# Proposal Under the Small Community

Air Service Development Program

Docket: DOT

- OST

- 2008

- 0100

Sponsoring Entity: Huntsville International Airport

Dun & Bradstreet Number: 063680789

2

- digit Congressional D istrict C ode: 05

July 2013Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### APPLICATION UN DER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST

- 2013

- 0120





###  SUMMARY INFORMATION

 

### All applicants must submit this Summary Information schedule, as the application coversheet, a completed standard form SF424 and the full application propos al on www.grants.gov

. For your preparation convenience, this Summary Information schedule is located at http://www.dot.gov/policy/aviation

- policy/small

- community

- rural

- air

- service/SCASDP

A. P ROVIDE THE LEGAL SPO NSOR AND ITS DUN AND BRAD STREET 

### (D&B) DATA UNIVERSAL

NUMBERING SYSTEM 

### (DUNS) NUMBER 

### , INCLUDING 

### +4, EMPLOYEE IDENTIFICAT ION NUMBER


### (EIN) OR TAX ID



### . Legal Sponsor Name: Huntsville International Airport

DUNS Number: 06

- 368

- 0789



### EIN/Tax ID: 630379566



### B. L I ST THE 

### N AME OF THE COMMUNITY OR CONSORTIUM OF COM MUNITIES APPLYING 

### :

1. C ITY OF 

### H UNTSVILLE 

### /H UNTSVILLE 

### I NDUSTRIAL 

### D EVELOPMENT 

### B OARD


### 2.____________________________________________________

3.____________________________________________________

4.____________

________________________________________

C. P ROVIDE THE FULL AIRP ORT NAME AND 

### 3

- L ETTER 

### IATA A IRPORT 

### C ODE FOR THE

APPLICANT 

### ( S 

### ) AIRPORT 

### ( S 

### ) (O NLY PROVIDE CODES FO R THE AIRPORT 

### ( S 

### ) THAT ARE ACTUALLY

SEEKING SERVICE 

### ).
1. Huntsville International Airport

- HSV 2.

3. 4.Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### D. L IST THE 

### 2

- DIGIT CONGRESSIONAL DISTRICT CODE APPLIC ABLE TO THE SPONSORI NG

ORGANIZATION 

### , AND IF A CONSORTIUM 

### , TO EACH PARTICIPATIN G COMMUNITY



### . 1. 05 2.

3. 4.

E. A PPLICANT 

### I NFORMATION 

### : (C HECK 

### A LL 

### T HAT 

### A PPLY 

### )

X Not a Consortium Interstate Consortium Intrastate Consortium

Community now receives subsidized Essential Air Service

X Community (or Consortium member) previously received a Small Community Air Service Development Program Grant

If previous recipient: Year of grant(s): FY09, FY04

F. P UBLIC 

### /P RIVATE 

### P ARTNERSHIPS 

### : (L IST 

### O RGANIZATION NAMES 

### )

PUBLIC PRIVATE

1. City of Huntsville 1.

2. 2.

3. 3.

4. 4.

5. 5.

G. P ROJECT 

### P ROPOSAL 

### : ( CHECK ALL THAT APPLY 

### )

X Marketing Upgrade Aircraft X New Route

Travel Bank X Service Restoration Subsidy
Surface Transportation Regional Service Revenue Guarantee

X Launch New Carrier X Start

- up Cost Offset First Service
Study X Secure Additional Service Other (explain below)

H. E XISTING 

### L ANDING 

### A I DS AT 

### L OCAL 

### A IRPORT 

### :

X Full ILS Outer/Middle Marker X Published Instrument Approach

X Localizer Other (specify)Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### I. P ROJECT 

### C OST 

### : D O NOT ENTER TEXT IN SHADED AREA



### L INE 

### D ESCRIPTION 

### S UB 

### T OTAL 

### T OTAL 

### A MOUNT



### 1 Federal amount reques ted $ 1,5 00,000

2 State cash financial contribution

Local cash financial contribution

3a Airport cash funds $2
, 000,000

3b Non

- airport cash funds $500,000

3 Total local cash funds ( 3a + 3b ) $2,500,000

4 TOTAL CASH FUNDING ( 1+2+3 ) $4,0 00,000

In

- Kind contribution

5a Airport In

- Kind contribution**

5b Other In

- Kind contribution**

5 TOTAL IN

- KIND CONTRIBUTION

( 5a + 5b )

6 TOTAL PROJECT COST ( 4+5 ) $4, 0 00,000

J. IN

- KIND CONTRIBUTIONS**
For funds in lines 5a (Airport In

- Kind cont ribution) and 5b (Other In

- Kind contribution), please
describe the source(s) of fund(s) and the value ($) of each.Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### K. I S 

### T HIS 

### A PPLICATION 

### S UBJECT 

### T O 

### R EVIEW 

### B Y 

### S TATE 

### U NDER 

### E XECUTIVE 

### O RDER 

### 12372

P ROCESS 

### ?

a. This application was made available to the s tate 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.

L. I S 

### T HE 

### A PPLICANT 

### D ELINQUENT 

### O N 

### A NY 

### F EDERAL 

### D E BT 

### ? (I F 

### “Y ES 

### ”, P ROVIDE



### E XPLANATION 

### )

X No Yes (explain)

______________________________________________________________________________

______________________________________________________________________________ X

# Table of Contents

Executive Summary

________________________________ __ 1 Air Service Overview

________________________________ __ 2

A ir Service Needs and Deficiencies

________________________________ _ 2 Passenger Leakage

________________________________ ______________ 2 Top O/D Markets Not Served

________________________________ ______ 4 HSV Tops Highest Fares in the Nation

______________________________ 5
Historical Service

________________________________ _______________ 6 Efforts to Improve Air Service and Recapture Le akage Market

__________ 7

Market Research

________________________________ _______________________ 7 Air Service Budget

________________________________ _____________________ 7
Promotiona l Campaigns and Programs (2010

- 2013)

__________________________ 7 

# Strategic Plan

________________________________ _______ 8
Primary Goals:

________________________________ __________________ 8 Objectives:

________________________________ _____________________ 8 

# Plan Implementation and Funding

_______________________ 9
Public/Private Partnership

________________________________ ________ 9 Funding Overview

________________________________ _______________ 9 Community and Airport Participation

______________________________ 11
Airport Marketing Program

________________________________ _____________ 11 Marketing Budget and Schedule

________________________________ _________ 11 

### Funding Assurances

________________________________ ____________ 13 Legal Sponsoring Entity

________________________________ _________ 13
Conclusion

________________________________ ____________________ 13 

# Previous Grants

________________________________ ____ 14 Community Overview

________________________________ 15 Appendix A: Letters of Support

_________________________ 19Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### Allegiant Air

________________________________ ___________________ 20 City of Huntsville, May or’s Office

________________________________ ___ 21 Madison County Commission

________________________________ _______ 22 Chamber of Commerce of Huntsville/Madison County

____________________ 23 Huntsville/Madison County Convention & Visitors Bureau

_________________ 24 City of Athens, Mayor’s Office

________________________________ ____ 25

Lime stone County Commission

________________________________ ______ 26 Greater Limestone County Chamber of Commerce

______________________ 27 City of Decatur, Mayor’s Office

________________________________ _____ 28 Morgan County Commission

________________________________ _______ 29 Decatur/Morgan County Chamber of Commerce

________________________ 30

Decatur

- M organ County Convention and Visitors Bureau

_________________ 31 City of Madison, Mayor’s Office

________________________________ _____ 32

Madison Chamber of Commerce

________________________________ ____ 33

North Alabama Mountain Lakes Tourist Association

_____________________ 34Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 1 

# Executive Summary

Huntsville International Airport (HSV) serves an 18

- county region, which encompasses 12 counties in North

Al abama and six counties in South Central Tennessee. Passenger service is provided by four commercial

airlines and serves almost 1 .2 million customers annually. HSV sits al most equally distant to Nashville and
Birmingham airports

– both of which are served by Southwest Airlines. High fares at HSV continue to drive
significant passenger volumes to neighboring Birmingham, AL ( BHM) and Nashville, TN ( BNA ); HSV has
maintained a position in the top eight of the highest fare airports in the country as state d by the Bureau of
Transportation Statistics Domestic Air F are report for the past five years

. In 2012 , HSV conducted a Leakage
Study

, show ing HSV loses about 39% of its market. The primary markets that are recapturing HSV passengers
are Birmingham , AL and Nashville , TN

, with some leakage to Atlanta , GA

, and Chattanooga , TN

. Working with

exist ing and potential carriers , the airport has attempted to address leakage.

After AirTran launched service, using funds from the 2010 grant

, HSV ’s leakage to other airpo rts was
recaptured and fares declined

. In fact, HSV dropped as low as eighth on the BTS list of domestic air fares

. HSV

was one of 16 small communities that lost Air T ran service due to the merger with Southwest and we began to

see an increase in market lea kage again

.

To achieve considerable and long

- term air service enhancement , HSV needs a sustainable air service program
that is mutually beneficial for the community and the carriers

. As a result on June 11, 2013, the board of
directors adopted a new incent ive program to offer airline incentives up to $2 million. This incentive can be used
by multiple carriers, t o offset current or future airport costs for a two

- year promotional period

, with the goal of
promoting new passenger service which will reduce the n umber of passengers driving to other airports. The
objective of the program is for the airlines to provide a n innovative approach to r educe our leakage . The

airline (s) must offer a program which can be readily advertised and substantially reduce the number of

passengers driving to alternate airports. The grant will supplement the Airport’s established incentive program
by offsetting the start

- up /station costs and marketing costs

. In addition, city leaders are committed to this grant

, pledging more than $ 500 ,000 in cash from the community as a match to the proposed grant

. Key attributes of program:

 Add new air service resulting in:

o Reduce d leakag e

o Increase d competition

o Increase d enplanements

o Reduce d fares

Long

- term success will be achieved through:

 Reliev ing initial start

- up /station costs and marketing costs for new program

 Leveraging airport’s experience in timely and successful implementation of 2004 and 2010 SCASDP grants

 Strong marketing plan and incentives to support new program

 Community support of $500 ,000Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 2 

# Air Service Overview

A ir S ervice N eeds and D eficiencies

The air service needs and deficiencies come from three main areas:

1. Significant leakage

2. Unserved marke ts

3. Highest fares in the nation 

## Passenger Leakage

HSV passengers are primarily driving to BN A and BHM

, however we are losing passengers to Atlanta and
Chattanooga as well because they are able to obtain more competitiv e fares and non

- stop destinations (see

Exhibit 1 ). Very few communities share the unique geographical location that HSV has with low fare service

from both Southwest Airlines and Front ier Airlines in close proximity of its airport

.


### Exhibit 1 : 2013 Airport Market Share of Huntsville Passenger Leakage

To measure drive traffic, a monthly analysis is conducted of cars registered in H SV’s 18

- county service region
parked in the BHM and BNA airport parking lots (see Exhibit 2 ) . The following chart is a sampling of the

average number of cars, from the HSV service region, parked weekly in the BNA and BHM parking lots

. A
special survey is a lso conducted on holidays such as Th anksgiving and Christmas to specifically gauge

leisure travel. As noted on Exhibit 2

, with the presence of AirTran and non

- stop service to BWI and MCO

, our
drive traffic declined. However, with the loss of AirTran and t he non

- stop service the drive traffic increased.

The drive traffic trend usually corresponds with the passenger traffic at HSV.Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 3 Exhibit 2 : Huntsville Vehicle Tag Analysis

*Estimated yearend total number of vehicles for 2013

HSV has non

- stop service to nine airports in eight cities (see Exhibit 3 )

. 

### Exhibit 3 : Current Air Service Map

– July 2013Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 4 

## Top O/D Markets Not Served

Year

- ending fourth quarter 2012 shows that more than 50% of HSV’s top 10 destinations are not currently

served with non

- stop service, with Baltimo re and Orlando topping the list (see Exhibit s 4 and 5 ).



### Exhibit 4 : Top 10 O&D Markets Ranked by Passengers, YE4Q12

Rank Destination Annual Passengers Currently Has Non

- Stop Service?

1 

### Baltimore, MD 85,457 No

2 

### Washington, DC (National) 66,864 Yes

3 

### Orlando, FL 55,849 No

4 

### Los Angeles, CA 33,791 No

5 

### Houston, TX (George Bush Intc.) 30,333 Yes

6 

### Dallas, TX (Dallas/Ft Worth) 30,088 Yes

7 

### Boston, MA 28,031 No

8 

### Denver, CO 24,604 Yes

9 

### Charlotte, NC (Douglas) 24,386 Yes

10 

### Chicago, IL (O’Hare) 22,846 Yes

Source: DOT DB1B data via Diio Mi Internet

- Based Aviation Data Tool as of YE 4Q12



### Exhibit 5 : Current Air Service Details, Scheduled for July 2013

Airline Destination Equipment Type Flights / Day Seats / Day

Amer ican Dallas/Fort Worth, TX Narrow

- body Jet 3 320

American Chicago

- O’Hare, IL Regional Jet 2 94

Delta Atlanta, GA Narrow

- body Jet 5 665

Delta Atlanta, GA Regional Jet 4 215

Delta Detroit, IL Regional Jet 2 100

United Denver, CO Regional Jet 1 50

Unit ed Washington

- Dulles, VA (IAD) Regional Jet 2 100

United Houston

- Intercontinental, TX Regional Jet 3 150

United Chicago

- O’Hare, IL Regional Jet 1 50
US Airways Charlotte

- Douglas, NC Regional Jet 5 325
US Airways Washington

- National, DC Regional Jet 2 1 38
US Airways Washington

- National, DC Regional Jet 2 100

Source: Diio Mi Internet

- Based Aviation Data as of 07/12/13Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 5 

## HSV Tops Highest Fares in the Nation

The latest Bureau of Transportation Statistics report show s HSV to be the highest fare airport in t he country

for 3 rd and 4 th quarter s of 2012

, and in the 1 st quarter of 2013 (see Exhibit 6 ) while hovering in the top tier for
the past five years

. In fact, HSV’s average fare of $54 3 is 4 3 % higher than the national average of $37 9 while

HSV is 33 % higher than BHM and 47 % higher than BNA (see Exhibit 7 ).



### Exhibit 6 : Highest U.S. Domestic Average Itinerary Fares 1 st 

### Quarter 2013

Note number on bar chart represents HSV ranking per quarter by BTS



### Exhibit 7 : Highest U.S. Domestic Average Itinerary Fares 1 s t 

### Quarter 2013

Source: Bureau of Transportation Statistics report ( 1 st Q 201 3 ) Methodology: Top 100 Airports* Based on 201 3 U.S. Originating Domestic Passengers. Fares based on domestic itinerary fares, round

trip or one

- way for which no return is pur chased. Fares are based on the total ticket value which consists of the price charged by the airlines plus any additional taxes and fees levied by an outside entity at the time of purchase. Fares include only the price paid at the time of the ticket purcha se and do not include other fees paid at the airport or onboard the aircraft. Averages do not include frequent

- flyer or “zero fares” or a few abnormally high reported fares. Not including Alaska, Hawaii or Puerto Rico

.Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 6 Passengers at HSV experience some of the highest fares with regards to walk

- up fares (last minute fares). See sample of walk

- up fares below (see Exhibit 8 )

.



### Exhibit 8 : Sample Current Comparison of HSV Walk

- up Fares

HSV BNA BHM HSV Higher/Lower BNA/BHM (Average)



### Washington

- National, DC $1,762 $314 $936 $625 65%

Newark, NJ $1,020 $740 $350 $545 47%

Dallas/Ft Worth, TX $704 $372 $220 $296 58%

Baltimore, MD $616 $376 $356 $366 41%

Orlando, FL $544 $364 $410 $387 29%

Source: Sab r e fare quotes pulled July 16, 2013 for travel outbou nd on July 16, 2013 and return July 19, 2013



## H istorical S ervice

HSV has experienced a change in traffic as the market has responded to changes in air service (see Exhibit 9 ). Low fare service and non

- stop destina tions have positively impacted passenger traffic.



### Exhibit 9 : Enplaned Passengers

– Past Five Years

A llegiant Air

– May 200 7

– Oct ober 200 8

A irT ran

– May 2010

– August 20 12

Source: Huntsville International AirportHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 7 

## Efforts to Improve Air Service and Recapture Leakage Market

Market Research This community has been extremely active since 1995 in the pursuit of new air service and competitive airfares. Below is a list of such efforts.

Community Efforts

 Conduct Focus Groups, 1994

– Current

 C onduct Annual Passenger Survey, 1994

– Current

 Conduct Annual Drive Market Survey, 1998

– Current

 Conduct Monthly Car Tag Analysis, 1995

– Current

 Conduct Annual Drive Market Analysis, 1998

– Current

 Conduct Weekly Competitive Airport Fare Analysis, 1994

– Current

 Established Regional Partnership Council, 1991

– Current

 Established Business Travel Council, 1998

– Current

 Make Presentations to Existing Airlines, 1996

– Current

 Provide Start

- up Incentives to Airlines for New Non

- stop Service, 1996

– Current

 C reate d Incentive Program for Sister

- c ity Fare Matching, 2000

– Current

 Applied for DOT Air Service Grants, 2003, 2004, 2006, 2010

 Recipient of DOT Grant and Cr eated Huntsville Hot Ticket Program, 2004

 Conducted Campaign for US Airways Fare Reduction Progra m for 25 C ities from HSV, 2006

 Created Travel Assistant Program

– Huntsville Hot Ticket Line, 2008

 Recipient of DOT Grant and A ttracted AirTran, 2010



### Air Service Budget Annually

, the Airport allocates about $782,000 to support air service efforts which in cludes airport staff, advertising, airline meetings, and marketing programs. Through the years the Airport has invested nearly $6 million in waived airport fees, advertising campaigns and o ther concessions to incentivize new air service and competitive far es . This grant request will not replace these funds but will be use d to supplement our ongoing efforts.



### Promotional Campaigns and Programs (2010

- 2013)
In addition to the items listed above

, the Airport has create d unique promotions and programs to serve b oth business and leisure travelers in our service region.

 “Huntsville Hot Ticket and Travel Assistant Program”

- A free information and ticket booking service provided through Huntsville International Airport. If passengers need help from a real person w ith questions about booking a ticket, group travel, or the latest airline rules and regulatio ns, our Hot Line (256

- 258

- 1944) connects them di rectly to a travel specialist. This complementary service receives over 2,200 calls a month fro m passengers seeking assistance.

 2010 DOT Grant for AirTran service to MCO and BWI

– The 2010 grant was used to attract serv ice to MCO and BWI by AirTran. The service was launched an d impacted our community with a n average 50% reduction in fares to those markets

, and BWI a nd MCO grew to our number one and two top destinations, respectively.Huntsville International Airport

Small Community Air Service Development Grant Application

– July 201 3



### 8 

# Strategic Plan

The objective of the grant request is to fund start

- up /station costs and marketing efforts for the airlines to
provide program s that will reduce the number of passengers driving to alternate airports. The airline can

be any carrier currently serving the market or a new entrant such as Allegiant Air, wh ich has provide d a letter of support with this application

. The airline must offer a program which can be readily advertis ed
and substantially reduce the number of passengers driving to alternate airports. The airline must
implement a program that is mutually beneficial for the community at large for either leisure or business

travelers. This grant can be used to fund new pro grams by multiple airlines in our market. The $1,5 00,000 grant supplemented with the $500,000 grant from the City of Huntsville will be used to offset the start

up /station costs which could include but not limited to ground handling

, salaries for new emplo yees and
marketing costs for any carrier that implements a program that reduces our passenger leakage

.



## Primary Goals:

The community has three chief goals for seeking a small community air service development grant and
can be accomplished by the following plan.

1. Recapture leakage

– prevent leakage from increasing and threatening existing service

.

2. Increase enplanements in order to attract new service and maintain existing service

.

3. Increase awareness of competitive fares at HSV as compared to competing airport s.



## Objectives :

1. Fund incentives (start

- up /station costs

- including but not limited to ground handling, employee
salaries, marketing/promotional costs) for the airlines to implement programs that will create fare

par it y with competing airports . The program s are targeted at retaining HSV passengers in our
service region

, not attracting passengers from other areas.

2. Fund local marketing and promotional programs to create awareness of airline fare programs and
competitive air fares. Our airport branding has suf fered from the negative publicity with the BTS
rankings thus creating a perception that low fares do not exist in our market. This marketing
program wil l be crucial in helping retain our passengers.Huntsville International Airport

Small Community Air Service Development Grant Application

– July 201 3



### 9 

# Plan Implementation and Funding

Public/Private Partner ship

The City of Huntsville and the Huntsville Industrial Development Board have formed a partnership to
provide financial suppor t for air service development. They supported the 2010 grant and are partners
with this application as well.

In addition, we ha ve two active air port community support groups. These groups include the Regional
Partnership Council and the Huntsville International A irport Business Travel Council. The Regional
Partnership Council, formed in 1991, includes elected officials, chambers of commerce, tourism agenci es and corporations from the 18

- county service region of the airport. The Regional Partnership Council ’s

mission is to create an environment of ownership for the HSV facilities, to promote strong working
relationships and to enco urage information and resource sharing among the Tennessee Valley
communities in the HSV service region . The Huntsville International Airport Business Travel Council

assist s the airport in air service development e fforts and currently has 80 active members throughout the
region

.



## Funding Overview

As detailed below, to secure service from our carriers the community is committing $500,000 in cash

towards the start

- up /station costs and marketing costs, while the airport will pledge up to $2,000,000 in

incentiv es. On June 11, 2013 the HSV board of directors adopted new incentives for the air service
development program (section 10) in the Statement of Policy, Regarding Airlines Use and Occupancy of
Airport Facilities

- FY2014.

Section 10
Air Service Development Program

The Authority has instituted an incentive program for Airlines willing to start new service from the Airport. The Authority will consider modifying the incentives or granting new incentives for proposals from A irlines which will advance the Autho rity’s goal of promoting new passenger service to a greater number of destinations, service which will reduce the number of passengers driving to other airports from the Airport ’ s service area and cargo service which will promote international air commerce . The Executive Director shall have the authority to modify existing incentives and implement new incentives promoting the stated goals. Any new or modified incentives will be offered to all air carriers. The incentives
amounts s t

ated below are generall y available to the first Airline or Airlines to qualify for the passenger incentives and for the cargo incentive respectively. The manner in which the said amounts are utilized and distributed shall be at the sole discretion of the Authority and will be do cumented in an agreement with each qualifying Airline.
A. Passenger Service Incentives
The Authority is amenable to granting new incentives for proposals from A irlines which increase enplanements at the Authority by reducing the number of passengers drivin g from the AirportHuntsville International Airport

Small Community Air Service Development Grant Application

– July 201 3



### 10 service area to other airports. The amount of any such credit, to be determined in the Authority’s sole discretion, will be based on the increased numbers of passengers taking advantage of the proposed service. In order to qualify for an incentive an Airline must offer a program which can be readily advertised and which substantially reduces the number of passengers driving from the Airport ’ s service area to other airports. To qualify for such an incentive an Airline must provide a detail ed written proposal which results in a written agreement entered into by the Airlines and the Authority. The maximum amount of all incentives available from the Authority for Air Carrier Airlines for Fiscal Year 20 14 is TWO MILLION AND 00/100 DOLLARS ($2,0 00,000)

.

Thus HSV is requesting a $1,500,000 grant to supplement local start

- up /station costs and marketing

costs

. Community Airport DOT Total Fund Uses Cash In

- Kind Cash In

- Kind Grant

Marketing $500,000 $500,000

Incentives $2,000,000 $2,000 ,000
Start

- Up /Station Costs $500,000 $ 1,0 00,000 $1

, 5 00

, 000

Total $500,000 $2,000,000 $ 1,5 00,000 $ 4,0 00,000Huntsville International Airport

Small Community Air Service Development Grant Application

– July 201 3



### 11 

## Community and Airport Participation

Community Participation

The community participation will include $ 500,000 towards the program (s) from HSV.

Airport Marketing Program
HSV will implement a comprehensive marketing campaign surrounding new programs at the airport, including:

 Traditional Media Coverage

o Host roll

- out media event

o Disseminate national news wire coverage for launch of servic e

o Visit regional talk shows and editorial boards to discuss service

o Keep new service continuously in the news throughout 18

- county service region (print, TV, radio, online)

 Social Media Exposure

o Mention weekly the new service across HSV social media chan nels

o Build exclusive social media campaign surrounding new service

o Host social media contests for airline voucher giveaways

o Cross promote service with corporate and community social media streams

o Educate local and travel bloggers to generate articles on n ew service

o Feature new service on HSV blog

 Direct Marketing

o Sponsor $50,000 in airline voucher giveaways through Huntsville Hot Ticket 32,000 membership

o Advertise monthly in Huntsville Hot Ticket enewsletter and website

o Advertise in baggage claim area and along the terminal at HSV

 Community Outreach

o Develop and distribute marketing materials to Chambers of Commerce, corporations, tourism agencies and travel agents in 18

- county service region

o Distribute giveaways promoting the new service at tourism infor mation booths

o Feature service in all speaking engagements and tours (approximately two per month)

o Attend and promote service at large

- scale community events

o Engage community and business leaders to be ambassadors for the new service



### o Solicit feedback from p assengers on service quarterly to determine services’
effectiveness



### Marketing Budget and Schedule

Exhibit 1 0 contains a detailed marketing plan to launch the program to reduce drive traffic.Huntsville International Airport

Small Community Air Service Development Grant Application

– July 201 3



### 12 Exhibit 1 0 : Marketing PlanHuntsville International Airport

Small Community Air Service Development Grant Application

– July 201 3



### 13 

## Funding Assurances

HSV will be th e coordinator between the public/priva te partners for the DOT grant. As well, HSV will take
responsibility for the grant funds.



## Legal Sponsoring Entity

Huntsville

- Madison County Airport Authority
( Huntsville International Airport

– HSV)

1000 Glenn Hearn Blvd., Box 20008

Huntsville, AL 35824

Contact: Richard Tucker, Executive Director, 256

- 258

- 1955



## Conclusion

Per the DOT order soliciting Small Community Air Service Development Program p roposals

, Huntsville
International Airport should be given priority consideration for t his grant by having met the criteria as set

forth in the order soliciting proposals as follows:

1. BTS reports HSV has the highest average air fares in the country

– 43 % higher than the
national average; and

2. The community will provide 25% of the cost of the program; and

3. The City of Huntsville and the Huntsville Industrial Development Board is a public

- private
partnership formed to initiate programs with the carriers to improve air fares and substantially
reduce the number of passengers dri ving from the airport service area to other airports.

4. This gran t will provide material benefits to a broad segment of the traveling public including
businesses, educational institutions, and other enterprises.

5. This grant will be used within a two

- year peri od upon receipt of the award and carrier
agreement to provide program/service as described above

. The project timeline will include
one year for finalizing agreements with the carriers. The next phase will include the

a nnouncement of the program/service

, start of program/service and then the marketing
campaign. It is anticipated that the payout, to the carrier(s) will happen on a monthly basis.Huntsville International Airport

Small Community Air Service Development Grant Application

– July 201 3



### 14 

# Previous Grants

The current DOT grant application represents a new project and is not concurrent with the 2004 or 2010

grants. The new grant is justified based on the service deficiencies out of HSV and the grant would go
towards off setting start

- up risks and station costs for new or incumbent carriers

.

2004

The 2004 grant was for funding to build a “fare alert” email marketing system

– Huntsville Hot Ticket. We
have been able to highlight “hot fares” for top destinations and provide information on airl ine low fare
weekend getaways. The development and implementation of the Huntsville Hot Ticket system and site

w ent very well; and the program developed in a timely manner (3Q 2005) and within budget. As well, we
supplemented the program f our years later with a Huntsville Hot Ticket Line (256

- 258

- 1944) to assist

passengers

– at no cost to them

– in finding hot fare s and deals in and out of Huntsville. The

infrastructure created for Huntsville Hot Ticket is still utilized today for direct marketing to nearly 32,000
people.

2010

The 2010 grant was funding for a revenue guarantee for low cost non

- stop service to Orl ando and

Baltimore. AirTran announced service and once the service was added our fares to MCO and BWI
decreased on average 50% , as well these two markets rose to the number one and number two

destinations out of HSV. AirTran’s service was so successful our BWI passenger market grew 134% and
MCO grew 31%. During AirTran’s presence HSV moved as low as number eight, on the air fare list

, as ranked by the BTS. When Southwest merged with AirTran, HSV was one of 16 small communities that

lost their AirTran servi ce, thus bringing our market full circle with the loss of non

- stop service and the
climb back to the highest air fares in the U.S.Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 15 

# Community Overview

The Huntsville Metropolitan Area continues to gain recognition as a “community hot bed” to live, wo rk and play . B elow is a partial list of recognitions:

Huntsville/ Madison County, Alabama, is geographically near the center of the southeastern United States with
more than 430,000 people in the Metro area. Madison County and its surrounding counties form a thriving
regional market with a population of more than one mil lion people. This metro area has strong growth in
population, employment, annual pay and labor force (see Exhibit 1 1 )

. The Huntsville community serves as the
primary economic engine for the northern Alabama and southern Tennessee region. Sin ce the early 19 50s,

Huntsville has been one of the nation’s principal centers for space and defense technology. Home to the work of
Dr. Wernher von Braun and America’s rocket development programs, the Huntsville community and Redstone

Arsenal became the location of choic e for the country’s best and brightest aerospace engineers and scientists.
Rocket City USA, as the region was known, gave original meaning to the term “rocket science.” The strong
economic base of this community requires connectivity to the world at compe titive fares.



### Exhibit 1 1 : Metro Area G rowth

Source: Chamber of Commerce of Huntsville/Madison County Madison named one of Family Circle's 10 Best Towns for

Families
June 2013 Huntsville named 2013 Playful City USA

May 2013

Huntsville named one of 10 great places to be inspired by

innovation Ap ril 2013 Alabama rated #2 state for small business friendliness April 2013

Huntsville named among the nation's Top 20 strongest

economies April 2013 Huntsville named among Metro Magnets Index "Fastest Growing U.S.

Cities”
November 2012Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 16Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 17Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 18Huntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 19 

# Appendix A : Letters of Support

1. Allegiant Air

2. City of Huntsville, Mayor’s Office

3. Madison County Commission

4. Chamber of Commerce of H untsville/Madison County

5. Huntsville/Madison County Convention & Visitors Bureau

6. City of Athens, Mayor’s Office

7. Limestone County Commission

8. Greater Limestone County Chamber of Commerce

9. City of Decatur, Mayor’s Office

10. Morgan County Commission

11. Decatur/Morgan County Chamber of Commerce

12. Decatur

- Morgan County Convention and Visitors Bureau

13. City of Madison, Mayor’s Office

14. Madison Chamber of Commerce

15. North Alabama Mountain Lakes Tourist AssociationHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 20 Allegiant AirHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 21 City of Huntsville, Mayor’s OfficeHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 22 Madison Coun

ty CommissionHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 23 Chamber of Commerce of Huntsville/Madison CountyHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 24 Huntsville/Madison County Conve ntion & Visitors BureauHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 25 Cit y of Athens, M ayor’s OfficeHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 26 Limestone County CommissionHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 27 Greater Limestone County C hamber of CommerceHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 28 City of Decatur, Mayor ’s OfficeHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 29 Morgan County CommissionHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 30 Decatur/Morgan County C hamber of CommerceHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 31 Decatur

- Morgan County Convention and Visitors B ureauHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 32 City of Madison, Mayor’s OfficeHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 33 Madison C hamber of CommerceHuntsville International Airport

Small Community Air Service Development Grant Application

– July 2013



### 34 North Alabama Mountain Lakes Tourist Association