BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Essential Air Service at:

Muscle Shoals, Alabama

Greenville, Mississippi

LaurellHattiesburg, Mississippi

Tupelo, Mississippi

Under 49 U.S.C. &4I 73 I et seq.

)

)

)

)

)

)

)

)

DOT-OST-2000-7856

DOT-OST-2008-0209

DOT-OST-200 1-I0685

DOT-OST-2009-0305

NOTICE OF INTENT OF SILVER AIRWAYS CORP.

TO TERMINATE SCHEDULED AIR SERVICE

Communications with respect to this document should be sent to:

Travis Christ

. Chief Commercial Officer

Silver Airways Corp.

1100 Lee Wagener Blvd., Suite 201

Ft. Lauderdale, FL 333 IS

(954) 985-1500 (Telephone)

(954) 359-2776 (Fax)

travis.christ@si1verairways.com

April 9, 2014
BEFORE THE

u.s. DEPARTMENT OJ.?TRANSPORTATION

WASHINGTON, D.C.

Essential Air Service at:

Muscle Shoals, Alabama

Greenville, Mississippi

Laurel/Hattiesburg, Mississippi

Tupelo, Mississippi

Under 49 U.S.C. 941731 et seq.

)

)

)

)

)

)

)

)

DOT-OST-2000-7856

DOT-OST-2008-0209

DOT-OST-2001-10685

DOT-OST-2009-0305

NOTICE OF INTENT OF SILVER AIRWAYS CORP.

TO TERMINATE SCHEDULED AIR SERVICE

Silver Airways Corp. ("Silver Airways"), pursuant to Part 323 of the Department's

regulations, hereby provides required 90-day notice of its intention to discontinue subsidized

scheduled air service between Atlanta, Georgia ("ATL") and each of Muscle Shoals, Alabama

("MSL"), Greenville, Mississippi ("GLH"), Laurel/Hattiesburg, Mississippi ("PIB"), and Tupelo,

Mississippi ("TUP").

Silver Airways intends to discontinue this service on July 8, 2014 or such earlier date as

permitted by the Department in any final order terminating the eligibility of any of these

communities under the essential air service ("EAS") program.

By Order 2012-5-17 (May 22, 2012), the Department selected Silver Airways to provide

subsidized EAS, under a two-year contract, at MSL, GLH, PIB, and TUP. Unfortunately, for the

reasons set forth herein, Silver Airways is no longer able to provide subsidized service to these

communities.

First, the Federal Aviation Administration's ("FAA") new flight and duty limitation and

rest rules have had a direct and sustained impact on Silver Airways' capability to maintain

- 1 -
Silver Airways Corp.

Notice ofintent to Terminate Scheduled Air Service

service at the communities which are the subject of this notice. IIn particular, the new pilot duty

and rest requirements have increased pilot hiring needs among all carriers, contributing to an

acute industry pilot shortage that has disproportionately impacted regional carriers. 2

Second, implementation of new FAA air transport pilot ("ATP") I,500 hour requirements

for all new hire First Officers has prevented Part 121 carriers, especially regional airlines, from

backfilling these shortages and addressing hiring requirements due to a scarcity of qualified and

current ATP certified pilots. Indeed, and as the Department is aware, one large regional carrier

announced plans earlier this year to remove a significant number of its aircraft from revenue

service due to the cascading effect of the pilot shortage. 3 Additionally, despite finding mixed

evidence regarding how long the current pilot shortage will last, the Government Accountability

Office ("GAO") recently reported:

As airlines have recently started hiring, nearly all of the regional airlines that GAO

interviewed reported difficulties finding sufficient numbers of qualified entry-level first

officers. However, mainline airlines, because they hire from the ranks of experienced

pilots, have not reported similar concerns, although some mainline airlines expressed

concerns that entry-level hiring problems could affect their regional airline partners'

ability to provide service to some locations.4

Not surprisingly, Silver Airways has been impacted by this rapidly changing industry landscape.

1 See U USA Today, "Cockpit Crisis: Regional Airlines Struggle to Hire Pilots," Feb. 28, 2014, available at

http://www.usaloday.com/story/money/business/20 14/02/28/gao-pi 101-shortage-airlines-col gan-crash/5 894307/.

2 See U Susan Carey and Jack Nicas, "Airline-Pilot Shortage Hits Ahead of Schedule," Wall Street Journal, Feb.

4,2014 (reporting that regional operators "have so far been affected the most" by the industry pilot shortage) and

"What Can New Pilots Make? Near Minimum Wage," Wall Street Journal, Feb. 11,2014 (reporting that the "pilot

shortage is being aggravated by rising demand" and profiling efforts by Silver Airways to boost wages and

provide bonuses in order to retain qualified pilots, in addition to reducing flighl schedules for Ihe first quarter of

2014).

, Dallas Morning News, "Republic Airways to Ground Some Regional Jets Because of Pilot Shortage," Feb. 11,

2014, available at hltp://www.dallasnews.comlbusiness/airline-industry/20140211-republic-airways-to-groundsome-regional-jets-because-of-pilot-shortage.ece.

4 GAO-14-232, Report to Congressional Reguesters, "Aviation Workforce: Current and Future Availability of

Airline Pilots," Feb. 28, 2014, available at hltp://www.gao.gov/assets/670/661243.pdf.

- 2 -
Silver Airways Corp.

Notice of Intent to Terminate Scheduled Air Service

,

Third, traffic results for a number of EAS communities served from ATL-where Silver

Airways' local and connecting traffic is limited due to the absence of a codeshare arrangement or

a frequent flyer partnership with a large network carrier-have fallen significantly short of Silver

Airways' original forecasts,Sto the point where it is simply uneconomical for the carrier to

continue to provide such services. Furthermore, Silver Airways reasonably anticipates that, upon

the Department's completed review of average enplanements and per-passenger subsidies for

communities served under EAS subsidy contracts during the .fiscal year ended September 30,

2013, certain of the cities which are the subject of this notice will no longer qualify under 49

U.S.C. S 41713 for continued participation in the EAS program, and EAS subsidies for those

airports will be terminated.

Thus, given the impact of new Federal regulatory requirements, the recent and acute

nationwide regional pilot shortage, lower than required traffic at communities served from ATL,

and the expectation that some of these cities will no longer be eligible for EAS subsidy contracts

in the future, it is no longer possible for Silver Airways to continue operating in these markets.

The arrival and departure times of the discontinued flights covered by this notice of intent

to terminate scheduled services are as follows:

FROM TO DEP ARR FLT EQP FREQ STP FROM TO DEP ARR .FLT. EQP FREQ STP

STA STA TIME TIME NUM STA STA TIME TIME NUM

Atlanta. Greenville, MS

ATL GLH 10:15 12:21 3619 SF3 X7 GLH ATL 06:00 09:45 3618 SF3 X7

ATL GLH 16:00 17:56 3621 SF3 X6 GLH ATL 12:50 16:31 3620 SF3 X6

Atlanta - Laurel I Hattiesburg, MS

ATL PIB 15:43 16:34 3617 SF3 X67 0 PIS ATL 05:45 08:29 3615 SF3 X67 0

ATL PIB 17:15 18:10 .3617 SF3 7 0 PIB ATL 10:00 12:43 3616 SF3 67 0

ATL PIB 19:55 20:46 3617 SF3 6 0 PIB ATL 16:54. 19:37 3617 SF3 X67 0

ATL PIS 21:35 22:28 3628 SF3 X67 0

5 Silver Airways' enplanements at A TL have been 47% lower than its initial forecast.

- 3 -
Silver Airways Corp.

Notice ofIntent to Terminate Scheduled Air Service

Atlanta - Muscle Shoals. AL

ATL MSL 09:38 09:58 3633 SF3 X67 0 MSL ATL 10:30 12:44 3625 SF3 X67 0

ATL MSL 13:15 13:32 3633 SF3 67 0 MSL ATL 13:54 16:10 3625 SF3 67 0

ATL MSL 16:53 17:16 3626 SF3 X67 0 MSL ATL 17:48 20:04 3627 SF3 X67 0

Atlanta - Tupelo, MS

ATL TUP 10:15 11:01 3619 SF3 X7 0 TUP ATL 07:20 09:45 3618 SF3 X7 0

ATL TUP 16:00 16:39 3621 SF3 X6 0 TUP ATL 14:04 16:31 3620 SF3 X6 0

The discontinuation of Silver Airways' scheduled air services at the communities noted

above will reduce air transportation at each affected airport to a level below the EAS

determination set forth in Order 2012-5-17 because, at present, none of the points which are

covered by this notice of intent receive scheduled air service from any other certificated air

carrier. Prior to ending its scheduled air services at these communities, Silver Airways will

contact all passengers holding reservations on discontinued flights to notify them of the schedule

changes and assist them in arranging alternate transportation or provide them with a refund of

their ticket price, without penalty, if requested.

Any objections to the notice provided herein must be filed within twenty (20) days from

the date of this filing, in accordance with 14 C.F.R. SS 323.9 and 323.10. Silver Airways will

make all required notifications as outlined in 14 C.F.R. S323.7.

- 4-
Silver Airways Corp.

Notice of Intent to Terminate Scheduled Air Service

Respectfully submitted,'

Travis Christ

Chief Commercial Officer

Silver Airways Corp.

1100 Lee Wagener Blvd., Suite 201

Ft. Lauderdale, FL 33315

(954) 985-1500 (Telephone)

(954) 359-2776 (Fax)

travis.christ@silverairways.com

Dated: April 9, 2014

- 5 -
Silver Airways Corp.

Notice ofIntent to Terminate Scheduled Air Service

CERTIFICATE OF SERVICE

I,James Kogutek, hereby certify that I have this 9th day of April 2014, caused the foregoing

Notice to be served upon those persons listed below, in accordance with 14 C.F.R. 9323.4(a)(7).

Dennis DeVany

Kevin Schlemmer

EAS Program

u.S. Department of Transportation

1200 New Jersey Ave., S.E.

Washington, D.C. 20590

dennis.devany@dot.gov

kevin.schlemmer@dot.gov

FAA Flight Standards District Office

1500 Urban Center Drive

Suite 250

Vestavia Hills, AL 35242

FAA Flight Standards District Office

100 West Cross Street

Suite C

Jackson, Mississippi 39208

John Eagerton, Chief

Aeronautics Bureau

Alabama Department of Transportation

1409 Coliseum Boulevard

Montgomery, Alabama 361 10

Thomas M. Booth, Jr., Director

Aeronautics Division

Mississippi Department of Transportation

40 I North West Street

Jackson, MS 39201

Mayor David H. Bradford

City Hall

2010 E. Avalon Avenue

Muscle Shoals, Alabama 35661

Mayor Johnny L. DuPree, Ph.D.

200 Forrest St.

Hattiesburg, MS 39401

Mayor John H. Cox, III

City of Greenville

340 Main Street

P.O. Box 897

Greenville, MS 38701

Mayor Johnny Magee

City Hall

401 N. 5th Ave

Laurel, MS 39440

Mayor Jason Shelton

7I East Troy St.

Tupelo, MS 38804

Barry Griffith, A.A.E., Director

Northwest Alabama Regional Airport

1729 T. Ed Campbell Drive, Suite A

Muscle Shoals, AL 35661

Draylan Gant, Director

Greenville Mid-Delta Airport

166 5th St.

Greenville, MS 38703

Joshua Abramson, Executive Director

Tupelo Regional Airport

2704 W Jackson St

Tupelo, MS 38801

Tom Heanue, Executive Director

Hattiesburg - Laurel Regional Airport

1002 Terminal Dr.

Moselle, MS 39459

James Kogutek