Proposal under the Small Community 

Air Service Development Program 

Docket #: DOT-OST-2010-0124

Legal sponsor: City of Eugene 

DUNS: 931267301 

Congressional District Code: OR-4 

Contact: Tim M. Doll AAE – Airport Director 

Eugene Airport 

28855 Lockheed Drive • Eugene, OR 97402 

(541) 682-5430 • tim.m.doll@ci.eugene.or.us 

Eugene Airport 

Eugene, Oregon 


Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport 

Prepared by 

Table of Contents

Table of Contents 

Page 

Summary Information ........................................................1

Proposal Highlights .............................................................2

Higher than Average Airfares ............................................................ 2

Community Cost Contribution .......................................................... 2

Public-Private Partnership.................................................................. 3

Material Benefits .............................................................................. 3

Use of Funds in a Timely Fashion ...................................................... 3

Air Service Environment .....................................................4

Market Reach and Potential .............................................................. 4

Large and Diverse Employers ............................................................ 4

The Academic Heart of Oregon ........................................................ 5

Air Service – Existing and Historical ..................................7

Existing Air Service ........................................................................... 7

Historical Air Service ......................................................................... 7

Extenuating Factors that have Affected Air Service .......................... 10

Past Air Service Development Efforts ............................................... 10

Air Service Needs and Deficiencies..................................11

Major Origin/Destination Markets Not Served Adequately ............... 11

Higher Than Average Fares ............................................................. 12

Strategic Plan – Air Service ..............................................13

Project Goals .................................................................................. 13

Proposed Air Service ....................................................................... 13

Airline Participation ........................................................................ 13

Market Analysis .............................................................................. 14

Alternate Plan ................................................................................ 15

Strategic Plan – Implementation and Funding ...............16

Public-Private Partnership................................................................ 16

Incentive and Support Plan ............................................................. 17

Project Continuation and Sustainability ........................................... 19

Strategic Plan Funding .................................................................... 19

Schedule and Monitoring .................................................20

Milestones for Timely Completion of Project ................................... 20

Strategic Plan Monitoring Program ................................................. 21

Appendix A. Airline and Community Support ................22

Appendix B. Detailed Market Analysis ............................33

Appendix C. Marketing and Public Relations Plan .........40

Situation Analysis ........................................................................... 40

Market Segmentation ..................................................................... 42

Marketing Strategy ......................................................................... 45

Short and Long-Term Projections .................................................... 49

Conclusion ..................................................................................... 50
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Summary Information

1 

Summary Information 

A. Applicant Information: 

(Check all that apply) 

X

Not a 

Consortium 

Interstate 

Consortium 

Intrastate 

Consortium 

Community now receives EAS subsidy

Community (or Consortium member) previously 

received a Small Community Grant 

If previous recipient, expiration date of grant: N/A

B. Public/Private Partnerships: 

(List organization names) 

Public Private

City of Eugene/

Eugene Airport 

Eugene Air Service 

Community Partnership 

Lane County 

Government 

C. Project Proposal: 

(Check all that apply) 

X Marketing Regional Service 

Personnel Launch New Carrier

Travel Bank First Service

Surface Transportation Secure Additional 

Carrier 

X Revenue Guarantee X New Route 

X Start Up Cost Offset Low Fare Service 

Study Subsidy

Upgrade Aircraft Other (specify): 

__________ 

Increase Frequency

Service Restoration

D. Existing Landing Aids at Local Airport: 

X Full ILS X Published Instrument Approach 

X Localizer X Outer/Middle Marker 

Other (specify):

E. Project Cost: 

1. Federal amount requested: $500,000

2. State cash financial contribution: $0

3. Local cash financial contribution...

3a. Airport cash funds: $111,300

3b. Non-airport cash funds: $55,000

3c. Total local cash funds (3a.+3b.) $166,300

4. TOTAL CASH FUNDING (1.+ 2.+3c.) $666,300

5. Local funds contributed from 

already-existing programs or projects 

included in line 3c. amount: $0 

6. Local funds contributed from new

commitments or new resources 

included in line 3c. amount: $166,300 

7. Airport In-Kind contribution: 

(Landing fee waiver, marketing) $54,300 

8. Other In-Kind contribution:

(Marketing) $60,500 

9. TOTAL IN-KIND CONTRIBUTION 

(7.+8.): $114,800 

10. TOTAL PROJECT COST (4.+9.): $781,100

F. Enplanements: 

2000 376,522 2005 360,049

2001 364,049 2006 360,495

2002 312,735 2007 379,389

2003 301,339 2008 359,960

2004 347,672 2009 339,813

* Revenue passengers only 

G. Is this application subject to review by State 

under Executive Order 12372 process? 

a. This application was made available to the State

under the Executive Order 12372. Process for 

review on (date) _____________. 

b. Program is subject to E.O. 12372, but has not 

been selected by the State for review. 

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

H. Is the Applicant delinquent on any Federal 

debt? (if “yes”, provide explanation) 

No 

Yes (explain)

X

X
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Proposal Highlights

2 

Proposal Highlights 

his Small Community Air Service Development Program grant application for 

the Eugene Airport meets the criteria of Docket DOT-OST-2010-0124. The 

City of Eugene, the airport sponsor, is requesting $500,000 in federal 

assistance to implement a $781,100 air service initiative. Eugene Airport has not 

received a prior grant award associated with this Small Community Air Service 

Development Program. 

The project goal is to improve air service to high demand markets in California. The 

community has strong ties with California, yet today, the region is missing a vital 

link to several of its key cities. New service to California is the region’s top priority, 

particularly to San Jose to connect the high tech industries of Eugene with like 

companies in the Silicon Valley. Also San Jose International Airport is a connecting 

gateway to destinations in southern California, Texas, Hawaii and Mexico as well as 

major hubs in the East. The Strategic Plan, Alaska Airlines/Horizon Air service to 

San Jose, will achieve the project goal. 

Higher than Average Airfares 

The Eugene Airport catchment area is underserved and overpriced. California is the 

largest air service market from the Eugene, Springfield and Corvallis market 

consisting of 25 percent of the region’s travelers. Missing in Eugene Airport’s 

service pattern is an air link to San Jose and other key California cities. While 

Eugene Airport captures 56 percent of its total market at the local airport, San Jose 

retention is only 15 percent. Airfares at Eugene Airport average nine percent higher 

than the fares at Portland International Airport and 12 percent higher than the 

national average (calendar year 2009). Service to a new high demand California 

market like San Jose will reduce passenger diversion while lowering airfares to San 

Jose and other destinations in California. 

Community Cost Contribution 

It is estimated that a $455,000 revenue guarantee and $227,100 two-year 

marketing program will be required for a one-flight service pattern to San Jose. The 

research and analysis necessary to determine the viability of Eugene-San Jose service 

has been completed (refer to Appendix B). The route forecast is positive. Feedback 

from Alaska/Horizon has been encouraging and Horizon’s letter of support is 

included as Appendix A. However, an incentive package to mitigate the start-up 

year’s risks will be required. Accordingly, the Airport and its partners have created a 

Strategic Plan that addresses the economic risks that Alaska/Horizon will face during 

start-up. 

T

This section contains: 

Highlights of the City of 

Eugene’s grant application 

to demonstrate how this 

application meets the 

priorities of the Program. 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Proposal Highlights

3 

To support this air service initiative, the Airport and community will fund 36 percent 

of the proposed $781,100 Strategic Plan. Non-airport revenue sources will fund 

eight percent ($55,000) of the $666,300 cash requirement. 

Public-Private Partnership 

The City of Eugene/Eugene Airport has formed a public-private partnership with 

Lane County Government and the Eugene Air Service Community Partnership. Core 

partners of the Eugene Air Service Community Partnership include: the City of 

Eugene/Eugene Airport, Eugene Area Chamber of Commerce, Lane Metro 

Partnership, Springfield Chamber of Commerce and Travel Lane County. This 

partnership has worked together for many years to improve air service at the 

Eugene Airport. 

Material Benefits 

Eugene Airport serves a region with a population size of nearly 686,000. Local 

computer tech, agriculture, bio-tech, wine production, education and health care all 

have extensive ties to central California and San Jose. A link between Eugene and 

San Jose will meet the needs of these sectors including business, education 

institutions and other enterprises. 

Use of Funds in a Timely Fashion 

The public-private partnership has a solid schedule and strategic plan to ensure 

timely use of the funds. Meetings have been held with Alaska/Horizon in 

anticipation of this grant application, and the route is under consideration.

Currently the route is

under review by

Alaska

Airlines/Horizon Air,

and they continue to

express interest. A

support letter has

been provided by

Horizon.
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Air Service Environment 

4 

Air Service Environment 

he Eugene Airport is located in Oregon’s second largest metropolitan area, 

Eugene/Springfield, Oregon. However, the Airport serves a much broader 

part of the state’s population and geography. This section shows the broad 

segment of the traveling public, including businesses, educational institutions and 

other enterprises that will benefit from the proposed Strategic Plan. 

Market Reach and Potential 

Exhibit 3.1 depicts the market area the Eugene Airport serves. It has an estimated 

population of nearly 686,000 and represents the cities of Eugene, Springfield, 

Corvallis, Albany and Roseburg which are the second, eighth, 10th, 13th, and 23rd 

largest cities in the state, respectively. In fact, Eugene Airport serves the majority of 

the state’s non-Portland residents. All of these cities are within a one-hour drive of 

the Eugene Airport which is significantly shorter than the drive to Portland 

International Airport. 

While Eugene Airport served 699,557 passengers (revenue and non-revenue) during 

2009, an estimated 618,554 passengers (44 percent) diverted from the area and 

utilized Portland International Airport. The logical assumption is that these travelers 

made the drive to Portland for lower fares and/or better service opportunities. 

Depending on traffic, the drive to the alternate airport, Portland International 

Airport, takes two and one-quarter hours to three and one-half hours. 

Large and Diverse Employers 

Around the Eugene Airport exists a large and diverse 

group of employers with a national and international 

presence and a high demand for air travel. 

Technology companies like Hewlett-Packard, Life 

Technologies and Symantec; lumber mills and 

construction companies like Roseboro Lumber and 

Wildish Construction; manufacturers like Monaco 

Coach, GloryBee Natural Foods, Bulk Handling 

Systems and A&K Development Company; and 

healthcare institutions like PeaceHealth Regional 

Medical Center and McKenzie-Willamette Medical 

Center all have significant demand for air travel and 

connections in California. Table 3.1, next page, 

shows the largest employers in the region. Many of

these employers have ties to California. 

T

EXHIBIT 3.1 AIRPORT CATCHMENT AREA 

This section contains:

Description of the 

Eugene/Springfield 

community in relation to air 

service to demonstrate the 

benefit to a broad segment 

of the traveling public. 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Air Service Environment 

5 

TABLE 3.1 TOP EMPLOYERS 

EMPLOYER INDUSTRY 

PeaceHealth Healthcare 

University of Oregon Higher Education 

Oregon State University Higher Education 

Eugene School District Education 

Hewlett-Packard High Technology 

Lane Community College Higher Education 

Lane County Government Government 

City of Eugene Government 

Springfield School District Education 

Symantec High Technology 

McKenzie-Willamette Medical Center Healthcare 

Bethel School District Education 

Roseboro Lumber Forest Products 

Wildish Construction Construction 

Peace Harbor Hospital Healthcare 

Three Rivers Casino & Hotel Resort 

Pacific Source Health Plans Insurance 

Monaco Coach Transportation Manufacturing 

Life Technologies Bio-Technology 

A and K Development Company Equipment Manufacturing

Bulk Handling Systems Equipment Manufacturing 

GloryBee Natural Foods Food Distribution 

Source: Lane Metro Partnership 

 

The Academic Heart of Oregon 

The Eugene Airport serves the academic centers of the University of Oregon, 

Oregon State University and Western Oregon University. University of Oregon is 

located in Eugene, Oregon State University is 35 miles north in Corvallis, and 

Western Oregon University is 50 miles north in Monmouth. As Table 3.2 shows, 

approximately 55 percent of the students within the Oregon University System 

attend these three universities. Also, Eugene Airport is close to three of the state’s 

largest community colleges, Lane Community College, Linn-Benton Community 

College and Umpqua Community College and various other small private 

institutions. All in all, an estimated 70,000 students attend schools in the Eugene 

Airport’s service area, and these schools are growing fast. In the past decade total 

enrollment within the Oregon University System has grown 31 percent. 

TABLE 3.2 UNIVERSITY ENROLLMENT 

UNIVERSITY 

ENROLLMENT 

2000-

01 

2001-

02 

2002-

03 

2003-

04 

2004-

05 

2005-

06 

2006-

07 

2007-

08 

2008-

09 

2009-

10 

Eastern Oregon University 2,784 2,978 3,418 3,287 3,338 3,533 3,425 3,433 3,666 3,957 

Oregon Institute of Technology 2,842 3,088 3,139 3,236 3,373 3,351 3,157 3,318 3,525 3,927 

Oregon State University 16,777 18,032 18,774 18,974 19,159 19,236 19,362 19,753 20,320 21,969 

Portland State University 19,029 20,185 21,841 23,117 23,486 24,015 24,284 24,999 26,587 27,972 

Southern Oregon University 5,502 5,469 5,478 5,505 5,161 4,989 5,002 4,836 5,082 5,104 

University of Oregon 17,843 19,008 20,044 20,034 20,339 20,394 20,388 20,376 21,507 22,386 

Western Oregon University 4,731 4,878 5,030 5,032 4,772 4,879 4,889 5,037 5,349 5,654 

Total 69,508 73,638 77,724 79,185 79,628 80,397 80,507 81,752 86,036 90,969 

Source: Oregon University System 2010 Performance Report 

An estimated 70,000

students attend

schools in the Eugene

Airport’s service area,

and these schools are

growing fast.
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Air Service Environment 

6 

The economic impact on the local economy and Oregon is 

easy to see. Whether talking about the $1.5 billion of 

spending and revenue generated throughout the state by 

Oregon State University, or the fact that University of Oregon 

is now among the top 25 universities in the US for return on 

research through licensing of technologies, or the estimated 

10,000 employed by both schools together; the importance 

of their sustainability within the local economy and the state is 

undeniable. In addition, both schools from a research, 

academic, student and athletic standpoint have very strong 

ties to Stanford University and the University of CaliforniaBerkeley which would benefit from nonstop San Jose service. 

 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Air Service 

– Existing and Historical

7 

Air Service – Existing and 

Historical 

his section provides an overview of existing air service. Carriers providing 

service, service frequency, nonstop destinations and equipment types are 

included in the discussion. A summary of historical air service is also included 

with destinations, traffic levels, service providers, average airfares and an overview 

of extenuating factors that have affected air service. A description of air service 

development efforts concludes the section. 

Existing Air Service 

Eugene Airport has nonstop service provided by four marketing carriers to nine 

destinations: United Airlines to Denver, Portland and San Francisco; Allegiant Air to 

Las Vegas, Los Angeles, Phoenix-Mesa and Oakland; Alaska Airlines/Horizon Air to 

Portland and Seattle; and Delta Air Lines to Salt Lake City (Table 4.1). United 

provides the largest share of departures and seats offering 90 weekly departures 

and 4,356 weekly seats. Alaska/Horizon is the second highest provider offering 40 

weekly departures and 3,040 weekly seats. 

TABLE 4.1 EXISTING AIR SERVICE 

NONSTOP 

DESTINATION 

MARKETING 

CARRIER AIRCRAFT 

WEEKLY 

DEPARTURES 

WEEKLY 

SEATS 

Denver, CO United CRJ-700 (jet) 14 924 

Las Vegas, NV Allegiant MD-80 (jet) 4 600 

Los Angeles, CA Allegiant MD-80 (jet) 2 300 

Oakland, CA Allegiant MD-80 (jet) 3 450 

Portland, OR Alaska Q400 (turboprop) 20 1,520 

United EMB-120 (turboprop) 28 840 

Phoenix, AZ (Mesa) Allegiant MD-80 (jet) 3 450 

Salt Lake City, UT Delta CRJ-200 (jet) 14 700 

San Francisco, CA United CRJ-200 (jet) 36 1,800 

CRJ-700 (jet) 12 792 

Seattle, WA Alaska Q400 (turboprop) 20 1,520 

Total 156 9,896 

Source: apgDat, July 2010; Note: Allegiant’s Las Vegas, Oakland and Phoenix-Mesa service will be 

reduced to two roundtrips in September/October 2010

Historical Air Service 

Although Eugene Airport experienced air service growth through 2007, since then 

air service has been declining due to the economic recession. This subsection 

summarizes Eugene Airport’s air service history including: destinations, traffic levels, 

service providers and airfares. Extenuating factors that have affected air service over 

time is also reviewed. 

T

This section contains:

• Existing air service 

• Historical air service 

• Air service development 

efforts 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Air Service 

– Existing and Historical

8 

Destinations, Service Providers and Traffic Levels 

Exhibit 4.1 provides a summary of annual departures and enplanements over the 

last 10 years, 2000 through 2009. Like many communities, the impact of 

September 11, 2001, was significant with departures declining in 2001/2002 and 

enplanements following with a 10-year low experienced in 2003. However, post 

2002 departures increased significantly reaching a 10-year high in 2004 then 

dropping thereafter. From 2005 through 2009 departures decreased significantly, 

from 10,037 to 7,725, a decrease of 23 percent. Enplanements followed a similar 

trend but to a lesser degree with a decrease of almost six percent from 2005 

through 2009. Seats per departure increased from 49 in 2005 to 61 in 2009 or 24 

percent. 

EXHIBIT 4.1 HISTORICAL DEPARTURES, SEATS AND ENPLANEMENTS 

Table 4.2, next page, provides average weekly departures and seats by destination 

and airline from 2005 through 2010. In 2008, Las Vegas and Phoenix service 

switched from US Airways to Allegiant Air. Allegiant commenced service to 

Oakland in 2009. Los Angeles has had continuous nonstop or one-stop service by 

either Alaska/Horizon or Delta. In June, Alaska/Horizon ended one-stop service, and 

Allegiant began twice weekly service. Medford and Redmond have been the stopover points for Alaska/Horizon service to Los Angeles. Neither city represents an 

actual local market with Eugene. 

200,000

245,000

290,000

335,000

380,000

425,000

470,000

515,000

560,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

2000200120022003200420052006200720082009

Seats/Enplanements

Departures

Calendar year

Departures Seats Enplanements

From 2005 through

2009 departures

decreased

significantly, from

10,037 to 7,725, a

decrease of 23

percent.
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Air Service 

– Existing and Historical

9 

TABLE 4.2 HISTORICAL DESTINATIONS AND SERVICE PROVIDERS 

DESTINATION AIRLINE ITEM 

MONTH OF JULY 

2005 2006 2007 2008 2009 2010 

Denver, CO United Dept 14 14 14 14 14 14 

Seats 700 798 896 896 896 924 

Las Vegas, NV 

Allegiant Dept 2 4 4 

Seats 300 600 600 

US Airways Dept 7 7 7 7 

Seats 350 566 350 602 

Los Angeles, CA 

Alaska Dept 7 

Seats 532 

Allegiant Dept 2 

Seats 300 

Delta Dept 7 13 

Seats 350 650 

Medford, OR* Alaska Dept 14 14 7 7 

Seats 980 1,036 518 518 

Oakland, CA Allegiant Dept 2 3 

Seats 300 450 

Phoenix, AZ (AZA) Allegiant Dept 2 3 

Seats 300 450 

Phoenix, AZ (PHX) US Airways Dept 14 14 7 14 

Seats 952 952 350 880 

Portland, OR 

Alaska Dept 21 21 21 21 20 20 

Seats 777 777 777 1,036 1,452 1,520 

United Dept 26 32 32 32 28 28 

Seats 780 960 960 960 840 840 

Redmond, OR* Alaska Dept 7 

Seats 532 

Salt Lake City, UT Delta Dept 21 20 21 14 19 14 

Seats 1,050 1,000 1,050 700 950 700 

San Francisco, CA United Dept 56 42 49 28 48 48 

Seats 2,898 2,394 2,730 3,052 2,652 2,592 

Seattle, WA Alaska Dept 35 35 35 21 20 20 

Seats 1,526 1,554 2,114 1,554 1,452 1,520 

Average weekly departures 208 199 207 173 164 156 

Average weekly seats 10,013 10,037 10,641 11,148 9,960 9,896 

Source: apgDat; * One-stop to LAX; Note: Allegiant’s Las Vegas, Oakland and Phoenix-Mesa service will be reduced to two 

roundtrips in September/October 2010 

Historical Average Fares 

 Over the last five calendar years, Eugene Airport’s average fares have exceeded 

Portland, the state of Oregon, the Northwest region, and national averages (Table 

4.3). In calendar year 2009, Eugene’s average fare was nine percent higher than 

Portland and the state of Oregon, 13 percent higher than the Northwest region and 

12 percent higher than 

the national average. 

Historically, Eugene’s 

fares have been as high 

as 21 percent higher than 

the national average 

(2006). 

TABLE 4.3 AVERAGE ONE-WAY FARE PAID 

 

AVERAGE FARE 

2005 2006 2007 2008 2009 

Eugene $164 $182 $176 $181 $161 

Portland $136 $149 $149 $155 $147 

Oregon $140 $153 $152 $158 $148 

Northwest Region $143 $155 $155 $158 $143 

US $137 $149 $149 $160 $144 

Source: Data Base Products, Inc. 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Air Service 

– Existing and Historical

10 

Extenuating Factors that have Affected Air 

Service 

Eugene Airport’s air service has been affected by its proximity to 

Portland (approximately 120 miles) and the availability of low-fare 

Southwest Airlines’ service there. Eugene catchment area market 

sizes are more compatible with aircraft having 50 to 75 seats which 

have higher seat-mile costs mandating fares that are higher than 

those available at Portland. This has resulted in approximately 44 

percent of the catchment area market diverting to Portland. 

While northbound service is reasonably adequate, eastbound 

service capacity is limited and load factors are high. However, 

competitive problems are inherent in the heavily traveled 

southbound markets where market demand is insufficient to 

support nonstop service in most markets and low fares in the larger 

Portland market siphon away catchment area demand. Allegiant 

service in the Las Vegas, Oakland, Phoenix-Mesa and more recently 

Los Angeles market are exceptions, but this service has limited 

appeal to business travelers in need of daily service. This 

fractionalization of demand has resulted in Eugene’s southbound 

service being primarily concentrated on San Francisco connections. 

San Francisco International Airport frequently suffers from delays 

and cancellations causing severe reliability issues. 

Past Air Service Development Efforts 

Over the past five years, the Eugene Airport and the business 

community have worked together on air service development 

efforts. These efforts have included market studies to determine 

retention of local passengers, pro forma analyses for many major 

hubs and regular meetings and presentations to airlines. Table 4.4

provides an overview of the air service development efforts since 

2005. The community has had a lot of success such as retaining 

service to Phoenix and Las Vegas and getting new nonstop routes 

to Oakland and Los Angeles. Eugene was the first community in 

the US to use the Airline Travel Bank concept to improve air 

service. Eugene successfully used three Airline Travel Banks to 

acquire service to Salt Lake City, Los Angeles and Phoenix. The 

Airport and community continue to be dedicated to local air service 

development. The Eugene Air Service Community Partnership 

meets regularly on air service development issues. 

TABLE 4.4 PAST AIR SERVICE DEVELOPMENT 

EFFORTS 

YEAR INITIATIVE RESULT 

2005 

Delta Air Lines' LAX Proposal Unsuccessful 

Horizon Air Meeting Completed 

Passenger Demand Analysis Completed 

2006 

Allegiant Air Meeting Completed 

Los Angeles Market Review Completed 

Passenger Demand Analysis Completed 

United Airlines Meeting Completed 

2007 

ACI-NA Jumpstart 

Conference Completed 

Allegiant Air LAS Proposal Successful 

Allegiant Air Meeting Completed 

Delta Air Lines Meeting Completed 

Horizon Air Meeting Completed 

Passenger Demand Analysis Completed 

United Airlines Meeting Completed 

US Airways Meeting Completed 

2008 

Air Service Risk Assessment Completed 

Allegiant Air Conference Completed 

Allegiant Air PHX Proposal Successful 

Delta Air Lines Meeting Completed 

Horizon Air Meeting Completed 

JetBlue Airways Proposal Unsuccessful 

Passenger Demand Analysis Completed 

United Airlines B737 Proposal Successful 

US Airways Meeting Completed 

2009 

AAAE National Air Service 

Conference Completed 

Allegiant Air Conference Completed 

Allegiant Air OAK Proposal Successful 

Delta Air Lines Meeting Completed 

Horizon Air Meeting Completed 

Passenger Demand Analysis Completed 

United Airlines Meeting Completed 

2010 

ACI-NA Jumpstart 

Conference Completed 

Allegiant Air Conference Completed 

Delta Air Lines Meeting Planned 

Delta Air Lines Performance 

Analysis Completed 

Horizon Air Meeting Planned 

Passenger Demand Analysis Completed 

United Airlines Meeting Planned 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Air Service Needs and Deficiencies

11 

Air Service Needs and 

Deficiencies 

he Air Service Needs and Deficiencies section identifies the issues at Eugene 

Airport which have stunted the growth of commercial air service to the 

community. This section provides a detailed analysis to demonstrate that 

Eugene is underserved, and the average airfares in this community are higher than 

other comparable communities. 

Major Origin/Destination Markets Not Served Adequately 

Eugene Airport and its catchment area are located in the large shadow cast by 

Portland International Airport with its air service to an extensive array of 

destinations. Eugene has supported well its service to Denver, Portland, Salt Lake 

City, San Francisco and Seattle markets. More recently, it has supported new 

Allegiant Air service in the Las Vegas, Los Angeles, Oakland and Phoenix-Mesa 

markets. However, due to its proximity to Portland, airlines have been slow to add 

nonstop service in other markets where sufficient demand exists. This is particularly 

true in key southbound West Coast markets which dominate the Eugene Airport 

catchment area’s market demand. 

Daily air service is needed by the Eugene catchment area business 

community to California communities including the high demand 

markets of San Jose, Orange County and San Diego. These 

markets require backhaul connections over Portland or Seattle or 

weather and congestion delay prone San Francisco International 

Airport. Table 5.1 shows Eugene’s top 15 true markets. Six of 

the top 15 markets are California destinations; nonstop service is 

available to Los Angeles, San Francisco and Oakland although Los 

Angeles and Oakland service is limited to twice weekly flights 

during most of the year. Nonstop service is not available to San 

Diego, Orange County and San Jose. Though service is deficient 

and needed to all three of these airports, service is most needed in 

the San Jose market. In 1993 the market was served by American 

Airlines, and there is a strong community of interest in the 

information technology field between the respective cities. 

Currently the only available air service from Eugene is backhaul 

routings via Portland or Seattle. San Jose service would also add 

connecting opportunities which would offer greater dependability 

than those at San Francisco International Airport. 

T

TABLE 5.1 EUGENE AIRPORT'S TOP 15 CATCHMENT 

AREA TRUE MARKETS 

RANK MARKET 

RETENTION 

% 

TRUE 

MARKET 

SIZE 

1 Las Vegas, NV 72 85,192 

2 Los Angeles, CA 57 68,659 

3 Phoenix, AZ (AZA/PHX) 84 54,001 

4 San Francisco, CA 83 48,600 

5 Seattle/Tacoma, WA 55 43,359 

6 Denver, CO 48 42,116 

7 San Diego, CA 50 36,184 

8 Oakland, CA 84 62,440 

9 Orange County, CA 51 28,469 

10 Chicago, IL 63 27,871 

11 San Jose, CA 15 26,569 

12 Orlando, FL 37 22,179 

13 Honolulu, HI 28 21,613 

14 Salt Lake City, UT 54 20,448 

15 Minneapolis, MN 52 19,413 

All markets 56 1,318,111 

Source: Mead & Hunt Passenger Demand Analysis 2010 

This section contains: 

Eugene Airport’s air service 

needs and deficiencies 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Air Service Needs and Deficiencies

12 

Higher Than Average Fares 

Compared to Portland, Eugene Airport’s average fares are seriously overpriced in 

non-Allegiant markets. Table 5.2 illustrates the fare inequities in Eugene’s other 

nonstop markets and in primary Arizona, California and Nevada connecting markets 

which would potentially benefit from new Eugene-California service. 

TABLE 5.2 AIRFARE COMPARISON 

DESTINATION EUG PDX RDM 

Seattle, WA $117 $98 $105 

Portland, OR $63 N/A $64 

Salt Lake City, UT $168 $111 $166 

Denver, CO $159 $113 $150 

San Francisco, CA $175 $136 $89 

San Jose, CA $152 $119 $143 

Sacramento, CA $148 $91 $128 

Reno, NV $157 $94 $143 

Monterey, CA $168 $169 $170 

Fresno, CA $192 $148 $156 

Santa Barbara, CA $168 $153 $140 

Ontario, CA $143 $132 $137 

Burbank, CA $164 $137 $149 

Orange County, CA $164 $128 $146 

Long Beach, CA $152 $100 $129 

San Diego, CA $172 $139 $146 

Palm Springs, CA $154 $133 $121 

All markets $160 $150 $135 

Source: Data Base Products, Inc.; year ended 3/31/10 

Eugene’s average airfares in all markets are higher than Portland and Redmond for 

year ended March 31, 2010. On a market by market basis, Eugene’s airfares are 

higher than Portland in all but one of the sample markets and higher than Redmond 

in all but two of the sample markets. This clearly demonstrates that Eugene is 

overpriced in their nonstop, non-Allegiant markets and California destinations. 

Eugene is overpriced

in their nonstop, nonAllegiant markets and

California

destinations.
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Strategic Plan 

– Air Service

13 

Strategic Plan – Air Service 

he Strategic Plan proposed by the Eugene Airport will achieve the 

community’s goals and reduce its air service deficiencies. This Strategic Plan 

section provides a detailed description of the goals of the project and a 

primary and alternate plan for attaining those goals. Eugene Airport has not 

received a prior grant award under the Small Community Air Service Development 

Program. 

Project Goals 

The project goal of this Small Community Air Service Development Program grant 

application is to improve air service to high demand markets in California. By 

meeting this goal airfares will be reduced and the need to drive long distances to 

access adequate air service to these California markets will be mitigated. 

Proposed Air Service 

Eugene Airport’s air service gap is to key cities in California, primarily San Jose and 

San Diego. Alaska Airlines/Horizon Air service to Norman Y. Mineta San Jose 

International Airport would provide the Eugene Airport catchment area with 

improved air service to central California, connections to southern California and 

destinations in the southwestern US. 

This plan will achieve the project goals by: 

• Improving service to a key city in central California 

• Reducing the need for air travelers to drive to Portland for affordable and 

competitive airfares 

• Adding competition in the marketplace to lower fares to central California, 

southern California and other southwestern US locations 

Airline Participation 

Over the past five years, members of the public-private partnership have met with 

Alaska/Horizon regarding nonstop service to California. Recent discussions with 

Alaska/Horizon have been positive and have centered on San Jose. In particular, 

Horizon expressed interest in the Eugene Airport filing this grant application and 

provided a support letter included in Appendix A. Feedback from Horizon is that 

the community support package proposed in the Strategic Plan is critical in their 

decision whether or not to serve the Eugene market. 

T

This section contains: 

• Strategic Plan for meeting 

Eugene Airport’s air 

service needs and 

deficiencies 

• Alternate plan to meet the 

goal 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Strategic Plan 

– Air Service

14 

Market Analysis 

A financial analysis and pro forma route forecast have been developed for 

Alaska/Horizon service to San Jose International Airport. Results of the 

Alaska/Horizon analysis are summarized below. The complete analysis for San Jose 

service is included as Appendix B, Detailed Market Analysis. 

Forecast Assumptions 

Pro forma route forecast projections were completed for a one roundtrip schedule 

on a 76-Seat Bombardier Dash-8-Q400. The analysis includes the operating and 

marketing assumptions listed below: 

• Existing fared passengers will be divided between Allegiant Air, Delta Air 

Lines, United Airlines and Alaska/Horizon based on the number of 

reasonable connections available in the market. 

• The San Jose local market will be stimulated 475 percent (similar to 

Allegiant’s experience in the Eugene-Oakland market). 

• Alaska/Horizon will capture a share of the passengers that are driving to 

competing airports (i.e. Portland) to travel to and beyond San Jose. 

• The average one-way fare in the Eugene-San Jose local market will equal 

current Eugene fares. 

 

Mature Market Results 

Table 6.1 provides a summary of the Alaska/Horizon San Jose market analysis for 

one roundtrip per day on the 76-seat Bombardier Dash-8-Q400. Passenger 

projections were based on a mature market (i.e., passenger projections would be at 

100 percent on the first day of service). It is estimated that one roundtrip per day 

will generate $6.6 million in annual revenue for Alaska/Horizon. Projected system 

profit surpasses $1.6 million. 

TABLE 6.1 SUMMARY OF SAN JOSE MARKET ANALYSIS 

ITEM STATISTICAL CATEGORY 

MATURE

MARKET 

1 Available seats per departure 76 

2 Segments per day 2 

3 Onboard Passengers 41,097 

4 Load Factor 74%

5 Average Fare (all markets) $154.94 

6 System revenue $6,614,258 

7 System profit $1,681,609 

Airline Risk Ramp-Up Risk 

It is estimated that Alaska/Horizon will earn a system profit of over $1.6 million after 

the market matures. Although this market is projected to be self-sustaining in the 

long-run, Alaska/Horizon will not generate this amount of revenue or margin at 

The Strategic Plan

is critical in

Horizon Air’s

decision whether or

not to serve the

Eugene market to a

key city in

California.
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Strategic Plan 

– Air Service

15 

start-up. Airlines typically incur losses in new markets during the first year of the 

ramp-up period. Adding to Alaska/Horizon’s initial economic risk in the market is 

the challenge of changing existing travel habits and airline allegiance which will take 

time. This could cause a longer than normal ramp-up period and lead to significant 

losses in the short-term. 

Table 6.2 provides an adjustment to passenger projections to account for ramp-up 

to a fully mature market and breaks down the passenger projections for the first 12 

months. At service initiation, it is conservatively estimated that Alaska/Horizon will 

realize 75 percent of the potential revenue in a mature market. The market will 

grow to 95 percent of the mature market during the first year. The ramp-up period 

is highly dependent on service awareness and the community’s support of the new 

service. 

 

TABLE 6.2 SERVICE RAMP-UP 

MONTH SEASONALITY 

ONBOARD 

PAX 

SEGMENT 1

MATURE MARKET 

REVENUE 

RAMP-UP 

ADJ. 

RAMP-UP 

REVENUE 

ESTIMATED 

PROFIT/LOSS 

May 7.7% 3,149 $334,670 75% $251,002 ($101,902) 

June 9.5% 3,891 $413,509 75% $310,132 ($31,388) 

July 9.7% 3,971 $422,078 75% $316,558 ($36,346) 

August 9.3% 3,833 $407,343 80% $325,875 ($27,029) 

September 9.1% 3,741 $397,642 85% $337,995 ($3,525) 

October 8.8% 3,616 $384,313 86% $330,509 ($22,395) 

November 8.5% 3,510 $373,069 89% $332,032 ($9,488) 

December 8.3% 3,412 $362,597 89% $322,711 ($30,193) 

January 6.9% 2,855 $303,479 92% $279,200 ($73,704) 

February 6.8% 2,793 $296,860 92% $273,111 ($45,641) 

March 8.1% 3,349 $355,978 95% $338,179 ($14,725) 

April 7.2% 2,978 $316,490 95% $300,666 ($40,854) 

Total 100.0% 41,097 $4,368,027 85% $3,717,970 ($437,190) 

Table 6.2 also provides the estimated loss by month and in total for the first 12 

months of service. Eugene-San Jose segment revenues adjusted for the ramp-up 

period for the first year of service total $3.7 million. Revenue is also adjusted for 

introductory airfares. It is assumed that Alaska/Horizon will offer introductory fares 

for the first three to six months of service. In addition, the ramp-up is estimated to 

be slower than normal due to changing travel habits of the existing travelers. The 

total shortfall is expected to be $437,190 for the first year of service. 

Alternate Plan 

If Eugene Airport fails to obtain Alaska/Horizon service to San Jose, alternate carriers 

will be approached with the intent of obtaining nonstop service to San Diego or 

another key community in California. Alternate carrier service would fulfill the goals 

of this grant application. 

 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Strategic Plan 

– Implementation and Funding

16 

Strategic Plan – 

Implementation and 

Funding 

his section, Strategic Plan - Implementation and Funding, provides the 

detailed incentive and support plan required to implement the Strategic Plan. 

A legal sponsor responsible for administering the program has been 

designated, and a public-private partnership has been formed to actively participate 

in implementing the proposed project. In addition, this section identifies selfsufficiency of the service as an integral part of the community’s goals and provides a 

description of the community’s plan to continue with the project if it is not selfsustaining after the grant award expires. A detailed description of the funding 

necessary for implementation of the Strategic Plan, including federal and nonfederal contributions, is included. 

Public-Private Partnership 

The City of Eugene, the owner/sponsor of Eugene Airport, has been designated as 

the sponsor of this grant application. The City of Eugene/Eugene Airport, Lane 

County Government and the Eugene Air Service Community Partnership have 

formed a public-private partnership (refer to community support letters in Appendix 

A). Collectively, the partnership is committed to completing the Strategic Plan. 

Members of the Eugene Air Service Community Partnership include: 

 Core Community Partners: 

• Eugene Area Chamber of Commerce 

• Lane Metro Partnership 

• Springfield Chamber of Commerce 

• Travel Lane County 

All partners in the public-private partnership 

will be fully involved in the execution of the 

Strategic Plan (Table 7.1). The City of 

Eugene/Eugene Airport will execute all federal 

grant offers, process all associated 

reimbursement requests and oversee grant 

administration. The City of Eugene/Eugene 

Airport will also administer the revenue 

guarantee. Lane County Government will 

administer the Lane County Special Tourism 

T

TABLE 7.1 PUBLIC-PRIVATE 

PARTNER ROLES 

PUBLICPRIVATE 

PARTNER ROLE 

City of Eugene/ 

Eugene Airport 

Grant and 

revenue 

guarantee 

administration 

and assist with 

the local 

marketing efforts 

Lane County 

Government 

Administer Lane 

County Special 

Tourism Grant 

Eugene Air 

Service 

Community 

Partnership 

Assist with local 

marketing 

efforts, 

coordination of 

the marketing 

program 

This section contains: 

• Description of the publicprivate partnership 

• Legal sponsor 

• Funding for the Strategic 

Plan 

• Sustainability 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Strategic Plan 

– Implementation and Funding

17 

Grant of $10,000. The Eugene Air 

Service Community Partnership 

will be responsible for 

administering the marketing 

campaign in conjunction with the 

City of Eugene/Eugene Airport 

and Alaska Airlines/Horizon Air. 

Together these partners form a 

team committed to improving air 

service at Eugene Airport. 

Incentive and Support Plan 

In today’s airline environment, community support packages have become 

increasingly important and virtually required for most new service. To be effective, 

support packages must be structured to address the issues of new airline entry and 

ensure that the market responds quickly. 

The public-private partnership proposes a community support package that has 

been tested and proven to be successful. To reduce Alaska/Horizon’s breakeven 

period and offset the risk during start-up, the public-private partnership proposes 

the following incentives (refer to Exhibit 7.1): marketing campaign (create name 

and service awareness for Alaska/Horizon); revenue guarantee (reduce airline risk); 

and landing fee waiver (reduce airline start-up costs). 

EXHIBIT 7.1 INCENTIVE PLAN

Airline Risk 

Mitigation

> Revenue 

guarantee

> Fee 

waivers

> Marketing

U.S. DOT

Airport

Community

Funding Service initiation

$
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Strategic Plan 

– Implementation and Funding

18 

Marketing Campaign 

Any marketing campaign must be targeted toward aggressive promotion of the 

service to make the new service successful and sustainable. The public-private 

partnership understands and agrees with the US Department of Transportation that 

a thorough understanding of the target market is essential for the success of new 

air service. The partnership has created a targeted advertising and marketing 

campaign to support the launch and development of this new service. A detailed 

Marketing and Public Relations Plan is included in Appendix C. Elements included in 

this marketing campaign include: 

• Television and radio advertising 

• Print advertising (e.g. newspapers, magazines) 

• Social media 

• Direct mail 

• Community partners advertising on their websites, e-mail and ads 

• Inaugural event 

The target audience is business travelers and mid-to-upper 

income households and leisure travelers traveling between 

the Eugene/Springfield area and San Jose. Table 7.2

provides the marketing budget for the first and second year 

of service. The Airport has established an extensive 

partnership agreement with many media outlets. This 

$227,100 marketing campaign will be funded by non-airport 

sources ($55,000 cash and $60,500 in-kind), Airport sources 

($36,300 cash and $30,300 in-kind) and the US Department 

of Transportation ($45,000 cash). A portion of the nonairport cash, $10,000, will be provided by the Lane County 

Special Tourism Grant. 

Revenue Guarantee 

To reduce airline risk and provide incentive to Alaska/Horizon to provide nonstop 

service to San Jose, this Strategic Plan includes a revenue guarantee as part of the 

community support package. Although pro forma projections for San Jose service is 

positive (Appendix B), service ramp-up and breakeven can take up to 12 months, 

particularly in a market with significant barriers-to-entry. It is anticipated that 

Alaska/Horizon would require a $455,000 revenue guarantee to initiate service to 

San Jose. Exact terms of the revenue guarantee agreement are subject to further 

negotiations. 

Landing Fee Waiver 

The air service support program includes a landing fee waiver. As part of the 

Airport’s standard rates and charges, signatory airlines are charged a landing fee 

TABLE 7.2 MARKETING BUDGET 

MEDIA OUTLET YEAR 1 YEAR 2 TOTAL 

Television $81,000 $19,250 $100,250 

Print Advertising $27,250 $13,250 $40,500 

Community Partners 

Advertising $14,000 $14,000 $28,000 

Outdoor Advertising $13,750 $12,900 $26,650 

Radio $10,000 $2,500 $12,500 

Social Media/Web $2,800 $2,800 $5,600 

Direct Mail $5,000 $0 $5,000 

Trade Show & 

Marketing $2,100 $1,500 $3,600 

Production fees $5,000 $0 $5,000 

Total $160,900 $66,200 $227,100 

It is anticipated that

Alaska Airlines/

Horizon Air would

require a $455,000

revenue guarantee to

initiate service to San

Jose.
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Strategic Plan 

– Implementation and Funding

19 

assessed at $2.20 per 1,000 pounds of gross landed weight. The Airport will waive 

landing fees for at least the first six months of any new, nonstop service, including 

San Jose. Landing fees for the first six months are estimated at $24,000 assuming 

the use of the Bombardier Dash-8-Q400 with one roundtrip daily. The landing fee 

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

offered. 

Project Continuation and Sustainability 

Based on the positive pro forma projections for Alaska/Horizon service to San Jose, 

it is anticipated that service to San Jose will be self-sustaining after the start-up 

period which can take up to 12 months or more. However, the public-private 

partnership understands that service failure is often due to the lack of awareness in 

the community. Because of this, the Strategic Plan includes a $66,200 second-year 

marketing program. In addition, should the revenue guarantee have remaining 

funds, the Eugene Air Service Community Partnership would use up to $100,000 

for on-going marketing of the San Jose route. The Eugene business community and 

the public-private partnership understand the economic importance of this project 

to the region and the challenges associated with profitably operating air service to 

the Eugene market and will work to ensure its long-term success. 

Strategic Plan Funding 

The public-private partnership is requesting US Department of Transportation 

assistance in funding 64 percent, or $500,000, of the Strategic Plan. Specifically, 

US Department of Transportation funding will be used to fund the revenue 

guarantee and 20 percent of the marketing program. The Airport and community 

will fund 36 percent of the total proposed air service program. Non-airport funding 

sources will provide eight percent of the cash requirement and 15 percent of the 

funding for the total program including in-kind services (Table 7.3). 

TABLE 7.3 STRATEGIC PLAN BUDGET 

DESCRIPTION 

FUNDING SOURCE 

TOTAL 

US DOT AIRPORT NON-AIRPORT 

CASH CASH IN-KIND CASH IN-KIND 

Airline incentive program:

 Marketing campaign

 Year 1 $45,000 $14,400 $55,000 $46,500 $160,900 

 Year 2 $36,300 $15,900 $14,000 $66,200 

 Revenue guarantee $455,000 $455,000 

 Fee waivers $24,000 $24,000 

Monitoring program $75,000 $75,000 

Total $500,000 $111,300 $54,300 $55,000 $60,500 $781,100 

Percent of total project 64% 14% 7% 7% 8% 100%

Percent of cash contribution 75% 17% N/A 8% N/A 100%

The Airport and

community will fund

36 percent of the total

proposed air service

program. Non-airport

funding sources will

provide eight percent

of the cash

requirement and 15

percent of the funding

for the total program

including in-kind

services.
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Schedule and Monitoring

20 

Schedule and Monitoring 

he public-private partnership has developed a realistic timetable for achieving 

the project goals. This section provides critical milestones to be achieved by 

the public-private partnership to timely execute this air service initiative. A 

monitoring program is also provided to track the progress of the project. 

Milestones for Timely Completion of Project 

The following target dates are proposed to track the progress of this air service 

initiative assuming a grant award by December 31, 2010: 

TABLE 8.1 STRATEGIC PLAN SCHEDULE

DATE ACTION ITEM DESCRIPTION

February 1, 2011 Marketing campaign 

development 

Development of the marketing 

campaign will be completed in 

February 2011 in order to begin 

the marketing campaign 60 days 

prior to new service initiation. 

April 1, 2011 Marketing initiation 

It is anticipated that the 

marketing campaign will begin by 

April 2011 and continue 

throughout the first and second 

year of new service. 

June 1, 2011 Service initiation 

The service start date is the 

critical date for the rest of the 

Strategic Plan. It is anticipated 

that Alaska/Horizon will initiate 

nonstop San Jose service in June 

2011. Air service initiation is 

dependent on airline route 

planning, economics and 

availability of right-sized aircraft 

for the Eugene market. 

December 31, 2011 Alternate plan 

If Alaska/Horizon has not 

implemented nonstop San Jose 

service by December 31, 2011, 

Eugene Airport will contact other 

airlines for service to California, 

which would meet the goals of 

this grant application. 

May 31, 2012 Revenue guarantee 

contract completion 

At the end of the first year of 

service, the revenue guarantee 

will be calculated based on the 

terms of the agreement. If the 

service start date changes due to 

airline circumstances and/or 

equipment availability, the 

revenue guarantee contract term 

will change accordingly. 

T

This section contains:

• Monitoring the project 

• The plan/schedule for 

timely completion of the 

project 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Schedule and Monitoring

21 

Strategic Plan Monitoring Program 

The monitoring program includes service performance tracking, assessing the 

effectiveness of the campaign, impact on airfares and determining the influence of 

California service on retention at the Airport. Table 8.2 provides the action items 

and frequency to monitor the Strategic Plan over a two-year period. 

TABLE 8.2 STRATEGIC PLAN MONITORING

FREQUENCY ACTION ITEM DESCRIPTION

Monthly Airline performance Load factors, enplanements, departures

Revenue guarantee indicators Ticket revenue, cost, drawdown

Quarterly 

Airline performance 

Load factors, enplanements, 

departures, revenue per available seat 

mile 

Airfares 

Compare US Department of 

Transportation airline reported average 

airfares on a quarterly basis, when 

available, to prior quarters 

Published airfares will be monitored for 

the first three months of service then 

quarterly thereafter via one of the 

Global Distribution/Computer 

Reservations Systems (GDS/CRS) 

9 Months Program assessment 

Complete an overall assessment of the 

program to determine if additional 

community support is needed beyond 

one year 

12 Months 

Passenger Demand Analysis 

Conduct a follow-up true market 

estimate to determine changes in 

passenger diversion after the first 12 

months of service. By comparing to 

the true market estimate conducted 

prior to service initiation, the true 

market estimate will determine the 

impact of the air service improvements 

on retention/diversion at Eugene 

Airport. 

Passenger Intercept Survey 

Conduct a Passenger Intercept Survey 

to assess the effectiveness of the 

marketing campaign and determine air 

traveler's satisfaction with the service 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Appendix A. Airline and Community Support

22 

Appendix A. Airline and 

Community Support 

ppendix A includes letters of support for the Eugene Airport application to 

the US Department of Transportation for improved air service to high 

demand markets in California. Support letters were submitted by Horizon

Air, participants in the public-private partnership, and members of the Eugene 

community. The letters of support are included on the following pages of this 

Appendix A and are listed below. 

Airline 

Horizon Air 

Government 

United States Senate – Senator Jeff Merkley 

United States Senate – Senator Ron Wyden 

Congress of the United States – Congressman Peter DeFazio 

Public-Private Partners 

City of Eugene – Mayor Kitty Piercy 

Lane County Board of Commissioners 

Eugene Air Service Community Partnership: 

 Eugene Area Chamber of Commerce 

 Lane Metro Partnership 

 Springfield Chamber of Commerce 

 Travel Lane County 

A

This section contains:

Letters of support from the 

target airline, members of 

the public-private 

partnership, the local 

business community and 

state government. 










Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Appendix B. Detailed Market Analysis

33 

Appendix B. Detailed 

Market Analysis 

onfidential submission of the City of Eugene/Eugene Airport. C

This section contains:

An in-depth analysis 

evidencing familiarity with 

the San Jose market and 

ultimate success of the 

proposed Strategic Plan. 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Appendix 

C. Marketing and Public Relations Plan

40 

Appendix C. Marketing and 

Public Relations Plan 

tarting up a new air service route is a significant financial risk to an air carrier, 

especially in today’s economy. Financial incentives, including revenue 

guarantees and marketing support, help mitigate this risk. The challenge is to 

build a solid route in a relatively short amount of time. A significant marketing and 

advertising effort should be launched 30 to 60 days before inauguration and should 

be sustained for at least one year. 

Situation Analysis 

The goal of this Marketing and Public Relations Plan is to establish a strong route 

between Eugene and San Jose, building the route to a self-sustaining level as 

quickly as possible, and stimulating additional passenger traffic on this route above 

current true market levels. 

Company Analysis 

Eugene Airport currently employs one full-time employee in the marketing and 

public relations area and a half-time employee in tenant and general aviation 

relations (customer service). Recognizing that current trends in airport marketing 

have changed over the past five years, prior marketing efforts for the Eugene 

Airport have been analyzed based on how well they reached target audiences, their 

effectiveness, and whether they were fiscally prudent and in compliance with FAA 

regulations. Changes have been made accordingly. 

Customer Analysis 

After several years of increases, including a banner year in 2007, passenger use 

dropped in 2009 to 699,557 total passengers (revenue and non-revenue). This trend 

was seen across the nation, with Eugene Airport’s decline about average or slightly 

better than airports of similar size. The 2009 Intercept Survey of Eugene Airport 

passengers shows a passenger mix of 61 percent personal/pleasure travel (leisure), 

36 percent business/professional travel and three percent mix of business and 

pleasure. Value drivers include ticket price, seat availability and convenience. The 

decision process differs for business travelers and leisure travelers. Leisure travelers 

often have tunnel vision in their decision process considering only ticket price, 

without weighing gas, drive-time, hotel cost (early morning Portland International 

S

This section contains:

A detailed Marketing and 

Public Relations Plan 

demonstrating a welldesigned marketing 

campaign to support San 

Jose service. 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Appendix 

C. Marketing and Public Relations Plan

41 

Airport flights), parking convenience and fees. Business travelers are more likely to 

add time and convenience into their decision making process. Seat availability is an 

issue for some business travelers utilizing Portland instead of Eugene. 

Competitor Analysis 

Portland International Airport is the 30th largest passenger airport in the US. The 

Portland International Airport capture region serves a population of more than 3.5 

million people in two states. The 2010 Passenger Demand Analysis shows Portland 

captured 85 percent of Eugene catchment area passengers traveling to San Jose. 

Passengers currently diverting to Portland to travel to San Jose may be utilizing 

Alaska Airlines/Horizon Air or Southwest Airlines nonstop service or a connecting 

hub such as San Francisco International Airport. 

Collaborators 

AIRLINES 

Horizon Air has been identified as the most likely airline to start a new, nonstop 

route to San Jose. Company officials have offered a letter of support for the grant 

application (Appendix A) to establish this route at Eugene Airport. 

COMMUNITY PARTNERS 

The leadership team at the Eugene Airport values its community partners and will 

actively work to retain and strengthen these bonds, recognizing that they are an 

integral part of the success of Eugene Airport, and have an interdependent 

relationship with the Eugene Airport. Community partnerships such as the Eugene 

Air Service Community Partnership will be supported through mutual efforts in 

promotion (including participation in marketing and advertising programs), 

participation in chamber and association events and air service development 

initiatives. 

SWOT Analysis 

STRENGTHS 

The Eugene Airport has several competitive advantages: 

• Reputation – A general feeling among the community and traveling public 

that the Eugene Airport is “a great little airport.” 

• Customer Service – Staff, volunteers, tenants and TSA offer friendly and 

professional assistance to passengers and other guests. 

• Convenience – Short drive time, short lines at check-in, short lines at 

security checkpoint and nonstop flights to eight hub airports. 

Eugene Air Service

Marketing Resources:

Core Community Partners: 

• Eugene Area Chamber 

of Commerce 

• Lane Metro Partnership 

• Springfield Chamber of 

Commerce 

• Travel Lane County 

Regional Community 

Partners: 

• Albany Chamber of 

Commerce 

• Bay Area Chamber of 

Commerce 

• Corvallis-Benton 

Chamber of Commerce 

• Cottage Grove 

Chamber of Commerce 

• Fern Ridge Chamber of 

Commerce 

• Florence Chamber of 

Commerce 

• Junction City/Harrisburg 

Chamber of Commerce 

• Roseburg Area 

Chamber of Commerce 

Other Community Partners: 

• Travel Agents 

• Travel Oregon 

• Oregon State University 

• University of Oregon 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Appendix 

C. Marketing and Public Relations Plan

42 

WEAKNESSES 

The Eugene Airport has several weaknesses, both real and perceived: 

• Ticket Price - Average ticket price difference is $23/each way compared to 

Portland International Airport. (This can also be viewed as a strength.) 

• Destinations - Significantly fewer nonstop destinations than Portland. 

• Amenities - Fewer amenities in the terminal compared to Portland. 

OPPORTUNITIES 

The Eugene Airport has the opportunity to recapture the 85 percent of catchment 

area passengers currently using Portland International Airport to fly to San Jose. 

• Approximately 57 corporations with Eugene-San Jose ties (source: Oregon 

Secretary of State Corporate Division). 

• Continued marketing efforts to show that often perceived savings by 

driving to Portland International Airport for a flight are negated by the 

added expense of gas, parking, hotel expenses and placing value on 

passengers’ drive-time to Portland. 

• Conveniences and positive experience of the Eugene Airport. 

• Conscious support of Eugene Airport by local patrons. 

THREATS 

Changes in the health of the airline industry will impact airports across the country 

and have more severe impacts at smaller airports, including Eugene Airport. These 

threats include: 

• Oil prices – High fuel prices have in recent history placed unprecedented 

strain on the airline industry and have impacted local air service. 

• Economy – The overall economic health of the economy has a direct 

impact on commercial air travel. The recession, including layoffs by several 

key local employers, has impacted local air service, but passenger numbers 

are increasing once again. 

Market Segmentation 

Consumer Market Segmentation 

THE BUSINESS TRAVELER 

The business traveler accounts for 36 percent of passengers at the Eugene Airport. 

An additional three percent combine business and pleasure for travel. More 

importantly, the business traveler has increasing potential to use Eugene Airport 

over Portland International Airport for convenience, despite potentially paying more 

for a ticket. 

Only 15 percent of air

travelers use Eugene

Airport to travel

to/from San Jose.

This represents an

opportunity for

Eugene Airport to

recapture the 85

percent of travelers

using Portland.
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Appendix 

C. Marketing and Public Relations Plan

43 

Business travelers want efficiency and ease of travel. Avoiding hassles is one key in 

their decision making, including weighing convenience of parking, the length of 

check in and security lines, and expedited baggage return. This is where there is 

opportunity to promote Eugene Airport through an educational campaign. 

This group is reached through a variety of marketing and public relations efforts, 

including business-focused organizations and publications, news talk and sports 

radio, news and sports television, and increasingly Internet technology including 

websites, e-newsletters and social media. 

THE LEISURE TRAVELER 

The leisure traveler accounts for about 61 percent of passengers at the Eugene 

Airport. Leisure travelers are often more ticket price focused, but convenience plays 

an important role. They are willing to travel to Portland for flights if the price is 

right. Allegiant Air is likely the reason leisure travel has seen a slight increase at 

Eugene Airport in the past year. 

Leisure travelers also want efficiency and ease of travel but are willing to make 

compromises to save money. Often this savings is perceived, not real, when 

accounting for gas, time, parking and hotel expenses by traveling to Portland. This is 

where there is opportunity to promote Eugene Airport through an educational 

campaign. 

This group is also reached through a variety of marketing and public relations 

efforts, including tourism-focused organizations and publications. The reach to 

target leisure travelers is broader, but radio and television can still be effective. 

Internet technology including websites, e-newsletters and social media are also 

effective ways to reach this group. 

Geographic Segmentation 

The 2010 Passenger Demand 

Analysis shows diversion to Portland 

International Airport by location 

within the Eugene Airport catchment 

area. Table C.1 shows 

retention/diversion for the 

communities within the Eugene 

Airport catchment area. This 

outlines another potential way to 

break out target markets. 

TABLE C.1 AIRPORT USE BY COMMUNITY 

COMMUNITY 

2009 % 2008 % DIFF. IN 

EUG PDX EUG PDX RETENTION 

Albany 6 94 7 93 (1) 

Corvallis 9 91 13 87 (4) 

Cottage Grove 59 41 69 31 (10) 

Eugene/Springfield 71 29 71 29 (0) 

Florence 55 45 58 42 (3) 

Lebanon 10 90 10 90 0 

Newport 11 89 10 90 1 

North Bend 28 78 27 73 1 

Roseburg 49 51 46 55 3 

Waldport 46 54 22 78 24 

Total 56 44 52 48 4 

Source: Mead & Hunt Passenger Demand Analysis 2010 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Appendix 

C. Marketing and Public Relations Plan

44 

Demographic Segmentation 

The 2009 Intercept Survey of Eugene Airport Travelers shows the majority of visitors 

to the Eugene Airport are: 

• Age 45 to 64 

• 54 percent female, 46 percent male 

• College graduates and/or have competed post-graduate studies 

• Professional/Technical 

• Homeowners 

• High income 

 

Further breakdowns can be made based on personal/pleasure or 

business/professional travelers. 

Psychographic Segmentation 

Based on the same survey, seven percent of visitors to the Eugene Airport travel 

from Eugene Airport seven to 10 times a year. Another 24 percent travel three to six 

times a year, 37 percent travel one to two times a year and 21 percent have never 

flown before. Of those surveyed, two percent travel from Portland International 

Airport seven to 10 times a year. Another 14 percent travel three to six times a year, 

38 percent travel one to two times a year and 42 percent have never flown before. 

Behavioral Segmentation 

The same survey reveals a very high customer satisfaction score for both services 

that the Airport has direct control or influence over. This contributes to brand 

loyalty. 

Business Market Segmentation 

GEOGRAPHIC SEGMENTATION 

The manufacturing sector in the Eugene Airport catchment area makes up the 

largest share of employment in the region, followed by retail trade and health care. 

According to data from State of Oregon, there are approximately 57 corporations 

with locations in the Eugene catchment area and the San Francisco Bay Area of 

California. 

CUSTOMER TYPE 

Travel frequency varies greatly among the major manufacturers and employers 

within the Eugene Airport catchment area. The universities continue to be a strong 

air travel population. Travel is also strong in the high tech industry (including 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Appendix 

C. Marketing and Public Relations Plan

45 

increasing establishment of solar 

manufacturing and distribution), 

the bio-tech industry and scientific 

research. 

Marketing Strategy 

Product 

Nonstop air travel between 

Eugene Airport and San Jose 

International Airport is the focus 

of this marketing and public relations campaign. The product considered by most 

consumers is the actual purchase of an airline ticket, but the Eugene Airport brand 

and quality of the Airport plays into this purchase decision, therefore the product is 

also the convenience of utilizing the Eugene Airport for nonstop travel between 

Eugene and San Jose. 

Price 

Airfares between Eugene and San Jose must be competitive with competing airlines 

at Portland to successfully establish this route. The Eugene Airport will work with 

airline planners to ensure competitive fares are set, with the revenue guarantee 

from the Small Community Air Service Development Program grant providing 

financial relief while an acceptable yield is established. Other prices of goods and 

services at the Eugene Airport should be considered and monitored to stay in line 

with similar markets, including parking fees, restaurant, gift shop and car rental 

pricing. 

Distribution 

Ticket purchases are increasingly being made online. The promotion section of the 

www.flyEUG.com website will feature the new nonstop service to San Jose. The 

airline’s booking widget may also be featured on the www.flyEUG.com website for 

at least one year to allow for the purchase of tickets to San Jose. A request will be 

made to San Jose International Airport to do the same. 

Promotion 

A broad approach will be employed to market and promote new nonstop service 

between Eugene and San Jose including public relations and advertising. 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Appendix 

C. Marketing and Public Relations Plan

46 

Marketing Mix 

Marketing efforts will target both business and leisure travelers, with a twothirds/one-third mix, through media and other outlets reaching those 

demographics. Use of a media buyer is advantageous to gain the most bang for the 

buck. A wide variety of communication methods and vehicles will be used. 

ADVERTISING - TRADITIONAL PAID MEDIA 

Proposed traditional paid media advertising is included in Table C.2. 

TABLE C.2 ADVERTISING - TRADITIONAL PAID MEDIA 

MEDIA 

MARKET 

EUGENE SAN JOSE 

Radio 

KUGN-590 AM(Eugene area) KCBS-740 AM (Bay Area) 

KPNW-1120 AM (Eugene area) KBAY-94.5 FM (Bay Area) 

KEUG-105.5 FM (Eugene area) KUFX-98.5 FM (Bay Area)

KLOO-1340 AM (Albany/Corvallis) KSAN-107.7 FM (Bay Area) 

KSCR-1320 AM (Eugene area) KEZR 106.5 FM (Bay Area)

KUJZ-95.3 FM (Eugene area) KNBR-680 AM (Bay Area) 

KEJO-1240 AM (Albany/Corvallis) KRTY-95.3 FM (Bay Area) 

 KSJO-92.3 FM (Bay Area) 

Television 

KVAL-TV (CBS) KICU-TV (Independent) 

KEZI-TV (ABC) KMTV-TV (NBC) 

KMTR-TV (NBC) 

Fox Sports Fox Sports 

ESPN ESPN 

Newspaper 

Register-Guard San Jose Mercury News 

 

Silicon Valley/San Jose Business 

Journal 

Magazine 

Eugene Magazine The Wave 

Oregon Quarterly (UO) The Chamber Advocate 

Oregon Stater (OSU) 

Open For Business 

SOCIAL MEDIA ADVERTISING 

Once viewed as experimental, social media is now recognized as a solid way to 

connect to thousands of current and potential customers. This will be a combined 

effort with Horizon Air’s social media efforts. 

• Twitter: http://twitter.com/flyEUG 

• Facebook: http://www.facebook.com/flyEUG 

• YouTube: http://www.youtube.com/user/EugeneAirport 

• Flickr: http://www.flickr.com/photos/eugeneairport 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Appendix 

C. Marketing and Public Relations Plan

47 

 PERFORMANCE PROGRAMS 

Demographic information for several local arts organizations matches the Eugene 

Airport business traveler target market. These organizations include: 

• Eugene Ballet 

• Eugene Opera 

• Eugene Symphony 

In addition a broader segment of Eugene Airport’s secondary target market can be 

reached through other arts organizations including The Shedd (White Christmas, 

Oregon Festival of American Music, Jazz Singers.) 

MARKETING AGREEMENTS 

Marketing agreements include the promotional support of community events that 

reach target business and/or leisure markets and include measurable benefit to the 

Eugene Airport in the form of: 

• Logo on event promotional materials 

• Banner displayed at event 

• Ticket giveaway 

DIRECT MARKETING 

Mailings and email blasts to: 

• Travel agent databases 

• Travel coordinators at Eugene-San Jose linked businesses 

• Chamber of Commerce databases 

• Visitors and Convention Assoc. databases 

BACKLIT ADVERTISING 

• Eugene Airport 

• San Jose International Airport 

OWNED AND ADDED VALUE MARKETING 

Billboard - 

• Eugene Airport 

• San Jose International Airport 

Website - 

Eugene Airport - www.flyEUG.com (Front page promotion) 

San Jose International Airport - www.sjc.org (Front page promotion) 

City of Eugene Website (News articles and news release on newsroom page) 

Owned or valued

added marketing will

be utilized including

billboards, websites,

and newsletters.
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Appendix 

C. Marketing and Public Relations Plan

48 

Community Web Pages/Blogs 

• KVAL Communities 

• http://www.myeugene.org 

• http://www.southsanjose.com 

• http://www.citizensanjose.com 

Newsletter Articles - 

• Travel Matters 

• The Transponder 

• Public Works Monthly 

• Eugene City Council weekly newsletter 

COMMUNITY PARTNERSHIP ORGANIZATIONS 

Eugene Area Chamber of Commerce 

• www.flyEUG.com banner ad on chamber website 

• Announcements on chamber website 

• Flyer mailings - membership of 2,000 

• Ticket giveaways at other Business After Hours events 

Springfield Chamber of Commerce 

• www.flyEUG.com banner ad on chamber website 

• Announcements on chamber website 

• Flyer mailings to membership of 1000 

• Ticket giveaways at Business After Hours events 

Travel Lane County (formerly Convention and Visitors Association of Lane County 

Oregon) 

• www.flyEUG.com banner ad on TLC website 

• Announcements on TLC website 

• Flyer mailings to membership of 500 

• Email blasts to membership of 500 

• Traveler e-newsletters, 10,000 recipients 

• Travel Trade e-blasts 

• Tourism Forum presentation 

Lane Metro Partnership – Business Development Organization 

• www.flyEUG.com banner ad on Lane Metro website 

• Announcements on Lane Metro website 

• Trade e-newsletters 

• Contact with businesses with Eugene-San Jose link. 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Appendix 

C. Marketing and Public Relations Plan

49 

Other Community Partnership Opportunities 

• Albany Area Chamber of Commerce 

• Corvallis-Benton Chamber of Commerce 

• Cottage Grove Chamber of Commerce 

• Fern Ridge Chamber of Commerce 

• Florence Area Chamber of Commerce 

• Junction City/ Harrisburg Chamber of Commerce 

• Roseburg Area Chamber of Commerce 

EARNED MEDIA 

Earned media is the advertising equivalencies for each print news article or 

broadcast news story. 

Eugene Market:

• Newspaper – Advertising 

equivalency of $10,500 

• Television – Advertising 

equivalency of $10,000 

• Radio – Advertising equivalency 

of $3,000 

• Magazine – Advertising 

equivalency of $20,000 

San Jose Market:

• Newspaper – Advertising 

equivalency of $10,500+ 

• Television – Advertising 

equivalency of $10,000+ 

• Radio – Advertising equivalency 

of $3,000+ 

• Magazine – Advertising 

equivalency of $2,000+ 

TRADE SHOWS 

The Airport invested in a portable display board for use at business trade shows 

throughout the catchment area. This provides a way to have direct contact with 

business and leisure travelers to promote the Eugene-San Jose nonstop service. 

Short and Long-Term Projections 

Once the new nonstop route is implemented passengers accustomed to driving to 

Portland International Airport to fly to San Jose are expected to begin changing that 

behavior, building Eugene Airport passenger numbers to San Jose International 

Airport over time. Fares need to be competitive to allow this shift to happen. The 

revenue guarantee will allow for this transition over two to three years if needed, 

but will likely happen earlier. 

The key to any successful marketing and public relations program is measurement 

through continuous tracking and evaluation. Tools for this measurement include: 

• Passenger Demand Analysis 

• Passenger Intercept Survey 
Proposal under the Small Community Air Service Development Program 

City of Eugene/Eugene Airport Appendix C. Marketing and Public Relations Plan

50 

• Earned media • Website activity tracking • Social Media activity tracking • Continued support from community partners 

Conclusion 

A strong Marketing and Public Relations Plan for the EugeneSan Jose nonstop route is critical, especially during times of 

economic recovery. Consistency in the message, branding, and 

focus of the marketing campaign is important.