## Before the United States Department of Transportation 

# Washington, DC

February 5, 2014

Essential Air Service at: IRONWOOD, MICHIGAN/ASHLAND, WISCONSIN Docket OST-1996-1266 THIEF RIVER FALLS, MINNESOT A Docket OST-2001-10642 WATERTOWN, SOUTH DAKOT A Docket OST-2001-10644 under 49 U.S.C. 41731 et.seq.

Great Lakes has recently been forced to suspend service at Ironwood, MI and Thief River Falls, MN due to the severe industry-wide pilot shortage and its relative acute impact on Great Lakes. It is anticipated, pending approval by the FAA, that Great Lakes will be able to rebuild its pilot staff whereby pilots will be able operate Beech 1900D aircraft in a nine seat configuration. The proposed service to these communities assumes that we will have the necessary FAA approval and we will have rebuilt our availability of qualified pilots to crew the Beech 1900D aircraft in a nine seat configuration. It would be expected that the re-installation of the additional 10 seats, allowing for utilization of all 19 seats, would occur as soon as pilot experience allows for the issuance of restricted ATP certificates for First Officers. This document contains the response of Great Lakes Aviation, Ltd. to Order Requesting Proposals 2013-12-14. The proposed service is being offered with local service marketed and priced utilizing the Great Lakes (ZK) reservations system which includes customer ticket purchasing capability on both the Great Lakes' web site and on numerous web booking engines. Additionally, Great Lakes and Delta Airlines have formed a partnership to enable the sale of Great Lakes' passenger segments on the Delta website as well as, providing the passenger with through check-in and seamless baggage transfers. The proposal offers roundtrip service to our Minneapolis/St. Paul hub utilizing Beech 1900D aircraft. As an alternative to Minneapolis service, for Thief River Falls and Watertown, Great Lakes is also proposing one-stop service to our Denver hub with connecting services to our code-share partners United Airlines and Frontier Airlines. In addition, Great Lakes maintains interline ticketing and baggage agreements with the majority of the other carriers serving Denver and Minneapolis/St. Paul, including interline e-ticketing agreements with American Airlines, Delta Airlines, Frontier Airlines and United Airlines. All of which will offer the passenger maximum access to the domestic and international air transportation system.The recently implemented regulatory requirements have dramatically accelerated a long anticipated pilot shortage, causing nationwide damage to small community air service. The unintended consequences of the Congressionally mandated regulatory changes will require commitments to be made to address the long-term impact on the airline industry as a whole. Great Lakes’ stands ready to participate in creative solutions to assist small communities in their efforts to remain in the National Air Transportation System.

Michael Matthews

Great Lakes Airlines 1022 Airport Parkway (307) 432-7000 Questions and comments may be referred to:

Chief Financial Officer

Cheyenne, WY 82001Table of Contents:ProposalSubsidy PassengersAverageNumberService Point(s) Hub(s) Served Round Trips Equipment Requirement ForecastFare1Ironwood, Michigan MSP 21900D$2,152,4265,000$88.752Thief River Falls, Minnesota MSP and/or DEN 21900D$2,428,7504,750$117.78or 2 RT one-stops to DEN in 30 seat EMB-120 aircraft3Watertown, South Dakota MSP and/or DEN 31900D$2,847,2849,000$97.75or 2 RT one-stops to DEN in 30 seat EMB-120 aircraft

# Great Lakes Aviation, Ltd. Annual Compensation Requirements for Essential Air Service at 

### Ironwood, Michigan to Minneapolis/St. Paul ( MSP ) Two Roundtrips - B1900

98% completion factor Departures: 1,227 Block Hours: 1,227 Revenue Passenger Miles: 935,000 Available Seat Miles: 4,359,531

Operating Revenues: Passenger: IWD-MSP 5,000 psgrs at $88.75 $443,750

Other: (at 0.62% of passenger revenue) $2,751 Total Operating Revenues: $446,501

Operating Expenses: Direct: Aircraft and Hull Insurance $365,710 Fuel and Oil $704,278 Flying Operations $242,013 Maintenance $430,051 Total Direct Expenses: $1,742,053 Total Indirect Expenses: $733,116 Total Operating Expenses: $2,475,169 Operating Loss ($2,028,668) Profit Element (5.0% of Total Operating Expenses) $123,758 Annual Compensation Requirement: $2,152,426 No Upline Scheduling Restrictions

# Great Lakes Aviation, Ltd. Annual Compensation Requirements for Essential Air Service at 

### Thief River Falls, Minnesota to Minneapolis/St. Paul ( MSP ) or Denver (DEN) Two Roundtrips - B1900 to MSP or Two Roundtrips one-stop to DEN in 30 Seat Aircraft 98.0% completion factor Departures: 1,227 One-stop departures to be performed by EMB-120 30 seat aircraft if option is prefered by community 1,227 Operating Revenues: Passenger: TVF-MSP 4,750 psgrs at $117.78 $559,455

Other: (at 0.62% of passenger revenue) $3,469 Total Operating Revenues: $562,924

Operating Expenses: Direct: Aircraft and Hull Insurance $365,710 Fuel and Oil $892,456 Flying Operations $312,625 Maintenance $491,903 Total Direct Expenses: $2,062,694 Total Indirect Expenses: $786,519 Total Operating Expenses: $2,849,213 Operating Loss ($2,286,289) Profit Element (5.0% of Total Operating Expenses) $142,461 Annual Compensation Requirement: $2,428,750 No Upline Scheduling Restrictions

# Great Lakes Aviation, Ltd. Annual Compensation Requirements for Essential Air Service at 

### Watertown, South Dakota to Minneapolis/St. Paul ( MSP ) and/or Denver ( DEN )

Three Roundtrips - B1900 to MSP or Two Roundtrips to MSP and One Roundtrip one-stop to DEN or Two Roundtrips one-stop to DEN in 30 Seat Aircraft 98.0% completion factor Departures to be performed by Beech 1900 schedules 1,840 (Extra B1900 Round Trip to Denver would be flown on weekends not included in base subsidy but would be subsidy eligible) One-stop departures to be performed by EMB-120 30 seat aircraft if option is prefered by community 1,227 Operating Revenues: Passenger: ATY 9,000 psgrs at $97.75 $879,750

Other: (at 0.62% of passenger revenue) $5,454 Total Operating Revenues: $885,204

Operating Expenses: Direct: Aircraft and Hull Insurance $365,710 Fuel and Oil $1,076,204 Flying Operations $438,662 Maintenance $711,245 Total Direct Expenses: $2,591,821 Total Indirect Expenses: $962,930 Total Operating Expenses: $3,554,751 Operating Loss ($2,669,547) Profit Element (5.0% of Total Operating Expenses) $177,738 Annual Compensation Requirement: $2,847,284 No Upline Scheduling Restrictions*** [IWD] IRONWOOD, MI ***-------------------- D E P A R T U R E S -------------------- -------------------- A R R I V A L S --------------------FLT DPT ARRTO EQP FREQ FLT EQP FREQ FROM DPTARR7194 BE1 123456 MSP 830 9307194 945 1045 MSP BE1 1234567195 BE1 12345 7 MSP 1515 16157195 1630 1730 MSP BE1 12345 7*** [TVF] THIEF RIVER FALLS, MN ***-------------------- D E P A R T U R E S -------------------- -------------------- A R R I V A L S --------------------FLT DPT ARRTO EQP FREQ FLT EQP FREQ FROM DPTARR7141 730 845 MSP BE1 1234567148 BE1 123456 MSP 1330 14507148 1510 1625 MSP BE1 12345 77147 BE1 12345 7 MSP 1800 1920*** [ATY] WATERTOWN, SD ***-------------------- D E P A R T U R E S -------------------- -------------------- A R R I V A L S --------------------FLT DPT ARRTO EQP FREQ FLT EQP FREQ FROM DPTARR7245 705 815 MSP BE1 1234567248 BE1 123456 MSP 1029 11447237 1325 1435 MSP BE1 12345 77246 BE1 12345 7 MSP 1830 19457248 1154 1339 DEN BE1 Dailyonestop 7237 BE1 Daily DEN 930 1307onestop