### APPLICATION UNDER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST -2014-0133

SUMMARY INFORMATION 1



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

coversheet

, a completed standard form SF424 and the full application proposal on
www.grants.gov

.
For your preparation convenience, this Summary Information schedule is located at http://www.dot.gov/policy/aviation- policy/small -community- rural

- air

- service/SCA SDP

A. P ROVIDE THE LEGAL SPO NSOR AND ITS DUN AND BRADSTREET 

### (D&B) DATA UNIVERSAL

NUMBERING SYSTEM 

### (DUNS) NUMBER 

### , INCLUDING 

### +4, EMPLOYEE IDENTIFICAT ION NUMBER



### (EIN) OR TAX ID



### . Legal Sponsor Name:

Name of Signatory Party for Legal Sponsor:

DUNS Number:

EIN/Tax ID:

B. L IST THE 

### N AME OF THE COMMUNITY OR CONSORTIUM OF COM MUNITIES APPLYING 

### :

1.____________________________________________________

2.____________________________________________________

3.____________________________________________________

4.____________________________________________________

C. P ROVIDE THE FULL AIRP ORT NAME AND 

### 3-L ETTER 

### IATA A IRPORT 

### C ODE FOR THE

APPLICANT 

### ( S 

### ) AIRPORT 

### ( S 

### ) (O NLY PROVIDE CODES FOR THE AIRPORT 

### ( S 

### ) THAT ARE ACTUALLY

SEEKING SERVICE 

### ).

1. 2

.

3

. 4

.

1 Note that the Summary Information does not count against the 20

- page limit of the SCASDP application.

### D OES THE AIRPORT SEEKING SERVICE HOLD AN AIRPORT OPERATING CERTIFICATE ISSUED BY

THE 

### F EDERAL 

### A VIATION 

### A DMINISTRATION UNDER 

### 14 CFR P ART 

### 139? (I F 

### “N O 

### ”, P LEASE

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

APPLICATION UNDER 

### P ART 

### 139 IS PENDING 

### .)

Yes No (explain)

______________________________________________________________________________

______________________________________________________________________________

D. L IST THE 

### 2- DIGIT CONGRESSIONAL DISTRICT CODE APPLIC ABLE TO THE SPONSORI NG

ORGANIZATION 

### , AND IF A CONSORTIUM 

### , TO EACH PARTICIPATING COMMUNITY



### .

1. 2

.

3

. 4

.

E. A PPLICANT 

### I NFORMATION 

### : (C HECK 

### A LL 

### T HAT 

### A PPLY 

### )

Not a Consortium Interstate Consortium Intrastate Consortium

Community currently receives subsidized Essential Air Service

Community (or Consortium member) previously received a Small Community Air Service Development Program Grant

If previous recipient: Provide year of grant(s) :_______________________________; and, the text of the grant agreement section(s) setting forth the scope of the grant project :

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

F. P UBLIC 

### /P RIVATE 

### P ARTNERSHIPS 

### : (L IST 

### O RGANIZATION NAMES 

### )

PUBLIC PRIVATE

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.

### G. P ROJECT 

### P ROPOSAL 

### :

1. G RANT 

### G OALS 

### : ( CHECK ALL THAT APPLY 

### )

Launch New Carrier Secure Additional Service Upgrade Aircraft

First Service New Route Service Restoration

Regional Service Surface Transportation Professional Services 2



### Other (explain below)

2. F INANCIAL 

### T OOLS 

### T O 

### B E 

### U SED 

### : ( CHECK ALL THAT APPLY 

### )

Marketing (including Advertising): promotion of the air service to the public

Start

- up Cost Offset : offsetting expenses to assist an air service provider in setting up a

new station and starting new service (for example, ticket counter reconfiguration)

R evenue Guarantee : an agreement with an air service provider setting forth a minimum

guaranteed profit margin, a portion of which is eligible for reimbursement by the

community

Recruitment of Air Carrier: air service development activities to recruit new air service,

including expenses for airport marketers to meet with air service providers to make the

case for new air service

Fee Waivers : waiver of airport fees, such as landing fees, to encourage new ai r service;

counted as in-kind contributions only

Ground Handling Fee : reimbursement of expenses for passenger, cabin, and ramp (below

wing) services provided by third party ground handlers

Travel Bank: travel pledges, or deposited monetary funds, from pa rticipating parties for

the purchas e of air travel on an air carrier , with defined procedures for the subsequent use

of the pledges or the deposited funds; counted as in-kind contributions only

2 “Professional Services” involve a community contracting with a firm to produce a product such as a marketing plan, study, air carrier proposal, etc.

### Other (explain below)

______________________________________________________________________________

______________________________________________________________________________

H. E XISTING 

### L ANDING 

### A IDS AT 

### L OCAL 

### A IRPORT 

### :

Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

I. P ROJECT 

### C OST 

### : D O NOT ENTER TEXT IN SHADED AREA



### L INE 

### D ESCRIPTION 

### S UB 

### T OTAL 

### T OTAL 

### A MOUNT



### 1 Federal amount requested

2 State cash financial contribution

Local cash financial contribution

3a Airport cash funds

3b Non

- airport cash funds

3 Total local cash funds ( 3a + 3b )

4 TOTAL CASH FUNDING ( 1+2+3 )

In

- K ind contribution

5 a Airport In

- Kind contribution **

5b Other In

- Kind contribution **

5 TOTAL IN

- KIND CONTRIBUTION

( 5a + 5b )

6 TOTAL PROJECT COST ( 4+ 5 )

J. IN- KIND CONTRIBUTIONS**

For funds in lines 5a (Airport In

- Kind contribution) and 5b (Other In

- Kind contribution), please

describe the source(s) of fund(s) and the value ($) of each.

### K. I S 

### T HIS 

### A PPLICATION 

### S UBJECT 

### T O 

### R EVIEW 

### B Y AN 

### A FFECTED 

### S T ATE 

### U NDER 

### E XECUTIVE



### O RDER 

### 12372 P ROCESS 

### ?

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

Process for review on (date) _____________.

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

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

L. I S 

### T HE 

### L EAD 

### A PPLICANT OR 

### A NY 

### C O 

### -A PPLICANTS 

### D ELINQUENT 

### O N 

### A NY 

### F EDERAL 

### D EBT 

### ?

(I F 

### “Y ES 

### ”, P ROVIDE 

### E XPLANATION 

### )

No Yes (explain)

______________________________________________________________________________

______________________________________________________________________________
APPLICATION CHECKLIST

I NCLUDED ? I TEM

For Immediate Action

Determine Eligibility

New Grants.gov users must r egister with www.grants.gov

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

and the Authorized Organization R epresenta tive (AOR) is current

. For Submission by 5:00 PM EDT on July 31, 2014

Communities with active SCASDP grants: notify DOT/X50 of intent to terminate existing grant in order to be eligible for selection in FY2014

Complete Application for Federal Domestic Assistance (SF424) via www.grants.gov

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

A pplication of up to 20 one

- sided pages (excluding any letters 

### from the community or an air carrier showing support for the application ) , to include:

• A description of the community’ s air service needs or deficiencies

.

• A strategic plan for meeting those needs under the Small Community Program

.

• A detailed description of the funding necessary for implementation of the community's project.

• An explanation of how the proposed project differs from any previous projects for which the community received SCASDP funds (if applicable).

• Designation of a legal sponsor responsible for adminis tering the program

.

• A motion for confidential treatment (if applicable)

– see Appendix D below.

### Docket DOT

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# Proposal under the Small Community Air Service Development Grant Program



# Golden Triangle Regional Airport

Under 49 U.S.C. 41743 et seg

DUNS # 075457010 

### Congressional District # MS

- 0 1Proposal of Golden Triangle Airport

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# Table of Contents

SUMMARY OF PROPOSAL 3

The Proposed Solution 4



## INTRODUCTION: THE GO LDEN TRIANGLE MARKET 7

Circuitous Routings = Higher Fares 10

Sizing The Traffic Loss 12



## THE GRANT SOLUTION 13

The Market Is Ready

- And Will Be Profitable 13



## GRANT ADMINISTRATION PLAN 15

General Application of Grant Funding 15

Carrier Negotiations & Agreement 15

Program Fund Allocation 16

Marketing & Advertising Support 17

Post

- Grant Support 17



## SUMMARY OF APPLICATI ON 19Proposal of Golden Triangle Airport

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# Summary of Proposal

Golden Triangle Regional Air port (GTR) serves a wide region , including Columbus, Starkville, and West Point, comprising a population area in
excess of 220 ,000.

Over the past decade, Golden Triangle Regional Airport has

become the gateway and the center of $5.5 billion in major industrial development and investment. This includes:

• Mississippi State University: Located approximately 14 miles west of Golden Triangle Regional Airport, Mississippi State University has over 20,000 students

enrolle d and over 1,200 faculty members. Growing relationships with points in Asia.

• Airbus Helicopters: . Over 4 00 employees and headquarters in the DFW Metroplex.

, plus strong traffic generation to Asia and Latin America.

• PACCAR: Manufacturer of Peterbilt and Kenworth trucks. The firm has major facilities in the DFW Metroplex as well as in the Northwest US . Because of the

extensive back

- tracking over ATL, and the higher fares attendant to this routing, this major industry faces si gnificant travel constrictions.

• Severstal International: Russian owned company, with over 650 employees at Columbus, MS location. Total investment in region is $1.8 billion. Growing Asian business relationships.

• Aurora Flight Sciences: Global Aerospace def ense contractor that design s and produce s Unmanned Aerial Vehicles. US headquarters in Washington, DC, with ties to Dallas market driven by Gulfstream production

• Yokohama: Tire company building a $1.2 billion dollar facility

. Very strong Tokyo & Osaka traffic potential.

These expansions have outstripped the levels of air service at GTR. Most cogently, this economic growth is now threatened by three air service deficiencies:

 GTR capacity today is 31.4% below the levels in 2004

– over 100,000 arriving and departing seats annually. 1

 There is no direct westbound access to and from GTR. All travel to points in the Western United States requires lengthy

– and expensive

– back tracking connections over Atlanta.

 Current fares

– based o n nonstop mileage to key destinations, are between 18% and 20% higher than competing airports that have
omni

- directional connectivity over multiple hubs.

Today, despite the influx of this global business, GTR market has only three daily flights

– totaling only 150 seats each way

– to the Delta hub at Atlanta. Because capacity has

1 Source: airline schedules filed for year 2004 v year 1014. Due to mergers & airline consolidation, GTR now
finds itself with

insufficient air s

ervice to support its growing global

- based economyProposal of Golden Triangle Airport

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- 0113 Page 4 not match ed the explosion in the region’s global economic expansion, these flights tend to be full and result in both spillage of traffic, as well as high fares.

Meetings with D elta to increase service to ATL have been unsuccessful, as the carrier claims to have a shortage of available lift. But even with more capacity to ATL, the GTR market will still have the major air service deficiency of no consumer

- convenient access
from th e Western United States, which is where most of the new industries in the region

have the majority of their business.

This is the challenge which represents a growing and economically

- threatening air service deficiency. Because of mergers, cutbacks in fle ets and changes in airline strategies, GTR today is connected to the globe via a very thin and tenuous three flights per day to Atlanta. This makes access to and from the US west a very time

- consuming
back

- track process. It also leaves the region with only one airline system

– Delta.

Discussions have been held with carrier systems that have the ability to address this set
of deficiencies

– lack of capacity and lack of westbound access. However, risk

abatements that will be necessary far outstrip the ability of the community to raise su ch funding. It is here where the grant will be necessary.



## The Proposed Solution

This situation is specifically what the Small Community Air Service Development Program

was created to address. GTR and the region it serves today require additional air serv ice access to satisfy, support, and maintain the economic growth that this region of Mississippi has experienced.

To that end, the Airport and community are requesting a grant in the amount of $ 750 ,000, with a substantial local match , to recruit service to a westbound air gateway.

This would be branded service on the American system to Dallas/Ft.Worth International,

the United system to Houston Intercontinental, or the United system to Denver. A minimum of two daily round

- trip flights are the goal. 2

The grant funds will be matched by $ 500 ,000 in local cash (for a total of $1.25 million) plus fees and waivers representing another $200,000 of in

- kind support. Of the total funding

– DOT and local match , $ 5 0 ,000 is intended for hard marketing of the service, with the remainder being in reserve within a risk

- offset mechanism. As shown in this document, the very high demand represent s a low risk for the grant funding.

This Grant Is Designed To Provide Immediate Results

The traffic demand is in place. The high er fares and lack of air service access that the SCASD program is in place to alleviate are material. This grant will allow the airport to

2 As the Department knows, the American and United brands consist of a combination of certificated carriers, such as ExpressJet, Mesa, Piedmont, Air Wisconsin, TranStates, Chautauqua, SkyWest, Envoy, GoJet and Republic, which operate significant portions of the AA and UA systems. In this proposal, one of these certificated carriers will be the likely operator, and the targeted recipient of the revenue risk

- offset proposed.Proposal of Golden Triangle Airport

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- 0113 Page 5 continue to grow. In the absence o f this assistance, this region o f Mississippi will see stagnation of economic investment in the future.

The grant requested will successfully accomplish the following:

 Resolve Clear Air Service Deficien cies . The grant herein will allow GTR to recruit service to a major westbound air service gateway. Specifically, the aim is

the Am erican Airlines hub at DFW, the United Airlines hub at Denver, or the United Airlines hub at Houston Intercontinental. All of these would represent fundamental relief from the current air service deficiency.

 Engender New Investment . GTR is the site of sub stantial investment by

comp anies such as Airbus Helicopter , with large facilities in Texas. Expansion of their GTR facilities will be dependent on air service access to the West, without the necessity of a four

- hour (at minimum) back

- track over Atlanta.

The Golden Triangle community has worked tirelessly to attract and retain business partners over the last several years. These businesses provide a boon to the local economy, offering good paying jobs and benefits for the local residents.

The air service that this grant will engen der will allow these companies r eassurance that their decisions to establish a presence in the GTR region was the correct one.

Need For Grant Support

The Department is well aware of the current difficult situation in the airline industry. Carriers today seek to avoid risk, and that includes

situations that invol ve initiation of new service, even in markets where the traffic demand is high and the potential for success great.

Today, in light of the enormous financial challenges facing the airline industry, some form of economic risk

- reduction must be in place to attract new service such as that which is proposed in this document.

Preliminary discussions with the carriers have made clear that such would be necessary

to attract this service

.

The Risk

- Abatement Program

The Airport and Community plan to apply $1. 2 million of the total program cash toward a clearly

- defined and agreed

- upon revenue guarantee program for the first year of the proposed service.

The remaining $50 ,000 will be in the form of a well

- targeted marketing program within

the GTR air service r egion. It is noted that westbound access is not service that needs to US Airline fleets are not expanding in total

numbers of aircraft. Therefore, GTR will need strong financial

incentives to resolve this air service deficiency.Proposal of Golden Triangle Airport

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- 0113 Page 6 be strongly promoted

– the local industries currently have strong demand for efficient westbound access, and the new service will see rapid traffic build.

The revenue guarantee will be drawn upon only if reasonable, pre

- determined traffic and revenue generation goals are not met. At the end of the 12

- month period any DOT

revenue

- guarantee funds not used will be relinquished to the Department.

The community believes that this r equest fills both the intent and the spirit of Congress in implementing this program. The community has a pressing air service deficiency that drives fares higher than competing airports, and is threatening to slow the strong economic growth in the Golden Triangle region.

The unique community enthusiasm for business development that will support this new service is showcased by the growing investment in the region by diverse manufacturing companies such as Severstal Steel, Weyerhaeuser Corporation Printin g Paper

, Airbus Helicopter, PACCAR, and Baldor Electric Company. These companies, and ones like them, have many options as to where to establish facilities. The fact that they did so in the Golden Triangle region speaks volumes about their vision for the f uture in the area, and increased air service would certainly reinforce those expectations.

Grant Administration

This application is submitted by the Golden Triangle Regional Airport Authority and will be the organization responsible for the administration of the grant funds. The community support for this application is broad and encompasses the entire business base of the region.

Project Sponsor s & Community Partner

The official sponsor of this project is the Golden Triangle Regional Airpo rt Authority.

The community partnership will be directed by the Columbus

- Lowndes Community Development LINK

The community and the Airport appreciate the time and efforts of the Department in reviewing this application, and look forward to a favorable dec ision. Please direct any correspondence regarding this matter to:

Mr. Michael P. Hainsey

Executive Director Golden Triangle Regional Airport 2080 Airport Road Columbus, Mississippi 39701

662

- 327

- 4422Proposal of Golden Triangle Airport

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# Introduction: The Golden Triangle Market

The Gol den Triangle catchment area comprises all or parts of 12 counties, with a population base of approximately 220,000 people.

Golden Triangle’s stature as a developing commercial and industrial center is strengthened by its location at the junction of two ma jor Interstate highway arteries. From an air service perspective, however, these highways facilitate access to Jackson, Birmingham, and even now

- “ dehubbed ” Memphis

, where lower fares and nonstop

service to both DFW and IAH are still in place. This grant wi ll substantially reduce that leakage and allow for more convenient service for the GTR market area.

The western US business travel base at GTR is sensitive to the fact that traveling through Atlanta to connect to points west is a major inconvenience and drain on

valuable time. The additional alternative access to the DFW , DEN or IAH hub will be a major upgrade to address this deficiency.



## Golden Triangle: The Case for Westbound Service

Given the economic development in the GTR region, the need for we stbound connectivity

– which this grant will make possible

- is of the utmost importance to theProposal of Golden Triangle Airport

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- 0113 Page 8 economic future of Mississippi. The following entities have difficulty in expanding and attracting new business with the current air service, which requi res expensive back

- haul flying over Atlanta.

While the Delta service to Atlanta has excellent connectivity to the east coast and Europe, the route leaves a major deficiency in access to the western US.

PACCAR

, a truck manufacturer, has extensive operations in the US Northwest, with its

Kenworth and Peterbilt factories. Airbus Helicopters has major facilities and their headquarters in the DFW region. Yokohama , a global tire manufacturer i s building a plant in the GTR region, and acce ss to and from Asia and Japan is now limited to the 50

- seat Delta flights that are not only typically booked full, but involve substantially more travel time and expense than accessing connecting opportunities from DFW, IAH, or

DEN.

A factor often not ful ly recognized is the competitive situation among major universities such as Mississippi State. MSU competes nationally and globally for the best staff, research teams, and students. The difficulty in accessing GTR puts this top

- tier center of learning at a major disadvantage.Proposal of Golden Triangle Airport

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- 0113 Page 9 GTR Today Is Only “Half Served”

Today, the need for US and global access for GTR is more critical than ever. The growth in the local economic and industrial base represents demand for service across the

nation and to international points as well. Much of the industrial growth has been wit h companies with roots in the E U. The current Delta service

– at a bare

- bones three daily

50

- seat RJ flights

– only partially addresses this need. However, the community is partially cut off from th e nation west of the Mississippi by virtue of lack of access to a western airline hub gateway.

The result is that western access to and from GTR involves substantially more flying

– at
least six hours per round trip in additional travel time. 3

For example, the flying travel distance today between GTR and DFW (where there is substantial demand from PACCAR and Airbus Helicopter, among others) is almost 50% more than a nonstop flight would be to American’s DFW hub. Access to Houston represents 60% more flying.

3 This is 1.2 hours to Atlanta, at least one hour for connect time, and retracing the miles west.Proposal of Golden Triangle Airport

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## Circuitous Routings = Higher Fares

Because the current and deficient air service requires consumers to and from the Western United States to connect over ATL and then backtrack, the total miles flown are much higher than at other airports with more adequate access. Therefore, when we compare GTR to other regional airports, based on the fares per mile based on the nonstop great

- circle distance, it is apparent that GTR has materially higher costs of air

travel.

Because of the air service deficiency at GTR, consumers suffer much higher airfares that at other airports in the region. A review of the average one

- way fare paid at GTR v other points in the region underscores this: 4

4 Full Year 2013, fares reported to DOT, and expressed as one

- way averages, including federal fees and taxes.Proposal of Golden Triangle Airport

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- way fare paid at GTR in 201 3 was even higher than Huntsville, which is often reported by the media as having among the highest fares in

the nation.

To key western destinations, particularly some that have strong current or growing business ties with the GTR region, the variance in average fares paid by consumers is often astronomically higher than the averages shown above. Reviewing average one

way fares paid in 2013 , including taxes and federal fees, it is clear that the lack of direct access to the west is resulting in higher trav el costs and depressed demand. 5

Note that two key destinations that have strong military

- related communities of interest

with Columbus Air Force Base

– Colorado Springs and San Antonio

– have very wide fare disparity with Jackson.

The Airport and the community would respectfully submit that these data clearly demonstrate the air service challenge that Golden Triangle Regional Airport is facing, particularly as it continues to compete for industrial investment in the area.

5 Average one

- way fares paid , including federal fees and taxe s for full year 2010. Source: DB1B data analyzed by Aviation DataMiner.Proposal of Golden Triangle Airport

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## Sizing The Traffic Los s

To size the loss in traffic demand that this grant can help recapture, key destinations in

the western US to/from JAN/GTR region were listed, based on year 2013 traffic.

This was then related to the passengers

- to

- population for each airport:

Wit hout question, GTR is not capturing the westbound traffic it is now generating.

Service to DFW , DEN or IAH, as outlined in this application, will not only capture this traffic, but can also stimulate new traffic demand. ( Note that the analysis covers only the largest western destinations. )Proposal of Golden Triangle Airport

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# The Grant Solution

In the new consolidated airline industry, there are only a limited number of gateway options open to GTR in regard to attaining westbound access. These are the branded systems of United/DEN, United/IAH, and American/DFW.

Any of these three access gateways would satisfy the current air service deficiency at GTR, and open the region to new economic opportunities in the Western United States. In this proposal, data for access to DFW are show as examples of the very high potential

for this service to be successful. A pattern of two daily round

- trip flights with 50

- seat jet airliners is the baseline service level proposed.



## The Market Is Ready

- And Will Be Profitable

Based on lea kage reviews shown in the prior section , GTR today is losing at least 72,000 annual O&D passengers due to the lack of efficient access to and from the Western

United States.

GTR

- DFW represents a huge opportunity not only for the region, but for the Americ an Airlines system. To be conservative, the GTR projections were based on the known and established DFW service operated by American Airlines from much larger Jackson. Adjustments were made for market size and the longer length of haul to DFW. Traffic

pro jections were then adjusted to assume an 80% capture rate. No adjustment was made for expected market stimulation due to the entry of nonstop flights , nor the expected levels of new Asian traffic generated by Yokohama Tire

.Proposal of Golden Triangle Airport

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- 0113 Page 14 In addition, no adjustment was made for the expected major increase in Asian traffic demand with the completion of the Yokohama Tire factory.

These data are very conservative, and are clear indications that the grant dollars invested in GTR will not only provide a strong increase i n air service, but will do so at very low risk to the DOT.

Analyses of United/IAH produced a similar result. United/DEN is also a potentiality, but the longer stage length makes it more problematic.Proposal of Golden Triangle Airport

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# Grant Administration Plan

General Application of Gra nt Funding

The grant requested in this application will be applied only to provide assurances regarding the levels of revenue the target airline will attain, based on reasonable, pre

negotiated passenger projections.

Fundamentally, this is not a subsidy

– if the revenue targets are met, no funds will be due the carrier. The program will simply provide a safety net to offset the airline’s legitimate initial risks in opening a new nonstop market.

This approach has been used successfully at a num ber of other small airports with the assistance of SCASD program grants. It will also be successful at Golden Triangle Regional Airport.



## Carrier Negotiations & Agreement

Upon grant award, the Airport will initiate negotiations with the specific operating
carriers within the American or United systems . The Airport will propose the following, with the final agreement subject to Department approval:

 Provision for two daily (reduced week

- end) frequencies, timed to connect with

the carrier systems’ flight ban ks at the connecting hub

– American ’s system at

DFW , United ’s system at Denver, or United ’s system at IAH;

 A pre

- agreed per

- segment cost for the operation. This will include a fuel factor (escalator and deflator) and will be based on historical published costs f or E

- Jet, ERJ (or CRJ) aircraft, and will vary depending on the specific operator. The cost will include a reasonable profit hurdle to be agreed upon.

 It is noted that there is considerable current and pent

- up demand for the access that the grant

- supported service will provide. Therefore, the risk

- offset will be for one year only.

 Reliability will be crucial to the success of the service. Therefore, strict schedule performance standards will be 98% controllable flight completion, 95% on

- time (w/in 15 minutes of schedule) arrivals, based on airline

- controllable factors.

 The agreement will contain stipulations on reasonable pricing and availability of discount seat inventories on the flights. The Airport will require the airline to provide updates r egarding pricing and availability on the route to assure that fares approximate those in similar markets operated by the airline.

 Airline operational and revenue performance will monitored monthly and reported to DOT on a quarterly basis. The final accoun ting of any revenue support will be made at the end of the 12

- month period.Proposal of Golden Triangle Airport

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- 0113 Page 16  Determination of any risk

- offset dollars owed to the airline will be made at the
end of the grant period, adjusted for any service failures. In no case will the

carrier be due mor e than the total of the revenue support portion of the

program.

The Airport will not make any agreement without the Department’s review and approval. The Airport will provide the Department with a complete summary of the revenue support agreement that is consummated with the air carrier that will operate the route.

The Airport will provide the Department with a progress report on the revenue support program on a quarterly basis, or as the Department may otherwise specify.



## Program Fund Allocation

The program is intended primarily provide a revenue guarantee to reduce the carrier’s initial risk in entering and building the GTR market. In addition, there will be a local marketing effort that will engender local awareness and support for the new service.

In addition, the new service will qualify under the airport’s air service enhancement program, and will represent approximately $200,000 in in

- kind and fee waivers , which are in line with the FAA’s restrictions and policies on incentive programs

.

Sup port

– Negotiations & Related Activities

Promptly upon approval of this application, GTR staff will initiate negotiations with the target carrier systems.

These will include clear cost and revenue goals agreed

- upon in advance. The proposed flight schedul e will be reviewed for connectivity. The Airport will have the option of cancelling the program with sufficient notice to the carrier should the traffic and revenue not build sufficiently during the 12

- month period.

Revenue Guarantee Component

The targ et carrier would be required to provide a minimum of two round

- trip flights daily, using at minimum 50

- seat jets. The program would establish strict standards, including a schedule completion requirement of 98%, ex

- weather.

The revenue guarantee will be structured based on projected local traffic as well as a mechanism for credit for beyond

- hub revenues generated by the new service. With theProposal of Golden Triangle Airport

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- funded revenue off

- set. Minimum revenue goals will be established, and monitored monthly. Any variance would be computed at the end of the grant period

.

Based upon the traffic projections completed by the Airport, it is expe cted that the
market will attain self

- sufficiency in a reasonably quick period. The community would agree to relinquish any unused grant funds back to the Department after 12 months

from start of service.



## Marketing & Advertising Support

The Community int ends to implement an aggressive targeted program of advertising and marketing to assure that the new service builds traffic quickly and with minimum draw on the revenue guarantee. These will include:

 Pre

- Operations Support: It is critical that the community be made aware of the new service, but within a reasonable timeframe before it begins. As illustrated in the data herein, it is believed that the ramp period to economically

- viable bookings will be short, but the local print and electronic media w ill be used to promote the service with a blitz 30

- day before the first flight. 6

 Civic Contact: Community groups will be tapped to allow Airport staff to present the new service at key membership functions.

 Airport Events: In conjunction with the targe t carrier, events at Golden triangle Regional Airport will be planned to raise the profile of both the new service as

well as the incumbent Delta service to Atlanta



## Post

- Grant Support

Golden Triangle Regional Airport has an aggressive marketing program focused on the new emerging industries establishing facilities in the region. Direct contact with travel departments at important businesses such as Airbus Helicopter , P ACCAR , and others will assure that ridership remains strong after the 12

- month grant pe riod. In addition, the Airport and community have resources to market the service within the region.

Because the majority of the passenger traffic is expected to be business

- driven, the Airport will continually work with the target airline to assure that the carrier’s marketing

is well

- focused on the key corporations that have facilities in this region of Mississippi.

6 Booking decisions are now made very close to travel date. A media blitz earlier than 30 days will not be fully effective

.Proposal of Golden Triangle Airport

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# Past Air Service Development Activities

The airport and the community have worked very hard to retain existing service and

recruit new carriers to the market. In the very tough environment of the past five years, it has been a very difficult challenge.

On a routine basis, the Airport has meetings with incumbent Delta, as well as with target new entrant carriers. As the Department is awar e, however, the pull

- down of hubbing levels at STL, CVG, and most recently, MEM, CLE and CVG has resulted in much

- reduced opportunities to attract new service.



## Prior Grant Applications

The Golden Triangle Regional Airport was awarded a grant in year 2007 which was for a

risk

- abatement program specifically to attract a second carrier to the airport. After grant award, the Department allowed the grant to be used to underwrite additional incumbent Northwest/Delta service. The service was a success in a very short period of less than a

year . It was discontinued , however, when Delta reduced and ultimately eliminated the
former Northwest hub at Memphis , as a result of its merger with that carrier.

This current application is different in goal and in intent. The influx of new businesses to the region in the past five years has created a pressing need for access to points in

Texas and the Northwest US , as well as for points in the West



## The Grant Wil l Create Competitive Balance

Golden Triangle Regional Airport is now served by only one airline system, and only to one of that carrier’s connecting hubs. While the community is grateful for this air service, there is a greater need for the business comm unity as well as the leisure

travelers.

The extensive economic growth and the expectation of future growth demands enhanced connectivity to the west, and DFW or IAH support that connectivity. Healthy competition among airline systems will help reduce far es, add greater route efficiency, and allow the consumer to make more than just one choice when going on a business trip or a vacation.

The Golden Triangle Regional Airport Authority would respectfully submit that the Small Community Air Service Developm ent Grant Program was designed to address this type of situation. It is further noted that the grant will result in materially

- improved air service, with minimal risk to the scarce funds allocated by Congress to this program.Proposal of Golden Triangle Airport

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# Summary of Application

The Golden Triangle Regional Airport Authority believes that this application is consistent with the goals of the Small Community Air Service Development Grant Program.

 It addresses a demonstrable air service deficiency

– lack of western connectivity and high fares that are causing substantial leakage and lost economic impact.

 It will open an entire region of Mississippi to the Western United

States.

 It will foster goodwill with the business community that the region has worked so hard to build up ove r the last several years. The business community needs easy, affordable access to the western US.

 It will help to b ring fare discipline to the GTR market. In 201 3 , consumers at GTR actually paid on average 2 1 % more than consumers at nearby
Jackson , (to so me western destinations, as much as 80% more ) resulting in significant leakage and lost economic impact to the Golden Triangle region.

Based on these data, the Airport would ask the department for favorable consideration to this application.August 1, 2014



### Brooke Chapman

Associate Director Small Community Air Service Department Office of Aviation Analysis U.S. Department of Trans portation 1200 New Jersey Ave., SE Washington, DC 20590

Room W86

- 307

Dear M s

. Chapman,

On behalf of Mississippi State University, I am writing in support of the Small Community Air Service Grant application that has been submitted by the Golden Triangle Regional Airport (GTR ).

The purpose of the airport’s application is to address air service deficiencies and increase access to

the natio nal transportation system for the region. Specifically, the grant proposal addresses the lack of available capacity to/from the western United States. As an organization who utilizes GTR as its primary airport for travel purposes, we support additional cap acity and an increase in nonstop destinations for the greater GTR community. We also believe that increased capacity and a new destination will allow for healthy competition among carriers at GTR.

Mississippi State University is the largest user of the GTR airport, and has faculty, staff and students flying every direction worldwide. As a top

- tier research university, we have meetings, conferences, and research endeavors in every state, and many countries. Currently to travel west, we are required to fly first to Atlanta, which adds time and inconvenience to these trips. Our u niversity is growing in terms of both students and research programs, thus this limitation will be even more so in the

future.

W e urge the Departmen t of Transportation to give the Golden Triangle Regional Airport’s application favorable consideration. Please feel free to contact me with any questions.

Sincerely,

David R. Shaw, Vice President for Research and Economic DevelopmentA irbus Helicopters, Inc.
1782 Airport Road
Columbus, MS 39701
(662) 327-6226
www.airbushelicoptersinc.com CONFIDENTIALITY NOTICE: This document may contain confidential,
privileged, or otherwise protected information. If you are not the intended
recipient, please do not use, copy, forward, or disclose the contents of this
document. Instead, please inform the sender that you received the document

and then discard it. July 21, 2014

Brooke Chapman, Associate Director Small Community Air Service Department Office of Aviation Analysis U.S. Department of Transportation 1200 New Jersey Ave., SE Washington, DC 20590

Room W86-307

Dear Ms. Chapman,

On behalf of Airbus Helicopters, Inc. – Columbus Miss issippi, I am writing to request U.S. Department of Transportation approval of the Small Community Air Service Grant application submitted by the Golden Triangle Regional Airport (GTR).

The purpose of the airport’s application is to address air service deficiencies and increas e access to the national transportation system for the region. S pecifically, the grant proposal addresse s the lack of available access and capacity to/from the western United States from GTR.

Airbus Helicopters – Columbus, Mississippi, is located on the GTR airport and utilizes GTR as its primary airport for commercial travel purposes, when we are able. Westbound acce ss, significantly relevant for this grant application, is a substantial problem for Airbus Helic opters. Our U.S. company headquarters is located in the greater Dallas/Fort Worth area, and the lack of service to/from western destinat ions is a deficiency which threatens to limit future economic expansion here in Mississippi, increases operating costs and reduces the productivity of my workforce.

Based on analysis of Airbus Helicopters travel data (uti lizing a quarter-based sampling methodology) since January 2012, the deficiency of access to/from western destinations is significant. Our analysis indicates, on average, we experience over 408 western-related commercial flight segm ents annually. Many, if not most, of these segments require employees to drive via personally operated vehicles to departure cities with western access. Most frequently, these departure locations are Birmingham, Jackson or Memphis . Return segments require similar use of personally operated vehicles or rental cars via these same locations. Las tly, as I look forward at future workload, I anticipate a greater than 10% growth in air travel requirements to we stern destinations due to the addition of a commercial helicopter assembly line in Mississippi which begi ns production in September of this year.

The impact of this deficiency in western air service access to/from GTR is not unique to Airbus Helicopters. The entire region suffers from this deficiency. Increased ec onomic investment in the Go lden Triangle Region over the past several years has added thousands of industrial jobs, but commercial air service, in general, has not kept pace with this growth. Additionally, this growth is exacerbated by the lack of western access via GTR. The region’s air travel needs exceed the current level of air service. In addition to western access and capacity, an increase in nonstop destinations for the greater GTR community is severely needed.

For these specific and empirical reas ons, I urge the Department of Transpo rtation to give the Golden Triangle Regional Airport’s application favorable consideration. If I can answer any additional questions, I can be reached via

662-244-6300.

Very respectfully,

Sam Adcock VP and General Manager