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e •••^ r •• 

us. Department of " 1200 New jersey Avenue, SE 

Transportation Washington, DC 2059 0 

Office of the Secretary 

of Transportation ' 

The Honorable Heather Hudson June 10, 2010 

P.O. Box 897 

Greenville, MS 38702-0897 

Dear Mayor Hudson: 

As you know, Mesaba Aviation, Inc., d/b/a Delta Connection (Mesaba), provides subsidized air 

service under the essential air service (EAS) program at Greenville. The Department's current 

contract with Mesaba calls for an annual subsidy of $1,355,693 to provide Greenville with 

fourteen nonstop round trips per week to Memphis with 34-seat Saab 340 aircraft, and expires 

September 30. In anticipation of the end of that contract, by Order 2010-5-2 the Department 

requested "best and final" proposals to serve Greenville for a new, two-year period, and we 

received timely-filed proposals from Mesaba and from Alaska Juneau Aeronautics,, Inc., d/b/a 

SeaPort Airlines (Seaport). 

My purpose in writing is to inform you of the results of each carrier's service and subsidy 

proposal before we submit a recommendation on the carrier-selection issue to the Assistant 

Secretary for Aviation and International Affairs for decision. Copies of each carrier's full 

proposal may be accessed online through the Department's Dockets Management System at 

http://www.regulations.gov/ by entering "DOT-OST 2008-0209" in the "enter Keyword or ID" 

field, so we will only summarize it here. 

SeaPort SeaPort proposes to provide a total of thirty (30) nonstop round trips per week: twelve 

to New Orleans and eighteen to Memphis — for a total annual subsidy of $2,339,882 the first 

year and $2,409,325 the second year. All service would be with 9-seat, single-engine, 

pressurized, turboprop Pilatus PC-12 aircraft. 

Mesaba Mesaba proposes to continue its current level of service — fourteen round trips per 

week to Memphis — for a total annual subsidy of $1,606,662. All service would operate on a 

nonstop basis with 34-seat Saab 340s, a twin-engine, turboprop, and pressurized aircraft. 

We note that Greenville's EAS calls for service with 15-seat, twin-engine aircraft. Thus it is 

likely we would only select SeaPort if the community waives those assurances. In that event, we 

would consider that waiver effective only for the two-year period of the SeaPort contract. 

Please note that the average passenger fares shown in the carriers' proposals do not necessarily 

reflect the average local fares passengers would pay, but rather reflect the prorated portion of the 

total ticket price, e.g., the Greenville - Memphis portion of a Greenville - Memphis - Atlanta 

ticket that the carrier would realize. Also, the implicit average fare, as reflected in the carriers' 

subsidy calculations, enclosed as Appendices A and B, is net of certain charges such as federal 

transportation security fees, excise and ticket taxes, and passenger facility charges. Of course, 

carriers have the discretion to charge fares they deem appropriate, and the passenger fares shown 

in Appendices A and B were developed for subsidy rate computation purposes only. Each 
carrier would have to realize passenger fares comparable to the averages shown ia its proposal-in 

order to achieve break-even or profitable operations even with subsidy. 

You should also note that the schedules submitted by the two carriers and reproduced in 

Appendix C are illustrative only, and the carrier selected may make schedule changes to reflect 

changing conditions, e.g., to better meet shifting connecting bank tim^s at the hub. The 

Department expects subsidized air carriers to maintain well-timed and well-spaced flights in 

order to ensure full compensation. 

We know this matter is important to you and we will act as quickly as possible upon receipt of your 

letter. In order to expedite the case, please submit your comments by email to EAS@dot.gov and to 

Kevin.Adams@dot.gov. by June 23. If you have any questions or do not wish to submit formal 

comments, please contact Kevin Adams at (202) 366-1047. 

Sincerely, 

G-A^ir 

^ ^ Dennis J. DeVany 

Chief, Essential Air Service Division 

Office of Aviation Analysis 

Enclosures 

cc: Airport Manager, Mesaba, SeaPort 
A^p e^ M i x A 

^"^V 

Revenua: 

Passenger 

Forecasted Passengers 

Average Revenue / Pax 

Estimate: Oct 2009 - Sept 2010 

Revenue / Pax Change 

Average Revenue / Pax 

Passenger Revenue 

Other Revenue: 

Ratio to Passenger Revenue 

Other Revenue 

Total Revenue 

Ooeratina E^^psfts^s 

Completed Block Hours 

Direct 

Flight Crews 

Fuel 

Gallons / Block Hour 

Into Plane Cost/Gallon 

Fuel Cost/Block Hour 

Insurance 

Maintenance 

Aircraft Lease 

Total Direct 

indirect Expense 

Total Operating Exp 

Return 

Total Economic Cost 

Surplus; (Deficit) 

Annual Subsidy 

Completed Departures 

Factor 

$ 75.58 

74 

$ 3.94 

$ 291.38 

$ 37.61 

$ 221.76 

$ 110.44 

39.00% 

5.00% 

N«wOrlmn« 

GLH-MSY 

4,725 

$ 99.99 

0.00% 

$ 99.99 

$ 472.453 

1.00% 

$ 4,725 

$ 477,178 

1,252.48 

94.665 

364.948 

47,106 

277,750 

138,324 

9 922.793 

359,889 

$ 1,282,682 

64,134 

$ 1,346.816 

$ (869,638) 

$ 869,838 

1,216 

Mamphl* 

GLH-MEM 

7,875 

$ 94.94 

0.00% 

$ 94.94 

$ 747,653 

• 1.00% 

S 7,477 

$ 755,130 

2,134.08 

161,298 

621,828 

80,263 

473,254 

235,688 

% 1,572.331 

613,209 

S 2,185.540 

109,277 

$ 2,294,817 

$(1,539,687) 

$1,539,687 

1,824 
% 

U->^o*-

Revenue: 

Passenger: 

Forecasted Passengers 

Average Revenue / Pax: 

.. Cun-ent: Oct 2008 - Sept 2009 

Revenue / Pax Change 

Average Revenue / Pax 

Passenger Revenue 

Other Revenue: 

Ratio to Passenger Revenue 

Other Revenue 

Total Revenue 

Qoeratina Exoenses 

Completed Block Hours 

Direct 

Flight Crews 

Fuel 

Gallons / Block Hour 

Into Plane Cost / Gallon 

Fuel Cost/Block Hour 

Insurance 

Maintenance 

Aircraft Lease 

Total Direct 

Indirect Expense 

Total Operating Exp 

Return 

Total Economic Cost 

Surplus / (Deficit) 

Annual Subsidy 

Completed Departures 

Factor 

$ 74.10 

74 

$ 3.75 

$ 277.50 

$ 37.61 

$ 211.20 

$ 110.44 

39.00% 

5.00% 

New Oricana 

GUH-MSY 

4.500 

$ 99.00 

1.00% 

$ 99.99 

$ 449.955 

1.00% 

$ 4.S00 

$ 454.455 

1,252.48 

92,809 

347,563 

47,106 

264,524 

138,324 

$ 890,326 

347.227 

$1,237,553 

61.878 

$ 1,299,431 

$ (844,976) 

$ 844,976 

1,216 

Mwnptils 

GLH-MEM 

7,500 

$ 94.00 

1.00% 

$ 94.94 

$ 712,050 

1.00% 

$ 7.121 

$ 719,171 

2,134.08 

158,135 

592,207 

80,263 

450,718 

235,688 

$ 1.517.011 

591,634 

$ 2,108,645 

105,432 

$ 2,214,077 

$(1,494,906) 

$ 1.494,906 

1,824 
EAS Station GLH 

Docket Number DOT-OST-2001-10685 

Hub ^ MEM 

Round trips per week 14 

Completion Factor 97% 

Total Passengeis 9,913 

Total Block Hours 1,272 

Total Departures . 1,416 

Passenger Revenue $743,505 

•Other Revenue 193,777 

Total Revenue $837,282 

Pilots $318,023 

Fuel $318,426 

Maintenance $545,856 

Aircraft $289,044 

Total Directs $1,471,349 

ToUl Indirects $839,709 

Total Operating $2,311,058 

Inflation Rate allowance 075% $17,333 

Profit 5.0% $irS,S53 

Economic Cost $2,443,944 

Re«}uired Annual Subsidy Rate $ 1,606,662 
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Appendix C 

Proposed Schedule 

Mesaba 

Page 2 of 2 

Greenville to Memphis Memphis to Greenville 

Dep. Arrival Dep. Arrival 

Time Time Time Time 

6:40 7:42 14:45 15:41 

16:55 17:52 19:20 20:11