







## PROPOSAL UNDER THE SMALL COMMUNITY

AIR SERVICE DEVELOPMENT PROGRAM

Docket Number OST

- 2011

- 0119



Submitted to the



## UNITED STATES DEPARTMENT OF TRANSPORTATION

Docket Operations and Media Management Division



Submitted by



## ABILENE REGIONAL AIRPORT

City of Abilene, Texas

DUNS Number 081078891



### EIN 75

- 6000440

Congressional District

– TX19





## August 2 , 2011

### 1 

## TABLE OF CONTENTS

ABILENE REGIONAL AIRPORT



## 1. Summary Information: Appendix B . . . . . . . . . . . . . . 2



## 2. Summary of Proposal . . . . . . . . . . . . . . . . . . . . . . . . . 4



## 3. Abilene Regional Airport Overview

. . . . . . . . . . . . . . . 5

3.1 Abilene, Taylor County & Catchment Area Overview

3. 2 Historic Service from Abilene, 1994

– 20 11

3. 3 Current Nonstop Service from Abilene

3. 4 O & D Comparison of Abilene’s Top Markets

3. 5 Challenges to Abilene’s Service Enhancement



## 4

. Air Service Development Two

- Year Strategic Plan

. . . 1 0



## 5

. Air Service Development Action Plan . . . .

. . . . . . . 1 1



## 6

. Proposed Funding Request . . . . . . . . . . . . . . . . .

. . 1 2



## 7

. Evaluation Criteria . . . . . . . . . . . . . . . . . . . . . . .

. . . 1 3



## 8

. Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4

### 2 

# 1

. SUMMARY INFORMATION: APPENDIX C

Abilene Regional Airport

City of Abilene, Texas

 

### DUNS Number: 081078891

A. Applicant Information

 Not a Consortium 

###  Interstate Consortium



###  Intrastate Consortium 

###  Community now receives EAS 

### subsidy

X Community(or Consortium member) previously received a Small

Community Grant

If Previous recipient: Date of grant: 2002 (Pilot Program) Expiration of grant: 2005

Date of grant: 2006 Expiration of grant : 2010

B. 

### Public/Private Partnershi ps

Public Private

1. City of Abilene Abilene Reporter

- News

2. Development Corporation of Abilene Brownwood, TX Marketing Alliance

3. Texas Midwest Community Network



### C. Project Information

 

### Project Proposal

 Marketing Upgrade aircraft 

###  New route

Personnel Increase frequency Low fare service

Travel Bank Service restoration Surface transportation

Subsidy 

###  Regional service Other (specify)

Revenue guarantee 

###  Launch new carrier



###  Start up cost offset First competitive service

Study 

###  Secure additional carrier

### 3 D. Existing landing aids at local airport

 Full ILS  Outer/Middle Marker  Published instrument approach

 Localizer  Other (specify): 24 hour TRACON

E . Project Cost: Do Not Enter Text In Shaded Area

Line Description Sub Total Total Amount

1 F ederal Amount Requested XXXXX $800,000

2 State cash financial contribution XXXXX

- 0

-

Local cash financial contribution XXXXX XXXXX

3a Airport cash funds

- 0

- XXXXX

3b Non

- airport cash funds $210,000 XXXXX

3 Total local cash funds (3a+3b) XXXXX $210,000

4 TOTAL CASH FUNDING

(1+2+3) XXXXX $1

, 0 10 ,000

In

- Kind Contribution XXXXX XXXXX

5a Airport In

- Kind contribution** $10,800 XXXXX

5b Other In

- Kind contribution ** $50,725 XXXXX

5 TOTAL IN

- KIND

CONTRIBUTION (5a+5b) XXXXX $61,525

6 TOTAL PROJECT COST (4+ 5 ) XXXXX $1,071,525

### 4 F. IN

- KIND CONTRIBUTIONS**

For funds in lines 5a (Airport In

- Kind contribution) and 5b (Other In

- Kind contribution),

please describe the source(s) of funds(s) for each.

 5a: The Airport will make an in

- kind contribution of approximately $10,800 by

waiving all airport use fees for two (2) years.

 5b: Up to $45,000 in dollar for dollar advertising purchase match by Abilene

Reporter

- News; $5,725 in regional advertising by the Brownwood, TX Marketing

Alliance.



# 2. SUMMARY OF PROPOSAL

Air serv ice to Abilene and its 16

- county West Cen tral Texas catchment area was adversely

affected by changes in the airline in dustry over the past few years

. ABI lost Continental

Airlines service to Houston Inter

- Continental on October 1, 2008 leaving ABI with Am erican

Eagle service to only D/FW. Enplanements have decreased 18.8% since YE 2006 as

passengers were affected by the national recession and looked to other airports within

driving distance for more competitive fares and greater choice in destinations. O f the

passengers in ABI catchment area, ABI is retaining about 56%

.

Based on Abilene Regional Airport ’s 2011 True Market Estimate (Attachment) the region

served by ABI has a critical need for enhanced access to more competitive fares and

improved destinat ion choices.

### 5  This proposal seeks to improve air service to and from Abilene and the West Central

Texas region by requesting funds to assist with offsetting start

- up cost s for a new

carrier , including marketing assistance to support the new service for two years.



###  The City of Abilene requests a grant for $ 800,000 under the terms of the Small

Community Air Service Development Program to enhance access to the national air

transportati on system for the residents, businesses , universities, and healthcare

s ystems of the Airport’s 16

- county catchment area.

 Based on the past efforts of Abilene Regional Airport and its stakeholders throughout

the We st Central Texas region, along with a local cash contribution of $ 210,000

, in

support of its proposal from the Development Corporation of Abilene and Texas

Midwest Communities Network; and In

- Kind contribution estimated at $ 55

, 8 00 in

annual airport fee waivers over the two

- year grant period, Abilene has a high

likelihood of succ ess in attracting and establishing a new air carrier

.

 Abilene will accept partial award of its application.



# 3. ABILENE REGIONAL AIRPORT OVERVIEW

 Abilene Regional Airport is a FAA

- designated Non

- Hub Airport that enplaned 77,267

passengers in 20 10 . The Airport serves the West Central Texas region of Texas, an

area that spans 16 counties and is home to approximately 250,000 residents with in a

60

- mile radius that have strong economic and cultural ties to Abilene.

### 6  Abilene is a vital transporta tion link for the West Central Texas region. By promoting

Abilene ’s carrier

- American Eagle Airlines

– and the ease of beginning and ending

air travel at ABI , the Airport has been able to successfully stimulate demand and

attract 56% of West Central Te xas ’ passengers in spite of today’s difficult operating

environment.

 However, 44 % of Abilene passengers are still lost to other Texas airports. This is the

result of the average fare from Abilene that is 48 % higher than the average fare from

Midland, T exas to our Top 20 destinations . It is also the res ult of inadequate service

to the different regions of the U.S.



## 3.1 Abilene, Taylor County & Catchment Area Overview

 Abilene (Taylor County) 20 10 Population 1 31,506

 Abilene projected population growth rate 6 %

(20 11

- 202 0) (*2010 Woods& Poole Economics, Inc.)

 Abilene per capita personal income level. $ 38,000

 Unemployment rate ( May 20 11 ) 6.6 %

 Total catchment area population (est.) 298,000

 Average mileage to A irport from the perimeter of 6 0

the catchment area

### 7 

## 3. 2 Historic Service From Abilene, 1994

- 20 11

 In 1994, Abilene’s service level peaked at 27 daily departures, with nonstop service to

Dallas, Houston, and Austin provided by four airlines

– Delta/ASA, American Eagle

Airlines, Dallas Express, and Conquest Airlines.

 Abilene has been challenged with service elimination in the last decade. In 1996,

Delta Connection carrier ASA discontinued service. Continental Express re

- initiated

service in 200 3 , but discontinued it in Octo ber 2008 . This contributed to a n 18.8 %

decline in enplanements from 2006 to 2010

.

 American Eagle Airlines, a commuter carrier for parent American Airlines, has

served Abilene continuously since the late 1970s. However , its enplanements

decreased sharply after September 11, 2001. Abilene’s service level was maintained

due to a city

- incentivized heavy maintenance base operated by Eagle Aviation

Services, Inc., a subsidiary of AMR Corp.

 Until September 1, 2003, when C ontinental Connection resumed service, Abilene was

served by American Eagle Airlines only, providing six daily nonstops to DFW

Airport. Since October 1, 2008, ABI is, once again, served only by American Eagle.

 In spite of Abilene’s high fares and singl e

- carrier service , Abilene businesses support

the Airport and airlines. A previous study showed a lmost 30% of Abilene passengers

pay full Y or Premium Coach fares vs. the national average of 10%.

### 8 

## 3.3 Current Nonstop Service From Abilene, August 2011

 Abilene’s current service consists of s even ( 7 ) nonstop flights to American

Airlines’/ American Eagle Airlines ’ hub at Dallas/Ft. Worth International Airport:

 American Eagle has experienced steadily incr easing load factors due to a rebounding

local eco nomy and replacing some 50

- seat RJs with 37

- seat RJs.



## 3. 4 O&D Fare Comparison of Abilene’s Top Markets

 A comparison of current fares, obtained from the airlines’ web

- based reservations

sites, demonstrates that Abilene fares are generally higher than those from Midland

and DFW Airports for ABI’s Top 20 True Market Destination C ities.



###  Round trip fares we re obtained from the airlines’ web

- based reservations sites; 14

-

day advance purchase; departure on 7 /1 9 / 11 , with return on 7 /2 2 / 11 ; one

- stop service;

taxes and fees included.

### 9 Date: American Airlines

Tuesday 1st Tuesday on Next Month 7/19/11

- 7/22/11

July 5, 2011 AA.com

From: ABI ABI ABI MAF MAF MAF DFW DFW DFW

Destination Out In Total Out In Total Out In Total

Orlando, FL MCO $

192 $

255 $

447 $

162 $

212 $

374 $123 $210 $

333

Dallas Ft Worth, TX

DFW $

60 $

60 $

120 $

39 $

49 $

88 $

- $

- $

-

Seattle, WA SEA $

229 $

377 $

606 $

208 $

208 $

416 $144 $

169 $

313

Las Vegas, NV LAS $

188 $

188 $

376 $

188 $

232 $

420 $119 119 $

238

Atlanta, GA ATL $

169 $

269 $

438 $

148 $

241 $

389 $109 $226 $

335

Ontario, CA ONT $

229 $

234 $

463 $

205 $

205 $

410 $174 $174 $

348

San Diego, CA SAN $

214 $

269 $

483 $

223 $

268 $

491 $154 $229 $

383

El Paso, TX ELP $

208 $

208 $

416 $

187 $

196 $

383 $148 $147 $

295

New York, NY LGA $

313 $

313 $

626 $

257 $

302 $

559 $252 $252 $

504

Burbank, CA BUR $

229 $

234 $

463 $

213 $

230 $

443 $174 $174 $

348

Los Angeles, CA LAX $

229 $

234 $

463 $

205 $

205 $

410 $174 $174 $

348

Kansas City, MO MCI $

165 $

195 $

360 $

144 $

166 $

310 $105 $144 $

249

Chicago, IL ORD $

194 $

194 $

388 $

173 $

183 $

356 $134 $134 $

268

Philadelphia, PA PHL $

198 $

219 $

417 $

178 $

208 $

386 $139 $159 $

298

Denver, CO DEN $

149 $

246 $

395 $

154 $

162 $

316 $89 $206 $

295

Washington DC DCA $

204 $

234 $

438 $

183 $

223 $

406 $144 $174 $

318

Minneapolis, MN MSP $

229 $

229 $

458 $

225 $

252 $

477 $186 $186 $

372

Nashville, TN BNA $

236 $

236 $

472 $

235 $

245 $

480 $196 $196 $

392

St.Louis, MO STL $

169 $

169 $

338 $

148 $

158 $

306 $109 $109 $

218

Boston, MA BOS $

298 $

334 $

632 $

274 $

274 $

548 $238 $253 $

491

Average Fare $

205 $

235 $

440 $

187 $

211 $

398 $

146 $

172 $

317

Comments: Starting reports on 1st Tuesday of the month with 14 day advance

purchase.

### 10 

## 3.5 Challenges To Abilene Service Enhancement

 Abilene’s high average fare and proximity to four Texas airports served by low

- fare

carriers

– primarily Southwest Airlines, but also AirTran, and Frontier Airlines

- has

resulted in passenger leakage of 44 %.



###  Dallas

– DFW Airport 173 miles



###  Midland/Odessa

– Midland International Airport 176 miles



###  Dallas

– Love Field, home of Southwest Airlines 183 miles



###  Lubbock

– Lubbock International Airport 176 miles

 Stimulating new passe nger demand for Abilene, and capturing those leaked passengers

who drive to neighboring airports to take advantage of low er fares and variety of one

stop destinations , will be our strategic plan’s largest challenge s

.



# 4. AIR SERVICE DEVELOPMENT TWO

- YEAR STRATEGIC

PLA N

 Abilene will build on its Air Service Development Plan designed to enhance the

Airport’s ability to continue securing long

- term self

- sustaining improvements in its

air service. This will be accomplished by continued communication and outreach to

the population of our 16

- county rural catchment area

, whom we feel prefer a small,

friendly rural airport by:

 Increasing our knowledge of area air service customers’ needs and

expectations

 Increasing the Airport’s presence in Abilene and the region

 Updating the market’s air service data

### 11  Conducting route planning forecasts for potential carriers

 Promoting enhanced air carrier destinations

 Offering financial assistance and marketing assistance to the carrier that

provides enhanced servi ce , including waiving all airport use fees and

offsetting start

- up costs of up to $400,000 per year over the two

- year grant

period. Utilizing all available no

- cost to low

- cost outreach tactics to

promote the Airport and the airlines



## 4 .1 Regional Advertising Campaigns Supporting New Hub

Service

The Airport will place paid advertising on local TV and radio media, in rural newspapers

and on outdoor billboards throughout the 16

- county regi on to increase awareness of new

hub service . In addition to Ai rport advertising in several Abilene

- based newspapers, this

project will provide two years of a dvertising campaigns in all regional newspapers,

consisting of multiple insertions of small space ads and outdoor billboards (see ABI SCASDP

Marketing Plan)

.



# 5

. AIR SERVICE DEVELOPMENT ACTION PLAN

 Regardless of the outcome of this proposal, the Airport will do all it can for the next

two years to ensure the success of its Air Se rvice Strategic Plan using all available

marketing tactics that work well in Abilen e and the region:

 Issue news releases and/or hold press conferences or Town Hall Meeting s in

each county seat

 Conduct sales blitzes in each county seat

### 12  Promote new services at local and regional trade shows

 Issue e

- mail announcements

 Continue to build the email address database

 Continue presentations to Abilene and regional service clubs

 Continue to provide group tours of the terminal and airfield

 Continue to coordinate group sales efforts with the Abilene Convention and

Visitors Bureau, the Abilene Chamber of Commerce, the Abilene Industrial

Foundation, and the Abilene Cultural Affairs Council

 Continue to work with Economic Development staff throughout West Central

Texas

 Encourage the airlines to provide promotional fares, which compe te with

service at alternate airports, including those served by Southwest Airlines,

that the Airport can communicate throughout the region by email and social

media.



# 6

. PROPOSED FUNDING REQUEST

 The City of Abilene requests a grant for $ 800,000 under the terms of the Small

Community Air Service Development Program to implement its two

- year Air Service

Strategic Development Plan.

 The Development Corporation of Abilene, which administers the city’s half

- cent sales

tax for economic development, has pledged $2 0 0,000 toward marketing the new

service

.

 Texas Midwest Communities Network has pledged $10,000 to market the new service

to the rural areas of our catchment area.

### 13  The Airport will make an in

- kind contribution of approximately $ 10,800 by wai ving

all airport use fees for two (2) years.

 Abilene Reporter

- News has committed to in

- kind advertising contribution of up to

$45,000

.

 The Brownwood, TX Marketing Alliance has committed to in

- kind advertising

contribution of up to $ 5,725

 Abilene’s contribution represents 2 5 % of the cost of this proposal.



# 7

. EVALUATION CRITERIA

 We’ll know we’re successful when:

 The Airport’s passenger catchment rate increases from 56 % to 65 % in

20 13

.

 Enhanced service to an additional U.S. hub in 2012

 Abilene’s average fare is less than 20 % higher than the a verage fares from

D/FW and Midland to our Top 20 Destinations Cities

.

 Monthly enplanements continue to increase year

- over

- year

 The tools we’ll use:

 Quanti tative Data from the airport’s air service c onsultant

 DOT Enplanement Data

 In

- house web

- based air fare tracking using 14

- day advanced booking

### 14  Who will do the work?

 The Airport Business Development Manager will be responsible for

implementation of the Plan

 An air service c onsultant will be retained to conduct air s ervice studies, as

needed



# 8

. ASSURANCES

 The City of Abilene is the public agency and local sponsor that will receive program

funding from the Department of Transportation and submit reimbursement requests.

 Prot ections have been established in compliance with the Single Audit Act to ensure

that money intended for this project cannot be diverted to other uses.