Before the United States Department of Transportation

Washington, DC

July 11, 2014

Essential Air Service at

MERCED, CALIFORNIA Docket OST-1997-3521

VISALIA, CALIFORNIA Docket OST-2004-19916

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

This document contains Great Lakes Aviation, Ltd.'s response to Order Requesting 

Proposals 2014-5-9.

Great Lakes Aviation, Ltd. is pleased to submit this proposal, as an inseparable package,

for Merced and Visalia, California.

Our proposals contemplate conveniently timed connecting services to our Los Angeles (LAX) 

hub, whereby passengers may utilize our code-share agreements with United Airlines. Local 

service will be marketed and priced utilizing the Great Lakes (ZK) brand and reservations 

system. Additionally, Great Lakes maintains interline ticketing and baggage agreements with 

the majority of the other carriers serving LAX, including interline e-ticketing agreements with 

American Airlines, Delta Airlines, Frontier Airlines and United Airlines . All of which will offer 

passengers traveling to and from these communities supplemental access to the domestic and 

international air transportation system.

The proposed service is being offered utilizing pressurized, twin-engine Beech 1900D aircraft 

flown by two pilots. 

New FAA pilot qualification rules have created an industry-wide pilot shortage which has had an 

acute impact on Great Lakes. These new rules mandated that first officers obtain an Airline 

Transport Pilot certification (“ATP”) prior to being qualified to perform crewmember duties in 

scheduled airline passenger service under FAR Part 121 regulatory requirements. A key factor 

to enable a pilot to receive an ATP certificate is the accumulation of 1,500 flight hours. 

On March 18th of this year, Great Lakes received from the FAA new operations specifications 

allowing us to hire pilots under it's FAR Part 121 Certificate utilizing FAR Part 135 regulatory 

hiring requirements. This allows our new hire pilots to operate the Beech 1900D aircraft in a 

nine seat configuration and will enable Great Lakes to restore pilot staffing levels while 

maintaining FAR Part 121 hiring, training and maintenance standards. 

Great Lakes' "base case" proposals assume that we will be limited to nine available seats for 

our Beechcraft 1900D aircraft. 
Questions and comments may be referred to:

Michael O. Matthews

Chief Financial Officer

Great Lakes Aviation, Ltd.

1022 Airport Parkway

Cheyenne, WY 82001

(307) 432-7000

Great Lakes recognizes the temporary challenges many EAS communities are experiencing in 

complying with the 10 enplanement per day criteria as prescribed by the FAA Modernization 

and Reform Act of 2012. In this regard, we share the views expressed by the leadership of the 

Merced community and it is Great Lakes' belief that the regulatory relief for small community air 

service must be granted in the near future. Excessive subsidy requirements will force 

communities to loose EAS service eligibility as available seats are being dramatically reduced 

due to arbitrary limitations on aircraft seating configurations. Great Lakes’ stands ready to 

participate in creative solutions to assist small communities in their efforts to remain in the 

National Air Transportation System.

In addition to the "base case" proposal, Great Lakes is submitting an indicative proposal for 

regional jet service for both Merced and Visialia to our Denver hub. We are prepared to 

commit, with the full marketing support of the communities and the regulatory support of federal 

agencies, to upgrading the aircraft to 37 seat or larger regional jets operating two roundtrips per 

weekday and two roundtrips over the weekend period. Although this service may not be 

immediately available, it is Great Lakes' intent to pursue this level of service within the term of 

the new two year period.
Table of Contents:

Subsidy Passen

Bid Service Point(s) Hub Served Round Trips Equipment Requirement Forec

1 Merced, California Los Angeles 2 1900D - 9 seat $2,779,116 

7,00

2 Visalia, California Los Angeles 2 1900D - 9 seat $2,145,917 

7,50

$4,925,033 14,50

1 Merced, California Denver 2 ERJ $3,497,323 

27,50

2 Visalia, California Denver 2 ERJ $3,497,750 

27,50

$6,995,073 55,00
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Merced, California to Los Angeles (LAX)

Two Round Trips - B1900 - 9 seat - current schedules should be used as sample pattern of service

(at 98 percent completion)

Departures: 1,227

Block Hours: 1,534

Revenue Passenger Miles: 1,820,000

Available Seat Miles: 2,871,180

Operating Revenues:

Passenger: MCE-LAX 7,000 psgrs at $92.27 $645,890

Other: (at 0.62% of passenger revenue) $4,005

Total Operating Revenues: $649,895

Operating Expenses:

Direct: Aircraft and Hull Insurance $365,710

Fuel and Oil $911,917

Flying Operations $302,565

Maintenance $483,092

Total Direct Expenses: $2,063,284

Total Indirect Expenses: $1,202,440

Total Operating Expenses: $3,265,724

Operating Loss ($2,615,829)

Profit Element (5.0% of Total Operating Expenses) $163,286

Annual Compensation Requirement: $2,779,116

 All Merced - Los Angeles - Merced service is Non-Stop

 This Proposal is submitted with no upline scheduling restrctions.
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Visalia, California to Los Angeles (LAX)

Two Round Trips - B1900 - 9 seat - current schedules should be used as sample pattern of service

(at 98 percent completion)

Departures: 1,227

Block Hours: 1,227

Revenue Passenger Miles: 1,305,000

Available Seat Miles: 1,921,482

Operating Revenues:

Passenger: VIS-LAX 7,500 psgrs at $89.12 $668,400

Other: (at 0.62% of passenger revenue) $4,144

Total Operating Revenues: $672,544

Operating Expenses:

Direct: Aircraft and Hull Insurance $365,710

Fuel and Oil $719,515

Flying Operations $242,014

Maintenance $430,051

Total Direct Expenses: $1,757,290

Total Indirect Expenses: $926,959

Total Operating Expenses: $2,684,249

Operating Loss ($2,011,705)

Profit Element (5.0% of Total Operating Expenses) $134,212

Annual Compensation Requirement: $2,145,917

 All Visalia - Los Angeles - Visalia service is Non-Stop

 This Proposal is submitted with no upline scheduling restrctions.
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Merced, California to Denver (DEN)

Two Round Trips - ERJ

(at 98 percent completion)

Departures: 1,227

Block Hours: 2,760

Revenue Passenger Miles: 24,062,500

Available Seat Miles: 39,724,125

Operating Revenues:

Passenger: MCE-DEN 27,500 psgrs at $194.72 $5,354,800

Other: (at 0.62% of passenger revenue) $33,200

Total Operating Revenues: $5,388,000

Operating Expenses:

Direct: Aircraft and Hull Insurance $370,772

Fuel and Oil $2,574,255

Flying Operations $1,045,819

Maintenance $1,478,659

Total Direct Expenses: $5,469,505

Total Indirect Expenses: $2,992,707

Total Operating Expenses: $8,462,212

Operating Loss ($3,074,212)

Profit Element (5.0% of Total Operating Expenses) $423,111

Annual Compensation Requirement: $3,497,323

 All Merced - Denver - Merced service is Non-Stop

 This Proposal is submitted with no upline scheduling restrctions
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Visalia, California to Denver (DEN)

Two Round Trips - ERJ

(at 98 percent completion)

Departures: 1,227

Block Hours: 2,760

Revenue Passenger Miles: 23,045,000

Available Seat Miles: 38,044,362

Operating Revenues:

Passenger: VIS-DEN 27,500 psgrs at $194.97 $5,361,675

Other: (at 0.62% of passenger revenue) $33,242

Total Operating Revenues: $5,394,917

Operating Expenses:

Direct: Aircraft and Hull Insurance $370,772

Fuel and Oil $2,574,255

Flying Operations $1,045,819

Maintenance $1,478,659

Total Direct Expenses: $5,469,505

Total Indirect Expenses: $2,999,702

Total Operating Expenses: $8,469,207

Operating Loss ($3,074,290)

Profit Element (5.0% of Total Operating Expenses) $423,460

Annual Compensation Requirement: $3,497,750

 All Visalia - Denver - Visalia service is Non-Stop

 This Proposal is submitted with no upline scheduling restrctions