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 

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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

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### RevisedAlternate EssentialAir Service Proposal for the Manistee CountyBlackerAirport March 

### tst, 2012 SummaryoftheAlternate EssentialAir Service Proposal The Manistee County Blacker Airport ("Airport") is proposing to provide for the air service needs ofthe 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 mediumhub with 30 seat EMB-120, 19 seat BAeJetStream 31, orequivalent twin-engine aircraft conducting regularly scheduledpublic charterflights. Thefrequency offlights 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 EssentialAir Service Plan Proposal This proposal is revised from the originally submittedJanuary 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 aperiod oftwo (2) years commencing March 11, 2012 or when scheduled service underthis program begins; 

### 2. The Airport will contract with a Part 380 Indirect AirCarrier (Public Charters, Inc.) to provide 520 scheduled annual round trips to Chicago Midway Airport, a mediumhub, with a minimum oftwin engine 19 seat aircraft. Compensation necessary to provide such service will come from the Alternative EAS Grant funds; 

### 3. Servicefor the first six (6) months would be scheduled with 30 seatEMB-120 equipment, for the remaining eighteen (18) months, service would be scheduled with 19 seat or greater equipment. 

### 4. The Airport requests that subsidybe paid as follows during the first year:

o A $200,000 one time paymentbe paid upon execution ofthe 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 ofearly terminationofthis agreement before the end ofthe first year, the Airport and Indirect AirCarrier would refund aprorated amount ofthe 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 $200,000j 1019 segments= $196.27/segment

### 5. The Airportrequests that subsidybe 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 AirCarrierreserve the right to provide equivalent service with substitute aircraft in the event ofmechanical problems orother unforeseen circumstances. TheAirport and Indirect Air Carrier also reserve the right to adjust frequency from time to time to reflect seasonal changes in demand and to provide greaterfrequency than planned, however any additional flight segments above 1019 per year would not be subsidized. 

### 7. The Airport specificallyreserves its right as a subsidy eligible EAS pointto 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 ofthe Indirect Air Carrier to provide the agreed upon service in a reliable mannerwill be reason for early termination ofthe proposed service;
• An EarlyTerminationClause In the event ofearly termination ofthe 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 Serviceprograms. Both parties agree to take the following steps inthe event of early termination: 1. Written notice ofTerminationbetween the Airport and the Indirect Air Carrier 2. The Airport notifies US-DOT ofits intent to remain in either the Alternate EAS Programorto reenter the standard EAS program. 3. The Airport and US-DOT will providebestefforts to securereplacement

. . 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 beTSA screened at Midway and Manistee, and passengers would deplane into the Midway terminal sterile environment.



### 41019 segments* $2017.45/segment= 

### $2,055,781.55