SUSQUEHANNA AREA REGIONAL AIRPORT AUTHORITY REQUEST FOR PROPOSALS TO PURCHASE DIRECT PURCHASE BONDS ADDENDUM #1- POSTED 4/28/2017 QUESTIONS

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1 SUSQUEHANNA AREA REGIONAL AIRPORT AUTHORITY REQUEST FOR PROPOSALS TO PURCHASE DIRECT PURCHASE BONDS ADDENDUM #1- POSTED 4/28/2017 QUESTIONS 1. Please provide Fiscal Year 2016 Enplanement Data & overall financial disclosure (including 2016 Audited Financials, if possible). The 2016 audited financial statements have been posted to our website, FlyHIA.com, Business Opportunities, Airport Projects. It also has been posted to the EMMA Dataport along with the required Continuing Disclosure. The 2016 Enplanement and Operating Statistics are attached hereto as Attachment A. 2. Please provide most recent enplanement data for Fiscal Year See Attachment B. 3. For Fiscal Year 2006 and Fiscal Year 2007 enplanements, please provide a reason as to why there was a 10% decrease and a subsequent 10% increase in the numbers. This period was characterized as one of great turmoil in the airline industry and here at HIA. In September 2005 three airlines went in to bankruptcy: both Delta and Northwest on the 14 th (Chapter 11, emerged spring 2007) and Transmeridian on the 29 th (Chapter 7). Transmeridian had pioneered our Orlando (Sanford) destination. That service didn t return until 2008 when Air Tran Airlines picked it up. Air Tran later was acquired by Southwest Airlines. After Southwest pulled out the Air Tran brand out of HIA in 2012, Frontier and Allegiant picked up the Orlando service. Average fares went up 12% in 2006 and then declined 9.5% in In 2006, Northwest ended Minneapolis service and Delta cutback on Cincinnati service 41%. US Airways cut Charlotte service by 12% and Philadelphia service by 18%. In 2007, American started Dallas service, Northwest reinstated Minneapolis service, United increased Chicago service by 29%, and US Airways increased Charlotte service by 17%. Overall seat capacity increased 4%. 4. Regarding Fiscal Year 2015 s enplanement drop due to Frontier s departure, please provide an update as to which airline is looking to replace Frontier, if any. Frontier was serving Orlando and Denver. Allegiant Air continues to serve the Orlando market and in 2016 added year round service to Fort Myers (Punta Gorda) and seasonal service to Myrtle Beach. They lengthened the service in 2017 starting earlier (right after Easter) and ceasing later (mid October) 5. Would the Authority consider proposals that materially alter the estimated amortization schedule shown in the RFP? The Authority is seeking a principal repayment schedule for the Direct Purchase Bonds that will produce approximately level annual savings compared to the total annual debt service on the 2008A

2 Bonds. Other than revisions to the amortization schedule resulting from the interest rate proposed by a bank, the Authority will not consider a proposal that has a principal repayment structure that is materially different than what was described in the RFP. If a bank is proposing under Interest Rate Option B as described in the RFP, the Authority would consider a request from a bank to have the right to tender the Direct Purchase Bonds to the Authority during the variable rate period, subject to certain conditions (for example, the bank would not have such a right to tender until at least two years after the initial interest rate reset date, and the bank would be required to provide the Authority with at least a one year notice of its intent to exercise its right to tender). 6. Will you please provide the terms of the leases with the current Airlines? Is there a penalty for leaving or breaking the lease? The current Airline Operating Agreement runs through year end They have been renewed recently in five year terms. The airline is obligated for all exclusive areas through the end of the lease term if they are here or not. Air Canada, Allegiant, American, Delta, United, FedEx, and UPS have executed the agreement. 7. When was the Passenger Facility Charge (PFC) implemented? The PFC was implemented in $3.00. In 2003 the fee was authorized to be raised to the program maximum of $4.50.

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