p

po

tation 

400 71h Street S.W., Room 6401 

Washington, D.C. 20S90 

May 18,2015 

Dear Sirs, 

Enclosed, find Grant Aviation, Inc.'s proposal to provide Essential Air Service between King Salmon, Alaska and South 

Naknek, Alaska for the period June 1S, 2015 through June 14, 2017. 

While our currently filed scheduled service provides three direct non-stop flights weekly between South Naknek and 

King Salmon, the community has adamantly and persistently requested greater frequency of service, complaining that 

three round trips per week does not provide them with adequate access to health care facilities, pharmaceuticals, 

educational opportunities, perishable commodities, commercially available manufactured goods, and general 

commerce. 

In response to the need of the people of South Naknek, Grant Aviation has, for over two years, been operating six flights 

per week, so that travelers from South Naknek may travel to King Salmon or Dillingham for medical appointments, 

shopping, and educational events. Providing six round trips weekly also permits travelers to catch a flight from King 

Salmon to Anchorage without overnighting in King Salmon. We have attempted to provide for their travel needs, but 

are unable to continue our provision of an adequate frequency of safe, reliable service without subsidy. 

Anchorage is the only fully developed population center in our state, to which the citizens of remote communities must 

travel to have access to state of the art medical treatment, higher education, and significant commercial opportunities. 

Further, organizations providing economic and political support for remote Native Alaskan villages are primarily 

headquartered in Anchorage. Without reasonable access to these organizations, the isolated communities have no 

voice in legislative action having dramatic impact upon their communities. 

In accord with the Department's request for proposals, Grant Aviation here proposes four alternate plans for providing 

Essential Air Service to South Naknek. The first provides for a minimal level of service of three direct nonstop round 

trips weekly between South Naknek and King Salmon, with alternate plans providing either four, five, or, as we have 

been conducting without subsidy, six direct, nonstop flights per week as required to provide this isolated community 

with adequate transportation service. 

The primary aircraft types to be utilized for the proposed service are either a Cessna C-207 or Gipps Aero GA-8, carrying 

six or seven passengers respectively. Both plane types are single engine, capable of providing transportation in VFR 

conditions under Part 13S. 

This proposal provides for passenger transport as well as handling and interim storage of mail and freight between King 

Salmon and the village of South Naknek. 
,

4 $258,61S.34 $50,404.28 $208,211.06 

5 $320,902.14 $S0,404.28 $270,497.86 

6 $383,188.93 $50,40S.28 $332,783.65 

Detailed cost sheets follow for each of the above proposed frequencies. 

We look forward to working with you in providing transportation service to the people of South Naknek. 

If you require further information, I may be contacted by phone at 907 529-6999, or by e-mail at 

bmcglasson@flygra nt.com. 

R. Bruce McGlasson 

CEO 

Grant Aviation, Inc. 
Annual OIW Passengers expected 

OW fare 

Annual maillbs expected 

Current mail rate I lb 

Annual Freight lbs expected 

Current Freight rates I lb 

Expected Revenue Derived from Operations 

190 

$ 94.88 

48,600 

$ O.S378 

12,000 

$ O.S2 

Passenger Fares $ 

Annual Revenue 

18,027.20 

26,137.08 

6,240.00 

Mail Revenue $ 

Freight Revenue $ 

Total Annual Revenue from Scheduled Operations $ 50,404.28 

Expected Direct Expense of Operations 

Fuel- LL100 Aviation Gasoline 

Aircraft lease expense 

Maintenance (engine&prop +labor+parts) 

Pilot labor, inclusive of tax and benefits 

Aviation Insurance annual hull and liability 

Expected Indirect Expense of Operations 

Hanger lease & ramp ac services 

Ticketing & ground service 

Total Annual Direct Expense 

Freight & mail Handling AKN, South Naknek 

Pilot housing + utility 

Sum of Direct and Indirect Expense 

Add Burden 

subtotal 

Add Profit@ S.O% 

Total Annual Indirect Expense 

Annual Direct Exp. 

$ 7,7S7.10 

$ 33,171.43 

$ 10,099.44 

$ 46,928.S7 

$ S,892.86 

$ 103,849.40 

Annual Indirect Exp. 

$ 20,S71.43 

$ 6,240.00 

$ 7,272.00 

$ 12,8S7.14 

$ 46,940.57 

$ 

$ 

$ 

$ 

1S0,789.97 

36,189.59 

186,979.S6 

9,348.98 

Total Annual Economic Cost $ 196,328.54 

Less Annual Revenue Derived from Scheduled Operations $ (S0,404.28) 

Annual Subsidy Required $ 145,924.26 
Annual OIW Passengers expected 

OW fare 

Annual maillbs expected 

Current mail rate I lb 

Annual Freight lbs expected 

Current Freight rates I lb 

Expected Revenue Derived from Operations 

190 

$ 94.88 

48,600 

$ 0.5378 

12,000 

$ 0.52 

Passenger Fares $ 

Annual Revenue 

18,027.20 

26,137.08 

6,240.00 

Mail Revenue $ 

Freight Revenue $ 

Total Annual Revenue from Scheduled Operations $ 50,404.28 

Expected Direct Expense of Operations 

Fuel - LL100 Aviation Gasoline 

Aircraft lease expense 

Maintenance (engine&prop +labor+parts) 

Pilot labor, inclusive oftax and benefits 

Aviation Insurance annual hull and liability 

Expected Indirect Expense of Operations 

Hanger lease & ramp ac services 

Ticketing & ground service 

Total Annual Direct Expense 

Freight & mail Handling AKN, South Naknek 

Pilot housing + utility 

Sum of Direct and Indirect Expense 

Add Burden 

subtotal 

Add Profit @ 5.0% 

Total Annual Indirect Expense 

Annual Direct Exp. 

$ 10,342.80 

$ 44,228.57 

$ 13,46S.92 

$ 62,571.43 

$ 7,857.14 

$ 138,465.86 

Annual Indirect Exp. 

$ 27,428.57 

$ 8,320.00 

$ 7,272.00 

$ 17,142.86 

$ 60,163.43 

$ 

$ 

$ 

$ 

198,629.29 

47,671.03 

246,300.32 

12,31S.02 

Total Annual Economic Cost $ 258,615.34 

Less Annual Revenue Derived from Scheduled Operations $ (S0,404.28) 

Annual Subsidy Required $ 208,211.06 
Annual OIW Passengers expected 

OW fare 

Annual maillbs expected 

Current mail rate I lb 

Annual Freight lbs expected 

Current Freight rates I lb 

Expected Revenue Derived from Operations 

$ 

$ 

$ 

190 

94.88 

48,600 

0.5378 

12,000 

0.52 

Passenger Fares $ 

Annual Revenue 

18,027.20 

26,137.08 

6,240.00 

Mail Revenue $ 

Freight Revenue $ 

Total Annual Revenue from Scheduled Operations $ 50,404.28 

Expected Direct Expense of Operations 

Fuel- LL100 Aviation Gasoline 

Aircraft lease expense 

Maintenance (engine&prop +labor+parts) 

Pilot labor, inclusive of tax and benefits 

Aviation Insurance annual hull and liability 

Expected Indirect Expense of Operations 

Hanger lease & ramp ac services 

Ticketing & ground service 

Total Annual Direct Expense 

Freight & mail Handling AKN, South Naknek 

Pilot housing+ utility 

Sum of Direct and Indirect Expense 

Add Burden 

subtotal 

Add Profit @ 5.0% 

Total Annual Indirect Expense 

Annual Direct Exp. 

$ 12,928.50 

$ SS,28S.71 

$ 16,832.40 

$ 78,214.29 

$ 9,821.43 

$ 173,082.33 

Annual Indirect Exp. 

$ 34,285.71 

$ 10,400.00 

$ 7,272.00 

$ 21,428.57 

$ 73,386.29 

$ 

$ 

$ 

$ 

246,468.61 

59,152.47 

305,621.08 

15,281.05 

Total Annual Economic Cost $ 320,902.14 

Less Annual Revenue Derived from Scheduled Operations $ (50,404.28) 

Annual Subsidy Required $ 270,497.86 
Annual 0/W Passengers expected 

OW fare 

Annual maillbs expected 

Current mail rate /lb 

Annual Freight lbs expected 

Current Freight rates /lb 

Expected Revenue Derived from Operations 

Passenger Fares 

Mail Revenue 

$ 

$ 

$ 

$ 

$ 

190 

94.88 

48,600 

0.5378 

12,000 

0.52 

Freight Revenue $ 

Annual Revenue 

18,027.20 

26,137.08 

6,240.00 

Total Annual Revenue from Scheduled Operations $ 50,404.28 

Expected Direct Expense of Operations 

Fuel - ll100 Aviation Gasoline 

Aircraft lease expense 

Maintenance (engine&prop +labor+parts) 

Pilot labor, inclusive of tax and benefits 

Aviation Insurance annual hull and liability 

Expected Indirect Expense of Operations 

Hanger lease & ramp ac services 

Ticketing & ground service 

Total Annual Direct Expense 

Freight & mail Handling AKN, South Naknek 

Pilot housing+ utility 

Sum of Direct and Indirect Expense 

Add Burden 

subtotal 

Add Profit @ S.O% 

Total Annual Indirect Expense 

Annual Direct Exp. 

$ 15,514.20 

$ 66,342.86 

$ 20,198.88 

$ 93,857.14 

$ 11,785.71 

$ 207,698.79 

Annual Indirect Exp. 

$ 41,142.86 

$ 12,480.00 

$ 7,272.00 

$ 25,714.29 

$ 86,609.14 

$ 

$ 

$ 

$ 

294,307.94 

70,633.90 

364,941.84 

18,247.09 

Total Annual Economic Cost $ 383,188.93 

less Annual Revenue Derived from Scheduled Operations $ (50,404.28) 

Annual Subsidy Required $ 332,784.65