EssentialAirServiceServiceatMcCookNEDocketOST1997‐3005under49U.S.C.41731etseq.ALASKAJUNEAUAERONAUTICS,INC.DBAWINGSOFALASKA&SEAPORTAIRLINESPROPOSALTOPROVIDEESSENTIALAIRSERVICEATMcCook,NEDOCKETMarch19,2010OST1997‐3005AlaskaJuneauAeronautics,Inc.dbaSeaPortAirlines7505NEAirportWay,Portland,OR.97217CompanOverviewySeaPortAirlinesisAeronautics,certifiedSeaPortAirlinesadbaofAlaskaJuneauAeronautics,anFAAPart135certifiedscheduledairserviceproviderwith27yearsexperienceincommercialaviation.Ourcompany’sfoundationisbuiltonefficientandreliableservicetoruralcommunities.BothSeaPortAirlinesandoursistercompanyWingsofAlaskacurrentlyoperateroutesundertheEssentialAirServiceprogram,aswellasun‐subsidizedoperationst bli h donestablishedcompetitiveroutes.WingsofAlaskaisthepremierairlineservingSoutheastAlaska.Providingscheduledpassengerservice,fastfreightandcharterservicebetweenJuneauandSkagway,Haines,Hoonah,Gustavus,andKake,andweeklyflightstoExcursionInlet.WingsofAlaskagrewinreputationandsize,becomingoneofthemostsuccessfulregionalaircarriersinAlaska,nowcomprisedofafleetofsevenplanesfromCessna206and207’stoCessnaGrandCaravans.HITTHESKYRUNNING ®:SeaPortAirlinescurrentlyoperatesRUNNING.®SeaPortAirlinescurrentlyoperates36dailyscheduledflightsinfiveNorthwestcitiesand24dailyscheduledflightsinfiveMid‐Southcities.Soonwewillofferanadditional6dailyflightsintheWest.MidEAS 6RoutesSpeculative 1RouteStateContractual2RoutesSeaPortAirlinesBringingSoutheastTogether:WingsofcurrentlyBringingSoutheastAlaskaCloserTogether:Alaskacurrentlyoperates36dailyscheduledflightstosevenSoutheastAlaskacities.WingsofAlaskaEAS 2RoutesSpeculative5RoutesOur AircraftSeaPortAirlinesoperates7PilatusPC‐12aircraft.ThePC‐12isaSwiss‐builtpressurizedturbopropaircrafttypicallyfoundincorporateaviation,bututilizedbySeaPortAirlinesinanineseatcommuterconfigurationTheworld'sbestsellingu aSeaPortAirlinesinanineseatcommuterconfiguration.Theworld sbest‐sellingturbinebusinessaircraft,stillinproductiontoday,thePC‐12canshuttleyouwithcomfortandspeedwitheachseatbothawindowandaisle.PilatusmanufactureturbopropaircraftPilatus,theworldmarketleaderinthemanufactureofturbopropaircraftandtheonlySwisscompanytodevelop,produceandsellaircraftandtrainingsystemsallovertheworld.http://www.pilatus‐aircraft.comRight-Sized for McCookSeaPort proposesthreedirectroundtripsperdaybetweenMcCookandDenver.Thisservicelevelwilloffermorethanenoughinventorytoprovideforthehistoricaltrafficofthelastseveralyears,whilekeepingcapacity“rightsized”andavoidingunnecessaryfloodingresultingkeepingcapacity‐avoidinganunnecessaryfloodingofemptyseatsandresultinghigheroperatingcosts.PleaseseeExhibit“2”fordetails.SeaPort hasconstructedthescheduletomaximizetrafficflowwithflightsmorning,middayandevening.SeaPort believesthattrafficwillincreaseinyeartwoasthespeedandconvenienceofourservicebecomemorefamiliartotheresidentsofthesecommunities.Inaddition,adailyplaneovernightinMcCookwillprovereliabletotheaboveschedulerecommendationsimilartotheovernightsuccessSeaPort experiencesintheNorthwest.Wearethereforeabletoofferthesecommunitiesthebestpossiblefitwith:•ComfortableandfastpressurizedPilatusPC‐12aircraft•Convenientschedules•AffordablefaresAbldt i blb idt•reasonaeansusanaesusyamounEAS HistoryWhereasmanycommunitieshavebeenpromisedservicethathasnevertranspired,SeaPortdeliversEssentialAirServicetoeightcommunities:ExcursionInlet,Alaska,kl kdlbkldkyKake,Alaska,Pendleton,Oregon,Jonesboro,Arkansas,ElDorado,Arkansas,HotSprings,Arkansas,Harrison,Arkansas,andSalina,Kansas.Additionally,SeaPortservesNewport,ORandAstoria,ORunderacombinedstateandfederalgrantprogram.Ineverycase,afteraward,wehavestartedontime,onbudget,andwithfareseitheratorbelowthatwhichweoutlinedinourbid,ascomparedtosomanyotherairlineswhoplacebidswithunreasonablefaresthatareneverrealizedbythetravelingblipuc.SeaPort’s Proposed PlanSeaPortAirlinesemphasizescustomerserviceandconvenience,andinsodoingourplatformisreminiscentofcommercialairserviceofthepastinthatourpassengersonlyneedtoarrive20minutespriortodeparturefromanyofourterminals.InDenverSeaPortusethebusinessaircraftcenterforanenhancedexperienceFromthisterminal,SeaPortwouldbusinessaircraftenhancedtravelexperience.terminalwewillprovidecomplimentaryshuttlevanservicetoandfromDenver’smainterminalforthosepassengersneedingtoconnectto,orreturningfrom,moredistantdestinations.ThismodelhasprovenitselfwellatourhubinPortland,Oregonandisnolessconvenientthanatypicalgatechange—onlywiththisoneyougetacomplimentaryshuttleride.Further,ano‐TSAmodelwillofferthecommunitiestremendousappealforquicktripstoandfromKansasCity,Denver,andotherpotentialmajormarketconnectionstobeservedbySeaPort.Finally,ano‐TSAmodelhasthegreatestpotentialtodrawbusinessandleisuretrafficfromDenverthatwouldotherwisetravelbyhighwayifatraditionalTSA‐restrictedairlinewastheonlyflightoption.L tlth$119d llfilifT ltD00Thiasy,eoararenourproposasanaverageare.raveoenverwillaslowas$79.oneway.sfarlessthanthecurrentoperator.No TSA. No Hassles.SeaPortAirlinesisuniqueinthatitproactivelymarketstotravelerstheeaseandconvenienceofby‐passingTSAsecurityscreening.Belowareafewinherentcostsavingbenefitsandcustomerbenefitspassedtoyoutheairportasecurityscreening.BelowareafewinherentcostsavingbenefitsandcustomerbenefitspassedtoyoutheairportwhenpartneringwithacarriersuchasSeaPortAirlines:•Lowerfaresthankstonogatefees•Increasereliabilityinarrivalanddeparturetimes•Quickerturntimes•Arrivejust20minutesbeforedeparture,board,andgo•Nolines.Norubbergloves.Noneedtotakeyourshoesoff.Wefoundwhatairtravellost:EaseandConvenienceEfficiency& ReachApril2010fullGDSvisibility(Travelocity,Expedia,etc.)y aReservationsavailableonlineatSeaPortAir.com,toll‐freeat888.573.2767,orthroughlocaltravelagentsLowFaresthankstolowoperatingcostsandefficientaircrafteuimentgq pHigh‐frequency,non‐stopdailyservice– upto6segmentsinthisproposalCustomerfocusedbringintheconvenienceofaprivatelanetotheaveragetravelergpforthesamecostascommercialairlines.EAS TestimonialLarryDalrymple–AirportManagerPendletonRegionalAirport:DalrympleAirportManager,PendletonRegionalAirport:“EasternOregonRegionalAirportatPendletonhadbeenstrugglingsinceschedulechangesfollowing9/11servedbyacarrierflying37seataircraft. Lowpassengercountattributedtopoorschedule,whichthencontributedtopoorerpassengercount. Thecarrier'ssolutionwastobringinlargeraircraftandflytoadifferenthub. TheAirportandcommunitybalkedatthissuggestionandwentinsearchofalternatives. ThesolutionfoundthroughtheEASprocesswasSeaPortAirflyinga9passengerPilatus,thatwouldeliminatetheneedforTSAsecurityaswellasmandatoryARFFstandby,savingtheAirportpersonnelcostsinanalreadyshortbudget. Thepassengershavewelcomedthenewservice,muchbetterschedule,andareelatedwith"nosecuritycheck"andstandbytime. Passengerstodaywillsay,"Ilovetheservice","greatcustomerservice",and"I'msuregladIfinallytriedit,causeI'llbeback".Inourparticularmarket,the9passengeraircraftisperfect,andSeaPortAirprovidestheschedule,theprofessionalism,andcustomerserviceweneedanddesire ”customerservicedesire.”CustomerFeedbackDeborahA.Burton,PhD,RN,CNAAsaid:“IamtheVPandChiefNursingOfficerforProvidence.Wearelocatedin5westernstates,operate28hospitals,andemploy51,000peopleand15,000nurses.Needlesstosay,airtravelismylife.ThispastfourdaysIhadoneofthemostdelightfulexperiencesofmyth it llifSPtitl dt iklditoerwsegruelingravee:IfleweaorfromBoengtoPorantoAsoraandbac.Shouyoubeconsiderngotherroues,pleaseletmeknow(weareinAlaska,Montana,Washington,OregonandsouthernCalifornia).IamnowofficiallyaloyalSeaPorttraveler.Thanksforthegreatserviceandconvenience.”DylanHardmansaid:“WOW!Whatagreatproduct!FrombeingpickedupcurbsideatKPDXtowalkingoutthedooratKAST,thiswastrulyagreatiG tiliti dldt fffi lli ft(iththt iilitd)experence.reafacyatKPDX,frenygrounsa,proessonalcrew,ceanarcra,sameweAsorafacy ancrew.ThetotalVIPexperiencewithouttheheftypricetag.IWILLbeback!”Sebastiansaid:“ThursdayeveningIflewyourairlinefromPortlandtoSeattleandhadasuperiorexperience.Avoidingthewholeairportbaggage andsecurityrigmarolewasatremendoustimesaver.Iwasspoiled.SeaPortAirisclearlythemostefficientwayforintelligentbusinessf lddhddfh kfhproessionalstocommutebetweenPortlanandSeattle.OurcarrieomeonSunayseemetotakeorever.Tanyouoravingthevisiontoofferthisservice.IwillsharethispositiveexperiencewithmycolleaguesandifImayeverbeofassistance to you,pleaseletmeknow.”Recent NewsForalistofSeaPortnewsarticlesvisithttp://www.SeaPortAir.com/pressEconomydoesn'tgroundairlinestart‐ups(clickhere)USAToday::11/16/2009They'rejustrealisticaboutthehistoryofthisindustryandthelikelihood(a)newstart‐upwillnotsurvive,"saysCraford,whohelpedlaunchSeaPortin...ScheduledairservicereturnstoRegion8(clickhere)KAITTV::10/26/2009SeaPortAirlineswilllinkMemphisandfourArkansascities»The...(clickhere)GloriaLevstonofSignatureFlightSupportaddsfueltoaSeaPortAirlinesPilatusPC12planeattheSeaPortfacilityatMemphisInternationalAirportThe...Recent SeaPort News‘ThisisagreatdayforElDorado’SeaPortAirlineswelcomedasnewairserviceproviderBy:JohnWorthenPublished:10/28/2009Approximately50peoplegatheredTuesdaymorningattheSouthArkansasRegionalAirportterminaltocelebratethereturnofairservicetoElDorado.RepresentativesfromSeaPortAirlines,whoarrivedonaflightfromMemphisInternationalAirporttocommemoratetheoccasion,weregreetedwithcheersandsmilesbycommunitymembersandlocalofficials.ThePortland,Ore.‐basedcompanywillofferround‐tripflightsbetweenElDoradoandMemphisontheSwiss‐builtPilatusPC‐12,a pressurizedturbo‐propairplane.DeparturetimesfromtheSARAare4:10a.m.,11:20a.m.,and8:20p.m.,accordingtoSeaPort’swebsite.SeaPortwillalsooperateround‐tripflightstoMemphisfromHarrison,HotSpringsandJonesboro.Thesecommunities,alongwithElDorado,havebeenwithoutregularservicesince2008,whenAirMidwest,asubsidiaryofMesa Airlines,pulledoutofthemarkets.SeaPortbeatoutseveralcompaniesthatsubmittedproosalstotheDeartmentofTransortationandsinedatwo‐yearcontracttoprovidetheservicefor a$6047789federalsubsid.TheEssentialAirServicesrorampppg, ,yp gsubsidizesairlinestoprovideservicethatwouldn’tbeprofitableontheopenmarket.SeaPortofficiallyopenedMondayinElDoradowitha4:30a.m.flightfromSARAtoMemphisInternational.AttheceremonyTuesday,localofficialstoutedSeaPortasaqualityairlinethatwillhelpElDorado’seconomicenginehum.JeffTeague,chairmanoftheElDoradoAirportCommission,calledthedaya“brightone,”despitecloudy,mist‐filledskiesthat hadtheSARAsockedin.Gettingthisairline“hasbeenanarduoustask,butweotthebestservicewecouldhave,”Teauesaid.“Transortationisthekeyissueineconomicdevelopment,andnothavingairserviceinElggpDoradoforthepastyearorsohasreallynotbeenagoodthing.Andnow,withallthat’sgoingoninElDorado,withtheconferencecenterandthenewhighschool,(Sea‐Port’sarrival)isjusttheicingonthecake.”KentCraford,chiefexecutiveofficerofSeaPort,calledTuesday“anexcitingdayforusatSeaPort.Wefeelthatoursmallnine‐passengerairplaneisaperfectfitforElDorado’sairserviceneeds.Andthefactthatwewillbeofferingthreetripsadayallowsforbetterconnectionserviceandsamedaytravelopportunitiesto Memphisandbeyond.Weareyourhometownairline.”ElDoradoMayorMikeDumasspokehighlyofSeaPortofficialsandsaidhelooksforwardtoworkingwiththemthroughouttheirtenurehere.“ThisisagreatdayforElDorado,”Dumassaid.“Wehavebeenworkingonthisformorethanayear,andit’sgreattofinallyhaveairservicebackinElDorado.Wewelcomeyou,SeaPort,andwethankyouforyourservice.”MoreinformationandreservationinformationisavailablebyloggingontotheSeaPortWebsiteatwww.seaportair.com.SeaPortwelcomesthisopportunitytobechosentoprovideessentialairiC kb kdihservceatMcoo,Nerasaforthenexttwoyearperio.Webrngafresapproach,andbelievewehavepresentedaproposalthatwillmeettheEASneedsofthecommunitiesatreasonablesubsidylevels.Thankyouforyourconsideration.RobMcKinneyRespectfullysubmitted,McKinneyPresidentSeaPortAirlines7505NEAirportWayPortland,OR97218(971)340‐1711www.SeaPortAirlines.comAlaska Juneau Aeronatics, Inc. d/b/a SeaPort AirlinesEssential Air Service ProposalDocket OST-1997-3005Annual Subsidy RequirementJuly, 2010 - June, 2011Exhibit 1AMcCookFactorMCK-DENRevenue:Passenger:Forecasted Passengers3,978Average Revenue / Pax:Current: Oct 2008 - Sept 2009 119.00$Revenue / Pax Change 1.00%Average Revenue / Pax120.19$Passenger Revenue 478,116$Other Revenue:Ratio to Passenger Revenue1.00%Other Revenue 4,781$Total Revenue 482,897$Operating ExpensesCompleted Block Hours 2,188.80DirectFlight Crews72.00$ 157,594FuelGallons / Block Hour 74Into Plane Cost / Gallon 3.45$Fuel Cost / Block Hour255.30$ 558,801Insurance50.17$ 109,812Maintenance211.20$ 462,275Aircraft Lease177.09$ 387,615Total Direct 1,676,097$Indirect Expense39.00%653,678Total Operating Exp 2,329,775$Return5.00%116,489Total Economic Cost2,446,264$Surplus / (Deficit) (1,963,367)$Annual Subsidy1,963,367$Alaska Juneau Aeronautics, Inc. d/b/a SeaPort AirlinesEssential Air Service ProposalDocket OST-1997-3005Annual Subsidy RequirementJuly, 2011 - June, 2012Exhibit 1BMcCookFactorMCK-DENRevenue:PassengerForecasted Passengers4,177Average Revenue / PaxEstimate: Oct 2009 - Sept 2010 120.19$Revenue / Pax Change 0.00%Average Revenue / Pax120.19$Passenger Revenue 502,022$Other Revenue:Ratio to Passenger Revenue1.00%Other Revenue 5,020$Total Revenue 507,042$Operating ExpensesCompleted Block Hours 2,188.80DirectFlight Crews75.60$ 165,473FuelGallons / Block Hour 74Into Plane Cost / Gallon 3.62$Fuel Cost / Block Hour268.07$ 586,752Insurance50.17$ 109,812Maintenance211.20$ 462,275Aircraft Lease177.09$ 387,615Total Direct 1,711,927$Indirect Expense39.00%667,652Total Operating Exp 2,379,579$Return5.00%118,979Total Economic Cost2,498,558$Surplus / (Deficit) (1,991,516)$Annual Subsidy1,991,516$Alaska Juneau Aeronautics, Inc. d/b/a SeaPort AirlinesEssential Air Service ProposalDocket OST-1997-3005Proposed Departure SchedulesJuly, 2010 - June, 2012Exhibit 2Sched Sched Sched CompSched Block Sched Block Block Sched Comp BlockCityBlock Sched Hours/Freq/Hours/Hours/Seg / Comp Seg / Hours/CommunityPair Time Seg Seg Week WeekYearYear FactorYearYearMCKMCK 0545DEN 0650 11.2067.20374.4031297.50% 304364.80DEN 0935MCK 1040 11.2067.20374.4031297.50% 304364.80MCK 1055DEN 1200 11.2067.20374.4031297.50% 304364.80DEN 1520MCK 1625 11.2067.20374.4031297.50% 304364.80MCK 1640DEN 1745 11.2067.20374.4031297.50% 304364.80DEN 1955MCK 2100 11.2067.20374.4031297.50% 304364.8067.20643.202,246.40 1,87297.00% 1,8242,188.80Alaska Juneau Aeronautics, Inc. d/b/a SeaPort AirlinesEssential Air Service ProposalDocket OST-1997-3005Performance SummaryJuly, 2010 - June, 2011Exhibit 3AMcCookMCK-DENPerformance:Rev Block HoursScheduled 2,246.40Completion % 97.50%Completed Block Hours 2,188.80Rev DeparturesScheduled 1,872Completion % 97.50%Completed Departures 1,824Rev PassengersPY 2009 Passengers 3,900Forecasted Growth Rate 2.00%Total PassengersAverage Segment Share 100.00%Segment Passengers 3,978Available Seats16,416Average Load Factor24.23%Average Pax / Flight2.2Alaska Juneau Aeronautics, Inc. d/b/a SeaPort AirlinesEssential Air Service ProposalDocket OST-1997-3005Performance SummaryJuly, 2011 - June, 2012Exhibit 3BMcCookMCK-DENPerformance:Rev Block HoursScheduled 2,246.40Completion % 97.50%Completed Block Hours 2,188.80Rev DeparturesScheduled 1,872Completion % 97.50%Completed Departures 1,824Rev PassengersJul 2011 - Jun 2012 Est Pax 3,978Forecasted Growth Rate 5.00%Total PassengersAverage Segment Share 100.00%Segment Passengers 4,177Available Seats16,416Average Load Factor25.44%Average Pax / Flight2.3