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# O \MSPORWIO N ^ ^ ^ i-L c nx- i 2 •r T OPERATION S
u s
. Departmen t o f 120 0 Ne w jerse y Avenue , S E '**'"*POrtatk» n 7i;r i -i^f j | q P 3 : hl j Washington , D C 2059 0 Offic e o f th e Secretar

y o f Transportatio n 

### Mar k Liiike n Januar y 13 , 201 1 Statewid e Aviatio n Planner Departmen t

of Transportatio n andPubli c Facilitie s 411 1 Aviatio n Ave

. P O Box 19690 0 Anchorage , AK

9951 9 Dea r Mr

. Luiken : A s yo u know , Alask aAirline s provide s subsidize dai r servic e under

th e essentia l ai r

servic e (EAS ) programa

t Cordova , Gustavus , Petersburg , Wrangell , andYakutat , Alaska

. B y Order 2010-11-2 6 th e Department requeste d"bes t

an dfinal" proposal s t o serv e al l fiv e communities , andAlask aAirline s wa s th e onl y carrie r t o apply

. Th e Department' s curren t contrac t wit h Alask aAirline s call s fo

r a n annual subsidy of

$5,793,20 1 t o provid e Cordov aan d Yakuta t wit h on e dail y roun dtri p ove r aroutin g Anchorage-Cordova-Yakutat-Juneau , a s wel l as on e roun dtri p pe

r da y betwee n Gustavu s an dJunea u fo r athirteen-wee k

pea k period ; a t Petersbur g an dWrangel l th e rate i s $1,347,19 5 fo r on e dail y roun dtri p over

aroutin g Juneau

Petersburg-Wrangell-Ketchikan yea r round

. Currently , th e combine dannual subsidy fo r al l five communitie s i s $7,140,396

. M y purpos e in writin g you a t thi s tim e i s to infor

myo u of th e result s o f

th e carrier' s servic e and subsidy proposal before w e submi t arecommendatio n on th e carrie r selectio n issu e to th e Assistan t Secretar y fo r Aviatio n andInternational Affair s fo r decision

. Sinc e there are n o other option s befor

e th e Departmen t

a t thi s time , yo

u nee dno t

respon dto thi s letter

. However , w e wante dto giv e yo

u th e opportunity to submi t an y comment s i

f you wish

. Alask aAirline s request s $8,262,93 8 annual subsidy —$1,122,54 2 more tha n th e curren t

rate , whic h wa s agree dto tw o year s ago . Th e calculation s ar e attached

. W e kno w thi s matter

i s important

to yo u an dw e wil l ac t

a s quickl y a s possibl e upo n receip t of your letter

. I n orde r t o expedit e th e case , pleas e submi t you r comment s b y emai l to EAS@dot.go v by Febaiary 2

. I

f yo u hav e an y question s o r

nee dadditional time , pleas e contac t Kevi n Adam s a t (202 ) 366-1047

. Sincerely ,

Denni s J

. DeVany " ^ Ciiief , Essentia l Ai r

Servic e Divisio n Offic e of Aviatio n Analysi sSubsid y Reques t Alask a Airlines , In c Annua l Compensatio n Requiremen t Essentia l Ai rServic e at Cordova

. Gustavus

. Petersburg

. Wrangel l an d Yakutat Ma y 1 , 201 1 an d Fonvar

d Base d o n Nee d fo rYea rEnde d Septembe r30 , 201 0

Actual s AS- 2 Pag e 1 o f 1

Ooeratln p Revenu q Passenge r U.S

. Mai l Freigh t Exces s Baggag e Charte r Trans

. Relate d & Othe r1 / operatlp q ^wen? ? Direc t Flyin g Operatio n 3 / Maintenanc e - Fligh t Depreciatio n - Fligh t
Indirec t Maintenanc e - Groun d Fligh t Attendan t othe rPassenge rSvc

. A t Aircraf t & Traffi c Svc

. 4 / Promotio n & Sale s 4 / Genera l & Admin

. 4 / Depreciatio n - Groun d Transpor t Relate d 4 / Cordov a Yakuta t Qu^.tsvv s

5,750,00 6 404,37 4 1,655,26 4 139,74 8 0 913,02 3 $ 8,862,41 5 $

5,614,21 0 1,648,31 8 411,53 9 $ 7,674,06 7 $

4,05 8 548,82 1 26,86 2 3,609,39 3 453.24 5 1.422,09 9 665,45 4 1,121.39 8 Petersbur g

Wrangel l

6,232,40 4 394,28 1 959,18 2 74,46 8 0 1,248,57 7 8,908,91 2 \

3.827,81 0 1.128,85 4 279.47 3 5,236,13 8 % 2,81 9 377,46 3 10.78 8 2.481,02 5 596.98 6 1,101,31 5 629,62 6 790,65 0 Consolidate d

Tota l

11,982.41 0 798,65 4 2,614.44 6 214.21 7 0 2,161,59 9

, 17.771,32 7

9.442.02 0 2.777,17 2 691.01 3 12,910,20 3 6,87 8 926.27 4 37.65 0 6,090,41 8 1.049,23 1 2,523.41 4 1,295.08 0 1,911.94 8

Tota l Operatin g Exp

. Operatin g Profi t ^Losa

^ Retur n 2 / Compensatio n $ 7,850,50 1 $ 5,990.39 1 $ 13,840,89 2 $ 15,524,56 8 $ 11,226.52 9 $ 26,751.09 7 $ (6,662,153 ) $ (2,317,617 ) $ (8,979,770 ) $ 776.22 8 $ 561.32 6 $ 1.337,55 5 $ 7.438,38 2 $ 2.878.94 4 \ $10,317,32'5~ |
EA S Cos t pe rPassenge r Alaska' s proposa l offers a low EA S cos t pe rpassenger : $8,262,93 8 Propose d EAS compensatio n 67 % Rati o o

f passenge rrevenu e t o tota l revenu e $5,571,32 9 EA S compensatio n allocate d t o passenger s 209.00 0 Estimate d annua l passenger s $26.6 6 Averag e EA S cost pe rpassenge r Note s 1 / Exclude s publi c servic e revenu e 2 / 5 % o f Operatin g Expens e 3/F«et«ljwsted-l»accotmtforbudgete d $90/barre l oil 4 / Costs froze n fro m las t bi d Proposa l ConJov a Yakutat Gustavu s Petersburg Consolidate d

Wrangel l Tota l

$ 8,862,41 5 $

5,760,77 4 1,648,31 8 411,53 9 $ 7,820,63 1 $

4,05 8 548,82 1 12,03 3 2,477,88 2 404,00 8 556.19 4 665.45 4 567.45 8 8,908,91 2 $

3,927,70 1 1,128,85 4 279,47 3 5,336,02 9 $
2.81 9 377,46 3 14,40 1 3,336,82 5 412,33 8 807,96 3 629.62 6 820,54 5 17,771,32 7

9,688,47 5 2,777,17 2 691,01 3 13,156,66 0 6,87 8 926,27 4 26.43 5 5.814,70 7 816.34 6 1.384,15 6 1,296,08 0 1,388.00 3 $ 5,235,90 8 $ 6,401.97 0 $ 11,637,87 7 $ 13,056.53 8 $ 11.737,99 9 S 24,794,53 7 $ (4,194.124 ) $ (2.829.087 ) $ (7,023,211 ) $ 652,82 7 $ 586,90 0 $ 1,239,72 7 $ 4,846,95 1 $ 3,415,98 7 } $8,262,938" ]