# August 26 , 2014

U.S. Department of Transportation

Office of the Secretary of Transportation

1200 New Jersey Ave., S.E.

Washington, DC 20590

Dear Ms. Remo:

Gem Air has updated financial forecasts to present to the DOT. The updated forecasts are below.

The changes include revised passenger counts for the first 6 months of commuter operations and

the resulting impact of this change on the 2014 balance sheet.

Thank you for your time and consideration.

Sincerely,

JoAnn Wolters

CEO

### Updated 8/26/2014

1 Operating Aircraft: Quest Kodiak 100 9 seats

Nov. - Jan Feb. - April 

### May - July Aug. - Oct. Total

Average Block Length (nm) 145 145 145 145 145

Scheduled Departures 130 130 130 130 520

Scheduled Block Hours 130 130 130 130 520

Projected Completion Factor 99% 99% 99% 99% 99%

Projected Completed Departures 129 129 129 129 515

Projected Completed Block Hours 129 129 129 129 515

Projected Completed Block Miles 18,662 18,662 18,662 18,662 74,646

Projected Passengers 227.5 260 650 585 1,723

Passengers Per Departure 1.8 2.0 5.0 4.5 3.3

Revenue per Passenger $199 $199 $199 $199 $199

Revenue Passenger Miles 32,658 37,323 93,308 83,977 247,265

Available Seat Miles 167,954 167,954 167,954 167,954 671,814

Projected Load Factor 19% 22% 56% 50% 37%

Revenue 45,273 $ 51,740 $ 129,350 $ 116,415 $ 342,778 $

Expenses

Flight Operations 19,500 $ 19,500 $ 19,500 $ 19,500 $ 78,000 $

Fuel & Oil 27,510 $ 27,510 $ 27,510 $ 27,510 $ 110,039 $

Sales & Marketing 5,000 $ 5,000 $ 5,000 $ 5,000 $ 20,000 $

Traffic Servicing 4,500 $ 4,500 $ 7,000 $ 6,500 $ 22,500 $

Insurance 4,800 $ 4,800 $ 4,800 $ 4,800 $ 19,200 $

Maintenance 16,900 $ 16,900 $ 16,900 $ 16,900 $ 67,600 $

Sub-Total 78,210 $ 78,210 $ 80,710 $ 80,210 $ 317,339 $

Indirect* 3,000 $ 3,000 $ 3,000 $ 3,000 $ 12,000 $

Total Expenses 81,210 $ 81,210 $ 83,710 $ 83,210 $ 329,339 $

Projected Operating Profit/(Loss) (35,937) $ (29,470) $ 45,640 $ 33,205 $ 13,439 $

Less:

Aircraft Lease 1,797 $ 1,473 $ (2,282) $ (1,660) $ (672) $

FET (3,395) $ (3,881) $ (9,701) $ (8,731) $ (25,708) $

Merchant fees (1,358) $ (1,552) $ (3,881) $ (3,492) $ (10,283) $

Net Operating Profit/(Loss) (38,894) $ (33,429) $ 29,777 $ 19,322 $ (23,225) $

Statement prepared on the cash basis

Initial service start-up will not require the hiring/training of additional personnel SMN-BOI-SMN Commuter Gem Air LLC

Hangar and office space is owned free and clear by JoAnn Wolters and Daniel Schroeder and is personally

contributed to the operation Financial Projections Commuter Operations Pro-forma Profit and Loss

The above pro-forma data, including load factors, are based upon local knowledge and historical operating data and

experience when Daniel Schroeder and JoAnn Wolters operated the same commuter route from 2001-2005 

### November 1, 2014 - October 31, 2015 with Commuter start date November 1, 2014

Scheduled frequency is 5 rounds trips per week year-round Operating costs are calculated based on the use of a leased 2006 Quest Kodiak *Indirect Expenses = Administrative expenses such as legal fees, accounting/bookkeeping fees, and consultant and

office expenses

## Updated 8/26/2014

2014 2013



# CURRENT ASSETS

Cash 164,228 $ 8,796 $

Inventory 67,565 $ 67,565 $

Other current assets 5,509 $ 5,509 $

Total current assets 237,302 $ 81,870 $

PROPERTY AND EQUIPMENT

Building and improvements 103,170 $ 103,170 $

Equipment 202,141 $ 202,141 $

Vehicles 28,058 $ 28,058 $

333,369 $ 333,369 $

Less accumulated depreciation (308,572) $ (301,669) $

Property and equipment - net 24,797 $ 31,700 $

TOTAL 262,099 $ 113,570 $

LIABILITIES:

Accrued liabilities 138 $ 138 $

MEMBERS' EQUITY

Partner's capital accounts 113,432 $ 123,322 $

Contributions 149,168 $ 33,685 $

Net gain (loss) (34,448) $ (43,575) $

Total members' equity 228,152 $ 113,432 $

TOTAL 228,290 $ 113,570 $ Gem Air LLC

SMN-BOI-SMN Commuter

December 31, 2013 AND 2014 Pro-forma Balance Sheet