### Before the United States Department of Transportation February 19, 2014

Proposal to Provide Essential Air Service at

Clovis, New Mexico

Under 49 U.S.C. 41731 et seq. DOCKET DOT-OST-1996-1902



### Proposal of SeaPort Airlines, Inc.

to Provide Essential Air Service at Clovis, New Mexico

By Order 2014-1-10, the U.S. Department of Transportation (“the Department”) requested proposals for Essential Air Service (EAS) at Clovis, New Mexico no later than February 12, 2014. SeaPort was granted an extension for response until February 19 th . Pursuant to that Order, SeaPort Airlines, Inc. respectfully submit s this timely proposal to provide subsidized EAS at Clovis, New Mexico.

This proposal provides the community of Clovis two roundtrips Sunday through Friday to Dallas Love Field with a brief stop in Abilene, TX. The requested annual subsidy level in the proposal, is $2,813,992.

Shortly after this proposal is docketed, SeaPort Airlines will contact Gene Bieker, Airport Director at Clovis to schedule a presentation to the community that explains our proposal in detail and to answer any questions. In the interim and throughout the carrier selection process, questions regarding this proposal should be directed to:

Timothy Sieber

Executive Vice President

SeaPort Airlines, Inc. 7505 NE Airport Way Portland, OR 97218 (971) 340-1716 tsieber@seaportair.comProposal of SeaPort Airlines, Inc. to provide EAS at Clovis, NM Page 2

DOT-OST-1996-1902 February 19, 2014 

# Discussion of Proposal

Company Introduction

SeaPort Airlines, Inc. is a FAA certified scheduled airline based in Portland, Oregon with over 30 years of experience in commercial aviation . In addition to Portland, the company has operational bases at Memphis, Tennessee (MEM); San Diego, California (SAN); and Juneau, Alaska (JNU).

Our 221 professionals provide service to 21 cities across nine states with a fleet of 15 aircraft. The company’s route map as of the date of this proposal is provided below:

The primary focus of SeaPort Airlines is to pr ovide affordable and reliable air service to small

and rural communities across America. Service to eight of the communities on our route map is provided under the EAS program: Athens, Georgia; Pendleton, Oregon; El Dorado, Hot Springs, and Harrison, Arkansas; Salina, Kansas; Jackson, Tennessee; and Imperial/El Centro,

California.Proposal of SeaPort Airlines, Inc. to provide EAS at Clovis, NM Page 3

DOT-OST-1996-1902 February 19, 2014 Once SeaPort Airlines is awarded an EAS contract and service is launched, we develop a partnership with each community by participating in local events, donation of tickets, on-going dialogue with airport management and community leaders, and presentations to civic clubs and other similar organizations. We also have a reputation of being responsive to community needs, affording them the opportunity to comment on schedule and fare changes before they become

effective.

Our commitment to EAS communities is demonstrated by the fact that in every “Lower 48” community that SeaPort serves in the EAS program, we have been re-selected for subsequent terms at the end of our first contract period. This includes reselection during 2012 to four-year contract renewals (rather than the standard tw o-years) at both Salina, Kansas and Pendleton, Oregon, after both communities voiced their overwhelming support for SeaPort Airlines. Similarly, we were selected for a four-year rene wal at the Arkansas communities of El Dorado, Harrison, and Hot Springs, effective November 1, 2013.

Aircraft

SeaPort Airlines’ proposal at Clovis contemplates operations with Cessna Caravans which will allow us to offer safe, comfortable, and affordable air transportation in a modern and economical

aircraft.

Manufactured in Kansas, 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 Piper Chieftain. Over 2,000 Caravans have been built logging a total of almost 15 million flight hours. The Caravan is certified for single-pilot operation, however SeaPort operates with both a Captain and First

Officer.

The large cargo pod on the Caravan allows for more baggage than can be accommodated on older piston twins (i.e., Piper Chieftain and Cessna 402) and allows us to segregate passenger baggage for security purposes. 1

1 The cargo pod on the Cessna Caravan has a maximum capacity of 111 cubic feet and 1,090 pounds. In comparison, the Piper Chieftain has a maximum capacity of 65 cubic feet and 700 pounds in its nose compartment and two wing lockers.Proposal of SeaPort Airlines, Inc. to provide EAS at Clovis, NM Page 4

DOT-OST-1996-1902 February 19, 2014 Scheduling and Hub Options

SeaPort is proposing the following service option for consideration:

✈ 12 weekly round-trips to Dallas (Love Field) with a stopover in Abilene.

An illustrative schedule pattern is provided below. Final schedules, however, would be established in consultation with the community.

Dallas Love Field is hometown to Southwest Airlines, the nation’s largest low fare airline. The map below illustrates Southwest’s nonstop serv ice from Love Field as of February 2014.



### Nonstop Flights from Dallas Love Field as February 2014

In addition to the nonstop destinations shown, Southwest Airlines has announced that, with expiration of the Wright Amendment on October 31, 2014, it will add nonstop flights from Love Field to Atlanta, Baltimore, Chicago, Denver, Fort Lauderdale, Las Vegas, Los Angeles, Nashville, New York (LaGuardia Airport), Orlando, Phoenix, San Diego, Santa Ana/Orange County, Tampa, and Washington, DC (Reagan National Airport).

While SeaPort Airlines does not have an interlin e agreement with Southwest Airlines, customers will be able to build their own “end-to-end” connecting itineraries between Southwest and Depart Arrive Frequenc y Stops Depart Arrive Frequenc y Stops

5:30am 8:30am ExSat 

### 1 9:00am 12:00pm ExSat 

### 1
1:00pm 4:00pm ExSat 

### 1 4:30pm 7:30pm ExSat 

### 1 Clovis, NM to Dallas (Love) Dallas (Love) to Clovis, NMProposal of SeaPort Airlines, Inc. to provide EAS at Clovis, NM Page 5

DOT-OST-1996-1902 February 19, 2014 SeaPort. This would be similar to the connections to/from customers at Clovis may be presently making in Denver or may have made in the past in Albuquerque.

In addition to Southwest, United Airlines and Delta Air Lines serve Dallas Love Field via their regional affiliates. SeaPort Airlines has an exis ting presence at Love Field as well, providing EAS to the Arkansas communities of Hot Springs and El Dorado. The services of carriers other than Southwest at Love Field including SeaPort are illustrated on the map below. 2

Other Carrier Service at Love Field Following Expiration of Wright Amendment on October 31, 2014

Fares & Pricing

All of SeaPort’s fares are priced on a one-way basis, including all taxes and fees, and structured

as follows:

✈ The highest price point (branded as “ FULL Flex”) provides our customers with total flexibility to change their travel plans or, if they choose, obtain a full refund without incurring a service charge.

✈ The lowest price point (branded as “ NO Flex”) targets customers who are certain about their travel plans. This fare requires an adv ance purchase of 14-days, is non-refundable, and does not permit any changes from the original booked itinerary.

2 Service illustrated reflects published schedules for Nove mber 2014 and include new service announced by Delta Air Lines to be added following expiration of The Wright Amendment on October 31, 2014.Proposal of SeaPort Airlines, Inc. to provide EAS at Clovis, NM Page 6

DOT-OST-1996-1902 February 19, 2014 ✈ In between, SeaPort offers a range of fares (“ FREE 2 Flex” and “Flex 4 FEE ”) with price points based on how much flexibility a customer has in their travel plans. Except for the two highest price points, fares are also subject to capacity controls meaning that the farther in advance a reservation is made, the more likely a customer is to get a lower

fare.

The table below summarizes the range of proposed ticket prices in each of the markets along with the rules and restrictions applicable to each price point.

Interline Connectivity & GDS Display

SeaPort Airlines tickets may be purchased by calling our toll-free reservation number, online at www.SeaPortAirlines.com, at any travel agent connected to the major global distribution systems (GDS), or all of the major online tr avel agencies and meta-searchers such as Orbitz, Travelocity, Expedia, Kayak, Hipmunk, and CheapoAir.

The company recently announced that it will migrat e to the Amadeus Altea reservation platform on March 22, 2014. With this new system, Se aPort will have unsurpassed capability comparedto any other regional airline with regard to interline ticketing, through baggage check-in, ecommerce, and Inter-Airline Thru Check-In (IATCI). Most importantly, with the new system the company will launch its first full interline agreem ent on March 22, 2014 with a major airline to be followed by a second “Big Three” carrier on May 1, 2014. The company is in discussions with two other major carriers regarding agreements for implementation later in 2014.

Subsidy Request Calculations

The following page contains the calculations to support SeaPort Airlines’ request for subsidy to provide EAS at Clovis, New Mexico.

Respectfully submitted,

Timothy Sieber

Executive Vice President SeaPort Airlines, Inc. February 19, 2014 Fare Category è
ê Summary of Fare Rules

Booking Class/Fare Basis Code YBMQ

Advance Purchase (days prior to departure) 0 3 3 21

Change Fee $0 $0 $50 Not permitted

Refundable Yes No No No

Published fares between Clovis and:
Abilene (projected avg = $59.22) $139 $89 $59 $49

Dallas Love (projected avg: = $104) $169 $109 $99 $79 Full Flex Free 2 Flex Flex 4 Fee No FlexProposal of SeaPort Airlines, Inc. to provide EAS at Clovis, NM Page 7

DOT-OST-1996-1902 February 19, 2014 Proforma Data
Operating Projections Average Sector Length (sm) 409
Scheduled Departures 1,248
Scheduled Block Hours 3,640.0

Projected Completion Factor 99.0%

Projected Completed Departures 1,236
Projected Completed Block Hours 3,603.6

Passenger Projections
Projected Passengers 4,200
Passengers per Departure 3.4

Projected Average Fare $109.00

Revenue Passenger Miles (RPMs) 1,717,800
Available Seat Miles (ASMs) 4,547,949
Projected Load Factor 37.8%

Financial Projections

Revenues Passenger Ticket Revenues CVN-DAL $457,800 Passenger Ticket Revenues ABI-DAL $320,000 Ancillary Revenues $11,445
Total $789,245

Expenses Flight Operations $353,153 Aircraft Ownership/Lease $360,000
Fuel & Oil $904,864 Sales & Marketing $25,000 Traffic Servicing $609,000
Insurance $57,658
Maintenance $648,648
Sub-Total - Direct $2,958,322
Indirect $473,332 Total Expenses $3,431,654

Projected Operating Profit/(Loss) $(2,642,409)

Subsidy Calculations Operating Loss $2,642,409
Economic Return @ 5% $171,583

Required Subsidy $2,813,992

Subsidy per Departure $2,277.58 Subsidy per Passenger $670.00
Avg. Enplanements per Operational Day 6.7 

### OST-1996-1902
Cessna Caravan, Two-Pilots 12 Weekly RTs: Clovis - Dallas (Love) One Stop ABI