Essential Air Service at 

BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

r",,'.' ..... :t 1" 

." ,,'1..-' 

IRONWOOD, MICHIGAN/ASHLAND, WISCONSIN 

MANISTEE/LUDINGTON, MICHIGAN 

Docket DOT-OST-1996-1266 

Docket DOT-OST-1996-1711 

Under 49 U.S.c. 41731 et seq. 

PROPOSAL IN RESPONSE TO ORDER 2010-9-26 

Pursuant to Order 2010-9-26, Charter Air Transport, Inc. (CAT) and Public Charters, Inc. 

(PC) hereby submit their joint proposal to provide essential air transportation service at 

Ironwood, Michigan! Ashland, Wisconsin ("Ironwood") and Manistee/Ludington, Michigan 

("Manistee"), hereinafter jointly referred to as the "EAS communities." 

About the Offerors 

CAT is a U. S. Direct Air Carrier (certificate number GNOA005I) authorized by the FAA 

to operate under 14 CFR Part 135. CAT is also authorized by the USDOT to operate as a 

Commuter Air Carrier under 14 CFR Part 298 (see Order 2010-3-29). CAT presently operates 

five (5) Embraer EMB-120 "Brasilia" 30-passenger regional airliners in addition to other 

turbine-powered aircraft. 

PC is a U.S. Charter Operator authorized pursuant to 14 Part 380 to organize and sell 

Public Charters as an Indirect Air Carrier. PC is authorized by lATA to use the two-letter code 

"PI" and has distribution rights on certain GDS platforms, through certain online travel agencies, 

and has an agreement to settle ticket sales through ARC. It owns proprietary web-based software 

products that together address all aspects of ticket sales, distribution, e-ticketing, baggage 

tracking, and interline communications. PC is TSA Secure Flight compliant, providing both 
2 

domestic and intemational TSA clearances. PC also has direct experience in all aspects of air 

carrier station operations and management. 

With the full support of the EAS communities, CAT and PC jointly make this proposal to 

provide Essential Air Service to Ironwood and Manistee, Michigan as public charters under 14 

CFR Part 380. As set forth in our Petition for Reconsideration of the DOT's finding in Order 

2010-9-26, filed on October 20,2010 and hereby incorporated by reference, DOT may provide 

EAS subsidy to support this proposed service. Each of the EAS communities filed documents 

with the DOT supporting our Petition of Reconsideration. 

Proposed Schedule 

CAT/PC proposes service for both EAS communities to General Mitchell Intemational 

Airport in Milwaukee, Wisconsin (MKE). Flights between Manistee, Michigan (MBL) and 

MKE will be non-stop. Flights between Ironwood, Michigan (IWD) and MKE will have one 

stop (at MBL). We have held extensive discussions with the EAS communities to determine a 

timetable and routing that would be the most useful for their citizens and visitors, given the 

current arrivals and departures of connecting carriers at MKE. The initial schedule to which we 

have all agreed is summarized in the table below. Our agreed schedule calls for two round trips 

between the EAS communities and MKE on each weekday, with one round trip on Saturday and 

one round trip on Sunday. CAT/PC will continually monitor changes in the schedules of the 

connecting air carriers and other dynamics at MKE and together with the EAS communities will 

make refinements to the schedule that best meet the public interest. 

Schedule: 2x Daily with lx on day 6 and day 7 (Sat and Sun) 

Depart Arrive Stops Time 

rWb 5:00AM MBL i' >, 7:10AM " .. ,. I> 1.00 " 

>"'L~ . 7:~OAM >. Ml<~,i. ii:;,1~20A!'v1' 0 . " 

,', ,.0,'0".··.· 

·K1RE.· 10:35 AM ,MIt;. 12:25 PM ., " ,I,I.';Q ,,', :', 

," 

I.~:. 0.60 

I\1~L . 12:45 PM IWI? .,Y', 12:55 PM 1 >;J;10 

·t\Yt> 2:50PM AVtSL 5:00~ > .1- .:' >. .1.00 

M8l. 5:25PM M~g .. y S:l~>PI\( 0 , 

""0.70," 

M~e 8:00PM M$l '9':50 PM Q . ··:'O.fi6 

MBL 10:10 PM tWO iO:20PM 1 1,ltl 
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Annual Compensation 

We have detennined the annual compensation requirement for our proposed service to be 

$3,584,328.65. A summary of our projected revenues and expenses appears in Exhibit A hereto. 

Aircraft and Operations 

CAT/PC proposes operations using CAT's EMB-120 "Brasilia" aircraft. The EMB-120 

is a pressurized twin-engine turboprop airliner built and regulated to 14 CFR Part 25 standards. 

Its crew compliment includes a Captain, First Officer, and Flight Attendant. The EMB-120 has a 

readily-accessible main cabin that seats 30 passengers and has the features that the public expects 

of an airline operation, including overhead luggage bins, a galley capable of dispensing hot and 

cold drinks, and a full-size private lavatory. The EMB-120 also features a flight deck that is 

physically separated from the main passenger cabin and a pressurized cargo hold with 1,200 

pounds of capacity. 

As noted above, CAT presently has five (5) EMB-120 aircraft in its fleet, providing 

ample reserve capacity to address planned and unplanned aircraft maintenance requirements. 

We have negotiated initial fuel pricing at each of the airports on the proposed route. We 

are satisfied that in the nonnal course of operations, all fuel related requirements will be met in a 

commercially reasonable manner. 

All operations will be conducted to and from the main tenninals at each airport on the 

route. All passengers and the aircraft will undergo full TSA screening in the main tenninal at 

their trip's point of origin. 
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Connecting at MKE 

We have been in discussions for several months with Frontier Airlines, one of the lowcost carriers serving MKE. Frontier Airlines has given us a verbal indication that they would 

enter into negotiations with us to establish an interline agreement for connecting service at MKE 

upon notification of an award of the Ironwood and Manistee, Michigan EAS routes. Upon such 

award, we will move forward with all possible speed to negotiate the agreement with Frontier 

Airlines, conduct system testing, and commence interline operations. The successful 

implementation of the Frontier Airlines interline will become our model for establishing similar 

arrangements with the other carriers serving MKE. 

Certain airlines serving at MKE do not make interline arrangements with other carriers. 

These are low-cost carriers whose fares and fees may be very attractive to the EAS communities. 

We will use innovative approaches such as combining internet boarding pass printing technology 

with color coded baggage identification tags to facilitate the transfer of passengers and baggage 

to and from such low-cost carriers through sterile terminal operations. Our MKE station 

personnel will work one-on-one with the station personnel of the low-cost carriers using these 

and other creative methods to provide seamless boarding and baggage handling for our 

connecting passengers. 

Sales will be conducted by using PC's "P 1" lATA code through its proprietary 

computerized reservation system (CRS). PC's CRS has "Type A" connectivity and has been 

certified for E-Ticketing on both the Sabre and Amadeus Global Distribution Systems (GDS). 

One of the features that GDS participation provides is access to information about all available 

connections at the EAS hub airport. GDS participation also makes fares available world-wide, 

maximizing exposure for the EAS Communities. 
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In addition to GDS distribution, our flights will be available for purchase through a 

number of internet travel agents, including but not limited to Travelocity and Expedia, as well as 

through our own web site. 

Through GDS and internet distribution, we enable passengers or their travel agents to 

construct itineraries using multiple carriers by purchasing tickets on each carrier separately. 

Travel agents can use a special "segment select" function that enables then to build each segment 

of flight with different carriers on the same itinerary regardless if there is an existing interline 

agreement. We receive complete electronic information on all of our bookings, including 

multiple carrier itineraries. Our system is designed to identify such bookings and to provide the 

pertinent data to our upline and downline station personnel. Our local station personnel will 

work closely with the connecting carriers to ensure the most expeditious transfers of both 

passengers and baggage to the final destination points. 

We will fully comply with the 14 C.F.R. Part 380 provisions governing tour operatorparticipant contracts. Screen displays will disclose the information required by Part 380 and 

DOT guidance on advertising and internet sales. Also, as part of the purchase process, 

passengers or their travel agents will receive electronic copies of the Operator Participant 

Contract and the CAT Contract of Carriage. 

Funds from all GDS and online sales will be cleared through the Airline Reporting 

Corporation and remitted directly into the depository escrow account required by Part 380 .. In 

addition, passengers will protected by Part 380 bonding and escrow requirements applicable to 

both CAT and Pc. 

CAT's Contract of Carriage for EAS flights will incorporate all DOT regulations providing 

consumer protection that are applicable to commuter air carriers, meeting consumer expectations 

for scheduled service operations with aircraft having fewer than 60 passenger seats. 
C4T/PC has t:vatuated the 1\\'1) and :'I.-1BL markets and detennined that there is room fvr growth 

in their i:llplum::!Ilcms, In order to rebmld these markets. we will devote considerable resources 

10 (lUnH.:ling new pU:-l:;engerfl. Om marketi11g plan mc.ludcs, but is not limited to: 

An agg.n~ssiv~ pricing :-;trudurc (we c'>timate an nvemge one wny tru-e of$7(f.OO) 

Use of mcdi<t, iflduding 10l;alldevi~jol1 a.nd radio. to promote the airp<lrts a.nd b\S 

Direct selling to blJ~in~ssc,~ wiLhiTl H om:-hnur dltve oreach EAS airpolt 

" pmumm prm,iriing selection~ ofunsuhsidized flights from each community to destinations 

of interest to promote awareness ofthc loc(ll airporl and the EAS pmgrarn 

In all of our marketing and sales dforis. C' A TiPe ",·ill take all 'IICp~ ncccs'Iliry til comply with 

DOT's consumer protection r,~glll!ttinn~ ami I" ~n1\lITt: that (lIJr trade practices are fair. 

Community Endorscmcnt~ 

The CAT!PC' pmpnsal is strongly supp0l1ed by the EAS communities. Hoth Ironwood and 

\1,mislcc hay!': i.s,.,ued \ .. ,.ritten communications to the OUT in support of CATlPC's initial scn'icc 

pmposal and our Petition tor Reconsideration. I'hese documents were filed with tbe DOT 

r.::ontcmpmaneoUl.ly ,,,,"ith the tiling of our Petition tor I{cconsideration and are incorporated 

herein hy reference. 

CHARTER AIR 

David A. Luca.... Vice PresldentlCFU 

2301 North Marginal Road 

Cleveland, Ohio 44114 

216-348-141 S, x210 (voice) 

216-348-1432 (ta:~) 

ctlucas(t/shartersinranspon .com ( e-mail ) 

Jim Gallllgher. President/CEO 

2(11 lIangar Koad 

Avoca. I'''' 18702 

570.457.1950 (voice) 

570-457-4111 (fax) 

J(n2}@.l!!lJ...(;pm (e-mail) 
Exhibit A 

CAT/PC Annual Compensation Requirements 

for 

Essential Air Serivce at Ironwood and Manistee, Michigan 

10/25/2010 

Departures 

Hours 

Revenue Passenger Miles 

Available Seat Miles 

Projected Operating Revenue: 

IWD 

MBL 

Projected Operating Expenses: 

Total Passengers Average Fare 

4,992 $ 79.00 $ 

12,312 $ 79.00 $ 

Total Projected Operating Revenue 

Revenue 

394,368 

972,648 

Aircraft, Insurance, Crew $ 1,369,863.09 

Maintenance $ 993,986.91 

Fuel $ 970,754.40 

.2e=r.2!i~~ __________ ! .2.:~21'~2.0_ 

Total Projected Direct Expenses 

Total Projected Indirect Expenses 

Total Projected Operating Expenses 

Projected Net Gain (Loss) From Operations: 

Annual Compensation Requirement 

$ 

$ 

$ 

$ 

$ 

2,496 

2,122 

3,348,170 

13,744,224 

1,367,016.00 

4,587,212.40 

364,132.25 

4,951,344.65 

(3,584,328.65) 

$ 3,584,328.65 
CERTIFICATE OF SERVICE 

I hereby certify that I have this date served a copy of the foregoing motion on the following 

person by electronic mail: Mr. Dennis DeVany, Division Chief, USDOT EAS Program. 

25 October 2010 

David A. Lucas, VP/CFO 

Charter Air Transport, Inc.