Order 03-04-1

Order 03-04-1-

Essential Air Service at Akutan, Alaksa

Order 03-04-1 OST-00-7068	Issued April 1, 2003 Served April 4, 2003	Order Tentatively Selecting Carrier and Setting Subsidy Rate	Essential Air Service at Akutan, Alaska
		Appendix A - Map of Alaska
		Appendix B - Annual Subsidy Need
		Appendix C - Annual Subsidy Rate
		Appendix D - Historical Traffic at Akutan
		Service List

Appendix C shows traffic levels at Akutan for the past three years. Given the declines in passenger and freight traffic -- mail has remained constant -- Peninsula's 10-round-trip-aweek option will fully accommodate all of the recent traffic levels, even taking into account seasonality and the severe directional imbalance of mail and freight. Peninsula continues to provide Akutan with reliable essential air service and we find that both the service and subsidy levels are reasonable. In view of the above, we will tentatively reselect Peninsula to provide EAS at Akutan with 10 nonstop round trips a week to Dutch Harbor at the agreed-to annual subsidy of $361,200 for an additional two-year period beginning May 1, 2003, and ending April 30, 2005. For the period from when the last contract expired, September 1, 2002, through April 30, 2003, we will compensate Peninsula at the agreed-to rate of $524,765 for 13 round trips a week.

Competing proposals for Akutan should contemplate service to Dutch Harbor, or any other appropriate hub city, at levels commensurate with those tentatively selected here. In order to help carriers in their passenger and revenue forecasts, we have included historical traffic data in Appendix C.

By: Read C. Van de Water