'APARTMENT OF, 

BEFORE THE ' • • /T- r OPERATIONS 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON,D.C. wn --,•? j c A Ir 28 

) 

Essential Air Service at ) 

) 

MACON, GEORGIA ) OST-2007-28671 

) 

Under 49 U.S.C. §41731 et seq. ) 

GULFSTREAM INTERNATIONAL AIRLINES PROPOSAL 

TO PROVIDE SUBSIDIZED AIR SERICE AT 

MACON. GEORGIA 

Correspondence with regard to this document should be addressed to: 

Mickey Bowman 

Vice President of Corporate Development 

Gulfstream International Airlines 

3201 Griffin Road, 4* Floor 

Ft. Lauderdale, FL 33312 

Telephone: 270-689-2180 

Fax:270-689-2180 

E-Mail: mbowman@gulfstreamair.com 

Gulfstream International Airlines ("Gulfstream") cordially submits its proposal to provide subsidized air 

service to Macon, Georgia. Gulfstream hereby offers one option for service. 

Gulfstream proposes to operate flights as an independent carrier, to the hub airports of both Orlando and 

Tampa, Florida. Gulfstream, as an independent airline, maintains interline baggage and ticketing 

agreements with most legacy carriers. Gulfstream proposes to distribute these flights via its own 

reservation system allowing sale through both a web based booking engine and through other Global 

Distribution Systems. As an independent airline, Gulfstream will be in full control of its scheduling and 

pricing and will maintain the low local fares that are the basis for the noted traffic stimulation of this bid. 

Customers with destinations beyond Orlando or Tampa will find that these low local fares will pair nicely 

with the low fares already offered from Orlando and Tampa by both low cost carriers as well as the legacy 

carriers. Should the community prefer, Gulfstream would be will to service either hub exclusive of the 

other. 

Gulfstream intends to focus on these two destinations to retain traffic that has historically leaked to Atlanta. 

Key in this offer is the assumption of a fare of only $45.33, the base of $49.00. Low fares drive traffic, 

particularly to destinations such as Orlando and Tampa. We believe these low local fares will drive both 

Origin/Destination passengers and flow traffic over these hubs. The Macon market will have a chance to 

return to its historic enplanement levels, given the ability of passengers to connect both "low cost" and 

legacy airlines. Our service will feature a single roundtrip each service day to Orlando and a single 

roundtrip each service day to Tampa. Tampa service has the added benefit of linking Robbins Air Force 

Base to the MacDill Air Force Base facility and its 6"" Air Mobility Wing. The MSA population of Macon 

is in excess of 220,000 residents. We firmly believe the fare levels and service patterns we are proposing 

will capture lost traffic. 
A study of historic Macon traffic reveals the ability of the community to enplane far more passengers than 

we are forecasting. According to DOT T-lOO statistics, for full year 2006, Macon enplaned 12,730 

passengers while deplaning over 14,000. In 2005, those numbers were 16,307 enplaned passengers with 

17,417 deplaned. Obviously there is far greater potential for ridership that is currently being captured. 

Unfortunately, in its cursory review of our original filing the DOT did not recognize the traffic potential of 

this proposal. Quoting from Order 2010-10-5, it stated, "Gulfstream's subsidy request of $2,733,975 would 

result in a subsidy per passenger in excess of $900." Gulfstream believes in the city of Macon. To 

demonstrate our commitment, Gulfstream proposes to cap its request for subsidy at a rate not to exceed 

$200 per enplaned passenger after the initial six months of service. 

Gulfstream proposes to utilize a six calendar month, rolling average of enplaned traffic as a metric. The 

six month rolling average would be used to address any normal seasonality that might exist in the 

marketplace. In as much as all new service initiatives take some time to mature, Gulfstream would propose 

that this "cap mechanism" begin in its 6th month of service or after roughly 180 days of service. In other 

words, should Gulfstream begin Macon service January 1, 2011, the proposed $200 cap would be put into 

effect for the full month of June 2011. Gulfstream would propose to include the passenger enplanements 

on the new routes in its monthly claim documents. In a similar fashion as the claim document applies a 

weekly subsidy cap on completions, Gulfstream would propose to limit its own subsidy request by applying 

a metric of a rolling six month average of Enplaned Passengers multiplied by $200 for the Billing Period in 

question. In example, assuming a Jan. 1 2011 service start, Gulfstream compensafion for the June 2010 

billing period would be subject to a $200 per enplaned passenger cap, with the enplanement figure being 

determined by the average of the monthly enplanements of month of Jan-11 through Jun-11. Similarly, 

July 2011 would be capped with an enplanement figure derived from an average for the period of Feb-11 

through Jul-11. Assuming sufficient enplanements, Gulfstream would receive the full amount of the 

subsidy owed commensurate with normal completion calculations. During the term of this contract, 

should the statutory $200 cap be raised, Gulfstream would propose the capping mechanism be raised as 

well. 

In compliance with Public Law 100-223, Gulfstream proposes to operate these flights using Beech 1900D 

turboprops that are pressurized and accommodate 19 passengers to the, FAA defined, hubs at Orlando, FL 

and Tampa, FL. The 1900D features stand up headroom and a pressurized cabin that we feel is critical in 

recovering lost passengers. 
Service Option 1 

24WeekIy frequencies between Macon, Georgia and Orlando, Florida/Tampa, Florida 

Gulfstream proposes to operate these flights as an independent carrier. The timing of these flights would 

be optimized for connections at each airport as well as optimize local traffic. Gulfstream proposes to 

encourage connecting traffic by using a simplified local fee structure whereby passengers connecting to or 

from other airline flights would pay only the low, local fare in addition to the low fares already a feature at 

both Orlando and Tampa. The basic service pattern would consist of One roundtrip each weekday to 

Orlando and One roundtrip each weekday to Tampa. A single roundtrip on Saturday would operate to 

Orlando and a single roundtrip on Sunday would operate to Tampa. 

Service Option 1 

FROM TO 

STA STA 

Gulfstream Airlines 

Sample Flight Schedule 

DEP ARR FLT EQUIP FREQUENCY 

TIME TIME NUM 

STOP 

MCN MCO 900am 1040am 9310 BEl Monday thru Saturday 0 

MCN TPA 130pm 310pm 9311 BEl Sunday thru Friday 0 

FROM TO DEP ARR FLT EQUIP FREQUENCY STOP 

STA STA TIME TIME NUM 

MCO MCN 1120am 100pm 9310 BEl Monday thru Saturday 0 

TPA MCN 400pm 540pm 9311 BEl Sunday thru Friday 0 

(Note: This Schedule is for illustrative purposes and may not reflect the final published product) 
GULFSTREAM INTERNATIONAL AIRLINES 

Essential Air Service Proposal 

Macon, GA 

1 Roundtrips to Orlando, FL, 1 Roundtrips to Tampa, FL 

Hub Served 

Number of Roundtrips per Service Day 

Operatine Statistics 

Assumed Completion % 

Annual Adjusted Block Hours 

Annual Adjusted Departures 

Annual Adjusted ASMs 

Annual RPMs 

Projected Load Factor 

Revenue Projections 

Enplaned Passengers 

(Average as 

Mileage Operated) 

Average Fare 

Passenger Revenue 

Expense Projections 

Flight Operations 

Ownership 

Maintenance 

Reservations, Stations & Administration 

Fuel 

Marketing 

Macon, GA 

Orlando / Tampa 

98% 

2,044.41 

1,226 

7,573,041 

4,468,750 

59.0% 

13,750 

329 

$45.33 

$ 623,219 

$236,572 

$306,360 

$816,160 

$902,969 

$905,267 

$30,000 

Total Annual Expenses $3,197,327 

Projected Profit / (Loss) ($2,574,109) 

Profit Element @ 5% $159,866 

Annual Subsidy Required $2,733,975 

Subsidy per Departure $2,229.26 

Subsidy per Passenger $ 198.83 

Note, for purposes of this bid, the two routes are shown collectively give the fact that the stage lengths are 

virtually identical and our stations costs very similar. Additionally we feel the traffic will be roughly 

equivalent whether to and from Orlando or Tampa. 

In conclusion, Gulfstream believes that this proposal will provide the community of Macon, Georgia with 

superior air service. Gulfstream believes that the "capping mechanism" we are proposing with this bid is 

both innovative and indicative of the level of commitment we have for the Essential Air Service Program. 

We feel the community will benefit from retention of traffic that has historically been lost to Atlanta, the 

ability to seamlessly connect to and from both low cost and legacy carriers via both the Orlando and Tampa 

hubs, and finally the integrity of service that has been a hallmark of the Gulfstream operation. 

Respectfully Submitted: November 12, 2010 

Mickey Bowman 

Vice President of Corporate Development 

Gulfstream International Airlines