# Proposal under the Small Community Air

Service Development Program

Docket DOT

- OST

- 2010

- 0124

Charles M. Schulz

- Sonoma County Airport

Sponsor: County of Sonoma

Charles M. Schulz

– Sonoma County Airport

DUNS Number: 080126 444

Congressional District Code: CA

- 006

Contact: Mr. Jon Stout, CAE, AAE

Airport Manager

Charles M. Schulz

– Sonoma County Airport

2290 Airport Boulevard

Santa Rosa, CA 95403

(707) 565

- 7243

(707) 542

- 5303 Fax

jstout@sonomacountyairport.org

Due Date: August 27, 2010Small Community Air Service Development Program Page I

Charles M . Schulz

– Sonoma County Airport Proposal A PPENDIX B

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET OST

- 2009

- 0149

SUMMARY INFORMATION

All applicants must submit this information with their prop osal, along with a completed form SF

424 on http://www.grants.gov

A. APPLICANT INFORMATION: (CHECK ALL THAT APPLY)

Not a Consortium Interstate Consortium Intrastate Consortium

Community now receives EAS subsidy

Community previously received a Small Community Grant in 2004. Grant was

extended in 2007 and expired on March 31, 2008.

B. PUBLIC/PRIVATE PARTNERSHIP

Public: Private:

1. County of Sonoma 1. Horizon Air

2. Sonoma County Airport 2. Mendocino County Lodging Assn.

3. Sonoma County Tourism Bureau 3. Sonoma County Hotel Assn.

4. Santa Rosa Visitors & Convention Bureau 4. Hertz, Avis , Enterprise Rental Cars

5. Santa Rosa Chamber of Commerce 5. Pure Luxury Limo Service

6. Windsor Chamber of Commerce 6. Travel Center Services

C. PROJECT PROPOSAL

Project Proposal: (Che ck All That Apply)

X Marketing Upgrade Aircraft New Route

Personnel Increase Frequency Low Fare Service

Travel Bank Service Restoration

___ Subsidy

___ Surface Trans. Region al Service

_ X

_ Other (Specify)

-

Revenue Guarantee Launch New Carrier Increase Passengers on

___ Start Up Cost Offset First Competitive Service existing service

Study Secure Additional Carrier X

XSmall Community Air Service Development Program Page II

Charles M. Schulz

– Sonoma County Airport Proposal D. EXI STING LANDING AIDS AT LOCAL AIRPORT:

X Full ILS X Outer/Middle Marker X Published Instrument Approach

X Localizer Other (Specify) _____________

E. PROJECT COST:

1. Federal Amount Requested: $15 0,000

2. State cas h financial contribution 0

3. Local Cash Financial Contribution:

3a. Airport cash funds: 2 5 ,000

3b. Non

- Airport cash funds: 2 5,000

3c

. To tal local cash funds: 5 0 ,000

4. TOTAL CASH FUNDIN G $2 00 ,000

5. Local funds contribute d from already existing 2 5 ,000

Programs or projects included in line 3c

6. Local funds contributed from new commitments 2 5,000

or new resources included in line 3c.

7. Airport In

- kind contribution:

7a. Landing fe es

7b. Advertising Production

8. Other In

- kind contribution:

8a. Advertising 10 0 ,000

9. TO TAL IN

- KIND CONTRIBUTION $ 10 0 ,000

10. TOTAL PROJECT COST $ 30 0 ,000

F. ENPLANEMENTS:

2000 33,199 2005 ___ __ 0

2001 24,459 * 2006 ___ __ 0

2002 ______ 2007 54,654 **

2003 0 2008 _ 100,784

2004 _____ 0 2009 93,027

* United Express left the market October 31, 2001.

** Horizon Air started new service on March 22, 2007

.Small Community Air Service Development Program Page III

Charles M. Schulz

– Sonoma County Airport Proposal G. IS THIS APPLICATION SUBJECT TO REVIEW BY STATE UNDER EXECUTIVE ORDER

PROCESS?

a. This application was made available to the State under Executive Order 12372

Process for review on _______________.

b. Program is sub

ject to E.O. 12372, but has not been selected by the State for review.

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

.

H. IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT?

No Yes (explain) _________________________ x

xSmall Community Air Service Development Program TOC i

Charles M. Schulz

– Sonoma County Airport Proposal 

### Table of Contents

Summary of Community Proposal

Previous Grant 1

New Proposal for a Grant 2

Our Community Team 3

Sonoma County Airport Market Area 3

Our Airport 5

Plan is Consiste nt with DOT Priorities 6

Air Service Background

Air Service History 6

United Express 7

American Eagle 7

Reno Air 7

Horizon Air 7

Current Air Service 8

Comparison to Similar Markets 9

Local Market Demand 9

Passenger Originations 10

Action Plan

The Product 12

Promotion 12

Media Selection 13

Advertising Budget 14

Sales Promotions 15

Public Relations 15

Total Program Cost 15

Pricing 15

Distribution 16

Economic Impact 16

Performance Measurement and Schedule

Performance Measurement 17

Grant Schedule 17

Community Support 18

Assurances 19

Horizon Air Letter of Support 20

Additional Letters of Support 21Small Community Air Service Development Program Page 1

Charles M . Schulz

– Sonoma County Airport Proposal 

### PROPOSAL OF SONOMA COUNTY AND SONOMA COUNTY AIRPORT

Summary of Proposal

The County of Sonoma and the Charles M. Schulz

- Sonoma County Airport (STS) are seeking a

grant to develop a marketing program to increase the amount of inboun d passengers to Sonoma

County Airport and Sonoma County. We are requesting a grant of $15 0,000, with a local cash

contribution of $ 50 ,000

, an in kind contribution of $ 10 0 ,000 for a t otal package of $ 30 0 ,000

. With the receipt of the Small Community Air Se rvice Development grant funds, we will have

sufficient resources to provide a strong marketing program in Los Angeles, Seattle and Portland

to generate more inbound passengers.

Even though, Horizon Air provide s five flights per day at Sonoma County Airpor t with 76 seat

Q

- 400 aircraft, the amount of inbound passengers is falling short of what this service should be

providing. Sonoma County and Napa County (the Wine Country) are famous tourism markets

with over 13 million visitors per year and the air servi ce should be bringing more tourist s to this

market. We have reviewed Horizon Air passengers and bookings data for the past two years and

find that approximately 5 6. 5% of the passengers are originating in the Sonoma County Airport

market area. This is opp osite to what we see in other tourism destinations and we believe that

this is due to inadequate marketing and advertising by the air carrier in Los Angeles, Seattle, and

Portland.

The economic recession has impacted the tourism market in the Sonoma Count y market and

Horizon Air has seats available on flights from all four markets that it serves . The Sonoma

County p arties see these empty seats as an opportunity for more tourist and tourism dollars

coming to our market. Studies have shown that people are traveling

, but to destinations that are

closer to their homes. The Wine Country in Sonoma County and Napa County is a perfe ct

destination for the West Coast traveler.

Sonoma County Airport has created a public and private marketing partnership to attack this

problem and create a stronger marketing presence in the major metrop olitan markets. This

partnership includes the Sonoma County Airport, the Sonoma County Tourism Bureau, the

Mendocino Lodging Association , the Santa Rosa Chamber of Commerce, the Wind sor Chamber

of Commerce, Santa Rosa Visitors and Convention Bureau, Airport Express, Sonoma County

Hotel Association, Hertz, Avis, Budget, Enterprise, Pure Luxury Limousine , Travel Center

Services, and Horizon Air. In order to effectively market and adver tise in the metropolitan

markets of Los Angeles, Seattle, and Portland, the Sonoma County p arties will need more money

than they have available and are requesting a new grant to fulfill this need.

Previous Grant

The Sonoma County Community and the Sonoma County Airport received a grant under the

Small Community Air Service Development program in 2004. The grant was for $635,000 and

was intended to support new air service between Sonoma County Airport and Los Angeles

International Airport with revenue gua rantees and marketing assistance . The Sonoma County

Airport had been without any scheduled passenger air service since October of 2001 and theSmall Community Air Service Development Program Page 2

Charles M. Schulz

– Sonoma County Airp ort Proposal Small Community grant allowed the Community and the Airport to develop a strong incentive

package to attract new air service. The Community and the Airport made a local contribution of

$987,879 in cash, in kind, and pre

- purchased tickets.

After spending two years of m arket development and recruitment , the Community and the

Airport w ere able to get a commitment fro m Horizon Air to provide nonstop service. The

market development included the hiring of two consulting firms to develop air traffic studies to

define the passenger market and to develop a marketing plan to support new air service.

On March 22, 2007, Ho rizon Air launched service to Los Angeles International Airport with

Dash 8 Q

- 400 aircraft operating two flights per day. Horizon Air also started service to Seattle

International Airport with one daily flight even though this flight was not covered under the

revenue guarantee program of the grant. During the first six months of service, Horizon Air

averaged an 81% load factor at Sonoma County Airport to Los Angeles and Seattle. In fact, the

service was so successful, the airline added a third flight to Los Angeles and new service to

Portland at the end of October 2007 . In April 2008, Horizon Air started evening service between

Sonoma County and Las Vegas.

New Grant Proposal

During this economi c recession, the Sonoma County C ommunity is seeking additio nal sources of

revenue to support the local economy . T ourism has been identified as the number one

opportunity for an instant source of revenue for the local economy

. Even though Horizon Air

provides nonstop service to Los Angeles, Seattle, Portland and L as Vegas with five flights per

day, the airline had approximately 76,000 empty seats in 2009. It has been estimated that the

new marketing program will attract 24,000 new inbound visitors booking an estimated 44,4 00

room nights and producing an estimated $ 11 million in new visitor expenditures in the local

market. This would be a very strong economic stimulus for the local community.

Since Horizon Air is part of Alaska Air Group, the airline does not do advertising for its own

brand in the large metro ma rkets . Any advertising in major media markets for Horizon Air is

included in Alask a Airlines advertising. This has not been very effective in attracting inbound

travelers to Sonoma County Airport and the Wine Country. To attract these new inbound

visito rs, the Sonoma County partners know that they will need to do the marketing and

advertising in Los Angeles, Seattle, and Portland. This is an expensive proposition and one that

cannot be developed without outside financial help. The Small Community Air S ervice

Development Program is ideal for this mission.

The Sonoma County parties have developed a strong marketing campaign utilizing print

advertising in newspaper and magazine, radio advertising, radio promotions, public relations,

and direct sales sup port. T his campaign can star t in March of 2011 and run for 3 months a nd

then start ag ain in late August and run for 3 additional months. The cost of this marketing

campaign is estimated at $ 300,000 with the DOT providing $ 150,000 under the grant program

and the local community providing $ 150,000 in cash and barter. This should provide for an

effective program.Small Community Air Service Development Program Page 3

Charles M. Schulz

– Sonoma County Airp ort Proposal Our Community Team

The Sonoma County Board of Supervisors created an Airline Attraction and Marketing

Committee to help develop airline service at our Airport. The committee is a true public

– private

partnership. It includes business leaders, Chamber of Commerce representatives, higher

education institutions, community groups, and constituents at large. It was very effective in

recruiting the ai r service by Horizon Air and developing a marketing program to support the new

air service.

The Sonoma County Airport is going into action again! The Sonoma County Airport will

sponsor this project and team up with various travel related groups in the region that include: the

Sonoma County Tourism Bureau, the Mendocino Lodging Association, the Santa Rosa Chamber

of Commerce, the Windsor Chamber of Commerce, Santa Rosa Visitors and Convention Bureau,

Airport Express, Sonoma County Hotel Association, Her tz, Avis, Enterprise, Pure Luxury

Limou s ine , Travel Center Services, and Horizon Air. This group will be joined by some

experienced marketing professionals who will develop and manage the marketing program to

attract more inbound visitors to the Wine Coun try.

The Sonoma County Airport Market Area

The Sonoma County Community is a growing, diverse area that needs and depends upon airline

service to connect its populace to the nation’s air transportation system and to assist others who

serve and visit the a rea from throughout the United States and abroad. When Sonoma County

submitted a proposal for a grant in 2004, the Sonoma County Airport area was one of the largest

market areas in the United States without commercial passenger air service. The Sonoma

Cou nty Airport primary market area includes the counties of Sonoma, Napa, Marin, Mendocino,

and Lake.

SONOMA COUNTY AIRPORT CATCHMENT AREASmall Community Air Service Development Program Page 4

Charles M. Schulz

– Sonoma County Airp ort Proposal The Sonoma County Airport market catchment area has a population of approximately 1,021,430

with 392,600 households. Total retail sales for the Airport market area are $18.9 billion or

approximately $48,159 per household. The effective buying income for the Airport market area

is over $28.7 billion or $73,228 per household, one of the highest in the nation. Approximate ly

50% of the area households have an annual buying income in excess of $50,000. Over 1/3 of our

market area is considered rural in nature. The largest concentration of population is in the cities

of Santa Rosa, Rohnert Park, Petaluma, and Novato. These four cities represent over 300,000

people.

Economic growth in Sonoma County has increased by 20% since 1990 and has outpaced

California nearly every year during that period of time. This is due to the County having a

growing concentration of high

- tech i ndustries that have benefited from strong business

investment and export growth in the first half of the decade. Also, the agriculture, wine, and

tourism industries performed well through the recession and showed large growth during the

later part of the 1990’s.

The economic indicators for the Airport market area are higher than the average for the State of

California where the retail sales average $42,675 per household, buying income averages

$57,795 per household, and 42.5% of the total households h ave buying incomes in excess of

$50,000. The table below compares economic data for the Sonoma County Airport market area

with the total Bay Area Consolidated Area which includes the metropolitan areas of San

Francisco, San Jose, Oakland, Santa Cruz, Vall ejo

- Fairfield

- Napa, and Santa Rosa.

ECONOMIC DATA BY AIRPORT AREA

Retail Buying % Hshlds.

Airport Area Population Households Sales Income over $50,000

(000) (000) (mil.) (mil.)

Total Bay Area 7,284,985 2,630,320 $120,7 37 $208,613 53.9%

Sonoma County 1,021,430 392,600 $ 18,906 $ 28,747 50.0%

Airport Market*

Sonoma County 14.0% 14.9% 15.6% 13.8%

Airport Market %

* Assumes Sonoma, Marin, Mendocino, Lake, and Napa County will c onveniently use Sonoma County Airport

The Sonoma County C ommunity has also been impacted by the economic recession that has

been felt nationwide. Local leaders believe that the tourism industry is one area where the

community can move quickly to bring r evenue and new jobs to the community. Various surveys

in California indicate that people are still taking vacations but they are traveling shorter

distances. The people in southern California are visiting points in northern California and people

in north ern California are visiting points in southern California.Small Community Air Service Development Program Page 5

Charles M. Schulz

– Sonoma County Airp ort Proposal The business market is strong and diverse in Sonoma County. Community leaders will continue

to support existing employers while attracting new businesses that will contribute to the

economic wel l being of the area.

MAJOR EMPLOYERS IN CATCHMENT AREA

Company Employees Industry

Agilent Technologies 2,600 Communications

Kaiser Permanente 2,500 Health Care

Santa Rosa Junior College 2,360 Education

St. Joseph Health System 2,300 Health Care

Lucas Films 1,820 Entertainment

Sonoma State University 1,800 Education

Fireman’s Fund Insurance 1,700 Financial

Medtronic 1,400 Technology

Optical Coating Labs 1,300 Technology

Beringer Bl ass Wine 1,200 Agriculture

Santa Rosa is ranked sixth nationally as the best places for business in the Forbes/Milken survey.

The quality of life in Sonoma County and the North Coast are consistently ranked very high.

This has resulted in an influx of new residents and businesses wishing to take advantage of the

varied geography and small town atmosphere. Affordable housing has been improving due to

higher incomes and lower interest rates. Air quality has consistently improved since 1990.

The Cha rles M. Schulz

– Sonoma County Airport (STS)

The Sonoma County Airport is the primary commercial airport serving the North Coast Region

of California. This region includes Sonoma, Mendocino, Lake, Napa and Marin Counties. It is

estimated that the populat ion of the Airport catchment area is over 1,000,000 residents. Sonoma

County has traditionally provided the best and only practical link to the National Transportation

System for the residents of the many small, rural communities throughout the North Coas t area.

The economies of the region continue to grow. Population is increasing, retail sales are up, and

new companies are moving into the area

, and demand for airline service is at an all time high.

The Sonoma County Airport is a full service Airport. Its existing passenger terminal has space

to accommodate two airlines, and currently has three rental car companies and a full service

restaurant. Convenient, reasonably

- priced automobile parking is available on

- Airport. The

Airport is seven miles northwe st of downtown Santa Rosa and is owned and operated by the

County of Sonoma. The primary runway at the Airport is 5,115 feet long and 150 feet wide.

Sonoma County Airport is currently working to extend the runway to 6,000 feet. Tenants and

vendors at th e Airport provide a full range of aviation services including fuel service, student

instruction, charter flights, aircraft and engine repair, and aircraft storage.

The success of the Horizon Air service is moving Sonoma County to a full modernization of t he

Airport with a new runway, new taxiways, new lighting, remodeling and expanding the terminal

building and a new parking lot. T he terminal improvements will be in place by the end of

summer of 2010. The runway extension and taxi way improvements will be in place by 2013.Small Community Air Service Development Program Page 6

Charles M. Schulz

– Sonoma County Airp ort Proposal Our Plan Is Consistent With DOT Priorities

This project to increase the amount of inbound travelers to the Wine Country is consistent with

the priorities established by the Secretary of Transportation. The new marketing campaign will

on ly bring more passengers and revenue to Horizon Air by creating a stronger awareness of the

Sonoma County Airport as the gateway to the Wine Country

.

The proposed marketing campaign will definitely benefit local businesses, higher education

institutions , the general public, and especially the tourism industry during this economic

recession and in the future . It will also provide an excellent alternative to the difficult and highly

congested two

- hour average drive on the Highway 101 corridor to either th e San Francisco or

Oakland International Airports.



### Air Service Background

Air Service History

Sonoma County has had scheduled air service since the late 1940’ s. Prior to the Airline

Deregulation Act of 1978, the Sonoma County Airport had frequent servi ce to San Francisco

(SFO) and Sacramento (SMF). Hughes Air West and its predecessor, Pacific Airlines provided

the service with forty

- four seat F

- 27 turbo prop aircraft. Special jet charter flights were operated

by Hughes Air West with DC

- 9 aircraft and b y Air California with B

- 737 aircraft.

In the early 1980 s, West Air Commuter began serving San Francisco, Eureka, Chico, and

Sacramento from the Sonoma County Airport using eight seat Cessna 402 aircraft. The Airport

lost its scheduled passenger air servi ce shortly after September 11 , 2001 . The Airport

implemented an air service development program and recruiting effort and was able to attract

Horizon Air to provide service to Los Angeles International Airport. This recruitment would not

have been possib le without the Small Community Air Service Development Program and the

grant that the Airport received from this program. In 2008, the Sonoma County Airport

generated over 200,000 passengers on Horizon Air.

HISTORICAL SONOMA COUNTY PASSENGERSSmall Community Air Service Development Program Page 7

Charles M. Schulz

– Sonoma County Airp ort Proposal United Express Service

In 1985, West Air upgraded its fleet to nineteen

- seat and thirty

- seat regional aircraft and signed a

marketing agreement with United Airlines to become United Express. Initially United Express

provided service to San Francisco (SFO). In 1989, West Air inaugurated pure jet service at

Sonoma County Airport using BAe

- 146 aircraft. Four round trip flights to Los Angeles (LAX)

were provided. The jet service was popular with the local travelers and total enplaned

passengers reached a high in 1991 of almost 59,000. West Air stopped its Bae

- 146 service in

1992 after a dispute with United Airlines.

In the spring of 1999, United Airlines terminated its agreement with Mesa Airlines, which had

acquired West Air in 1 998. United signed a new agreement with SkyWest Airlines to operate as

its regional partner. Service was provided connecting to United Airlines flights in San Francisco

(SFO). SkyWest Airlines operated the Sonoma County

– San Francisco route with 30 seat turbo

prop aircraft.

At Sonoma County’s request, SkyWest Airlines inaugurated non

- stop service to Los Angeles

(LAX) in the spring of 1999. The new service to Los Angeles resulted in an increase of total

passengers from 35,534 in 1998, to 54,669 in 1999, and to 64,354 in 2000. Despite strong

passenger demand and excellent response to the new air service, United Airlines ordered

SkyWest to terminate all service at the Sonoma County Airport in October, 2001. The decision

to abandon our very strong market was based on internal airline policy factors. It did not reflect

any lack of confidence in our market.

American Eagle Service

In 1989, American Eagle, the regional airline of American Airlines, began serving the American

Airlines hub at San Jose (SJC). The Sonoma County community responded positively to this

increase in service. American Eagle service was terminated in mid 1993 when American

Airlines abandoned its San Jose hub and withdrew American Eagle from Bay Area markets.

Reno Air Service

In Se ptember 1994, Phoenix Leasing Corporation dba Reno Air Express began service from

Sonoma County to San Jose International using a Jetstream (J31) aircraft. In March 1995, during

negotiations to add one round trip daily to Reno, Reno Air requested early te rmination of their

agreement due to internal company changes.

Horizon Air Service

In March 2007, Horizon Air began nonstop service from Sonoma County Airport to Los Angeles

International Airport and Seattle/Tacoma International Airport. This service was a result of the

recruiting program funded by the Small Community Air Service Development Program.

Horizon Air started service with 74 seat Dash 8 Q

- 400 aircraft flying two daily round trip flights

between Sonoma County and Los Angeles and one daily round trip flight between Sonoma

County and Seattle. This new air service was an instant success. For the first six months theSmall Community Air Service Development Program Page 8

Charles M. Schulz

– Sonoma County Airp ort Proposal load factor was over 80% every month. Horizon Air added a third flight to Los Angeles

International Airport in October 2007 and al so added new service to Portland International

Airport in October 2007 . By the end of the year, Sonoma County Airport had five flights per day

and had averaged a load factor of 77% for the year.

In the first quarter of 2008, Horizon Air found that the lo ad factor on the third LAX flight was

not at the level as the other flights. Horizon changed the flight from LAX to Las Vegas

International Airport. This flight is now doing better than the third LAX flight. For the year

2008, Horizon Air averaged a 73% load factor for all flights. In 2009, the airline had an average

load factor of 71%. Horizon Air has indicated that they are extremely happy with the results of

the Sonoma County Airport air service and the efforts by the local community to support the

ai rline.

Current Air Service

As of August 1, 2010 , Sonoma County Airport had five flight departures per day: Two nonstop

flights to Los Angeles International Airport, one nonstop flight and one one

- stop flight to

Seattle/Tacoma International Airport, on e nonstop flight to Portland International Airport, and

one nonstop flight to Las Vegas International Airport. All service is provided with Dash 8 Q

- 400

aircraft. Listed below is the current flight schedule:

STS AIR SERVICE

– AUGUST 1, 2010

Market Ai rline Depart Arrive Stops Frequency

STS

- LAX Horizon 6:30 am 8:05 am 0 Daily

Horizon 4:35 pm 6:10 pm 0 Daily

LAX

- STS Horizon 8:40 am 10:15 pm 0 Daily

Horizon 6:50 pm 8:2 5 pm 0 Dai ly

STS

- SEA Horizon 10:45 am 12:55 pm 0 Daily

Horizon 6: 1 0 pm 9:20 pm 1 Ex. Sa.

SEA

- STS Horizon 9:00 am 12: 1 0 pm 1 Daily

Horizon 1:55 pm 4:05 pm 0 Daily

STS

- PDX Horizon 6:1 0 pm 7:55 pm 0 Daily

PDX

- STS Horizon 10:25 am 12:1 0 pm 0 Daily

STS

- LAS Horizon 12:40 pm 2:3 0 pm 0 Daily

LAS

- STS Horizon 3:45 pm 5:40 pm 0 DailySmall Community Air Service Development Program Page 9

Charles M. Schulz

– Sonoma County Airp ort Proposal Comparison to Similar Market Areas

When the Sonoma County Airport market area is compared to other similar metropolitan market

areas in the west, it is clear that the Sonoma County community is not getting all of the air

service that its population and economic buying power can support. The average size of the

eight ma rkets listed below is 721,000 people, approximately 30% less than the service area for

Sonoma County. Yet, the daily flight average of the six markets is 47 flights compared to 5

flights for the Sonoma County Airport.

COMPARISON TO SIMILAR MARKETS IN TH E WEST

Metro Area Population Daily Flights

Sonoma County Airport 1,021,430 5

Fresno 971,800 38

Tucson 901,800 63

Albuquerque 734,000 74

Bakersfield 700,000 8

Colorado Springs 550,200 43

Boise 468,700 58

Average 721,000 47

Without knowing more, it is tempting to suggest that the Sonoma County Airport does not have

the frequent air service because of its close proximity to the San Francisco International and

Oakland International Airports. The proximity to these airports is deceiving not only based on

road mileage, but also in terms of travel time. They are quite far versus comparable situations.

So me examples include the Eugene Airport which is close to the Portland International Airport;

the Monterey Airport which is close to the San Jose International Airport; the Santa Barbara

Airport which is close to the Los Angeles International Airport and Bu rbank Airport; the Tucson

Airport which is close to the Phoenix Airport. All of these airports support frequent air service

with multiple airlines.

Local Market Demand

An analysis of passenger bookings was developed for Sonoma County Airport by Sabre A irline

Solutions for the twelve months ending December 2009 . The analysis came up with 4,324

outbound passenger bookings per day on all airlines from residents of the Sonoma County

Airport catchment area. This equates to 1.55 million outbound passengers and 3.1 million local

round trip passengers. Of this total, approximately 7% of these passengers are using Sonoma

County Airport

.

The southern California market served by five airports was the number one overall destination

with 584 ,000 annual origin and destination passengers. The actual origin and destination

passengers for Horizon in the LAX

- STS market was approximately 136,500, only 23.3% of the

true passengers. The next three largest passenger markets are Las Vegas, Seattle, and San Diego.

There i s a strong demand for service to Mexico and Hawaii. The Sabre Study presented theSmall Community Air Service Development Program Page 10

Charles M. Schulz

– Sonoma County Airp ort Proposal passenger bookings from the Global Distribution System for the total Sonoma County Airport

catchment area for a twelve

- month period. The table below lists the top markets from this

booking analysis.

TOP DESTINATIONS FROM SABRE STUDY

Market PDEW Market PDEW

LA Area 385.2 MCO 43.8

LAX 240.4 * MIA 41.5

GDL 163.8 CDG 38.4

JFK 157.8 PVR 36.7

SEA 143,7* SLC 36.0

MSP 135.3 YVR 33.0

LAS 113.8* CUN 31.6

ORD 112.7 IAH 28.4

DEN 94.3 STL 28.1

SAN 85.7 LIH 27.8

BOS 81.5 BJX 26.6

IAD 81.1 SJD 26.4

PDX 75.4* PSP 26.0

KOA 70.1 FRA 24. 7

EWR 69.9 DTW 24.1

SNA 68.7 FLL 24.0

PHX 62.2 MSY 20.3

HNL 61.9 FCO 19.8

LHR 60.5 MEM 19.0

BUR 60.0 OAX 18.5

MEX 57.2 CLE 17.4

OGG 57.0 YYZ 17.3

DFW 54.9 GUA 16.9

MLM 53.0 ONT 16.1

ATL 50.1 SJO 15.5

PHL 47.8

* Current Markets Served

Source: Sabre MIDT data YE Dec. 2009

Passenger Originations

Horizon Air has provided the Airport with a list of passenger bookings from their reservations

system for Sonoma County Airport flights for the six month period April 1 to September 30,

2009. This booking data is from their e

- ticket database and will indicate trends for passenger

points of origin and the ultimate destination. The pas senger data was collected by zip code and

then tabulated by city of location. The Horizon data was presented on a city

- pair basis for four

city pairs; STS

- LAX, STS

- SEA, STS

- PDX, and STS

- LAS. For this analysis, we have taken the

Horizon data and tabulate d it by county and by state.Small Community Air Service Development Program Page 11

Charles M. Schulz

– Sonoma County Airp ort Proposal The survey sample included 32,900 passenger bookings for the six month period. In the STS

LAX market there were 12,830 passenger bookings, in the STS

- SEA market there were 9,849

passenger bookings, in the STS

- PDX market the re were 5,636 passenger bookings and in the

STS

- LAS market there were 4,585 passenger bookings. The total one

- way revenue passengers

carried by Horizon during this period was 96,827. Most of the passengers in this survey have

booked round trip flights. It is estimated that the tickets in the survey account for 68% of the

total passengers carried for this period.

The Horizon Air data showed that the Sonoma County Airport catchment area is the primary

originator of passenger s on Horizon Air. This should not be the case! Sonoma County and Napa

County are large destination markets with over 13 million visitors per year coming to the Wine

Country. In reviewing the Horizon Air data, o ver 56.5% of the total passengers are originating

in the Sonoma County Air port catchment area. Based on the experience of other destination

markets in California like Palm Springs, Monterey, and Santa Barbara, the Sonoma County

originating passenger should be around 45% of the total. The inbound passenger should be at

55% or h igher not at the 43.5% level.

ORIGINATING PASSENGERS AT SONOMA COUNTY AIRPORT

Total STS Inbound % Inbound

Market Passengers Passengers Pass engers of Total

STS

- LAX 12,957 7,114 5,843 45.1%

STS

- SEA 9,849 5,821 4,028 40.9%

STS

- PDX 5,636 3,114 2,522 44.7%

Total 28,442 16,049 12,393 43.5%

Source: Horizon Air booking data, six months 2009

The local community

, led by the Sonoma County Airport

, developed a very effectiv e marketing

and advertising campaign when Horizon Air started service at Sonoma County Airport. Load

factors for the first six months were 81%. Since then, the Airport and the local community have

done additional local marketing and advertising and the H orizon Air service is well known in the

Sonoma County catchment area.

On the other hand, Horizon Air has done very little to promote the air service to Sonoma County

Airport in the major metro markets . When asked, Horizon Air management said that they do not

have a budget to do advertising and promotions in large metro markets and usually “tag on” to

Alaska Airlines newspaper ads. This seems to be the key to the shortfall of passengers destined

to Sonoma County Airport.

If the inbound markets to Sonom a County were at 55% of the total passengers, the market would

increase by approximately 47,500 passengers per year. This would occupy 62.5% of the empty

seats and produce much needed visitor spend ing to the Sonoma County market. Based on

Tourism data, t he current average stay in Sonoma County is 3.7 nights and the average daily cost

for couple is $245.Small Community Air Service Development Program Page 12

Charles M. Schulz

– Sonoma County Airp ort Proposal

ADDITIONAL PASSENGERS WITH NEW MARKETING PROGRAM

Total STS Passengers

- 2009 186,014

O riginating at STS 56.5%

STS Originating Passengers 105,100

If STS equaled 45% , then t otal equals 233,550

Increase in Total Passengers 47,536



### Action Plan

The goal of the Action Plan is to develop an effective marketing program that will result in more

inb ound passengers on Horizon Air to Sonoma County Airport and more visitor expenditures for

Sonoma County and the Wine Country

. An effective marketing program covers the key

elements of: (1) product, (2) promotion, (3) pricing

, ( 4 ) and distribution. The p revious

marketing that Sonoma County Airport did for the start up of Horizon Air service in 2006

covered all four of these key elements and the resulting passengers and load factor indicated the

success of this program. This proposal is requesting funds t o support a marketing program to

produce new inbound visitors to Sonoma County and the Wine Country. The program cost will

be the advertising, public relations, and sales promotions in the metro markets of Los Angeles,

Seattle, and Portland.

The Product

Sonoma County Airport and its marketing partners have de veloped a new product to generate

more passengers and more visitor spending. This product is the “Wine Country Vacation”. All

successful destination markets have vacation package programs that driv e the business to the

destination. Markets in the West like Las Vegas, Reno, Orange County, Palm Springs, San

Diego, and Monterey all have successful vacation package programs. In fact, Allegiant Air has

built an airline based on vacation packages. Sono ma County and the Wine Country do not have

a vacation package that includes air, ground, a choice of lodging and attractions.

The product will include seats on Horizon Air, rental cars with Hertz, Avis, Budget, and

Enterprise, limo service, charter bus o r coach service, lodging at over 20 hotels, wine tasting, and

attractions like wine country balloon rides. The Sonoma County area also has other places to

visit like the Russian River resort area , Ft. Ross, Jenner

- by

- the

- Sea artist colony, Bodega Bay,

Arm strong Woods

, redwood forests, the Skunk Train, the Mendocino Coast, Clear Lake, the

Geysers, Point Reyes National Sea Shore, and many other attractions.

Promotion

We believe that the success of the previous grant program was the strong marketing and

ad vertising program that was developed by Sonoma County Airport. An effective use of local

media was the key for the traveler response. This new marketing campaign will utilize a strong

media plan support ed with sales promotions and public relations.Small Community Air Service Development Program Page 13

Charles M. Schulz

– Sonoma County Airp ort Proposal The target audience will cover three segments of the market: (1) the older market with a higher

income that values food and wine and is interested in a wine country adventure of some type ; (2)

a younger market that is looking for recreation activities that abound in the area; and (3) families

looking for a reasonably priced vacation. In all three cases, the most effective way to contact

this customer is by targeting: (1) the traveler ; ( 2 ) the travel agent ; ( 3 ) clubs and special interest

groups . All of the se targets can be approached utilizing the same advertising media

- radio,

newspaper, magazine, and internet.

Media Selection

The market in the metro market s of Los Angeles, Seattle, and Portland can best be reached by

using local newspaper, local radio, direct mail, tr avel publications, and online advertising via the

internet. Since this is a well

- defined product, we will focus on travel sections in the major

newspaper in Los Angeles, Seattle and Portland. With radio being so expensive, we will focus

o n popular travel, food, and recreation related radio shows. There are popular radio personalities

in all three markets that have an excellent following and ad s will be placed on their shows.

Travel magazines can also be quite expensive and to be efficien t in our buy, we are looking at

the Horizon Air magazine and Sunset Magazine

- western edition. Internet advertising will be

utilized with ads on key travel sites . Direct ma il and outdoor will not be used for this program.

The advertising will have two ca mpaigns to match lower passenger traffic periods. The first

campaign will run for three months from March to May and the second campaign will run for

three months from mid August to mid November. The budget should be the same for each

campa ign. If promo ted correctly, Fall can be a large travel period due to the wine harvest

happening in late September and throughout October.

SELECTED MEDIA FOR AD CAMPAIGN

Media Type Media Selected Show Location

Newspaper L.A. Times Los Angeles

Seattle Times Seattle

Oregonia n Portland

Radio KNX 1070 AM Melinda Lee Los Angeles

KABC 790 AM Merrill Shindler Los Angeles

KIRO 710 AM Ciscoe Seattle

KTTH 770 AM Jeremy McLachlan Seattle

KXL 750 AM Peter G reenburg Portland

KEX 1190 AM Kylie Katie Portland

Magazine Sunset West Coast

Horizon Air West Coast

Internet Various Travel Sites NationwideSmall Community Air Service Development Program Page 14

Charles M. Schulz

– Sonoma County Airp ort Proposal The Sonoma County To urism Bureau will also be advertising during this time perio d and will

include the new Wine Country program in its ads. At this point in time, the Bureau has placed

advertising in Horizon and Alaska in flight maga zines, AAA publications such as Via and

Westways, Sunset Magazine, and National Geographic Traveler, a nd Budget Travel.

Advertising Budget

Sonoma County Airport and its partners plan on running two ad campaigns next year. The first

campaign will cover the Spring and the second cam paign will cover the Fall. The newspaper ads

will be 1/6 of a page (15 co lumn inches) in black and white and will run in the Sunday travel

sections of each newspaper the first week of each month. The radio ads will be 30 second

professionally produced spots and will run once per week on each show. The magazine ads will

be fou r color and cover 1/3 of a page in each magazine and run monthly. The internet ads will

be banner ads and will run for the three month campaign.

In each campaign the budget for Newspaper is $73,800 , the budget for Radio is $9,360 , th e

budget for magazine is $23,160 , and the budget for internet is $ 3,000. Production ads and spots

and the media buy are estimated at $20,000. This results in an advertising budget of $129,320

for each campaign.

AD BUDGET FOR EACH THREE MONTH CAMPAIGN

Medium Size Run Cost/ad Total Cost

Newspaper

L.A. Times 1/6 page 1x/ 3mo. $12,770 $38,100

Seattle Times 1/6 page 1 x/3 mo. 8,100 24,300

Portland Oregonian 1/6 page 1 x/3mo. 3,800 11,400

Sub Total $73,800

Magazine

Horizon Air Magazine 1/3 page 1x/3 mo. $2,530 $ 7,590

Sunset Magazine 1/3 page 1x/3 mo. 5,190 15,570

Sub Total $23,160

Radio

KNX

– Los Angeles 30 second 4x/3 mo. 250/spot $ 3,000

KABC

- Los Angeles 3 0 second 4x/3 mo. 225/spot 2,700

KIRO

- Seattle 30 second 4x/3 mo. 120/spot 1,440

KTTH

- Seattle 30 second 4x/3 mo. 110/spot 1,320

KXL

- Portland 30 second 4x/3 mo. 40 /spot 480

KEX

- Portland 30 second 4x/3 mo. 35/spot 420

Sub Total $9,360

Internet 3 month run $3,000

Ad Production $20,000

Total $129,320Small Community Air Service Development Program Page 15

Charles M. Schulz

– Sonoma County Airp ort Proposal Sales Promotions

The Sonoma County Tourism Bureau ran a successful radio promotion in Los Angeles in the

Spring of 2009 on radio station KWVE

– The Wave. This radio station is famous for its travel

promotions. Sonoma County Airport and its marketing partners plan on co

- sponsoring a sales

promotion program with this radio stat ion again to support the new Wine Country Vacation.

The Sonoma County Airport and its partners will also do a promotion of the Wine Country

Vacation with Fred Meyer Stores in Portland and Seattle and with Ralphs Markets in southern

California. It is esti mated that these promotions will cost Sonoma County Airport $10,000.

Public Relations

Sonoma County Airport and its marketing partners will sponsor a trip to Sonoma County for

travel writers at various newspapers in southern California and the Pacific No rthwest to sample

the new Wine Country Vacation program. Sonoma County Airport will also produce and deliver

press releases and stories supporting the new inbound marketing program. It is estimated that the

Public Relations program will cost approximatel y $10,000.

Total Program Cost

The promotional strategy for this program is multi

- faceted and can be accomplished for the

$300,000 as set forth in our request. Listed below is the total program cost.

ESTIMATED PROGRAM COST

Spring Campaign Fall Cam paign Total

Advertising $129,320 $129,320 $258,640

Sales Promotions 10,000 10,000 20,000

Public Relations 10,000 10,000 20,000

Total $149,320 $149,320 $298,640

Pricing

Another ke y element of the marketing strategy is effective pricing. The owners of Travel Center

Services have developed successful tour and vacation programs for American Airlines, Sheraton

Hotels, Windham Hotels, Reno Air, and Allegiant Air. The pricing strategy that was successful

was one where no customer could buy any part of the package at a cheaper rate. The agreements

that Travel Center Services has with the participants in the tour program give them lower prices

on every aspect

– air, hotel, car, limo, and attractions. They will also include a discount travel

book to their customers that will include discounts on meals and shopping.Small Community Air Service Development Program Page 16

Charles M. Schulz

– Sonoma County Airp ort Proposal Distribution

The Wine Country Vacation program will be distributed over the internet, to travel agents, and

by telephone. Wine Country Vacations will have its own web site and all parts of the program

can be booked on this site. Wine Country Vacations will also be available through the Sonoma

County Tourism Bureau, Horizon Air and some of the hotel participants. Travel ag ents will be

able to book over the GDS system and will receive commissions for their sales. Wine Country

Vacations will have a reservations center with a nationwide 800 telephone number for direct

calls

Economic Impact

The new marketing and advertising program will act as an economic stimulus and generate new

re venue for the community and the Airport. It is estimated that the new marketing program will

generate 4 7,536 new o rigin and destination passengers for Horizon Air

. This equates to 23,768

new inbo und visitors. Based on recent surveys developed by the Sonoma County Tourism

Bureau for average stay and average expenditure, the new servi ce is projected to contribute $11

million to the local economy.

VISITOR EXPENDITURES FOR NEW AIR SERVICE

Estimate d New Inbound 23,768

Average Stay 3.7 nights

Average Daily Expenditure per couple 245 day

New Visitor Expenditures $11 millionSmall Community Air Service Development Program Page 17

Charles M. Schulz

– Sonoma County Airp ort Proposal 

### Performance Measurement and Schedule

Performance Measurement

The performance of the proposed air service will be tracked on a monthly and quarterly basis.

This tracking will measure the number of passengers using the Horizon Ai r service and monitor

the airline revenue and related incentive requirements.

Monthly. The airline will provide flight segments flown, on

- board passengers and

gross revenue data. This data will be compared to the forecast projections to

measure the performance of the program.

Quarterly. The Sponsor will aggregate the year to date flight data, passenger statistics

and gross revenue date. The goal is for the passengers carried and the gross

revenue to exceed the projections by the sixth month.

By accepting a grant from the Department of Transportation, Sonoma County Airport agree s to

run the proposed marketing program for a period of not less than twelve months. This should be

sufficient time to establish the viability of the new marketing program . During this twelve

month period we w ill work with Horizon Air, and show them how effective the inbound

marketing program can be. After the twelve month period has lapsed, the Community and the

Airport will determine if additional marketing and advertising funds will be developed to

continue promoting inbound passengers.

Grant Schedule

It is the assumption of the Sonoma County Airport that the following schedule would be

employed should the grant application be successful. The Sonoma County Airport commits to

the completion of the grant, if awarded, and within twelve months of acceptance the program

will be completed. The Sonoma County Air port proposes the following timeline:

PROPOSED TIMELINE

Item Estimated Date

Execution of Grant Agreements December 2010

Finalize Media Plan and contact media January

- February 2011

Implement Marketing Program

First Campaign March

- June, 2011

Second Campaign August

- October 2011

Review Results December 2011Small Community Air Service Development Program Page 18

Charles M. Schulz

– Sonoma County Airp ort Proposal 

### Community Support

As outlined and described above, the Board of Supervisors has created an Airline Attraction and

Marketing Committee to aid in our recruitment efforts. This Committee is designed to facilitate

and foster a public/private partnership for the attraction and retention of air service to the

C ounty. The purpose of this Committee is as follows:

The mission of the Sonoma County Airport Airline Attraction Committee is to

assist Sonoma County with the attraction of air service to the County by acting

as a sounding board for business and community interest, to facilitate business

and community support for advance ticket purchases and to assist with local

marketing.

The Committee has three subcommittees working on business support for ticket

purchases, advertising support from local business and pr oviding feedback for

County ideas. County staff assists this Committee where able and as requested.

To assist the County in establishing a pre

- purchased ticket program, flight

guarantee, and advertising and marketing.

AIRLINE ATTRACTION AND MARKETING CO MMITTEE FOR STS

Member Representing

Supervisor, Paul Kelley Sonoma County Board of Supervisors

Michael Merrill , Chair Merrill, Arnone & Jones, LLP

Hal Beck Hal Beck & Associates

Barbara Beedon Santa Rosa Chamber of Commerce

Anne Benjamin Redwood Credit Union

Cindy Butner Press Democrat

Ken Clark Business Consultant

Jonathan Coe Santa Rosa Chamber of Commerce

Dan Condron Sonoma State University

Mark Crabb Sonoma Coun ty Tourism Bureau

Anthony Geraldi Airport Express

David Gouin City of Santa Rosa

Christa Johnson Town of Windsor

Mike Kennett Lodging Association

Cynthia Murray North Bay Leadership Council

Scott Schnieder Mendocino County Lodging Association

Merritt Sher Hotel Healdsburg

Alan Stess Marketing Executive

Ben Stone Sonoma County Economic Development

Richard Strom Mendocino Lodging Association

Don Test Business Consultant

Larry Wassem Airport Business Center

Jeff Weber Agilent Technolo giesSmall Community Air Service Development Program Page 19

Charles M. Schulz

– Sonoma County Airp ort Proposal 

### Assurances

The County of Sonoma and the Charles M. Schulz

– Sonoma County Airport (hereinafter

referred to as “Sponsor”) hereby provides the U.S. Department of Transportation with the

following assurances:

The Sponsor will comply with all of the app licable Federal laws, regulations,

executive orders, policies, guidelines, and requirements as they relate to the

application, acceptance, and use of the Federal funds for this project.

The Sponsor has the legal authority to apply for the Small Community Air Service

Development Pilot Program grant, and to finance and carry out the proposed project;

that a resolution, motion, or similar action has been duly adopted or passed as an

official act of the applicant’s governing body authorizing the filing of the application,

including all understanding and assurances contained herein, and directing and

authorizing the person identified as the official representative of the applicant to act

in connection with the application and to provide such additional informati on as may

be required.

The Sponsor has access to the funds available for that portion of the project costs,

which are not to be paid by the United States government. The Sponsor has sufficient

funds to assure operating and maintenance of items funded und er the grant

agreement, which it will own or control.

The Sponsor shall keep all project accounts and records which fully disclose the

amount and disposition by the recipient of the proceeds of the grant, the total cost of

the project in connection with w hich the grant is given or used, and the amount or

nature of that portion of the cost of the project supplied by other sources, and such

other financial records pertinent to the project. The accounts and records shall be

kept in accordance with an account ing system that will facilitate an effective audit in

accordance with the Single Audit Act of 1984.

The Sponsor shall make available for the purpose of audit and examination, any

books, documents, papers, and records of the recipient that are pertinent to the grant.

The Sponsor will execute the project in accordance with the approved program

narrative contained in the project application or with the modifications similarly

approved.

The Sponsor will furnish such periodic reports as required pertaining to the project

and activities.Small Community Air Service Development Program Page 20

Charles M. Schulz

– Sonoma County Airp ort Proposal



## Airline Letter of SupportSmall Community Air Service Development Program Page 21

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