# P^^(Po>^l/tU*--^^^'' ^ ^

Befor e th e EA S & Domesti c Analysi s Division , X-5 3 OfHc e o f Aviatio n Analysis , Roo m640 1 Departmen t

o f Transportatio n 40 0 7t h Street , S.W
. Washington , D.C
. 2059 0

I n th e Matte r

of : ESSENTIA L AI RSERVIC E A T LAK E MINCHUMINA , ALASK A Docke t OS T 2008-023 7



## Proposa l t o Provid e Essentia l Ai r Servic e a t

Minchumina , Alask a Warbelow' s herby submit s it s proposa l t o provid e subsidize dservic e t o Minchumina , Alask afor

atwo-year

period , beginnin g Novembe r 1 , 2010
. Th e propose dservic e i s direc t t o Minchumin afro mFairbanks , an dreturn . N o uplin e o r downlin e point s ar e contemplate dat thi s time
. 

## Mai l Rate s Orde r 2010-3-1 8 se t

ne w mai l rate s tha t

w e hav e use dt o calculat e mai l revenu e ove r th e subsid y period :

RT M $13.478 2 Terminal/To n Enplane d$745.0 1 Fairbanks-Minchumin a8 2 mile s Therefor e th e P-13 5 rat e fo r Fairbanks/Minchumin ai s $0.9 3 /poun dan dw e hav e no t projecte dan y chang e ove r th e subsid y period
. Curren t passenge r

fare s an dcarg o rate s ar e use di n thes e calculations
. Thes e reflec t n o chang e ove r

th e curren t

subsid y period
.

## Schedul e

Warbelow' s propose ddevelopin g aschedul e with inpu t fro mth e community
. Sinc e th e proposa l contemplate s tha t som e flight s wil l b e flow n with asingle engin e VFRaircraf t i t woul d b e reasonabl e t o pla n amornin g o r mi dda y schedul e a

t leas t durin g th e winte r

month s whe n daylight i s limited
. W e understan dth e curren t schedul e i s o n Tuesda y midday
. I f tha t i s desirabl e t o th e community , w e woul dpropos e t o continu e aTuesda y schedule
. However , w e woul dmee t with th e communit y t o conside r thei r input
. Th e RF P leave s ope n th e frequenc y o f service , i e twic e weekl y wit h asingl e engin e aircraf t o r onc e weekl y wit h a

n IFRo r muli-engin e aircraft
. Whe n schedule dservic e i s .onl y onc e aweek , w e believ e i t i s difficul t

t o buil dtraffic , especiall y touris mrelate dtraffic
. O n th e othe r hand , whil e Lak e Minchumin ai s arelativel y eas y VF Rrout e withou t

hig h terrain , weathe r i s ofte n an issu e becaus e it i s essentiall y i n th e pas s (albei t awid e fla

t pass ) betwee n th e Kantishn aan dKuskokwi mdrainages
. Thi s argue s for IF Rcapabl e aircraft
. Warbelow' s offer s an y combinatio n o f

IF Ro r VFRaircraf

t an dfrequenc y tha t

th e Departmen t

an dth e communit y migh t choose
. It i s ou r understandin g tha t

th e community , whil e desirin g reliabl e an dfrequen t service , i s als o concerne dabou t

th e cost , eve n thoug h th e subsid y i s throug h th e EA S progra man dno t directl y pai db y th e communit y members
. Give n that , w e woul drecommen dabas e lin e servic e o f onc e awee k

with asingle engin e VF Raircraft , with flexibility t o provid e twic e awee k servic e whe n deman dwarrant s an dIFRservic e whe n condition s require
. On e concep t migh t b e t o authoriz e amaximu mcost , whic h ca n b e dynamicall y allocate dbetwee n mor e frequen t servic e whe n deman dwarrant s o r IFRaircraf

t whe n condition s require
. A baselin e schedul e o n Tuesda y coul db e supplemente dwit h asecon dfligh t o n Thursda y say whe n thre e o r mor e PEQ' s ca n b e schedule dfo r

th e Thursda y flight
. Thi s optio n migh t b e limite dt o no t

mor e than 2 6 flights pe r year . Similarly , alarge r

an dIF Rcapabl e aircraf

t coul db e use du p t o amaximu mnumbe r o f flight s pe r

yea r a s condition s require
.



## Projecte dDeman d Sinc e Warbelow' s i s no t

th e incumben t

carrie r i n Minchumina , w e ar e uncertai n o f th e expecte ddemand
. Th e traffi c dat aprovide di n thi s reques t for proposal s appear s t o includ e al l deplanement s a

t Minchumina , an dasubstantial part o f th e passenge r

traffi c appear s t o hav e bee n move db y charte r

flights othe r

tha n th e incumben t

subsidize dcarrie r

durin g th e curren t

period
. I t i s no t clear t o what exten t charter s woul dcontinue , s o i t i s difficul t

t o predic t

loa dfactor s o n th e schedule dflights. Warbelow' s ha s atrac k

recor do f developin g touris mproduct s i n rura l villages
. A significan t

part o f ou r busines s pla n i n Lak e Minchumin ai s t o develo p touris man dothe r economi c developmen t

idea s tha t

woul dresul t

i n increase dtraffi c o n th e route . Base do n ou rdiscussion s with som e Minchumin aresidents , thi s woul db e adesirabl e outcome , a s lon g a s it

wa s coordinate dwith th e loca l community
. Whil e w e ar e unabl e t o provid e fir mestimates , w e hav e assume di n ou r proposa l tha t

w e wil l b e successfu l i n generatin g ne w revenu e source s if w e ar e selecte da s th e EA S carrie r t o Minchumina
. 

## Projecte dExpense s Actua l cost s a s reporte do n ou r F 2 hav e continue dt o increas e ove r th e las t tw o years , with th e exceptio n o f

hul l an dliabilit y insuranc e whic h i s a t th e botto mo f

asof t market
. Fue l cost s hav e bee n o n a

n upwar dtren dove r

th e pas t year after declining , an dw e expec t ma y continu e t o increas e a s th e econom y recover s fro mrecession
. W e hav e not projecte dan y fue l cos t increases
. Include dher e ar e ou r single engin e costs :

Cessn a Singl e Engin e pe r Blocl < Hou r Allocate d Blocl < Hour s Direc t Expens e Pilo t & Co-pilo t Fue l & Oil Othe r Maintenanc e Depreciation/Renta l Tota l Direc t Expens e Indirec t Expens e

$135.5 1 prh r Tota l Operatin g Cos t Profi t Elemen t o f TO C 0.1 0 Tota l Economi c Cos t 147. 7 69.5 4 51.7 7 16.2 5 131.4 1 80.0 0 10271.0 6

7646.4 3 2400.1 3 19409.2 6 11816.0 0 $51,542.8 7

20014.8 3 71557.7 0 7155.7 7 $78,713.4 7 

## Requeste dSubsid y Calculatio n W e propos e afare o f

$224.0 0 pe r

perso n roun dtri p ($112.0 0 pe r perso n on e way ) t o b e consisten t wit h ou r fare s i n similar

EA S subsidize dmarket s serve db y Warbelow's , adjuste dfor th e lengt h o f flight. Thi s fare woul dinclud e 40 #o f allowe dbaggag e a

t n o additiona l cost . Freigh t rate s ar e propose da

t $0.5 8 pe r

pound
. I n othe r

subsidize dmarket s serve db y Warbelow's , w e hav e typicall y not change dfare s o r

freigh t rate s substantiall y i

f a t al l durin g th e subsid y period
.Anecdota l evidenc e suggest s tha t th e curren t

fare structur e an dschedul e ha s cause dLak e Minchumin aresident s t o charte r rathe r tha n usin g th e schedule dservice
. W e therefor e propos e a somewha t lowe r far e tha n th e incumben t

carrie r i n a n attemp t

t o direc t traffi c ont o th e schedule d flights, whic h shoul dhel p t o reduc e th e subsid y nee di n th e lon g run . Give n th e man y uncertaintie s o n th e revenu e side , w e hav e foun di t difficul t t o accuratel y estimat e th e expecte drevenue . W e therefor e offer th e followin g withou t

specifi c calculation s t o support ou r revenu e number s sinc e the y woul dsimpl y creat e afals e sens e o f certainty : Optio n 1
. (Curren t

servic e level ) Singl e Engin e VFRAircraf t i f al l passenger s an dmail/freigh t ca n b e accommodate d$60 0 subsid y pe r tri p IF RAircraf t with 9 insure d seat s (Cessn aCarava n o r Pipe r PA S 1-350 ) if

loa d o r weathe r dictat e $90 0 subsid y pe r tri p Thi s proposa l i s predicate do n aminimu mo f 2 6 flights with eac h aircraf t type . Tota l Annua l Subsid y reques t $39,00 0 Optio n 2
. (VFR/IF RFlexibl e increas e i n frequenc y a s deman dwarrants ) Aircraf t a s require db y loa dan dweather , 7 8 tota l flights pe r year , 3 9 flights with eac h aircraf t type . Baselin e servic e o f onc e pe r week , secon dflight

a s deman dwarrants . Thi s woul dallo w for twic e awee k

servic e u p t o hal f

th e weeks
. W e woul dpropos e tha t th e secondflight

run s onl y i f 3 PEQ s o r

mor e ar e schedule do n eithe r th e inboun do r

outboun dleg
. Tota l Annua l Subsid y requestpai da t $1,12 5 pe r

wee k $58,50 0 Optio n 3
. (Hig h frequenc y VF Ronl y service ) Singl e Engin e VF RAircraf t $60 0 subsid y pe r tri p Thi s proposa l i s predicate do n twic e weekl y servic e an d104 flights pe r year Tota l Annua l Subsid y reques t $62,40 0 Optio n 4
. (Statu s qu o frequenc y wit h al l IF Rservice ) IFRAircraf

t (Cessn aCarava n o r

Pipe r PA31-350 ) $90 0 subsid y pe r tri p Thi s proposa l i s predicate do n onc e pe r wee k servic e an d5 2 flights pe r year Tota l Annua l Subsid y reques t $46,80 0W e than k yo u fo r you r consideratio n o f

thi s proposa l an dw e hop e t o initiat e servic e t o th e Lak e Minchumin acommunit y for th e tw o year

perio dbeginnin g November , 2010
. Sincerely , Warbelow' s Ai r

Ventures , Inc
. 375 8 Universit y Avenu e South Fairbanks , Alask a

Arthu r Warbelow , Presiden t art@warbelows.co m (907 ) 378-720 3