In the Matter of: Before the EAS & Domestic Analysis Division, X-53 Office ofAviation Analysis, Room 6401 Department ofTransportation 400 7th Street, S.W. Washington, D.C. 20590
) ) ) ESSENTIAL AIR SERVICE AT MINTO AND MANLEY,ALASKA Docket OST2004-17563 )



## Proposal to Provide EssentialAir Service at Minto and Manley Hot Springs, Alaska Warbelow's hereby submits its proposal to continue subsidized serviceto Manley and Minto, Alaska for the two year contractperiodbeginning September 1, 2012. Manley and Minto have historicallybeenprovided with single engine aircraft service due to their close proximityto Fairbanks as well as runway conditions inManley. Priorto June of this year, Warbelow'sprovidedthis service is a Cessna206, however; more recently Warbelow's has been providirtg
..lhe service in a PiperNavajo Chkftan [PA 3r:.JSO]. This proposaNs primarilybased onservice withthe PiperNavajo Chieftan: three days perweek service with nine insured passenger seats, the balance ofthe capacity reserved for mail andfreight. Wehave included the expenses for the PA 31-350 as well as the Cessna 206 in Schedules A and B respectively. Revenue projections are based onnumbers from 2010 and 2011. We expect similartraffic overthe proposed subsidy period. Ourcost datais based on ourbestestimate ofcosts overthe nexttwo years and historical costs adjusted for known orexpectedcost changes. Theproposed service is from Fairbanks directto Manley, from Manley directto Minto, and then Minto to Fairbanks. 

## Rates Order 2011-06-14 set new mail rates that we expect will be effective at the start ofthe proposed subsidy period, therefore we have usedthose rates to calculate projectedmailrevenue.

### 1 0'']---------------- ---

.. 

### RTM $12.955 Manley·

.RTM $16.161 Minto , .

Terminal/Ton Enplaned $716.16 Fairbanks-Manley 82 miles Fairbanks-Minto 50 miles Thereforethe P-135 rate for Manley will be $0.90 perpound And the P-135 rate for Minto will be $.76 perpound
Current passenger fares and cargo rates are used in these calculations. These reflect no change overthe current subsidy period. 

## Schedule The following schedule has beenpublished in the OAG, operated MWF.
Fairbanks Manley Minto Fairbanks .Arrive 0935 1·000. 1030 Depart 0900 0940 1005 Block Time 35min 20 min 25 min Total Time 1.33


### Flight times have been updated based on our actual experience over previous years when the PA 31-350 was flown due to**advers~** 

### weather conditions. Over the two year analysis period, estima!ed hours pet; year are: 52 weeks x 3 flights per week x 1.33 hours per flight= 208 

### hours with a PA31-350 Flighttimes for the Cessna206 are based onhistorical data as follows. 52 weeks x 3 flights per weekx 1.9 hours perflight= 296.4 

### hours with a Cessna206


## Projected Demand Passenger, cargo and mail traffic is based on an average ofour actual reported volumes for 2010 and 2011. Although there has been a significant decrease in passenger travel from Minto, Manley has experienced a small increase in travel in the past two years. We cannot project an increase in growth for passenger revenue and expect this to remain constant. With


### 2'· " AI 

### increased energy costs a)ld declines in Federal spending we do not anticipate upward changes in the rural villages. 

## Projected Expenses We have not projected any fuel cost increases. The following expenses are based on the : F2, 298c DOT Quarterly Reports for the years 2010 and 2011. Although our first proposal is basedon service provided in a PA 31-350 Navajo Chieftan, we are also aware that due to problems with the Manley runway it may not be possible to utilize this aircraft one hundred percent ofthe time. We have also included expense numbers for the use ofa Cessna 206 should the maintenance on the runway in Manley not allow for a PA 31-350. Therefore we are offering two proposals which could be used interchangeably depending on the conditions available at the time service is provided. 

## Aircraft Type/Utilization W AV offers for consideration by DOT and the villages service in a twin engine aircraft which will allow more uninterrupted.travel and delivery ofgoods. We are versatile enough to also allow for the variationsinconditions experienced in Alaska.

- The total subsidy**req~est** 

### assuming 100% utilization ofPA 31-350 service is $1**~2,**1**~6.14** 

### over a two year period. Ifthe service is provided 1 00% ofthe time in a Cessna 206, the total subsidy over a two year period would be $174,553.38. In reality, the total subsidy will be between these two figures depending on what aircraft is utilized for service. In any given scenario these rates represent a decrease overthe 2010-2012 subsidy contract. These rates would equate to $139.87 per arrival/departure in the Cessna and,$145.94 per arrival/departure·in the PA 31-350. · - ' · ·**~** r , · 

### Ifyou have any questions orrequire further clarification, please don'thesitate to contact us.

# ~~' Matthew Atkinson Warbelow's Air Ventures, Inc. 3758 University Avenue South Fairbanks, Alaska 99709 adventure@northemalaska.com 907-474-8600



### 3Block Hours Aircraft Type: 

# Schedule A
Warbelow's AirVentures, Inc.

Essential Air Service To Be Provided At Minto & Manley, Alaska 208 PA 31-350 3 trips/wk Annually 9 seats
Routing: Fairbanks > Manley> Minto > Fairbanks 2010-11 Passenger Revenue Manley Minto

Less Passenger Tax 7.5% Passenger Total Cargo Revenue Manley Minto Cargo Total Mail Revenue Manley Minto Mail Total Total Revenue

Allocated Block Hours Direct Expense Pilot & Co-pilot Fuel & Oil Other Maintenance Depreciation/Rental Total Direct Expense

Indirect Expense 208 hr@ $132.73 pr hr Pax 34 186

Pounds

25.30 1810

Pounds. 37450 19800

.· Fare 85.00 79.00

Rate 0.49 0.40

Rate 0.90 0.76

PA 31-350 Rate per · Block Hour 208 94.56 166.01 16.25 181.63 100.00 Totals $2,890.00 $14,694.00 $1,626.79 $16,357.21 $1,239.70

$724.00 $1,963.70 $33,705.00 $15.048.00 $48,753.00 $67,073.91

$19,668.48 $34,530.08 $3,380.00 $37,779.04 $20,800.00 $116,157;60

$27,607.84 4Total Operating Cost Profit Element ofTOC = Total Economic Cost 0.10 Subsidy need at 100% Completion

Total Operating Cost Profit Element @ 10% ofTOC Total Economic Cost Projected Revenue Subsidy need at 100% Completion Subsidy on an annual basis

Direct Expense based on F2 data from 2010-11 Indirect Expense of $132.73 based on F2 data from 2010-11

"t'**'~.** $143,765.44 $14.376.54 $158,141.98 $91,068.07

$143,765.44 $14,376.54 $158,141.98 $67,073.91 $91,068.07 $91,068.07 annually



### 5

# . ' 

# .

Block Hours**AircrC~ft** Type: 

# Schedule B

. :J:, '·' Warbelow's AirVentures, Inc.

Essential Air Service To Be Provided At**~into** &Manley, Al'aska 296.4 3trips/wk Annually Cessna 206 5 seats
Routing: Fairbanks > Manley> Minto > Fairbanks Passenger Revenue Manley Minto

Less PassengerTax 7.5% PassengerTotal Cargo Revenue Manley Minto Cargo Total Mail Revenue Manley Minto Mail Total ·Total

Revenue

Allocated Block Hours Direct Expense Pilot & Co-pilot Fuel &Oil Other Maintenance Depreciation/Rental Total Direct Expense Indirect Expense 296.4 hr@ $132.73 pr hr 2010-11 Pax 34 186

Pounds

2530 1810

Pounds 37450 19800 Fare 85.00 79.00

Rate 0.49 0.40

Rate 0.90 0.76

Cessna Rate per Block Hour 296.4 42.08 65.16 16.25 137.19 80.00 Totals $2,890.00 $14,694.00 $1.226.79 $16357.21
. $1,239.70

$724.00 $1,963.70
$33,705.00 $15.048.00 $48,753.00 $67,073.91

$12,472.51 $19,313.42 $4,816.50 $40,663.12 $23,712.00 $100,977.55
$39,341.17


### 6Total Operating Cost Profit Element ofTOC 

## = Total Economic Cost $ubsidy need at 100% Completion

Total Operating Cost 0.10

Profit Element@ 10% ofTOC Total Economic Cost Projected Revenue Subsidy need at 100% Completion · Subsidy on anannual basis

Direct Expense based on F2 data from 2010-11 Indirect Expense of$132.73 based on F2 data from 2010-11

t'
. $140,318.72 $14.031.87 $154,350.60 $87,276.69 annually

$140,318.72 $14,031.87 $154,350.60 $67,073.91 $87,276.69 $87,276.69



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