Presentation to El Centro, CA

September 4, 2012 Agenda  SeaPort Airlines Snap Shot

 Review EAS Proposal & DOT Selection

 Reason for Delay in Service

 Proposed Alternative Service Plan

 Response to Misconceptions

 Questions & Answers

2 Snap Shot: SeaPort Airlines, Inc.

 Founded 1982 – 30+ years as “Wings of Alaska” prior to acquisition in 2008 by SeaPort Air Group

 Headquarters in Portland, OR with operational bases at Portland, Memphis, Juneau, and – beginning May 1 – San Diego

 175 employees operate an average of 90 departures each day across 8 states –flights and employees increase during summers to serve Alaska tourists

 Fleet of 16 aircraft – 4 more deliveries scheduled through 2013

 Focus on increasing interline agreements to expand connecting opportunities for our customers - technology investments made, on-going discussions with virtually all carriers (each have different criteria).

3 4 A Track of Record of EAS Success  Service to eight EAS communities

• OREGON: Pendleton • ARKANSAS: El Dorado, Harrison, Hot Springs • KANSAS: Salina • TENNESSEE: Jackson • GEORGIA: Athens

 Satisfied communities & customers

• Partner with each EAS community

• Customers value our personalized service and frequency of flights

• Those who choose us come to love us – have never lost an EAS contract renewal in the Lower 48

• At urging of communities, reselected during 2012 to provide EAS at Salina and Pendleton with four-year contract term (rather than standard two).

 We take on the challenge of rebuilding traffic in markets that other carriers have decimated

5 Active In All Of EAS Our Communities

6 Inventory Distributed Globally, Focused on Expanding Interline Partnerships

 Flights available at www.seaportairlines.com, all major GDS systems, and online travel agencies.

 Invested in a new reservation system capable of interline e-ticketing and baggage check, interline boarding passes, and screening of passengers in TSA’s secure flight.

 Building our portfolio of interline partnerships to enhance connectivity at hub airports.

 Spanish-language website planned for late 2013/early 2014

7 Background on EAS Selection

 USDOT selected SeaPort to provide 29 weekly to San Diego - annual subsidy of $1.896MM

 SeaPort and community preferred option of 17 weekly to San Diego and 12 weekly to Burbank - annual subsidy of $2.156MM

 USDOT states that the selection of SeaPort stands and that we only need to provide 29x weekly to SAN – at end of our initial contract, the choice will be reselect SeaPort or select the bid of a competing carrier

 DOT will approve an alternate service pattern request if:

• The pattern meets EAS minimum service levels

• The community and the airline are in agreement

• Does not cost USDOT more money

8 Benefits of San Diego and Burbank

San Diego Burbank

17 major airlines offer service to 50 nonstop Average of 75 daily departures operated by six destinations on average of 250 daily airlines. departures. 30 minutes to downtown Los Angeles v 40 developing a “focus city” at San minutes from LAX – if you’ve got business in Diego, LA, this is your airport!

International destinations include Mexico, Short security lines, curbside pick-up/drop-off, Canada, United Kingdom, and Japan. and quick access to car rentals (no shuttle bus transfers) Consistently ranks high among US airports for in customer satisfaction Easy rail access with station at the airport.

Low-fare airlines include Southwest, jetBlue, Ranked #1 for lowest fares in “Airfare Frontier, , & Spirit Affordability Report.”

Low-fare airlines include Southwest and jetBlue. 9

9 Benefits of San Diego and Burbank

SAN DIEGO

San Diego offers global connectivity & single-connection flights to nearly all major metropolitan areas.

Burbank provides BURBANK convenient access to downtown Los Angeles, plus easy connections to major markets along the west coast. 10

10 Proposed Alternative Service Pattern

 12x weekly roundtrips to Burbank

• Two roundtrips each weekday, one on Saturday, and one on Sunday

• Flights timed to allow for out in the morning, full-day of business, and return the same evening

• Secondary consideration is timing to connect with service to Sacramento

 12x weekly roundtrips to San Diego

• Two roundtrips each weekday, one on Saturday, and one on Sunday

• Flights timed primarily for connections with emphasis on Alaska Airlines

 Lower frequencies of alternative service pattern factor longer flight to Burbank (186 miles) relative to San Diego (94 miles)

• Additional frequencies will be considered if demand is there – we provide more than contracted service in two EAS markets

• Four departure times is still double the current SkyWest schedule

11 Proposed Alternative Schedule

12 Weekly RTs to San Diego (SAN) + 12 Weekly RTs to Burbank (BUR) Depart Arrive Frequency Stops Depart Arrive Frequency Stops Imperial/El Centro to Burbank/Los Angeles Burbank/Los Angeles to Imperial/El Centro 5:15am 6:30am ExSun 0 8:00am 9:15am ExSun 0 4:30pm 5:45pm ExSat 0 6:15pm 7:30pm ExSat 0 Imperial/El Centro to San Diego San Diego to Imperial/El Centro 9:30am 10:15am ExSun 0 10:45am 11:30am ExSun 0 2:00pm 2:45pm ExSat 0 3:15pm 4:00pm ExSat 0

12 Delayed Start: Unexpected Costs

 Budgeted $8,000/month for SAN based on $140/sq. ft. year

 Did not expect (and were not told) that SAN used “80/20 Rule”

• 20% of all airport costs (joint use terminal space, airfield, etc.) divided equally by number of airlines

• 80% allocated by percentage of enplanements

• Treats SeaPort the same as United, Southwest, or Japan Airlines

• Most airports with 80/20 formula have an exemption for small aircraft and/or airlines that generate less than 1% of total enplanements (i.e., PDX or PHX)

• Adds $17,000/month in unexpected costs

 Lobbying other airlines to support exemption

 Working on commuter terminal issues

13 Thank You. Questions?

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