Befor e th e

• J " EA S & Domesti c Analysi s Division , X-5 3 — Offic e o f Aviatio nAnalysis , Roo m640 1 Departmen t

o f Transportatio n 40 0 7t hStreet , S.W
. Washington , D.C
. 2059 0

I n th e Matte r

of: ESSENTIA LAI RSERVIC EA T MINT O AN D MANLEY , ALASK A Docke t OS T 2004-1756 3 Unde r 4 9 U.S.C
. 4173 1 e t

seq .



## Proposa l t o Provid e Essentia l Ai r Servic e a t

Mint o an dManle y Ho t Springs , Alask a
Warbelow' s herb y submit s it s proposa l t o continu e subsidize dservic e t o Manl y an d Minto , Alask abeginnin g Septembe r 1 , 2010
. Becaus e o f

th e runwa y condition s at Manle y an dMinto , servic e ha s historicall y bee n provide dwithsingl e engin e aircraft
. Sinc e th e las t subsid y proposa l i n2008 , th e Mint o runwa y ha s bee nrebuilt , an dca n no w easil y support large r aircraft , howeve r

ther e i s stil l n o IFR approach
. Th e Manle y runwa y w e expec t wil l b e rebuil t

i nth e nex t

1- 4 years , bu t

i s continue s t o b e mos t suitabl e for

single engin e aircraft
. Warbelow' s i s currentl y providin g servic e with Cessn a20 6 aircraft , an dbase s thi s proposa l o nthre e day s pe r wee k servic e withsingl e engin e aircraf t withfour insure dpassenge r

seats , withth e balanc e o f th e capacity reserve dfor mai l an d freight
. Revenu e projection s ar e basedo nth e laggin g four quarter s o f

dat athroug hDecembe r

31 , 2009 , a s w e expec t

similar traffi c ove r

th e propose dsubsid y period
. Ou r cos t dat ai s basedo n our historica l cost s ove r

th e previou s year . W e hav e mad e n o adjustment s for inflation
.

## Rate s

Orde r 2010-3-1 8 se t

ne w mai l rate s tha t

w e hav e use dt o calculat e mai l revenu e ove r th e subsid y period :

RT M $$13.478 2 Terminal/To n Enplane d$745.0 1 Fairbanks-Manle y 8 3 mile s Fairbanks-Mint o 5 0 mile s Therefor e th e P-13 5 rat e for Manle y wil l b e $0.94/poun dan dfor Mint o $0.71/pound

. Curren t passenge r

fare s an dcarg o rate s ar e use di nthes e calculations
. Thes e reflec t n o chang e ove r

th e curren t

subsid y period
. 

## Schedul e Th e followin g schedul e ha s bee npublishe di nth e OA Gan di s currentl y bein g operated
. W e propos e t o continu e thi s schedul e a s it serve s th e village s well
. Durin g th e winte r months , servic e mus t

b e provide dmi dday whe nligh t permit s a s thes e ar e bot hVF Ronl y destinations
.

Arriv e Depar t Fairbank s 094 5 Bloc k Tim e Tota l Tim e Manle y 102 5 103 0 5 0 m i n Mint o

11:2 5 11:3 5 3 0 mi n Fairbank s

12:0 5 3 2 mi n 1. 9 Fligh t time s hav e bee n update dbase do nou r actua l experienc e ove r

previou s years . Ove r th e tw o yea

r analysi s period , estimate dhour s the nare : 5 2 week s x 3 flight s pe r

wee k x 1. 9 hour s pe r

fligh t = 296. 4 hour s 

## Projecte dDeman d Passenger , carg o an dmai l traffi c i s base do nou r actua l reporte dvolume s for 2009 , whic h vary somewhat

fro mth e histori c number s provide di nth e Orde r Requestin g Proposals
. W e canno t explai n th e differences , bu t believ e th e number s presente dher e reflec t accuratel y th e number s w e hav e previousl y reporte dt o DO T o nou r TlO O an dF 2 reports . Continue dmigratio n of

Nativ e peopl e t o th e urba ncenter s o f Fairbank s an dAnchorag e hav e limite dmai l an dpassenge r traffic
. W e hav e projecte dpassenge r revenu e t o remai n constant . W e hav e n o basi s for projecting continue dgrowthi nth e market , a s hig henerg y costs , poo r salmo n run s o n th e Yuko n an ddecline s i nfedera l spendin g hav e put asubstantia l dampe r o n economi c activity in rura l villages , an deve ndrive napopulatio ndeclin e a s resident s mov e t o Anchorag e an dFairbanks
.

## Projecte dRevenu e

Passenqe rRevenue Manle y Mint o Les s Passenge rTa x7.5 % Passenge rTota l Carg o Revenu e Manle y Mint o Carg o Tota l Mai l Revenu e Manle y Mint o Mai l Tota l Tota l Revenu e Pax 3 2 21 0

Pound s 153 5 275 7

Pound s 2797 0 2305 6 Rat e 0.9 4 0.7 1 Far e 85.0 0 79.0 0

Rat e 0.4 9 0.4 0 Total s

2,720.0 0 16,590.0 0 1,347.2 1 17,962.7 9
752.1 5 1.102.8 0 1,854.9 5

26,291.8 0 16.369.7 6 42,661.5 6 $62,479.3 0 

## Projecte dExpense s Mos t cost s hav e continue dt o increas e ove r th e las t tw o years , withth e exceptio no f hul l an d liability insuranc e whic hi s at th e botto mo f

asof t market
. Fue l cost s hav e bee no nanupwar dtren dove r th e pas t year , an dw e expec t

ma y continu e t o increas e a s th e econom y recover s fro mrecession
. W e hav e no t projecte dan y fuel cos t

increases
.
Allocate d Bloc k

Hour s Direc t Expens e Pilo t & Co-pilo t Fue l & Oi l Othe r Maintenanc e Depreciation/Renta l Tota l Direct Expens e Indirect Expens e 296. 4 hr @ $135.5 1 Tota l Operatin g Cos t Profi t Elemen t o f TOC = Tota l Economi cCos t 296. 4

prh r
0.1 0 69.5 4 51.7 7 16.2 5 131.4 1 80.0 0 20611.6 6

15344.6 3 4816.5 0 38949.9 2 23712.0 0 $103,434.7 1
40165.1 6 143599.8 7 14359.9 9 $157,959.8 6

## Subsid y Reques t

Tota l Operatin g Cos t $143,599.8 7 Profi t Elemen t @ 10 % of TO C 14,359.9 9 Tota l Economi cCos t $157,959.8 6 Projecte d Revenu e $62,479.3 0 Subsid ynee d a t 100 % Completio n $95,480.5 6 Subsid yo n a n annua l basi s $95,480.5 6
Th e tota l subsid y reques t the n i s $190,961,1 2 ove r atw o yea r

period
. Ove r

th e 2008-201 0 subsid y period , thi s represent s amodes t cos t decreas e a s wel l a s aslightl y large r deman d decrease
. Than k yo u for you r consideratio n o f

thi s proposal
. Sincerely , Warbelow' s Ai r

Ventures , Inc
. 375 8 Universit y Avenu e South Fairbanks , Alask a

Arthu r Warbelow , Presiden t ai1@warbelows.co m (907 ) 378-720 3