### BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

__________________________________________ ______ )

Essential Air Service at )

)



### GREENVILLE, MISSISSIPPI ) OST

- 2008

- 0209

LAUREL/HATTIESBURG, MISSISSIPPI ) OST

- 200 1

- 10685

TUPELO, MISSISSIPPI ) OST

- 2009

- 0305

MUSCLE SHOALS /FLORENCE/SHEFFIELD /)

TUSCUMBIA , ALABAMA ) OST

- 2000

- 7856

GREENBRIER/WHITE SULPHUR SPRINGS, )

WEST VIRGINIA ) OST

- 2003

- 15553

)

Under 4 9 U.S.C. §41731 et seq. )

__________________________________________ ______)

SILVER AIRWAYS P ROPOSAL TO PROVIDE S UBSIDIZED AIR SER V ICE

AT GREENVILLE; LAUREL/HATTIESBURG; AND TUPELO, MISSISSIPPI

AS WELL AS

MUSCLE SHOALS /FLO RENCE/SHEFFIELD/TUSCUMBIA , ALABAMA AND

GREENBRIER/WHITE SULPHUR SPRINGS, WEST VIRGINIA

Correspondence with regard to this document should be addressed to:

Mickey Bowman

Vic e President Essential Air Service

Silver Airways

1100 Lee Wagener Blvd, Suite 201

F t. Lauderdale, FL 33315

Telephone: 954

- 302

- 5929

Fax: 270

- 689

- 2180

E

- Mail: mbowman@gosilver.com

Silver Airways cordially submits its proposal to provide subsidized air service to the communities of Greenville;

Laurel/Hattiesburg and Tupelo, Miss issippi a s well as the communities of Muscle Shoals /Florence/Sheffield/Tuscumbia

, Alabama (hereaft er referred to as Muscle Shoals) and Greenbrier /White Sulphur Springs, West Virginia. Silver Airways

hereby offers two , two year

, “all or nothing ” option s for service

.

Silver Airways proposes to operate flights

, under its independent identity to the major hub airport of Atlanta, Georgia.

Atlanta’s Hartsfield airport is the nation’s busiest with over 1,200 daily departures to over 200 cities worldwide. Silver

Airwa ys, formerly Gulfstream International Airlines, has maintained interline ticketing and baggage agreements with

most legacy carriers and will schedule its flights to allow multiple connecting opportunities. Silver Airways contends

that reasonable local fa res will stimulate demand and the variety of destinations available from Atlanta will allow these

markets to recapture traffic that has been lost over the years. Toward that end we will establish a reasonable f are structure

b etween these cities and Atlant a

. Additionally, Silver Airways intends to market these flights via its codeshare

relationship with Island Air of Hawaii. This relationship will allow Silver Airways flights to be sold via al l major global

distribution systems , just as Silver Airways exi sting essential air service in Montana is marketed today . Silver Airways

flights will maintain our own web based booking site as well as a reservation call center.Silver Airways is also pursuing what has been termed a “close Interline Relationship” with Delta Airlines. Similar to the

agreement recently reached between Great Lakes Airlines and Delta Airlines in the Minneapolis hub, this “close Interline”

relationship would allow connecting itineraries involving Silver Airways and Delta Airlines to appear s on the Delta.com

website. Additionally, Silver Airways is negotiating to potentially participate in the Delta SkyMiles Program as well.

In compliance wit h Public Law 100

- 223, Silver Airways proposes to operate these flights using Saab 340B+ turb oprops

that are pressurized and accom modate 34 passeng ers

. The Saab 340 B+ features stand up headroom, a pressurized cabin

, a Flight Attendant and an onboard lavatory. The aircraft has ample cargo capacity to accommodate even bulky military

duffle bags.

One of the hallmarks of the Silver Airways operation is our ability to provide safe and reliable transportation. To ward this

end, Silver Airways has establish ed a regio nal maintenance base in northern Florida that will support these flights along

with other Silver Airways routes throughout Florida and the Bahamas . A spare aircraft wi ll be positioned in the

Gainesville, FL. maintenance base

. With this spare aircraft we have great flexibility in responding to any operati ona l

cha llenges and can assure these communities receive the level of oper ational performan ce they desire.Service Option 1

36 We ekly freque ncies between Greenville, Mississippi and Atlanta, Georgia

Silver Airways proposes to operate these flights und e r our independent brand and though it’s established codeshare

relationship with Island Air of Hawaii . The timing of these flights would be optimized for connections to and from legacy

carriers in Atlanta. Silver Airways proposes to encourage connecting traffic by using a simplified “add on” fee structure

whereby pas sengers connecting to or from other airline flights woul d pay only a low incremental fare for the Silver

Airways segment. This service constitutes three weekday roundt rips operating on a one

- stop routing. These flights would

operate via Tupelo , Mississippi and/or Muscle Shoals, Alabama

. Weekend service would consist of one round trip , one

stop flight on Saturday and two roundtrip , one

- stop flights on Sunday. (The flight schedule below cont emplates service

over Tupelo, Mississippi)

Silver Airways

Sample Flight Schedule

Service Option 1

FROM TO DEP ARR FLT EQUIP FREQ STOP

STA STA TIME TIME NUM

Greenville Atlanta 5 :00 am 8 :30 am 4011 SF3 X7 1

Greenville Atlanta 10:25am 1:55 pm 4007 SF3 X6 1

Greenville Atlanta 4:4 0 pm 8:10 pm 4009 SF3 X6 1

Atlanta Greenville 8:15 am 9:55 am 4006 SF3 X67 1

Atlanta Green ville 2:30 pm 4:10 pm 4008 SF3 Daily 1

Atlanta Greenville 8:50 pm 10:30 pm 4025 SF3 X6 1

(Note: This Schedule is for illustrative purposes and may not reflect the final published product)Service Option 1

36 Weekly frequencies between Tupelo, Mississippi and Atlanta, Georgia

Silver Airways proposes to operate these flights under our independent brand and though it ’s established codeshare

relationship with Island Air of Hawaii. The timing of these flights would be optimized for connections to and from legacy

carriers in Atlanta. Silver Airways proposes to encourage connecting traffic by using a simplified “add on” fee structure

whereby passengers connecting to or from other airline flights would pa y only a low incremental fare for the Silver

Airways segment. This service constitutes three weekday roundtrips operating on a non

- stop routing

. Weekend service

would co nsist of one round trip, non

- stop flight on Saturday and two roundtrip, non

- stop flights on Sunday

Silver Airways

Sample Flight Schedule

Service Option 1

FROM TO DEP ARR FLT EQUIP FREQ STOP

STA STA TIME TIME NUM

Tupelo Atlanta 6:05 am 8:30 a m 4011 SF3 X7 0

Tupelo Atlanta 11:30 am 1:55 pm 4007 SF3 X6 0

Tupelo Atlanta 5:4 5 pm 8:10 pm 4009 SF3 X6 0

Atlanta Tupelo 8:15 am 8:50 am 4006 SF3 X67 0

Atlanta Tupelo 2:30 pm 3:05 pm 4008 SF3 Daily 0

At lanta Tupelo 8:50 pm 9:25 pm 4025 SF3 X6 0

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

Service Option 1

24 Weekly frequencies between Muscle Shoals, Alabama and Atlanta, Georgia

Silver Airways proposes to operate these flights under o ur independent brand and though it’s established codeshare

relationship with Island Air of Hawaii. The timing of these flights would be optimized for connections to and from legacy

carriers in Atlanta. Silver Airways proposes to encourage connecting traf fic by using a simplified “add on” fee structure

whereby passengers connecting to or from other airline flights would pa y only a low incremental fare for the Silver

Airways seg ment. This service will consist of three weekday roundtrips operating on a non

- stop routing

. Weekend

service would consist of one round trip, non

- stop flight on Saturday and two roundtrip, non

- stop flights on Sunday

Silver Airways

Sample Flight Schedule

Service Option 1

FROM TO DEP ARR FLT EQUIP FREQ STOP

STA STA TIME TIME NUM

Muscle Shoals Atlanta 9:35 am 11:50 am 4005 SF3 X 7 0

Muscle Shoals A tlanta 5:35 pm 7:50 pm 4024 SF3 X6 0

Atlanta Muscle Shoals 9:00 am 9:15 am 4003 SF3 X7 0

Atlanta Muscle Shoals 5:00 pm 5 :15 pm 4022 SF3 X6 0

(Note: This Schedule is for illu strative purposes and may not reflect the final published product)Service Option 1

24 Weekly frequencies between Laurel/Hattiesburg, Mississippi and Atlanta, Georgia

Silver Airways proposes to operate these Atlanta flights under our independent br and and though it’s established

codeshare relationship with Island Air of Hawaii. The timing of these flights would be optimized for connections to and

from legacy carriers in Atlanta. Silver Airways proposes to encourage connecting traffic by using a si mplified “add on”

fee structure whereby passengers connecting to or from other airline flights w ould pay only a low incremental fare for the

Silver Airways segment. This service constitutes two weekday roundtrips operating on a non

- stop routing

. Weekend

service would consist of one round trip, non

- stop flight on Saturday and one roundtrip, non

- stop flight on Sunday

Silver Airways

Sample Flight Schedule

Service Option 1

FROM TO DEP ARR FLT EQUIP FREQ STOP

STA STA TIME TIME NUM

Laure l/Hattiesbur g Atlanta 5:00 am 7:35 am 4017 SF3 X7 0

Laure l/Hattiesburg Atlanta 1:45 pm 4:20 pm 4021 SF3 X6 0

Atlanta Laurel/Hattiesburg 12:30 pm 1:1 5 p m 4018 SF3 X7 0

Atla nta Laurel/Hattiesburg 8:30 pm 9:15 pm 4010 SF3 X6 0

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

Service Option 1

24 Weekly frequencies betw een Greenbrier/White Sulphur Springs, West Virginia and Atlanta, Georgia

(November 1 through April 30)

26 Weekly frequencies betw een Greenbrier/Wh ite Sulphur Springs, West Virginia and Atlanta, Georgia

(May 1 through October 31)

Silver Airways proposes to operate these Atlanta flights under our independent brand and though it’s established

codeshare relationship with Island Air of Hawaii. The timi ng of these flights would be optimized for connections to and

from legacy carriers in Atlanta. Silver Airways proposes to encourage connecting traffic by using a simplified “add on”

fee structure whereby passengers connecting to or from other airline flig hts would pa y only a low incremental fare for the

Silver Airways segment. This service constitutes two weekday roundtrips operating on a non

- stop routing. Weekend

service would consist of one round trip, non

- stop flight on Saturday and one roundtrip, non

- stop flight on Sunday in the

low season (Nov 1

- Apr 30) and two non

- stop round trip flights on Saturday and Sunday during the high season (May 1

- Oct 31).

Silver Airways

Sample Flight Schedule

Service Option 1

FROM TO DEP ARR FLT EQUIP FREQ STOP

STA STA TIME TIME NUM

Greenbrier Atlanta 11:50 am 1:50 p m 4017 SF3 X7 * 0 * (Nov 1

- Apr 30 )

Greenbrier Atlanta 4:45 pm 6:45 pm 4021 SF3 X6 * 0 * (Nov 1

- Apr 30 )

Atlanta Greenbrier 9:40 am 11:30 am 4018 SF3 X7 * 0 * (Nov 1

- Apr 30 )

Atla nta Greenbrier 2:35 pm 4:25 pm 4010 SF3 X6 * 0 * (Nov 1

- Apr 30 )

(All flights would operate DAILY between May 1 and Oct 31)

(Note: This Schedule is for illustrative purposes and may not reflect the final published product)Service Option 1 (All or Nothing Bid) Compensation Su mmary

Stats & Assumptions ATL

- LWB ATL

- PIB ATL

- MSL ATL

- TUP GLH

- TUP EAS Total

Assumed Comp % 98% 98% 98% 98% 98% 98%

Aircraft Type SF3 SF3 SF3 SF3 SF3 SF3

Departures 1,329 1,225 1,225 1,838 1,838 7,456

Block Hours 2,547 2,042 1,531 2,765 1,525 10,410

Enplaned Passengers 22,591 20,825 13,328 22,767 12,814 92,325

Load Factor 50% 50% 32% 57% 21% 45.2%

Avg Fare 91.57 91.57 91.57 91.57 91.57 91.57

A/C M iles 487,699 377,300 242,550 463,297 255,549 1,826,395

RPMs (000) 8,291 6,414 2,639 8,966 1,781 28,091

A SMs (000) 16,582 12,828 8,247 15,752 8,689 62,097

Pax Revenue 2,068,654 1,906,945 1,220,445 2,084,732 1,173,397 8,454,174

Oper. Expenses

Fuel 1,496,623 1,202,008 905,970 1,630,346 933,521 6,168,469

Crew 898,561 720,278 540,208 975,382 538,008 3,672,436

Main tenance 1,751,283 1,403,812 1,052,859 1,901,006 1,048,571 7,157,532

Station Turns 874,041 573,962 663,137 776,661 532,522 3,420,322

Distribution 298,839 275,478 176,306 419,623 169,510 1,339,756

A/C Ownership 366,686 283,680 182,366 348,339 192,139 1,373,210

Promotion 12,0 00 12,000 12,000 12,000 12,000 60,000

Fixed Overhead 218,922 169,365 108,878 207,968 114,713 819,846

Total 5,916,955 4,640,583 3,641,723 6,271,325 3,540,984 24,011,571

Operating Loss 3,848,301 2,733,638 2,421,278 4,186,593 2,367,587 15,557,397

5% Profit Margin on Cost 295 ,848 232,029 182,086 313,566 177,049 1,200,579

EAS Subsidy Required 4,144,149 2,965,667 2,603,365 4,500,159 2,544,637 16,757,976Service Option 2

24 Weekl y frequencies between Greenville, Mississippi and Atlanta, Georgia

Silver Airways proposes to operate these flights under our independent brand and though it’s established codeshare

relationship with Island Air of Hawaii. The timing of these flights would be optimized for connections to and from legacy

carriers in Atlanta. Silver Airways proposes to encourage connecting traffic by using a simplified “add on” fee structure

whereby passengers connecting to or from other airline flights would pay only a low incremental fare for the Silver

Airways segment. This service constitutes two weekday roundtrips operating on a one

- stop routing. These flights would

operate via Tupelo, Mississippi and/or Muscle Shoals, Alabama. Weekend service would consist of one rou nd trip, one

stop flight on Saturday and one roundtrip, one

- stop flight on Sunday. (The flight schedule below contemplates service

over Tupelo, Mississippi)

Silver Airways

Sample Flight Schedule

Service Option 2

FROM TO DEP ARR FLT EQUIP FREQ STOP

STA STA TIME TIME NUM

Greenville Atlanta 6 :00 am 9 :30 am 4011 SF3 Daily 1

Greenville Atlanta 12:40 pm 4:10 p m 4007 SF3 X6 7 1

Atlanta Greenville 10:10 am 11:50 am 4006 SF3 X67 1

Atlanta Green ville 5:05 pm 6:45 pm 4008 SF3 X6 1

Atlanta Green ville 8:0 0 pm 9:4 0 pm 4025 SF3 6 Only 1

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

Service Option 2

24 Weekly frequencies between Tupelo, Mississippi and Atlanta, Georgia

Silver Airways propo ses to operate these flights under our independent brand and though it’s established codeshare

relationship with Island Air of Hawaii. The timing of these flights would be optimized for connections to and from legacy

carriers in Atlanta. Silver Airways p roposes to encourage connecting traffic by using a simplified “add on” fee structure

whereby passengers connecting to or from other airline flights would pa y only a low incremental fare for the Silver

Airways segment. This service constitutes two weekday roundtrips operating on a non

- stop routing. Weekend service

would consist of one round trip, non

- stop flight on Saturday and one roundtrip, non

- stop flight on Sunday

Silver Airways

Sample Flight Schedule

Service Option 2

FROM TO DEP ARR FLT EQUIP FR EQ STOP

STA STA TIME TIME NUM

Tupelo Atlanta 6:05 am 9 :30 am 4011 SF3 Daily 0

Tupelo Atlanta 11:30 am 1:55 pm 4007 SF3 X6 7 0

Atlanta Tupelo 10:10 am 10:45 am 4006 SF3 X67 0

Atlanta Tupelo 5:05 pm 5:40 pm 4008 SF3 X6 0

At lanta Tupelo 8:0 0 p m 8:3 5 pm 4025 SF3 6 Only 0

(Note: This Schedule is for illustrative purposes and may not reflect the final published product)Service Option 2

24 Weekly frequencies between Muscle Shoals, Alabama and Atlanta, Georgia

Silver Airways proposes to op erate these flights under our independent brand and though it’s established codeshare

relationship with Island Air of Hawaii. The timing of these flights would be optimized for connections to and from legacy

carriers in Atlanta. Silver Airways proposes t o encourage connecting traffic by using a simplified “add on” fee structure

whereby passengers connecting to or from other airline flights would pa y only a low incremental fare for the Silver

Airways segment. This service will consist of three weekday rou ndtrips operating on a non

- stop routing. Weekend

service would consist of one round trip, non

- stop flight on Saturday and two roundtrip, non

- stop flights on Sunday

Silver Airways

Sample Flight Schedule

Service Option 2

FROM TO DEP ARR FLT EQUIP FREQ STOP

STA STA TIME TIME NUM

Muscle Shoals Atlanta 9:35 am 11:50 am 4005 SF3 X 7 0

Muscle Shoals A tlanta 5:35 pm 7:50 pm 4024 SF3 X6 0

Atlanta Muscle Shoals 9:00 am 9:15 am 4003 SF3 X7 0

Atlanta Muscle Shoals 5:00 pm 5:15 pm 4022 SF3 X6 0

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

Service Option 2

24 Weekly frequencies between Laurel/Hattiesburg, Mississippi and Atlanta, Georgia

Silver Airways proposes to operate these Atlanta fligh ts under our independent brand and though it’s established

codeshare relationship with Island Air of Hawaii. The timing of these flights would be optimized for connections to and

from legacy carriers in Atlanta. Silver Airways proposes to encourage conne cting traffic by using a simplified “add on”

fee structure whereby passengers connecting to or from other airline flights w ould pay only a low incremental fare for the

Silver Airways segment. This service constitutes two weekday roundtrips operating on a non

- stop routing. Weekend

service would consist of one round trip, non

- stop flight on Saturday and one roundtrip, non

- stop flight on Sunday

Silver Airways

Sample Flight Schedule

Service Option 2

FROM TO DEP ARR FLT EQUIP FREQ STOP

STA STA TIME TIME NUM

Laure l/Hattiesburg Atlanta 6 :00 am 8 :35 am 4017 SF3 X7 0

Laure l/Hattiesburg Atlanta 1:50 pm 4:25 pm 4021 SF3 X6 0

Atlanta Laurel/Hattiesburg 12:35 pm 1:20 p m 4018 SF3 X7 0

Atla nta Laurel/Hattiesburg 8:30 pm 9:15 pm 4010 SF3 X6 0

(Note: This Schedule is for illustrative purposes and may not reflect the final published product)Service Option 2

24 Weekly frequencies betw een Greenbrier/White Sulphur Springs, West Virginia and Atlanta, Georgia

(November 1 through April 30)

26 Weekly frequ encies betw een Greenbrier/White Sulphur Springs, West Virginia and Atlanta, Georgia

(May 1 through October 31)

Silver Airways proposes to operate these Atlanta flights under our independent brand and though it’s established

codeshare relationship with Isl and Air of Hawaii. The timing of these flights would be optimized for connections to and

from legacy carriers in Atlanta. Silver Airways proposes to encourage connecting traffic by using a simplified “add on”

fee structure whereby passengers connecting t o or from other airline flights would pa y only a low incremental fare for the

Silver Airways segment. This service constitutes two weekday roundtrips operating on a non

- stop routing. Weekend

service would consist of one round trip, non

- stop flight on Sat urday and one roundtrip, non

- stop flight on Sunday in the

low season (Nov 1

- Apr 30) and two non

- stop round trip flights on Saturday and Sunday during the high season (May 1

- Oct 31).

Silver Airways

Sample Flight Schedule

Service Option 2

FROM TO DEP AR R FLT EQUIP FREQ STOP

STA STA TIME TIME NUM

Greenbrier Atlanta 12:20 pm 2:20 p m 4017 SF3 X7 * 0 * (Nov 1

- Apr 30 )

Greenbrier Atlanta 5:20 pm 7 :20 pm 4021 SF3 X6 * 0 * (Nov 1

- Apr 30 )

Atlanta Greenbrier 10:00 am 11:5 0 am 4018 SF3 X7 * 0 * (Nov 1

- Apr 30 )

Atla nta Green brier 3:00 pm 4:50 pm 4010 SF3 X6 * 0 * (Nov 1

- Apr 30 )

(All flights would operate DAILY between May 1 and Oct 31)

(Note: This Schedule is for illustrative purposes and may not reflect the final published product)S ervice Option 2 (All or Nothing Bid) Compensation Summary

ATL

- LWB ATL

- PIB ATL

- MSL ATL

- TUP GLH

- TUP EAS Total

Stats &

Assumptions

Assumed Comp % 98% 98% 98% 98% 98% 98%

Aircraft Type SF3 SF3 SF3 SF3 SF3 SF3

Departures 1,329 1,225 1,225 1,225 1,225 6,229

Block Hours 2,547 2,042 1,531 1,842 1,016 8,978

Enplaned Passengers 22,591 20,825 13,328 15,484 8,913 81,141

Load Factor 50.0% 50.0% 32.0% 58.6% 21.4% 45.8%

Avg Fare 91.57 91.57 91.57 91.57 91.57 91.57

A/C Miles 487,699 377,300 242,550 308,700 170,275 1,586,524

RPMs (000) 8,291 6,414 2,639 6,148 1,239 24,731

ASMs (000) 16,582 12,828 8,247 10,496 5,789 53,942

Pax Revenue 2,068,654 1,906,945 1,220,445 1,417,909 816,173 7,430,126

Oper. Expenses

Fuel 1,496,623 1,202,008 905,970 1,086,318 622,016 5,312,935

Crew 899,399 720,950 540,712 650,514 358,815 3,170,392

Maintenance 1,752,918 1,405,122 1,053,842 1,267,844 699,327 6,179,054

Station Turns 874,857 5 74,498 663,756 550,318 412,578 3,076,005

Distribution 299,118 275,736 176,471 283,456 118,015 1,152,795

A/C Ownership 422,520 32 6,875 210,134 267,444 147,518 1,374,492

Promotion 12,000 12,000 12,000 12,000 12,000 60,000

Fixed Overhead 252,257 195,154 125,456 159,672 88,073 820,612

Total 6,009,693 4,712,343 3,688,341 4,277,566 2,458,342 21,146,285

Operating Loss 3,941,038 2,80 5,398 2,467,896 2,859,657 1,642,170 13,716,159

5% Profit Margin on

Cost 300,485 235,617 184,417 213,878 122,917 1,057,314

EAS Subsidy Required 4,241,523 3,041,015 2,652,313 3,073,535 1,765,087 14,773,473In conclusion, Silver Airways believes that this pro posal will provide these communities with superior air s ervice options . We feel

the passengers will benefit from servic e to the nation’s busiest hub airport in Atlanta , Georgia

. With a renewed focus on price,

schedule connectivity and reliability, Silver Airways hopes to grow these markets. Silver Airways has proven itself as a dep endable

Essential Air Service provider a nd brings a commitment to work with these communities to address their travel needs to the

relationship. I ntegrity of service that has been a hallm ark of the Silver Airways operat ion and we look forward to extend ing our

brand into the mid

- Atlantic and So uthern region s

.

Respectfully Submitted: April 10, 2012

______________________ Mickey Bowman

Vice Pr esident Essential Air Service

Silver Airways