DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

June 2 6 , 2013

Essential Air Service at

EL DORADO, HARRISON, HOT SPRINGS, ARKANSAS

Under 49 U.S.C. 41731 et. Seq. Docket DOT

- OST

- 1997

- 2935

SECOND COMMENTS OF SEAPORT AIRLINES, INC IN RESPONSE TO SUPPLEMENTAL INFORMATION SUBMITTED BY BOUTIQUE AIR

By Order 2013

- 4

- 6 issued on April 12, 2013, the Department requested proposals from air carriers interested in providing Essential Air Service at the Arkansas communities of El Dorado, Harrison, and Hot Springs for a new term to begin on November 1, 2013. By the deadline of May 16, 2013, valid proposals were submitted by SeaPort Airlines, Boutique Air, and
Air Choice One. On May 31, 2013, Boutique Air sent an email to the Department’s EAS division “clarifying ” the amount of subsidy per passenger it was requesting for each service option in its proposal that included Hot Springs

. On June 6, 2013

, SeaPort Airlines submitted comments to the Department showing that Boutique Air’s earlier Docket filing incorrect ly calculat ed of the amount of the subsidy per

passenger the carrier is requesting at Hot Springs

. Specifically:

Service Option As Presented by Boutique Air As Calculated by SeaPort Airlines
#1 $132 $408

#2 $126 $338

#3 $132 $263

On June 18, 2013

, the president of Boutique Air responded by stating its calculations assumed a change in flight numbers at Hot Springs and, therefore, connecting passengersComments of SeaPort Airlines, Inc.

Docket DOT

- OST

- 1997

- 2935 Page 2

should be counted as enplanements as Hot Springs

. 1 Boutique also asserted that that SeaPort included Memphis

– Kansas City passengers in its proposal to serve Harrison and, therefore, was engaging in the same practice as Boutique Air.
I n response , SeaPort states the following:

Connecting Pas sengers Are No t Indicative of Market Demand for EAS

As noted, Boutique Air states that each aircraft stop in Hot Springs would result in a change of flight number and, therefore, passengers traveling to or from another EAS point coul d be counted as a Hot Springs enplan ement at Hot Springs for the purpose of calculating subsidy requirements. First, nowhere in the proposal that Boutique Air submitted on May 16 , 2013 is it indicated that passengers would be required to “connect” at eve ry intermediate aircraft stop. To the contrary, in its narrative Boutique Air describes such routings as “one

- stop” and footnotes illustrative schedules for each such options with “all DFW flights have a quick stop in Harrison.” 2
The requirement that Harrison

- Dallas passengers make a “connection” at Hot Springs represented in June 18, 2013 filing is a vastly different value proposition than the quick one

- stop flight itinerary represented in its proposal filed on May 16, 2013. Second, counting Harrison to Dallas passengers as indicative of demand at Hot Springs simply attempts to “game” the EAS program . This is no more valid than, for example, counting Shreveport to New York passengers that connect in Memphis as indicative of the demand for travel between Shreveport and Memphis or betwee n Memphis and New York. As SeaPort outlined in its June 6, 2013 filing, we believe that Boutique Air is confusing “true market demand” (i.e., that found in O&D traffic data) with onboard passengers (i.e., that found in T

- 100 data)

.

Boutique’s Assertion That SeaPort Included Memphis

- Kansas City Passengers Is False

In its filing of June 18, 2013, Boutique Air states that SeaPort Airlines has engaged in the same practice we describe above:

1 Actual submission from Boutique Air was noted dated, however June 18, 2013 is the date the filing appeared on Regulations.gov.

2 Proposal of Boutique Air, page 9.Comments of SeaPort Airlines, Inc.

Docket DOT

- OST

- 1997

- 2935 Page 3

We are actually quite surprised by this objection from SeaPort, as it appears they count through traffic on their direct MCI

- MEM flight, which stops in Harrison, as Harrison passengers. We are not questioning this practice; just why the carrier would feel it is a suitable practice for Harrison, but not for Hot Springs, if indeed those through passengers are being counted. 3

As the table below indicates, Boutique Air’s claim is incorrect:

HRO

- MEM O&D HRO

- MCI

O&D TOTAL

As presented in SeaPort’s proposal 11,001 Forecast Detail 6,401 4,600 11,001

Summation

As SeaPort has shown in this filing, Boutique Air either (1) continues to confuse “O&D demand” with “onboard passengers” or (2) understands the difference but is attempting to “game” the EAS program which hides the true level of service it would provide at another EAS community (Harrison). For these reasons, SeaPort asks the Department add these comments to Docket OST

1997

- 2935 and carefully consider the informat ion as it selects a carrier to provide Essential Air Service at El Dorado, Harrison, and Hot Springs, Arkansas

.

Respectfully submitted,

Timothy F Sieber Executive Vice President SEAPORT AIRLINES, INC. 7505 NE Airport Way Portland International Airport Portland, Oregon 97218 (971) 340

- 1716 Email: tim@seaportair.com

June 2 6 , 2013

3 Letter from Shawn Simpson to Dennis Devany, June 18, 2013.