Sovereign Mr, Inc, • py en ' ^ CRT/^TiON 

June 28, 2010 

Dennis J. DeVany, Chief 

EAS & Domestic Analysis Division, X-53 

Office of Aviation Analysis 

Department of Transportation 

1200 New Jersey Ave. SE 

Washington, DC 20590 

Re: Proposal to Provide Essential Air Service at: 

Huron, South Dakota, DOT-OST-2000-7138 

Dear Mr. DeVany: 

In response to Order 2010-5-26, Sovereign Air, Inc. offers the following proposal: 

Sovereign Air, Inc. (SAI) is planning to use one Beechcraft 9-seat King Air aircraft for this Essential Air 

Service route. 

We offer two options. Option 1 is for direct flights between Huron and Minneapolis (MSP). Option 2 

will service Huron, SD and either Brookings, SD or Marshall, MN and the MSP Hub. Sovereign Air 

believes that with good schedules, proper pricing and a recovering economy, the load factors will likely 

increase in these markets. SAI will base its aircraft, crews and maintenance personnel, banking and 

purchase fuel in Huron. This will help keep the EAS monies in the local community. Additional flights 

will be added as needed to accommodate periods of increased demand. 

SAI will have baggage and ticket agreements with the major air carriers in MSP by the start of this EAS 

service, SAI will also have cargo agreements for both domestic and international air freight movements. 

SAI will be HAZMAT approved and will be working in conjunction with hospitals to expedite various 

HAZMAT materials that they need to transport. 

SAI's goal is to work hand-in-hand with EAS communities to reduce the need for EAS subsidies within the 

next four to six years. 

Sovereign Air is currently in the process of acquiring its Scheduled Service Authority and anticipates 

being able to start this Essential Air Service by October 1, 2010. 

Sovereign Air will be fully integrated into the Global Distribution System (GDS) in conjunction with 

Worldspan. SAI is not tied to just one airline, allowing Sovereign Air better visibility in the various 

reservation systems. Passengers will have a broad range of channels through which to purchase tickets, 

including all airline reservation systems and travel agencies. Customers will be able to call our 

reservation office or visit our website to book flights. Passengers can also purchase tickets and make 

reservations at our ticket counters. 
SAI's final schedules will be developed by the EAS City Airport Board and SAI to reduce layover times in 

MSP and provide the best possible arrival and departure times for the travelling public. As such, the 

following schedules will likely be adjusted: 

Proposed Schedule (one-stop option adds 15 minutes to the MSP and the HON arrivals) 

Flt# 

10 

11 

20 

21 

Freq 

1234567 

1234567 

1234567 

1234567 

From 

HON 

MSP 

HON 

MSP 

TO 

MSP 

HON 

MSP 

HON 

Dpt-Arr 

6:50 -7:45 

9:30-10:25 

05:00-05:50 

09:00-09:50 
Option 1: (NON-STOP) One 9-seat Beechcraft King Air 

Sovereign Air, Inc. 

Annual Compensation Requirement for Essential Air Service for 

HON-MSP 

One 9-seat 

Aircraft Type King Air 

Available Seats Per Departure 9 

Passengers Per Trip 3.5 

Block Hours 1277 

Departures 1416 

Total Passengers 5,000 

Average Fare $39 one way HON-MSP 

Revenue Passenger Miles 1,240,000 

Available Seat Miles 3,160,512 

Passenger Revenue " $195,000.00 

Other Rev. @ .6 of pax. Rev. % $11,700.00 

Total Revenue $206,700.00 

Aircraft and Hull Insurance $222,000.00 

Fuel and Oil $402,246.98 

Flying Operations $263,043.99 

Other Direct Costs $213,803.85 

Maintenance $101,545.02 

$1,202,639.83 

$669,109.12 

Total Direct Costs 

Total Indirect Costs 

Total Operating Expenses $1,871,748.95 

Operating Loss $1,665,048.95 

Profit @ 5% $93,587.45 

Annual Compensation 

Requirement $1,758,636.40 

Completion Rate 97% 

Load Factor 40% 
Option 2: (ONE-STOP at either Brookings or Marshal) One 9-seat Beechcraft King Air 

Sovereign Air, Inc. 

Annual Compensation Requirement for Essential Air Service for 

HON-intermediate -MSP 

Aircraft Type 

Available Seats Per Departure 

Passengers Per Trip 

Block Hours 

Departures 

Total Passengers 

Average Fare 

$29 one-way HON-MSP 

$29 one-way intermediate stop-MSP 

One 9-seat 

King Air 

9 

7 

1277 

2124 

10,000 

Revenue Passenger Miles 

Available Seat Miles 

Passenger Revenue 

Other Rev. @ .6 of pax. Rev. % 

Total Revenue 

Aircraft and Hull Insurance 

Fuel and Oil 

Flying Operations 

Other Direct Costs 

Maintenance 

Total Direct Costs 

Total Indirect Costs 

2,480,000 

3,160,512 

$290,000.00 

$17,400.00 

$307,400.00 

$222,000.00 

$402,246.98 

$263,043.99 

$213,803.85 

$101,545.02 

$1,202,639.83 

$669,109.12 

Total Operating Expenses 

Operating Loss 

Profit @ 5% 

$1,871,748.95 

$1,564,348.95 

$93,587.45 

Annual Compensation 

Requirement $1,657,936.40 

Completion Rate 

Load Factor 

97% 

78% 
Customer safety and service are Priority One with SAI. Sovereign Air looks forward to providing 

Essential Air Service to Huron, South Dakota. 

Sincerely, 

Jon Payne, CFO 

Sovereign Air, Inc.