OST-2002-11348 - EAS at Athens, GA

Concern of Athens Airport Authority and the Unified Government of Athens-Clarke County of Termination of Service

January 28, 2002

Terminate Service Between Athens, Georgia and Charlotte, North Carolina

By: Athens Airport Authority, Tim Beggerly

Order 02-2-14 OST-02-11348	Issued February 15, 2002 Served February 22, 2002	Order Prohibiting Termination of Service and Requesting Proposals	Terminate Service Between Athens, Georgia and Charlotte, North Carolina
		Appendixes: Map, Air Traffic

The community's essential air service (EAS) determination, last reviewed by the Department in 1988 (Order 88-2-31), requires a minimum of two weekday round trips and two round trips each weekend period to Atlanta (nonstop) or Charlotte (nonstop or one stop). While the number of passengers using the Ben Epps Airport has been declining since 1997, during the five-year period from 1996 through 2000, an average of almost 25,000 (24,990) passengers used CCAIR's service each year. The Ben Epps Airport itself lies two miles east of downtown Athens. Atlanta-William B. Hartsfield International Airport, located approximately 78 highway miles to the southwest, is the closest large hub airport.

We request that any carriers interested in providing essential air service at Athens, with or without subsidy, file their proposals within 20 days of the service date of this order. We ask that carriers submit proposals for two or three round trips per day to either of its designated hubs of Atlanta or Charlotte with 15-seat or larger, pressurized aircraft. 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 community's 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

Proposal to Provide Essential Air Service for Athens, GA

March 15, 2002

Terminate Service Between Athens, Georgia and Charlotte, North Carolina

By: Corporate Airlines

Order 02-5-02
OST-02-11348

Issued May 2, 2002
Served May 7, 2002

Terminate Service Between Athens, Georgia and Charlotte, North Carolina

Corporate Airlines has filed a subsidy proposal for service at Athens. However, since this case will not be completed before the end of the current hold-in period, and as required by 49 U.S.C. 41734, we must continue to hold CCAIR in at Athens for an additional 30-day period.

By: Randall Bennett

Notice Of Withdrawal Of Notice To Terminate Service At Athens, GA

May 10, 2002

Terminate Service Between Athens, Georgia and Charlotte, North Carolina

Respectfully withdraws its notice to terminate service, OST 2002-11348-1, at Athens, Georgia. Mesa Air Group, Inc. intends to continue service, following the June 17, 2002, hold-in period, between Athens, Georgia and Charlotte, North Carolina, without request for federal subsidy under the Essential Air Service program. Mesa Air Group, Inc. advises the Department of Transportation that Air Midwest, Inc., a wholly owned subsidiary of Mesa Air Group, began providing the replacement service for the CCAIR, Inc. route between Athens, Georgia and Charlotte, North Carolina on April 15, 2002.

By: Mesa Air Group, Gus Carbonell

Certificate Of Service to Notice of Mesa Air Group

May 10, 2002

Terminate Service Between Athens, Georgia and Charlotte, North Carolina

By: Mesa Air Group, Gus Carbonell

Order 02-5-29
OST-02-11348

Issued May 29 2002
Served June 3, 2002

Order Terminating Proceeding

Terminate Service Between Athens, Georgia and Charlotte, North Carolina

Corporate Airlines and Air Midwest both filed proposals for service at Athens. However, on May 13, 2002, Mesa, acting for CCAIR, formally withdrew its notice of intent to terminate service, stating that another wholly-owned subsidiary of Mesa, Air Midwest, would continue to operate three round trips a day using 19-seat Beech 1900 aircraft, under the same US Airways code-share agreement under which CCAIR operated. We accept the assignment to Air Midwest of CCAIR's obligation to provide the service, and terminate the selection case.

By: Read Van de Water

Notice of Air Midwest to Terminate Scheduled Air Service

March 13, 2003

Essential Air Service at Athens, Georgia - Notice of Air Midwest to Terminate Scheduled Air Service

Order 88-2-31 set forth the essential air service determination at Athens, Georgia to require two nonstop roundtrips each weekday and each weekend to Atlanta, Georgia or two one stop roundtrips each weekday and each weekend to Charlotte, North Carolina. Air Midwest is currently operating three nonstop weekday, one Saturday and two Sunday roundtrips to Charlotte, North Carolina using Beech 1900D aircraft.

Though Air Midwest would prefer to continue providing scheduled air service in Athens, the substantial costs resulting from increased federal regulations for regional carriers makes it impossible to continue without Essential Air Service subsidy. The absence of this subsidy requires Air Midwest to advise the Department that scheduled air service will be discontinued. At present, Air Midwest is the sole provider of certificated scheduled air service at Athens, Georgia.

Counsel: Mesa, Colleen Marie O'Day, 602-685-4119

Correspondence from Athens Airport Authority

March 17, 2003

Termination of Scheduled Air Service by Air Midwest

If approved, this request would leave our airport without any air service therefore removing Athens and NE Georgia from that vital link to the National Air Transportation System. Not only would this have devastating affects on the Athens Airport but to this entire community. Therefore we are requesting your assistance through the Essential Air Service Program to keep an air carrier operating at our airport.

By: Tim Beggerly

Order 2003-4-21
OST-02-11348 - Notice: CCAIR, Inc. - Termination of Scheduled Air Service between Athens, Georgia and Charlotte, North Carolina

Issued April 28, 2003 | Served May 1, 2003

Order Prohibiting Termination o f Service and Requesting Proposals | Word

Air Midwest is the only carrier serving the Athens community. The carrier's current service consists of three nonstop round trips on weekdays, one on Saturday, and two on Sunday to the US Airways' hub at Charlotte, North Carolina, using 19-seat, Beech 1900D turboprop aircraft.

We request that any carriers interested in providing essential air service at Athens, with or without subsidy, file their proposals within 20 days of the service date of this order. We ask that carriers submit proposals for two or three round trips per day to either of its designated hubs of Atlanta or Charlotte with 15-seat or larger, pressurized aircraft. 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 community as broad an array of proposals as possible from which to choose. Of course, as always, we will formally solicit the community's 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 C. Van de Water

June 5, 2003

Response of Mesa Air Group to Request for Proposals

By: Mesa, Scott Lyon, 602-685-4368, scott.lyon@mesa-air.com

May 16, 2003

Proposal of Corporate Airlines

By: Douglas Caldwell

Order 03-6-38
OST-02-11348 - EAS at Athens, GA

Issued June 30, 2003 | Served July 3, 2003

Correspondence of Robert Barker

Order 2003-6-38 extends the service obligation of Mesa Air Group, Inc., d/b/a Air Midwest, at Athens, Georgia, for an additional 30 days, through August 13, 2003. Although we have received proposals, this case will not be completed by the end of the current hold-in period. Therefore, in accordance with 49 U.S.C. 41734(c), we will extend Air Midwest's service obligation at Athens for an additional 30 days, or until suitable replacement service actually begins, whichever occurs first.

By: Randall Bennett

May 12, 2003

By: Robert Barker

Order 03-7-34
OST-02-11348 - EAS at Athens, GA

Issued July 30, 2003 | Served August 4, 2003

Correspondence of Athens Airport Authority

Order 2003-7-34, the Department extends the service obligation of Mesa Air Group, Inc., d/b/a Air Midwest (Air Midwest), at Athens, Georgia, for an additional 30 days, through September 12, 2003.

By: Randall Bennett

August 22, 2003

We understand from Mr. Kevin Adams that price negotiations for all bidders are complete for the exception of MESA Air Group, Inc. Please make all efforts possible to have MESA complete these negotiations so that an air carrier may be selected. Not knowing which carrier will be serving our market has had a negative impact on our ridership and we would like to resolve this as soon as possible.

By; Tim Beggerly

Order 03-9-8
OST-02-11348 - EAS at Athens, GA

Issued September 11, 2003 | Served September 16, 2003

Although we have received proposals, this case will not be completed by the end of the current hold-in period. Therefore, in accordance with 49 U.S.C. 41734(c), we will extend Air Midwest's service obligation at Athens for an additional 30 days, or until suitable replacement service actually begins, whichever occurs first.

By: Randall Bennett

Order 03-11-7
OST-02-11348

Correspondence of the Essential Air Service Division to the Honorable Heidi Davison

Although we have received proposals, this case will not be completed by the end of the current hold‑in period. Therefore, in accordance with 49 U.S.C. 41734(c), we will extend Air Midwest's service obligation at Athens for an additional 30 days, or until suitable replacement service actually begins, whichever occurs first.

By: Randall Bennett

December 5, 2003

By: Dennis DeVany

Order 03-12-14
OST-02-11348 - EAS at Athens, GA

Issued December 12, 2003 | Served December 17, 2003

Re: Letter to Mayor Heidi Davison

By: Randall Bennett

December 12, 2003

I am writing you now to correct my earlier letter of December 5. We had assumed that Air Midwest would continue to operate its Athens-Charlotte service as a US Airways Express carrier, and reflected that in our letter to you. Within the last clay or two, however, we were informed by US Airways that it had informed Air Midwest some time ago that it was terminating its code-share relationship with Air Midwest on all flights to and from Charlotte, effective not later than May 4, 2004.

By: Dennis DeVany, EAS Division

Order 04-01-3
OST-02-11348

Issued January 7, 2004 | Served January 12, 2004

Re: Athens Clarke County Letter in Support of Corporate Airlines

We recently concluded subsidy rate negotiations and sent a letter to the community officials requesting their views on the carrier-selection case. Therefore, in accordance with 49 U.S.C. 41734(c), we will extend Air Midwest’s service obligation at Athens for an additional 30 days, or until suitable replacement service actually begins, whichever occurs first.

By: Randall Bennett

January 14, 2004

After reviewing the proposals and meeting with both airline representatives, the Athens Airport Authority voted unanimously to recommend that the EAS contract be awarded to Corporate Airlines for Option #2, 18 round trips per week (Athens‑Atlanta) for $882,057 annually. As the route to Charlotte has proven its ridership will continue to decline, we feel the Athens‑Atlanta route will increase our passengers by offering a convenient connection to the Atlanta Airport.

By: Heidi Davison, Mayor

Order 04-2-1
OST-02-11348

Issued February 2, 2004 | Served February 5, 2004

Re: Air Midwest Codeshare with US Airways

Although we have received proposals, this case will not be completed before the end of the current hold‑in period. Therefore, in accordance with 49 U.S.C. 41734(c), we will extend Air Midwest's service obligation at Athens for an additional 30 days, or until suitable replacement service actually begins, whichever occurs first.

By: Randall Bennett

February 2, 2004

Please accept the following letter in reference to the status of theAir Midwest/US Airways code-share relationship in the Athens-Charlotte market. As the attached letter demonstrates, Air Midwest continues toenjoy the code-share relationship with US Airways in the Athens market.

By: Brian Gillamn

February 9, 2004

Notice to Interested Parties

By email dated February 9, the Airport Manager of Athens Georgia notified this office that the Athens Airport Authority will not meet until February 18, 2004, to consider the community's recommendation regarding the selection of a replacement carrier to serve Athens under the Essential Air Service program administered by the Department. Specifically, the Airport Manager asked that Athens be allowed until February 27 to submit final comments and recommendations regarding the matter.

In consideration of the issues involved, the date for Athens to submit any final comments and recommendations is changed from February 13th to February 27th.

By: Dennis De Vany

Order 04-3-14
OST-02-11348 - EAS at Athens, GA

Issued March 15, 2004 | Served March 18, 2004

Order Selecting Carrier and Establishing Subsidy Rates

By this order, the Department of Transportation extends the service obligation of Mesa Air Group, Inc., d/b/a Air Midwest, at Athens, Georgia, for an additional 30 days, through April 14, 2004. Although we have received proposals, this case will not be completed before the end of the current hold-in period. Therefore, in accordance with 49 U.S.C. 41734(c), we will extend Air Midwest's service obligation at Athens for an additional 30 days, or until suitable replacement service actually begins, whichever occurs first.

By: Randall Bennett

Order 04-03-25
OST-02-11348

Issued and Served March 23, 2004

We have decided to select Air Midwest's twelve nonstop‑round‑trip‑per‑week option beginning when it inaugurates that service pattern or 60 days after the date of service of this order, whichever is first, through the 24th full month thereafter, at the annual subsidy rate of $392,108. Our decision is consistent with the community's preference of air carrier, the rate is reasonable for the service at issue, and the carrier's performance continues to be satisfactory.

In this case, all of the statutorily required selection criteria point toward the selection of Air Midwest. First, the community prefers the selection of Air Midwest. Second, Air Midwest provides service at Athens under a code‑share arrangement with US Airways at Charlotte that offers beyond‑hub benefits such as one‑stop check in; interline baggage handling, through ticketing, and joint fares. Moreover, Air Midwest has operated for many years as a scheduled carrier in general and, specifically, at Athens. Corporate, on the other hand, no longer has community support, and does not have contractual or marketing arrangements with a major carrier at Atlanta ‑ both statutory criteria. Also, as indicated below, Air Midwest's subsidy rate is substantially less than that proposed by Corporate.

By: Karan Bhatia

Order 2005-12-3
OST-2002-11348

Issued December 8, 2005 | Served December 13, 2005

Order Requesting Proposals - Bookmarked

By this order, the Department is requesting proposals from carriers interested in providing essential air service at Athens, Georgia, for the two-year period beginning June 1, 2006, with or without subsidy.

We expect proposals consisting of service, at a minimum, with two-pilot, twin-engine aircraft with at least 15 passenger seats, and offering from 12 to 14 round trips a week to Charlotte. Such service is generally consistent with what the community currently receives, and fully satisfies its 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.

Air Midwest, and its predecessor CCAir, Inc., served Athens for a number of years without subsidy until the carrier filed to suspend service in March 2003. The carrier was selected to provide subsidized essential air service beginning on June 1, 2004, to the US Airways' hub at Charlotte. Air Midwest serves Athens as US Airways Express, having a code-share agreement with US Airways that provides passenger benefits such as single ticketing and through-baggage handling on US Airways' flights connecting beyond the Charlotte hub. For the 12-month period ended August 2005, the most current passengertraffic data we have, Athens averaged just over 47 passengers per day (23.6 inbound and 23.6 outbound).3 We note that traffic levels at Athens have remained strong since Air Midwest began providing subsidized service in the market, averaging about 14,775 annual passengers in the period from 2004 through August 31, 2005

By: Todd Homan

http://www.athensairport.net/ - Athens-Ben Epps Airport

January 12, 2006

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

Mesa Air Group, Inc d/b/a Air Midwest is pleased to submit two proposals to provide Essential Air Service at Athens, Georgia. Mesa's proposed options would continue its current service to Charlotte All operations proposed would utilize our modem fleet of Raytheon/Beechcraft B-1900D airliners. These aircraft offer a very comfortable 19-seat, pressurized cabin with two turboprop engines. Mesa has a long history of offering Essential Air Service throughout the country, from New Mexico to New York. We intend to operate this service under our Codeshare agreement with US Airways, allowing for convenient connections in their largest hub.

Option #	Hub(s)	Service	Annual Subsidy
1	CLT	2RT: AHN to CLT	$624,679
2	CLT	3RT: AHN to CLT	$938,481

Athens has seen strong passenger numbers, even though the DOT lowered the number of flights in Athens to two roundtrips during the last contract period. The increase in subsidy for the current level of service is primarily due to an increase of nearly 87% in fuel costs, which have increased the fuel nearly $170,000 over the previous proposal. The rest of the increase in subsidy is primarily due to higher ownership cost due to increases in interest rates and overall increase in costs due to inflationary pressures. We feel that our proposal as US Airways Express will allow the passengers of Athens to continue to have cost-effective and convenient connecting options in Charlotte.

By: Mesa, Mickey Bowman

January 19, 2006

Letters to:

Mayor Heidi Davison
Tim Beggerly, Airport Manager

I would like to update you on the essential air service situation at Athens and give you an opportunity to submit any comments if you wish. As you know, by Order 2005-12-3, December 13,2005, we solicited proposals from carriers interested in providing subsidized service at Athens. In response to our request, we received a single proposal consisting of two service options from the incumbent carrier, Mesa Air Group, Inc., d/b/a Air Midwest, Inc.

As you know, Air Midwest is a code-share partner of US Airways, and would operate all of its service as US Airways Express providing nonstop service to Charlotte with 19-seat Beech 1900D turboprop aircraft. Under Option 1, Air Midwest has proposed to provide 13 round trips per week (one more than its current schedule of 12 round trips per week) - two round trips each day, Sunday thru Friday and one on Saturday - for an annual subsidy of $624,679. Under Option 2, the carrier would provide 18 round trips per week - three round trips Monday thru Friday, one on Saturday, and two on Sunday - for an annual subsidy of $938,481.

My purpose in writing to you at this time is to request any final comments you might have on the options before we submit a recommendation to the Assistant Secretary for Aviation and International Affairs.

By: Dennis DeVany

February 1, 2006

Re: Recommendation of Ben Epps Airport

After much review, we feel that Option 2 - 18 round trips per week, would be the prudent choice for Athens. Attached is a letter from the Airport Authority outlining their reasoning for this choice. As indicated, a 13 round trip option would not be adequate to meet the needs of our community.

By: Tim Beggerly

Re: Recommendation of Athens Ben Epps Airport Authority

We are strongly in support of Option 2, which provides for three round trip flights on weekdays, one flight on Saturday, and two flights on Sunday. Prior to the last EAS contract, Athens operated quite effectively under an arrangement similar to the three-flight option. We find Option 1, which has two flights daily with one flight on Saturday, to be insufficient given the present needs of and potential use by Athens Ben Epps Airport our community and region. As we demonstrate below, the two-flight option is inappropriate for a market of our size and simply unworkable for Athens given the purpose of the EAS program. The three-flight option is, while not ideal, acceptable for the next EAS contract period.

We are convinced that the two-flight arrangement drives away potential passengers from Athens, forcing them to drive the 90 minutes to 2 hours needed to reach Atlanta HartsfleidJaclcson International Airport. Presently there is an early morning and evening departure from Athens and two flights arriving in the evening - and option 2 proposes continuing this arrangement, Those interested in coming to Athens before 8p do not have a flight available. Similarly, passengers are unable to make a connection in Charlotte to an afternoon or an evening flight before 8p. Potentially Interested passengers, including those with the University of Georgia a potentially lucrative market, are thus disinclined to use the Athens airport. A return to the threeflight option would recapture passengers who have given up on the Athens service or who have yet to use it regularly by increasing options. Passengers could catch connections In Charlotte throughout the day and could arrive in Athens in the morning. Furthermore, having a midmorning departure would enable passengers Inconvenienced by a cancellation or delay with the 6a flight to have an option other than being bussed to Atlanta for a late morning or early afternoon departure.

By: James Box

February 6, 2006

Re: Recommendation of Mayor Heidi Davison

In reference to the above mentioned letter, the Athens Airport Authority and Airport Manager have both written letters to you stating their reasoning for selecting Option 2, 18 round trip flights per week, for Athens GA. I have had the opportunity to read the letters and concur with their reasoning.

In addition to the above, the citizens of Athens - Clarke County have confirmed their commitment to the airport by approving a 4.8 million dollar commercial terminal construction project as part of our current SPLOST program. The project will construct a new commercial terminal facility from the ground up, which will include the terminal, ramps taxiways, parking, and associated offices and restaurant. It will provide a secure location and space needed for security equipment used by the TSA. The project will be built on land already purchased by Athens - Clarke County for a total local investment of 5.8 million.

As you can see. Athens has made a major monetary commitment to our airport in order to provide the University of GA, business, industry and our citizens the best transportation options possible. We ask that the Essential Air Service join our community's commitment by approving Option 2, 18 flights per week.

By: Heidi Davison

February 9, 2006

Re: Recommendation of University of Georgia

I am aware that the Athens-Clarke County Airport Authority is in conversations with your organization regarding renewal of an agreement to provide Essential Air Service subsidies for commercial service in and out of the Athens Airport. I have studied the two options under consideration and feel that the greater benefit to the local community would derive from Option #2.

By: Henry Huckaby

Order 2006-3-19
OST-2002-11348

Issued and Served March 22, 2006

Order Re-selecting Carrier and Establishing Subsidy Rate - Bookmarked | Word

By Order 2004-3-25, the Department selected Air Midwest to provide two nonstop round trips on weekdays and on weekends to Charlotte with 19-seat Beech 1900D turboprop aircraft for the two-year period ending May 31, 2006, at an annual subsidy of $392,108. As the end of that two-year contract period was approaching, the Department issued Order 2005-12-3 on December 13, 2005, requesting proposals from carriers interested in providing EAS at Athens for a new two-year period beginning June 1, 2006, with or without subsidy. In response to our request, we received proposals from only the incumbent, Air Midwest.

Air Midwest submitted two options, both of which would provide nonstop service to Charlotte with 19-seat Beech 1900D turboprop aircraft. Air Midwest has a code-share agreement with US Airways at Charlotte, and would continue to serve the community as US Airways Express. Under Option 1, it would provide 13 nonstop round trips per week (two each weekday and three over the weekend) for $624,679, and Option 2 would provide 18 nonstop round trips per week (three each weekday and weekend) for $938,481.

We have decided to select Air Midwest’s Option 1, which will provide Athens with 13 nonstop round trips per week to Charlotte for an annual subsidy of $624,679 using 19-seat Beech 1900D turboprop aircraft. We find that the service and subsidy levels are reasonable. The major reason for the significantly higher subsidy rate is higher fuel costs, representing almost $200,000 of the $233,000 increase over the carrier’s current subsidy rate.

By: Michael Reynolds

May 2, 2007

Re: Notice of Air Midwest to Terminate Scheduled Service at Athens, GA

Respectfully serves notice upon the Department of Transportation, in accordance with 14 C.F.R. 323.3 and 14 C.F.R. 323.4, of its intent to discontinue scheduled subsidized Essential Air Service between Athens, Georgia and Charlotte, North Carolina effective August 1, 2007.

Air Midwest has decided to re-concentrate its assets and expertise to other hubs of operations in order to improve its level of service to its other EAS communities. At present, Air Midwest is the sole provider of certificated scheduled air service at Athens, Georgia.

By: Air Midwest, Tom Bacon

May 15, 2007

Athens-Ben Epps Airport Objection to Air Midwest

In reference to the above mentioned letter, the Athens - Ben Epps Airport objects to Air Midwest’s notice to cease operations in Athens, GA. This request will result in Athens, GA being without a connection with the National Air Transportation System which is vital for the economic well-being of Athens and Northeast Georgia.

Should Air Midwest cease operations, we respectfully request that they provide air service to AHN until the EAS can enter into a contract with a replacement carrier. This would ensure the continuity of air service between AHN and the NATS.

By: Ben Epps Airport Manager, Tim Beggerly, 706-613-3420

Order 2007-5-14
OST-2004-17617 - DuBois
OST-1997-2523 - Oil City/Franklin
OST-2002-11450 - Lancaster
OST-2006-25228 - Hagerstown
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2002-11348 - Athens

Issued May 21, 2007 | Served May 24, 2007

Order Prohibiting Termination of Service and Requesting Proposals - Bookmarked

By this order, the Department is (a) prohibiting Air Midwest from terminating its subsidized service at DuBois, Franklin/Oil City, and Lancaster, Pennsylvania, Hagerstown, Maryland, Greenbrier/White Sulphur Springs/Lewisburg, West Virginia, and Athens, Georgia, at the end of its 90-day notice period, and (b) requesting long-term proposals from carriers interested in providing essential air service at all the communities, except Hagerstown and Lancaster, with or without subsidy.

Because Air Midwest’s termination of service at DuBois, Franklin/Oil City, Lancaster, Hagerstown, Greenbrier/White Sulphur Springs/Lewisburg, and Athens would leave the communities without any scheduled air service, we must prohibit the carrier from terminating such service at the end of its 90-day notice period, and require it to maintain service at the communities, for an initial 30-day period, consisting of the service patterns outlined above. Furthermore, we will require Air Midwest to continue to maintain service at DuBois, Franklin/Oil City, Greenbrier/White Sulphur Springs/Lewisburg, and Athens for successive 30-day periods until we have completed processing the carrier replacement case and the new carrier(s) has actually started service. At Hagerstown and Lancaster, we will require Air Midwest to continue to serve through September 30, 2007, at which time it may suspend service.

With specific respect to DuBois, Franklin/Oil City, Greenbrier/White Sulphur Springs/Lewisburg and for Athens, we expect proposals consisting of service with 15-seat or larger aircraft offering three (DuBois) or two (Franklin/Oil City, Greenbrier/White Sulphur Springs/Lewisburg, and Athens) nonstop round trips each weekday (12 to 19 weekly round trips) to Pittsburgh, Cleveland, Cincinnati, Charlotte, Detroit, Washington, D.C., or another suitable hub with airline connections to the national air transportation system. Such service is generally consistent with what the communities currently receive.

For Franklin/Oil City, based on the latest traffic data that are available, there were 3,833 enplanements and deplanements for the 12 months ended December 31, 2006. The Department is prohibited from paying subsidy for essential air service at any community in the 48 contiguous states where such subsidy amounts to more than $200 per passenger, unless that community is located more than 210 miles from the nearest large- or medium-hub airport. Franklin/Oil City is located less than 210 miles from several large- and medium-hub airports (Pittsburgh, 97 miles; Cleveland, 133 miles; and Buffalo, 150 miles), so the $200 cap applies. Therefore, subsidy levels cannot exceed $766,600 per year.

For Lancaster and Hagerstown, we are not requesting proposals for service after September 30, 2007, because the two communities will be no longer eligible for subsidized service under the EAS program, as explained above. However, even though it may be very unlikely that a carrier would be willing to serve these communities for a very short period, if there is a carrier that is interested in serving the communities through September 30, 2007, the Department would consider the proposal.

By: Andrew Steinberg

OST-2004-17617 - DuBois, PA
OST-1997-2523 - Franklin/Oil City, PA
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg, WV
OST-2002-11348 - Athens, GA

June 25, 2007

Proposals of Gulfstream International Airlines

The first option provides for three weekday roundtrips between Pittsburgh and DuBois, plus two weekday roundtrips between Franklin and Pittsburgh. Reduced service is available on the weekends. This service would require a combined subsidy of $1,922,970.

The second option calls for, in addition to providing the DuBois and Franklin service noted above, a daily roundtrip flight between Lewisburg and both Charlotte and Pittsburgh, as well as two weekday roundtrips between Athens and Charlotte, with reduced service on the weekends for both communities. This service, combined with the subsidy required in option one noted above, would require a combined subsidy of $4,077,792. (For purposes of clarity, please note that this second option is only applicable should the Department award Gulfstream the first option above).

Also, our Essential Air Service proposal here is contingent upon Gulfstream finalizing its' negotiations of a codeshare agreement with US Airways prior to beginning the services. The goal of providing service to other gateways is to enhance the connecting opportunities for both business and leisure travelers in these communities.

All operations proposed would utilize our fleet of Beech 1900D airliners which offer a comfortable 19 seat, pressurized cabin with two turboprop engines. Gulfstream has a long history of operating a safe, reliable airline.

By: Gulfstream, David Hackett

June 26, 2007

Re: Letter to Mayor of Athens-Clarke County
Re: Letter to Athens-Ben Epps Airport

I would like to update you on the essential air service situation at Athens and give you an opportunity to submit any comments if you wish. As you know, Air Midwest, the incumbent carrier, filed a 90-day notice of its intent to suspend service at your community. As a result, by Order 2007-5-14, May 21, 2007, the Department prohibited Air Midwest from suspending service and solicited proposals from all interested air carriers to provide service at Athens, as well as at DuBois and Franklin/Oil City, Pennsylvania, and Greenbrier/White Sulphur Springs/Lewisburg, West Virginia. (We will continue to require Air Midwest to provide service so that there will be no hiatus in service.) At this stage, we would normally ask for your preferences for various carrier and service options. However, in response to that order, Gulfstream International Airlines, Inc. was the only carrier to submit a proposal. Nonetheless, we want to give you an opportunity to submit any final comments for the record that you may have.

Gulfstream proposes to offer 12 weekly nonstop round trip flights to Charlotte with 19‑passenger Beechcraft 1900D aircraft at an annual subsidy of $825,345. The proposal also includes service at Gieenbrier/White Sulphur Springs/Lewisburg, West Virginia for $1,329,477, for a total annual[ subsidy for both communities of $2,154,822. Its proposal is contingent upon Gulfstrearn finalizing its negotiations of a code agreement with US Airways.

By: Dennis DeVany

July 12, 2007

Athens-Ben Epps Airport in Support of Gulfstream International

Understanding that Gulfstream International Airlines is the only airline bidding on the Athens service, the Athens Airport supports this airline and its proposal to provide service to Charlotte International Airport provided they secure a codeshare partnership with US Airways.

By: Airport Manager, Tim Beggerly, 706-613-3420

Order 2007-7-21
OST-2004-17617 - DuBois, PA
OST-1997-2523 - Franklin/Oil City, PA
OST-2002-11450 - Lancaster, PA
OST-2006-25228 - Hagerstown, MD
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg, WV
OST-2002-11348 - Athens, GA

Issued July 26, 2007 | Served July 31, 2007

Order Selecting Carrier

By this order, the Department is selecting Gulfstream International Airlines, Inc. to provide subsidized essential air service at DuBois and Franklin/Oil City, Pennsylvania, Greenbrier/White Sulphur Springs/Lewisburg, West Virginia, and Athens, Georgia, at a total annual subsidy rate of $4,077,792 ($1,159,229 for DuBois, $763,741 for Franklin/Oil City, $1,329,477 for Greenbrier/White Sulphur Springs/Lewisburg, and $825,345 for Athens) for the two-year period beginning when Gulfstream inaugurates service through the end of the 24th month thereafter.

By: Michael Reynolds

Order 2007-8-29
OST-2004-17617 - DuBois
OST-1997-2523 - Oil City/Franklin
OST-2002-11450 - Lancaster
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2006-25228 - Hagerstown
OST-2002-11348 - Athens

Issued August 28, 2007 | Served August 31, 2007

By this order, the Department of Transportation extends the service obligation of Air Midwest, Inc., at the six above-captioned communities, for an additional 30 days, through October 1, 2007 as described in Order 2007-5-14, or until suitable replacement service actually begins, whichever occurs first.

Since September 30th is a Sunday, this hold-in period will end on Monday, October 1st. In the case of Lancaster and Hagerstown, we will only require the carrier to provide EAS until September 30, the date which subsidy eligibility for both communities expires.

By: Todd Homan

Order 2007-9-26
OST-2004-17617 - DuBois
OST-1997-2523 - Oil City/Franklin
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2002-11348 - Athens

Issued September 24, 2007 | Served September 27, 2007

We require Air Midwest, Inc., to maintain its current level of essential air service at DuBois, and Franklin/Oil City, PA, Greenbrier/White Sulphur Springs/Lewisburg, WV, and Athens, GA for an additional 30 days, through October 31, 2007, or until Gulfstream actually begins service, whichever occurs first.

By: Todd Homan

Order 2007-10-28
OST-2004-17617 - DuBois
OST-1997-2523 - Oil City/Franklin
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2002-11348 - Athens

Issued October 25, 2007 | Served October 30, 2007

Order Setting Final Rates

By this order, the Department of Transportation extends the service obligation of Air Midwest, Inc., at the four above-mentioned communities, for an additional 30 days, through November 30, 2007.

By Order 2007-7-21, July 26, 2007, the Department selected Gulfstream International Airlines to provide replacement service at the above-mentioned communities but the carrier transition has not yet taken place.

By: Todd Homan

Order 2007-11-9
OST-2004-17617 - DuBois
OST-1997-2523 - Oil City/Franklin
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2002-11348 - Athens

Issued and Served November 15, 2007

At Athens, Georgia 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 Charlotte by $804.50;

At Dubois, Pennsylvania 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 ceilings and shall be determined by multiplying the subsidy-eligible flights completed during the month to Pittsburgh by $611.28 in the first period and $711.43 in the second period;

At Franklin/Oil City, Pennsylvania 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 ceilings and shall be determined by multiplying the subsidy-eligible flights completed during the month to Pittsburgh by $728.73 in the first period and $771.09 in the second period; and

At Greenbrier/White Sulphur Springs/Lewisburg, West Virginia 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 ceilings and shall be determined by multiplying the subsidy-eligible flights completed during the month to Pittsburgh or Charlotte by $895.17 in the first period and $953.53 in the second period.

By: Michael Reynolds

Order 2007-11-20
OST-2004-17617 - DuBois
OST-1997-2523 - Oil City/Franklin
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2002-11348 - Athens

Issued November 26, 2007 | Served November 29, 2007

By this order the DOT extends the service obligation of Air Midwest at the four above-captioned communities, for an additional 30 days, through December 31, 2007.

By: Todd Homan

Order 2007-12-16
OST-2004-17617 - DuBois
OST-1997-2523 - Oil City/Franklin
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2002-11348 - Athens

Issued December 19, 2007 | Served December 26, 2007

By Order 2007-5-14, May 21, 2007, the Department prohibited the carrier from suspending service through August 31 at the communities and requested proposals, with subsidy if necessary, from carriers interested in providing replacement service. As required by 49 USC 41734, we have extended Air Midwest's service obligation for additional 30-day periods, the latest through December 31, 2007, by Order 2007-11-20.

By this order, the DOT extends the service obligation of Air Midwest at the four above-captioned communities, for an additional 30 days, through January 30, 2008.

By: Todd Homan

Order 2008-1-14
OST-2004-17617 - DuBois
OST-1997-2523 - Oil City/Franklin
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2002-11348 - Athens

Issued January 18, 2008 | Served January 24, 2008

Order Requesting Proposals

By this order, the Department of Transportation extends the service obligation of Air Midwest, Inc., at the four above-captioned communities, for an additional 30 days, through February 29, 2008.

We have extended Air Midwest’s service obligation for additional 30-day periods, the latest through January 30, 2008, by Order 2007-12-16.

By: Michael Reynolds

Order 2009-2-11
OST-2004-17617 - DuBois
OST-1997-2523 - Oil City/Franklin
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2002-11348 - Athens

Issued and Served February 6, 2008

On May 3, 2007, Air Midwest filed 90-day notices with the Department of its intent to terminate its subsidized service at the four above-captioned communities, effective August 1. In response, the Department issued Order 2007-5-14, May 21, 2007, requiring Air Midwest to continue to serve the communities and requesting proposals for replacement service. Gulfstream International Airlines, Inc. was the only applicant, and by Order 2007-7-21, July 31, 2007, we selected Gulfstream to provide DuBois, Franklin/Oil City, and Lewisburg's EAS to Pittsburgh and Lewisburg and Athens' service to Charlotte, for a combined annual subsidy of $4,077,792. From the time Gulfstream prepared its proposal, US Airways has reduced service at Pittsburgh and it is not nearly as attractive as a connecting hub as it once was. As a result, Gulfstream has been exploring other service options but, to date, none have fully materialized. Despite the fact that we selected Gulfstream in July 2007, the carrier has not commenced EAS at any of the four communities. Moreover, the carrier has been unable to provide the Department with a definitive service inauguration date. In the meantime, we have an obligation to relieve Air Midwest of its hold-in obligations as quickly as we can., As a result, we have decided to resolicit proposals.

With specific respect to DuBois, Franklin/Oil City, Greenbrier/ White Sulphur Springs/Lewisburg and Athens, we expect proposals consisting of service with 15‑seat or larger aircraft offering three (DuBois) or two (Franklin/Oil City, Green brier/ White Sulphur Springs/Lewisburg, and Athens) nonstop round trips each weekday to Pittsburgh, Cleveland, Cincinnati, Detroit, Charlotte, Atlanta, Washington, D.C., or another suitable hub with airline connections to the national air transportation system. Such service is generally consistent with what the communities currently receive. When preparing proposals, carriers should be aware that the Department is prohibited from subsidizing service at communities where the per‑passenger subsidy exceeds $200.

By: Todd Homan

February 12, 2008

Re: Athens Airport Authority Comments Regarding Air Midwest

Athens Airport's goal is to provide the best air service possible under the EAS and to be able to eliminate subsidies in the future. It is impossible to meet this goal when the airline consistently provides late and cancelled flights. Air Midwest is not meeting the intent of the EAS order to provide 13 flights per week in Athens. The airline must exhibit concern and initiative on their part to in order to provide the service in which they have been contracted. Anything that the EAS could do to encourage or compel Air Midwest to provide the contracted service would be appreciated.

By: Athens Airport Authority, Gary Blasingame

Order 2008-2-27
OST-2004-17617 - DuBois
OST-1997-2523 - Oil City/Franklin
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2002-11348 - Athens

Issued February 21, 2008 | Served February 26, 2008

Order Resoliciting Proposals

By this order, the DOT extends the service obligation of Air Midwest at the four above-captioned communities, for an additional 30 days, through March 31.

By: Todd Homan

Order 2008-3-21
OST-2002-11348 - Athens
OST-2007-28671 - Macon

Issued March 24, 2008 | Served March 27, 2008

By this order, the Department is re-soliciting proposals from air carriers interested in providing essential air service at Athens and/or Macon, Georgia, for a new two-year term beginning when a replacement carrier inaugurates full service at one or both communities, with or without subsidy. Carriers should file their proposals no later than April 21, 2008.

Because of each community’s traffic generating potential and proximity to Atlanta, we also encourage proposals for more frequent service with smaller aircraft, e.g., three, four, or even more daily round trips with 9- to 15-seat aircraft. All service to Atlanta should be nonstop. We recognize that there is convenient ground transportation to Atlanta at both communities, and therefore, air service to a more-distant hub, such as Memphis or Charlotte, may be more appropriate.

On May 3, 2007, Air Midwest, Inc., a wholly owned subsidiary of Mesa Air Group, Inc., d/b/a US Airways Express filed a 90-day notice of its intent to terminate its subsidized service at Athens, as well as three other communities, effective August 1. In response to the carrier’s notice, the Department issued Order 2007-5-14, May 21, 2007, requiring the carrier to continue to serve Athens and the other communities, and requesting proposals for replacement service. By Order 2007-7-21, July 31, 2007, we selected Gulfstream International Airlines, Inc., the only applicant, to provide subsidized EAS at Athens (with service to Charlotte) and at the other three communities, for a combined annual subsidy of $4,077,792. However, Gulfstream never inaugurated service at Athens, or at the other communities. As a result, by Order 2008-2-11, February 6, 2008, we re-solicited carrier proposals. However, we received none for Athens, so we are here requesting proposals for the third time.

On July 2, 2007, Atlantic Southeast Airlines filed a 90-day notice of its intention to suspend its subsidy-free service at Macon effective October 1, 2007. By Order 2007-6-12, July 13, 2007, we prohibited ASA from suspending service, required it to provide Macon with two daily nonstop round trips to Atlanta with regional jets or ATR-72 turboprop aircraft, the only aircraft in its fleet, and requested proposals from carriers interested in providing replacement service, with subsidy if necessary. That order noted that Macon is a major community of 100,000 residents, 79 miles from the Atlanta airport, and had never previously needed subsidy support from the EAS program. We also previously noted that ASA uses Macon as a maintenance base, and, thus, its schedules have been typically driven by operational needs to move aircraft through its system, rather than to serve or optimize the convenience or transportation needs of passengers. We received no long-term proposals and we solicited proposals two more times and still have not received any. (See Orders 2007-8-30 and 2007-10-20) We are here requesting proposals for the fourth time.

By: Todd Homan

Order 2008-3-34
OST-2004-17617 - DuBois
OST-1997-2523 - Oil City/Franklin
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2002-11348 - Athens

Issued March 28, 2008 | Served April 2, 2008

Re: Mesa Airlines Request for Increased Hold-In Rates

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

By: Todd Homan

OST-2004-17617 - DuBois
OST-1997-2523 - Oil City/Franklin
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2002-11348 - Athens

April 9, 2008

We continue to lose money in these markets. The higher rates reflect the higher fuel prices and other increased unit costs Air Midwest is incurring. We request these rates be made effective immediately.

By: Tom Bacon

OST-2002-11348 - Athens
OST-2007-28671 - Macon

April 14, 2008

DOT Granting Extension of Proposal Due Date

By Order 2008-3-21, March 24, 2008, the Department requested proposals from carriers interested in providing essential air service at Athens and Macon, Georgia, no later than April 21, 2008. In a letter dated April 14. Vintage Props and Jets requested an extension of the due date for filing proposals for an additional two weeks. We are hereby granting the carrier's request and extending the due date for proposals from all interested carriers until May 5, 2008.

By: Dennis DeVany

Order 2008-4-43
OST-2004-17617 - DuBois
OST-1997-2523 - Oil City/Franklin
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2002-11348 - Athens

Issued April 30, 2008 | Served May 5, 2008

Re: Proposal of Pacific Wings

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

By: Todd Homan

OST-2002-11348 - Athens
OST-2007-28671 - Macon

May 5, 2008

In response to Order 2008-3-21, Pacific Wings submits its bid for provision of EAS for Athens and Macon, Georgia.

Service Profile

Frequency

Annual Subsidy

Athens / Charlotte

2 round trips Monday thru Friday
1 round trip Saturday
1 round trip Sunday

$1,436,320.00

Athens / Atlanta

2 round trips Monday thru Friday
1 round trip Saturday
1 round trip Sunday

$1,051,386.00

Macon / Atlanta

4 round trips Monday thru Friday
3 round trips Saturday
3 round trips Sunday

$1,386,306.00

By: Pacific Wings, Greg Kahlstorf

May 5, 2008

Proposals of Vintage Props & Jets

Athens:

Option 1: Option #1 will give Athens, Georgia roughly 4 flights a day to Atlanta Hartsfield-Jackson International Airport, with service reductions on the weekend. First year service pattern will require a subsidy amount of $1,793,189; per departure $718.43; and per passenger $117.39. Second year subsidy requirement is $1,840.277; per departure $737.29; and per passenger $117.03

Option 2: Our second option allows the Department to continue servicing Athens with a minimal frequency to allow connectivity and is focused on maintaining passenger boardings. VPJ is proposing roughly 3 flights a day with service reductions on the weekends (or midweek). First year service patter will require a subsidy amount of $1 ,519,661; per departure $801.10; and per passenger $132.85. Second year subsidy requirement is $1,537,444; per departure $810.48; and per passenger $130.51.

Athens, Georgia Options #1 or Option #2 must be selected along with Option #1, #2, or #3 for Macon, Georgia. All bids are based on 9 passenger Beechcraft King Air 100/200 equipment; with 2 pilots and luggage pod.

Macon:

Option 1: Option #1 will give Macon, Georgia roughly 7 flights a day to Atlanta Hartsfield-Jackson International Airport, with service reductions on the weekend and midweek. Management feels offering "shuttle-type" frequency will build the Macon market & help reduce the overall subsidy per passenger. First year service pattern will require a subsidy amount of $2,521,373; per departure $601.29; and per passenger $98.25. Second year subsidy requirement is $2,679,391; per departure $638.97; and per passenger $101.42.

Option 2: Option #2 will give Macon, Georgia roughly 6 flights a day to Atlanta Hartsfield-Jackson International Airport, with service reductions on the weekend. First year service pattern will require a subsidy amount of $2,317,484; per departure $627.35; and per passenger $104.04. Second year subsidy requirement is $2,448,712; per departure $662.87; and per passenger $106.74.

Option 3: Our third option allows the Department to continue servicing Macon with a minimal frequency to allow connectivity and is focused on maintaining passenger boardings. VPJ is proposing roughly 5 flights a day with service reductions on the weekends (or midweek). First year service patter will require a subsidy amount of $2,013,021 ; per departure $672.08; and per passenger $113.15. Second year subsidy requirement is $2,105,656; per departure $703.01; and per passenger $114.87.

Macon, Georgia Options #1, #2, or #3 must be selected along with Option #1 or #2 for Athens, Georgia. All bids are based on 9 passenger Beechcraft King Air 100/200 equipment; with 2 pilots and luggage pod.

By: Vintage Props & Jets, Nathan Vallier, 754-422-2535, nate@vpj.com

May 5, 2008

Proposal of Wings Air - Bookmarked

Wings Air's proposal requires subsidy for the first year in the amount of $1,615,985 in the Athens-Atlanta market and $542,710 in the Macon-Atlanta market, and for the second year in the amount of $853,823 in the Athens-Atlanta market and zero in the Macon-Atlanta market. These subsidy rates are markedly lower than existing rates, an advantage attributable to "rightsizing" of equipment and type of operation to these very short haul markets.

Concurrently with submission of this EAS proposal, Wings Air has applied to the Department for a Commuter Air Carrier Authorization as required to engage in scheduled service. Since 2005, Wings Air has been based in Lawrenceville, Georgia, and has developed a successful business targeted to charter customers traveling frequently between the Atlanta area and resort destinations such as Charleston/Kiawah Island, South Carolina, Destin, Florida, and St. Simon's Island, Georgia, as well as providing a variety of other charter flights. The carrier will utilize aircraft from its existing fleet of five PA-31-350's to serve Athens and Macon as proposed here.

Wings Air's operating plan will enable it to provide a total of 54 seats per day in each direction spread over six departures in the Athens market (i.e., a total of 12 one-way sectors per day), and a total of 63 seats per day in each direction spread over seven departures in the Macon market (i.e., a total of 14 one-way sectors per day). These service levels are appropriate to the historical passenger data identified by the Department in its order re-soliciting proposals with reasonable provision for traffic growth.

Counsel: Garofalo Goerlich, Aaron Goerlich, 202-776-3974, agoerlich@ggh-airlaw.com

OST-2008-0154 - Wings Air's Athens/Macon-Atlanta Commuter Authority Application

OST-2002-11348 - Athens
OST-2007-28671 - Macon

May 8, 2008

DOT Request for Community Comments of:

My purpose in writing to you at this time is to request any final comments you might have on each carrier's proposals before we submit a recommendation. We request that you review each proposal and submit any comments you may have as soon as possible, but in no case later than May 28.

Wings Air has proposed to serve either Athens or Macon individually, or both communities as a package. In the Athens-Atlanta market, the carrier has proposed to provide six daily nonstop round trips using 9-passenger twin-engine Piper PA-31-350 Chieftain aircraft for a first-year subsidy of $1,615,985 and a second-year subsidy of $853,823. In the Macon-Atlanta market, the carrier has proposed to provide seven daily nonstop round trips for a first year subsidy of $542,710 and subsidy-free for the second year, using the same Piper PA-31-350 aircraft. Wings Air is currently a Part 135 commuter air carrier providing on-demand air taxi service throughout the southeast, and it simultaneously submitted an application with the Department's Air Carrier Fitness Division to for authority provide scheduled passenger service.

Vintage P&J has proposed several options to serve Athens and Macon, all offered to Atlanta and all as an inseparable package. At Athens, Option #1 would provide 25 nonstop round trips each week (four round trips each weekday and 5 round trips each weekend) for a first-year subsidy of $1,793,189 and a second-year subsidy of $1,840,277. Under its Option #2, it would provide Athens 19 nonstop round trips each week (three round trips each weekday and four round trips each weekend) for a first-year subsidy of $1,519,661 and a second-year subsidy of $1,537,444.

At Macon, Vintage P&J proposes three service options. Under Option #1, the carrier proposed to provide 42 nonstop round trips each week to Atlanta ~ seven round trips each weekday and an additional seven round trips either mid-week or over the weekend. The first-year subsidy would be $2,521,373, and second-year subsidy would be $2,679,391. Under Option #2, the carrier would provide 37 nonstop round trips each week to Atlanta - six round trips each weekday and a total of seven round trips either mid-week or over the weekend. The first year subsidy would be $2,317,484, and second-year subsidy would be $2,448,712. Under Option #3, the carrier would provide 30 nonstop round trips a week — five round trips each weekday and a total of five round trips either mid-week or over each weekend. The first-year subsidy would be $2,013,021 and second-year subsidy would be $2,105,656. A portion of Vintage P&J's service under all three Macon Options, consisting of two round trips each week, would be provided to Orlando to rotate their aircraft for maintenance purposes. These round trips would be scheduled to best serve Macon passengers desiring to travel to and from Orlando. Each of the carrier's options reflects greater revenue and higher passenger estimates in the second year, but also reflects significantly higher labor and fuel costs in the second year. The carrier also states that the cost of each of its options has been increased by a City-of-Atlanta-imposed "Demand Management" fee of $353,600 for the use of the Atlanta airport's gates. However, if the carrier is successful in efforts to work with the City to reduce or eliminate the fee, the carrier's subsidy need under each option would be lowered or eliminated accordingly. All of the carrier's service would be provided using pressurized 9-seat Beech King Air 100 or 200 twin-engine, turboprop aircraft with a cargo/luggage pod attached under the fuselage

Air New Mexico has offered three separate options. Under Option #1, the carrier has proposed to provide 12 weekly nonstop round trips (two each weekday and two over the weekend) in the Athens-Atlanta market for an annual subsidy of $1,051,386. The carrier's Option #2 would provide 12 weekly nonstop round trips (two each weekday and two over the weekend) in the Athens-Charlotte market for an annual subsidy of $1,418,320. Under Option #3, the carrier would provide 26 weekly nonstop round trips in the Macon-Atlanta market (four each weekday and six over the weekend) for an annual subsidy of $1,386,306. All service would be provided in 9-passenger Cessna 208B Grand Caravan single-engine, turboprop aircraft with a cargo/luggage pod attached under the fuselage.

By: Dennis DeVay

OST-2002-11348 - Athens
OST-2007-28671 - Macon

May 9, 2008

Re: Comments of Vintage Props & Jets

My carrier submitted our Best and Final offer. Pacific Wings, a veteran to the Program, submitted its best and final offer. We feel that Air Greco, d/b/a Wings Air, has not. In a news story published in the Athens Banner-Herald on May 7th, Wings Air has made the following statement:

"Wings Air officials have Indicated they intend to begin Athens-to-Atlanta shuttle flights as early as June, regardless of whether Wings Air wins the EAS bid."

Vintage Props & Jets is formally protesting the proposal submitted by Air Greco d/b/a Wings Air and seeks a remedy. We are asking the Department to do one of the following:

Seek clarification from the CEO of Air Greco, in writing and placed in the docket, the plans of Wings Air regarding service to Atlanta from Athens & Macon
Remove the Wings Air proposal from consideration for subsidy based on Exhibit A & B
Immediately close the bid and award Wings Air the service for zero subsidies based on the fact they have quoted in the media they are starting service, with, or without subsidy

We are not opposed to Wings Air starting service between Athens/Macon to Atlanta; we are disappointed that they have disregarded the Department's rules. The company either needs to withdraw their bid, the Department needs to withdraw it, or the company should alter their bid to include NO subsidy, as stated they will do according to the newspaper articles & submission to the Air Carrier Fitness Department (EAS revenues are not accounted for in their Economic Fitness Package).

By: Nathan Vallier

Athens Banner-Herald Article - May 7, 2008

OST-2002-11348

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

OST-2002-11348 - Athens
OST-2007-28671 - Macon

May 19, 2008

Reply of Air Greco d/b/a Wings Air to Vintage Props & Jets Letter Dated May 9, 2008

The short answer to VPI's comments is that in April, when Wings Air stated its interest in serving Athens-Atlanta without subsidy, there was no way to know whether another carrier would file an EAS proposal for Athens-Atlanta, Athens-Charlotte, another Athens route, or no Athens route at all. Thus VPJ's attempt to attribute an improper motive to Wings Air is factually unsupportable.

At a deeper and more significant level, however, VPJ's analysis is seriously flawed and raises questions about its concept ofthe public interest. The fundamental problem with VPJ's argument is that it ignores the possibility that a carrier, in this case Wings Air, could have an interest is serving a market on either a subsidized EAS basis or an unsubsidized non-EAS basis. Interest in the two situations is not mutually exclusive, with each triggering its own set offactors for a new entrant to consider.

Most importantly, a carrier selected to provide EAS at a given community is not free to withdraw from that market and redeploy its assets at will; it is legally required to continue providing the community's EAS until such time as a replacement carrier is selected and inaugurates service. The hold-in period can drag on for many months or longer.

The point that appears to have escaped VPJ is that Wings Air is interested in Athens-Atlanta on more than one basis. Wings Air would like to be selected as the subsidized EAS carrier, in which case it will accept and be bound by the countervailing obligations that status imposes. But it has an alternative interest in serving the market on a non-EAS basis, in which case it would receive no subsidy but would be free to reduce or discontinue service at will. Obviously the latter alternative would be more experimental from a marketing standpoint and may prove financially unsustainable ... but that risk is the essence of free market entry.

Counsel: Garofalo Goerlich, Aaron Goerlich, 202-776-3974, agoerlich@ggh-airlaw.com

Essential Air Service at DuBois and Franklin/Oil City, Pennsylvania; Greenbrier/White Sulphur Springs/Lewisburg, West Virginia and Athens, Georgia

Order 2008-5-29
OST-2004-17617 - DuBois
OST-1997-2523 - Franklin/Oil City
OST-2003-15553 - Greenbrier/White Sulphur Springs/Lewisburg
OST-2002-11348 - Athens

Issued May 21, 2008 | Served May 27, 2008