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# o ?FR-RTMENTO F '.\;'^SPORWIO N us . Departmen t o f :'; : V OPpnAfiDKi ^ '20 0 Ne w jerse yAvenue , S E Transportatio n • ' - ^ -'' ' ^ ' '^'-> ^

Washington , D C 2059 0 Offic e O f th e Secretar y, . , , r - r- > i r ^ o f Transportatio n i ' • • ' " o <:- ' l - D M
Mr
. Mar c Luike n Novembe r 5 , 201 0 Deputy Commissione r

o f Aviatio n Statewid e Aviatio n Departmen t

o f Transportatio n an dPubli c Facilitie s 411 1 Aviatio n Avenu e P.O
. Bo x 19690 0 Anchorage , A K

99519-690 0 Dea r Commissione r

Luiken : A s yo u know , Alask aSeaplan e Service , LLC , provide s subsidize dai r servic e unde r

th e essentia l ai r servic e (EAS ) progra ma t Angoo n an dTenakee
. Ou r curren t contrac t wit h th e carrier
. Orde r 2008-12-27 , call s for

acombine dannua l subsid y o f $163,107 , for

servic e t o Junea u with DeHavillan dBeave r

aircraft , with th e rate s se t t o expir e Januar y 31 , 2011
. A t Angoon , th e contrac t call s for te n nonsto p roun dtrip s pe r wee k i n th e 18-week

peak an dfiv e nonsto p roun d trip s pe r wee k i n th e 34-wee k

off-pea k fo r $101,35 9 annually
. A t

Tenakee , th e contrac t

call s for seve n nonsto p roun dtrip s pe r wee k i n th e peak

an dthre e nonsto p roun dtrip s pe r wee k i n th e off

peak for $63,74 8 annually
. In anticipatio n o f

th e en do f

that contract , b y Orde r

2010-9-1 6 th e Departmen t requeste d"bes t an dfinal " proposal s t o serv e Angoo n an dTenakee
. W e receive datimely-file dproposa l from onl y on e carrier , Alask aSeaplane , an di t initiall y requeste da

n average o f

$333,48 5 per

yea r for th e sam e leve l o f

servic e it currentl y provide s an da s describe dabove
. Th e carrie r als o requeste d afour-yea r contract , i.e. , rate s woul dexten dfro mFebruary 1 , 2011 , t o Januar y 31 , 2015
. W e reviewe dth e carrier' s proposal , and , after discussion s wit

h th e carrier , i

t agree dt o reduc e it s subsid y reques t

t o $281,31 0 pe r

year . M y purpos e i n writin g i s t o infor myo u o f th e result s o f

th e carrier' s servic e an dsubsid y proposa l before w e submi t

arecommendatio n o n th e carrier-selectio n issu e t o th e Assistan t Secretary for Aviatio n an dInternationa l Affair s for decision
. Sinc e ther e ar e n o othe r option s before th e Departmen t

a t thi s time , yo u nee dno t

respon dt o thi s letter
. However , w e wante dt o giv e yo u th e opportunit y t o submi t

any comment s if

yo u wish
. Copie s o f

th e carrier' s ful l proposa l ma y b e accesse donlin e throug h th e Department' s Docket s Managemen t Syste ma

t hltp://www.regulations.gov / b y enterin g "DOT-OS T 1997-3134 " i n th e "ente r Keywor do r

ID " field , s o w e wil l onl y summariz e it here
. Propose dService : Alask aSeaplane' s agreemen t i s attache da s Appendi x A
. At Angoon , th e carrie r

ha s agree dt o an annua l subsid y o f

$145,73 4 t o provid e te n nonsto p roun dtrip s pe r wee k in th e 18-week

peak- 2 -

an dfiv e nonsto p roun dtrip s pe r wee k i n th e 34-wee k

off-peak
. A t

Tenakee , th e carrie r

ha s agree dt o an annua l subsid y o f $135,57 6 t o provid e seve n nonsto p roun dtrip s pe r wee k i n th e 18-week peak an dthre e nonsto p roun dtrip s pe r wee k i n th e 34-wee k

off-peak
. Th e agreemen t expire s Januar y 31 , 2015 , an dal l o f th e servic e i s t o Junea u with single-engin e DeHavillan d Beave r aircraft
. O f

course , th e onl y differenc e betwee n th e soon-to-expir e contract , th e carrier' s initia l proposal , an dwhat it ultimatel y agree dt o i s th e leve l o f subsidy : th e curren t

contrac t i s for $163 , 107 pe r

year , th e carrie r

initiall y propose dan annua l subsid y o f $333,485 , an dit

ha s agree dt o arat e o f

$281,31 0 pe r

year . Pleas e not e tha t

th e averag e passenge r

fare s show n i n Appendi x A d o not necessaril y reflec t

th e average loca l fare passenger s woul dpay , but , rathe r th e prorate dportio n o f

th e tota l ticke t

price , e.g. , th e Tenake e - Junea u portio n o f aTenake e - Junea u - Anchorag e ticke t that th e carrie r woul drealize
. Also , th e passenge r far e o f $106.2 5 fo r

eac h communit y i n it s proposa l an di n Appendi x A i s ne t

o f certai n charge s suc h a s federa l transportatio n security fees , excis e o r ticke t taxes , an dpassenge r

facility charges
. O f

course , carrier s hav e th e discretio n t o charg e fare s the y dee mappropriate , an dth e passenge r fare s presente dhav e bee n develope dfor subsid y rat e computatio n purpose s only
. Base do n th e cos t element s incorporate di n th e carrier' s computatio n summaries , acarrie r woul dhav e t o realiz e passenge r fare s comparabl e t o th e averag e show n i n it s proposa l i n orde r t o achiev e break-eve n o r profitabl e operation s eve n with subsidy
. Alask aSeaplane' s schedul e woul dcontinu e a s befor e i n term s o f frequenc y an drouting , an dth e carrie r ma y mak e schedul e change s t o reflec t changin g conditions , e.g. , t o bette r mee t shiftin g connectin g ban k

time s a t th e hub
. Th e Departmen t expect s subsidize dai r

carrier s t o maintai n well-time dan dwell-space dflight s i n orde r t o ensur e full compensation
. W e kno w thi s matte r

i s importan t

t o yo u an dw e wil l ac t

a s quickl y a s possibl e upo n receip t o f you r letter
. In orde r

t o expedit e th e case , pleas e submi t you r comment s b y emai l t o EAS@dot.go v an d Kevin.Adams@dot.go v b y Novembe r 19
. I f yo u hav e an y question s o r d o no t wis h t o submi t

forma l comments , pleas e contac t Kevi n Adam s a

t (202 ) 366-1047
. Sincerely ,

-^^~ ^ Denni s J
. DeVan y Chief , Essentia l Ai r

Servic e Divisio n Offic e o f Aviatio n Analysi s

cc : Alask aSeaplan eAppendi xA

Annua l Subsid yNee d a t Angoo n an d Tenakee , Alask a

Docke t 2006-2554 2

Aircraf t Typ e Bloc k Hour s 1 / Departure s 1 / Passenge r2 / Freigh t Mai l Tota l Revenu e
Cos t @ $785.15/hr

. Annua l Subsid y Angoo n DHC- 2 51 3 70 0 $178,08 3 $27,74 3 $51,22 2 $257,04 8 $402,78 2 $145,73 4 Tenake e

DHC- 2 30 4 45 6 $60,63 4 $15,13 6 $27,34 0 $103,11 0 $238,68 6 $135,57 6 Tota l DHC- 2 81 7 1,15 6 $238,71 7 $42,87 9 $78,56 2 $360,15 8 $641,46 8 $281,31 0

1 / Pea k 1 8 week

s x2 0 flight s i n eac h directio n x44 min/6 0 : Off-Pea k 3 4 week s x1 0 flight s i n each directio n x44 min/6 0 •
Pea k 1 8 week

s x1 4 flight s i n eac h directio n x4 0 min/6 0 = Off-Pea k 3 4 week s x6 flight s i n each directio n x4 0 min/6 0 = BIk
. Hrs
. 264 24 9 51 3 16 8 136 30 4 Flights

36 0 34 0 70 0 252 204 45 5 2 / Base d o n $106.2 5 averag e passenge rfare
.