Montgomery 

Regional Airport

Application Under the

Small Community Air Service 

Development Program

DOCKET DOT-OST-2012-0069

Montgomery, Alabama

Montgomery Airport Authority

DUNS # 1556182830000

EIN# 63-0638943

Congressional District #2
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 2

Proposal Contents

I. OVERVIEW OF THE MONTGOMERY CHALLENGE.......................... 3

STATEMENT OF PROBLEM....................................................................... 3

2012: A SERIOUS AIR SERVICE DEFICIENCY............................................ 3

THE GRANT REQUEST............................................................................ 3

IMMEDIATE RESULTS & ECONOMIC BENEFITS .......................................... 4

AIRLINE TARGETS .................................................................................. 4

PROGRAM OVERVIEW ............................................................................ 5

NEED FOR GRANT SUPPORT .................................................................. 5

GRANT ADMINISTRATION ........................................................................ 6

PRIOR GRANT HISTORY.......................................................................... 6

PAST AIR SERVICE DEVELOPMENT ACTIVITIES......................................... 6

PROJECT SPONSOR ............................................................................... 7

II. MONTGOMERY MARKET REVIEW................................................... 8

MGM AIR SERVICE – CAPACITY DOWN 14.5% SINCE 2005...................... 9

ENPLANEMENT HISTORY .......................................................................10

THE NUMBER ONE DEFICIENCY: ACCESS TO THE O’HARE GATEWAY.......10

MONTGOMERY FARES – SIGNIFICANTLY HIGHER.....................................11

III. OVERVIEW OF PROPOSAL ............................................................12

THE NEW AIR SERVICE DEMANDS AT MONTGOMERY ..............................12

GENERAL APPLICATION OF GRANT FUNDING ..........................................12

THE GRANT WILL HELP CREATE JOBS....................................................13

III. PROJECTIONS OF CHICAGO/O’HARE SERVICE..........................14

AIRLINE EXPENSE/REVENUE PERFORMANCE ..........................................14

MGM-ORD WILL BE A SCASD SUCCESS..............................................15

IV. GRANT ADMINISTRATION PLAN...................................................16

PROGRAM FUND ALLOCATION................................................................16

THE RISK-ABATEMENT PROGRAM ..........................................................16

MARKETING & ADVERTISING SUPPORT...................................................17

POST-GRANT SUPPORT ........................................................................18

V. SUMMARY OF APPLICATION..........................................................19
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 3

I. Overview of the Montgomery Challenge

Statement of Problem

In the past decade, Montgomery has emerged as one of the most vibrant 

industrial centers in America. One of the reasons is the extensive 

investment made in the region by companies from not only the United 

States, but from Asia and Europe as well. In contrast to other regions, 

Montgomery, Alabama remains a vibrant example of economic growth.

However, this growth is dependent on viable and affordable air service. 

Due to changes in the airline industry, Montgomery has suffered material 

declines in both air service and in capacity. These have led to higher

fares as well. The result is that the expanding US, Korean and Asian 

business base is experiencing reduced access to Montgomery. This is 

exacerbated by the congestion and delays at the region’s main portal, to 

the US and the globe, which is Atlanta.

2012: A Serious Air Service Deficiency 

These growing deficiencies will be addressed by the implementation of 

access to Chicago/O’Hare, where both United and American operate 

domestic and international hubbing operations. The additional capacity 

this new service will provide will both reverse the declines in air access to 

MGM, as well as bringing much-needed additional fare discipline to the 

market. This grant application is intended to provide revenue incentives to 

attract service from one of these carrier systems.

As an example of the air service challenges facing MGM, we can point to 

the average fares paid (including taxes) at both Birmingham and at 

Montgomery for the full year 2010:

The Grant Request

This grant application is intended to gain access to the Chicago/O’Hare 

hub of American or United, which will: a) provide needed new 

competition, b) reverse the capacity decline, c) provide some additional 

fare discipline, and d) recapture traffic leaking to ATL and BHM.

Montgomery is applying for a grant in the amount of $400,000, with a 

hard-dollar local match of 20%, resulting in a total program funding of 

$480,000. In addition, the Airport will negotiate other in-kind support for 

BHM MGM Pct Premium

Average Fare $203.86 $264.82 29.9%

Access to the global 

Chicago/O’Hare hub 

will address a range 

of air service 

deficiencies as well 

as boost the MGM 

regional economy.
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 4

the carrier, depending if it is American (an incumbent) or United (a newentrant.)

The veracity of Montgomery’s need to address this deficiency is 

underscored by the increasing delays, misconnections, and other 

operational problems at Atlanta Jackson-Hartsfield International Airport. 

In fact, Hyundai Motors – a major employer in the region - has advised 

repeatedly that these issues are becoming problematic in regard to that 

company’s future expansion plans in Alabama. This air service deficiency, 

therefore, is a serious economic issue.

Today, top-tier jobs such as those generated by Hyundai are critical to the 

nation’s emergence from the current recession. The service that this grant 

will facilitate will help preserve and increase such employment in 

Alabama.

Therefore, Montgomery Regional Airport and the Montgomery Area 

Chamber of Commerce hereby respectfully submit this application for a 

grant under the Small Community Air Service Development Program.

Immediate Results & Economic Benefits

The grant requested will successfully accomplish the following:

 Resolve A Clear Air Service Deficiency. Montgomery and its 

important global industries need to replace the capacity lost over 

the past five years as the airline industry has contracted.

 Engender New Investment. Atlanta being the current major 

gateway for MGM is increasingly problematic to the economic 

growth of Alabama and to Montgomery. The problems of 

congestion, delays and misconnections at ATL are not going to be 

addressed in the near future. Opening access to O’Hare will give 

immediate relief from this traffic bottleneck.

Airline Targets

As a practical matter, there are only two airline targets for this grant, 

American or United. Both are currently undergoing substantial strategic 

shifts that will not likely be completely addressed until late 2012:

 United, currently, is the combination of the merger of United and 

Continental. The fleet plan for this carrier is not fully determined, 

particularly in the role of 50-66 seat jets, which are the airliners 

that are best suited for the MGM-ORD route.

 American is in the process of spinning off its American Eagle 

subsidiary. It is clear that they are re-structuring their regional feed 

system.

The Airport and 

community are 

requesting a grant in 

the amount of 

$400,000, with a 20% 

hard-dollar match, to 

recruit American or 

United to implement 

service to their 

global hub at ORD.
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 5

The grant will be used to recruit one of these carriers. It is uncertain at 

this time which will be ready to negotiate first, but it will be by the end of 

2012. This dovetails with the natural time lines of the 2012 SCASD 

program.

The Airport would ask the Department’s indulgence in this issue. 

Analyses indicate that either AA or UA will equally meet the community’s 

needs.

Program Overview

The proposed grant will fund a mechanism that has been used 

successfully in many prior Small Community Air Service Development 

Grants.

A structured agreement will determine exact cost and revenue projections 

for the service, with shortfalls – if any – determined after each threemonth period. Specific requirements will be included regarding flight 

reliability, fare levels, and service quality.

A part of the $480,000 fund will be used to market and promote the new 

service in the MGM service area. This will be accomplished by laserfocused electronic media, including e-mail, social media, and direct 

contact with key travel generators in the region.

Need For Grant Support

The Department is well aware of the current difficult situation in the airline 

industry. Carriers today seek to avoid risk, and that includes situations 

that involve initiation of new service, even in markets where the traffic 

demand is high and the potential for success great. 

Today, in light of the enormous financial challenges facing the airline 

industry, some form of economic risk-reduction must be in place to attract 

new service such as that which is proposed in this document. Preliminary 

discussions with the carriers have made clear that such would be 

necessary to attract this service.

Due to the low level of interest in risk-taking on the part of the airline 

industry, the majority of the funds will be applied to a revenue risk offset 

program for the carrier. 

Analysis by the Airport show a very strong demand for O’Hare service, 

and very strong flow traffic to/from both carrier’s route systems beyond 

ORD. However, the carriers are clear that without some form of revenue 

safety-net, their interest in MGM-ORD is very low.

The proposed program is for one year, and the majority of these funds will 

be applied to a revenue guarantee that will be drawn upon only if 

reasonable, pre-determined traffic and revenue generation goals are not 

met. The community intends to have this program in effect for one year, 

With jet-A at $3 a 

gallon, airlines are 

not prone to gamble 

in opening new 

markets to smaller 

communities.

This grant will give 

the carrier a safety 

net in establishing 

service to ORD.
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 6

and any DOT revenue-guarantee funds not used will be relinquished to 

the Department.

The community believes that this request fills both the intent and the spirit 

of Congress in implementing this program. The community has a pressing 

air service deficiency that is threatening to slow the strong economic 

growth in the Montgomery region. 

Grant Administration

This application is submitted jointly by the Montgomery Regional Airport 

and a community coalition led by the Montgomery Chamber of 

Commerce. The community support for this application is broad and 

encompasses the entire business base of the region.

The unique community enthusiasm for business development that will 

support this new service is showcased by the growing investment in the 

region by Hyundai. The community competed with cities across the nation 

for this huge auto facility. It was the enthusiasm and drive of the business 

community that convinced this Korean conglomerate to invest in 

Montgomery. This local pride will assure that the new Chicago service is 

a success, and that the Department’s grant dollars provide a solid air 

service return on their investment.

Prior Grant History

The community was honored to have been awarded a Small Community 

Air Service Grant in 2005. The objective of that grant was to support 

implementation of nonstop service to the Northwest Airlines hub at Detroit 

to better support the Alabama auto industry. 

Unfortunately, a set of events precluded the ultimate use of the 2005 

grant. At the bottom line, Northwest Airlines found itself in Chapter 11 

bankruptcy and therefore in a contraction mode. As a result, the grant 

was not utilized.

Past Air Service Development Activities

The airport and the community have worked very hard to retain existing 

service and recruit new carriers to the market. In the very tough 

environment of the past five years, it has been a very difficult challenge.

Northwest Airlines service to Detroit – which in 2004/2005 accessed a 

strong auto-related industry – was very close to being recruited, thanks to 

the grant that the Department awarded the community. However, the 

difficulties that carrier encountered leading up to and after its Chapter 11 

filing in 2005 shortstopped the Airport’s recruitment efforts.

In 2009, the Airport was successful in recruiting American Airlines (Eagle) 

flights to Dallas/Ft.Worth. This has helped fill the gap left when 
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 7

Continental discontinued service to its Houston Intercontinental hub in 

2008.

The Airport and the Chamber are continually reviewing the needs and 

opportunities represented by the growth in the auto industry in the region. 

This application is one product of these studies. The access problems 

caused by the congestion at ATL will be greatly relieved with service to 

the global hub at O’Hare.

Project Sponsor

The official sponsor of this project is the Montgomery Airport Authority.

The community partnership is a coalition of civic organizations led by the 

Montgomery Chamber of Commerce.

The community and the Airport appreciate the time and efforts of the 

Department in reviewing this application, and look forward to a favorable 

decision. Please direct any correspondence regarding this matter to

Mr. Phil Perry

Executive Director

Montgomery Airport Authority

4445 Selma Highway

Montgomery, Alabama 36108

334-281-5040
Application of Montgomery Regional Airport

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II. Montgomery Market Review

The air service market area of Montgomery Regional Airport comprises all 

or parts of 16 counties, with a population base of approximately 575,000

and a city population alone of 205,764 according to the 2010 census. The 

city itself experienced a growth of 2.1% between 2000 and 2010.

The role of Montgomery – beyond that of being the capital of Alabama –

is a commercial center. Well situated at the intersection of Interstate 65 

and Interstate 85, the community has experienced population and 

economic growth in the past decade.

But this strong location for manufacturing and logistics also allows 

relatively easy access to much larger Birmingham and Atlanta, facilitating 

loss of passenger traffic to those airports. This grant application is 

intended to implement service that will begin to materially reverse this 

loss.

Air Service Market Area

Montgomery Regional Airport

MGM Air Service Market Area



To BHM

To ATL

The Hyundai factory 

has established 

Montgomery as a 

global 

manufacturing 

center.

This grant will 

establish additional 

needed connectivity 

to MGM’s Asian city 

partners.
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 9

MGM Air Service – Capacity Down 14.5% Since 2005

Montgomery Regional Airport is currently accessed from the rest of the air 

transportation system via three airline systems providing service to three

connecting hubs; Delta to Atlanta, American to Dallas/Ft. Worth, and US 

Airways to Charlotte. But seat capacity has steadily declined – down 

almost 15 percent since 2005. In that year, it had service to five airline 

hub gateways. Today, it is just three.

Departures Seats

Carrier 

System Hub 2005 2011 Change % 

Change 2005 2011 Change % Change

A A 1,048 1,048 52,400 52,400

DFW 1,048 1,048 52,400 52,400

CO 482 (482) -100.0% 18,393 -18,393 -100.0%

IAH 482 (482) -100.0% 18,393 -18,393 -100.0%

DL 3,126 3,418 292 9.3% 185,200 171,320 -13,880 -7.5%

ATL 2,490 3,044 554 22.2% 153,400 152,620 -780 -0.5%

CVG 576 (576) -100.0% 28,800 -28,800 -100.0%

DFW 6 0 (60) -100.0% 3,000 -3,000 -100.0%

MEM 1093 374 (719) -65.8% 54,474 18,700 -35,774 -65.7%

US 1,211 971 (240) -19.8% 60,550 48,550 -12,000 -19.8%

CLT 1,211 971 (240) -19.8% 60,550 48,550 -12,000 -19.8%

Total 5,912 5,437 (475) -8.0% 318,617 272,270 -46,347 -14.5%

Despite growth in 

both population and 

economic activity, 

changes in the 

airline industry have 

resulted in MGM 

losing almost 15% of 

its seat capacity 

since 2005.

The grant will be key 

to reversing this 

trend.
Application of Montgomery Regional Airport

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Enplanement History

In conjunction with declines in capacity, enplanements registered at 

Montgomery Regional Airport have not kept pace with the rapid economic 

growth and globalization of the industrial base.

Because of declining service levels, passenger traffic at MGM has yet to 

recover to the levels of 2004. This is solely due to airline industry capacity 

reductions. The new service to Chicago/O’Hare will reverse this trend.

The Number One Deficiency: Access To The O’Hare Gateway

One of the most glaring deficiencies in MGM air service is lack of nonstop 

service to the global hub at Chicago/O’Hare. 

Montgomery’s economy is now heavily auto-centric, yet there is limited 

seats and access to the industrial centers in the US Midwest. 

Furthermore, there is a huge challenge in that Montgomery is closely tied 

to key Asian industrial points, such as Seoul, Tokyo, Shanghai, and 

Taipei by virtue of the Hyundai plant. There is a pressing need for more 

access to these points. Both of the hubbing carriers at ORD (American 

and United) can provide this access.

The additional capacity that this service would add will bring more fare 

discipline into the MGM market, as well as substantially reduce travel time 

to important automotive centers in Illinois, Michigan, Wisconsin, and 

Indiana.

Business and leisure 

travel to/from points 

in the upper Midwest 

today entail a lot of 

extra flying for MGM 

consumers.

Today, getting to 

Chicago requires 

flying almost 20% 

more miles than a 

nonstop routing.
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 11

Montgomery Fares – Significantly Higher 

Fares at MGM average significantly higher than at either Birmingham or 

at Atlanta. Below are average one-way fares paid, including federal fees 

and taxes in Montgomery’s top 15 O&D markets for 2010.

Only in a few markets are fares comparable to BHM, and in all cases 

fares at ATL are much lower. 

The addition of Chicago/O’Hare service, which this grant will make 

possible, will help address this cost imbalance that is resulting in strong 

leakage to both BHM and ATL.

MGM consumers 

need to pony up an 

average of almost 

30% more to fly out 

of the local airport.

Opening service to 

ORD will bring 

additional discipline 

to airline pricing at 

MGM.
Application of Montgomery Regional Airport

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III. Overview of Proposal

The New Air Service Demands At Montgomery

Montgomery today is one of the leading auto-manufacturing centers in the 

world. The Hyundai facility is manufacturing more than 1300 vehicles per 

day, and employs more than 2600. Including indirect employment (first 

and second-tier suppliers) the Hyundai investment has resulted in an 

estimated 6000 jobs.

Korean-based Hyundai Heavy Industries, a global leader in the heavy 

industries sector, has built a manufacturing plant in Montgomery. The 

facility, Hyundai Power Transformers USA, is located in Interstate 

Industrial Park. The facility was completed in early 2012 and employs an 

average of 1000 people. The plant produces industrial transformers that 

weigh up to 500 tons and are used mostly by utility companies.

Both companies are global industries and support jobs across the nation. 

To support these jobs, adequate and affordable air access is essential. 

However, airlines have cut capacity and fares have literally skyrocketed. 

The new capacity that Chicago/ORD service can provide will be a major 

step in addressing both of these challenges.

Today, the need for US and global access for Montgomery is more critical 

than ever. The main gateway remains the Delta Air Lines hub at Atlanta 

Jackson-Hartsfield International Airport. An important part of the nation’s 

air transportation infrastructure, ATL remains congested and delay-prone. 

Without question, access to another major global portal is necessary to 

assure that MGM has adequate air access and more reasonable fare 

levels from the rest of the nation and the globe.

Furthermore, there is a substantial demand for nonstop service from 

Montgomery to the Chicagoland area, and the data support the 

contention that such service will quickly become profitable on a fullyallocated flight sector basis.

General Application of Grant Funding

The grant requested in this application will be applied only to provide 

assurances regarding the levels of revenue the target airline will attain, 

based on reasonable, pre-negotiated passenger projections.

Fundamentally, this is not a subsidy – if the revenue targets are met, no 

funds will be due the carrier. The program will simply provide a safety net 

to offset the airline’s legitimate initial risks in opening a new nonstop 

market.

This approach has been used successfully at a number of other small 

airports with the assistance of SCASD program grants. It will also be 

successful at Montgomery.

This proposal is for 

a risk-abatement 

program, not an 

airline subsidy.

This approach has 

proven successful in 

many SCASD grant 

awards across the 

nation since 2002.
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 13

The Grant Will Help Create Jobs 

Montgomery has seen enplanements fall during a period of 

unprecedented local economic growth. The reasons are clear: because of 

financial challenges in the airline industry, and not any factors in the MGM 

economy, capacity has remained static. We can conclude the following 

from this situation. 

 Service Reductions: Capacity has been cut by almost 15% in the 

last five years, in spite of the local economy growing strongly. 

Montgomery is an underserved market.

 Fare levels compared to Birmingham and Atlanta (the two major 

sources of leakage from MGM) are much higher. This grant will be 

a major factor in applying fare discipline in the market

The lack of nonstop service to Chicago itself is a cause of leakage that 

this grant will address. Currently, the routing efficiency (the actual miles a 

consumer must fly, compared to nonstop flights) is only 81%. The need to 

connect through ATL, CLT or DFW is time-consuming, expensive, and 

engenders additional leakage from MGM.

The Montgomery Airport Authority and the Montgomery Chamber of 

Commerce would respectfully submit that the Small Community Air 

Service Development Grant Program was designed to address this type 

of situation. It is further noted that the grant will result in materiallyimproved air service, with minimal risk to the scarce funds allocated by 

Congress to this program.
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 14

III. Projections of Chicago/O’Hare Service

Airline Expense/Revenue Performance

The route and market proformas accomplished by the Airport show that 

when fully developed, the MGM-ORD market is clearly one that this grant 

can attract and make successful for both the community and for the 

airline. Below are cost projections based on the 50-seat ERJ-145 aircraft 

operated by American – American Eagle. The data for 50-seat CRJ 

airliners operated by the United system are nearly identical.

These data represent the market subsequent to the initial ramp period, 

which the grant is intended to address. The Airport would point out that 

the grant is intended only to reduce the risk level to encourage the carrier 

to enter the market. While these data reflect analyses of the American 

Airlines system distribution at O’Hare, the results from a review of the 

United system would not vary materially.

Operational Projections - MGM-ORD

MGM - ORD Mileage 674

Aircraft ERJ-145

Service Pattern 2 R/Ts

Annual Flights 1,427

Completion Factor 98%

Block Time 1.95

Annual Block Hours 2,782

Annual Seats 71,344

ASM 48,085,856

Cost Per Hour $4,061

CASM 0.235

Annual Segment Operating Cost $11,300,176

Traffic & Revenue Projections:

Passengers Revenue

Local Traffic MGM-ORD 22,790 $4,757,842

Online Domestic Connections 34,734 $8,561,739

International Passengers 1,139 512,772

Total 58,663 $13,832,353

Less Displacement (10%) $1,383,235

Net System Revenue $12,449,118

Airlines are looking 

for markets where 

the increasing costs 

of “regional” jets 

can be better 

supported.

The strong unmet 

market demand at 

MGM makes ORD 

service a solution to 

that problem.
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 15

MGM-ORD Will Be A SCASD Success

The data compiled by the Airport clearly show that the Chicago –

Montgomery market meet the criteria set by congress in developing the 

Small Community Air Service Development Grant Program. This award 

will accomplish the following:

 It will address an immediate air service deficiency

 It will enhance economic development in the region

 It will incubate service that would help address a capacity 

shortage and have the effect of bringing more fare discipline into 

the market.

The Airport and the Community respectfully ask the Department to review 

these compelling data, and give favorable consideration to a grant that 

will address a demonstrable air service deficiency at Montgomery.
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 16

IV. Grant Administration Plan 

Program Fund Allocation

The program is intended primarily to provide a revenue guarantee to 

reduce the carrier’s initial risk in entering and building the Chicago route 

from Montgomery. In addition, there will be a local marketing effort that 

will engender local awareness and support for the new service.

The Risk-Abatement Program

Montgomery Regional Airport and the community are in on-going contact 

with many carriers regarding new service opportunities. These include 

American and United. Upon favorable notification of grant award, the 

Airport will enter into substantive negotiations with American Airlines or 

United Airlines to secure two daily nonstop flights to Chicago/O’Hare.

The Airport will propose the following, with the final agreement subject to 

Department approval:

 Provision for two daily (with reduced week-end) frequencies, timed 

to connect with the carrier’s flight banks at ORD;

 A pre-agreed per-segment cost for the operation. This will include 

a fuel factor (escalator and deflator) and will be based on historical 

American Eagle (or alternatively, United Express) published costs 

for ERJ (or CRJ) aircraft. The cost will include a reasonable profit 

hurdle to be agreed upon.

 It is understood that MGM-ORD is not a market that is a long-shot 

from potential profitability. The data definitely show that, with initial 

risk-offset in the starting months, MGM-ORD can be a strongly 

contributory route for either of the hubbing carriers (AA or UA) at 

Chicago. Therefore the period of the risk-offset agreement will be 

for one year only, starting from the date of service initiation.

 Reliability is critical to the success of the service. Therefore, the 

agreement will include specific performance metrics. Schedule 

reliability: 98% controllable flight completion. On-time arrivals 

within 15 minutes of published schedule: 95%. 

In addition to hard 

dollars, the 

community and the 

Airport offer a range 

of non-cash 

incentives to attract 

airlines.
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 17

 Pricing dynamics will be driven by the market and by competing 

service options to Chicago and points served by the target carrier 

beyond ORD. However, the carrier must agree to price the service 

within the relative confines of service at other, similar markets at 

ORD.

 The performance of the service, including reliability and passenger 

traffic, will be monitored by the Airport. The airline will be required 

to provide revenue reports, including local ORD O&D and beyond 

traffic revenues, every three months subsequent to service 

initiation.

 Risk-abatement determination and settlement will be made at the 

end of each three-month period.

The Airport will seek DOT approval prior to any agreement with the target 

carrier under this grant. 

Marketing & Advertising Support

The Community intends to implement an aggressive targeted program of 

advertising and marketing to assure that the new service builds traffic 

quickly and with minimum draw on the revenue guarantee. These will 

include:

 Pre-Operational Media: A targeted program of newspaper and 

electronic media placement – including targeted e-mail and an 

aggressive social media program - will begin 30 days prior to the 

announced date of start-up service.1

 Community Outreach. There are only 100 daily departing seats 

envisioned in this program. Therefore the community outreach will 

be highly targeted on the specific industries that have a need for 

Chicago, Upper Midwest, and Asia access. These efforts will 

include direct e-mail, presentations at Chamber and other civic 

events, and liaison with the travel managers of key corporations in 

the MGM region.

 

1

This is now fairly close to a normal consumer booking window. Media placements earlier than this 

will be diluted and ineffective.

It has to be reliable, 

or no funds.

The proposed 

agreement will entail

specific performance 

requirements on the 

target carrier.
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 18

Post-Grant Support

Montgomery Regional Airport and the Montgomery Chamber of 

Commerce have a recognized program to support and build local 

businesses. This includes the carriers serving the Airport. 

At the end of the grant period of one year, the new Chicago service will 

continue to receive aggressive marketing support in the community, as do 

all carriers at MGM. Therefore, the Department’s grant investment will be 

protected and enhanced into the future.
Application of Montgomery Regional Airport

The Small Community Air Service Development Program OST – 2012 - 0069 19

V. Summary of Application

The Montgomery Regional Airport believes that this application is 

consistent with the goals of the Small Community Air Service 

Development Grant Program. 

 It meets the emerging needs of the globalized MGM region 

economy – Access to ORD via either American or United will not 

only open up new access to the Midwest, but will give MGM 

much-needed new access to Asia. United’s nonstops to Tokyo 

have connectivity via its Haneda hub. American has connectivity 

over both Haneda and Narita via its oneworld Alliance relationship 

with Japan Air Lines. Both carriers have nonstops between 

Chicago and China.

 The ORD service will assist in recovering leakage to BHM and 

ATL. The important local MGM-ORD traffic today involves a 

circuitous routing – almost 20% more travel miles than nonstop 

flights. This literally drives consumers to use BHM and ATL.

 It will reduce the reliance on congested Atlanta JacksonHartsfield as the major gateway for Montgomery.

 It represents an opportunity for the target carriers. The Asian 

and other international traffic generated by MGM represent strong, 

new net revenue streams for either of the target carriers.

 It will help to bring fare discipline to the MGM market. Today, 

consumers at MGM are paying on average almost 30% more 

than consumers at Birmingham, resulting in significant leakage 

and lost economic impact to Montgomery.

Based on these data, the Airport would ask the department for favorable 

consideration to this application.

The Airport and the 

community sincerely 

appreciate the 

Department’s time 

and efforts in 

reviewing this 

application.
APPLICATION FOR Version 7/03 

FEDERAL ASSISTANCE 2. DATE SUBMITTED Applicant Identifier 

06/08/2012 

1. TIPE OF SUBMISSION: 3. DATE RECEIVED BY STATE State Application Identifier 

Application Pre-application 

IJ Construction 61 Construction 4. DATE RECEIVED BY FEDERAL AGENCY Federal Identifier 

IJZJ Non-Construction IJNo ctlion 

5. APPLICANT INFORMATION 

Legal Name: Organizational Unit: 

Monlgomery Airport Authority Department: 

O~anizalional DUNS: Division: 

1 6182830000 

Address: Name and t&lephone number of person to be contacted on matters 

Slreet: involving this applioation (give area code) 

4445 Selma Highway Prefix: First Name: 

Phil 

City: Middle-Name 

MonlgOmery 

County: 

Montgomery 

Last Name 

Perry 

:i.f.le· Zl~Codo Suffix: 

ab.tma 108-4842 

Coun\Pl: Email: 

Unite States of America executlve-director@montgomeryairporlorg 

6. EMPLOYER IDENTIFICATION NUMBER (EIN): Phone Number (give area code) Fax Number (give area code) 

f61@1-@]@]@]~@][J@] 334-281·5040 334-81-5041 

8. TIPE OF APPLICATION: 7. TYPE OF APPLICANT: (See back of form for Application Typos) 

IZI Now [] Continuation [J Revision N 

If Revision. enter appropriate lette~ s) In box( es) 

See back of form for descriplion of letters.) ~!her (specify) 0 0 Airport Aulhority 

Other (specify) 9. NAME OF FEDERAL AGENCY: 

Department of Tmnsportatlon 

10. CATALOG OF FEDERAL DOMESTIC ASSISTANCE NUMBER: 11. DESCRIPTIVE TITLE OF APPLICANT'S PROJECT: 

@]@]-[]@]@] Montgomery Regional Airport 

TITLE (Name of Program): 

1~. AREAS AFFECTED BY PROJECT (Cities. Counties, States, etc.): 

Montgomery, Alabama 

13. PROPOSED PROJECT 14. CONGRESSIONAL DISTRICTS OF: 

SlartDate: J·Endlng Date: a. Applicant b. Project 

06/11/2012 08124/2014 

15. ESTIMATED FUNDING: 16.1S APPLl~~~0N SUBJECT TO REVIEW BY STATE EXECUTIVE 

ORDER 12372' OCESS? 

a. Federsl 

400,000 a. Yes.ID THIS PREAPPLICATION/APPLICATION WAS MADE 

AVAILABLE TO THE STATE EXECUTIVE ORDER 12372 

b. Applicant PROCESS FOR REVIEW ON 

c. Slate DATE: 

d. Local 80.000 .~ b.No. Jlll PROGRAM IS NOT COVERED BY E. O. 12372 

e. Other IJ OR PROGRAM HAS NOT BEEN SELECTED BY STATE 

FOR REVIEW 

f. Program Income 17 .IS THE APPLICANT DEliNQUENT ON ANY FEDERAL DEBT7 

g. TOTAL 480,000. 1J Yes If "Yes" attach an explanation. fl1l No 

18. TO THE BEST OF MY KNOWLEDGE AND BELIEF, ALL DATA IN THIS APPLICATION/PREAPPLICATIDN ARE TRUE AND CORRECT. THE 

P.~UMENT HAS BEEN DUlY AUTHORIZED BY THE GOVERNING BODY OF THE APPLICANT AND THE APPLICANT WILL COMPLY WITH THE 

""-TTACHED ASSURANCES IF THE ASSISTANCE IS AWARDED. . 

rfzed tva 

Prefix tp'[1 Name P"iddle Name 

Last Name ~uffix Perry 

~-Tille Executive Director ~- Telephone Number (give area code) 

334-281-5040 

~.Sig ~~~ve ~ ""' Date Si¥:ned '\,.\ \... <="':!ll:;;o... 06108/20 2 

Previous Edition Usable ~ Siandard Fonn 424 (Rev.9-2003) 

Authorized for Local Revroduction Preoaibed bv OMB Circular A-102 
MARTHA ROBY 

2ND DISTRICT, ALABAMA 

CANNON HOUSE OFFICE BUILDING 

ROOM 414 

WASHINGTON, DC 

PHONE: 12021 22!;.-2901 

The Honorable Ray LaHood 

Secreta1y of Transportation 

~ongress of tbe Wniteb ~tates 

f!)ouse of ~epre5entatibe5 

~asbington, 11\~ 20515-()102 

June 4, 2012 

U.S. Department ofTransportation 

1200 New Jersey Ave., SE 

Washington, DC 20590 

RE: Montgomery Regional Airport 

Small Community Air Service Development Grant 

DOT -OST -2012-0069 

Dear Honorable LaHood: 

COMMITIEES 

AGRICULTURE 

ARMED SERVICES 

EDUCATION AND THE WORKFORCE 

I have been contacted by representatives of the Montgomery Regional Airport located in 

Montgomery. Alabama, in reference to the Small Community Air Service Development Grant Program 

administered through your agency. As you will note from the reference above, the airport has submitted an 

application for this grant. 

Funding through this program would allow the Montgomery Regional Airport to improve air service 

to the region as it has been historically underserved in air transportation since 2004. These improvements 

would include: meeting the needs of the continued globalizing of the local economy, include the addition of 

air service to Chicago, reduce reliance on the already congested Atlanta-Hartsfield Airport as the major 

gateway into Montgomery, and aid in bringing fare discipline to the Montgomery market where local 

consumers are spending 30% more per ticket than consumers in Birmingham. 

Please know that I am glad to support the referenced application. Please note my interest and grant all 

due and appropriate consideration. You may reply to my district office in Dothan at the following address or 

fax number. 

U.S. Representative Martha Roby 

217 Graceland Drive, Suite 5 

Dothan. AL 36305 

334-671-1480 (fax) 

If you need to reach a member of my staff: please contact Lori Ward at (334) 794-9680 or viae-mail 

at Iori. \\atd a mail.housc.g.o\. Thank you for your attention to this matter. 

MDR/lw 

Sincerely. 

{~ Martha Roby 

Member of Congress 

PRINTED ON RECYCLED PAPER 
: Jll : 

City of Montgomery, - Alabama 

Honorable Ray LaHood 

U.S. Department of Transportation 

1200 New Jersey Ave., SE 

Washington, D.C. 20590 

Dear Secretary LaHood: 

OFFICE OF THE MAYOR 

Todd Strange, Mqyor 

June 8, 2012 

Post Offiee Bo" nn 

Me>ntgome.,·, Alabama 

36101 - IIIJ 

PH 334--6'25.'2000 

FX 334.625.26oo 

The Montgomery Regional Airport, Montgomery, Alabama, is applying for a Small Community Air 

Service Development (SCASD) Grant, Docket DOT-OST-2012-0069, to improve air service. The amount 

of the grant is $400,000. The Airport Authority will match the required 20%, or $80,000. 

This region has been historically underserved in air transportation since 2004. Approving this modest 

grant would: 

• Meet the needs of the continued globalizing of the local economy (Hyundai Motor 

Manufacturing of Alabama and the new Hyundai Heavy Industries manufacturing plants are 

two prime examples); 

• Provide air service from Montgomery to Chicago which will help reduce the 47°;{) passenger 

leakage rate to Birmingham, AL, and Atlanta, GA; 

• Reduce reliance on the congested Atlanta-Hartsfield Airport as the major gateway into 

Montgomery; and 

• Help bring fare discipline to the Montgomery market (local consumers are spending 30% more 

per ticket than consumers at Birm.ingham). 

I strongly believe that approving this grant will add jobs to our local economy and dramatically 

improve air transportation for Montgomery and the River Region. Thank you for considering this 

grant application. 

Sincerely, / . 

d4t"L; 

Todd Strange 

Mayor