Order 2010-12-7 

Served: December 3, 2010 

UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Issued by the Department of Transportation 

on the 3"* of December, 2010 

Essential Air Service at 

ANGOON, ALASKA, AND 

TENAKEE, ALASKA 

Under 49 U.S.C. 41731 et seq. 

DOCKET OST-2006-25542 

DOCKET OST-2006-25542 

ORDER RESELECTING CARRIER 

Summary 

By this order, the Department is reselecting Alaska Seaplane Service, LLC, to provide essential 

air service (EAS) at Angoon and Tenakee, Alaska, at annual subsidy rates of $145,734 at Angoon 

and $135,576 at Tenakee, from February 1, 2011, through January 31, 2015. 1 

Background 

Order 2008-12-27 selected Alaska Seaplane to provide ten round trips per week in the peak and 

five in the off-peak to Angoon, and seven round trips per week in the peak and three in the offpeak to Tenakee, at annual subsidy rates of $101,359 and $63,748, respectively. All of the 

service was to be provided on a nonstop basis to Juneau with DeHavilland Beaver aircraft. In 

anticipation of the end of the current contract, by Order 2010-9-16 we requested proposals for 

replacement service. We received a proposal from only one carrier, Alaska Seaplane, and 

requested comments from the communities and state. We received informal comments from the 

state, and the issue is ripe for decision. 

Carrier Proposal 

Alaska Seaplane was the only carrier to submit a proposal, and its proposal included only one 

option for the same service as currently selected, with combined subsidy of $281,310, as 

follows: 2 

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of appropriated funds. 

2 Alaska Seaplane initially requested total annual subsidy for Angoon and Tenakee combined of $333,485. 
-2 

Angoon Ten nonstop round trips per week to Juneau in the 18-week peak and five nonstop 

round trips per week in the 34-week off-peak for $145,734 annual subsidy. All of the service 

would be operated with single-engine DeHavilland Beaver aircraft. 

Tenakee Seven nonstop round trips per week to Juneau in the 18-week peak and three nonstop 

round trips per week in the 34-week off-peak for $135,576 annual subsidy. All of the service 

would be operated with single-engine DeHavilland Beaver aircraft. 

Community Comments 

The communities and state continue to support the EAS provided by Alaska Seaplane, and state 

that: 

"Due to the isolated location of these communities and the complete lack of any roadsystem connection, this subsidized air service is their only form of scheduled 

transportation. The communities of Angoon and Tenakee depend on scheduled air 

freight, passenger, and mail service for basic necessities, routine medical and health 

services, and economic welfare." 

Decision 

Alaska Seaplane is the only carrier to submit a proposal, it submitted only one option, and we 

have decided to select it, adjusted for the reduced subsidy level it agreed to, for a four-year 

period, February 1, 2011, through January 31, 2015. We find that the carrier's proposed service 

and subsidy levels are reasonable, and we are not aware of any reason why we should not reselect the carrier to provide the proposed level of service. 

The Department shall make this selection contingent upon our receiving properly executed 

certifications from the carrier that it is in compliance with the regulations regarding drug-free 

workplaces and nondiscrimination, as well as the regulations govemmg lobbying activities. 

Carrier Fitness 

49 U.S.C. 41737(b) and 41738 requires that DOT find an air carrier fit, willing, and able to 

provide reliable service before DOT may subsidize it to provide essential air service. Alaska 

Seaplane Service, LLC. is subject to the Department's continuing fitness requurements, and no 

information has come to our attention that would cause us to question the carrier's fitness at this 

time. DOT has contacted the Federal Aviation Administration, and it has raised no concerns that 

would negatively affect our fitness findings. DOT therefore concludes that the carriers remain fit 

to conduct the operations proposed here. 

This order is issued imder authority delegated in 49 CFR 1.56a(f). 

ACCORDINGLY, 

1. We reselect Alaska Seaplane Service, LLC, to provide essential air service at Angoon and 

Tenakee, Alaska, as described in Appendix C; 
3-

2. We direct Alaska Seaplane Service, LLC, to retain all books, records, and other source and 

summary documentation to support claims for payment, and to preserve and maintain such 

documentation in a manner that readily permits its audit and examination by representatives of 

the Department. Such documentation shall be retained for seven years or until the Department 

indicates that the records may be destroyed, whichever comes first. Copies of flight logs for 

aircraft sold or disposed of must be retained. The carrier may forfeit its compensation for any 

claim that is not supported under the terms of this order; 

3. We find that Alaska Seaplane Service, LLC, continues to be fit, willing and able to operate as 

a certificated carrier and capable of providing reliable essential air service at Angoon and 

Tenakee, Alaska; 

4. This docket will remain open until further order of the Department; and 

5. We will serve copies of this order on the Office of Statewide Aviation of the Alaska 

Department of Transportation and Public Facilities, and Alaska Seaplane Service, LLC. 

By: 

Susan L. Kurland 

Assistant Secretary for 

Aviation and International Affairs 

(SEAL) 

An electronic version of this document is available on the World Wide Web at 

http://www.regulations.gov 
Appendix A 

\\r/ 

Great Circle Miles to Juneau (JNU) 

Angoon (AGN) 

Tenakee (TKE) 

Hoonah, HNH 

Pelican (PEC) 

Elfin Cove (ELV) 

Gustavus (GST) 

59 

50 

35 

67 

64 

41 

Excursion Inlet (EXI) 32 

Haines (HNS) 

Skagway (SGY) 

70 

81 
Appendix B 

Annual Subsidy Need at Angoon and Tenakee, Alaska 

Docket 2006-25542 

Aircraft Type 

Block Hours 

Departures 

Passenger 3/ 

Freight 

Mail 

Total Revenue 

Angoon 

DHC-2 

513 1/ 

700 1/ 

$178,083 

$27,743 

$51,222 

$257,048 

Tenakee 

DHC-2 

304 2/ 

456 2/ 

$60,634 

$15,136 

$27,340 

$103,110 

Total 

DHC-2 

817 

1,156 

$238,717 

$42,879 

$78,562 

$360,158 

Cost @ $785.15/hr. $402,782 $238,686 $641,468 

Annual Subsidy $145,734 $135,576 $281,310 

1/ 

Peak 18 weeks x 20 flights in each direction x 44 min/60 •• 

Off-Peak 34 weeks x 10 flights in each direction x 44 min/60 • 

2/ 

Peak 18 weeks x 14 flights in each direction x 40 min/60 = 

Off-Peak 34 weeks x 6 flights in each direction x 40 min/60 = 

BIk. Hrs. 

264 

249 

513 

BIk. Hrs. 

168 

136 

304 

Flights 

360 

340 

700 

Flights 

252 

204 

456 

3/ Based on $106.25 average passenger fare. 
Appendix C-1 

Alaska Seaplane Service, LLC, Essential Air Service to be Provided to 

Angoon, Alaska, Dockets OST-2006-25542 

Effective Period: February 1, 2011, through January 31,2015. 

Scheduled Service: Ten nonstop round trips per week in the peak and seven nonstop round trips 

per week in the off-peak to Juneau. 

Aircraft: DeHavailland Beaver, six seats 

Weekly Ceiling: $2,803 1 

Rate per Eligible Flight: Peak, 18 weeks, $140.15; Off-Peak, 34 weeks, $200,212 

Note: The carrier understands that it may forfeit its compensation for any flights that it does not operate in conformance 

with the terms and stipulations of the rate order, including the service plans outlined in the order and any other significant 

elements of the required service, without prior approval. The carrier understands that an aircraft take-off and landing at its 

scheduled destination constitutes a completed flight; absent an explanation supporting subsidy eligibility for a flight that 

has not been completed, such as certain weather cancellations, only completed flights are considered eligible for subsidy. 

In addition, if the carrier does not schedule or operate its flights in full conformance with the order for a significant period, 

it may jeopardize its entire subsidy claim for the period in question. If the carrier contemplates any such changes beyond 

the scope of the order during the applicable period of this rate, it must first notify the Office of Aviation Analysis in 

writing and receive written approval from the Department to be ensured of full compensation. Should circumstances 

warrant, the Department may locate and select a replacement carrier to provide service on these routes. The carrier must 

complete all flights that can be safely operated; flights that overfly points for lack of traffic will not be compensated. In 

determining whether subsidy payment for a deviating flight should be adjusted or disallowed, the Department will 

consider the extent to which the goals of the program are met and the extent of access to the national air transportation 

system provided to the community. 

If the Department unilaterally, either partially or completely, terminates or reduces payments for service or changes 

service requirements at a specific location provided for under this order, then, at the end of the period for which the 

Department does make payments in the stipulated amounts or at the stipulated service levels, the carrier may cease to 

provide service to that specific location without regard to any requirement for notice of such cessation. Those adjustments 

in the levels of subsidy and/or service that are mutually agreed to in writing by the Department and carrier do not 

constitute a total or partial reduction or cessation of payment. 

Subsidy contract are subject to, and incorporate by reference, relevant statutes and Department regulations, as they 

may be amended from time to time. However, any such statutes, regulations, or amendments thereto shall not 

operate to controvert the foregoing paragraph. 

Funds are not currently available for performance under this order beyond December 3, 2010. The Government's 

obligation for performance under this order beyond December 3, 2010, is subject to the availability of appropriated 

funds from which payment for services can be made. No legal liability on the part of the Government for any 

payment may arise for performance under this order beyond December 3, 2010, until funds are made available to the 

Department for performance. If funds are not made available for performance beyond December 3,2010, the 

Department will provide notice in writing to the carrier. 

All claims for payment must be submitted within 60 days of the last day of service provided under this order. 

1 $145,734 annual subsidy -f 52 weeks. 

2 Peak: $2,803-f 20 flights; Off-Peak: $2,803 ^ 14 flights. 
Appendix C-2 

Alaska Seaplane Service, Inc., Essential Air Service to be Provided to 

Tenakee, Alaska, Dockets OST-2006-25542 

Effective Period: February 1, 2011, through January 31, 2015. 

Scheduled Service: Seven nonstop round trips per week in the peak and three nonstop round trips 

per week in the off-peak to Juneau. 

Aircraft: DeHavailland Beaver, six seats 

Weeklv Ceiling: $2.607' 

Rate per Eligible Flight: Peak, 18 weeks, $186.21; Off-Peak, 34 weeks, $434.50^ 

Note: The carrier understands that it may forfeit its compensation for any flights that it does not operate in conformance 

with the terms and stipulations of the rate order, including the service plans outlined in the order and any other significant 

elements of the required service, without prior approval. The carrier understands that an aircraft take-off and landing at its 

scheduled destination constitutes a completed flight; absent an explanation supporting subsidy eligibility for a flight that 

has not been completed, such as certain weather cancellations, only completed flights are considered eligible for subsidy. 

In addition, if the carrier does not schedule or operate its flights in full conformance with the order for a significant period, 

it may jeopardize its entire subsidy claim for the period in question. If the carrier contemplates any such changes beyond 

the scope of the order during the applicable period of this rate, it must first notify the Office of Aviation Analysis in 

writing and receive written approval from the Department to be ensured of full compensation. Should circumstances 

warrant, the Department may locate and select a replacement carrier to provide service on these routes. The cartier must 

complete all flights that can be safely operated; flights that overfly points for lack of traffic will not be compensated. In 

determining whether subsidy payment for a deviating flight should be adjusted or disallowed, the Department will 

consider the extent to which the goals of the program are met and the extent of access to the national air transportation 

system provided to the community. 

If the Department unilaterally, either partially or completely, terminates or reduces payments for service or changes 

service requirements at a specific location provided for under this order, then, at the end of the period for which the 

Department does make payments in the stipulated amounts or at the stipulated service levels, the cartier may cease to 

provide service to that specific location without regard to any requirement for notice of such cessation. Those adjustments 

in the levels of subsidy and/or service that are mutually agreed to in writing by the Department and cartier do not 

constitute a total or partial reduction or cessation of payment. 

Subsidy contract are subject to, and incorporate by reference, relevant statutes and Department regulations, as they 

may be amended from time to time. However, any such statutes, regulations, or amendments thereto shall not 

operate to controvert the foregoing paragraph. 

Funds are not curtently available for performance under this order beyond December 3, 2010. The Government's 

obligation for performance under this order beyond December 3,2010, is subject to the availability of appropriated 

funds from which payment for services can be made. No legal liability on the part of the Government for any 

payment may arise for performance under this order beyond December 3, 2010, until funds are made available to the 

Department for performance. If funds are not made available for performance beyond December 3, 2010, the 

Department will provide notice in writing to the carrier. 

All claims for payment must be submitted within 60 days of the last day of service provided under this order. 

' $135,576 annual subsidy -^ 52 weeks. 

2 Peak: $2,607^ 14 flights; Off-Peak: $2,607 •=• 6 flights.