BEFORE THE 

U.S. DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY, WASHINGTON D~C~ 

June17,2013 ·" 

Essential Air Service at: TATITLEK, AK 

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

DOCKET DOT-OST-2013-0030 

J & M Alaska Air Tours, Inc. dba Alaska Air Transit, hereby submits this proposal to 

provide subsidized essential air service to Tatitlek, Alaska for a contract period of two 

years. 

PROPOSED SCHEDULE 

Alaska Air Transit [AAT] is submitting two proposals. Both would provide year-round 

scheduled direct non-stop flights between Anchorage and Tatitlek, Alaska. Proposal A 

provides two scheduled flights per week, while Proposal B provides only one scheduled 

flight per week. AAT strongly recommends more than one trip weekly in order to provide 

a meaningful benefit to the community, as subsequently discussed in this letter of 

proposal. 

Scheduled service would operate in one of AAT's two IFR-equipped Navajo Chieftain 

aircraft, normally configured with seven seats to accommodate community freight 

needs. AAT may, at its discretion, upgrade to its nine-seat Cessna Grand Caravan or its 

nine-seat Pilatus PC-12 for no additional subsidy. 

BACKGROUND 

Alaska Air Transit has provided continuous service to the Prince William Sound 

communities since prior to the current owners purchase of the business in 2004. During 

that time, AAT has grown from two full-time employees and two aircraft to fifteen fulltime employees and four aircraft, including two IFR turboprops. AAT's customers value 

the company for its high standards of safety, dependability, and customer service. 

Over the past four years, Alaska Air Transit has expanded from an exclusively ondemand charter operation, and now includes scheduled service between Anchorage 

and several remote Alaskan communities. 

Alaska Air Transit already serves Tatitlek, primarily through on-demand charters, and 

has recently added Tatitlek flag stops on its three times weekly scheduled flights to 

Chenega Bay. 

Page 1 of 5 
JUSTIFICATION FOR MULTIPLE FREQUENCIES DIRECT SERVICE PROPOSAL 

Alaska Air Transit acknowledges the initial RFP stipulation for once weekly service from 

Cordova, and the US Postal Service's advocacy for Cordova based flights. AAT's 

proposals are predicated on its knowledge of the community's actual transportation 

needs, based on its years of charter service to the community. 

Regular patrons of AAT's Anchorage to Tatitlek charter service include medical patients, 

health care providers, teachers, students, village administrators, maintenance 

technicians, cruise ship pilots, and local families. 

Tatitlek school is part of the Chugach School District, headquartered in Anchorage. 

Administrators, teachers, and itinerant education specialists frequently charter between 

Anchorage and Tatitlek. Students are frequently flown to Anchorage where the school 

district maintains facilities to house them for in-town curriculum phases. 

Anchorage based health agencies, such as Chugachmiut and the Alaska Native Medical 

Center hospital, routinely use Alaska Air Transit for non-critical patient travel and to 

transport health aides between Anchorage and the village clinic. 

Similarly, all other community support services are based in Anchorage, such as the 

North Pacific Rim Housing Authority, and technicians who repair and maintain home 

heating and plumbing systems, and needed facilities like the electrical and water plants. 

Tatitlek has no stores or service providers, and Anchorage is the most economical and 

practical destination for residents themselves to purchase essential goods and services. 

Non-stop service is much more practical and economical to provide in the Prince 

William Sound, since the reliability of multiple-stop trips is adversely impacted by the 

unpredictable and dynamic weather in the region. It is common for one community to 

have flyable weather, while others in the region do not. Linking these destinations, as is 

occasionally done by charter customers, greatly reduces the likelihood of dispatching. 

While Cordova based service might benefit the US Postal Service, it provides no 

appreciable benefit to the community of Tatitlek, since Anchorage is the source of nearly 

all of Tatitlek's essential goods and services. Also, because the mail carrier is not based 

in Cordova, the aforementioned weather in the region has a disproportionate impact on 

mail service reliability. When timely delivery is essential, such as medications sent to the 

community or bill payments and medical lab samples sent from the community, the 

items are routinely sent space available on chartered AAT aircraft, and not via the 

USPS. Cordova's hub connection to a major airline is not relevant to Tatitlek, since the 

community has little need for networked jet transportation. It merely needs access to the 

essential goods and services taken for granted by those living on road systems. 

Without air service, travel between Tatitlek and Anchorage requires an often hazardous 

two hour boat ride to Valdez, and then a five plus hour drive to Anchorage that crosses 

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'· 
one of the most notorious mountain passes in Alaska. Our flight shortens the trip to less 

than one hour, and offers a safer and more reliable mode of transport. 

The provision of only a single scheduled flight per week, although minimizing taxpayer 

burden, will provide little benefit to the community. For example, if residents travel to 

Anchorage for a doctor appointment, they would incur a week of expensive hotel 

accommodations and restaurant meals. Similarly, it would be both impractical and costly 

for a school administrator or reading specialist to travel to Tatitlek, then wait for a week 

to return. 

More likely, a costly charter in at least one direction will be needed to return people to 

their origination prior to the following week's scheduled flight. While profitable for the air 

carrier, this is not economically feasible for residents, and puts an undue burden on the 

school district and other service agencies whose budgets are already stretched. 

Lastly, a single scheduled flight will bear a steeper economic burden per flight, due to 

the concentration of indirect operating costs over a smaller number of flights. 

CONCLUSION 

Alaska Air Transit, under its current ownership and management, has a proven track 

record in Tatitlek, and is well versed in the community's transportation needs and the 

special operational considerations for flying safely in the Prince William Sound region. 

AAT has provided accident free on-demand charter service to the community 

continuously for over nine years, and has been the exclusive air transportation provider 

for all of the community's supporting agencies and service providers, including the 

school district and health care providers. 

AAT is fully supported by these various agencies and by the community 

leadership. While other carriers have sought to enter the market, none have had staying 

power or gained the confidence of the community or its service agencies. 

Alaska Air Transit has consistently sought ways to expand service options, improve 

safety and reliability, and maintain affordability for flights to Tatitlek. 

Thank you for considering our proposal as we continue to seek opportunities to serve 

the community of Tatitlek. 

Daniel Owen 

Owner/President 

Alaska Air Transit 

www.flyAAT.com 

Page 3 of 5 
J & M Alaska Air Tours, Inc. (dba Alaska Air Transit) 

Proposal to Provide Essential Air Service to Tatitlek, Alaska 

Docket DOT-OST-2013-0030 

Proposal A 

Weekly round-trip schedule: Two direct non-stop flights per week 

Aircraft Type: Navajo Chieftain* 

*This proposal is bid as a Navajo Chieftain configured with seven seats (with the company's discretion to 

upgrade to a nine seat Cessna Grand Caravan or nine seat Pilatus PC-12, for no additional subsidy). 

Direct Operating Costs 

Pilot 

Fuel 

Maintenance 

Indirect Operating Costs 

Insurance 

Aircraft & Hangar Lease 

General & Administrative 

Total Operating Costs 

Profit Return@ 10% 

TOTAL ECONOMIC COST 

Revenue Source 

EXPENSES 

REVENUES 

Per Hour 

$95 

$240 

$175 

Per Hour 

$105 

$183 

$392 

Passengers 346 seats per year @ $180 per seat 

Freight 6667 lbs. per year@ .75 cents per lb. 

TOTAL PROJECTED GROSS REVENUE 

TOTAL PROJECTED NET REVENUE (subtracts FET) 

PROPOSED SUBSIDY 

Per Direct Non-stop Flight 

Maximum Annual Subsidy (1 04 flights @ 100% completion) 

Per Flight 

$152 

$384 

~ 

$816 

Per Flight 

$168 

$293 

$627 

$1088 

$1904 per flight 

$ 190 per flight 

$2094 per flight 

$217,776 per year 

$62,280 

$5.000 

$67,280 per year 

$647 per flight 

$62,608 per year 

$602 per flight 

$1492 

$155,168 

Page 4 of 5 
J & M Alaska Air Tours, Inc. (dba Alaska Air Transit) 

Proposal to Provide Essential Air Service to Tatitlek, Alaska 

Docket DOT-OST-2013-0030 

Proposal B 

Weekly round-trip schedule: One direct non-stop flight per week 

Aircraft Type: Navajo Chieftain* 

*This proposal is bid as a Navajo Chieftain configured with seven seats (with the company's discretion to 

upgrade to a nine seat Cessna Grand Caravan or nine seat Pilatus PC-12, for no additional subsidy). 

Direct Operating Costs 

Pilot 

Fuel 

Maintenance 

Indirect Operating Costs 

Insurance 

Aircraft & Hangar Lease 

General & Administrative 

Total Operating Costs 

Profit Return@ 10% 

TOTAL ECONOMIC COST 

Revenue Source 

EXPENSES 

REVENUES 

Per Hour 

$95 

$240 

$175 

Per Hour 

$210 

$366 

$392 

Passengers 173 seats per year @ $180 per seat 

Freight 3334 lbs. per year @ .75 cents per lb. 

TOTAL PROJECTED GROSS REVENUE 

TOTAL PROJECTED NET REVENUE (subtracts FET) 

PROPOSED SUBSIDY 

Per Direct Non-stop Flight 

Maximum Annual Subsidy (52 flights @ 1 00% completion) 

Per Flight 

$152 

$384 

$200 

$816 

Per Flight 

$336 

$586 

$1254 

$2176 

$2992 per flight 

$ 299 per flight 

$3291 per flight 

$171,132 per year 

$31,140 

$2.500 

$33,640 per year 

$647 per flight 

$31 ,304 per year 

$602 per flight 

$2,689 

$139,828 

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