air service, with or without subsidy, by July 10, 2008.

With specific respect to Iron Mountain/Kingsford and Escanaba, the Department expects proposals consisting of either three round trips a day (18 a week) with 19-passenger aircraft or two daily round trips (14 a week) with 30-seat or larger aircraft between each community and Minneapolis, Detroit, Milwaukee or another suitable hub where connections to the national air transportation system can be made. Carriers interested in filing proposals, with or without subsidy requests, should file them no later than July 10, 2008.

By: Michael Reynolds

OST-1999-5175 - Iron Mountain/Kingsford
OST-2003-15128 - Escanaba

July 2, 2008

Re: Michigan Governor Requesting Adjustment of EAS Subsidy

Because of the recent spike in fuel costs, Mesaba's service between the Upper Peninsula and important hubs such as Detroit and Minneapolis is now in danger. When Mesaba was awarded its EAS subsidy to provide service to Iron Mountain and Escanaba, the projected cost of fuel was $2.47 a gallon; it has since increased to $4.66 in Iron Mountain and $3.87 in Escanaba. As a result, Mesaba expects a deficit of $600,000 per year at the current price of fuel. These unanticipated expenses could result in another suspension of this critical service to Michigan communities if quick action is not taken. When service is interrupted, these communities have no air service to the lower peninsula, a critical issue for families and businesses.

I understand that the U.S. Department of Transportation has the authority to make adjustments to EAS subsidies under current law. To prevent further service interruptions to Michigan's Upper Peninsula, I am requesting that U.S. DOT adjust the EAS subsidy to Mesaba Airlines to reflect the high costs of jet fuel.

By: Governor Jennifer Granholm

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