Southern Airways Eas Bid 2016

8/16/2019 Southern Airways Eas Bid 2016

1/19

BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

________________________________________________)

Essential Air Service at: )

)Altoona, Pennsylvania ) OST-2002-11446

Clarksburg/Fairmont, West Virginia ) OST-2005-20736

Dubois, Pennsylvania ) OST-2004-17617

Greenbrier/White Sulphur Springs, West Virginia ) OST-2003-15553

Jamestown, New York ) OST-2003-14950

Johnstown, Pennsylvania ) OST-2002-11451

Morgantown, West Virginia ) OST-2005-20735

Parkersburg, West Virginia/Marietta, Ohio ) OST-2005-20734

Staunton, Virginia ) OST-2002-11378

)

Under 49 U.S.C. §41731 et seq. ) ________________________________________________

SOUTHERN AIRWAYS EXPRESS

PROPOSAL TO PROVIDE SUBSIDIZED ESSENTIAL AIR SERICE

By Order 2016-3-33, the Department requested proposals from carriers interested in providing

Essential Air Service to the communities of Altoona, Beckley, Clarksburg/Fairmont, Dubois,Greenbrier/White Sulphur Springs, Jamestown, Johnstown, Morgantown, Parkersburg/Mariettaand Staunton. Pursuant to that Order, Southern Airways Express, LLC (“Southern”) cordially

submits this proposal to provide subsidized air service to nine of those communities.

Correspondence with regard to this document should be addressed to:

R. Stanley Little

Chief Executive Officer

Southern Airways Express

8869 Centre StreetSouthaven, Mississippi 38671

Telephone: 901-672-7820

E-Mail: [email protected]


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Bid Summary

Southern Airways Express, formerly known as Sun Air Express, hereby offers proposals to

provide service to the communities of Altoona, Clarksburg/Fairmont, Dubois, Greenbrier,

Jamestown, Johnstown, Morgantown, Parkersburg/Marietta, and Staunton.

All of Southern’s proposals are for a period of two years.

Southern proposes to operate high-frequency, low-fare service using 9-passenger turbopropCessna Caravan aircraft. Southern’s management believes that this model is well suited to servethe markets with properly-timed schedules and the ability to provide high levels of sustainedreliability, a significant problem that a number of the cities have faced recently.

Southern has adopted a flexible, community-focused approach to its proposals that not only

provides low-fare, high-frequency service to important regional hubs, but is accompanied byflight schedules that have been tailored to provide maximum convenience and connectivity. Anumber of the community proposals include multiple service options in terms of destinations and

weekly frequencies, as well as adjusting capacity to seasonal demand.

All of the service proposals have been designed to ensure continued high levels of service

reliability. Southern (and formerly Sun Air) has built a reputation for consistent reliability andhigh levels of customer service. This has been achieved by working to ensure full levels of flightcrew staffing, realistic aircraft schedules, and retaining multiple full-time operational spare

aircraft. Southern’s controllable completion factor of scheduled flights for 2016 has been over

98%.

MARKETING & DISTRIBUTION

Flights will be displayed in the major travel agent systems:

• SABRE• AMADEUS•

WORLDSPAN• GALILEO• TRAVELPORT• APOLLO• TRAVELSKY/CHINA (Coming late 2016)

And on the major online travel agencies websites:

• Expedia• Travelocity• Orbitz• Kayak• Priceline•

Cheaptickets• DoHop• BookIt.com

Plus, on the company’s web site. Here, Southern has invested considerable capital in an industry-leading technology that facilitates connections between the company and all other carriers which

publish their schedules in OAG and their fares in ATPCO, including the Low Cost Carriers thathave become an important element in the US airline industry. Even where interline agreementsare not available, such as with Southwest and Allegiant, this technology (debuting July 2016) will

assist passengers in making connections to/from Southern and destinations world-wide.


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Uniquely in the industry, Southern has full-time, dedicated EAS marketing professionals who

maintain a physical presence in each service community. Including weekly marketing calls and bi-weekly visits with airport officials, Southern executives are engaged with the airports in everyaspect of the operation. We adapt to local needs and include extra, non-subsidized service when

occasions permit (sports-related flights, special event flights, etc.) Southern prides itself on the

relationships that it has built with its service cities, and we welcome any prospective communityto contact city and airport officials anywhere in our footprint to inquire about our reputation!

Service Proposal

Southern has designed unique service proposals for each community, adjusting frequencies and

destinations based on how it believes it can maximize the utility of EAS, and in close consultationwith the communities.

An important element to its proposals, relative to what is typically done by EAS providers and bythe company itself, is to expand the daily scheduled flights such that they leave earlier and arrive

later every day. The chief comments that the company has received from its consultation with the

communities have concerned frequency and time-of-day coverage. Southern has directlyaddressed these issues in this proposal, and will change the flight crew schedules such that twofull sets of crews are typically utilized, reducing their respective time on duty and allowing a

much wider time window to provide service. Every community will have an early morning

departure and a late evening return.

While specific flight times will be completed in coordination with the communities, Southern’s

service proposals generally provide for departures as early as 0530, allowing for early morninghub connections, and arriving back to the EAS community as late as 2200, similarly allowing for

later evening inbound connections. Southern believes that the value of such schedule flexibility

more than offsets the incremental staffing costs required, and will be a meaningful contributor togrowing passenger enplanements.

Proposed Flight Frequencies, Round Trip (final allocations of weekday and weekend flights to be

confirmed based upon community input; total weekly flights would be as proposed):

ALTOONA – A: 13x weekly to BWI and 19x weekly to PIT

ALTOONA – B: 30x weekly to PITALTOONA – C: 26x weekly to PIT

CLARKSBURG – A: 24x weekly to PIT and 13x weekly to BWICLARKSBURG – B: 19x weekly to PIT and 13x weekly to BWICLARKSBURG – C: 31x weekly to PIT

DUBOIS – A: 19x weekly to PIT and 19x weekly to BWIDUBOIS – B: 14x weekly to PIT and 19x weekly to BWIDUBOIS – C: 31x weekly to PIT

JAMESTOWN – A: 20x weekly to PIT and 6x weekly to ALBJAMESTOWN – B: 25x weekly to PIT

JOHNSTOWN – A: 24x weekly to PIT and 14x WAS (community’s choice of IAD or BWI)JOHNSTOWN – B: 19x weekly to PIT and 14x WAS (community’s choice of IAD or BWI)

JOHNSTOWN – C: 31x weekly to PIT


4/19

GREENBRIER – A: 15.5x weekly to BWI; 12x weekly to PIT; 12x weekly to CLT

(12x weekly to each city during 22-week high season, with jet overlay)(addt’l 6x weekly Caravan to BWI during 30-week low season when jetnot present.)

GREENBRIER – B: 12x weekly to BWI; 12x weekly to CLT; 6x weekly to PIT – year-roundJet overlay for 22 weeks in high season

GREENBRIER – C: 12x weekly to BWI; 12x weekly to CLT

Jet overlay for 22 weeks in high season

IN ALL OPTIONS: Jet overlay is minimum 30 pax aircraft, twiceweekly to CLT and either HPN or BWI, at community’s choice.

MORGANTOWN – A: 19x weekly to PIT and 19x weekly to IAD

MORGANTOWN – B: 24x weekly to PIT and 14x weekly to IADMORGANTOWN – C: 19x weekly to PIT and 14x weekly to IAD

PARKERSBURG: 32x weekly to PIT

SHENANDOAH: 28.5x weekly to BWI

(32x weekly during 22-week high season)(25x weekly during 30-week low season)

Local fares would be set for effectiveness of “add-on” prices to flights to/from each respective

hub, generally in the $29 to $59 range each way.

Previously, the company’s aircraft have had limitations on baggage capacity, particularly with

respect to large hard-sided bags that did not fit in the existing storage facilities. Baggage

limitations have contributed to passenger leakage to other airports, but this issue has been fully

addressed by a major capital investment in new aircraft. Southern is moving to an all-Caravanfleet, each of which has a cargo capacity sufficient to carry two checked bags for each of the nine

passengers, plus golf clubs and other parcels. The Caravan is the only nine-passenger aircraft inthe industry that can make this guarantee.

Company History and Culture

Southern Airways was born out of necessity. When Delta Air Lines de-hubbed Memphis, avacuum in air travel was created in the Mid-South. Most of the popular non-stop destinations that

residents of the metro area had enjoyed for years were no longer offered. In 2013 Southern tookflight and became the preferred method of travel not just for the masses commuting to the Florida

Gulf Coast, but also for some of the area’s most affluent business travelers, as well. Providing

affordable, high-touch, first class, charter-style service to passengers that had given-up on shorthaul air travel (and instead turned to the automobile) became the model upon which Southern

built its reputation. In short, Southern Airways has a proven track record of putting people onairplanes!

In early 2016, Southern Airways acquired Sun Air Express in a transaction that created greaterresources for the combined company. Sun Air had developed a network of communities in the

Mid-Atlantic region within the Essential Air Service program. Combining the companies

immediately led to unparalleled synergies. The resources and improved aircraft of Southern,along with the operational leadership of Sun, created an air service provider that is successful atoperating both Essential Air Service routes as well as traditional market-based flights between


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high-density areas and popular destinations. Southern brings a leadership mindset that is focused

on business development, relationship-building, community involvement, and passengersatisfaction to a Sun Air product that has a strong and well-established infrastructure in theregion.

The operational excellence of Sun and the customer-centric mindset and superior marketingability of Southern has created a dynamic new company that will be the model for Essential Air

Service providers in the future.

The combination of the two companies and the upgrading of the aircraft used in scheduled servicehas created one of America’s only commuter airlines that has not one, but an entire fleet, of

reserve aircraft. These extra aircraft will insure against cancelled flights and will be available foron-demand charter for potential clients in each of the Southern Airways cities.

The motto of Southern Airways is “ Every Passenger, Every Flight, Every Day. “ That focus on

the passenger experience can be seen through the countless testimonials that passengers post ontoour social media accounts. With over 20,000 Facebook followers in the Mid-South alone,

Southern has leveraged its innovative social media presence to create a dialogue with passengers.That dialogue has led to the highest levels of customer satisfaction and enthusiasm. In addition toutilizing social media sites like Facebook, Instagram, YouTube, and Pinterest, Southern is also a

big proponent of traditional marketing and adverting. From custom, professionally- produced

radio jingles to a national-broadcast quality television commercial, Southern is committed tocommunity marketing on all levels.

Links to Southern’s Social Media Sties are listed below.

www.facebook.com/iFlySouthern

www.instagram.com/FlySouthern

www.pinterest.com/iFlySouthern

www.twitter.com/iFlySouthern

www.youtube.com/user/iFlySouthern

About Southern Airways Express

Southern Airways Express is a Memphis (Southaven, Mississippi)-based commuter air carriercurrently serving markets in Pennsylvania, Virginia, Maryland, New York, Tennessee, Georgia,

Mississippi, and Florida.

The airline has operated charters and scheduled service within a 14-state footprint for a number ofyears. The company is now the combined product of the original Southern Airways Express and

the former Sun Air International, having combined operations earlier this year. Since that time,Southern has focused on improving operations, upgrading technology, converting to an all-

turbine fleet, and expanding the community-centric and high-touch personal service that has beenthe backbone of the company since its founding.

Operational improvements at the airline have been significant. For the Year to Date period,Southern (including the former Sun) is operating at more than a 98% controllable completion

factor (percentage of scheduled flights that are completed, excluding weather).


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SCHEDULE 1

Annual Projected Operations

Altoona:

Altoona Option "A": AOO -BWI/HPN

Passenger Revenue $530,540

Flight Operations 1,211,706

Maintenance 596,423

Sales & Service 946,567

All Other 295,000

Total Operating Costs $3,049,696

Operating Profit/(Loss) $(2,519,156)

Profit Element (5%) 152,485

Annual EAS Subsidy Required $2,671,641

Available Seat Miles 3,149,565

Revenue Passenger Miles 1,732,261

Load Factor 55.0%

Annual Departures 3,238

Available Seats 29,142

Enplaned Passengers 16,028

Average Segment Fare $33.10

Subsidy per Departure $825


7/19

Altoona Option "B": AOO - PIT



Maintenance 552,821


All Other 270,000Total Operating Costs $2,844,549






Load Factor 55.0% Annual Departures 3,042






8/19

Altoona Option "C": AOO - PIT



Maintenance 491,778








Load Factor 55.0%







9/19

Clarksburg Option "A": CKB-PIT/BWI



Maintenance 770,801

Sales & Service 1,063,071

All Other 370,022







Load Factor 55.0%

Annual Departures 3,733 Available Seats 33,593




Clarksburg Option "B": CKB-PIT/BWI



Maintenance 700,311


All Other 304,676







Load Factor 55.0%







10/19

Clarksburg Option "C": CKB-PIT



Maintenance 517,037








Load Factor 55.0%


Available Seats 28,146Enplaned Passengers 15,480



Dubois Option "A": DUJ-PIT/BWI



Maintenance 908,021


All Other 121,155







Load Factor 55.0%







11/19

Dubois Option "B": DUJ-PIT/BWI



Maintenance 831,717


All Other 127,155







Load Factor 55.0%

Annual Departures 3,346 Available Seats 30,116




Dubois Option "C": DUJ-PIT



Maintenance 623,082


All Other 159,888







Load Factor 55.0%







12/19

Jamestown Option A: JHW-PIT/ALB



Maintenance 629,646








Load Factor 55.0%





Jamestown: Option B: JHW-PIT


Flight Operations 955,816

Maintenance 483,579


All Other 272,500







Load Factor 55.0%







13/19

Johnstown Option "A": JST-PIT/WAS



Maintenance 732,845








Load Factor 52.4%






14/19

Johnstown Option "B": JST-PIT/WAS



Maintenance 656,933


All Other 267,225







Load Factor 55.0%






Johnstown Option "C": JST-PIT



Maintenance 550,656

Sales & Service 682,453 All Other 348,122







Load Factor 55.0%







15/19

Greenbrier Option "A": LWB-BWI/PIT/CLT "#$#%#& '(#)*+ ,(-

Passenger Revenue $1,086,553 ./0120/

Flight Operations 1,796,514 3//41005

Maintenance 1,223,867

Sales & Service 1,859,090 /21560

All Other 139,000

Total Operating Costs $5,018,470 $970,615

Operating Profit/(Loss) $(3,931,917) $(681,016)

Profit Element (5%) 250,924 48,531

Annual EAS Subsidy Required $4,182,841 $729,547

Available Seat Miles 7,122,632 1,794,874

Revenue Passenger Miles 3,463,806 920,987

Load Factor 48.6% 51.3%

Annual Departures 3,985 170

Available Seats 35,863 5,092

Enplaned Passengers 17,387 2,673

Average Segment Fare $62.49 $108.33

Subsidy per Departure $1,050 $4,298

Greenbrier Option "B": LWB-BWI/PIT/CLT "#$#%#& '(#)*+ ,(-

Passenger Revenue $913,821 ./0120/

Flight Operations 1,835,098 3//41005Maintenance 970,537

Sales & Service 1,528,561 /21560

All Other 139,000

Total Operating Costs $4,473,196 $970,615


Profit Element (5%) 223,660 48,531











16/19

Greenbrier Option "C": LWB-BWI/CLT "#$#%#& '(#)*+ ,(-

Passenger Revenue $778,995 ./0120/

Flight Operations 1,506,644 3//41005

Maintenance 768,484

Sales & Service 1,209,500 /41745

All Other 139,000Total Operating Costs $3,623,628 $969,342


Profit Element (5%) 181,181 48,467










Morgantown Option "A": MGW-PIT/IAD



Maintenance 656,933


All Other 601,850







Load Factor 50.0%







17/19

Morgantown Option "B": MGW-PIT/IAD



Maintenance 613,554








Load Factor 50.0%





Morgantown Option "C": MGW-PIT/IAD



Maintenance 559,331


All Other 430,850







Load Factor 50.0%







18/19

Parkersburg: PKB-PIT



Maintenance 565,838








Load Factor 55.0%





Staunton: SHD-BWI



Maintenance 678,142


All Other 71,850







Load Factor 55.0%







19/19

In conclusion, Southern Airways Express believes that its proposal will provide an unsurpassed

level of service to the communities, and ensures that they have proper access to the national air

transportation network, offering cost-effective options that meet the requirements of the EssentialAir Service Program.

Respectfully Submitted: May 20, 2016

______________________

R. Stanley Little

Chief Executive OfficerSouthern Airways Express, LLC

Southern Airways Eas Bid 2016

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