BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

____________________________________

)

In the matter of the application of )

)

WINGS AIRWAYS ) DOCKET DOT-OST-2010-0023

)

For a certificate f public convenience )

And necessity under 49USC41102 )

____________________________________)

ANSWER IN OPPOSITION OF

ALASKA SEAPLANE SERVICE, LLC

Communications with respect to this document should be addressed to:

Craig Loken

Alaska Seaplanes Services

1873 Shell Simmons Drive

Juneau, AK 99801

(907) 789-3338

akseaplanes@alaska.com

February 16, 2010
1

BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

____________________________________

)

In the matter of the application of )

)

WINGS AIRWAYS ) DOCKET DOT-OST-2010-0023

)

For a certificate f public convenience )

And necessity under 49 USC 41102 )

____________________________________)

ANSWER IN OPPOSITION OF

ALASKA SEAPLANE SERVICE, LLC

Alaska Seaplane Service, LLC (Alaska Seaplanes) herein answers in opposition to the 

application of Wings Airways (Airways) for the certificate of public convenience and 

necessity. The application is false and misleading, and claims assets which Airways 

neither owns nor controls, and does not have access to. The float equipped deHavilland 

Otters aircraft it does have cannot be operated in the wheel plane markets it proposes for 

service. Furthermore, if one examines the assets Airways does have available, it appears 

that the real purpose of the application is to offer seaplane service which the applicant 

cannot show could be operated profitably with the aircraft on hand. For these reasons 

Airways cannot be found fit, willing and able to engage in scheduled interstate 

transportation of persons, property and mail.
2

THE APPLICATION IS FALSE AND MISLEADING

In Appendix H of its Application, Airways proposes the use of Cessna Caravan and 

Cessna 207 aircraft for the provision of all service in the three wheel plane markets 

proposed. Only those aircraft are proposed for use, and all calculations are computed 

using only those aircraft (flight speed, seating capacity, payload, unit costs). Appendix F 

lists five Caravan or C-207 aircraft by actual tail number as being the fleet of aircraft to 

be used.

The deception is that Airways has never had access to these aircraft and will not for the 

foreseeable future. The five aircraft listed in Appendix F are under lease to what would 

be a rival certificated air carrier, Alaska Juneau Aeronautics, Inc. d/b/a Wings of Alaska. 

While Airways includes an OST-6410 Certificate of Insurance in its application, the five 

aircraft proposed for service are notably absent. Appendix H is simply a spreadsheet 

exercise based on phantom aircraft.

The Application fails to provide any mention of ground handling of aircraft at Juneau or 

any of the three destination markets. The only passenger handling facilities available to 

Airways is for seaplanes-only on the waterfront in downtown Juneau near the cruise ship 

docking area, miles from Juneau International Airport. While this works very well for 

Airways’ existing business of transporting tourists during the summer, it is an 

inconvenient location for local and interline connecting passenger service on a year 

around basis, and the waterfront location cannot handle wheel planes. Airways does not 
3

have a ticket counter at Juneau International Airport, and the float pond at JIA is 

unavailable during most of the winter when it is frozen over.

Airways claims to have a 24,000 square foot maintenance and cargo facility on the 

Juneau International Airport. In fact, Airways is simply one tenant of the facility which 

is owned by a principal of Alaska Juneau Aeronautics, Inc. (AJA) which would be a 

direct competitor of the proposed operations, and which currently leases the five aircraft 

proposed for service by Airways. Seaplanes has no knowledge of what the actual 

relationship is among the various Wings named entities (Wings of Alaska, Wings 

Airways, Wings Airline Services), but clearly this Application assumes the availability of 

assets from all three business in order to operate as planned. The Department needs to 

examine the relationships among the three entities before determining that Airways, on 

its own, is fit, willing and able to operate the services proposed. At a minimum, the 

Department must request all executed leases for the five aircraft proposed for service. As 

noted in the application, the current leases are set to expire on March 31, but Seaplanes 

has been told that new leases or extensions of existing leases with modifications have 

been agreed to. The lease covering the maintenance and cargo facility should be 

examined to determine if Airways actually has access to freight and mail handling and 

storage facilities.

Finally, the application is deceptive and incomplete because it does not include a listing 

of setup and pre-operating expenses necessary to begin service. Airways simply says that 

it has the necessary cash to cover any expenses, but that begs the question of whether 
4

Airways knows what it has to do. Few if any of the pilots currently employed by 

Airways are current in the aircraft proposed for service. The pilots they have on staff are 

employed full time during the crucial summer period. Available counter space at Juneau 

International Airport is extremely limited, and Airways does not even mention the myriad 

of startup expenses associated with scheduled service. Even its operations spreadsheet 

exercise fails to provide a detailed description of costs or the references for the costs. 

The economic forecasts are difficult to understand let alone refute because of the lack of 

underlying detail.

THE APPLICATION APPEARS TO BE A BACKDOOR ATTEMPT TO PROVDE 

SEAPLANE SERVICE IN DIFFERENT MARKETS

If Airways was actually able to provide the service it proposes, Alaska Seaplanes would 

not have a competitive concern or need to question the application. Given that Airways 

cannot operate the services it proposes, the question is what it will really do if it achieves 

certification. The only aircraft available are straight-float (non-amphibious) Otters and 

Beavers. While there are waterfront facilities at Hoonah, Haines and Skagway, they are 

inconvenient, and are subject to interference by boats and cruise ships. There are no 

suitable passenger handling facilities at the waterfront sites, and the operations would 

require more logistical support than wheel aircraft operations. 

This brings us to the crux of the problem with the service proposal. Using the float 

planes it actually has, Airways cannot achieve either the operating results or financial 
5

results it proposes. The Otters and Beavers are substantially slower than the wheel 

aircraft they would replace, and have much higher operating costs per hour as well. 

These float plane services would compete with two well established wheel plane 

operators (AJA and Air Excursions) which can provide faster and less expensive service. 

During the winter Airways could not use Juneau International Airport because the float 

pond freezes over, and the scale of operations would be limited by daylight. While wheel 

plane operators can fly both day and night operations, float planes can fly only during 

daylight hours. The proposed operations can only be provided by the aircraft Airways 

does not have, and would be operationally and financially impossible with aircraft it does 

have.

Looking at the aircraft and personnel Airways does have, and the market experience 

claimed on page 5 of the application, it appears that the only markets which could be 

served are Angoon, Tenakee Springs, Pelican, Elfin Cove, Cube Cove and Hobart Bay. 

These markets are the heart of Alaska Seaplanes service area. Alaska Seaplanes is the 

Essential Air Service provider at Angoon, Tenakee, Pelican and Elfin Cove, and provides 

on-demand service to northern Southeastern Alaska including Hobart Bay. In order to 

serve Juneau International Airport, Alaska Seaplanes has invested in amphibious 

deHavilland Beavers to provide year around service at the airport. Even with subsidy, 

Alaska Seaplanes is marginally profitable and does not have the equity or cash of 

Airways. When AJA competed with Alaska Seaplanes at Angoon, Tenakee, Pelican and 

Elfin Cove, both carriers lost money. AJA eventually withdrew from the markets, selling 

all facilities and equipment to Alaska Seaplanes.
6

The current application of Airways is fatally flawed, and it cannot deliver the service it 

proposes. If the Department does issue a certificate, it must require that Airways operate 

the service it proposes and only the service it proposes through the one year 

demonstration period.

SCHEDULED FLOAT PLANE SERVICE WOULD RESULT IN SIGNIFICANT 

LOSES FOR AIRWAYS

Currently Airways operates a tourist oriented service offering area flightseeing as well as 

day trips to Taku Glacier Lodge for a salmon bake and cultural presentation. The 

primary market for these services is passengers from the dozens of cruise ship arrivals in 

Juneau each year. In addition to pre-sold passengers, Airways maintains its own 

ticketing facility to accommodate walk-up passengers on the Juneau waterfront. By 

operating only during the five month tourist season, Airways avoids the inevitably money 

losing off-peak operations. The seven month off-peak layover also allows very efficient 

maintenance and refurbishment of aircraft. Airways own projections show substantial 

losses during the seven off-peak months in the wheel plane markets. Alaska Seaplanes 

history shows consistent and sizable losses in the fourth and first calendar quarters, and 

consistent profits only in the third calendar quarter.

If Airways is to use the aircraft it has in the only markets where it can compete, it will be 

substantially worse off for it. First, it would have to take aircraft away from its very 
7

profitable core tourism service to provide scheduled service. Second, it would have to 

endure seven months or more of loss generating operations each year to maintain 

continuing fitness. Third, it would have to keep pilots, additional mechanics, ground 

crews, ticket counters and mail facilities open year around instead of shuttering the 

facilities during the winter as they now do.

THE APPLICATION IS DEFICIENT AND MUST BE DISMISSED

It is typical that an application can raise questions requiring further data or support. The 

Department is very patient in working with applicants who present a workable plan and 

apparently credible qualifications. In this case Airways proposes service using aircraft it 

does not have from facilities its does not possess using employees it does not employ. 

The service requires the cooperation of AJA, a putative competitor. The projected 

operating results are simply spreadsheet exercises with insufficient detail to support the 

findings or prove the competence of the applicant. The application is silent on 

preoperating expenses even though Airways does not have the necessary aircraft and does 

not service any of the terminals it proposes to use. Clearly Airways has very deep 

pockets for an operation this size, and apparently the shareholders are willing to pledge 

all of it in pursuit of this program. That alone is not sufficient to find the carrier fit, and 

clearly Airways is unable to provide the service it proposes. The Department should 

dismiss the application outright, or allow Airways to withdraw its application and have its 

application fee refunded pursuant to 14 CFR 389.27.
8

WHEREFORE, Alaska Seaplane Service respectfully requests that the application for a 

certificate of public convenience and necessity be dismissed because it does not provide 

the data necessary for approval, and is deceptive and misleading.

Respectfully submitted,

Alaska Seaplane Service, LLC

_________________________

By Craig Loken

February 16, 2010
9

CERTIFICATE OF SERVICE

I certify that I have this day had a copy of the foregoing Answer in Opposition served 

upon Wing Airways and all persons listed in the Certificate of Service appended to the 

application by first class mail.

_________________________

Craig Loken

February 16, 2010