BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASIDNGTON, D.C. 

) 

Application of ) 

) 

HARRIS AIRCRAFT SERVICES, INC. ) Docket DOT-OST-2014-0145 

) 

for a certificate of public convenience and ) 

necessity pursuant to 49 U.S.C. §41102 ) 

to engage in interstate scheduled air ) 

transportation of persons, property and mail ) 

CONSOLIDATED REPLY OF HARRIS AIRCRAFT SERVICES, INC. TO 

ANSWERS TO APPLICATION FOR 

A CERTIFICATE OF PUBLIC CONVENIENCE & NECESSITY 

Communications with respect to this document should be sent to: 

R. Scott Harris 

President 

Harris Aircraft Services, Inc. 

400 Airport Road 

Sitka, AK 99835 

September 29, 2014 

Pierre Murphy 

Law Offices of Pierre Murphy 

1200 New Hampshire Avenue, NW 

Suite 590 

Washington, DC 20036 

Telephone: (202) 776-3980 

Facsimile: (202) 776-3975 

Email: pmurphy@lopmurphy.com 

Attorney for 

Harris Aircraft Services, Inc. 
BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

) 

Application of ) 

) 

HARRIS AIRCRAFT SERVICES, INC. ) Docket DOT -OST-2014-0145 

} 

for a certificate of public convenience and ) 

necessity pursuant to 49 U.S.C. §41102 ) 

to engage in interstate scheduled air ) 

transportation of persons, property and mail ) 

CONSOLIDATED REPLY OF HARRIS AIRCRAFT SERVICES, INC. TO 

ANSWERS TO APPLICATION FOR 

A CERTIFICATE OF PUBLIC CONVENIENCE & NECESSITY 

Pursuant to Subpart B of the Department's ("DOT") procedural regulations, 14 C.F .R. 

§302.204(b), Harris Aircraft Services, Inc. ("Harris Air") hereby submits this consolidated reply 

to the answers filed herein. 

BACKGROUND 

Harris Air is a small, 1 family-owned, FAA Part 135 Alaska intra-state commuter 

operating a fleet of four ( 4) small aircraft. Based in Sitka, AK, Harris Air has since 1999 been 

providing Alaska intra-state air. services between a number of communities in the Southeast 

Alaska region, including long-standing Essential Air Service ("EAS") in one market. Hams Air 

has applied for a DOT inter-state Certificate, providing all of the required information. As is 

16 full-time employees, plus 10 part-time employees, and 1 seasonal employee 
REPLY OF HARRIS AIRCRAFT SERVICES, INC 

common with any number of Alaska intra-state Part 135 operators which have over the years 

applied for DOT inter-state Certificates but where the essential nature of their intra-state 

scheduled operations will actually remain unchanged after certification, there will similarly be no 

change in Harris Air's FAA Part-135-authorized intra-state scheduled operations. As set forth in 

its application, Harris Air's existing intra-state operations in this Southeast region of Alaska will 

continue as currently operated. 

Over a dozen answers in strong support of Harris Air's application were filed by various 

relevant constituents and interested parties who all, for many years now, have relied on Harris 

Air's intra-state services, including: Rep. Kreiss-Tomkins, the local representative to the Alaska 

Legislature, plus the Cities of Pelican, Port Alexander and Klawock, and the City & Borough of 

Sitka. Other commenters in support include various local businesses and the local school district 

who for many years have all relied on Harris Air's intra-state commuter services and continue to 

do so. 

In comparison to the numerous constituents' filings strongly in support, only one answer 

in opposition was filed. As has unfortunately become almost routine when any Alaska intra-state 

operator seeks DOT inter-state certificate authority, a carrier objection was filed. The lone 

objector was Air Excursions, LLC ("Air Excursions" or "Objector"), whose own 2008 equivalent 

DOT certificate application attracted a similar opposition filed by a local operator which already 

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REPLY OF HARRIS AIRCRAFT SERVICES, INC 

held DOT certificate authority.2 That carrier objector for its own commercial reasons did not 

want Air Excursions to hold any certificate authority and, unsuccessfully, raised arguments 

similar to those raised herein. 

ARGUMENT 

That Air Excursions for some reason does not want Harris Air to hold a certificate is 

patently clear from its September 15 answer. However, as was the case with its own successful 

certificate application strenuously objected to by the certificated local operator, Objector's 

arguments herein are similarly baseless. Whereas Objector's answer is long on rhetoric and 

hyperbole, 3 it is short on relevant facts. 

I. DOT Show Cause Order 2014-3-2 Does Have Some Bearing on Fitness Herein 

The Objector first accuses Harris Air of a "failed attempt to avoid close scrutiny" 

(Answer, p. 1) and of falsely asserting that there has been no significant changes in Harris Air's 

status or operations since the Show Cause Order issued approximately 6 months ago. Far from 

being "patently inaccurate" (Answer, p. 2), and apart from currently operating a slightly smaller 

fleet than was the case in 2013 (4 aircraft instead of 5), there has in fact been no significant 

2 See: Air Excursions, LLC (Docket DOT-OST-2008-0318). 

3 The sole Objector's 11-page answer is replete with inaccuracies as well as rhetoric and hyperbole ("patently 

inaccurate", "fundamental inconsistency'', "failed attempt to avoid close scrutiny of this Application", "seal'ch high 

and low", "disingenuously tailored", "flouting the Department's regulations", "unrealistic and deceptive", 

"premeditated deceptive business practice", "Harris operates a' Cab' scheme" [inappropriate and 

insensitive language deleted and not repeated], "tortured and logistically impossible", "unrealistic or deceptive 

scheduling", "deafeningly silent", "playing fast and loose with the facts", "replacing clarity with doubt". 

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REPLY OF HARRIS AIRCRAFT SERVICES, INC 

change at Harris Air. 

DOT Show Cause Order 2014-3-2 speaks for itself and was issued over the strenuous 

objection of another certificated operator (which has not objected herein). As regards the current 

Objector herein, curiously it was only after the issuance of the March 2014 Show Cause Order 

that it also filed strenuous objections essentially similar to those filed herein. In fact, apart from 

the slightly smaller fleet-size today, the only other "change" of which Harris Air is aware since 

Objector's March 18,2014 objection to the March 2014 Show Cause Order is Objector's 

principals'4 unsuccessful attempt in late March/April to acquire the assets of Harris Air. See: 

Infra. 

Whereas there are very slight differences in the operational and other status of the 

company today when compared to when it was tentatively found fit earlier this year, including a 

slightly smaller aircraft fleet being operated, Harris Air's application indicated those minor 

changes and its current intra-state Alaska operations remain substantially unchanged from 2013, 

including type ofF AA commuter authority held, routes served, service frequency, numbers of 

employees employed, etc. 

II. Harris Air's Proposal Meets the Financial Fitness Test 

Contrary to Objector's assertions, Harris Air's application meets the Department's 

4 Mr. Kent Craford & Mr. Mike Stedman 

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REPLY OF HARRIS AIRCRAFT SERVICES, INC 

financial fitness test. 

(i) Pre-Operating I Startup Expenses 

Objector states that Harris Air has improperly failed to include any preoperating or other start-up expenses in its service proposal. However Objector fails to 

acknowledge that Harris Air will in fact incur no startup expenses since it already holds all of the 

FAA Part 135 scheduled commuter authority required. 

In comparison to Harris Air, it is noteworthy that in each of its 2001 and 2009 fitness 

certifications Objector held only intra-state, on-demand/air taxi FAA authority at the time it 

applied for DOT interstate authority. Objector in its certification cases consequently did have 

pre-certification costs which had to be incurred, and therefore were required to be taken into 

account in meeting the Department's financial fitness test in those certifications. By contrast, 

Harris Air is and for some time now has operated as a Part 13 5 intra-state commuter as stated in 

its application herein. 5 

In addition to the lack of any pre-operating certification costs, Objector also attempts to 

take issue with certain other unspecified pre-operating/start-up expenses related to "certain 

outstations, training employees and operating aircraft." Since Harris Air will be continuing with 

its existing intra-state services, there are to be no changes in employee numbers or training, all 

5 Under its FAA FAR 135 intra-state commuter certificate there is a listing at C0701 & 0702 of each airport 

"authorized for scheduled operations" by Harris Air. These are the airports Harris Air currently serves p uant to 

its FAA commuter authority. 

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REPLY OF HARRIS AIRCRAFT SERVICES, INC 

outstations have been long-established and approved by FAA, there are no additional aircraft to 

be acquired, no additional operating expenses to be incurred, no new additional advertising or 

marketing expenses and whatever DOT reporting systems requirements, Harris Air already owns 

the reporting systems software. So as was the case with the lack ofF AA certification expenses, 

there will be no other pre-operating/start-up expenses. 

This case is no different from other Alaska intra-state commuters applying for DOT interstate certificate authority. As was recognized by the Department in another Alaska intra-state 

Part 135 commuter applying for DOT inter-state authority: 

"[applicant] is not expanding its current operations and is instead requesting an 

inter-state certificate to continue its scheduled and charter operations . . . in 

Alaska. Therefore we agree with the company that no pre-operating costs will be 

incurred and that its first-year operating expenses are sound based on [applicant's] 

past experience." Scott Air, LLC, DOT Show Cause Order 2013-1-12 at p. 4 & 

DOT Final Order 2013-8-5 (Docket DOT-OST-2012-0178). 

Harris Air is in the same situation as regards the lack of any pre-certification or other 

start-up expenses. 

(ii) Operating Expenses 

Next, Objector attempts to make much of a "significant reduction in Year 

1 operating expenses forecast (2.58 million v. 2.23 million)" relying on Harris Air's 2013 

application (Answer, p. 4). 

However, as is indicated in the application and as Objector well knows, the difference in 

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REPLY OF HARRIS AIRCRAFT SERVICES, INC 

projected operating expenses Objector tries to make is hardly significant or in any way nefarious, 

such difference being accounted for by a simple difference in the number of aircraft currently 

being operated and to be operated. At the time of Harris Air's April 2013 application 18 months 

ago, Harris was operating, and was projected to continue operating in 2013/2014, a fleet of five 

(5) aircraft as reflected in its FAA Part 135 Ops Specs in effect at that time. In its recent August 

25, 2014 application, Harris Air is operating, and is projected to continue operating in 

2014/2015, a fleet of four (4) aircraft as is reflected in its FAA Part 135 commuter Ops Specs 

currently in effect. This approximately 13.5% difference in overall projected operating costs, 

which projected operating costs are based on Harris Air's actual operating costs in prior years, 6 is 

accounted for by the difference in number of aircraft actually operated. 

(iii) Harris Air's Balance Sheet 

Next, Objector attempts to make an issue regarding Harris Air's current Balance 

Sheet. However the current Balance Sheet is sound, meets the financial fitness test, and is fairly 

typical for this type of established, operating carrier. 

Harris Air has provided detailed financial results for the periods 2011, 2012, 2013 and for 

the period ending May 30, 2014.7 These included P&L statements and Balance Sheets. Also 

provided was a current Balance Sheet dated as of August 14, 2014.8 In support of its fitness, 

6 See: DOT Order 2013-1-12 at page 4, supra. 

7 See: Exhibit HAS-7. 

8 See: Exhibit HAS-8. 

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REPLY OF HARRIS AIRCRAFT SERVICES, INC 

Harris Air's August 14,2014 Balance Sheet shows total current assets of$997,276 and total 

current liabilities of$213,096 giving the air carrier positive working capital of$784,180. Id.9 In 

addition, Harris Air reported net income for the 5-month period ending May 31, 3014 of $58,692 

on revenues of$958,567. 10 These Balance Sheet and net income figures are in line with both 

Harris Air's actual financial results for prior years (2011, 2012 and 2013) as well as with the 

financial results of similarly-sized Alaska operators found financially fit by the Department.11 

There is no problem with Harris Air's Balance Sheet or its financial results. 

III. Harris Air Continues to Demonstrate the Appropriate Compliance Disposition 

Objector next argues that Harris Air lacks compliance disposition. Objector's 

argument is, again, baseless. 

Harris Air is an FAA Part 13 5 intra-state commuter operating wholly within this isolated 

Southeast comer of Alaska. It is not a Part 298 inter-state commuter. For decades now, any 

number of Alaska intra-state commuters in various regions of Alaska have operated and continue 

to operate in this manner. Indeed, this presumably was how Objector itself operated prior to 

9 Harris Air has also provided evidence of a $500,000 bank line of credit submitted as part of the fmancial 

fitness demonstration. 

10 See: Exhibit HAS-7. Also, for 2013,2012 & 2011 Harris Air had net incomes of$158,909, $142,798 and 

$91,937. ld. 

11 See: DOT Order 2013-1-12 at p. 4 where that intra-state applicant had total current assets of$820,078, 

current liabilities of$39,540 giving that carrier a positive working capital of$780,538. That applicant also reported 

net income of $106,3 71 on revenues of $1.19M. 

8 
REPLY OF HARRIS AIRCRAFT SERVICES, INC 

becoming a DOT certificated air carrier in 2001 (and again in 2008); i.e. prior to those DOT 

certifications Objector was neither a Part 298 on-demand air taxi nor a Part 298 commuter. 12 

Objector next attempts to argue that Harris Air's existing intra-state schedule of flights is 

impossible and that Harris Air is guilty of"unrealistic and deceptive scheduling" (Answer, p. 9). 

Contrary to Objector's statements, Harris Air's schedule is what it historically has operated 

without any problems. Further and most importantly, as the numerous answers in support of 

Harris Air indicate, the local travelling public has had no problems with Harris Air's schedule or 

its service in general. As these constituents clearly indicate, quite the opposite is in fact the case. 

IV. SEARHC Contract 

Lastly, Objector appears to make much of a contract Harris Air held with the 

Southeast Alaska Regional Health Consortium ("SEARHC"). Objector refers to a "deafening 

silence about that situation" (Answer, p. 1 0) and asserts this contract to be a "key element" of 

Harris Air's service proposal. It is not. Objector's allusions are again baseless. 

Until the recent early termination by SEARHC due to SEARHC's internal funding and 

budget difficulties, Harris Air did indeed hold and operated a med-evac and passenger airlift 

contract with SEARHC for employee/patient transportation to SEARHC's hospital in Sitka, AK. 

12 Once certificated by the Department, the necessity for any Part 298 inter-state authority for Objector's intrastate operations was of course rendered moot since the DOT Certificate issued to Objector by DOT Order 2009-11-5 

was for scheduled inter-state authority. 

9 
REPLY OF HARRIS AIRCRAFT SERVICES, INC 

Harris Air initiated litigation over this breach of contract by SEARHC, however, as an Alaska 

Native organization, SEARHC used a sovereign immunity13 defense and the litigation was 

settled. Consequently, any revenues which may have internally been projected in 2013 and early 

2014 pursuant to this SEARHC med-evac contract, were of course not included in the projections 

herein since that SEARHC contact is no longer in effect. 14 

V. The Reason for Air Excursions' Objection 

Whereas, unfortunately, it now seems almost automatic for any intra-state Alaska 

operator's application for DOT certificate authority to receive strenuous objections from other 

Alaska certificated operators (E.g.: see: Harris Air LLC (Docket DOT-OST-2013-0089); 

Objector herein Air Excursions. LLC itself (Docket DOT -OST -2008-0318); Scott Air, LLC 

(DOT-OST-2012-0178), etc.), it is not clear from the record in either this docket or in the 2013 

Harris Air docket why Juneau-based Air Excursions is objecting herein. 

However, shortly after Air Excursions filed its March 18, 2014 objection to the March 

2014 Show Cause Order 2014-3-2 (Docket DOT-OST-2013-0089), 15 in late March/early April 

13 SEARHC is the region's largest employer, and as an Alaskan Native tribal organization, SEARHC has the 

status of a "sovereign" entity, and as such is immune from civil liability. 

14 However, notwithstanding the termination of that SEARHC med-evac contract, Harris Air does continue to 

hold and operate a transportation contract with SEARHC which is in good standing. 

15 NOTE: Objector did not file any objection to Harris Air's 2013 application but only after the Show Cause 

Order was issued. 

10 
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2014 Mr. Kent Craford and Mr. Mike Stedman arrived unannounced in Sitka at Harris Air's 

facility asking to meet with Harris Air's owner, Scott Harris. Mr. Harris understood that Messrs. 

Craford and Stedman were business partners and the principals of 2 Alaska DOT certificated 

carriers: Objector herein, Air Excursions, and Alaska Seaplane, Service, LLC ("Alaska 

Seaplanes". See: DOT Order 2013-4-1. 16 

Messrs. Craford and Stedman advised Mr. Harris that Alaska Seaplanes would be 

initiating service to Sitka and were interested in a purchase of certain of the assets of Harris Air, 

principally Harris Air's maintenance facilities in Sitka, but not including its FAR 13 5 commuter 

certificate. Apart from a follow-up call from Mr. Stedman approximately a week later, Mr. 

Harris did not pursue this expression of interest by Messrs. Craford and Stedman and there have 

been no further discussions regarding the acquisition by Messrs. Craford/Stedman or Air 

Excursions/ Alaska Seaplanes of Harris Air's infrastructure, or maintenance and other facilities. 

Harris Air submits that the March 18 objection to the Show Cause Order and Objector's answer 

in opposition filed herein are not unconnected with this attempt to acquire Harris Air's assets and 

facilities. 

Secondly, another reason for Air Excursions' objection to Harris Air's certification is 

perhaps indicated by the recently-issued DOT Order 2014-9-13, an EAS Order requesting 

16 NOTE: Air Excursions and Alaska Seaplanes share a commonality of commercial interest since both share 

common ownership and the common DOT-approved trade name of"Alaska Seaplanes". See: DOT §215 Notice 

dated April 2, 20 13. 

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subsidy proposals for 4 Alaska communities 17 where Alaska Seaplanes is the subsidized 

incumbent at each of those four EAS points, receiving a total annual subsidy of$542,412. Id. 

However in that Order soliciting new EAS subsidy proposals for the relevant up-coming subsidy 

period, the Department noted that Harris Air currently provides non-EAS air service at levels 

meeting the Department's EAS frequency minima in 3 of the 4 communities at issue. See: DOT 

Order 2014-9-13, p. 2, n. 1. The Department specifically noted Harris Air's certificate 

application pending herein, noting that: 

"If Harris Air's application is approved, we may revisit the need for requesting 

proposals at those three locations ... If Harris Air, as a certificated carrier, is 

providing subsidy-free EAS, the need for subsidized EAS is moot." Id. 

The loss of EAS subsidy to Alaska Seaplanes at the three locations referred to in DOT Order 

2014-9-13 appears to total $467,031. Id. Therefore, as indicated in Order 2014-9-13, the loss to 

Objector's sister airline of this substantial amount if Harris Air is certificated is clearly yet 

another significant, but improper, reason for Air Excursions' objections to Harris Air being 

awarded a DOT certificate. 18 

Air Excursions/ Alaska Seaplanes may therefore have a number of significant, but 

17 E1fm Cove, Pelican, Angoon & Tenakee, AK 

18 NOTE: Alaska Seaplanes is also objecting to Harris Air's EAS service proposal for Kake, AK. See: DOT 

Order 2014-3-15 (Docket DOT-OST-2008-0217) requesting proposals and Alaska Seaplanes' filing in opposition 

dated June 3, 2014. 

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REPLY OF HARRIS AIRCRAFT SERVICES, INC 

non-relevant, commercial reasons for wishing Harris Air not to become a certificated carrier, but 

those reasons have nothing to do with Harris Air's fitness. 

CONCLUSION 

For the reasons stated, Harris Air submits Objector is improperly seeking to prevent the 

issuance of the inter-state certificate authority applied for herein. Objector's arguments should 

be rejected since Applicant is financially and otherwise fit. 

September 29, 2014 

Res ectfully submitted, 

l' ~ 

l rre hy ---- / I:w Offices of Pierre Murphy 

13 

1200 New Hampshire Avenue, NW 

Suite 590 

Washington, DC 20036 

Telephone: (202) 776-3980 

Facsimile: (202) 776-3975 

Email: pmurphy@lopmurphy.com 

Attorney for Harris Aircraft Services, Inc. 
Certificate of Service 

I hereby certify that on September 29, 2014, a copy of the foregoing Reply of Harris Aircraft 

Services, Inc. was served via US Mail (and by electronic transmission where indicated) to the 

following persons: 

Attn: Terry L. Gordon 

Manager 

Attn: Troy McClanahan 

POI 

Juneau Flight Standards District Office (FSDO AL05) 

Federal Aviation Administration 

3032 Vintage Park Boulevard 

Suite 106 

Juneau,AK 99801 

Peter J. Lynch 

Assistant Chief Counsel for Enforcement AGC-3 00 

Federal Aviation Administration 

800 Independence Avenue, SW 

Washington, DC 20591 

Regional Counsel, AAL-7 

Federal Aviation Administration 

Alaskan Region Headquarters 

222 West Jili Avenue, Suite 14 

Anchorage,AK 99513 

Office of Airline Info 

DOT /RIT A/BTS E-36-RTS-42 

1200 New Jersey Avenue, SE 

Washington, DC 20590 

Robert E. Cohn, Esq. (via email) 

Patrick R. Rizzi, Esq. 

Counsel for AIR EXURSIONS, LLC/ ALASKA SEAPLANES, LLC 

Hogan Lovells US, LLP 

Columbus Square 

555 13th Street, NW 

Washington, DC 20004 

robert.cohn@hoganlovells.com 

patrick.rizzi@hoganlovells.com