### APPLICATION UNDER SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST

- 2014

- 0133

SUMMARY INFORMATION 1



### All applicants must submit this Summary Information schedule, as the application coversheet , a completed standard form SF424 and the full application proposal on www.grants.gov

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

- policy/small

- community

- rural

- air

- service/SCA SDP

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

### (D&B) DATA UNIVERSAL

NUMBERING SYSTEM 

### (DUNS) NUMBER 

### , INCLUDING 

### +4, EMPLOYEE IDENTIFICAT ION NUMBER 

### (EIN) OR TAX ID


### . Legal Sponsor Name: Gallatin Airport Authority Name of Signatory Party for Legal Sponsor: Brian Sprenger

DUNS Number: 14

- 417

- 2814

EIN/Tax ID: 81

- 6005083

B. L IST THE 

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

### :
1.

__ G REATER 

### B OZEMAN 

### C OMMUNITY 

### 2._____________________

_______________________________ 3.______

_____________________________________________ 4.____________________________________________________

C

. P ROVIDE THE FULL AIRP ORT NAME AND 

### 3

- L ETTER 

### IATA A IRPORT 

### C ODE FOR THE

APPLICANT 

### ( S 

### ) AIRPORT 

### ( S 

### ) (O NLY PROVIDE CODES FO R THE AIRPORT 

### ( S 

### ) THAT ARE ACTUALLY

SEEKING SERVICE 

### ).

1. Bozeman Yellowstone International Airport ( BZN ) 2

.

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

- page limit of the SCASDP application.

### D OES THE AIRPORT SEEK ING SERVICE HOLD AN AIRPORT OPERATING CE RTIFICATE ISSUED BY

THE 

### F EDERAL 

### A VIATION 

### A DMINISTRATION UNDER 

### 14 CFR P ART 

### 139 ? (I F 

### “ N O 

### ”, P LEASE

EXPLAIN WHETHER THE AIRPORT INTENDS TO A PPLY FOR A CERTIFICA TE OR WHETHER AN

APPLICATION UNDER 

### P ART 

### 139 IS PENDING


### . )

Yes No (explain)

_____________________________________________ _________________________________

_______________________________________________________ _______________________ D. L IST THE 

### 2

- DIGIT CONGRESSIONAL DISTRICT CODE APPLIC ABLE TO THE SPONSORI NG

ORGANIZATION 

### , AND IF A CONSORTIUM 

### , TO EACH PARTICIPATIN G COMMUNITY


### . 1. 00 2

. 3

. 4

.

E. A PPLICANT 

### I NFORMATION 

### : (C HECK 

### A LL 

### T HAT 

### A PPLY 

### )

Not a Consortium Interstate Consortium Intrastate Consortium
Community currently receives subsidized Essential Air Service
Community (or Consortium member) previously received a Small Community Air Service Development Program Grant

If previous rec ipient: Provide year of grant(s):______ 2011

______________________ ; and , the text of the grant agreement section(s) setting forth the scope of the grant project : Selected as a first

- time grantee because the community demonstrated the need to obtain summer and winter seasonal non

- stop service to New York. A very strong local contribution illustrated the public private partnership's commitment to seeking additional service for this community, which is isolated from larger hub service. 

### F

. P UBLIC 

### /P RIVATE 

### P ARTN ERSHIPS 

### : (L IST 

### O RGANIZATION NAMES 

### )

PUBLIC PRIVATE

1. Gallatin Airport Authority 1. Big Sky Resort

2

. Yellowstone Country Montana 2. Yellowstone Club

3

. Bozeman Convention and Visitors Bureau 3. Korman Marketing Group

4 . Big Sky Convention and Visitors Bureau 4. Gallatin Foundation, Inc. x X

### G

. P ROJECT 

### P ROPOSAL 

### :

1. G RANT 

### G OALS 

### : ( CHECK ALL THAT APPLY 

### )

Launch New Carrier Secure Additional Service Upgrade Aircraft

First Service New Route Service Restoration Regional Service Surface Transportation Professional Services 2



### Other (explain below)

2. F INANCIAL 

### T OOLS 

### T O 

### B E 

### U SED 

### : ( CHECK ALL THAT APPLY 

### )

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

Start

- up Cost Offset : offsetting expenses to assist an air service provider in setting up a new station and starting new service (for example, ticket counter reconfiguration)

Revenue Guarantee : an agreement with an air service provider setting forth a minimum guaranteed profi t margin, a portion of which is eligible for reimbursement by the community

Recruitment of Air Carrier: air service development activities to recruit new air service, including expenses for airport marketers to meet with air service providers to make the

case for new air service

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

counted as in

- kind contributions only Ground Handling Fee : reimbursement of expenses for passenger, cabin, and ramp (below wing) services pr ovided by third party ground handlers

Travel Bank : travel pledges, or deposited monetary funds

, from participating parties for

the purchas e of air travel on an air carrier

, with defined procedures for the subsequent use of the pledges or the deposited fun ds; counted as in

- kind contributions only

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

### Other (explain below)

______________________________________________________________________________

______________________________________________________________________________

H

. E XISTING 

### L ANDING 

### A IDS AT 

### L OCAL 

### A IRPORT 

### :
Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

I

. P ROJECT 

### C OST 

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



### L INE 

### D ESCRIPTION 

### S UB 

### T OTAL 

### T OTAL 

### A MOUNT



### 1 Federal amount requested $750,000

2 State cash financial contribution Local cash financial contribution

3a Airport cash funds

3b Non

- airport cash funds $795,000

3 Total local cash funds ( 3a + 3b ) $855 ,000

4 TOTAL CASH FUNDING ( 1+2+3 ) $1,605 ,000

In

- K ind contribution

5 a Airport In

- Kind contribution ** $70,000

5b Other In

- Kind contribution ** $800,000

5 TOTAL IN

- KIND CONTRIBUTION
( 5 a + 5b ) $870,000

6 TOTAL PROJECT COST ( 4+ 5 ) $2,415,000

J . IN

- KIND CONTRIBUTIONS** For funds in lines 5a (Airport In

- Kind contribution) and 5b (Other In

- Kind contribution), please describe the source(s) of fund(s) and the value ($) of each.

BZN Airport

– Landing Fee Waivers

- $40,000 infrastructure package $30,000
Korman Marketing Group (KMG) Seat B ank $800,000

### K

. I S 

### T HIS 

### A PPLICATION 

### S UBJECT 

### T O 

### R EVIEW 

### B Y AN 

### A FFECTED 

### S T ATE 

### U NDER 

### E XECUTIVE



### O RDER 

### 12372 P ROCESS 

### ?

a. This application was made available to the S tate under the Executive Order 12372
Process for review on (date) _____________.

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

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

L. I S 

### T HE 

### L EAD 

### A PPLICANT OR 

### A NY 

### C O


### - A PPLICANTS 

### D ELINQUENT 

### O N 

### A NY 

### F EDERAL 

### D EBT 

### ? (I F 

### “Y ES 

### ”, P ROVIDE 

### E XPLANATION 

### )

No Yes (explain)

___________________________________ __________ _________________________________

______________________________________________________________________________ APPLICATION CHECKLIST

I NCLUDED ? I TEM
For Immediate Action

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

. Existing Grants.gov users must verify ex isting www.grants.gov account has not expired and the A uthorized O rganization R epresentative (AOR) is current

.

For Submission by 5:00 PM EDT on July 31, 2014 Communities with active SCASDP grants: notify DOT/X50 of intent to terminate existing grant in order to be eligible for selection in FY2014 Complete Application for Federal Domestic Assistance (SF424) via www.grants.gov

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

A pplication of up to 20 one - sided pages (excluding any letters 

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

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

.

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

.

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

.

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

 Designation of a legal sponsor responsible for administering the program

. A motion for c onfidential treatment (if applicable)

– see Appendix D below.

# Small Community Air Service

Development Program Grant Proposal

For 

# Bozeman Yellowstone International Airport

DUNS # 144172814 Congressional District #00 Docket DOT

- OST

- 2014

- 01132014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 2 

# Table of Contents

1. TECHNICAL OUTLINE OF PROPOSAL

................................ . 3

Contact Information

................................ ................................ .... 3 Legal Sponsor of Application

................................ .......................... 3 Community Partner in Application

................................ .................... 3 Brief Description of Project

................................ ............................ 3



## 2. GRANT PROPOSAL SU MMARY

................................ .......... 5

Statement of Air Service Deficiency

................................ .................. 5 Limited Southern US Air Service Access

................................ .............. 6 BZN Fares: Higher than Peer Group and National Average

........................ 7



## 3. BZN MARKET AREA AND CURR ENT AIR SERVICE

................... 9

BZN Market Area

................................ ................................ ......... 9 Current Passenger Traffic Distribution at BZN

................................ .... 1 0 Air Service Development is a Co ntinuous Practice at BZN

...................... 11 Current Grant Proposal Differs From FY 2011 Grant Award

..................... 1 2



## 4. GRANT ADMINISTRAT ION

................................ ............. 1 4

Requested Term of Grant

................................ ............................ 1 4 Program Fund Allocation and Plan

................................ .................. 1 4 In

- Kind Funding

................................ ................................ ........ 1 5 Risk Mitigation/Revenue Guarantee Terms

................................ ........ 1 5 Marketing /Advertising and Promotional Activities

............................... 1 62014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 3 

# 1. Technical Outline of Proposal

Contact Information

All contact regardin g the grant application of the Gallatin Airport Authority should be directed

to:

Mr. Brian Sprenger. A.A.E. Airport Director 850 Gallatin Field Rd., Suite 6 Belgrade, MT 59714 P: 406

- 388

- 6632 ext. 102 E: brian.sprenger@bozemanairport.com



## Legal Sponsor of Application

The legal sponsor of this Small Community Air Service Development Pr ogram grant application

is the Gallatin Air port Authority

.



## Community Partner s in Application

The Gallatin Airport Authority has tremendous community support for th is grant application, including the following partners:

 Korman Marketing Group

 Gallatin Foundation, Inc.

 Big Sky Resort

 Yellowstone Club

 Yellowstone Country

 Bozeman Convention and Visitors Bureau

 Big Sky Convention and Visitors Bureau



## Brief Description of Project

The community is requesting a grant in the amount of $750, 000 with a community match of $855 ,000 for a total cash contribution of $1,60 5 ,000. In

- k ind incentives are being offered by2014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 4 the Korman Marketing Group in the form of an $800,000 ticket bank . The airport is also offering

in

- kind incentives, which are valued at $70,000, for a total of $870,000 of in

- k ind incentives.

The air servi ce deficiency that exists at the Bozeman Yellowstone International Airport (BZN) is
the limited southern US air service access, and the intent of the grant is to incu bate new
southern US service to Dall as

– Ft. Worth (DFW). The airport and community partners have given serious consideration to the Department of Transportation’s guidance on a multi

- faceted approach to the use of the funding, and a portion of the cash funding will be for risk abatement
as well as a stra tegic marketing /advertising plan in order to help ensure th e self sufficiency of
the route . The details and specifics of the grant implementation plan are outlined in detail later in the application.2014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 5 

# 2

. Grant Proposal Summary

Statement of Air Service D eficiency

The Gallatin Airport Authority, in conjunction with strong support from its community partners, respectfully submits its grant application for the Small Community Air Service Development Program . Bozeman Yellowstone International Airport can be classified as a geographically isolated airport in south

- west Montana. As the gateway to Yellowstone National Park, as well as world class skiing and outdoor recreational opportunities, the economy of the region is heavily influenced and driven by touri sm. The economic impact that visitors provide to the community not only impacts the greater Bozeman region, but also a wider geographic area than most airport catchment areas due to the geographic remoteness.

The map of the 2014 year
- round network carrier scheduled air service at BZN illustrates the deficiency for southern US passengers to efficiently travel to/from the greater Bozeman region.

T he primary objective of this grant proposal is for year

- round DFW service, however, seasonal
service will be cons idered if year

- round service is deemed unachievable. The greater Bozeman community believes that year

- round access to/from DFW would provide the greatest benefit, but also understands that the realities of today’s aviation industry are such that seasonal

s ervice may be an acceptable alternative.

Source : Innovata, LLC via Aviation DataMiner2014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 6 

## Limited Southern US Air Service Access

As the route map indicates, there are potential connectivity options for some travelers
between the southern US and BZN. Denver International Airport (DEN) and Salt Lake City International Airport (SLC) are two airports w h ere southern US passengers can conv eniently connect to BZN, however, the primary issue is that there are limited available seats on these routes due to their popularity. This can be described as “hub choke”, which is a phenomenon where passengers may be able to travel from, as an example, Austin, TX to Denver on United Airlines, but the flights on United Airlines between Denver and Bozeman are almost completely full. This deters inbound passenger traffic and negatively impacts the economy in the greater Bozeman region.

A snapshot of the load factors at BZN for CY 2013 is helpful to illustrate the concept of “hub
choke” and how it is manifested at BZN.


# BZN Load Factors for Nonstop Flights Which are Primary Connections to/from Sou thern US

CY 2013

Source : Aviation DataMinerTM analysis of DOT/BTS Form 41 Traffic

As the graph and table highlight, there are very limited available seats between Denver and Bozeman and Salt Lake City and Bozeman. Load factors are particularly high in the summer/fall2014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 7 season and consistently over 90%. Furthermore, while a passenger can theoretically connect over a different hub from the southern US to BZN than DEN or SLC, it is only via circuitous routings which are untenable for travelers. The differenc e in nonstop miles flown from DFW to BZN via nonstop flight, and via other hubs currently served from BZN is a follows:



# BZN

- DFW Nonstop Mileage vs. Alternative Connecting Options

As the table indicates, all of the connecting options to get between the DFW region and BZN region require extremely circuitous routings, which due to the lack of available seats on the

SLC

- BZN and DEN

- BZN nonstops are the only option for passengers. This is unrealistic, as passengers are typically unwilling to fly such indirect routings, particularly to a market which relies heavily on inbound tourism traffic. These potential visitors will choose another option for their vacation, and this creates a negati ve economic impact on the greater Bozeman community.



## BZN Fares : Higher Th an Peer Group and National Average

In addition to the air service deficiency which exists in terms of available seats to/from Bozeman Yellowstone International Airport, another major deficiency is present in the comparison of one way average gross fares vs. a peer group of small hub airport s in the Pacific Northwest and Rocky Mountain Region.2014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 8



# BZN Gross Fare Comparison vs. Peer Group of Small Hubs and National Avg.

CY 2013

Source: Aviation DataMinerTM analysis of DOT/BTS O&D Survey

As the table clearly highlights, the one way average gross fare during CY 2013 at BZN was $278.18, which is over 20% higher than peer airports within the region. BZN fares are 8% higher than Billings. The peer group of airports were chosen based on geographic location, and are all airports th at are classified as small hubs as of CY 2013.

In addition to BZN’s high fares compared to its peer group, its fares are approximately 23% higher than the national average as well. The presence of high fares is an obvious deficiency in
the air service at BZN.2014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 9 

# 3

. BZN Market Area and Current Air Service

BZN Market Area

Bozeman is the fourth largest city in the state of Montana and the home to Montana State University which has over 15,000 undergraduate and graduate students. The region is the
gateway to Yellowstone National Park and is a world renowned destination for outdoor recreation. The population within a 60 minute drive time to Bozeman Yellowstone International Airport is approximately 130,000 and increases to 260,000 within a 120 minute drive tim e. A Small Community Air Service Development Program grant award will not only allow for increased inbound passenger traffic, but also allow local residents and those affiliated with Montana State University easier access to the national transportation sys tem. I t is estimate d
that over 20,000 Montana State University alumni live in the state of Texas.



# BZN Extended Market Area

Source : Microsoft MapPoint

Bozeman Yellowstone International Airport is centrally located between the major cities in the state of Montana, and therefore the air service that benefits the greater Bo zeman region also benefits a greater portion of the state. No other airport is better located to have th e maximum2014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 10 reach throughout all of the top six most populous ci ties and regions within the state of

Montana.



## Current Passenger Traffic Distribution at BZN

During CY 2013, Texas and other southwestern US states accounted for 8.1% of the BZN

passenger traffic. This deficiency is one that can be remedied with D FW nonstop service

. 

# BZN Geographic Passenger Traffic Distribution

CY 2013

It is important to note that the reason passengers from the southwestern states, including Texas, only represented approximately 8% of the traffic is due to lack of access. During CY2014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 11 2013, DFW was the #11 O&D market at BZN with over 18,000 annual passenger s. This is the top O&D market that did not have nonstop flights to/from BZN, indicating that there is very strong demand and a community of interest between the Dallas

– Ft. Worth region and the greater Bozeman region. This pent up demand is an excellent i ndication that any nonstops between BZN and DFW will achieve self sufficiency.


# BZN O&D Passenger Traffic and Revenue

CY 2013

Source: Aviation DataMinerTM analysis of DOT/BTS O&D Survey *LAS and AZA are Allegiant markets which flies nonstop twice weekly from BZN



## Air Service Development is a Continuous Practice at BZN

BZN and the community realize that scheduled air service is the lifeblood of the regional economy, and have been extremely proactive in their approach to committing to air service development efforts over the last several years. Highlights of these efforts and initiatives are
as follows:

• Met with airlines at their headquarters to discuss current performance and potential new service, including American Airlines to discuss entry into the market with BZN

- DFW

service2014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 12 • Attended industry conferences to stay abreast of current dynamics shaping air service development

• Hold regular confer ence calls with incumbent airlines to ensure that there is solid lines of communication and that route performance is meeting or exceeding expectations

• BZN has partnered with Big Sky Resort and other community partners over the last three years for successful incubation of service via the minimum revenue guarantee methodology (SFO and ATL are two examples) , and it has been a proven successful

appr oach to attracting new service. Due to increasing levels of risk aversion on the part of the airlines, th e Small Community Air Service Develop ment Program grant is

necessary in addition to the community partners cash match, in order to appeal to prospective airlines for BZN

- DFW service

• Over the last three years , BZN and the community has worked with several airlines to initiate new service including:

o Alaska Airlines PDX nonstops

o Delta Airlines LAX, LGA, and SEA nonstops

o United Airlines EWR and IAH nonstops

• Targeted city

- pair marketing campaigns have been utilized to promote any new service
and build awarenes s of new service, which would also be done for BZN

- DFW nonstop service. Examples of where strategic marketing and advertising has been successful in generating awareness include BZN

- EWR, BZN

- ATL, and BZN

- IAH.



## Current Grant Proposal Differs from FY 2011 G rant Award

The Gallatin Airport Authority and the BZN community were fortunate recipients of a $950,000 SCASDP award during FY 2011. This award was aimed at gaining access to summer and winter seasonal flying to the New York City metro region. Prior to th e SCASDP award, there was an air service deficiency for access to the east coast. United Airlines entered the market with seasonal EWR flying, which is still being operated allowing easy access to/from the greater Bozeman region and the northeastern US. Th is market has achieved self su fficiency, as is expected for a nonstop BZN

- DFW route.

Further evidence that the eastern US and New York City region were underserved comes as Delta Airlines is entering the LGA

- BZN market in CY 2014. Just as United saw with EWR, Delta sees an opportunity to enter a market that experiences an air service defic iency. United’s2014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 13 success, aided by the SCASDP award, surely helped Delta in its decision making process when considering the LGA

- BZN market. Since airlines are much more risk averse in today’s aviation environment, SCASDP grant awards aid in airlines evalua tion and entrance into markets where they see promise. DFW

- BZN is one of these markets, and it is believed that a SCASDP award will help fill an air service deficiency for the greater Bozeman community.2014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 14 

# 4. Grant Administration

Requested Term of Grant

The Gallatin Airport Authority respectfully requests that the term of the grant be for three

year s , and thereafter any unused funds will be relinquished back to the Department of Transportation.



## Program Fund Allocation

The primary purpose of the g ra nt request is for risk mitigation funding for Dallas

– Ft. Worth (DFW) access. The airport authority and community strongly believes that this service will be successful, with a portion of the funding going towards a marketing/advertising program to increase and build awareness within the community of the new service. The c ommunity partners have pledged for this application a significant amount to both the revenue guarantee/risk mitigation portion and the the marketing and advertising of the new servi ce.
The total cash contribution is as follows:2014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 15 

## In

- Kind Funding

Total in

- kind funding is valued at $870,000, another indication of the amazing level of community support for this grant application.

T he airport will offer in

- kind incentives that will ease the financial commitment of the airline

. The airport is prepared to waive landing fees for a period of 12 months, which is a $40,000 value. Additionally, the airport will provide the airline with an infrastructure package that will relieve a port ion of start up costs that the airline will incur at BZN. The infrastructure package is valued at $30,000, bringing the total in

- kind funding from the airport to a $70,000 value for DFW nonstop service.

Korman Marketing Group (KMG) , a Dallas based market ing organization which has over 15 years of managing ranch promotions in Montana, has pledged $800,000 as a ticket bank. KMG has strong business travel between Dallas and Montana, and it is expected to continue to grow over the next several years. Therefor e, DFW air service access is a natural fit for KMG, and hence the outstanding support they are willing to give to this grant proposal.



## Risk Mitigation/Revenue Guarantee Terms

The Gallatin Airport Authority already has a strategic action plan in place to immediately begin

neg otiations with prospective airlines upon acknowledgement of the grant award. The steps to implement the grant award are as follows:

• Funding would be available to prospective airlines for nonstop service to/from Da llas

– Ft. Worth (DFW)

. Year

- round service is the most desirable outcome, however, the community will entertain the possibility of seasonal service. DFW service will allow for significantly increased air service access not only to/ from the southern US, but also act as an international gateway for BZN travelers.

• Risk mitigation funds would support the initial phase of new air service. The Gallatin Airport Authority will negotiate a detailed se rvice agreement with the airline that is consistent with DOT g uidelines for grant fund use.

• The costs of operating the new service will be defined in discussions with the airline and outlined in a contractual manner. Industry cost data for appropriate aircraft type and stage length will help guide these discussions.2014 Small Community Air Service Development Program Grant Proposal Bozeman Yellowstone International Airport

Docket DOT

- OST

- 2014

- 0113 Page 16 • A target for overall revenue associated with the new service and the component of that
revenue that will be credited to the new route (local and beyond) will be agreed upon. From this, a targe ted revenue figure per flight will be established.

• Passenger traffic and revenue will be monitored by the airport for the new service, which will be provided by the airline

.

• Any revenue shortfall will be offset with risk mitigation funds upon detailed invoice
from the airline . The Gallatin Airport Authority , in tur n, will invoice the Department of Transportation for its share of funding in the agreed upon manner.



## Marketing/Advertising and Promotional Activities

A comprehensive and all encompassing marketing/advertising plan will be implemented to
ensure the success of new BZN

- DFW flights. The Gallatin Airport Authority and the community partners are dedicated to executing a strategic marketing/advertising plan, as is evidenced by the community partners’ cash contribution for these activities. Example s of tactics which have been used successfully in the past and will be used for this new service include the following:

 Print placements in local and DFW newspapers

 Television advertisements

 Billboard advertising in high traffic corridors to reach as many potential travelers as possible

 Radio advertisements during peak periods of the day to again reach as many potential travelers as possible and build awareness

 Print advertise ments in local publications

### OFFICE OF THE GOVERNOR

STATE OF MONTANA

STEVE BU LLO C K ANGELA McLEAN
GOVERNOR L T

. GOVERNOR



### July 28, 2014

To Whom It May Concern:

On behalf of the citizens of Montana, we thank you for your consideration for the Bozeman/Yellowstone International Airport at Gallatin Field in the Small Market Air Service Grant application. As the 4th 

### largest state in the country and 44th 

### in population, Montana has both challenges and opportunities in commerce and tourism-our second largest industry.

We are proud of Montana's success in economic growth and fiscal responsibility. Some of our challenges with air ser v ice have become a significant hindrance to growth

, which is why we support and request your assistance with this grant.

Our friends and partners involved in the Bozeman Airport Partnership have a long history of financially supporting air growth to ensure success. This partnership has led the state in increasing airlines and direct flight cities into the State of Montana. Even with those efforts, Montana is still one of the last major underserved areas of the United States, and needs a commitment in order to succeed

. The Southwest, Dallas and American Airlines represent the growth and competition needed for Montana to compete on a somewhat level playing field

.

American Airlines has an opportunity to open up the Montana market to its customer base and connecting citie s in the southwest, bring competition to the high price of airfare, and provide growth in southwest Montana. Thank you for your con s ideration to assist in this grant that can truly make a difference to Montana

. Please let us know of any questions or concerns.

Sincerely,

STEVE BULLOCK MEG O'LEARY Governor Director of the Department of Commerce

S TATE C APrfOL • P

. O

. Box 200801 • HE LE A, MONTANA 59620

- 0801

TELEPH O NE:: 406

- 444

- 3111 • FAX: 406

- 444

- 5529 • WEB S lTE : WWW

. M T.GOVJuly 28, 2014

To Whom It May Concern

I want to thank you for your consideration for our community’s application for this grant through the Bozeman

- Yellowstone International Airport at Gallatin Field. The Small Market Air Service Grant has a direct effect on the second largest industry in Montana, Tourism.

Big Sky Resort supports the prospect of American Airlines offering year round direct service into Bozeman

- Yellowstone International Airport from Dallas, Texas to expose the underserved Texas market to southwest Montana, which includes the destinations of Yellowstone National Park and Big Sky Resort, the largest ski resort in the United States.

Big Sky Resort is a winter ski destination building to ward a half million skier visits and has one of the largest convention facilities in the Montana hosting summer corporate meetings and incentive travel. Being a destination resort relying mostly on air travel to our resort, air service from the southwest
t hrough American Airlines would allow our community grow and prosper through the negotiation power the Small Market Air Service Grant as American Airlines is the only major airline not flying into Montana. There is a vast skiing and summer travel populatio n in TX that will not select MT as a destination because of costs, availability and direct flights. This will simply give us a chance to compete on an even playing field to the southwest traveler.

This grant would bring competition to the high price of airfare our destination guests currently endure, an opportunity to open Texas to a new market, and provide growth in southwest Montana. Big Sky Resort has been a leader in supporting and increasing air service to Bozeman for 25 years. We put a tremendou s value and effort toward the success of our air service as it is paramount to our business

success. Thank you for your consideration in our Grant Application as our community will work together to open Montana to the passengers of American Airlines , Texa s and the southern US

.
Sincerely,

Brandon Bang Sales and Marketing Director Big Sky Resort1188 N. 15 th Avenue Suite 4 Bozeman, Montana 59715 p 406.556.0681 f 406.556.0691



### July 24 , 201 4

To Whom It May Concern:

It is our pleasure to present this letter of support to Bozeman Yellowstone International Airport at Gallatin Field (BZN), along with the City of Bozeman and the Southwest Montana community in support of addr essing the current

non

- stop service from the Dallas

- Fort Worth Airport (DFW) with American Airlines to our wonderful area.

Korman Marketing Group has been operating guest and corporate programs in the Bozeman area since 1998 . In 20 13, our travel departme nt booked over 5, 0 00 guest s on round trip flights to Montana from points originating throughout the United States

, and we are currently on target for meeting this number again in 2014

. In addition to guest bookings , many of our employees fly between Dalla s , location of our corporate headquarters, and Bozeman on business throughout the year.

Upon review of originating cities in prior years

, the biggest void for our guests is a hub

- base in the southern U.S. from which to offer direct flights to Bozeman. Dallas

- Fort Worth Airport (DFW) with American Airlines is in our view the perfect location . In the interest of guest service, Korman Marketing Group is delighted to offer an annual ticket bank commitment with American Airlin es in support of our outstanding airport and our supportive leisure, education and business community’s consolidated effort to bring direct air service between the two cities

.

Sincerely,

Paul J. Stouffer Senior Director , Promotions Compliance 1188 N. 15 th 

### Avenue, Suite 4 Bozeman, Montana 59715