## June 30, 2014 Proposal of Hyannis Air Service, Inc., dba Cape Air to provide subsidized Essential Air Service for :



# Lebanon, NH

Docket DOT

- OST

- 2003

- 14822



# To/From Boston and New York City via White Plains

For a two

- or four

- year term

Hyannis Air Service, Inc., dba Cape Air

Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 ( 508) 862

- 9719

## 1 

# Cape Air has grown from a single aircraft and route in 1989

to America’s largest commuter airline today

 First route was Boston

– Provincetown,

begun in October 1989 with one aircraft

 Today’s fleet

 76 Cessna 402s in four regions

 Three Britten

- Norman Islanders

 Two ATR

- 42s in Micronesia

 Operating up to 550 flights daily

 In 2013 flew 728,000 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 2014

• Annual revenue of $120M

• Financially stable

• 44 airports served, 20 in EAS

• 83 aircraft

2

Captain Krista Poppe

Augusta basedSan Juan

Mayaguez

St. Croix Vieques Tortola St. Thomas

Anguilla

Nevis Virgin Gorda Culebra Provincetown Hyannis

Nantucket Providence

New Bedford Martha’s Vineyard Augusta

Lebanon Rutland Saranac Lake Ogdensburg Massena

White Plains Albany

Manhattan Rockland Bar Harbor

Boston



# Cape Air Routes

June 2014 Ft. Leonard Wood

Cape Girardeau Quincy Kirksville

St. Louis

Owensboro Marion Havre Glasgow

Wolf Point

Sidney

Glendive

Billings

Map inset not to scale Rota Saipan

Guam 

## Micronesia Denotes seasonal service 

# Proud to be America’s

finest commuter airline!

Block Island

# One of Cape Air’s best features is interline connections

with all of the legacy airlines plus JetBlue,

giving the Upper Valley access to the world

4

# Itineraries connecting between Cape Air and United are

available on united.com

5

# At joint cities Cape Air’s connecting destinations

appear on jetblue.com

6

# Through Expedia and other OTAs, Cape Air connects EAS

communities with most network airlines

7

## 8 

# Over more than 20 years in business 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

# Cape Air proposes continued service

with our fleet of 76 Cessna 402s

9

# Cape Air takes environmental sustainability seriously by

investing in fuel

- saving aircraft technologies and

powering its offices with solar panels

10

## 11 Cape Air’s Reservations Call Center 

# Cape Air has its own internal reservations center

800

- CAPE

- AIR

(Where there is never a booking fee!)

## 12 

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

Daffodil “Daffy” Day at Cape Air Reservations

## 13 

# ...And our mantra:

H ave

A

Go od

T ime

D oing

I t! M ake

O ur

C ustomers

H appy,

A nd Cape Air celebrates Valentine’s Day in the Caribbean

# LEBANON, NH Community Air Service for

14

# Cape Air has had the privilege of serving

Lebanon Municipal Airport since November 2008

15 Cape Air’s ceremonial ribbon cutting at Lebanon Municipal Airport

November 12, 2008

# Cape Air was invited to serve Lebanon with the explicit

mandate to enplane more than 10,000 passengers

16 2,014 5,671 7,464 8,903 9,569 9,355

8,079

5,958 7,680 9,035 10,092 10,172

0 2,000 4,000 6,000 8,000 10,000 12,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Modern high ridership!



# MANDATE FULFILLED! PredecessorCape Air started Nov 2008 

## Lebanon enplanements

Source: US DOT T100 >10,000 enplanements = Primary service airport

# Cape Air at Lebanon provides both hub service at Boston

and New York City access via White Plains

17 Lebanon passengers

Year ending (sum of both directions)



## 0 5,000 10,000 15,000 20,000 25,000Nov-09Feb-10May-10Aug-10Nov-10Feb-11May-11Aug-11Nov-11Feb-12May-12Aug-12Nov-12Feb-13May-13Aug-13Nov-13Feb-14May-14 

## New York

BostonEstimated Jun14 

# 20,816

## 18 At Lebanon Airport, skip TSA screening

Fly 1:19 to White Plains

Arrive at our private VIP terminal

Complimentary ground transportation to Manhattan

ensures stress

- free connections

Arrive Midtown at 35th St. and 8th Ave. near Penn Station 

# Cape Air offers the Upper Valley easy access to New York City

How it works

# Cape Air provides an integrated ground transportation link

between Manhattan and White Plains flights to/from Lebanon

19 Lebanon’s exclusive van for service “the last mile” to/from Manhattan

# Access Boston for connections to the world

20 

# For Upper Valley travelers going beyond New York or

Boston, Logan Airport offers access to the worldNote: Includes Seasonal Service, Source: OAG & Innovata Schedules 

# Boston Logan has Nonstop

Domestic Service to 74 Destinations

# Boston Logan has Nonstop

International Service to 39 Destinations

Note: Includes Seasonal Service, Source: OAG & Innovata Schedules

# For connecting passengers, Lebanon is on jetblue.com;

JetBlue is Boston’s largest airline with 47 non

- stop

destinations

— and growing

23 1 Washington

- National, DC 25 Dallas/Fort Worth, TX

2 Orlando, FL 26 Houston

- Hobby, TX

3 Fort Myers, FL 27 Jacksonville, FL

4 Fort Lauderdale, FL 28 Charlotte

- Douglas, NC

5 New York

- JFK, NY 29 Aruba, AW

6 West Palm Beach, FL 30 Cancun, MX

7 Tampa, FL 31 St. Thomas, VI

8 Philadelphia, PA 32 Nassau, BS

9 San Juan, PR 33 Phoenix, AZ

10 Newark, NJ 34 Sarasota/Bradenton, FL

11 Raleigh/Durham, NC 35 Santo Domingo, DO

12 San Francisco, CA 36 Charleston, SC

13 Baltimore, MD 37 San Jose, CA

14 Los Angeles, CA 38 Austin, TX

15 Washington

- Dulles, VA 39 New Orleans, LA

16 Pittsburgh, PA 40 Savannah, GA

17 Buffalo, NY 41 Long Beach, CA

18 Detroit, MI 42 Punta Cana, DO

19 Chicago

- O'Hare, IL 43 Montego Bay, JM

20 Richmond, VA 44 Santiago, DO

21 Denver, CO 45 St. Maarten, SX

22 Las Vegas, NV 46 Providenciales, TC

23 San Diego, CA 47 Grand Cayman Island

24 Seattle/Tacoma, WA 

## JetBlue’s Boston non

- stop destinations

April 2014 OAG 

## Lebanon featured on jetblue.com

# MARKETING Lebanon Municipal Airport

24

# Cape Air has been an active advertiser in the Upper Valley,

spreading the word about “Why Fly LEB”

# Cape Air loves participating in and hosting

special community events!

# PROPOSAL Essential Air Service

27

# Cape Air proposes continued service at Lebanon

4x daily to/from Boston and

2x daily to/from New York City via White Plains

BOS

- LEB LEB

- HPN

Stage (naut. miles) 97 164

Seats per Dpt 9 9

Sched. RTs/Day 4.0 2.0

Annual Actual Dpts 2,832 1,416

PDEW 18.9 10.1

Pax/Dpt 4.9 5.2

Load Factor 54% 58%

Annual Passengers 13,765 7,406

Avg. Net Fare $54 $109

Passenger Rev $746,945 $810,063



## 28 BOS

- LEB LEB

- HPN

Fuel $623,657 $501,706

Maintenance $705,116 $549,605

Pilots $170,185 $137,908

Ownership $152,249 $123,374

Stations $575,308 $319,357

Marketing $44,674 $22,337

De

- icing $14,650 $7,325

General & Admin./Other $95,662 $326,961

Operating Expense $2,381,501 $1,988,575

Return of 5% $125,342 $104,662

Economic Expense $2,506,843 $2,093,236

Passenger Revenue $746,945 $810,063

Profit ($1,759,898) ($1,283,173)

Subsidy Required $1,759,898 $1,283,173

Per Departure $621 $906

Per Passenger $128 $173

4

- Year discount

Subsidy Required $1,719,211 $1,253,507

Per Departure $607 $885

Per Passenger $125 $169 4

- year option

preferred 

## Economics

— Year 1 (see notes)Year 1Year 1 

## Drivers

Notes:

• For stability and planning Cape Air proposes a discounted four

- year reselection

• See next page regarding annual escalation factor

• Cape Air’s proposal includes both BOS and NYC routes

# To align revenue with costs over time

Cape Air proposes a 4% annual escalation factor

29 Annual proposed subsidy including escalation



# Two

- year reselection BOS

- LEB LEB

- HPN

Year 1 $1,759,898 $1,283,173

Year 2 $1,830,294 $1,334,500

Four

- year reselection

Year 1 $1,719,211 $1,253,507

Year 2 $1,787,979 $1,303,648

Year 3 $1,859,499 $1,355,793

Year 4 $1,933,879 $1,410,025

## 30 

# Cape Air is proud to connect the Upper Valley with the world

and provide special access to New York City

 Full interline connectivity at Boston, allowing same

- ticket connections with the world on most

major airlines including

 High

- frequency, non

- stop service to Boston: 4x daily at a low fare

 The Upper Valley’s best access to New York City

 Midtown Manhattan in 2 1⁄2 hours!

 Attractive fares and seamless service

 Demonstrable success growing enplanements at Lebanon Municipal Airport Cape Air offers the airline amenities the Upper Valley needs:

Thank you for inviting Cape Air to serve

Lebanon Municipal Airport

## 31 

# Thank you!

Hyannis Air Service, Inc., dba Cape Air

Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 ( 508) 862

- 9719