BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

January 14, 2015 

Proposal of Gem Air, LLC to provide Essential Air Service at 

CHADRON, NEBRASKA

ALLIANCE, NEBRASKA

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

DOCKET 

DOT-OST-2000-8322

Proposal of Gem Air, LLC to Provide Essential Air Service 

to the Communities of Alliance, Nebraska and Chadron, Nebraska 

In response to Department of Transportation Order 2014-11-10, requesting proposals from carriers 

interested in providing Essential Air Service (EAS) at Alliance and/or Chadron, Nebraska, Gem Air, 

LLC is pleased to present an air service proposal for both communities. 

In the following proposal Gem Air offers to provide both communities with 12 non-stop, weekly, 

round trip flights to Denver International Airport. The total annual subsidy under this offer 

would be $3,177,640 and the proposal for each community is submitted on an inseparable basis. 

Gem Air requests a 2 year contract with a service start date of September 14, 2015. 

Within 48 hours of this proposal being submitted, Gem Air will contact the Airport Manager of 

both communities to answer questions and/or schedule public meetings. Please contact David 

Schroeder, Gem Air Director of Business Development with any questions. 

Sincerely,

David Schroeder

Director of Airline Development

Gem Air, LLC

31 Hamner Drive 

Salmon, ID 83467 

(208) 756-7382 

david.schroeder@gemairfights.com

,

 David Schroeder
GEM AIR: A LONG HISTORY OF “FLYING YOUR WAY”

Since 1982, Gem Air, LLC, has been providing clean, safe, and reliable air service. Based in 

the mountainous rural Idaho town of Salmon (population 3,200), Gem Air (formerly dba 

Salmon Air) has constantly worked to accommodate the needs of its customers. From 

providing special, friendly, community charter flights to/from collegiate and high school 

sporting events to servicing EAS routes to/from Salt Lake International Airport, Gem Air’s 

goal has always been quality, customer oriented service. 

While building a self-sustaining, un-subsidized, commuter route between Salmon, ID and 

Boise, the Idaho State Capital, Gem Air flew freight for the community’s UPS shipments as 

well. As a result of working closely with the Salmon community, Gem Air understands the

importance of the vital link that quality air service provides, and strives to build enduring 

relationships with the communities it serves.

Through the service proposed herein, Gem Air wishes to work closely with each 

community and its leaders. The goal is to establish an air service that maximizes economic 

and social opportunities with an emphasis on utilizing local workers and businesses in its 

operations. 

SERVICE PROPOSAL

Frequency/Destination

Gem Air proposes offering 12 weekly, non-stop, round-trip, flights for each community to 

Denver International Airport. For Monday through Friday in each community Gem Air

suggests one morning round trip flight and one evening round trip flight, which means 

two round trip flights to each community each weekday. For Saturday and Sunday, we 

suggest 1 round trip flight for each community each day. Arrival and departure times will 

be planned with each community’s needs in mind and designed to offer the best timing for 

flight connections at DEN. 

Ticketing/Pricing

Gem Air is committed to working toward providing interline ticketing and checked 

luggage transfer with the major airlines at DEN. In addition, Gem Air plans to market its 

inventory online through popular travel booking sites like Expedia, Orbitz, and Travelocity 

and through gemairflights.com. Flight reservations will also be available by contacting our 

reservation center by phone.

To maximize value, community utilization, and increase enplanements, Gem Air will offer 

all tickets on every flight for $49. With increased ridership, the per-passenger subsidy rate 

will remain low.

Docket DOT-OST-2000-8322 Page | 1 

January 14, 2015
Aircraft/Crew

Gem Air’s proposal includes utilization of the comfortable 9-passenger, twin-engine, Piper 

Navajo Chieftain. A total of three aircraft will be dedicated to serving Alliance and 

Chadron. To maintain the highest levels of reliability, one Chieftain will be based in 

Alliance, a second in Chadron, and a third, as backup, will be based in either Alliance or 

Chadron. 

The Chieftain is a fast (over 

200 MPH cruising speed) welldesigned commuter aircraft 

and offers excessive leg room 

and large passenger windows. 

Seating is top-notch as every 

seat is an aisle seat and a 

window seat. The Chieftain 

has ample external baggage 

space with two wing lockers 

and a nose baggage 

compartment. The ability to 

separate passengers from 

Docket DOT-OST-2000-8322 Page | 2 

January 14, 2015
their baggage is a requirement for TSA and interline agreements which include

transferring of checked baggage.

The redundancy of the Chieftain’s two engines, which provides safety and peace-of-mind, 

will be duplicated in the cockpit. Although not required by Federal Aviation Regulations, 

Gem Air flights will operate with a crew of 2, including a First Officer and an ATP-rated 

Captain. Extra flight crews will also be standing by, ensuring a reliable schedule.

Local Employment

Gem Air will base flight crews and key managers locally, including base managers; and 

regional directors of operation and maintenance. To the extent that local resources are 

available, Gem Air will utilize the existing workforce, as well as maintenance and flight 

service facilities, including aircraft hangaring and refueling.

Gem Air Proposal 

Reliable Backup aircraft and crew stationed 

locally

Affordable $49 tickets for every seat on every 

flight

Convenient

Non-stop flights, on-line ticketing, 

interlining, checked baggage 

transferring

Community Partnership Utilization of local workforce and 

facilities

Responsive Community based 

Airline

The needs of the community are the 

priority, and Gem Air will always 

work to accommodate them

Gem Air submits this proposal with the first-hand knowledge that quality, safe, reliable air 

service can profoundly improve a community’s social and economic opportunities, 

affecting even those that do not fly. It would be Gem Air’s privilege to commit to serving 

Chadron and Alliance. We hope Gem Air can become a positive and lasting influence in 

these communities, and we thank you for your consideration.

Sincerely,

David Schroeder

Director of Airline Development

Gem Air, LLC

Docket DOT-OST-2000-8322 Page | 3 

January 14, 2015

 David Schroeder
Chadron Alliance

Average Block Length (nm) 200 170

Scheduled Departures 1,248 1,248

Scheduled Block Hours 1,513 1,286

Projected Completion Factor 99% 99%

Projected Completed Departures 1,236 1,236

Projected Completed Block Hours 1,498 1,273

Projected Completed Block Miles 247,104 210,038

Projected Passengers 4,353 2,975

Passengers Per Departure 3.5 2.4

Revenue per Passenger (net) $42 $42

Revenue Passenger Miles 870,600 505,750

Available Seat Miles 1,976,832 1,680,307

Projected Load Factor 44% 30%

Revenue $ 182,826 $ 124,950

EXPENSES

Flight Operations 272,048 231,241

Aircraft Ownership 90,000 90,000

General and Admin/Other 200,987 170,839

Fuel & Oil 408,436 347,171

Marketing 55,000 55,000

Stations 413,514 351,486

Insurance 30,000 30,000

Maintenance 287,418 244,305

Landing Fees 20,999 20,999

Total Expenses $ 1,778,402 $ 1,541,042

Return of 5% $ 88,920 $ 77,052

Profit $ (1,684,496) $ (1,493,144)

Annual Subsidy Required $ 1,684,496 $ 1,493,144

Total Annual Subsidy Required

Subsidy per passenger $ 387 $ 502

Subsidy per departure $ 1,363 $ 1,209

Avg. Daily enplanements 14.1 9.6

Gem Air, LLC

12 Weekly, Non-Stop, Round Trips to DEN Pro Forma Data

$ 3,177,640

Pro Forma Data

Docket DOT-OST-2000-8322 Page | 4 

January 14, 2015