APPLICATION UNDER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT-OST-2014-0133

SUMMARY INFORMATION1

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/SCASDP

A. PROVIDE THE LEGAL SPONSOR AND ITS DUN AND BRADSTREET (D&B) DATA UNIVERSAL 

NUMBERING SYSTEM (DUNS) NUMBER, INCLUDING +4, EMPLOYEE IDENTIFICATION 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. LIST THE NAME OF THE COMMUNITY OR CONSORTIUM OF COMMUNITIES APPLYING:

1.__ GREATER BOZEMAN COMMUNITY

2.____________________________________________________

3.___________________________________________________

4.____________________________________________________

C. PROVIDE THE FULL AIRPORT NAME AND 3-LETTER IATA AIRPORT CODE FOR THE 

APPLICANT(S) AIRPORT(S) (ONLY PROVIDE CODES FOR 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.
DOES THE AIRPORT SEEKING SERVICE HOLD AN AIRPORT OPERATING CERTIFICATE ISSUED BY 

THE FEDERAL AVIATION ADMINISTRATION UNDER 14 CFR PART 139? (IF “NO”, PLEASE 

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

APPLICATION UNDER PART 139 IS PENDING.)

Yes No (explain)

______________________________________________________________________________

______________________________________________________________________________

D. LIST THE 2-DIGIT CONGRESSIONAL DISTRICT CODE APPLICABLE TO THE SPONSORING 

ORGANIZATION, AND IF A CONSORTIUM, TO EACH PARTICIPATING COMMUNITY.

1. 00 2.

3. 4.

E. APPLICANT INFORMATION: (CHECK ALL THAT APPLY)

Not a Consortium Interstate Consortium Intrastate Consortium

Community currently receives subsidized Essential Air Service

Community (or Consortium member) previously received a Small Community Air 

Service Development Program Grant

If previous recipient: Provide year of grant(s):______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. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION 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. PROJECT PROPOSAL:

1. GRANT GOALS: (CHECK ALL THAT APPLY)

Launch New Carrier Secure Additional Service Upgrade Aircraft

First Service New Route Service Restoration

Regional Service Surface Transportation Professional Services2

Other (explain below)

2. FINANCIAL TOOLS TO BE USED: (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 profit margin, a portion of which is eligible for reimbursement by the 

community

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

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

case for new air service

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

counted as in-kind contributions only

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

wing) services provided by third party ground handlers

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

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

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

 

2 “Professional Services” involve a community contracting with a firm to produce a product such as a marketing 

plan, study, air carrier proposal, etc.
Other (explain below)

______________________________________________________________________________

______________________________________________________________________________

H. EXISTING LANDING AIDS AT LOCAL AIRPORT:

Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

I. PROJECT COST: DO NOT ENTER TEXT IN SHADED AREA

LINE DESCRIPTION SUB TOTAL TOTAL AMOUNT

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-Kind contribution

5a Airport In-Kind contribution** $70,000

5b Other In-Kind contribution** $800,000

5 TOTAL IN-KIND CONTRIBUTION 

(5a + 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 Bank $800,000
K. IS THIS APPLICATION SUBJECT TO REVIEW BY AN AFFECTED 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.

L. IS THE LEAD APPLICANT OR ANY CO-APPLICANTS DELINQUENT ON ANY FEDERAL DEBT?

(IF “YES”, PROVIDE EXPLANATION)

No Yes (explain) 

______________________________________________________________________________

______________________________________________________________________________

APPLICATION CHECKLIST

INCLUDED? ITEM

For Immediate Action

Determine Eligibility

New Grants.gov users must register with www.grants.gov.

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

and the Authorized Organization Representative (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

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

Application 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 confidential 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-2014-0113
2014 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 SUMMARY.......................................... 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 CURRENT AIR SERVICE ................... 9

BZN Market Area.........................................................................9

Current Passenger Traffic Distribution at BZN .................................... 10

Air Service Development is a Continuous Practice at BZN ...................... 11

Current Grant Proposal Differs From FY 2011 Grant Award..................... 12

4. GRANT ADMINISTRATION............................................. 14

Requested Term of Grant ............................................................ 14

Program Fund Allocation and Plan.................................................. 14

In-Kind Funding ........................................................................ 15

Risk Mitigation/Revenue Guarantee Terms........................................ 15

Marketing/Advertising and Promotional Activities ............................... 16
2014 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 regarding 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 Program grant application 

is the Gallatin Airport Authority.

Community Partners in Application

The Gallatin Airport Authority has tremendous community support for this 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 $1,605,000. In-kind incentives are being offered by 
2014 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-kind incentives.

The air service 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 incubate new 

southern US service to Dallas – 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 strategic marketing/advertising plan in order to help ensure the 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 Deficiency

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 tourism. 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. 

The primary objective of this grant proposal is for year-round DFW service, however, seasonal 

service will be considered 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 

service may be an acceptable alternative.

 Source: Innovata, LLC via Aviation DataMiner

Air Service 

Deficiency Area
2014 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 where southern US passengers can conveniently 

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 Southern 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/fall 

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

DL SLC-BZN UA DEN-BZN Total BZN Market

Load factors averaging in the 

high 80% range on an annual 

basis, and over 90% during peak 

months, deter inbound 

passenger demand because of 

lack of available seats

Market Jan - 13 Feb - 13 Mar - 13 Apr - 13 May - 13 Jun - 13 Jul - 13 Aug - 13 Sep - 13 Oct - 13 Nov - 13 Dec - 13 CY 2013

DL SLC-BZN 88.5% 88.6% 86.5% 81.3% 88.2% 76.8% 86.4% 90.7% 91.2% 92.3% 88.1% 87.3% 87.0%

UA DEN-BZN 87.0% 91.6% 89.5% 80.5% 87.1% 86.2% 87.0% 90.5% 91.6% 96.8% 91.6% 86.4% 88.7%

Total BZN Market 85.4% 87.4% 88.0% 76.5% 85.3% 83.1% 90.2% 92.6% 92.4% 92.2% 86.9% 84.8% 87.5%
2014 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 difference 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 negative economic impact on the greater Bozeman 

community. 

BZN Fares: Higher Than 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 airports in the Pacific 

Northwest and Rocky Mountain Region.

Routing Mileage % Higher Than 

Nonstop

DFW-BZN Nonstop 1,163 -

DFW-ATL-BZN 2,372 104.0%

DFW-SFO-BZN 2,272 95.4%

DFW-SEA-BZN 2,203 89.4%

DFW-PDX-BZN 2,169 86.5%

DFW-LAX-BZN 2,137 83.7%

DFW-ORD-BZN 1,987 70.9%

DFW-MSP-BZN 1,725 48.3%
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 that 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.

BZN EUG GEG BOI FAR COS BIL

National 

Avg.

Avg. One Way 

Gross Fare

$278.18 $219.96 $222.80 $230.92 $234.60 $245.14 $257.51 $226.64

BZN Fare Premiun 26.5% 24.9% 20.5% 18.6% 13.5% 8.0% 22.7%
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 time. 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 system. It is estimated

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 Bozeman region also

benefits a greater portion of the state. No other airport is better located to have the maximum 
2014 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 cities 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 DFW 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 CY 

MSO

BZN BIL

HLN

GTF

BTE

Drive Time and Miles From BZN

Missoula: 3.0 hours (201 miles)

Great Falls: 2.75 hours (175 miles)

Billings: 2.5 hours (154 miles)

Helena: 1.5 hours (91 miles)

Butte: 1.5 hours (78 miles)
2014 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 passengers. 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 indication 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 

service

R ank M arket P sgr P D EW % Originating 

@ B Z N

Gro ss OW 

F are

N et OW 

F are N et R evenue

1 DEN 61,266 83.9 43.3% $185.25 $162.41 $9,425,812

2 SEA 43,913 60.2 42.0% $205.16 $180.66 $7,302,644

3 LAS 39,927 54.7 61.7% $102.64 $83.43 $3,265,229

4 MSP 31,839 43.6 37.7% $280.54 $249.17 $6,898,790

5 AZA 29,431 40.3 57.2% $71.14 $56.50 $1,654,991

6 SFO 25,607 35.1 42.3% $255.17 $221.20 $5,050,457

7 LAX 25,467 34.9 36.9% $275.67 $240.19 $5,622,480

8 ATL 25,449 34.9 27.4% $327.92 $288.20 $5,850,289

9 ORD 24,522 33.6 30.4% $376.28 $337.27 $7,000,464

10 LGA 19,746 27.0 35.0% $345.53 $301.96 $5,456,490

11 DFW 18,443 25.3 36.8% $279.05 $240.21 $4,216,895

12 IAH 17,147 23.5 27.9% $271.04 $232.74 $3,612,019

13 BOS 17,045 23.3 31.9% $394.14 $347.06 $5,180,170

14 PDX 16,376 22.4 46.3% $236.79 $203.87 $3,104,090

15 EWR 14,479 19.8 23.1% $427.73 $382.14 $4,457,524

16 DCA 14,143 19.4 46.2% $341.38 $298.05 $3,879,198

17 OAK 13,175 18.0 46.2% $187.02 $155.49 $1,984,949

18 IAD 12,871 17.6 34.0% $330.25 $287.75 $3,329,798

19 PHL 12,504 17.1 24.5% $336.52 $293.53 $3,405,245

20 PHX 11,733 16.1 53.0% $227.32 $192.17 $2,143,593

21 MCO 11,363 15.6 49.3% $342.57 $299.06 $2,873,437

22 SAN 11,216 15.4 47.1% $271.18 $232.84 $2,320,427

23 MCI 10,264 14.1 39.8% $208.52 $174.62 $1,723,330

24 DTW 9,830 13.5 42.4% $326.82 $284.30 $2,464,792

25 SJC 9,818 13.4 40.6% $207.46 $173.51 $1,634,659

Total 527,575 722.7 41.2% $247.51 $215.26 $103,857,772
2014 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 conference 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 

approach to attracting new service. Due to increasing levels of risk aversion on the part 

of the airlines, the Small Community Air Service Development 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 awareness 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 Grant 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 the 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. This market has achieved self sufficiency, 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 deficiency. United’s 
2014 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 evaluation 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

years, and thereafter any unused funds will be relinquished back to the Department of 

Transportation.

Program Fund Allocation

The primary purpose of the grant 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 community 

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 service.

The total cash contribution is as follows:

Proposed Grant Activity

SCASDP 

Grant Funds

Community 

Funds

Total

Revenue Guarantee/Risk Mitigation

SCASDP funding $650,000 $650,000

Gallatin Foundation, Inc. $250,000 $250,000

Yellowstone Club $250,000 $250,000

Big Sky Resort $150,000 $150,000

Total Revenue Guarantee/Risk Mitigation $650,000 $650,000 $1,300,000

Marketing/Advertising Support

SCASDP funding $100,000 $100,000

Bozeman CVB $75,000 $75,000

Big Sky Resort $50,000 $50,000

Yellowstone Country $30,000 $30,000

Big Sky CVB $50,000 $50,000

Total Marketing/Advertising Support $100,000 $205,000 $305,000

Total Cash Contribution $750,000 $855,000 $1,605,000
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. 

The 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 portion 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 marketing 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. Therefore, 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 

negotiations 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 Dallas –

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 service agreement with the airline that is 

consistent with DOT guidelines 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 targeted 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 turn, 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. Examples 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 advertisements in local publications

OFFICE OF THE GOVERNOR 

STATE OF MONTANA 

STEVE BULLOCK ANGELA McLEAN 


GOVERNOR LT. 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 service 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 cities in the southwest, bring competition to the high price of airfare, and provide 

growth in southwest Montana. Thank you for your consideration 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 • HELE A, MONTANA 59620-0801 


TELEPHONE:: 406-444-3111 • FAX: 406-444-5529 • WEBSlTE: WWW.MT.GOV 

July 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 toward 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 

through 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 population 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 

tremendous 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, Texas and the southern US.

Sincerely,

Brandon Bang

Sales and Marketing Director

Big Sky Resort



1188 N. 15th Avenue Suite 4 Bozeman, Montana 59715

p 406.556.0681 f 406.556.0691

July 24, 2014 

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 addressing 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 2013, our travel department booked over 

5,000 guests 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 Dallas, 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 

Airlines 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. 15th Avenue, Suite 4

Bozeman, Montana 59715

 Paul J. Stouffer