September 13, 2011

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

Owensboro, Kentucky

DOCKET DOT-OST-2000-7855

Three daily non-stop flights to/from Lambert - St. Louis International Airport

With --------------------------- codeshare expected

Hyannis Air Service, Inc., dba Cape Air

Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 

(508) 862-9719
1

Cape Air is a small but robust commuter airline, 

operating and growing since 1989

 First route was Boston –

Provincetown, begun in October 1989 with 

one aircraft

 64 Cessna 402s in five regions, and two 

ATR-42s in Micronesia

 Operating up to 600 flights daily

 In 2010 flew almost 650,000 passengers

 Stable, mature and growing company 

Key facts Cape Air: Leading the pack nine at a time

Photo courtesy Mark Garfinkel (August 7, 2000, Boston)
Cape Air 2011

• Cape Air is flying toward our fourth consecutive 

profitable year

• 2011 revenue will approach $100M 

• Cape Air has purchased six more 

Cessnas, which will bring the fleet total to 70

• 39 airports served (16 in EAS) in six regions

– Northeast/New England

– Caribbean

– Florida

– Mid-Atlantic

– Midwest

– Micronesia 2

Captain Krista Poppe

Hyannis based
3

For smaller communities and niche markets, 

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

 High-frequency, non-stop service

 branded service at St. Louis

 Interline e-ticketing and baggage agreements

 Complete GDS sales channels:

 866-Cape-Air

 In-house Sabre reservations office

 Reliability thanks to spare aircraft availability

 MOCHA HAGoTDI† culture and community 

investment

Cape Air highlights “Key West Express”

† Make Our Customers Happy And Have A Good Time Doing It
4

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
5

Cape Air began service in 1989 with three aircraft...
6

...And one route: Boston – Provincetown 

Provincetown

Boston

Original Cape Air route map

November 1989 schedule
7

Today, Cape Air serves 17 communities in the Northeast...

Northeast route map

Nantucket

Martha’s Vineyard

Provincetown

Boston

Hyannis New Bedford

Rockland

Lebanon

Saranac Lake

Rutland

Albany

Watertown

Ogdensburg

Massena

September 2011 route map

White Plains

Providence

Augusta
Midwest

Illinois

Missouri Cape Girardeau

Marion

Quincy

St. Louis

Ft. Leonard Wood

8

...And has developed niches along the East Coast, 

in the Caribbean, Midwest and Micronesia

Florida Keys

Ft. Myers

Key West

Florida

Mid-Atlantic

September 2011 route maps; Maps not to scale

Kirksville

Caribbean

Ponce

Mayaguez

San Juan

Vieques

St. Croix

St. Thomas

Tortola

Anguilla

Micronesia

Guam

Rota

Saipan
9

The Cessna 402 is the workhorse of Cape Air’s fleet
10

Cape Air has been an interline carrier since 1993

enabling connectivity with most major airlines

• Interline agreements are in place with all US legacy airlines

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

• Cape Air operates flights in Micronesia as

• Flights in the Caribbean have a code 

• Cape Air is one of the only airlines that can interline with 

• Flights in the Midwest operate with the code of 

Interline highlights
11

Participation in the global distribution system gives Cape Air’s 

communities access to the world

Cape Air is sold through:
12

Cape Air’s Telephone Reservations Center

Cape Air has had its own reservations center, using the 

industry-standard , system, for more than 15 years

Toll free reservations: 866-CAPE-AIR

Never a booking fee!
13

The key to Cape Air’s success is our friendly people...

Daffodil “Daffy” Day at Cape Air reservations
14

...And our mantra: 

Have

A

Good

Time

Doing

It!

Make

Our

Customers

Happy,

And

Cape Air celebrates Valentine’s Day in the Caribbean
Cape Air’s St. Louis service began operations on 

November 8, 2009 

15

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
Cape Air’s St. Louis operation now includes five EAS cities, 

eight aircraft and up to 54 flights per day

16

Cape Air’s St. Louis route map

As of September 2011
In each community Cape Air serves from 

St. Louis, ridership has increased dramatically

17

Passenger enplanements

Year-ending

Data source: US DOT T100 database

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Feb-08

Apr-08

Jun-08Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

Predecessors
July ridership in same-store markets was up 37%

18

0 

500 

1,000 

1,500 

2,000 

2,500 

3,000 

3,500 

4,000 

4,500 

5,000 

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Cape Girardeau

Marion

Quincy

St. Louis passengers

+37%
The popularity of Cape Air’s St. Louis service is due to 

complex, inter-related contributions

by Cape Air and our community partners

Low fares: $49

Reliable service

Convenient 

schedule: Three 

daily flights at 

Owensboro

Interline ability 

with all network 

carriers at St. 

Louis

Codeshare with

Fully-functioning 

global 

distribution

Community 

partnership

19

Popular 

service
St. Louis has 1,591 weekly departures to 59 non-stop 

destinations—including all the major markets

20

Non-stop St. Louis service—September 2011

Source: OAG
In addition to interline ability with all network carriers at St. 

Louis, Cape Air’s service is codeshared with American Airlines

21

Codeshare partners: American Airlines and Cape Air

Photo source: Jim Schnobrich; Used with permission
Connecting itineraries are sold on

-------------------- website 

22
St. Louis’s Concourse C was closed due to tornado 

damage, so Cape Air and American temporarily relocated 

to Concourse D

23

Cape Air
Cape Air interlines checked luggage at Lambert-St. Louis with:

American, Continental, Delta, Frontier, United and US Airways

24

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

Cape Air’s 

interline bag cart

at St. Louis 
By year end we expect to have a ramp-side inter-terminal 

shuttle, facilitating seamless connections between 

terminals at St. Louis, without having to re-clear security

25

No more TSA rescreening to connect between terminals!

St. Louis terminal shuttle
Cape Air has built its business over 20 years by providing 

reliable service for communities like Owensboro

26

Planes and pilots based 

in Owensboro

Full service Cape Air 

maintenance base in 

St. Louis

Spare aircraft located in 

St. Louis

Factors in reliability
Cape Air’s proposal includes a city ticket office in 

Owensboro to enhance airline and airport awareness

• Increases the visibility of the airport and air 

service within the community

• Provides a welcoming place for people to learn 

about the air service from a friendly Cape Air 

agent

• Enables the redemption of targeted 

promotions, providing wide latitude in 

marketing the air service

• Enhances the central business district with a 

vibrant new retail space

27

City ticket office highlights

A typical city ticket office
Owensboro has the chance to 

partner with a prospering airline: Cape Air

• Total company revenue increased 11% in 2010

• Cape Air is consistently profitable

– Stable

– Investing in quality

– Engaged in our communities

• High frequency enabled by “right-sized” planes

• Unmatched commuter airline expertise

28

Cape Air corporate strengths Right plane at the right time
Notional Owensboro – St. Louis schedule

Depart

Owensboro

Arrive

St. Louis

Depart 

St. Louis

Arrive

Owensboro

6:00 AM 7:10 AM 10:35 AM 11:48 AM

12:10 PM 1:20 PM 3:02 PM 4:15 PM

5:10 PM 6:20 PM 5:32 PM 6:45 PM

29

Draft schedule only

Actual schedule will be developed collaboratively with the community
To promote ridership the fare each way will be $49

• The $49 price includes all taxes and fees

• Fare is valid on all seats on all Owensboro flights

• No advance purchase is required

• Commuter books (a 10-pack of tickets) will be available for $469, equal to $46.90 per ticket

– Good for any seat on any flight

– No black-out dates

– No advance purchase required

– Virtually no restrictions

• Simplified pricing makes marketing Owensboro’s air service easier

30

Simple fare structure 
Cape Air proposes three daily round trips between 

Owensboro and St. Louis at an annual subsidy of $1.8M

31

Drivers

Economics

Daily RTs 3.0

Pax/Dpt 4.3

LF 48%

Fare (net) $41.00 

Pax Rev/Dpt $177 

Annual Actual Dpts 2,124

Annual Pax 9,177

Fuel $649,390 

Maintenance $619,812 

Pilots $273,661 

Ownership $156,855 

Rents $21,180 

Staff $94,340 

Landing Fees $95,634 

Marketing $47,127 

Customer Svc. $74,245 

General & Admin./Other $63,396 

Operating expense $2,095,640 

Return of 5% $110,297 

Economic Expense $2,205,936 

Passenger Revenue $376,256

Profit ($1,829,680)

Proposed Subsidy $1,829,680

Per Departure $861

Discount for 4-year term

Proposed Subsidy $1,784,898

Per Departure $840
32

Cape Air would be honored to serve Owensboro

 Three daily flights to St. Louis at a fare of only $49 each way

 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 

Owensboro

Hyannis Air Service, Inc., dba Cape Air

Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 

(508) 862-9719
33

Thank you!
Appendix

Interline Examples on Online Travel Agencies
35

Cape Air is on Expedia.com

Screenshot from Expedia.com showing Cape Air 

LNS-PHX search for travel 22SEP09
36

Cape Air is on Travelocity.com

Screenshot from Travelocity.com showing Cape Air 

ATL-MAZ search for travel 22SEP09
37

Cape Air is on Orbitz.com

Screenshot from Orbitz.com showing Cape Air 

ART-DCA search for travel 22SEP09