# Cape Air is a small but robust commuter airline, operating and growing since 1989 Key facts**~First** 

### route was Boston- Provincetown, begun in October 1989with one aircraft**~** 

### Nowflying 69 Cessna 402s in four regions, and two ATR-42s in Micronesia**~** 

### Operating up to 600 flights daily**~In** 

### 2012 flew 735,000 passengers**~** 

### Stable, mature and growing company CapeAir: Leading the pack nine at a time

Photo courtesy Mark Garfinkel (August 7, 2000, Boston) J ··.. : f ( -';""
'**~** ... : ;.**~** ;
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# Cape Air began service in 1989 with a few aircraft...

:,:fJape 

## AirBegins 

## · ServiceFromP'Town .'. ' Cape Air has begun operation of its · sche.duled commuter airline service betwee.n ,the**Prov~ncetown** Airport and cBostons Logan Airport. · ·Cape Air's fallFswinter schedule offers three. to four daily departures from Provmcetown and three tofourdepartures from Gate No. 28,**lo~er**level ofAmerican Airlines Terminal Bin Boston. · O:pe Air is a diyision of Hyannis Air Service, Inc., an atr charter service and fixed base operator at the Barnstable Municipal Airport in Hyannis. For more information, call lFsB00-352-0714 or 775-8171.



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# ...And one route: Boston - Provincetown Original CapeAir route map 

# I
•' /

November 1989 schedule 

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# Cape Air is led by a dedicated seniorteam many ofwhom have been with the company more than twenty years

CapeAir's senior leadershipteam January 7, 2013



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# Cape Air has grown steadily overthe last ten years CapeAir revenue In millions $120 $100 $103.8 $99.1 $80 $60 $40 $20

$0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012: 

### 7- -----"
----- -- 

# One ofCape Air's best features is interline connections with all ofthe legacy airlines plus Frontier 

# jetBlue**AmericanAirlines~** AIRWAYS" 

# AD E LTA .·'" 

# UNITED AIR LINES 

# •**FRO,NTIER~** U·SAIRWAYS A I R L I N' E S



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# Cape Air codeshares with American and United

Codeshare highlights
• CapeAiroperatesflights in Micronesia as U N 1T E

## ~**~~®** • Flights in the Caribbean have 

## U N I T E D code • Flights in the Midwest and Caribbean operatewith the code of

## AmericanAirlines'~

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# Itineraries connecting between Cape Air and United are available on united.com

One Way (Start New Search) D•p•tt Rutland, YT (RUT) Arn'Jo: Chicago, IL (ORO- O'Hare) Tue., Sep. 11, 20 12 Tm.t:

With Stops from $149 FleHible Fare from $491 Fit"St Cabin from $1,644
Fares listed are forthe entire trip per person and include taxes and fees. Additional bag charges may apoly. The fare displayed is the lowest available forthe dates requested; however some flights may notbe in the cabin you requested. United flights include those operated by our Express partners.

from $149 Depart: 7:00a.m. Tue•• Sep. 11. 2012 Rutland, VT (RUT) Arrive: 7:59a.m. Tue.• Sep. 11, 2012 Boston, MA (BOS) Change Planes. Connecttime in Boston, MA (BOS) is 1 hour 6 minutes. Depart: 9:05a.m. Tue., Sep. 11, 2012 Boston, MA (BOS)

Depart: 4:40p.m. TIIA Ci:a.n 11 ?01? Arri"Je: 10:52 a.m. Tue., Sep. 11, 2012 Chicago, IL (ORD- O'Hare)

Arrive: 5:39p.m. Tna. Ci:an 11 ?01? FlightTime: 59 mn

FlightTime: 2 hr 47 mn TravelTime: 4 hr 52 mn

FlightTime: 59 mn Award Miles/ Premier Qualifying*:

Award Miles/ Premier Qualifying*: 867/100% Total Award Miles: 867

Award Miles/ Premier Qualifying*: Flight: 9K52 Opented by Cape Air. Aircraft: Cessna 402 Fare Class: Economy (L) Meal: None See On-Time Petformance Flight: UA521 Aircraft: Airbus A319 Fare Class: United Economy (T) Meal: Snadcs forPun:hase No Special Meal Offered. See On-Time Perform.ar.ce View Seats Flight: gK70 C'perated**b~·** C.ape Air. Airrrilfl-: f.p..,.n.a 407 

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## The paradox 

# SMALLER PLANE, INCREASED RIDERSHIP (Strange but truel) 11

# Why do nine-seat aircraft increase ridership? Features • Lowerfares

- Low absolute cost ofthe Cessna 402 allows CapeAirto offer lowfares in EAS • CapeAir proposes all seats on all flights in Montana at $49

- Subsidy per passengerstays low dueto increased ridership 

### • Schedule convenience

- Smalleraircraft are permitted higherfrequency

- Non-stopto/from the hub 

### • Reliability

- Spare aircraft in the region

- All maintenance and training are done by CapeAirstaff 

### • Greatservice

- MOCHA HAGoTDI! (Making Our Customers HappyAnd Having A Good Time Doing !t!)

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# Since starting service at Rutland Southern Vermont Regional Airport in 2007 Cape Air increased ridership by more than 2.5 times Rutland Passengers 

### 14,000**...,-------------------~~-----**

• Cape Air • Predecessors

2,000 0 

### 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 13

# Ridership at Adirondack Regional Airport is up 83% Adirondack RegionalAirport Passengers Sum ofboth directions

0 

### 2005 2006 2007 2008 2009 2010 2011 2012 14

# In Quincy, IL ridership is up 4 fold! Quincy, ILAirport Passengers Sum ofboth directions 

### 25,000 ,.------------------------·---------

# Cap~ 20,000**·t---------------------------1-~7""1~9-1--** 

### 17,599 15,000 +-----------------

# The popularity of Cape Air's EAS service is due to complex, inter-related contributions by Cape Air and

# our community partners

Marketing and

community partnership

Fully-functioning global distribution Lowfares: $49 all seats all

flights in Montana

Interline ability with all network carriers Convenient nonstop schedule

Reliability



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# Over more than 20 years in business Cape Air has invested in the airline features smaller communities need
Feature Reliability Tickets sold through Expedia, Orbitz, Travelocity Interline e-ticketing with all legacy airlines Checked luggage transfer with all legacy airlines TSAsecurity program Established

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# Cape Air has its own internal reservations center CapeAir's Reservations Call Center



## 800-CAPE-AIR Never a booking fee! 18

# The key to Cape Air's success is ourfriendly people... Daffodil "Daffy" Day atCapeAir Reservations



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# ...And our mantra:
CapeAir celebratesValentine's Day in the Caribbean 

## Have Make A 

# - Our Good 

# - Customers Time 

# - !:fappy, And Qoing



# - It!



# -

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## Marketing: Cape Airwill hire a full-time regional marketing manager, based in Billings, to develop and execute a customized marketing plan for each community

# SERVICE PROPOSALS Service is proposed at the frequencies generally requested in 9-seat aircraftfor markets previously served by 19-seataircraft. Also, a lowertotal cost Option B is included at reduced frequencies


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# Option A: 3x daily (Sx for Sidney) round trips Cape Air proposes service for any combination of at least three cities

Havre Glasgow Wolf Point Sidney Glendive Daily RTs 3 3 3 5 3 Departures (net ofcompletion) 2,124 2,124 2,124 3,541 2,124 Pax/Opt 2.3 2.3 2.3 4.5 2.3 LF 25% 25% 25% 50% 25% Fare (net) $42.00 $42.00 $42.00 $42.00 $42.00 Pax Rev $200,746 $200,746 $200,746 $669,155 $200,746 Fuel $766,341 $776,179 $845,047 $1,424,808 $697,474 Maintenance $564,791 $570,218 $608,208 $1,022,725 $526,801 Pilots $301,651 $301,651 $301,651 $301,651 $301,651 Ownership $189,918 $192,484 $210,449 $355,026 $171,952 Stations $407,396 $405,308 $413,658 $596,336 $405,308 Landing Fees $9,368 $9,368 $9,368 $15,614 $9,368 Marketing $43,116 $43,116 $43,116 $61,594 $43,116 General & Admin./Other $353,156 $353,156 $353,156 $446,643 $353,156 Operating expense $2,635,736 $2,651,480 $2,784,653 $4,224,397 $2,508,826 Return of5% $138,723 $139,552 $146,561 $222,337 $132,043 Economic Expense $2,774,459 $2,791,032 $2,931,214 $4,446,734 $2,640,870 Passenger Revenue $200,746 $200,746 $200,746 $669,155 $200,746 Profit -$2,573,713-$2,590,286-$2,730,467-$3,777,579-$2,440,124 Subsidy Required $2,573,713 $2,590,286 $2,730,467 $3,777,579 $2,440,124 Per Departure $1,212 $1,219 $1,285 $1,067 $1,149 Per Passenger $538 $542 $571 $237 $511 ssumes two-year se ect1on term 

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# Option 8: 2x daily (4x for Sidney) round trips Cape Air proposes service for any combination of at least three cities
Daily RTs Departures (net ofcompletion) Pax/Opt LF Fare (net) Pax Rev Fuel Maintenance Pilots Ownership Stations Landing Fees Marketing General &Admin./Other Operating expense Return of5% Economic Expense Passenger Revenue Profit Subsidy Required Per Departure Per Passenger ssumestwo-year se ect1on term Havre Glasgow Wolf Point Sidney Glendive 2 2 2 4 2 1,416 1,416 1,416 2,832 1,416

2.7 2.7 2.7 5.0 2.7 30% 30% 30% 55% 30% $42.00 $42.00 $42.00 $42.00 $42.00 $160,597 $160,597 $160,597 $588,856 $160,597 $522,247 $528,952 $575,884 $1,165,176 $475,316 $384,895 $388,593 $414,482 $836,362 $359,005 $264,675 $264,675 $264,675 $264,675 $264,675 $129,425 $131,174 $143,417 $290,333 $117,182 $416,449 $414,315 $422,851 $700,645 $414,315

$6,384 $6,384 $6,384 $12,768 $6,384 $45,333 $45,333 $45,333 $90,666 $45,333 $317,600 $317,600 $317,600 $409,357 $317,600 $2,087,009 $2,097,027 $2,190,627 $3,769,982 $1,999,811

$109,843 $110,370 $115,296 $198,420 $105,253 $2,196,851 $2,207,397 $2,305,923 $3,968,402 $2,105,064

$160,597 $160,597 $160,597 $588,856 $160,597 -$2,036,254 -$2,046,800 -$2,145,326 -$3,379,546 -$1,944,467 $2,036,254 $2,046,800 $2,145,326 $3,379,546 $1,944,467

$1,438 $1,445 $1,515 $1,193 $1,373

$533 $535 $561 $241 $509 

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# Cape Air offers all ofthe airline amenities smaller communities need to increase total ridership Features ./Lowfares for EAS communities: all seats on all flights, including tax and fees: $49 ./Non-stop service for each community ./Full interline connectivity, allowing same-ticket connections with the world ./Global distribution ./Strong airline with a successful track record ofincreasing ridership in EAS markets 

## CapeAirwould be honored to be selected to serve Montana's EAS communities
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