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## Salin aK S (SLN ) - Kansa s City , M O (MCI ) Proposa l Essentia l Ai r

Servic e

Januar y 201 0structur e of Operation s TransportAzuma

h wil l function a s aPar

t 38 0 Indirec t

Air Carrier . We pla

n to hire Charter

Air Transpor t o f Cleveland , Ohi o t

o physicall y operate thi s essential air

servic e fro

mSalina , K S to Kansa s City , MO . Charter Air Transpor t i s acertificate dair

carrier an d als o ha s commute

r authorit y a s well . Potentia l of

th e Salina . K S Marke t A leakag e stud

y conducte db y Sixel Consultin g Grou p i n 200 5 determine d tha t only 1.8 % o f

passenger s i

n SLN' s catchment

are aactuall y us e th e airport . Althoug h SLN' s catchment are aoverlap s wit

h bot h MH K an dICT , thi s percentag e o f

us e indicate s tha

t SL N isn' t seen a s a n optio n a t all . Sixel estimate dtha

t 255,00 0 passenger s fl

y to/o r fro mth e SL N catchment

area . It i s our intentio n to recapture a s muc h o f tha t traffi c a s w e can . It

i s no t unreasonabl e to estimate tha t th e amoun

t o f traffi c tha t ca n b e realisticall y capture da t SL N i s 25,00 0 passengers . Durin g th e lat e 1980 s andearl y 1990s , traffi c a

t Salin apeake d a

t 13,00 0 passenger s wit

h fou r 1 9 passenger roun dtri p flights pe

r day . Far e Polic y The 200 5 leakag e stud

y indicate dtha

t Salin acustomer s pai da

n averag e o f $26 5 each wa

y to fly out

o f IC T an d $23 7 each wa

y t o fly out

o f MCI . Sinc e 59 % o f Salina' s air

passenger s fly out

o f ICT , i t i s no t unreasonabl e to think tha t customer s wil l pa

y fo r th e convenienc e o f

flying fro mSL N a s lon g a s th e fare s ar

e reasonable . Ou

r goa l i s to mak

e sur e tha t w e pric e ou

r service s to allo w customer s to complete thei r total journe y sinc e they ofte n hav e t o buy asecon dticke t

a t MCI . Therefore , it

wil l b e TransportAzumah' s polic y to mak e sur e tha t th e averag e cos t

o f flying out o f SL N to th e passenger' s final destinatio n i s i n lin e wit h fare s a t MH K an dIC T a

t al l times . Propose dOn e Wa y Fares : Salin aK S - Kansa s Cit y M O Advanc e Purchas e Perio d Far e 0- 3 day s

$12 5 4- 7 day s

$11 0 8-1 4 day s

$10 0 15 + day s

$9 0Governmen t Far e I f awarde dthi s contract , TransportAzuma h wil l bi dt o establis h a governmen t

fare betwee n SL N an dMCI . Thi s wil l allo w passenger s travelin g o n GS A schedule s t o b e route dt o SLN' s ai r servic e a s thei r

firs t option . TransportAzuma h wil l evaluat e th e GS A fare s i n plac e t o IC T an d MH K i n orde r t o determin e wha t

th e appropriat e GS A fare woul db e fo r thi s market . I n th e interim , atemporar y governmen t fare wil l b e se t

at $9 0 eac h way . Reliabilit y Essentia l ai r

servic e market s hav e areputatio n fo r bein g unreliable . Ther e ar e severa l definition s o f reliabihty . Th e typica l definitio n involve s makin g schedule d trip s o n o r

clos e t o schedule . Othe r definition s includ e a predictabl e ai r

far e structur e a s wel l a s sufficien t payloa dt o avoi dbumpin g passengers . I t

i s clear tha t man y EA S communitie s ar e needlessl y burnin g subsid y mone y becaus e thei r ai r servic e i s unreliable . TransportAzuma h wil l chang e thi s b y offerin g alarge r aircraf t (th e EM B 12 0 wit h 3 0 seats) , a compresse dfar e structure , an dhig h completio n levels . Subsid y Suppressio n Progra m I f th e USDO T permits , w e wil l appl y ou r Subsid y Suppressio n Progra mt o th e market . Ou r

progra mwil l consis t

o f promotiona l fare s an denhance d marketin g designe dt o reduc e th e subsid y provide db y USDOT . I t i s simila r i n concep t

t o Ai r Midwest' s progra mtha t increase denplanement s i n numerou s markets . Ever y dolla r tha t i s pu t int o thi s progra mwil l reduc e th e subsid y amoun t

b y $1.25
. I n orde r

t o b e effective , th e Subsid y Suppressio n Progra mmus t

b e pu t int o actio n a s soo n a s awar di s made . Join t an d Throug h Fare s A s ane w carrier , airline s wil l requir e u s t o b e i n th e ai r 3- 6 month s befor e signin g a n interlin e agreement . Ou r contrac t wit h Charte r

Ai r Transpor t include s acces s t o thi s capability . A t tha t point , join t

an dthroug h fare s ca n b e considere dan dinterlin e acces s ca n b e se t up .Servic e Level s & Subsidie s

SLN' s servic e shoul db e se t up i n acomplementar

y manner wit h MHK' s services . Sinc e th e MHK-DF W route flown b y America n i s bes t fo r customer s headin g west , th e SLN-MC I rout e ca n bes t servic e traffi c headin g east . TransportAzuma

h ha s provide d tw o option s fo r consideration : Optio n 1:1 2 weekl y R

T SL N - MC I (Subsidy : $2,806,156 ) Optio n 2:1 8 weekl y R

T SL N - MC I (Subsidy : $3,868,860 ) Contac t Informatio n Joe l Anabilah-Azuma

h jazumah@transportazumah.co m