~~~~~~J.tn~~~~ Megan Lawrence 

Managing Director, Government and Community Relations 

January 8, 2013 

Mr. Dennis DeVany 

Chief, EAS and Domestic Analysis 

Office of Aviatfon Analysis 

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E. 

Washington, D.C. 20590 

Subject: Proposal to Provide Essential Air Service at Cordova, Gustavus, 

Petersburg, Wrangell and Yakutat, Alaska, Docket OST-1998-4899 

Dear Mr. DeVany: 

I"• .:1 

. ;·, 

Please see the attached proposal from Alaska Airlines, Inc. to provide essential 

air service to the communities of Cordova, Gustavus, Petersburg, Wrangell and 

Yakutat, Alaska. The proposal includes a subsidy request to provide this service. 

Also attached are the certifications pertaining to compliance with a drug-free 

workplace, nondiscrimination and lobbying regulations. 

Please contact me if you need additional information. 

Sincerely, 

Attachments 

BOX 68900 SEATTLE, WA 98168-0900/206-433-3200 
Page 1 of 1 

Alaska Airlines, Inc. 

Compensation Requirement 

Essential Air Service to Cordova, -Gustavus, Petersburg, Wrangell and Yakutat 

Index of Exhibits 

Exhibit Title Pages 

AS-1 Narrative Statement 1 

AS-2 Subsidy Request 1 

AS-3 Schedule 1 
AS-1 

Alaska Airlines, Inc. 

Compensation Requirement 

Essential Air Service to Cordova, Gustavus, Petersburg, Wrangell and Yakutat 

Narrative Statement 

Alaska Airlines, Inc. ("Alaska") is pleased, in response to Order 2012-10-24, to submit its 

integrated Southeast Alaska EAS proposal for service to Cordova, Gustavus, Petersburg, 

Wrangell and Yakutat. Alaska requests an EAS compensation level of $8,303,631 for its 

aggregated B 737-400 combination ('combi") proposal-- $5,107,527 for Cordova, Yakutat and 

Gustavus and $3,196,1 04 for Petersburg and Wrangell. 

The compensation request is virtually the same as Alaska's January 2011 proposal- ail 

increase of just $41,000 or .5%. The request reflects increases in revenues (22%) and 

expenses (14.9%). Except for fuel costs, Alaska projects flat expenses, i.e. that its expenses 

through the period ending April 30, 2015 will remain the same as today's expense levels. With 

respect to fuel costs, Alaska projects a modest 5% fuel cost increase which is at the lower end 

of many fuel cost forecasts covering the next two and a half years. 

Alaska's proposal, particularly including the assumed continuation o(higher traffic levels and 

freeze on non-fuel expenses, reflects the ~pecial obligation Alaska believes it has to continue its 

longstanding role as the vital transportation link for each of these five Southeast Alaska 

communities to hubs within and beyond the state. · 

Alaska proposes to continue its established pattern of daily B-737-400 combi passenger and 

cargo service, with each flight offering passengers from the Southeast Alaska communities 

(except for Alaska's summer-only Gustavus service) single-plane service to Juneau as well as 

to Alaska's Anchorage and Seattle hubs. Alaska's specially-configured 737-400 aircraft 

provides enhanced cargo capacity which is critically important to these isolated communities. 

These aircraft are also equipped with the latest Required Navigation Performance (RNP) 

technology, which enables the airline to reliably access the weather-sensitive airports in 

Southeast Alaska and to maintain a high completion factor. 

Alaska has provided service to Southeast Alaska under the EAS program for more than 30 

years and is committed to continuing to serve this critically important transportation function, 

connecting these remote, wholly aviation-dependent communities to points within and beyond 

the state of Alaska. 
Alaska Airlines, Inc AS-2 

AnnuaiCompensation Requirement 

Essential air Service at Cordova, Gustavus, Petersburg, Wrangell and Yakutat 

May 1 , 2013 and Forward 

Operating Revenue 11 

Passenger 

FreightfMail 

Excess Baggage 

Trans. Related & Other 11 

Operating Expense 

Direct Operating 

Flying 21 

Station 21 

Maintenance 21 

Flight Attendant 21 

Selling/ Advert 21 

Fuel3/ 

Indirect 

Ownership 21 

Overhead 21 

Total Operating Exp. 

Operating Profit (Loss) 

Return 41 

Based on Need for Year Ended November 30, 2012 

[{'c·~,:·:·;;::?·:;~-:::~-~!:.\~~!:~.~§R~.~~~:C~::::;c::::~T~T::-:::':~.-:L:'J 

Cordova 

Yakutat Petersburg Consolidated 

Gustavus Wrangell Total 

7,069,763 7,618,183 14,687,946 

2,235,579 1,200,444 3,436,023 

136,094 73,852 209,946 

1,481,652 1,790,525 3,272,177 

10,923,088 10,683,003 21,606,091 

2,532,580 2,276,823 4,809,403 

3,340,887 3,003,501 6,344,388 

722,319 649,374 1,371,693 

255,638 229,822 485,460 

867,428 779,830 1,647,258 

4,226,224 3,799,430 8,025,654 

$ 11,945,075 $ 10,738,780 $ 22,683,855 

1,989,325 1;788,430 3,777,755 

1,065,732 958,107 2,023,840 

$ 3,322,177 $ 2,479,418 $ 5,801,595 

$ 15,267,252 $ 13,218,198 $ 28,485,450 

$ (4,344,164) $ (2,535,194) $ (6,879,359) 

$ 763,363 $ 660,910 $ 1,424,272 

Compensation $ (5,107,527) $ (3,196,104)! -$6,303,631 

1/ No change for 2013 bid- Excludes public service revenue 

21 No change vs. consolidated YENOV2012 Actual- Pro-rate between CDV/GSTIYAK & PSGIWRG identical to last bid 

31 5 % increase in price per gallon, no change in fuel consumption 

4/ 5 % of Operating Expense 
EAS Schedule 

Flight# 

Seattle 

Ketchikan 

Wrangel 

Petersburg 

Juneau 

Yakutat 

Cordova 

Anchorage 

t::~~jJ0§L~::6s0~:1~iittMIT~1~1~it±0:::~LSE~JESSl 65 61 64 66 

~ ~ t t 

655 

800 

850 

0942 

1023 

1047 

1128 

1207 

1252 

1437 

750 

930 

1022 

1121 

1208 

1301 

1342 

1426 

2042 

1755 

1708 

1640 

1556 

1528 

1442 

1352 

1305 

1125 

2320 

2000 

1915 

1830 

1746 

1657 

1614 

1523 

Source: Winter (Jan '12) & Summer (Jul'13 Draft) 

··--···· ....... ··-----------· 

Flight# 

Seattle 

Ketchikan 

Wrangel 

· Petersburg 

Gustavus 

Juneau 

Gustavus 

Yakutat 

Cordova 

Anchorage 

AS-3 

L.: :{;:;,~:'~~:;:·::P;~~:2:2ti'"::;~i;s-;~:IB"J~k-'<~~:f~~i~~ets0~f8Js:z;· :-~.>1. ~~~~::>:~~,-~;,~~;±::~.:] 

65 61 71 77 64 66 

~ -~ ~ ~ t t 

655 750 1400 2137 2311 

802 1855 

850 1815 

930 1743 

1010 1703 - 1031 1635 

1121 1549 

1716 

1203 917 1527 1742 1505 1958 

1243 1007 1607 1822 1416 1912 

1636 

1101 1830 

1142 1747 

1228 1708 

1308 1625 

1425 1353 2003 1240 1540 

----·-··--·-······ -·- -·-- ________ ., ________ _ 
UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

OFFICE OF AVIATION ANALYSIS 

TITLE VI ASSURANCE 

(Implementing Title VI of the Civil Rights Act of 1964, as amended) 

ASSURANCE CONCERNING NONDISCRIMINATION ON THE 

BASIS OF DISABILITY IN FEDERALLY-ASSISTED PROGRAMS 

AND ACTIVITIES RECEIVING OR BENEFITING FROM 

FEDERAL FINANCIAL ASSISTANCE 

(Implementing the Rehabilitation Act of 1973, as amended, and the 

Air Carrier Access Act of 1986) 

49 CFR Parts 21 and 27 and 14 CFR Parts 271, and 382 

___ __,.-._\_o_B_C\__,___,S=-.:..¥-J.....:.£=---'j_.__ ___ (the Recipient) HEREBY AGREES THAT, 

(Name ofRecipient) 

I. As a condition to receiving any Federal financial assistance from the 

Department ofTransportation, it will comply: with Title VI of the Civil Rights Act of 1964, 

as amended, 42 U.S.C. 2000d--42 U.S.C. 2000d-4; all requirements imposed by or pursuant 

to: Title 49, Code ofFederal Regulations, Part 21, Nondiscrimination in Federally-Assisted 

Programs of the Department of Transportation--Effectuation of Title VI of the Civil Rights 

Act of 1964; and other pertinent directives so that no person in the United States shall, on the 

grounds of race, color, or national origin, be excluded from participation in, be denied the 

benefits of, or be otherwise subjected to discrimination under any program or activity for 

which the Recipient receives Federal financial assistance from the Department of 

Transportation. This assurance is required by Title 49, Code of Federal Regulations, section 

21.7(a) and Title 14, Code of Federal Regulations, section 271.9(c). 

II. As a condition to receiving any Federal financial assistance from the 

Department of Transportation, it will comply with: section 504 of the Rehabilitation Act of 

1973, as amended (29 U.S.C. 794); the Air Carrier Access Act of 1986 (49 U.S.C. 1374(c)); 

and all requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Part 

27, Nondiscrimination on the Basis of Handicap in Programs and Activities Receiving or 

Benefitting from Federal Financial Assistance, Title 14, Code of Federal Regulations, Part 

382, Nondiscrimination on the Basis of Handicap in Air Travel; and other pertinent directives 
so that no otherwise qualified person with a disability, be excluded from participation in, be 

denied the benefits of, be discriminated against by reason of such handicap in the provision 

of air transportation, or otherwise be subjected to discrimination under.any program for 

which the Recipient receives Federal financial assistance from the Department of 

Transportation. This assurance is required by Title 49, Code of Federal Regulations, section 

27.9 and Title 14, Code ofFederal Regulations, sections 271.9(c) and 382.9. 

TIL It will promptly take any meaures necessary to effectuate this agreement. The 

Recipient further agrees that it shall take reasonable actions to guarantee that it, its 

contractors and subcontractors subject to the Department of Transportation regulations cited 

above, transferees, and successors in interest will comply with all requirements imposed or 

pursuant to the statutes and Department of Transportation regulations cited above, other 

pertinent directives, and the above assurances. 

IV. These assurances obligate the Recipient for the period during which Federal 

fmancial assistance is extended. The Recipient agrees that the United States has a right to 

seek judicial enforcement with regard to any matter arising under the statutes and Department 

of Transportation regulations cited above, other pertinent directives, and the above 

assurances. · 

V. These assurances are given for the purpose of obtaining Federal subsidy 

under the Essential Air Service Program and are binding on the Recipient, contractors, 

subcontractors, transferees, successors in interest, and all other participants receiving Federal 

subsidy in the Essential Air Service Program. The person or persons whose signatures 

appear below are authorized to sign this agreement on behalf of the Recipient. 

VI. In addition to these assurances, the Recipient agrees to file: a summary of all 

complaints filed against it within the pastyear that allege violation(s) by the Recipient of 

Title VI of the Civil Rights Act of 1964, as amended, section 504 of the Rehabilitation Act of 

1973, as amended, or the Air Carrier Access Act of 1986; or a statement that there have been 

no complaints filed against it. The summary should include the date the complaint was filed, 

the nature of the complaint, the status or outcome of the complaint (i.e., whether it is still 

pending or how it was resolved). 

Date ' Legal Name of Recipient 

By: 
UNITED STATES OF A;MERICA 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

OFFICE OF AVIATION ANALYSIS 

CERTIFICATION REGARDING INFLUENCING ACTIVITIES 

Certification for Contracts, Grants, Loans, 

and Cooperative Agreements 

The undersigned certifies, to the best of his or her lmowledge and belief, that: 

(1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the 

undersigned, to any person for influencing or attempting to influence an officer or employee 

of any agency, a Member of Congress, an officer or employee of Congress, or an employee 

of a Member of Congress in connection with the awarding of any Federal contract, the 

making of any Federal grant, the making of any Federal loan, the entering into of any 

cooperative agreement, and the extension, continuation, rei1ewal, an1endment, or 

modification of any Federal contract, grant, loan, or cooperative agreement. 

(2) If any funds other than Federal appropriated funds have been paid or will be paid to any 

person for influencing or attempting to influence an officer or employee of any agency, a 

Member of Congress, an officer or employee of Congress, or an employee of a Member of 

Congress in com1ection with tlus Federal contract, grant, loan, or cooperative agreement, tl1e 

undersigned shall complete and submit Standard Forrn-LLL, "Disclosure Fonn to Report 

fufluencing Activities," in accordance witl1 its instructions. 

(3) The undersigned shall require that the language oftlus ce1tification be included in tl1e 

award documents for all subawards at all tiers (including subcontracts, subgrants, and 

contracts under grants, loans and cooperative agreements) and that all subrecipients shall 

certify and disclose accordingly. 

This certification is a matelial representation of fact upon wllich reliance was placed when 

tlus transaction was made or entered into. Submission of this certification is a prerequisite 

for making or entering into tlus transaction imposed by section 1352, title 31, U.S. Code. 

Any person who fails to file tl1e required certification shall be subject to a civil penalty of not 

less tl1an $10,000 and not more tl1an $100,000 for each such failure. 

Date 

t\Q"'C'.I3i"'~ t:-·~ <l!'c...ftc. GQoo.leS""W.'"""' Alas \C.A. Al ~ t; \4." c, :r.~c:. · 

Title Air Carrier 

'"'" c,o ""'"" ... Y\ ~~ p,., \ Q, ~'DoW\, .s: 

Co'"'..( o""' 1 C..u...,....yo J , fllil~b'-4't !l, \A"'C'C""¥" -4 'fA~t.u+--"t Essential Air Service Point(s) To Which Certification Applies 
UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

ORnCEOFTHESECRETARY 

ORnCE OF AVIATION ANALYSIS 

CERTIFICATION REGARDING DRUG-FREE WORKPLACE REQUIREMENTS 

IN THE PERFORMANCE OF SUBSIDIZED ESSENTIAL AIR SERVICE 

A. The subsidized essential air service carrier certifies that it will, or will continue, to provide a drugfree workplace by: 

(a) Publishing a statement notifying employees that the unlawful manufacture, distribution, 

dispensing, possession or use of a controlled substance is prohibited in the carrier's workplace, and 

specifying the actions that will be taken against employees for violation of such prohibition; 

(b) Establishing an ongoing drug-free awareness program to inform employees about--

(1) The dangers of drug abuse in the workplace; 

(2) The grantee's policy of maintaining a drug-free workplace; 

(3) Any available drug counseling, rehabilitation, and employee assistance programs; and 

( 4) The penalties that may be imposed upon employees for drug abuse violations 

occurring in the workplace; 

(c) Making it a requirement that each employee to be engaged in the performance ofwork 

supported by the subsidy be given a copy of the statement required by paragraph (a); 

(d) Notifying the employee in the statement required by paragraph (a) that, as a condition of 

employment supported by the subsidy, the employee will--

(1) Abide by the terms of the statement; and 

(2) Notify the employer in writing of his or her conviction for a violation of a criminal 

drug statute occurring in the workplace no later than five calendar days after such 

conviction; 

(e) Notifying the agency in writing, within ten calendar days after receiving notice under 

paragraph ( d)(2) from an employee or otherwise receiving actual notice of conviction. 

Employers of convicted employees must provide notice, including position title, to the 

Office of Aviation Analysis. Notice shall include the order number of each affected 

subsidized service; 

(f) Taking one of the following actions, within 30 days of receiving notice under paragraph 

( d)(2), with respect to any employee who is so convicted--

(!) Taking appropriate personnel action against such an employee, up to and including 

termination, consistent with the requirements of the Rehabilitation Act of 1973, as 

amended, or 

(2) Requiring such employee to participate satisfactorily in a drug abuse assistance or 

rehabilitation program approved for such purposes by a Federal, State or local 

health, law enforcement, or other appropriate agency; 
(g) Making a good faith effort to continue to maintain a drug-free workplace through 

implementation of paragraphs (a), (b), (c), (d), (e) and (f). 

B. The subsidized essential air service carrier may, but is not required to, insert in the space provided 

below the site for the performance of work done in connection with the specific grant. 

Places of Performance (street address, city, county, state, zip code). For the provision of essential air 

service, workplaces include outstations, maintenance sites, headquarters office locations, training sites 

and any other worksites where work is performed that is supported by the subsidy. 

Check [ ] ifthere are workplaces on file that are not identified here. 

Signature~ • I Date