## BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.
July 11,2012 Essential Air Service at: 

### Adak, Alaska DOCKET DOT-OST- 2000-8556 Under 49 U.S.C. 

### § 41731 et.**~**



### Proposals to Provide Essential Air Service at Adak, Alaska

Tatonduk Outfitters Limited (TOL), dba Everts Air Cargo (Everts Airj hereby responds to.the Department ofTransportation's re-soliciting for proposals for subsidized Essential Air Service (EAS) at Adak, Alaskawiththe following proposals for freight andmail only.



## . . 

### The Order Re-soliciting Proposals for the next period ofthe EAS subsidy at Adak is attempting to receive alternative bids to what is currently proposed by the previous single respondent i.e. more lift and less requested subsidy. This is a tall order with the current known aircraft types currently being operatedin the state. Utilization ofAlaskaAirlines' combijettruly provides a beneficial service to the community ofAdak. Everts Air encourages the Department to negotiate with Alaska Airlines' to determine ifthere is a possibility for them to continue theirjet service to Adak for an additional period oftime.

TOL Adak EAS 2012 I of5 pages

### The following proposal is based on service to and from Adak (from Anchorage), using Everts Air's DC-9-33 cargojet. Operating Costs ofthe DC-9-33

Pilots & 

### Copilots Aircraft Fuel & Oil Extended Aircraft Fuel* Other Maintenance Depreciation Total Direct Indirect expenses
Total Expenses: PerHour $302 $3476 

### $ 1124

$221 $ 1638

$249 $7010 $1496 $8506 Per Trip Extended Costs 5.9 hours 52 flights I year 307 hours $1782 $ 92,664 $20,508 $ 1,066,416

$6632 $ 344,864 $1304 $67,808 $9664 $502,528 $1469 $76,388 $41,359 $ 2,150,668

$8826 $458,952 $50,185 $2,609,620 *The extended aircraft fuel is the additional cost offuel above the average for fuel purchases expected in Cold Bay and Adak based on the singular flight plan ofANC-CDB-ADK-ANC (does not include any other stops for subsidy calculations).


### Several proposals are listed below for the Community and the Department to consider. Everts Air 

### is also available for :further discussions or negotiation as needed, which may consjder alternate frequencies offlights. Everts Air'sproposed operations provides a weekly scheduled flight from Anchorage to Adak, and requests that the subsidy amount be payable (for each flight) beyond a one week billingperiod should a flight be delayed and not flown until the subsequent week. Everts Air is currently operating three DC-9-33s, and plans for adding more, so expects ample back up such that mechanical delays will beminimal and rarely felt by the customer. Enroute to Adak, a stop is planned in Cold Bay for fuel (ANC-CDB-ADK-). Depending on the need, a fuel stop may ormay not be made in Cold Bay on the return trip from Adak. Commerce inthe form ofa regular and published service schedule to ColdBay has not been included intherevenues in this proposal, but may develop into revenue that can be relied upon for inclusion and calculations offuture requested subsidy amounts in this EAS to Adak. Everts Air is agreeable to recalculate the billable amount ofthe subsidy against increased regularrevenues sooner than biennial ifthe department finds this beneficial. In such a Scenario, Everts Air in coordination withthe Department, will recalculate reliable expected ongoing revenues into the projected revenue, and where appropriate, reduce the billable amount to the department for the EAS subsidy. On subsequent recalculations, ifa previously reduced biJled subsidy amount does not hold, due to reduced revenues, than the billed subsidy amount may revert back up to or below TOLAdakEAS 2012 2 of5 pagesthe ceiling amount ofthe original proposal amount( stated in option#I or#2, which ever is chosen by the department) for EAS to Adak. In each proposal, Everts Airrequests that an additional stop be allowed to any unknown location en-rout to orfrom Adak for purposes ofadditional air service & commerce. Any additional stop will be planned such that time sensitive scheduled service is not delayed to orfrom Adak and will apply onlyto space that Adak commerce does not use. Adak's commerce will take priority over other business. This flexibility is intended to allow potential increased financial return onthis route with out detrimental impact to the Adak Community (As anexample: ANC-DLG-CDBADK-AKN-ANC). Ifthe Community and Departmentbelieve a second additional stop to and from Adak is detrimental to the Adak service, Everts Air will heedthe concern, and negotiate on that specific allowance. EvertsAir believes that utilizing the un-used space on the aircraft will have a potential benefit inreducing requested subsidy amounts in future EAS solicitations andresponse proposals. Everts Airis also receptive to developing a sharingprovision with the Department for revenues received from transporting commerce on the additional stop, such that substantial profitable operations maybe captured, and the subsidy billable amount reduced. The mechanics and formulas for this will have to be discussed and agreedto. Please note that exclusive use ofthe aircraft for Adakcommerce only, may diminish the likelihood offuture potential decreases in requested subsidy amounts. It is generally believed that there will be an up-swing in the coming years' traffic with an increase in government work andpotential private industry business development inAdak. However, it is uncertain exactlyhow much traffic may be transported as air freight at this time. These unknown revenues are not included inthe belowrevenue projections. Projectedrevenues have been calculated using historical data averages from the past three years (as provided inthe re-solicitation), and from speakingwith members ofthe community and other interested parties. Average past three year Freight IntoAdak, 315,000 Out from Adak 160,000 Averagepast three year Mail Into Adak Pri Non-Pri Out from Adak Non-Pri Total Projected Revenue

TOL Adak EAS 2012 55,000# 110,000 # 16,000# X X

X X

X $1.50 I# 

### $0.701#

$2.46 I# $1.57 I# $1.57

### I# =

= 

## =



## = $472,500 $112,000
$135,300 $172,700 $25,120 $ 917,620

3 of5 pagesThe following proposal options use revenue projections from the above estimates. Option#1. ( Withthe USPS Mail ) 52 round trip flights per year (scheduled day ofweek to be determined) with service between Anchorage to Adak back to Anchorage. Flights will be scheduled regularly and any delays will be re-scheduled to operate as quickly and timely as can be.
Total projected Expenses Profit element at 5% Total projected RevenueProjectednecessary subsidy for option#1 at a 100% completion $2,609,620 $ 130,481 - $ 917.620

$ 1,822,481 Annual amount of$1,822,481 divided by 52 weeks= $35,047.71 per flight. The amount ofrequestedEAS subsidy 

### inoption #1: Perflight $ 35,048.00 Annual amount $1,822,496.00 Biennial amount $3,644,992.00 Option#2 ( with out the USPS Mail ) Same as option#1 except 

### with nomail revenues included. 52 round trip flights peryear (scheduled day ofweek to be determined) with service betweenAnchorage to Adakhack to Anchorage. Flights will be scheduled regularly and any delays will be re-scheduled to operate as quickly and timely as canbe. Total projected Expenses Profit element at 5% Projected FreightRevenue Projected necessary subsidy for option #2 at 100% completion $2,609,620 

### $ 130,481 $ 584,500 $ 2,155,601. Annual amount of$2,155,601 divided by 52 weeks= $41,453.87 per flight The amount ofrequested EAS subsidy inoption#2: Per flight 

### $ 41,454.00 Annual amount $2,155,608.00 Biennial amount $4,311,216.00

TOL Adak EAS 2012 4 of5 pagesTherequested subsidy amountwill differ depending on the dispatch ofthe USPS Mail. Option #1 includestransportation ofthe USPS mail, and option 

### #2 does not include transportation ofthe USPS mail. The USPS normally requires a 28 day notice ofscheduling prior to mail dispatch, buthas also electedto dispatchmail with less notice whenthey deemfitto do so. Note that the USPS has also on occasion neglectedto dispatch mail in a timely manner following the 28 day advance notification. For this reason, Everts Airoffers two options thatmay be used in combination, or separately. Everts Air 

### will begin service to Adak depending onwhich Optionis chosen and agreedto. Ifthe Department requests that Everts Air begin scheduled air service to Adakpriorto the USPS dispatching mail to the flight, thenthe subsidy amountwouldbe that indicated in Option

### #2 (withoutthe USPS 

### Mail). Ifthe Department chooses option #1, than the scheduled service 

### will start 

### incoordination with the USPS dispatching the mail to the Everts Air flight, taking into consideration the Post Office's 28 day filed schedule notice requirement. Public notice and advertising will advise thepublic ofthe newservice so that freight may find 

### its way onto the scheduled flights to andfrom Adak.
Tatonduk Outfitters Limited certifies that operations are conductedin compliance with Department regulations regarding drug-free workplaces, nondiscrimination and all regulations·goveming lobbying activities. Sincerely, Tatonduk Outfitters Limited dba 

### Everts Air Cargo 5525 Airport Industrial Rd. 

# FairbaW;(U;:cg**~** RobertRagar ·

# ~ Manager Contracts rragar@evertsair.com 907-450-2300, ext 349

TOL Adak EAS 20I 2 5 of5 pages