Mega n Lavvreiic e Managin g Director , Governmen t an d Communit y Relation s



### Marc h 10,201 0

Mr

. Denni s DeVan y j ^ Chief , EA S & Domesti c Analysi s i^ ^ Offic e o f Aviatio n Analysi s g U.S

. Departmen t

o f Transportatio n - - ~ 120 0 Ne w Jerse y Avenue , S.E

. Washington , D.C

. 2059 0 Subject : Proposa; l o f

Alask aAirlines , Inc

. ("Alask aAirliaes" ) t o Provid e Essentia l Ai r Servic e a t Adak , Alaska , Docke t

DOT-OST-2000-855 6 Dea r Mr

. DeVany : Attache di s th e proposa l o f Alask aAirline s t o provid e essential ai r servic e t o th e community o f

Adak , Alaska

. Th e proposa l include s ou r subsid y reques t

t o provid e thi s service

. Als o attache d are th e certification s pertainin g t o complianc e with adrug-fi:e e workplace , nondiscriminatio n an d lobbjdn g regulations

. Pleas e contac t

m e i f yo u nee d additional information

. Sincerely ,

Attachment s

B O X 6890 0 SEATTLE , W A 98168-0900/206-433-320 0

### Pag e 1 o f 1

Exhibi t AS- 1
AS- 2 Alask aAirlines , Inc

. Compensatio n Requiremen t ntia l Ai r Servic e t o Adak , Alask a
Inde x o f Exhibit s
Titl e Narrativ e Statement
Subsidy Reques t Pag e 1
1

### AS- 1 Pag e 1 o f 1 Alask aAirlines , Inc

. Compensatio n Requiremen t Essentia l Ai r

Servic e t o Adak , Alask a Narrativ e Statement Alask aAirlines , Inc

. ("Alaska " o r "th e company" ) i s pleased , i n respons e t o Order 2010

- 2-5 , t o submi t

it s EA S proposa l fo

r servic e t o Adak , Alask afo r atwo-yea

r contrac t term beginnin g Jul y 1 , 2010

. Alask asubmit s aproposa l requestin g compensatio n i n th e amount o f $1,675,703

. Tha t

amount represent s onl y a$192,58 1 increas e over th e current subsidy amount , an d th e entir e increas e i s solel y attributabl e t o fuel costs
. Th e compensatio n reques t

assume s al l othe r

expenses , suc h a s wag e an d fringe benefi t costs , are flat. I t i s i n recognitio n o f

th e importanc e o f

je t servic e t o th e Adak

communit

y tha t th e company i s willin g t o absor b non-fue l operatin g cos t

increase s tha t

i t normall y woul d hav e include d i n it s proposal

. Alaska' s compensatio n reques t als o assume s operatin g revenu e i s flat an d i s base d o n actua l revenu e receive d for

th e one-yea

r perio d endin g Septembe r

30,2009

. A s noted , th e cornpensatio n reques t

assiune s al l non-fue l cost s ar e flat. I n other words , Alask ai s absorbin g al l post-Septembe r 30 , 200 9 non-fuel cos t

increase s i n th e interes t

o f presentin g th e Departmen t wit h th e lowes t

possibl e bid

. Insofa

r a s fuel cost s are concerned , Alask aproject s a n expens e o f

$2.4 7 agallo n base d o n th e forward curv e an d fue l budge t assumption s tha t

th e company use s fo

r al l o f it s interna l projections

. Alask aAirline s propose s t o continu e it s establishe d schedul e patter n o f twice-weekl y B

737-40 0 combinatio n ("combi" ) passenge r an d carg o je t

service , wit

h eac h flight connectin g passenger s t o th e airUne' s Anchorag e hu b - fromwhic h th e passenger s ca n benefi t fromexpedite d an d seamles s on-lin e connection s t o mos t major citie s i n th e "lower 48. " Th e 737-40 0 comb i aircraft , whic h replace d th e olde r 737-20 0 comb i aircraf t i n th e airline' s fleet, provide s enhance d freight, mai l an d carg o capacit y an d i s equippe d wit h Require d Navigatio n Performanc e (RNP ) precisio n technology

. Thi s technology , whic h Alask aAirline s use s throughou t th e stat e o f

Alask aan d starte d usin g thi s winte r

t o lan d at Adak , enable s th e airhn e t o mor e rehabl y acces s th e airpor t durin g inclement weather , thu s reducin g diversion s an d cancellations

. Alask aAirline s ha s serve d th e Ada k communit

y unde r a n EA S contrac t

sinc e 2003

. Th e compan y view s it s provisio n o f

je t servic e t o th e communit

y a s servin g acritical transportatio n function , i n term s o f reliabl y connectin g th e communit y t o Anchorag e and , in turn , th e large r

citie s withi n th e stat e o f

Alaska , a s wel l a s th e lower 48

. Alask aAirline s look s forward t o th e opportunit y t o continu e t o provid e servic e t o Adak , Alask aunder

ane w two-yea

r EA S contrac t

term
.Aiaslt a Airlines , In c Annua l Compensatio n Requiremen t (Subsid y Request )

Essentia l Ai rServic e a t Adal < Jul y 1 , 201 0 an d Forward Base d o n Nee d fo rYea rEnde d Septembe r30 , 200 9 AS- 2 Pag e 1 o f 1

Operatin g Revenu e Passenge r U.S

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

. Relate d & Othe r1 /
Ooeratin a Expens e Direc t Flyin g Operatio n - No n Fue l Flyin g Operatio n - Fue l Maintenanc e - Fligh t Depreciatio n - Fligh t

Indirect Maintenanc e - Groun d Fligh t Attendan t Othe rPassenge rSvc

. Aircraf t & Traffi c Svc

. Promotio n & Sale s Genera l & Admin

. Depreciatio n - Groun d Transpor t Relate d
Tota l Operatin g Exp

. Ooeratin a Profi t (Loss ) Retur n 2 / Interes t Compensatio n Svste m 1 /
2,331,304,95 1 31,215,44 6 60,027,87 3 42,324,62 3 9,003,21 1 505,649.38 0 $2,979,525,48 4

462,765,98 3 561,213,17 1 281,592,98 1 133,616,92 6 $1,439,189,06 1

9,206,58 7 158,976,52 6 53,420,29 8 422,983,54 5 168,994,25 1 203,663,82 1 41,676,04 3 276,180,80 7 $1,335,101,87 8 $2,774,290,93 9 Actual s Ada k
1,467,70 9 193,89 9 391,15 9 26,64 6

- 588,49 7 $ 2.667,91 0

838,65 7 791,41 8 683,00 6 106,03 0 $ 2,419,11 1

10,71 8 139,55 7 4,47 3 475,06 1 40,18 5 $286,69 2 48,52 0 $376,88 0 $ 1,382,08 7 $ 3.801,19 7 $

$ Proposa l Ada k
1,467,70 9 193,89 9 391.15 9 26,64 6

- 588,49 7 2,667,91 0

838,65 7 1,080,75 8 683,00 6 106,03 0 2,708,45 1 Fue l cos t adjuste d 3/

$ $

$ 10,71 8 139.55 7 4,47 3 475,06 1 40.18 5 $286,69 2 48,52 0 $376,88 0 1.382,08 7 4,090,53 7 (1,422,627 ) 204,52 7 48,54 9 1,675,70 3
1/ Exclude s publi c servic e revenu e 2 1 5 % o f Operatin g Expens e 3 / Fue l pric e adjuste d fro m $1.8 0 t o $2.4 7 base d o n forwar d curv e an d interna l Alask a Airline s budget

.UNITE D STATE S O F AMERIC A DEPARTMEN T O F TRANSPORTATIO N OFFIC E O F TH E SECRETAR Y OFTIC E O F AVIATIO N ANALYSI S CERTIFICATIO N REGARDIN G DRUG-FRE E WORKPLAC E REQUIREMENT S I N TH E PERFORMANC E O F SUBSIDIZE D ESSENTIA L AI RSERVIC E A

. Th e subsidize d essentia l air servic e carrie

r certifie s tha

t i t will , o r will continue , t o provid

e adrug

free workplac e by : (a ) Publishin g astatemen

t notifying employee s tha

t th e unlawfu

l manufacture , distribution , dispensing , possessio n or

us e of acontrolle d substanc e i s prohibited i n th e carrier' s wor]q)lace , an d specifyin g th e action s tha

t wi U b e taken agains t

employee s fo

r violatio n o f

such prohibition ; (b ) Establishing a

n ongoin g drug-free awarenes s progra mt o infor memployee s about

— (1 ) Th e danger s o f

dru g abus e mth e workplace ; (2 ) Th e grantee' s policy o f

maintaining adrug-fre e workplace ; (3 ) An y availabl e dru g counseling , rehabilitation , an d employee assistanc e programs ; and (4 ) Th e penaltie s tha

t ma y b e imposed upo n employee s fo r dru g abus e violation s occurrin g i n th e workplace ; (c ) Makin g i t

arequiremen

t tha t eac h employe e t o b e engage di n th e perfomianc e of wor k supporte d b y di e subsid

y b e given acopy o f

th e statemen

t require d b y paragrap h (a) ; (d ) Notifying th e employee i n th e statemen t require d b y paragraph (a ) that , a s aconditio n of employmen

t supported by th e subsidy , th e employee will — (1 ) Abid e b

y th e term s o f

th e statement ; and (2 ) Notif y th e employe

r i n writin g o f

hi s or he r conviction fo

r aviolatio n o f

acrimina l dru g statut e occurrin g i n th e workplac e n o later tha n five calenda

r day s afte r suc h conviction ; (e ) Notifying th e agency i n writin g within ten calenda r day s afte r receivin g notic e unde

r paragrap h (d)(2 ) froma

n employe e o

r otherwis e receivin g actua

l notic e of conviction

. Employer s o f

convicted employee s mus t

provide notice , includin

g position title, to the Office o f Aviatio n Analysis

. Notic e shal l include th e orde r numbe r o f eac h affecte

d subsidi2E dservice ; (f ) Taking on e of

th e followin

g actions , within 3 0 day s o f receivin g notic e unde

r paragrap h (d)(2) , wit h respec t t o an y employe e wh o i s s o convicted-

- (1 ) Taking appropriat

e personnel actio n agains t

such an employee , u p t o an d including termination , consisten

t wit h th e requirement s of

th e Rehabilitatio n Ac t

o f 1973 , a s amended , o

r (2 ) Requirin g suc h employe e to participat e satisfactoril

y i n adru g abus e assistanc e or rehabilitation progra

mapprove d fo

r suc h purpose s b y aFederal , Stat e or loca l health , la w enforcement , o

r other appropriat

e agency ;(g ) Makin g agoo dfait h effor t t o continu e t o maintai n admg-free workplac e throug h implementation o f

paragraph s (a) , (b) , (c) , (d) , (e ) and (f)

.
B

. Th e subsidize dessentia l air servic e carrie

r may , bu t i s no t require d to , inser

t i n th e spac e provided belo w th e site fo

r th e performanc e of

wor k done i n connectio n wit

h th e specific gran t
Place s o f Performanc e (stree t

address , cify , county , state , zi p code)

. Fo r th e provisio n o f

essentia l ai r service , workplace s include outstations , maintenanc e sites , headquarter s ofGc e locations , tramin g site s andan y othe r worksite s wher

e wor k i s performed tha

t i s supporte d by th e subsidy

.

Check [ ] i f there are workplace s o n file tha t are no t identifie d here

.

DateINSTRUCTION S FO RCERTIFICATIO N

1

. B y signin g and/or

submitting thi s ^plicatio n o r grant agreement , th e subsidized essentia l ai r servic e . carrie r i s providin g th e certification

. 2

. Th e certification i s amaterial representatio n o f fact upo n which relianc e i s place d when th e agenc y award s th e subsidy

. I f

i t i s later determine d tha

t th e subsidize d carrie

r knowingl y rendere d afals e certification , o r

otherwis e violate d th e requirement s o f th e Drug-Fre e Workplac e Act , th e agency , in additio n t o an

y otherremedie s availabl e t o th e Federa l Government , ma

y tak e actio n authorize d unde

r th e Drug-Fre e Workplac e Act

. 3

. Workplace s unde

r grants , fo r grantee s othe

r tha n individuals , nee d no t

b e identified o n th e certification

. I f

known , the

y ma y b e identified i n th e subsid y application

. I f

th e subsidize d carrie

r doe s no t identif y th e workplace s a

t th e tim e of

application , or

upon awar

d i f ther e i s n o application , th e carrie r mus t keep th e identit

y of th e worlqjlace s o n file in it s office and mak e th e information availabl e fo r Federa l inspection

. Failur

e t o identif y all know n workplace s constitute s aviolatio n o f th e subsidize dcarrier' s drug-fi^ e workplac e requirements

. 4

. Workplac e identification s mus t include th e actua

l addres s o f

building s (or

part s o f buildings ) o

r othe r site s wher

e wor k under th e grant take s place

. Categorica

l description s ma

y b e use d (e.g. , al

l counter s a t th e airport s serve d b y th e carrier)

. 5

. I f th e workplac e identifie d t o th e agency change s durin g th e performanc e o f th e subsidize d service , th e subsidized carrie

r shall infor mth e agency o f

th e change , i f

i t previousl y identified th e workplac e i n question

. 6

. Definition s o f

term s i n th e Nonprocuremen t Suspension and Debarmen t common rul e (4 9 CF

RPart 29 ) and Drug-Fre e Workplac e common rul e (4 9 CF RPar t 29 , Subpar

t F ) appl y to thi s certification

. Carriers ' attentio n i s called , i n particular , t o th e following definition s fromthes e rules : Controlle dsubstanc e mean s acontrolle d substanc e i n Schedule s I through V o f th e Controlle d Substance s Ac t

(2 1 US C 812 ) and a s furthe r defined by regulatio n (2 1 CF R1308.1 1 tiirough 1308.15) ; Convictio n mean s afinding of guil t (including aple ao

f nol o contendere ) o

r impositio n of

sentence , or both , b y an y judicia l bod y charge d wit

h th e responsibilit

y t o determin

e violation s o f

th e Federa

l or Stat e crimina l dru g statutes ; Crimina l dru g statut e mean s aFedera l o r non-Federa

l crimina l statut e involving th e manufacture , distribution , dispensing , use , or possessio n o f

an y controlle d substance ; Employe e mean s th e employe e of asubsidize d carrie

r directly engage d i n th e performanc e o f wor k supportedb

y th e subsidy , including : (i ) Al l direc t charg e employees ; (ii ) All indirec t charg e employee s unles s their

impact or involvemen

t i s insignifican

t t o th e performanc e o

f subsidized service ; an d (iii ) Temporar

y personnel and consultant s wh o ar e directl y engage d i n th e performanc e o f wor k supporte dby th e subsid

y an d wh o are on th e subsidize d carrier' s payroll

. Thi s definitio n doe s no t includ e woiker s no t

o n th e payro

U o f th e subsidized carrie

r (e.g. , volunteers , eve

n i f use d t o mee t

a matchin g requirement ; consultant s or independen

t contractor s no t

o n th e subsidized carrier' s payroll ; or employee s o f

subrecipient s o r

subcontractor s i n covere d woriq)laces)

.UNITE D STATE S O F AMERIC A DEPARTMEN T O F TRANSPORTATIO N OFFIC E O F TH E SECRETAR Y OFFIC E O F AVIATIO N ANALYSI S TITL E V I ASSURANC E (Implementin g Titl e V I o f th e Civi l Right s Ac t

o f 1964 , a s amended ) ASSURANC E CONCERNIN G NONDISCRIMINATIO N O N TH E BASI S O F DISABILIT Y I N FEDERALLY-ASSISTE D PROGRAM S AN D ACTrVrriE S RECEIVIN G O RBENEFITIN G FRO M FEDERA L FINANCIA L ASSISTANC E (Implementin g th e Rehabilitatio n Ac t o f 1973 , a s amended , an d th e Ai r Carrie r Acces s Ac t

o f 1986 ) 4 9 CF RPart s 2 1 an d 2 7 an d 1 4 CF RPart s 271 , an d 38 2

)\\tt&Vt. ^ V^-l.-rtg.^ , Xui c . (th e Recipient ) HEREB Y AGREE S THAT , (Name o f Recipient) I

. A s aconditio n to receivin g an y Federa l financial assistanc e fromth e Departmen

t o f Transportation , i t

wil l comply : wit

h Titi e V I o f

th e Civil Right s Ac t

o f 1964 , a s amended , 4 2 U.S.C

. 2000d-4 2 U.S.C

. 2000d-4 ; a U requhement s imposed by or pursuan t to : Titl e 49 , Code of

Federa l Regulations , Par

t 21 , Nondiscrimination i n Federally-Assiste d Program s o f

th e Department

o f Transportation—Effectuation o f Titi e V I o f

th e Civil Right s Ac t o f 1964 ; an dothe

r pertinent directive s s o tha

t n o perso n in th e Unite d State s shall , o n th e ground s o f race , color , or

nationa l origin , b e exclude d fromparticipatio n in , b e denied th e benefit s of , o r b e otherwis e subjected t o discriminatio n unde r an y progra mo r activit y fo r whic h th e Recipient

receive s Federa

l financial assistanc e fromth e Department o f Transportation

. Thi s assuranc e i s require d b y Titi e 49 , Code of

Federa l Regulations , sectio n 21.7(a) an d Titi e 14 , Code o f

Federa l Regulations , sectio n 271.9(c)

.
n . A s aconditio n to receiving any Federa l financial assistanc e fromth e Departmen

t o f Transportation , i t

wil l compl

y with : sectio n 50

4 o f th e Rehabilitatio n Ac t

o f 1973 , a s amende d(2 9 U.S.C

. 794) ; th e Ai r Carrier Acces s Ac t

o f 198 6 (4 9 U.S.C

. 1374(c)) ; an dal l requirements imposedb y or pursuan t t o Titi e 49 , Cod

e o f Federa l Regulations , Par

t 27 , Nondiscriminatio n on th e Basi s o f Handica p i n Program s and Activitie s Receivin g or Benefittin g fromFedera

l Financia l Assistance , Titi e 14 , Cod

e o f Federa l Regulations , Par

t 382 , Nondiscriminatio n on th e Basi s o f Handica p i n Ai r Travel ; and othe

r pertinen t directive ss o tha t n o oflierwis e qualifiedperso n wit h adisability , b e excluded fromparticipatio n in , b e denie dth e benefit s of

, b e discriminate d agains t

by reaso n o f

such handica

p i n th e provisio n o f air transportation , or

otherwis e b e subjected t o discriminatio n unde r an y progra mfo r whic h th e Recipient

receive s Federa

l financial assistanc e fromth e Departmen t o f Transportation

. Thi s assuranc e i s require d b y Titi e 49 , Cod e o f Federa l Regulations , sectio n 27. 9 and Titi e 14 , Cod

e o f Federa l Regulations , section s 271.9(c ) and 382.9

. in

. I t wil l promptly take an

y meaure s necessar

y t o effectuat

e thi s agreemen t

Th e Recipien t fiirther agree s tha t i t shal l take reasonabl e action s t o guarante e tha t it , it s contractor s andsubcontractor s subjec t t o th e Departmen

t o f Transportatio n regulation s cite d above , transferees , andsuccessor s in interes t wil l compl

y wit h a U requirement s imposed or pursuant t o th e statute s an d Departmen t o f Transportatio n regulation s cite d above , othe r pertinent directives , an d th e abov e assurances . IV

. Thes e assurance s obligat e tiie Recipien

t fo r th e perio d durin g which Federa l financial assistanc e i s extended

. Th e Recipient agree s tha

t th e Unite d State s ha s aright t o seek judicial enforcemen

t wit h regar d t o an y matte r arisin g unde

r th e statute s and Department o f Transportatio n regulation s cite d above , othe r pertinen t directives , an

d th e above assurances . V

. Thes e assurance s ar e given fo r th e purpos e o f

obtainin g Federa

l subsid y unde r th e Essentia

l Ai r Servic e Progra

mand ar e bindin g o n th e Recipient , contractors , subcontractors , transferees , successor s i n interes t an d al l othe

r participant s receivin g Federa l subsid y mth e Essentia

l Air Servic e Program

. Th e perso n o r person s whos e signature s appea r belo w ar e authorize dt o sig n thi s agreemen t o n behal f of th e Recipien t VI

. I n additio n t o thes e assurances , th e Recipient agree s t o file: asummar

y o f all complaint s filed agains t

i t witiiin th e pas t

yea r tha t alleg e violation(s ) b

y th e Recipien

t o f Titl e V I o f th e Civil Right s Ac t

o f 1964 , a s amended , sectio n 504 of tiie Rehabilitatio n Ac t

o f 1973 , a s amended , o r

th e Air Carrie r Acces s Ac t

o f 1986 ; or astatement

tha t there hav e bee n n o complaint s filed agains t

i t Th e summar

y should includ

e th e dat e th e complain

t wa s filed, th e natur e of th e complaint , th e statu s or outcom e o f th e complain

t (i.e.

. whethe

r i t i s still pendin g or

ho w i t wa s resolved)

. 

# L3/^/ / Date Lega l Name o f Recipien t By : Signature)<5^Xuthorize d Officia l
v _UNITE D STATE S O F AMERIC A DEPARTMEN T O F TRANSPORTATIO N OFFIC E O F TH E SECRETAR Y OFFIC E O F AVIATIO N ANALYSI S CERTIFICATIO N REGARDIN G INFLUENCIN G ACTIVITIE S

Certificatio n fo r

Contracts , Grants , Loans , an d Cooperativ e Agreement s The undersigne d certifies , to th e bes t of hi s or he r knowledg e an

d belief , that : (1 ) N o Federa

l appropriate dfiinds hav e bee n pai d o r wil l b e paid , b y o

r on behalf of th e undersigned , t

o an y perso n fo

r influencin g or attempting t

o influenc e a

n office r o r employee o f an y agency , aMembe

r o f Congress , a

n office r o r employe e of

Congress , o

r a n employe e o f aMembe r o f Congres s in connectio n witii th e awardin g of an y Federa l contract , th e makin g of an y Federa l grant , th e making o f

an y Federa l loan , the entering int

o o f an y cooperativ e agreement , an

d th e extension , continuation , renewal , amendment o r modification of

an y Federa l contrac t grant , loan , o

r cooperativ e agreement
. (2 ) I f any fiinds othe

r tha n Federa l appropriate d fund

s hav e been pai d or

wil l b e pai d t o an

y person fo r influencing o

r attemptin g t o influenc e a

n office r o r employe e o f

any agency , a Membe r o f Congress , a

n office r o r employe e of

Congress , o

r a n employe e of

aMembe r o f Congres s i n cormection wit

h thi s Federa

l contrac t gran t loan , o r cooperativ e agreemen t

di e undersigne dshall complet

e and submi

t Standar d Form-LLL , "Disclosur

e For mt o Repor

t Influencing Activities, " in accordanc e wit h it s instructions

. (3 ) The undersigned shall requir e tha t tlie languag e o

f thi s certification b e include d in th e awar ddocument s fo

r all subaward s a

t al l tiers (includin g subcontracts , subgrants , an d contract s under

grants , loan s an

d cooperativ e agreements ) and tha t al l subrecipient s shal l certif y an d disclos e accordingly

. Thi s certificatio n i s amateria l representatio n o

f fac t upon which relianc e wa s place d when thi s transactio n wa s mad

e o r entere d into

. Submission o f tiiis certification i s aprerequisit e fo r making o r enterin g int

o thi s transaction imposed by section 1352 , title 31 , U.S

. Code

. An y perso n wh o fail s t o file th e required certification shall b e subjec t t o acivi l penalt

y o f no t les s tha n $10,00 0 andno t

mor e tha n $100,000 fo

r eac h suc h failure

.

Signatur e Q Date

m. % ^ 7\ , Ai r Carrie r
Essentia l Ai r Servic e Point(s ) T o Whic

h Certification Applie s