April 30, 2019

EAS Proposal for: Rutland, Vermont Docket DOT-OST-2005-21681 To/from Boston with codeshare of

Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, SVP Planning 660 Barnstable Road, Hyannis, MA 02601 (508) 862-9719 2018 was Cape Air’s best year for Rutland ridership in six years

Cape Air Rutland Passengers Sum of both directions 14,000

12,000 11,671 11,731 10,843 10,923 10,842 11,018 10,561 10,262 10,205 10,000 9,639 8,676 8,000 Well done, 6,000 Rutland!

4,000

2,000

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Compared with Cape Air’s predecessor with 19-seat aircraft, ridership is up 123%

Rutland enplanements 7,000 +123%! Avg. 5,263 6,000

5,000

4,000 Predecessor Avg. 2,361 3,000 5891 5872 5453 5362 5352 5458 4831 5227 5084 4980 2,000 4381 369 2677 1561 1,000 2212 2194 1476 554 682 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20172018 Cape Air Colgan Commutair Source: T100 Cape Air Fast Facts

• Serving Rutland since October 2007

• Serving Boston since October 1989 • Now one of the largest airlines at Logan

• 98 aircraft in the fleet

• 34 cities served

• 750 employees

Dan Wolf Linda Markham • Flying 500,000+ passengers per year Founder & CEO President • Employee-owned and empowered workforce Havre Glasgow Wolf Point Sidney Glendive

Billings Saranac Lake Augusta Bar Harbor Rutland Lebanon Rockland

Boston Chicago O’Hare Provincetown Hyannis White Plains Nantucket Manhattan Martha’s Vineyard Decatur Cape Air serves Kirksville New Bedford New York (JFK) 34 cities St. Louis Marion Owensboro

Cape Air Routes 2Q19

Denotes seasonal service

Culebra St. Thomas San Juan Tortola Virgin Gorda Mayaguez Vieques St. Croix Featuring World class distribution

 Codeshare with JetBlue  Interline with the top network airlines at Boston  Major online travel agencies  City ticket office in Rutland Airline Partners Cape Air connects with: Through the partnership Cape Air connecting itineraries sell on jetblue.com Connecting itineraries are also available on united.com… …and aa.com Cape Air participates in TSA’s PreCheck program Commitment To Safety Safety first Core of our culture

Cape Air’s #1 priority is the safety of our operation • Multi-engine aircraft • FAA certified under Part 121 + 135 • Safety audits annually by: • All captains have an Air Transport Pilot – American Airlines Certificate – United Airlines – 1,500 hours minimum – JetBlue Airways • Director of Safety • SMS program approved by FAA – Department of 3 safety professionals • 30 years experience • WAAS-enabled GPS navigation – 100,000+ flights per year

Safety mantra: “Make the tough call in the name of safety, and we will support you” Cape Air proposes Rutland service in our fleet of brand new twin-engine Tecnam P2012 Travellers

Taxi‐out of Cape Air’s first production Tecnam P2012 Traveller March 19, 2019 Features • Two engines, for safety • 9 passenger seats • 2 pilot seats, and certificated for single pilot operations • Italian leather seats • Air conditioning • LED lighting • USB ports The “Traveller” was custom designed by Cape Air and Tecnam with communities like Rutland in mind

Highlights

• The first new purpose-designed commuter aircraft in 40 years

• Brand-new design

• Electronically controlled engines

• Glass cockpit • Garmin G1000 Nxi avionics

• Luxurious cabin with 9 single seats Cape Air’s Tecnam P2012 Traveller: Flying soon to Rutland! Featuring a Boston hub

 73 domestic non-stop destinations  49 international non-stop destinations  Top 10 metropolitan area in the United States  Collocated in terminal with JetBlue, Boston’s largest carrier with 71 non-stop destinations Boston is a world-class hub, with non-stop service to 122 cities

Boston non-stop destinations

1 Amsterdam, Netherlands 26 Detroit, MI 51 London, UK (LHR) 76 Paris, France 101 Santo Domingo, Dominican Republic 2 Aruba, Aruba 27 Doha, Qatar 52 Long Beach, CA 77 Philadelphia, PA 102 Sao Paulo, Brazil 3 Atlanta, GA 28 Dubai, United Arab Emirates 53 Los Angeles, CA 78 Phoenix, AZ 103 Saranac Lake/Lake Placid, NY 4 Augusta/Waterville, ME 29 Dublin, Ireland 54 Madrid, Spain 79 Pittsburgh, PA 104 Sarasota/Bradenton, FL 5 Austin, TX 30 Edinburgh, UK 55 Manchester, UK 80 Ponta Delgada, Portugal 105 Savannah, GA 6 Baltimore, MD 31 Fort Lauderdale, FL 56 Martha s Vineyard, MA 81 Port Au Prince, Haiti 106 Seattle, WA 7 Bar Harbor, ME 32 Fort Myers, FL 57 Massena, NY 82 Portland, OR 107 Seoul, Republic of Korea 8 Barbados/Bridgetown, Barbados 33 Frankfurt, Germany 58 Mexico City, Mexico 83 Praia, Cape Verde Islands 108 Shanghai, China 9 Barcelona, Spain 34 Halifax, NS 59 Miami, FL 84 Provincetown, MA 109 Shannon, Ireland 10 Beijing, China 35 Hamilton, Bermuda 60 Milwaukee, WI 85 Punta Cana, Dominican Republic 110 St. Louis, MO 11 Buffalo, NY 36 Harrisburg, PA 61 Minneapolis/St. Paul, MN 86 Raleigh/Durham, NC 111 Syracuse, NY 12 Burbank, CA 37 Havana, Cuba 62 Montego Bay, Jamaica 87 Reykjavik, Iceland 112 Tampa, FL 13 Cancun, Mexico 38 Hong Kong 63 Montreal, QC 88 Richmond, VA 113 Tel Aviv, Israel 14 Casablanca, Morocco 39 Honolulu, HI 64 Munich/Augsburg, Germany 89 Rochester, NY 114 Terceira, Portugal 15 Charleston, SC 40 Houston, TX (IAH) 65 Myrtle Beach, SC 90 Rockland, ME 115 Tokyo, Japan 16 Charlotte, NC 41 Houston, TX (HOU) 66 Nantucket, MA 91 Rome, Italy 116 Toronto, ON (City) 17 Chicago, IL (ORD) 42 Hyannis, MA 67 Nashville, TN 92 Rutland, VT 117 Toronto, ON (Bishop) 18 Chicago, IL (MDW) 43 Indianapolis, IN 68 New Orleans, LA 93 Sacramento, CA 118 Vancouver, BC 19 Cincinnati, OH 44 Istanbul, Turkey 69 New York, NY—EWR 94 Salt Lake City, UT 119 Washington, DC‐‐DCA 20 Cleveland, OH 45 Jacksonville, FL 70 New York, NY—JFK 95 San Diego, CA 120 Washington, DC‐‐IAD 21 Columbus, OH 46 Kansas City, MO 71 New York, NY—LGA 96 San Francisco (SFO) 121 West Palm Beach, FL 22 Copenhagen, Denmark 47 Las Vegas, NV 72 Norfolk, VA 97 San Francisco (Oakland) 122 Zurich, Switzerland 23 Dallas/Ft. Worth, TX (DFW) 48 Lebanon‐Hanover, NH 73 Orlando, FL 98 San Jose, CA 24 Dallas/Ft. Worth, TX (DAL) 49 Lisbon, Portugal 74 Ottawa, ON 99 San Juan, PR 25 Denver, CO 50 London, UK (LGW) 75 Panama City, Panama Republic 100 Santiago, Dominican Republic

Source: OAG JetBlue is the largest carrier at Boston, with more than a quarter of capacity, and thus is key to Rutland connectivity

Boston Logan seat share July 2019

Other Cape Air 19% 1% JetBlue Alaska 26% 2% Spirit 4% Southwest 6%

United Delta 9% 19% American 14%

Source: OAG Rutland is a JetBlue codeshare city JetBlue is a superb partner for Cape Air at Boston, providing great connectivity and service for Rutland JetBlue Boston route map JetBlue service at BostonJuly 2019

RUTLAND

Cape Air’s partner, JetBlue, serves 71 cities from Boston; Cape Air and JetBlue share space in Terminal C at Logan Airport Because of Cape Air’s connectivity, in 2018 43% of Cape Air’s Rutland passengers connected on a Cape Air interline or codeshare to 70 unique cities

Through-ticketed destinations of Cape Air’s Rutland passengers 2018 City Pax City Pax City Pax City Pax City Pax 1ATL 187 15SFO 59 29BUF 20 43FNT 10 57MFR 9 2TPA 122 16DEN 48 30JFK 20 44HOU 10 58MYR 9 3DCA 120 17MSP 48 31RSW 20 45IND 10 59OKC 9 4LAX 98 18ORD 48 32DTW 19 46MKE 10 60SAF 9 5DFW 95 19LAS 39 33PDX 19 47MSN 10 61SAN 9 JetBlue is key: 6MCO 88 20LGA 39 34SAV 19 48RNO 10 62SBP 9 61% of Rutland’s 7JAX 82 21PHL 39 35SAT 18 49UIN 10 63SDF 9 connections are 8FLL 81 22RIC 39 36CHA 18 50CMH 9 64SJC 9 with JetBlue 9RDU 70 23SEA 39 37MIA 18 51DLH 9 65TUS 9 10BWI 69 24IAD 31 38LGB 16 52FWA 9 66XNA 9 11PIT 69 25EWR 28 39BHM 10 53GRK 9 67ABQ 8 12CLT 67 26MEM 28 40BNA 10 54GRR 9 68PNS 8 13PBI 61 27IAH 26 41CHS 10 55GSO 9 69ROA 8 14PHX 60 28SLC 22 42CLE 10 56MAF 9 70AGS 6

Source: US DOT O&D Survey Marketing And Community Engagement Cape Air’s marketing for Rutland, with a $50,000 budget, is active, targeted andMarketing ongoing In addition to advertising, engagement with local organizations is core to Cape Air’s service for Rutland

Rutland-area donation recipients in 2018 Community engagement—a Cape Air forte 1 Burr and Burton Academy 13 Prevent Child Abuse Vermont 2 Castleton University 14 Rutland Area Christian School 3 Cobra Booster Club 15 Rutland Chamber of Commerce 4 Fair Haven Rotary 16 Rutland High School 5 Fort Ticonderoga 17 Rutland Dismas House 6 Grace Christian School 18 Rutland Youth Theatre 7 Jeff's Basket Party 19 Teddy's Toys not Tears 8 Killington PICO 20 The Dream Center 9 Killington Wine 21 Vermont Adaptive Ski & Sports 10 Okemo Mountain Resort 22 VNA & Hospice—Southwest Region 11 Poultney Vermont Rotary 23 Wallingford Rotary Club 12 Poultney Class of 2019 Cape Air’s proposal includes a ticket office in downtown Rutland

Rutland ticket office

City ticket office highlights

• Increases the visibility of the airport and air service within the community

• Provides a welcoming place for people to learn about the air service from a friendly Cape Air agent

• Enables the redemption of targeted promotions, providing wide latitude in marketing the air service

• Enhances the central business district with a vibrant retail space The Cape Air difference New multi-engine aircraft, connectivity, community

• Brand new multi-engine aircraft • Interline partnerships with: – Proposal includes brand-new Tecnam P2012 – Alaska Travellers, with 9 passenger seats plus 2 pilot seats – American –Delta • JetBlue codeshare – JetBlue –United • Collocated with JetBlue, Boston’s largest carrier – And More

• Prime gate location at Boston Logan • TSA Pre-Check

• Dedicated community partner • Planes and pilots based in Rutland – Robust marketing budget: $50,348/year

Cape Air would be honored to take Rutland to the next level of service with new Tecnam aircraft and build on our years of success together! EAS Proposal Economics

: A proven partner for Rutland Cape Air’s Rutland proposal: 3x daily Boston – Rutland Economics: Option A Expenses Two‐year term; discount for 4‐year term, preferred, is noted below Fuel $627,115 Maintenance $438,793 Pilots, Training & Supplies $371,877 Ownership $350,407 Drivers Stations $339,328 Landing Fees $75,851 Daily RTs 3 Marketing $50,348 General & Admin./Other $214,029 Pax/Dpt 5.4 Operating expense $2,467,747 LF 60% Fare (net) $78 Return of 5% $129,881 Pax Rev $894,755 Economic Expense $2,597,629 Passenger Revenue $894,755 Profit ($1,702,873)

Subsidy Required $1,702,873 Per Departure $802 Year 1 Per Passenger $148

4‐year option 4-Year Contract Discount $1,652,468 preferred Per Departure $778 Note: See escalation factors subsequent slide To align revenue with costs, Cape Air proposes escalation factorsEscalations for Rutland

Annual subsidy including escalation Two-year reselection Year 1 $1,702,873 Year 2 $1,753,960

Four-year reselection

Preferred Year 1 $1,652,468 Year 2 $1,702,042 Year 3 $1,753,104 Year 4 $1,805,697 Thank you!

Hyannis Air Service, Inc., dba Cape Air Attn: Andrew Bonney, SVP Planning 660 Barnstable Road, Hyannis, MA 02601 (508) 862-9719