BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, DC

Essential Air Service at

SIOUX CITY, IOWA

Under 49 U.S.C 941731 et seq.

DOT-OST-2011-0131

AMERICAN AIRLINES PROPOSAL TO PROVIDE ESSENTIAL AIR SERVICE AT

SIOUX CITY, IOWA

American Airlines, a wholly owned subsidiary of AMR 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")

to the Sioux Gateway Airport ("SUX"), with thirteen weekly roundtrips. The service would be

operated by the American Airlines regional brand, American Eagle using 50 seat jet aircraft.

American Airlines regional feed is operated 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 140 countries. These flights will continue to be operated with the AA code,

pursuant to a codesharing agreement with American Airlines. Additional codes of the oneworld

carriers are also applied to this route, and would continue to be.

The service proposed by American Airlines continues existing service to American's hub,

Chicago O'Hare International Airport. At ORD, American, American Connection, and American

Eagle offer more than 460 daily departures to over 120 destinations, making it one of the largest

hubs in the country. This direct access to so many 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 of the current Essential Air Service bid.

Sioux City has performed well under subsidized Essential Air Service since American's EAS

subsidy award in April 2012. Passenger bookings have reflected the industry norms over the

course of our nearly two years operating in the market. We have made great progress in

developing air-service in Sioux City, bringing new business and industry to the Siouxland

region. Our current bid should reflect our belief that the Essential Air Service subsidy is vital, as

the market is on a traj ectory to one day be self-sustaining.
American would like to also request that the DOT and Sioux City allow us flexibility in

substituting a Bombardier 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 us the flexibility to

match supply with demand, as well as provide operational flexibility, which will improve

reliability. American also requests that the DOT and Sioux City waive the right to hold-in

American Airlines service upon issuance of 120 days-notice to terminate service. Although we

do not foresee this to be an issue and plan to continue developing the Sioux City market, we

cannot be operationally constrained and kept in a market indefinitely, without ability to adapt to

changing circumstances.

We believe that our to-date success in Sioux City is demonstrative of the American Airlines

network and marketing programs. American Airlines is the only airline with a dedicated

Regional Partnerships group that will continue its promotion of the brand and service in Sioux

. City.

We look forward to serving the Sioux City area for many years to come and appreciate the

community's and the Department of Transportation's consideration of continued American

Airlines service.

Sincerely,

Charles Schubert

Vice President

American Airlines Network Planning
Market:

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 I Departure

Subsidy I Pax

$461

$11.75

Proposed Schedule

Previous I Departure

Previous I Pax

$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.