Megan Ouellette Managing Director, Government and Community Relations



### February 11, 2015

Mr. Kevin Schlemmer Office ofAviation Analysis U.S. Department ofTransportation 1200 NewJersey Avenue, S.E. Washington, D.C. 20590 Re: Proposal to Provide Essential Air Service at Adak, Alaska Docket DOT-OST-2000-8556

Dear Mr. Schlemmer: Please see the enclosed essential air service proposal from Alaska Airlines, Inc. for the community ofAdak, Alaska. Also attached is the certification for a drug-free workplace, certification for nondiscrimination, and the certification pertaining to influencing activities. Please contact me ifyou need additional information. Sincerely,

Enclosures

cc: Michael Gormas

P.O. BOX 689110 • SEt\TTLI\, Wt\ 9HI6R-0900 • SL·:Ac;T • l;i\X 206-392-27H6

### Page 1 of 1 Alaska Airlines, Inc. Essential Air Service at Adak, Alaska Index ofExhibits Exhibit Title Pages AS-I Narrative Statement 1 AS-2 SubsidyRequest 1 AS-3 Schedule 1

### Alaska Airlines, Inc. Compensation Requirement Essential Air Service to Adak, Alaska

Narrative Statement AS-1

Alaska Airlines, Inc. ("Alaska Airlines" or "Alaska") is pleased, in response to Order 2000- 8556, to submit our EAS proposal to provide twice-weekly nonstop Anchorage-Adak service with Boeing 737 jet aircraft. Alaska Airlines requests an EAS compensation level of$2,043,620 annually for this two-year contract proposal. This EAS compensation proposal, which is lowerthan the current subsidy rate, is primarilythe result ofa modest projected increase in revenues and projected decrease in fuel expenses. These financial considerations in part offset increases in several other costs categories, as noted in our bid (AS-2). Adak is one ofthe very most remote communities in the state ofAlaska, located more than 1,000 miles from Anchorage, so far down the Aleutian island chain that it is actually in the Hawaiian-Aleutian time zone. Our 737 jet aircraft are well suited to this market, providing not only passenger service, but also serving as the primary way for shipments ofgoods to reach this isolated community. Jet aircraft are critical for serving Adak given the extremely long distance between Anchorage and the community and the very limited number ofsuitable alternative airports along the route or near Adak. The 737 jet aircraft's nearly three hours ofAdak flying time is hours less than any one-stop (or multi-stop) small aircraft service. In addition, our Thursday and Sunday aircraft rotations correspond well with the Adak community's demonstrated passenger travel and shipper usage patterns. Importantly, the large cargo and passenger capacity ofthe 737 aircraft ensures the passenger's baggage will arrive on the same flight as the passenger- an important consideration for passengers traveling such long distances to and from the Adak community. Alaska's 737 aircraft are equipped with Required Navigation Performance (RNP) technology, which helps us reliably serve Adak, a community known for its inclement weather. In addition to this special aircraft equipage and flight crew training, Alaska Airlines also has special, FAA-approved, RNP approach procedures developed specifically for usage at Adak. Given the anticipated closure ofthe Adak crosswind runway and the 600 foot shortening ofthe main runway, our RNP equipage and special procedures are particularly important, enabling us to maintain a comparatively high flight completion factor in serving this community. Alaska Airlines is firmly committed to continuing to fulfill our longstanding role as Adak's transportation linkto our hubs within and beyond the state ofAlaska. Our nonstop jet service fulfills a critical need for this community. We are hopeful to continue to provide not only "essential" service to Adak, but excellent service as well.Alaska Airlines, Inc. Annual Compensation Requirement

Operating Revenue Passenger 1/ Freight/Mail Excess Baggage Other Revenue Operating Expense Direct Operating Flying 2/ Station 3/ Maintenance FlightAttendant 4/ Selling/ Advert

· Fuel 51 Indirect Ownership Overhead $

$ Total Operating Exp. $ Operating Profit (Loss) $
Return $ Essential Air Service atAdak October 1, 2015 and Forward

1,363,115

747,792

74,559 214,331 2,399,797

689,878 577,781 406,704 223,197

61,499 1,466,942 3,426,001

490,941 314,883 805,825 4,231,826 (1 ,832,029)

211,591 Compensation

- ._1

_____**.;.$2~,~0.;.43;;.:'.;.6;;;,20;;....**____ .... AS-2

1/ Excludes Public Service revenue, Adjusted to account for impact of crosswind Runway Closure 2/ Flying cost based on YE 2014 actuals, contractual pilot rate increases 3/ Station Costs for YE 2014 amortized overtwo years 4/ F/A Cost based on YE 2014 actuals, includes contractual rate increases. 51 Fuel Cost Based on YE 2014 Actuals, assume No Change to PPG OF $3.24

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### UNITED STATES OF AMERICA DEPARTMENT OFTRANSPORTATION OFFICE OF THE SECRETARY OFFICE OF AVIATION ANALYSIS TITLE VIASSURANCE (Implementing Title VI ofthe Civil Rights Act of 1964, as amended) ASSURANCE CONCERNING NONDISCRIMINATION ON THE BASIS OFDISABILITY IN FEDERALLY-ASSISTED PROGRAMS AND ACTIVITIES RECEIVING ORBENEFITING FROM FEDERAL FINANCIAL ASSISTANCE (Implementing the Rehabilitation Act of 1973, as amended, and the Air CarrierAccess Act of 1986) 49 CFRParts 21 and 27 and 14 CFRParts 271, and 382



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## S**\l..~';j \.~...**  fT\ (!,'.,,))the Recipient) HEREBY AGREES THAT, (Name ofRecipient) I. As a condition toreceiving any Federal financial assistance from the Department ofTransportation, it will comply: with Title VI ofthe Civil Rights Actof 1964, as amended, 42 U.S.C. 2000d--42 U.S.C. 2000d-4; all requirements imposed by orpursuant to: Title 49, Code ofFederal Regulations, Part 21, Nondiscrimination in Federally-Assisted Programs ofthe Department ofTransportation--Effectuation ofTitle VI oftheCivil Rights Act of 1964; and other pertinent directives so that no person in the United States shall, onthe grounds ofrace, color, ornational origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity for whichthe Recipient receives Federal financial assistance from the Department of Transportation. This assurance is required by Title 49, Code ofFederal Regulations, section 21.7(a) and Title 14, Code ofFederal Regulations, section 271.9(c). II. As a condition to receiving any Federal financial assistance from the Department ofTransportation, it will comply with: section 504 ofthe Rehabilitation Act of 1973, as amended (29 U.S.C. 794); the Air Carrier Access Act of 1986 (49 U.S.C. 1374(c)); and all requirements imposed by or pursuant to Title 49, Code ofFederal Regulations, Part 27, Nondiscrimination on the Basis ofHandicap in Programs and Activities Receiving or Benefitting from Federal Financial Assistance, Title 14, Code ofFederal Regulations, Part 382, Nondiscrimination onthe Basis ofHandicap in Air Travel; and other pertinent directives

### so that no otherwise qualified person with a disability, be excluded from participation in, be denied the benefits of, be discriminated against by reason ofsuch handicap in the provision ofairtransportation, or otherwise be subjected to discrimination under any program for which the Recipient receives Federal financial assistance from the Department of Transportation. This assurance is required by Title 49, Code ofFederal Regulations, section 27.9 and Title 14, Code ofFederal Regulations, sections 271.9(c) and 382.9. III. It

### will promptly take any meaures necessary to effectuate this agreement. The Recipient further agrees that it shall take reasonable actions to guarantee that 

### it, its contractors and subcontractors subject to the Department ofTransportation regulations cited above, transferees, and successors in interest will comply with all requirements imposed or pursuant to the statutes and Department ofTransportation regulations cited above, other pertinent directives, and the above assurances. IV. These assurances obligate the Recipient for the period during which Federal fmancial assistance is extended. The Recipient agrees thatthe United States has a right to seekjudicial enforcement with regard to any matter arising underthe statutes and Department ofTransportation regulations cited above, other pertinent directives, and the above assurances. V. These assurances are given for the purpose ofobtaining Federal subsidy underthe Essential Air Service Program and are binding on the Recipient, contractors, subcontractors, transferees, successors in interest, and all other participants receiving Federal subsidy inthe Essential Air Service Program. The person or persons whose signatures appear below are authorized to sign this agreement on behalfofthe Recipient. VI. In

### addition to these assurances, the Recipient agrees to file: a summary ofall complaints filed against it within the past yearthat allege violation(s) by the Recipient of Title VI ofthe Civil Rights Act of 1964, as amended, section 504 oftheRehabilitation Act of 1973, as amended, or the Air Carrier Access Act of 1986; or a statementthatthere have been no complaints filed against it. The summary should include the date the complaintwas filed, the nature ofthe complaint, the status or outcome ofthe complaint (k,

### whether it is still pending or how it was resolved).



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### UNITED STATES OFAMERICA DEPARTMENT OFTRANSPORTATION OFFICE OFTHE SECRETARY OFFICE OFAVIATIONANALYSIS CERTIFICATIONREGARDINGDRUG-FREE WORKPLACE REQUIREMENTS 

### IN THE PERFORMANCE OF SUBSIDIZED ESSENTIAL AIR SERVICE A. The subsidized essential air service carrier certifies that it will, or will continue, to provide a drugfree workplace by: (a) Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession oruse ofa controlled substance is prohibited inthe carrier's workplace, and specifyingthe actions that will betaken against employees for violation ofsuchprohibition; (b) Establishing an ongoing drug-free awareness program to inform employees about-- (1) The dangers ofdrug abuse inthe workplace; (2) The grantee's policy ofmaintaining a drug-free workplace; (3) Any available drug counseling, rehabilitation, and employee assistance programs; and (4) The penalties thatmay be imposed upon employees for drug abuse violations occurring inthe workplace; (c) Making it a requirementthat each employee to be engaged in the performance ofwork supported by the subsidy be given a copy ofthe statement required by paragraph (a); (d) Notifying the employee inthe statementrequired by paragraph (a) that, as a condition of employment supported by the subsidy, the employee will-- (1) Abide by the terms ofthe statement; and (2) Notify the employer in writing ofhis orher conviction for a violation ofa criminal drug statute occurring inthe workplace no later than five calendar days after such conviction; (e) Notifying the agency in writing, within ten calendar days after receiving notice under paragraph (d)(2) from an employee or otherwise receiving actual notice ofconviction. Employers ofconvicted employees mustprovide notice, includingpositiontitle, to the Office ofAviation Analysis. Notice shall include the ordernumber ofeach affected subsidized service; (f) Taking one ofthe following actions, within 30 days ofreceiving notice under paragraph (d)(2), with respect to any employee who is so convicted-- (!) Taking appropriate personnel action against such an employee, up to and including termination, consistent with the requirements ofthe Rehabilitation Act of 1973, as amended, or (2) Requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State or local health, law enforcement, or other appropriate agency;(g) Making a good faith effortto continue to maintain a drug-free workplace through implementation ofparagraphs (a), (b), (c), (d), (e) and (f).

B. The subsidized essential air service carrier

### may, butis notrequired to, insert inthe space provided below the site for the performance ofwork done in connection with the specific grant.

Places ofPerformance (street address, city, county, state, zip code). Forthe provision ofessential air service, workplaces include outstations, maintenance sites, headquarters office locations, training sites and any other worksites where work is performedthat is supported by the subsidy.

Check [ ] ifthere are workplaces onfile that are not identified here.

Signature Date

### INSTRUCTIONS FOR CERTIFICATION

1. By signing and/or submitting this application or grant agreement, the subsidized essential air service carrier is providing the certification. 2. The certification is a materia1representation offact upon whichreliance is placed whenthe agency awards the subsidy. Ifit is later determined that the subsidized carrier knowingly rendered a false certification, or otherwise violated the requirements ofthe Drug-Free Workplace Act, the agency, in additionto any otherremedies available to the Federal Government, may take action authorized under the Drug-Free Workplace Act. 3. Workplaces under grants, for grantees otherthan individuals, need not be identified onthe certification. 

### Ifknown, they may be identified inthe subsidy application. Ifthe subsidized carrier does not identify the workplaces atthe time ofapplication, orupon award ifthere is no application, the carrier mustkeep the identity ofthe workplaces on file in its office and make the information available for Federal inspection. Failure to identify all known workplaces constitutes a violation ofthe subsidized carrier's drug-free workplace requirements. 4. Workplace identifications must include the actualaddress ofbuildings (or parts ofbuildings) or other sites where work underthe granttakes place. Categorical descriptions may be used 

### (e.g., all counters atthe airports served by the carrier). 5. Ifthe workplace identified to the agency changes duringthe performance ofthe subsidized service, the subsidized carrier shall inform the agency ofthe change, ifit previously identifiedthe workplace in question.
6. Defmitions ofterms in the Nonprocurement Suspension and Debarment common rule (49 CFR Part 29) and Drug-Free Workplace common rule (49 CFRPart 29, SubpartF) apply tothis certification. Carriers' attention is called, in particular, to the following definitions from these rules: 

### Controlledsubstance means a controlled substance in Schedules I through V ofthe Controlled Substances Act (21 USC 812) and as further defmed by regulation (21 CFR 1308.11 through 1308.15); 

### Conviction means a finding ofguilt (including a plea of

### nolo contendere) or imposition ofsentence, or both, by anyjudicial body charged withthe responsibility to determine violations ofthe Federal or State criminal drug statutes; 

### Criminaldrugstatute means a Federal or non-Federal criminal statute involvingthe manufacture, distribution, dispensing, use, orpossession ofany controlled substance; 

### Employee means the employee ofa subsidized carrier directly engaged inthe performance ofwork supported by the subsidy, including: 

### (i) All 

### direct charge employees; (ii) All 

### indirect charge employees unless their impact or involvement is insignificant tothe performance ofsubsidized service; and (iii) Temporary personnel and consultants who are directly engaged inthe performance ofwork supported by the subsidy and who are onthe subsidized carrier's payroll. This definition does not include workers not onthe payroll ofthe subsidized carrier 

### (e.g., volunteers, even ifused to meet a matching requirement; consultants or independent contractors not onthe subsidized carrier's payroll; or employees ofsubrecipients or subcontractors in covered workplaces).

### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFNCEOFTHESECRETARY OmCE OF AVIATION ANALYSIS CERTIFICATION REGARDING INFLUENCING ACTIVITIES Certification for Contracts, Grants, Loans, and Cooperative Agreements The undersigned certifies, to the best ofhis or her knowledge and belief, that: (1) No Federal appropriated funds have beenpaid or will be paid, by or on behalfofthe undersigned, to any person for influencing or attempting to influence an officer or employee ofany agency, a Member ofCongress, an officer or employee ofCongress, or an employee ofa Member ofCongress in connection with the awarding ofany Federal contract, the making ofany Federal grant, the making ofany Federal loan, the entering into ofany cooperative agreement, andthe extension, continuation, renewal, amendment, or modification ofany Federal contract, grant, loan, or cooperative agreement. (2) Ifany funds otherthan Federal appropriated funds have been paid orwill be paid to any person for influencing or attempting to influence an officer or employee ofany agency, a Member ofCongress, an officer or employee ofCongress, or an employee ofa Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosure Form to Report Influencing Activities," in accordance with its instructions. (3) The undersigned shall require that the language ofthis certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. This certification is a material representation offact upon whichreliance was placed when this transaction was made or entered into. Submission ofthis certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subjectto a civil penalty ofnot less than $10,000 and not more than $100,000 for each such failure.

Signature Date 

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