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Analysis 

& Development • ' ' " 

Memorandum 

Date: November 17, 2011 

To: City of International Falls and the Falls International Airport Commission 

From: Donna Koren, Senior Management Consultant 

Management Analysis & Development 

Subject: Community input on air service needs 

Background 

Scheduled commercial air service in International Falls is undergoing a significant change, with 

Delta Airlines' aimouncement of their intention to cease providing service to this community. 

Under the US Department of Transportation's Essential Air Service program, another carrier has 

submittsd a proposal to initiate service in International Falls. The City's consents on this 

proposal, regarding proposed schedule, fares, reliability, and equipment "fit" for the community, 

are due to USDOT by November 21, 2011. 

The City of Intematiorial Falls, in cooperation with the Falls Airport Commission, contracted 

with Management Analysis & Development (Minnesota Management & Budget) to gather 

community and customer input on their air service needs and preferences. (The interview guide 

is included at the end of this memo.) Nine community members were interviewed, including 

repre^pntatives of the Economic Development Authority, Convention and«,yi&itors' Bureau, one 

of the area's largest employers, a travel agency, and long-time business owner in the tourism 

industry. Staff from the Ft. Frances (Ontario) Chamber of Commerce and an Ontario«outfitter 

also were interviewed, as the airport (INL) brings many travelers to and from this part of Canada 

for business and recreation. 

Following is a summary of major themes and supplementary data that arose from the interviews. 
Context 

As a preface, interviewees were adamant about the need for reliable, convenient air service to 

support the viability of International Falls, itself. For example, they noted: 

• Commercial air services enables the City to host US and international automakers, 

suppliers, and other equipment manufacturers to conduct significant cold-weather testing 

operations in November through March, each year. 

• The University of Minnesota's School of Physics and Astronomy runs a neutrino 

laboratory (NOvA) near International Falls, which draws top-level researchers from 

across the country. 

• International Falls hosts a watershed symposium that draws approximately 150 visitors 

each spring. 

• Emerging high-tech industries also are seeking cold-weather environments where they 

canbase their operations.' "* V • ' . 

• And numerous recreational events are scheduled throughout the year, attracting hundreds 

of visitors from across the country and internationally. And as discussed below, while 

recreation-focused travelers have found work-arounds (for example, driving, chartered 

planes, other airports) to get to International Falls and nearby Ontario, INL historically 

has demonstrated that it can be a significant and steady point of entry for vacationers, 

ensuring a consistent stream of tourism dollars into the local economy. A few 

interviewees noted that in the last decade, when a previous carrier provided more flights, 

the community generated enough demand to fill five flights in the summertime. 

Economic viability of this unique area in Minnesota requires reliable^,, convenient, affordable 

commercial air service. And in turn, greater development of the Falls' economy in part through 

better air service will ensure a stable customer base for thosft.carriers providing service. 

Schedule * 

ffeing able to complete a trip from departure to final destination in a single, albeit long, day is 

viewed as extremely important. Interviewees were mostly consistent in favoring early morning 

(600 - 700) and early afternoon (around 1200) departures from INL and a late evening return to 

INL (2100 - 2300). The early morning flight is important to make connections out of MSP to 

points east and west, the afternoon flight can take "overflow" from the morning, and the later 

return enables travelers to return home to International Falls after arrival to MSP during the day. 

Plus, a few interviewees wanted to make sure that a plane was overnighted at INL so that it was 

there for the morning departure. They indicated that the proposed schedule from Great Lakes 

would meet their needs regarding schedule and connections, as long as the flights were reliably 

provided. 

' "Luring 'server farms': Minnesota targets a burgeoning industry that actually likes the coW," 

MinnPost.com, November 3, 2011. 

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However, a number of interviewees projected that three flights during the summer tourist season 

would be insufficient to meet demand, and business travelers and representatives expressed 

concern that there wouldn't be seats available if they needed to book on shorter notice than 

vacationers (many of whom book trips months ahead of time). One very-frequent business flier 

said that he has had to drive to Bemidji and Hibbing to get short-notice flights to MSP in the 

summertime, because flights out of INL have been completely booked. 

Many felt that a fourth flight, if priced right, would be sustainable during summer months, 

particularly in July and August, with others proposing a longer season for the fourth flight 

(May through September). Some noted that a larger plane could serve the same purpose and 

perhaps attract additional fliers (such as travelers with larger recreational gear/baggage; and 

those who would choose to fly to INL instead of drive if the plane was more comfortable, 

including featuring a lavatory). 

Reliability 

Closely related to a schedule that enables same-day cormections out of Minnesota, perceived 

reliability of the schedule is extremely important. Interviewees noted that it only takes missing 

an important business meeting, or a vacationer losing a day of fishing because of a canceled 

flight, for a traveler to abandon INL as an option. "If staff are delayed a lot, and people are 

missing connections, they will make other arrangements the next time, particularly staff who 

need to make meetings and know that the flight is historically not reliable to come in when it's 

snowing or really cold. They will drive to MSP." 

Fares 

The-cost to fly ranked as a significant factor in whether business and particularly leisure travelers 

fly through INL. An interviewee from a major area employer said that, "costs will play into how 

much travel we do from INL. If fares are too high, some will drive to MSP or Duluth." However, 

business travelers are considered more likely to favor schedule and reliability over fare, 

depending on how time-sensitive their work is. 

On the other hand, experience has shown that as fares and fees have risen, the recreational 

travelers abandon INL. For example, a business owner in tourism noted that when Delta took 

over service after acquiring Northwest Airlines, and added charges for baggage and recreational 

gear (coolers, fishing poles, etc.), large fishing parties started flying into MSP and then rented a 

van to drive to International Falls or into Canada. Some, particularly from Chicago, also will fly 

into Duluth and rent a van, as that is less expensive than flying into INL. Large parties and 

businesses also have been chartering their own planes. This interviewee thought that $600 

inclusive per person was about the price point at which his customers, who come from all over 

the United States, would change their travel patterns. 

Some suggested that a $99 add-on to MSP would greatly increase demand. 

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*. 
Equipment 

Opinions varied regarding the impact of the aircraft's type and size on travelers' propensity to fly 

out of INL. Great Lakes is proposing to provide service with a Beechcraft 1900, a 19-seat 

turboprop. 

Some said that everyone who is already flying in and out of INL is essentially used to somewhat 

uncomfortable planes. One interviewee said, "If you only have one horse, you'll probably ride 

that horse." It's a short flight to MSP, and so a number of interviewees didn't think the plane 

model would make much difference in travel choices. The appearance and noise factor of the 

prop wasn't seen as a significant barrier. A few suggested that if it is a perceived barrier, new 

customers will give it a try if the prices are attractive enough. 

Other interviewees noted however that for older or infirm travelers, not having a lavatory on 

board could be a barrier. Some also suggested that a larger, more comfortable plane, particularly 

in the summer tourist season, would attract more passengers than even additional flights with 

smaller planes, that the smaller planes were indeed a barrier for less-frequent travelers and that 

some have in fact chosen to drive to MSP rather than fly on them. One interviewee noted that 

when INL had jets, summer/recreational travelers would wait for those flights as they were 

perceived as safer and more comfortable. 

Codesharing 

Interviewees had different perspectives on the importance of codesharing (agreements between 

carriers to enable seamless connections for fliers through single-ticketing mechanisms and 

luggage follow-through)« S,«qie said, essentiailly that the business traveler will fM. up with, 

whatever needs to be done in order to get to where s/he needs to go as quickly as possible. 

Others said that codesharing is "one pf the key things that needs to be worked out," as they said 

travelers would drive to Duluth or MSP to avoid having to pick up their luggage at MSP for rechecking. (As well, going through security twice, given that MSP is the second checkjjpint, ' 

would be considered very inconvenient.) In addition, some interviewe.e»pointed out that without 

codesharing, travelers would have to negotiate \yith the coimecting carrier if their first flight out 

was delayed or canceled, causing the traveler to miss the connection. This is viewed as a huge 

disincentive to fly with an unaffiliated carrier, when MSP is not the final destination. 

A few interviewees raised the issue of travel between terminals at MSP. If a regional carrier was 

gated at Terminal 2, support services for older or infirm passengers would need to be ensured so 

that travelers could make their connections safely and comfortably. 

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Mileage rewards programs 

Interviewees had differing feelings regarding the importance of rewards programs. Some didn't 

think that it was that significant, relative to the more important factors of schedule/coimections, 

reliability, and fares. However, those who felt they had a significant stake in Delta's rewards 

program said that they would consider changing their travel pattern, specifically, drive to another 

airport where Delta is maintaining service, to earn mileage for that segment to MSP. 

Marketing opportunities 

Interviewees had a number of ideas for promoting greater use of INL. One noted that there are 

"all sorts of events" going on all of the time in Minneapolis/St. Paul that a regional carrier joul^ 

promote in partnership with hotels and entertainment organizations: sportmg..eil?pnts, holiday 

shopping at the Mall of America, theater and concerts, and other focal^in^g for "weekend 

getaways" or even same-day trips. Conversely, International Falls can maptet trips up north in 

the Twin Cities and other markets for its year-round events. 

In particular, an interviewee noted that Voyageurs National Park can't advertise itself, per se; 

this would be an area for a carrier to work with the City, Visitors and Convention Bureau, 

lodges, camps, outfitters, and other partners to draw new tourists up through the airport. A 

number of organizations suggested working together with the carrier(s) to offer and promote 

packages at the point of sale, such as sharing the cost of advertising. 

Another opportunity was raised by an outfitter: he noted that a number of park and camp visitors 

will ship their gear up through Federal Express or UPS so that they can fly in and avoid the" 

baggage and gear fees and general inconvenience. The area limousine service will pick up the 

equipment and transport it and the guests to their destination. He suggested that this idea could 

be promoted as part of a package to fly into the Falls. 

Several interviewees brought up the demand for flights to points far south in the winter time. 

An interviewee from the Ft. Frances Chamber said that Canadians will drive to INL en route to 

Mexico and the southern United States because it's closer for them than driving to a Canadian 

airport. 

This interviewee noted more generally that INL is the most convenient airport for business and 

government agencies in the Ft. Frances part of the catchment area. Hff ^continued that although 

business travelers know about INL in general, it's not their first thought when looking up flights; 

they automatically look at Canadian airlines. Therefore, he suggested that the two cities. 

Chambers, the airport, etc. ramp up regular marketing to increase awareness. 

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Other markets/hubs 

Interviewees were asked about the potential for a direct flight to Chicago and other hub 

destinations. Some didn't think that there would be enough demand to sustain a Chicago flight 

year-round. 

At the same time, a number of interviewees expressed personal interest and thought that it would 

be widely used, as more connections can be made out of Chicago than M§P, One of the Falls' 

major employers has a headquarters in Chicago; and one interviewee said, "without question, if 

they-don't codeshare [with Delta out of INL], that's the first thin^I \vill look at; United [for 

Vhich Chicago is a hub] will go anywhere in bad weather." Others saM that many recreational 

Mvelers to the area come from Chicago, and that ease of flying in directly from there "would be 

h'uge." ^ ^ s 

Other major cities suggested as potential markets included Milwaukee and Detroit. Still, some 

expressed reluctance to lose MSP as their primary hub, if a choice had to be made at some future 

point. 

INL selling points 

Interviewees were in agreement for the most part on INL's strongest attractions for travelers: free 

and ample parking, close-to-home, courteous and attentive service at INL terminal, and ease of 

check-in and security. ("Everyone knows each other." and "There are very few people there; they 

can get a flight of passengers through in 15 minutes.") Others noted that the hotels and resorts 

provide airport-to-lodging shuttles so that once passengers arrive in INL, they don't have to 

drive. 

'4. 

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Community interview questions 

November 2011 

[Send proposed Great Lakes flight schedule ahead of time with interview guide] 

1. Please describe the general travel patterns of the fliers your organization represents. 

a. Who is flying frequently? 

b. For what purposes? 

c. To what extent is their travel seasonal? 

2. How effectively would the proposed air service meet the needs of these fliers? 

a. What works in the potential schedule? 

b. Where would there be gaps? 

c. What would you recommend as to summer capacity, relative to the proposed 

schedule from Great Lakes? . •.•••..••. 

. ^ • 

3. What would optimal service look like? What would be the features, and what community 

needs would they address? 

4. What are the factors that lead travelers to drive to MSP or other airports, rather than fly 

out of INL? To what extent are the following factors relevant? 

a. Schedule not convenient 

b. Connections not convenient 

c. Not sure about service reliability 

d. More cost-effective to drive to another airport or to final destination (difference in 

fares) 

e. Plane comfort 

f. Other 

5. To what extent is an airplane's size, model, and method of boarding relevant to your 

fliers? What do yoji think can be done in terms of marketing or education to improve 

comfort level 'With smaller or turboprop aircraft? • 

6. To what extent are rewards programs a factor when fliers choose a carrier? What would 

entice fliers to use a different carrier? 

7. How important is codesharing (agreements between carriers to enable seamless 

connections) for any potential new carriers? Which aspects (ticketing, checkin/security, baggage handling)? 

a. If a new regional carrier did not have a codesharing agreement with a major 

carrier, to what extent would this suppress demand among the fliers you 

represent? 

Page? 
What factors would increase (business and community) demand for air travel, to make 

service sustainable? Where are there pockets of untapped demand that could be cultivated 

through marketing, education, introductory specials? 

a. To what extent would direct flights to Chicago be a new or increasable market? 

b. What other hub destinations would be able to sustain scheduled service from INL, 

among the fliers you represent? 

What are the strongest selling points for flying out of INL? What do your fliers 

appreciate most? If INL and new carriers undertake more aggressive marketing in the 

community (and in other communities), what are the features that they should 

emphasize? 

a. Free parking 

b. Easy/fast check-in (in contrast to long security lines at MSP..) 

c. Saves gas/time by not having to drive to another airport 

. 4 .Free Wi-Fi! and other amenities in the terminal 

e. Supporting a community resource 

10. What kinds of partnerships (business/community/state and local government) make sense to 

provide incentives to carriers? 

a. What would your organization be willing to provide as incentive for improved 

service? 

*>;• in,-: : • 

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