Essential Air Service at Akun, Alaska Under49 U.S.C. 41731 et seq. October 10, 2012 EAS 

### & Domestic Analysis Division Office ofAviation Analysis U.S. Department ofTransportation 400 

## ih Street S.W., Room 6401 Washington, D.C. 20590 Dear Sirs, Enclosed find GrantAviation, Inc.'s proposal to provide Essential AirService between Dutch Harbor, Alaska and the runway on Akun Island, Alaska. As you know, the runway built to serve the village ofAkutan was not built on Akutan itself, buton the nearby island ofAkun, necessitatingvery expensive surface transportation between Akun and Akutan. Atthistime, secure mail storage facilities, laborfor handling mail and freight, and ground transportation on Akun are unresolved issues, as the island is uninhabited and there is a near complete lack of infrastructure. According to the hovercraft operator's stated expectations, the proposed hovercraft transportation between Akun island where the runway is situated, and thevillage ofAkutan, is expected to perform withTHIRTY percent reliability. This will present logistical problemswith scheduling, timely delivery of mail, and passengerwaiting areas in what is arguably one ofthe most hostile climates on Earth. These problems also are unresolved atthis time. Therefore, this proposal makes NO provision fortransport ofmail and cargo between the runway on Akun and thevillage ofAkutan. Neither is any expense oftransporting passengers between the runway on Akun and the village ofAkutan included in this proposal. At thistime we are able onlyto provide a proposal for airtransportation ofpassengers, mail, and freight between Dutch Harborand the runway built on Akun Island. Our proposals below are contingent on the Postal Service agreeing, in writing, that GrantAviation will not be held responsible forfailing totransport mail beyond Akun, toAkutan itself. Such transport is beyond the scope ofthe proposals stated below.We propose to provide twelve direct, nonstop flights per week between Dutch Harbor and the runway on Akun Island. The aircraft types to be utilized forthis proposed service are a Beech Kingair B-200, and a Piper PA31- 350. Both plane types are 9 seat, twin engine aircraft, fully equipped for IFR flight. The B-200 is powered by turbine engines and the PA31-350 by reciprocating engines. There are two possible proposals included in the attached workbook. One proposal considers service to Akun Island independentlyofthe EAS now provided by Grant Aviation between Dutch Harborand Atka 

## I Nikolski, Alaska. This option is very expensive, as the fixed costs for the required base ofoperations in Dutch Harborwould be incurred by the service to Akun, were we to be held in service to Akun afterfailing to renewthe Atka 

## I Nikolski contract. The second proposal considers the additional cost ofservice between Dutch Harbor and Akun, werethe EAS contracts forthe villages ofAtka, Nikolski, and Akun tied together into a single contract. It is our hope thatthe procedural rules ofthe DOT allowthese contracts to be tied togetherforthe sake of efficiency. We lookforward to workingwith you in finding solutions to the unique problems presented in providing service tothe people ofAkutan.

Please contact me at 907 529-6999 ifyou have furtherquestions. Cost data follows. Sincerely,

R. Bruce McGlasson, President, GrantAviation, Inc.

## Akun EAS Proposal Summary, Akun tied with AKB/IKO Weekly Round Trips Annual OW Flights @ 

### 100% completion Per RT flight BlockTime Annual Block Hours Distance DUT- Akun (stat miles) Annual 0/W Passengers expected OWfare Annual maillbs expected Current mail rate 

## I lb Annual Freight lbs expected Current Freight rates

## I lb Total Annual Block Hours Passenger Fares Mail Revenue Freight Revenue Total Revenue Direct Expense (Base) Fuel/oil ($/gallon) Aircraft lease expense (monthly lease) Maintenance (engine&prop +labor+parts

## I block hr) Pilot labor, all inclusive @

### 400.00 +tax&beni Aviation Insurance annual hull and liability Total Direct Expense Indirect Expense Hanger lease 

## I month Ticketing & ground service 

## I per turn Freight & mail Handling

## I lb DUT & Akun Pilot housing+utility 

### I month Total Indirect Expense Sum ofdirect and indirect costs Burden@ 

### 17.2% Profit @

### 5.0% Total Annual Economic cost Annual Subsidy 

### 374.40

Base $ 

### 7.50 $ 

### 2,500.00 $ 

### 595.00 $ 

### 400.00

$ $ 

### 300.00 $ 

### 0.18 $



### 17.2% 5.0% 12 1,248

0.60 374.40 35 2,000 

### $ 132.00

121,000 

### $ 0.7014

33,000 

### $ 0.75

41,184 12 374 365

12 

### 624 154,000 12 $ 

### 264,000.00 $ 

### 84,869.40 $ 

### 24,750.00 $ 

### 373,619.40

Annual Expense $ 

### 308,880.00 $ 

### 30,000.00 $ 

### 222,768.00 $ 

### 169,360.00 $ 

### 16,965.00 $ 

### 747,973.00

$ $ 

### 187,200.00 $ 

### 27,720.00 214,920.00 962,893.00 165,617.60 1,128,510.60 56,425.53 1,184,936.13

811,316.73

# k~re'7,~-:

# x\b Akun EAS Proposal Summary, Akun Stand Alone

Weekly .Round Trips Annual OW Flights @ 

### 100% completion Per RT flight Block Time Annual Block Hours Distance DUT- Akun (stat miles) Annual 0/W Passengers expected OW fare Annual maillbs expected Current mail rate 

## I lb Annual Freight lbs expected Current Freight rates 

## I lb Total Annual Block Hours

Passenger Fares Mail Revenue Freight Revenue Total Revenue Direct Expense (Base) Fuel/oil ($/gallon) Aircraft lease expense (monthly lease) Maintenance (engine&prop +labor+parts

## I block hr) Pilot labor, all inclusive @

### 400.00 +tax&beni Aviation Insurance annual hull and liability Total Direct Expense Indirect Expense Hanger lease 

## I month Ticketing & ground service 

## I perturn Freight & mail Handling

## I lb DUT & Akun Pilot housing+utility 

### I month Total Indirect Expense Sum ofdirect and indirect costs Burden@ 

### 17.2% Profit @

### 5.0% Total Annual Economic cost Annual Subsidy 

### 374.40

Base $ 

### 7.50 

### $ 15,000.00 $ 

### 595.00 $ 

### 400.00

$ 

### 4,000.00 $ 

### 300.00 $ 

### 0.18 $ 

### 1,800.00

17.2%

5.0% 12 1,248

0.60 374.40 35 2,000 

### $ 132.00

121,000 

### $ 0.7014

33,000 

### $ 0.75

41,184 12 374 374

12 624 154,000 12 Annual Revenue $ 

### 264,000.00 $ 

### 84,869.40 

### $ 24,750.00 

### $ 373,619.40

Annual Expense $ 

### 308,880.00 $ 

### 180,000.00 $ 

### 222,768.00 $ 

### 169,360.00 $ 

### 50,895.00 $ 

### 931,903.00

$ 

### 48,000.00 $ 

### 187,200.00 $ 

### 27,720.00 21,600.00 284,520.00 1,216,423.00

209,224.76 1,425,647.76 71,282.39 1,496,930.14 1,123,310.74