June 4, 2015

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

To/From Lambert - St. Louis International Airport

City DOT Docket

Marion/Herrin, IL DOT-OST-2000-7881

Quincy, IL DOT-OST-2003-14492

Cape Girardeau, MO DOT-OST-1996-1559

Hyannis Air Service, Inc., dba Cape Air

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

(508) 862-9719

With codeshare of
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Cape Air has grown from a single aircraft and route in 1989 

to America’s largest commuter airline today

 First route was Boston – Provincetown, 

begun in October 1989 with one aircraft

 Today’s fleet

 83 Cessna 402s in four regions 

 Four Britten-Norman Islanders

 Two ATR-42s in Micronesia

 Operating up to 550 flights daily

 In 2014 flew 750,000 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)
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Cape Air began service in 1989 with three aircraft...
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...And one route: Boston – Provincetown 

Provincetown

Boston

Original Cape Air route map

November 1989 schedule
\ San Juan

Mayaguez

St. Croix

Vieques

Tortola

St. Thomas

Anguilla

Nevis

Virgin Gorda

Culebra

Provincetown

Hyannis

Nantucket

Providence

New Bedford

Martha’s Vineyard

Augusta

Lebanon Rutland

Ogdensburg Saranac Lake

Massena

White Plains

Albany

Manhattan

Rockland

Bar Harbor

Boston

Cape Air Routes

2Q15

Ft. Leonard Wood

Cape Girardeau

Quincy Kirksville

St. Louis

Marion Owensboro

Havre Glasgow

Wolf Point

Sidney

Glendive

Billings

Map inset not to scale

Rota

Saipan

Guam

Micronesia

Denotes seasonal service

Proud to be America’s 

premier commuter 

airline! Block Island
Cape Air 2015

• Annual revenue of $120M 

• 44 airports served, 20 in EAS

• America’s premier commuter airline!
Cape Air has grown steadily for ten years

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$41 

$52 $57 $57 

$71 

$77 

$85 

$99 $103 $108 

$120

$- 

$20 

$40 

$60 

$80 

$100 

$120 

$140 

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Millions

Revenue
One of Cape Air’s unique features is interline connections 

with all of the legacy airlines plus JetBlue

7
8

Cape Air codeshares with American and United

• Cape Air operates flights in Micronesia as

• Flights in the Caribbean have code 

• Flights in the Midwest operate with the code of 

Codeshare highlights
Itineraries connecting between Cape Air and United are 

available on united.com

9
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Over more than 25 years in business Cape Air has 

invested in the airline features smaller communities need

Feature Established

Reliability

Tickets sold through 

Expedia, Orbitz, Travelocity

Interline e-ticketing 

with all legacy airlines

Checked luggage transfer

with all legacy airlines

TSA security program
The Cessna 402 is the backbone of Cape Air’s fleet

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In February 2014 Cape Air added four Britten-Norman 

Islanders to the fleet to serve niche markets with extremely 

short runways

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Cape Air’s Britten-Norman Islander
Cape Air operates two cabin-class ATR-42s in Micronesia 

for United Express configured with 46 passenger seats

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Cape Air’s total fleet is comprised of 90 aircraft

Cessna 402s

On line 75

Purchased Nov. 2014 7

Project 1

Total Cessna 402s 83

Britten-Norman Islander

On line 4

Total Britten-Norman Islanders 4

Cessna 414A (company business only) 1

ATR-42s 2

Grand Total 90

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Cape Air fleet
Cape Air takes environmental sustainability seriously by 

investing in fuel-saving aircraft technologies and 

powering its offices with solar panels 

15
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Cape Air’s Reservations Call Center

Cape Air has its own internal reservations center

800-CAPE-AIR

Never a booking fee!
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The key to Cape Air’s success is our friendly people...

Daffodil “Daffy” Day at Cape Air Reservations
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...And our mantra: 

Have

A

Good

Time

Doing

It!

Make

Our

Customers

Happy,

And

Cape Air celebrates 25 Years!

September , 2014, Provincetown, Massachusetts
QUINCY, MARION/HERRIN, CAPE GIRARDEAU

Essential Air Service for:

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Cape Air has had the privilege of serving Quincy, 

Marion/Herrin and Cape Girardeau since November of 2009

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Cape Air’s first St. Louis arrival

November 8, 2009
Ridership has returned to and plateaued at healthy levels

21

STL passengers

Twelve-months ending

0

5,000

10,000

15,000

20,000

25,000

Oct-10

Jan-11

Apr-11

Jul-11

Oct-11

Jan-12

Apr-12

Jul-12

Oct-12

Jan-13

Apr-13

Jul-13

Oct-13

Jan-14

Apr-14

Jul-14

Oct-14

Jan-15

Apr-15

CGI

MWA

UIN
The popularity of Cape Air’s service is due to 

complex, inter-related contributions

by Cape Air and our community partners

Low fares: 

Reset to $49

Reliable service

High-frequency 

schedule: 36x 

weekly at MWA 

and UIN

Interline ability 

with all legacy 

carriers at St. 

Louis

Codeshare with

Fully-functioning 

global 

distribution

Community 

partnership

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Popular 

service
American Airlines continues to be extremely supportive of 

our codeshare relationship in St. Louis that makes each 

community an “AA” city

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St. Louis connecting itineraries 

are sold on AA’s website as American flights

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While St. Louis is no longer the global gateway of 20 years 

ago, STL still has 1,623 weekly departures to 62 non-stop 

destinations—including all the major markets

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Non-stop St. Louis service

June 2015

Source: OAG
Cape Air’s proposal includes a downtown ticket office in 

each city to enhance airline and airport awareness

• Increases the visibility of the airport and air 

service within the community

• Provides a welcoming place for people to learn 

about the air service from a friendly Cape Air 

agent

• Enables the redemption of targeted 

promotions, providing wide latitude in 

marketing the air service

• Enhances the central business district with a 

vibrant new retail space

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City ticket office highlights

Cape Air Ticket Office in Cape Girardeau
Cape Air’s proposal includes a ramp-side inter-terminal 

shuttle, facilitating seamless connections between 

terminals at St. Louis, without having to re-clear security

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No TSA rescreening to connect between terminals!

Cape Air’s St. Louis inter-terminal shuttle
Subsidy per passenger is well clear of the U.S. DOT’s cap 

of $200 per passenger

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Cape Air EAS subsidy per passenger

Year ending March 2015

$200 subsidy per passenger cap

$104 $108

$134

$0

$50

$100

$150

$200

$250

UIN MWA CGI
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10,000 Enplanements!

Cape Air enplaned more than 10,000 passengers at 

Quincy and Marion/Herrin in each of the last three years

Quincy’s 10,000th passenger of 2013 

Michael Troyanovich December 11, 2013
Cape Air proposes a continuation of status quo service for 

Quincy, Marion/Herrin and Cape Girardeau, 

and prefers a 4-year reselection at a discount to DOT

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Expenses

Two-year term; discount for 4-year term, preferred, is noted below

Drivers

Inseparable package of three cities

Drivers CGI MWA UIN

Daily RTs 3.4 5.1 5.1

Pax/Dpt 4.8 5.1 5.1

LF 60% 64% 64%

Fare (net) $38.50 $38.50 $38.50 

Pax Rev/Dpt $185 $197 $197 

Annual Sched Dpts 2,428 3,642 3,642

Annual Pax 12,014 19,222 19,222

CGI MWA UIN

Fuel $484,315 $692,460 $648,378 

Maintenance $683,532 $973,211 $894,834 

Pilots $282,085 $332,064 $332,064 

Ownership $167,853 $236,969 $215,703 

Rents $84,749 $182,325 $163,486 

Staff $211,054 $275,718 $275,718 

Landing Fees $175,149 $162,661 $160,046 

Marketing $67,385 $67,385 $67,385 

Customer Svc. $136,529 $169,846 $169,846 

General & Admin./Other $93,829 $147,214 $160,209 

Operating expense $2,386,480 $3,239,851 $3,087,669 

Return of 5% $125,604 $170,518 $162,509 

Economic Expense $2,512,084 $3,410,370 $3,250,178 

Passenger Revenue $448,652 $717,843 $717,843

Profit ($2,063,432) ($2,692,527) ($2,532,335)

Proposed Subsidy $2,063,432 $2,692,527 $2,532,335

Per Departure $850 $739 $695

Discount for 4-year term

Proposed Subsidy $2,012,928 $2,626,625 $2,470,354

Per Departure $829 $721 $678

4-year option 

preferred

Year 1 Year 1

Note: See escalation factors next slide
To align revenue with costs over time 

Cape Air proposes a 4% annual escalation factor

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Annual subsidy including escalation

Two-year reselection CGI MWA UIN

Year 1 $2,063,432 $2,692,527 $2,532,335 

Year 2 $2,145,969 $2,800,228 $2,633,628 

Four-year reselection

Year 1 $2,012,928 $2,626,625 $2,470,354 

Year 2 $2,093,445 $2,731,690 $2,569,168 

Year 3 $2,177,183 $2,840,958 $2,671,935 

Year 4 $2,264,270 $2,954,596 $2,778,812 
Expenses: CGI 4x daily service

Two-year term; discount for 4-year term, preferred, is noted below

CAPE GIRARDEAU 4x DAILY OPTION

Cape Air also proposes an option, requested by 

Cape Girardeau, for service at 4x daily

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CGI 4x Daily

Daily RTs 4.0

Pax/Dpt 4.8

LF 60%

Fare (net) $38.50 

Pax Rev/Dpt $185 

Annual Sched Dpts 2,831

Annual Pax 13,951

CGI 4x 

Fuel $564,813 

Maintenance $797,142 

Pilots $327,564 

Ownership $167,853 

Rents $84,749 

Staff $211,054 

Landing Fees $204,260 

Marketing $67,385 

Customer Svc. $136,529 

General & Admin./Other $105,106 

Operating expense $2,666,455 

Return of 5% $140,340 

Economic Expense $2,806,795 

Passenger Revenue $523,223 

Profit ($2,283,572)

Proposed Subsidy $2,283,572

Per Departure $807

Discount for 4-year term

Proposed Subsidy $2,227,680

Per Departure $787

Drivers

4-year option 

preferred

Year 1 Year 1

Note: See escalation factors next slide

Key points

•24 weekly departures, the requested frequency, has historically 

been predicated on two round trips on weekend days, which are no 

longer off-peak times due to Cape Air’s opening of EAS markets to 

leisure travelers due to the low fares.

•Consistent daily service has proven time and again to generate a 

disproportionate amount of ridership

•The incremental departures come at a discount, as fixed costs are 

covered
Escalation factors for 4x daily Cape Girardeau service

Two-year reselection CGI 4x

Year 1 $2,283,572 

Year 2 $2,374,915 

Four-year reselection

Year 1 $2,227,680 

Year 2 $2,316,788 

Year 3 $2,409,459 

Year 4 $2,505,837 

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Annual subsidy including escalation
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Cape Air would be honored to be reselected to provide EAS at 

Quincy, Marion/Herrin and Cape Girardeau

 Full interline connectivity, allowing same-ticket connections with the world

 Codeshare with American Airlines

 Proven track record, making Cape Air a low-risk option

 Global distribution

 Robust marketing and local ticket offices in the downtown business districts

 Robust infrastructure of a mature commuter airline

Cape Air features:

Cape Air: a great choice for EAS

at Quincy, Marion/Herrin and Cape Girardeau

Hyannis Air Service, Inc., dba Cape Air

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

(508) 862-9719