July 23, 2010

Proposal of Hyannis Air Service, Inc. dba “Cape Air” to provide subsidized Essential Air Service for:

Ft. Leonard Wood, MO 

DOCKET DOT-OST-1996-1167

Four daily non-stop flights to Lambert - St. Louis International Airport

With --------------------------- codeshare expected

Hyannis Air Service, Inc., dba Cape Air

Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 

(508) 862-9719

Media inquiries to Charles Ferrara, VP Corporate Affairs: 617-567-3597
1

Cape Air is a small but robust commuter airline, 

operating and growing since 1989

 First route was Boston –

Provincetown, begun in October 1989 with 

three aircraft

 Presently flying 59 Cessna 402s in five 

regions, and two ATR-42s in Micronesia

 Operating up to 600 flights daily

 In 2009 flew more than 610,000 

passengers

 Stable, mature and growing company 

Key facts Cape Air: Leading the pack nine* at a time

Photo courtesy Mark Garfinkel (August 7, 2000, Boston)

*Ft. Leonard Wood service with the American Airlines code would have two pilots and thus eight passenger seats
2

For smaller communities and niche markets, 

Cape Air’s nine-seat* planes have proven to be a great fit

 High-frequency, non-stop service

 Interline eticketing and baggage agreements

 Complete GDS sales channels

 Reliability

 Subsidy used to lower fares

 MOCHA HAGoTDI† culture and community 

investment

Cape Air highlights “Key West Express”

*Eight seats with the American Airlines codeshare

† Make Our Customers Happy And Have A Good Time Doing It
3

Cape Air began service in 1989 with three aircraft...
4

...And one route: Boston – Provincetown 

Provincetown

Boston

Original Cape Air route map

October 1989 route map
5

Today Cape Air serves 16 communities in the Northeast...

Northeast route map

Nantucket

Martha’s Vineyard

Provincetown

Boston

Hyannis New Bedford

Rockland

Lebanon

Saranac Lake

Rutland

Albany

Watertown

Ogdensburg

Massena

July 2010 route map

White Plains

Providence
6

...And has developed niches along the East Coast, 

in the Caribbean and Micronesia...

Caribbean

Florida Keys

Micronesia

Continental Connection

Ft. Myers

Key West

Florida

Mid-Atlantic

Ponce

Mayaguez

San Juan

Vieques

St. Croix

St. Thomas

Tortola

July 2010 route maps; Maps not to scale
...And now also in the Midwest, where Cape Air’s St. Louis 

operation began flights on November 8, 2009

7

Cape Air’s St. Louis region route map

July 2010

Cape Air’s first St. Louis arrival taxis in!

November 8, 2009; Sandi Dorrin, STL Asst. Station Manager

Illinois

Missouri

Cape Girardeau

Marion

Quincy

Kirksville

St. Louis

Cape Air route

New EAS award
In the first full quarter of operations, 1Q10, Cape Air increased 

enplanements at each of the airports served to St. Louis...

8

1.3

7.0

5.8

9.4

15.1 14.9

0

2

4

6

8

10

12

14

16

Cape Girardeau Marion Quincy

YE1Q09

Cape Air 1Q10

St. Louis routes’ passengers daily each way

Sources: DOT and Cape Air
...And the enplanement trend is positive

9

St. Louis routes’ passengers

Sum of both directions, since inception of Cape Air service Nov. 8, 2009

Partial month

539

914 805 884 1,034 1,054 1,106 1,213

567

885

763 856

1,066 1,093 1,252 1,309

285 

536 

523 

486 

688 584 

699 

774

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10

Cape Girardeau

Quincy

Marion
10

Cape Air is developing a track record of growing enplanements 

in EAS markets; in the first year of service at Rutland, Cape Air 

more than doubled enplanements

0

100

200

300

400

500

600

700

800

900

1,000

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

Beech 1900 Predecessor

Cape Air

Rutland, Vermont passengers

Cape Air’s first year of service YE10/08

Sources: Rutland Airport and Cape Air
11

Enplanements in Saranac Lake are up 45% and climbing 

vs. our predecessor’s best year

5,574 5,571

8,119

9,384

6,468

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2005 2006 2007 2008 2009

Saranac Lake passengers

Sum of inbound and outbound

+45%

Partial year

Cape Air

Cape Air

Sources: DOT and Cape Air
12

Cape Air is an experienced community airline 

with the features smaller communities need

Feature Established

Reliability

Tickets sold through 

Expedia, Orbitz, Travelocity

Interline eticketing

Checked luggage transfer

TSA security program
Cape Air’s St. Louis flights feature

------------------------ codeshare

13
To complement the codeshare with American, Cape Air will 

soon be moving to Concourse C at Lambert-St. Louis, 

steps away from American’s gates

14

Cape Air
15

In addition to codeshare, 

Cape Air has been an interline carrier since 1993

enabling connectivity with most major airlines

• Twenty-five interline agreements are in place with almost all legacy airlines

• Cape Air has completed migration to interline eticketing, the updated industry norm 

• Cape Air operates flights in Micronesia as

• Flights in the Caribbean have a code 

• Five Boston routes have a code, and Cape Air can interline with JetBlue

• Flights in the Midwest operate with the code of 

Interline highlights
Cape Air interlines checked luggage at Lambert-St. Louis with:

American, Continental, Delta, Frontier, United and US Airways

16

A Cape Air interline bag cart in action at Lambert-St. Louis

Cape Air’s 

interline bag cart

at St. Louis 
Cape Air has built its business over 20 years by providing 

reliable service for communities like Ft. Leonard Wood

17

Planes and pilots based 

in Ft. Leonard Wood

Full service Cape Air 

maintenance base in 

St. Louis

Spare aircraft located in 

St. Louis

Factors in reliability
Cape Air brings a time-tested approach to marketing 

small community air service

• Dedicated regional marketing manager for the 

Midwest

• Cape Air’s proposal includes a robust budget 

for marketing of Ft. Leonard Wood’s air 

service

• Proposed city ticket office

– To ensure that the airport and Cape Air’s 

service has heightened visibility in the 

community, especially given that the 

airport is on post

• Civic involvement and philanthropy

18

Marketing highlights Costumed for Nantucket’s Daffodil Weekend
19

Cape Air is already embedded

in the global distribution systems (GDS)

Cape Air is sold through:
20

Cape Air’s Telephone Reservations Center

Cape Air has had its own reservations center, using the 

industry-standard , system for more than 15 years

Toll free reservations: 866-CAPE-AIR

Never a booking fee!
21

Our company mantra: 

Have

A

Good

Time

Doing

It!

Make

Our

Customers

Happy,

And

Cape Air celebrates Valentine’s Day at a Caribbean station
To best serve the Ft. Leonard Wood community’s luggage 

demand, Cape Air proposes combination passenger and 

freighter service, with the freighter used only as required

22

Daily RTs 4.0

Annual Sched. Departures 2,920

Pax/Dpt 3.6

Load Factor 45%

Annual Passengers 10,197

Avg. Net Fare $98.00

Passenger Rev/Dpt $353

Passenger expenses

Two-year selection

Drivers

Fuel $601,582 Subsidy/Dpt $470

Maintenance $531,060

Pilots $320,077 Frequency Sensitivity

Ownership $143,976 Annual Pax Dpts 2,920

Rents $40,176

Staff $186,448 Usage Pct* Dpts Annual

Ops and Landing Fees $115,620 10% 292 $137,095

Freighter Fixed Expenses $257,444 20% 584 $274,190

Marketing $37,436 30% 876 $411,285

General & Admin./Other $119,684 40% 1,168 $548,379

Operating expense $2,353,504 50% 1,460 $685,474

60% 1,752 $822,569

Return of 5% $123,869 70% 2,044 $959,664

Economic Expense $2,477,372 *Freighter only used when needed

Passenger Revenue $999,271

Profit ($1,478,102)

Annual Passenger Subsidy Required $1,478,102 Freighter subsidy proposed

Subsidy Per Departure $522 at $470/dpt up to $959,664 annually

Per Passenger $145 but only used when required

Freighter variable expenses

Two-year selection

Note: Utilization of the freighter will likely be a 

function of enplanements, which will keep the perpassenger subsidy below $200.
23

Cape Air would be proud to serve

the Ft. Leonard Wood community

 Four daily flights to St. Louis with over one ton of baggage capability

 Spare aircraft in the region helps ensure a reliable operation

 ----------------------------- codeshare, plus interline connections, ticketing and bag transfer with most 

major airlines; global distribution

 A healthy, strong, independent airline that cares passionately about serving communities

Summary

Cape Air is a great choice for 

Ft. Leonard Wood

Hyannis Air Service, Inc., dba Cape Air

Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 

(508) 862-9719

Media inquiries to Charles Ferrara, VP Corporate Affairs: 617-567-3597
Appendix

Interline Examples on Online Travel Agencies
25

Cape Air is on Expedia.com

Screenshot from Expedia.com showing Cape Air 

LNS-PHX search for travel 22SEP09
26

Cape Air is on Travelocity.com

Screenshot from Travelocity.com showing Cape Air 

ATL-MAZ search for travel 22SEP09
27

Cape Air is on Orbitz.com

Screenshot from Orbitz.com showing Cape Air 

ART-DCA search for travel 22SEP09