November 12, 2014 Proposal of Hyannis Air Service, Inc. dba Cape Air to provide subsidized Essential Air Service for: 

# Ogdensburg, NY

To/From 

# Boston via Albany 3x Daily

Docket DOT

- OST

- 1997

- 2842

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 Ogdensburg

for more than six years. Thanks for the great relationship!

• Cape Air started serving Ogdensburg on
September 16, 2008

• Since then we have flown more than
43,000 passengers to or from Ogdensburg

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

• Fares are low, in 2014 averaging just $49

net

• Serving Massena, Ogdensburg and

Saranac Lake provides scaling to recover from irregular operations

1 Overview Cape Air’s Ogdensburg ticket counterRecord
ridership! 

# Cape Air’s service at Ogdensburg has lifted the airport’s
ridership to a modern high: over 10,000!

2 Source: US DOT T100 and Cape Air Ogdensburg ridership

Sum of both directions

2,635

1,033 1,168 1,926 1,600 1,308 4,464 4,328 3,779 3,312 4,784

1,166 3,899 4,429 6,675 9,612 10,077

0 2,000 4,000 6,000 8,000 10,000 12,0001995199619971998199920002001200220032004200520062007200820092010201120122013 DOT data

unavailable Predecessors with larger aircraft

# Cape Air’s high

- frequency commuter service is the ideal
complement to prospective Allegiant service; we would be delighted to help Allegiant service work at OGS

3 Allegiant A320

- family leisure service High

- frequency, connective commuter service

• Rocket to >10,000 enplanements

• Low fares

• Helps Ogdensburg Airport grow and thrive

• Strong prospects for sustained success • Convenience and connectivity

• 3 daily flights to two hubs

• Low fares

• Interline ability with all network airlines

• Mature airline with a proven track record



### These are symbiotic service models for Ogdensburg.
Let’s work together to make this dream a reality!

# In every case in which Cape Air’s 9

- seat aircraft took over

year

- round EAS service at a community in the Continental US
ridership increased; 11 cases succeeding larger aircraft

Cape Air EAS Passengers vs. Previous Carrier

Continental US; At least one year of Cape Air subsidized EAS service

Previous

City Aircraft Type Annual Passengers 2013 Cape Air Passengers Change Percentage

Quincy, IL Beech 1900 3,628 19,905 16,277 449%

Marion, IL Beech 1900 4,374 20,339 15,965 365%

Cape Girardeau, MO Beech 1900 830 12,196 11,366 1369%

Kirksville, MO Piper Navajo 1,877 11,338 9,461 504%

Ft. Leonard Wood, MO Beech 1900 10,107 16,376 6,269 62%

Rutland, VT Beech 1900 4,312 10,561 6,249 145%

Owensboro, KY Cessna Caravan 1,284 7,523 6,239 486%

Ogdensburg, NY Beech 1900 4,947 10,077 5,130 104%

Saranac Lake, NY Beech 1900 5,519 10,449 4,930 89%

Massena, NY Beech 1900 6,309 9,256 2,947 47%

Augusta, ME Saab 340 8,177 11,000 2,823 35%

Rockland, ME Saab 340 12,316 14,393 2,077 17%

Lebanon, NH Saab 340 19,229 19,909 680 4%

Total 82,909 173,322 90,413 109%

4 

## Within the rules of the EAS program
Cape Air is a proven success

# OVERVIEW Cape Air

56 

# 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

 Primarily a non

- EAS airline, imposing

free

- market maturity and discipline 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

• A thriving partner in community air service!

# Cape Air has grown steadily for ten years; Thanks for being part of our success!

8 $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 2014Millions Revenue

ProjectedSan 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 Ogdensburg access to the world

10 

## We connect with all, while being beholden to none!

Cape Air is agnostic regarding with which airline our customers connect, providing Ogdensburg maximum options and vigorous fare competition, which

drives down fares

# Itineraries connecting between Cape Air and United are

available on united.com; Ogdensburg is on united.com

11

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

12 Ogdensburg on
jetblue.com!

# Through Expedia and other OTAs, Cape Air connects EAS

communities with most network airlines

1314 

# 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

# Cape Air proposes continued service

with our fleet of 76 Cessna 402s

15

# Cape Air takes environmental sustainability seriously by
investing in fuel

- saving aircraft technologies and powering its offices with solar panels

1617 Cape Air’s Reservations Call Center



# Cape Air has its own internal reservations center...

800

- CAPE

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

# ...And a ticket office in downtown Ogdensburg. Local
investment is Cape Air’s forte

18

# Cape Air is your local airline

• Responsive to the Ogdensburg community

• Highly accessible

– Top executives (decision makers) always available to Ogdensburg

– Only 1 1⁄2 hours away by plane

• Strong relationship built

— and trust earned

— over six years of working together

– Together we have taken the airport from zero air service in summer of 2008 to record ridership

in 2013 . What a turn

- around!

• Independent ! We control all infrastructure systems, so we don’t need “higher headquarters” permission to change fares, schedule, marketing, branding or anything else. We have the autonomy to be Ogdensburg’s local airline.

19 

# Cape Air = no surprises20 

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

Daffodil “Daffy” Day at Cape Air Reservations21 

# ...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

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

Cape Air employs a full

- time regional
marketing manager to oversee the $65,000
marketing budget for Ogdensburg

# Cape Air is pleased to propose continued service at Ogdensburg

23 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 5.0

Load Factor 56%
Fare (net) $48.58

Pax Rev/Dpt $244.80 Fuel $886,010

Maintenance $1,058,964

Pilots $255,058

Ownership $362,882

Stations $366,825

Operating Fees $54,017

Marketing $65,153

General & Admin./Other $280,657

Operating Expense $3,402,773

Return of 5% $179,093

Economic Expense $3,581,866

Passenger Revenue $1,105,588

Profit ($2,476,279)

Conforming 2

- Year

Subsidy Required $2,476,279

Per Departure $1,166

Per Passenger $231

4

- Year Contract Discount $2,419,820

Per Departure $1,139

Per Passenger $226

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

24 Annual subsidy including escalation

Two

- year reselection OGS

Year 1 $2,476,279

Year 2 $2,575,330

Four

- year reselection

Year 1 $2,419,820

Year 2 $2,516,612

Year 3 $2,617,277

Year 4 $2,721,96825 

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

 Proven service that yields record enplanements at Ogdensburg

 High

- frequency non

- stop service to/from Boston Logan, via Albany

 Offering the maximum frequency allowed by DOT

 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 Ogdensburg needs:



## Cape Air: Ogdensburg’s Community Airline!

# Thank You!

26

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

- 9719