June 23, 2014

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

Augusta/Waterville and Rockland, Maine

Docket DOT-OST-1997-2784

Each Non-Stop To/From Boston

For a two- or four-year term

Hyannis Air Service, Inc., dba Cape Air

Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 , (508) 862-9719

NB: DOT refers to the Knox County Regional Airport as “Rockland”, 

so this proposal uses both names interchangeably
OVERVIEW

Cape Air

1
2

Cape Air has grown from a single aircraft and route in 1989 

to America’s largest commuter airline today

 First route was Boston – Provincetown, 

begun in October 1989 with one aircraft

 Today’s fleet

 76 Cessna 402s in four regions 

 Three Britten-Norman Islanders

 Two ATR-42s in Micronesia

 Operating up to 550 flights daily

 In 2013 flew 728,000 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)
Cape Air 2014

• Annual revenue of $120M 

• Financially stable

• 44 airports served, 20 in EAS

• 83 aircraft

3

Captain Krista Poppe

Augusta based
San Juan

Mayaguez

St. Croix

Vieques

Tortola

St. Thomas

Anguilla

Nevis

Virgin Gorda

Culebra

Provincetown

Hyannis

Nantucket

Providence New Bedford

Martha’s Vineyard

Augusta

Lebanon Rutland

Ogdensburg Saranac Lake

Massena

White Plains

Albany

Manhattan

Rockland

Bar Harbor

Boston

Cape Air Routes

June 2014

Ft. Leonard Wood

Cape Girardeau

Quincy Kirksville

St. Louis

Marion Owensboro

Havre Glasgow

Wolf Point

Sidney

Glendive

Billings

Map inset not to scale

Rota

Saipan

Guam

Micronesia

Denotes seasonal service

Proud to be America’s 

finest commuter airline!
One of Cape Air’s best features is interline connections 

with all of the legacy airlines plus JetBlue, giving Rockland 

and Augusta access to the world

5
Itineraries connecting between Cape Air and United are 

available on united.com

6
At joint cities Cape Air’s connecting destinations 

appear on jetblue.com

7
Through Expedia and other OTAs, Cape Air connects EAS 

communities with most network airlines

8
9

Over more than 20 years in business Cape Air has 

invested in the airline features smaller communities need

Feature Established

Reliability

Tickets sold through 

Expedia, Orbitz, Travelocity

Interline e-ticketing 

with all legacy airlines

Checked luggage transfer

with all legacy airlines

TSA security program
Cape Air proposes continued service 

with our fleet of 76 Cessna 402s

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Cape Air takes environmental sustainability seriously by 

investing in fuel-saving aircraft technologies and 

powering its offices with solar panels 

11
12

Cape Air’s Reservations Call Center

Cape Air has its own internal reservations center

800-CAPE-AIR

(Where there is never a booking fee!)
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The key to Cape Air’s success is our friendly people...

Daffodil “Daffy” Day at Cape Air Reservations
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...And our mantra: 

Have

A

Good

Time

Doing

It!

Make

Our

Customers

Happy,

And

Cape Air celebrates Valentine’s Day in the Caribbean
AUGUSTA AND ROCKLAND

Community Air Service for

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Cape Air has been privileged to serve Rockland since 2008 

and Augusta since 2010

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Ceremonial ribbon cutting at Augusta, Maine

December 1, 2010
Cape Air’s ridership at Knox County Regional Airport 

continues to soar

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13,808

12,768 12,316 11,744 

14,286 

15,212 

15,883 

14,393 

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 Transition year

Knox County Regional Airport Enplanements

Predecessor
Augusta State Airport ridership is at modern highs

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9,581

6,279

6,033

8,150

6,698

8,477

8,183

7,961

5,792

8,223

8,906

8,970

8,045

6,629

7,105

7,671 572

11,026

9,289

11,000

0

2,000

4,000

6,000

8,000

10,000

12,000

Cape Air

Predecessor

May & Jun

AUG closed 

Augusta ridership
Access Boston for connections to the world

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Boston Logan: 

Access to the world for Rockland and Augusta
Note: Includes Seasonal Service, Source: OAG & Innovata Schedules

Boston Logan has Nonstop Domestic Service 

to 75 Destinations
Note: Includes Seasonal Service, Source: OAG & Innovata Schedules

Boston Logan has Nonstop International Service 

to 35 Destinations
MARKETING & CTOS

Community Presence

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Cape Air had a robust marketing program for Rockland and 

Augusta run by a full-time regional marketing manager

Downeast Magazine ad
Cape Air’s marketing efforts for the Maine communities are 

increasingly focused online and in broadcast channels, 

which we find most cost-effective

Mainebiz.biz ad
Cape Air’s unique city ticket office program puts an airline 

and airport presence in the downtown business district

• Remote reservation office

• Routes local calls from Rockland and 

surrounding area codes

• Serves as a downtown billboard and 

reminder to locals and visitors alike 

that there is a commercial airport up 

the road!

• Brings jobs to Rockland

Key features Rockland ticket office
Augusta’s city ticket office is located 

in the beautiful historic Post Office building
Penobscot Bay, Kennebec Valley, Waterville, Mid-Maine, 

Penobscot Bay, Bar Harbor, Blue Hill, & Ellsworth 

Chamber Members

City Ticket Office Open House

Hosted EDC Meeting at Airport

Friends of Rockland Harbor Lights 

Pen Bay Chamber Annual Meeting Sponsor

Pen Bay Chamber Annual Dinner Sponsor

ASTA Maine Trade Show Exhibitor

Co-created a survey and distributed to passengers to identify 

trends in travel from airport

City Ticket Office Open House

Airport Wings & Wheels

Pen Bay Chamber Festival of Lights

Maine ASTA Travel Agent Expo

Rockland Blues Festival

Camden Film Festival

Maine Home, Boats, and Harbors Trade 

Show Exhibitor/Donate Tickets

Rockland Lobster Festival 

Since inception we have donated over $30,000 to the 

Rockland area; We also sponsor a ton of local events! 
Dube Travel 50th Anniversary 

Maine ASTA Trade Show

Mid Maine Chamber Golf Tourney

Augusta Kiwanis Club

Ladies Expo Waterville Chamber

Mid Maine Chamber of Commerce Super Raffle

St. Lawrence High School Cheer Team

Kennebec Valley Humane Society

Chandler Melason Benefit

Augusta Downtown Alliance Events

Whatever Family Festival

Kennebec Valley Annual Chamber Dinner-Major Sponsor

Mid Maine Chamber of Commerce Business Expo Sponsor

ASTA Maine Trade Show Exhibitor

Our community calendar has been equally busy at Augusta!
PROPOSAL

Essential Air Service

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Cape Air proposes to continue seasonally-adjusted 

frequency to right-size capacity with demand

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Seasonal Frequency Proposal

Season Defined AUG RKD RKD w 6x

Winter January - Wed. before Memorial Day 3 3 3

Spring Thu. before Memorial Day - Independence Day Weekend 4 4 4

Summer Independence Day Weekend - Tue. after Labor Day 4 5 6

Fall Wed. after Labor Day - Tue. after Columbus Day 4 4 4

Winter Wed. after Columbus Day - December 3 3 3

Standard Optional
Special Rockland Consideration

Given the strong peak seasonality at Rockland,

Cape Air proposes an option for 6 daily summer round trips

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Rockland load factor

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Nov-08

Feb-09

May-09

Aug-09

Nov-09

Feb-10

May-10

Aug-10

Nov-10

Feb-11

May-11

Aug-11

Nov-11

Feb-12

May-12

Aug-12

Nov-12

Feb-13

May-13

Aug-13

Nov-13

Feb-14

May-14

85% 85% 85% 83% 79%
Conforming Proposal

Cape Air is delighted to propose continued 

Essential Air Service at Rockland and Augusta 

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Notes:

•Cape Air prefers a four-year reselection

•See note on slide 34 regarding annual escalation factor

•Cape Air proposes to serve both Augusta/Waterville and Rockland, but is 

willing and able to operate either route without the other.

AUG RKD

Stage (naut. miles) 129 135

Seats per Dpt 9 9

Sched. RTs/Day 3.3 3.6

Annual Actual Dpts 2,325 2,537

PDEW 16.0 20.3

Pax/Dpt 4.9 5.7

Load Factor 54% 63%

Annual Passengers 11,647 14,828

Avg. Net Fare $73 $83 

Passenger Rev $824,746 $1,193,801 

4-year option 

preferred

Drivers

Economics—Year 1 (see note)

See seasonal schedule on previous slide

Year 1 Year 1

AUG RKD

Fuel $714,351 $792,722 

Maintenance $731,060 $811,959 

Pilots $215,268 $234,608 

Ownership $175,973 $175,973 

Stations $451,456 $545,577 

Marketing $65,906 $68,648 

Law enforcement officer $17,000 $72,000 

De-icing $23,537 $25,684 

General & Admin./Other $166,138 $197,179 

Operating Expense $2,560,689 $2,924,350 

Return of 5% $134,773 $153,913 

Economic Expense $2,695,463 $3,078,263 

Passenger Revenue $824,746 $1,193,801 

Profit ($1,870,717) ($1,884,462)

Subsidy Required $1,870,717 $1,884,462 

Per Departure $805 $743 

Per Passenger $166 $131 

4-Year discount

Subsidy Required $1,818,106 $1,831,464 

Per Departure $782 $722 

Per Passenger $161 $127 
Rockland Alternative Option: 6x Peak Summer

Because Rockland’s summer load factors have been in the 

mid-80s, Cape Air proposes a summer increase to 6x daily 

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4-year option 

preferred

Drivers

Economics—Year 1 (see note)

See seasonal schedule on previous slide

RKD (6x summer only)

Stage (naut. miles) 135

Seats per Dpt 9

Sched. RTs/Day 3.8

Annual Actual Dpts 2,657

PDEW 21.4

Pax/Dpt 5.9

Load Factor 65%

Annual Passengers 15,586

Avg. Net Fare $85 

Passenger Rev $1,265,789 

RKD (6x summer only)

Fuel $836,942 

Maintenance $857,252 

Pilots $247,303 

Ownership $185,495 

Stations $552,772 

Marketing $68,648 

Law enforcement officer $72,000 

De-icing $25,684 

General & Admin./Other $204,757 

Operating Expense $3,050,853 

Return of 5% $160,571 

Economic Expense $3,211,425 

Passenger Revenue $1,265,789 

Profit ($1,945,636)

Subsidy Required $1,945,636 

Per Departure $732 

Per Passenger $125 

4-Year discount

Subsidy Required $1,890,918 

Per Departure $712 

Per Passenger $121 

Year 1 Year 1

Notes:

•Cape Air prefers a four-year reselection

•See note on slide 34 regarding annual escalation factor

•Cape Air proposes to serve both Augusta/Waterville and Rockland, but is 

willing and able to operate either route without the other.

Independence Day Weekend through Labor Day Weekend only
To align revenue with costs over time 

Cape Air proposes a 4% annual escalation factor

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Annual subsidy including escalation

Two-year reselection AUG RKD RKD (6x summer only)

Year 1 $1,870,717 $1,884,462 $1,945,636 

Year 2 $1,945,545 $1,959,840 $2,023,462 

Four-year reselection

Year 1 $1,818,106 $1,831,464 $1,890,918 

Year 2 $1,890,830 $1,904,723 $1,966,555 

Year 3 $1,966,463 $1,980,912 $2,045,217 

Year 4 $2,045,122 $2,060,148 $2,127,026 
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Cape Air would be honored to be reselected at 

Rockland and Augusta!

 High-frequency non-stop service to/from Boston Logan; seasonally appropriate schedule

 Full interline connectivity, allowing same-ticket connections with the world

 Global distribution

 Ample fleet of back-up aircraft

 Robust marketing and local ticket offices in the downtown business districts

Cape Air offers the airline amenities small communities need:

Cape Air: Your Community Wings!
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Thank you!

Hyannis Air Service, Inc., dba Cape Air

Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601 , (508) 862-9719