Before the United States Department of Transportation

April 28, 2014

Proposal to Provide Essential Air Service at

KAKE, ALASKA

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

Docket DOT-OST-2008-0217

Proposal to Provide Essential Air Service at 

Kake, Alaska

By Order 2014-3-15, the Department requested proposals from carriers interested in providing

essential air service (EAS) at Kake, Alaska. Pursuant to that Order, SeaPort Airlines, Inc. dba 

Wings of Alaska respectfully submits this timely proposal to provide EAS at Kake, Alaska with 

an annual subsidy of $368,623.

Soon after submitting this proposal to the Department, copies will be provided to the City of 

Kake, Organized Village of Kake (OVK), Kake City School District, and Alaska Division of 

Statewide Aviation. We will offer to meet with these stakeholders, along with any interested 

citizens, to answer any questions in regard to our proposal

Correspondence regarding this proposal should be directed to:

Timothy Sieber

Executive Vice President

SeaPort Airlines, Inc.

7505 NE Airport Way

Portland, OR 97218

(971) 340-1716

tim@seaportair.com
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About Wings of Alaska 

SeaPort Airlines, Inc. is a FAA certified scheduled airline founded over 30 years ago and doing 

business in Southeast Alaska as Wings of Alaska. 

Currently, approximately 230 professionals operate an average of 140 daily departures to 21

cities in nine states.

1 Wings of Alaska provides scheduled service (passenger, freight and mail) 

between Juneau and Skagway, Haines, Hoonah, and Gustavus. In addition, we operate charter 

flights throughout Southeast Alaska on a regular basis. 

The company’s fleet is comprised of 17 aircraft, including two Cessna Caravans (increasing to 

three during summer months) and four Cessna 206/207s based at Juneau International Airport

and assigned to Wings of Alaska. The company’s national reach and large fleet provides us the 

flexibility to reposition additional aircraft to Southeast Alaska over the summer, ensuring that our 

obligations to local residents are not negatively impacted as we serve the seasonal tourist trade.

 1 Service to Great Bend and Wichita, Kansas will be added in June 2014.
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Alaska Airlines Connections Enabled by World-Class Reservation System

On March 23, 2014, the company completed the migration of passenger service systems to the 

Amadeus Altéa suite of airline IT solutions, providing our customers with the benefits of 

industry-leading technology chosen by 100+ airlines around the world.2

 

For customers in Southeast Alaska, the greatest benefit of Altéa is the new interline agreement 

between Wings of Alaska and Alaska Airlines, enabling the sale of tickets connecting any of our 

communities in Southeast Alaska with the over 90 destinations of Alaska Airlines. The 

capabilities of Altéa allow us to offer the convenience of connecting tickets directly on 

www.WingsOfAlaska.com. The “screen capture” below illustrates a sample of the options 

offered in response to a query for travel between Skagway and Seattle. If selected to provide 

EAS at Kake, options for connecting between Kake and Alaska Airlines destinations would be 

similarly displayed.

In addition to Wings of Alaska website, our flights (including connecting itineraries with Alaska 

Airlines) are available for sale anywhere in the world via travel agents and on major online travel 

 2 Among other carriers using the Altéa suite are Air France, KLM Royal Dutch Airlines, Lufthansa, Southwest Airlines 

(international services only), Korean Airlines, Qantas, and British Airways.
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service such as Orbitz, Travelocity, Expedia, Kayak, Hipmunk, and CheapoAir. Customers may 

also make reservations over the telephone or at any airport ticket counter. 

The interline agreement also provides the convenience of through baggage check-in. This 

means that Wings of Alaska customer baggage is automatically transferred to/from connecting 

flights of Alaska Airlines thus eliminating the need to claim and recheck baggage at Juneau 

International Airport.

Finally, it is important to note that the other scheduled commuter air carriers in Southeast 

Alaska do not have reservation platforms with capabilities comparable to those of Altéa. This 

means that only Wings of Alaska is able to offer Southeast Alaska residents the convenience of 

connecting service with Alaska Airlines.3

Unparalleled Safety and Reliability

Kake’s location results in a route of flight along Stephens Passage or Seymour Canal, including 

a crossing over Frederick Sound. The weather along this route is frequently marginal VFR and 

some portions of the route have poor or non-existent radio communication. Despite these 

operational challenges, Wings of Alaska is well positioned to provide the citizens of Kake with 

safe and reliable air transportation:

• The company’s FAA Operation Specifications authorizes operations under Instrument 

Flight Rules (IFR) and we will, when weather conditions require, use this authority to 

ensure high levels of operational reliability at Kake.

• Wings of Alaska is a participant in the FAA’s Capstone Project Phase Two in Southeast 

Alaska, a safety program that concentrates on increasing safety through technology with 

systems such as GPS receivers, data link transceivers, ADS-B, Multi-Function Displays, 

Flight Information Services, moving maps, and terrain databases. Aircraft in the fleet 

permanently assigned to Wings of Alaska and based at Juneau are Capstone-equipped. 

• Wings of Alaska is an active participate in the Alaska Air Carrier 

Association's Medallion Foundation, a non-profit organization 

promoting aviation safety through systems enhancements by 

providing management resources, training, and support to the 

aviation community. Of the two air carriers with scheduled authority 

based at Juneau International Airport, only Wings of Alaska has 

earned the Medallion Shield indicating achievement of all five 

cornerstones of the Medallion program along with engagement and 

support of the company’s safety culture among all employees, 

management and frontline alike. 

 3

Wings of Alaska respectfully requests that the benefits of the interline agreement to Kake residents be given 

favorable consideration when evaluating carrier proposals, and in a manner consistent with 49 U.S.C. §41733 (c) (1) 

which directs the Department to consider four factors when selecting a carrier to provide Essential Air Service: (1) 

service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub; (3) interline 

arrangements with a larger carrier at the hub; and (4) community views.
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Full Cargo Service

Cargo service is offered on all scheduled flights of Wings of Alaska, including interline cargo 

transfers to/from Alaska Airlines. At Juneau, our large cargo warehouse includes walk-in chillers 

and freezers for storage of perishable items awaiting pick-up or outbound flight departure.

In addition to cargo, Wings of Alaska is an agent for both FedEx and UPS express shipments, 

and is contracted by the U.S. Postal Service for carriage of mail.

If selected to provide EAS at Kake, Wings of Alaska would offers a standard cargo rate of $.50 

per pound with a minimum charge of $10 for shipments less than 20 pounds. Discounted cargo 

rates are offered to high volume shippers in most of our markets and we offer similar 

opportunities in the Kake market.

Customer Loyalty Rewarded With “Wings Wanderlust”

Wings of Alaska recognizes customer loyalty through our 

“Wings Wanderlust” frequent flyer program. This program 

allows a customer who takes nine one-way flights within a 

24 month period to earn a free one-way ticket. A free 

roundtrip ticket is earned when a customer takes 16 oneway flights within a 24 month period.

There is no cost to join the program and no blackout dates 

or limits on the number of seats available for earned free

travel.

Track Record of Building Community Partnerships

Wings of Alaska prides itself on developing partnerships in each community that it serves. This 

includes participation in local events, in-kind sponsorships and donations, partnering with local 

schools, community food drives, and advance notification and opportunity for input prior to 

schedule and fare changes. These community partnerships serve both our own interests and 

those of the community by fostering a long-term, stable relationship that results in increased 

ridership and, in the case of EAS markets, can contribute to lower subsidy requirements over 

time.

Specifically at Kake, after selection we would immediately offer the school district a 15% 

discount on charters for team traveling to “away” games. This would be followed by inclusion in 

all programs that we conduct across our Southeast Alaska operations, as well as programs and 

events that are specific to community needs at Kake.

Special Deals & Fee Waivers For Residents

Wings of Alaska offers residents of Alaska special rates, higher free baggage allowance, and 

waiver of certain fees and service charges that apply to travelers from out of state. These deals 

and discounts, which would be offered in Kake if Wings of Alaska is selected to provide EAS, 

are summarized on the table on the next page.
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Marketing & Customer Engagement Strategy

To promote its services, Wings of Alaska generally employs a mix of advertising, promotional 

events and customer engagement using social media. Illustrated below are some recent 

promotional activities undertaken by Wings of Alaska and which would be extended to include 

Kake if selected to provide EAS In that community.
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Wings of Alaska is the Carrier of Choice in Southeast Alaska

For the reasons cited above, along with great customer service delivered by our employee 

team, Wings of Alaska is proud to say we are the carrier of choice for an overwhelming majority 

of air travelers in Southeast Alaska. The chart below validates this preference by illustrating the 

share of total passengers that each scheduled commuter air carrier carried in competitive local 

markets from Juneau for the year ending December 31, 2013.4

Wings of Alaska would be honored to add Kake to its route system and is committed to 

providing the community with the same level of safety and service that earned, and allows us to 

maintain, our market leading position in Southeast Alaska.

 4 Most recent 12-month period of carrier T-100 data published by US DOT.
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Service Proposal

Aircraft

Wings of Alaska proposal is based on flights to Kake with turbine-powered Cessna Caravan 

aircraft that seat 9-passengers. The Cessna Caravan also offers a large amount of capacity for 

freight and mail, including 111 cubic feet and 1,090 pounds in the cargo pod. Wings of Alaska 

Caravans have “quick change” interiors, allowing for seats to be removed when passenger 

loads are 7 or less, with the resultant floor space used to carry additional cargo.

When weather and loads allow, Cessna 207 aircraft will be substituted on the route, reducing 

the required subsidy by approximately 45% per departure. The annual subsidy ceiling in this 

proposal is based on operations with the Cessna Caravan.

When weather permits and anticipated load (factoring in passengers, mail, and cargo) will allow, 

Wings of Alaska proposes fly to Kake using a smaller Cessna 206/207, with a 44% lower 

subsidy rate per departure.

Complimentary Ground Shuttle at Kake

Wings of Alaska is aware that the incumbent EAS operator provides complimentary shuttle 

service between the airport and home for customers in Kake. If selected to provide EAS at 

Kake, Wings of Alaska will continue to provide this service.

Frequency & Schedules

In Order 2014-3-15, the Department requested frequency at Kake consisting of 14 weekly 

roundtrips during the 21 week “peak” period and seven weekly roundtrips during the remaining 

31 weeks of the year. The operational and traffic projections, along with resultant subsidy 

request, is based on the Department’s request.
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Fares

In all of its markets, Wings of Alaska offers four types of fares that give customers the choice of 

realizing significant savings when travel plans are known in advance or paying a little extra for 

the convenience of complete flexibility to change flights and travel dates. Each of the fare types 

are summarized below: 

 FULL Flex: This is highest price point but provides our customers with total flexibility to 

change their travel plans or, if they choose, obtain a full refund without incurring a service 

charge or fees. 

 FREE 2 Flex: Lower than the FULL Flex fare, this fare permits unlimited changes to travel 

plans but is not refundable.

 Flex 4 FEE: Offering savings from the less restrictive FULL Flex and FREE 2 Flex fares, this 

fare is non-refundable and any changes to original travel plans require payment of a $50 

service charge.

 NO Flex: This is our lowest fare and offers significant savings from the FULL Flex and 

FREE 2 Flex fares, but changes to flight dates and times are not permitted once a ticket is 

sold. 

If selected to provide EAS at Kake, Wings of Alaska would employ a similar fare structure in the 

market. The table below summarizes the proposed price for each fare type, along with 

summarized rules and restrictions:

FARE TYPE FULL Flex FREE 2 Flex Flex 4 FEE NO Flex

Booking Class/Fare Basis Code Y B Q M

Advance Purchase (days prior to departure) 0 0-3 3-7 7-14

Change Fee $0 $0 $50 Not Allowed

Refundable Yes No No No

Fare Between Kake and Juneau 

(all fares are one way, including taxes and fees) $149 $129 $99 $79

Based on the above fares and assumptions with respect to percentage of customers using each 

fare type, Wings of Alaska projects that customers traveling between Juneau and Kake would 

pay an average of $108 each way, including all taxes and fees. For the customer, this will 

translate into an average savings of 28% (e.g., $42) for each one-way trip between Kake and 

Juneau compared to fares of the incumbent carrier.

5

 5

On April 18 2014, one-way fare quote of $149.99 was obtained from Alaska Seaplanes website booking engine on 

April 18, 2014 for travel from Juneau to Kake on May 15 and from Kake on May 21, 2014.

 
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Subsidy Request & Supporting Calculations

For the provision EAS at Kake, Wings of Alaska is requesting annual subsidy of $368,623 and 

on the basis of being awarded two-year contract. 

The requested subsidy level assumes a 97% completion factor on 14 weekly roundtrips during 

the 21 week “peak” period and 7 weekly roundtrips during the 31 week “off peak” period. The 

requested subsidy level also assumes the use Cessna Caravan 208 aircraft at a cost of $372

per departure. To ensure prudent use of EAS subsidies, when weather and anticipated load 

(factoring passengers, mail, and cargo) allow, Wings of Alaska would endeavor to utilize 

Cessna 206/207, with a lower cost per departure of $211 (savings to Department of 

approximately 44%). In this context, the subsidy requested represents a maximum annual 

amount and it highly likely that actual EAS billings submitted by Wings of Alaska would be 

proportionally lower.

The table on the next page summarizes the operating and economic assumptions that provide 

the basis for calculations supporting the requested level of subsidy in this proposal. We 

encourage the Department and community to contact us if there are questions related to the 

subsidy requirement calculations or any other part of this proposal.

Respectfully submitted,

Timothy F. Sieber

Executive Vice President

Seaport Airlines, Inc. d/b/a Wings of Alaska
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Operating Projections

KAE-JNU Sector Length (sm) 100

Scheduled Departures 1,022

Scheduled Block Hours 896.3

Projected Completion Factor 97.0%

Projected Completed Departures 991

Projected Completed Block Hours 869.4

Passenger Projections

Projected Passengers 2,554

Passengers per Departure 2.6

Projected Average Fare $108.00

Revenue Passenger Miles (RPMs) 255,400

Available Seat Miles (ASMs) 892,206

Projected Load Factor 28.6%

Financial Projections

Revenues

Passenger Ticket Revenue $275,832

Cargo Revenue $25,357

Mail Revenue $52,645

Total Revenue $353,834

Expenses

Flight Operations $47,817

Aircraft Lease $90,861

Fuel & Oil $204,220

Traffic Servicing & Reservations $48,895

Insurance $14,780

Maintenance $213,001

Sub-Total - Direct $619,573

Indirect $68,481

Total Expenses $688,054

Projected Operating Profit/(Loss) ($334,220)

Economic Return @ 5% $34,403

Required Subsidy $368,623.04

Subsidy per Departure - C208 $372

Peak Period Weekly Ceiling $10,412

Off Peak Period Weekly Ceiling $5,206

Subsidy per Passenger $144

Subsidy per Departure - C207 $207

EAS at Kake, Alaska

Subsidy Requirement Calculation for

SeaPort Airlines, Inc. dba Wings of Alaska