Essential Air Service at 

·BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, DC 

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 AMR Corporation, 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, to the Grand Island Regional Airport with two daily roundtrips. The service would be 

conducted by American Airlines regional brand, American Eagle using 50 seat jet aircraft. 

American Eagle is the primary regional feed for American Airlines, offering more than 1500 

daily departures with service to nearly 160 cities. Flying for American Eagle is conducted by 

American Eagle Airlines, SkyWest Airlines, and ExpressJet. Through its relationship with 

American Airlines, American Eagle customers currently have access to more than 250 cities, 40 

countries and more than 3400 daily departures. Through our oneworld alliance, customers 

have access to more than 700 destinations and 140 countries. These flights will continue to be 

operated with the AA code, pursuant to a codesharing agreement with American Airlines. 

Additional codes of the oneworld carriers are also applied to this route, and would continue to 

be. 

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

Dallas/Ft Worth International Airport ("DFW"). At DFW, American and American Eagle offer 

more than 750 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 2011, despite regional tendencies to favor OMA and its presence of low-

. ;; ' 

. r~ r1 '·~~· i..j 
cost carriers. Passenger numbers have increased steadily over the course of our nearly two 

··--,---vears operating in.the_market •.. We hav.e. m.aci.~ grg~t p[()grE!?S i_l'l developing air-service Grand 

Island, and see the influence of the current service geographically redefining the--lo-cai · ·- ·-

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

vital, and on this trajectory may one day be able to exist profitably without Federal subsidy. 

American would like to also request that the DOT and Grand Island allow us flexibility in 

substituting a Bombardier CRJ200 (50 seats) aircraft, operated by Express Jet Airlines dba 

American Eagle, and Embraer EMB140 (44 seatsL operated by American Eagle Airlines, when 

needed for the same rates. This will allow us to provide an additional layer of schedule 

protection. American also requests that the DOT and Grand Island waive the right to hold-in 

American Eagle service upon issuance of a 120 days-notice to terminate service. Although we 

do not foresee this to be an issue and plan to continue developing the Grand Island market, we 

cannot be operationally constrained and kept in a market indefinitely, without ability to adapt 

to changing circumstances. 

We believe that our to-date success in Grand Island is demonstrative of the American Airlines 

network and marketing programs. American Airlines is the only airline with a dedicated 

Regional Market Development team that will continue its promotion of the brand and service in 

the communities. 

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

communities and the Department of Transportation consideration of continued American 

Airlines/ American Eagle service. 

Sincerely, 

Charles Schubert 

Vice President 

American Airlines Network Planning 
Market: Between DFW and GRI 

Aircraft EMB140 

Mileage 561 Number of Seats 

Daily Deps 3.7 ASMs per Flight 

Annual Deps 1,356 AnnuaiASMs 

Block per Dep 1.75 Annual RPMs 

Flight Hours per Dep 1.33 Annual LF 

Annual Block Hours 2,373 Annual F~ght Hours 

Annual Onboard Pax 46,717 Fuel Cost per Gallon 

Revenues 

Local Pax 5,791,476 Local Yield 

Local Avg Fare $123.97 SLA Local Yield 

Local Revenues $5,791,476 

Connect Pax 46,512 Connect Yield 

Connect Avg Fare $131.9 SLA Connect Yield 

Connect Revenues $6,135,900 

On Board Revenues $5,791,476 

Online Upline/Oownline Rev $6,135,900 

Total Revenues $11,927,376 

Expenses 

Flight Operations (inc! Fuel) $ 5,947,502 

Aircraft Ownership $ 195,512 

Pax Variable $ 719,629 

Other $ 402,593 

Total On board Expenses $7,265,236 

Total Up/Down Expense $2,801,833 

FAE Profit /(Loss) ($1.473,7601 

FAE Margin (25.4%) ; 

FAUDNC Profit/ (Loss) $1,860,306 

FAUDNC Margin : 15.6% 

i 

CASM $0.217 

SLA CASM i $0.245 

44 

24,684 

33,471,504 

26,208,188 

78.3% 

1,803 

$3.25 

$0.173 

$0.250 

$0.281 

$0.317 

FAE Margin 

On board Psgr Revenue 

Upline/Downline Contribution 

Onboard Expense 

FAE (PsgrOnly) Annual 

FAE Margin (Psgr Only) Annual 

FAUDNC (Psgr Only) Annual 

FAUDNC Margin (Psgr Only) Annual 

Onboard Psgr Revenue/Trip 

Onboard Expense/Trip 

Fuel Cost 

Onboard Psgr/Trip 

Load Factor 

Average Onboard Psgr Fare 

Annual Subsidy 

For 5% margin 

1,837,021 

Projection 0.0% 1.0% S.O(o 

$ 5,791,476 $ 7,265,236 $ 7,338,623 $ 7,647,617 

$ 3,334,067 $ 3,334,067 s 3,334,067 $ 3,334,067 

$ 7,265,236 $ 7,265,236 $ 7,265,236 $ 7,265,236 

$ (1,473,760) $ - $ 72,652 363,261 

(25.4%) 0.0% 1.0% 5.0%, 

s 1,860,306 s 3,334,067 s 3,407,453 Is 3,716.448 

15.6% 24.9% 25.3% 27.0% 

s 4,271 $ 5,358 $ 5,4121 s 5,640 

$ 5,358 $ 5,358 $ 5,358 $ 5,358 

$ 3.25 $ 3.25 $ 3.25 $ 3.25 

34.5 34.5 34.51 34.5 

78.3% 78.3% 78.3% 78.3% 

$ 123.97 s 155.52 s 157.09 $ 163.70