Ft. Leonard Wood, Missouri

Transcription

1 Proposal of Hyannis Air Service, Inc. dba Cape Air to provide subsidized Essential Air Service for: Ft. Leonard Wood, Missouri DOCKET DOT-OST Four daily non-stop flights to/from Lambert - St. Louis International Airport With codeshare Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA (508) August 13, 2014

2 Cape Air has been privileged to serve the Waynesville St. Robert Regional Airport since December 2010 Ribbon cutting for Cape Air s service at Ft. Leonard Wood, MO December 14,

3 About CAPE AIR 2

4 Cape Air has grown from a single aircraft and route in 1989 into America s largest commuter airline Key facts Cape Air: Leading the pack nine at a time First route was Boston Provincetown, begun in October 1989 with one aircraft Today s fleet 76 Cessna 402s in four regions Four Britten-Norman Islanders Two ATR-42s in Micronesia Operating up to 550 flights daily In 2013 flew 728,000 passengers Stable, mature and growing company Photo courtesy Mark Garfinkel (August 7, 2000, Boston) 3

5 Cape Air 2014 Annual revenue of $120M Financially stable 44 airports served, 20 in EAS 83 aircraft Captain Krista Poppe Augusta based 4

6 Havre Glasgow Wolf Point Sidney Glendive Billings Proud to be America s finest commuter airline! Kirksville Quincy Massena Ogdensburg Saranac Lake Augusta Bar Harbor Rutland Lebanon Rockland Albany Boston Providence Provincetown Hyannis White Plains Nantucket Manhattan Block Island Martha s Vineyard New Bedford St. Louis Ft. Leonard Wood Marion Cape Girardeau Owensboro Cape Air Routes July 2014 Denotes seasonal service Micronesia Saipan Guam Rota San Juan St. Thomas Culebra Tortola Virgin Gorda Mayaguez Anguilla Vieques St. Croix Nevis Map inset not to scale

7 One of Cape Air s best features is interline connections with all of the legacy airlines plus JetBlue 6

8 Cape Air s Ft. Leonard Wood flights offer American Airlines codeshare, so Codeshare partners: American Airlines and Cape Air Photo source: Jim Schnobrich; Used with permission 7

9 Ft. Leonard Wood connecting itineraries are sold on AA s website as American flights 8

10 Itineraries connecting between Cape Air and United are available on united.com 9

11 Through Expedia and other OTAs, Cape Air connects EAS communities like Ft. Leonard Wood with the world 10

12 Over more than 20 years in business Cape Air has invested in the airline features smaller communities need Feature Established Reliability Tickets sold through Expedia, Orbitz, Travelocity Interline e-ticketing and bag transfers with all legacy airlines American Airlines codeshare TSA security program 11

13 Ft. Leonard Wood CAPE AIR SERVICE 12

14 The empirical success in ridership growth at Ft. Leonard Wood is due to a service solution that fits Constellation of success Low fares Effective baggage solution Safe and conservative operating philosophy Popular service Fully-functioning global distribution plus local outreach Convenient schedule Codeshare with Interlines with all legacy airlines at St. Louis 13

15 Ridership has plateaued at a healthy level but we seek to recapture the momentum interrupted by the government shutdown Cape Air passengers STL-TBN Year-ending 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 15,785 0 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 14

16 Cape Air s customized service for Ft. Leonard Wood, including a dedicated freighter aircraft when needed, meets the route s extraordinary baggage requirement Supervisor Carola Prewett and Capt. Eric Hodges marvel at a flight s checked luggage 15

17 Ft. Leonard Wood fares are down 6% in three years Cape Air fares at Ft. Leonard Wood Net average, year ending $90 $88 $86 $84 $82 $88 $87 $87 $87 $87 $86 $87 $86 $85 $85 $84 $83 $83 $83 $82 $82 $82 $81 $81 $81 $80 $80 $80 $81 $81 $81 $81 $81 $81 $81 $81 $81 $80 $78 $76 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 16

18 Cape Air offers commuter books of tickets at Ft. Leonard Wood that price out to just $52 per ticket Key features of commuter books: Several Cape Air routes have more than 66% of passengers using commuter books Each book contains 10 one-way tickets: $520 Commuter book tickets are: Transferable Unrestricted Valid on any departure Great for members of the local community! 17

19 Cape Air s St. Louis service now features a very popular inter-terminal shuttle Shuttle highlights Secure, ramp-side shuttle transports Cape Air passengers from our gate to connecting flights on other concourses Return passengers call the shuttle for pick up from courtesy phones located in each of the concourses Eliminates TSA rescreening in St. Louis 18

20 Cape Air loves marketing and community events! Cape Air booth with ticket give-away at the Fourth of July 2013 celebration on post 19

21 In January 2013 the Ft. Leonard Wood community cut the ribbon on our Waynesville ticket office and IT center Waynesville ticket office ribbon cutting January 22,

22 Cape Air is working to field this FoxAir air conditioning unit at Ft. Leonard Wood; ground power is the critical path at this point FoxAir beta testing, June 4, 2014, Hyannis, MA 21

23 Ft. Leonard Wood EAS PROPOSAL 22

24 To best serve the Ft. Leonard Wood community s travelers, Cape Air proposes continued passenger and freighter service, with the freighter used only as required Passenger Economics Year 1 Two year contract Drivers Daily RTs 4.0 Annual Sched. Dpts 2,920 Completion rate 97% Actual Depts 2,832 Pax/Dpt 5.5 Load Factor 61% Annual Passengers 15,664 Avg. Net Fare $82.49 Passenger Rev/Dpt $456 Year 1 Fuel $722,441 Maintenance $725,190 Pilots $274,462 Ownership $183,712 Rents $69,425 Staff $225,679 Ops and Landing Fees $114,156 Freighter Fixed Expenses $233,374 Marketing $66,532 General & Admin./Other $215,609 Operating expense $2,830,580 Return of 5% $148,978 Economic Expense $2,979,558 Passenger Revenue $1,292,074 Profit ($1,687,484) Annual Operating Subsidy Required $1,687,484 Subsidy Per Departure $596 Per Passenger $108 Freighter: $586/dpt Required Usage Pct Dpts Annual 40% 1,168 $684,390 50% 1,460 $855,487 60% 1,752 $1,026,585 70% 2,044 $1,197,682 Freighter notes: Freighter only used when needed Utilization of the freighter is a function of enplanements, which will keep the per-passenger subsidy below $200. Maximum eligible usage is proposed at 70% Year 1 Year 1 Discount for four-year contract Annual Operating Subsidy Required $1,631,476 Subsidy Per Departure $576 Per Passenger $104 Notes: For stability and planning Cape Air proposes a discounted four-year reselection See next page regarding annual escalation factor 23

25 To align revenue with costs over time Cape Air proposes a 4% annual escalation factor Annual proposed subsidy including escalation Two-year reselection Pax Freighter (Max) Year 1 $1,687,484 $1,197,682 Year 2 $1,754,983 $1,245,590 Four-year reselection Year 1 $1,631,476 $1,197,682 Year 2 $1,696,735 $1,245,590 Year 3 $1,764,605 $1,295,413 Year 4 $1,835,189 $1,347,230 24

26 Cape Air would be honored to continue serving Ft. Leonard Wood! Proposal highlights Four daily flights to/from St. Louis with a proven baggage solution Spare aircraft in the region helps ensure a reliable operation codeshare, plus interline connections, ticketing and bag transfer with most major airlines; global distribution A healthy, strong, independent airline that cares passionately about serving communities Cape Air is a great choice for Ft. Leonard Wood Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA (508)

27 It is a privilege to serve Ft. Leonard Wood. Thank you! Military Appreciation Day November 2013 Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA (508)