. ^ i- V 

Before the 

EAS & Domestic Analysis Division, X-53 

Office of Aviation Analysis, Room 6401 

Department of Transportation 

400 7th Street, S.W. 

Washington, D.C. 20590 

In the Matter of: 

ESSENTIAL AIR SERVICE AT 

RAMPART, ALASKA Docket OST 2008-0201 

Proposal to Provide Essential Air Service at Rampart, Alaska 

Warbelow's herby submits its proposal to continue subsidized service to Rampart, Alaska 

for a new two-year period, beginning October 1, 2010. 

While the runway conditions at Rampart will easily support VFR multi-engine aircraft 

(there is no IFR approach or reported weather) Warbelow's is currently providing service with 

VFR single engine Cessna 206 aircraft. During the previous current subsidy period negotiation, 

the village indicated a preference for more frequent service with a single engine aircraft rather 

than less frequent service with a multi-engine aircraft. 

This proposal is therefore based on the current three days per week service in a single 

engine aircraft with four insured passenger seats, the balance of the capacity reserved for mail 

and freight. 

Revenue projections are based on the lagging four quarters of data through December 31, 

2009. Our cost data is based on reported F2 data for the same period. 

The proposed service is direct to Rampart from Fairbanks, and return. No upline or 

downline points are contemplated. 

Mail Rates 

Order 2010-3-18 set new mail rates that we have used to calculate mail revenue over the 

subsidy period: 

RTM $13.4782 
Terminal/Ton Enplaned $745.01 

Fairbanks-Rampart 82 miles 

Therefore the P-135 rate for Fairbanks/Rampart is $0.93 /pound and we have not 

projected any change over the subsidy period. 

Current passenger fares and cargo rates are used in these calculations. These reflect no 

change over the current subsidy period. 

Schedule 

The following schedule operated three days per week has been published in the OAG: 

From Fairbanks to Rampart 

Back to Top 

One- RoundFlight Depart Arrive Frequency Stops way Trip 

Adult Adult 

330 9:45 am 10:50 am Tues, Th, Sat 0 $101 $202 

From Rampart to Fairbanks 

Back to Top 

One- RoundFligtit Depart Arrive Frequency Stops way Trip 

Adult Adult 

330 10:55 am 12:00 pm Tues, Th, Sat 0 $101 $202 

One-way 

Child/Senior 

$91 

One-way 

Child/Senior 

$91 

Round-Trip 

Child/Senior 

$182 

Round-Trip 

Child/Senior 

$182 

Based on historical flight times, the actual block hours to complete the flight are 1.67 hours x 3 

flights per week x 52 weeks per year = 260 hours. 

Projected Demand 

Passenger and cargo traffic in Rampart has continued to decline slightly as the population 

has declined over the previous subsidy period. Mail volume has increased. Our revenue 

projections assume no change over the subsidy period. 

Projected Expenses 

Actual costs as reported on our F2 have continued to increase over the last two years, 

with the exception of hull and liability insurance which is at the bottom of a soft market. Fuel 

costs have been on an upward trend over the past year after declining, and we expect may 

continue to increase as the economy recovers from recession. We have not projected any fuel 

cost increases. 
Requested Subsidy Calculation 

Revenue 

Passenqer Revenue 

Rampart 

Less Passenger Tax 7.5% 

Passenger Total 

Carao Revenue 

Rampart 

Less Freight Tax 6.25% 

Cargo Total 

Mail 

Revenue 

Rampart 

Mail Total 

Total Annual Revenue 

Expenses 

Depre/Rental 80.00 

Allocated Block Hours 

Direct Expense 

Pilot & Co-pilot 

Fuel & Oil 

Other 

Maintenance 

Depreciation/Rental 

Total Direct Expense 

2009 

Pax 

234 

Pounds 

12860 

Pounds 

29420 

Fare Totals 

Indirect Expense 

260 hr@ $135.51 pr hr 

Total Operating Cost 

Profit Element of TOC = 0.10 

Inbound Traffic Marketing Expense 

Total Economic Cost 

Annual Subsidy need at 100% Completion 

Two Year Total Subsidy need at 100% Completion 

101.00 

Rate 

0.49 

Rate 

0.93 

Cessna Rate per Block 

Hour 

23,634.00 

1,648.88 

21,985.12 

6,301.40 

370.67 

5,930.73 

27,360.60 

27,360.60 

$55,276.45 

260 

69.54 

51.77 

16.25 

131.41 

80.00 

18080.40 

13460.20 

4225.00 

34166.60 

20800.00 

$90,732.20 

35232.60 

125964.80 

12596.48 

14394.00 

$152,955.28 

$97,678.83 

$195,357.66 
This proposal reflects a decrease in the requested subsidy over the previous period. The 

decrease reflects a net increase in revenue resulting from a decrease in passenger and freight 

revenue, but an increase in mail revenue. In addition our actual expenses have decreased on a 

block hour basis over that previously projected. 

In the event that weather conditions require, or the community requests service with 9 

seat Piper Chieftain aircraft, we offer that service as well on a twice per week basis at the same 

subsidy rate per week as the three day per week service with the Cessna 206. 

We thank you for your consideration of this proposal and hope to be able to continue 

service to the Rampart community for another two year period. 

Sincerely, 

Warbelow's Air Ventures, Inc. 

3758 University Avenue South 

Fairbanks, Alaska 

!^. r 

Arthur Warbalow, President 

art@warbelows.com 

(907) 378-7203