### APPLICATION UNDER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST -2014-0133

SUMMARY INFORMATION 1



### 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/SCA SDP

A. P ROVIDE THE LEGAL SPO NSOR AND ITS DUN AND BRADSTREET 

### (D&B) DATA UNIVERSAL

NUMBERING SYSTEM 

### (DUNS) NUMBER 

### , INCLUDING 

### +4, EMPLOYEE IDENTIFICAT ION NUMBER



### (EIN) OR TAX ID



### . Legal Sponsor Name:

Name of Signatory Party for Legal Sponsor:

DUNS Number:

EIN/Tax ID:

B. L IST THE 

### N AME OF THE COMMUNITY OR CONSORTIUM OF COM MUNITIES APPLYING 

### :

1.____________________________________________________

2.____________________________________________________

3.____________________________________________________

4.____________________________________________________

C. P ROVIDE THE FULL AIRP ORT NAME AND 

### 3-L ETTER 

### IATA A IRPORT 

### C ODE FOR THE

APPLICANT 

### ( S 

### ) AIRPORT 

### ( S 

### ) (O NLY PROVIDE CODES FOR THE AIRPORT 

### ( S 

### ) THAT ARE ACTUALLY

SEEKING SERVICE 

### ).

1. 2

.

3

. 4

.

1 Note that the Summary Information does not count against the 20

- page limit of the SCASDP application.

### D OES THE AIRPORT SEEKING SERVICE HOLD AN AIRPORT OPERATING CERTIFICATE ISSUED BY

THE 

### F EDERAL 

### A VIATION 

### A DMINISTRATION UNDER 

### 14 CFR P ART 

### 139? (I F 

### “N O 

### ”, P LEASE

EXPLAIN WHETHER THE AIRPORT INTENDS TO APPLY FOR A CERTIFICATE OR WHETHER AN

APPLICATION UNDER 

### P ART 

### 139 IS PENDING 

### .)

Yes No (explain)

______________________________________________________________________________

______________________________________________________________________________

D. L IST THE 

### 2- DIGIT CONGRESSIONAL DISTRICT CODE APPLIC ABLE TO THE SPONSORI NG

ORGANIZATION 

### , AND IF A CONSORTIUM 

### , TO EACH PARTICIPATING COMMUNITY



### .

1. 2

.

3

. 4

.

E. A PPLICANT 

### I NFORMATION 

### : (C HECK 

### A LL 

### T HAT 

### A PPLY 

### )

Not a Consortium Interstate Consortium Intrastate Consortium

Community currently receives subsidized Essential Air Service

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

If previous recipient: Provide year of grant(s) :_______________________________; and, the text of the grant agreement section(s) setting forth the scope of the grant project :

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

F. P UBLIC 

### /P RIVATE 

### P ARTNERSHIPS 

### : (L IST 

### O RGANIZATION NAMES 

### )

PUBLIC PRIVATE

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.

### G. P ROJECT 

### P ROPOSAL 

### :

1. G RANT 

### G OALS 

### : ( CHECK ALL THAT APPLY 

### )

Launch New Carrier Secure Additional Service Upgrade Aircraft

First Service New Route Service Restoration

Regional Service Surface Transportation Professional Services 2



### Other (explain below)

2. F INANCIAL 

### T OOLS 

### T O 

### B E 

### U SED 

### : ( CHECK ALL THAT APPLY 

### )

Marketing (including Advertising): promotion of the air service to the public

Start

- up Cost Offset : offsetting expenses to assist an air service provider in setting up a

new station and starting new service (for example, ticket counter reconfiguration)

R evenue Guarantee : an agreement with an air service provider setting forth a minimum

guaranteed profit margin, a portion of which is eligible for reimbursement by the

community

Recruitment of Air Carrier: air service development activities to recruit new air service,

including expenses for airport marketers to meet with air service providers to make the

case for new air service

Fee Waivers : waiver of airport fees, such as landing fees, to encourage new ai r service;

counted as in-kind contributions only

Ground Handling Fee : reimbursement of expenses for passenger, cabin, and ramp (below

wing) services provided by third party ground handlers

Travel Bank: travel pledges, or deposited monetary funds, from pa rticipating parties for

the purchas e of air travel on an air carrier , with defined procedures for the subsequent use

of the pledges or the deposited funds; counted as in-kind contributions only

2 “Professional Services” involve a community contracting with a firm to produce a product such as a marketing plan, study, air carrier proposal, etc.

### Other (explain below)

______________________________________________________________________________

______________________________________________________________________________

H. E XISTING 

### L ANDING 

### A IDS AT 

### L OCAL 

### A IRPORT 

### :

Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

I. P ROJECT 

### C OST 

### : D O NOT ENTER TEXT IN SHADED AREA



### L INE 

### D ESCRIPTION 

### S UB 

### T OTAL 

### T OTAL 

### A MOUNT



### 1 Federal amount requested

2 State cash financial contribution

Local cash financial contribution

3a Airport cash funds

3b Non

- airport cash funds

3 Total local cash funds ( 3a + 3b )

4 TOTAL CASH FUNDING ( 1+2+3 )

In

- K ind contribution

5 a Airport In

- Kind contribution **

5b Other In

- Kind contribution **

5 TOTAL IN

- KIND CONTRIBUTION

( 5a + 5b )

6 TOTAL PROJECT COST ( 4+ 5 )

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.

### K. I S 

### T HIS 

### A PPLICATION 

### S UBJECT 

### T O 

### R EVIEW 

### B Y AN 

### A FFECTED 

### S T ATE 

### U NDER 

### E XECUTIVE



### O RDER 

### 12372 P ROCESS 

### ?

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 S tate for review.

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

L. I S 

### T HE 

### L EAD 

### A PPLICANT OR 

### A NY 

### C O 

### -A PPLICANTS 

### D ELINQUENT 

### O N 

### A NY 

### F EDERAL 

### D EBT 

### ?

(I F 

### “Y ES 

### ”, P ROVIDE 

### E XPLANATION 

### )

No Yes (explain)

______________________________________________________________________________

______________________________________________________________________________
APPLICATION CHECKLIST

I NCLUDED ? I TEM

For Immediate Action

Determine Eligibility

New Grants.gov users must r egister with www.grants.gov

. Existing Grants.gov users must verify ex isting www.grants.gov account has not expired

and the Authorized Organization R epresenta tive (AOR) is current

. For Submission by 5:00 PM EDT on July 31, 2014

Communities with active SCASDP grants: notify DOT/X50 of intent to terminate existing grant in order to be eligible for selection in FY2014

Complete Application for Federal Domestic Assistance (SF424) via www.grants.gov

S ummary Information schedule complete and used as cover sheet (see Appendix B )

A pplication of up to 20 one

- sided pages (excluding any letters 

### from the community or an air carrier showing support for the application ) , to include:

• A description of the community’ s air service needs or deficiencies

.

• A strategic plan for meeting those needs under the Small Community Program

.

• A detailed description of the funding necessary for implementation of the community's project.

• An explanation of how the proposed project differs from any previous projects for which the community received SCASDP funds (if applicable).

• Designation of a legal sponsor responsible for adminis tering the program

.

• A motion for confidential treatment (if applicable)

– see Appendix D below.

# Small Community Air Service Development Grant Program

Application of

DOCKET OST-2014-0113

DUNS # 037613692 Congressional District: Arizona 5Application of Lake Havasu, Arizona

The Small Community Air Service Development Program OST – 2014-0113 2



# Proposal Contents

THE CHALLENGE – AND THE SOLUTION ............................................. 3

I T ’ S N OT J UST L AKE H AVASU

– I T ’ S A CROSS THE N ATION .......................... 3

T HE D EFICIENCY I S R EAL

. T HE S OLUTION I S A VAILABLE ............................ 4

T HE L AKE H AVASU S OLUTION

– A M ODEL F OR T HE N ATION ...................... 4

T HE G RANT R EQUEST .............................................................................. 5
C OMMUNITY P ARTICIPATION ..................................................................... 6

P ROJECT S PONSOR ................................................................................. 6

LAKE HAVASU & THE PROPOSAL ........................................................ 7

A N EW M ODEL

– N EW T RAFFIC ................................................................ 7

T HE O PERATOR I S I N P LACE ..................................................................... 8

T HE L AKE H AVASU G RANT P ROPOSAL ...................................................... 9
C OST & R EVENUE F ORECASTS ............................................................... 10

T RAFFIC & R EVENUES R AMP P ERIOD ...................................................... 11

GRANT ADMINISTRATION .................................................................... 12

T HE P ROGRAM A DMINISTRATION ............................................................ 12

M ARKETING & A DVERTISING S UPPORT .................................................... 13

P OST -G RANT S UPPORT ......................................................................... 13

SUMMARY OF APPLICATION ............................................................... 14Application of Lake Havasu, Arizona

The Small Community Air Service Development Program OST – 2014-0113 3



## The Challenge – And The Solution

It’s Not Just Lake Havasu – It’s Across the Nation

The changes in the US air transportation system in the last decade have presented new challenges to smaller communities such as Lake Havasu.

 The independent regional airline industry – which once was a vibrant part of the transportation system serving proprietary route systems under their own brands has mostly disappeared. 1

 The increase in operating costs - and other factors - have resulted in small airliners having poor economics for small community

service.

 As a matter of reality, the new economics of air service simply mean that many small communities cannot be fully connected to the national air transportation system from the local airport.

 The recent deletion of several communities from eligibility for the Essential Air Service program is stark evidence of these trends.

This is precisely the case with Lake Havasu. Its geographic location and its relative size now preclude a re-establishment at the local airport of connectivity to the national air transportation system.

The only airline connecting hubsite that is within geographic access of Lake Havasu is the American/US Airways operation at Phoenix Sky Harbor. Connecting service to this point has been attempted in the past using traditional code-shared commuter service, without success. There were two main dynamics in play that doomed the success of this prior service. The first was poor reliability.

But the second is more fundamental: feeder air service to a connecting hub dictates that schedules be set to meet the major airline’s connecting banks, and not the needs of the local O&D traffic to and from the small community to the hub city. Also, seats are allocated on the basis of fares to assure that they generate maximum revenue to the airline system – i.e., produce feed traffic.

This means that the local fares the hub are necessarily high, which deters local O&D demand. In the hub and spoke system, the value of the seat leaving the small community is that represented by the total system revenue (read: connection revenue) it can generate.

1 Virtually all independent-operating and independent-branded “commuter” airlines today – such as Sliver, SeaPort, Air Choice One, etc., are prim arily in business to bid on EAS markets – none have full, traditional route systems and markets of their own. The changes in the airline industry over the past decade – in particular, the disappearance of independent regional

airlines – now cuts this region of Arizona away from accessing necessary services

such as medical and technical, available only at large metro

cities.Application of Lake Havasu, Arizona

The Small Community Air Service Development Program OST – 2014-0113 4

This traditional model is not designed nor intended to meet the needs of

the consumers at small communities s eeking access only to the services and commercial base at the hub city. This is a challenge across the United States for small communities, and for geographically-isolated places such as Lake Havasu, it is a major economic disadvantage.

However, there are other applications for air service at Lake Havasu that are more focused, and meet a specific need of the community and region served by Lake Havasu Municipal Airport. This is the sector of the rural consumer base that requires access to medical, commercial, and other services not available locally.

The Deficiency Is Real. Th e Solution Is Available

While it is an economic reality that recruiting scheduled service from one of the nine remaining airline brands is likely out of reach, the fact remains that Lake Havasu and the region still require access to key services not supportable at rural communities.

Today, it is a three-hour drive to either Phoenix or Las Vegas, making access to such services very difficult. In particular, as a substantial part of the Lake Havasu economy is dependent on retirees and second home owners, having air access to such major commercial centers is an increasing need.

We would relate it to the successful system of air service within Alaska, which is mainly in place to assure that rural communities have access to services and vendors available at larger cities, such as at Anchorage and Fairbanks. While connectivity to larger airlines is generally precluded by size of the aircraft utilized, and the relatively high per-mile fares make such connectivity problematic, there is a need and a strong demand for local commuter service. This is the case with Lake Havasu – and, in fact

with all of rural Arizona.

The Lake Havasu Solution – A Model For The Nation

In most cases, in the lower 48, the unfortunate fact is that there isn’t an operator interested in establishing such service in the absence of substantial subsidies from the Essential Air Service program..

However, Lake Havasu has such an operator ready willing and able to establish Part 135 operations between Lake Havasu and Phoenix Sky Harbor, aimed specifically at the ne eds of the local community to access the services available at that city.

Dorato Jets, LLC, an established charter operator located at Lake Havasu stands ready to implement three weekday air taxi flights to Phoenix Sky Harbor, using nine-passenger Cessna Caravan aircraft. Forming a marketing identity of Dorato Airways, the company believes that this program could well be a strong example for rural communities across the US where demand is below that sufficient to support connectivity to largerApplication of Lake Havasu, Arizona

The Small Community Air Service Development Program OST – 2014-0113 5

airlines, but where specific local nee ds will patronize limited scope service to larger commercial centers.

Lake Havasu is proposing a new approach for air-travel-isolated communities. While traditional connectivity with the air transportation system via branded network carriers is now out of economic reach, there is an alternative to address the immediate challenge of accessing the services only available at larger communities. This is establishment of highly-reliable and convenient commuter service, using low-sector-cost
Cessna Caravan aircraft.

Because of the scope of the Part 135 operation, Dorato Airways will utilize non-security access facilities at both Phoenix and Lake Havasu. This will keep costs low and allow consumers greater time efficiency.

In this proposal, Dorato Airways will implement service with a minimum of three round-trips per business day to Phoenix Sky Harbor Airport, with a lower frequency on week-ends. The flight schedules will be timed to represent effective alternatives to the 6-hour round-trip drive time, as well

as to stimulate additional traffic.

The Airport and the community believe that the air transportation system in the US has evolved to the point that this model is now not only viable, but necessary.

The community holds no misconceptions regarding the need and the role of this service, which is to provide an economic channel for necessary business and service-access at Phoenix. However, it is believed that this grant will support and showcase a model that can be implemented at

other communities across the nation.

The Lake Havasu community would ask the Department for favorable consideration of this proposal, as it represents a potential solution for communities across the nation that have been cut completely from any

commercial air service access.

The Grant Request

Lake Havasu is requesting a grant in the amount of $500,000, to be matched by community-provided funding of $100,000, for a total of $500,000, to assist Dorato Jets / Dorato Airways in acquiring the financing, equipment, aircraft and training to implement service to

Phoenix.

Analyses indicate that the service can be profitable within the first year of operation. A portion of the grant funding will be applied to offset the initial traffic ramp-up period, plus regional advertising and marketing.Application of Lake Havasu, Arizona

The Small Community Air Service Development Program OST – 2014-0113 6

Community Participation

The Partnership For Economic Development will be the community participant in this grant request, and will be the entity that will administer the community funding portion.

Mr. Gary Kellogg
President/CEO Partnership For Economic Development 314 London Bridge Road Lake Havasu City, AZ 86403 (928) 505 7333

Project Sponsor

The official sponsor of this project is the City Of Lake Havasu

Please direct any correspondence regarding this matter to

Mr. Steve Johnson Airport Supervisor Lake Havasu Municipal Airport c/o Lake Havasu City
2330 McCulloch Blvd N Lake Havasu, AZ 86403-5950 (928) 764 3330Application of Lake Havasu, Arizona

The Small Community Air Service Development Program OST – 2014-0113 7



## Lake Havasu & The Proposal

Lake Havasu Municipal Airport is situated in a region that comprises over 150,000 population within a 60-minute drive. None of this population base has any scheduled air access to Phoenix, and therefore is the target base for the proposed service.

While the core population of Lake Havasu is approximately 52,000, the extended population base is proper to include as the traffic base for the Dorato Airways operation to Phoenix. The proposed service will offer significant benefits to consumers in Needles, Kingman and Bullhead City. None of these have flights to Phoenix, and none of these communities are seeking to implement such service.

A New Model – New Traffic

Historical traffic data at Lake Havasu or virtually any small community are not reliable nor indicative of the demand that the proposed type of service is expected to generate. There are fundamental differences in theThe entire threestate region will

benefit from the air

access that this grant will make possible.Application of Lake Havasu, Arizona

The Small Community Air Service Development Program OST – 2014-0113 8

proposed Dorato Airways operation and past attempts at more traditional

scheduled air service.

Past service to Phoenix from virtually every small community in Arizona was intended to provide connectivity to a major airline system. As noted earlier, the operational profile for this type of service is fundamentally different from that which meets the specific commercial needs of Northwestern Arizona in accessing Phoenix.

For this program to work, the following must be in place:

 Frequency of service . At least three week-day departures are necessary. Otherwise, the timing and convenience of air service may be less attractive that driving.

 Reliability . The service must have near-perfect schedule reliability to successfully draw consumers from the road, and to

stimulate new traffic.

 Cost . There are no misconceptions that this type of service will be “low fare.” However, it needs to be at cost levels that represent value to key consumer segments, while providing reasonable return to the operator.

 Scheduling . The flight patterns must be designed to meet the needs of the Lake Havasu community, as it is originating traffic that will be the majority of the demand.

This proposal entails a program that c an meet all of these requirements, and, once incubated, may be applied to other points in Arizona as well.

The Operator Is In Place

Dorato Jets is an established, local charter operator at Lake Havasu. The company has committed to implementi ng service to Phoenix Sky Harbor Airport that meets the above criteria. The design aircraft will be the Cessna Grand Caravan, outfitted with 9 seats. Block time between Lake

Havasu and PHX will be 65 minutes.

Dorato Jets has advised that it will require approximately $500,000 to establish and implement the service. This includes acquiring and financing additional aircraft, training, and support functions.

Based on traffic projections, the service is expected to be profitable from the first full year of operations. The main focus of this grant is to fund the financing for the capital expenditures necessary. In scope this is not inconsistent with other prior SCASD grants awarded to finance airport and related equipment. Lake Havasu has a Part 135 operator ready to take steps

to initiate service to Phoenix subsequent to grant award.Application of Lake Havasu, Arizona

The Small Community Air Service Development Program OST – 2014-0113 9

The community and the Airport fully believe that with this grant, a severe communication deficiency – lack of access to a major commercial center – can be quickly and successfully addressed.

The Lake Havasu Grant Proposal

This region of Arizona represents a population of approximately 150,000 within a 60-minute drive of Lake Havasu Municipal Airport. No airports in the region have scheduled air service to the important commercial center

of Phoenix.

The proposal for the grant is straight forward and consistent with many other successful programs achieved with the SCASD program. This will

include:

 Three week-day round-trip flights, scheduled to the needs of the regional communities for single-day access to the Phoenix metro area via Sky Harbor International Airport, with a reduced schedule

on week-ends.

 Fares will be set based upon known and expected costs of operation of a 9-passenger Cessna Caravan on the route, and the projected traffic.

 Dorato Airways will establish a low-capital, low cost reservation system that will address the needs of the service proposed. Because of the limited scope of the service, and the fact that the flights are intended to meet the needs of the O&D market only, the expense of a comprehensive computer reservations system will

be avoided.Application of Lake Havasu, Arizona

The Small Community Air Service Development Program OST – 2014-0113 10

Cost & Revenue Forecasts

Historic data from past attempts at serving Phoenix are not valid, because
that service was not structured to meet the local O&D needs of the community.

Furthermore, a review of distantly-similar markets elsewhere in the US rendered little historical guidance regarding the traffic generation that can be expected. Isolated New England markets, such as Nantucket and Martha’s Vineyard, indicated – on 9-seat commuter aircraft – annual traffic in 2013 between @ 11,000 and 23,000 O&D passengers to the nearest major commercial center, Boston.

The Community believes that this proposed service will generate traffic approximating one round trip for every 20 population in the region, approximating 7,500 annual O&D, approximating 24 passengers per day, or 12 per day each way.

While it is felt that these estimates are reasonable, there are no historical data, and no forecast methodology that can provide additional support. What is absolutely known is that the community needs this service, and that the locally-based operator is ready and eager to make it a success.

As the data below indicate, once established, it is estimated that the service will be a solid success. A normalized full year projection is as

follows:

HII - PHX Mileage 156 Equipment Cessna Caravan Service Pattern 3x Daily Completion Factor 98.0% Annual Segments 1,835

Annual Seats 16,511

Annual ASM 2,575,722

Estimated CASM 0.410

Estimated Route Cost $1,054,872

T raffic Revenue

OW Fare -Net of Taxes $150.00 7,500 $1,125,000

Traffic & System Revenue $1,125,000

Full Year Se g ment Pro j ected O p eratin g Profit $70,128

O p eratin g Mar g in 6.2%

RPMs 1,170,000

Load Factor 45.4% Proforma Projection Projected Operational Statisitcs 

### Normalized Full Year

Traffic & Revenue SummaryApplication of Lake Havasu, Arizona

The Small Community Air Service Development Program OST – 2014-0113 11

Traffic & Revenues Ramp Period

The revenue guarantee portion of this grant request is to offset the potential losses facing the operator as the service gains public acceptance.

The basic forecast is for the traffic to build gradually, with 50% of the total daily forecast demand to be captured in the first six months, ramping to full capture in the second six months. Therefore, the grant guarantee is for a 12-month period, beginning on the first day of scheduled operations.

The forecasted data for the first six months conservatively projects a revenue ramp period, with profitability coming in the following six months.

In the following six months, the estimate is that the program will reach

and exceed break-even:

The program will be structured to review traffic and revenues on a quarterly basis, with any revenue short falls below break-even addressed by the DOT/community grant funds.

In addition to the capital requirements for the operator to add to its fleet, there is an estimate of a first-year loss of approximately $70,500. Given that the total grant funding is projected at $600,000, this will leave the remainder of the dollars available for marketing and advertising the service in the region. Estimated Route Cost $527,436

T raffi c Revenue

OW Fare -Net of Taxes $150.00 2,813 $421,875

Profit/Loss
Traffic & System Revenue 2,813 $421,875 -$105,561 Pro j ected Operational Statisitcs - First 6 Months

Traffic & Revenue Summary

Estimated Route Cost $527,436

Traffic Revenue

OW Fare -Net of Taxes $150.00 3,750 $562,500

Profit/Loss

Traffic & S y stem Revenue 3,750 $562,500 $35,064 Pro j ected Operational Statisitcs - Second Six Months

Traffic & Revenue SummaryApplication of Lake Havasu, Arizona

The Small Community Air Service Development Program OST – 2014-0113 12



## Grant Administration

The stated foundational purpose of the Small Community Air Service Development Program is to provide funding for communities to approach difficult air service challenges.

The Lake Havasu proposal precisely meets that standard. In this, the community is requesting a grant in the amount of $500,000, to be matched with community funding of an additional $100,000, for a total of $600,000. The funding herein will allow Dorato Jets to finance the purchase of a used Cessna Grand Caravan, as well as the related support, training and staffing necessary to establish the new service to

Phoenix.

Of the cash funds, the distribution is intended as follows:.

The Program Administration

Lake Havasu Airport will be directly responsible for all liaison with the Department of Transportation in regard to the program. The community partners will be responsible for directing all regional promotions and marketing efforts to support the new capacity.

Upon grant award, the community and Dorato Jets will provide the DOT with its detailed plan for use of the funds in regard to the capital needs. With approval of the DOT, the plan will outline financing and spending plans.

Upon establishment of flights:

 HII will monitor passenger traffic and keep records to track increases in ridership.

 The carrier will provide passenger revenue data for traffic and revenues captured. This will determine the change in revenue contribution the new service is generating.

 At the end of each three-month period, any shortfall between the agreed-upon revenue levels and the costs of operation will be

settled. Application Grant Funds Local Match Total

Capital $416,667 $83,333 $500,000

1st Year Risk-Offset $58,750 $11,750 $70,500

Marketing $24,583 $4,917 $29,500

Totals $500,000 $100,000 $600,000Application of Lake Havasu, Arizona

The Small Community Air Service Development Program OST – 2014-0113 13

Marketing & Advertising Support

Lake Havasu is not an expensive media market. Therefore, the dollars allocated to the support of the program will go far to assure that all sectors of the regional economy are aware of the new service.

Basically, the community partners will approach the marketing of the program based on the following:

 Print media – weekly advertisement s starting 30 days from start of service upgrade, focusing on the fact that Phoenix service is coming to Lake Havasu

 Direct contact – key businesses in the region will be contacted on a routine basis to assure ridership grows

 Civic meetings – the Airport and the community will present the benefits of new upgraded service at civic meetings.

Post-Grant Support

At the end of the grant period of one year from the implementation of both jet flights, the service will continue to be promoted by both the Airport and the Partnership For Economic Development

During and subsequent to the grant period, the focus of marketing efforts will be on the following:

 The comparative cost-efficiency of using Lake Havasu Municipal Airport.

 Convenience of the service offeredApplication of Lake Havasu, Arizona

The Small Community Air Service Development Program OST – 2014-0113 14



## Summary of Application

The Lake Havasu Municipal Airport and its community partners would summarize this proposal, and its importance as follows:

 Changes in the airline industry have effectively precluded any chance of HII recapturing service from one of the nine remaining major carriers. These carriers do not have the equipment to access small communities.

 There is a critical need to keep small communities commercially connected to major business centers. Small communities such as Lake Havasu do not have many of the support facilities – such as medical and legal – that are needed. Therefore, service such as outlined herein has enormous

economic value.

 There are no other air service options. The operator in this proposal is ready to begin service as soon as possible.

 The program is viable and meets the context of the future airline industry. This program postures Lake Havasu for the future. Being pro-active, it addresses a near-term challenge in the future, and does so with results that are entirely consistent with the intent of Congress in establishing the Small Community Air Service Development Grant Program.

Lake Havasu Regional Airport and its community partners appreciate the Department’s time in considering this application. This grant will

assure that HII air service grows and

prospers in the

future.