### BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

________________________________________________ ____________ )

Essential Air Service at )

)



### BECKLEY, WEST VIRGINIA ) OST

- 1997

- 2761

CLARKSBURG/FAIRMONT, WES T VIRGINIA ) OST

- 2005

- 20736

MORGANTOWN, WEST VIRGINIA ) OST

- 2005

- 20735

)

Under 49 U.S.C. §41731 et seq. )

________________________________________________ )

SILVER AIRWAYS P ROPOSAL TO PROVIDE S UBSIDIZE D AIR SER V ICE

TO THE COMMUNITIES OF BECKLEY, CLARKSBURG/FAIRMONT

AND MORGANTOWN, WEST VIRGINIA

Correspondence with regard to this document should be addressed to:

Mickey Bowman

Vic e President Essential Air Service

Silver Airways

1100 Lee Wagener Blvd, Suite 201

Ft. Lauderdale, FL 33315

Telephone: 954

- 302

- 5929

Fax: 270

- 689

- 2180

E

- Mail: mbowman@gosilver.com

Silver Airways cordially submits its proposal to provide subsidized air service to the communities of Beckley,

Clarksburg/Fairmont and Morgantown, West Virginia to the United Airlines hub at Washington’s Dulles International

Airport. Silver Airways proposal is for a two year period from start of service.

Silver Airways proposes to operate flights

, under its exi sting United Airlines codeshare. At t he time of this filing, a

definitive agreement to extend Silver Airways existing codeshare to these routes has not been consummated therefore this

bid is contingent upon that agreement being finalized

. Additionally, this is an “ All or Nothing ” bid with the award of all

three cities required. Negotiations between Silver Airways and United Airlines are ongoing and we believe resolution

should be reached in the next few weeks, well before community comments will be due back to the DOT.

Dulles International Airport is a major Unit ed Airlines ’ hub with nearly 300 online daily departures to over 100 cities

worldwide. Other carriers boost the Dulles daily departure average to nearly 390 flights. The bank structure at Dulles is

designed to maximize connections and enable a seamless travel experience. Via the United Airlines codeshare passengers

will continue to enjoy through ticketing and pricing, online and interline baggage connectivity and exposure throughout

the Global Distribution Portals. Additionally pa ssengers would continue to enjoy conveniences such as advanced seat

selection and participation in United Airlines’ Frequent Traveler Program.

In compliance wit h Public Law 100

- 223, Silver Airways proposes to operate these flights using Saab 340 B + turb op rops

that are pressurized and accom modate 34 passeng ers

. The 340 B+ features additional amenities such as stand up

h eadroom

, an active noise cancellation system, and an onboard lavatory. Additionally all Silver Airways flights will

operate under full Pa rt 121 regulations and each flight will have a Flight Attendant onboard.One of the hallmarks of the Silver Airways operation is our ability to provide safe and reliable transportation. To ward this

end, Silver Airways intends to utilize its regiona l maintenance base in DuBois, Pennsylvania. This base, established in

the fall of 2008, is staffed by some of our airline’s most seasoned technicians. Additionally Silver Airways plans t o avail

itself of a spare aircraft that will be positioned in Dulles as part of this operation . With this spare aircraft we have great

flexibility in responding to any operational challenges and can assure these communities receive the level of operational

performance they desire.On

- line United Domestic Destinations Available Via the Dulles Hub:

Allentown, PA; Albuquerque, NM; Albany, NY; Atlanta, GA; Austin, TX; Hartford, CT; Binghamton, NY; Beckley, WV

Nashville, TN; Boston, MA; Burlington, VT; Buffalo, NY; Columb ia, SC; Charlottesville VA; Charleston, SC;

Clarksburg, WV ; Cleveland, OH; Charlotte, NC; Columbus, OH; Colorado Springs, CO; Charleston, WV; Cincinnati

, OH; Dayton, OH; Denver, CO; Dallas, TX; Detroit, MI; Newark, NJ; Greensboro, NC; Greenville, SC; Honol ulu, HI;

White Plains, NY; Huntsville, AL; Houston, TX; Indianapolis, IN; Jacksonville, FL; New York JFK, NY; Las Vegas, NV;

Los Angeles, CA; New York LaGuardia, NY; Kansas City, MO; Orlando, FL; Harrisburg, PA; Morgantown, WV;

Manchester, NH; Miami, FL; M inneapolis, MN; New Orleans, LA; Oklahoma City, OK; Chicago, IL; Norfolk, VA;

Portland, WA; Philadelphia, PA; Phoenix, AZ; Pittsburgh, PA; Pensacola, FL; Providence, RI; Portland, ME; Raleigh

Durham, NC; Richmond, VA; Roanoke, VA; Rochester, NY; San Diego, CA; San Antonio, TX; Savannah, GA; State

College, PA; Louisville, KY; Seattle, WA; San Francisco, CA; Shenandoah Valley, VA; San Juan, PR; Salt Lake City,

UT; Sacramento, CA; St Louis, MO; Syracuse, NY; Tampa, FL; Tulsa, OK, Knoxville, TN.

On

- Line Unite d and Star Alliance International Destinations Available Via the Dulles Hub:

Accra, Ghana; Amsterdam, Netherlands; Aruba, Aruba; Brussels, Belgium; Paris, France; Cancun, Mexico; Moscow,

Russia; Dublin, Ireland; Dubai, Arab Emirates; Rome, Italy; Frankfur t, Germany; Grand Cayman, Cayman Islands; Sao

Paulo, Brazil; Geneva, Switzerland; Kuwait City, Kuwait; London, England; Madrid, Spain; Manchester, England;

Montego Bay, Jamaica; Mexico City, Mexico; Munich, Germany; Tokyo, Japan; Beijing, China; Punta Cana , Dominican

Republic; St Thomas, Virgin Islands; St Croix, Virgin Islands; Ottawa, Canada, Montreal, Canada, Toronto, Canada,

Zurich, Switzerland.Service Option 1

36 We ekly freque ncies between Clarksburg/Fairmont, Morgantown , and Dulles International Airport

Silver Airways proposes to operate these flights unde r its established codeshare relati onship with United Airlines . The

timing of these flights would be optimized for connections to and from the United Airlines connecting banks in Dulles

. This service constitutes three weekday roundt rips operating i n a “round robin” fashion. Three total roundtrips would be

operated over the weekend period as well

Silver Airways

Sample Flight Schedule

Service Option 1

FROM TO DEP ARR FLT EQ P FREQ STOP

S TA STA TIME TIME NUM

Clarksburg Dulles 5:45 am 7:35 am 4023 SF3 X7 1

Clarksburg Dulles 9:52 a m 11:39 am 4024 SF3 X6 1

Clarksburg Dulles 2:41 pm 3:48 pm 4025 SF3 X2 0

Dulles Clarksburg 8:21 am 9:34 a m 4024 SF3 X6 0

Dulles Clarksburg 12:17 pm 2:17 pm 4025 SF3 X2 1

Dulles Clarksburg 9:55 pm 11:50 pm 4026 SF3 X6 1

---------------------------------------------------------------------------------------------------------------------- Morgantown Dulles 6:40 am 7:35 am 4023 SF3 X7 0

Morgantown Dulles 10:39 a m 11:39 am 4024 SF3 X6 0

Morgantown Dulles 1:53 pm 3:48 pm 4025 SF3 X2 1

Dulles Morgantown 8:21 am 10:21 a m 4024 SF3 X6 1

Dulles Morgantown 12:17 pm 1:29 pm 4025 SF3 X2 0

Dulles Morgantown 9:55 pm 11:05 pm 4026 SF3 X6 0

(Note: Th is Schedule is for illustrative purposes and may not reflect the final published product)Clarksburg and Morgantown , West Virginia Service Option 1 (Two Year Contract)

36 Weekly Frequencies to the United Hub at Dulles International A irport

CKB

- IAD CKB

- MGW IAD

- MGW Total

Stats & Assumptions

Aircraft Type SF3 SF3 SF3 SF3

Completion % 98% 98% 98% 98%

Departures 613 1226 1226

3,064

Block Hours 714.63 582.41 1312.69

2,610

Enplaned Passengers 11,985 0 20,500

32,485

OnBoard Passengers

9,625 19,266 19,266 48,157

Load Factor 46% 46% 46% 46%

Avg Fare $95.46 $0.00 $96.18 $95.91

Onboard Average Fare $99.90 $19.19 $92.63 $64.70

A/C Miles

92,488 35,553 171,637 299,678

Segment Mileage

151 29 140 9 8

RPMs (000)

1,453 559 2,697 4,709

ASMs (000)

3,145 1,209 5,836 10,189

Pax Ticket Revenue $961,600 $369,652 $1 ,784,526 $3,115,778

Oper. Expenses

Fuel $423,409 $364,341 $779,223 $1,566,973

Crew $199,148 $162,303 $365,812 $727,263

Maintenance $485,831 $395,944 $892,412 $1,774,187

Station Turns $241,794 $299,130 $452,836 $993,761

Dis tribution $114,656 $229,495 $229,495 $573,646

A/C Ownership $104,757 $40,270 $194,407 $339,434

Promotion $12,000 $0 $12,000 $24,000

Fixed Overhead $80,183 $30,824 $148,803 $259,810

Total $1,661,779 $1,522,307 $3,074,989 $6,259, 074

Operating Loss $700,179 $1,152,655 $1,290,462 $3,143,296

5% Profit Margin on

Cost $83,089 $76,115 $153,749 $312,954

EAS Subsidy Required $783,268 $1,228,770 $1,444,212 $3,456,250Service Option 1

26 Weekly frequencie s between Beckley and Dulles International Airport

Silver Airways proposes to operate these flights unde r its established codeshare relati onship with United Airlines . The

timing of these flights would be optimized for connections to and from the United A irlines connecting banks in Dulles

. This service constitutes two weekday roundt rips, one of which would operate on a one

- stop basis. (The city over which

the single one

- stop flight had not been determined at the time of this submission so an assumption w as made to use a point

roughly 91 miles from IAD and 126 miles from BKW resulting in a circuity of less than 2%) Three total roundtrips

would be operated over the weekend period

. While we realize this weekend frequency is one roundtrip above the required

service solicitation, we believe that this additional trip would be welcomed by the community, particularly in light of the

announced opening of the Summit Bechtel Family National Scout Reserve in nearby Fayette County. Boy Scouts of

America will host it s jamboree there this summer where some 50,000 scouts and another 200,000 visitors are also

expected to attend. This weekend pattern will allow two trips inbound on Sundays to begin an extended stay and two trips

outbound on Saturdays to accommodate outfl ow. Silver Airways understands that the Department may not see fit to

subsidize this additional service and would be amenable to a prorata adjustment to its requested compensation should that

be the case.

Silver Airways

Sample Flight Schedule

Service Opt ion 1

FROM TO DEP ARR FLT EQ P FREQ STOP

STA STA TIME TIME NUM

Beckley Dulles 5:30 am 7:30 am 4014 SF3 X7 1

Beckley Dulles 4:59 p m 6:14 pm 4015 SF3 Daily 0

Dulle s Beckley 3:11 pm 4:39 pm 4015 SF3 Daily 0

Dulles Beckley 9:59 pm 11:59 pm 4017 SF3 X6 1

----------------------------------------------------------------------------------------------------------------------

(Note: This Schedule is for illustrative purposes and may not reflect the final published product)Beckley, West Virginia Service Option 1 (Two Year Contract)

26 Weekly Frequencies to the United Hub at Dulles International Airport

(14 Non

- stop, 12 One

- stop)

BKW

- IAD BKW

- XXX BKW TTL

Stats & Assumptions

Aircraft Type SF3 SF3 SF3

Completion % 98% 98% 98%

Departures

715 613 1,329

Bloc k Hours

971.75 475.45 1,447

Passengers

3,181 2,728 5,909

Load Factor 13% 13% 13.1%

Avg Fare $103.43 $103.43 $103.43

A/C Miles

153,811 77,298 231,109

Segment Mileage

215 126 174

RPMs (000)

683.936 343.716 1,028

ASMs (000)

5,229.574 2,628.148 7,858

Pax Ticket Revenue $329,021 $282,147 $611,168

Operating Expenses

Fuel $574,037 $291,642 $865,679

Crew $270,800 $132,494 $403,294

Maintenance $660,629 $323,225 $983,853

Station Turns $277,390 $171,566 $448,955

Distribution $37,893 $32 ,495 $70,387

A/C Ownership $126,506 $63,576 $190,083

Promotion $12,000 $0 $12,000

Fixed Overhead $96,831 $48,663 $145,494

Total $2,056,086 $1,063,660 $3,119,746

Operating Loss $1,649,333 $859,244 $2,508,578

5% Profit Margin on Cost $102,8 04 $53,183 $155,987

EAS Subsidy Required $1,752,138 $912,427 $2,664,565In conclusion, Silver Airways believes that this pro posal will pro vide these West Virginia communities with superior air

s ervice options . We feel the passenge rs will ben efit from seamless, codeshare service to the United Airlines hub in

Washington Dulles International Airport. With a renewed focus on schedule reliability, Silver Airways hopes to grow

these markets. Silver Airways has proven itself as a depend able Essential Air Service provider and brings a commitment

to work with these communities to address their travel needs to the relationship. I ntegrity of service that has been a

hallm ark of the Silver Airways operat ion and we look forward to extend ing o ur brand into the mid

- Atlantic region.

Respectfully Submitted: April 3 , 2012

______________________ Mickey Bowman

Vice Pr esident Essential Air Service

Silver Airways