### THE STATE 

# OJALASKA

GOVERNOR SEAl'\ P ARNELL

April16, 2015

Mr. Kevin Schlemmer Chief, EAS and Domestic Analysis Division U.S. Department of Transportation 1200 New Jersey Avenue SE Washington DC 20590 

## Department of Transportation and Public Facilities

OFF ICE OF THE COMM ISS IONER

P.O. Box 196900 Anchorage. Alaska 99519-6900 Main: 907.269.0730

Fax: 907.269.0489

Re: Air Transportation to Non-Eligible Places , Diomede, Alaska (DM2) Docket DOT-OST-2009-0260

Dear Mr. Schlemmer, This letter is to express our support for the continuation ofthe Essential Air Service (EAS) and Air Transportation to Non-Eligible Places (ATNEP) programs in Alaska and the crucial connection they bring to our remote communities.
Diomede is one ofthe most remote communities in the USA, located in the Bering Strait about two miles from the Russian boarder and 25 miles from the Alaska coast. While the Essential Air Ser vice (EAS) program guarantees an eligible community basic access to the national transportation system, Diomede is NOT eligible for EAS support because it did not have scheduled air service when the EAS program was created because it did not even have a heliport at that time. Thus the cun·ent scheduled air service is partially subsidized under the 49 U.S.C 

### § 41736 , Air Transportation to Non-eligible Places (ATNEP) program, which matches a subsidy amount provided by any nonfederal entity on a dollar-for-dollar basis. By a letter dated June 20,2012, the Alaska Department ofCommerce, Community, and Economic Development, on behalfof Diomede, proposed to the Secretary ofTransportation that compensation be provided to an air carrier as part ofATNEP

. B y Order 2012-9-25, the Department selected Evergreen Helicopters, Inc

. (later acquired by Erickson Helicopters Inc.) to provide ATNEP at Diomede, Alaska through June 30,2013. Since then, Erickson has been selected each year to provide ATNEP at Diomede. Currently Diomede 's service and subsidy under ATNEP is set by Order 2014-7-4, which selected Erickson Helicopters Inc

. to provide the service through June 30,2015 when the current
selection expires.

"Keep Alaska Moving through service and infrastructure

. "Order 2014-7-4 subsidizes one trip routing per week between Nome-Diomede-Wales-Diomede and Nome for 44 weeks per year, which assumed that at least eight weeks during the winter an ice runway would form that could accommodate fixed wing air service. However for the last couple years the ice runway did not form making the ATNEP subsidized helicopter service even more important. The Alaska Department of Commerce, Community, and Economic Development provided a grant of$190,476 via Kawerak Inc. , to support air service to Diomede. The U.S. DOT provides a matching amount to the air service provider for each completed routing. This combined subsidy allows the air carrier to operate financially at least at a break-even level. The State of Alaska understands this payment arrangement will continue depending upon funding availability.
Neither the ATNEP program nor State ofAlaska has conditions or requirements which specify the ticket price that Erickson Helicopters Inc. may charge the flying public. After all, the air service company is a private business that needs to make a profit. However we also understand that due to the isolated location of Little Diomede Island and the complete lack ofany road system connection, the subsidized air service is the community ' s only form of scheduled transportation to access the outside world. The community depends on scheduled air service for passengers and freight for basic necessities , routine medical and health services , and their general economic well-being. Therefore the ticket price is a particularly sensitive issue for members ofthis isolated subsistence based community. Last year Erickson Helicopters Inc. doubled the seat fare charged for a roundtrip fare from Diomede to Nome to $800, and to $400 for a round-trip fare from Diomede to Wales. We have heard that the community members consider these fares to be very expensive.
While the State ofAlaska provides a 50% matching grant through Kawerak Inc. , the State continues to assert that the local residents are generally best positioned to comment on particular schedules and air carrier selection, and therefore we think the community and Kawerak Inc. should provide comments to you on those specific issues
. I respectfully urge U.S. DOT to continue the ATNEP program service at Diomede, Alaska. Sincerely,

# ,/~**~1/C_** {fohn R. Binder, C.M.

Deputy Commissioner ofAviation

cc: Robert Soolook Jr. , President, Native Village ofDiomede Mayor Andrew Milligrok, City ofDiomede Melanie Bahnke, Executive Director, Kawerak Inc. Katherine Eldemar, Director, Division of Community and Regional Affairs, Alaska

Department ofCommerce, Community, and Economic Development