May 13,2014 Secretary AnthonyFoxx U.S. Department ofTransportation 1200 New Jersey Avenue, SE Washington, D.C. 20590 Re: Docket DOT-OST-2008-0299 Dear Secretary Foxx, ·. i

.

f,MPERIAL VA.ll.E'f £COMOMIC DEVELOPMilNi tORPOR,6,TIOI'<I

Imperial CountyAirport ("IPL") is one of 13 airports that were notified**b~** Tentative Orderby the United States Department ofTransportation ("US DOT") on April24 , 2014 that the community maypotentially lose Essential Air Service ("EAS") eligibility because IPL has served fewer than tenpassengers per day during the year-ended December 31, 2013. Further, the Tentative Order indicates thatthe community needs to "show cause as to why the Department of Transportation should notterminate the eligibility ofthe community underthe Essential Air Service (EAS) program." On behalfofImperial Valley Economic Development Corporation (IVEDC), I urge you to grant a waiver so that IPL does not lose its EAS eligibility onthe basis that it is a temporary circumstance that IPL's passengerperformance has dropped belowten passengers per day. As this letter will demonstrate, the service area around IPL was hard-hit bythe Global Credit Crisis andMortgage 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 inplace, passenger acceptance has built steadily. IPL is located in Southeastern Californiabordered byArizonato the East, SanDiego Countyto the West, and Mexico to the South. Eventhough it is about 114 miles to San Diego, road access to the nearest large hub airportto Imperial County is made uniquely more challengingthan distance alone due to congestion, unpredictable border crossings, and road closures due to weather conditions on all roadways leading out ofImperial County. This increases the amount of time thatpassengers need to travel to other airports, as well as increases the community's reliance on IPL for access to the international air transportation networkto support economic growth inthe area. IPL'spassengerperformance peaked in 2007 with 64 enplanements per day on United Express. In 2008, the economy ofImperial County was devastated bythe housing crisis and economic recession, which greatly hurtthe county, the state ofCalifornia, and the country. That said, from 2008 to 2012, passengerperformance at IPL was approximately double the US DOT'sthreshold oftenpassengers per day.

P.O. BOX 30051 EL CENTRO, CA 92244 

### IP: 760.353.83321 F: 760.353.91491 WWW.IVEDC.COMlMI'UIJI.k VAllEY flt:OMOMIC DEVEi.OPMaNT COR?OR.&.ifON The economy ofImperial County was hard hitbythe Global Credit Crisis and Mortgage Meltdown of2008, butprudent investment in the future have been made there, and positive results are being achieved. Imperial County was disproportionately impactedbythe poor global economybecause it is a marketthat relied upon the agricultural sector forjobs. This coupled with the loss ofconstructionjobs in the county due to the housing crisis leftthe county as one of the worstperforming economic areas in California. Imperial County is now looking to grow with green-energy companies and eventually become the renewable energy capital ofthe country. Several companies are investing and partneringwith the County such as Tenaska SolarVentures, Ocotillo Wind, CalEnergy and 8minutenergy, all of which are solar energy firms. The effect ofthe 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 percentper annum. Since 2012 ithas 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'spopulation increased betweentwo and three percentuntil the housing crisis in 2008 as illustrated onFigure 2. Since then the population increased at a slowerrate. Incomeper

P.O. BOX 30051 EL CENTRO, CA 922441 P: 760.353.83321 F: 760.353.91491 WWW.IVEDC.COMIMPHIIAk. 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 athigher rate.
Figure 2: Imperial County's Historical Population and Total Personal Income Per Capita
185 35 

## "' 180 175 170 r:: 165 0 ·.;: .!!! 160 ::;, c.. 155 0 0.. 

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## ... 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 ofthe economic recession had on Imperial County. In 2007, median housing values peaked at almost $250,000, but decreasedto a low of$130,000 in 2011. In 2012 the housing values began to show signs ofrebounding with an increase of2 percentper annum.

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### 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'<



### Ofthe thirteen airports impacted by the US DOT's Tentative Order, IPL has the highest number ofpassenger enplanements at 9.5 perday as shown on Figure 4. Itbears noting thatthis is only halfan enplanementper day lower than the US DOT'sminimum level, and that it rounds to the US DOT'sminimum level often.


### Figure 4: List ofAirports Listed in Tentative OrderRegarding Termination ofEAS 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 OrderRegarding Termination ofEASEligibility

P.O. BOX 30051 EL CENTRO, CA 92244 

### IP: 760.353.83321 F: 760.353.91491 WWW.IVEDC.COMiMF'ItRIAI.. VALLEt!' ECONOMiC DE'IIi:'!:.OPM!lNi COR?OR:,i,TIO!>I 

### IPL has been servedbytwo carriers, United Airlines operated by SkyWest ("United"), which ceased service in April of2013, and SeaportAirlines ("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 operatedto Los Angeles International Airport ("LAX"). This service benefitted passengers because LAX is one ofthe largest airports in the United States with a diverse group ofairlines serving a large number ofdomestic 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 ofhaving access to two airports, this federally mandated service attracted fewerpassengers because it is flown on smaller aircraft, and Seaport did not initially have interline agreements inplace to allow passengers to transfer at SAN and BURto other airlines. In addition, SAN and BURoffer fewer connecting opportunities than LAX, because fewer airlines and routes are served from SAN and BUR. As a result ofthe smaller aircraft operated by Seaport, the number ofdaily seats offered from IPL are approximately halfthe number offered byUnited 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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Source: Innovata Schedules, viaDiio, Annual seats divided by 365 days, CalendarYear, in 2013, United's service transitioned to SeaportAirlines As shown on Figure 6, IPL consistently generated approximatelytwenty passengers per day 2009-2012. IPL passengertraffic peaked in 2007 whenthe airporthad 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-seatEmbraer 120.
Figure 6: Historical Enplanements per Day

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50.0
40.0
30.0
20.0
10.0
0.0

Source: T-100 Data, viaDiio, YE September, Based on 313 days Only year that IPL is below the US DOT's threshold of

P.O. BOX 30051 EL CENTRO, CA 922441 P: 760.353.83321 F: 760.353.91491 WWW.IVEDC.COMFigure 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, viaDiio, YE September During 2007, IPL also reached its highest load factor of52% as shown on Figure 7. IPL was hard hit bythe weakeconomy 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. In2013, the US DOT selected a new airline, serving new markets, and passengertraffic 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 atBUR and SAN. 

### In the future, passengertraffic will benefit from the interline agreements that Seaport Airlines has signed with Alaska Airlines and DeltaAir 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 atBURand SAN. Despite the effects ofthe recession, IPL's traffic levels had remained above the mandatoryten 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 often enplanements per day as the flights will have the benefit ofconnecting passengers. As such, it is certain that the passengerperformance below US DOT minimums is a temporary circumstance related to the entrance ofa new EAS carrier serving newmarkets from IPL. IVEDC and Imperial County are unified in its support ofthe Seaport service and look forward to petitioning a waiver ofthese 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 Thankyou for your consideration. Should you have any questions, please do nothesitate to contactme viaphone 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 ofCongressman Juan Vargas, CA-51 Kevin Schlemmer, Essential Air Service & Domestic Analysis Division

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