August 2, 2011

Sponsor: Shenandoah Valley Regional Airport, Weyer’s Cave, Virginia

Greg Campbell, Airport Director

Congressional Code: VA-006

Dun & Bradstreet Number: 040154247

Tax Identification Number (EIN): 54-0919748

Application for Federal Support for Current Essential Air Service (EAS) via:

Advertising/Marketing Program

SHENANDOAH VALLEY REGIONAL AIRPORT

SHENANDOAH VALLEY, VIRGINIA

Proposal Under the Small Community Air Service Development Program

Docket DOT-OST-2011-0119
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 2

TABLE OF CONTENTS

Introductory Letters of Support 3

Summary Information – Appendix C 6

Introduction 8

The Shenandoah Valley Air Service Market 9

Current and Historical Service 10

Air Service Development Efforts 16

Air Service Needs and Deficiencies 17

Strategic Plan 21

Proposed Marketing Program 21

Implementation Timeline 25

Public/Private Partnership 26

Funding Plan 27

Performance Measures and Financial Controls 28

Legal Sponsor 29

Letters of Support 30

Availability of Alternate Airports 42

Airport Information 43

Community Profile 44

Comparison to Other Communities in Region 55

Conclusions 56

Section Page Number
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 3

INTRODUCTORY LETTERS OF SUPPORT
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 4
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 5
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 6

SUMMARY INFORMATION – APPENDIX C

Small Community Air Service Development Program

Docket DOT-OST-2011-0119

A. Applicant Information

 Not a Consortium Community now receives EAS subsidy

 Interstate Consortium Intrastate Consortium

 Community previously received a Small Community Grant

 If previous recipient, date of Grant: ______ 2003______________________

expiration date of Grant: __ October 28, 2006_____

B. Public/Private Partnership

Public:

1. Shenandoah Valley Regional Airport

2. Shenandoah Valley Regional Airport Commission

Private:

1. Shenandoah Valley Partnership

2. Harrisonburg-Rockingham Chamber of Commerce

3. Greater Augusta Chamber of Commerce

C. Project Proposal

 Marketing Upgrade Aircraft New Route

 Travel Bank Service Restoration Subsidy

 Surface Transportation Regional Service Revenue Guarantee

 Launch New Carrier Start-Up Cost Offset First Service

 Study Secure Additional Service Other (Specify)
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 7

D. Existing Landing Aids at Airport

 Full ILS Outer/Middle Marker Published Instrument Approach

 Localizer Other:

E. Project Cost

1. Federal amount requested: $ 150,000

2. State cash financial contribution: $ 0

Local cash financial contribution:

3a. Airport cash funds: $ 0

3b. Non-Airport cash funds: $ 50,000

3. Total local cash funds: $ 50,000

4. TOTAL CASH FUNDING: $ 200,000

In-Kind Contribution:

a. Airport In-Kind contribution: $ Various

b. Other In-Kind contribution: $ Various

5. TOTAL IN-KIND CONTRIBUTION: $ Undetermined

6. TOTAL PROJECT COST: $ 200,000

F. In-Kind Contributions

For funds in lines 7a (airport in-kind contribution) and 7b (other in-kind contribution), 

please describe the source(s) of fund(s) for each.

Advertising and marketing match money (media companies)

G. Is Application Subject to Review by State Under Executive Order 12372 Process?

 This application was made available to the State on ______.

 Program is subject to review, but has not been selected by the State.

 Program is not covered.

H. Is Applicant Delinquent on any Federal Debt?

 No
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 8

INTRODUCTION

The Shenandoah Valley Regional Airport has made tremendous progress in increasing 

passengers and reducing its leakage over the last three years. In that time, the Airport has spent 

more than $100,000 of its own money in publicizing its Essential Air Service to Washington Dulles 

on the United Express brand. In that time, the Airport has seen passengers grow by almost 140% -

proving that marketing of local air service can work to increase passengers. The challenge, 

however, is that the Airport is still retaining just 8% of its local catchment area passengers.

Through its recent work, the Airport has developed partnerships with major media outlets in the 

Valley, and it is able to leverage those partnerships for extensive ad space and air time. The 

challenge is that the Airport’s budget is small, so it is unable to sufficiently blanket the area in 

such a way as to further discourage passenger “leakage.” Due to the real, or in some cases 

perceived, fare disparity in using the Shenandoah Valley Regional Airport, many travelers from 

the immediate Shenandoah Valley catchment area don’t even check fares and schedules on 

local service before booking out of other 

airports in the region. The fare perception is 

not helped by the fact that the Shenandoah 

Valley had the highest average fare in the midAtlantic in 2010 – at $237 each way.

Still, the Airport believes the best way to 

reduce the Department of Transportation’s

current Essential Air Service burden at the 

Shenandoah Valley Regional Airport is to increase the number of passengers flying through the 

Airport, spreading the federal government investment over more passengers. As passenger 

traffic increases at the Airport, revenues will grow, and the federal subsidy required to support 

the air service will be reduced. The best way to grow passengers in the short term in the 

Shenandoah Valley will be to promote the current service to potential local travelers. The 

Department of Transportation has a unique opportunity to invest a small amount in this grant 

proposal, that could help save it millions of dollars in Essential Air Service (EAS) funding in the 

years to come.

“The Airport has spent more than 

$100,000 of its own money [on 

marketing]... [and it] has seen 

passengers grow by almost 140% -

proving that marketing of local air 

service can work...” 
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 9

THE SHENANDOAH VALLEY AIR SERVICE MARKET

Current and Historical Air Service

2010 was another positive year for Essential Air Service (EAS) at the Shenandoah Valley Regional 

Airport. Passengers grew by 29% from 2009 to 2010, adding about seven passengers per day 

each way – one of the most robust stories of growth of all airports in the Essential Air Service (EAS) 

program. This growth happened despite the fact that the average fare in the market went up 

13% in 2010.

The Airport is a critical link to the air transportation system, serving the heart of one of the most 

famed valleys in all of America. While the Airport isn’t located in any one large city, it draws 

passengers from a number 

of large cities throughout 

the Valley. In fact, the 

Airport was built in the 

center of the Valley in order 

to be able to attract and 

serve passengers from a 

number of cities, rather 

than just one.

The Airport’s immediate 

catchment area includes 

the communities of 

Staunton, Harrisonburg, 

Waynesboro, Augusta, and 

Rockingham. The 30 

minute drive Shenandoah

Valley Regional Airport 

catchment area (shaded in blue in map 1) is home to 174,822 people as of the latest US Census 

estimates, while the one hour drive catchment area (shaded in gray in map 1) is home to

416,932 people. The Valley has added 102,511 residents since 2000 – a population increase of 

31%. The Shenandoah Valley Regional Airport has the ability to draw from an even larger area 

due to its relative isolation – located between two ranges of the Appalachian Mountains.

MAP 1: Shenandoah Valley Regional Airport’s immediate

(30 minute) and extended (60 minute) catchment areas
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 10

34,660

11,990

14,700 14,510

11,880

10,210 8,830

13,760

15,560

20,000

1,480

430

270 250

320

270

260

1,110

1,310

1,720

49.5

17.0

20.5 20.2

16.7

14.4

12.5

20.4

23.1

29.8

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

PDEW International Domestic

$194 $199 $194 $201

$178 $174

$146

$254

$210

$237

4/Day PIT (US) +

4/Day IAD (UA)

2/Day PIT (US)

2/Day IAD (US)

3/Day IAD (UA)

In the last decade the Airport has seen a precipitous decline in the number of flights and 

available seats offered by its tenant airlines. In the early 2000s, the Airport had four flights a day 

each, to Pittsburgh and Dulles, with service on both the US Airways and the United Airlines codes. 

During that period, the Shenandoah Valley Regional Airport generated as many as 49.5 

passengers per day each way (PDEW) (see figure 1). By 2007, with EAS service provided only by 

US Airways Express to and from Dulles, passengers fell to just 12.5 per day each way (PDEW). In 

the three years since then the Airport has seen passengers grow by 138% despite the fact that 

fares have gone up by 62% - indicating the economy in the region is likely rebounding.

Air service connectivity has been a major problem in the Shenandoah Valley. These problems 

have been exacerbated by the fact that the Airport has seen numerous changes in its Essential 

Air Service (EAS) provider, including airline and destination changes. The Airport’s long-standing 

service to US Airways’ Pittsburgh hub was cancelled at the end of 2004 (see figure 1). Colgan 

Air, the EAS provider in the Shenandoah Valley, elected to move service to Washington Dulles, 

but retain the US Airways affiliation in 2005. This caused a lack of connectivity, due to the limited 

number of US Airways flights at Dulles that dramatically suppressed local passenger traffic and 

revenue. 

FIGURE 1: O&D Passengers and Average One Way Fares at SHD

CY2001 – CY2010; Source: US DOT Table OD1A
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 11

665

799

1421 1392

1553

1327 1331 1394 1336

1669

1076 1159

983

1174 1272 1288 1353

1509 1488 1479 1523

1733 1618

1305 1194

995

1564

1855 1825

1686

1478

1597

1816

2313 2348

2114

1826

1521

1862

2033

2470

0

500

1000

1500

2000

2500

3000

2008 2009 2010 2011

2011 SHD Passengers Are on 

Pace to Top Levels Last Seen 

in 2001, when Two Airlines 

Served Two Hubs from SHD

Once Colgan was able to put the United Airlines code on its Dulles flights the market again 

started to take off. In just the last year the Airport has added an average of 6.7 passengers per 

day each way – an increase in passengers of 29% (see figure 1). Fares are still a challenge, 

however. The average fare paid by passengers at Shenandoah Valley Regional Airport in 2010 

was $237 each way, which ranks Shenandoah Valley as the highest fare market in the MidAtlantic.

Even with higher fares than all surrounding airports, and with passenger leakage that is

estimated by the Airport’s recent True Market Study to exceed 90%, or 280 passengers per day 

each way, the Airport has seen month-over-month passenger gains in every month so far in 2011 

(see figure 2). In fact, in May of 2011 the Airport saw its best month in the last three years, with 

2,470 total passengers flying in and out of the facility, for an average of 39.8 passengers per day 

each way – an increase of 33% over passenger numbers for 2010.

FIGURE 2: O&D Passengers at Shenandoah Valley Regional Airport

January 2008 – May 2011; Source: Shenandoah Valley Regional Airport
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 12

There is much to be positive about in the Shenandoah Valley market in 2011. The Airport’s

extensive marketing campaign has been part of the reason for the passenger gains. The Airport 

has partnerships with more major media outlets in the Valley, and it is able to leverage those 

partnerships for extensive ad space and air time. The challenge is that the Airport’s budget is 

small, so it is unable to sufficiently blanket the area in such a way as to better discourage 

passenger “leakage.”

The biggest challenge to curbing leakage 

is the fact that the Shenandoah Valley 

Regional Airport is the most expensive, in 

terms of average fare, of all airports in the 

mid-Atlantic region, including Virginia, 

Maryland, and Delaware. For the 

calendar year 2010, the average one way 

fare at Shenandoah Valley was $237 (see 

figure 3).

Average fares in the Shenandoah Valley 

are 30% higher, or $54 higher each way,

than the regional average one way fare of 

$183 (see figure 3). Moreover, the 

Shenandoah Valley’s average one way 

fare is $64 higher each way than the average fare at Richmond, of $173 each way as of 2010. 

This causes a large number of passengers who live in the SHD catchment area to make the drive 

to Richmond – which is 124 miles each way with a roundtrip drive time of 4:44 – in order to 

access lower priced air service. Still, Richmond is only the market’s second largest source of 

passenger leakage. Most Shenandoah Valley passengers choose to make the longer drive to 

the higher fare market of Washington Dulles to access the national air transportation system. 

To better understand passenger leakage, the Airport commissioned – at its own expense – a True 

Market Study. The study was completed in the fourth quarter of 2010, representing traffic from 

the year ended second quarter of 2010. It showed the Shenandoah Valley Regional Airport 

retains just 8.3% of the passengers traveling to and from its one hour drive time catchment area 

(see figure 4). The study also showed that the Shenandoah Valley market generates a total of 

225,613 annual origin and destination passengers – or 309 passengers per day each way.

FIGURE 3: Average One Way Fares at Mid-Atlantic Airports

CY2010; Source: US DOT Table OD1A

$237

$223

$206

$202

$196

$192

$173

$161

$149

$142

$81

$0 $50 $100 $150 $200

Shenandoah Valley

Washington, DC

Charlottesville

Roanoke

Norfolk

Lynchburg

Richmond

Salisbury

Newport News

Baltimore

Hagerstown Regional Average: $183
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 13

Airport Passengers PDEW Share

1 Shenandoah Valley, VA 18,711 25.6 8.3% 

2 Washington Dulles, DC 86,271 118.2 38.2% 

3 Richmond, VA 41,714 57.1 18.5% 

4 Charlottesville, VA 30,988 42.4 13.7% 

5 Baltimore, MD 23,703 32.5 10.5% 

6 Washington National, DC 20,675 28.3 9.2% 

Other Airports 3,551 4.9 1.6% 

Total Shenandoah Valley Area Passengers 225,613 309 100.0% 

 

 

 

Rank

Shenandoah 

Valley, 8.3% 

Washington 

Dulles, 38.2% 

Richmond, 18.5% 

Charlottesville, 

13.7% 

Baltimore, 10.5% 

Washington 

National, 9.2% 

Others, 1.6% 

The study, which will be explained in more detail in the following sections of this proposal, shows 

that the largest proportion of the region’s travelers use Washington Dulles – representing 38.2% of 

the market’s travel or 118 passengers per 

day each way (see figure 4). Another 

18.5% of the region’s passengers – or 57 

passengers per day each way – use 

Richmond, while almost 14% - or 42 

passengers per day each way – use 

Charlottesville. In all, the market leaks 

283 passengers per day each way to 

other airports in the region – one of the 

highest leakage rates of commerciallyserved regional airports in the country.

The leakage study illustrates that there is 

a sufficient market in the Shenandoah 

Valley for the current Essential Air Service 

to be supported. It also illustrates that 

awareness of the service offered locally is 

not sufficient. In general, it appears local 

travelers assume they will have to drive to access air service.

With this leakage in mind, the Airport has developed a comprehensive plan to achieve its air 

service goals – in line with the SCASD Program. The Airport’s marketing and advertising plan

includes many media platforms, and will blanket the region, ensuring widespread outreach. The 

program is the best way for the DOT to ensure its EAS funding is being put to its best possible use 

in the Shenandoah Valley. The Airport cannot, however, undertake a wide ranging advertising 

campaign on its own – its revenues simply cannot cover that kind of expense. In this case, it 

needs a federal partner for financial assistance. The Airport believes a federal Small Community 

Air Service Development Grant will not only help it publicize its flight availability, but that it will 

also limit leakage, and capture more local passenger traffic.

The Shenandoah Valley Regional Airport currently has three daily flights on Colgan Air, dba 

United Express, to Washington Dulles, on 34-seat Saab SF340 aircraft, operated under the 

FIGURE 4: Originating Airport for SHD Catchment Passengers

YE2Q10; Source: Sixel Consulting Group True Market Study
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 14

Essential Air Service (EAS) program. The flights operate under an annual subsidy of $2.18 million, 

which was renewed in February of 2011. Current service continues to gain local support, with 

enplanements up more than 135% in the last three years.

It is important to 

Shenandoah Valley 

travelers that they have an 

omni-directional hub. 

Washington Dulles serves 

that purpose well. The 

Shenandoah Valley 

market’s top 25 origin and 

destination passenger 

markets are spread 

throughout the country 

(see figure 5). The largest 

markets in 2010 were 

Denver and Chicago, 

which each average 1.6 

passengers per day each 

way. Other major markets 

included Boston, New 

York/Newark, and Los 

Angeles, reflecting the wide-ranging needs of business travelers in the community.

The problem with local service through Washington Dulles is that the Shenandoah Valley market 

is often saddled with higher than average fares. It has been documented that SHD has the 

highest average fares in the mid-Atlantic region, at $237 each way. It must also be noted that 

the Shenandoah Valley has high average fares even in its shorter-haul markets. For example, 

the average fare from SHD to New York/Newark in 2010 was $195 each way, or $390 roundtrip 

(see figure 6). Similarly, the average fare from SHD to Atlanta was $302 each way and the 

average fare to Detroit was $254 each way – both much higher than regional airfare averages 

over shorter stage lengths.

FIGURE 5: Top 25 O&D Passenger Markets, Shenandoah Valley

Regional Airport, 2001 – 2010; Source: US DOT Table OD1A

1,160

1,140

1,020

920

890

880

670

630

560

540

540

520

510

500

440

440

440

390

360

350

270

250

250

250

230

1.6

1.6

1.4

1.3

1.2

1.2

0.9

0.9

0.8

0.7

0.7

0.7

0.7

0.7

0.6

0.6

0.6

0.5

0.5

0.5

0.4

0.3

0.3

0.3

0.3

0 200 400 600 800 1,000 1,200

Denver, CO

Chicago, IL

Boston, MA

New York/Newark, NY

Los Angeles, CA

San Francisco, CA

Orlando/Sanford, FL

Dallas/Fort Worth, TX

Kansas City, MO

Las Vegas, NV

Seattle/Tacoma, WA

Houston, TX

San Diego, CA

Phoenix/Mesa, AZ

Tampa, FL

Indianapolis, IN

Hartford, CT

Columbus, OH

Portland, OR

Cleveland, OH

Atlanta, GA

Washington, DC

San Antonio, TX

Detroit, MI

Sacramento, CA

Annual Passengers 
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 15

High average fares in the 

Shenandoah Valley market have 

the effect of not only suppressing 

overall passenger traffic, but also 

causing much of the region’s 

passenger traffic to leak to other 

airports. With fares at 

Charlottesville, Richmond, and the 

Washington, DC airports all lower 

than the fares at the Shenandoah 

Valley Regional Airport the majority 

of local passengers access air 

transportation from these other 

airports. Another effect is that 

local travelers become 

conditioned not to check fares at 

SHD – booking tickets directly from 

these other airports without ever 

looking at the local fare. The 

Airport must use this Grant 

opportunity to educate its 

catchment area to, at least, check local fares first.

FIGURE 6: Average One Way Fares at Top 25 O&D Markets,

2001 – 2010; Source: US DOT Table OD1A

$170

$160

$136

$195

$217

$184

$179

$188

$192

$240

$256

$236

$198

$209

$166

$168

$156

$146

$223

$185

$302

$174

$183

$254

$214

$0 $50 $100 $150 $200 $250 $300

Denver, CO

Chicago, IL

Boston, MA

New York/Newark, NY

Los Angeles, CA

San Francisco, CA

Orlando/Sanford, FL

Dallas/Fort Worth, TX

Kansas City, MO

Las Vegas, NV

Seattle/Tacoma, WA

Houston, TX

San Diego, CA

Phoenix/Mesa, AZ

Tampa, FL

Indianapolis, IN

Hartford, CT

Columbus, OH

Portland, OR

Cleveland, OH

Atlanta, GA

Washington, DC

San Antonio, TX

Detroit, MI

Sacramento, CA

SHD Average: $237
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 16

AIR SERVICE DEVELOPMENT EFFORTS

The Shenandoah Valley Regional Airport’s overarching air service development goal is to boost 

Airport performance to the level that an Essential Air Service subsidy is no longer required. As 

part of this goal, the Airport has spent more than $100,000 of its own funding marketing and 

advertising the service provided in the last two years. Additionally, the Airport works closely with 

an air service development consulting firm to identify new options for air service, and to work to 

build enplanements.

Air service development work began in earnest at Shenandoah Valley Regional Airport in 2003, 

as the Airport began working diligently to restore air service and passenger traffic to pre-2001 

levels. Since that time, the Airport has experienced numerous set-backs including US Airways’ 

elimination of the Pittsburgh hub in 2004, the use of the US Airways code on flights to Dulles, and 

a poorly timed schedule once the United code was put into place on Dulles flights. Since then, 

the Airport maximized local resources to help inform the community of the significant changes, 

and while substantive increases in passenger traffic 

have been achieved, the Airport still leaks the 

majority of its local passengers.

The Airport undertook a True Market Study in the 

fourth quarter of 2010 to gain a greater 

understanding of this leakage, so it could better 

focus marketing and advertising dollars on specific segments of the public still choosing to use 

other airports. The Airport is ready to put this data to work as it develops its 2011 – 2012 market 

plan, but it needs additional monetary support to give the marketing plan its greatest possible 

impact. Again, the ultimate goal is to recapture passengers that have been lost in the past 

several years and lessen the region’s dependence upon, or possibly eliminate the need for,

Essential Air Service funding. 

AIR SERVICE NEEDS AND DEFICIENCIES

“While substantive increases in 

passenger traffic have been 

achieved, the Airport still leaks the 

majority of its local passengers.”
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 17

AIR SERVICE NEEDS AND DEFICIENCIES

AIR SERVICE NEEDS AND DEFICIENCIES

As has been established in this proposal, the Shenandoah Valley Regional Airport leaks 91.7% of 

the passengers traveling to and from its catchment area to other airports in the region. Of the 

283 passengers per day each way who travel to and from the Shenandoah Valley, just 25.6 

passengers per day each way -- as of the year ended second quarter 2010 -- chose to use the 

Shenandoah Valley Regional Airport.

There appear to be two major reasons why passengers chose to use airports besides the one 

directly in the Shenandoah Valley. One: fares at SHD are not always competitive with those 

found at the other airports in the region. And two: passengers leak to other airports to get on 

nonstop flights to their 

destinations, rather 

than making a 

connection along the 

way.

The Airport’s True 

Market Study shows 

that the average fare 

paid by Shenandoah 

Valley catchment 

area passengers, at all 

airports they fly to and from, is $193 each way (see figure 7). This fare is $34 less each way than 

the Shenandoah Valley Regional Airport actual average of $227 each way – a savings of 18%.

The Airport’s study shows the average fare paid by catchment area passengers who flew in and 

out of the Shenandoah Valley Regional Airport, itself, was $227 each way as of the year ended 

second quarter 2010 (see figure 7). SHD catchment area passengers actually pay a little more 

to fly out of Washington Dulles instead of the Shenandoah Valley Regional Airport – an average 

of $242 each way. This can be explained by the fact that the average stage length on Dulles 

itineraries is much longer (over 1,500 miles) than the average stage length on Shenandoah 

Valley itineraries (less than 1,000 miles). It also illustrates the fact that Shenandoah Valley

travelers will sometimes drive to Dulles to access long haul non-stops, rather than to take a 

connecting flight originating at SHD.

FIGURE 7: Average One Way Fares Paid by SHD Catchment Passengers

YE2Q10; Source: Sixel Consulting Group True Market Study

$227

$242

$143

$166

$159

$141

$0 $50 $100 $150 $200

Shenandoah Valley

Washington Dulles

Richmond

Charlottesville

Baltimore

Washington National Regional Average: $193
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 18

It must also be noted that average fares paid by SHD catchment area passengers at the other 

major airports capturing SHD’s leakage are all significantly lower than the fares paid at SHD, 

itself. The Airport’s True Market Study shows SHD catchment area passengers pay 37% less –or 

$166 each way – at Charlottesville, 43% less –or $159 each way – at Baltimore, 59% less –or $143

each way – at Richmond, and 61% less –or $141 each way – at Washington-National (see figure 

7). It becomes much more difficult to keep passengers trained to check fares at their local 

airport when fares 50% and 60% less, on average, can be found within a three hours’ drive.

The airfare disparity can also be seen in many of the Shenandoah Valley’s top passenger 

markets when compared, specifically, to fares paid by catchment area passengers at 

Richmond and at Washington Dulles. In 15 of 20 of the largest passenger markets identified by 

the True Market Study, passengers paid the highest average fare at Shenandoah Valley (see 

figure 8). In some cases the fare disparities were in excess of $50 each way. A good example of 

this is Atlanta, where the 

average Shenandoah Valley 

one way fare was $282, while 

the average Washington Dulles 

fare was $135, and the average 

Richmond fare was $147 each 

way.

Because of higher average 

airfares, and limited knowledge 

of the availability of local air 

service, passengers are 

suppressed, and airlines rarely 

realize the true market potential 

of the Shenandoah Valley. The 

Airport, itself, saw 19.4 

passengers per day each way to 

and from its top 25 origin and 

destination markets in 2010. But 

the Airport’s leakage study 

shows the market, as a whole, generated 204 passengers per day each way to and from those 

$169 

$138 

$161 

$115 

$214 

$203 

$188 

$149 

$227 

$208 

$142 

$256 

$167 

$282 

$175 

$210 

$158 

$187 

$201 

$105 

$110 

$155 

$107 

$294 

$116 

$202 

$133 

$211 

$244 

$227 

$223 

$152 

$236 

$135 

$165 

$201 

$131 

$150 

$184 

$86 

$130 

$150 

$110 

$121 

$59 

$67 

$111 

$215 

$154 

$147 

$179 

$64 

$- $50 $100 $150 $200 $250 $300 $350 

Orlando, FL

Boston, MA

Chicago O'Hare, IL

Fort Lauderdale, FL

Seattle/Tacoma, WA

New York La Guardia, NY

Dallas/Fort Worth, TX

Tampa, FL

Los Angeles, CA

Denver, CO

Hartford, CT

Phoenix, AZ

Long Beach, CA

San Francisco, CA

Atlanta, GA

Indianapolis, IN

Las Vegas, NV

Columbus, OH

Cleveland, OH

Kansas City, MO

RIC

IAD

SHD

FIGURE 8: Average One Way Fares in Select Top Markets

YE2Q10; Source: Sixel Consulting Group True Market Study
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 19

markets as of the year ended second 

quarter 2010. The top “true” O&D 

market – Orlando – generated 44.2 

passengers per day each way, while 

only one Orlando passenger per day 

each way flew in/out of SHD (see 

figure 9). Other examples include 

Boston, which generates 26.6 “true” 

passengers per day each way; 

Chicago, which generates 15.5 “true” 

passengers per day each way; and 

New York/Newark, which generates 

8.5 “true” passengers per day each 

way.

Despite being the only carrier in the 

Shenandoah Valley market, United 

does a relatively poor job retaining 

local passengers. The Airport’s True 

Market Study shows 69% of local 

passengers travel on airlines other 

than United (see figure 10). 

United’s retention rate is just 31% -

even though United is the only 

carrier at SHD, itself, and United 

has a major hub at the number 

one airport for leaking 

passengers – Washington Dulles.

It appears passengers in the 

Shenandoah Valley tend to leak 

out of the market to get on 

other carriers besides United. At 

the same time, it appears there 

32,295

19,401

11,346

10,450

10,056

9,642

8,192

5,735

4,891

4,168

4,001

3,979

3,574

3,517

3,485

3,402

3,166

3,083

2,932

2,667

2,310

2,125

2,002

1,967

1,912

44.2

26.6

15.5

8.5

11.3

5.9

11.2

7.9

6.7

5.7

5.5

5.5

4.9

4.8

4.8

4.7

4.3

4.2

4.0

3.7

3.2

2.9

2.7

2.7

2.6

0 5,000 10,000 15,000 20,000 25,000 30,000

Orlando, FL

Boston, MA

Chicago, IL

New York/Newark

Fort Lauderdale/Miami, FL

Los Angeles Basin

Seattle/Tacoma, WA

Dallas/Fort Worth, TX

Tampa, FL

Denver, CO

Hartford, CT

Phoenix, AZ

San Francisco, CA

Atlanta, GA

Indianapolis, IN

Las Vegas, NV

Columbus, OH

Cleveland, OH

Kansas City, MO

Houston Intercontinental, TX

Nashville, TN

Dayton, OH

Jacksonville, FL

Wichita, KS

New Orleans, LA

PDEW

FIGURE 9: Top 25 “True” O&D Passenger Markets in SHD Catchment

YE2Q10; Source: Sixel Consulting Group True Market Study

United, 31.0% 

US Airways, 13.2% 

jetBlue, 12.7% 

Airtran, 9.9% 

Delta, 11.3% 

Southwest, 7.4% 

American, 5.9% 

Continental, 1.6% 

Virgin America, 0.6% 

Alaska, 0.5% 

FIGURE 10: “True” Carrier Passenger Share in SHD Catchment

YE2Q10; Source: Sixel Consulting Group True Market Study
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 20

is no “favored” airline for local passengers, with US 

Airways earning the number 2 market share with 13.2% of passengers and jetBlue taking the 

number 3 spot with 12.7% of SHD catchment area passengers (see figure 10). This gives the 

Airport confidence that a more widespread marketing and advertising campaign can pull 

passengers over to the United brand.

While some deficiencies are not easily cured – such as the airfare disparity between 

Shenandoah Valley Regional Airport and other airports in the region – a big challenge can be 

overcome through better local knowledge of the services available at SHD. It is clear that the 

limited marketing efforts of the Airport over the last three years have had a huge impact on 

building local passengers – up almost 140% since 2007. The Airport believes a more widespread 

marketing campaign can have an even bigger impact in retaining the hundreds of passengers 

per day that currently leak to other airports.
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 21

STRATEGIC PLAN

Proposed Marketing Program

STRATEGIC PLAN

The Airport seeks a Small Community Air Service Development Grant in order to assist it with a 

widespread marketing and advertising campaign in support of current Essential Air Service (EAS) 

provided by Colgan Air/United Express to Washington Dulles (see map 2). Through much smaller 

advertising spends than proposed in this application, Colgan has seen extremely strong monthover-month passenger growth in each and every month since the end of 2007 – with total 

passengers up nearly 140% in that time. The 

Airport believes a more widespread 

campaign, specifically targeted at passengers 

who are currently leaking to other airports in 

the region, will spur even more impressive 

passenger growth.

At the same time, the Airport would hope the 

increased enplanements from a marketing 

and advertising program would reduce the 

burden on the Essential Air Service (EAS) 

program to provide subsidies in the market. 

The long term goal under the program would 

be to increase enplanements to a level where 

the community’s Essential Air Service funding is no longer needed.

One of the main reasons for the continued passenger leakage from the Shenandoah Valley 

Regional Airport is the lack of local knowledge about available air service at SHD. Those who 

live in the Airport catchment area are not conditioned to check local fares first, before booking 

flights from other airports throughout Virginia. Local area travelers immediately book flights from 

Charlottesville, Roanoke and Richmond, 

without ever checking to see what the 

options are from Shenandoah Valley 

itself. This lack of general air service 

awareness is draining the local economy 

of valuable travel dollars, as travelers 

spend more than they would locally by 

FIGURE 11: Current Website

Banner Advertising

MAP 2: Current EAS Route

Shenandoah Valley – Washington Dulles
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 22

wasting time and gas driving to other airports.

This harmful trend sends 283 passengers per day each 

way to travel out of other airports in the region while 

there are empty seats flying in and out of the 

Shenandoah Valley Regional Airport. In effect, this 

leakage wastes valuable Essential Air Service (EAS) 

dollars. To counteract the trend the Airport plans a 

wide-ranging marketing campaign, saturating the 

entire Shenandoah Valley. The campaign will include 

frequent radio, television, billboard and newspaper 

advertising, along with giveaways. The Airport seeks 

$150,000 in federal funds, to be paired with $50,000 in 

local cash funds, which is above and beyond the 

current Airport marketing budget. The Airport realizes 

the importance of the effort, and has adjusted its 

budget accordingly to provide a 33% match to the 

federal funding it is requesting. The campaign is 

planned to last for at least 12 months, and possibly as long as 18 months depending on the inkind matching donations made by local media companies.

The Airport has already developed a 

comprehensive marketing and 

advertising placement plan, which will 

include large buys on local and regional 

radio stations, along with local and 

regional newspapers and magazines (see 

figures 11, 12, and 13). The campaign will 

be focused in the immediate 

Shenandoah Valley MSA however, it will 

also have limited ad placement in 

bordering counties. It will not include any 

placement in the immediate 

FIGURE 12: Current 

Print Advertising

FIGURE 13: Current 

Print Advertising
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 23

Medium Details Spots Cost

WHSV TV3 Online Flight Tracker 120

Promos

$2,117.64

Kline May Show Sponsorship 78 Spots $2,550.00

Daybreak News 6a – 7a 30 Spots $4,941.18

Comcast Cable CNN, Disc., ESPN, Fox News, TBS, 

TNT, Travel, USA, Weather Channel

714 

Spots

$5,148.00

Facebook Ads Target: Adults 30-64 within 25 miles 

of Harrisonburg/Staunton

Unlimited Avg.

$4,500.00

($.75 per 

click)

Google Ad 

Words

Keywords TBD Unlimited $1,500.00 

(Avg.)

Phone 

Directories

Misc. service areas $2,591.28

Tourism 

Publications

Local Maps, Guides, New Student 

Info, Etc.

$3,000 

(Approx.)

Total $26,348.10

Charlottesville and/or Richmond airport catchment areas.

Other types of marketing will include new website materials for ease of booking and better 

awareness of specific flight schedules (see figures 11, 12, and 13). The Airport also plans specific 

outreach to area businesses, through Airport-affiliated employees, to meet with those who travel 

most frequently and ensure they are aware of the benefit of using local air service.

The actual advertising will build upon the targeted campaigns that the Airport has been running 

for the last 18 months. These campaigns push local catchment area residents to check the fares 

at the local airport before

booking their flights, and to 

think about the time and 

expense of driving to other 

airports in the region to 

access air service (see figures 

11, 12, and 13).

The Airport has developed a 

specific quarterly plan for the 

advertising and marketing 

program that includes buys 

on local television stations, 

the local cable company 

(which will disseminate the 

ads across its spectrum of 

channels), Facebook and 

Google, along with local publications such as tourism magazines and phone books (see figure 

14). This plan does not include the cost of the creative development. Under this plan, the cost 

of the buys per quarter would be $26,000, with more than 1,000 television spots and unlimited 

internet hits.

Airport leaders believe the marketing and advertising campaign will dramatically increase 

awareness of the service offered at the Shenandoah Valley Regional Airport, thus increasing 

enplanements, and helping, in the long term, to lower fares in the market, making the Airport 

more competitive with other airports in the region. Moreover, the Airport believes the marketing 

FIGURE 14: Potential Quarterly Media Buys

Source: Shenandoah Valley Regional Airport, July 2011
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 24

and advertising campaign will have an impact in reducing the burden on the Essential Air 

Service program in the next bid cycle.
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 25

IMPLEMENTATION TIMELINE

The Airport’s proposed implementation timeline for the project assumes the Department will 

award Small Community Grant Funding in September 2011. Once the award is announced, the 

Shenandoah Valley Regional Airport will begin work with private marketing and advertising firms, 

along with Colgan Air and United Airlines, to build the campaign materials and to finalize the 

placement plan.

The first two milestones on the Airport's timeline are to execute the grant agreement with the 

Department and execute an agreement with a marketing and advertising firm to begin work. 

These milestones should be achieved by the end of October 2011. Additionally, the Airport will

submit grant status reports on a quarterly basis to the Department throughout the proposed term 

of the marketing and advertising program. The specific timeline is listed below.

Activity/Project Milestone Estimated Date

SCASD Grant Award Announcement Sepetmber 2011

Executive Grant Agreement with DOT October 2011

Executive Agreement with Marketing Firm In Place

Develop Creative Current

Develop Comprehensive Placement Strategy Current

Launch Campaign October 2011

Sustain Campaign October 2011 - October 2013

Monitor Route Performance October 2011 - October 2013

Submit Grant Status Reports to DOT Quarterly Q4 2011 - Q4 2013

Close Grant November 2013
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 26

PUBLIC/PRIVATE PARTNERSHIP

A number of local partners will be working with the Shenandoah Valley Regional Airport to 

promote and market the new service. Contacts will be made to all regional members of 

chambers of commerce and similar organizations, and those with an interest in growing the 

economic base of the community through local business growth, attraction of new businesses 

and the promotion of tourism and visitor traffic via the airport. 

Shenandoah Valley Partnership

The Shenandoah Valley Partnership acts as an information bridge between the Shenandoah 

Valley Regional Airport and the region’s businesses. The Partnership represents thousands of 

businesses in 16 counties across the Shenandoah Valley. As the lead marketing agency in the 

region, the Partnership is in a unique position to spread word about new air service in the market, 

and to promote its use. The Partnership is ready to use its resources to promote service to 

Washington Dulles.

Harrisonburg-Rockingham Chamber of Commerce

The Harrisonburg-Rockingham Chamber of Commerce works to promote the development of its 

region of the Shenandoah Valley market. As such, its leaders realize the importance of 

convenient air service at the Shenandoah Valley Regional Airport. The HarrisonburgRockingham Chamber is proud to partner with the Airport in advertising and marketing new 

service. Moreover, the Chamber continues to work closely with Airport leaders to ensure the 

success of air service in the market.

Greater Augusta Chamber of Commerce

The Greater Augusta Chamber of Commerce plans to partner with the Shenandoah Valley 

Regional Airport to help promote and market Washington Dulles service. The Chamber will 

communicate with all business and community members through e-mail, mailings, and events, 

the importance of supporting local air service at the Shenandoah Valley Regional Airport.
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 27

FUNDING PLAN

Marketing and Advertising

The Shenandoah Valley Regional Airport proposes to spend a total of $200,000 on marketing 

and advertising promotions in support of United Express service to Washington Dulles. This 

funding should be sufficient to blanket the market with the message that local service is more 

convenient than service provided at other airports in the region. The campaign will be 

developed so that it targets specific segments of the population who are most likely to stop 

flying from other airports in the region and start flying locally – based on data collected for the 

Airport’s 2010 True Market Study. For examples, see the “detailed explanation of the proposal” 

section of this application.

In-Kind Services

The following organizations will help promote the new service through their various membership 

groups. There is no estimated value to these services.

• Shenandoah Valley Regional Airport Commission

• Shenandoah Valley Partnership

• Harrisonburg-Rockingham Chamber of Commerce

• Greater Augusta Chamber of Commerce

Additional Costs

As part of this program, the Shenandoah Valley Regional Airport understands that additional 

expenses will be incurred, such as monitoring the results of the program and reporting those 

results back to the US DOT. The Airport will pay for these additional expenses out of other airport 

sources and will not incorporate these fees and charges into this proposal.
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 28

PERFORMANCE MEASURES AND FINANCIAL CONTROLS

The success of the program will be based on a pair of variables. The Airport will judge the first 

measure of success by the increased number of enplanements on United Express service to 

Washington Dulles. The second measure of success will be based on how much average 

airfares charged in the community have gone down, with the increase in enplanements. The 

measurement of enplanements will include a monthly comparison, once the program begins, to 

past enplanements numbers. The measurement of airfares will be derived from US DOT OD1A 

reports.

As the sponsor, the Shenandoah Valley Regional Airport will be the responsible party for all fiscal 

matters and DOT reporting requirements. The group is established as an Airport Authority, which 

is a public governing body. As a public entity the DOT can be assured that proper financial 

controls are in place to guarantee that the DOT’s grant will be used in accordance with any 

subsequent agreement. The Airport understands that the grant is a reimbursable grant, meaning 

the Airport is responsible for program expenditures and will submit invoices to the DOT for 

reimbursement, based on a percentage of the total grant request.

The Shenandoah Valley Regional Airport has developed this proposal as a one-time grant. The 

advertising and marketing program will commence as soon as this grant is awarded and last for 

at least twelve months. It is projected that local enplanements will grow within the first few 

months of the launch of the advertising program.
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 29

LEGAL SPONSOR

The Shenandoah Valley Regional Airport is the legal sponsor responsible for administering the 

program. The Shenandoah Valley Regional Airport is a government entity.

Shenandoah Valley Regional Airport 

77 Aviation Circle

Weyer’s Cave, Virginia 24486

Greg Campbell, Airport Director

540.234.8304

gcampbell@flyshd.com
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 30

LETTERS OF SUPPORT
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Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 42

AVAILABILITY OF ALTERNATE AIRPORTS

The Shenandoah Valley Regional Airport serves the geographically isolated Shenandoah Valley, 

which is surrounded on all sides by mountains in the Appalachian Range. As such, the region is 

not well served by alternate airports, even though there are a number of airports nearby. The 

closest alternate airport is Charlottesville, which lies 58 miles away, a drive of an hour and 15 

minutes (see figure 15). Access to Charlottesville is more difficult than it would appear due to 

steep topography and the lack of

interstate access.

The largest proportion of 

Shenandoah Valley travelers flying 

from other airports in the region 

use Washington Dulles, which is

132 miles to the northeast of the 

area (see figure 15). The drive 

from the Shenandoah Valley to 

Dulles takes more than two hours 

and 30 minutes.

Other alternates include 

Richmond, Roanoke, and 

Washington Reagan National, but 

none of these airports is close 

enough to the Shenandoah Valley 

to offer true air service access.

FIGURE 15: Airports in the Same Region as

Shenandoah Valley Regional Airport
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 43

AIRPORT INFORMATION

The Shenandoah Valley Regional Airport is located in Weyer’s Cave, Virginia, a short drive for 

residents of three major regional cities and a number of smaller towns. The Airport was placed in 

its current location as a gateway to the region, instead of a portal to just one city and, as such, it 

draws passengers from a large swath of the Shenandoah Valley region. Convenient to 

Harrisonburg, Waynesboro and Staunton, as well as Augusta and 

Rockingham counties in Virginia, and Interstates 81 and 64, the 

Shenandoah Valley Regional Airport serves thousands of passengers each 

year for both business and pleasure.

SHD is constantly working to improve not only their facilities, but the 

services they offer to those who use them. Their goal is to make travel 

affordable and convenient.

While the Airport currently has just one commercial carrier, it averages more than 71 operations 

a day, or more than 26,000 operations per year, making it one of the busier one runway airports 

in Virginia. That one runway is just over 6,000 feet long, 

with an ILS (instrument landing system) approach on one 

end (see figure 16). The runway can handle virtually any 

regional aircraft in virtually any weather conditions.

The Airport has a modern terminal, with plenty of room for 

additional passengers. The incumbent airline, Colgan, is 

the only tenant at the ticket counter, with plenty of 

space. The terminal is designed to handle additional 

airlines and additional passengers.

FIGURE 16: Aerial Photo, Shenandoah Valley

Regional Airport, 2010
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 44

COMMUNITY PROFILE

The Shenandoah Valley of western Virginia and eastern West Virginia is nestled between the Blue 

Ridge Mountains to the east and the Appalachian Mountains to the west and is a part of the 

Great Appalachian Valley that runs though Virginia and North Carolina. The Valley is home to 

the large cities of Staunton, Harrisonburg and Waynesboro. It encompasses seven counties in 

Virginia and two in West Virginia.

The Valley has grown beyond its transitory and agricultural roots to 

become the economic and tourist center of the northern 

Appalachian Mountains. The Valley is home to a number of major 

resorts including the world renowned Homestead, which is a 

nationally recognized golf and ski resort. The region is also home 

to a number of cultural attractions, as it is situated just 153 miles 

from the Nation’s capital. The Valley is the birthplace of the Blue 

Ridge Parkway – arguably the most famous drive in the eastern US – winding through the 

majestic Blue Ridge Mountains.

“Tourism services” is the largest sector of employment in the Shenandoah Valley, with more than 

41,000 people working in the field. The region also has major investment in food processing, with 

worldwide companies such as Coors, Hershey, Perdue, Tyson and Pilgrim’s Pride operating large 

processing facilities in the region.

The Shenandoah Valley economy has grown more diversified, 

and more high-tech in the last decade, with Merck operating a 

large pharmaceutical plant and Wayn-Tex opening a major 

operation developing new age plastics and resins. With new 

economic development, per capita personal income in the 

Shenandoah Valley is at an all-time high, keeping pace with the 

major urban areas of the mid-Atlantic region, at $32,229, according to statistics from the Virginia 

Economic Development Partnership.

The Valley is home to no fewer than 15 colleges and universities, including such well known 

schools as the University of Virginia, Virginia Military Institute, James Madison University, and 
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 45

Liberty University. Together, these schools enroll more than 75,000 full-time students within a twohour drive of the Shenandoah Valley Regional Airport.

What’s New in the Shenandoah Valley

The Shenandoah Valley Regional Airport continues to work to grow non-airline business and to 

diversify is base of tenants. Most recently, the Airport landed Dynamic Aviation as a tenant. 

Dynamic wet leases a fleet of MD80 aircraft to various operators throughout the US and around 

the world. It will employ as many as 400 people on the field in coming years (see figure 17).

Shenandoah Valley Regional Airport and Dynamic Aviation 

Announce Agreement for Future Development

The Shenandoah Valley Regional Airport Commission announced that Dynamic Aviation of Bridgewater, 

Va. has agreed to a long-term ground lease agreement with the Airport Commission for future Corporate 

Hangar construction at Shenandoah Valley Regional Airport.

Dynamic Aviation through its affiliate, Shenandoah Hangar, LLC., has agreed to a ground lease in the 

Airport’s North Corporate Hangar Development Area for potentially the next 40 years. This will allow 

Dynamic Aviation the opportunity to construct Hangar space to support their growing flight operations.

Dynamic Aviation Group, Inc. is a leading supplier of aerial platforms throughout the world. The company 

was founded in 1967 and has enjoyed continued growth and diversification in their business since that

time. They are headquartered in Bridgewater, Virginia and now employ approximately 400 aviation 

professionals. According to Michael Stoltzfus, President and Chief Executive Officer of Dynamic Aviation, 

"We are excited about the growth opportunities this agreement provides. The Shenandoah Valley 

Regional Airport provides the necessary infrastructure, facilities and all weather capabilities that will be 

required to support a portion of our growing operation in the years to come. We look forward to growing 

our business in the Shenandoah Valley."

Gerald Garber, Chairman of the Shenandoah Valley Regional Airport Commission commented, "We are 

extremely pleased that Dynamic Aviation has decided that Shenandoah Valley Regional Airport will be a 

part of their continued growth. We look forward to partnering with Dynamic Aviation to meet their future 

aviation needs here in the Valley."

FIGURE 17: Dynamic Aviation Announcement

Source: Shenandoah Valley Regional Airport
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 46

The Interstate 81 corridor is now known as the “Education and Technology Corridor” 

Universities in the Corridor are currently working on 

a number of new research projects, with more 

than $100 million in grants and start-up capital. 

The projects range from the pharmaceutical field 

to improving the internet and preventing terrorist 

attacks.

• James Madison University received $25 

million in external funding to improve laboratory 

facilities with new high-tech research instruments. 

The money came from various sources, including 

the federal and State government, private 

industry, and foundations.

• The Shenandoah Valley Technology 

Council is working with James Madison University on a full-scale study of broadband 

internet access and connectivity. The study will likely lead to major changes in the 

availability of broadband in the State, connecting many more residents to reliable 

internet access.

• Researchers at James Madison University are developing new strategies to protect the 

nation’s high-tech infrastructure from acts of terrorism. The University is one of the few in 

the US named as a “center for excellence” by the National Security Agency.

• The Shenandoah Valley is a center for biofuels, as both James Madison University and the 

City of Harrisonburg were noted for their outstanding research and development of an 

alternative fuel refinery in the region.
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 47

Shenandoah Valley Economic Overview

The Shenandoah Valley has long been a center for trade, transportation and agriculture. The 

region’s good growing climate and easy access has made it a center for processing facilities 

producing everything from chocolate to chicken. These facilities form a strong, stable 

economic base. But today, the economy of the region has 

grown and diversified from its roots.

More people in the Shenandoah Valley work in sales and 

office support jobs than in any other occupation (see figure 

18). Managerial and administrative jobs also make up a 

large portion of current employment by occupation in the 

Valley. Altogether, 50.1% of job in the region are considered 

“white collar” – business services and administrative positions with very high relative pay. This is 

the reason why the Shenandoah Valley’s per capita income tops $32,229 annually.

The Shenandoah Valley’s high quality of life has drawn many major companies to locate 

facilities in the area (see figures 19 and 20). The Valley is currently home to five Fortune 1000 

companies. These companies employ more than 10,000 people in the Shenandoah Valley 

Regional Airport’s catchment area – many in highly mobile sales and administrative positions.

FIGURE 18: Employment by Occupation, 

Shenandoah Valley
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 48

Firm Rank Revenues

Target 28 $64.9 Billion

Tyson Foods 89 $28.1 Billion

Merck 103 $23.9 Billion

Pilgrim’s Pride 304 $ 8.5 Billion

j py 

Company Product/Service Estimated Employment

James Madison University Higher education 2,500 - 4,999

Augusta Medical Center Health care 1,500 - 2,499

Pilgrim's Pride Corporation Poultry processing 1,500 - 2,499

Rockingham Memorial Hospital Health care 1,500 - 2,499

McKee Foods Corporation Snack cakes 1,000 - 1,499

Merck & Company Inc. Pharmaceuticals 1,000 - 1,499

R. R. Donnelley & Sons Company Book printing 1,000 - 1,499

Target Distribution center 1,000 - 1,499

Hershey Chocolate of Virginia Inc. Confectionery products 600 - 999

INVISTA Textiles 600 - 999

Marshalls Retail distribution 600 - 999

Perdue Farms, Inc. Poultry processing 600 - 999

Tenneco Automotive Inc. Motor vehicle parts 600 - 999

Alcoa Building Products Inc. Vinyl siding 300 - 599

American Safety Razor Company, Inc. Shaving blades and systems 300 - 599

Banta Corporation Book publishing & printing 300 - 599

Coors Brewing Company Malt beverages 300 - 599

Graham Packaging Co. Plastic bottles 300 - 599

Intrapac, Inc. Aluminum products 300 - 599

Nibco Incorporated Copper fittings 300 - 599

Wayn-Tex, Incorporated Plastic material and resins 300 - 599

Mary Baldwin College Higher education 300 - 599

Tyson Foods, Inc. Poultry processing 300 - 599

FIGURE 19: Top Employers in the Shenandoah Valley

Source: Virginia Economic Development Partnership, 2011

FIGURE 20: Fortune 1000 Companies in the Shenandoah Valley

Source: Fortune Magazine, 2010
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 49

Select Company Profiles

Merck Pharmaceuticals

Established in 1891, Merck is one of the country’s oldest pharmaceutical firms, producing a 

number of drugs used to treat hundreds of ailments. Merck is also one of the world’s largest 

companies, employing more than 50,000 people worldwide. With markets in 100 countries, 

Merck is based in New Jersey. Its Shenandoah Valley operation draws upon the research and 

development of a number of area colleges and universities to develop new medical solutions.

INVISTA

INVISTA is a pioneering firm in the manufacturing of synthetic fibers and 

polymers. INVISTA’s best known brand is Lycra, the stretchy material used in a number of 

clothing applications. INVISTA is one of the Shenandoah Valley’s largest employers, with a major 

research and manufacturing facility in Waynesboro. The company is based in Wichita, Kansas.

Target Stores

Based in Minneapolis, Target is one of the world’s largest and most 

recognized retailers. With annual sales topping $59 billion, Target is 

listed as the 33rd largest company in the US. Target operates its largest east coast distribution 

center in the Shenandoah Valley, sending products to all of its stores in the northeastern and 

mid-Atlantic corridors.

Pilgrim’s Pride

The largest poultry producer in the US, Pilgrim’s Pride has operated farms in the 

Shenandoah Valley for more than 60 years. The company has 54,000 worldwide employees, 

with major farms and processing facilities in Alabama, Arkansas, Florida, Georgia, Kentucky, 

North and South Carolina, Iowa, and Tennessee. The company is based in Texas. The company 

exports chicken products to more than 80 countries.

Coors Brewing Company

A subsidiary of Molson-Coors, Coors Brewing Company is the second 

largest brewer in the US, and one of the oldest – as the company was founded in 1873. The 

company has two major brewing facilities in the country – in Golden, Colorado, and in the 

Shenandoah Valley of Virginia. Coors produces products that are sold in all US states, along with 

Canada, Mexico, and the Caribbean.
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 50

Shenandoah Valley Tourism

In recent years, the Valley’s economy has also grown to accommodate the tourist trade. 

“Shenandoah” is a well known destination around the country. The Valley’s beautiful mountain 

setting draws more than two million annual visitors. The region offers outdoor activities for all 

seasons, with many ski resorts and golf resorts. Moreover, the Valley is located in the cultural 

heartland of the country, as many of the nation’s founders lived and worked in 

the region. Today their homes, businesses, and communities draw tens of 

thousands of tourists seeking historical pursuits. In 2008 the Shenandoah Valley 

saw total travel expenditures of nearly $800 million.

The Shenandoah Valley stretches for nearly 200 miles, along the Shenandoah 

River, between the Blue Ridge and Allegheny Mountains – both ranges in the Appalachian 

chain. Nicknamed “the big valley,” Shenandoah has been immortalized in a number of films, 

songs, and television shows. The Valley was first settled by Europeans in the mid-1700s. It has 

some of the oldest and most significant historical sites in the country, many of which relate to the 

founding of the United States, and its early leaders. During the Civil War the Shenandoah Valley 

was nicknamed the “breadbasket of the Confederacy” due to the wide swaths of agricultural 

lands and the fertile soil that grew crops to help feed Confederate soldiers. Later, the Valley was 

home to President Woodrow Wilson – whose family has established a 

library and museum in the Valley today.

The Shenandoah Valley features picture-postcard farms and inns 

along country roads and the popular Skyline Drive and Blue Ridge 

Parkway, probably the most beautiful parkway in the nation. One of 

the natural wonders of this world is the 100-million-year-old Natural 

Bridge. The region also has many caverns, which include Shenandoah Caves, with an elevator 

to take you underground. The region is home to dozens of hiking trails, paddle sports, and 

horseback riding in the Blue Ridge Mountains. Moreover, there are a number of popular resorts 

in the Shenandoah Valley, including Bryce, the Homestead and Massanutten.
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 51

Shenandoah National Park

Appropriately, the Shenandoah Valley Regional Airport is the gateway 

to Shenandoah National Park, which draws more than 1.2 million visitors 

to the region per year. The Park is located along the crest of the Blue 

Ridge Mountains, with hiking trails that lace the hillsides. The Park also 

has the largest wilderness area on the east coast – 40% of its area is 

designated as wilderness that cannot be developed.

Blue Ridge Parkway

The famed Blue Ridge Parkway runs along the ridge of the 

Blue Ridge Mountains from Shenandoah National Park all the 

way to the Great Smoky Mountains National Park in North 

Carolina and Tennessee. The Parkway hosts more than three 

million vehicle trips per year. The Parkway runs a total of 469 

miles, with the Shenandoah Valley Regional Airport located at 

its north end – the perfect gateway for a drive from north to 

south.

The Homestead Resort

“The Homestead,” as its known locally, is Virginia’s most well-known and 

spectacular mountain resort. The Homestead features a huge, red brick 

resort hotel, with hundreds of rooms and a number of restaurants. But the 

real attraction is what lies outside. The Homestead features three 

championship golf courses, equestrian facilities, a fly fishing school, a 

European-style spa, skiing, snowboarding, ice skating, and a conference 

center. The Homestead has long been considered one of the world’s 

finest getaways.

Natural Bridge

Considered one of the seven natural wonders of the world, the Shenandoah 

Valley’s Natural Bridge is a 215 foot tall and 90 foot wide rock formation that 

created a bridge over a valley in the Appalachian Mountains. The Bridge 

has been visited by historical figures such as Thomas Jefferson and George 

Washington – it is initialed by both. Today, the Bridge draws more than a million annual visitors.
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Shenandoah Caves

Located in the heart of the Valley, the Shenandoah Caves are 

considered the most spectacular on the East Coast. But the real 

attraction is the fact that the Caves are the only ones in the East that 

have an elevator descending into the depths, instead of a long hike, 

making them the most accessible caves in the US.

New Market Battlefield

The 300 acre New Market Battlefield marks the site, near Virginia Military Institute (VMI), where 

VMI cadets joined the fight, helping to defeat the North in a pivotal battle. Today, the 

battlefield is also home to the Hall of Valor Civil War Museum. The site is often the first visited on 

the Civil War trip from Virginia through Maryland and Pennsylvania.

Higher Education in the Shenandoah Valley

The Shenandoah Valley is home to one of the largest and most prestigious collections of 

colleges and universities in the world. There are no fewer than 15 universities, colleges, and 

community colleges in, and immediately surrounding, the Valley. Together, these institutions 

enroll almost 100,000 full-time students (see figure 21), and employ more than 20,000 highly skilled 

and educated full-time faculty members. The institutions of higher learning in the Shenandoah 

Valley are among the most highly respected in the world, truly training the leaders of tomorrow.
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James Madison University

Long considered one of the finest public research universities in the 

country, James Madison University (JMU) provides research in emerging 

fields that helps fuel the economy of the Shenandoah Valley. Located in 

Harrisonburg, JMU provides more than 100 courses of studies in science and liberal arts fields. 

The school launched its School of Engineering in 2007. Kiplinger’s Magazine ranks JMU the 21st

best buy in higher education in the US.

Virginia Military Institute

Also located in Lexington, Virginia Military Institute is best known as “VMI.” It is the 

oldest military college in the US, founded in 1839. VMI cadets going through a 

strenuous selection process before admission, and the Institute draws the best 

students from the top of their classes around the country. VMI is considered the 

“West Point of the South,” as it served that purpose during the Civil War.

Liberty University

Located in Lynchburg, Virginia, Liberty University is the largest institution of 

higher education in the Shenandoah Valley. The University is a Baptist 

college, modeled after the theological education offered at Notre Dame 

and Brigham Young. Liberty’s current chancellor is Rev. Jerry Falwell. Liberty offers 71 programs 

of study for undergraduates, and 36 programs from graduate students.

James Madison University Public 18,454 4-year or above 

Mary Baldwin College Private 1,738 4-year or above 

Bridgewater College Private 1,514 4-year or above 

Eastern Mennonite University Private 1,387 4-year or above 

Blue Ridge Community College Public 4,466 2-year 

Piedmont Virginia Community College Public 4,874 2-year 

Total 32,433

FIGURE 21: The Shenandoah Valley’s Higher Education Facilities

Source: Virginia Economic Development, 2011
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 54

Mary Baldwin College

Founded in 1842, Mary Baldwin College has long been one of the nation’s 

premier women’s liberal arts institutions. US News and World Report ranks the 

College as a top tier master’s level university. Today, the highly-selective school enrolls more 

than 2,000 full-time students from all 50 states and around the world.

Washington and Lee University

Located in Lexington, Virginia, Washington and Lee University was founded in 

1749, making it one of the oldest private universities in the US. The University is 

currently ranked as one of the top 15 private liberal arts universities in the country 

by US News and World Report. As a highly selective institution, the University enrolls some of the 

best and brightest students from around the country, and around the world.
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COMPARISON TO OTHER REGIONAL COMMUNITIES

FIGURE 22: Statistical Summary of Eastern Region Airports

Calendar Year 2010, Source: US DOT Table OD1A
Shenandoah Valley Regional Airport • Small Community Air Service Development Grant Proposal • August 2, 2011 56

CONCLUSIONS

The Shenandoah Valley Regional Airport has the highest average fare of all airports in the midAtlantic region at $237 each way in 2010. The Airport leaks more than 90% of its catchment area 

passengers to other airports in the region. Yet despite the bad news, the Airport’s $100,000 

marketing plan over the last several years has caused local passengers to increase by 140%, 

proving that local air service marketing can work.

As a smaller, Essential Air Service airport, the Shenandoah Valley Regional Airport does not have 

the resources to build a widespread “blanket” marketing campaign. But the Airport has had 

success in its targeted campaigns. With more funding to better spread the message, the Airport 

anticipates it can grow passengers up to levels 

seen last in 2001 – roughly double the number of 

passengers currently using the facility

The Airport has a sound strategy in place for its 

federally supported advertising campaign. 

Much of the creative work has already been 

completed. Additionally, the Airport has 

developed a potential quarterly purchase plan which includes more than 1,000 television spots 

and unlimited internet exposure. The plan only needs federal funding to move forward.

The Airport believes this marketing blitz will reduce leakage to other airports. Then, as passenger 

traffic grows in the market, through the increased marketing and advertising proposed in this 

application, revenues will grow, and the federal subsidy required to support Essential Air Service 

(EAS) in the Shenandoah Valley will be reduced. The Department of Transportation can invest a 

small amount in this grant proposal, that could help save it millions of dollars in EAS funding in the 

years to come.

“The Airport has a sound strategy 

in place for its federally supported 

advertising campaign. The plan 

only needs federal funding to 

move forward.”