**BEFORE THE**

**DEPARTMENT OF TRANSPORTATION**

**WASHINGTON, D.C.**

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

> )

Essential Air Service at )

)

**DUBOIS, PENNSYLVANIA** ) **Docket OST-2004-17617**

**FRANKLIN/OIL CITY, PENNSYLVANIA** ) **Docket OST-1997-2523**

**GREENBRIER/WHITE SULPHUR SPRINGS/** ) **Docket OST-2003-15553**

**LEWISBURG, WEST VIRGINIA** )

> )

Under 49 U.S.C. §41731 *et seq.* )

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

##### GULFSTREAM INTERNATIONAL AIRLINES PROPOSAL TO PROVIDE

**[SUBSIDIZED AIR SERICE AT DUBOIS, PENNSYLVANIA;]{.underline}**

**[FRANKLIN/OIL CITY, PENNSYLVANIA; AND]{.underline}**

**[GREENBRIER/WHITE SULPHUR SPRINGS/LEWISBURG, WEST
VIRGINIA]{.underline}**

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
proposals to provide subsidized air service to DuBois, Pennsylvania;
Franklin/Oil City, Pennsylvania; and Greenbrier/White Sulphur
Springs/Lewisburg, West Virginia.

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 at all three cities, reversing the decreasing traffic trends
of the past several years. 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 first proposed service pattern (**Option 1**) features 19 weekly
non-stop roundtrips between Dubois and Cleveland, Ohio paired with 12
weekly non-stop roundtrips between Franklin/Oil City and Cleveland,
Ohio. Additionally, 13 weekly non-stop roundtrips would be operated
between Greenbrier/White Sulphur Springs/Lewisburg and Cleveland, Ohio.

The second proposed service pattern (**Option 2**) features 12 weekly
non-stop roundtrips between Dubois and Cleveland, Ohio along with 12
weekly one-stop roundtrips between Dubois and Cleveland operating via
Franklin/Oil City. These flights would be paired with 12 weekly non-stop
roundtrips between Franklin/Oil City and Cleveland, Ohio. In this
scenario Gulfstream intends to operate several of these flights in a
"round robin" manner. In this fashion DuBois will receive four weekday
turns and Franklin/Oil City will benefit from a third weekday turn on a
one-stop routing via DuBois. Given the proximity of DuBois and Franklin
we find that we can actually operate this Option with less required
subsidy as we feel the additional frequency will generate increased
ridership. Additionally, 13 weekly non-stop roundtrips would be operated
between Greenbrier/White Sulphur Springs/Lewisburg and Cleveland, Ohio.

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. Integral in these proposals will be the establishment
of a new Maintenance Base to support this endeavor. [Given this fact,
please consider these two Options as "all or nothing" offerings,
requiring Gulfstream's selection in all three communities in either
scenario.]{.underline} The details of our two bids are summarized below.

**Option 1**

  -------------------- -------------------- -------------- -----------------
  **DuBois, PA**       **-- Cleveland OH,   **Three        **Five Days per
                       Non-Stop**           Roundtrips**   Week**

                       **-- Cleveland OH,   **Two          **Two Days per
                       Non-Stop**           Roundtrips**   Week**

  **Franklin/Oil City, **-- Cleveland OH,   **Two          **Six Days per
  PA**                 Non-Stop**           Roundtrips**   Week**

  **Greenbrier/White   **-- Cleveland OH,   **Two          **Six Days per
  Sulphur Springs/     Non-Stop**           Roundtrips**   Week**
  Lewisburg, WV**                                          

  **Greenbrier/White   **-- Cleveland OH,   **One          **One Day per
  Sulphur Springs/     Non-Stop**           Roundtrip**    Week**
  Lewisburg, WV**                                          

                       **Total Subsidy                     **\$5,695,910**
                       Required**                          
  -------------------- -------------------- -------------- -----------------

Option 2

  -------------------- -------------------- -------------- -----------------
  **DuBois, PA**       **-- Cleveland OH,   **Two          **Six Days per
                       Non-Stop**           Roundtrips**   Week**

                       **-- Cleveland OH,   **Two          **Six Days per
                       One-Stop**           Roundtrips**   Week**

  **Franklin/Oil City, **-- Cleveland OH,   **Two          **Six Days per
  PA**                 Non-Stop**           Roundtrips**   Week**

                       **-- Cleveland OH,   **One          **Six Days per
                       One-Stop**           Roundtrip**    Week**

  **Greenbrier/White   **-- Cleveland OH,   **Two          **Six Days per
  Sulphur Springs/     Non-Stop**           Roundtrips**   Week**
  Lewisburg, WV**                                          

  **Greenbrier/White   **-- Cleveland OH,   **One          **One Day per
  Sulphur Springs/     Non-Stop**           Roundtrip**    Week**
  Lewisburg, WV**                                          

                       **Total Subsidy                     **\$5,577,594**
                       Required**                          
  -------------------- -------------------- -------------- -----------------

In conclusion, Gulfstream believes that these proposals will provide the
communities of DuBois and Franklin/Oil City, Pennsylvania as well as
Greenbrier/White Sulphur Springs/Lewisburg, West Virginia 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: April 18, 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

  -------- -------- -------- -------- -------- -------- -------- --------
  CLE      DUJ      845      940      7602     BE1      X67      0

  CLE      DUJ      1225     1320     8642     BE1      67 ONLY  0

  CLE      DUJ      1545     1640     7608     BE1      X6       0

  CLE      DUJ      1900     1955     7610     BE1      X6       0
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  DUJ      CLE      700      755      7600     BE1      X6       0

  DUJ      CLE      955      1050     7602     BE1      X67      0

  DUJ      CLE      1335     1430     8642     BE1      7 ONLY   0

  DUJ      CLE      1545     1640     7605     BE1      6 ONLY   0

  DUJ      CLE      1700     1755     7608     BE1      X6       0
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  CLE      FKL      1230     1315     7604     BE1      X67      0

  CLE      FKL      1730     1815     7606     BE1      6 ONLY   0

  CLE      FKL      1905     1950     7603     BE1      X6       0
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  FKL      CLE      700      745      7601     BE1      X7       0

  FKL      CLE      1340     1425     7604     BE1      X6       0
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  CLE      LWB      850      1010     8600     BE1      DAILY    0

  CLE      LWB      1525     1645     8641     BE1      X6       0
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  LWB      CLE      1030     1150     8601     BE1      DAILY    0

  LWB      CLE      1700     1820     8641     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**                                                                                                                 

  **DuBois and Franklin/Oil                                                                                                  
  City, Pennsylvania;                                                                                                        
  Greenbrier/White Sulphur                                                                                                   
  Springs/Lewisburg, West                                                                                                    
  Virginia**                                                                                                                 

  **Option 1**                                                                                                               

                                                                                                                             

                                                    [DuBois]{.underline}   [Franklin/Oil       [Greenbrier/Lewisburg/White   **Combined
                                                                           City]{.underline}   Sulphur Springs]{.underline}  Totals**

  Hub Served                                        Cleveland              Cleveland           Cleveland                     

  Number of Roundtrips per                          3                      2                   2                             
  Service Day                                                                                                                

                                                    (1 add. Wkend Freq)                        (1 add. Wkend Freq)           

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

  Completion %                                      97%                    97%                 97%                           97%

  Annual Adjusted Block Hours                       1756.99                907.92              1748.586667                   4413.50

  Annual Adjusted Departures                        1916.72                1210.56             1311.44                       4438.72

  Annual Adjusted ASMs                              5,604,561              2,370,953           6,578,183                     14,553,697

  Annual RPMs                                       2,398,850              627,225             2,478,960                     5,505,035

  Projected Load Factor                             42.8%                  26.5%               37.7%                         37.8%

                                                                                                                             

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

  Enplaned Passengers                               15,587                 6,085               9,390                         31,062

  Mileage                      (Average as          154                    103                 264                           173
                               Operated)                                                                                     

  Average Fare                                      \$70.38                \$74.44             \$77.97                       \$73.47

  **Passenger Revenue**                             \$ 1,097,041           \$452,947           \$732,138                     \$2,282,126

                                                                                                                             

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

  Flight Operations                                 \$280,247              \$144,816           \$278,906                     \$703,969

  Ownership                                         \$243,921              \$126,045           \$242,754                     \$612,720

  Maintenance                                       \$782,858              \$404,539           \$833,510                     \$2,020,907

  Reservations, Stations &                          \$988,099              \$563,944           \$731,838                     \$2,283,880
  Administration                                                                                                             

  Fuel                                              \$764,815              \$344,665           \$852,174                     \$1,961,653

  Marketing                                         \$5,000                \$5,000             \$5,000                       \$15,000

  **Total Annual Expenses**                         \$3,064,939            \$1,589,010         \$2,944,181                   \$7,598,130

                                                                                                                             

  Projected Profit / (Loss)                         (\$1,967,898)          (\$1,136,063)       (\$2,212,043)                 (\$5,316,004)

                                                                                                                             

  Profit Element                                    \$153,247              \$79,450            \$147,209                     \$379,907

                                                                                                                             

  **Annual Subsidy Required**                       \$2,121,145            \$1,215,514         \$2,359,252                   \$5,695,910

                                                                                                                             

  Subsidy per Departure                             \$1,106.65             \$1,004.09          \$1,798.98                    \$1,283.23

  Subsidy per Passenger                             \$136.08               \$199.76            \$251.25                      \$183.37
  ---------------------------- ----------- ---- --- ---------------------- ------------------- ----------------------------- ---------------

**Gulfstream Airlines**

**Sample Flight Schedule**

**Option 2**

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  CLE      DUJ      845      1010     7602     BE1      X7       1

  CLE      DUJ      1225     1320     8642     BE1      X7       0

  CLE      DUJ      1530     1625     7608     BE1      X6       0

  CLE      DUJ      1905     2030     7603     BE1      X6       1
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  DUJ      CLE      630      755      7600     BE1      X67      1

  DUJ      CLE      1025     1120     7602     BE1      X7       0

  DUJ      CLE      1335     1430     8642     BE1      X6       0

  DUJ      CLE      1520     1645     8642     BE1      6 ONLY   1

  DUJ      CLE      1640     1805     7608     BE1      X6       1
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  CLE      FKL      845      930      7602     BE1      X7       0

  CLE      FKL      1530     1705     7608     BE1      X6       1

  CLE      FKL      1905     1950     7603     BE1      X6       0
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  FKL      CLE      710      755      7600     BE1      X67      0

  FKL      CLE      945      1120     7602     BE1      X7       1

  FKL      CLE      1600     1645     7607     BE1      6 ONLY   0

  FKL      CLE      1720     1805     7608     BE1      X6       0
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  CLE      LWB      900      1020     8600     BE1      X6       0

  CLE      LWB      1730     1850     8645     BE1      6 ONLY   0

  CLE      LWB      1900     2020     8641     BE1      X6       0
  -------- -------- -------- -------- -------- -------- -------- --------

FROM TO DEP ARR FLT EQP FREQ STP

STA STA TIME TIME NUM

  -------- -------- -------- -------- -------- -------- -------- --------
  LWB      CLE      640      0800     8601     BE1      DAILY    0

  LWB      CLE      1305     1425     8641     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**                                                                                                                    

  **DuBois and Franklin/Oil                                                                                                     
  City, Pennsylvania;                                                                                                           
  Greenbrier/White Sulphur                                                                                                      
  Springs/Lewisburg, West                                                                                                       
  Virginia**                                                                                                                    

  **Option 2**                                                                                                                  

                                                                                                                                

                                                    [DuBois]{.underline}   [Franklin/Oil          [Greenbrier/Lewisburg/White   **Combined
                                                                           City]{.underline}      Sulphur Springs]{.underline}  Totals**

  Hub Served                                        Cleveland              Cleveland              Cleveland                     

  Number of Roundtrips per                          4                      2                      2                             
  Service Day                                                                                                                   

                                                    (2 nonstop, 2 onestop)                                                      

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

  Completion %                                      97%                    97%                    97%                           97%

  Annual Adjusted Block Hours                       1714.96                907.92                 1748.586667                   4371.47

  Annual Adjusted Departures                        2421.12                1210.56                1311.44                       4,943

  Annual Adjusted ASMs                              4,735,756              2,370,953              6,578,183                     13,684,892

  Annual RPMs                                       2,031,098              1,209,184              2,478,960                     5,719,242

  Projected Load Factor                             42.9%                  51.0%                  37.7%                         41.8%

                                                                                                                                

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

  Enplaned Passengers                               16,276                 6,141                  9,390                         31,807

  Mileage                      (Average as          103                    103                    264                           146
                               Operated)                                                                                        

  Average Fare                                      \$70.38                \$74.44                \$77.97                       \$73.40

  **Passenger Revenue**                             \$ 1,145,505           \$457,141              \$732,138                     \$2,334,784

                                                                                                                                

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

  Flight Operations                                 \$261,357              \$138,365              \$266,482                     \$666,204

  Ownership                                         \$240,375              \$127,257              \$245,088                     \$612,720

  Maintenance                                       \$824,051              \$398,336              \$820,728                     \$2,043,115

  Reservations, Stations &                          \$866,478              \$590,105              \$727,541                     \$2,184,124
  Administration                                                                                                                

  Fuel                                              \$817,596              \$344,665              \$852,174                     \$2,014,434

  Marketing                                         \$5,000                \$5,000                \$5,000                       \$15,000

  **Total Annual Expenses**                         \$3,014,857            \$1,603,727            \$2,917,013                   \$7,535,597

                                                                                                                                

  Projected Profit / (Loss)                         (\$1,869,352)          (\$1,146,587)          (\$2,184,875)                 (\$5,200,814)

                                                                                                                                

  Profit Element                                    \$150,743              \$80,186               \$145,851                     \$376,780

                                                                                                                                

  **Annual Subsidy Required**                       \$2,020,095            \$1,226,773            \$2,330,725                   \$5,577,594

                                                                                                                                

  Subsidy per Departure                             \$834.36               \$1,013.39             \$1,777.23                    \$1,128.35

  Subsidy per Passenger                             \$124.11               \$199.77               \$248.21                      \$175.36
  ---------------------------- ----------- ---- --- ---------------------- ------------------- -- ----------------------------- ---------------