Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# PROPOSAL UNDER THE SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM (SCASD P )

Community Proposal of City of Flagstaff : Flagstaff Pulliam Airport Flagstaff, Arizon aProposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# T a b l e o f C o n t e n t s

Proposal
Existing Air Service 3

Historical Air Service 4

Development Efforts 7

Flagstaff Air Service Needs/Deficiencies 8

Strategic Plan 1 3

Grant Project Implementation 1 8

Community Partners 19

Funding Description 2 0

Monitoring Plan 2 1

Continuation Plan 2 3

Designation of Legal Sponsor 2 4

Letters of Support 2 5Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# E x i s t i n g A i r S e r v i c e

The City of Flagstaff ’s Pulliam Airport is a non

- hub Primary Commercial Service Airport (FAA Class 1), with an A

- index A RFF service. Flagstaff Pulliam Airport is a Category 3 security facility with a full TSA staff. It has an Instrument Landing Approach on Runway 21 and a Contract Control Tower working in conjunction with Albuquerque Center for air traffic control needs. The runway was extended in 2007 to 8,800 feet to handle larger aircraft.
Flagstaff Pulliam Airport has a single air carrier , U.S. Airways, which provides nonstop service to Phoenix Sky Harbor International Airport. This service provides the Flagstaff
ma rket with four to seven daily flights averaging 5,166 monthly enplanements and 182 monthly departures. Currently, U.S. Airways has two primary aircraft , the de Havilland

- dash 8 turbo prop aircraft and the CRJ 200 . U.S. Airways corporate office has determ ined that, given the short flight distance between Flagstaff Pulliam Airport and Phoenix Sky Harbor Interna tional Airport, the Dash 8 is the most appropriate aircraft to meet their economic need s ; however, it does not meet the City’s present demand

.
Per t he October 2007 Phase One Air Service Study , conducted by Wilbur Smith and Associates, t he overall Flagstaff average fare is $58 higher than Phoenix, with 13 of the top 25 catchment area markets having average fare differences of $50 or more which equates to over $100 on a round trip basis. It is expected that Flagstaff fares will be higher due to the cost of the added flying involved, but a fare spread of $30 to $35 would appear more reasonable.

T he goal of this project is to utilize the SCASD P funds to attract a new carrier through a revenue guarantee and provide air service from Flagstaff to the West Coast and /or Eastern markets. Flagstaff Pulliam Airport and its partners believe that the presence of one airline and one direct destination is in sufficie nt to meet the needs of the traveling public, including business travelers , educational institutions , residents, visitors , an d other Northern Arizona agencies whose access to the national air transportation system is limited

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# H i s t o r i c a l S e r v i c e

In Jun e 2008, Horizon Air began direct service to Los Angeles (LAX) from Flagstaff (FLG)

. They discontinued that service in August, 2010. During this period, Flagstaff Pulliam Airport saw an increase from 44,029 enplanements (the previous 12 months) to 62,891 enplanements (over the first 12 months), then to 6 8 , 175 enplanements (over the second 12 months). Flagstaff Pulliam Airport has had continual growth every year since 2002, when enplanement totals were approximately 24,000 and are now anticipated to be 65,0 00 (which is an increase of 41,000 over nine years). These increases support the public demand for additional service and destinations. In June of 2009, after a successful first year in Flagstaff, the lease agreement with Horizon Air was extended and a pproved by the Flagstaff City Council for an additional two year period ; however, due to a company reorganization, Horizon discontinued service in August 2010. Horizon’s decision to leave Flagstaff was due to a corporate reorganization forcing them to
r educe their fleet and drop several routes. Even with the departure of Horizon Airways , U.S. Airways, currently the sole carrier to Flagstaff , experienced a 22% increase in enplanements in 2010. 1, 2 Per the agreement, Horizon Air, a subsidiary of Alaskan Airlines of Seattle, Washington, was required to provide at least four commercial air transportation service flights per day between Flagstaff Pulliam Airport (FLG) and Los Angeles International Airport (LAX), including two inbound and two outbound flight s. Both daily inbound flights and both daily outbound flights provided non

- stop air service between Flagstaff and Los Angeles. Air transportation was provided for a minimum of five days per week on a 76 seat Bombardier Q400 aircraft. In addition, at lea st one of the daily inbound flights and one of the daily outbound flights provide d
one - stop service via Prescott, Arizona , and Los Angeles. Sky Harbor International Airport, which is the closest alternative commercial service airport to Flagstaff, is 21⁄2 hours and 151 driving miles from downtown Flagstaff. The drive to Phoenix and subsequent longer wait times can amount to an additional four hours to the beginning of a trip and includes the cost of long term parking . Even with this inconvenience, many loc al business and resident travelers make the drive to Phoenix for the opportunity of reaching other providers and additional destinations that could be served from Flagstaff with an additional airline. As such, this has created a significant need for addi tional air service options in Flagstaff.

1

City of Flagstaff Enplanements, 2009

- 2011
2

City of Flagstaff Airport Passenger Load Factors, June 2010

– June 2011Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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### FLG AIRPORT PASSENGER LOAD FACTORS June 2011 HORIZON AIR (FLG

- LAX)

Date Load Factor O utbound Passenger Enplanements Total Number of

Flights Load Factor Inbound Passenger Deplanements

Aug ‘09 52.2 2221 56 57.9 2464 Sep ‘09 49.4 2064 55 47.5 1987 Oct ‘09 50.4 2144 56 46.9 1997 Nov ‘09 43.9 1769 53 42.3 1703 Dec ‘09 44.7 1357 40 41.6 126 4 Jan ‘10 34.7 580 22 43.7 731 Feb ‘10 34.4 627 24 41.2 752 Mar ‘10 43.9 935 28 61.9 1317 Apr ‘10 55.3 1218 29 63.7 1404 May ‘10 46.8 1102 31 57.6 1358 Jun ‘10 51.7 1178 30 63.7 1452 Jul ‘10 45.5 1002 29 65.0 1434 Aug ‘10 55.0 878 21 66.6 1063 12

- Month

Total 46.8% 19,399 531 53.8% 21,399

NOTE: Horizon chart only reflects activity through August 2010 since they ended service on August 22. These numbers are Flagstaff enplanements only and do not include those passengers that enplaned in Pre scott. US AIRWAYS EXPRESS (FLG

- PHX)

Date Load Factor Outbound Passenger Enplanements Total Number of

Flights Load Factor Inbound Passenger Deplanements
Jun ‘10 86.6 5706 143+35 RJ 85.7 5641 Jul ‘10 83.2 5358 155+19 RJ 79.5 5117 Aug ‘10 82.0 5669 179 +8 RJ 83.1 5750 Sep ‘10 85.0 5547 166+11RJ 84.4 5527 Oct ‘10 80.7 6218 188+20 RJ 79.0 6027 Nov ‘10 67.5 4945 181+17 RJ 67.0 4895 Dec ‘10 59.0 4187 183+9 RJ 54.0 3824 Jan ‘11 54.4 3479 157+16 RJ 58.5 3743 Feb ‘11 65.0 3558 133+15 RJ 65.5 3588 Mar ‘11 71.1 4497 145+26 RJ 72.0 4556 Apr ‘11 81.1 5099 161+9 RJ 79.9 5024 May ‘11 83.0 6224 178+24RJ 84.0 6298 Jun ‘11 84.3 5705 180+3RJ 86.9 5887 12

- Month

Total 74.7% 60,486 2183 74.5% 60,236Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# D e v e l o p m e n t E f f

o r t s

Given current economic conditions, it is critical to provide the community with all of the tools to not only sustain business, but also to grow the economic vitality of the Flagstaff region. Flagstaff is the regional hub for Northern Arizona and has a population of over 345,000 within Coconi no County and Yavapai County. ( Source: 20 10 U.S. Census website ) In 2007, the City of Flagstaff completed the Flagstaff Pulliam Airport Master Plan. The Master Plan estimated that in recent years the total economic impact of aviation activity at Flagstaf f Pulliam Airport to be more than $100 million annually. The Plan also identified the need for additional air service provided th at the City of Flagstaff secured a FAA grant to develop a runway extension of 1,800 feet. This project increased the runway t o 8,800 feet which enabled Flagstaff to accommodate larger regional aircraft in the market. This runway extension and other planned projects at the Airport p rovide s an excellent facility for airlines to operate safely and efficiently. Once the runway ext ension project was completed, t he City then contracted with Wilbur Smith and Associates to provide the Phase One Air Service Study , an air service a nalysis for Flagstaff and the Northern Arizona region. Following this analysis, the City secured a second a irline for Flagstaff Pulliam Airport, resulting in a lease agreement with Horizon Air. During the time Horizon Air provided additional air service in Flagstaff, U.S. Airways passenger counts also increased, which not only added to the economic impact but also confirmed that the community wanted, needed and valued additional air service at Flagstaff Pulliam Airport. There is an inextricable link between a community’s economic condition and its ability to market and incentivize efforts to secure an air serv ice provider

. In the past six months, City of Flagstaff officials have met with two prospective air service providers, American Eagle Airlines and SkyWest Airlines and had several conversations with other airlines , in an effort to bring a second airline to Flagstaff Pulliam Airport. City of Flagstaff officials believe that providing a revenue guarantee for a second airline to begin service at Flagstaff Pulliam Airport through the Small Community Air Service Development Program would greatly increase the chances for success in securing a second airline. The inability of Flagstaff officials to retain an additional air service provider in Flagstaff without the assistance of the SCASD P grant reflects the general aversion of most airlines to provide secondary service in smaller communities, a reality that has become an even greater challenge during the recent economic downturn. In the not too distant past, smaller and mid

- size communities have been able to offer airlines significant funding to mitigate the fi nancial risk associated with locating in smaller communities. However, given the current economic climate, it has become essential for communities to leverage those funds with grant opportunities, such as those offered by the Small Community Air Service D evelopment Program.Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# F l a g s t a f f A i r S e r v i c e N e e d s / D e f i c i e n c i e s

As stated previously, t here is a significant need for additional air service options in Flagstaff. The presence of one airline and one direct destination is not sufficient to meet the travel needs of the business travelers , residents, and visitors to the area. The City of Flagstaff currently provides service to air travelers via one air service provider, U.S. Airways. Currently, U.S. Airways only provides flights directly to Sky Harbor Inter national Airport in Phoenix, Arizona , where travelers can then pick

- up connecting flights to their final destination. Local citizenry continue to contact Flagstaff Pulliam Airport and the Flagstaff City Manager’s office requesting additional air service options. The Flagstaff City Council has made it their highest priorit y to bring additional air service to Flagstaff in order to meet the se demand s

. Flagstaff travelers have identified Los Angeles, San Francisco, Las Vegas, Denver, Salt Lake City, and D allas as the most requested destinations. As such, it is essential for Flagstaff Pulliam Airport to secure a second airline in order to meet the travel demands identified by the citizens of Flagstaff and the Northern Arizona region

. As will be outlined i n this proposal, the public has expressed the need for travel to both the West Coast and Eastern markets, making Los Angeles the preferred West Coast destination and utilizing either Denver or Dallas as a connection to the Midwest and Eastern markets, whic h will allow for increased domestic and international travel destinations. An analysis of historic and current air service levels in Flagstaff and the Northern Arizona region indicates that the market is currently underserved and, historically, has proven that it can more than adequately support an additional air service provider. The Phase One Air Service Study provides information on the Top 25 Domestic Destinations for Flagstaff travelers, which supports the assertion that a second airline can be a suc cessful air service provider for Flagstaff and the Northern Arizona region. 1 Approximately 15% of the catchment are a travelers originated travel at Flagstaff Pulliam Airport, 83% originated out of Phoenix Sky Harbor International Airport, and approximate ly 2% used other airports. 2 The table on the following page s illustrates the top ten destinations for catchment area passengers utilizing Flagstaff and Phoenix airports. Of the travelers that diverted to Phoenix, nine of the top ten destinations were i n the top 25 destinations. To capture a greater portion of the 83% of travelers that divert to Phoenix, a second air service provider that provides additional destinations is a necessity. 2, 3 Additionally, a second air service provider increases compe tition , thereby resulting in lower airfares . This was proven during the time that Horizon Air provided direct service from Flagstaff Pulliam Airport to Los Angeles International Airport. Should the City of Flagstaff secure a second air service provider, the capture of any portion of the 83%Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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.

1

Flagstaff Pulliam Airport Top Markets

– Phase One Air Service Study
2 Top Ten Destinations by Originating Airport

– Phase One Air Service Study
3 Flagstaff Pulliam Airport Catchment Area MapProposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# F l a g s t a f f P u l l i a m A i r p o r t T o p M a r k e t sProposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# F l a g s t a f f P u l l i a m A i r p o r t T o p T e n D e s t i n a t i o n s b y O r i g i n a t i n g A i r p o r t

NOTE: The above chart reflects the diver sion of passengers driving to Phoenix versus flying out of Flagstaff in order to reach alternative carriers and flights to access the national air transportation system.Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# F l a g s t a f f P u l l i a m A i r p o r t C a t c h m e n t A r e a M a pProposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# S t r a t e g i c P l a n

This proposal is supp orted by the City of Flagstaff, which will be responsible for the following:

**•** Develop the procurement process using the City ’s procurement procedures which will reflect applicable Federal, State and local laws and regulations to negotiate an agreement with second air service provider subsequent to grant award.

**•** Liaison with the Department of Transportation in regard to second air service provider performance during grant period.

**•** Administration of total program funding, including contact with Department of T ransportation.

**•** Preparation of financial and quarterly reports, as determined necessary by the Department of Transportation.

Increased air service to a hub airport(s) is a necessity for the City to enhance its economic vi tality . As previously indicated, m ajor employers throughout the region support additional air routes that provide greater access to the Midwest and Eastern markets as members of Flagstaff’s scientific, medical, educational and other industries frequently travel to these destinations on bus iness. Additionally, direct routes to L os Angeles allow for greater international visitation to Flagstaff, which comprises 17% of our traveler base currently , and also California residents which comprise 14% of our visitor market

. A second carrier will g enerate a significant, positive economic impact for local businesses and will provide more air service options for Flagstaff business travelers, residents, and visitors alike. The ever changing transportation needs of communities and the dynamic and often volatile nature of the airline industry , presents an on - going challenge for small markets across the United States. Th e link between a community’s economic condition and air service demand is of utmost importance in m aintaining and improving air service in smaller communities

. Due to its unique location, Flagstaff Pulliam Airport strives to meet the ever growing needs of its business and tourism related travelers.Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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### B u s i n e s s

Given current economic conditions , it is critical to provide the business commu nity with all of the tools to not only sustain business, but also grow the economic vitality of our region. Flagstaff is the regional hub for Northern Arizona and serves a population of over 345,000 just within Coconino and Yavapai Counties. Economic dev elopment professionals have indicated that the absence of flights to certain key business markets has become a major issue in attempting to attract new businesses to Flagstaff , as well as retaining existing ones

. Flagstaff is home to several major priva te employers including W. L. Gore & Associates, Nestle

- Purina Pet Care, Walgreens Distribution, Southwest Win dpower, TGen North, SCA Tissue, Flagstaff Medical Center, and Northern Arizona University, which has over 17,500 students , and includes internation al students from over 76 countries. All of these businesses have employees that travel extensively or, at the very least, host inbound travelers. Examples of Local Business Air Service Needs

Science and Bio

- Science Organizations

- The following natural science and bio

science institutions regularly travel to numerous Midwest and East Coast destinations to attend conferences, workshops, and seminars and to meet with their counterparts in other parts of the nation to further their ongoing research and educ ational opportunities. These organizations include, but are not limited to:

**•** Translational Genomics Research Institute (TGen) North is an organization focused on innovative advances arising from the Human Genome and applying them to the development of dia gnostics, prognostics and therapies for cancer, neurological disorders, diabetes and other complex diseases. The objective of TGen's Education and Outreach Division is to increase the scientific community’s working knowledge of genomics, and to educate, tr ain, and inspire the next generation of researchers and physicians. The Pathogen Genomics Division is led by Dr. Paul Keim, the world's foremost expert in anthrax and other dangerous infectious diseases.

**•** Northern Arizona Center for Entrepreneurship and T echnology (NACET) a business incubator that fosters business growth and economic vitality, creating high

- quality jobs for the region.

**•** Innovation Mesa is a science and technology park currently under development that is located in central Flagstaff on top of McMillan Mesa that will include an expansion of the USGS facilities , and will be the preferred location for the graduates of NACET ’s entrepreneurial companies.

**•** United States Geological Survey (USGS) , a world leader in the natural sciences through scie ntific excellence that serves the Nation by providing reliableProposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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- geology, geography, geology and water resource information to describe and understand the Earth.

**•** W.L. Gore, a privately

- held company headquartered in Newark, Delaware, who for more than 50 years, has built a worldwide reputation for providing innovative solutions throughout industry, in next

- generation electronics, for medical products, and with high

- performance fabrics. Gore has approximately 2,000 employees in Flagstaff and over 9,000 e mployees located in 30 countries worldwide, with manufacturing facilities in the United States, Germany, Scotland, Japan, and China, and sales offices around the world. Flagstaff is the headquarters for their medical products division.

Nestle

- Purina empl oyees and its affiliates currently drive to/from Phoenix to acquire service from airlines, such as United and American Eagle Airlines , due to
non - competitive prices with the City’s single carrier. Northern Arizona University (NAU) requires air service for researchers and faculty attending conferences and seminars, and has expressed even greater additional air service needs for staff visiting other Midwest and East Coast university partners. Coconino Community College (CCC) has four campuses in Northe rn Arizona and sends 90% of its faculty and staff to various East Coast destinations. Aviation activities at Flagstaff Pulliam Airport create “spin

- off” benefits that include jobs and consumer spending, which support non

- aviation businesses in cities and towns throughout Northern Arizona, including Sedona, Flagstaff, Camp Verde, Williams, and Winslow. According to the 2007 Airport Master Plan , total airport activity in Flagstaff supports more than 1,400 local jobs.Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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### T o u r i s m Flagstaff serves as a hub for Northern Arizona. Situated 80 miles from the Grand Canyon, Flagstaff is a draw for domestic and international tourists who travel to destinations in Northern Arizona such as Native American lands, historic Route 66 sites, numerous state and national parks, and Sedona. There are many natural wonders and outdoor recreational opportunities, as well as museums and art galleries that provide additional travel amenities. Flagstaff is also a target for regional and national conferences with the ad dition of the High Country Conference Center on the campus of Northern Arizona University.

With four million visitors to Flagstaff each ye a r, tourism provides a total economic impact of over $501 million annually , employing more than 5,400 individuals in the area. Many of our visitors travel from the West and Eastern regions of the United States to visit our many wonders. Additional direct air service will positively impact Flagstaff’s ability to effectively reach these growing markets and expand our c apacity to generate traveler interest from new regions. The following Flagstaff Visitor Profile , provided by the Flagstaff Convention and Visitors Bureau, provides information on visitor demographics, including, but not limited to, Demographics, Annual Ec onomic Impact, Visitor Origin, Trip Purpose, and Party type

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# G r a n t P r o j e c t I m p l e m e n t a t i o n

Upon receipt of the grant, the City of Flagstaff’s timetable is aligned with a start up in spring for peak season summer traffic. The following steps will be im plemented once grant funds are secured for a second air service provider:

Year One (October 2011

– September 2012) Year Two (October 2012

– September 2013) Quarter 1 (October

- December)

**•** Accept Grant Award

**•** Submit Progress & Financial Report

**•** Update City Co uncil & Airport Commission Quarter 1 (October

- December)

**•** Work with successful candidate on installation of physical assets

**•** Launch Marketing Campaign

**•** Submit Progress & Financial Report

**•** Update City Council & Airport Commission Quarter 2 (January

- March)

**•** Be gin procurement process

**•** Submit Progress & Financial Report

**•** Update City Council & Airport Commission Quarter 2 (January

- March)

**•** Begin new Air Carrier Service

**•** Submit Progress & Financial Report

**•** Update to City Council & Airport Commission Quarter 3 (April

- June)

**•** Select service provider

**•** Submit Progress & Financial Report

**•** Update City Council & Airport Commission Quarter 3 (April

- June)

**•** Submit Final Progress & Financial Report

**•** Final update to City Council & Airport Commission Quarter 4 (July

- September)

**•** Negotiate Lease Agreement/Contract

**•** Develop Marketing Campaign

**•** Submit Progress & Financial Report

**•** Update City Council & Airport Commission Quarter 4 (July

- September)

**•** Grant Closeout

**•** MonitoringProposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# C o m m u n i t y P a r t

n e r s

The City of Flagstaff, and its community partners thro ughout the Northern Arizona region, including the Sedona Chamber of Commerce , the City of Winslow , City of Williams and the Verde Valley, believes that the addition of a second airline at Flagstaff Pulliam Airport will positively impact Flagstaff’s growing business and tourism economies. The grant funds requested in this proposal will be utilized as a revenue guarantee to secure a second air service provider from Flagstaff to the West Coast and /or Eastern markets. Each community partner will retain the res ponsibility to promote and market to their business es and visitors for air service into and out of Flagstaff Pulliam Airport. This proposal contains steps to be taken by the City of Flagstaff’s community partners in order to meet these responsibilities

. T he Flagstaff community, with its Northern Arizona partners, has a proven track record of effectively utilizing funds to obtain results, as evidenced by securing a second airline in the not

- so - distant past. Partners of the City of Flagstaff will meet wit h tour operators and travel planners to bring about awareness of new potential markets made available by the establishment of a new air service provider. In addition, the City of Flagstaff and its business partners will work with the various business comm unities to encourage the use of this new service.Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# F u n d i n g D e s c r i p t i o n

The City of Flagstaff is see k ing a Federal funding allocation of $ 800,000 in Small Community Air Service Development Program funds as a revenue guarantee in order to secure a second ai rline at Flagstaff Pulliam Airport to increase direct routes via West Coast and/or Eastern markets . In addition, the following funding resources will be utilized:

**•** Upon City Council approval, the City of Flagstaff is willing to provide a 10% cash contribu tion ( $ 80 , 000 ) towards ongoing marketing efforts/marketing campaigns for the new route(s), to be implemented by the Flagstaff Convention and Visitors Bureau.

**•** Additional marketing and promoti onal efforts will also be undertaken by the City of Flagstaff com munity partners, including but not limited to the City of Winslow, City of Williams, Sedona Chamber of Commerce, Flag staff Chamber of Commerce , and Flagstaff 40.

**•** C ity of Flagstaff will fund all related costs for Airport Administration employee s, including the Economic Vitality Director, Airport Director, Airport Administrative Support, Airport Service Workers , Grants Administration and Finance

. In the past, smaller and mid

- size communities, such as the City of Flagstaff, have been able to offer airlines fu nds to mitigate the financial risk associated with locating to a new community. Similarly in 2007, utilizing City G eneral F unds, we were able to provide $45 8 ,000 as a revenue guarantee to Horizon Air for air service to Los Angeles, California

. Given curr ent economic conditions, and with ongoing budget deficits, no funds were available in the Fiscal Year 2012 budget for this purpose. However, the City of Flagstaff continues to be dedicated to securing a second air service provider utilizing a Small Commun ity Air Service Development Program grant as a revenue guarantee.Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# M o n i t o r i n g P l a n

The City of Flagstaff will be responsible for implementation of the grant funds. The City of Flagstaff has the ability to manage this grant and oversee the work. We have a Grants Management Team (GMT) which is composed of the Grants Manager, Financial Officer/Accountant, and the Project Representative. This team approach has assured the C ity’s success in grant compliance from award to closeout. The GMT ensures all t erms and conditions of the grant agreement are followed, provides the necessary financial and performance reports, monitors grant and contract performance, and that all evaluation, audit and closeout procedures are met.
Furthermore, we have extensive hist ory in managing F ederal and S tate funds

. The City has a full time Grants Manager position which involves researching, monitoring, and applying for available municipal related grants, monitoring, implementing, evaluating, and assuring the compliance of te rms and conditions, and in general, is the central coordinator for all grants, which may involve internal auditing and holding others accountable for proper grant compliance. The Accountants assigned to the grants have a high level of technical expertise in governmental budgeting and accounting. In addition, the Project Representatives have extensive knowledge in the targeted areas in which they are seeking funds and administering the funded programs. In addition, the Flagstaff Pulliam Airport Director, as Project Director for the funds, will be responsible for all quarterly reporting notifications to the Primary Contact/Grants Administrator

. Based on the proposed timeline :

**•** Grant presented to City Council for approval/acceptance of grant funds
o Stacey B rechler

- Knaggs, Grant s Manager
o Barney Helmick, Airport Director

**•** Develop the procurement process using the City procurement procedures which will reflect applicable Federal, State and local laws and regulations.
o Rick Compau, Purchasing Director
o Barney Hel mick, Airport Director

**•** Selection Panel for submitted Proposals
o Jerene Watson, Deputy City Manager
o Stacey Button, Economic Vitality Director
o Stacey Brechler

- Knaggs, Grant s Manager
o Barney Helmick, Airport Director
o Rick Compau, Purchasing Director

**•** Negotiatio n of Lease Agreement/Contract
o Rosemary Rosales, City Attorney
o Stacey Button, Economic Vitality DirectorProposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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o Rick Compau, Purchasing Director
o Jill Trompeter, Real Estate Manager

**•** Marketing campaign development
o Stacey Button, Eco nomic Vitality Director
o Heather Ainardi, Convention & Visitor Bureau Director
o Successful Candidate

**•** Installation of physical assets
o Barney Helmick, Airport Director

**•** Launch Date
o City Manager
o Elected Officials
o Community Partners

**•** Ongoing monitoring of air serv ice provider
o City Council

- Quarterly
o Airport Commission

- Monthly
o Community Partner s Input/Feedback

- Ongoing
o Customer Input/Feedback

– Ongoing
o Service providerProposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# C o n t i n u a t i o n P l a n

By meeting quarterly with the City Council, monthly with the Airport Comm ission, and ensuring that the City of Flagstaff continues to seek and receive input from both our community partners and the community at large, there will be ongoing monitoring of the success of the air service provider. Utilizing the five ongoing monit oring provision s, the C ity of F lagstaff will implement these various methods to ensure ongoing communication with the provider and to seek and receive feedback for the success of the airline.
In addition, m arketing endeavors for the service provider will be coordinated and conducted by the Flagstaff C onvention and V isitors B ureau throughout the life of the service provider. The City of Flagstaff will work in partnership with the airlines and our community partners to promote travel. This will require fee dback from the air service provider on the various community endeavors to ensure that sales are proceeding at an acceptable rate. Should a community partner fail to meet expectations, the City of Flagstaff will work with that partner to assist in strength ening their promotional endeavors.Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# D e s i g n a t i o n o f L e g a l S p o n s o r

Legal Sponsor: City of Flagstaff 211 West Aspen Avenue Flagstaff, Arizona 86001 928/774

- 5281 Project Director : Primary Contact/Grants Administrator : Barney Helmick Stacey Brechler

- Knaggs Airport Director Grants Manager 6200 South Pulliam Drive 211 West Aspen Flagstaff, AZ 86001 Flagstaff, AZ 86001 928/556

- 1234 928/213

- 2227 bhelmick@flagstaffaz.gov sknaggs@flagstaffaz.govProposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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# L e t t e r s o f S u p p o r t

Aloha L ey Office of Aviation Analysis 1200 New Jersey Avenue, SE, W86

- 310 Washington, D.C. 20590 The following pages contain L etters of S upport for a second airline in Flagstaff from our community partners:

**•** Flagstaff Forty

**•** Flagstaff Chamber of Commerce

**•** Sedona Chamber of Commerce

**•** City of Flagstaff Airport Commission

**•** Flagstaff Convention and Visitors Bureau

**•** City of WinslowProposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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- 0119 Page 26 of 30 April 11, 2011 Stacey Button Economic Vitality Director City of Flagstaff 211 W. Aspen Flagstaff, AZ 86001 Dear Stacey, Flagstaff Forty supports the City of Flagstaff in your efforts to secure a second airline to Pulliam airport. Increased air service has been a priority for the City to increase the economic via bility and respond to the demand of our community and region. Your presentation to our membership on March 23, 2011, indicated a very high interest level from the CEO’s and managers of Flagstaff’s largest companies. I was glad the members were so vocal a nd supportive of your intentions of securing a second airline. It was also quite clear that the large employers in Flagstaff support air routes that have better access to the Midwest and Eastern metropolitan areas. Flagstaff’s scientific, medical, educat ional, and many other industries frequently travel east on business. The southern California and Las Vegas markets are geographically close and should not be discounted. But the priority is to seek a carrier that has options to broaden the opportunities t o the remainder of the Country. Let me know if I can assist you any further. Sincerely,
J.R. Murray

Chairman, Flagstaff FortyProposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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- 0119 Page 27 of 3 1Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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- 0119 Page 28 of 3 1 May 26, 2011 To Whom It May Concern:

Thank you for considering new air service to and from Flagstaff, Arizona . Flagstaff is located approximately 30 miles north of Sedona and serves as a primary gateway for visitors to Sedona and to the Grand Canyon. In Sedona, tourism is the primary economic generator serving more than 4 million visitors who infuse almost $200 million into our local economy each year. Tourism generates nearly 10,000 jobs and touches just about all aspects of life in the entire Verde Valley. The Sedona Chamber of Commerce acts as the destination marketing arm for the City of Sedona and targets v isitors from all over the country and the world. We work with meeting planners, wholesale and receptive tour operators, travel agents, concierge, and the general public. Many of our visitors live in the Midwest or on the East Coast. In fact, those geograp hic areas have been part of our overall marketing approach for many years. In 2010, our top five domestic markets were: California, Arizona, Texas, Illinois and New York respectively. According to our walk

- in statistics at our Uptown Visitor Center, which serves 300,000 visitors per year, the states of California, Arizona, Texas, Illinois and New York made up 43% of our total walk

- in visitors for 2010, which was a 23% increase over 2009. More direct air service to those markets would greatly impact our to urism promotional efforts. Accessibility is a key component for travel decision makers. Air service into Flagstaff would have a positive direct impact on our efforts to attract those visitors to our beautiful state and to our region. You can count of us su pporting the service and promoting it not only to our 1000 Chamber of Commerce members, but also through our destination marketing efforts and visitor services. Thank you again for considering service into Flagstaff. Please feel free to contact me if ther e is any other information that I may provide. Sincerely,

Jennifer Wesselhoff President/CEO Sedona Chamber of CommerceProposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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- 0119 Page 29 of 3 1Proposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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- 0119 Page 30 of 3 1 May 26 , 2011

Visitors from across the United States and around the world are attracted to Flagstaff for its clean mou ntain air and the West’s most beautiful country . F rom the depths of Grand Canyon National Park to the heights of the San Francisco Peaks, F lagstaff is a gateway to all the treasures of northern Arizona

. With four million visitors a year, tourism provides a total economic impact of over $501 million annually, employing more than 5,400 individuals in the area. Many of our visitors travel from the Midwest or Northeast regions of the United States to visit our many great wonders. In fact, over the past thre e years fulfillment requests from potential travelers residing in these areas regularly rank in the top five states contacting the Flagstaff Visitor Center for travel information. Over 44.1 percent of all toll

- free calls received at the Flagstaff Visitor C enter originate from the Midwest and Northeastern states, with 6.5 percent of those from Illinois. Over the past two years the CVB has worked with many tour operators, meeting planners and associations from these states, generating 76 business leads wit h the potential to bring almost 22,000 room nights to the city. Additional direct air service will positively impact Flagstaff’s ability to effectively reach these growing markets and expand our capacity to generate traveler interest from these regions. Additionally, international travelers comprise 17 percent of Flagstaff’s traveler base. We would be able to utilize different air routes to reach our proven international markets, which include the United Kingdom, Canada, Germany, France, and Japan.

Th ank you for considering expanding your air service to Flagstaff. Sincerely,

Heather Ainardi, Director Flagstaff Convention & Visitors BureauProposal under the Small Community Air Service Development Program Flagstaff Pulliam Airport

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- 0119 Page 31 of 3 1