Before the United States Department of Transportation

February 15, 2013

Proposal to Provide Essential Air Service at

KINGMAN, ARIZONA

PAGE, ARIZONA

PRESCOTT, ARIZONA

SHOW LOW, ARIZONA

Under 49 U.S.C. 41731 et seq.

Docket OST-1996-1899

Docket OST-1997-2694

Docket OST-1996-1899

Docket OST-1998-4409

Proposal of SeaPort Airlines,Inc. 

to Provide Essential Air Service at the Arizona Communities of

Kingman, Page, Prescott, and Show Low

In response, SeaPort Airlines, Inc. (“SeaPort”) respectfully submits this timely proposal to provide 

subsidized EAS at each of the above named communities. The proposals herein contemplate 

service connecting each community with the national air transportation system via Phoenix Sky 

Harbor International Airport (PHX), a major connecting hub for both US Airways and Southwest 

Airlines, the nation’s largest low-fare carrier. 

 At Prescott, SeaPort proposes to operate 30 nonstop roundtrips each week to Phoenix, of 

which 18 would originate or terminate at Kingman, providing that community with 18 onestop roundtrips to Phoenix each week. If SeaPort is not selected to provide EAS at Kingman, 

a standalone proposal to provide EAS at Prescott is also included that offers 26 weekly 

nonstop roundtrips between Prescott and Phoenix. 

 At Page, SeaPort proposes to operate 32 weekly roundtrips to Phoenix during peak tourism 

months reduced to 18 weekly roundtrips during off-peak months.

 At Show Low, SeaPort proposes to operate 26 nonstop roundtrips to Phoenix each week. 

Each community is provided the option of flights operated with single-engine turboprop aircraft or 

aircraft with two piston-engines (“piston-twin”), should a community not wish to waive its right to 

Essential Air Service with twin-engine aircraft. The aircraft will seat 8 or 9 passengers and all flights 

will be operated with two pilots.

With the exception of Kingman being tied to Prescott, the EAS proposals at each community are 

submitted on a “standalone” basis. If selected to provide EAS at all of the communities and using the 

same type of aircraft, SeaPort expects to realize economies of scale to lower operating costs. 

Accordingly, there is also a contingent proposal with a reduced subsidy request that SeaPort offers 

should it be selected to serve all four of the Arizona communities using the same type of aircraft.
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February 15, 2013

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On a standalone basis SeaPort is requesting a total of $8,170,022 to provide EAS at all four 

communities using single-engine turboprops, or $7,621,564 if flown using piston-twins. The reduced 

requested subsidy amount contingent on being selected to provide service to all for communities 

using Cessna Caravan single-engine turboprops is $7,485,287, saving the Department $684,775 per 

year. The reduced requested subsidy amount contingent on being selected to provide service to all 

four communities using piston twins is $7,116,626, saving the Department $504,938 on an annual 

basis. 

After this proposal is docketed, SeaPort Airlines will contact the Airport Manager at each airport to 

schedule a meeting with the communities to explain our proposal in detail, and answer any 

questions. In the interim and throughout the carrier selection process, questions regarding this 

proposal should be directed to:

Timothy Sieber

Vice President – Commercial

SeaPort Airlines, Inc.

7505 NE Airport Way

Portland, OR 97218

(971) 340-1716

tsieber@seaportair.com
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February 15, 2013

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Introduction to SeaPort Airlines

Scope of Operations

SeaPort Airlines, Inc. is a FAA certified scheduled airline based in Portland, Oregon with 30 years of 

experience in commercial aviation. In addition to Portland, the company has operational bases at 

Memphis (MEM) and Juneau (JNU). Service from a fourth operational base located at San Diego 

(SAN) is scheduled to begin on May 1, 2013 with service to Imperial/El Centro, California.

Our approximately 185 professionals operate a fleet of 14 aircraft on an average of 90 scheduled 

departures each day, increasing to over 100 each day during the peak tourist season in Southeast 

Alaska.1Including new service to Imperial/El Centro, the company serves 21 cities in nine states as 

illustrated on the map below.

 

1

SeaPort Airlines operate in Southeast Alaska branded as “Wings of Alaska.” The company operates an additional 8-

10 “flightseeing” tours each day during the summer, which are marketed by major cruise lines such as Princess, 

Carnival, and Royal Caribbean directly to their passengers onboard the ships. These flights, which offer views of 

Alaska landscape and wildlife, are not included in the count of scheduled departures.
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February 15, 2013

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A Track Record of Building Partnerships With Our EAS Communities

Service to eight of the communities on SeaPort’s route map is provided under the EAS program: 

Athens, Georgia; Pendleton, Oregon; El Dorado, Hot Springs, and Harrison, Arkansas; Salina, 

Kansas; Jackson, Tennessee; and Imperial/El Centro, California.

The primary focus of SeaPort Airlines is to provide air service to small and rural communities across 

America that is affordable, customer-centric, and reliable. Many of the communities we serve were 

once on the route map of one or more major airlines not too long ago. However, with the business 

models of big airlines focused on global alliances and the cost of typical 100-150 seat aircraft

hovering around $50 million, service to these communities was entrusted to regional airlines that, in 

many cases, operated with an affiliate brand such as American Eagle, US Airways Express, or Delta 

Connection. Today, many of the first generation regional airlines are facing similar rising costs and 

migrating to larger aircraft (i.e., 75 seaters replacing 50 seaters), meaning that revenues in these

markets are insufficient to be served profitably even with a reasonable level of subsidy. For smaller

or rural communities that remain on a major airline’s map, a lack of attention or specific operating 

strategies such as reasonably timed flights, competitive fares, and/or a policy of first cancelling 

smaller markets during weather events. Frequently, the major airlines are refocusing their resources 

on grabbing an extra one-percent of market share at Shanghai or spiffing up the premium passenger

lounge at Paris Charles DeGaulle Airport. SeaPort fills this void by focusing on providing service to 

markets such as these four Arizona communities with air service that is reliable, customer-centric, 

and affordable.

To serve these communities, SeaPort operates aircraft with operating costs and passenger capacity 

that are appropriate to a market’s true demand. This strategy allows us to offer higher frequencies 

and a greater choice of departure times than is possible with larger aircraft, including the next 

increment in plane size seating 19-30 passengers. The pricing strategy employed by SeaPort in our 

EAS communities is to incentivize use of the local airport so that enplanements maintain EAS 

program eligibility, but do not result in shifting the “true cost” of air travel to the Department’s EAS 

budget. Most importantly, we are focused on providing our customers with attentive and personal 

service that, in many of our markets, is commonly known as “The SeaPort Experience.” 

Once SeaPort is awarded an EAS contract and service is launched, we develop a partnership with 

each community by participating in local events, donation of tickets, on-going dialogue with airport 

management and community leaders, and presentations to civic clubs and other similar 

organizations. We also have a reputation of being responsive to community needs, affording them 

the opportunity to comment on schedule and fare changes before they become effective. It is 

SeaPort’s view that airlines and communities, who we view as our customer, need not be at odds 

with each other. To the contrary, we have a shared interest in fostering grass roots support for local 

air service and, as result, ensuring that enplanements maintain the level needed for continued 

eligibility in the EAS program. 

Possibly the strongest indicator of the service we provide in communities similar to the four Arizona 

communities, is the fact that in every “Lower 48” markets where SeaPort has been selected to

provide EAS, we have been re-selected for subsequent terms at the end of the first contract period. 

This includes reselection during 2012 to four-year contract renewals (rather than the standard twoyears) at both Salina, Kansas and Pendleton, Oregon, after both communities voiced their 

overwhelming support for SeaPort Airlines. 

Later in this document we have provided comments submitted by customers and airport managers 

that lend support to our commitment and capability to deliver outstanding customer service. 

Nonetheless, we encourage each of the communities that SeaPort is proposing to provide EAS to 
OST-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 5

contact the airport manager in any of our EAS communities to discuss the responsive, reliable, and 

customer-centric service that SeaPort Airlines consistently provides their community.

Aircraft Type: Single-Engine Turboprop OR Piston-Twin Engine

In this filing, SeaPort is offering Kingman, Page, Prescott, and Show Low a single service pattern 

proposal but a choice of two aircraft with which the service pattern may be flown.

2 Both aircraft types 

offered are described below, as is the rationale for providing a choice of aircraft types.

Single-Engine Turboprop: Cessna Caravan

Currently, all SeaPort flights are flown with single-engine aircraft, including flights to the eight 

communities served as part of the EAS program. It is our view that modern single-engine turboprops 

are the best platform for providing EAS at reasonable levels of subsidy, which is frequent, affordable, 

and reliable. 

Specifically, SeaPort Airlines is proposing to provide EAS at Kingman, Page, Prescott, and Show 

Low using Cessna Caravans, a single-engine turboprop that seats 9-passengers. The Caravan is 

certified for single-pilot operation, however SeaPort operates in the Lower 48 with both a 

Captain and First Officer.3

Produced in the USA, the “Caravan” was originally designed in the 1980’s to replace an aging 

fleet of piston-powered aircraft, such as the De Havilland Otter and Piper Chieftain. Over 2,000 

Caravans have been built logging a total of over 12.5 million flight hours.

The Caravan is equipped with a large cargo pod, allowing it accommodate more baggage (both 

in volume and weight) than other 8/9 passenger aircraft, including the piston twin (i.e., Piper 

Chieftain and Cessna 402) offered as an option in our proposal. Equally important, the large 

 

2

A “back-up” proposal for Prescott is also included that will allow for the selection of SeaPort to provide EAS to that 

community regardless of which carrier is selected to provide EAS at Kingman.

3

Presently, over half of SeaPort’s fleet is comprised of Cessna Caravans, with four additional aircraft deliveries 

planned for the balance of 2013.
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February 15, 2013

Page | 6

cargo pod facilitates the segregation of passengers and baggage, important for security 

purposes.4

Based on our experience in other EAS markets, SeaPort expects there to be some questions 

regarding flights operated with single-engine aircraft in each community. During the carrier 

selection process and, if selected, during presentations and events to promote the new service, 

we will expand upon the following reasons as how the Cessna Caravan allows us to provide 

safe and reliable air transportation, as we do every day on an average of 90 daily departures:

 The argument that single-engine aircraft are less safe than multi-engine aircraft is based on 

the presumption of engine failure. Failure of modern turbine engines is extremely rare and it 

is even more rare is engine failure being the primary cause of an accident or incident.

 Multi-engine aircraft experience asymmetric thrust and a rapid loss of climb performance of 

up to 80%. In contrast, single-engine aircraft don’t experience asymmetric thrust, and they 

typically have higher glide ratios and can land at slower speeds.

 As reliability has improved over the last 75 years, airlines have specified fewer engines on 

new aircraft designs – “more motors is better” no longer applies.

 Newer, modern technology single-engine aircraft provide a better customer experience than 

older twins.

Finally, and as noted earlier, SeaPort Airlines has never lost an EAS contract renewal in the Lower 

48. While many factors contributed to this perfect record, it is worth noting that these renewals have 

come following a period (and after proposing a subsequent period) of operations using single-engine 

turboprops. While there may have been some trepidation early in a first contract term, it hardly gets 

a mention during the renewal process. We believe this reflects our community’s understanding and 

appreciation for the frequent, affordable, and reliable service we can offer with such aircraft.

Combined, these factors all contribute to (and can even determine if) a community remains eligible 

for EAS subsidized flights.

Piston-Twin Engine Aircraft: Piper Chieftain or Cessna 402C

The definition of “Basic Essential Air Service” provided in 49 U.S.C. 41732(b)(5) states that EAS be 

“provided in aircraft with at least 2 engines and using 2 pilots, unless scheduled air transportation 

has not been provided to the place in aircraft with at least 2 engines and using 2 pilots for at least 60 

consecutive operating days at any time since October 31, 1978.”

A community can waive their right to twin-engine aircraft, as has been the case in nearly all EAS 

communities where SeaPort was selected to provide service.

5 Notwithstanding our track record of

success and belief that the Cessna Caravan is the best platform for serving EAS markets, we

recognize the possibility that a community may strongly prefer the service pattern, pricing approach, 

etc. of SeaPort Airlines but prefers its service to be provided with twin-engine aircraft.

 

4

The cargo pod on the Cessna Caravan has a maximum capacity of 111 cubic feet and 1,090 pounds. In 

comparison, the Piper Chieftain has a maximum capacity of 65 cubic feet and 700 pounds in its nose compartment 

and two wing lockers.

5

Exceptions are Jackson, TN and Athen, GA, where the community had already waived its right to twin-engine 

aircraft when selecting the carrier that SeaPort would later replace.
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February 15, 2013

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To address this, each proposal also provides the option of service flown by piston-twin aircraft, 

specifically the Cessna 402C or Piper Chieftain. These aircraft, which would be flown by two pilots 

and carry 8-passengers, offer virtually identical customer experiences with the physical similarity 

between the two airplanes evident in the photos below.

The aircraft offer similar operating capabilities and have comparable operating economics. To 

calculate the requested level of subsidy with piston-twins, operating and anticipated acquisition costs 

of the Piper Chieftain were used. Based on operating costs of the Piper Chieftain being marginally 

higher than the Cessna 402C, offset by acquisition costs for a Chieftain generally below (and in 

some cases, significantly lower) than those of a Cessna 402C, we believe this provides reasonable 

foundation for requested subsidy level.6

Pricing Strategy & Fare Structure

In all markets, whether served with subsidy or entirely at our own risk, SeaPort employs a fare 

structure that offers a range of price points intended to make our service attractive across the entire 

spectrum of potential customers, including low fares that stimulate additional traffic volume, either 

through net-new customers who previously would not travel by air or at all and/or more travel by 

existing customers. Our highest price point (still reasonable compared to “walk-up” fares typical of 

other airlines) allows a customer to change their travel itinerary or obtain a refund without incurring a 

service charge. 

All of SeaPort’s fares are priced on a one-way basis, including all taxes and fees, and structured as 

follows: 

 The highest price point (branded as “FullFlex”) provides our customers with total flexibility to 

change their travel plans up until departure time or, if they choose, obtain a full refund 

without incurring any service charge. Reservations not cancelled prior to scheduled 

departure prevent SeaPort reselling the seat to another customer. In such instances, 

customers holding FullFlex tickets are charged a $50 no-show fee.

 The lowest price point (branded as “NoFlex”) targets customers who are certain about their 

travel plans. This fare requires an advance purchase of 21-days, is non-refundable, and 

does not permit any changes from the original booked itinerary. 

 

6

If SeaPort is selected to provide EAS using piston-twin aircraft, we believe carrier selections by the Department 

granting discretion to schedule EMB-145s instead of CRJ-200s, and vice versa, provides precedent for a selection 

that permits service to be provided with the Chieftain and/or Cessna 402C.

Piper Chieftain Cessna 402C
OST-1996-1899, OST-1997-2694 & OST-1998-4409

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 In between, SeaPort offers a range of fares (“Free2Flex” and “Flex4Fee”) with price points 

based on how much flexibility a customer has in their travel plans. Except for the two highest 

price points, fares are also subject to capacity controls meaning that the farther in advance a 

reservation is made, the more likely a customer is to get a lower fare. 

The table below summarizes ticket prices (and rules and restrictions applicable to each price point) 

that would be charged by SeaPort at the Arizona communities of Kingman, Page, Prescott, and 

Show Low, assuming a service start of approximately May 1, 2013.

SeaPort Airlines Illustrative Fares at

Kingman, Page, Prescott, and Show Low, Arizona

NOTE: Listed price points include Federal Excise Tax, segments fee, and 9/11 security fee

The levels of requested subsidy in this filing are based on calculations that include the projected 

average fare illustrated next to each city name. Based on limited available data, we have assumed 

no local passengers or revenue between Kingman and Prescott, or passengers traveling between 

the EAS communities via connection at Phoenix.

During the first 30 days of service, SeaPort would offer an introductory fare of $49 (including taxes 

and fees) on every seat, on every flight between Phoenix and each community where SeaPort is 

selected to provide EAS. Our experience in other communities indicates that introductory fares are 

effective in building a local customer base that can speak with genuine knowledge about SeaPort’s 

service and, depending on which carrier we replaced, an opportunity to demonstrate the higher 

service standards of SeaPort, and to draw back customers who may have stopped using their local 

airport during the tenure of the previous carrier.7

This pricing strategy and fare structure as outlined above has proven effective in SeaPort’s other 

EAS markets. Specifically, it allows us to stimulate demand and helps increase enplanement levels 

to the level need for continued EAS eligibility, but the higher price points ensure we do so without 

unduly shifting the “true cost” of air transportation to the Department. We are confident that this fare 

structure will be similarly effective in the Arizona communities.

 

7

This discussion should not be viewed as a commentary on the level of service currently provided by Great Lakes 

Airlines. Rather, and as alluded to above, SeaPort has replaced a number of airlines in EAS markets, including three 

where we reestablished service following an 18 month service gap due to previous carrier ending all operations.

Fare Category 

 Summary of Fare Rules

Booking Class/Fare Basis Code YR B3F M3L Q14L L21X

Advance Purchase (days prior to departure) 0 3 3 14 21

Change Fee $0 $0 $50 $50 Not permitted

Refundable Yes No No No No

Earned Frequent flyer credit over/under base 200% 150% 100% 100% 0%

Published Fares to/from Phoenix and:

Kingman (projected avg = $79.88) $139 $109 $89 $69 $59

Page (projected avg = $91.20) $159 $129 $99 $79 $69

Prescott (projected avg = $57.90) $119 $79 $59 $49 $39

Show Low (projected avg = $74.99) $139 $99 $79 $59 $49

Full Flex Free 2 Flex Flex 4 Fee No Flex
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Interline Connectivity & GDS Availability

SeaPort Airlines tickets are available for purchase by calling our toll-free reservation number, online 

at www.SeaPortAirlines.com, at any travel agent connected to the major global distribution systems 

(GDS), and all of the major online travel agencies and meta-searchers such as Orbitz, Travelocity, 

Expedia, Kayak, Hipmunk, and CheapoAir. 

SeaPort is working toward implementation of an interline agreement with a major airline in the 

second quarter of 2013 which includes E-ticketing and thru baggage check-in. We are in discussions 

with two other major airlines and anticipates beginning implementation of our next agreement shortly 

after completing the current implementation.

In addition, SeaPort presently has an interline paper ticketing agreement with US Airways, the 

dominant network carrier at Phoenix Sky Harbor Airport. If selected to provide EAS at the four 

Arizona communities, SeaPort will seek to transition this agreement to a full interline agreement that 

includes e-ticketing and through baggage check-in. In making this case, we will point to the 

incremental (but meaningful) passenger volumes and revenues that can be generated by the four 

Arizona EAS communities via connections at Phoenix, as well as by our new service at San Diego.

We will seek to accomplish this quickly, however due to the announced merger of US Airways and 

American we anticipate a period time during which the “new American” will not entertain additional 

agreements, instead focusing resources on integration of existing IT platforms.

Staffing Plan & Airport Locations

SeaPort Airlines views the use of our own employees as a critical part of our formula to provide

excellent customer service and build partnerships with our EAS communities.8If selected to provide 

EAS at the four Arizona communities, we would utilize our own personnel to provide customer 

service and ramp operations, and maintain the security screening of passengers and baggage

performed by the Transportation Security Administration (TSA).

SeaPort Airlines plans to establish a pilot base and maintenance base at Phoenix Sky Harbor 

International Airport that will ensure adequate staffing levels and spare parts inventory to achieve a 

high level of dispatch reliability. For unscheduled maintenance at the EAS communities, SeaPort 

Airlines plans to contract with an FAA certified Part 145 repair station for “on-call” maintenance. We 

have had discussions with staff at Phoenix Sky Harbor International Airport and have been assured 

that, if selected to provide EAS at the four Arizona communities, space will be available for our 

operations in the main terminal complex.

SeaPort Airlines operates a reservation call center at Memphis International Airport which is open 

from 5am ET (2am PT) until 11pm ET (8pm PT) Monday through Friday, with reduced hours on 

weekends. The call center is supported by airport ticket counters, which answer reservation calls 

during those periods when a station does not have any flight operations and which contributes to 

maintaining relatively short customer hold times. 

Finally, beginning this summer SeaPort will provide an enhanced level of service to our Hispanic 

customers when we open a call center offering reservation and customer service staffed by

 

8

The exception to this is Jackson, TN where the FBO (owned and operated by the Jackson-Madison County Airport 

Authority) has been contracted to provide passenger check-in and aircraft ramp handling for a market-standard fee 

per departure. This agreement was only entered into after concluding the airport authority shared our view that 

exceptional customer service was a requirement to rebuild traffic following the previous EAS operator, and that its 

geographic position of our Mid-South route system would allow us to maintain a community presence and be 

responsive in a timely manner to customer service issues.
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Reservation Agents with fluent in both English and Spanish. Initially, this center will be open from 

8am to 6pm (Pacific Time), every day except major holidays. As call volume data is monitored,

staffing levels and center hours may be adjusted to better align with call volume patterns that 

emerge. The Spanish-speaking call center will be supplemented in late 2013/early 2014 with a 

Spanish version of the company’s website.

Marketing & Public Relations Strategy

Recognizing the low volume of traffic under the current EAS provider and the requirement of at least 

10 enplanements per day for continued EAS eligibility, SeaPort is prepared to implement a 

comprehensive marketing and public relations strategy. In addition to advertising (primarily print but 

also lots of radio), activities include:

 Local Event Marketing: Recognizing that tactics which include high visibility in key markets has 

been effective for legacy and low-cost airlines, SeaPort has implemented a similar strategy in all 

of its communities. Activities range from annual Easter egg hunts in selected communities, 

presentations to civic groups, displays at local fairs and trade shows, Chamber of Commerce 

memberships, and “Food 4 Flight” food drives that benefit local food banks. SeaPort also makes 

“in kind” donations of tickets to be used by local charities, either for their own travel needs or for 

use in fundraising (i.e., raffles, silent auctions, etc.). This public outreach maintains awareness of 

the local airport, which is often on the edge of a small community and suffers from an “out of 

sight, out of mind” syndrome. It also helps to build the support that SeaPort enjoys in virtually all 

of our communities.

 Social Media: SeaPort has become very proficient in the use of social media to engage our 

customers in a two-way conversation on sites such as Facebook, Twitter, and LinkedIn. Social 

media has proven to be an excellent tool for generating passenger referrals and information 

sharing in our communities. If selected to provide EAS at the Arizona communities, similar 

success is expected. An indicator of SeaPort’s success with social media is the fact that only one

U.S. regional airline has more “Likes” on Facebook than SeaPort, and that airline carries seventimes more passengers each year. 

 FlyerFlex Customer Rewards: To thank those customers who give us repeat business,

SeaPort offers a customer loyalty program called “FlyerFlex.” This program provides a variety of 

benefits to our frequent flyers including free flights, waivers to excess baggage and ticket change 

fees, and, coming in 2013, participation in the TSA’s “Pre-Check” program.

SeaPort has budgeted $25,000 per year for marketing and sales activity at each of the Arizona EAS 

communities. This budget is believed to be more than adequate when factoring the lower media

costs in small markets, assuming continued success stretching paid media buys with trade 

agreements, and understanding that the majority of traffic in EAS markets originates in the EAS 

community, and leveraging our presence on social networking sites, more frequent and interesting 

blogging, opt-in email program, etc., to achieve a high level of customer engagement.
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What Our Customers & Community Partners Say 

The tactics outlined to this point have proven successful in markets and are an integral part of the 

overall strategy that SeaPort will implement if selected to provide EAS at Kingman, Page, Prescott 

and Show Low. The most effective tactic at SeaPort’s disposal, however, is to focus on what we do 

best by building a partnership with the community, operate safely and reliably, and provide 

customers with a great experience from their first visit to our website or call to our reservation call 

center through to baggage claim at the final destination. 

Also to this point, SeaPort has not been anything but shy about touting our record of building 

partnerships with our EAS communities and providing consistently great service at affordable fares, 

We’re not the only ones who are talking. Below is a small sample of the types of comments that our 

customers regularly take the time to submit, as well as from some of our EAS community partners:

Comments Submitted By EAS Communities 

“Eastern Oregon Regional Airport at Pendleton had been struggling since schedule changes 

following 9/11 served by a carrier flying 37 seat aircraft. Low passenger count attributed to poor 

schedule, which then contributed to poorer passenger count. The carrier's solution was to bring in 

larger aircraft and fly to a different hub. The Airport and community balked at this suggestion and 

went in search of alternatives. The solution found through the EAS process was SeaPort Air flying a 

9 passenger Pilatus. The passengers have welcomed the new service, much better schedule, and 

are elated with ‘no security check’ and stand by time. Passengers today will say, ‘I love the service’, 

‘great customer service,’ and ‘I'm sure glad I finally tried it, cause I'll be back’

“In our particular market, the 9 passenger aircraft is perfect, and SeaPort Air provides the schedule, 

the professionalism, and customer service we need and desire.”

− Larry Dalrymple (Retired)

Airport Manager

Pendleton Regional Airport

“I understand the importance of having dependable, reliable air service with an affordable cost. Not 

only will SeaPort Airlines meet these needs, but excel by providing great customer service, a high 

level of community involvement, and an eagerness to become a community partner”.

− Luci Larson

Former Mayor of Salina & 

Owner of Action Travel

Salina, KS

“South Arkansas Regional Airport and the entire South-central Arkansas region suffered from the 

loss of air service previously provided by Mesa Airlines in the Spring of 2008. Unreliable service and 

a poor schedule were already negatively impacting enplanements before Mesa pulled out, but at that 

point, the nearest option for air service of any kind was almost a two hour drive away. After sorting 

through applications from many different interested carriers, the El Dorado Airport Commission, 

along with El Dorado’s Mayor, chose SeaPort to restore air service to South Arkansas. This was the 

beginning of a great partnership between SeaPort and our local community. 
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February 15, 2013

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“Working with SeaPort has been nothing but a pleasure from the bottom to the top of their 

organization, and their commitment to excellence shines through the glowing comments that I hear 

from people who fly with them. In addition to hearing comments from others, I have flown SeaPort 

on several occasions, and have come away from the experience thinking ‘This is how all air service 

should be.”

− Josh Zylks

Airport Manager

South Arkansas Regional Airport 

(Goodwin Field)

Customer Comments (Submitted via Letter, Comment Card, or via Website)

“I'm a SeaPort MKL-BNA commuter. My job is on the 5 day 4 night plan and I head out to work sites 

across the nation on Monday and fly home in time for dinner on Friday. Thanks Seaport for the 

service it beats using a car and parking at the airport.”

─ Calvin Phillips

We needed to change our reservation with SeaPort after having booked with priceline.com. Priceline 

was less than helpful. Frustrated I emailed SeaPort with our needs about 10:30PM. The next 

morning at 9:00 we got a call from Cindy in reservations advising that our request had been taken 

care of and was already booked. I NEVER EXPECTED THIS LEVEL OF SERVICE! We are 

satisfied and grateful for the intense personal attention we received.

─ Michael McDonell 

“My husband and I recently had to make a fast trip to Dallas for the funeral of a dear friend. I was not 

interested in making that drive over a fast weekend. Then I remembered that SeaPort had recently 

started flights between Hot Springs and Dallas. I called SeaPort, Jim and Bob were so quick to get 

us booked, last minute so we could fly down and attend the funeral and visit with family and friends 

that we don't get to see very often. 

Everyone was so friendly, helpful and professional. It was a dream trip, even to attend a funeral. The 

pilot going down was so kind. When he found out that my husband had been a ball turret gunner in 

WWII, he gave him a set of headphones so he could listen to the communication between the pilots 

and the air traffic controllers. To say the least, my husband was impressed. It was such a blessing to 

have been taken care of in such a kind and professional manner, especially under the circumstances 

of our trip. Thank you, Jim, Bob, Chris, Doug, Rodney and Michael.”

− Catherine Martin

“For two decades I have been picking my mother up at the airport and for two decades I have been 

met with the defeated, hang-dog look that the ordeal of air travel has given her. I guess it pretty 

much does it to all of us, but (as she is well into her 80's) I worry about the toll it takes on her more 

and more lately.
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February 15, 2013

Page | 13

“When I picked her up today from her SeaPort flight K52325 from Dallas and saw she was smiling, 

you could have knocked me over with a feather! She couldn't stop raving about how pleasant the 

flight was. Let me be clear. My mother is a tough-as-nails Mid-western Yankee from the old school 

who has been around the world a couple of times since the late 1940's. She doesn't bestow idle 

praise and she seldom raves.

“I'm in the service industry myself and I know how often complaints come through. I just want to be 

sure to let you know how well everyone did on this flight. In the future, I will look to SeaPort first for 

my travel needs and will spread the good word to my friends. 

“A smile and a kind word go a long way y'all. Thank you for getting this one so right.”

− Mark Davis Peterson

“I cannot say enough wonderful things about my experience with your company. My son, who is 7, 

flew for the first time as an unaccompanied minor. Let’s just say that my son and I were very 

nervous. 

On arrival to Kansas City I was welcomed with front row parking and an employee that was 

welcoming and reassuring. When his plane landed the pilot, Demetrius came and talked to me and 

my son for twenty minutes about safety and just reassuring me. He then allowed me to walk my son 

to the plane and see him off. Demetrius started buckling my son into his seat and my son started to 

cry, I could see him reassuring him that everything was going to be ok. All of your employees were 

wonderful and were conscious of safety and the well-fare of my son. My son’s flights from Kansas 

City to Memphis were wonderful and because of the extra attention he feels comfortable and 

unafraid of flying by himself. 

You have made me a lifelong customer. My son will be flying at least once a year to see his 

Grandparent. I have told all my friends, family and co-workers about your company and how if they 

have an opportunity they should fly with SeaPort. Thank You again for making a nervous mother and 

a scared child feel comfortable.”

− Misty Strayhorn

“I would like to tell you of my recent experience at your airline in Memphis, TN. On the evening of 

September 25th I took my friend to the airport to catch her flight to Harrison, AR. I went inside to help 

her with her bags and to say goodbye. Returning to my car to leave it would not start. I went back to 

the waiting area to ask the lady at check in if someone that worked there might have jumper cables. 

Waiting a few minutes I saw a pilot friend of mine, Mark Emrath. He had jumper cables but could not 

get my car to start. He went for help and brought back three mechanics with tools. Mark finally left to 

go home after staying to help for over 30 minutes. The other men kept troubleshooting and finally 

removed the battery to have it tested first before making any diagnosis. My daughter had left work to 

come help me by this time and we went to AutoZone and purchased a replacement battery. When 

we returned to the airport the men put my new battery in and checked the car fluids and other parts 

letting me know I needed to have some things fixed. As a single lady it is always frustrating when I 

have car issues, so I was extremely grateful for the help I received at Seaport. The mechanics at the 

Memphis airline were so professional, courteous, and knowledgeable that I wanted to take the time 

to let you know how much I appreciated the SeaPort Airline employees helping me.”

─ Nita Carr
OST-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 14

On Saturday June 11, 2005, 17-year-old Theo Allen died after his glider crashed north of Pangborn 

Memorial Airport in Wenatchee, Washington. The following letter was received from his mother in 

June 2012:

“I wanted to thank your airline and pilots for one of the most amazing Mother’s Day gifts. On the 

flight from Yakima to Wenatchee they diverted from the typical route and flew over the ridge my 

son’s plane went down in hopes of finding a marker. To see the world from ‘Theo’s’ viewpoint that 

day was extremely healing. I will never forget this kindness and have told many of my friends about 

your airline.”

─ Susan Allen
OST-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 15

Service Proposal Details 

Service Pattern & Frequency Levels

Provided over the following pages are specific details of the EAS service that SeaPort proposes to 

provide on a subsidized basis at Kingman, Page, Prescott, and Show Low. 

Service Focus: Phoenix

The proposals of SeaPort to provide EAS at the Arizona communities of Kingman, Page, Prescott 

and Show Low focus on service to Phoenix Sky Harbor International Airport (PHX), where customers 

will be provided excellent connectivity with the national air transportation system.

Phoenix Sky Harbor International Airport is served by 15 scheduled airlines that collectively operate 

an average of more than 1,000 departures to over 100 nonstop destinations, including nonstop 

flights to London where a single onward connection provides access to all of the major government 

and business centers of Europe.

9

Phoenix Sky Harbor International Airport

Scheduled Air Service – February 2013

SOURCE: Innovata, LLC schedule database 

 

9

The following airlines presently serve PHX: Aeromexico, Air Canada, Alaska Airlines, American Airlines, British 

Airways, Delta Air Lines, Frontier Airlines, Great Lakes Airlines, Hawaiian Airlines, JetBlue Airways, Southwest 

Airlines, Sun Country Airlines, United Airlines, US Airways, and WestJet.
OST-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 16

A major strength of Phoenix in its role as an access point to the national air transportation system 

results from the nearly three decade long, back and forth battle between Southwest Airlines and US 

Airways (including predecessor America West Airlines) for control of the Phoenix market. This

seemingly permanent escalation of the competitive environment has resulted in fares at Phoenix 

being consistently below the national average and among the lowest in its peer group of Top 20 U.S. 

Airports. These data points on illustrated on the following table:

The large number of flights and nonstop destinations, along with relatively easy access to low fares 

that results from very strong competition, positions Phoenix Sky Harbor International Airport as an

ideal point for providing EAS communities connectivity to the national air transportation system.

Equally important, however, is that Phoenix is the capitol city of Arizona, creating demand for 

government related travel. As the largest metropolitan area in Arizona and among the largest in the 

Southwestern United States, Phoenix is also a major center for banking, medical services, legal 

services, higher education, and arts, entertainment and cultural activities. 

SeaPort Airlines understands that flight routings and schedules designed to serve demand for travel 

to/from state capitols is not a primary objective of the EAS program. However, in two of the Arizona 

markets – Kingman and Show Low – there exists a DOT requirement to increase average daily 

enplanements and/or lower the level of subsidy as measured on per passenger basis in order to 

maintain eligibility for the EAS program. SeaPort believes that the additional passengers traveling

to/from the state capitol can be served without any negative impact on connectivity to the national air 

transportation system via PHX and could play a significant role (and possibly determining role) in 

ensuring that flights subsidized under the EAS continue at each community.

3Q 2000 3Q 2009 3Q 2010 3Q 2011 3Q 2012 2000-2012 2011-2012

Avg Average Domestic Fare $337 $307 $340 $361 $367 9.1% 1.8%

1 9 1 Ft. Lauderdale, FL $243 $228 $245 $257 $261 7.1% 1.6%

2 0 2 Las Vegas, NV $223 $232 $257 $268 $262 17.3% -2.4%

1 5 3 Orlando, FL $266 $225 $242 $263 $268 0.9% 1.9%

4 4 Denver, CO $436 $284 $298 $316 $316 -27.5% 0.1%

1 2 5 Baltimore, MD $279 $250 $285 $314 $316 13.2% 0.7%

1 1 6 Phoenix, AZ $269 $276 $310 $317 $323 20.4% 2.1%

9 7 New York LaGuardia, NY $351 $291 $317 $341 $334 -5.0% -2.1%

3 8 Atlanta, GA $328 $299 $328 $360 $348 6.2% -3.4%

1 8 9 San Diego, CA $304 $293 $328 $352 $353 15.9% 2.6%

5 1 0 Boston, MA $414 $319 $335 $343 $364 -12.2% 6.0%

2 1 1 Chicago O'Hare, IL $416 $327 $361 $371 $379 -8.7% 23.0%

7 1 2 Seattle/Tacoma, WA $342 $323 $354 $368 $386 12.9% 4.9%

1 0 1 3 New York JFK, NY $433 $318 $359 $387 $388 -10.3% 0.3%

1 3 1 4 Philadelphia, PA $421 $303 $345 $383 $391 -7.3% 1.8%

1 7 1 5 Detroit, MI $332 $313 $356 $379 $393 18.3% 3.6%

1 1 6 Los Angeles, CA $352 $349 $380 $391 $398 13.0% 1.7%

6 1 7 San Francisco, CA $446 $342 $379 $401 $400 -10.4% -0.1%

8 1 8 Dallas-Fort Worth, TX $441 $358 $403 $407 $419 -4.8% 3.1%

1 6 1 9 Minneapolis/St. Paul, MN $379 $322 $392 $407 $421 11.2% 3.5%

1 4 2 0 Newark-Liberty, NJ $440 $380 $469 $467 $472 7.1% 0.1%

SOURCE: Bureau of Transportaiton Statistics, Domestic Air Fare Report for 3Q2012

Raked by 

Domestic 

Pass. 

Originations 

in CY 2111

Airport 

Average Domestic Itinerary Fare ($USD) Pct. Change 

Ranked by 

Avg Fare 

(Lowest to 

Highest) in 

3Q2012

Ranking of Top 20 U.S. Airports for Domestic Passenger 

Originations On Basis of Lowest Average Fare
OST-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 17

Frequency Levels and Impacts on Traffic

In Order 2013-1-8, the Department directed that carrier “proposals should provide sufficient capacity 

to accommodate historical levels of traffic.” The lesser number of seats on SeaPort’s aircraft relative 

to those of the current EAS operator, results in a higher number of frequencies than historically

provided. Specifically, SeaPort proposes the following service patterns and frequency levels at the 

four Arizona communities:

 Kingman: 18 weekly roundtrips to Phoenix operated on one-stop basis over Prescott.

 Page: 18 weekly roundtrips to Phoenix for 38 weeks each year, increasing to 32 roundtrips 

for 14 weeks each year in response to demand from seasonal tourism. 

 Prescott: 30 weekly roundtrips to Phoenix, of which 18 are shared with upline service to 

Kingman.

 Show Low: 26 weekly roundtrips to Phoenix.

SeaPort’s strategy to focus service on Phoenix creates the opportunity to satisfy demand for travel to 

and from the state capitol, a specifically a schedule that allows for a morning flight in, a full day of 

business, and return home the same evening. Current schedules in the Arizona markets do not allow 

for such trip and it is the belief of SeaPort that this (currently unmet) demand for business travel to

and from Phoenix could produce additional passenger traffic which, in the case of Kingman and 

Show Low, could prove to be that which assures the community’s continued participation in the EAS 

program.

Capacity Levels Sufficient to Meet Historical and Projected Traffic Levels

In Order 2013-1-8, the Department directed that “proposals should provide sufficient capacity to 

accommodate historical levels of traffic.”

The table on the next page compares traffic over the past three years at Kingman, Page, Prescott, 

and Show Low to SeaPort’s projections of traffic at each of the EAS communities. In all markets, 

SeaPort projects traffic levels higher than in the most recent year of historical data.

10 This is directly 

attributable to the higher flight frequencies in SeaPort’s proposal relative to those currently provided 

and changes to patterns which focus on service to Phoenix providing 1) improved connectivity via 

PHX with the national air transportation system, and 2) ability to complete a same-day return 

business trip to Phoenix and vice versa. 

 

10 Historical year data was provided by the Department in Appendix B to Order 2013-1-8.
OST-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 18

Historical Traffic Levels v Projected Traffic Levels

Proposal of SeaPort Airlines to Provide EAS at 

Kingman, Page, Prescott, and Show Low, AZ

The bar graph below provides a side-by-side comparison of projected traffic levels and the number 

of seats that SeaPort’s EAS proposal provides in each market, and clearly illustrates that the 

proposed service levels provide sufficient capacity to meet anticipated demand. In addition:

 The projected number of passengers and available seats in each market was calculated on a bidirectional basis when preparing the graph on the next page, and equates to twice the 

omnidirectional projections on the table above.

 Data in Page - Phoenix market is presented on the average daily basis over a full calendar year

and includes increased frequencies during the peak demand summer tourism months.

 Calculations of traffic onboard Prescott - Phoenix flights includes traffic originating or terminating

at Kingman and routed over Prescott with a service pattern that offers one-stop service to 

Phoenix.

SeaPort Airlines Projected Traffic and Capacity 

Proposal to Provide EAS at Kingman, Page, Prescott and Show Low, AZ

EAS Market Annual 

Passengers

Avg Daily 

Enplanes

Annual 

Passengers

Avg Daily 

Enplanes

Annual 

Passengers

Avg Daily 

Enplanes

Annual 

Passengers

Avg Daily 

Enplanes

Kingman, AZ 2,069 3 1,878 3 2,063 4 4,420 7

Page, AZ 12,067 19 12,262 20 12,374 20 12,418 20

Prescott, AZ 19,909 32 10,185 16 10,495 17 10,984 18

Show Low, AZ 6,565 10 6,319 10 8,360 13 10,617 17

COMBINED TOTAL 40,610 64 30,644 49 33,292 54 38,439 62

Year Ending 3Q2010 Year Ending 3Q2011 Year Ending 3Q2012 SeaPort Projections

46

77

63 67

14

46

40

34

0

20

40

60

80

100

Kingman - Prescott Prescott - Phoenix Page - Phoenix Show Low - Phoenix

Avg Daily Seats Avg Daily Passengers

Segment Load 

Factor = 30.2%

Segment Load 

Factor = 59.6% Segment Load 

Factor = 63.1%

Segment Load 

Factor = 50.8%
OST-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 19

Plans to Maintain Continued EAS Eligibility at Kingman and Show Low 

In Order 2013-1-8, the Department noted traffic levels at Kingman and per passenger subsidies at

Show Low represented threats to continued EAS eligibility for these communities. As directed by the 

Department, the discussion below outlines how SeaPort intends to specifically address the 

challenges at Kingman and Show Low.

Kingman

Specific to Kingman, the Department noted that as a result of its location “only about 121 miles from 

Las Vegas, the community must meet the 10-enplanement-a-day threshold for EAS to continue after 

FY2013 or otherwise face termination of its eligibility to receive EAS, barring a waiver from the 

Secretary.”11 The Department pointed to FY2012, during which Kingman generated 2,063 

passengers (average of 3 enplanements per day) which is below the level needed to maintain EAS 

eligibility. The Department also noted that it “is prohibited from subsidizing air service at a 

community where the subsidy per passenger exceeds $200, unless the community is more than 210 

highway miles from the nearest large or medium hub airport. Kingman’s subsidy per passenger is 

$566, well above the $200 ceiling.” 

Instead of terminating Kingman’s EAS eligibility, the Department solicited proposals that it will

evaluate prior to committing to a two-year contract or making a final determination regarding 

Kingman’s continued eligibility for EAS. In Order 2013-1-8, the Department established the 

expectation that carriers “detail in their proposals how they will work with the community in getting 

the subsidy per passenger under the $200 cap” and that proposals “provide a discussion on how 

they would attract enough passengers to meet the 10 enplanements per day statutory requirement in 

order for Kingman to remain eligible to continue receiving EAS after FY2013. 

In response, SeaPort provides the following details of how we plan to bring subsidy levels at 

Kingman below $200 per passenger and increase traffic to meet statutory requirement of 10 

enplanements per day:

 SeaPort’s service proposal at Kingman offers 18 weekly departures to Phoenix on a onestop basis via with Prescott, with a well-balanced choice of departure times intended to

improve access to the national air transportation system.

 SeaPort’s 18 weekly departures represent a 38% increase over the 13 weekly departures 

that Great Lakes presently operates to Los Angeles.

 Focusing flights at Phoenix acknowledges the city’s role as the state capitol and major center 

of banking, medical, and legal activity, as well as for entertainment and cultural activities. 

The current service pattern to Los Angeles leaves this demand unmet.

 SeaPort’s fares between Kingman and Phoenix will average $79.88, with a range of $59 to 

$139. These price points should provide sufficient motivation to residents and businesses in 

Kingman to show their support for local air service with the purchase of tickets. The fares are 

 

11 Recent legislative amendments to EAS program require that each community receiving EAS subsidized flights 

maintain an average of 10 enplanements or more per service day during the most recent fiscal year. There are 

exemptions for communities in Alaska and Hawaii, as well as in the Lower 48 for communities more than 175 driving 

miles from the nearest large or medium hub airport. Additionally, the Secretary has the authority to waive the 10 

passenger requirement, if a community can demonstrate that the reason passengers per day is less than 10 

passengers is due to temporary market conditions. See 49 U.S.C. §41731(e).
OST-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 20

not so low that they have the unintended consequence of holding subsidy levels above $200 

per passenger.

 The pairing of Kingman with Prescott to provide one-stop service to Phoenix allows EAS to

be maintained at a lower level of required subsidy than would be required if nonstop service 

were offered.12 

 Recognizing the currently low enplanement levels generated at Kingman, SeaPort plans to 

implement an advertising and public relations strategy proven to be effective in rebuilding 

traffic at other EAS communities, such as at Jackson, TN and Athens, GA where it has fallen 

on SeaPort, to rebuild traffic after the previous carrier decimated enplanement levels with 

poor service. Many of these marketing and PR tactics were outlined earlier in this filing, 

including the importance of developing a partnership with each EAS community that results 

in a shared commitment to achieving specific service and enplanement levels to ensure

continued eligibility for EAS.

While the above summary is responsive to DOTs request for explanation of how SeaPort intends to 

achieve an average of 10 enplanements per day and per passenger subsidy levels below $200, we 

anticipate our experience at Kingman will mirror our experiences at other EAS communities. Simply 

put, it will be a process and not an event. With this as a basis, SeaPort expects that:

 Kingman should generate an average of 7 daily enplanements by the end of the first year of

a two-year contract. While this is more than double the current 3 daily enplanements that 

occur at Kingman, it is below the 10 daily enplanement average required to maintain the 

community’s EAS eligibility. Nonetheless, in the second year SeaPort anticipates positive 

enplanement growth to continue, driven by greater brand awareness, positive “word of 

mouth” buzz as customers share their positive experiences, and enhanced connectivity as 

additional interline agreements that include e-ticketing and through baggage check-in are 

implemented, resulting in our achieving 10 enplanements per day.

 SeaPort’s subsidy request at Kingman approximates $238 per passenger which, while

substantially below the $566 per passenger subsidy currently paid, remains above the $200 

ceiling.13 As with daily enplanements, SeaPort expects continued growth during the second 

year of service that will result in Kingman satisfying all metrics used to determine a 

community’s continued eligibility for EAS.

Show Low

With respect to Show Low, the Department again noted that it is “prohibited from subsidizing air 

service at a community where the subsidy per passenger exceeds $200, unless the community is 

more than 210 highway miles from the nearest large or medium hub airport. Show Low is 154 miles 

from Phoenix and based on FY2012 data (October 1, 2011, through September 30, 2012), 8,360 

passengers were enplaned and deplaned at Show Low. The annual subsidy amount for Show Low is 

$1,719,058. Therefore, the subsidy per passenger at Show Low is $206, just over the subsidy per 

passenger ceiling.”

 

12 Ideally, this should be viewed as interim service pattern with the long-term objective being building traffic to a level 

that allows for either all nonstop service or combination of one-stop and nonstop service at subsidy levels that are 

compliant with statutory limits and minimums required for continued participation in the EAS program.

13 Subsidy would be $215 per passenger assuming operations with piston-twin aircraft.
OST-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 21

Similar to Kingman, the Department included in Order 2013-1-8 a request for EAS proposals at 

Show Low rather than terminate the community’s participation in the program. The Department 

states that it will evaluate the proposals before deciding whether it will commit to a two year contract 

or make a final determination with respect to Show Low’s EAS eligibility and, again similar to 

Kingman, requests that carriers explain how they intend to reach per passenger subsidy levels 

below the $200 ceiling. 

In response to that request, SeaPort states that a strategy of higher frequencies and service focused 

at Phoenix (both for the purpose of connectivity with the national air transportation system and

business travel to/from Phoenix) will contribute to reasonable enplanement growth at Show Low.

This improved service pattern will be supported with many of the same marketing and PR strategies 

proven effective in other EAS markets served by SeaPort, and as outlined earlier in this filing.

Based on the improved service pattern supported with proven marketing tactics, SeaPort projects it 

will carry 10,617 passengers annually between Show Low and Phoenix, a 27% improvement over 

the 8,360 passengers carried in the YE 2Q2012. Assuming an average fare of $74.99, SeaPort is 

requesting annual subsidy at Show Low of $2,107,694. This equates to $199 per passenger, just 

below the $200 ceiling, with the expectation of lower subsidy amounts in subsequent contract 

periods.

14

Illustrative Flight Schedules

Illustrative flight schedules for each of the four Arizona communities are provided below. If selected 

to provide EAS, SeaPort Airlines will solicit community comment on proposed schedules and, as

much as practical, incorporate these comments into final schedules which are published and offered 

for sale to the public. 

Note that with the exception of Kingman, which is tied to Prescott, schedules for each community are 

presented on a standalone basis reflecting the standalone basis of our proposal to provide EAS at 

Kingman, Page, Prescott, and Show Low. In addition, an alternative schedule for Prescott is 

provided which would only be a valid option if SeaPort is not selected to provide EAS at Kingman.15

Finally, for Page we have provided schedules that reflect an adjustment in frequency of 18 weekly 

roundtrips during the off-peak seasons (38 weeks each year) to 32 weekly roundtrip during the peak 

tourism season (14 weeks each year).

The schedules below assume operations with Cessna Caravans but are indicative of those that 

would be offered if selected to provide EAS with piston-twins.16 Block times to Page and Show Low 

would be marginally shorter if flown with piston-twins, and negligibly different on the PhoenixPrescott-Kingman routing. 

We believe the schedule outlined for each community represents a solid approach to providing of 

EAS through focused connectivity with the national air transportation system, capitalizing on 

potential local market demand to drive increased enplanements, and optimizing the benefits of 

greater frequencies with a well-balanced choice of departure times.

 

14 Subsidy would be $191 per passenger assuming operations with piston-twin aircraft.

15 There is a service proposal and subsidy request in the next section for the same contingency.

16 Subsidy requests specific to operations using piston-twins are provided in the next section.
OST

-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 22 Depart Arrive Frequency Stops Depart Arrive Frequency Stops

5:30am 7:20am ExSun 1 8:00am 9:50am ExSun 1

11:30am 1:20pm ExSun 1 2:00pm 3:50pm ExSat 1

4:10pm 6:00pm ExSat 1 7:30pm 9:20pm ExSat 1

6:35am 7:20am ExSun 0 8:00am 8:45am ExSun 0

11:00am 11:45am ExSat 0 10:00am 10:45am ExSat 0

12:35pm 1:20pm ExSun 0 2:00pm 2:45pm ExSat 0

5:15pm 6:00pm ExSat 0 5:15pm 6:00pm ExSun 0

6:30pm 7:15pm ExSun 0 7:30pm 8:15pm ExSat 0

OST-1996-1899

Aircraft Type: Cessna Caravan, Two-Pilots

18 Weekly RTs: Kingman - Phoenix (1-stop via Prescott)

30 Weekly RTs: Prescott-Phoenix

Kingman to Phoenix Phoenix to Kingman

Prescott to Phoenix Phoenix to Prescott

Depart Arrive Frequency Stops Depart Arrive Frequency Stops

6:00am 6:45am ExSun 0 8:00am 8:45am ExSun 0

10:00am 10:45am Daily 0 12:15pm 1:00pm Daily 0

2:00pm 2:45pm Daily 0 3:30pm 4:15pm Daily 0

5:00pm 5:45pm ExSat 0 6:30pm 7:15pm ExSat 0

Aircraft Type: Cessna Caravan, Two-Pilots

OST-1996-1899

(Stand Alone Proposal Independent of Kingman)

26 Weekly RTs: Prescott-Phoenix

Prescott to Phoenix Phoenix to Prescott

Depart Arrive Frequency Stops Depart Arrive Frequency Stops

5:30am 7:20am ExSun 0 8:30am 10:20am ExSun 0

11:00am 12:50pm ExSun 0 10:00am 11:50pm Daily 0

12:30pm 2:20pm Daily 0 1:30pm 3:20pm ExSat 0

4:00pm 5:20pm ExSat 0 3:00pm 4:50pm Daily 0

5:30pm 6:50pm Daily 0 6:30pm 8:20pm ExSat 0

Depart Arrive Frequency Stops Depart Arrive Frequency Stops

5:30am 7:20am ExSun 0 8:30am 10:20am ExSun 0

11:00am 12:50pm ExSun 0 1:30pm 3:20pm ExSat 0

4:00pm 5:50pm ExSat 0 6:30pm 8:20pm ExSat 0

Kingman to Phoenix Phoenix to Kingman

18 Weekly RTs: Off-Peak Period (38 weeks)

Kingman to Phoenix Phoenix to Kingman

OST-1997-26944

PEAK & OFF-PEAK SCHEDULES: Page, Arizona

Cessna Caravan, Two-Pilots

32 Weekly RTs: Peak Period (14 weeks)
OST-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 23

.

Depart Arrive Frequency Stops Depart Arrive Frequency Stops

6:00am 7:00am ExSun 0 8:00am 9:00am ExSun 0

9:30am 10:30am Daily 0 11:15am 12:15pm Daily 0

1:00pm 2:00pm Daily 0 3:30pm 4:30pm Daily 0

5:30pm 6:30pm ExSat 0 7:30pm 8:30pm ExSat 0

Show Low to Phoenix Phoenix to Show Low

OST-1998-4409

Aircraft Type: Cessna Caravan, Two-Pilots

26 Weekly RTs: Show Low-Phoenix
OST-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 24

Subsidy Request & Supporting Calculations

The following pages contain service proposals of SeaPort to provide EAS at the Arizona 

communities of Kingman, Page, Prescott, and Show Low, and include data to support the requested 

subsidy levels. Specifically:

 With the exception of Kingman tied to Prescott each proposal is submitted on a standalone 

basis.

 An alternative proposal for Prescott is provided which allows for the selection of SeaPort in 

that community independent of selection at Kingman. However, as above bullet point 

indicates, service to Kingman is contingent on SeaPort being selected to provide service 

both there and at Prescott.

 For each community, we are offering a single service pattern. However, each service pattern 

has two proposals: one that assumes operations with the Cessna Caravan and one that 

assumes operations using piston-twin aircraft (either Piper Chieftain or Cessna 402C). If a 

community recommends to the Department that SeaPort be selected to provide EAS, we 

respectfully request that the recommendation include aircraft type.

 While proposals are being submitted on a standalone basis, if selected to provide EAS at all 

four of the Arizona communities using the same type of aircraft, SeaPort will realize 

economic efficiencies which would result in a lower total subsidy request. A contingent 

subsidy request for this scenario is also provided herein. 

We believe the service proposals provide each of the Arizona communities the assurance of reliable, 

affordable, and customer-focused air service, and look forward to partnering with the Department

and community leaders in Kingman, Page, Prescott and Show Low to see that become a reality.

Respectfully submitted,

Timothy Sieber

Vice President – Commercial

SeaPort Airlines, Inc.
OST

-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 25

Proforma Data

Operating Projections

Average Sector Length (sm) 90

Scheduled Departures 4,888

Scheduled Block Hours 3,822.0

Projected Completion Factor 98.5%

Projected Completed Departures 4,815

Projected Completed Block Hours 3,764.7

Passenger Projections

Projected Passengers 15,404

Passengers per Departure 3.2

Projected Average Fare $64.21

Revenue Passenger Miles (RPMs) 1,393,243

Available Seat Miles (ASMs) 3,919,252

Projected Load Factor 35.5%

Financial Projections

Revenues

Passenger Ticket Revenues $989,043

Ancillary Revenues $19,781

Total $1,008,824

Expenses

Flight Operations $383,996

Aircraft Ownership/Lease $576,000

Fuel & Oil $1,036,790

Sales & Marketing $50,000

Traffic Servicing $592,409

Insurance $60,235

Maintenance $704,206

Sub-Total - Direct $3,403,636

Indirect $510,545

Total Expenses $3,914,182

Projected Operating Profit/(Loss) ($2,905,358)

Subsidy Calculations

Operating Loss $2,905,358

Economic Return @ 5% $195,709

Required Subsidy $3,101,067

Subsidy per Departure $644.09

Subsidy per Passenger $201.32

Avg. Enplanements per Operational Day 24.7

30 Weekly RTs: Prescott-Phoenix

OST-1996-1899

Aircraft Option: Cessna Caravan, Two-Pilots

18 Weekly RTs: Kingman - Phoenix (1-stop via Prescott)
OST

-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 26

Proforma Data

Operating Projections

Average Sector Length (sm) 87

Scheduled Departures 2,704

Scheduled Block Hours 2,028.0

Projected Completion Factor 98.5%

Projected Completed Departures 2,663

Projected Completed Block Hours 1,997.6

Passenger Projections

Projected Passengers 10,984

Passengers per Departure 4.1

Projected Average Fare $57.90

Revenue Passenger Miles (RPMs) 955,608

Available Seat Miles (ASMs) 2,085,474

Projected Load Factor 45.8%

Financial Projections

Revenues

Passenger Ticket Revenues $635,974

Ancillary Revenues $12,719

Total $648,693

Expenses

Flight Operations $172,380

Aircraft Ownership/Lease $384,000

Fuel & Oil $558,511

Sales & Marketing $25,000

Traffic Servicing $315,069

Insurance $31,961

Maintenance $378,063

Sub-Total - Direct $1,864,985

Indirect $279,748

Total Expenses $2,144,732

Projected Operating Profit/(Loss) ($1,496,039)

Subsidy Calculations

Operating Loss $1,496,039

Economic Return @ 5% $107,237

Required Subsidy $1,603,276

Subsidy per Departure $601.96

Subsidy per Passenger $145.96

Avg. Enplanements per Operational Day 17.6

OST-1998-1899

(STAND ALONE SERVICE OPTION)

26 Weekly RTs: Prescott-Phoenix

Aircraft Option: Cessna Caravan, Two-Pilots
OST

-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 27

Proforma Data

Operating Projections

Average Sector Length (sm) 243

Scheduled Departures 2,208

Scheduled Block Hours 4,048.0

Projected Completion Factor 98.5%

Projected Completed Departures 2,175

Projected Completed Block Hours 3,987.3

Passenger Projections

Projected Passengers 12,418

Passengers per Departure 5.7

Projected Average Fare $91.20

Revenue Passenger Miles (RPMs) 3,017,574

Available Seat Miles (ASMs) 4,756,463

Projected Load Factor 63.4%

Financial Projections

Revenues

Passenger Ticket Revenues $1,132,522

Ancillary Revenues $22,650

Total $1,155,172

Expenses

Flight Operations $338,919

Aircraft Ownership/Lease $576,000

Fuel & Oil $1,098,097

Sales & Marketing $25,000

Traffic Servicing $347,504

Insurance $63,796

Maintenance $959,738

Sub-Total - Direct $3,409,055

Indirect $511,358

Total Expenses $3,920,413

Projected Operating Profit/(Loss) ($2,765,241)

Subsidy Calculations

Operating Loss $2,765,241

Economic Return @ 5% $196,021

Required Subsidy $2,961,262

Subsidy per Departure $1,361.57

Subsidy per Passenger $238.47

Avg. Enplanements per Operational Day 19.9

OST-1997-26944

18 Weekly RTs (Off-Peak)/32 Weekly RTs (Peak)

Page, AZ - Phoenix (Cessna Caravan)
OST

-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 28

Proforma Data

Operating Projections

Average Sector Length (sm) 129

Scheduled Departures 2,704

Scheduled Block Hours 2,704.0

Projected Completion Factor 98.5%

Projected Completed Departures 2,663

Projected Completed Block Hours 2,663.4

Passenger Projections

Projected Passengers 10,617

Passengers per Departure 4.0

Projected Average Fare $74.99

Revenue Passenger Miles (RPMs) 1,369,593

Available Seat Miles (ASMs) 3,092,254

Projected Load Factor 44.3%

Financial Projections

Revenues

Passenger Ticket Revenues $796,169

Ancillary Revenues $15,923

Total $812,092

Expenses

Flight Operations $229,840

Aircraft Ownership/Lease $384,000

Fuel & Oil $744,682

Sales & Marketing $25,000

Traffic Servicing $404,097

Insurance $42,615

Maintenance $587,809

Sub-Total - Direct $2,418,042

Indirect $362,706

Total Expenses $2,780,748

Projected Operating Profit/(Loss) ($1,968,656)

Subsidy Calculations

Operating Loss $1,968,656

Economic Return @ 5% $139,037

Required Subsidy $2,107,694

Subsidy per Departure $791.34

Subsidy per Passenger $198.52

Avg. Enplanements per Operational Day 17.0

26 Weekly RTs: Show Low-Phoenix

Aircraft Option: Cessna Caravan, Two-Pilots

OST-1998-4409
OST

-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 29

Proforma Data Proforma Data Proforma Data Proforma Data

Operating Projections Operating Projections Operating Projections Operating Projections

Average Sector Length (sm) 129 Average Sector Length (sm) 90 Average Sector Length (sm) 243 Average Sector Length (sm) 202Scheduled Departures 2,704 Scheduled Departures 4,888 Scheduled Departures 2,208 Scheduled Departures 9,800Scheduled Block Hours 2,704.0 Scheduled Block Hours 3,822.0 Scheduled Block Hours 4,048.0 Scheduled Block Hours 10,574.0Projected Completion Factor 98.5% Projected Completion Factor 98.5% Projected Completion Factor 98.5% Projected Completion Factor 98.5%Projected Completed Departures 2,663 Projected Completed Departures 4,815 Projected Completed Departures 2,175 Projected Completed Departures 9,653Projected Completed Block Hours 2,663.4 Projected Completed Block Hours 3,764.7 Projected Completed Block Hours 3,987.3 Projected Completed Block Hours 10,415.4

Passenger Projections Passenger Projections Passenger Projections Passenger Projections

Projected Passengers 10,617 Projected Passengers 15,404 Projected Passengers 12,418 Projected Passengers 38,439 Passengers per Departure 4.0 Passengers per Departure 3.2 Passengers per Departure 5.7 Passengers per Departure 4.0 Projected Average Fare $74.99 Projected Average Fare $64.21 Projected Average Fare $91.20 Projected Average Fare $73.60Revenue Passenger Miles (RPMs) 1,369,593 Revenue Passenger Miles (RPMs) 1,393,243 Revenue Passenger Miles (RPMs) 3,017,574 Revenue Passenger Miles (RPMs) 5,780,410Available Seat Miles (ASMs) 3,092,254 Available Seat Miles (ASMs) 3,919,252 Available Seat Miles (ASMs) 4,756,463 Available Seat Miles (ASMs) 11,767,968Projected Load Factor 44.3% Projected Load Factor 35.5% Projected Load Factor 63.4% Projected Load Factor 49.1%

Financial Projections Financial Projections Financial Projections Financial Projections

Revenues Revenues Revenues Revenues

Passenger Ticket Revenues $796,169 Passenger Ticket Revenues $989,043 Passenger Ticket Revenues $1,132,522 Passenger Ticket Revenues $2,917,734Ancillary Revenues $15,923 Ancillary Revenues $19,781 Ancillary Revenues $22,650 Ancillary Revenues $58,355Total $812,092 Total $1,008,824 Total $1,155,172 Total $2,976,088

Expenses Expenses Expenses Expenses

Flight Operations $229,840 Flight Operations $383,996 Flight Operations $338,919 Flight Operations $952,755Aircraft Ownership/Lease $249,600 Aircraft Ownership/Lease $441,600 Aircraft Ownership/Lease $441,600 Aircraft Ownership/Lease $1,132,800Fuel & Oil $744,682 Fuel & Oil $1,036,790 Fuel & Oil $1,098,097 Fuel & Oil $2,879,569Sales & Marketing $20,000 Sales & Marketing $40,000 Sales & Marketing $20,000 Sales & Marketing $80,000Traffic Servicing $396,135 Traffic Servicing $582,519 Traffic Servicing $335,953 Traffic Servicing $1,314,606Insurance $42,615 Insurance $60,235 Insurance $63,796 Insurance $166,646Maintenance $587,809 Maintenance $704,206 Maintenance $959,738 Maintenance $2,251,753Sub-Total - Direct $2,270,680 Sub-Total - Direct $3,249,346 Sub-Total - Direct $3,258,103 Sub-Total - Direct $8,778,129Indirect $306,542 Indirect $438,662 Indirect $439,844 Indirect $1,185,047Total Expenses $2,577,222 Total Expenses $3,688,008 Total Expenses $3,697,947 Total Expenses $9,963,177

Projected Operating Profit/(Loss) ($1,765,130) Projected Operating Profit/(Loss) ($2,679,183) Projected Operating Profit/(Loss) ($2,542,775) Projected Operating Profit/(Loss) ($6,987,089)

Subsidy Calculations Subsidy Calculations Subsidy Calculations Subsidy Calculations

Operating Loss $1,765,130 Operating Loss $2,679,183 Operating Loss $2,542,775 Operating Loss $6,987,089Economic Return @ 5% $128,861 Economic Return @ 5% $184,400 Economic Return @ 5% $184,897 Economic Return @ 5% $498,159Required Subsidy $1,893,991 Required Subsidy $2,863,584 Required Subsidy $2,727,672 Required Subsidy $7,485,247Subsidy per Departure $711.11 Subsidy per Departure $594.76 Subsidy per Departure $1,254.17 Subsidy per Departure $775.43Subsidy per Passenger $178.39 Subsidy per Passenger $185.90 Subsidy per Passenger $219.65 Subsidy per Passenger $194.73Avg. Enplanements per Operational Day 17.0 Avg. Enplanements per Operational Day 24.7 Avg. Enplanements per Operational Day 19.9 Avg. Enplanements per Operational Day 61.6

REDUCED SUBSIDY REQUEST CONTINGENT ON BEING SELECTED TO SERVE ALL FOUR COMMUNITIES WITH CESSNA CARAVANS

OST-1997-26944 OST-1998-4409

ALL MARKETS PACKAGE 26 Weekly RTs: Show Low-Phoenix

OST-1998-4409, OST-1996-189, OST-1997-26944

Aircraft Option: Cessna Caravan, Two-Pilots

30 Weekly RTs: Prescott-Phoenix

OST-1996-1899

18 Weekly RTs (Off-Peak)/32 Weekky RTs (Peak)

Page, AZ - Phoenix (Cessna Caravan)

Aircraft Option: Cessna Caravan, Two-Pilots

Aircraft Option: Cessna Caravan, Two-Pilots 18 Weekly RTs: Kingman - Phoenix (1-stop via Prescott)
OST

-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 30

Proforma Data

Operating Projections

Average Sector Length (sm) 90

Scheduled Departures 4,888

Scheduled Block Hours 3,414.7

Projected Completion Factor 98.5%

Projected Completed Departures 4,815

Projected Completed Block Hours 3,363.4

Passenger Projections

Projected Passengers 14,357

Passengers per Departure 3.0

Projected Average Fare $64.67

Revenue Passenger Miles (RPMs) 1,298,545

Available Seat Miles (ASMs) 3,483,780

Projected Load Factor 37.3%

Financial Projections

Revenues

Passenger Ticket Revenues $928,422

Ancillary Revenues $18,568

Total $946,990

Expenses

Flight Operations $403,614

Aircraft Ownership/Lease $450,000

Fuel & Oil $913,848

Sales & Marketing $50,000

Traffic Servicing $586,347

Insurance $100,903

Maintenance $836,311

Sub-Total - Direct $3,341,023

Indirect $501,153

Total Expenses $3,842,177

Projected Operating Profit/(Loss) ($2,895,186)

Subsidy Calculations

Operating Loss $2,895,186

Economic Return @ 5% $192,109

Required Subsidy $3,087,295

Subsidy per Departure $641.23

Subsidy per Passenger $215.04

Avg. Enplanements per Operational Day 23.0

30 Weekly RTs: Prescott-Phoenix

OST-1996-1899

Aircraft Option: Piston-Twin, Two-Pilots

18 Weekly RTs: Kingman - Phoenix (1-stop via Prescott)
OST

-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 31

Proforma Data

Operating Projections

Average Sector Length (sm) 87

Scheduled Departures 2,704

Scheduled Block Hours 1,802.7

Projected Completion Factor 98.5%

Projected Completed Departures 2,663

Projected Completed Block Hours 1,775.6

Passenger Projections

Projected Passengers 10,984

Passengers per Departure 4.1

Projected Average Fare $57.90

Revenue Passenger Miles (RPMs) 955,608

Available Seat Miles (ASMs) 1,853,754

Projected Load Factor 51.5%

Financial Projections

Revenues

Passenger Ticket Revenues $635,974

Ancillary Revenues $12,719

Total $648,693

Expenses

Flight Operations $180,267

Aircraft Ownership/Lease $300,000

Fuel & Oil $489,785

Sales & Marketing $25,000

Traffic Servicing $252,877

Insurance $53,269

Maintenance $423,563

Sub-Total - Direct $1,724,760

Indirect $258,714

Total Expenses $1,983,475

Projected Operating Profit/(Loss) ($1,334,781)

Subsidy Calculations

Operating Loss $1,334,781

Economic Return @ 5% $99,174

Required Subsidy $1,433,955

Subsidy per Departure $538.38

Subsidy per Passenger $130.55

Avg. Enplanements per Operational Day 17.6

26 Weekly RTs: Prescott-Phoenix

Aircraft Option: Piston Twin, Two-Pilots

OST-1998-1899

(STAND ALONE SERVICE OPTION)
OST

-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 32

Proforma Data

Operating Projections

Average Sector Length (sm) 243

Scheduled Departures 2,264

Scheduled Block Hours 3,584.7

Projected Completion Factor 98.5%

Projected Completed Departures 2,230

Projected Completed Block Hours 3,530.9

Passenger Projections

Projected Passengers 12,418

Passengers per Departure 5.6

Projected Average Fare $91.20

Revenue Passenger Miles (RPMs) 3,017,574

Available Seat Miles (ASMs) 4,335,198

Projected Load Factor 69.6%

Financial Projections

Revenues

Passenger Ticket Revenues $1,132,522

Ancillary Revenues $22,650

Total $1,155,172

Expenses

Flight Operations $353,090

Aircraft Ownership/Lease $450,000

Fuel & Oil $959,345

Sales & Marketing $25,000

Traffic Servicing $342,238

Insurance $56,494

Maintenance $849,887

Sub-Total - Direct $3,036,053

Indirect $455,408

Total Expenses $3,491,461

Projected Operating Profit/(Loss) ($2,336,289)

Subsidy Calculations

Operating Loss $2,336,289

Economic Return @ 5% $174,573

Required Subsidy $2,510,862

Subsidy per Departure $1,125.93

Subsidy per Passenger $202.20

Avg. Enplanements per Operational Day 19.9

OST-1997-26944

18 Weekly RTs (Off-Peak)/32 Weekly RTs (Peak)

Page, AZ - Phoenix (Piston-Twin, Two Pilots)
OST

-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 33

Proforma Data

Operating Projections

Average Sector Length (sm) 129

Scheduled Departures 2,704

Scheduled Block Hours 2,478.7

Projected Completion Factor 98.5%

Projected Completed Departures 2,663

Projected Completed Block Hours 2,441.5

Passenger Projections

Projected Passengers 10,617

Passengers per Departure 4.0

Projected Average Fare $74.99

Revenue Passenger Miles (RPMs) 1,369,593

Available Seat Miles (ASMs) 2,748,670

Projected Load Factor 49.8%

Financial Projections

Revenues

Passenger Ticket Revenues $796,169

Ancillary Revenues $15,923

Total $812,092

Expenses

Flight Operations $247,867

Aircraft Ownership/Lease $300,000

Fuel & Oil $673,454

Sales & Marketing $25,000

Traffic Servicing $339,877

Insurance $73,245

Maintenance $688,797

Sub-Total - Direct $2,348,239

Indirect $352,236

Total Expenses $2,700,475

Projected Operating Profit/(Loss) ($1,888,383)

Subsidy Calculations

Operating Loss $1,888,383

Economic Return @ 5% $135,024

Required Subsidy $2,023,407

Subsidy per Departure $759.70

Subsidy per Passenger $190.58

Avg. Enplanements per Operational Day 17.0

OST-1998-4409

26 Weekly RTs: Show Low-Phoenix

Aircraft Option: Piston-Twin, Two-Pilots
OST

-1996-1899, OST-1997-2694 & OST-1998-4409

February 15, 2013

Page | 34

Proforma Data Proforma Data Proforma Data Proforma Data

Operating Projections Operating Projections Operating Projections Operating Projections

Average Sector Length (sm) 129 Average Sector Length (sm) 90 Average Sector Length (sm) 243 Average Sector Length (sm) 202Scheduled Departures 2,704 Scheduled Departures 4,888 Scheduled Departures 2,264 Scheduled Departures 9,856Scheduled Block Hours 2,478.7 Scheduled Block Hours 3,414.7 Scheduled Block Hours 3,584.7 Scheduled Block Hours 9,478.0Projected Completion Factor 98.5% Projected Completion Factor 98.5% Projected Completion Factor 98.5% Projected Completion Factor 98.5%Projected Completed Departures 2,663 Projected Completed Departures 4,815 Projected Completed Departures 2,230 Projected Completed Departures 9,708Projected Completed Block Hours 2,441.5 Projected Completed Block Hours 3,363.4 Projected Completed Block Hours 3,530.9 Projected Completed Block Hours 9,335.8

Passenger Projections Passenger Projections Passenger Projections Passenger Projections

Projected Passengers 10,617 Projected Passengers 14,357 Projected Passengers 12,418 Projected Passengers 37,392 Passengers per Departure 4.0 Passengers per Departure 3.0 Passengers per Departure 5.6 Passengers per Departure 3.9 Projected Average Fare $74.99 Projected Average Fare $64.67 Projected Average Fare $91.20 Projected Average Fare $73.60Revenue Passenger Miles (RPMs) 1,369,593 Revenue Passenger Miles (RPMs) 1,298,545 Revenue Passenger Miles (RPMs) 3,017,574 Revenue Passenger Miles (RPMs) 5,685,712Available Seat Miles (ASMs) 2,748,670 Available Seat Miles (ASMs) 3,483,780 Available Seat Miles (ASMs) 4,335,198 Available Seat Miles (ASMs) 10,567,647Projected Load Factor 49.8% Projected Load Factor 37.3% Projected Load Factor 69.6% Projected Load Factor 53.8%

Financial Projections Financial Projections Financial Projections Financial Projections

Revenues Revenues Revenues Revenues

Passenger Ticket Revenues $796,169 Passenger Ticket Revenues $928,422 Passenger Ticket Revenues $1,132,522 Passenger Ticket Revenues $2,857,112Ancillary Revenues $15,923 Ancillary Revenues $18,568 Ancillary Revenues $22,650 Ancillary Revenues $57,142Total $812,092 Total $946,990 Total $1,155,172 Total $2,914,255

Expenses Expenses Expenses Expenses

Flight Operations $247,867 Flight Operations $403,614 Flight Operations $353,090 Flight Operations $1,004,570Aircraft Ownership/Lease $195,000 Aircraft Ownership/Lease $345,000 Aircraft Ownership/Lease $345,000 Aircraft Ownership/Lease $885,000Fuel & Oil $673,454 Fuel & Oil $913,848 Fuel & Oil $959,345 Fuel & Oil $2,546,647Sales & Marketing $20,000 Sales & Marketing $40,000 Sales & Marketing $20,000 Sales & Marketing $80,000Traffic Servicing $331,915 Traffic Servicing $577,063 Traffic Servicing $330,686 Traffic Servicing $1,239,664Insurance $73,245 Insurance $100,903 Insurance $56,494 Insurance $230,642Maintenance $688,797 Maintenance $836,311 Maintenance $849,887 Maintenance $2,374,995Sub-Total - Direct $2,230,278 Sub-Total - Direct $3,216,739 Sub-Total - Direct $2,914,502 Sub-Total - Direct $8,361,518Indirect $317,815 Indirect $458,385 Indirect $415,316 Indirect $1,191,516Total Expenses $2,548,092 Total Expenses $3,675,124 Total Expenses $3,329,818 Total Expenses $9,553,035

Projected Operating Profit/(Loss) ($1,736,000) Projected Operating Profit/(Loss) ($2,728,134) Projected Operating Profit/(Loss) ($2,174,646) Projected Operating Profit/(Loss) ($6,638,780)

Subsidy Calculations Subsidy Calculations Subsidy Calculations Subsidy Calculations

Operating Loss $1,736,000 Operating Loss $2,728,134 Operating Loss $2,174,646 Operating Loss $6,638,780Economic Return @ 5% $127,405 Economic Return @ 5% $183,756 Economic Return @ 5% $166,491 Economic Return @ 5% $477,652Required Subsidy $1,863,405 Required Subsidy $2,911,890 Required Subsidy $2,341,137 Required Subsidy $7,116,432

Subsidy per Departure $699.62 Subsidy per Departure $604.79 Subsidy per Departure $1,049.82 Subsidy per Departure $733.04Subsidy per Passenger $175.51 Subsidy per Passenger $202.82 Subsidy per Passenger $188.53 Subsidy per Passenger $190.32Avg. Enplanements per Operational Day 17.0 Avg. Enplanements per Operational Day 23.0 Avg. Enplanements per Operational Day 19.9 Avg. Enplanements per Operational Day 59.9

ALL MARKETS PACKAGE 26 Weekly RTs: Show Low-Phoenix

OST-1998-4409, OST-1996-189, OST-1997-26944

Aircraft Option: Piston-Twin, Two-Pilots

30 Weekly RTs: Prescott-Phoenix

OST-1996-1899

18 Weekly RTs (Off-Peak)/32 Weekly RTs (Peak)

Page, AZ - Phoenix (Piston-Twin, Two Pilots)

Aircraft Option: Piston-Twin, Two-Pilots

Aircraft Option: Piston-Twin, Two-Pilots 18 Weekly RTs: Kingman - Phoenix (1-stop via Prescott)

REDUCED SUBSIDY REQUEST CONTINGENT ON BEING SELECTED TO SERVE ALL FOUR COMMUNITIES WITH PISTON-TWIN AIRCRAFT

OST-1997-26944 OST-1998-4409