Sovere ign Mr, Inc, ^^ OF^TR/f POHIATiON 

January 6, 2010 

• V " - '• '-"^ \: 01. 1 

Dennis J. DeVany, Chief 

EAS & Domestic Analysis Division, X-53 

Office of Aviation Analysis 

Department of Transportation 

1200 New Jersey Ave. SE 

Washington, DC 20590 

Re: Proposal to Provide Essential Air Service at: 

Salina, KS (SLN) to Kansas City, MO (MCI) DOT-OST-2002-11376 

Dear Mr. De\/any: 

In response to Order 2009-11-25, Sovereign Air, Inc. offers the foilow/ing proposal: 

Sovereign Air, Inc. (SAI) is planning to use the King Air 350 as its primary aircraft for this Essential Air 

Service route. It will be configured with nine passenger seats and will be expanded to twelve seats as 

needed. The aircraft is type certificated for up to fifteen passenger seats. It will be fitted with a belly 

pod and wing lockers to meet the baggage requirements of the military. Back-up aircraft will include a 

King Air 200 and a Cessna Citation 501SP. SAI is in position to add extra flights as passenger demands 

may require. SAI will also provide extra seats for SLN special events, 

Sovereign Air is proposing the aircraft for the exclusive use (no up-line or down-line service) of the 

proposed EAS route. Our flights will service only the EAS city and the indicated Hub, so that more seats 

are actually available for the communities. Sovereign Air believes that with good schedules, proper 

pricing and a recovering economy, the load factors will likely increase in these markets. SAI will base its 

aircraft, crews and maintenance personnel, banking and purchase all fuel in SLN. This will help keep the 

EAS monies in the Salina community. 

SAI will basically have only a single class fare. SAI's fare structures will be 10% to 20% less than existing 

fares. As the load factor increases to a 60% average, SAI will return a portion of the revenues to the 

community for the economic development of the Salina air transportation service. 

SAI will work closely with the three travel agencies in Salina to develop published through fares as well 

as joint fares with the major air carriers to the primary destinations indicated by the three travel 

agencies. SAI will also develop add-on fares to be used by the agencies for discount air carriers. 

SAI will have baggage and ticket agreements with the major air carriers in Kansas City (MCI). SAI will 

have cargo agreements for both domestic and international air freight movements. SAI will utilize the 

freight terminal at MCI for cargo receiving and dispensing. 

SAI has been HAZMAT approved and will be working in conjunction with hospitals to expedite various 

HAZMAT materials that they need to transport. 
SAI's goal is to work hand-in-hand with SLN to reduce the need for EAS subsidies within the next four to 

six years. 

SAI will work with Kansas State University to develop transportation and training contracts 

Complaints and problems will be handled at the SLN and MCI stations. SAI's station manual includes a 

customer service program with a communications program so that passengers can communicate 

directly with both station and executive management levels. 

Sovereign Air is currently in the process of acquiring its Scheduled Service Authority and anticipates 

being able to start this Essential Air Service by April 1st. 

SAI will file point-to-point as required for military transportation with refundable tickets. These fares 

will not include excessive baggage charges. SAI will lease space at MCI to be used as a holding area for 

military personnel travelling to and from SLN. SAI, in conjunction with SLN, will establish an SOS agreed 

upon government point-to-point fare. 

Sovereign Air will be fully integrated into the Global Distribution System (GDS) in conjunction with 

Worldspan. SAI is not tied to just one airline, allowing Sovereign Air better visibility in the various 

reservation systems. Passengers will have a broad range of channels through which to purchase tickets, 

including all airline reservation systems and travel agencies. Customers will be able to call our 

reservation office or visit our website to book flights. Passengers can also purchase tickets and make 

reservations at our ticket counters. 

SAI's schedules will be developed by the SLN Airport Board and SAI to reduce layover times in MCI and 

provide the best possible arrival and departure times for the travelling public. As such, the following 

schedules will likely be adjusted: 

Proposed Schedule Options 

Option 1 (5RT): 5 round trips daily between SLN and MCI 

SLN Departure MCI Arrival MCI Departure 

6:00 6:30 6:45 

8:00 

12:00 

14:00 

16:00 

8:30 

12:30 

14:30 

16:30 

8:45 

12:45 

14:45 

16:45 

SLN Arrival 

7:15 

9:15 

13:15 

15:15 

17:15 
Option 2 (4RT): 4 round trips daily between SLN and MCI 

SLN Departure MCI Arrival MCI Departure SLN Arrival 

6:00 6:30 6:45 7:15 

8:00 8:30 8:45 9:15 

14:00 14:30 14:45 15:15 

16:00 16:30 16:45 17:15 
Sovereign Air, Inc. Option 1 

Annual Compensation Requirement for Essential Air Service for 

SLN-MCI 5rt daily 

Aircraft Type 

Available Seats Per Departure 

Passengers Per Trip 

Beechcraft 350 

9 

2.8 

Block Hours 2,001 

Departures 3,531 

Total Passengers 

Average Fare 

10,000 

$105.00 

Revenue Passenger Miles 

Available Seat Miles 

1,650,250 

5,244,032 

Passenger Revenue 

Other Rev. @ .6 of pax. Rev. % 

Total Revenue 

Aircraft and Hull Insurance 

Fuel and Oil 

Flying Operations 

Other Direct Costs 

Maintenance 

Total Direct Costs 

$1,050,000.00 

$6,300.00 

$1,056,300.00 

$25,000.00 

$770,302.87 

$182,071.59 

$267,370.86 

$150,059.00 

$1,394,804.31 

Total Indirect Costs 

Total Operating Expenses 

$468,333.78 

$1,863,138.10 

Operating Loss 

Profit @ 5% 

Subsidy per leg 

Load Factor 

Annual Compensation 

Requirement 

Monthly Compensation 

Requirement 

$806,838.10 

$93,156.90 

$899,995.00 

$74,999.58 

$254.90 

31% 
Sovereign Air, Inc. Option 2 

Annual Compensation Requirement for Essential Air Service for 

SLN-MCI 4rt daily 

Aircraft Type 

Available Seats Per Departure 

Passengers Per Trip 

Beechcraft 350 

9 

3.2 

Block Hours 1,601 

Departures 2,825 

Total Passengers 

Average Fare 

9,000 

$95.00 

Revenue Passenger Miles 

Available Seat Miles 

1,485,225 

4,195,226 

Passenger Revenue 

Other Rev. @ .6 of pax. Rev. % 

Total Revenue 

Aircraft and Hull Insurance 

Fuel and Oil 

Flying Operations 

Other Direct Costs 

Maintenance 

Total Direct Costs 

$855,000.00 

$5,130.00 

$860,130.00 

$25,000.00 

$616,242.29 

$145,657.27 

$242,696.69 

$120,047.20 

$1,149,643.45 

Total Indirect Costs $469,554.40 

Total Operating Expenses $1,619,197.85 

Operating Loss 

Profit @ 5% 

Subsidy per leg 

Load Factor 

Annual Compensation 

Requirement 

Monthly Compensation 

Requirement 

$759,067.85 

$80,959.89 

$840,027.74 

$70,002.31 

$297.39 

35% 
Customer safety and service are Priority One with SAI. Sovereign Air looks forward to providing 

Essential Air Service to Salina, Kansas. 

Sincerely, 

Jon Payne, CFO 

Sovereign Air, Inc.