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OST-2007-28795 - Sky King and Polar Express - Emergency Exemption - Within-Alaska Charters
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Sky King, Inc. and Polar Express Group, LLC OST-2007-28795 - Emergency Exemption - Within-Alaska Charters July 19, 2007 Application for an Emergency Exemption Polar Express has entered into an agreement with Sky King whereby Sky King will operate Sky King's 737 aircraft, using Sky King's flight crews -in which it intends to employ Alaska residents -for Polar Express's intended public and private charter operations. Polar Express, through its agreement with Sky King, intends to operate non-stop flights between Anchorage and Deadhorse, a community of work camps and businesses supporting oil and gas exploration and development on the North Slope. Deadhorse is overwhelmingly a non-discretionary business market, but also includes residents of the surrounding North Slope villages and a small number of summer tourists. Current and projected oil prices have spurred new long-term activities on the North Slope near Deadhorse, generating a subsequent increase in the demand for passenger air travel. However, direct passenger service between Anchorage and Deadhorse is presently provided by only one commercial operator of large aircraft as well as Part 91 operations that are not available to the public. Moreover, there are currently no dedicated charter aircraft in the State of Alaska with a capacity of greater than thirty seats. Polar Express, through its agreement with Sky King, will be able to provide public and private charters for various customers using full-sized 737 aircraft configured with approximately one hundred seats. While supply is limited, the involvement of new oil field exploration and development by companies and persons new to the region is creating a demand for Polar Express's intended services. Indeed, energy companies currently operating Part 91 aircraft between Anchorage and the North Slope have expressed to Polar Express a desire to use the proposed new service due to the inadequate supply of their current services and to provide back-up lift for their flight operation. Counsel: The Wicks Group, Glenn Wicks, 202-457-7790, gpwicks@wicks-group.com
July 20, 2007 Re: Alaska Airlines Will File an Answer on July 31 I am writing on behalf of Alaska Airlines, Inc. concerning the application filed by Sky King, Inc. and Polar Express Group, LLC on July 19, 2007 seeking an "emergency" exemption to permit them to operate an unlimited number of passenger and cargo charter flights between points within the State of Alaska. Although the Department's Rules of Practice in Proceedings do not require Alaska to answer before August 3, Alaska wishes to notify the Department that it intends to respond and will do so on July 31. In filing this letter, Alaska wants to make clear that it is extremely sensitive and committed to fulfilling the special air transportation needs of the State's residents. That said, the sole justification for the "emergency" and thus the reason for reducing the normal answer period by half is the assertion that one operator of air services in Alaska has advised one of its customers that one of its aircraft will be removed from service for several weeks for scheduled maintenance. And that one customer states that it would like to know that, during the maintenance check, the Applicants' aircraft would be available for "supplemental and back up service" because that customer's "schedule reliability will be exposed to major disruptions resulting from a number of unforeseen consequences." As described, these circumstances hardly appear to constitute an emergency in any objective sense. A decision about overturning years of precedent, an express statutory provision, a long-standing regulatory provision and allowing unlimited charter operations within the State of Alaska for the indefinite future should not be made on the basis of a short-term desire by one customer to have "supplemental and back up service" during one brief scheduled maintenance check. Alaska will file an answer to the application on July 31. Counsel: Squire Sanders, Marshall Sinick, 202-626-6651, msinick@ssd.com
July 24, 2007 Motion for Expedited Treatment and Shortened Answer Period By this motion, Sky King and Polar Express respectfully request that the Department confirm that any person who wishes to support or oppose the Application must file an answer by July 26, 2007 and serve that answer on Sky King and Polar Express as well as on all persons served on this docket. This motion is in response to a letter from Alaska Airlines, Inc. to the Department, dated July 20, 2007, providing notice of Alaska Airlines’ intention to respond to the Application on July 31, 2007. Sky King and Polar Express have sought in good faith to adhere to the Department’s Rules of Practice in Proceedings concerning emergency exemptions by detailing in writing the facts and evidence supporting the application, the grounds for the exemption, the public interest basis for the authority sought and the specific reasons that justify departure from the normal exemption application process. This includes numerous letters of interest and support from potential customers and key members of the Alaska Congressional delegation. For example, ConocoPhillips has specifically requested that Polar Express provide private charter services starting August 1, 2007 while its aircraft are removed from service for heavy inspections and to act as a support lift provider for long-term contingency planning. In addition, Congressman Don Young and Senator Lisa Murkowski jointly requested that the Department “expedite” its decision on the Application and give it “fair treatment.” Counsel: The Wicks Group, Glenn Wicks, 202-457-7790, gpwicks@wicks-group.com
July 24, 2007 Peninsula Airways Opposition to Motion for Expedited Treatment and Shortened Answer Period Although the Joint Applicants have attempted to contrive an "emergency", no "emergency" exists here. The emergency is based on a claim that a single customer has learned that one aircraft used by one of its operators of air service in Alaska will not be operational for several weeks so that scheduled maintenance can be completed. That is all. That is not adequate justification for shortening the answer period on an application that raises substantial and controversial legal, policy and factual issues. One would have thought that an applicant seeking expedited, emergency action on a request for unprecedented relief expressly barred by the statute would have discussed such a precedent in its application to facilitate consideration of the issues by other interested parties and the Department, particularly when the applicant allegedly "took the precedent into consideration when filing the Application." Instead, the Joint Applicants were silent on these important legal and policy issues. Indeed, it is clear that the Joint Applicants have long been evaluating the intra-Alaska services it is now proposing to allegedly fill an "emergency." Some of the letters of interest from "potential customers" attached to the Joint Application are dated from May 2, 2007, including one from the same customer seeking "prearranged supplemental service" upon which the contrived "emergency" is based. Yet, it waited over two months, until mid-July, to file its application, claiming an "emergency". Moreover, the Joint Applicants have been seeking crew members and received resumes "in anticipation of the proposed service.'' Clearly, the service at issue has been in the works for some time. Given these circumstances and the legal and policy issues at stake, the Motion should be denied. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com
July 24, 2007 Answer in Opposition to PenAir Sky King and Polar Express commend PenAir for its timely five-page response to the motion of expedited treatment and a shortened period. Over the course of five-pages, PenAir attempts to establish that the emergency exemption application lacks a “real” emergency and therefore makes it inappropriate for the Department to expedite the application. This determination by PenAir appears to contravene the explicit request by Congressman Don Young and Senator Lisa Murkowski for the Department to “expedite” its decision on the application and give it “fair treatment.” Moreover, PenAir questions neither the existence of immediate commercial demand for the proposed services nor whether there is an urgent request for charter services using 737 aircraft. Alaska Airlines, Inc. in its letter of July 20, 2007, also does not question whether these circumstances do exist. That is because these facts are undisputed and supported by specific and documented evidence as provide for in the emergency exemption application and in adherence with 14 C.F.R § 302.311. Moreover, neither PenAir nor Alaska Airlines provides the services proposed by the applicants in this case. Therefore, while Penair and Alaska Airlines have found adequate time to oppose the expedited treatment of the emergency exemption, they have not found adequate reasons to oppose the substantive basis of the proposed services. Sky King and Polar Express encourage PenAir to review the emergency exemption application. Hopefully after this belated assessment, PenAir will be able to comment on the substantive need and immediate nature of the application. Counsel: The Wicks Group, Glenn Wicks, 202-457-7790, gpwicks@wicks-group.com
July 25, 2007 While the Applicants now set forth their arguments in a more formal pleading, they have notably failed to offer a single additional fact to support their assertion that the Department should grant their application on an expedited basis because of an alleged "emergency" - a circumstance which Alaska explicitly questioned in Alaska's letter of July 20. The further fact that the expedited relief sought by the Applicants would require the Department to overturn both a long-standing statutory provision as well as a provision in the Department's omnibus charter regulation is yet another important reason why the Applicant's request needs to be considered in a timely rather than extraordinarily hurried fashion. Alaska would also point out that the exhibits to the Exemption Application show that the Applicants began soliciting support for their venture in November 2006. Most of their supporting letters were dated May 1 or 2, 2007 including the initial letter from ConocoPhillips - the source of the purported emergency. Nonetheless, the Applicants appear to have bided their time for a number of months until they could obtain a further letter from ConocoPhillips, indicating that it would like to have the use of the Applicants' aircraft for overflow purposes in order to avoid having their "schedule reliability . . . exposed to major disruptions resulting from unforeseen circumstances." As Alaska said on July 20, this assertion of compounded contingencies falls far short of objectively demonstrating that a true emergency exists today. It also offers no explanation why the Exemption Application could not have been submitted months ago. The Applicants' latest Motion adds no additional facts to the record on these points. Although the Department's Rules of Practice in Proceedings do not require Alaska to answer before August 3, Alaska again states for the record that it intends to respond early, i.e. on July 31, to both the Exemption Application and the Motion. Counsel: Squire Sanders, Marshall Sinick, 202-626-6651, msinick@ssd.com
July 26, 2007 Sky King, Inc. and Polar Express Group, LCC have filed a joint application for an exemption authorizing their performance of charter air transportation of persons and property within the State of Alaska. While taking no issue with the need for the service, Polar Air Cargo Worldwide, Inc. d/b/a Polar Air Cargo must object to the extent that the applicants would hold out air transportation as "Polar Express" or "Polar" because of the public confusion that would ensue. Counsel: Polar, Kevin Montgomery, 202-828-1002, kevin.montgomery@polaraircargo.com
Served July 27, 2007 On July 19, 2007, Sky King, Inc. and Polar Express Group, LLC filed an application requesting that the Department grant Sky King an emergency exemption from 49 U.S.C. 41104(c) and 14 CFR 212.3(1) to enable the air carrier to engage in charter air transportation within the State of Alaska. In its application, the Applicants also requested that the Department shorten the answer period in this case from August 3 to July 26. On July 20, 2007, Alaska Airlines, Inc. filed a letter in the public docket stating its intention to file an answer to the Applicant’s exemption application by July 31. On July 24, 2007, the Applicants filed a Motion formally requesting the Department to expedite treatment and shorten the answer period regarding its application for an emergency exemption. On that same date, Peninsula Airways, Inc. filed in opposition to the Applicant’s Motion and the Applicants filed an answer in response. On July 25, 2007, Alaska filed another letter stating its plans to file a response to the Applicant’s Motion and application on July 31. Based on the submissions of the interested parties, we have determined it appropriate to allow interested parties to file answers to Sky King’s application no later than August 3, 2007. By: Todd Homan
Letters in Support for Polar Express I support the goals of Polar Express to offer the public another choice for air travel in the State of Alaska. I have two sons who work at Prudhoe Bay and surrounding oil activities. They have been flying back and forth for more than 20 years. Yesterday, my oldest son was on a flight which lost an engine on take off, and almost ended in disaster. They are now down to one aircraft since another just went in for C check. It will be almost impossible for the existing carriers to provide enough seats to meet the increased demand for travel to and from the North Slope. Therefore, another small carrier will be an asset to the travel needs of workers to travel to the North Slope, and with little or no impact to existing carriers, since the demand is so great. Rapid approval of the right for Polar Express to operate is essential, so some of the excess demand is met.
August 1, 2007 Motion for Expedited Treatment and Immediate Action Through the Application, Sky King and Polar Express respectfully are requesting an emergency exemption from 49 U.S.C. § 41104(c), as well as 14 C.F.R. § 212.3(I), in order to provide intra-Alaska charter air transportation, specifically between Anchorage and points in the North Slope region. Based on submissions of the interested parties, on July 27, 2007, the Department determined it appropriate to allow interested parties to file answers to the Application no later than August 3, 2007. However, pressing facts and emergency circumstances have recently arisen resulting in the severe disruption of ConocoPhillips operations and the urgent need for the proposed services of Sky King and Polar Express. By this motion, Sky King and Polar Express respectfully request expedited treatment and immediate action on its Application on an emergency basis. On August 1, 2007, Polar Express and Sky King were informed that a Boeing 737-200 of Shared Services, ConocoPhillip’s Part 91 operator, suffered catastrophic engine failure immediately following departure from Prudhoe Bay-Deadhorse While the facts of the exact cause remain unclear, what is clear is that the Shared Services aircraft requires an engine replacement and that this maintenance will occur on location at SCC. Industry experience would place a timeline of seventy-two hours for a field engine change, but due to the remoteness, lack of hangar accommodations and climatic conditions of the locale, this restoration process could take as long as five days. Therefore, at a minimum, ConocoPhillips and Shared Services have an immediate need for the proposed services of Sky King and Polar Express while its 737 aircraft is being serviced. Counsel: The Wicks Group, Glenn Wicks, 202-457-7790, gpwick@wicks-group.com
August 2, 2007 Answer of Alaska Airlines to Motion for Expedited Treatment and Immediate Action Whatever “emergency” may have existed on July 31, Alaska can unequivocally state that through its efforts—consisting of “upgauged” aircraft and extra sections—there never was, nor is there now, an “emergency”. In fact, Shared Services, with which Alaska communicated no fewer than 15 times today, specifically advised Alaska that it had no need for some of the additional “upgauged” and extra section capacity that Alaska was offering on Thursday, (August 2) and Friday (August 3). Shared Services advised Alaska that it only desired Alaska’s offer of extra sections for Thursday and Friday. Shared Services further informed Alaska that it anticipated no further difficulties getting through this weekend by which time the damaged engine should be replaced. Shared Services also expressed appreciation to Alaska for all of the extra efforts that it has made, and plans to continue to make, on Shared Services’ behalf. Alaska is also constrained to note that the Motion nowhere recites that the Applicants have been asked for assistance by Shared Services, or that they reached an agreement to provide emergency lift to that company. Instead the Applicants rely on a recitation of past events and on the incredible suggestion that, if any further problem develops with Shared Services’ fleet, the world could be without as much as 17% of ConocoPhillips’ oil production. The Department should not countenance this continued misuse of its resources. Alaska also wishes to advise the Department that it plans to fully respond tomorrow to the Applicants’ initial application and, in that response, will also explain that Alaska is finalizing its proposal to address any additional needs Shared Services may have starting on Monday, August 6. Counsel: Squire Sanders, Marshall Sinick, 202-626-6651, msinick@ssd.com
August 2, 2007 ConocoPhillips in Support of Polar Express We have urgently requested the services of Polar Express and Sky King due to immediate commercial need for private charter operations to support our private flight schedule between Anchorage and the North Slope region. Currently, we are unable to provide these flights because two of our aircraft are not available and supply is very limited. On July 31,2007, one of our 737 aircraft incurred catastrophic engine failure immediately following departure from Prudhoe Bay-Deadhorse. At this time, this aircraft is expected to be out of service for an undetermined, but extended period of time. In addition, as of August 1, 2007, another of our 737 aircraft was removed from service for heavy inspections for approximately six weeks. We are unable with are remaining 737 aircraft to meet the demands of our operations in the North Slope. Capacity for the proposed services is also inadequate. We have contacted seventeen air carriers in Alaska and the lower forty-eight states to supply the flights between Anchorage and Deadhorse. None of the contacted air carriers would agree to fulfill this request. As a result, we are facing delays and disruption in our operations, which could interfere with our overall gas and oil production in the North Slope Region. Moreover, a longer term need exists to meet future unforeseen circumstances. Undoubtedly if our remaining aircraft were to be removed from service, for whatever reason, we could face even greater challenges to our oil and natural gas production in Alaska. In order to resolve this urgent problem, and to address longer term contingencies, we are hoping to work with Polar Express and Sky King to meet our transportation needs. By: Aviation Manager, Dave Smith, 907-263-3556, dave.smith@conocophillips.com
August 3, 2007 Answer in Opposition of Peninsula Airways The Joint Applicants are not seeking a narrowly-tailored exemption from the well-established statutory and regulatory bars. Although the evidentiary support for the Joint Application is focused solely on the Anchorage- Deadhorse market, the request is far more sweeping.. The Joint Applicants emphasize that the "aircraft would be available for other charter work around the state of Alaska, too." In effect, the Joint Applicants seek carte blanche authority to operate charters using large aircraft between any two points in Alaska. Such a request for unfettered charter authority is clearly at odds with the statutory framework Congress established. Other than the erroneous claim that Anchorage ‑Deadhorse has an urgent need for service‑‑a claim totally at odds with the facts‑‑the Joint Applicants have not submitted a scintilla of evidence to support a finding that blanket charter service by Sky King is "required". Nor have the Joint Applicants submitted any evidence with respect to the impacts that broad grant of intra‑Alaska charter authority would have on other Alaska airlines. Despite their attempt to paint themselves as an Alaskan business with intentions to employ Alaska residents, the operating carrier - Sky King - is a California company with its headquarters, personnel and operations based in Sacramento, California. The certificated carrier here underlying this proposed charter operation is not Alaskan. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com
August 3, 2007 Answer of Alaska Airlines - Bookmarked The Application is based upon erroneous assertions by the Applicants that (i) there is an emergency requiring the immediate reversal of long-standing aviation policies concerning the State of Alaska, (ii) there is also a need for the service that the Applicants propose and (3) the Applicants' proposed operations will not impact other services critical to the State of Alaska. To support their claim of an "emergency," the Applicants go to considerable lengths to exaggerate previous expressions of interest from Shared Services Aviation, a transportation provider for several North Slope oil companies. They also ignore Alaska's successful efforts to meet Shared Services' needs resulting from a later unexpected engine outage. The simple truth, however, as Alaska painstakingly explains in the attached affidavit, is that there is a wide gulf between the Applicants' assertions of an "emergency" and the understandable desire of every business to have more, rather than fewer, travel options. The extraordinary legal relief the Applicants are seeking is governed by a section of the Transportation Code that requires that the Department find an affirmative need for the Applicants' proposed charter service. It is clear, however, that the Applicants are in no position to credibly establish that required factual predicate. The additional fact that this specific statutory provision has been judicially reaffirmed after the Department's predecessor, the Civil Aeronautics Board, sought to ignore it only confirms the vitality of that provision and, in particular, its requirement that new charter carriers may be authorized only after an affirmative finding that there is an unmet need for their services. If the Department nonetheless believes that the time has come to reconsider its policy concerning interstate charter flights between points within the State of Alaska, it should do so by means of a notice of proposed rulemaking which examines all of the available options in light of the terms of the provisions of the Transportation Code concerning charter transportation between points in Alaska. It is only through such a rulemaking process - which Alaska would not oppose - that the Department can fully solicit and consider comments from all affected persons to evaluate fully the needs of the intra-Alaska market. Thereafter, the Department would be well-positioned to make an informed decision on an issue that is of such importance to the State of Alaska. Counsel: Squire Sanders, Marshall Sinick, 202-626-6600, msinick@ssd.com
August 3, 2007 Lynden Air Cargo, LLC, one of the leading providers of cargo transportation within the State of Alaska, Sky King/Polar have attempted to create an emergency situation requiring immediate action on their application, when in fact no emergency exists. Although Sky King/Polar have requested cargo charter authority, they have offered absolutely no information that would allow the Department to determine whether their proposed operations are "required by the public convenience and necessity" as mandated by provisions of the Transportation Code. Similarly, Sky King/Polar have left the Department with no means to evaluate the impact of their proposal on essential cargo services within the State of Alaska operated by Lynden and others. In fact, although Sky King/Polar have requested statewide authority for both cargo and passenger transportation, they only address the circumstances of one market. In that case, the information provided appears to be both inaccurate and incomplete. In light of all of the foregoing factors, Lynden requests that the Sky King/Polar application be denied. By: Lynden, Michael Hart
August 3, 2007 Answer of Sky King and Polar Express to Answer of Alaska Airlines The Applicants are both encouraged and flattered that Alaska Airlines has responded to their Motion and willfully acknowledged the pressing nature of the circumstances presented therein by contacting Shared Services, the Part 91 operator of ConocoPhillips, “no fewer than fifteen times,” in order to offer increased capacity on Alaska Airlines’ scheduled operations. The fact that Alaska Airlines reacted to these new and demanding circumstances by contacting ConocoPhillips numerous times (an average contact rate of at least once every 1.6 hours within a 24 hour cycle) suggests the sense of urgency it apportioned to attempting to meet ConocoPhillips immediate commercial needs. Unfortunately, Alaska Airlines, while submitting the Answer, did not feel constrained in overlooking an explicit written request from ConocoPhillips, submitted to the Docket of the Department of Transportation on August 2, 2007, for the proposed services of Sky King and Polar Express. As a result, the latest effort of Alaska Airlines to prevent new intra-Alaska charter transportation seriously questions the air carrier’s credibility. Unbelievably, Alaska Airlines, through the Answer, suggests that it directs ConocoPhillips commercial operations, has intimate knowledge of the totality of communications between ConocoPhillips and various service providers and robustly comprehends the air transportation needs of the oil and gas company. The Applicants are left to wonder whether Alaska Airlines provides commercial air transportation or whether it speaks for ConocoPhillips. Alaska Airlines unequivocally states that there “never was, nor is there now, an ‘emergency’” experienced by ConocoPhillips. Despite this arrogant assertion made on behalf of it by Alaska Airlines, ConocoPhillips clearly expresses the risk and stress presented by removal of its 737 aircraft from service. Certainly the Applicants hope that Alaska Airlines is able to countenance the ability of ConocoPhillips to evaluate risks posed towards its commercial operations and request services from the Applicants, or perhaps Alaska Airlines has deemed itself Alaska-omnipotent and that allowing competition is a misuse of the Department’s resources. Counsel: The Wicks Group, Glenn Wicks, 202-457-7790, gpwicks@wicks-group.com
August 7, 2007 Tatonduk has reviewd the Joint Application, all supporting documentation and each of the Answers. Based upon this review, in conjunction with its experience in the Alaskan transportation market, Tatonduk submits no emergency currently exists which would require the Department to award intra-Alaska charter authority to the Joint Applicants. Counsel: Garofalo Goerlich, Gary Garofalo, 202-776-3970, ggarofalo@ggh-airlaw.com
August 7, 2007 Consolidated Reply of Sky King and Polar Express - Bookmarked As a preliminary matter, the Applicants have communicated with Polar Air. The Applicants are willing to fully resolve the concern of the cargo carrier. Polar Express Group, LLC will be renamed “Kuukpik Express, LLC” and will hold out services as such. The Applicants will not hold out air transportation as “Polar Express” or “Polar.” Unfortunately, the answers in opposition of Alaska Airlines, PenAir and Lynden serve to confuse rather than clarify the considerations the Department faces when reviewing the Application. This opposition obscures both the scope and purpose of 41104(c) and the intra-Alaska charter restriction. Moreover, Alaska Airlines, PenAir and Lynden ignore the broad discretion of the Department of Transportation and exaggerate the proposed authorization requested in the Application. The Department need only make a modest determination in this case, which is markedly different from the MarkAir scenario. The Applications is different from these later circumstances for several reasons: (1) The Application does not involve multiple entries of non-Alaska carriers, but instead involves a single entry for intra-Alaska charter services necessarily involving a public charter owned and controlled by Alaska natives; (2) the Applicants are asking the Department to apply the statutory standard set forth in the legislative history, not to challenge the legislative intent by concluding that a policy of multiple permissive entry in the Alaska charter market is mandated by deregulation; and (3) the Applicants are not requesting that the Department determine that the protectionist exception for Alaskan charter air transportation is no longer needed. In short, the Applicants are asking the Department to apply the “required by” test, to respect the legislative intent supporting 41104(c), and to allow a unique opportunity for intra-Alaska charter transportation, which meets an immediate commercial need and supports the further progress and development of Alaska. Counsel: The Wicks Group, Glenn Wicks, 202-457-7790, gpwicks@wicks-group.com
August 9, 2007 Reply of Sky King and Polar Express Group The untimely character of the objection by Tatonduk not only undermines the validity of this opposition, but also calls into question the motivation of this answer. As noted, Tatonduk perceptibly, and strangely, does not suggest that the proposed services have any consequences whatsoever upon its services. Tatonduk merely tows the line for Alaska Airlines. Indeed, it appears that this late-filed objection does not evidence selfinterest but rather is intended to remedy an obvious and critical deficiency submitted by the opposition to date, namely an objection from an actual Alaska charter air carrier. Regardless of the motivation of Tatonduk, its answer patently fails to raise any substantive objection as contemplated by the specific scope and purpose of 41104(c). Moreover, Tatonduk's objection in no way undermines the explicit urgent request by ConocoPhillips for the proposed services of the Applicants nor addresses the immediate commercial need for such charter services between Anchorage and the North Slope Region using large aircraft. By virtue of the objection's tardiness and its failure to note any harmful impact, or any consequence whatsoever, the Department should duly disregard the answer of Tatonduk. Counsel: The Wicks Group, Glenn Wicks, 202-457-7790, gpwicks@wicks-group.com
August 10, 2007 Surreply of Alaska Airlines and Motion for Leave to File an Unauthorized Document The Applicants have offered no new facts in support of their Application for Emergency Exemption and the legal arguments they advance are either based on citations taken out of context or otherwise seriously flawed. The facts are that §41104(c) of the Transportation Code mandates an affirmative finding that additional charter services between points in Alaska are required by the public convenience and necessity before the Applicants’ proposed service may be authorized. Alaska, however, each and every day -- both before as well as after the July 31 engine outage -- continues to meet the needs of the only customer that the Applicants specifically claim is in need of service. To state it bluntly, that means the Applicants have utterly failed to satisfy their burden of proof to demonstrate that the daily services of Alaska as well as the supplemental backup services offered by Alaska and the other carriers in the State are deficient. Nor would the grant of the Applicants’ request be a “modest determination” as the Applicants argue. Instead it would be nothing short of a reversal of nearly 30 years of aviation policy and the contravention of explicit statutory and regulatory provisions. Moreover, in determining what is required by the public convenience and necessity, the applicable legislative history calls on the Department to consider the impact of the proposed services on scheduled and charter passenger and cargo services operated in the State of Alaska, including those offered by Alaska and the other Alaskan carriers that have submitted answers to the Application. The current record offers no reason why the Application should not be denied. At most, as Alaska has already said it would not oppose, the Department may wish to consider initiating a rulemaking proceeding to decide whether and to what extent additional interstate charter service between points in Alaska is warranted, consistent with the terms of the Transportation Code. Counsel: Squire Sanders, Marshall Sinick, 202-626-6000, msinick@ssd.com
August 13, 2007 Motion of Sky King and Polar Express Group for Immediate Consideration The Applicants do not seek unlimited authority. The modesty of this request for authority is evidenced in the unique factual circumstances of the proposed operations which necessarily involve a public charter operator owned and controlled by Alaska natives. In fact, the Applicants expressly request that any granted authority be contingent upon the continued involvement of Kuukpik Express, LLC. The Applicants are certainly not requesting that the Department of Transportation determine that the intra-Alaska charter restriction is no longer necessary. In addition, the Applicants recognize the paramount importance of considering the interests of the State of Alaska. In furtherance of this consideration, the Applicants hereby submit a letter from Alaska Governor Sarah Palin offering her support for the Application on behalf of the State of Alaska. In light of this strong endorsement and the need for finality, the Applicants do not intend on submitting any further answers to the Department in support of the Application. Counsel: The Wicks Group, Glenn Wicks, 202-457-7790, gpwicks@wicks-group.com
August 13, 2007 Answer of Peninsula Airways to Third Motion for Immediate Action Peninsula Airways, Inc. hereby continues to oppose the Joint Application. An immediate denial of the Joint Application is now warranted to finally put to rest the Joint Applicants' unprecedented and unsupported request for blanket intra-Alaska charter authority. The Joint Applicants have completely failed to meet the statutory standard that the public convenience and necessity requires for a grant of such authority. The Joint Applicants' Reply continues to distort the legal standard and policy underlying the statutory and regulatory provisions at issue here, in an effort to buttress its failure to meet the statutory standard for the unprecedented and unfettered intra-Alaska charter exemption it seeks. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com
August 14, 2007 Surreply of Tatonduk Outfitters and Motion for Leave to File an Unauthorized Document In its earlier Reply, which was indeed filed in a timely manner consistent with Section 302.308 of the Department's Procedural Regulations, Tatonduk argued that, (i) the Joint Applicants failed to demonstrate that the service they were offering was "required by public convenience and necessity" as mandated by Congress under 49 U.S.C. 41104(c), and (ii) no emergency currently exists since adequate airlift is being offered by existing Alaskan carriers to support the operations of ConocoPhillips. Nothing has been filed by the Joint Applicants that would refute either of these claims. Unfortunately, in a rush to "shoot the messenger", the Joint Applicants issued an impassioned, yet ultimately unpersuasive, retort to Tatonduk's Reply arguing, in essence, that, as Tatonduk does not currently operate service thai would directly compete with the charter requirements of ConocoPhillips, it has no business speaking to the merits of this case. As with so many other arguments made by the Joint Applicants, this argument fails on its face. The fact that Tatonduk does not currently offer the service being discussed in no way detracts from Tataonduk's experience in the Alaskan market and the value of its incite in this proceeding. Further, what the Joint Applicants fail to acknowledge is that this proceeding goes to the fundamental question of whether the Department is willing to deviate from its long-standing policy of preserving the Congressional mandate concerning intra-Alaska charter operations. Clearly, Tatonduk, as an "Alaskan" carrier, has a very significant interest in the outcome of this proceeding and in ensuring that the Department has all available information at its disposal. Under such circumstances, to argue that the service proposed by the Joint Applicants have no "consequences whatsoever upon [Tatonduk's] services" and that "Tatonduk merely tows [sic] the line for Alaskan Airlines" is not only patently false, but also mischaracterizes the impact of this proceeding on the entire Alaskan air carrier community. Sadly, the Joint Applicants, having failed to meet the factual requirements for the requested exemption from Section 41104(c), must now resort to ancillary and misguided attacks on fellow carriers. We would ask that the Department consider such actions in its review of this matter Counsel: Garofalo Goerlich, Gary Garofalo, 202-776-3970, ggarofalo@ggh-airlaw.com
August 15, 2007 Answer of Alaska Airlines to Motion for Immediate Consideration Despite filing an Application for Emergency Exemption, three motions seeking immediate consideration, two answers, and two replies in this proceeding, the Applicants have failed to come to grips with the fundamental issue that makes it impossible for the Department to grant the authority they request. The law requires that, in order to authorize interstate charter service (whether by exemption or by certificate amendment) between points in Alaska, the Department must find that the service in question is required by the public convenience and necessity. This statutory mandate has not been repealed or narrowed. There is no exception that applies to the Applicants. There is no rule that precludes Alaska or any of the other parties filing in opposition to the Application for Emergency Exemption from raising the issue of compliance with this statutory provision. Lamentably, none of the multitude of pleadings submitted by the Applicants in this case offers any evidence on which the Department can rely to conclude that the public convenience and necessity requirement has been satisfied. That fact without more requires the Department to deny the Application for Emergency Exemption. If the Department grants an exemption to the Applicants without specific findings that their proposed service is required by public convenience and necessity, or without a factual record to support such findings, the Department’s decision would be vulnerable to a legal challenge. Counsel: Squire Sanders, Marshall Sinick, 202-626-6600, msinick@ssd.com
August 16, 2007 Former Alaska State Senator in Support of Alaska Airlines I want to go on record to advise DOT that Alaska Airlines has provided an excellent reliable service to the North Slope communities as well as the Kotzebue area. On any number of occasions, Alaska Airlines has demonstrated a willingness to go “above and beyond” in providing emergency services and in fact routinely offers the same discount fares to the rural isolated Alaskan communities as Alaska does in its competitive markets within the State. I have flown on any number of other “lower 48” airlines and I can assure you that none offer the levels of service that Alaska routinely provides. I understand that a California charter operator aligned with a small group of Alaskans are conducting a letter-writing campaign seeking to criticize Alaska Airlines’ services within the State and between Anchorage and the North Slope in particular. I also understand that that group is claiming that there are significant deficiencies in Alaska’s service in that effort to obtain approval to start a charter service between Anchorage and Deadhorse. Insofar as the current North Slope situation is concerned, I have heard by word of mouth that Alaska continues to offer the North Slope corporations every bit of extra lift that they need-and then some. This track record is exactly what I would expect from Alaska Airlines which has long recognized that it has a special obligation to take care of the needs of the isolated Alaskan communities. By: Al Adams, 907-522-9313
August 17, 2007 Supplement to Answer of Alaska Airlines to Motion for Immediate Consideration Alaska has agreed to operate two daily extra section round-trip flights between Anchorage and Deadhorse for Shared Services on weekdays from August 20 and through September 7, 2007. These flights are a continuation of Alaska's ongoing efforts to meet Shared Alaska hereby requests leave to submit this Supplement as an unauthorized document. Consideration of this Supplement will enable the Department to make a more thoroughly informed decision on the merits in this proceeding, and will not unduly burden the record in any respect. Alaska understands that the Shared Services aircraft that had previously been removed from service for heavy maintenance is scheduled to be back in operation by August 26. As such, with this latest commitment, Alaska will have provided coverage to Shared Services for the entire period of the aircraft outage and beyond. Alaska is also pleased that former State Senator Al Adams has written to Secretary Peters concerning Alaska's services in general, and its operations to the North Slope in particular Senator Adams represented the North Slope Borough until 2000 and thus has substantial knowledge of that area's needs, Senator Adams notes that Alaska consistently goes "above and beyond" to meet the needs of Alaska's remote communities and to provide emergency services. He also points out his understanding that Alaska has provided "every bit of extra lift" that the North Slope corporations require. Alaska is gratified by Senator Adams letter which further confirms Alaska's position in this proceeding. Counsel: Squire Sanders, Marshall Sinick, 202-626-6651, msinick@ssd.com
August 21, 2007 Support of Senator Murkowski and Congressman Don Young We wrote to you on July 18, 2007 in regards to the application for exemption to engage in charter air transportation between points within the State of Alaska filed by Sky King. It has been brought to our attention that the review process seemingly has stalled with no definite timeline in place for a decision. We would appreciate it if the process could be restarted and a decision be rendered in the very near future. By: Lisa Murkowski and Don Young
August 22, 2007 Alaska State Senator in Support of Polar Express Group These are not interests from outside our State seeking to upset the apple cart. This is an Alaska native owned organization attempting to serve the business needs of our State. It is shameful that Alaska Airlines seeks to crush competition from the same group whose personna it carries a likeness of on the tail of their aircraft. By: Donald Olson, 907-455-3707
September 10, 2007 Disclaimer of Polar Express Airways | Word Polar Express is protected by Alaska law and federal regulation from unfair and deceptive business practices from organizations operating under similar or confusing business names. As has been noted in previous C.A.B. and D.O.T. decisions concerning business names, the public generally shortens or abbreviates the full legal name of the business, and similar shortened names can be confusing. The public is unlikely to distinguish between Polar Express Airways, Inc. and Polar Express Group, LLC when arranging for commercial air transportation. Increasing the possibility of confusion from name similarity is that Polar Express Airways, Inc. is owned and operated by Donald Olson. Mr. Olson is the Alaska State Senator representing the entire North Slope including all of the destinations proposed for service by the group requesting exemption from the Department’s regulations. Senator Olson has long been associated with commercial aviation in northern Alaska. His father, Martin Olson formed Olson Air Service with bases in Golovin and Nome, and Senator Olson took over operation of the carrier after the death of his younger brother, David Olson. Senator Olson spends his summers between legislative sessions flying helicopters to herd reindeer, and pursues his other commercial aviation interests. While Senator Olson is familiar with some of the principals of Polar Express Group, LLC, and has tried to support the Polar Express Group, LLC in achieving the desired additional service, Senator Olson is not associated with the group in any way and the issue of their unauthorized use of the business name “Polar Express” has not been resolved. This Disclaimer and clarification of the role of Senator Olson is further necessitated by the fact that Senator Olson believes that there is a need for competitive passenger and freight service in Boeing 737 sized aircraft, and has gone on record in support of the request for exemption in this docket. The district that Senator Olson represents includes the entire north slope and northwestern Alaska, an area about the size of Montana. On behalf of his constituents, Senator Olson supports additional jet aircraft service of the type proposed in this docket. Senator Olson is concerned about potential misunderstanding of his role with Polar Express Group, LLC, and his dual role as both State Senator for the involved points, and as the legal owner of the business name under which the enterprise proposes to operate. Polar Express objects to the use of any business name used in commercial aviation in Alaska which includes the phrase “Polar Express”, and gives formal notice that it intends to vigorously protect its business name. Counsel: Jones & Colver, John Colver, 907-272-6511, jcolver@jonescolver.com
September 11, 2007
By: Thomas Barrett
October 22, 2007 By this submission, Sky King, Inc. and Polar Express Group, LLC, d/b/a Kuukpik Express, LLC hereby motion for immediate action of the application for an emergency exemption from 49 U.S.C. 41104(c), as well as 14 C.F.R. 212.3(1), to engage in charter air transportation between points within the State of Alaska. The Application is unarguably ripe for a decision. The Applicants submitted the Application on July 19, 2007. Exactly ninety-five days have passed since its filing. In addition, more than eleven calendar weeks -eighty days to be exact - have passed since August 3, 2007, the deadline for filing answers to the Application, as set by the Department's notice of answer period on July 27, 2007. It has been seventy days since the Applicants' Motion for Immediate Consideration was filed with the Department. Moreover, more than two months have passed since U.S. Senator Lisa A. Murkowski and US. Congressman Don Young urgently reiterated there request for expedited decision-making. By any calculation, the Department's silence over this period adds up to inexplicable inaction and unreasonable delay. Counsel: The Wicks Group, Glenn Wicks, 202-457-7790, gpwicks@wicks-group.com
October 25, 2007 PenAir and the Joint Movants apparently agree on one point: that the record is sufficient for the Department to act on the pending Joint Application for an extraordinary exemption. However, as explained in PenAir's prior submissions in this Docket, the Joint Applicants must surmount a very high statutory bar to obtain the open-ended exemption from the long-standing statutory and regulatory prohibition on the services they seek to commence, and this they have failed to do. Simply put, the Joint Application should be promptly denied because it falls woefully short of demonstrating that the services proposed are "required by public convenience and necessity." The Joint Movants' latest filing represents their fourth motion for immediate consideration, and yet there has also still been no showing that an emergency exists. As each day has passed the so-called "emergency" vanishes into oblivion, and the temporal gap between the latest motion and the now stale "evidence" about any alleged emergency submitted back in July and August 2007 is demonstrable proof that no such emergency exists. Counsel: Hogan & Hartson, Robert Coh, 202-637-4999, recohn@hhlaw.com
October 31, 2007 Answer of Alaska Airlines in Opposition to Motion for Immediate Action Despite filing an Application for Emergency Exemption, four motions seeking immediate consideration, two answers, and two replies in this proceeding, the Applicants continue to disregard the fundamental dispositive issue affecting their application. Section 41104(c) of the Transportation Code requires flat, in order to authorize interstate charter service (whether by exemption or by certificate amendment) between points in Alaska, the Department must find that the service in question is required by the public convenience and necessity. While the Applicants have had ample opportunity to create the factual record for such a determination (if the supporting facts existed - which they clearly do not), they have filed to do so. None of the multitude of pleadings submitted by the Applicants in this proceeding provides a basis for a finding by the Department that the public interest requirement of Section 41104(c) has been satisfied. Without that factual record, the Application is incomplete and not ready for decision on the merits by the Department whether on an expedited basis or otherwise, Moreover there are clear indications that the Applicants are not vigorously pursuing their request for charter authority and that at least one of them is planning to offer scheduled service. These developments appear to make the application for charter authority moot or, at the very least, eliminate any legitimate basis for the expedited action the Applicants desire notwithstanding the absence of the requisite factual underpinning. Counsel: Squire Sanders, Marshall Sinick, 202-626-6600, msinick@ssd.com |
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