# Proposal to Provide Essential Air Service at



# Burlington, Iowa

Docket DOT

- OST

- 2001

- 8731

Direct Inquiries Regarding this Proposal to:

Shane Storz, CEO

Air Choice One Airlines

12300 Old Tesson Road, Suite 200 F, Saint Louis, MO 63128

Phone: (866) 435

- 9847 Fax : (314) 843

- 8527 E

- mail: shane@airchoiceone.com



# Multi

- Aero Inc. d/b/a

Air Choice One

# Our Commitment

10/11/2011 

## Air Choice One is grateful to be the current carrier servicing the community of Burlington, Iowa and we are committed to continued growth in Burlington. Air Choice One is pleased to report that we have exceeded the targets established two years ago and is going strong. Our current proposal allocates substantial resources to support marketing efforts and builds on the momentum we have begun. We will continue working diligently to further increase enplanements.

We understand the efforts of a dedicated air carrier are critical to the continued success of the EAS program in your community. Air Choice One is that air carrier and through our past performance we have demonstrated the strategy outlined in our proposal is successful and guarantees airport development. Our current proposal gives the best access to the national transportation system for the community at reasonable prices and may be considered as an individual offering

.

Air Choice One remains dedicated to providing Burlington with outstanding service and we are seeking your commitment to our partnership through selection of Air Choice One for a 4 year term. The commitment of the Burlington community to a 4 year term provides Air Choice One with the financial justification to move our fleet forward into aircraft with larger seating capacities. Burlington will directly benefit through increased passenger loads; easing the subsidy requirement.

We look forward to serving you for the next 4 years!

# Market Growth Strategy

- Airport Partnerships

Air Choice One will team with your local airport to raise awareness about your communities’ air service and increase enplanements.

• LOCAL AIRPORT INITIATIVES

• Provide Financial Support Through Discounted Fuel Costs, Landing Fees, and Rental Agreements

• Provide Telephone and Internet Service

• Educate the Community about the EAS Program and Air Choice One’s Service

• Draft and Distribute Press Releases

• Community Involvement

• Participate in TV and Radio Coverage

• Distribute Information Pertaining to Air Choice One at Local Business Events

• High Visibility Presence on City Website(s) and Electronic Signage

10/11/2011

# Market Growth Strategy

- Airport Partnerships

Air Choice One will team with your chosen destination airport to promote tourism opportunities and encourage air travel to your community, again, increasing enplanements.

• CHICAGO O’HARE INTERNATIONAL AIRPORT (ORD) INITIATIVES

• EAS Communities Receiving Reliable Service to Hub Airports Have Benefited From a Steady Increase in Ridership

• Market Vacation Packages to ORD and Beyond and to Local Communities From ORD

• Air Choice One Operates from Terminal 3, Gate L9



## • LAMBERT ST. LOUIS INTERNATIONAL AIRPORT (STL) INITIATIVES

• Aggressively pursuing EAS Communities Through Partnership Programs

• Local Visits and Financial Support

• Annual EAS Summit Held at STL Airport

• STL Currently Supports Over 50 Daily Flights to Seven EAS Communities

• EAS Communities Partnering With STL Have Benefited From a Steady Increase in Ridership

• Provide Marketing Funds to Both Air Choice One and the Local Community



### • Market Vacation Packages to STL and Beyond and to Local Communities From STL

• Expedited Security Passes

— Passengers With Connections Enter Security Through First/Business Class Line

• Discount Coupons for Airport Shopping and Concessions

10/11/2011

# Market Growth Strategy

–

Partnering With the Community

10/11/2011 

## Air Choice One is dedicated to working with your community to reinvigorate the service at your airport and sustain growth

that will launch us into the future.

• WE ARE YOUR NEIGHBORS



## • Corporate Headquarters in Midwest

• Increase Local Career Opportunities

• WE ARE IN YOUR COMMUNITY

• Routine On

- Site Sales Visits

• Chamber of Commerce Participation and Membership



## • Airport Affiliate Participation

• STRONG PUBLIC RELATIONS AND MEDIA OUTREACH

• Business Incentive Programs

• Travel Agent Discounts

• Business to Business Communication



## • Attendance at Public Events

• WE KEEP YOU INFORMED

• Monthly Airport Board Updates

# Market Growth Strategy

– Marketing Investment

10/11/2011 

### Air Choice One reinvests in our served communities.

• TRADITIONAL MEDIA

• Radio

- Talk Shows/Commercials

• TV Commercials and Event Coverage

• Print

- Newspaper/Magazines

• Billboards

• Web Based

– E

- Blasts

- Constant Contact

– Monthly E

- Mail Promotions

– City Representation on Our Website



### • SOCIAL MEDIA

• Twitter, Facebook, Linked In

• INTERACTIVE MEDIA

• Contests

• You Tube/Videos

• EVENTS AND SPONSORSHIPS

• Local Charitable Support

- March of Dimes, Make

- A

- Wish Foundation, Red Cross, etc.

• Business/Community Support

- Golf Tournaments, Business Luncheons, Air Shows, etc.

• COMMUNITY TICKET OFFICE

# Market Growth Strategy

– Reliability & Growth

• CONSISTENT SERVICE IS KEY

• Proven Success in Other EAS Markets

• Builds Passenger Confidence in Carrier

• Dedicated Aircraft for your Airport

– 102% Flight Completion Ratio as Reported by DOT YR 2010

– Spare Aircraft Availability



## • AIR CHOICE ONE’S REVENUE INCREASED

BY OVER 20% YE 2010 VS. 2009

10/11/2011 

## 75 80 85 90 95 100 105

Cape

Air Am. Eagle Gr.

Lakes Sea

Port Air

Choice Completion %



# Airline Airline Completion Ratios

Works Cited: T

- 100 Segment Report DOT 2010 Calendar Year

# Market Growth Strategy

– Accessibility

• VISIBILITY

• Global Distribution Systems

– Sabre , Apollo, Worldspan, Travelport, Amadeus, etc.

• Consumer Sites

– Expedia, Travelocity, Priceline, Orbitz, etc.

• Web based booking



## – www.airchoiceone.com

• Call Center

– Open 7 Days a Week



## • CONNECTIVITY

• United Airlines Agreement

• Additional Legacy Agreements Pending

10/11/2011

# Market Growth Strategy

– Pricing

Air Choice One offers the right price for the right ticket at the right time.

We take all things into consideration and

enter the market with low fares. We work hard to establish a winning price point through targeted market analysis. We believe consistent pricing builds consumer

confidence.

• BUILDING & SUSTAINING RIDERSHIP

THROUGH PRICE

• Introductory Fares Peak Interest and Drive Passengers to Air Choice One and Your Airport



## • On

- Going Affordable Fares = Full

Planes!

• Full Planes Establish the Customer

Base Needed to Reduce Future Subsidy Requirements

10/11/2011 *Numbers Reflect O & D 

## 0 500 1,000 1,500 2,000 

## 2,500 3,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec # of Passengers



### Month of Service 

## Air Choice One Ridership Growth

EAS Markets 2010

- 2011*

2010

2011

# Marketing Growth Strategy

-

New Hub, New Opportunities

ST. LOUIS’ COMBO OF LOW FARE CARRIERS AND ENDLESS CONNECTIONS AR E THE

KEY TO 

# SELLING MORE TICKETS!

10/11/2011 *Source : Southwest Airlines Website, September 2011, 14 Day Advance Purchase 

## • Air Choice One Operates from Gate
E33, Terminal 2

• 244 Daily Flights to 60 Domestic &
International Markets as of August,

2011.

• More than 24,700 Daily Outbound

Seats. Terminal 2, Gate E33

# Marketing Growth Strategy

-

Building On A Great Foundation

AIR CHOICE ONE WILL 

# BUILD ON CHICAGO O’HARE INTERNATIONAL’S 

# MOMENTUM !

10/11/2011 

## Terminal 3, Gate L9

• Air Choice One Operates from Terminal 2, Gate L9

• 39 Carriers Serving Over 67 Million Passengers and More Than 950,000 Aircraft Operations in 2010

# Options Index (Page 1 of 2)
Burlington, Iowa

10/11/2011 OPTION 1, 2 YEAR SERVICE WITH DISCOUNT FOR 4 YEAR SERVICE TERM

– STL & ORD SERVICE

CESSNA GRAND CARAVAN

Burlington, Iowa

– Dual Hub Service

– Lambert St. Louis & Chicago O’Hare International Airports

Cessna Grand Caravan 24 Round Trips Per Week

OPTION 2

, 2 YEAR SERVICE WITH DISCOUNT FOR 4 YEAR SERVICE TERM

– STL & ORD SERVICE

CESSNA GRAND CARAVAN

Burlington, Iowa

– Dual Hub Service

– Lambert St. Louis & Chicago O’Hare International Airports

Cessna Grand Caravan 30 Round Trips Per Week

OPTION 3

, 2 YEAR SERVICE WITH DISCOUNT FOR 4 YEAR SERVICE TERM

– STL & ORD SERVICE

CESSNA GRAND CARAVAN

Burlington, Iowa

– Dual Hub Service

– Lambert St. Louis & Chicago O’Hare International Airports

Cessna Grand Caravan 36 Round Trips Per Week

# Options Index (Page 2 of 2)
Burlington, Iowa

10/11/2011 OPTION 6

, 2 YEAR SERVICE WITH DISCOUNT FOR 4 YEAR SERVICE TERM

– ORD SERVICE

CESSNA GRAND CARAVAN

Burlington, Iowa

– Chicago O’Hare International Airport

Cessna Grand Caravan 36 Round Trips Per Week

OPTION 4

, 2 YEAR SERVICE WITH DISCOUNT FOR 4 YEAR SERVICE TERM

– STL SERVICE

CESSNA GRAND CARAVAN

Burlington, Iowa

– Lambert St. Louis International Airport

Cessna Grand Caravan 30 Round Trips Per Week

OPTION 5

, 2 YEAR SERVICE WITH DISCOUNT FOR 4 YEAR SERVICE TERM

– ORD SERVICE

CESSNA GRAND CARAVAN

Burlington, Iowa

– Chicago O’Hare International Airport

Cessna Grand Caravan 30 Round Trips Per WeekOperation Revenues

BRL

- STL & BRL

- ORD Revenues $ 712,490

Other Revenues 3,562

Total Operating Revenues $ 716,052

Direct Operating Expenses

Flying Operations $ 342,166

Fuel and Oil 599,588

Maintenance 501,843

Aircraft Leases 420,000

Total Direct $1,863,597

Marketing 60,000

Indirect 641,093

Total Operating Expenses $2,564,690

Operating Loss $1,848,638

Profit Element (5% total Oper. Exp.) 128,234

Compensation Required $1,976,872

Compensation per PAX $152

Compensation per Departure $806 

## Burlington, Iowa

– Dual Hub Service

– Cessna Grand Caravan

Option 1: 2 Year Service With Discount For 4 Year Service Term

24 Total Round Trips Per Week

– Based on 98% Completion Rate

Burlington, Iowa

– Dual Hub Service

– Lambert St. Louis & Chicago O’Hare International Airports

– Caravan

# Passengers: 13,010
Average Fare

- ORD: $59.00

Average Fare

- STL: $49.00

Departures: 2,452

Block Hours: 2,281 Revenue Passenger Miles: 2,212,470

Available Seat Miles: 3,676,458

10/11/2011 

### DISCOUNTED SUBSIDY $1,917,566/Year
$782/Departure DISCOUNT FOR 4

- YEAR TERM Representative Schedule (2S/2C)

Departure Arrival

BRL @ 6:00 AM CT ORD @ 7:20 AM CT

ORD @ 7:50 AM CT BRL @ 9:10 AM CT

BRL @ 9:25 AM CT STL @ 10:15 AM CT

STL @ 2:40 PM CT BRL @ 3:30 PM CT

BRL @ 4:00 PM CT ORD @ 5:20 PM CT

ORD @ 6:00 PM CT BRL @ 7:20 PM CT

BRL @ 7:35 PM CT STL @ 8:25 PM CT

STL @ 9:00 PM CT BRL @ 9:50 PM CTOperation Revenues

BRL

- STL & BRL

- ORD Revenues $ 771,490

Other Revenues 3,857

Total Operating Revenues $ 775,347

Direct Operating Expenses

Flying Operations $ 390,731

Fuel and Oil 760,768

Maintenance 667,137

Aircraft Leases 420,000

Total Direct $2,238,636

Marketing 60,000

Indirect 813,707

Total Operating Expenses $3,112,343

Operating Loss $2,336,996

Profit Element (5% total Oper. Exp.) 155,617

Compensation Required $2,492,613

Compensation per PAX $178

Compensation per Departure $813 

## Burlington, Iowa

– Dual Hub Service

– Cessna Grand Caravan

Option 2: 2 Year Service With Discount For 4 Year Service Term

30 Total Round Trips Per Week

– Based on 98% Completion Rate

Burlington, Iowa

– Dual Hub Service

– Lambert St. Louis & Chicago O’Hare International Airports

– Caravan

# Passengers: 14,010
Average Fare

- ORD: $59.00

Average Fare

- STL: $49.00

Departures: 3,066

Block Hours: 2,895 Revenue Passenger Miles: 2,399,470

Available Seat Miles: 4,705,646

10/11/2011 

### DISCOUNTED SUBSIDY $ 2,417,835/Year $789/Departure DISCOUNT FOR 4

- YEAR TERM Representative Schedule (2S/3C)

Departure Arrival

BRL @ 6:00 AM CT ORD @ 7:20 AM CT

ORD @ 7:50 AM CT BRL @ 9:10 AM CT

BRL @ 9:45 AM CT STL @ 10:35 AM CT

STL @ 11:40 AM CT BRL @ 12:30 PM CT

BRL @ 1:10 PM CT ORD @ 2:30 PM CT

ORD @ 3:10 PM CT BRL @ 4:30 PM CT

BRL @ 5:00 PM CT STL @ 5:50 PM CT

STL @ 4:00 PM CT BRL @ 4:50 PM CT

BRL @ 5:30 PM CT ORD @ 6:50 PM CT

ORD @ 8:00 PM CT BRL @ 9:20 PM CTOperation Revenues

BRL

- STL & BRL

- ORD Revenues $ 811,100

Other Revenues 8,111

Total Operating Revenues $ 819,211

Direct Operating Expenses

Flying Operations $ 471,857

Fuel and Oil 896,093

Maintenance 734,000

Aircraft Leases 420,000

Total Direct $2,521,950

Marketing 60,000

Indirect 845,412

Total Operating Expenses $3,427,362

Operating Loss $2,608,151

Profit Element (5% total Oper. Exp.) 171,368

Compensation Required $2,779,519

Compensation per PAX $187

Compensation per Departure $755 

## Burlington, Iowa

– Dual Hub Service

– Cessna Grand Caravan

Option 3: 2 Year Service With Discount For 4 Year Service Term

36 Total Round Trips Per Week

– Based on 98% Completion Rate

# Passengers: 14,900
Average Fare

- ORD : $59.00

Average Fare

- STL: $49.00

Departures: 3,680

Block Hours: 3,496 Revenue Passenger Miles: 2,514,300

Available Seat Miles: 4,901,945

10/11/2011 

### DISCOUNTED SUBSIDY $ 2,696,133/Year $732/Departure DISCOUNT FOR 4

- YEAR TERM Representative Schedule (3S/3C)

Departure Arrival

BRL @ 6:10 AM CT ORD @ 7:30 AM CT

ORD @ 8:05 AM CT BRL @ 9:25 AM CT

BRL @ 10:00 AM CT STL @ 10:50 AM CT

STL @ 11:40 AM CT BRL @ 12:30 PM CT

BRL @ 1:10 PM CT ORD @ 2:30 PM CT

ORD @ 3:10 PM CT BRL @ 4:30 PM CT

BRL @ 5:00 PM CT STL @ 5:50 PM CT

STL @ 3:00 PM CT BRL @ 4:10 PM CT

BRL @ 4:30 PM CT ORD @ 5:50 PM CT

ORD @ 6:30 PM CT BRL @ 8:00 PM CT

BRL @ 8:15 PM CT STL @ 9:05 PM CT

STL @ 9:45 PM CT BRL @ 10:35 PM CT 

## Burlington, Iowa

– Dual Hub Service

– Lambert St. Louis & Chicago O’Hare International Airports

– CaravanOperation Revenues

BRL

- STL Revenues $ 661,500

Other Revenues 3,638

Total Operating Revenues $ 665,138

Direct Operating Expenses

Flying Operations $ 413,910.00

Fuel and Oil 725,308

Maintenance 593,271

Aircraft Leases 420,000

Total Direct $2,152,489

Marketing 60,000

Indirect 523,690

Total Operating Expenses $2,736,179

Operating Loss $2,071,041

Profit Element (5% total Oper. Exp.) 136,809

Compensation Required $2,207,850

Compensation per PAX $164

Compensation per Departure $720 

## Burlington, Iowa

– Cessna Grand Caravan

Option 4: 2 Year Service With Discount For 4 Year Service Term

30 Total Round Trips Per Week

– Based on 98% Completion Rate



# Burlington, Iowa

– Lambert St. Louis International Airport

– Caravan

# Passengers: 13,500
Average Fare: $49.00

Departures: 3,066

Block Hours: 2,759 Revenue Passenger Miles: 1,984,500

Available Seat Miles: 4,045,205

10/11/2011 

### DISCOUNTED SUBSIDY $ 2,141,615/Year $698/Departure DISCOUNT FOR 4

- YEAR TERM Representative Schedule (5S)

Departure Arrival

BRL @ 6:00 AM CT STL @ 6:50 AM CT

STL @ 7:35 AM CT BRL @ 8:25 AM CT

BRL @ 9:15 AM CT STL @ 10:05 AM CT

STL @ 10:55 AM CT BRL @ 11:45 AM CT

BRL @ 12:35 PM CT STL @ 1:25 PM CT

STL @ 2:15 PM CT BRL @ 3:05 PM CT

BRL @ 3:55 PM CT STL @ 4:45 PM CT

STL @ 5:35 PM CT BRL @ 6:25 PM CT

BRL @ 7:15 PM CT STL @ 8:05 PM CT

STL @ 9:00 PM CT BRL @ 9:50 PM CTOperation Revenues

BRL

- ORD Revenues $ 814,200

Other Revenues 4,478

Total Operating Revenues $ 818,678

Direct Operating Expenses

Flying Operations $ 444,570

Fuel and Oil 805,898

Maintenance 735,840

Aircraft Leases 420,000

Total Direct $2,406,308

Marketing 60,000

Indirect 812,770

Total Operating Expenses $3,279,078

Operating Loss $2,460,400

Profit Element (5% total Oper. Exp.) 163,954

Compensation Required $2,624,354

Compensation per PAX $190

Compensation per Departure $856 

## Burlington, Iowa

– Cessna Grand Caravan

Option 5: 2 Year Service With Discount For 4 Year Service Term

30 Total Round Trips Per Week

– Based on 98% Completion Rate



# Burlington, Iowa

– Chicago O’Hare International Airport

– Caravan

# Passengers: 13,800
Average Fare: $59.00

Departures: 3,066

Block Hours: 3,066 Revenue Passenger Miles: 2,028,600

Available Seat Miles: 4,045,205

10/11/2011 

### DISCOUNTED SUBSIDY $ 2,545,623/Year $830/Departure DISCOUNT FOR 4

- YEAR TERM Representative Schedule (5C)

Departure Arrival

BRL @ 6:00 AM CT ORD @ 7:20 AM CT

ORD @ 7:50 AM CT BRL @ 9:10 AM CT

ORD @ 10:00 AM CT BRL @ 11:20 AM CT

BRL @ 12:00 PM CT ORD @ 1:20 PM CT

BRL @ 10:00 AM CT ORD @ 11:20 AM CT

ORD @ 11:55 AM CT BRL @ 1:15 PM CT

BRL @ 2:00 PM CT ORD @ 3:20 PM CT

ORD @ 3:55 PM CT BRL @ 5:15 PM CT

BRL @ 6:00 PM CT ORD @ 7:20 PM CT

ORD @ 8:00 PM CT BRL @ 9:20 PM CTOperation Revenues

BRL

- ORD Revenues $ 973,500

Other Revenues 5,354

Total Operating Revenues $ 978,854

Direct Operating Expenses

Flying Operations $ 478,296

Fuel and Oil 967,078

Maintenance 791,028

Aircraft Leases 420,000

Total Direct $2,656,402

Marketing 60,000

Indirect 933,926

Total Operating Expenses $3,650,328

Operating Loss $2,671,474

Profit Element (5% total Oper. Exp.) 182,516

Compensation Required $2,853,990

Compensation per PAX $173

Compensation per Departure $776 

## Burlington, Iowa

– Cessna Grand Caravan

Option 6: 2 Year Service With Discount For 4 Year Service Term

36 Total Round Trips Per Week

– Based on 98% Completion Rate



# Burlington, Iowa

– Chicago O’Hare International Airport

– Caravan

# Passengers: 16,500
Average Fare: $59.00

Departures: 3,679

Block Hours: 3,679 Revenue Passenger Miles: 2,425,500

Available Seat Miles: 4,854,246

10/11/2011 

### DISCOUNTED SUBSIDY $ 2,768,370/Year $753/Departure DISCOUNT FOR 4

- YEAR TERM Representative Schedule (5C)

Departure Arrival

BRL @ 6:00 AM CT ORD @ 7:20 AM CT

ORD @ 7:50 AM CT BRL @ 9:10 AM CT

ORD @ 10:00 AM CT BRL @ 11:20 AM CT

BRL @ 12:00 PM CT ORD @ 1:20 PM CT

BRL @ 10:00 AM CT ORD @ 11:20 AM CT

ORD @ 11:55 AM CT BRL @ 1:15 PM CT

BRL @ 2:00 PM CT ORD @ 3:20 PM CT

ORD @ 3:55 PM CT BRL @ 5:15 PM CT

BRL @ 6:00 PM CT ORD @ 7:20 PM CT

ORD @ 8:00 PM CT BRL @ 9:20 PM CT

ORD @ 6:00 PM CT BRL @ 7:20 PM CT

BRL @ 8:00 PM CT ORD @ 9:20 PM CT

# The Best Choice to Succeed

10/11/2011 

## • Proven Enplanement Increases in EAS

Markets

• Successful Pricing Strategy

• Demonstrated Growth in Community Support

• Proven Reliability

• Outstanding Completion Ratio

• Great Hub Connectivity



## • Successful Marketing and Public Relations

Outreach

• Raise Awareness About Local Air Service

• We Cater to Community and Business Needs



# We Look Forward to Serving Burlington for the Next 4 Years!