BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Regarding Essential Air Service at: 

EXCURSION INLET, ALASKA 

KAKE, ALASKA 

Under49lJ.S.C. 41731 el. seq. 

Docket OST 2002-12014 

Docket OST 2008-0217 

SERVICE PROPOSAL BY 

ALASKA JUNEAU AERONAUTICS, INC. 

d/b/a 

WINGS OF ALASKA 

SEAPORT AIRLINES 

In response to The Department's order 2010-4-6 dated April 9, 2010, Alaska Juneau Aeronautics, Inc. 

(Wings of Alaksa), offers the following service proposal to provide essential air service with subsidy at 

Excursion Inlet, Alaska and Kake, Alaska. Wings has provided Essential Air Service at both points 

previously. Wings was happy to provide ad-hoc air service to Excursion Inlet and Kake for passengers, 

freight and have accommodated the United States Postal Service with mail delivery after the emergency 

revocation of LAB Flying Service's (LAB), operating authority on July 24,2008. 

EXCURSION INLET - Docket OST - 2002-12014 

Wing's proposes to continue to provide the same level of service and frequency at Excursion Inlet from 

Juneau as we did over the previous two year period. That service is; during the 16 week peak season, 

offering three roundtrip flights per week with Cessna 207 aircraft and during the 36 week off-peak 

season, offering one roundtrip flight per week with Cessna 207 aircraft. When the landing surface at 

Excursion Inlet is unusable and Wings cannot provide service in a safe manner, Wings reserves the right 

to work with another carrier such as Alaska Seaplane Service or Ward Air to accommodate the level of 

service required. Wings will compensate any sub-contractor for the service they provide. Wing's 

commits to work with the Community Representatives at Excursion Inlet to coordinate mutually 

agreeable arrival times for the flights offered and required under this proposal. See Appendix A for the 

annual compensation required for Wings to provide Essential Air Service at Excursion Inlet, Alaska. 
KAKE - OST - 2008-0217 

Kake is located approximately 100 miles south of Juneau. The normal route of flight is along Stephens 

Passage or Seymour Canal and over the extended waters of Frederick Sound. The Frederick Sound water 

crossing is more than 10 miles. The weather along the route is frequently marginal VFR. There are areas 

along the route where radio communications are poor or not available. There are no landing strips along 

the route, nor are there safe areas to ditch should an emergency arise. 

With the implementation of Capstone Phase Two in Southeast Alaska, of which Wings is a participant, 

safer and more reliable air transportation is attainable, especially for Kake. Wings is also participating in 

the Alaska Air Carrier Association's Medallion Foundation. In fact, Wings is the first and only Part 135 air 

carrier in Juneau to have attained 'Shield Status' from the Medallion Foundation. It is with safety in mind 

and of paramount importance for the passengers and crew that Wings offers this proposal to serve 

Kake, Alaska. Wing's proposes to provide Essential Air Service at Kake from the hub of Juneau utilizing 

nine seat turbine powered, Cessna 208 Caravans. Additionally, during the last bid period, we added the 

authority to fly under Instrument Flight Rules. This greatly increased our dispatch reliability. We are 

currently acquiring a fully anti-iced Caravan that will give Wing's a tremendous margin of safety and 

reliability over that of our nearest competitor. 

As we did last period, when weather and loads allow. Wings will substitute Cessna 207 aircraft on the 

route, thereby reducing the subsidy required by approximately 45% per departure, however, the annual 

subsidy ceiling is based on the Caravan aircraft and it is the Caravan aircraft that Wings intends to use on 

this route whenever weather or loads require it. 

In order to meet the historical service level while utilizing larger aircraft than has traditionally been used 

in the Juneau to Kake market. Wings proposes a 21 week peak season whereby two roundtrip flights 

each day, seven days per week would be offered. During the 31 week off-peak season, one roundtrip 

flight each day would be offered. The proposed peak season would run from around the third week of 

April through around the 10th of September. Wings will endeavor to schedule the peak-season two 

roundtrip flights each day at opposite ends of the day to allow commuters from either Kake or Juneau to 

return to their point of origin on the same day. Wings will solicit Community feedback on the scheduling 

of off-peak flights. 

The service levels provided by AJA during the past period proved to be the most efficient for the 

Department while yet allowing for the maximum traffic to these communities. We additionally flew 

many non-subsidized flights when traffic dictated that extra capacity was warranted. Although AJA was 

recently criticized by a new entrant into this market for efficiently managing capacity, we feel that we 

have been excellent stewards of the Department's resources. During the past year, although we bid 

$314,302 we only charged the department $241,531. These same saving should be anticipated should 

the department select us for an additional two year period. 

Additionally, Wing's acquisition by SeaPort Airlines has given the company economy of scale that is 

unrivaled by our competitors. Wing's inventory is now distributed in five major global distribution 

sytems (GDS's). Wing's has joined the Airline Clearing House that will enable interline agreements with 

major carriers. Wing's/Sea Port is currently E-ticketable and is fully distributed in Expedia.com (see 

appendix C). Many more Online Travel Agencies are soon to come. These distribution outlets combined 

with future interline agreements makes Wing's service far superior to our competition. 
Appendix A & B are self-explanatory. Revenues, direct, and indirect expenses are derived from the past 

two year period. 

Respectfully, 

/€A^r/^ ^ 

Rob McKinney 

President 

Alaska Juneau Aeronautics, Inc. 

d/b/a 

Wings of Alaska/SeaPort Airlines 
Appendix A 

Annual Compensation Requirement for Essential Air Service at 

Excursion Inlet, Alaska 

Between JNU and EXI 

Assumed Total Revenue* $ 10,700.00 

Direct Expenses 

C-207 84 block hours @ $289.08 $ 24,282.72 

Indirect Expenses 

C-207 75% of direct $ 18,212.04 

Subtotal $ 42,494.76 

Return and Tax Allowance $ 2,124.74 

Total Operating Expense $ 44,619.50 

Annual Subsidy Requirement $ 33,919.50 

Subsidy per Departure/Arrival $ 201.90 

Weekly Ceiling $ 1,211.41 (peak) 

$ 403.80 (off-peak) 

•*Based on historical traffic. 
Appendix B 

Alaska Juneau Aeronautics, Inc. 

d/b/a 

Wings of Alaska 

Annual Compensation Requirement for Essential Air Service at 

Kake, Alaska 

Between JNU and KAE 

Passengers (4000 @ $134.88) $ 

Freight (81,500 @ $0.65) 

Mail (120,000 @ $0.89711) 

Total Revenue * 

Direct Expenses 

C-208 Caravan919.8 block hours @$573.98 

Indirect Expenses 

C-208 Caravan 79% of direct 

Subtotal 

Return and Tax Allowance 

Total Operating Expense 

Annual Subsidy Requirement 

Subsidy per Departure/Arrival 

Weekly Ceiling (peak) 

(off-peak) 

$332,865,-00 

$71,171.00 

$98,631.00 

$508,649,-00 

$527,946.80 

$417,078.00 

$945,024.80 

$47,251.24 

$992,276.00 

$438,627.00 

$473.22 

$6,625,03 

$3,312.51 

•^Total Revenue based on two-year historical average of passengers, 

freight and mail volumes at current rates. 
Appendix C 

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http://www.«xpedia.conv'pub/agent.dll?qscr=fexp&flag=q&ci(yl=kake&citdl=jun6au&date... 5/9/2010