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 based
San 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

Ogdensburg Saranac Lake

Massena

White Plains

Albany

Manhattan

Rockland

Bar Harbor

Boston

Cape Air Routes

June 2014

Ft. Leonard Wood

Cape Girardeau

Quincy Kirksville

St. Louis

Marion Owensboro

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: 

Have

A

Good

Time

Doing

It!

Make

Our

Customers

Happy,

And

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!

Predecessor

Cape 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

25,000

Nov-09

Feb-10

May-10

Aug-10

Nov-10

Feb-11

May-11

Aug-11

Nov-11

Feb-12

May-12

Aug-12

Nov-12

Feb-13

May-13

Aug-13

Nov-13

Feb-14

May-14

New York

Boston

Estimated 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 world
Note: 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

1Washington-National, DC 25 Dallas/Fort Worth, TX

2Orlando, FL 26 Houston-Hobby, TX

3Fort Myers, FL 27 Jacksonville, FL

4Fort Lauderdale, FL 28 Charlotte-Douglas, NC

5 New York-JFK, NY 29Aruba, AW

6West Palm Beach, FL 30 Cancun, MX

7Tampa, FL 31St. Thomas, VI

8Philadelphia, PA 32 Nassau, BS

9San Juan, PR 33Phoenix, AZ

10 Newark, NJ 34Sarasota/Bradenton, FL

11 Raleigh/Durham, NC 35Santo Domingo, DO

12San Francisco, CA 36 Charleston, SC

13Baltimore, MD 37San Jose, CA

14 Los Angeles, CA 38Austin, TX

15Washington-Dulles, VA 39 New Orleans, LA

16Pittsburgh, PA 40Savannah, GA

17Buffalo, NY 41 Long Beach, CA

18 Detroit, MI 42Punta Cana, DO

19 Chicago-O'Hare, IL 43 Montego Bay, JM

20 Richmond, VA 44Santiago, DO

21 Denver, CO 45St. Maarten, SX

22 Las Vegas, NV 46Providenciales, TC

23San Diego, CA 47 Grand Cayman Island

24Seattle/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 1 Year 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