# • 

# OlSe 

# irport

June 8, 2012
Ms. Aloha Ley Associate Director, Small Community Program 1200 New Jersey Avenue SE Washington DC 20590
Re: Legal Sponsor Boise Airport DUNS #155795230 EIN #82-6000165 Congressional District ID #02
Dear Ms. Ley, On behalfofthe Boise Airport and the Friedman Memorial Airport, please acceptthis letter and attached application as ourjoint proposal forfunding for a grantfrom the US Department ofTransportation under the Small Community Air Service Development Program. Boise Airportwill serve as the official grant applicant and legal sponsor. We have agreed tojoin efforts in orderto leverage our limited resources to improve air service and access to the entire region and improve connectivity between our communities. Decreased airline seat capacity, frequencies, and destinations, as well as increased fares, are posing significant challenges to the businesses and residents in Southwestern Idaho. As one ofthe most geographically isolated regions in the country, air service is critical to our economy and way of life. Our proposal has significant local support and financial contributions from both airports and various business organizations in both regions. By awarding this grant, you would be enabling the entire region ofSouthwestern Idaho to expand business relationships and improve opportunities for our communities. Please feel free to contact us with any questions. Thank you for your consideration. Sincerely,

# ~~~ Rebecca Hupp, A.A.E Airport Director Boise Airport Rick Baird Airport Director Friedman Memorial Airport

# BoiseAb1Jort

Consortium GrantApplication UnderThe 

# Small Community irService evelopment rant Program DOCKET OST-2012- 0069
DUNS 

### # 155795230 

### Congressional District# ID-02

Small CommunityAir Service Development Program OST- 2012-0069 1Consortium GrantApplication of BoiseAirport& Friedman Memorial Airport 

### 2 

# Table ofContents INTRODUCTION
.........................................................................................................3 TECHNICAL OUTLINE

## ·······~~················~~········································································4 EUGIBILITY•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••

### 5 EXECUTIVE SUMMARY.................................................................................................6

STATEMENT OF DEFICIENCY

...................................................................................................

### 6 PROPOSED GRANT SOLUTION

.................................................................................................

### 7 SPONSORS & PARTNERS

.......................................................................................................

### 7 

### II.THE REGIONAL AIR SERVICE CHALLENGE
............................................................8 CURRENT AIR SERVICE

.........................................................................................................

### 8 AIRUNE SHARES AND CAPACITYTRENDS

..................................................................................

### 8 CAPACITY SHIFTS- DOWNWARD

.............................................................................................

### 9 THE CO-TERMINAL RELATIONSHIP- BOI/SUN

........................................................................

### 10 HISTORICALTRAFFIC STATISTICS

.........................................................................................

### 11 FARES TO THE US SOUTH ARE MUCH HIGHER THAN OTHER AIRPORTS

..........................................

### 11 TRAFFIC DECUNES CONTINUE

..............................................................................................

### 12 CURRENT SERVICE LEVELS RESTRICT ACCESS TOTHE ENTIRE SOUTH

............................................

### 14 CURRENT ACCESS- CAPACITY CHOKE-POINTS

...........................................................................

### 17 THE SOLUTION- ACCESS TO A SOUTHERN GATEWAY

................................................................

### 18 POTENTIAL FORECAST•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 

### 19 IV. THE GRANT STRUCTURE .........................•.......•.•..•..•.•.•...•.•.•...............................20 REQUIREMENTS ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••..••••••••••••••••••••••••••••••••••••••••••••••20 LOCAL SUN-BOI CONNECTOR SERVICE••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••

### 21 IMPLEMENTATION & MARKETING PLANS

..................................................................................

### 21 DISTRIBUTION OF FUNDING•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••

### 22 POST-PROGRAM SUPPORT••••••••••••••••••••••••••••••••••••••••••••••••.••••••••••••••••••••••••••••••••••••••••••••••••••22

Small CommunityAir Service Development Program OST- 2012-0069The Boise/SunValley situationfits the intentof theGrant Program:
An airservice deficiency, highfares, and a proposed

innovative, attainable solutionwith low riskto the Department'sfunds. 

### 3 

# Introduction The communities of Boise and Hailey (Sun Valley) believe that this grant application fully meets the intent of Congress in establishing the Small Community Air Service Development Grant Program nearly a decade ago: 

### 1. There is a clear and demonstrable air service deficiency. Lack of capacity and access to the US South is an economic detriment for the entire region of Idaho served by Boise Airport and by Friedman Memorial. 2. Fares to the key targeted region are higher - much higher - than at other communities in the Northwest. This grant will provide much-needed fare discipline, especially in light of the fact that load factors over current gateways represent nearly full flights - which generate higher fares. 3. There is innovation in this proposal, in that it is a consortium of two communities with a shared interest in additional air service, plus an intra-regional service component, which, if successful, could be a model for other parts ofthe nation. 4. There is limited risk for the Department. The data in this application demonstrate quite powerfully that the service this grant will make possible will tend in incubate more and additional service in the future. 1 

### 5. The communities involved have significant investment in this grant application, with strong in-kind support, along with the hard-dollar $210,000 contribution. For these reasons, the communities of Boise and Hailey respectfully request favorable consideration ofthis application.

1 It is respectfully suggested that this grant will follow the template of earlier SCASD grants at Sarasota-Bradenton (SRQ) and Charleston/Yeager (CRW) where the service incubated by the grant became a foundation for additional air service access. Small CommunityAir Service Development Program OST- 2012 -0069Consortium GrantApplication of Boise Airport& Friedman Memorial Airport 

### 4 

# Technical Outline A. The IdahoAir Service Consortium Boise Airport Friedman Memorial Airport Point ofContact ForThis Application: Ms. Rebecca Hupp Executive Director Boise Airport 3201 Airport Way, Suite 1000 Boise, Idaho, 83705 (208) 424-5601 

### B. Additional Community Members The Idaho Air Service Partnership - formed to submit and administer this grant - will represent the Community Members in this application 

# c. ProjectSponsor The Boise Airport will function as the official sponsor ofthis application. 

### D. Brief Project Description: The grant is to be applied to a carefully-crafted program to address a significant air service deficiency that is adversely affecting the Boise-Sun Valley economy. There is a material deficiency in air service access to the US mid-South and Deep South from the region served by both Boise and Friedman Memorial Airport in Sun Valley. At this time, Boise (BOI) serves as a co-terminal to the region served by Friedman Memorial (SUN). For BOI, the lack ofadequate access to the US South adversely affects the burgeoning high-tech industry in the region. For SUN, this lack of access, combined with the operational limitations of the airport, is a material detriment to the resort/ski industries in the Sun Valley Region. The US South is a major generator ofski business traffic to resorts in the US West. Currently SUN is cut offfrom this traffic demand, as well as the strong traffic generated in the summer months. The application requests a grant of $1 million dollars, to be accompanied by a local cash match of $210,000, plus in-kind incentives of over $50,000, to accomplish two main objectives:

Small CommunityAirService Development Program OST- 2012-0069Consortium GrantApplication of Boise Airport& Friedman Memorial Airport 

### 5

• Open up nonstop access to a major airline connecting hub in the South/Southeastern US. Targets would include Dallas/Ft/Worth, Dallas/Love, Houston/IAH. Houston/HOU, and Atlanta.
• Concurrent with the establishment of air service to the Southern US, Seaport Airlines has committed to implement connecting service between Boise and Sun Valley. This will provide nearseamless air service to Sun Valley from dozens of points in the South. A portion ofthe grant will be used to market and establish this service and the new connectivity throughout the US. 

### Eligibility Both BOI and SUN are fully compliant with the eligibility requirements as outlined in the Docket.

Small CommunityAir Service Development Program OST- 2012-0069Consortium GrantApplication of Boise Airport& Friedman Memorial Airport 6 

# Executive Summary Statementof Deficiency This application outlines an air service deficiency affecting the communities served by Boise Airport and by Friedman Memorial Airport in Hailey/Sun Valley. Boise has evolved into one of the nation's top high-tech regions. One of the emerging deficiencies is the lack of access to the commercial and high-tech centers in the US South and US Southeast. The community has experienced loss of business expansion to other regions simply because ofthis deficiency in reasonable air access tothe South.


### Duetooperational limitations at SUN, Boiseisa second airservice co-terminalfor Sun Valley ••• isgrantwill allownotonly ad · ional accessto BOI, 

### butalso to Su Valley.

Air Distance: 96 Miles Drive Miles: 152 Miles· 2.75 ours

Sun Valley, an important ski/resort community served by Friedman Memorial Airport (SUN), also has a deficiency in access to the US South, a region that is an important generator of national ski traffic demand. The South generates significant ski traffic in the winter and strong vacation

Small CommunityAirService Development Program OST- 2012-0069Consortium GrantApplication of Boise Airport& Friedman Memorial Airport 

### 7
traffic in the summer. Sun Valley is now at a material disadvantage in competing with other destinations forthis business. Because of operational limitations at SUN, nearby Boise has evolved into a co-terminal air gateway forthe Sun Valley region. The service which this consortium grant will make possible will address both ofthese deficiencies. 

### Proposed GrantSolution The Consortium and its community partners herein are requesting a grant in the amount of one million dollars, to be matched by a local contribution of$200,000 to accomplish two basic goals:


### • Service to A Southern Gateway Hub. Establish service to a connecting hub in the South to alleviate the deficiency in access to points across that region ofthe nation.


### • Air Connections To SUN. Provide marketing and operational support to allow SeaPort Airlines to operate connecting service to SUN from BOI. This will be an important addition that will both strengthen the proposed major airline hub service, as well as open SUN to additional access.2 

### Sponsors & 

### Partners The official sponsor ofthe application is Boise Airport. The community sponsorship will be directed and coordinated by the Idaho Air Service Partnership, which is a cooperative venture formed to assist in building air transportation in the region. This organization will be responsible for the community contribution, the marketing strategies, and other activities to assure that the proposed service is a success.

2 As the Department knows, the operational limitations of SUN restrict flights to turboprops. Additional access via BOI on SeaPort will open up the market to new connectivity from the rest ofthe nation, as well as help support the nonstops between BOI and the target connecting hub.
Small CommunityAirService Development Program OST- 2012-0069Because oftheoperational restrictions atSUN, Boise Airport isa co-terminalfor Sun Valley. The lackofaccess tothe populous US South hampers both marketsSUN and BOI. Consortium GrantApplication of Boise Airport& Friedman Memorial Airport 

### 8 

# II

.. The Regional Air Service Challenge CurrentAir Service Boise offers the region strong access to key connecting hubs in the West, plus access to the Delta hub at MSP, and the United hub at Chicago/O'Hare. Sun Valley has year-round service only to the Delta hub at Salt Lake City, via 30-passenger EMB-120 turboprops.

-· The route map clearly indicates that there is limited access to the US south. The air service access made possible by this grant will open Idaho to air commerce with this region. 

### Airline Shares and CapacityTrends The current airline share picture at BOI shows no one dominant carrier.

,;;**~0o:t10 "'Z'~:Sy'B**  h"Rf: >y "'"'"'"' ;'--0ii!iJill<!tibg**~"""'""** '**~~ "'"L"~~**  

# ----.**~-·--··--~··· ~t~---** **··---~~----1-···--~:~·-·T---··--~:: -·---~---~~** 

# ---

In 2011 - 2012, however, both American and Frontier exited the BOI market. While neither had a strong market share, the loss of Frontier

Small CommunityAirService Development Program OST- 2012-0069Consortium GrantApplication of Boise Airport& Friedman Memorial Airport 

### 9
service to its Denver connecting hub has exacerbated the lack of access to the South.3 

### Capacity Shifts
- Downward Capacity has declined at BOI, and is currently scheduled to drop by nearly 20% in the second halfof2012 v the same period of2011.

351 15,444 LAX 351 -100.00/o 15,444 -100.00/o AS 2.:393 2.732.**··~8'/o**...**~,~** 2(17,632 .15.ff'lo LV\.6 1.58 157 -o.e>lo 12.003 11,932 -o.e>/o FD< 711 fE2 25.50/o 54,(86 67,r.Jl. 25.50/o SE'A 1,147 1,316 14.7C'Io 87,172 100,016 14.7"/o SJC 183 184 0.50/o 13,9)3 13,!}34 0.50/o S1VF 160 183 14.4% 12.:trp 13,9)3 14.4'/o li 1,5'13 1,326 -14.1°/o ··147,316 134,350 -&solo 1\/EiP 444 462 4.1°/o 38,224 <J2.s;x) 12.2% SI.C l,OB 854 -21.4'/o l.OO,<m 91,400 -16.2."/o F9 19) -100.00/o 19,352 -100.00/o [E\J 19) -100.00/o 19,352 -100.00/o K5**~** :.l(X).OO/o .4,437 -lOO,(J>/o 10\ 420 -100.00/o 3,78) -100.00/o FOr 73 -100.00/o f57 -100.00/o U\ 2.376 2.426 .21% :161,816 161,684 -o.1% [E\J 889 839 -5.6"/o 67,W4 00,834 3.2."/o LAX D) 341 13.7"/o 15,cx:D 17,274 15.2."/o 

### rno 354 3S7 O.Sl/o 36,6:56 27,193 -25.Sl/o SfD 833 889 6.7"/o 42_456 47,378 11.6"/o lE 373 391 4.Sl/o 47,()!14 51,316 9.1°/o A-K 373 391 4.Sl/o 47,044 51,316 9.1°/o \f\A\1 3,004 1,743 -42.00/o 410,(93 238,071 -42.00/o [E\J 359 317 -11.7"/o 48,748 43,429 -10.9% (ffi 375 333 -11.2."/o 51,375 45,621 -11.2."/o LAS 366 351 -4.1°/o !:D,142 48,007 -4.1°/o 01.1< 351 29) -17.4% 48,007 39,73) -17.4'/o FD< 338 294 -13.00/o 45,856 39,558 -13.7"/o A-K 185 1.58 -14.6"/o 25,3'15 21,6'16 -14.6"/o Rf\0 340 -100.00/o 46,!:ID -100.00/o SE'A 356 -100.00/o 48,772 -100.00/o SI.C 334 -100.00/o 45,758 -100.00/o -:19..1°/o In the past year, BOI has lost five major airline routes. American dropped service to Los Angeles, Southwest dropped service to Reno, Seattle and to its hub at Salt Lake City. Frontier ended flights to its hub at Denver. These reductions were due mostly to strategic shifts at the airlines involved, and not due to lack oftraffic. Southwest is re-aligning its route system and moving aircraft from point-to-point markets.4 American is redeploying its fleet of 66-seat jets, and Frontier is shifting capacity to

3 The AA flights discontinued were to LAX, which provided very low levels of connectivity to other points on the American system. 4 This is a system-wide strategic move. Airports such as Austin, Albuquerque, and Midland/Odessa have seen similar reductions.
Small CommunityAirService Development Program OST- 2012-0069Consortium GrantApplication of Boise Airport& Friedman Memorial Airport 

### 10 Orlando markets. BOI is a strong market that can support the service outlined in this application. 

### The Co-Terminal Relationship- IBOI/SUN It is clear that the need for this new service can be justified on the basis of the traffic that can be generated by BOI alone. However1 because of the limited operational capabilities at Friedman Memorial Airport1 Boise is the 

### de facto co-terminal for access to Sun Valley. Therefore1 an increase in access at BOI is concurrently an improvement in access to the Sun Valley area as well. But to help improve traffic to both BOI and SUN 1 a portion of the grant funds will be used to support the establishment of service by SeaPort Airlines between BOI and SUN 1 offering consumers in the South the additional option offlight connections direct to Sun Valley over BOI. Hopefully1 the dependence on BOI as a gateway to Sun Valley will be lessened with the construction of a new airport in the Sun Valley area to replace Friedman Memorial. However1 such an event is literally years away1 and the economy ofthe Sun Valley region has an immediate need for additional air service access. To this end 1 the communities have opted to work together to address this air service deficiency. The plan is to have SeaPort airlines begin operations between BOI and SUN as a part ofa plan to gain additional ridership on the route proposed in this application.

Small CommunityAir Service Development Program OST- 2012-0069Consortium GrantApplication of Boise Airport& Friedman Memorial Airport 11 

### HistoricalTraffic Statistics The Boise - Sun Valley Region has experienced a combined decline in air passenger traffic ofalmost 18% in the past five years. Reviewing scheduled passenger O&D for the past five years indicates the following:
• Boise fare levels have increased by 23.0%
• O&D passengers have declined by 17.4% at BOI, and 19.0% at Sun Valley
• There is a huge OW fare variance between BOI and SUN. This has declined in the past five years, due to average fare levels increasing at BOI, but the high costs of flying into SUN are responsible for low load factors at Sun Valley.



# ... .aa·: 

# ....: ·Iiiii**•11~1** B:lise ! OIDF'a:;serg:rs 3,131,EB4 2,911,821 2,m3,633 2,681,893 2,583,4:<6

LJ:a:l R:dcr 72.0'/o 65.9'/o 71.3% 73.3% 754% A\QO/VPcre $163.92 $171.88 $16892 $183.27 $201.54 ' SunValley OIDF'a:;serg:rs 12B,cro 132,768 1,a:9,535 113,6;?3 103,787

LJ:a:l R:dcr 49.8'/o 52.9'/o 63.7% 00.1% 00.8'/o A\QO/VPcre $277.49 $285.04 $257.63 $252.44 $243.97 Preliun

### o.e- BO 63.3'/o 65.8'/o 52.5% ::s7'.7% 21.1%
lillO:'o om ill:"'·'"' •• ,..::, 

## . "**,.,a~:..:** .... !:.l'..r:**'.o1!-'"ii-..I(~.:D** 

### FaresTo The US South Are Much HigherThan Other Airports 

# . Glolil.ell : -17.4'/o

23.0'/o

-19.0'/o

-12.1%
;r.-..-v.t.li!ll

One ofthe outcomes ofthe lack of nonstop service to a true Southern US hub gateway are higher fares. When comparing actual fares per-mile that are charged to key points in the South from BOI, the data is very telling. To demonstrate this, fares between key markets in the West/Northwest to nine representative destinations in the US South were compared with those at Boise.5

5These are DFW, IAH, FLL, MSY, JAX, MIA, SAV, CHS, BHM. Fares are per-mile averages for full-year 2011, based on DOT data analyzed by Aviation DataMinerrM.
Small CommunityAirService Development Program OST- 2012-0069Consortium GrantApplication of Boise Airport& Friedman Memorial Airport 

### 12
Actual fares paid per-ticket are 

### notvalid comparisons, due to differences in sector differences. Therefore, the fares charged per mile to these cities is the true apples-to-apples metric. Based on this approach, it is clear that the cost of air travel is much higher at BOI than other cities in the region:

AVQ Fare Per**~le** . $0.1391 $0.12AO $0.1260 $0.1085 : $0.1263 I30J FarePenatlt¥



### The data are illustrative of the air service deficiency that the grant will address. 

### Traffic Declines Continue These fare differentials and lack ofaccess are part ofthe reason that BOI traffic has seen a decline. In addition, Boise has suffered a decline in enplanements even over the past year, plus a paradoxical increase in airline net fares - that which the airline charges before federal fees and taxes - ofalmost 16%.

600.000 I! !l. 

# J 400.000

W•il•oJM 201004

!'91,734 $164./6 0&0PassengerTrend

201101

IX>?,919 $17aED 201102 201103

Em,125 6<18,649 $171.73 $181.C6 $181.05 5200.00

;11 $100.00 a 550.00
50.00 201104

3,:!67,810 -3.39'/o $1GafD 16.91% 

### Note thatthe fares shown are one-way averages, net to the airline, and do not include all-up federal fees and taxes.

Small CommunityAir Service Development Program OST- 2012-0069Consortium GrantApplication ofBoise Airport& Friedman Memorial Airport 

### 13
The traffic mix and demand profile at SUN is entirely different from that of BOI, but there are equally disquieting trends when the data is reviewed.

0&0 Passenger Trend

5,000 2010Q4 2011Q1

f!;g. ' 2J,:'ffi ! 34,7S2 N;ia..W!lFire $212.92 ! $19192**19.~** $DI.IE 2011Q2**32,~1** $229.76 2011Q3 2011Q4**1~173** ! -1!175'/o ' $21nsi · iif>F/o 

### The note that the fares for the third quarter ofthe years shown - one of the peak quarters for the market - jumped over 20%. This trend is not expected to reverse, given high fuel costs. Also, note that the fare differential for using SUN instead of BOI is very substantial - using the 3Q of2011, this represented a 34% penalty for using SUN. This is clearly a deterrent to using SUN. This grant will provide additional net-new competition, as well as enhanced service convenience, that will address this situation.

Small CommunityAirService Development Program OST- 2012-0069Consortium GrantApplication of Boise Airport& Friedman Memorial Airport 

### 14 

### CurrentService Levels RestrictAccess ToThe Entire South Sun Valley - Friedman Memorial Airport Because ofthe operational restrictions at SUN, there are two very real air service deficiencies that are immediately apparent: 

### Very high fares - on average almost 25% higher than at Boise. This is due to the smaller aircraft that must be used, as well as the lack of capacity in the peak months ofthe year. 

### Almost no local access to the Southern United States. The data regarding connect destinations for the year-round service offered by Delta Air Lines, via SkyWest over Salt Lake City is very compelling: 

# ••**".,~** <**T~tal** 60520 '**~ ~**  '**~ ~**  " 1 

### JFK 5,195 7.1 2 LAX 4,295 5.9 3 

### SFO 3,073 4.2 4 

### SNA 2,567 3.5 5 

### DEN 2,465 3.4 6 

### BOS 2,149 2.9 7 

### EWR 2,036 2.8 8 

### SEA 2,036 2.8 9 

### OAK 1,848 2.5 10 

### ORD 1,816 2.5 

### In the top ten markets, not one is in the US South. This is simply due to the fact that the Delta Air Lines hub at SLC offers almost no nonstop service whatsoever to points in the South. Even connectivity to that carrier's hub at Atlanta is low- it is #17 among connecting destinations.6 

### The finding is that access to the SUN region is effectively non-existent from the US South. This is not inconsequential, as the ski resort industry is highly dependent upon air access to remain competitive.

6 Source: US DOT data for full year 2011, analyzed by Aviation DataMinerTM
Small CommunityAirService Development Program OST- 2012-0069Consortium Grant:Application of Boise Airport& Friedman Memorial Airport 

### 15
As a resort destination, this puts it at a severe disadvantage to other resorts such as (for examples only) Eagle-Vail (EGE), Aspen (ASE) and Montrose (MTJ). Note that, unlike the examples above, the geographic location of SUN makes air access far more critical, as SUN does not have relatively easy road access to a major population center. We can use Eagle-Vail (EGE) as an example ofthe disadvantage that Sun Valley experiences as a result of lack of access to the South from either SUN or BOI. Below is the 

### lQ (peak quarter) traffic distribution for EagleVail (EGE) the major air gateway to resorts in both Vail and Aspen:

. . 

### Top2D!

### 1~~ 

# ·-·souihr**-[~iii""]** r--·--... 5
__;........_"+----rrw-·------j-·

..-----"-l**~-"-_.~So._'"'~:dh_r_·-·n_** 

## .....**~~] ~~~-~-b----~:+-·:~---·-1.**  . 10,936 

### 9 

### All 9,530 

### 10 11 

### 1PA 3,738 13 MD 3,412 

### 14 JAD 3,163 15 A-l 

### 2,857 16 2,738 

### 17 RilJ 2,257 

### 19 

### AlE 2,131 

### 20 A3[ 2,099**"---·-·--"----~--** Half of the top twenty O&D destinations are in the Southern US (bold red) and comprise over one third oftotal air travelers. While the traffic at Friedman Memorial is constricted for the foreseeable future due to operational limitations, BOI has no such restrictions. The service this grant will make possible will allow Sun Valley to capture their share of this ski market, which is important to the local economy.

Small CommunityAir Service Development Program OST- 2012-0069Consortium GrantApplication of BoiseAirport&. Friedman MemorialAirport 

### 16
Boise AirportConnectivity BOI suffers the same basic air service deficiency as does SUN
- the lack of access to a key Southern US-centric gateway simply chokes off traffic demand from that region. This is a very real problem, in that access to high-tech points such as Austin, Raleigh-Durham, Greensboro, San Antonio, not to mention key commercial centers such as Charleston, Savannah, and Jacksonville puts the Boise region at a disadvantage in attracting new business investment. Looking at the Delta connectivity for BOI finds a picture very similar to that at SUN:
SLC .· 

# f _· i 3 I 

### 1----

-

# ~**~-- ~-­**  I 1--**·--~** .. 7 8 9 !

..... 10 1.
...... . 28,8;748

13,605 13,311 12,691 12,192 7,540

- ·-----···---·-·-· -···- 7,405 5,884
·-·---·-·· .. 5,345 Tag this onto the lack of Southern access to SUN, and a serious case can be made that this application falls squarely within the intent of Congress in implementing the Small Community Air Service Development program.

Small CommunityAirService Development Program OST- 2012-0069Consortium GrantApplication of Boise Airport&. Friedman Memorial Airport 

### 17 

### CurrentAccess- Capacity Choke-Points Currently, the air service between the US South and the BOI/SUN region is effectively choked due to high load factors. The two main gateways for connecting access to the Southern US
- United/Denver and United/Chicago experience load factors in excess of80%: 

# viation DataMiner

Data is for the full year 2010, and illustrates that the region has a deficiency in service access to commercial points in the Southern United States. To be clear, the forecasts indicate that new service via another airline gateway will also experience high load factors. This is another indication ofthe strong potential for success ofthe grant-induced service.

Small CommunityAir Service Development Program OST- 2012-0069Consortium GrantApplication of BoiseAirport& Friedman Memorial Airport 

### 18 

### The Solution -AccessTo A Southern Gateway The Airport and the community believe that the addition of nonstop service to a key gateway hub will materially increase air service connectivity and provide fare discipline to already disproportionately high fares in the region.

Examples oftwo airline gatewaysthatwill open Idahoto key commercial centers inthe Southern United States.

Shown are the American hub at DFW International and the United hub at Houston Intercontinental. These are likely to prime target airlines, but not the only ones that can address this deficiency. Delta/Memphis and Southwest/HOU or Southwest/DAL are also potentials, albeit less obvious ones.

Small CommunityAir Service Development Program OST- 2012-0069Consortium GrantApplication of Boise Airport& Friedman Memorial Airport 

### 19 

## Potential Forecast Based on the current high load factors experienced at BOI, plus the expected additional feed traffic from the SeaPort connecting service, it is expected that the new service will be highly profitable for the target carrier, thereby putting the Department's funding at low risk. While changes in the airline industry can and will affect how the new service will operate, a preliminary forecast of American/American Eagle CRJ-700 service to that carrier's DFW hub is encouraging:
801-DFW Mileage Equipment Service Pattern Annual Segments Completion Factor Annual Seats AnnuaiASM Estimated CASM

Full Year Segment Operating Margin Segment RPMs Se ment Load Factor

Small CommunityAirService Development Program OST- 2012-0069 1,272 CRJ-700

1 RT 715 98% 45,070 57,329,294 0.146 145

$321,404

3.7% 48,841,456

85.2%Consortium GrantApplication of Boise Airport& Friedman Memorial Airport 20 

# IV

.. The Grant Structure The Airport and community are requesting a grant in the amount of $1 million, with a match in funding locally of $210,000. The goal is to recruit a carrier to serve BOI from a Southern US gateway, as well as support establishment of connecting commuter service between BOI and SUN to generate additional traffic on the route. This funding will be used for three basic applications to assure success of the program:
• A risk-abatement in the amount of up to $1.025 million for the target carrier.
• Marketing & station establishment offsets for the SeaPort SOlSUN service in the amount of up to $25,000. This would entail costs of moving staff, positioning or equipment, and other expenses directly related to beginning service.
• Up to $150,000 to be applied to a highly-targeted market base to support the new gateway hub service. 

### Requirements Flight Schedule Boise To New Gateway To be eligible for the program funds, an airline will need to commit to the following:
• Operation with jet aircraft with 60 seats or greater. This would be at minimum CRJ-700 airliners. Larger, mainline aircraft can also be supported.
• Operation on at least a 6-day round-trip basis, by a carrier with a hub at the gateway;
• Targets include DFW

## I American IAH/United ATL/Delta HOU/Southwest DAL/Southwest MEM/Delta
• Fare levels within 10% ofcurrent connecting service (average);
• Commitment for one year ofservice;

Small CommunityAirService Development Program OST- 2012-0069Consortium GrantApplication of Boise Airport& Friedman MemorialAirport 

### 21

• Commitment to good faith marketing ofthe new service. Risk Abatement Program The Airport will negotiate a strict agreement with the target carrier outlining the following:
• The agreed-upon cost for the segment operated, including a reasonable, agree-upon profit hurdle.
• The allocation of funds for the risk-abatement will be determined by the contribution the new route makes to the target carrier, including both local O&D to the hub city, as well as credit applied for net-new connecting traffic beyond the hub.
• Because of the seasonality of the market, the accounting for the risk abatement is envisioned to be accomplished preferably on a six-month basis. 

### local SUN-BOI Connector Service The grant will allocate up to $40,000 to offset the costs of SeaPort establishing service in the SUN-BOI market. It is envisioned that this will include a minimum of two daily round-trip flights with 9-seat turboprop airliners. In exchange, SeaPort will agree to operate BOI-SUN service for a minimum of two years, unless the BOI-South flights are terminated earlier. A revenue trigger will be included. This would allow SeaPort to discontinue the service should traffic and revenues not meet agreed-upon goals within a six-month time period. Note that the funding for this section is to facilitate the opening of stations at BOI and SUN. The carrier is not requesting revenue guarantees. 

### Implementation & 

### Marketing Plans The Idaho Air Service Partnership will be the entity administering the community relations and regional marketing for the program. The program is envisioned to be in place for a period of 24 months, beginning on the date ofthe start ofservice to the gateway hub. The marketing plan will be focused on the access provided by the specific carrier selected to provide the BOI-South access:
• The Sun Valley Resort has extensive data regarding key consumer targets in the South/Southeast. This will provide strong marketing

Small CommunityAirService Development Program OST- 2012-0069Consortium GrantApplication of Boise Airport& friedman Memorial Airport 

### 22
assistance for both the new Boise-South service and the connector service.
• Boise marketing will focus on both business and leisure targets in the gateway city and in the region accessed by the target carrier's connecting route system.
• The program will set pre-determined revenue targets for the new BOI-South service, based on reviews every six months. Specific, agreed-upon revenue targets - including local and connecting traffic to and over the gateway hub - will be set, and it is envisioned that the determination of the risk-performance will be accomplished after each six months ofservice. 

### Distribution of Funding The majority of the funds will be allocated to the risk-guarantee. Media and promotional costs in the BOI region allow wide coverage for a relatively low amount offunding.



### Post-Program Support As the high-tech industry continues to expand in Idaho, the communities of interest with similar regions in the South will expand. As a result, it is fully expected that the service will be immediately successful, based on the traffic forecast and the fact that existing service that accesses the US South is at 80% load factors and above. The community intends to work with key employers in both Boise and Sun Valley to assure that the new service will be permanent.

Small CommunityAir Service Development Program OST- 2012-0069Consortium GrantApplication of BoiseAirport& Friedman MemorialAirport 

### 23

Small CommunityAirService Development Program OST- 2012-0069

### SMALL COMMUNITYAIRSERVICEDEVELOPMENTPROGRAM DOCKETOST-2012-0069 SUMMARYINFORMATION APPENDIXC Page 1

All applicants must submitthis information with theirproposal, alongwith a completed form SF424 on http:// 

### www.grants.gov.
A. APPLICANT INFORMATION: (CHECKALLTHAT APPLY) 

### 0 Not a Consortium 

### 0 InterstateConsortium XD 

### IntrastateConsortium 

## 0 Community now receives EAS subsidy 

## Cd Community (orConsortium member) previously received a Small Community Grant

If

### previous recipient: Date ofGrant: Expiration date ofgrant:
___ _ Federal Funds Requested: Carrier(s) Service Obtained: Destination(s) Served: 

### B. PUBLICIPRIVATE PARTNERSHIPS: (LISTORGANIZATION NAMES) 

### Public Private 1.

### _Boise/Friedman MemorialAirports
__ 2._StateofIdahoDeptofCommerce
__ l._FiySunValleyAlliance.
_________ _ 2._SunValley Resort.
____________ _ 3
..__________________________ __ 

### 3._SunValleyMarketingAlliance.
___ _ 

### 4.
____________________________ ___ 4._HaileyChamberofCommerce.
___ _ 5.
_________________________ _ 

### 5._BoiseChamberofCommerce.
______ _ 6._BoiseValley EconomicPartnership
__ _ 

### C. PROJECTPROPOSAL: (CHECKALL THAT APPLY) XD Marketing 0 0 Upgrade Aircraft 0 X New Route [(]Travel Bank 0 0 ServiceRestoration 0 Subsidy [[]Surface Transportation 0 X Regional Service X Revenue Guarantee 0 XLaunchNew Carrier X StartUp Cost Offset 0 First Service 0Study 0 X Secure Additional Carrier 0 Other (explain below)D 

### D. EXISTING LANDING AIDS AT LOCALAIRPORT: APPENDIXC Page 2



### 0 Full ILS 

### 0 Outer/MiddleMarker 

### 0 PublishedInstrumentApproach 

### 0 Localizer 

### 0 Other (specify) 

## E. PROJECTCOSTS: DONOT ENTERTEXTIN SHADED AREA LINE DESCRIPTION SUB TOTAL 1 Federal amountrequested 2 State cash financial contribution Localcash financial contribution 3a Airportcash funds 3b Non-airportcash funds 3 Total local cash funds (3a 

### +3b) 4 TOTAL CASHFUNDING (1+2+3) In-Kindcontribution Sa AirportIn-Kind contribution** Sb OtherIn-Kind contribution** S TOTAL IN-KIND CONTRIBUTION (5a 

### + 5b) 6 TOTAL PROJECT COST (4+8) 

### F. IN-KIND CONTRIBUTIONS** TOTAL AMOUNT

Forfunds in lines Sa (Airport In-Kind contribution) and 7b (OtherIn-Kind contribution), please describe the source(s) offund(s) for each. The Sun Valley Resort, Visit Sun Valley, Hailey ChamberofCommerce,the Boise ChamberofCommerce and Boise ChamberofCommercehave all committed to funding marketing and outreachto_promote the new service. Activities include: on line and printadvertising, special promotions, targeted email campaigns, social media, packaging, and trade show attendance.APPENDIXC Page 3 

### G. ISTHIS APPLICATION SUBJECTTOREVIEWBY STATEUNDEREXECUTIVE ORDER 12372 PROCESS? NO 0 a. This application was made available to the State underthe Executive Order 12372 Process for review on (date).
______ _ 0 b. Program is subjectto E.O. 12372, buthas not been selectedby the State for review. 0 c. Program is not coveredbyE.O. 12372. 

### H. IS THEAPPLICANTDELINQUENTONANY FEDERALDEBT? (IF "YES",PROVIDEEXPLANATION) XO No 

### D Yes (explain)Mike Crapo United StatesSenator 239 Dirksen SenateOffice Bldg. Washington, D.C. 20510
JamesE.Risch UniteStatesSenator 483 Russell Senate OfficeBldg. Washington, D.C. 20510

Ms. Aloha Ley it

. . •. 1f

# <JjjLEG~~O~ June 4, 2012

Associate Director, Small Community Program U.S. Department ofTransportation 1200 New Jersey Avenue SE Washington DC 20590 Dear Ms. Ley: Mike Simpson MemberofCongress 2312 RayburnHouse OfficeBldg. Washington, D.C. 20515

We write in support forthejoint grant application submitted by the Boise Airport and the Friedman Memorial Airport (Sun Valley) to the US Department ofTransportation forfunding under its Small Community Air Service Development Program (SCASD). It is our understanding that these airports and communities have been disproportionately affected by recent changes in the aviation industry and the present economic downturn, resulting in a near20% decrease in airline seat capacity in these markets and an equally dramatic increase in the average airfare. Thisjoint proposal seeksto take aggressive action to reverse the current trend in a way that is sustainable by improving hub connectivity and linking both communities. Approval ofthis proposal will provide the funds to cover station startup costs forthe service connecting the two communities, provide a financial incentive to a carrier that improves access to the national transportation system by adding a new hub, and leverage the communities' investment in marketing the newservice. This effort will fill a demonstrated need for greater seat capacity, improved connectivity and increased travel options. We urge the Department ofTransportation to give this application all due consideration. Sincerely,

# ~ Mike Crapo United States Senator

# d&~ James E. Risch United States Senator

Mike Simpson Member of Congress

# Boise Metro Chamber ofCommerce

Ms. Aloha Ley Associate Director, Small Community Program 1200 NewJersey Avenue SE Washington, DC 20590
Dear Ms. Ley, 

### Boise Valley Economic Partnership (BVEP) Boise Young Professionals Leadership Boise
June 7, 2012

On behalf of more than 100 travel industry related businesses in Idaho, please accept this letterofsupportfor thejoint Boise Airport 

### I Friedman Memorial Airport (Sun Valley) proposal before the US Department of Transportation for a grant underthe Small Community Air Service Development Program. Boise is the largest, most geographically isolated urban area in the United States and air service is critical to the vitality ofour local economy. The Boise Metro Chamber ofCommerce's Travel IndustryAdvisory Board recognizes that expanded air service is not only crucial to existing businesses, but to also generate and attract new businesses and investment in the region. Boise has lost service to Denver, Los Angeles, Reno, Salt Lake, and Seattle. Decreased airline seat capacity in these markets has added to the challenges for local businesses and residents ofthe area to connect to the national transportation system. Fares have also skyrocketed, thus increasing the cost ofdoing business in an already difficult economic environment. The Chamber's Travel Industry Advisory Board is made up of Idaho companies representing airlines, car rental firms, hotels, travel technology firms, ski areas, wineries, travel agencies, corporate travel departments, parks, attractions, sports venues, convention centers, meeting planners, and related travel industry enterprises. A list ofsignatories is attached. Should the grant request be successful and we are able to lure additional service, the Boise Chamber's Travel Industry Advisory Board stands ready to make an in-kind commitment of$1 ,000 over two years. Thank you for your consideration. Sincerely,
John Cunningham Chair, Boise Metro Chamber ofCommerce Travel Industry Advisory Board

250 South 5th Street, Suite 300 

## * P.O. Box 2368 

## * Boise, Idaho 83701 208.472.5200 

## * FAX 208.472.5201 

## * www.boisechamber.orgMs. Aloha Ley 

# Boise Metro Chamber ofCommerce Boise Valley Economic Partnership (BVEP) Boise Young Professionals Leadership Boise
June 7, 2012

Associate Director, Small Community Program 1200 New JerseyAvenue SE Washington, DC 20590
Dear Ms. Ley, On behalfofthe Boise Metro Chamber of Commerce, please acceptthis letter ofsupportforthejoint Boise Airport 

### I Friedman Memorial Airport (Sun Valley) proposal before the US Department ofTransportation for a grant underthe Small Community Air Service Development Program. The nearly 2,000 members ofour organization that employ more than 85,000 people recognize that air service is integral to our region's economy. Boise is the largest, most geographically isolated urban area in the United States. As such, good airservice is critical to the vitality ofour local economy. Expanded air service is crucial to not only existing businesses, butto also generate and attract new businesses and investment in the region. Boise has lost service to Denver, Los Angeles, Reno, Salt Lake, and Seattle. These connections are vital to our community and we strongly support all efforts to recruit service that provides improved access to airline hubs and connectivity between these two Idaho communities. Decreased airline seat capacity in these markets has added to the challenges for local businesses and residents ofthe area to connect to the national transportation system. Fares have also skyrocketed, thus increasing the cost ofdoing business in an already difficult economic environment. Our citizens are dependent on air service that is reasonable and competitive in our ever changing market. By awarding this grant, you would be enabling the entire region of Southwestern Idaho to expand business relationships and improve opportunities for our communities. Should the grant request be successful and we are able to lure additional service, the Boise Chamber stands ready to make a cash commitment of$10,000 and an in-kind commitment of $10,000 overtwo years. We are proud ofour continued partnership with the Boise Airport and lookforward to working togetherto grow the region. Thank you for your consideration. Sincerely,

Bill Connors President & CEO

250 South 5th Street, Suite 300 

## * P.O. Box 2368 

## * Boise, Idaho 83701 208.472.5200 

## * FAX 208.472.5201 

## * www.boisechamber.org

# BOISE VALLEY economic partnership June 2, 2012 Ms. AlohaLey Associate Director, Small Community Program 1200NewJersey Avenue SE Washington DC 20590
DearMs. Ley, On behalfofthe Boise Valley EconomicPartnership (BVEP), please acceptthis letterofsupport for thejointBoiseAirport 

### IFriedman Memorial Airport (Sun Valley)proposal beforethe US Department ofTransportation for a grantunderthe Small Community Air ServiceDevelopment Program. Affordable and convenient air service is integral to ourregion's economy, business development, and business recruitment. BVEP supportsthe BoiseAirport and Friedman Memorial Airport effortsto expand and improve air serviceto the region. Betterair service is a toppriority for us in recruiting newbusinessestothe region. We are committed tomaking any new service a success. Dueto the large geographic area served by these communities combined with the fact that Boise is the largest, most geographically isolated metropolitan area in the country, good access to air service is criticalto oureconomy. Quality air service is imperative to ourability to attractand retain both businesses andpeople. By awarding this grant, DOTwould enablethese airportsto pursue servicethat will be sustainable and would provide a long term benefitto areabusinesses and residents. The Boise Valley Economic Partnership board would certainly consider and support some matching funds toward this much needed effort. We are proud ofourcontinued partnership with the Boise Airport and look forward to working togetherto growthe region. Thankyou for your consideration. Sincerely,

Clark Krause Executive Director Boise Valley Economic Partnership
Boise ValleyEconomic Partnership 250 S. 5111 Street, Ste 300, Boise, ID 83702 

### www.bvep.org

### June 6, 2012 Ms. AlohaLey Associate Director, Small CommunityProgram 1200NewJersey Avenue SE WashingtonDC 20590
DearMs. Ley, 

# I

DEPARTMENT OF COMMERCE 

### C.L. "BUTCH" OTTER, GOVERNOR JEFFERY SAYER, DIRECTOR



### Onbehalfofthe Idaho Department ofCommerce, DivisionofTourism Development,please acceptthis letter ofsupportfor thejointBoiseAirport 

### IFriedmanMemorial Airport (SunValley) proposal before the US Department ofTransportation for a grant underthe Small Community Air Service Development Program. Quality air service is anintegral part ofour state's economic vitality, andtourism's sustainability and growth. Sufficientcapacity and affordable air service is critical to the tourismindustry. Inthe pastyear airline seatcapacityhas decreased inthese marketsbynearly 20% while pricesincreased. SunValley and Boise are excellentconvention andmeeting locations as well as desirable leisure destinations, howeverthe lack ofavailable seats cannegatethe otherwise positive decisionto visitor have a meeting. This results in significant lost opportunities and economic impactto the entire state. As a gatewayto the some ofthe State'smostpopulartourism destinations, these airports serve as importantinboundtransportationcenters for ourvisitors and conventiontravelers. We strongly support their efforts to recruit serviceto connectinghubs and linkingthetwo communities whichwill increase capacity and improve accessibility. I amconfidentthe award ofthis grant would yield positive, measurable results andnew opportunities for these communities andthe State ofIdaho. Sincerely,

# 1~/ldlaJ Karen Ballard Administrator, Division ofTourism Development

700 West State Street o P.O Box 83720 • Boise, Idaho 83720 • Tel: 208-334-2470 • Fax: 208-334-2631 • Web: commerce.idaho.gov Equal OpportunityEmployerJune 5, 2012 Ms. Aloha Ley, Associate Director USDOT Small Community Program 1200 NewJersey Avenue SE Wasbington DC 20590 Re: Boise Airport SCASDP FY'13 Grant Application Dear Ms. Ley: The Friedman Memorial Airport Authority expresses its robust support and partnership with Boise Airport (801) for the submittal of a USDOT Small Communities Air Service Development Grant for FY'13. This grant is pursued with the goal ofsecuring new, daily non-stop service from areas such as US Mid-South and Deep-South market area and for the establishment of newcommuter service between Boise and Sun Valley (SUN). Numerous organizations and businesses in the Sun Valley area as well as in Boise are working diligently to develop, market and retain leisure and business travel to our region. It is clear that economic recovery and development hinges on increased air service access. The Friedman Memorial Airport Authority is fully engaged in collaboration with Boise Airport - as our two facilities are the primary access portals to the Central Idaho Reg1on -to cont1nue development of access options for our citizens, visitors 

### and bus1ness community. This collaboration is 

### an obvious "winwin" for all, mcluding a1r carriers. Marketing Support For New DFW- BOI Non-Stop Service and 801-SUN Commuter Service In support of new service to BOI from locations such as DFW, Friedman Memorial Airport Authonty would:
• Commit $3000.00 to airport specific advertising efforts for this service.
• Commit $10,000.00 in support of General Air Service studies for the purpose of acquiring information in support of DFW-801 non-stop service, as well as BOI-SUN commuter serv1ce. Waive allla11ding fees ror the first year, for scheduled arr carrier service between 801 and SUN. For example, ifthe commuter aircraft were a Pilatus PC-12, this would represent a discount of$9,917.05, based on two daily arrivals for one year. If the aircraft were a Cessna Caravan 2088 the discount, based on the same frequency, would be $7,592.00. In either case. the discount would be tendered with the understanding that 50% ofthe savings to the air carrier would be re-invested bythe air carrier, in marketing for this speciftc air service.Ms. Aloha Ley June 4, 2012 Page 2
Recent passenger surveys at SUN demonstrate that in excess of 45% of local resident travelers using SUN do so for business travel. A recently completed Passenger Demand analysis reveals that 62% ofSun Valley local area residents ny outof another regional airport than SUN. primarily BOI. There is an unquestionable opportunity

### to support daily business travel between Boise and the Sun Valley area as well as the obvious connecting access optionfor travelers continuing down line from BOI. Significant national and global companies such as Power Engineers, Smith Sport Optics, Scott USA, ScottEVest, Omni Health Media, Marketron and Rocky Mountain Hardware all utilize the Sun Valley area for their respective headquarters. Because these companies do conduct extensive business nationally and globally, air service is critical for them. Newair service to regions such as the Dallas-Fort Worth area, coupled with connecting service between Sun Valley and Boise, is key to the long term economic stability and growthof these companies. We respectfully ask for your consideration ofthis SCASDP grant request from Boise Airport; it is key to maintaining a stable and growing economy for our respective communities as well as for the entire state of Idaho. Weare enthusiastic and stand ready to partner in making these new air service programs 

### a resounding success.

# ~~.~>'.·**·~"** . .., ,.,.

# fi~~**T~ ~~~h.**  Chairman Friedman Memorial Airport Authority

. :..**~,** .. . :.·; ·

..,IT’S ABOUT TIME 7505 NE Airport Way, Portland, Oregon 97218Telephone: 888
-573-2767 Fax: 971-732-7678Web: SeaPortAirlines.com 

### June 8, 2012 Ms. Aloha Ley Associate Director, Small Community Program US Department of Transportation 1200 New Jersey Avenue SE Washington DC 20590 Dear Ms. Ley, On behalf of Sea Port Airlines, please accept this letter as our statement of interest in operating a connecter service between the Boise Airport and Friedman Memorial Airport in Hailey/Sun Valley. The Airports’ joint proposal before the US Department of Transportation for a grant under the Small Community Air Service Development Program would remove a significant impediment to Seaport’s ability to begin this new route by providing some assistance with station start-up costs and assistance with ground handling in Sun Valley. We would welcome marketing support from both of communities as well

. We are confident in the economic viability of this route and are not requesting risk abatement funds. The award of this grant would yield positive results and new opportunities for these communities and significantly improve air service within the State of Idaho. Sincerely, Timothy Sieber Vice President of Strategy and Corporate Development Sea Port Airlines Respectfully,

Timothy F. Sieber VP
– Strategy & Corporate Development