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May II, 2012 Mr_ Dennis

### J. DeVany Chief, Essential Air Service Division Office ofAviation Analysis U.S. Department ofTransportation 1200 NewJersey Avenue, SE Washington, DC 20590 RE: PeninsulaAirways Proposal Docket DOT-OST-2000-8556 DearMr. DeVany: 

# City ofAdak P.O. Box 2011 ·Adak, Alaska 99546 (907) 592-4500 • Fax: (907) 592-4262

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This letter serves to express the comments ofthe community regarding the proposal submitted for consideration to the U.S
. Department ofTransportation ("USDOT'') by Peninsula Airways ("'Pen Air'') on March 30, 2012. We recognize that though comments were not officially requested by your department, community input would be beneficial in your consideration ofthe aforementioned proposal. TheCity is cognizantthat there are several positive and negative aspects regarding the Pen Air proposal and that the community seemingly has no otheroptions to choosefrom, given the fact that only one response for Adakwas received by the Division. On April II th' the City Council held a public hearing to solicit input regarding the Pen Airproposal. The majority ofthe testimony received relates to cargo and mail capacity, the problemsthatthe community has previously experienced, and the ClllTent experiences ofothercommunities with similar service. Another significant concern is Pen Air's ability to maintain the proposed schedule, as well as the related effects, again based on the community's previous experience with Pen Air as well as their performance in othercommunities, including Cold Bay, the proposed stopoverpoint. The cargo capacity ofPen Air's aircraft, the Saab 340, is substantially smallerthan what is available with ourcurrent can·ier and causes the most concern regarding this proposal. With the reopening of the local fish processing plant by Icicle Seafoods, we have seen firsthand the increased needs and capacity utilization by the community. In January 2012, the community saw an influx of approximately 150 personnel for the fish plant. With the Saab 340'scapacity of30 passengers per tlight, a minimum offive flights would be booked with no mail and freight on the flights during this time period. With the proposed schedule, the communitycould realistically encounter a situation of having no mail and freight tor at least a week
. Ifwe multiplied this several times during the year, the effects seen would be severe. Furthermore. the City has seen an increase in cargo related activity in relation the operating ofthe local fish processing plant. Not only has the City seen an increase in inbound cargo/mail/passengerComments on EssentialAirService Proposal May11, 2012 Page2 traffic, an increase ofoutbound traffic has also been observed. This season, encompassingJanuaryMarch, shipments ofperishable fish products, some destined tor international markets, became a regular occurrence. On several instances, cargo shipments in excess of8,000 lbs. each were tendered on ourcurrent carrier, which according to Pen Air would not 

### be possible due to payload limitations. The City is confident ofthe expectation ofthose markets to grow, with resulting shipments increasing as well as the processing plant increases operations. The City is additionally concerned about freight screening given the aforementioned exportation and Pen Air's limitations for security screening. We understand that a process identified as "reverse screening" can and would be employed, howeverwe are concerned aboutthe practicality ofthis method and the potential problems that could arise from significant usage ofthis security protocol. It should also be notedthat Adak Island does not have regular barge service and the community is entirely dependent on air service for all items, including but not limitedto dry goods, groceries, medicine, perishable and other time sensitive goods. While the communityexpects regular barge service in the future, this is a long-term expectancy and is not something that can be relied upon atthis point in time. In reviewing the Pen Air proposal, community members noticed there was no provision for a "food rate" ora rate that is based on identifying groceries as a specific commodity and correspondingrate. Ourcurrent air carrier has extended this rate to Adak (see attached airway bill), which has become an integral componentto life and business on the island.

- J.;
. . ... Part ofthe necessity ofa special rate for groceries is related to the U.S. Postal Service's Bypass Mail Program. Atthe time the bypass mail program was identifying communities that would become beneficiaries Adak was a Naval Air Facility with no such need ofthe program. Now that Adak is a civilian community we have a need torthis program but are not eligible to participate. Furthermore, given the financial state ofthe Postal Service, inclusion ofAdak into the bypass mail program seems highly unlikely. In summary, with Pen Air's proposal community members could pay as much as three times more to obtain groceries, notwithstanding the costs to the local store that would be passed on to those unable to freight in their perishable goods. In addition, Adak is still in the process ofbeing cleaned up by the U.S. Navy as required underthe Base Realignment and Closure process. This year the U.S. Navy awarded contracts torcleanup efforts leadingto an expected increased tratlic level this summer not seen since approximately 2009. The U.S. Navy is expected to award anothercontract tor extensive work commencing during the summerof2013 ofwhich extensive logistical efforts will be required, more so with Pen Air's proposal. It should 

### be noted that some ofthe companies bidding on these contracts torthe U.S. Navy are quite concerned about obtaining seats and more so about their cargo shipments timely arriving on Adak. We understand that speculation is discouraged and not allowed, however with respect to historical data, the data is flawed due to the effects ofhaving a tish processer in the communitythat went bankrupt in 201 0 as well as no active Navy contracts during the last EAS cycle. The effects ofthese situations were immediately felt and now the community is feeling the macro effects though steps have been made to reverse this trend to the extent practical on a local level.j •

Comments on EssentialAirService Proposal May11, 2012 Page3 The community is furthennore concerned with the ability ofPen Airto complete its proposed schedule. It is no secretthat the weatheron Adak is fluid at best and for all intents and purposes unpredictable. We are concerned that the actual completion percentage will be similarto Atka (approximately 65%). As a result, the community is concerned that that flight cancellations will result in similar situations experienced in Dutch Harbor and Cold Bay with long standby lists and the unexpected financial costs travellers will incur. With a scheduled flight time ofapproximately 183% ofthe currentflight time, citizens are concerned about having to return to Cold Bay, which could see a shortage ofrooms ifothercircumstances caused rooms to be booked. Ifthe plane goes back to Anchorage, a preferable option, passengers will have travelled tor approximately I0 hours. There is one further aspect ofthe proposal we respectfully disagree with in regards to the costs associated with TSA agents. The communitywas finally able to have TSA accept a candidate to become a local agent, which has been a longtenn issue all stakeholders have been working on. Currently one otherTSA agent is rotated in on a month-to-month basis, only because ofTSA's current inabilityto secure another candidate suitable to them. At presentthe loss ofthe communityTSA agent could lead to a loss ofat least two children from our small school ofapproximately 20 students. The City would be remiss ifit did notdisclose any benefits to acceptance ofPen Air's proposal. The City will, without a doubt, see an increase in sales tax receipts directly related to the money Pen Air would spend in the community. On the otherhand, the City expects the expenses ofoperatingthe tenninal to increase substantially, thereby negating most ofthe financial benefits expected. Furthennore, the City would also lose State assistance for ourproviding a certified law enforcement officer as it would not be required for Pen Air service to Adak. Notwithstanding the above concerns, the City needs the Essential Air Service program and will work with Pen Air, ifselected, to ensure the community is served successfully. We sincerely hope that the Division will take our comments into consideration as it follows the process ofselecting an air carrier to serve Adak. Thank you for yourtime and please contact me with any questions you have in regards to our comments. Ican be reached at (907) 592-4500 orat llockctt(a)adak-ak.gov. Sincerely,
Layton

### J. Lockett City Manager City ofAdak, AlaskaApr 12 12 03:30p

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