March 28

Don Gre e Director o A bilene R 2933 Air p Abilene, T Subject:

Dear Don

We have estimate p regardles s follows th determini n shows a m remains u which A B competin g diversion,

The over a number o internatio n remainin g area trav e passeng e Bergstro m Lubbock, Dallas (D F for ABI. A 98 perce n Vancouv e , 2011

e n, AAE o f Aviation R egional Airp o p ort Boulevar d T X 79602

True Market

, recently com p rojects the n s of which ai r is cover lette r n g the ABI c a m ap of the ai r u nchanged fr o I can reason a g airports for retention rat e

a ll true mark e f catchment a n al traffic. D o g 27,404 wer e e lers, 58 per c e rs primarily u m Internation a

and San An g

F W), Las Ve g A BI had the h n t. The top t h e r Canada. o r t d , Suite 200

Estimate

p leted the Ab n umber of ori g r port was use r (Attachmen t a tchment are a rservice catc o m the previ o a bly expect t o air service. A e s and aggr e

e t size is esti m a rea inbound o mestic pass e e internationa c ent of dome s u sed Dallas-F a l Airport, an d g elo).

g as, Orange C ighest retenti h ree internati o b ilene Region a g in and desti n d to initiate o t A) provides a true market h ment area f o o us study. Th o draw comm e A ttachment C e gate market s

m ated at 274, 0

and outboun d e ngers acco u l travelers (1 0 s tic travel and t. Worth Inte r d a minimal p e

C ounty, Pho e on of the top o nal markets o a l Airport (A B n ation air trav rcomplete ai a summary o estimate an d o r the airport, e map is our e rcial air ser v provides A B s izes.

0 38 origin an d d air passen g u nted for 246, 0 percent). A 38 percent o r national A irp o e rcentage us e

e nix (PHX), a n

five markets o ut of ABI w e B I) true mark e v elers in the a

r travel in a g o f the method o d the results o

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n d Seattle ar e in Dallas, to w e re Frankfurt, e t estimate. T a irport’s catch

iven year. T h o logy that w a o f the study. A f ocus for this e of the geog e rs with resp e e markets wit

passengers. c lusive of do m c ent) of the to t 5 6 percent of t a l travel. Ov e m aller percen t o rts (i.e. Dall a

e the top five w hich it has n San Jose C a T he true mar k

ment area h e overview t a s applied in A ttachment B analysis, whi c raphic area f r e ct to the pri m h their respe c

This is the t o m estic and t al travel whil t otal catchm e e rall, divertin g t age used Au a s (DAL),

domestic ma n onstop servi c a bo, and k et

t hat

B c h r om m ary c tive

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e the e nt g u stinrkets c e, atDon Gre e March 28 Page 2

I will give Sincerely , Mead & H

Joseph P Senior C o

A ttachme A ttachme A ttachme e n, AAE

, 2011

you a call to

, H unt, Inc.

ickering o nsultant

nt A True M nt B A irpor t nt C True M discuss the r e

M arket Estim a t Catchment A M arket Estim a e sults of this

a te – Method o A rea a te – Top 50 D updated true

o logy/Result s

estinations market esti m ate and nex t steps.Attachment A 

### Abilene Regional Airport True market estimate – methodology/results

Catchment Area The air service catchment area (Attachment B) repres ents the geographic region of the residents using commercial air service that should use ABI with regard to their drive time to the local airport relative to a competing airport. These travelers should be the primary focus of ABI for air service improvements and represents the majority of travelers using the local airport. ABI’S catchment area population is estimated at 298,000 and includes 80 postal codes. 

### True Market Estimate The purpose of this analysis is to evaluate the number of passengers destined to/from the defined ABI catchment area ( Table 1 ). The results of this analysis indicate that there are 274,038 origin and destination passengers in the catchment area per year (375 per day each way). Domestic travel made up 246,634 of total travel while international travel was 27,404 of the total or approximately 10 percent. Dallas-Ft. Worth International and Austin-Bergstrom International were the airports that primarily competed for ABI passengers. ABI obtained the highest share of domestic passengers while Dallas-Ft. Worth obtained the largest shar e of international traffic due to its wide variety of international destinations. 

### Airport Use by Community Airport use can be further defined by community to better understand how travelers from the ABI catchment area communities access commercial air service. Table 2 shows catchment area traveler retention by community accordingly. Because MIDT booking information is reported by travel agency or corporate location, the community for purposes of Table 2 is based on the location of the agency where the ticket was purchased. The assumption is then made that said pa ssengers live within that po stal code. ABI retained a larger share in the Abilene community than Brownwood. As expected, the further away from the airport the more likely a community is to use a competing airport. 

### Top 25 Domestic Destinations Table 3 provides the catchment area true market esti mate and retention rates for each of the top 25 domestic markets. ABI’s highest retention rates (60 pe rcent or greater and listed from highest retention to least) were in the following top 25 markets: Dallas (DFW), Houston (IAH), Nashville, Houston (HOU), Atlanta, Chicago (ORD), St. Louis, Washington, DC (DCA), New York, NY (LGA), Kansas City, Las TABLE 1 TRUE MARKET SUMMARY RANK ORIGIN A IRPORT PAX % Domestic 1 Abilene 143,779 58.3 2 Dallas-Ft. Worth 74,500 30.2 3 Austin-Bergstrom 20,022 8.1 4 Other* 8,333 3.4 Subtotal 246,634 100.0 International 1 Dallas-Ft. Worth 14,762 53.9 2 Abilene 10,425 38.0 3 Austin-Bergstrom 293 1.1 4 Other* 1,924 7.0 Subtotal 27,404 100.0 Domestic and International 1 Abilene 154,204 56.3 2 Dallas-Ft. Worth 89,262 32.6 3 Austin-Bergstrom 20,315 7.4 4 Other* 10,257 3.7 Total 274,038 100.0 *Other includes: DAL, LBB, SJT TABLE 2 A IRPORT USE BY COMMUNITY COMMUNITY % AIRPORT USE A BI DFW AUS OTHER Abilene 68 27 2 3 Brownwood 18 47 30 5 Total 56.3 32.6 7.4 3.7Attachment A

Vegas, and Minneapolis. The markets with the lowest retention rates (40 percent or smaller and listed least to most) were Orange County, Colorado Springs, Richmond, Boston, Raleigh, Sacramento, and Phoenix.

TABLE 3 TOP 25 DOMESTIC DESTINATIONS

RANK DESTINATION ORIGIN AIRPORT % TOTAL PAX ABI DFW A US OTHER 1 Dallas, TX (DFW) 98 0 0 2 11,276 2 Las Vegas, NV 62 22 11 5 8,756 3 Orange County, CA 16 58 26 0 7,439 4 Phoenix, AZ (PHX) 39 26 17 17 6,389 5 Seattle, WA 50 37 1 12 5,992 6 Orlando, FL 59 37 4 0 5,881 7 Atlanta, GA 74 19 6 0 5,665 8 Chicago, IL (ORD) 74 14 11 0 5,629 9 Los Angeles, CA 58 21 17 4 5,505 10 Denver, CO 57 26 13 4 5,453 11 Boston, MA 30 60 10 0 5,388 12 San Francisco, CA 42 42 16 0 4,479 13 Washington, DC (DCA) 68 32 0 0 4,445 14 Philadelphia, PA 57 36 7 0 4,281 15 Raleigh/Durham, NC 30 55 5 10 4,203 16 Houston, TX (IAH) 93 0 7 0 3,981 17 Richmond, VA 22 78 0 0 3,867 18 New York, NY (LGA) 66 34 0 0 3,843 19 Kansas City, MO 63 26 0 11 3,822 20 Sacramento, CA 36 36 29 0 3,711 21 St. Louis, MO 69 25 0 6 3,605 22 Houston, TX (HOU) 82 12 0 6 3,599 23 Minneapolis, MN 61 30 9 0 3,538 24 Colorado Springs, CO 21 79 0 0 3,466 25 Nashville, TN 93 2 2 2 3,424 Top 25 Domestic 57.8 30. 6 8.2 3.3 127,636 Total Domestic 56.3 32.6 7.4 3.7 274,038 

### International travel Table 4 provides the catchment area true market estima te for each of the top 10 international markets and the retention and diversion rates accordingly. Ov erall international travel was estimated at 27,404 annual passengers (38 passengers daily each way) with ABI retaining 54 percent. ABI retained a higher percentage of the top 10 mark ets (57 percent) on average than the overall.

TABLE 4 TOP 10 INTERNATIONAL DESTINATIONS RANK DESTINATION ORIGIN AIRPORT % TOTAL PAX DFW A BI A US OTHER 1 Frankfurt, Germany 51 40 1 7 1,422 2 San Jose Cabo, Mexico 48 29 0 24 1,374 3 Vancouver, Canada 67 33 0 0 1,250 4 Liberia, Costa Rica 79 7 0 14 1,166 5 Cancun, Mexico 57 43 0 0 1,138 6 London, UK (LHR) 31 65 4 0 1,074 7 Paris-De Gaulle, France 82 18 0 0 1,012 8 Calgary, Canada 51 40 1 7 889 9 Toronto, Canada 51 40 1 7 889 10 Mexico City, Mexico 51 40 1 7 622 Total International 53.9 38.0 1.1 7.0 27,404Attachment A



### Methodology The true market estimate combines Marketing Inform ation Data Tape (MIDT) booking information from the Global Distribution Systems (G DS), which is used by travel agencies, U.S. Department of Transportation origin and destination data and ABI’s enplanements and deplanements to provide a comprehensive overview of the air travel market. For the purposes of this study, MIDT information includes bookings made by travel agencies in the ABI catchment area (Attachment B). It does not capture bookings issued directly by airline Web site s (e.g., www.delta.com) or through airline reservation offices. Travel data from Internet travel agency si tes (e.g., www.expedia.com) was not used in this study because MIDT records are sorted by zip code. Intern et agency sites record all bookings as originating from the zip code in which the server resides. For example, all bookings for www.expedia.com are recorded with a Seattle zip code regardless of the air traveler’s location, since the server for Expedia is located in Seattle. Accordingly, retention inform ation cannot be derived from Internet agency site bookings. The data used include bookings for the zip codes in the catchment area, NOT all bookings. As a result, the MIDT data represent a sample to measure air traveler habits. A total of 2,156 bookings for calendar year 2010, were used in this analysis. Local distribution of travel was combined with diversion to create a comp rehensive true market estimate for ABI.Abilene Regional Airport Catchment AreaAttachment BAttachment C 

### Abilene Regional Airport True Market Estimate – Top 50 Destinations

RANK DESTINATION ABI PAX RETENTION % DFW DIVERSION A US DIVERSION OTHER DIVERSION TRUE MARKET PDEW 1 Dallas, TX ( DFW ) 11,046 98 0 0 230 11,276 15.4 2 Las Ve g as, NV 5,421 62 1,946 973 417 8,756 12.0 3 Oran g e Count y , CA 1,175 16 4,307 1,958 0 7,439 10.2 4 Phoenix, AZ ( PHX ) 2,500 39 1,667 1,111 1,111 6,389 8.8 5 Seattle, WA 2,996 50 2,228 77 691 5,992 8.2 6 Orlando, FL 3,481 59 2,160 240 0 5,881 8.1 7 Atlanta, GA 4,203 74 1,096 365 0 5,665 7.8 8 Chica g o, IL ( ORD ) 4,181 74 804 643 0 5,629 7.7 9 Los An g eles, CA 3,211 58 1,147 918 229 5,505 7.5 10 Denver, CO 3,082 57 1,422 711 237 5,453 7.5 11 Boston, MA 1,616 30 3,233 539 0 5,388 7.4 12 San Francisco, CA 1,886 42 1,886 707 0 4,479 6.1 13 Washin g ton, DC ( DCA ) 3,007 68 1,438 0 0 4,445 6.1 14 Philadel p hia, PA 2,446 57 1,529 306 0 4,281 5.9 15 Ralei g h/Durham, NC 1,261 30 2,312 210 420 4,203 5.8 16 Houston, TX ( IAH ) 3,696 93 0 284 0 3,981 5.5 17 Richmond, VA 841 22 3,026 0 0 3,867 5.3 18 New York, NY ( LGA ) 2,522 66 1,321 0 0 3,843 5.3 19 Kansas Cit y , MO 2,414 63 1,006 0 402 3,822 5.2 20 Sacramento, CA 1,326 36 1,326 1,060 0 3,711 5.1 21 St. Louis, MO 2,479 69 901 0 225 3,605 4.9 22 Houston, TX ( HOU ) 2,964 82 423 0 212 3,599 4.9 23 Minnea p olis, MN 2,145 61 1,072 322 0 3,538 4.8 24 Colorado S p rin g s, CO 722 21 2,744 0 0 3,466 4.7 25 Nashville, TN 3,179 93 82 82 82 3,424 4.7 26 Baltimore, MD 2,543 79 535 134 0 3,213 4.4 27 Charlotte-Dou g las, NC 1,218 38 304 913 761 3,197 4.4 28 Fort Lauderdale, FL 808 26 1,527 718 0 3,053 4.2 29 Portland, OR 1,692 57 987 141 141 2,961 4.1 30 San Die g o, CA 2,285 84 334 111 0 2,730 3.7 31 Miami, FL 744 27 1,983 0 0 2,726 3.7 32 Des Moines, IA 496 19 2,082 0 0 2,578 3.5 33 Pittsbur g h, PA 1,584 62 688 193 85 2,551 3.5 34 Indiana p olis, IN 1,519 62 660 185 81 2,447 3.4 35 Honolulu, HI 873 37 1,378 138 0 2,389 3.3 36 Fort Walton Beach, FL 905 39 1,422 0 0 2,328 3.2 37 Da y ton, OH 528 23 0 1,760 0 2,288 3.1 38 Albu q uer q ue, NM 1,315 62 571 160 70 2,117 2.9 39 Salt Lake Cit y , UT 1,358 64 453 0 302 2,112 2.9 40 Ontario, CA 1,282 62 557 156 69 2,065 2.8 41 El Paso, T X 1,272 62 553 155 68 2,047 2.8 42 Washin g ton, DC ( IAD ) 1,272 62 553 155 68 2,047 2.8 43 Detroit, MI 1,261 62 548 154 68 2,030 2.8 44 New Orleans, LA 1,821 92 0 0 152 1,973 2.7 45 Columbus, OH 1,541 80 385 0 0 1,926 2.6 46 Tam p a, FL 1,487 82 319 0 0 1,806 2.5 47 Tulsa, OK 1,121 62 487 137 60 1,805 2.5 48 Burbank, CA 1,013 62 440 124 54 1,631 2.2 49 San Antonio, TX 970 62 421 118 52 1,562 2.1 50 Cleveland, OH 1,035 67 517 0 0 1,552 2.1 To p 50 105,739 57.2 56,781 15,961 6,288 184,768 253.1 Domestic 143,779 58.3 74,500 20,022 8,333 246,634 337.9 International 10,425 38 14,762 293 1,924 27,404 37.5 Total 154,204 56.3 89,262 20,315 10,257 274,038 375.4