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# Schuma n Aviatio n Compan yLt d db a Ai rCarrie rCertificat e MKHA108 K I . I U

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### 13 0 lolan a Plac e Honolul u Hawai i 9681 9 808-834-581 3 Emai l richard@makanikai.co m

Mjikan i Ka l Helicopter s - Makan i Ka i Ai rCharter s - K o Olin a Helicopter s - Pacifi c Ai rExpres s - Hawai i Aviatio n Service sSCHUMA N AVIATIO N COMPANY . LT D 1 3 0 lOLAN A PLACE , HONOLULU . H I 9681 9 SOS-aM-SSl S FA X 808-837-786 7 Richard@MakaniKai.co m

Januar y 24 , 201 1 Bria n Swanson , AIC P U.S . Departmen t

o f Transportatio n Offic e o f Aviatio n Analysis , X-5 0 W86-47 3 120 0 Ne w Jerse y Avenue , S.E . Washington , D C 2059 0 RE : Proposa l t o Provid e Essentia l Ai r Servic e a t

Kalaupapa , Hawai i (Docke t DOT-OST-2000-6773 ) Dea r Mr . Swanson , In respons e t o th e above-reference dorders , Schuma n Aviatio n Compan y Ltd , db aMakan i Ka i Ai r Charter s (FA A Ai r

Carrie r Certificat e MKHA108K) , respectfull y submit s it s bi dfo r provisio n o f

Essentia l Ai r

Servic e a t

Kalaupapa , Hawaii . Th e propose dtw o yea r servic e profil e an dpricin g detail s are :

YEA RON E Honolulu , H I t o Kalaupapa , H I Kalaupapa , H I t o Molokai , H I YEA RTW O LX'Uiil

Tw o (2 ) dail y roun dtrip s Monday throug h Saturday Thre e (3 ) dail y roun dtrip s Monday throug h Saturday Honolulu , H I t o Kalaupapa , H I Kalaupapa , H I t o Molokai , H I Fo r Revenu e an dExpens e Details , Se e Appendi x A . Tw o (2 ) dail y roun dtrip s Monday throug h Saturday Thre e (3 ) dail y roun dU-ip s Monday throug h Saturday AiiMiKi l Siihsit K

$877.709.8 4

$877,709.8 4

Makan i Ka i Helicopter s - Makan i Ka i Ai rCharter s - K o Olln a Helicopter s - Pacifi c Ai rExpres s - Hawai i Aviatio n Service sProposa l t o Provid e Essentia l Ai r Servic e a t

Kalaupap a(Continued ) Backgroun d- Kalaupap ai s on e o f

th e mos t isolate dcommunitie s i

n th e country . Ther e i s n o roadacces s t o th e area : Kalaupap ai s apeninsul atha t sit s a t th e botto mo f

2,000-foo t

vertical cliffs , effectivel y cuttin g th e are aof

f fro mth e res t

o f th e islan do f

Molokai . T o get

t o Kalaupapa , on e ca

n hik e dow n tli e clif

f trail , rid e amule , o r

fly . Thi s isolate dnatur e i s precisel y th e reaso n tha t Kalaupap a wa s selecte di n th e 1800' s a s th e settlemen t for Hansen' s Diseas e patients . Peninsul aresident s today rel y o n th e settlement' s annua l barg e t o delive r food , equipmen t

an dfuel . Pacifi c Wings , currentl y th e onl y schedule dcommercia l airlin e servin g Kalaupap afor th e pas t decade , di ds o unde r

a n EA S subsid y agreemen t unti l Apri l 1 , 2007 . Th e company provide d subsidy-fre e servic e bu t

evidentl y determine dtha t suc h servic e wa s no t

profitable . Pacifi c Wing s ha s petitione dth e DO T t o suspen dit s servic e t o Kalaupap ai n orde r t o re-submi t

aproposa l t o provid e EA S t o Kalaupapa . I n orde r t o determin e what

th e communit y o f

Kalaupap awant s an dneed s for ai r service , w e interviewe dresident s an dworker s t o fin dou t what the y ar e lookin g for

i n a n ai r servic e provider . Alon g wit h th e usua l requirement s o f safety , reliability an dtimeliness , thos e w e spok e wit h mad e i t clear that patient s woul dlike t o b e abl e t o com e t o Honolul u for medica l appointment s and return t o Kalaupap ath e sam e day . Accordingly , w e ar e workin g i n conjunctio n with Islan dAi r i n establishin g flight

schedule s wit

h enoug h tim e betwee n th e arriva l o f ou r propose dflight s from Kalaupap at o Moloka i /

Honolul u an ddepartur e o f thos e flight s bac k

t o Moloka i /

Kalaupap at o accommodat e thi s need . I t als o becam e clear

tha t ther e wa s anee dfor

resident s an dvisitor s t o b e abl e t o fl y "topside " t o th e Molokai Airport

an dbac k dow n t o th e settlement , s o w e ar e proposin g thre e dail y roun dtri p flight s betwee n th e Moloka i Airport an dKalaupap aairport . Abou t Schuma n Aviatio n Compan y Lt d- Schuma n Aviatio n Compan y Ltd . i s alocall y owne dbusines s tha t ha s operate dMakan i Ka i Helicopter s sinc e 1996 . Th e Schuma n nam e i s wel l know n i n Hawaii : Gusta v A . Schuman , m y great grandfather , immigrate dt o Hawai i fro mGerman y i n 189 3 an destablishe don e o f Hawaii' s firs t automobil e dealerships . Schuma n Carriag e Compan y Ltd , whic h eventuall y carrie dth e Cadillac , CMC , Humme r an dSubar

u brands , wa s i n busines s for ove r 11 0 years . I n 1996, 1 establishe dSchuma n Aviatio n Compan y Ltd . t o provide , "th e bes t custome r servic e o f any aviatio n compan y i

n Hawaii , ba

r none. " M y local upbringin g ha s give n m e afir m understandin g an dappreciatio n o f th e cultur e o f

th e peopl e o f

Hawaii . M y family' s relationship s with member s o f

th e Moloka i communit y i n som e case s g o bac k

generations . My grandmothe r wa s raise do n th e islan do f Molokai . Makan i Ka

i Helicopters , establishe di n 1988 , base da

t th e Honolul u Internationa l Airport , i s Oahu' s oldest , larges t

an dmos t experience dhelicopte r

tou r company . In 2 2 years , th e compan y Makan i Ka l Helicopter s - Makan i Ka l Ai rCharter s - K o Olln a Helicopter s - Pacifi c Ai rExpres s - Hawai i Aviatio n Service sProposa l t o Provid e Essentia l Ai r Servic e a t

Kalaupap a(Continued ) ha s provide daeria l tour s for ove r 14,00 0 person s annuall y withou t inciden t o r accident . Th e compan y employ s tw o Eurocopte r A-Star s an duse s tw o Robinso n R-44 s for special job s and phot o charters . Makan i Ka

i Helicopter s i s th e recipien t o f th e FAA' s Diamon dAwar dfor maintenanc e excellence , th e prestigiou s Platinu mSafet y Awar dfromth e Helicopter s Associatio n International , an di s amembe r o f TOPS , Th e Tou r

Operator s Progra mo f

Safety . Mor e topically , Makan i Ka

i Helicopter s provide s th e helicopter s an dpilotin g for th e ne w Hawai i Five- 0 televisio n serie s o n CB S Th e company i s o n trac k

t o becom e th e authorize dCessn aServic e Cente r for th e Stat e of

Hawai i an di s headquarter s for

th e Robinso n Helicopte r dealershi p an dservic e cente r for th e Stat e o f Hawaii . Schuman Aviatio n Compan y Ltd . db aHawai i Aviatio n Service s i s a n FA A Par

t 14 1 Repai r Statio n (Certificat e #MKHR108K ) an di s authorize db y th e FA A t o performwor k o n Cessn a 150 s t o 172 s andth e Caravans , Pipe r Chieftains , Eurocopte r

A-Star s an dRobinso n helicopters , a s wel l a s Lycoming , Turbomeca , an dPratt & Whitne y engines . Al l aircraf t maintaine dunde r

a n FAA Repai r

Statio n Certificat e mus t

adher e t o ahighe r

leve l o f maintenanc e tracking , reliability an daccountability . I n 2009 , th e company expande dit s operation s wit h th e additio n o f

tw o Pipe r

Chieftain s and establishe dMakan i Kai Ai r Charters . Th e Chieftain s make regular visit s t o Kalaupapa , carryin g resident s an dphysician s a s wel l a s tourists an dother s wishin g t o tak e th e Fathe r Damie n Tour . Makan i Ka

i Ai r Charter s ha s buil t

it s reputation a s asafe , reliabl e an daccommodatin g ai r carrier , sensitiv e t o th e need s o f th e community . Als o i n 2009 , Schuma n Aviatio n Compan y Ltd . bega n ai r carg o operation s usin g Cessn a208 B Caravan s i

n conjunctio n with Pacifi c Ai r Cargo . Tha t

operation , doin g busines s a s Pacifi c Ai r Express , serve s th e island s o f Mau i an dKauai si x night s aweek . Th e carg o endeavo r ha s give n u s first-han doperationa l an dmaintenanc e experienc e wit h th e Caravan . I n 2010 , Schuma n Aviatio n Compan y Ltd . wa s grante dInitial FAA Par t 13 5 Schedule d Commute r

statu s b y th e Departmen t o f Transportation . Reliabilit y & Dependabilit y - Makan i Ka

i Ai r Charter s propose s t o provid e schedule dservice s t o Kalaupap ausin g nine-seat Cessn a208 B Gran dCaravans , th e sam e aircraf t currentl y use db y th e incumben t carrier . Th e Carava n ha s prove n t o b e a n exceptionall y reliabl e aircraf t for Makan i Kai' s carg o operations . Th e Caravan ha s enjoye da99 % reliability recor dmakin g nightl y flight s fromOah u t o Mau i and Kauai .

Makan i Ka i Helicopter s - Makan i Ka l Ai rCharter s - K o Olln a Helicopter s - Pacifi c Ai rExpres s - Hawai i Aviatio n Service sProposa l t o Provid e Essentia l Ai r Servic e a t

Kalaupap a(Continued ) A s you ar e n o doub t

aware , FA A regulation s stipulate tha t asingle-engin e aircraf

t suc h a s th e Carava n mus t

remai n withi n glidin g distanc e t o shor e wheneve r ove r wate r carryin g passengers . That mean s tha

t th e Caravan s mus t

climb t o a

n altitud e of

5,00 0 feet

plu s whe n crossin g th e 2 5 mil e Moloka i channel i n orde r t o compl y wit

h th e FAA regulations . Occasionally , weathe r wil l preclud e climbin g t o suc h altitude s whic h mean s possibl y cancellin g aflight . I n tha t event , w e plan t o pres s int o servic e on e o f ou r tw o Pipe r

Chieftai n twin-engin e aircraf t t o mak e th e tri p becaus e th e Pipe r

Chieftain s hav e n o suc h altitud e restriction . W e can fl y belo w th e weathe r

o n ou r wa y t o servic e Kalaupapa . A s ameasur e of

adde dsafety , al l of

ou r pilot s ar e Airlin e Transport Rate d(ATP ) professional s an dwel l verse di n singl e pilo t Instrumen t

Fligh t Rule s (IFR ) operations . Contractua l an dMarketin g Arrangement s wit h aLarge r Carrie r - Schuma n Aviatio n Compan y Ltdi s currentl y negotiatin g acod e sharin g agreemen t wit h Islan d Air . Islan dAi r

ha s bee n operatin g i

n Hawai i skie s for

ove r 3 0 year s an di s aleadin g regiona l carrie r servin g airport s o n ai l majo r Hawaiia n Islands . Th e airlin e offer s flight s betwee n Oahu , Mau i (Kahulu i Airport

an dWes t

Maui' s Kapalu aAirport) , Molokai , Lanai , Kauai , an dth e Bi g Islan do f Hawaii . Islan dAi r

operate s afleet

of 37-seat Das h 8 turbopro p aircraft . Th e Kaluapap apassenger s wil l hav e eas y acces s t o th e nationa l transportation network throug h Islan dAir' s cod e shar e agreement s with man y o f th e larg e domesti c FAA Part 12 1 ai r carriers . Althoug h i

t wil l b e quic k

an deas y t o boo k

reservation s onlin e a

t ou r website , w e plan t o fully staf f aphon e ban k

t o handl e reservatio n request s an danswe r questions . Thi s i s t o accommodat e th e larg e percentag e o f

Kalaupap aresident s withou t Interne t access . Ou r

phone s ar e answere db y areal liv e perso n 2 4 hour s aday , seve n day s aweek . Communit y Views - W e interviewe dsevera l Kalaupap aresidents , healthcar e professionals . Nationa l Par k employee s an dStat e personne l t o determin e what the y ar e lookin g for

i n schedule dai r

servic e t o th e community . Beside s th e obviou s ple afo r lowe r ai r fares , ther e wa s consensu s tha t th e compan y chose n t o provid e EA S t o Kalaupap ashoul db e accommodatin g t o th e commimity' s specifi c needs , suc h a s ensurin g that th e aircraf

t i s accessibl e b y disable dpersons , that th e flight schedul e woul dallo w transi t

t o Honolul u an dbac k

t o Kalaupap ath e sam e day , an dtha t th e ai r carrie r hav e aprove n trac k

recor do f safet y an do n tim e service . I

t wa s als o note dthat

th e chose n carrie r shoul db e financiall y stabl e an dabl e t o provid e ai r servic e for

year s t o come . I t shoul db e note dher e that Schuma n Aviatio n i s hel di n hig h regar dwithi n Hawai i busines s community , i s astaunc h membe r o f th e Chambe r

o f Commerc e an dth e Bette r Busines s Burea

u an dwa s recognize db y Hawai i Busines s magazin e for excellenc e i n smal l business . Th e compan y i s wel l ru n an dfinanciall y strong . Makan i Ka l Helicopter s - Makan i Ka i Ai rCharter s - K o Olin a Helicopter s - Pacifi c Ai rExpres s - Hawai i Aviatio n Service sProposa l t o Provid e Essentia l Ai r Servic e a t

Kalaupap a(Continued ) In ou r interviews , severa l individual s expresse dfrustratio n ove r th e inabilit y o r

unwillingnes s o n th e par t o f th e incumben t

carrie r t o accommodat e specia l needs . Rit aWard , alifelon g Kalaupap a residen t wh o ha dbee n usin g th e incumben t carrie r fo r adecade , complaine dtha t th e Pacifi c Wing s pilo t

refuse dt o allo w he r

t o boar dth e aircraf

t whe n sh e inadvertentl y forgo t he r identification . Kalaupap ai s no t aTS A secure dairpor t

an dpassenge r

identificatio n i s no t required . Her e i s awoma n wh o gre w u p i n aver y smal l community , wel l know n b y everyon e i n th e communit y an db y th e aircrews , wh o flie s th e rout e wit h grea t frequency , wh o wa s nonetheles s refuse dtranspor t base do n aPacifi c Wing s compan y policy . Thi s wa s unfortunat e becaus e Rit awa s o n he r wa y t o visi t

he r mother , Glori aMarks , wh o wa s airlifte dou t b y th e Coas t Guar dth e nigh t

befor e an dhospitalize di n Honolulu . It' s amatte r

o f understandin g an dappreciatin g th e situation...an dusin g som e commo n sens e i n suppor t o f asmall , isolate dcommunit y lik e Kalaupapa . Incidentally , I personall y picke du p Rit atha t mornin g an dfle w he r

bac k t o Honolulu . N o charge . Eas e o f Us e - Makan i Ka i Ai r

Charter s bring s traveler s eas e an dconvenience : ou r million-dolla r

passenge r termina l i n Honolul u obviate s th e nee dfo r TS A securit y screening . Thi s will :

• Allo w lowe r

fare s becaus e ther e ar e n o gat e fee s • Increas e reliabilit y i n arriva l an ddepartur e time s • Allo w faste r

tum-aroun do f

aircraf t an d • Vastl y improv e th e ai r transpor t

experienc e b y eliminatin g line s an dth e nee dt o tak e of f shoes . Passenger s wil l simpl y arriv e 2 0 minute s i n advanc e o f departure , boar dth e aircraf t an dfly . We'l l eve n provid e complimentar y shuttl e servic e betwee n th e airport , downtow n an dWaikiki . Also , knowin g tha t

ther e ar e afe w person s a t Kalaupap awh o ar e unabl e t o walk , w e ar e prepare dt o accommodat e wheelchair-boun dindividual s wit h th e Caravan . Severa l year s ago , 1 mad e acommitmen t

t o disable dperson s wantin g t o fl y ou r sceni c helicopte r

tour s b y fabricatin g a n electri c lif

t t o transpor t

th e passenge r

fro mthei r

wheelchai r

u p int o th e helicopter . It wa s the n an dremain s no w m y convictio n tha t th e disable dshoul dhav e ever y opportunit y t o enjo y wha t othe r visitor s enjoy , i f

a t al l possible . Th e lif t provide s eas y an dconvenien t acces s t o ou r

aeria l tour s an dhelp s th e disable dperso n maintai n dignit y whil e gettin g int o an dou t o f th e aircraft . Similarly , w e wil l desig n an dbuil da lif t t o allo w th e disable dpassenge r t o b e loade dint o th e Carava n whil e comfortabl y seate di n thei r wheelchair . Th e transfe r fro mth e whee l chai r

t o th e aircraf

t sea t ca n tak e plac e onc e insid e th e aircraft .

Makan i Ka i Helicopter s - Makan i Ka i Ai rCharter s - K o Olin a Helicopter s - Pacifi c Ai rExpres s - Hawai i Aviatio n Service sProposa l t o Provid e Essentia l Ai r Servic e a t

Kalaupap a(Continued )

Ou rspeciall ydesigne d electri c lif t allow s disable d person s eas y acces s t o th e helicopter . W e pla n t o buil d a simila rlif t t o accom modat e wheel-chai rboun d person s travelin g o n ou rCaravans . I n Summar y - Makan i Ka

i Ai r Charter s i s ahom e grow n company , on e with dee p root s i n th e community , on e wit h Hawai i an dit s peopl e i n it s heart . Her e i s aprofessiona l organizatio n with accolade s from countles s customers ove r tw o decade s o f

sterlin g service , with th e soli dendorsemen t o f th e FAA an dth e communitie s of

Moloka i an dKalaupapa . W e submi t this proposa l respectfull y base dno t o n th e prospec t

of boostin g th e botto mlin e for stockholders , bu t

rathe r fro magenuin e desir e t o provid e goo dservic e t o peopl e wh o deserv e suc h service . I t i s ou r ferven t hop e that

th e DO T take s alon g loo k beyon dschedules , subsidie s an dpolitic s an dmake th e righ t

choic e fo r acommunity i n need . Sincerely , G . Richar dSchuma n Presiden t Dian e Schuma n CF O Makan i Ka i Helicopter s - Makan i Ka l Ai rCharter s Service s K o Olin a Helicopter s - Pacifi c Ai rExpres s - Hawai i Aviatio nEstimate d Annua l Revenue :

HNL-LUP-HN L LUP-MKK-LU P $156,000.0 0

$81,120.0 0 APPENDE X A

$125.00*pe rpassenge ron e wa y $65.00 * pe rpassenge ron e wa y * plu s FETTa

xan d Segmen t Fees . Price s se t fo rtw o year s Tota l Revenu e $237,120.0 0 Estimate d Expenses : Aircraf t $180,000.0 0 - Aircraft Leas e Insuranc e $96,000.0 0 - 5 0 Millio n Dolla rLiabilityCoverag e Pilot s $149,760.0 0 Fue l $215,000.0 0 Maintenanc e $97,000.0 0 - Part s an d labo r Engin e & Pro p Reserv e $78,000.0 0 - Se t asid e fo rengin e an d propelle roverhaul s Stat e Landin g Fees $7,987.2 0 Administratio n $56,500.0 0 Tota l Expense s Operationa l Los s $880,247.2 0

$(643,127.20 ) Subsid yrequeste d T^yea r$877,709.8 4 Subsid yrequeste d 2"*

^ yea r$877,709.8 4 Estimate d passengers 1s t yea r249 6 Departure s 261 6 Fligh t Hour s 93 6 Dail yFligh t Schedule : Monda ythr u Saturda y Depar t Honolul u (HNL ) 8:30a m Depar t Kalaupap a (LUP ) 9:10a m Depar t Moloka i (MKK) 9:30a m Depar t Kalaupap a (LUP ) 1:30p m Depar t Moloka i (MKK) 1:50p m Depar t Kalaupap a (LUP ) 2:15p m Arriv e Kaluapap a (LUP ) 9:00a m Arriv e Moloka i (MKK) 9:20a m Arriv e Kalaupap a (LUP ) 9:40a m Arriv e Moloka i (MKK) 1:40a m Arriv e Kalaupap a (LUP ) 2:00p m Arriv e Honolul u (HNL ) 2:45p m Depar t Honolul u (HNL) 3:00p m Depar t Kalaupap a (LUP ) 3:40p m Depar t Moloka i (MKK) 4:10p m Depar t Kalaupap a (LUP ) 4:30p m Arriv e Kaluapap a (LUP ) 3:30p m Arriv e Moloka i (MKK) 3:50p m Arriv e Kalaupap a (LUP ) 4:20p m Arriv e Honolul u (HNL ) 5:00p m Makan i Ka i Helicopter s - Makan i Ka l Ai rCharter s - K o Olln a Helicopter s - Pacifi c Ai rExpres s - Hawai i Aviatio n Service sDanie l K . Inouye , th e mos t senio rmembe ro f th e U.S . Senat e an d th e Presiden t Pro-Tempore . i s show n her e wit h Makan i Ka i Ai rCharter s owne rRichar d Schuma n upo n th e senator' s arriva l bac k i n Honolulu . Senato rInouy e an d hi s staf f hav e th e utmos t trus t I n Makan i Ka i Ai rCharter s an d i n thi s cas e fle w wit h u s t o Kalaupap a o n th e islan d o f Moloka i fo ra visit .

Makan i Ka l Hollcopter s - Makan i Ka i Ai rCharter s ~ K o Olin a Helicopter s - Pacifi c Ai rExpres s - Hawai i Aviatio n Service s