Order: 2011-7-12

Served: July 27, 2011

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 27th day of July, 2011

Essential Air Service at

HYDABURG, ALASKA DOCKET DOT-OST-1999-6245

under 49 U.S.C. 41731 et seq.

ORDER RE-SELECTING CARRIER

Summary

By this order, the Department is re-selecting Venture Travel, LLC, operating as Taquan Air 

Service (Taquan Air), to provide essential air service (EAS) at Hydaburg, Alaska. Taquan Air

will provide three weekly nonstop round trips to Ketchikan using 6-seat de Havilland Canada 

DHC-2 Beaver aircraft for a four-year contract period beginning November 1, 2011, through 

October 31, 2015, for an annual subsidy of $151,773.

1

Background

By Order 2007-10-12, October 16, 2007, the Department selected Taquan Air to provide EAS at 

Hydaburg for the contract period from November 1, 2007, through October 31, 2011, for an 

annual subsidy of $86,755 for three weekly nonstop round trips to Ketchikan.

As the end of the contract was approaching, we issued Order 2011-5-9, May 9, 2011, requesting 

proposals from carriers interested in providing EAS at the community, for a term beginning 

November 1, 2011. In response to that order, we received a proposal from the incumbent

carrier, Taquan Air.

 1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds.
- 2 -

The carrier’s complete proposal and community comments may be accessed online at 

http://www.regulations.gov/ by entering Docket number DOT-OST-1999-6245 in the search 

block, so we will only briefly summarize the proposals below. 

Proposal of Taquan Air

Taquan Air proposed three weekly nonstop round trips to Ketchikan using 6-seat de Havilland 

Canada DHC-2 Beaver aircraft for an annual subsidy of $145,809 for a two-year term, or 

$151,773 for a four-year term.

Community Comments

Mayor Anthony Christianson submitted a resolution by the City of Hydaburg, dated June 7, 

2011, supporting Taquan Air’s four-year proposal, stating that the carrier’s three weekly flights 

“are lifelines for the community,” adding that “Taquan has done an excellent job of maintaining 

schedules, sometimes in challenging weather conditions...” 

Decision

Given that Taquan Air was the only carrier to submit a proposal to provide EAS at Hydaburg, 

and given that the community fully supports the carrier’s proposal, it is clear in this case that the 

decision points to the re-selection of Taquan Air. Taquan Air has served Hydaburg reliably for a 

number of years and it is an established EAS carrier. As between Taquan Air’s two-year or fouryear proposal, the community supports the four-year option, and we see no reason not to select 

the four-year option for $151,773. We find the subsidy and service levels proposed by Taquan 

Air to be reasonable. 

We shall make this selection of Taquan Air at Hydaburg contingent upon the Department’s 

receiving properly executed certifications from the carrier that it is in compliance with the 

Department’s regulations regarding drug-free workplaces and nondiscrimination, as well as the 

regulations concerning lobbying activities.

Carrier Fitness

49 U.S.C. 41737(b) and 41738 require that we find an air carrier fit, willing, and able to provide 

reliable service before we may subsidize it to provide essential air service. Taquan Air is subject 

to the Department’s continuing fitness requirements, and no information has come to our 

attention that would cause us to question the carrier's fitness at this time. We have contacted the 

Federal Aviation Administration, and it has raised no concerns that would negatively affect our 

fitness findings. We therefore conclude that the carrier is reliable and remains fit to conduct the 

operations proposed here.

This order is issued under authority delegated in 49 CFR 1.56a(f).

ACCORDINGLY,

1. We select Venture Travel, LLC, operating as Taquan Air Service, to provide essential air 

service at Hydaburg, Alaska, and establish an annual subsidy rate of $151,773, as described in 

Appendix C; 
- 3 -

2. We direct Venture Travel, LLC, to retain all books, records, and other source and summary 

documentation to support claims for payment, and to preserve and maintain such documentation 

in a manner that readily permits its audit and examination by representatives of the Department. 

Such documentation shall be retained for seven years or until the Department indicates that the 

records may be destroyed, whichever comes first. Copies of flight logs for aircraft sold or 

disposed of must be retained. The carrier may forfeit its compensation for any claim that is not 

supported under the terms of this order;

3. We find that Venture Travel, LLC, continues to be fit, willing and able to operate as a 

certificated carrier, and capable of providing reliable essential air service at Hydaburg;

4. This docket will remain open pending further Department action; and

5. We will serve copies of this order on the Mayor of Hydaburg, the Alaska Department of 

Transportation, and Venture Travel, LLC.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available at

http://www.regulations.gov
Appendix A

AREA MAP

 
Appendix B

Page 1 of 2

ESSENTIAL AIR SERVICE AT HYDABURG, AK

OPERATIONS DHC-2 A/C Page 1 of 2

MARKET DEPS/YEAR AVG BLOCK TOTAL BLOCK

WFB-HYG 156 32 4992

HYG-WFB 156 32 4992

TOTAL 312 9984

Block Hours 166.4

EXPENSES

Item Units YE 12/09 - 3/11 2012 Unit Costs 2012 Costs 2013 Costs 2014 Costs 2015 Costs

Pilot & CoPilot 166.4 $194.51 $206.18 $34,308.45 $35,680.79 $37,108.02 $38,592.34

Fuel & Oil 166.4 $187.29 $198.53 $33,034.96 $34,356.36 $35,730.61 $37,159.84

All Insurance 166.4 $41.60 $44.10 $7,337.57 $7,631.08 $7,936.32 $8,253.77

Maintenance 166.4 $216.16 $229.13 $38,127.17 $39,652.25 $41,238.34 $42,887.88

Depreciation 166.4 $84.71 $89.79 $14,941.49 $15,539.15 $16,160.71 $16,807.14

TOTAL DIRECTS $724.27 $767.73 $127,749.64 $132,859.63 $138,174.01 $143,700.97

Traffic Related 312 $66.74 $70.74 $22,072.25 $22,955.14 $23,873.35 $24,828.28

Departure Related 312 $94.23 $99.88 $31,163.75 $32,410.30 $33,706.71 $35,054.98

TOTAL INDIRECTS $160.97 $170.63 $53,236.00 $55,365.44 $57,580.06 $59,883.26

SUBTOTAL $180,985.64 $188,225.06 $195,754.07 $203,584.23

CAPACITY RELATED 15.00% $27,147.85 $28,233.76 $29,363.11 $30,537.63

TOTAL SYSTEM $208,133.48 $216,458.82 $225,117.18 $234,121.86

Specific Ground Support

Vehicle Insurance $1,400.00 $1,456.00 $1,514.24 $1,574.81 $1,637.80

Vehicle Maintenance $2,700.00 $2,808.00 $2,920.32 $3,037.13 $3,158.62

Vehicle Fuel $3,300.00 $3,432.00 $3,569.28 $3,712.05 $3,860.53

TOTAL HYG VEHICLE $7,400.00 $7,696.00 $8,003.84 $8,323.99 $8,656.95

TOTAL OP. EXPENSES $215,829.48 $224,462.66 $233,441.17 $242,778.82

PROFIT @ 5% MARKUP $10,791.47 $11,223.13 $11,672.06 $12,138.94

TOTAL ALL EXPENSES $226,620.96 $235,685.80 $245,113.23 $254,917.76
Appendix B

 Page 2 of 2

ESSENTIAL AIR SERVICE AT HYDABURG, AK

TRAFFIC per Blk Hr Sched Traffic 2012 Proj. Yield Page 2 of 2

 PASSENGERS 0.191 40 $110.24 $4,379.61 $4,554.80 $4,736.99 $4,926.47

 FREIGHT 52.1 10837 $0.84 $9,074.74 $9,437.73 $9,815.23 $10,207.84

 MAIL 275 57200 $1.23 $70,202.15 $73,010.24 $75,930.65 $78,967.88

TOTAL $83,656.51 $87,002.77 $90,482.88 $94,102.19

SUBSIDY NEED $142,964 $148,683 $154,630 $160,816

SUBSIDY NEED/DEPARTURE $458.22 $476.55 $495.61 $515.43
 Appendix C

Venture Travel, LLC

Essential Air Service to be Provided at Hydaburg, Alaska

Effective Period: November 1, 2011, through October 31, 2015

Scheduled Service: Three weekly nonstop round trips to Ketchikan

Aircraft: 6-seat de Havilland Canada DHC-2 Beaver

Rate per Eligible Flight: $486;

1

Weekly Ceiling: $2,9192

Note: The carrier understands that it may forfeit its compensation for any flights that it does not operate in 

conformance with the terms and stipulations of the rate order, including the service plans outlined in the order and 

any other significant elements of the required service, without prior approval. The carrier understands that an 

aircraft take-off and landing at its scheduled destination constitutes a completed flight; absent an explanation 

supporting subsidy eligibility for a flight that has not been completed, such as certain weather cancellations, only 

completed flights are considered eligible for subsidy. In addition, if the carrier does not schedule or operate its 

flights in full conformance with the order for a significant period, it may jeopardize its entire subsidy claim for the 

period in question. If the carrier contemplates any such changes beyond the scope of the order during the applicable 

period of these rates, it must first notify the Office of Aviation Analysis in writing and receive written approval from 

the Department to be ensured of full compensation. Should circumstances warrant, the Department may locate and 

select a replacement carrier to provide service on these routes. The carrier must complete all flights that can be 

safely operated; flights that overfly points for lack of traffic will not be compensated. In determining whether 

subsidy payment for a deviating flight should be adjusted or disallowed, the Department will consider the extent to 

which the goals of the program are met and the extent of access to the national air transportation system provided to 

the community.

If the Department unilaterally, either partially or completely, terminates or reduces payments for service or changes 

service requirements at a specific location provided for under this order, then, at the end of the period for which the 

Department does make payments in the stipulated amounts or at the stipulated service levels, the carrier may cease 

to provide service to that specific location without regard to any requirement for notice of such cessation. Those 

adjustments in the levels of subsidy and/or service that are mutually agreed to in writing by the Department and the 

carrier do not constitute a total or partial reduction or cessation of payment.

Funds are not currently available for performance under this order beyond September 30, 2011. The Department’s 

obligation for performance under this order beyond September 30, 2011, is subject to the availability of appropriated 

funds from which payment for services can be made. No legal liability on the part of the Government for any 

payment may arise for performance under this order beyond September 30, 2011, until funds are made available to 

the Department for performance. If funds are not made available for performance beyond September 30, 2011, the 

Department will provide notice in writing to the carrier.

Subsidy contracts are subject to, and incorporate by reference, relevant statutes and Department regulations, as they 

may be amended from time to time. However, any such statutes, regulations, or amendments thereto shall not 

operate to controvert the foregoing paragraph.

All claims for payment must be submitted within 60 days of the last day of service provided under this order.

 1 Annual compensation of $151,773 divided by 312 annual departures (6 weekly departures x 52 weeks x 100 

percent completion).

2 6 arrivals and departures per week multiplied by $486 per flight.