## August 13, 2014 Proposal of Hyannis Air Service, Inc. dba “Cape Air” to provide subsidized Essential Air Service for:



# Ft. Leonard Wood, Missouri

DOCKET DOT -OST- 1996

- 1167



# Four daily non

- stop flights to/from Lambert

- St. Louis International Airport

With

--------------------------- codeshare

Hyannis Air Service, Inc., dba Cape Air

Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601

(508) 862

- 9719

# Cape Air has been privileged to serve the Waynesville

– St. Robert Regional Airport since December 2010

1 Ribbon cutting for Cape Air’s service at Ft. Leonard Wood, MO

December 14, 2010

# CAPE AIR About

2

## 3 

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

into America’s largest commuter airline

 First route was Boston

– Provincetown,

begun in October 1989 with one aircraft

 Today’s fleet

 76 Cessna 402s in four regions

 Four 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

4

Captain Krista Poppe

Augusta basedSan 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 Saranac Lake Ogdensburg Massena

White Plains Albany

Manhattan Rockland Bar Harbor

Boston



# Cape Air Routes

July 2014 Ft. Leonard Wood

Cape Girardeau Quincy Kirksville

St. Louis

Owensboro Marion 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!

Block Island

# One of Cape Air’s best features is interline connections

with all of the legacy airlines plus JetBlue

6

# Cape Air’s Ft. Leonard Wood flights offer

American Airlines codeshare, so...

7 Codeshare partners: American Airlines and Cape Air

Photo source: Jim Schnobrich ; Used with permission

# ...Ft. Leonard Wood connecting itineraries

are sold on AA’s website as American flights

8

# Itineraries connecting between Cape Air and United are

available on united.com

9

# Through Expedia and other OTAs, Cape Air connects

EAS communities like Ft. Leonard Wood with the world

10

## 11 

# 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 and

bag transfers

with all legacy airlines

American Airlines codeshare

TSA security program

# CAPE AIR SERVICE Ft. Leonard Wood

12

# The empirical success in ridership growth at Ft. Leonard

Wood is due to a service solution that fits

Low fares

Safe and

conservative

operating

philosophy

Convenient

schedule

Interlines with

all legacy

airlines at St.

Louis Codeshare with Fully

- functioning

global distribution

plus local outreach Effective

baggage

solution



## 13 

# Popular

service Constellation of success

# Ridership has plateaued at a healthy level but we seek to

recapture the momentum interrupted by the government

shutdown

14 15,785 Cape Air passengers STL

- TBN

Year

- ending



## 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000Sep-08Dec-08Mar-09Jun-09Sep-09Dec-09Mar-10Jun-10Sep-10Dec-10Mar-11Jun-11Sep-11Dec-11Mar-12Jun-12Sep-12Dec-12Mar-13Jun-13Sep-13Dec-13Mar-14Jun-14

# Cape Air’s customized service for Ft. Leonard Wood,

including a dedicated freighter aircraft when needed,

meets the route’s extraordinary baggage requirement

15 Supervisor Carola Prewett and Capt. Eric Hodges marvel at a flight’s checked luggage

# Ft. Leonard Wood fares are down 6% in three years

16 $88 $87 $87 $87 $87

$86 $87 $86

$85

$85

$84

$83 $83 $83

$82

$81 $81 $81

$80 $80 $80 $81 $81 $81 $81 $81 $81 $81 $81 $81 $82 $82

$76 $78 $80 $82 $84 $86 $88 $90Nov-11Dec-11Jan-12Feb-12Mar-12Apr-12May-12Jun-12Jul-12Aug-12Sep-12Oct-12Nov-12Dec-12Jan-13Feb-13Mar-13Apr-13May-13Jun-13Jul-13Aug-13Sep-13Oct-13Nov-13Dec-13Jan-14Feb-14Mar-14Apr-14May-14Jun-14 

## Cape Air fares at Ft. Leonard Wood

Net average, year ending

## 17 

# Cape Air offers commuter books of tickets at Ft. Leonard

Wood that price out to just $52 per ticket

• Several Cape Air routes have more than 66% of passengers using

commuter books

• Each book contains 10 one

- way tickets: $520

• Commuter book tickets are:

– Transferable

– Unrestricted

– Valid on any departure

• Great for members of the local community! Key features of commuter books :

# Cape Air’s St. Louis service now features

a very popular inter

- terminal shuttle

• Secure, ramp

- side shuttle transports Cape Air

passengers from our gate to connecting flights

on other concourses

• Return passengers call the shuttle for pick up

from courtesy phones located in each of the

concourses

18 Eliminates TSA rescreening

in St. Louis Shuttle highlights

# Cape Air loves marketing and community events!

19 Cape Air booth with ticket give

- away

at the Fourth of July 2013 celebration on post

# In January 2013 the Ft. Leonard Wood community cut the

ribbon on our Waynesville ticket office and IT center

20 Waynesville ticket office ribbon cutting

January 22, 2013

# Cape Air is working to field this FoxAir air conditioning unit

at Ft. Leonard Wood; ground power is the critical path at

this point

21

FoxAir beta testing, June 4, 2014, Hyannis, MA

# EAS PROPOSAL Ft. Leonard Wood

22

# To best serve the Ft. Leonard Wood community’s travelers,

Cape Air proposes continued passenger and freighter

service, with the freighter used only as required

23 Drivers Passenger Economics

— Year 1

Two year contract



## Freighter: $586/dpt

Freighter notes:

• Freighter only used when needed

• Utilization of the freighter is a function of

enplanements, which will keep the per

- passenger subsidy below $200.

• Maximum eligible usage is proposed at 70%

• Year 1 Daily RTs 4.0

Annual Sched. Dpts 2,920

Completion rate 97%

Actual Depts 2,832

Pax/Dpt 5.5

Load Factor 61%

Annual Passengers 15,664

Avg. Net Fare $82.49

Passenger Rev/Dpt $456 Fuel $722,441

Maintenance $725,190

Pilots $274,462

Ownership $183,712

Rents $69,425

Staff $225,679

Ops and Landing Fees $114,156

Freighter Fixed Expenses $233,374

Marketing $66,532

General & Admin./Other $215,609

Operating expense $2,830,580

Return of 5% $148,978

Economic Expense $2,979,558

Passenger Revenue $1,292,074

Profit ($1,687,484)

Annual Operating Subsidy Required $1,687,484

Subsidy Per Departure $596

Per Passenger $108

Discount for four

- year contract

Annual Operating Subsidy Required $1,631,476

Subsidy Per Departure $576

Per Passenger $104 Required Usage Pct Dpts Annual

40% 1,168 $684,390

50% 1,460 $855,487

60% 1,752 $1,026,585

70% 2,044 $1,197,682Year 1Year 1

Notes:

• For stability and planning Cape Air proposes a discounted four

- year reselection

• See next page regarding annual escalation factor

# To align revenue with costs over time

Cape Air proposes a 4% annual escalation factor

24 Annual proposed subsidy including escalation



# Two

- year reselection Pax Freighter (Max)

Year 1 $1,687,484 $1,197,682

Year 2 $1,754,983 $1,245,590

Four

- year reselection

Year 1 $1,631,476 $1,197,682

Year 2 $1,696,735 $1,245,590

Year 3 $1,764,605 $1,295,413

Year 4 $1,835,189 $1,347,230

## 25 

# Cape Air would be honored to continue serving

Ft. Leonard Wood!

 Four daily flights to/from St. Louis with a proven baggage solution

 Spare aircraft in the region helps ensure a reliable operation



----------------------------- codeshare, plus interline connections , ticketing and bag transfer with most

major airlines; global distribution

 A healthy, strong, independent airline that cares passionately about serving communities Proposal highlights



# Cape Air is a great choice for

Ft. Leonard Wood

Hyannis Air Service, Inc., dba Cape Air

Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601

(508) 862

- 9719

# It is a privilege to serve Ft. Leonard Wood. Thank you!

26 Military Appreciation Day

November 2013

Hyannis Air Service, Inc., dba Cape Air

Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA 02601

(508) 862

- 9719