Swanson, Brian (OST) 

From: 

Sent: 

To: 

Cc: 

Subject: 

Attachments: 

Dennis, Brian, 

Manistee Airport [manisteeairport@gmail.com] 

Thursday, March 01,201212:17 PM 

Devany, Dennis (OST); Swanson, Brian (OST) 

Jim Gallagher 

One more revision 

Revised MBL-AEAS-2012-03-01.doc 

Dor..- O!.f"'- 1ttqv -rt-11 

t> or-- o~r. uof-( f'f/15 

After some conversations yesterday, I am resubmitting the revised plan 

with one small change. The only change is to add at the end an item about 

the plan for sterile/TSA operations. We talked about it yesterday on the 

call, but I omitted including this in what I sent out yesterday. 

thanks, 

--Barry 

1 
Revised Alternate Essential Air Service Proposal 

for the Manistee County Blacker Airport 

March tst, 2012 

Summary of the Alternate Essential Air Service Proposal 

The Manistee County Blacker Airport ("Airport") is proposing to provide for the air 

service needs of the Manistee/Ludington communities and surrounding areas by 

contracting with Public Charters, Inc., a Part 380 Indirect Air Carrier ("Indirect Air 

Carrier"). Such air transportation would be to Chicago Midway Airport, a medium hub 

with 30 seat EMB-120, 19 seat BAe J etStream 31, or equivalent twin-engine aircraft 

conducting regularly scheduled public charter flights. The frequency of flights may vary 

seasonally as required to meet demand. However, 520 annual round trips are planned 

(1040 segments averaging 10 round trips or 20 segments per week). 

Alternate Essential Air Service Plan Proposal 

This proposal is revised from the originally submitted January 5th' 2012 proposal 

following negotiations with US-DOT. 

1. The Airport, in exchange for a Alternative EAS Grant from the Department in the 

amount $2,143,294.14 for year one and $2,055,781.55 for year two, will forego 

its participation in the traditional EAS program for a period of two (2) years 

commencing March 11, 2012 or when scheduled service under this program 

begins; 

2. The Airport will contract with a Part 380 Indirect Air Carrier (Public Charters, 

Inc.) to provide 520 scheduled annual round trips to Chicago Midway Airport, a 

medium hub, with a minimum of twin engine 19 seat aircraft. Compensation 

necessary to provide such service will come from the Alternative EAS Grant 

funds; 

3. Service for the first six (6) months would be scheduled with 30 seat EMB-120 

equipment, for the remaining eighteen (18) months, service would be scheduled 

with 19 seat or greater equipment. 

4. The Airport requests that subsidy be paid as follows during the first year: 

o A $200,000 one time payment be paid upon execution of the Grant 

Agreement to cover startup costs incurred including, but not limited to, 

pre-service marketing, station startup costs, personnel training, etc. 

o $1907.06 per completed flight segment for up to 1019 segments 1 

o The cap on subsidy costs would be $2,143,294.14 in year one.

2 

o In the event of early termination of this agreement before the end of the 

first year, the Airport and Indirect Air Carrier would refund a prorated 

amount of the initial $200,000 payment at the rate of $196.27 per segment 

for each segment less than 1019 completed during the period. 3 

1 1040 scheduled segments* 98% completion ratio= 1019 segments 

z 1019 segments* $1907.06/segment + $200,000 = $2,143,294.14 

3 $200,000 j 1019 segments= $196.27 /segment 
5. The Airport requests that subsidy be paid as follows during the second year: 

o $2017.45 per completed flight segment for up to 1019 segments 

o The cap on subsidy costs would be $2,055,781.55 in year two. 4 

6. The Airport and Indirect Air Carrier reserve the right to provide equivalent 

service with substitute aircraft in the event of mechanical problems or other 

unforeseen circumstances. The Airport and Indirect Air Carrier also reserve the 

right to adjust frequency from time to time to reflect seasonal changes in demand 

and to provide greater frequency than planned, however any additional flight 

segments above 1019 per year would not be subsidized. 

7. The Airport specifically reserves its right as a subsidy eligible EAS point to 

reinstatement in the traditional EAS program. 

Additional Considerations 

The Airport and Indirect Air Carrier, will enter into an agreement incorporating the above 

terms as well as the following additional considerations, among others: 

• A Performance Clause 

The failure of the Indirect Air Carrier to provide the agreed upon service in a 

reliable manner will be reason for early termination of the proposed service; 

• An Early Termination Clause 

In the event of early termination of the service, the Airport and the Indirect Air 

Carrier will agree to a "hold-in" period while the Airport and US-DOT secure 

replacement air service under the Essential Air Service or Alternate Essential Air 

Service programs. Both parties agree to take the following steps in the event of 

early termination: 

1. Written notice of Termination between the Airport and the Indirect Air 

Carrier 

2. The Airport notifies US-DOT of its intent to remain in either the Alternate 

EAS Program or to reenter the standard EAS program. 

3. The Airport and US-DOT will provide best efforts to secure replacement . . 

mr service 

4. The Indirect Air Carrier will work with the replacement carrier on a 

transition date 

• Sterile Operations 

All scheduled flights are to be operated in a sterile environment, meaning 

passengers would be TSA screened at Midway and Manistee, and passengers 

would deplane into the Midway terminal sterile environment. 

41019 segments* $2017.45/segment = $2,055,781.55