PROPOSAL UNDER THE SMALLCOMMUNITY AIR SERVICEDEVELOPMENT PROGRAMDocket DOT-OST-2010-0124Gulfport-Biloxi Regional Airport AuthorityDUNS – 088924246Congressional District Code – MS 05Table of Contents• Contact Information• Executive Summary• MS Gulf Coast Economy• Air Service Development• Evaluation Criteria• Project Proposals and Costs• Community Assurances• AcknowledgementsGulfport-Biloxi International Airport14035 – L Airport RoadGulfport, MS 39503Bruce Frallic, A.A.E.Executive DirectorPhone: (228) 863-5951Fax: (228) 863-5953bfrallic@flygpt.com**EXECUTIVE SUMMARY**•The economic condition of the MS Gulf Coast has yetto recover from the devastatingeffects of Hurricane Katrina in August 2005. The April 2010 BP Oil Spill in The Gulf of Mexicodelivered a second blow, adversely effecting the economy on the MS Gulf Coast for both theshort and long term.•As a result of the relentless national and regionalmedia coverage, passenger, airline,business and industry perceptions in all air markets have been, and will continue to beadversely impacted.•The $1.6 billion tourism industry on the Mississippi Gulf Coast, which directly employsover 25,000 people, has been impacted as a result of the oil spill.•In an effort to prevent or mitigate a major declinein passenger traffic, and revenues, GPTmust effectively and quickly define market changesresulting from the oil spill. GPT mustassess the impact of the disaster, and formulate solutions to the problems presented.•With funds made available through the Small Community Air Service DevelopmentProgram, GPT plans to conduct a series of strategicstudies from which we will use tocompose an action plan. This plan will help identify appropriate marketing efforts which areessential to prevent a catastrophic economic loss.•Gulfport – Biloxi International Airport has the support of a citizen-based public-privatepartnership that is dedicated to sustaining air service levels in their community.MS GULF COAST ECONOMY**MS GULF COAST**ECONOMYBP OIL SPILL IMPACTThe oil spill resulting from the explosion of the Deepwater Horizon drilling rig – operated byBritish Petroleum (BP) – has left a lasting adverseeffect.• At this juncture, it is unknown how the oilspill will ultimately impact the economy. Weknow that leading up to the event, and even asthe event unraveled, the economy on the MSGulf Coast was making real progress towardsrecovery.• Job sectors connected to the seafoodindustry face immediate and sizeable losses.• Negative national perceptions of oilinundated beaches have and will continue toadversely effect the MS Gulf Coast TourismIndustry.GPT**MS GULF COAST**ECONOMYESTABLISHMENT JOBSSource: Gulf Coast Business Council**MS GULF COAST**ECONOMYSALES TAX COLLECTIONSTwo preliminary observations about oil spill impacts in May 2010.1. Though it is generally agreed that tourism related visitation on the Mississippi GulfCoast is down because of the oil spill, the numberof people in the region working withthe oil spill has likely grown overall hotel saleswhen compared to prevailing trends(Chart 3).2.Prevailing trends for restaurants on the Mississippi Gulf Coast have worsened, as saleswere actually down in May after increasing leadingup to the oil spill (Chart 4).Source: Gulf Coast Business Council**MS GULF COAST**ECONOMYTOURISMLooking ahead, and taking into consideration ongoing impacts of the oil spill, thefollowing will influence the progress of the Mississippi Gulf Coast in its efforts toestablish itself as a premier travel destination.•**Perceptions of potential visitors on how the oil sp ill has impacted the region will** **continue to be a challenge**. Though short term aggregate impacts have not beensubstantial, it is likely that BP related travelershave offset otherwise lost business.Many outward indicators, such as inquiries for golfpackages and advance hotelbookings, are down.**Additional marketing campaigns will be needed to ad dress** **negatively impacted perceptions.**• GPT Air Service is directly impacted by declines in leisure visitors. Inbound trafficfrom ATL, TPA, and other key markets is a criticalrevenue source.AIR SERVICE DEVELOPMENT**AIR SERVICE**DEVELOPMENTAIRLINE MEETINGS2005Continental AirlinesNorthwest AirlinesDelta AirlinesAmerican Eagle2006Delta AirlinesUS AirwaysAmerican EagleAirtranAirways2007Continental AirlinesFrontier AirlinesDelta AirlinesAmerican EagleSkybusAllegiant AirUnited AirlinesUS Airways2008Delta AirlinesUS AirwaysUnited AirlinesAirtranAirways2009Continental AirlinesDelta AirlinesAmerican EagleUnited AirlinesAllegiant Air2010Continental AirlinesDelta AirlinesSpirit AirlinesUS AirwaysBranson Air ExpressVision AirlinesUnited AirlinesAirport officials continue to meet with new and existing air carriers in an effort to secureadditional service.**AIR SERVICE**DEVELOPMENTPUBLIC / PRIVATE PARTNERSHIPSAirport officials target demand for new air servicethrough public / private partnerships.**AIR SERVICE**DEVELOPMENTAGGRESSIVE INCENTIVESGPT offers incentives to help lower risks with theintention of creating an environment ofaggressive support to grow existing routes and secure new routes.• Consolidated seat block programs and cooperative marketing with area casino propertiesand attractions.• AirTran Airways – (Jan 2010) secured service to ATL/ TPA through consolidatedcasino seat block agreement.• Branson Air Express – (May 2010) secured nonstop service to Branson, MO throughcasino marketing support and seat commitment with private entity.• GPT aggressively markets air service to area businesses.• GPT provides airlines with short term abatement ofairport fees – 12 month fee waiversfor new destinations.• Aggressive marketing support in local area and indestination markets is provided to allcarriers, not limited to new service.• Awarded Small Community Air Service Grant (2005) for revenue guarantee for nonstopservice to ORD with American Eagle in 2007- 08.**AIR SERVICE**DEVELOPMENTSCASG 2005Small Community Air Service Grant awarded on September 6, 2005.• Grant funds awarded in the amount of $750,000• $700,000 – Revenue Guarantee• $50,000 – Marketing / Promo / Market Assessment• American Eagle began nonstop service from GPT – ORDon December 13, 2007.• The revenue guarantee funds were depleted on April2008. Due to increased operationalcosts associated with a significant increase in fuel costs, AE discontinued the nonstop ORDservice on November 2008.**AIR SERVICE**DEVELOPMENT2005 SCASG vs. 2010 SCASGThe 2010 SCASG application definitively reflects anew project as the goals and objectivesare considerably different in comparison to the 2005 SCASG awarded.2005 SCASG AWARDTOTAL $750,000REVENUE GUARANTEE - $700,000MKTG / PROMO / ASSESSMENT - $50,000FEDERAL AMOUNT- $750,0002010 SCASG PROPOSALTOTAL $455,000ECONOMIC IMPACT / ACTION PLAN - $30,000AIR SERVICE DEVELOPMENT CONSULTANT- $30,000MARKETING SUPPORT - $395,000FEDERAL AMOUNT- $280,000EVALUATION CRITERIA**EVALUATION**CRITERIACATCHMENT AREA**DRIVE TIME MATRIX**• 1 HOUR – 1 M• .5 HOUR – 300,000**EVALUATION**CRITERIACURRENT SERVICE – AUG 2010**EVALUATION**CRITERIACURRENT SCHEDULE – SEP 20103,812,82459.459,27415622222322242122TOTAL150,228117.0035131010100Aug-10428TPAGPTFL340,20050.001,050213333333Aug-10324MEMGPTDL620,40050.001,650334455555Aug-10376IAHGPTCO698,60050.001,400284444444Aug-10499DFWGPTAA732,79060.481,270213333333Aug-10577CLTGPTUS72,75050.0015030100101Aug-10485BKGGPT1X123,552117.0035131010100Aug-10352ATLGPTFL1,074,30469.363,052446767666Aug-10352ATLGPTDLASM/WeekSeats/DepSeatsDepsSunSatFTWTMDateMilesDstOrgAl**EVALUATION**CRITERIA4 3 0 , 3 1012 , 0 5 53 7 6 , 4 8 68 , 13 93 9 8 , 3 184 , 5 8 74 5 2 , 16 15 , 7 0 54 7 2 , 5 6 315 , 4 7 03 4 1, 4 9 74 6 , 2 3 02004 2005 2006 2007 2008 2009CharterScheduledENPLANEMENT PASSENGER TREND**EVALUATION**CRITERIARank MarketNonstopMilesPAXPDEWREVPDEWAvg Fare Nonstop1 ATL 35279 9,786$ 124$ Y2 IAH 37641 4,856$ 118$ Y3 DCA 89830 4,814$ 160$ N4 BWI 92729 3,840$ 134$ N5 LAS 1,55524 3,859$ 160$ N6 LGA 1,11222 2,871$ 128$ N7 PHL 1,01720 3,048$ 153$ N8 TPA 42920 2,652$ 136$ Y9 DFW 50019 3,458$ 181$ Y10 SAN 1,66118 3,707$ 201$ N11 LAX 1,73117 3,720$ 219$ N12 FLL 62016 2,301$ 147$ N13 ORD 80015 2,417$ 157$ N14 CLT 57815 2,469$ 166$ Y15 JAX 44115 2,245$ 152$ N16 MCO 48615 2,326$ 159$ N17 MSP 1,02414 2,511$ 177$ N18 ORF 86514 4,076$ 289$ N19 BOS 1,29714 2,242$ 163$ N20 RDU 70513 1,756$ 133$ N21 PHX 1,36113 2,092$ 161$ N22 SFO 1,96412 2,136$ 174$ N23 DTW 87412 2,208$ 181$ N24 SEA 2,11712 2,827$ 233$ N25 DEN 1,09512 2,058$ 172$ NSource: U.S. DOT, Origin Destination Passenger Survey, via Data Base Products, Inc.GPT TOP O&D AIRPORT MARKETS – CY 2009**EVALUATION**CRITERIAGPT TOP O&D PASSENGER MARKETS – Q1 2010Source: U.S. DOT, Origin Destination Passenger Survey.Rank MarketPAXPDEWAvg Fare Nonstop1 ATL 50 142$ Y2 TPA 39 68$ Y3 DCA 25 152$ N4 BWI 23 152$ N5 IAH 22 219$ Y6 LAS 22 179$ N7 LGA 22 134$ N8 DFW 21 189$ Y9 PHL 18 165$ N10 SAN 17 230$ N11 CLT 16 167$ Y12 MSP 16 169$ N13 BOS 15 168$ N14 MCO 15 182$ N15 ORF 14 235$ N16 DTW 14 165$ N17 LAX 13 258$ N18 SAT 13 204$ N19 ORD 13 175$ N20 FLL 11 189$ N21 DEN 11 189$ N22 MCI 11 157$ N23 SEA 10 273$ N24 SFO 10 194$ N25 PHX 10 165$ N**EVALUATION**CRITERIAANNUAL CAPACITY-10,00020,00030,00040,00050,00060,00070,0001 2 3 4 5 6 7 8 9 10 11 12200820092010PROJECT PROPOSAL**PROJECT**PROPOSALTo ensure effective mitigation of the negative impacts on air service levels at the GulfportBiloxi International Airport as a direct result ofthe BP Gulf Oil Spill catastrophe, the projectproposal identifies the following vital support initiatives.• Employ a consultant to conduct a detailed market assessment to define countermeasuresto the changing economic conditions, passenger propensities, performance analysis, andviable markets in the post-BP disaster environment.The study will ultimately result in anaction plan which will guide a proactive program tomitigate negative revenue impacts as itdirectly relates to air service.• Employ a consultant to provide expertise and support in communicating and presentingthe information to new and existing air carriers.• Through the action plan derived from the market assessment, the establishment andfunding of a strategic marketing campaign to implement countermeasure marketing intarget markets will act as the vehicle to offset the negative effects on air service levels onthe MS Gulf Coast due to the BP oil spill.OBJECTIVES**PROJECT**PROPOSALConsultant ServicesMarket Assessment Study / Strategic Plan$ 30,000Air Service Development Support Agreement$ 30,000Ad CampaignDeliverablesGPT ContributionCommunity InvestmentGrant FundsPrint$ 50,000$ 25,000 $ 200,000Radio$ 10,000$ 25,000 $ 25,000Internet$ 10,000$ 25,000Other Media – In airport advertising$ 25,000Total$ 125,000 $ 50,000$ 280,000FUND ALLLOCATION**PROJECT**PROPOSALREGIONAL SUPPORT FOR AIR SERVICETo ensure the success of air service initiatives, Gulfport-Biloxi and the Mississippi Gulf Coastarea businesses through a public / private partnership are working together to supportinitiatives to counteract the negative effects of the BP Oil Spill.• The public / private partnership includes the GulfCoast Business Council, Harrison CountyTourism Commission, The Gulf Coast Chamber of Commerce, Mississippi DevelopmentAuthority, and Gulf Coast Casino Operators.• Through the Gulf Coast Business Council and the Gulf Coast Chamber of Commerce airservice task force, valuable information derived from economic data will be used toformulate the action plan. Financial support through marketing efforts will then beimplemented to counteract the negative impacts of the BP Oil Spill.• Together, their support of committing financial resources allows GPT to sustain existing airservice and help attract new air service.**PROJECT**PROPOSALCRITICAL MILESTONES• The Gulfport-Biloxi International Airport proposesits Small Community Air ServiceDevelopment Program be evaluated based on the following milestones.• At a minimum, maintaining existing air service levels to key leisure markets – BKG,ATL, and TPA.• 10% - 15% increase in passenger enplanements over three years• The airport, as the sponsor of this grant application, will be responsible for overalladministration of this program.• The Gulfport-Biloxi International Airport will provide quarterly reports to U.S. D.O.T.regarding the progress of our ACTION PLAN as well as an accounting of funds used in pursuitof our objectives.• The airport will also advise U.S. D.O.T. as the objectives of the program are achieved.The effectiveness of the grant proposal objectiveswill be gauged through closelymonitoring existing air service levels and ultimately through improvements in passengervolume and service levels.**PROJECT**PROPOSALCONCLUSIONS• GPT’s proposal will result in: maintaining passenger levels for the airport, infrastructuredevelopment and potentially air service growth, resulting in millions of dollars in economicimpact for the Mississippi Gulf Coast.• It is vital that GPT take the necessary steps to study the short and long term effects on airservice levels as a direct result of the BP Oil Spill. We must understand, act, and continue tomonitor the econometric indicators in an effort tomitigate loss.• Through an aggressive marketing initiative, GPT will have the tools needed to counteractthe negative impacts on the local economy and air service.• Airlines require low risk opportunities in these economically uncertain times. Thevolatility of our market has been increased significantly by the impacts of the BP Oil Spill.• By empowering and utilizing regional support to help off-set risk, the Small Community AirService Grant will support the investment through enhanced / expanded marketing andadvertising.**COMMUNITY**ASSURANCESAssurances that the grant money would be spent in accordance with the grant program stipulations and theproposal outline would be in the form of an independent annual audit, transaction recording standards,functional oversight of transactions by Airport Authority Staff, reporting to elected and appointed officials(not on the Authority staff), and a contractual obligation that designates proper use and expected outcomesof the marketing efforts.Since the primary partners for the airport are municipalities, the reporting and audit requirements arestringent. An annual audit is required to be performed by an outside audit firm. The airport transactions aresubject to all sampling, testing, and audit standards applied by that audit firm to ensure that the informationfairly and materially states the financial condition of the entity. All transactions are recorded using GenerallyAccepted Accounting Principles (GAAP) as established by the Governmental Accounting Standards Board.Compliance testing is performed to ensure that grant funds (considered restricted) are being used asdesignated by the awarding entity.The Finance Department has an Accountant specifically assigned to monitoring grants and reporting theirstatus quarterly. The Executive Director is responsible for approving all transactions on a day-to-day basisand reviewing the expenditures and performance measurement results. Monthly financial reports aredelivered to the elected officials (Airport Board)and the Airport Steering Committee (advisory committee forthe operations of the airport). These reports areavailable for public review.A contract for marketing services will be written to include performance standards. These standards areintended to ensure that the grant money (should webe granted the opportunity) would be spent in a mannerconsistent with the requirements of this program and our proposal.The Airport Authority is traditionally very successful with monitoring grant programs, given the toolsandprocesses in place as standard operating procedure.AcknowledgementsThe Gulfport-Biloxi International Airport and its partner communitiesare grateful for the opportunity to apply for thisgrant. It is our beliefthat these funds are critical to the future of ourairport and region.We believe the opportunities to serve the public are substantial giventhe growth specific to our regional market.

# APPENDIX B

Page 1

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT-OST-2010-0124

SUMMARY INFORMATION

All applicants must submit this information with th eir proposal, along with a completed form SF424 on

http://www.grants.gov

.

A. A PPLICANT 

# I NFORMATION 

# : ( CHECK ALL THAT APPLY 

# )

X 

# Not a Consortium □ 

# Interstate Consortium □ 

# Intrastate Consortium

□ 

# Community now receives EAS subsidy

X 

# Community (or Consortium member) previously receive d a Small Community Grant

If previous recipient:

Date of grant: September 6, 2005

Expiration date of grant: September 6, 2008

B. P UBLIC 

# /P RIVATE 

# P ARTNERSHIPS 

# : (L IST ORGANIZATION NAMES 

# )

Public Private

1. Gulfport-Biloxi Regional Airport Authority 1. Gulf Coast Business Council

2. Harrison County Convention and Visitors Bureau 2. Casino Operators Association

3. Mississippi Development Authority 3. Gulf Coa st Chamber of Commerce

4. 4.

5. 5.

C. P ROJECT 

# P ROPOSAL 

# : ( CHECK ALL THAT APPLY 

# )

X 

# Marketing □ 

# Upgrade Aircraft □ 

# New Route

□ 

# Personnel □ 

# Increase Frequency □ 

# Low Fare Service

□ 

# Travel Bank □ 

# Service Restoration □ 

# Subsidy

□ 

# Surface Transportation □ 

# Regional Service □ 

# Other (specify)

□ 

# Revenue Guarantee □ 

# Launch New Carrier

□ 

# Start Up Cost Offset □ 

# First Service

X 

# Study □ 

# Secure Additional Carrier

# APPENDIX B

Page 2

D. E XISTING 

# L ANDING 

# A IDS AT 

# L OCAL 

# A IRPORT 

# :

X 

# Full ILS X 

# Outer/Middle Marker X 

# Published Instrument Approach

X 

# Localizer □ 

# Other (specify)

E. P ROJECT 

# C OST 

# : 1. Federal amount requested: __$280,000

________________________ 2. State cash financial contribution: _____________

_____________ 3. Local cash financial contribution...

3a. Airport cash funds: ______$125,000

____________________ 3b. Non-airport cash funds: ___$50,000

_______________________ 3c. Total local cash funds (3a. + 3b.): __$175,000

________________________ 4. TOTAL CASH FUNDING (1. + 2. + 3c.): ___$455,000

_______________________ 5. Local funds contributed from already-existing

programs or projects included in line 3c. amount: _

_________________________ 6. Local funds contributed from new commitments

or new resources included in line 3c. amount: __$50 ,000

________________________ 7. Airport In-Kind contribution: __________________

________ (amount & description)

8. Other In-Kind contribution: ____________________

______ (amount & description)

9. TOTAL IN-KIND CONTRIBUTION (7. + 8.): __________

________________

10. TOTAL PROJECT COST (4. + 9.): ____$455,000

______________________

# APPENDIX B

Page 3

F. E NPLANEMENTS 

# :

2000 __476,078 ________ 2004 __442,365 ________ 2008 _488,033

________ 2001 __421,393 ________ 2005 __384,625 ________ 2009 _403,927

________ 2002 __400,533 ________ 2006 __402,905

________ 2003 __430,844 ________ 2007 __457,866

________

G. I S THIS APPLICATION SUBJECT TO REVIEW BY 

# S TATE UNDER 

# E XECUTIVE 

# O RDER 

# 12372 PROCESS 

# ?

□ 

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

review on (date) _____________.

□ 

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

X 

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

H. I S THE 

# A PPLICANT DELINQUENT ON ANY 

# F EDERAL DEBT 

# ? ( IF 

# “ YES 

# ”, PROVIDE EXPLANATION 

# )

X 

# No □ 

# Yes (explain) _____________________________________

________