### BEFORETHE DEPARTMENT OFTRANSPORTATION WASHINGTON, D.C. ) Essential Air Service at ) 

### Ironwood, Michigan! Ashland, Wisconsin ) ManisteelLudington, Michigan ) ) 

### Under49 U.S.C. §41731 etseq. ) 

### DOT-OST-1996-1266 DOT-OST-1996-1711

GULFSTREAMINTERNATIONALAIRLINES PROPOSAL TOPROVIDE SUBSIDIZEDAIRSERICEAT IRONWOOD, MICHIGAN/ASHLAND,WISCONSINAND MAINISTEEILUDINGTON, MICHIGAN Correspondence with regard to this document should be addressed to: Mickey Bowman Vice PresidentofCorporate Development Gulfstream International Airlines 3201 Griffin Road, 4th Floor Ft. Lauderdale, FL 33312 Telephone: 270-689-2180 Fax: 270-689-2180 E-Mail: mbowman@gulfstreamair.com Gulfstream International Airlines ("Gulfstream") cordially submits its proposal to provide subsidized air service to Ironwood, MIIAshland, WI and ManisteelLudington, MI. Gulfstreamhereby offers one option for service. This option contemplates non-stop service for each city to Milwaukee, Wisconsin twice daily, each service day. In areview ofthe possible routing alternatives for these cities, Milwaukee seemed to offer the most potential for route development. Already an established Midwest Airlines hub, Milwaukee has seen a substantial build up oflow costcarriers overthe past twelve months as both Air Tran and Southwesthave made major market additions. During that same period, Midwest Airlines has been merged with Frontier and the currentessential air service is operating under a Frontier Airlines codeshare. Gulfstream would prefer to enter these markets with a codeshare relationship in place, bijt is prepared to proceed as an independent carrier. Gulfstreamhas maintained interline ticketing and baggage agreements with most legacy carriers and would operate these flights will full visibility in the Global Distribution Systems
. .It should be noted that we have begun discussions with potential partner carriers that have indicated they would be amenable to apossible codeshare assuming Gulfstream was awarded this contract. In compliance with Public Law 100-223, Gulfstreamproposes to operate these flights using Beech 1900D turboprops that are pressurized and accommodate 19 passengers to the, FAA defined, medium hub at Milwaukee, Wisconsin.

### Service Option 1 Twice daily non-stop serviceto Milwaukee, Wisconsin each service day Service Option I contemplates serving these two markets much as they are today by the incumbent carrier. The exception being the operation ofIronwood, MIIAshland, WI where the flights will be operated nonstop rather than one stop as they are today and bear the full cost associated with this 27 I mile stage. Logistically these flights will be supported by one line aircraft and one dedicated spare. Milwaukee represents a new regional operation for Gulfstream. Given this line offlight will be separated from both the Gulfstream fleet in Florida and the Gulfstream fleet in Cleveland, OR, we feel it is absolutely necessary to dedicate this additionresource to assure schedule integrity. Additionally, the remote nature ofthis operation will necessitate the establishment ofa maintenance base specifically in support ofthis line. While the resulting maintenance costs will be higher than normal on a unit basis, we believe it is necessary to provide these communities with the quality ofservice they deserve. It should also be noted that the airport costs associated with the operationofthese two service points represent some ofthe highest in the Gulfstream system. The nature ofthis bid requires Gulfstream to offer this service option as "all or nothing", needing service to both communities to make the operation economically viable.
To Summarize: 

### Market Pro osed Service Aircraft Requested Subsidy Ironwood

-Milwaukee 2 Roundtrips Manistee

-Milwaukee 2 Roundtrips B1900D B1900D

GulfstreamAirlines $3,027,038 $1,705,488

ProposedFlightSchedule Service Option 1 FROM TO DEP ARR FLT EQUIP FREQUENCY STOP STA STA TIME TIME NUM IWD MKE 835am 955am 9303 BEl Monday thru 

### Saturday 0 IWD MKE 550pm 7l0pm 9307 BEl Sunday thru

### Friday 0 MKE IWD 700am 820am 9302 BEl Monday thru 

### Saturday 0 MKE IWD 4l5pm 535pm 9306 BEl Sunday thru

### Friday 0 FROM TO DEP ARR FLT EQUIP FREQUENCY STOP STA STA TIME TIME NUM MBL MKE 645am 630am 9301 BEl Monday thru 

### Saturday 0 MBL MKE 350pm 335pm 9305 BEl Sunday thru

### Friday 0 MKE MBL l45pm 330pm 9304 BEl Monday thru 

### Saturday 0 MKE MBL 8l5pm 1000pm9308 BEl Sunday thru

### Friday 0 *Notethis schedule is forpresentationpurposes andmay notreflect the final operational scheduleGULFSTREAM INTERNATIONALAIRLINES Essential AirServiceProposal Manistee/Ludington,MI and Ironwood, MIIAshland, WI to Milwaukee, WI

Hub Served NumberofRoundtrips per Service Day OperatingStatistics Assumed Completion % Annual Adjusted BlockHours Annual AdjustedDepartures Annual Adjusted ASMs Annual RPMs ProjectedLoad Factor
Revenue Projections EnplanedPassengers Mileage Average Fare PassengerRevenue ExpenseProjections FlightOperations Ownership Maintenance (Average as Operated)

Reservations, Stations & Administration Fuel Marketing Total AnnualExpenses Projected Profit!(Loss)
Profit Element
Annual SubsidyRequired Subsidy perDeparture Subsidy perPassenger @5% Option 1 Manistee! Ludington Milwaukee 2

98% 919.80 1,226.40 2,866,105 673,056 23.5%

5,472

123 $ 69.93 $ 382,657

$138,777 $114,333 $554,751 $789,532 $386,317 $5,000 $1,988,710 ($1,606,053)

$99,435 $1,705,488 $1,390.64 $311.68 Option 1 Ironwood!

Ashland Milwaukee 2

98% 1,686.30 1,226.40 6,314,751 620,590

9.8%

2,290 271 $ 69.93 $ 160,140
$254,424 $209,610 $1,233,189 $624,937 $708,248 $5,000 $3,035,408 ($2,875,268)

$151,770 $3,027,038 $2,468.22 $1,321.85In conclusion, Gulfstream believes that this proposal will provide the communities ofIronwood, WI/Ashland, MI and ManisteelLudington, MI with superior air service. Gulfstream is an established Essential Air Service provider with carriage contracts in place at Bradford, PA; DuBois, PA; Jamestown, NY; Franklin/Oil City, PAand Parkersburg, WV. We feel the passengers will benefit from the strength of the Milwaukeehub and attraction ofnon-stop, stand up, pressurized air service. Additionally the integrity ofservice that has been a hallmark ofthe Gulfstream operation will return both dependability and reliability to the traveling public and result in increased ridership and passenger satisfaction. Respectfully Submitted: October 25,2010
Mickey Bowman Vice President ofCorporate Development Gulfstream International Airlines