BEFORE THE
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

____________________________________ In the matter of Essential Air service at ) ) KAKE, ALASKA ) Docket DOT-OST-2008-0217 EXCURSION INLET, ALASKA ) Docket DOT-OST-2002-12014 ) Answer of Air Excursions to Petition for ) Reconsideration of Order 2012-9-8 ) ____________________________________)

ANSWER OF AIR EXCURSIONS

TO THE PETITION FOR RECONSIDERATION

OF ORDER 2012-9-8 BY SEAPORT AIRLINES,

d/b/a WINGS OF ALASKA

Communications with respect to this document should be addressed to:

Kent Craford Air Excursions, LLC
Suite 115 1873 Shell Simmons Drive Juneau, AK 99801

October 1, 2012BEFORE THE
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

____________________________________ In the matter of Essential Air service at ) ) KAKE, ALASKA ) Docket DOT-OST-2008-0217 EXCURSION INLET, ALASKA ) Docket DOT-OST-2002-12014 ) Answer of Air Excursions to Petition for ) Reconsideration of Order 2012-9-8 ) ____________________________________)

ANSWER OF AIR EXCURSIONS
TO THE PETITION FOR RECONSIDERATION OF ORDER 2012-9-8 BY SEAPORT AIRLINES, d/b/a WINGS OF ALASKA

Seaport Airlines d/b/a Wings of Alaska (“Seaport”) has requested reconsideration of Order 2012-9-8. While none of the arguments made by Seap ort are either sufficient or appropriate to justify reconsideration, their arguments are either false or at the minimum incomplete. Air Excursions hereby responds to the petition of Seapo rt, as follows:

AIR EXCURSIONS IS A LOCAL AIRLINE TO JUNEAU

Air Excursions has operated from bases in Juneau an d Gustavus for over twenty years. Its previous owner, Mike Loverink, is still employed by Air Excursions and is a key manager in the operation. Mike Stedman, the new co-owner with Ken t Craford, was born and raised in Sitka and has made his home in Juneau for the last 24 yea rs. He has been flying in Southeast Alaska for the past 31 years. Mike is the President of th e Alaska Air Carriers Association and was appointed by Governor Parnell to serve on the Alask a Aviation Advisory board in 2010. Mike’s wife Lori is a native Alaskan and a shareholder in both Shee Atika and Sealaska. Mr. Stedman and Mr. Craford are also co-owners of Alaska Seapla ne Service.Air Excursions’ only operation is in Southeast Alas ka, and has no relation to operations outside

of Juneau. Air Excursions’ sister company Alaska S eaplane Service is another long time Juneau carrier that has an impeccable record of service, i ncluding Essential Air Service. These two carriers together serve more points from the Juneau Hub than any other scheduled carrier, and all aircraft and facilities used in the operation a re locally owned by Mr. Stedman and Mr. Craford or by Mr. Loverink.

THERE IS NO DISQUALIFYING SAFETY ISSUE AT AIR EXCUR SIONS

While Air Excursions did experience three unfortuna te incidents/accidents this summer, the thorough NTSB and FAA investigations of these event s have not found any operational deficiency on the part of the company. We encoura ge Department officials to contact the local F.A.A. investigator regarding these events if addit ional information is required. He can be reached through the Juneau Flight Standards Distric t Office.

Air Excursions is committed to a safety culture. T his is a posture it has developed over years of Part 135 operations in Southeast Alaska. Mike Sted man personally directed the implementation of the Medallion Safety Program at W ings of Alaska and Wings Airways when they became the first Part 135 operators in the sta te to obtain the Medallion Shield. Mike now sits on the board of the Medallion Foundation, and oversees the Medallion implementation at Air Excursions and Alaska Seaplanes.

Air Excursions and Alaska Seaplanes share a dedicat ed Safety Officer, who manages the companies’ safety program and training related to t he individual Medallion stars. This position, while not required by the F.A.A., was created by th e new ownership team.

Even after the unfortunate events of this summer, A ir Excursions has never injured a passenger and still has the second fewest accidents/incidents of any Juneau-based commuter operator, second only to our sister carrier Alaska Seaplanes which has a perfect safety record and no accidents/incidents.

USE OF LARGE AIRCRAFT OVER THE ROUTE

In its new proposal, Air Excursions assumes that th e 9-seat Piper Chieftain will be used for all service except in the case of maintenance events or unavoidable weather-related delays. The primary reason this commitment can be made is the s teady increase in traffic on the Kake route, and a demonstrated increase in efficiency of this aircraft and Air Excursions’ operations,
which have resulted in a reduction in unit costs. The Chieftain has a deicing system which Seaport’s permanent Juneau-based Caravans do not. Although slower than the Chieftain, the Caravan can provide excellent service, however the lower horsepower on the conventional Caravans operated by Seaport leaves them more susce ptible to icing on this long, over-waterroute with no alternate airfields. To that end, Ai r Excursions will be taking delivery of a Caravan

with 33% more power, full deicing equipment, and hi gher gross weights than those used by Seaport. This aircraft, which will be owned by Air Excursions’ ownership team and not leased from outside third parties as Seaport’s Caravans ar e, will have a lower fuel burn, longer TBOs and a lower cost overhaul—making it a significantly more economical aircraft versus a conventional, lower-powered Caravan. This aircraft will have several upgrades installed over the winter, and will be ready for service in Spring , 2013. It will be available for use on all Air Excursions schedules, including Kake, and at no add itional cost to the DOT for EAS subsidy.

AIR EXCURSIONS HAS REVERSED SEAPORT’S RECORD OF DEC LINING SERVICE AND TRAFFIC

Despite Seaport’s claims of inferior service by Air Excursions, the market has responded to this service well. The chart below, which was originall y submitted as part of the 2012 EAS bid, documents the drop in service and traffic when Seap ort took over from the prior carrier, L.A.B., in 2008. Service frequency improved immediately af ter Air Excursions took over service in 2010, and traffic has increased ever since then.

This steady growth trend is made possible by Air Ex cursions’ re-investment in its business and long-term commitment to the communities it serves. Air Excursions has spent twenty years in growing traffic and market share in the Juneau air service market, and is not interested in shortterm air service route experiments with low-introdu ctory fares that ultimately lead to unsustainable service.

0 500 1000 1500 2000 2500 3000 3500 4000 4500Flights/Passengers 

## KAKE PASSENGERS

& DEPARTURES

Departures
PassengersBETTER SERVICE AT LOWER COSTS

In meetings with Air Excursions this past spring, K ake leaders asked for more large aircraft service, and Air Excursions has responded. Not onl y has Air Excursions obtained additional 9- seat aircraft, it has improved utilization of its P iper Chieftain and has flown the aircraft on the Kake route routinely since the second week of Augus t and predominantly since the beginning of September. Air Excursions’ EAS payment invoices be ar this out. In 2010, Air Excursions’ bid based on the Chieftain was well below that of Seapo rt’s Caravan service. Since 2010, Air Excursions has been able to lower its unit costs, a gain resulting in a bid that is hundreds of thousands of dollars less than Seaport’s bid. Seap ort does not mention this fact, nor does it acknowledge its significantly higher subsidy cost p er passenger. Seaport now proposes a restricted lower cost fare that will save passenger s little, but represents a long-term threat to the sustainability of the service. It is a fare th at it never offered when it operated the EAS service previously, and is substantially lower per mile than any promotional fare Seaport currently offers.

SUMMARY

Over the last two years, Air Excursions has increas ed traffic while simultaneously reducing operating expenses, and therefore reduced subsidy n eed at Kake. Its new owners, including a respected local aviator, have added financial stren gth and innovation that have improved the quality of service and lowered costs. Air Excursio ns safety record is second only to that of its sister carrier, Alaska Seaplanes. With respect to Excursion Inlet, Air Excursions is supported by the community, has been serving the market for two weeks now, and has already received positive reviews.

Seaport’s petition is dilatory, and does not raise any issues of substance, or which provide justification for reconsideration of the order.

WHEREFORE: Air Excursions respectfully requests that the Depar tment deny the Petition for Reconsideration filed by Seaport Airlines d/b/a Win gs of Alaska.

Respectfully submitted,

Air Excursions, LLC By Kent Craford

October 1, 2012