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Before the United States Department of Transportation December 9, 2013
Proposal to Provide Essential Air Service at 

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DODGE CITY, KANSAS GREAT BEND, KANSAS LIBERAL, KANSAS Under 49 U.S.C. 41731 et seq. Docket OST-1998-3502 Docket OST-1998-3496 Docket OST-1998-3498



### Proposal of SeaPort Airlines, Inc. to Provide Essential Air Service at Dodge City, Great Bend, and Liberal, Kansas By Order 2013-11-2, the U.S. Department ofTransportation ("the Department") requested proposals for Essential Air Service (EAS) at Dodge City, Garden City, Great Bend, Hays, and Liberal, Kansas no later than December 2, 2013. The due date for proposals was subsequently extended until December 9,2013. In response, SeaPort Airlines, Inc. respectfully submits the following proposals to provide subsidized essential airservice:

• Dodge City: 24weekly roundtrips toWichita with an annual subsidy requirement of $2,008,596

• Great Bend: 18weekly roundtrips toWichita with an annual subsidy requirement of $1,434,472

• Liberal: 24weekly roundtrips toWichita with an annual subsidy requirement of $2,790,489 Each proposal isfor atwo-year period and submitted on astand-alone basis. After this proposal isdocketed, SeaPort Airlines will schedule a meeting with the community, explain our proposal in detail, and answer any questions. In the interim and throughout the carrier selection process, questions regarding this proposal should bedirected to: Timothy Sieber Executive Vice President SeaPort Airlines, Inc. 7505 NEAirport Way Portland, OR 97218 (971) 340-1716 tsieber@seaportair.com

# SEA.tPORT

C==========AIRLINES 

# Discussion ofProposal Company Introduction SeaPort Airlines, Inc. isa FAA certified scheduled airline based in Portland, Oregon with 30years of experience in commercial aviation. In addition to Portland, the company has operational bases at Memphis, Tennessee (MEM); San Diego, Califomia (SAN); and Juneau, Alaska (JNU). Our 221 professionals provide service to 21 cities across nine states with afleet of 15aircraft. The company's route map as ofthe date ofthis proposal is provided below:



# SEAf'PORT

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===,AIRLINES ._ •••• OOM._ ••••.••••• ,••t The primaryfocus ofSeaPort Airlines isto provide affordable and reliable airserviceto small and rural communities across America. Service toeight ofthe communities onour route map isprovided under the EAS program: Athens, Georgia; Pendleton, Oregon; EI Dorado, Hot Springs, and Harrison, Arkansas; Salina, Kansas; Jackson, Tennessee; and Imperial/EI Centro, California. Once SeaPort Airlines isawarded an EAS contract and service islaunched, we develop apartnership with each community byparticipating in local events, donation oftickets, on-going dialogue with airport management and community leaders, and presentations tocivicclubs and othersimilar organizations. We also have a reputation of being responsive to community needs, affording them the opportunity to comment on schedule andfare changes before they become effective. OST-1998-3496, OST-1998-3498, OST-1998-3502 December 9, 2013 Pagel2

# SEA.tPORT

====A1RlINES

Ourcommitment to EAS communities isdemonstrated bythefact that inevery "Lower 48" community that SeaPort serves inthe EAS program, we have been re-selected for subsequent terms atthe end ofourfirst contract period. This includes reselection during 2012tofour-year contract renewals (rather than the standard two-years) at both Salina, Kansas and Pendleton, Oregon, after both communities voiced their overwhelming support for SeaPort Airlines. Similarly, we were selected for afour-year renewal attheArkansas communities of EI Dorado, Harrison, and HotSprings, effective November 1, 2013. Aircraft SeaPort Airlines' proposal at Dodge City, Liberal and Great Bend contemplates operations with Cessna Caravans which will allow us to offer safe, comfortable, and affordable air transportation in a modern and economical aircraft.

Manufactured in Kansas, the "Caravan" was originally designed inthe 1980's to replace an aging fleet of piston-powered aircraft, such as the De Havilland Otter and Piper Chieftain. Over 2,000 Caravans have been built logging atotal of almost 15 million flight hours. The Caravan iscertified for single-pilot operation, however SeaPort operates with both a Captain and First Officer. The large cargo pod on the Caravan allows for more baggage than can be accommodated on older piston twins (I.e., Piper Chieftain and Cessna 402) and allows us to segregate passenger baggage for security purposes. 1 Proposed Service Pattern SeaPort Airlines proposes to provide 24weekly roundtrips between Wichita and both Dodge Cityand Liberal. We propose 18weekly roundtrips between Great Bend and Wichita. An Illustrative schedule pattern foreach community ison the next page.

1The cargo pod on the Cessna Caravan has a maximum capacity of 111 cubic feet and 1,090 pounds. In comparison, the Piper Chieftain has a maximum capacity of 65 cubic feet and 700 pounds in its nose compartment and two wing lockers.
08T-1998-3496, 08T-1998-3498, 08T-1998-3502 December 9, 2013 Page 13

# SEAtPORT
====,A1RlINES

_~ [)odgeCityto~Wichita

. 5:45am 6:50am ExSun 0 11:15am 12:10pm ExSun 0 1:15pm 2:10pm ExSat 0 4:30 m 5:25 m ExSat 0

____ ~~atBend_toWichita ~

_ 6:15am 7:00am ExSat 0 10:30am 11:15am ExSun 0 4:00 m 4:45 m ExSun 0

_____ ~ _biberal1o~lfIIichita

. 5:30am 6:55am ExSun 0 11:00am 12:25pm ExSun 0 2:45pm 4:10pm ExSat 0 6:30 m 7:55 m ExSat 0 8:55am 1:00pm 4:45pm 7:00 m ExSun

ExSun ExSat ExSat 

# o o o o Ifselected to provide EAS, SeaPort Airlines will solicit comments from each community on proposed flight schedules prior to making them available for sale to the public. As much as practical, these comments will be incorporated intothefinal schedule and factoring any impact on flight schedules, At Wichita, customers will be afforded connections to the route systems of the three large legacy carriers (American, Delta, and United), aswell as low-fare service provided bySouthwest Airlines and Allegiant Air.



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Additionally, SeaPort intends togrow its presence atWichita through the addition ofshort-haul service that would provide customers with access to other Mid-Western communities such as Kansas City, Tulsa, and Oklahoma City.

OST-1998-3496,

OST-1998-349B,

OST-199B-3502 December

9,2013 Page 

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# SEA.tPORT

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Fares & Pricing All of SeaPort's fares are priced on a one-way basis, including all taxes and fees, and structured as follows: 

## + The highest price point (branded as "FULL Flex") provides our customers with total flexibility to change their travel plans or, ifthey choose, obtain afull refund without incurring a service charge. 

## + The lowest price point (branded as "NO Flex") targets customers who are certain about their travel plans. This fare requires an advance purchase of 14-days, is non-refundable, and does not permit any changes from the original booked itinerary. 

## + In between, SeaPort offers arange offares ("FREE 2 Flex" and "Flex4 FEE") with price points based on how much flexibility acustomer has in theirtravel plans. Except for the two highest price points, fares are also subject to capacity controls meaning that the farther in advance a reservation is made, the more likely acustomer istoget a lowerfare. The table below summarizes the range ofproposed ticket prices ineach ofthe Kansas markets along with the rules and restrictions applicable to each price point. Fare Category 

## + FULL Flex FREE2 Flex Flex4FEE NO Flex 

# ••• Summaryof Fare Rules AdvancePurchase(dayspriortodeparture) 3 7-to-14 14-to-21 ChangeFee $0 $50 Notpermitted Refundable No No No FreeCheckedSa s 1 1 1 $99 $69 $49 $39 $79 $59 $49 $39 $99 $79 $59 $49 During the first 30 days ofservice, SeaPort Airlines would offer an introductory fare including alltaxes and fees) to/from Great Bend of $39 and tolfrom Liberal and Dodge City of $49. This fare will be available on every seat and everyflight during the period. Interline Connectivity & GDS Display SeaPort Airlines tickets may be purchased by calling our toll-free reservation number, online at www.SeaPortAirlines.com. at any travel agent connected to the major global distribution systems (GDS), or all of the major online travel agencies and meta-searchers such as Orbitz, Travelocity, Expedia, Kayak, Hipmunk, and CheapoAir. The company recently announced that it will migrate to the Amadeus Altea reservation platform on March 22, 2014. With this new system, SeaPort will have unsurpassed capability compared to other regional airlines with regard to interline ticketing, through baggage check-in, e-commerce, and InterAirline Thru Check-In (IATCI). Most importantly, with the newsystem the company will launch itsfirst full interline agreement on March 22, 2014with a major airline tofollowed byasecond carrier on May 1, 2014. The company is in discussions with two other major carriers regarding agreements for implementation later in2014.
OST-1998-3496,

OST-1998-3498,

OST-1998-3502 December

9,2013 Page15

# SEA.;PORT ===~'A I RLl N ES 

# Subsidy Request Calculations The following pages contain the calculations that support SeaPort Airlines' request for subsidy to provide EAS at Dodge City, Great Bend. and Liberal beginning May 1,2014. Respectfully submitted, Timothy Sieber Vice President
- Commercial SeaPort Airlines, Inc. December 9,2013

OST-199B-3496, OST-199B-349B, OST-199B-3502 December9, 2013 Pagel6

# SEAtPDRT

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### OST-1998-3502 Cessna Caravan, Two-Pilots 24 Weekly RTs: Dodge City
-Wichita Proforma Data Operating Projections A\erage Sector Length (sm) Scheduled Departures Scheduled Block Hours Projected Completion Factor Projected Completed Departures Projected Completed Block Hours Passenger Projections Projecled Passengers Passengers per Departure Projecled A\erage Fare Re\enue Passenger Miles (RPMs) Available Seal Miles (ASMs) Projecled Load Factor Financial Projections Re\enues Passenger Ticket Re\enues Ancillary Re\enues Total Expenses Flight Operations Aircraft Ownership/Lease Fuel & Oil Sales & Marketing Traffic Servicing Insurance Mainlenance Sub-Tolal
- Direcl Indirect Tolal Expenses Projecled Operating ProfiU(Loss) Subsidy Calculations Operating Loss Economic Relurn @ 5% 

### 1Required Subsidy Subsidy per Departure Subsidy per Passenger

OST-1998-3496, OST-1998-3498, OST-1998-3502 December9,2013 139 2,496 2,288.0 98.5% 2,459 2,253.7 11,500 4.7 $54.30 1,598,500 3,075,659 52.0%
$624,450 $15,611 $640,061 $214,100 $385,000 $547,644 $25,000 $515,700 $36,059 $470,003 $2,193,505 $329,026 $2,522,531 ($1,882,470) $1,882,470 $126,127 $2,008,5961 $816.98 $174.66

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# SEA.tPORT -==-==-====ArRlINES
OST-1998-3496 Cessna Caravan, Two-Pilots 18Weekly RTs: Great Bend
-Wichita Proforma Data Operating Projections Average Sector Length (sm) Scheduled Departures Scheduled Block Hours Projected Completion Factor Projected Completed Departures Projected Completed Block Hours Passenger Projections Projected Passengers Passengers per Departure Projected Average Fare Revenue Passenger Miles (RPMs) Available Seat Miles (ASMs) Projected Load Factor Financial Projections Revenues Passenger Ticket Revenues Anciilary Revenues Total Expenses Flight Operations Aircraft Ownership/Lease Fuel & Oil Sales & Marketing Traffic Senicing Insurance Maintenance Sub-Total
- Direct Indirect Total Expenses Projected Operating Profit/(Loss) Subsidy Calculations Operating Loss Economic Retum @ 5% 

# IRequired Subsidy Subsidy per Departure Subsidy per Passenger

OST-1998-3496, OST-1998-3498, OST-1998-3502 December9, 2013 

### 55 3,120 1,248.0 98.5% 3,073 1,229.3 3,100 1.0 $51.30 169,260 1,510,170 11.2%
$159,030 $3,976 $163,006 $116,782 $300,000 $298,715 $25,000 $353,820 $19,668 $208,978 $1,322,963 $198,444 $1,521,407 ($1,358,401) $1,358,401 $76,070 $1,434,4721 $466.77 $462.73

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# SEA/PORT

====,AIRLINES


### CST-1998-3498 Cessna Caravan, Two-Pilots 24 Weekly RTs: Liberal- Wichita Proforma Data Operating Projections A\erage Sector Length (sm) Scheduled Departures Scheduled Block Hours Projected Completion Factor Projected Completed Departures Projected Completed Block Hours f>assenger Projections Projected Passengers Passengers per Departure Projected A\erage Fare Re\enue Passenger Miles (RPMs) Available Seat Miles (ASMs) Projected Load Factor Financial Projections Re\enues Passenger Ticket Re\enues Ancillary Re\enues Total Expenses Flight Operations Aircraft Ownership/Lease Fuel & Oil Sales & Marketing Traffic Sen.;cing Insurance Maintenance Sub-Total
- Direct Indirect Total Expenses Projected Operating Profit/(Loss) Subsidy Calculations Operating Loss Economic Retum @ 5% IRequired Subsidy Subsidy per Departure Subsidy per Passenger

OST-1998-3496,OST-1998-3498,OST-1998-3502 December9,2013 I 199 2,496 3,536.0 98.5% 2,459 3,483.0 11,500 4.7 $64.23 2,288,500 4,403,281 52.0%
$738,645 $18,466 $757,111 $330,881 $385,000 $846,359 $25,000 $702,900 $55,727 $592,103 $2,937,971 $440,696 $3,378,667 ($2,621,556) $2,621,556 $168,933 $2,790,4891 $1,135.01 $242.65

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