Proposal of Bismarck Airport • July 2013

APPLICATION UNDER 

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT-OST-2013-0120

SUMMARY INFORMATION

All applicants must submit this Summary Information schedule, as the application coversheet, a 

completed standard form SF424 and the full application proposal on www.grants.gov. 

For your preparation convenience, this Summary Information schedule is located at 

http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/SCASDP

A. PROVIDE THE LEGAL SPONSOR AND ITS DUN AND BRADSTREET (D&B) DATA UNIVERSAL NUMBERING SYSTEM (DUNS)

NUMBER, INCLUDING +4, EMPLOYEE IDENTIFICATION NUMBER (EIN) OR TAX ID.

Legal Sponsor Name: Bismarck Municipal Airport

DUNS Number: 080245640

EIN/Tax ID: 6002036

B. LIST THE NAME OF THE COMMUNITY OR CONSORTIUM OF COMMUNITIES APPLYING:

1. BISMARCK, NORTH DAKOTA

2.____________________________________________________

3.____________________________________________________

4.____________________________________________________

C. PROVIDE THE FULL AIRPORT NAME AND 3-LETTER IATA AIRPORT CODE FOR THE APPLICANT(S) AIRPORT(S) (ONLY 

PROVIDE CODES FOR THE AIRPORT(S) THAT ARE ACTUALLY SEEKING SERVICE).

1. Bismarck Airport BIS 2.

3. 4.
Proposal of Bismarck Airport • July 2013

D. LIST THE 2-DIGIT CONGRESSIONAL DISTRICT CODE APPLICABLE TO THE SPONSORING ORGANIZATION, AND IF A 

CONSORTIUM, TO EACH PARTICIPATING COMMUNITY.

1. ND-01 2.

3. 4.

E. APPLICANT INFORMATION: (CHECK ALL THAT APPLY)

Not a Consortium Interstate Consortium Intrastate Consortium

Community now receives subsidized Essential Air Service

Community (or Consortium member) previously received a Small Community Air Service 

Development Program Grant

If previous recipient: Year of grant(s): 2002

F. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION NAMES) OTHERS LISTED ON PAGE 19

PUBLIC PRIVATE

1. The Cities of Bismarck and Mandan 1. MDU Resources

2. Bismarck Mandan Chamber of Commerce 2. Basin Electric Power Cooperative

3. Bismarck Mandan Development Association 3. BOBCAT/Ingersoll-Rand

4. Bismarck Mandan CVB 4. North Dakota Petroleum Council

5. 5. Sanford Health Systems

G. PROJECT PROPOSAL: (CHECK ALL THAT APPLY)

Marketing Upgrade Aircraft New Route

Travel Bank Service Restoration Subsidy

Surface Transportation Regional Service Revenue Guarantee

Launch New Carrier Start-up Cost Offset First Service

Study Secure Additional Service Other (explain below)

H. EXISTING LANDING AIDS AT LOCAL AIRPORT:

Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

x
Proposal of Bismarck Airport • July 2013

I. PROJECT COST: DO NOT ENTER TEXT IN SHADED AREA

LINE DESCRIPTION SUB TOTAL TOTAL AMOUNT

1 Federal amount requested $500,000

2 State cash financial contribution $0

Local cash financial contribution

3a Airport cash funds $100,000

3b Non-airport cash funds $500,000

3 Total local cash funds (3a + 3b) $600,000

4 TOTAL CASH FUNDING (1+2+3)

In-Kind contribution

5a Airport In-Kind contribution** $400,000 estimated

5b Other In-Kind contribution** $0

5 TOTAL IN-KIND CONTRIBUTION 

(5a + 5b)

$400,000 estimated

6 TOTAL PROJECT COST (4+5) $1,500,000

J. IN-KIND CONTRIBUTIONS**

For funds in lines 5a (Airport In-Kind contribution) and 5b (Other In-Kind contribution), please 

describe the source(s) of fund(s) and the value ($) of each.

5a Airport in-kind contribution estimated at $400,000 in airport fee and rentals, based on a carrier 

service pattern of 2 x DFW (CRJ7) and 1 x ORD (ERJ145 or CRJ). This contribution varies if a 

measurably different service pattern or equipment gauge is offered. 
Proposal of Bismarck Airport • July 2013

K. IS THIS APPLICATION SUBJECT TO REVIEW BY STATE UNDER EXECUTIVE ORDER 12372 PROCESS?

a. This application was made available to the state under the Executive Order 12372 

Process for review on (date) _____________.

b. Program is subject to E.O. 12372, but has not been selected by the state for review.

c. Program is not covered by E.O. 12372.

L. IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT? (IF “YES”, PROVIDE EXPLANATION)

No Yes (explain) 

_____________________________________________________________________________________________

_______________________________________________________________
Proposal of Bismarck Airport • July 2013 1

TABLE OF CONTENTS AND LEGAL SPONSOR

Legal Sponsor 1

Introduction 2

Bismarck’s Location, Population and Economy 3 - 5

Current Air Service and Traffic 6 - 9

Bismarck’s Air Service Deficiencies and Needs 10 - 13

Air Service Development Efforts and Air Service Marketing 14

Bismarck’s Strategic Plan for new Air Service 15 - 18

Bismarck’s Public Private Partnership and Previous Grant Award 19

Summary 20

The legal sponsor of this Grant Application is the Bismarck Airport. Mr. Greg B. Haug, Airport 

Manager, has successfully administered numerous Federal grants for the Airport.

Greg B. Haug

Airport Manager,

Bismarck Airport,

2200 Terminal Boulevard,

Bismarck, ND 58502

Phone: 701 355 1808

Fax: 701 221 6886

Email: ghaug@nd.gov

This document is 24 pages in length, consisting of four pages of Summary Information (cover)

and 20 pages of application information.

Section Page Number
Proposal of Bismarck Airport • July 2013 2

INTRODUCTION

Bismarck is the capital of North Dakota, currently the strongest economy in the nation. The past 

few years of unprecedented economic growth (led by energy mining) have challenged every 

part of North Dakota’s transportation infrastructure, including air service. Energy mining activity is 

focused in western North Dakota and, by its nature, demands good air transportation options.

Bismarck is centrally located in the state and has the only airport in the energy mining region 

with in-place infrastructure to accommodate air service growth. The cities of Bismarck and 

Mandan, working closely with numerous public and private community partners, have worked 

hard to improve local air service to meet the ever-growing transportation needs of the region. 

While we have made progress, we remain short of a primary goal, the successful recruitment of 

a third network carrier to provide critically needed new service options. We need a third network 

carrier because, even as our traffic has grown dramatically in recent years, the air service 

capacity of our incumbent network carriers (Delta & United) has actually declined. Since 2008,

our network enplanements are up 20.5% while our network capacity is DOWN 1.8%. Furthermore, 

since 2008, our network domestic average 

fare is up 9% from already high levels to 

nearly $300 one way. We also need a third 

network carrier because our hub options are currently limited to Denver and Minneapolis.

We have worked closely with American for two years regarding service at Bismarck. The carrier is 

just completing bankruptcy reorganization and has embarked on the US Airways merger. We 

believe that the reorganized and merged carrier will be well positioned in 2014 to expand 

service from its major hubs, including Dallas (DFW) and Chicago (ORD). We believe that 

Bismarck can be a profitable new market for American. The obvious challenge for a new 

network carrier at Bismarck, where Delta and United have dominated for decades, is 

establishing brand identity and preference. The Bismarck parties, via this Grant application, wish 

to develop a minimum revenue guarantee (MRG) program to support initial American service at 

Bismarck while carrier brand identity gets established. Our Grant proposal calls for $500,000 in 

DOT funding, matched by $500,000 in local, non-airport funding, to create an MRG and 

marketing fund to support the initial phase of American service at Bismarck. This will introduce 

new network carrier competition at Bismarck and, by extension, in all of western North Dakota 

and have a mitigating influence on regional airfares, which are among the highest in the nation. 

“Since 2008, our network enplanements are up 

20.5% while our network capacity is DOWN 1.8%
Proposal of Bismarck Airport • July 2013 3

BISMARCK’S LOCATION, POPULATION AND ECONOMY

Location – Bismarck is located in west central North Dakota at the junction of I-94 and State 

Highway 83, the primary east/west and north/south highways in the state. About 80% of the 

population of the entire state lives within three hours drive of the Bismarck airport. Energy mining 

activity in the Bakken Formation is in the area north of I-94 and west of Highway 83. Most of the 

mining area is within a three hour drive of the Bismarck Airport.

Isolation – At the risk of feeding stereotypes, Bismarck and its catchment area are a long way 

from anywhere. The closest major population centers, and major airline hubs, are Minneapolis 

(430 road miles) and Denver (700 road miles). This isolation from the more populated areas of the 

nation makes the quality of Bismarck air transportation a critical consideration. Bismarck, and 

North Dakota’s, strong economic growth is actually being hampered by its isolation and limited

or poor choices in air transportation, for both business and leisure travel. Recruitment of a skilled 

workforce, across all economic sectors and skill sets, is made even harder by arduous and high 

cost travel options. Business air travel options are limited and airfare costs are high.
Proposal of Bismarck Airport • July 2013 4

Government Employees

State of North Dakota 4,309

ND Federal Offices 1,198

City of Bismarck 790

Health Care

Sanford Healthcare 2500

St. Alexius Medical Center 2,129

Missouri Slope Lutheran Care Center 430

Mid-Dakota Clinic PrimeCare 410

Coventry Health Care 403

Education

United Tribes Technical College 440

Bismarck State College 439

University of Mary 520

Private Sector

BOBCAT/Ingersoll-Rand 1,130

MDU Resources Group 748

Aetna 570

Basin Electric Power Cooperative 418

Sykes Enterprises 406

Burlington Northern Railroad 400

CrossCountry Courier 390

Tesoro Petroleum 380

Unisys Corporation 380

Housing Industry Training HIT 320

National Information Systems NISC 315

Pride, Inc 300

Population – The strongest-in-the-nation economy of the Bismarck catchment area has meant 

strong population growth, despite the isolation and travel option limitations. The Bismarck MSA 

population has shown 18% growth since 2002. The nearby micropolitan areas of Dickinson, Minot 

and Williston have shown strong population growth, but only since 2008, suggesting their growth 

is simply due to energy mining. The combined group shown has seen 14.4% growth since 2008.

Economy – The Bismarck economy is the envy of the nation. 

Unemployment is at 3% and there are more jobs than workers 

in most occupational fields.

While the rural areas around Bismarck are focused on energy 

mining and or agriculture, the Bismarck/Mandan metro area 

economy is very diverse. Key sectors, in addition to energy 

mining and agriculture, include the state and federal 

government, health care institutions (that support the 

residents of the entire state), education (four colleges or 

technical schools) and a significant private sector with a list 

of major employers that includes Aetna (Insurance), BOBCAT 

(manufacturing), MDU (Energy mining), the Burlington 

Northern Railroad, and National Information Systems (business 

billing systems).

65,361 64,928 64,982 64,298 63,817 63,566 63,504 64,412

69,540 72,067 75,000

23,012 22,917 22,886 22,888 22,835 23,189 23,315 23,674 24,982 25,981 27,000

96,084 96,846 97,734 99,371 101,186 103,023 104,629 106,286 108,779 110,879 113,000

19,416 19,256 19,144 19,136 19,272 19,565 19,797 20,451 22,398 24,374 26,600

0

20,000

40,000

60,000

80,000

100,000

120,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Population

Minot MSA Dickinson MSA Bismarck MSA Williston MSA
Proposal of Bismarck Airport • July 2013 5

Energy Mining – Bismarck is the largest city in the Bakken region. It’s economic and social 

services infrastructure supports mining operations for hundreds of miles to the west and north. The 

growth in North Dakota oil and gas production in recent years is truly stunning. North Dakota is 

now the second largest oil producing state in the Union, behind only Texas. In the six-year period 

2007 to 2012, oil production is up 443%, gas production up 265% and producing well count is up 

70%. North Dakota now has more active drilling rigs than any state except Texas. 

The tremendous growth in energy mining in the Bismarck region requires tremendous growth in 

all sectors of the economy; social and health services, police and fire, schools, housing, 

residential and consumer services and in the availability of common everyday retail and 

commercial businesses.

Bismarck, on a regional level, and North Dakota, on a statewide level, are both committed to a 

rapid but carefully planned expansion of the social and economic infrastructures needed to 

meet the needs of a rapidly growing population and economy. North Dakota energy 

production, including not just oil and gas but also coal and wind power, is making a huge 

contribution to our country’s goal of energy independence. In order for that production to grow 

in an orderly fashion transportation infrastructure must grow with it. That is not just pipelines, rail 

lines and highways, but also air service. Air service must grow with the population and level of 

economic activity. At this time Bismarck’s network air service capacity is actually down from four 

years ago.

0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

2007 2008 2009 2010 2011 2012

70,767,153 86,690,846 92,444,798 113,341,850

155,911,232

258,601,452

44,701,934 

62,361,889 

79,254,301 

112,531,064 

152,285,097 

243,172,049 

North Dakota Gas Production (Cubic Feet) North Dakota Oil Production (Barrels)
Proposal of Bismarck Airport • July 2013 6

Weekly

Carrier Route Frequency Seats

Delta MSP 94 5,740

United DEN 52 2,600

146 8,340

AZA 4 664

LAS 4 664

Frontier DEN 12 1,656

20 2,984

166 11,324

BISMARCK AIR SERVICE SUMMARY: AUGUST 2013

Allegiant

LTD Group

Market Total

Network Group

CURRENT AIR SERVICE AND TRAFFIC

Current Bismarck Air Service – Bismarck currently has service from two network carriers and two 

less-than-daily (LTD) carriers. Delta provides service to its Minneapolis hub while United offers 

service to its Denver hub. Allegiant Air offers LTD service to Las Vegas and Phoenix/Mesa while 

Frontier offers five or six day per week service (depending on the season of the year) to Denver.

In August of 2013, Delta’s Minneapolis service will 

consist of a mixture of 50-seat CRJs and 76 seat 

E175s. United’s Denver service will be entirely 50-seat 

aircraft. Allegiant service is provided with 166-seat 

MD80s and Frontier service with 138-seat A319s.

The network group taken as a whole offers 146 

weekly flights in and out with 8,340 seats. The LTD 

group offers 20 weekly segments with 2,984 seats. Carrier frequency and capacity offerings do 

vary seasonally, for example Delta makes modest frequency and gauge adjustments by season 

and Frontier will go from 12 Denver segments per week to 10 in September.

Traffic History – Despite very high fares on all routes save Las Vegas and Phoenix (and Denver 

starting in 2012), Bismarck traffic has grown dramatically in recent years. 2012 traffic was up 20% 

from 2011, which had set an all-time record. Total 2012 traffic is up 34.5% compared to 2008, 
Proposal of Bismarck Airport • July 2013 7

while network traffic is up 22.1% and LTD traffic is up 99% (Allegiant was just beginning 

Phoenix/Mesa service in late 2008 and Frontier did not enter the market until 2012).

Network Carrier Capacity, Traffic and Average Fare – Despite the fastest growing economy in

the nation, Bismarck network capacity is trending downward: -13% since 2004 and -2% since 

2008. Also since 2008 domestic traffic is up 29% despite the average domestic fare climbing from 

$240 to $285 (19%). Bismarck’s $285 network carrier average fare is one of the highest in the 

nation.

0

50,000

100,000

150,000

200,000

250,000

2008 2009 2010 2011 2012

103,314 95,160 93,734 102,135

119,968

44,010

44,763 54,773

55,782

59,866

14,846 

28,302 41,191 

45,536 38,497 

41,492 

Annual Enplanements

Delta/Northwest United Frontier Allegiant

727

671 679 659 649 644 664

606

629

397 414

412 414

378

352 370

396

453

$184 $186

$213

$224

$258

$240

$255

$287 $285

$100

$120

$140

$160

$180

$200

$220

$240

$260

$280

$300

0

100

200

300

400

500

600

700

800

2004 2005 2006 2007 2008 2009 2010 2011 2012

Average Fare

Seats and Passengers per Day Each Way

Network Seats SDEW Network Traffic PDEW Network Domestic Avg Fare 
Proposal of Bismarck Airport • July 2013 8

Top Domestic Markets – Bismarck’s top twenty domestic market list (excluding Las Vegas and 

Phoenix/Mesa) is headed by Denver and Minneapolis, the two network hubs with nonstop 

service. The Bismarck region’s energy mining links are clearly shown with Dallas and Houston 

ranking as the third and sixth largest markets. Bismarck had Chicago service until June of 2012.

Bismarck’s Top Twenty Domestic Markets (Excluding Allegiant markets LAS and AZA): Year 2012 

Top Domestic Market Average Fares – Average one way fares below $200 are almost 

nonexistent in Bismarck, excluding Allegiant markets. Texas and Chicago airfares are highlighted.

40,910

25,640

12,820

12,500

12,290

11,290

11,210

10,370

9,030

8,130

7,390

7,360

6,190

6,190

5,930

5,840

5,610

5,250

4,880

4,760

56.0

35.1

17.6

17.1

16.8

15.5

15.4

14.2

12.4

11.1

10.1

10.1

8.5

8.5

8.1

8.0

7.7

7.2

6.7

6.5

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000

DEN

MSP

DFW/DAL

DCA/BWI/IAD

ORD/MDW

IAH/HOU

MCO

LAX/SNA/ONT/BUR

SEA

PDX

PHX

ATL

LGA/EWR/JFK

SFO/SJC/OAK

MCI

SAN

SLC

SMF

STL

BOS

Annual Passengers PDEW

$193

$264

$262

$280

$280

$411

$242

$271

$237

$236

$229

$306

$270

$271

$269

$199

$283

$235

$246

$289

$0 $50 $100 $150 $200 $250 $300 $350 $400

DEN

MSP

DFW/DAL

DCA/BWI/IAD

ORD/MDW

IAH/HOU

MCO

LAX/SNA/ONT/BUR

SEA

PDX

PHX

ATL

LGA/EWR/JFK

SFO/SJC/OAK

MCI

SAN

SLC

SMF

STL

BOS
Proposal of Bismarck Airport • July 2013 9

Region States O&D Share Revenue Share Avg Fare

ME, VT, NH, MA, RI, CT

NY, PA, MD, DE, VA, WV, OH

Southeast NC, SC, TN, GA, AL, MS, FL 49,710 11% $14,435,095 13% $290

South Central OK, AR, TX, LA 50,660 11% $16,619,672 15% $328

MI, WI, MN, ND, SD, NE 

KS, IA, MO, IL, IN KY 

Intermountain MT, ID, WY, UT, CO, NM 60,000 14% $13,153,567 12% $219

Far West WA, OR, NV, CA, AZ, AS, HI 163,730 37% $30,191,351 28% $184

Total 50 States 444,350 100% $107,908,484 100% $243

BIS reported DOT domestic traffic and revenue by region for year 2012

BISMARCK DOMESTIC TRAFFIC AND REVENUE BY REGION: 2012

76,450 $20,797,973 $272

43,800 10% $12,710,826

17%

$290

Midwest 19%

Northeast 12%

Bismarck Domestic Traffic by Region – Bismarck domestic traffic is relatively evenly distributed 

nationwide with the exception of the Far West region. The Far West region generates an outsized 

percent of total 

domestic traffic due 

to high volume/low 

fare Allegiant Air 

service to Las Vegas 

and Phoenix/Mesa.

Current Market Share – In 2012 Delta carried 51% of total Bismarck enplanements, United 25%, 

Allegiant 18% and Frontier 6%. Carrier market shares in 2013 are tracking similarly to 2012.

International Traffic – Bismarck international traffic has grown 243% since 2004, despite modest 

levels of nonstop international service available at Denver (United) and Minneapolis (Delta).

Bismarck International Traffic: 2004 - 2012

Alternative Airports – Central and Western North Dakota is a long way from anyplace. Drive 

times and distances to alternative airports are long.

14

18

22

24

26 26

28

31 $472 $472 $461 34 $474

$516

$476 $471

$480

$531

$100

$150

$200

$250

$300

$350

$400

$450

$500

$550

$600

0

5

10

15

20

25

30

35

40

2004 2005 2006 2007 2008 2009 2010 2011 2012

Average Fare

Passengers per Day Each Way

Traffic PDEW Avg Fare

Distance Time 2012 Avg Fare Airline Options Not Found at BIS

Fargo 199 2:35 $228 AA 

Minneapolis 430 6:30 $199 AA, US, WN, SY, NK

Denver 700 12:00 $151 AA, US, WN, NK

BISMARCK ALTERNATIVE AIR SERVICE AIRPORTS
Proposal of Bismarck Airport • July 2013 10

Scheduled Scheduled 

Carrier Segments Share Seats Share

AA 230 6.6% 11,392 5.8%

DL 1,926 55.4% 119,766 60.7%

UA 1,322 38.0% 66,100 33.5%

Network Group 3,478 100% 197,258 100%

G4 210 19.1% 34,860 49.9%

F9 118 10.7% 16,284 23.3%

ZK 770 70.1% 18,700 26.8%

Other Group 1,098 100% 69,844 100.0%

Total 4,576 267,102

Network 3,478 76.0% 197,258 73.9%

Other 1,098 24.0% 69,844 26.1%

NORTH DAKOTA AIR SERVICE BY CARRIER: JUNE 2013 

BISMARCK AIR SERVICE DEFICIENCIES AND NEEDS

Air Service Deficiencies – The Bismarck MSA and the state of North Dakota have experienced 

rapid economic growth in the past few years. State GDP grew 13.7% between 2011 and 2012 

(the highest growth of any state) while the Bismarck MSA saw GDP growth of 25% between 2008 

and 2012. In the state, per-capita income has doubled since 2000 while, in the Bismarck MSA, it is 

up 19% since 2008. North Dakota has the lowest unemployment rate in the country while the 

Bismarck MSA has the lowest MSA unemployment rate in North Dakota.

However network carrier air service in the 

state and in Bismarck is essentially a 

duopoly. With the exception of modest 

American Airlines service at Fargo, 

network service in the entire state is 

provided by either Delta Air Lines or United 

Airlines. Delta and United offered 93.4% of 

total network carrier seats and 94.2% of 

total network flights in the state in June of 

2013. American’s entire participation in the state market is at Fargo. 

Capacity – The duopoly of network carrier service in North Dakota is clearly illustrated at 

Bismarck. While Bismarck and North Dakota, especially central and western North Dakota, have 

seen stunning economic and population growth in the past five years, Bismarck has lost its Delta 

service to Salt Lake City 

and United service to 

Chicago. Furthermore, 

network capacity at 

Bismarck is DOWN 1.8% in 

the period, despite 20.5% 

network traffic growth.

Average Fare – Regarding average domestic fare, for all airports in the lower 48 Bismarck had 

the 61st highest average fare in 2012 at $242.85. If EAS and single carrier airports are excluded 

Bismarck has the 22nd highest domestic fare in the lower 48. If Bismarck’s LTD service from 

Allegiant and Frontier is excluded (most of the airports above Bismarck on the list do not have 
Proposal of Bismarck Airport • July 2013 11

LTD service) Bismarck has a network domestic average fare of $285 and that ranks it 3rd highest 

in the nation behind, ironically, Williston and Minot, North Dakota, both of which are in the 

Bismarck catchment area. 

Airports in red only have one network air carrier or are EAS. Airports marked in blue have lessthan-daily service, such as Allegiant and/or Frontier. This tends to dilute the network average 

fare, as it does at Bismarck. Bismarck ranks 61st overall but 3rd if single carrier and EAS markets are 

excluded and LTD dilutions are considered. Carrier counts are network counts only.

Rank Airport Status Avg Fare Rank Airport Status Avg Fare

1 DVL EAS $336 32 ROW 1 Carrier $257

2 DHN 1 Carrier $325 33 BFL 2 Carrier $256

3 BPT 1 Carrier $315 34 GRB 3 Carrier $256

4 TXK 1 Carrier $294 35 JAC 3 Carrier $256

5 ISN 2 Carrier $292 36 ABY 1 Carrier $254

6 MEI EAS $287 37 MGW EAS $254

7 PIB EAS $286 38 CKB EAS $254

8 MOT 2 Carrier $283 39 MLU 2 Carrier $253

9 CSG 1 Carrier $278 40 BFD EAS $253

10 LAW 1 Carrier $276 41 ACV 1 Carrier $253

11 PQI EAS $276 42 SJT 1 Carrier $253

12 TBN EAS $274 43 HIB EAS $253

13 SPS 1 Carrier $274 44 IPT 1 Carrier $253

14 MQT 2 Carrier $270 45 ART EAS $253

15 TEX 1 Carrier $269 46 FSM 2 Carrier $251

16 MCN EAS $268 47 BRO 1 Carrier $250

17 PLN EAS $267 48 TUP EAS $249

18 CIU EAS $267 49 ESC EAS $248

19 LSE 2 Carrier $266 50 ABI 1 Carrier $248

20 ASE 3 Carrier $264 51 SHV 3 Carrier $248

21 GRK 2 Carrier $263 52 MOB 3 Carrier $247

22 LCH 3 Carrier $261 53 APN EAS $246

23 IMT EAS $261 54 AOO EAS $246

24 INL EAS $260 55 DUJ EAS $246

25 CWA 3 Carrier $260 56 LFT 2 Carrier $245

26 YUM 1 Carrier $259 57 DIK 2 Carrier $245

27 AZO 2 Carrier $258 58 TVC 3 Carrier $245

28 GTR 1 Carrier $258 59 VLD 1 Carrier $245

29 AEX 3 Carrier $258 60 SCE 3 Carrier $244

30 DRT 1 Carrier $258 61 BIS 2 Carrier $243

31 XNA 4 Carrier 258 3 BIS Network $285

LOWER 48 HIGHEST AVERAGE DOMESTIC FARES: 2012
Proposal of Bismarck Airport • July 2013 12

Rank Company HQ

1 EOG Resources Houston

2 Whiting Oil & Gas Denver

3 Continental Resources Enid OK (OKC)

4 Burlington Resources Houston

5 Hess Corporation Houston

6 Marathon Oil Houston

7 Slawson Exploration Denver

8 Brigham Oil & Gas Bismarck

9 Encore Operating Dallas

10 XTO Energy Dallas

11 Murex Petroleum Houston

12 Petro-Hunt LLC Dallas

13 Hunt Oil Dallas

14 SM Engergy Denver

15 Tracker Resource Development Denver

16 Fidelity Exploration & Production Denver

17 Anschutz Exploration Denver

18 Oasis Petroleum North America Houston

19 Newfield Production Houston

20 Kodiak Oil & Gas Denver

MINING COMPANIES ACTIVE IN NORTH DAKOTA

North Dakota Petroleum Council

Air Service Needs – Bismarck’s overall goal is to introduce additional network carrier competition. 

Two new hub routes appear viable for new network carrier service.

Dallas/Ft. Worth Service – The fastest growing segment of travel demand in the Bismarck market 

is the South Central region of the nation, Texas, Oklahoma and Louisiana. These three states are 

home to most of the nation’s energy mining 

companies and where most of the nation’s skilled 

work force in mining occupations lives.

Twelve of the top twenty mining companies active in 

the Bakken region are based in these three states. 

Supporting those companies are hundreds of smaller 

and specialty south central region companies that 

perform hundreds of specialized tasks involved in oil 

and gas mining. As a result of the influx of these 

many companies and their skilled work forces into 

western North Dakota, traffic between Bismarck and 

these three states, both business related and visit 

friends/relatives (go back home) traffic has grown 

dramatically. Traffic has doubled since 2009; the average fare has risen from $275 to $341 (24%).

Traffic and Average Fare 2004 - 2012: Bismarck and Texas, Oklahoma and Louisiana 

30 32

35 33 33 31

36

42

62

$206 $209

$239

$272 $307 $275

$307

$361

$341

$100

$150

$200

$250

$300

$350

$400

0

10

20

30

40

50

60

70

2004 2005 2006 2007 2008 2009 2010 2011 2012

Average Fare

Passengers per Day Each Way

Traffic PDEW Avg Fare 
Proposal of Bismarck Airport • July 2013 13

Market Delta Share 2011 Delta Share 2012 Change

ATL 96.0% 92.3% -3.7%

BDL 95.5% 92.6% 2.9%

BNA 81.5% 90.5% 9.0%

BOS 89.5% 91.9% 2.4%

BUF 58.8% 90.0% 31.2%

CLE 77.6% 90.4% 22.8%

CLT 83.6% 86.9% 3.3%

CMH 92.0% 89.9% -2.1%

DCA 89.5% 96.9% 7.4%

DTW 98.2% 91.9% -6.3%

EWR 83.3% 75.3% -8.0%

IND 90.5% 91.0% 0.5%

LGA 83.5% 79.9% -3.6%

ORD 43.4% 84.0% 40.6%

ORF 83.1% 86.0% 2.9%

PHL 85.5% 94.3% 8.8%

PIT 77.8% 98.3% 20.5%

ROC 84.2% 85.7% 1.5%

STL 90.0% 80.6% -9.4%

SYR 17.1% 88.9% 71.8%

Group 80.2% 89.1% 8.9%

DELTA MARKET SHARE Q3 & Q4 2012

Based on this powerful business and VFR/leisure community of interest, nonstop service from 

Bismarck to Dallas (DFW) would address a glaring service need, not just for Bismarck but for all of 

central and western North Dakota.

Chicago – Until mid-2012 United Airlines offered a single daily Bismarck Chicago regional jet 

flight. In mid-2012 the carrier refocused its Bismarck service on its Omni-directional hub in Denver, 

moving from a 3 x DEN and 1 x ORD service pattern to a 4 x DEN pattern. The loss of the United 

Airlines flight to ORD service left Bismarck without nonstop service to its fifth largest domestic 

market (excluding LAS and AZA). 

Bismarck is now the largest market in 

the twelve-state Midwest/Great 

Lakes region (ND, SD, NE, KS, MN, IA, 

MO, WI, MI, IN, KY, IL) without 

nonstop service to a Chicago airport.

The loss of United Airlines service to 

the powerful ORD hub also leaves 

Bismarck, and all of western North 

Dakota, without any nonstop service 

eastbound except for Delta flights to 

Minneapolis. This results in an almost 

complete dominance of market 

share in eastbound markets by Delta 

Air Lines.

In the last six months of 2011, with 

United nonstop service to ORD, Delta 

had an 80.2% share of traffic to twenty top eastbound Bismarck markets. In the last six months of 

2012, with no nonstop service to ORD, Delta has moved to an 89.1% share of total traffic among 

the group of destinations.

Bismarck clearly needs additional network air service and both Dallas/Ft. Worth and Chicago 

are top destinations. Furthermore, service to one or both of these powerful hub airports would 

generate significant and beneficial online connections.
Proposal of Bismarck Airport • July 2013 14

AIR SERVICE MARKETING AND AIR SREVICE DEVELOPMENT EFFORTS

SERVICE MARKETING AND AIR SREVICE DEVELOPMENT EFFORTS

Air Service Development Efforts – The Bismarck Airport has aggressively marketed its air service 

for many years. The Airport has hired an Advertising Agency and works closely with city and 

regional partners to promote Bismarck air service.

Air Service Development Efforts – The Bismarck Airport retains a professional air service 

development consulting firm on a full-time basis. The Airport is very active in attending meetings 

with its incumbent carriers as well as prospective new entrant carriers each year.

Period Activity

2008 - 2013 Defined Airport logo and brand used to increase retention and brand awareness

2010 - 2013 Began airing marketing ads on local news stations

2011 Hired an Advertising Agency to focus marketing efforts

2012 Renewed Ad Agency contract

2013 New print ad campaign; "What do you dream of" focused on leisure traffic

2009 - 2013 Developed and aired TV commercials touting the BIS Airport experience

2009 - 2013 Continued partnership with the Bismarck Mandan Chamber Air Service Committee

2008 - 2011 Advertise in partnership with the CVB in Canada, Regina/Saskatchewan

2011 - 2013 Partnership with ND Tourism to provide information at regional tradeshows

2010 Radio contests to promote airline service on United and Delta

2009 - 2013 Partnership with Bismarck Bobcats NAHL Junior Hockey Team

2010 - 2011 Sponsor and booth at Annual Chamber Mixer and Bismarck Street Fair

2011 Revamped Airport Incentive Program to improve new service incentives

Since 2011 Annual Airport marketing budget $150,000, up from $100,000 previously

2009 - 2013 Aggressive kickoff events for all new services recruited.

BISMARCK AIRPORT MARKETING AND PROMOTIONAL ACTIVITY SUMMARY 

Date Carrier

2011 Jumpstart; met with AA, AS, DL, F9, UA, WN

2011 Allegiant Conference

2011 Frontier HQ meeting

2012 Hosted Frontier representatives in Bismarck

2012 American HQ meeting

2012 Jumpstart; met with AA, AS, DL, SY

2012 Allegiant Conference

2012 United HQ meeting

2013 Allegiant Conference

2013 Network; met with AA, AS, NK, WN, SY ,UA

2013 Sixel Small Community Conference; Met with AA, F9, AS

BISMARCK AIRPORT AIRLINE MEETINGS 2011 TO 2013
Proposal of Bismarck Airport • July 2013 15

Source Amount Cash %

DOT $500,000 45.5%

Bismarck Air Service Fund $500,000 45.5%

Two Year Bismarck Airport Marketing Funds $100,000 9.1%

Total Cash Funding $1,100,000

Two Year Bismarck Airport Fee Waivers $800,000 Estimated

Total Grant Value $1,900,000

BISMARCK SCASD GRANT FUNDING PLAN 

BISMARCK’S STRATEGIC PLAN FOR NEW AIR SERVICE

The Bismarck Airport, supported by its many public and private air service development partners, 

intends to recruit new network airline service to Bismarck. As demonstrated on the previous 

pages, there is a clear and pressing need for new network service at Bismarck, with nonstop 

Texas service (Dallas) and/or Chicago service top priorities. We feel that Grant funding, as 

outlined herein, will mean new Grant supported network service at Bismarck in 2014.

Proposed New Route – Our top priority is nonstop service to a Texas hub. Excluding Las Vegas 

and Phoenix/Mesa (Allegiant), Dallas/Ft. Worth (DFW and DAL) is our third largest O&D market 

and largest without nonstop service. The American Airlines hub at DFW is one of the largest in the 

world. The American network gains from Bismarck efficient access to all of central and western 

North Dakota, including the Bakken formation and the energy mining activities where Texasbased companies and their skilled workers are extremely active.

Our second, or alternative, goal is to regain nonstop service to Chicago. Chicago is our fifth 

largest O&D market (excluding LAS and AZA) and Bismarck is the largest Chicago O&D market 

in the 12 states around Chicago without nonstop service to Chicago. Chicago service would 

also help redress the almost monopolistic market share pattern between Bismarck and markets 

in the eastern United States by introducing online connecting service that can compete with 

Delta’s Minneapolis services. American Airlines has large hubs at Dallas and Chicago and strong 

brand identity in the regions around both of those hubs and it is the logical recruitment target for 

these proposed new services. 

Funding Plan – This application proposes

to use a combination of $500,000 of 

local, non-airport funding distributed 

through the sponsor and $500,000 of 

Grant funding and $!00,000 in airport marketing funding to create a $1,100,000 total cash fund 

dedicated to risk abatement and marketing of, new American Airlines service to Dallas, or 

potentially Dallas and Chicago. The Bismarck Airport will contribute a two-year waiver of airport 

fees. The value of the fee waivers depends on the frequency and gauge of the new service. The 

total value of the Airport’s marketing funds and fee waivers is estimated at $900,000 over two 

years, if service is service of 2 x DFW and 1 x ORD.
Proposal of Bismarck Airport • July 2013 16

Milestone Date

SCASD Grant Award Q3 2013

Grant Agreement with DOT Q3 2013

Meet with Target Airline Q4 2013

Conclude MRG New Service Agreement Q4 2013

Develop Detailed New Service Marketing Plan Q4 2013

Announce New Service starting March, 2014 Q4 2013

Begin New Route Marketing per Marketing Plan Q4 2013

Submit First Grant Status Report to DOT Q1 2014

New Service Inaugural Q1 2014

Second Grant Status Report to DOT Q2 2014

Monitor Advance Bookings; Adjust Marketing as 

needed

Balance of 2014 

and 2015

Close Grant on or Before Q1 2016

BISMARCK SCASD GRANT IMPLEMENTATION TIMELINE

Submit Quarterly Grant Status Reports to DOT Balance of 2014 

and 2015

Distance 978

Equipment CRJ-700

Seats 65

Frequency Two round trips daily

Annual Segments 1,400

Annual Seats 91,000

Block Time 2.55

Block Hours 3570.0

Cost/Blk Hour $3,800

Annual Seg Cost $13,566,000

BISMARCK DALLAS SERVICE

New Service Marketing Plan – On page 15 is an outline of the ongoing marketing and 

promotional efforts of the Bismarck airport, working with its advertising agency (Results Unlimited) 

and community partners. In support of new network air service, the Airport and its partners will 

provide a long-term, multimedia, marketing and promotional campaign. Key components of this 

campaign will be:

 TV and radio purchases for western North Dakota coverage

 Targeted email blasts

 Newspaper advertising

 Social media and online media ads

 Advertising contests with the winner receiving travel vouchers for the new service

 Promotional efforts at community sporting or social events

 A series of kick-off events for the new service, employing multiple media outlets

 All marketing subject to ongoing review based on bookings and carrier feedback

 All marketing done in close coordination with the new carrier 

The Bismarck Airport along with its ad agency and community partners provided support similar 

to that listed above in 2012 for the very successful launch of Frontier Airlines service to Denver.

Grant Implementation Timeline – Bismarck 

understands the Department will seek to award 

2013 Grant funding and contract for Grant 

funding with airports during the third quarter of 

2013. Based on that as a beginning point, the 

chart at right shows the time line of key 

milestones for Grant implementation. This is 

based on reaching prompt agreement with 

American Airlines on an MRG contract and the 

carrier being able to implement service late in Q1 of 2014. American is in the midst of emerging 

from Ch. 11 reorganization and is in the process of a merger with US Airways. Therefore contract 

agreement and service implementation may slip to later in 2014. In consideration of this 

possibility, the Bismarck parties ask for a three-year Grant 

duration, covering Q4 of 2013 until Q3 of 2016. We fully expect to 

end Grant related service support and close out before then. 

Forecast of Results for New Dallas/Ft. Worth Service – Bismarck 

envisions that new DFW service would consist of two round trips 

per day operated with CRJ-700 aircraft with 65 seats. The service 
Proposal of Bismarck Airport • July 2013 17

would generate 1,400 annual segments on 3,570.0 block hours of operation and put 91,000 new 

annual seats in the Bismarck market.

The Dallas service would provide Bismarck its first nonstop service to Dallas, its largest domestic 

market without nonstop service. Online connections would also be created to at least 82 

domestic and 36 international cities.

The forecast assumes calendar year 2014 as the first year of American service. Year 2012 local, 

connect and international connect traffic is grown organically by 5% to assumed baseline 2014 

numbers. A new service stimulation is then applied for twice daily dual class American service to 

DFW. The forecast suggests American would capture 74,075 annual O&D and $21.46 million in 

passenger revenue. Segment revenue, after connect prorate, would be $13.23 million.

The 74,075 onboard O&D against the projected 91,000 annual seats would result in an 81.4% 

segment load factor the first year. Service is projected to at least mitigate the rate of increase 

on Bismarck’s high 

average fares with the 

2014 average fares for 

each traffic type driven 

back down to 2012 levels 

after American market 

entry.

American is expanding its 

fleet of medium-sized 

regional jets and taking 

on new regional carrier 

partners to fly them. Thus 

carrier segment costs for 

this route in 2014 are uncertain. Based on an estimated block hour cost of $3,800 per hour in 

2014, this 978 mile route would see a very modest operating loss the first year of $333,279.

Service

Traffic Type 2012 Avg Fare Traffic Avg Fare Stimulation Traffic Avg Fare Share O&D Fare Revenue Prorate Seg Rev

Local O&D 12,820 $261 13,461 $274 100% 26,922 $261 75% 20,192 $261 $5,278,940 100% $5,278,940

Dom Flow 183,230 $293 192,392 $308 5% 202,011 $293 25% 50,503 $293 $14,822,467 50% $7,411,233

Int Flow 10,220 $401 10,731 $421 5% 11,268 $401 30% 3,380 $401 $1,356,367 40% $542,547

Total 206,270 $311 216,584 $327 11% 240,201 $295 31% 74,075 $290 $21,457,774 62% $13,232,721

2014 W/Out AA Year 2014 With AA American Airlines 2014 Results

BISMARCK - DALLAS TRAFFIC AND REVENUE OUTLOOK
Proposal of Bismarck Airport • July 2013 18

Distance 716

Equipment ERJ-145

Seats 50

Frequency One Round Trip

Annual Segments 722

Annual Seats 36,100

Block Time 2.1

Block Hours 1516.2

Cost/Blk Hour $3,100

Annual Seg Cost $4,700,220

BISMARCK CHICAGO SERVICE

Forecast of Results for Chicago Service – Bismarck’s third 

largest O&D market without nonstop service is Chicago 

ORD/MDW. Bismarck is the largest market in the 12-state area 

around Chicago without Chicago service. Chicago service is 

envisioned to initially be one daily round trip with a 50-seat 

regional jet. The single trip would generate 35,800 annual 

seats and, depending on flight timing, connect to up to 89 

domestic and 18 international destinations.

As with the Dallas forecast, baseline 2012 traffic is grown to 2014 levels and then stimulated for 

the beginning of new network carrier service. Single round trip service is assumed to have much 

more modest traffic capture than a two round trip pattern.

The 27,591 annual onboard O&D against the projected 36,100 seats would result in a 76.4% 

segment load factor the first year. Service is projected to at least mitigate the rate of increase in 

Bismarck’s high average fares with the 2014 average fares for each traffic type driven back 

down to 2012 levels after American entry.

American Eagle 50-seat 

regional jet per block 

hour costs are in the 

range of $3,100 - $3,300. 

This route would be one 

of the longer range ERJ 

operations for American. 

Costs per hour are 

projected at $3,100 and 

annual segment costs at 

$4.7 million. First year 

segment revenue is 

forecast at $4.58 million, 

resulting in a very modest operational loss of $116,894 the first year of operation.

Service

Traffic Type 2012 Avg Fare Traffic Avg Fare Stimulation Traffic Avg Fare Share O&D Fare Revenue Prorate Seg Rev

Local O&D 12,290 $280 12,905 $294 50% 25,809 $280 33% 8,517 $280 $2,388,806 100% $2,388,806

Dom Flow 162,060 $287 170,163 $301 3% 178,671 $287 10% 17,867 $287 $5,136,579 40% $2,054,632

Int Flow 10,950 $386 11,498 $405 3% 12,072 $386 10% 1,207 $386 $466,297 30% $139,889

Total 185,300 $307 194,565 $322 11% 216,553 $292 13% 27,591 $290 $7,991,682 57% $4,583,326

BISMARCK - CHICAGO TRAFFIC AND REVENUE OUTLOOK

2014 W/Out AA Year 2014 With AA American Airlines 2014 Results
Proposal of Bismarck Airport • July 2013 19

BISMARCK'S PUBLIC PRIVATE AIR SERVICE PARTNERSHIP

Government

The City of Bismarck

The City of Mandan

Bismarck Mandan Chamber of Commerce

Bismarck Mandan Development Association

Bismarck Mandan Convention & Visitors Bureau

Private Sector

MDU Resources

Basin Electric Power Cooperative

BOBCAT/Ingersoll-Rand 

St. Alexius Medical Center

Sanford HealthCare

North Dakota Petroleum Council

Institutions

United Tribes Technical College

University of Mary

Bismarck State College

BISMARCK’S PUBLIC PRIVATE PARTNERSHIP AND PREVIOUS GRANT

Public Private Partnership – The 

communities of Bismarck and 

Mandan work closely on economic 

development and other 

social/commercial issues. 

Bismarck’s public private 

partnership to support new Grant 

supported air service reflects that 

close cooperation, is broad based 

and covers all sectors of the local 

economy. Every local government 

body is a member as well has the 

most major employers.

The Partnership includes the two 

largest health care institutions and 

all three local colleges.

Bismarck’s Previous SCASD Grant Award – In 2002, the first year of the Small Community Air 

Service Development Grant Program, the Bismarck Airport was awarded a Grant for $1,557,500 

in funding, matched by a local share of $512,500. The purpose of the 2002 Grant was to assess 

the feasibility of inaugurating new regional air service, recruit a regional airline to provide the 

regional air service, and market the regional air service. A total of $1,511,250 in DOT funding was 

expended on this Grant.

The proposal was groundbreaking in that it envisioned an on-call point-to-point airways system 

using single engine aircraft providing service in rural areas where drive distances are great. The 

concept was tried and did not gain the traction necessary to continue as a going concern. 

Much was learned about the marketing, pricing, promotional and operational tactics needed 

to make such a concept work at some future time and place.

The 2002 Grant gets an “A” for creativity and for acquired learning by the Department and 

North Dakota on possible strategies or tactics for addressing rural air service needs. The Grant’s 

scope and purpose have almost nothing in common with the current 2013 Grant application.
Proposal of Bismarck Airport • July 2013 20

SUMMARY

North Dakota’s economy is the strongest in the nation, driven primarily by the energy mining and 

agriculture sectors in the central and western part of the state (Bismarck’s catchment area). 

Bismarck is a transportation hub for the region and the Bismarck Airport is the only one in the 

region with in-place infrastructure to handle new air service to meet the region’s air travel needs.

The isolation of the Bismarck region makes air service of critical importance in supporting the 

ongoing economic growth. Bismarck and its catchment area is a long way from major metro 

areas and large scale low fare airline operations (MSP is 430 drive miles, DEN is 700 drive miles).

Yet despite strong network traffic growth and some of the highest network carrier average fares 

in the nation, Bismarck network capacity is down in 2013 from 2008 levels. Currently, Bismarck 

service is limited to Delta (MSP) and United (DEN) service, consisting mostly of regional jets.

Bismarck believes it is essential to recruit and support new network carrier air service. The rapidly 

growing local energy mining sector has meant a huge increase in air travel demand between 

Bismarck and the south central U.S., particularly Texas, Oklahoma and Louisiana. The Bismarck 

region has a crying need for new nonstop service to Texas, and the Dallas/Ft. Worth hub of 

American Airlines is the most logical destination for that new service. Dallas/Ft. Worth is 

Bismarck’s largest market without nonstop service and the American hub would open up 

critically needed new online connections throughout the southern U.S. Bismarck has also lost its 

only nonstop service to Chicago, service that had provided some competitive balance against 

Delta’s eastbound services to Minneapolis. American service to Chicago also is a clear 

opportunity for expanding the Bismarck region air service in an efficient and effective manner.

American’s entry into the Bismarck market, despite promising traffic and revenue metrics, does 

have challenges. Delta and United have dominated network air service in the region for 

decades. Both DFW and ORD are long stage length routes, meaning high segment operating 

costs. In this Grant proposal Bismarck proposes a $500,000 DOT funding level, matched dollar for 

dollar with local non-airport cash and complemented by significant Airport marketing funding 

and startup phase fee waivers. The total cash funding of $1,100,000 will mitigate startup phase 

financial risks for American. The need for additional network air service at Bismarck is clear. This 

Grant application outlines a clear path to gaining that critically needed new air service. 

Bismarck urges the Department to give this application favorable consideration.