Before the United States Department of Transportation

September 30, 2011

Proposal to Provide Essential Air Service at

JACKSON, TENNESSEE

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

DOT-OST-2000-7857

SeaPort Airlines, Inc.

Proposal to Provide Essential Air Service at

Jackson, TN

By Order 2011-8-27, the Department requested proposals for Essential Air Service at Jackson, 

Tennessee (McKellar-Sipes Regional Airport).

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

essential air service to Jackson, Tennessee structured as a two-year term but fully 

understanding that the community’s EAS status many be affected by recent amendments to the 

EAS program and pending rulemaking which may impact the term of any new contract to 

provide service at McKellar-Sipes Regional Airport. 

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@seaportair.com
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SeaPort Airlines: Focused On Serving Small Communities

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 on an unsubsidized basis.

1

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. 

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 U.S. DOT, we have started 

by the date promised and with fares either at or below those outlined in our proposal. We would 

note that this stands in contrast to some 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.

A Track Record of Rebuilding Enplanements After A Period of Service Dormancy

SeaPort Airlines understands the air service issues that the Jackson community has faced in 

recent years: 

 Big Sky Airlines ceased service in January 2008;

 Great Lakes Aviation was selected as the replacement carrier but did not begin service

which resulted in Jackson being without service for the 20-month period of January 2008 

through August 2009; and

 Pacific Wings inaugurated service on August 31, 2009, but traffic has failed to rebuild to

historical levels.2

The Arkansas communities of El Dorado, Jonesboro, Harrison, and Hot Springs experienced a 

period of sixteen (16) months without any air service, and suffered inferior service prior to the 

hiatus. SeaPort initiated service in these markets on October 26, 2009 and since that time has

worked diligently to rebuild local consumer confidence in their local airport.

 

1 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 207s and Grand Caravans. Wings of Alaska presently 

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

2 U.S. DOT Order 2011-8-27
DOT OST-2000-7857

September 30, 2011

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To illustrate this point, the graph below compares SeaPort’s monthly enplanements since we 

reestablished scheduled service at the four Arkansas communities during the fall of 2009 to 

enplanements at McKellar-Sipes Regional Airport during the approximate same period.

3

Monthly Enplanements

SeaPort Arkansas Markets v Jackson, TN

September 2009 – August 2011

0

50

100

150

200

250

300

350

400

PacWings - MKL

SeaPort - HOT

SeaPort - HRO

SeaPort - ELD

Seaport - JBR

Revenue Passenger Enplanements

Since the current provider of air service inaugurated service at Jackson, monthly enplanements 

have tumbled by approximately 88%. During the same period in the Arkansas communities, 

SeaPort generated an overall increase in average passenger enplanements ranging from 188% 

at Harrison to nearly 870% in Hot Springs.4

 

It is clear that SeaPort has experienced success in rebuilding traffic in the Arkansas 

communities and we reasonably believe similar success can be achieved at McKellar-Sipes 

Regional Airport with the right combination of schedule, fares, destination, reliable service, and 

community partnership. 

 

3 Note that Pacific Wings started service in Jackson on August 31, 2009, with the first complete month of service 

being September 2009. SeaPort Airlines started service in Arkansas during October 2009, with the first complete 

month being November 2009. The data illustrated begins with the first complete month of service for each carrier. 

Data for SeaPort Airlines ends in August 2011, the last complete month prior to the filing deadline of this Docket. 

Pacific Wings enplanements were sourced from T-100 market reports, with May 2011 being the most recent publicly 

available data. 

4 Note that SeaPort’s current service to Jonesboro faces the same challenges at Jackson with respect to continued 

EAS program eligibility.
DOT OST-2000-7857

September 30, 2011

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A Track Record of Building Community Partnerships

With respect to community partnerships, SeaPort Airlines prides itself on those which it has 

been able to develop in each market served. This includes participation in local events, donation 

of tickets, regular community meetings, and advance notification of and opportunity for input 

related to schedule changes and fares.

We believe this approach serves our own interests equally with those of the communities served 

by fostering long-term, stable relationships that result in increased ridership and, eventually, 

reduced subsidy requirements. SeaPort’s partnership approach is building recognition by those 

who watch the Essential Air Service program as evidenced by the following weblog entry from 

Skyland Centre for Essential Air Service:5

We invite the Jackson community to contact any of our EAS partner communities for additional 

information. 

 

5

SkyLand Centre for Essential Air Services offers news, information, expert opinion and industry insights through 

www.SkyLandNews.com home page, where breaking news is posted as it comes in and a weekly news digest, 

currently circulated to 5,000 essential air service professionals around the world.
DOT OST-2000-7857

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The SeaPort Airlines Experience

Below, we have summarized for the benefit of the Department and the community key elements 

of SeaPort’s operating model and service strategy that we intend to employ at Jackson, TN if 

selected to provide essential air service.

Aircraft

SeaPort Airlines is proposing service at Jackson with 9-passenger Cessna Caravan aircraft.6

Currently manufactured in the USA, the Caravan was originally designed in the 1980’s to 

replace an aging fleet of piston-powered aircraft, such as the De Havilland Otter and Cessna 

402. 

SeaPort Airlines Cessna Caravan

The Caravan has a spacious cabin that is highlighted by a large aisle and generous windows for 

all around excellent visibility. The large cargo pod on the belly of the aircraft facilitates carriage 

of baggage volumes and weights much greater than that which can be accommodated on older 

piston-powered twins.

 

6

Although certified for single-pilot operation, SeaPort operates the Caravan with both a Captain and First Officer.
DOT OST-2000-7857

September 30, 2011

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We believe the Cessna Caravan offers the “right size” capacity increment to rebuild passenger 

traffic at MKL, enabling us to offer optimal frequency levels and reasonable fares to the 

community, while at the same time minimizing the required level of subsidy by the Department. 

Airport Terminals

SeaPort Airlines is offering three proposal options for consideration by the community and 

Department that include service to Nashville and/or Memphis.7 For service at each airport, 

SeaPort proposes the following terminal arrangements:

 Nashville (BNA): SeaPort Airlines would operate from the main terminal with TSA-screened 

operations. We have obtained the airport’s schedule of rates and charges and, unlike the 

current EAS provider at Jackson, have no indication that we would be “unable to procure 

counter or gate space at [Nashville International Airport] on reasonable terms.”8

 Memphis (MEM): SeaPort would utilize its existing business terminal at Memphis 

International Airport, which offers convenience for quick trips to and from the Memphis 

metropolitan area. We provide a complimentary and quick shuttle service to and from the 

main airline terminal for passengers connecting to, or from, distant destinations. Passengers 

departing Jackson for Memphis would not need to go through TSA screening and those 

arriving from Memphis would be deplaned into a non-sterile area at McKellar-Sipes Regional 

Airport.

Pricing Model

SeaPort Airlines does not engage in “baiting” communities with ridiculously low fares (e.g., 

every seat, every flight at $39) and inflated traffic projections that are neither attainable nor 

sustainable. Such fares shift the true cost of air transportation to the Department and we believe 

are inconsistent with the intent of the essential air service program to ensure reasonable access 

to the air transportation system for smaller communities.

Instead, SeaPort Airlines proposes to employ a pricing strategy of reasonable and attractive

fares that factor in ticket prices at other airports in the region, total itinerary trip costs including 

connecting flights on other airlines, costs of other modes of transportation, and the need to 

minimize subsidy level and taxpayer expenditures. Specifically, projections in our service 

proposal options and subsidy requests are based on the assumption of one-way fares from 

Jackson as follows:

 Memphis: $29 to $69, with an average of $45.75; and

 Nashville: $49 to $119, with an average of $74.55.

9

 

7

The Department and community should be aware that SeaPort Airlines completed a comprehensive forecast and 

economic analysis of providing service to St. Louis. We found no way, even with the exceptional economics of the 

Cessna Caravan and SeaPort’s increasing efficiencies resulting from operational scale, to serve a route of this stage 

length with a reasonable passenger forecast with per passenger subsidy below the $200 statutory limit. That being 

said, if SeaPort is selected to service Jackson and the market is responsive, we will consider St. Louis service during 

the next proposal and selection cycle.

8 U.S. DOT Order 2011-8-27, p. 2

9

Inclusive of FET.
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All fares on SeaPort Airlines are one-way with varying levels of required advance purchase and 

capacity controls. We believe the fares outlined above represent a responsible approach to 

pricing in small communities such as Jackson that is consistent with the overall objectives of the 

EAS program.

Consistent with our pricing model, SeaPort charges reasonable fees for ticket changes, pet 

travel, and unaccompanied minors. These fee levels reflect 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 will implement a comprehensive marketing and public relations strategy aimed at 

introducing our brand to the community and reducing the required level of subsidy to below 

$200 per passenger. These activities include:

 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.).

 Website: The majority of SeaPort’s passengers book through the Company’s website 

(www.SeaPortAirlines.com). 

 Social Media: Since 2010, SeaPort Airlines has managed a successful social media 

campaign that has allowed the Company to dynamically engage its customer base in a twoway conversation through sites such as Facebook, Twitter, FourSquare & LinkedIn. 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 Jackson.

 FlyerFlex Customer Rewards: During 2011, SeaPort launched a new and improved 

customer loyalty program called “FlyerFlex.” This program provides customers with a variety 

of benefits including free flights, service charge waivers, and bonus points. SeaPort 

anticipates unveiling further enhancements of the FlyerFlex program during 2012 that will

include a wider choice of travel rewards. 

 Value Accounts: SeaPort will offer its Corporate Value Account at Jackson, a program that 

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

variety of benefits and savings of 5% to 15%. It is important to note that unlike corporate 

travel programs of major airlines that are not designed to serve small businesses in rural 

communities, SeaPort’s Corporate 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. 
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Sample SeaPort Airlines Advertising
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It is important to note that these are not simply concepts. SeaPort has implemented the above 

practices in each of the communities it serves and, as illustrated by the enplanement growth on 

the page 3 graph, they have been effective in rebuilding traffic in our Arkansas markets. We 

firmly believe these activities will be just as effective in rebuilding traffic at and consumer 

confidence in McKellar-Sipes Regional Airport.

Distribution & Interline Connectivity

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

five major global distribution systems and are available on all major online travel agencies and 

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

SeaPort currently has an interline ticketing agreement with US Airways and is working toward 

securing agreements with other carriers that will facilitate single ticket itineraries from Jackson 

to destinations all around the world.10

 

10 US Airways serves both Memphis and Nashville, the two hub options we are proposing for MKL.
DOT OST-2000-7857

September 30, 2011

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Community & Customer Feedback 

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

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

economy and quality of life in Jackson, 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:

Our Essential Air Service Communities

“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 understand the importance of having dependable, reliable air service with an affordable cost. 

Not only will SeaPort Airlines meet these needs, but excel by providing great customer service, 

a high level of community involvement, and an eagerness to become a community partner”.

− Luci Larson

Former Mayor & Owner of 

Action Travel

Salina, KS

“South Arkansas Regional Airport and the entire South-central Arkansas region suffered from 

the loss of air service previously provided by Mesa Airlines in the Spring of 2008. Unreliable 

service and a poor schedule were already negatively impacting enplanements before Mesa 

pulled out, but at that point, the nearest option for air service of any kind was almost a two hour 

drive away. After sorting through applications from many different interested carriers, the El 

Dorado Airport Commission, along with El Dorado‟s Mayor, chose SeaPort to restore air service 

to South Arkansas. This was the beginning of a great partnership between SeaPort and our 

local community. 
DOT OST-2000-7857

September 30, 2011

Page | 11

“Working with SeaPort has been nothing but a pleasure from the bottom to the top of their 

organization, and their commitment to excellence shines through the glowing comments that I 

hear from people who fly with them. In addition to hearing comments from others, I have flown 

SeaPort on several occasions, and have come away from the experience thinking „This is how 

all air service should be.‟

“I think this sentiment is shown best through the commitment of the residents of South Arkansas 

who have increased ridership on SeaPort almost 50% on a year-over-year basis. I strongly 

support SeaPort Airlines and look forward to working with them in the future.”

− Josh Zylks

Airport Manager

South Arkansas Regional Airport 

(Goodwin Field)

Our Customers

“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)

“As a recent flyer on SeaPort, I wanted to pass on the great experience I had. I was heading to 

Hot Springs, AR to help with fire and aviation management in the Arkansas Oklahoma 

Interagency Coordination Center. In Memphis, nobody at Delta knew where to direct me. SATO, 

the government travel people, put in in touch with office, who come right over and picked me 

up. Both the man who picked me up in the van, and the woman who checked me in were very 

nice. When we were ready to go, the flight crew Keith and Jeremy were very professional, but 

had a nice, easy attitude. Once in Hot Springs, we were too late to pick up my rental car, and I 

was getting ready to call a cab. When they realized what was going on, they drove me to the 

hotel! 

If I could summarize my experience with SeaPort Airlines, it would be that you exceeded my 

expectations in every way possible. Your staff was tremendous and reflect extremely well on 

your airline. With people like them, your airline will succeed and grow! Thanks for the service.

 Clayton Camblin

Customer (flew from Memphis to Hot 

Springs)
DOT OST-2000-7857

September 30, 2011

Page | 12

“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 

Springs 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 far from the Gateway and we already had been 

on the road 1 1⁄2 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 to 

Seattle)

“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 her. 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.

“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)
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Service Proposal

Service Pattern

SeaPort Airlines is offering three service options for consideration by the Jackson community

that are summarized on the map below.

SeaPort Airlines

Service Pattern Options at Jackson, TN (MKL)

Option #1

18 weekly round trips to Memphis, TN

Option #2

6 weekly round trips to Memphis, TN

+ 12 weekly round trips to Nashville, TN

Option #3

12 weekly round trips to Memphis, TN

+ 6 weekly round trips to Nashville, TN

Memphis, TN (MEM)

Nashville, TN (BNA)

Jackson, TN (MKL)

Note that options #2 and #3 would provide the community with access to two different 

connecting hubs. We believe that this enhanced option of two connecting points will aid in 

facilitating faster restoration of consumer confidence in scheduled air service at McKellar-Sipes 

Regional Airport. We have found this to be true in our Arkansas communities, where the 

addition of Dallas and/or Kansas City to our existing Memphis service has resulted in significant 

recent traffic growth (see graph on page 3), and firmly believe that similar results can be 

achieved in Jackson.

In the case of Memphis, access would be afforded to virtually every major airline in the United 

States and MEM is a major hub for Delta Air Lines. Nashville offers similar access to legacy 

carriers, with the added benefit of access to low-fare airlines such as Southwest and Frontier.

11

 

 

11 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” 
DOT OST-2000-7857

September 30, 2011

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Schedules

The following are illustrative schedules for each of the service options outlined above. Final 

schedules would be developed after consultation with the community partner.

Flights to and from Memphis are aligned with the hours of Delta’s connecting banks at that 

airport.

 

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). 

Depart Arrive Frequency Stops Depart Arrive Frequency Stops

6:15am 6:50am ExSun 0 10:00am 10:35am ExSun 0

11:55am 12:30pm ExSun 0 3:00pm 3:35pm ExSat 0

5:00pm 5:35pm ExSat 0 8:00pm 8:35pm ExSat 0

Depart Arrive Frequency Stops Depart Arrive Frequency Stops

11:55am 12:30pm ExSun 0 3:00pm 3:35pm ExSat 0

6:05am 7:00am ExSun 0 7:30am 8:25am ExSun 0

4:00pm 4:55pm ExSat 0 6:30pm 7:25pm ExSun 0

Depart Arrive Frequency Stops Depart Arrive Frequency Stops

6:15am 6:50am ExSun 0 10:00am 10:35am ExSun 0

5:00pm 5:35pm ExSat 0 8:00pm 8:35pm ExSat 0

11:55am 12:50pm ExSun 0 3:00pm 3:55pm ExSat 0

plus 6 Weekly Roundtrips, Jackson - Nashville

From Jackson to Memphis From Memphis to Jackson

From Jackson to Nashville From Nashville to Jackson

From Jackson to Memphis From Memphis to Jackson

Option #2: 6 Weekly Roundtrips, Jackson - Memphis

From Jackson to Nashville From Nashville to Jackson

Option #3: 12 Weekly Roundtrips, Jackson - Memphis

From Jackson to Memphis From Memphis to Jackson

Option #1: 18 Weekly Roundtrips, Jackson - Memphis

plus 12 Weekly Roundtrips, Jackson - Nashville
DOT OST-2000-7857

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Projected Passenger Traffic

In Order 2011-8-27 the Department states that for the 12-months ending September 30, 2010, a 

total of 5,252 passengers were enplaned and deplaned at McKellar-Sipes Regional Airport. 

Referring back to the graph on page 3, however, note traffic at MKL since September 2010 has 

been in virtual free fall. To develop reasonable passenger and revenue projections, SeaPort 

Airlines factored in both data provided by the Department and reviewed historical T-100 traffic 

as far back as 2002.

12

This data is provided on the graph below and, for illustrative purposes, compared to SeaPort’s 

traffic forecast during the first year of service at Jackson for each service option.13

Passenger Traffic at Jackson, TN (MKL)

Historical Levels v SeaPort Airlines Forecast

SOURCE: Historical traffic data from T-100 filings

8,619

5,416

5,297

6,827

927

1,587

0

2,089

4,539

560

5,107

5,899

5,404

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

SeaPort‟s passenger forecast is reasonable and takes into 

consideration both historical data prior to service dormancy 

and the very recent performance of the incumbent carrier.

Passenger Traffic – Scheduled Service

SeaPort’s projected passenger levels are higher than the very recent traffic levels at Jackson 

while operated by the current provider of EAS, however they are generally comparable to data 

reaching further back in time. 

 

12 Note that our analysis of data we utilized calendar years whereas the Department’s cited 5,252 passengers were 

on fiscal year basis (ending September 30). While this results in a slight variation in actual numbers, it does not 

diminish the underlying analysis and conclusions.

13 Note that 2011 is year to date through May 2011. On an annualized basis, this would approximate 1,250 

passengers.
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We raise this point because during communication with the EAS Division related to another 

docket Seaport Airlines was advised that the Department’s calculation of whether a proposal 

meets statutory requirements is based on actual passenger counts during the recent period and 

not a specific carrier’s forecast. If we were to submit a bid using data for the recent period while 

Jackson has been served by Pacific Wings, the level of requested subsidy would be 

substantially higher and have exceeded the statutory cap of $200 per passenger.

We believe the earlier data – particularly CY 2003 and CY 2004 – more accurately reflects 

Jackson’s ability to generate passenger traffic if it is provided with reliable and reasonably 

priced air transportation by a carrier that works in partnership with the community.

Service Proposal Detail & Subsidy Request

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

summarized on the tables on the following pages. While the indicated period is for two years, 

we fully understand that the community’s EAS status may be affected by recent amendments to 

the EAS program and pending rulemaking thereby impacting the term of any new contract to 

provide service at McKellar-Sipes Regional Airport. 

For each option the requested level of subsidy declines during the second year as we are

confident that, similar to our experience in Arkansas, consumer confidence in and 

enplanements at McKellar-Sipes Regional Airport can be restored. Equally as important, the

requested annual subsidy levels for each option are compliant with the $200 per passenger limit

and below the total level of subsidy paid to the current carrier.14

SeaPort Airlines, Inc. appreciates the opportunity to submit this proposal and welcomes any 

questions from the community or the Department.

Respectfully submitted,

Timothy Sieber

Vice President – Strategy & Corporate Development

SeaPort Airlines, Inc.

 

14 $1,225,628 annually as established in Order 2009-6-17.
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Operating Projections Year 1 Year 2

Average Sector Length (sm) 71 71

Scheduled Departures 1,872 1,872

Scheduled Block Hours 1,092.0 1,092.0

Projected Completion Factor 98.0% 98.0%

Projected Completed Departures 1,835 1,835

Projected Completed Block Hours 1,070.2 1,070.2

Passenger Projections

Projected Passengers 5,107 5,618

Projected Average Fare $45.75 $46.67

Revenue Passenger Miles (RPMs) 362,597 398,857

Available Seat Miles (ASMs) 1,172,284 1,172,284

Projected Load Factor 30.9% 34.0%

Financial Projections

Revenues

Passenger Ticket Revenues $233,645 $262,150

Ancillary Revenues $5,641 $6,301

Total $239,286 $268,451

Expenses

Flight Operations $181,927 $183,961

Aircraft Ownership/Lease $164,640 $164,640

Fuel & Oil $297,611 $308,028

Traffic Servicing $113,365 $117,399

Insurance $21,403 $21,831

Maintenance $176,576 $180,108

Sub-Total - Direct $955,523 $975,967

Indirect $175,052 $161,227

Total Expenses $1,130,575 $1,137,194

Projected Operating Profit/(Loss) ($891,289) ($868,743)

Subsidy Calculations

Operating Loss $891,289 $868,743

Economic Return @ 5% $56,529 $56,860

Required Subsidy $947,818 $925,603

% Chg in Subsidy Request During Year Two -2.3%

Subsidy per Departure $516.65 $504.54

Subsidy per Passenger $185.59 $164.77

18 Weekly Roundtrips: Jackson, TN - Memphis, TN

Option #1

SeaPort Airlines, Inc.
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Operating Projections Year 1 Year 2

Average Sector Length (sm) 111 111

Scheduled Departures 1,872 1,872

Scheduled Block Hours 1,487.2 1,487.2

Projected Completion Factor 98.0% 98.0%

Projected Completed Departures 1,835 1,835

Projected Completed Block Hours 1,457.5 1,457.5

Passenger Projections

Projected Passengers 5,899 6,489

Projected Average Fare $64.62 $65.92

Revenue Passenger Miles (RPMs) 654,789 720,268

Available Seat Miles (ASMs) 1,832,725 1,832,725

Projected Load Factor 35.7% 39.3%

Financial Projections

Revenues

Passenger Ticket Revenues $381,220 $427,729

Ancillary Revenues $9,188 $10,340

Total $390,408 $438,069

Expenses

Flight Operations $247,768 $250,537

Aircraft Ownership/Lease $164,640 $164,640

Fuel & Oil $405,319 $419,505

Traffic Servicing $163,318 $169,912

Insurance $29,149 $29,732

Maintenance $240,480 $245,290

Sub-Total - Direct $1,250,674 $1,279,615

Indirect $216,099 $199,698

Total Expenses $1,466,773 $1,479,313

Projected Operating Profit/(Loss) ($1,076,365) ($1,041,244)

Subsidy Calculations

Operating Loss $1,076,365 $1,041,244

Economic Return @ 5% $73,339 $73,966

Required Subsidy $1,149,703 $1,115,210

% Chg in Subsidy Request During Year Two -3.0%

Subsidy per Departure $626.69 $607.89

Subsidy per Passenger $194.90 $171.86

SeaPort Airlines, Inc.

Option #2

6 Weekly Roundtrips: Jackson, TN - Memphis, TN

12 Weekly Roundtrips: Jackson, TN - Nashville, TN
DOT OST

-2000-7857

September 30, 2011

Page | 19

Operating Projections Year 1 Year 2

Average Sector Length (sm) 91 91

Scheduled Departures 1,872 1,872

Scheduled Block Hours 1,289.6 1,289.6

Projected Completion Factor 98.0% 98.0%

Projected Completed Departures 1,835 1,835

Projected Completed Block Hours 1,263.8 1,263.8

Passenger Projections

Projected Passengers 5,404 5,944

Projected Average Fare $57.76 $58.92

Revenue Passenger Miles (RPMs) 491,764 540,940

Available Seat Miles (ASMs) 1,502,505 1,502,505

Projected Load Factor 32.7% 36.0%

Financial Projections

Revenues

Passenger Ticket Revenues $312,148 $350,230

Ancillary Revenues $7,529 $8,428

Total $319,677 $358,658

Expenses

Flight Operations $214,847 $217,249

Aircraft Ownership/Lease $164,640 $164,640

Fuel & Oil $351,465 $363,766

Traffic Servicing $139,010 $144,402

Insurance $25,276 $25,782

Maintenance $208,528 $212,699

Sub-Total - Direct $1,103,767 $1,128,538

Indirect $185,606 $171,505

Total Expenses $1,289,373 $1,300,043

Projected Operating Profit/(Loss) ($969,696) ($941,385)

Subsidy Calculations

Operating Loss $969,696 $941,385

Economic Return @ 5% $64,469 $65,002

Required Subsidy $1,034,164 $1,006,387

% Chg in Subsidy Request During Year Two -2.7%

Subsidy per Departure $563.71 $548.57

Subsidy per Passenger $191.37 $169.30

SeaPort Airlines, Inc.

Option #3

6 Weekly Roundtrips: Jackson, TN - Nashville, TN

12 Weekly Roundtrips: Jackson, TN - Memphis, TN