October 27, 2014 Proposal of Hyannis Air Service, Inc. dba Cape Air to provide subsidized Essential Air Service for: 

# Massena, NY

To/From 

# Boston via Albany

Docket DOT

- OST

- 2012

- 0163

Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 (508) 862

- 9719

# Cape Air is delighted to have served Massena for more than six years

• Cape Air started serving Massena on September 16, 2008

• Since then we have flown more than 48,000 passengers to or from Massena

• Cape Air serves Massena three times daily to/from Boston, via Albany

• Fares are low, in 2014 averaging just $53

net

• Serving both Massena and Ogdensburg provides critical mass to recover from irregular operations

1 Overview

Massena ribbon cutting

# Cape Air’s service at Massena has brought ridership to a modern high

2 Source: US DOT T100 and Cape Air FLIFO Massena enplanements

723 2,327 2,056 3,201 2,925

2,085

950 3,252 3,350 4,396 5,027 4,854

0 1,000 2,000 3,000 4,000 5,000 6,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

# OVERVIEW Cape Air

34 

# 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

 76 Cessna 402s in four regions

 Four Britten

- Norman Islanders

 Two ATR

- 42s in Micronesia

 Operating up to 550 flights daily

 In 2013 flew 728,000 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 )

# Cape Air 2014

• Annual revenue of $120M

• Financially stable

• 44 airports served, 20 in EAS

• 83 aircraft

5 Captain Krista Poppe
Augusta basedSan 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 Saranac Lake Ogdensburg Massena

White Plains Albany

Manhattan Rockland Bar Harbor

Boston



# Cape Air Routes

October 2014 Ft. Leonard Wood

Cape Girardeau Quincy Kirksville

St. Louis

Owensboro Marion Havre Glasgow
Wolf Point Sidney

Glendive

Billings

Map inset not to scale Rota Saipan

Guam Micronesia Denotes seasonal service 

# Proud to be America’s

finest commuter airline!
Block Island

# One of Cape Air’s best features is interline connections with all of the legacy airlines plus JetBlue, giving Massena

access to the world

7

# Itineraries connecting between Cape Air and United are

available on united.com

8

# At joint cities Cape Air’s connecting destinations appear on jetblue.com

9 Massena on jetblue.com!

# Through Expedia and other OTAs, Cape Air connects EAS

communities with most network airlines

1011 

# Over more than 20 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

# Cape Air proposes continued service

with our fleet of 76 Cessna 402s

12

# Cape Air takes environmental sustainability seriously by investing in fuel

- saving aircraft technologies and powering its offices with solar panels

1314 Cape Air’s Reservations Call Center 

# Cape Air has its own internal reservations center

800

- CAPE

- AIR (Where there is never a booking fee!)

# Since 2011 Cape Air has operated a ticket office in

Massena

1516 

# The key to Cape Air’s success is our friendly people...

Daffodil “Daffy” Day at Cape Air Reservations17 

# ...And our mantra:

H ave

A

Go od

T ime

D oing

I t! M ake

O ur

C ustomers

H appy,

A nd Cape Air celebrates Valentine’s Day in the Caribbean

# MASSENA Air Service For

18

# Marketing Massena’s air service is a key part of our job... ...and it’s great fun, too!

# Cape Air is pleased to propose continued service at

Massena

20 Notes:

• Cape Air prefers a four

- year reselection, offered at a discount

• See note on next slide regarding annual escalation factor 4

- year option

preferred Drivers Economics

— Year 1 (see note)Year 1Year 1 Daily RTs 3 Completion rate 97% Pax/Dpt 4.41

Load Factor 49% Fare (net) $53.01 Pax Rev/Dpt $233.79 Fuel $866,537

Maintenance $1,034,800

Pilots $255,058

Ownership $354,443

Stations $492,457

Operating Fees $120,401

Marketing $63,375

General & Admin./Other $272,230

Operating Expense $3,506,415

Return of 5% $184,548

Economic Expense $3,690,963

Passenger Revenue $1,082,190

Profit ($2,608,773)

Conforming 2

- Year
Subsidy Required $2,608,773

Per Departure $1,228

Per Passenger $278

4

- Year Contract Discount $2,549,293

Per Departure $1,200

Per Passenger $272

# To align revenue with costs over time Cape Air proposes a 4% annual escalation factor

21 Annual subsidy including escalation



### Two

- year reselection MSS

Year 1 $2,608,773

Year 2 $2,713,124

Four

- year reselection

Year 1 $2,549,293

Year 2 $2,651,265

Year 3 $2,757,315

Year 4 $2,867,60822 

# Cape Air would be honored to be reselected at Massena!

 Proven service that yields record enplanements at Massena

 High

- frequency non

- stop service to/from Boston Logan; via Albany

 Full interline connectivity, allowing same

- ticket connections with the world

 Global distribution

 Ample fleet of back

- up aircraft

 Robust marketing and downtown ticket office Cape Air offers the airline amenities Massena needs:



## Cape Air: Your Community Wings!

# Thank You!

23

Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 (508) 862

- 9719