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BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, DC

Essential Air Service at

 Grand Island, Nebraska DOT-OST-2002-13983

Under 49 U.S.C §41731 et seq.

AMERICAN AIRLINES PROPOSAL TO PROVIDE ESSENTIAL AIR SERVICE AT 

GRAND ISLAND, NEBRASKA

American Airlines, a wholly owned subsidiary of American Airlines Group, Inc. respectfully 

submits its proposal to continue subsidized Essential Air Service to Grand Island, Nebraska.

American Airlines seeks to continue service from American’s largest hub, Dallas/Fort Worth 

International Airport (“DFW”), to the Grand Island Regional Airport (“GRI”) with two daily 

roundtrips. The service would be conducted by American Airlines’ regional brand, American 

Eagle, using 50 seat regional jet aircraft.

American Airlines regional feed is operated under the American Eagle and US Airways Express 

brands. American Airlines customers have access to 339 cities, 56 countries, and more than 

6,700 daily departures. Through our oneworld alliance, customers have access to more than 

700 destinations and 140 countries. 

The service proposed by American Airlines continues existing service to American’s largest hub, 

Dallas/Ft Worth International Airport. At DFW, American and American Eagle offer more than 

850 daily departures to over 160 destinations, making it one of the largest hubs in the country. 

This direct access on such a large scale has helped stimulate traffic from Grand Island with 

significantly easier connecting options than what had been offered to travelers to and from the 

region prior to our award of the current Essential Air Service bid.

Grand Island has performed well under subsidized Essential Air Service since American’s EAS 

subsidy award in July 2013, despite regional tendencies to favor OMA and its presence of lowcost carriers. Passenger numbers have increased steadily over the course of our nearly two 

years operating in the market. We have made great progress in developing air-service in Grand 

Island, and see the influence of the current service geographically redefining the local 

catchment area. Our current bid should reflect our belief that the Essential Air Service subsidy is 

vital, and on this trajectory may one day be able to exist profitably without Federal subsidy.
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Our bid is based on the 50 seat ERJ-145. This is the most commonly used type on this route 

currently. American’s intent is to operate the route with 50 seat aircraft. American would like to 

request that the DOT and Grand Island allow us flexibility in substituting 50 seat Bombardier 

CRJ200 and 44 seat Embraer ERJ-140 regional jets when needed for the same rate as the ERJ145. This will provide operational flexibility, which will improve reliability. American also 

requests that the DOT and Grand Island waive the right to hold-in American Airlines service 

upon issuance of 120 days-notice to terminate service. Although our intent is to remain in the 

GRI market for the long term, we cannot be operationally constrained and kept in a market 

indefinitely without the ability to adapt to changing circumstances. 

We believe that our success in Grand Island over the past two years is demonstrative of the 

American Airlines network and marketing programs. 

We look forward to serving the Grand Island area for many years to come and appreciate the 

community’s and the Department of Transportation’s consideration of continued service by 

American Airlines.

Sincerely,

Charles Schubert

Vice President

American Airlines Network Planning
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Essential Air Service Market DFW-GRI Prepared: 2/17/2015

A/C Type EMB145 Seats 50

Weekly Round Trips 13 Annual Onboard Pax 49,362 

Mileage 561 Average Fare $137.62

Annual Deps (98% completion factor) 1,329 RPMs

 

27,691,867 

Block per Dep 1.8 ASMs

 

37,275,084 

Estimated Load Factor 74.3% Subsidy per Departure $956

Estimated Fuel Price $3.25 Subsidy per Pax $25.74

Revenue Annualized Per Departure

Passenger $6,793,235 $5,112

Ancillary $944,834 $711

Cargo $1,329 $1

Total $7,739,397 $5,824

Expense

Pax Variable Expense $653,005 $491

Direct Expense (ex Pax) $5,799,547 $4,364

Indirect Expense (ex Pax) $984,312 $741

Ownership Expense $453,208 $341

Fixed Expense $669,527 $504

Total $8,559,599 $6,441

Segment Profit (820,202) (617)

Segment Profit Margin (FAC) (10.6%) (10.6%)

Subsidy Requirement $1,270,707 $956

New Segment Revenue $9,010,104 $6,780

New Segment Profit $450,505 $339

New Segment Profit Margin (FAC) 5.0% 5.0% 

Proposed Schedule

Segment Depart Arrive Frequency

GRI-DFW 6:00 7:52 Daily

GRI-DFW 14:30 16:14 Daily

DFW-GRI 12:00 13:56 Daily

DFW-GRI 20:15 22:10 Daily

* Schedule is shown for illustrative purposes only and American Airlines reserves the right to change without notice