June 7, 2012

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

Kirksville, Missouri

DOCKET DOT-OST-1997-2515

Three daily non-stop flights to/from Lambert - St. Louis International Airport

With --------------------------- codeshare

Hyannis Air Service, Inc., dba Cape Air

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

(508) 862-9719
1

Cape Air is a small but robust commuter airline, 

operating and growing since 1989

 First route was Boston –

Provincetown, begun in October 1989 with 

one aircraft

 67 Cessna 402s in five regions, and two 

ATR-42s in Micronesia

 Operating up to 600 flights daily

 In 2011 flew almost 700,000 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 2011

• Cape Air is consistently profitable

• 2011 revenue approached $100M 

• Cape Air has purchased three more 

Cessnas, which will bring the fleet total to 70

• 40 airports served; 17 in EAS

2

Captain Krista Poppe

Boston based
3

For smaller communities and niche markets, 

Cape Air’s nine-seat planes have proven to be a good fit

 High-frequency, non-stop service

 branded service at St. Louis

 Interline e-ticketing and baggage agreements

 Complete GDS sales channels:

 866-Cape-Air

 In-house Sabre reservations office

 Reliability thanks to spare aircraft availability

 MOCHA HAGoTDI† culture and community 

investment

Cape Air highlights “Key West Express”

† Make Our Customers Happy And Have A Good Time Doing It
4

Over more than 20 years 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
5

Cape Air has been an interline carrier since 1993

enabling connectivity with most major airlines...

• Interline agreements are in place with all US legacy airlines

• Cape Air has completed migration to interline e-ticketing

• Cape Air operates flights in Micronesia as

• Flights in the Caribbean have a code 

• Cape Air is one of the only airlines that can interline with 

• Flights in the Midwest operate with the code of 

Interline highlights
...And interlines with all of the legacy airlines 

plus JetBlue and Frontier

6
7

Participation in the global distribution system gives Cape Air’s 

communities access to the world

Cape Air is sold through:
8

Cape Air’s Telephone Reservations Center

Cape Air has its own internal reservations center

866-CAPE-AIR

Never a booking fee!
Cape Air’s St. Louis service began operations on 

November 8, 2009 

9

Cape Air’s St. Louis region route map

As of November 2009

Cape Air’s first St. Louis arrival taxis in!

November 8, 2009; Sandi Dorrin, STL Asst. Station Manager
Cape Air’s St. Louis operation now includes six EAS cities, 

ten aircraft and up to 60 flights per day

10

Cape Air’s St. Louis route map

As of June 2012
Cape Air cut the ribbon on Kirksville service 

on Sept. 17, 2010

11
Cape Air’s ridership in St. Louis has grown steadily 

to over 75,000 annual passengers, and climbing

12

St. Louis passengers on Cape Air

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

OWB

TBN

IRK

UIN

MWA

CGI
Since Cape Air became Kirksville’s airline 

Kirksville enplanements increased dramatically

13

0

1,000

2,000

3,000

4,000

5,000

6,000

Sep-03

Feb-04

Jul-04

Dec-04

May-05

Oct-05

Mar-06

Aug-06

Jan-07

Jun-07

Nov-07

Apr-08

Sep-08

Feb-09

Jul-09

Dec-09

May-10

Oct-10

Mar-11

Aug-11

Jan-12

Predecessors

Cape Air

Kirksville enplanements

Year-ending

Source: US DOT’s T100
Due to a long history of low ridership in Kirksville

during the last contract cycle in 2010 DOT gave Kirksville 

“one last chance to remain in the program”

In the selection order of Cape Air at Kirksville, DOT admonished:

– “We encourage the community and Cape Air to work together to maximize use of the service 

awarded under this Order to avoid exceeding the $200 per passenger cap, which could result in 

the termination of eligibility for subsidy under the EAS program.”

-Kirksville’s EAS airline selection order 2010

14
Kirksville’s subsidy per passenger is now well below the 

statutory cap of $200 per passenger, and falling

15

$189 

$162 

$178 

$201 $197 

$145 

$162 

$146 

$159 $161 

$140 $133 

$121 $121 

$133 

$160 

$149 

$133 $136 

$-

$50 

$100 

$150 

$200 

$250 

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

Kirksville subsidy per passenger

DOT subsidy cap
DOT has formally declared Kirksville to be

an EAS community “in good standing”

DOT, August 26, 2011:

“We congratulate the community of Kirksville and 

Cape Air in its success in increasing 

passenger traffic since the inauguration of 

service in September 2010. Kirksville is 

currently a community in good standing in the 

EAS program” 

16

DOT awards letters of good standing

August 26, 2011
Cape Air has had fun marketing Kirksville’s air service!

17
Cape Air has invested in a downtown 

City Ticket Office

18
In addition to interline ability with all network carriers at St. 

Louis, Cape Air’s service is codeshared with American Airlines

19

Codeshare partners: American Airlines and Cape Air

Photo source: Jim Schnobrich; Used with permission
Connecting itineraries are sold on AA’s website 

20
Cape Air is co-located with American Airlines in St. Louis’ 

Concourse C

21

Cape Air
St. Louis has 1,678 weekly departures to 61 non-stop 

destinations—including all the major markets

22

Non-stop St. Louis service—June 2012

Source: OAG
Cape Air operates an inter-terminal shuttle at St. Louis

23

No more TSA rescreening to connect between terminals!

Cape Air’s St. Louis inter-terminal shuttle
Kirksville is on United.com, too

24
Cape Air proposes three daily round trips between 

Kirksville and St. Louis at an annual subsidy of $1.6M

for a four-year term

25

Drivers

Economics

Daily RTs 3.0

Annual Sched. Dpts 2,190

Completion Rate 97%

Annual Actual Dpts 2,124

PDEW 14.4

Pax/Dpt 5.0

Load Factor 55%

Annual Passengers 10,515

Avg. Net Fare $45 

Passenger Rev/Dpt $223 

Fuel $594,804 

Maintenance $574,424 

Pilots $140,525 

Ownership $122,645 

Rents $186,776 

Staff $115,274 

Landing Fees $100,055 

Marketing $46,538 

General & Admin./Other $135,274 

Operating expense $2,016,314 

Return of 5% $106,122 

Economic Expense $2,122,436 

Passenger Revenue $473,188 

Profit ($1,649,248)

Annual Operating Subsidy Required $1,649,248 

Subsidy Per Departure $776 

Per Passenger $157 
26

Cape Air would be honored to continue serving Kirksville!

 Three daily flights to St. Louis at a fare of only $49 each way

 Spare aircraft in the region helps ensure a reliable operation

 ----------------------------- codeshare, plus interline connections, ticketing and bag transfer with most 

major airlines; global distribution

 A healthy, strong, independent airline that cares passionately about serving communities

Proposal highlights

Cape Air is a great choice for 

Kirksville

Hyannis Air Service, Inc., dba Cape Air

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

(508) 862-9719
27

Thank you!
Appendix

Interline Examples on Online Travel Agencies
29

Cape Air is on Expedia.com

Screenshot from Expedia.com showing Cape Air 

LNS-PHX search for travel 22SEP09
30

Cape Air is on Travelocity.com

Screenshot from Travelocity.com showing Cape Air 

ATL-MAZ search for travel 22SEP09
31

Cape Air is on Orbitz.com

Screenshot from Orbitz.com showing Cape Air 

ART-DCA search for travel 22SEP09