**BEFORE THE**

**DEPARTMENT OF TRANSPORTATION**

**WASHINGTON, D.C.**

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

> )

Essential Air Service at )

)

**ALTOONA, PENNSYLVANIA** ) **OST-2002-11446**

**JOHNSTOWN, PENNSYLVANIA ) OST-2002-11451**

> )

Under 49 U.S.C. §41731 *et seq.* )

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

##### GULFSTREAM INTERNATIONAL AIRLINES PROPOSAL 

##### TO PROVIDE SUBSIDIZED AIR SERICE AT 

##### ALTOONA AND JOHNSTOWN, PENNSYLVANIA

Correspondence with regard to this document should be addressed to:

Mickey Bowman

Vice President of Corporate Development

Gulfstream International Airlines

3201 Griffin Road, 4^th^ Floor

Ft. Lauderdale, FL 33312

Telephone: 270-689-2180

Fax: 270-689-2180

E-Mail: mbowman@gulfstreamair.com

Gulfstream International Airlines ("Gulfstream") cordially submits its
proposal to provide subsidized air service to Altoona and Johnstown,
Pennsylvania.

Gulfstream intends to operate these flights under its existing codeshare
agreement with Continental Airlines to its hub in Cleveland, Ohio.
Gulfstream believes that the strength of the Continental hub at
Cleveland Hopkins International Airport will have a positive effect on
ridership. In compliance with Public Law 100-223, Gulfstream proposes to
operate these flights using Beech 1900D turboprops that are pressurized
and accommodate 19 passengers to the, FAA defined, medium-sized hub at
Cleveland, OH. Two service patterns are offered.

The proposed service pattern (**Option 1**) features 48 weekly
frequencies between Altoona, Johnstown and Cleveland, Ohio. This service
constitutes four weekday roundtrips operating on a CLE-AOO-JST-CLE or
CLE-JST-AOO-CLE routing. The schedule, as we currently envision it,
would provide Altoona with one outbound non-stop flight along with three
one-stop outbound departures each weekday. Weekday inbound service would
consist of two non-stop and two one-stop flights. Johnstown would
receive three non-stop outbound departures along with a single one-stop
departure. Weekday inbound service would consist of two non-stop and two
one-stop flights. Weekend service for each community would consist of
one non-stop and one one-stop flight in each direction on both Saturday
and Sunday.

The second service pattern (**Option 2**) features 36 weekly frequencies
between Altoona, Johnstown and Cleveland, Ohio. This service is made up
of three weekday roundtrips operating on a CLE-AOO-JST-CLE or
CLE-JST-AOO-CLE routing. The schedule, as we currently envision it,
would provide Altoona with one outbound non-stop flight along with two
one-stop outbound departures each weekday. Inbound service would consist
of one non-stop and two one-stop flights. Johnstown would receive two
non-stop outbound departures along with a single one-stop departure.
Weekday inbound service would consist of two non-stop and one one-stop
flights. Weekend service for Altoona would feature a single one-stop
roundtrip on Saturday and two one-stop outbound trips with one non-stop
and one one-stop inbound trip on Sunday. Weekend service for Johnstown
would feature a single non-stop roundtrip on Saturday with two non-stop
outbound trips and one non-stop and one one-stop inbound trip on Sunday.

The establishment of this operation in the northeast is outside of
Gulfstream's historic service area. In order to offer the quality of
service that these communities deserve, it will be necessary for
Gulfstream to establish sufficient operating mass as to make this
service practical. [Given this fact, please consider these two Options
wholly contingent upon Gulfstream being awarded the Essential Air
Service contracts previously solicited for the communities of DuBois,
PA; Franklin/Oil City, PA and Greenbrier/White Sulphur
Springs/Lewisburg, WV.]{.underline} The detail of our bid is summarized
below.

**Option 1**

  ----------------- -------------------- -------------- -----------------
  **Altoona, PA**   **-- Cleveland OH,   **19 Legs**    **per Week**
                    Non-Stop**                          

                    **-- Cleveland OH,   **29 Legs**    **per Week**
                    One-Stop**                          

  **Johnstown, PA** **-- Cleveland OH,   **29 Legs**    **per Week**
                    Non-Stop**                          

                    **-- Cleveland OH,   **19 Legs**    **per Week**
                    One-Stop**                          

                    **Total Subsidy      **4 RTs each   **\$3,172,860**
                    Required**           Svc Day**      
  ----------------- -------------------- -------------- -----------------

Option 2

  ----------------- -------------------- -------------- -----------------
  **Altoona, PA**   **-- Cleveland OH,   **11 Legs**    **per Week**
                    Non-Stop**                          

                    **-- Cleveland OH,   **25 Legs**    **per Week**
                    One-Stop**                          

  **Johnstown, PA** **-- Cleveland OH,   **25 Legs**    **per Week**
                    Non-Stop**                          

                    **-- Cleveland OH,   **11 Legs**    **per Week**
                    One-Stop**                          

                    **Total Subsidy      **3 RTs each   **\$2,636,707**
                    Required**           Svc Day**      
  ----------------- -------------------- -------------- -----------------

In conclusion, Gulfstream believes that these proposals will provide the
communities of Altoona and Johnstown, Pennsylvania with superior air
service. We feel the communities will benefit from the strength of the
Continental codeshare as well as the integrity of service that has been
a hallmark of the Gulfstream operation.

Respectfully Submitted: May 2, 2008

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Mickey Bowman

Vice President of Corporate Development

Gulfstream International Airlines

**Gulfstream Airlines**

**Sample Flight Schedule**

**Option 1**

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  AOO      CLE      0625     0800     7500     BE1      X7       1

  AOO      CLE      1010     1145     7501     BE1      X67      1

  AOO      CLE      1040     1145     7501     BE1      6 ONLY   0

  AOO      CLE      1430     1535     7502     BE1      X6       0

  AOO      CLE      1810     1945     7503     BE1      X6       1
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  CLE      AOO      0850     0955     7501     BE1      X67      0

  CLE      AOO      0850     1025     7501     BE1      6 ONLY   1

  CLE      AOO      1240     1415     7502     BE1      X67      1

  CLE      AOO      1240     1345     7502     BE1      6 ONLY   0

  CLE      AOO      1645     1750     7503     BE1      X6       0

  CLE      AOO      2045     2220     7504     BE1      X6       1
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  JST      CLE      0700     0800     7500     BE1      X7       0

  JST      CLE      1005     1145     7501     BE1      6 ONLY   1

  JST      CLE      1045     1145     7501     BE1      X67      0

  JST      CLE      1355     1535     7502     BE1      X6       1

  JST      CLE      1845     1945     7503     BE1      X6       0
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  CLE      JST      0850     0950     7501     BE1      6 ONLY   0

  CLE      JST      0850     1030     7501     BE1      X67      1

  CLE      JST      1240     1340     7502     BE1      X67      0

  CLE      JST      1240     1420     7502     BE1      6 ONLY   1

  CLE      JST      1645     1825     7503     BE1      X6       1

  CLE      JST      2045     2145     7504     BE1      X6       0
  -------- -------- -------- -------- -------- -------- -------- --------

(Note: This Schedule is for illustrative purposes and may not reflect
the final published product)

  ---------------------------- ----------- -------- --- -------------------------
  **GULFSTREAM INTERNATIONAL                            
  AIRLINES**                                            

  **Essential Air Service                               
  Proposal**                                            

  **Option 1**                                          

  **Altoona and Johnstown,                              
  PA**                                                  

                                                        [Altoona and
                                                        Johnstown]{.underline}

  Hub Served                                            Cleveland

  Number of Roundtrips per                              4
  Service Day                                           

                                                        

  **[Operating                                          
  Statistics]{.underline}**                             

  Completion %                                          97%

  Annual Adjusted Block Hours                           3,022.14

  Annual Adjusted Departures                            3,984.76

  Annual Adjusted ASMs                                  9,307,592

  Annual RPMs                                           5,060,094

  Projected Load Factor                                 54.4%

                                                        

  **[Revenue                                            
  Projections]{.underline}**                            

  Enplaned Passengers                      AOO          8,389

  Enplaned Passengers                      JST          16,620

  Enplaned Passengers                      Total        25,009

  Mileage                      (Average as              123
                               Operated)                

  Average Fare                                          \$71.00

  **Passenger Revenue**                                 \$ 1,775,618

                                                        

  **[Expense                                            
  Projections]{.underline}**                            

  Flight Operations                                     \$443,793

  Ownership                                             \$306,360

  Maintenance                                           \$1,027,918

  Reservations, Stations &                              \$1,570,143
  Administration                                        

  Fuel                                                  \$1,354,622

  Marketing                                             \$10,000

  **Total Annual Expenses**                             \$4,712,836

                                                        

  Projected Profit / (Loss)                             (\$2,937,218)

                                                        

  Profit Element                                        \$235,642

                                                        

  **Annual Subsidy Required**                           \$3,172,860

                                                        

  Subsidy per Departure                                 \$796.25

  Subsidy per Passenger                                 \$126.87
  ---------------------------- ----------- -------- --- -------------------------

**Gulfstream Airlines**

**Sample Flight Schedule**

**Option 2**

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  AOO      CLE      0630     0800     7500     BE1      X7       1

  AOO      CLE      1040     1145     7501     BE1      X67      0

  AOO      CLE      1300     1430     7502     BE1      7 ONLY   1

  AOO      CLE      1645     1820     7503     BE1      X6       1
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  CLE      AOO      0850     1025     7501     BE1      X67      1

  CLE      AOO      1240     1415     7502     BE1      6 ONLY   1

  CLE      AOO      1525     1630     7503     BE1      X6       0

  CLE      AOO      1900     2030     7504     BE1      X6       1
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  JST      CLE      0700     0800     7500     BE1      X7       0

  JST      CLE      1005     1145     7501     BE1      X67      1

  JST      CLE      1330     1430     7502     BE1      7 ONLY   0

  JST      CLE      1720     1820     7503     BE1      X6       0
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  CLE      JST      0850     0950     7501     BE1      X67      0

  CLE      JST      1240     1340     7502     BE1      6 ONLY   0

  CLE      JST      1525     1705     7503     BE1      X6       1

  CLE      JST      1900     2000     7504     BE1      X6       0
  -------- -------- -------- -------- -------- -------- -------- --------

(Note: This Schedule is for illustrative purposes and may not reflect
the final published product)

  ---------------------------- ----------- -------- --- -------------------------
  **GULFSTREAM INTERNATIONAL                            
  AIRLINES**                                            

  **Essential Air Service                               
  Proposal**                                            

  **Option 2**                                          

  **Altoona and Johnstown,                              
  PA**                                                  

                                                        [Altoona and
                                                        Johnstown]{.underline}

  Hub Served                                            Cleveland

  Number of Roundtrips per                              3
  Service Day                                           

                                                        

  **[Operating                                          
  Statistics]{.underline}**                             

  Completion %                                          97%

  Annual Adjusted Block Hours                           2,282.37

  Annual Adjusted Departures                            3,076.84

  Annual Adjusted ASMs                                  6,948,110

  Annual RPMs                                           3,844,929

  Projected Load Factor                                 55.3%

                                                        

  **[Revenue                                            
  Projections]{.underline}**                            

  Enplaned Passengers                      AOO          6,627

  Enplaned Passengers                      JST          12,465

  Enplaned Passengers                      Total        19,092

  Mileage                      (Average as              119
                               Operated)                

  Average Fare                                          \$71.00

  **Passenger Revenue**                                 \$ 1,355,536

                                                        

  **[Expense                                            
  Projections]{.underline}**                            

  Flight Operations                                     \$328,250

  Ownership                                             \$306,360

  Maintenance                                           \$811,108

  Reservations, Stations &                              \$1,328,517
  Administration                                        

  Fuel                                                  \$1,017,902

  Marketing                                             \$10,000

  **Total Annual Expenses**                             \$3,802,136

                                                        

  Projected Profit / (Loss)                             (\$2,446,600)

                                                        

  Profit Element                                        \$190,107

                                                        

  **Annual Subsidy Required**                           \$2,636,707

                                                        

  Subsidy per Departure                                 \$856.95

  Subsidy per Passenger                                 \$138.10
  ---------------------------- ----------- -------- --- -------------------------