January 21, 2011 Proposal of Hyannis Air Service, Inc. dba “Cape Air” to provide subsidized Essential Air Service for: 

# Mayaguez, Puerto Rico DOCKET DOT- OST-2004 - 19622 

### Four daily non - stop flights to/from San Juan International Airport With ------------------------- codeshare Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 (508) 862 - 9719 Please direct media inquires to Leslie Myrbeck, director of community relations, at 508 - 862 - 97641 

# 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  Presently flying 62 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 )2 

# For smaller communities and niche markets, Cape Air’s nine - seat planes have proven to be a good fit  High -frequency, non -stop service  codeshare at Mayaguez  Interline e -ticketing and baggage agreements with most other major airlines  Complete GDS sales channels:  866 - Cape -Air  In - house “Sabre” reservations office  Reliability  MOCHA HAGoTDI † culture and community investment Cape Air highlights Ready for the next flight from Mayaguez to San Juan

† Make Our Customers Happy And Have A Good Time Doing It3 

# Cape Air began service in 1989 with three aircraft...4 

# ...And one route: Boston – Provincetown

Provincetown Boston Original Cape Air route map

November 1989 schedule5 

# 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

January 2011 route map White Plains Providence AugustaMidwest Illinois

Missouri Cape Girardeau Marion Quincy St. Louis Ft. Leonard Wood 6 

# ...And has developed niches along the East Coast, in the Caribbean, Midwest and Micronesia
Florida Keys Ft. Myers

Key West Florida Mid -Atlantic

Jan. 2011 route maps; Maps not to scale Kirksville Caribbean
Ponce Mayaguez San Juan Vieques St. Croix St. Thomas Tortola Anguilla Micronesia

Guam Rota Saipan7 

# Cape Air has been an interline carrier since 1993 enabling connectivity with most major airlines

• 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 • Flights in the Caribbean have a code • Five Boston routes have a code, and in the Caribbean JetBlue and Cape Air interline • Flights in the Midwest operate with the code of Interline highlights8 

# Participation in the global distribution system gives Mayaguez access to the world, and the world access to Mayaguez Cape Air is sold through:9 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!

# Cape Air’s proposal includes a city ticket office in Mayaguez 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 friendly Cape Air agents
• 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 10 City ticket office highlights A typical city ticket office

# Cape Air has built its business over 20 years by providing reliable service for communities like Mayaguez

11 

# Planes and pilots based in Mayaguez Full service Cape Air maintenance base in San Juan Spare aircraft located in San Juan Factors in reliability12 

# The key to Cape Air’s success, however, is our friendly people Daffodil “Daffy” Day at Cape Air reservations

# Cape Air proposes a 5 -year term to position Cape Air for more investment in marketing and community relations, as well as to enhance stability and consistency

• Locks in reliable air service • Provides stability and the ability to plan for both the Mayaguez and Cape Air • Enables Cape Air to invest more in the community

– Robust marketing campaign

– City ticket office

– Employee domicile • Reduces the cost of service due to Cape Air’s ability to secure less expensive longer-term contracts 13 Key reasons for a 5-year term Cape Air’s Mayaguez crew

# Cape Air proposes continued EAS at Mayaguez for a two -year term, but also proposes and prefers a five -year term

14 Daily Round Trips 4.0 Stage (naut. miles) 66 Seats per Dpt 9 Annual Sched. Dpts 2,920 Completion Rate 97% Annual Actual Dpts 2,832 Load Factor 45% Annual Passengers 11,746 PDEW 16 Avg. Net Fare $52.70 Passenger Rev. $600,469 Expenses Drivers Fuel $494,254 Maintenance $401,128 Pilots $205,897 Ownership $66,230 Rents $11,324 Staff $153,615 Landing Fees $112,719 Customer Service $130,211 Marketing $43,800 General & Admin./Other $118,743 Operating expense $1,737,922 Return of 5% $91,470 Economic Expense $1,829,391 Passenger Revenue $600,469 Profit ($1,228,923) Annual Subsidy Required--2 year term $1,228,923 Per Departure $434 Annual rate with 5-year term discount $1,198,824 Per Departure $42315 

# Cape Air would be honored to continue serving Mayaguez  Four daily flights to San Juan International Airport  Spare aircraft in the region helps ensure a reliable operation  Codeshare with plus interline connections with most major airlines  A healthy, strong, independent airline that cares passionately about serving communities Summary


## Cape Air is a great choice for Mayaguez Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 (508) 862 - 9719 Please direct media inquires to Leslie Myrbeck, director of community relations, at 508 - 862 - 9764

## Appendix 

# Interline Examples on Online Travel Agencies17 

# Cape Air is on Expedia.com Screenshot from Expedia.com showing Cape Air LNS- PHX search for travel 22SEP0918 

# Cape Air is on Travelocity.com Screenshot from Travelocity.com showing Cape Air ATL- MAZ search for travel 22SEP0919 

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