### BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

__________________________________________ )

Essential Air Service at )

)



### Bradford, Pennsylvania ) OST

- 2003

- 14528

Dubois, Pennsylvania ) OST

- 2004

- 17617

Fran klin /Oil City , Pennsylvania ) OST

- 1997

- 2523

Jamestown, New York ) OST

- 2003

- 14950

Parkersburg, West Virginia ) OST

- 2005

- 20734

)

Under 49 U.S.C. §41731 et seq. )

__________________________________________

SUN AIR INTERNATIONAL P ROPOSAL

TO PROVIDE S UBSIDIZED ESSENTIAL AIR SERICE

By Order 2014

- 3

- 12 , the Department requested proposals from carriers interested in providing

Essential Air Service to the communities of Bradford, Dubois, and Franklin /Oil City , PA as well

as Jamestown, NY and Parkersburg, WV . Pursuant to that order, Sun Air Express, LLC . (“Sun

Air”) cordially submits this proposal to provide subsidize d air service to those communities

.

Correspondence with regard to this document should be addressed to:

David Hackett

Chief Executive Officer

Sun Air Express, LLC

. d / b / a Sun Air International

3201 Griffin Road, Suite 202

Ft. Lauderdale, FL 33312

Telephone: 954

- 660

- 9865

Fax: 954

- 894

- 0367

E

- Mail: dhackett @gosunair.com



## Bid Summary

Sun Air hereby offers proposal s to provide serv ice to the communities of Bradford, Dubois,

Franklin, Jamestown and Parkersburg from Pittsburgh International Airport.

Sun Air proposes to operate high frequency, low fare service to Pittsburgh u sing 8

- passenger

Piper Chieftain aircraft. Sun Air’s management believes that this model is uniquely suited to

restoring passenger traffic at these airports after years of decline. Convenient flights times and

low local fares can offer a superior alterna tive to low

- frequency service via larger aircraft undertraditional code

- share arrangements. Capacity is restricted to 8 passengers instead of the

traditional 9 seats due to the airline’s policy of including First Officers on its’ scheduled flights.

Sun A ir is prepared to make substantial investment s , both operationally as well as in the sales and

marketing area, to aid the communities in recover ing their air passenger demand potential. Sun

Air’s management believes strongly that the combination of afford able fares, more frequent

flights and consistently reliable operations are critical ingredients to providing the air service that

these communities need.

Sun Air’s operating plans are based upon having multiple back

- up aircraft and an ample

availability o f reserve flight crews. Since Sun Air’s current management took over operations

late last year, the airline’s operational performance has ranked among the best in the airline

industry. F lights in the Hagerstown, MD and Lancaster, PA communities served fr om IAD have

not had a single controllable flight cancellation so far in 2014.

Sun Air’s proposal requires that the communities of Bradford and Jamestown be treated as

inseparable

. Similarly, Sun Air’s proposal to provide service to Franklin/Oil City i s contingent

upon its’ proposal for Bradford and Jamestown being accepted.

All of Sun Air’s proposals are for a four

- year period , which the company believes is necessary

relative to the size of its’ planned investment in these communities.

Flights will be displayed in all the major travel agent systems, and also available for booking on

the company’s web site. Interline connections are available with most U.S. major airlines via Sun

Air’s contracted distribution capabilities.

The respective subsidy a mounts for each city pair are listed in Schedule 1 included herein.



## EAS Eligibility Discussion

All of the communities covered under order 2014

- 3

- 12 have seen significant declines in

passenger volumes over the past decade. Several of the communities are not currently meeting

the eligibility requirements of EAS in terms of the 10

- enplanement per day rule or the $200 per

passenger cap.

In almost every case, the annual enplanements in these communities have dropped by more than

50%, and in some cases sub stantially more than 50%. Given the clear evidence that the airports

have had more than sufficient enplanements to meet the EAS eligibility requirement, Sun Air is

prepared to work aggressively with t he communities to re cover their lost activity

.

While ther e are varied reasons for the enplanement declines , the driving factors include :

 Higher fares

 Inadequate local marketing

 The introduction of “one

- stop” service vs non

- stop

 Insufficient frequency of service and

 C onsistently poor reliability by the ope rating carrier.

The U.S. regional airline industry has experienced a significant increase in the average size of

aircraft operated , which has left smaller communities with fewer choices and fewer flights.

Additionally, those few remaining regional airlin es that operate under traditional code

- share

arrangements with major U.S. carriers are often subject to forced cancellations in times of

inclement weather, when they would otherwise be able to operate. To the extent weather limitsgate access at the large hubs, the major carriers will dictate that the regional airlines operating

small aircraft be cancelled first. And thus a self

- perpetuating cycle results: regional airline code

share flights are the first to be cancelled, and the customers quickly learn that these small

communities cannot be relied upon for consistent service, causing lower passenger enplanements

. Small communities need access to reliable air service. It is a crucial component of their

economic development initiatives.

M arketing resour ces earmarked for the new routes by Sun Air are substantially above those

historically spent. Sun Air will be actively involved with the local communities (including on the

PI T side) and has already identified co

- op marketing funds to support the initiati ves. While it

may take some time for the communities to see the major reversal of enplanement trends, the

need is clearly there and the Department should support efforts to achieve those important goals.

The Pennsylvania Air Service Committee recently contracted for one of the country’s leading

aviation consulting firms to complete a comprehensive study of whether regional service into and

out of PIT would be viable, referred to as the “PIT Connector” project. The enplanement

forecasts incorporated in that study are generally in line, and in some cases greater than, the levels

projected by Sun Air, without taking into consideration our plans for higher frequency than the

study envisioned. Discussions with the local communities have confirmed there is significant

demand for re

- establishing links to PIT, even in light of the elimination of USAirways’ former

hub, due to the convenience, pricing and reliability improvement available to the communities.



## Service Proposal

Sun Air’s proposed weekly frequencie s are shown below. Each community would have at least

one overnight aircraft to enable an early morning departure and evening arrival. Flight schedules

throughout the rest of the day would be spread out, and would be finalized in cooperation with the

re spective community. None of the markets envision one

- stop or through flights

... all are nonstop.

Proposed Flight Freq uencies, Round Trip to and from Pittsburgh International Airport:

Bradford: 24 Weekly round trips, with four during the weekdays and two each weekend day.

Dubois: 36 Weekly round trips, with six during the weekdays and three each weekend day.

Franklin: 19 Weekly round trips, with three during the weekdays and two each weekend day.

Jamestown: 24 Weekly round trips, with four during the weekdays and two each weekend day.

Parkersburg: 36 Weekly round trips, with six during the weekdays and three each weekend day.

Local fares would be set for effectiveness of “add

- on” prices to flights from PIT, generally in the

$29 to $59 range each way. These fares would allow all PIT Connector flights to be priced very

attractively to the passengers, tak ing advantage of low fares in PIT relative to other regional

higher

- cost hubs. Additionally, the low local fares increase the choices available regarding which

airline they connect with in PIT vs the traditional code

- share model of single

- airline itinerar ies.

Interline connections are available through major travel systems, including the ability for

through

- checking of baggage. Sun Air is in the process of installing enhanced baggage storage

features on its aircraft which will substantially improve its c apacity for checked baggage handling

that meets all relevant TSA requirements. Previously, the company’s aircraft have had

limitations on baggage capacity, particularly with respect to large hard

- sided bags that did not fit

in the existing storage facilit ies.

### About Sun Air International

Sun Air Express, LLC d / b / a Sun Air International is a Fort Lauderdale, FL based commuter air

carrier currently serving markets in Pennsylvania, Virginia, Maryland and Texas.

The airline has operated charters and limited scheduled service within Florida and the Bahamas

for a number of years. New management was brought in near the end of 2013, and since that

time has focused on improving operations and initiating a range of marketing activities.

Operational improvements at the airline have been significant. For the Year to Date period, Sun

Air is operating at 100% controllable completion factor (percentage of scheduled flights that are

completed, excluding weather) in its northern operations and over 98% in Texas.

## S CHEDULE 1

Annual Projected Operations

Inseparable Inseparable

BFD

- PIT JHW

- PIT PKB

- PIT FKL

- PIT DUJ

- PIT

Passenger Revenue $439,021 $470,950 $658,532 $292,843 $ 662,329

Flight Operations 849,780 869,780 1,135,873 528,176 1,262,171

Maintenance 537,032 597,032 693,845 399,128 707,048

Sales & Service 672,518 708 ,934 907,609 464,678 907,374

Aircraft Ownership 111,000 111,000 222,000 111,000 222,000

Other Expenses 128,000 153,0 00 280,000 150,000 280,000

Total Operating

Costs 2,298,330 2,439,746 3,239,327 1,652,982 3,378,593

Operating

Profit/(Loss) $(1,859,309) $ ( 1,968,79 6) $ ( 2,580,795) $ (1,360,139) $ (2,716,264)

Profit Element (5%) (114,917) (121,987) (161,966) (82,649) (168,930)

Subsidy Required $(1,974,226) $(2,090,783) $(2,742,761) $(1,442,788) $ (2,885,194)

ASMs 2,394,662 2,433,600 2,978,726 986,419 3,504,384

RPMs 1,317,064 1,435,824 1,638,300 493,210 1,892,367

Load Factor 55.0% 59.0% 55.0% 50.0% 54.0%

Block Hours 2,312 2,312 2,920 1,349 3,468

Annual Departures 2,434 2,434 3,650 1,927 3,650

Available Seats 19,469 19,469 29,203 15,413 29,203

Enplaned Passengers 10,708 11,487 16,062 7,706 15,770

Average Segment Fare $41 $41 $41 $ 38 $42In conclusion, Sun Air believes that its proposal will provide excellent lev e ls of serv ice to the

communities

, and ensure s that they have proper access to the national air transportation network,

offer ing cost

- effective options that meet the requirements of the Essential Air Service Program.

Respectfully Submitted: April 17, 2014

_______ _______________ David F. Hackett

C hief Executive

Sun Air Express, LLC