KALININ AVIATION, LLC

d/b/a

ALASKA SEAPLANES

ESSENTIAL AIR SERVICE BID

JUNEAU-KAKE

JUNEAU-EXCURSION INLET

DOCKET 0ST-2008-0217

April 28, 2014

Pursuant to the Department’s call for bids for Essential Air Service at Kake and Excursion Inlet, 

Kalinin Aviation LLC dba “Alaska Seaplanes” submits the following bid. 

Kake Summary:

Alaska Seaplanes proposes a four-year program for Kake with the following components:

 Cessna “Supervan” Caravan and Piper Navajo Chieftain platforms, complete with full deice equipment for safer long-distance flying

 Instrument Flight Rules (IFR) operating authority

 2 direct roundtrips, 1 one-stop (thru Sitka) roundtrip per day in summer

 1 direct roundtrip, 1 one-stop (thru Sitka) roundtrip per day in winter

Excursion Inlet Summary:

Alaska Seaplanes proposes a four-year program with the same service pattern as is currently 

operated on Cessna 206/207 and Piper Cherokee platforms.
Details of Kake proposal

Service to Kake has been operated using aircraft owned by Air Excursions (PA-32 Navajo 

Chieftain) and also by Alaska Seaplanes (Cessna Caravan) under contract. This bid allows for 

consolidation of services under Alaska Seaplanes.

Over the last four years Air Excursions, and then Alaska Seaplanes, made substantial 

improvements in the provision of Essential Air Service at Kake. 

When the owners of Alaska Seaplanes acquired Air Excursions in May of 2012, they made four 

commitments to the people of Kake: 

1. Lower fare availability through online booking

2. More frequent use of larger aircraft on the Kake route

3. The acquisition of a de-ice booted Cessna 208B Caravan with greater hauling capability

4. Instrument Flight Rules (IFR) operating authority. 

Alaska Seaplanes has fulfilled all of those commitments.

Alaska Seaplanes increased the frequency of larger-sized aircraft by first operating their Piper 

Navajo Chieftain on more flights. Then, in the Spring of 2013, they introduced their Cessna 

208B “Supervan” Caravan, with full de-ice capability and a larger 900h.p. engine which 

increases the aircraft’s operating payload. Both aircraft are certified for instrument (IFR) 

operations. At the same time, Alaska Seaplanes developed a new online reservation and 

ticketing program with lower fares, and did all of this with reduced subsidy need.

Alaska Seaplanes has seen Kake traffic grow steadily. Passenger traffic is now reaching levels 

not seen since 2008 when L.A.B. Flying ceased operations to Kake. 

Alaska Seaplanes has also partnered with the Cities of Kake, Angoon, Tenakee Springs, Pelican 

and Elfin Cove and in 2013 helped them secure a Small Community Air Service Development 

(SCASD) grant to improve the marketing of air service to the five communities. Work on the 

marketing program is just getting underway, with a new branded website being developed for 

use as a booking portal for flights, lodging and activity packages. 

Increased Kake ridership has been accomplished despite uncertificated scheduled service 

between Kake and Sitka, the site of a Southeast Alaska Regional Health Consortium hospital. 

Previous to this service, patients of the SEARHC program either used the hospital in Juneau, or 

flew to Sitka via Juneau. To regain the lost traffic, Seaplanes will add flights between Kake and 
Sitka and then continuing to Juneau next month. Alaska Seaplanes expects the Sitka service to 

be self-sustaining and those flights between Kake and Sitka, and Sitka and Juneau, are not 

contemplated in the Kake-Juneau EAS proposal or subsidy request.

As reported earlier to DOT, errors related to new software implementation significantly 

understated all traffic types for Kake in the summer of 2013. The chart below reflects the 

correct data submitted to DOT earlier this year, and the growth in Kake traffic since Air 

Excursions/Alaska Seaplanes took over Essential Air Service from Wings of Alaska in 2010.

Wings of Alaska takes over EAS in 2Q2008

Air Excursions/Alaska Seaplanes takes over EAS in 3Q2010

Service for a four year period (October 1, 2014 – September 30, 2018) is proposed using nineseat Cessna Caravan and Piper Navajo aircraft, equipped and authorized for operation under 

Instrument Flight Rules. 

The Caravan was purchased and put into operation in 2013, and has generated strong approval 

from the community. The Piper Navajo was completely refurbished earlier this year, including 

new paint, interior, de-ice boots, autopilot and windows. It is now fully IFR-capable. Alaska 

Seaplanes reserves the right to operate Piper Cherokee, Cessna 206/207 and DeHavilland 

Beaver aircraft on the route when circumstances dictate, at a 5/9ths subsidy rate as has been 

past practice.

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KAKE PASSENGERS

PSGRS
In accordance with EAS requirements, two non-stop round trips would be operated in the peak 

period and one non-stop roundtrip per day during the off-peak period. The same flight 

frequency and operating statistics used in the 2012 bid are used here.

Alaska Seaplanes’ IFR-capable Cessna “Supervan” Caravan and Piper Navajo Chieftain
Passenger fares are set at the estimated average passenger fare with the average base pre-tax 

fare of $143.00. Freight rates are the standard per pound rate, and the mail rates are those 

currently in effect. Revenue for passengers and freight is expected to increase 6% per year 

based on traffic growth. Expenses are expected to increase at the rate of 4% per year. A 4% 

non-completion rate is assumed.

Seaplanes requests a term of four years for the contract, although separate bids for each year 

of operation are shown. Since taking over the EAS contract at Kake, both service frequency and 

traffic have increased greatly. Seaplanes has continuously upgraded its service by adding 

refurbished, instrument equipped Piper Navajo aircraft and now a Cessna Caravan. In 2012,

Seaplanes went to a new automated online reservation system which allowed for reduced 

passenger fares for tickets purchased online. Alaska Seaplanes has also partnered with Hahn 

Air to increase flight visibility through Global Distribution System (GDS) portals. Only Seaplanes 

can offer a full range of aircraft including amphibious aircraft, five seat land aircraft, nine seat 

multi-engine aircraft and nine seat turbine aircraft.

Since it began its service four years ago, Seaplanes has offered the most efficient patterns of 

service with the lowest subsidy need of all proposals. Seaplanes has undertaken a multi-million 

dollar program of aircraft and facility improvements, and a four year term will allow it to 

continue this effort with the confidence that the needed cash flow will be there.

Opposing proposals in the past have been “big on promises” which not only exceed the subsidy 

need substantially, but propose unsustainable fares and improvements which are illusory or 

inconsequential. Seaplanes has offered fares at rates comparable to non-subsidized markets 

rather than propose unsustainably low fares which only increase subsidy need.

Alaska Seaplanes proposes to operate the twice-daily peak season non-stop roundtrips and 

once daily off-peak non-stop roundtrip at an annual subsidy rate specified in the attached table. 

Additional indirect flight routings through Sitka will be available in both the summer and winter, 

but do not require subsidization.

Details of Excursion Inlet Proposal

Alaska Seaplanes is the only commuter-certificated carrier in the Juneau market to operate 

both wheel planes and float planes, allowing the greatest flexibility for operating scheduled 

service to Excursion Inlet given the occasional closure of its runway in the wintertime. 
Alaska Seaplanes proposes offering service at Excursion Inlet using Cessna 207 and Piper 

Cherokee Six wheel planes, and a Cessna 206 on amphibious floats for occasions when the 

community is only accessible by water. Seaplanes has provided year-round reliable service with 

this aircraft mix.

Alaska Seaplanes proposes to operate the 3-times weekly peak season roundtrips and onceweekly off-peak roundtrip at an annual subsidy rate specified in the attached table.

CONCLUSION

Alaska Seaplanes has shown its dedication to reliable service with aircraft desired by the 

communities. The purpose of two year bids is to allow for the possibility of better service or 

lower subsidy from different carriers. Alaska Seaplanes has always been the lowest bidder, 

offered the largest fleet and greatest variety of aircraft, and has continuously upgraded all 

elements of it service. 

These improvements reflect a significant capital risk that Seaplanes has undertaken willingly, 

and make a four-year term appropriate for both markets. A four year term of service is fully 

justified, and meets the conditions previously used to award contracts of this term. It is also 

requested that the contract to provide Essential Air Service be issued to Kalinin Aviation LLC 

dba “Alaska Seaplanes.”

Respectfully submitted,

Kalinin Aviation, LLC

d/b/a Alaska Seaplane Service

April 28, 2014
KALININ AVIATION, LLC PROJECTED E.A.S. REVENUE, EXPENSE & SUBSIDY NEED

BLOCK TIMES: OW TRIPS BLK HRS.

JNU-KAE 56 511 476.9

KAE-JNU 54 511 459.9

1022 936.8

JNU-EXI 27 94 42.3

EXI-JNU 23 94 36.0

188 78.3

OPERATING EXPENSE:

KAKE YE 12/2013 YE 6/2014 YE 6/2015 YE 6/2016 YE 6/2017 YE 6/2018

Direct $ 450,736 $ 468,766 $487,516 $507,017 $ 527,298 $ 548,390

Indirect $ 338,052 $ 351,574 $365,637 $380,263 $ 395,473 $ 411,292

subtotal $ 788,789 $ 820,340 $853,154 $887,280 $ 922,771 $ 959,682

Profit $ 39,439 $ 41,017 $ 42,658 $ 44,364 $ 46,139 $ 47,984

TOTAL 100% $ 828,228 $ 861,357 $895,812 $931,644 $ 968,910 $1,007,666

96% Completion $ 862,738 $ 897,247 $933,137 $970,462 $1,009,281 $1,049,652

EXCURSION INLET

Direct $ 25,458 $ 26,477 $ 27,536 $ 28,637 $ 29,783 $ 30,974

Indirect $ 19,094 $ 19,858 $ 20,652 $ 21,478 $ 22,337 $ 23,230

subtotal $ 44,552 $ 46,334 $ 48,188 $ 50,115 $ 52,120 $ 54,204

Profit $ 2,228 $ 2,317 $ 2,409 $ 2,506 $ 2,606 $ 2,710

TOTAL $ 46,780 $ 48,651 $ 50,597 $ 52,621 $ 54,726 $ 56,915

KAKE Traffic Type EAS Traffic Yield YE 6/14 YE 6/15 YE 6/16 YE 6/17 YE 6/18

Passengers 3220 $ 143.0000 $488,088 $522,254 $ 558,811 $ 597,928 $639,783

Freight 103043 $ 0.6000 $ 66,154 $ 70,784 $ 75,739 $ 81,041 $ 86,714

Mail 105748 $ 1.1568 $128,445 $134,867 $ 141,610 $ 148,691 $156,125

TOTAL $682,686 $727,905 $ 776,161 $ 827,660 $882,622

ANNUAL SUBSIDY NEED $205,232 $ 194,302 $ 181,621 $167,030

EXCURSION Traffic Type EAS Traffic Yield YE 6/14 YE 6/15 YE 6/16 YE 6/17 YE 6/18

Passengers 30 $ 98.0000 $ 3,087 $ 3,241 $ 3,403 $ 3,574 $ 3,752

Freight 3500 $ 0.5000 $ 1,838 $ 1,929 $ 2,026 $ 2,127 $ 2,233

Mail 12000 $ 1.2500 $ 15,750 $ 16,538 $ 17,364 $ 18,233 $ 19,144

TOTAL $ 20,675 $ 21,708 $ 22,794 $ 23,933 $ 25,130

ANNUAL SUBSIDY NEED $ 28,889 $ 29,827 $ 30,792 $ 31,785