### BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

__________________________________________ ) Essential Air Service at ) ) 

### MARION/HERRIN, IL ) OST - 2000 - 7881 ) Under 49 U.S.C. §41731 et seq. )

__________________________________________ GULFSTREAM INTERNATIONAL AIRLINES P ROPOSAL TO PROVIDE S UBSIDIZED AIR SERICE AT MARION/HERRIN, ILLINOIS Correspondence with regard to this document should be addressed to: Mickey Bowman Vice Pre sident of Corporate Development Gulfstream International Airlines 3201 Griffin Road, 4 th Floor Ft. Lauderdale, FL 33312 Telephone: 270

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- 2180 Fax: 270

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- 2180 E- Mail: mbowman@gulfstreamair.com Gulfstream Internation al Airlines (“Gulfstream”) cordiall y submits its proposal s to provide subsidized air servic e to Marion/Herrin, Illinois
. Gulfstream hereby offers one option for service. Gulfstream proposes to operate flights under its independent Gulfstream Interna tional Airlines identity to the hub airport of Memphis, Tennessee
. Gulfstream has maintained interline ticketing and baggage agreements with most legacy carriersand wi ll schedule its flights to maximize connecting opportunities
. Gulfstream contends that reasonable local fares will stimulate demand and the variety of de st inations available from Memphis will allow this market to grow
. Toward that end we will establish a fare structure predicated on a $150 roundtrip fare b etween this city and Memphis
. Gulfstream flights will be available for sale through all major reservation portals and we will maintain our own web based booking site as well as a reservation call center. It should also be noted that Gulfstream is in discussions with a major legacy carrier in an effort to offer a codeshare on these flights. Should those efforts be successful, Marion/Herrinpasseng ers will enjoy amenities including through pricing and baggage check, advance seat selection, inclusion in the legacy carrier frequent flyer program and reservation service throughall major online portals as well as the legacy carrier’s own website and call center. Moreover Marion/Herrin would benefit from its inclusion into a truly global travel network and would enjoy heightened visibility as a result. In compliance with PublicLaw 100

- 223, Gulfstream proposes to operate these flights using Beech 1900D turb oprops that are pressurized and accom modate 19 passeng ers . The 1900D features stand up h eadroom with ample cargo capacity to accommodate even bulky military duffle bags.One of the hallmarks of the Gulfstream operation is our ability to provide safe and reliable transportation. T oward this end, Gulfstream will establish a regio nal maint enance base in the Memphis region in support of

these flights. This move will add roughly 12 technical support job s to the local economy. Additionally this proposal includes a second aircraft that would be a dedicated spare. With this spare located in Memphis , we would have great flexibility in responding to any operational challen ges andassure s this community receive s the level of oper ational performance it deserve s Gulfstream is committed to building its presence in Memphis and the establishment of these basic bits of infrastructure will provide a solid and reliable base for the future. This bid is contingent on Gulfstream being selected as the Essential Air Service provider at Muscle Shoals, AL. This stipulation is necessary as much of the cost of the necessary infrastructure to support these flights is shared by that bid.
Service O ption 1 ( Bid Contingent on Gulfstream’s Selection as the EAS provider in Muscle Shoals, AL ) 36 We ekly freque ncies between Marion/Herrin, Illinois and Memphis, Tennessee. Gulfstream proposes to operate these flights under it own independent marketing iden tity , though it will work to secure a Legacy Carrier codeshare relationship prior to actual service start
. The timing of these flights willbe optimi zed for connections to and fromother airline flights at Memphis The primary legacy carrier at Memphis operates three large, omni

- directional banks per day that would be the focus of schedule design. Gulfstream proposes to encourage connecting traffic by using a simplified local fee structure whereby pas sengers connecting to or from other airlineflights would pay only the low, local fare in addition to the low fares already a feature at Memphis
. The basic servic e pattern would consist of three roundtrip s each weekday to Memphis
. A single roundtrip would operate on Saturday s and two roundtrips would be oper ated on Sunday s to Memphis
. Gulfstream believes that given the amount of traffic produced in recent years at Marion/Herrin the resultant 57 seats per service day will be more than adequate to address the communities’ needs. Gulfstream Airlines Sample Flight Schedule Service Option 1 FROM TO DEP ARR FLT EQUIP FREQ STOP STA STA TIME TIME NUM MARION/HERRIN MEMPHIS 064 0 075 0 26 01 BE1 X7 0 MARION/HERRIN MEMPHIS 1 14 0 1250 26 03 BE1 X6 0 MARION/HERRIN MEMPHIS 163 5 1745 26 05 BE1 X6 0 MEMPHIS M ARION/HERRIN 0930 1040 26 02 BE1 X 7 0 MEMPHIS MARION/HERRIN 1445 155 5 26 04 BE1 X6 0 MEMPHIS MARION/HERRIN 1935 204 5 26 06 B E1 X6 0 (Note: This Schedule is for illustrative purposes and may not reflect the final published product)GULFSTREAM INTERNATIONAL AIRLINES Essential Air Service Proposal Marion/Herrin, IL - Memphis, TN (CONTINGENT BID) Option 1 Marion/Herrin, IL. Hub Served Memphis Number of Roundtrips per Service Day 3 (3 non

- stop) Operating Statistics Assumed Completion % 98% Annual Adjusted Block Hours 2,146.21 Annual Adjusted Departures 1,839.61 Annual Adjusted ASMs 6,815,737 Annual RPMs 2,583,839 Projected Load Factor 37.9% Revenue Projections Enplaned Passengers 13,250 Mileage (Average as Operated) 195 Average Fare $ 69.38 Passenger Revenue $ 919,251 Expense Projections Flight Operations $376,251 Ownership $323,9 52 Maintenance $771,548 Reservations, Stations & Administration $1,001,474 Fuel $901,406 Marketing $12,000 Total Annual Expenses $3,386,632 Projected Profit / (Loss) ($2,467,381)
Profit Element @ 5% $169 ,332 Annual Subsidy Required $2,636,713 Subsidy per Departure $1,433.30 Subsidy per Passenger $198.99Memphis affords access to 74 non stop destinations on 186 domestic departures perday
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Memphis affords access to 5 international destinations on 5 international departures per day including daily access to the third largest international connecting hub in the world, Amsterdam’s Schiphol International.In conclusion, Gulfstream b elieves this proposal will provid e the community of Marion/Herrinwith a superior air s erviceoption . We feel the passengers will benefit from the fact that Memphis is a primary logisticaland busin ess center with an airport that serves as a hub for a major legacy carrier. In 2009 over 5,000,000 passengers enplaned in Memphis . Memphis enjoys roughly 191 daily departures with non - stop service to some 79 destinations around the world. Gulfstream will provide this serviceon s tand up, pressurized airliners and the infrastructure we will establish in support of this operation will add jobs to the local economy . Additionally the integrity of service that has been a hallmark of the Gulfstream operation will assureboth depen dability and reliability to the traveling public and result in increased ridership and passenger satisfaction. Respectfully Submitted: January 6, 2011

______________________ Mickey Bowman Vice President of Corporate Development Gulfstream Internati onal Airlines