OST­2010­0124

PROPOSAL UNDER THE SMALL

COMMUNITY AIR SERVICE DEVELOPMENT

GRANT PROGRAM

Community Proposal of Yuma, Arizona  

DUNS #156065500

Arizona Congressional District 07

Legal Sponsor: Yuma International Airport
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 2

Proposal Summary 

The Yuma International Airport (NYL), in partnership with City of Yuma, Yuma County, 

Greater Yuma Economic Development Corporation, Greater Yuma Port Authority, and Yuma 

County Chamber of Commerce herein respectfully submits its proposal for a grant under the 

2009 Small Community Air Service Development (SCASD) Program. 

Yuma International Airport is a previous recipient of a SCASD grant, having been awarded 

$200,000 in 2007 to implement a marketing program intended to reduce significant levels of 

traffic leakage. The Airport and community partners successfully implemented this program and 

the desired objective was achieved: traffic leakage was reversed and enplanements increased. 

The increased traffic capture rates and enplanements that the previous grant funds facilitated 

gained notice by Delta Air Lines which resulted in the carrier launching service between Yuma 

and Salt Lake City in December 2007. Unfortunately, the timing of this new route coincided with 

the run-up in oil prices and the first signs of economic weakness that led to softening demand. 

Compounding these challenges was that Delta did not participate in the government’s military 

ticketing program which prevented the service from capturing traffic generated by the U.S. Army 

Proving Grounds and U.S. Marine Air Corp Station Yuma, two of the largest generators of air 

travel demand in the local market. Delta exited the Yuma market in August 2008. 

Challenge: Access to Only One True Hub-and-Spoke Operation 

With the loss of Delta’s service, Yuma returns to the service pattern that was outlined in the 2007 grant application: Los Angeles on United 

Express and US Airways Express to Phoenix. 

The United service to LAX, while an important and appreciated component of Yuma’s air service, does not provide access to a true connecting 

hub but rather a “focus city.” Via Los Angeles, United and United Express provide connecting opportunities to only 39 destinations on an average 

of 150 daily departures. Of this service, 69 of the connecting flights (or 46%) at LAX are operated by United Express.1

US Airways service provides access to a major connecting hub, but Phoenix is not growing and is unlikely to be a source of additional 

connectivity for the Yuma community in coming years. To illustrate this point, schedules for the first week of August 2009 were compared with 

those during the first week of August 2010. During this one year period, US Airways reduced the average number of weekly departures at PHX 

by 167 and available seats by over 14,000. This includes elimination of all service to five destinations and reductions in frequency to numerous 

others, including at Yuma where weekly departures declined from 41 to 34.2

As will be outlined in this proposal, access to a single connecting hub is insufficient for a market population and economic base as served by 

Yuma International Airport. The Airport and its community partners believe developing new connectivity with national air transportation is a 

critical component in sustaining local support for the Airport that was developed with the previous SCASD grant funds and necessary to ensure 

the region’s future economic vitality. 

 

1

 Schedule data for August 2010 sourced from Innovata, LLC via Airports:USA® DataMinerTM. Short-haul markets 

with overly circuitous routings excluded from counts. 

2

 Schedule data sourced from Innovata, LLC via Airports:USA® DataMinerTM 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 3

Challenge: Current Economic Environment Makes Carriers Risk Adverse 

As noted, with the assistance of SCASD grant funds Yuma International Airport was able to implement an effective marketing program that 

reduced levels of traffic leakage and increased enplanements. This led to the addition of new service by Delta that unfortunately does not 

continue today due to macro-level factors which do not reflect the success of the marketing program. 

The effect of these factors, such as the overall weak economic environment and fuel price volatility, has made new route development a rare 

occurrence in the domestic U.S. market. In fact, it has been frequency reductions or elimination of markets altogether that has dominated the 

actions of airline planning departments during the past year. Moreover, even if the prospect of economic recovery becomes reality, airlines are 

likely to remain risk adverse for some time when it comes to adding new service. This creates a real challenge for Yuma in its efforts to recruit 

the additional air service that is needed by the community. 

Solution: Risk Mitigation Incentives to Incubate Access to Another Hub Site 

The grant funds requested in this proposal will be used to provide risk mitigation funds for the initiation of service to an additional connecting 

hub from Yuma International Airport. The hub sites and carriers that the Yuma community intends to target are as follows: 

• Delta Connection service Salt Lake City: As noted, this route was previously attempted by 

Delta but a combination of factors, including not participating in military ticketing programs, 

led to its termination. With available risk abatement funds, the Airport and community hope 

to convince Delta to reinstate the market and would work with the carrier to ensure that it can 

access the large military market. 

• United Express service Denver: This route would compliment United’s existing service, 

providing eastbound service to that carrier’s second largest hub at Denver International 

Airport. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 4

While service to either of the two hubs identified above is believed to offer the strongest profit 

potential, the community would like to encourage United to open service to their new Houston 

hub as a result of United's merge with Continental. In any case, Yuma International Airport and 

its community partners are committed to prudently using grant funds to recruit and incubate 

access to an additional connecting hub that can reasonably be expected to be self-sufficient over 

the long-term. 

Grant Proposal 

To recruit the needed service, Yuma International Airport and its community partners are requesting a grant in the amount of $400,000 to provide 

risk mitigation funds to support development of service to an additional airline connecting hub over a two year period. The community will 

provide local matching funds of $100,000, for total program cash funding of $500,000. In addition, the Airport will provide an additional $81,806 

in the form of “in-kind” support. 

The Yuma community recognizes that the Department has limited SCASD funds and as such they must be deployed in manner that can generate 

measurable and maximum benefit. The proposal contained herein meets these criteria and the Yuma community has a proven track record of 

effectively utilizing SCASD funds to obtain results. 

The Airport and its partners request favorable consideration of this proposal and are available to respond to any questions the Department may 

have. 

Respectfully submitted, 

Craig Williams 

Airport Director 

Yuma International Airport 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 5

Table of Contents

Proposal Summary................................................................................................................. 2

Challenge: Access to Only One True Hub-and-Spoke Operation ........................................ 2

Solution: Risk Mitigation Incentives to Incubate Access to Another Hub Site.................... 3

Grant Proposal ...................................................................................................................... 4

1. Summary of Proposal......................................................................................................... 6

2. Overview of the Yuma Market ......................................................................................... 8

Population Base .................................................................................................................... 8

Economic Base...................................................................................................................... 9

3. NYL Air Service Profile................................................................................................... 12

Current Yuma Air Service .................................................................................................. 12

Enplanement Trends at Yuma............................................................................................. 13

Current & Historical Air Service ........................................................................................ 14

Yuma Can Support Additional Air Service ........................................................................ 14

Fare Levels Challenge Traffic Retention at Yuma ............................................................. 15

Current v. Potential Connectivity at Yuma......................................................................... 17

Prior Air Service Development Activities .......................................................................... 19

4. Proposed Solution to Air Service Deficiency ................................................................. 20

Overview............................................................................................................................. 20

Targeted Solution #1: Delta Connection service to Salt Lake City.................................... 20

Targeted Solution #2: United Express service to Denver................................................... 22

The Underlying Need for Risk Mitigation Funding ........................................................... 23

Marketing Support .............................................................................................................. 23

5. Grant Administration Plan ............................................................................................. 25

Grant Request Summary & Goal ........................................................................................ 25

Risk Mitigation Terms ........................................................................................................ 25

Project Term........................................................................................................................ 26

Role of Local Community Partners .................................................................................... 26

Project Monitoring Plan...................................................................................................... 26
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 6

1. Summary of Proposal 

Community and Airport: 

Yuma, Arizona 

Yuma International Airport (NYL) 

2191 East 32nd Street 

Yuma, Arizona 85365 

T: (928) 726‐5882 

F: (928) 344‐4677 

Designated Contact:   Mr. Craig Williams 

 Airport Director 

Official Project Sponsor 

Yuma International Airport is the official sponsor in submitting this application.

Community Partners 

This proposal is supported by City of Yuma, Yuma County, Greater Yuma Port Authority, Greater Yuma Economic 

Development Corporation, and Yuma County Chamber of Commerce. These partners will be responsible for the 

following: 

• Provide matching community funds for SCASD grant dollars. 

• Working with Yuma International Airport in negotiating agreements with the target air 

carrier subsequent to grant award. 

• Liaison with the Department in regard to carrier performance during the grant period. 

• Administration of the total program funding, including contact with the Department. 

• Preparation of quarterly reports, as determined necessary by the Department. 

In addition, this proposal is being supported by Northern Arizona University, Arizona Western 

College, Cocopah Indian Tribe, Quechan Indian Tribe, and Yuma Regional Medical Center. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 7

Project Description 

This proposal requests $400,000 in grant funds from the Small Community Air Service Development program. 

Grant dollars will be matched by $100,000 in local funds and approximately $82,000 in “in-kind” provided by the 

Airport in the form of landing fee and rental waivers for new service. The total project funding level is $581,806. 

Yuma International Airport currently has access to a single connecting hub and the goal of the 

project is to provide risk mitigation funding for development of additional hub access. The 

Airport and its partners believe that the Yuma market can generate sufficient traffic and revenues 

to support an additional hub, however to successfully recruit new airline service in the current 

environment it will be necessary to provide some risk mitigation funds. The funds requested in 

this proposal meet this need. 

It is important to emphasize that while such funds may be necessary to recruit new service, the 

Airport and community intend to only disburse them to a recruited carrier should revenues and 

traffic fall short of profitable levels early in the route development period as ridership builds. In 

this context, it is entirely possible that Yuma International airport may only require some, or 

possibly not any, of the requested monies requested in this proposal. If such occurs, the Airport 

is prepared to return funds/funding award to the Department for future use in the SCASD 

program. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 8

2. Overview of the Yuma Market 

Population Base 

The Yuma International Airport provides access to the national air transportation system for a region that reaches from southwest corner of 

Arizona, near to the border with Mexico, into southeastern California. 

Approximately 258,825 people live within a 60-minute drive of Yuma International Airport, a number that increases to 363,361 people when the 

drive radius is increased to 90-minutes.3

 In both cases, the population counts include only those persons accessible on the United States side of 

the border. The Airport also provides access to the northern Mexico state of Sonora, including the city of San Luis Rio Colorado which has a 

population of approximately 139,000 people. 

Yuma International Airport (NYL)

60-minute & 90-minute Drive Time Radius

90‐minute

drive radius

60‐minute

drive radius

The moderate winter temperatures also attract seasonal residents (“snowbirds”) which effectively doubles the region’s population, and whom 

contribute an estimated $300 million annually to the local economy. Retirees tend to travel more, and the corollary economic base that develops 

to support this population segment also generates increased air travel demand. 

 

3

 SOURCE: Microsoft MapPoint, 2007 Estimates 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 9

Phoenix Sky Harbor International Airport is approximately 190 miles to the east (2 hour 45 minute drive) and San Diego International Airport is 

approximately 180 miles to the west (2 hour and 40 minute drive) by way of Interstate Highway 8. The greater level of air service at these two 

airports, including the presence of low-fare carriers, has historically resulted in significant levels of traffic leakage. 

As noted, with the assistance of SCASD grant funds awarded in 2007, the Airport was able to implement an effective marketing program that 

communicated the safety, convenience, and air service available at NYL. This led to increased use of Yuma International Airport that was 

sufficient to gain notice by and new service from Delta Air Lines.4

 The grant funds requested in this proposal are intended to build upon the 

increased awareness and recruit new, nonstop service to an additional connecting hub. 

Economic Base 

The Yuma region is currently host to a diverse economic base with industries such as manufacturing, maquiladoras, 

logistics/warehousing/transportation, call centers, defense, agriculture, and tourism. Of these industries, agriculture is the largest due to the 

convergence of the Colorado and Gila Rivers and favorable year-round growing climate. Major crops in the region include broccoli, citrus, 

carrots, and over 90% of the nation’s winter lettuce. 

As was noted in Yuma’s 2007 SCASD application, the Federal government presence in the region accounts for over 8,000 jobs, including the US 

Army Proving Grounds and the US Marine Corps Air Station. Together, these vital defense installations generate a large percentage of the total 

air traffic demand at Yuma International Airport and would, therefore, benefit significantly from additional hub access that the grant funds 

requested in this proposal would facilitate. To underscore the importance of this traffic we remind the Department that a contributing factor in 

Delta’s withdrawal from the NYL market was that it did not participate in the military’s ticketing program effectively shutting Delta out of 

capturing any of this traffic. If the Department grants this application to Yuma, the community will require participation in the government and 

military program by the selected air carrier as a pre-condition to eligibility for risk mitigation funds. 

 

4

 As noted in the Proposal Summary, Delta’s service to NYL was discontinued due macro-level factors unrelated to 

the success of the marketing program. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 10

The table below lists the major private sector employers in the Yuma region. Note that it does not include retail (WalMart, Target, Sears, etc.) and 

service industry (restaurants, automotive, entertainment, etc.) employment which, while major contributors to the local economic base, generally 

do not generate large amounts of business travel. That said, they do provide incomes for an additional 10,000 area residents which in part is used 

to purchase discretionary travel. 

Employer Industry # of 

Employees

Yuma Regional Medical Center Health Care 2,030

Bose Corporation Manufacturing 1,300

Salyer American Fresh Agribusiness 1,000

ACT Call Center Call Center 815

Quechan Paradise Casino/The Q Gaming 800

Dole Fresh Vegetables Agribusiness 750

Glen Curtis, Inc. Real Estate 750

Arizona Western University Education 650

Shaw Industries Manufacturing 445

Pasquinelli Produce Co. Agribusiness 300

Cocopah Bingo & Casino Gaming 300

Grower's Company Agribusiness 280

Shay Oil Wholesale Distribution 270

Gowan Milling Construction 260

Carrier UTC Manufacturing 200

AEA Federal Credit Union Banking/Finance 180

Arizona Public Service Utilities 165

H&S Developers, Inc. Real Estate 150

Johnson Controls Manufacturing 150

Cemex Construction 133

Mission Citrus Agribusiness 130

Alside Manufacturing 120

Don Peterson Engineers Construction 102

Barkley Ag Enterprises Agribusiness 100

Jacobson Companies Real Estate 100

Skyview Cooling Company Agribusiness 100

International Paper Manufacturing 100

SOURCE: Great Yuma Economic Development Corporation

Top Yuma Area Private Sector Employers - 2009
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 11

Prior to the current recession, the market area served by Yuma International Airport enjoyed an 

extended period of positive economic growth. This was the result of businesses being attracted to 

the region because of an available workforce that was a result of inbound population migration, 

along with the subsequent multiplier effect on the retail and service sectors that these incomes 

generated. 

Like the rest of the nation, however, recent months have seen high levels of unemployment and 

negative economic indicators in the Yuma area. The Greater Yuma Economic Development 

Corporation has identified a number of targeted industries to help the region grow its way out of 

the recession, including food technology, aerospace/defense testing, industrial manufacturing, 

and renewable energies. In each of these examples, it is unlikely that Yuma would be home to 

corporate headquarters but rather the location for a satellite facility or factory. For the 

recruitment of these industries to succeed, travelers (and in particularly site selectors) must be 

able to easily get to and from the Yuma area. The risk mitigation funds requested in this proposal 

will help ensure that the region is competitive in its recruitment of these industries by providing 

sufficient connectivity with the rest of the national air transportation. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 12

3. NYL Air Service Profile 

Current Yuma Air Service 

Yuma International Airport has access to two airline systems – US Airways Express and United 

Express – providing nonstop service to Phoenix and Los Angeles, respectively. These services 

provide the Yuma market with a total of 2,264 seats on 62 weekly departures.5

The current capacity at Yuma reflects a declining number of seats and departures year-over-year, 

including the loss of the previous service to SLC provided by Delta Connection. This is 

illustrated on the graph on the next page, which shows that the loss of Delta service (as well as 

minor scheduled adjustments by the remaining carriers) has resulted in an 11.4% decline in 

weekly departures and 13.1% decline in weekly seats year-over-year. 

 

5

 Scheduled data from Innovata, LLC from Airports:USA® DataMinerTM for week ending August 29, 2009. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 13

Enplanement Trends at Yuma 

After years of relatively moderate traffic growth 2008 was a year of exceptional growth at Yuma 

International Airport. This was the result of enhanced connectivity offered by access to Delta’s 

hub at Salt Lake City and the use of SCASD funds to implement an aggressive marketing 

program that led to increased levels of local traffic capture. 

As expected, the loss of Delta service resulted in a corresponding decline in traffic at Yuma and 

enplanements through May measurably below 2008 levels.6

 Data on the chart below shows that 

enplanements through May 2009 are at or near the second strongest level in recent years (2006) 

and above 2007 levels. This indicates that, national economic issues notwithstanding, the core air 

service market of Yuma remains relatively strong and that the previous use of SCASD marketing 

funds to reduce levels of traffic leakage achieved the desired result. Through the effective 

application of SCASD funds for risk mitigation associated with development of service to an 

additional connecting hub as outlined in this proposal, the Yuma community’s goal is to increase 

enplanement levels above those experienced during 2008. 

Yuma Enplanement Trend

CY2005 – May 2009

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2005 2006 2007 2008 2009

SOURCE: T-100 data from Airports:USA® DataMinerTM Monthly Enplanements

 

6

 While much of the traffic decline is attributable to the loss Delta service, macro-level economic weakness is also 

recognized as a contributing factor. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 14

Current & Historical Air Service 

With the exception of Delta’s short lived service to Salt Lake City during 2008, air service at 

Yuma International Airport has remained essentially stagnant over the past years, as illustrated 

on the table below. 

2005 2006 2007 2008 2009

Airline Brands 2 2 2 3 2 

Nonstop Destinations 2 2 3 3 2 

Avg. Weekly Departures 56 63 60 77 61 

Avg. Weekly Seats 2,130 2,202 2,038 2,858 2,240 

Avg. Seats per Departure 38.0 35.0 34.0 37.1 36.7 

NYL Five Year Service Pattern Trend

August 2005 - August 2009

SOURCE: Schedule data from Innovata, LLC via Airports:USA®DataMinerTM

The lack of new service at Yuma reflects the general aversion of most network airlines to adding 

new domestic service in smaller communities during the period, a reality that has become an 

even greater challenge during the recent economic downturn. In many cases, those small and 

mid-size communities were able to offer airlines meaningful funding to mitigate a substantial 

percentage of the financial risk associated with new route development, including in many cases 

funds provided by the Small Community Air Service Development grants, as well as other 

incentives such as marketing support, airport fee waivers, etc. This underscores the need for 

SCASD funds by Yuma International Airport as it recruits service to an additional airline hub. 

Yuma Can Support Additional Air Service 

An analysis of service levels across the United States serving populations similar to Yuma 

International Airport clearly indicates that the market is underserved and can support service to 

an additional airline hub site.7

 This is illustrated on the table on the next page. 

 

7

 For purposes of comparison in this proposal, population base served was defined as that within a 60-minute drive 

time of the airport and calculated using Microsoft MapPoint. It is acknowledged that no two airport markets are 

exactly same, with demographic factors such as age group breakdowns, income levels, proximity to alternative 

airports, airline service and pricing strategies and local economic base impacting the drivers of air service demand. 

That said, it is believed that the airport markets illustrated on the table on the next page provide a reasonably fair 

comparison. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 15

Market Airport 

Code

60-Minute 

Drive 

Population

Number of 

Airline 

Systems

Number of 

Nonstop 

Destinations

Avg. 

Number of 

Weekly 

Departures

Avg. 

Number of 

Weekly 

Seats

Missoula, MT MSO 108,726 4 8 136 9,393

Fargo/Moorhead, ND FAR 214,997 4 8 129 9,256

Medford, OR MFR 247,711 4 9 152 8,948

Yuma, AZ NYL 258,825 2 2 61 2,240

Lubbock, TX LBB 365,239 4 7 181 16,067

Cedar Rapids, IA CID 458,309 4 12 254 13,932

SOURCE: Schedule data from Innovata, LLC via Airports:USA® DataM inerTM; Population data from M icrosoft M apPoint

Air Service Comparison - August 2009

Yuma International Airport Relative to Peer Markets

The deficient level of air service at Yuma International Airport not only impacts the Airport’s 

ability to retain traffic generated in the market area, it also threatens the economic future of the 

region given the importance of air service connectivity in globalization. The SCASD grant funds 

requested in this proposal will significantly enhance the ability of Yuma International Airport to 

increase airline service, improve connectivity, and enhance the competitiveness of Southwest 

Arizona on the global stage. 

Fare Levels Challenge Traffic Retention at Yuma 

As noted in Yuma’s 2007 SCASD grant proposal, there is a significant disparity between the 

average fare paid at NYL compared to those paid at PHX and SAN, two markets where lower 

fares are generally available due to extensive service from low-fare carriers, such as Southwest, 

Frontier, jetBlue, and AirTran. Between 2007 and 2009 very little has changed related to the 

pricing disparity between Yuma International Airport and its neighbors. 

The graph on the next page compares average fares paid from Yuma to those paid by consumers 

using SAN and PHX in major markets. In each of the illustrated markets, passengers utilizing the 

Yuma International Airport paid higher fares and in the case of those markets served from PHX 

and SAN by low-fare carriers, the differential is significant. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 16

Comparison of Average Fare Paid

Yuma International Airport v SAN & PHX: YE 1Q2009

SOURCE: Airports:USA® DataMinerTM for 12-months of ending March 31, 2009. 

NOTE: Fares are gross paid by consumer including taxes, PFCs and security

$-

$50 

$100 

$150 

$200 

$250 

$300 

$350 

SEA DEN SLC ORD MCO

Yuma Average Fare San Diego Average Fare Phoenix Average Fare

It should be noted that SCASD funds for marketing provided to Yuma during 2007 were not 

intended to specifically resolve the obvious pricing disparities that exist, but rather to 

communicate the “hidden” expenses associated with SAN and PHX airports, including increased 

travel time, higher parking fees, increased hassle factor, etc. In essence, the marketing program 

was to raise local awareness of the convenience of utilizing Yuma International Airport. As 

reflected in the aforementioned enplanement trend data, year-to-date boardings are higher than at 

other time during the past five years with the exception of 2008 when Delta briefly served Yuma. 

By this measure, the marketing program can be judged a success and the Yuma International 

Airport and its community partners good stewards of limited SCASD dollars. 

The community does believe, however, the risk mitigation funds requested in this current 

proposal can impact the price differential between Yuma International Airport and larger 

neighboring airports. The addition of nonstop service to an additional hub airport would impact 

the competitive dynamic at Yuma in at least one, and possibly two, manners: 

• First, the additional seats offered on flights to an additional hub site will mean a greater 

overall inventory of seats in the market thereby increasing consumer access to lower price 

buckets in airline revenue management programs. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 17

• Second, should risk mitigation funds be successful in recruiting a return of Delta service this 

would translate into a third airline brand in the market and access to a second global alliance, 

including the addition of a third revenue management function playing a role in setting fare 

levels and allocating seat inventories at various fare levels. This would bring an end to the 

duopoly of United and US Airways at Yuma8 

The alternative use of risk mitigation funds requested in this grant proposal, United Express 

service to Denver, would have a less meaningful impact on pricing at Yuma as would 

introduction of an additional airline brand, but the community nevertheless expects that the net 

increase in available seats would translate over time into a net decrease in average fares. 

Current v. Potential Connectivity at Yuma 

The Yuma market has access to the national air transportation system: Phoenix and Los Angeles. 

As noted in the Proposal Summary, Los Angeles is a “focus city” for United Airlines and 

provides limited online connectivity. As a result, the Yuma market really only has access to one 

true airline hub site via Phoenix. In the case of Phoenix, this hub offers limited connectivity east 

of the Mississippi River including the industrial Midwest and the populous Eastern Seaboard. 

In comparison, access to the additional hub alternatives of Salt Lake City and Denver would 

enhance connectivity available at Yuma by providing a more substantial reach in the industrial 

Midwest and Pacific Northwest, as well as improved access to major cities along the Eastern 

Seaboard. This is best illustrated on the maps on the next page. 

 

8

 United and US Airway have reciprocal frequent flyer program benefits, code-share across their respective route 

networks, and are both members of the Star Alliance. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 18

To Asia

& Hawaii

Seasonal ANC

SOURCE: Schedule data for week of August 23-29, 2009 from Innovata, LLC via Airports:USA® DataMinerTM

Current Connectivity At NYL

PHX (US Airways) & LAX (United) Nonstop Markets

Seasonal ANC

SOURCE: Schedule data for week of August 23-29, 2009 from Innovata, LLC via Airports:USA® DataMinerTM

Potential Enhanced Connectivity At NYL

DEN (United) & SLC (Delta) Nonstop Markets

To Asia

& Hawaii
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 19

Prior Air Service Development Activities 

Historically, Yuma International Airport had a very limited track record of air service 

development and marketing activities. Following award of the SCASD grant funds 2007, 

however, that changed. In partnership with public and private entities throughout the region, the 

Airport developed and executed a comprehensive air service marketing plan that reduced traffic 

leakage and played a role in attracting Delta Connection service to market. To this day the 

success of that marketing plan and use of SCASD and matching community funds is reflected in 

enplanement figures for Yuma International Airport that, as noted above, are at their highest 

levels in five years with the exception of the period when Delta Connection provided service to 

Salt Lake City.9

The Airport and community continue to engage in market activities intended to maintain 

community support and awareness of local air service, as well as communicate the important role 

that Yuma International Airport plays in the economic vitality of the region. 

With SCASD grant funds for risk mitigation as requested in this application, the airport and its 

partners intend to build on this success by recruiting additional air service that increases in the 

breadth of air service options and creates a more competitive dynamic at Yuma International 

Airport. 

 

9

 Detail on the specific marketing activities undertaken and associated used of funds was provided to the Department 

in quarterly reports in accordance with the 2007 SCASD grant agreement. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 20

4. Proposed Solution to Air Service Deficiency 

Overview 

To address the deficient level of service at Yuma International Airport, and specifically to improve connectivity with 

the national air transportation system via an additional airline hub, the Airport and its community partners are 

seeking a Small Community Air Service Development grant in the amount of $400,000 to provide risk mitigation 

funding in support of nonstop service to a new airline hub. Grant funds will be matched with local funds of 

$100,000, equating to total project fund of $500,000 toward achieving the stated goal. These dollars will be 

supported with $81,806 of “in-kind support” from airport representing landing fees and rental waivers. 

The Yuma community has identified Delta Connection service to Salt Lake City or United Express service to 

Denver as those carriers and hubs which can best provide the needed service improvements. 

Provided below are market proforma projections that the Airport had prepared for both the SLC and DEN routings. 

Both routes are forecast to be profitable but given economic challenges in the airline industry it is a virtual necessity 

for small and mid-size communities such as Yuma to offer risk mitigation mechanisms to airlines. The SCASD 

grant funds requested in this proposal along with matching community funds will provide such a mechanism. 

Targeted Solution #1: Delta Connection service to Salt Lake City 

Restoration of nonstop service to Delta’s hub at Salt Lake City is the preferred alternative for the 

Yuma community as this would reinstate a third airline brand in the market, as well as provide 

access to the SkyTeam global alliance. 

On a steady-state basis, two daily roundtrips to Salt Lake City with a 50-seat regional jet are 

forecast to be profitable for Delta Connection.10

• Total onboard passengers are projected to be 29,029, of which 5,657 are projected to be local 

passengers with the balance being connecting markets. 

• Load factor based on a projected 14 weekly roundtrips and 99% completion factor is 

projected to be 80.6%, consistent with Delta’s early market performance when it previously 

served the market. 

 

10 Assumption for purposes of this application is operations conducted by SkyWest Airlines utilizing Canadair RJ200 equipment. Fuel prices for both SLC and DEN forecast are assumed at an average of $2.25 per gallon, including 

into plane fees and taxes. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 21

• Annualized sector operating costs are projected to total $3.182 million based on a cost per 

ASM of 15.2 cents and assuming fuel at an average price of $2.25 per gallon, including into 

plane fees and taxes. 

• Total sector revenues are projected to be $3.489 million, including estimated calculation of 

segment proration in connecting markets 

• Annualized projected operating profit is $266,092, producing an operating margin of 7.7 

percent. 

The projected performance of Delta Connection service at Yuma is summarized on the table 

below. 

Key Operating Metrics

Sector Mileage (sm) 581

Equipment CRJ-200

Seats 50

Service Pattern (weekly roundtrips) 14

Annual Operations @ 99% Completion Factor 721 

Annual Seats 36,036

Block Time 1.50

Calculated Cost per ASM (CASM) $0.152

Sector Cost $4,416

Traffic & Revenue Summary

 O&D Traffic Net Revenue

Avg NYL Per 

Pass. Rev

Prorated NYL 

Revenue Share

Local O&D Traffic 5,657 $885,177 $156.49 $885,177

Connecting Traffic Flows 23,372 $6,092,379 $260.67 $2,563,326

Total System Traffic & Revenues 29,029 $6,977,556 $240.36 $3,448,503

Economic Performance Projection

Annual Sector Operating Cost $3,182,411

Annual Sector Operating Revenues $3,448,503

Operating Profit/(Loss) $266,092

Operating Margin 7.7%

Calculated Load Factor 80.6%

Summary of Projected Operating Statistics

Delta Connection: NYL-SLC

It is important to note the traffic and revenue projections assume that Delta Air Lines participates 

in the military ticketing program upon reentry into NYL, something it did not do when it served 

Yuma previously and which prevented the carrier from carrying traffic generated by the large 

military presence in the region. The Airport and its community partners are prepared to assist the 

carrier in any possible way related to this matter.
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 22

Targeted Solution #2: United Express service to Denver 

If efforts to recruit Delta Connection service to SLC are unsuccessful, the Airport and its 

community partners have identified United Express to DEN as a viable alternative that can 

provide enhanced connectivity at an additional hub. 

The projected service pattern for United Express on the NYL-DEN segment would be a singledaily rotation operated with 50-seat regional equipment, and complementing the existing service 

to Los Angeles. The lower frequency level for United results in a corresponding lower projection 

of traffic and revenue share and additionally factors in the potential dilution of traffic and 

revenues from existing NYL-LAX service. As such, the projected revenues include only those 

that are “net-new” to the United Airlines system, however the sector is still projected to be 

profitable on a steady-state basis. 

• Total onboard passengers are projected to be 14,806, of which 2,752 are projected to be local 

passengers with the balance being connecting markets. 

• Load factor based on a projected seven weekly roundtrips and 99% completion factor is 

projected to be 82.2 percent. 

• Annualized sector operating costs are projected to total $2.037 million based on a cost per 

ASM of 15.2 cents and assuming fuel at an average price of $2.25 per gallon, including into 

plane fees and taxes. 

• Total sector revenues are projected to be $2.164 million, including estimated calculation of 

segment proration in connecting markets 

• Annualized projected operating profit is $126,092, producing an operating margin of 5.8 

percent. 

The projected performance of United Express between Denver and Yuma is summarized on the 

table on the next page. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 23

Key Operating Metrics

Sector Mileage (sm) 744

Equipment CRJ-200

Seats 50

Service Pattern (weekly roundtrips) 7

Annual Operations @ 99% Completion Factor 360 

Annual Seats 18,018

Block Time 2.25

Calculated Cost per ASM (CASM) $0.152

Sector Cost $5,654

Traffic & Revenue Summary

 O&D Traffic Net Revenue

Avg NYL Per 

Pass. Rev

Prorated NYL 

Revenue Share

Local O&D Traffic 2,752 $442,751 $160.91 $442,751

Connecting Traffic Flows 12,055 $3,046,596 $252.73 $1,720,960

Total System Traffic & Revenues 14,806 $3,489,348 $235.67 $2,163,711

Economic Performance Projection

Annual Sector Operating Cost $2,037,620

Annual Sector Operating Revenues $2,163,711

Operating Profit/(Loss) $126,092

Operating Margin 5.8%

Calculated Load Factor 82.2%

United Express: NYL-DEN

Summary of Projected Operating Statistics

The Underlying Need for Risk Mitigation Funding 

The Denver and Salt Lake City sectors are both projected to be profitable on a steady-basis 

however, as has been noted earlier in this proposal, airlines are particularly risk adverse relative 

to adding new routes in the current economic environment. Compounding the risks is the 

vulnerability of producing air transportation to sudden spikes in oil prices or declining demand 

due to economic woes. 

Moreover, the projected profitability of the routes is provided on a steady-state basis. It is 

possible that revenues early in the route development process could generate negative operating 

margins. The purpose of SCASD funds requested in this proposal is to, as much as practical, 

mitigate the economic risk to airlines associated with new service at Yuma while at the same 

time rectify identified air service deficiencies. 

Marketing Support 

As noted, Yuma International Airport was previously awarded a SCASD grant in 2007 to 

implement a comprehensive marketing and communication program. While the specific project 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 24

supported by those grant funds in completed, the Airport continues to engage in marketing and 

communication activities in the course of its normal business activities. 

The project outlined in this proposal will be supported through the Airport’s current marketing 

activities and, as noted in the next section, the Airport will require a minimum marketing 

expenditure by the air carrier as part of any agreement for risk mitigation funding. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 25

5. Grant Administration Plan 

Grant Request Summary & Goal 

Yuma International Airport and its community partners are requesting a Small Community Air 

Service Development grant in the amount of $400,000 to provide risk mitigation funding in 

support of access to an additional airline hub as outlined in this proposal. This will be matched 

with $100,000 of community funds and $81,806 of “in-kind” support is being offered by Yuma 

International Airport in the form of waived landing fees and rentals. Total project funding is 

approximately $581,806. 

The goal of the project is to increase connectivity offered at Yuma International Airport by 

recruiting service to additional airline hub. 

Risk Mitigation Terms 

Yuma International Airport, subject to Department approval, proposes to implement a risk 

abatement program with the following terms and conditions: 

• Funding would be available to an airline providing nonstop service to an additional airline 

hub with code-share service. 

• Upon award of grant funds, the Airport and its community partners will negotiate with the 

identified prospective airlines. The best service proposal will be identified and a risk 

mitigation agreement between Yuma International Airport and the carrier (subject to 

Department approval) would be negotiated. Under all circumstances, the maximum amount 

of risk mitigation funds available to a carrier will be $500,000. 

• Risk mitigation funding would support the initial phase of new air service. The Airport will 

negotiate a detailed service agreement that is consistent with DOT guidelines for grant fund 

use with the candidate carrier. 

• The candidate carrier will be required to commit a specified amount of marketing funds to 

promote the new service and the Airport will include promotion of the route in its own 

marketing activities. 

• The costs of operating the new service will be defined in discussions with the carrier and 

outlined in a contractual manner. Industry cost data for appropriate aircraft and stage length 

will guide the airport in these discussions. 
Proposal under the Small Community Air Service Development Program 

Yuma International Airport 

DOCKET# OST-2010-0124 Page 26

• A target for overall revenue associated with the new service and the component of that 

revenue that will be directly credited to the new route will be agreed upon. From this, a target 

revenue figure per flight will be established. 

• Yuma International Airport will monitor carrier provided traffic and revenue reports for the 

new service. 

• Any revenue shortfall would be made up by risk mitigation funds, upon detailed invoice from 

the carrier to Yuma International Airport which, in turn, would invoice the Department for its 

share of funding in the manner prescribed in an agreement between Yuma International 

Airport and the Department. 

• The Airport will seek a one-year risk mitigation agreement with the airline for new service, 

meaning that in exchange for the lower risk exposure the Airport expects that new routes be 

given adequate time to achieve revenue maturity. 

Project Term 

Given the state of the airline industry, including reductions in fleet sizes, the Airport respectfully 

requests that it be given up to two years from the date of grant award to enter into an agreement 

with an airline to provide service. Any risk mitigation agreement with an air carrier will have a 

one-year term. 

 

Role of Local Community Partners 

The City of Yuma, Yuma County, Greater Yuma Port Authority, Greater Yuma Economic 

Development Corporation, and Yuma County Chamber of Commerce are partnering with Yuma 

International Airport to ensure success of the program in this proposal. The primary role of the 

partners will be to provide matching funds for the SCASD grant, however they will as needed 

support the Airport with respect to air carrier negotiations and communicating the new service to 

their various memberships and constituencies, as well as continue existing communications with 

incumbent airlines. 

Project Monitoring Plan 

As outlined, the overall objective of this project is to increase the level of connectivity offered at 

Yuma International Airport by supporting the introduction of service to a new airline hub. 

To ensure that grant dollars and community matching funds are used in a manner that achieves 

the stated objectives, the Airport will submit a quarterly progress report to the Department on 

route performance, including load factor, average airfares, traffic origin and destination, and total 

segment revenue compared to targeted revenue. 
APPENDIX B 

Page 1 

Order: 2010-7-16 

Docket DOT-OST-2010-0124 

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM 

DOCKET OST-2010-0124 

SUMMARY INFORMATION

All applicants must submit this information with their proposal, along with a completed form SF424 on 

http:// www.grants.gov. 

A. APPLICANT INFORMATION: (CHECK ALL THAT APPLY) 

 Not a Consortium ⁭ Interstate Consortium ⁭ Intrastate Consortium 

 Community now receives EAS subsidy 

 Community (or Consortium member) previously received a Small Community Grant 

If previous recipient: Date of grant: Jan 1, 2007

Expiration date of grant: Dec 31, 2009

B. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION NAMES) 

 Public Private

1. City of Yuma 1. Northern Arizona University 

2. Yuma County 2. Arizona Western College 

3. Greater Yuma Economic Development Corporation 3. Cocopah Indian Tribe 

4. Greater Yuma Port Authority 4. Quechan Indian Tribe 

5. Yuma County Chamber of Commerce 5. Yuma Regional Medical Center 

C. PROJECT PROPOSAL: (CHECK ALL THAT APPLY)

⁭ Marketing ⁭ Upgrade Aircraft  New Route 

⁭ Personnel  Increase Frequency ⁭ Low Fare Service 

⁭ Travel Bank  Service Restoration ⁭ Subsidy 
APPENDIX B 

Page 2 

⁭ Surface Transportation  Regional Service ⁭ Other (specify) 

 Revenue Guarantee ⁭ Launch New Carrier 

⁭ Start Up Cost Offset ⁭ First Service 

⁭ Study  Secure Additional Carrier 

D. EXISTING LANDING AIDS AT LOCAL AIRPORT:

 Full ILS  Outer/Middle Marker  Published Instrument Approach

 Localizer  Other - RNAV  Other – VOR/DME

 Other - TACAN 

E. PROJECT COSTS: 

1. Federal Amount Requested: $ 400,000 

2. State cash financial contribution: $ - 

3. Local cash financial contribution... $ 100,000 

3a. Airport cash funds: $ - 

3b. Non-Airport cash funds: $ 100,000 

3c. Total local cash funds (3a. + 3b.): $ 100,000 

4. TOTAL CASH FUNDING (1. +2.+3.) $ 500,000 

5. Local funds contributed from already-existing

programs or projects included in line3c. amount: 

 $ - 

6. Local funds contributed from new commitments or 

new resources included in line 3c. amount: 

 $ 100,000 

7. Airport In-Kind contribution: (amount & 

description) one year waive rent & landing fees 

 $ 81,806 

8. Other In-Kind contribution: (amount & description) 

9. TOTAL IN-KIND CONTRIBUTION (7.+8.): $ 81,806 

10. TOTAL PROJECT COST (4.+9.) $ 581,806 
APPENDIX B 

Page 3 

F. ENPLANEMENTS: 

2000 59,451 2004 59,825 2008 87,975 

2001 50,337 2005 61,160 2009 73,329 

2002 52,680 2006 64,574 

2003 54,872 2007 73,487 

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) _______________________________________________________________