Before the United States Department of Transportation

Washington, DC

January 20, 2015

Essential Air Service at

PAGE, ARIZONA Docket OST-1997-2694

PRESCOTT, ARIZONA Docket OST-1996-1899

SHOW LOW, ARIZONA Docket OST-1998-4409

under 49 U.S.C. 41731 et.seq.

This document contains the response of Great Lakes Aviation, Ltd. to Order Requesting

Proposals 2014-11-15

Great Lakes Aviation, Ltd. is pleased to submit these proposals to provide essential air 

transportation to these Arizona communities addressed in the Order as stand alone proposals. 

Our proposals provide conveniently timed schedules to our Denver, Phoenix and Los Angeles 

hubs, whereby passengers may utilize our code-share agreement with United Airlines. In 

addition to our code share agreement with United Airlines, Great Lakes maintains electronic 

interline ticketing and baggage agreements with American, Delta and United. Passengers will 

also be eligible for Delta Sky Miles Frequent Flyer program when travel is booked through 

Delta's sales channels. All of which will offer passengers traveling to and from these 

communities supplemental access to the domestic and international air transportation system.

Great Lakes is proposing multiple service alternatives for all three communities. The proposals 

consist of Beech 1900D service configured with nine seats and Beech 1900D service 

configured with 19 seats. Due to pilot supply, in the near term, we have been forced to offer 

nine seat service. To illustrate the economic impact of the effect of the pilot shortage on small 

community air service, the Beech 1900D service with 19 seats offers a substantial reduction in 

subsidy requirement due to the availability of more seats which can generate more passenger 

traffic and revenue. We have also offered a service option for Prescott utilizing pressurized 30 

seat Embraer EMB-120 Brasilia aircraft. Please refer to the attached proposals for the the 

specific service patterns being offered for each community.

Changes to FAA pilot qualification rules have created an industry-wide pilot shortage which has 

had an acute impact on Great Lakes. These rules mandated that first officers obtain an Airline 

Transport Pilot certification (“ATP”) 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. 

Great Lakes received FAA operations specifications allowing us to hire pilots under its FAR 

Part 121 certificate utilizing FAR Part 135 regulatory hiring requirements. This allows our new 

hire pilots to operate the Beech 1900D aircraft in a nine seat configuration and will enable 

Great Lakes to restore pilot staffing levels while maintaining FAR Part 121 pilot training and 

aircraft maintenance standards.

For illustrative and comparison purposes, we have also provided a Phoenix service option for 

Prescott that would be subject to significant modifications at the Phoenix hub gate facilities.
Questions and comments may be referred to:

Michael O. Matthews

Chief Financial Officer

Great Lakes Aviation, Ltd.

1022 Airport Parkway

Cheyenne, WY 82001

(307) 432-7000

It is Great Lakes' belief that the unintended consequences of the changes in pilot qualification 

rules have debilitated small community air service whereby excessive subsidy requirements 

will force communities to loose EAS service eligibility. To avert these unintended 

consequences and revitailize small community air service, will necessitate regulatory relief. 

Great Lakes stands ready to participate in creative solutions to assist small communities in 

their efforts to remain in the National Air Transportation System.
Table of Contents:

Subsidy Passenge

Bid Service Points Hub Options Equipment Requirement Forecas

1 Page Phoenix (non-stop) and/or Nine Seat Beech 1900D $2,690,636 

9,500 

Denver (one-stop) and/or

Los Angeles (one-stop)

2 Page Phoenix (non-stop) and/or 19 Seat Beech 1900D $2,275,111 

14,250 

Denver (one-stop) /and or

Los Angeles (one-stop)

Cost of 1,500 hour ATP to EAS program $415,525 (4,750) 

3 Prescott Los Angeles (non-stop) and/or Nine Seat Beech 1900D $3,152,565 

8,500 

Denver (one-stop)

4 Prescott Los Angeles (non-stop) and/or 19 Seat Beech 1900D $2,721,884 

14,000 

Denver (one-stop)

Cost of 1,500 hour ATP to EAS program $430,682 (5,500) 

5 Prescott Los Angeles (non-stop) 30 Seat EMB-120 $2,657,002 

15,200 

6 Show Low Phoenix (non-stop) and/or Nine Seat Beech 1900D $2,275,339 

5,000 

Denver (one-stop)

7 Show Low Phoenix (non-stop) and/or 19 Seat Beech 1900D $1,894,384 

9,500 

Denver (one-stop)

Cost of 1,500 hour ATP to EAS program $380,955 (4,500) 

Total Annual Cost of 1,500 hour ATP to US DOT for Arizona EAS Communities $1,227,162 (14,750
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Page, Arizona

B1900 - (nine seat configuration)

(at 98 percent completion)

Departures: 1936

Operating Revenues:

Passenger: PGA 9,500 psgrs at $125.72 $1,194,340

Other: (at 0.62% of passenger revenue) $7,405

Total Operating Revenues: $1,201,745

Operating Expenses:

Direct: Aircraft and Hull Insurance $365,710

Fuel and Oil $1,101,034

Flying Operations $471,364

Maintenance $806,661

Total Direct Expenses: $2,744,769

Total Indirect Expenses: $962,260

Total Operating Expenses: $3,707,029

Operating Loss ($2,505,284)

Profit Element (5.0% of Total Operating Expenses) $185,351

Annual Compensation Requirement: $2,690,636

Current published schedules should be used as sample service levels. Hub options eligible

for subsidy are Phoenix (non-stop) and/or Denver (one-stop) or Los Angeles (one-stop).

At Great Lakes discretion, Great Lakes would operate four peak day round trip departures

with reduced service to two round trips per day in off peak seasonal periods.

No less than 1,936 annual departures would be operated assuming a 98% completion factor.
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Page, Arizona

B1900 - (19 seat configuration)

(at 98 percent completion)

Departures: 1936

Operating Revenues:

Passenger: PGA 14,250 psgrs at $117.94 $1,680,645

Other: (at 0.62% of passenger revenue) $10,420

Total Operating Revenues: $1,691,065

Operating Expenses:

Direct: Aircraft and Hull Insurance $365,710

Fuel and Oil $1,101,034

Flying Operations $471,364

Maintenance $806,661

Total Direct Expenses: $2,744,769

Total Indirect Expenses: $1,032,541

Total Operating Expenses: $3,777,310

Operating Loss ($2,086,245)

Profit Element (5.0% of Total Operating Expenses) $188,866

Annual Compensation Requirement: $2,275,111

Current published schedules should be used as sample service levels. Hub options eligible

for subsidy are Phoenix (non-stop) and/or Denver (one-stop) or Los Angeles (one-stop).

At Great Lakes discretion, Great Lakes would operate four peak day round trip departures

with reduced service to two round trips per day in off peak seasonal periods.
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Prescott, Arizona to Los Angeles (LAX)

Three Round Trips - B1900 - (nine seat configuration)

(at 98 percent completion)

Departures: 1835

Block Hours: 2,860

Revenue Passenger Miles: 2,924,000

Available Seat Miles: 5,681,160

Operating Revenues:

Passenger: PRC 8,500 psgrs at $139.18 $1,183,030

Other: (at 0.62% of passenger revenue) $7,335

Total Operating Revenues: $1,190,365

Operating Expenses:

Direct: Aircraft and Hull Insurance $365,710

Fuel and Oil $1,284,941

Flying Operations $568,339

Maintenance $877,672

Total Direct Expenses: $3,096,662

Total Indirect Expenses: $1,039,462

Total Operating Expenses: $4,136,124

Operating Loss ($2,945,759)

Profit Element (5.0% of Total Operating Expenses) $206,806

Annual Compensation Requirement: $3,152,565

Current published schedules should be used as sample service levels. Hub options eligible

for subsidy are Los Angeles non-stop and/or Denver (one-stop alternative hub).
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Prescott, Arizona to Los Angeles (LAX)

Three Round Trips - B1900 - (19 seat configuration)

(at 98 percent completion)

Departures: 1835

Block Hours: 2,860

Revenue Passenger Miles: 4,816,000

Available Seat Miles: 11,993,560

Operating Revenues:

Passenger: PRC 14,000 psgrs at $124.92 $1,748,880

$0

Other: (at 0.62% of passenger revenue) $10,843

Total Operating Revenues: $1,759,723

Operating Expenses:

Direct: Aircraft and Hull Insurance $365,710

Fuel and Oil $1,284,941

Flying Operations $568,339

Maintenance $877,672

Total Direct Expenses: $3,096,662

Total Indirect Expenses: $1,171,535

Total Operating Expenses: $4,268,197

Operating Loss ($2,508,474)

Profit Element (5.0% of Total Operating Expenses) $213,410

Annual Compensation Requirement: $2,721,884

Current published schedules should be used as sample service levels. Hub options eligible

for subsidy are Los Angeles non-stop and/or Denver (one-stop alternative hub).
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Prescott, Arizona to Los Angeles (LAX)

Two Round Trips - EMB-120 (30 seat aircraft)

(at 98 percent completion)

Departures: 1431

Block Hours: 2,230

Revenue Passenger Miles: 5,228,800

Available Seat Miles: 14,767,920

Operating Revenues:

Passenger: PRC 15,200 psgrs at $119.10 $1,810,320

Other: (at 0.62% of passenger revenue) $11,224

Total Operating Revenues: $1,821,544

Operating Expenses:

Direct: Aircraft and Hull Insurance $365,975

Fuel and Oil $1,326,966

Flying Operations $535,022

Maintenance $829,807

Total Direct Expenses: $3,057,770

Total Indirect Expenses: $1,207,512

Total Operating Expenses: $4,265,282

Operating Loss ($2,443,738)

Profit Element (5.0% of Total Operating Expenses) $213,264

Annual Compensation Requirement: $2,657,002

 This Proposal is submitted with no upline scheduling restrctions
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Show Low, Arizona

B1900 - (nine seat configuration)

(at 98 percent completion)

Departures: 1792

Three Round Trips in Summer Schedules - Two Round trips in Winter Schedules

Operating Revenues:

Passenger: SOW 5,000 psgrs at $106.74 $533,700

Other: (at 0.62% of passenger revenue) $3,309

Total Operating Revenues: $537,009

Operating Expenses:

Direct: Aircraft and Hull Insurance $365,710

Fuel and Oil $714,108

Flying Operations $276,022

Maintenance $597,551

Total Direct Expenses: $1,953,391

Total Indirect Expenses: $725,036

Total Operating Expenses: $2,678,427

Operating Loss ($2,141,418)

Profit Element (5.0% of Total Operating Expenses) $133,921

Annual Compensation Requirement: $2,275,339

Current published schedules should be used as a sample service level. Hub options eligible

for subsidy are Phoenix hub (non-stop) and/or Denver (one-stop alternate hub)

No less than 1,082 departures would be operated from May 1st through October 31st and

no less than 710 departures would be operated from November 1st through April 30th.

No upline scheduling restrictions.
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

Show Low, Arizona

B1900 - (19 seat configuration)

(at 98 percent completion)

Departures: 1792

Three Round Trips in Summer Schedules - Two Round trips in Winter Schedules

Operating Revenues:

Passenger: SOW 9,500 psgrs at $102.98 $978,310

Other: (at 0.62% of passenger revenue) $6,066

Total Operating Revenues: $984,376

Operating Expenses:

Direct: Aircraft and Hull Insurance $365,710

Fuel and Oil $714,108

Flying Operations $276,022

Maintenance $597,551

Total Direct Expenses: $1,953,391

Total Indirect Expenses: $788,285

Total Operating Expenses: $2,741,676

Operating Loss ($1,757,300)

Profit Element (5.0% of Total Operating Expenses) $137,084

Annual Compensation Requirement: $1,894,384

Current published schedules should be used as a sample service level. Hub options eligible

for subsidy are Phoenix hub (non-stop) and/or Denver (one-stop alternate hub)

No less than 1,082 departures would be operated from May 1st through October 31st and

no less than 710 departures would be operated from November 1st through April 30th.

No upline scheduling restrictions.
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

** Prescott, Arizona to Phoenix (PHX)

Four Round Trips - B1900 - (nine seat configuration)

(at 98 percent completion)

Departures: 2454

Block Hours: 1,718

Revenue Passenger Miles: 739,500

Available Seat Miles: 1,921,482

Operating Revenues:

Passenger: PRC 8,500 psgrs at $54.10 $459,850

Other: (at 0.62% of passenger revenue) $2,851

Total Operating Revenues: $462,701

Operating Expenses:

Direct: Aircraft and Hull Insurance $365,710

Fuel and Oil $791,689

Flying Operations $341,401

Maintenance $784,259

Total Direct Expenses: $2,283,059

Total Indirect Expenses: $867,158

Total Operating Expenses: $3,150,217

Operating Loss ($2,687,516)

Profit Element (5.0% of Total Operating Expenses) $157,511

Annual Compensation Requirement: $2,845,027

 This illustrative option assumes no upline scheduling restrctions

** For illustrative and comparison purposes, we have also provided a Phoenix service option for

Prescott that would be subject to significant modifications at the Phoenix hub gate facilities.
Great Lakes Aviation, Ltd.

Annual Compensation Requirements for Essential Air Service at

** Prescott, Arizona to Phoenix (PHX)

Four Round Trips - B1900 - (19 seat configuration)

(at 98 percent completion)

Departures: 2454

Block Hours: 1,718

Revenue Passenger Miles: 1,044,000

Available Seat Miles: 4,056,462

Operating Revenues:

Passenger: PRC 12,000 psgrs at $50.72 $608,640

Other: (at 0.62% of passenger revenue) $3,774

Total Operating Revenues: $612,414

Operating Expenses:

Direct: Aircraft and Hull Insurance $365,710

Fuel and Oil $791,689

Flying Operations $341,401

Maintenance $784,259

Total Direct Expenses: $2,283,059

Total Indirect Expenses: $905,548

Total Operating Expenses: $3,188,607

Operating Loss ($2,576,193)

Profit Element (5.0% of Total Operating Expenses) $159,430

Annual Compensation Requirement: $2,735,624

 This illustrative option assumes no upline scheduling restrctions

** For illustrative and comparison purposes, we have also provided a Phoenix service option for

Prescott that would be subject to significant modifications at the Phoenix hub gate facilities.