### 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
. 1ATKA HOLD IN SUBSIDY
Aircraft- Saab 340 D istance 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-At ka $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 /l b 96,820* $132 , 643 Atka-Dutch Harbor $1.37 / lb 2,900* $ 3,973 TOTAL REVENUE S 

### $376,072 Expenses Directs: Flying Ops $250.56 /blk hr $78,175 Fuel & Oil $586.51 /b l k h r $182 ,991 Insurance $64.24 /blk hr $20 ,043 Ma i ntenance $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 @ 1 2.27% 12.27%**~** 71,714 Total lndirects 

### $188 ,881 TOTAL OPERATI NG EXPENS E 

### $n3, 344 Profit@ 5% $38,667 ECONOM IC COSTS



### . $8122 

### oo1 ANNUALIZED 

# I $435,929 

# I SUBSIDY


### * DOT Order 2012-2-8, Appendix B-2

I \DC

- 00472 1/000002

- 341 9756 v 1Aircraft G-21 Distance Passengers Payload Weekly RTs Annual R

_ T Flights Annual Departures B lock Time Block Hours
Revenue Passengers Dutch Harbor- N i kolski Nikolski-Dutch Harbor Freight Dutch Harbor- Nikolski Nikolski-Dutch Harbor Mail Dutch Harbor- Nikolski N i kolski

- Dutch Harbor TOTAL R EVE N UES Expenses Flying Ops Fuel & Oil Insu rance Maintenance Aircraft Total Directs Departure Related Traffic Related Capacity Related Total lndirects TOTAL OPERATI NG 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 v l