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BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Application of

HARRIS AIRCRAFT SERVICES, INC.

For a certificate of public convenience and

necessity pursuant to 49 U.S.C. § 41102 to

engage in interstate scheduled air transportation

of persons, property, and mail

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Docket DOT-OST-2014-0145

MOTION OF AIR EXCURSIONS LLC

TO RE-OPEN THE RECORD

Communications with respect to this document should be addressed to:

Kent Craford

AIR EXCURSIONS LLC

1873 Shell Simmons Dr.

Suite 110

Juneau, AK 99801

Robert E. Cohn

Patrick R. Rizzi

HOGAN LOVELLS US LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

+1 202 637 4999/5659

robert.cohn@hoganlovells.com

patrick.rizzi@hoganlovells.com

Counsel for Air Excursions LLC

October 29, 2014
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BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Application of

HARRIS AIRCRAFT SERVICES, INC.

For a certificate of public convenience and

necessity pursuant to 49 U.S.C. § 41102 to

engage in interstate scheduled air transportation

of persons, property, and mail

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Docket DOT-OST-2014-0145

October 29, 2014

MOTION OF AIR EXCURSIONS LLC

TO RE-OPEN THE RECORD

Air Excursions LLC hereby moves the Department of Transportation to reopen the record in the above-captioned proceeding to take into account new

information concerning the service proposal and fitness deficiencies of Harris

Aircraft Services, Inc. (“Harris Air”). It has recently become clear that Harris Air

has effectively changed its service proposal without accounting for the changes

in this docket. Harris Air is telling the Department (“DOT”) one story in this

proceeding but another story in a different proceeding – with important

implications for the pending certificate application. These inconsistencies

confirm that Harris Air has not demonstrated sufficient fitness for certificate

authority. The Department should closely examine these issues and issue a

request to Harris Air for additional information and documents to address these

critical inconsistencies.
Motion of Air Excursions

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I. Harris Air’s Recent EAS Submission Is At Odds With Its

Representations In Support Of Its Certificate Application.

Harris Air has repeatedly and indignantly claimed that it will “continu[e] its

existing intra-state services”, that its “existing intra-state operations in this

Southeast region of Alaska will continue as currently operated” and that its

intra-state Alaska operations will “remain substantially unchanged from 2013,

including type of FAA commuter authority held, routes served, service frequency,

numbers of employees employed, etc.” 1

Yet, just last week, Harris Air told the Department that if certificated, it will

offer substantially more service than it currently operates. In its EAS submission

relating to Angoon, Tenakee, and Pelican, Harris Air proposed that it would

operate, on a subsidy-free basis, “two scheduled flights daily in the peak season”

(14 weekly) and “one flight daily in the off-peak season” (7 weekly) between Sitka

and each of Angoon and Tenakee, and one daily roundtrip year-round (7 weekly)

between Sitka and Pelican. See Proposal of Harris Air to Provide Essential Air

Service, at 4 (October 22, 2014) (Dockets DOT-OST-2002-11586 and 2006-

25542).

That proposal is in sharp contrast to the Illustrative Schedule provided with

its certificate application in this docket, which shows only a single daily Sitka–

Angoon service (7 weekly) and only three times weekly for each of Sitka–

Tenakee and Sitka–Pelican. See Exhibit HAS-13.

1

See Application of Harris Air, at 9 (August 25, 2014); Consolidated Reply of Harris Air, at 1, 4 and 5

(September 29, 2014) (underlined emphasis in original).
Motion of Air Excursions

Page 3

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EAS Proposal

dated October 22, 2014

Certificate Application

dated August 25, 2014

Angoon Peak: 14 weekly

Off-Peak: 7 weekly

7 weekly

Tenakee Peak: 14 weekly

Off-Peak: 7 weekly

3 weekly

Pelican 7 weekly 3 weekly

TOTAL Peak: 35 weekly

Off-Peak: 21 weekly

13 weekly

These new services to Angoon, Tenakee, and Pelican reflect a 169%

(peak) and 61% (off-peak) increase from the service levels contained in Harris

Air’s certificate application for these three markets alone.

Harris Air cannot have it both ways. It cannot legitimately claim that its

service will “remain substantially unchanged from 2013” and yet represent to the

Department that it will operate substantially more flights. If these increased

operations are properly accounted for in connection with this certificate

application, as they must be, the fundamental financial fitness underpinnings for

Harris Air’s certificate application collapse.

The expanded services proposed by Harris Air will necessarily result in

substantial higher costs than the costs Harris Air used to compute the financial

fitness threshold for its certificate application. By showing far fewer operations

on the Angoon, Tenakee, and Pelican routes in the Illustrative Schedule than it

has represented in its EAS proposal, Harris Air has substantially under-estimated

the costs associated with its planned certificate operations and thereby
Motion of Air Excursions

Page 4

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calculated a much lower financial fitness threshold than if the expanded services

were accounted for properly.

Operating substantially more flights to Angoon, Tenakee, and Pelican, as

Harris Air’s EAS submission proposes, will necessarily incur substantially higher

expenses in flight operations, maintenance, ground support, and

accounting/administration. For example, increased flight operations will incur

higher fuel, maintenance parts and labor, and engine overhaul expenses, which

are all a direct function of aircraft hours flown.

Further, providing “essential air service” at Angoon, Tenakee, and Pelican

will necessarily require increased overhead, especially ground support in those

communities that Harris Air does not currently have. With respect to U.S. mail

alone, in 2013, the aggregate mail volume to these three communities totaled

72.249 tons. Harris Air will need ground equipment to receive and transport that

mail to the U.S. Post Offices; it will need storage for that mail when the Post

Offices are closed; and it will need staff to tender the mail to the local

Postmasters. As a result of these substantially increased EAS services,

outstation offices, staffing, and communications will incur both start-up and

ongoing expenses, none of which are included in Harris Air’s certificate

application.

This significant understatement of the financial fitness threshold is in

addition to the understatement of approximately $350,000 arising from Harris

Air’s inexplicable reduction of the financial fitness threshold by 44% ($999,000 to

$558,000) from what Harris Air itself proposed in its 2013 application and the
Motion of Air Excursions

Page 5

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Department accepted in the Show Cause Order associated with its earlier,

withdrawn application, DOT Order 2014-3-2, at 6 (“2014 Show Cause Order”).

In addition, Air Excursions has already demonstrated that it would be

impossible for Harris Air to operate its Illustrative Schedule with its fleet of

aircraft.2The additional services Harris Air is proposing for Angoon, Tenakee,

and Pelican only compound the problem, making its service proposal and

financial fitness analysis even more unrealistic. Either Harris Air will continue to

engage in unrealistic (and deceptive) scheduling, or it will need to acquire more

aircraft, thereby incurring additional costs and rendering its financial forecasts

and financial fitness threshold invalid. Either way, it is problematic for Harris Air’s

certificate application.

Given the increase in service levels and the significant implications for this

certificate application, the Department should re-open the record to examine

these critical issues and immediately issue a request to Harris Air for more

information and documents, including the following:

 Explain in detail on an aircraft-by-aircraft routing basis, how Harris Air

can operate its Illustrative Schedule, plus the expanded operations it

proposes for Angoon, Tenakee, and Pelican, with its current fleet of

aircraft.

 Explain how it can handle U.S. mail service with its current facilities

and ground equipment at Angoon, Tenakee, and Pelican.

 Are there other plans for service increases by Harris Air not reflected in

its certificate application?

 Does it plan to add aircraft to its fleet (if so, by ownership or lease)?

2

See Answer of Air Excursions, at 8-9 (September 15, 2014); Motion and Response of Air

Excursions, at 5-6 (October 6, 2014) (explaining, for example, that there was no showing how Harris Air

could operate several near-simultaneous wheel-plane flights with only two wheel-aircraft).
Motion of Air Excursions

Page 6

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 Does it plan to add flight crews?

 Recalculate Harris Air’s financial forecasts and financial fitness

threshold accounting for the expanded services proposed for Angoon,

Tenakee, and Pelican.

 Recalculate Harris Air’s financial forecasts and financial fitness

threshold accounting for the start-up costs set forth in the 2013

application and the 2014 Show Cause Order.

The Department needs this additional information to have an adequate record to

reach a decision on the certificate application.

II. These Inconsistencies Are Significant, And Harris Air’s Complaints

About Delay Are Without Merit.

Harris Air’s complaints about Air Excursions’ submissions being used

merely to delay the Department’s consideration of its certificate application are

red herrings. Air Excursions’ submissions have all been well-supported and

detailed, pointing out flaws with the certificate application. Indeed, Harris Air only

has itself to blame for any delays. It is Harris Air that has submitted a certificate

application with glaring discrepancies such as (i) a financial fitness threshold that

is inexplicably $350,000 lower than the one it submitted a year ago for the same

services and the Department accepted earlier this year, and (ii) an Illustrative

Schedule that, on its face, cannot be operated. It has steadfastly refused to

address the substantive issues raised by Air Excursions, choosing instead to

complain about motives, delays, and abuse of process. Curiously, it took Harris

Air almost 21⁄2 weeks to file a non-substantive response to Air Excursions’ last

submission.
Motion of Air Excursions

Page 7

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III. Conclusion.

The Department should grant this Motion, re-open the record, and followup on the issues raised by this new information with new information/clarification

requests to Harris Air. The new information presented in this Motion (which only

came to light last week) further confirms the dispositive deficiencies of Harris

Air’s certificate application.

Respectfully submitted,

______________________________________

Robert E. Cohn

Patrick R. Rizzi

HOGAN LOVELLS US LLP

555 Thirteenth Street, NW

Washington, DC 20004

+1 202 637 4999/5659

Counsel for

Air Excursions LLC
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CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Motion to Re-Open the Record has

been served this 29th day of October 2014, upon each of the following:

pmurphy@lopmurphy.com

scott@harrisair.com

hank@MTCWorld.com

info@flypacificairways.com

Patrick R. Rizzi