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Denni s Devan y [ ; • , 01/11/201 0 Chief , Essentia l Ai r

Servic e Divisio n Offic e o f Aviatio n Analysi s . M . U.S . Departmen t

o f Transportatio n 1200Ne w Jerse y Avenue;-S E - - —. • Washington , D.C . 2059 0 Dea r Mr . Devany : Kodiak i s th e bypas s mai l hu b for 1 6 widel y dispersedbus h villages . Flyin g condition s ar e challenging , with asignifican t amoun t o f over-wate r

routing . Despit e th e numbe r o f village s serve dan ddifficul t flyin g conditions , Kodiak i s th e onl y hu b o f

it s siz e wher e n o turbo-pro p aircraf

t ar e currentl y used . Aircraf t suc h a s th e Cessn aCarava n provid e highl y reliabl e service , instrumen t capabilit y an dlowe r

uni t operatin g cost s ove r

time . Designate dEssentia l Ai r Service , b y definitio n enforce dsingle-carrie r service , provide s th e opportunit y o f

modernizin g operation s an dequipmen t t o th e remot e villages . Th e las t turbo-pro p servic e at

Kodiak wa s Carava n servic e provide db y th e existin g Essentia l Ai r Servic e carrier . Wit h hope s o f restorin g thi s hig h qualit y service , Servan t Ai r ha s propose dservic e t o Akhio k with th e Caravan . At

th e sam e time , Servan t

di dno t propos e servic e t o Karluk , whic h i s currentl y serve dwith subsid y b y Islan dAi r Service , s o that that carrie r coul dpursu e it s ow n plans . Servan t Ai r doe s no t currentl y serv e Karluk . Servan t Ai r i s wel l establishe da

t Akhio k b y virtu e o f

it s reliabl e an dflexibl e service . Servan t ha s investe di n th e facilitie s an dequipmen t t o servic e thi s market , an dthat significan t

investmen t

wil l b e los t

if i t doe s no t continu e t o b e th e designate dEssentia l Ai r Servic e provide r

at Akhiok . Th e propose dIslan dAi r servic e t o Akhio k

i s aste p backward . Rathe r

tha n flee t

an dservic e improvement . Islan dAi r simpl y proposes t o exten dth e utilizatio n o f

it s existin g flee t

an dfacilitie s b y addin g Akhiok . Obviousl y th e sam e economie s o f scal e woul doccu r

i f Servan t woul db e designate dth e Essentia l Ai r

Servic e carrie r

a t Akhio k an dKarluk . Give n tha t

i t i s unlikel y that Servant' s bi dfor

Carava n servic e wil l b e accepte da t Akhiok , an dtha t

additiona l aircraf

t an dfacility utilizatio n wil l reduc e Servant' s operatin g costs . Servan t withdraw s it s proposa l for

servic e t o Akhiok . Instead , Servan t propose s t o provid e th e require d Essentia l Ai r

Servic e t o Akhio k

an dKarlu k

fo r $ 0 a s th e designatedcarrie r for aperio d o f tw o years . Servant' s flee t

ha s mor e differen t

aircraf t types , an dit

can accommodat e th e variabl e deman dmor e efficiently . Th e additional servic e generate db y servin g Karlu k shoul d provid e greate r

utilizatio n o f

existin g facilitie s an daircraft . Specifically , Servan t Ai r propose s t o provid e thre e roun dtrip s o n ayea r aroun dbasi s t o Karlu k

with smal l aircraft , an dals o thre e roun dtrip s pe r wee k i n th e peak

seaso n an dtw o roun dtrip s pe r wee k i n th e off-pea

k seaso n with smal l aircraf t t o Akhio k

a s th e designatedEssentia l Ai r Servic e carrie r for th e tw o markets .Servan t i s willin g t o begi n thi s servic e o n Apri l 1 , 2010 , a t th e expiratio n o f

th e existin g rat e agreements . Whil e thi s bi drepresent s som e ris k for Servan t Air, it i s les s risky tha n losin g it s marke t

a t Akhiok . Servan t Ai r request s that

it b e designatedth e Essentia l Servic e Carrie r fo r Akhio k an d Karluk . Thi s proposa l save s th e Federa l governmen t subsid y expens e an dguarantee s th e curren t leve l o f communit y service . Servan t Ai r retain s it s righ t

t o reduc e servic e o n 90

- day s notic e i

f th e servic e situatio n a

t Akhio k an dKarlu k

changes . Respectfull y submitted . Terr y RCratt y D.O . Servan t Ai r Inc . 161 9 Airport

way Kodiak , AK . 9961 5