## Proposal to Provide Essential Air Service at Owensboro, Kentucky Docket DOT-OST-2000-7855

Direct Inquiries Regarding this Proposal to:

Shane Storz, CEO Air Choice One Airlines 12300 Old Tesson Road, Suite 200 F, Saint Louis, MO 63128 Phone: (866) 435 -9847 Fax : (314) 843 -8527 E- mail: shane@airchoiceone.com



# Multi-Aero Inc. d/b/a Air Choice One

# Our Commitment

09/13/2011 

### Air Choice One is aware of the many challenges facing EAS communities. Our proposal will give the community of Owensboro, Kentucky the best access to the national transportation system at 

### reasonable prices. We understand the efforts of a dedicated air carrier are critical to your continued success. Air Choice One is that air carrier and we believe the strategy outlined in our proposal will support and complement airport development efforts. We believe our analysis, planning, marketing strategy, and dedication to the community enable us to win the confidence of local travelers. Our outstanding customer service keeps them coming back. We have proven our strategy works with other EAS communities and we are committed to delivering the same results in yours . We are committed to reestablishing reliable air service and rebuilding customer loyalty. This proposal allocates substantial resources to support marketing efforts. Our achievements in our other EAS markets demonstrate that our marketing strategies are successful. Through on -site community outreach, community-specific advertising, consistent flight schedules, and outstanding customer service, we will build consumer recognition in the community and attract more passengers to your airport. We are committed to providing you with outstanding service and will continue working with you 

### throughout our term to provide the next level of air service and, in turn, success for all.

# Market Growth Strategy - Airport Partnerships Air Choice One will team with your local airport to raise awareness about your communities’ air service and increase enplanements.

• LOCAL AIRPORT INITIATIVES • Provide Financial Support Through Discounted Fuel Costs, Landing Fees, and Rental Agreements 

### • Educate the Community about the EAS Program and Air Choice One’s Service • Draft and Distribute Press Releases • Community Involvement • Participate in TV and Radio Coverage • Distribute Information Pertaining to Air Choice One at Local Business Events

09/13/2011

# Market Growth Strategy - Airport Partnerships Air Choice One will team with your chosen destination airport to promote tourism opportunities and encourage air travel to your community, again, increasing enplanements.

• LAMBERT ST. LOUIS INTERNATIONAL AIRPORT (STL) INITIATIVES • Aggressively pursuing EAS Communities Through Partnership Programs

– Local Visits and Financial Support

– Annual EAS Summit Held at STL Airport

– STL Currently Supports Over 50 Daily Flights to Seven EAS Communities • EAS Communities Partnering With STL Have Benefited From a Steady Increase in Ridership • Provide Marketing Funds to Both Air Choice One and the Local Community • Market Vacation Packages to STL and Beyond and to Local Communities From STL • Expedited Security Passes—Passengers With Connections Enter Security Through First/Business Class Line • Discount Coupons for Airport Shopping and Concessions



### • NASHVILLE INTERNATIONAL AIRPORT (BNA) INITIATIVES • EAS Communities Receiving Reliable Service to Hub Airports Have Benefited From a Steady Increase in Ridership • Market Vacation Packages to BNA and Beyond and to Local Communities From BNA • Air Choice One Flights will be Serviced by American Airlines
09/13/2011

# Market Growth Strategy –

Partnering With the Community

09/13/2011 

### Air Choice One is dedicated to working with your community to reinvigorate the service at your airport and sustain growth that will launch us into the future.

• WE ARE YOUR NEIGHBORS • Corporate Headquarters in Midwest • Increase Local Career Opportunities • WE ARE IN YOUR COMMUNITY • Routine On -Site Sales Visits • Chamber of Commerce Participation and Membership • Airport Affiliate Participation • STRONG PUBLIC RELATIONS AND MEDIA OUTREACH • Business Incentive Programs • Travel Agent Discounts • Business to Business Communication • Attendance at Public Events 

### • WE KEEP YOU INFORMED • Monthly Airport Board Updates

# Market Growth Strategy – Marketing Investment

09/13/2011 Air Choice One reinvests in our served communities.

• TRADITIONAL MEDIA • Radio-Talk Shows/Commercials • TV Commercials and Event Coverage • Print- Newspaper/Magazines • Billboards • Web Based

– E - Blasts- Constant Contact

– Monthly E - Mail Promotions

– City Representation on Our Website • SOCIAL MEDIA • Twitter, Facebook, Linked In • INTERACTIVE MEDIA • Contests • You Tube/Videos • EVENTS AND SPONSORSHIPS • Local Charitable Support- March of Dimes, Make-A-Wish Foundation, Red Cross, etc. • Business/Community Support-Golf Tournaments, Business Luncheons, Air Shows, etc. • COMMUNITY TICKET OFFICE

# Market Growth Strategy – Reliability & Growth

• CONSISTENT SERVICE IS KEY • Proven Success in Other EAS Markets • Builds Passenger Confidence in Carrier • Dedicated Aircraft for your Airport

– 102% Flight Completion Ratio as Reported by DOT YR 2010

– Spare Aircraft Availability 

### • AIR CHOICE ONE’S REVENUE INCREASED BY OVER 20% YE 2010 VS. 

### 2009

09/13/2011 

### 75

80 85 90 95 100 105

Am. 

### Eagle Gr. Lakes Sea Port Air 

### Choice Completion %



## Airline Airline Completion Ratios

Works Cited: T- 100 Segment Report DOT 2010 Calendar Year

# Market Growth Strategy – Accessibility

• VISIBILITY • Global Distribution Systems

– Apollo, Worldspan, Travelport, 

### Amadeus, etc. • Consumer Sites

– Expedia, Travelocity, Priceline, Orbitz, etc. • Web based booking



### –www.airchoiceone.com • Call Center

– Open 7 Days a Week


### • CONNECTIVITY • United Airlines Agreement • Additional Legacy Agreements Pending

09/13/2011

# Market Growth Strategy – Pricing Air Choice One offers the right price for the right ticket at the right time. We take all things into consideration and enter the market with low fares. We work hard to establish a winning price point through targeted market analysis. We believe consistent pricing builds consumer confidence.

• BUILDING & SUSTAINING RIDERSHIP THROUGH PRICE • Introductory Fares Peak Interest and Drive Passengers to Air Choice One and Your Airport 

### • On -Going Affordable Fares = Full Planes! • Full Planes Establish the Customer Base Needed to Reduce Future Subsidy Requirements 09/13/2011 

## 0 500 1000 1500 2000 2500 3000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec # of Passengers

Month of Service Air Choice One Ridership Growth EAS Markets 2010-2011*



### 2010 

### 2011 *Numbers Reflect O & D

# Marketing Growth Strategy -

New Hub, New Opportunities ST. LOUIS’ COMBO OF LOW FARE CARRIERS AND ENDLESS CONNECTIONS AR E THE

KEY TO 

# SELLING MORE TICKETS!

09/13/2011 *Source : Southwest Airlines Website, September 2011, 14 Day Advance Purchase 

## Sample St. Louis 

## Fares
Destinations (One Way) ACO

Fare Southwest

Fare* Total

Fare LAS : Las Vegas, NV $49 $183 $232 LAX : Los Angeles, CA $49 $141 $190 LGA : New York, NY $49 $134 $183 FLL : Fort Lauderdale, FL $49 $154 $203 DAL: Dallas, TX $49 $88 $137 ORD : Chicago, IL $49 $0 $49 

### • Air Choice One Operates from Gate E33, Terminal 2 • 244 Daily Flights to 60 Domestic & 

### International Markets as of August, 2011. • More than 24,700 Daily Outbound Seats.

# Marketing Growth Strategy -

New Hub, New Opportunities

07/12/2011 

# ST. LOUIS SHUTTLE SERVICE To enhance our hassle-free travel experience Air Choice One provides ramp side transfer service to and from all concourses for connecting flights at Lambert St. Louis International Airport. Ramp side service means Air Choice One 

### passengers remain within the secure area of the airport and are not required to clear TSA a second time.

# Marketing Growth Strategy -

New Hub, New Opportunities NASHVILLE’S COMBO OF LOW FARE CARRIERS AND ENDLESS CONNECTIONS ARE THE

KEY TO 

# SELLING MORE TICKETS!

09/13/2011 

### • Air Choice One will Operate from Gate C13 • 380 Daily Flights to 70 Markets as of June, 2011 

### • Serving More than 10 Million Passengers Per Year *Source : Southwest Airlines Website, September 2011, 14 Day Advance Purchase Destinations (One Way) ACO

Fare Southwest

Fare* Total

Fare LAS : Las Vegas, NV $39 $193 $232 LAX : Los Angeles, CA $39 $157 $196 LGA : New York, NY $39 $99 $138 FLL : Fort Lauderdale, FL $39 $113 $152 DAL: Dallas, TX $39 $128 $167 ORD : Chicago, IL $49 $0 $49 

## Sample Nashville 

## Fares

# Market Growth Strategy -

BONUS Service to Chicago

09/13/2011 

### WE ARE OFFERING TWO HUBS & ADDITIONAL FLIGHTS TO BETTER SERVE THE NEEDS OF THE COMMUNITY We are aware of the advantages additional frequency and hub options offer your passengers . To provide an optimum level of service Air Choice One will also offer nonsubsidized air service to ORD and an additional non-subsidized flight to BNA. Air Choice One will work with the community to determine scheduling needs for these additional flights. We understand the importance of smooth and timely connectivity for local corporate and pleasure travelers. NON-SUBSIDIZED SERVICE TO CHICAGO & NASHVILLE
• Increased Passenger Options Will Grow Ridership • Accommodate Local Corporate & Pleasure Travel Needs • Increase Capacity Through Additional Flight Segments • Dual Hubs Increase Connectivity

# Options Index Owensboro, Kentucky

OPTION 2, 2 YEAR SERVICE – STL SERVICE CESSNA GRAND CARAVAN Owensboro, Kentucky – Lambert St. Louis International Airport Cessna Grand Caravan 21 Round Trips Per Week Subsidized + 10 Round Trips Per Week Non -subsidized

09/13/2011 OPTION 1, 2 YEAR SERVICE – STL SERVICE CESSNA GRAND CARAVAN Owensboro, Kentucky – Lambert St. Louis International Airport Cessna Grand Caravan 18 Round Trips Per Week Subsidized + 10 Round Trips Per Week Non -subsidized

OPTION 4, 2 YEAR SERVICE – STL SERVICE CESSNA GRAND CARAVAN Owensboro, Kentucky – Nashville International Airport Cessna Grand Caravan 21 Round Trips Per Week Subsidized + 10 Round Trips Per Week Non -subsidized OPTION 3, 2 YEAR SERVICE – BNA SERVICE CESSNA GRAND CARAVAN Owensboro, Kentucky – Nashville International Airport Cessna Grand Caravan 18 Round Trips Per Week Subsidized + 10 Round Trips Per Week Non -subsidized

### Owensboro, Kentucky – Cessna Grand Caravan Option 1: 2 Year Service 18 Total Round Trips Per Week – Based on 98% Completion Rate 

## Owensboro, Kentucky – Lambert St. Louis International Airport – Caravan Operation Revenues OWB-STL Revenues $ 369,950.00 Other Revenues 3,699.50 Total Operating Revenues $ 373,649.50 Direct Operating Expenses Flying Operations $ 194,629.68 Fuel and Oil 435,970.48 Maintenance 372,335.04 Aircraft Leases 375,000.00 Total Direct $1,377,935.20 Marketing 50,000.00 Indirect 361,152.98 Total Operating Expenses $1,789,088.18 Operating Loss $1,415,438.68 Profit Element (5% total Oper. Exp.) 89,454.41 Compensation Required $1,504,893.09 Compensation per PAX $199.32 Compensation per Departure $818.05 # Passengers: 7,550 Average Fare: $49.00 Departures: 1,840 Block Hours: 1,692 Revenue Passenger Miles: 1,411,850 Available Seat Miles: 3,087,564

09/13/2011 Representative Schedule Schedule Items Shown in Green = Non -Subsidized Departure Arrival OWB 5:45 AM STL 6:45 AM STL 7:15 AM OWB 8:15 AM OWB 8:30 AM ORD 10:15 AM ORD 11:00 AM OWB 12:45 PM OWB 1:30 PM STL 2:30 PM STL 2:45 PM OWB 3:45 PM OWB 4:00 PM STL 5:00 PM STL 5:15 PM OWB 6:15 PM OWB 6:30 PM STL 7:30 PM STL 8:00 PM OWB 9:00 PM

### Owensboro, Kentucky – Cessna Grand Caravan Option 2: 2 Year Service 21 Total Round Trips Per Week – Based on 98% Completion Rate 

## Owensboro, Kentucky – Lambert St. Louis International Airport – Caravan Operation Revenues OWB-STL Revenues $ 387,688.00 Other Revenues 3,876.88 Total Operating Revenues $ 391,564.88 Direct Operating Expenses Flying Operations $ 205,069.41 Fuel and Oil 501,834.14 Maintenance 376,937.11 Aircraft Leases 325,000.00 Total Direct $1,408,840.66 Marketing 50,000.00 Indirect 418,607.78 Total Operating Expenses $1,877,448.44 Operating Loss $1,485,883.56 Profit Element (5% total Oper. Exp.) 93,872.42 Compensation Required $1,579,755.98 Compensation per PAX $199.67 Compensation per Departure $736.07 # Passengers: 7,912 Average Fare: $49.00 Departures: 2,146 Block Hours: 1,953 Revenue Passenger Miles: 1,479,544 Available Seat Miles: 3,602,159

09/13/2011 Representative Schedule Schedule Items Shown in Green = Non -Subsidized Departure Arrival OWB 5:45 AM STL 6:45 AM STL 7:15 AM OWB 8:15 AM OWB 8:30 AM ORD 10:15 AM ORD 11:00 AM OWB 12:45 PM OWB 1:30 PM STL 2:30 PM STL 2:45 PM OWB 3:45 PM OWB 4:00 PM STL 5:00 PM STL 5:15 PM OWB 6:15 PM OWB 6:30 PM STL 7:30 PM STL 8:00 PM OWB 9:00 PM

### Owensboro, Kentucky – Cessna Grand Caravan Option 3: 2 Year Service 18 Total Round Trips Per Week – Based on 98% Completion Rate 

## Owensboro, Kentucky – Nashville International Airport – Caravan Operation Revenues OWB- BNA Revenues $ 284,700.00 Other Revenues 2,847.00 Total Operating Revenues $ 287,547.00 Direct Operating Expenses Flying Operations $ 225,351.00 Fuel and Oil 344,851.42 Maintenance 283,298.40 Aircraft Leases 375,000.00 Total Direct $1,228,500.82 Marketing 50,000.00 Indirect 353,901.36 Total Operating Expenses $1,632,402.18 Operating Loss $1,344,855.18 Profit Element (5% total Oper. Exp.) 81,620.11 Compensation Required $1,426,475.29 Compensation per PAX $195.41 Compensation per Departure $775.43 # Passengers: 7,300 Average Fare: $39.00 Departures: 1,840 Block Hours: 1,288 Revenue Passenger Miles: 839,500 Available Seat Miles: 1,898,770

09/13/2011 Representative Schedule Schedule Items Shown in Green = Non -Subsidized Departure Arrival OWB 6:00 AM BNA 6:40 AM BNA 7:20 AM OWB 8:00 AM OWB 8:30 AM ORD 10:15 AM ORD 11:00 AM OWB 12:45 PM OWB 1:30 PM BNA 2:10 PM BNA 2:30 PM OWB 3:10 PM OWB 3:30 PM BNA 4:10 PM BNA 4:30 PM OWB 5:10 PM OWB 5:30 PM BNA 6:10 PM BNA 8:00 PM OWB 8:40 PM

### Owensboro, Kentucky – Cessna Grand Caravan Option 4: 2 Year Service 21 Total Round Trips Per Week – Based on 98% Completion Rate 

## Owensboro, Kentucky – Nashville International Airport – Caravan Operation Revenues OWB- BNA Revenues $ 306,150.00 Other Revenues 3,061.50 Total Operating Revenues $ 309,211.50 Direct Operating Expenses Flying Operations $ 225,351.00 Fuel and Oil 396,617.76 Maintenance 329,012.46 Aircraft Leases 375,000.00 Total Direct $1,325,981.22 Marketing 50,000.00 Indirect 410,718.58 Total Operating Expenses $1,786,699.80 Operating Loss $1,477,488.30 Profit Element (5% total Oper. Exp.) 89,334.99 Compensation Required $1,566,823.29 Compensation per PAX $199.60 Compensation per Departure $730.05 # Passengers: 7,850 Average Fare: $39.00 Departures: 2,146 Block Hours: 1,502 Revenue Passenger Miles: 902,750 Available Seat Miles: 2,215,231

09/13/2011 Representative Schedule Schedule Items Shown in Green = Non -Subsidized Departure Arrival OWB 6:00 AM BNA 6:40 AM BNA 7:20 AM OWB 8:00 AM OWB 8:30 AM ORD 10:15 AM ORD 11:00 AM OWB 12:45 PM OWB 1:30 PM BNA 2:10 PM BNA 2:30 PM OWB 3:10 PM OWB 3:30 PM BNA 4:10 PM BNA 4:30 PM OWB 5:10 PM OWB 5:30 PM BNA 6:10 PM BNA 8:00 PM OWB 8:40 PM

# The Best Choice to Succeed

09/13/2011 

### • Proven Enplanement Increase in EAS Markets • Successful Pricing Strategy 

### • Demonstrated Growth in Community Support • Proven Reliability • Outstanding Completion Ratio • Great Hub Connectivity • Successful Marketing and Public Relations Outreach • Raise Awareness About Local Air Service • We Cater to Community and Business Needs 

# We Look Forward to Serving You!