Grant Aviation, Inc P.o. Box 92200 Anchorage, AK 99509 Proposal to Provide EAS at False Pass, Alaska Docket DOT -OST -2015-0059 EAS & Domestic Analysis Division Office of Aviation Analysis U.S. Department
of Transportation 400 71 hStreet
S
.W., Room 6401 Washington, D.C

.20590 May 1B, 2015 Dear Sirs, Enclosed, find Grant Aviation, Inc.'s proposal to provide Essential Air Service between Cold Bay, Alaska and False Pass, Alaska for the period June 15, 2015 through June 14, 2017

. While our currently filed scheduled service provides three direct non-stop flights weekly between False Pass and Cold Bay, the community has adamantly and persistently requested greater frequency
of service, complaining that three trips weekly does not provide them with adequate accessto health care facilities, pharmaceuticals, educational opportunities, perishable commodities, commercially available manufactured goods, and general commerce. In responseto the need of the people of False Pass, Grant Aviation has, for overtwo years,been operating two flights daily, three days per week, sothat travelers from False Pass maycatch
a connecting flight from Cold Bay to Anchorage, without overnighting

in Cold Bay, where there is no commercially available temporary lodging

.We have attempted
to provide for their travel needs, but areunable to continue our provision of an adequate frequency of safe, reliable service without subsidy. Anchorage

is the only fully developed population center in our state, to which the citizens of remote communities must travel to have accessto state of the art medical treatment, higher education, and significant commercial opportunities. Further, organizations providing economic and political support for remote Native Alaskan villages are primarily headquartered

in Anchorage

.Without reasonable accessto these organizations, the isolated communities have no voice in legislative action having dramatic impact upontheir communities. In accord with the Department's request for proposals, Grant Aviation here proposesfour alternate plans for providing Essential Air Service to False Pass. The first provides for aminimal level of service of three direct nonstop round trips weekly between False Pass and Cold Bay, with alternate plans providing either four, five, or,aswehave been operating without subsidy, six direct, nonstop flights perweek as required to provide this isolated community with adequate transportation service. The primary aircraft type to be utilized for the proposed service
is a Piper PA31-350 Navajo Chieftain

.This aircraft
is a twin engine, IFR capable, non-pressurized aircraft. This aircraft type is able to safely operate overextended overwater routes in the hostile aviation environment experienced
onthe Alaskan Peninsula and Aleutian archipelago. This proposal provides for passenger transport
aswell as handling and interim storage of mail and freight between Cold Bay and the village of False Pass.The brief summary table below states the total expected annual economic cost, total expected market derived revenue, and total resulting annual subsidy required to perform at the rate of 100% for each proposed option. Summary of Four Options to Provide EAS between False Pass and Cold Bay Number of Weekly Total Annual Total Annual Revenue Total Annual Round Trips Economic Cost Derived from Market Required Subsidy 3 $389,653.73 $138A73.75 $251,179.98 4 $515,183.12 $13BA73.75 $376,709.37 5 $640,712

.51 $138A73

.75 $502,238

.76 6 $766,241.89 $138,473

.75 $627

t768

.14 Detailed cost sheets follow for each of the above proposed frequencies We look forward to working with you in providing transportation service to the people of False Pass. If you require further information,

I may be contacted by phone at 907 529-6999, or by e-mail at bmcglasson@flygrant

.com. **~j)~** R. Bruce McGlasson CEO Grant Aviation, Inc

.Grant Aviation, Inc. FalsePassEAS Proposal Summaryw/ PA31-350 Option - 3Round Trips Weekly Weekly Round Trips AnnualRT Flights@100% completion PerRTBlockTime (Hours) Annual BlockHours OW Distance COB

-FalsePass Airport (stat miles) AnnualOIW Passengers expected OWfare Annual maillbs expected Current mallrate

I lb Annual Freightlbs expected Current Freightrates

I lb Expected Revenue Derived from Operations Passenger Fares Mall Revenue

$ $ $ $ $

3 156 0.66 102.96 38 750 132

.09 37,500 0

.7199 18,250 0

.68 Freight Revenue

$ Annual Revenue 99,067.50 26

,996

.25 12,410.00 Total Annual Revenue from Scheduled Operations

$ 138,473.75 Expected Direct Expenseof Operations Fuel- LUOO Aviation Gasoline Aircraft lease expense Ma

intenance (engine&prop +labor+parts) Pilot labor, inclusiveoftaxandbenefits Aviation Insurance annualhulland liability Expected Indirect Expenseof Operations Hanger lease& rampacservices Ticketing

& ground service Total Annual Direct Expense Freight
& mail Handling COB, FalsePass Pilot housing

+utility SumofDirectandIndirect Expense AddBurden @24.0% subtotal AddProfit @S.O% Total Annual Indirect Expense Annual Direct Exp. $ 40,077

.18 $ 43,714.29 $ 28,211.04 $ 86,035.71 $ 13,714.29 $ 211,752.51 Annual Indirect Exp. $ 30,857

.14 $ 31,200

.00 $ 10,035.00 $ 15,428

.57 $ $ $ $ 87,520.71 299,273

.22 71,825.57 371,098

.79 18,554.94 Total Annual Economic Cost$ 389,653

.73 lessAnnual Revenue Derived from Scheduled Operations

$ (138,473

.75) Annual Subsidy Required

$ 251,179.98Grant Aviation, Inc. False Pass EAS Proposal Summaryw/ PA31-350 Option - 4 Round Trips Weekly Weekly Round Trips Annual RT Flights @ 100% completion Per RT Block Time (Hours) Annual Block Hours OW Distance COB

-False Pass Airport (stat miles) Annual OIW Passengers expected OW fare Annual maillbs expected Current mail rate
I lb Annual Fre

i ght lbs expected Current Freight rates

I lb Expected Revenue Derived from Operations Passenger Fares Mail Revenue

$ $ $ $ $

4 208 0

.66 137

.28 38 750 132.09 37,500 0

.7199 18,250 0.68 Freight Revenue

$ Annual Revenue 99,067.50 26,996.25 12,410.00 Total Annual Revenue from Scheduled Operations

$ 138,473.75 Expected Direct Expense of Operations Fuel

-LL100 Aviation Gasoline Aircraft lease expense Maintenance (engine&prop +labor+parts) Pilot labor, inclusive of tax and benefits Aviation Insurance annual hull and liability Expected Indirect Expense of Operations Hanger lease & rampacservices Ticketing

& ground service Total Annual Direct Expense Freight
& mail Handling CDS, False Pass Pilot housing

+ utility Sum of Direct and Indirect Expense Add Burden @ 24.0% subtotal Add Profit @ 5.0% Total Annual Indirect Expense Annual Direct Exp. $ 53,436

.24 $ 58,285.71 $ 37,614.72 $ 114,714

.29 $ 18,285.71 $ 282,336.67 Annual Indirect Exp. $ 41,142

.86 $ 41,600

.00 $ 10,035

.00 $ 20,571.43 $ $ $ $ 113,349.29 395,685.96 94,964.63 490,650.59 24,S32

.53 Total Annual Economic Cost
$ 515,183.12 less Annual Revenue Derived from Scheduled Operations

$ (138,473.75) Annual Subsidy Required

$ 376,709.37Grant Aviation, Inc. False Pass EAS Proposal Summaryw/ PA31-350 Option - 5 Round Trips Weekly Weekly Round Trips Annual RT Flights@ 100% completion Per RT Block Time (Hours) Annual Block Hours OW Distance COB

-False Pass Airport (stat miles) Annual OIW Passengers expected OW fare Annual maillbs expected Current mail rate
I lb Annual Freight lbs expected Current Freight rates

I lb Expected Revenue Derived from Operations Passenger Fares Mail Revenue

$ $ $ $ $

5 260 0

.66 171.60 38 750 132

.09 37,500 0.7199 18,250 0.68 Freight Revenue

$ Annual Revenue 99,067

.50 26,996

.25 12,410.00 Total Annual Revenue from Scheduled Operations

$ 138,473.75 Expected Direct Expense of Operations Fuel

-ll100 Aviation Gasoline Aircraft lease expense Maintenance (engine&prop +labor+parts) Pilot labor, inclusive of tax and benefits Aviation Insurance annual hull and liability Expected Indirect Expense of Operations Hanger lease & rampacservices Ticketing

& ground service Total Annual Direct Expense Freight
& mail Handling COB, False Pass Pilot housing
+ utility Sum of Direct and Indirect Expense Add Burden @ 24.0% subtotal Add Profit @ 5.0% Total Annual Indirect Expense Annual Direct Exp. $
66

,795.30 $ 72,857.14 $
47

,018.40 $ 143,392.86 $ 22,857.14 $ 352,920.84 Annual Indirect Exp. $ 51,428.57 $ 52,000

.00 $ 10,035.00 $ 25,714

.29 $ $ $ $ 139,177.86 492,098

.70 118,103

.69 610,202.39 30,510.12 Total Annual Economic Cost
$ 640,712.51 less Annual Revenue Derived from Scheduled Operations

$ (138,473

.75) Annual Subsidy Required

$ 502,238.76Grant Aviation, Inc. False Pass EAS Proposal Summaryw/ PA31-350 6 Round Trips Weekly Weekly Round Trips Annual RT Flights@ 100% completion Per RT Block Time (Hours) Annual Block Hours OW Distance CDS- False Pass Airport (stat miles) Annual 0/W Passengers expected OW fare Annual malllbs expected Current mail rate
I lb Annual Freight lbs expected Current Freight rates

I lb Expected Revenue Derived from Operations

$ $ $

6 312 0.66 205

.92 38 750 132.09 37,500 0.7199 18,250 0.68 Passenger Fares

$ Annual Revenue 99,067.50 26,996.25 12,410.00 Mail Revenue

$ Freight Revenue

$ Total Annual Revenue from Scheduled Operations

$ 138,473.75 Expected Direct Expense of Operations Fuel- LL100 Aviation Gasoline Aircraft lease expense Maintenance (engine&prop +labor+parts) Pilot labor, inclusive of tax and benefits Aviation Insurance annual hull and liability Expected Indirect Expense of Operations Hanger lease & rampacservices Ticketing

& ground service Total Annual Direct Expense Freight
& mail Handling CDS, False Pass Pilot housing

+ utility Sum of Direct and Indirect Expense Add Burden @ 24

.0% subtotal Add Profit @ 5.0% Total Annual Indirect Expense Annual Direct Exp. $ 80,154.36 $ 87,428.57 $ 56,422.08 $ 172,071.43 $ 27,428.57 $ 423,505.01 Annual Indirect Exp. $ 61,714

.29 $ 62,400.00 $ 10,03S.OO $ 30,857.14 $ $ $ $ 165,006.43 588,511.44 141,242.75 729,754.19 36,487

.71 Total Annual Economic Cost
$ 766,241

.89 less Annual Revenue Derived from Scheduled Operations

$ (138,473.75) Annual Subsidy Required

$ 627,768.14