BEFORETHE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Essential Air Service at EXCURSION INLET, ALASKA KAKE, ALASKA Under 49 U.S.C. 41731 et. Seq. September21, 2012

Docket DOT-OST-2002-12014 Docket DOT-OST-2008-0217

PETITION OF SEAPORTAIRLINES, INC D/8/AWINGS OFALASKA FOR RECONSIDERATION OF THE SELECTION OF AIR EXCURSIONSTO PROVIDE ESSENTIALAIR SERVICEAT KAKE AND EXCURSION INLET, ALASKA

SeaPort Airlines, Inc., doing business as "Wings of Alaska" in Southeast Alaska (hereafter referred to as "SeaPort") respectfully requests that the Department ofTransportation (hereafter referr.ed to as "the Department") reconsider its selection of Air Excursions, LLC (hereafter referred to as "Air Excursions") and for the reasons outlined herein, that the Department select SeaPort to provide Essential Air Service (EAS) at Excursion Inlet and Kake, Alaska. 1 Specifically, SeaPort believes that the basis for selecting Air Excursions as explained in Order 2012-9-8 includes facts that are incorrect, incomplete, or mischaracterized. Equally as important, four months elapsed between carrier submission of proposals on May 8, 2012 and selection of Air Excursions in Order 2012-9-8 on September 8, 2012. During this period, significant events occurred that were not reflected in carrier proposals, and therefore communities were unable to comment on. In SeaPort's view, these events are materially sufficient such that the communities should be provided the opportunity to comment and those comments should be considered by the Department in its carrier selection for EAS at Kake and Excursion Inlet. In support ofits request, SeaPortstatesthefollowing:

1 Order2012-9-8Petition ofSeaPortAirlines, Inc. for Reconsideration Docket DOT-OST-2002-12014 & Docket DOT-OST-2008-0217 Page 2
Community Support in Kake Favors SeaPort

In Order 2012-9-8, the Department explained the selection ofAir Excursion to provide EAS at Kake by stating: "Aftercarefullyreviewing allofthe civic comments, itappears that the preponderance of community views support Air Excursions. Therefore, we will re-select Air Excursions atKake." SeaPort reviewed every comment submitted to the Docketand calculated thatsupport in Kake actuallyfavored SeaPortoverAir Excursions.2 

### Summary ofKake Community Comments Submittedto OST-2008-0217 SUBMITIED COMMENTS SUPPORTING: Date Submitted by Air Excursions SeaPort Non-Committal 5/6/2012 Nancy Hyke X 5/7/2012 John Parton X 5/16/2012 City of Kake X 5/29/2012 Kake City School District X 5/31/2012 Kake Tribal Corporation X 6/1/2012 Organized Village of Kake (OVK) X 6/4/2012 State ofAlaska, DOT 4 X 6/14/2012 City Manager, City of Kake X 7/3/2012 Margaret Mach X 7/3/2012 Bonita Friday X 7/6/2012 Loren Jackson, Sr X 7/6/2012 Carol Ann Williams X 7/6/2012 Wanda Friday X 7/9/2012 Brienna Friday X TOTAL 5 7 2

### Note~''fh~t support for SeaPort at Kake spiked in early July, shortly after the beach landing ofan Air Excursions aircraft on June 25, 2012 classified by the NTSB as an accident. In total, since the deadline for both communities to submit their comments on carrier proposals, aircraft operated by Air Excursions have been involved in two accidents and one incident (see discussion below). This has galvanized support for selection of SeaPort, in Kake, including entitiesthatearliersupported Air Excursions.

2 On May 16, the City of Kake supported the selection of SeaPort to provide EAS. Subsequently, the City of Kake filed a letterthatdid notwithdraw supportfor SeaPort, but acknowledged supportforAir Excursions by the Organized Village of Kake and Kake City School District.Petition ofSeaPortAirlines, Inc. for Reconsideration Docket DOT-OST-2002-12014 & Docket DOT-OST-2008-0217 Page 3

To this point, discussions with Kake City Council, Kake Community School District, and Kake Tribal Corporation have indicated they will reaffirm existing §upport for SeaPort or withdraw support for Air Excursions in favor of SeaPort. It is anticipated that each will shortly file comments with the Department in this regard. Discussions with the Organized Village of Kake (OVK) indicate that it too is likely to shift support to SeaPort, howeverthis will be subject to formal discussion at the next Tribal Council meeting in a few weeks. Given the shift in community sentiment and with the tabulation of support for SeaPort on the table above, we believe thatthe Department should reconsider its selection ofAir Excursions and instead select SeaPortto provide EAS at Kake and Excursion Inlet.

The Department Mischaracterized an Accident Involving an Air Excursions Aircraftand Excluded Mention ofAnotherAccidentand an Incident Involving Air Excursions Aircrafts

In Order2012-9-8, footnote #4 states: The National Transportation SafetyBoard(NTSB) and the FAA are currently in the preliminary states ofan investigation ofan Air Excursions incidenton August3, 2012. Should the investigation final reports reveal findings adverse to the aircarrier, we wouldreassess the aircarrier's fitness in lightofthose findings.3 The footnote's characterization ofthe August 2, 2012 event as an "incident" is incorrect. Destruction of the aircraft and fatality of the pilot (who was the only occupant) is not an "incident" but rather is an "accident" as defined by the National Transportation Safety Board (NTSB) and, SeaPort believes, this difference is significant enough to warrant correction of footnote#4.4 More importantly, however, theAugust 2 accident is not a single event. Within a 45 day period, aircraft operated by Air Excursions were involved in a total of two accidents and one incident, summarized as follows:

3 The Department states the accident occurred on August 3, however NTSB and local media reports have the event occurring on August 2.
4 www.ntsb.gov/report referenced on September 14, 2012 states: "An accident is defined as an occurrence associated with the operation ofan aircraftthat takes place between the time anyperson boards the aircraftwith the intention offlightandallsuchpersonshave disembarked, andin which anypersonsuffers death orserious injury, orin which the aircraft receives substantial damage. An incidentis an occurrence otherthan an accident that affects orcould.affectthe safetyofoperations."Petition ofSeaPortAirlines, Inc. for Reconsideration Docket DOT-OST-2002-12014 & Docket DOT-OST-2008-0217 Page 4

• June 25, 2012: An Air Excursionsflightwith one pilot and three passengers experienced a loss of engine power and the aircraft experienced shaking. The pilot performed a forced landing on beach approximately 9 miles from Gustavus Airport. There were no injuries but the aircraft sustained substantial damage.5 This is defined by the NTSB as an accident.

• July 12, 2012: An Air Excursions flight with one pilot and five passengers completed an engine-out landing at Gustavus Airport that had been preceded by a loss of all oil pressure. The pilot and five passengers evacuated safely.6 This is defined by the NTSB as an incident.

• August 2, 2012: An Air Excursions flight operating between Juneau and Gustavus with one pilot and no passengers was reported overdue. Approximately six hours later the wreckage ofthe aircraft and body ofthe pilot was located in a denselywood area along the airplane's route to its destination. The pilot has not reported any mechanical anomalies and the cause ofthe accident is under investigation.7 This is defined by the NTSB as an accident.
In SeaPort's view, the occurrence of two accidents (one being fatal) and one incident between submission of carrier proposals and carrier selection constitutes a material change to the information on which communities were·asked to comment. Accordingly, we believe thatthe Department should reconsider its selection of Air Excursions and that this reconsideration should include information contained in this petition as well as comments that SeaPort expects the Departmentwill receive shortly from entities and citizens representing Kake and, potentially, Excursion lnlet. 8

The Department's Statement Regarding Reliability ofAir Excursions Glosses Overthe High Numberof Flights Operatedwith Small Aircraft

In Order 2012-9-8, the Department stated: "Air Excursions is an experienced EAS air carrierin Alaska with

### a proven recordofreliability."

5 NTSB Preliminary Report 10: ANC12LA05B

6 FAAASIAS Brief Report No. 2012071204S291

7 NTSB Preliminary Report ID: ANC12FA083

8 Forthe record, SeaPortwould like to state that discussion ofanother carrier's safety record as among the reasons to request the Department reconsider its carrier selection is not an action that was taken lightly or without considerable thought. We are aware of the challenges inherent to operating in Southeast Alaska and, like many of our competitors, have committed significant resources to safety programs such as Medallion Foundation. Finally, while the search was conducted for the Air Excursions aircraft on August 2, SeaPort employees stood with their colleagues from Air Excursions providing whatever assistance and supportthey reasonably could.Petition ofSeaPortAirlines, Inc. for Reconsideration Docket DOT-OST-2002-12014 & Docket DOT-OST-2008-0217 Page 5

A review by SeaPort of T-100 data from September 2010 ,through December 2011 indicates that Air Excursions did indeed achieve a 100% completion .factor at Kake. As SeaPort's EAS proposal submitted on May 8, 2012 noted, l:lowever, this same data indicates only 12% of Air Excursions flights at Kake during the same period were operated using twinengine Piper Chieftain aircraft. This is despite the fact in its 2010 proposal Air Excursions went to great lengths positioning the Piper Chieftain as supposedly superior to the modern, turbinepowered Cessna Caravan proposed by SeaPort.9 SeaPort believes that if the Department wishes to rely on completion factor for its selection ofAir Excursions at Kake, equalweightshould be givento thatfact 88% offlightswere operated with smaller Piper Cherokee aircraft. This is particularly relevant given citizen commentsfiled to the Docketthat mention aircraftsize:

"I feel that Wings has more to offerto ourcommunityand we would benefit vety much having them as ouraircarrier. A lotofourmail willbe deliveredsoonerand luggage wouldbe on the sameplane. "10 "They[AIR EXCURSIONS]also onlyuse theirsmallcrafts. "11
While there are periods during the year when demand at Kake does not economically justify the larger Piper Chieftain, it is highly questionable whetherthis was true 88% ofthe time between September 2010 and December 2011. SeaPort believes the Department and community are entitled to clarification from Air Excursions as to the reason for such a low percentage offlights being operated with the PiperChieftain. In addition and anecdotally, SeaPort has been told that Air Excursions operated its single Piper Chieftain very infrequently to Kake (if at all) during summer 2012 because it was deployed to support a contractwith atour operator. Iftrue, this would mean thatAir Excursions was unable to provide service promised to the Kake community and contracted by the Department during the previous EAS cycle because it had committed the asset to another (and

9 Proposal ofSeaPortAirlines to Provide EssentialAir Service at Kake and Excursion Inlet, Alaska, pg.3

1

## °Comments ofBrienr.1a Friday, DOT-OST-2008-0217-0043

11 Comments ofCarol Ann Williams, DOT-OST-2008-0217-0045.Petition ofSeaPortAirlines, Inc. for Reconsideration Docket DOT-OST-2002-12014 & Docket DOT-OST-2008-0217 Page 6
potentially more lucrative) contract. 12 Such a reality would not be in the spirit of the EAS program and call into question characterization ofAir Excursions as a having "a proven record ofreliability." Given thetypical delay in release ofT-100 data to the public, SeaPortcannot providethe Department with summer 2012 data to verify what it has been told. However, the Department has access to T-100 data and, therefore, is able to conduct analysis that would a) determine how often the Piper Chieftain was used on flights at Kake and b) whether a pattern existed for Piper Chieftain operations elsewhere (scheduled and non-scheduled) that would either support or invalidate information provided to SeaPortthat the aircraftwas used primarily to serve atour operatorcontract atthe expense ofEAS obligations. 13

Air Excursions Is NotA "Locally Owned" Airline

In Order 2012-9-8 selecting Air Excursions for EAS at Excursion Inlet, the Department notes comments submitted on behalf of Excursion Inlet residents by Mr. Bruce Gordon. These comments did not support any one carrier but did state a preference that the carrier be locally owned and operated. In the Order, the Department states: "Of the three air carriers that submittedproposals atExcursion Inlet, AirExcursions and WardAirare locallyowned." The Department's statement that Air Excursions is locally owned is incorrect. Of the three carriersthat submitted proposals, onlyWard Air can claim that it is locally owned. With respect to Air Excursions, that carrier was purchased earlierthis year by the same group which in April 2011 purchased Alaska Seaplanes Service. The largest interest in that group is believed to be held by Graford Aviation Investments which, according to the Linkedln profile of Kent Graford, is headquartered in Portland, Oregon. 14 Air Excursions can only be characterized as locally owned is to ignore Mr. Graford's recent purchase ofthe carrier and the factthatthe base ofhis business activities is 1,017 miles

12 Order2010-8-9
13 We would caution against claim that demand during the peak summer months did not warrant use of the Piper Chieftain and, therefore, Kake flights were operated using smaller Piper Cherokees and the Piper Chieftain redeployed elsewhere. Demand can easily be suppressed by simply by limiting booking levels (i.e., "lowerthe lid") to those ofthe smaller aircraft and allowing the Piper Chieftain to be deployed elsewhere.

14 Portland, OR was listed as the location of Graford Aviation Investments as of September 15, 2012 on Kent

. Graford's Linkedln profile page. Mr. Graford was the founding President& CEO ofSeaPortAirlinesPetition ofSeaPortAirlines, Inc. for Reconsideration Docket DOT-OST-2002-12014 & Docket DOT-OST-2008-0217 Page 7

away in Portland, Oregon. Simply, Air Excursions is no more locally owned (i.e., Southeast Alaska) than is SeaPort. With regard to ownership and management of SeaPort, for a number of years the company has been structured so as to provide operations from our base in Juneau with relative autonomy, including by a Regional Manager

- Alaska who is empowered by headquarters to ensure operations are conducted in a mannerthat meetsthe unique operating environment and customer requirements in Southeast Alaska. Among this person's responsibilities are acting as the primary liaison with community leaders, tribal governments, U.S. Postal Service, and major tour operators and lodges; overseeing the reservation activities (100% of calls are answered in Southeast Alaska); and analyzing customer service failures, ensuring resolution to the customer's satisfaction, and implementing policies and procedure that to avoid reoccurrence and which will be effective in SoutheastAlaska. Therefore, if preference by Excursion Inlet for a locally-owned airline assumes a nonlocal company would be unresponsivetothe needs of customers in SoutheastAlaska, SeaPort has in place an effective structure that addresses these concerns. Therefore, and with the other factors surrounding Air Excursion operations are considered, SeaPort respectfully requests that the Department reconsider and reselect SeaPortAirlinesto provide EAS at Excursion Inlet.

Summation

In summary, the accidents and incident involving aircraft operated by Air Excursions represent a major change from the proposals submitted by carriers four months ago and on which comments were sought from the communities of Kake and Excursion Inlet. The galvanization of support for SeaPort, particularly in Kake, following the Department's selection of Air Excursions strongly indicates community sentiment echoing that of SeaPort in in this petition. In addition, there are factual points in Order 2012-9-8 that SeaPort believes to be incorrect or incomplete and, when considered along the operational issues ofAir Excursions, should be clarified and corrected for the benefit of the communities that depend on EAS for
access to services and businesses in Juneau, delivery ofmail and cargo, and connectivityto the national airtransportation system.Petition ofSeaPortAirlines, Inc. for Reconsideration Docket DOT-OST-2002-12014 & Docket DOT-OST-2008-0217 Page 8

For the foregoing reasons, SeaPort respectfully urges the Department to reconsider its selection of Air Excursions to provide EAS at Kake and Excursion Inlet, Alaska and instead select SeaPort.
Respectfully submitted, Timothy F Sieber Vice President- Commercial SEAPORTAIRLINES, INC. D/B/AWINGS OF ALASKA 7505 NE AirportWay Portland International Airport Portland, Oregon 97218 (971) 340-1716 Email: tsieber@seagortair.com September21 ,2012Petition ofSeaPortAirlines, Inc. for Reconsideration Docket DOT-OST-2002-12014& Docket DOT-OST-2008-0217 Page 9

PETITION OF SEAPORTAIRLINES, INC D/8/AWINGS OF ALASKA FORTHE DEPARTMENTTO RECONSIDER SELECTION OFAIR EXCURSIONSTO PROVIDE ESSENTIALAIR SERVICEAT KAKE AND EXCURSION INLET, ALASKA

City Manager, City of Kake citymanager@cityofkake.org
Mr. GaryWilliams SERVICE LIST

Executive Director, Organized Village of Kake gewilliams@kakefirstnation.org Vicki Wolfe President & CEO, Kake Tribal Corporation vicki.wolfe@kaketribalcorg.com
Mr. Bruce Gordon, Excursion Inlet bruce@btpost.net

WardAir Inc. tom@WardAir.com U.S. Department ofTransportation, Essential Air Service Division dennis.devany@dotgov michaeL

### f.martin@dotgov