AKUTAN 

UNALASKA ISLAND 

7 August 2012 

Mr. Dennis J. DeVany 

Chief, EAS and Domestic Analysis 

U.S. Department of Transportation 

1200 New Jersey Avenue, SE 

Washington DC 20590 

AKUTAN 

~ .. 

Re: Notice of Peninsula Airways, Inc. Termination of Service of Essential Air Service at Akutan, 

Alaska, Docket DOT-OST-2000-70068 

Dear Mr. DeVany; 

We are in receipt of an electronic notification from Mr. Kevin Adams of your office regarding a 

request by PenAir to terminate its obligations under the above-referenced docket number, and 

discontinue essential air service to Akutan effective 1 September 2012. We have been further 

advised to provide you with comments on the proposed termination, in order to expedite the 

selection of a replacement carrier, or carriers. This letter will serve as the City of Akutan's 

response to your request for comment. 

As you are well aware, the new Akutan Airport is scheduled to begin operations on 1 September 

2012. This $71 million project is the result of significant Federal, State, local and private 

investment, and in no small measure PenAir's consistent commitment to provide air service, 

including continuation of its existing EAS contract with the U.S. Department of Transportation. 

Therefore, PenAir's request for termination of service to Akutan is disturbing, and in view of the 

scheduled opening of Akutan Airport in just three weeks time, presents the community with an 

unwarranted set of circumstances. 

We submit the following facts for consideration: 

1. Throughout the planning and development phases of the Akutan Airport project, 

PenAir has provided assurances to local, State and Federal agencies that it 

would continue service to Akutan after commissioning of the new airport. PenAir 

concurred throughout this period that basic scheduled service would be based on 

three Saab 340 flights between Anchorage and Akutan per week. 
Mr. Dennis J. DeVany 

7 August 2012 

Page 2 

2. Lacking any communication from PenAir on the subject of EAS service to the 

new airport, the City of Akutan initiated discussions with principals of PenAir on 6 

December 2011. At that time, the City was informed that PenAir intended to 

provide EAS service to Akutan Airport from Dutch Harbor utilizing a nine 

passenger twin-engine Navajo aircraft, consistent with its existing EAS contract, 

i.e., two flights per day, seven days per week. 

3. Over a period of months, the City tried to confirm PenAir's intentions with little 

success. Among other loosely structured options, PenAir indicated it might 

simply continue use of the Grumman Goose, either as currently operated by 

water landing, or by landing on the new 4,500 runway of Akutan Airport. 

4. Beginning in May 2012, the City, Aleutians East Borough and the State of Alaska 

formed an Akutan Airport Working Group, for purposes of ensuring timely, safe 

and effective commissioning of the new airport, and to develop the framework for 

long-term operations. Obviously, a critical item of concern for the Working Group 

is the establishment of scheduled air service for the new airport. Consequently, 

PenAir was asked to, and has, participated in each Working Group meeting. 

5. Within the past month, PenAir has proffered several alternatives for EAS service 

to Akutan, including continued use of the Grumman Goose, use of a twin-engine 

Navajo, use of a twin-engine King Air, and use of the Saab 340. Throughout this 

period, I have repeatedly tried to get Mr. Dan Seybert, President of PenAir, to 

make a commitment to the community, especially in light of the impending 

opening of the new airport. These efforts have been repeatedly rebuffed, 

including in a meeting with Mr. Seybert on 11 July 2012. It is clear to me now, 

that PenAir's strategy was one of delay and disingenuous dialogue, while 

preparing to file the Notice of Termination of Service received by your office and 

the City on 2 August 2012. 

6. PenAir repeatedly suggested that the community provide a statement of its 

proposed service plan in support of continuing its current EAS contract. As a 

result of the efforts of the Working Group, the State of Alaska and City of Akutan 

were able to agree on an approach, which was defined in a draft letter to you 

(copy attached), and provided to PenAir for consideration. PenAir's response to 

the community's specific request for continued service was to file the Notice of 

Termination of Service now before you, without any further consultation or 

warning to the City 

7. All of the above facts and the City's overall response to the Notice of Termination 

of Service must be viewed in the context of PenAir's historic and long-term failure 

to provide adequate service to Akutan. PenAir's performance under the existing 

EAS contract, and those in the past, has focused almost entirely on mail delivery 

and freight service. The residents of Akutan, including Trident Seafoods, have 

suffered the consequences, while PenAir has collected its EAS payments year-in 

and year-out, regardless of haphazard and irregular passenger service. 
Mr. Dennis J. DeVany 

7 August 2012 

Page 3 

Unfortunately, they have remained the only game in town for our citizens and 

taxpayers. 

It is our understanding that you believe the City of Akutan should support PenAir's Notice of 

Termination of Service to allow the Department of Transportation to begin the regulatory 

process of instituting replacement service through a request for proposals process. We further 

understand: 

• The City of Akutan is guaranteed the continuation of EAS, whether by PenAir or 

other carrier(s). 

• PenAir must continue service until replacement service is initiated. 

• If the initiation of replacement service takes longer than 180 days, PenAir may 

receive additional compensation for "forced service." 

• We assume the City can provide further direct comment on the Notice of 

Termination as part of the public notice process required by EAS regulations. 

The City can support the requested termination; however, there are a number of critical 

questions yet to be answered: 

1. What is the likelihood that replacement service will be initiated in time for the 1 

September opening of Akutan Airport? 

2. If PenAir is required to continue EAS service beyond 1 September, how will the 

level of service be determined? As indicated above, PenAir has been 

unresponsive to requests by the City and State DOT&PF for a written notice of 

commitment to the aircraft to be used and the proposed schedule. In the City's 

view, continuation of service by the Grumman Goose beyond 1 September is not 

a reasonable option, other than as a backup to a new service plan. 

3. How will the City/State DOT&PF proposed level of service (attached) be 

addressed as part of the RFP process for selecting a new carrier? During any 

period of continued service by PenAir? 

I hope you appreciate the City's dilemma. After years of frustration in dealing with PenAir, the 

City is looking forward to a fresh approach. However, opening of the airport is just weeks away, 

and it is unclear how to require PenAir to step up and do the right thing until such time as they 

are released from their current contract. 
Mr. Dennis J. DeVany 

7 August 2012 

Page4 

In that regard, we are asking for your support, and that of the Alaska Congressional Delegation, 

in protecting the interests of the Akutan community, and the substantial Federal, State, local and 

private investment in the Akutan Airport project. 

Sincerely, 

{h/l£-

Joe Bereskin 

Mayor 

Enclosure: 

cc: Honorable Senator Lisa Murkowski 

Honorable Senator Mark Begich 

Honorable Congressman Don Young 

Honorable Stanley Mack, Mayor, Aleutians East Borough 

Marc Luiken, Commissioner, State of Alaska DOT&PF 
July 12, 2012 

Mr. Dennis J. DeVany 

Chief, EAS and Domestic Analysis 

U.S. Department of Transportation 

1200 New Jersey Avenue, SE 

Washington, DC 20590 

Re: Essential Air Service for Akutan Docket 2000-7068 

Dear Mr. DeVany 

Peninsula Airways, Inc. (PenAir) provides subsidized Essential Air Service (EAS) to the 

community of Akutan at an annual rate of$710,157 per Order 2011-3-31. The Order required 

PenAir to provide 11 nonstop round trips a week with a 9-seat Grumman Goose seaplane from 

Dutch Harbor (DUT) to Akutan Seaplane Base (KQA). The EAS contract will expire on April 

30,2013. 

The State of Alaska built a new airport with a 4,500 foot paved runway for the community of 

Akutan on nearby Akun Island which will open on or about September 1, 2012. PenAir, the 

State of Alaska, and the community of Akutan request an "alternate service pattern." In brief, the 

subsidy level would remain fixed, but PenAir would provide three nonstop Saab 340 round trips 

a week between Akutan Airport (+OlD) and Anchorage (ANC) and six nonstop (Navajo, King 

Air or Grumman Goose) round trips per week between Akutan Airport (+OlD) and Dutch Harbor 

(DUT). 

If you have any questions, please contact us at your earliest convenience. 

Sincerely, 

Danny Siebert, COO 

Peninsula Airways, Inc. 

6100 Boeing A venue 

Anchorage Alaska 99502 

Tele: 907-771-2500 

Joe Bereskin, Mayor 

City of Akutan 

PO Box 109 

Akutan, Alaska 99553 

Tele: 907-698-2228 

Steven D. Hatter 

Deputy Commissioner - Aviation 

Alaska DOT &PF 

P.O.Box 196900 

Anchorage, Alaska 99519 

Tele: 907-269-0730