NMAC BTWN AN ATX DEHAVILLAND TWIN OTTER; DHC-6; IN LEVEL FLT AND TRANSITIONING FROM THE SPECIAL GCN AIRSPACE INTO THE GCN CLASS D AIRSPACE; AND AN ATX GCN PIPER NAVAJO FLT WHICH WAS PASSING THE OTTER ON THE L SIDE AND TURNING IN FRONT OF THEM. THE OTTER FLC WERE STARTLED; AND THOUGHT THAT THIS INCIDENT WAS CONTRARY TO LCL PROCS.

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WE WERE APCHING THE GRAND CANYON ARPT FROM THE BLUE 1 IN A DHC-6. THE CAPT WAS PF. WE MADE OUR INITIAL CALL TO GCN TWR AT 20 MI OUT. WE WERE INSTRUCTED TO RPT THE 'KEY.' WE COMPLETED THE DSCNT CHKLIST AND PROCEEDED TO THE KEY. ABOUT 3 MI FROM THE KEY; ATX Y (PIPER NAVAJO) RPTED TO THE TWR THAT IT WOULD BE PASSING US. OUR TCASII SHOWED THE ACFT TO BE APPROX 1/2 - 1 MI BEHIND US. WE CONTINUED TOWARDS THE KEY ON THE SAME COURSE AT THE SAME PWR SETTING AND AIRSPD. WE EACH TOOK TURNS LOOKING OUT OUR SIDE WINDOWS FOR THE TFC. UPON REACHING THE KEY; THE NAVAJO WAS NOT IN SIGHT ON EITHER SIDE. I RPTED THE KEY TO TWR AND WAS INSTRUCTED TO 'RPT THE TRACKS; L BASE RWY 3.' I ACKNOWLEDGED. ATX Y THEN RPTED THE KEY. THE TWR CTLR ASKED IF THEY WERE ABEAM OUR ACFT. THE ATX Y PLT RESPONDED AFFIRMATIVE. THE TWR THEN ASKED US IF WE HAD THE NAVAJO IN SIGHT. BY NOW WE WERE 1/2 - 1 MI INSIDE THE KEY. SUDDENLY ABOUT 200-300 FT OFF OUR L WING; AT OUR ALT; AN ATX Y NAVAJO PASSED US WITH QUITE A BIT OF SPD. THE CAPT MADE A SMALL R TURN TO PROVIDE ADDITIONAL CLRNC BUT THE NAVAJO WAS ALREADY PAST. I ADVISED TWR THAT WE DID HAVE THE NAVAJO AND THAT WE HAD BEEN PASSED AT A DANGEROUS DISTANCE. ATX Y THEN TURNED TO THE R AND PULLED RIGHT IN FRONT OF US. SINCE THE PASSING OF ACFT CAN TAKE PLACE BTWN 20 MI OUT AND THE KEY WITH ONLY AN ADVISORY CALL TO TWR; A LOT OF JOSTLING FOR POS TAKES PLACE. PASSING INSIDE THE KEY REQUIRES TWR PERMISSION ACCORDING TO OUR LOA. THIS LEADS TO CONGESTION AND SOMETIMES UNSAFE SITS RIGHT AT THE KEY. I FELT THAT PASSING ON THE L AT VERY CLOSE PROX IN AIRSPACE WHERE PERMISSION WAS TO BE OBTAINED BY ATX X MADE AN UNSAFE SIT FOR US AND OUR 16 PAX.