Southern Airways Express, LLC, has lost its bid to overturn the Department of Transportation’s (DOT) decision to award SkyWest Airlines, Inc. the Essential Air Service (EAS) contract for Morgantown, West Virginia. The U.S. Court of Appeals for the District of Columbia Circuit rejected Southern’s petition for review, finding that the DOT’s decision was reasonable and supported by substantial evidence.
The EAS program was created to ensure that small communities continue to receive scheduled air service, even if it’s not profitable for airlines. The DOT provides subsidies to selected carriers to make this happen. Southern Airways had been the EAS carrier for Morgantown since 2016, but its contract expired in late 2024.
The Bidding Process and DOT’s Decision
When the DOT solicited proposals for a new EAS carrier for Morgantown, several airlines, including Southern and SkyWest, submitted bids. The DOT is required to consider several factors when selecting a carrier, including:
* The reliability of the applicant.
* Agreements with larger airlines serving the hub airport.
* The community’s preferences.
* Whether the carrier has a marketing plan.
* The total compensation (subsidy) requested.
After reviewing the proposals, the DOT selected SkyWest for a three-year term. The DOT highlighted SkyWest’s proven reliability, its codeshare agreement with United Airlines (offering passengers access to a large network), and the Morgantown community’s preference for SkyWest’s proposal.
Southern’s Challenge
Southern Airways challenged the DOT’s decision, arguing that it was arbitrary and capricious, not supported by substantial evidence, and exceeded the DOT’s statutory authority. Southern claimed that the DOT didn’t meaningfully analyze and weigh the required factors. Specifically, Southern pointed out that its subsidy request was lower than SkyWest’s.
The Court’s Ruling
The Court of Appeals sided with the DOT. Senior Circuit Judge Edwards, writing for the court, found that the DOT *did* make findings of fact regarding the relevant statutory factors, and these findings were supported by substantial evidence. The court also concluded that the DOT reasonably weighed the evidence before choosing SkyWest.
Jurisdiction Question Resolved
The court first addressed a potential jurisdictional issue. There was a question of whether the Tucker Act, which gives the Court of Federal Claims jurisdiction over certain contract-related matters, might conflict with the Court of Appeals’ jurisdiction in this case. The court clarified that the Tucker Act’s jurisdiction is “exclusive” only to the extent that Congress hasn’t given another court authority to hear the claims. Since the statute explicitly gives the Court of Appeals jurisdiction to review orders like the one in this case, the court determined that it had proper jurisdiction.
Substantial Evidence and Rational Decision-Making
The court emphasized that its role wasn’t to decide whether it agreed with the DOT’s choice, but rather to determine if the agency’s action was reasonable and reasonably explained. The court found that it was.
The court addressed each of the statutory factors. For reliability, the court noted that SkyWest attested to its reliability, and Southern didn’t offer any evidence to the contrary. Regarding the codeshare agreement, SkyWest was the only applicant to offer one. The community clearly preferred SkyWest, and SkyWest included a marketing plan in its proposal. Finally, while SkyWest’s subsidy request wasn’t the lowest, it was within a competitive range.
The court rejected Southern’s argument that the DOT’s reliance on the “totality of the circumstances” was too vague. The court stated that the DOT identified the factors that weighed most heavily in favor of SkyWest, namely reliability, codeshare arrangements, and community preference.
No Exceeding of Statutory Authority
The court also dismissed Southern’s claim that the DOT exceeded its statutory authority by failing to properly consider the required factors. The court found that the DOT did, in fact, make findings of fact for each factor and explained why SkyWest prevailed.
The Bottom Line
The court concluded that the DOT’s decision to select SkyWest as the EAS carrier for Morgantown was reasonable and supported by the evidence. Southern’s petition for review was denied, meaning SkyWest will continue to provide air service to Morgantown under the EAS program.