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 

### etseq. ) ) ) 

### ) OST-2003-14528 ) OST-2004-17617 ) OST-1997-2523 ) OST-2003-14950 ) OST-2005-20734 )OST-2005-20735 )OST-2005-20736 ) )



### SUNAIR INTERNATIONAL PROPOSAL TO PROVIDE SUBSIDIZED ESSENTIAL AIR SERICE By Orders 2014-3-12 and 2014-2-13, the Department requested proposals from carriers interested inproviding Essential Air Service tothe communities ofBradford, Dubois, andFranklin/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 airservice tothose communities.
Correspondence withregard to this document should beaddressed to: David Hackett ChiefExecutive Officer SunAir Express, LLC. d/b/a SunAir 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 ofdecline. 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 tothe airline's policy ofincluding FirstOfficers onits' scheduled flights. SunAir isprepared tomake substantial investments, both operationally aswell as inthe 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 toprovide service to atleast three communities among Jamestown, Bradford, Altoona, Johnstown andParkersburg. Sun Air proposes to serve Jamestown; Bradford, Altoona, Johnstown, Franklin/Oil City and Parkersburg for afouryearterm, andto serve ClarksburgfFairmont andMorgantown fortwoyear 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 withmost U.S. major airlines viaSun Air's contracted distribution capabilities. The respective subsidy amounts foreach citypair are listed inSchedule 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 ofthe communities are not currently meeting the eligibility requirements ofEAS in terms ofthe 10-enplanement per day rule orthe $200 per passenger cap. In almost every case, the annual enplanements inthese communities have dropped bymore 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 withthe communities torecover their lostactivity. While there are varied reasons fortheenplanement declines, the driving factors include:

• Higher fares

• Inadequate local marketing

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

• insufficient frequency ofservice and

• Consistently poorreliability bythe 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 becancelled first. And thus aself-perpetuating cycle results: regional airline code share flights are the first to be cancelled, and the customers quickly learn that these small communities cannot berelied upon forconsistent 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 Airwill be actively involved with the local communities (including onthe 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 needisclearly there andthe Department should support efforts toachieve those important goals. The Pennsylvania Air Service Committee recently contracted for one of the country's leading aviation consulting firms to complete acomprehensive study ofwhether regional service into and out of PIT would be viable, referred to as the "PIT Connector" project. The enplanement forecasts incorporated inthat study are generally inline, and insome 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, duetothe convenience, pricing andreliability improvement available tothe communities. 

## Service Proposal Sun Air's proposed weekly frequencies are shown below. Each community would have at least one overnight aircraft to enable anearly morning departure andevening arrival. Flight schedules throughout the restofthe daywould bespread out, andwould befinalized incooperation withthe respective community. None ofthe markets envision one-stop orthrough flights

...all arenonstop. Proposed Flight Fre9uencies, Round Trip to and from Pittsburgh International Airport: Bradford: 24 Weekly round trips, withfourduring the weekdays andtwo each weekend day. Dubois: 26 Weekly roundtrips, with fourduring the weekdays andthree each weekend day. Franklin: 19Weekly round trips, withthree during theweekdays andtwo each weekend day. Jamestown: 24Weekly round trips, with fourduring theweekdays andtwo each weekend day. Parkersburg: 31 Weekly round trips, withfive during the weekdays andthree each weekend day. Clarksburg: 26 Weekly round trips, withfour during the weekdays andthree each weekend day. Morgantown: 38 Weekly round trips, with six during theweekdays and foureach weekend day. Local fares would besetforeffectiveness of "add-on" prices to flights fromPIT, generally inthe $29 to $59 range each way. These fares would allow allPIT Connector flights tobepriced very attractively tothe passengers, taking advantage oflow fares inPITrelative toother regional higher-cost hubs. Additionally, the low local fares increase the choices available regarding which airline they connect with inPIT vsthe traditional code-share model ofsingle-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 storagefeatures on itsaircraft which will substantially improve itscapacity 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 inthe existing storage facilities.



### About SunAirInternational Sun Air Express, LLC d/b/a Sun Air International is a Fort Lauderdale, FL based commuter air carrier currently serving markets inPennsylvania, Virginia, Maryland and Texas. The airline has operated charters and limited scheduled service within Florida and the Bahamas for a number ofyears. New management was brought in near the end of2013, and since that time has focused on improving operations and initiating arange ofmarketing activities. Operational improvements atthe airline have been significant. For the Year to Date period, Sun Air is operating at 100% controllable completion factor (percentage ofscheduled flights that are completed, excluding weather) inits northern operations and over98% inTexas.

### 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% BlockHours 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 $41Annual 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 $42In 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 airtransportation network, offering cost-effective options that meetthe requirements oftheEssential Air Service Program. Respectfully Submitted: May 27, 2014

David F.Hackett ChiefExecutive SunAirExpress, LLC