### BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

__________________________________________ )

Essential Air Service at )

)



### EL DORADO/CAMDEN, ARKANSAS ) OST

- 1997

- 2935

HARRISON, ARKANSAS ) OST

- 1997

- 2935

)

Un der 49 U.S.C. §41731 et seq. )

__________________________________________

GULFSTREAM INTERNATIONAL AIRLINES P ROPOSAL

TO PROVIDE S UBSIDIZED AIR SERICE AT

EL DORADO/CAMDEN AND HARRISON, ARKANSAS

Correspondence with regard t o this document should be addressed to:

Mickey Bowman

Vice President of Essential Air Service

Gulfstream International Airlines

1100 Lee Wagener Blvd., Suite 201

Ft. Lauderdale, FL 33315

Telephone: 270

- 689

- 2180

Fax: 270

- 689

- 2180

E

- Mail: mbowman@gulfstrea mair.com

Gulfstream Internation al Airlines (“Gulfstream”) cordially submits its proposal s to provide subsidized air

servic e to both El Dorado/Camden and Harrison, Arkansas

. Gulfstream hereby offers one option for

service at each community

. These bids ar e not contingent upon one another.

Gulfstream proposes to operate flights under its independent Gulfstream Interna tional Airlines identity to

the hub airport of Memphis, Tennessee

. Gulfstream has maintained interline ticketing and baggage

agreements wit h most legacy carriers and wi ll schedule its flights to maximize connecting opportunities

. Gulfstream contends that reasonable local fares will stimulate demand and the variety of de st inations

available from Memphis will allow this market to grow

. Toward that end we will establish a fare structure

predicated on a $150 roundtrip fare b etween these cities and Memphis

. Gulfstream flights will be available

for sale through all major reservation portals and we will maintain our own web based booking site as w ell

as a reservation call center.

It should also be noted that Gulfstream is in discussions with a major legacy carrier i n an effort to offer a

fully coordinated interline product on these flights. Should those effo rts be successful, El Dorado/Camden

and Harrison passengers will enjoy amenities well beyond what they are receiving today including through

pricing and baggage check, advance seat selection, inclusion in the legacy carrier frequent flyer program

and reservation service through all major online portals as well as the legacy carrier’s own website and call

center.

In compliance with Public Law 100

- 223, Gulfstream proposes to operate these flights using Beech 1900D

turb oprops that are pressurized and accom modate 19 passeng ers

. The 1900D features stand up h eadroom

with ample cargo capacity to accommodate even bulky military duffle bags.One of the hallmarks of the Gulfstream operation is our ability to provide safe and reliable transportation.

The addition of these cities represents growth to Gulfstream’s Memphis operation. With the award for

service to Muscle Shoals, AL, Gulfstream began the process of establishing a regional maintenance base in

the mid

- south. Additionally, a spare aircraft was allocated to the Memphis operation. With this spare

located in Memphis , Gulfstream will have great flexibility in responding to any operational challen ges and

assure s these communities receive the level of oper ational performance they deserve.

Service Option 1 El Dorado/Camden, Arkansas

24 We ekly freque ncies between El Dorado/Camden. Arkansas and Memphis, Tennessee

Gulfstream proposes to operate these flights under it own independent marketing identity , though it will

work to secure a full coordinated interline relationship with a Legacy Carrier p rior to actual service start

. The timing of these flights w ill be optimi zed for connections to and from other airline flights at Memphis

Gulfstream proposes to encourage connecting traffic by using a simplified local fee structure whereby

pas sengers con necting to or from other airline flights would pay only the low, local fare in addition to the

low fares a lready a feature at Memphis

. The basic servic e pattern would cons ist of two roundtrip s each

weekday to Memphis

. A single roundtrip would operate on S aturday s and Sunday s to Memphis

.

Gulfstream Airlines

Sample Flight Schedule

Service Option 1

FROM TO DEP ARR FLT EQUIP FREQ STOP

STA STA TIME TIME NUM

EL DORADO/CAMDEN MEMPHIS 064 0 075 0 3580 BE1 X7 0

EL DORADO/CAMDEN MEMPHIS 1 14 0 1250 3582 B E1 X6 7 0

EL DORADO/CAMDEN MEMPHIS 163 5 1745 3584 BE1 7 Only 0

MEMPHIS EL DORADO/CAMDEN 0930 104 0 3581 BE1 X 7 0

MEMPHIS EL DORADO/CAMDEN 1935 204 5 3583 B E1 X6 0

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

Essential Air Service Proposal

El Dorado/Camden, AR

- Memphis, TN

Option 1

El Dorado/Camden

Hub Served Memphis

Number of Roundtrips per Se rvice Day 2

(2 non

- stop)

Operating Statistics

Assumed Completion % 98%

Annual Adjusted Block Hours 1,430.80

Annual Adjusted Departures 1,226.40

Annual Adjusted ASMs 4,776,841

Annual RPMs 568,260

Projected Load Factor 11.9 %

Revenue Projections

Enplaned Passengers 2,772

Mileage (Average as

Operated) 205

Average Fare $ 69.38

Passenger Revenue $ 192,308

Expense Projections

Flight Operations $337,242

Ownership $323 ,952

Maintenance $696,475

Reservations, Stations & Administration $635,510

Fuel $686,786

Marketing $12,000

Total Annual Expenses $2,691,964

Projected Profit / (Loss) ($2,499,657)

Profit Element @ 5% $134,598

Annual Subsidy Required $2,634,255

Subsidy per Departure $2,147.95

Subsidy per Passenger $950.31Service Option 1 Harrison, Arkansas

24 Weekly frequencies between Harrison. Arkansas and Memphis, Tennessee

Gulfstream prop oses to operate these flights under it own independent marketing identity, though it will

work to secure a full coordinated interline relationship with a Legacy Carrier prior to actual service start.

The timing of these flights will be optimized for conne ctions to and from other airline flights at Memphis

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 additio n to the

low fares already a feature at Memphis. The basic service pattern would consist of two roundtrips each

weekday to Memphis. A single roundtrip would operate on Saturdays and Sundays to Memphis.

Gulfstream Airlines

Sample Flight Schedule

Service O ption 1

FROM TO DEP ARR FLT EQUIP FREQ STOP

STA STA TIME TIME NUM

HARRISON MEMPHIS 064 0 0750 3585 BE1 X7 0

HARRISON MEMPHIS 163 5 1745 3587 BE1 X6 0

MEMPHIS HARRISON 0930 104 0 3586 BE1 6 Only 0

MEMPHIS HARRISON 1445 155 5 3588 B E1 X67 0

MEMPHIS HARRISON 1935 204 5 3590 B E1 X6 0

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

Essential Air Service Proposal

Har rison, AR

- Memphis, TN

Option 1

Harrison

Hub Served Memphis

Number of Roundtrips per Service Day 2

(2 non

- stop)

Operating Statistics

Assumed Completion % 98%

Annual Adjusted Block Hours 1,430.80

Annual Adjusted Depa rtures 1,226.40

Annual Adjusted ASMs 4,613,729

Annual RPMs 783,427

Projected Load Factor 17.0%

Revenue Projections

Enplaned Passengers 3,957

Mileage (Average as

Operated) 198

Average Fare $ 69.38

Passenger Revenue $ 274,496

Expense Projections

Flight Operations $337,242

Ownership $323,952

Maintenance $696,475

Reservations, Stations & Administration $660,835

Fuel $686,786

Marketing $12,000

Total Annual Expenses $2,717,289

Projected Profit / (Loss) ($2,442,793)

Profit Element @ 5% $135,864

Annual Subsidy Required $2,578,657

Subsidy per Departure $2,102.62

Subsidy per Passenger $651.72In conclusion, Gulfstream b elieves these propo sal s will provide the communities of El Dorado/Camden

and Harrison with a superior air s ervice option . We feel the passengers will benefit from the fact that

Memphis is a primary logistical and b usin ess center with an airport that serves as a hub for a ma jor legacy

carrier. In 2009 over 5,000,000 passengers enplaned in Memphis. Delta Air Lines alone offers over 200

daily departures with non

- stop service to some 87 destinations around the world. Gulfstream will provide

this service on s tand up, pressuriz ed airliners and the infrastructure we will establish in support of this

operat ion will add jobs to the local economy . Additionally the integrity of service that has been a hallm ark

of the Gulfstream operation will assure both dependability and reliabilit y to the traveling public and result

in increased ridership and passenger satisfaction.

Respectfully Submitted: May 25, 2011

______________________ Mickey Bowman

Vice President of Corporate Development

Gulfstream International Airlines