130 Iolana Place, Honolulu, Hawaii 96819

July 11, 2014

Dear Sir/Madam:

Please find enclosed our proposal to provide Essential Air Services to the community of Merced, California, under

Order 2014

‐ 5

‐ 9. Schuman Aviation Co. Ltd. Dba Wine Country Express proposes serving the community of Visalia

with twenty six weekly flights between Merced and Los Angeles utilizing a nine passenger Cessna Grand Caravan

aircraft. We offering a second option which offers 9 passenger aircraft for years one and two and 19 passenger

aircraft for years three and four. With daily departures to and from Los Angeles, the residents of Merced can

connect to other flights in Los Angeles or arrive and depart at convenient times if Los Angeles is their end

destination. We are proposing a four year service plan, thus providing the community with much needed

continuity and reliability.

Schuman Aircraft Ltd. Dba Wine Country Express will provide the same dedication to serving the Visalia

community as we have provided to our essential air service routes in Hawaii. The residents of Molokai are

extremely pleased with the service and reliability that they receive from Schuman Aviation Ltd. Wine Country

Express is based in California and is responsive to the needs of California residents.

Sincerely, 

### Richard Schuman

Richard Schuman

President

808

‐ 834

‐ 5813

richard@makanikai.com

Toll Free: (877) 255-8532 ~ Local Number: (808) 834-1111 ~ Fax: (808) 837-7867 ~ email:

info@makanikaiair.com1

Wine Country Express EAS Proposal 

## SCHUMAN AVIATION LTD. DBA WINE COUNTRY EXPRESS

PROPOSAL TO PROVIDE ESSENTIAL AIR SERVICES

MERCED, CALIFORNIA

Dated: July 11, 2014

Order: 2014

‐ 5

‐ 9

Served: May 21, 2014

Docket: DOT

‐ OST

‐ 1998

‐ 35212

Wine Country Express EAS Proposal 

### Schuman Aviation Co, Ltd. DBA Wine Country Express Proposal to Provide Essential Air

Services to Merced, California

Summary:

This proposal for essential air services to the community of Merced, California is submitted by Schuman

Aviation, LTD. DBA Wine Country Express. The proposal is submitted under the United States of

America, Department of Transportation, Office of the Secretary, Washington, DC request for proposal,

under order 2014

‐ 5

‐ 9, dated May 21, 2014.

Background:

Schuman Aviation Ltd., based in Honolulu, Hawaii, was founded in 1996 by Richard Schuman. The

Schuman family is well known in Honolulu with roots that are traced back to 1893 when Gustav

Schuman founded one of the first automobile dealerships in Hawaii. The company’s mission is to

provide impeccable customer service at an affordable fare. Schuman is also the founder of Makani Kai

Helicopters, which, since 1988, provided more than 14,000 aerial tours without incident. Makani Kai has

received many awards and accolades, including:

.FAA’s Diamond Award for maintenance excellence.

.First aircraft operator in the US to receive the coveted IS

‐ BAO safety certification.

.Awarded annual contract to provide helicopters and pilots for “Hawaii Five 0.

Schuman Aviation is an FAA certified Part 135 scheduled commuter operation awarded by the

Department of Transportation in 2010. Another Schuman holding, Hawaii Aviation Services is an FAA

Part 141 repair station.

Wine Country Express is a newly founded commuter airline based in California. The principals of Wine

Country Express number more than 60 collective years in the aviation sector. The principals of the

company have extensive experience in distribution, airline specific accounting, aircraft maintenance and

flight operations. The company was founded to provide scheduled services to the small communities in

California who require service that the major airlines are no longer providing.3

Wine Country Express EAS Proposal Previous EAS experience:

Schuman Aviation Ltd, was recently awarded the Essential Air Service subsidy for Molokai, Hawaii. This

is the second EAS award made to Schuman. The renewed contract is widely acclaimed by the citizens of

Molokai. Please refer to the testimonials included in this document.

Equipment:

Schuman Aviation Ltd. Dba Wine Country Express proposes to serve the community of Merced with the

Cessna 208B Grand Caravan. The Grand Caravan is an extremely reliable nine passenger aircraft which is

in wide use throughout the world. The Caravan is currently in production and is one of the largest and

safest aircraft of its size and range. Cessna is internationally recognized as one of the best known and

reliable aircraft manufacturer’s in the world.

The Grand Caravan is configured with nine, very comfortable seats. The cabin is air conditioned and

heated assuring passenger comfort. Each aircraft is equipped with auto

‐ pilot and sophisticated weather

radar. Pratt Whitney is the supplier of the engine fitted on the Grand Caravan. A large cargo pod

accommodates onboard luggage storage.

Option one provides four years of service to and from Merced utilizing an Cessna Grand Caravan aircraft

operating 26 flights weekly. Option two provides two years of service to the community utilizing the

Cessna Grand Caravan for a two year period followed by two years of operation aboard a nineteen

passenger Beech 1900 aircraft. The assumption is that the demand for larger aircraft is inherent in the

community but that the cancellations and erratic schedule of the last few years results in a lower

demand.

The Beech 1900 is a pressurized aircraft equipped with PT6A

‐ 65 turbo prop engines. It is manufactured

by Raytheon and is considered one of the most efficient and reliable aircraft in operation.

Both aircraft are operated with a two man crew.

Flight Schedule:

Our proposed flight schedule is based on feedback from Merced residents and city officials. The goal is

to provide service that offers good connections with other airline carriers, accommodating the onward

travel needs of the passenger.

We are proposing a schedule that includes 26 flights weekly between Merced and Los Angeles. Please

refer to the following proposed schedule. The proposed schedule is also intended to serve the needs of4

Wine Country Express EAS Proposal the business traveler assuring a full day for meetings with a convenient return flight at the end of the

day.



## Proposed Schedule for Merced

This proposed schedule is informational in nature, actual flight times may vary depending on the operational

requirements of the airline and convenience of the people of Merced.

Merced to Los Angeles Option 1 four years

Depart Arrive Frequency

6:30 a.m. 7:30 a.m. Ex Sunday

12:15 p.m. 1:15 p.m. Daily

Los Angeles to Merced

Depart Arrive Frequency

9:30 a.m. 10:30 a.m. Ex Sunday

4:00 p.m. 5:00 p.m. Daily

Merced to Los Angeles Option 2 two years with 9 pax

aircraft/two years with 9 pax aircraft, two years with

19 pax aircraft

Depart Arrive Frequency

7:00 a.m. 7:38 a.m. Daily

Los Angeles to Merced

Depart Arrive Frequency

5:00 p.m. 5:38 p.m. Daily

Counter Services:

Service at the Merced counter will be staffed by professional, well trained customer service agents who

will assist the passenger with boarding and stowing their luggage. This staff is also available at clearly

marked hours to assist with future reservations, if needed. The counters will be marked with company

logos and maintained in good order.5

Wine Country Express EAS Proposal Reservations:

Schuman Aviation LTD dba Wine Country Express, utilizes a modern easy to use computerized

reservations system that provides access to hotels, cruises and car rentals. Wine Country Express flights

are listed on most online travel agencies like Orbitz, Priceline, Expedia, etc.

Wine Country Express also provides a sophisticated, easy to use booking engine on it’s website.

Alternatively, reservations can be made by telephone with our knowledgeable customer service agents.

Interline Agreements:

Wine Country Express offers interline capabilities through our association with a well

‐ known major

airline. These arrangements facilitate the easy transfer of passengers and their bags to interline

partners.

Passenger Fares:

Wine Country is dedicated to providing efficient, on time flights to the residents of Merced. Our fares

reflect this goal. Please refer to the enclosed proposed fare table.



## Proposed Fares for Merced

Fares are based on one way purchase. The fares may not include all applicable taxes.

Fare Type Merced to Los Angeles Los Angeles to Merced

Unrestricted fare

‐ fully refundable 175.00 181.00

Low fare

– 7 day advance 155.00 161.00

Low fare

– 14 day advance

purchase 140.00 146.00

Benefit to the community of Merced:

Residents of Merced are looking for a reliable airline that will provide the much needed service for both

business and pleasure travel. Based on our conversations with members of the community, the

statistics for air travel in the community do not reflect their true need for air travel. Due to changes in

pilot requirements, many of the flights originally scheduled for this community were cancelled. Wine

Country Express is planning a 99% reliability factor for this community. The corporate office for Wine

Country Express is based in California.6

Wine Country Express EAS Proposal If awarded the EAS contract for Merced, the airlines is planning an aggressive marketing campaign which

includes using social media, television and radio ads, and participation in civic and community events

promoting the air service and participating in the community we serve.

Subsidy Requirements :

Schuman Aviation Ltd. Is offering two possible options to Merced residents. Both options are based on

a four year subsidy plan which guarantees continuity to the community. The first option includes more

frequencies on a 9 passenger aircraft for a four year period. The second option includes a 19 pasenger,

pressurized aircraft in year three and four.

Option 1

‐ Four years with 26 departures weekly utilizing a 9 passenger aircraft

OPTION ONE

‐ Year 1

‐ $1,221,278

OPTION ONE Year 2

‐ $1,284,686

OPTION ONE Year 3

‐ $1,403,968

OPTION ONE Year 4

‐ $1,474,647

Option 2

– Two years with a 26 departures weekly utilizing a 9 passenger aircraft, Two years with 14

departures weekly utilizing a 19 passenger aircraft

OPTION TWO Year 1

‐ $1,299,597

OPTION TWO Year 2

‐ $1,367,248

OPTION TWO Year 3

‐ $1,058,.760

OPTION TWO Year 4

‐ $1,134,637

C ustomer Testimonials:

From: Matthew Brittain [ mailto:hiloprosocial@hotmail.com ]

Sent: Saturday, November 16, 2013 4:10 PM

To: scott.faulk@dot.gov

Subject: Makani kai airlines-Molokai7

Wine Country Express EAS Proposal 

### Dear Mr. Faulk:

I am writing to you to as a frequent traveler to Kalaupapa on Makanikai airlines. I go there a lot

to visit with my wife, Lesly Mae Brittain, who is a RN at the settlement in Kalaupapa. Also, of

course, my wife travels on Makani Kai a lot, too. As such, I am also speaking for her as well.

We are very happy with Makani Kai airline. They are friendly, accommodating, and know and

recognize the special needs of the Kalaupapa commun ity. They are almost like part of the family.

We especially like that they are flexible in terms of scheduling, and allow us to bring extra

luggage in, since there are no majo r stores there. We must bring in most of our consumer goods

that we can't bring in on the once-yearly barge, so their lenience on the lu ggage is a huge benefit

for us.

I hope that Makani Kai retains the contract to service Kalaupapa, it is really nice to have them.

Sincerely,

Matthew Brittain, LCSW

From: Rita [ mailto:cnrward@aol.com ]

Sent: Sunday, November 24, 2013 8:52 AM

To: eas@dot.gov ; damientours@aol.com ; richard@makanikai.com ; muleman@sandwichisles.net ; boland@lava.net

Subject: Kalaupapa 

### Aloha,

First of all, my name is Rita Lutu Ward a da ughter of a Kalaupapa Patient here on Kalaupapa.

I was told this email to let my mana'o regarding Makani Kai.

But first, allow me this time to explain abit more of what it took to finally get Makani

Kai into Kalaupapa. With all the other past air line, they have done the job as far as taking8

Wine Country Express EAS Proposal 

### care of the Kalaupapa Patients traveling needs, and so forth. Aloha Air, Alii, Brandt airlines and

to mention abit more.

We have been under Pacific Wings for over 5 year s I think. It was the worst time for Kalaupapa.

If you'd talk to the patients & workers in Ka laupapa there was a mode of depression while

Pacific

Wings was here. Their ridiculous prices wa s charged over $500.00 for round trips and same

from Kalaupapa just to Moloka'i (topside). Many of us could not afford this price and felt as if

we were all held at gun point or as hostages.

Long story short - 

### Senator Daniel Inouye, fought for Kalaupa and heard our cries for help

on this situation. Then alas, Pacific Wings left a nd then others tried to get into kalaupapa and

with so

many promises but no commitment on their ends. It was only Makani Kai who stepped up

and offered their services to Kalaupapa. We ar e so very happy with th is decision, and could

not ask for anything more. Richard Shuman(Mak ani Kai) have gone & beyond his duties to

help Kalaupapa. He and his sta ff are wonderful to us, like "Ohana " (family). And I thank them

every trip to Honolulu or back to Kalaupapa.

Just find the time to talk to either workers (state & federal) and "Our Kalaupapa Patients" they

all agree to want Makani Kai to stay. I stand with Makani Kai and do not want another airline

coming in to Kalaupapa. This is my sincere "Mana'o" (Thoughts). If you have any questions

please

don't hesitate to let me know.

Rita Lutu Ward

Daughter of Richard & Gloria Marks (Patients Of Kalaupapa

From: "Tylor Tanaka" < tatanaka08@gmail.com >

Date: Apr 23, 2014 6:07 AM

Subject: Wrong Wings For Lup

To: "Jennifer Lyons" < jblyons808@gmail.com >

Cc:9

Wine Country Express EAS Proposal 

### ALOHA EVERYONE!

Kalaupapa's EAS is expiring May 31, 2014. Meaning a NEW airline may bid for the award from

the Federal Government. Currently Makani Kai Air has the award. They have great a service like

no other airline. It's local (eh brittany you get room on this flight) if there is room we may jump

on and pay cash with no fees! FREE BAGS . PETS ARE FREE(even your chicken)FREE

CHANGE FEES.AND EVERY SEAT IS $50. They w ill even pick us up in the middle of the

night during tsunami with just one ca ll! Thats how personalized they are

Now Mokulele Airlines is also bidding for the EA S award. Their Marketing director came to our

community meeting and had a presentation for us and this is what 99% of the community and I

gather from it!

"Your city is a great opportunity fo r us to expand"-WE ARE NOT A CITY

"daily direct flights from OGG and HNL"-never once they said nor was it on their power point,

until asked if they will provide service to topside

"our price will be competitive, which our ma rketing team will put that together"-their

"competitive" pricing that their MARKETING team puts together is sale 2 seats at the "sale"

price and the rest at a much hi gher price! So from this inform ation gathered from mokulele's

presentation, 99% of us residents of Kalaupapa believe, Mokulele Airlines is the wrong wings

for us!

Now some topside residents (some is family) ha ve been writing letters in support of Mokulele

and stating "on behalf of the Molokai reside nts and Kalaupapa reside nts"! PLEASE PLEASE

DO NOT WRITE ON OUR BEHALF IF YOU DON'T KNOW HOW WE FEEL!! US

Kalaupapa Residents will be punished financiall y and conveniently if mokulele receives this

EAS!!

So please consider how the residents will be a ffected before writing an support letter for

Mokulele! Also if you wanna write a letter on behalf of YOURSELF and where YOU LIVE! MMerced to Merced to Merced to Merced to

Los Angeles Los Angeles Los Angeles Los Angeles

Year 1 Year 2 Year 3 Year 4

Option One

Weekly Frequencies 26 26 26 26

Completion Factor 99% 99% 99% 99%

Annual Departures 1326 1326 1326 1326

Block Time (in minutes) 0.55 0.55 0.55 0.55

Annual Block Hours 1248 1248 1248 1248

Stage length (statute miles) 208 208 208 208

Available Seat Miles (9 seats) 2482272 2482272 2482272 2482272

Load Factor 35% 38% 41% 44%

Passengers 4200 4500 4900 5200

Revenue Passenger Miles 873600 936000 1019200 1081600

Average Fare $75.00 $75.00 $75.00 $75.00

$75.00 $75.00 $75.00 $75.00

Revenue:

Passenger $315,000.00 $337,500.00 $367,500.00 $390,000.00

Ancillaries $3.00 $12,600.00 $13,500.00 $14,700.00 $15,600.00

$327,600.00 $351,000.00 $382,200.00 $405,600.00

Assumptions

Fuel Cost P/Gal $4.26

Fuel Burn Gallons P/Hr 55.00

Direct Expenses:

Ownership $187.00 Per Blk Hr $233,376.00 $233,376.00 $233,376.00 $233,376.00

Flight Crew $143.00 Per Blk Hr $178,464.00 $187,387.20 $235,000.00 $246,750.00

Aircraft Lease $180,000.00 $180,000.00 $180,000.00 $180,000.00

Fuel & Into Plane Fees $234.30 Per Blk Hr $292,406.40 $336,267.36 $369,894.10 $406,883.51

Insurance $67.00 Per Blk Hr $83,616.00 $83,616.00 $91,977.60 $96,576.48

Maintenance $160.00 Per Blk Hr $199,680.00 $209,664.00 $230,630.40 $242,161.92

Miscellaneous/Reaccom $22.00 Per Blk Hr $27,456.00 $27,456.00 $30,201.60 $31,711.68

Total Direct Expenses $1,194,998.40 $1,257,766.56 $1,371,079.70 $1,437,459.59

Indirect Expenses:

Landing Fees $18.00 per dept $23,868.00 $23,868.00 $26,254.80 $26,254.80

Passenger Services $60.00 Per pax $96,627.50 $101,458.88 $111,604.76 $122,765.24

Marketing $15.45 per Pax $64,890.00 $69,525.00 $76,477.50 $76,477.50

General & Admin/Other 9.1% of Direct $108,744.85 $120,179.59 $132,197.55 $145,417.31

Total Indirect Expenses $294,130.35 $315,031.47 $346,534.62 $370,914.85

$1,489,128.75 $1,572,798.03 $1,717,614.31 $1,808,374.43

Income (loss) ($1,161,528.75) ($1,221,798.03) ($1,335,414.31) ($1,402,774.43)

Profit element $59,749.92 $62,888.33 $68,553.98 $71,872.98

Subsidy requirement $1,221,278.67 $1,284,686.36 $1,403,968.30 $1,474,647.41

Subsidy per passenger $290.78 $285.49 $286.52 $283.59

Subsidy per departure $921.02 $968.84 $1,058.80 $1,112.10 per passenger

Total Revenue

Total Operating Expenses 

### M ercedMerced Merced Merced Merced

Los Angeles Los Angeles Los Angeles Los Angeles

Year 1 Year 2 Year 3 Year 4

Option Two

Weekly Frequencies 26 26 14 14

Completion Factor 99% 99% 99% 99%

Annual Departures 1326 1326 728 728

Block Time (in minutes) 0.55 0.55 0.38 0.38

Annual Block Hours 1248 1248 532 532

Stage length (statute miles) 208 208 208 208

Available Seat Miles (9 seats) 2482272 2482272 1362816 1362816 **19 seats

Load Factor 35% 38% 60% 62%

Passengers 4200 4500 8299 8576

Revenue Passenger Miles 873600 936000 1726192 1783808

Average Fare $75.00 $75.00 $75.00 $75.00

$75.00 $75.00 $75.00 $75.00

Revenue:

Passenger $315,000.00 $337,500.00 $622,425.00 $643,200.00

Ancillaries $3.00 $12,600.00 $13,500.00 $24,897.00 $25,728.00

$327,600.00 $351,000.00 $647,322.00 $668,928.00

Assumptions

Fuel Cost P/Gal $4.26

Fuel Burn Gallons P/Hr 55.00

Direct Expenses:

Ownership $187.00 Per Blk Hr $233,376.00 $233,376.00 $99,484.00 $99,484.00

Flight Crew $198.00 Per Blk Hr $247,104.00 $259,459.20 $285,405.12 $299,675.38

Aircraft Lease $180,000.00 $180,000.00 $180,000.00 $180,000.00

Fuel & Into Plane Fees $234.30 Per Blk Hr $292,406.40 $336,267.36 $369,894.10 $406,883.51

Insurance $67.00 Per Blk Hr $83,616.00 $83,616.00 $91,977.60 $96,576.48

Maintenance $160.00 Per Blk Hr $199,680.00 $209,664.00 $230,630.40 $242,161.92

Miscellaneous/Reaccom $22.00 Per Blk Hr $27,456.00 $27,456.00 $30,201.60 $31,711.68

Total Direct Expenses $1,263,638.40 $1,329,838.56 $1,287,592.82 $1,356,492.96

Indirect Expenses:

Landing Fees $18.00 per dept $23,868.00 $23,868.00 $26,254.80 $26,254.80

Passenger Services $60.00 Per pax $96,627.50 $101,458.88 $111,604.76 $122,765.24

Marketing $15.45 per Pax $64,890.00 $69,525.00 $76,477.50 $76,477.50

General & Admin/Other 9.1% of Direct $114,991.09 $127,066.07 $139,772.68 $153,749.95

Total Indirect Expenses $300,376.59 $321,917.95 $354,109.74 $379,247.49

$1,564,014.99 $1,651,756.51 $1,641,702.56 $1,735,740.45

Income (loss) ($1,236,414.99) ($1,300,756.51) ($994,380.56) ($1,066,812.45)

Profit element $63,181.92 $66,491.93 $64,379.64 $67,824.65

Subsidy requirement $1,299,596.91 $1,367,248.44 $1,058,760.20 $1,134,637.10

Subsidy per passenger $309.43 $303.83 $127.58 $132.30

Subsidy per departure $980.09 $1,031.11 $1,454.34 $1,558.57 per passenger

Total Revenue

Total Operating Expenses 

### M erced