i 

# Proposal

Consortium of West Wendover, Nevada

United States Department of Transportation Office of Aviation Analysis Small Community Air Service Development Program

Application under the:

-Wendell H. Ford Aviation Investment and Reform Act for the 21 st Century (AIR-21) As Reauthorized by the: -Vision 100-Century of Aviation Reauthorization Act

Proposal Sponsor: Consortium of West Wendover

Contact: Mr. Chris Melville City Manager City of West Wendover 1111 Gene L. Jones Way
PO Box 2825 West Wendover, Nevada 89883

Docket: DOT-OST-2011-0119

Date: August 2, 2011ii SMALL COMMUNITY AIR SERVI CE DEVELOPMENT PROGRAM

DOCKET OST-2011-0119

SUMMARY INFORMATION FOR CONSORTIUM OF WEST WENDOVER:

A. Applicant Information:

_____ Not a Consortium __X___ Intrastate Consortium ____ Interstate Consortium
_____ Community Now Receives EAS Subsidy
__X___ Community (or Consortium mem ber) previously received a SCASDG
If previous recipient: Date of Grant: __2/2010 ___ Expiration Date of Grant: __8/2011

___

B. Public/Private Partnership:

Public: Private:

1. City of West Wendover, Nevada 1. West Wendover Chamber 2. Elko County, Nevada 2. Elko Economic Diversification Auth. 3. Tooele County, Utah 3. Peppermill Casino 4. White Pine County, Nevada 4. Golden Nugget Casino 5. City of Elko, Nevada 5. Nevada Comm. on Economic Dev. 6. City of Ely, Nevada

*Informal or potential members in italics

C. Project Proposal:

__X__ Marketing ______ Upgrade Aircraft __X__ New Route _____ Travel Bank __X__ Serv ice Restoration __X__ Subsidy _____ Surface Transportation _____ Regional Service __X__ Revenue Guarantee __X__ Launch New Carrier __X__ Start-Up Offset Cost ______ First Service _____ Study _____ Secure Addt’l Service ______ Other

D. Existing Landing Aids at Local Airport:

__ Full ILS __ _ Outer/Middle Marker ____ Other

__ _ Localizer _X _ Published Instrument Approach (RNAV)iii E. Project Cost:

Description Sub-Total Total Amount Federal Amount Requested $1,000,000

State cash financial contribution $0

Local cash financial contribution Airport cash funds $0,000 Non-Airport cash funds $50,000

Total local cash funds $50,000 TOTAL CASH FUNDING $50,000

In-kind contribution Airport In-kind contribution $25,000

Other In-kind contribution $25,000 TOTAL IN-KIND CONTRIBUTION $50,000 TOTAL PROJECT COST $1,100,000

F. In-Kind Contributions :

Airport In-Kind Contribution: Waiver of landing fees, terminal rents and other use fees Other In-Kind Contribution: Administrative and staffing

G. Is this application subject to review by State under Executive Order 12372

Process?

___ a. This application was made avail able to the State under Executive Order 12372 Process for review on (date) _________. ___ b. Program is subject to E.O. 12372, but has not been selected by the State for

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

H. Is the Applicant Delinquent on any Federal Debt?

_X _ No ___ Yes (explain)iv TABLE OF CONTENTS

Subject Page

Executive Summary 1

Introduction 5 The Wendover Community 6 The Wendover Airport 7
Factors That Have Affected Air Service 8

Market Research 8 Catchment and Community Profile 9

Market Analysis 11 Potential Passengers 11
Potential Air Service 12 Proposed Fares and Passenger and Revenue Forecast 13 Operations Forecast 14

Action Plan for the Consortium West Wendover 15 Public-Private Partnership 15 Project Goals 15

Action Plan Elements 15 Marketing Program 15 Target Audience 15 Marketing and Media Selection 16 Total Incentive Package 16 Sponsor Participation 16

Performance Measurement 17
Recruitment of Air Service 17 Marketing and Media Plan 17
Air Service Performance 17

Community Support 17

Assurances 18

Appendix A - Letters of SupportConsortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

1 EXECUTIVE SUMMARY

For purposes of this executive summary , we have identified and summarized the bulleted and checked items directly from the 2011 Order to ensure a comprehensive, competitive response. The Order says our application should help communities secure

air service enhancements that will be responsive to their air transportation/air fare needs on a long-term basis after the financ ial support of the grant has ended. Specifically, the Order identifies the follo wing items and our response follows each.

1. Promoting awareness among residents of locally available service. Government and business teaming for informal air service recruitment efforts wereinitiated some years ago and continue to today in consortium communities. These ongoing air service and economic development efforts represent almost every local constituency, and fully meet the intent and sp irit of a public-private partnership. 2. Attracting a new carrier through revenue guarantees or operating cost offsets. As you will read in this application, consortium communities are supporting this air service effort by providing $100,000 worth of support. West Wendover has already spend in excess of $10,000 to obtain scheduled air service. 3. Attracting new forms of service, such as on-demand air taxi service. While the consortium communities are herein intending to attract scheduled air carrier service and this application is written to seek support to make that happen, we believe non-scheduled charter activity will continue to be an important part of the each consortium communities airport’s suite of services. 4. Offering an incumbent carrier financia l or other incentives to lower its fares, increase its frequencies, add new routes, or deploy more suitable aircraft, including upgrading its equipment fr om turboprops to regional jets. Although the Wendover Airport does not have an incumbent scheduled service carrier, we propose to add a new route in cooperation with existing carriers at consortium

communities well. 5. Combining traffic support from surrounding communities with regionalized service through one airport; or providi ng local ground transportation service to improve access to air service to the community and the surrounding area. The Wendover Airport is an important part of the ability of our business community to remain competitive and for the citizenry’s local access to the national air transportation system. Consortium communities believes that that this application will only increase in scope and role of scheduled air service in the region.

In addition, the Order notes these as important:

6. A description of the community's existing air service. A detailed description may be found in the Proposal section of this application. 7. A synopsis of the community's historical service. A detailed description may be found in the Proposal section of this application. 8. A description of the community air ser vice development efforts over the past five years and the results of those efforts. A detailed description may be found in the Proposal section of this application.Consortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

2 9. A description of the community air service needs or deficiencies. A detailed description may be found in the Proposal section of this application. 10. A strategic plan for meeting those needs under the Small Community Program, including: The Action Plan for consortium communities contains the strategic plan. (1) Clear identification of the target audience of each component of the proposed transportation initiative, in cluding all advertising and promotional

efforts. The target audience for this application is the business traveler, the local traveling public and the leisure/gaming visitor. A series of connections is planned with SLC,LAS and RNO with the Wendover, Elko and Ely Airports functioning as a midconnection point. Advertising and marketing is contained in the Action Plan section. Ely is currently an EAS-funded facility but has been identified to be cut from EAS. Ely would only be included in this program if they lost their EAS funding. (2) A realistic timetable for implementation of the grant project. As outlined in the Action Plan section, initia tion of the service would begin as soon as the service is funded with the SCASDP grant and coordinated with the airline. (3) An explanation of how the service will become self-sufficient. As outlined in the Action Plan section, self -sufficiency is demonstrated with a market load factor and yield. Advertising, promotions, and a public relations program are all part of the marketing program to support the service. (4) A clear outline the goals and objectives sought to be achieved. The goal is to bring scheduled air service to the West Wendover, Elko and Ely communities from SLC, RNO and LAS. 11. A description of any public-private partnership that will participate in the project. The Cities of West Wendover, Elko, Ely (consortium communities)and the business community (the public-private partnership) represent public and private local interests in this regard. Other surrounding counties will also benefit and may be asked to participate

in the future. 12. A detailed description of the funding necessary for implementation of the service, including the federal and non-federal contributions.The grant amount requested is $1,000,000 while airport and community cash and inkind contributions total $400,000 for a total proposal amount of $1,400,000. More details

are found in the Action Plan section. 13. An explanation of how the community will ensure that its own funding contribution is spent in the manner proposed. The public-private partnership will ensure that funds are spent timely and wisely. Explanation is found in the Performance Measurement section. 14. A description of how the community will monitor the progress of the grant project and the identity of critical milestones to be met during the life of the grant. A description of our responsiveness in this regard found in the Performance

Measurement section. 15. A description of how the community plans to continue with the project if it is not self-sustaining after the grant award expires.Consortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

3 We believe that we have prepared a very strong proposal for DOT consideration. The West Wendover public-private partnership will commit to $400,000 in local funds, $300,000 of which is local cash. The West Wendover public-private partnership is committed to the nine-month start up period and our estimates of demand herein show potential for increase in demand as the market matures. 16. Designation of a legal sponsor res ponsible for administering the program. The public-private partnership with minimal assistance from the business community and substantial assistance from the West Wendover City Manager and outside consultants will administer the grant and activiti es outlined in the Action Plan section.

Finally, the Order indicates that prio rity will be given to those applicants who competitively answer these inquiries:

17. Air fares are higher than the nationa l average air fares for all communities; Given that no scheduled service exists, this question does not apply. 18. The community or consortium will provide a portion of the cost of the activity from local sources other than airport revenue sources. The public-private partnership proposes to provide $100,000 of cash and in-kind funding for the proposed service over the term of the grant. 19. The community or consortium h as established or will establish a publicprivate partnership to facilitate air carrier service to the public. The public-private partnership is established and has engaged air service recruitment efforts and strategies. 20. The assistance will provide material benefits to a broad segment of the traveling public, including business, edu cational institutions, and other enterprises, whose access to the air system is limited. We expect that the grant will be used to est ablish a new profitable series of routes for an air carrier, a new way for the residents of the West Wendover, Tooele, Elko and potentially White Pine Counties and the surrounding counties (catchment area) to connect to the national air transportation system and provide for a

substantial economic benefit to residents and businesses. 21. The assistance will be used in a timely manner. The public-private partnership anticipates that assistance will be drawn on a monthly

basis until exhausted. 22. The relative size of each applicant community. As can be seen in the Major Issues section of this application, our total catchment area is relatively small totaling 37,664 citizens, fitting the spirit and intent of the Small Community Air Service Program. 23. The geographic location of each applicant, including the community's proximity to larger centers of air service and low-fare service alternatives. Wendover is approximately 120 miles west from Salt Lake City, separated by an Interstate 80 drive. Wendover is approximately 400 miles west from Reno, Nevada separated by an Interstate 80 drive. Wendover is approximately 370 miles west from Las Vegas, Nevada, separated by a State Highway 93 drive. Elko is in between Wendover and Reno and Ely is in between Wendover and Las Vegas.Consortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

4 24. Whether the community's proposal, if successfully implemented, could serve as a working model for other communities. Not only do we believe that this model will be successful, but believe variants of this model have been successful elsewhere. We hope to refine and improve upon previous business models and share that information with those to follow. 25. Current demographic indicators for the community, such as population, income and business activity. The Major Issues section contains this information. 26. The community's demonstrated commitment to and participation in the proposed grant project. The public-private partnership is committed to attracting an air carrier and we believe the service will be sustainable given the market analysis conclusions reached in upcoming pages. 27. The grant amount requested compared with total funds available for all

communities. The public-private partnership believes that our proposed assistance figure is large enough to be effectual but small enough to make us competitive given the $15 million maximum in available assistance this year. 28. The proposed federal grant amount requested compared with the local share

offered. The public-private partnership believes that our proposed share is competitive and comparable to what may be found in other competitive applications.

Note: Page six of the Order specifies that communities without existing air service must be able to demonstrate the ability to meet ce rtificate requirements. The consortium

understands that certificate in this instance refers to:

FAR Part 139. The Wendover, Elko and Ely Airports are currently certified pursuant to this regulation and for all practical purposes operates as a Class I commercial service airport.

FAR Part 121/135. Our partner for purposes of this application, Public Charters, is a certificated airline pursuant to Part 121. Given that the Wendover Airport received commercial service in its past, environmental issues are addressed.

TSA 1542. The Wendover, Elko and Ely Airports currently have an Airport Security

Plan and TSA.Consortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

5 PROPOSAL OF WEST WENDOVER CONSORTIUM

Introduction The West Wendover, Nevada and Wendover, Ut ah communities have, for a number of years, been preparing the W endover Airport (ENV) to be a scheduled commercial service airport. Joining the Wendover communi ty in the public-private partnership are both the Ely and Elko communities. The catc hment area includes T ooele County, Utah and Elko County, Nevada, with a total mark et catchment area of approximately nearly 37,664 people.

Community leaders believe that commercial se rvice to key hubs will help to continue the development of the area gaming busine ss and avail the communities to its

constituencies. To add new air service an air carrier needs to view consortium communities as being more beneficial and prof itable to their long-term goals than other airports. Airlines are seeking route prof itability, good facilities, community support, available resources for long-term improvements, and limited competition. Initial or shortterm incentives such as reduced fees, free rents, and promotional funds will beConsortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

6 necessary to attract new air service.

Scheduled commercial air service at consor tium communities will produce new jobs and bring revenue to the community. Revenue fr om new air service will create visitor expenditures at hotels, restaurants, car rent als, and local shops. The Airport will receive new fees in the form of terminal rents, landing fees, fuel flowage fees, and passenger facility charges. The new airline will purchase fuel, supplies, and crew meals. All of these expenditures will translate into new jobs.

The passenger forecast indicates that t here is a large enough demand to support daily jet flights to SLC, LAS and RNO, includi ng EKO and potentially ELY. Utilizing fares comparable to the average fares at SLC, f lights to these airpor ts using the scheme presented herein, are project ed to be profitable with 9-seat, B-1900 or EMB-120 aircraft.

Major Issues

Due to drastic shifts in the commercial avia tion business model, the air traveler in the
United States has had to endure a much longer transit time through airports, higher load factors and poorer service on the airlines. A reduction of flights and seats to many markets has occurred a capacity is managed and demand increases. Security measures implemented after 9/11 often require air travelers to arri ve at an airport two hours in advance of departure for domesti c flights and three hours in advance of departure for international flights. Traveler s ticketed on commercial air carriers located at hub airports have increasingly endured l onger lines for checking in, checking baggage and for passing through the security gates.

To remain competitive and prof itable, airlines continue to cut costs through reducing employee wages/benefits, staffing levels and discontinuing non-performing routes. Morale issues with remaining airline staff have impacted customer service levels with the traveling public. Several carriers have exited the industry, while mergers and takeovers have affected other major serv ice providers (i.e.-Delta/Northwest; Republic/Frontier, etc.). Industry consoli dation has been expected for some time but seems to be just now gaining momentum wh ile increasing passenger loads continue to strain capacity and profitability even in the current economic uncertainty.

With new marketing strategies to retain market share, increase revenue and enhance brand recognition, commercial air service prov iders are opting to expand air service to smaller airports. This program ma kes it easier for the air traveler that lives or works near these smaller airports to more easily reac h business or personal destinations and also reduces the congestion at the major air ports by spreading out the passengers and flights to other airports.

The Wendover Community The City of West Wendover, Nevada was aw arded a grant on February 18, 2010 from the USDOT under the SCASD Program. The Cit y requested a grant for the purpose ofConsortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

7 completing a study with regar d to the development and impl ementation of a regional scheduled air service program at Wendover Airport.

The Study focused on establishing air servic e to additional communities in the region, Elko and Ely, with flights to Salt Lake City, Reno, and Las Vegas. The Study focused on specific regional needs of the market and took an expansive look at air carrier service possibilities.

The City of West Wendover, Nevada and the City of Wendover, Utah (primary catchment area) have a relatively small popul ation of 6,679 residents, but are the home to over 2,500 hotel and motel rooms. This large room total supports the gaming and recreation industry in the area. The Peppermill Resort Company provides a flight charter program from over 60 cities to Wendover Ai rport utilizing XTRA Airways. Allegiant Air tookover this service in February 2011 wit h MD-83 equipment. This program generates between 46,000 and 50,000 passengers per year.

The study addressed the pa ssenger potential for scheduled passenger air service to Wendover Airport to be operated in addition to the Allegiant Charter service. Passenger forecasts were based upon surveys of t he local residents and local businesses. Comparisons of economic factors and scheduled passengers for other small airports in the region was used as a yardstick to meas ure the potential of the Wendover Airport

market.

The feasibility of scheduled service by vari ous commuter aircraft types was analyzed and a determination of profitability was devel oped. Various airlines were listed as potential air carriers for Wendover Airport. T he consortium was formed as part of this study process.

The Wendover Airport The Wendover Airport is s ponsored, owned and operated by Tooele County, Utah. The Airport's budget is approved by the Tooele County, and annual surplus/deficient is made up solely by the Tooele County. However, We st Wendover is the destination for gaming
visitor. Cash and In-kind contributions made by the City of West Wendover toward this grant request are a subsidy of the City.

The Wendover Airport is desi gnated a Part 139, Class I facilit y. Wendover Airport has completed major improvements to its r unways. The Wendover Airport presently accommodates charter operations, small cargo, air taxi operations, general aviation, aircraft storage, and aircraft maintenance and r epair. Wendover Airport abuts Interstate 80, giving it easy access to all communities in the catchment area.

The Wendover Airport has an 8,000 foot by 150 foot runway with RNAV and VOR/DME instrument approaches. Also has a secondar y runway 8,000 foot by 100 foot with circling approaches. It can handle all regional jets and standard twin jet aircraft. The Airport has a new 10,000 squar e foot terminal building with three airline ticketingConsortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

8 positions, ramp space for two B-737 or thr ee regional jet aircraft, and large passenger hold room, space for rental car counter s, and a common baggage clai m area. Customer parking is adjacent to the Te rminal and Airport Administration offices are within. The Airport provides easy access to all of We st Wendover, casinos, hotels,attractions, and

Interstate 80.

These are the necessary aviation infrastruc ture items to safely accommodate airline traffic. Initially, passengers will utilize the existing terminal building; with check-in counters for airlines, a departure lounge with security and a common baggage claim area all exist within the building. Discussi ons with TSA regarding space, security equipment and personnel have already occurred and await a scheduled carrier.

Factors That Have Affected Air Service

Wendover is a tourist destination with casinos , entertainment, gol f, nature tours, and

outdoor activities. Leisure and recreation activities include golf, hiking, auto and motorcycle speed racing, ATV activities, fi shing, softball and soccer tournaments.

Consortium economies have expanded in a big way with mining and natural resources development. Also occurring is development of warehousing and storage and light manufacturing. Consortium communities are f unctionally a low cost alternative to Reno, Salt Lake City and other markets in the region.

The Wendover community is home to five casinos and a new 1,000 seat entertainment center. The catchment area has approximat ely 2,500 hotel and motel rooms with low rates ranging from $29 to $69 per night.The N ugget, Peppermill, Rainbow, and Montego Bay all have conference facilities.

Market Research Over thirty businesses and organizations were contacted to participate in a telephone survey to determine travel needs and patte rns in Wendover. Fifteen participated and these are the findings:

1. Over 70% did not have a need for air trav el for business, they tended to drive for business travel, likely to SLC. 2. Most requested destination was Las Vegas followed by Reno, points in California and Denver. 75% used Salt Lake City and 25% used Elko. 3. Over 75% of the respondents use air travel for pleasure/holiday trips. Destinations include Mexico, East Coast, points in California. 4. Over 75% of respondents book their ow n travel. Airline selection was based on lowest fare.The respondents liked Southwes t’s “Bag Fly Free” program. Business visitors to Wendover use SLC as the airport of choice and then travel by car. 5. No particular point of origin for visiti ng air travelers. Field sales representatives seem to be visiting Wendover as part of a sa les trip that includes other cities and

communities.Consortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

9 6. The respondents did not object to flying in commuter aircraft but want flight reliability, good schedule, and affordable flights. 7. Flights to Las Vegas should be pric ed in the $100 to $150 range. Free parking and ease of security at Wendover Airport are key advantages.

A online travel survey via Zoomerang was completed to determine market characteristics. Respondents were given 24 questions to answer regarding their air travel needs. 104 local residents responded to the survey. Respondents to the survey were eligible to win prizes at a drawing on October 15. The survey indicated:

1. Of the past five trips, respondents stated that only 4% of the trips

were for business. Almost all travel by automobile. Few of the respondents receive vendors or customers visiting by air.
2. Over 80% of the re spondents are familiar with Wendover Airport and 98% are

interested in airline service at the air port. Over 80% of respondents take 12 or less trips per year. 3. The most requested destinations are Salt Lake City, Las Vegas, and Reno. Of these three, Salt Lake City accounted for 38%, Las Vegas accounted for 34% and Reno accounted for 28%. Respondents were willing to pay up to $150 per trip for air service. 4. More than half of the respondents travel ed by air during the past 12 months and most respondents booked their own trav el (92%). Respondents generally indicated no issue with traveling via commuter aircraft. 5. The airline most frequently used was Delta/Sky West at 40%, with Southwest

second at 28%. Over 90% of the res pondents said they would support new air service at Wendover Airport with over 90% willing to participate in a pre-purchase ticket program.

Catchment Area and Community Profile The Wendover Airport is a convenient air port for the residents of western Utah, northeastern Nevada and the gaming visitor. The primary Wendover Airport catchment area encompasses a population of approximat ely 8,325. Catchment area population growth averaged 5.8% from 2000 to 2008. Household income and per capita income totaled $41,587 and $14,465, respectively. The median age is 23.85 years and the average household size is 3.52 persons.

Primary Market Population West Wendover, NV 4,954 Wendover, UT 1,725 Wells, NV 1,300 Oasis, NV 30 Montello, NV 216 Pilot Valley, NV 100 Sub Total 8,325Consortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

10 Secondary Market Population Elko, NV 16,708 Spring Creek, NV 10,584 Carlin, NV 2,083 Sub Total 29,339 Grand Total 37,664

Catchment area hotels rooms number 2,500.

West Wendover Hotels Rooms Wendover Hotels Rooms Montego Bay 558 Motel 6 130 Nugget 492 Quality Inn 101 Peppermill 302 Bonneville Motel 85 Rainbow 427 Days Inn 80 Red Garter 106 Heritage 52

America’s Best Value 80 Western Ridge 52 Total 1,965 Salt Flats Inn 24

Western Motel 20

Total 544Consortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

11 MARKET ANALYSIS

The consortium market area exhibits the characteristics of other gaming destination markets like Branson, MO.

The catchment area is experiencing posit ive economic growth, and citizens and businesses in the area are seeking a more convenient way to travel by commercial airline than the major airport.

There is a bit of a drive from the market area to SLC and LAS and especially RNO and this creates longer driving times, ex tra hassle and adds to area pollution.

Given a mature air service market along with the primar y catchment area demographics, market potential can effectiv ely accommodate a subs tantial number of passengers and markets.

Potential Passengers

The consortium catchment area for includes all of Elko County and the western part of Tooele County, and potentially White Pine County. Even thoug h the area is large, the population is sparse in comparison to other markets. The primary market for Wendover has been estimated to be 8,325 residents (e xcluding White Pine County) with a beyond market of 29,339 residents.

West Wendover and Wendover have a serv ice based economy with tourism as the primary market. There are over 2,500 hotel and motel rooms in the area supporting the casino’s and the recreation market. Expected growth is in in mining and natural

resources. West Wendover can be a low cost alternative to Reno , Salt Lake City and

other mountain west markets for business.

The Wendover Airport catchment area has about the same population as Page, AZ; Alamosa, CO; Cortez, CO; Ely, NV; Wolf Point, MT and Worland, WY; all Essential Air Service markets that receive subsidy.

The current enplaned passengers at Wendover Airport is greater than the enplaned passengers for Page, Twin Falls, Elko, Cedar Cit y, and Vernal. This is due to the strong Allegiant charter program. Elko Airport has had good passenger participation when it had nonstop service to Reno and continues to hav e sub-optimal loads to Salt Lake City. Ely Airport did best when Scenic Airlines operated the B-1900 aircraft to North Las Vegas Airport in 2005/2006.

Two surveys were conducted to determine air travel trends of local residents and local businesses. Both surveys indicated a lo w demand for business travel by air, but respondents would use air service for leisur e travel needs. Key destinations were Las Vegas, Reno, points in California and Denver . Respondents would use Salt Lake City as a connecting airport.Consortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

12 Since there was no historic al scheduled airline passenger data for Wendover Airport and there is no passenger booking data for the region, the passenger forecast is based on economic allocation, survey of custom ers, casino/hotel i nbound customers, and comparisons to similar markets.

The forecast based on economic allocation and comparison to similar markets resulted in a passenger forecast for Wendover of 7, 500 to 18,600 per year. Based on allocation per hotel room, the forecast jumps to 46,000 passengers. To be conservative, the 18,600 passengers per year was used. The allocation of passengers by route to Salt Lake City, Reno and Las Vegas was based on the customer survey and proposed flights to each market.

It is recommended that initial air service be pr ovided with small turbo prop aircraft in the 9 to 10 passenger configurati on. This will limit initial ri sk. If the passenger demand is greater that what is projec ted, then the air service c an be upgraded to 19 seat turbo prop aircraft.

Potential Air Service

Potential airlines and markets are as follows : Nine Seat Aircraft: P ublic Charters, Grant Aviation, Pacific Wings, Pen Air, Sea Coast, Wright Air. 19-Seat Aircraft: Great Lakes, Vision Air. 3-Seat Aircraft: Sky West, Cape Air.

A decision was reached to solicit Public Charte r for the routes. This carrier has the right equipment for introductory service and has a f antastic potential for success. It is thought that initial air service would be provided with small turbo prop aircraft in the 9 to 10 passenger configuration. This will limit initial risk. If t he passenger demand is greater that what is projected

, then the air service can be upgraded to 19 seat turbo prop

aircraft.

Consortium and Public Charter r epresentatives met at the recent Jumpstart Conference to discuss the proposal. Public Charter executive staff indicated a willingness to investigate the proposal and c onsortium representatives will again meet to flesh out
details. The Consortium feels that Public Charter is supportive of the proposal, but simply needs a bit more time to finalize market planning. Public Charter has provided a support letter found in the Appendix following this narrative.

Both Public Charter and the consortium agree that there will be a ramp-up period of passengers and revenue until the carrier reaches an anticipated market share. In this instance, it is assumed that the ramp- up period will take approximately six months.

Following is a sample schedule that may we ll meet local needs as well as connecting

needs:Consortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

13 POTENTIAL SCHEDULE INCLUDING ELY, NEVADA

Market Depart Arrive Stops Frequency Wendover - Las Vegas 10:00 am 11:15 am 1 Daily Las Vegas - Wendover 11:45 am 3:05 pm 1 Daily
Wendover - Reno 7:00 am 8:10 am 1 ex. Sun 5:00 pm 6:10 pm 1 ex. Sat

Reno - Wendover 8:30 am 11:35 am 1 ex. Sun 6:40 pm 9:45 pm 1 ex. Sat Wendover - Salt Lake City 11:55 am 12:25 pm 0 Daily 3:30 pm 4:00 pm 0 Daily Salt Lake City - Wendover 1:00 pm 1:30 pm 0 Daily 4:30 pm 5:00 pm 0 Daily

Note: ENV and SLC are MT, LAS, RNO and EKO are PT

.

Proposed Fares and Passenger and Revenue Forecast

ENV-EKO-RNO ENV-RNO EKO-RNO Total Passengers 6,160 7,740 13,900 Average Fare $125 $104 Passenger Revenue $770,000 $804,960 $1,574,960 Other Revenue $7,700 $8,050 $15,750 Total Revenue $777,700 $813,010 $1,590,710

ENV-ELY-LAS ENV-LAS ELY-LAS Total Passengers 4,020 3,500 7,520 Average Fare $125 $100 Passenger Revenue $502,500 $350,000 $852,500 Other Revenue $5,025 $3,500 $8,525 Total Revenue $507,525 $353,500 $861,025

ENV-SLC Passengers 8,420 Average Fare $99 Passenger Revenue $833,580 Other Revenue $8,335 Total Revenue $841,915Consortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

14 Operations Forecast Using Public Charter’s 9-seat Cessna Caravan 4,565 block hours is estimated:

Annual Block Block
Caravan Flights Time Hours Wendover - Ely 730 0.6 438 Ely - Las Vegas 730 1.4 1,022 Wendover - Elko 1,250 0.5 625 Elko - Reno 1,250 1.4 1,750 Wendover - Salt Lake City 1,460 0.5 730 Total 5,420 4,565

Or, using larger capacity aircraft, 4,070 block hours is estimated:

B-1900 & Annual Block Block

EMB-120 Flights Time Hours Wendover - Ely 730 0.5 365 Ely - Las Vegas 730 1.25 913 Wendover - Elko 1,250 0.4 500 Elko - Reno 1,250 1.25 1,562 Wendover - Salt Lake City 1,460 0.5 730 Total 5,420 4,070

Then using the route scheme fr om the previous page, the n eed for a $1.3± million dollar subsidy using the 9-seat equipment can be substantiated. Alt hough the below shows a surplus of $1.3 million, th is number includes using Ely’s EAS subsidy funding and a $500,000 air service development grant from t he State of Nevada fo r EKO neither of which may materialize for purposes of th is application. Should these two funding sources be removed the $1.3± million surplus would turn to a $1.1± million deficient.

Route Caravan B-1900 EMB-120 Wendover - Ely - Las Vegas $1,047,025 $635,725 $188,425 Wendover - Elko - Reno ( $46,790) ($692,990) ($1,414,690) Wendover - Salt Lake City $184,915 ($143,585) ($399,085) Total $1,278,730 ($200,850) ($1,625,350)Consortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

15 ACTION PLAN FOR THE CONSORTIUM OF WEST WENDOVER

Public-Private Partnership
The Consortium of West Wendover’s ac tion plan will be administe red through its City Manager, Mr. Chris Melville. The consortium member chamber’s and their members constitute the private portion of the Partnership’s consorti um. Members of the Chamber are key leaders from businesses in the consor tuim area. Both the consortium and the partnership know that continued ec onomic development depends on scheduled air service with connecting flights.

The consortium is committed to completi ng the following Action. The West Wendover City Manager will administer this program wit h Partnership guidance. The City Manager and staff will execute all federal grant offers and process all asso ciated reimbursement requests.

Project Goals The goal of the Partnership is to establish scheduled air service with Public Charters via Wendover Airport to SLC, RNO and LAS, including ELY and EKO. Scheduled air service will allow the community to bette r compete for new business and allow the businesses, industry, government organizati ons and the gaming community as a whole to significantly reduce the amount of travel time and hassle required.

Action Plan Elements The goal of the Action Plan is to address issues associated with the proposed air service that are critical to the long-term succe ss of that service. In this regard, this

Action Plan will address these elements for the City of West Wendover:

1. Recruit new air service for Wendover from Public Charters. 2. Market, promote, and support new air service; spread the word around the

catchment area. 3. Secure additional revenue to support airline service.

Marketing Program The advertising, promotions, public relations program are all part of the marketing program to support new air service. The tar get market for the proposed service is the business and the leisure/gami ng traveler. New marketing dollars will be spent in the local Wendover, Elko and Ely areas. The marketing in these areas will include advertising, promotions, and public relations in the local community. These mediums will be combined in a campaign to introduce the new air service.

Target Audience The target audience for the new air service is the business and leisure traveler. The most effective way to contact this audience is by targeting its consumer at a critical time. All of these targets can be approached utilizing the same advertising media. For a market like Wendover, Ely or Elko, the use of television, radio, newspaper, and outdoorConsortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

16 are the best media. Even though television is the best media for reaching the leisure market, the small amount of air service that will be offered makes television not a suboptimally cost effective media. The Wendover community will find that a combination of local radio, newspaper, and outdoor billboards will be the most cost effective approach to an advertising program. This should also be supplemented with a direct mail program and a series of press releases.

Marketing and Media Selection
Consortium communities’ constituencies c an best be reached by using local newspaper, outdoor, direct mail, and the internet. Upon re view of the local medium for the each market, the following is proposed. Run adverti sements in the Salt Lake Tribune, Deseret News, the Ely Times, the Elko Nevada News, along with the Wendover Times and on various local radio stations along with the network affiliate television stations.

The consortium will coordinate a direct mail pr ogram to its constituencies and to other businesses in the surrounding areas. The development of a pr omotion with area businesses with promotional material at t he airport will also be undertaken. A public relations specialist will be retained to issue press releases and handle press relations.

Total Incentive Package

In order to attract the air service from Public Charters an incentive package has been established which would be suppor tive of their new air service and reduce the risk of

this new air service. The total incent ive package developed herein includes: flight guarantees to off-set initial operating losses, funds for marketing and advertising, and waiver of certain airport fees.

TOTAL INCENTIVE PACKAGE FOR NEW AIR SERVICE

Category Estimated Cost SCASDP Grant $1,000,000 Consortium Cash Contribution $50,000

Consortium In-Kind Contribution $50,000 Total Package Costs $1,100,000

Sponsors Participation The consortium agrees to manage the In-k ind program and obtain at least $50,000 in trade. The Small Community Air Service Development grant is proposed to cover $1,000,000 of the total proposed and the rema ining $50,000 in cash shall be used for either further subsidy or other expenses.

Upon the award of this requested grant, the c onsortium is prepared to launch a drive to

sell tickets in advance under a “travel bank” program and develop a barter program fromConsortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

17 local businesses to fund the marketing, adver tising, and public relations for the new air

service. The consortium will offer an attractive fee program for the first six months of

service.

PERFORMANCE MEASUREMENT

Recruitment of Air Service City of West Wendover represent atives and Public Charters representatives met at the

recent Jumpstart Conference to discuss the proposal. Public Charters executive staff indicated a willingness to investigate the pr oposal and consotrium representatives will again meet with Public Charters staff to flesh out details. West Wendover feels that Public Charters is supportive of the proposal, but simply needs a bit more time to finalize market planning. Public Charters has provided a support letter found in the Appendix following this narrative.

Marketing and Media Plan

The consortium will work within the each community and with a marketing firm to develop a marketing and media plan to support this new air service. This plan will be shared and coordinated through Public Charters.

Air Service Performance
The consortium will need Public Charters to provide monthly repor ts listing the number of passengers carried in all directions, the number of flights flown, the passenger revenue for the month, other revenue for the month, and the cost of the operation. The

consortium will cover the shor tfall of any monthly loss until the grant money has been exhausted. If the carrier achieves profitabilit y earlier than projected, then the cost offset funds will be either be transferred to supplem ent marketing and advertising for the air
service or be refunded to the US DOT. If Pub lic Charters continues to need some form of incentive after the grant funds have been expended, the consorti um will continue to provide marketing and advertising for Public Charters and the consortium will continue

to offer lower fees.

COMMUNITY SUPPORT

Resolutions supporting the proposal of the consortium communities and letters of support from Nevada and Utah’s key congr essional delegation and state and local

lawmakers are included in the Appendices. Various civic and business organizations in

the each consortium communities’ area have also submitted letters and resolutions supporting this proposal and scheduled air serv ice for Wendover Airport and these are included in the Appendices.Consortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

18 ASSURANCES

The Consortium of West Wendover here by provides the U.S. Department of Transportation with the following assurances :

1. It will comply with all of the applicabl e Federal laws, regulations, executive orders, policies, guidelines, and requirement s as they relate to the application, acceptance, and use of the Federal funds for this project.

2. It has legal authority to apply for t he grant, and to finance and carry out the proposed project; that a resolution, mo tion, or similar action has been duly adopted or passed as an official act of t he applicant’s governing body authorizing the filing of the applicati on, including all understanding and assurances contained herein, and directing and authorizing the person identified as the official representative of the applic ant to act in connection with the application and to provide such additional information as may be required.

3. It has access to the funds available for t hat portion of the proj ect costs, which are not to be paid by the United States government. It has sufficient funds to assure operating and maintenance of items funded under the grant agreement, which it

will own or control.

4. It shall keep all project accounts and re cords which fully disclose the amount and disposition by the recipient of the proceeds of the gr ant, the total cost of the project in connection with wh ich the grant is given or used, and the amount or nature of that portion of the cost of the project supplied by other sources, and such other financial records pertinent to the project. The accounts and records shall be kept in accordance with an a ccounting system that will facilitate an effective audit in accordance with the Single Audit Act of 1984.

5. It shall make available for the pur pose of audit and examination, any books, documents, papers, and records of the recipi ent that are pertinent to the grant.

6. It will execute the project in accor dance with the approved program narrative contained in the project application or wit h the modifications similarly approved.

7. It will furnish quarterly reports as requir ed pertaining to the project and activities.Consortuim of West Wendover, Nevada 2011 Small Community Air Serv ice Development Program Application Narrative

19 APPENDIX A