July 14, 2010

Proposal of Hyannis Air Service, Inc. dba Cape Air to provide subsidized Essential Air Service for

Massena, Ogdensburg and Watertown, NY

To/From 

Albany and/or Boston

Docket DOT-OST-1997-2842 

Hyannis Air Service, Inc., dba Cape Air

Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 

(508) 862-9719

Media inquiries to Charles Ferrara, VP Corporate Affairs: 617-567-3597
Cape Air is delighted to have served 

Massena, Ogdensburg and Watertown for almost two years

• Cape Air started serving Massena, Ogdensburg 

and Watertown on September 16, 2008

• Since then we have flown thousands of 

passengers (through May 2010):

– Massena: 10,572

– Ogdensburg: 6,738

– Watertown: 7,997

• Cape Air serves each community non-stop to 

Albany, three times daily

• As promised, Cape Air has kept fares low:

– Massena: $58

– Ogdensburg: $57

– Watertown: $64

1

Overview

Albany

Watertown

Ogdensburg

Massena

Cape Air’s North Country route map
Cape Air is carrying more than 6,000 passengers annually 

at Massena; Watertown and Ogdensburg traffic is growing

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10

MSS

ART

OGS

2

Passengers served in the year ending...

Sum of both directions
3

Cape Air is a small but robust commuter airline, 

operating and growing since 1989

 First route was Boston –

Provincetown, begun in October 1989 with 

three aircraft

 Presently flying 59 Cessna 402s in five 

regions, and two ATR-42s in Micronesia

 Operating up to 570 flights daily

 In 2009 flew more than 610,000 

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)
4

For smaller communities and niche markets, 

Cape Air’s nine-seat planes have proven to be a good fit

 High-frequency, non-stop service

 Interline eticketing and baggage agreements

 Complete GDS sales channels

 Reliability

 Subsidies used to lower fares

 MOCHA HAGoTDI† culture and community 

investment

Cape Air highlights “Key West Express”

† Make Our Customers Happy And Have A Good Time Doing It
5

Cape Air has been an interline carrier since 1993

enabling connectivity with most major airlines,

now including ______ 

• Twenty-five interline agreements are in place, with almost all legacy airlines

• Cape Air has completed migration to interline e-ticketing, the updated industry norm 

• Cape Air operates flights in Micronesia as

• Flights in the Caribbean have a code 

• Five Boston routes have a code, and Cape Air can interline with JetBlue

• Flights in the Midwest operate with the code of 

Interline highlights
6

Cape Air is embedded

in the global distribution systems (GDS)

Cape Air is sold through:
7

Cape Air’s Telephone Reservations Center

Cape Air has had its own reservations center, using the 

industry-standard , system, for more than 15 years

Toll free reservations: 866-CAPE-AIR

Never a booking fee!
Cape Air’s independence offers numerous benefits

• Complete control of:

– Fares

– Marketing and advertising

– Community sponsorships

– Schedule

• Direct relationships with the decision makers 

at Cape Air

• Independent reservations center: 

– 866-Cape-Air

– Capeair.com

• No fees to book tickets with a live Cape Air 

reservations agent or at the counter

• No first checked bag fee; no change fees

• Financially strong airline

• Aircraft isolated on routes to provide reliability

– Good availability of spare aircraft

• Same connectivity as a network affiliate, since 

Cape Air has e-ticket and baggage 

agreements with most major airlines

8

Benefits of independence
To enhance connectivity, Cape Air proposes an option for 

“through” service to Boston, via Albany

• Each flight would operate non-stop to 

Albany, then continue on to Boston on a 

combined “funnel” flight

– Retains the intra-state link with Albany

• In distribution systems the service will show as 

a one-stop “direct” flight with a single through 

flight number

– As a practical matter, the service is an 

exquisitely timed Cape Air connection

• Provides access to Boston’s world-class hub 

and major metropolitan area

9

Through service to Boston highlights

Massena

Ogdensburg

Watertown

Albany

Boston

Through service to Boston map

The incremental subsidy to add Boston is 

modest compared with the benefit to the 

communities, and the per-passenger 

subsidy markedly decreases
Albany has service to 25 non-stop destinations, but...

10

Destination Wkly Dpts

1 Chicago-O'Hare, IL 41

2 Baltimore, MD 40

3 Philadelphia, PA 35

4 Detroit, MI 31

5 Newark, NJ 28

6 Washington-Dulles, VA 27

7 Cleveland, OH 23

8 Watertown, NY 21

9 Charlotte-Douglas, NC 21

10 Massena, NY 21

11 Ogdensburg, NY 21

12 Atlanta, GA 20

13 Washington-National, DC 20

14 New York-La Guardia, NY 18

15 Toronto, ON, CA 18

16 Orlando, FL 14

17 Chicago-Midway, IL 14

18 Boston, MA 12

19 Cincinnati, OH 7

20 Fort Lauderdale, FL 7

21 New York-JFK, NY 7

22 Las Vegas, NV 7

23 Minneapolis/St. Paul, MN 7

24 Tampa, FL 7

25 Buffalo, NY 6

Total 473

Albany route map

Source: OAG June 2010

Albany destinations served
...Boston has service to 95 non-stop destinations, including 25 

international destinations and comprehensive transcon service

11

Rank Destination Wkly Dpts Rank Destination Wkly Dpts Rank Destination Wkly Dpts Rank Destination Wkly Dpts

1 New York-La Guardia, NY 228 25 Buffalo, NY 42 49 Memphis, TN 20 73 Santo Domingo, DO 8

2 Washington-National, DC 176 26 Miami, FL 42 50 Augusta, ME 19 74 Austin, TX 7

3 Chicago-O'Hare, IL 147 27 Minneapolis/St. Paul, MN 39 51 Paris-De Gaulle, FR 19 75 Dublin, IE 7

4 New York-JFK, NY 142 28 Montreal-PET, QC, CA 39 52 Presque Isle, ME 19 76 Rome-Da Vinci, IT 7

5 Baltimore, MD 137 29 Lebanon, NH 38 53 Syracuse, NY 19 77 Jacksonville, FL 7

6 Atlanta, GA 113 30 Houston-Intercontinental, TX 36 54 Columbus, OH 18 78 New Orleans, LA 7

7 Philadelphia, PA 103 31 Fort Lauderdale, FL 34 55 Rochester, NY 17 79 Munich, DE 7

8 Washington-Dulles, VA 96 32 Chicago-Midway, IL 34 56 Ottawa, ON, CA 17 80 Portland, OR 7

9 Nantucket, MA 94 33 Toronto-City, ON, CA 31 57 Bermuda, BM 14 81 San Jose, CA 7

10 Charlotte-Douglas, NC 83 34 Richmond, VA 29 58 Las Vegas, NV 14 82 Zurich, CH 7

11 Martha's Vineyard, MA 75 35 Rockland, ME 28 59 Newport News, VA 14 83 Kansas City, MO 6

12 San Francisco, CA 73 36 Cleveland, OH 26 60 Fort Myers, FL 14 84 Myrtle Beach, SC 6

13 Raleigh/Durham, NC 72 37 Cincinnati, OH 25 61 St. Louis, MO 14 85 Aruba, AW 4

14 Toronto, ON, CA 71 38 Indianapolis, IN 25 62 Atlantic City, NJ 13 86 Cancun, MX 4

15 Newark, NJ 70 39 West Palm Beach, FL 24 63 Bar Harbor, ME 13 87 Madrid, ES 4

16 Los Angeles, CA 69 40 San Juan, PR 24 64 Akron/Canton, OH 13 88 Shannon, IE 4

17 Provincetown, MA 61 41 Hyannis, MA 21 65 Frankfurt, DE 13 89 Oakland, CA 3

18 Dallas/Fort Worth, TX 58 42 Plattsburgh, NY 21 66 San Diego, CA 13 90 Ponta Delgada, PT 3

19 Denver, CO 56 43 Phoenix, AZ 21 67 Salt Lake City, UT 13 91 Montego Bay, JM 2

20 Orlando, FL 52 44 Rutland, VT 21 68 Albany, NY 12 92 Praia, CV 2

21 London-Heathrow, EN, GB 49 45 Seattle/Tacoma, WA 21 69 Long Beach, CA 12 93 Lisbon, PT 1

22 Detroit, MI 48 46 Saranac Lake, NY 21 70 Harrisburg, PA 11 94 Punta Cana, DO 1

23 Milwaukee, WI 45 47 Tampa, FL 21 71 Amsterdam, NL 10 95 Terceira, PT 1

24 Pittsburgh, PA 45 48 Halifax, NS, CA 21 72 Reykjavik, IS 10 Total 3,310

Shading denotes international

Boston destinations served

Source: OAG June 2010
Cape Air proposes three service options for two-year 

selection periods, but also offers DOT savings if the 

selection is for four years

Option Description

1 Each community served 3x daily to Albany (status quo)

2 MSS and OGS only to Albany only, 3x daily

3 Two or three of the communities 

served 3x daily to Boston via Albany

12

Cape Air prefers a four-year selection, which provides a 

slight savings to DOT and a better return on marketing and 

community investment, making both more attractive

Preferred
Option 1

3x daily each to Albany

13

To/From Albany Only

ART MSS OGS

Daily RTs 3 3 3

Pax/Dpt 2.8 3.0 2.6

LF 31% 33% 29%

Fare (net) $59.00 $58.00 $57.00

Rev/Dpt $165 $172 $149

ART MSS OGS

Fuel $422,205 $471,993 $485,934

Maintenance $411,583 $459,380 $475,312

Pilots $156,436 $156,436 $156,436

Ownership $87,690 $87,690 $87,690

Stations $460,757 $438,832 $410,243

Operating fees $39,661 $18,309 $18,309

Marketing $32,850 $32,850 $32,850

General & Admin./Other $123,889 $125,891 $121,327

Operating expense $1,735,071 $1,791,381 $1,788,100

Return of 5% $91,320 $94,283 $94,111

Economic Expense $1,826,390 $1,885,664 $1,882,210

Revenue $349,681 $365,932 $316,032

Profit ($1,476,709) ($1,519,732) ($1,566,178)

Subsidy Required $1,476,709 $1,519,732 $1,566,178

Per Departure $695 $715 $737

Subsidy Required $1,432,408 $1,474,140 $1,519,193

Per Departure $674 $694 $715 4-year Discount

Expenses

Two-year selection

Drivers
Option 2

Massena and Ogdensburg only 3x daily to Albany

14

To/From Albany

MSS OGS

Daily RTs 3 3

Pax/Dpt 3.0 2.6

LF 33% 29%

Fare (net) $58.00 $57.00

Rev/Dpt $172 $149

MSS OGS

Fuel $471,993 $485,934

Maintenance $482,257 $498,983

Pilots $156,436 $156,436

Ownership $87,690 $87,690

Stations $438,832 $410,243

Operating fees $18,309 $18,309

Marketing $32,850 $32,850

General & Admin./Other $125,891 $121,327

Operating expense $1,814,258 $1,811,770

Return of 5% $95,487 $95,356

Economic Expense $1,909,745 $1,907,127

Revenue $365,932 $316,032

Profit ($1,543,813) ($1,591,094)

Subsidy Required $1,543,813 $1,591,094

Per Departure $727 $749

Subsidy Required $1,497,499 $1,543,362

Per Departure $705 $727

Expenses

Two-year selection

Drivers

4-year Discount
Option 3

Two or three of the communities 

served 3x daily to Boston via Albany

15

To/From Boston

ART MSS OGS

Daily RTs 3 3 3

Pax/Dpt 4.5 4.7 4.3

LF 50% 52% 48%

Fare (net) $71.12 $70.01 $70.41

Rev/Dpt $319 $327 $303

Local ALB-BOS rev $120 $120 $120

ART MSS OGS

Fuel $673,747 $723,535 $737,476

Maintenance $656,253 $704,049 $719,982

Pilots $230,052 $230,052 $230,052

Ownership $128,956 $128,956 $128,956

Stations $460,757 $438,832 $410,243

Operating fees $73,269 $51,916 $51,916

Marketing $32,850 $32,850 $32,850

General & Admin./Other $134,072 $136,074 $131,510

Operating expense $2,389,955 $2,446,265 $2,442,984

Return of 5% $125,787 $128,751 $128,578

Economic Expense $2,515,742 $2,575,016 $2,571,562

Revenue $933,226 $949,477 $899,577

Profit ($1,582,516) ($1,625,539) ($1,671,985)

Subsidy Required $1,582,516 $1,625,539 $1,671,985

Per Departure $745 $765 $787

Subsidy Required $1,535,041 $1,576,773 $1,621,825

Per Departure $723 $742 $763

Note: Cape Air requires at least two communities for Option 3 to be viable

Drivers

Expenses

Two-year selection

4-year Discount
16

Cape Air is proud to be a partner in air service for 

Massena, Ogdensburg and Watertown

 Three daily flights to Albany and/or Boston

 Subsidy used to lower fares

 Interline connections, ticketing and bag transfer with most major airlines; global distribution

 A healthy, strong, independent airline that cares passionately about serving communities

Summary

Cape Air is a great choice for 

Massena, Ogdensburg and Watertown

Hyannis Air Service, Inc., dba Cape Air

Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 

(508) 862-9719

Media inquiries to Charles Ferrara, VP Corporate Affairs: 617-567-3597