Prepared for:

U.S. Department of Transportation

Prepared by: Burlington International Airport DUNS Number: 156181992 Tax Identification Number: 03-6000410 Two Digit Congressional District Codes: 00 Burlington International Airport 

# Proposal under the Small Community Air Service

Development Program
Docket DOT-OST-2012-0069

## 1 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069

## 2 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069



## Table of Contents Summary ...........................................................................................................................................3 BTV Market Area ...............................................................................................................................3 Regional Economy..................................................................................................................................... 4 Higher Education in the Greater Burlington Area..................................................................................... 4 Four Season Regional Tourism.................................................................................................................. 5 Air Service Overview ..........................................................................................................................6 Existing Air Service .................................................................................................................................... 6 Air Service Trends ..................................................................................................................................... 7 Air Service Development Efforts............................................................................................................. 10 High Airfares at BTV Resulting in Passenger Leakage ............................................................................. 10 Relationship Between Plattsburgh International Airport and BTV......................................................... 11 New Air Service to the Southeastern United States...........................................................................11 Proposed New Route .............................................................................................................................. 11 Goals........................................................................................................................................................ 13 Airline Support ........................................................................................................................................ 13 Atlanta (ATL) Route Feasibility Study via Delta Airlines.......................................................................... 13 Charlotte (CLT) Route Feasibility Study via US Airways .......................................................................... 14 Strategic Incentive and Support Plan ................................................................................................15 Revenue Guarantee ................................................................................................................................ 16 Marketing Plan........................................................................................................................................ 16 Landing Fee Waiver................................................................................................................................. 16 Project Implementation ...................................................................................................................17 Public/Private Partnerships..................................................................................................................... 17 Project Funding ....................................................................................................................................... 17 Project Timeline ...................................................................................................................................... 17 Grant Amendments/Alternative Strategies.......................................................................................18 Conclusion.......................................................................................................................................19 Appendix A: Letters of Support.........................................................................................................20 Appendix B: Required Summary Information ...................................................................................27

## 3 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 

# Executive Summary Burlington International Airport (BTV) is proposing a Small Community Air Service Development Grant in the amount of $450,000 to supplement a community-based cash contribution of $45,000, airport cash contribution of $50,000 and airport in-kind incentives valued at $85,593. The goal of such a proposal is to provide both a minimum, short term (12 to 18 month) revenue guarantee program as well as amarketing program aimed specifically at the proposed new air service to either Atlanta HartsfieldJackson International Airport (ATL) on Delta Airlines (or regional affiliate) or Charlotte Douglas International Airport (CLT) on US Airways (or regional affiliate). Including airports in New England and New York, BTV is currently the largest airport without non-stop service to ATL or CLT. Such a service would provide Burlington and the Northern New England region with non-stop air service to cities which already have a large base of local traffic, as well as providing connecting opportunities to cities in the Southeastern United States, the Caribbean and Latin America. BTV has been in discussions with both Delta Airlines and US Airways about the proposed services over the course of a few years, both of whom have shown considerable interest in connecting BTV with their Southeastern hubs. Since both Delta and US Airways currently operate from BTV to hubs in the Northeastern U.S., both airlines have been able to establish a customer base, therefore minimizing the risk associated with operating a new non-stop service from BTV. This differs from a new entrant airline which would incur considerably more risk. Service at BTV peaked in 2008, but has since declined considerably by 15.29% in 2012 in part due to the economic recession that began in 2008, high jet fuel costs and airline consolidation. Another issue facing passengers at BTV is the high costs of airfare, which is among the highest in New England. As a result, BTV has experience significant leakage to other airports such as Albany (ALB), Manchester (MHT) and Boston Logan (BOS) all of which offer a much greater array of air service through both traditional and low cost carriers. BTV is the largest airport in the state of Vermont and also serves parts of Northern New York and Northern New Hampshire. With a core market population of 302,000 residents and an extended market population of approximately 551,000 residents, excluding the Canadian population that also falls into BTV’s catchment area, the Airport is well positioned to accept additional and profitable air service. 

# BTV Market Area BTV is located in Chittenden County along Lake Champlain in the north-west section of Vermont (VT). It’s approximately 150 miles north-east of Albany, NY, 150 miles north-west of Manchester, NH and 108 miles south-east of Montreal, CA. As previously mentioned BTV serves a primary catchment area that contains approximately 50% of the state’s total population representing a core market of 302,000 residents. The extended areas of influence represent a total population of approximately 551,000,

## 4 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 excluding the potential population that can possibly be drawn upon from the Province of Quebec in Canada. BTV Primary and Expanded Service Areas:

Source: Created by the Boyd Group International



## Regional Economy BTV serves as the primary gateway to Vermont’s largest city and metro area, Greater Burlington, which is the industrial, tourist and financial center of the state. This region of the Vermont supports nearly one-third of the state’s employment with 108,520 employees. Greater Burlington also boasts a low unemployment rate of 4.2%, and an average annual salary of $45,720, compared to the national average of $44,410 and national unemployment rate of 9.2% (2010, U.S. Bureau of Transportation Statistics). Top employers in the Burlington Area include Nationwide Insurance, Fletcher Allen Healthcare, G.E. Healthcare, University of Vermont, I.B.M., General Dynamics, Green Mountain Coffee Roasters, Dealer.com and Ben & Jerry’s.



## Higher Education in the Greater Burlington Area BTV serves as the primary air facility for the many colleges and universities that are located in and around Burlington, VT. The total student enrollment of the seven largest universities and colleges equate to over 33,000. Of these students, a large amount are either undergratuate out-of-state or

## 5 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 graduate students, signifying the need for ample air service for both students and their relatives during prime travel times such as graduations and school vacations. In addition, the staff and faculty of the these institutions make them some of the states top employers. Greater Burlington Student Enrollment Statistics:



##  Four Season Regional Tourism In 2007, the Economic and Policy Resources (EPR) conducted a study on behalf of the Lake Champlain Regional Chamber of Commerce to study the value of the Vermont tourism industry to the state’s economy, presenting the following findings:

 Visitors made an estimated 14.3 million trips to Vermont
 Direct visitor spending totaled $1.615 billion
 Visitor spending (direct and indirect) supports more than 37,490 jobs
 Tourism added $206.9 million in tax and fee revenues to the state treasury The EPR study found that “Vermont is more dependent that the national average on visitor spending, with some sectors like the restaurant, travel services and retail businesses being 2-3 times more dependent on visitor spending than the national average. Without a vibrant tourism economy, many small businesses would likely fail.” While it is difficult to determine how many visitors to both Vermont and the remaining BTV service area fly into BTV, it is safe to say that the success of the Airport is vital in both stabalizing and developing Vermonts tourism industry. While all seasons bring visitors to the region, the winter ski industry is the most recognized around the globe. Excluding the smaller ski resorts that dot the hills and mountains of the BTV service area, the exhibit below illustrates the well known ski resorts where BTV is the closest/primary commercial airport.

## 6 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069

Popular Ski Resorts with BTV as the Closest/Primary Commercial Airport



### Bolton Valley 21.3 38 mins Burke Mountain 87.6 1 hour 58 mins Jay Peak 67.2 1 hour 32 mins Mad River Glen 36.1 59 mins Smugglers' Notch 33.2 57 mins Stowe Mountain 41.7 58 mins Sugarbush 43.3 1 hour 1 min Killington 91.3 1 hour 53 mins Pico Mountain 91.3 1 hour 53 mins Titus Mountain 110 2 hours 18 mins Whiteface Mountain 66.7 2 hours 8 mins Source: Google Maps and Directions 

### Ski Resort Distance (miles) Travel time



# Air Service Overview

 Existing Air Service Excluding the seasonal winter service by Porter Airways to Toronto, four air carriers currently serve BTV offering non-stop service to ten destinations located within the eastern United States. According to the DOT’s Bureau of Transportation Statistics, excluding international passengers, the Airport recorded 635,036 enplanements with an average load factor of 78.87% in 2011. As of June 2011, a variety of aircraft operate out of BTV, the largest being the Airbus A320 operated by JetBlue Airways, capable of accommodating 150 passengers, and the smallest being a Bombardier Dash 8 operated by US Airways, capable of accommodating 38 passengers. As demonstrated in the figure below, BTV air service is focused in the Northern United States. One of the primary issues with the current air service is its reliance on airports serving a few major metropolitan areas. One such example is the Northeast Metropolitan area consisting of New York City, Philadelphia and Washington D.C. These three cities are among the busiest centers of air traffic in the world and are subject to numerous delays, such as air traffic congestion and weather delays, which results in significant delays as 27 of the 39 daily departures, and 1,762 of the 2,460 daily seats are destined to those airports.

## 7 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 Route Map Showing Scheduled Passenger Air Service from BTV – June 2011:

Source: Diio Market Intelligence, Schedule Mapper

BTV Daily Air Service Schedule Including Equipment Type and Available Seats per Day (June 2012):

New York – LGA (Ends July 10, 2012)4 Daily DH8 148 Philadelphia – PHL 5 Daily Emb 175/CRJ 310 Washington D.C. – DCA 3 Daily Emb 170/175 218 Detroit – DTW 5 Daily CRJ 250 New York – LGA 4 Daily CRJ/CR7/CR9/ERJ 190 New York – JFK 4 Daily A-320/Emb 190 450 Orlando – MCO 1 Daily Emb 190 100 Porter Toronto – YTZ (Seasonal) 0 Daily DH4 0

Chicago-O’Hare – ORD 5 Daily ER4/CR7 298 Cleveland – CLE 1 Daily CRJ 50 Newark – EWR 4 Daily DH4/ERJ 248 Washington D.C. – IAD 3 Daily DH4/ERJ 198 39 Daily 2,460 Source: Diio Market Inteligence, Bank Structure Frequency Equipment Type Available Seats/Day U.S. Airways

Delta
JetBlue

United/Continental Airline Destination - IATA Code

BTV currently only has service to four of its top 10 O&D markts and only six of its top 20. As noticed in the exhibit below, a large portion of the top 20 O&D markets are to destinations in the Florida and the Southeast, signifying the need for air service to a hub airport in the Southern United States.

## 8 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 Top Markets Served from BTV – 2011:

1 New York – JFK, LGA, EWR 96,290 Y 2 Washington D.C. – DCA, IAD 44,097 Y 3 Orlando – MCO 40,581 Y 4 Chicago – ORD 20,428 Y 5 San Francisco – SFO 18,034 N 6 Fort Lauderdale – FLL 17,587 N 7 Tampa – TPA 15,208 N 8 Los Angeles – LAX 14,522 N 9 Denver – DEN 13,275 N 10 Atlanta – ATL 12,866 N 11 Philadelphia – PHL 11,524 Y 12 Charlotte – CLT 10,912 N 13 Raleigh-Durham – RDU 10,791 N 14 Las Vegas – LAS 10,145 N 15 Seattle-Tacoma – SEA 9,954 N 16 Detroit – DTW 9,262 Y 17 Minneapolis-St. Paul – MSP 9,145 N 18 Phoenix – PHX 9,116 N 19 Baltimore – BWI 8,803 N 20 Fort Meyers – RSW 8,503 N 391,043 Rank Market Enplaned Passengers/Year Nonstop Service

from BTV

Source: Diio Market Inteligence, US DOT O&D Airport Report



## Air Service Trends Between 2000 and 2008, BTV experienced a significant growth in passenger enplanements, an increase of 467,082 passengers per year, or 62.57%. Due to relatively high elasticity between available airline seats and passenger enplanements, BTV recorded a similar increase in the number of available seats from 2000 to 2008 of 53.07%. BTV recorded a decrease in passenger enplanements for both 2009 and 2010, with a decrease of 106,976 passengers per year or a decrease of 14.33%. Surprisingly, during the same period the number of available seats decreased at a faster rate of 20.04%, signifying that even though the number of available seats from BTV is decreasing, the number of passenger enplanements is decreasing at a slower rate.

## 9 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 BTV Total Passengers by Year:

Source: US DOT, Bureau of Transportation Statistics While the average load factors at BTV are slightly lower than that of the national average, they continue to remain strong, signifying that even with fewer available seats, passenger demand is stable.

BTV Average Load Factor by Year:

Source: US DOT, Bureau of Transportation Statistics On July 10, 2012 US Airways will end its service to New York’s LaGuardia Airport (LGA) as a result of the Airlines recent slot swap with Delta Airlines. At the current schedule, BTV will lose 148 seats per day, or 54,020 available seats, from Burlington. Although Delta Airlines has picked up the LaGuardia service, it was done so at the expense of service to New York’s JFK (JFK) Airport. The benefit is that the loss of the

## 10 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 LaGuardia route gives US Airways additional capacity, increasing the feasibility of additional service in the future.



## Air Service Development Efforts BTV Airport staff have been very aggressive over the past decade in attempting to attract air service for the region. Each year, a BTV representative is present at multiple of the various air service development conferences around the country, such as Networks and Jumpstart, and have on occasion met with airlines at their headquarters. Two such meetings have occurred with both Delta Airlines and US Airways regarding the proposed services outlined in the proposal, Atlanta and Charlotte. Representatives from both airlines have expressed extremely high interest in the routes as BTV is currently the largest market in the Northeastern United States to lack air service to either ATL or CLT.



## High Airfares at BTV Resulting in Passenger Leakage BTV has a history of extremely high average air fares relative to the national average. The figure below compares the average air fare in 2011 to both the national average and that of comparable airports also located in the northeast United States. Of the selected airports, Buffalo, NY (BUF) had the lowest recorded average air fare in 2011 at $320, with BTV having the second highest average airfare at $408, a difference of $88. The national average air fare was $368, which is $40 less than that of BTV. Average Airfares at Airports near BTV: (Please note the Plattsburgh International was not included in the information below as the two airlines operating there cater specifically to Canadian leisure travelers, and is therefore not practical to compare to BTV)



### Buffalo/Niagra - BUF $320 0.87 Providence - PVD $333 0.90 Manchester - MHT $341 0.93 Rochester - ROC $352 0.96 Boston - BOS $353 0.96 Portand - PWM $363 0.99 U.S. National Average $368 1.00 Hartford - BDL $389 1.06 Albany - ALB $403 1.10 Burlington - BTV $408 1.11 Syracuse - SYR $413 1.12 Source: US DOT, Bureau of Transportation Statistics 

### 4Q 2011 Average Fare IndexCity - IATA Code

The high cost that passengers have incurred due to airfares is the primary cause of the significant leakage of passengers to MHT, ALB and BOS, all of which have airfares significantly lower than that of BTV.

## 11 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 - 

## Relationship between Plattsburgh International Airport and BTV Plattsburgh International Airport (PBG) is located on the adjacent to Burlington, on the western side of Lake Champlain. In June of 2007, PBG began passenger air service with service to Boston through the Essential Air Service (EAS) program. Since that time, enplanements at PBG have grown drastically with the introduction of service by both Allegiant Air and Spirit Airlines. One of the specific criteria for the SCASD Grant pertains to competition with EAS airports. The primary customer base for PBG is Canadian leisure travelers looking for inexpensive air travel to select southern vacation destination and who are willing to be flexible when it comes to scheduling. Therefore, PBG does not directly compete for traffic with BTV due to its extremely limited air service to Florida and South Carolina markets and its targeted Canadian leisure traveler. 

# New Air Service to the Southeastern United States

Proposed New Route Burlington International Airport is proposing a Small Community Air Service Development Grant to provide a minimum revenue guarantee for service between Burlington and Atlanta on Delta Airlines (or a regional affiliate) or Charlotte on US Airways (or regional affiliate). Either proposed service would not only provide Burlington with a service to a destination with a large base of local traffic, but also provide significant access to connecting markets in the Southeast, the Caribbean and Latin America. Proposed Route from Either CLT on US Airways or ATL on Delta Airlines:

Source: Diio Market Intelligence, Schedule Mapper

## 12 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 BTV Airport staff understands the difficulty of performing a revenue guarantee program, as ultimately the decision whether or not service will initiate is entirely dependent upon the airline itself. Taking this into consideration, BTV staff has reached out to both Delta Airlines and US Airways, both of which operate the two largest airports in the Southeast. By reaching out to two airlines and having two strong options for similar air service, BTV staff feel confident that they can successful entice one of the two airlines to begin service.

Markets Served from ATL on Delta Airlines:

Source: Diio Market Intelligence, Schedule Mapper Markets Served from Charlotte on US Airways:

Source: Diio Market Intelligence, Schedule Mapper

## 13 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 

##  Goals As with most revenue guarantee programs, BTV has four primary goals with its Small Community Air Service Development Grant proposal for service to the Southeast via ATL or CLT.

 Better access to the either Atlanta or Charlotte and connecting markets in the Southeast, the Caribbean and Latin America.

 Reduce BTV’s dependence on congested airports in the Northeast Metropolitan area.

 Reduce the high average airfares from BTV, therefore resulting in a decrease in the leakage of passengers to other airports in the region, such as MHT, ALB and BOS.

 Reverse the decline in BTV’s origin and destination traffic experienced which started in 2009.



## Airline Support As previously mentioned, BTV staff has been in constant communications with both Delta Airlines and US Airways regarding air service to ATL and CLT, respectively. Both airlines have shown considerable interest in the proposed service with Delta even scheduling daily service to ATL on MD-88 aircraft during the spring of 2012. The service was later cancelled due to lack of available aircraft, and reallocation of aircraft to known profitable routes. Please see pages the Appendix A for letters of support by both Delta Airlines and US Airways for the proposed services.



## Atlanta (ATL) Route Feasibility Study via Delta Airlines The following exhibit was conduced by the Boyd Group International following the request by BTV staff. This route feasibilty study takes into account BTV’s primary and extended service areas as well as the service area that extends into the Canadian province of Quebec. Please note that while this SCASD Grant proposal is not aimed at attracting Canadian passengers, the true BTV service area extends into the Montreal metropolitan area, and therefore drastically increases the passenger base that utilizes BTV.

## 14 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 ATL Route Feasability Study for Delta Airlines:
BTV - ATL Mileage 961 Equipment CRJ - 700 Service Pattern 2x Daily RT Annual Segments 1,431 Completion Factor 98% Annual Seats 93,002 Annual ASM 89,374,922 Estimated CASM 0.127 Estimated Route Cost $11,323,803
Traffic Revenue ATL Seg Rev Local Fare 20,117 $4,808,980 $4,808,980 Domestic Connection ATL 54,661 $13,319,167 $7,215,988 International Connect ATL 3,901 $1,331,337 $591,876 Onboard Traffic & System Revenue 78,680 $19,459,484 $12,616,844 Full Year Segment Projected Operating Profit $1,293,042 Operating Margin 10.2% Segment RPMs 75,611,184 Segment Load Factor 84.6% 

### Projected Operational Statisitcs

Traffic & Revenue Summary

Proforma Projection

Source: Prepared by the Boyd Group International Route Feasibility Study assumptions:

- Assumes twice daily CRJ-700 rountrip with mixed-class configuration

- Stimulation factor on local market of 1.2 includes traffic coming from Montreal Airport (YUL) metro area

- Share in flow markets varies between 5%-95%, depending on alternative routings available Resulting forecast:

- 84.6% annualize load factor on steady-state basis

- $1.29 million system operating profit Conclustion:

- Service to Atlanta is profitable in the long-run!



##  Charlotte (CLT) Route Feasibility Study via US Airways The following exhibit was conduced by the Boyd Group International following its request by BTV staff. This route feasibilty study takes into account BTV’s primary and extended service areas as well as the service area that extends into the Canadian province of Quebec. Please note that while this SCASD Grant proposal is not aimed at attracting Canadian passengers, the true BTV service area extends into the Montreal metropolitan area, and therefore drastically the passenger base that utilizes BTV.

## 15 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 CLT Route Feasability Study for US Airways:
BTV - CLT Mileage 761 Equipment CRJ - 170 Service Pattern 2x Daily RT Annual Segments 1,431 Completion Factor 98% Annual Seats 98,725 Annual ASM 75,129,877 Estimated CASM 0.127 Estimated Route Cost $9,518,955
Traffic Revenue CLT Seg Rev Local Fare 20,736 $3,823,350 $3,823,350 Domestic Connection CLT 55,148 $13,090,768 $6,823,910 International Connect CLT 3,420 $1,074,383 $446,923 Onboard Traffic & System Revenue 79,304 $17,988,501 $11,094,182 Full Year Segment Projected Operating Profit $1,575,227 Operating Margin 14.2% Segment RPMs 60,350,344 Segment Load Factor 80.3% 

### Projected Operational Statisitcs

Traffic & Revenue Summary

Proforma Projection

Source: Prepared by the Boyd Group International Route Feasibility Study assumptions:

- Assumes twice daily CRJ-700 rountrip with mixed-class configuration

- Stimulation factor on local market of 1.2 includes traffic coming from Montreal Airport (YUL) metro area

- Share in flow markets varies between 5%-95%, depending on alternative routings available Resulting forecast:

- 80.3% annualize load factor on steady-state basis

- $1.57 million system operating profit Conclusion:

- Service to Charlotte is profitable in the long-run! 

# Strategic Incentive and Support Plan The primary factor that airlines consider before initiating service is the amount of risk associated with new air service. It has been proven short-term revenue guarantee programs along with marketing programs aimed at new service are invaluable to airlines. Therefore, to reduce the risk to Delta Airlines

## 16 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 or US Airways during the breakeven period and offset the economic risk during start-up, the private public partnership proposes the following incentives:  Short term (12-18 month) revenue guarantee  New service marketing campaign creating new service awareness for Delta Airlines or US Airways  Fee waivers to reduce airline start-up costs



## Revenue Guarantee As a means to reduce risk and provide incentives to Delta Airlines or US Airways for new non-stop service to ATL or CLT, this Strategic Plan includes a revenue guarantee. Although revenue projections for new southbound service are positive, the first year of service can be difficult to lower initial passenger demand and initial breakeven cost and may last up to a year and a half. Since the revenue projections for new demand are high, it is expected that the proposed new non-stop service by either Delta Airlines or US Airways would require a $450,000 revenue guarantee. The exact terms of the revenue guarantee are subject to further discussions dependent upon the decision by the DOT to select BTV as a SCASD Grant winner.



## Marketing Campaign Even though both proposed airlines outlined in this application currently have a strong presence and customer base at BTV, they are still subject to lower than expected market performance due to a lack of knowledge of the new service. Therefore, BTV staff proposes that part of the Strategic Plan include a marketing campaign aimed at the proposed non-stop air service. BTV’s staff has been working with Paul Kaza Associates for the past few years in regards to marketing air service within the Greater Burlington and Montreal areas. If chosen by the DOT as a SCASD Grant winner, BTV staff would most likely work with Paul Kaza Associates to draft up a detailed marketing plan for the proposed air service. It is expected that an effective marking campaign for the new non-stop air service to either ATL or CLT will cost approximately $95,000. The exact terms of the marketing program are subject to further discussions dependent upon the decision by the DOT to select BTV as a SCASD Grant winner.



##  Landing Fee Waiver BTV staff has set the landing fees of signatory airlines for 2012 at $1.75. As part of the Airport’s initiative to increase air service, staff will waive all landing fees for the first six months of operation as a means of offsetting the operating expenses incurred by the Airline.

## 17 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 

# Project Implementation

Public/Private Partnerships Burlington International Airport is owned by the City of Burlington. As a city department, it has access to numerous partnerships, both public and private, that has demonstrated their support for this grant proposal and may commit to assist BTV with its goal of obtaining air service to either Atlanta or Charlotte. The organizations that will work closely with BTV throughout the grant implementation process include, but are not limited to:

 City of Burlington, Vermont
 State of Vermont, Agency of Transportation Other potential sponsors include but are not limited to:

 Lake Champlain Regional Chamber of Commerce
 Local Area Business (including Nationwide, G.E. Healthcare, IBM)



## Project Funding The following exhibit details the funding for the project and breaks down the cash versus in-kind support. The total value of all incentive equates to $630,593.

Breakdown of Sources of Funding:

Assumptions: In-kind support based on twice daily operations by one air carriers over the course of a full year utilizing CRJ-700 aircraft with a gross landing weight of 67,000 lbs. Service tobothATL on Delta Airlines and CLT on US Airways $85,593 $50,000 $45,000 $450,000 $630,593 Type of Air Service Improvement In-Kind Support Cash Contributions

Waiver of landing fees for a period of not less than 12 months Marketing and promotion (Airport) Marketing and Promotion

(State of Vermont) Revenue Guarantee (DOT) Total value of

incentives



## Project Timeline The following is a proposed timeline, and may be subject to change:

o Summer 2012 –BTV is awarded SCASD Grant o Fall 2012/Winter 2012– BTV receives a firm commitment form either Delta Airlines to begin service to ATL or from US Airways to begin service to CLT

## 18 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 o Fall 2012/Winter 2012 –BTV negotiates a revenue guarantee with either Delta Airlines or US Airway o Winter 2012/Spring 2013– BTV begins an aggressive $95,000 marketing campaign to market the new non-stop service o Spring 2013/Summer 2013 –New proposed non-stop service begins o Spring 2013/Summer 2013 –Revenue guarantee program begins 

# Grant Amendments/Alternative Strategies

Airport staff believe that there is the chance that both Delta and US Airways will want begin service to the proposed markets. In the event of such an occurrence, BTV will give preference of funding to the airline that it feels is in the best interest of the passengers, and will take into consideration various factors such as frequency of service, number of available seats, start date, etc. If at the end of the revenue guarantee program, additional funding is available; BTV will contact the DOT to request that the remaining funding be used on the other proposed route. In the event that the DOT allows BTV to use the Grant funding for service on both proposed routes, then the following funding schedule would go into effect: Breakdown of Sources of Funding:

While BTV staff feel confident regarding the ability of a SCASD Grant from the DOT to attract new air service to ATL on Delta Airlines or CLT on US Airways, BTV staff will begin discussions with other carriers regarding alternate service to an alternate destination, if the proposed service has not begun within a year and a half of being awarded the Grant. If such a scenario does happen, BTV staff will contact the DOT personnel in the early stages of airline negotiations to gain approval for the amendment of the Grant assurances. If after three years from the award date BTV has not exhausted the funds granted to them by the DOT under the SCASD Grant, all remaining funds will be returned to the DOT.

## 19 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 

# Conclusion The Burlington International Airport is requesting from the Department of Transportation funding in the amount of $450,000 to serve as a revenue guarantee for service on either Delta Airlines to Atlanta or US Airways to Charlotte and to be matched by $50,000 Airport cash, $45,000 State cash and $90,484 in Airport in-kind support. Such air service would provide significant benefits to BTV passengers as a majority of flights operating from BTV travel to and from destinations in the Northern United States; specifically the congested Northeast Metropolitan area which is subject to both traffic and weather related delays. Over the past few years, BTV staff has met with both airlines regarding the proposed route, both ofwhom have shown considerable interest. During the spring of 2012, Delta Airlines announced daily nonstop service on its MD-88 aircraft. This service was discontinued approximately a month later, with Delta stating a lack of available aircraft and the reallocation of aircraft to known profitable routes. BTV has always been the primary point of entry for air travelers to Northern Vermont and the surrounding regions, and is a major driving factor for the Vermont economy. BTV’s staff understands that the DOT may be hesitant to award funding for a revenue guarantee; however the staff has gone to great lengths to understand and demonstrate the interest of both Delta and US Airways for the proposed routes.

## 20 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 

# Appendix A: Letters of Support

## 21 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069

## 22 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069

## 23 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069

## 24 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 State of Vermont Agency of Transportation One National Life Drive Montpelier, VT 05633 

### Guy.rouelle@state.vt.us (802)828-1083

June 7, 2012 Secretary Ray LaHood U.S. Department of Transportation 1200 New Jersey Avenue, SE Washington, DC 20590 Dear Secretary LaHood: On behalf of the State of Vermont, I am writing in support of the application submitted by the Burlington International Airport (BTV) for funding under the Small Community Air Service Development Grant (SCASD). Vermont thrives as a four season center for tourism and a national leader in environmentally friendly technologies. In addition, Burlington, Vermont’s largest city, and its surrounding communities are nationally recognized as a center for higher education, as well as home to many national and local corporations, such as Green Mountain Coffee Roasters, Ben & Jerry’s, IBM, Fletcher Allen Healthcare, G.E. Healthcare, Goodrich, General Dynamics and Dealer.com to name a few. As Vermont’s largest commercial airport, BTV not only serves Chittenden County, but the entire region of northern Vermont, New York and New Hampshire. Unfortunately, due to the limited air service at BTV, we are finding that many travelers are venturing to other airports, such as Albany, Manchester and Boston to fulfill their travel needs. This leakage of passengers not only affects the Airport, but also the businesses that both directly and indirectly rely on quality and sufficient air services and the passengers that travel through. As one of states primary economic drivers, tourism relies heavily on the need for increased air service to and from BTV. Whether visitors are come to Vermont for the warm summer months, to see the fall foliage or to take advantage of the exceptional skiing opportunities offered during the winter, BTV is often the first impression that they have of the region. Without increased air service, we worry that tourists will choose to visit alternate areas of the country to spend their time, taking with them their business which is so important to the stability of the state. Therefore, to show our support of BTV and its submission of a proposal for funding under the SCASD grant, the State of Vermont pledges to commit $45,000 to be used as part of the program aimed at attaining additional air service. The State of Vermont thanks you for your consideration of this SCASD grant application for the goal of continuing efforts to sustain and grow the economy of both Chittenden County and the State of Vermont. Sincerely,

Guy Rouelle

## 25 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 Interim Aviation Program Administrator

## 26 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069

## 27 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069 

# Appendix B: Required Summary Information

## 28 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069

## 29 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069

## 30 Burlington International Airport Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2012-0069