Before the United States Department of Transportation 

August 16,2011 

Proposal to Provide Essential Air Service at 

Vernal, Utah 

Moab, Utah 

Under 49 U.S.C. 41731 et seq. 

Docket GST-1997-2706 

Docket OST-1997-2827 

o 

en 

SeaPort Airlines, Inc. 

Proposal to Provide Essential Air Service at 

Moab, Utah and Vernal, Utah 

By Order 2011-7-3, the Department requested proposals for Essential Air Service at Vernal and 

Moab, Utah due on August 16, 2011. 

Pursuant to that Order, SeaPort respectfully submits this timely proposal to provide subsidized 

essential air service to the communities of Vernal and Moab, Utah for a two year term beginning 

January 1, 2012. 

Correspondence regarding this proposal should be directed to; 

Timothy Sieber 

Vice President - Strategy & Corporate Development 

SeaPort Airlines, Inc. 

7505 NE Airport Way 

Portland, OR 97218 

(971)340-1716 

tsieber(5)seaDortair.com 
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SeaPort Airlines: Focused On Serving Small Connmunities 

Company Overview 

SeaPort Airlines, Inc. is a FAA certified scheduled airline with nearly 29 years of experience in 

commercial aviation. Our company's foundation is built on efficient and reliable service to rural 

communities. Both SeaPort Airlines, and our sister brand Wings of Alaska, currently operate 

service under the Essential Air Service program, as well as unsubsidized routes.^ 

SeaPort's approximately 200 professionals operate an average of 100 daily departures to 20 

cities in nine states with a business that is focused on providing service to smaller communities. 

This is in sharp contrast to the strategies of the mega-airline brands, which no longer have the 

operational or economic capability, or strategic desire, to serve rural America. Last month's 

announcement by Delta Air Lines to cease service at over two dozen such communities is just 

the latest such example. 

SeaPort delivers Essential Air Service to seven communities: Excursion Inlet, Alaska; 

Pendleton, Oregon; Jonesboro, El Dorado, Hot Springs, and Harrison, Arkansas; and Salina, 

Kansas. In each of these cases, after award of the EAS contract by US DOT, we have started 

on time, on budget, and with fares either at or below those outlined in our proposal. We would 

note that this stands in stark contrast to so many other airlines that place bids with 

unreasonable fares that are never realized by the traveling public, delay the start of service, or 

do not launch service that has been awarded by the Department. 

Aircraft 

SeaPort Airlines operates a fleet of Pilatus PC-12 aircraft configured for 9-passengers and two 

pilots. Manufactured in Switzerland, the PC-12 offers air conditioned, pressurized comfort with 

each seat being both a window and aisle.^ 

This aircraft operates at a cruising speed faster than any other 9-passenger aircraft currently in 

the EAS program (i.e., Cessna 402 and Cessna Caravan) and comparable to larger turboprop 

aircraft, such as the Embraer 120 Brasilia and Saab 340. 

The oversized cargo door on the PC-12 ensures pie on smaller "belly pods" and wing lockers. 

We believe this would be parti nty of room for customer baggage and is a strong contrast to 

other 9-passenger aircraft that rely on wing lockers and belly pods. This will be particularly 

valuable at Moab, where biking, hiking, and climbing represent a significant percentage of the 

^ Wings of Alaska is the premier airline serving Southeast Alaska. Providing scheduled passenger service, fast 

freight and charter service between Juneau and Skagway, Haines, Hoonah, Gustavus, and weekly flights to 

Excursion Inlet. Wings of Alaska grew In reputation and size, becoming one of the most successful regional air 

carriers in Alaska, now comprised of a fleet of seven Cessna 207's and Grand Caravans. Wings of Alaska presently 

operates an average of 38 daily scheduled flights to six Southeast cities in Alaska. 

^ Given the high-altitude of the airports involved in both dockets the requirements of 49 USC Sec. 41732 (6) may 

apply, in which case SeaPort Is fully compliant. Briefly, this paragraph states: "Service provided by pressurized 

aircraft when the service is provided by aircraft that regularly fly above 8,000 feet in altitude." 

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August 16, 2011 
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inbound tourism market. Equally as important, SeaPort does not charge for the first checked 

bag. 

Utilizing the PC-12, SeaPort is able to "right capacity" in small communities such as Moab and 

Vernal with an optimal service pattern and frequency level that minimizes traffic leakage, which 

enables us to offer reasonable fare levels, and reduces the economic burden on the 

Department. 

Pricino Model 

Generally, SeaPort Airlines employs a simplified pricing strategy of all fares being one-way with 

varying levels of advance purchase and capacity controls.^ The objective of this strategy is to 

offer a community attractive fares while at the same time minimizing required levels of subsidy 

from the Department which, in turn, helps the community maintain its eligibility for participation 

in the Essential Air Service program. 

Consistent with this model, SeaPort charges reasonable fees for ticket changes ($35 v $100+ 

on most major airlines), pet travel, and unaccompanied minors.'* These fee levels are reflective 

of SeaPort's philosophy of building customer loyalty through quality service at reasonable prices 

rather than opportunistically "nickel and diming" passengers at every possible turn. 

Marketing & Public Relations Strategy 

SeaPort intends to implement a comprehensive marketing and public relations strategy aimed at 

introducing the brand and service model to the community and promoting increased ridership 

levels. Among the marketing activities that SeaPort has implemented or presently is rolling out 

on a systemwide basis, and which will be applied at both Vernal and Moab, are the following: 

• Local Event Marketing. Recognizing that visible participation in local events has been 

successful for both legacy and low-cost airlines, SeaPort has implemented a similar strategy 

in all of its communities. These have ranged from SeaPort Airlines community egg hunts, to 

presenting at business expos, to hosting "after hours" events at local Chamber of 

Commerce meetings. In addition, SeaPort often makes "in kind" donations of tickets for use 

by local charities, either for their own business needs or as a fundraising tool (i.e., raffles, 

silent auctions, etc.). 

3 From time to time SeaPort will offer fares outside of this basic model, however these are typically promotional fares 

with additional savings to passengers. 

* Pets on SeaPort Airlines travel in a baggage compartment that is directly behind the passenger cabin and which 

ensures these four-legged customers enjoy the same pressurized, air conditioned, and heated environmental comfort 

as our human customers. 

OST-1997-2706 & OST-1997-2827 p , o 

August 16, 2011 ^ ' 
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Sample SeaPort Airlines Advertising 

/SJEX^^WZTO M 

OST-1997-2706 & OST-1997-2827 

August 16, 2011 

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• Website. The majority of SeaPort's passengers book through the Company's website 

(www.SeaPortAir.com) which is currently undergoing a redesign to improve user navigation 

and facilitate an easier booking process. 

• Social Media. Beginning in 2010, SeaPort Airlines has managed a successful social media 

campaign, allowing the Company to dynamically engage its customer base in a two-way 

conversation through sites such as Facebook, Twitter, Foursquare & Linkedln. We have 

found social media to be an excellent tool for generating passenger referrals and information 

sharing in our communities, and expect similar results in the two Utah communities in this 

proposal. 

• FlyerFlex Customer Rewards. During 2011, SeaPort launched a new and improved 

customer loyalty program called "FlyerFlex." This program provides the following benefits: 

- Free flights 

- Fee waivers 

- Bonus points 

- Gift memberships 

- Personalized cards or bag tags 

SeaPort anticipates unveiling phase two of the FlyerFlex program by the end of 20 2012 to 

include a wider choice of travel rewards. It is important to note that although this program is 

relatively new, early indicators are that the objectives of generating new and repeat 

business are being achieved. 

• Value Accounts. SeaPort will offer its Value Account at Vernal and Moab, a program that 

encourages businesses to make a long-term investment in local air service by offering a 

variety of benefits and savings, including 5%-15% reductions off published fares. It is 

important to note that unlike corporate travel programs of major airlines that are not 

designed to effectively serve small businesses in rural communities, SeaPort's Value 

Accounts can provide savings to a company of virtually any size and can be used by any 

employee of a company, not just specific employees named on a sales contract. 

• Destination Pacl<aging. SeaPort has recently added the capability to create travel 

packages with other local businesses and plans are being formulated to offer packages with 

hotels, spas, and attractions in each community served. This will be included in the roll out 

of the "new and improved" www.SeaPortAir.com, referenced above. We intended to include 

this in both markets, with particular emphasis on Moab as the gateway to Arches National 

Park and Canyonlands National Park. 

Distribution Strateqv 

SeaPort has invested heavily in improving our inventory distribution abilities. We are now in all 

five major global distribution systems and have distribution on all major online travel agencies 

and meta-searchers including Orbitz, Travelocity, Expedia, Kayak.com, and CheapoAir.com. 

SeaPort has an interline ticketing agreement with US Airways and is working on securing 

additional agreements. 

OST-1997-2706 & OST-1997-2827 p , r 

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Community & Customer Feedback 

While SeaPort Airlines has outlined above why we believe our airtine is well positioned to 

ensure that reliable and reasonably priced air transportation continues to play a vital role in the 

local economy and quality of life in both of these communities, the strongest proof resides in the 

accolades we receive. Below is just a small sample of the comments SeaPort has received from 

our customers and community partners: 

"Eastern Oregon Regional Airport at Pendleton had been struggling since 

schedule changes following 9/11 served by a carrier flying 37 seat aircraft. Low 

passenger count attributed to poor schedule, which then contributed to poorer 

passenger count. The carrier's solution was to bring in larger aircraft and fly to a 

different hub. The Airport and community balked at this suggestion and went in 

search of alternatives. The solution found through the EAS process was SeaPort 

Air flying a 9 passenger Pilatus. The passengers have welcomed the new 

service, much better schedule, and are elated with "no security check" and stand 

by time. Passengers today will say, "I love the service", "great customer service", 

and "I'm sure glad I finally tried it, cause I'll be back". 

In our particular market, the 9 passenger aircraft is perfect, and SeaPort Air 

provides the schedule, the professionalism, and customer service we need and 

desire." 

- Larry Dalrymple 

Airport Manager 

Pendleton Regional Airport 

"I have never had such a positive experience connected with any airline. I read 

about Seaport Air last October when they opened the Mid-South Route, but didn't 

have the chance to fly until March. Usually the dread of the process comes then 

you just grin and bear it; however, with SeaPort Air I could arrive 15 minutes 

early. The hassle free no TSA is wonderful and made me feel special. I have 

flown twice in the last 2 months and the customer service from start to finish is 

outstanding. I will be a regular customer and have already recommended the 

airline to several associates. Thank you, SeaPort Air, for making me feel like a 

queen!" 

- Catherine Martin 

Customer (few from Memphis to 

Harrison) 

"For two decades I have been picking my mother up at the airport and for two 

decades I have been met with the defeated, hang-dog look that the ordeal of air 

travel has given hen I guess it pretty much does it to all of us, but (as she is well 

into her 80's) I worry about the toll it takes on her more and more lately. 

OST-1997-2706 & OST-1997-2827 p-a- | R 

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When I picked her up today from her SeaPort flight K52325 from Dallas and saw 

she was smiling, you could have knocked me over with a feather! She couldn't 

stop raving about how pleasant the flight was. Let me be clear My mother is a 

tough-as-nails Mid-western Yankee from the old school who has been around 

the world a couple of times since the late 1940's. She doesn't bestow idle praise 

and she seldom raves. 

Since it was a 9-seater plane that had to stop for a bathroom break, I can only 

conclude that it was the above average service she received from your staff. 

She, in fact, said as much. From the ticket counter in Dallas to the ride she got 

to the main terminal in Memphis she was impressed. She even liked the way 

she was asked to turn off her mobile phone and the help she was given doing so 

(she's not a big techie). 

I'm in the service industry myself and I know how often complaints come 

through. I just want to be sure to let you know how well everyone did on this 

flight. In the future, I will look to SeaPort first for my travel needs and will spread 

the good word to my friends. 

A smile and a kind word go a long way y'all. Thank you for getting this one so 

right." 

- Mark Davis Peterson 

Customer (flew from Dallas 

to Memphis) 

"I want to let you know that Alan, the owner, and I were stuck in the horrendous 

traffic getting to the airport. Your people called to see where we were at. Called 

a few times to try and get us out of the jam - which was impossible, we were too 

fare from the Gateway and we already had been on the road 1 !4 hours. Did 

manage to break free taking 102 (I think) and called close to the Embassy to let 

them know we were just a minute away and they held the plane for us!! Amazing 

and kudos to your team!! I have been telling everyone of the stellar customer 

service and you will be our flight of choice going forward." 

- Joanne Bosworth 

Customer (flew from Portland) 

"Two hours before the flight I booked my ticket to Memphis from Hot Springs. 

Wow! What a surprise; it was simple, convenient, great price, and impeccable 

service. It far exceeded my expectations and I will be flying to Memphis on 

SeaPort Airlines instead of driving from now on. The customer service was 

fabulous!" 

- Ruth Ann Smith 

Customer (flew from Hot 

Sphngs to Memphis) 

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Service Proposal 

Service Pattern 

SeaPort Airlines is offering three proposals for consideration by the communities of Moab and 

Vernal that include nonstop service exclusively to Salt Lake City or service to both Salt Lake 

City and Denver. 

SeaPort Airlines 

Proposal Service Pattern Options 

Moab and Vernal, LIT 

The proposed service patterns take into consideration the need to access Salt Lake City which 

functions as the economic, governmental, and cultural center for the State of Utah, but also the 

need for those communities to have connectivity with the rest of the nation. 

In the case of Vernal, access to Denver would specifically benefit the oil & gas industry, but also 

provide stronger eastbound connectivity than what is available at SLC. In the case of Moab, 

SLC provides good connectivity to the western United States where the majority of inbound 

visitors originate, yet would be supplemented by good eastbound connectivity via DEN. 

OST-1997-2706 & OST-1997-2827 

August 16, 2011 

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Both Denver and Salt Lake City can provide connections to/from low-fare carriers, including 

Southwest, Frontier, and JetBlue.^ 

As noted above, SeaPort Airlines is offering three service options for consideration by the 

communities of Moab and Vernal: 

• Option #1:18 weekly round trips to Salt Lake City 

• Option #2: 11 weekly round trips to Denver and 7 weekly round trips to Salt Lake City 

• Option #3: 7 weekly round trips to Denver and 11 weekly round trips to Salt Lake City 

Each option is presented to each community on a "stand alone" basis. There is no 

requirement that SeaPort be awarded service in both Moab and Vernal, or that the 

communities select the same or any specific combination of service options. 

Projected revenue and operating expenses that form the economic basis of this proposal are 

summarized on the table on the next page for a two year period beginning on January 1, 2012. 

Projections are based on the assumption of one-way fares as low as $59 between Vernal and 

Salt Lake City and as low as $129 between Vernal and Denver, inclusive of all taxes and fees. 

From Moab, fares as low as $69 one-way to Salt Lake City and $129 to Denver are estimated, 

inclusive of all taxes and fees. 

The proposals contained herein are based on the assumption of a two year term beginning 

January 1, 2012. Notwithstanding the risk of cost inflation in coming years (particularly related to 

fuel) that could possibly outstrip traffic grov\rth and reasonable fare increases, SeaPort is offering 

the Department the option to contract the proposed annual subsidy for a four year period at no 

increase in annual subsidy. We believe this offer provides the community with the assurance of 

stable air service for an extended period and reduces the administrative burden on both the 

Department and ourselves. 

Respectfully submitted. 

Timothy Sieber 

Vice President - Strategy & Corporate Development 

SeaPort Airlines, Inc. 

' While SeaPort Airlines (along with every other U.S. based airline) does not have an interline ticketing and baggage 

agreement with Southwest Airlines, Internet savvy consumers figured out long ago how to build "end to end" 

connecting itineraries with this carrier, as well as others. This has been validated in a number of our other EAS 

markets that are linked with airports served by Southwest (as well as other low-fare airlines). 

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SeaPort Airlines, Inc. 

Docket DOT-OST-1997-2706 

Vernal - Salt Lake City 

Mon-Fri: 3 RT 

Sat: 1 RT 

Sun: 2 RT 

rating Projections 

Average Sector Length (sm) 

Scheduled Departures 

Scheduled Block Hours 

Projected Completion Factor 

Projected Completed Departures 

Projected Completed Block Hours 

Passenger Projections 

Projected Passengers 

Projected Average Fare 

Revenue Passenger Miles (RPMs) 

Available Seat Miles (ASMs) 

Projected Load Factor 

Financial Projections 

Revenues 

Passenger Ticket Revenues 

Ancillary Rewsnues 

Total 

Expenses 

Flight Operations 

Aircraft Ownership/Lease 

Fuel & Oil 

Traffic Servicing 

Insurance 

Maintenance 

Sub-Total - Direct 

Indirect 

Total Expenses 

Projected Operating Profit/(Loss) 

Subsidy Calculations 

Operating Loss 

Economic Return @ 5% 

Required Subsidy 

Option 1 

132 

1,872 

1,497.6 

97.5% 

1,825 

1,460.2 

8,000 

$ 89.00 

1,056,000 

2,168,338 

48.7% 

$712,000 

$18,632 

$730,632 

$170,839 

$277,430 

$594,285 

$100,876 

$29,203 

$335,837 

$1,508,470 

$678,812 

$2,187,282 

($1,456,650) 

$1,456,650 

$109,364 

$1,566,015 

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SeaPort Airlines. Inc. 

Docket DOT-OST-1997-2706 

Vernal - Denver 

Mon-Fri: 2 RT 

Sun: 1 RT 

Vernal - Salt Lake City 

Mon-Fri: 1 RT 

Sat: 1 RT 

Sun: 1 RT 

Operating Projections Option 2 

Average Sector Length (sm) 

Scheduled Departures 

Scheduled Block Hours 

Projected Completion Factor 

Projected Completed Departures 

Projected Completed Block Hours 

Passenger Projections 

Projected Passengers 

Projected Average Fare 

Revenue Passenger Miles (RPMs) 

Available Seat Miles (ASMs) 

Projected Load Factor 

Financial Projections 

Revenues 

Passenger Ticket Revenues 

Ancillary Revenues 

Total 

Expenses 

Flight Operations 

Aircraft Ownership/Lease 

Fuel & Oil 

Traflic Serwcing 

Insurance 

Maintenance 

Sub-Total - Direct 

Indirect 

Total Expenses 

Projected Operating Profit/(Loss) 

Subsidy Calculations 

Operating Loss 

Economic Return @ 5% 

Required Subsidy 

217 

1,872 

2,210.7 

97.5% 

1,825 

2,155.4 

9,350 

$ 146.73 

2,025,833 

3,559,140 

56.9% 

$1,371,900 

$35,919 

$1,407,819 

$245,877 

$399,288 

$855,317 

$194,373 

$42,030 

$483,348 

$2,220,234 

$888,094 

$3,108,327 

($1,700,509) 

$1,700,509 

$155,416 

$1,855,925 

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SeaPort Airlines. Inc. 

Docket DOT-OST-1997-2706 

Vernal - Salt Lake City 

Mon-Fri: 2 RT 

Sun: 1 RT 

Vernal - Denver 

Mon-Fri: 1 RT 

Sat: 1 RT 

Sun: 1 RT 

Operating Projections Option 3 

Average Sector Length (sm) 

Scheduled Departures 

Scheduled Block Hours 

Projected Completion Factor 

Projected Completed Departures 

Projected Completed Block Hours 

Passenger Projections 

Projected Passengers 

Projected Average Fare 

Revenue Passenger Miles (RPMs) 

Available Seat Miles (ASMs) 

Projected Load Factor 

Financial Projections 

Revenues 

Passenger Ticket Revenues 

Ancillary Revenues 

Total 

Expenses 

Flight Operations 

Aircraft Ownership/Lease 

Fuel & Oil 

Traffic Servicing 

Insurance 

Maintenance 

Sub-Total - Direct 

Indirect 

Total Expenses 

Projected Operating Profit/(Loss) 

Subsidy Calculations 

Operating Loss 

Economic Return @ 5% 

Required Subsidy 

174 

1,872 

1,965.3 

97.5% 

1,825 

1,916.2 

8,550 

$ 116.34 

1,490,550 

2,863,739 

52.0% 

$994,700 

$26,047 

$1,020,747 

$218,591 

$354,976 

$760,396 

$140,931 

$37,366 

$429,708 

$1,941,968 

$650,559 

$2,592,527 

($1,571,780) 

$1,571,780 

$129,626 

$1,701,407 

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SeaPort Airlines. Inc. 

Docket DOT-OST-1997-2827 

Moab - Salt Lake City 

Mon-Fri: 3 RT 

Sat: 1 RT 

Sun: 2 RT 

Operating Projections Option 1 

Sector Length (sm) 

Scheduled Departures 

Scheduled Block Hours 

Projected Completion Factor 

Projected Completed Departures 

Projected Completed Block Hours 

Passenger Projections 

Projected Passengers 

Projected Average Fare 

Revenue Passenger Miles (RPMs) 

Available Seat Miles (ASMs) 

Projected Load Factor 

Financial Projections 

Revenues 

Passenger Ticket Revenues 

Ancillary Revenues 

Total 

Expenses 

Flight operations 

Aircraft Ownership/Lease 

Fuel & Oil 

Traffic Servicing 

Insurance 

Maintenance 

Sub-Total - Direct 

Indirect 

Total Expenses 

Projected Operating Profit/(Loss) 

Subsidy Calculations 

Operating Loss 

Economic Return @ 5% 

Required Subsidy 

184 

1,872 

1,872.0 

97.5% 

1,825 

1,825.2 

6,000 

$ 92.50 

1,104,000 

3,022,531 

36.5% 

$555,000 

$14,523 

$569,523 

$213,548 

$346,788 

$742,856 

$78,632 

$36,504 

$41-9,796 

$1,838,125 

$680,106 

$2,518,232 

($1,948,708) 

$1,948,708 

$125,912 

$2,074,620 

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SeaPort Airlines. Inc. 

Docket DOT-OST-1997-2827 

Moab - Denver 

Mon-Fri: 2 RT 

Sun: 1 RT 

Moab - Salt Lake City 

Mon-Fri: 1 RT 

Sat: 1 RT 

Sun: 1 RT 

Operating Projections Option 2 

Sector Length (sm) 

Scheduled Departures 

Scheduled Block Hours 

Projected Completion Factor 

Projected Completed Departures 

Projected Completed Block Hours 

Passenger Projections 

Projected Passengers 

Projected Average Fare 

Revenue Passenger Miles (RPMs) 

Available Seat Miles (ASMs) 

Projected Load Factor 

Financial Projections 

Revenues 

Passenger Ticket Revenues 

Ancillary Revenues 

Total 

Expenses 

Flight Operations 

Aircraft Ownership/Lease 

Fuel & Oil 

Traflic Servicing 

Insurance 

Maintenance 

Sub-Total - Direct 

Indirect 

Total Expenses 

Projected Operating Profit/(Loss) 

Subsidy Calculations 

Operating Loss 

Economic Return @ 5% 

Required Subsidy 

250 

1,872 

2,386.8 

97.5% 

1,825 

2,327.1 

6,900 

$ 123.41 

1,725,000 

4,106,700 

42.0% 

$851,550 

$22,261 

$873,811 

$272,274 

$442,155 

$947,142 

$120,645 

$46,543 

$535,240 

$2,363,998 

$638,279 

$3,002,277 

($2,128,466) 

$2,128,466 

$150,114 

$2,278,580 

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SeaPort Airlines, inc. 

Docket DOT-OST-1997-2827 

Moab - Salt Lake City 

Mon-Fri: 2 RT 

Sun: 1 RT 

Moab - Denver 

Mon-Fri: 1 RT 

Sat: 1 RT 

Sun: 1 RT 

Operating Projections Option 3 

Sector Length (sm) 

Scheduled Departures 

Scheduled Block Hours 

Projected Completion Factor 

Projected Completed Departures 

Projected Completed Block Hours 

Passenger Projections 

Projected Passengers 

Projected Average Fare 

Revenue Passenger Miles (RPMs) 

Available Seat Miles (ASMs) 

Projected Load Factor 

Financial Projections 

Revenues 

Passenger Ticket Revenues 

Ancillary Revenues 

Total 

Expenses 

Flight Operations 

Airciall Ownership/Lease 

Fuel & Oil 

Traffic Servicing 

Insurance 

Maintenance 

Sub-Total - Direct 

Indirect 

Total Expenses 

Projected Operating Profit/(Loss) 

Subsidy Calculations 

Operating Loss 

Economic Return @ 5% 

Required Subsidy 

OST-1997-2706 & OST-1997-2827 

August 16, 2011 

217 

1,872 

2,152.8 

97.5% 

1,825 

2,099.0 

6,200 

$ 109.70 

1,345,400 

3,564,616 

37.7% 

$680,150 

$17,787 

$697,937 

$245,581 

$398,806 

$854,285 

$96,362 

$41,980 

$482,765 

$2,119,779 

$638,053 

$2,757,832 

($2,059,895) 

$2,059,895 

$137,892 

$2,197,787 

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