Non-stop to/from Lambert - St. Louis International Airport 3x Daily

Transcription

1 Proposal of Hyannis Air Service, Inc. dba Cape Air to provide subsidized Essential Air Service for: Kirksville, Missouri Docket DOT-OST Non-stop to/from Lambert - St. Louis International Airport 3x Daily With codeshare of Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA (508) May 11, 2016

2 Cape Air has had the privilege of serving Kirksville since September 17,

3 Since then, ridership has more than doubled Kirksville passengers Year-ending 14,000 12,000 10,000 8,000 6,000 Predecessors Cape Air 4,000 2,000 0 Sep-03 Apr-04 Nov-04 Jun-05 Jan-06 Aug-06 Mar-07 Oct-07 May-08 Dec-08 Jul-09 Feb-10 Sep-10 Apr-11 Nov-11 Jun-12 Jan-13 Aug-13 Mar-14 Oct-14 May-15 Dec-15 Source: US DOT T100 Data 2

4 Cape Air COMPANY UPDATE 3

5 Cape Air is led by founder and CEO Dan Wolf, assisted by President Linda Markham, who also serves as Chair of the Regional Airline Association s Board

6 Cape Air has grown from a single aircraft and route in 1989 to America s largest commuter airline today Key facts First route was Boston Provincetown, begun in October 1989 with one aircraft Cape Air: Leading the pack nine at a time Today s fleet 83 Cessna 402s in four regions Four Britten-Norman Islanders Two ATR-42s in Micronesia Two Cessna Caravan seaplanes Operating up to 500 flights daily In 2015 flew ~686,000 passengers Stable, mature and growing company 5

7 Cape Air began service in 1989 with three aircraft 6

8 And one route: Boston Provincetown Original Cape Air route map Boston Provincetown November 1989 schedule 7

9 Havre Glasgow Wolf Point Sidney Glendive Billings Cape Air serves 43 destinations in total Kirksville Quincy Massena Ogdensburg Saranac Lake Augusta Bar Harbor Rutland Lebanon Rockland Albany White Plains Manhattan Boston Provincetown Hyannis Nantucket Martha s Vineyard New Bedford St. Louis Ft. Leonard Wood Marion Cape Girardeau Owensboro Cape Air Routes 2Q16 Denotes seasonal service Micronesia Ft. Lauderdale Intl Miami Seaplane Base Bimini Saipan Guam Rota San Juan St. Thomas Culebra Tortola Virgin Gorda Mayaguez Vieques St. Croix Map inset not to scale

10 Cape Air 2016 Revenue over $120M Consistently profitable Stable ownership since 1991 Expanded ESOP in 2015 Fleet total of 93 aircraft 43 airports served, 20 in EAS 9

11 Millions $140 Cape Air revenue has grown steadily since 1989 $120 $100 $80 $77 $71 $85 $99 $103 $108 $119 $121 $60 $56 $57 $52 $40 $20 $0 $36 $37 $35 $37 $41 $31 $22 $25 $16 $11 $13 $1 $1 $2 $1 $5 $ Because our way of serving small communities works! 10

12 Fleet update: Cape Air is pursuing a new-generation twin-engine commuter aircraft; Tecnam s roll-out was in April 2016 Apr. 12,

13 Cape Air A GREAT FIT FOR KIRKSVILLE 12

14 Cape Air continues to build on strong industry relationships; we proudly interline with all three legacy carriers, plus JetBlue Interline with 13

15 In December 2015 Cape Air commenced an interline relationship with Alaska Airlines Alaska Airlines at St. Louis July 2016 OAG Daily Flights Seattle, WA 2 Portland, OR 1 Total 3 14

16 In partnership with Alaska, American, Delta and United, Cape Air s interline capabilities provide Kirksville with seamless onestop travel to 22 cities, and further connections to the world Cities served non-stop from St. Louis by Cape Air s partner airlines May 2016 Seattle Portland Minneapolis San Francisco Salt Lake City Denver Chicago (ORD) Detroit Cleveland Kirksville St. Louis Cincinnati New York (LGA and EWR) Philadelphia Washington (DCA & IAD) Charlotte Los Angeles Phoenix Dallas (DFW) Houston (IAH) Atlanta AS AA DL UA Miami Source: OAG 15

17 American Airline s codeshare with Cape Air provides Kirksville with major airline branding, and access to American s 350+ network destinations Non-stop service at St. Louis May 2016 Source: OAG 16

18 Including Kirksville, St. Louis boasts non-stop service to a grand total of 63 destinations Lambert - St. Louis non-stop service route map May 2016 Source: OAG 17

19 Cape Air s relationship with American Airlines puts Kirksville on American s website 18

20 Because of Cape Air s special relationship with United Airlines, Kirksville also displays on united.com 19

21 Cape Air operates a downtown ticket office, which helps connect Kirksville with its airport, airline and the world Cape Air Ticket Office Kirksville, Missouri s Downtown Square 20

22 Cape Air s service includes a ramp-side inter-terminal shuttle, facilitating seamless connections between terminals at St. Louis, without having to re-clear security Cape Air s St. Louis inter-terminal shuttle No TSA rescreening to connect between terminals! 21

23 Cape Air proposes continued Kirksville service with its fleet of 83 Cessna 402s GPS equipped; eight or nine passenger seats depending on optional first officer 22

24 Cape Air continues to offer the features Kirksville needs for successful Essential Air Service Cape Air advantages Proven partner for Kirksville Interline e-ticket agreements with: Alaska American Delta United American Airlines codeshare Global Distribution System (Amadeus) Expedia, Orbitz, Travelocity Full TSA program Large fleet key to reliability Robust marketing capability $49 fares Downtown ticket office Multi-engine aircraft All Cape Air captains required to have an ATP Stable and mature airline 23

25 Cape Air proposes continued steady-state service for Kirksville, and prefers a 4-year reselection at a discount to DOT Drivers Daily RTs 3.0 Annual Sched. Dpts 2,190 Completion Rate 97% Annual Actual Dpts 2,124 PDEW 14.7 Pax/Dpt 5.0 Load Factor 56% Annual Passengers 10,706 Avg. Net Fare $41 Passenger Rev/Dpt $209 Expenses Two-year term; discount for 4-year term, preferred, is noted below Expenses Fuel $540,369 Maintenance $715,181 Pilots $263,910 Ownership $197,970 Rents $193,991 Staff $115,274 Landing Fees $100,055 Marketing $46,538 General & Admin./Other $134,825 Operating expense $2,308,113 Return of 5% $121,480 Economic Expense $2,429,592 Passenger Revenue $443,877 Profit ($1,985,715) Year 1 Annual Operating Subsidy Required $1,985,715 Subsidy Per Departure $935 Per Passenger $185 4-year option preferred Year 1 Discount for 4-year term Proposed Subsidy $1,931,684 Per Departure $909 Note: See escalation factors next slide 24

26 To align revenue with costs over time Cape Air proposes a 3% annual escalation factor Annual subsidy including escalation Two-year reselection IRK Year 1 $1,985,715 Year 2 $2,045,287 Four-year reselection Year 1 $1,931,684 Year 2 $1,989,635 Year 3 $2,049,324 Year 4 $2,110,803 25

27 Cape Air would be honored to be reselected to provide EAS for Kirksville Cape Air proposal features: Non-stop to/from St. Louis 3x Daily Full interline connectivity, allowing same-ticket connections with the world Codeshare with Proven track record, making Cape Air a low-risk option Professional marketing and downtown ticket office Robust infrastructure of America s largest commuter airline Cape Air: a great choice for Kirksville Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, 660 Barnstable Road, Hyannis, MA (508)

28 Thank you! 27