Der- osr- {*\*\u - ^Zuu 

Sovereign Mr, Inc, TT JJCi "^-o^s-i^iz^ 

March 25, 2010 

Dennis J. DeVany, Chief 

EAS & Domestic Analysis Division, X-53 

Office of Aviation Analysis 

Department of Transportation 

1200 New/ Jersey Ave. SE 

Washington, DC 20590 

Re: Proposal to Provide Essential Air Service at: 

Iron Mountain/Kingsford, Michigan; 

Ironwood, Michigan/Ashland, Wisconsin; 

Manistee/Ludington, Michigan; 

Escanaba, Michigan 

DOT-OST-1999-5175 

DOT-OST-1996-1266 

DOT-OST-1996-1711 

DOT-OST-2003-15128 

Dear Mr. DeVany: 

In response to Order 2010-2-18, Sovereign Air, Inc. offers the following proposal: 

Sovereign Air, Inc. (SAI) is planning to use the King Air 350 as its primary aircraft for these Essential Air 

Service routes. It will be configured with twelve passenger seats, and will be expanded to twelve seats 

as needed. The aircraft is type certificated for up to fifteen passenger seats. 

Sovereign Air is proposing the aircraft for the exclusive use (no up-line or down-line service) of the 

proposed EAS routes. Our flights will service only the EAS city(ies) and the indicated Hub. Sovereign Air 

believes that with good schedules, proper pricing and a recovering economy, the load factors will likely 

increase in these markets. SAI will base its aircraft, crews and maintenance personnel, banking and 

purchase fuel in the EAS cities. This will help keep the EAS monies in the local communities. 

SAI will have baggage and ticket agreements with the major air carriers in Chicago, O'Hare (ORD). SAI 

will have cargo agreements for both domestic and international air freight movements. 

SAI has been HAZMAT approved and will be working in conjunction with hospitals to expedite various 

HAZMAT materials that they need to transport. 

SAI's goal is to work hand-in-hand with EAS communities to reduce the need for EAS subsidies within the 

next four to six years. 

Sovereign Air is currently in the process of acquiring its Scheduled Service Authority and anticipates 

being able to start this Essential Air Service by September 1st. 
Sovereign Air will be fully integrated into the Global Distribution System (GDS) in conjunction with 

Worldspan. SAI is not tied to just one airline, allowing Sovereign Air better visibility in the various 

reservation systems. Passengers will have a broad range of channels through which to purchase tickets, 

including all airline reservation systems and travel agencies. Customers will be able to call our 

reservation office or visit our website to book flights. Passengers can also purchase tickets and make 

reservations at our ticket counters. 

SAI's final schedules will be developed by the EAS City Airport Boards and SAI to reduce layover times in 

ORD and provide the best possible arrival and departure times for the travelling public. As such, the 

following schedules will likely be adjusted: 

Proposed Schedule Options 

ESC-ORD 4X Schedule 7 Day Week 

Depart Arrive Depart Arrive Depart Arrive 

ESC MBL MBL ORD ORD MBL 

600 700 800 

1000 1025 1030 1110 1130 1210 

1400 1425 1430 1510 1530 1610 

1700 1725 1730 1810 2000 2040 

Depart 

MBL 

1215 

1615 

2045 

Arrive 

ESC 

900 

1235 

1635 

2110 

MBL-ORD 4X Schedule 7 Day Week 

Depart Arrive Depart Arrive Depart Arrive 

MBL ORD ORD MBL MBL ESC 

600 625 630 910 

1030 1110 1130 1210 1215 1235 

1430 1510 1530 1610 1615 

1700 1740 2030 2110 

Depart Arrive 

ESC MBL 

1400 1425 

IWD-ORD 4X Schedule 7 Day Week 

Depart Arrive Depart Arrive Depart Arrive 

IWD IMT IMT ORD ORD IMT 

600 710 800 

1000 1020 1025 1125 1145 1230 

1400 1420 1425 1525 1545 1630 

1700 1815 1900 

Depart 

IMT 

1235 

1635 

Arrive 

IWD 

910 

1255 

1655 

2015 

IMT-ORD 4X Schedule 7 Day Week 

Depart Arrive Depart Arrive Depart Arrive Depart Arrive 

IMT ORD ORD IMT IMT IWD IWD IMT 

600 700 800 900 

1025 1125 1145 1230 1235 1255 1400 1420 

1425 1525 1545 1630 1635 1655 

1800 1900 1930 2030 
Sovereign Air, Inc. 

Annual Compensation Requirement for Essential Air Service for 

IWD-IMT-ORD 4rt daily 

Aircraft Type 

Available Seats Per 

Departure 

Passengers Per 

Trip 

Beechcraft 350 

12 

4.2 

Block Hours 

Departures 

5,665 

4,957 

Total Passengers 

Average Fare 

11,812 

$69.00 

Revenue Passenger Miles 

Available Seat 

Miles 

Passenger 

Revenue 

Other Rev. @ .6 of pax. Rev. 

%^ 

Total Revenue 

3,178,609 

9,146,386 

$815,028.00 

$4,890.17 

$819,918.17 

Aircraft and Hull Insurance 

Fuel and Oil 

Flying Operations 

Other Direct Costs 

Maintenance 

Total Direct Costs 

$25,000.00 

$1,062,150.00 

$260,580.80 

$536,694.55 

$173,862.15 

$2,058,287.51 

Total Indirect 

Costs $767,040.94 

Total Operating Expenses $2,825,328.45 

Operating Loss 

Profit @ 5% 

Completion Rate 

Subsidy per leg 

Load Factor 

$2,005,410.28 

$141,266.42 

Annual Compensation 

Requirement $2,146,676.70 

Monthly Compensation 

Requirement $178,889.73 

97% 

$433.06 

34.8% 
Sovereign Air, Inc. 

Annual Compensation Requirement for Essential Air Service for 

ESC-MBL-ORD 

Aircraft Type 

Available Seats Per 

Departure 

Passengers Per 

Trip 

4rt daily 

Beechcraft 350 

12 

6.8 

Block Hours 

Departures 

Total Passengers 

Average Fare 

Revenue Passenger Miles 

Available Seat 

Miles 

Passenger 

Revenue 

Other Rev. @ .6 of pax. Rev. 

_% 

Total Revenue 

Aircraft and Hull Insurance 

Fuel and Oil 

Flying Operations 

Other Direct Costs 

Maintenance 

Total Direct Costs 

2,110 

4,957 

19,251 

$41.00 

4,870,503 

8,599,166 

$789,291.00 

$4,735.75 

$794,026.75 

$25,000.00 

$1,009,042.50 

$247,551.76 

$526,121.20 

$163,430.42 

$1,971,145.89 

Total Indirect 

Costs 

Total Operating Expenses 

$1,130,040.94 

$3,101,186.83 

Operating Loss 

Profit @ 5% 

Completion Rate 

Subsidy per leg 

Load Factor 

$2,307,160.08 

$155,059.34 

Annual Compensation 

Requirement $2,462,219.42 

Monthly Compensation 

Requirement $205,184.95 

97% 

$496.72 

56.6% 
Customer safety and service are Priority One with SAI. Sovereign Air looks forward to providing 

Essential Air Service to the subject cities. 

Sincerely, 

Jon Payne, CFO 

Sovereign Air, Inc.