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US

. Departmen t o f Transportatio n Offic e o f fh e Secretar

y o f Transportatio n 120 0 Ne w JerseyAvenue , S E Washington , D C 2059 0

Mr
. Mar c Luike n Deputy Commissione r

of Aviatio n Statewid e Aviatio n Departmen t

of Transportatio n an dPubli c Facilitie s 411 1 Aviatio n Avenu e P.O
. Bo x 19690 0 Anchorage , A K

99519-690 0 Dea r Commissione r

Luiken : Jun e 15 , 201 0

A s yo u know , War dAir , Inc. , provide s subsidize dai r servic e unde r

th e essentia l ai r

servic e (EAS ) progra mat

Chatha man dFunte r

Bay
. Ou r

curren t contrac t with War dAir , Orde r 2008-6-27 , call s for

acombine dannua l subsid y o f $17,28 0 t o provid e Chatha mwit h one , one-sto p roun dtri p pe r

month t o Juneau , an dFunte r Bay with on e nonsto p roun dtri p per wee k t o Juneau , excep t

tha t for onc e amonth a

n intermediat e sto p woul db e allowed
. Al l of th e servic e wa s t o b e provide dwith single-engin e pisto n aircraft , an dth e rat e expire s Septembe r 30
. In anticipatio n of

th e en dof

that contract , b y Orde r

2010-5-1 1 th e Departmen t requeste d"bes t

an d final " proposal s t o serv e Chatha man dFunte r Bay for anew , two-year

period , an dw e receive da timely-file dproposa l fro monl y on e carrier
. War dAir
. M y purpos e i n writin g i s t o infor myo u o f th e result s o f

th e carrier' s servic e an dsubsid y proposa l before w e submi t

arecommendatio n o n th e carrier-selectio n issu e t o th e Assistan t Secretary for Aviatio n an dInternationa l Affair s for decision
. Sinc e ther e ar e n o othe r option s before th e Departmen t

a t thi s time , yo u nee dno t

respon dt o thi s letter
. However , w e wante dt o giv e yo u th e opportunit y t o submi t

an y comment s i

f yo u wish
. Copie s o f

th e carrier' s full proposa l ma y b e accesse donlin e throug h th e Department' s Docket s Managemen t Syste ma

t http://www.rcgulations.gov / b y enterin g "DOT-OS T 1997-3134 " i n th e "ente r Keywor do r

ID " field , s o w e wil l onl y summariz e it here
. Propose dService : War dAir' s proposal , attache da s Appendi x A , call s for a n annua l subsid y o f

$19,58 4 t o provid e Chatha mwith one , one-sto p roun dtri p per month t o Juneau , an dFunte r Ba y wit h on e nonsto p roun dtri p pe r

wee k t o Juneau , excep t

that for onc e amonth a

n intermediat e sto p woul db e allowed , presumabl y ove r Funte r Bay
. Al l of

th e servic e i s t o b e provide dwith single-engin e pisto n aircraft , an dth e rat e expire s Septembe r 30
. O f course , th e onl y differenc e betwee n th e curren t contrac t an dWar dAir' s proposa l i s a$2,30 4 increas e i n annua l subsid y t o $19,584 , an d th e ne w contrac t

woul dexpir e o n Septembe r 30 , 2012
.Pleas e not e that th e averag e passenge r

fare s show n i n Appendi x A d o not necessaril y reflec t

th e average loca l fare passenger s woul dpay , but , rathe r th e prorate dportio n o f

th e tota l ticke t

price ; e.g. , th e Funte r

Bay -Junea u portio n o f aFunte r Bay

- Junea u - Anchorag e ticke t that th e carrie r woul drealize
. Also , the
. fare show n i s ne t o f certai n charge s suc h a s federa l transportatio n

, security fees , excise-o r

ticke t taxes , an dpassetige r

facility charges
. O f

course , carrier s hav e th e discretio n t o charg e fare s the y dee mappropriate , an dth e passenge r fare s presente dhav e bee n develope dfor

subsid y rat e computatio n purpose s only
. Base do n th e cos t elements incorporate d i n th e carrier' s computatio n summaries , acarrie r woul dhav e t o realiz e passenge r fare s CQmparable t o th e average s show n i n it s proposa l i n orde r t o achiev e break-eve n o r profitabl e operation s eve n with subsidy
. War dAir' s schedul e woul dcontinu e a s befor e i n term s o f frequenc y an drouting , an dth e carrie r may mak e schedul e change s t o reflec t changin g conditions , e.g. , t o bette r mee t shiftin g connectin g ban k

time s at th e hub
. Th e Departmen t expect s subsidize dai r

carrier s t o maintai n well-time dan dwell-space dflight s i n orde r t o ensur e full compensation
. W e kno w thi s matte r

i s importan t

t o yo u an dw e wil l ac t

a s quickl y a s possibl e upo n receip t of you r letter
. In orde r

t o expedit e th e case , pleas e submi t you r comment s b y emai l t o EAS@dot.go v an d Kevin.Adams@dot.go v b y Jun e 24
. I f yo u hav e an y question s o r d o no t wis h t o submi t

formal conimeftts , pleas e contac t Kevi n Adam s a

t (202 ) 366-1047
. Sincerely ,

Denni s J
. DeVan y ^ Chief , Essentia l Ai r

Servic e Divisio n Offic e o f Aviatio n Analysi s

cc : War dAi rANNUA L COMPENSATIO N PROJECTIO N FO R ESSENTIA L AI R SERVIC E A T CHATHA M AN D FUNTE R BAY/ALASK A Fo rth e Tw o Yea rPerio d Beginnin g Octobe r1 , 201 0 

## h\9oeu,J^ i y A

Bloc k Hours : (Se e Not e A ) ^ Revenu e Estimate s Passenger s FN R Passenger s CY M Carg o (pounds ) FNR Carg o (pounds ) CY M Tota l Revenu e
Direc t Expens e • Mai l Sorting : 31 2 day s @ 2 1/ 2 minute s da y Pilo t (Includin g Benefit s & W C Ins ) Fue l & Oi l • lnsurance,(Aircraf t & Liability ) Maintenanc e Depreciatio n Tota l Direc t Expense s Indirec t Expens e Hanga r^ ' Overhea d Tota l Indirec t Expense s Tota l Operatin g Expense s (TOE ) Retur n a t 10 % o f TO E Tota l Economi c Cos t 5 6 1 0 0 63 9

Hour s 1 3 3 8 3 8 3 8 3 8 3 8

3 8 3 8

10 % Fare/Rat e

$77.0 0 155.0 0 0.2 0 0.4 0
Rat e pe r Hou r 50.0 0 134.3 0 112.0 5 64.2 2 93.8 6 17.4 1

76.1 6 99.7 7
647.7 6 64.7 8 712,5 4 Total s

$4,31 2 1,55 0 0 25 6 6,11 8
Total s 65 0 5,10 3 4,25 8 2,44 0 3,56 7 66 2 16.68 0
2,89 4 3,79 1 6,68 5 23,36 5 2.33 7 25,70 2 Annua l Subsidvfo r100 % Completio n 

### 19.58 4
Not e A

. Bloc k Hou rCalculatio n JNU-FNR-CYM-JN U JNU-FNR-JN U Tota l Annua l Bloc k

Hour s 

### Trip s pe rY r 1 2 4 0 § 2 Hour s pe rTri p 1. 5 0. 5 Bloc k Hour s 1 8 2 0 3 8 Aircraft : DeHavillan d Beave rDHC-2 , Cessn a 20 6 o rCessn a 185

.
201 0 USDOTMai l Contrac t Appendi xB 2010-06-0 9 

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