1

Makani Kai Helic opters

- Magnum Helicopters

- Ko Olina H elicopters

- Makani Kai Air

- 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 Helic opters

- Magnum Helicopters

- Ko Olina H elicopters

- Makani Kai Air

- Hawaii Aviation Services 

### Schuman Aviation Company, Ltd

130 Iolana Place, Honolulu , HI 96819

8 08

- 834

- 5813 Fax 808

- 837

- 7867

r ichard@MakaniK ai.com

May 6 , 2013

Susan L. Kurland

Assistant Secretary for

Aviation and International Affairs

RE: Proposal to Provide Ess ential Air Service at Kamuela , Hawaii

Dear M s. Kurland

,

I am respon ding to the notice I ssued by the Department of Transportation on the 25 th of April,

2013, related to providing Essential Air Service to Kamuela, Hawaii. Schuman Aviation Company

Ltd, dba Makani Kai Air Charters (FAA Air Carrier Certificate MKHA108K), respectfully submits

its bid for provision of Essential Air Service at Kamuela , Hawaii. The p roposed two year service

profile and pricing details are:

Service Profile Details / Frequency Annual Subsidy

YEAR ONE

Honolulu, HI and Kamuela , HI Two (2)

, nonstop round trips

Between Honolulu International

Airport (PHNL) a nd Kamuela Airport,

(PHMU) Monday through Saturday $ 998,950.00

YEAR TWO

Ho nolulu, HI to Kamuela , HI Two (2), nonstop round trips

Between Honolulu International

Airport (PHNL) and K amuela Airport,

(PHMU) Monday through Saturday $ 948,925.003

Makani Kai Helic opters

- Magnum Helicopters

- Ko Olina H elicopters

- Makani Kai Air

- Hawaii Aviation Services Proposal to Provide Essential Air Service at Kamuela (Continued)

For Revenue and Expense Details, See Appendix A.

Background

–

Kamuela is one of the most isolated communities on the island o f Hawaii. Pacific Wings

, currently

the only scheduled commercial airline serving Kamuela for the past decade, did so under an EAS

subsidy agreement until it canceled the agreemen t

. The company provided subsidy

- free service but

evidently determined that such service was not profitable. Pacific Wings has petitioned the DOT to

suspend its service to Kamuela in order to re

- submit a proposal to provide EAS to Kamuela

. They

employed a s imilar tactic with the community of Kaluapapa on the island of Molokai

.

In order to determine what the community of Kamuela wants and needs for air service, we

interviewed residents and workers to find out what they are looking for in an air service provi der.

Along with the usual requirements of safety, reliability and timeliness, those we spoke with made

it clear that they would like to be able to come to Honolulu direct from Kamuela for business or

personal appointments and return to Kamuela the same da y

.

About Schuman Aviation Company Ltd

–

Schuman Aviation Company Ltd. is a locally owned business that has operated Makani Kai

Helicopters since 1996. The Schuman name is well known in Hawaii: Gustav A. Schuman , my great grandfather, immigrated to Hawai i 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

.

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

any aviation 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.

Makani Kai Helicopters, established in 1988

, based at the Honolulu International Airport, is

Oahu’s oldest, largest and most experienced helicopter tour company. In 25 the years since its

inception , the company has provided aerial tours for over 14,000 persons annually without incident

or acci dent. The company employs two Eurocopter A

- Stars , an MD500 and uses a Robinson R

- 44

for special jobs and photo charters.

Makani Kai Helicopters is the recipient of the FAA’s Diamond Award for maintenance excellence,

the prestigious Platinum Safety Awar d from the Helicopters Association International, and is a

member of TOPS, The Tour Operators Program of Safety. The company received further

recognition of its commitment to safety in 2012 when it became accredited by the International

Standard for Bus iness Aircraft Operations (IS

- BAO), the first such aircraft operator in the country

so distinguished. IS

- BAO safety certification is awarded to flight departments that have

successfully met the rigorous IS

- BAO standards as verified by an accredited IS

- BA O auditor.

More topically, Makani Kai Helicopters provides the helicopters and piloting for Hawaii Five

- 0

.4

Makani Kai Helic opters

- Magnum Helicopters

- Ko Olina H elicopters

- Makani Kai Air

- Hawaii Aviation Services Proposal to Provide Essential Air Service at Kamuela (Continued)

S chuman Aviation Company Ltd

. dba Hawaii Aviation Services is a n FAA Part 14 1 Repair Station

(Certificate # MKHR108K) and is authorized by the FAA to perform work on Cessna 150 s, 172 s

and 208 Caravans, Piper Chieftains, Eurocopter A

- Stars , MD500’ s and Robinson helicopters, as

well as Lycoming, Turbomeca, Allison, and Pratt & Whitney engines. All aircraft maintained

under an FAA Repair Station Certificate are accountable to a higher level of maintenance tracking

, reliability and accountability.

In 2009, the company expanded its operations with the addition of two Piper Ch ieftains

, two

Cessna Grand Caravans, and established Makani Kai Air Charters. The Grand C aravans make

regular scheduled flights to Kaluapapa, Molokai , carrying residents and physicians as well as

tourists and others wishing to take the Father Damien T our. Makani Kai Air Charters has built its

reputation as a safe, reliabl e and accommodating air carrier sensitive to the needs of the Molokai

community.

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

stat us by the Department of Transportation

Reliability & Dependability

–

Makani Kai Air Charters proposes to provide scheduled air service to Kamuela using nine

- seat

Cessna 208B Grand Caravans, the same aircraft currently used by the incumbent carrier. The

Caravan has proven to be an exceptionally reliable aircraft for Makani Kai and has enjoyed a

99 .9 %+ reliability record in conducting our current EAS commitment to Kalaupapa on the island

of Molokai

.

As you may be aware, FAA regulations stipulate that a si ngle

- engine aircraft such as the Caravan

must remain within gliding dista nce to shore whenever carrying passengers over water

. Occasionally, weather will preclude climbing to such high altitudes and safely descend into

Kamuela, which means possibly delayin g or cancelling flight s

. Caravans must also submit to

regular schedule maintenance that will take the aircraft out of service for a period of hours up to a

few days. In either event, our back up plan to continue the reliable service is to launch into servi ce

one of our back up aircraft, the nine seat Piper Chieftain. B ecause the Piper is a t win

- engine

aircraft it has no such altitude restriction. We can fly below the weather on our way to service

Kamuela thus increasing reliability and dependability

. Having a backup aircraft available and a

pilot on standby, every day, has made our Air Carrier reliability and dependability unmatched in

the State of Hawaii. Just ask the residents of Kalaupapa.

Makani Kai’s convenient location at the Honolulu International A irport means Kamuela

passengers will have easy access to the national transportation network and every large domestic

FAA Part 121 air carrier.

Although it will be quick and easy to book reservations online through our website, we plan to

fully staff a ph one bank to handle reservation requests and answer questions. This is primarily to

accommodate those Kamuela residents who lack Internet access. Our phones are answered by a

live person 15 hours a day, seven days a week.5

Makani Kai Helic opters

- Magnum Helicopters

- Ko Olina H elicopters

- Makani Kai Air

- Hawaii Aviation Services Proposal to Provide Essential Air Service at Kamuela (Continued)

Community Views

–

We interviewed several Kamuela residents to determine what they are looking for in scheduled air

service to the community. Besides the obvious plea for lower air fares and reliable service , there

was conse nsus that the company chosen to provide EAS to Kamuela should be accommodating to

the community’s specific needs, such as ensuring that the aircraft is accessible by disabled persons,

that the flight schedule would allow transit to Honolulu and back to Kam uela the same day, and

that the air carrier have a prove n track record of safety and on

- time service. It was also noted that

the chosen carrier should be financially stable and able to provide air service for years to come.

In addressing that last concern , I’d like to point out that Schuman Aviation is a responsible

corporate citizen, held in high regard wi thin the Hawaii business community

, a nd i s recognized by

Hawaii Business magazine for excellence in small business. The company is well run and

financia lly strong.

Ease of Use

–

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

- dollar passenger

terminal in Honolulu obviates the need for TSA security screening. This will :

• A llow lower fares because there are no gate fees

• I ncr ease consistency in arrival and departure times

• A llow faster turn

- around of aircraft and ease the load ing and unloading of passengers

• V astly improve the air transport experience by eliminating line s and security delays

The c omfortable and spacious air

- co nditioned passenger terminal offers other advantages:

• P lenty of f ree parking

• Free shuttle service around the airport area, downtown and Waikiki

• Clean , ADA

- compliant rest rooms

Passengers will simply arrive 20 minutes in advance of departure, board the ai rcraft and fly.

Als o, in recognition of the fact that there are persons in Kamuela who are not ambulatory , we are prepared to accommodate wheelchair

- bound individuals with the Caravan . Several years ago, I

made a commitment to disabled persons by fabrica ting an electric lift to transport wheelchair

bound pas sengers into the helicopter. It was then and remains now my conviction that disabled

persons should have every opportunity to enjoy what other visitors enjoy, if at all possible.

The lift provides eas y and convenient access to our aerial tours and helps disabled person s maintain dignity while getting into and out of the aircraft.6

Makani Kai Helic opters

- Magnum Helicopters

- Ko Olina H elicopters

- Makani Kai Air

- Hawaii Aviation Services Proposal to Provide Essential Air Service at Kamuela (Continued)

In Summary

–

Makani Kai Air Charters is a home g rown company, one deeply rooted in the community, one with

Hawaii and its people in its heart. Here is a professional organization with accolades from

countless customers over a quarter century of sterling service, with the solid endorsement of the

FAA and the communities of Molokai and K alaupapa . We submit this proposal respectfully based

not on the prospect of boosting the bottom line for stockholders, but rather from a genuine desire

to provide good service to people who deserve such service. It is my pe rsonal belief that should we

provide Kamuela with the same on time dependable service which we have been providing the

residents of Kalaupapa, the ridership will increase with the hopes that the increase in passengers

would be enough to someday go subsidy free without having to raise the prices to the ridiculous

level Pacific Wings employed.

It is our fervent hope that the DOT takes a long look at the capabilities and commitment to

unmatched levels of service offered by Makani Kai and make the right choice for a community in

need.

Sincerely,

G. Richard Schuman

President

Diane Schuman

CFO7

Makani Kai Helic opters

- Magnum Helicopters

- Ko Olina H elicopters

- Makani Kai Air

- Hawaii Aviation Services APPENDEX A



### Estimated Annual Revenue :

HNL

– MUE

- HNL $ 93,600 .00 $ 150 .00*per passenger one way

* plus FET Tax and Segment Fees.

Total Revenue $93, 600.00



### Estimated Expenses:

Aircraft $180,000.00

– Aircraft Lease

Insurance $ 76,000.00

Pilots $ 162,240.00

Fuel $ 269,568 .00

Maintenance $ 187,250.00

– Parts and labor

Engine & Prop Reserve $ 149

, 8 00.00

– Set aside for engine and propeller overhauls

S tate Landing Fees $ 15,600

.

Administration $ 85,000.00

Facilities & Utilities $55,000.000

Total Expenses $1, 179,658.00



### Operational Loss $( 1,0 86,058.00 )

Subsidy requested 1 st year $ 998,9 50 .00

Subsidy requested 2 nd year $ 948,925 .00



### Estimated passengers 1st year 624

Departures 1248

Flight Hours 1498

Daily Flight Schedule: Monday thru Saturday

Depart Honolulu (HNL) 5:30am Arrive ( Kamuela ) 6:45 am

Depart Kamuela (MUE ) 7:05a m Arrive Honolulu (HNL) 8:20am

Depart Honolulu (HNL) 4 :00pm Arrive Kamuela (MUE ) 5 : 15 pm

Depart Kamuela (MUE ) 5 :30pm Arrive Honolulu (HNL) 6:45 pm