May 13,2014 

Secretary Anthony F oxx 

U.S. Department of Transportation 

1200 New Jersey Avenue, SE 

Washington, D.C. 20590 

Re: Docket DOT -OST -2008-0299 

Dear Secretary F oxx, 

·. i . 

f,MPERIAL VA.ll.E'f £COMOMIC 

DEVELOPMilNi tORPOR,6,TIOI'<I 

Imperial County Airport ("IPL") is one of 13 airports that were notified b~ Tentative Order by 

the United States Department of Transportation ("US DOT") on April24 , 2014 that the 

community may potentially lose Essential Air Service ("EAS") eligibility because IPL has 

served fewer than ten passengers per day during the year-ended December 31, 2013. Further, the 

Tentative Order indicates that the community needs to "show cause as to why the Department of 

Transportation should not terminate the eligibility of the community under the Essential Air 

Service (EAS) program." 

On behalf of Imperial Valley Economic Development Corporation (IVEDC), I urge you to grant 

a waiver so that IPL does not lose its EAS eligibility on the basis that it is a temporary 

circumstance that IPL's passenger performance has dropped below ten passengers per day. As 

this letter will demonstrate, the service area around IPL was hard-hit by the Global Credit Crisis 

and Mortgage Meltdown Crisis in 2008, but economic and demographic trends have improved 

since. In addition, the EAS airline and routes changed in May 2013, and in the short time since 

the new service has been in place, passenger acceptance has built steadily. 

IPL is located in Southeastern California bordered by Arizona to the East, San Diego County to 

the West, and Mexico to the South. Even though it is about 114 miles to San Diego, road access 

to the nearest large hub airport to Imperial County is made uniquely more challenging than 

distance alone due to congestion, unpredictable border crossings, and road closures due to 

weather conditions on all roadways leading out of Imperial County. This increases the amount of 

time that passengers need to travel to other airports, as well as increases the community's 

reliance on IPL for access to the international air transportation network to support economic 

growth in the area. 

IPL's passenger performance peaked in 2007 with 64 enplanements per day on United Express. 

In 2008, the economy of Imperial County was devastated by the housing crisis and economic 

recession, which greatly hurt the county, the state of California, and the country. That said, from 

2008 to 2012, passenger performance at IPL was approximately double the US DOT's threshold 

often passengers per day. 

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lMI'UIJI.k VAllEY flt:OMOMIC 

DEVEi.OPMaNT COR?OR.&.ifON 

The economy of Imperial County was hard hit by the Global Credit Crisis and Mortgage 

Meltdown of 2008, but prudent investment in the future have been made there, and positive 

results are being achieved. Imperial County was disproportionately impacted by the poor global 

economy because it is a market that relied upon the agricultural sector for jobs. This coupled 

with the loss of construction jobs in the county due to the housing crisis left the county as one of 

the worst performing economic areas in California. 

Imperial County is now looking to grow with green-energy companies and eventually become 

the renewable energy capital of the country. Several companies are investing and partnering with 

the County such as Tenaska Solar Ventures, Ocotillo Wind, CalEnergy and 8minutenergy, all of 

which are solar energy firms. 

The effect of the recession on Imperial County is demonstrated in the county's gross regional 

product (GRP), which is shown on Figure 1. From 2009 through 2011, Imperial County's GRP 

declined one percent per annum. Since 2012 it has been increasing and in 2013 was at a 10 year 

high of $4,928 million. 

Figure 1: Imperial County's Historical and Forecast Gross Regional Product 

Ui' 6,000.00 

... 5,500.00 ..!!! 

0 5,000.00 0 

en 4,500.00 0 

0 

N 4,000.00 

"' s::: 3,500.00 ~ 

]. 3,000.00 

Cl.. 2,500.00 cc: 

c:J 2,000.00 

Source: Woods & Poole 

Gross Regional Product 

(Millions) 

Imperial County's population increased between two and three percent until the housing crisis in 

2008 as illustrated on Figure 2. Since then the population increased at a slower rate. Income per 

P.O. BOX 30051 EL CENTRO, CA 922441 P: 760.353.83321 F: 760.353.91491 WWW.IVEDC.COM 
IMPHIIAk. VAlLEY ECONOMIC 

E}Eiili!LOPMEJfi CORF'ORArtON 

Capita has experienced similar trends, but it has experienced a more robust recovery in 2013, 

when the income per capita grew at higher rate. 

Figure 2: Imperial County's Historical Population and Total Personal Income Per Capita 

185 35 

"' 180 

175 

170 r:: 

0 165 

·.;: 

.!!! 160 ::;, 

c.. 

0 155 0.. 

~ -- ".-.-- ~ 

- ~ 

./ 

./' 

/ 

OJ 

30 ·c. 

u "' ... 25 Ql 

0.. 

Ql 

20 E 

o- uO 

r:;O 

-o 

15 --"' r:: 

0 

150 10 Ill 

... 

Ql 

145 

140 

0.. 

5 iii 

OJ 

0 

1-

135 

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 

-Population -Total Personal Income Per Capita (Current Dollars) 

Source: Woods & Poole 

Housing values in Imperial County demonstrate the impact of the economic recession had on 

Imperial County. In 2007, median housing values peaked at almost $250,000, but decreased to a 

low of $130,000 in 2011. In 2012 the housing values began to show signs of rebounding with an 

increase of 2 percent per annum. 

P.O. BOX 30051 EL CENTRO, CA 922441 P: 760.353.83321 F: 760.353.91491 WWW.IVEDC.COM 
Figure 3: Median Household Value 

MEDIAN VALUE: 

Owner-occupied housing units 

300 ,--------------------------------------------

250 +------::;jiiiiiiiiiiiili_;;;::--------------

0 

g 200 +---~--------------~.-----------------~--- / ~ 

~ / """"" 

Qj' ~ 150 -l---------------------~~~"""""-=------- "' 

~ 100 +-------------------------------------

50 +--------------------------------------------

0 +-----.----.-----.----.-----,----.-----.----. 

2005 2006 2007 2008 2009 2010 2011 2012 

Source: American Community Survey, US Census 

IMPERIAL VALLEY lit:ONOMIC 

DEIIElOPMENT C:ORJ>ORAtiOi'< 

Of the thirteen airports impacted by the US DOT's Tentative Order, IPL has the highest number 

of passenger enplanements at 9.5 per day as shown on Figure 4. It bears noting that this is only 

half an enplanement per day lower than the US DOT's minimum level, and that it rounds to the 

US DOT's minimum level of ten. 

Figure 4: List of Airports Listed in Tentative Order Regarding Termination of EAS 

Eligibility 

r EAs-i.: -;t -- -- s1:~t;--- - -----~ -

EL Centro California 9.5 

Fort Dodge Iowa 9.4 

Greenville Mississippi 9.3 

Jackson Tennessee 7.8 

Merced California 7.7 

Bradford Pennsylvania 6.9 

Lancaster Pennsylvania 6.3 

Muscle Shoals Alabama 6.3 

Athens Georgia 5.9 

Franklin/ Oil City Pennsylvania 5.0 

Macon Georgia 4.0 

Hagerstown Maryland 3.9 

Kingman Arizona 2.7 

Source: US DOT Tentative Order Regarding Termination ofEAS Eligibility 

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iMF'ItRIAI.. VALLEt!' ECONOMiC 

DE'IIi:'!:.OPM!lNi COR?OR:,i,TIO!>I 

IPL has been served by two carriers, United Airlines operated by Sky West ("United"), which 

ceased service in April of2013, and Seaport Airlines ("Seaport"), which began service in May of 

2013 when the US DOT selected Seaport as the new EAS carrier. When United was serving IPL, 

flights were operated to Los Angeles International Airport ("LAX"). This service benefitted 

passengers because LAX is one of the largest airports in the United States with a diverse group 

of airlines serving a large number of domestic and international cities to and from which IPL 

passengers could connect. 

Seaport's service replaced flights to LAX with service to large-hub San Diego International 

Airport ("SAN") and Burbank's Bob Hope Airport ("BUR"), a medium-hub airport north of 

LAX. Despite the advantage of having access to two airports, this federally mandated service 

attracted fewer passengers because it is flown on smaller aircraft, and Seaport did not initially 

have interline agreements in place to allow passengers to transfer at SAN and BUR to other 

airlines. In addition, SAN and BUR offer fewer connecting opportunities than LAX, because 

fewer airlines and routes are served from SAN and BUR. 

As a result of the smaller aircraft operated by Seaport, the number of daily seats offered from 

IPL are approximately half the number offered by United as shown on Figure 5. 

Figure 5: IPL's Average Seat Departures per Day 

120 '06UA: LAX& 

YUM 

100 

80 '04 UA: '11 UA: YUM is 

LAX& cancelled in '13 Seaport 

> SAN February enters in May; IV 

c UA leaves IPL in 

-60 April "' .... 

IV 

Cll 

(/) 

40 

20 

0 

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 

• United Airlines Seaport Airlines 

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tMF'UIAl 'VALlEY SCONOMIC 

DEVI:I..OPMENT CORPORATION 

Source: Innovata Schedules, via Diio, Annual seats divided by 365 days, Calendar Year, in 2013, United's service 

transitioned to Seaport Airlines 

As shown on Figure 6, IPL consistently generated approximately twenty passengers per day 

2009-2012. IPL passenger traffic peaked in 2007 when the airport had nearly twice daily service 

to LAX and Yuma, Arizona ("YUM"). United's service with online and interline connecting 

opportunities at LAX allowed both business and leisure travelers to travel globally and on a 

larger aircraft, the 30-seat Embraer 120. 

Figure 6: Historical Enplanements per Day 

70.0 ~-------------------------------------------------

60.0 

50.0 

40.0 

30.0 

20.0 

10.0 

0.0 

Source: T -100 Data, via Diio, YE September, Based on 313 days 

Only year that IPL is below 

the US DOT's threshold of 

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Figure 7: El Centro Imperial County Historical Load Factor 

IM!>ERIAL V.M.I.EV lOCONOMIC 

DEVELOPME.HT COR·PORATION 

60% .--------------.~--~-----------------------------

... 

0 

tl 

:f. 30% "C 

1'0 

.9 

20% 

10% 

0% 

52% 

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 

Source: T-100 Data, via Diio, YE September 

During 2007, IPL also reached its highest load factor of 52% as shown on Figure 7. IPL was hard 

hit by the weak economy in 2008, 2009 and 2010 with an immediate decline in traffic and load 

factor. As IPL started to emerge from the recession, air travel increased to 20.6 in 2012. In 2013, 

the US DOT selected a new airline, serving new markets, and passenger traffic decreased. 

This decrease is temporary because the community must adjust to the new air service patterns at 

IPL, and Seaport needed time to negotiate interline agreements with other airlines at BUR and 

SAN. 

In the future, passenger traffic will benefit from the interline agreements that Seaport Airlines 

has signed with Alaska Airlines and Delta Air Lines. Two more interline agreements with other 

airlines are due to be signed shortly. These agreements will greatly help generate passengers at 

IPL with convenient connections at BUR and SAN. 

Despite the effects of the recession, IPL's traffic levels had remained above the mandatory ten 

enplanements per day by at least six passengers every year except for 2013. Once Seaport's 

interline agreements take effect, IPL should easily exceed the threshold of ten enplanements per 

day as the flights will have the benefit of connecting passengers. 

As such, it is certain that the passenger performance below US DOT minimums is a temporary 

circumstance related to the entrance of a new EAS carrier serving new markets from IPL. 

IVEDC and Imperial County are unified in its support of the Seaport service and look forward to 

petitioning a waiver of these standards listed in DOT-OST-2008-0299. 

P.O. BOX 30051 EL CENTRO, CA 922441 P: 760.353.83321 F: 760.353.91491 WWW.IVEDC.COM 
!MPE:RIAI. VAlkEY !;(ONOMIC 

DEVEt..OPMENi CORPOR;ATION 

Thank you for your consideration. Should you have any questions, please do not hesitate to 

contact me via phone at 760.455.6102 or email tim@ivedc.com. 

Sincerely, 

Timothy E. Kelley 

President and CEO 

cc. Susan Kurland, Aviation and International Affairs 

Rebecca Terrazas-Baxter, Office of Congressman Juan Vargas, CA-51 

Kevin Schlemmer, Essential Air Service & Domestic Analysis Division 

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