# PROPOSAL TO PROVIDE ESSENTIAL AIR SERVICE AT **Watertown, South Dakota**

**DOCKET OST**

**- 2001** 
**- 10644** 
**April 5 th**  

# , 2011 **7505 NE Airport Way Portland, Oregon 97218**

# COMPANY OVERVIEW

• **SeaPort Airlines is a FAA certified scheduled air service provider with 27**  **years of experience in commercial aviation. Our company’s foundation is built on efficient and reliable service to rural communities. Both SeaPort**  **Airlines and our sister company, Wings of Alaska, currently operate routes under the Essential Air Service program, as well as un** 

**- subsidized operations**  **on established competitive routes.**

• **Wings of Alaska is the premier airline serving Southeast Alaska. Growing in**  **reputation and size, it has become one of the most successful regional air carriers in Alaska providing scheduled passenger, freight, and charter**  **services between Juneau and Skagway, Haines, Hoonah, and Gustavus**  **, with weekly flights to Excursion Inlet.** 

# IT’S ABOUT TIME

**SeaPort Airlines currently operates 26 daily scheduled flights in four Northwest**  **cities, 24 daily scheduled flights in five Mid South cities, and six daily scheduled flights in two Midwest cities. With six EAS routes, SeaPort Airlines currently has a fleet**  **comprised of seven Pilatus PC**

**- 12’s.** 

**Northwest**

• **26 Daily Flights**

• **Three PC**

**- 12’s** 

• **One EAS Route Mid South/Midwest** 

• **24 Daily Flights**

• **Four PC**

**- 12’s** 

• **Five EAS Routes**

# BRINGING ALASKA CLOSER

**Wings of Alaska currently operates 30 daily scheduled flights to six Southeast**  **Alaska cities with a fleet comprised of three Cessna 207’s and three Cessna 208 Grand Caravans.** 

**Southeast Alaska**

• **30 Daily Flights**

• **Three Cessna 208’s**

• **Three Cessna 207’s**

• **One EAS Route**

# OUR AIRCRAFT

**SeaPort Airlines operates the Pilatus PC**

**- 12 aircraft. The PC** 

**- 12 is a Swiss** 

**- built**  **pressurized turboprop aircraft typically found in corporate aviation, but utilized by SeaPort Airlines in a nine seat commuter configuration. The world's best** 

**- selling**  **turbine business aircraft, still in production today, the PC**

**- 12 can shuttle you with**  **comfort and speed.**

**Pilatus, the world market leader in the manufacture of turboprop aircraft and the only Swiss company to develop, produce and sell aircraft and training**  **systems all over the world. http://www.pilatus** 

**- aircraft.com** 

# EAS HISTORY

**Whereas many communities have been promised service that has never transpired, SeaPort delivers Essential Air Service to seven communities: Excursion Inlet,**  **Alaska; Pendleton, Oregon; Jonesboro, Arkansas; El Dorado, Arkansas; Hot Springs, Arkansas; Harrison, Arkansas; Salina, Kansas.** 
**In every case, after award, we have started on time, on budget, and with fares either at or below that which we outlined in our bid, as compared to so many other airlines**  **who place bids with unreasonable fares that are never realized by the traveling public.** 

# PROPOSED PLAN

**SeaPort proposes four direct round trips per day between Watertown and Minneapolis, seven days a week. This service level will offer more than enough inventory to provide**  **for the historical traffic of the last several years. This allows us to keep the schedule flexible to be responsive to requests for schedule or destination changes in the future.** 
**SeaPort has constructed the schedule to maximize traffic flow with flights morning, midday, and evening. SeaPort believes that traffic will increase in year two as the speed**  **and convenience of our service become more familiar to the residents of these communities.** 

**We are therefore able to offer these communities service with:**

• **Comfortable and fast pressurized**  **Pilatus PC**

**- 12 aircraft** 

• **Convenient schedules**

• **Affordable fares**

• **A reasonable and sustainable subsidy amount**

# PROPOSED PLAN
**CONTINUED** 

# SeaPort Airlines emphasizes customer service and convenience, and in so doing, our platform **is reminiscent of commercial air service of the past in that our passengers only need to arrive 20 minutes prior to departure.** 
**In Minneapolis, SeaPort would use the business aircraft center for an enhanced travel experience. We will provide complimentary shuttle van service to and from the main terminal**  **for those passengers needing to connect to, or returning from, more distant destinations. This model has proven itself well at our hubs in Portland, OR, Memphis, TN, and Kansas City, MO**  **and is no less convenient than a typical gate change.**
**Further, a no**

**- TSA model will offer the communities tremendous appeal for quick trips to and**  **from the hub, or other potential major market connections to be served by SeaPort. A no**

**- TSA**  **model has the greatest potential to draw business and leisure traffic from the hub that would otherwise travel by highway if a traditional TSA** 

**- restricted airline was the only flight**  **option. However, SeaPort can provide a traditional service pattern inclusive of TSA screening if the community so chooses.**  **Lastly, the $69 dollar fare in our proposal is an average fare. Travel to the hub will be as low as $49.00 one way. This fare is far less than the current operator.** 

# NO LINES. **NEVER ANY WAITING.**

**SeaPort Airlines is unique in that it markets to travelers the ease and convenience of by** 

**- passing TSA security screening.** 

• **Increased reliability in arrival and departure times.**

• **Quicker turn times.**

• **Arrive just 20 minutes before departure, board, and go.**

• **No Body Scanners. No rubber gloves. No need to take your shoes off.**



# WE FOUND WHAT AIR TRAVEL LOST: EASE AND CONVENIENCE

# EFFICIENCY AND REACH

• **Full GDS**  **visibility ( Sabre**  **, Amadeus, Apollo, Galileo, Worldspan**  **) for any travel agent.**

• **Visibility on Expedia.com**  **, Travelocity.com**  **, Orbitz.com, and Priceline.com.** 

• **Interline ticketing agreement with US Airways.** 

• **Reservations available online at SeaPortAirlines.com, toll** 

**- free at 888.573.2767.** 

• **Low Fares thanks to low operating costs and efficient aircraft equipment.** 

• **High**

**- frequency**  **, non -**  **stop daily service.**

• **Customer focused bringing the convenience of a private plane to the average**  **traveler for the same cost as commercial airlines.**

# CURRENT SERVICE

**Mesaba is the current air service provider with flights from Watertown to**  **Minneapolis. Non**

**- refundable fares are up to $579.00 per segment based on**  **availability and time of booking.**
**What Watertown and Minneapolis airports can expect from SeaPort Airlines:** 

• **Notification of any fare/schedule changes**

• **Community involvement through advertising/marketing** 

• **A cohesive partnership focused on economic development and increased**  **load factors**

• **Affordable fares**

• **A hassle**

**- free travel experience for your**  **community**

# FARE COMPARISON

**Watertown to Las Vegas**

• **1 stop**

• **$69 on SeaPort + $129.70 on Sun Country Airlines** 



# • **$198.70 total**

**Watertown to Las Vegas**

• **1 stop**

• **Delta**



# • **$405 total**

# FARE COMPARISON

**Watertown to Los Angeles**

• **1 stop**

• **$69 on SeaPort + $109.70 on Sun Country Airlines** 



# • **$178.70 total**

**Watertown to Los Angeles**

• **1 stop**

• **Delta**



# • **$430 total**

# FARE COMPARISON

**Watertown to Orlando** 

• **1 stop**

• **$69 on SeaPort**

**+ $85.70 on Sun**  **Country Airlines** 



# • **$158.70 total**

**Watertown to Orlando** 

• **1 stop**

• **Delta**



# • **$284 total**

# EAS TESTIMONIAL

**Pendleton Regional Airport**
**Larry Dalrymple**

**– Airport Manager :**  **“Eastern Oregon Regional Airport at Pendleton had been struggling since schedule changes following 9/11 served by a carrier flying 37 seat aircraft.**  **Low passenger count attributed to poor schedule, which then contributed to poorer passenger count.**  **The carrier's solution was to bring in larger aircraft and fly to a different hub.**  **The Airport and community balked at this suggestion and went in search of alternatives.**  **The solution found through the EAS process was SeaPort Air flying a 9 passenger Pilatus, that would eliminate the need for TSA security as**  **well as mandatory ARFF standby, saving the Airport personnel costs in an already short budget.**  **The passengers have welcomed the new service, much better schedule, and are elated with "no security check" and stand by time.**  **Passengers today will say, "I love the service", "great customer service", and "I'm sure glad I finally tried it, cause I'll be back".**  **In our particular market, the 9 passenger aircraft is perfect, and SeaPort Air provides the schedule, the professionalism, and customer service we need and desire.”** 

# CUSTOMER FEEDBACK

**Ruth Ann Smith**

**– Hot Springs to Memphis:**  **“Two hours before the flight I booked my ticket to Memphis from Hot Springs. Wow! What a surprise; it was simple, convenient, great price, and impeccable service. It far exceeded my**  **expectations and I will be flying to Memphis on SeaPort Airlines instead of driving from now on. The customer service was fabulous!”** 

**Catherine Martin**

**– Memphis to Harrison:**  **“I have never had such a positive experience connected with any airline. I read about Seaport Air last October when they opened the Mid** 

**- South Route, but didn’t have the chance to fly until**  **March. Usually the dread of the process comes then you just grin and bear it; however, with SeaPort Air I could arrive 15 minutes early. The hassle free no TSA is wonderful and made me**  **feel special. I have flown twice in the last 2 months and the customer service from start to finish is outstanding. I will be a regular customer and have already recommended the airline to several**  **associates. Thank you, SeaPort Air, for making me feel like a queen!”**

**Barbara Covell** 

**– Portland to Newport:**  **“This is a class operation, very professional and the staff provide the kind of customer service that most people can only dream about. I have flown several times in order to avoid the LONG**  **car trip from the Oregon central coast to Portland airport. Today my husband had to get to the emergency room at Portland VA Medical Center. The staff and crew actually held the flight in**  **Newport while we made haste to get there. If that wasn't enough, they had a taxi waiting when he arrived at Portland airport. Many, many thanks!”** 

# COMMUNITY INVOLVEMENT

# RECENT NEWS

**For a list of SeaPort news articles visit http://www.SeaPortAir.com/press** 
**SeaPort Airlines drives to aid stranded passengers (click here)**  **The East Oregonian: 12/29/2010 “They didn’t want their passengers to miss Christmas,” said Larry Dalrymple, Pendleton airport**  **manager. “What other airline would do that?”**
**SeaPort business continues to climb higher (click here)**  **East Oregonian:11/ 07/2010 The number of passengers flying SeaPort Airlines from Pendleton continues its gentle climb.**  **Seaport Airlines puts passenger first (click here)**  **The Salina Journal: 05/25/2010 “Now that is great customer service," Melissa McCoy, Salina Airport Authority spokeswoman, wrote**  **in an e**

**- mail to the Journal.** 
**Trip with SeaPort a pleasant experience (click here)**  **The El Dorado News**

**- Times: 03/10/2010** 
**Hit the Sky Running: Interview with SeaPort Airlines (click here)**  **Aviation Buzz: 02/24/2010 Whether you fly SeaPort in the Northwest of the Mid** 

**- South, the brand is consistent.** 

# OTHER NEWS

**SeaPort offers flexibility to fit Salina Wednesday, March 9th, 2011**  **The Salina Post**

**SeaPort Airlines has a long reputation of departing early if all passengers are accounted for and ready to go, but when a group of local officials booked the 7:30 a.m. flight and left three hours early this morning, they may**  **have set a new record. The flight was booked weeks ago and completely filled with Salina representatives whose final destination is Washington, D.C.**  **“Salina community leaders will meet with our congressional delegation and share with them those federal policy issues and initiatives most important to Salina’s future,” explained City Manager Jason Gage.**  **“It also provides an opportunity to learn more about the federal legislative process and to build important**  **relationships which have a long**

**- lasting, positive impact on our community.”**  **A week before the flight, SeaPort officials checked the passenger list and let the group know if they wanted to leave earlier it wouldn’t be a problem.**  **“Had we had additional passengers on the 7:30 flight we’d have had to figure something else out,” explain SeaPort Operations Manager Cullen Krause.**  **“One of the benefits of SeaPort is that we have the ability to be flexible and work with the community on short notice to**  **accommodate Salina’s air travel needs.”SeaPort Airlines’ convenience and flexibility not only saved the group money, but allotted them an extra day in Washington instead of travel.**  **Flying on SeaPort to Kansas City and then hopping a flight with a different airline to Washington, the group saved themselves a three** 

**- hour car ride in each direction, parking fees and a whole lot of headaches.**  **SeaPort added a plane to the regular flight schedule to accommodate the group as well as other passengers for their return to Salina.**  **“We are fortunate to have SeaPort as our travel option,” said Gage. “Their aircraft is comfortable and their**  **convenient arrival and departure schedules are not only affordable, but match up well with the frequent flyer’s travel needs.**  **SeaPort is truly an asset for Salina.”**

# SeaPort welcomes this opportunity to be chosen to provide essential **air service at Watertown, South Dakota for the next two year period. We bring a fresh approach, and believe we have presented a proposal that**  **will meet the EAS needs of the communities at reasonable subsidy levels. Thank you for your consideration.** 
**Respectfully submitted,**
**Rob McKinney President** 

**SeaPort Airlines 7505 NE Airport Way**  **Portland, OR 97218 (971) 340** 

**- 1711**  

# www.SeaPortAirlines.com

### SeaPort Airlines Essential Air Service Proposal Docket OST-2001-10644 Annual Subsidy Requirement August, 2011 - July, 2012 Exhibit 1A

Watertown Factor ATY-MSP Revenue: Passenger: Forecasted Passengers 13,000 Average Revenue / Pax: Year 1 69.00 $ Revenue / Pax Change 0.00% Average Revenue / Pax 69.00 $ Passenger Revenue 897,000 $ Other Revenue: Ratio to Passenger Revenue 1.00% Other Revenue 8,970 $ Total Revenue 905,970 $
Operating Expenses Completed Block Hours 2,463.84 Direct Flight Crews 72.00 $ 177,396 Fuel Gallons / Block Hour 52 Into Plane Cost / Gallon 6.25 $ Fuel Cost / Block Hour 325.00 $ 800,748 Insurance 50.00 $ 123,192 Maintenance 211.20 $ 520,363 Aircraft Lease 200.00 $ 492,768 Total Direct 2,114,467 $ Indirect Expense 28.00% 592,051 Total Operating Exp 2,706,518 $

Return 5.00% 135,326 Total Economic Cost 2,841,844 $ Surplus / (Deficit) (1,935,874) $ Annual Subsidy 1,935,874 $ Completed Departures 2,832

### SeaPort Airlines Essential Air Service Proposal Docket OST-2001-10644 Annual Subsidy Requirement August, 2012 - July, 2013 Exhibit 1B

Watertown Factor ATY-MSP Revenue: Passenger Forecasted Passengers 13,000 Average Revenue / Pax Year 2 69.00 $ Revenue / Pax Change 0.00% Average Revenue / Pax 69.00 $ Passenger Revenue 897,000 $ Other Revenue: Ratio to Passenger Revenue 1.00% Other Revenue 8,970 $ Total Revenue 905,970 $
Operating Expenses Completed Block Hours 2,463.84 Direct Flight Crews 75.60 $ 186,266 Fuel Gallons / Block Hour 52 Into Plane Cost / Gallon 6.56 $ Fuel Cost / Block Hour 341.25 $ 840,785 Insurance 50.00 $ 123,192 Maintenance 211.20 $ 520,363 Aircraft Lease 200.00 $ 492,768 Total Direct 2,163,374 $ Indirect Expense 28.00% 605,745 Total Operating Exp 2,769,119 $

Return 5.00% 138,456 Total Economic Cost 2,907,575 $ Surplus / (Deficit) (2,001,605) $ Annual Subsidy 2,001,605 $ Completed Departures 2,832 Subsidy Per Departure 706.78 $

### SeaPort Airlines Essential Air Service Proposal Docket OST-2001-10644 Proposed Departure Schedules August, 2011 - July, 2013 Exhibit 2

Sched Sched Sched Comp Sched Block Sched Block Block Sched Comp Block City Block Sched Hours / Freq / Hours / Hours / Seg / Comp Seg / Hours / Community Pair Time Seg Seg Week Week Year Year Factor Year Year ATY ATY 0600

MSP 0652 1 0.87 7 6.09 316.68 364 97.50% 354 307.98 MSP 0715 ATY 0807 1 0.87 7 6.09 316.68 364 97.50% 354 307.98 ATY 0900 MSP 0952 1 0.87 7 6.09 316.68 364 97.50% 354 307.98 MSP 1015 ATY 1107 1 0.87 7 6.09 316.68 364 97.50% 354 307.98 ATY 1330 MSP 1422 1 0.87 7 6.09 316.68 364 97.50% 354 307.98 MSP 1500 ATY 1552 1 0.87 7 6.09 316.68 364 97.50% 354 307.98 ATY 1700 MSP 1752 1 0.87 7 6.09 316.68 364 97.50% 354 307.98 MSP 1800 ATY 1852 1 0.87 7 6.09 316.68 364 97.50% 354 307.98 8 6.96 7 48.72 2,533.44 2,912 97.50% 2,832 2,463.84

### SeaPort Airlines Essential Air Service Proposal Docket OST-2001-10644 Performance Summary August, 2011 - July, 2012 Exhibit 3A

Watertown ATY-MSP Performance: Rev Block Hours Scheduled 2,533.44 Completion % 97.50% Completed Block Hours 2,463.84 Rev Departures Scheduled 2,912 Completion % 97.50% Completed Departures 2,832 Rev Passengers Year 1 13,000 Forecasted Growth Rate 0.00% Total Passengers Average Segment Share 100.00% Segment Passengers 13,000 Available Seats 25,488 Average Load Factor 51.00% Average Pax / Flight 4.6

### SeaPort Airlines Essential Air Service Proposal Docket OST-2001-10644 Performance Summary August, 2012 - July, 2013 Exhibit 3B

Watertown ATY-MSP Performance: Rev Block Hours Scheduled 2,533.44 Completion % 97.50% Completed Block Hours 2,463.84 Rev Departures Scheduled 2,912 Completion % 97.50% Completed Departures 2,832 Rev Passengers Year 2 13,000 Forecasted Growth Rate 0.00% Total Passengers Average Segment Share 100.00% Segment Passengers 13,000 Available Seats 25,488 Average Load Factor 51.00% Average Pax / Flight 4.6