Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA (508)

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1 Proposal of Hyannis Air Service, Inc. dba Cape Air to provide subsidized Essential Air Service for: Massena, NY To/From Boston via Albany Docket DOT-OST Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA (508) November 29, 2012

Cape Air is delighted to have served Massena for more than four years Overview Cape Air started serving Massena on September 16, 2008 Massena ribbon cutting Since then we have flown more than 32,000

2 Cape Air is delighted to have served Massena for more than four years Overview Cape Air started serving Massena on September 16, 2008 Massena ribbon cutting Since then we have flown more than 32,000 passengers to or from Massena The Massena enplanement pace for 2012 is approaching 5,000 Cape Air serves Massena three times daily to/from Boston, via Albany Fares are low, in 2012 averaging just $58 Serving both Massena and Ogdensburg provides critical mass to recover from irregular operations 1

3 Massena enplanements in 2012 will be the highest in the last decade Massena enplanements 6,000 5,000 4,396 5,063 4,000 3,000 2,000 2,327 2,056 3,201 2,925 2,085 3,252 3,350 1, Source: US DOT T100 and Cape Air FLIFO Estimated 2

4 Massena passengers Sum of both ways; year ending 12,000 Massena ridership swelled with the addition of Boston service 10,000 8,000 6,000 5,849 6,146 6,147 6,221 6,223 6,213 6,145 6,136 6,178 6,225 6,286 6,330 6,394 6,411 6,468 6,434 6,480 6,500 6,468 6,539 6,677 6,842 7,048 7,298 7,538 7,827 8,010 8,315 8,596 8,758 9,035 9,270 9,354 9,484 9,562 9,614 9,620 9,657 9,625 4,000 2,000 0 Aug-09 Oct-09 Dec-09 Source: Cape Air FLIFO Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 3

Albany features flights to 20 non-stop destinations Albany destinations served December 2012 Rank Destination Weekly Departures 1 Philadelphia, PA 43 2 Newark, NJ 32 3 Baltimore, MD 32 4 Detroit, MI

5 Albany features flights to 20 non-stop destinations Albany destinations served December 2012 Rank Destination Weekly Departures 1 Philadelphia, PA 43 2 Newark, NJ 32 3 Baltimore, MD 32 4 Detroit, MI 30 5 Chicago-O'Hare, IL 27 6 Washington-Dulles, VA 23 7 Cleveland, OH 21 8 Boston, MA 21 9 Massena, NY Ogdensburg, NY Charlotte-Douglas, NC Atlanta, GA Washington-National, DC Orlando, FL Chicago-Midway, IL Toronto, ON, CA 9 17 Fort Lauderdale, FL 7 18 Las Vegas, NV 7 19 Tampa, FL 7 20 Minneapolis/St. Paul, MN 7 Total 396 Albany route map December 2012 Source: OAG 4

6 And Boston has service to 100 non-stop destinations, including 30 international destinations and comprehensive transcontinental service Boston destinations served December 2012 Rank Destination Dpt/Wk Rank Destination Dpt/Wk Rank Destination Dpt/Wk Rank Destination Dpt/Wk 1 Washington-National, DC Presque Isle, ME Hyannis, MA Dublin, IE 7 2 New York-La Guardia, NY Montreal-PET, QC, CA Seattle/Tacoma, WA Reykjavik, IS 6 3 Chicago-O'Hare, IL Martha's Vineyard, MA Halifax, NS, CA Munich, DE 6 4 Philadelphia, PA West Palm Beach, FL Rochester, NY Santo Domingo, DO 6 5 Baltimore, MD Houston-Intercontinental, TX Las Vegas, NV Zurich, CH 6 6 New York-JFK, NY Buffalo, NY Ottawa, ON, CA Harrisburg, PA 6 7 Atlanta, GA Phoenix, AZ Salt Lake City, UT Sarasota/Bradenton, FL 6 8 Newark, NJ Toronto-City, ON, CA San Diego, CA Santiago, DO 5 9 Charlotte-Douglas, NC Lebanon, NH Indianapolis, IN 9 84 St. Thomas, VI 5 10 Dallas/Fort Worth, TX Cleveland, OH Columbus, OH 9 85 Frankfurt, DE 5 11 San Francisco, CA Chicago-Midway, IL Norfolk, VA 9 86 New Orleans, LA 5 12 Orlando, FL Tampa, FL Syracuse, NY 9 87 Rome-Da Vinci, IT 5 13 Los Angeles, CA San Juan, PR Aruba, AW 8 88 Long Beach, CA 5 14 Toronto, ON, CA Plattsburgh, NY Akron/Canton, OH 8 89 San Jose, CA 4 15 Raleigh/Durham, NC Provincetown, MA Memphis, TN 7 90 Nassau, BS 4 16 Fort Lauderdale, FL Bar Harbor, ME Amsterdam, NL 7 91 Punta Cana, DO 3 17 Miami, FL Albany, NY Austin, TX 7 92 Madrid, ES 3 18 Fort Myers, FL Augusta, ME Nashville, TN 7 93 Kansas City, MO 3 19 Washington-Dulles, VA Richmond, VA Cancun, MX 7 94 Shannon, IE 3 20 Nantucket, MA Rockland, ME Jacksonville, FL 7 95 Praia, CV 2 21 Denver, CO Rutland, VT Myrtle Beach, SC 7 96 Montego Bay, JM 2 22 Pittsburgh, PA Saranac Lake, NY Tokyo-Narita, JP 7 97 Ponta Delgada, PT 2 23 Detroit, MI Cincinnati, OH/Covington, KY Portland, OR 7 98 Providenciales, TC 2 24 London-Heathrow, EN, GB St. Louis, MO Bermuda, BM 7 99 St. Maarten, SX 2 25 Minneapolis/St. Paul, MN Milwaukee, WI Paris-De Gaulle, FR Grand Cayman Island, KY 1 Source: OAG Total 2,716 Note: Shading denotes international service 5

7 The empirical success in ridership growth at Massena is due to a service solution that fits Constellation of success Low fares Safe and conservative operating philosophy Service to Albany and Boston Popular service Fully-functioning global distribution plus local outreach Convenient schedule at 3x daily Connection to Interlines with all legacy airlines 6

A great fit for Massena: Cape Air is a small but robust commuter airline, operating and growing since 1989 Key facts First route was Boston Provincetown, begun in October 1989 with one aircraft Cape

8 A great fit for Massena: Cape Air is a small but robust commuter airline, operating and growing since 1989 Key facts First route was Boston Provincetown, begun in October 1989 with one aircraft Cape Air: Leading the pack nine at a time 67 Cessna 402s in four regions, and two ATR-42s in Micronesia Operating up to 600 flights daily In 2011 flew almost 700,000 passengers Stable, mature and growing company Photo courtesy Mark Garfinkel (August 7, 2000, Boston) 7

9 Cape Air 2012 Annual revenue over $100M Financially stable Cape Air has purchased three more Cessnas, which will bring the fleet total to airports served, 15 in EAS Captain Krista Poppe Boston based 8

For smaller communities and niche markets, Cape Air s nine-seat planes have proven to be a good fit Cape Air highlights Key West Express High-frequency, non-stop service Interline e-ticketing and

10 For smaller communities and niche markets, Cape Air s nine-seat planes have proven to be a good fit Cape Air highlights Key West Express High-frequency, non-stop service Interline e-ticketing and baggage agreements Complete GDS sales channels: 800-Cape-Air In-house reservations call center Reliability thanks to spare aircraft availability MOCHA HAGoTDI culture and community investment Make Our Customers Happy And Have A Good Time Doing It 9

11 Cape Air began service in 1989 with a few aircraft 10

12 And one route: Boston Provincetown Original Cape Air route map Boston Provincetown November 1989 schedule 11

Today, Cape Air serves 17 communities in the Northeast Northeast route map Ogdensburg Massena Saranac Lake Augusta Bar Harbor Rockland Rutland Lebanon

13 Today, Cape Air serves 17 communities in the Northeast Northeast route map Ogdensburg Massena Saranac Lake Augusta Bar Harbor Rockland Rutland Lebanon Albany Boston Provincetown Providence New Bedford Hyannis White Plains Martha s Vineyard Nantucket December 2012 route map (including summer-seasonal service) 12

And has developed niches in Florida, the Caribbean, Midwest

Thomas Anguilla Micronesia Vieques Saipan St.

Myers Midwest Kirksville Quincy Illinois Rota Florida Missouri

14 And has developed niches in Florida, the Caribbean, Midwest and Micronesia Caribbean Mayaguez San Juan Tortola St. Thomas Anguilla Micronesia Vieques Saipan St. Croix Nevis Florida Keys Ft. Myers Midwest Kirksville Quincy Illinois Rota Florida Missouri St. Louis Guam Ft. Leonard Wood Marion Owensboro Key West December 2012 route maps; not to scale Cape Girardeau Kentucky 13

15 Midwest Kirksville Quincy St. Louis Massena Ogdensburg Albany Saranac Lake Rutland Lebanon Augusta Rockland Boston Bar Harbor Northeast Provincetown Hyannis White Plains Nantucket Providence Martha s Vineyard Manhattan New Bedford Ft. Leonard Wood Cape Girardeau Marion Owensboro Micronesia Saipan Cape Air Routes December 2012 Including seasonal service Guam Rota Map inset not to scale Florida Ft. Myers Key West Caribbean San Juan St. Thomas Tortola Mayaguez Vieques St. Croix Anguilla Nevis

16 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 with all legacy airlines Checked luggage transfer with all legacy airlines TSA security program 15

17 Cape Air is delighted to operate a full-time city ticket office in Massena 16

18 Cape Air aggressively markets Massena s air service, and actively participates in community life 17

19 Cape Air codeshares with American and United Codeshare highlights Cape Air operates flights in Micronesia as Flights in the Caribbean have code Flights in the Midwest operate with the code of 18

20 And interlines with all of the legacy airlines plus JetBlue and Frontier 19

21 Participation in the global distribution system gives Massena access to the world and the world access to Massena Cape Air is sold through: 20

22 Cape Air puts Massena on jetblue.com 21

23 And United.com 22

24 Cape Air has its own reservations call center: 800-CAPE-AIR Cape Air s Reservations Call Center 23

25 CORPORATE UPDATE 24

26 Cape Air continues to work on development of the next generation twin-engine nine-seat airliner Tecnam s P2012 Traveler 25

27 On February 25, 2012 Cape Air became the launch customer for s new passenger service system 26

28 Cape Air takes environmental sustainability seriously by investing in fuel-saving aircraft technologies and powering its offices with solar panels 27

29 Cape Air s November 2012 Essential Air Service MASSENA PROPOSAL 28

Cape Air proposes a continuation of Massena s 3x daily through service to Boston via Albany Highlights Each flight operates non-stop to Albany, then continues on to Boston Through service to Boston

30 Cape Air proposes a continuation of Massena s 3x daily through service to Boston via Albany Highlights Each flight operates non-stop to Albany, then continues on to Boston Through service to Boston map Ogdensburg Massena In distribution systems the service is displayed as an exquisitely timed Cape Air connection Dual hub service retains the intra-state link with Albany while providing access to Boston s world-class hub and major metropolitan area Albany Boston 29

31 Massena Proposal Economics Drivers Daily RTs 3 Pax/Dpt 4.95 Load Factor 55% Fare (net) $57.75 Pax Rev/Dpt $ Cape Air offers (and prefers) a four-year discounted contract to improve stability and planning 4-Year Discount Expenses Two-year selection, with discounted four-year option Fuel $849,145 Maintenance $912,148 Pilots $249,971 Ownership $263,909 Stations $452,773 Operating Fees $118,605 Marketing $56,154 General & Admin./Other $249,128 Operating Expense $3,151,832 Return of 5% $165,886 Economic Expense $3,317,718 Passenger Revenue $1,226,769 Profit ($2,090,949) Subsidy Required $2,090,949 Per Departure $984 Per Passenger $195 4-Year Contract Discount $2,039,094 Per Departure $960 30

32 Cape Air is proud to be Massena s airline! Cape Air offers the airline amenities Massena needs: 3x daily non-stop service to Boston via Albany Ample fleet of back-up aircraft, and Ogdensburg service for operational flexibility Full interline connectivity with all the major airlines, including JetBlue, allowing sameticket connections with the world Global distribution Cape Air would be honored to be reselected to serve Massena 31

33 Thank you! 32

Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA (508)

Proposal of Hyannis Air Service, Inc. dba Cape Air to provide subsidized Essential Air Service for: Massena, NY To/From Boston via Albany Docket DOT-OST-2012-0163 Hyannis Air Service, Inc., dba Cape Air