### BEFORETH E , __ , ^ DEPARTMEN TO F TRANSPORTATIO N

WASHINGTON , DC 

## 1 ^C ^

Essentia l Ai rServic e a t Watertown , N Y Unde r4 9 U.S. C §4173 1 e tseq . DOT-OST-1997-284 2

AMERICA N EAGL E AIRLINE S PROPOSA LT O PROVID E ESSENTIA LAI R SERVIC E A T WATERTOWN

. NE WYOR K
America n Eagl e Airlines , a wholl yowne d subsidiar yo fAM R Corporation , ("America n Eagle" ) respectfull ysubmit s it s proposa l t o provid e subsidize d Essentia l Ai rServic e t o Watertown , Ne w York

. America n Eagl e contemplate s servic e fro m AMR' s secon d larges thu b a tChicag o O'Har e Internationa l Airpor t("ORD" ) t o th e Watertow n Internationa l Airpor tC'ART") , wit h tw o roundtrip s o n Embrae rRegiona l Je taircraft

. America n Eagl e i s th e predominat e regiona l carrie rfo rAmerica n Airlines , offerin g mor e tha n 150 0 dail ydeparture s wit h servic e t o mor e tha n 18 0 cities

. Throug h ou rrelationshi p wit h America n Airiines , ou rcustomer s hav e acces s t o mor e tha n 25 0 cities , 4 0 countrie s an d mor e tha n 340 0 dail ydepartures

. I n addition , ou ronewori d allianc e provide s ou rcustomer s acces s t o ove r70 0 destination s an d 14 0 countrie s worldwide

. A tOR D alone , America n an d America n Eagl e offe rmor e tha n 50 0 dail ydeparture s t o ove r11 5 destinations

. Thi s direc tacces s t o AMR' s an d oneworld' s vas tnetwork s shoul d hel p stimulat e th e traffi cto/fro m Watertow n wit h significantl ymor e convenien tconnectin g option s tha n hav e bee n offere d i n th e communit yfo r years . Althoug h America n Eagl e ha s recentl yre-entere d th e subsidize d Essentia l Ai rServic e marke t wit h servic e t o Joplin , Missouri , an d Gran d Island , Nebrask a startin g i n Jun e 2011 , w e hav e bee n servin g smalle rcommunitie s fo rman yyears . I n th e cas e o fRoswell , Ne wMexico , w e too k a marke t tha twa s o n th e verg e o fsubsidize d servic e afte rMes a Airline s announce d it s departure , an d turne d i t int o a self-sustainin g marke twit h thre e dail yflight s t o DFW

. I n Manhattan , Kansas , America n Eagl e wa s brough ti n t o serv e th e communit ythroug h a partnershi p wit h th e stat e o fKansa s an d hav e take n a communit ytha tha s historicall yha d subsidize d servic e an d mad e i tself-sustainin g a s well

. America n Eagl e hope s an d believe s tha tw e wil l hav e a s muc h succes s i n Watertow n as w e hav e ha d i n Roswel l an d Manhattan

.America n Eagl e als o ha s a significan tamoun to fexperienc e operatin g i n market s wit h larg e

militar yinstallations

. Th e presenc e an d importanc e o fFor tDru m i s a n importan tpar to fth e long-ter m viabilit yo fai rservic e a tWatertown

. Throug h dat a receive d fro m ART , i tappear s tha tFor t Dru m rarel yuse s th e curren tai rservice , forcin g the m t o us e th e Syracus e airport

. Thi s cause s increase d cos tan d inconvenienc e t o ou rservic e members

. W e fee l tha twit h a regiona l je tproduc tInt o a majo rhu b lik e ORD , For tDru m wil l utiliz e ou rservic e mor e tha n th e curren t operato ran d thi s wil l b e a critica l piec e i n hopefull yeliminatin g th e subsid y requiremen tlong-ter m fro m ART

. America n Eagl e woul d lik e t o reques tt o th e DOTtha ti tallo wAmerica n Eagl e t o operat e fo rth e sam e subsid yamoun tan yEmbrae rRegiona l Jet

. W e pla n o n operatin g 44-sea tregiona l jet s o n th e route , bu tallowin g u s t o substitut e i n large ro rsmalle rregiona l je taircraf twoul d allo wu s th e flexibilit yt o matc h suppl ywit h demand , as wel l as day-of-operatio n swap s fo roperationa l flexibility

. America n Eagl e als o request s th e DOTan d Watertow n t o waiv e th e righ tt o hold-i n America n Eagl e upo n issuanc e o fa 12 0 day' s notic e t o terminat e service

. Althoug h w e d o no t forese e thi s t o b e a n issu e an d pla n o n bein g i n Watertow n fo rman yyear s t o come , w e canno t b e operationall yconstraine d an d kep ti n a marke tindefinitely , withou tabilit yt o adap tt o th e marketplace

. W e believ e tha tthes e recen texample s o fgrea tsucces s i n smalle rcommunitie s ar e a demonstratio n o fAmerica n Eagle' s succes s i n bringin g a qualit yproduc tan d a worid-renowne d bran d t o th e community

. Further , America n Eagl e i s th e onl yregiona l airlin e wit h a dedicate d Marketin g an d Sale s grou p tha twil l promot e th e bran d an d networ k i n Watertown

. W e loo k forwar d t o servin g th e Watertow n an d norther n Ne wYork are a fo rman yyear s t o com e an d appreciat e th e community' s an d th e Departmen to fTransportation' s consideratio n o f America n Eagle

.

Sincerely ,

Ro b E m ric h Directo ro fPlannin g America n Eagl e Airline sMarket :

Aircraf t Mileag e Annua l Dap s (Factored ) Bloc k pe rDe p Annua l Bloc k

Hour s (Factored ) Completio n % Revenue s Annua l Passenger s Av g Far e - Onboar d Tota l Revenue s Exioense s Fligh tOperation s Fue l Station s Othe r Tota l Expense s Profi t/ (Loss ) Profi tElemen t( @ 5% ) Subsid yRequire d Subsid y/

Departur e Subsid y/

Pa x Watertown

. N Yt o Chicaa o O'Har e
61 7 1,22 3 2.37 5 98 %
28,73 7 $14 2 $4,094,78 6 $1,800,23 0 $2,752,79 4 $1,468,13 8 $781,46 6 $6,802,62 7 ($2,707,841 ) $340,13 1 $3,047,97 2 $2,49 2 $106.0 7 Numbe ro fSeat s pe rDe p

Annua l ASM s (Factored ) Annua l RPM s (Factored ) Annua l L F 4 4 33,203,09 0 17.730,45 0 53 %

Propose d Schedule * Sepmen t ART-OR D ORD-AR T ART-OR D ORD-AR T Depar t 7:1 5 13:0 5 16:3 0 18:3 0 Arriv e 8:1 5 15:5 5 17:3 0 21:2 0 Freauenc v xSu n xSu n xSa t xSa t 'Schedul e i s show n fo rillustrativ e purpose s onl yan d America n Eagl e reserve s th e righ t t o chang e withou t notic e