I 

## Before the United States Department of Transportation I I 

## Washington, DC September 

## 4, 20t4

SILVER CITY/HURLEYIDEMING, NEW MEXICO Essential Air Service at
under 49 U
. S.C
. 41731 et.seq . This document contains Great Lakes Aviation , Ud
. 's response to Order Requesting Proposals 2014-7-6
. Great Lakes Aviation, Ltd. is pleased to submit these proposals to provide essential air transportation for Silver City/Hurley/Deming, New Mexico . Great Lakes maintains interline ticketing and baggage agreements with the majority of the carriers serving the Phoenix hub , includ i ng interline e-ticketing agreements with American Airlines, Delta Airlines , United Airlines and U
. S
. Airways
. All of which ' will offer Silver City/Hurley/Deming supplemental access to the domestic and international air transportation system. The proposed service is being offered utilizing pressurized , twin-engine Beech 19000 aircraft flown by two pilots. New FAA pilot qualification rules have created an industry-wide pilot shortage which has had an acute impact on Great Lakes. These new rules mandated that first officers obtain an Airline Transport Pilot certification (UATP") prior to being qualified to perform crewmember duties in scheduled airline passenger service under FAR Part 121 regulatory requirements. A key factor to enable a pilot to receive an ATP certificate is the accumulation of 1 , 500 flight hours
. On March 18th of this year, Great Lakes received from the FAA new operations specifications allowing us to hire pilots under it's FAR Part 121 Certificate utilizjng FAR Part 135 regulatory hiring requirements. This allows our new hire pilots to operate the Beech 19000 aircraft in a nine seat configuration and will enable Great Lakes to restore pilot staffing levels while maintaining FAR Part 121 hiring , training and maintenance standards
. Great Lakes' "base case" proposals assume that we will be limited to nine available seats for our Beechcraft 19000 aircraft
. In addition to the "base case" proposal, Great Lakes is submitting an indicative proposal for 19 seat service. Although this service is not immediately available, it is illustrative of the economic 

### impact the new FAA pilot qualification rules have on the EAS program.Excessive subsidy requirements will force communities to ultimately loose EAS service eligibility
. Available seats are being dramatically reduced due to arbitrary limitations which are forcing communities to accept single engine , single pilot, nine seat aircraft
. This type of service falls below the congressionally mandated and statutory "One Level of Safety" Part 121 standards implemented in 1997
. The adverse impact that many EAS communities ar1 eexperiencing as a result of the new FAA pilot qualification regulations , requires Congress to address the unintended consequences . Great Lake, ' "and, ready 10 participate in creative lOlulion, 10 assist 'mall communities in their efforts to remain in the National Air Transportation System
. Questions and comments may be referred to: Michael O. Matthews Chief Fi nancial Officer Great Lakes Aviation , Ltd
. 1022 Airport Parkway Cheyenne , VVY 82001 (307) 432-7000Table of Contents: Subsidy Passengers Average Subsidy Cost

Bid Service Point(s) Hub Served Round Trips Equipment Requirement Forecast Fare per Passenger

Silver City

/H u rley /Demin ! Phoenix 2 1900D - 9 seat $2,237 , 812 4,000 $98
. 36 $559.45 Total Cost of 9 Seat Beech 1900-D
2 Si lver City /Hurleyl Dem in ! Phoenix 2 1 9 Seat $2 , 092,055 8 , 000 $87
. 17 $261
.5 1

Total Cost of 19 Seat Bid Cost of 1 , 500 hour ATP to EAS program $2 ,237,812 4,000 $297.95

# Great Lakes Aviation, Ltd. Annual Compensation Requirements for Essential Air Service at 

## Silver City/Hurley/Deming, New Mexico to Phoenix (PHX) Two Round Trips - Nine seat - B1900 - Historical schedules should be used as sample pattern of service (at 98 percent completion) Departures: Block Hours : Revenue Passenger Miles : Avai lable Seat M i les : 1 ,227 1 , 329 924, 000 2 , 550 , 933 Operating Revenues:

Passenger: SVC-PHX 4, 000 psgrs at $98.36 $393,440

Other: (at 0
. 62% of passenger revenue) $2,439 Total Operating Revenues : $395 , 879 Operating Expenses:

Direct: Aircraft and Hull Insurance

Fuel and Oil Flying Operations Maintenance $365,710 $858 , 160 $262 , 132 $447, 674 Total Di rect Expenses : $1 , 933 , 676 Total Indirect Expenses : $574, 601 Total Operating Expenses : $2,508,277 Operating Loss Profit E lement (5
. 0% of Total Operating Expenses) ($2,112 , 398) $125,414 Annual Compensation Requirement: $2,237,812 All SVC - PHX - SVC Service is Non-Stop

. This Proposal is submitted with no upline scheduling restrctions

# Great Lakes Aviation, Ltd. Annual Compensation Requirements for Essential Air Service at 

## Silver City/Hurley/Deming, New Mexico to Phoenix (PHX) Two Round Trips - B1900 - Historical schedules should be used as sample pattern of service (at 98 percent completion) Departures: Block Hours: Revenue Passenger Miles: Available Seat Miles: 1 ,227 1, 329 1,848 , 000 5,385,303 Operating Revenues:

Passenger: SVC-PHX 8,000 psgrs at $87.17 $697,360
Other: (at 0.62% of passenger revenue) $4,324 Total Operating Revenues: $701 , 684 Operating Expenses:

Direct: Aircraft and Hull Insurance

Fuel and Oi l Flying Operations Maintenance $365,710 $858,160 $262,132 $447,674 Total Direct Expenses: $1 , 933,676 Total Indirect Expenses: $727,027 Total Operating Expenses : $2,660,703 Operating Loss Profit Element (5
. 0% of Total Operating Expenses) 1 

### $133 , 035 Annual Compensation Requirement: $2,092,055 All SVC - PHX - SVC Service is Non-Stop This Proposal is submitted with no upline scheduling restrctions