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Hunter,
Vassilis has continued to study the Trainose numbers. Based upon his analysis the passenger business should be allowed to make E5.0 million pre-tax per the government subsidy. Also, if you look at the numbers, eliminating three lines will increase profitability by another E2.0 million. I meet with Cosco’s lawyer today and will meet the U.S. Ambassador on Tuesday.
I will keep you informed of any updates.
David

> Begin forwarded message:
>
> From: Vassilis Sotiropoulos <v.sotiropoulos@euroconsultants.com.gr>
> To: "Davis C. Wittig" <daviswittig@wwcorp.com>, "'David C. Wittig'" <davidwittig@me.com>
> Subject: Trainose passenger optimum profitablity under PSO
> Date: April 3, 2015 at 4:27:57 PM GMT+3
>
> The PSO subsidy is the amount requited to have 7.5% profit margin, capped at 50mm.
> So if we agree that passenger revenue will remain at 2013 levels of ~60mm then under perfect operations passenger business should generate 4.5mm profit (or 3.5mm with unacceptable expenses), against reported 1.7mm losses!
> 3.5mm after tax should be 2.6mm net profitability or 11% return on invested capital (23mm).
> Now the real target is :
> · Improve acceptable expenses in order to reach the 7.5% profitability
> · Reduce unacceptable expenses as close as possible to zero
> · Maintain an operation record as close to perfect as possible
> · Maintain investor WACC below 11%
>
> I find this to be an important part of our passenger pitch – if ever we come to that!