Santa Maria Public Airport

Santa Maria, California

Legal sponsor: Santa Maria Public Airport District

DUNS: 085917870

Congressional District Code: CA-23

Contact: Chris Hastert

General Manager 

3217 Terminal Drive

Santa Maria, CA 93455 

Phone: (805) 922-1726 

Fax: (805) 922-0677

chastert@santamariaairport.com

PROPOSAL UNDER THE SMALL COMMUNITY 

AIR SERVICE DEVELOPMENT PROGRAM

DOCKET #: DOT-OST-2011-0119


Prepared by

TABLE OF CONTENTS

PAGE

Summary Information............................................................1

Proposal Highlights ................................................................2

Higher Than Average Fares..............................................................................2

Community Cost Contribution.........................................................................2

Public-Private Partnership.................................................................................2

Material Benefits .............................................................................................2

Use of Funds in a Timely Fashion .....................................................................2

Air Service Environment ........................................................3

Airport Catchment Area ..................................................................................3

Business Community .......................................................................................4

Educational Institutions ...................................................................................4

Tourism...........................................................................................................5

Air Service – Existing and Historical ......................................6

Existing Air Service ..........................................................................................6

Historical Air Service ........................................................................................6

Air Service Needs and Deficiencies.......................................10

Major Origin/Destination Markets Not Served Adequately ..............................10

Higher than Average Fares.............................................................................11

Strategic Plan – Air Service ..................................................12

Project Goals.................................................................................................12

Proposed Air Service......................................................................................12

Airline Participation .......................................................................................12

Detailed Market Analysis ...............................................................................13

Alternate Plan ...............................................................................................14

Previous Grant Recipient - New Project and Goals..........................................14

Strategic Plan – Implementation and Funding......................15

Public-Private Partnership...............................................................................15

Incentive and Support Plan ............................................................................15

Project Continuation and Sustainability..........................................................18

Strategic Plan Funding...................................................................................18

Schedule and Monitoring .....................................................19

Schedule and Milestones...............................................................................19

Monitoring Program......................................................................................20

Appendix A. Community Support .........................................21

Appendix B. Detailed Market Analysis ..................................29
1

SUMMARY 

INFORMATION

A. Applicant Information: 

(Check all that apply)

X Not a 

Consortium

Interstate 

Consortium

Intrastate 

Consortium

Community now receives EAS subsidy

X

Community (or Consortium member) previously 

received a Small Community Grant

If previous recipient, date of grant: June 26, 2002

Expiration date of grant: March 12, 2005

B. Public/Private Partnerships: 

(List organization names)

Public Private

1. Santa Maria Public 

Airport District

1. Santa Maria Valley Chamber 

of Commerce & Visitor & 

Convention Bureau

2. Santa Maria Economic 

Development Commission

C. Project Proposal: 

(Check all that apply)

X Marketing X Start-up Cost Offset

Travel Bank X Secure Additional 

Service

Surface Transportation X New Route

Launch New Carrier Subsidy

Study X Revenue Guarantee

Upgrade Aircraft First Service

Service Restoration Other (specify): Regional Service

D. Existing Landing Aids at Local Airport:

X Full ILS X Published Instrument Approach

X Localizer X Outer/Middle Marker

X Other (specify): VOR and GPS Approaches

E. Project Cost:

Line Description

Sub

Total

Total

Amount

1 Federal amount requested $490,000

2 State cash financial 

contribution $0

Local cash financial 

contribution

3a Airport cash funds $45,000

3b Non-airport cash funds $130,000

3 Total local cash funds 

(3a+3b) $175,000

4 TOTAL CASH FUNDING 

(1+2+3) $665,000

In-Kind contribution

5a Airport In-Kind

contribution** $55,000

5b Other In-Kind

contribution** $10,000

5 TOTAL IN-KIND 

CONTRIBUTION (5a+5b) $65,000

6 TOTAL PROJECT COST (4+5) $730,000

F. 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) for each.

5a Airport In-Kind contribution: Fee waivers

5b Other In-Kind contribution: Marketing

G. Is this application subject to review by 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.

H. Is the Applicant delinquent on any Federal 

debt? (if “yes”, provide explanation)

No

Yes (explain)

X

X
THIS SECTION CONTAINS: •

• Project goals

• Description of the Strategic 

Plan

• Highlights of the grant 

application

2

PROPOSAL 

HIGHLIGHTS

his Small Community Air Service Development Program grant application for the Santa Maria Public Airport meets 

the criteria of Docket DOT-OST-2011-0119. Santa Maria Public Airport District, the legal sponsor, is requesting 

$490,000 in federal assistance to implement a $730,000 air service initiative. The project goal is to obtain nonstop

service to a major airline’s hub that is located east of Santa Maria. The Strategic Plan, SkyWest Airlines/United Express

Denver service, will achieve the project’s goal.

HIGHER THAN AVERAGE FARES

Santa Maria is underserved and overpriced, particularly 

to eastbound markets. With eastbound connections 

limited to United Express Los Angeles service, the 

options for traveling east are inconvenient and 

expensive. Santa Maria travelers pay a significantly 

higher average fare than other nearby regional airports 

causing diversion from the local airport. On average, 

Santa Maria’s airfares (excluding Allegiant Air’s Las 

Vegas fares) exceed California and national averages by 

almost 60 percent.

COMMUNITY COST CONTRIBUTION

To support this air service initiative, the Santa Maria 

Public Airport District and community will fund 33

percent of the proposed $730,000 Strategic Plan. Nonairport revenue sources will fund 20 percent ($130,000) 

of the $665,000 cash requirement. This is a strong 

commitment by the local community to acquire new 

eastbound hub service.

PUBLIC-PRIVATE PARTNERSHIP

The Santa Maria Public Airport District, Santa Maria 

Valley Chamber of Commerce & Visitor & Convention 

Bureau and Santa Maria Economic Development 

Commission have formed a public-private partnership.

This partnership has been successful in past air service 

efforts and is dedicated to the success of this initiative.

MATERIAL BENEFITS

Nonstop eastbound air service will benefit a broad 

segment of the traveling public, including businesses, 

educational institutions and other enterprises. Within a 

60-minute drive, approximately 400,000 people reside 

in the area expanding to almost 700,000 within a 120-

minute drive. Importantly, Vandenberg Air Force Base

and its’ associated aerospace contractors employ over 

8,600 people and has a high demand for Denver service 

because of its’ many aerospace partners that are 

located in and around Denver. The growing population 

of North Santa Barbara County, the US aerospace 

industry and many businesses in the region desperately 

need the proposed service. Denver has been the area’s 

number one market outside of California for many 

years. There is no other service improvement that would 

mean as much to the region as nonstop service 

to Denver.

USE OF FUNDS IN A TIMELY FASHION

All of the elements are in place to ensure the timely use

of grant funds. A market analysis has been completed 

for SkyWest/United service to Denver (refer to Appendix 

B). Preliminary discussions with SkyWest/United have

already taken place. It is reasonable to expect that this 

service could be implemented in spring/summer 2012.

T
3

THIS SECTION CONTAINS:

Description of the Santa Maria 

community in relation to air service 

to demonstrate the benefit of the 

Strategic Plan to a broad segment 

of the traveling public.

AIR SERVICE 

ENVIRONMENT

he Santa Maria Public Airport is in need of air service expansion. Vandenberg Air Force Base’s proximity to Santa 

Maria Public Airport and the solid and growing business and population base in the Santa Maria area is driving 

local demand for air service improvements. This section reflects the broad segment of the traveling public, including 

businesses, educational institutions and other enterprises that will benefit from the proposed Strategic Plan.

AIRPORT CATCHMENT AREA

Santa Maria Public Airport is located on the Central Coast of California in the city of Santa Maria. The Airport is located in 

northern Santa Barbara County, about 35 miles south of the city of San Luis Obispo, 70 miles north of the city of Santa 

Barbara and 170 miles north of Los Angeles. The Airport’s catchment area, shown in dark green in Exhibit 3.1, has a 

population of almost 225,000. Within a 60-minute drive from the Airport the population is almost 400,000 and expands 

to 700,000 within 120 minutes.

Over the next 20 years, Santa 

Barbara County is forecasted to grow 

by 11 percent. The fastest growing 

city in Santa Barbara County, the “All 

America City” of Santa Maria, stands 

at the center of that growth. Santa 

Maria is the growth region of the 

Central California Coast. In the last 

10 years, Santa Maria’s population 

grew over 20 percent. Santa Maria’s 

scenic terrain, moderate climate and 

quality of life have fueled the 

dramatic migration of new residents 

and businesses seeking affordable 

locations in California. Additionally, 

growth has been boosted by Santa 

Maria’s proximity to and the 

increased activity at Vandenberg Air 

Force Base, the West Coast home of 

the National Aeronautics and Space 

Administration’s (NASA) space program.

T

EXHIBIT 3.1 AIRPORT CATCHMENT AREA 
SECTION 3. AIR SERVICE ENVIRONMENT

4

BUSINESS COMMUNITY

Like other California communities, Santa Maria has evolved 

from an agricultural background to a diversified economy that 

includes aerospace/military, education, medical, technology 

and service sectors. What was once a slow-paced farming 

community is now a dynamic regional center. The Santa Maria 

Valley has a burgeoning agricultural industry, as well as 

connections with aerospace due to its proximity to 

Vandenberg Air Force Base. Other significant manufacturing 

includes wire and cable production, medical manufacturing, 

high-tech communications, dental products manufacturing 

and a myriad of other industrial products. Table 3.1 provides 

a list of top employers in the Santa Maria area.

Agriculture is the number one industry in the Santa Maria 

Valley, and new technologies are emerging. The Windset 

Farms project, which features the first hydroponic farming in 

the region, will have four large, 32-acre greenhouses with 5.7 

million square feet in total. The project will create over 240 

jobs. This will open the door for further technological 

advancements in agriculture and create new business 

opportunities in Santa Maria.

With over 1,300 employees, Marian Medical Center is one of 

the largest employers in the Santa Maria Valley. Marian 

Medical Center’s 216,000 square foot, 188-room hospital 

expansion will open additional opportunities for medical related businesses, service and medical products. A number of 

companies in Santa Maria specialize in manufacturing medical and health products. The expansion is projected to be 

completed in 2011.

Vandenberg Air Force Base presents the ideal anchor for companies specializing in space technologies. At present, 

Vandenberg Air Force Base and its’ associated aerospace contractors play an important role in the region’s economic 

engine collectively employing over 8,600 people. Because Vandenberg is the West Coast home of the US space program, 

there are a number of aerospace firms including Lockheed Martin, Boeing, C& D Aerospace and InDyne located either on 

the base or in the community. Significantly, the Air Force Base along with its aerospace contractors have direct links with 

sister companies and/or other aerospace contractors that are located in the Denver/Colorado Springs area.

EDUCATIONAL INSTITUTIONS

Santa Maria is home to the campus of Allan Hancock Community College. The College serves all of northern Santa 

Barbara County and parts of San Luis Obispo and Ventura counties at campuses in Santa Maria, Lompoc, Solvang and 

Vandenberg Air Force Base. Over 1,300 courses are offered in over 100 fields of study via nine academic departments. 

Allan Hancock Community College, with nearly 1,000 employees, is one of the five largest employers in northern Santa 

Barbara County. The Santa Maria area also has several university extension programs including: Chapman University 

Academic Centers, La Verne University and Embry-Riddle Aeronautical University.

TABLE 3.1 INSTITUTIONS

EMPLOYER INDUSTRY

Vandenberg Air Force Base

Defense and 

Aerospace

Santa Maria School District Public Education

Marian Medical Center Health Care

Allan Hancock College Public Education

City of Santa Maria Public Administration

Orcutt Union School District Public Education

Betteravia Farms Agriculture

C&D Zodiac Aerospace Manufacturing

Den-Mat Corporation Manufacturing

VTC Nonprofit

Source: Santa Maria Chamber of Commerce & Visitor & 

Convention Bureau
SECTION 3. AIR SERVICE ENVIRONMENT

5

TOURISM

Santa Maria’s backdrop of coastline and wine country provide 

unlimited year-round recreation and leisure opportunities.

Tourism is a significant industry due to Santa Maria’s central 

location between the Sierra Madres Mountains and Pacific 

Ocean and the wide selection of Central Coast activities.

Wineries provide a large amount of revenue for the region, 

both in wine production and through tourism. The Santa 

Maria Wine Trail is very popular among visitors. Other 

attractions include:

• Pismo Beach

• Hearst Castle

• Foxen Canyon Wine Trail

• Solvang

• La Purisima Mission

• Guadalupe-Nipomo Dunes Complex
6

THIS SECTION CONTAINS:

• Description of existing air 

service

• Synopsis of historical air service

• Description of air service 

development efforts

AIR SERVICE – EXISTING 

AND HISTORICAL

he following is a current and historical look at air service 

at Santa Maria Public Airport. Carriers providing service, 

service frequency, nonstop destinations offered and 

airfares are shown. Also included in the following section is a 

discussion of past air service development efforts and 

extenuating factors that have affected air service.

EXISTING AIR SERVICE

Santa Maria Public Airport has nonstop service to Las Vegas 

International Airport on Allegiant Air and Los Angeles 

International Airport on United Express (Table 4.1). Allegiant 

provides three weekly departures with the 150-seat MD-80 narrow-body jet. United Express, operated by SkyWest 

Airlines, provides an average of four daily departures (only three on Saturday) with the 30-seat Embraer 120 turboprop 

aircraft. The only anticipated change in Santa Maria’s schedule over the next 12 months is the loss of two departures per 

week to Los Angeles from September 2011 through March 2012 (reduction from four daily roundtrips to three on 

Tuesday and Wednesday).

TABLE 4.1 EXISTING AIR SERVICE

NONSTOP 

DESTINATION

MARKETING 

CARRIER AIRCRAFT

WEEKLY 

DEPARTURES

WEEKLY 

SEATS

Las Vegas, NV Allegiant Air MD-80 

(150-seat jet) 3 450

Los Angeles, CA United Express EMB-120 

(30-seat turboprop) 27 810

Total 30 1,260

Source: apgDat, August 2011

HISTORICAL AIR SERVICE

Historically, Santa Maria Public Airport has supported service to a variety of hubs/destinations including: Las Vegas, Los 

Angeles, Oxnard, Paso Robles, San Francisco, San Luis Obispo and Santa Barbara. The following summarizes the historical 

air service situation including: destinations, traffic levels, service providers and airfares. Extenuating factors that have 

affected air service over time is also reviewed.

T
SECTION 4. AIR SERVICE – EXISTING AND HISTORICAL

7

Destinations, Service Providers and Traffic 

Levels

During the last five years departures and seats have declined.

Exhibit 4.1 provides a summary of annual departures, seats

and enplanements from 2006 through 2010. During the fiveyear period, departures peaked in 2007. However, with the 

addition of Allegiant service to Phoenix-Mesa and Las Vegas, 

seats peaked in 2008. From 2006 to 2010, annual departures 

decreased 21 percent and seats decreased nine percent.

Enplanements improved through 2009 then declined from 

2009 to 2010 by 22 percent.

EXHIBIT 4.1 DEPARTURES, SEATS, AND ENPLANEMENTS

Source: apgDat; Airport records

Table 4.2 provides additional detail on average scheduled weekly departures and seats from 2001 through 2011 by 

destination and carrier. United Express provided nonstop Los Angeles service over the entire period; however, departures 

decreased from a high in 2001 of 50 per week to only 26 per week in 2011. During the period, Allegiant began service to 

Las Vegas in 2006 and has continued to do so with three departures per week. In 2007/2008, Allegiant also provided 

nonstop service to Phoenix/Mesa but pulled the service in 2008. Historically, Santa Maria Public Airport has not had the 

benefit of eastbound hub service flown by a mainline carrier.

TABLE 4.2 HISTORICAL DESTINATIONS AND SERVICE PROVIDERS

DESTINATION AIRLINE ITEM

AVERAGE SCHEDULED WEEKLY DEPARTURES/SEATS

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Las Vegas, NV Allegiant 

Air

Dept 3 3 3 3 3 3

Seats 431 450 488 450 438 438

Los Angeles, 

CA

United 

Express

Dept 50 40 41 41 41 34 34 33 27 27 26

Seats 1,500 1,200 1,230 1,230 1,230 1,010 1,020 978 803 810 790

Phoenix, AZ 

(AZA)

Allegiant 

Air

Dept 2 2

Seats 300 300

Average weekly departures 50 40 41 41 41 36 37 37 30 30 29

Average weekly seats 1,500 1,200 1,230 1,230 1,230 1,298 1,520 1,590 1,253 1,248 1,228

Source: apgDat

Las Vegas, NV

0

19,000

38,000

57,000

76,000

95,000

0

500

1,000

1,500

2,000

2,500

2006 2007 2008 2009 2010

Enplanements/Seats

Departures

Calendar year

Scheduled Departures Enplanements Scheduled Seats
SECTION 4. AIR SERVICE – EXISTING AND HISTORICAL

8

Airfares

Over the last five years, Santa Maria Public 

Airport’s average fares have far exceeded 

Santa Barbara, San Luis Obispo, the state of 

California, the West region and national 

averages as Table 4.3 shows. In 2010, Santa 

Maria’s average fare (excluding the impact of 

Allegiant’s low Las Vegas fares) were as much 

as 60 percent higher than the West region’s 

average fare, 30 percent higher than San Luis 

Obispo and 36 percent higher than Santa Barbara. Santa Maria’s fares were 59 percent higher than the national average. 

While Allegiant’s presence in the Santa Maria market dramatically improved fares to/from Las Vegas, their top origin and 

destination market, other options are needed in the Santa Maria marketplace to bring fares more in line with other 

airports regionally and nationally.

Extenuating Factors that have Affected Air Service

Air service at Santa Maria Public Airport has been affected by the close 

proximity of other commercial air service airports. Santa Barbara 

Municipal Airport is approximately 70 miles away, and San Luis Obispo 

County Airport is approximately 35 miles away. The larger Santa 

Barbara catchment area population resulted in more service at that

airport while airports serving the smaller Santa Maria and San Luis 

Obispo catchment areas competed vigorously for air service for their air 

travelers. The result is both airports having limited north/south service, 

but neither airport has service to either of the hubs at Salt Lake City 

or Denver.

The proximity of Vandenberg Air Force Base to Santa Maria Public 

Airport has proven to be a major generator of air travel, much of which 

would be best served by air service to a major eastbound hub. San Luis 

Obispo catchment area air travelers could be conveniently served by 

Santa Maria service to an eastbound hub. Such service would negate 

the need for air travelers from the two smaller catchment areas to drive 

over 70 miles to Santa Barbara to access service to an eastbound hub.

Past Air Service Development Efforts 

The Santa Maria Public Airport District Board of Directors has been actively involved in air service development. Over the 

past five years, the Board of Directors has worked closely with the community on air service development efforts and 

continues to do so. Since 2005, Santa Maria Public Airport has aggressively pursued new air service including:

• Delta Connection: Salt Lake City, two daily, CRJ-200 (2005)

• United Express: Denver, one or two daily, CRJ-200 (2006)

• Frontier Jet Express: Denver, two daily, CRJ-700 (2007)

• United Express/SkyWest Airlines: Denver, one or two daily, CRJ-200 (2010/2011)

TABLE 4.3 AVERAGE ONE-WAY FARE PAID

AVERAGE FARE SMX % 

2006 2007 2008 2009 2010 HIGHER

Santa Maria $209 $238 $295 $270 $253 

Santa Barbara $185 $191 $195 $176 $186 36%

San Luis Obispo $192 $195 $218 $206 $195 30%

California $151 $152 $159 $143 $160 58%

West Region $145 $145 $156 $141 $158 60%

US $150 $149 $160 $145 $159 59%

Source: Data Base Products, Inc.; excludes Allegiant Air
SECTION 4. AIR SERVICE – EXISTING AND HISTORICAL

9

For each of the initiatives, detailed market analyses 

and meetings at the airline headquarters have been 

completed. Market studies such as route forecasts 

and retention/diversion analyses have also regularly 

been conducted to keep the information current for 

use in these initiatives. In addition to the above, air 

service workshops have been held in the community 

to continue to educate the community on local air 

service issues, challenges and options for the Santa 

Maria Public Airport. In 2008, a $7 million Terminal 

Expansion Project was completed to meet the needs 

of Santa Maria Public Airport passengers for the 

foreseeable future, with future growth options 

incorporated into the design.

In 2004 Santa Maria Public Airport District was one of 13 airports that formed the California Airports Coalition and 

received a Small Community Air Service Development Program grant to evaluate the unmet air service needs in California.

This study evaluated the intrastate air service needs of these 13 communities as well as the primary travel demand of each 

community to non-California destinations. Importantly, even though the study was completed in 2006/2007 Denver 

surfaced as Santa Maria’s top non-California destination. This study focused the management at Santa Maria Public 

Airport on Denver and, as can be seen from the list of airline initiatives on the previous page, all of Santa Maria’s airline 

initiatives have targeted either Denver or Salt Lake City service.

This Small Community Air Service Development Program grant is the needed component to incentivize an airline to take 

the risk and operate service to Denver, consistently Santa Maria’s number one non-California market.
10

THIS SECTION CONTAINS:

Description of Santa Maria Public 

Airport’s air service needs and 

deficiencies

AIR SERVICE NEEDS AND 

DEFICIENCIES 

he Santa Maria area is underserved and overpriced, 

particularly to destinations located east of Santa Maria.

The Air Service Needs and Deficiencies section identifies 

the deficiencies in air service at Santa Maria Public Airport and 

what air service improvements are needed to correct these 

deficiencies. This section demonstrates that Santa Maria is 

underserved, and the average airfares in this community are 

higher than other comparable communities.

MAJOR ORIGIN/DESTINATION MARKETS NOT 

SERVED ADEQUATELY 

Only 33 percent of Santa Maria Public Airport’s catchment area passengers use the local airport. The existing air service to 

Los Angeles International Airport provides reasonable convenience to north/south air travelers along the heavily traveled 

West Coast. However, limited frequency in eastbound Los Angeles nonstop markets and a relatively limited number of 

eastbound destinations, particularly those where codeshare agreements exist, seriously reduce the convenience of Los 

Angeles eastbound connecting opportunities. Dissatisfaction with Los Angeles connecting routings is generally shown by 

lower retention percentages as illustrated in Table 5.1 in the top 15 Denver and east markets. Importantly, Denver and 

Colorado Springs are the area’s top two eastern origin and destination markets. 

TABLE 5.1 CATCHMENT AREA RETENTION AND DIVERSION OF 

PASSENGERS

TOP EASTERN MARKETS 

SMX 

RETENTION 

%

DIVERSION %

SBA LAX OTHER

Denver, CO 38 44 15 2

Colorado Springs, CO 74 17 7 3

Washington, DC (IAD) 63 16 15 6

Chicago, IL (ORD) 31 6 49 14

Orlando, FL 50 32 13 5

New York, NY (JFK) 21 17 54 8

Dallas, TX (DFW) 31 21 45 3

Houston, TX (IAH) 16 23 48 13

New Orleans, LA 29 33 31 7

San Antonio, TX 56 23 16 5

Boston, MA 48 32 16 4

Philadelphia, PA 43 15 40 2

Baltimore, MD 66 11 20 3

Nashville, TN 10 22 65 3

Atlanta, GA 33 26 30 11

Total Domestic 50 21 19 10

T
SECTION 5. AIR SERVICE NEEDS AND DEFICIENCIES

11

The most serious deficiency in Santa Maria’s service is the lack 

of service to an eastbound hub such as Denver or Salt Lake 

City. Service improvements are badly needed by Vandenberg 

Air Force Base and its’ associated aerospace contractors which 

have extensive air travel to/from Denver and Colorado Springs.

Santa Maria service to an eastbound hub would also serve the 

adjacent San Luis Obispo community. Santa Barbara-Denver 

service has operated at annual load factors ranging from 83 to 

89 percent for the 2006 through 2010 time periods making it 

hard to get a seat on those flights. Santa Maria service to 

either Salt Lake City or Denver would alleviate the need for 

Santa Maria or San Luis Obispo travelers to travel over 70 miles 

to Santa Barbara, where seat availability is limited, or drive

over 170 miles to Los Angeles.

HIGHER THAN AVERAGE FARES

High airfares combined with the lack of direct service to an eastbound hub push air travelers to divert to alternate airports 

for service to Denver and east. Table 5.2 compares calendar year 2010 Santa Maria average airfares with those of San 

Luis Obispo, Santa Barbara and Los Angeles in the catchment area’s top 15 markets Denver and east.

TABLE 5.2 AIRFARE COMPARISON

MARKET

AVERAGE FARE DIFFERENCE

SANTA 

MARIA

SAN LUIS 

OBISPO

SANTA 

BARBARA

LOS 

ANGELES SBP SBA LAX

Denver, CO $194 $149 $133 $111 $45 $61 $82 

Colorado Springs, CO $366 $192 $213 $211 $174 $154 $155 

Washington, DC (IAD) $324 $222 $190 $218 $103 $134 $106 

Chicago, IL (ORD) $196 $214 $198 $202 ($18) ($2) ($6)

Orlando, FL $330 $228 $230 $203 $102 $100 $127 

New York, NY (JFK) $287 $261 $211 $271 $26 $76 $17 

Dallas, TX (DFW) $241 $244 $205 $195 ($3) $36 $46 

Houston, TX (IAH) $381 $253 $193 $221 $128 $188 $160 

New Orleans, LA $276 $223 $206 $203 $53 $70 $73 

San Antonio, TX $287 $204 $193 $175 $84 $95 $112 

Boston, MA $237 $215 $209 $206 $22 $28 $31 

Philadelphia, PA $258 $243 $231 $241 $15 $27 $17 

Baltimore, MD $402 $265 $275 $188 $138 $128 $214 

Nashville, TN $285 $218 $204 $188 $67 $81 $97 

Atlanta, GA $471 $238 $199 $192 $232 $272 $279 

Source: Data Base Products, Inc.; CY 2010

Though this is a limited sample, it makes the case that Santa Maria’s fares in eastbound markets are overpriced compared 

to adjacent airports. One-way airfare differences are as high as $279 (Atlanta) with multiple markets exceeding $100 

one-way. Service to an eastbound hub with improved routings and added capacity will result in lower fares.
12

THIS SECTION CONTAINS:

• Strategic Plan 

• Alternate plan 

• Previous grant recipient with 

new project and goals

STRATEGIC PLAN –

AIR SERVICE

his Strategic Plan section provides a detailed description of the goals of the project and a primary and alternate plan 

for attaining those goals. This application reflects a new project with different goals from those detailed in Santa 

Maria’s 2002 grant award.

PROJECT GOALS

The following goals will be accomplished by the proposed Strategic Plan:

• Secure air service to a major airline’s hub located east of Santa Maria Public Airport

• Mitigate the need to use alternate airports to access adequate air service 

PROPOSED AIR SERVICE

The proposed Strategic Plan to meet the project’s goals is: Santa MariaDenver service, one or two daily Canadair Regional Jet 200 roundtrips 

operated by SkyWest Airlines/United Express (Exhibit 6.1). The effect of 

this plan on the project goals will be:

• Adding nonstop, regional jet service to United Airlines’ Denver 

hub will provide the region with direct access to its number one 

eastern destination and improve connectivity to markets located 

east of Denver.

• Nonstop service to Denver will reduce the number of passengers 

that are now diverting to other airports to fly to Denver or 

traveling to destinations east of Denver.

• Added capacity will provide greater availability of “cheap seats” 

thereby reducing Santa Maria’s higher than average airfares.

Lower airfares will influence passengers to use Santa Maria Public 

Airport that are now traveling to alternate airports.

AIRLINE PARTICIPATION

Over the past five years, members of the public-private partnership have met with United Airlines, Delta Air Lines and 

SkyWest Airlines regarding nonstop service to the hubs at Denver and Salt Lake City. Recent discussions with 

SkyWest/United have been positive. Because this is a new market, SkyWest/United’s willingness to serve Santa Maria 

depends on Santa Maria’s public-private partnership fulfilling its obligations and a grant award for this application.

T

EXHIBIT 6.1 ROUTE MAP

DEN

SLC

SMX
SECTION 6. STRATEGIC PLAN – AIR SERVICE

13

DETAILED MARKET ANALYSIS

A financial analysis and forecast has been completed for 

SkyWest/United service to Denver International Airport. Key 

points of the analysis are described below and the full analysis 

is included as Appendix B, Detailed Market Analysis.

Projections were completed for a one and two roundtrip 

schedule on a 50-seat Canadair Regional Jet. The operating 

and market assumptions are listed below:

• The Denver local market will be stimulated 50

percent for one roundtrip and 100 percent for two 

roundtrips. Connecting markets will be stimulated up 

to 10 percent for one roundtrip and 50 percent for 

two roundtrips depending on SkyWest/United’s market share of existing passengers. 

• SkyWest/United’s Santa Maria-Denver service will capture a share of the passengers now driving to an alternate 

airport (i.e. San Luis Obispo, Santa Barbara, and Los Angeles).

• Diversion from SkyWest/United’s existing Santa Maria-Los Angeles service was taken into consideration. 

• SkyWest/United’s fully allocated operating costs between Santa Maria and Denver were estimated using apgDat 

Form 41 data for SkyWest, adjusted by the manufacturer’s cost curve and SkyWest feedback. 

Table 6.1 provides a summary of the SkyWest/United Denver market analysis for one and two roundtrips per day on the 

50-seat Canadair Regional Jet 200. Passenger projections were based on a mature market (i.e., passenger projections 

would be at 100 percent on the first day of service). It is estimated that one roundtrip per day will generate $615,195 (15 

percent margin) in segment profit for SkyWest/United. Two roundtrips per day are projected to generate $804,531 (10 

percent margin) in segment profit for SkyWest/United. The Santa Maria-Denver route is forecast to be a strong economic 

performer for both SkyWest and United after ramp-up is complete. With an estimated 31 percent fully allocated system 

profit margin for one roundtrip and 29 percent for two roundtrips, this market will be self-sustaining.

Although it is estimated that 

SkyWest/United will earn a profit after the 

Santa Maria-Denver market matures, 

SkyWest/United will not generate this 

amount of profit at start-up. New markets 

typically have losses during the first year of 

operation, hence the need for a revenue 

guarantee to temper the airline’s risk. The 

uncertainty in the airline industry including 

the fluctuating cost of fuel will play a large 

part in the revenue guarantee negotiations 

with SkyWest/United.

TABLE 6.1 SANTA MARIA-DENVER MARKET ANALYSIS

ITEM STATISTICAL CATEGORY

1 

ROUNDTRIP

2 

ROUNDTRIPS

1 Available seats per departure 50 50

2 Segments per day 2 4

3 Onboard passengers 28,545 54,437

4 Load factor 78% 75%

5 Average fare all markets $268 $276 

6 Segment 1 revenue $4,093,808 $7,761,756 

7 Segment 1 cost $3,478,613 $6,957,225 

8 Segment 1 profit margin $ $615,195 $804,531 

9 Segment 1 profit margin % 15% 10%

10 System revenue $6,267,277 $12,312,614 

11 System cost $4,326,266 $8,732,060 

12 System profit/loss $1,941,011 $3,580,554 

13 System margin 31% 29%

Source: Mead & Hunt, Inc.
SECTION 6. STRATEGIC PLAN – AIR SERVICE

14

ALTERNATE PLAN

If Santa Maria Public Airport fails to obtain SkyWest/United 

service to Denver, the secondary target is Delta Air Lines’

service to Salt Lake City. Consistent with the intent of the air 

service initiative proposed, Delta’s Salt Lake City hub fills the 

need for service to a hub airport located east of Santa Maria.

A previous analysis of this option that was completed for a 

presentation to Delta planners indicated that the service would 

perform well for Delta. Frontier Airlines’ service to Denver or 

US Airways’ Phoenix service would also meet the goals of this 

grant application.

PREVIOUS GRANT RECIPIENT - NEW PROJECT 

AND GOALS

In 2002 the Santa Maria Public Airport District was awarded a Small Community Air Service Development Program grant.

The 2002 grant goals included the following:

• Recruit jet service to areas not currently served

• Increase service from the current carrier

• Attract a new carrier to stimulate competition thus creating competitive fares

• Increase community awareness with regard to recruiting air carriers to the area

The US Department of Transportation’s portion of the project budget, $217, 530, included a plan for partial funding of 

an air service marketing program and support for a leakage study.

The 2002 application’s goals targeted the improvement of overall air service at the Airport through marketing, research 

and meeting with airlines. This 2011 application is focused on securing service to a major airline hub whose location 

promotes the flow of passengers to markets east of Santa Maria. By adding high value service to the east, passenger 

diversion will be reduced and the added capacity will push airfares down further attracting travelers that are now using 

alternate airports. Also, the 2011 implementation plan is different from the 2002 application. This year’s plan includes a 

revenue guarantee, airport fee waivers and marketing program specifically supporting new service to eastern 

hubs/destinations. 

In summary, the goals and plan associated with this 2011 grant application are different from Santa Maria’s 2002 grant 

application/award. Accordingly, this application qualifies as a new project and meets the requirements of the Small 

Community Air Service Development Program.
15

THIS SECTION CONTAINS:

• Public-private partnership

• Designation of a legal sponsor

• Funding

• Sustainability of the project

STRATEGIC PLAN –

IMPLEMENTATION AND FUNDING

his section, Strategic Plan - Implementation and Funding, details the incentive and support plan required to 

implement the Strategic Plan. A legal sponsor has been designated and a public-private partnership that will 

actively participate in implementing the proposed project has been formed. Also, this section addresses the selfsufficiency of the service and provides a description of the community’s plan to continue the project if it is not selfsustaining after the grant funds are expended. A project budget and breakdown of the sources of funds is included.

PUBLIC-PRIVATE PARTNERSHIP

Santa Maria Public Airport District is the sponsor of this grant 

application. For the purpose of this application, Santa Maria 

Public Airport District, the Santa Maria Valley Chamber of 

Commerce & Visitor & Convention Bureau and the Santa Maria 

Economic Development Commission have formed a publicprivate partnership (refer to community support letters in 

Appendix A). Collectively, this partnership is committed to 

completing the Strategic Plan outlined herein.

All partners in the public-private partnership will be involved in 

the execution of the Strategic Plan (Table 7.1). Santa Maria

Public Airport will execute all federal grant offers, process 

associated reimbursement requests, oversee grant 

administration, and manage the revenue guarantee. The Santa 

Maria Valley Chamber of Commerce & Visitor & Convention

Bureau along with the Santa Maria Economic Development 

Commission will assume responsibility for the implementation 

and management of the marketing program associated with the 

proposed service.

INCENTIVE AND SUPPORT PLAN

The public-private partnership proposes a community support package that has been tested and proved to be successful 

in acquiring airline service and generating new passengers. To reduce SkyWest Airlines/United Express’ breakeven period 

and offset the economic risk during start-up, the public-private partnership proposes the following incentives (Exhibit 

7.1, next page):

• Revenue guarantee: reduce airline economic risk

• New service marketing campaign: create new service awareness for SkyWest/United 

• Airport fee waivers: reduce airline start-up costs

T

TABLE 7.1 PUBLIC-PRIVATE PARTNER ROLES

PUBLIC-PRIVATE 

PARTNER ROLE

Santa Maria Public Airport 

District

Grant and revenue 

guarantee administration

Santa Maria Valley 

Chamber of Commerce &

Visitor & Convention

Bureau

Coordination of the 

marketing program

Santa Maria Economic 

Development Commission

Coordination of the 

marketing program
SECTION 7. STRATEGIC PLAN – IMPLEMENTATION AND FUNDING

16

Revenue Guarantee

To reduce airline risk and provide an incentive for SkyWest/United 

to provide nonstop service to Denver, this Strategic Plan includes 

a revenue guarantee. Although pro forma projections for new 

eastbound hub service are positive (Appendix B), service ramp-up 

and breakeven can take up to a year. It is anticipated that 

SkyWest/United will require a $600,000 revenue guarantee to 

mitigate the risk of starting this new market. The exact terms of 

the revenue guarantee agreement are subject to 

further negotiations.

Marketing Campaign

The success of the proposed service between Santa Maria and 

Denver will live or die based on the success of the marketing 

program. Making local travelers aware of the new, nonstop 

regional jet service to Denver and influencing the thousands of 

travelers that are now driving to alternate airports to use the local 

airport is the key. It helps that the new service will have the 

United Express brand, and United Express is already in the Santa 

Maria market, but this does not guarantee the success of the 

Denver service. The importance of an aggressive promotion 

campaign cannot be overemphasized. 

Table 7.2 provides a breakdown of the marketing dollars to be 

spent on maximizing passenger utilization of new flights between 

Santa Maria and Denver. This $50,000 campaign will be funded 

by non-airport funds through Santa Maria Economic Development 

Commission ($20,000 cash and $10,000 in-kind) and airport 

funds through the Santa Maria Public Airport District ($20,000 

cash). The Santa Maria Economic Development Commission and 

the Santa Maria Valley Chamber of Commerce & Visitor & 

Convention Bureau will be responsible for management and 

implementation of the marketing campaign.

The marketing campaign will include a kick-off phase utilizing 

public relations and social media, an on-going media campaign and a promotional event with a media partner 

approximately three months after kick-off. The marketing campaign will be monitored and adjusted as necessary for 

maximum results.

KICK-OFF PHASE

A social media campaign will help get the word out. S. Lombardi & Associates’ social media expert will set up and 

maintain social media accounts and be responsible for gathering, networking and informing fans and followers of the 

latest updates in air travel specials and new flights out of Santa Maria Public Airport. The firm will work to create 

awareness of the convenience of the Santa Maria Public Airport and generate more traffic to its website and location.

TABLE 7.2 MARKETING BUDGET

DESCRIPTION CASH

INKIND TOTAL

Kick-Off Phase

Public relations $1,000 $0 $1,000 

Social media $600 $0 $600 

On-Going Media

Television airtime and 

commercial 

production

$29,600 $0 $29,600 

Targeted email 

campaign $2,000 $0 $2,000 

Print media $2,000 $0 $2,000 

Promotional Event

Television airtime $4,800 $0 $4,800 

Program Administration

Santa Maria Economic 

Development 

Commission 

$0 $10,000 $10,000 

Total $40,000 $10,000 $50,000 

Service initiation

SkyWest

Airlines

Revenue 

guarantee

Marketing 

campaign

US DOT

Non-Airport

Non-Airport

Fee 

waivers

Airport

EXHIBIT 7.1 INCENTIVE PLAN
SECTION 7. STRATEGIC PLAN – IMPLEMENTATION AND FUNDING

17

Public relations will also be utilized to help secure news coverage of the 

announcement of new flights coming to Santa Maria. A professionally 

organized news conference will be a key part of the initial public 

relations effort. 

ON-GOING MEDIA

A six-month on-going media campaign is proposed with television 

advertising as the core. This campaign will start immediately following 

the press conference announcing the new flights. Santa Maria-based 

television stations KCOY (CBS) and KKFX (FOX) will be primary buys, 

with Comcast Cable (in Santa Maria, Lompoc and Santa Ynez Valley 

areas) and San Luis Obispo-based KSBY-TV (NBC) as secondary buys.

The “Central Coast Now” package from KCOY/KKFX gives very good 

frequency for the money. This can be supplemented with targeted buys 

in News and other appropriate programming on KCOY/KKFX and 

KSBY. The budget of $29,600 will be spent on television airtime and 

commercial production, spread over six months, with a higher 

proportion being spent near the kick-off.

A targeted email campaign will also be used and directed at persons 

likely to be higher income, frequent fliers and/or skiers. For print media, 

small, targeted publications such as the Pacific Coast Business Times, which reaches business owners and managers who 

are likely to travel frequently and be decision makers for corporate travel, will be used. Chamber of Commerce 

publications will also be used to reach this target market.

PROMOTIONAL EVENT

Partnering with a media outlet for a contest will inject some fun and energy into the campaign about three months after 

the kick-off. With easily-arranged support from public and private entities in the Denver area and from SkyWest/United, a 

trip to the Denver area including airfare, accommodations and activities will be given away.

Fee Waivers

The air service support program includes three fee waivers: landing fees, terminal fees and fuel flowage fees. The Airport 

will waive landing fees for the first 12 months of new service. Landing fees for the first 12 months are estimated at 

$20,000 assuming the use of the Canadair Regional Jet with one roundtrip daily. An additional six months of landing fees 

will be offered as part of the sustainability initiative following the one-year anniversary of service. The landing fee waiver 

may vary depending on aircraft type used and the number of roundtrips offered.

The Airport will waive common use terminal fees for the first six months of service. These fees are estimated at $15,000

for the first six months. Fuel flowage fees will also be waived for the first 12 months of service worth an estimated 

$20,000. An additional six months of terminal and fuel flowage fees will be offered as part of the sustainability initiative 

following the one-year anniversary of service.
SECTION 7. STRATEGIC PLAN – IMPLEMENTATION AND FUNDING

18

PROJECT CONTINUATION AND SUSTAINABILITY

Based on positive pro forma projections for SkyWest/United service to Denver, it is anticipated that new eastbound hub 

service will be self-sustaining after the start-up period which can take up to a year. A leading cause of service failure is 

lack of awareness in the community. The public-private partnership will fund an additional $30,000 marketing campaign 

if at the end of the first year of service the average load factor for the 12-month period averaged less than 70 percent.

Additionally, Santa Maria Public Airport will abate landing, terminal and fuel flowage fees for an additional six months, a 

savings of $35,000 for SkyWest/United. The public-private partnership and the Santa Maria business community are 

committed to the success of this project and understand the difficulties associated with profitably operating new 

air service.

STRATEGIC PLAN FUNDING

The public-private partnership is requesting US Department 

of Transportation’s assistance in funding 67 percent, or 

$490,000 of the Strategic Plan (Exhibit 7.2). Specifically, 

US Department of Transportation funding will be used to 

partially fund the revenue guarantee. The balance of the

revenue guarantee and all other elements including the 

marketing campaign, Strategic Plan monitoring, airline 

negotiations and airport fee waivers will be funded by the 

community. Table 7.3 provides the Strategic Plan budget 

by element and sources of funding. The Airport and 

community will fund 33 percent of the total proposed air 

service program. Non-airport funding sources will provide 

20 percent of the cash requirement and 19 percent of the 

funding for the total program including in-kind services.

TABLE 7.3 STRATEGIC PLAN BUDGET

DESCRIPTION

FUNDING SOURCE

TOTAL

US DOT AIRPORT NON-AIRPORT

CASH CASH

INKIND CASHINKIND

Airline incentive program:

 Marketing campaign $20,000 $20,000 $10,000 $50,000 

 Revenue guarantee $490,000 $110,000 $600,000 

 Fee waivers:

 Landing fees $20,000 $20,000 

 Terminal fees $15,000 $15,000 

 Fuel flowage fees $20,000 $20,000 

Consultant fees:

 Airline negotiations $10,000 $10,000 

 Strategic Plan monitoring $15,000 $15,000 

Total $490,000 $45,000 $55,000 $130,000 $10,000 $730,000 

Percent of total project 67% 6% 8% 18% 1% 100%

Percent of cash contribution 74% 7% N/A 20% N/A 100%

Cash: NonAirport

18%

Cash: US 

DOT

67%

Cash: 

Airport

6%

In-Kind: 

NonAirport

1%

In-Kind: 

Airport

8%

EXHIBIT 7.2 CASH VS IN-KIND FUNDING
19

THIS SECTION CONTAINS:

• Schedule and milestones for 

timely completion of the 

project

• Monitoring program

SCHEDULE AND 

MONITORING

realistic timetable for implementation of the grant project has 

been developed to achieve the project goals and ensure the

timely use of the grant funds. This section details the milestones 

and a monitoring program to track the progress of the project.

SCHEDULE AND MILESTONES

The following milestones are proposed to track the progress of this air 

service initiative. A timeline follows on Exhibit 8.1, next page.

• Airline negotiations: After the grant is awarded and 

agreement is signed, the public-private partnership will contact 

SkyWest Airlines/United Express and continue airline 

negotiations.

• Marketing campaign development/initiation: While the airline agreement is being finalized, the marketing 

campaign will be developed. The timing of the marketing campaign is critical; ideally, marketing would begin 30 

to 60 days prior to new service initiation. Development of the marketing campaign is dependent on the timing 

of SkyWest/United’s announcement and initiation of daily Denver service.

• Service initiation: The public-private partnership anticipates daily service to Denver would begin in spring/early 

summer of 2012 following successful negotiations with SkyWest/United. The remaining elements of the 

Strategic Plan depend on this date. The public-private partnership understands the realities of the airline 

industry; airline route planning and availability of right-sized aircraft are critical to air service initiation and may 

delay the service start date.

• Revenue guarantee contract completion: The revenue guarantee will be calculated based on the terms of 

the agreement, typically at the end of the first year of service. Assuming a June 2012 start date, the revenue 

guarantee contract would expire May 2013. If the service start date changes due to airline circumstances and/or 

equipment availability, the revenue guarantee contract term will change accordingly.

• Alternate plan: SkyWest/United service to Denver is the primary target of the Strategic Plan. If SkyWest/United

does not show interest in starting service by May 2012, then Delta Air Lines’ service to Salt Lake City will be 

pursued. If neither air carrier has shown interest in implementing the proposed service by December 31, 2012, 

Santa Maria Public Airport District will propose an alternate plan that meets the goals of this grant application.

A
SECTION 8. SCHEDULE AND MONITORING

20

The timeline proposed in Exhibit 8.1 is highly contingent 

on the timing of the grant award and successful airline 

agreement negotiations. If either is delayed, other 

elements on the timeline will be pushed back.

MONITORING PROGRAM

Monitoring new air service initiatives is critical to success.

Given the turbulent state of the aviation industry, airline

staff do not have the time to monitor small markets on a 

regular basis as other initiatives often take priority. Given 

this, an aggressive and comprehensive monitoring 

program is proposed for new Santa Maria-Denver

service. The monitoring program includes: service 

performance tracking, assessing the effectiveness of the 

marketing campaign and determining the impact of the 

service on retention of catchment area passengers at 

Santa Maria Public Airport. The Strategic Plan will be 

monitored as follows:

• Available service performance indicators will be 

reviewed on a monthly basis. The indicators are 

dependent on availability of data reported by 

the airline to the US Department of 

Transportation and data reported to the 

Airport. It is anticipated that the following 

indicators will be reviewed monthly: 

departures, available seats, enplaned 

passengers and load factors.

• On a quarterly basis, average airfares will be 

compared and evaluated to prior quarters.

Published airfares will also be tracked via one of 

the Global Distribution/Computer Reservations 

Systems (GDS/CRS). Revenue per available seat 

mile will be reviewed and compared against 

other markets served by SkyWest/United 

at Denver.

• On an annual basis, an updated 

retention/diversion study will be completed to 

assess the impact of the service on retention of 

passengers at the local airport.

EXHIBIT 8.1 PROPOSED TIMELINE

June1, 2012

May 30, 2013 End of first year of service; 

Revenue guarantee calculated

Monthly/quarterly service 

performance monitoring

January 1, 2012

February 28, 2012

December 31, 2011 Grant award

Continue airline negotiations

Finalize airline negotiations and 

marketing plan

United Express initiates daily 

DEN service

April1, 2012 Marketing begins
21

THIS SECTION CONTAINS:

Letters of support from members of 

the public-private partnership, the 

local business community, and 

state government.

APPENDIX A.

COMMUNITY SUPPORT

ppendix A includes letters of support for the Santa Maria Public Airport’s application to the US Department of 

Transportation for eastern hub service. Support letters were submitted by participants in the public-private 

partnership and members of the Santa Maria community. The letters of support are included on the following 

pages of this Appendix A and are listed below.

PUBLIC-PRIVATE PARTNERSHIP

Santa Maria Economic Development Commission

Santa Maria Valley Chamber of Commerce & Visitor & Convention Bureau

GOVERNMENT

City of Santa Maria – Mayor Larry Lavagnino

BUSINESS AND COMMUNITY SUPPORT

Diani Companies

Hardy Diagnostics

Quintron Systems, Inc.

Your People Professionals

A







29

THIS SECTION CONTAINS:

An in-depth analysis evidencing 

familiarity with the target markets 

and ultimate success of the 

proposed Strategic Plan.

APPENDIX B. DETAILED 

MARKET ANALYSIS

onfidential submission of the Santa Maria Public Airport, Santa Maria, CA.

C