October 27, 2010

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

Massena, Ogdensburg and/or Watertown, NY

To/From 

Boston via Albany

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 Leslie Myrbeck, Director of Community Relations, at 508-862-9764
Cape Air is delighted to have served Massena, 

Ogdensburg and Watertown for two years

• Cape Air started serving Massena, Ogdensburg 

and Watertown on September 16, 2008

• Since then we have flown thousands of 

passengers (through September 2010):

– Massena: 12,757 

– Ogdensburg: 8,202 

– Watertown: 9,661 

• 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

2

Passengers served in the year ending...

Sum of both directions

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 Jun-10 Jul-10 Aug-10 Sep-10

MSS

ART

OGS
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 600 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
Cape Air’s relationship with Continental Airlines allows 

Massena, Ogdensburg and Watertown to be sold on 

continental.com, like this Massena – Tokyo itinerary

6
7

Cape Air is embedded

in the global distribution systems (GDS)

Cape Air is sold through:
8

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 sound 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

9

Benefits of independence
Cape Air’s proposal includes a new Cape Air 

City Ticket Office in each city’s downtown

• Increases visibility of the air service in each town

– Make reservations

– Answer questions about the service

– Passive advertising

– Community presence

• Enhances the downtown space

• Adds jobs in the downtown business district

• Hours of operation (Nominal)

– Mon-Fri 9-5

– Sat: 10-4

– Sun: 12-4

10

A typical city ticket office

City ticket office highlights
To enhance connectivity, Cape Air proposes “through” 

service to Boston via Albany (Option 1)

• 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

11

Through service to Boston highlights

Massena

Ogdensburg

Watertown

Albany

Boston

Through service to Boston map
Albany has service to 25 non-stop destinations, but...

12

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

13

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
Option 1

3x daily each through service to Boston via Albany

(Any combination of cities)

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To/From Boston

ART MSS OGS

Daily RTs 3 3 3

Pax/Dpt 4.5 4.7 4.3

LF 50% 52% 48%

Fare to/from ALB $59 $58 $57

Fare to/from BOS $91 $91 $91

Fare (net) $71 $70 $70

Pax Rev $319 $327 $303

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 $539,961 $518,036 $489,447

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 $2,469,159 $2,525,469 $2,522,188

Return of 5% $129,956 $132,919 $132,747

Economic Expense $2,599,115 $2,658,388 $2,654,935

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

Profit ($1,665,889) ($1,708,911) ($1,755,357)

Subsidy Required $1,665,889 $1,708,911 $1,755,357

Per Departure $784 $804 $826

Subsidy Required $1,615,912 $1,657,644 $1,702,697

Per Departure $761 $780 $802

Drivers

Expenses

Two-year selection, with discounted four-year option

4-year Discount
Option 2

3x daily each to Albany only

(At least two EAS cities required)

15

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, with discounted four-year option

Drivers
16

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

Massena, Ogdensburg and Watertown

 Three daily flights to Boston via Albany, or Albany service alone

 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 sound 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 Leslie Myrbeck, Director of Community Relations, at 508-862-9764