Cape Air by keara

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									Proposal of Hyannis Air Service, Inc., dba Cape Air to provide subsidized Essential Air Service for:

                                                                                           Daily Non-Stop
                           City                                DOT Docket
                                                                                        Round-Trips to St. Louis

                    Decatur, IL                           DOT-OST-2006-23929
                                                          DOT- OST- 2006-                         6
               Marion/Herrin, IL                           DOT-OST-2000-7881
                                                           DOT- OST- 2000-                        6
                    Quincy, IL                            DOT-OST-2003-14492
                                                          DOT- OST- 2003-                         6
            Cape Girardeau, MO                             DOT-OST-1996-1559
                                                           DOT- OST- 1996-                        4


                   Note: Cape Air hereby proposes to serve all four communities, but is
                    willing and able to operate any combination of them as long as the
                 selection includes at least two cities, due to the need for critical mass.




                                              Hyannis Air Service, Inc., dba Cape Air
                                  Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601
                                                         (508) 862-9719                                            August 17, 2009
             Cape Air is a small but robust commuter airline,
                  operating and growing since 1989

Key facts                                     Cape Air: Leading the pack nine at a time
 First route was Boston – Provincetown,
 begun in October 1989, with three aircraft

 Presently flying 56 Cessna 402s in four
 regions, and two ATR-42s in Micronesia

 Operating up to 550 flights daily

 In 2008 flew more than 680,000
 passengers

 Grew capacity 20% from 2007 to 2009 and
 seeking additional sustainable routes


                                              Photo courtesy Mark Garfinkel (August 7, 2000, Boston)




                                                                                                       1
Today, Cape Air serves 17 communities in the northeast,
         including eight in the EAS program…
   Northeast route map
                  Massena
                               EAS
                                                       EAS
     Ogdensburg                        Plattsburgh

            EAS                 Saranac Lake
                                                                                                                 EAS
                                     EAS
     Watertown                                                                                                Rockland

    EAS
                                                                                EAS
                                                                      Lebanon
                                                       Rutland
                                                     EAS




                                           Albany

                                                                                   Boston

                                                                                                    Provincetown



                                                                      Providence      New Bedford
                                                                                                    Hyannis

                                                                            Martha’s Vineyard
                                      White Plains
                                                                                                      Nantucket




          July 2009 schedule

                                     EAS   = Subsidized EAS service                                                      2
      …And Cape Air has developed successful niches
in the Mid-Atlantic, Florida, in the Caribbean and Micronesia

Caribbean
                        San Juan                          Tortola       Micronesia
 EAS                                                                    Continental Connection

                                                      St. Thomas
   Mayaguez
                                         Vieques
        Ponce
                                                                                                 Florida Keys
                                                                                                 Continental Connection
               EAS
                                                                                                          Ft. Myers
                                                         St. Croix


                                                                                                                          Florida


        Mid-Atlantic
                                   EAS




                                                                                                          Key West
              EAS




         July 2009 schedules
         Maps not to scale



                                          EAS      = Subsidized EAS service                                                     3
          Cape Air is an excellent air service provider
           for smaller communities and niche routes

Cape Air highlights

  Low fares due to low absolute costs, as the aircraft and airline are relatively small and simple

  High-frequency, non-stop service—up to 6x daily round trips in this proposal

  Interline ticketing and baggage agreements with most major airlines enable same-ticket interline
  connections with the world

  Full GDS participation (Sabre, Travelocity, Expedia, etc.)

  Reservations available via capeair.com, in-house call center, or at the ticket counter

  MOCHA HAGoTDI culture (Make Our Customers Happy, And Have A Good Time Doing It) and
  an employee-owned company




                                                                                                     4
          The Cessna 402 is the workhorse of Cape Air’s fleet

                                             Cape Air’s Cessna 402

Cessna 402 highlights
  Cape Air operates 56 Cessna 402s in four
  regions:
    – Northeast
    – Florida
    – Caribbean
    – Mid-Atlantic

  The Cessna 402 seats nine passengers
                                             Cape Air’s ATR-42
    – Each seat is both aisle and window
    – Single-pilot operation

  Cape Air also operates in Micronesia on
  behalf of Continental Airlines, with two
  46-passenger ATR-42s




                                                                     5
Cape Air participates in the global distribution systems (GDS)


 Cape Air is sold through:




                                                            6
Tickets and commuter books are also available
           on Cape Air’s website…
 The Cape Air web booking engine: www.capeair.com




                                                    7
     …Or by phone from the Reservations Center,
     which handles up to 70,000 calls per month
Cape Air’s Telephone Reservations Center




                                                  8
       Commuter books are a great money-saving solution for
           companies, families and frequent travelers


Key features of ticket books:
  Several Cape Air routes have more than 66% of passengers using
  commuter books

  Each book contains 10 one-way tickets at a substantial discount per ticket

  Commuter book tickets are:
   • Transferable
   • Unrestricted
   • Valid on any departure on a specific city pair
   • Refundable

  Ticket book program already in place and ready to go!




                                                                               9
 Cape Air has been an interline carrier since 1993
   enabling connectivity with most major airlines,
not just codeshare partners Continental and JetBlue


Interline highlights
  Twenty-five interline agreements are in place, with almost all major airlines

  Cape Air has completed migration to interline eticketing, the updated industry norm

  Cape Air operates flights in Florida and Micronesia as

  Flights in the Caribbean have a                          code

  Five Boston routes have a                 code




                                                                                        10
    Cape Air has been successful in rebuilding commuter air
     service: since taking over Rutland, Vermont’s EAS in
      November 2007 Cape Air increased traffic by 146%
Rutland, Vermont passengers
1,000

 900

 800

 700

 600
                                                                                                 Predecessor
 500
                                                                                                 Cape Air
 400

 300

 200

 100

   0
        Nov        Dec          Jan        Feb   Mar   Apr   May   Jun   Jul   Aug   Sep   Oct
        Sources: Rutland Airport and Cape Air



                                                                                                      11
Although no longer a major international gateway, St. Louis
provides 1,885 weekly flights to 69 non-stop destinations…
St. Louis frequency
August 2009
Rank   Destination                  Dpts/Wk   Rank   Destination             Dpts/Wk   Rank   Destination            Dpts/Wk
  1    Chicago-O'Hare, IL             144      24    Salt Lake City, UT         27      47    Cape Girardeau, MO        13
  2    Atlanta, GA                    120      25    Tulsa, OK                  27      48    Wichita, KS               13
  3    Minneapolis/St. Paul, MN        76      26    Washington-National, DC    26      49    Jacksonville, FL          13
  4    Denver, CO                      75      27    Indianapolis, IN           26      50    New York-JFK, NY          13
  5    Chicago-Midway, IL              66      28    New York-La Guardia, NY    26      51    Little Rock, AR           13
  6    Dallas/Fort Worth, TX           61      29    Oklahoma City, OK          26      52    Louisville, KY            13
  7    Philadelphia, PA                59      30    Houston-Hobby, TX          25      53    Cedar Rapids, IA          12
  8    Newark, NJ                      57      31    Nashville, TN              21      54    Columbus, OH              12
  9    Detroit, MI                     56      32    Raleigh/Durham, NC         21      55    Toronto, ON, CA           12
 10    Charlotte-Douglas, NC           53      33    Boston, MA                 20      56    Fort Myers, FL            11
 11    Dallas-Love, TX                 46      34    Memphis, TN                20      57    Albuquerque, NM           7
 12    Orlando, FL                     41      35    Des Moines, IA             19      58    Austin, TX                7
 13    Houston-Intercontinental, TX    40      36    Marion, IL                 19      59    Birmingham, AL            7
 14    Phoenix, AZ                     40      37    Omaha, NE                  19      60    Fort Lauderdale, FL       7
 15    Washington-Dulles, VA           34      38    Quincy, IL                 19      61    Madison, WI               7
 16    Las Vegas, NV                   34      39    Decatur, IL                18      62    San Diego, CA             7
 17    Milwaukee, WI                   34      40    Pittsburgh, PA             18      63    San Antonio, TX           7
 18    Baltimore, MD                   32      41    Ft. Leonard Wood, MO       17      64    San Francisco, CA         7
 19    Cleveland, OH                   32      42    Miami, FL                  14      65    Springfield, MO           7
 20    Kansas City, MO                 32      43    Norfolk, VA                14      66    Northwest Arkansas, AR    7
 21    Los Angeles, CA                 28      44    Richmond, VA               14      67    Cancun, MX                6
 22    New Orleans, LA                 28      45    Seattle/Tacoma, WA         14      68    St. Petersburg, FL        3
 23    Cincinnati, OH/Covington, KY    27      46    Tampa, FL                  14      69    Punta Cana, DO            2
                                                                                              Total                   1,885

    Source: OAG



                                                                                                                           12
                …With reach across the country
St. Louis route map
August 2009




                                                 13
                               Cape Air would offer high frequency,
                              maximizing convenience for passengers

Nominal 6x daily schedule
Draft only, pending community input and connectivity analysis


 To St. Louis                                                               From St. Louis
 Departure                                    Arrival                       Departure          Arrival
 0605                                         0700                          0800               0855
 0915                                         1010                          1055               1150
 1210                                         1305                          1310               1405
 1435                                         1530                          1505               1600
 1620                                         1715                          1800               1855
 1915                                         2010                          2035               2130



                                                          Actual schedule would be developed
                                                           in partnership with the community
                                                                                                         14
    Cape Air proposes service at per-departure subsidy rates of:
         UIN: $571; DEC: $621; CGI: $648; MWA: $601

                                                                                 Expenses
                                                                                    Expenses                      Quincy        Decatur      Cape Girardeau      Marion
Drivers                                                                               Fuel                      $868,839       $996,297        $675,527        $919,822
                                                                                      Maintenance               $585,839       $673,228        $456,586        $620,795
                                                                                      Pilots                    $254,040       $286,890        $194,180        $267,180
                        Quincy     Decatur   Cape Girardeau Marion                    Ow nership                $166,875       $192,949        $130,951        $177,305
                          UIN        DEC          CGI        MWA                      Rents & Landing Fees      $393,975       $420,148        $282,564        $442,559
 Daily RTs                 6           6            4           6                     Staff                     $210,103       $210,103        $175,200        $210,103
 Stage (naut. miles)       81         96           98          87                     Marketing                  $65,700        $65,700         $43,800        $65,700
 Seats/Dpt                  9          9            9           9                     General & Admin./Other    $159,613       $163,742        $112,028        $161,265
 Annual Sched. Dpts      4,380      4,380        2,920       4,380                  Operating Expense          $2,704,985     $3,009,057      $2,070,836      $2,864,728
 Completion Rate         97%        97%           97%        97%
 Annual Actual Dpts      4,249      4,249        2,832       4,249                  Return of 5%                $142,368       $158,371         $108,991       $150,775
 PDEW                     19.9       19.9         13.3        19.9
                                                                                    Economic Expense           $2,847,352     $3,167,429      $2,179,828      $3,015,503
 Pax/Dpt                  3.4         3.4          3.4         3.4
                                                                                    Passenger Revenue           $576,704       $683,501         $465,161       $619,423
 Load Factor             38%        38%           38%        38%
                                                                                    Profit                     ($2,270,648)   ($2,483,928)    ($1,714,667)    ($2,396,080)
 Annual Passengers      14,980     14,980        9,986      14,980
 Avg. Net Fare          $39.69     $47.04       $48.02      $42.63
                                                                                    Annual Subsidy             $2,270,648     $2,483,928      $1,714,667      $2,396,080
 Passenger Rev         $576,704   $683,501     $465,161    $619,423
                                                                                    Per Departure                 $534           $585            $605            $564
                                                                                    Amort./Dpt                     $37            $37            $43             $37
                                                                                    Total Subsidy/Dpt             $571           $621            $648            $601
                                                                                    Per Passenger                 $167           $182            $189            $176




                                        Aircraft availability note: Availability of the Cessna 402C is good. However, it takes several months for
                                        aircraft to go through conformity to reach Cape Air’s standards. Cape Air will make best efforts to fulfill all
                                        commitments, but asks that the communities understand that a selection of Cape Air to serve multiple cities
                                        would require a significant number of aircraft to go through conformity, which may take a few months.                  15
         Cape Air would be a great choice for
      Decatur, Marion, Quincy and Cape Girardeau

Cape Air offers the airline amenities small communities need:
  Established, reliable, commuter airline

  Full interline connectivity, allowing same-ticket connections with the world

  High frequency non-stop flights

  Low fares

  Global ticket distribution

  Track record of rebuilding enplanements for EAS communities



                           Cape Air: community wings


                                       Hyannis Air Service, Inc., dba Cape Air
                           Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601   16
                                                  (508) 862-9719

								
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