APPLICATION UNDER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT-OST-2014-0133 

SUMMARY INFORMATION1

All applicants must submit this Summary Information schedule, as the application 

coversheet, a completed standard form SF424 and the full application proposal on 

www.grants.gov. 

For your preparation convenience, this Summary Information schedule is located at 

http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/SCASDP

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

NUMBERING SYSTEM (DUNS) NUMBER, INCLUDING +4, EMPLOYEE IDENTIFICATION NUMBER 

(EIN) OR TAX ID.

Legal Sponsor Name: 

Name of Signatory Party for Legal Sponsor:

DUNS Number:

EIN/Tax ID:

B. LIST THE NAME OF THE COMMUNITY OR CONSORTIUM OF COMMUNITIES APPLYING: 

1.____________________________________________________ 

2.____________________________________________________ 

3.____________________________________________________ 

4.____________________________________________________ 

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

APPLICANT(S) AIRPORT(S) (ONLY PROVIDE CODES FOR THE AIRPORT(S) THAT ARE ACTUALLY 

SEEKING SERVICE).

1. 2.

3. 4.

 

1 Note that the Summary Information does not count against the 20-page limit of the SCASDP application.
DOES THE AIRPORT SEEKING SERVICE HOLD AN AIRPORT OPERATING CERTIFICATE ISSUED BY 

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

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

APPLICATION UNDER PART 139 IS PENDING.) 

Yes No (explain)

______________________________________________________________________________

______________________________________________________________________________ 

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

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

1. 2.

3. 4.

E. APPLICANT INFORMATION: (CHECK ALL THAT APPLY) 

Not a Consortium Interstate Consortium Intrastate Consortium

Community currently receives subsidized Essential Air Service

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

Service Development Program Grant

If previous recipient: Provide year of grant(s):_______________________________; and, 

the text of the grant agreement section(s) setting forth the scope of the grant project:

_________________________________________________________________________ 

_________________________________________________________________________ 

_________________________________________________________________________ 

_________________________________________________________________________ 

_________________________________________________________________________ 

F. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION NAMES) 

PUBLIC PRIVATE

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.
G. PROJECT PROPOSAL:

 1. GRANT GOALS: (CHECK ALL THAT APPLY) 

Launch New Carrier Secure Additional Service Upgrade Aircraft

First Service New Route Service Restoration

Regional Service Surface Transportation Professional Services2

Other (explain below)

2. FINANCIAL TOOLS TO BE USED: (CHECK ALL THAT APPLY) 

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

Start-up Cost Offset: offsetting expenses to assist an air service provider in setting up a 

new station and starting new service (for example, ticket counter reconfiguration)

Revenue Guarantee: an agreement with an air service provider setting forth a minimum 

guaranteed profit margin, a portion of which is eligible for reimbursement by the 

community 

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

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

case for new air service

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

counted as in-kind contributions only 

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

wing) services provided by third party ground handlers 

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

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

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

 

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

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

______________________________________________________________________________ 

______________________________________________________________________________ 

H. EXISTING LANDING AIDS AT LOCAL AIRPORT: 

Full ILS Outer/Middle Marker Published Instrument Approach 

Localizer Other (specify)

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

LINE DESCRIPTION SUB TOTAL TOTAL AMOUNT

1 Federal amount requested

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-Kind contribution

5a 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. IS THIS APPLICATION SUBJECT TO REVIEW BY AN AFFECTED STATE UNDER EXECUTIVE 

ORDER 12372 PROCESS? 

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

Process for review on (date) _____________. 

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

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

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

(IF “YES”, PROVIDE EXPLANATION) 

No Yes (explain)

______________________________________________________________________________

______________________________________________________________________________ 

APPLICATION CHECKLIST

INCLUDED? ITEM

For Immediate Action

Determine Eligibility

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

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

and the Authorized Organization Representative (AOR) is current.

For Submission by 5:00 PM EDT on July 31, 2014

Communities with active SCASDP grants: notify DOT/X50 of intent to terminate 

existing grant in order to be eligible for selection in FY2014 

Complete Application for Federal Domestic Assistance (SF424) via www.grants.gov

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

Application of up to 20 one-sided pages (excluding any letters from the 

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

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

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

• A detailed description of the funding necessary for implementation of the 

community's project. 

• An explanation of how the proposed project differs from any previous projects 

for which the community received SCASDP funds (if applicable). 

• Designation of a legal sponsor responsible for administering the program.

• A motion for confidential treatment (if applicable) – see Appendix D below.
Docket DOT – OST – 2014 – 0113

Proposal for A Grant Under The

Small Community Air Service 

Development Program

Submitted by

Chattanooga Airport

DUNS # 556328334

Congressional District #3
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 2

Table of Contents

1. Proposal Overview ............................................................................3

Airport Name and Contact Information................................................................3

Legal Sponsor of Proposal .................................................................................3

Community Partner for Application .....................................................................3

Grant Eligibility ................................................................................................3

Project Description ...........................................................................................3

CHA Experiences High Fares Causing Traffic Passenger Leakage.............................4

2. CHA Service Area and Vibrant Economy...............................................7

CHA Service Area .............................................................................................7

The Chattanooga Local Economy is Diverse and Growing.......................................8

Strong Higher Education ...................................................................................8

3. CHA Air Service Deficiency ............................................................... 10

Addressing the Air Service Deficiency: Northeastern US Air Service Access............ 11

The Fare Issue: CHA vs. ATL and BNA .............................................................. 12

Current Grant Request Differs from SCASDP Grant Award in FY 2004 ................... 13

4. SCASD Grant Administration Plan ..................................................... 15

Requested Term of Grant ................................................................................ 15

Funding and Revenue Sources ......................................................................... 15

Revenue Guarantee ........................................................................................ 15

Marketing and Advertising Plan ........................................................................ 16

In-Kind Funding ............................................................................................. 16

Previous Air Service Development Efforts .......................................................... 16

Ensuring Self-Sufficiency................................................................................. 17
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 3

1. Proposal Overview

Airport Name and Contact Information

Chattanooga Airport (CHA)

Terry L. Hart

President and CEO

1001 Airport Road, Suite 14

Chattanooga, TN 37421

Thart@chattairport.com

423-855-2202

Legal Sponsor of Proposal

The Chattanooga Metropolitan Airport Authority is the official legal sponsor of the Small 

Community Air Service Development Program application.

Community Partner for Application

The Chattanooga Area Chamber of Commerce joins the Airport in the submission and 

support of this application, and is participating in the community matching portion of the 

funding request for the grant.

Grant Eligibility

The Chattanooga Airport is fully eligible based on the criteria put forth in the Department of 

Transportation Docket DOT-OST-2014-0113.

Project Description

The plan for grant implementation is to address considerable air service deficiencies due to 

a lack of northeastern US access from the greater Chattanooga region. Specifically, there is 

a strong community of interest between the Chattanooga region and the New York City 

metropolitan area, and the objective of this grant application is to gain nonstop access to 

the NYC metro region. 
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 4

CHA is a market characterized by high fares and suffers from a lack of capacity due to its 

proximity to Hartsfield – Jackson Atlanta International Airport (ATL), which is approximately 

a two hour or 124 mile drive from Chattanooga Airport. However, due to severe traffic 

congestion in the greater Atlanta metropolitan region, this drive time can be closer to three 

to four hours since ATL is on the south side of the metro area. Chattanooga region residents 

prefer to utilize their hometown airport, and the objective of this grant application is to

increase ridership at CHA and to diversify the travel options that the local community has 

for business and leisure travelers at CHA.

The northeastern US is a major market for the Chattanooga Airport, capturing over 26% of 

all passengers traveling to and from CHA. This is a top region for CHA passenger traffic, and 

increased capacity would be a great benefit to the community. Nonstop service to/from the 

New York City metro region would allow the community to utilize local air service, rather 

than contributing to the passenger leakage that opts to travel to ATL for increased air 

service options. 

CHA Passenger and Revenue Distribution

CY 2013

CHA Experiences High Fares Causing Passenger Traffic Leakage

In addition to lack of nonstop options at CHA compared to regional competing airports, CHA 

experiences fares that are significantly higher than both Atlanta and Nashville, the two 

primary competing airports in the region for CHA passenger traffic. Additionally, CHA 

average one way gross fares are approximately 10% higher than the National Average as of 

CY 2013.
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 5

CHA Gross Fare Premium vs. Regional Airports

and National Average

The presence of higher fares than other regional airports exacerbates the air service 

deficiency at CHA, and increased capacity with an emphasis on the New York City metro 

region may bring greater fare discipline to the market due to increased competition.

A review of the CY 2013 population-to-O&D passenger traffic for CHA and competing 

regional airports ATL and BNA further illustrates the air service deficiency that exists in 

Chattanooga. It is clear that significant passenger traffic leakage exists at CHA, and the 

intent of this grant application is to curtail such leakage in addition to increasing access to 

the national transportation system for the greater Chattanooga community.

CHA Passenger Traffic/Air Service Deficiency vs. ATL/BNA

CY 2013

Gross Fare Comparison Q1 2013 Q2 2013 Q3 2013 Q4 2013 FY 2013

CHA Avg. OW Gross Fare $253.07 $255.86 $257.48 $228.12 $248.37

ATL Avg. OW Gross Fare $208.48 $214.57 $233.84 $212.03 $217.00

BNA Avg. OW Gross Fare $215.86 $218.24 $227.69 $213.21 $218.78

Nat'l Avg. OW Gross Fare $223.33 $224.18 $233.16 $225.74 $226.64

CHA % Premium vs. ATL 21.4% 19.2% 10.1% 7.6% 14.5%

CHA % Premium vs. BNA 17.2% 17.2% 13.1% 7.0% 13.5%

CHA % Premium vs. Nat'l Avg. 13.3% 14.1% 10.4% 1.1% 9.6%

CHA - MSA Population (2013 EST) 541,744

ATL - MSA Population (2013 EST) 5,542,942

BNA - MSA Population (2013 EST) 1,757,912

Total Region Population 7,842,598

CHA 2013 O&D Passengers 597,958

ATL 2013 O&D Passengers 25,907,349

BNA 2013 O&D Passengers 8,085,614

Total Region 2013 O&D Passengers 34,590,921

Ratio of Region O&D To Population 4.41

CHA Population x US O&D Ratio 2,389,441

Current CHA Capture: 597,958

Net CHA Traffic / Service Deficiency: 1,791,483
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 6

The grant funding request is for $500,000 with a community match of $250,000, for a total 

of $750,000 in cash contributions to aid in risk mitigation for increased air service access 

to/from the New York City metro region, and by extension the northeastern US. Many 

letters of support from the community are attached, illustrating the high level of support for 

this proposal. The Chattanooga Metropolitan Airport Authority respectfully appreciates the 

Department giving consideration to its grant application. 

In addition to 

NYC metro 

region access, 

other 

northeastern US 

cities can be 

easily accessed 

with CHA-NYC 

region nonstops
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 7

2. CHA Service Area and Vibrant Economy

CHA Service Area

The Chattanooga Airport is a critical component to the economic vibrancy of the region, 

which is characterized by approximately 650,000 people within a forty five minute drive 

time and 1,100,000 people within a seventy five minute drive time. The closest commercial 

airports that provide higher levels of air service than CHA include Hartsfield – Jackson 

Atlanta International Airport (ATL), Nashville International Airport (BNA), McGhee Tyson 

Airport (TYS), and Birmingham – Shuttlesworth International Airport (BHM). However, these 

airports range between 2.0 – 3.0 hours away from Chattanooga, and make for a 

cumbersome drive for all travelers, both business and leisure. CHA is the more efficient and 

logical option. 

CHA Primary and Extended Service Area
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 8

The Chattanooga Local Economy is Diverse and Growing

The economy within the greater Chattanooga service area is extremely prosperous and 

recent developments indicate that the region is positioned for significant growth over the 

next several years. Automotive manufacturer Volkswagen Group of America announced on 

July 14, 2014 that it plans to expand the Chattanooga manufacturing operations by adding 

an additional manufacturing line and creating the National Research and Development and 

Planning Center of Volkswagen Group of America. This commitment comes with a $900 

million investment in its expansion and the creation of 2,000 new jobs for the greater 

Chattanooga region. Chattanooga is the only U.S. based manufacturing facility for 

Volkswagen, demonstrating the level of dedication to the community.

This exciting new development is expected to drive significant new air service needs, as it is 

expected that additional suppliers will relocate to the region to increase productivity and 

ease the supply chain needs of Volkswagen. The Chattanooga Chamber anticipates that 

2,000 new supplier jobs will be created as a result of the Volkswagen expansion. In addition 

to the large Volkswagen presence and expansion in Chattanooga, the region is host to 

numerous other important businesses. Representative companies that have a significant 

presence in the region include Amazon.com, BlueCross BlueShield of Tennessee, McKee 

Foods Corporation, The William Wrigley Jr. Company, UNUM, and Chattem (Sanofi-Aventis). 

More than 500 jobs and $200 million in combined investment announced over the last year 

by Coca Cola Bottling, Chattem, Mahindra, Sun Pharma, and Paris based Plastic Omnium.

Additionally, nearby Dalton, GA is known as the “Carpet Capital of the World” and is home 

to over 100 carpet manufacturing plants. Shaw Floors, Mohawk Industries, and Tandus 

Flooring are just a few of the many organizations located in the region that rely on CHA for 

air service needs.

Strong Higher Education

The Chattanooga region is home to several educational institutions of higher education, 

including the second largest University of Tennessee campus in the state. Over 30,000 

students were enrolled in the various schools as of Fall 2013. The table on the following 

page illustrates a breakdown of the enrollment by school.
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 9

Higher Education in CHA Region

CHA air service is critical for both the local businesses and the educational institutions in the 

region. Without convenient and efficient air service at CHA, these organizations will need to 

look elsewhere for their travel needs, ultimately having a negative economic impact on the 

greater Chattanooga area. A Small Community Air Service Development Program grant 

award will help ensure that the local community can further utilize Chattanooga Airport for 

their travels. 

Colleges and Universities Fall 2013 Enrollment

The University of Tennessee at Chattanooga 11,674

Chattanooga State Tech. Community College 9,910

Lee University 4,922

Southern Adventist University 3,127

Bryan College 1,700

Covenant College 1,173

Tennessee Temple University 300

Belhaven University 130

TOTAL 32,936

Source: Individual Schools
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 10

3. Air Service Deficiency at CHA

While ATL and BNA clearly have a greater absolute number of passengers traveling to/from 

the New York City metro region, the following tables illustrate that the percentage of total 

passengers to/from the New York City metro region at CHA is similar to the percentages at 

ATL and BNA. The big difference, however, is that no nonstop service exists at CHA while 

extensive nonstop flights are present at both ATL and BNA, as can be seen from the 

currently scheduled departures and seat capacity for CY 2014 below.

CHA NYC Region O&D Compared to Regional Airports

CY 2013

This is a clear indication that if nonstop flights existed between Chattanooga and the New 

York metro region, there is a strong likelihood that they will be self-sufficient and a 

profitable route for whichever carrier flies between the two regions. Passenger leakage 

Market CHA ATL BNA Total

LGA 20,325 1,566,371 342,598 1,929,294

EWR 10,518 560,806 192,108 763,432

JFK 3,144 202,488 32,809 238,441

HPN 2,422 130,468 4,380 137,270

Total NYC Region 36,409 2,460,133 571,895 3,068,437

Total Annual O&D Pax 597,958 25,907,349 8,085,614 34,590,921

% NYC Region O&D Pax 6.1% 9.5% 7.1% 8.9% Source: Aviation DataMinerTM analysis of DOT/BTS O&D Survey 

Carrier Dest 2014 Scheduled 

Departures

2014 Scheduled 

Seat Capacity

American 576 37,440

LGA 576 37,440

Delta 13,802 1,781,307

EWR 3,666 422,319

HPN 2,227 160,246

JFK 2,104 317,653

LGA 5,805 881,089

Southwest 2,141 283,069

LGA 2,141 283,069

United 1,994 117,632

EWR 1,994 117,632

Total 18,513 2,219,448

Carrier Dest 2014 Scheduled 

Departures

2014 Scheduled 

Seat Capacity

American 1,737 107,399

LGA 1,737 107,399

Delta 1,909 139,170

JFK 357 27,088

LGA 1,552 112,082

Southwest 1,563 223,541

EWR 677 96,843

LGA 886 126,698

United 1,842 93,460

EWR 1,842 93,460

Total 7,051 563,570

ATL

BNA

Source: Aviation DataMinerTM analysis of InnovataFlight Schedules 
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 11

would be reduced and a portion of the passengers currently making the onerous drive to 

ATL or BNA would opt for the nonstop service at CHA.

The deficiency is clear: A total of over 25,000 annual departures and 2.8 million annual 

seats are scheduled at ATL and BNA for CY 2014, while zero annual departures and seats 

are scheduled at CHA for this same time period.

The following table and map are representative of the total annual departures and seat 

capacity available from network carriers at CHA:

CHA Scheduled Network Carrier Departures and Seats

CY 2014

Addressing the Air Service Deficiency: Northeastern US Air Service Access

The air service deficiency has been clearly outlined, with the Chattanooga community 

having a strong connection with the New York City metro region but suffering from indirect 

routings due to a lack of nonstop air service access. The proposed solution for this 

deficiency is nonstop service to any of the three primary NYC metro airports: LGA, JFK, or 

EWR. Each of these airports, and the airlines that serve them, have excellent connectivity to 

the greater northeast region including upstate NY and New England. Not only would 

nonstops to the New York City metro region alleviate a deficiency for NYC region travelers, 

but also aid in more efficient routings to/from the northeastern US. 

Carrier Dest 2014 Scheduled 

Departures

2014 Scheduled 

Seat Capacity

American/US Airways 3,301 161,006

C LT 1,956 97,722

DCA 308 15,400

DFW 686 31,678

ORD 351 16,206

Delta 3,479 220,189

ATL 2,889 190,689

DTW 590 29,500

Total 6,780 381,195

Source: Aviation DataMinerTM analysis of Innovata Flight Schedules 
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 12

While CHA does have nonstop flights to Delta’s hub in ATL and the American/US Airways 

hub in CLT, these flights operate with very high load factors which make it difficult for both 

leisure and business travelers to find available seats. As the graph below indicates, the 

Delta CHA-ATL nonstops operate with an annual load factor of almost 83%, with several 

months being 85-90%. Furthermore, the American/US Airways CHA-CLT nonstops operate 

with similarly high load factors, averaging 80% on an annual basis. 

Delta CHA-ATL and American/US Airways CHA-CLT

Load Factor Performance

Apr 2013 – Mar 2014

So while a look at the CHA air service map may seem as though there is adequate access to 

the northeastern US via both ATL and CLT, there is actually quite a challenge accessing this 

region due to high load factors on the current flights. With limited available capacity on the 

current flights, direct access to the northeastern US would be beneficial for the Chattanooga

community.

The Fare Issue: CHA vs. ATL and BNA

As has been previously illustrated from an overall market perspective, CHA suffers from 

higher fares than its primary competing airports, ATL and BNA. During CY 2013, CHA had 

higher average one way gross fares of 14.5% vs. ATL and 13.5% vs. BNA from a market 

perspective. However, it is instructive to review the fares for the New York City metro 

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

DL - ATL US - CLT

Avg. Load Factor 

Performance

DL ATL: 82.7%

US CLT: 80.0%

Source: Aviation DataMinerTM analysis of DOT/BTS Form 41 Traffic
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 13

region markets and other top northeastern US markets from these same airports to get an 

indication of how much of a premium CHA passengers have been paying on average 

compared to ATL and BNA.

The following table highlights the fact that for the New York City markets and larger 

northeastern US markets, CHA average gross one way fares were approximately 19% 

higher than ATL and 26% higher than BNA. This is a clear representation of an air service 

deficiency at CHA, and increased capacity may aid in providing fare discipline in these 

popular CHA markets.

CHA vs. ATL and BNA Average Gross One Way Fares

– NYC and Top Northeast Markets

CY 2013

Current Grant Request Differs From SCASDP Grant Award in FY 2004

The Chattanooga Metropolitan Airport Authority were recipients of a $750,000 Small 

Community Air Service Development Program grant award in FY 2004. This request differs 

significantly from FY 2004 award, as the prior grant award was aimed specifically at 

improving westbound connectivity at CHA with the specific target of American Airlines’ 

Dallas – Ft. Worth (DFW) hub. The purpose of the current grant proposal is materially 

Market CHA ATL BNA

CHA % 

Higher/Lower 

 vs. ATL

CHA % 

Higher/Lower 

 vs. BNA

LGA $217.12 $202.60 $211.20 7.2% 2.8%

EWR $283.46 $254.89 $208.62 11.2% 35.9%

JFK $233.92 $204.82 $213.31 14.2% 9.7%

HPN $262.08 $235.62 $235.23 11.2% 11.4%

BOS $246.61 $216.46 $216.60 13.9% 13.9%

PHL $325.03 $216.47 $197.90 50.2% 64.2%

BDL $285.69 $244.06 $225.19 17.1% 26.9%

PVD $256.23 $241.90 $217.80 5.9% 17.6%

ROC $263.73 $211.50 $250.16 24.7% 5.4%

SYR $280.13 $260.74 $275.01 7.4% 1.9%

MHT $289.18 $230.96 $200.89 25.2% 44.0%

PWM $268.95 $250.54 $249.78 7.3% 7.7%

Total $245.84 $207.27 $195.87 18.6% 25.5% Source: Aviation DataMinerTM analysis of DOT/BTS O&D Survey 
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 14

different from the previous award and is aimed specifically at increasing air service access 

to the New York City metropolitan region and the northeastern US. 

It is important to note that American Airlines entered the CHA market with DFW nonstop 

service in August 2005 and has been serving the CHA-DFW market ever since on a selfsustaining basis. American’s DFW nonstops are a vital aspect to air travel at CHA, as would 

be the case for New York City metro nonstops providing much needed access to the 

northeastern US.
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 15

4. SCASD Grant Administration Plan

Requested Term of Grant

The Chattanooga Metropolitan Airport Authority respectfully requests that the term of the 

grant be for two years from the start of service. 

Funding and Revenue Sources

The amount requested in this proposal is $500,000. The matching portion will come from 

two sources:

 The Chattanooga Area Chamber of Commerce will contribute an additional 40% or

$200,000 in cash to be utilized for revenue guarantee purposes. 

 Chattanooga Airport will contribute $50,000 in airport revenue, which will not be 

used for the revenue guarantee portion of the project and will only be used for 

marketing activities. 

Revenue Guarantee

The primary purpose of the revenue guarantee portion of the grant funding is to offset the 

risk of the carrier in entering the market with NYC region nonstop service. The agreement 

will be based on a specific contract that details the revenues per flight and the 

determination of how the revenues are to be computed. The airline will agree to operate a 

specific pattern of flights.

Specific targets for air service will include Delta LGA/JFK, United EWR, American LGA/JFK, or 

JetBlue JFK.

Category SCASD 

Grant

Community 

 Funds

TOTAL

Revenue Guarantee $450,000 $200,000 $650,000

Marketing/Advertising Support $50,000 $50,000 $100,000

TOTAL $500,000 $250,000 $750,000
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 16

Marketing and Advertising Plan

The airport and community understand that a critical component to ensuring the successful 

start-up period for new service or increased capacity will be a comprehensive marketing and 

advertising plan. This will include:

 Extensive usage of social media outlets, including Facebook, Twitter, Instagram, and 

Pinterest in order to build awareness of the new air service

 Print media advertisements in local publications

 Billboards along major roadways to create awareness within the community

 Television and radio advertisements in order to reach as many people in the 

community as possible

 Banner advertisements on the airport’s website and through the targeted ad network 

to reach customers by their online search habits

 Utilization of extensive networking resources to spread the word, including public 

speaking to civic and other groups

In-Kind Funding

In addition to the cash contributions from the community, the Chattanooga Airport will offer 

in-kind incentives in the form of a landing fee waiver for six months from the start of new 

service. This in-kind incentive is valued at $50,000.

Previous Air Service Development Efforts

Chattanooga Airport has been very active in its air service development efforts over the last 

three years. The actions taken include:

 Participation in Air Service Development Conferences such as ACI Jumpstart

and Network USA.
 Proposal under the Small Community Air Service Development Program

 Docket DOT – OST – 2014 – 0113 17

 In the last 36 months, CHA has met at the corporate airline headquarters with 

several carriers, including Delta and United Airlines to discuss potential 

opportunities. The meetings were productive and the airlines receptive to 

meeting with the airport. This is part of the ongoing relationship that CHA has 

built with airlines and is helpful for the purpose of updating the carriers on 

developments in the greater Chattanooga community that may impact air 

service opportunities. 

 CHA has been diligent in updating its five year Air Service Master Plan, which 

was last completed in January 2013 for years 2013 – 2017. The purpose is to 

outline current airline performance and future opportunities. It is an excellent 

tool for the airport to understand air service economics, and if concerns exist 

for them to address them proactively.

 The airport works closely with an aviation consultancy to keep abreast of 

current trends at the airport, airline performance metrics, and potential 

opportunities or threats to air service at CHA.

Ensuring Self-Sufficiency

CHA is fully aware that there can be extenuating circumstances which have the potential to 

impact ridership on a new route. Just as the airport has been diligent in its air service 

development efforts described above, they will be equally as attentive to the necessity of 

the new service to be successful. To this end, the airport plans to take the following actions:

 Stay in close contact with the airline on a monthly basis to fully communicate the 

performance of the new service, and to swiftly address any issues that may arise 

that are having a negative impact on passenger traffic and/or financial performance

 Re-focus targeted marketing and advertising if it is deemed necessary with the 

objective of increasing ridership
 

1 Cameron Hill Circle

Chattanooga, TN 37402

www.bcbst.com

July 25, 2014

Brooke Chapman, Associate Director

Small Community Air Service Department

Office of Aviation Analysis

U.S. Department of Transportation

1200 New Jersey Ave., SE

Washington, DC 20590

Room W86-307

Dear Ms. Chapman,

On behalf of BlueCross BlueShield of Tennessee, Inc., I am writing in support of the Small 

Community Air Service Grant application that has been submitted by the Chattanooga 

Metropolitan Airport Authority (CHA).

The purpose of the airport’s application is to address air service deficiencies and increase 

access to the national transportation system for the region. BlueCross BlueShield of Tennessee, 

Inc. is an economic driver for the city, and a staunch supporter of growth in the local 

community, and as such, we understand the need for increased air service options at the 

Chattanooga Airport. As our community continues to grow and our economy continues to 

flourish, it is my most sincere belief that any new service will achieve self-sufficiency, as our 

track record has shown in the past with attracting air service. 

We urge the Department of Transportation to give the Chattanooga Metropolitan Airport 

Authority’s application favorable consideration. Please feel free to contact me with any 

questions. 

Sincerely,

William M. Gracey

President & CEO

Bill Gracey

President & CEO

BlueCross BlueShield of Tennessee






PO Box 2275

Cleveland TN 

37320-2275

423-472-6587

Direct line

423-728-0804

FAX:

423-472-2019

July 29, 2014

Brooke Chapman

Associate Director

Small Community Air Service Department

Office of Aviation Analysis

U.S. Department of Transportation

1200 New Jersey Ave., SE

Washington, DC 20590

Room W86-307

Dear Ms. Chapman,

On behalf of the Cleveland/Bradley Chamber of Commerce, I am writing in support 

of the Small Community Air Service Grant application that has been submitted by 

the Chattanooga Metropolitan Airport Authority (CHA).

The purpose of the airport’s application is to address air service deficiencies and 

increase access to the national transportation system for the region. Our chamber is

an economic driver for the City of Cleveland and Bradley County, and a staunch 

supporter of growth in our region, and as such, we understand the need for increased 

air service options at the Chattanooga Airport. With the recent announcement of the 

expansion of the VW automobile assembly plant in Chattanooga and the $2 billion 

Wacker Polysilicon facility under construction here in Bradley County, our region 

will continue to grow and our economy will continue to flourish. It is my most 

sincere belief that any new service will achieve self-sufficiency, as our track record 

has shown in the past with attracting air service. 

We urge the Department of Transportation to give the Chattanooga Metropolitan 

Airport Authority’s application favorable consideration. Please feel free to contact 

me with any questions. 

Sincerely,

Gary L. Farlow

President & CEO

Cleveland / Bradley Chamber of Commerce