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/ Befor e th e

Departmen t

o f Transportatio n Washington , D.C . Offic e o f th e Secretar y "•'••/•RTMENTO F

- : cc; ; . o ; D 1 : 1 3

I n th e Matte r

o f ESSENTIA L AI RSERVIC E A T PELICA N & ELFI N COVE , A K Docke t DOT-OST-2002-1158 6

SERVIC E PROPOSA L O F ALASK A SEAPLAN E SERVICE , LLC .

Communication s with respec t t o thi s documen t

shoul db e addresse dto : Han k Myer s MT C P C Bo x 714 2 Bellevue , WA 9800 8 425-830-426 5 hank@mtcworld.co m Crai g Loke n Alask aSeaplan e Service , LL C 187 3 Yanduki n Driv e Juneau , A K

9980 1 907-789-333 1 aral@alaska.co m February 7 , 201 1Befor e th e Departmen t

o f Transportatio n Washington , D.C . Offic e o f th e Secretar y I n th e Matte r

o f ESSENTIA L AI RSERVIC E A T PELICA N & ELFI N COVE , A K Docke t DOT-OST-2002-1158 6

SERVIC E PROPOSA L O F ALASK A SEAPLAN E SERVICE , LLC .

Alask aSeaplan e Service , LL C (Seaplanes ) hereb y submit s it s proposa l t o provid e Essentia l Ai r

Service t o th e point s Pelica n an dElfi n Cove , Alaska . Th e attache dproposa l i s state di n term s o f

subsid y nee dpe r

yea r for eithe r tw o year s o r

throug h January 31 , 2015 . Consisten t

with Departmen t

preference , th e subsid y nee di s quote da t aleve l rat e fo r eac h year . Consisten t

with th e reques t

fo r proposals . Seaplane s propose s t o serv e Pelican si x day s awee k

year around , whil e Elfi n Cov e wil l b e serve dfiv e day s awee k durin g ashortene dpea

k summe r season , an dtwic e awee k durin g th e off-season . HISTOR Y O F SERVIC E Seaplane s ha s bee n providing Essentia l Ai r Service t o Pelica n an dElfi n Cov e sinc e it s familial predecesso r

carrier , Channe l Flyin g Service , wa s certificate dthirty year s ago . Both Pelica n an dElfi n Cov e wer e significan t fishin g ports , an dPelica n ha dth e larges tcol dstorag e facility i n th e are acomplet e with fis h buyer s an dprocessors . I n 200 2 ther e wa s asignifican t

downtur n i

n local fishing , an dth e occurrenc e o f th e firs t closur e o f Pelica n Coi dStorage . Alask aSeaplane s file dit s 90-da y notic e t o eliminat e servic e a t th e tw o points , an dwa s hel di n pendin g a

n Essentia l Service revie w i n May , 2002 . Subsequentl y th e permanen t reductio n i n commercia l fishin g i n th e are awa s enacte dint o Federa l law wit

h th e closur e o f

th e Glacie r

Bay fishin g grounds . Whil e ther e hav e bee n sporadi c attempt s t o reope n th e col dstorag e plant , al l wer e unsuccessfu l an dth e plan t remain s close dtoday . Durin g th e si x month winte r period , servic e i s provide dusin g deHavillan dBeave r aircraf t o n amphibiou s floats . Th e Junea u Airport floa t pon di s froze n i

n th e winter , necessitatin g usin g wheele doperation s a t Juneau an dse alanding s a t Pelica n an dElfi n Cove . Durin g th e summe r

seaso n th e floa

t pon dallow s servic e wit

h straigh t floa t aircraft . Thes e aircraf t hav e abou t

50 0 lbs . greate r

payload , an dar e slightl y faste r than th e amphibiou s floa t aircraft . Seaplane s ha s consistentl y reinveste di n it s flee t an dfacilities . Fiv e year s ag o i t adde da secon dse t

o f amphibiou s float s t o assur e backu p coverag e fo r it s Pelican/Elfi n Cov e service . I n 200 9 i t adde dathir dse t

o f amphibiou s float s t o assur e tha t it s entir e flee t

o f Beaver s woul db e availabl e yea r around . Thi s winte r

aprivatel y owne dfour-wheele r drivin g o n th e boardin g doc k a t Pelica n accidentall y ra n acros s th e fron t o f th e float s of th e seaplan e an dheavil y damage dth e nos e landin g gear s whic h wer e i n th e retracte d positio n fo r

wate r landing . Becaus e th e Hoa t pon da t Junea u wa s closed , th e aircraf t ha dt o b e ferrie dt o lan do n th e riverfron t i n Juneau , the n haule dou t an dtake n t o th e Seaplane s hangar

for thre e week s o f

repairs . Ther e wa s n o interruptio n o f servic e a t any o f th e fou r Essentia l Service point s serve db y Seaplane s becaus e o f th e adde dinvestmen t i n amphibiou s floats . Servic e durin g th e winte r i s problemati c becaus e challengin g weathe r i n th e ai r an do n th e water , h i atypica l winte r ther e wil l b e abou t

thre e time s whe n servic e canno t b e provide dfor

mor e than aweek . With th e limite dpayloa do f amphibiou s aircraft , extr a section s wit

h n o retur n traffi c invariabl y los e mone y regardles s o f th e load . With fewer flight s an dles s payloa davailabl e t o transport th e backlog . Seaplane s i s regularl y require d t o operat e flight s a

t alos s tha

t excee dthat

week' s subsidize dflight limit , h i s estimate d that o n averag e fiv e additiona l flight s ar e operate dthre e time s awinte r t o transpor t

mai l an dfreigh t

backlogge ddu e t o weathe r t o Pelican , an dsi x additiona l flight i s tota l t o Elfi n Cove . Whil e n o othe r

ai r carrier s operat e durin g th e winte r months , durin g recen t

summer s singl e pilo t

operator s ha\ e offere d"regular " servic e to an dfromPelican . On e carrie r i n particular establishe dabas e i n Pelican , advertise dan dpublishe dlocall y aregular schedul e o f

departures , an dorganize dacampaig n t o oppos e designatio n of Seaplane s t o provid e Essentia l Service . Whil e local resident s retracte dsupport afte r th e inten t

o f th e petition s becam e known , th e crea mskimmin g significantl y reduce dpassenge r an dfreight traffi c durin g th e peak

summe r months . Complaint s t o th e DO T an dFAA di dno t resul t i n any enforcemen t

action , h i 201 0 ther e wer e n o unlawfu l "scheduled " operation s b ythes e singl e pilo t operations , a s reflecte di n th e highe r traffi c number s after

th e thir d quarte r o f 2009 . Th e attache dtraffi c projection s assum e n o unlawfu l competitio n durin g th e projecte dperiod , howeve r Seaplane s wil l see k

enforcemen t

actio n agains t

any carrie r providin g commute r

ser\'ic e tha

t ha s no t bee n foun dfi

t b y th e Department . Ironically , th e unlawfu l schedule dservice s hav e onl y bee n offere db y singl e pilo t operator s whic h can no t qualif y for afitnes s finding . Becaus e th e thir dquarte r generate s th e onl y profitabl e operation s durin g th e year . Seaplane s wil l rel y o n th e goo doffice s o f th e Departmen t

t o enforc e it s fitnes s regulations . BASI S O F PROPOSA L

Havin g jus t

conclude dth e Essentia l Service selectio n for Angoo n an dTenakee , th e sam e cos t pe r hou r develope di n tha

t cas e ha s bee n use dher e ($785.15) . Traffi c i s base do n th e yea r ende dJune , 2010 . Ove r th e las t four years , traffi c a

t both Pelica n an dElfi n Cov e ha s declined , an dtraffi c toda y i s ove r 30 % belo w C Y 200 0 levels . None-the-less , i n th e las t yea r on e marke t

ha s actuall y gaine dtraffi c slightl y whil e th e othe r ha s decline db y a similar amoun t compare dt o 2009 . Thi s i s similar t o th e projectio n use di

n th e Angoon/Tenake e case . Tota l revenu e i s base do n curren t yield s time s curren t

traffic . I t i s expecte dthat

commercia l revenu e wil l remai n leve l for th e perio do f

th e offer , with fare s an drate s risin g t o kee p abreas t of expens e escalation . I n additio n t o traffi c declinin g sinc e th e beginnin g o f subsidize dservice , reduction s i n tota l service , an dincrease s i n passenge r

fare s an dfreight

rates . Seaplane s propose dt oreduc e th e pea k perio dservic e fo

r Elfi n Cov e t o 1 8 week s fro m2 6 weeks . Thi s reduce s th e peak perio doperation s b y ove r 25% . Seaplane s propose s 31 2 roundtrip s betwee n Juneau an dPelica n (5 2 * 6) , an d15 8 roundtrip s betwee n Junea u an dElfi n Cove r ( 5 * 1 8 plu s 2 * 34) . Th e cos t

pe r hou r i s $785.15 , a s approve di n th e Angoo n an dTenake e EA S contract . Becaus e o f

inclemen t

weathe r durin g th e 3 4 week

winte r period . Seaplane s i s unabl e t o serv e Pelica n an dElfi n Cov e for ove r awee k a t atim e for

typicall y thre e time s ayear . Th e subsid y paymen t pe r departur e performe di

n th e reportin g wee k

i s adjuste dt o allo w for th e additiona l makeu p flight s neede dt o mov e backlo g freight an dmai l traffi c whic h coul dno t

b e mad e u p durin g th e actua l week o f inclemen t

weather . A s note dabove , th e Departmen t ha s requeste doffer s fo

r th e standar dtw o yea

r period . Seaplane s i s proposin g alonge r perio da s well . Whil e th e Departmen t can choos e th e lengt h o f th e contrac t

period . Seaplane s encourage s th e Departmen t t o adop t acontrac t throug h Januar y 31 , 2015 . Th e longe r perio dha s promote dstabl e operations , reinvestmen t

o f return s int o th e operation , an daclose r relatio n wit

h th e communitie s served . Januar y 31 , 201 5 i s th e expiry dat e o f th e Angoon/Tenake e contract , s o i n th e future al l fou r

point s coul db e bi dtogether . Thi s i s th e mos t efficient proposa l for

al l parties , an dminimize s th e expens e o f both filin g an dadjudicatin g th e proposals . Alask aSeaplan e Servic e i s th e onl y fit an dcertificate dai r

carrie r operatin g schedule d servic e i n amphibiou s aircraf t i n Juneau . I

t ha s provide dreliabl e an dcos t effectiv e servic e i n thes e market s for nin e years , an dha s continue dt o tak e step s t o provid e th e mos t cos t effectiv e servic e possible . Eve n whe n face dwit h unlawfu l competition ,Seaplane s continue dt o offe r full Essentia l Service , an dha s neve r requeste darat e adjustment . Seaplane s i s th e onl y carrie r with groun dfacilitie s a

t both Junea u an d Pelican , an dth e onl y cartie r with full tim e agent s a

t al l thre e points . Seaplane s maintain s a n up t o dat e websit e with th e ability t o boo k an dpay for

seat s a t adiscounte drate . WHEREFORE , Alask aSeaplan e Service , LL C respectfull y request s tha t i t b e designate dth e Essentia l Ai r Service contracto r

fo r Pelica n an dElfi n Cove , Alask a throug h Januar y 31 , 201 5 a t th e rate s describe di n Appendice s A throug h C . Respectfull y submitted , Alask aSeaplan e Service , LL C

B y Han k Myer s Februar y 7 , 201 1c 0 ) Q . 

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### o o U JAppendi x B Pag e 1 o f 1 

### PROJECTE D REVENUE , PEC/EL V EAS 2011-201 4 TOTA L MARKE T TRAFFI C

TRAFFI C # Passenger s 53 7 Freigh t 86,64 0 Mai l 49,46 6 Passenger s 554 Freigh t 23,03 3 Mal l 11,68 4 MARKE T Juneau-Pellca n Pelican-Junea u

Juneau-Elfi n Cov e Elfi n Cove-Junea u Passenger s Freigh t Mail Passenger s Freigh t Mai l 28 8

18,26 7 26,11 2 26 8 6,14 2 7,29 4 ESSENTIA L SERVIC E TRAFFI C MARKE T Juneau-Pellca n Pelican-Junea u TRAFFI C Passenger s Freigh t Mai l Passenger s Freigh t Mail 51 4

82,98 0 47,37 6 53 1 22,06 0 11,19 0 PROJ . YIEL D

$132.0 0 $0.5 5 $1.4 9 $132.0 0 $0.5 5 $1.4 9 REVENU E

$67,889.4 4 $45,638.8 9 $70,686.3 3 $70,038.6 4 $12,132.9 7 $16,696.3 0 £283.082.5 6 Juneau-Elfi n Cov e Elfi n Cove-Junea u Passenger s Freigh t Mai l Passenger s Freigh t Mai l 270

17,13 7 24,49 6 25 1 5,76 2 6,84 3 $132.0 0

$0.5 5 $1.4 4 $132.0 0 $0.5 5 $1.4 4 $35,663.7 2

$9,425.1 9 $35,321.2 0 $33,187.0 7 $3,169.0 8 $9,866.4 5 $126,632.7 2Appendi x C Pag e 1 o f 1 

### PE C & ELV SUBSID Y NEE D CALCULATIO N PELICA N TOTA L COMMERCIA L REVENU E $283,082.5 6 TOTA L ECONOMIC EXPENS E $468,803.1 3 BASI C SUBSID Y NEE D PE R YEA R $185.720.5 7 TOTA L DEPARTURE S (R T * 2 ) 62 4 SUBSID Y NEE D PE R SCHEDULE D DEPARTUR E $297.6 3 WEEKL Y CEILIN G - YEA R AROUN D $3,571.5 5 ELFI N COV E TOTA L COMMERCIA L REVENU E $126,632.7 2 TOTA L ECONOMI C EXPENS E $202,022.5 4 BASI C SUBSID Y NEE D PE R YEA R $75.389.8 2 TOTA L DEPARTURE S (R T * 2 ) 31 6 SUBSID Y NEE D PE R SCHEDULE D DEPARTUR E $238.58 WEEKL Y CEILIN G - 1 8 WEE KPEA K$2,385.7 5 WEEKL Y CEILIN G - 3 4 WEE KOFF-PEA K$954.3 0