### Before the United States Department ofTransportation· January31,2013 

## z;:u

Proposal to Provide Essential Air Service at MACON, GEORGIA Docket OST-2007-28671
Under49 U.S.C. 41731 et seq.



### Proposal of SeaPortAirlines, Inc. to Provide Essential Air Service at Macon, Georgia Q: 

## 32

By Order 2013-1-5, the U.S. Department ofTransportation ("the Department") requested proposals for Essential Air Service (EAS) at Macon, Georgia no laterthan January 31, 2013. In response, SeaPort Airlines, Inc. respectfully submits this proposal to provide subsidized essential air service to the community of Macon, Georgia. The proposal contained herein provides a service pattern that connects Middle Georgia Regional Airport with the national airtransportation system via Charlotte, NC (CLT) and Nashville, TN (BNA). This proposal is for a two-year period at an annual subsidy rate of$2,499,837. This proposal is contingent on the Department issuing a Service Change Order for EAS at Athens, GA, as described herein. This change in service has agreement from the Athens community, and does not increase the level ofsubsidyforAthens (Docket OST-2002-11348) previously awarded to SeaPortAirlines bythe Department. After this proposal is docketed, SeaPort Airlines will contact the Airport Director at Middle Georgia Regional Airport to schedule a meeting with the community, explain our proposal in detail, and answer any questions. In the interim and throughout the carrier selection process, questions regarding this proposal should be directed to:
Timothy Sieber Vice President

- Commercial SeaPortAirlines, Inc. 7505 NE AirportWay Portland, OR 97218 (971) 340-1716 tsieber@seaportair.com

# SEA·:tPORT

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# Description of Proposed Service
Company Introduction SeaPortAirlines, Inc. is a FAA certified scheduled airline based in Portland, Oregon with 30 years of experience in commercial aviation. In addition to Portland, the company has operational bases at Memphis (MEM) and Juneau (JNU). Service from a fourth operational base located at San Diego (SAN) is scheduled to begin on March 1, 2013 with service to lmperiai/EI Centro, California. Our approximately 185 professionals operate a fleet of 14 aircraft on an average of 90 scheduled departures each day, increasing to over 100 each day during the peak tourist season in Southeast Alaska. 1 Including new service to lmperiai/EI Centro, the company serves 21 cities in nine states as illustrated on the map below. 

# WHEREWE FLY

1 SeaPortAirlines operate in SoutheastAlaska branded as "Wings ofAlaska." The company operates an additional 8- 10 "flightseeing" tours each day during the summer, which are marketed by major cruise lines such as Princess, Carnival, and Royal Caribbean directly to their passengers onboard the ships. These flights, which offer views of Alaska landscape and wildlife, are not included in the count ofscheduled departures.
OST-2007-28671 January 31, 2013 Page 12SeaPort Airlines' service to eight of the communities on our route map is provided under the EAS program: Athens, Georgia; Pendleton, Oregon; El Dorado, Hot Springs, and Harrison, Arkansas; Salina, Kansas; Jackson, Tennessee; and lmperiai/EI Centro, California.
A primary focus ofSeaPortAirlines is to provide affordable and reliable air service to small and rural communities across America. This includes many communities that the major airline brands no longer view as strategically important to their own business objectives or are unable to serve profitably orwith a reasonable level of subsidy. This is due to passengerticket revenue being below the threshold necessary to support cost structures and increasingly larger aircraft of regional airlines that provide capacity on a contract (i.e., "fee perdeparture") basis. Simply put, while the big guys are focusing on slots in Munich our concern will be forthe needs ofcustomers in Macon. To serve these communities, SeaPort operates aircraft with operating costs and passenger capacity that are appropriate to a market's true demand. This strategy allows us to offer higher frequencies and greater choice of departure times than is possible with larger aircraft, including the next increment in plane size seating 19-30 passengers. The pricing strategy employed by SeaPort Airlines in EAS communities is to incentivize use of the local airport so that enplanements maintain EAS program eligibility, but do not result in shifting the "true cost" of air travel to the Department's EAS budget. Most importantly, we are focused on providing our customers with attentive and personal servicethat, in many ofour markets, is commonly known as "The SeaPort Experience." Once SeaPort Airlines is awarded an EAS contract and service is launched, we develop a partnership with each community by participating in local events, donation of tickets, on-going dialogue with airport management and community leaders, and presentations to civic clubs and other similar organizations. We also have a reputation of being responsive to community needs, affording them the opportunity to comment on schedule and fare changes before they become effective. It is SeaPort's view that airlines and communities, who we view as our customer, need not be at odds with each other. We have a shared interest in fostering grass roots support for local air service, which therefore builds enplanements to the level needed assuring continued eligibility in the EAS program. Our commitment to communities similar to Macon is demonstrated by the fact that in every "Lower 48" community that SeaPort serves in the EAS program, we have been re-selected for subsequent terms at the end of our first contract period. This includes reselection during 2012 to four-year contract renewals (rather than the standard two-years) at both Salina, Kansas and Pendleton, Oregon, after both communities voiced theiroverwhelming supportfor SeaPortAirlines. Later in this document we have provided comments submitted by customers and airport managers that lend support to our commitment and capability to deliver outstanding customer service. Nonetheless, we encourage the Macon community to contact the airport manager in any of our EAS communities to discuss the responsive, affordable, and reliable air service that SeaPort Airlines provides them with each and every day. Aircraft SeaPort Airlines presently provides service in all of our EAS communities with single engine aircraft and, as noted above, every one ofour EAS communities in the Lower48 has reselected us for additional contract periods with those same aircraft. We strongly believe that modern singleengine aircraft represent the best platform to provide EAS service that is frequent, affordable, and reliable.

OST-2007-28671 January 31, 2013 Page 

### 13

# SEA ORT

Specifically, SeaPort Airlines' proposal at Macon contemplates operations with Cessna Caravans which will allow us to offer safe, comfortable, and affordable air transportation in a modern and economical aircraft. We suspect that many air travelers that use Middle Georgia Regional Airport are familiar with the Cessna Caravan, as this is the same aircraft presently operated by Pacific Wings dba Georgia Skies (this is where any similarity with Pacific Wings ends). Given the urgent need to rebuild customer confidence in air service at Middle Georgia Regional Airport, we believe that the attributes ofthe Cessna Caravan are perfectly suited for this market. Produced in the USA, the "Caravan" was originally designed in the 1980's to replace an aging fleet of piston-powered aircraft, such as the De Havilland Otter and Piper Chieftain. Over 2,000 Caravans have been built logging a total of over 12.5 million flight hours. The Caravan is certified for single-pilot operation, however SeaPort typically operates with both a Captain and First Officer.



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# SEA/PORT

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### The large cargo pod on the Caravan allows for more baggage than can be accommodated on older piston twins (i.e., Piper Chieftain and Cessna 402) and allows us to segregate passenger baggage for security purposes.2

2 The cargo pod on the Cessna Caravan has a maximum capacity of 111 cubic feet and 1,090 pounds. In comparison, the Piper Chieftain has a maximum capacity of 65 cubic feet and 700 pounds in its nose compartment and two wing lockers.

OST-2007-28671 January31, 2013 Page 

### 14

# SEA,~tPORT

Proposed Service Pattern
In Order 2013-1-5, the Department noted "With specific respect to Macon, given the very low passengerlevels, we askthatcarriers submitproposals fortwo nonstop roundtrip flights perday (12 

### a week) to Atlanta with anysized aircraft. We will also entertain proposals to seNe otherhubs that provide access to the national air system in order to give the Department and the community as broadan arrayof proposals aspossible from which to choose.'0
Our proposal to provide EAS at Macon includes 12.5 weekly nonstop roundtrips (25 segments) to Charlotte and 6 weekly roundtrips (12 segments) to Nashville International Airport on a one-stop basis over Athens, GA. We recognize that 18.5 weekly roundtrips is higher than directed by the Department, however our experience rebuilding traffic in EAS communities where Pacific Wings was the previous carrier, indicates that a minimum of 18 weekly roundtrips is necessary for Macon to achieve the required enplanement levels needed for continued eligibility in the EAS program. When this concern was expressed to the Department, staff indicated a willingness to consider all reasonable proposals. Forthe reasons outlined below, SeaPort Airlines respectfully submits thatthis proposal follows the verbal guidance ofstaff: Connecting Hubs: Charlotte & Nashville As noted, in Order2013-1-5 the Department requested proposals for EAS service toAtlanta but also provided for other acceptable alternatives. SeaPort Airlines has included in this proposal a service pattern that includes service to Charlotte and Nashville. SeaPort Airlines believes that a key component of rebuilding traffic at Macon and further differentiating itself from the previous EAS operator, is to offer customers a preferable "Atlanta Alternative." Charlotte and Nashville meet that objective and, as the table and discussion below illustrate, are viable proxies to Atlanta in providing Macon's needed access to the national air transportation system. 

# + Charlotte is the largest hub for US Airways and the carrier's recent growth there has included a growing number of nonstop flights to Europe and the carrier's first ever service to South America. Since first being developed by Piedmont Airlines in the early 1980's, the Charlotte hub has built a reputation as a convenient alternative to the congested skies and massive terminal complex of Atlanta. Finally, given Charlotte's role as a viable alternative to Atlanta and lack of an American Airlines hub in the region, a US Airways-American Airlines merger would be very likelyto positively create additional connection options at Charlotte. 

# + Nashville's service profile is very different than Charlotte's, increasing the overall benefits that a second hub typically offers. Whereas Charlotte has nonstop service to over 100 destinations due to its role as hub for a major airline (US Airways), over 50% ofthe seats offered at Nashville International Airport are provided bythe country's largest low-fare airline: SouthwestAirlines.

3 OST2013-1-5, pg. 3
OST-2007-28671 January 31, 2013 Page 

### 15

## Comparison ofService Levels & Average Fares Atlanta v Charlotte & Nashville Com arative Metric Atanta ATL Nashville BNA Charlotte CL Schedule Data- March 2013 Number ofAirlines (1) 15 8 9 Number of Nonstop Destinations 216 47 139 Avg Daily Departures

- ALL Carriers 1,247 185 730 Avg Daily Departures

- LowCost Carriers 173 98 22 % of Departures on LCC (2) 14% 53% 3% Avg Daily Departing Seats- ALL Carriers 154,224 19,133 72,234 Avg Daily Departing Seats- LowCost Carriers 23,367 10,303 3,122 % of Seats on LCC 15% 54% 4% Avg Seats per Departure 123.7 103.4 99.0 Fares & Traffic Data- YE 302012 Total Domestic O&D Passengers (3) 13,619,366 3,743,496 4,709,425 Avg Domestic Fare (incl. taxes & fees) $225.03 $210.45 $236.58 NOTES (1) "Number ofAirlines" counts AirTran + Southwest and American + US Airways as separate airlines (2) LCC's include AirTran, Southwest, Frontier, andjetBiue (3) Only includes those passengers walking in orout ofterminal front door, passengers who connect have been filtered from count
Frequency Level Ifselected, Macon will be the third community where SeaPortAirlines replaces Pacific Wings as the provider of EAS. Under Pacific Wings, enplanement levels declined precipitously during that carrier's tenure through no fault ofthe community. The end result has been inclusion of a warning from the Department about continued eligibility for EAS when issuing an Order seeking proposals for replacement service. The Department included such language in Order2013-1-5, but also included a request that carriers submit proposals which include 12 weekly roundtrips at Macon. Based on our experience as the replacement carrierfor Pacific Wings in other markets, SeaPortAirlines firmly believes a minimum of three weekday roundtrips is necessary. Lower frequency levels would work against the aligned objectives of the Department, community, and SeaPort Airlines to achieve the desired 10 enplanementsto maintain the eligibility of Macon in the EAS program. Finally, Order 2013-1-5 requesting 12 weekly departures was issued after Sun Air, which the Department had selected to provide EAS at Macon four months earlier, notified the Departmentthat it would be unable to begin the service.4 In that Order, the Department awarded Sun Air annual subsidy of$1,946,266 to operate 24 weekly roundtrips (48 segments) between Macon and Atlanta. In comparison, SeaPort Airlines is requesting $2,499,837 to operate 18.5 weekly roundtrips to Macon, split between Charlotte and Nashville. The 28% difference in subsidy between SeaPort's proposed service pattern and the service pattern previously selected by the Department,**i~** primarily due to the longer stage length to the proposed hubs relative to Atlanta and, to a lesser degree, Seaport's plan to fly modern single-engine turboprops versus the piston-twin that Sun Air had planned to operate.

4 Order2012-9-6

OST-2007-28671 January 31, 2013 Page 

### 16Illustrative Flight Schedule
An Illustrative schedule for the service pattern in this proposal is provided below. If selected to provide EAS at Macon, SeaPort Airlines will solicit community comment on proposed flight schedules prior to making them available for sale to the public. As much as practical, these comments will be incorporated into the final schedule and factoring any impact on flight schedules at Athens.

Depart

5:45am 2:30pm

9:45am Arrive 

## DocketOST-2007-28671 Macon, GA (MCN) Proposed FlightSchedule Frequency Stops Depart Arrive Frequency From Macon to Charlotte From Charlotte to Macon

7:35am Daily 0 8:30am 9:25am ExSun 4:20pm ExSat 0 5:00pm 650pm ExSat From Macon to Nashville From Nashville to Macon

11:40am ExSun 1 12:30pm 3:10pm ExSat "Stops
0 0
1
We believe the schedule outlined provides a choice of departure times for the consumer while allowing us to route the aircraftto our Memphis maintenance base via revenue flight segments. This benefits the Department by resulting in a lower overall subsidy request. Contingency: DepartmentApproval ofChange in Service Pattern atAthens, GA By Order 2012-9-27, the Department selected SeaPort Airlines to provide EAS at Athens, GA for a two-yearterm.5 The service pattern selected by the Department and presently operated by SeaPort is 12 weekly roundtrips between Athens and Nashville at an annual subsidy of$1,533,093, or$1,257 per departure during the first year ofservice, increasing to $1,630,430 in the second year ofservice, or$1 ,320 perdeparture. This proposal to provide EAS at Macon is contingent on the Department issuing an Alternative Service Order allowing SeaPort Airlines to adjust the service pattern and frequency level it provides at Athens, GA. The request for a service pattern change by SeaPort Airlines and letter from the Athens community confirming their support ofthis change will be filed separately in the Athens EAS Docket. The requested change would result in SeaPort operating 11.5 weekly roundtrips (25 segments) between Athens and Charlotte, 6weekly roundtrips (12 segments) between Athens and Nashville (6 roundtrips), and 6 weekly roundtrips (12 weekly roundtrips) between Athens and Macon. The schedule resulting from this change is illustrated on the next page.

5 Docket OST-2002-11348
OST-2007-28671 January 31, 2013 Page 

### 17

## DocketOST-2002-11348 Athens, GA (AHN) 

# SE

Proposed FlightSchedulew/ Change in Service Pattern Depart Arrive Frequency Stops Depart Arrive Frequency Stops FromAthensto Charlotte FromCharlotteto Athens 6:00am 6:55am ExSun 0 9:30am 10:25am Daily 0 4:00pm 4:55pm ExSatSun 0 6:30pm 7:25pm ExSat 0 FromAthensto Nashville From NashvilletoAthens 10:45am 11:40am ExSun 0 9:15am 12:05pm ExSat 0 

# ORT

This request for a change in service pattern would result in no additional expense to the EAS program. Specifically, for the same amount ofannual subsidy awarded in Order 2012-9-27, SeaPort Airlines will request that it be permitted to operate 11.5 weekly roundtrips between Athens and Charlotte and 6 weekly roundtrips between Athens and Nashville. This would equate to a subsidy perdeparture of$1,117 forthe remainder ofyear one and $1,173 forall ofyeartwo.6 Finally, note thatthe service pattern would result in an average ofthree daily departures from Athens to a hub airport: 2 to Charlotte and 1 to Nashville. The nonstop flights to Charlotte ensure that Athens travelers have exclusive access to the same number ofdeparting seats as with the current service pattern. Assuming a 50/50 split of the seats onboard the MCN-AHN-BNA flights, the net result is an increase of4.5 daily departing seats for atotal of22.5 perweek. Pricing Model
In all markets, regardless of whether on subsidized or strictly speculative basis, SeaPort Airlines offers a range offares that, as noted above, strike a balance between stimulation ofmarket demand and avoids shifting the "true cost" ofairtransportation to the Department. All of SeaPort's fares are priced on a one-way basis, including all taxes and fees, and structured as follows:The highest price point (branded as "FuiiFiex") provides our customers with total flexibility to change their travel plans or, if they choose, obtain a full refund without incurring a service charge. The lowest price point (branded as "NoFiex") targets customers who are certain about their travel plans. This fare requires an advance purchase of 21-days, is non-refundable, and does not permit any changes from the original booked itinerary. 

## + In between, SeaPort offers a range offares ("Free2Fiex" and "Fiex4Fee") with price points based on how much flexibility a customer has in theirtravel plans. Exceptforthe two highest price points, fares are also subjectto capacity controls meaning that the farther in advance a reservation is made, the more likely a customer is to geta lowerfare. The table below summarizes the range of proposed ticket prices in the Macon market, as ofthe date of this proposal and after expiration of introductory fares, along with the rules and restrictions applicable to each price point.

6 As the subsidy request for EAS at Macon includes the 12 weekly segments between Macon and Athens that provide the Macon communitywith one-stop access to Nashville, these are not included in the calculations ofsubsidy perdeparture.
OST-2007-28671 January31, 2013 Page 

### 18

## SeaPortAirlines Illustrative Fares Macon, GA

# SEA:s~PORT ==:=.,\IS:l.:

Fare Category+ FuiiFiex Free2Fiex Flex4Fee NoFlex

..,._, SummaryofFare Rules Booking Class/Fare Basis Code YR B3F M3L Q14L L21X Min. Advance Purchase (Days) 0 3 3 14 21 Change Fee $0 $0 $50 $50 Not Permitted Refundable Yes No No No No FlyerFiex Loyalty Program Credit 200% 150% 100% Macon- Charlotte (Avg $66.10) $109 $89 $69 $49 $39 Macon

- Nashville (Avg $69.55) $119 $99 $79 $59 $49 NOTE: Listed price points include Federal Excise Tax, segments fee, and 9/11 securityfee SeaPort Airlines' calculation of subsidy requirements is based on a projection of an average ticket price of$68.69 and $91.04 to Charlotte and Nashville, respectively. No local passengers or revenue are assumed forthe "tag segment" between Macon and Athens. During the first 30 days ofservice, SeaPortAirlines would offer an introductory fare of$39 (including all taxes and fees) on every seat, on everyflight to and from Macon. Our experience at both Jackson · and Athens indicates that this type of pricing incentive is necessary to entice customers back to the local airport and provide SeaPort Airlines the opportunity to differentiate itself from the previous provider of EAS.
In addition to reasonable fares, SeaPort Airlines seeks to attract customers with customer friendly policies and reasonable fees and service charges. For example, SeaPortAirlines does not charge a fee for the first checked bag, and the second checked bag is only $25. We do not penalize customers with a "service charge" for service from a real person, either via our toll-free telephone reservation center orat airportticket counters. 7
SeaPortAirlines believes that this combination offares and polices, combined with reliable operation of the outlined service pattern, will be effective in restoring confidence in air service at Middle Georgia Regional Airport, and help ensure thatthe community maintains EAS eligibility by achieving a minimum of 10 enplanement perday. InterlineConnectivity& GDS Display SeaPort Airlines tickets may be purchased by calling our toll-free reservation number, online at www.SeaPortAirlines.com, at any travel agent connected to the major global distribution systems (GDS), or all of the major online travel agencies and meta-searchers such as Orbitz, Travelocity, Expedia, Kayak, Hipmunk, and CheapoAir. SeaPort presently has an interline ticketing agreement with US Airways, the dominant carrier at Charlotte Douglas International Airport and is working toward implementation of an interline agreement with a major airline by the end ofthe first quarter of 2013 which includes E-ticketing and thru baggage check-in. SeaPortAirlines is in discussions with two other majorairlines and, following the current implementation, anticipates beginning implementation ofthe next agreement.

7 Similar to our strategy of utilizing our own personnel at airports described elsewhere in this proposal only SeaPort Airlines employees answer our reservation lines. We operate a modest reservation call center at Memphis International Airport and, during periods of no flight operations, calls are routed to airport ticket counters. The company has plans to open its first Spanish-speaking call center in El Centro, California.
OST-2007-28671 January 31,2013 Page 19Airport Locations & Staffing Plan SeaPort Airlines views the use of our own employees as a critical part of our formula to provide excellent customer service and build a partnership in our EAS communities.8 If selected to provide EAS at Macon, we would utilize our own personnel to provide customer service and ramp operations, and maintain the security screening operations that are performed by the Transportation SecurityAdministration (TSA). The company has an established contract with American Eagle Airlines at Nashville International Airport to provide passenger and aircraft servicing for our existing EAS service to Athens, GA and Jackson, TN. We anticipate entering into a similar agreement at Charlotte Douglas International Airport if selected to serve Macon and, consistent with the view articulated above, will have our own staff Middle Georgia Regional Airport. All Macon flights would be operated by crews from our pilot base at Memphis International Airport, which also is the location of our Mid-South maintenance operations. For unscheduled maintenance at Macon and other airports in the proposal's service pattern, SeaPort Airlines will (or has, as applicable) contract with an FAA certified Part 145 repair station for "on-call" maintenance. Marketing & Public Relations Strategy Recognizing the lowvolume oftraffic underthe current EAS provider and the requirement ofat least 10 enplanements per day for continued EAS eligibility, SeaPort is prepared to implement a comprehensive marketing and public relations strategy if selected to serve the Macon market. In addition to local advertising, these activities include:

• Local Event Marketing: Recognizing the success ofvisible participation in local events for both legacy and low-cost airlines, SeaPort has implemented a similar strategy in all of its communities. These have ranged from SeaPort Airlines community Easter egg hunts, to presenting at business expos, to hosting "after hours" events at local Chamber of Commerce meetings. In addition, SeaPort often makes "in kind" donations of tickets for use by local charities, eitherfortheir own business needs or as a fundraising tool (i.e., raffles, silent auctions, etc.). This type of public outreach maintains awareness ofthe local airport, which is often on the edge ofthe community and suffers from an "out ofsight, out ofmind" syndrome.

• Social Media: SeaPortAirlines effectively leverages social media to engage our customers in a dynamictwo-way conversation using Internet sites such as Facebook, Twitter, and Linkedln. We have found social media to be an excellent tool for generating passenger referrals and information sharing in our communities, and expect similar results in Macon. As a measure of how successful our social media strategy has been, the only U.S. regional airline with more "Likes" on Facebook than SeaPort Airlines is an airline that carries five-times as many passengers each year.

• FlyerFiex Customer Rewards: To thank our customer's fortheir business, SeaPort maintains a customer loyalty program called "FiyerF/ex." This program provides a variety of benefits to our frequent flyers including free flights, waivers to excess baggage and ticket change fees, and, coming in 2013, participation in the TSA's "Pre-Check" program.

8 The exception to this is Jackson, TN where the FBO (owned and operated by the Jackson-Madison County Airport Authority) has been contracted to provide passenger check-in and aircraft ramp handling for a market-standard fee per departure. This agreement was only entered into after concluding the airport authority shared our view that exceptional customer service was a requirement to rebuild traffic following the previous EAS operator, and that its geographic position of our Mid-South route system would allow us to maintain a community presence and be responsive in atimely mannerto customerservice issues.
OST-2007-28671 January 31, 2013 Page 110

# EA ORT

• Value Accounts: SeaPort offers Corporate Value Accounts that encourage businesses to make a long-term investment in their local air service by offering a variety of benefits, such as waivers to change fees and savings of 5% to 15%. It is important to note that unlike the corporate travel programs of major airlines that are not designed to serve small businesses in rural communities, SeaPort's program can provide savings to a company ofvirtually any size and can be used by any employee ofa company. In this proposal, SeaPort Airlines has allocated $50,000 per year for marketing and sales activity in Macon. This budget factors media costs in the Macon media markets and that traffic typically originates in the EAS community rather than the hub market. This advertising budget will be effectively leveraged with "new media" such as social networking, blogs, opt-in email, etc., all intended to engage customers and build relationships on a more personal level. Equally as important, there are lessons learned from our service in Jackson, TN (McKellar-Sipes Regional Airport) that will be valuable in the effort to rebuild traffic levels at Macon. At Jackson, we replaced Pacific Wings, the same carrier which presently serves Macon, and like Athens that community experienced a significant decline in ridership over the carrier's tenure as the EAS provider. While we implemented the marketing strategy described above, offered affordable fares, and operated with high dispatch reliability, the increase in traffic while dramatic compared to our predecessor initiallywas not as strong as we had hoped. In response, we reached out to decision makers at companies in the Jackson market known to generate demand for airtravel. At these face-to-face meetings, we explained details of our service, emphasized differentiation with the previous operator, outlined the importance ofsupporting local air service and its impact on the Jackson economy, and communicated the requirements for continued eligibility in the EAS program. This strategy, which effectively was a throwback to when airlines sold business travelers using sales calls rather than email, produced results.9 Enplanements at Jackson have increased and SeaPort intends to use this experience as a template for producing similar results for Macon.

9Considering the well-publicized performance ofthe previous EAS operator, we knewthat rebuilding customertrust in air service offered at Jackson (McKellar-Sipes Regional Airport) would be a "process" not an "event." Because the TSA has refused to provide passenger screening at Jackson, arrivals at the connecting hub must be in a non-sterile area away from the main passengerterminal, and shuttling passengers in a van to the main terminal for connecting flights. We are working with elected representatives, as well as bureaucratic channels, to reverse the TSA's decision that is negatively impacting perception of local air service and impeding our abilityto rebuild traffic.
OST-2007-28671 January 31, 2013 Page \11

# Community 

# & Customer Feedback

The Department noted in Order 2013-1-5thattraffic at Middle Georgia Regional Airport has fallen off significantly during the years that it has been served by Pacific Wings. In this proposal, SeaPort Airlines has identified a number of specific actions it will take to halt this slide and rebuild traffic at Macon.
Most ofthe identified tactics have been utilized with success at both Jackson, TN and Athens, GA. These communities faced the same challenge for the same reasons that Macon does today. Using many ofthe strategies and tactics outlined in this proposal, SeaPort has made measurable progress toward the 10 enplanements per day needed for continued EAS eligibility. The most effective of these tactics, however, will simply be for SeaPortto do what it does best and does every daywhich is to build a partnership with the community, operate safely and reliably, and provide our customers with a greatexperience: "The SeaPort Experience."
Provided below is a small sample ofthe comments that SeaPortAirlines regularly receives from our customers and from EAS community partners: Our Essential Air Service Community Partners

"Eastern Oregon Regional Airport at Pendleton had been struggling since schedule changes following 9111 served by

### a carrier flying 37 seat aircraft. Lowpassenger count attributed to poor schedule, which then contributed to poorerpassengercount. The carrier's solution was to bring in larger aircraft and fly to 

### a different hub. The Airport and community balked at this suggestion and wentin search ofalternatives. The solution found through the EASprocess was SeaPortAirflying

### a 9 passengerPilatus. The passengers have welcomed the newservice, much betterschedule, and are elated with 'no securitycheck'andstandbytime. Passengers today will say, '/love the service', 'greatcustomerservice,'and 'I'm sure gladIfinally triedit, cause I'llbe back' "In ourparticularmarket, the 9passengeraircraftis perfect, and SeaPortAirprovides the schedule, theprofessionalism, andcustomerservice we needanddesire." Larry Dalrymple (Retired) Airport Manager Pendleton RegionalAirport

"/ understand the importance ofhaving dependable, reliable airservice with an affordable cost. Not only will SeaPortAirlines meet these needs, butexcel byproviding great customerservice, 

### a high levelofcommunityinvolvement, andan eagerness to become

### a communitypartner'.
Luci Larson Former MayorofSalina & OwnerofAction Travel Salina, KS

"South Arkansas Regional Airport and the entire South-centralArkansas region suffered from the loss ofairservicepreviouslyprovidedbyMesa Airlines in the Spring of2008. Unreliable service and 

### a poorschedule were alreadynegativelyimpacting enplanements before Mesa pulledout, butatthat

OST-2007-28671 January 31,2013 Page \12

# EA>tPORT

point, the nearestoption forairse!Vice ofanykind was almost

### a two hourdrive away. Aftersorting through applications from many different interested carriers, the El Dorado Airport Commission, along with El Dorado's Mayor, chose SeaPortto restore airservice to South Arkansas. This was the beginning of

### a greatpartnership between SeaPortandourlocalcommunity. "Working with SeaPort has been nothing but 

### a pleasure from the bottom to the top of their organization, and theircommitment to excellence shines through the glowing comments that I hear from people who fly with them. In addition to hearing comments from others, I have flown SeaPort on several occasions, andhave come awayfrom the experience thinking 'This is howallairservice shouldbe."

Our Customers Josh Zylks Airport Manager SouthArkansas RegionalAirport (Goodwin Field)

"I'm 

### a SeaPortMKL-BNA commuter. Myjob is on the 

### 5 day4 nightplan andIheadoutto worksites across the nation on Monday and fly home in time for dinner on Friday. Thanks Seaport for the se!Vice itbeats using

### a carandparkingatthe airport." Calvin Phillips (Jackson to Nashville)

We needed to change our reservation with SeaPort after having booked with priceline.com. Priceline was less than helpful. Frustrated I emailed SeaPort with our needs about 10:30PM. The next morning at 9:00 we got a call from Cindy in reservations advising that our request had been taken care of and was already booked. I NEVER EXPECTED THIS LEVEL OF SERVICE! We are satisfied and grateful forthe intense personal attention we received. Michael McDonell (HotSprings

- Dallas)
"MyhusbandandIrecentlyhadto make

### a fast trip to Dallas forthe funeral of

### a dearfriend. I was not interested in making that drive over

### a fast weekend. Then I remembered that SeaPorthadrecently started flights between Hot Springs andDallas. I called SeaPort, Jim and Bob were so quick to get us booked, lastminute so we could fly down andattend the funeral and visit with family andfriends that we don'tgetto see veryoften. Everyone was so friendly, helpfulandprofessional. It was a dream trip, even to attenda funeral. The pilotgoing down was so kind. When he found out thatmyhusbandhadbeen 

### a ball turretgunnerin WW/1, he gave him 

### a setofheadphones so he couldlisten to the communication between the pilots andthe airtrafficcontrollers. To saythe least, myhusband was impressed. It was such 

### a blessing to have been taken care ofin such

### a kindandprofessionalmanner, especiallyunderthe circumstances ofourtrip. Thankyou, Jim, Bob, Chris, Doug, RodneyandMichael."

OST-2007-28671 January 31, 2013 Catherine Martin (HotSprings to Dallas)

Page 113'''"'===AI LlNES

"Fortwo decades Ihave been picking mymotherup at the airportandfortwo decades Ihave been met with the defeated, hang-dog look that the ordeal ofair travel has given her. I guess itpretty much does it to all ofus, but (as she is wellinto her80's) I worryaboutthe tollit takes on hermore andmore lately. "When Ipickedherup today from herSeaPort flight K52325 from Dallas andsawshe was smiling, you could have knocked me over with 

### a feather! She couldn't stop raving about howpleasant the flight was. Letme be clear. Mymotheris 

### a tough-as-nails Mid-western Yankee from the old school who has been around the world 

### a couple oftimes since the late 1940's. She doesn't bestow idle praise andshe seldom raves. "I'm in the service industrymyselfand I knowhowoften complaints come through. Ijust want to be sure to letyou knowhow well everyone did on this flight. In the future, I willlook to SeaPortfirst for mytravelneeds andwillspreadthe good wordto myfriends.
"A smile and

### a kind wordgo

### a long wayy'all. Thankyou forgetting this one so right."

"Lovedit

...only wayto travel!" Mark Davis Peterson (Dallas to Memphis)

Phyllis Donnally (Dallas to Hot Springs)

"I cannot say enough wonderful things aboutmyexperience with yourcompany. My son, who is 7, flew for the first time as an unaccompanied minor. Let'sjust say that my son and I were very nervous. On arrival to Kansas City I was welcomed with front row parking and an employee that was welcoming andreassuring. When his plane landed the pilot, Demetrius came and talked to me and myson fortwentyminutes aboutsafetyandjustreassuring me. He then allowedme to walkmyson to the plane andsee him off. Demetrius startedbuckling myson into his seatandmyson startedto cry, I could see him reassuring him that everything was going to be ok. All ofyouremployees were wonderful and were conscious ofsafety and the well-fare ofmyson. My son's flights from Kansas City to Memphis were wonderful and because of the extra attention he feels comfortable and unafraidofflying byhimself You have made me a lifelong customer. My son will be flying at least once a year to see his Grandparent. I have toldallmyfriends, family andco-workers aboutyourcompany andhowifthey have an opportunitytheyshouldfly with SeaPort. Thank You again formaking

### a nervous motherand 

### a scaredchildfeelcomfortable." Misty Strayhorn (Kansas Cityto Memphis) "I would like to tellyou ofmy recent experience atyourairline in Memphis, TN. On the evening of September25th I tookmyfriend to the airportto catch herflightto Harrison, AR. I wentinside to help herwith herbags andto saygoodbye. Returning to mycarto leave it wouldnotstart. I wentback to the waiting area to ask the ladyatcheckin ifsomeone that worked there mighthavejumpercables.

OST-2007-28671 January 31, 2013 Page 114===AiRLI
Waiting

### a few minutes Isaw

### apilotfriendofmine, MarkEmrath. He hadjumpercables butcouldnot getmycarto start. He wentforhelp andbroughtbackthree mechanics with tools. Markfinallyleftto go home afterstaying to help for over30 minutes. The othermen kept troubleshooting and finally removedthe batteryto have it testedfirstbefore makinganydiagnosis. Mydaughterhadleft work to come help me by this time and we went to AutoZone andpurchased

### a replacementbattery. When we returned to the airport the men putmynewbatteryin andchecked the carfluids andotherparts letting me know I needed to have some things fixed. As 

### a single lady

### it is always frustrating when I have carissues, so I was extremelygratefulforthe help IreceivedatSeaport. The mechanics atthe Memphis airline were so professional, courteous, andknowledgeable that I wanted to take the time to letyou knowhowmuch Iappreciatedthe SeaPortAirline employees helpingme." Nita Carr (Memphis to Harrison) On Saturday June 11, 2005, 17-year-old Theo Allen died after his glider crashed north of Pangborn Memorial Airport in Wenatchee, Washington. The following letter was received from his mother in June 2012: "I wanted to thankyourairline andpilots for one ofthe most amazing Mother's Day gifts. On the flight from Yakima to Wenatchee they diverted from the typical route and flew over the ridge my son's plane went down in hopes offinding 

### a marker. To see the world from 'Thea's' viewpoint that day was extremelyhealing. I willneverforget this kindness andhave toldmanyofmyfriends about yourairline."

OST-2007-28671 January 31, 2013 Susan Allen (Portlandto Wenatchee)

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# SEA 

# ORT

Subsidy Request 

# &Supporting Calculations

The following pages contain the service proposal of SeaPort Airlines to provide EAS at Macon, Georgia (Middle Georgia Regional Airport). As noted, this proposal is contingent on the Department's approval of SeaPort's request for a change in service pattern at Athens, GA. Our formal request, as well as a letter supporting this change from the Athens community, will be submitted tothat Docketseparately. We believe this proposal provides Macon with the assurance of reliable, affordable, and customerfocused air service, and look forward to partnering with the community, and the Department to rebuild enplanements at Middle Georgia Regional Airport. Respectfully submitted,
Timothy Sieber Vice President- Commercial SeaPortAirlines, Inc. January 31, 2013

OST-2007-28671 January 31,2013 Page 116OST-2007-28671 January31, 2013 ===J\1 Li ES


## SeaPortAirlines, Inc. Calculation of EAS Subsidy Requirementat Macon, GA 12.5Weekly RTs: Macon, GA- Charlotte, NC 6 Weekly RTs: Macon, GA- Nashville, TN (via AHN)

Operating Projections Average Sector Length (sm) Scheduled Departures Scheduled Block Hours Projected Completion Factor Projected Completed Departures Projected Completed Block Hours Passenger Projections Projected Passengers Passengers per Departure Projected Average Fare Revenue Passenger Miles (RPMs) Available Seat Miles (ASMs) Projected Load Factor Financial Projections Revenues PassengerTicket Revenues Ancillary Revenues Total Expenses Flight Operations AircraftOwnership/Lease Fuel & Oil Sales & Marketing Traffic Servicing Insurance Maintenance Sub-Total

- Direct Indirect Total Expenses Projected Operating Profiti(Loss) Subsidy Calculations Operating Loss Economic Return @ 5% 

# l Required Subsidy Subsidy per Departure Subsidy per Passenger Avg. Enplanements per Operational Day Proforma Projection
186 1,924 2,808.0

98.5%

1,895 2,779.9

6,429 3.4 $68.28 1,197,754 3,177,535 37.7%

$438,983 $8,780 $447,763
$262,702 $300,000 $788,107

$50,000 $413,506

$46,703 $581,413 $2,442,432

$364,806 $2,807,238 ($2,359,476)

$2,359,476

$140,362 $2,499,8371

$1,319.08

$388.82 10.3

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