# June 11, 2012

Sponsor: Williamsport Regional Airport

– Williamsport, PA

Tom Hart, Executive Director Congressional Code: PA

- 05
Dun & Bradstreet Number: 075

- 998

- 641 Tax Identification Number (EIN): 24

- 6000743 

### Application for Federal Support for New Air Service via:
Revenue Guarantees Advertising/Marketing Program 

### To Support New Non

- Stop Service from Williamsport, PA to Washington Dulles 

# WILLIAMSPORT REGIONAL AIRPORT , WILLIAMSPORT PA
Application Under the Small Community Air Service Development Program
, Docket DOT

- OST

- 2012

- 0069

Docket DOT

- OST

- 201 2

- 0069Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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TABLE OF CONTENTS

Section Page Introductory Letter of Support 3 Summary Information

– Appendix C 4
Introduction 7 Williamsport: Location, Population and Economy 8 Current and Historical Williamsport Air Service 11 Williamsport Air Service Deficiencies and Needs 15 Williamsport’s Strategic Plan to Improve Local Air Service 18
Air Service Recruitment Efforts and Previous Grand Award 21 Grant Funding Plan and Implementation Timeline 22

A ir Service Partnership and Legal Sponsor 2 3 Summary 24
Silver Airways Letter of Support 25Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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INTRODUCTORY LETTER OF SUPPORTWilliamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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SUMMARY INFORMATION

– APPENDIX C

Small Community Air Service Development Program
Docket DOT

- OST

- 201 2

- 0069



### A. Applicant Information

Not a Consortium Community now receives EAS subsidy
Interstate Consortium Intrastate Consortium Community previously received a Small Community Grant If previous recipient, Date of Grant: September 9, 2005 Expiration date of G rant: September 7, 2008 Federal Funds Requested: $500,000 Carrier(s) Service Obtained: None Destination(s) Served: Target was new westbound service
DOT Grant Closeout Letter was dated January 9, 2009 No Grant funds were expended 

### B. Public/Private Partnership

Public:

1. Williamsport Regional Airport 2. City of Williamsport 3. Lycoming County

Private:

1. Williamsport

- Lycoming Chamber of Commerce 2. 1 st Community Foundation 3. Lycoming Foundation 4. Industrial Properties CorporationWilliamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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C. Project Proposal

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

- Up Co st Offset First Service Study Secure Additional Service Other (Specify)



### D. Existing Landing Aids at Airport

Full ILS Outer/Middle Marker Published Instru ment Approach
Localizer Other:



### E. Project Cost

1. Federal amount requested: $ 500,000
2. State cash financial contribution: $ 0
Local cash financial contribution: 3a. Airport cash funds: $ 50 ,000
3b. Non

- Airport cash funds: $ 5 00 ,000
3. Total local cash funds: $ 5 50

, 000
4. TOTAL CASH FUNDING: $ 1,0 50 ,000
In

- Kind Contribution:

a. Airport In

- Kind contribution: $ Various Fee Waivers: One year waivers of landing and terminal fees
b. Other In

- Kind contribution: $ na

5. TOTAL IN

- KIND CONTRIBUTION: $ Undetermined
6. TOTAL PROJECT COST: $ 1,0 50 ,000 + In

- KindWilliamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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F. In

- Kind Contributions

For funds in lines 4 a (airport in

- kind contribution) and 4 b (other in

- kind contribution), please describe the source(s) of fund(s) for each. Fee Waivers: One year waivers of landing and terminal fe es (airport)



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

This application was made available to the State on ______. Program is subject to review, but has not been selected by the State. Program is not covered.



### H. Is Applicant Delinquent on any Federal Debt?

NoWilliamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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INTRODUCTION I NTRODUCTION

Williamsport, Pennsylvania

, is at the epicenter of a modern day “gold rush”. In this case the “gold” is natural gas; its source is the Marcellus Shale Play. Breakthroughs in mining technology in just the past few years are allowing for the economical mining of huge deposits of natur al gas in
the northeast United States. Williamsport sits atop one of the largest and most easily mined parts of the entire Marcellus. In just the past few years the landscape and economy of Williamsport have been transformed, from a relatively quiet city a nd area that was struggling to cope with
the 2008

- 2009 recession, into a thriving and rapidly growing economy.

However, one element of Williamsport’s economy has not been tran sformed. That is local air service, which is completely inadequate to the immediate and near term future task of supporting all the air travel demand generated by the “gas rush”. Williamsport air service remains today as it was three years ago, two years ago and last year, despite a significant growth in traffic demand. While the air service pattern has remained stagna n t, Williamsport traffic has grown 2 7 % even as average fare has gone up 31% in those three years, 2009

– 2011.

Furthermore, the current three

- trips

- per day turboprop service from US Airways Express to Philadelphia offers little in the way of online connections to the south central U.S., where m any of the nation’s ga s mining companies and mining support companies are based. Williamsport air service is not just stagna n t and limited, it is provided by a carrier and via a hub with weak online connectivity to Texas, Oklahoma and Louisiana

.

There are eight commercial airports in Pennsylvania

, excluding EAS airports and Latrobe, which has only ULCC service. Among these eight airports Williamsport has the highest average fare (three years running) and is the only airport in the group with only one carrier. Williamsport

a ppreciates its long history with US Airways. However, t oday the Williamsport economy is booming, and that boom is part of a national effort to move toward energy independence. But Williamsport’s ability to contribute to that goal is hindered b y woefully in adequate air service

. T he need for more air service is crystal clear. If ever there was an airport and air service situation for which the SCASD grant program was designed to address, Williamsport in 2012 is it. This
document will outline in detail the com pelling case for $500,000 in Grant funding , matched by $ 5 0 0,000 in local cash (non airport) funding, to aid Williamsport in recruiting desperately needed
additional air service. 

### “Williamsport, Pennsylvania is at the epicenter of a modern day “gold rush.”Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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WILLIAMSPORT: LOCAT I O N , POPULATION AND ECONOMY I NT

Location and Population

– Williamsport is located in north central Pennsylvania

. It is the largest city and principal commercial center for an area of about 40 miles in any direction. The city and the neighboring cities of South Williamsport, Loyalsock, Montoursville and Duboist own, all sit aside the Susquehanna River. State Highways 15 and 220 cross at Williamsport and Interstate I

- 80 is less than 20 miles south of the city.

The one hour drive radius for the Williamsport Regional Airport (blue shaded area) has a population of 396,316. The two hour drive radius (red shaded area) has a population of 2,297,828. The Williamsport MSA, which consists of Lycoming County, has a 2010 Census population of 116,111. The Lock Haven Micropolitan Statistical Area, immediately to the west of
W illiamsport had a 2010 population of 39,238, making the combined area population 155,349. The city of Williamsport has a population of just under 30,000. Throughout the first decade of thisWilliamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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century regional populations have been steady, with a measurable d ecline for most of the decade and recent upswings in population driven by energy mining and related activities.

Williamsport’s Economy

– The U.S. Bureau of Economic Analysis ranked Williamsport as the seventh fastest growing city in the nation in 2010. S ite Selection Ma g azine placed Williamsport third in the nation in its 2011 Governors Cup rankings of metropolitan areas for local efforts and successes in economic development and recruitment of new businesses to the area. All of this
success and accolade is the result of a huge increase in energy mining activity in the Williamsport area, especially to the north and west of the city . Williamsport is a focus point of regional mining activity because of its highway and rail line infrastructure and proximity to areas of the Marcellus Play that are most favorable for mining.

The chart at right illustrates how gas mining activity is focused on the Williamsport area, with the gold shaded boxes showing that in 2011 47% of statewide drilling permits and 35% of wells drilled were in the Williamsport area.

Energy mining activity has caused the construction of five brand name hotels in Williamsport in just the past two years and local occupancy rates are among the highest in the northeast.

The Williamsport/Lyco ming County Chamber of Commerce has identified twenty major Mining Companies or Mining support companies active in the Williamsport region and a total of 105 energy mining companies have built, purchased or
leased facilities in the area
since 2009. There is significant potential for oil mining to complement the gas extraction. The major oil companies say they see energy mining activity in
the Wil liamsport region continuing for many decades.Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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The energy companies complement an already diverse local economy.

Major non

- mining employment sectors in the Williamsport region include Health Care, heavy and light manufacturing, pharmaceuticals and consume r products.

There are seven institutions of higher learning within 39 miles of Williamsport with nearly 30,000 enrolled students and over 2,400 faculty and staff. Leading this group is the Pennsylvania College of Technology for Penn State University. This campus is primarily dedicated to offering training and education in fields related to energy mining, in support of the area mining activities.

The strong growth curve of this diverse economy is reflected in the area’s unemployment rate,
which has dropp ed as energy mining related job growth absorbs post recession joblessness.

Williamsport is known nationally as the home of the Little League World Series. This annual tournament happens for eleven days every August. The event draws hundreds of thousands of
visitors from around the nation and around the world. Little League International is based in Williamsport and manages over 7,000 Little League operations in 84 countries.Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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CURRENT AND HISTORICAL WILLIAMSPORT AIR SERVICE NT

Air Service: The Williamsport Regional Airport has had air service since 1929. For the past few decades service has been provided by US Airways Express carriers

. Current service, which has been essentially unchanged in frequency, equipment, schedule or hub since 2008, consists of
three daily Dash 8

- 100 round trips to Philadelphia. Looking forward, the US Airways website offers essentially the same schedule and equipment for all months of 2012.



### Williamsport Capacity, Domestic Traffic and Average Fare: 2004

- 2011

Traffic and Capacity: Williamsport air service capacity is down 49% since 2004. The main driver of this capacity decline w as the loss of US Express Pittsburgh service in 200 4

, which was part of U S Airways ending all connecting hub activities at that airport. Remarkably, Williamsport traffic is only down 25% since the loss of dual hub service in 2004 , owing to the energy mining boom

. Williamsport traffic is actually up 27% since 2009. The 27% increase in domestic traffic in two years is despite the average fare paid increasing 31% in the same period.

US Airways filed notice to terminate Williamsport air service in 2008 wi th intention to bid to serve the city with EAS subsidy, citing rapidly increasing fuel costs . In the ensuing EAS bidding process
N orthwest Airlink was designated to s erve Williamsport. At that point US Airways withdrew the
terminat ion notice, citing lower fuel costs in the second half of 2008, and has continued to serve the city subsidy free since 2008. At no time did Williamsport receive subsidized EAS service. 200 192 189

165

140

99 97 102
88 80 68 65 62 52 61 66 $151 $176 $215

$204 $211

$188 $210 $246

$100 $120 $140 $160 $180 $200 $220 $240 $260

0 50 100 150 200 250

2004 2005 2006 2007 2008 2009 2010 2011 Average Fare

Seats and Passengers per D ay Each W ay Seats per Day Each Way Traffic PDEW Domestic Avg FareWilliamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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Traffic History: Williamsport traffic peaked in 2004 at over 66,000 annual DOT reported domestic and international O&D. Pittsburgh service ended that year and a gradual traffic decline began, culminating in a traffic low point in 2009 of 40,420 domestic and international O&D.



## Williamsport Domestic and International Traffic: 2003

- 2011

The Philadelphia Hub: The US Airways hub at Philadelphia offers 438 peak day departures to 135
domestic and international destinations.Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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Top Markets and Average Fares: Travel demand related to mining activities in the Williamsport region is illustrated by the fact that Dallas and Houston are the top two destinations in 2011



## Williamsport’s Top 25 Domestic Destinations: 2011

With the exception of destinations in Florida and the Carolinas, the average fare in every top Williamsport market is well over $200, in some cases over $300.



## Average Fare in Williamsport's Top 25 Markets: 2011Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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Regional Traffic Demand: T he great demand for air travel between Williamsport and the south
central United States is shown by the growth in O &D traffic associated with those city p airs. 

## O&D TRAFFIC WITH TEXAS, OKLAHOMA & LOUISIANA BY QUARTER 2008

- 2011

The above chart shows O&D traffic between Williamsport and every city in Texas, Oklahoma and Louisiana, by quarter, for 2008 to 2011. Traffic between Williamsport and th is region h as tripled in three years. The average fare hovers measurably above $300.

Alternative Airports: With the exception of State College, all other alternative airports are between 1.6 hours and 4.2 hours drive from Williamsport. Access to large scale low fare service requires a three plus hour drive to Philadelphia or four plus hour drive to Pittsburgh, with drive time in each case depending significantly on time of day highway congestion in each of those large metro areas.

Delta and US Airways are common denominators at each alternative airport. Allegiant and
Frontier offer less

- than

- daily service to leisure destinations at each airport they serve.Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 15

WILLIAMSPORT AIR SERVICE DEFICIENCIES AND NEEDS

Williamsport’s Air Service Deficiencies

– Williamsport’s economy is three years into a major transformation, with energy mining leaping to the economic forefront to complement health care and manufacturing as key economic sectors. Yet Williamsport’s air service is stuck in a time

warp in 2009, ess entially unchanged despite the economic boom in the region. One aspect of energy mining is mobility; mining expertise is not home grown, in the United States is it based primarily in the South Central states of Texas, Oklahoma and Louisiana. The experts an d specialists with the many and varied skill sets involved in exploring, drilling and extracting natural gas travel the world. Oversight of exploration, new well drilling and then extraction at mature well sites requires the ability for management and tech nocrats to move efficiently around the
nation and the world. Williamsport is fortunate to sit atop one of the most lucrative mining zones in the Marcellus Play and it has excellent highway and railroad infrastructure needed for mining.

However, Williamspo rt’s air service is still in 2009. It was three trips a day to Philadelphia then, it ’ s three trips to Philadelphia now. Excluding EAS cities and Latrobe (which only has less

- than

- daily ULCC service from Spirit) Williamsport is the only commercial airport in Pennsylvania with only one carrier service. Williamsport has the highest domestic average fare in the state, and has had it for three years running

, and five of the last six years

. Despite a growing local economy Williamsport capacity, measured in seats , is essentially the same as 2009; with no indication from US Airways of any forthcoming changes. With the payload restrictions of the older turboprops that US Airways uses at William s port , the segment to Philadelphia had a 7 6 % load factor in 2011,
based o n onboard passengers vs. actual payload capability. And there are challenges to Philadelphia as a hub; it is one of the most delay

- prone hub airports in the nation and, due to the nature of US Airway’s route system, has limited online connectivity to the s outh central U.S.

So Williamsport has all the highways, railroads, building sites and labor force needed to support regional mining, it completely lacks the local air service to support those efforts.

Capacity Deficiencies

- The current service pattern at Williamsport is three daily US Airways Express round trips to Philadelphia, operated with 37

- seat Dash

- 8 100 aircraft. However, the venerable Dash 8s take major payload limitations and at Williamsport actual capacity is ab out
3 3 passengers per flight. This means that Williamsport’s reported load factors and real load factors are very different.Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 16

Williamsport’s true load factor, onboard passengers divided by sellable seats , was 76% in 2011.

Williamsport’s significant capa city
deficiencies are even clearer in
the measure of air service capacity as a ratio to local population. Williamsport has the lowest number of airline seats per capita of any airport in its region, by a significant margin.

Highest Average Fares

- Year 2011 DOT traffic statistics show over 700 airports with domestic traffic generation. On that raw list Williamsport has the 51 st highest average fare at $245.74. Excluding Alaska airports and statistically insignificant reports, Williamsport has the 40 th hi ghest average fare in the nation. Williamsport’s nationwide peer group, airports with between 40,000 and 60,000 annual domestic O&D, has 26 airports.
Six of those are Alaska or Puerto Rico and three are EAS. Among the remaining 17 airports Williamsport has the third highest average fare, behind only
Williston and Texarkana. As the chart illustrates, in 2011 Williamsport also ha d the highest average fare in Pennsylvania , consider ing all fifteen commercial airports, including the six with EAS. In theWilliamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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past six years Williamsport has had the state’s highest average fare each year except compared to State College in 2008 and in comparison to Johnstown (EAS) for several years.

Hub Issues

- US Airways Philadelphia hub is one of the most delay

- prone airports in the country. Short haul
feeder routes like IPT

– PHL suffer disproportionally at delay

- prone hubs. The FAA tends to put the most gate holds on short haul segments and US Airways naturally will sacrifice short segment turboprops to preserve
capa city for mainline at times that weather restricts airport capacity to well below scheduled service demand. Thus, Williamsport’s air service is not just stagna n t and limited in capacity; i t also is delay prone, with monthly or annualized on time performance in the 70 % range. Since the airport has no other air carrier or hub route, PHL delays control Williamsport’s fate in terms of traveler perception of local air service reliability.

While US Airways and its Express carrier system is a fine airline netwo rk, that network, and its Philadelphia hub in particular, has very limited reach into the south central United States.

Williamsport Air Service Needs

– Williamsport desperately needs new air service capacity and a new hub or connecting point option. It is the only non

- EAS airport in Pennsylvania (excluding
Latrobe with its less

- than

- daily ULCC service) with only one air carrier. Service options, in terms of frequency, seat availability and scope of online connections, are limited. Airfares are the highest in the state and among the highest in the country.

Service to a second hub, especially if by a second carrier, would introduce additional capacity, additional travel options, and drive down average fares to a more reasonable level in comparison to other a irports in the region.Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 18

WILLIAMSPORT’S STRATEGIC PLAN TO IMPROVE LOCAL AIR SERVICE

The Williamsport Regional Airport, working closely with its public and private sector partners, is determined to bring local air service up to the standards necessary to support the strong economic growth the community and surrounding region are experiencing.

Proposed New Service

– Williamsport believes the most logical and viable new air service for the region would be in the form of United Airlines branded flights to that carrier’s large hub at Washington Dulles. At Dulles United has 300 peak day departures to over 100 domestic and
international cities. United is the largest airline in the world and its merger with Continental Airlines gives the combined carrier a huge network in south central United States, anchored by
the hub at Houston.

The Williamsport

– Dulles segment is 16 5 miles and an estimated 1.1 block hours of scheduled flight time. In addition to opening up greatly expanded online connections, Dulles service would also create a local traffic market between Williamsport and the Washington D.C. area. It is a 4.4
hour dr ive and about 220 miles from Williamsport to either downtown Washington

, D.C. or to the Virginia suburbs and 3.6 hours drive and 190 miles to the Baltimore area. All of these drive times, of course, do not consider the potential for traffic delays and cong estion. Thus, Williamsport

– Dulles service will create local traffic, both business and leisure.

Service Impact

– Given the pent up demand for air service in the Williamsport region and associated traffic leakage to other airports because Williamsport does not have enough seats, a reasonable fare or good connectivity to desired destination s , a United branded service to Dulles is estimated to immediately stimulate Williamsport traffic by 50%. Williamsport traffic so far in 2012 is up 14% from 2011 and 20 12 total O&D is projected to be 5 7,205 , with existing service. Imposition of United branded Dulles service and the associated 50% stimulation would make
2013 traffic 8 5,808 O&D.

The Dulles hub would create new single

- connect online connections to more tha n a dozen cities and open up online double

- connect options to almost every city in Texas, Oklahoma and Louisiana, via Houston. In 2011 United/Continental offered 1,085,293 nonstop seats to seven cities in those states via Dulles while US Airways had 901,61 3 nonstop seats to only three cities in the those states via Philadelphia.. Dulles had 20% more seats to more than twice as many
destinations.Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 19

Williamsport Connections via the United/Continental Hub at Dulles

Traffic, Revenue and Operational Forecast

– This forecast of results for new air service at Williamsport assumes new United coded service is offered by Silver Airways using SF340 equipment and a status quo of service by incumbent US Airways.

The forecast calls for United Express service to capt ure 40% of the total domestic and international traffic generated at Williamsport in the first year of new service, assumed to beWilliamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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2013. In 2011 Williamsport generated 47,850 domestic O&D at $245.73 and 2,960 international O&D at $619.58 for a combined 50,8 10 O&D at $267.51. So far in 2012 Williamsport traffic is up 14% and that is the basis of assuming 2012 total traffic will be 57,205, with modest fare growth.

In the forecast new United Airlines coded SF340 service from Williamsport to Dulles would begin in January of 2013, for purposes of generating a calendar year forecast. The total market would grow 50% in 2013 from the estimated 2012 baseline. Silver Airways SF340 operating costs are estimated from carrier EAS filings. The carrier has only just this year begun SF340 operations and indicated costs of operation are higher than historical norms for the type . The carrier is projected to have 16 of the type in operation by year end 2012 and synergies of scale should allow for operating costs below those sh own here in beyond 2012.

Based on the initial high Silver Airways operating costs the new Williamsport

– Dulles service is forecast to have an operating loss of $725,688 the first year, based on a 40% total Williamsport market share capture. The route is f orecast to move modestly to profit in the second year of operation, with carrier market share increasing to 45%. The new service is forecast to have a measurable temperance on average fares, with Williamsport’s combined domestic and international average f are in 2013 dropping 9% from the projected 2012 fare.

This forecast is conservative in every way. Williamsport traffic is growing significantly even with just the stagna n t incumbent carrier service with all its capacity, average fare, connectivity and hub ATC related reliability limitations. Imposition of a second carrier and second hub, especially when the brand of that carrier is United and the hub is Dulles, will conservatively result in a 50% overall market size stimulation and a first year 40% market share. Please note that United and US Airways are both Star Alliance so Williamsport residents with US Airways frequent flyer status can earn miles on United coded flights from day one of United branded service. This gives the new
carrier and service immed iate local brand affinity.

Alternative Service Options

– Silver Airways United branded Dulles service is one option for Williamsport

. United regional jet service, either from a United Express partner with at

- risk capacity or from an allocation of the United Airlines Capacity Purchase Agreement regional jet fleet are other options for gaining Dulles service. Please note that Williamsport has never seen a regional jet so market stimulation and share capture would be significant i f such a service was deployed. US Airways is also an option of lesser preference. Williamsport could recruit and support a single daily regional jet service to Char lotte, complementing existing Philadelphia service.Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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AIR SERVICE RECRUITMENT EFFORTS AND PREVIOUS GRANT AWARD

Williamsport has aggressively recruited new air service for many years.

Recruitment Efforts

– Representatives of the Williamsport Airport and community have had face

to

- face or conference call meetings with various airline representatives 22 times since 2007. We
have hired consultants who specialize in helping airports retain and recruit air service

.

2007

– We met with Northwest regarding Detroit service.
2008

– We had conference call meetings with Colgan, Gulfstream and American Eagle.
2009

– Met with Allegiant Air in Las Vegas.
2010

– H eadquarters meetings with SkyWest and Continental

. 2011

– We met with US Airways, Silver Airways, Pinnacle Airlines and Direct Air at a Small Community Air Service Conference.
2012

– A ttended the Network Conference in Tampa and met with American Eagle, United, Silver Airways, Allegiant and Public Charters

. 2007

– 2012: Each year we meet with US Airways in Phoenix to discuss our market situation.

The annual marketing and promotional budget of the Williamsport Regional Airport averages about $ 27,000 . We are capable of spending much more than that, however, the current limited nature of our air service and the high average fares limit what we can market and promote. We work closely with the US Airways Pricing Department to promote US Airways network f are sales.

Williamsport’s Previous Grant Award

– Williamsport was awarded a SCASD Grant in 2005. The goal of that $500,000 Grant was “Recruit an air carrier to provide daily westbound service at Williamsport Regional Airport in order to lower fares, incre ase competition and reduce passenger leakage to other airports.” The Grant intended to use risk abatement funds to support new westbound service and the Airport intended to expand its marketing efforts in support of the new carrier. The Grant primarily tar geted Northwest Airlines service to Detroit. Extensive conversations took place with Northwest but an agreement for new service did not occur. In 2007 the Grant was extended for one year. In 2008 Northwest became focused on a merger
with Delta and US Airwa ys filed for EAS subsidy at Williamsport (later withdrawn). The grant expired in September 2008 and we received a formal notification of Grant closeout from the Department via letter on January 9, 2009. No Grant funds were spent. The 2005 Grant application and award was for westbound service. This application is for southbound service.Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 22

GRANT FUNDING PLAN AND IMPLEMENTATION TIMELINE

Grant Funding Amounts and Allocation

– The Williamsport Regional Airport proposes Small Community Air Service Development Grant funding of $500,000. The Airport’s community partners will match the $500,000 with $ 5 0 0,000 of local (non airport) funding and the Airport will provide $50,000 in marketing funds , making total cash Gran t funding $ 1,0 50,000. The Airport will provide for the new carrier or new service one year of a complete waiver of all airport related
fees

. Second year and beyond marketing and promotional funding will be an allocation of Airport marketing funds by market share of the new service.

Williamsport’s $ 5 0 0 ,000 in matching funds will
come from the Chamber and two local
Foundations. If more funding is needed, above and beyond that of this Grant and the matching funds, in order to preserve new air service, that funding will be forthcoming from these two source s and others in the city and region. Air service
is recognized locally as a vital local infrastructure , just like rail lines and highway bridges.

Williamsport is fully aware of the importance of marketing and promotion to the success of local
air service. The total of $ 1,0 50,000 includes a $50,000 allocation of Airport marketing funds. The Airport will work with the recruited airline to determine the optimum allocation of the $ 1,0 00,000 in Department and local non

- Airport funding between revenue guarantee and marketing. Any agreement between Williamsport and an airline will be subject to Department review

.

Implementation Timeline

– The timeline for implementing a Grant will depend on when the grant award is announced and a grant contract is signed and then on when an air carrier might begin grant supported service

. The timeline at right assumes an August, 2012 award. It also assumes that a carrier will be able to promptly start service, which is not
assured or assumed. We request that our grant be valid for three years, given the fickle nature of
the airline business.Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 23

AIR SERVICE PARTNERSHIP AND LEGAL SPONSOR

Williamsport’s Public Private Partnership for Air Service Improvement

– In 2007 the Williamsport Regional Airport formally created a community Air Service Improvement Committee, In 2009, with the local Chamber assuming so much of the effort to assist the Airport with air service recruitment, the Committee was folded into a new group consisting of key persons from the
Chamber and representative s of the Industrial Properties Corporation , the 1st Community Foundation and the Lycoming Foundation

. Th is group will work with the Airport and elected
officials and will con stitute the public private partnership that will support this Grant and air
service that is the result of its award and use.

The Airport formed a n air service recruitment focused partnership with the Williamsport

- Lycoming Chamber of Commerce in 2010. In addition to its membership in the public private partnership, the Chamber has worked extensively with the Airport on airline recruitment and funded consultant and airline meeting costs. The Chamber’s relentless and focused recruitment efforts related to energy mining were a key reason Williamsport won third place in Site M agazine’s 2011 Governor’s Cup rankings of community economic activity efforts na tionwide. The determination with which Williamsport recruits new business and supports those businesses once they come to town bodes well for Williamsport’s efforts to recruit and support new air service enabled by
award of a SCASD Grant.

Legal Sponsor

– The legal sponsor of this Grant application and the administrator of a Grant award will be the Williamsport Regional Airport. The Executive Director of the Airport is Mr. Tom Hart. Mr. Hart has extensive experience administrating grant funding and pla ys an active role in ongoing efforts by the airport to retain existing air service and recruit new air service.
Mr. Tom Hart , Executive Director, Williamsport Regional Airport 700 Airport Road, Suite 204

, Montoursville, PA 17754
507 368 2444 thart 2 @comcast.netWilliamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 24

SUMMARY

The past three years have seen an enormous growth in energy mining in the Williamsport area, with over 2,200 gas wells drilled locally and thousands of jobs created supporting the drilling and extraction processes. This economic surge perfectly complements the traditional local economic sectors of health care and manufacturing. In short, Williamsport ’s economy is growing in every way except one

. And that one is air service

.

Williamsport’s local air service is almost exactly what it was three years ago. And three years ago (2009) that air service was down some 50% in capacity from 2004 , when second hub service to Pittsburgh was lost

. The loss of capacity despite a strong economy is reflected i n very high load factors at Williamsport. The load factor for the Philadelphia route in 2011 was reported as 64% (up 10 points from 2004), however, f actoring in the payload realities of Williamsport’s Dash 8

- 100s, the load factor for the Philadelphia ro u te i n 2011 was really 76%.

As a result of limited air service, Wil liamsport air fares are the highest in Pennsylvania and are among the highest in the nation , ranking 40 th highest in the lower 48 among over 600 airports.
And Williamsport is the only non

- EAS airport in the state with only one carrier service, with the

exc eption of Latrobe and its less than daily ULCC service.

Furthermore, existing air service is to a delay

- prone hub that has limited online connectivity west of the Mississippi and particularly to the south central United States

, where many of the nation’s mining companies and mining support companies are based.

Despite the low frequency service, high load factors, very high average fares , a delay

- prone hub and limited connectivity of the incumbent carrier and hub, Williamsport t raffic is up 27% since 2009. This confirms the strong economy and implies that Williamsport’s traffic potential is perhaps twice that of its current generation.

This Grant application requests $500,000, to be matched by $ 5 00,000 in local cash non airport funding. Combined with Airport marketing funding of $50,000, the total of $ 1,0 50,000 will enable Williamsport to recruit and fund possible startup phase losses for critically needed new air service to Washington Dulles on the United Airlines brand and code . The Small Community Air Service Development Program was designed precisely for a situation such as that of Williamsport. The Airport and its public and private sector partners urge the Department to award this Grant.Williamsport Regional Airport • Small Community Air Service Development Grant Proposal • June 2012 

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