Before the United States Department of Transportation 

April 6, 2015 

Proposal to Provide Essential Air Service at 

MERCED, CALIFORNIA Docket OST -1998-3521 

Under 49 U.S.C. 41731 et seq. 

Amended Proposal of SeaPort Airlines, Inc. 

to Provide EAS at Merced, California 

By Order 2014-5-9 dated May 21, 2014, the U.S. Department of Transportation ("the 

Department") requested proposals from carriers interested in providing Essential Air Service 

("EAS") at Merced and Visalia, California. 

By Order 2104-12, the Department selected SeaPort Airlines to provide EAS at Visalia for a 

two-year term. SeaPort Airlines launched service to Visalia from Burbank and Sacramento on 

February 9, 2015. The Visalia market has responded very strongly to SeaPort Airlines' service, 

producing the highest load factor among the 12 EAS communities on our route map. 

On March 27, 2015, the Department sent an email stating one carrier had proposed 

modifications to its earlier EAS proposal at Merced and, in the interest of a fair carrier selection 

process, the other carriers that submitted proposals were being given the opportunity to make 

their own amendments no later than April 6, 2015. 

This document serves as the timely amendment of SeaPort Airlines to its proposal to provide 

EAS at Merced, California. Based on the high passenger counts being generasted at Visalia, 

our EAS proposal at Merced is being amended to include a service pattern which mirrors that a 

Visalia: 12 weekly roundtrips between Merced and Sacramento plus 12 weekly roundtrips 

between Merced and Burbank that originate or terminate at San Diego. The new service pattern 

will require subsidy of $2,0~4, 148 per year. 

The amended service pattern proposal for Merced is nearly identical to that which SeaPort 

provides at Visalia. While Merced and Visalia each have unique characteristics, we believe it is 

reasonable to assume that the response to SeaPort's service in Visalia provides a reasonable 

indication of how the Merced market would likely respond. In this context, we believe our 

proposal represents the best opportunity for Merced to maintain eligibility for subsidized EAS. 

SeaPort Airlines appreciates the opportunity to submit this amended proposal and the 

Department's effort to maintain a fair carrier selection process. Questions regarding this 

proposal should be directed to: 

Timothy Sieber, 

Executive Vice President 

SeaPort Airlines, Inc. 

(971) 340-1716 

tsieber@seaportair.com 

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Specific Amendments to EAS Proposal 

This document details specific components of the July 11, 2014 proposal of SeaPort Airlines to 

provide EAS at Merced, California that we wish to amend, consistent with the email notiufication 

from the Department on March 27, 2015 that amendments to carrier proposals may be filed no 

later than April 6, 2015. 

The primary amendment involves replacing of one of the twos hubs in our original proposal with 

a superior alternative. This results in need for secondary amendments to other elements of the 

proposal such as schedules and frequencies, fares, and requested level of subsidy. 

In addition, we have included data that illustrates the very positive market response by Visalia to 

SeaPort Airlines during the first two months of service. While these two months represent a 

small portion of the 24 month contract period, it is reasonable to assume the market response of 

Visalia provides an indication of how the Merced market would respond to SeaPort's service. 

New Service Pattern: Sacramento and Burbank (continuing to San Diego) 

SeaPort's ORIGINAL EAS proposal at Merced included a service pattern of 18 weekly 

roundtrips to Oakland International Airport ("OAK") and 6 weekly roundtrips to Burbank/Bob 

Hope ("BUR") Airport that originated or terminated at San Diego ("SAN"). SeaPort's AMENDED 

proposal to provide EAS at Merced is as follows: 

• 12 weekly roundtrips to Sacramento International Airport ("SMF") 

and 

• 12 weekly roundtrips to Burbank/Bob Hope Airport, originating or terminating as "1-

stop"service to San Diego. 

The substitution of Oakland with Sacramento is the result of an agreement between SeaPort 

and Sacramento International Airport that modifies the airport's rates and charges schedule to 

allow economic operation of our 9-seat aircraft, while at the same complying with FAA grant 

assurances. 

Access to SMF at a reasonable cost is something that SeaPort has worked on for nearly three 

years, but was unable to achieve ahead of the July 11, 2014 deadline for EAS proposals at 

Visalia and Merced. Once the agreement was reached, however, SeaPort immediately sought 

consent of the Visalia City Council to replace the planned Oakland service with Sacramento 

service. This was following by a formal request to the Department for approval to a change in 

service pattern. The request was subsequently granted and service from Visalia to both 

Burbank and Sacramento was launched on February 9, 2015. 1 

Since the first flight, demand from Visalia to Sacramento has been strong and we believe similar 

results in Merced are very probable based on the following factors: 

1 The service pattern change requested by SeaPort in this instance did not include a change in overall weekly frequencies, number 

of seats, or level of subsidy. In fact, SeaPort has absorbed the expense of the longer Visalia - Sacramento flight relative to Visalia -

Oakland. 

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April6, 2015 

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• While OAK offered a greater number of nonstop destinations and daily departures, 

service at SMF provides a balance of choices that include the "Big 3" U.S. airlines and 

resultant access to the global alliances, as well as service from Southwest, Alaska, 

Hawaiian, Aeromexico, JetBiue, and Volaris.2 This variety of carriers at Sacramento 

ensures a healthy competitive environment that benefits customers in the form of lower 

ticket prices. 

• The advantage of Oakland regarding frequencies and nonstop destinations is partly 

attributable a few low-fare carriers offering service to leisure destinations such as 

Disneyworld, Mexico, Hawaii, and desert golf in the winter. Customers traveling to these 

destinations, particularly those with more than one small child, are typically inclined to 

drive to a distant airport to board a nonstop flight rather than use take advantage of 

connecting at their local airport. In this context, the needs of business travelers become 

a major focus of the service at Merced and their needs are better met by the connecting 

opportunites available at Sacramento. 

• In addition to enhanced connecting opportunities, Sacramento's role as the seat of 

government for the world's 81

h largest economy creates significant local traffic demand. 

This includes government employees traveling on business, as well as private sector 

employees needing to communicate with the government. Additional traffic is generated 

by business unrelated to government, including strong medical and tech sectors, with 

the latter represented by companies such as Intel, Hewlett-Packard, EDS, and Apple 

Computer. 

Finally, we note that during interviews conducted by the air service subcommittee of Merced 

Regional Airport Authority following our July 11, 2014 proposal submission, SeaPort was asked 

whether Sacramento had been considered as an alternative to Oakland. In response, we 

explained the challenges that the rates and charges in place at Sacramento at that time, and 

that SeaPort was committed to accessing SMF on economically viable terms but that timeline 

to achieve this goal was unknown. 3 With costs at Sacramento International Airport now 

structured to allow economical operation of 9-seat aircraft, SeaPort welcomed the opportunity to 

amend our proposal in a manner that was directly responsive to the subcommittee's specific 

request during our interview. 

Amended Service Pattern Results in Improved Schedule Proposal 

As outlined above, SeaPort's amended proposal to provide EAS at Merced includes 12 weekly 

roundtrips to Sacramento and 12 weekly roundtrips to Burbank, all either originating or 

terminating at San Diego providing single-plane service between Merced and San Diego. 

SeaPort's proposed schedule for this amended service pattern is provided on the next page. 

2 The "Big 3"U.S. airlines, in order, are American (American + US Airways), United (United + Continental), and Delta (Delta + 

Northwest) 

3 To illustrate the challenge of Sacramento's "one size fits all" rates and charges, $875 was the standard charge to use a passenger 

hold room and adjacent aircraft parking position at SMF without provision for adjustment based on aircraft capacity. On a 265-seat 

Airbus A330, the $875 would translate in a cost of $3.30 per seat. The same fee on a 140-seat Boeing 737 results in cost of $6.25 

per departing seat, higher but economically tenable. That same $875 fee assessed on a 9-seat Cessna Caravan would result in a 

cost per departing seat of approximating $97 and eliminate any chance for economically viable service at Sacramento, with or 

without subsidy. 

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April 6, 2015 

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Merced Flight Schedule 

Amended EAS Proposal of SeaPort Airlines 

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Flight Leave Arrive Freq Stops Flight Leave Arrive Freq St()ps 

Merced -+ Burbank Burbank -+ Merced 

5450 9:10am 10:50am ExSun 0 5451 12:30pm 2:10pm Ex Sat 0 

5452 4:55pm 6:35pm ExSat 0 5453 6:50pm 8:30pm Ex Sat 0 

Merced -+ Sacramento Sacramento + Merced 

5400 6:30am 7:20am ExSun 0 5401 8:00am 8:50am ExSun 0 

5404 2:25pm 3:15pm Ex Sat 0 5405 3:40pm 4:30pm Ex Sat 0 

Merced-+ San Diego San Diego -+ Merced 

5450 9:10am 12:15pm ExSun 5451 11:00am 2:10pm ExSun 

5452 4:55pm 8:00pm Ex Sat 5453 5:25pm 8:30pm Ex Sat 

Key points with respect to the schedule provided above: 

• Note that all flights between Merced and Burbank either originate or terminate at San 

Diego. This results in the Merced- San Diego market provided with two 1-stop flights in 

each direction on each weekday, as well as single roundtrip in each direction on both 

Saturdays and Sundays. 

• SeaPort's amended EAS proposal at Merced includes 12 weekly roundtrips to Burbank, 

double the number in our original proposal. Similar to the discussion of Sacramento 

instead of Oakland, a desire for increased frequency to Burbank was expressed by the 

subcommittee while discussing our original proposal. Our schedule above is intended to 

be responsive to that request. 

• The flight schedule from Merced to Sacramento includes an early morning departure that 

allows a nearly full day of business to be completed with a return the same day. 

Similarly, schedules to Burbank and San Diego allow for same-day trips that include 

productive time at the destination that approximates half of a workday. 

• The schedule proposed by SeaPort will allow passengers a choice of four departure 

times every weekday, and two departure times on both Saturday and Sunday, as well as 

a choice of two hub airports. This represents a doubling of choices over the present 

schedule provided by Great Lakes and should result in our service capturing a greater 

share of the traffic generated in the primary service area of Merced Regional Airport. 

Finally, SeaPort acknowledges concerns over access to international connections that Merced 

would lose if LAX service were replaced with service to Burbank. We are addressing these 

concerns by providing access to ground transportation services for transfers between LAX and 

BUR. This effort was initiated in partnership with rideshare service Uber, providing SeaPort 

Airlines customers $25 off their first Uber trip from airports throughout our system, including 

Burbank, San Diego, and Sacramento. Later this year, SeaPort will add to our website 

functionality that allow customers to reserve in advance ground transfer services ranging from 

shared vans to private executive town car. This service should lower anxiety over unknown 

costs and uncertainty over getting a safe, reliable service in a time frame that allows for any 

connection. 

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April6, 2015 

Page 14 

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More importantly, the cost of the transfer service plus SeaPort's low fares will be less expensive 

than the current fare charged by Great Lakes' between Merced and Los Angeles. 4 That lower 

cost will actually provide a less-hassled travel experience for Merced passengers. To illustrate, 

today passengers in Merced can fly nonstop (but are frequently delayed) to Los Angeles 

International Airport where connections with international flights require boarding an interterminal transfer bus crowded with other passengers and their baggage. In contrast, SeaPort's 

proposal would see a passenger boarding in Merced and arriving at Burbank (an airport with 

very few air traffic delays) and is met in baggage claim by the Uber driver. Telephone calls and 

other work can accomplished from the car while driver navigates to LAX where, upon arrival, the 

passenger is dropped curbside near the outside check-in area of the airline for their 

international flight. 

Interline Connectivity & GDS Display 

As noted in our original proposal, in March 2014 SeaPort Airlines became the first U.S. carrier to 

be fully-hosted on the Amadeus Althea reservation. We were followed by Cape Air in November 

2014 with Southwest Airlines scheduled to be fully-migrated to Altea by the end of 2016. 

This system provides SeaPort unsurpassed capability to interline ticketing, the convenience of 

customer friendly optional services (i.e., ground transfers, travel insurance, discounts on 

destination attractions, hotels, rental cars, etc.), through baggage check-in, connecting boarding 

passes on participating connecting interline partners, notification by SMS text and/or email of 

schedule changes and flight irregularities, ability for customers to make changes to reservations 

online, and online check-in that includes discounts for pre-payment of specific services and 

fees. 

The capabilities of Altea enabled SeaPort to implement its first bilateral interline e-ticketing and 

baggage agreement in March 2014 with Alaska Airlines. 5 A second agreement with Hawaiian 

Airlines followed in December 2014. SeaPort has an understanding with a "Big 3" U.S. airline to 

tentatively begin the implementation of another interline agreement in September 2015. We 

continues to pursue agreements with other airlines that will provide customers with improved 

connectivity to destinations across the country and around the world. For customers in Merced, 

in addition to the "Big 3" airlines, the most beneficial interline agreement would be with jetBiue, 

which provides services from Sacramento, Burbank, and San Diego. 

It is important to note that outreach to potential interline partners, along with our significant 

investment in reservation technology that can complete interline e-ticketing, does not assure 

additional agreements. The evaluation of SeaPort as an interline partner includes consideration 

by the larger airline of how much incremental traffic and revenue can flow from our aircraft to 

their aircraft. The larger carrier will often use these estimnates to compare SeaPort with other 

new interline partner opportunities, ensuring that resources are allocated to agreements that 

provide the highest volumes or greatest strategic value. This means that every market added to 

SeaPort's route map increases our value as a potential interline partner. We are hopeful that the 

amended proposal herein results in our being able to include Merced in discussions with other 

airlines about the connecting traffic and revenue that an interlining with SeaPort will provide. 

4 Fare of $193.60 each-way quoted by Great Lakes website on April 3 for travel on April 7, 2015 

5 Bilateral agreements allow both participating carriers to make reservations and issue tickets on each other's flights. A unilateral 

agreement only allows one carrier to sell and issue tickets. 

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April6, 2015 

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Fares & Pricing 

Effective June 1, 2015, SeaPort will simplify our fare structure by reducing the number of fare 

types from four to three, as well replace "branded" fare names with short, and easier to 

understand, descriptions. On the same date, SeaPort will begin offering customers the 

convenience of online check-in that also provides an opportunity to save time and money by 

pre-paying certain fees at home. 

As a result, we are amending the fares and pricing of our proposal to provide EAS at Merced to 

include 1) the simplified fare structure that will be offered if SeaPort Airlines is selected to 

provide EAS at Merced, and 2) changes to the market specific fares, including replacement of 

Oakland fares with Sacramento fares. These changes are summarized on the graphic below. 

Revised SeaPort Airlines Fare Structure & Price Points 

Revised Proposal of SeaPort Airlines to Provide EAS at Merced 

Burbank 

Express security lane 

Second checked baggage at no charge 

SeaPort Perks Bonus % 

Refunds 

Itinerary change after ticketing (plus any fare difference) 

Telephone/Airport ticketing fee 

Second Checked Bag/Overweight Bag 

Pay at AirporVPre-Pay at Home 

Third Check Bag 

Pay at AirporVPre-Pay at Home 

Golf Clubs 

Pay at AirporVPre-Pay at Home 

Unaccompanied Minor Fee 

at Home 

Fully Flexible & 

Refundable 

$109 

0 

X 

X 

25% 

Permitted 

$0 

No Charge 

$50 I $35 

$50 I $35 

To supplement advertising and create awareness, SeaPort Airlines will offer an introductory fare 

of $39 (including all taxes and fees) on every seat and every flight departing Merced for the first 

30 days of service. The objective of this introductory pricing is to draw customers back to 

Merced Regional Airport and get them "talking up" the new service by demonstrating a strong 

the contrast between the service provided by SeaPort Airlines to that of Great Lakes Aviation. 

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Maintaining EAS Eligibility for Merced 

As discussed in our proposal submitted on July 11, 2014, Merced was one of 13 communities 

that the Department notified of its intent to terminate eligibility for EAS subsidized service based 

enplanements below an average of 10 per day during the year ending September 30, 2013. 

Merced, along with all but one of the other communities, filed a request, and was subsequently 

granted a waiver from this requirement. This waiver provided the community and the EAS 

carrier with an opportunity to increase enplanements to the minimum requirement of 10 per day 

during the measurement period that ends September 30, 2015. 

The Department issued a Final Notice of Enforcement on October 24, 2014 that described its 

intention to enforce the subsidy limit of $200 per passenger for communities located no more 

than 210 from a medium or large hub airport in order maintain eligibility for subsidized EAS. The 

Department will enforce of this policy based on enplanements for the period ending September 

30, 2015. 

Merced's continued eligibility for subsidized EAS is contingent on the market enplaning an 

average of no less than 10 enplanements on service that requires subsidy which equates to less 

than $200 per passenger. Additionally, while waivers from the 10 enplanement requirement 

were granted to all communities that applied in the first year the Department enforced this 

policy, it is reasonable that future enforcement will be more stringent. As our chart in the 

discussion following illustrates, Great Lakes did not achieve the 10 enplanements per day 

requirement in any single month during calendar year 2014. 

Continuation of Current Service Risks Merced's Continued Eligibility for Subsidized EAS 

SeaPort Airlines reviewed T-1 00 filings by Great Lakes Aviation to see if progress was being 

made to achieving the benchmarks necessary to maintain Merced's eligibility for subsidized 

EAS. 

The period analyzed was for the 12-months ending December 2104, the last month that data is 

presently available to the public. With this data, we are able to estimate for the time period both 

the average enplanements per operational day and the amount of subsidy per passenger at 

Merced.6 As the following graph illustrates, Great Lakes has made no progress toward 

continuing Merced's EAS eligibility. 

6 Subsidy per passenger was calculated by multiplying the awarded amount of subsidy per number in effect each month by the 

actual number of departures reported by Great Lakes in T-100 filings, then divided the number of enplanements reported on T-100 

filings for the same period. Subsidy per departure was calculated using rates established by the Department in Orders 2012-9-9 and 

204-10-15. 

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Average Daily Enplanements & Subsidy Per Passenger 

Essential Air Service At Merced, California 

Year Ending December 31, 2014 

0 $0 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 

_,Average Daily Enplanements ... Subsidy per Passenger 

SOURCE: T-1 00 data via Diio.net 

Continued Eligibility for EAS at Merced Requires a "Fresh Sta~" 

SeaPort Airlines believes the best hope for Merced to maintain eligibility for subsidized EAS is 

best described as a "fresh start" for air service offered at Merced Regional Airport. This means a 

change to service dramatically different from that which the community has experienced over 

the past five years and which any promises to improve would likely be met with skepticism. 

SeaPort believes our proposal represents such change, and provides Merced the best chance 

to maintain EAS eligibility. Our belief is based on the following factors, some of which have 

previously been discussed in the amendments to our proposals: 

• A shift in service from Los Angeles International Airport, which is often subject to delays 

on the ground and in the air, to less congested airports at Burbank and Sacramento. 

• A schedule and service pattern that doubles the average daily departures and number of 

hubs served, resulting in a greater number of choices for passengers to use air service 

from Merced Regional Airport. 

• Connecting opportunities at Burbank and Sacramento with a mix of airlines that includes 

legacy cariers (i.e., the "Big3"), low-fare airlines (i.e, Southwest, jetBiue, Volaris), and 

large niche carriers that have significant regional dominance (i.e., Alaska, Hawaiian, 

etc.). 

• The leading market position of Southwest Airlines at Sacramento and Burbank, 

supported by the presence of jetBiue, which ensures fares at both airports remain 

reasonable and, when added to a SeaPort ticket between the hub and Merced, provides 

passengers with a reasonable total trip cost. 

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• Nonstop flights to Sacramento will serve latent demand for access to the state capitol by 

both the private and public sector, and who must now drive that distance. 

• A schedule that will allow same-day trips to the capitol in Sacramento, as well as sameday trips to both Burbank and San Diego that include adequate time at the destination 

equal to approximately half of a workday. 

• Providing convenient access to ground transfer services, as well a promotional activities 

with ride-share service, Uber, to help lower customer anxiety about switching at the 

beginning and end of long international journeys utilizing LAX. 

• Allowing accommodation for the unique characteristics of the Merced market, SeaPort 

would employ marketing tactics that have proven success in other EAS markets. This 

includes paid media placements (print, radio, outdoor, etc.) stretched with trade 

agreements, as well as customer engagement on social media sites such as Facebook, 

Twitter, and Linkedln. 

• Outreach to business groups and community organizations by our full-time Manager of 

Community Affairs to provide details on SeaPort, the service we will provide, and how 

we plan to restore confidence in the service provided at Merced Regional Airport. 

• A pricing strategy intended to stimulate demand at Merced Regional Airport, with fares 

starting as low of $39 (Sacramento with advance purchase) with our highest price point 

of $129 (fully-refundable and no advance purchase to San Diego) that still provides 

customers with a good value, and all of which are significantly lower than current Great 

Lakes' fares. 

• Sales calls to major employers in and around Merced offering the incentive of discounts 

off published fares in exchange for commitments that a reasonable percentage of the 

company's business travel will use the service available at Merced Regional Airport. 

• Offering other products such as 1) Commuter Books which provide savings on bulk 

ticket purchases which results in a customer commitment to the local airport and 2) 

Student Standby Fares that provide a low-cost travel option and generate enplanements 

that can be counted toward EAS eligibility determination. 

• The declining presence of service by Great Lakes Aviation in California indicate little 

likelihood of an investment in marketing activities aimed at growing Merced traffic. In 

contrast, SeaPort Airlines has a long-term interest in Merced as part of larger strategy to 

develop intra-California service that connects small and mid-size communities with large 

metropolitan areas and connections with other airlines at hub airports. 

Early Success in Visalia is an Indicator of SeaPort's Likely Success in Merced 

As noted earlier in this document, SeaPort Airlines began service at Visalia Municipal Airport on 

February 9, 2015. The service pattern we offer in Visalia is identical to that which we propose at 

Merced with slight difference in specific departure times to each city. The early market response 

to our service at Visalia has exceeded all expectations and is believed to be at least indicative of 

the how the Merced market would respond to SeaPort Airlines' service. 

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The graph below shows total O&D passengers and load factor on nonstop segments to Burbank 

and Sacramento. 

Passenger Counts & Load Factors 

First Two Months of Service at Visalia by SeaPort Airlines 

1,400 n1% 80% 

1,200 

70% 

59.6% 60% 

f! 1,000 ., en C> .. c: 50% "' ., 3 "' "' 800 (I) ., ~ a. ..... 0 40% 0 ell ., 0 600 ., "" 

]i 30% ., ~ a 

Q 

400 20% 

200 10% 

0 0% 

February 9-28 March 1-31 

-VIS-BUR Passengers -VIS-SMF Passengers 

--VIS-BUR Load Factor-e-VIS-SMF Load Factor 

Seaport's amended proposal to provide EAS at Merced includes a service pattern that is 

virtually identical to that we are providing at Visalia and illustrated above. Of equal importance, 

however, is that the fact that service we replaced at Visalia was nearly identical to the service 

we would replace at Merced, if selected provide EAS. Here again, similarities between the 

Merced and Visalia communities provide SeaPort with confidence that the strong market of 

Visalia provides, at the very least, an indication that Merced would have a similar market 

response. 

During the first two months of service (including a shortened February), SeaPort has enplaned 

and deplaned over 2,000 passengers at Visalia Municipal Airport. Continued generation of traffic 

at that rate would result in 10,000 enplanements by the end of this year, resulting in Visalia 

Municipal Airport being reclassified as a "primary airport" thus regaining automatic 

apportionment of at least $650,000 in Airport Improvement Program (AlP) funding from the FAA 

each year. 

Finally, if 10,000 enplanements are reached and then sustained, it would virtually secure 

Visalia's place on the list of communities eligible to receive subsidized EAS. To illustrate this 

point, SeaPort's service at Visalia generated an average of 17.9 daily enplanements in February 

2015, increasing to an average of 24.1 enplanements in March 2015. 

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Recap of Amended Proposal & Revised Subsidy Request 

In this filing, SeaPort Airlines hereby amends its July 11, 2014 proposal to provide EAS at 

Merced, California. In summary, the amended proposal includes: 

• 12 weekly roundtrips to Sacramento International Airport 

and 

• 12 weekly roundtrips to Burbank/Bob Hope Airport, continuing to San Diego. 

• All flights would be flown with Cessna Caravans, a reliable and comfortable turboprop 

that seats 9-passengers and two crewmembers. 

• The required amount of subsidy to provide the service pattern proposed is $2,074,148 

per year with assumption of a two-year award. 

If awarded the EAS· contract at Merced, SeaPort Airlines would provide service nearly identical 

to that we provide in Visalia. While each market has unique characteristics, the strong support 

for SeaPort's service at Visalia provides confidence that we would produce similar results at 

Merced. This provides further support to SeaPort's belief that our amended proposal represents 

the best opportunity for Merced to reach the two benchmarks used to determine eligibility to 

continued receiving subsidized EAS: 1) Average of 1 0+ enplanements each day, and 2) 

Subsidy less than $200 per passenger. 

SeaPort Airlines will be happy to provide the appropriate personnel to the Merced Regional 

Airport Authority, City of Merced, and/or the Department to discuss our original proposal dated 

July 11, 2014, as well as the amendments contained in this document. 

Respectfully submitted, 

Timothy Sieber 

Executive Vice President 

SeaPort Airlines, Inc. 

April 6, 2015 

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OST-1998-3521 

Cessna Caravan, Two-Pilots 

12 Weekly RTs: Merced - Sacramento 

12 Weekly RTs: Merced- Burbank 

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Proforma Data 

Operating Projections 

Average Sector Length (sm) 197 

Scheduled Departures 1,976 

Scheduled Block Hours 2,686.7 

Projected Completion Factor 99.0% 

Projected Completed Departures 1,956 

Projected Completed Block Hours 2,659.8 

Passenger Projections 

Projected Passengers 11,008 

Passengers per Departure 5.6 

Projected Average Fare $56.23 

Revenue Passenger Miles (RPMs) 2,165,679 

Available Seat Miles (ASMs) 3,463,780 

Projected Load Factor 62.5% 

Financial Projections 

Revenues 

Passenger Ticket Revenues $618,978 

Ancillary Revenues $15,474 

Total $634,452 

Expenses 

Flight Operations $292,578 

Aircraft Ownership/Lease $324,000 

Fuel & Oil $610,424 

Sales & Marketing $25,000 

Traffic Servicing $421,374 

Insurance $47,876 

Maintenance $521,895 

Sub-Total- Direct $2,243,148 

Indirect $336,472 

Total Expenses $2,579,620 

Projected Operating Profit/(Loss) ($1 ,945, 167) 

Subsidy Calculations 

Operating Loss $1,945,167 

Economic Return @ 5% $128,981 

I Required Subsidy $2,074,1481 

Subsidy per Departure $1,060.27 

Subsidy per Passenger $188.42 

Avg. Enplanements per Operational Day 17.6 

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