In the Matter of: 

Before the 

EAS & Domestic Analysis Division, X-53 

Office of Aviation Analysis, Room 6401 

Department of Transportation 

400 7th Street, S.W. 

Washington, D.C. 20590 

) 

) 

ESSENTIAL AIR SERVICE AT ) 

MINTO AND MANLEY, ALASKA Docket OST 2004-17563 ) 

Proposal to Provide Essential Air Service at Minto and Manley Hot 

Springs, Alaska 

Warbelow's hereby submits its proposal to continue subsidized service to Manley and 

Minto, Alaska for the two year contract period beginning September 1, 2012. 

Manley and Minto have historically been provided with single engine aircraft service due 

to their close proximity to Fairbanks as well as runway conditions in Manley. Prior to June of 

this year, Warbelow's provided this service is a Cessna 206, however; more recently Warbelow's 

has been providirtg .. lhe service in a Piper Navajo Chkftan [PA 3 r:.JSO]. This proposaNs 

primarily based on service with the Piper Navajo Chieftan: three days per week service with 

nine insured passenger seats, the balance of the capacity reserved for mail and freight. We have 

included the expenses for the PA 31-350 as well as the Cessna 206 in Schedules A and B 

respectively. 

Revenue projections are based on numbers from 2010 and 2011. We expect similar traffic 

over the proposed subsidy period. Our cost data is based on our best estimate of costs over the 

next two years and historical costs adjusted for known or expected cost changes. 

The proposed service is from Fairbanks direct to Manley, from Manley direct to Minto, 

and then Minto to Fairbanks. 

Rates 

Order 2011-06-14 set new mail rates that we expect will be effective at the start of the 

proposed subsidy period, therefore we have used those rates to calculate projected mail revenue. 

1 

0''] 
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.. 

RTM $12.955 Manley· 

. RTM $16.161 Minto , . 

Terminal/Ton Enplaned $716.16 

Fairbanks-Manley 82 miles 

Fairbanks-Minto 50 miles 

Therefore the P-135 rate for Manley will be $0.90 per pound 

And the P-135 rate for Minto will be $.76 per pound 

Current passenger fares and cargo rates are used in these calculations. These 

reflect no change over the current subsidy period. 

Schedule 

The following schedule has been published 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 P A 

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 

Flight times for the Cessna 206 are based on historical data as follows. 

52 weeks x 3 flights per week x 1.9 hours per flight= 296.4 hours with a Cessna 206 

Projected Demand 

Passenger, cargo and mail traffic is based on an average of our 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 

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'· " 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 

based on 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 of the time. We have also included expense numbers for the use of a 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 A V offers for consideration by DOT and the villages service in a twin engine aircraft 

which will allow more uninterrupted. travel and delivery of goods. We are versatile enough to 

also allow for the variations in conditions experienced in Alaska. -

The total subsidy req~est assuming 100% utilization of PA 31-350 service is $1 ~2, 1 ~6.14 

over a two year period. If the service is provided 1 00% of the 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 over the 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 , · 

If you have any questions or require further clarification, please don't hesitate to contact us. 

~~' Matthew Atkinson 

Warbelow's Air Ventures, Inc. 

3758 University Avenue South 

Fairbanks, Alaska 99709 

adventure@northemalaska.com 

907-474-8600 

3 
Block Hours 

Aircraft Type: 

Schedule A 

Warbelow's Air Ventures, 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 

4 
Total Operating Cost 

Profit Element of TOC = 

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 Air Ventures, Inc. 

Essential Air Service To Be 

Provided At ~into & Manley, 

Al'aska 

296.4 3 trips/wk Annually 

Cessna 206 5 seats 

Routing: 

Fairbanks > Manley> Minto > 

Fairbanks 

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 

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 

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Total Operating Cost 

Profit Element of TOC 

= 

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 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' . 

$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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