BEFORETHE U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY, WASHINGTON**D~C~** June17,2013 ·"
EssentialAir Service at: TATITLEK, AK Under 49 U.S.C. 41731 

### etseq. DOCKET DOT-OST-2013-0030

J & MAlaskaAirTours, Inc. dbaAlaskaAir Transit, hereby submits this proposal to provide subsidized essential air service to Tatitlek, Alaska for a contract period oftwo years.
PROPOSED SCHEDULE AlaskaAir Transit [AAT] is submitting two proposals. Both would provide year-round scheduled direct non-stopflights between Anchorage and Tatitlek, Alaska. ProposalA provides two scheduled flights per week, while Proposal B provides only one scheduled flight perweek. AAT strongly recommends more than onetrip weekly in orderto provide a meaningful benefitto the community, as subsequently discussed in this letter of proposal. Scheduled service would operate in one ofAAT's two IFR-equipped Navajo Chieftain aircraft, normally configured with seven seats to accommodate communityfreight needs. AAT may, at its discretion, upgradeto its nine-seat Cessna Grand Caravan or its nine-seat Pilatus PC-12 for no additional subsidy.
BACKGROUND AlaskaAirTransit has provided continuous service to the Prince William Sound communities since priorto the current owners purchase ofthe business in 2004. During thattime, AAT has grown from two full-time employees and two aircraft to fifteen fulltime employees and four aircraft, including two IFR turboprops. AAT's customersvalue the companyfor its high standards of safety, dependability, and customer service. Overthe pastfouryears, AlaskaAir Transit has expanded from an exclusively ondemand charter operation, and now includes scheduled service betweenAnchorage and several remote Alaskan communities. AlaskaAir 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 1of 5JUSTIFICATION FOR MULTIPLE FREQUENCIES DIRECT SERVICE PROPOSAL AlaskaAir Transit acknowledgesthe initial RFP stipulation for once weekly service from Cordova, and the US Postal Service's advocacyfor Cordova based flights. AAT's proposals are predicated on its knowledge ofthe community's actual transportation needs, based on itsyears of charter service to the community. Regular patrons ofAAT'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 ofthe 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 maintainsfacilities to house them for in-town curriculum phases. Anchorage based health agencies, such as Chugachmiut and the Alaska Native Medical Center hospital, routinely useAlaskaAirTransit for non-critical patienttravel and to transport health aides between Anchorage and the village clinic. Similarly, all other community support services are based in Anchorage, such asthe North Pacific Rim HousingAuthority, and technicians who repair and maintain home heating and plumbing systems, and needed facilities like the electrical and water plants. Tatitlek has no stores orservice 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 bythe unpredictable and dynamicweather 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 benefitthe US Postal Service, it provides no appreciable benefit to the community ofTatitlek, sinceAnchorage is the source of nearly all ofTatitlek'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 sentto 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 notviathe USPS. Cordova's hub connection to a major airline is not relevant to Tatitlek, since the community has little need for networkedjettransportation. It merely needs accessto 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 afive plus hour driveto Anchorage that crosses Page 2 of 5 

### '·one of the most notorious mountain passes in Alaska. Ourflight shortens the trip to less than one hour, and offers a safer and more reliable mode oftransport. 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 specialistto travel to Tatitlek, then waitfor a week to return. More likely, a costly charter in at least one direction will be needed to return people to their origination priorto the following week's scheduled flight. While profitable forthe air carrier, this is not economicallyfeasible 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 perflight, due to the concentration of indirect operating costs over a smaller number of flights.

CONCLUSION AlaskaAir 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 considerationsfor flying safely in the Prince William Sound region. AAT has provided accident free on-demand charter service to the community continuouslyfor over nine years, and has been the exclusive airtransportation provider for all ofthe 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 enterthe market, none have had staying power or gained the confidence of the community or its service agencies. AlaskaAir Transit has consistently sought ways to expand service options, improve safety and reliability, and maintain affordabilityfor flights to Tatitlek. Thankyou for considering our proposal as we continue to seek opportunitiesto serve the community ofTatitlek.
Daniel Owen Owner/President AlaskaAirTransit www.flyAAT.com Page 3 of 5

### J & M Alaska AirTours, Inc. (dbaAlaskaAirTransit) Proposal to Provide Essential Air Serviceto Tatitlek, Alaska Docket DOT-OST-2013-0030 Proposal A Weekly round-trip schedule: Two direct non-stopflights per week AircraftType: 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 peryear @$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 MaximumAnnual Subsidy (104 flights @100%completion) Per Flight $152 $384**~** $816 Per Flight $168 $293 $627 $1088 $1904 perflight $ 190 perflight $2094 perflight $217,776 peryear

$62,280

$5.000 $67,280 per year $647 per flight $62,608 peryear $602 perflight
$1492 $155,168 Page 4 of 5

## J &M AlaskaAir Tours, Inc. (dbaAlaskaAir Transit) Proposal to Provide Essential Air Serviceto Tatitlek, Alaska Docket DOT-OST-2013-0030 Proposal B Weekly round-trip schedule: One direct non-stopflight per week AircraftType: 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 peryear @$180 per seat Freight 3334 lbs. peryear @ .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 @ 100% completion) Per Flight $152 $384 

### $200 $816 Per Flight $336 $586 $1254 $2176 $2992 perflight $ 299 perflight $3291 perflight $171,132 peryear

$31,140

$2.500 $33,640 peryear $647 perflight $31 ,304 peryear $602 per flight
$2,689 $139,828 Page 5 of 5