### & c 

### * ^ ."•••iRPORWION ^ • '•::-:^TCFEBMlOr; 3 ALLIANC E & CHAMBE R B E PAR T O F SOMETHIN G GREATE R ^ „ r- - . ,,~ i TH E CEDA R VALLE Y O F IOWA -^n' ' "'O V 2 ^ C D !.i : U J Novembe r

21 , 201 1 Mayo r Buc k Clar k City o f Waterlo o Waterloo , l A 5070 1 an d Mr . Denni s DeVan y Chief , Essentia l Ai r

Servic e Divisio n Offic e o f Aviatio n Analysi s U S Dep t o f Transportatio n 120 0 Ne w Jerse y Avenue , S E Washington , D C 2059 0 Dea r Mayo r Clar k an d Mr . DeVany : Backgroun d Recently , Mr . DeVan y notifie d Mayo r Clar k tha t U S Do T Essentia l Ai r

Servic e Divisio n (U S DoT ) woul d mak e aselectio n o f a n ai r carrie r t o delive r

commercia l passenge r

servic e t o Waterlo o Regiona l Airport . Mayo r Clar k informe d th e Greate r

Cedar Valle y Allianc e & Chambe r o f thi s upcomin g decision . H e als o informe d u s tha t Mr . DeVan y an d U S Do T ha d solicite d th e Mayor' s inpu t o n th e decision . Th e Greate r Cedar Valley Allianc e & Chambe r offere d t o solici t

th e view s an d preference s o f th e busines s communit y o f th e are at o ad d t o th e bas e o f informatio n use d t o mak e thi s decision . Approac h Th e Greate r

Cedar Valle y Allianc e & Chambe r represent s ove r

1,000 businesse s o f

all size s an d majo r institution s whic h emplo y ove r 50,00 0 people . Throug h variou s program s an d partne r organizations , w e delive r economi c developmen t

service s i n a n economi c regio n i n Northeas t Iow awit h apopulatio n o f approximatel y 175,00 0 people . Thi s are ai s centere d o n th e Waterloo

Cedar Fall s Metr o area . Majo r

economi c elements an d employer s i n th e regio n include : Joh n Deer e wit h ove r

5,50 0 professiona l design , technical , an d productio n employee s i n si x separat e facilities ; PFG/BEST ; Dens o hitemational ; TEREX ; ConAgra ; Nestle ; Targe t Distribution ; Tyson ; Principa l Financia l Group ; Veridia n Credi t Union ; Isl e Corp ; VGM ; th e Universit y o f Norther n Iow aan d four

othe r highe r educatio n institutions ; four majo r hospital s an d th e larges t privat e practic e grou p betwee n th e May o Clini c an d Universit y o f Iow aHospitals ; an d many , man y others . I t

i s a n economi c are atha t

i s engage d i n globa l business . Th e Cedar

Valley o f

Iow aeconomi c are arelie s o n th e Waterlo o Regiona l Airpor t fo r commercia l passenge r

an d freigh t

services . Th e decisio n o f EAS/U S Do T i s a n importan t on e an d ha s significan t

economi c impac t

o n thi s loca l economy .

1 0 Wes t Fourt h Street , Suit e 310 , Waterloo , l A 5070 1 • Ph : (319 ) 232-115 6 • Fax : (319 ) 233-458 0 1 0 Mai n Street , Ceda rFalls , l A 5061 3 • Ph: (319 ) 266-359 3 • Fax : (319 ) 277-432 5 www.cedarvalleyalliance.co m • www.greatercedarvalleychamber.co mEA S a

t Waterlo o Novembe r 21,201 1 Pag e Tw o T o gaug e th e preferenc e of

ou r investor s fo

r eithe r th e Delta/Sk

y Wes t o r American/America

n Eagl e servic e an

d relativ e destination s - Miimeapoli s o r Chicago , w e implemente d athree-ste p process . Thi s proces s included : • All economi c developmen t investor s in th e Allianc e & Chambe r and al l member s of

th e board s of ou r affiliated an

d partne r organization s wer

e invite d to ameetin g o n Novembe r 8 a t th e Fiv e Sulliva

n Brother s Conventio n Cente r in Waterloo . Thos e attendin g hear d a presentatio n b y arepresentativ e of America n Airlines , followed b y ahighly detaile d briefing o n America

n and Deltaairline s an

d th e relativ e merit s of

th e competin g EA S bid s presente d by th e Waterlo o Regiona l Airport' s consultant . (Deltawa s invite d to discus s their

servic e an d bid , but decline d th e invitation. ) A

t th e conclusio n of

tha t meeting , thos e attendin g wer e asked t o submi

t apreferenc e ballot , whic h als o containe d a solicitatio n of

comments . • A s afollo w up , on Novembe r 10 , thos e wh

o wer e invite d but

did no t atten d th e Novembe r 8 meeting wer

e sen t copie s of th e presentation s b y email , alon g wit h th e preferenc e ballot . Th

e ballo t containe d spac e fo

r comment , an

d of course , th e recipient s coul d ad d commen t by retur n email . • Additionally , o n Novembe r 14 , al l investor s of

th e Allianc e & Chambe

r wer e sen t a n online preferenc e ballo t

wit h spac e fo r comment . Th e result s of

th e thre e request s ar

e summarized on th e attache d summar y table . Th

e verbati m comment s of

th e businesse s respondin g ar e included , alon g wit

h othe r unsolicite d email correspondenc e tha

t I hav e receive d sinc e th e issu e arose . Commen t an d Preferenc e Th e Greate r Ceda r Valle y Allianc e & Chambe

r i s gratefiil t o Mayo

r Clar k an d th e Cit y Counci l fo r a n opportunit

y to ad d th e voic e of

th e regiona

l busines s communit

y to officia l Cit y governmen

t recommendation , an

d t o th e Waterlo o Airpor

t Boar d fo r sharin g it s expertis e through it s consultant , Mik e Bown , an

d Airpor t Manage r Bra d Hagen . W

e ar e als o gratefu

l fo r th e thoughtfu

l commen t of ou r investor s an

d their clea r commitmen

t to commercia

l passenge r ai r servic e a t th e Waterlo o Regiona

l Airport . Ther e ar e issue s mos t

o r al l agre e on : • Ai r servic e fi-omWaterlo o (ALO ) i s essentia l to th e healt

h of ou r regiona l economi c base . • Jet servic e i s essential . • Price s to/fi-o

mAL O mus t b e competitiv e an

d they hav e been creepin g u p sinc e Delta assumed servic e afte

r th e merge r wit h Northwest . • A n estimate d $500,00 0 differenc e in bid s to U S DoT/EA S fo r serving AL

O i s compelling . • Staying wit

h Deltawil l no t

chang e usag e patterns , unles s price s ris e whic h wil l caus e curren t user s to driv e t

o MSP , CID , or

DS M regardles s of

carrier . A chang e t o America nEA S a

t Waterlo o Novembe r 21,201 1 Pag e Thre e

ma y caus e som

e ALO user s t o driv e t o MS P o r CID , whil e i f

America n offers O'Hare connection s som

e flyers currently usin g CI

D and DS M woul d commenc e usin g ALO . Based o n th e preferenc e comment s an d ballots , ther

e i s clearly astrong affiliation to Deltabased on : • Frequen

t usag e an d earne d mile s an

d privilege s associate d wit

h Delta' s rewar

d system . • Establishe d connectio n habit s in Minneapolis , based on Deltaan d previou s Northwes t servic e to their

Miimeapoli s hub . • Eas e of

navigatio n withi n th e MS P terminal s fo r coimections . • Eas e of

acces s to MS P fo

r trip continuatio n i f

th e Waterlo o connectio n i s unavailable . • Thos e going wes t

don' t wan t to g o eas t t o O'Hare first. Ther e i s als o astrong statemen

t of preferenc e among som

e to chang e to American : • Coimection s fro

mO'Hare to domesti c an

d internationa

l destination s ar

e mor e fi-equent. • Mor e see Chicag o a s afina

l destinatio n fo

r busines s travel . • Becaus e of

American' s emphasi s on O'Hare a s ahub , ther e i s greate r opportunit

y t o reach afinal destinatio n wit h one connectio n (ALO t o ORD ) rathe r tha n tw o (i.e . AL

O t o MS P to DTW

) • Mor e see Chicag o a s offerin

g opportunitie s to ge

t hom e faste r shoul d connection s to ALO fai l (i.e . ther e i s ahop t

o CI D an d a1 hou r driv e home , v s a3 hou

r driv e hom

e fro m MSP) Ou r larges t user s ar e split : som

e prefe r to sta y wit h Delta/MS P fo

r th e reason s state d above , whil e other s see ver

y significan

t opportunit

y to gro w ALO utilizatio n i f America n t o O'Hare servic e i s implemented , als o fo r reason s state d above . A n analysi s of

th e busines s show : • America

n i s attracte d t o EA S citie s a s abusines s model an d i s expandin g thi s business , whil e Deltai s clearly exitin g small markets . • Deltai s astronge

r airline . Th

e forecas t bankruptc y of

America n i s troublesome , though understoo d to b e contemplate d t o realig n operationa

l costs , pe r industr y standar d practice . • Deltaha s astrong hu

b system , though American' s hub s see mto b e mor

e accommodating to th e destination s use d by passenger s originatin g fro mALO . In ra w numbers , presente d i n ou r thre e solicitation s o f

preference , and unsolicite d email , America n Airline s i s preferred .EA S a

t Waterlo o Novembe r 21,201 1 Pag e Fou r To us , i t i s compellin g that : • Ther e i s asignifican

t differenc e in cos t

of servic e favoring America

n Airlines . • Th e Airport' s lon g ter

mai r servic e consultan

t ha s expresse d apreferenc e fo r America n Airline s service . • America

n Airline s appear s to b e serving othe r Midwester

n citie s quit

e successfull

y wit h EAS , an d indeed ar

e expanding th e numbe

r of flights an d destination s in severa

l o f thos e markets . Base d o n availabl e informatio n an d th e inpu t o f ou r investors , wit h th e goa l bein g th e lon g ter mcontinuatio n o f commercia l ai r

servic e a t

th e Waterlo o Regiona l Airport , i t

i s ou r recommendatio n tha t th e Cit y o f

Waterlo o support , an d U S DoT/EA S awar d th e bi d t o America n Airlines . Sincerely , Steve n J . Dust , CEc

D Chie f Executiv e Office

r cc : Bra

d Hagen , Manager , AL

O Greate r Ceda r Valle y Allianc e & Chambe

r Boar d of Director s Greate r Ceda r Valle y Allianc e & Chambe

r Managemen

t Tea m