Flagler College, formerly the Ponce de Leon Hotel, in St. Augustine, Florida



## Sponsor: St. Augustine

- St. Johns County Airport Authority

Northeast Florida Regional Airport Edward Wuellner, AAE, Executive Director

Dun & Brad street DUNS Number : 14

- 664

- 2389 Tax Identification Number: 59

- 1163738 Congres sional District Code: FL

- 07 

# Northeast Florida Regional Airport St. Augustine, Florida

Application Under the Small Community Air Service Development Program

For Marketing and Advertising Support

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## TABLE OF CONTENTS

INTRODUCTORY LETTERS

................................ ................................ ................................ ......................... 3
SUMM ARY INFORMATION (SOLICITATION APPENDIX C)

................................ ................................ ...... 5 INTRODUCTION

................................ ................................ ................................ ................................ ....... 8
AIR SERVICE OVERVIEW

................................ ................................ ................................ ......................... 9

Catchment Area

................................ ................................ ................................ ................................ ........................ 9 Existing Air Service

................................ ................................ ................................ ................................ .................... 10 Skybus at Northeast Florida Regional Airport

................................ ................................ ................................ ...... 11


### AIR SERVICE NEEDS AND DEFICIENCIES

................................ ................................ .............................. 12
Tourism Industry

................................ ................................ ................................ ................................ ......................... 12 St. Johns County Economic B ase

................................ ................................ ................................ .......................... 13 Capacity Reductions in Northeast Florida

................................ ................................ ................................ .......... 14 The High Cost of Air Service in Northeast Florida

................................ ................................ ............................... 14


### STRATEGIC PLAN FOR NEW AIR SERVICE

................................ ................................ ............................. 16
Strategic Plan for Use of Marketing Funds

................................ ................................ ................................ ........... 17 Air S ervice Development Efforts

................................ ................................ ................................ ............................ 18 Public

- Private Partnerships

................................ ................................ ................................ ................................ ...... 18 Funding Plan

................................ ................................ ................................ ................................ .............................. 19 Implementation Timeline

................................ ................................ ................................ ................................ ........ 19 Route to Sustainability

................................ ................................ ................................ ................................ ............. 20 Monitoring Grant Progress

................................ ................................ ................................ ................................ ...... 20 Legal Sponsor

................................ ................................ ................................ ................................ ............................ 21


### SUMMARY

................................ ................................ ................................ ................................ ............. 22St. Augustine

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### INTRODUCTORY LETTERSSt. Augustine

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### SUMMARY INFORMATION (SOLICITATION APPENDIX C )

Small Community Air Service Development Program Summary Information: Docket DOT

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### A. Applicant Information (Ch eck All That Apply)

N ot a Consortium Interstate Consortium Intrastate Consortium Community now receives EAS subsidy Community (or Consortium memb er) previously received a Small Community Grant If previous recipient: D ate of Grant:

__ ____________ Expiration date of Grant: _______________ Federal Funds Requested: ________________________________________________________________ Carrier(s) Servic e Obtained: ______________________________________________________________ Destination(s) Served: ____________________________________________________________________



### B. Public/Private Partnership (List Organization Names)

Public:

1. St. Augustine

– St. Johns County Airport Authority 2. City of St. Augustine

Private:

1. St. Johns County Tourism Development Council 2. St. Augustine, Ponte Vedra, and the Beaches Visitors and Convention Bureau 3. St. Johns County Economic Development Council 4. Galaxy Aviation 5. Professio nal Golfers Association (PGA)



### C. Project Proposal (Check All That Apply)

Marketing Upgrade Aircraft New Route
Travel Bank Service Restoration Subsidy Surface Transportation Regional Service Revenue Guarantee Launch New Carrier Start

- Up Cost Offset F irst Service Study Secure Additional Service Other ( explain below )St. Augustine

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### D. Existing Landing Aids at Airport

Full ILS Outer/Middle Marker Published Instrument Approach
Localizer Other:



### E. Project Cost : Do Not Enter Text in Shaded Area

Line Description Sub Total Total Amount 1 Federal amount requested $ 250,000 2 State cash financial contribution $

- Local cash financial contribution 3a Airport cash funds $ 100,000 3b Non

- airport cash funds $ 150,000 3 Total local cash funds (3a+3b) $ 250,000 4 TOTAL CASH FUND ING (1+2+3) $ 500,000 In

- Kind contribution 5a Airport In

- Kind contribution** $

- 5b Other In

- Kind contribution** $

- 5 TOTAL IN

- KIND CONTRIBUTION (5a+5b) $

- 6 TOTAL PR OJECT COST (4+6) $ 500,000



### F. In

- Kind Contributions **

For Funs in lines 5a (Airport In

- Kind Contribution) and 5b (Other In

- Kind Contribution), please des c ribe the source(s) of fund(s) for each.St. Augustine

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### G. Is Application Subject to Revi ew by State Under Executive Order 12372 Process?

a. This application was made available to the s tate under the Executive Order 12372
Process for review on (date)

_ _____ _____. b. Program is subject to E.O. 12372, bu t has not been selected by the state for review. c. Program is not covered by E.O. 12372



### H. Is Applicant Delinquent on any Federal Debt? (If “Yes”, Provide Explanation)

No Yes

__________

_____________________________________________________________________________

_______________________________________________________________________________________St. Augustine

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### INTRODUCTION

Northeast Florida stretches from the Georgia border along the Atlantic C oast south to nearly Daytona Beach and some 40 miles inland at any point. The six

- county area has a population of over 1.4 million and contains
well

- known metro areas such as Jacksonville and St. Augustine.

The area’s tourism attractions and venues are pe rhaps less well

- known than those of some other Florida areas but are, nevertheless, popular and annual local tourism visit days are measured in the millions.

Although the primary air carrier airport is located north of Jacksonville, t he bulk of the region ’s population and
almost its entire tourism related infrastructure is located south of downtown Jacksonville and south and east of the St. Johns River with a center of gravity at St. Augustine. If the airline industry were to come today, for the first
time , to Northeast Florida, the first air service would certainly be at Northeast Florida Regional Airport.

The Northeast Florida Regional Airport is a unique aviation facility. It is convenient to the major highways of the
area and features a well

- designed a nd ultra

- low

- cost airline terminal facility. On the field are extensive aviation related industrial facilities that contribute significant rental income to the airport and thus lower the facility

related cost burdens of scheduled air service, while contrib uting substantially to the local economy.

The Airport had scheduled air service briefly in the last decade. Low

- cost carrier SkyBus Airlines flew from Northeast Florida Regional Airport from July 2007 through April 2008. During eight mont hs of service Northeast Florida Regional was a traffic and revenue star in the fledgling SkyBus route system. Over 54,000 enplanements and 108,000 O&D passengers used the Airport during the brief period that SkyBus provided service. Despite Skybus’ succes s in Northeast Florida, its larger business plan was not prepared for the impending challenges in the airline industry and service ceased in April 2008. However, the Airport and its surrounding communities
discovered that air service at Northeast Fl orida Regional can generate significant traffic and economic benefit.
For that reason
, the Airport and its supporters have continued to work to recruit various airlines to consider the enormous potential of this market.

To entice air carrier operations, t he Airport and o ne of its Fixed Based Operators have developed a complete
and low

- cost ground handling service package, including above and below wing and fuel

- into

- plane service. This ground handling service package is available to any qualified airline a nd the attractive rate structure is long

- term. In fact, operating costs for the airlines would be so low, the airport does not offer an introductorySt. Augustine

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- 0 069 9 incentive package. The Airport has in place today the infrastructure to handle several hundred thousand

an nual passengers with airport related costs well below those at Jacksonville or Daytona Beach.

The Airport and its partners need marketing dollars to aid prospective airlines in effectively marketing the Northeast Florida Regional Airport as a gateway to t he region . This Grant application requests $ 250 ,000 in Department funding matched by $ 150 ,000 in local non

- airport funds and $ 100 ,000 in local Airport funds. The total of $ 500 ,000 will give the Airport the final tool it needs to successfully recruit new ai r service to St. Augustine

. The new service will lower the cost of air travel to Northeast Florida, improve access to the region for tourists, residents, and businesses, and thus confer a significant local economic benefit. This modest Grant funding
reques t is entirely consistent with the purpose of the Grant Program and Department funds will enable new air service that will have a significant positive local economic impact.



### AIR SERVICE OVERVIEW

Catchment Area

Northeast Florida Re gional Airport (UST) is situated less than five miles from Historic St. Augustine and less than twenty miles
from Ponte Vedra. There are nearly 1.5 million people within a sixty minute drive of the airport. This includes substantial portions of Jacksonville and its suburbs, primarily south and east of the St. Johns River

.

The St. Johns River is a defining characteristic of Northeast Florida ’s geography. There are only a few crossing points for the river, including several downtown bridges, and crossings
on the I

- 295 beltway . Since the primary air service airport is north of the river, Northeast Florida Regional Airport is often closer and easier to access, even for residents of Jacksonville. In addition, the majority of the region ’ s to urism assets
, including golf courses and hotels are south of the r iver

. Exhibit 1: Drive Time Map for Northeast Florida Regional Airport Source: Sixel Consulting Group Source: Sixel Consulting GroupSt. Augustine

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- 0 069 10 Exhibit 2 : Northeast Florida Air Service Route Map Source: OAG / UBM Aviation Schedules 

### Existing Air Service

Jacksonville International Airport (JAX) is the primary air carrier airport for Northeast Flo r ida

. The airport hosts all four legacy airline systems as well as low fare carriers Southwest/AirTran and jetBlue. Together, the six airline systems offer 28 nonstop destinations from JAX. Daytona Beach International A irport (DAB) is
located at the southern edge of Northeast
Florida. It hosts flights on Delta and US Airways to their Atlanta and Charlotte hubs.

Over 40% of Northeast Florida commercial flights in 2012 are scheduled to be operated with regional jet aircr aft, providing over 25% of the regional seat capacity. These aircraft have much higher costs per seat mile based on structural issues, including fuel costs and profit margins paid to regional jet providers. In order to maintain profitability, airlines

mu st pass these higher costs along to consumers, which in Northeast Florida manifests as higher yields.

The Northeast Florida market is dominated by Southwest and Delta. Southwest is the market share leader at Jacksonville International Airport. Delta’s s ervices at Daytona Beach, however, propel it to the regional market share leader. US Airways is the third largest carrier on Florida’s Northeast coast

. The region’s lowest cost provider, AirTran Airways, has been acquired by Southwest and will so on disappear. Today’s lowest cost airlines like Allegiant, Spirit, and Frontier do not have any operations in the region. Exhibit 3 : Northeast Florida Air Carrier Market Share Source: U.S. DOT Data, Table DB1ASt. Augustine

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### Skybus at Northeast Florida Regional Airport

Skybus Airlines of Columbus, Ohio
, first took to the skies in May 2007. Service to Nor theast Florida Regional Airport began in July, becoming the airport’s first commercial airline. The carrier found quick success in
Northeast Florida with initial load factors reaching 82% by November . By January 2008, services were increased
with an addi tional flight s and new flights from Portsmouth, New Hampshire
, and Greensboro, North Carolina. Customers responded as service was added from these substantial markets without nonstop flights

.

Unfortunately, the start

- up carrier was ill

- p repared for the economic environment it found itself in.
M anagement was not ready for the oil spike of 2008 which saw oil trading at over $147 per barrel. The company’s rapid growth plan drove it to attempt markets elsewhere in its network that were unsu stainable As
all of these issues came together, the company ceased operations In April 2008. Media coverage of the carrier’s operational problems in its hometown of Columbus likely led to the poor performance in February 2008. Exhibit 4 : Map of Skybus Flights from

Northeast Florida Regional Airport Source: U.S. DOT Data, T

- 100

Exhibit 5 : Skybus Statistics from Northeast Florida Regional Airport Source: U.S. DOT Data, T

- 100 Note: Skybus did not file statistics beyond February 2008St. Augustine

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### AIR SERVIC E NEEDS AND DEFICIENCIES

Tourism Industry

Tourism is a major industry in the Northeast Florida region. The St. Augustine area alone hosts 3.4 million annual overnight visitors per year. Annual regional tourism spending of an estimated $634
million creat es and supports over 11,000 local jobs.

The coastal area of Northeast Florida is marketed as Florida’s First Coast due to its historical significance. In fact, Florida tourism was born in St. Augustine in the late 1800’s with the arrival of Standard
Oil m ogul Henry Flagler. Flagler created the Florida East Coast Railroad and developed destination hotels along its path, bringing the first major influx of tourists to Florida.

The First Coast has more tourism attractions than any other Florida coastal ar ea:

 Historic sites including Historic St. Augustine, the oldest European settlement in North America (1565).
 Numerous sites that mark the progress of St. Augustine from the Spanish settlement period to the birth of
Florida tourism to the conflicts of the A merican Civil Rights movement in the 1960s.
 The area is home to t wo PGA golf tour events, the World Golf Hall of Fame, the World Golf Village a nd fourteen public golf courses, and over 1,300 holes.
 Over 90 marinas and over 10,000 locally based motor and sa il boats.
 Miles of uncrowded beaches and world renowned deep sea or fresh water fishing.

To host all these visitors, St. Johns County alone has over 6,000 total hotel rooms, and a similar number of other properties such as time

- shares and rental homes

. Ac cording to the University of Florida GeoPlan Center, there are over 27,000 hotel rooms within an hour drive of Northeast Florida Regional Airport . There is great diversity in the local lodging infrastructure from internationally known resorts such as Ponte Vedra or the Marriott at Sawgrass
, to camping and trailer sites. For the year ended October 2011, the average visitor stay in the region was 5.39 days, the hotel Average Daily Rate was $ 100.45 and the local occupancy rate was 56

. 7 %.St. Augustine

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- 0 069 13 This vast local tour ism industry competes for tourism visitors and tourism dollars with other warm weather beach locations and venues in Florida, on the North American continent, and in the Caribbean. But the region competes with a distinct and significant disadvantage; a lac k of leisure oriented air service and resulting high average fares that drive some
tourism visitors to other destinations. In fact, this was noted in the March 2010 St. Johns County Destination Master Plan which indicates that the lack of air service is p erceived by meeting planners as a barrier for considering the First Coast. The report goes on to acknowledge that the current conference business and facilities that are available rely primarily on drive traffic.



### St. Johns County Economic Base

While to urism is a very large and important part of the Northeast Florida economy, it is not the only sector that would benefit from improved air service. The St. Augustine area is home to a number of diverse businesses with diverse travel needs, including:

 The P GA Tour employs 620 at is headquarters in Ponte Vedra.
 The ATP World Tour offices are located in
Ponte Vedra.
 Northrup Grumman employs over 1,000 people at an aircraft manufacturing, upgrade, and overhaul facility located at the Northeast Florida Regional Airport.
 MDI Holdings is a Nocatee

- based Healthcare Information Systems specialist

.  Rulon International manufactures specialized acoustical wood panels for walls and ceilings.
 Carlisle Interconnect Technologies is a St. Augustine specialty manufa cturer of high

- performance wire
and cable.
 Locally

- based Ring Power sells and repairs heavy machinery from Caterpillar with 550 local employees.
 Hydro Aluminum of Linthicum Heights , Maryland
, operates a tubing fabrication facility in St. Augustine.St. Augustine

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### Capacit y Reductions in Northeast Florida

While First Coast air service might be described as adequate by some , the fact is that air service has declined substantially. In 2010, capacity by the airlines has been reduced by 5% versus 2000. The seat capacity re duction in Northeast Florida is greater than the 2% reduction nationally during the same decade. However, local population increased 18% , about 8 points greater than the national rate, leading to a decline in annual airline seats per capita of just under 20% in Northeast Florida

. This compares to a national reduction in airline seats per capita of 10%. In other words, Northeast Florida has lost airline seats at a per

ca p ita rate twice that of the national average. A symptom of this capacity loss is the fact that
, since 2008, nonstop flights to twelve cities from Northeast
Florida have been eliminated from airline schedules.



### The High Cost of Air Service in Northeast Florida

The average one

- way domestic fare from Jacksonville in 2011 was $163, an increa se of 12% versus the previous year. Daytona Beach’s average one

- way domestic fare was $155 and similarly increased 7%
versus 2010.

When compared to other airports in Florida, average fares in Northeast Florida are higher than comparable airports. Fare s from Jacksonville are 7% higher than Sarasota/Bradenton, 11% higher than Fort Myers and Tampa, and 18% higher than Orlando and Fort
Lauderdale. Average domestic fares in Jacksonville are double or more than the ultra

- low cost carrier airports at Sanford, St. Petersburg, and Punta Gorda. Exhibit 6 : Growth Rate of Airline Seats Nationally and from Northeast Florida Source: U.S. DOT Data, T

- 100 and U.S. Cen sus Bureau

Exhibit 7 : Destinations Which Have Lost Nonstop

Flights from Northeast Florida Source: U.S. DOT Data, T

- 100 BureauSt. Augustine

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- 0 069 15 Yield, which is the price passengers pay per mile traveled, from Jacksonv ille increased by 12% year

- over

year to 15.9 cents per mile. Yield from Daytona Beach incased 8% from 2010 to 14.3 cents per mile.

When compared to the rest of Florida, yield in Northeast Florida is much more comparable to
much smaller communities lik e Pensacola and Key West instead of its peer group. In fact, Jacksonville’s yield is 2 0% greater than Tampa, 28% greater than Fort Myers, 28% greater than Orlando , and 39% greater than Fort Lauderdale

. Yield from Jacksonville is over 60% higher than the low

- cost carrier dominated airports at Sanford, St. Petersburg, and
Punta Gorda. Exhibit 8 : Average One

- Way Fare from Florida Airports Source: U.S. DOT Data, Table DB1A

Exhibit 9 : Average Passenger Y ield from Florida Airports Source: U.S. DOT Data, Table DB1ASt. Augustine

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### STRATEGIC PLAN FOR NEW AIR SERVICE

Northeast Florida Regional Airport believes that in order to successfully recruit air service, we need to meet the
needs of th ree differ ent business models:

 Small Jet Legacy Carriers for access to major carrier hubs and networks.
 Ultra

- low cost carriers which can provide point

- to

- point service in certain types of city

- pairs.
 Regional / niche carriers which can provide specialized intra

- sta te air service.

Although the three business models are very different, they have demands that are similar to those of a small airport like Northeast Florida Regional. All of these carriers demand a low

- cost, yet efficient airport, an ultra

convenient ter minal building, and appropriately scaled amenities. Thus, the Airport’s guiding strategic principals are:
 Develop a state

- of

- art airport facility that can offer ultra

- low costs for airlines, give passengers a pleasant transit experience and that is conven ient to all of Northeast Florida.
 Build a partnership with on

- field Ground Handling and Fueling companies to develop a complete, low

cost ground handling package, including above and below wing service and low

- cost fueling service.
 Bring together the local tourism industry and economic development organizations via their associations, and reach agreement that potential new carriers will be able to reach commercial terms
on the third

- party sale of Northeast Florida hotel/motel rooms, rental cars and other le isure activities via the carrier’s ancillary service offerings.
 Recruit carriers aggressively ; listen to their needs and concerns and respond as possible.
 Build a significant marketing and advertising fund for use in partnership with carriers to support their market entry and address their number one concern : how to market new air service to Northeast Florida, which has not traditionally had such service.

All of the above principals are in place except for the development of a significant marketing and a dvertising fund for use in partnership with carriers to address their concern about adequate marketing of new Northeast
Florida air service.

The Airport seeks to put that last principal in place via this Grant application for marketing funding.St. Augustine

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### Strategi c Plan for Use of Marketing Funds

The exact marketing strategy to be employed will not be determined until after the airport and carrier have reached an agreement. However, the marketing plan will be tailored to the type of service recruited:

 Small Jet Legacy Carriers will demand significant marketing in our region to inform residents that service from Northeast Florida Regional Airport is available, affordable, and convenient. We would also envision a targeted campaign to the legacy carrier’s frequent flyers who travel to our area and a targeted campaign to ensure local business es are able to use the new air service.
 Ultra low

- cost carriers are likely to treat Northeast Florida primarily as a destination. Marketing efforts in
these cases will be focuse d on the origin market. In most cases, the carrier will also be working with the origin airport

. We envision these marketing efforts to be collaborative efforts.
 Regional / niche carriers will require a combination of marketing efforts within our region and the origin region of each route. However, because these tend to be niche routes with a specific customer base in mind, the marketing campaign would be tailored to the expected passenger base.

While the details of the exact media to be use d cannot be k nown at this time, we expect marketing campaigns to include;

 Radio promotions and ticket/hotel give

- a

- ways

.  Billboards emphasizing the destination and carrier in addition to the airport.
 E

- mail and postal mailings to targeted potential customers

.  Online ad vertising tied to internet search engines and online travel agencies key to searches about
travel to Northeast Florida or the markets served with our new air service.
 Grass roots efforts in our community designed to maximize local exposure

.  Close coordinat ion with existing destination marketing campaigns outside of this program
, organized by other organizations such as the St. Augustine , Ponte Vedra, and the Beaches Visitors and Convention Bureau, the St. Johns County Tourism Development Council, or the St. Johns County Chamber of
Commerce

.St. Augustine

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### Air Service Development Efforts

The Northeast Florida Regional Airport has been committed to the development of air service since efforts to support Skybus began in 2007. Even though the Skybus was not successful,
th e airport, with the support of our community, has had an unwavering commitment to restarting commercial air service. In the past five years, we have had over 40 meetings with airline executives. Airport representatives have attended industry conferences every year, even setting up a display booth and sponsoring events at air service development conferences. This year, we are preparing to hire a director of business development for the airport whose responsibilities will
include a focus on air service dev elopment.



### Public

- Private Partnership s

The Airport’s government and private sector partners in air service development include:

 The City of St. Augustine

– The oldest city in North America is an active supporter of the a irport.

 St Johns County Tourism D evelopment Council

– The Mission Statement of the TDC is t o enhance, advertise and promote St. Johns County as a desirable travel destination, attracting visitors and encouraging visitor expenditures across all segments of the County’s tourism and travel i ndustry.
 Professional Golfers Association

– The PGA hosts at least two events annually in the St. Augustine area and is a strong advocate for local air service. The World Golf Hall of Fame is also located in the area

.  St. Augustine

– Ponte Vedra & Beaches Visitors & Convention Bureau (VCB)

- The mission of the VCB is to brand and market the destination globally as a premier leisure, convention and business destination; to communicate the area's assets and inherent benefits; and to facilitate the opportunity for partners to promote their individual businesses within that framework.

 Galaxy Aviation

– Galaxy is a full

- service Fixed Based Operator with six locations nationwide.
 St. Johns County Economic Development Council

– The Council has 304 members and its m ission is to bring new business into the community and to help existing business and industry to prosper. Exhibit 10 : Meetings with Airlines 2008

- 2012 Source: Northeast Florida Regional AirportSt. Augustine

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### Funding Plan

Northeast Florida Regional Airport is requesting grant funds in the
amount of $250,000 from the Department . This funding will be
matched dollar

- for

- dollar by the airport operator, St. Augustine

– St. Johns County Airport Authority and
the St. Augustine, Ponte Vedra,
and the Beaches Visitors and Convention Bureau . Thus the
federal government is being asked to fund only 50% of the $500,000 marketing project.

While we cannot know the exact expenditure rate for Grant funding, we believe that Grant supported marketing efforts will be distributed throughout the year 2012 and 2013, as appropriate for optimum support of
new air service. Thus
, the Airport requests that its Grant have at least a two

- year term.



### Implementation Timeline

Applications for Small Community Air Service Development Grants are due to the department on June 11
, 2012. It is anticipated that awards will be granted in the Third Quarter of 2012. Based
upon that timeline, the airport has developed the timeline displayed in Exhibit 11. The
timeline is tentative and will be driven by numerous items outside the airp orts control, Exhibit 11 : Project Cost Source: Appendix C, Item E

Exhibit 1 2 : Implementation DeadlineSt. Augustine

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. The airport will take all actions necessary on its part to remain on the timeline illustrated.



### Route to Sustainability

Marketing and promotion alone cannot make a new air service su ccessful, nor be its downfall. However, the Airport and all Grant stakeholders recognize that marketing and promotion are one essential element of a
successful new air service.

The Airport has a comprehensive airport facility and ground handling package that complements the marketing and promotional efforts this Grant will support. These two key elements, combined with substantial local funding, a passionate commitme nt to make air service happen at Northeast Florida Regional Airport
, and a commitment to c losely monitor new route performance, suggest that new air service at Northeast Florida Regional will be successful

. We will also be prepared to make mid

- course adjustments in strategy and tactics, as needed. The Airport and its local partners understand the need for success and will commit additional resources, as needed, to ensure that success.

While the shutdown of SkyBus in 2008 was not in any way the fault or responsibility of the Airport, that sudden end of a popular air service is still well rememb ered. The Airport and its local air service development partners have no intention of allowing a repeat of the SkyBus shutdown in late March of 2008.



### Monitoring Grant Progres s

The airport will monitor performance of the grant and submi t quarterly summaries to the Department.
Performance measurements will include:

 Status and activity related to air service recruitment efforts.
 Communications with the air carrier to review advanced bookings.
 Monitoring of Tourist Development Council web site and inquiry activity for trends.
 Review and Monitoring of Department data sources including T

- 100 and Table DB1A.St. Augustine

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### Legal Sponsor

The St. Augustine

– St. Johns County Airport Authority, operator of Northeast Florida Regional Airport, is the legal
spo nsor for this project. Executive Director Edward Wuellner, AAE
, will be responsible for the administration of the grant. O versight will include (but not be limited to):

 Liaison with the Department, including the timely filing of all quarterly Grant stat us update reports
 Conclusion of all agreements with prospective airlines to serve the Airport
 Coordination and oversight of the implementation of Grant

- supported marketing and promotional
efforts
 Oversight and coordination of the regular performance review s of Grant

- supported efforts to ensure
program success  Approval of all expenditures of Grant funding, in close coordination with the Department and Grant program stakeholders

The contact information for the Legal Sponsor is:

Northeast Florida Regional Ai rport Edward R. Wuellner, AAE Executive Director 4796 U.S. 1, North, St. Augustine, Florida 32095
904.209.0090 erw@sgj

- airport.comSt. Augustine

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### SUMMARY

If the Airline Industry were to first come to Northeast Florida today, the first flights would not be at Jackson ville International or Daytona Beach, but at Northeast Florida Regional, an ultra

- low

- cost airport perfectly located in the center of the region’s population and tourist attractions.

But the Airline Industry is already in Northeast Florida and at the afor ementioned Jacksonville and Daytona
Beach facilities. The result of that is air service distant from the true destination of tourist visitors and air service priced significantly higher than at other Florida airports like Orlando, Tampa, Fort Myers or Fort Lauderdale.

In this Grant proposal the Northeast Florida Regional Airport is seeking a modest amount of Grant funding (with a healthy local cash match) for the marketing and promotion of new air service at the airport.

The Airport already has in place a n innovative and creative package of airport facility and ground handling
services that will allow new entrant carriers to operate at much lower costs than other regional airports

.

The need for low

- fare air service at Northeast Florida Regional is clear:

 Northeast Florida air travelers using Jacksonville or Daytona Beach pay significantly higher average fares and exceedingly higher yields than do passengers using other airports in Florida.
 In Northeast Florida, tourism is a critical aspect of the economy. Tourist lodging and leisure venues in the region must compete for tourist visitors and dollars with other parts of the state. High airfares and limited nonstop low fare service is costing northeast Florida tourist visitors and dollars.
 Skybus served Northe ast Florida Regional for less than a year. Yet this essentially unbranded startup airline generated over 107,000 O&D passengers in the few months it provided service at the airport. The brief service does prove that “fly it and they will come” applies to this Airport.
 The Airport and its local partners have a well

- structured plan to ensure that new low

- fare air service that
is introduced will be successful.

This Grant application is both modest in its funding need and precise in its focus. It is precisely the type of innovative and creative air service development effort the SCASD program was intended to support.

The Airport and its partners thank the Department for its consideration of this application.

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ST. AUGUSTINE PONTE VEDRA

ON FLORIDA'S HISTORIC COAST

Aloha Ley Associate Director Small Community Air Service Development Program United States Department of Transportation 1200 New Jersey Avenue SE Washington, DC 20590

June 11, 2012

RE: Support of Northeast Florida Regional Airport Application for Funding Under the Department of Transportation Small Community Air Service Development Program
Dear Ms. Ley:
Representing the tourism industry of Florida's Historic Coast, St. Johns County, Florida, I am writing to express my support of Northeast Florida Regional Airport's FY 2012 Small Community Air Service Development grant submission requesting federal funding to support marketing efforts at the airport.
The Northeast Florida Regional Airport near St. Augustine previously had air service for a very short period with Sky Bus. The air service provided was unique to our region and competitive with connecting services offered at nearby airports. It also increased valuable overnight visitation at our destination which drove lodging, attraction, restaurant and retail expenditures. We believe that with the right airline partners, the airport can reinvigorate air service on our region once again. The Visitors & Convention Bureau is committed to assisting in every way possible including supplementing Federal marketing grants.
Our region has a unique mix of industry, history, and tourism found nowhere else than "America's Oldest City." Adding air service to our community's portfolio will help us compete for jobs and tourism alike. We have room to grow and air service over our airport will play a vital role in that growth.
The Small Community Air Service Development Program offers the opportunity to partner with the Northeast Florida Regional Airport to develop non-stop service to St. Augustine. We believe this Grant is essential in bringing new service to our local airport. Thank you for your consideration of this grant application.

Richard Goldman, executive director St. Augustine, Ponte Vedra & The Beaches Visitors & Convention Bureau


## 29 OLD MISSION AVENUE • ST. AUGUSTINE, FLORIDA 32084 904-829-1711 • FAX 904-829-6149 • WWW.FLORIDASHISTORICCOAST.COM