BEFORE THE 

DEAPRTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

______________________________ 

 ) 

Essential Air Service at ) 

 ) 

EXCURSION INLET ) DOCKET OST-2002-12014 

 ) 

 AND ) AND 

 ) 

 KAKE, ALASKA ) DOCKET OST-2008-0217 

 ) 

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

______________________________) 

MOTION TO REOPEN 

SELECTION OF CARRIERS 

Answers to motions may be filed by any party to the proceeding in support of or in 

opposition to the motion within seven (7) business days after a motion is served. 

Communications with respect to this document should be addressed to: 

Mike Loverink Hank Myers 

Owner Principal Consultant 

Air Excursions, LLC M.T.C. 

1873 Shell Simmons Drive P.O. Box 7341 

Juneau, AK 99801 Bellevue, WA 98008-1341 

(907) 789-5591 425-641-8243 

airex@ptialaska.net hank@mtcworld.com

February 2, 2010 
1

BEFORE THE 

DEAPRTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

______________________________ 

 ) 

Essential Air Service at ) 

 ) 

EXCURSION INLET ) DOCKET OST-2002-12014 

 AND ) AND 

 KAKE, ALASKA ) DOCKET OST-2008-0217 

 ) 

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

______________________________) 

MOTION TO REOPEN 

SELECTION OF CARRIERS 

Air Excursions, LLC (Air Ex) hereby moves to reopen the selection of carriers to provide 

Essential Air Service to Excursion Inlet and Kake, Alaska. In Order 2009-8-16, the 

Department selected Alaska Juneau Aeronautics, d/b/a Wings of Alaska (AJA) to provide 

Essential Air Service to Excursion Inlet and Kake. At Kake, AJA proposed to provide 

fourteen round trips per week between Juneau and Kake with nine-passenger, 3,000 

pound payload Cessna Caravan turboprop aircraft. 

Air Ex moves to reopen the selection of carriers because AJA has failed to provide the 

service proposed in its bid, it has collected federal subsidy for services it did not provide, 

it does not have sufficient Caravan aircraft to provide the service proposed, and its 

degradation of service has failed to meet the needs of the market as evidenced by the 

significant decrease in the number of passengers (but not freight or mail) in the market. 

Air Ex requests that the Department solicit new Essential Air Service proposals in the 
2

markets which accurately reflect the level of service each carrier will provide, and the 

associated level of subsidy required. As shown below, Air Ex is fully ready, willing and 

able to provide the required Essential Service in the markets using its own aircraft or in 

conjunction with other certificated carriers. 

AJA HAS FAILED TO DELIVER ON ITS SERVICE PROPOSAL

When it proposed its service, AJA said it might use the smaller Cessna 207 as available, 

but based its revenue and expense projections entirely on the Cessna Caravan. T-100 

reports for the twelve months ended November 30, 2009 (Appendix A), AJA used the 

Caravan it proposed and based its subsidy on for less than 45% of the flights in the 

market. During the summer peak-traffic season, when the vast majority of schedules are 

operated, AJA used the Caravan only 35% of the time. During the same months it 

operated roughly a third of its subsidized flights in the proposed Caravan, it operated 

55% of its unsubsidized service to Haines with Caravans, and over 70% of its 

unsubsidized service to Skagway with Caravans. In short, AJA used the Caravans 

proposed for Kake service to provide capacity in larger monopoly markets. 

AJA BASED ITS EAS BILLINGS ON SERVICE IT HAS NOT PROVIDED

AJA clearly had the ability and the aircraft to provide service consistent with its EAS 

proposal, but did not. Rather than delivering on its proposal, its operated the three 

Caravan’s then in its fleet wherever it was most profitable to do so. AJA’s weight load 
3

factors were higher for the Caravan than for the 207. While the Caravan load factor at 

Kake was only slightly higher than for the 207, it must be remembered that the Caravan 

was only used on the 45% of the flights with the highest demand. In the larger JuneauSkagway market, the average summertime load factor in the Caravan was 47.7% 

compared to only 37.9% with the 207. 

The use of the C-207 on the majority of the flights resulted in a significant overstatement 

of expected expenses. F-2 reports and the results of the Intra-Alaska Bush Mail Rate 

Investigation shows that the C-207 costs 40% or more less than the Caravan for direct 

operating expenses. Because AJA’s indirect expenses are based on its direct expenses 

plus a consistent markup, it saves 40% or more for every hour it uses its C-207’s in place 

of the Caravan. Reducing 55% of AJA’s actual operations by 40% 

($1,014,449.78*.55*.40) shows that Wings has collected $223,179 more than it should 

have for expenses by substituting aircraft. 

AJA additionally padded its projected expenses by greatly overestimating the amount of 

time required to fly the Juneau-Kake route. On Appendix B of its proposal, AJA 

estimates 919.8 block hours would be required to operate the 505 round trips proposed. 

This yields an expected average block time of 109.28 minutes per round trip. According 

to the T-100 reports of AJA, the actual average round trip block time for its Juneau-Kake 

service was 93.54 minutes. This is about 16 minutes less than charged, or 17% greater 

expense. 
4

Finally, AJA’s current fare in the market is about $5.00 more before taxes than it 

proposed in its revenue forecast. 

AJA LACKS THE CARAVAN’S NECESSARY TO OPERATE THE SERVICE

As noted, in the 12 months ended November, 2009, AJA operated only 45% of its Kake 

service with Cessna Caravans. This represented 12.7% of the scheduled use of the three 

Caravans. Since then, AJA has lost the use of two of the three Caravans. One leased 

aircraft, N331AK, was removed from service when it was found to have been operated 

under a maintenance program not approved for AJA. That aircraft is currently listed for 

sale. (See http://www.controller.com/listingsdetail/aircraft-for-sale/CESSNACARAVAN-208B-GRAND/1999-CESSNA-CARAVAN-208B-GRAND/1160273.htm) 

1999 CESSNA CARAVAN 208B GRAND 208B0739 US $950,000 AK, US 

For Sale - $950,000, N331AK; 8700 TT; IFR; CAPSTONE AVIONICS by 

CHELTON, WITH ADS-B. 

Aero Twin, Inc. 

Phone: (727)709-1159 

Fax: (210)688-0210 

Updated: 1/26/2010 6:53:00 AM

Photo(s)

Send A Message

Add To Aircraft Of Interest

 
5

The second aircraft, N72KA, was returned to the owner (Kenmore Aviation) in 

December at the end of its lease. 

In the 12 months ended November, 2009, AJA used the Caravan to operate 3,042 

scheduled hours of service with three aircraft. 2,655 of these hours were in markets other 

than Kake. Clearly AJA is unable to meet its EAS obligations at Kake with only one 

Caravan. 
6

AJA HAS DEGRADED SERVICE AT KAKE

In the 12 months ended November, 2007 L.A.B. Flying Service transported 4,071 

passengers between Juneau and Kake, as well as 194,053 pounds of freight and mail. 

Mail and freight, indicators of economic activity, dropped to a total of 186,242 in the 12 

months ended November, 2009, or 4%. In the same span, passenger traffic dropped to 

2,376 or 42%. Whether it is because of fewer seats being offered, substitution with less 

desirable aircraft or higher passenger fares, as a result of AJA’s service passenger traffic 

dropped ten times as much as freight and mail in comparison to L.A.B.. 

SUMMARY

AJA, because it was the sole applicant, has enjoyed a very profitable and convenient run 

as an Essential Air Service provider. Even before it was selected it had overestimated the 

time necessary to provide the service by 17%, thereby overestimating its recompensed 

expense by that amount. Once it gained the contract, it raised fares and used the Caravan 

only 45% of the time. While AJA has gained, the Kake market has suffered. Some loss 

of traffic is reasonable given the economic hardships (mail and freight dropped 4%), but 

a 42% loss of traffic (nearly half) cannot be explained by external conditions. AJA has 

taken advantage of the government and the EAS markets. Now that it has lost two-thirds 

of its Caravan fleet, it can hardly be expected to improve its performance. 
7

CERTIFICATION 

The contents of this application and the attached exhibits are true and correct to the best 

of my knowledge and belief. Pursuant to title 18, United States Code section 1001, I, in 

my individual capacity and as the authorized representative of the applicant, have not in 

any manner knowingly and willfully falsified, concealed or failed to disclose any material 

fact or made any false, fictitious, or fraudulent statement or knowingly used any 

documents which contain such statements in connection with the preparation, filing or 

prosecution of the application. I understand that an individual who is found to have 

violated the provisions of 18 U.S.C. section 1001 shall be fined not more than $10,000 or 

imprisoned not more than five years, or both. 

WHEREFORE, Air Excursions, LLC respectfully moves to reopen the selection of 

carriers to provide Essential Air Service to Excursion Inlet and Kake, Alaska. Air X 

actually has more aircraft in its Juneau fleet than AJA does, including a multi-engine 

Piper Navajo which is instrument approved, and, unlike the Caravan, can be operated in 

known icing conditions. Air X holds a certificate of public convenience and necessity 

from the D.O.T., and is fit, willing and able to provide the Essential Service in question. 

Respectfully submitted, 

AIR EXCURSIONS, LLC

_________________________ 

By Hank Myers 

February 2, 2010 
8

CERTIFICATE OF SERVICE 

I hereby certify that I have this day served a copy of the foregoing Motion to Reopen 

upon the following person by Priority Mail. 

_________________________ 

Hank Myers 

February 2, 2010 

Rob McKinney 

Chief Operating Officer 

Alaska Juneau Aeronautics, Inc. 

d/b/a Wings of Alaska 

d/b/a SeaPort Airlines 

7505 NE Airport Way 

Portland, OR 97218 
1

Appendix A 

Page 1 of 2 

ALASKA JUNEAU AERONAUTICS 

T-100 SEGMENT REPORTS 

12 MONTHS ENDED NOVEMBER, 2009

YR MO ORI DEST CARR A/C # DEP PAX FRT MAIL BLOCK FLT 

2008 12 JUNEAU KAKE AJA 0 35 20 19 1878 3597 965 917

2008 12 JUNEAU KAKE AJA 4 16 13 31 2484 5810 580 537

2009 1 JUNEAU KAKE AJA 0 35 9 18 985 1196 472 440

2009 1 JUNEAU KAKE AJA 0 35 1 0 81 272 52 49

2009 1 JUNEAU KAKE AJA 4 16 7 19 1649 3614 339 313

2009 2 JUNEAU KAKE AJA 0 35 11 13 690 1795 567 527

2009 2 JUNEAU KAKE AJA 4 16 13 56 3409 5702 595 548

2009 3 JUNEAU KAKE AJA 0 35 30 43 2316 5202 1613 1525

2009 3 JUNEAU KAKE AJA 4 16 5 10 853 1829 227 210

2009 4 JUNEAU KAKE AJA 0 35 35 61 3380 3500 1826 1723

2009 4 JUNEAU KAKE AJA 4 16 14 50 1178 3007 641 597

2009 5 JUNEAU KAKE AJA 0 35 63 83 3512 5583 3414 3129

2009 5 JUNEAU KAKE AJA 4 16 10 33 572 2072 460 414

2009 6 JUNEAU KAKE AJA 0 35 41 59 2713 4163 2223 2077

2009 6 JUNEAU KAKE AJA 4 16 31 110 2439 2109 1536 1409

2009 7 JUNEAU KAKE AJA 0 35 47 70 2565 5180 2599 2406

2009 7 JUNEAU KAKE AJA 4 16 24 72 2069 2836 1067 973

2009 8 JUNEAU KAKE AJA 0 35 25 23 1886 2016 1384 1301

2009 8 JUNEAU KAKE AJA 4 16 36 106 2213 5517 1782 1639

2009 9 JUNEAU KAKE AJA 0 35 8 21 731 734 479 439

2009 9 JUNEAU KAKE AJA 4 16 48 86 3727 6369 2575 2295

2009 10 JUNEAU KAKE AJA 0 35 2 4 87 266 120 108

2009 10 JUNEAU KAKE AJA 4 16 30 113 5017 8429 1512 1387

2009 11 JUNEAU KAKE AJA 0 35 10 17 876 1772 592 552

2009 11 JUNEAU KAKE AJA 4 16 16 39 2309 4467 813 765

 549 1156 49619 87037 28433 26280

 CARAVAN 4 16 247 725 27919 51761 12127 11087

 C-207 0 35 302 431 21700 35276 16306 15193
2

Appendix A 

Page 2 of 2 

ALASKA JUNEAU AERONAUTICS 

T-100 SEGMENT REPORTS 

12 MONTHS ENDED NOVEMBER, 2009

2008 12 KAKE JUNEAU AJA 0 35 19 33 339 1115 963 918

2008 12 KAKE JUNEAU AJA 4 16 13 39 889 1100 533 501

2009 1 KAKE JUNEAU AJA 0 35 9 12 278 270 440 409

2009 1 KAKE JUNEAU AJA 0 35 1 1 0 66 54 51

2009 1 KAKE JUNEAU AJA 4 16 7 18 392 524 283 262

2009 2 KAKE JUNEAU AJA 0 35 11 10 287 167 526 496

2009 2 KAKE JUNEAU AJA 4 16 13 44 325 729 575 543

2009 3 KAKE JUNEAU AJA 0 35 29 38 392 869 1369 1283

2009 3 KAKE JUNEAU AJA 0 35 1 1 0 15 58 56

2009 3 KAKE JUNEAU AJA 4 16 5 28 167 669 202 188

2009 4 KAKE JUNEAU AJA 0 35 35 70 508 659 1727 1636

2009 4 KAKE JUNEAU AJA 4 16 15 48 356 424 669 623

2009 5 KAKE JUNEAU AJA 0 35 62 103 4175 905 3156 2941

2009 5 KAKE JUNEAU AJA 4 16 9 39 175 406 405 377

2009 6 KAKE JUNEAU AJA 0 35 43 62 2541 856 2154 2032

2009 6 KAKE JUNEAU AJA 4 16 30 83 3756 477 1335 1231

2009 7 KAKE JUNEAU AJA 0 35 47 71 1743 1407 2488 2345

2009 7 KAKE JUNEAU AJA 4 16 23 61 1579 320 1003 921

2009 8 KAKE JUNEAU AJA 0 35 27 28 972 427 1391 1305

2009 8 KAKE JUNEAU AJA 4 16 37 94 2013 960 1670 1547

2009 9 KAKE JUNEAU AJA 0 35 7 15 119 219 335 313

2009 9 KAKE JUNEAU AJA 4 16 48 90 3448 1254 2241 2097

2009 10 KAKE JUNEAU AJA 0 35 2 7 70 4 104 95

2009 10 KAKE JUNEAU AJA 4 16 30 125 6326 1260 1339 1250

2009 11 KAKE JUNEAU AJA 0 35 10 26 329 256 470 441

2009 11 KAKE JUNEAU AJA 4 16 16 82 2633 853 676 638

 549 1228 33812 16211 26166 24499

 CARAVAN 4 16 246 751 22059 8976 10931 10178

 C-207 0 35 303 477 11753 7235 15235 14321

 

 TOTALS 1098 2384 83431 103248 54599 50779

 CARAVAN 44.90% 4 16 493 1476 49978 60737 23058 21265

 C-207 55.10% 0 35 605 908 33453 42511 31541 29514
3

Appendix B 

Page 1 of 1

ALASKA JUNEAU AERONAUTICS 

T-100 MARKET REPORTS 

12 MONTHS ENDED NOVEMBER, 2009 

YR MO ORI DEST CARR PAX FRT MAIL 

2008 12 JUNEAU KAKE AJA 50 4362 9407

2009 1 JUNEAU KAKE AJA 37 2715 5082

2009 2 JUNEAU KAKE AJA 69 4099 7497

2009 3 JUNEAU KAKE AJA 53 3169 7031

2009 4 JUNEAU KAKE AJA 111 4558 6507

2009 5 JUNEAU KAKE AJA 116 4084 7655

2009 6 JUNEAU KAKE AJA 169 5200 6568

2009 7 JUNEAU KAKE AJA 142 4634 8016

2009 8 JUNEAU KAKE AJA 124 3885 7072

2009 9 JUNEAU KAKE AJA 107 4458 7103

2009 10 JUNEAU KAKE AJA 117 5104 8695

2009 11 JUNEAU KAKE AJA 56 3185 6239

2008 12 KAKE JUNEAU AJA 72 1228 2215

2009 1 KAKE JUNEAU AJA 31 670 860

2009 2 KAKE JUNEAU AJA 54 612 896

2009 3 KAKE JUNEAU AJA 67 559 1553

2009 4 KAKE JUNEAU AJA 118 864 1083

2009 5 KAKE JUNEAU AJA 142 4350 1311

2009 6 KAKE JUNEAU AJA 145 6297 1333

2009 7 KAKE JUNEAU AJA 132 3322 1727

2009 8 KAKE JUNEAU AJA 119 2937 1329

2009 9 KAKE JUNEAU AJA 105 3567 1473

2009 10 KAKE JUNEAU AJA 132 6396 1264

2009 11 KAKE JUNEAU AJA 108 2962 1109

 TOTALS 2376 83217 103025