APPLICATION UNDER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT-OST-2014-0133 

SUMMARY INFORMATION1

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

coversheet, a completed standard form SF424 and the full application proposal on 

www.grants.gov. 

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

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

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

NUMBERING SYSTEM (DUNS) NUMBER, INCLUDING +4, EMPLOYEE IDENTIFICATION NUMBER 

(EIN) OR TAX ID.

Legal Sponsor Name: 

Name of Signatory Party for Legal Sponsor:

DUNS Number:

EIN/Tax ID:

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

1.____________________________________________________ 

2.____________________________________________________ 

3.____________________________________________________ 

4.____________________________________________________ 

C. PROVIDE THE FULL AIRPORT NAME AND 3-LETTER IATA AIRPORT CODE FOR THE 

APPLICANT(S) AIRPORT(S) (ONLY PROVIDE CODES FOR THE AIRPORT(S) THAT ARE ACTUALLY 

SEEKING SERVICE).

1. 2.

3. 4.

 

1 Note that the Summary Information does not count against the 20-page limit of the SCASDP application.
DOES THE AIRPORT SEEKING SERVICE HOLD AN AIRPORT OPERATING CERTIFICATE ISSUED BY 

THE FEDERAL AVIATION ADMINISTRATION UNDER 14 CFR PART 139? (IF “NO”, PLEASE 

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

APPLICATION UNDER PART 139 IS PENDING.) 

Yes No (explain)

______________________________________________________________________________

______________________________________________________________________________ 

D. LIST THE 2-DIGIT CONGRESSIONAL DISTRICT CODE APPLICABLE TO THE SPONSORING 

ORGANIZATION, AND IF A CONSORTIUM, TO EACH PARTICIPATING COMMUNITY.

1. 2.

3. 4.

E. APPLICANT INFORMATION: (CHECK ALL THAT APPLY) 

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. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION NAMES) 

PUBLIC PRIVATE

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.
G. PROJECT PROPOSAL:

 1. GRANT GOALS: (CHECK ALL THAT APPLY) 

Launch New Carrier Secure Additional Service Upgrade Aircraft

First Service New Route Service Restoration

Regional Service Surface Transportation Professional Services2

Other (explain below)

2. FINANCIAL TOOLS TO BE USED: (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)

Revenue 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 air 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 participating parties for 

the purchase 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. EXISTING LANDING AIDS AT LOCAL AIRPORT: 

Full ILS Outer/Middle Marker Published Instrument Approach 

Localizer Other (specify)

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

LINE DESCRIPTION SUB TOTAL TOTAL AMOUNT

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-Kind contribution

5a 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. IS THIS APPLICATION SUBJECT TO REVIEW BY AN AFFECTED STATE UNDER EXECUTIVE 

ORDER 12372 PROCESS? 

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

Process for review on (date) _____________. 

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

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

L. IS THE LEAD APPLICANT OR ANY CO-APPLICANTS DELINQUENT ON ANY FEDERAL DEBT?

(IF “YES”, PROVIDE EXPLANATION) 

No Yes (explain)

______________________________________________________________________________

______________________________________________________________________________ 

APPLICATION CHECKLIST

INCLUDED? ITEM

For Immediate Action

Determine Eligibility

New Grants.gov users must register with www.grants.gov.

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

and the Authorized Organization Representative (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

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

Application 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 administering the program.

• A motion for confidential treatment (if applicable) – see Appendix D below.
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2014 SCASDP Grant Application | Rapid City Regional Airport

Table of Contents

Introduction........................................................................................................................2

Regional Background ......................................................................................................3

Location & Isolation .......................................................................................................................................................... 3

Economy............................................................................................................................................................................ 4

Current Air Service ............................................................................................................5

Destinations & Capacity................................................................................................................................................... 5

Air Fares.............................................................................................................................................................................. 6

Air Service Deficiencies & Needs ...................................................................................9

Historical Air Service Development Efforts ..................................................................11

BHASP - Public Private Partnership................................................................................................................................. 11

Previous Grant Award..................................................................................................................................................... 12

Strategic Plan for Improved Air Service.......................................................................13

Details of Proposed Service............................................................................................................................................ 13

Goal & Objectives .......................................................................................................................................................... 14

Methods & Funding......................................................................................................................................................... 14

Timeline ............................................................................................................................................................................ 16

Summary...........................................................................................................................16

References.......................................................................................................................17

Legal Sponsor

The legal sponsor of this grant application is the City of Rapid City. Mr. Peter Girtz, Interim 

Airport Executive Director, will be the signatory party for this grant application.

Mr. Peter Girtz

Interim Airport Executive Director

City of Rapid City

4550 Terminal Road, Suite 102

Rapid City, SD 57703

605-394-4195

Community Name: Rapid City, South Dakota

Legal Sponsor: City of Rapid City

DUNS: 05-722-2119

Congressional District Code: SD-01
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2014 SCASDP Grant Application | Rapid City Regional Airport

Introduction

Rapid City is the second largest city in South Dakota, and the main trade center for 

the Black Hills region. As the gateway to the beautiful Black Hills and Mt. Rushmore 

National Memorial, Rapid City has one of the nation’s strongest economies, boasting 

an unemployment rate of only 4.1%.1 With especially strong tourism, educational, 

medical, financial, and energy services sectors, the Black Hills region is posed for 

economic growth.

Because of its isolated location, economic development in the Black Hills strongly 

depends on commercial air service to the Rapid City Regional Airport (RAP), the only 

airport with jet service for over 250 road miles. However, while enplanements have 

increased by over 16% since 2003, network airline capacity has decreased by 

approximately 15% over the same period. This results in increasingly high fares for 

local travelers – the average fare has increased 35% since 2003, and airline yields at 

Rapid City Regional Airport are much higher than comparable markets. 

Consequently, economic growth in the Black Hills is being directly impeded by the 

lack of adequate air service options.

The Rapid City Regional Airport proposes an expansion of a recently-introduced 

seasonal, Saturday-only Atlanta service to a daily, year-round, non-stop flight. The 

airport, along with the public-private Black Hills Air Service Partnership (BHASP), would 

build public awareness for this improved air service through a $500,000 strategic 

marketing initiative. This improved air service would increase capacity at RAP by 

approximately 7%, mitigating the rate at which the airport’s average fare increases, 

all in an economically self-sustaining way (after initial marketing support). Delta Air 

Lines has indicated their support for expanded RAP-ATL service.

To fund this marketing initiative, this grant proposal calls for $325,000 of DOT SCASDP 

funding and $175,000 of local, non-airport matching funds, in addition to 

approximately $25,000 in landing fee waivers provided by the airport. Funding this air 

service improvement project would help alleviate the burden of high fares paid by

travelers to and from Rapid City, and would greatly encourage economic 

development throughout the Black Hills region.
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2014 SCASDP Grant Application | Rapid City Regional Airport

Regional Background

Location & Isolation

Rapid City is located in western South Dakota along Interstate 90, the major east-west 

highway in the state, at the eastern edge of the Black Hills. At the center of a regional 

trade area that includes portions of five states, the Rapid City Regional Airport (RAP) 

serves a 100-150 mile radius catchment area of approximately 372,000 people. 

Within this catchment area, the only other airport that sees any network carrier 

service is Gillette, WY (GCC) which receives a total of only 3-5x daily Brasilia turboprop 

flights, with most travelers choosing RAP instead. In addition to serving residents of 

the area, RAP handles many inbound tourists, a cornerstone of the local economy. 

FIGURE 1: RAP CATCHMENT AREA – 100 & 150 MILE RADII INDICATED

However, Rapid City (pop 69,854)2 and its catchment area are isolated from the 

nation’s major population centers. The closest major metropolitan areas are Denver 

(390 road miles – much of this on two-lane roads) and Minneapolis (570 road miles), 

which results in road travel to/from the region being arduous and often unfeasible.
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2014 SCASDP Grant Application | Rapid City Regional Airport

Additionally, South Dakota and Wyoming are the only two states in the 

continental U.S. without Amtrak service3. This leaves commercial air service as the 

only practical connection between the Rapid City area and most of the nation, and 

a critical component of the regional economy. Consequently, the current lack of 

adequate air transportation options is directly impeding growth of the local economy. 

Improved air service is needed in order to foster the continued growth of the area’s 

tourism, governmental, educational, medical, financial, and energy sectors.

Economy

Rapid City has a demonstrably strong regional economy, compared to the rest of 

the nation, boasting a 4.1% unemployment rate as of April 20144. Recently ranked 

the 9th Best Small City for Business and Careers by Forbes magazine, Rapid City is the 

second-largest metropolitan area in South Dakota - CNBC’s 2013 #1 State for Business.

Tourism is a critical component of the economy throughout the entire RAP catchment 

area, and is an especially important industry sector to consider when evaluating the 

need for air service. As the tourism industry depends on the availability of suitable 

connections for inbound travelers, inadequate air service negatively impacts this key 

economic sector the most. Key facts about the area’s tourism economy:

 1 in 11 jobs in South Dakota depends on travel and tourism5

 An average of $3.8 million daily in direct spending is generated by tourism in SD6

 19.41% of all state and local tax revenue comes from tourism-related activity7

 4.16 million total visitors among the six National Park Service sites within the RAP 

catchment area in 2013, including Mt. Rushmore Nat’l Memorial8

The Rapid City area has a diverse and thriving 

economy, with a variety of other industries 

alongside tourism, many of which depend on air 

service connectivity. Other key economic 

sectors in the RAP catchment area include:

(1) governmental services, notably Ellsworth AFB; 

(2)_educational institutions, including the South 

Dakota School of Mines and Black Hills State 

University; (3) medical services – Regional Health 

is headquartered in Rapid City, and is one of the 

region’s biggest employers; (4) financial services; 

and (5) energy services – the Black Hills are becoming a professional energy services 

hub for the nearby Bakken oil field of North Dakota.

TABLE 1: TOP EMPLOYERS IN THE 

RAPID CITY AREA

Ellsworth AFB 4,115

Regional Health 3,602

Federal Gov’t 2,912

RC School District 1,755

State of SD 1,217

Walmart/Sam’s Club 1,029

SD National Guard 1,025

Source: Rapid City Econ. Development
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2014 SCASDP Grant Application | Rapid City Regional Airport

Current Air Service

Destinations & Capacity

Table 2 below illustrates RAP’s air service for the period ending February 2014. As can 

be seen, RAP is very reliant upon United Airlines service to Denver (DEN) and Delta Air 

Lines service to Minneapolis-St. Paul (MSP). This has historically been the case. Delta 

also serves Salt Lake City (SLC), while United also serves Chicago O’Hare (ORD) and, 

during the peak summer season, Houston Intercontinental (IAH). 

TABLE 2: RAP PROFILE – CURRENT NON-STOP SERVICE TRAFFIC INFO - FEB ‘13-FEB ‘14

RAP’s other network carrier service is on American Eagle, who flies RAP to Dallas Fort 

Worth. RAP also has Allegiant Airlines service to both Phoenix-Mesa and Las Vegas. 

As mentioned previously, RAP has historically relied upon United Airlines service to DEN

and Delta Air Lines service to MSP, although more recently Delta has been pulling 

back service, as United has grown moderately. American Eagle also started service 

to DFW in 2010. The charts in Figure 2 illustrate capacity trends among these three 

network airlines at RAP and overall RAP airline revenue trends.

As can be seen in Figure 2(a), network airline capacity has been declining marginally 

over the past decade. In 2004, the combined UA/DL generated almost 950 daily 

departing seats. Today there are approximately 800 daily departing seats on the 

combined (3) network airlines. In particular, DL has reduced capacity by almost 50% 

over the past decade. 
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2014 SCASDP Grant Application | Rapid City Regional Airport

(A) (B)

FIGURE 2: (A) NETWORK AIRLINE CAPACITY AT RAP VS. TIME

(B) AIRLINE REVENUE AT RAP VS. TIME

While network airline capacity has declined, airline revenue has grown sharply, up 

from about $34 million in 2003 to a little over $60 million currently. This translates to a 

6% compounded annual growth rate (CAGR) over this time period, which is well in 

the excess of the rate of inflation or U.S. travel in general. The airline revenue growth 

in conjunction with less airline capacity has resulted in sharply higher unit revenues 

for airlines serving RAP. 

Air Fares

As noted earlier, over the past decade, RAP’s network carrier capacity has declined 

marginally (although overall capacity is higher, thanks to Allegiant Airlines). At the 

same time, airline revenue has increased sharply, thanks in part to higher air fares. 

Figure 3 (on the next page) shows that RAP’s average paid air fare has increased a 

little over 20% since CY 2000, although if going back to 2003, the average fare paid 

has increased over 35%. Since just 2009, average fares at RAP have increased over 

30%.
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2014 SCASDP Grant Application | Rapid City Regional Airport

Figure 4 illustrates a regression analysis of the top 300 U.S airports (based upon O&D 

passenger volume). The regression takes into account the average passenger 

itinerary (the length of trip in miles) and passenger yield (the average fare paid per 

mile). It is for all markets with an average under 1,000 miles.

FIGURE 4: REGRESSION ANALYSIS OF PASSENGER YIELD VS. PASSENGER ITINERARY LENGTH

RAP

FIGURE 3: AVERAGE ROUND TRIP FARES AT RAP INDEXED TO 2000
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2014 SCASDP Grant Application | Rapid City Regional Airport

While there are always other contributing factors beyond passenger haul, a 

person’s trip haul (miles) is a good fit by itself, as the resulting R-squared of .7415 

illustrates. RAP’s average yield is $0.24 (24 cents) and the average passenger haul is 

915 miles. 

As can be seen, RAP’s yield is well above what would be explained by the 

passenger’s average trip length alone. Based upon trip length (itinerary), RAP’s yield 

of $0.24 is well above the predicted yield of $0.20. This would indicate that RAP’s air 

fares are higher than would be predicted by passenger haul alone – by about 20%. 

Put another way, RAP’s average round-trip air fare of $440 (pre-tax & fees) is about 

$88 higher than for a comparable market. 

Table 3 illustrates a similar point. Those markets closest to RAP from a passenger haul 

perspective are illustrated. As can be seen, RAP’s yield/average fare is generally well 

above other comparable markets – typically by a wide margin. The only comparable 

markets with higher fares are two much smaller markets (Bakersfield and Brownsville) 

and an oil boom town (Williston, ND). Otherwise, RAP is well above other comparable 

markets.

Passenger Avg One-way

Market Haul Yield Fare

Colorado Springs 899 0.21 $187

Wichita 901 0.21 $192

Omaha 903 0.20 $176

White Plains 904 0.20 $183

Key West 908 0.21 $186

Brownsville 909 0.26 $237

Orlando 910 0.15 $139

Peoria 911 0.19 $175

Minneapolis 914 0.21 $191

Rapid City 915 0.24 $221

Vail 923 0.22 $205

Bakersfield 923 0.27 $246

Laredo 927 0.20 $187

Williston 929 0.37 $341

San Antonio 929 0.19 $179

TABLE 3: FARE/YIELD COMPARISON BETWEEN 

RAP AND SIMILAR MARKETS
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2014 SCASDP Grant Application | Rapid City Regional Airport

Air Service Deficiencies & Needs

For the purpose of this grant application, the Rapid City Regional Airport (RAP) is 

targeting Delta Air Lines service to Atlanta (ATL). Delta is actively supporting this effort, 

see attached letter.

Service to ATL is critical to the State of South Dakota’s tourism efforts, particularly as it 

pertains to areas nearby Rapid City (Mount Rushmore, Black Hills, etc.), as well as the 

general economic development initiatives of the Black Hills region.

Historically and to some degree still today, South Dakota has been heavily reliant 

upon traffic from the upper Midwest to support tourism. In particular, South Dakota is

supported by drive traffic from the nearby states of North Dakota, Iowa, Nebraska, 

Wyoming, Montana & particularly Minnesota. Drive traffic from as far away as 

Chicago is not unusual. 

Over time, as RAP’s air service and passenger traffic has grown, so has the reach of 

its tourism efforts. Delta has served the Minneapolis-St. Paul (MSP)-RAP market for 

many years, carrying traffic from throughout the U.S., although with a heavy emphasis 

from the eastern half of the U.S. Likewise, United has served the Denver (DEN)-RAP 

market for a similar time period. This service has catered primarily to passengers 

coming from the western region of the U.S. 

In April of 2010, American Eagle (AA) started Dallas Fort Worth (DFW) service to RAP. 

That service has been successful, with AA generating year-round Load Factors in the 

80% range, with good O&D demand to DFW, with 26 daily passengers traveling 

between RAP-DFW, as noted by the table below.

A key component of the AA service to RAP was that it generated a new market 

(tourism) segment for RAP. The majority of AA’s traffic base came from the south 

central U.S., primarily from Texas. With earlier United service to Denver and Delta 

service to Minneapolis-St. Paul, the Black Hills region was well-served to most of the 

U.S., with one exception: the southeast U.S. 

A little over 10% of RAP’s traffic base travels on 2+ connections. The majority of this 

traffic base is coming from the southeast U.S. As is typical for itineraries with a higher 

# of connections, the average fare of this traffic base is also relatively high. The 

average fare paid for double connecting passengers to RAP is almost $800 for CY 
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2014 SCASDP Grant Application | Rapid City Regional Airport

2013 (net of taxes/fees)9. The majority of this traffic base is flying on Delta Air 

Lines, connecting over its ATL and then MSP hubs. 

The ATL service would add a key component to the state of South Dakota’s tourism 

efforts, particularly as it pertains to Mount Rushmore, Deadwood & the Black Hills

region. Specifically this would address the following:

1) Connectivity. The ATL hub for Delta is bigger than MSP & DTW – combined. The 

amount of connectivity to the region, particularly to southeast U.S. markets that 

in many cases have to double connect today would be huge for the region’s 

tourism. 

2) ATL O&D market. Currently the ATL market generates about 11 daily 

passengers at an average one-way fare of $255 (net of taxes & fees). With 

nonstop service, it is likely that this demand would increase sharply (possibly 

exceeding 20 daily passengers over time) and the average fare paid would 

also decline moderately. 

3) Peak travel periods. During RAP’s 

peak summer travel period, airline 

Load Factors in excess of 90% is the 

norm. This service would take some of 

that pressure off and generate 

capacity for passenger demand that 

is likely being constrained today –

directly by the lack of seat capacity 

or the indirect effect that the lack of 

seat capacity is having on air fares. 

4) International. Besides connectivity to 

the southeast U.S., ATL service would 

also open up RAP to direct service to 

Europe, Africa and the Middle East. 

This is also another key tourism 

segment being targeted by the state 

of South Dakota and would be helpful 

to build brand awareness of the South 

Dakota tourism product around the 

world.

TABLE 4: TOP O&D MARKETS AT RAP
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2014 SCASDP Grant Application | Rapid City Regional Airport

In addition to the tourism industry, all four needs listed above apply to most 

other local industries as well. The added benefit of a daily, year-round flight (as 

opposed to weekly seasonal service) is even greater in terms of developing business 

ties and encouraging high-value trade between the Black Hills region and the 

southeast, as a reliable, frequent connection on an established airline provides a 

stable connection upon which an increasing number of business travelers can rely.

In summary, ATL service would be a critical addition to RAP’s air service and would 

generate significant benefits to the Black Hills’ economy. Tourism, educational, 

medical and other economic sectors would benefit through additional connecting 

opportunities to the southeast U.S. and international community. In addition, this new 

service would generate additional demand from the local ATL O&D market. Delta Air 

Lines agrees, as is illustrated in their attached letter of support.

Historical Air Service Development Efforts

BHASP - Public Private Partnership

The Rapid City Regional Airport has access to a 

unique community asset that is an extremely 

robust, permanent, public-private partnership 

completely dedicated to retaining and 

improving local air service: The Black Hills Air 

Service Partnership.

The Black Hills Air Service Partnership (BHASP) is a 

committee of the Rapid City Chamber of 

Commerce whose goal is to enhance 

commercial air service at Rapid City Regional 

Airport by fostering partnerships with airlines and 

other area communities to develop new 

markets and quality service with competitive fares. Since its inception, the BHASP has 

leveraged the financial and intellectual capital of numerous area organizations, 

including local businesses, educational institutions, and governmental entities to 

accomplish its mission.

TABLE 5: KEY BHASP MEMBERS

Public

RC Chamber of Commerce

Rapid City Regional Airport

Rapid City CVB

Black Hills, Badlands, & Lks

SD School of Mines & Tech

Private

Black Hills Corp

BH Central Reservations

Eagle Sales of the Black Hills
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2014 SCASDP Grant Application | Rapid City Regional Airport

While administering this grant, the Rapid City Regional Airport would be able 

to rely on the enormous community support and pooled resources afforded by the 

BHASP in order to allocate grant funds much more efficiently and effectively.

The BHASP has been continuously working with the airport on air service development, 

the past three years being no exception. Some initiatives include funding annual trips 

to the Airport Council International’s JumpStart conference, where important airline 

contacts are made, and Allegiant Air’s annual airports conference, as well as 

facilitating meetings between airline representatives and local business and 

government leaders. As a collective result of these air service development initiatives, 

RAP has recently secured AA service to DFW, as well as seasonal UA service to IAH.

Previous Grant Award

In 2002, the pilot year of the SCASD program, the Rapid City Regional Airport was 

awarded a grant in the amount of $1,400,000 over a three year period for air service 

development. The State of South Dakota and the BHASP provided an additional 

$1,400,000 in matching funds strengthening the effects of the grant on air service in 

the region. The focus of the grant was on marketing the Black Hills as a vacation 

destination. 

The 2002 grant was successfully used to attract Frontier and Allegiant Airlines, add 

direct flights to Chicago, Phoenix and Las Vegas and add capacity to Denver, 

Minneapolis and Salt Lake. Allegiant service and the non-stop flights to Chicago, 

Phoenix, and Las Vegas continue to this day, although Frontier ceased service to 

Denver due to its bankruptcy and other economic considerations after the recent 

recession. 

In addition to the public awareness generated directly by the 2002 grant’s 

marketing dollars, it sparked a global interest in the Black Hills, bringing in significant 

international publicity even after the grant award expired. “Since 2005, the 

campaign begun by the [2002 grant] has directly generated more than $424 million 

in measurable free publicity from media coverage around the world.”

10

The only common element to both the 2002 & 2014 grants are some of the general 

marketing strategies which were proven successful by the results of the 2002 grant. 

The grants have little else in common as a different, specific market is now being 

targeted with the 2014 grant, and preliminary airline support has been secured in 

advance.
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2014 SCASDP Grant Application | Rapid City Regional Airport

Strategic Plan for Improved Air Service

Details of Proposed Service

The proposed daily, year-round, non-stop RAPATL service would be operated by a regional 

affiliate on behalf of Delta Air Lines utilizing 65 

seat Bombardier CRJ-700 equipment in a 9F/56Y 

seating configuration. Assuming a 98% flight 

completion rate (resulting in 357 annual flights), 

this would add 23,205 seats annually to the RAP 

market. This represents a 6.7% increase in total 

annual capacity at RAP, and a 7.6% increase in 

annual network carrier capacity. Additionally, 

this route would represent an even higher 

proportional capacity increase during the off-season (Oct-Apr), which makes the

flight even more desirable from a local economic development perspective.

Beginning June 8, 2014, Delta Air Lines introduced Saturday-only, peak summer 

season service on the RAP-ATL route using a CRJ-700. In the first summer season this 

route has been operating, select flights have been up-gauged to a 76 seat CRJ-900, 

and Delta recently announced daily RAP-ATL service over the 2014 winter holiday 

season (12/20-1/4) utilizing a CRJ-70011. These up-gauges and holiday flight additions 

so soon after the first flight indicate that the Rapid City - Atlanta market has plenty of 

untapped potential demand that Delta didn’t initially anticipate. Therefore, by 

building public awareness with a $500,000 strategic marketing initiative, the Rapid 

City Regional Airport anticipates being able to increase the O&D and (to a lesser 

extent) connecting traffic enough in order to make a year-round, daily flight selfsustaining and economically justifiable. The Rapid City Regional Airport will further 

support this proposed service by waiving landing fees for a period of two years to any 

airline willing to provide daily, year-round, non-stop service to Atlanta.

TABLE 6: SUMMARY OF 

PROPOSED ATLANTA SERVICE

Route RAP-ATL

Distance 1230 sm

Equipment CRJ 700

Seats 65

Frequency 1x Daily

Annual Seats* 23,205

RAP Capacity Incr. 6.7%

* Assuming 98% Completion
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2014 SCASDP Grant Application | Rapid City Regional Airport

Goal & Objectives

The primary goal of this air service development initiative is to secure economically 

self-sustaining, daily, year-round, non-stop service to Atlanta. After reviewing 

different options, it was determined that the proposed service outlined is the way to 

achieve this goal that is most economical and has the highest chance of success.

In order to achieve this goal, the Rapid City Regional Airport, in association with the 

Black Hills Air Service Partnership, has developed a strategic plan. The main 

objectives of this plan are listed below:

1) Develop a new service agreement with Delta Air Lines for proposed service 

detailed previously in order for said service to begin by Q2 2015

2) Utilize marketing tools to increase O&D passenger traffic on RAP-ATL by 75% by

one year from start of service

3) Utilize marketing tools to build public awareness and usage of the ATL service 

to a level that makes it economically self-sustaining for the foreseeable future

The Rapid City Regional Airport anticipates that the plan described above will be 

successful by implementing it using the methods described in the following section. 

However, if market conditions at the time of grant implementation are such that daily 

Atlanta service is no longer a feasible goal, then the alternative goal of this initiative 

is to expand the frequency of the current summer-peak Atlanta service and extend

the season over which the flight operates by utilizing similar marketing measures to 

those described in the methods section.

Methods & Funding

The Rapid City Regional Airport will coordinate with members of the Black Hills Air 

Service Partnership, such as the RC Convention and Visitors Bureau and the Black Hills, 

Badlands, and Lakes Association in devising and executing marketing campaigns 

that maximize public awareness of the Atlanta service over the duration of the 

project timeline.
15

2014 SCASDP Grant Application | Rapid City Regional Airport

Some potential marketing devices that may be utilized include:

 Digital media advertising - SD & GA

 Print media advertising - SD & GA

 Conferences/Trade Shows/Groups

 Marketing to Travel Agents

 Marketing Leisure Packages

Using the marketing devices listed above, the Black Hills Air Service Partnership will 

coordinate a comprehensive marketing campaign targeting the Atlanta region as 

well as outbound travelers in the Black Hills. Possible specific efforts may include:

sponsoring travel shows in key markets; developing brand “evangelists” through 

familiarization tours designed to educate travel specialists, bloggers, and meeting 

planners from the new target markets; creating competitive travel packages for 

inbound traffic; or creating cooperative marketing arrangements with Delta.

The Rapid City Regional Airport and the Black Hills Air Service Partnership have been 

able to successfully leverage these methods in the past to raise public awareness of 

new air service, as noted in the Previous Grant Award section.

The proposed funding plan for this project includes a combination of $175,000 in local 

non-airport funds and $325,000 in SCASD grant funds, with an additional estimated 

$25,000 in landing fee waivers contributed by the airport (based on the proposed 

service levels described). The non-airport local funding is being contributed by the 

Black Hills Vision fund, a local economic development fund derived from local sales 

taxes. A summary of the funding plan including approximate percentage 

breakdowns is shown in Table 7.

TABLE 7: SUMMARY OF PROPOSED FUNDING 

PLAN

DOT SCASD Grant $325,000 61.9%

BH Vision Fund

(non-airport local) $175,000 33.3%

Airport fee waivers* $25,000 4.8%

Total $525,000

*Estimated value
16

2014 SCASDP Grant Application | Rapid City Regional Airport

Timeline

Table 8 outlines the detailed project completion timeline. Although the anticipated 

project duration is only 30 months (from 1/15 to 6/17), the Rapid City Regional Airport 

would like to request a full 3-year grant duration through Q4 2017, in the event of 

unforeseen difficulties in initially establishing the desired service.

TABLE 8: PROJECT IMPLEMENTATION TIMELINE

Project Milestone Date

SCASDP Grant Award Q3 2014

DOT Grant Agreement Q3 2014

Meet with target airline regarding proposed service Q4 2014

Mutual acceptance of new service agreement Q4 2014

Complete initial planning of marketing efforts Q4 2014

Announce expanded service Q4 2014

Begin service marketing initiatives Q1 2015

First grant status report to DOT Q1 2015

Inaugural flight - expanded service Q2 2015

Continue initial marketing efforts, adjust as needed based 

on service performance Q2 2015 – Q2 2016

Quarterly grant status reports to DOT Q2 2015 – Q1 2017

Landing fee waivers end on or before Q2 2017

Project completion, final report to DOT Q2 2017

Close DOT grant on or before Q2 2017

Summary

As the most populous city in western South Dakota, Rapid City is the major gateway 

to the Black Hills region, home to numerous state and national parks. With a focus on 

tourism, and medical, financial, educational and energy services, Rapid City has one 

of the nation’s strongest economies, boasting an unemployment rate of only 4.1%.12

However, because of its isolated location, the regional economy needs convenient, 

reliable, and affordable air service in order to continue growth. As a result of network 

capacity diminishing, while enplanements increase, fares at Rapid City Regional 

Airport have climbed to levels not seen since before airline deregulation. As a 

consequence, economic growth in the Black Hills is hampered by the lack of 

adequate air service options.
17

2014 SCASDP Grant Application | Rapid City Regional Airport

The air service development initiative laid out in this proposal would help 

alleviate the current problem of high fares at Rapid City Regional Airport, and provide 

the Black Hills region with a new non-stop flight option that would grow the local 

economy by providing connectivity to the biggest airline hub in the world, 

encouraging additional tourism and trade on a national and even global level.

The Rapid City Regional Airport requests $325,000 in SCASDP grant funds to implement 

this initiative, which would be matched by $175,000 in local non-airport cash funding, 

as well as $25,000 in landing fee waivers. By securing Delta’s support for expanded 

service in advance, and by coordinating marketing efforts with members of the Black 

Hills Air Service Partnership, this initiative has a high probability of successfully 

accomplishing the following: 

 Providing material benefits to a broad section of the traveling public

 Reducing the rate of growth of airfares at the Rapid City Regional Airport

 Increasing air service capacity in an economically sustainable way

 Expanding economic development opportunities for the Black Hills region

For of all of the reasons outlined in this proposal, the Rapid City Regional Airport and 

the Black Hills Air Service Partnership, on behalf of the larger Black Hills community, 

respectfully request the Department of Transportation to give this application all due 

consideration.

References

1 US Bureau of Labor Statistics

2 US Census Bureau 2012 estimate

3 Amtrak State Fact Sheets, available at www.amtrak.com

4 US Bureau of Labor Statistics

5 SD Department of Tourism 2014 Annual Report

6 SD Department of Tourism 2014 Annual Report

7 SD Department of Tourism 2014 Annual Report

8 National Park Service 2013 Annual Visitation Report

9 Diio airline intelligence database

10 TDG Communications – BHASP Case Study available at 

http://www.tdgcommunications.com/what-we-do/case-studies/black-hills-air-service-task-force-case-study.html

11 Rapid City Regional Airport press releases

12 US Bureau of Labor Statistics

This grant application package was primarily authored by Alex Bachwich of the South Dakota School of 

Mines and Technology and Mike Bown of Trillion Aviation on behalf of the Rapid City Regional Airport and 

the Black Hills Air Service Partnership

 











730 E. Watertown Street, Suite 102  Rapid City SD 57701  605-394-1706

www.bhfreebusinesshelp.org

July 30, 2014

Brooke Chapman

Associate Director, Small Community Air Service Development Program

Office of Aviation Analysis

US Department of Transportation

1200 New Jersey Ave, SE

Washington, DC 20590

Subject: Rapid City Regional Airport Grant Application 

Small Community Air Service Development Program – Docket ID: DOT-OST-2014-0113

Dear Ms. Chapman,

This is a letter of support for two organizations that I represent. Both Black Hills Council 

of Local Governments and Black Hills Community Economic Development represent the 

community and economic development interest of the western South Dakota. Air 

Service is a critical need in the area for long term growth and prosperity.

As the consolidation of our national carriers, the region has seen a decrease in air 

service. As Rapid City Regional Airport serves a large rural area in not just western 

South Dakota but also northwest Nebraska and eastern Wyoming, it is critical that new 

markets are available to the residents of the region. The addition of the Atlanta hub

increases our connectivity to the national and international air transportation system.

The SCASDP grant would enable Rapid City to attract expanded, year-round service to 

Atlanta. 

The region has grown and is in need of increased air service, and receiving a SCASDP 

grant would provide Rapid City with an excellent opportunity to grow air service in the 

region. I respectfully ask that you give the Rapid City Regional Airport’s SCASDP grant 

application your highest consideration.

Sincerely,

Blaise Emerson

Executive Director

Black Hills Council of Local Governments

Black Hill Community Economic Development, Inc.
PO Box 747 Rapid City, South Dakota 57709-0747 • Phone: 605-343-1744 • Fax: 605-343-6550

Web: www.rapidcitychamber.com• E-mail: info@rapidcitychamber.com

July 30, 2014

Ms. Brooke Chapman

Associate Director, Small Community Air Service Development Program

Office of Aviation Analysis

U.S. Department of Transportation

1200 New Jersey Ave, SE

Washington, DC 20590

Subject: Rapid City Regional Airport Grant Application

Small Community Air Service Development Program - Docket ID: DOT-OST-2014-0113

Dear Ms Chapman:

Black Hills Air Service Partnership (BHASP) is a committee of the Rapid City Area Chamber of 

Commerce whose goal is to enhance commercial air service at the Rapid City Regional Airport 

(RAP) by fostering partnerships with airlines and other area communities to develop new markets 

and quality service with competitive fares. Since its inception, BHASP has leveraged the financial 

and intellectual capital of numerous area organizations, including Black Hills Vision, to accomplish 

its mission.

As you are probably aware, Rapid City Regional Airport is the largest non-hub airport for 350 miles 

of the Black Hills of South Dakota and Wyoming. Improving air service and reducing fares are 

essential to the Black Hills economy. BHASP was the recipient for a U.S. Department of 

Transportation grant in 2002 which was matched with 50% local funds to develop an innovative 

marketing plan for the Northern Great Plains Region. This award resulted in the development of a 

consortium of various public and private entities which has not been accomplished before.

BHASP is excited to be applying for a Small Community Air Service Development (SCASD) grant 

through your office to fund a $500,000 air service development project. This project’s main 

objective is to support daily, year-round, non-stop service to Atlanta on Delta Airlines via a variety 

of coordinated marketing efforts. 

While we know the demand for these grants funds will be enormous, we would encourage you to 

consider the need to continue and expand this valuable program. The commitment from this area 

to provide $175,000 matching funds reflects our dedication to this effort and should be strongly 

considered when compared to other requests for funding.
The Black Hills Air Service Partnership’s program is unique and successful, and we hope you 

agree that it should be funded again.

Thank you for your time and consideration.

Sincerely,

Linda Rabe, IOM, CCE

President & CEO

Rapid City Area Chamber of Commerce