\ \ DC

- 042333/000001

- 5685908 v2 BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

ESSENTIAL AIR SERVICE TO KAKE , ALASKA Pursuant to 49 U.S.C. § 41731 et seq. ) ) ) ) ) ) Docket DOT

- OST

- 2008

- 0217

MOTION OF KALININ AVIATION, LLC D/B/A ALASKA SEAPLANES TO DISMISS

PROPOSAL OF HARRIS AIR SERVICE, INC. TO PROVIDE ESSENTIAL AIR SERVICE AT KAKE, ALASKA
Communications with respect to this document should be addressed to: Kent Craford KALININ AVIATION LLC 1873 Shell Simmons Dr. Suite 110 Juneau, AK 99801 Robert E. Cohn Patrick R. Rizzi HOGAN LOVELLS US LLP Columbia Square 555 Thirteenth Street, NW Washington, DC 20004 +1 202 637 4999/5659 robert.cohn@hoganlovells.com patrick.rizzi@hoganlovells.com Counsel for Kalinin Aviation, LLC d/b/a Alaska Seaplanes

June 3, 2014\ \ DC

- 042333/000001

- 5685908 v2 BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

ESSENTIAL AIR SERVICE TO KAKE , ALASKA Pursuant to 49 U.S.C. § 41731 et seq. ) ) ) ) ) ) Docket DOT

- OST

- 2008

- 0217

June 3 , 2014

MOTION OF KALININ AVIATION, LLC D/B/A ALASKA SEAPLANES TO DISMISS

PROPOSAL OF HARRIS AIR SERVICE, INC. TO PROVIDE ESSENTIAL AIR SERVICE AT KAKE, ALASKA

Kalinin Aviation, LL C d/b/a Alaska Seaplanes (“Alaska Seaplanes”) moves to dismiss the proposal of Harris Air Service, Inc. (“Harris Air”) to provide essential air service (“EAS”) at Kake, Alaska

. Harris Air is not legally eligible or qualified to provide Kake EAS service. Background

. Harris Air has submitted a proposal to provide subsidized EAS between
Kake and Juneau with 14 weekly flights (2x daily) during the peak season and 7 weekly flights (1x daily) during th e off

- peak season. Harris Air Proposal, at 4 (April 28, 2014). Although it claims to be “ a Part 135 Commuter Air Operator” under the FAA’ s regulations, 1 Harris Air does not have Commuter Air Carrier Authorization from the U.S. Department of Transportatio n. Indeed, Harris Air recently withdrew its application for DOT commuter authority , and the Department dismissed its application on May 6, 2014 (after Harris Air’s Kake proposal was submitted). See DOT Order 2014

- 5

- 2. For the reasons discussed in detail below, because Harris Air does not hold commuter or certificate authority from the Department to operate scheduled service , Harris Air is not qualified or

1 Harris Air Proposal, at 1.M otion of Kalili n Aviation, LLC Page 2

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- 5685908 v2 licensed to provide the daily EAS to Kake . The Department should promptly
dismiss Harris Air’s proposal

. Discussion

. 1. 49 U.S.C

. § 41733 governs the selection of carriers to provide EAS for compensation

. Section 41732 (a) defines “basi c essential air service” as “scheduled air transportation of passenger s and cargo...

. ” Section 41733 (c) limits applications for the provision of subsidized basi c essential air service to “air carriers”:

(1) If the Secretary decides that basic essential air service will not be provided to an eligible place without compensation, the Secretary shal l provide notice that an air carrier may apply to provide basi c essential air service to the place for compensation under this section. (emphasis added)
The term “air carrier” is defined in 49 U.S.C. § 40102(a)( 2) to mean “a citizen of the United States undertaking by any means, directly or indirectly, to provide air transportation .” (emphasis added) The term “air transportation” in turn is defined in 49 U.S.C. § 40102(a)( 5 ) to mean “foreign air transportation, interstate air transportation, or the transportation of mail by aircraft.” “ I nterstate air transportation ” does not include “intrastate air transportation”. In fact, the Aviation Act expressly differentiate s between “air carriers” and “intrastate air

car riers” ( s ee , for example, Section 44 9 02(a): “The [DOT] shall prescribe regulations requiring an air carrier, intrastate carrier, or foreign air carrier to refuse to transport...”). The EAS compensation provision (Section 41733(a) , (c)) refers only to “air carrier” and makes no mention of “intrastate c arrier”. And, for good reason. The purpose of EAS is to provide access to small communities (especially communities in Alaska) to the natio nal air transportation system. SeeM otion of Kalili n Aviation, LLC Page 3

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- 5685908 v2 Section 40101(a) requiring the DO T to consider as being in the public interest “maintaining a complete and convenient system of continuous scheduled interstate air transportation for small communities and isolated areas with direct financial assistance from the United State s Government wh en appropriate.” (emphasis added). Moreover, the Order inviting proposals for EAS at Kake specifically requested applications from “air carriers”. DOT Order 2014

- 3

- 15, at 3 (ordering paragraph 1). Harris Air has not been issued authority by the DOT to provide air transportation as an air carrier and is not eligible under the statute to compete for EAS compensation at Kake

. 2. Under Part 298, a commuter air carrier is “ an air carrier as established by § 298.3(b) that carries passengers on at least five roun d trips per week on at least one route between two or more points according to its published flight schedules that specify the times, days of the week, and places between which those flights are performed.” 14 C.F.R. § 298.2. Or, as the Department’s Info rmation Packet on How to Become a Commuter Air Carrier states, “ commuter air carrier is defined under section 298.2(e) of the Department’s Regulations as an air carrier which (1) operates “small aircraft,” i.e., those with an original design capacity of 60 or fewer seats, and (2) carries passengers on at least five round

trip flights per week on at least one route between two or more points according to published flight schedules which specify the times, days of t he week, and places between which they are performed.” 2

2 DOT Information Packet on How to Become a Commuter Air Carrier , at 2 (September 2012).M otion of Kalili n Aviation, LLC Page 4

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- 5685908 v2 H aving interstate scheduled commuter or certificate authority is a prerequisite for providing EAS as discussed in Section (1) above

. Carriers lacking such authority have their proposals rejected. For example, Sovereign Air did not have the requisite authority from the Department to provide scheduled
passenger service, and the Department rejected its proposal for EAS at Devil’s Lake and Jamestown, North Dakota, on that ground alone, se e DOT Order 20 14

- 1

- 19, at 5 , as it did with Sovereign’s EAS bid for service to select communities in Michigan, Minnesota, and Wisconsin, see DOT Order 2012

- 9

- 11, at 5. And, in this case, Harris Air is proposing to serve Kake with 7

- 14 weekly frequencies, depending on the season, but has not received DOT commuter authority . As noted above, the Department dismissed Harris Air’s application for that authority just last month, and Harris Air remains (as described by the Departme nt) “ an on - demand air taxi serving the Southeastern Alaska area and operating under 14 CFR Part 298 of the Department’s regulations and Part
135 ”. DOT Order 2014

- 3

- 2, at 1 (emphasis added). Although Harris Air might claim that its EAS proposal involves intrastate transportation and thus Part 298 is not implicated, that argument fails for three

reasons. First, as pointed out above , the statute does not authorize the Department to compensate an “intrastate carrier” to provide basi c essential air transpor tation

. 3

3 Although the Department has awarded E AS to Harris Air for Port Alexander , Alaska, that was for a frequency of less than 5 times per week , and there were no competing proposals from certificated or commuter air carriers

.M otion of Kalili n Aviation, LLC Page 5

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- 5685908 v2 Second , Harris Air’s proposed Kake service would transport more than a de minimis volume of passengers or property moving as part of a continuous journey to/from points outside of Alaska , and thus Part 298 applies. See 14 C.F.R. §§ 298.1, 298.2 , and footnote 1 thereto. Indeed, Harris Air confirms as much by highlighting that its proposal to serve Juneau from Kake would “provid[e] access to the major airlines route structure” and “the ability to make connections and interline arrangements” with “a schedule [created] to benefit those needing access to major airline connections out of Juneau.” Harris Air Proposal, at 1, 4. In fact, FAA Guidance points out that “[i] ntrastate operators cannot participate in interline agreements with air carrier certificate holders or carry mail.” FAA Order 8900.1, CHG 165, Para. 3

- 3611 (July 19, 2011). As noted above, Harris Air touts interline arrangements in its proposal. Moreover , EAS at Kake has historically involved the carriage of mail.
Third , the Department has similarly confirmed the point just a few months ago, describing Harris Air as an “on

- demand air taxi . . . operating under 14 CFR Part 298 .” DOT Order 2014

- 3

- 2, at 1 (emphas is added). Accordingly, Harris Air is not eligible or qualified to provide EAS at Kake. We urge the Department promptly to dismiss Harris Air’s proposal

.M otion of Kalili n Aviation, LLC Page 6

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- 5685908 v2 Respectfully submitted,

________________________________ ______ Robert E. Cohn Patrick R. Rizzi HOGAN LOVELLS US LLP 555 Thirteenth Street, NW Washington, DC 20004 +1 202 637 4999/5659 Counsel for KA LILIN AVIATION, LLC\ \ DC

- 042333/000001

- 5685908 v2 CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing Motion of Kalinin Aviation has been served this 3rd day of June 2014 , upon each of the following addressees:

scott@harrisair.com hank@MTCWorld.com kevin.schlemmer@dot.gov tim@seaportair.com citymanager@cityofkake.org paul.khera@alaska.gov rich.sewell@alaska.gov

Jonathan Echmalian