Adams, Kevin (OST) 

From: 

Sent: 

To: 

Cc: 

Subject: 

Attachments: 

Dear Dennis and Kevin, 

Cohn, Robert E. < robert.cohn@hoganlovells.com > 

Monday, June 11, 2012 4:04 PM 

Devany, Dennis (OST); Adams, Kevin (OST) 

Scott Bloomquist (Scott.Bioomquist@penair.com); Cohn, Robert E.; Rizzi, Patrick R.; 

Danny Seybert (Danny.Seybert@penair.com) 

Atka/Nikolski Hold In Compensation 

3419756_1.DOCX.docx 

Peninsula Airways (PenAir) requests that the Department establish hold-in subsidy rates for 

PenAir's provision of essential air service (EAS) at Atka and Nikolski, Alaska, beginning July 1, 2012, 

at an annualized rate of $435,929 for Atka and $907,157 for Nikolski as set forth in the attached 

forecast. The rates set forth in the attachment reflects PenAir's "fully allocated actual cost to the 

carrier'' for performing EAS at Atka and Nikolski in accordance with 49 U.S.C. 41734(e). The costs 

are based on the latest costs reported to the DOT by PenAir's in its Form 41 filings. Passengers, mail 

and freight traffic are based on the data contained in Appendices B-2 and B-3 of DOT Order 2012-2-

8. 

Let us know when you would like to discuss PenAir's proposal. We request that the 

Department issue an Order reflecting these hold-in compensation rates by July 1. 

Best regards, 

Bob 

Robert E. Cohn 

Partner 

Hogan Lovells US LLP 

Columbia Square 

555 Thirteenth Street, NW 

Washington, DC 20004 

Direct: + 1 202 637 4999 

Tel . + 1 202 637 5600 

Mobile + 1 703 203 8820 

Fax: + 1 202 637 591 0 

Email: robert.cohn@hoganlovells.com 

www.hoganlovells.com 

Please consider the environment before printing this e-mail. 

About Hogan Lovells 

Hogan Lovells is an international legal practice that includes Hogan Lovells US LLP and Hogan Lovells International LLP. For more information, see 

www .hoganlovells .com . 

1 
ATKA HOLD IN SUBSIDY 

Aircraft- Saab 340 

Distance 445 

Passengers 511 

Payload 7200 

Weekly RTs 2 

Annual RTs 104 

Annual Departures 208 

Block Time 1.5 

Block Hours 312 

Revenues 

Passenger: 

Dutch Harbor-Atka $263.97 263* $69,424 

Atka-Dutch Harbor $263.58 248* $65,368 

Freight 

Dutch Harbor- Atka $2.10 /lb 45,800* $96,180 

Atka-Dutch Harbor $2.10 /lb 4,040* $ 8,484-

Mail 

Dutch Harbor-Atka $1.37 /lb 96,820* $132,643 

Atka-Dutch Harbor $1.37 /lb 2,900* $ 3,973 

TOTAL REVENUES $376,072 

Expenses 

Directs: 

Flying Ops $250.56 /blk hr $78,175 

Fuel & Oil $586.51 /blk hr $182,991 

Insurance $64.24 /blk hr $20,043 

Maintenance $768.17 /blk hr $239,669 

Aircraft 4155.69 /blk hr $48,575 

Flight Attendant $48.11 /blk hr $ 15,010 

Total Directs $584,463 

lndirects: 

Departure Related @ $460.20 /dpt $ 95,722 

Traffic Related @ 12.95% 12.95% $75,688 

Capacity Related @ 12.27% 12.27% ~ 71,714 

Total lndirects $188,881 

TOTAL OPERATING EXPENSE $n3,344 

Profit@ 5% $38,667 

ECONOMIC 

COSTS . $8122

oo1 

ANNUALIZED 

SUBSIDY I $435,929 I *DOT Order 2012-2-8, Appendix B-2 

I \DC - 004 721/000002 - 341 9756 v 1 
Aircraft G-21 

Distance 

Passengers 

Payload 

Weekly RTs 

Annual R_T Flights 

Annual Departures 

Block Time 

Block Hours 

Revenue 

Passengers 

Dutch Harbor- Nikolski 

Nikolski-Dutch Harbor 

Freight 

Dutch Harbor- Nikolski 

Nikolski-Dutch Harbor 

Mail 

Dutch Harbor- Nikolski 

Nikolski-Dutch Harbor 

TOTAL 

REVENUES 

Expenses 

Flying Ops 

Fuel & Oil 

Insurance 

Maintenance 

Aircraft 

Total Directs 

Departure Related 

Traffic Related 

Capacity Related 

Total lndirects 

TOTAL OPERATING 

EXPENSE 

Profit@ 5% 

ECONOMIC 

COSTS 

ANNUAL 

SUBSIDY 

NIKOLSKI HOLD IN SUBSIDY 

$154.56 

$154.07 

$0.72 

$0.72 

$1 .37 

$1 .37 

$843.39 

$314.19 

$263.34 

$1,665.60 

$117.06 

@$122.72** 

@12.95% 

@12.27% 

116 

132* 

1800 

2 

104 

208 

1.1 

229 

/lb 

/lb 

/lb 

/lb 

/blk hr 

/blk hr 

/blk hr 

/blk hr 

/blk hr 

65 

67 

46,740* 

3,880* 

18,220 

1,780 

Per 

Dep. 

$ 10,046 

$ 10,323 

$33,653 

$2,794-

$24,961 

$2,439 

$84,21 6 

$193,136 

$71,950 

$60,305 

$381 ,422 

$26,807 

$733,620 

$ 25,526-

$95,004 

~ 90,015 

$210,545 

$944,165· 

$47,208 

·· $991,373 

I $907,157 

*Order 2012-2-8, Appendix B-3 **$15.34 per seat x 8 seats=$122.72 

"DC · 004721 i000002 · 3419756 vl