Essential AirService at Garden City, KS Under 49 U.S.c. §41731 est seq. BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, DC

DOT-OST-1998-3503

AMERICAN EAGLE AIRLINES PROPOSAL TO PROVIDE ESSENTIAL AIR SERVICE AT GARDEN CITY. KS

American Eagle Airlines, awholly owned subsidiary ofAMR Corporation, ("American Eagle") respectfully submits its proposal to provide subsidized Essential Air Service to Garden City, Kansas. American Eagle contemplates service from AMR's largest hub at Dallas/Ft. Worth International Airport ("DFW") to the Garden City Regional Airport ("GCK") with two roundtrips on Embraer Regional Jet aircraft.
American Eagle is the predominate regional carrier for American Airlines, offering more than 1,700daily departures with service to more than 180cities. Through our relationship with American Airlines, our customers have access to more than 250 cities, 40 countries and more than 3,400 daily departures. In addition, our oneworld @, alliance provides ourcustomers access to over 700 destinations in 140 countries worldwide. Schedules and pricing are coordinated across the expanse ofthe American Airlines, British Airways, Iberia Airlines and Japan Airlines networkthrough an immunized alliance underthe oneworld @banner. At DFW alone, American and American Eagle will offeralmost 800 daily departures this summerto 178cities. This direct access to thevast American and oneworld @networkwill help stimulate traffic in southwestern Kansas with significantly more convenient connecting options than have been offered in the community foryears. Although American Eagle has recently re-entered the subsidized Essential Air Service program with service to Joplin, Missouri, in February 2011 and was the successful bidder at Grand Island, NE and Watertown, NY, we have been serving smaller communities for manyyears. Inthe case of Roswell, New Mexico, we took a market thatwas on the verge ofsubsidized service after Mesa Airlines announced its departure, and turned it into aself-sustaining market with three dailyflights to DFW. In Manhattan, Kansas, American Eagle was brought in to serve the communitythrough a partnership with the state of Kansas and have made the service self-sustaining. American Eagle hopes and believes that we will have as much success serving Garden City and southwestern Kansas as we have had in other regions ofthe country.

### American Eagle would like to request the ability to operate any ofourthree varieties of Embraer Regional Jets forthe same subsidy amount. We plan on operating 37 or44-seat regional jets on the route, but allowing us to substitute larger regional jet aircraftwould allow us the flexibility to match supply with demand, as well as provide operational flexibility, which will improve dependability. American Eagle also requests that DOT and Garden City waive the right to hold-in American Eagle upon issuance ofa 120 day's notice to terminate service. Although we do notforesee this to be an issue and plan on being in Garden City for manyyears to come, we cannot be operationally constrained and kept in a market indefinitely, without the abilityto adapt to the marketplace.
We believe that these recent examples ofgreat success in smaller communities are ademonstration of the qualityofAmerican Eagle's product and ofthe strength ofthe American and oneworld @brands and network. Further, American Eagle is the only regional airline with adedicated Marketing and Sales group that works with smaller communities to promote and stimulate traffic.
We look forward to serving the Garden City and southwestern Kansas for manyyears to come and appreciate the community's and the Department ofTransportation's consideration ofAmerican Eagle.

# ~ VP Planning and Marketing American Airlines Regional NetworkMARKET: AIRCRAFT Garden City, Kansas to Dallas FortWorth EMS 140 Mileage Daily RTs Annual Deps (Factored) Block per Dep Annual Block Hours (Factored) Completion %

Revenues Annual Passengers Avg Fare

- Onboard

Expenses Flight operations Fuel Stations Other

Profit/(Loss)
Profit Element ( @5%) Subsidy required Subsidy I Departure Subsidy 

### I Passenger 

### $ $

$ $ $ $ $ 405 

### 2 1,431

1

.53 2,183

98%

39,347 156.71 6,166,046

2,706,065 3,224,022 1,339,908 1,699,914 8,969,909 

### $ (2,803,864) 

### $ 448,495 

### $ 3,252,359 

### $ 2,273 

### $ 82

.66 Numberof Seats per Dep Annual ASMs (Factored) Annual RPMs Annual LF 

### 44 28,973,700 15,935,535 55%