### 212 Airport Drive www.bradfordairport.net

july 18,2014

The Honorable Anthony Foxx Secretary ofTransportation U.S. Department ofTransportation 1200 New jerseyAvenue, SE Washington, DC 20590 

## fi.DFllRD EGIOD.RL**RIRPll~"l~** 

### Lewis Run, PA 16738 814·368·5928 EX 10

.- ·

.._':

RE: Petition ofBradford, PA for a waiver from the 10-enplanementstatute, Docket-OST·DOT-2003-14528
Dear Mr. Foxx:
Bradford Regional Airport Authority (Authority) understands that onjune 24,2014, the Department ofTransportation issued Order 2014-6-6; Terminating EAS Eligibility and Establishing Waiver Procedures for Bradford Regional Airport (BFD). Commercial air service is an importanteconomic generator in ourregion. The Authority feels strongly that continuing Essential Air Service (EAS) is critical to the economic viability ofthe community.
The Authority formally requests an Exemption from 49 U.S.C. § 41731 (a)(1)(B) to continue EAS at BFD. The basis for this waiver request is that BFD has suffered from a temporary and steadydecline in passenger enplanements since Gulfstream International Airlines (now Silver Airways) initiated service in late 2008. The decline can be clearly attributed to Silver's poorreliability, inferioraircraft, expensive/shrinking hub atCleveland Hopkins International Airport (CLE) and a management culture at Silver that was at best indifferentand at worst negligent in theirhandling of EAS communities nationwide.
The Secretary has the ability to grant a waiver to an airport that has had a "temporary" reduction in passenger numbers below the 10 enplanements per service day. Although Gulfstream/Silverwas in the market for five years, during this time, passengers continued to decline due to the reasons cited above. As shown in Table 1, BFD was easily above 10 enplanements per service day in everyyear until Gulfstream took over except for 2007. The 2007 low passenger count can be attributed to the de-hubbing ofPittsburgh International Airport (PIT) by US Airways. It took some time before other airlines at PIT increased service and average fares dropped significantly bringing strong air service to the PIT airporttoday. During the selection process in 2008, the community and Table 1 BFD PassengerEnplanements

BFD had signiticant concerns regarding Gulfstream's ability to support new service, their lack ofexperience in EAS communities and their lack ofexperience operating outside ofFlorida. It became immediately apparentthat Gulfstream's operation in CLE was not supported the same as their Florida operations, which led to significant delays and cancellations, lack ofmarketing and sales efforts and management indifference. The bankruptcy ofGulfstream and

### U.S. Department ofTransportation july 18,2014 Page 2 change in management team exacerbated the problems, resulting in a signitlcant passenger decline in 2012. BFD made numerous attempts to communicate with managementatGulfstream/Silver over the past tlve years, most ofwhich were met with more failed promises, ifresponses were even received. It was abundantly clear thatmanagement at Gulfstream/Silver treated the CLE area EAS markets as a steady source ofincome from federal subsidies with little
concern for actual performance.
With the management changes following Gulfstream's bankruptcy, the new management ofSilver Airways created a situation that was significantly worse than before, in both performance and enplanements. We believe Silver's problems are a systemic problem due to the culture and management ofSilver Airways, exemplified by a review oftheir current EAS markets. Ofthe 18 EAS communities that Silver served at the beginning of2014, all but six have shown passenger declines from 2011 to 2013. Passenger enplanements at those 18 markets declined at a combined rate of 31.1 percentover those two years, with 10 markets having passenger declines in excess of30 percent (Table 

### 2). It is ofno surprisethatmany ofSilver Airways' communities have been eliminated from the program due to the $1,000 passenger cap or are threatened to be eliminated by the 10 enplanementrule.
Per the definition oftemporarybeing "lastingfor onlya limited period of time; notpermanent", 

### it is in ourview important to not only identifY WHY the reduction in enplanements occurred but to also have a sufficient plan in which to return enplanements levels back above 10 per service day.
In 2008, in response to the community's concerns, BFD became an active participant in the Pennsylvania Air Service Committee (PASC), which was founded to help promote the commercial service airports within the state of Pennsylvania. As passengers at all five EAS markets that Gulfstream operated at in 2009 began to decline precipitously, the PASC, Pennsylvania Department ofTransportation (PennDOT) and PIT began working together to determine a solution. In 2010, a decision was made to pursue a statewide study to determine passenger demand, and the study formally began in 2011. This multi-year study was undertaken to quantify passengers in each catchment area and forecast potential enplanements ifPIT became ourconnecting hub. More than 30 community meetings were held throughout the state including in each EAS community to discuss air service needs and gauge support for this service. This study found thatreliableserviceon 9-seataircraftto PIT, combinedwith a low-local farestructurecan be justassuccessfulatPITasit

### hasbeen in St Louis for CapeAirandAirChoice One. See Appendix A 

### for a discussion ofthe PIT Connector study.
The community, PennDOT and PIT have spent nearly three years and a significant amount ofmoney studying the issues with current air service, and have identified a viable solution to improve passengertraffic and allow BFD to fully satisfY EAS minimums ofnot only the 10 enplanementrule, butalso the $200 subsidy perpassenger rule. There were countless meetings, conference calls and correspondences with nearly a dozen airlines around the country to recruitinterest in creating a low-fare, regional operation in PIT. The community, along with PennDOT and PIT. were successful inU.S. Department ofTransportation July 18, 2014 Page 3 attaining interest from three different airlines. We feel that partnering with Sun Air will enable BFD to increase passengers above 10 enplanements within the first year ofoperations.
With being close to implementing this multi-year study and plan, we are looking for the US DOT to allow Bradford to start service to PIT and granta waiver in order to allow us to prove that our concept is capable ofincreasing enplanements back to historic levels. Surely there are no other EAS communities in the country thathave been a partof such a detailed study and have a fully executable plan on which to right the ship and excel with their EAS. In supportof this project, PennDOT and PIT have pledged significant funds for marketing and sales efforts in order to ensure air service remains at Bradford while we implement service to PIT.

We respectfully request a waiver to continue our air service for one (1) year and quickly move to award our EAS contractto Sun Air so that we can begin to rebuild passengers to demonstrate to the US DOT that our passenger reduction truly was "temporary". We look forward to working with you, the airlines, PIT, and the community to fix the broken EAS system at BFD. This plan is a practical solution to increase passengerlevels to exceed the EAS minimums while ensuring access to the National Transportation System.

Ifyou have any questions, please contactme at (814) 368-5928. Sincerely,

Thomas C. Frungillo, A.A.E



### Cc: U.S. Senator Bob Casey PA Governor Tom Corbett PA State Representative Martin Causer PcnnDOT Secretary Barry Schoch, P.E. Bradford Regional AirportAuthority Bradford Area Alliance Marcellus Shale Coalition U.S. Congressman Glenn Thompson PA State Senatorjoe Scarnati PA State Representative Kathy Rapp McKean County Commissioners Pittsburgh International Airport University ofPittsburgh at Bradford Sun Air International

## AppendixA: Discussion ofPIT Connectorand Midwest EAS Comparisons Pennsylvania Regional Air Service 

### Plan
Starting in 2012, Mead &Hunt was contracted to perform a statewide study to establish a baseline level ofdemand from the 13 commercial service airports in the state ofPen·nsylvania (excluded both Philadelphia International Airport (PHL) and P11l and to determine the viability ofconnecting those airports to PIT. This was the first comprehensive air service development study completed in many ofthe EAS markets, and enabled the communities to have a better feel for what their air service demand actually is. As part ofthe study, representatives from Mead & Hunt performed more than 30 community meetings around the state, allowing for direct discussions in each community ofcurrent air service, as well
as discussion ofthe current airline industry trends.
The study found thatthere was significant diversion (i.e. leakage) to the larger airports in the region. Leakage is not a phenomenon only associated with the smallest EAS markets and is experienced by most airports around the country. The study found that all13 ofthe commercial service airports in Pennsylvania leaked at a minimum of40 percent oftheir passengers, while the EAS markets leaked as much as 99 percent oftheirpassengers to surrounding airports (Table A.l).
The study found that PHL and PIT were the main diverting airports, broken down geographically. For those markets in the eastern halfofPennsylvania, their main leakage was to PHL, while those in the western halfofPennsylvania predominately drove to PIT for their air service. This was true ofthe EAS Table A.1 Domestic and International Retention Catchment Retention o/o

Area Domestic International Total 

# I Allentown 38 8 34 Altoona _::.:'---+---=1 

### t---';j_--**~-~Br~a~d7fu~tu~--~~---+----~0~--~--~3~---~**

.........::.D.::.UB::.o"'i"-s--l

_ __c.-c--l--..,=,1

___ +--::6::.....--l Erie I 31 38

Lancaster i 2

### ~- Latrobe 18 1 2 15 State College 63 47 60 Wilkes Barre/ i 49 14

Scranton I 

## 1.1

___**1--·----~** Williamsport 5 44 10 Total 

## I 37 14. markets in the western halfofPennsylvania as well. Only in the case of BFD was the primary diverting airport Buffalo. Even with Buffalo being a drive that is approximately 67 percentcloserin drive time, a fair number ofpassengers chose to still drive to PIT to tly (TableA.2).

Through the leakage study and a comprehensive survey in each community, Mead & Hunt was able to determine that the majority ofpassengers diverted due to reliability, fares and schedules. Although PIT is not a hub as itwas in the 1990s and 2000s, it still offers more than160 daily departures to 36 destinations. The study completed multiple forecasting models for service to PIT, involving aircraft from 50-seat regional jets all the way to nine-seat turboprops. The study ultimately found thatthe scenario that would work the best in today's environmentwould be a 

### low-fare, highfrequencyservice on nine-seataircraft.
The primarycauses for leakage are the limited number offrequencies and high fares in comparison to the larger nearby airports. The study also found that the combination ofmarkets in "tags" or "one-stops" created a major dissatisfaction with customers, as well as greatly decreased the reliability ofthe service, especially during the winter months when

## AppendixA: Discussion ofPIT Connector and MidwestEAS Comparisons
weather in one community frequently impacted the air service to the othercommunity tied with it. What the study also found is thatthe EAS communities currently around Lambert-St. Louis International Airport (STL) are very similarin size and proximityto EAS communities in western Pennsylvania. They had poor service that was unreliable, high priced and seldom used. Their service was switched to a similar low-fare, high frequency service on a nine-seat aircraft, and passenger numbers improved tive to 10 times their most recent levels. 

### It is importantto note that communities that hadhistoricallyboarded less than five enplanementsperday are nowatmore than 15enplanementsperday. 

### MidwestEAS Community Comparisons Although every community is different and it's difficult to tind perfect "proxy" markets for comparison purposes, the closest example for BFD and Franklin is the Midwest EAS communities thatsurround STL. TableA.3 shows the population comparisons and distance to either STL or PIT. It is readily apparentthateven the smallest marketin terms ofpopulation, BFD, is largerthan halfofthe EAS markets in the STL system. BFD's proximity and population make it similar to Burlington, lA. Even the proximity to the secondary diversionary airport (Moline's Quad City International Airport for Burlington and Buffalo for Bradford) are similarly approximately 75 miles away). 

### BFD today, however, boards almost 70percent fewerpassengers than Burlington, even though they area similarproximity from the diversionary airportANDBFD has39percentmorepeople within 25milesof the airport
When comparing passengers from 2009 to 2013, the communities in the STL area have experienced growth from157 percentto nearly 1,200 percent. During that same time period, BFD's enplanements have SHRUNK by 20 percent.

Due to the success in the partnership between Cape Air orAir Choice One, STL and the local communities, these Midwest EAS markets have seen an explosion in growth in passengers over the past five years with a model very similar to the one that is being contemplated for BFD. The commitment ofPIT and PennDOT, however, goes beyond what has been done in those markets, and will help to further guarantee the success ofthe new service. 

### There is very little doubt, thatBFD, as well as Franklin, wouldseedramaticgrowth inpassengers with a similar/ow-fare, high· frequency operation to PIT, easilymaintaining more than 10enplanementsperday.