# Swanson, Brian (OST) 

# bOT"-

# Ot>T·**~'l~~-** 

# t1-U 

# par:asr:1oo -IS1-I5

From: Sent: 

## To: Subject: Attachments: 

## Devany, Dennis (OST) Friday, February 10, 2012 9:50 AM Swanson, Brian (OST) FW: Alternate EAS at Manistee (Budgets) Combined EMB120 Winter-Summer.xlsx; Jetstream 19seat.xls

From: 

## checktsa@gmail.com [mailto:checktsa@gmail.com] On BehalfOf

## Jim Gallagher Sent: 

## Friday, February 10, 2012 9:37AM 

## To: Devany, Dennis (OST); Manistee Airport; MHoyle@businessaircraftgroup.com Subject: 

## Alternate EAS at Manistee (Budgets)



# Dennis and Barry,

Wehave worked through budgets trying to find solutions to loweringthe costs associated with the Alternate EAS proposal to Manistee, Michiganfor service to Chicago, Illinois. Unfortunately, the original proposal utilizing a dedicatedEMB 120 aircraft with 30 seats will have to remain the same; as we have already squeezed as much out ofthat proposal as possible in ordertojustifythe start up ofthis program. The ultimate problem stems from aircraft monthly utilization and the fact that we need to maintain a certain level (minimum) flight hours in orderto dedicate full resources in thatregion. Ofcourse we anticipate that these costs would certainlybecome reduced if
we were to have multiple awards servingthe same region. Howeverit is ourdesire to focus intentlyonthe Manistee project since it is the first ofits kind in orderto truly put forth ourbest effort in continuingthe success that was achieved with Frontier. Coming offthe heels ofa EMB 135 regionaljetaveraging 20+passengers per flight is exactly why webelieve we needto commence service with equipmentthat closely mirrors the airliner servicethat the communityhas recentlybecome accustomedto andby way of enplanenments indicates it supports.

We are also willing to propose the below alternatives to accommodate the start up for the MBL community as soon as possible. Every daythat goes by, decreases our chances of success. The high season starts May 01 and if we are to meet this start date; we will need a fast decision from the DOT so that we can publish our schedules and fares and get to work setting up all of the logistics involved with introducing Public Charters and Charter Air Transport into the marketplace. We are unable to offer any twin turbine aircraft solutions at the current expired rate of $1,700,000 (more or less).

We offerthe following alternative proposals in addition to the original proposal submitted utilizing a year round EMS 120 aircraft: 1

## 1. $2,112,000 average subsidy per year: Commence service May01 with a 30 seat EMB120 operating 1 Ox frequencies per week; then replace the EMB120 in the Winter with a 19 seat Jet stream operating the same frequency ( 1Ox) weekly for the remainder of the 2 year contract. a. This will afford public charters time to work with the Direct Air carrier in type rating the Jetstream on certificate b. This will inaugurate service during the peak period with a more desirable aircraft to overcome some of the market education that will need to take place with the introduction to a new destination (MOW) and a new concept for creating routes that serve both O&D to Chicago, but also a creative interline solution with the Low Cost carriers of Midway, since we lack traditional interline agreement with the legacy carriers. c. It is our intention that if load factors reach levels that will supportthe EMB120 at any time during the 2 year period that we would replace the 19 seat aircraft with the 30 seat aircraft without anyfurther increase in subsidy; which really means that we are taking our own risk in utilizing the larger aircraft and it would be our first steps towards reducing subsidy rates in the future or ultimately operating without subsidy if the market can sustain itself. 2. $1,994,000 average subsidy per year: Commence service June 01 with a 19 seat Jetstream 31 operating 1 Ox frequencies per week year round
One additional item that we would consider in the Alternative proposal is that if we consistently average the projected load factors in our estimated budgets that after a certain point in time that we would permitthe airport to re-negotiate our subsidy level to reflect a reduction because of our success. While we know this is not the way that traditional EAS is monitored; we believe that this is the most fair and equitable way to gauge subsidy levels in a marketplace and put our intent in writing that after 6 months of averaging projected load factors in our proposal that it would trigger a "period of re-negotiation in rate" for the airport.
Let me know what you think. We have always been willing and able. We want to provide the BEST service available and really need an action plan if we are going to start May 01 and have the shortest hiatus in service at MBL. Thank-you for considering our proposals. Attached are the excel detailed budgets for the full annual operations with an EMB120 and also the annual19 seat budgets. Sincerely,



# JimGallagher AviationTechnologies, Inc. PublicCharters.com CheckTSA.com

201 HangarRoad Wilkes-Barre/Scranton International Airport

2

# Avoca, PA 18641 570-457-4147 Phone 570-457-4113 Fax 570-760-0880 Cell

3

### CHMTiAA.Ia

fare Range: Aircraft: Aircraft Base:

!ill!! Weeks per Month Days perWeek Depts perWeek Dept.s per Month Avg. Block per Leg Ttl Block per Month Load Factor Seats per fhght Pax perflight Avg_ Pax Fare Ttl Pax per Month

Tkket Rev Credtt Card Fee FET & 7.5% Agent Comm Ttl Op. Revenue

Direct Operating Cost ACMI Fuel Ground Deicmg Catenng Ttl DirectOp. Cost

IndirectCosts Advertmng Reservation/GDS Call Center Ttllndire«Op. Cost Ttl Op. Cost
Op.eratins: P/l and 

### -f.i:JJBLIC -.rrERS, INC



## .... s 49 00



### ......1

## s 27·30 : 149.00

# I

MBL Service to MOW EMB·I20 Seats: MBl

MBl MDW MBl MDW

Ttl Segs: lilil 4.3

14 60 0 90 0400 SO% 30 15 69.00

903

61,10000 (2,173.50) (4,130 97) (1,733 02) 53,962.51

$ 99,90000 $ 35,640.00 $ 54,481 00 $ 10,000.00**L__~** $ 101,375.50

4,515 00 6,772 50 1,00000 13,287.50 214,663.00
($160,700.49) Schedule: 2xDaily (lX DAY 6-7) Octoberthru March :11.1 r!!YJt N5AM MOW ll:OOAM MBl 1:30PM MDW**L___~gQ~fv1.** _L__**~Bl_** L

..

TIMES ARE FLEXIBLE.

WI 4.3 7 14 60 090 54 00**50'~**

30 15 69.00

903

62,100.00 (2,173.'>0) (4,230 97) (1,733 02) 53,962.51

99,90000 35,640.00 MID: 4.3

14 60 0 90 54 00 50% 30 15 69.00

903

61,100 00 (2,173 50) (4,230 97) (1,733 02) 53,962.51

99,900 00 35,640.00 HSAM 1:00PM 1:30PM**8:()()~M**

fu!! 43

14 60 0.90 54 00**50'~**

30 15 69.00

903

62,100 00 (1,173 50) (4,230.97) (1,733.02) 53,962.51

99,9GO.OO 35,640.00 Stops 0 0 0 0**~** 43

14 103 0.90 92.70 50% 30 15 69.00 1,548

106,60500 (3,731.18) (7,263.41) (1,975 02) 92,635.39

161,115.00 61,182.00 $

s $ Program Toal costs are adjustedfor Winteroptsreduced to lx Daily ACMIInd. Hotel & perdiem Destin. Ground Fee Origin Ground Fee

Destinaton Tum OriginationTurn

fuel burn/hou

I!!!! 43 6 14 103 0 90 92 70 50% 30 15 69.00 1,548

106,60500 (3,731.18) (7,163 41) (2,975.01) 92,635.39

162,225 00 61,182.00 s $

s
s
r • $ Fuel price/gallon averag, Advertising perpax {r/t Creditcardfe Travel Agent Commission) $



# . "

ill! 4.3 6 14 103 0 90 92 70**50'~**

30 15 69.00 1,548

106,60500 (3,731.18) (7,263 41) (1,975 02) 92,635.39

162,225 00 61,182 00 load Facto *Percent ofOTA Sales
A!!& 4 3 6 24 103 0.90 92 70 50%

30 15 69.00 l,S48

106,60500 (3,731.18) (7,163 41) (2,975 01) 92,635.39

162,225 00 61,18200**~**1,750.00 500 00 545 001 3 165 400 500 3.50%

!()%**SO'~** 30%

4.3

6 14 W3 0.90 92.70 50% 30 IS 69.00 1,548

10-6,605 00 (3,73118) (7,263 41) (2,975 01) 92,635.39

162,225 00 61,182 00 perturn perturn per day per day

Q>! 43 6 M W3**0~ ~ro** **50'~** 

### w**~** ROO**L~** !06,60500 (3,73118) (7,163 41) (2,975 01) 92,635.39

162,125 00 61,182 00 54,48100 $ 54,48100 $ 54,481.00 $ 67,983.00 $ 67,983.00 $ 67,983 00 $ 67,983 00 $ 67,983 00 $ 67,983.00 10,00000 $ 10,00000 $ 10,000.00 $ $ $ $ $ $ $ I 354 ?<J $ 1354 50 $ 1 35450 $ 2 322.00 $ 2 312 00 $ 2 322 00 $ 1 312 00 $ l 321 00 $ 2 312 00 $ 201,375.50 $ 201,375.50 $ 201,375.50 $ 293,712.00 $ 293,7U.OO $ 293,712.00 $ 193,712.00 $ 293,712.00 $ 293,712.00

4,515J)0 6,772 

### so 2,000 00 13,287.50 214,663.00
($160,700.49) 4,515 00 6,772so 1,00000 13,287.50 214,663.00
($160,700.49) 4,515 00 6,772.50 1,00000 13,287.50 214,663.00
($160,700.49) 7,740 00 11,610.00 2,00000 21,350.00 315,062.00

(222,426.61) 7,740 00 11,61000 1,00000 21,350.00 315,062.00

(222,426.61) 7,74000 11,61000 2,000 00 21,350.00 315,062.00

(222,426.61) 7,740 00 11,61000 1,00000 21,350.00 315,062.00

(222,426.61) 7,740 00 11,61000 2,00000 21,350.00 315,062.00

(122,426.61) 7,740 00 11,610-C}() 1,000.00 21,350.00 315,062.00

(222,426.61) • $ Catering
+ per pa Reservation cost/pa Percent ofGOS booking Operational Days Per Week call Cente Avg. Passenger Fare Deicing Seatsperflight Departures perweek (o/w) Departuresperweek (r/t) Block Hours Per Segment {avg) • $

s
<: r; $

$ $ 30 24 11 0.90 1.50 15.00 2 6 1,000.00

69.00

•rARP Comm1swn Agreements negotiated Sepeartely

!W: 4.3 7 14 60 0 90 54 00**50'~**

30 15 69.00

903

62,100.00 (1,173.50) (4,230 97) (1,733 01) 53,962.51

99,900 00 35,640 00**~** 4.3

14 60 0.90 54.00 50% 30 15 69.00

903

62,100.00 (2,173.50) (4,130 97) (1,733 02) 53,962.51

99,900 00 35,64000 Ywl1! 51.60

978

880.10

14,706

1,012,230.00

(35,418.05) (68,966.17) (18,148.28) 879,587.40

1,572,750.00 580,932.00 54,48100 $ 54,48100 $ 734,784 00 10,00000 $ 10,00000 $ 60,00000 $ I 30450 $ I 354 50 $ 12 059.00 $ 201,375.50 $ 201,375.50 $ 2,970,525.00

4,515 00 6,772.50 2,00000 13,287.50 214,663.00
($160,700.49) 4,515.00 6,772.50 2.000.00 13,287.50 214,663.00
($160,700.49) 73,530.00 110,295.00 24,000.00 207,825.00 3,178,350.00
($2.298,762.60)

### CHMTCKAUI

Fare Range: Aircraft:

Aircraft Base:



### !ttl!! Weeks perMonth Days perWeek Depts perWeek Depts per Month Avg. Block per Leg Ttl Block perMonth Load Factor Seats perflight Pax perfllght Avg. Pax Fare Ttl Pax perMonth 

### $ --·'' $ And 

## ..o£&UBLIC**~TERS,INC**
49.oo 

## I Bae-3100Jetstream 

## I ....,..1 $ Seats: 19149.00

# I

MBL Schedule: lOxflights round trip perweekaverage D!J!1 MBL MOW MBL MOW



## Mn 4.3 5 20 86 0.90 77.40 65%

19 12 69.00 

### $ 1,032 Arrll!!l, 7:25AM MOW 11:00AM MBL 1:30PM MOW 6:00PM MBL

TIMES ARE FLEXIBLE



### 8!!1 4.3 5 20 86 0.90 77.40 65%

19 12 69.00 

### $ 1,032 

## M 4.3 5 20 86 0.90 77.40 65%

19 12 69.00 

### $ 1,032 7:25AM 1:00PM 1:30PM 8:00PM



### &!.& 4.3 5 20 86 0.90 77.40 65%

19 12 69.00 

### $ 1,032 Stops 0 0 0 0



### kll. 

# I

I

.

.

'

4.3

5 20 86 0.90 77.40 65%

19 12 69.00 

### $ 1,032 

### Q&1 4.3 5 20 86 0.90 77.40 65%

19 12 69.00 

### $ 1,032 

# MBL Service to MOW

ACMI incl. Hotel & perdiem Destin. Ground Fees Origin Ground Fees

OestinatonTurns OriginationTurns

Fuel burn/hou 

### $ 

### $ $

' $ I 

### $ 

# '
:
: 1,525.00 I 450.00 545.00 2 3 110 4.00 5.00 3.50%

10% 65% Fuel price/gallon average Advertising perpax (r/t Creditcard fee Travel Agent Commission Load Factor **PercentofOTA Sale )

____ .........**~** perturn per turn per day per day *including CRS fees Catering•perpax *Reservationcost/pax PercentofGDS booking· OperationalDays PerWeek Call Center Avg. PassengerFare Deicing Seats perflight Departuresperweek(o/w)

Departuresperweek (r/t) Block Hours PerSegment(avg) 

# '
:

**TARP Commision Agreements negotiated seperately with each Travel Agency 

### li2l! 4.3 5 20 86 0.90 77.40 65%

19 12 69.00 

### $ 1,032 Dec 

### lA!J.**~** Mar 4.3

5 20 86 0.90 77.40 65%

19 12 69.00 

### $ 1,032 4.3 5 20 86 0.90 77.40 65%

19 12 69.00 

### $ 1,032 4.3 5 20 86 0.90 77.40 65%

19 12 69.00 

### $ 1,032 4.3 5 20 86 0.90 77.40 65%

19 12 69.00 

### $ 1,032 4.3 5 20 86 0.90 77.40 65%

19 12 69.00 1,032 

### $ $

$ $ 

### $ 1.50 15.00 2 5 2,000.00

69.00 5 000.00 19 20 10 0.90

YearTtl 51.60

1032

928.80

12,384

Ticket Rev. 

### $ 71,208.00 

### $ 71,208.00 

### $ 71,208.00 

### $ 71,208.00 

### $

. 71,208.00 

### $ 71,208.00 

### $ 71,208.00 

### $ 71,208.00 

### $ 71,208.00 

### $ 71,208.00 

### $ 71,208.00 

### $ 71,208.00 

### $ 854,496.00 Credit Card Fee 

### $ (2,492.28) 

### $ (2,492.28) 

### $ (2,492.28) 

### $ (2,492.28) 

### $ (2,492.28) 

### $ (2,492.28) 

### $ (2,492.28) 

### $ (2,492.28) 

### $ (2,492.28) 

### $ (2,492.28) 

### $ (2,492.28) 

### $ (2,492.28) 

### $ (29,907.36) FET &7.5% 

### $ (4,851.90) 

### $ (4,851.90) 

### $ (4,851.90) 

### $ (4,851.90) 

### $ (4,851.90) 

### $ (4,851.90) 

### $ (4,851.90) 

### $ (4,851.90) 

### $ (4,851.90) 

### $ (4,851.90) 

### $ (4,851.90) 

### $ (4,851.90) 

### $ (58,222.80) Agent Comm. 

### $ (1,987.20) 

### $ (1,987.20) 

### $ (1,987.20) 

### $ (1,987.20) 

### $ (1,987.20) 

### $ (1,987.20) 

### $ (1,987.20) 

### $ (1,987.20) 

### $ (1,987.20) 

### $ (1,987.20) 

### $ (1,987.20) 

### $ (1,987.20) 

### $ (23,846.40) Ttl Op. Revenue 

### $ 61,876.62 

### $ 61,876.62 

### $ 61,876.62 

### $ 61,876.62 

### $ 61,876.62 

### $ 61,876.62 

### $ 61,876.62 

### $ 61,876.62 

### $ 61,876.62 

### $ 61,876.62 

### $ 61,876.62 

### $ 61,876.62 

### $ 742,519.44

DirectOperatingCost ACMI 

### $ 118,035.00 

### $ 118,035.00 

### $ 118,035.00 

### $ 118,035.00 

### $ 118,035.00 

### $ 118,035.00 

### $ 118,035.00 

### $ 118,035.00 

### $ 118,035.00 

### $ 118,035.00 

### $ 118,035.00 

### $ 118,035.00 

### $ 1,416,420.00 Fuel 

### $ 34,056.00 

### $ 34,056.00 

### $ 34,056.00 

### $ 34,056.00 

### $ 34,056.00 

### $ 34,056.00 

### $ 34,056.00 

### $ 34,056.00 

### $ 34,056.00 

### $ 34,056.00 

### $ 34,056.00 

### $ 34,056.00 

### $ 408,672.00 Ground 

### $ 54,502.50 

### $ 54,502.50 

### $ 54,502.50 

### $ 54,502.50 

### $ 54,502.50 

### $ 54,502.50 

### $ 54,502.50 

### $ 54,502.50 

### $ 54,502.50 

### $ 54,502.50 

### $ 54,502.50 

### $ 54,502.50 

### $ 654,030.00 Deicing 

### $ 5,000.00 

### $ 5,000.00 

### $ 5,000.00 

### $ 5,000.00 

### $ 5,000.00 

### $ 5,000.00 

### $ 5,000.00 

### $ 5,000.00 

### $ 5,000.00 

### $ 5,000.00 

### $ 5,000.00 

### $ 5,000.00 

### $ 60,000.00 Catering 

### $ 1.548.00 

### $ 1.548.00 

### $ 1,548.00 

### $ 1.548.00 

### $ 1,548.00 

### $ 1,548.00 

### $ 1,548.00 

### $ 1.548 00 

### $ 1,548.00 

### $ 1,548.00 

### $ 1.548.00 

### $ 1,548.00 

### $ 18,576.00

Ttl Direct Op. Cost 

### $ 213,141.50 

### $ 213,141.50 

### $ 213,141.50 

### $ 213,141.50 

### $ 213,141.50 

### $ 213,141.50 

### $ 213,141.50 

### $ 213,141.50 

### $ 213,141.50 

### $ 213,141.50 

### $ 213,141.50 

### $ 213,141.50 

### $ 2,557,698.00

IndirectOperationlngCosts Advertizing 

### $ 5,160 00 

### $ 5,160.00 

### $ 5,160.00 

### $ 5,160.00 

### $ 5,160.00 

### $ 5,160.00 

### $ 5,160.00 

### $ 5,160.00 

### $ 5,160.00 

### $ 5,160.00 

### $ 5,160.00 

### $ 5,160.00 

### $ 61,920.00 Reservation/GO$ 

### $ 7,740.00 

### $ 7,740.00 

### $ 7,740.00 

### $ 7,740.00 

### $ 7,740.00 

### $ 7,740.00 

### $ 7,740.00 

### $ 7,740.00 

### $ 7,740.00 

### $ 7,740.00 

### $ 7,740.00 

### $ 7,740.00 

### $ 92,880.00 Call Center 

### $ 2,000.00 

### $ 2,000.00 

### $ 2,000.00 

### $ 2,000.00 

### $ 2,000.00 

### $ 2,000.00 

### $ 2,000.00 

### $ 2,000.00 

### $ 2,000.00 

### $ 2,000.00 

### $ 2,000.00 

### $ 2,000.00 

### $ 24,000.00 Ttl IndirectOp. Cost 

### $ 14,900.00 

### $ 14,900.00 

### $ 14,900.00 

### $ 14,900.00 

### $ 14,900.00 

### $ 14,900.00 

### $ 14,900.00 

### $ 14,900.00 

### $ 14,900.00 

### $ 14,900.00 

### $ 14,900.00 

### $ 14,900.00 

### $ 178,800.00 Ttl Op. Cost 

### $ 228,041.50 

### $ 228,041.50 

### $ 228,041.50 

### $ 228,041.50 

### $ 228,041.50 

### $ 228,041.50 

### $ 228,041.50 

### $ 228,041.50 

### $ 228,041.50 

### $ 228,041.50 

### $ 228,041.50 

### $ 228,041.50 

### $ 2,736,498.00
OperatingP 

## /l $ (166,164.88) 

### $ (166,164.88) 

### $ (166,164.88) 

### $ (166,164.88) 

### $ (166,164.88) 

### $ (166,164.88) 

### $ (166,164.88) 

### $ (166,164.88) 

### $ (166,164.88) 

### $ (166,164.88) 

### $ (166,164.88) 

### $ (166,164.88) 

### $ (1,993,978.56)