August 29, 2012 Proposal of Hyannis Air Service, Inc. dba “Cape Air” to provide subsidized Essential Air Service for: 

# Ft. Leonard Wood, Missouri DOCKET DOT - OST - 1996 - 1167 

### Four 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

# Cape Air has been privileged to serve the Waynesville – St. Robert Regional Airport since December 2010

1 Ribbon cutting for Cape Air’s service at Ft. Leonard Wood, MO December 14, 2010

# Since then ridership has increased to 15,843 passengers, up 78% from the predecessor’s final year

2 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000Sep-08Nov-08Jan-09Mar-09May-09Jul-09Sep-09Nov-09Jan-10Mar-10May-10Jul-10Sep-10Nov-10Jan-11Mar-11May-11Jul-11Sep-11Nov-11Jan-12Mar-12May-12Jul-12 Ft. Leonard Wood air service ridership Year ending 15,843

8,884

# Cape Air’s customized service for Ft. Leonard Wood, including a dedicated freighter aircraft when needed, meets the route’s extraordinary baggage requirement

3 Supervisor Carola Prewett and Capt. Eric Hodges marvel at a flight’s checked luggage

# EXTRA! EXTRA! Ridership at Ft. Leonard Wood has been strong enough to support extra, unsubsidized flights every Friday

4 Strong ridership trends augur well for even more extra flights outside the EAS program From Ft. Leonard Wood to St. Louis From St. Louis to Ft. Leonard Wood Depart Arrive Flight # Operates Depart Arrive Flight # Operates

530 622 1180 X67 930 1024 1181 X7 700 752 1184 6 1205 1259 1185 7 1045 1137 1186 Daily 1240 1334 1185 X7 1400 1452 1188 Daily 1530 1624 1187 Daily 1655 1747 1190 Daily 1845 1939 1191 6 2013 2105 1194 5*7 1859 1953 1189 5*7 2145 2239 1195 X6 Cape Air’s Ft. Leonard Wood – St. Louis schedule

*Extra frequencies operated outside EAS highlighted in red

# The empirical success in ridership growth at Ft. Leonard Wood is due to a service solution that fits

Low fares Safe and conservative

operating philosophy

Convenient

schedule

Interlines with

all legacy airlines at St. Louis Codeshare with Fully - functioning global distribution plus local outreach Effective baggage solution

5 

## Popular service Constellation of success

# Cape Air is flying more passengers now in nine - seat aircraft than our predecessors were flying in larger aircraft

6 The quality and completeness of the entire airline package is demonstrably a more

important driver of ridership growth than aircraft size and amenities. **15,000+ people said so in the last year!** 

# Supporting community events is the best part of the job!

7 Independence Day Celebration Passing out candy at Christmas on the Square

Passing out in - flight meals at Music on the Square

# Cape Air respectfully requests the privilege of continuing to serve Ft. Leonard Wood

8

# CORPORATE UPDATE Cape Air

9

# Cape Air Update: Summer 2012

• Growing steadily and profitably

• YE1H12 revenue exceeded $100M

• Cape Air has purchased three more Cessnas, which will bring the fleet total to 70

• 40 airports served; 17 in EAS
10 Captain Krista Poppe Boston basedSan Juan Map not to scale Guam Rota Saipan Micronesia

Caribbean Florida Midwest Mid - Atlantic Northeast Provincetown Hyannis Nantucket Providence New Bedford Martha’s Vineyard Boston Augusta Lebanon Rutland Saranac Lake Ogdensburg Massena

White Plains Albany

Ft. Leonard Wood Cape Girardeau Marion Quincy Kirksville St. Louis Lancaster Hagerstown Baltimore

Key West Ft. Myers

Mayaguez St. Croix Vieques Tortola St. Thomas Anguilla Nevis 

# Cape Air Routes August 2012 

## Cape Air is proud to be America’s largest and most mature commuter airline Owensboro Manhattan Rockland Bar Harbor12 

# 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

# On February 25, 2012 Cape Air became the launch customer for ’s new passenger service system

13

# Cape Air’s St. Louis service now features a very popular inter - terminal shuttle

• Secure, ramp - side shuttle transports Cape Air Passengers from our gate to connecting flights on other concourses

• Return passengers call the shuttle for pick up from courtesy phones located in each of the concourses

• Airport signage is a work in progress

14 Eliminates TSA rescreening in St. Louis Shuttle highlights15 

# Cape Air has been an interline carrier since 1993

enabling connectivity with most major airlines...

• Interline e - ticket agreements are in place with all US legacy airlines

• Cape Air operates flights in Micronesia as

• Flights in the Caribbean have a code

• Cape Air is one of only a few 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

16

# Luggage gets checked through to the final destination

17 A Cape Air interline bag cart in action at St. Louis

Cape Air’s interline bag cart at St. Louis18 

# Participation in the global distribution system gives Cape Air’s communities access to the world Cape Air is sold through:19 Cape Air’s Telephone Reservations Center



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

800 - CAPE - AIR Never a booking fee!

# ...And a new ticket office opening soon in downtown Waynesville

20

# Cape Air’s St. Louis service began operations on November 8, 2009

21 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

# The operation now includes six EAS cities, ten aircraft and up to 64 flights per day

22 Cape Air’s St. Louis route map As of August 2012

# Cape Air’s ridership in St. Louis has grown steadily to more than 80,000 annual passengers

23 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 80,463

# In addition to interline ability with all network carriers at St. Louis, Cape Air’s service is codeshared with American Airlines

24 Codeshare partners: American Airlines and Cape Air

Photo source: Jim Schnobrich ; Used with permission

# Ft. Leonard Wood connecting itineraries are sold on AA’s website

25

# Cape Air is co - located with American Airlines in St. Louis’ Concourse C

26 Cape Air

# Ft. Leonard Wood is on United.com, too, through Cape Air’s long - standing relationship with United

27

# To best serve the Ft. Leonard Wood community’s travelers, Cape Air proposes continued passenger and freighter service, with the freighter used only as required

28 Drivers Passenger Economics Two year contract

Daily RTs 4.0 Annual Sched. Dpts 2,920 Pax/Dpt 5.6 Load Factor 62% Annual Passengers 15,805 Avg. Net Fare $87.31 Passenger Rev/Dpt $487 Fuel $731,703 Maintenance $662,588 Pilots $294,312 Ownership $191,464 Rents $18,269 Staff $171,146 Ops and Landing Fees $115,620 Freighter Fixed Expenses $277,106 Marketing $44,923 General & Admin./Other $227,920 Operating expense $2,735,052 Return of 5% $143,950 Economic Expense $2,879,002 Passenger Revenue $1,379,861 Profit ($1,499,141) Annual Operating Subsidy Required $1,499,141 Subsidy Per Departure $529 Per Passenger $95 Discount for four - year contract Annual Operating Subsidy Required $1,449,385 Subsidy Per Departure $512 Per Passenger $92 Required Usage Pct Dpts Annual 50% 1,460 $827,443 60% 1,752 $992,932 70% 2,044 $1,158,420 80% 2,336 $1,323,909 85% 2,482 $1,406,653 Freighter: $567/dpt

Freighter notes: • Freighter only used when needed • Utilization of the freighter is a function of enplanements, which will keep the per - passenger subsidy below $200. • Maximum eligible usage is proposed at 85%

Cape Air offers (and prefers) a four - year discounted contract to improve stability and planning29 

# Cape Air would be honored to continue serving Ft. Leonard Wood!

 Four daily flights to/from St. Louis with a proven baggage solution  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 Ft. Leonard Wood

Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 (508) 862 - 971930 

# Thank you!

## Appendix 

# Interline Examples on Online Travel Agencies32 

# Cape Air is on Expedia.com Screenshot from Expedia.com showing Cape Air LNS - PHX search for travel 22SEP0933 

# Cape Air is on Travelocity.com Screenshot from Travelocity.com showing Cape Air ATL - MAZ search for travel 22SEP0934 

# Cape Air is on Orbitz.com Screenshot from Orbitz.com showing Cape Air ART - DCA search for travel 22SEP09