Essential air service at 

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

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### .. VICTORIA, TEXAS Docket DOT-OST-2005-20454

PROPOSAL OF COLGAN AIR, INC. TO PROVIDE SUBSIDIZED ESSENTIAL AIR SERVICE FOR THE COMMUNITY OF VICTORIA, TEXAS

Communications with respect to this document should be directed to : Phil Trenary ChiefExecutive Officer Pinnacle Airlines Corp 1769 Paragon Drive Suite 100 Memphis, TN 38132 (901) 348-4100

### BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.
Essential air service at 

### VICTORIA, TEXAS DocketDOT-OST-2005-20454

PROPOSAL OF COLGAN AIR, INC. TO PROVIDE SUBSIDIZED ESSENTIAL AIR SERVICE FORTHE COMMUNITY OF VICTORIA, TEXAS By order 2011-1-11, the Department requestedproposals from carriers interested in providing Essential Air Service for a future two-yearperiod. Colgan Air, Inc., a wholly owned subsidiary ofPinnacle Airlines Corp., (hereinafter "Colgan") respectfully submits aproposal to provide subsidized service between the community ofVictoria, Texas and Houston-Bush Intercontinental Airport. This proposal would require an annual subsidy of$I,856,692. Theproposed service option for the community is as follows: 13 round-trips perweek operated as non-stop service to/from Victoria, TX and Houston-Bush Intercontinental. The service will utilize a Saab 340, a thirty-fourpassenger, cabin class aircraft operatedby a crew oftwo pilots and a flight attendant. As part ofContinental Airlines' ongoing integrationprocess following their merger with United Airlines, all Continental branded service notedhereinafter will be replacedby Unitedbranded service withinthe span ofthe two-year contract periodbeginning July 1, 2011. Addionally, as part ofthe integrationprocess following the acquisition ofMesaba Airlines (herinafter "Mesaba") by Pinnacle Airlines Corp. routes currently operated by Colgan Air will, within the contractperiod, be transitioned to the Mesaba operating certificate with no disruption in service pattern orquality. Colgan is a regional airline operating Saab 340 aircraft. Colgan operates regional scheduled service as Continental Connectionunder agreement with Continental Airlines. The services offeredby Colgan allow seamless connection to Continental's domestic and international route system via the Continental Airlines hub at Houston-Bush Intercontinental Airport. Colgan Air has a long operating history with Continental at Houston-Bush Intercontinental and has consitenty demonstrated a commitment to outstanding passenger service to the communities we serve.

2Continental/United has recently indicated their intent to initiate a 'request for proposal' process for regional airline service based out out Houston-Bush Intercontinental. Although ColganlMesaba intends to submit a proposal to continue providing service similar to the current Houston-Bush Intercontinental based Colgan operation there is no guarantee ColganlMesaba will be selected. Continental/United therefore has indicated they may request to replace the service operated by ColganlMesaba, including Victoria, TX, with that ofanotherregional airline partner at a later date. The schedule proposal attached presents optimized timing to maximize connecting options with the Continental Airlines system out ofHouston-Bush Intercontinental. In addition, the options provide attractive scheduling options for both business and leisure travelers utilizing Continental Airlines' membership in the Star Alliance Network which has a considerable domestic and international presence at Houston-Bush Intercontinental. Respectfully submitted, Phil Trenary ChiefExecutive Officer Pinnacle Airlines Corp

3Annual Statistics EAS Cycles (13 round trips,' 26 segments per week) Pax Block Flight Elk/FIt Ratio Avail Seats RPMs ASMs LoadFactor

Annual Profit/ (Loss) Summary Passenger Revenue

Total Revenue

Fuel MX Operations Flight Operations Ground Service Landing Fees Ticketing and PassengerRelated Local Marketing Campaign Aviation Insurance

Total Cash Costs Ownership Total Overhead Total Operating Exp @ 97% Completion OperatingIncomel(Loss)

Margin at 5% TotalEconomic Cost/ Subsidy EAS Cycles at 97% Subsidy Per Departure at 97% 1,196 10,142

1,149

787 68% 44,589 1,247,466 4,988,880 25%

996,713 996,713
611,386 462,173 468,405 378,832

62,084 233,146

25,000

3,892 2,244,918

360,000 112,612 2,717,529 (1,720,816)

135,876 1,856,692 1,160 $ 1,600.60

4Victoria, TX to Houston-Bush Intercontinental Houston-Bush Intercontinental to Victoria, TX Weekdays Dep - Arr - Stops 6:00am 6:44am 4:42pm 5:37pm Saturday 7:00am 7:50am Sunday 7:00am 7:50am 4:42pm 5:37pm 

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0 0 Weekdays Dep - Arr - Stops 3:29pm 4:21pm 9:40pm 10:29pm Saturday 9:40pm 10:29pm Sunday 3:29pm 4:21pm 9:40pm 10:29pm CERTIFICATE OF SERVICE 

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I hereby certify that I have caused a copy ofthe forgoing Proposal to Provide Subsidized Essential Air Service to be served this 23rd day ofFebruary 2011, upon each ofthe following persons: Dennis DeVany Chief, EAS & Domestic Analysis Office ofAviation Analysis United States Department ofTransportation 1200 New Jersey Ave S.E. RoomW86-308 Washington, D.C. 20590 Amadeo Saenz Jr., P.E. Executive Director ofthe Texas Department ofTransportation Texas Department ofTransportation 125 East 11th St. Austin, TX 78701 Will Armstrong Mayor

- Victoria, TX City Hall P.O. Box 1758 Victoria, Texas 77902-1758 Larry Blackwell AirportManager 609 Foster Field Drive, Suite F Victoria, TX 77904

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