### August 2, 2011 Legal Sponsor: Grand Junction Regional Airport Authority DUNS: 15-615-5394 Docket Number: OST-2011-0119 Contact: Rex A. Tippetts, A.A.E. Director of Aviation Grand Junction Regional Airport 2828 Walker Field Drive, Suite #301 Grand Junction, Colorado 81506 Phone: 970-248-8588 Email: rtippetts@gjairport.com 

# Grand Junction Regional Airport Proposal Under the 2011 Small Community Air Service Development Programii 

### I Summary Information Pg. 1

II Proposal Highlights Pg. 4

III Air Service Background Pg. 7

IV Air Service Issues Pg. 15

V Action Plan Pg. 16

VI Schedule/Monitoring Pg. 21 

# TABLE OF CONTENTS1|Grand Junction Regional Airport 

# SUMMARY INFORMATION APPENDIX B Page 1 Order: 20 10

- 7

- 16 Docket D O T

- OST

- 2010

- 0124

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM DOCKET DOT

- OST

- 20 10
- 0124

SUMMARY INFORMATION
All applicants must submit this information with their proposal, along with a completed form SF424 on http://www.grants.gov

. A. A PP LICANT I NFORMATION : (C HECK A LL T HAT A PPLY ) Not a Consortium Interstate Consortium Intrastate Consortium Community now receives EA S subsidy Community (or Consortium member) previously received a Small Community Grant If previous recipient : D ate of grant: xxxxxxxxxxxxxx E xpiration date of grant: xxxxxxxxxxxxxx

B. P UBL IC /P RIVATE P ARTNERSHIPS : (L IST O RGANIZATION NAMES )

Public Private

1. 1. 2. 2. 3. 3. 4. 4. 5. 5.

C. P ROJECT P ROPOSAL : ( CHECK ALL THAT APPLY )
Marketing Upgrade Aircraft New Route Personnel Increase Frequency Low Fare Service Travel Bank Service Restoration Subsidy X

Grand Junction Regional Airport West Star Aviation
Grand Junction Visitor & Convention Bureau

X X

X|Grand Junction Regional Airport

2 

# SUMMARY INFORMATION 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. E XISTING L ANDING A IDS AT L OCAL A IRPORT : Full ILS Outer/Middle Marker Published Instrument Approach Localizer Other (specify)

E. P ROJECT C OST : 1. Federal amount requested:

__________________________ 2. State cash financial contribution:

_____________ _____________ 3. Local cash financial contribution

... 3a. Airport cash funds :

__________________________ 3b. Non

- airport cash funds :

__________________________ 3c. Total local cash funds (3a. + 3b.) :

__________________________ 4. TOTAL CASH FUNDING (1. + 2. + 3c.):

__________________________ 5. Local f unds c ontribut ed from already

- existing
programs or projects included in l ine 3c. amount :

__________________________ 6. Local f unds c ontrib u t ed from new commitments

or ne w resources included in line 3c. amount :

__________________________ 7

. Airport In

- Kind contribution:

__________________________ (amount & description) 8

. Other In

- Kind (amount & description) contribution:

__________________________

9

. TOTAL IN

- KIND CONTRIBUTION ( 7 . + 8 .):

__________________________ 10

. TOTAL PROJECT COST (4. + 9 .) :

__________________________ X X

X


## $150,000.00 $0.00
$10,000.00 $5,000.00 $15,000.00 $15,000.00
$0.00
$15,000.00 $5,000.00 Program Administration 

## $10,000.00 In-Kind Marketing/Promotion 

## $15,000.00 $30,000.003|Grand Junction Regional Airport 

# SUMMARY INFORMATION APPENDIX B Page 3
F. E NPLANEMENTS : 2000 ________________ 2004 ________________ 2008 ______________ 2001 ______________ __ 2005 ________________ 2009_______________ 2002 ________________ 2 006 ________________ 2004

_______________ _ 2007

________________
G
. 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 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. I S T HE A PPLICANT D E LINQUENT O N A NY F EDERAL D EBT ? (I F “Y ES ”, P ROVIDE E XPLANATION ) No Yes (explain) _____________________________________________ 136,611 144,027 212,598 120,057 159,715 228,850 125,441 160,307 127,584 170,836

X

X|Grand Junction Regional Airport

4 

# PROPOSAL HIGHLIGHTS

PROPOSAL HIGHLIGHTS This Small Community Air Service Development Program grant application for the Grand Junction Regional Airport Authority/Grand Junction Regional Airport, in Grand Junction, Colorado meets the guidelines set out in Docket DOT-OST-2010-0124. The Grand Junction Regional Airport Authority, the Airport sponsor, is requesting $150,000.00 in federal assistance to facilitate the implementation of a $180,000.00 air service improvement initiative. The project’s goals are to improve air service to abroad section of Grand Junction’s community traveling to destination located to the northeast and west United States, mitigate the need to drive long distances to access air service and competitive fares to these markets, and improve local access to the national air transportation systems for this isolated part of Colorado.
The plan to accomplish these goals are: 1. Secure additional seat service with an airline that has a hub located northeast or west of Grand Junction, Colorado. 2. Support the long-term success of the initiative with a creative, three-part marketing program that specifically targets the market’s barrier to entry. 3. Support alternate airline initiatives at other hub airport that accomplish the goals of this application.
This plan will reduce local air travelers’ need to drive to Denver International Airport or Salt Lake City International Airport to access air service and competitive fares to destinations located in the northeastern or western United States and beyond. Increasing the supply of seats will have the added benefit of decreasing airfares to destinations east of Grand Junction, Colorado.5|Grand Junction Regional Airport 

# PROPOSAL HIGHLIGHTS

AIR SERVICE ISSUES Grand Junction is a relatively isolated community in west central Colorado approximately 250 miles from Denver, Colorado. It is the economic center of the regional and more importantly, is the epicenter of Colorado’ energy industry,, as well as the regional center for medical, business, and retail. This remote part of Colorado is highly dependent on air service for commerce and communication with the rest of the country. Currently, eastbound air service does not provide the service needed to meet robust demand. Northeast bound service is focused on the Denver hub and service is provided by only one carrier, causing high airfares and high load factors. The net result is that one out of every three passenger in Grand Junction’s top 29 eastbound markets drives nearly five hours to Denver, Colorado. It is an understanding to say that Grand Junction is in need of additional eastbound air service/service. Secondly, westbound service is focused on primarily the Salt Lake City hub and service is provided primarily by only one carrier year-round and by a second carrier seasonally. The net result is that the majority of travelers are driving four hours to Salt Lake City, Utah or five hours to Denver, Colorado to access service and competitive airfares. Consistent with the law of supply and demand, Grand Junction’s shortage of northeast bound and west bound service and limited competition have resulted in over priced airfares. Average airfares for the year ending July 2011 were significantly higher than Denver in 21 of the top 25 markets and notably higher in all the westbound markets. On a sample day in July 2011, published business airfares in Grand Junction’s top northeast bound markets ranged from $80.00 to $374.00 higher than comparable Denver fares. Given the service shortage, the fare comparisons are not surprising, but they are a handicap to market growth and evidence that the Grand Junction market is over priced. Grand Junction is and under served and overpriced market in terms of west bound and north east bound service.

A WELL DEFINED PLAN The proposed plan includes a creative and comprehensive three-part marketing campaign to support additional airlines service to a hub airport located either west or northeast for Grand Junction. Using the marketing program as an initiative, the plan is to add airline service and/or service to a western of northeastern hub. With high demand and airlines seats in short supply, Grand Junction’s air travelers have been trained to drive to Denver or Salt Lake City to catch flights for western or eastern destinations. Strategically, the eight-month marketing plan underwrites the success of this initiative by focusing on breaking those travel habits and expanding our catchment area, with a heavy emphasis on capturing the business traveler. The marketing plan uses the power of a unique Mileage Award Bonus Program (frequent flyer) in concert with a Business Flyer Marketing Plan and traditional General Public Marketing Plan to promote service improvements, stem passenger diversions and increase our catchment area.|Grand Junction Regional Airport

6 

# PROPOSAL HIGHLIGHTS

BROAD COMMUNITY SUPPORT The Grand Junction Regional Airport Authority, the Grand Junction Visitor and Convention Bureau, and West Star Aviation, have formed a public-private partnership in support of this application. The strength of this public-private partnership comes from the cohesiveness of these groups and their ability to work collectively to market and promote air service opportunities. The partners have a broad knowledge and history of collaborating and developing marketing goals that support and benefit the overall community. The public-private partnership created for this grant application builds on the foundation of these relationships that span many years and numerous projects. Non-airport sources will fund just over 3 percent ($5,000.00) of the $150,000.00 cash requirement of the proposed plan. Grand Junction Regional Airport Authority and the Grand Junction Visitor and Convention Bureau will provide an additional $25,000.00 in cash and in-kind contributions to support the project.
STRONG ABILITY TO IMPLEMENT THE PROJECT Communications with the primary target airlines indicate an interest by the carriers in servicing markets to either the northeast or west of Grand Junction. From the community’s perspective, the Grand Junction Regional Airport Authority, the Grand Junction Visitor and Convention Bureau, and West Star Aviation, are ready to launch the Air Service Support Program as soon as a grant is received and an agreement is reached with a carrier.

MULTIPLE SECTORS OF THE COMMUNITY WILL BENEFIT Grand Junction is the type of community/region that the United States Congress had in mind when it created the Small Community Air Service Development Program. Grand Junction MSA has a population of 143,171 and is over 250 miles form the larger metropolitan areas of Denver and Salt Lake City. By any measure, it is a remote location. Unlike other Colorado communities, Grand Junction’s economy is first business and second leisure. Grand Junction is the regional center for travel, retail, health care, construction and supplies, education, business and professional services, and more. Because of Grand Junction’s isolated location and its role as a regional center, air service is critical to all aspects of the community. The importance of air service to this region is compounded by its vast energy resources. It is not a stretch to mention that these resources are also important to our nation and that the proposed improvements support their development.7|Grand Junction Regional Airport 

# AIR SERVICE BACKGROUND

AIR SERVICE BACKGROUND The Air Service Background section provides a community overview including the airport catchment area and economic and demogrpahic imformation. Information on exsisting and historical air service is also covered.
GRAND JUNCTION REGIONAL AIRPORT CATCHMENT AREA To understand airport use, it is important to understand the relative size of the catchment area, current air service, and enplanement activity. Grand Junction Regional Airport’s use was determined using year ended March 31, 2010, MIDT data for the zip codes from the primary catchment area. An airport catchment area, or service area, is a geographic area surrounding an airport where it can reasonably expect to draw passenger traffic and is representative of the local market. The primary catchment area contains the population of travelers who should use Grand Junction Regional Airport considering the drive time from the catchment area to competing airports. This population of travelers is Grand Junction Regional Airport’s focus market for air service improvements and represents the majority of travelers using the local airport. The secondary catchment area represents the broader area that Grand Junction Regional Airport draws from; however, these areas have alternate commercial service airports that are a closer drive distance. The focus of this report is the primary catchment area. The map identifies the Grand Junction Regional Airport primary and secondary catchment areas. The primary catchment area is comprised of 38 zip codes with an estimated population of almost 220,000. The secondary catchment area has 49 zip codes with an estimated population of 185,381.

Copyright © and (P) 1988–2009 Microsoft Corporation and/or its suppliers. All rights reserved. http:// www.microsoft.com/mappoint/ Certain mapping and direction data © 2009 NAVTEQ. A ll rights reserved. The Data for areas of Canada in cludes information taken with permission from Canad ian authorities, including: © Her Majesty the Queen in Right of Canada, © Queen's Printer for Ontario. NAVTEQ and NAVTEQ ON BOARD are trademarks of NAVTEQ. © 2009 Tele Atlas North America, Inc. Al l rights reserved. Tele Atlas and Tele Atlas North America are trademarks of Tele Atlas, Inc. © 2009 b y Applied Geographic Systems. All rights reserved. GJT Catchment Area

0 mi 50 100 150|Grand Junction Regional Airport

8 

# AIR SERVICE BACKGROUND

COMMUNITY ECONOMIC AND DEMOGRAPHICS As our national economy slowly begins to rebound, the Grand Junction Metropolitan Statistical Area (MSA) continues to see some signs of recovery. The Business Conditions Index for Colorado has current rating of 56.8 (neutral point of this scale is 50). This is the highest level since the second quarter of 2006. Expectations for sales, industry profits, hiring and capital expenses all recorded aggressive gains (Source: LEEDS Business Confidence Index®(LBCI). Colorado’s State Quarterly Personal Income increased slightly in the fourth quarter of 2010 to $218,203. (Source: US Department of Commerce.) The Colorado Office of State Planning and Budgeting has forecasted the per person Per-Capita Income for 2011 to be $43,272. This is slightly above the 2010 level of $42,651. Jobs and Wages (Sources: Colorado Department of Labor, US Department of Labor, Mesa County WFC.) The unemployment rate in Grand Junction remains high: 11.2% in March 2010. This is higher than both Colorado’s unemployment rate of 9.2% and the nation’s at 8.8%. As of March 2011, the total MSA labor force is reported at 77,627 a 2.5% decrease from March 2010. The average annual wage in Mesa County for the third quarter of 2010 is $40,646. The Mesa County Workforce Center recorded 400 open positions in the first quarter of 2011, a 38% increase from the first quarter of 2010. The ratio of applicants to every job order was 43:1 as of March, 2011. In the first quarter of 2010 the ratio was 65:1. Tax Revenues The City of Grand Junction collected $3,363,516 in Sales & Use Tax Revenue in March 2011. This represents an 11.2% increase from March 2010. Sales & Use Tax revenues comprise more than 40% of the City of Grand Junction’s total revenues. The combined tax rate is 7.65%. This includes rates from the State of Colorado, Mesa County, and the City of Grand Junction. In the first quarter of 2011, the Grand Junction VCB collected $174,902 in lodging tax. This represents a 2.9% decrease from the first quarter of 2010. Real Estate (Source: City of Grand Junction, Mesa County and zillow.com) 24 New Construction Permits have been issued in the first quarter of 2011. This represents a 40% decrease from the first quarter of 2010. The City of Grand Junction estimates that $11,266,087 has been spent on construction activities in the9|Grand Junction Regional Airport first quarter of 2011 – a 63.7% decline from the first quarter of 2010. The median home sale price has decreased again to $174,700. This represents a decrease from the first quarter of 2010.

PROXIMITY TO A COMPETING AIRPORT Grand Junction Regional Airport is approximately 265 miles west of Denver and 290 miles east of Salt Lake City. Although these airports have service to hundreds of destination and thousands of flights per week, the distance and complications associated with driving over high mountain passes makes driving to/from these airports impractical at best. Several non-hub airports such as Monstrose and Eagle/Vail are located within 100 miles of Grand Junction; however, their limited service that is geared toward ski traffic offers little to no benefit to the residents of the Grand Valley. 

# AIR SERVICE BACKGROUND|Grand Junction Regional Airport

10 

# AIR SERVICE BACKGROUND

FACTORS AFFECTING AIR SERVICE Air service at the Grand Junction Regional Airport is primarily affected by three factors: geogrpahic location, modest market size, and aircraft size/economica. The modest marekt size is insufficent to support additional point-to-point service to the Denver, Phoenix, and Salkt Lake City hubs. Westbound trvelers use exsisting Salt Lake City service, 215 miles to the west/northwest and Phoeinx service, 440 miles to the southwest. Both hubs provide connecting service to the wes coast, but circuity limits the competitiveness of service to Southern California and the Pacific Northwest. The Denver hub, 210 miles to the east, is the gateway to the eastern two-thirds of the country. The nearest alternative is Dallas/Fort Worth, 770 miles tot he south/southeast and Houston, 980 miles south/southeast.

PAST AIR SERVICE DEVELOPMENT EFFORTS Over the past several years Grand Junction Regional Airport has engaged in an aggressive air service development program that has included air service research and retainment.. The Airport has been successful at aquiring and maintianing additional service that includes: 2006 Allegiant Air Begins Twice Weekly Service to Las Vegas, NV

• Marketing Program Implmentended Successfully

• Service Reaimins Successful Today with High Load Factors 2008 American Eagle Begins Twice Daily Service to Dallas/Fort Worth, TX

• Marketing Program Implmentended Successfully

• Service Reaimins Successful Today with High Load Factors 2009 Allegiant Air Begins Twice Weekly (SEasonal) Service to Los Angeles, CA

• Marketing Program Implmentended Successfully

• Service Reaimins Successful Today with High Load Factors 2011 Continental Begins Twice Daily Service to Houston, TX

• Marketing Program Implmentended Successfully

• Service Reaimins Successful Today with High Load Factors

CURRENT AIR SERVICE Grand Junction Regional Airport is served by six marketing carriers: Allegient, American Eagle, Continental, Delta Airlines, United Airlines, US Airways. Non-stop commercial service is provided to seven cities: Dallas/Fort Worth, Denver, Houston, Las Vegas, Los Angeles (seasonal), Phoenix, and Salt Lake City.11|Grand Junction Regional Airport 

# AIR SERVICE BACKGROUND

Weekly Departures and Seats By Airline and Destination

Destination Marketing Carrier Flights Per Week Seat Per Week Seats Per Day Dallas/Fort Worth (DFW) American Airlines 21 1,050 150 Denver (DEN) United Airlines 48 2,400 350 Sun-Fri / 300 Sat Houston (IAH) Continental Airlines 14 700 100 Las Vegas (LAS) Allegiant Air 2 300 *Allegiant services Grand Junction with four (4) flights, twice (2) weekly. Two flights weekly to LAS and two flights to LAX. Los Angeles (LAX) Allegiant Air 2 300
Phoenix (PHX) US Airways 20 760 108 Salt Lake City (SLC) Sky West/Delta 20 1,000 142 Total 127 6510 850* Sun-Fri / 800* Sat *Does not include Allegiant Air Note: Week of February 12, 2011.|Grand Junction Regional Airport

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# AIR SERVICE BACKGROUND

GJT Leakage - Top 10 Markets by Passenger 2010

Rank Code Destination Reported pax Retention Diversion True Market DEN MTJ ASE SLC EGE HDN

1 LAS Las Vegas, NV 37,577 95.1% 1,948 39,525 1,593 0 284 35 35 0 2 DEN Denver, CO 32,014 95.7% 1,426 33,440 0 389 907 0 0 0 3 LAX Los Angeles, CA 26,481 89.2% 3,219 29,700 2,288 124 621 186 0 0 4 DFW Dallas, TX (DFW) 22,409 88.3% 2,966 25,374 494 1,153 494 824 0 0 5 PHX Phoenix, AZ 18,861 78.3% 5,229 24,090 4,640 236 236 118 0 0 6 IAH Houston, TX (IAH) 12,803 77.3% 3,766 16,569 2,259 452 603 0 452 0 7 SEA Seattle, WA 9,523 70.0% 4,080 13,603 2,336 134 1,006 604 0 0 8 ATL Atlanta, GA 6,397 49.2% 6,610 13,006 4,478 320 107 0 213 1,493 9 SFO San Francisco, CA 7,888 67.2% 3,843 11,730 2,933 152 455 0 303 0 10 MSP Minneapolis, MN 7,826 78.2% 2,183 10,009 1,461 120 361 0 120 0

4187 12845 13908 25202 30760

0 0 24441 34472 30760

27303 25072 25443 24245 28888

42431 42645 36909

38202 38651

70640 75035 79841 79061 90355

0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010 United (DEN) 70640 75035 79841 79061 90355 Delta (SLC) 42431 42645 36909 38202 38651 US Airways (PHX) 27303 25072 25443 24245 28888 American (DFW) 0 0 24441 34472 30760 Allegiant (LAS/LAX) 4187 12845 13908 25202 30760 

### 2006-2010 Enplanement Data By Airline13|Grand Junction Regional Airport Rank Code Destination Reported pax Retention Diversion True Market DEN MTJ ASE SLC EGE HDN

1 LAS Las Vegas, NV 37,577 95.1% 1,948 39,525 1,593 0 284 35 35 0 2 DEN Denver, CO 32,014 95.7% 1,426 33,440 0 389 907 0 0 0 3 LAX Los Angeles, CA 26,481 89.2% 3,219 29,700 2,288 124 621 186 0 0 4 DFW Dallas, TX (DFW) 22,409 88.3% 2,966 25,374 494 1,153 494 824 0 0 5 PHX Phoenix, AZ 18,861 78.3% 5,229 24,090 4,640 236 236 118 0 0 6 IAH Houston, TX (IAH) 12,803 77.3% 3,766 16,569 2,259 452 603 0 452 0 7 SEA Seattle, WA 9,523 70.0% 4,080 13,603 2,336 134 1,006 604 0 0 8 ATL Atlanta, GA 6,397 49.2% 6,610 13,006 4,478 320 107 0 213 1,493 9 SFO San Francisco, CA 7,888 67.2% 3,843 11,730 2,933 152 455 0 303 0 10 MSP Minneapolis, MN 7,826 78.2% 2,183 10,009 1,461 120 361 0 120 0

$100 $120 $140 $160 $180 $200 $220 $240

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2005 2006 2007 2008 2009 2010 

## Average fares by quarter

DEN GJT 

### GJT Average Fares by Quarter 

# AIR SERVICE BACKGROUND|Grand Junction Regional Airport

14 

### 2010 GJT Origin & Destination Traffic By Airline and Destination

Passenger Rank Destination PDEW Average Fare Passenger Revenue 1 LAX Los Angeles CA 48.0 69 2,432,237 2 LAS Las Vegas NV 44.4 65 2,108,918 3 PHX Phoenix AZ 29.7 146 3,167,506 4 DEN Denver CO 25.0 149 2,709,857 5 DFW Dallas/Fort Worth TX 20.0 204 2,984,265 6 IAH Houston-Intercontinental TX 18.4 222 2,977,128 7 ORD Chicago-O'Hare IL 13.9 165 1,680,772 8 SEA Seattle/Tacoma WA 11.6 183 1,548,370 9 SFO San Francisco CA 10.5 156 1,202,234 10 ATL Atlanta GA 10.1 160 1,183,660 11 SAN San Diego CA 9.8 162 1,163,463 12 PDX Portland OR 9.3 184 1,251,481 13 MSP Minneapolis/St. Paul MN 8.8 168 1,076,471 14 MCO Orlando FL 8.1 183 1,079,081 15 SMF Sacramento CA 7.9 178 1,028,958 16 SLC Salt Lake City UT 7.7 175 987,144 17 BOS Boston MA 7.2 199 1,046,107 18 LGA New York-La Guardia NY 6.9 221 1,109,868 19 IAD Washington-Dulles VA 6.5 186 879,443 20 PIT Pittsburgh PA 6.4 238 1,106,344 21 SNA Orange County CA 6.2 147 665,301 22 MCI Kansas City MO 6.1 158 707,133 23 SAT San Antonio TX 6.0 155 684,422 24 AUS Austin TX 5.5 157 633,563 25 PHL Philadelphia PA 5.5 208 832,688 Total All Markets 581.8 188 79,988,861 

# AIR SERVICE BACKGROUND15|Grand Junction Regional Airport Passenger Rank Destination PDEW Average Fare Passenger Revenue 1 LAX Los Angeles CA 48.0 69 2,432,237 2 LAS Las Vegas NV 44.4 65 2,108,918 3 PHX Phoenix AZ 29.7 146 3,167,506 4 DEN Denver CO 25.0 149 2,709,857 5 DFW Dallas/Fort Worth TX 20.0 204 2,984,265 6 IAH Houston-Intercontinental TX 18.4 222 2,977,128 7 ORD Chicago-O'Hare IL 13.9 165 1,680,772 8 SEA Seattle/Tacoma WA 11.6 183 1,548,370 9 SFO San Francisco CA 10.5 156 1,202,234 10 ATL Atlanta GA 10.1 160 1,183,660 11 SAN San Diego CA 9.8 162 1,163,463 12 PDX Portland OR 9.3 184 1,251,481 13 MSP Minneapolis/St. Paul MN 8.8 168 1,076,471 14 MCO Orlando FL 8.1 183 1,079,081 15 SMF Sacramento CA 7.9 178 1,028,958 16 SLC Salt Lake City UT 7.7 175 987,144 17 BOS Boston MA 7.2 199 1,046,107 18 LGA New York-La Guardia NY 6.9 221 1,109,868 19 IAD Washington-Dulles VA 6.5 186 879,443 20 PIT Pittsburgh PA 6.4 238 1,106,344 21 SNA Orange County CA 6.2 147 665,301 22 MCI Kansas City MO 6.1 158 707,133 23 SAT San Antonio TX 6.0 155 684,422 24 AUS Austin TX 5.5 157 633,563 25 PHL Philadelphia PA 5.5 208 832,688 Total All Markets 581.8 188 79,988,861 

# AIR SERVICE ISSUES

AIR SERVICE ISSUES Grand Junction is the poster child for an under served/overpriced market. Currently, the demand situation west bound and northeast bound is such that limited service can be purchased at very high fares. Though discount fares are published, only a small number of discount seats are offered since the tight service situation requires minimal numbers of discount fare passengers to achieve high load factors. Additional service is needed to an additional hub to the northeast or west to better align eastbound and westbound traffic demand. Additional service will address the under served situation while creating an environment whereby fares either eastbound or westbound will moderate to lower more reasonable and competitive fare levels. The additional service resulting in more competitive fares will create a situation conducive to more passengers electing to use Grand Junction Regional Airport’s air service rather than driving to Denver or Salt Lake City.



### 2010 GJT Performance Report By Airline and Destination

Airline Dest AVG/Departure LF % Local Average Fare Yield RASM Pax Seats Local Segment System UA DEN 34 49 70 10 149 72 192 33.9 23.6 DL SLC 38 51 75 7 180 69 192 31.9 24.1 US PHX 29 40 72 33 146 108 190 24.7 17.8 AA DFW 42 50 85 18 202 130 222 16.9 14.3 G4 LAS 132 150 88 98 45 46 46 10.9 9.5 G4 LAX 135 150 90 99 44 44 44 6.7 6.0 TOTAL 39 52 75 25 148 81 178 22.4 17.4|Grand Junction Regional Airport

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# ACTION PLAN

ACTION PLAN The Action Plan proposed by the Grand Junction Regional Airport’s public-private partnership will achieve the goals described in this application by increasing airline service and lowering ticket prices to markets located either northeast or west of Grand Junction. This Action Plan section provides a detailed description of the project goals and a plan for attaining those goals. In addition to the Action Plan, this section identifies self-sufficiency of the service as an integral part of the community’s goals and provides a descriptions of how the community plans to continue with the project if it is not self-sustaining after the grant award expires. A detailed description of the funding necessary for implementation for the Action Plan, including federal and non-federal contributions, is included.

PUBLIC-PRIVATE PARTNERSHIP The Grand Junction Regional Airport Authority is the owner/sponsor of the Grand Junction Regional Airport. The organizations and companies listed below have formed a public-private partnership. Collectively, this partnership is committed to completing the outline Action Plan. Public-Private Partnership Members: Grand Junction Regional Airport Authority (Public) Grand Junction Visitor and Convention Bureau (Public) West Star Aviation (Private)
The Grand Junction Regional Airport Authority will execute all federal grant offers, process all associated reimbursement requests, and oversee grant administration. The Grand Junction Visitor and Convention Bureau will contribute non-airport in-kind marketing and promotional services to support the additional air service. West Star Aviation will contribute non-airport cash to the project. This small, but effective partnership has collaborated numerous times in the past to develop and promote travel. The strength of this partnership is that is builds on the foundation of relationship that span many years and numerous past projects.
PROJECT GOALS The Project Goals are to: 1. Improve air service to all sectors of the population served by the Grand Junction Regional Airport that travel to or from the northeast or west United States. 2. Mitigate the need to drive long distances to access air service and competitive fares to destinations in these regions. 3. Improve regional access to the national air transportation system.17|Grand Junction Regional Airport 

# ACTION PLAN

The Action Plan outlined herein will support a burgeoning energy industry, local business, universities, and government employees. Improved access to the national air transportation system and, specifically, improved access to either the northeast or the west United States, is vital to businesses and importantly to the development of the energy resources in Western Colorado.

PROPOSED AIR SERVICE As detailed in the Air Service Issues section, Grand Junction’s core problem is that airline service is dramatically lower that local demand, and high ticket prices are an associated result. To accomplish the goals of this application, the plan is to add airline service to a connecting hub located either northeast or west of Grand Junction.

AIR SERVICE SUPPORT PLAN The shortage of airline seats and the high airfares is not a new problem in Grand Junction. Grand Junction has been an under served and overpriced market for most of its history, and not surprisingly, local air travelers have developed a habit of driving to Denver or Salt Lake City for air service. An indicator of the magnitude of the problem is that the drive to both Denver and Salt Lake City require the traveler to drive over mountain passes and the trip can be especially dangerous in the winter. For the airlines that adds service in Grand Junction, the number one barrier to entry id the existingtravel habits; people driving to access better air service and fares. The carrier is at risk during the startup period, and the rate of absorption of the added service by the market will depend on breaking those habits and making the current market aware of the new service, as well as expanding the catchment are and making that area aware of the new service. Business flyers are less price sensitive, more accepting of smaller aircraft, and fly locally for convenient. Accordingly, efforts to change existing travel habits must target the areas business flyer’s. Likewise, efforts to increase the catchment area are best made to the out lying business communities. Without community involvement and support, considering the hurdles discussed above, the carrier that adds service in the Grand Junction market will have a protracted ramp-up period that translates to adds risk. However, the carrier will not spend the dollars or effort to address the basic barriers to entry. Grand Junction’s public-private partnership has conceived a creative, integrated Air Service Support Plan. Its focus is two-fold; engage Grand Junction’s business community in reducing the ramp-up period for the improved service and alter the air travel habits in the market. The three elements of this plan, include: 1. Mileage Award Bonus Program 2. Business Flyer Marketing 3. General Public Marketing|Grand Junction Regional Airport

18 

# ACTION PLAN

MILEAGE AWARD BONUS PROGRAM The Airport will purchase an undetermined number of award miles/frequent flyer miles from the airline that adds additional service/service (no less than 50-seats per day) to a hub northeast or west of Grand Junction. The public-private partnership would work together to award these frequent flyer miles to travelers. To be eligible for the award, each person will: 1. Need to provide proof of purchase of travel on the target airlines within he first four months of improved service. 2. Be a member (existing or new) of the target airline’s mileage reward program.
Use of the Mileage Reward Program has the following strategic benefit:

• Promotes use of the service improvements during the start-up period

• Provides an incentive to break the habit of driving to Denver or Slat Lake City for air service

• Provides a mechanism to reach the high-value business flyer

• Vests travelers in the airlines mileage award program

• Provides a marketing hook

• Provides the airlines with up-front cash that is not a subsidy

GENERAL PUBLIC MARKETING Successfully countering the propensity of Grand Junction’s travelers to drive to Denver or Salt Lake City to catch flights requires a well coordinated and aggressive marketing plan. It has to break existing travel habits. Also, enlarging the Airport’s catchment area is not small feat. This will require extensive research and outreach to outlying communities. This plan proposes to use paid advertising and promotion linked with Mileage Award Bonus Program to inform Grand Junction and surrounding areas of air service improvements. The Mileage Award Bonus Program will add an element of excitement to the marketing message that will stimulate interested and the community involvement. Nothing creates more interest like giveaway programs, and airlines miles are a tried and true marketing tool that is used by a wide array of vendors to promote sales. Managed by the public-private partnership, the $175,000.00 marketing budget will fund a six month, multi-media program. Promotion will begin 60-days prior to the service improvement date and continue for six months. A significant portion of the budget will be expended during the first 120-days of the campaign; however, the total advertising promotion is planned for six months. The marketing message will be developed jointly by the partnership and the carrier and will focus on the features and benefits of the new service. The use of this message along with the promotion of the Mileage Bonus Award Program will effectively reach the general public and specifically, the business traveler.19|Grand Junction Regional Airport 

# ACTION PLAN

BUSINESS FLYER MARKETING The public-private partnership will work to promote the air service improvements extensively to the business communities within the current Airport catchment area as well as the business communities that are just outside the catchment area. The partnership will work with area Chambers to participate in events, newsletters, e-mails, and mail-outs to promote the air service improvements and the Mileage Award Bonus Program. Working with the Chambers assures that the message and program targets the high-value airline customer, the business traveler. Administration and financial oversight of the Air Service Support Plan will be the responsibility of the Grand Junction Regional Airport Authority. The public-private partnership members will oversee the planning and execution of the marketing program. In-kind services for the public-private partnership are estimated to be at $15,000.00 total.
PROJECT CONTINUATION AND SUSTAINABILITY If at the end of the first six months of service the airlines has not achieved a minimum of 60 percent average load factor, the Grand Junction Regional Airport Authority will extend the air service improvement marketing campaign for an additional three months. The Grand Junction Regional Airport Authority will commit $30,000.00 for this purpose. Grand Junction’s business community and the Grand Junction Regional Airport Authority understand the difficulties associated with profitability operating air service to the Grand Junction market and the importance of making new service ventures successful. In the event adjustments are needed, this groups is committed to doing whatever it takes.

ALTERNATE PLAN If the Grand Junction Regional Airport Authority fails to secure airline service to either a westbound or northeast bound destination, an alternate plan will be pursued to achieve the community’s goals. Some other options would be to:

• Secure additional service to an already existing hub servicing Grand Junction.

• Other services options that may surface during the research period.|Grand Junction Regional Airport

20 FUNDING Grand Junction Regional Airport is seeking $150,000.00 in United States Department of Transportation funding top be used for an air service improvement program to mitigate a portion of the participating airlines risk associated with improving air service. The community intends to participate in the funding of the program by contributing a portion of the air service marketing budget, in-kind marketing and promotional services, and program administration. The Grand Junction Regional Airport is familiar with the grant application guidelines and understands that grant funds are provided on a reimbursement basis. The table below provide the Action Plan budget broken down by element and sources of funding.

DESCRIPTION FUNDING SOURCE TOTAL US DOT AIRPORT NON-AIRPORT

CASH CASH IN-KIND CASH IN-KIND Airline Incentive Program: Mileage Award Program $80,000 $5,000 $5,000 $90,000 General Public Marketing $70,000 $5,000 $10,000 $85,000 Program Administration $5,000 $5,000 TOTAL $150,000 $10,000 $5,000 $5,000 $10,000 $180,000 Percent of Total Project 83.3% 5.6% 2.8% 2.8% 5.6% 100.0%



# ACTION PLAN21|Grand Junction Regional Airport DESCRIPTION FUNDING SOURCE TOTAL US DOT AIRPORT NON-AIRPORT

CASH CASH IN-KIND CASH IN-KIND Airline Incentive Program: Mileage Award Program $80,000 $5,000 $5,000 $90,000 General Public Marketing $70,000 $5,000 $10,000 $85,000 Program Administration $5,000 $5,000 TOTAL $150,000 $10,000 $5,000 $5,000 $10,000 $180,000 Percent of Total Project 83.3% 5.6% 2.8% 2.8% 5.6% 100.0% 

# SCHEDULE & MONITORING

Considering the ever changing nature of the airlines industry, it is difficult to precisely identify when the goals of the Action Plan will be realized. Accordingly, the public-private partnership has developed a realistic schedule to achieve the goals of this proposal. Admittedly, there is extra time built into the schedule, but the intent is to aggressively execute the Action Plan. This section identifies critical milestones to be achieves by the public-private partnership. A monitoring program is also provided to track the performance of the service improvements and progress of the project.

MILESTONES The following milestones are proposed to track the progress of this air service initiative: Service Start-Up By July 2012, the public-private partnership will negotiate with a carrier for planned service. The schedule is to reach an agreement and begin service with a carrier prior to July 2012.
General Public Marketing Implement 60-days prior to service star date: Completion of the marketing plan associated with all the elements of the marketing program will be completed at least 90 days prior to the start of service. The plan will use the Mileage Award Bonus Program as a means to stimulate interest in the service. This timing of the marketing effort will, to a large degree, depend on how much lead time the airlines gives the community on the service announcement.
Business Flyer Marketing Implement 60 days prior to the start of service: The public-private partnership will coordinate with business organizations (Chambers of Commerce, Corporate Organizations and Clubs, etc...) to plan and execute a coordinated promotion program to their respective members. The Mileage Award Bonus Program will be a key element of this program.
Mileage Award Bonus Program Service start date plus 120 days (or sooner): Award miles will be distributed to the travelers who fly on the airline that provides the new service within the first 120 days of service. Distribution of award miles will be on a first-come-first-serve basis, and the program will end when all bonus miles have been distributed.|Grand Junction Regional Airport

22 

# SCHEDULE & MONITORING

MONITORING PROGRAM The performance of the air service initiatives, project budget, and effectiveness of the marketing campaign will be tracked. Timely tracking of some performance indicators will require the cooperation of the partner airline. The following service performance indicators will be tracked by the Grand Junction Regional Airport Authority:

• Monthly - Aircraft departures, cancellations, seats/service, passenger per flight, load factors by flight.

• Monthly for the first six months of service - Monitor published fares by category (walk-up, business, leisure) for the top 20 eastbound destinations.

• Quarterly for the first year of service - Monitor average airfares for the top 20 west bound and eastbound destinations and compare with the previous two years on a quarter by quarter basis.

• After the first 12 months of service, the Airport will complete a passenger diversion study to measure the diversion of travelers to Denver and Salt Lake City.

• At the end of the first year of service, compare origin and destination passengers for the top 20 westbound and eastbound destinations with the previous two years.23|Grand Junction Regional Airport