2704 W
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TUPELO , MS 38801 

# TUPELO REGIONAL



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# . I TELEPHONE(662) 841-6570 FAX (662) 841-6571 www.flytupelo.com



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_T ~ July 9,2014 Mr. Michael Martin United States Department of Transportation Office of Aviation Analysis 1200 New Jersey Avenue SE , Room W86-472 Washington D
. C. 20590 ~ " " , .. \ j , ~ , J; t -, Reference DOT-OST-2009-0305 Dear M r. Martin, On Monday June 2nd, four airlines submitted proposals to provide essential air service (EAS) at the Tupelo Regional Airport
. This letter constitutes the comments ofthe City of Tupelo regarding the various air service proposals received. First, we wish to thank all four carriers for their interest in our market
. We feel this high level of interest confirms our belief that our Airport is capable of generating dramatic ai rline traffic increases , with the appropriate carrier and service level. We have met with or tal ked with each of the carriers and reviewed thei r proposals very careful ly
. After this review we would like to endorse the proposal of SeaPort Ai rlines to provide EASat our Airport. SeaPort's proposal calls for 30 round trip flights per week to Nashville and Memphis and requires an annual subsidy level of $2,506,436
. The carriers proposal offers the lowest subsidy level of any proposal of any carrier that submitted a bid. The bid also offers a high level of frequency and service to two h ubs. SeaPort is a well-established regional airline and already has facilities and operations at both Mem ph is and Nashville
. We look forward to significant traffic growth with SeaPort service. We are also confident that frequent service to Memphis and Nashville at this modest subsidy level will generate traffic well i n excess of the 10 enplanement per day requirements and also at subsidy levels well below $200 per passenger. We do , again , appreciate the i nterest i n our market by Aerodynamics , Inc. (ADI), AirChoiceOne and-Sun Air International. ADI proposed 12 round trips per week with ERJ-145equipment to Atlanta for a subsidy of $3
. 831 million. The carrier's proposal was tied to a similar proposal the carrier made to serve Hattiesburg and Meridian , Mississippi , with all three cities receiving essentially the same service pattern to Atlanta
. The carrier's bid was "al l or nothing", requiring ADI to receive EASdesignation at all three cities. Hattiesburg and Meridian chose to endorse another carrier with a lower subsidy level. Furthermore, we were concerned about the carrier's standing to provide scheduled air service
. While the carrier has the necessary FAA certifications , it did not appear to have a Clear path to DOT authority, nor did we get a2704 W. JACKSONST.

TUPELO, MS 38801 

# TUPELO REGIONAL

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# ....• TELEPHONE(662) 841-6570 FAX (662) 841-6571 www.flytupelo
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# -------~ 'T clear picture of the carriers status with regards to basic airline infrastructure, such as a reservations system. For these various reasons we ended ou r consideration of ADI's proposal. We are very i mpressed with AirChoiceOne's success in other cities but are deeply concerned about the higher subsidy level required in the carrier's proposals. The carrier subm itted four proposals to provide Tupelo EAS
.Two proposals were for Memphis service only, at 30 round trips and 36 round trips per week respectively. Two proposals were for a combination of Memphis and Nashville service, again with 30 and 36 round trips respectively. The lowest AirChoiceOne subsidy need was $2.9 million for 30 round trips per week to Memphis only
. The other proposals had progressively higher subsidy needs with the h ighest subsidy need being $3.9 million for 36 round trips to a combination of Memphis and Nashville. Tupelo understands that it is very likely that the $200 subsidy per passenger cap will be enforced in FY 2015. The carrier's uT2" proposal was the most attractive of the group, offering 30 round trips per week to a combination of Memphis and Nashville. However the subsidy need was $3,536,182 , which would have required generation of 17,681 annual passengers the first year at a 64
. 6% load factor (with n i ne seats). As much as we appreciate the carrier's success in other markets it does not today achieve that annualized load factor on any mature route , even using an 8-seat interior. Thus, we feel that achieving traffic to subsidy ratios at or below $200 using proposal T2 will be nearly impossible, at least in the first two years of service. Sun Air International proposed service to Memphis. The Memphis only proposal was $365,000 higher than that of SeaPort and would require annual traffic of at least 14,3550&0 to meet the $200 cap . The carrier's proposal forecast a load factor of 62%, yet the carrier has not achieved annualized load factors above 40% on any of its existing routes. We again thank all four carriers for their interest in the Tupelo market
. We look forward to working closely with SeaPort Airlines. It is our intention to dramatically increase our airline traffic over the next two years and further reduce our reliance on EASsubsidies. We urge the Department to promptly issue the EASaward to SeaPort so that service may begin i n the fall of 2014 and with adequate lead time, but also allowing our incumbent carrier, Silver Airways , to exit the market promptly. We thank the Department in advance for working with us as we navigate the challenges of preserving and growing our air service to meet the transportation needs of our region.

Fre ook Chair, Tupelo Airport Authority