# February 23 rd 

# , 2011 Essential Air Service at

Victoria, Texas Docket OST 2005 20454

under 49 U.S.C. 41731 et seq

.



# SEAPORT AIRLINES

PROPOSAL TO PROVIDE ESSENTIAL AIR SERVICE AT

Victoria, Texas

Docket OST 2005 20454



## SeaPort Airlines, Inc. 7505 NE Airport Way, Portland, OR 97218

# Company Overview

SeaPort Airlines is a FAA certified scheduled air service provider with 27 years experience in commercial aviation. Our company’s foundation is built on efficient and reliable service to rural communities. Both SeaPort Airlines and our sister company Wings of Alaska currently operate routes under the Essential Air Service program, as well as un

- subsidized operations on established competitive routes

. Wings of Alaska is the premier airline serving Southeast Alaska. Providing scheduled passenger service, fast freight and charter service between Juneau and Skagway, Haines, Hoonah, Gustavus , and weekly flights to Excursion Inlet. Wings of Alaska grew in reputation and size, becoming one of the most successful regional air carriers in Alaska, now comprised of a fleet of seven planes from Cessna 207’s to Cessna Grand Caravans.

# IT’S ABOUT TIME : SeaPort Airlines currently operates 30 daily scheduled flights in five Northwest cities and 32 daily scheduled flights in five Mid

- South cities. Effective April 19 th 

# , 2010 SeaPort Airlines began operating 8 daily flights in the Midwest.

EAS 6 Routes Speculative 1 Route State Contractual 2 Routes 

# SeaPort Airlines

# Bringing Southeast Alaska Closer Together: Wings of Alaska currently operates 38 daily scheduled flights to six Southeast Alaska cities.

Wings of Alaska

EAS 1 Route Speculative 5 Routes

# SeaPort Airlines operates 7 Pilatus PC

- 12 aircraft. The PC

- 12 is a Swiss

- built pressurized turboprop aircraft typically found in corporate aviation, but utilized by SeaPort Airlines in a nine seat commuter configuration. The world's best

- selling turbine business aircraft, still in production today, the PC

- 12 can shuttle you with comfort and speed with each seat both a window and aisle.

Pilatus, the world market leader in the manufacture of turboprop aircraft and the only Swiss company to develop, produce and sell aircraft and training systems all over the world. http://www.pilatus

- aircraft.com 

# Our Aircraft

# Whereas many communities have been promised service that has never transpired, SeaPort delivers Essential Air Service to seven communities: Excursion Inlet, Alaska, Pendleton, Oregon, Jonesboro, Arkansas, El Dorado, Arkansas, Hot Springs, Arkansas, Harrison, Arkansas, and Salina, Kansas. Additionally, SeaPort serves Newport, OR and Astoria, OR under a combined state and federal grant program.

In every case, after award, we have started on time, on budget, and with fares either at or below that which we outlined in our bid, as compared to so many other airlines who place bids with unreasonable fares that are never realized by the traveling public. 

# EAS History

# SeaPort proposes for Victoria, three direct round trips per day between Victoria and Dallas (Love), seven days a week. This service level will offer more than enough inventory to provide for the historical traffic of the last several years. This allows us to keep the schedule flexible to be responsive to requests for schedule or destination changes in the future.

SeaPort has constructed the schedule to maximize traffic flow with flights morning, midday and evening. SeaPort believes that traffic will increase in year two as the speed and convenience of our service become more familiar to the residents of these communities.

In addition, a daily plane overnight in Victoria, Texas adds reliability to the above schedule recommendation similar to the overnight success SeaPort experiences in our other EAS cities.
Lastly, the $99 fare in our proposal is an average fare. Travel will be as low as $49 one way. This fare is far less than the current operator.

We are therefore able to offer these communities the best possible fit with:

• Comfortable and fast pressurized Pilatus PC

- 12 aircraft

• Convenient schedules

• Affordable fares

• A reasonable and sustainable subsidy amount 

# Right

**- Sized**  **for Victoria, Texas**

# • Full GDS visibility ( Sabre , Amadeus, Apollo, Galileo, Worldspan ) for any travel agent

• Visibility on Expedia.com and Travelocity.com

. Orbitz.com March 2011.

• Interline ticketing agreement with US Airways

• Reservations available online at SeaPortAirlines.com, toll

- free at 888.573.2767,

• Low Fares thanks to low operating costs and efficient aircraft equipment

• High

- frequency , non

- stop daily service

• Customer focused bringing the convenience of a private plane to the average traveler for the same cost as commercial airlines. 

# Efficiency & Reach

## February 21, 2011 

# Current **Service for Victoria, Texas**

Continental Connection ( Colgan ) is the current air service provider with flights from Victoria, Texas to Houston, Texas. Non

- refundable fares, depending on time of day, are $214.00 per segment based on availability and time of booking.

What can Victoria, Texas and Dallas, Texas airports expect from SeaPort Airlines:

• Notification of any fare/schedule changes

• Community involvement through advertising/marketing

• A cohesive partnership focused on economic development and increased load factors

• Affordable fares

• A hassle

- free travel experience for your community

# EAS Testimonial

Larry Dalrymple

– Airport Manager : “Eastern Oregon Regional Airport at Pendleton had been struggling since schedule changes following 9/11 served by a carrier flying 37 seat aircraft. Low passenger count attributed to poor schedule, which then contributed to poorer passenger count. The carrier's solution was to bring in larger aircraft and fly to a different hub. The Airport and community balked at this suggestion and went in search of alternatives. The solution found through the EAS process was SeaPort Air flying a 9 passenger Pilatus, that would eliminate the need for TSA security as well as mandatory ARFF standby, saving the Airport personnel costs in an already short budget. The passengers have welcomed the new service, much better schedule, and are elated with "no security check" and stand by time. Passengers today will say, "I love the service", "great customer service", and "I'm sure glad I finally tried it, cause I'll be back".

In our particular market, the 9 passenger aircraft is perfect, and SeaPort Air provides the schedule, the professionalism, and customer service we need and desire.” 

# Pendleton Regional Airport

## February 21, 2011 Alasks Juneau Aeronautics, Inc. dba SeaPort Airlines 

# Luci Larson

– Former Mayor of the city of Salina Kansas & owner of Action Travel: The Department of Transportation (DOT) announced on the selection of SeaPort Airlines as Salina’s new essential air service provider. Service to Salina from Kansas City will start as early as April 19 th 

## with three daily roundtrip flights Sunday through Friday.

“I understand the importance of having dependable, reliable air service with an affordable cost. Not only will SeaPort Airlines meet these needs, but excel by providing great customer service, a high level of community involvement and an eagerness to become a Salina partner.” Says Luci Larson

- former Mayor of the city of Salina and owner of Action Travel. The letter supports a few key deliverables that only SeaPort Airlines can support, such as: greater frequency, a 9

- seat “right sized” aircraft, affordable fares, military/government fares, and an active community marketing plan. “I applaud their entrepreneurship and look forward to our working relationship. Their presence here in the Midwest is a win

- win situation for all of us. The "door

- to

- door" service they will provide will be truly appreciated by all passengers. Want to travel like rock star? Fly SeaPort Airlines!” Says former Mayor Larson. 

# EAS Testimonial
**Salina Municipal Airport**

# Customer Feedback

Ruth Ann Smith

– Hot Springs to Memphis: “Two hours before the flight I booked my ticket to Memphis from Hot Springs. Wow! What a surprise; it was simple, convenient, great price, and impeccable service. It far exceeded my expectations and I will be flying to Memphis on SeaPort Airlines instead of driving from now on. The customer service was fabulous!”

Barbara Covell

– Portland to Newport: “This is a class operation, very professional and the staff provide the kind of customer service that most people can only dream about. I have flown several times in order to avoid the LONG car trip from the Oregon central coast to Portland airport. Today my husband had to get to the emergency room at Portland VA Medical Center. The staff and crew actually held the flight in Newport while we made haste to get there. If that wasn't enough, they had a taxi waiting when he arrived at Portland airport. Many, many thanks!”

## February 21, 2011 Alasks Juneau Aeronautics, Inc. dba SeaPort Airlines 

# Community Involvement

# Recent News

SeaPort Airlines drives to aid stranded passengers (click here) 

# The East Oregonian: 12/29/2010 “They didn’t want their passengers to miss Christmas,” said Larry Dalrymple, Pendleton airport manager. “What other airline would do that?”
SeaPort business continues to climb higher (click here) 

# East Oregonian:11/ 07/2010 The number of passengers flying SeaPort Airlines from Pendleton continues its gentle climb.

Seaport Airlines puts passenger first (click here) 

# The Salina Journal: 05/25/2010 “Now that is great customer service," Melissa McCoy, Salina Airport Authority spokeswoman, wrote in an e

- mail to the Journal. 

# For a list of SeaPort news articles visit http://www.SeaPortAir.com/press

Trip with SeaPort a pleasant experience (click here) 

# The El Dorado News

- Times: 03/10/2010
Hit the Sky Running: Interview with SeaPort Airlines (click here) 

# Aviation Buzz: 02/24/2010 Whether you fly SeaPort in the Northwest of the Mid

- South, the brand is consistent.

# Other **News**

‘This is a great day for El Dorado’ SeaPort Airlines welcomed as new air service provider By: John Worthen Published: 10/28/2009

Approximately 50 people gathered Tuesday morning at the South Arkansas Regional Airport terminal to celebrate the return of a ir service to El Dorado.

Representatives from SeaPort Airlines, who arrived on a flight from Memphis International Airport to commemorate the occasion , w ere greeted with cheers and smiles by community members and local officials.

The Portland, Ore.

- based company will offer round

- trip flights between El Dorado and Memphis on the Swiss

- built Pilatus PC

- 12, a pressurized turbo

- prop airplane. Departure times from the SARA are 4:10 a.m., 11:20 a.m., and 8:20 p.m., according to SeaPort’s website.

SeaPort will also operate round

- trip flights to Memphis from Harrison, Hot Springs and Jonesboro.

These communities, along with El Dorado, have been without regular service since 2008, when Air Midwest, a subsidiary of Mesa Ai rlines, pulled out of the markets. SeaPort beat out several companies that submitted proposals to the Department of Transportation and signed a two

- year contract to provid e the service for a $6,047,789 federal subsidy. The Essential Air Services program subsidizes airlines to provide service that wouldn’t be profitable on the open ma rke t.

SeaPort officially opened Monday in El Dorado with a 4:30 a.m. flight from SARA to Memphis International. At the ceremony Tue sda y, local officials touted SeaPort as a quality airline that will help El Dorado’s economic engine hum.

Jeff Teague, chairman of the El Dorado Airport Commission, called the day a “bright one,” despite cloudy, mist

- filled skies that had the SARA socked in.

Getting this airline “has been an arduous task, but we got the best service we could have,” Teague said. “Transportation is t he key issue in economic development, and not having air service in El Dorado for the past year or so has really not been a good thing. And now, with all that’s going on i n E l Dorado, with the conference center and the new high school, (Sea

- Port’s arrival) is just the icing on the cake.”

Kent Craford , chief executive officer of SeaPort, called Tuesday “an exciting day for us at SeaPort. We feel that our small nine

- passenger a irplane is a perfect fit for El Dorado’s air service needs. And the fact that we will be offering three trips a day allows for better connection service and same day tra vel opportunities to Memphis and beyond. We are your hometown airline.”

El Dorado Mayor Mike Dumas spoke highly of SeaPort officials and said he looks forward to working with them throughout their ten ure here.

“This is a great day for El Dorado,” Dumas said. “We have been working on this for more than a year, and it’s great to finall y h ave air service back in El Dorado. We welcome you, SeaPort, and we thank you for your service.”

More information and reservation information is available by logging on to the SeaPort Web site at www.seaportair.com.

# Rob McKinney President SeaPort Airlines 7505 NE Airport Way Portland, OR 97218 (971) 340

- 1711



# www.SeaPortAirlines.com SeaPort welcomes this opportunity to be chosen to provide essential air service at Victoria, Texas for the next two year period. We bring a fresh approach, and believe we have presented a proposal that will meet the EAS needs of the communities at reasonable subsidy levels. Thank you for your consideration.

Respectfully submitted,

### SeaPort Airlines Essential Air Service Proposal Docket OST-2005-20454 Annual Subsidy Requirement July 2011 - June 2012 Exhibit 1A

Victoria
Factor VCT-DAL
Revenue: Passenger: Forecasted Passengers 10,100 Average Revenue / Pax:
Year 1 99.00 $ Revenue / Pax Change 0.00% Average Revenue / Pax 99.00 $ Passenger Revenue 999,900 $
Other Revenue: Ratio to Passenger Revenue 1.00%
Other Revenue 9,999 $
Total Revenue 1,009,899 $
Operating Expenses Completed Block Hours 2,612.52
Direct Flight Crews 72.00 $ 188,101
Fuel Gallons / Block Hour 74 Into Plane Cost / Gallon 5.00 $
Fuel Cost / Block Hour 370.00 $ 966,632
Insurance 50.17 $ 131,070
Maintenance 211.20 $ 551,764
Aircraft Lease 200.00 $ 522,504
Total Direct 2,360,071 $ Indirect Expense 22.00% 519,216 Total Operating Exp 2,879,287 $

Return 5.00% 143,964 Total Economic Cost 3,023,251 $
Surplus / (Deficit) (2,013,352) $
Annual Subsidy 2,013,352 $ Completed Departures 2,124

### SeaPort Airlines Essential Air Service Proposal Docket OST-2005-20454 Annual Subsidy Requirement July 2012 - June 2013 Exhibit 1B

Victoria
Factor VCT-DAL
Revenue: Passenger Forecasted Passengers 10,100 Average Revenue / Pax
Year 2 99.00 $ Revenue / Pax Change 0.00% Average Revenue / Pax 99.00 $ Passenger Revenue 999,900 $
Other Revenue: Ratio to Passenger Revenue 1.00%
Other Revenue 9,999 $
Total Revenue 1,009,899 $
Operating Expenses Completed Block Hours 2,612.52
Direct Flight Crews 75.60 $ 197,507
Fuel Gallons / Block Hour 74 Into Plane Cost / Gallon 5.25 $
Fuel Cost / Block Hour 388.50 $ 1,014,964
Insurance 50.17 $ 131,070
Maintenance 211.20 $ 551,764
Aircraft Lease 200.00 $ 522,504
Total Direct 2,417,809 $ Indirect Expense 22.00% 531,918 Total Operating Exp 2,949,727 $

Return 5.00% 147,486 Total Economic Cost 3,097,213 $
Surplus / (Deficit) (2,087,314) $
Annual Subsidy 2,087,314 $ Completed Departures 2,124

### SeaPort Airlines Essential Air Service Proposal Docket OST-2005-20454 Proposed Departure Schedules July 2011 - June 2013 Exhibit 2

Sched Sched Sched Comp Sched Block Sched Block Block Sched Comp Block City Block Sched Hours / Freq / Hours / Hours / Seg / Comp Seg / Hours / Community Pair Time Seg Seg Week Week Year Year Factor Year Year VCT VCT 0545 DAL 0700 1 1.23 7 8.61 447.72 364 97.50% 354 435.42
DAL 0925 VCT 1040 1 1.23 7 8.61 447.72 364 97.50% 354 435.42 VCT 1055 DAL 1210 1 1.23 7 8.61 447.72 364 97.50% 354 435.42
DAL 1520 VCT 1635 1 1.23 7 8.61 447.72 364 97.50% 354 435.42 VCT 1650 DAL 1805 1 1.23 7 8.61 447.72 364 97.50% 354 435.42
DAL 1820 VCT 1935 1 1.23 7 8.61 447.72 364 97.50% 354 435.42
6 7.38 7 51.66 2,686.32 2,184 97.50% 2,124 2,612.52

### SeaPort Airlines Essential Air Service Proposal Docket OST-2005-20454 Performance Summary July 2011 - June 2012 Exhibit 3A

Victoria VCT-DAL
Performance:
Rev Block Hours Scheduled 2,686.32 Completion % 97.30% Completed Block Hours 2,612.52 Rev Departures Scheduled 2,184 Completion % 97.30% Completed Departures 2,124 Rev Passengers
Year 1 10,100 Forecasted Growth Rate 0.00% Total Passengers Average Segment Share 100.00% Segment Passengers 10,100 Available Seats 19,116 Average Load Factor 52.84% Average Pax / Flight 4.8

### SeaPort Airlines Essential Air Service Proposal Docket OST-2005-20454 Performance Summary July 2012 - June 2013 Exhibit 3B

Victoria VCT-DAL
Performance:
Rev Block Hours Scheduled 2,686.32 Completion % 97.30% Completed Block Hours 2,612.52 Rev Departures Scheduled 2,184 Completion % 97.30% Completed Departures 2,124 Rev Passengers
Year 2 10,100 Forecasted Growth Rate 5.00% Total Passengers Average Segment Share 100.00% Segment Passengers 10,605 Available Seats 19,116 Average Load Factor 55.48% Average Pax / Flight 5.0