US. Department of 

Thinsportotton 

Office of the Secretary 

of Transportation 

Steven D. Hatter 

Deputy Commissioner, Aviation 

4111 Aviation Avenue 

POBox 196900 

Anchorage, AK 99519-6900 

\)o^^A Q.asU-U^^ 

1 200 New Jersey Avenue, SE 

Washingion, DC 2059 0 

February 14,2011 

Dear Mr. Hatter: 

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As you kiiow, Alaska Seaplane Service, LLC, provides subsidized air service under the essential 

air service (EAS) program at Elfin Cove and Pelican, Alaska. By Order 2010-12-33 the 

Department requested "best and final" proposals to serve the two communities, and Alaska 

Seaplane was the only carrier to apply. The Department's current contract with the caiTier calls 

for service with 6-seat DHC-2 Beaver aircraft at an annual subsidy of $185,772 for the two 

communities. Under the current contract, which expires May 31, Elfin Cove was to receive one 

round trip per week during the 26-week off-peak period and 5 flagstop round trips per week 

during the 26-week peak period; Pelican was to receive six round trips per week year round. 

Alaska Seaplane proposes to continue service with Beaver aircraft, but the service now would be 

operated on a nonstop basis, and would extend from June 1, 2011, through January 31. 2015, in 

order to synchronize these rates with the expiration of its rates at Angoon and Tenakee. At Elfin 

Cove, the carrier proposes to operate two round trips per week during a 34-week off-peak, and 

five round trips per week during the 18-week peak period for $75,391 per year. At Pelican, the 

carrier requests $185,721 annual subsidy, and proposes to operate six round trips per week year 

round. The calculations are attached. 

My purpose in writing you at this time is to inform you of the results of the carrier's service and 

subsidy proposal before we submit a recommendation on the cairier selection issue to the 

Assistant Secretary for Aviation and International Affairs for decision. Since there are no other 

options before the Department at this time, you need not respond to this letter. However, we 

wanted to give you the opportunity to submit any comments, on the record, if you wish. 

We know this matter is important to you and we will act as quickly as possible upon receipt of your 

letter. In order to expedite the case, please submit your comments by email to EAS(g'doi.gov by 

March 1. If you have any questions or need additional time, please contact Kevin Adams 

at (202) 366-1047. 

Sincerely, 

^ ^ Dennis J. DeVany 

Chief, Essential Air Service Division 

Office of Aviation Analysis 
Appendix A 

Annual Subsidy Need at Elfin Cove and Pelican, Alaska 

Docket 2002-11586 

Aircraft Type 

Block Hours 1/ 

Passengers 

Freight Lbs. 

Mail Lbs. 

Passenger 

Freight 

Mail 

Total Revenue 

Economic Cost 

Annual Subsidy 

Elfin Cove 

DHC-2 

248 

521 

22,899 

31339 

$68,851 

$12,594 

$45,187 

$126,632 

$202,023 

$75,391 

Pelican 

DHC-2 

562 

1,045 

105,040 

58,566 

$137,928 

$57,772 

$87,382 

$283,082 

$468,803 

$185,721 

1/ BIk. Hrs. Flights 

Elfin Cove 

Peak 18 weeks x 10 flights in each direction x 47 min/60 = 141 180 

Off-Peak 34 weeks x 4 flights in each direction x 47 min/60 = 107 136 

248 316 

Pelican 

52 weeks x 12 flights in each direction x 54 min/60 = 562 624