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Before the United States Department of TransportatioD ... , 7 

May 8, 2012 · · '" 

Proposal to Provide Essential Air Service at 

EXCURSION INLET, ALASKA 

KAKE,ALASKA 

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

Docket DOT -OST -2002-12014 

Docket DOT -OST -2008-0217 

Proposal to Provide Essential Air Service at 

Kake and Excursion Inlet, Alaska 

By Order 2012-4-13, the Department requested proposals for essential air service (EAS) at a 

Kake and Excursion Inlet, Alaska. 

Pursuant to that Order, SeaPort Airlines, Inc. dba Wings of Alaska respectfully submits this 

timely proposal to provide subsidized essential air service to the communities of Kake and 

Excursion Inlet, Alaska. For both communities we are proposing service to Juneau, Alaska and 

each proposal is presented on a stand-alone basis. 

Correspondence regarding this proposal should be directed to: 

Timothy Sieber 

Vice President - Strategy & Corporate Development 

SeaPort Airlines, Inc. 

7505 NE Airport Way 

Portland, OR 97218 

(971) 340-1716 

tsieber@seaportair.com 
May 8, 2012 

Wings of Alaska Background 

SeaPort Airlines, Inc. is a FAA certified scheduled airline founded 30 years ago and doing 

business in Southeast Alaska as Wings of Alaska. 

As of May 1, 2012, the approximately 165 professionals operate an average of 100 daily 

departures to 20 cities in eight states. Wings of Alaska provides scheduled passenger service, 

freight, and charter service provided between Juneau and Skagway, Haines, Hoonah, 

Gustavus, and weekly flights to Excursion Inlet. The Wings of Alaska fleet is presently of 

comprised of three Cessna Caravans and three Cessna C207s. 

The scale of SeaPort Airline, including operations conducted as Wings of Alaska, allows us to 

submit this proposal with economies of scale, operational and managerial experience, and a 

level of customer service that cannot be matched by any of our competitors in Southeast 

Alaska. 

Planned Aircraft & Operational Reliability 

Excursion Inlet 

Our proposal for Excursion Inlet assumes operation with the Cessna 207, the same aircraft type 

that we have reliably and safely served the market for numerous years. As we have done in the 

past, when the landing surface at Excursion Inlet is unusable and Wings of Alaska cannot 

provide service in a safe manner, we will work with another carrier (such as Alaska Seaplane 

Service or Ward Air) to provide service utilizing amphibious aircraft. 

The table below, however, illustrates that such occurrences are infrequent. During the 12-

months ending May 1, 2012, a total of 85 flights were scheduled. During this period, Wings of 

Alaska maintained a completion factor of 87.1% at Excursion Inlet during the current contract 

period. 

Wings of Alaska 

Operational Reliability Summary - YE May 1, 2012 

Flights Schedu led Operated on Postponed/Moved Outsourced Flyrng Scheduled Date to Another Day 

85 74 6 5 

100.0% 87.1% 7.1% 5.9% 

On only six days were flights moved to other than the scheduled day of operation and on only 

five occasions (less than 6%) during the past year was it necessary to out-source flying to an 

operator of amphibious aircraft. 

DOT OST-2002-12014 

DOT -OST -2008-0217 

Page 12 
May 8, 2012 

At Kake, Wings of Alaska proposes service with Cessna Caravan aircraft. Manufactured in the 

USA, the Caravan was originally designed in the 1980's to replace an aging fleet of pistonpowered aircraft, such as the Piper Chieftain. This modern, turbine powered aircraft offers 

seating for 9-passengers and high level of dispatch reliability. 

Equally as important, compared to other 9-passenger aircraft, the Cessna Caravan has 

unmatched capacity for freight and mail. Specifically, the Caravan's cargo pod has capacity of 

111 cubic feet and 1,090 pounds whereas the Piper Chieftain has capacity of 65 cubic feet and 

700 pounds in its nose compartment and two wing lockers. 

As was done when Wings of Alaska previously served Kake, when weather and loads allow, 

Cessna 207 aircraft will be substituted on the route, reducing the required subsidy by 

approximately 45% per departure. The annual subsidy ceiling in this proposal is based on 

operations with the Cessna Caravan. 

Unparalleled Safety and Reliability 

Kake's location approximately 100 miles south of Juneau requires a normal route of flight along 

Stephens Passage or Seymour Canal, including a 10 mile crossing over the waters of Frederick 

Sound. The weather along the route is frequently marginal VFR, including some areas where 

radio communications are poor or not available. While this route is operationally challenging, 

Wings of Alaska is well positioned to provide safer and more reliable air transportation than 

other operators we expect will submit proposals to serve Kake: 

• SeaPort Airlines FAA Operation Specifications authorizes operations under Instrument 

Flight Rules (IFR) and we will, when weather conditions require, use this authority to 

ensure high levels of operational reliability at Kake. 

• Wings of Alaska is a participant in the FAA's Capstone Project Phase Two in Southeast 

Alaska, a safety program that concentrates on increasing safety through technology with 

systems such as GPS receivers, data link transceivers, ADS-B, Multi-Function Displays, 

Flight Information Services, moving maps, and terrain databases. 

• Wings of Alaska is an active participate in the Alaska Air Carrier Association's Medallion 

Foundation, a non-profit organization promoting aviation safety through systems 

enhancements by providing management resources, training, and support to the aviation 

community. 

Finally, we note that in its 2010 proposal, the incumbent carrier serving Kake tried to say that 

their piston twin-engine aircraft was somehow "superior" to the modern, turbine-powered 

Cessna Caravan. A review of that carrier's T-100 filings between September 2010 and 

December 2011 indicate that the piston-twin was operated only 13.5% of the time. The 

remaining 86.5% of flights between Juneau and Kake were operated with single-engine aircraft, 

a statistic that negates any argument of twin-engine superiority the incumbent operator may 

attempt during this EAS cycle. 

DOT OST-2002-12014 

DOT -OST -2008-0217 

Page 13 
May 8, 2012 

Schedules & Fares 

Frequencies & Seasonality 

In Order 2012-4-13, the Department requested frequency levels at Kake of 14 weekly roundtrips 

during the peak period and seven weekly roundtrips during the off-peak period. At Excursion 

Inlet, the Department requested three weekly roundtrips during the peak period and one weekly 

roundtrip during off-peak period. Wings of Alaska's proposals herein are compliant with this 

request. 

For purposes of peak and off-peak seasonal adjustments, in both markets the months of May 

through September are deemed to be the peak period. The months of October through April are 

deemed to be off-peak. 

Wings of Alaska presently offers a simple fare structure that will extend to the Kake market and, 

if reselected, be continued at Excursion Inlet. The proposed fares for each market are illustrated 

on the table below: 

Base Fare 

Fed Excise Tax 

TOTAL 

One-Way 

Kake - Juneau 

$116.28 

$8.72 

$125.00 

Excursion Inlet - Juneau 

Base Fare 

Fed Excise Tax 

TOTAL 

$69.77 

$5.23 

$75.00 

Round Trip 

$232.56 

$17.44 

$250.00 

$139.53 

$10.46 

$149.99 

In addition to regular fares, Wings of Alaska periodically offers unique promotions that are 

intended to increase awareness of local air service, stimulate demand during off-peak periods, 

and help maintain positive opinions of the Wings of Alaska brand (see discussion below). If 

selected to provide Essential Air Service, these promotions would be extended to Kake and 

continued at Excursion Inlet. 

Illustrative Schedule Pattern 

Illustrated on the next page is a sample peak-period schedule for both Kake and Excursion Inlet, 

that shows how flights to/from each community would connect with those of the only major 

airline serving Juneau, Alaska Airlines. In the case of Kake, the schedules allow for a same-day 

roundtrip travel to Juneau. 

It is important to emphasize that these schedules are preliminary and intended to illustrate how 

Wings of Alaska would serve each market. Final schedules will be developed when the 

Department awards the markets and only after consultation with each community. 

DOT OST-2002-12014 

DOT -OST -2008-0217 

Page 14 
May 8, 2012 

Illustrative Schedule Overlay 

0600 0924 SEA AS 176 

AS 73 SIT 0605 0643 

0715 0816 KTN AS 60 

0725 0907 ANC AS 73 

AS 68 SEA 0610 0739 

0800 SEA AS 72 

AS 61 SEA 0755 0923 

AS 62 ANC 0800 0940 

1010 1058 YAK AS 61 

1020 1102 SIT AS 62 

AS 75 SEA 1105 1235 

AS 71 SEA 1400 1529 

1613 1647 GST AS 71 

1835 2015 ANC AS 77 

AS 67 SIT 1827 1908 

AS 66 YAK 1830 1915 

2131 ANC AS67 

2000 2319 SEA AS 66 

AS 74 ANC 1855 2034 

AS 69 KTN 2022 2117 

AS 70 ANC 1955 2134 

AS 79 SEA 2015 2145 

2220 2258 SIT AS 70 

Alaska Airline schedule data sourced from nnovata, LLC for July 2012 . Alaska adjusts schedules at JNU seasonally . 

Superior Service for KAE and EXI Residents 

Global Distribution in All Major Reservation S~stems 

SeaPort Airlines (including all flights marketed as Wings of Alaska) is connected to all five major 

global distribution systems allowing ticket sales from anywhere via travel agents and on major 

online travel service such as Orbitz, Travelocity, Expedia, Kayak, Hipmunk, and CheapoAir. 

DOT OST-2002-12014 

DOT -OST -2008-0217 

Page 15 
May 8, 2012 

In addition to online travel agencies, customers have the option of making reservations online 

via the Wings of Alaska website, on the telephone, or at any airport ticket counter.

1 As a result 

of recent migration to a new reservation platform, in the coming months we will add the 

convenience of customers being able to check-in and/or change reservations online. 

Complimentary Ground Shuttle at Kake 

Wings of Alaska is aware of the popularity of complimentary shuttle service between passenger 

home's and the Kake Airport as provided by the incumbent carrier. If selected to provide EAS at 

Kake, Wings of Alaska will continue this service. 

A Track Record of Building Community Partnerships 

Wings of Alaska prides itself on developing partnerships in each community that it serves. This 

includes participation in local events, in-kind sponsorships and donations, partnering with local 

schools, community food drives, and advance notification and opportunity for input prior to 

schedule and fare changes. These community partnerships serve both our own interests and 

those of the community by fostering a long-term, stable relationship that results in increased 

ridership and, in the case of EAS markets, can contribute to lower subsidy requirements over 

time. 

Specifically at Kake, after selection we would immediately offer a 10% discount on charters by 

the high school team traveling to "away" games. This would be followed by inclusion in all 

programs that we conduct across our Southeast Alaska operations, as well as programs and 

events that are specific to community needs at Kake. 

Marketing & Customer Engagement Strategy 

We have found that large mass-media advertising in small communities such as those served 

by Wings of Alaska is not particularly effective. While we do a limited amount of radio and print 

advertising, Wings of Alaska generally employs a mix of promotional events and customer 

engagement using social media. 

Illustrated on the next page are some recent promotional activities undertaken by Wings of 

Alaska and which would be extended to include Kake if selected to provide EAS In that 

community. 

1 Exception being Excursion Inlet, where there is no terminal and ground handling is conducted by pilots. 

DOT OST-2002-12014 

DOT -OST -2008-0217 

Page 16 
May 8, 2012 

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-- Wings of Alaska also maintains a strong presence on social media that facilitates a dynamic, 

two-way conversation with our customers through networking sites such as Facebook and 

Twitter. We have found social media to be an excellent tool for generating passenger referrals, 

sharing in our communities, and hearing how customers feel about their Wings of Alaska 

experience. If selected, we expect similar results in Kake. 

Community Specific Proposals 

Proposals for Kake and Excursion Inlet are provided on the following pages. Each proposal is 

provided on a stand-alone basis. 

The proposals are based on a two year term. Notwithstanding the risk of higher costs, 

particularly those related to fuel, that could outpace traffic growth and reasonable fare 

increases, Wings of Alaska is offering the Department and both communities the option to 

contract the proposed annual subsidy for a four year period at no increase in annual subsidy 

beyond that level specified in this proposal. We believe this offer provides each community with 

the assurance of stable air service for an extended period and reduces the administrative 

burden on both the Department and ourselves. 

DOT OST-2002-12014 

DOT -OST -2008-0217 

Page 17 
May 8, 2012 

SeaPort Airlines, Inc. dba Wings of Alaska 

Subsidy Requirement Calculation for 

Kake, Alaska 

Operating Projections 

KAE-JNU Sector Length (sm) 

Scheduled Departures 

Scheduled Block Hours 

Projected Completion Factor 

Projected Completed Departures 

Projected Completed Block Hours 

Passenger Projections 

Projected Passengers 

Passengers per Departure 

Projected A.erage Fare 

Re.enue Passenger Miles (RPMs) 

Available Seat Miles (ASMs) 

Projected Load Factor 

Fin a ncia I Projections 

Re.enues 

Passenger licket Re.enues 

Mail Re.enue (@$50 lb.) 

Cargo Re.enue (@ $8.0896/RlM + Fixed Rate) 

Total Re.enue 

Expenses 

Flight Operations 

Aircraft Lease 

Fuel & Oil 

Traffic Servicing & Marketing 

Insurance 

Maintenance 

Sub-Total- Direct 

Indirect 

Total Expenses 

Projected Operating Profit/(Loss) 

Subsidy Calculations 

Operating Loss 

Economic Retum @ 5% 

!Required Subsidy 

Subsidy per Departure - C208 

Peak Period Weekly Ceiling 

Off Peak Period Weekly Ceiling 

Subsidy per Departure - C207 

DOT OST-2002-12014 

DOT -OST -2008-0217 

100 

1,036 

863.3 

95.0% 

984 

820.2 

2,708 

2.8 

$116.28 

270,810 

885,780 

30.6% 

$314,898 

$55,546 

$38,295 

$408,739 

$45,109 

$102,859 

$263,520 

$38,393 

$13,943 

$209,143 

$672,966 

$63,457 

$736,424 

($327,685) 

$327,685 

$36,821 

$364,5061 

$370 

$9,852 

$4,926 

$206 

Page 18 
May 8, 2012 

SeaPort Airlines, Inc. dba Wings of Alaska 

Subsidy Requirement Calculation for 

Excursion Inlet, Alaska 

Operating Projections 

EXI-JNU Sector Length (sm) 

Scheduled Departures 

Scheduled Block Hours 

Projected Completion Factor 

Projected Completed Departures 

Projected Completed Block Hours 

Passenger Projections 

Projected Passengers 

Passengers per Departure 

Projected A-.erage Fare 

Re-.enue Passenger Miles (RPMs) 

AVc:lilable Seat Miles (ASMs) 

Projected Load Factor 

Financial Projections 

Re-.enues 

Passenger Ticket Re-.enues 

Cargo Re-.enue (@$50 lb.) 

Mail Re-.enue (@ $8.0896/RTM + Fixed Rate) 

Total Re-.enue 

Expenses 

Flight Operations 

Aircraft Lease 

Fuel & Oil 

Traffic Senncing & Marketing 

Insurance 

Maintenance 

Sub-Total - Direct 

Indirect 

Total Expenses 

Projected Operating Profiti(Loss) 

Subsidy Calculations 

Operating Loss 

Economic Retum @ 5% 

!Required Subsidy 

Subsidy per Departure - C207 

Peak Period Weekly Ceiling 

Off Peak Period Weekly Ceiling 

DOT OST-2002-12014 

DOT -OST -2008-0217 

32 

186 

77.5 

95.0% 

177 

73.6 

66 

0.4 

$69.77 

2,112 

28,272 

7.5% 

$4,605 

$408 

$1,006 

$6,019 

$4,049 

$1,033 

$9,939 

$4.471 

$1.473 

$8,099 

$29,063 

$8,600 

$37,663 

($31,644) 

$31,644 

$1,883 

$33,5271 

$190 

$379 

$1,138 

Page 19