Essential Air Service at

Bradford, Pennsylvania

Dubois, Pennsylvania

Franklin/Oil City, Pennsylvania

Jamestown, New York

Parkersburg, West Virginia

Morgantown, West Virginia

Clarksburg/Fairmont, West Virginia

Under 49 U.S.C. g41731 et seq.

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)

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) OST-2003-14528

) OST-2004-17617

) OST-1997-2523

) OST-2003-14950

) OST-2005-20734

) OST-2005-20735

) OST-2005-20736

)

)

SUN AIR INTERNATIONAL PROPOSAL

TO PROVIDE SUBSIDIZED ESSENTIAL AIR SERICE

By Orders 2014-3-12 and 2014-2-13, the Department requested proposals from carriers interested

in providing Essential Air Service to the communities of Bradford, Dubois, and Franklin/Oil City,

PA, Jamestown, NY, Parkersburg, WV, Clarksburg/Fairmont, WV and Morgantown, WV.

Pursuant to those orders, Sun Air Express, LLC. ("Sun Air") cordially submits this proposal to

provide subsidized air service to those communities.

Correspondence with regard to this document should be addressed to:

David Hackett

Chief Executive Officer

Sun Air Express, LLC.

d/b/a Sun Air International

3201 Griffin Road, Suite 202

Ft. Lauderdale, FL 33312

Telephone: 954-660-9865

Fax: 954-894-0367

E-Mail: dhackett@gosunair.com

Bid Summary

Sun Air hereby offers proposals to provide service to the communities of Bradford, Dubois,

Franklin, Jamestown, Parkersburg, Morgantown and Clarksburg/Fairmont from Pittsburgh

International Airport.
Sun Air proposes to operate high frequency, low fare service to Pittsburgh using 8-passenger

Piper Chieftain aircraft. Sun Air's management believes that this model is uniquely suited to.

restoring passenger traffic at these airports after years of decline. Convenient flights times and

low local fares can offer a superior alternative to low-frequency service via larger aircraft under

traditional code-share arrangements. Capacity is restricted to 8 passengers instead of the

traditional 9 seats due to the airline's policy of including First Officers on its' scheduled flights.

Sun Air is prepared to make substantial investments, both operationally as well as in the sales and

marketing area, to aid the communities in recovering their air passenger demand potential. Sun

Air's management believes strongly that the combination of affordable fares, more frequent

flights and consistently reliable operations are critical ingredients to providing the air service that

these communities need.

Sun Air's operating plans are based upon having multiple back-up aircraft and an ample

availability of reserve flight crews. Since Sun Air's current management took over operations

late last year, the airline's operational performance has ranked among the best in the airline

industry

Sun Air's proposals to provide service to Franklin/Oil City, Clarksburg/Fairmont and

Morgantown are contingent upon its' proposals being selected to provide service to at least three

communities among Jamestown, Bradford, Altoona, Johnstown and Parkersburg.

Sun Air proposes to serve Jamestown; Bradford, Altoona, Johnstown, Franklin/Oil City and

Parkersburg for a four year term, and to serve ClarksburgfFairmont and Morgantown for two year

terms.

Flights will be displayed in all the major travel agent systems, and also available for booking on

the company's web site. Interline connections are available with most U.S. major airlines via Sun

Air's contracted distribution capabilities.

The respective subsidy amounts for each city pair are listed in Schedule I included herein.

EAS Eligibility Discussion

All of the communities covered under order 2014-3-12 have seen significant declines in

passenger volumes over the past decade. Several of the communities are not currently meeting

the eligibility requirements of EAS in terms of the 10-enplanement per day rule or the $200 per

passenger cap.

In almost every case, the annual enplanements in these communities have dropped by more than

50%, and in some cases substantially more than 50%. Given the clear evidence that the airports

have had more than sufficient enplanements to meet the EAS eligibility requirement, Sun Air is

prepared to work aggressively with the communities to recover their lost activity.

While there are varied reasons for the enplanement declines, the driving factors include:

• Higher fares

• Inadequate local marketing

• The introduction of "one-stop" service vs non-stop

• insufficient frequency of service and

• Consistently poor reliability by the operating carrier.
The U.S. regional airline industry has experienced a significant increase in the average size of

aircraft operated, which has left smaller communities with fewer choices and fewer flights.

Additionally, those few remaining regional airlines that operate under traditional code-share

arrangements with major U.S. carriers are often subject to forced cancellations in times of

inclement weather, when they would otherwise be able to operate. To the extent weather limits

gate access at the large hubs, the major carriers will dictate that the regional airlines operating

small aircraft be cancelled first. And thus a self-perpetuating cycle results: regional airline code

share flights are the first to be cancelled, and the customers quickly learn that these small

communities cannot be relied upon for consistent service, causing lower passenger enplanements.

Small communities need access to reliable air service. It is a crucial component of their

economic development initiatives.

Marketing resources earmarked for the new routes by Sun Air are substantially above those

historically spent. Sun Air will be actively involved with the local communities (including on the

PIT side) and has already identified co-op marketing funds to support the initiatives. While it

may take some time for the communities to see the major reversal of enplanement trends, the

need is clearly there and the Department should support efforts to achieve those important goals.

The Pennsylvania Air Service Committee recently contracted for one of the country's leading

aviation consulting firms to complete a comprehensive study of whether regional service into and

out of PIT would be viable, referred to as the "PIT Connector" project. The enplanement

forecasts incorporated in that study are generally in line, and in some cases greater than, the levels

projected by Sun Air, without taking into consideration our plans for higher frequency than the

study envisioned. Discussions with the local communities have confirmed there is significant

demand for re-establishing links to PIT, even in light of the elimination of USAirways' former

hub, due to the convenience, pricing and reliability improvement available to the communities.

Service Proposal

Sun Air's proposed weekly frequencies are shown below. Each community would have at least

one overnight aircraft to enable an early morning departure and evening arrival. Flight schedules

throughout the rest of the day would be spread out, and would be finalized in cooperation with the

respective community. None of the markets envision one-stop or through flights ...all are nonstop.

Proposed Flight Fre9uencies, Round Trip to and from Pittsburgh International Airport:

Bradford: 24 Weekly round trips, with four during the weekdays and two each weekend day.

Dubois: 26 Weekly round trips, with four during the weekdays and three each weekend day.

Franklin: 19 Weekly round trips, with three during the weekdays and two each weekend day.

Jamestown: 24 Weekly round trips, with four during the weekdays and two each weekend day.

Parkersburg: 31 Weekly round trips, with five during the weekdays and three each weekend day.

Clarksburg: 26 Weekly round trips, with four during the weekdays and three each weekend day.

Morgantown: 38 Weekly round trips, with six during the weekdays and four each weekend day.

Local fares would be set for effectiveness of "add-on" prices to flights from PIT, generally in the

$29 to $59 range each way. These fares would allow all PIT Connector flights to be priced very

attractively to the passengers, taking advantage oflow fares in PIT relative to other regional

higher-cost hubs. Additionally, the low local fares increase the choices available regarding which

airline they connect with in PIT vs the traditional code-share model of single-airline itineraries.

Interline connections are available through major travel systems, including the ability for

through-checking of baggage. Sun Air is in the process of installing enhanced baggage storage
features on its aircraft which will substantially improve its capacity for checked baggage handling

that meets all relevant TSA requirements. Previously, the company's aircraft have had

limitations on baggage capacity, particularly with respect to large hard-sided bags that did not fit

in the existing storage facilities.

About Sun Air International

Sun Air Express, LLC d/b/a Sun Air International is a Fort Lauderdale, FL based commuter air

carrier currently serving markets in Pennsylvania, Virginia, Maryland and Texas.

The airline has operated charters and limited scheduled service within Florida and the Bahamas

for a number of years. New management was brought in near the end of 2013, and since that

time has focused on improving operations and initiating a range of marketing activities.

Operational improvements at the airline have been significant. For the Year to Date period, Sun

Air is operating at 100% controllable completion factor (percentage of scheduled flights that are

completed, excluding weather) in its northern operations and over 98% in Texas.
SCHEDULE 1

Annual Projected Operations

CKB-PIT MGW-PIT

Passenger Revenue $492,901 $758,310

Flight Operations 802,845 1,026,351

Maintenance 450,617 638,623

Sales & Service 901,361 1,159,979

Aircraft Ownership 138,000 138,000

Other Expenses 280,000 280,000

Total Operating

Costs 2,572,823 3,242,954

Operating

Profit/(Loss) $(2,079,921) $(2,484,644)

Profit Element (5%) (128,641) (162,148)

Subsidy Required $(l,lOB,563) $(2,646,791)

ASM, 1,729,478 1,880,362

RPM, 985,803 1,128,217

Load Factor 57.0% 60%

Block Hours 2,030 2,697

Annual Departures 2,636 3,853

Available Seats 21,091 30,826

Enplaned Passengers 12,022 18,495

Average Segment Fare $41 $41
Annual Projected Operations

BFD.PIT JHW-PIT PKB.PIT FKL.PIT DUI-PIT

Passenger Revenue $439,021 $454,986 $567,069 $292,843 $ 487,207

Flight Operations 817,098 837,098 999,588 528,176 957,481

Maintenance 492,906 492,906 681,059 399,128 491,482

Sales & Service 790,518 760,394 818,080 464,678 819,660

Aircraft Ownership 138,000 138,000 138.000 111,000 138,000

Other Expenses 128,000 153,000 280,000 150,000 280,000

Total Operating

Costs 2,366.522 2,381,397 2,916,727 1,652,982 2,626,622

Operating

Profit/(Loss) $(1,927,500) $(2,086,411) $(2,349,657) $(1,360,139) $ (2,139,415)

Profit Element (5%) (118,326) (119,070) (145,836) (82,649) . (131,331)

Subsidy Required $(2,045,826) $(2,045,481) $(2,495,454) $(1,442,788) $ (2,270,745)

A5Ms 2,394,662 2,433,600 2,978,726 986,419 2,530,944

RPMs 1,317,064 1,435,824 1,638,300 493,210 1,392,019

load Factor 55.0% 57.0% 55.0% 50.0% 55.0%

Block Hours 2,312 2,312 2,515 1,349 2,505

Annual Departures 2,434 2,434 3,143 1,927 2,636

Available Seats 19,469 19,469 25,147 15,413 21,091

Enplaned Passengers 10,708 11,097 13,831 7,706 11,600

Average Segment Fare $41 $41 $41 $ 38 $42
In conclusion, Sun Air believes that its proposal will provide excellent levels of service to the

communities~ and ensures that they have proper access to the national air transportation network,

offering cost-effective options that meet the requirements of the Essential Air Service Program.

Respectfully Submitted: May 27, 2014

David F. Hackett

Chief Executive

Sun Air Express, LLC