EPARTMENT OF , . , , r I"DORTAT 0 """,\')1 i I N 

,!\ T (IPEOflTIO '," :\c i ,j j It\ NS 

,;:iIi\ UG :,W PI: 08 

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

Lebanon, NH 

Docket DOT -OST -2003-14822 

Boston Logan 4x Daily 

and 

New York City 2x Daily 

Hyannis Air Service, Inc., dba Cape Air 

Attn: Andrew Bonney, VP Planning, 660 Barnstable Road, Hyannis, MA 02601, (508) 862-9719 

Media inquiries to Chuck Ferrara, VP Corporate Affairs: (617) 567-3597 August 27,2010 
-..._ __ i. .......... .. ....-

.. 

AeMaleE) 01 MaN >/JO).. 'Al!CJ 'uols09 pue a41 iP/JOM 

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Cape Air has been honored to serve the Upper Valley since 

November 2008 

Cape Air hi~hlights 

• Cape Air key company statistics 

- 62 Cessna 402s 

- 36 cities served 

- 21 years in business 

- Thriving, growing and stable company 

• Cape Air started Lebanon - Boston service on 

November 1, 2008, now 4x daily 

• Added Lebanon - New York City service in 

March 2010, 2x daily 

• Annually carrying over 14,000 passengers, 

and growing at a 26% annual rate 

• Adding unsubsidized flights at Lebanon! 

Cape Air's ribbon cutting at Lebanon Airport 

November 12,2008 

2 
Cape Air started Lebanon Airport service in 

November 2008, and has been working hard to 

earn the Upper Valley's ridership 

Lebanon passengers on Cape Air 

1800-----------

1600 i--------------------------·---------- --------

1400 'i 

1200 _ ...... -- -...... --.---. 

1000 - - - - !----

,--_. 

;------ -- - 1------ I-----

: 800 I - -- '--- -- f--- '-- !---- !---- '-'- --- I------ -- - -- 1------ 1---- -New York 

~ - - - - - r------ '-- r------ 1----- r------ !---- !---- !---- r------ 1------ I----- - ----. 1------- f---- 600 I-----

- Boston 

+-- 400 - - - - - - - - - c---- c---- !---- !---- r------ I---- I---- - - r----- I---- -

200 I---- - - - -- - - - -- -- - - !---- 1---- r--- I---- I----- -- ---- --

--,--... -- -~- --r- '--,---" '-r- ~r- ~r 

-- o ~~ect~ 

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 

#~#~#~###~~~#~#~#~###~ 

3 
Enplanements are growing at a 26% annual rate 

LEB passengers 

Year ending 

16,000 

14,000 

12,000 

10,000 

8,000 

6,000 

4,000 

2,000 

o 

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1 

Projected 

,,\:) 

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4 
Now two years in, for comparable months, 

Cape Air is out-enplaning our predecessor 

Lebanon enplanements 

900 II------------------------------------------------------------~ 

800 I. ,'"""'--- ~ 

700 I ~ =::: Cape Air .'"-, 

><:::==-

600 I ~ ~ Predecessor 

500 I .......-= -+-2008 

400 I -- I ---2010 

300 +I--------------------------------------------------------------~ 

200 tl------------------------------------------------------~ 

100 +I----------------------------------------------------------------~ 

o 

Jan Feb Mar Apr May Jun Jul Aug 

Sources: Lebanon Airport and Cape Air 

5 
Cape Air is keen to work with the Upper Valley 

to continue to grow enplanements 

Enplanement growth highlights 

• Enplanements are presently growing at a 26% annualized rate 

• Cape Air continues to build a constituency for the relatively new Boston service 

- In Summer 2010 Cape Air flew an additional unsubsidized Boston round trip each Friday 

• Enhanced JetBlue connectivity will be enabled by are-launched jetblue.com 

• Cape Air added new service to New York City in March 2010 

- The New York City market potentially will be strong enough to support additional unsubsidized 

flying in the future 

• Robust annual marketing budget: $62,835 

• Email database for targeted marketing 

.. 

Growing traffic the old fashioned 

way: winning repeat passengers 

one at a time 

6 
Cape Air now provides great access to New York City 

Upper Valley to Midtown Manhattan in just 2 ~ hours 

How it works 

.~\ /:>Rl&ililE" 

t; ~ 

",. 

At Lebanon Airport, skip TSA screening 

Fly 1: 19 to White Plains 

Arrive at our private VIP terminal 

Complimentary ground transportation to Manhattan 

ensures stress-free connections 

Arrive Midtown at 35th St. and 8th Ave. near Penn Station 

Fare: $109 with a commuter book, or $159 each way 

Includes all taxes and fees 

7 
Lebanon - New York City Schedule 

Down and back in the same day 

with a full day for work in NYC 

Schedule, including complimentary ground transportation 

To New York City From New York City 

Depart LEB Arrive 35th & 8th Depart 35th & 8th Arrive LEB 

6:45AM 9:15AM 7:20AM 9:50AM 

4:20 PM 6:50 PM 4:45 PM 7:15 PM 

Saturday morning flights are one hour later, Sunday morning flights are two hours later 

866-Cape-Air 

Capeair.com 

8 
The new LEB-NYC service is catching on 

Cape Air LEB-NYC passengers 

400 -

370 

350 328 

300 282 

-

250 248 

200 189 

150 

100 ' 

50 43 

o " 1 ..... 'L' ..... ""...,'.LI 

Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 

9 

Boston has service to 95 non-stop destinations, including 25 

international destinations and comprehensive transcon service 

Boston destinations served 

Rank Destination Wklll DQts Rank Destination Wklll DQts Rank Destination Wklll DQts Rank Destination Wklll DQts 

1 New York-La Guardia, NY 228 25 Buffalo, NY 42 49 Memphis, TN 20 73 Santo Domingo, DO 8 

2 Washington-National, DC 176 26 Miami, FL 42 50 Augusta, ME 19 74 Austin, TX 7 

3 Chicago-O'Hare, IL 147 27 Minneapolis/St. Paul, MN 39 51 Paris-De Gaulle, FR 19 75 Dublin, IE 7 

4 New York-JFK, NY 142 28 Montreal-PET, QC, CA 39 52 Presque Isle, ME 19 76 Rome-Da Vi nci, IT 7 

5 Baltimore, MD 137 29 Lebanon, NH 38 53 Syra cus e, NY 19 77 Jacksonville, FL 7 

6 Atlanta, GA 113 30 Houston-Intercontinental, TX 36 54 Columbus, OH 18 78 NewOrleans,LA 7 

7 Philadelphia, PA 103 31 Fort Lauderdale, FL 34 55 Rochester, NY 17 79 Munich, DE 7 

8 Washington-Dulles, VA 96 32 Chicago-Midway, IL 34 56 Ottawa, ON, CA 17 80 Portl a nd, OR 7 

9 Na ntucket, MA 94 33 Toronto-City, ON, CA 31 57 Bermuda, BM 14 81 San Jose, CA 7 

10 Charlotte-Douglas, NC 83 34 Richmond, VA 29 58 Las Vegas, NV 14 82 Zurich, CH 7 

11 Martha's Vineyard, MA 75 35 Rockland, ME 28 59 Newport News, VA 14 83 Ka n s asCi ty, MO 6 

12 San Francisco, CA 73 36 Cleveland, OH 26 60 Fort Myers, FL 14 84 Myrtle Beach, SC 6 

13 Raleigh/Durham, NC 72 37 Cincinnati, OH 25 61 St. Louis, MO 14 85 Aruba, AW 4 

14 Toronto, ON, CA 71 38 Indianapolis, IN 25 62 Atl anti c Ci ty, NJ 13 86 Ca ncun, MX 4 

15 Newa rk, NJ 70 39 West Palm Beach, FL 24 63 Ba r Ha rbor, ME 13 87 Madrid, ES 4 

16 Los Angeles, CA 69 40 Sa n Jua n, PR 24 64 Akron/Ca nton, OH 13 88 Sha nnon, IE 4 

17 Provi ncetown, MA 61 41 Hyannis, MA 21 65 Fra nkfurt, DE 13 89 Oakland, CA 3 

18 Dallas/Fort Worth, TX 58 42 Plattsburgh, NY 21 66 Sa n Di ego, CA 13 90 Ponta Delgada, PT 3 

19 Denver, CO 56 43 Phoenix, AZ 21 67 Sa It La ke City, UT 13 91 Montego Bay, JM 2 

20 Orlando, FL 52 44 Rutland, VT 21 68 Albany, NY 12 92 Praia, CV 2 

21 london-Heathrow, EN, GB 49 45 Seattle/Tacoma, WA 21 69 Long Bea ch, CA 12 93 Lisbon, PT 1 

22 Detroit, MI 48 46 Sa ra nac La ke, NY 21 70 Harrisburg, PA 11 94 Punta (ana, DO 1 

23 Milwaukee, WI 45 47 Tampa, FL 21 71 Amsterda m, Nl 10 95 Terceira, PT 1 

24 Pittsburgh, PA 45 48 Halifax, NS, CA 21 72 Reykjavik, IS 10 Total 3,310 

Shading denotes internationa I Source: OAG June 2010 

11 
Cape Air has been an interline carrier since 1993 

enabling connectivity with most major airlines, 

now including jetBlue 

AIRWAYS 

Interline highlights 

• Twenty-five interline agreements are in place, with almost all legacy airlines 

• Cape Air has completed migration to interline e-ticketing, the updated industry norm 

• Cape Air operates flights in Micronesia as Ccontinent.tal • 

onnec Ion ~" 

• Flights in the Caribbean have a Conti!le.ntallBl code AirlInes ~. 

• Five Boston routes have a jetBlue code, and Cape Air can interline with JetBlue 

AIRWAYS 

• Flights in the Midwest operate with the code of AmericanAiriines' 

12 
Cape Air's partnership with Continental Airlines 

enables Lebanon to show and sell on continental.com 

Continental mw 

Airlines ~. Select Your Departing Flight for Tue., Sep. 14,2010: 

"rc,r.' 

$254 

hnlltl!d':lch,,:::: 

mI 

7:10 a.m. Tue., Sep. 14,2010 

Boston, MA (BOS) 

Change Planes. Connect time in Boston, MA (BOS) is 1 hour 20 minutes. 

Depart: 

8:30 a.m. Tue., Sep. 14, 2010 

Boston, MA (BOS) 

Cape Alrfllght 1870 operated by C",pe Air. 

Arrive: 

9:48 a.m. Tue., Sep. 14,2010 

New York/Newark, NJ (EWR - Liberty) 

Note: FlIght 1870 is serl/iced by a non-jet equipment type, 

Wheelchairs cannot be accommodilted in the c.argo hold on flight 1870 due to the equipment type being used. 

DEipart: 

5:05 p.m. Tue., Sep. 14, 2010 

lebanon, NH (lEB) 

Arrive: 

6:00 p.m. Tue., Sep. 14,2010 

Boston, MA (BOS) 

Change Planes. Connect time in Boston, MA (BOS) is 1 hour 1~ minutes. 

Depart' 

7:15 p.m. Tue_, Sep. 14,2010 

Boston, MA (BOS) 

Capl!: Alrfllght 1878 operat@dbyCapeAIL 

Arri ... e: 

8:50 p.m. Tue., Sep. 14,2010 

Nell' York/Newark, NJ (EWR - Liberty) 

Not@: Flight 1878 is ser ... icl!:d by <II non-jet equipm@nttype. 

Flight Time: 

1 hr 18 mn 

Trill.'el Time: 

3 hr 33 mn 

Flight Time: 

55 mn 

Flight Time: 

1 hr 35 mn 

Tra ... el Time: 

3 hr 45 mn 

Wheelchairs cannot be accommodated if) th@ cargo hold Of) flight 1878 due to the @quipm@n':type being us@d. 

tr,_"lro 

$254 

l,mlt,;r:itICk",r", 

mI 

Depart: 

10:20 •. m. Tue., Sap. 14,20 ID 

lebanon, NH (LEB) 

Arn ... e: 

11:15 a.m. Tue., Sep. 14,2010 

Boston, MA (BOS) 

Chilnge plilnes. Connect time In Boston, MA (BOS) IS 1 hour 25 minutes. 

Depart: 

12:40 p.m. 

Arrive: 

2:20 p.m. 

Flight Time: 

55 mn 

Flight Time: 

1 hr 40 mn 

OnePass Miles! 

Elite Qualiflcabon*': 

201/100% 

Total Miles: 

201 

OnePass Miles/ 

Elite Quallflcatlon*: 

OnePass Mil@s/ 

Elite Qualiflcation*: 

201/100% 

Total Miles: 

201 

OnePass Miles/ 

Elite Qualification*: 

OnePass Mlle:>/ 

Elite Qual,flcatlon* ~ 

Flight: CO 1123 

Aircraft: Boeing 737-:;00 

Fate Class: Economy (N) 

M@al' None 

~~r I~'-~:.t_~ _ 

Flight: 9K 1818 

Aircraft: Cessna 402 

Fare Class: Economy (V) 

M@al: None 

T ",-, ": ~'-, t _'_r, __ ~' 

Flight: C01101 

Aircraft: Boeing 131-500 

Fatl~ Class: Economy (N) 

Meal: None 

Flight: 9K 1874 

Aircraft: Cessna 402 

Fate Class: Economy (V) 

Me .. l: None 

~~!"~-.. .:=.-

Flight: COIU4 

Alruaft: Boeing 717-'jOO 

13 
Lebanon can connect seamlessly within Logan's Terminal C 

with Boston's largest low-cost carrier 

Boston Logan Terminal "e" 

jetBlue jet Blue jet Blue AIRWAYS AIRWAYS AIRWAYS jetBlue AIRWAYS 

jetBlue AIRWA/S 

Customer service center 

jetBlue jetBlue AIRWAYS AIRWAYS 

jetBlue --.... " " AIRWAYS 

t~u \ 

" .... -- " lebanon 

jetBlue AIRWAYS 

..----------, 

1 __ ISi\ §~cl!!"i!y __ 1 

Ticket counters 

Note: Not to scale 

As an interline carrier for 15 years, Cape Air facilitates 

through ticketing and bag transfer to most major airlines 

JetBlue is Boston's largest low-cost carrier by either departures or ASMs, July 2010 OAG 

14 
Connectivity with JetBlue is valuable to Lebanon because from 

Boston, JetBlue has 535 weekly departures to 33 cities, and ... 

JetBlue's Boston route map 

Source: OAG 

-~~?~P;{U . ",. 

4;-

. 

• I . i 

JetBlue's Boston service 

July 2010 schedule 

Ql!y 

1 New York-JFK, NY 

2 Washington-Dulles, VA 

3 Orlando, FL 

4 Baltimore, MD 

5 Charlotte-Douglas, NC 

6 Fort Lauderdale, FL 

7 Buffalo, NY 

8 Chicago-O'Hare, IL 

9 Pittsburgh, PA 

10 Raleigh/Durham, NC 

11 Tampa, FL 

12 Denver, CO 

13 Los Angeles, CA 

14 West Palm Beach, FL 

15 Richmond, VA 

16 Fort Myers, FL 

17 San Diego, CA 

18 SeattlelTacoma, WA 

19 San Juan, PR 

20 San Francisco, CA 

21 Austin, TX 

22 Bermuda, BM 

23 Jacksonville, FL 

24 Las Vegas, NV 

25 Long Beach, CA 

26 New Orleans, LA 

27 Oakland, CA 

28 Santo Domingo, DO 

29 San Jose, CA 

30 Aruba, AW 

31 Cancun, MX 

32 Montego Bay, JM 

33 Punta Cana, DO 

Total 

WklyDpts 

52 

47 

42 

34 

28 

28 

21 

21 

21 

21 

21 

14 

14 

14 

14 

14 

14 

14 

14 

13 

7 

7 

7 

7 

7 

7 

7 

7 

7 

4 

3 

2 

2 

535 15 
... JetBlue serves non-stop 

13 of the most popular 15 markets at Boston 

Top Boston markets 

YE1Q10 passenger data, ranked by daily passengers each way; July 2010 schedule; alternative service noted 

Rank Daily Passengers US Airways JetBlue 

1 San Francisco, CA 1255 JetBlue 

2 Los Angeles, CA 1204 JetBlue 

3 Orlando, FL 1152 JetBlue 

4 Chicago-O'Hare, IL 1134 JetBlue 

5 New York-La Guardia, NY 1072 US Airways JFK 

6 Baltimore, MD 1038 JetBlue 

7 Atlanta, GA 1004 

8 Fort Lauderdale, FL 799 JetBlue 

9 Washington-National, DC 781 US Airways Dulles 

10 Washington-Dulles, VA 621 DCA JetBlue 

11 Dallas/Fort Worth, TX 603 

12 Fort Myers, FL 595 JetBlue 

13 Denver, CO 579 JetBlue 

14 Tampa, FL 547 JetBlue 

15 West Palm Beach, FL 537 JetBlue 

Source: "0&0" Survey and Official Airline Guide 

16 
Among the nine largest carriers at Boston, 

JetBlue has among the lowest yield, or fare per mile flown, 

meaning low total travel costs for Lebanon 

Boston yield by carrier 

YE1Q10, revenue per passenger-mile flown 

$0.20-/ ~ 

$0.15-V 

$0.102 

$0.10 Yl ~ 

$0.05-V1 

$0.102 

7#;;:;;;#'\ 

$0.104 $0.106 $0.112 ~ 

,L{,,",,,,,,,' 

t----

$0.132 ~~ ,c:=::j 

$0.00 I H ... .. 

United Southwest JetBlue American AirTran Continental Delta 

IWkly Opts 200 144 535 439 137 139 488 

$0.165 

$0.143 ~ 

I---

I---

I---

~ 

Air Canada US Airways 

124 591 

Cape Air's connections to JetBlue mean low total trip costs 

Source: us DOT 0&0 Survey 

Note: Largest carriers by departure frequency, OAG July 2010, excluding Cape Air 17 
"JetBlue Airways Announces Major Expansion in Boston ... " 

Reuters, October 29, 2009 

BOSTON, Oct. 29, 2009 IPRNewswire-FirstCalil -- JetBlue Airways (Nasdaq: JBLU) today announces 

a major expansion of service from its focus city at Boston Logan International Airport. The 

airline, which already offers service to the most nonstop destinations of any carrier from 

Boston, plans to boost daily departures by 30% by summer 2010. With its expanded 

schedule, JetBlue and its growing base of 1,300 Boston crewmembers will offer travelers up to 78 

daily flights to 33 top destinations .... 

"Here at JetBlue we are officially declaring Summer 2010 the Summer of Boston," said Robin 

Hayes, Chief Commercial Officer for JetBlue. "Today's added flights represent an important next 

step in our commitment to offering Boston travelers the most robust schedule as well as the most 

destinations of any airline. 

18 
4x daily Lebanon - Boston schedule 

To Boston From Boston 

Departure Arrival Departure Arrival 

6:15AM 7:10AM 8:45AM 9:40AM 

10:20AM 11 :15 AM 12:00 PM 12:55 PM 

1 :35 PM 2:30 PM 3:45 PM 4:40 PM 

5:05 PM 6:00 PM 8:15 PM 9:10 PM 

19 
Cape Air's independence offers numerous benefits 

Benefits of independence 

• Complete control of: 

- Fares and fees 

- Marketing and advertising 

- Community philanthropy 

- Schedule 

• Direct relationships with the decision makers 

at Cape Air 

• I ndependent reservations center: 

- 866-Cape-Air 

- Capeair.com 

• No fees to book tickets with a live Cape Air 

reservations agent or at the counter 

• No first checked bag fee; no change fees 

• Aircraft isolated on routes to provide reliability 

- Good availability of spare aircraft 

• Same connectivity as a network affiliate, since 

Cape Air has e-ticket and baggage 

agreements with most major airlines 

20 
For smaller communities and niche markets, 

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

Cape Air highlights 

~ High-frequency, non-stop service 

~ Interline e-ticketing and baggage agreements 

~ Complete GOS sales channels: 

~ 866-Cape-Air 

~ In-house "Sabre" reservations office 

~ Reliability 

~ Subsidies used to lower fares 

~ MOCHA HAGoTDlt culture and community 

investment 

t Make Our Customers Happy And Have A Good Time Doing It 

21 
To best serve the Upper Valley 

Cape Air proposes continued service 

to both Boston and New York City 

Drivers Expenses 

New York Boston 

New York Boston Total Fuel $442,787 $562,999 

Oaily RTs 2 4 6 Maintenance $393,064 $496,536 Stage (naut. miles) 164 97 119 

Pilots $160,042 $194,452 Seats per Opt 9 9 9 

$68,259 $140,740 Annual Actual Opts 1,416 2,832 4,249 Ownership 

Pax/Opt 4.1 4.5 4.4 Rents $36,962 $98,006 

Load Factor 45% 50% 48% Staff $161,339 $219,875 

Annual Passengers 5,913 13,140 19,053 Ops and Landing Fees $276,966 $261,159 

Avg. Net Fare $130.00 $58.31 $80.56 Marketing $18,481 $44,354 

Passenger Rev $745,629 $743,208 $1,488,837 General & Admin./Other $54,607 $96,481 

$1,612,506 $2,114,602 

Special note on Lebanon proposal Return of 5% $84,869 $111,295 

Community leaders in the Upper Valley have Economic Expense $1,697,374 $2,225,897 

urged Cape Air to propose continued service to Passenger Revenue $745,629 $743,208 both Boston and New York City. Cape Air's 

Profit ($951,745) ($1,482,689) proposal for NYC requires relatively little 

additional subsidy per departure especially Selection term 

considering the incremental distance (due to Subsidy Required $951,745 $1,482,689 

robust ticket revenue) and offers strong 2-year Per Departure $672 $523 prospects for long-term sustainability and 

Per Passenger $166 $116 reduced subsidy requirements. 

Subsidy Required $917,854 $1,429,891 

4-year Per Departure $648 $505 

Preferred Per Passenger $160 $112 

Total 

$1,005,785 

$889,600 

$354,494 

$208,999 

$134,968 

$381,214 

$538,125 

$62,835 

$151,088 

$3,727,108 

$196,164 

$3,923,272 

$1,488,837 

( $2,434,435) 

$2,434,435 

$573 

$128 

$2,347,744 

$553 

$123 

22 
Cape Air is proud to connect the Upper Valley with the world 

and provide special access to New York City 

Cape Air offers the airline amenities the Upper Valley needs: 

~ Full interline connectivity at Boston, allowing same-ticket connections with the world on most 

major airlines inciudingjetBlue AIRWAYS 

~ High-frequency, non-stop service to Boston: 4x daily at a low fare 

~ The Upper Valley's best access to New York City 

~ Midtown Manhattan in 2 % hours! 

~ Attractive fares and seamless service 

~ Commitment to growing enplanements at Lebanon Municipal Airport 

Thank you for inviting Cape Air to serve 

Lebanon Municipal Airport 

23