Before the United States Department of Transportation

October 31, 2013

Proposal to Provide Essential Air Service at

KALUAPAPA, HAWAII

Under 49 U.S.C. 41731 et seq.

Docket OST-2000-6773

Proposal of SeaPort Airlines, Inc.

to Provide Essential Air Service at

Kaluapapa, Hawaii

By Order 2013-10-3, the U.S. Department of Transportation (“the Department”) requested proposals 

for Essential Air Service (EAS) at Kaluapapa, Hawaii no later than October 31, 2013. 

In response, SeaPort Airlines, Inc. respectfully submits this proposal to provide subsidized essential 

air service that connects Kaluapapa with Honolulu, Oahu and Kaunakakai, Molokai. This proposal is 

for a two-year period at an annual subsidy rate of $952,018. 

After this proposal is docketed, SeaPort Airlines will contact the Kaluapapa community to schedule a 

meeting with the community, explain our proposal in detail, and answer any questions. In the interim 

and throughout the carrier selection process, questions regarding this proposal should be directed 

to:

Timothy Sieber

Executive Vice President

SeaPort Airlines, Inc.

7505 NE Airport Way

Portland, OR 97218

(971) 340-1716

tsieber@seaportair.com
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Description of Proposed Service

Company Introduction

SeaPort Airlines, Inc. is a FAA certified scheduled airline based in Portland, Oregon with 30 years of 

experience in commercial aviation. In addition to Portland, Oregon (PDX), the company has 

operational bases at Memphis, Tennessee (MEM); San Diego, California (SAN); and Juneau, Alaska

(JNU). Upon award of the EAS contract to serve Kaluapapa, SeaPort would open an additional base 

at Honolulu International Airport (HNL).

Our skilled 200 professionals provide service to 21 cities across nine states with a fleet of 15 aircraft. 

The company’s route map as of October 31, 2013 is provided below:

A primary focus of SeaPort Airlines is to provide affordable and reliable air service to small and rural 

communities across America. Service to eight of the communities on our route map is provided 

under the EAS program: Athens, Georgia; Pendleton, Oregon; El Dorado, Hot Springs, and 

Harrison, Arkansas; Salina, Kansas; Jackson, Tennessee; and Imperial/El Centro, California.

Once SeaPort Airlines is awarded an EAS contract and service is launched, we develop a 

partnership with each community by participating in local events, donation of tickets, on-going
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dialogue with airport management and community leaders, and presentations to civic clubs and 

other similar organizations. We also have a reputation of being responsive to community needs, 

affording them the opportunity to comment on schedule and fare changes before they become 

effective. It is SeaPort’s view that airlines and communities, who we view as our customer, need not 

be at odds with each other. We have a shared interest in fostering grass roots support for local air 

service, which therefore builds enplanements to the level needed assuring continued eligibility in the 

EAS program.

SeaPort is especially aware of the unique location and location of Kalaupapa peninsula. We are 

appreciative of the unique needs of the residents of Kalaupapa as our company President, Rob 

McKinney, provided air service to the community with another air carrier from 2002-2005. He has 

been to the community many times and was privileged with a visit to Father Damien’s church. 

Our commitment to EAS communities is demonstrated by the fact that in every “mainland” 

community that SeaPort serves in the EAS program, we have been re-selected for subsequent 

terms at the end of our first contract period. This includes reselection during 2012 to four-year 

contract renewals (rather than the standard two-years) at both Salina, Kansas and Pendleton, 

Oregon, after both communities voiced their overwhelming support for SeaPort Airlines. Similarly, 

we were selected for a four-year renewal at the Arkansas communities of El Dorado, Harrison, and 

Hot Springs, effective November 1, 2013.

Aircraft

SeaPort Airlines’ proposal at Kaluapapa contemplates operations with Cessna Caravans which 

will allow us to offer safe, comfortable, and affordable air transportation in a modern and 

economical aircraft. Travelers to and from Kaluapapa are familiar with the Cessna Caravan, as 

this is the same aircraft operated by the current EAS provider.

Produced in the USA, the “Caravan” was originally designed in the 1980’s to replace an aging 

fleet of piston-powered aircraft, such as the De Havilland Otter and Piper Chieftain. Over 2,000 

Caravans have been built logging a total of over 12.5 million flight hours. The Caravan is 

certified for single-pilot operation; however SeaPort typically operates with both a Captain and 

First Officer.
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The large cargo pod on the Caravan allows for more baggage than can be accommodated on 

older piston twins (i.e., Piper Chieftain and Cessna 402) and allows us to segregate passenger 

baggage for security purposes.1

Proposed Service Pattern

SeaPort’s proposal to provide EAS at Kaluapapa includes 12 weekly nonstop roundtrips to Honolulu 

and 18 weekly to Molokai (“topside”). An Illustrative schedule for the service pattern in this proposal 

is provided below. 

If selected to provide EAS at Kaluapapa, SeaPort Airlines will solicit community comment on 

proposed flight schedules prior to making them available for sale to the public. As much as practical, 

these comments will be incorporated into the final schedule and factoring any impact on flight 

schedules at Athens. 

Fares & Pricing

All of SeaPort’s fares are priced on a one-way basis, including all taxes and fees, and structured as 

follows:

 The highest price point (branded as “FULLflex”) provides our customers with total flexibility 

to change their travel plans or, if they choose, obtain a full refund without incurring a service 

charge. 

 The lowest price point (branded as “NOflex”) targets customers who are certain about their 

travel plans. This fare requires an advance purchase of 14-days, is non-refundable, and 

does not permit any changes from the original booked itinerary. 

 In between, SeaPort offers a range of fares (“FREE2flex” and “flex4FEE”) with price points

based on how much flexibility a customer has in their travel plans. Except for the two highest

price points, fares are also subject to capacity controls meaning that the farther in advance a 

reservation is made, the more likely a customer is to get a lower fare. 

The table below summarizes the range of proposed ticket prices in the Kaluapapa market, as of the 

date of this proposal and after expiration of introductory fares, along with the rules and restrictions 

applicable to each price point.

 1 The cargo pod on the Cessna Caravan has a maximum capacity of 111 cubic feet and 1,090 pounds. In 

comparison, the Piper Chieftain has a maximum capacity of 65 cubic feet and 700 pounds in its nose compartment 

and two wing lockers.

Depart Arrive Frequency Depart Arrive Frequency

7:25am 7:35am ExSatSun 8:00am 8:10am ExSatSun

1:25pm 1:35pm Daily 2:30pm 2:40pm Daily

3:30pm 3:40pm Daily 4:00pm 4:10pm Daily

8:25am 9:05am ExSatSun 6:30am 7:10am ExSatSun

4:25pm 6:00pm Daily 12:30pm 1:10pm Daily

Kaluapapa - Kaunakakai Kaunakakai - Kaluapapa

Kaluapapa - Honolulu Honolulu - Kaluapapa
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SeaPort Airlines’ calculation of subsidy requirements is based on a projection of an average ticket 

price of $33.12 and $62.21 to Molokai and Honolulu, respectively. No local passengers or revenue 

are assumed between Kaunakakai and Honolulu.

During the first 30 days of service, SeaPort Airlines would offer an introductory fare including all 

taxes and fees) to/from Molokai of $29 and to/from Honolulu of $49. This fare will be available on 

every seat and every flight during the period. 

Interline Connectivity & GDS Display

SeaPort Airlines tickets may be purchased by calling our toll-free reservation number, online at 

www.SeaPortAirlines.com, at any travel agent connected to the major global distribution systems 

(GDS), or all of the major online travel agencies and meta-searchers such as Orbitz, Travelocity, 

Expedia, Kayak, Hipmunk, and CheapoAir. 

The company recently announced that it will migrate to the Amadeus Altea reservation platform on 

March 22, 2014 (see “Attachment A”). With this new system, SeaPort will have unsurpassed 

capability compared to other regional airlines with regard to interline ticketing, through baggage 

check-in, e-commerce, and Inter-Airline Thru Check-In (IATCI). Most importantly, with the new 

system the company will launch its first full interline agreement on March 22, 2014 with a major 

airline serving Hawaii, to be followed by a second carrier agreement on May 1, 2014. The company 

is in discussions with two other major carriers regarding agreements for implementation later in 

2014.

Subsidy Request Calculations

The following pages contain the calculations that support SeaPort Airlines’ request for subsidy to 

provide EAS at Kaluapapa, Hawaii. 

Respectfully submitted,

Timothy Sieber

Vice President – Commercial

SeaPort Airlines, Inc.

October 31, 2013

FULLflex FREE2flex flex4FEE Noflex

Kaluapapa - Kaunakakai $59 $39 $29 $19

Kaluapapa - Honolulu $109 $79 $49 $39

Advance Purchase 0 0 3-7 days 14 days

Change Fee $0 $0 $50 Not Permitted

Refundable Yes Yes No No
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Proforma Data

Operating Projections

Average Sector Length (sm) 30

Scheduled Departures 1,560

Scheduled Block Hours 572.0

Projected Completion Factor 98.5%

Projected Completed Departures 1,537

Projected Completed Block Hours 563.4

Passenger Projections

Projected Passengers 6,706

Passengers per Departure 4.4

Projected Average Fare $46.08

Revenue Passenger Miles (RPMs) 202,521

Available Seat Miles (ASMs) 371,243

Projected Load Factor 54.6%

Financial Projections

Revenues

Passenger Ticket Revenues $309,024

Ancillary Revenues $6,180

Total $315,204

Expenses

Flight Operations $87,894

Aircraft Ownership/Lease $300,000

Fuel & Oil $167,336

Sales & Marketing $40,000

Traffic Servicing $230,831

Insurance $21,973

Maintenance $107,050

Sub-Total - Direct $955,083

Indirect $251,795

Total Expenses $1,206,878

Projected Operating Profit/(Loss) ($891,674)

Subsidy Calculations

Operating Loss $891,674

Economic Return @ 5% $60,344

Required Subsidy $952,018

Subsidy per Departure $619.56

Subsidy per Passenger $141.97

Avg. Enplanements per Operational Day 10.7

18 Weekly RTs: Kalaupapa - Honolulu

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Aircraft Option: Cessna Caravan

12 Weekly RTs: Kalaupapa - Kaunakakai
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ATTACHMENT A
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