GREENVILLE Mm- DELTA AIRPORT

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1 John Cox, III Mayor Draylan Gant Airport Director GREENVILLE Mm- DELTA AIRPORT 1Ci6 Fifth A~nue, Suite 300 Grrenville, ~isiippi Telephone: Ci Facsimile: fijz CI1Y COUNCIL Tommie Benson, Ill, Ward 1 Lois Hawkins, Ward 2 Carolyn Weathers, Ward 3 Betty J. Watkins, Ward 4 Ann Hollowell, Ward 5 Errick D. Simmons, Ward 6 Before the United States Department of Transportation July 23, 2014 Petition of Greenville, Mississippi, for a Waiver from the 10-Enplanement Statute, Docket DOT-OST Greenville, Mississippi Request for Exemption from 49 U.S.C (a)(l)(B Background - The FAA Modernization and Reform Act of 2012 amended 49 U.S.C (a)(l)(B) to change the definition of eligible place for the purpose of a community receiving Essential Air Service (EAS) funding. The amendment states that, in order to be eligible, a community must maintain an average of 10 enplanements or more per service day, as determined by the Secretary, during the most recent fiscal year beginning after September 30, The amendment applies to EAS cities that are within 175 miles of a FAA defined large or medium hub airport. Greenville is an EAS airport within 175 miles of a large or medium hub airport. On April 24, 2014, the Department issued Show-Cause Order , advising Greenville (and twelve other domestic EAS airports) that Airport traffic for fiscal year 2013 ended September 30, 2013, fell short of the 10 enplanement per day standard. On May 14, 2014, Greenville, via letter, advised the Department that, while we contested the exact passenger totals and provided evidence regarding errors in those numbers, we did concur that Greenville fell fractionally below 10.0 enplanements per day in FY In this letter Greenville also advised the Department that the Airport would contest a final termination of eligibility finding when such a finding was issued. On June 24, 2014, the Department finalized its tentative decision in Order , advising Greenville that any petition for waiver from the Final Order must be filed by July 24, This document constitutes the Greenville petition for waiver from the Final Order. Our Case for A Waiver - Greenville's case for a waiver from Order rests on these points: );:>- From 1993 to 2012 Greenville averaged 19,123 annual passengers (61 a day in a 313 day year). ~ Never in those twenty years has Greenville annual traffic been below 10 enplanements a day. );:>- Delta Air Lines, and its predecessor Northwest Airlines, provided Greenville air service prior to October 1, Delta left the Greenville market as part of its business strategy, not due to any decline or weakness over historic traffic and revenue levels by the market. );.>- Due to ongoing turmoil in the regional airline industry, Greenville had a great deal of difficulty finding capable regional airlines willing to bid to provide replacement service for Delta. "From the Delta to the World" Wehiite:

2 ~ The eventual replacement carrier, Silver Airways, was unreliable during most of FY ~ Silver Airways ticket pricing was not designed to generate traffic. ~ Silver was unable to implement a hoped for SkyMiles affinity and a planned Delta.com website display was late and had significant functionality and accuracy issues. ~ Silver used third-party ground handling services at all airports, resulting in customer service lapses. ~ Silver Airways made virtually no effort to market its services in Greenville. Despite a very disappointing 12 months of Silver Airways service in FY 2013, Greenville still managed to generate 6,042 O&D passengers or 9.65 enplanements per day. We do note that the Department is relying on T100 data that shows total traffic of 5,836 O&D but we did, in our initial reply to the Department on the 10 enplanement notice, note a very clear mathematical deviation in the Silver traffic counts for June of 2013 due to carrier chaos from a GDS cutover done that month. We also provided documentation from the Silver Airways (Quickflight) station manager of a flight-by-flight "recount" of June traffic resulting in a higher monthly number and a 12-month total of 6,042, or 9.65 per day. The level of frustration with Silver Airways in Greenville is high. We find ourselves fighting to preserve our local air service, which is essential to the growth of the economy of all of northwest Mississippi. We have worked very hard to try and make Silver's service successful, despite virtually no cooperation from the carrier. When it became clear that Silver had no interest in carrying passengers in Greenville, we then worked very hard to find a replacement carrier interested in bidding to replace Silver and, in response to the recent RFP for Greenville EAS service, three carriers bid. A fourth carrier was ready to bid to serve our market but reluctantly had to withdraw its interest prior to the bid deadline due to serious concerns about the emerging shortage of pilots due to new FAA flight, duty and qualification regulations, and the impact of those regulations on regional airlines. That carrier referenced interest in our market in a February 2014 letter to the Department regarding Muscle Shoals, Alabama. So, four regional airlines have bid, or would have bid, in the recent RFP, to serve Greenville. Our situation is clearly and unquestionably one of a temporary decline in passenger traffic owing to a fundamental lack of execution, in all areas, by our air service provider. We note here that of the thirteen cities subject to 10 enplanement termination notices, five were served by Silver Airways. Greenville Twenty Year Traffic History - Greenville averaged 19,123 annual O&D passengers per year {30.5 enplanements a day on a 313-day year) for the twenty-year period 1993 to For the majority of this period, service was Northwest Airlink service with either 19-seat J-32s or 34-seat SF-340s to the GREENVILLE AIRLINE TRAFFIC Northwest hub at Memphis. In the final months of Year Traffic Per Day Year Traffic Per Day , , , , S Delta service during FY 2012, service was a regional jet to Memphis with an up-line stop in Hattiesburg. 199S 21, , , ,142 Sl.6 At no time in 20 years, with different Northwest , , Airlink carriers and equipment, did Greenville traffic , , , ,CXXJ 38.3 ever fall below, or even near, traffic levels of , , enplanements per day. Even for the most recent , , years { ) Greenville averaged 15,548 O&D , FY , a year or 49.6 on/off per day on a 313-day year. Traffic is total on/off divided by 313 days, pernoo Reports 2

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9 Greenville's action will save the Department nearly $700,000 through the end of the Silver Airways contract on September 30, Also, once it became clear to Greenville in late 2013 that Silver had no interest in working with us on market development, we turned our efforts to recruiting alternative air service options, options provided by carriers that actually can focus on providing local home town air service, with reliable and convenient flight schedules and pricing that is attractive vs. drive/fly alternatives. We were very proud when our efforts resulted in three airlines offering bids to replace Silver Airways: AirChoiceOne, Sea Port, and Sun Air. A fourth carrier was very interested in bidding but had to withdraw due to concerns about pilot shortages. We have already provided the Department with our recommendation that Sea Port be designated to replace Silver Airways. We note that the SeaPort bid calls for an annual subsidy need of $1.483 million, less than half the subsidy Silver was originally awarded to serve our market and about $850,000 less annually than the Department is currently paying out for the reduced Silver service pattern. Furthermore, the SeaPort proposal for 18 weekly round trips to nearby Memphis will easily comply with the $200 subsidy per passenger cap that our market must comply with in FY Because of the pending subsidy cap requirements, Greenville, in its RFP comment letter, advised the Department that we request that Silver subsidized service be ended on September 30, We will go dormant in terms of local air service until we receive the wavier requested in this document and subsequently SeaPort is able to begin its service. Going dormant in the October time frame, if needed, will save the Department additional subsidy funds and prevent Greenville from incurring a FY 2015 $200 subsidy cap deficit if expensive, and largely unused, Silver service continued past September 30. We hope that our actions in the past two years, first to make our Silver Airways service successful, then to work with that carrier to reduce subsidy needs, and then to work very hard to find four carriers interested in replacing Silver, clearly shows that we care about our air service and are responsible participants in the EAS program. Our air service is essential to the economic well-being of Northwest Mississippi and the surrounding region that also covers southeast Arkansas and northeast Louisiana. We recognize that our local air service is essential to our economic well-being and we will do everything in our power, with a new and real air service partner in SeaPort, to fully comply with EAS subsidy eligibility requirements going forward. The failure to make 10 enplanements in FY 2013 (and again in FY 2014) is a temporary occurrence, as this document clearly shows. We intend to grow our air service and reduce our dependence on subsidy. The economic and geographic metrics of our region strongly suggest we can accomplish that. We thank the Department and the Secretary in advance for the fullest consideration of our very strong case for waiver from the 10-enplanement termination notice. Our decline in traffic is clearly temporary in nature and we have found a way forward with a new air service partner. Best regards, A~~xy l_:j~r 9

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