# Proposal Under the Small Community
Air Service Development Program

Docket: DOT

- OST

- 2014

- 0113

Sponsoring Entity: Huntsville International Airport

Dun & Bradstreet Number: 063680789

2

- digit Congressional D istrict C ode: 05

July 2014**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** **Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** **Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** **Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** **Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 

# Table of Contents

Executive Summary

__________________________________ 1
Air Service Overview

__________________________________ 2

Air Service Needs and Deficiencies

________________________________ _ 2 Passenger Leakage

________________________________ ______________ 2 Top O/D Markets Not Served

________________________________ ______ 4 HSV Tops Highest Fares in the Nation

______________________________ 5

Historical Service

________________________________ _______________ 6

Efforts to Improve Air Service and Recapture Leakage Market

__________ 7

Market Research

________________________________ _______________________ 7 Air Service Budget

________________________________ _____________________ 7 Promotional Campaigns and Programs (2010

- 2013)

__________________________ 7 

# Strategic Plan

_______________________________________ 8

Primary Goals:

________________________________ __________________ 8 Objectives:

________________________________ _____________________ 8 Target Carrier(s)

________________________________ ________________ 9 Target Markets Analysis

________________________________ __________ 9
Curren t Grant Application is Materially Different from 2010 Grant Award

_ 10 

# Plan Implementation and Funding

______________________ 11

Public/Private Partnership

________________________________ _______ 11 Funding Overview

________________________________ ______________ 11 Community an d Airport Participation

______________________________ 13
Airport Marketing Program

________________________________ _____________ 13 Marketing Budget and Schedule

________________________________ _________ 14 

### Funding Assurances

________________________________ ____________ 15 Legal Sponsoring Entity

________________________________ _________ 15
Conclusion

________________________________ ____________________ 15 

# Previous Grants

____________________________________ 16 Community Overview

________________________________ 17 Appendix A: Letters of Support

_________________________ 21**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### U.S. Senator Richard Shelby

________________________________ _____ 22 Allegiant Air

________________________________ ___________________ 23 City of Huntsville, Mayor’s Office

________________________________ __ 24 Madison County Commission

________________________________ ____ 25

Ch amber of Commerce of Huntsville/Madison County

________________ 26 Huntsville/Madison County Convention & Visitors Bureau

_____________ 27 City of Athens, Mayor’s Office

________________________________ ____ 28 Limestone County Commission

________________________________ ___ 29 Greater Limestone County Chamber of Commerce

___________________ 30 Limestone County Economic Development Association

_______________ 31 City of Decatur, Mayor’s Office

________________________________ ___ 32 Decatur/Morgan County Chamber of Commerce

_____________________ 33

Decatur

- Morgan County Convention and Visitors Bureau

_____________ 34 City of Madison, Mayor’s Office

________________________________ ___ 35

North Alabama Mountain Lakes Tourist Association

__________________ 36**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 1 

# Executive Summary

Huntsville International Airport (HSV) serves an 18

- county region, which encompasses 12 counties in North

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

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

Birmingham airports

– both of which are served by low cost carriers

. High fares at HSV continue to drive

significant passenger volumes to neighboring Birmingham, AL ( BHM) and Nashville, TN ( BNA ); HSV has

maintained a position in the top eight of the highest fare airports in the country as stated by the Bureau of
Transportation Statist ics Domestic Air F are report for the past six years

. In 201 4 , HSV conducted a Leakage
Study

, show ing HSV loses about 39% of its market. The primary markets that are recapturing HSV passengers

are Birmingham , AL

, and Nashville , TN

, with some leakage to Atlanta , GA

, and Chattanooga , TN

.

After AirTran launched service, with assistance from a SCASDP 2010 grant

, HSV ’s leakage to other airports

was recaptured and fares declined

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

. HSV was one of the initial 16 small communities that lost Air T ran service due to the merger with Southwest

, and

coupled with the “capacity discipline” by all the carriers we began to see an increase in market leakage and

fare s again

.

To achieve considerable and long

- term air service enhancement , HSV needs a sustainable air service program

that is mutually beneficial for the community and the carriers

. The Airport adopted a n incentive program to offer
airline incentives up to $2 million. This incentive can be used by multiple carriers, t o offset current or future

airport costs for a two

- year promotional period

, with the goal of promoting new passenger service which will

reduc e the number of passengers driving to other airports. The objective of the program is for the airlines to

provide a n innovative approach to r educe our leakage . The airline (s) must offer a program which can be readily

advertised and substantially reduce the number of passengers driving to alternate airports. The grant will

supplement the Airport’s established incentive program by offsetting the start

- up/station costs and marketing

costs. In addition, city leaders are committed to this grant , pledging more th an $ 500,000 in cash from the

community as a match to the proposed grant

. Key attributes of program:

• Investing in ground services to lower carrier start

- up and ongoing operating costs

• Add new air service resulting in:

o Reduce d leakag e

o Increase d competition

o Increase d enplanements

o Reduce d fares

• Long

- term success will be achieved through:

o Reliev ing initial start

- up /station costs and marketing costs for new program

o Leveraging airport’s experience in timely and successful implementation of 2004 and 2010 SCASDP gr ants

o Strong marketing plan and incentives to support new program

o Community support of $500,000**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 2 

# Air Service Overview

Air Service Needs and Deficiencies

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

1. Significant leakage

2. Unserved marke ts

3. Highest fares in the nation 

## Passenger Leakage

HSV passengers are primarily driving to BNA and BHM; however we are losing passengers to Atlanta and
Chattanooga as well because they are able to obtain more competitiv e fares and non

- stop destinations (see

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

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

.


### Exhibit 1 : 201 4 Airport Market Share of Huntsville Passenger Leakage

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

- county service region

parked in the BHM and BNA airport parking lots

. A special survey is also conducted on ho lidays such as

Th anksgiving and Christmas to specifically gauge leisure travel. W ith the presence of AirTran and non

- stop

service to BWI and MCO

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

- stop

service the drive traffic incr eased. The drive traffic trend usually corresponds with the passenger traffic at

HSV.**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 3 HSV has non

- stop service to nine airports in eight cities (see Exhibit 2 )

. 

### Exhibit 2 : Current Air Service Map

– July 201 4**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 4 

## Top O/D Markets Not Served

Year

- ending first quarter 201 4 shows that 50% of HSV’s top 10 destinations are not currently served with non

stop service ( see Exhibit s 3 and 4 ).



### Exhibit 3 : Top 10 O&D Markets Ranked by Passengers, YE 1Q 1 4

Rank Destination Annual Passengers Currently Has
Non

- Stop Service



### 1 Washington, DC (National) 68,065 Yes

2 Los Angeles, CA 33,545 No

3 Dallas, TX (Dallas/Ft Worth) 32,275 Yes

4 Houston, TX (George Bush Intc.) 32,250 Yes

5 Orlando, FL 28,475 No

6 Charlotte, NC (Douglas) 26,430 Yes

7 Baltimore, MD 25,385 No

8 Chicago, IL (O’Hare) 21,540 Yes

9 Boston, MA 21,174 No

10 New York, NY (La Guardia) 20,565 No

Source: DOT DB1B data via Diio Mi Internet

- Based Aviation Data Tool as of YE 1 Q1 4



### Exhibit 4 : Current Air Service Details, Scheduled for July 201 4

Airline Destination Equipment Type Flights/ Day Seats/ Day

American Dallas/Fort Worth, TX A320

- Narrow Airbus 3 355

American Chicago

- O'Hare, IL ERJ

- RJ Embraer 2 97

Delta Atlanta, GA A320

- Narrow Airbus 1 122

Delta Atlanta, GA B717

- Narrow Boeing 3 312

Delta Atlanta, GA MD

- 80

- Narrow McDonnell Douglas 2 346

Delta Detroit, MI Canadair CRJ

- RJ Bombardier 2 82

United Denver, CO ERJ

- RJ Embraer 1 48

United Washington

- Dulles, VA Canadair CRJ

- RJ Bombardier 1 42

United Houston

- Intercontinental, TX ERJ

- RJ Embraer 3 140

United Chicago

- O'Hare, IL ERJ

- RJ Embraer 1 50

US Air Charlotte

- Douglas, NC Canadair CRJ

- RJ Bombardier 2 123

US Air Charlotte

- Douglas, NC Canadair CRJ

- RJ Bombardier 3 145

US Air Washington

- National, DC Canadair CRJ

- RJ Bombardier 2 79

U S Air Washington

- National, DC E

- 170 (E

- Jet

- Narrow Embraer) 2 118

Source: Diio Mi Internet

- Based Aviation Data as of 07/ 29 /1 4**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 5 

## HSV Tops Highest Fares in the Nation

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

for all four quarters of 2013 (see Exhibit 5 ) while hovering in the top tier for the past five years. In fact, HSV’s
average fare of $5 28 is 38.4 % higher than the nat ional average of $3 81 while HSV is 25 % higher than BHM

and 4 5 % higher than BNA (see Exhibit 6 ).



### Exhibit 5 : Highest U.S. Domestic Average Itinerary Fares 4 th 

### Quarter 2013

Note : N umber on bar chart represents HSV ranking per quarter by BTS



### Exhibit 6 : Highest U.S. Domestic Average Itinerary Fares 4 th 

### Quarter 2013

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

trip or one

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

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

. 1 4

2

1 1 1 5

4

1 1 1 1 2 3

1 1 1 6 8

1

2011 2010 2012 2009 2013

4Q 3Q 1Q 2Q

+38.4% ($146)**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 6 

### 586,321

624,037

632,210

595,272

520,890 2009

2010

2011

2012

2013 Passengers at HSV experience some of the highest fares with regards to walk

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

- up fares below (see Exhibit 7 )

.



### Exhibit 7 : Sample Current Comparison of HSV Walk

- up Fares

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



### Washington

- National, DC $995 $450 $481 $466 53%

Newark, NJ $848 $512 $813 $663 22%

Dallas/Ft Worth, TX $688 $438 $413 $426 38%

Baltimore, MD $724 $430 $451 $441 39%

Orlando, FL $554 $455 $418 $437 21%

Source: Sabre fare quotes pulled July 30, 2014 for travel outbound on August 1 , 201 4 and return August 4, 2014



## H istorical S ervice

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

- stop destinations have positively impacted passenger traffic.



### Exhibit 8 : Enplaned Passengers

– Past Five Years

A irT ran

– May 2010

– August 20 12

Source: Huntsville International Airport**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 7 

## Efforts to Improve Air Service and Recapture Leakage Market

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

Community Efforts

• Conduct Focus Groups, 1994

– Current

• Conduct Annual Passenger Survey, 1994

– Current

• Conduct Annual Drive Market Survey, 1998

– Current

• Conduct Monthly Car Tag Analysis, 1995

– Current

• Conduct Annual Drive Market Analysis, 1998

– Current

• Conduct Weekly Competitive Airport Fare Analysis, 1994

– Current

• Established Regional Partnership Council, 1991

– Current

• Established Business Travel Council, 1998

– Current

• Make Presentat ions to Existing Airlines, 1996

– Current

• Provide Start

- up Incentives to Airlines for New Non

- stop Service, 1996

– Current

• Create d Incentive Program for Sister

- c ity Fare Matching, 2000

– Current

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

, 2 013

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

• Conducted Campaign for US Airways Fare Reduction Program for 25 C ities from HSV, 2006

• Created Travel Assistant Program

– Huntsville Hot Ticket Line, 2008

- Current

• Recipient of DOT Grant and A ttracted AirTran, 2010

• Adopted new incentive program, 2012

- Current

• Marketing Program with American Airlines, 2014



### Air Service Budget Annually

, the Airport allocates approximately $7 50,000 to support air service efforts which includes airport staff, advertising, airline meetings, and marketing programs. Through the years the Airport has invested nearly $ 6.5 million in waived airport fees, advertising campaigns and o ther concessions to incentivize new air service and competitive fares . This gran t request will not replace these funds but will be use d to supplement our ongoing efforts.



### Promotional Campaigns and Programs (2010

- 2013)

In addition to the items listed above

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

• “Huntsville Hot Ticket and Travel Assistant Program”

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

- 258

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

• 2010 DOT Grant for AirTran service to MCO and BWI

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

, and BWI and MCO grew to our number one and two top destinations, respectively.**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 8 

# Strategic Plan

The objective of the grant request is to increase air service through a combination o f traditional start

- up
incentives along with investments such as ground handling which could provide ongoing carrier cost
savings. The focus investments to reduce costs comes from direct input from carriers looking to start

service at Huntsville based on their successful experiences at other airports. Start

- up fund ing includes

start

- up /station costs and marketing efforts for the airlines to provide program s that will reduce the

number of passengers driving to alternate airports. The airline can be any carrier currently serving the

market or a new entrant such as Allegiant Air, wh ich has provide d a letter of support with this application

. The airline must offer a program which can be readily advertised and substantially reduce the number of

passengers dr iving to alternate airports. The airline must implement a program that is mutually beneficial

for the community at large for either leisure or business travelers. This grant can be used to fund new

programs by multiple airlines in our market. The $ 500,000 grant supplemented with the $500,000 grant

from the City of Huntsville will be used to offset the start

- up /station costs which could include but not

limited to ground handling

, salaries for new employees and marketing costs for any carrier that

implements a program that reduces our passenger leakage

.



## Primary Goals:

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

1. Create permanent cost reductions for both start

- up a nd ongoing airline operations

.

2. Recapture leakage

– prevent leakage from increasing and threatening existing service

.

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

.

4. Increase awareness of competitive fares at HSV as compared to competing airports.



## Objectives :

1. Analyze and make investments that could be made by HSV which will reduce costs for carriers at

start

- up and on an ongoing basis. Examples of those which have proven successful at other

airports include purchasi ng ground handling equipment.

2. Fund incentives (start

- up /station costs

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

par it y with competing airpor ts. The programs are targeted at retaining HSV passengers in our

service region

, not attracting passengers from other areas.**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 9 3. Fund local marketing and promotional programs to create awareness of airline fare programs

, competitive air fares

, and new air service

. Our airport branding has suffered from the negative
publicity with the BTS rankings thus creating a perception that low fares do not exist in our

market. This marketing program wil l be crucial in helping retain our passengers.



## Targe t Carrier(s)

HSV continues to have conversations with potential carriers. A specific opportunity has come up with one

or more carriers with the focus being on lowering carrier operating expenses in order to facilitate

profitable growth into new routes. The new passengers would then lead to low CPE for all carriers at the
airport. Any new service would be supported with launch marketing funds. Airline support for this

proposal is demonstrated through letters of support.



## Target Markets Analysis

HSV’s pr imary target is new service to markets in Florida. Orlando has twice had successful service to

HSV first from Delta and then later AirTran. Multiple other markets show potential to be viable in the long

term. Should HSV not secure service to Florida it will

, as a secondary option

, look to use the grant for

other service to the East Coast.

HSV saw strong stimulation from new AirTran service, which could be expected in other new markets
given the current fare differentials between HSV and leakage to other airports . Note that AirTran
operated Baltimore with two flights per day and Orlando just one, capping its potential stimulation.



### Exhibit 9 : Stimulation from new AirTran Service, Passengers per day Each Way 2009 2011 Stimulation
Baltimore 43 163 281% $152 $102
Orlando

- MCO 50 100 102% $224 $129

Source: Diio Mi Internet

- Based Aviation Data as of 07/29/14, U.S. DOT DB1B O&D Data**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 10 Exhibit 1 0 : Fares in Potential Target Markets, HSV versus Leakage to Other Airports , YE 1Q14 BOS BWI FLL MCO TPA
ATL $186 $133 $116 $134 $148
BHM $244 $155 $195 $127 $122
BNA $174 $156 $171 $152 $157 Weighted Average $186 $141 $127 $138 $147

HSV $247 $227 $191 $206 $243 HSV H/(L) $61 $86 $64 $68 $96 Average 33% 61% 50% 50% 65%

Source: Diio Mi Internet

- Based Aviation Data as of 07/29/14, U.S. DOT DB1B O&D Data



### Exhibit 11: Daily Passengers Each Way in Potential Target Markets to/from HSV, YE 1Q14 BOS BWI FLL MCO TPA HSV 2 9

. 0 34. 8 12.2 39.0 14. 5

Source: Diio Mi Internet

- Based Aviation Data as of 07/29/14, U.S. DOT DB1B O&D Data



## Current Grant Application is Materially Different from 2010 Grant Award

T his application is significantly different enough to constitute a new project under 49 U.S.C. § 41743.

This application incorporates different goals and a dramatically different structure for securing service and

positioning it for ongoing success. The 2 010 G rant was for a revenue guarantee with marketing support.
This grant looks to fundamentally lower operating costs for ongoing saving s, providing a cost base that

wil l be viable for the long

- term.**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 11 

# Plan Implementation and Funding

Public/Private Partn ership

The City of Huntsville and the Huntsville Industrial Development Board have formed a partnership to

provide financial suppor t for air service development. They supported the 2010 grant and are partners

with this application as well.

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

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

mission is to create an environment of ownership for the HSV facilities, to promote strong working

relationships and to en courage information and resource sharing among the Tennessee Valley
communities in the HSV service region . The Huntsville International Airport Business Travel Council

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

region

.



## Funding Overview

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

towards the start

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

incentives. On June 10 , 201 4 the HSV board of directors adopted new incentives for the air service
development program (section 10) in the Statement of Policy, Regarding Airlines Use and Occupancy of

Airport Facilities

- FY2014.

**S ECTION**  **10 AIR SERV**  **ICE DEVELOPMENT PROGRAM**

The Executive Director may establish air service development programs providing incentives to advance the Authority’s goal of promoting new passenger service to a greater number of destinations, service which will reduce the number of passengers driving to other airports from the Airport’s service area and new cargo service which will promote international air commerce. Any such incentives shall be consistent with federal law.

**A. Passenger Service Incentive** 

The Executive Direc tor is authorized to expend up to a maximum amount of TWO MILLION AND 00/100 DOLLARS ($2,000,000.00) during Fiscal Year 2015 to provide incentives to Air Carrier Airlines which increase enplanements at the Airport by reducing the number of passengers drivi ng from the Airport’s service area to other airports. To qualify for such an incentive an Airline must offer new service that can be readily advertised and can reasonably be expected to substantially reduce the number of passengers driving from the Airpor t’s service area to other airports. Any Air Carrier Airline seeking such an incentive must provide a detailed written proposal which results in a written agreement entered into by the Airline and the Authority.**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



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

- up/station costs and marketing costs

. Community Airport DOT Total Fund Uses Cash In

- Kind Cash In

- Kind Grant

Marketing $250,000 $745,652 $ 250,000 $ 250,000

Incentives
Start

- Up /Station Costs $500,000 $ 250,000 $1

, 5 00

, 000

Total $500,000 $250,000 $745,652 $500,000 $1,995,652**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 13 

## Community and Airport Participation

Community Participation

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

Airport Marketing Program

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

• Traditional Media Coverage

o Host roll

- out media event

o Disseminate national news wire coverage for launch of service

o Visit regional talk shows and editorial boards to discuss service

o Keep new service continuously in the news throughout 18

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

• Social Media Exposure

o Mention weekly the new service across HSV social media channels

o Build exclusive social med ia campaign surrounding new service

o Host social media contests for airline voucher giveaways

o Cross promote service with corporate and community social media streams

o Educate local and travel bloggers to generate articles on new service

o Advertise with paid banner ads on key blogger websites

o Feature new service on HSV blog

• Direct Marketing

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

o Advertise bi

- monthly on Huntsville Hot Ticket eblast and website

o Advertise on baggage claim jumbotron

• Community Outreach

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

- county service region

o Distribute giveaways promoting the new service at tourism information booths

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

o Attend and promote service at large

- scale community events

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



### o Solicit feedback from passengers on new service to determine services’ effectiveness**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 14 

### Marketing Budget and Schedule

Exhibit 1 2 : Marketing Plan**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 15 

## Funding Assurances

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



## Legal Sponsoring Entity

Huntsville

- M adison County Airport Authority

(Huntsville International Airport

– HSV)

1000 Glenn Hearn Blvd., Box 20008

Huntsville, AL 35824

Contact: Richard Tucker, Executive Director, 256

- 258

- 1955



## Conclusion

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

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

forth in the order soliciting proposals as follows:

1. BTS reports HSV has the highest average air fares in the country as of YE 4Q13

– 38 %

higher than the national average; and

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

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

- private
partnership formed to initiate programs with the carriers to improve air fares and substantially

reduce the number of passengers driving from the a irport service area to other airports.

4. This gran t will provide material benefits to a broad segment of the traveling public including

businesses, educational institutions, and other enterprises.

5. This grant will be used within a two

- year period upon receipt of the award and carrier
agreement to provide program/service as described above . The project timeline will include
one year for finalizing agreements with the carriers. The next phase will include the

a nnouncement of the program/service , start of progra m/service and then the marketing

campaign. It is anticipated that the payout, to the carrier(s) will happen on a monthly basis.**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 16 

# Previous Grants

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

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

towards off setting start

- up risks and station costs for new or incumbent carriers

.

2004

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

– Huntsville Hot Ticket. We
have been able to highlight “hot fares” for top destinations and provide information on airl ine low fare

weekend getaways. The development and implementation of the Huntsville Hot Ticket system and site

went very well; and the program developed in a timely manner (3Q 2005) and within budget. As well, we

supplemented the program f our years later with a Huntsville Hot Ticket Line (256

- 258

- 1944) to assist

passengers

– at no cost to them

– in finding hot fares and deals in and out of Huntsville. The

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

people.

2010

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

- stop service to Orlando and

Baltim ore. AirTran announced service and once the service was added our fares to MCO and BWI

decreased on average 50% , as well these two markets rose to the number one and number two

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

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

lost their AirTran service, thus bringi ng our market full circle with the loss of non

- stop service and the
climb back to the highest air fares in the U.S.**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 17 

# Community Overview

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

Huntsville/Madison County, Alabama, is geographically near the center of the southeastern United States with

more than 430,000 people in the m etro area. Madison County and its surrounding counties form a thriving

regional market with a population of more than one million people. This metro area has strong gr owth in

population, employment, annual pay and labor force

. The Huntsville community serves as the primary economic
engine for the northern Alabama and southern Tennessee region. Sin ce the early 1950s, Huntsville has been
one of the nation’s principal centers for space and defense technology. Home to the work of Dr. Wernher von

Braun and America’s rocket development programs, the Huntsville community and Redstone Arsenal became

the location of choice for the countr y’s best and brightest aerospace engineers and scientists. Rocket City USA,

as the region was known, gave original meaning to the term “rocket science”

. The strong economic base of this

community requires connectivity to the world at competitive fares. Huntsville is one of the Top 30 fastest growing major metro’s in the country U.S. Census, March 2014 Huntsville is among the top 10 Most Promising U.S.
Tech Hubs to watch in 2014 Techie.com, January 2014

Huntsville receives Standard & Poor’s highest possible “AAA” bond rating Standard & Poor's, October 2013 Huntsville named one of
the Best Places to Live

Livability.com, October 2013

Huntsville/Madison County is
No. 4 on the list of America's high tech hot spots Progressive Policy Institute, October 2013 Huntsville ranked in
NerdWallet's top 10 U.S.
cities on the rise list

NerdWallet, August 2013

Madison County ranked No. 7 in the country of a great place to live and find a job

CNN Money.com, August 2013 Huntsville named among top 25 cities for high

- tech startups

Entrepreneur, August 2013

Huntsville 4th for
Growth Potential

Business Facilities, August 20 13 Huntsville is a best
destination for green travelers

TravelNerd (NerdWallet), July 2013**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 18**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 19**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 20**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 21



# Appendix A : Letters of Support

1. U.S. Senator Richard Shelby

2. Allegiant Air

3. City of Huntsville, Mayor’s Office

4. Madison County Commission

5. Chamber of Commerce of Huntsville/Madison County

6. Huntsville/Madison County Convention & Visitors Bureau

7. City of Athens, Mayor’s Office

8. Limestone County Commission

9. Greater Limestone County Chamber of Commerce

10. Limestone County Economic Development Association

11. City of Decatur, Mayor’s Office

12. Decatur/Morgan County Chamber of Commerce

13. Decatur

- Morgan County Convention an d Visitors Bureau

14. City of Madison, Mayor’s Office

15. North Alabama Mountain Lakes Tourist Association**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 22 

## U.S. Senator Richard Shelby**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 23 

## Allegiant Air**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 24 

## City of Huntsville, Mayor’s Office**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 25 

## Madison County Commission**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 26 

## Chamber of Commerce of Huntsville/Madison C ounty**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 27 

## Huntsville/Madison County Convention & Visitors Bureau**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 28 

## City of Athens, Mayor’s Office**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 29 

## Limestone County Commission**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 30 

## Greater Limestone County Chamber of Commerce**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 31 

## Limestone County Economic Development Association**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 32 

## City of Decatur, Mayor’s Office**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 33 

## Decatur/Morgan County Chamber of Commerce**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 34 

## Decatur

- Morgan County Convention and Visitors Bureau**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 35 

## City of Madison, Mayor’s Office**Huntsville International Airport Small Community Air Service Development Grant Application** 

**– July 2014** 



### 36 

## North Alabama Mountain Lakes Tourist Association