BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. Essen8al Air Service at: CAPE GIRARDEAU/SIKESTON, MISSOURI DOT-OST 1996-1559 QUINCY, ILLINOIS/HANNIBAL, MISSOURI DOT-OST 2003-14492 Under 49 U.S.C. 41731 et seq. SOUTHERN AIRWAYS EXPRESS PROPOSAL TO PROVIDE SUBSIDIZED ESSENTIAL AIR SERVICE By Order 2017-5-8, the Department requested proposals from carriers interested in providing EssenBal Air Service to Cape Girardeau/Sikeston, Missouri and Quincy, Illinois/Hannibal, Missouri. Pursuant to that Order, Southern Airways Express, LLC ( Southern ) cordially submits this proposal. Correspondence with regard to this document should be addressed to: R. Stan LiVle Chief Execu8ve Officer Southern Airways Express 2525 Caffey Street Hernando, Mississippi 38632 Telephone: 901-672-7820 E-Mail: s.livle@iflysouthern.com
Southern Airways Express hereby offers a proposal to provide service to Cape Girardeau/ Sikeston, Missouri and Quincy, Illinois/Hannibal, Missouri. Our proposal is for a period of two years. Southern proposes to operate reliable, low-fare service using our fleet of 9-passenger turboprop Cessna Caravan aircra[. Southern s management believes that this model is well-suited to serve the market with properly-bmed schedules and the ability to access mulbple hubs. Our turbine aircra[ offer far greater passenger comfort and reliability than older piston planes. Southern has adopted a flexible, community-focused approach to its proposals that not only provides low-fare service to important regional hubs, but is accompanied by flight schedules that have been tailored to provide maximum convenience and connecbvity. It is cribcal to successful enplanements that cibes have full Bme-of-day coverage, with an early departure and a late return to accommodate same-day business travelers. All of our proposals include this coverage. This proposal has been designed to ensure conbnued high levels of service reliability. Southern has built a reputabon for consistent reliability and high levels of customer service. We have at least one new pilot class each and every month and have taken delivery of new aircra[ at the rate of one per month for each of the past twelve months faster than any compebtor in the marketplace.
MARKETING MarkeBng & DistribuBon DISTRIBUTION FLIGHTS ARE DISPLAYED IN THE MAJOR GLOBAL DISTRIBUTION SYSTEMS: Sabre Amadeus Worldspan Galileo Travelport Apollo TravelSky China (Coming in 2018) AND ON THE MAJOR ONLINE TRAVEL AGENCY WEBSITES: Expedia Travelocity Orbitz Kayak Priceline CheapJckets PLUS, ON: iflysouthern.com Here, Southern has invested considerable capital in an industry-leading technology that facilitates connec9ons between Southern and all other carriers which publish their schedules in OAG and their fares in ATPCO, including the Ultra Low Cost Carriers that have become an important element in the US airline industry. Even where interline agreements are not available, such as with Southwest, Spirit, and Allegiant, this technology assists passengers in making connec9ons to/from Southern and des9na9ons world-wide. AND, ANNOUNCING OUR NEW INTERLINE PARTNER:
COMPANY HISTORY AND CULTURE Southern Airways was born out of necessity. When Delta Air Lines de-hubbed Memphis, a vacuum in air travel was created in the Mid-South. Most of the popular non-stop desbnabons that residents of the metro area had enjoyed for years were no longer offered. In 2013 Southern took flight and became the preferred method of travel not just for the masses commubng to the Florida Gulf Coast, but also for some of the area s most affluent business travelers. Providing affordable, high-touch, first class, charter-style service to passengers that had given-up on short haul air travel (and instead turned to the automobile) became the model upon which Southern built its reputabon. In short, Southern Airways has a proven track record of pufng people on airplanes! In early 2016, Southern Airways acquired Sun Air Express in a transacbon that created greater resources for the combined company. Sun Air had developed a network of communibes in the Mid-AtlanBc region within the EssenBal Air Service program. Combining the companies immediately led to unparalleled synergies. The resources and improved aircra[ of Southern, along with the operabonal leadership of Sun, created an air service provider that is successful at operabng both EssenBal Air Service routes as well as tradibonal market-based flights between high-density areas and popular desbnabons. Southern brings a leadership mindset that is focused on business development, relabonship-building, community involvement, and passenger sabsfacbon to a Sun Air product that has a strong and well-established infrastructure in the industry. The operabonal excellence of Sun and the customer-centric mindset and superior markebng ability of Southern has created a dynamic new company that will be the model for EssenBal Air Service providers in the future. Unique among EAS bidders in this region, Southern Airways does not focus exclusively on subsidized flying it is but one part of our overall airline business model. In all of our footprints, we fly both EAS and market-based routes and that would be true in our new Midwest footprint, as well.
The mooo of Southern Airways is Every Passenger, Every Flight, Every Day. That focus on the passenger experience can be seen through the countless tesbmonials that passengers post onto our social media accounts. With over 20,000 Facebook followers in the MidSouth alone, Southern has leveraged its innovabve social media presence to create a dialogue with passengers. That dialogue has led to the highest levels of customer sabsfacbon and enthusiasm. In addibon to ublizing social media sites like Facebook, Instagram, YouTube, and Pinterest, Southern is also a big proponent of tradibonal markebng and adverbsing. From custom, professionally- produced radio jingles to nabonal-broadcast quality television commercials, Southern is commioed to community markebng on all levels Links to Southern s Social Media Sites are listed below. www.facebook.com/iflysouthern www.instagram.com/flysouthern www.pinterest.com/iflysouthern www.twiier.com/iflysouthern www.youtube.com/user/iflysouthern ABOUT SOUTHERN AIRWAYS EXPRESS Southern Airways Express is a Memphis (Hernando, Mississippi)-based commuter airline serving markets in Pennsylvania, Virginia, Maryland, West Virginia, New York, Tennessee, Georgia, Mississippi, Arkansas, Texas, and Florida. The airline has operated both charters and scheduled service within a 14-state footprint since 2013. The company is now the combined product of the original Southern Airways Express and the former Sun Air InternaBonal, having combined operabons in 2016. Since that Bme, Southern has focused on improving operabons, upgrading technology, converbng to an all-turbine fleet, and expanding the community-centric and high-touch personal service that has been the backbone of the company since its founding. Today, we serve 22 cibes with 106 peak-day departures on 22 aircra[ flown by 80 pilots.
. CONCLUSION Southern Airways Express believes that its proposal will provide an unsurpassed level of service to the cibes of Cape Girardeau/Sikeston and Quincy/Hannibal and will ensure that they have proper access to the nabonal air transportabon network, offering cost-effecbve opbons that meet the requirements of the EssenBal Air Service Program. Respecrully Submioed: June 15, 2017 R. Stan Liole Jr. Chairman & Chief ExecuBve Officer Southern Airways Express, LLC We Fly To Make Your Day!
Representa8ve Schedule CAPE GIRARDEAU/SIKESTON: OpBon A 18 Weekly Round-trips to STL 6 Weekly Round-trips to BNA 5 Weekly Roundtrips to MEM* Opera8ng Revenues CGI-STL $310,331 CGI-BNA $122,251 ---------------------------------- $432,582 DEPARTURES FROM CGI 6:35am to BNA 8:45am to STL 12:00pm to STL 4:05pm to STL 6:35pm to MEM* ARRIVALS TO CGI 8:25am from MEM* 11:35am from STL 3:45pm from STL 5:55pm from BNA 6:15pm from STL Opera8ng Expenses (STL & BNA Only) Flying OperaBons $516,810 Fuel and Into Plane $458,651 Maintenance $342,625 Aircra[ $380,000 Indirect $595,115 ----------------------------------- TOTAL OPERATING EXPENSES $2,293,201 OperaBng Loss $1,860,619 Profit Element (5%) $ 114,660 COMPENSATION REQUIRED $1,975,279 COMPENSATION PER PAX $135 COMPENSATION PER DEPARTURE $803 Annual Seats 26,736 Annual Passengers 14,594 Load Factor 55% STL 65% BNA 40% MEM* Departures 2,458** Block Hours 2,397** Average Fare $34** CompleBon Factor 98.5% *Unsubsidized **Excludes Memphis flights
CAPE GIRARDEAU/SIKESTON: OpBon B 24 Weekly Round-trips to STL Representa8ve Schedule DEPARTURES FROM CGI 7:05am 10:05am 1:30pm 4:45pm Opera8ng Revenues CGI-STL $345,180 ---------------------------------- $345,180 Opera8ng Expenses (BNA Only) Flying OperaBons $495,580 Fuel and Into Plane $422,492 Maintenance $316,416 Aircra[ $380,000 Indirect $595,115 ----------------------------------- TOTAL OPERATING EXPENSES $2,209,603 OperaBng Loss $1,864,423 Profit Element (5%) $ 110,480 COMPENSATION REQUIRED $1,974,903 ARRIVALS TO CGI 9:45am 1:05pm 4:25pm 7:00pm COMPENSATION PER PAX $171 COMPENSATION PER DEPARTURE $803 Annual Seats 22,127 Annual Passengers 11,506 Load Factor 52% Departures 2,458 Block Hours 2,212 Average Fare $30 CompleBon Factor 98.5%
QUINCY/HANNIBAL: OpBon A 29 Weekly Round-trips to STL 7 Weekly Round-trips to CHI Representa8ve Schedule DEPARTURES FROM UIN 6:05am to CHI 9:15am to STL 11:45pm to STL 1:55pm to STL 4:00pm to STL 7:05pm to STL ARRIVALS TO UIN 8:55am from STL 11:25am from STL 1:35pm from STL 3:40pm from STL 6:45pm from STL 8:30pm from CHI Opera8ng Revenues UIN-STL $454,512 UIN-CHI $142,596 ---------------------------------- $597,108 Opera8ng Expenses (BNA Only) Flying OperaBons $786,805 Fuel and Into Plane $715,868 Maintenance $468,500 Aircra[ $380,000 Indirect $595,115 ----------------------------------- TOTAL OPERATING EXPENSES $2,946,288 OperaBng Loss $2,349,180 Profit Element (5%) $ 147,314 COMPENSATION REQUIRED $2,496,494 COMPENSATION PER PAX $142 COMPENSATION PER DEPARTURE $677 Annual Seats 33,190 Annual Passengers 17,562 Load Factor 50% STL 65% CHI Departures 3,687 Block Hours 3,748 Average Fare $34 CompleBon Factor 98.5%
QUINCY/HANNIBAL: OpBon B 36 Weekly Round-trips to STL Representa8ve Schedule DEPARTURES FROM UIN 6:05am 9:15am 11:45am 1:55pm 4:00pm 6:15pm ARRIVALS TO UIN 8:55am 11:25am 1:35pm 3:40pm 5:55pm 9:30pm Opera8ng Revenues UIN-STL $497,850 ---------------------------------- $497,850 Opera8ng Expenses (BNA Only) Flying OperaBons $696,746 Fuel and Into Plane $633,929 Maintenance $414,875 Aircra[ $380,000 Indirect $595,115 ----------------------------------- TOTAL OPERATING EXPENSES $2,720,665 OperaBng Loss $2,222,815 Profit Element (5%) $ 136,033 COMPENSATION REQUIRED $2,358,848 COMPENSATION PER PAX $142 COMPENSATION PER DEPARTURE $639 Annual Seats 33,190 Annual Passengers 16,595 Load Factor 50% Departures 3,687 Block Hours 3,319 Average Fare $30 CompleBon Factor 98.5%