1

Makani Kai Helico pters

– Makani Kai Air Charters

– Ko Olina Helicopters

– Pacific Air Express

– Hawaii Aviation

Services 

# Schuman Aviation Company Ltd dba

Air Carrier Certificate MKHA108K

130 Iolana Place

Honolulu Hawaii 96819

808

- 8 34

- 5813

Email richard@makanikai.com2

Makani Kai Helico pters

– Makani Kai Air Charters

– Ko Olina Helicopters

– Pacific Air Express

– Hawaii Aviation

Services Schuman Aviation Company, Ltd

130 Iol ana Place, Honolulu , HI 96819

8 08

- 834

- 5813 Fax 808

- 837

- 7867

r ichard@MakaniK ai.com

October 30. 2013

Scott Faulk

Transportation Industry Analyst

U.S. Department of Transportation

Office of Aviation Analysis

1200 New Jersey Ave., SE

Washington, DC 20590

RE: Proposal to Provide Essential Air Service at Kalaupapa, Hawaii

(Docket DOT

- OST

- 2000

- 6773)

Dear Mr. Faulk

,

In response to the above

- referenced orders, Schuman Aviation Company Ltd, dba Makani Kai Air

Charters (FAA Air Carrier Certificate MK HA108K), respectfully submits its bid for provision of

Essential Air Service at Kalaupapa, Hawaii. The p roposal is for a two year and four year service

agreements. This proposal is for 12 nonstop round trips between Honolulu and Kalaupapa and 18

nonstop r ound trips between Kalaupapa and Molokai Airport, servicing the community seven
days a week

. The profile and pricing details are as follows :



## Two Year Proposal

Service Profile Details / Frequency Annual Subsidy

YEAR ONE

H onolulu, HI to Ka laupapa, HI See Appendex B

K alaupapa, HI to Molokai, HI See Appendex B $ 7 87,386.00

YEAR TWO

Ho nolulu, HI to Kalaupapa, HI See Appendex B

Kalaupapa, HI to Molokai, HI See Appendex B $ 771,232.003

Makani Kai Helico pters

– Makani Kai Air Charters

– Ko Olina Helicopters

– Pacific Air Express

– Hawaii Aviation

Services Proposal to Provide Essential Air Service at Kalau papa (Continued)



## Four Year Proposal

Service Profile Details / Frequency Annual Subsidy

YEAR ONE

Honolulu, HI & Kalaupapa, HI See Appendix B

Kalaupapa, HI & Molokai, HI See Appendix B $ 751,040. 00

YEAR TWO

Ho nolulu, H I & Kalaupapa, HI See Appendix B

K alaupapa, HI & Molokai, HI See Appendix B $ 730,848.00

YEAR THREE

Honolulu, HI & Kalaupapa, HI See Appendix B

Kalaupapa, HI & Molokai, HI See Appendix B $ 710,656.00

YEAR FOUR

Ho nolulu, HI & Kalaupapa, HI See Appendix B

K alaupapa, HI & Molokai, HI See Appendix B $ 690,463.00

For Revenue and Expense Details, See Appendix A.4

Makani Kai Helico pters

– Makani Kai Air Charters

– Ko Olina Helicopters

– Pacific Air Express

– Hawaii Aviation

Services Proposal to Provide Essential Air Service at Kalaupapa (Continued)

Background

–

As has been pointed out previou sly, Kalaupapa is one of the most isolated communities in the

country. There is no road access to the area: the Kalaupapa penins ula sits at the bottom of 2 ,000

- foot vertical cliffs . To get to Kalaupapa, one can hike down the cliff trail, ride a mule, or fl y.

Peninsula resident s today rely on an annual barge to deliver food, equipment and fuel.

EAS support is essential for the livel i hood and daily survival for patients and residents of isolated

communit ies

. Since receiving the EAS contrac t in 2011, Makani K ai Air has continuously

interviewed residents, workers and daily passengers to determine what we can do to improve our service. The answers, not surprisingly, are much the same as they were when we polled people in

2011: a long with the usual requirements o f safety, reliability and timeliness, those we spoke with

reiterated their desire for a convenient flight schedule to facilitate being able to come to Honolulu

for medical appointments and return to Kalaupapa the same day. If selected to continue the EAS t o Kalaupapa, o ur daily schedule will remain as it is today as it appears to be serving the community

well.

In fact, Makani Kai Air has enjoyed a great deal of support from the community. Our fares have

given Kalaupapa residents the freedom to once again travel to and from the settlement for medical

appointments, shopping excursions and visits with family and friends. Enplanement records

indicate that the total number of Kalaupapa residents flying into and out of the community

increased by a signific ant margin after Makani Kai Air began service to the area. This trend is all

the more impressive when you consider that many of the trips taken prior to the EAS were

done so by State and Federal workers upon whom the ticket price had no bearing.

Being part of the lifeline of a community and being able to service the community of Kaluapapa

has been an honor. The patients of Kaluapapa endureed many generations of hardship since being

banished to that peninsula. For Makani Kai Air, the EAS contact means mo re than simply moving

people to and from the peninsula: we are part and parcel of the community, a responsible and

caring organization that prides itself on being reliable, on time and serving with heart.

If awarded a subsequent EAS contract, we will no t raise fares to the residents of Kaluapapa from

our current price.

About Schuman Aviation Company Ltd

–

Schuman Aviation Company Ltd. is the only locally owned business and operated Air Carrier in

the State of Hawaii. We have owned Makani Kai Helicopter s since 1996. The Schuman name is

well known in Hawaii: Gustav A. Schuman , my great grandfather, immigrated to Hawaii from

Germany in 1893 and established one of Hawaii’s first automobile dealerships. Schuman Carriage

Company Ltd, which eventually carried the Cadillac, GMC, Hummer and Subaru brands, was in

business for over a century

.5

Makani Kai Helico pters

– Makani Kai Air Charters

– Ko Olina Helicopters

– Pacific Air Express

– Hawaii Aviation

Services Proposal to Provide Essential Air Service at Kalaupapa (Continued)

In 1996, I established Schuman Aviation Company Ltd. to provide, “the best customer service of

any aviatio n company in Hawaii , bar none.” M y local upbringing has given me a firm

understanding and appreciation of the culture of the people of Hawaii. My family’s relationships

with members of the Molokai community in some cases go back generations. My grandmother was

raised on the island of Molokai.

Makani Kai Helicopters, established in 1988 and based at the Honolulu International Airport, is

Oahu’s oldest, largest and most experienced helicopter tour company. In the quarter century since,

the company has provi ded aerial tours for over 14,000 persons annually without incident or

accident . The company owns two Eurocopter A

- Stars

, one MD

- 500 , and two Piper Chieftains

. The

company leases two Cessna Grand Caravan s.

Makani Kai Helicopters is the recipient of the F AA’s Diamond A ward for maintenance excellence

as well as the prestigious Platinum Safety Award from the Helicopters Association Internationa l

. Schuman Aviation Company is the only company of its kind in the U.S. to have been awar ded IS

BAO certification

. IS

- BAO is a code of best practices designed to help flight departments

worldwide achieve the highest level of safety and professionalism. IS

- BAO safety certification is

awarded to flight departments that have successfully met the rigorous IS

- BAO stand ard s as verified by an accredited IS

- BAO auditor. More topically, Makani Kai Helicopters provides the

heli copters and piloting services f or the CBS show, Hawaii Five

- 0

.

Schuman Aviation Company Ltd

. , dba Hawaii Aviation Services

, is a n FAA Part 141 Repa ir

Station (Certificate # MKHR108K) and is authorized by the FAA to perform work on Cessna 150 s

to 172 s and the Caravans, Piper Chieftains, Eurocopter A

- Stars , MD helicopters as well as

Lycoming, Turb omeca and Pratt & Whitney engines. All aircraft maintain ed under an FAA Repair

Station Certificate must adhere to a higher level of maintenance tracking , reliability and

accountability. Makani Kai Air has a reputation as a safe, reliable and accommodating air carrier,

sensiti ve to the needs of the communities i t serves

.

In 2010, Schuman Aviation Company Ltd. was granted Initial FAA Part 135 Scheduled Commuter

status by the Department of Transportation.

Reliability & Dependability

–

Makani Kai Air currently provides the Kalaupapa and Molokai communities with un precedented

convenience, flight availability and reliability. In providing EAS ser vice to Kalaupapa, we have

had not one cancellation for aircraft mechanica l issues. In two years’ of service, t he longest delay

for a flight was 45 minutes

, and there were just three days when flights had to be rescheduled due

to inclement weather.

The chief reason for our enviable record is the availability of a back

- up aircraft. If ever a

maintenance issue should arise, we can always press into service our twin

- engine P iper Chieftain.

The back

- up aircraft has another useful role: occasionally, inclement weather prohibits our Cessna6

Makani Kai Helico pters

– Makani Kai Air Charters

– Ko Olina Helicopters

– Pacific Air Express

– Hawaii Aviation

Services Proposal to Provide Essential Air Service at Kalaupapa (Continued)

from making the flight. Regulations require single

- engine aircraft to r emain within gliding distance

to shore. This means that our Cessna Caravans must climb to 7,500 feet over the channel, an

altitude that sometimes is obscured by clouds. Our Chieftain can safely and legally fly beneath the

weather and still make the trip. The Chieftain and crew are on call 24/7, so there is always an

alternative available. With the FAA Commuter Authorized Piper Chieftain on hand, we can service

the community of Kalaupapa with a n exceptional degree of reliability.

Makani Kai Air Charters p roposes to continue providing scheduled services to Kalaupapa using

the same nine

- seat Cessna 208B Grand Caravans as the regular aircraft that we have used thus far

.

Reservations and booking Ar rangements

–

. Although it is quick and easy to book reserva tions online at our website, MakaniKaiAir.com, we

have staff on hand to handle phone reservation requests and answer questions. This is to

accommodate the large percentage of Kalaupapa residents without Internet access. Our phones are

ans wered by a real li ve person 24 hours a day, seven days a week , and usually on the first ring. No

automated tellers, no distractions or d i versions.

Unlike any other EAS destination in the country, Kalaupapa does not allow free access, and

requires persons wishing to visit t o first gain sponsorship or to register for the Damien Tour. The

State of Hawaii Department of Health also restricts persons from under the age of 16 from visiting

the settlement . No person can come to Kalaupapa without first gaining a sponsor. Therefore i t has

become our responsibility to vet would

- be passengers prior to permitting them a ticket to fly to the

peninsula. This passenger screening is conducted without charge; it’s just another service we

provide to protect the community from unauthorized visi tors.

Each resident of Kalaupapa has a personal account with Makani Kai Air , allowing them to email or

call in reservation s at any time that is convenient

.

Flight Schedule

Makani Kai Air’s current flight schedule was developed by the residents of Kalau papa. This

followed a period of gathering comments in community meetings and took into account all parties

residing in Kalaupapa, including State of Hawaii workers and Federal Department of National

Parks employees

.

Makani Kai Air adjust ed its fight sche dule to better accommodate Kalaup a pa’s annual barge day

. Additional flight s were added to bring in personal to load and unload the barge. And our return

schedule was likewise modified in order to meet the need s workers when they ha d completed th eir

tasks.

Flight schedules also are changed when requested to meet the needs of the community for

occasional celebration s or special gathering s

. We feel that it is a matter of understanding and

appre ciating the situation a nd using common sense to support a small , i solated community

.7

Makani Kai Helico pters

– Makani Kai Air Charters

– Ko Olina Helicopters

– Pacific Air Express

– Hawaii Aviation

Services Proposal to Provide Essential Air Service at Kalaupapa (Continued)

Ease of Use

–

Makani Kai Air Charters brings travelers ease and convenience: our million

- dollar passenger

terminal in Honolulu obviates the need for TSA security scree ning. This:

• Allows lower fares because there are no gate fees

• Increased on

- time performance in arrival and departure times

• Allows faster turn

- around of aircraft and easier load ing and unloading of passengers

• V astly improves the experience by elimin ating l ines and security delays

In addition, we offer benefits to Kaluapapa travelers unavailable from conventional air carriers.

These benefits include:

• Free overnight parking

• Free shuttle service in and around the air port area, downtown and Waikiki

• No bags fee s

• No overweight bag fees

• No fees for pets

• No restrictions on individual body weight *

• No rescheduling fees

• No cancellation fees

• No charge to transport unaccompanied packages to and from Kalaupapa

• Clean rest rooms fully ADA compliant. Air

- conditioned waiting area.

Passe ngers simply arrive 15 to 20 minutes in advance of departure, board the aircraft and fly.

Also, because there are non

- ambulatory residents at Kalaupapa , w e engineered the ability to

transport wheelchair

- bound passengers. We have the equipmen t at Kalaupapa and in Honolulu to

assist passengers into and out of the aircraft , safely and with dignity

. This is an important

distinction as some competitors simply do not accept wheelchair bound individuals.

* An important consideration for at least tw o of Kalaupapa’s patients who weigh in excess of 300

pounds and thus may be restricted from flying with our other competitors.8

Makani Kai Helico pters

– Makani Kai Air Charters

– Ko Olina Helicopters

– Pacific Air Express

– Hawaii Aviation

Services Proposal to Provide Essential Air Service at Kalaupapa (Continued)

In Summary

–

Makani Kai Air Charters is a home grown company , one with deep roots in the community, one

with Hawaii and its people in its heart. We are a professional organization with accolades from

countless customers over two decades of sterling service, with the solid endorsement of the FAA

and the communities of Molokai and Kalaupapa. We submit this proposal respectfully and based

upon a genuine desire to provide good service to people who deserve such service.

It is our fervent hope that the DOT makes the right choice once again for the people and the

commun ity of Kalaupapa

.

Sincerely,

G. Richard Schuman

President9

Makani Kai Helico pters

– Makani Kai Air Charters

– Ko Olina Helicopters

– Pacific Air Express

– Hawaii Aviation

Services APPENDEX A

Estimated Annual Revenue: Kaluapapa Resident Prices

Between HNL & LUP $90,480 $ 72.50* Kaluapapa residents price for term of contract

Between MKK & LUP $79,560 $ 4 2.50* Kaluapapa residents price for term of contract

* plus FET Tax and Segment Fees.

Total Revenue $170,040

Averaged Estimated Expenses over the course of the contract :

Aircraft $180,000.00

Insurance $ 96,000.00

Pilots $ 162,240.00

Fu el $ 228,150.00

Maintenance $ 117,000.00

Engine & Prop Reserve $ 97,500.00

State Landing Fees $ 15,974.40

Administration $ 85,000.00

Total Expenses $ 981,864.40

Operational Loss $( 811,824.00 )

Departures per year: 2616

Flight Hours per year: 936

TWO YEA R SERVICE PLAN

Subsidy requested 1 st year $ 787,386.60

Estimated passengers 2800

Subsidy requested 2 nd year $ 771,232.80

Estimated passengers 3000

FOUR YEAR SERVICE PLAN

Subsidy requested 1 st year $ 751,040.00

Estimated passengers 2800

Subsidy requested 2 nd year $ 730,848.00

Estimated passengers 3000

Subsidy requested 3rd year $ 710,656.00

Estimated passengers 3200

Subsidy requested 4 th year $ 690,463.00

Estimated passengers 3 40010

Makani Kai Helico pters

– Makani Kai Air Charters

– Ko Olina Helicopters

– Pacific Air Express

– Hawaii Aviation

Services APPENDIX B