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### Managemen t Analysi s & Development

• ' ' "


# Memorandu m Date : Novembe r

17 , 201 1 To : City o f

Internationa l Fall s an dth e Fall s Internationa l Airport Commissio n From : Donn aKoren , Senio r Managemen t

Consultan t Managemen t

Analysi s & Developmen t Subject : Communit y inpu t o n ai r servic e need s
Backgroun d Schedule dcommercia l ai r servic e i n Internationa l Fall s i s undergoin g asignifican t change , with Delt aAirlines ' aimouncemen t o f thei r intentio n t o ceas e providin g servic e t o thi s community
. Unde r th e U S Departmen t

o f Transportation' s Essentia l Ai r Servic e program , anothe r carrie r ha s submitts daproposa l t o initiat e servic e i n Internationa l Falls
. Th e City' s consent s o n thi s proposal , regardin g propose dschedule , fares , reliability , an dequipmen t "fit " for th e community , ar e du e t o USDO T b y Novembe r 21 , 2011
. Th e Cit y o f

Intematioria l Falls , i n cooperatio n with th e Fall s Airport Commission , contracte d wit h Managemen t

Analysi s & Developmen t (Minnesot aManagemen t & Budget ) t o gathe r communit y an dcustome r inpu t o n thei r ai r servic e need s an dpreferences
. (Th e intervie w guid e i s include da

t th e en do f

thi s memo. ) Nin e communit y member s wer e interviewed , includin g repre^pntative s o f

th e Economi c Developmen t Authority , Conventio n and«,yi&itors ' Bureau , on e o f th e area' s larges t

employers , atrave l agency , an dlong-tim e busines s owne r i n th e touris m industry
. Staf

f fro mth e Ft
. France s (Ontario ) Chambe r o f Commerc e an da

n Ontario«outfitter als o wer e interviewed , a s th e airport (INL ) bring s man y traveler s t o an dfro mthi s part o f Canad a for busines s an drecreation
. Followin g i s asummary o f majo r theme s an dsupplementar y dat atha t aros e fro mth e interviews
.Contex t

A s apreface , interviewee s wer e adaman t abou t th e nee dfor

reliable , convenien t

ai r servic e t o support th e viabilit y o f

Internationa l Falls , itself
. Fo r example , the y noted : • Commercia l ai r

service s enable s th e City t o hos t U S an dinternationa l automakers , suppliers , an dothe r

equipmen t

manufacturer s t o conduc t significan t

cold-weathe r

testin g operation s i n Novembe r

throug h March , eac h year . • Th e Universit y o f

Minnesota' s Schoo l o f

Physic s an dAstronom y run s aneutrin o laboratory (NOvA ) near

Internationa l Falls , whic h draw s top-leve l researcher s fro m acros s th e country . • Internationa l Fall s host s awatershe dsymposiu mtha t draw s approximatel y 15 0 visitor s eac h spring
. • Emergin g high-tec h industrie s als o ar e seekin g cold-weathe r environment s wher e the y canbas e thei r

operations. ' " * V • '
. • An dnumerou s recreationa l event s ar e schedule dthroughou t th e year , attractin g hundred s o f visitor s fro macros s th e country an dinternationally
. An da s discusse dbelow , whil e recreation-focuse dtraveler s hav e foun dwork-around s (for example , driving , chartere d planes , othe r

airports ) t o ge t

t o Internationa l Fall s an dnearb y Ontario , IN L historicall y ha s demonstrate dthat

it ca n b e asignifican t

an dstead y poin t

o f entr y fo r vacationers , ensurin g aconsisten t

strea mo f

touris mdollar s int o th e local economy . A few interviewee s note dtha t

i n th e las t

decade , whe n apreviou s carrie r provide dmor e flights , th e communit y generate denoug h deman dt o fil l five flights i n th e summertime
. Economi c viabilit y o f

thi s uniqu e are ai n Minnesot arequire s reliable^, , convenient , affordabl e commercia l ai r

service
. An di n turn , greate r developmen t

o f th e Falls ' economy i n part throug h bette r ai r servic e wil l ensur e astabl e custome r bas e for thosft.carrier s providin g service
. Schedul e * ffeing abl e t o complet e atri p fro mdepartur e t o final destinatio n i n asingle , albei t long , da y i s viewe da s extremel y important
. Interviewee s wer e mostl y consisten t i n favorin g earl y mornin g (60 0 - 700 ) an dearl y afternoo n (aroun d1200 ) departure s fro mIN L an dalat e evenin g retur n t o IN L (210 0 - 2300)
. Th e earl y mornin g flight i s importan t

t o mak e connection s out o f MS P t o point s eas t

an dwest , th e afternoo n flight ca n tak e "overflow " fro mth e morning , an dth e late r retur n enable s traveler s t o retur n hom e t o Internationa l Fall s afte r arriva l t o MS P durin g th e day
. Plus , afew interviewee s wante dt o mak e sur e tha t aplan e wa s overnighte da t IN L s o tha t

i t wa s ther e for th e mornin g departure
. The y indicate dthat th e propose dschedul e fro mGrea t Lake s woul dmee t

thei r need s regardin g schedul e an dconnections , a s lon g a s th e flights wer e reliabl y provided
.

' "Lurin g 'serve r

farms' : Minnesot atarget s aburgeonin g industry tha t actuall y like s th e coW, " MinnPost.com , Novembe r 3 , 2011
. Pag e 2However , anumbe r o f interviewee s projecte dtha t thre e flights durin g th e summe r touris t seaso n woul db e insufficien t

t o mee t demand , an dbusines s traveler s an drepresentative s expresse d concern tha t

ther e wouldn' t

b e seat s availabl e i

f the y neede dt o boo k

o n shorte r

notic e than vacationer s (man y o f

who mboo k

trip s month s ahea do f

time)
. On e very-frequen t busines s flier sai dtha t h e ha s ha dt o driv e t o Bemidj i an dHibbin g t o ge t short-notic e flights t o MS P i n th e summertime , becaus e flights ou t o f IN L hav e bee n completel y booked
. Man y fel t tha t afourt h flight, if

price dright , woul db e sustainabl e durin g summe r months , particularl y i n Jul y an dAugust , with other s proposin g alonge r seaso n for

th e fourt h flight (May throug h September)
. Som e note dtha t alarge r plan e coul dserv e th e sam e purpos e an d perhap s attrac t

additiona l fliers (suc h a s traveler s with large r recreational gear/baggage ; an d thos e wh o woul dchoos e t o fly t o IN L instea do f driv e i f th e plan e wa s mor e comfortable , includin g featurin g alavatory)
. Reliabilit y Closel y relate dt o aschedul e tha t enable s same-da y cormection s ou t o f Minnesota, perceive d reliabilit y o f

th e schedul e i s extremel y important
. Interviewee s note dtha t it onl y take s missin g a n importan t

busines s meeting , o r

avacatione r

losin g ada y o f

fishin g becaus e o f

acancele d flight, for atravele r

t o abando n IN L a s a

n option
. "I f

staf f ar e delaye dalot , an dpeopl e ar e missin g connections , the y wil l mak e othe r arrangement s th e nex t

time , particularl y staf

f wh o nee dt o mak e meeting s an dkno w tha t th e flight i s historicall y no t

reliabl e t o com e i n whe n it' s snowin g o r

reall y cold
. The y wil l driv e t o MSP. "
Fare s The-cos t t o fly ranke da s asignifican t facto r i n whethe r

busines s an dparticularl y leisur e traveler s fly throug h INL
. A n interviewe e fro mamajo r are aemploye r

sai dthat , "cost s wil l play int o ho w muc h trave l w e d o fro mINL
. I f fare s are to o high , som e wil l driv e t o MS P o r Duluth. " However , busines s traveler s ar e considere dmor e likel y t o favo r schedul e an dreliabilit y ove r fare , dependin g o n ho w time-sensitiv e thei r wor k is
. O n th e othe r

hand , experienc e ha s show n tha t a s fare s an dfee s hav e risen , th e recreational traveler s abando n INL
. Fo r example , abusines s owne r i n touris mnote dtha t

whe n Delt atoo k ove r servic e afte

r acquirin g Northwes t

Airlines , an dadde dcharge s fo r baggag e an drecreational gear (coolers , fishin g poles , etc.) , larg e fishin g partie s starte dflying int o MS P an dthe n rente da van t o driv e t o Internationa l Fall s o r int o Canada
. Some , particularl y fro mChicago , als o wil l fly int o Duluth an dren t

avan , a s that

i s les s expensiv e tha n flying int o INL
. Larg e partie s an d businesse s als o hav e bee n charterin g thei r ow n planes
. Thi s interviewe e though t tha t $60 0 inclusiv e pe r

perso n wa s abou t

th e pric e poin t

a t whic h hi s customers , wh o com e fro mal l ove r th e Unite dStates , woul dchang e thei r trave l patterns . Som e suggeste dthat

a$9 9 add-o n t o MS P woul dgreatl y increas e demand
. Pag e 3 *
.Equipmen t

Opinion s varie dregardin g th e impac t o f th e aircraft' s typ e an dsiz e o n travelers ' propensit y t o fly ou t o f INL
. Grea t

Lake s i s proposin g t o provid e servic e with aBeechcraf t 1900 , a19-sea

t turboprop
. Som e sai dthat

everyon e wh o i s alread y flying i n an dou t o f IN L i s essentiall y use dt o somewha t uncomfortabl e planes
. On e interviewe e said , "I f yo u onl y hav e on e horse , you'l l probabl y rid e tha t horse. " It' s ashort

flight t o MSP , an ds o anumbe r o f interviewee s didn' t

thin k th e plan e mode l woul dmak e muc h differenc e i n trave l choices
. Th e appearanc e an dnois e facto r o f th e pro p wasn' t

see n a s asignifican t

barrier
. A few suggeste dtha t i f i t i s aperceive dbarrier , ne w customers wil l giv e i t

atry i f th e price s ar e attractiv e enough
. Othe r interviewee s note dhoweve r tha t for olde r o r infir mtravelers , no t

havin g alavator y o n boar dcoul db e abarrier
. Som e als o suggeste dtha t alarger , mor e comfortabl e plane , particularl y i n th e summe r

touris t season , woul dattrac t

mor e passenger s than eve n additiona l flights with smalle r planes , tha t

th e smalle r

plane s wer e indee dabarrie r for less-frequen t

traveler s an dtha t som e hav e i n fac t

chose n t o driv e t o MS P rathe r tha n fly o n them
. On e interviewe e note dtha t whe n IN L ha djets , summer/recreationa l traveler s woul dwai t for thos e flights a s the y wer e perceive da s safer

an dmor e comfortable
. Codesharin g Interviewee s ha ddifferen t perspective s o n th e importanc e o f codesharin g (agreement s betwee n carrier s t o enabl e seamles s connection s fo r fliers throug h single-ticketin g mechanism s an d luggag e follow-through) « S,«qi e said , essentiaill y tha t

th e busines s travele r

wil l fM
. u p with , whateve r need s t o b e don e i n orde r t o ge t t o wher e s/h e need s t o g o a s quickl y a s possible
. Other s sai dtha t

codesharin g i s "on e p f

th e ke y thing s tha t

need s t o b e worke dout, " a s the y sai d traveler s woul ddriv e t o Duluth o r MS P t o avoi dhavin g t o pic k u p thei r luggag e a

t MS P for re checking
. (A s well , goin g throug h security twice , give n tha t MS P i s th e secon dcheckjjpint , ' woul db e considere dver

y inconvenient. ) I n addition , som e interviewe.e»pointe dou t tha t withou t codesharing , traveler s woul dhav e t o negotiat e \yit h th e coimectin g carrie r

if thei r firs t flight ou t wa s delaye do r

canceled , causin g th e travele r t o mis s th e connection
. Thi s i s viewe da s ahug e disincentiv e t o fly wit

h a n unaffiliate dcarrier , whe n MS P i s no t th e final destination
. A few interviewee s raise dth e issu e o f trave l betwee n terminal s a t MSP
. I f aregiona l carrie r

wa s gate dat Termina l 2 , support

service s for

olde r o r infir mpassenger s woul dnee dt o b e ensure ds o tha t traveler s coul dmak e thei r connection s safel y an dcomfortably
.

Pag e 4Mileag e reward s program s

Interviewee s ha ddifferin g feeling s regardin g th e importanc e o f reward s programs . Som e didn' t thin k tha t i t wa s tha t significant , relativ e t o th e mor e importan t factor s o f

schedule/coimections , reliability , an dfares
. However , thos e wh o felt the y ha dasignifican t

stak e i n Delta' s reward s progra msai dtha t

the y woul dconside r

changin g thei r

trave l pattern , specifically , driv e t o anothe r airport wher e Delt ai s maintainin g service , t o earn mileag e for tha t segmen t t o MSP
. Marketin g opportunitie s Interviewee s ha danumbe r o f idea s for promotin g greate r

us e o f INL
. On e note dtha t

ther e ar e "al l sort s o f

events " goin g o n al l o f

th e tim e i n Minneapolis/St
. Pau l that aregiona l carrie r

joul ^ promot e i n partnershi p with hotel s an dentertainmen t organizations : sportmg..eil?pnts , holida y shoppin g at

th e Mal l o f

America , theate r

an dconcerts , an dothe r

focal^in^ g fo r

"weeken d getaways " o r

eve n same-da y trips
. Conversely , Internationa l Fall s ca n mapte t trip s u p north i n th e Twi n Citie s an dothe r market s for

it s year-roun devents . In particular , an interviewe e note dtha t Voyageur s Nationa l Par

k can' t advertis e itself

, pe r se ; thi s woul db e a

n are afor acarrie r t o wor k with th e City , Visitor s an dConventio n Bureau , lodges , camps , outfitters , an dothe r partner s t o dra w ne w tourist s u p throug h th e airport
. A numbe r o f organization s suggeste dworkin g togethe r with th e carrier(s ) t o offe r an dpromot e package s at

th e poin t o f sale , suc h a s sharin g th e cos t o f advertising
. Anothe r opportunit y wa s raise db y an outfitter : h e note dtha t anumbe r o f par k an dcam p visitor s wil l shi p thei r

gear u p throug h Federa l Expres s o r UP S s o tha t

the y can fly i n an davoi dthe " baggag e an dgea

r fee s an dgenera l inconvenience
. Th e are alimousin e servic e wil l pic k u p th e equipmen t

an dtranspor t

it an dth e guest s t o thei r

destination
. H e suggeste dtha t thi s ide acoul d b e promote da s part

o f apackag e t o fly int o th e Falls
. Severa l interviewee s brough t u p th e deman dfor

flights t o point s fa

r sout h i n th e winte r

time
. A n interviewe e fro mth e Ft
. France s Chambe r sai dtha t Canadian s wil l driv e t o IN L e n rout e t o Mexic o an dth e souther n Unite dState s becaus e it' s close r for the mthan drivin g t o aCanadia n airport
. Thi s interviewe e note dmor e generall y tha t IN L i s th e mos t

convenien t

airpor t for busines s an d governmen t

agencie s i n th e Ft
. France s part o f th e catchmen t

area . Hf f ^continue dthat

althoug h busines s traveler s kno w abou t IN L i n general , it' s not

thei r firs t though t whe n lookin g u p flights; the y automaticall y loo k

at Canadia n airlines
. Therefore , h e suggeste dtha t th e tw o cities
. Chambers , th e airport , etc . ramp u p regular marketin g t o increas e awareness .

Pag e 5Othe r

markets/hub s Interviewee s wer e aske dabou t th e potentia l for

adirec t flight t o Chicag o an dothe r

hu b destinations
. Som e didn' t thin k that ther e woul db e enoug h deman dt o sustai n aChicago flight year-round
. A t th e sam e time , anumbe r o f interviewee s expresse dpersona l interes t an dthough t

that it woul d b e widel y used , a s mor e connection s ca n b e mad e ou t o f Chicago tha n M§P , On e o f th e Falls ' majo r employer s ha s aheadquarter s i n Chicago ; an don e interviewe e said , "withou t question , i

f they-don' t codeshar e [wit

h Delt aou t

of INL] , that' s th e firs t

thin^ I \vil l loo k

at ; Unite d[for Vhic h Chicago i s ahub ] wil l g o anywher e i n ba dweather. " Other s sa M tha t man y recreationa l Mveler s t o th e are acom e fro mChicago , an dtha t eas e o f flying i n directl y fro mther e "woul db e h'uge. " ^ ^ s Othe r majo r citie s suggeste da s potential market s include dMilwauke e an dDetroit
. Still , som e expresse dreluctance t o los e MS P a s thei r primary hub , i

f achoic e ha dt o b e mad e a t som e future point
. IN L sellin g point s Interviewee s wer e i n agreemen t for th e mos t part o n INL' s stronges t

attraction s for

travelers : fre e an dampl e parking , close-to-home , courteou s an dattentiv e servic e a t IN L terminal , an deas e o f check-i n an dsecurity
. ("Everyon e know s eac h other. " an d"Ther e ar e very few peopl e there ; the y ca n ge t aflight of passenger s throug h i n 1 5 minutes." ) Other s note dtha t th e hotel s an dresort s provid e airport-to-lodgin g shuttle s s o tha t onc e passenger s arriv e i n INL , the y don' t hav e t o drive
. '4
.

Pag e 6Communit y intervie w question s

Novembe r

201 1 [Sen dpropose dGrea t

Lake s flight

schedul e ahea do f

tim e with intervie w guide ] 1
. Pleas e describ e th e genera l trave l pattern s o f th e fliers you r

organizatio n represents . a . Wh o i s flying frequently ? b
. Fo r what purposes ? c . T o what

exten t i s thei r trave l seasonal ? 2
. Ho w effectivel y woul dth e propose dai r servic e mee t

th e need s o f

thes e fliers? a . Wha t work s i n th e potentia l schedule ? b
. Wher e woul dther e b e gaps ? c . Wha t woul dyo u recommen da s t o summe r capacity , relativ e t o th e propose d schedul e fro mGrea t

Lakes ?
. •.•••..•• .

. ^ • 3
. Wha t woul doptima l servic e loo k like ? What

woul db e th e features , an dwhat communit y need s woul dthe y address ? 4
. What ar e th e factor s tha t

lea dtraveler s t o driv e t o MS P o r othe r airports , rathe r

tha n fly ou t o f INL ? T o what

exten t ar e th e followin g factor s relevant ? a . Schedul e no t

convenien t b
. Connection s no t

convenien t c . No t sur e abou t

servic e reliabilit y d
. Mor e cost-effectiv e t o driv e t o anothe r airport o r t o final destinatio n (differenc e i n fares ) e . Plan e comfor

t f
. Othe r 5
. T o what

exten t i s a n airplane' s size , model , an dmetho do f boardin g relevan t

t o you r fliers? What

d o yoj i thin k

ca n b e don e in term s o f

marketin g o r

educatio n t o improv e comfor t leve l 'Wit h smalle r o r turboprop aircraft ? • 6
. T o what

exten t ar e reward s program s afacto r whe n fliers choos e acarrier ? Wha t woul d entic e fliers t o us e adifferen t carrier ? 7
. Ho w importan t

i s codesharin g (agreement s betwee n carrier s t o enabl e seamles s connections ) for

an y potential ne w carriers ? Whic h aspect s (ticketing , check

in/security , baggag e handling) ? a . I f ane w regiona l carrie r

di dnot hav e acodesharin g agreemen t with amajo r carrier , t o what

exten t woul dthi s suppres s deman damon g th e fliers yo u represent ?

Page ?Wha t factor s woul dincreas e (busines s an dcommunity ) deman dfor ai r travel , t o mak e servic e sustainable ? Wher e ar e ther e pocket s o f untappe ddeman dthat

coul db e cultivate d throug h marketing , education , introductory specials ? a . T o what

exten t woul ddirec t

flights t o Chicago b e ane w o r increasabl e market? b
. Wha t othe r hu b destination s woul db e abl e t o sustai n schedule dservic e fro mINL , amon g th e fliers yo u represent ? What ar e th e stronges t

sellin g point s for

flying ou t

o f INL ? Wha t

d o you r fliers appreciat e most ? I

f IN L an dne w carrier s undertak e mor e aggressiv e marketin g i n th e communit y (an di n othe r

communities) , wha t

ar e th e feature s tha t

the y shoul d emphasize ? a . Fre e parkin g b
. Easy/fas t

check-i n (i n contras t

t o lon g security line s a

t MSP.. ) c . Save s gas/time b y no t havin g t o driv e t o anothe r airport

. 4 .Fre e Wi-Fi ! an dothe r amenitie s i n th e termina l e . Supportin g acommunit y resourc e 10
. What kind s o f partnership s (business/community/stat e an dlocal government ) mak e sens e t o provid e incentive s t o carriers ? a . Wha t woul dyou r

organizatio n b e willin g t o provid e a s incentiv e for improve d service ?

*>; • in,-: : •

Pag e 8