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Before the United States Department of Transportation 1;/4J:JN - 3 p 2: 03

Washington, DC

June 2,2014

Essential Air Service at:

FORT DODGE, IOWA

MASON CITY, IOWA

under 49 U.S.C. 41731 et.seq.

Docket OST-2001-10682

Docket OST-2001-10684

This document contains Great Lakes Aviation, Ltd.'s response to Order Requesting

Proposals 2014-4-22.

Great Lakes Aviation, Ltd. is pleased to submit these proposals, whereby each

proposal is submitted on a stand alone basis, to provide essential air transportation.

at these points in Iowa.

The proposed service is being offered utilizing pressurized, twin-engine Beech 1900D aircraft

flown by two pilots. Service is being offered with local service marketed and priced utilizing the

Great Lakes (ZK) reservations system which includes customer ticket purchasing capability on

both the Great Lakes' web site and on numerous web booking engines. Additionally, Great

Lakes and D~lta Airlines have formed a partnership to enable the sale of Great Lakes'

passenger segments on the Delta website as well as, providing the passenger with through

check-in and seamless baggage transfers. Effective February 6, 2014, Great Lakes travel

segments purchased on Delta's website are eligible to receive 500 Delta Sky Miles.

New FAA pilot qualification rules have created an industry-wide pilot shortage which has had

an acute impact on Great Lakes. These new rules mandated that first officers obtain an Airline

Transport Pilot certification ("ATP") prior to being qualified to perform crewmember duties in

scheduled airline passenger service under FAR Part 121 regulatory requirements. A key factor

to enable a pilot to receive an ATP certificate is the accumulation of 1,500 flight hours.

On March 18th of this year, Great Lakes received from the FAA new operations specifications

allowing us to hire pilots under it's FAR Part 121 Certificate utilizing FAR Part 135 regulatory

hiring requirements. This allows our new hire pilots to operate the Beech 1900D aircraft in a

nine seat configuration and enable Great Lakes to restore pilot staffing levels while maintaining

FAR Part 1'21hiring, training and maintenance standards.
Great Lakes' "base case" proposals assume that we will be limited to nine available seats for

our Beechcraft 1900 aircraft. As an alternative, we have provided proposals that lower subsidy

requirements assuming that the aircraft can be returned to a 19 seat configuration. We are

also proposing three round trip service options for Mason City in both a nine seat and 19 seat

configurations.

It is Great Lakes' belief that regulatory relief for small community air service must be granted in

the near future. Excessive subsidy requirements will force communities to loose EAS service

eligibility as available seats are being dramatically reduced due to arbitrary limitations on

aircraft seating configurations. Great Lakes' stands ready to participate in creative solutions to

assist small communities in their efforts to remain in the National Air Transportation System.

Questions and comments may be referred to:

Michael O. Matthews

Chief Financial Officer

Great Lakes Aviation, Ltd.

1022 Airport Parkway

Cheyenne, VVY 82001

(307) 432-7000

Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Fort Dodge, Iowa to Minneapolis/St. Paul ( MSP )

Three Round Trips - B1900

(at 98 percent completion)

9 Seats Available per departure

Departures:

Block Hours:

Revenue Passenger Miles:

Available Seat Miles:

1,840

2,224

1,183,000

2,798,640

Operating Revenues:

Passenger: FOD-MSP 7,000 psgrs at $95.98 $671,860

Other: (at 0.62% of passenger revenue) $4,166

Total Operating Revenues: $676,026

Operating Expenses:

Direct: Aircraft and Hull Insurance

Fuel and Oil

Flying Operations

Maintenance

$365,710

$960,127

$438,662

$711,245

Total Direct Expenses:

Total Indirect Expenses:

Total Operating Expenses:

Operating Loss

Profit Element (5.0% of Total Operating Expenses)

Annual Compensation Requirement:

This Proposal is submitted with no upline scheduling restrctions.

$2,475,744

$930,527

$3,406,271

($2,730,245)

$170,314

$2,900,559
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Mason City, Iowa to Minneapolis/St. Paul ( MSP )

Four Round Trips - B1900

(at 98 percent completion)

9 Seats Available per departure

Departures:

Block Hours:

Revenue Passenger Miles:

Available Seat Miles:

2,454

1,840

1,200,000

2,650,320

Operating Revenues:

Passenger: MCW-MSP 10,000 psgrs at $90.17 $901,700

Other: (at 0.62% of passenger revenue) $5,591

Total Operating Revenues: $907,291

Operating Expenses:

Direct: Aircraft and Hull Insurance

Fuel and Oil

Flying Operations

Maintenance

$365,710

$1,053,229

$362,922

$754,022

Total Direct Expenses:

Total Indirect Expenses:

Total Operating Expenses:

Operating Loss

Profit Element (5.0% of Total Operating Expenses)

Annual Compensation Requirement:

This Proposal is submitted with no upline scheduling restrctions

$2,535,883

$1,172,967

$3,708,850

($2,801,559)

$185,443

$2,987,002
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Fort Dodge, Iowa to Minneapolis/St. Paul ( MSP )

Three Round Trips - B1900

(at 98 percent completion)

19 Seat 'Plus'

Departures:

Block Hours:

Revenue Passenger Miles:

Available Seat Miles:

1,840

2,224

2,704,000

5,908,240

Operating Revenues:

Passenger: FOD-MSP 16,000 psgrs at $89.94 $1,439,040

Other: (at 0.62% of passenger revenue) . $8,922

Total Operating Revenues: $1,447,962

Operating Expenses:

Direct: Aircraft and Hull Insurance

Fuel and Oil

Flying Operations

Maintenance

$365,710

$960,127

$438,662

$711,245

Total Direct Expenses:

Total Indirec! Expenses:

Total Operating Expenses:

Operating Loss

Profit Element (5.0% olTotal Operating Expenses)

Annual Compensation Requirement:

This Proposal is submitted with no upline scheduling restrctions.

$2,475,744

$1,091,856

$3,567,600

($2,119,638)

$178,380

$2,298,018
Great Lakes Aviation, Ltd~

Annual Compensation Requirements for Essential Air Service at

Mason City, Iowa to Minneapolis/St. Paul ( MSP )

Four Round Trips - B1900

(at 98 percent completion)

19 Seat 'Plus'

Departures:

Block Hours:

Revenue Passenger Miles:

Available Seat Miles:

2,454

1,840

2,400,000

5,595,120

Operating Revenues:

Passenger: MCW-MSP 20,000 psgrs at $79.72 $1,594,400

Other: (at 0.62% of passenger revenue) $9,885

Total Operating Revenues: $1,604,285

Operating Expenses:

Direct: Aircraft and Hull Insurance

Fuel and Oil

Flying Operations

Maintenance

$365,710

$1,053,229

$362,922

$754,022

Total Direct Expenses:

Total Indirect Expenses:

Total Operating Expenses:

Operating Loss

Profit Element (5.0% of Total Operating Expenses)

Annual Compensation Requirement:

This Proposal is submitted with no upline scheduling restrctions

$2,535,883

$1,349,471

$3,885,354

($2,281,069)

$194,268

$2,475,336
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Mason City, Iowa to Minneapolis/St. Paul ( MSP )

Three Round Trips - B1900

(at 98 percent completion)

9 Seats Available per departure

Departures:

Block Hours:

Revenue Passenger Miles:

Available Seat Miles:

1,840

1,380

840,000

1,987,200

Operating Revenues:

Passenger: MCW-MSP 7,000 psgrs at $91.97 $643,790

Other: (at 0.62% of passenger revenue) $3,991

Total Operating Revenues: $647,781

Operating Expenses:

Direct: Aircraft and Hull Insurance

Fuel and Oil

Flying Operations

Maintenance

$365,710

$794,661

$272,191

$565,427

Total Direct Expenses:

Total Indirect Expenses:

Total Operating Expenses:

Operating Loss

Profit Element (5.0% of Total Operating Expenses)

Annual Compensation Requirement:

This Proposal is submitted with no upline scheduling restrctions

$1,997,989

$933,188

$2,931,177

($2,283,396)

$146,559

$2,429,954
Great lakes Aviation, ltd.

Annual Compensation Requirements for Essential Air Service at

Mason City, Iowa to Minneapolis/St. Paul ( MSP )

Three Round Trips - B1900

(at 98 percent completion)

19 Seat 'Plus'

Departures:

Block Hours:

Revenue Passenger Miles:

Available Seat Miles:

1,840

1,380

1,740,000

4,195,200

Operating Revenues:

Passenger: MCW-MSP 14,500 psgrs at $88.92 $1,289,340

Other: (at 0.62% of passenger revenue) $7,994

Total Operating Revenues: $1,297,334

Operating Expenses:

Direct: Aircraft and Hull Insurance

Fuel and Oil

Flying Operations

Maintenance

$365,710

$794,661

$272,191

$565,427

Total Direct Expenses:

Total Indirect Expenses:

Total Operating Expenses:

Operating Loss

Profit Element (5.0% of Total Operating Expenses)

Annual Compensation Requirement:

This Proposal is submitted with no upline scheduling restrctions

$1,997,989

$1,097,069

$3,095,058

($1,797,724)

$154,753

$1,962,477
*** [FOD] FORT DODGE, IA ***

Sample Schedule

---------.---------- 0 EPA R T U RES -------------------- -------------------- A R R I V A L S --------------------

FLT OPT ARR TO EQP FREQ FLT EQP FREQ FROM OPT ARR

2972 615 730 MSP BE1 123456

2973 BE1 12345 MSP 930 1040

2973 1050 1205 MSP BE1 123457

2977 1300 1415 MSP BE1 123457

2977 BE1 Daily MSP 1130 1240

2978 BE1 123457 MSP 1840 1950