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### H . C O X 

### III Mayo r C I TY C O U N C IL Tommy L . Ben s on, III , Ward 1 Lo i s H aw k ins, Ward 2 Carolyn Weathers , Ward 3 Betty 

### J . Watkin s, Ward 4 Ann Hollowell , Ward 5 Errick D. S immons , Ward 6 P O . Box 897 0 340 Main St e Greenville, Nli ssi s sippi 387 0 1 0 Ielephcne : 6 62-3 7 8
- 1 5 0 1 o Facsimile : 6 62
- 37 8
- 0276 0 Email; johncox@greenl'illems . org 

### July 7, 2014
Mr
. Michael Martin United States Department of Transportation Office of Aviation Analysis 1200 New Jersey Avenue SE Room W86-472 Washington D.C
. 20590 J ) 

### Re : DOT-OST-2008-0209 Dear Mr. Martin: I write this letter in my capacity of V i ce Mayor, acting in the capacity of Mayor during the temporary absence of Mayor John H. Cox III 

### from the City. This will advise you that , at a specially-called City Council meeting held on Monday, Ju l y 7 , 2014, the Greenville City Council voted to endorse SeaPort Airlines ' proposal to provide essent i al air

. services (EAS) at the Greenville Mid-Delta Regional Airport. Please see the attached letter from City Attorne ~ Andrew N. Alexander III. This letter explains the rationale for the City Council's deci:=j ion to endorse SeaPort, and contains the City's official comments regarding the three ( 1 3) air service proposals received. Thank you for your prompt assistance in this matter. S i ~:ereIY Yc~urs ~ tfJ 

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. 

### Ann Hollowell , Vice Mayor

\V\Ylv.gn :envUlenlS . orgJ OH N 

## H . C OX 

## III Mayor CI TY C O U NCIL Tommy L . Benson , [II, Ward I Lois Hawkin s , Ward 2 Carolyn Weathers . Ward 3 Betty 

### J
. Walkins , Ward 4 Ann Hollowell, Ward 5 Errick D . Simmons, Ward 6 p. O . B ox 897 0 3 40 Main S t 0 Greenville , lvli ssbsippi 3870 1 0 Telephone : 6 62-3 78-1501 " Facsimile: 6 62-378 · 0276 '" Email : j ohncox @gl 'eenvillems . org 

### July 7,2014 Mr. Michael Martin United States Department of Transportat i on Office of Aviation Analysis 1200 New Jersey Avenue SE Room W86-472 Washington D
. C. 20590 Reference DOT-OST-2008-0209 Dear Mr. Martin , On Monday June 2 nd
, three airlines submitted proposals to prov i de essential air service (EAS) at the Greenville Mid-Delta Regiona l Airport
. The Airpo rt serves Greenv i lle , Mississippi and a large area of northwest Mississippi as we l l as southeaste r n Arkansas and northeast Lou i siana
. The Airport i s a vital economic link to the world for t he entire reg i on . As is noted in today's letter to you from Ann Hol l owell, the C i ty's Vice Mayor who is serving as Mayor during the temporary absence from the City of Mayor John H
. Cox III , the City Counc i l voted this morning to endorse the proposal of SeaPort Airlines to provide EAS at the Greenville Mid-Delta Airport. This decis i on was made after City officials had the opportunity to meet with , or speak with , representatives of each of the carriers. This letter constitutes the officia l comments of the City of Greenville regarding the various air service proposals received. F i rst , we wish to thank a l l three carriers for their interest in our market. We feel this h i gh level of carrier interest confirms our belief that our Airport is capable of generating dramatic ai r line traffic increases, with the appropriate carrier and service level. SeaPort ' s proposal calls for 18 round trip f l ights per week to Memph i s and requires an annual subsidy leve l of $1,483 , 080. The proposal ' s subs i dy need is between $700,000 and $800 , 000 l ower than any other carrier proposal. While the forecast per passenger subsidy is $198
. 00, the forecast load factor is very modest at 45%. SeaPort is a well-established regional airline and already has facilities and operations at Memph i s . We look forward to significant traffic growth with SeaPort service
. We are also

\VW,iCgreeJ1 Yillems.orgconfident that frequent service to Memphis at this modest subsidy level will generate traffic 

### well

in excess of the 10 enplanement per day requirements and also at subsidy levels well below $200 per passenger . We do, again , appreciate the interest in our market by AirChoiceOne and Sun Air International. We are very impressed with AirChoiceOne's success . providinq EAS service in other cities. The carrier offered two Caravan proposals for Greenville , one for 18 round trips per week and one for 18 per week the first year and 24 per week the second year . We are deeply conce r ned about the higher subsidy level required in the carrier's proposals , especially when both carr i er proposals forecast subsidy per passenger in excess of $200 in the first year. We understand that the Department has made clear that , starting with fiscal year 2015, Greenville will be subject to a strict enforcement of the $200 maximum subsidy per passenger cap. The carrier's lowest proposed subsidy is $2.3 million annually , which would require Greenville to generate 11 , 500 passengers per year, including the first year . The proposai calls for 1 , 840 annual flights, so 6
. 25 passengers per flight, or a 69.4% load factor would be required i n the first year of a new market that has been damaged by poor service by the previous carrier. Even in the carrier ' s existing successful mature markets, with service into larger hubs than Memphis, the carrier does not achieve 69.4% annualized load factors even today. Sun Air Internat i onal proposed serv i ce to Memphis. The carrier's proposal calls for 24 round trips per week using eight-seat P i per Navajo aircraft. The carrier forecasts a first and second year load factor of 60%, a total of 11 , 801 annual passengers and a subsidy need of $2.279 million or $193 per passenger. We are concerned about a forecasted passenger total of 11 , 801 in the first years of service, the higher subsidy need and thus, again, as with AirChoiceOne, a potential exists for issues about complying with the $200 subsidy per passenger cap in fiscal year 2015 and beyond
. The highest single month load factor that Sun Air has achieved in any of i ts ex i st i ng EAS markets was 45%, on t he Victoria - Houston Intercontinental route . Accordingly, we have major concerns whether Greenville can achieve a 60% load factor in the first year with Memph i s service
. However , the carrier ' s subsidy need would basically require us to do so, with no room for error . This EAS bid process for Greenville is proceeding under the cloud of a 10-enplanement termination notice about which the Department has advised us. We will address in the appropriate venue the merits of our market and why we should be granted a waive r from the 10- enplanement rule and remain eligible for EAS flights. We will simply note here that our Airport averaged 14 , 932 annual passengers (20.5 enplanements per day) for the nine years prior to the arrival of our current air service. We believe that our failure to make 10 enplanements ' per day during FY 2013 was ent i rely temporary in nature , and was due on l y to the poor service Silver Airways offered in our market. Thus we be l ieve that we will be able to strongly justify a waiver from the 10 enplanement violation with new SeaPort service to Memphis
. On that note , and looking forward to successful SeaPort service, we do not want to burden that carrier with hav i ng to overcome a subsidy cap deficit left by Silver Airways
. The current S i lver Airways serv i ce sees subsidy levels per passenger in excess of $500
. Thus , we request that theDepartment terminate the Silver A i rvvays serv i ce at our a i rport on September 30 , 2014
. This

avoids the Airport and our new carrier having to overcome one or more months of S i lver service in October or November, with each month seeing subsidy levels of $500 per passenger. We will i nstead go dormant i n terms of air service on October1 , 2014 until SeaPort can beg i n fl i ghts
. This action on our part saves the Depart ment subsidy f unds and gives our new air service partner a c l ean slate from which to grow our traffic l evels
. We hope t he Departmen t can exped i te the termination notice and wa i ver applicat i on p rocess as well as the awarding o f a new EAS contract for Greenv i lle to SeaPort
. Ideally we wou l d l i ke Seaport to be able to begin service on October 1 , 2014 but we w i ll understand if t hat dat e slips by a few weeks or a month
. We would not want o u r dormancy to extend more than 45 days
. We again express our thanks to the three airlines that offered service proposals, and we thank the Department in advance for work i ng w i th us as we navigate the challenges of preserving and grow i ng our a ir service to meet the transpo rtation needs of our region
.

Andrew N
. Alexander III City Attorney ANA I II : b l h