Proposal Under the Alternate Essential Air Service Program

Dockets DOT-OST-2004-18715 and DOT-OST-1996-1711

Submitted by

Manistee Blacker Airport Authority

Barry Lind

Airport Director

2323 Airport Road

Manistee, Michigan 49660

DUNS# 948868799

EIN 382169455

MI-001
Manistee Blacker Airport Authority

Alternate Essential Air Service Proposal 2

Manistee Blacker Airport Authority

Alternate Essential Air Service Program

Grant Proposal

The Manistee County Blacker Airport currently receives subsidized air service through 

the Alternate Essential Air Service Program. We are the only airport to have ever 

participated in this program. As our first two-year grant under the program nears its end, 

the Manistee Blacker Airport Authority respectfully submits this Application for 

continued participation in the Alternate Essential Air Service (EAS) Program. 

Understanding of Proposal Requirements

The submission of this proposal and participation in the Alternate EAS Program is 

contingent upon the ability of the Manistee Blacker Airport Authority to enter into 

contractual commitments with third parties under terms satisfactory to the Manistee 

Blacker Airport Authority. In other words, if this proposal were approved, but the 

conditions of the award were different than what is requested or the Manistee Blacker 

Airport Authority is unable to secure the commitment of other parties in accord with the 

terms proposed herein, then the request to continue participation in the Alternate EAS 

Program and to forgo participation in the Basic Essential Service Program is withdrawn.

Further, the request to continue participation in the Alternate EAS Program is based upon 

our understanding of 49 USC Section 41745(f), that if the program no longer addresses

the needs of the Manistee County Blacker Airport the airport would be accepted back into 

the Basic Essential Service Program.

Existing Air Service 

By virtue of Order 2012-3-9, dated March 16, 2012, Manistee/Ludington, Michigan 

participates in the Alternate Essential Air Service Program. The Alternate EAS air 

service is provided through scheduled public charter flights provided by the Part 380 

indirect air carrier Public Charters, Inc. and direct air carrier Corporate Flight 

Management. That service currently consists of 6 weekly flights between Manistee and 

Chicago Midway Airport on 19 seat BAE Jetstream 32 equipment. 
Manistee Blacker Airport Authority

Alternate Essential Air Service Proposal 3

Service History

Manistee/Ludington, Michigan has been a recipient of Essential Air Service subsidies 

since 1997, having had unsubsidized service for nearly the first 20 years after the 

inception of the program in 1978. 

The Manistee County Blacker Airport has a long history of commercial air service. 

Commercial airline service spans more than 50 years; the timetable is as follows:

− 1961: Manistee, Michigan receives its first commercial flight, with service 

provided by North Central Airlines.

− 1961-1979: North Central Airlines provides service with the Convair 340, 

later the Convair 580. The service primarily operated short routes to Chicago 

and Detroit via Grand Rapids and other cities to the south with continuing 

service to various cities to the north. It was during this period that Manistee 

would see its best level of enplanements up until 2012 (8499 total passengers 

in 1968).

− 1979-1981: Republic Airlines, formed as the result of the merger of North 

Central and Southern, continued to provide commercial service to the 

Manistee Blacker Airport during the first years of airline deregulation. 

However soon after deregulation, Republic stopped service. This began a 

long period of decreasing quality of service with frequent carrier and schedule 

changes. Enplanements were severely impacted during this period and would 

never really recover (2628 average total annual passengers during 1980's).

− 1981-1982: Simmons Airlines took over commercial air service with 18 seat 

EMB 110 aircraft.

− 1982-1984: American Central Airlines took over commercial air service also 

with EMB 110 aircraft.

− 1984-1988: Alliance Airlines took over commercial air service with Cessna 

402 aircraft.

− 1988-1996: Alliance Airlines was acquired by Great Lakes Airlines in 1988 

beginning the longest period of service by a carrier since North Central. It 

was during this period that Great Lakes began operating as United Express.

− 1996-2002: With a notice to terminate service at Manistee the era of 

unsubsidized service ends and that of EAS subsidies began. Great Lakes 

Airlines acquired the essential air service contract to keep our community 

connected to the national air transportation network. In 2001 with the loss of 

the United Express code share, Great Lakes reorganizes and moves operations 

west, ending service in the upper midwest. 

− 2003-2008: Skyway Airlines dba Midwest Connect was awarded the essential 

air service contract. With the change in carrier also came a change in hub 
Manistee Blacker Airport Authority

Alternate Essential Air Service Proposal 4

with a switch from Chicago O'Hare to Milwaukee. Service was provided by 

19 seat Beech 1900D aircraft. Shortly after Skyway began service passenger 

enplanements began to rise after two decades of stagnation. In 2003 total 

passengers increased 14%; 2004 +35%; 2005 +0%; 2006 +40% and 2007 

+8%. 

− 2008: Manistee experienced a two month suspension of service when Skyway 

discontinued operations.

− 2008-2011: Great Lakes Airlines returned to Manistee. Service continued to 

be provided to the Milwaukee hub. For the first time in the nearly fifty years 

of commercial service, service was provided exclusively via non-stop flights 

to a hub. In spite of the many short comings of the Great Lakes service (no 

code share with a carrier at the Milwaukee hub; no interline or baggage 

agreements with 3 of the top 4 carriers out of Milwaukee; and generally poor 

performance, both on-time as well as flight completion), the passenger 

numbers soon exceeded the numbers of the previous carrier reaching levels 

not seen since the 1970’s.

− 2011: Chautauqua Airlines dba Frontier Airlines begins non-stop regional jet 

service with 37 seat EMB-135 aircraft to their Milwaukee hub. Passenger 

numbers increased by over 300% to a total of nearly 22,000 for 2011, three 

times the previous best years during the 1960s, and nearly ten times the 

numbers during the 1980's, 1990's and early 2000's.

− 2012: Chautauqua Airlines dba Frontier Airlines ends service in March after 

only 11 months due to the discontinuation of its hub operations at Milwaukee

Wisconsin.

− 2012: Manistee experienced a two-month suspension of service when 

Chautauqua Airlines dba Frontier Airlines ended service in March due to 

Frontier’s dehubing of Milwaukee.

− 2012: Manistee County Blacker Airport is the first airport to apply for 

subsidized air service under the Alternate Essential Air Service Program and 

is awarded a two-year grant for Alternate EAS.

− 2012: On May 24th scheduled public charter service under the Alternate EAS 

program is provided by the Part 380 indirect air carrier Public Charters, Inc. 

(operated by direct air carrier Aerodynamics Inc.). Service begins with 4 

times weekly service to Chicago Midway Airport with 50 seat EMB-145 

aircraft, expanding to 6 times weekly in June and daily service in September.

− 2012: In October Aerodynamics, Inc. abruptly halts service and eventually 

declares bankruptcy. Manistee experiences a one-month suspension of 

service, its second suspension during the year.

− 2012: On November 15th, scheduled public charters resume with Corporate 
Manistee Blacker Airport Authority

Alternate Essential Air Service Proposal 5

Flight Management the new direct air carrier with service being provided 4 

times weekly with 19 seat BAE Jetstream 32 equipment.

− 2013-2014: Scheduled public charters flights continue being operated by 

Public Charters, Inc. and Corporate Flight Management with 4 times weekly 

service operated by 19 seat BAE Jetstream 32 and during peak summer season 

with 30 seat BAE Jetstream 41 aircraft, through the end of the two year 

Alternate EAS grant agreement. Service increases to 6 times weekly in March 

2014 after Corporate Flight Management receives Commuter Authority from 

DOT.

Community Air Service Needs 

Manistee/Ludington has participated in the standard EAS program since the late 1990's. 

Manistee/Ludington not only meets the legal criteria for “eligibility”, but also epitomizes 

the type of community the EAS program was intended to serve. The community is 

geographically isolated from the nation’s air transportation hubs:

• 264 miles / 4 hours 51 min driving time to MDW (large hub)

• 274 miles / 4 hours 23 min driving time to DTW (large hub)

• 282 miles / 5 hours 6 min driving time to ORD (large hub)

Manistee suffers isolation from all of the nation’s passenger transportation networks. The 

nearest Interstate Highway is 86 miles or 1 hour and 27 minutes away. Manistee is 

without passenger rail or regional bus service. The two-lane highway travel available to 

the community is slow and time consuming. Consequently, reliable air service to the 

community is essential to the region's continued economic development. 

According to a Boyd Group study commissioned by the Michigan Department of 

Transportation-Aeronautics Division, the Manistee County Blacker Airport has 

historically been experiencing 85% to 90% passenger leakage to other airports. By 

providing quality service at reasonable prices, we can improve significantly on the 

historic 10%-15% catchment as was demonstrated during Frontier’s brief time of service 

to Manistee.

If air service were to be discontinued, the direct and indirect impact on this region’s 

economy would be far reaching. Local businesses would be forced to use other airports 

considerably further away for their airline travel options. The local tourism industry 

would be equally affected by removing from tourists an important travel option into this 

region. Fewer businesses would choose to locate in the Manistee area in preference to 

other areas with commercial air service.
Manistee Blacker Airport Authority

Alternate Essential Air Service Proposal 6

Intent of Alternate EAS Pilot Program 

The Alternative EAS Pilot Program was established in order to allow subsidy eligible 

EAS communities to deviate from the traditional program in order to provide 

transportation services that were more beneficial to the individual community than those 

available under the traditional program. 

The Departments Notice announcing the establishment of the program addressed the 

purpose of the program as follows: 

Congress established this Pilot Program to provide communities with an 

alternative to the traditional EAS-type service. Typically, the EAS program pays 

subsidy to regional air carriers to provide two or three round trips a day to a major 

hub airport with 19-seat aircraft. The new Pilot program is designed to allow 

communities to forego their EAS for a prescribed amount of time in exchange for 

receiving a grant to spend in	a	variety	of	ways	that	might	better	suit	their	

individual	needs.	These options are spelled out in statute and include more 

frequent service with smaller aircraft, on-demand air taxi service, scheduled or 

on-demand surface transportation, regionalized	air service, or purchasing an 

aircraft.

We are implementing the Pilot Program by inviting communities to submit 

applications to use EAS funds in an alternative manner to address their 

transportation needs. We	will	use	an	open	and	flexible	format	for	applications	

because	we	recognize	that	each	community’s	circumstances	may	be	different,	

and	they	need	latitude	in	identifying	their	own	objectives	and	developing	

strategies	for	accomplishing	them.	At the same time, general, vague, or 

unsupported applications will not be entertained. The more highly defined the 

application, the more likely it will receive favorable consideration. (Emphases 

added)

The overall goal of the Program is described in the Notice as follows: 

“We seek proposals that are fully thought out and are designed to meet the 

individual needs of a community. We	encourage	proposals	that	have	the	

greatest	chance	of	increasing	passenger	usage	and	therefore	reducing	the	

need	for	future	subsidy	under	either	the	EAS	or	Pilot	Program.”

Summary of the Alternate Essential Air Service Proposal 

The Manistee Blacker Airport Authority desires to continue receiving air service in the 

same manner as it has for the previous two years under the Alternate EAS program. That 

is air transportation conducted by a Part 380 Indirect Air Carrier contracting with an FAA 

approved Part 135 and/or Part 121 direct air carrier. Such air transportation would be to a 

medium or large hub with twin-engine aircraft conducting regularly scheduled public 

charter flights. The frequency of flights will vary seasonally as required to meet demand. 
Manistee Blacker Airport Authority

Alternate Essential Air Service Proposal 7

Why Continue with Alternate Essential Air Service for Manistee?

There are two factors we believe are critical for successful air service at small rural 

communities like Manistee/Ludington. Those two being 1) quality reliable air service at 

a 2) reasonable price. Historically we have had neither at Manistee under the standard 

EAS program. With the exception of the 11 months of service provide by Frontier, 

reliability was always an issue with far too many flight cancellations and delays and fares 

were also high as compared to more distant airports. The combination of poor quality, 

unreliable service along with high average fares encouraged people to drive significant 

distances for more reliable and cost effective air service.

That has changed with our service the past two years under the Alternate EAS program.

During calendar year 2013 99% of all scheduled flights completed and 89% completed on 

time, including two months (March and September) where every flight (100%) completed 

on time. Even during this past harsh winter (where we have received a record amount of 

snow fall with over 200") 95% of flights completed and 85% completed on time (Dec '13 

- Feb '14).

Another measure of quality is the response from our passengers. As part of our overall 

marketing efforts we survey every passenger who flies out of Manistee in order to better 

understand their experience and needs for air service. In response to the following 

question: “How likely is it that you will recommend the Manistee Airport to others?” of 

those passengers who flew during 2013 and responded to the surveys, 91% responded 

“Very Likely”, 7% responded “Somewhat Likely” and only 2% responded “Not Likely.” 

The response to this question along with the responses to other survey questions indicate 

that the overwhelming majority of our passengers think highly of the quality of the 

service we are providing at the Manistee airport. 

Overall fares have remained reasonable as well. The average fare between Manistee and 

Chicago Midway was $86.74 each way in 2013. Standard pricing for round trip fares 

ranges from $120 to $240. By maxing out the fare at $240 RT, even a last minute 

purchase on a full flight is still available at a reasonable fare.

In addition to the quality of the service and reasonableness of the airfares, there are many 

other factors that lead us to want to continue with Alternate EAS. Among these other 

factors is the productive working relationship we have with Public Charters, which 

includes weekly meetings to discuss marketing strategy and efforts, good communication 

on all customer service issues, coordination on scheduling, pricing and customer service 

policies.

While participation in the Alternate EAS Program is orders of magnitude more work than 

standard EAS for the airport (and we warn all other airports who ask us about the

Alternate EAS program of this fact), we believe that it ultimately works better for us than 

standard EAS because the air carrier and the airport are working together as a team in 

order to be successful. That hasn’t been our experience with standard EAS. The nature 
Manistee Blacker Airport Authority

Alternate Essential Air Service Proposal 8

of Alternate EAS forces the air carrier and airport to work together which we believe is 

critical to success.

Even though the past two years under Alternate EAS has not been all rosy (with 

Aerodynamics’ bankruptcy, Corporate Flight Management’s delays in obtaining 

commuter authority), we feel that we need to continue with what we have started in order 

to build on the effort that we have invested. To return to standard EAS at this time would 

be premature. Only now after nearly two years of Alternate EAS service are we finally 

getting past the growing pains, and we feel it would be premature to end our experiment 

at this point in time. In fact we feel so confident in the long term benefits of what we 

have undertaken that we desire to not only continue with Alternate EAS, but to do so for 

an extended period of four (4) years instead of the more standard two (2) years.

Why Do We Reject the Standard EAS Proposal of Sun Air? 

In addition to all the reasons above why we believe that Alternate EAS is working for us 

and which we believe are reason enough for us to continue with the Alternate EAS 

program, there are also significant concerns we have with the one standard EAS proposal 

received by DOT in response to Order 2014-2-1 requesting proposals for standard EAS at 

Manistee. This proposal was submitted by Sun Air. The proposal contained two options. 

Option 1 entailed service to both Chicago Midway Airport and Milwaukee Airport with 

17 weekly flights off season (7 weekly to Milwaukee and 10 weekly to Chicago Midway) 

and 33 weekly flights during peak season (11 weekly to Milwaukee and 22 weekly to 

Chicago Midway) for a subsidy of nearly $3.2 million. Option 2 entailed service to only 

Milwaukee with 18 weekly flights off season and 24 weekly flights during peak season 

for a subsidy of nearly $2.6 million. All flights would be operated with twin engine Piper 

Chieftain aircraft with room for eight (8) passengers per flight.

The first concern we have with the Sun Air proposals is the viability of Milwaukee as a 

destination for our service. While we have had service to Milwaukee for the vast 

majority of the last decade, the situation at Milwaukee has significantly changed in the 

last two years, to the point that we no longer see it as a viable hub. During the entire 

period when we utilized Milwaukee, there was an air carrier operating there operating a 

true hub operation based in Milwaukee (Midwest Airlines and then Frontier). However 

since Frontier’s dehubing of Milwaukee there is no longer an air carrier conducting hub 

operations at Milwaukee. As a result the number of non-stop destinations served from 

Milwaukee is roughly half what it used to be and less than half of other regional airports 

which still have hub carriers based at them (ORD, DTW, MDW). While Milwaukee 

meets the technical definition of a medium hub airport, it does not have the connectivity 

to the national transportation system that a true “hub” airport has. While we realize that 

there is some O/D travel between northwest Michigan and southeast Wisconsin that does 

desire air service between the two regions, our survey information indicates that there is 

significantly more O/D demand between Chicago and northwest Michigan than southeast 
Manistee Blacker Airport Authority

Alternate Essential Air Service Proposal 9

Wisconsin and northwest Michigan. Therefore we eliminate Sun Air’s Option 2 from 

consideration.

That leaves Option 1 for consideration. The first concern about Option 1 is the total 

subsidy requirement. At almost $3.2 million that is about 50% greater than our current 

Alternate EAS grant. The second concern is with the proposed flight schedule. The 

proposed schedule has the aircraft based in Milwaukee. The effect of this is that the first 

flight of the day is Milwaukee to Manistee (and the last flight of the day is Manistee to 

Milwaukee). These flights are only conducive to O/D travel as they do not work for 

connecting to other flights in Milwaukee (morning flight leaves before most other 

connections would arrive in Milwaukee and the evening flight arrives in Milwaukee after 

most connecting opportunities). We feel that only by overnighting the aircraft in the 

spoke airport (Manistee in this case) can you most effectively service the non O/D 

passenger that intends to connect to other destinations. While this schedule does provide 

service to a true “hub” airport in Chicago Midway (Southwest Airlines largest hub) that 

amount of service is less than the demand that we have averaged during the current 

Alternate EAS period. For example during the most recent period we have averaged 9.0 

passengers per flight October 2013 through March 2014, with only 8 seats available on 

most days to Chicago we would need to have virtually 100% load factor to continue to 

service the demand we have built up through our marketing efforts around our current 

Chicago Midway service. So for these reasons we eliminate Option 1 as well.

Finally there are two other factors that come into play when reviewing the proposal from 

Sun Air. One being the poor reputation Sun Air has earned during their other EAS 

efforts. After talking to the managers at some of the airports they currently provide 

service to, the general feedback was not favorable. I realize that they claim in their 

proposal to have recently addressed their service issues with new management, but it is 

too early to tell if that is truly the case at this point. The last factor against Sun Air is the 

aircraft they operate. While a Piper Chieftain is a safe aircraft, it is not what our 

passengers tell us they want to fly on. Given that during significant parts of the last three 

years we have had service with regional jets, an eight passenger piston aircraft is not what 

our passengers have come to expect. We feel that a 19 seat turboprop is the minimum 

level of equipment that will be accepted by the local market. Anything less and it will be 

difficult to attract enough passengers to be successful. For these reasons we reject the 

Sun Air proposal.

When we use the word “reject” here in relation to Sun Air’s proposal, we realize that the 

proposal technically meets the requirements for EAS (at least two daily flights to a 

medium or large hub airport with two pilots and twin engines) and is a valid standard 

EAS proposal. However we reject it in the sense that we find the proposal inferior to our 

preferred Alternate EAS service proposal presented here for the above reasons. 
Manistee Blacker Airport Authority

Alternate Essential Air Service Proposal 10

Discussion of Important Aspects of the Alternate Essential Air Service Proposal 

One of the original reasons we desired to be the first to participate in the Alternate EAS

Program was to be able to utilize the flexibility inherent in the program to craft service 

that not only meets our needs best but also does so at what is hopefully less subsidy than 

otherwise would be required for standard EAS. We knew that our market is highly 

seasonal and what is appropriate in July is not appropriate in January as it relates to both 

frequency and total number of seats operated. The flexibility Alternate EAS provided us 

the ability to adjust frequency to the actual demand.

Table 1. The seasonality of passenger loads at Manistee from 2001-2010. This table shows the monthly 

passenger loads averaged over the decade. With 100 representing the average number of monthly 

passengers.

As the data in Table 1 shows, the historical passenger demand in Manistee is seasonal 

with July and August being the peak months and January and February being the low 

months. The difference between the winter and summer months is about 2.5 times. 

We have utilized the flexibility of Alternate EAS to adjust our schedule the last two 

summers to reflect this seasonality of demand. This coming summer we are going a step 

further and adjusting the schedule by day of week as well. In fact the currently published 

schedule for this coming summer (July and August) has flights varying by aircraft type 

during the week (mix of 19 seat and 30 seat aircraft) and frequency (some days have one 

frequency others two). This allows us to tailor capacity to the historical demand we have 

experienced the past two summers. For example a typical week of the summer schedule 

looks like this:

Monday: 38 seats inbound, 49 seats outbound

Tuesday: 19 seats inbound, 19 seats outbound

0	

20	

40	

60	

80	

100	

120	

140	

160	

180	

Feb	 Apr	 Jun	 Aug	 Oct	 Dec	

%	of	Average	Monthly	Passengers	

Average	
Manistee Blacker Airport Authority

Alternate Essential Air Service Proposal 11

Wednesday: 19 seats inbound, 19 seats outbound

Thursday: 38 seats inbound, 38 seats outbound

Friday: 49 seats inbound, 38 seats outbound

Saturday: 30 seats outbound, 19 seats inbound

Sunday: 49 seats inbound, 38 seats outbound

We believe that with the ability to tailor the schedule to the historical and anticipated 

demand we can operate more efficiently with higher load factors. This should over time 

reduce overall subsidy costs.

In the continued spirit of the flexibility that the Alternate EAS program provides, in this 

current proposal we are requesting the following additional areas of flexibility:

1) Hub Airport – While we are satisfied with Chicago Midway as our hub airport, we 

would like the opportunity to experiment with other large or medium hubs in the area. It 

may turn out that through such experimentation we discover something that works better 

than Chicago Midway or works in addition to Chicago Midway.

2) Non-stop vs. one-stop, downline and upline service – Traditionally we have had one or 

more stop service for the vast majority of the time we have had commercial air service, 

and only within the last few years have we had non-stop service. While we have seen 

that non-stop service seems to be vastly preferred to one-stop service, we may want to 

experiment with some one-stop service as well. Why would we consider this? 

Ultimately in order to reduce required subsidy amounts over time we need to increase 

revenue and lower costs. We can increase revenue by ensuring that we fly full(er) 

aircraft. We need to be reaching industry standard load factors of 75% or more in order 

to be successful in this measure. On the cost side of the equation, in the long term in 

order to reduce costs per passenger we need to be operating larger aircraft with high load 

factors. The cost per passenger for an 80% full 90 seat aircraft is less than an 80% full 50 

seat aircraft is less than an 80% full 19 seat aircraft, etc. To ultimately reduce subsidies 

we need to be operating high load factors on larger aircraft. To do that we need to be 

looking at ways to pool passengers from more than one airport. In the foreseeable future 

there will not be enough demand to fill aircraft larger than 50 seats solely from Manistee 

enplanements. We desire the flexibility to test combinations with other cities both 

downline and upline to see if we can identify something that works.

Level of Subsidy Requested

We have taken into account many factors in producing this proposal. We desire to have a 

reasonable level of service in order to satisfy the needs for air transportation in our 

communities. We also realize that we need to be good stewards of taxpayer funds. Also 

in requesting a four year grant we need to be confident that the amount is not only 

sufficient this year but also four years from now. To that end we are requesting 
Manistee Blacker Airport Authority

Alternate Essential Air Service Proposal 12

$2,328,103.54 per year to provide air service under the Alternate EAS program for a 

period of four (4) years. That amount of would subsidize up to 15,372 available seats 

between Manistee and Chicago Midway Airport or 2,889,936 available seat miles 

(ASM). We are requesting reimbursement under the Alternate EAS grant at a rate of 

$0.80559 per ASM flown. This reimbursement formula allows flexibility to operate 

different sized aircraft as well as the option to try service to different hubs than Chicago 

Midway if determined in the best interest of the community and airport during the term of 

this proposed four year agreement. We realize that this subsidy level is higher than that 

requested for the current agreement, but feel that the level of subsidy is consistent with 

other standard EAS agreements and is less than the bid provided by Sun Air for service to 

Manistee. In fact in comparing the level of subsidy requested under the Sun Air bid using

an apples to apples comparison method we find the subsidy level for Sun Air Option 1 is 

about $0.85929 per ASM as specified in their proposal ($3,184,192 / 3,705,601 ASM = 

$0.85929/ASM) and for their Option 2 the rate is $0.95066 ($2,595,134 / 2,729,825 ASM 

= $0.95066/ASM). So not only is our total subsidy request less than Sun Air’s proposal 

in terms of total dollar amount, it is also less on an ASM basis as well (which takes into 

account differences in the number of seats flown and the distances involved as these 

factors vary between Sun Air’s two options and our Alternate EAS proposal). In addition 

I believe the Sun Air proposals are incorrect in the stated number of ASMs in each 

proposal. I believe based on the number of departures documented and the flight 

distances between airports that they used 9 available seats on each aircraft for their ASM 

calculation instead of 8. Their proposal calls for only 8 passenger seats with two crew, so 

the correct number to use would be 8 available seats for their ASM calculation. Using 

this number we determine that the true costs of the Sun Air Option 1 is $0.96841 per 

ASM ($3,184,192 / 3,288,064 ASM = $0.96841/ASM) and Option 2 is $1.07604 per 

ASM ($2,595,134 / 2,411,756 ASM = $1.07604/ASM) both significantly higher than our 

proposal.

Unlike the proposal two years ago when very much was unknown (eg. costs at Midway 

were significantly underestimated) as we embarked on the unknown path of Alternate 

EAS, we are confident that our current proposal is reasonable and accurately reflects the 

costs to provide the service specified and we also believe that this rate (baring unforeseen 

circumstances like a significant spike in fuel prices for an extended period of time) is 

reasonable for a period of four years.

Detailed Alternate Essential Air Service Proposal

The details of the proposal are specified in a separate document that focuses on just the 

proposal request. This companion document is intended to provide context to the 

specifics in the detailed proposal.