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Alaska Seaplane Service, LLC

Alaska Seaplane Service currently provides six flights a week with a small aircraft year around between the points Pelican and Elfin Cove and the hub point Juneau, Alaska. No other scheduled air service is provided at Pelican and Elfin Cove.  Because of the events of September 11, 2001, air traffic to and from these points has fallen significantly. The winter is the slowest season of the year, but also the most costly because of the high rate of flights that cannot be completed due to weather. Immediate assistance in the form of Essential Service subsidy is needed.

By:  Alaska Seaplane Service, Hank Myers, 425.641.8243

By:  Read Van de Water

On February 13, 2002, Alaska Seaplane Service, LLC (Alaska Seaplane), filed a 90-day notice of its intent to suspend its unsubsidized service at Elfin Cove and Pelican, Alaska, effective on or about May 13, 2002. By Order 2002-5-13, May 14, 2002, the Department prohibited the carrier from suspending service at the communities and requested proposals, with subsidy if necessary, from carriers interested in providing replacement service. Since we have not received any proposals, this case will not be completed before the end of the current hold-in period, and as required by 49 U.S.C. 41734, we must continue to hold Alaska Seaplane in for an additional 30-day period.

By:  Read Van de Water

By:  Randall Bennett

As shown on the attached spread sheet, the actual operating loss, before return on investment, for the Pelican and Elfin Cove operation was nearly $84,000 for the year ended 3/31/2002. A significant portion of this loss is due to expense increases associated with changes subsequent to September 11, but commercial revenue and traffic were already showing steady decreases even prior to 9/11, and those decreases have continued. Other leading indicators of economic condition such as population, number of jobs, and school students have also shown steady and sizeable losses. The data clearly show that the traffic reductions and expense increases are not going to reverse and are part of a continuing trend.

By:  Alaska Seaplane Service, Hank Myers, 425.641.8243

The staff and representatives of Alaska Seaplane have agreed to an interim annual subsidy of $59,066 for service consisting of five round trips each week over a routing of Juneau-Pelican-Juneau; and one round trip each week over a routing of Juneau-Pelican/Elfin Cove-Juneau with seven-seat DeHavilland DHC-2 Beaver aircraft.

By:  Randall Bennett

Alaska Seaplane has submitted a proposal and we set an interim subsidy rate of $59,066 by Order 2002-7-33. However, this case will not be completed before the end of the current hold­in period, and, as required by 49 U.S.C. 41734, we must continue to hold Alaska Seaplane in for an additional 30-day period.

By:  Randall Bennett

On February 13, 2002, Alaska Seaplane Service, LLC (Alaska Seaplane), filed a 90-day notice of its intent to suspend its unsubsidized service at Elfin Cove and Pelican, Alaska, effective on or about May 13, 2002. By Order 2002-5-13, May 14, 2002, the Department prohibited the carrier from suspending service at the communities for an initial 30-day period, through June 13, 2002, and requested proposals, with subsidy if necessary, from carriers interested in providing replacement service. As required by 49 U.S.C. 41734, we have extended Alaska Seaplane's service obligation for additional 30-day periods, the latest through September 13, 2002, by Order 2002-8-11.

By:  Randall Bennett

Order 2002-10-15, the Department extends Alaska Seaplane's service obligation at Elgin Cove and Pelican, AK, for an additional 30 days, through November 14, 2002.  Alaska Seaplane has submitted a proposal and we set an interim subsidy rate of 559,066 by Order 2002-7-33. however, this case will not be implemented before the end of the current held­in period, and, as required by 49 U. .C. 41734, we must continue to hold Alaska Seaplane in for an additional 30-day period.

By: Randall Bennett

Alaska Seaplane has submitted a proposal and we set an interim subsidy rate of $59,066 by Order 2002-7-33. However, this case will not be completed before the end of the current holdin period, and, as required by 49 U.S.C. 41734, we must continue to hold Alaska Seaplane in for an additional 30-day period.

By: Read Van de Water

Alaska Seaplane has submitted a proposal and we set an interim subsidy rate of 59.0o5 by Order 2002.-7-33, However, this case will not be completed before the end of the current hold in period, and, as required by 49 U.S. C, 41734, we must continue to hold Alaska Seaplane in for an additional 30-days period.

Order 2002-12-7, the Department extends Alaska Seaplane's service obligation at Elfin Cove and Pelican, AK, for an additional 30 day, through January 15, 2003.

By: Randall Bennett

By: Randall Bennett

Order 2003-1-27 selects Alaska Seaplane Service, LLC, to provide subsided essential air service at Elfin Cove and Pelican, Alaska, at an annual subsidy rate of $177,681 for a two-year term from February 1, 2003, through January 31, 2005. This rate also serves as a past-period rate retroactive to May 15, 2002, when we required the carrier to continue to serve these communities.

Alaska Seaplane was the only carrier to submit a proposal in response to our request. As a result of discussions with Department staff, the carrier has agreed to continue to provide service to the communities for a prospective two-year rate term, as follows: Pelican -- six round trips a week to Juneau, peak and off-peak; Elfin Cove -- one round trip a week and five flagstops a week to Juneau in the peak season and five flagstops a week to Juneau in the off­peak season. The service will be provided with 6-seat DeHavilland DHC-2 Beaver aircraft at an annual subsidy rate of $177,681.

By: Read Van de Water

Order 2005-03-18
OST-02-11586 - EAS at Elfin Cove and Pelican, AK

Issued March 10, 2005 | Served March 15, 2005

Order Requesting Proposals

By this order, the Department is requesting proposals from carriers interested in providing essential air service at Elfin Cove and Pelican, Alaska, for a new two-year period, with or without subsidy.

By Order 2003-1-27, issued January 28, 2003, the Department selected Alaska Seaplane Service, LLC, to provide EAS at Elfin Cove and Pelican, for a two-year period at a combined annual subsidy rate of $177,681. All service was to be provided to Juneau with 6-seat DeHavilland DHC-2 Beaver aircraft. At Pelican, service consisted of six round trips a week year-round, peak and off-peak season. At Elfin Cove, service consisted of one round trip and five flagstops a week in the peak season and five flagstops a week in the off-peak season. The carrier's contract for these communities expired on January 31, 2005.

In calendar year 2003, Elfin Cove generated a total of 628 O&D passengers and Pelican generated a total of 1,905 O&D passengers. In calendar year 2002, Elfin Cove generated 583 O&D passengers and Pelican generated 2,062 passengers. In addition, both communities generated significant cargo and mail volumes.

By: Karan Bhatia

Order 2005-3-36
OST-2002-11586

Issued March 25, 2005 | Served March 30, 2005

Order Extending Subsidy Rate - PDF Not Available

The Department is extending the subsidy rate set by Order 2003-1-27 for Alaska Seaplane's essential air service at Elfin Cove and Pelican, Alaska, as an interim rate, effective February 1, 2005, until further Department action.

By: Randall Bennett

April 14, 2005

Essential Air Service Bid of Alaska Seaplane Service

Historically, both Pelican and Elfin Cove were fishing villages. As fishing activity has reduced, Elfin Cove has become a sport fishing center with several small fishing lodges and guides in business there. Pelican remained a commercial fishing center until 2002 when the effects of the closure of the nearby Glacier Bay fisheries reduced income for locally based fishermen and the local fish buyer and cold storage plant, Pelican Seafoods. Pelican Seafoods has since shut down operations and declared bankruptcy. Aided by federal funds resulting for the fisheries closure, Pelican is trying to develop new business activity, particularly tourism. Among the new businesses are a fishing lodge, guide services and a traditional boat building center. The year around resident population has declined, and the seasonality of traffic has increased. Both Pelican and Elfin Cove can only be reached by VFR flight, usually through areas where there are no advance weather reports. A significant portion of all flights during the year turn back short of one or both destinations, mostly during the winter months. Other than Seaplanes' service, Pelican receives once a month State ferry service from Juneau in the winter. There is no ferry service to Elfin Cove.

By: Hank Myers, 425-641-8243

April 14, 2005

Bid for Pelican and Elfin Cove, Alaska of Alaska Seaplane Service

By: Alaska Seaplane Service, Craig Loken

April 26, 2005

State of Alaska Comments

On April 26, 2005, Department staff telephoned Carl Siebe of the Alaska Department of Transportation and Public Facilities in Anchorage to discuss the EAS proposal submitted by Alaska Seaplane Service to continue serving Pelican and Elfin Cove.

Mr. Siebe advised the staff that the State supported the selection of Alaska Seaplane for a new two‑year rate term. He also stated that the State has previously found the carrier to be fit and that he is not aware of any extenuating circumstances that would prevent the carrier from fulfilling the requirements of its service proposal.

By: Alaska Department of Transportation, Carl Siebe

Order 2005-5-3
OST-2002-11586

Issued May 10, 2005 | Served May 13, 2005

Order Selecting Carrier and Establishing Subsidy Rate

After reviewing Alaska Seaplane's proposal, and the favorable comments submitted by ADOT, we have decided to reselect Alaska Seaplane to provide EAS at Pelican and Elfin Cove for a new two‑year period. Because Alaska Seaplane's last contract expired on January 31, we will set this rate retroactive to February 1, 2005, and then prospectively for two years, through May 31, 2007.

As noted earlier, we extended Alaska Seaplane's subsidy rate as an interim rate, subject to retroactive adjustment, until further notice, while we processed the carrier selection case. We did this in order for the carrier to continue to be compensated for its services. The final rate we are establishing here will be effective February 1, 2005, and will be in lieu of, and not in addition to, that interim rate. If the carrier has already been compensated as a result of claims it filed under the interim rate, some adjustment will be necessary.

By: Karan Bhatia

Order 2007-3-6
OST-2002-11586

Issued March 12, 2007 | Served March 15, 2007

Order Requesting Proposals

As the end of the current rate term approaches, in order to provide sufficient time to complete the carrier-selection process before the current contract expires, we are here requesting proposals from carriers interested in providing service at Elfin Cove and Pelican, Alaska, with or without subsidy support, for the two-year period beginning June 1, 2007. Carriers should tile their proposals within 30 days of the date of service of this order.

Proposals should provide sufficient capacity to accommodate historical levels of traffic over the critical outbound segment because of the directional imbalance of traffic. At Elfin Cove, the community generated the equivalent of 225 and 240 passengers in the second and third quarters of 2006. respectively. In order to accommodate these traffic levels, at least three round trips a week during the six-month peak season are required with six-seat aircraft. It appears that one round trip per week in the off-peak season is sufficient. For Pelican, the current level of service appears to he sufficient. We encourage proposals that meet those requirements in an efficient manner. Carriers are also welcome to propose more than one option, if they choose they need not limit themselves to those requirements if they envision other, potentially more attractive service possibilities - different hubs, for example with subsidy requirements that remain competitive.

By: Todd Homan

April 13, 2007

Proposal of Alaska Seaplane Service | Word

Alaska Seaplane Service, LLC respectfully requests the Department accept its bid of $185,772 per year, or $205.15 per subsidy eligible departure to provide Essential Air Service at Elfin Cove and Pelican, Alaska for a period of up to four years.

Counsel: Hank Myers

April 20, 2007

Request for Community Comments of:

• Director of Statewide Aviation, Alaska DOT

By: Dennis DeVany

Order 2007-6-2
OST-2002-11586

Issued June 6, 2007 | Served June 11, 2007

Order Selecting Carrier and Establishing Subsidy Rates

By this order, the Department is (a) selecting Alaska Seaplane Service, LLC, to continue providing essential air service at Elfin Cove and Pelican, Alaska, and (b) establishing an annual subsidy rate of $185,772, for a new two-year period, through May 31, 2009.

In response to our request, Alaska Seaplane (the only carrier to respond) submitted a proposal, offering to continue to provide the same level of service it currently operates, albeit, at a subsidy level of $31,000 less than its current subsidy requirement. Service would be operated to Juneau with 6-seat DHC-2 Beaver aircraft and would consist of six round trips per week at Pelican year-round, and at Elfin Cove, the carrier would provide one round trip per week during the six-month peak season and five flag stops per week during the six-month off-peak season.

By: Andrew Steinberg

June 22, 2007

Alaska Seaplane Service Petition for Reconsideration of Order 2007-6-2 | Word

Alaska Seaplane Service, LLC respectfully petitions the Department to reconsider Order 2007-6-2 to the limited extent to extend the term of the contract to May 31, 2011.

In addressing the desire of Alaska Seaplanes to have a four year term for the contract, the Department expressed concern about the unilateral ability of Seaplanes to reopen negotiations mid-term.  While it was not the intent to have the review process be unilateral, Seaplanes now understands that rate stability and reduction of administrative burden are the primary advantages of a longer term as far as the Department is concerned.

Seaplanes respectfully requests that the term of the new Essential Air Service contract be extended to a four year term, without any midterm rate review or the need for any interim administrative burden.  The benefits of the longer term outweigh the concerns about unanticipated increases in operating costs in the last two years of the four year term.  Seaplanes appreciates the explanation of concern raised in Order 2007-6-2, and no longer requests any mid-term review or adjustment during the four year term.

By: Alaska Seaplane Service, Hank Myers

August 8, 2007

Comments of City of Pelican

A private air carrier has just recently brought to the City of Pelican’s attention the Essential Air Service Order Requesting Proposals. Docket OST-2002-11586 states, “our staff will docket proposals, thereby making them public, and direct each carrier to serve a copy of its proposal on the civic parties and other applicants [. . .] provide a summary of the proposals to the communities and ask them to submit their final comments.”

The City of Pelican did not receive any proposals for essential air service to Pelican, Alaska. Docket OST-2002-11586 further states under Community Comments, “Civic officials [. . .] are welcome to submit comments on the proposals at any time. The City of Pelican did not provide any comments because the Department did not bring any proposals to the attention of the City for their comments.

Requests for proposals for essential air service to Pelican, Alaska needs to be publicly noticed locally and regionally, in an effort to foster public input during the comment period. Additionally, please add the City of Pelican, as a civic party, to the mailing list for distribution of information concerning essential air service to Pelican, Alaska.

By: Mayor, Patricia Phillips

August 17, 2007

Comments of City of Pelican

Thank you for your explanation outlining the procedures taken to inform the designated contacts of Essential Air Service to Pelican. When you and I spoke on August 16, I explained that I was not in opposition to the designation of the EAS to Alaska Seaplane Service. My single point, stated in the letter I wrote on August 8, was that the City of Pelican had not been notified of Docket 11586. now understand that DOT relies on the Alaska Department of Transportation and Public Facilities to represent local interests, and that the AK DOT & PF had no objection to the redesignation of Alaska Seaplane Service- My assumption is that the AK DOT & PF did not object because, historically, Alaska Seaplanes has been the primary air service provider to Pelican for 18 years.

Moreover, I support the redesignation of the EAS to Alaska Seaplane Service for a period of four years. Alaska Seaplanes provides reliable, year-round passenger, freight and mail service, with additional flights, beyond the EAS requirement, and with an excellent safety record. Pelican is also served by Ward Air and Tal Air from Juneau, and Air Sitka, Salmon Air and Harris Air from Sitka- Juneau is the designated hub for Pelican and I want to reiterate in the strongest terms that, in my opinion, Sitka is not an acceptable alternative hub for Essential Air Service,

By: Mayor, Patricia Phillips, 907-735-2202

Order 2007-9-7
OST-2002-11586

Issued September 7, 2007 | Served September 12, 2007

Order Granting Petition for Reconsideration

After careful review, we have decided to grant Alaska Seaplane’s Petition for Reconsideration and extend its EAS at Elfin Cove and Pelican, Alaska, to the four-year term, ending May 31, 2011, at the same annual subsidy rate of $185,772. Salmon Air’s objection was premised on a lack of civic involvement in this case. While that may have been true at the time of Salmon Air’s objection, it is now clear that Pelican officials fully support the selection of Alaska Seaplane for a four-year period. We would also note that historically there has been little or no competitive interest in this route.

As we stated in Order 2007-6-2, we do not object in any way to rate terms for longer than the traditional two-year period. Rather, we objected to what appeared to be Alaska Seaplane’s ability to unilaterally receive a higher subsidy rate during the four-year period. Now, without that provision, we have no objection, and fully support the longer rate term. Due to all of these factors, the Department grants Alaska Seaplane’s Petition for Reconsideration and expects the carrier to maintain service as described in Appendix C of Order 2007-6-2.

By: Michael Reynolds

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