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# '5~.J SovereignAir,Inc. August 31, 2011 DennisJ. DeVany, Chief EAS 

### & DomesticAnalysis Division, X-53 Office ofAviation Analysis Department ofTransportation 1200 NewJerseyAve. SE Washington, DC 20590 Re: Proposal to Provide Essential Air Service at: HANCOCK/HOUGHTON, MICHIGAN, DOCKET DOT-OST-2009-0302 EAU CLAIR, WISCONSIN, DOCKET DOT-OST-2009-0306 MUSKEGON, MICHIGAN, DOCKET DOT-OST-2009-0301 PADUCAH, KENTUCKY, DOCKET DOT-OST-2009-0299
Dear Mr. DeVany: In response to Order2011-8-10, Sovereign Air, Inc. offersthefollowing proposal: 

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Sovereign Air, Inc. (SAl) is planning to use aone 30-seat Dornier328Jet aircraft (3 total) for non-stop service to Chicago (ORO) on each route from HANCOCK/HOUGHTON, MICHGAN, EAU CLAIRE ( 2 Proposals one from St Cloud to EAU Claire )WISCONSIN, MUSKEGON, MICHIGAN AND PADUCAH, KENTUCKY. One 19- seatJetstream 31/32 for non-stop service to Chicago (ORO) from MUSKEGON, MICHIGAN. Ourflights will service the EAS cities and the ORO Hub. Sovereign Air believes thatwith excellent baggage handling, properschedules, inexpensive pricing, acomfortable-quiet- pressurized aircraft, and a recovering economy, the load factors will increase in these markets. SAl will base its aircraft, crews and maintenance personnel, banking and purchase fuel forthe each aircraft in thatcity. Sovereign AIR Airwill keep mostofthe EAS monies in the local communities. Additional flights will be added as needed to accommodate periods ofincreased demands. SAl will have baggage and ticketagreements with the majoraircarriers in ORO by the start ofthis EAS service. SAl will also have cargo agreements for both domesticand international airfreight movements. SAl has been HAZMAT approved and will be working in conjunction with hospitalsto expeditevarious HAZMAT materials thatthey need totransport. SAl's goal is to work hand-in-hand with the communitiesto reduce the need for EAS subsidies withinthe nextfourto six years. Sovereign Air is currently in the process ofacquiring its Scheduled Service Authority and anticipates being able to startthis Essential Air Service by Dec 15, 2011. Sovereign Airwill be fully integrated intothe Global Distribution System (GDS) in conjunction with Worldspan. SAl is nottied tojust one airline, allowing Sovereign Air bettervisibility in the variousreservation systems. Passengers will have a broad range ofchannels through which to purchase tickets, including all airline reservation systems and travel agencies, Orbitz, Priceline, Expedia, ect:. Customers will be able to call our reservation office orvisit ourwebsite to bookflights. Passengers can also purchase tickets and make reservations atourticketcounters. SAl's final schedules will be developed by the City Airport Boards and SAl to reduce layovertimes in ORD and provide the best possible arrival and departuretimesforthe travelling public. As such, the following schedules will likely be adjusted: HancockLHoughton Schedule

Fit# Freq From TO Dpt-Arr 10 1234567 CMX ORD 6:30am-7:30am 11 1234567 ORD CMX 8:30am-9:30am 20 23456 CMX ORD 10:30am11:30am 21 23456 ORD CMX 12:30pm-1:30pm 30 1234567 CMX ORD 5:30pm-6:30pm 31 1234567 ORD CMX 8:00pm-9:10pm Muskegon Schedule

Fit# Freq From TO Dpt-Arr 101 1234567 MKG ORD 6:30am-7:00am 111 1234567 ORD MKG 8:30am-9:OOam 201 23456 MKG ORD 10:30aml1:00am 211 23456 ORD MKG 12:30pm-1:00pm 301 1234567 MKG ORD 5:30pm-6:00pm 311 1234567 ORD MKG 8:30pm-9:00pm
Paducah Schedule Fit# Freq From TO Dpt-Arr 102 1234567 PAH ORD 6:40am-7:40am 112 1234567 ORD PAH 8:40am-9:40am 202 23456 PAH ORD 10:40am11:40am 212 23456 ORD PAH 12:40pm-1:40pm 302 1234567 PAH ORD 6:40pm-7:40pm 312 1234567 ORD PAH 8:40pm-9:40pm
Eau Claire Schedule #1 Fit# Freq From TO Dpt-Arr 802 1234567 EAU ORD 6:20am-7:10am 812 1234567 ORD EAU 8:20am-9:10am 902 23456 EAU ORD 10:20am11:10am 912 23456 ORD EAU 12:20pm-1:10pm 702 1234567 EAU ORD 6:20pm-7:10pm 712 1234567 ORD EAU 8:20pm-9:10pmSt Cloud , Eau Claire, Chicago Schedule #2
Fit# Freq Depart Arrive Depart Arrive 502 1234567 STC 6:30am EAU 6:50am-7:00am ORO 8:00am 503 1234567 ORO 9:00am EAU9:50am-10:00am STC 10:20am 504 23456 STC 11:30am EAU11:50am-12:pm OR01:00pm 505 23456 OR02:00pm EAU2:50pm-3:00pm STC3:20pm 506 1234567 STC6:30pm EAU6:50pm-7:00pm ORD8:00pm 507 1234567 ORD9:00pm EAU9:50PM-10:00PM STC10:20pm Sovereign Air complieswith the Global Warming Pollution Reduction requirements for2012 and year 2020.

Note: Sovereign Airwill EAS forwhat itwas intended forto developyourair service so theyou do not need EAS.

### 30-SeatDornier328Jet Sovereign Air, Inc. Annual Compensation Requirement for Essential Air Service for Hancock/Houghton
Aircraft Type Available Seats Per Departure Passengers Per Trip
Block Hours Departures Total Passengers Average Fare
Revenue Passenger Miles Available Seat Miles Passenger Revenue Other Rev. @ .6 of pax. Rev. %

Total Revenue Aircraft and Hull Insurance Fuel and Oil Flying Operations
Other Direct Costs Maintenance

Total Direct Costs Total Indirect Costs Total Operating Expenses Operating Loss Profit@ 5%

Completion Rate Load Factor 19 Round trips PerWeek

$155 one way

Annual Compensation Requirement 30-seats 

### 30 22.8 

### 1,916 1,916 43,710

18,046,735 23,739,240 $6,775,050 $40,650 $6,815,700



### $220,000 $2,038,624 $1,116,939

$572,245 $1,272,517 $5,220,325 

### $2,529,166 $7,749,491

$933,791 

### $387,475 $1,321,266
97% 68%

### 30-SeatDornier328Jet Sovereign Air, Inc. Annual Compensation Requirementfor Essential Air Service for Paducah
Aircraft Type Available Seats Per Departure Passengers Per Trip
Block Hours Departures Total Passengers Average Fare
Revenue Passenger Miles Available Seat Miles Passenger Revenue Other Rev. @ .6 of pax. Rev. 

### %

Total Revenue Aircraft and Hull Insurance Fuel and Oil Flying Operations
Other Direct Costs Maintenance

Total Direct Costs Total Indirect Costs Total Operating Expenses Operating Loss Profit@ 

### 5%

Completion Rate Load Factor 19 Round trips PerWeek

$165 one way

Annual Compensation Requirement 30-seats 

### 30 19.5 

### 1,916 1,916 37,347

14,688,575 22,589,640 $6,162,255

$308,113 $6,470,368



### $220,000 $2,038,624 $1,116,939

$572,245 $1,272,517 $5,220,325 

### $1,729,166 $6,949,491

$479,123 

### $347,475 $826,598
97% 

### 65%

### 1 30-Seat Dornier328Jet Sovereign Air, Inc. Annual Compensation Requirement for Essential Air Service for Eau Claire Proposal #1
Aircraft Type Available Seats Per Departure Passengers Per Trip
Block Hours Departures Total Passengers Average Fare
Revenue Passenger Miles Available Seat Miles Passenger Revenue Other Rev. @ .6 of

### pax. Rev. %

Total Revenue Aircraft and Hull Insurance Fuel and Oil Flying Operations
Other Direct Costs Maintenance

Total Direct Costs Total Indirect Costs Total Operating Expenses Operating Loss Profit@ 5%

Completion Rate Load Factor 19 Round trips PerWeek

$155 one way

Annual Compensation Requirement 30-seats 

### 30 18.8 1,916 1,916 35,998

9,657,464 15,404,640 $5,579,690

$334,781 $5,914,714



### $220,000 $2,038,624 $1,116,939

$572,245 $1,272,517 $5,220,325 

### $1,929,166 $7,149,491 $1,234,777



### $357,475 $1,592.252
97% 63%

### 30-SeatDornier328Jet Sovereign Air, Inc. Annual Compensation Requirement for Essential Air Service Proposal #2 EAU CLAIRE (EAU) to CHICAGO (ORO) starting at ST CLOUD (STC)
Aircraft Type Available Seats Per Departure Passengers Per Trip
Block Hours Departures Total Passengers Average Fare
Revenue Passenger Miles Available Seat Miles Passenger Revenue Other Rev. @ 

### .6 of

### pax. Rev.%

Total Revenue Aircraft and Hull Insurance Fuel and Oil Flying Operations
Other Direct Costs Maintenance

Total Direct Costs Total Indirect Costs Total Operating Expenses Operating Loss Profit@ 5%

Completion Rate Load Factor 19 Round trips PerWeek

$155 one way Avg.

Annual Compensation Requirement 30-seats 

### 30 

### 26 1,916 1,916 50,998

20,450,198 23,739,240 $7,904,690

$474,281 $8,378,714



### $220,000 $2,338,624 $1,216,939 $1,972,245 $1,272,517 $7,020,325 

### $2,129,166 $9,149,491

$770,777 

### $457,475 $1,228,252
97% 

### 86%

### 19-SeatJetstream 31/32 Sovereign Air, Inc. Annual Compensation Requirement for Essential Air Service for Muskegon MKG-ORD Aircraft Type Available Seats Per Departure Passengers Per Trip Block Hours Departures Total Passengers Average Fare

Revenue Passenger Miles Available Seat Miles Passenger Revenue Other Rev. @ .6 of pax. Rev. 

### %

Total Revenue Aircraft and Hull Insurance Fuel and Oil Flying Operations Other Direct Costs Maintenance

Total Direct Costs Total Indirect Costs Total Operating Expenses Operating Loss Profit@ 

### 5%

Completion Rate Load Factor $90 one way

Annual Compensation Requirement 19-seat 

### 19 Avg 12.2 

### 958 1,916 23,347

2,754,946 4,295,672 $2,101,230

$126,074 $2,227,304

$102,000 $312,853 $310,000 $178,221 $222,212 $1,125,286 $1,602,018 $2,727,304

$500,000 $136,365 $636,365


### 97% 64%Customer safety and service are Priority One with SAl. Sovereign Air looks forward to providing Essential AirService to Hancock/Houghton, Eau Clair, Muskegon and Paducah.
Sincerely,

Robert B. Karns, GM Sovereign Air, Inc.