BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

_______________________________

) 

In the matter of the application of ) 

) 

WINGS AIRWAYS INC. ) DOCKET DOT-OST-2010-0023 

) 

For a certificate of public convenience ) 

And necessity under 49 USC 41102 ) 

_______________________________) 

REPLY OF WINGS AIRWAYS INC.

TO CORRESPONDENCE OF AIR EXCURSIONS, LLC 

DATED FEBRUARY 16, 2010

Communications with respect to this document should be addressed to: 

Holly Johnson

Wings Airways

2 Marine Way #175

Juneau, AK 99801 

(907) 586-6275 

holly@wingsairways.com

February 26, 2010
BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

_______________________________

) 

In the matter of the application of ) 

) 

WINGS AIRWAYS ) DOCKET DOT-OST-2010-0023 

) 

For a certificate of public convenience ) 

And necessity under 49 USC 41102 ) 

_______________________________) 

REPLY OF WINGS AIRWAYS INC.

TO CORRESPONDENCE OF AIR EXCURSIONS, LLC 

DATED FEBRUARY 16, 2010

Wings Airways hereby replies to the correspondence of Mike Loverink, owner of Air 

Excursions, LLC. The reasons listed below will prove all claims are erroneous. 

Aircraft

The five aircraft listed in the Wings Airways application are currently in lease negotiations 

between Wings Airline Services and Alaska Juneau Aeronautics, Inc. with no known settlement 

at this time. Wings Airways is not privy to copies of current lease agreements, as they are 

between two private entities. Wings Airways has shown leasing plans as requested under 14 

CFR 204.3(n)(2) by an interest in the Wings Airline Services aircraft if they become available. 

Appendix A provided by Mr. Loverink highlights a submission by Alaska Juneau Aeronautics, 

Inc. that states “AJA currently leases 2 Caravans and 3 Cessna 207’s and will continue to have 

the needed aircraft to meet its contractual obligations to the DOT”, yet it does not specify tail 

numbers of the aircraft listed. Further proof an agreement between Wings Aircraft Services and 

AJA has not been confirmed. 

In the case that aircraft owned by Wings Airlines Services would not be available to Wings 

Airways other options would be implemented. The current aircraft market is saturated with 

suitable aircraft for lease or purchase. Wings Airways’ financial fitness allows it to exercise the 
option of either purchasing or leasing other aircraft. If Wings Airways chooses to lease aircraft 

from another company, it is anticipates costs will be similar to a lease agreement with Wings 

Airline Services. 

The current contract Alaska Juneau Aeronautics has with the DOT does not involve Wings 

Airways and therefore should not have a bearing on Wings Airways receiving authority to 

operate on a scheduled basis. Air Excursions is simply using the Wings Airways application as 

an excuse to reopen the bid for Essential Air Service to Kake and Excursion Inlet. 

Employees

As a point of correction, a total of five shareholder employees and managers have resigned from 

Alaska Juneau Aeronautics, Inc. d.b.a. Wings of Alaska (AJA) and now work exclusively for 

Wings Airways Inc. Further establishing that Mr. Loverink and his council have little 

knowledge of Wings Airways’ management or employee structure. This information only serves 

to prove that qualified longtime employees are behind a venture that would require vast 

experience and knowledge. 

The majority of pilots flying for Wings Airways during the summer months are current in both 

types of aircraft proposed for service. Wings Airways receives applications from qualified 

pilots on a daily basis and believes that pilots are accessible if needed per the application.

Unemployment rates are at an all time high creating a positive climate for obtaining employees.

Prior to our application submission, conversations had taken place with potential key employees 

from the various communities and each person had expressed interest in future employment. 

Wings Airways holds an esteemed reputation within the industry and the communities of 

Southeast Alaska fostering a desire for others to become part of the team.

Facilities

Wings Airways holds a concrete lease with Fountain Village Development to occupy a hangar 

facility located at the Juneau International Airport. The lease is valid through 2013. Appendix A 

highlights this lease that allows “unrestricted shared space on the 16,800 square foot ground 

floor and 2,688 square feet of storage on the 2nd floor of the two story hangar building”. The 

large hangar includes extensive office space, facilities for cargo and maintenance operations, 
offices, meeting space and parking as well as convenient runway access for the aircraft. Options 

to extend the lease are available. 

Land at the Juneau International Airport is available for the option to build a hanger if the desire 

of the company would be to do so in the future. 

Ticket counter space is routinely available at the Juneau International Airport. Specific space 

would be available if a disruption in the current Alaska Juneau Aeronautics service would occur. 

Currently, the space of a former airport tenant has not been occupied and is available.

Rental space is available in each of the outlying communities and towns. 

In Addition

As stated in the narrative history from the Wings Airways’ application, a primary motivation is

to provide a defensive strategy to protect the current markets served by Alaska Juneau 

Aeronautics if a disruption of service should occur. If this disruption were to happen, Wings 

Airways would attempt to recover any and all of the current office space, employees, ground 

equipment, etc. from Alaska Juneau Aeronautics. Wings Airways has sufficient funds to procure

any additional equipment needed to run daily operations in Juneau or the outlying stations. As 

shown in the application, the owners and managers of Wings Airways have extensive expertise 

and knowledge of the industry to begin operations immediately. 

Traffic Projections

An estimated pretax fare was used to calculate passenger and freight revenues. Air Excursions 

made the argument that their specific rates were not used in this case. Wings Airways 

determined it was in the best interest of the applicant to use realistic rates based on Wings 

Airways costs, not that of a separate entity.

Air Excursions asserts Wings Airways assumes it will carry nearly 100% of the passenger and 

freight in the markets. This statement is obviously false and unfounded. The estimate assumes 

capacity at the same level as a similar sized operation (Wings of Alaska) at a time when they had 

similar competition (2008). During the period when the projections were calculated, the market 

consisted of Wings of Alaska, LAB (until August 2008) and the unreported totals of Air 
Excursions. Within Air Excursions Appendix C, LAB was not taken into account. The

statement that Wings Airways assumed they would carry between 49.38% and 85.97% of mail

traffic is inaccurate. The forecast consisted of two carriers, each carrying 50% of the mail.

Numbers calculated are based on the 2008 total mail carried in the proposed markets.

Wings Airways is projecting seat capacity slightly higher than AlA experienced, not less as

asserted in Air Excursions' letter. According to their letter (Appendix D pages 1 through 6),

total available seats for Wings of Alaska were 61,435. Total projected available seats for Wings

Airways are 65,520 (Wings Airways Application, Appendix H, page 1). Air Excursions has

distorted their comparisons by using a different calculation method to determine total load factor

levels. Appendix B restates Air Excursions data with total load factors presented in PEQ's

(passenger equivalents) so they may be compared with Wings Airways projections. From this it

is apparent the projected load factors are consistently lower than experienced by Wings of

Alaska.

Air Excursions asserts that Wings Airways had not provided a detailed breakdown of the basis of

projections. The source of the projections are clearly stated in the application, Appendix H, page

1, under Notes.

WHEREFORE, Wings Airways Inc. recasts the principal thrusts of Air Excursions objection

with explanation of cause, intent, resources and feasibility. A clear case has been presented and

substantiated.

Respectfully submitted,

~§~~

Holly A. Johnson, President

Wings Airways lnc

2 Marine Way, Suite 175

Juneau, Alaska 9980]

(907) 586-6275
WHEREFORE, Wings Airways Inc. recasts the principal thrusts of Alaska Seaplane Service

objection with explanation of cause, intent, resources and feasibility. A clear case has been

presented and substantiated.

Respectfully submitted,

.1\.C6?·~/

~ .• 1

Holly A. Johnson, President

Wings Airways Tnc

2 Marine Way, Suite 175

Juneau, Alaska 99801

(907) 586-6275
Appendix A

Page 1 of 2

THIS LEASE is entered into this J st day of April, 2008, between

Fountain Village Development, an Oregon general partnership ("Landlord"), and

Alaska Coastal Airlines, Inc., an Alaska "S" Corporation dba Wings Airways ("Tenant").

Landlord owns and operates a building and other improvements (the "Building")

located at 8421 Livingston Way, Juneau, Alaska, 99801, legally described as Lot 4, Block 100

Juneau Airport, Copper River Meridian (CRM) (the "Property").

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord unrestricted

shared space on the 16,800 square foot ground floor, 2,688 square feet of storage on the 2

nd floor,

plus a to be determined area for office and conference room use also on the 2nd floor, of the two

story hangar building. as outlined on the attached Exhibit A ("the Premises") all in the Building

on the terms and conditions set forth in this lease.

Ids understood and agreed that the leased area is unrestrictediy shared with Tenant's former

"sister" aviation enterprise, Alaska Juneau Aeronautics, Inc. an Alaska "C" Corporation, dba

Wings of Alaska ("Co-Tenant").

1. TERM

The term of this Lease (the "Term") shall be for a period of five (5) years, commencing on

April I, 2008 and terminating on March 31. 2013.

2. RENT

Beginning on the Commencement Date and continuing during the entire Term, Tenant shall pay

to Landlord, in monthly installments, rent for each fiscal year period "Base Rent" as defined in

this Section, and on subsequent anniversaries by the application of U. S. Dept. of Labor's

Anchorage CPI factor as provided in Section 4c below. All Rent shall be paid when due without

notice, offset, or deduction for any reason.

Base Rent is: •••• per month for the initial period April 1. 2008 through March 31, 2009.

Base Rent shall be paid in advance on or before the first day of each calendar month during the

Term, except for the:first calendar month. Upon execution of this Lease, Tenant shall pay to

Landlord Base Rent for the first calendar month ofthe Term which is equal to •••

(a) General

All references to "Rent" or "Rental" in this Lease shall mean Base Rent, and all other payments

required of Tenant under this Lease unless otherwise expressly specified and all payments

required by Tenant under this Lease shall be deemed "Rent".

(h) Place of Payment

Tenant shall pay Rent and other amounts required to be paid by Tenant hereunder to Landlord at

the address for Landlord set forth on the last page of this Lease, or at such other place as

Landlord may from rime to time designate in writing.

Standard Form of RET ArL LEASE

Page 1 of 13

41112008

, Please IThb..-...

'.::J- r )

Landlord Tenant
Appendix A

Page 2 of 2

4. INSURANCE; INDEMNITY

During the Term, Landlord shall maintain in full force a policy or policies of standard multi-peril

insurance covering the Building and other improvements (exclusive of Tenant's equipment,

tenant improvements and other personal property) situated on the Property for the perils of fire,

lightening, windstorm and other perils commonly covered in such policies. Additionally, the

perils of earthquake, landslide, flood, and/or other perils may be covered at the election of

Landlord. Landlord shall use its reasonable efforts to secure said insurance at competitive rates.

During the Term Tenant shall maintain its own comprehensive liability insurance policy insuring

Landlord against liability for bodily injury and property damage occurring in, on or about the

Property. Tenant shall indemnify, defend, and save harmless Landlord from any and allliahility,

damage, expenses, attorney's fees, causes of actions, suits, claims orjudgments. arising out of or

connected with (i) the use. occupancy, management, or control of the Premises, (ii) any failure of

Tenant to comply with the terms of this Lease, and (iii) the acts or omissions of Ten ant, its

agents, officers, directors, employees, or invitees; provided, however, that Tenant shall not be

liable for claims caused by the sole negligence of Landlord. Tenant shall, at its own cost and

expense, defend any and all suits which may be brought against Landlord either alone or in

conjunction with other upon any such above mentioned cause or claim, and shall satisfy, pay,

and discharge any and all settlements paid by or judgments that may be entered against Landlord

regardless of whether a lawsuit is actually filed. Tenant shall at its own expense during the Term

carry in full force and effect a comprehensive public liability insurance policy including property

and personal injury coverage, with an insurance carrier satisfactory to Landlord, naming

Landlord, Landlord's management agent, and Landlord's lender as additional insureds, with a

combined single limit for bodily injury or property damage in an amount of DotJess than the

greater of (a) $2,000,000 , or (b) $2,000,000 per occurrence and in aggregate, insuring against

any and all liability of Tenant with respect to the Premises and under this Lease including

without limitation Tenant's indemnity obligations under this Lease, or arising out of the

maintenance, use or occupancy of the Premises. Such policy shall provide that the insurance

shall not be cancelable or modified without at least a ten (10) days prior written notice to

Landlord, and shall be deemed primary and noncontributing with other insurance available to

Landlord. On or before the Commencement Date, Tenant shall furnish Landlord with a

certificate or other acceptable evidence that such insurance is in effect. Tenant shall also

provide and maintain insurance to comply with Worker's Compensation and Employer's

Liability Laws.

5. USE OF PREMISES

The Premises shall be used for the responsible operation of an multi aircraft hangar, including

aircraft repair and maintenance, including painting, parts storage, offices and classrooms, and

other unspecified related activities. In connection with the use of Premises, Tenant shall:

a) Conform to all applicable laws, statutes, rules, ordinances, orders, regulations and

requirements of any public authority ("Laws") affecting the Premises and the use of the Premises

and correct, at Tenant's own expense, any failure of compliance created through Tenant's fault

or.by reason of Ten ant's use, unless such failure is due to Landlord's default in the performance

of the agreements set forth in this Lease to be kept and performed by Landlord. Without limiting

the generality of the foregoing, Tenant shall comply with the Americans with Disabilities Act as

it applies to the Premises and all obligations pertaining to asbestos asrequired by the

Occupational Safety and Health Administration (OSHA) applicable to the Premises and to

Tenant's employees:

b) Refrain from making any marks on or attaching any sign, insignia,

antenna, window covering, aerial or other device to the exterior or interior walls, windows or

roof of the Premises without the written consent of the Landlord, which consent shall not be

unreasonably withheld. Prior to installing any signs, Tenant shall submit detailed color drawings

to Landlord for approval indicating the location, size, layout, design, and color of proposed sign,

including all lettering and graphics. Electrical service to all signs shall be at Tenant's sole

expense. Notwithstanding Landlord's consent to any signs, Tenant shall (i) comply with all

Laws and obtain any necessary permits and governmental approvals related to such signs as its

own cost and expense, and (ii) within 15 days after Lease expiration or earlier termination,

remove all such signs and repair any damage to the Premises caused thereby, at Tenant's own

cost and expense;

Standard Form of RETAIL LEASE

Page 3 of13

4/1/2008

',Pl)e\ni~

__ . _) :t:E.1.,J

Landlord' Tenant
Pax Total Pax Total 

Period Market Seats Pax Freight Mail Load Factor Load Factor 3 Load Factor Load Factor Lo

Apr-Jun HNH 6554 3439 59597 59896 52.47% 61.59% 49.00% 52.00% Jul-Sep HNH 7697 4591 71076 61428 59.65% 68.25% 60.00% 67.00% Oct-Dec HNH 4638 2458 47174 51310 53.00% 63.61% 46.00% 52.00% Jan-Mar HNH 3347 1631 34552 35740 48.73% 59.23% 28.00% 33.00% Total HNH 22236 12119 212399 208374 54.50% 63.96% 46.00% 52.00% Apr-Jun HNS 7095 4004 77665 110360 56.43% 69.68% 45.00% 54.00% Jul-Sep HNS 7412 4231 88323 132209 57.08% 71.96% 59.00% 70.00% Oct-Dec HNS 4200 2358 72367 121583 56.14% 79.23% 35.00% 45.00% Jan-Mar HNS 2887 1348 45021 85568 46.69% 69.31% 25.00% 36.00% Total HNS 21594 11941 283376 449720 55.30% 72.27% 43.00% 53.00% Apr-Jun SGY 6944 3899 94263 156181 56.15% 74.18% 62.00% 75.00% Jul-Sep SGY 7921 4795 89666 149230 60.54% 75.62% 83.00% 98.00% Oct-Dec SGY 1753 784 23945 50659 44.72% 66.00% 33.00% 41.00% Jan-Mar SGY 987 411 11977 32018 41.64% 63.93% 20.00% 28.00% Total SGY 17605 9889 219851 388088 56.17% 73.44% 51.00% 62.00% Total All Markets 61435 33949 715626 1046182 55.26% 69.60% 47.00% 56.00% 1 Wings of Alaska experience data from Air Excursion Letter, Appendix D, pages 1 through 62 Wings Airways projected load factors from Wings Airways Application, Appendix H, page 13 Total Load Factor is calculated using PEQ's (passenger equivalents) as was used in the Wings Airways application. PEQ calculation is: Pounds of freight plus pounds of mail divided by 200 pounds, plus number of passengers, divided by number of se

Projected Load Factors 2 

Wings Airways

Load Factor Comparison

Wings of Alaska Actual and Wings Airways Projected

Wings of Alaska

Experience Data 1