Southern Airways Express, LLC v. DOT

CourtCourt of Appeals for the D.C. Circuit
DecidedNovember 14, 2025
Docket24-1358
StatusPublished

This text of Southern Airways Express, LLC v. DOT (Southern Airways Express, LLC v. DOT) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southern Airways Express, LLC v. DOT, (D.C. Cir. 2025).

Opinion

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 19, 2025 Decided November 14, 2025

No. 24-1358

SOUTHERN AIRWAYS EXPRESS, LLC, PETITIONER

v.

UNITED STATES DEPARTMENT OF TRANSPORTATION AND SEAN P. DUFFY, IN HIS OFFICIAL CAPACITY AS SECRETARY OF TRANSPORTATION, RESPONDENTS

On Petition for Review of an Order of the U.S. Department of Transportation

Kenneth S. Nankin argued the cause and filed the briefs for petitioner.

Erin D. Hendrixson, Senior Trial Attorney, U.S. Department of Transportation, argued the cause for respondents. With her on the briefs were Robert B. Nicholson and Steven J. Mintz, Attorneys, U.S. Department of Justice, Gregory D. Cote, Acting General Counsel, U.S. Department of Transportation, Charles E. Enloe, Assistant General Counsel, U.S. Department of Transportation, and Peter J. Plocki, Deputy Assistant General Counsel, U.S. Department of Transportation. 2 Before: HENDERSON and RAO, Circuit Judges, and EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge EDWARDS.

EDWARDS, Senior Circuit Judge: In 1978, Congress passed the Airline Deregulation Act, Pub. L. No. 95-504, amending the Federal Aviation Act of 1958, Pub. L. No. 85-726, to significantly limit federal regulation of airline prices, routes, and services. However, this deregulatory legislation raised concerns that “communities with relatively low passenger levels would lose service as carriers shifted their operations to serve larger and often more profitable markets.” RACHEL Y. TANG, CONG. RSCH. SERV., R44176, ESSENTIAL AIR SERVICE (2018). To address this issue, Congress enacted the Essential Air Service (“EAS”) program, 49 U.S.C. §§ 41731-46, “to ensure that small communities that were served by certificated air carriers before deregulation would continue to receive scheduled passenger service, with subsidies if necessary.” Id.

This case concerns a challenge to an action taken by the U.S. Department of Transportation (the “Department” or “DOT”) to implement the terms of the EAS program. In 2024, DOT selected SkyWest Airlines, Inc. (“SkyWest”), from among several applicants, to receive a federal subsidy to provide EAS for Morgantown, West Virginia. Order Selecting Air Carrier (“Final Order”), DOT Order 2024-9-18 (Sep. 20, 2024), reprinted in Joint Appendix (“J.A.”) 106-15. Southern Airways Express, LLC (“Southern”) now petitions for review of DOT’s Final Order selecting SkyWest. Southern is a commuter airline that served as the EAS carrier for Morgantown from November 2016 until the commencement of SkyWest’s term in December 2024. 3 In considering the applications from carriers seeking to serve as the Morgantown EAS provider, the Department weighed five statutory factors: (1) the reliability of the applicant; (2) the types of agreements “the applicant has made with a larger air carrier serving the hub airport”; (3) the community’s preferences; (4) whether the carrier has a marketing proposal; and (5) “the total compensation proposed by the air carrier.” 49 U.S.C. § 41733(c)(1)(A)-(D), (F). On September 20, 2024, after reviewing the competing applications, the Department selected SkyWest as the EAS carrier for Morgantown for a three-year term from November 1, 2024 through October 31, 2027. In support of its decision, DOT explained that “SkyWest’s proposal aligns well with the air carrier selection criteria required for evaluation,” finding that “SkyWest has a proven record of providing reliable EAS in markets around the country” and that its “codeshare agreement with United Airlines will give passengers broad access to the national air transportation system via United’s extensive domestic and international network.” Final Order at 4, J.A. 109.

Following the issuance of DOT’s Final Order, Southern filed this action, pursuant to 49 U.S.C. § 46110, against the Department and the Secretary of Transportation to challenge DOT’s decision in favor of SkyWest. Southern has asserted a cause of action under the Administrative Procedure Act (“APA”), 5 U.S.C. § 706(2), claiming variously that the Department’s Final Order should be set aside because it is arbitrary and capricious, not supported by substantial evidence, and in excess of statutory authority. In support of these claims, Southern has argued that the Department failed to demonstrate that it had meaningfully analyzed and weighed the applicable statutory decisional factors. 4 As a threshold matter, we agree with the parties that we have jurisdiction to review Southern’s petition pursuant to the specific grant of jurisdiction to this court in 49 U.S.C. § 46110(a). The statute says, “a person disclosing a substantial interest in an order issued by the Secretary of Transportation . . . may apply for review of the order by filing a petition for review in the United States Court of Appeals for the District of Columbia Circuit . . . not later than 60 days after the order is issued.” Southern’s request for review of DOT’s contested Final Order in favor of SkyWest, filed on November 15, 2024, was clearly a timely petition for review with respect to a matter covered by the explicit terms of § 46110(a).

On the merits, we are unpersuaded by Southern’s arguments. The record in this case confirms that DOT made findings of fact with respect to the applicable statutory factors governing the EAS carrier selection process. Those findings are supported by substantial evidence in the administrative record. It is also clear that DOT reasonably weighed the evidence before reaching a judgment in favor of SkyWest to serve as the EAS carrier for Morgantown. In sum, DOT’s findings and analysis in the Final Order are sufficient for this court to discern its reasoning and comprehend the permissible bases for its selection of SkyWest. We thus have no grounds upon which to overturn DOT’s action.

Accordingly, for the reasons explained below, we deny Southern’s petition for review. 5 I. BACKGROUND

A. Essential Air Service Program

As explained above, the EAS program ensures that eligible communities continue to receive a minimum level of scheduled air service even if they do not generate sufficient demand for carriers to cover the cost of servicing these communities. See Mesa Air Grp. v. DOT, 87 F.3d 498, 500 (D.C. Cir. 1996). The EAS program thus authorizes the Department to award federal subsidies to air carriers that are selected to provide essential air service to eligible communities. 49 U.S.C. § 41733(c).

EAS subsidies are awarded through a competitive bidding process, which allows the Department to keep subsidy costs in check and to switch carriers, when appropriate. Essential Air Service, U.S. DEP’T OF TRANSP. (Nov. 4, 2024), https://www.transportation.gov/policy/aviation-policy/small- community-rural-air-service/essential-air-service. When selecting among air carriers that are competing for an EAS subsidy, the Department must weigh, “among other factors,” five statutory factors, as follows:

First, “the demonstrated reliability of the applicant in providing scheduled air service.” 49 U.S.C. § 41733(c)(1)(A).

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Southern Airways Express, LLC v. DOT, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-airways-express-llc-v-dot-cadc-2025.