Order 2011-3-11

Served: March 9, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 9

th of March, 2011

Essential Air Service at

ELFIN COVE, ALASKA, AND 

PELICAN, ALASKA

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

DOCKET OST-2002-11586

DOCKET OST-2002-11586

ORDER RESELECTING CARRIER

Summary

By this order, the Department is reselecting Alaska Seaplane Service, LLC., to provide essential 

air service (EAS) at Elfin Cove and Pelican, Alaska, at annual subsidy rates of $75,391 at Elfin 

Cove and $185,721 at Pelican, from June 1, 2011, through January 31, 2015.

1

Background

Order 2007-9-7 selected Alaska Seaplane to provide service with 6-seat DHC-2 Beaver aircraft at 

an annual subsidy of $185,772 for the two communities from June 1, 2007, through May 31, 

2011. Under that contract, which expires May 31, Elfin Cove receives one round trip per week 

during the 26-week off-peak period and 5 flagstop round trips per week during the 26-week peak 

period, while Pelican receives six round trips per week year round. All of the service was to be 

operated with six seat DHC-2 Beaver aircraft to Juneau. In anticipation of the end of the current 

contract, by Order 2010-12-33 we requested proposals for replacement service. We received a 

proposal from only one carrier, Alaska Seaplane, and requested comments from the communities 

and state. We received informal comments from the state, and the issue is ripe for decision.

 

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

Carrier Proposals

Elfin Cove Five round trips per week to Juneau in the 18-week peak and two round trips per 

week in the 34-week off-peak for $75,391 annual subsidy. All of the service would be operated 

with single-engine DeHavilland Beaver aircraft, and the contract would extend from June 1, 

2011, though January 31, 2015, in order to synchronize this rate with the expiration of Alaska 

Seaplane’s rates at Angoon and Tenakee.

Pelican Six nonstop round trips per week to Juneau year round for $185,721 annual subsidy. 

All of the service would be operated with single-engine DeHavilland Beaver aircraft, and the 

contract would extend from June 1, 2011, though January 31, 2015, in order to synchronize this

rate with the expiration of Alaska Seaplane’s rates at Angoon and Tenakee.

Community Comments

The communities and state continue to support the EAS provided by Alaska Seaplane, and state 

that:

“Due to the isolated location of these communities and the complete lack of any roadsystem connection, this subsidized air service is their only form of scheduled 

transportation. The communities of Elfin Cove and Pelican depend on scheduled air 

freight, passenger, and mail service for basic necessities, routine medical and health 

services, and economic welfare.” 

Decision

Alaska Seaplane is the only carrier to submit a proposal, it submitted only one option, and we 

have decided to select it for the four-year period it proposed, June 1, 2011, through January 31, 

2015. We find that the carrier’s proposed service and subsidy levels are reasonable, and we are 

not aware of any reason why we should not re-select the carrier to provide the proposed level of 

service. 

The Department shall make this selection contingent upon our receiving properly executed 

certifications from the carrier that it is in compliance with the regulations regarding drug-free 

workplaces and nondiscrimination, as well as the regulations governing lobbying activities. 

Carrier Fitness

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

reliable service before DOT may subsidize it to provide essential air service. Alaska Seaplane 

Service, LLC. 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. DOT 

has contacted the Federal Aviation Administration, and it has raised no concerns that would 

negatively affect our fitness findings. DOT therefore concludes that the carrier remains fit to 

conduct the operations proposed here.

This order is issued under authority delegated in 49 CFR 1.56a(f).
- 3 -

ACCORDINGLY,

1. We reselect Alaska Seaplane Service, LLC., to provide essential air service at Elfin Cove and 

Pelican, Alaska, as described in Appendix C;

2. We direct Alaska Seaplane Service, 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 Alaska Seaplane Service, LLC., continues to be fit, willing and able to operate as 

a certificated carrier and capable of providing reliable essential air service at Elfin Cove and 

Pelican, Alaska; 

4. This docket will remain open until further order of the Department; and

5. We will serve copies of this order on the Office of Statewide Aviation of the Alaska 

Department of Transportation and Public Facilities, and Alaska Seaplane Service, LLC.

By:

Susan L. Kurland

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
Appendix A

Great Circle Miles to Juneau (JNU)

Elfin Cove (AGN) 59

Pelican (TKE) 50

Hoonah, HNH 35

Pelican (PEC) 67

Elfin Cove (ELV) 64

Gustavus (GST) 41

Excursion Inlet (EXI) 32

Haines (HNS) 70

Skagway (SGY) 81
 Appendix B

Annual Subsidy Need at Elfin Cove and Pelican, Alaska

Docket 2002-11586

Elfin Cove Pelican

Aircraft Type DHC-2 DHC-2

Block Hours 1/ 248 562

Passengers 521 1,045

Freight Lbs. 22,899 105,040

Mail Lbs. 31,339 58,566

Passenger $68,851 $137,928

Freight $12,594 $57,772

Mail $45,187 $87,382

Total Revenue $126,632 $283,082

Economic Cost $202,023 $468,803

Annual Subsidy $75,391 $185,721

1/ Blk. Hrs. Flights

Elfin Cove

Peak 18 weeks x 10 flights in each direction x 47 min/60 = 141 180

Off-Peak 34 weeks x 4 flights in each direction x 47 min/60 = 107 136

248 316

Pelican

52 weeks x 12 flights in each direction x 54 min/60 = 562 624
Appendix C-1

Alaska Seaplane Service, LLC., Essential Air Service to be Provided to 

Elfin Cove, Alaska, Docket OST-2002-11586

Effective Period: June 1, 2011, through January 31, 2015.

Scheduled Service: Five nonstop round trips per week in the 18-week peak and two nonstop 

round trips per week in the 34-week off-peak to Juneau.

Aircraft: DeHavailland Beaver, six seats

Rate per Eligible Flight: $2391

Weekly Ceiling: Off-Peak: $239 2; Peak: $956 3

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 this rate, 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 carrier do not 

constitute a total or partial reduction or cessation of payment.

Subsidy contract 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.

Funds are not currently available for performance under this order beyond March 18, 2011. The Government’s 

obligation for performance under this order beyond March 18, 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 March 18, 2011, until funds are made available to the 

Department for performance. If funds are not made available for performance beyond March 18, 2011, the 

Department will provide notice in writing to the carrier.

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

 

1 $75,391 annual subsidy ÷ divided by 316 annual flights, calculated as follows: 

Peak: 18 weeks * 5 round trips * 2 directions = 180 annual flights;

Off Peak: 34 weeks * 2 round trips * 2 directions * 136 annual flights. 

2 10 flights x $239 = $2,390.

3 4 flights x $239 = $956.
Appendix C-2

Alaska Seaplane Service, LLC., Essential Air Service to be Provided to 

Pelican, Alaska, Docket OST-2002-11586

Effective Period: June 1, 2011, through January 31, 2015.

Scheduled Service: Six nonstop round trips per week year round to Juneau.

Aircraft: DeHavailland Beaver, six seats

Rate per Eligible Flight: $2981

Weekly Ceiling: $3,576 2

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 this rate, 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 carrier do not 

constitute a total or partial reduction or cessation of payment.

Subsidy contract 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.

Funds are not currently available for performance under this order beyond March 18, 2011. The Government’s 

obligation for performance under this order beyond March 18, 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 March 18, 2011, until funds are made available to the 

Department for performance. If funds are not made available for performance beyond March 18, 2011, the 

Department will provide notice in writing to the carrier.

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

 

1 $185,721 annual subsidy ÷ divided by 624 annual flights, calculated as follows: 

6 round trips x 2 directions * 52 weeks.

2 12 flights x $298.