Sponsor: City of Naples Airport Authority

Theodore D. Soliday, Executive Director

Dun & Bradstreet DUNS Number: 092230952

Tax Identification Number: 59-1318107

Congressional District Code: FL-14

Naples Municipal Airport

Naples, Florida

Proposal Under the Small Community Air Service Development Program

Docket DOT-OST-2011-0119
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

2

TABLE OF CONTENTS

INTRODUCTORY LETTER.......................................................................................................................... 4

SUMMARY INFORMATION (SOLICITATION APPENDIX C)..................................................................... 5

A. Applicant Information.......................................................................................................................................... 5

B. Public/Private Partnership .................................................................................................................................... 5

C. Project Proposal .................................................................................................................................................... 5

D. Existing Landing Aids at Airport .......................................................................................................................... 6

E. Project Cost............................................................................................................................................................. 6

F. In-Kind Contributions.............................................................................................................................................. 7

G. Is Application Subject to Review by State Under Executive Order 12372 Process?................................ 7

H. Is Applicant Delinquent on Any Federal Debt? .............................................................................................. 7

EXECUTIVE SUMMARY ........................................................................................................................... 8

AIR SERVICE OVERVIEW ........................................................................................................................ 9

Catchment Area........................................................................................................................................................ 9

Air Service Needs ..................................................................................................................................................... 11

Tourism-related Air Service Needs ........................................................................................................................ 11

Economic Development Air Service Needs ....................................................................................................... 13

EXISTING AIR SERVICE......................................................................................................................... 13

HISTORICAL AIR SERVICE .................................................................................................................... 15

Overview.................................................................................................................................................................... 15

The Delta Connection Experience ....................................................................................................................... 16

Market-Level Details of the Delta Connection Service .................................................................................... 18

Air Service Development Efforts............................................................................................................................ 19

STRATEGIC PLAN.................................................................................................................................. 20

Proposed New Route .............................................................................................................................................. 20

Goals .......................................................................................................................................................................... 20

Significant Changes since Previous Delta Connection Service...................................................................... 20

Route-Specific Information: Naples – Atlanta.................................................................................................... 21

Path to Sustainability ............................................................................................................................................... 24

Grant Amendments / Alternative Strategies...................................................................................................... 25
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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TABLE OF CONTENTS

PROJECT IMPLEMENTATION, MONITORING AND FUNDING .............................................................. 26

Public/Private Partnerships..................................................................................................................................... 26

Project Funding......................................................................................................................................................... 28

Implementation Timeline........................................................................................................................................ 30

Project Monitoring.................................................................................................................................................... 31

Legal Sponsor............................................................................................................................................................ 31

Financial Controls..................................................................................................................................................... 32
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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INTRODUCTORY LETTER
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

5

SUMMARY INFORMATION (SOLICITATION APPENDIX C)

Small Community Air Service Development Program

Docket DOT-OST-2011-0119

A. Applicant Information

 Not a Consortium Community now receives EAS subsidy

 Interstate Consortium Intrastate Consortium

 Community previously received a Small Community Grant

 If previous recipient, date of Grant: ________________________________

 expiration date of Grant: _______________________

B. Public/Private Partnership

Public:

City of Naples Airport Authority

Greater Naples, Marco Island, and Everglades Convention and Visitors Bureau

Private:

Collier County Lodging Association

Economic Development Council of Collier County

Friends of the Naples Municipal Airport

Greater Naples Chamber of Commerce

C. Project Proposal

 Marketing Upgrade Aircraft New Route

 Travel Bank Service Restoration Subsidy

 Surface Transportation Regional Service Revenue Guarantee

 Launch New Carrier Start-Up Cost Offset First Service

 Study Secure Additional Service Other (Specify)
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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D. Existing Landing Aids at Airport

 Full ILS Outer/Middle Marker Published Instrument Approach

 Localizer Other: VOR/DME, GPS/RNAV, ASOS, ATCT, PAPIs, REILs, ADS-B

E. Project Cost

Line Description Sub Total Total 

Amount

1 Federal amount requested $ 750,000

2 State cash financial contribution $ -

Local cash financial contribution

3a Airport cash funds $ 385,000

3b Non-airport cash funds $ 100,000

3 Total local cash funds (3a+3b) $ 485,000

4 TOTAL CASH FUNDING (1+2+3) $ 1,235,000

In-Kind contribution

5a Airport In-Kind contribution** $ 2,372,000

5b Other In-Kind contribution** $ -

5 TOTAL IN-KIND CONTRIBUTION 

(5a+5b)

$ 2,372,000

6 TOTAL PROJECT COST (4+5) $ 3,607,000
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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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.

In-Kind Contributions from City of Naples Airport Authority $ 2,372,000 

Value of airport personnel processing air carrier flights on behalf of 

carrier ("above" and "below" wing processing) $ 1,612,000 

Waived Airport Facility Rentals $ 200,000

Waived Ground Support Equipment Rentals $ 200,000 

Waived Landing Fees $ 200,000 

Waived Fees related to Common Use Passenger Processing System $ 100,000 

Value of additional insurance, legal fees, miscellaneous incurred by 

airport $ 60,000 

G. Is Application Subject to Review by State Under Executive Order 12372 Process?

 This application was made available to the State on ______.

 Program is subject to review, but has not been selected by the State.

 Program is not covered.

H. Is Applicant Delinquent on Any Federal Debt?

 No
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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EXECUTIVE SUMMARY

The City of Naples Airport Authority is requesting a Small Community Air Service Development Grant in 

the amount of $750,000 as part of a multi-million dollar effort to reintroduce commercial Airline service 

to Naples Municipal Airport (APF). The Department of Transportation’s role would be to support a 

Minimum Revenue Guarantee for a two-year term for service between Naples and Hartsfield-Jackson 

Atlanta International Airport on Delta Connection. Other elements of the program include a $3.2 million 

runway extension, funded entirely by the Authority, and $2.7 milion of incentives.

The proposed service would re-establish flights to Atlanta, similar to successful service offered in the past. 

Delta offered service on this route November 2004 through September 2007, with the support of a 

minimum revenue guarantee. The route proved so successful, that the carrier did not receive any funds 

from the guarantee. Service ended after the guarantee program due to a number of factors, including 

an industry move away from smaller regional jets on longer stages and payload performance issues 

related to aircraft selected for the route. However, we believe that these issues can both be resolved.

By re-establishing air 

service to the largest 

single airline hub, Naples 

would be reconnected 

to the world. This would 

enhance the region’s 

economic development 

efforts for key business 

segments. Access to 

travellers is key to 

ensuring a robust tourism 

economy, and tourism is 

the top economic driver 

in the region. 

Additionally, Naples is 

home to several unique 

and growing companies in the software development and healthcare fields, which need greater 

access to the air transportation system.
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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AIR SERVICE OVERVIEW

Catchment Area

The Naples Metropolitan Statistical Area consists of Collier County. As of July 2010, it is estimated the 

Census Bureau that the population of Collier County is 321,861. As one of the fastest growing counties in 

the nation, Collier County has grown by almost 27% since 2000. Additionally, Collier County estimates its 

seasonal population, to include partial year residents who drive additional needs for utilities, roads, and 

other public services. For 2010, Collier County estimated its peak population at 389,149 people.

Exhibit 1: Naples, Florida MSA Population and Cumulative Growth

Source: US Census Bureau

Collier County, along with Charlotte and Lee Counties, make up a region often referred to as Southwest 

Florida. Collier County makes up 30% percent of the regional population. However, Collier County’s 

high income per capita results in the production of 35% of the region’s Gross Domestic Product.

254.1

264.2

275.4

285.1

295.6

306.9

311.9 313.8 316.0 317.9 321.9

4.0%

8.4%

12.2%

16.4%

20.8%

22.7% 23.5% 24.4% 25.1%

26.7%

0%

5%

10%

15%

20%

25%

30%

35%

40%

200

225

250

275

300

325

350

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Cumulative Growth

MSA Population (Thousands)

Naples MSA Population Cummulative Growth
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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Exhibit 2: Regional Map and Population

Source: US Census Bureau

Exhibit 3: Regional Population, Per Capita Income, and GDP Production

Source: US Census Bureau; US Department of Commerce

Charlotte: 176,726

Lee: 592,655

Collier: 321,861
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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Air Service Needs

Naples’ Air Service needs fall into two categories: Tourism-related and Economic Development. The 

needs of both sectors can only be met by true access to a major airline hub network. The most logical 

network for Naples air service is the Delta Air Lines hub at Hartsfield-Jackson Atlanta International 

Airport.

Tourism-related Air Service Needs

Like most of Florida, tourism is a critical economic driver in Naples and Collier County. In 2010, almost 1.4 

million tourists visited Collier County, spending $782 million and creating a total economic impact of 

almost $1.2 billion.

Exhibit 4: Collier County Tourism Statistics

Source: Naples, Marco Island, and Everglades Visitors and Convention Bureau, 2010 Visitor Profile

2009 2010 Change

Visitor Information

# Visitors 1,338,800 1,383,500 +3.3%

Party Size 2.5 people 2.5 people n/c

Length of Stay 4.6 days 4.6 days n/c

Arrived by Air 54.7% 54.6% n/c

Economic Impact of Visitors

Direct Visitor Expenditures $756,482,900 $782,078,400 +3.4%

Per-Person Total Expenditure-Total $565 $565 n/c

Per-Person Total Expenditure-Domestic $537 $537 n/c

Per-Person Total Expenditure-International $732 $745 +1.7%

Per-Person/Per-Day Expenditure $123 $123 Even

Economic Impact $1,127,916,007 $1,166,078,894 +3.4%

Groups/Meetings Economic Impact $81,733,920 $98,148,800 +20.1%

An important mechanism to monitor tourism is hotel data. Hotels are located near popular tourist 

destinations, and tourists choose hotels because of their locations. In Southwest Florida, 35% of all hotel 

rooms are located in Collier County. Because Collier County’s Average Room Rate and Occupancy 

Rate is higher than other parts of the region, Collier County actually draws approximately 50% of the 

region’s hotel revenue.
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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Furthermore, there is anecdotal evidence of an erosion of business due to the lack of access. Resorts in 

the Marco Island area have reported that they have reduced or suspended marketing programs. They 

have explained that their potential customers demand more convenient access to air service than is 

afforded them by Southwest Florida International Airport, almost two hours north.

Exhibit 5: Lodging Unit Map

Source: Florida Department of Business and Professional Regulation
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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Economic Development Air Service Needs

Naples is home to three emerging companies in the computer technology and healthcare industries 

which demonstrate the growing need for improved air service in Naples.

Allen Systems Group (ASG) is one of the largest privately-held software developers in the world. The 

company was founded by retired software innovator Arthur L. Allen in Naples in 1986. While ASG is a 

small company by employee count, with only 1,300 employees, its travel needs are large. First, all 

employees are required to visit the Naples headquarters. These employees are based in approximately 

90 offices worldwide. Second, a key element of ASG’s growth has been the acquisition of other 

companies throughout the world, necessitating travel to those locations.

Locally-based Arthrex is an innovator in the field of arthroscopic surgery. The company develops new 

surgical procedures as well as manufactures cutting edge devices and technology to facilitate surgery. 

The company announced on April 15, 2011, a $19 million expansion of its manufacturing facilities in 

Collier County, adding 150 jobs when completed and hundreds of additional jobs in the following years. 

In addition to development and manufacturing activities, Arthrex also trains surgeons in the new 

procedures and products in Naples.

Lastly, Naples-based Health Management Associates (HMA) is a leader in rural healthcare. HMA 

operates 59 hospitals with almost 9,000 beds in 15 states throughout the southeastern and southwestern 

United States. 

EXISTING AIR SERVICE

At this time, Naples Municipal Airport has no commercial airline service. Service ended in September 

2008 when commuter carrier Yellow Air Taxi suspended its flights. The last air service meaningfully 

connected to the national air transportation system ended in September 2007, with the withdrawal of 

Delta Connection from the Naples market.

Regional air service is provided by Southwest Florida Regional Airport (RSW), approximately 50 minutes 

from Naples and approximately 90 minutes from Marco Island. While Southwest Florida International 

Airport does fill some of Naples’ air service need, we believe the combination of distance, travel time, 
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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and processing time required to use that facility results in less travel to Naples, and less economic 

benefit to the region.

Naples is also one of the largest MSA’s without air service through its primary airport. It is unique among 

its MSA’s of its size as well, as it has a larger tourist draw than most and an impressive per capita income.

Exhibit 6: MSA’s Ranked 131 through 160 by Population and their O&D Traffic Levels

Source: US Census Bureau; US Department of Commerce; US DOT Data, Table DB1A

Rank Metropolitan Statistical Area (MSA) Primary 

Airport

MSA Population

(2009)

Per Capita 

Income (2009)

Domestic O&D 

Traffic (2010)

131 Killeen-Temple-Fort Hood, TX GRK 379,231 $39,344 390,120

132 Davenport-Moline-Rock Island, IA-IL MLI 379,066 $38,670 848,370

133 Beaumont-Port Arthur, TX BPT 378,477 $36,597 34,300

134 Peoria, IL PIA 375,865 $39,818 449,770

135 Anchorage, AK ANC 374,553 $46,217 3,277,320

136 Montgomery, AL MGM 366,401 $35,882 337,400

137 Trenton-Ewing, NJ TTN 366,222 $51,947 0

138 Hickory-Lenoir-Morganton, NC HKY 365,364 $29,840 0

139 Fayetteville, NC FAY 360,355 $40,045 459,080

140 Tallahassee, FL TLH 360,013 $33,833 569,710

141 Wilmington, NC ILM 354,525 $33,964 730,910

142 Rockford, IL RFD 353,722 $31,970 143,130

143 Evansville, IN-KY EVV 351,911 $36,475 286,070

144 Eugene-Springfield, OR EUG 351,109 $33,562 650,460

145 Ann Arbor, MI 347,563 $37,859 0

146 Savannah, GA SAV 343,092 $38,348 1,424,200

147 Ocala, FL 328,547 $31,097 0

148 Kalamazoo-Portage, MI AZO 326,634 $33,075 200,790

149 Naples-Marco Island, FL APF 318,537 $60,049 0

150 South Bend-Mishawaka, IN-MI SBN 317,538 $34,196 568,230

151 Kingsport-Bristol-Bristol, TN-VA TRI 305,629 $31,770 353,990

152 Green Bay, WI GRB 304,783 $36,742 608,420

153 Charleston, WV CRW 304,214 $37,687 460,160

154 Boulder, CO 303,482 $48,056 0

155 Roanoke, VA ROA 300,399 $38,322 537,600

156 Fort Collins-Loveland, CO FNL 298,382 $37,844 68,060

157 Lincoln, NE LNK 298,012 $37,361 233,780

158 Utica-Rome, NY UCA 293,280 $33,269 0

159 Fort Smith, AR-OK FSM 293,063 $30,896 150,650

160 Columbus, GA-AL CSG 292,795 $36,577 98,040
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

American Eagle Delta Connection

US Airways Express Others

HISTORICAL AIR SERVICE

Overview

Historically, Naples Municipal Airport has been a vital part of the air service provided in Southwest 

Florida. The airport maintained continuous airline service from 1957 through 2003. However, changing 

air travel habits and September 11, 2001, have contributed to a decline in traffic since the peak in 1995. 

At that time, all nonstop air service from Naples was confined to service within the state of Florida. Only 

American Eagle provided access to a true hub in Miami. Delta Connection and US Airways Express 

provided access to their networks via large Florida gateways, allowing for limited one-stop connections 

to certain hubs and large markets, but requiring two stops to reach most destinations.

Since 1996, traffic at Naples has been in decline, largely driven by factors outside the airport’s control. 

The intra-state service provided by Delta Connection and US Airways Express became less and less 

competitive, as travel habits changed. The increasing availability of nonstop and one-stop interstate 

connections at nearby Southwest Florida Regional Airport also added to the competitive pressure. By 

1997, Delta Connection ended its intra-Florida service. The US Airways Express service remained in place 

until 2003, as it was better supported by intra-state travellers to which it catered. 

Exhibit 7: Annual Passengers by Airlines

Source: Naples Municipal Airport
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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61

118 119

111

112 118

101

78

70

98

77

64

47

96

75

58

75

97

70

40

50

70

48

33

81% 82%

72% 71%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

20

40

60

80

100

120

140

2004-Q4 2005-Q1 2005-Q2 2005-Q3 2005-Q4 2006-Q1 2006-Q2 2006-Q3 2006-Q4 2007-Q1 2007-Q2 2007-Q3

Load Factor

Passenger and Seats per Day Each Way

Seats Per Day Each Way Passengers Per Day Each Way Load Factor

The airport’s only true hub access was service to Miami via American Eagle, which was eliminated in the 

aftermath of September 11, 2001. Driven by the economic problems which began in May 2001 and the 

uncertainties related to the economy and travel that followed the terrorist attacks, airlines began 

dramatically reshaping their networks. It was during this period that American eliminated service to 

Naples.

The Delta Connection Experience

In late 2003, with service reduced to 9-seat aircraft to Key West and other in-state airports, the City of 

Naples Airport Authority took action. With the backing of the Fly Naples Team and a locallyadministered 2-year minimum revenue guarantee program, Naples was able to secure a commitment 

from Delta Air Lines for three daily flights operated by Delta Connection to Atlanta.

Three daily nonstop flights between Naples and Atlanta began in November 2004 with 40-seat regional 

jets. The service was an instant hit with load factors around 80%. In fact, load factors were in excess of 

80% during the first quarters of 2005 and 2006. Compared to Delta’s service at Southwest Florida 

International Airport in Fort Myers, the average one-way fare at Naples was between 21% and 57% 

higher. This was critical to ensuring the success of a smaller, higher cost aircraft.

Exhibit 8: Delta Seats and Passengers per Day and Load Factor from Naples

Source: US DOT Data; Tables DB1A and T-100
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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$157

$188

$201

$183

$220 $221

$229

$189

$210

$256

$241

$206

$129 $130 $128 $125

$142

$147

$164

$151

$156 $153

$168

$166

21%

45%

57%

46% 55%

50%

39%

26%

34%

67%

43%

24%

0%

10%

20%

30%

40%

50%

60%

70%

80%

$100

$120

$140

$160

$180

$200

$220

$240

$260

2004-Q4 2005-Q1 2005-Q2 2005-Q3 2005-Q4 2006-Q1 2006-Q2 2006-Q3 2006-Q4 2007-Q1 2007-Q2 2007-Q3

Average Fare

Fare Premium

DL/APF Average Fare DL/RSW Average Fare APF Fare Premium

During the summer months of 2005 and 2006, load factors were not as strong. This was driven by aircraft 

payload performance issues during the hot summer months which restricted the number of seats 

available to be filled on certain flights. Nevertheless, average fares remained high to compensate for 

the empty seats. For the summer of 2006, Delta reduced the number of daily flights from 3 to 2. In 

response to the summer payload issue, the authority began planning for a runway extension, due to be 

completed in December 2011, to solve the problem. 

At the end of the Minimum Revenue Guarantee Program, every goal had been met, and no funds 

were paid to Delta. Instead, all funds were returned to their local sponsors. Delta continued flying two 

flights through the winter of 2006-07. Load factors were not as strong, driven by an even greater 

premium over Southwest Florida International Airport – reaching 67% in the first quarter 2007 – and the 

reduced convenience of two flights versus three. The summer of 2007 saw a similar pattern to the 

previous summers.

Exhibit 9: Average One-Way Fare on Delta from Naples and Fort Myers

Source: US DOT Data; Table DB1A
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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Delta discontinued service from Naples in September 2007. By early 2008, Delta announced sweeping 

network changes including the retirement of up to seventy smaller gauge regional jets. Also, during this 

time, Delta began systematically removing routes that met certain profiles from its network, including 

longer stage length flights on smaller regional jets. We believe the cessation of Naples service to be a 

part of these efforts.

Market-Level Details of the Delta Connection Service

During the almost three years of Delta Connection Service at Naples, Delta flew approximately 138,320 

passengers to and from Naples. Of those passengers, 23,510, or 17%, were local passengers destined for 

Atlanta. Delta’s top flow destinations include major northeast business centers and midwestern and 

southern cities with strong ties to Southwest Florida.

Exhibit 10: Delta’s 25 Largest Markets from Naples, 2004-Q4 through 2007-Q3

Source: US DOT Data; Table DB1A

0 1,000 2,000 3,000 4,000 5,000 6,000

ATL - 1

WAS Area - 2

SDF - 3

LEX - 4

NYC Area - 5

BNA - 6

CVG - 7

LAX Area - 8

CHI Area - 9

BDL - 10

BOS - 11

MCI - 12

BHM - 13

LAS - 14

SFO Area - 15

CMH - 16

RDU - 17

TYS - 18

DAY - 19

DEN - 20

DFW Area - 21

PIT - 22

RIC - 23

BUF - 24

IND - 25

23,510

4,740

4,350

3,790

3,790

3,690

3,260

3,230

2,940

2,710

2,530

2,190

2,180

1,980

1,970

1,860

1,860

1,840

1,620

1,470

1,410

1,350

1,330

1,260

1,260

O&D Passengers

Note: ATL not to scale
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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41% of Delta’s Naples passengers were destined for Atlanta or other destinations available nonstop from 

Fort Myers. This indicates a strong passenger demand for service to Naples Municipal Airport, even 

when very competitive service exists from Fort Myers,

Exhibit 11: Passenger per Day Each Way from Naples in Competitive Markets

Source: US DOT Data, Table DB1A

Air Service Development Efforts

Since the end of network carrier service in 2007, the City of Naples Airport Authority has been working to 

re-establish commercial airline service at the airport. Efforts have included industry outreach through 

airline/airport events such as the Jump Start Conference hosted by Airports Council International – North 

America, as well as hosting airline executive visits to our region. We have also implemented a project to 

lengthen our primary runway’s take-off distance through the use of displaced thresholds in part due to 

airline feedback and analysis of payload performance for aircraft that operate at Naples Municipal 

Airport.

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

Passengers Per Day Each Way (PDEW)

APF PDEW to destinations WITHOUT nonstop flights from RSW

APF PDEW to destinations WITH nonstop flights from RSW

APF PDEW to ATL
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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STRATEGIC PLAN

Proposed New Route

The Naples Airport Authority proposes to use a combination of airport Incentives and Minimum Revenue 

Guarantee provided by the Small Community Air Service Development Program to secure nonstop 

service to Hartsfield-Jackson Atlanta International Airport on a Delta Connection carrier. Furthermore, 

the airport proposes to support Delta with marketing assistance to be provided by both the City of 

Naples Airport Authority and other local sources. The proposed service would re-establish a proven 

market, carrier and hub service to Southwest Florida. These benefits will be made available to the airline 

over a two-year term.

Goals

Naples Municipal Airport has three goals with its Small Community Air Service Development Grant 

proposal for service to Atlanta:

 Reintroduce a proven route, hub, and brand to the Naples market

 Recapture catchment area traffic lost to other airports

 Improve access to air service for Naples and Collier County residents and businesses

Significant Changes since Previous Delta Connection Service

There have been numerous significant changes at Delta Air Lines, in the airline industry, and at Naples 

Municipal Airport since the previous Delta Connection service.

First, there have been numerous airline mergers since 2005, including America West/US Airways (2005), 

Delta/Northwest (2008), United/Continental (2010), and Southwest/AirTran (2011). These mergers have 

significantly reduced the number of brands in the marketplace. The regional carriers who provide 

smaller capacity aircraft to the large carriers with coordinated brands have also been a part of the 

consolidation. Regional aircraft provider Republic Holdings acquired Frontier Airlines and Midwest 

Airlines and merged them into a single brand. SkyWest, Inc. acquired ASA and ExpressJet. The regional 
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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consolidation reflects the reduction in the number of partner brands available to the regionals as well as 

the reduction in regional jet demand from those partners.

Second, as part of its capacity rationalization, Delta has implemented dramatic changes to its fleet 

plan. These changes include the elimination of all regional jets with less than 50 seats from the Delta 

Connection fleet, including those which previously flew between Naples and Atlanta. Additionally, 

Delta has recently announced the retirement of 70 additional small capacity aircraft including its entire 

fleet of 34-seat turbo-props and a number of 50-seat regional jets.

Third, on July 25, 2011 Naples Municipal Airport has begun construction of displaced thresholds on 

Runways 5 and 23. This 100% authority-funded $3.2 million runway extension, primarily a safety and 

general aviation project, will be completed this year. However, it will have the intended additional

benefit of enhancing payload performance on regional jet departures by allowing for 800 additional 

feet of runway. In addition to reducing payload restrictions on the regional jets used in the previous 

service, the displaced thresholds will allow for the safe operation of 50- to 70-passenger regional jets

commonly used today.

Route-Specific Information: Naples – Atlanta

Exhibit 12: One-stop Connections from Naples via Atlanta on Delta/Delta Connection, YE 4Q10

Source: Sixel Consulting Group Hub Builder
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

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The City of Naples Airport Authority proposes three daily nonstop flights between Naples Municipal 

Airport and Hartsfield-Jackson Atlanta International Airport on Delta Connection, using 60- to 70-seat 

regional jets. The Naples - Atlanta service would create access to over 170 destinations beyond the 

hub with one-stop, single-carrier connections. This service has a track record of success in 2004-2007 

that can be replicated in the current environment with the economics of a 60- to 70-seat regional jet.

In 2010, Southwest Florida generated 9,858 Passengers per Day Each Way (PDEW). This represents a 7% 

decline in regional traffic since service to Naples ended.

Exhibit 13: Passengers per Day Each Way (PDEW) from Southwest Florida

Source: US DOT Data, Table DB1A

Based on the information we have presented in the Air Service Overview section, we believe that the 

Naples area generates at least 35% of the traffic in Southwest Florida. We believe this is true for both 

inbound traffic, driven by the hotel data, as well as outbound traffic, driven by the population and 

regional GDP data. However, operating three daily flights, Delta would need to capture less than 2% of 

Southwest Florida air traffic at Naples in order to be successful. By our estimate, Delta would need to 

carry approximately 95,000 passengers per year or 130 passengers per day each way to achieve a 75% 

load factor. This would equate to 1.46% of 2010 Southwest Florida passengers.

0

2,000

4,000

6,000

8,000

10,000

12,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

6,601 6,502

7,369

8,193

9,542 9,738 10,285 9,580 9,445 9,528

223 216

208

256

272 263

289

316 312 330

Passengers per Day Each Way (PDEW)

Domestic PDEW International PDEW
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

23

Exhibit 14: Estimated Top 20 Markets from Naples for Delta at Proposed Capacity Levels

Source: Year Ending 4Q 2010 US DOT Data, Table DB1A

Regional jets have higher seat costs than larger narrow-body jets. To compensate for the higher cost, 

the carrier must be able to achieve a reasonable premium over the fares offered at Southwest Florida 

by larger, and lower seat-cost aircraft. Delta has shown they can successfully attract passengers, even 

with a fare premium to offset the higher cost aircraft required at Naples. Naples passengers have 

demonstrated that they are willing to pay a reasonable premium versus Fort Myers for the location and 

small airport convenience of Naples Municipal Airport.

0 2,000 4,000 6,000 8,000 10,000 12,000

NYC Area - 1

CHI Area - 2

BOS - 3

DTW - 4

WAS Area - 5

MSP - 6

PHL - 7

IND - 8

MKE - 9

CLE - 10

PIT - 11

CMH - 12

ATL - 13

STL - 14

HPN - 15

BUF - 16

CVG - 17

DEN - 18

PVD - 19

DFW Area - 20

10,545

9,477

6,662

5,768

5,036

4,522

3,379

3,202

2,661

2,528

2,386

2,308

2,166

2,012

1,875

1,619

1,476

1,403

1,333

1,246

14.4

13.0

9.1

7.9

6.9

6.2

4.6

4.4

3.6

3.5

3.3

3.2

3.0

2.8

2.6

2.2

2.0

1.9

1.8

1.7

Annual O&D

PDEW
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

24

Exhibit 15: Estimated One-Way Naples Fares and Premium versus Fort Myers for Delta’s Top Markets

Source: Year Ending 4Q10 US DOT Data, Table DB1A

Path to Sustainability

The City of Naples Airport Authority shares the Department’s view that the supported air service must be 

self-sustaining on a long-term basis. As such, the Authority will work with the air carrier on establishing 

success benchmarks during the program. Additionally, the Authority is willing to continue the Airport 

incentives for as long as legally possible, so long as progress is being made toward long-term 

sustainability.

Furthermore, our analysis of the Southwest Florida market and previous experience lead us to believe 

that the program goals are obtainable. We have demonstrated that the community will respond to 

reasonable fare levels, although higher than nearby airports, which makes small-jet service viable. At a 

reasonable load factor, we believe traffic would be much less than the 1995 peak, while requiring 

Naples to capture less than 2% of the region’s air traffic. Finally, the $3.2 million runway extension 

project will ensure the aircraft used will have adequate payload performance to operate with the load 

factors necessary to be sustainable year-round.

$0 $50 $100 $150 $200 $250 $300

NYC Area - 1

CHI Area - 2

BOS - 3

DTW - 4

WAS Area - 5

MSP - 6

PHL - 7

IND - 8

MKE - 9

CLE - 10

PIT - 11

CMH - 12

ATL - 13

STL - 14

HPN - 15

BUF - 16

CVG - 17

DEN - 18

PVD - 19

DFW Area - 20

$246

$188

$212

$166

$196

$199

$212

$192

$169

$196

$164

$134

$152

$195

$189

$262

$156

$246

$199

$228

94%

62%

56%

50%

61%

39%

58%

53%

53%

50%

47%

26%

26%

50%

50%

107%

13%

64%

50%

48%

Estimated Fare

Fare Premium
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

25

Grant Amendments / Alternative Strategies

The Authority’s primary air service development goal is to re-establish air carrier service at the airport, 

with coordinated and branded service to a major southeastern hub. This is driven by the desire to 

maximize access to the air transportation system with the new air service, and maximize the economic 

benefits to the region of the Naples Municipal Airport.

If the Department awards Naples a Small Community Air Service Development grant for service to 

Atlanta, but the community is unsuccessful in recruiting Delta to operate the service, the community 

may request the Department consider redirecting the award funding to assist in recruiting service from 

Naples to Charlotte-Douglas International Airport on US Airways Express or to Miami International Airport 

on American Eagle. It is the Authority’s view that these alternate strategies offer similar network benefits 

and would fulfill our primary air service development goal.
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

26

PROJECT IMPLEMENTATION, MONITORING AND FUNDING

Public/Private Partnerships

The City of Naples Airport Authority understands that in order to be successful in re-establishing air 

service and to ensure the sustainability of the service, the strong support and commitment of key 

business organizations is essential. In 2003, a partnership of public and private agencies formed the Fly 

Naples Team with one goal: to strongly support air service development at Naples Municipal Airport to 

benefit the community. The team members, who receive direction and guidance from the Naples 

Airport Authority Executive Director, are listed below.

The City of Naples Airport Authority will provide oversight, guidance, and direction to Fly Team Naples as 

the lead agency. The Authority will have sole administration and oversight of any Small Community Air 

Service Development grant funding. Additionally, the Airport authority will provide a great deal of inkind support to a new commercial airline, including providing the carrier with airport facilities, ground 

support equipment, common-use passenger processing equipment, security services, and airport staff 

to operate flights with no airport costs. Additionally, the Authority will provide funds for marketing the 

new air service in the local area.

Naples, Marco Island, and Everglades Convention and Visitors Bureau will provide in-kind advertising in 

the origin markets for inbound travellers related to the new air service. This includes cooperative 

opportunities through its relationship with Visit Florida, the official state tourism agency.

The goal of Greater Naples Chamber of Commerce is to support business growth and business retention 

in our region. The Chamber supports air service efforts via its direct mail publication which is distributed 

to more than 2,000 members. In addition, the Chamber utilizes internet advertising and a state-of-theart visitor center.

Economic Development Council of Collier County has targeted aviation and transportation 

infrastructure as one of its key focuses. The EDC supports air service initiatives by assisting with marketing 

and demographic research.
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

27

The Collier County Lodging Association assists Fly Team Naples by assisting with promotional 

opportunities and venues, as well as providing accommodations for visiting airline executives.

Friends of Naples Municipal Airport serve as an important community goodwill ambassador for the 

airport, and promotes the value of local air service via member involvement in numerous business and 

civic organizations. The group hosts airport tours and the community’s only Aviation Day and Airport 

Open House, designed to bring residents (and potential travellers) to the airport and showcase its role in 

our community. The Friends include: 

 Allen Systems Group (ASG)

 Health Management Associates (HMA)

 Bond, Schoeneck & King

 Jack Antaramian

 Kraft Construction

 LaPlaya Hotels

 Craig Construction

 Bob Taylor Chevrolet

 Quality Enterprises

 Core Construction

 Rooney Brothers

 Barron Collier Families
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

28

Project Funding

In addition to the Small Community Air Service Development grant, the City of Naples Airport Authority 

intends to provide everything the air carrier needs, so that the airport start-up costs will be as low as 

possible. This includes:

 Staffing airline operations on behalf of the air carrier at Naples Municipal Airport, including 

personnel to perform duties related to check-in, passenger processing, boarding, baggage 

handling, and ramp operations

 Providing all ground equipment needed to handle the aircraft, such as baggage carts and tugs

 Acquiring a common-use passenger processing system, which will have the ability to interact 

with the airline’s reservations system

 Waived terminal and facility rentals

 Security services at no cost to the carrier

 Local Marketing support

Additionally, the Naples, Marco Island, and Everglades Convention and Visitors Bureau will provide 

$100,000 of origin marketing support.

Exhibit 16: Summary of Sources and Types of Funding

Funding Source Minimum Revenue 

Guarantee

Airport 

Services Marketing Total

Cash Contributions

Department of Transportation $750,000 - $750,000

City of Naples Airport Authority $260,000 $125,000 $385,000

Naples, Marco Island, and Everglades 

Convention and Visitors Bureau $100,000 $100,000

Total Cash Contributions $750,000 $260,000 $225,000 $1,235,000

In-Kind Contributions

City of Naples Airport Authority $2,372,000 $2,372,000

Total In-Kind Contributions $2,372,000 $2,372,000

Total Project Funding $750,000 2,632,000 $225,000 $3,607,000
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

29

Exhibit 17: Summary of City of Naples Airport Authority Funding

Cash Contributions from City of Naples Airport Authority $ 385,000 

Common Use Passenger Processing System to be provided by airport $ 180,000 

Security Costs $ 60,000 

Local Marketing and Advertising $ 125,000 

Value of Special Events, such as service announcement and 

inaugural flight activities $ 20,000 

In-Kind Contributions from City of Naples Airport Authority $ 2,372,000 

Value of airport personnel processing air carrier flights on behalf of 

carrier ("above" and "below" wing processing) $ 1,612,000 

Waived Airport Facility Rentals $ 200,000

Waived Ground Support Equipment Rentals $ 200,000 

Waived Landing Fees $ 200,000 

Waived Fees related to Common Use Passenger Processing System $ 100,000 

Value of additional insurance, legal fees, miscellaneous incurred by 

airport $ 60,000 

Exhibit 18: Summary of Cash Community Funding

Cash Contributions from Fly Naples Team $ 100,000 

Origin City Marketing, provided by Naples, Marco Island, and 

Everglades Convention and Visitors Bureau $ 100,000 
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

30

Implementation Timeline

The proposed implementation timeline assumes the Department will award the grant in September 

2011. Once the award is announced, the Authority will begin discussions with Delta to begin service. 

Based on airline planning lead times, required time to build advance bookings, normal seasonality of 

our market, and the timing of the program, we anticipate that there are two potential timelines. The first 

is an aggressive timeline which launches service in mid-December 2011. The second is a more 

conservative approach designed to capture the entire winter season during the first year of service.

The first milestones on the Authority’s timeline are to execute the agreement with the department and 

to negotiate the terms of the Minimum Revenue Guarantee with the carrier. Once service is 

announced and schedules published, the airline, the Authority, and the community will begin marketing 

and monitor advance bookings. The carrier and Authority will continue to monitor bookings once 

service begins through the life of the program. The Authority will submit grant status reports quarterly to 

the Department throughout the proposed two-year term of the agreement.

Exhibit 19: Proposed Project Timeline

Activity/Milestone Aggressive Schedule Conservative Schedule

SCASD Grant Award Announcement September 2011 September 2011

Execute Grant Agreement with DOT September 2011 October 2011

Negotiate Minimum Revenue Guarantee with

Airline

September 2011

October 2011 –

June 2012

Announce Service/Publish Schedule September 2011 July 2012

Market Service/Monitor Advance Bookings (prelaunch)September 2011 –

December 2011

July 2012 –

November 2012

$3.2 million Runway Extension complete December 2011 December 2011

Launch Service December 2011 November 2012

Operate Service with MRG

December 2011 –

December 2013

November 2012 –

November 2014

Market Service/Monitor Advance Bookings

December 2911

and Beyond

November 2012 

and Beyond

Submit Grant Status Reports to DOT

Quarterly Q4 2011 –

Q4 2013

Quarterly Q4 2012 –

Q4 2014
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

31

Project Monitoring

The success of the project will be based on achieving the objectives of the program to reinstate and 

sustain commercial air service. Even before service begins, the Authority will work with the airline to 

monitor advanced bookings. Marketing and promotional activities can be adjusted based on 

feedback from the carrier as to whether the market is booking at an expected rate.

Once service begins, the Authority will rely on traffic and revenue data provided directly from the 

carrier, and the associated revenue reimbursements requested, as indications of project success. The 

Authority will use Department data from Tables T-100 and DB1A to compare results to the previous 

service in 2004-2007 and well as year-over-year information as it becomes available. Finally, the 

Authority will report on the program’s success with quarterly grant reports to the Department.

Legal Sponsor

City of Naples Airport Authority

160 Aviation Drive North

Naples, Florida 34104-3568

Theodore D. Soliday

Executive Director

Office: (239) 643-0733

www.flynaples.com

The City of Naples Airport Authority was created by the Florida State Legislature as an independent 

governmental unit in 1969. Created at the request of the Naples City Council, the Authority is charged 

with operation, development and improvement of Naples Municipal Airport.
 

 

Naples Municipal Airport, Naples, Florida

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

32

Financial Controls

As the sponsor, the City of Naples Airport Authority will be responsible for all fiscal matters and the 

Department’s reporting requirements. As a public agency, the Department can rest assured that 

proper financial controls are in place to guarantee any grant awarded will be used in accordance with 

the subsequent agreement. The Authority, as designated legal sponsor, will ensure that both 

Department and local funds associated with this project are expended in a manner consistent with the 

Grant intention and the contract between the Department and the Authority. The City of Naples 

Airport Authority understands and recognizes that the Small Community Air Service Development Grant 

is a reimbursable program, meaning the Authority is responsible for all program expenditures, and that 

invoices for reimbursement must be submitted to the Department of Transportation.