Santa Maria Public Airport

Santa Maria, California

Legal sponsor: Santa Maria Public Airport District

DUNS: 085917870

Tax ID #:95-2283152

Congressional District Code: CA-23

Contact: Chris Hastert

General Manager 

3217 Terminal Drive

Santa Maria, CA 93455 

Phone: (805) 922-1726 

Fax: (805) 922-0677

chastert@santamariaairport.com

APPLICATION UNDER THE SMALL COMMUNITY 

AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT-OST-2012-0069


Prepared by

TABLE OF CONTENTS

PAGE

Application Highlights............................................................1

Higher Than Average Fares..............................................................................1

Community Cost Contribution.........................................................................1

Public-Private Partnership.................................................................................1

Material Benefits.............................................................................................1

Use of Funds in a Timely Fashion .....................................................................1

Air Service Environment ........................................................2

Airport Catchment Area ..................................................................................2

Business Community .......................................................................................3

Educational Institutions ...................................................................................4

Tourism...........................................................................................................4

Air Service – Existing and Historical ......................................5

Existing Air Service ..........................................................................................5

Historical Air Service ........................................................................................5

Air Service Needs and Deficiencies.........................................8

Major Origin/Destination Markets Not Served Adequately ................................8

Higher than Average Fares...............................................................................9

Strategic Plan – Air Service ..................................................11

Project Goals.................................................................................................11

Proposed Air Service......................................................................................11

Airline Participation .......................................................................................12

Detailed Market Analysis ...............................................................................12

Alternate Plan ...............................................................................................13

Previous Grant Recipient - New Project and Goals..........................................13

Strategic Plan – Implementation and Funding......................14

Public-Private Partnership...............................................................................14

Incentive and Support Plan ............................................................................14

Project Continuation and Sustainability..........................................................17

Strategic Plan Funding...................................................................................17

Schedule and Monitoring .....................................................18

Schedule and Milestones...............................................................................18

Monitoring Program......................................................................................19

Appendix A. Community Support .........................................20

Public-Private Partnership...............................................................................20

Government..................................................................................................20

Business and Community Support .................................................................20
THIS SECTION CONTAINS:

• Project goals

• Description of the Strategic 

Plan

• Highlights of the grant 

application

1

APPLICATION

HIGHLIGHTS

his Small Community Air Service Development Program grant application for the Santa Maria Public Airport meets 

the criteria of Docket DOT-OST-2012-0069. Santa Maria Public Airport District, the legal sponsor, is requesting 

$490,000 in federal assistance to implement a $730,000 air service initiative. The project goal is to obtain nonstop

service to a major airline’s hub that is located east of Santa Maria. The Strategic Plan, SkyWest Airlines/United Express

Denver service, will achieve the project’s goal.

HIGHER THAN AVERAGE FARES

Santa Maria is underserved and excessively overpriced, 

particularly to eastbound markets. With eastbound

connections limited to United Express Los Angeles

service, the options for traveling east are inconvenient 

and expensive. Santa Maria travelers pay a significantly 

higher average fare than other nearby regional airports 

causing diversion of almost 100,000 origin and 

destination passengers annually from the local airport.

On average, Santa Maria’s airfares (excluding Allegiant 

Air’s Las Vegas fares) are almost double the California 

and national averages.

COMMUNITY COST CONTRIBUTION

To support this air service initiative, the Santa Maria 

Public Airport District and community will fund 33

percent of the proposed $730,000 Strategic Plan. Nonairport revenue sources will fund 20 percent 

($130,000) of the $665,000 cash requirement. This is 

a very strong commitment by the local community to 

acquire new eastbound hub service.

PUBLIC-PRIVATE PARTNERSHIP

The Santa Maria Public Airport District, Santa Maria 

Valley Chamber of Commerce & Visitor & Convention 

Bureau and Santa Maria Economic Development 

Commission have formed a public-private partnership.

This partnership has been successful in past air service 

efforts and is dedicated to the success of this initiative.

MATERIAL BENEFITS

Nonstop eastbound air service will benefit a broad 

segment of the traveling public, including businesses, 

educational institutions and other enterprises. Within 

50 miles of the Airport, approximately 500,000 people 

reside in the area. Importantly, Vandenberg Air 

Force Base and its’ associated aerospace 

contractors employ over 8,600 people and has a 

high demand for Denver service because of its’

many aerospace partners that are located in and 

around Denver. The growing population of North 

Santa Barbara County, the US aerospace industry and 

many businesses in the region desperately need the 

proposed service. Denver has been the area’s number 

one market outside of California for many years. There 

is no other service improvement that would mean as 

much to the region as nonstop service to Denver.

USE OF FUNDS IN A TIMELY FASHION

All of the elements are in place to ensure the timely use 

of grant funds. A detailed market analysis has been 

completed for SkyWest/United service to Denver.

Preliminary discussions with SkyWest/United have

already taken place. It is reasonable to expect that this 

service could be implemented in spring/summer 2013.

T
2

THIS SECTION CONTAINS:

Description of the Santa Maria 

community in relation to air 

service to demonstrate the 

benefit to a broad segment of 

the traveling public.

AIR SERVICE 

ENVIRONMENT

he Santa Maria Public Airport is in need of additional air service. Santa Maria’s connecting hub service is limited to 

United Express Los Angeles service with the 30-seat Embraer 120 turboprop aircraft. Vandenberg Air Force Base’s 

proximity to Santa Maria Public Airport and the solid and growing business and population base in the Santa Maria

area is driving local demand for air service improvements. This section reflects the broad segment of the traveling public, 

including businesses, educational institutions and other enterprises that will benefit from the proposed Strategic Plan.

AIRPORT CATCHMENT AREA

Santa Maria Public Airport is located on the Central Coast of California in the city of Santa Maria. The Airport is located in 

northern Santa Barbara County, about 35 miles south of the city of San Luis Obispo, 70 miles north of the city of Santa 

Barbara and 170 miles north of Los Angeles. The Airport’s catchment area, shown in orange in Exhibit 2.1, has a 

population of over 235,000. Within 50 miles of the Airport the population is almost 500,000.

From 2010 to 2020, Santa Barbara 

County is forecasted to grow by 10

percent. The fastest growing city in 

Santa Barbara County, the “All 

America City” of Santa Maria, stands 

at the center of that growth. Santa 

Maria is the growth region of the 

Central California Coast. In the last 

10 years, Santa Maria’s population 

grew over 20 percent. Santa Maria’s 

scenic terrain, moderate climate and 

quality of life have fueled the 

dramatic migration of new residents 

and businesses seeking affordable 

locations in California. Additionally, 

growth has been boosted by Santa 

Maria’s proximity to and the 

increased activity at Vandenberg Air 

Force Base, the West Coast home of 

the National Aeronautics and Space 

Administration’s (NASA) 

space program.

T

EXHIBIT 2.1 AIRPORT CATCHMENT AREA 
SECTION 2. AIR SERVICE ENVIRONMENT

3

BUSINESS COMMUNITY

Like other California communities, Santa Maria has evolved 

from an agricultural background to a diversified economy that 

includes aerospace/military, education, medical, technology 

and service sectors. What was once a slow-paced farming 

community is now a dynamic regional center. The Santa Maria 

Valley has a burgeoning agricultural industry, as well as 

connections with aerospace due to its proximity to 

Vandenberg Air Force Base. Other significant manufacturing 

includes wire and cable production, medical manufacturing, 

high-tech communications, dental products manufacturing 

and a myriad of other industrial products. Table 2.1 provides 

a list of top employers in the Santa Maria area. The following 

highlights a few of the businesses that would benefit from 

nonstop eastbound service:

• Quintron Systems does business with many 

government and defense locations across the county. 

Several of these are located in Colorado.

• Hardy Diagnostics has significant eastbound travel 

needs with a new manufacturing facility in 

Dayton, Ohio.

• Diani Companies is a family of businesses providing 

a full range of construction services, predominantly 

military, with offices in California and Florida. 

Eastbound hub service would greatly enhance their 

travel efficiency and productivity.

Vandenberg Air Force Base presents the ideal anchor for companies specializing in space technologies. At present, 

Vandenberg Air Force Base and its’ associated aerospace contractors play an important role in the region’s economic 

engine collectively employing over 8,600 people. Because Vandenberg is the West Coast home of the US space 

program, there are a number of aerospace firms including Lockheed Martin, Boeing, C& D Aerospace and 

InDyne located either on the base or in the community. Significantly, the Air Force Base along with its aerospace 

contractors have direct links with sister companies and/or other aerospace contractors that are located in the 

Denver/Colorado Springs area.

Agriculture is the number one industry in the Santa Maria Valley, and new technologies are emerging. The Windset Farms 

project, which features the first hydroponic farming in the region, will have four large, 32-acre greenhouses with 5.7 

million square feet in total. The project will create over 240 jobs. This will open the door for further technological 

advancements in agriculture and create new business opportunities in Santa Maria.

With over 1,300 employees, Marian Medical Center is one of the largest employers in the Santa Maria Valley. Marian 

Medical Center’s 216,000 square foot, 188-room hospital expansion will open additional opportunities for medical 

related businesses, service and medical products. A number of companies in Santa Maria specialize in manufacturing 

medical and health products. The expansion was completed in 2011. 

TABLE 2.1 INSTITUTIONS

EMPLOYER INDUSTRY

Vandenberg Air Force Base

Defense and 

Aerospace

Santa Maria School District Public Education

Marian Medical Center Health Care

Allan Hancock College Public Education

City of Santa Maria Public Administration

Orcutt Union School District Public Education

Betteravia Farms Agriculture

C&D Zodiac Aerospace Manufacturing

Den-Mat Corporation Manufacturing

VTC Nonprofit

Source: Santa Maria Chamber of Commerce & Visitor & 

Convention Bureau
SECTION 2. AIR SERVICE ENVIRONMENT

4

EDUCATIONAL INSTITUTIONS

Santa Maria is home to the campus of Allan Hancock 

Community College. The College serves all of northern Santa 

Barbara County and parts of San Luis Obispo and Ventura 

counties at campuses in Santa Maria, Lompoc, Solvang and 

Vandenberg Air Force Base. Over 1,300 courses are offered in 

over 100 fields of study via nine academic departments. Allan 

Hancock Community College, with nearly 1,000 employees, is 

one of the five largest employers in northern Santa Barbara 

County. The Santa Maria area also has several university 

extension programs including: Chapman University Academic 

Centers, La Verne University and Embry-Riddle 

Aeronautical University.

TOURISM

Santa Maria’s backdrop of coastline and wine country provide 

unlimited year-round recreation and leisure opportunities.

Tourism is a significant industry due to Santa Maria’s central

location between the Sierra Madres Mountains and Pacific 

Ocean and the wide selection of Central Coast activities.

Wineries provide a large amount of revenue for the region, 

both in wine production and through tourism. The Santa 

Maria Wine Trail is very popular among visitors. Other 

attractions include:

• Pismo Beach

• Hearst Castle

• Foxen Canyon Wine Trail

• Solvang

• La Purisima Mission

• Guadalupe-Nipomo Dunes Complex
5

THIS SECTION CONTAINS:

• Description of existing air 

service

• Synopsis of historical air 

service

• Description of air service 

AIR SERVICE – EXISTING 

AND HISTORICAL

he following is a current and historical look at air service 

at Santa Maria Public Airport. Carriers providing service, 

service frequency, and nonstop destinations offered are 

shown. Also included in this section is a discussion of past air 

service development efforts and extenuating factors that have 

affected air service.

EXISTING AIR SERVICE

Santa Maria Public Airport’s only access to the national air 

transportation system via a hub is provided by United Express 

to Los Angeles International Airport (Table 3.1). United 

Express, operated by SkyWest Airlines, provides an average of four daily departures (only two to three on Saturday) with 

the 30-seat Embraer 120 turboprop aircraft. The Airport also has Allegiant Air point-to-point service to Las Vegas and, 

starting in November 2012, Honolulu, HI. Allegiant provides three to four weekly departures with the 150-seat MD-80 

narrow-body jet. While Allegiant’s point-to-point service is highly valued by the Santa Maria community, the lack of 

adequate access to a connecting hub other than Los Angeles is a significant deficiency in Santa Maria’s service.

TABLE 3.1 EXISTING AIR SERVICE

NONSTOP 

DESTINATION

MARKETING 

CARRIER AIRCRAFT

WEEKLY 

DEPARTURES

WEEKLY 

SEATS

Las Vegas, NV Allegiant Air MD-80 

(150-seat jet) 4 600

Los Angeles, CA United Express EMB-120 

(30-seat turboprop) 27 810

Total 31 1,410

Source: Diio Mi, June 2012; Note: Allegiant adding 1 weekly Honolulu flight in November 2012

HISTORICAL AIR SERVICE

Historically, Santa Maria Public Airport has supported service to a variety of hubs/destinations including: Las Vegas, Los

Angeles, Oxnard, Paso Robles, San Francisco, San Luis Obispo and Santa Barbara. The following summarizes the historical 

air service situation including: destinations, traffic levels, and service providers. Extenuating factors that have affected air 

service over time is also reviewed.

T
SECTION 3. AIR SERVICE – EXISTING AND HISTORICAL

6

Destinations, Carriers, and Traffic Levels

Since 2003, total departures have declined significantly. Seats 

and onboard passengers peaked in 2008 but have been 

declining since then. Exhibit 3.1 provides a summary of 

departures, seats and onboard passengers from 2003 through 

2011. Departures peaked in 2004 and have since declined by 

29 percent. With the addition of Allegiant service to PhoenixMesa in late 2007, seats peaked in 2008. The combined

cancellation of Allegiant’s Phoenix-Mesa service and 

United Express’ reduction in departures has led to a 22 

percent reduction in seats by 2011. Onboard passengers

improved through 2008 then declined since then by 24 percent.

EXHIBIT 3.1 DEPARTURES, SEATS, AND ONBOARD PASSENGERS

Source: Diio Mi

Table 3.2 provides additional detail on scheduled departures and seats from 2004 through 2012 by destination and 

carrier. United Express provided nonstop Los Angeles service over the entire period; however, departures decreased from 

a high in 2004 of 64,050 to only 41,460 in 2012. During the period, Allegiant began service to Las Vegas in 2006 and 

has continued to do so with three to four departures per week. In 2007/2008, Allegiant also provided nonstop service to 

Phoenix/Mesa but pulled the service in 2008. Historically, Santa Maria Public Airport has not had the benefit of eastbound 

hub service flown by a mainline carrier.

TABLE 3.2 HISTORICAL DESTINATIONS AND SERVICE PROVIDERS

DESTINATION AIRLINE ITEM

SCHEDULED DEPARTURES/SEATS

2004 2005 2006 2007 2008 2009 2010 2011 2012

Las Vegas, NV Allegiant 

Air

Dept 102 156 170 157 155 158 177

Seats 15,300 23,400 25,500 23,550 23,250 23,700 26,550

Los Angeles, CA United 

Express

Dept 2,135 2,131 1,756 1,761 1,689 1,382 1,398 1,367 1,382

Seats 64,050 63,930 52,680 52,830 50,670 41,460 41,940 41,010 41,460

Phoenix, AZ 

(AZA)

Allegiant 

Air

Dept 20 43

Seats 3,000 6,450

Total Departures 2,135 2,131 1,858 1,937 1,902 1,539 1,553 1,525 1,559

Total Seats 64,050 63,930 67,980 79,230 82,620 65,010 65,190 64,710 68,010

Source: Diio Mi

0

19,000

38,000

57,000

76,000

95,000

0

500

1,000

1,500

2,000

2,500

2003 2004 2005 2006 2007 2008 2009 2010 2011

Onboard passengers/Seats

Departures

Calendar year

Departures Seats Onboards
SECTION 3. AIR SERVICE – EXISTING AND HISTORICAL

7

Extenuating Factors that have Affected Air Service

Air service at Santa Maria Public Airport has been affected by the 

proximity of other commercial air service airports. Santa Barbara 

Municipal Airport is approximately 70 miles away, and San Luis Obispo 

County Airport is approximately 35 miles away. The larger Santa 

Barbara catchment area population resulted in more service at that

airport while airports serving the smaller Santa Maria and San Luis 

Obispo catchment areas competed vigorously for air service for their air 

travelers. The result is both airports having limited north/south 

service, but neither airport has service to either of the hubs at 

Salt Lake City or Denver.

The proximity of Vandenberg Air Force Base to Santa Maria Public 

Airport has proven to be a major generator of air travel, much of which 

would be best served by air service to a major eastbound hub. San Luis 

Obispo catchment area air travelers could be conveniently served by 

Santa Maria service to an eastbound hub. Such service would negate 

the need for air travelers from the two smaller catchment areas to drive 

over 70 miles to Santa Barbara to access service to an eastbound hub.

Past Air Service Development Efforts 

The Santa Maria Public Airport District Board of Directors has been actively involved in air service development. The Board 

of Directors has worked closely with the community on air service development efforts and continues to do so. Santa 

Maria Public Airport has aggressively pursued the air service initiative outlined herein: United Express/SkyWest Airlines

service to Denver.

Detailed market analyses have been completed. Market studies such as route forecasts and retention/diversion analyses 

have also regularly been conducted to keep the information current for use in this initiative. In addition to the above, air 

service workshops have been held in the community to continue to educate the community on local air service issues, 

challenges and options for the Santa Maria Public Airport. In 2008, a $7 million Terminal Expansion Project was 

completed to meet the needs of Santa Maria Public Airport passengers for the foreseeable future, with future growth 

options incorporated into the design.

In 2004 Santa Maria Public Airport District was one of 13 airports that formed the California Airports Coalition and 

received a Small Community Air Service Development Program grant to evaluate the unmet air service needs in California.

This study evaluated the intrastate air service needs of these 13 communities as well as the primary travel demand of each 

community to non-California destinations. Importantly, even though the study was completed in 2006/2007 Denver 

surfaced as Santa Maria’s top non-California destination. This study focused the management at Santa Maria Public 

Airport on Denver and all of Santa Maria’s airline initiatives have targeted either Denver or Salt Lake City service.

This Small Community Air Service Development Program grant is the needed component to incentivize an airline to take 

the risk and operate service to Denver, consistently Santa Maria’s number one non-California market.
8

THIS SECTION CONTAINS:

Description of Santa Maria 

Public Airport’s air service needs 

and deficiencies

AIR SERVICE NEEDS AND 

DEFICIENCIES 

he Santa Maria area is underserved and overpriced, 

particularly to destinations located east of Santa Maria.

The Air Service Needs and Deficiencies section identifies 

the deficiencies in air service at Santa Maria Public Airport and 

what air service improvements are needed to correct these 

deficiencies. This section demonstrates that Santa Maria is 

underserved, and the average airfares in this community are 

higher than other comparable communities.

MAJOR ORIGIN/DESTINATION MARKETS NOT 

SERVED ADEQUATELY 

Only 33 percent of Santa Maria Public Airport’s catchment area passengers use the local airport. The existing air service to 

Los Angeles International Airport provides reasonable convenience to north/south air travelers along the heavily traveled 

West Coast. However, limited frequency in eastbound Los Angeles nonstop markets and a relatively limited number of 

eastbound destinations, particularly those where codeshare agreements exist, seriously reduce the convenience of Los 

Angeles eastbound connecting opportunities. In addition the terminal layout at Los Angeles for connecting passengers is 

less than ideal. Dissatisfaction with Los Angeles connecting routings is generally shown by lower retention percentages as 

illustrated in Table 4.1 in the top 15 Denver and east markets. Importantly, Denver and Colorado Springs are the area’s 

top two eastern origin and destination markets. 

TABLE 4.1 CATCHMENT AREA RETENTION AND DIVERSION 

TOP EASTERN MARKETS 

SMX 

RETENTION 

%

DIVERSION %

SBA LAX OTHER

Denver, CO 38 44 15 2

Colorado Springs, CO 74 17 7 3

Washington, DC (IAD) 63 16 15 6

Chicago, IL (ORD) 31 6 49 14

Orlando, FL 50 32 13 5

New York, NY (JFK) 21 17 54 8

Dallas, TX (DFW) 31 21 45 3

Houston, TX (IAH) 16 23 48 13

New Orleans, LA 29 33 31 7

San Antonio, TX 56 23 16 5

Boston, MA 48 32 16 4

Philadelphia, PA 43 15 40 2

Baltimore, MD 66 11 20 3

Nashville, TN 10 22 65 3

Atlanta, GA 33 26 30 11

Total Domestic 50 21 19 10

T
SECTION 4. AIR SERVICE NEEDS AND DEFICIENCIES

9

The most serious deficiency in Santa Maria’s service is the lack 

of service to an eastbound hub such as Denver or Salt Lake 

City. Service improvements are badly needed by 

Vandenberg Air Force Base and its’ associated 

aerospace contractors which have extensive air travel 

to/from Denver and Colorado Springs. Santa Maria service 

to an eastbound hub would also serve the adjacent San Luis 

Obispo community. Santa Barbara-Denver service has 

operated at annual load factors ranging from 83 to 89

percent over the last five years making it hard to get a seat on 

those flights. Santa Maria service to an eastbound hub would 

alleviate the need for Santa Maria or San Luis Obispo travelers 

to travel over 70 miles to Santa Barbara, where seat 

availability is limited, or drive over 170 miles to Los Angeles.

HIGHER THAN AVERAGE FARES

The Order Soliciting Community Proposals indicated that the US Department of Transportation (DOT) will compare the 

local community’s airfares to the national average airfares for all communities using the Bureau of Transportation 

Statistics (BTS) database. Unfortunately, for communities like Santa Maria, this comparison can be misleading. The BTS 

report for calendar year 2011 shows Santa Maria Public Airport with an average roundtrip fare of $360, slightly lower 

than the national average of $364. However, Santa Maria’s fare is driven down due to the high share (54 percent of 

passengers) of point-to-point service offered by Allegiant Air at very low fares.

As mentioned previously, the Santa Maria community highly values the point-to-point service offered by Allegiant; 

however, the primary link to the national air transportation system is through the hub connections offered by United 

Express at Los Angeles International Airport. Table 4.2 shows a comparison of one-way airfares (net of taxes) when 

Allegiant is excluded from the averages. 

TABLE 4.2 AVERAGE ONE-WAY FARE PAID

AVERAGE FARE SMX % 

2004 2005 2006 2007 2008 2009 2010 2011 HIGHER

Santa Maria $170 $181 $209 $238 $295 $270 $253 $335 

Santa Barbara $158 $166 $185 $191 $195 $176 $186 $200 68%

San Luis Obispo $156 $167 $192 $195 $218 $206 $195 $195 71%

California $129 $138 $151 $152 $159 $143 $160 $175 91%

West Region $129 $137 $149 $148 $159 $144 $160 $175 91%

US $134 $137 $150 $149 $160 $145 $159 $173 93%

Source: Data Base Products, Inc.; excludes Allegiant Air

When excluding Allegiant’s point-to-point, low-fare impact in all markets, Santa Maria’s airfares in 2011 were almost 

double the state of California, the West region and the national averages. While Santa Maria’s fares have always 

exceeded those at Santa Barbara and San Luis Obispo, from 2010 to 2011, Santa Maria’s non-Allegiant fare increased by 

$81 making the fare differences excessive. While Allegiant’s presence in the Santa Maria market dramatically improved 

fares to/from Las Vegas, their top origin and destination market, other options are needed in the Santa Maria 

marketplace to bring fares more in line with other airports regionally and nationally. There are very few airports 

across the nation suffering from airfares as excessive as at Santa Maria when trying to access a hub.
SECTION 4. AIR SERVICE NEEDS AND DEFICIENCIES

10

Looking specifically at eastbound markets, the focus of this grant application, high airfares combined with the lack of

direct service to an eastbound hub push air travelers to divert to alternate airports for service to Denver and east. Table 

4.3 compares calendar year 2011 Santa Maria average airfares with those of San Luis Obispo, Santa Barbara and Los 

Angeles in the catchment area’s top 15 markets Denver and east.

TABLE 4.3 AIRFARE COMPARISON

MARKET

ONE-WAY AVERAGE FARE DIFFERENCE

SANTA 

MARIA

SAN 

LUIS 

OBISPO

SANTA 

BARBARA

LOS 

ANGELES SBP SBA LAX

Denver, CO $332 $163 $142 $120 $169 $190 $212 

Colorado Springs, CO $474 $215 $242 $223 $259 $232 $251 

Washington, DC (IAD) $365 $216 $220 $248 $149 $145 $117 

Chicago, IL (ORD) $214 $206 $200 $190 $9 $15 $24 

Orlando, FL $378 $213 $229 $204 $165 $149 $174 

New York, NY (JFK) $195 $228 $234 $301 ($33) ($38) ($106)

Dallas, TX (DFW) $374 $213 $200 $164 $160 $174 $209 

Houston, TX (IAH) $353 $195 $210 $233 $159 $143 $120 

New Orleans, LA $316 $203 $223 $200 $113 $94 $117 

San Antonio, TX $468 $187 $194 $192 $281 $274 $276 

Boston, MA $336 $204 $248 $236 $132 $88 $100 

Philadelphia, PA $351 $294 $261 $264 $57 $90 $87 

Baltimore, MD $533 $254 $274 $209 $278 $259 $324 

Nashville, TN $374 $215 $235 $200 $159 $139 $173 

Atlanta, GA $352 $244 $212 $192 $108 $140 $160 

Source: Data Base Products, Inc.; CY 2011

Though this is a limited sample, it further demonstrates that Santa Maria’s fares in eastbound markets are overpriced 

compared to adjacent airports. One-way airfare differences are as high as $281 over San Luis Obispo, $274 over Santa 

Barbara, and $324 over Los Angeles. Denver and Colorado Springs, in particular, two markets extremely vital to 

Vandenberg Air Force Base, are excessively high. Service to an eastbound hub with improved routings and added capacity

will result in lower fares.
11

THIS SECTION CONTAINS:

• Strategic Plan 

• Alternate plan 

• Previous grant recipient 

with new project and goals

STRATEGIC PLAN –

AIR SERVICE

his Strategic Plan section provides a detailed description of the goals of the project and a primary and alternate plan 

for attaining those goals. This application reflects a new project with different goals from those detailed in Santa 

Maria’s 2002 grant award.

PROJECT GOALS

The following goals will be accomplished by the proposed Strategic Plan:

• Secure air service to a major airline’s hub located east of Santa Maria Public Airport

• Improve convenience of service and fare competitiveness

• Mitigate the need to use alternate airports to access adequate air service 

PROPOSED AIR SERVICE

The proposed Strategic Plan to meet the project’s goals is: Santa MariaDenver service, one or two daily regional jet roundtrips operated by 

SkyWest Airlines/United Express (Exhibit 5.1). The effect of this plan on 

the project goals will be:

• Adding nonstop, regional jet service to United Airlines’ Denver 

hub will provide the region with direct access to its number one 

eastern destination and improve connectivity to markets located 

beyond Denver.

• Nonstop service to Denver will reduce the number of passengers

that are now diverting to other airports to fly to Denver or 

traveling to destinations beyond Denver. Currently, almost 

100,000 origin and destination passengers annually divert 

to an alternate airport. Almost 40 percent of those 

travelers use Los Angeles International Airport, a lengthy 

170-mile drive.

• Added capacity will provide greater availability of cheaper seats 

thereby reducing Santa Maria’s excessively high airfares. Lower 

airfares and improved convenience will influence passengers to 

use Santa Maria Public Airport that are now traveling to 

alternate airports.

T

EXHIBIT 5.1 ROUTE MAP

DEN

SLC

SMX
SECTION 5. STRATEGIC PLAN – AIR SERVICE

12

AIRLINE PARTICIPATION

Over the past several years, members of the public-private 

partnership have met with United Airlines, Delta Air Lines and 

SkyWest Airlines regarding nonstop service to the hubs at 

Denver and Salt Lake City. Because this is a new market, an 

airline’s willingness to serve Santa Maria depends heavily on 

offsetting the airline’s start-up risk in the market. A grant 

award for this application would provide the necessary tools to 

lower the risk for an airline to initiate service between Santa 

Maria and an eastern hub such as Denver or Salt Lake City.

DETAILED MARKET ANALYSIS

A detailed market analysis has been completed for SkyWest/United service to Denver International Airport. Key points of 

the analysis are described below. Projections were completed for a one and two roundtrip schedule on a 50-seat 

Canadair Regional Jet. The operating and market assumptions are listed below:

• The Denver local market will be stimulated 50 percent for one roundtrip and 100 percent for two roundtrips.

Connecting markets will be stimulated up to 10 percent for one roundtrip and 50 percent for two roundtrips 

depending on SkyWest/United’s market share of existing passengers. 

• SkyWest/United’s Santa Maria-Denver service will capture a share of the passengers now driving to an alternate 

airport (i.e. San Luis Obispo, Santa Barbara, and Los Angeles).

• Diversion from SkyWest/United’s existing Santa Maria-Los Angeles service was taken into consideration. 

• SkyWest/United’s fully allocated operating costs between Santa Maria and Denver were estimated using Diio Mi

Form 41 data for SkyWest, adjusted by the manufacturer’s cost curve and SkyWest feedback. 

Table 5.1 provides a summary of the SkyWest/United Denver market analysis for one and two roundtrips per day on a

50-seat regional jet. 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 one roundtrip per day will generate $615,195 (15 percent margin) 

in segment profit for SkyWest/United. Two roundtrips per day are projected to generate $804,531 (10 percent margin) in 

segment profit for SkyWest/United. The Santa Maria-Denver route is forecast to be a strong economic performer for both 

SkyWest and United after ramp-up is complete. With an estimated 31 percent fully allocated system profit margin for one 

roundtrip and 29 percent for two roundtrips, this 

market will be self-sustaining.

Although it is estimated that SkyWest/United will earn a 

profit after the Santa Maria-Denver market matures, 

SkyWest/United will not generate this amount of profit 

at start-up. New markets typically have losses during the 

first year of operation, hence the need for a revenue 

guarantee to temper the airline’s risk. The uncertainty in 

the airline industry including the fluctuating cost of fuel 

will play a large part in the revenue guarantee 

negotiations with SkyWest/United.

TABLE 5.1 SANTA MARIA-DENVER MARKET ANALYSIS

ITEM STATISTICAL CATEGORY 1 RT 2 RT

1 Available seats per dept 50 50

2 Segments per day 2 4

3 Onboard passengers 28,545 54,437

4 Load factor 78% 75%

5 Average fare all markets $268 $276 

6 Segment 1 revenue $4,093,808 $7,761,756 

7 Segment 1 cost $3,478,613 $6,957,225 

8 Segment 1 profit margin $ $615,195 $804,531 

9 Segment 1 profit margin % 15% 10%

10 System revenue $6,267,277 $12,312,614 

11 System cost $4,326,266 $8,732,060 

12 System profit/loss $1,941,011 $3,580,554 

13 System margin 31% 29%

Source: Mead & Hunt, Inc.
SECTION 5. STRATEGIC PLAN – AIR SERVICE

13

ALTERNATE PLAN

If Santa Maria Public Airport fails to obtain SkyWest/United 

service to Denver, the secondary target is Delta Air Lines’

service to Salt Lake City. Consistent with the intent of the air 

service initiative proposed, Delta’s Salt Lake City hub fills the 

need for service to a hub airport located east of Santa Maria.

A previous analysis of this option that was completed for a 

presentation to Delta planners indicated that the service would 

perform well for Delta. Frontier Airlines’ service to Denver or 

US Airways’ Phoenix service would also meet the goals of this 

grant application.

PREVIOUS GRANT RECIPIENT - NEW PROJECT 

AND GOALS

In 2002 the Santa Maria Public Airport District was awarded a Small Community Air Service Development Program grant.

The 2002 grant goals included the following:

• Recruit jet service to areas not currently served

• Increase service from the current carrier

• Attract a new carrier to stimulate competition thus creating competitive fares

• Increase community awareness with regard to recruiting air carriers to the area

The US DOT’s portion of the project budget, $217,530, included a plan for partial funding of an air service marketing 

program and support for a leakage study.

The 2002 application’s goals targeted the improvement of overall air service at the Airport through marketing, research 

and meeting with airlines. This 2012 application is focused on securing service to a major airline hub whose location 

promotes the flow of passengers to markets east of Santa Maria. By adding high value service to the east, passenger 

diversion will be reduced and the added capacity will push airfares down further attracting travelers that are now using 

alternate airports. Also, the 2012 implementation plan is different from the 2002 application. This year’s plan includes a 

revenue guarantee, airport fee waivers and marketing program specifically supporting new service to eastern 

hubs/destinations. 

In summary, the goals and plan associated with this 2012 grant application are different and encompass 10 years 

additional market growth experience from Santa Maria’s 2002 grant application/award. Accordingly, this application 

qualifies as a new project and meets the requirements of the Small Community Air Service Development Program.
14

THIS SECTION CONTAINS:

• Public-private partnership

• Designation of a legal 

sponsor

• Funding

• Sustainability of the project

STRATEGIC PLAN –

IMPLEMENTATION AND FUNDING

his section, Strategic Plan - Implementation and Funding, details the incentive and support plan required to 

implement the Strategic Plan. A legal sponsor has been designated and a public-private partnership that will 

actively participate in implementing the proposed project has been formed. Also, this section addresses the selfsufficiency of the service and provides a description of the community’s plan to continue the project if it is not selfsustaining after the grant funds are expended. A project budget and breakdown of the sources of funds is included.

PUBLIC-PRIVATE PARTNERSHIP

Santa Maria Public Airport District is the sponsor of this grant 

application. For the purpose of this application, Santa Maria 

Public Airport District, the Santa Maria Valley Chamber of 

Commerce & Visitor & Convention Bureau and the Santa Maria 

Economic Development Commission have formed a publicprivate partnership (refer to community support letters in 

Appendix A). Collectively, this partnership is committed to 

completing the Strategic Plan outlined herein.

All partners in the public-private partnership will be involved in 

the execution of the Strategic Plan (Table 6.1). Santa Maria

Public Airport will execute all federal grant offers, process 

associated reimbursement requests, oversee grant 

administration, and manage the revenue guarantee. The Santa 

Maria Valley Chamber of Commerce & Visitor & Convention

Bureau along with the Santa Maria Economic Development 

Commission will assume responsibility for the implementation 

and management of the marketing program associated with the 

proposed service.

INCENTIVE AND SUPPORT PLAN

The public-private partnership proposes a community support package that has been tested and proved to be successful 

in acquiring airline service and generating new passengers. To reduce SkyWest Airlines/United Express’ breakeven period 

and offset the economic risk during start-up, the public-private partnership proposes the following incentives (Exhibit 

6.1, next page):

• Revenue guarantee: reduce airline economic risk

• New service marketing campaign: create new service awareness for SkyWest/United 

• Airport fee waivers: reduce airline start-up costs

T

TABLE 6.1 PUBLIC-PRIVATE PARTNER ROLES

PUBLIC-PRIVATE 

PARTNER ROLE

Santa Maria Public Airport 

District

Grant and revenue 

guarantee administration

Santa Maria Valley 

Chamber of Commerce &

Visitor & Convention 

Bureau

Coordination of the 

marketing program

Santa Maria Economic 

Development Commission

Coordination of the 

marketing program
SECTION 6. STRATEGIC PLAN – IMPLEMENTATION AND FUNDING

15

Revenue Guarantee

To reduce airline risk and provide an incentive for SkyWest/United 

to provide nonstop service to Denver, this Strategic Plan includes 

a revenue guarantee. Although pro forma projections for new 

eastbound hub service are positive, service ramp-up and 

breakeven can take up to a year. It is anticipated that 

SkyWest/United will require a $600,000 revenue guarantee to 

mitigate the risk of starting this new market. The exact terms of 

the revenue guarantee agreement are subject to 

further negotiations.

Marketing Campaign

The success of the proposed service between Santa Maria and 

Denver will live or die based on the success of the marketing 

program. Making local travelers aware of the new, nonstop 

regional jet service to Denver and influencing the thousands of 

travelers that are now driving to alternate airports to use the local 

airport is the key. It helps that the new service will have the 

United Express brand since United Express is already in the Santa 

Maria market, but this does not guarantee the success of the 

Denver service. The importance of an aggressive promotion 

campaign cannot be overemphasized. 

Table 6.2 provides a breakdown of the marketing dollars to be 

spent on maximizing passenger utilization of new flights between 

Santa Maria and Denver. This $50,000 campaign will be funded 

by non-airport funds through Santa Maria Economic Development 

Commission ($20,000 cash and $10,000 in-kind) and airport 

funds through the Santa Maria Public Airport District ($20,000 

cash). The Santa Maria Economic Development Commission and 

the Santa Maria Valley Chamber of Commerce & Visitor & 

Convention Bureau will be responsible for management and 

implementation of the marketing campaign.

The marketing campaign will include a kick-off phase utilizing 

public relations and social media, an on-going media campaign and a promotional event with a media partner 

approximately three months after kick-off. The marketing campaign will be monitored and adjusted as necessary for 

maximum results.

KICK-OFF PHASE

A social media campaign will help get the word out. S. Lombardi & Associates’ social media expert will set up and 

maintain social media accounts and be responsible for gathering, networking and informing fans and followers of the 

latest updates in air travel specials and new flights out of Santa Maria Public Airport. The firm will work to create 

awareness of the convenience of the Santa Maria Public Airport and generate more traffic to its website and location.

TABLE 6.2 MARKETING BUDGET

DESCRIPTION CASH

INKIND TOTAL

Kick-Off Phase

Public relations $1,000 $0 $1,000 

Social media $600 $0 $600 

On-Going Media

Television airtime and 

commercial 

production

$29,600 $0 $29,600 

Targeted email 

campaign $2,000 $0 $2,000 

Print media $2,000 $0 $2,000 

Promotional Event

Television airtime $4,800 $0 $4,800 

Program Administration

Santa Maria Economic 

Development 

Commission 

$0 $10,000 $10,000 

Total $40,000 $10,000 $50,000 
SECTION 6. STRATEGIC PLAN – IMPLEMENTATION AND FUNDING

16

Public relations will also be utilized to help secure news coverage of the 

announcement of new flights coming to Santa Maria. A professionally 

organized news conference will be a key part of the initial public 

relations effort. 

ON-GOING MEDIA

A six-month on-going media campaign is proposed with television 

advertising as the core. This campaign will start immediately following 

the press conference announcing the new flights. Santa Maria-based 

television stations KCOY (CBS) and KKFX (FOX) will be primary buys, 

with Comcast Cable (in Santa Maria, Lompoc and Santa Ynez Valley 

areas) and San Luis Obispo-based KSBY-TV (NBC) as secondary buys.

The “Central Coast Now” package from KCOY/KKFX gives very good 

frequency for the money. This can be supplemented with targeted buys 

in News and other appropriate programming on KCOY/KKFX and 

KSBY. The budget of $29,600 will be spent on television airtime and 

commercial production, spread over six months, with a higher 

proportion being spent near the kick-off.

A targeted email campaign will also be used and directed at persons 

likely to be higher income, frequent fliers and/or skiers. For print media, 

small, targeted publications such as the Pacific Coast Business Times, which reaches business owners and managers who 

are likely to travel frequently and be decision makers for corporate travel, will be used. Chamber of Commerce 

publications will also be used to reach this target market.

PROMOTIONAL EVENT

Partnering with a media outlet for a contest will inject some fun and energy into the campaign about three months after 

the kick-off. With easily-arranged support from public and private entities in the Denver area and from SkyWest/United, a 

trip to the Denver area including airfare, accommodations and activities will be given away.

Fee Waivers

The air service support program includes three fee waivers: landing fees, terminal fees and fuel flowage fees. The Airport 

will waive landing fees for the first 12 months of new service. Landing fees for the first 12 months are estimated at 

$20,000 assuming the use of the Canadair Regional Jet with one roundtrip daily. An additional six months of landing fees 

will be offered as part of the sustainability initiative following the one-year anniversary of service. The landing fee waiver 

may vary depending on aircraft type used and the number of roundtrips offered.

The Airport will waive common use terminal fees for the first six months of service. These fees are estimated at $15,000

for the first six months. Fuel flowage fees will also be waived for the first 12 months of service worth an estimated 

$20,000. An additional six months of terminal and fuel flowage fees will be offered as part of the sustainability initiative 

following the one-year anniversary of service.
SECTION 6. STRATEGIC PLAN – IMPLEMENTATION AND FUNDING

17

PROJECT CONTINUATION AND SUSTAINABILITY

Based on positive pro forma projections for SkyWest/United service to Denver, it is anticipated that new eastbound hub 

service will be self-sustaining after the start-up period which can take up to a year. A leading cause of service failure is 

lack of awareness in the community. The public-private partnership will fund an additional $30,000 marketing campaign 

if at the end of the first year of service the average load factor for the 12-month period averaged less than 70 percent.

Additionally, Santa Maria Public Airport will abate landing, terminal and fuel flowage fees for an additional six months, a 

savings of $35,000 for SkyWest/United. The public-private partnership and the Santa Maria business community are 

committed to the success of this project and understand the difficulties associated with profitably operating new 

air service.

STRATEGIC PLAN FUNDING

The public-private partnership is requesting the US DOT’s

assistance in funding 67 percent, or $490,000 of the 

Strategic Plan (Exhibit 6.2). Specifically, US DOT funding 

will be used to fund the revenue guarantee. All other 

elements including the marketing campaign, Strategic Plan 

monitoring, airline negotiations and airport fee waivers will 

be funded by the community. Table 6.3 provides the 

Strategic Plan budget by element and sources of funding.

The Airport and community will fund 33 percent of the 

total proposed air service program. Non-airport funding 

sources will provide 20 percent of the cash requirement 

and 19 percent of the funding for the total program 

including in-kind services.

TABLE 6.3 STRATEGIC PLAN BUDGET

DESCRIPTION

FUNDING SOURCE

TOTAL

US DOT AIRPORT NON-AIRPORT

CASH CASH

INKIND CASHINKIND

Airline incentive program:

 Marketing campaign $20,000 $20,000 $10,000 $50,000 

 Revenue guarantee $490,000 $110,000 $600,000 

 Fee waivers:

 Landing fees $20,000 $20,000 

 Terminal fees $15,000 $15,000 

 Fuel flowage fees $20,000 $20,000 

Consultant fees:

 Airline negotiations $10,000 $10,000 

 Strategic Plan monitoring $15,000 $15,000 

Total $490,000 $45,000 $55,000 $130,000 $10,000 $730,000 

Percent of total project 67% 6% 8% 18% 1% 100%

Percent of cash contribution 74% 7% N/A 20% N/A 100%

Cash: NonAirport

18%

Cash: US 

DOT

67%

Cash: 

Airport

6%

In-Kind: 

NonAirport

1%

In-Kind: 

Airport

8%

EXHIBIT 6.2 CASH VS IN-KIND FUNDING
18

THIS SECTION CONTAINS:

• Schedule and milestones for 

timely completion of the 

project

• Monitoring program

SCHEDULE AND 

MONITORING

realistic timetable for implementation of the grant project has 

been developed to achieve the project goals and ensure the

timely use of the grant funds. This section details the milestones 

and a monitoring program to track the progress of the project.

SCHEDULE AND MILESTONES

The following milestones are proposed to track the progress of this air 

service initiative. A timeline follows on Exhibit 7.1, next page.

• Airline negotiations: After the grant is awarded and 

agreement is signed, the public-private partnership will contact 

SkyWest Airlines/United Express and continue airline 

negotiations.

• Marketing campaign development/initiation: While the airline agreement is being finalized, the marketing 

campaign will be developed. The timing of the marketing campaign is critical; ideally, marketing would begin 30 

to 60 days prior to new service initiation. Development of the marketing campaign is dependent on the timing 

of SkyWest/United’s announcement and initiation of daily Denver service.

• Service initiation: The public-private partnership anticipates daily service to Denver would begin in spring/early 

summer of 2013 following successful negotiations with SkyWest/United. The remaining elements of the 

Strategic Plan depend on this date. The public-private partnership understands the realities of the airline 

industry; airline route planning and availability of right-sized aircraft are critical to air service initiation and may 

delay the service start date.

• Revenue guarantee contract completion: The revenue guarantee will be calculated based on the terms of 

the agreement, typically at the end of the first year of service. Assuming a June 2013 start date, the revenue 

guarantee contract would expire May 2014. If the service start date changes due to airline circumstances and/or 

equipment availability, the revenue guarantee contract term will change accordingly.

• Alternate plan: SkyWest/United service to Denver is the primary target of the Strategic Plan. If SkyWest/United

does not show interest in starting service by May 2013, then Delta Air Lines’ service to Salt Lake City will be 

pursued. If neither air carrier has shown interest in implementing the proposed service by December 31, 2013, 

Santa Maria Public Airport District will propose an alternate plan that meets the goals of this grant application.

A
SECTION 7. SCHEDULE AND MONITORING

19

The timeline proposed in Exhibit 7.1 is highly contingent 

on the timing of the grant award and successful airline 

agreement negotiations. If either is delayed, other 

elements on the timeline will be pushed back.

MONITORING PROGRAM

Monitoring new air service initiatives is critical to success.

Given the turbulent state of the aviation industry, airline

staff do not have the time to monitor small markets on a 

regular basis as other initiatives often take priority. Given 

this, an aggressive and comprehensive monitoring 

program is proposed for new Santa Maria-Denver

service. The monitoring program includes: service 

performance tracking, assessing the effectiveness of the 

marketing campaign and determining the impact of the 

service on retention of catchment area passengers at 

Santa Maria Public Airport. The Strategic Plan will be 

monitored as follows:

• Available service performance indicators will be 

reviewed on a monthly basis. The indicators are 

dependent on availability of data reported by 

the airline to the US DOT and data reported to 

the Airport. It is anticipated that the following 

indicators will be reviewed monthly: 

departures, available seats, enplaned 

passengers and load factors.

• On a quarterly basis, average airfares will be 

compared and evaluated to prior quarters.

Published airfares will also be tracked via one of 

the Global Distribution/Computer Reservations 

Systems (GDS/CRS). Revenue per available seat 

mile will be reviewed and compared against 

other markets served by SkyWest/United 

at Denver.

• On an annual basis, an updated 

retention/diversion study will be completed to 

assess the impact of the service on retention of 

passengers at the local airport.

EXHIBIT 7.1 PROPOSED TIMELINE
20

THIS SECTION CONTAINS:

Letters of support from 

members of the public-private 

partnership, the local business 

community, and state 

government.

APPENDIX A.

COMMUNITY SUPPORT

ppendix A includes letters of support for the Santa Maria Public Airport’s application to the US DOT for eastern

hub service. Support letters were submitted by participants in the public-private partnership and members of the 

Santa Maria community. The letters of support are included on the following pages of this Appendix A and are 

listed below.

PUBLIC-PRIVATE PARTNERSHIP

Santa Maria Economic Development Commission

Santa Maria Valley Chamber of Commerce & Visitor and Convention Bureau, Chairman of the Board

Santa Maria Valley Chamber of Commerce & Visitor and Convention Bureau, President & CEO

GOVERNMENT

County of Santa Barbara, Supervisor Joni Gray

City of Santa Maria, Mayor Larry Lavagnino

BUSINESS AND COMMUNITY SUPPORT

Benedetti & Associates

Charter Brokerage & Investments

Diani Companies

Hardy Diagnostics

Heritage Oaks Bank

Pacific Coast Energy Company, LP

Prince Lionheart

Quintron Systems, Inc.

VTC Enterprises

Your People Professionals

A