Proposal Under the 

Small Community Air 

Service Development 

Program, Docket 

DOT-OST-2011-0119

Submitted by:

The Grand Forks Regional Airport 

Authority 45-0409220

DUNS# 194627790-0000

Congressional District: ND00

August 2, 2011





Proposal Under the Small Community Air Service Development Program, Docket DOT-OST-2011-0119, August 2, 2011 

© 2011 i ICF SH&E

TABLE OF CONTENTS

1 Executive Suummary .......................................................................................................1

2 Proposal Highlights .........................................................................................................2

Air Service Issue ................................................................................................................................. 2

Solid Plan With a Defined Schedule ................................................................................................... 3

Broad Community Support For The Project ....................................................................................... 3

Strong Ability to Implement Project ................................................................................................... 3

Multiple Sectors of the Community Will Benefit from the Proposed Plan......................................... 4

3 Air Service Environment..................................................................................................5

Existing Catchment Area .................................................................................................................... 5

Air Service Background...................................................................................................................... 6

Proximity to a Competing Airport ...................................................................................................... 9

Factors Affecting Air Service ........................................................................................................... 10

Past air service development efforts.................................................................................................. 10

4 Air Service Existing and Historical ...............................................................................12

Historical Air Service........................................................................................................................ 12

Air Service Background.................................................................................................................... 12

5 Air Service Needs and Deficiecies ................................................................................15

Air service issues............................................................................................................................... 15

Underserved Market.......................................................................................................................... 15

High Airfares..................................................................................................................................... 16

6 Strategic Plan – Air Service...........................................................................................19

Action Plan........................................................................................................................................ 19

Public-Private Partnership................................................................................................................. 19

Project Goals..................................................................................................................................... 20

Proposed Air Service Strategy .......................................................................................................... 20

Anaylsis and Forecasts...................................................................................................................... 21

Air Service Support Plan................................................................................................................... 22

7 Marketing Plan................................................................................................................23
Proposal Under the Small Community Air Service Development Program, Docket DOT-OST-2011-0119, August 2, 2011 

© 2011 ii ICF SH&E

Target Market.................................................................................................................................... 23

Marketing Budget.............................................................................................................................. 24

Timeline ............................................................................................................................................ 24

Landing Fee Waiver.......................................................................................................................... 24

Project Continuation/Sustainability................................................................................................... 24

Alternate Plan.................................................................................................................................... 25

8 Strategic Plan – Implementation and Funding .............................................................26

Funding Plan ..................................................................................................................................... 26

Schedule and Monitoring .................................................................................................................. 26

Alternate Planning............................................................................................................................. 27

Start-Up Period and Sustainability of the Market ............................................................................. 27

Defining Success............................................................................................................................... 27

Legal Sponsor.................................................................................................................................... 28

Financial Controls............................................................................................................................. 28

Appendix A: Community Support ........................................................................................29
Proposal Under the Small Community Air Service Development Program, Docket DOT-OST-2011-0119, August 2, 2011 

© 2011 1 ICF SH&E

1 EXECUTIVE SUMMARY

The Grand Forks Regional Airport Authority is proposing a Small Community Air Service Development 

Grant in the amount of $300,000 to accompany the community and airport funding in the amount of 

$441,000 to provide a revenue guarantee for service between Grand Forks and a second major hub airport 

like Denver and/or Chicago O’Hare with service from a 50-seat regional jet operated by a major carrier or 

an affiliate of that carrier.

The Grand Forks International Airport (GFK) services a large catchment area that includes northeastern 

North Dakota and northwestern Minnesota. The Grand Forks metropolitan statistical area (MSA) is the 

third largest in North Dakota with a population of 97,190. Grand Forks is the home of the University of 

North Dakota and the world’s largest flight school that trains pilots from all over the world.

In recent years the Grand Forks market has seen substantial growth with the introduction of a low cost 

carrier, however, a lack of competition, high ticket prices, unpredictable schedules and backhaul routes 

for westbound travel are driving passengers to competing markets. Grand Forks currently ranks 4th

amongst markets in the Central Region for highest average fares.

Current daily non-stop service to Grand Forks is provided by Delta Air Lines with a 50-seat regional jet 

to Minneapolis-St. Paul International Airport. Grand Forks has seven daily flights to Minneapolis but the 

Airport Authority has recently been notified by Delta that the flights will be decreased to six in 

September. As the 3rd largest city in North Dakota, Grand Forks has the least amount of daily non-stop 

destinations and frequencies of the Big 4 airports in North Dakota. Grand Forks was the only City in 

North Dakota to suffer a decrease in service despite having the highest load factors of the Big 4 Airports. 

A lack of competition is making the decrease possible for the incumbent carrier.

The City of Grand Forks and the surrounding catchment area is growing, not to mention recent news of a 

potential loss of two Essential Air Service (EAS) markets, each within 70 miles of GFK, has caused the 

community to overwhelmingly support our grant application. The Growth Fund Committee from the City 

of Grand Forks has offered $200,000 cash to add to the Airport Authority’s $110,000 cash in request of 

$300,000 from DOT. With the addition of a potential land fee waiver and in-kind donation from the CVB 

and Chamber, the total grant application is for $741,000. That equates to a cash percentage of 49 percent 

DOT, 33 percent non-airport cash and 18 percent airport cash. The total project percentage equates to 40 

percent DOT funds to match 60 percent local funds to solidify daily non-stop service to a second major 

hub airport with a revenue guarantee to minimize potential startup losses to the air carrier. 

We feel we have a commitment from our public-private partnership that proves public support and paves 

the way for a successful grant
Proposal Under the Small Community Air Service Development Program, Docket DOT-OST-2011-0119, August 2, 2011 

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2 PROPOSAL HIGHLIGHTS

This Small Community Air Service 

Development Program grant application 

for the Grand Forks Regional Airport 

Authority/Grand Forks International 

Airport meets the criteria set out in 

Docket OST-2011-0119.

The Grand Forks Regional Airport Authority, the airport sponsor, is requesting $300,000 in federal 

assistance to facilitate the implementation of a $741,000 air service improvement initiative. The project 

goals are to continue the growth of Grand Forks air service, reduce the need for travelers to drive long 

distances, lower ticket prices, improve air service options and improve the quality of air service from 

Grand Forks International Airport.

The Action Plan to accomplish these goals is to initiate daily nonstop service from Grand Forks 

International Airport. Current Delta Air Lines service through Minneapolis provides excellent connecting 

opportunities to the eastern US but indirect connections to the west result in high airfares. Allegiant 

service to Phoenix and Las Vegas provides for low cost fares to the west, however, they do not provide 

connection capabilities. Allegiant service has spurred a recent growth for Grand Forks and increased our 

catchment area significantly. 

Competition and an alternative to Delta Air Lines to Minneapolis with daily service to a major hub like 

Chicago and/or Denver will provide more options to the local air traveler, reduce airfares in the markets 

and decrease the need to drive to surrounding airports for air service.

AIR SERVICE ISSUE

Grand Forks International Airport has grown air service in the past three years with the addition of 

Allegiant. However, Grand Forks is still an underserved market with only one carrier providing daily 

service to a hub Airport. In the last year, Delta has been adjusting the flight schedule between six and 

seven daily flights. The unpredictability is causing passengers to seek more reliable daily service at 

other airports. Delta will pull the seventh flight in September, bring it back in November and December, 

and then pull it again in January and February. The net result of having only one daily commercial air 

service provider is high airfares, no alternative service options for air travelers, and the need for 

westbound air travelers to endure a circuitous routing to reach their destinations. In short, the market is 

underserved, the quality of air service is deteriorating, airfares are going up, and increasing numbers of 

the region’s catchment area population are traveling to competing airports to board flights. It is the classic 

small community air service situation.
Proposal Under the Small Community Air Service Development Program, Docket DOT-OST-2011-0119, August 2, 2011 

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The prospect of continued air service reductions at Grand Forks International Airport would have serious 

consequences for the primary catchment area’s’ population of over 105,741 and accompanying business, 

educational, and government institutions. This is especially difficult at a time when neighboring Essential 

Air Service Communities (EAS) are having their services drastically changed. The growth in our 

catchment area, as a result of the diminished EAS routes, requires better air service to accommodate these 

new passengers. 

SOLID PLAN WITH A DEFINED SCHEDULE

The Action Plan is designed to interest an air carrier in providing daily nonstop service from Grand Forks 

International Airport to a major hub airport. Targeted hubs include Denver and Chicago O’Hare serviced 

by United Airlines, Frontier Airlines, Southwest Airlines and American Airlines. Nonstop service will be 

supported by a comprehensive airline incentive program including: a revenue guarantee, fee waiver and a 

self funded marketing campaign. The plan is designed to mitigate the airline’s risk and promote use of the 

service. With these strong incentives, it is anticipated that an air carrier will initiate service within the first 

12 months of the grant.

BROAD COMMUNITY SUPPORT FOR THE PROJECT

The Grand Forks Regional Airport Authority, Grand Forks Region Economic Development Corporation, 

City of Grand Forks, Grand Forks/East Grand Forks Chamber of Commerce and the Greater Grand Forks 

Convention & Visitors Bureau (CVB), have formed a public-private partnership in support of this 

application. Non-airport sources will fund 27 percent ($200,000) of the $610,000 cash requirement of the 

proposed plan. The airport and the community will provide 60 percent ($441,000) of the total funding 

plan in the form of cash and in-kind services. Of the $441,000 local contribution, $310,000 is cash with 

the remaining $131,000 in-kind services.

STRONG ABILITY TO IMPLEMENT PROJECT

The Grand Forks Regional Airport Authority, Grand Forks Region Economic Development Corporation, 

City of Grand Forks, Greater Grand Forks Convention and Visitors Bureau (CVB) and Grand Forks/East 

Grand Forks Chamber of Commerce fully support this plan and have the ability to implement this project 

as proposed. Staffing and funding for the proposed plan has been committed by all private and public 

partners. The Grand Forks community has a strong desire and the population base to support this air 

service initiative. In short, all of the pieces are in place to implement the proposed plan.
Proposal Under the Small Community Air Service Development Program, Docket DOT-OST-2011-0119, August 2, 2011 

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MULTIPLE SECTORS OF THE COMMUNITY WILL BENEFIT FROM THE PROPOSED PLAN

The Grand Forks International Airport serves a population of over 130,000. New Flyer of America, 

Marvin Windows & Doors, Phoenix Industries, and Cirrus Design depend on Grand Forks International 

Airport air service for access to the national transportation network for its staff and customers. 

Consulting, information technology, and financial services companies such as Brady Martz & Associates, 

Amazon.com, and Alerus Financial, also call the Grand Forks region home. 

These industries are highly dependent on air service and will likely suffer or consider relocating if 

adequate air service is not maintained in the area. The University of North Dakota, Altru Health System, 

city and county government, as well as local federal government employees represent government and 

institutional employees that use air service. Air service improvements at Grand Forks International 

Airport will benefit a broad section of the traveling public including businesses, educational institutions, 

and leisure travelers and meet the goals of the Small Community Air Service Development Program.
Proposal Under the Small Community Air Service Development Program, Docket DOT-OST-2011-0119, August 2, 2011 

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3 AIR SERVICE ENVIRONMENT

Grand Forks International Airport currently has nonstop network carrier service to Minneapolis with 

excellent connecting service beyond to the east and southeast. Grand Forks also served with less than 

daily, nonstop service, to Phoenix/Mesa and Las Vegas. The upcoming fall 2011 schedule will see the 

elimination of one daily round-trip flight in the GFK-Minneapolis market, as indicated in the table below 

shaded in blue. 

Figure 3.1: Existing Air Service

Source: OAG Schedules

EXISTING CATCHMENT AREA

Allegiant

25%

Other/Chart

2%

Delta

73%

Grand Forks Total Passengers

Year Ended June 2011 

Direction Market Carrier Depart Arrive Days Aircraft

From GFK MSP DL 0510 0620 X67 E75

MSP DL 0640 0759 Daily CRJ

MSP DL 0801 0912 X7 CRJ

MSP DL 1102 1213 Daily CRJ

MSP DL 1307 1419 Daily CRJ

LAS G4 1440 1545 4,7 M80

MSP DL 1510 1619 Daily CRJ

MSP DL 1700 1810 X6 CRJ

AZA G4 1850 1955 4,7 M80

To GFK MSP DL 0920 1035 X67 CRJ

LAS G4 0745 1230 4,7 M80

MSP DL 1125 1241 Daily CRJ

MSP DL 1332 1445 Daily CRJ

MSP DL 1520 1635 Daily CRJ

AZA G4 1305 1800 4,7 M80

MSP DL 1725 1838 Daily CRJ

MSP DL 1940 2053 Daily CRJ

MSP DL 2220 2333 X6 E75

Direction Market Carrier Depart August 2011 Arrive Days Aircraft

From GFK MSP DL 0510 0620 X67 E75

MSP DL 0640 0759 Daily CRJ

MSP DL 0801 0912 X7 CRJ

MSP DL 1102 1213 Daily CRJ

MSP DL 1307 1419 Daily CRJ

LAS G4 1440 1545 4,7 M80

MSP DL 1510 1619 Daily CRJ

MSP DL 1700 1810 X6 CRJ

AZA G4 1850 1955 4,7 M80

To GFK MSP DL 0920 1035 X67 CRJ

LAS G4 0745 1230 4,7 M80

MSP DL 1125 1241 Daily CRJ

MSP DL 1332 1445 Daily CRJ

MSP DL 1520 1635 Daily CRJ

AZA G4 1305 1800 4,7 M80

MSP DL 1725 1838 Daily CRJ

MSP DL 1940 2053 Daily CRJ

MSP DL 2220 2333 X6 E75

ugust 0
Proposal Under the Small Community Air Service Development Program, Docket DOT-OST-2011-0119, August 2, 2011 

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Grand Forks International Airport (GFK) has a unique catchment area that services south to Hankinson, 

ND, east to Bagley, MN, west to Devils Lake and north Winnipeg, Manitoba, Canada (as shown in Figure 

3.2). The population of the region is approximately 1 million residents within a 2:15 minute drive time of 

the Grand Forks International Airport. The primary population for the cities of Grand Forks and East 

Grand Forks is approximately 93,000 people. Grand Forks is the commerce, agricultural, industrial and 

educational center of the area. Included in the region are two smaller communities, Thief River Falls, MN 

and Devils Lake, ND that provide a considerable amount of business to our airport. Thief River Falls, has 

two strong businesses; DigiKey and Arctic Cat and Devils Lake has the National Guard Base and the 

some of the best fishing and hunting in the country.

Access roads throughout the region to the airport are excellent including four lane interstate and state 

highways.

Figure 3.2: Grand Forks International Airport Catchment Area

Source: SH&E

AIR SERVICE BACKGROUND

Grand Forks, the third largest city in North Dakota, serves as the prominent industrial, shopping, medical, 

recreational, educational and agricultural center for a region that extends to include north eastern North 

Dakota and north western Minnesota as well as the Canadian province of Manitoba. The region served by 

the Grand Forks International Airport has a multifaceted economy with many businesses and institutions 

reliant on air service for connections to customers, suppliers and other facilities. 
Proposal Under the Small Community Air Service Development Program, Docket DOT-OST-2011-0119, August 2, 2011 

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In order to understand the air service needs for the region served by Grand Forks International Airport, it 

is necessary to be familiar with the current and historic factors that have influenced air service. Items 

covered in the Air Service Background section include Grand Forks’ demographics, distance to 

competing airports, past air service development efforts, and both present and historical air carrier 

information.

Table 3-1 provides a list of the major employers in the Grand Forks Region. The University of North 

Dakota (UND) is the second largest employer, generates thousands of trips annually for their faculty and 

students. UND has over 14,000 students including the world’s largest flight school. The John D. Odegard 

School of Aerospace Sciences attracts students from all over the world including contracts from China, 

Saudi Arabia, Japan, Taiwan, Russia, Poland and Spain. The Odegard School has also started the first 

Unmanned Aircraft Systems (UAS) pilot training program in the nation. This is to support the new 

Unmanned Aircraft mission at the Grand Forks Air Force Base. The new mission is bringing in several 

companies like General Atomics, Northrup Grumman and Simlat to study the aircraft and their systems. 

This will continue to be a growing industry for the next several years in Grand Forks and it will revitalize 

our Air Force Base. In recent years, DigiKey, a components company, has grown drastically. They supply 

components all over the world and do over half their business in Asia. Altru Health Systems is Grand 

Forks largest employer and they have recently signed the first partnership with the Mayo Clinic in 

Rochester, Minnesota. 

Table 3.3: List of Top Grand Forks Area Employers

Source: Grand Forks Region Economic Development Corporation

Number of

Rank Employer Employees

1 Altru Health Systems 3,852

2 University of North Dakota 2,887

3 DigiKey Corporation 2,400

4 Grand Forks Air Force Base 1,600

5 Grand Forks School District 1,200

6 Artic Cat 800

7 City of Grand Forks 500

8 Amazon.com 500

9 LM Wind Power 400

10 J.R. Simplot 400

11 Energy & Environmental Research Center 350

12 American Crystal Sugar 303

13 Minnkota Power Cooperative 160
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PROXIMITY TO A COMPETING AIRPORT

An estimated 56 percent of the Grand Forks International Airport catchment area use Grand Forks 

International Airport. This retention rate is high considering the level of service available at the airport. 

The percentage of leaked traffic has increased from three years ago when the Airport was capturing 62% 

of its market area. Of the passengers not using the local airport, approximately half use the Fargo Airport 

located 80 miles to the south and 45 percent make a 330 mile drive to Minneapolis-St. Paul International 

Airport to access air service. The remaining 5 percent use other smaller airports in the region like Devils 

Lake and Thief River Falls. Exhibit 3.4 shows the proximity of the Fargo Airport to Grand Forks. Airport 

use by the local population is affected by a variety of factors including but not limited to: nonstop 

destinations offered, flight frequency, and lower airfares. The proposed new daily service would mitigate 

these factors providing additional nonstop destination, more flight frequency, give more direct options 

(not having to go east to go west) and have the potential to lower airfares within our market.

Figure 3.4: Proximity of Grand Forks to Fargo
Proposal Under the Small Community Air Service Development Program, Docket DOT-OST-2011-0119, August 2, 2011 

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FACTORS AFFECTING AIR SERVICE

The dominant factor affecting Grand Forks International Airport’s air service is its geographic location. 

Situated on the North Dakota-Minnesota border in the Red River Valley approximately 75 miles from the 

Canadian border, it is remote from airline hubs in the United States. The closest airline hub is 

Minneapolis, 284 miles away, a primary hub of Delta Air Lines. The next closest airline hubs are 

Milwaukee, which is relatively small, Chicago O’Hare, and Denver. Distances to these hubs are 568 

miles, 613 miles, and 672 miles, respectively. Due to the distances, a substantial aircraft investment 

would be required to serve these hubs from Grand Forks International Airport. With a modest market size 

and existing Delta Air Lines’ Minneapolis service, economically justified service to alternate hubs would 

of necessity be of limited scope since the distances involved mandate the use of regional jet equipment. 

Limited schedules normally result in higher station costs since economies of scale are unavailable. In 

today’s airline economic environment, carriers are very risk averse and small airports like Grand Forks 

International Airport must take all possible steps to incentivize airlines and lower cost to maintain and 

improve air service.

PAST AIR SERVICE DEVELOPMENT EFFORTS

For the past three years management at Grand Forks International Airport has been intensely trying to 

improve air service at the airport. Grand Forks Regional Airport Authority has attended Jumpstart, 

Networks where we visited with (United, Southwest, Delta, Sun Country, American, Republic, Frontier, 

Gulfstream and Vision Airlines), two headquarters meetings with United Airlines (2009 and 2011), a 

headquarters meeting with Delta (2009), a headquarters meeting with Frontier (2008), a phone meeting 

with SkyWest (2011) and annual meetings with Allegiant (2008, 2009, 2010 and 2011). With the 

exception of Allegiant and Delta meetings, all other efforts have been unsuccessful. We conducted a 

leakage study in 2006 that showed our leakage to Fargo and Minneapolis. Late in 2006, we were 

successful in getting a SCASD grant. Although we were not able to convince a major air carrier to add 

daily service to a major western hub, we did add two non-stop western destinations and catapulted our 

enplanements to a record level. In recent years, we have worked extremely hard increasing awareness of 

our airport by recreating our website and increase our marketing budget from $80,000 to $120,000 

annually. We have also increased our catchment area through expanded marketing efforts. As a result of 

our efforts, Grand Forks has grown over 20 percent in the past two years and is the fourth fastest growing 

non-hub airport as shown in Figure 3.5. Despite our hard work and success, Grand Forks, as the 3rd largest 

city has dropped to the 4th in air service. A recent SCASD Grant won by Minot has brought in service to 

Denver, filling their westbound services and moving them ahead of Grand Forks.
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Figure 3.5: Non-Hub Airport Passenger Growth, YE 1Q 2010 vs. YE 1Q 2011

Source: Airport Records. Includes airports that regularly report traffic stats on their website.

Airport YE 1Q '10 YE 1Q '11 % Change

Minot 65,672 105,878 61.2%

Gainesville 137,922 173,396 25.7%

Asheville 296,100 370,970 25.3%

Grand Forks 100,170 118,168 18.0%

Daytona Beach 220,992 256,268 16.0%

Fort Smith 78,007 87,300 11.9%

Bozeman 343,114 373,822 8.9%

Durango 153,917 167,370 8.7%

Eugene 356,811 387,596 8.6%

Bakersfield 103,749 111,675 7.6%

Medford 296,936 319,143 7.5%

Roanoke 298,944 320,390 7.2%

Fort Wayne 267,384 278,911 4.3%

Mobile 282,729 294,451 4.1%

Rapid City 279,243 289,464 3.7%

Bismarck 185,522 192,089 3.5%

Redmond 233,012 239,951 3.0%

Green Bay 359,032 368,516 2.6%

South Bend 308,980 316,158 2.3%

Lincoln 141,029 142,989 1.4%

Erie 123,919 124,437 0.4%

Chattanooga 300,429 295,181 -1.7%

Aspen 230,901 226,096 -2.1%

San Angelo 60,509 56,850 -6.0%

Above Total 5,225,023 5,617,069 7.5%

U.S. Industry 2.6%

Enplaned Passengers
Proposal Under the Small Community Air Service Development Program, Docket DOT-OST-2011-0119, August 2, 2011 

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4 AIR SERVICE EXISTING AND HISTORICAL

HISTORICAL AIR SERVICE

For the past 10 years, Delta Air Lines (previously Northwest Airlines) has been the only air service 

provider to Grand Forks International Airport. Between 1997 and 2008 Grand Forks International Airport 

had between four and eight flights a day to Minneapolis. This service has been provided with multiple 

types of turboprops and McDonnell Douglas DC-9 narrow body jet aircraft. Recently, Canadair Regional 

Jets have been put into service at the airport. In 2008, Allegiant initiated less than daily, nonstop, service 

to Las Vegas and then added Phoenix in 2009. Delta also increased from five to seven daily nonstop 

flights from Grand Forks to Minneapolis. The increased destinations and frequencies aided in setting an 

all-time passenger boarding record in 2010. Delta Air Lines has recently threatened and is pulling the 

seventh daily flight starting in November despite our load factors being greater than 70 percent and high 

yields. Delta Air Lines service provides critical access to the national air transportation system through 

an array of domestic and international connections. 

Figure 4.1: Grand Forks Weekly Seats, August 2000 – August 2011

Source: OAG Schedule Tapes.

AIR SERVICE BACKGROUND

As a result of Grand Forks International Airport's single daily destination service, the number of seats 

available to this market takes on added importance. Available seats in the market shows the extent of the 

catchment area's lifeline to the national air transportation system. Figure 4.1 traces the number of 

outbound seats per week available in the market from 2000 through 2011 based on airline schedule data.

From 2002 through 2004, enplanements increased at the airport to 91,746 surpassing the 2000 level. 

However, in 2005, enplanements declined to 88,204 which were below the level recorded in 2003. It is 

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
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not surprising that with fewer seats in the market and deterioration in the preferred schedule, there were 

fewer enplanements in 2005. From 2005 to 2007, growing options at other competing airports increased 

and thus caused an increase in leaking from Grand Forks. The addition of Allegiant in 2008 and 2009 

started a steep growth and stimulation of the Grand Forks market as shown in Figure 4.2, the O&D data 

CY 2000 – CY 2010.

Figure 4.2: Grand Forks Total Passengers

Source: Grand Forks Regional Airport Authority / SH&E

When we applied stimulation to the Grand Forks market with the addition of low cost, nonstop service to 

Phoenix and Las Vegas, the results were incredible. Figure 4.3 shows the change in O&D passengers 

when nonstop service is added. We feel we can produce the same results when it comes to a second, daily 

nonstop service to a major hub airport like Denver and/or Chicago.

178,776

168,398 171,169 177,229 181,520 178,173 174,483 166,735 175,247

195,554

235,190

0

50,000

100,000

150,000

200,000

250,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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Figure 4.3: Change in O&D Passengers, CY Prior vs. CY After Service Start

Note: Phoenix includes PHX and AZA. 

Source: USDOT, O&D Survey, via Database Products. 

$3,590 

$5,680 

$31,730 

$30,040 

$0 

$5,000 

$10,000 

$15,000 

$20,000 

$25,000 

$30,000 

$35,000 

Las Vegas Phoenix

CY Prior

CY Prior

780%

430%
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5 AIR SERVICE NEEDS AND DEFICIECIES

AIR SERVICE ISSUES

The Air Service Issues section provides an in-depth description of the community’s air service needs and 

deficiencies. The Air Service Issues section compares air service at Grand Forks International Airport 

with peer communities and identifies trends, including high airfares, which have stunted the growth of 

commercial air service.

Grand Forks International Airport has a multiplicity of issues that are intertwined. First, it has a primary 

catchment area population of approximately 105,741 whose only daily service is Delta Air Lines to 

Minneapolis. The net result of having only one daily commercial air service provider is high airfares, no 

alternative service options for air travelers, and the need for westbound air travelers to endure a circuitous 

routing to reach their destinations.

Equally important is the ability to retain and improve existing air service while fending off the risk of 

service reductions or, in extreme cases, the loss of service all together. Delta Air Lines, the sole daily 

scheduled air service provider at Grand Forks International Airport, due to their cost sensitivity is 

desperately seeking ways of lowering their costs. In addition, the current flight schedule offered by Delta 

Air Lines at Grand Forks International Airport is not meeting the needs of local air travelers.

Delta Air Lines daily service, with connections in Minneapolis only, is not serving our westbound 

passengers. Future changes in the international service, by Delta, through MSP will begin to impact our 

international travelers requiring them to make two stops before catching their international flight from 

other Delta international gateways, such as; Atlanta, Detroit, and New York Kennedy. This decrease in 

international service in Minneapolis will drastically impact our international traffic. The additional hub 

of Denver and/or Chicago will help us mitigate our upcoming international traffic issue.

UNDERSERVED MARKET

While appreciative of Delta Air Lines’ service, Grand Forks International Airport’s catchment area is an 

underserved market. This was recently proven by Minot’s underserved market and recent growth. Though 

it has a modest population base compared to points in the eastern half of the country, its location, relative 

isolation, and the need and propensity to travel by air render it appropriate to compare its service to 

comparably sized markets in the less populous western areas of the country. The following table 

compares Grand Forks air service with similarly sized and situated markets.

Table 5.1 clearly demonstrates that Grand Forks International Airport is underserved compared with peer 

cities and supports the need for aggressive and innovative measures to rectify the situation. Even with the 

current air service provided by Delta Air Lines and Allegiant, Grand Forks is underserved. If Delta Air 
Proposal Under the Small Community Air Service Development Program, Docket DOT-OST-2011-0119, August 2, 2011 

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Lines’ service to this remote community continues to deteriorate, as with recent announcements of cutting 

service in Devils Lake and Thief River Falls, the problem will be exacerbated.

Table 5.1: Comparison of Grand Forks and other markets

Source: OAG Schedule Tapes, August 2011.

In 2010, the Grand Forks International Airport was served with an average of 435 seats per day. A 

competing, smaller community, directly west of Grand Forks was served by 535 seats per day, an increase 

of 100 seats per day and one additional destination and one additional carrier. The competing airport to 

the south has service to six additional destinations, two additional carriers and approximately three times

as many daily seats. This puts Grand Forks International Airport at a large competitive disadvantage in

that we are drastically underserved within our market.

HIGH AIRFARES

With only a single daily local air travel option, the Grand Forks catchment area suffers under the high 

airfares like many markets where no competition exists. Overpriced markets are synonymous with 

underserved markets. The need to carry passengers 330 miles in the wrong direction, as in the case of the 

Grand Forks passengers traveling to the west and southwest, can almost guarantee overpricing.

It is no surprise that Grand Forks’ air service is overpriced. It is a single daily carrier monopoly market 

and over 25 percent of its reported origin and destination traffic must be backhauled 330 miles to 

Minneapolis before heading to their western destinations. The cost of this backhaul mileage must be built 

into the fares passengers pay. Figure 5.2 depicts the overall average fares in the top 15 central region 

markets and validates Grand Forks’ position as a high fare market. 

Seat Markets Weekly Weekly

Rank Airport Code Population Served Depts Seats

1 Bozeman, MT BZN 90,343 10 155 12,701

2 Missoula, MT MSO 108,623 10 136 9,340

3 Kalispell, MT FCA 89,624 7 99 7,056

4 Bismarck, ND BIS 106,286 5 85 5,732

5 Elmira, NY ELM 88,331 4 73 4,353

6 Grand Forks, ND GFK 97,190 3 52 3,356

7 Dubuque, IA DBQ 93,072 1 25 1,172

8 Twin Falls, ID TWF 96,558 2 30 1,140

9 Cheyenne, WY CYS 88,854 2 45 1,030

10 Brainerd, MN BRD 91,257 1 20 904

11 Pocatello, ID PIH 90,273 1 28 840
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Figure 5.2: Central Region Average Fare Comparison

Source: USDOT O&D Survey, CY 2010

As depicted in Figure 5.3, of the top 20 Grand Forks O&D markets, 16 can be conveniently served 

through Denver and 3 of the remaining 4 can be conveniently served through Chicago. The price 

difference between Grand Forks and Fargo on the top 20 markets is also provided, 16 of 20 are higher 

from Grand Forks.

Fare O&D Average

Rank Airport Code Psgrs Revenue Fare

1 Bismarck BIS 360,510 $78,009,592 $216

2 Lincoln LNK 233,780 $46,422,309 $199

3 Sioux Falls FSD 636,120 $124,371,005 $196

4 Grand Forks GFK 216,020 $42,043,238 $195

5 Duluth DLH 275,080 $52,720,340 $192

6 Des Moines DSM 1,547,010 $287,922,325 $186

7 Cedar Rapids CID 784,700 $145,684,176 $186

8 Rapid City RAP 524,000 $96,275,217 $184

9 Fargo FAR 660,780 $120,861,304 $183

10 Springfield SGF 672,820 $122,379,478 $182

11 Minneapolis MSP 14,344,390 $2,492,701,864 $174

12 Wichita ICT 1,317,960 $217,282,833 $165

13 Omaha OMA 3,769,160 $585,032,234 $155

14 St. Louis STL 9,428,780 $1,393,041,950 $148

15 Kansas City MCI 8,427,010 $1,211,798,763 $144

Total/Average 43,198,120 $7,016,546,628 $162
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Figure 5.3: Top 20 Grand Forks O&D Markets

Source: USDOT O&D Survey, CY 2010

O&D O&D Percent Average UA Via

Rank City Psgrs of Total Fare Denver

1 Las Vegas 35,150 16.3% $122 

2 Phoenix 33,620 15.6% $99 

3 Minneapolis 9,770 4.5% $198

4 Seattle/Tacoma 6,670 3.1% $215 

5 Washington 6,550 3.0% $250 

6 New York 6,500 3.0% $210 

7 Orlando 5,210 2.4% $205 

8 Dallas/Fort Worth 4,760 2.2% $185 

9 Atlanta 4,140 1.9% $243 

10 Denver 3,710 1.7% $185 

11 Los Angeles 3,610 1.7% $196 

12 Chicago 3,550 1.6% $254

13 San Francisco 3,380 1.6% $220 

14 Houston 3,080 1.4% $185 

15 Detroit 2,870 1.3% $222

16 St. Louis 2,850 1.3% $238

17 San Diego 2,830 1.3% $219 

18 Portland 2,710 1.3% $215 

19 Philadelphia 2,310 1.1% $237 

20 San Antonio 2,220 1.0% $287 

Subtotal Top 20 145,490 67.3% $167

Total 216,050 100.0% $195
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6 STRATEGIC PLAN – AIR SERVICE

ACTION PLAN

The Action Plan provides a road map of how the community plans to complete the steps necessary to 

achieve the project goals. The Action Plan includes the individual roles of the public-private partnership, 

the financial contributions of all parties involved in the project, a description of airline support for the 

plan along with a clearly defined air service plan. The Action Plan also identifies how the project will be 

sustainable and provides a description of how the community plans to continue with the project if it is not 

self-sustaining after the grant award expires.

PUBLIC-PRIVATE PARTNERSHIP

The Grand Forks Regional Airport Authority is the owner-sponsor of the Grand Forks International 

Airport. For the purpose of this application, the Grand Forks Regional Airport Authority, Grand Forks 

Region Economic Development Corporation, the City of Grand Forks, the Greater Grand Forks 

Convention and Visitors Bureau (CVB), and the Grand Forks/East Grand Forks Chamber of Commerce

have formed a public-private partnership (refer to community support letters in Appendix A). 

Collectively, the partnership is committed to completing the Action Plan outlined herein.

The primary partners involved in the execution of the public-private partnership will be the Grand Forks 

Regional Airport Authority, City of Grand Forks and the Grand Forks Region Economic Development 

Corporation (EDC). The other partners are secondary partners and have provided nominal or in-kind 

donations to the project. The Grand Forks Regional Airport Authority will execute all federal grant offers, 

process all associated reimbursement requests, and oversee grant administration. The Grand Forks Region 

Economic Development Corporation will provide leads and contact information for promoting air service 

enhancements, collect and administer private funds and conduct negotiations with airlines. The City of 

Grand Forks will provide funds from the growth fund and assist with the negotiation of the airline deal. 

The CVB will assist the airport with the marketing plan and provide marketing materials for the 

partnership. The Chamber will provide marketing and in-kind donations to the partnership. Together 

these partners form a team committed to maintaining scheduled air service at Grand Forks International 

Airport and promoting growth.
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PROJECT GOALS

The project goals are to improve air service to a broad section of the Grand Forks region, reduce the need 

for travelers to drive long distances to access air transportation and provide more competitive ticket 

prices. The Action Plan will support the university, local businesses and government employees. 

Improved access to the other hub airports will drastically increase the ability of local business and 

government to access other locations and will allow businesses from outside of Grand Forks to more 

competitively and conveniently access the Grand Forks regional area.

PROPOSED AIR SERVICE STRATEGY

To meet the project goals and accomplish the goals of this Small Community Air Service Development 

Program grant application, Grand Forks Regional Airport Authority will recruit a new air carrier to the 

Grand Forks market and improve the existing Delta Air Lines’ flight schedule. A new air carrier would 

provide more options to local air travelers, more direct routing, competition in the market and potentially 

lower airfares. The air service will provide daily nonstop service to a major hub like Denver International 

and/or Chicago O’Hare Airport. The Grand Forks International Airport is almost equidistant to both hub 

airports. United, Frontier, Southwest and American Airlines all have the ability to provide nonstop service 

to these destinations.

A support program is required to interest an air carrier in providing nonstop air service at the Grand Forks 

International Airport. Since there is limited daily air service currently in the market, this creates a barrierto-entry. With the assistance of the Small Community Air Service Development Program, the Grand 

Forks community proposes to mitigate some of the barriers-to-entry and share the risk with the air carrier.
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© 2011 21 ICF SH&E

Nonstop daily service to a new hub airport will have a significant positive impact on the Grand Forks 

economy. Improved air service to a major hub will allow Grand Forks to better compete for new 

businesses and allow existing businesses, university and government employees to significantly lower the 

amount of travel time required to perform their work. This plan will achieve the project goals by:

1. Adding service to Denver and/or Chicago

2. Providing more direct routing to lower airfares

3. Reducing the barriers-to-entry for a new air carrier including

ANAYLSIS AND FORECASTS

Although the new hub service provider(s) are yet to be determined, a financial analysis and forecast has 

been developed for Denver service to provide justification for the new hub service. Two roundtrips were 

analyzed, with a CRJ 200, to Denver. For the purposes of this grant application, the pro forma analysis for 

two roundtrips with a CRJ 200 has been summarized below. The analysis includes the operating and 

marketing assumptions listed below:

 Existing fared passengers in the GFK-Denver market will be stimulated 400% by introduction 

of nonstop service and potentially lower fares. Beyond Denver markets will be stimulated by a 

total average of 14%.

 Existing fared passengers plus the fare-stimulated passengers will be divided between the new 

service provider and Delta Air Lines based on the number of reasonable connections available 

in the market.

 Denver service will capture a share of the passengers that are driving to a competing airport 

(e.g. Fargo, Minot, Minneapolis) to travel to Denver and beyond destinations.

 New airlines fully allocated operating cost for two roundtrips for a CRJ 200 is estimated to be 

$9.8 Million annually between Grand Forks and Denver.

 Yields and loads would be similar to those competing surrounding airports.

Figure 6.1 is a summary of the new airlines’ Denver pro forma analysis for two roundtrips per day on the 

CRJ 200. Passenger projections were based on a mature market (i.e., passenger projections would be at 

100 percent on the first day of service). It is estimated that two roundtrips per day will generate over 

$11.2 million in revenue for a new air carrier. Projected earnings surpass $1.4 million. However, the new 

airline will not generate this amount of revenue or margin at start-up. Airlines typically incur losses in 

the new markets during the start-up period. However, other communities in North Dakota have proven to 

be successful from the first day of service. Grand Forks expects to have the same success but would like 

protection against a loss.
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Figure 6.1: Grand Forks – Denver Operating Forecast Summary

AIR SERVICE SUPPORT PLAN

The new proposed service will require the airline to take a larger risk to start up service in Grand Forks 

and the community wants to help to mitigate these hardships. We have struggled to get the airlines to 

come to Grand Forks as a result of these risks. Grand Forks has come up with a plan that will help to 

mitigate these startup issues by providing the airlines with a “Bring us your steel” options. They will be 

able to allow us to do the rest of the work to minimize their initial costs. Several targeted elements are 

proposed to offset the risk: a revenue guarantee, local ground handling by the existing FBO, airport 

provided ground handling equipment, an aggressive marketing campaign, and fee waivers. 

Statistic Value

GFK-DEN Forecast Daily Roundtrips 2

Annual Departures (@98.5% Completion) 1,438

Available Seats With 50 Seat CRJ's 71,905

Forecast Segment Passengers 51,811

Load Factor 72%

Operating Revenue $11,274,003

Operating Expenses $9,866,701

Profit (Loss) $1,407,302

Operating Margin 12.5%
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7 MARKETING PLAN

Over a 24-month period, a variety of marketing avenues will be used to achieve the goals of the 

applications. Americans will spend 1,555 hours watching television, 974 hours listening to radio, 195 

hours using the Internet, 175 hours reading the newspaper, and 175 hours listening to recorded music. 

Based on this, it was determined that 50 percent of the media marketing budget will be spent on television 

advertising, 30 percent on radio advertising, seven percent on Internet advertising, five percent on 

newspaper advertising, and the remaining budget on handouts, flyers, and media development assistance. 

As part of the marketing plan, the following areas were deemed important:

 Expansion of customer base

− Top-of-the-mind awareness for when customers are ready to purchase

− Constant updates to new customers, reminders to past customers and re-sales to current 

customers

− Help new customers who have never purchased before

 Development of an image and increase credibility

− Create, change or reinforce a positive image in the community

− Be recognized as a premier choice of travel for the region

− Create awareness of the Grand Forks International Airport

In order to ensure needed exposure, frequency and longevity are the two key points to an effective 

marketing plan. It is anticipated that the existing television station, WDAZ would be used to design the 

spots in accordance to the goals, objectives, and target market. Radio spots will be developed by Clear 

Channel / MidContinent since they are our current marketing management company. Whenever possible, 

the same media will be used to ensure that a consistent message reaches the target market. Paper media 

will be for specific advertising like ticket prices, flight times, and other information. Print media will go 

out in the local community, small outstate communities like Thief River Falls and Devils Lake along with 

newspapers in the Winnipeg area. The Grand Forks Regional Airport Authority staff, when possible, will 

accompany the Grand Forks Convention & Visitors Bureau and EDC to promotional conventions to 

promote the Airport.

TARGET MARKET

The target market includes a radius of almost 200 miles and 2:15 of drive time. The target market 

includes air travelers in the following categories:

 College students (ages 18-24 years)

 Military travelers (ages 18-45 years)
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 Business travelers (ages 25-65 years)

 Leisure travelers (ages 25-65 years)

 Retired travelers (ages 65 and above)

Television and computer based media will cover all age groups. Newspaper typically covers business and 

older travelers. The diversity of radio stations in Grand Forks allows specific targeting of age groups. 

MARKETING BUDGET

The Grand Forks Regional Airport Authority along with the CVB and Chamber are proving the marketing 

support for the project. The agencies will provide the following Marketing support:

Figure 7.1: 

Agency Cash Marketing Support In-Kind Marketing Support

Grand Forks Regional Airport 

Authority

$50,000 /Annually (2 

Years)

Chamber of Commerce $5,000 Advertising

Convention & Visitors Bureau $15,500 Advertising

Total $100,000 $20,500

TIMELINE

To measure the marketing efforts, passenger enplanements will be reviewed monthly. Since the goal is to 

increase enplanements, enplanements will be used as an indicator of success. Marketing efforts will begin 

at least one month prior to the start of the new service. At the end of each month, enplanements will be 

reviewed with the Grand Forks Convention & Visitors Bureau, Chamber, Clear Channel / MidContinent 

and any other media agency used by the Airport to determine the success of the efforts.

LANDING FEE WAIVER

Two years of landing fees costs directly calculated by aircraft weight are estimated at an approximate 

value of $49,000 per year for the first two years for two roundtrips per day with a CRJ-200 aircraft. This 

is a total fee waiver of $98,000. Charges for landing fees are waived for the initial 24-month period of 

new air service. This fee waiver will change depending on the type of aircraft used and the number of 

roundtrips operated.

PROJECT CONTINUATION/SUSTAINABILITY

It is expected that after the first 24 months of service, nonstop service to a major hub will be selfsustaining and profitable. If at the end of the second 12 month period (months 13-24), the service does not 
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attain a minimum of a 50 percent average load factor, Grand Forks Regional Airport Authority will seek 

private community support to create an additional six months of marketing support.

ALTERNATE PLAN

If the Grand Forks Regional Airport Authority fails to obtain Denver or O’Hare service, other carriers 

will be approached for service to a major hub. Consistent with the intent of the air service initiatives 

proposed, obtaining nonstop service to a hub airport with good connections to major destinations and 

competitive airfares is the best option for Grand Forks International Airport catchment area passengers. 
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8 STRATEGIC PLAN – IMPLEMENTATION AND FUNDING

FUNDING PLAN

The Action Plan displayed in Figure 8.1 is proof of the public private partnership. We are proposing a 

plan we feel cannot be beat. We are requesting $300,000 in US Department of Transportation to be used 

for an air service improvement program to help mitigate a portion of the airline’s risk associated with 

startup of a new non-stop service. The City of Grand Forks intends to participate in the funding of the 

program by also provide funds to help mitigate startup costs. The City will contribute $200,000 nonairport cash. The Airport Authority will contribute $100,000 in airport cash for marketing funds along 

with $10,000 for airline meetings and negotiations. The Airport Authority will also waive an additional 

$98,000 in fees for in-kind donation and provide program administration in the amount of $5,000. Other 

community organizations (EDC, CVB and Chamber) will contribute $20,500 in in-kind 

marketing/advertising and $7,500 in in-kind program administration.

Figure 8.1: Action Plan Budget

AIRPORT NON-AIRPORT

Agency

US DOT 

CASH CASH

INKIND CASHINKIND TOTAL

Airline incentive program:

 Revenue Guarantee $300,000 $200,000 $500,000

 Marketing Campaign $100,000 $20,500 $120,500

 Landing Fee Waiver (2 

Years) $98,000 $98,000

Action Plan 

Staffing/Monitoring

 Airline 

Meeting/Negotiation $10,000 $10,000

 Program Administration $5,000 $7,500 $12,500

Total $300,000 $110,000 $103,000 $200,000 $28,000 $741,000

Percent of Total Project 40% 15% 14% 27% 4% 100%

Percent of Cash Contribution 49% 18% N/A 33% N/A 100%

SCHEDULE AND MONITORING

Our proposed implementation timeline for the project assumes the Department of Transportation will 

award the Small Community Air Service Development Grant Funding by December 2011. The Airport 

Authority has been in lengthy conversations with multiple air carriers including a recent meeting with a 

specific airline. Upon announcement of funding, we will immediately contact the airline and notify them 
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of the receipt of the grant. We hope to execute a grant agreement that spells out how funds will be 

distributed by late December to early January for a spring service start date. We will utilize our consultant 

to develop the agreement. As soon as the airline is comfortable with announcing the serve and publishing 

the schedule, we will initiate the marketing plan. Since the Airport Authority is consistently marketing 

and have a marketing team, this will only take us a few weeks to initiate. Once the service begins, the 

Airport Authority will submit quarterly reports showing the airport enplanements and give status reports 

on the new service. 

ALTERNATE PLANNING

If the Airport Authority has not initiated the grant by December 31, 2012, we will provide a written report 

to the Department of Transportation explaining our air service efforts and describe in detail our plan for 

the next 12 months. We already have a plan to attend Networks and JumpStart in 2012 much like we did 

in 2011 so the airlines are aware of Grand Forks and what we have to offer.

START-UP PERIOD AND SUSTAINABILITY OF THE MARKET

The Airport will aggressively market the new service to businesses and leisure travelers in the catchment 

area. The Chamber of Commerce has already offered to introduce a new airline to their members and will 

host a business meeting specifically for them to present at. They will also send notices to all their over 

2,000 members. We plan to provide at least three to four months of dedicated marketing to the new 

service prior to the start date. We will monitor advance bookings with the help of the new air carrier. 

Based on the success of other airports in the region, we feel initiation of service to a major hub like 

Denver or O’Hare will be self-sustaining within a few months. The Grand Forks region tends to react 

much like the Minot region when the market is stimulated. We expect our new service to be as successful, 

if not more successful, than Minot’s new service.

DEFINING SUCCESS

The success of the program will be based on achieving the objective of the program. The Airport will 

continuously monitor the performance of the route. Prior to beginning the service, we will communicate

with the airline on a bi-weekly basis to monitor advanced bookings and week-over-week advanced 

bookings. In the event the advanced bookings appear to be weak, we will work with the television station 

to increase the marketing spots. 

We will measure success by an overall increase in boarding for the Authority. We have two import 

considerations for success when it comes to boardings: first, we want the new service to be successful and 

grow the enplanements at the airport; second, we want our incumbent to continue to be successful. 

Success of the project is measured by success of the existing airline and new airline service. We are 

confident that we can grow our market from 118,000 passengers to 150,000 passengers with the added 

service. Our leakage to Fargo and increased catchment area is untapped for these services. During our 
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previous grant, we stimulated to market and grew from 80,000 enplaned passengers to an all-time 

boardings record of 118,000, however, we still have a major service gap without a second major hub. 

LEGAL SPONSOR

The Grand Forks Regional Airport Authority (GFRAA) is the legal sponsor responsible for administering 

the program. The Grand Forks Regional Airport Authority is a government entity.

FINANCIAL CONTROLS

As the sponsor, GFRAA and its governing body will be the responsible parties for all fiscal matters and 

the Department’s reporting requirements. The Authority Board is established as a public government 

body. As a public entity, the Department can be assured that proper financial controls are in place to 

guarantee that the Department’s Grant will be used in accordance with any subsequent agreement. The 

Grand Forks Regional Airport Authority understands that the Grant is a reimbursable grant, meaning the 

Airport is responsible for program expenditures and will submit invoices to the Department for 

reimbursement, based on a percentage of the total grant request.
Appendix A:

Community Support
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Appendix A includes letters of support for the Grand Forks International Airport’s application to the U.S.

Department of Transportation for westbound service. Support letters were submitted by participants in the 

public-private partnership, and members of the Greater Grand Forks community. The letters of support 

are included on the following pages of this Appendix A and are listed below.

 Government

 Public-private partnership

 Businesses and Organizations


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