# ~~~~~~J.tn~~~~ Megan Lawrence Managing Director, Government and Community Relations



### January 8, 2013

Mr. Dennis DeVany Chief, EAS and Domestic Analysis Office ofAviatfon Analysis U.S. Department ofTransportation 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 ifyou 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 

### 1AS-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 $3,196,104 for Petersburg and Wrangell. The compensation request is virtually the same as Alaska's January 2011 proposal- ail increase ofjust $41,000 or .5%. The request reflects increases in revenues (22%) and expenses (14.9%). Except forfuel costs, Alaska projects flat expenses, i.e. that its expenses through the period ending April 30, 2015will 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 halfyears. 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 ofthese 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 ofAlaska.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 % ofOperating 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 OFAMERICA DEPARTMENT OF TRANSPORTATION OFFICE OFTHE SECRETARY OFFICE OFAVIATION ANALYSIS TITLE VI ASSURANCE (Implementing Title VI ofthe Civil Rights Act of 1964, as amended) ASSURANCE CONCERNING NONDISCRIMINATION ON THE BASIS OFDISABILITY IN FEDERALLY-ASSISTED PROGRAMS AND ACTIVITIES RECEIVING ORBENEFITING FROM FEDERALFINANCIAL ASSISTANCE (Implementing the Rehabilitation Act of1973, as amended, and the Air CarrierAccess Act of 1986) 49 CFRParts 21 and 27 and 14 CFRParts 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 ofthe Civil Rights Act of1964, as amended, 42 U.S.C. 2000d--42 U.S.C. 2000d-4; all requirements imposed by orpursuant to: Title 49, Code ofFederal Regulations, Part 21, Nondiscrimination in Federally-Assisted Programs ofthe Department ofTransportation--Effectuation ofTitle VI ofthe Civil Rights Act of 1964; and otherpertinent directives so that no person in the United States shall, on the grounds ofrace, color, ornational origin, be excluded from participation in, be denied the benefits of, orbe 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 ofFederal Regulations, section 21.7(a) and Title 14, Code ofFederal Regulations, section 271.9(c). II. As a condition to receiving any Federal financial assistance from the Department ofTransportation, it will comply with: section 504 ofthe 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 orpursuantto Title 49, Code ofFederal Regulations, Part 27, Nondiscrimination on the Basis ofHandicap inPrograms and Activities Receiving or Benefitting from Federal Financial Assistance, Title 14, Code ofFederal Regulations, Part 382, Nondiscrimination on the Basis ofHandicap in Air Travel; and otherpertinent directivesso that no otherwise qualified person with a disability, be excluded from participation in, be denied the benefits of, be discriminated against by reason ofsuch handicap inthe provision ofair 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 ofFederal Regulations, section 27.9 and Title 14, Code ofFederal Regulations, sections 271.9(c) and 382.9. TIL Itwill 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 subjectto the Department ofTransportation regulations cited above, transferees, and successors in interest will comply with all requirements imposed or pursuantto the statutes and Department ofTransportation regulations cited above, other pertinent directives, and the above assurances. IV. These assurances obligate the Recipient forthe period during which Federal fmancial assistance is extended. The Recipient agrees thatthe United States has arightto seekjudicial enforcement with regard to any matter arising underthe statutes and Department ofTransportationregulations cited above, other pertinent directives, and the above assurances. · V. These assurances are given for the purpose ofobtaining Federal subsidy under the Essential Air Service Program and are binding on the Recipient, contractors, subcontractors, transferees, successors in interest, and all otherparticipants receiving Federal subsidy inthe Essential Air Service Program. The person orpersons whose signatures appear below are authorized to sign this agreement on behalfofthe Recipient. VI. Inaddition to these assurances, the Recipient agrees to file: a summary ofall complaints filed against it within the pastyearthat allege violation(s) by the Recipient of Title VI ofthe Civil Rights Act of1964, as amended, section 504 ofthe Rehabilitation Act of 1973, as amended, orthe Air Carrier Access Act of 1986; or a statementthat there have been no complaints filed against it. The summary should include the date the complaintwas filed, the nature ofthe complaint, the status or outcome ofthe complaint (i.e., whether itis still pending orhow it was resolved).

Date ' Legal Name ofRecipient By:

### UNITED STATES OFA;MERICA DEPARTMENT OFTRANSPORTATION OFFICE OFTHE SECRETARY OFFICE OFAVIATION ANALYSIS CERTIFICATIONREGARDING INFLUENCINGACTIVITIES Certification for Contracts, Grants, Loans, and CooperativeAgreements The undersigned certifies, to the best ofhis or her lmowledge and belief, that: (1) No Federal appropriated funds have been paid or will be paid, by or on behalfofthe undersigned, to any person for influencing or attempting to influence an officer or employee ofany agency, aMember ofCongress, an officer or employee ofCongress, or an employee ofaMember ofCongress in connection with the awarding ofany Federal contract, the making ofany Federal grant, the making ofany Federal loan, the entering into ofany cooperative agreement, and the extension, continuation, rei1ewal, an1endment, or modification ofany Federal contract, grant, loan, or cooperative agreement. (2) Ifany funds otherthan Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee ofany agency, a Member ofCongress, an officer or employee ofCongress, or an employee ofaMember of Congress in com1ection with tlus Federal contract, grant, loan, or cooperative agreement, tl1e undersigned shall complete and submit Standard Forrn-LLL, "Disclosure Fonnto Report fufluencing Activities," in accordance witl1 its instructions. (3) The undersigned shall require that the language oftlus ce1tification be included intl1e 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 offact upon wllichreliance was placed when tlus transaction was made or entered into. Submission ofthis certification is aprerequisite 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 subjectto a civil penalty ofnot less tl1an $10,000 and not more tl1an $100,000 for each such failure.

Date

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### 'fA~t.u+--"t Essential Air Service Point(s) To Which Certification Applies

### UNITED STATES OFAMERICA DEPARTMENT OFTRANSPORTATION ORnCEOFTHESECRETARY ORnCE OFAVIATION ANALYSIS CERTIFICATIONREGARDINGDRUG-FREEWORKPLACEREQUIREMENTS INTHE PERFORMANCE OF SUBSIDIZED ESSENTIALAIRSERVICE A. The subsidized essential air service carrier certifies that it will, or will continue, to provide a drugfree workplace by: (a) Publishing a statementnotifying employees thatthe unlawful manufacture, distribution, dispensing, possession oruse ofa controlled substance is prohibited inthe carrier's workplace, and specifying the actions that will be taken against employees for violation ofsuchprohibition; (b) Establishing an ongoing drug-free awareness program to inform employees about-- (1) The dangers ofdrug abuse in the workplace; (2) The grantee's policy ofmaintaining 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 arequirement that each employee to be engaged inthe performance ofwork supported by the subsidy be given a copy ofthe statement required by paragraph (a); (d) Notifying the employee inthe statementrequired by paragraph (a) that, as a condition of employment supported by the subsidy, the employee will-- (1) Abide by the terms ofthe statement; and (2) Notify the employer in writing ofhis orher conviction for a violation ofa criminal drug statute occurring in the workplace no laterthan 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 ofconviction. Employers ofconvicted employees must provide notice, including position title, to the Office ofAviation Analysis. Notice shall include the order number ofeach affected subsidized service; (f) Taking one ofthe following actions, within 30 days ofreceiving 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 withthe requirements ofthe 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 effortto continue to maintain adrug-free workplace through implementation ofparagraphs (a), (b), (c), (d), (e) and (f).

B. 

### The subsidized essential air service carrier may, 

### but is notrequiredto, insertinthe space provided below the site for the performance ofwork done in connection withthe specific grant.

Places ofPerformance (street address, city, county, state, zip code). Forthe provision ofessential air service, workplaces include outstations, maintenance sites, headquarters office locations, training sites and any other worksites where work is performedthat is supportedby the subsidy.

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

# Signature~ • I 

### Date