j 

' 

To: 

From: 

February 10,2015 

United States of America Department of 

Transportation Office of the Secretary 

Washington D.C. 

Servant Air. Inc. 

1633 Airport Way 

Kodiak, !\Iaska 996 1 5 

ALEKNAGIK. ALASKA 

under 49 U.S.C. 

DOCKET DOT-OST-2014-0219 

Summary 

Under Order 2014-0219, The Department of Transportation has requested 

proposals for essential service air transportation at Aleknagik, Alaska . Please 

accept this proposal as submitted by Servant Air Inc. of Kodiak, Alaska to provide 

such service. 

History 

Servant Air, Inc .. is an air carrier with interstate transportation authority and 401 

certification. This entity has been operationally based in Kodiak Alaska since 2004. 

Servant Air's pilots are 311 qualified, conscientious, and well-establishedin Alaskan 

aviation. 

Mission 

It is the mission of Servant Air, Inc. to provide safe. reliable, affordable 

transportation around the entire State of Alaska, with special emphasis on the 

coastal region of this state. Our primary offices are currently located at the 

Kodiak State Airport, and with the inception of this essential air service contract, we 

will be establishing a branch location in Dillinghan<. Servant Air, Inc. takes pride in 

the service it currently provides to the Kodiak Island District.. However, Servant 

Air, Inc. wishes to expand its operations to encon1pass more of the coastal region. 

Therefore, it is Servant Air's intent to bid this essential air service outlined above. 

Page 1 of 3 
Aircraft 

To accomplish this goal ofthe Departments request, Servant Air. Inc. proposes to 

use a Piper Cherokee aircraft. Option 1 would use a PA-32 aircraft which is 

capable of carrying a maximum of 5 passengers. It cruises at 120 knots and 

performs very well in short I soft field operations. Option 2 would use a PA-28 

aircraft capable of carr·ying only 3 passengers at a cruise speed of 100 Knots. 

This proposal is being included as its lower operatin~l cost and acquisition cost 

would allow more frequency. We also feel that a higlier frequency flight 

schedule will allow passengers to make "Day Trips" to Dillingl1am. thereby 

increasing the incentive to tr·avel, and increase revenues somewhat. This in turn 

will allow for a lower overall subsidy cost. 

Proposed Scheduling 

The Exhibit "A", attached, is a financial s preadshr:;et showing the calculations 

for ServantAir's proposed subsidy request to provide the following service: 

Option 1 One round trip flight each Monday Wednesday and Friday 

Dillingham- Aleknagik- Dillingham 

Monday, Wednesday. Friday 

Option 2 Two round trip flights each Monday Wednesday and Friday 

Dillingham- Aleknagik - Dillingham 

Monday. Wednesday Friday 

Upon award of any subsidy contract, Servant Air will work witii the destination 

Community to further refine the above schedule to best meet the: needs of this 

community. These final schedules will then be published in t!1e Official Airline 

Guide (OAG). 

Operations Logistics 

Operations oversight will be conducted from Servant Air's flight coordination 

office at Kodiak. The aircraft will begin and terminate these flight operations 

at the Dillingham airport terminaL and all flights will be monitored VIA a GPS 

tracking system currently in place. 

Compensation 

Contract compensation is expected as outline in Exhibit ''A" with a fixed cost 

allocation for option 1 of $20,333.33 or option 2 $18,083.33 being paid 

monthly, in addition to a variable component paid based on departures 

completed. ie: total subsidy request less fixed costs (paid above) divided into 

departures. for an additional monthly compens<ltion equal to (Option 1 S42.76 

per departure) (Option 2 S12.80 per departure). This equates to a total 

subsidy request of $257,342.15 for option 1 or $224,985.12 for option 2 per 

year for a two year term. It is also understood that only completc?d flights wili be 

eligible for Variable Cost compensation. 

Page 2 of 3 
Exhibit ''A" 

Servant Air Inc. 

1633 Airport Way 

Kodiak Alaska 99615 

Essential Service Subsidy Request 

At Aleknagik, Alaska 

Total Estimated flight Time 

Option 1 

Option 2 

PA-32 

One Trip M,W,F 

PA-28 

Twa Trips M,W,F 

Hrs Per Trip 

Option 1 

0.4 

0.4 

Revenue Exptectation $ 13,020.00 

Annual Hrs. Plus 10% weather deviation 

62.4 68.64 

124.8 137.28 

Option 2 

$ 18,000.00 

217 PEQ X $60.00 300 PEQ X $60.00 

Fixed Cast Allocation 

Pilot 

Training 

Insurance 

Aircraft Lease 

Hanger I Dispatch Facility 

Crew Housing 

Agent 

Accounting I Admin I Dispatch 

Total Fixed Cast 

Variable Casts per flight hour 

Fuel 

Maintenance 

Reserves (Prop and Engine) 

Total Variable Costs per Hour 

Total Operating Cast 

Net Operating Loss 

Target Profit Margin 5% 

Total Subsidy Request 

$ 50,000.00 

$ 5,000.00 

$ 27,000.00 

$ 36,000.00 

$ 72,000.00 

$ 36,000.00 

$ 6,000.00 

$ 12,000.00 

$ 244,000.00 

$ 144.00 

$ 30.00 

$ 22.50 

$ 196.50 

$ 257,487.76 

$ (244,467.76) 

$ 12,874.39 

$ 257,342.15 

Page 3 of 3 

$ 50,000.00 

$ 5,000.00 

$ 18,000.00 

$ 18,000.00 

$ 72,000.00 

$ 36,000.00 

$ 6,000.00 

$ 12,000.00 

$ 217,000.00 

$ 64.00 

$ 30.00 

$ 11.00 

$ 105.00 

$ 231,414.40 

$ (213,414.40) 

$ 11,570.72 

$ 224,985.12