## APPLICATION UNDER SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST -2014-0133

SUMMARY INFORMATION 1



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

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

- air

- service/SCA SDP

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

## (D&B) DATA UNIVERSAL

NUMBERING SYSTEM 

## (DUNS) NUMBER 

## , INCLUDING 

## +4, EMPLOYEE IDENTIFICAT ION NUMBER 

## (EIN) OR TAX ID



## . Legal Sponsor Name:
Name of Signatory Party for Legal Sponsor:

DUNS Number:

EIN/Tax ID:

B. L IST THE 

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

## : 1.____________________________________________________
2.____________________________________________________
3.____________________________________________________
4.____________________________________________________

C. P ROVIDE THE FULL AIRP ORT NAME AND 

## 3-L ETTER 

## IATA A IRPORT 

## C ODE FOR THE

APPLICANT 

## ( S 

## ) AIRPORT 

## ( S 

## ) (O NLY PROVIDE CODES FOR THE AIRPORT 

## ( S 

## ) THAT ARE ACTUALLY

SEEKING SERVICE 

## ).

1. 2

. 3

. 4

.

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

- page limit of the SCASDP application.

## D OES THE AIRPORT SEEKING SERVICE HOLD AN AIRPORT OPERATING CERTIFICATE ISSUED BY

THE 

## F EDERAL 

## A VIATION 

## A DMINISTRATION UNDER 

## 14 CFR P ART 

## 139? (I F 

## “N O 

## ”, P LEASE

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

APPLICATION UNDER 

## P ART 

## 139 IS PENDING 

## .)

Yes No (explain)

______________________________________________________________________________

______________________________________________________________________________ D. L IST THE 

## 2- DIGIT CONGRESSIONAL DISTRICT CODE APPLIC ABLE TO THE SPONSORI NG

ORGANIZATION 

## , AND IF A CONSORTIUM 

## , TO EACH PARTICIPATING COMMUNITY



## . 1. 2

. 3

. 4

.

E. A PPLICANT 

## I NFORMATION 

## : (C HECK 

## A LL 

## T HAT 

## A PPLY 

## )

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

If previous recipient: Provide year of grant(s) :_______________________________; and, the text of the grant agreement section(s) setting forth the scope of the grant project :

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

F. P UBLIC 

## /P RIVATE 

## P ARTNERSHIPS 

## : (L IST 

## O RGANIZATION NAMES 

## )

PUBLIC PRIVATE

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.

## G. P ROJECT 

## P ROPOSAL 

## :
1. G RANT 

## G OALS 

## : ( CHECK ALL THAT APPLY 

## )

Launch New Carrier Secure Additional Service Upgrade Aircraft

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



## Other (explain below)

2. F INANCIAL 

## T OOLS 

## T O 

## B E 

## U SED 

## : ( CHECK ALL THAT APPLY 

## )

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

Start

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

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

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

case for new air service

Fee Waivers : waiver of airport fees, such as landing fees, to encourage new ai r service; counted as in-kind contributions only
Ground Handling Fee : reimbursement of expenses for passenger, cabin, and ramp (below wing) services provided by third party ground handlers

Travel Bank: travel pledges, or deposited monetary funds, from pa rticipating parties for the purchas e of air travel on an air carrier , with defined procedures for the subsequent use
of the pledges or the deposited funds; counted as in-kind contributions only

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

## Other (explain below)

______________________________________________________________________________

______________________________________________________________________________

H. E XISTING 

## L ANDING 

## A IDS AT 

## L OCAL 

## A IRPORT 

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

Localizer Other (specify)

I. P ROJECT 

## C OST 

## : D O NOT ENTER TEXT IN SHADED AREA



## L INE 

## D ESCRIPTION 

## S UB 

## T OTAL 

## T OTAL 

## A MOUNT



## 1 Federal amount requested

2 State cash financial contribution
Local cash financial contribution

3a Airport cash funds

3b Non

- airport cash funds

3 Total local cash funds ( 3a + 3b )

4 TOTAL CASH FUNDING ( 1+2+3 )

In

- K ind contribution

5 a Airport In

- Kind contribution **

5b Other In

- Kind contribution **

5 TOTAL IN

- KIND CONTRIBUTION
( 5a + 5b )

6 TOTAL PROJECT COST ( 4+ 5 )

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

- Kind contribution) and 5b (Other In

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

## K. I S 

## T HIS 

## A PPLICATION 

## S UBJECT 

## T O 

## R EVIEW 

## B Y AN 

## A FFECTED 

## S T ATE 

## U NDER 

## E XECUTIVE


## O RDER 

## 12372 P ROCESS 

## ?

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

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

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

L. I S 

## T HE 

## L EAD 

## A PPLICANT OR 

## A NY 

## C O 

## -A PPLICANTS 

## D ELINQUENT 

## O N 

## A NY 

## F EDERAL 

## D EBT 

## ?
(I F 

## “Y ES 

## ”, P ROVIDE 

## E XPLANATION 

## )

No Yes (explain)

______________________________________________________________________________

______________________________________________________________________________ APPLICATION CHECKLIST

I NCLUDED 

### ? I TEM



### For Immediate Action
Determine Eligibility

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

. Existing Grants.gov users must verify ex isting www.grants.gov account has not expired and the Authorized Organization R epresenta tive (AOR) is current

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

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

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

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

• 

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

.

• 

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

.

• 

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

• 

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

• 

### Designation of a legal sponsor responsible for adminis tering the program

.

• 

### A motion for confidential treatment (if applicable)

– see Appendix D below.A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 1

R EDDING M UNICIPAL A IRPORT 

# S ECTION 

# 1

A PPLICATION 

# H IGHLIGHTS

T his Small Community Air Service Development Program (SCASDP) grant application for Redding Municipal Airport ( RDD ) meets the criteria of Docket
DOT

- OST

- 201 4

- 01 13

. The City of Redding is requesting $ 450 ,000 in federal as sistance to implement a $ 500 ,000 airline assistance program to retain access to the air transportation system by preserving critically important commercial air service in the Redding market.



### A IR 

### S ERVICE 

### I SSUE S

The number one air service issue in the Redd ing
market is the reduction of SkyWest Airlines’ Embraer
Brasilia 120 (EMB

- 120) service

. Recently, there have
also been several EMB

- 120 service cancellations including cessation of service at Klamath Falls, Oregon, and Modesto, California, and the eliminat ion
of the EMB

- 120 aircraft at Portland, OR . Reduction of smaller turboprop s ervice is a well

- known industry
issue and is likely to continue. The solution for RDD is a regional jet upgrade to RDD’s existing hub service

, San Francisco International Airport (SFO).

SkyWest (United Express) is the sole service provider
at RDD with three daily roundtrip s to SFO, operated
with the 30

- seat EMB

- 120 turboprop aircraft

. If SkyWest continues to reduce the ir EMB

- 120 service

, RDD is at serious risk of losing access to the national air transportation system. The impact of the loss of air
service would likely be severe, with loss of local jobs and a negative impact on the local economy. This application is intended to mitigate the potential loss of
air service and i ts neg ative impact on the economy.

By upgrading existing EMB

- 120 turboprop service to
the 50

- seat Canadair Regional Jet 200 (CRJ

- 200), RDD will benefit from increased seat capacity and maintain access to the air transportation network even if frequency is reduc ed

. Compared to other markets of similar geography and population, RDD is significantly
underserved . A S CASDP grant award will assist RDD with securing a regional jet upgrade which will retain air service and increase seat capacity

, mak ing RDD

more compara ble to other communities.

An estimated 87 percent of air travelers are forced to
drive to a distant alternate airport such as
Sacramento or San Francisco b ecause of high airfares, a reduction in service and significant delays
and cancellations

, which shou ld be relieve d somewhat with operation of the larger jet aircraft

. Given California ’s traffic congestion , driving to alternate airports can take an excessively long time
with one

- way drive times exceeding 2.5 hours . The
lack of convenient access to and fro m the Redding community would hinder commerce and impede economic vitality in the community by increasing the cost of doing business

.

The Bureau of Transportation Statistics (BTS) database for calendar year 2013 shows RDD with an

average gross roundtrip f are of $ 570, 49 percent higher than the national average of $382.



### S TRATEGIC 

### P LAN

With the current trends of EMB

- 120 service
reductions , immediate action is needed to maintain
local air service

. Without immediate action the Redding community is in danger o f losing access to the national air transportation system. This section addresses:



###  Project goals



###  Description of the Strategic Plan



###  Highlights of the grant application

# S ECTION 

# 1

A PPLICATION 

# H IGHLIGHTS

A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 2 R EDDING M UNICIPAL A IRPORT The Strategic Plan to preserve RDD’s air service is to upgrade the existing EMB

- 120 aircraft to the CRJ

- 200 aircraft. To support the upgrade and share in the increased financial risk to SkyWest, th e public

- private partnership is proposing a revenue guarantee and marketing campaign to support the improved service. The pl an is contingent on getting assistance with the funding of the revenue guarantee through
the SCA SDP

. SkyWest Airlines supports the

S trategic Plan outlined herein and has provided a letter of support for the City of Redding’s application ( Appendix A ).



### C OMMUNITY 

### C OST 

### C ONTRIBUTION

To support this air service initiative, non

- airport

revenue sources will fund 10 percent ($5 0,000 cash)
of t he proposed $ 500 ,000 Strategic Plan. This is a strong commitment by the Redding community to support SkyWest

.



### P UBLIC


### - P RIVATE 

### P ARTNERSHIP

The City of Redding and the Economic Development Corporation of Shasta County have formed a public

private partnershi p in support of this application. This is a long standing partnership that ha s successfully worked together for several years on air service development initiatives

.



### M ATERIAL 

### B ENEFITS

C ommercial air service at RDD benefit s a broad
section of the travelin g public including businesses, educational institutions, healthcare providers and
leisure travelers. RDD serves a local population in
excess of 284,000 in the primary catchment area

, and has the potential to serve a secondary catchment

area with 176,000 re sidents to the south.

The Redding community includes a vibrant business community with growing companies such as CH2M Hill, Southern Aluminum Finishing and 3M and supports educational institutions such as Shasta College and Simpson University. All are at risk of increased cost of conducting business if local air service is not preserved.

An institution of particular note is the Bethel School of Supernatural Ministry. Bethel has more than 2,000 students enrolled annually with almost 40 percent
internation al students. Their Post

- Graduate Leadership Development program hosts about 12,000 people per year at events/conventions in Redding and is responsible for over two million travel miles

every year. Local access to air service is a critically important issue to Bethel.

Redding, the “Gateway to a World Renown Recreation Area”, has many scenic attractions that attract thousands of visitors each year including: Lake Shasta, Mt. Shasta, Lassen National Park, and Whiskeytown National Recreation Area. Clearly, RDD
air service and the access it provides to the air transportation system is highly valued and needed by the community. The plan to preserve local air service
will meet the goals of the SCASDP to benefit air
travelers by helping to sustain air service at RD D and
retain access to the national air transportation system

.



### A BILITY TO 

### I MPLEMENT 

### P ROJECT

The air service partnership listed above and other
local businesses in the Redding community fully support this plan and have the ability to implement this project as proposed. Key members of the air service partnership have been particularly active
since Alaska Airlines left the market and have developed a good working relationship with the management of SkyWest. The air service partnership has met regularly with S kyWest management and though SkyWest can provide no assurances that they will initiate a service change, SkyWest supports this grant application and proposed Strategic Plan

.

The Redding community has a well

- thought

- out achievable Strategic Plan strong de sire and a business and population base to support this air
service initiative to maintain local air service . In short, all of the pieces are in place to implement the proposed plan.A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 3

R EDDING M UNICIPAL A IRPORT 

# S ECTION 

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A IR 

# S ERVICE 

# E NVIRONMENT

To identify community air service ne eds, it is important to understand the characteristics of the community. This section shows the broad segment of the traveling public, including businesses, educational
institutions

, and other enterprises that benefit from
local air service

.



### S ERVING 

### N ORTH ERN 

### C ALIFORNIA

The RDD catchment area, located in the northern tip of California’s Central Valley, encompasses Shasta County and portions of Siskiyou, Trinity, Tehama, and Plumas Counties. Commercial air service at RDD
benefit s a population in the primary airport cat chment area exceeding 284,000. The catchment area includes Red Bluff, Anderson, Cottonwood, Redding,
and rural communities in the mountainous areas to the north, east, and west. The secondary catchment area to the south has a population of almos t 176,000. While the secondary catchment area includes areas currently served by Chico Municipal Airport, Chico is also in danger of losing commercial air service as, similar to RDD, they are served solely with the EMB

120 aircraft.

The combined catchment area has a population of 460,000. Exhib it 2 .1 provides a map of RDD’s primary catchment area (shown in yellow) and secondary catchment area (shown in purple). Within a
75

- mile radius the population is almost 485 ,000. This section addresses: Description of the Redding community in relation
to air service to demonstrate the benefit of the Strategic Plan to a broad segment of the traveling public.

Note: RDD primary catchment area id entified in yellow by zip code. Secondary catchment area identified in purple. EXHIBIT 2.1 RDD CATCHMENT AREA

# S ECTION 

# 2

A IR 

# S ERVICE 

# E NVIRONMENT

A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 4 R EDDING M UNICIPAL A IRPORT 

### P ROXIMITY TO 

### A LTERNATE 

### A IRPORT

RDD has the ability to serve a large portion of northern California; however, due to air service reductions, much of the catchment area is being
forced to driv e to Sacramento International Airport (SMF) or San Francisco International Airport (SFO) to
access ai r service. If RDD loses commercial air service, all travele rs will be forced to make
these drives a nd incur the increased time
and expense

.

Although there are 379,000 origin and destination passengers per year in the RDD catchment area,
RDD only serves 1 3 percent of those passengers. Sixty

- seven percent use SMF, 11 percent use SFO and 9 percent use other airports including airports at Medford, Oakland, Reno, San Jose, Chico and Eureka/Arcata (source: RDD True Market Estimate, year ended June 30, 2013).

T hese alternate airports require excessive drive times from the Redding community. Table 2.1 provides drive miles, times, and airport hub size for alternate airports. The closest airport is Chico which currently has similar turboprop service as RDD and may also
be in danger of losing service. The closest medium hub airport is over two hours to the south while the closet large hub airports is a drive of almost 3.5
hours. D rive times do not include the impact of major traffic congestion whi ch can increase the drive
times significantly.



### B USINESS 

### C OMMUNITY 

### N EEDS 

### L OCAL



### A IR 

### S ERVICE

L ocal air service at RDD is valued by all sectors of the Redding community, including government, business, education, healthcare, and tourism. The region is becoming more economically diverse with many
businesses and institutions reliant on air service for connections to customers, suppliers, consultants and facilities located in other parts of the state or
the country. The local Redding economy is f ueled by
business in

- mig ration from southern California

. Losing local air service and the access it provides to the air transportation network via SFO threatens to dampen that economic growth.

Redding’s top employers are provided in Table 2.2

. These employers and others need local access to air service to compete in the global marketp lace.

One example of the top employers is CH2M Hill. CH2M Hill is a large architectural and engineering firm TABLE 2.1 DRIVE TIME TO ALTERNATE AIRPORTS

AIRPORT MILES ESTIMATED DRIVE TIME HUB

SIZE Chico (CIC) 72 1 hr, 9 min Non Eureka/Arcata (ACV) 143 2 hrs, 25 min Non
Medford (MFR) 151 2 hrs, 13 min Non Sacramento (SMF) 154 2 hrs , 14 min Medium Reno (RNO) 200 3 hrs, 3 min Small Oakland (OAK) 220 3 hrs, 12 min Medium San Francisco (SFO) 228 3 hrs, 19 min Large
San Jose (SJC) 245 3 hrs, 32 min Medium Source: Microsoft MapPoint 2013

TABLE 2.2 TOP EMPLOYERS

EMPOYER EMPLOYER Barr Brothers Company NComputing Bethel Church Premiere Brand Meats Blue Shield of California Record Searchlight CH2M Hil l Redding Electric Utility Coca Cola Bottling Co. SECO Manufacturing Comptech Marine Shasta College Global Flex Manufacturing Shasta Regional Medical Knauf Insulation Sierra Pacific Industries Lehigh Southwest Cement Simpson University Les Schw ab Tire Recap Skyway Recreation MariTech Industries State Fund Insurance Mercy Medical Center The Fly Shop

# S ECTION 

# 2

A IR 

# S ERVICE 

# E NVIRONMENT

A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 5 R EDDING M UNICIPAL A IRPORT that has approximately 240 employees in their Redding office and 14,500 employ ees and 200 offices
worldwide. Another example is The Fly Shop, quot ed as the largest commercial fly

- f ishing distributor in the
world. The Fly Shop books over 4, 000 rooms annually
for visitors. CH2M Hill and The Fly Shop are just two example s of the many companies in the area that rely on local, commercial air service.

N ew business development is strong in Redding. A few examples of recent business development include:

 Southern Aluminum Finishing r ecently opened a 200,000 square foot facility and

a dded over 30 employees . Their West
Coast

- Redding office is their top produ cer in
the U.S. With their entrance into new markets in Asia , local air service is critical.

 AirCover Integrated Solutions , an Unmanned Aerial Vehicle (UAV) company

,
w orks with several large Department of
Defense manufacturers and contractors. They are cur rently w orking with Lockheed
Martin

- Skunk Works and FireWhat to
establish a Cer ti ficate of Authorization ( COA )
in the Mt. Shasta region.

 3M has purchased 1,900 acres in northern Shasta County that will be developed by Moody Flats Quarry, LLC, a subsidiar y of
3M . One

- hundred, full

- time jobs will be
created with a capital investment of approximately $80 million

.

 IASCO Flight Training trains 180 Chinese students and 40 Japanese students. They are initiating their first domestic pilot training program. They h ave a fleet of 34 aircraft performing primary training during their 12

- month program.

These examples and more support the critical need for local, continued commercial air service. Air service is simply how “business does business”. Without local
air ser vice, these businesses will suffer and it will hamper future development efforts in the community. 

### E DUCATIONAL 

### I NSTITUTIONS

Shasta College, a t wo

- year community college , and Simpson University, a private, liberal arts college, serve the higher education n eeds in the Redding community. Shasta College has over 10,000 annual
enrollments

. Simpson University , has over 1,100
annual enrollments and o ver 140 staff

.

Another institution with significant travel needs is the
Bethel School of Supernatural Ministry. Be thel has

m ore than 2,000 students enrolled annually with

a lmost 40 percent international students

.

More importantly, Bethel Post

- Graduate Leadership Development h osts about 12,000 people per year at
events/conventions in Redding. Bethel is responsible
for over two million travel miles every year valued at approximately $3 million with over a dozen individuals with travel of at least 100,000 miles annually on
United Airlines. An a dditional 1,200 students were sent on mission trips around the world in s pring 2013

. Because of this, Bethel has been very active in air service development efforts.



### T OURISM

RDD is the “Gateway to a World Renown Recreation
Area”. In addition to the diverse and growing business community, the Redding region is a magnet for
tourists seeking an outdoor experience. Local attractions include: Lake Shasta, Mt. Shasta, Lassen National Park, Whiskeytown National Recreation Area, and other outdoor attractions that are nearby.A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 6

R EDDING M UNICIPAL A IRPORT 

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# S ERVICE



# – E XISTING 

# /H ISTORICAL

T his section pro vides an overview of existing air
service. Carriers providing service, service frequency, nonstop destinations offered , and equipment types
are included in the discussion

. A summary of
historical air service is also included. A description of
air service d evelopment efforts concludes the section.



### E XISTING 

### A IR 

### S ERVICE

Currently, SkyWest Airlines (United Express) offers the only remaining service from RDD

. The SFO
service is operated with the 30

- seat EMB

- 120 turboprop aircraft three times daily. RDD ha s just 21 weekly departures and 630 weekly seats in J uly 2014 ( Table 3.1 ) , down 25 percent since July 2013 and 79 percent since July 2010

. Since service is provided solely with the EMB

- 120, the continued downward trend indicates the possibility that RDD service could
b e further reduced or eliminated

.

TABLE 3.1 EXISTING AIR SERVICE NONSTOP DESTIN

ATION MARKETING

CARRIER AIR

CRAFT WEEKLY

DEPART

URES WEEKLY

SEATS San Francisco, CA (SFO) SkyWest ( United

Express ) EMB

- 120 21 630

Total 21 630 Source: Diio Mi, Jul

y 2014

While SkyWest has a codeshare with United Airlines

at SFO to allow for connecting opportunities, SkyWest operates the RDD services on a pro

- rate basis (i.e. at risk). This means that SkyWest ultimately decides the
fate of the RDD service which mus t be profitable to
remain an ongoing market. SkyWest has indicated
that the re is significant increase in operating costs in upgrading RDD to regional jets which adds financial
risk to the airline . Without the support of the SCASDP to partially offset that increased cost

, RDD is at risk of losing access to the national air transportation system

. 

### H I STORICAL 

### A IR 

### S ERVICE

In the last five years

, RDD has experienced significant
reductions in commercial air service. This section
discusses historical air service in cluding destinations, traffic levels, and service providers and extenuating
factors that have affected air service over time.

Over the last 10 years, RDD has had service to multiple destinations including Las Vegas provided for a short period of time by A llegiant and Los Angeles, Portland and Seattle provided by Alaska Airlines until 2011. Since Alaska pulled service, SkyWest has been the sole service provider at RDD.

Table 3.2 , next page, shows historical hub destinations and service providers over the p ast 10
years . Scheduled annual departures and seats are provided. Peak service over the 10

- year period was reached in 2006 when Alaska provided service to Los Angeles and Portland and SkyWest provided an average of six daily roundtrips to SFO. However,
sin ce then, Alaska pulled out of the market and SkyWest reduced service to just three daily roundtrips. This has resulted in a 10

- year low in departures and seats in 2013, with seats declining 79 percent and departures declining 66 percent

s ince 2006. This section addresses:



###  Description of existing air service



###  Synopsis of historical air service



###  Description of air service development efforts

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# S ERVICE



# – E XISTING 

# /H ISTORICAL

A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 7 R EDDING M UNICIPAL A IRPORT Schedu led seats and departures in the RDD market have decreased 23 percent f rom calendar year 2012 to 2013 alone and are decreas ing

another 7 percent in 2014

.

Exhibi t 3.1 provides a summary of annual seats and onboard passengers from 2004 through 2013

.

EXHIBIT 3.1 HISTORICAL SEATS AND PASSENGERS

Source: Diio Mi

Over the 10

- year period, outbound passengers (i.e. enplanements) at RDD have de creased by 65 percent, a slightly lesser amount than seats at a 71 percent decrease . From 2004 to 200 6

, outbound
passengers increased by almost double and has since then steadily declined. An upgrade to regional jets would preserve important local access to the
national air tra nsportation system and increase
available seats to reverse these negative trends

.



### P AST 

### A IR 

### S ERVICE 

### D EVELOPMENT 

### E FFORTS

The City of Redding and its air service development partners have been very aggressive in air service development efforts over the past three years. With annual headquarters meetings and regularly scheduled conference calls with potential carriers, RDD has consistently explored every possibility in developing and preserving existing air service.

As an example, the City of Redding in part nership with the Economic Development Corporation of Shasta County and Bethel Church developed an
Airline Travel Bank

® (ATB)/revenue guarantee program in support of reinstating nonstop Los Angeles service. This program was one of the first of
its kind in t hat it was a hybrid program funding both the ATB and a revenue guarantee by companies within Redding. The program is fully funded by local companies that deposited 50 percent of their pledged funds to support the initiative. The other 50 percent of
the fun ds are contractually obligated. Their participation in the program was in good faith, without the knowledge of when or what carrier would provide the service. This demonstrates the community’s vast support of local commercial air service. 10,000 30,000 50,000 70,000 90,000 110,000 130,000 150,000 170,000 190,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Calendar year Onboards Seats TABLE 3.2 HISTORICAL HUB DESTINATIONS AND SERVICE PROVIDERS

HUB AIRLINE ITEM SCHEDULED ANNUAL DEPARTUR ES/SEATS 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Arcata, CA (ACV) Alaska Dept 366 605 699 708 547 689 569 106 Seats 23,244 42,152 51,726 52,638 40,478 51,436 43,244 8,056 Las Vegas, NV (LAS) Allegiant Dept 43 Seats 6,450 Los Angeles, CA (LAX) Alaska Dept 250 363 363 364 363 467 106 Seats 17,500 26,862 26,986 26,576 27,104 35,492 8,056 Portland, OR (PDX) Alaska Dept 366 363 365 365 366 234 Seats 24,696 25,410 27,010 27,134 27,084 17,316
San Francisco, CA (SFO) SkyWest

(United Express ) Dept 2,154 1,832 2,044 1,795 1,686 1,439 1,438 1,720 1,529 1,171

Seats 64,620 54,960 61,320 53,850 50,580 43,170 43,140 51,600 45,870 35,130
Seattle, WA (SEA) Alaska Dept 131 233 Seats 9,938 17,708 Annual departures 2,929 3,050 3,471 3,231 2,963 2,856 2,707 1,932 1,529 1,171 Annual seats 119,010 140,022 166,918 160,608 144,718 148,964 139,584 67,712 45,870 35,130
Source: Diio MiA PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 8

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# N EEDS AND 

# D EFICIENCIES

T he Air Service Needs and Deficiencies section
identifies the impetus behind this SCASDP grant application and demonstrates the critical need to take action to preserve the highly valued air transportation
access that air ser vice at RDD provides

.



### F LEET 

### R EDUCTIONS

SkyWest Airlines recently annou nced the cessation of
service at Crater Lake

- Klamath Regional Airport in
Klamath Falls, Oregon, and Modesto City

- County Airport in Modesto, California

, effective June 2014.
Each of the se markets were served with the EMB

120s. SkyWest determined that the current financial risk of continuing to serve these two communities was too great

. Additionally, SkyWest announced the
elimination of the EMB

- 120s at Portland International Airport. If t his trend continues, RDD is also subject to potentially losing all commercial air service as their service is provided solely with the EMB

- 120 aircraft.

Service cessation would impact a significant number
of air travelers and local businesses. For the yea r ended March 31, 2014, SkyWest served almost 24,000 annual passengers. Losing local

commercial air service would force these

travelers to drive long distances to alternate airports, further adding to the well

- documented road congestion issues in Californi a and increasing the
cost of commerce

.

The only current viable replacement in RDD for this
aircraft is the 50

- seat CRJ

- 200. However, t he CRJ

200 is much more expensive for SkyWest to op erate
than the EMB

- 120 . Because of this, there is a high
financial ris k for SkyWest to provide the aircraft upgrade at RDD

. In addition, the CRJ

- 200 are in short supply and in high demand for SkyWest. The limited aircraft resources make it very competitive for
markets that are served with the EMB

- 120s

. This SCASDP would prov ide the needed risk abatement for SkyWest and give the Redding community the opportunity to prove that the market can support the

move to larger and more expensive aircraft

.



### D ECLINING AND 

### U NRELIABLE 

### A IR 

### S ERVICE

Since 2011 when Alaska Airlines pulled out of the RDD market, SkyWest has been the sole service provider at RDD

. Because of this, RDD’s access to the national air transportation system is completely
reliant on SkyWest. They currently provide nonstop service to SFO, three times daily. Since 2003

, Sk yWest provided as much as six daily roundtrips but
has reduced air service with the lowest level of air service reached in July 2014 ( Table 4.1 )

.

TABLE 4.1 SKYWEST

- RDD NONSTOP DAILY FLIGHTS CALENDAR YEAR FLIGHTS/

WEEK SEATS/

WEEK SEATS/

DEPT 2003 42 1,260 30 2004 42 1,260 30 2005 35 1,050 30 2006 40 1,200 30 2007 35 1,050 30 2008 35 1,050 30 2009 28 840 30 2010 28 840 30 2011 34 1,020 30 2012 29 870 30 2013 28 840 30 2014 21 630 30
Source: Diio Mi This section addresses: Description of the Redding community’s air
service needs and deficiencies.

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A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 9 R EDDING M UNICIPAL A IRPORT The nearly 80 percent reduc tion in de partures and

seats since July 2010 ha s significantly deteriorated the quality of air service provided at RDD. In a market with such limited air service, any further reductions seriously impede the community’s access to the national air transportation syste m

.

The significant reduc tions in frequency ha ve exacerbated other issues . When a flight is cancelled or delayed, air travelers are left stranded and must find alternate ways to get to their destination. W ith the
use of the 30

- seat EMB

- 120 , delays and canc ellations
have been significant to/from SFO ( Table 4.2 )

. For example, in April 2014, RDD’s cancellations of 6 percent of flights were double SkyWest’s average at
SFO and t he problem seems to be getting worse. While some delays and cancellations were expect ed with the SFO summer construction, communities served solely with the smaller turboprop aircraft were hit the hardest as they are canceled before the larger
aircraft where more travelers are impacted.

TABLE 4.2 RDD DELAYS/CANCELLATIONS

CALENDAR YEAR C ALENDAR

MONTH TOTAL

FLIGHTS %

FLIGHTS DELAYED %

FLIGHTS CANCELLED

2014 May 93 23% 3%

Apr 90 22% 6% Mar 93 18% 2% Feb 84 25% 10% Jan 93 18% 2% Dec 88 16% 5% Nov 89 11% 1%

2013 Oct 93 18% 1%

Sep 90 29% 3% Aug 119 36% 8% Jul 124 29% 11% Jun 115 22% 9%
Source: Diio Mi

Upgrading to regional jet aircraft will solve many of the community’s air service issues and p rovide more
seats in the market. Even if frequency were reduced
with the upgrade to larger aircraft, at two roundtrips

pe r day, seats will increase by 11 percent. An upgrade to regional jets will also likely lessen delays
and cancellations for RDD at SFO. 

### U NDERSERVED 

### M ARKET WITH


### H IGH 

### D IVERSION

A study of RDD’s passenger diversion for year ended June 30, 2013, shown in Exhibi t 4.1

, indicated that approximately 87 percent of the travelers in the

RDD catchment area drive to other airports.

Previous studies showed that nearly 40 percent of potential travelers used RDD when service levels were greater, an indicator that the mark et responds to service improvements. Losing RDD’s existing air service will exacerbate the problem. The regional jet upgrade will improve local air service thereby pulling more air travelers from the congested roadways.

EXHIBIT 4.1 RDD CATCHMENT AREA AIRP ORT USE

In terms of the extent this community is underserved,
Table 4. 3 provides a comparison of communities with
similar geography and populations within a 50

- mile radius

.

TABLE 4.3 AIR SERVICE COMPARISON

- JULY 2014

AIRPORT POPU

LATION # OF

CARRIER S / DESTIN

ATIONS WEEKLY

FLIGHTS WEEKLY

SEATS Medford, OR (MFR) 331,332 4 /7 124 8,473 Redding, CA (RDD) 282,252 1 /1 21 630
Redmond, OR (RDM) 203,742 4 /6 124 6,993
North Bend, OR (OTH) 155,637 2 /2 37 907
Arcata/Eureka, CA (ACV) 129,692 1/2 59 1,770

So urce: Diio Mi

- July 2014; Population = 50

- mile radius SMF 67% RDD 13% SFO 11% OTHER

9%

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A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 10 R EDDING M UNICIPAL A IRPORT RDD’s air service options in terms of weekly departures and weekly available seats are very low compared to other communities with a similar population and geography. RDD has, by far, either the
lowes t number of weekly departures or weekly available seats for the size of their population.

The Strategic Plan proposed herein will help to ensure the availability of commercial air service at
RDD and increase the number of available seats in this highly u nderserved market.



### I MPACTS OF 

### L OSS OF 

### A IR 

### S ERVICE

This SCASDP grant application is the direct result of the threat to RDD losing commercial air service. Airports are life lines that connect residents to the national and international aviation systems. I f RDD
loses air service, there will be significant impacts at the City of Redding level as well as the regional level.

First and foremost

, job losses for the City and airline staff are likely. Additionally, f ees from airport users help to maintain the air port, not only for commercial aviation users but also general aviation users. Without service, airport funding will decline. In addition, U.S.
D epartment of Transportation (DOT) grant revenues through the Airport Improvement Program will go
down significan tly and result in the possible erosion of major maintenance at RDD

.

Beyond the direct impacts of loss of air service, there are regional impacts to the economy. Commercial air service is a key to economic development and
contributes to the economic health of the region. Connectivity has become increasingly important for
businesses

– it is how “business” does “business”

. Businesses depend on convenient airline service in
order to facilitate face

- to

- face contact around
the world.

Though beyond the scope of this grant to quantify the
direct impact that the loss of air service would have on the Redding community

, i t has been demonstrated
in other studies that counties that have lost air service have shown significant losses in the share of national personal i ncome whereas counties that have obtained air service have dramatically increased their share of the national personal income.

In short, if RDD loses commercial air service it c ould have a devastating impact on the regional economy , especially the growth of the local economy. It is well
known that business site locators use information on access to commercial air service as a major factor in making recommendations to firms on where to locate. Without air service, Redding will no longer be a
contender for d evelopment for these firms.

The Redding community has shown over several decades that it can support commercial air service; however, factors outside of the community’s control
such as the growing trend in the reduction of the
EMB

- 120 fleet and industry c onsolidation have impacted its access to the national air transportation system. Funding of this SCASDP application will help RDD transition to the larger aircraft and prove to its sole service provider, SkyWest

, the RDD market can be profitably served wit h larger more costly aircraft

.



### H IGH 

### A IRFARES

The Redding community suffers from high airfares
and overall cost of air travel and is losing over
328 ,000 annual passengers to other airports. Consequently, the marketplace’s reaction has been to
endure the in convenience an d expense of driving to
another airport.

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A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 11 R EDDING M UNICIPAL A IRPORT As shown in Exhibit 4.1

, page 9

, the majority of RDD
catchment area travelers drive between 154 to 228
miles to access either SMF or SFO . At the IRS mileage rate of 56.5 cents per mile, the drive a dds an
out

- of

- pocket expense of $87 to over $ 129 one

- way depending on the airport used, not including the cost
of the traveler’s time to mak e the drive. This also does not include the cost of parking, which can be very costly at $10 to $17 per day at SMF a nd a minimum of $18 per day at SFO. RDD is just $8 per day.

I nconvenience and expense are not the only

consequences. Traffic congestion, particularly to/from SFO, can be extensive. The extra time needed for these trips increases the likelihood of missed f lights, further compounding the problem of added expense, inability to conduct business and slowing the economic recovery of the region.

The Bureau of Transportation Statistic s (BTS) Research and Innovative Technology Administration database for calendar year 2013 shows RDD with an average gross roundtrip fare of $ 570, significantly higher than the national average of $382. RDD’s average fare is 49 percent higher than the natio nal

average based on this database

.

RDD ’s s ignificant fare discrepancy is shown further in comparison to o ther competing airports, the state of
California , the West region and the national average
as shown in Table 4. 4

.

The diversion to SMF and SFO in large part is related

to air fare differences. Over the last 10 years, the fare disparity between RDD and SMF has ranged significantly. In 2010, the fare difference was only $10; however, in 2013, the fare difference has grown to an average of $88 one

- way. Compared to SFO in 2013, the fare difference is $54 one

- way. To further exacerbate the problem, RDD’s average fare has increased 21 percent within the last year while SMF’s fare increased only 7 percent and SFO’s fare increased only 5 percent. These high a irfares have led the majority of travelers to use these alternate airports, driving in excess of 2.5 hours each way

.

RDD’s high airfares is further exemplified in comparison to the state, region and national levels. In
201 3

, RDD ’s one

- way average domestic fare was $ 70 higher than the state of California , $ 72 higher than the
West region and $ 82 higher than the U

. S

. average. Over the past 10 years, RDD’s average domestic fare increased 93 percent while the U.S. average increased only 37 percent. This puts RD D travelers at a significant disadvantage.

TABLE 4. 4 AVERAGE ONE

- WAY FARE PAID AVERAGE DOMESTIC FARE RDD $ DIFF 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
RDD $136 $137 $152 $152 $165 $151 $155 $182 $217 $262
SMF $109 $118 $127 $127 $137 $132 $145 $161 $164 $174 $88
SFO $161 $175 $190 $187 $184 $155 $176 $194 $198 $208 $54
California $132 $142 $156 $156 $165 $149 $166 $180 $184 $192 $70 West Region $132 $141 $154 $153 $164 $148 $166 $179 $184 $190 $72
U.S. $131 $135 $147 $147 $157 $143 $157 $170 $176 $180 $82 Source: Diio Mi; Domestic onlyA PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 12

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S TRATEGIC 

# P LAN

T he Strategic Plan proposed by the City of Redding will achieve the community’s goals and help to
alleviate the air service needs and deficiencies of this community. This section provid es a detailed description of the goals of the project and a plan for attaining those goals. This section also identifies the legal sponsor responsible for administering the program and the public

- private partnership that has been formed to actively partici pate in implementing the proposed project. A detailed description of the funding necessary for implementation of the Strategic Plan, including federal and non

- federal contributions,
is included.



### P UBLIC


### - P RIVATE 

### P ARTNERSHIP

The City of Redding, CA

, is the s ponsor of the Redding Municipal Airport and this grant application. In support of the proposed service and this application, the City of Redding has formed a public

private partnership with the Economic Development Corporation of Shasta County (refer to co mmunity support letters in Appendix A )

. This long

- standing partnership was formed many years ago in support of local, commercial air service. Each of the partners is
committed to and has an active role in the public

private partnership ( Table 5.1 )

.

Strate gic Plan /Revenue G uarantee : The City of Redding/Redding Municipal Airport will execute, manage, and administer grants associated with this application and administer the revenue guarantee

.

Marketing P

rogram : The Economic Development Corporation of Shasta County will plan, manage, and execute the marketing program proposed for the improved air service.



### P ROJECT 

### G OALS

The project goal is to preserve commercial air service at RDD by supporting a regional jet upgrade in the face of the reduction of the EMB

- 120 aircr aft fleet. This upgrade will increase seat capacity in the RDD market and will help ensure that this vibrant California community has continued access to the national air transportation system.



### P ROPOSED 

### A IR 

### S ERVICE

RDD is served solely by SkyWest Airline s, three times daily to SFO, with the 30

- seat EMB

- 120 turboprop
aircraft. With the potential reduction of SkyWest’s
EMB

- 120 fleet, RDD is a t risk of losing all commercial
air service and a ccess to the air transportation system

.

An upgrade from the EMB

- 120 to the 50

- seat CRJ

200 will preserve RDD’s air service and this vital link to the national air transportation system. The upgrade will also increase seat capacity in this underserved northern California market. If aircraft were exchanged

one

- for

- one, seat capacity would increase by 67 percent. If SkyWest replaced the three EMB

- 120 flights with two CRJ

- 200 flights, seat capacity still increases by 11 percent. TABLE 5.1 PUBLIC

- PRIVATE PARTNER ROLES PUBLIC

- PRIVATE PARTNER ROL E City of Redding/ Redding Municipal Airport Grant administration/Revenue guarantee Economic Development Corporation of Shasta County Develop and administer

the marketing campaign This section addresses:



###  A Strategic Plan for meeting the Redding community’s air service needs and
deficiencies



###  Previous grant recipient with new project and goals



###  Description of the public

- private partnership



###  Designation of a legal sponsor



###  Funding necessary for implementation



###  Sustainability of the project

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### A IRLINE 

### P ARTICIPATION

The public

- private partnership has had regular correspondence with SkyWest to discuss upgrading
aircraft to 50

- seat regional jets. SkyWest has indicated that there is significant financial risk in upgrading to the larger aircraft and has requested that the community share in the economic risk. This SCASDP grant application is sub mitted in an effort to do so. SkyWest has provided a letter of support for this air service initiative (included in Appendix A ).



### M ARKET 

### A NALYSIS

For SkyWest to replace the three existing EMB

- 120 roundtrips with two or three CRJ

- 200 aircraft, SkyWest will incur significant financial risk. Table 5.2 provides an analysis of SkyWest’s incremental cost
for the two scenarios

.

TABLE 5.2 RDD

- SFO COST ESTIMATE

EXISTING SERVICE PROPOSED SERVICE

OPTION 1 OPTION 2 Aircraft EMB

- 120 CRJ

- 200 CRJ

- 200 Cost per

se gment $2,335 $3,327 $3,327 Segments per day 6 6 4

Additional seat capacity 0 43,800 7,300 Seat capacity increase 0% 67% 11%

Annual aircraft cost $5,113,650 $7,286,130 $4,857,420

Incremental cost $2,172,480 ($256,230)

Source: Cost per segment = Sky West Airlines' EAS Filings

On a cost per segment basis, the CRJ

- 200 is 42 percent more expensive for SkyWest to operate in the
RDD

- SFO market than the EMB

- 120s. In the first scenario, which is the optimal scenario for the Redding community, SkyWe st will incur an additional $2.2 million in financial exposure. The risk is that the RDD community cannot fill the additional 67 percent
of seat capacity. To reduce the risk of adding such a substantial seat capacity increase, SkyWest may replace the three EMB

- 120 roundtrips with two CRJ

200 roundtrips until the market can adjust . While the financial outlay is slightly less for the CRJ

- 200 with two roundtrips , there is an additional 11 percent of

seat capacity to fill and the lower frequency may
cause some traveler s to divert to alternate airports

. With the two roundtrip option, maintaining passenger
levels is a risk.

SkyWest is not looking to have the RDD community
cover the entire incremental cost of the additional capacity. Rather SkyWest is looking for the

comm unity to share in the risk during the first year of service. Although it is estimated that SkyWest will earn a profit after the capacity addition matures, they will not generate this amount of revenue or margin at

start

- up. Airlines typically incur losses during the

ramp

- up period. Based on discussions with SkyWest, a $4 5 0 ,000 revenue guarantee would be an adequate contribution by the community to share in the risk.
This would cover approximately 25 percent of SkyWest’s incremental cost with three roundtrip s during the first year of service

.



### A LTERNATE 

### P LAN

As previously mentioned, w hile SkyWest has a
codeshare with United Airlines at SFO to allow for connecting opportunities, SkyWest operates the RDD services on a pro

- rate basis (i.e. at risk). This means that SkyWest decides the fate of the RDD service and must be profitable on the RDD segments to remain in
the market. If SkyWest decides to not upgrade the market to regional jets, United will be approached to operate the service on a contract basis.

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A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 14 R EDDING M UNICIPAL A IRPORT 

### I NCEN TIVE AND 

### S UPPORT 

### P LAN

New service initiatives such as the one proposed in this Strategic Plan are expensive and financially risky, particularly in smaller communities like Redding. Accordingly, airlines are cautious and highly risk adverse requiring commun ities to partner with them to reduce economic uncertainty. In today’s industry, community risk mitigation programs have become an expectation. To be effective, airline support packages must be structured to address the realities of today’s industry and ens ure that investments made are quick to respond. This Strategic Plan is structured to address today’s industry realities.

The public

- private partnership proposes an airline incentive program that has been tested and proved to be successful. To reduce SkyWe st’s breakeven period and offset the economic risk during start

- up, the public

- private partnership proposes the following incentives ( Exhibit 5.1 ):

 Revenue guarantee: reduce airline economic risk

 Marketing campaign: create improved
service awareness



### Reven ue Guarantee

To reduce SkyWest’s risk and provide incentive to upgrade aircraft to the CRJ

- 200 in the RDD market, this Strategic Plan includes an airline revenue guarantee as part of the community support package. SkyWest’s annual cost of providing additio nal capacity will be as much as $2. 2 million annually. To share in the risk for the first year, the Redding community proposes a $450,000 airline revenue guarantee. Exact terms of the airline revenue guarantee agreement are subject to further
discussions a nd negotiation.



### Marketing Campaign

Promotion of the proposed service will begin 60 days prior to the start date of the aircraft upgrade a nd
continue for an additional six months. The budget is $5 0,000. Since a previous marketing campaign for
new service was implemented , the public

- private partnership is experienced at planning and executing successful promotion programs for air service. The public

- private partnership will partner with SkyWest to create the necessary artwork for distribution in the
media o utlets.

TARGET AUDIENCE

The seat cost of operating regional jets is high

, especially compared to the EMB

- 120

. Accordingly, the airfares associated with the proposed service improvement will be competitive but not cheap , similar to the existing service tod ay . The success of the proposed service hinges on the support of the air traveler that is flying for a business/job related

purpose. These are the air travelers that are not as price sensitive and more inclined to pay a small fare premium for the convenien ce of flying locally. Cost conscious leisure flyers tend to drive to distant airports to take advantage of low

- fare carrier service especially if ther e are multiple people traveling together.

The primary target audience is the outbound Redding
business fl yer

. Also, companies in the Redding area that have regular inbound visitors (e.g. branch offices, vendors) are considered part of the primary target
audience. The secondary target audience is the convenience oriented, time sensitive, leisure traveler. High income travelers, some retirees, and people traveling on short notice fall into this category.

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A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 15 R EDDING M UNICIPAL A IRPORT MARKETING MESSAGE

The key messages for marketing of the improved service are stressing the convenience of flying local and the change in the aircraft type. The community is very familiar with flying on smaller, turboprop aircraft. Regional jet aircraft will be a very positive improvement for local travelers.

MEDIA MIX

The media mix is provided in Exhibit 5.1 and
detailed below:

EXHIBIT 5.1 MEDIA MIX/BUDGET

Printed Advertising

– Once the upgraded service is loaded into the airline’s computer system (which is typically 90 days in advance of the start date), marketing will begin by purchasing ad space in one or more of the following newspapers:



###  Redding Record S earchlight



###  Red Bluff Daily News



###  Chico Enterprise Record



###  Chico News and Review



###  Siskiyou Daily News

Billboards

– The Economic Development Corporation of Shasta County will contract with regional/national billboard firms for prime billboard locations through out the catchment area. The billboards will go up in advance of the start date of the
service upgrade

.



###  Viacom



###  Others Radio

– The Economic Development Corporation of Shasta County will buy airtime on popular radio
stations that broa dcast within the catchm ent area

.



###  Redding



###  Red Bluff



###  Chico



###  Siskiyou County

Television

– The Economic Development Corporation of Shasta County will buy commercial slots on local prog ramming as well as local

access channels.



###  Redding



###  Chico

Public Outreach

– The Economic Developme nt Corporation of Shasta County will use their internal
communication vehicles and events to inform and solicit the support of the business community

.



###  Airport, Economic Development Corporation, and Chamber speaking engagements and local service organizatio ns (e.g. Rotary Club)



###  Website additions



###  Community ac tivities (e.g. Air Show, Energy Fair)



###  Interviews on television , in local newspapers,
and local radio stations



###  Social media



### S TRATEGIC 

### P LAN 

### F UNDING

The public

- private partnership is requesting U

. S

. DOT

ass istance in funding 90 percent, or $ 450 ,000, of the Strategic Plan. The remaining cash funds for the marketing campaign will be p rovided by non

airport revenue sources , specifically Economic Development Corporation of Shasta County

. Printed advertising 25%

Billboards 33% Radio 17% Television 25%

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A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 16 R EDDING M UNICIPAL A IRPORT Table 5. 3 provides th e Strategic Plan budget by element and sources of funding. The community will

fund 10 percent of the total proposed air

service program.

TABLE 5.3 STRATEGIC PLAN BUDGET

DESCRIPTION FUNDING SOURCE

TOTAL U.S. DOT NON

AIRPORT CASH CASH Airline Sup port Program: Revenue Guarantee $450,000 $450,000 Marketing Campaign $50,000 $50,000

Total $450,000 $50,000 $500,000 Percent of total project 90% 10% 100%



### P ROJECT 

### C ONTINUATION AND


### S USTAINABILITY

Based on a strong marketing campaign f or promoting
the regional jet upgrade , it is anticipated that the regional jet upgrade will be self

- sustaining after the

start

- up period which can take up to a year. However, a leading cause of failure is lack of awareness in the community. With recent neg ative impacts of delays
and cancellations at SFO and the continued reduction in service over the past two years, it is possible that the lack of availability of flights is already ingrained in local catchment area traveler’s habits. Changing
these habits i s a top priority of the marketing campaign.

If at the end of the first 12 months of regional jet
service the load factor does not meet a level satisfactory to SkyWest, the public

- private partnership will consider funding an additional marketing campaign. The public

- private partnership and the Redding community are committed to the success of this project, have a vested interest in the outcome of this Strategic Plan, and understand the difficulties associated with profitably operating air service. 

### P REVIOU S 

### G RANT 

### R ECIPIENT


### - N EW 

### P ROJECT

AND 

### G OALS

The City of Redding has been the fortunate recipient of two previous SCASDP grants. In 2004, the application and grant award had two goals:



###  Improve air service to a broad section of air
travelers at both the RDD an d Arcata/Eureka airports by adding nonstop service to a new destination, Los Angeles International Airport



###  Provide better access to the national transportation system

The City of Redding in coordination with Arcata/Eureka Airport successfully utilized the grant by obtaining nonstop Los Angeles service; however, due to Alaska’s change in focus in the Los Angeles market, several markets including RDD and
Arcata/Eureka were canceled. The service cancellation was due to factors beyond the control of
either com munity.

The City of Redding also received a SCASDP grant in 2008. The grant goals in 2008 specifically targeted new air service to the east, with the primary target of Salt Lake City. Unfortunately, timing was very poor with this grant being awarded at th e beginning of the recession. Over the next several years, airlines were contracting with severe capacity cutbacks . Few new
markets were added nationwide and the grant had to be returned to the U.S. DOT.

This grant is very different from the first two gra nts. The primary objective of this grant is to preserve existing air service at RDD. The first two grants were focused on expanding air service to new destinations. This grant is for the replacement of the EMB

- 120
aircraft with the CRJ

- 200 aircraft to an e xisting
destination. Although the methods used to achieve the goals are similar to the 2004 and 2008 project s (i.e. revenue guarantee and marketing campaign), the goals are clearly different. As demonstrated, this application qualifies as a new project and meets the requirements of the SCASDP

.A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 17

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S CHEDULE AND


# M ONITORING

T he public

- private partnership has developed a realistic timetable to achieve the goals of this grant application

. This section provides critical milestones to be achieved by the pu blic

- private partnership. A monitoring program is also provided to track the progress of the regional jet upgrade

.



### C RITICAL 

### M ILESTONES

The following milestones are proposed to track the progress of this air service initiative. The timeline is highly depen dent on the date of the U.S. DOT’s grant award and the date SkyWest Airlines provides the regional jet upgrade in the RDD market.



### Airline Negotiations

October

– December 201 4 : Immediately following award of this SCASDP application, the public

- private part nership will meet with SkyWest to negotiate the terms of the airline incentive program including the revenue guarantee agreement. Successful airline negotiations are critical to the timing of the rest of the Strategic Plan.



### Marketing Campaign Development/ Initiation

January 201 5 : Development of the marketing campaign will be completed immediately following successful SkyWest negotiations for the regional jet upgrade . Development will be completed in time for the marketing campaign to be kicked off 30 to 60 days prior to new service initiation. Development of the marketing campaign is dependent on announcement of the replacement of the EMB

- 120 with the CRJ

- 200 and the proposed start

- up date.

February 201 5 : It is anticipated that the marketing campaign will begin by February 1, 201 5 , two months prior to new service initiation, and continue throughout the first year of new service.



### Service Improvement Initiation

April 2015 : It is anticipated that SkyWest may replace

the EMB

- 120 aircraft with the CRJ

- 200 aircr aft as early as April 201 5 . Air service initiation is dependent on airline route planning and availability of aircraft.



### Alternate Plan

December 2015 : If SkyWest has not committed to upgrading the RDD

- SFO route to the CRJ

- 200 by
December 1, 201 5

, RDD will contact United Airlines to assess interest in providing RDD

- SFO CRJ

- 200
service on a contract basis

.



### End of First Year of Service

March 201 6 : At the end of the first year of service, the revenue guarantee will be calculated based on the terms of the agre ement. If the service start date changes due to airline circumstances and/or equipment availability, the revenue guarantee contract term will change accordingly. This section addresses:



###  How the community will monitor the progress of the project



###  The plan/schedu le for timely completion of the project

# S ECTION 

# 6
S CHEDULE AND 

# M ONITORING

A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 18 R EDDING M UNICIPAL A IRPORT March 201 6 : If the load factor for the first 12 months

of service does not reach a level sa tisfactory to SkyWest, RDD will consider investing in supplementary marketing for an additional 12 months to help the service reach the potential passenger levels required for SkyWest success.



### M ONITORING 

### P ROGRAM

To ensure the success of SkyWest’s upgrade to regional jets , the monitoring program will include: service performance tracking, assessing the effectiveness of the marketing campaign, and determining the impact of the additional capacity on retention of catchment area passengers at RDD

.

The follow ing will be completed:



###  Review aircraft departures, enplaned passengers and load factors on a monthly basis. Airport data, U

. S

. DOT airline reported data and data obtained directly from the
airline will be used.



###  Average airfares will be reviewed on a quarte rly basis and compared and evaluated to prior quarters.



###  An updated true market estimate will be completed after a full year of U.S. DOT origin and destination data is available (estimated to be available July 2016 for the year ended March 31, 2016).A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM

R EDDING M UNICIPAL A IRPORT 

# A PPENDIX 

# A

L ETTERS OF 

# S UPPORT

A ppendix A includes letters of support for the City of Redding’s application to the U

. S

. DOT to maintain commercial air service in Redding by upgrading SFO service to regional jets. Support letters were submitted by SkyWest Airlines

, participants in the public

- private partnership and other members of the Redding community

. The letters of support are included on the following pages
of this Appendix A and are listed below.



### Airline SkyWest Airlines



### Public

- private partnership

C ity of Redding Economic Development Corporation of Shasta County



### Government
California State Senate, Senator Ted Gaines California Legislature, Asse mblyman Brian Dahle Shasta County City of Anderson City of Shasta Lake



### Businesses and Organizations

Bethel Church, Bill Johnson Bethel Church, Brian and Jenn Johnson Bethel Church, Kris Vallotton Bethel Church, Stephen De Silva Redding Bank of Commerce Shasta Regional Medical Center
Sierra Pacific Industries The Fly Shop This section addresses: Letters of support from SkyWest Airlines, members of the public

- private partnership, the
loca l business community, and

state government.

### “ ”



## July 28, 2014

Ms. Brooke Chapman Associate Director Small Community Air Service Development Program U.S. Department of Transportation 1200 New Jersey Ave., SE W86-307 Washington, DC 20590

RE: Docket DOT-OST-2014-0113

Dear Ms. Chapman,

I am writing in support for the air service proposal detailed in the Small Community Air Service Development Program grant application submitted by the City of Redding. The Redding Municipal Airport is critical to providing support to business, government, education and leisure travel to and from the region. Our community is in need of improved air service. The proposal to assist with the cost associated with Skywest’s transition from the 30 -passenger EMB-120 Turboprops to 50 passenger
CRJ -200 regional jets is essential in retaining passenger service at Redding Municipal Airport.

Shasta EDC recognizes that access to air services enhance the region’s competitive edge for business attraction, expansion and retention. Support of enhanced air service and assisting in Redding Municipal Airport’s expansion project has been an ongoing element of our business plan. The City of Redding and the entire region benefit when businesses can conveniently and cost-effectively transport executives and staff, and have greater access to clients.

Thank you for your consideration.

Sincerely,

Mark Lascelles President (T) 530.224.4920 (F) 530.224.4921 www.shastaedc.org 410 Hemsted Drive Suite 100 Redding, CA 96002