### BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, DC

Essential Air Service at SIOUX CITY, IOWA Under 49 U.S.C 941731 etseq. DOT-OST-2011-0131

AMERICAN AIRLINES PROPOSAL TO PROVIDE ESSENTIAL AIR SERVICE AT SIOUX CITY, IOWA
American Airlines, awholly owned subsidiary ofAMR Corporation, respectfully submits its proposal to continue subsidized Essential Air Service to Sioux City, Iowa. American Airlines seeks to continue service from American's hub, Chicago O'Hare International Airport ("ORD") tothe Sioux Gateway Airport ("SUX"), with thirteen weekly roundtrips. The service would be operated by the American Airlines regional brand, American Eagle using 50 seatjet aircraft. American Airlines regional feed isoperated under the American Eagle and American Connection brands. American Airlines customers have access to more than 250 cities, 40 countries and more than 3,400 daily departures. Through our oneworld alliance, customers have access to more than 700 destinations and 140countries. These flights will continue tobe operated with the AA code, pursuant to acodesharing agreement with American Airlines. Additional codes ofthe oneworld carriers are also applied to this route, and would continue to be. The service proposed by American Airlines continues existing service toAmerican's hub, Chicago O'Hare International Airport. At ORD, American, American Connection, andAmerican Eagle offer more than 460 daily departures to over 120destinations, making itone ofthe largest hubs inthe country. This direct access to somany places has helped stimulate traffic from Sioux City with significantly easier connecting options than what had been offered to Sioux City travelers prior to our award ofthe current Essential Air Service bid. Sioux City has performed well under subsidized Essential Air Service since American's EAS subsidy award inApril 2012. Passenger bookings have reflected the industry norms over the course ofour nearly two years operating inthe market. We have made greatprogress in developing air-service in Sioux City, bringing new business and industry to the Siouxland region. Our current bid should reflect ourbelief that the Essential Air Service subsidy isvital, as the market ison atrajectory toone day be self-sustaining.American would like to also request thatthe DOT and Sioux City allow us flexibility in

substituting aBombardier CRJ200 (50 seats) aircraft and Embraer Regional jets when needed for the same rates. Allowing us to substitute 44- or 50-seat RJs will provide usthe flexibility to match supply with demand, aswell asprovide operational flexibility, which will improve reliability. American also requests that the DOT and Sioux City waive the right tohold-in American Airlines service upon issuance of 120days-notice to terminate service. Although we donot foresee this to be anissue andplan to continue developing the Sioux City market, we cannot be operationally constrained and kept inamarket indefinitely, without ability to adapt to changing circumstances. We believe that ourto-date success in Sioux City isdemonstrative ofthe American Airlines network and marketing programs. American Airlines isthe only airline with adedicated Regional Partnerships group that will continue itspromotion ofthebrand and service in Sioux

.City. We look forward to serving the Sioux City area formany years to come and appreciate the community's and the Department ofTransportation's consideration ofcontinued American Airlines service.
Sincerely,

Charles Schubert Vice President American Airlines Network PlanningMarket:

Aircraft Sioux City. IA to Chicago O'Hare

Mileage Annual Deps (Factored) Block per Dep Annual Block Hours (Factored) Completion Percentage Revenues Annual Passengers Avg Fare - Onboard Total Revenues Expenses Flight Operations (incl Fuel) Aircraft Ownership Pax Variable Other Total Expenses Profit I(Loss)
Profit Element (@ 5%) Sullsidy Required 436 1,325 1.25 1,656 98.0%
52,044 $123 $6,410,350
$5,309,727 $306,804 $698,340 $372,447 $6,687,318 ($276,969) $334,366 $611,334 Number of Seats per Dep Annual ASMs (Factored) Annual RPMs (Factored) AnnualLF

Previous Subsidy 50 28,884,128 22,237,391 77.0%

$1,512,799 Subsidy IDeparture Subsidy IPax $461 $11.75 Proposed Schedule Previous IDeparture Previous IPax $1,139 $29.48
Segment SUX-ORD SUX-ORD ORD-SUX ORD-SUX Depart

6:20 14:40 12:30 19:20 Arrive

8:00 16:15 14:00 20:55 Frequency

Daily XJ Daily XJ

• Schedule is shown for illustrative purposes only and American Airlines reserves the right to change without notice.