Dun & Bradstreet DUNS Number: 116119731

Tax Identification Number: 456002069W

Two-Digit Congressional District Code: None (At-Large Representation)

Hector International Airport

Fargo, North Dakota

Proposal under the Small Community Air Service Development Program

Docket DOT-OST-2011-0119

FAR
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

2

TABLE OF CONTENTS

INTRODUCTORY LETTER .................................................................................................................... 4

EXECUTIVE SUMMARY ........................................................................................................................ 5

AIR SERVICE OVERVIEW..................................................................................................................... 7

Catchment Area ..................................................................................................................................................... 7

Alternate Airports ................................................................................................................................................... 8

Fargo's Existing Air Service ................................................................................................................................... 9

Air Service Development Efforts ..........................................................................................................................11

2005 Small Community Air Service Development Grant .....................................................................................11

Marketing and Promotion of Fargo's Air Service .................................................................................................12

AIR SERVCE DEVELOPMENT NEEDS AND DEFICIENCIES............................................................. 13

Capacity Trends ...................................................................................................................................................13

Frontier Discontinued Fargo Service in Early 2010 .............................................................................................15

Traffic Trends .......................................................................................................................................................16

Leakage to Other Airports in the Region..............................................................................................................18

Domestic Fare Trends..........................................................................................................................................19

International Traffic and Fare Trends...................................................................................................................20

STRATEGIC PLAN .............................................................................................................................. 21

Proposed New Route ...........................................................................................................................................21

Goals ....................................................................................................................................................................21

Target Airline Support ..........................................................................................................................................22

Fargo-Dallas/Ft. Worth Traffic and Fare Trends ..................................................................................................22

Connecting Traffic and Revenue on American via Dallas/Ft. Worth....................................................................24

American Eagle's Success in the Sioux Falls-Dallas/Ft. Worth Market...............................................................28

Grant Amendments/Alternate Strategies .............................................................................................................31

PROJECT IMPLEMENTATION, MONITORING AND FUNDING.......................................................... 32

Public / Private Partnerships ................................................................................................................................32

Project Funding ....................................................................................................................................................32

Implementation Timeline......................................................................................................................................33

PROJECT MONITORING AND FINANCIAL CONTROL...................................................................... 34

Success Metrics ...................................................................................................................................................34

Legal Sponsor......................................................................................................................................................35

Financial Controls ................................................................................................................................................35
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

3

APPENDIX A: REQUIRED SUMMARY INFORMATION ..................................................................... 36

A. Applicant Information....................................................................................................................................36

B. Public/Private Partnerships ..........................................................................................................................36

C. Project Proposal ...........................................................................................................................................36

D. Existing Landing Aids at Local Airport ..........................................................................................................37

E. Project Cost ..................................................................................................................................................37

F. In-Kind Contributions** .................................................................................................................................37

G. Is this application subject to review by state under Executive Order 12372 Process? ................................37

H. Is this applicant delinquent on any federal debt? .........................................................................................37

APPENDIX B: COMMUNITY BACKGROUND .................................................................................... 38

The Cities of Fargo and Moorhead ......................................................................................................................38

Economic Overview .............................................................................................................................................38

The Second Lowest Unemployment Rate in the United States...........................................................................40

APPENDIX C: LETTERS OF SUPPORT............................................................................................. 41
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

4

INTRODUCTORY LETTER
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

5

EXECUTIVE SUMMARY

Hector International Airport is requesting a Small Community Air Service Development (SCASD) Grant in the 

amount of $750,000 to supplement community and airport cash contributions of $275,000, community in-kind and 

airport in-kind incentives valued at $25,000 for marketing and advertising to provide a minimum revenue 

guarantee for service between Fargo and Dallas/Ft. Worth on American Eagle. The total value of financial 

assistance and incentives for the proposed service is $1,050,000.

Dallas/Ft. Worth service is 

proposed because the market 

generates 20.2 passengers per 

day each way, and it would 

provide service in one of 

Fargo's largest markets without 

nonstop service. In addition to 

the local market, the proposed 

service could provide 

connections to at least 100 

other markets American serves 

from Dallas/Ft. Worth. With 

Fargo's current air service, 

many of the markets American 

serves from Dallas/Ft. Worth 

now require more than one 

connection for Fargo travelers. All Fargo markets American and American Eagle could logically flow via 

Dallas/Ft. Worth-Fargo generated 252 ex-Allegiant PDEW in 2010 at a relatively high average one-way fare of 

$212 each way.

While the data from Fargo's perspective indicates the proposed service would be successful, traffic data when 

ranked from the perspecitve of Dallas/Ft. Worth also indicates Fargo is a strong candidate for new service. Fargo 

ranks as the second largest market under 1,000 miles without nonstop service from Dallas/Ft. Worth.

Fargo-Dallas/Ft. Worth service could likely duplicate American Eagle's success in the Sioux Falls-Dallas/Ft. Worth 

market, which was inaugurated in April 2010. This service is the result of a minimum revenue gaurantee partially 

funded by a SCASD award in 2008. American Eagle began the service with one daily round trip and added a 

second round trip in December 2010. The market generated a load factor of 77.7% from January 2011 through 

April 2011 with the second round trip in place (April 2011 is the latest month for which T-100 data is available).
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

6

American Eagle's decision to add a second round trip less than a year after entering the market, coupled with a 

high load factor, even after the addition of a second round trip, is a strong indication the market has been 

successful and the Department's SCASD funding was effective. 

Fargo's average domestic ex-Allegiant fares are high, and stood at $205 each way in 2010 -- up from $193 in 

2009. This compares to an average domestic fare among all airports in the lower 48 United States of $157 in 

2010 and $143 in 2009. 

Frontier exited the Fargo market in February 2010, and attributed discontinuing Fargo service to the retirement of 

the Bombardier Q-400 fleet. Frontier's exit left Fargo with no low-cost carrier service with connections to markets 

beyond a hub – Allegiant carries only point-to-point traffic on its service from Fargo to Las Vegas, Phoenix/Mesa, 

Los Angeles and Orlando/Sanford.

Fargo is a relatively large market, but it is fairly isolated. 226,000 residents live within a one hour drive of the 

airport; 590,000 residents live within a two hour drive of the airport. Parts of eastern North Dakota and western 

Minnesota lie within one hour of the airport, and the two-hour catchment area extends into South Dakota. It is 

common for residents in parts of southern Manitoba, and Winnipeg, in particular, to use air service at Hector 

International Airport.
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

7

AIR SERVICE OVERVIEW

Catchment Area

226,000 residents live within a one hour drive of Hector International Airport, and nearly 590,000 residents live 

within a two hour drive of the airport. Fargo's catchment area varies somewhat based on the type of traveler and 

the traveler's destination. Allegiant's low fare service to leisure destinations, for example, attracts travelers from 

as far away as Winnipeg and other cities in Manitoba. High fare business travelers are generally not willing to 

drive as far if similar air service is available from an airport closer to their homes or businesses. More often than 

not, they simply pay the fare available from the closer airport. Nonstop service also tends to attract travelers from 

a broader catchment area, and the proposed Fargo-Dallas/Ft. Worth service would likely attract traffic from a 

broader area than traffic to a destination requiring a connection from Fargo or the airport closer to the traveler.

Exhibit 1: One- and Two-Hour Drive Times from Hector International Airport
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

8

Alternate Airports

Hector International Airport is the closest Airport to most residents within a one hour drive of the airport, and only 

the airport in Grand Forks is within a two hour drive of Fargo. Minneapolis/St. Paul is the largest airport in the 

Upper Midwest and is located 250 road miles from downtown Fargo. The drive time to the airport in 

Minneapolis/St. Paul can vary depending on highway congestion in the Minneapolis/St. Paul metro area – drive 

time can be considerably longer during the morning and evening rush hours. 

Exhibit 2: Location of Hector International Airport, One-, Two- and Three-Hour Drive Times from Hector International Airport

and the Locations of Other Airports of Significance in the Region
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

9

Fargo's Existing Air Service

Three network carriers, American, Delta and United, serve Fargo from four hubs. American serves Fargo from 

Chicago, Delta operates service to Minneapolis/St. Paul and Salt Lake City, and United serves Fargo from 

Chicago and Denver. In addition to the network carrier service, Allegiant operates less-than-daily service to Las 

Vegas, Los Angeles, Mesa/Phoenix and Sanford/Orlando. Allegiant operates its service as point-to-point service 

and does not connect traffic beyond these destinations as the network carriers connect passengers beyond their 

hubs.

The most recent addition to Fargo's air service was American, entering the market in April 2010 with three round

trips to Chicago. Frontier discontinued service in Fargo in February 2010 when it ended Fargo-Denver service.

Fargo has no southbound service, and the proposed Fargo-Dallas/Ft. Worth service would provide service in not 

only to Dallas/Ft. Worth, but it would also provide connections to many markets that currently require a double 

connection when traveling to or from Fargo.

Exhibit 3: Current Routes Operated from Hector International Airport
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

10

The number of departures per day, average seats per departure and seats per day by market and by carrier for 

December 2011 are displayed in Exhibit 4. Delta will account for 43.6% of Fargo's capacity in December 2011, 

United will account for 28.3% and American will account for 10.6% of Fargo's capacity. Collectively, the three 

network carriers will account for 82.6%, and Allegiant will account for 17.4% of Fargo's total capacity. 

Fargo's capacity by hub is highly concentrated at Minneapolis/St. Paul and Chicago. Delta's service to the Twin 

Cities accounts for 38.4% of total capacity and nearly half – 46.4% – of network carrier capacity. The United and 

American service to Chicago accounts for 24.6% of total capacity and 30.1% of network carrier capacity. The 

combined Minneapolis and Chicago service accounts for 76.5% of network carrier capacity in Fargo.

Exhibit 4: Departures per Day*, Seats per Departure and Seats per Day by Market and Carrier at Fargo – December 2011

* The number of departures per day is displayed in increments of sevenths (because there are seven days in a week). "2 6/7" is read as two

flights seven days a week with a third flight operated six of the seven days in a week. 

Carrier Destination

Departures 

per Day*

Seats 

per Departure

Seats 

per Day

% of Total 

Capacity

American ORD 2 6/7 50 142 10.6%

Total 2 6/7 50 142 10.6%

Delta MSP 6 5/7 76 511 38.4%

SLC 1 70 70 5.3%

Total 7 5/7 75 581 43.6%

United DEN 3 5/7 50 187 14.0%

ORD 3 6/7 50 190 14.3%

Total 7 4/7 50 377 28.3%

Network Carrier Total 18 1/7 61 1,101 82.6%

Allegiant AZA 4/7 150 87 6.5%

LAS 2/7 150 48 3.6%

LAX 2/7 150 48 3.6%

SFB 2/7 150 48 3.6%

Total 1 4/7 150 232 17.4%

Grand Total 19 5/7 68 1,333 100.0%

December 2011
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

11

Air Service Development Efforts

Hector International Airport officials have met on 16 occasions with nine airlines in the nine months between

October 2010 and June 2011 to discuss air service development and present business cases for new service. 

These meetings have included two meetings with American Eagle to discuss both existing Fargo-Chicago service 

and potential Fargo-Dallas/Ft. Worth service. Other meetings of note include four meetings with Alaska Airlines to 

discuss Fargo-Seattle service (Fargo is home to the largest base of Microsoft employees outside the Seattle area, 

and Microsoft's presence in Fargo generates significant Fargo-Seattle traffic).

Over the past five years, Fargo has been successful in attracting American Eagle to operate Fargo-Chicago 

service and successful with Allegiant for service to Phoenix/Mesa, Los Angeles and Orlando/Sanford. Alaska 

Airlines has expressed interest in operating Fargo-Seattle service, but does not have sufficient regional jet 

resources to operate the service in the short term.

Exhibit 5: Hector International Airport Air Service Development Meetings with Airlines – October 2010 through June 2011

2005 Small Community Air Service Development Grant

Hector International Airport was the recipient of a Small Community Air Service Development Grant in 2005 in the 

amount of $675,000. The grant was used for a minimum revenue guarantee for service on Delta Air Lines 

between Fargo and Salt Lake City. Delta has considered the service to be successful and operates one daily 

flight in the market using a 70-seat regional jet.

Airline

Headquarters 

Meeting

Sixel Consulting 

Airport Conference

Network 

2011

JumpStart 

2011

AirTran X

Alaska X X X X

American Eagle X X

Delta X X

Frontier X X

Southwest X X

Sun Country X

United X

US Airways X

Meeting Forum
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

12

Marketing and Promotion of Fargo's Air Service

Hector International Airport actively markets air service within the Fargo media market. The Airport's advertising 

and marketing stresses the convenience of flying from Fargo and highlights attractions at destinations served 

from Fargo. In 2011, the Airport has budgeted $120,000 to market air service. The 2011 media plan calls for 

$52,000 in television advertising, $21,000 in radio advertising, $34,000 in print advertising and $13,000 in on-line 

advertising. On-going annual advertising and marketing can be supplemented with destination-specific 

advertising to market new routes just prior to the inauguration of new service, and the proposed Fargo-Dallas/Ft. 

Worth service would be marketed separately from the Airport's planned marketing and advertising campaigns. 

Exhibit 6: Examples of Hector International Airport's Print Advertising 

 
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

13

AIR SERVCE DEVELOPMENT NEEDS AND DEFICIENCIES

Capacity Trends

Ex-Allegiant capacity at Fargo reached a peak in 2006, and was down 3.9% to 1,124 seats per day each way in 

2010. Delta provides more capacity in Fargo than any other airline, and when capacity data is analyzed by 

carrier, the combined Delta/Northwest capacity is down 34.2% since 2006 from 838 seats per day each way to 

552 seats per day each way. In addition to less capacity on Delta, Frontier exited the Fargo market in February 

2010 taking two daily departures operated with 74-seat aircraft out of the market. Without increased capacity by 

United and American's new Fargo-Chicago service in beginning in April 2010, Fargo's ex-Allegiant capacity would 

be down much more since 2006.

Exhibit 7: Network Carrier Seats per Day Each Way at Hector International Airport by Carrier – 2001-2010 (DOT T-100 data) 

This Section Continued on Next Page

103

716

805 819

758

818 838

713

665 645

552

9 1

138

3 5

114

172

258 283 308 332

366 350 359

434

830

977

1,077

1,041

1,126

1,170

1,079 1,106

1,142 1,124

0

200

400

600

800

1,000

1,200

1,400

1,600

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Seats per Day Each Way

American Delta/Northwest Frontier United Network Carrier Total
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

14

While Fargo's capacity was at a near all-time high in 2010 when Allegiant data is included, Allegiant serves only 

Las Vegas, Phoenix/Mesa, Los Angeles and Sanford/Orlando from Fargo. Unlike the network carriers, Allegiant 

only carries point-to-point traffic to the four destinations it serves from Fargo and does not provide connecting 

service to the larger worldwide route networks provided by the network carriers. Allegiant's service is not 

operated on a daily basis, and the Los Angeles and Sanford/Orlando service does not operate year-round.

Exhibit 8: Network Carrier and Allegiant Seats per Day Each Way at Hector International Airport by Carrier – 2001-2010 (DOT 

T-100 data)

This Section Continued on Next Page

830

977

1,077

1,041

1,126

1,170

1,079 1,106

1,142 1,124

7

5 4 5 9

116

208 220

830

977

1,077

1,041

1,132

1,224

1,139

1,221

1,350 1,344

0

200

400

600

800

1,000

1,200

1,400

1,600

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Seats per Day Each Way

(Network Carriers) (Allegiant) (All Carriers)
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

15

Frontier Discontinued Fargo Service in Early 2010

Frontier began service in the Denver-Fargo market in May 2008 and provided the only low-cost carrier service in 

Fargo that connected with an on-line network of destinations beyond a hub (Allegiant is also considered a lowcost carrier, but does not connect traffic beyond the four destinations it serves from Fargo). Unfortunately, 

Frontier exited the Fargo market in February 2010 and attributed the exit to a planned retirement of its 

Bombardier Q-400 aircraft.

Frontier's Fargo-Denver service logically connected 34 markets beyond the Denver hub when the service 

operated. While Delta, United and American can also provide service to most of these destinations with 

connections via their respective hubs, Frontier, as a low-cost carrier, generally offered lower fares (which were 

mostly matched by the network carriers) to the destinations served via Denver. Since Frontier exited the FargoDenver market, average fares have increased in the markets Frontier served.

Exhibit 9: Destinations Frontier Served via Denver when Frontier Operated Fargo-Denver Service
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

16

Traffic Trends

Fargo's ex-Allegiant domestic traffic peak corresponds with the capacity peak in 2006. In 2006, Fargo generated 

533,520 domestic ex-Allegiant origin and destination passengers. In 2010, the domestic ex-Allegiant traffic was 

down 3.7% versus 2006 to 513,590 origin and destination passengers. Fargo's international traffic is up 29.2% 

since 2006, and Allegiant's traffic is up nearly fivefold since its first year of Fargo service. 

Exhibit 10: Annual Domestic and International Origin and Destination (O&D) Passengers at Hector International Airport

Year-End Fourth Quarter 2001-2010 (DB1B data)

This Section Continued on Next Page

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

404,120 429,290 457,010 476,070 512,200 533,520 504,800 515,790 507,320 513,590

3,680 

30,960 

36,550 

77,970 

136,430 147,190 

19,820 

20,340 

21,890 

27,380 

31,530 

35,980 

40,630 

41,820 

41,180 

46,470 

Annual Domestic O&D (Ex-Allegiant) Annual Domestic O&D (Allegiant) Annual International O&D
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

17

When the annual origin and destination data is converted to passengers per day each way (PDEW), Fargo 

generated 704 domestic ex-Allegiant PDEW, 202 Allegiant PDEW and 64 international PDEW in 2010. 

Exhibit 11: Domestic and International Passengers per Day Each Way (PDEW) at Hector International Airport

Year-End Fourth Quarter 2001-2010 (DB1B data)

0

100

200

300

400

500

600

700

800

900

1,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

554 586 626 652

700 731 692 705 695 704

5

42

50

107

187 202

27

28

30 38

43

49

56

57

56

64

Domestic PDEW (Ex-Allegiant) Domestic PDEW (Allegiant) International PDEW
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

18

Leakage to Other Airports in the Region

Although Minneapolis is a 250 mile trip by car from Fargo, Hector International Airport loses 14.3% of the traffic 

generated in the airport's immediate catchment area to Minneapolis/St. Paul, where Delta operates a hub and 

low-cost carriers such as Southwest, AirTran, Frontier and Sun Country operate service to various destinations. 

Overall, Fargo retains just 75.5% of the traffic generated in its immediate catchment area. The addition of a new 

destination, such as Dallas/Ft. Worth, would likely enable Fargo to retain a higher percentage of the traffic 

generated in the region.

Exhibit 12: Airport Origin for Fargo Catchment Area Traffic January 2009 – December 2009 (March 2010 Leakage Study)

75.5%

5.3%

1 4.3%

0.5%

1.7%

1.9%
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

19

Domestic Fare Trends

The average ex-Allegiant domestic fare at Fargo was $205 each way in 2010. The average fare essentially 

returned to its 2006 level after peaking at $232 in 2008, but it is up from $193 in 2009. Over the last ten years, 

Fargo's average domestic ex-Allegiant fare was at its lowest point in 2003 when the average fare was $169. 

Versus 2003, the fare is up $36 each way or 21.6%.

While network carrier fare structures would likely not change significantly with the introduction of new network 

carrier service to a new destination, Fargo travelers would benefit as more of the lowest fares within existing fare 

structures are made available with the additional capacity.

Exhibit 13: Ex-Allegiant Passengers per Day Each Way (PDEW), Seats per Day Each Way and Average Domestic One-Way 

Fare at Hector International Airport – Year-End Fourth Quarter 2001-2010 (DOT T-100 and DB1B data)

This Section Continued on Next Page

830

977

1,077

1,041

1,126

1,170

1,079

1,106

1,142 1,124

554

586

626

652

700

731

692 705 695 704

$192

$177

$169

$182

$185

$205

$220

$232

$193

$205

$150

$175

$200

$225

$250

500

750

1,000

1,250

1,500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Average One-Way Fare

Seats and Passengers per Day Each Way

Seats per Day Each Way (Ex-Allegiant) Domestic PDEW (Ex-Allegiant) One-Way Domestic Fare (Ex-Allegiant)
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

20

International Traffic and Fare Trends

Fargo's international traffic has increased steadily over the last ten years to 64 PDEW in 2010. The average 

international fare stood at $534 each way in 2010 – down from a peak of $586 in 2008, but up 9.9% from 2009. 

The international fare in 2010 was essentially at its 2007 level of $529 when Fargo's international traffic was 56 

PDEW.

Exhibit 14: International Passengers per Day Each Way (PDEW), and Average One-Way International Fare at Hector 

International Airport – Year-End Fourth Quarter 2001-2010 (DOT T-100 and DB1B data)

2 7 2 8

3 0

3 8

4 3

4 9

5 6 5 7 5 6

6 4

$454 $459 $472 $460

$499 $499

$529

$586

$486

$534

$0

$100

$200

$300

$400

$500

$600

$700

$800

20

40

60

80

100

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Average One-Way Fare

Passengers per Day Each Way (PDEW)

International PDEW One-Way International Fare
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

21

STRATEGIC PLAN

Proposed New Route

Hector International Airport and its community partners in Fargo/Moorhead are requesting Small Community Air 

Service Development funds to support a minimum revenue guarantee for regional jet service on American Eagle 

between Fargo and Dallas/Ft. Worth. The proposed new service would benefit a mix of business and leisure 

travelers.

An American Eagle Embraer 145 Regional Jet at Hector International Airport

Goals

Fargo has four goals with its Small Community Air Service Development Grant proposal for service to Dallas/Ft. 

Worth.

 Better access to Dallas/Ft. Worth and the connecting markets served via Dallas/Ft. Worth, particularly 

connecting markets in Texas such as Houston, Austin, San Antonio, McAllen and markets in Latin 

America.

 Additional traffic in the Fargo-Dallas/Ft. Worth market and the markets connecting beyond Dallas/Ft. 

Worth.

 Lower fares in the local Fargo-Dallas/Ft. Worth market and the largest connecting markets beyond 

Dallas/Ft. Worth.

 Recapture catchment area traffic leaked to other airports.
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

22

Target Airline Support

Hector International Airport has met with American Eagle on two separate occasions in 2011 and American Eagle 

has expressed interest in the proposed Fargo-Dallas/Ft. Worth service. Like many other airlines, American Eagle 

has a policy of not writing letters of support for Small Community Air Service Development proposal given the 

number of requests it receives between the release of the RFP and the submission deadline. It should be noted 

American Eagle has used Small Community Air Service Development funds to begin service in two markets 

recently: Sioux Falls-Dallas/Ft. Worth and Springfield, IL-Dallas/Ft. Worth.

Fargo-Dallas/Ft. Worth Traffic and Fare Trends

The Fargo-Dallas/Ft Worth market size increased to an all-time high of 20.2 PDEW in 2010 and increased 19.6% 

from 16.9 PDEW in 2009. The traffic growth in 2010 is especially encouraging because the average fare declined 

only $5 or 3.0%, so the growth in traffic did not result from a significantly lower fare. 

Exhibit 15: Fargo-Dallas/Ft. Worth (IAH and HOU) Passengers per Day Each Way (PDEW) – Year-End Fourth Quarter (DB1B

data)

This Section Continued on Next Page

10.2

12.9

12.2

13.2 13.6

17.3

13.7

17.1

16.9

20.2

$218

$194 $195

$226

$207 $209

$220 $225

$179 $174

$0

$50

$100

$150

$200

$250

$300

0

5

10

15

20

25

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Average One-Way Fare

Passengers per Day Each Way (PDEW)

FAR-DFW PDEW FAR-DFW Average One-Way Fare
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

23

Analysis of quarterly data indicates Fargo-Dallas/Ft. Worth traffic peaked in 2010 in second quarter, and the 

average fare, while trending down slightly in 2010, remained at $170 in each direction in third and fourth quarter. 

A large downward trend in the fare would be unfavorable for discussions with American Eagle, and a trend back 

up in first quarter and second quarter 2011 data will improve the business case for Dallas/Ft. Worth service.

Exhibit 16: Fargo-Dallas/Ft. Worth (IAH and HOU) PDEW and Average Fare – Fourth Quarter 2008 through Fourth Quarter 

2010 (DB1B data)

This Section Continued on Next Page

18.7

13.4 15.6

20.5

18.0 17.7

23.6

21.3

18.4

$204

$197

$208

$142

$182 $182

$174 $170 $170

$0

$50

$100

$150

$200

$250

$300

0

5

10

15

20

25

2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4

Average One-Way Fare

Passengers per Day Each Way (PDEW)

FAR-DFW PDEW FAR-DFW Average One-Way Fare
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

24

Connecting Traffic and Revenue on American via Dallas/Ft. Worth

Fargo-Dallas/Ft. Worth service could connect with at least 100 markets American and American Eagle serve from 

their hub in Dallas/Ft. Worth. Fargo has no nonstop southbound network carrier service, and the proposed 

service would enable new single connections in many markets that cannot be reached from Fargo with a single 

connection. Of the 100 airports displayed on the map below, 45 of the airports now require a double connection 

to or from Fargo because they are not served nonstop from Minneapolis/St. Paul, Chicago, Denver or Salt Lake 

City. Markets that now require a double connection are displayed with red lines in the map below.

Phoenix International is an example of a company based in Fargo that could benefit from the proposed service. 

The company is a subsidiary of John Deere and designs electronic components for Deere equipment in Fargo. 

These components are manufactured in Torreon, Mexico, and travel is frequently required between Fargo and 

Torreon. The trip requires a double connection and consumes a full day for travel. The proposed service could 

eliminate one of the connections, cut travel time and increase productivity for Phoenix International's employees.

Exhibit 17: Non-Circuitous Markets American Could Serve with Fargo-Dallas/Ft. Worth Service (Red Lines Indicate Markets 

Currently Not Served Single Connections to/from Fargo via Minneapolis/St. Paul, Chicago, Denver or Salt Lake City).

This Section Continued on Next Page
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

25

The 30 largest Fargo markets American could flow via its hub in Dallas/Ft. Worth generated 230 ex-Allegiant 

PDEW in 2010; all markets that could flow via Dallas/Ft. Worth generated 252 ex-Allegiant PDEW. These 252 exAllegiant PDEW account for more than one-third – 35.8% – of the total 704 domestic ex-Allegiant PDEW Fargo 

generated in 2010 

Airports in the Los Angeles Basin and Phoenix constituted the two largest markets, and Dallas/Ft. Worth was the 

third largest market. Two other markets in Texas, Houston and San Antonio, are included in the ten largest 

markets, and Austin ranks as the thirteenth (13th) largest market. 68.3% of the traffic in these 30 largest markets 

originated in Fargo. 

Exhibit 18: Origin and Destination Passengers and PDEW in the 30 Largest Markets American Could Flow via Dallas/Ft. 

Worth (Excludes Allegiant Data) – Year-End Fourth Quarter 2010 (DB1B data)

This Section Continued on Next Page

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000

LAX/SNA/ONT/BUR/LGB - 1

PHX/AZA - 2

DFW/DAL - 3

MCO/SFB - 4

SAN - 5

ATL - 6

MIA/FLL/PBI - 7

IAH/HOU - 8

SAT - 9

CUN - 1 0

RSW - 1 1

TPA/PIE - 1 2

AUS - 1 3

HNL - 1 4

TUS - 1 5

ABQ - 1 6

OKC - 1 7

MSY - 1 8

CLT - 1 9

MEM - 2 0

TUL - 2 1

SJD - 2 2

PVR - 2 3

OGG - 2 4

PSP - 2 5

MBJ - 2 6

JAX - 2 7

MFE/HRL/BRO - 2 8

LIT - 2 9

ELP - 3 0

19,380

17,600

14,780

14,170

11,060

10,620

8,980

8,540

5,740

5,600

4,820

4,720

4,320

4,210

3,990

3,600

3,050

2,950

2,610

2,430

2,390

1,920

1,690

1,680

1,520

1,370

1,250

1,080

1,060

1,030

26.5

24.1

20.2

19.4

15.2

14.5

12.3

11.7

7.9

7.7

6.6

6.5

5.9

5.8

5.5

4.9

4.2

4.0

3.6

3.3

3.3

2.6

2.3

2.3

2.1

1.9

1.7

1.5

1.5

1.4

Annual O&D PDEW
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

26

The average one-way ex-Allegiant fare in the 30 largest Fargo markets American could flow via Dallas/Ft. Worth 

was $201 in 2010; all markets that could flow via Dallas/Ft. Worth generated an average fare of $212. 18 of the 

30 largest markets generated an average fare higher than $201; smaller markets tended to generate higher fares 

than the larger markets toward the top of the list. 

Exhibit 19: Average One-Way Fare in the 30 Largest Markets American Could Flow via Dallas/Ft. Worth (Excludes Allegiant 

Data) – Year-End Fourth Quarter 2010 (DB1B data)

This Section Continued on Next Page

$0 $50 $100 $150 $200 $250 $300 $350 $400

LAX/SNA/ONT/BUR/LGB - 1

PHX/AZA - 2

DFW/DAL - 3

MCO/SFB - 4

SAN - 5

ATL - 6

MIA/FLL/PBI - 7

IAH/HOU - 8

SAT - 9

CUN - 1 0

RSW - 1 1

TPA/PIE - 1 2

AUS - 1 3

HNL - 1 4

TUS - 1 5

ABQ - 1 6

OKC - 1 7

MSY - 1 8

CLT - 1 9

MEM - 2 0

TUL - 2 1

SJD - 2 2

PVR - 2 3

OGG - 2 4

PSP - 2 5

MBJ - 2 6

JAX - 2 7

MFE/HRL/BRO - 2 8

LIT - 2 9

ELP - 3 0

$177

$156

$174

$189

$172

$231

$227

$194

$183

$272

$176

$211

$177

$327

$167

$187

$205

$242

$253

$224

$169

$298

$275

$341

$202

$344

$237

$246

$307

$235

These Markets Generated an 

Average One-Way Fare of $201
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

27

Fargo is the second largest Dallas/Ft. Worth market under 1,000 miles without nonstop service from Dallas/Ft. 

Worth. Although Green Bay is a larger market, based on 2010 origin and destination data, Fargo's average fare 

was $29 higher in each direction, and Fargo's yield was 2.4 cents higher than Green Bay's yield. 

As American builds a larger route network from its Dallas/Ft. Worth hub, American will analyze underserved 

markets based on market size, fares and distance from the hub. A combination of local market size, average 

fare, yield, distance from the hub and connecting traffic will factor into American's forecast, and all five variables 

are aligned in Fargo's favor. It should be noted that no markets larger than the markets illustrated in the table 

below, which are less than 1,000 miles from Dallas/Ft. Worth, are without nonstop service.

Exhibit 20: Dallas/Ft. Worth Domestic Market Data: Distance, Passengers per Day Each Way (PDEW) One-Way Fare, Yield, 

Revenue per Day Each Way and Nonstop Service Indication (Markets Ranked by PDEW with #100 through #125 illustrated / 

Year-End Fourth Quarter 2010 Data (DB1B data))

Rank Market Distance PDEW

One-Way 

Fare Yield

Revenue per 

Day Each 

Way

Nonstop 

Dallas/Ft. Worth 

Service

100 JAC 1,046 27.8 $183 0.175 $5,078 Yes

101 SBA 1,315 27.6 $205 0.156 $5,654 No

102 CAK 1,023 27.1 $154 0.150 $4,166 No

103 CHA 695 25.8 $184 0.265 $4,764 Yes

104 GRB 932 25.4 $145 0.156 $3,685 No

105 RAP 835 24.2 $157 0.188 $3,795 Yes

106 FAY 1,052 23.2 $181 0.172 $4,209 Yes

107 ABE 1,308 23.1 $170 0.130 $3,939 No

108 TLH 767 22.8 $197 0.257 $4,490 Yes

109 ROW 435 22.7 $144 0.332 $3,280 Yes

110 ILM 1,106 22.4 $153 0.138 $3,422 No

111 PIA 673 22.3 $208 0.309 $4,636 Yes

112 SJT 228 22.1 $101 0.443 $2,225 Yes

113 FSD 737 22.0 $198 0.269 $4,367 Yes

114 GPT 500 21.9 $190 0.380 $4,163 Yes

115 BIL 1,080 21.4 $192 0.178 $4,104 No

116 MHK 431 21.3 $195 0.452 $4,145 Yes

117 AGS 874 21.3 $174 0.199 $3,702 Yes

118 FAR 967 20.2 $174 0.180 $3,506 No

119 ROA 1,012 20.1 $198 0.196 $3,990 No

120 BZN 1,163 19.8 $190 0.164 $3,764 No

121 AVP 1,308 19.8 $178 0.136 $3,507 No

122 SAF 550 19.7 $159 0.290 $3,133 Yes

123 GJT 772 19.5 $207 0.268 $4,043 Yes

124 BTV 1,510 19.0 $218 0.144 $4,146 No

125 MYR 1,048 18.6 $205 0.196 $3,821 No
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

28

American Eagle's Success in the Sioux Falls-Dallas/Ft. Worth Market

The Department awarded Sioux Falls a Small Community Air Service Development Grant in 2008 in the amount 

of $500,000 for service between Sioux Falls and Dallas/Ft. Worth. In April 2010, American Eagle began service 

in the Sioux Falls-Dallas/Ft. Worth market with one daily round trip (a second roundtrip was added in December, 

and a third roundtrip will be added on November 17, 2011). American Eagle's performance in the Sioux FallsDallas/Ft. Worth market could likely serve as a model for how Fargo-Dallas/Ft. Worth service could perform, but 

American would likely require a minimum revenue guarantee to consider Fargo-Dallas/Ft. Worth service.

As illustrated in Exhibit 22, American Eagle generated a load factor of 76.5% in the first month it operated the 

service, and the load factor grew to 83.7% in June 2010. In November 2010, American Eagle's load factor was 

86.2%, and in December, American Eagle added a second daily flight. Even with a second daily flight, the route 

produced a load factor of 84.2% in February, just two months after beginning the second flight. Over the 13 

months T-100 is available between April 2010 and April 2011, American Eagle's Sioux Falls-Dallas/Ft. Worth load 

factor was 78.4%.

Exhibit 21: American Eagle Sioux Falls-Dallas/Ft. Worth Flights per Day Each Way, Load Factor by Month and Average April 

2010-April 2011 Load Factor (DOT T-100 Data)

This Section Continued on Next Page

1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0

1.4

1.9

1.8

2.0

1.9

76.5%

81.0%

83.7%

72.8%

69.0%

74.4%

81.6%

86.2%

82.4%

73.9%

84.2%

79.0%

74.5%

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

0.0

0.5

1.0

1.5

2.0

2.5 Load Factor Flights per Day Each Way 

FSD-DFW Flights per Day Each Way FSD-DFW Load Factor Average April 2010-2011 Load Factor
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

29

American Eagle's Sioux Falls-Dallas/Ft. Worth service, which began in second quarter 2010, has resulted in 

additional traffic and lower fares between Sioux Falls and Dallas/Ft. Worth. In 2009, the market produced an 

average of 16.0 PDEW between second and fourth quarter 2010. Over the same period in 2010, the market 

produced an average of 24.3 PDEW, a 51.2% increase over 2009. The average fare fell 19.1%, from $237 to 

$192, between second quarter and fourth quarter 2010 compared to the same period in 2009. 

Exhibit 22: Sioux Falls-Dallas/Ft. Worth Passengers per Day Each Way (PDEW) and Average One Way Fare – First Quarter 

2008 through Fourth Quarter 2010 (DB1B Data)

This Section Continued on Next Page

21.4

17.4

16.4

14.6 14.5

15.9 16.1 16.1

15.2

26.6

23.0 23.2

$200

$240

$278

$257

$241

$222

$238

$251

$229

$178

$195

$205

$0

$50

$100

$150

$200

$250

$300

0

5

10

15

20

25

30

Average One-Way Fare

Passengers per Day Each Way (PDEW)

FSD-DFW PDEW FSD-DFW Average One-Way Fare
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

30

If the Fargo Dallas-Ft. Worth market size were to increase as the Sioux Falls-Dallas/Ft. Worth quarterly market 

size increased year-over-year with the introduction of nonstop service, Fargo-Dallas/Ft. Worth would increase to 

39.6 PDEW in second quarter 2010, 30.4 PDEW in third quarter 2010 and 26.4 PDEW in fourth quarter 2010. 

The actual Fargo-Dallas/Ft. Worth average market size was 21.1 PDEW from second quarter 2010 to fourth 

quarter 2010 and would have been 31.1 PDEW with the year-over-year Sioux Falls-Dallas/Ft. Worth market size 

growth. Historically, the Fargo-Dallas/Ft. Worth market size has been larger than the Sioux Falls-Dallas/Ft. Worth 

market size and could easily grow at least as much as the Sioux Falls market size grew with the introduction of 

nonstop service.

Exhibit 23: Actual Sioux Falls-Dallas/Ft. Worth PDEW, Actual Fargo-Dallas/Ft. Worth PDEW and Fargo-Dallas/Ft. Worth 

Market Size at Sioux Falls-Dallas/Ft. Worth Growth – First Quarter 2008 through Fourth Quarter 2010 (DB1B Data)

21.4

17.4

16.4

14.6

14.5

15.9

16.1 16.1

15.2

26.6

23.0

23.2

12.5

19.7

17.7

18.7

13.4

15.6

20.5

18.0 17.7

23.6

21.3

18.4

39.6

30.4

26.4

10

15

20

25

30

35

40

45

50

Passengers per Day Each Way (PDEW)

Actual FSD-DFW PDEW Actual FAR-DFW PDEW FAR-DFW PDEW at FSD-DFW Growth Rate
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

31

Grant Amendments/Alternate Strategies

Nonstop Fargo-Dallas/Ft. Worth service is the goal of the community's Small Community Air Service Development 

(SCASD) proposal. The community is proposing SCASD funding in the amount of $750,000 that will be 

supplemented with $275,000 in cash from community-based business and economic development organizations 

to offer a minimum revenue guarantee to American Eagle for Dallas/Ft. Worth service. An additional $25,000 of 

in-kind marketing and advertising contributions would supplement the cash incentives offered by the community 

for the service. Analysis of traffic and revenue data indicates the proposed service should be an appealing 

opportunity for American Eagle.

If a grant is awarded for Fargo-Dallas/Ft. Worth service, and the community is not successful in its effort to recruit 

American Eagle to Dallas/Ft. Worth, Hector International Airport would ask to Department to consider reallocation 

of the award funds for service to an alternate hub on a network carrier. Potential routes would include Seattle on 

Alaska, Houston on United, Phoenix on US Airways, Detroit on Delta, and Washington on United.

 
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

32

PROJECT IMPLEMENTATION, MONITORING AND FUNDING

Public / Private Partnerships

While Hector International Airport is the project sponsor and is a partner in the project, three other organizations 

are partners in the proposal.

 Greater Fargo-Moorhead Economic Development Corporation

 Fargo-Moorhead Convention and Visitors Bureau

 Chamber of Commerce of Fargo-Moorhead and West Fargo

Project Funding

Hector International Airport is requesting a Small Community Air Service Development grant of $750,000 for its 

proposed minimum revenue guarantee for service between Fargo and Dallas/Ft. Worth on American Eagle. The 

economic development, convention and visitors bureau and chamber of commerce organizations in the 

community have pledged $150,000 in cash to supplement the award, and Hector International Airport will provide 

$125,000 in cash to supplement the award. The total cash pledged by the community-based organizations and 

the Airport equates to 36.7% of the requested grant amount. In addition, the Airport will provide up to $25,000 of 

in-kind advertising and marketing for the proposed Dallas/Ft. Worth service

Exhibit 24: Sources and Types of Proposed Project Funding

.

Funding Source Grant Cash In-Kind Total

Department of Transportation $750,000 $750,000

Community $150,000 $150,000

Airport $125,000 $25,000 $150,000

Total $750,000 $275,000 $25,000 $1,050,000
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

33

Implementation Timeline

Hector International Airport will begin discussions with American Eagle immediately after learning the Department 

awards a Small Community Air Service Development grant for the proposed Fargo-Dallas/Ft. Worth service. The 

timing of the announcement, expected in September, will provide sufficient time to meet with American Eagle to 

continue previous discussions and provide time for American Eagle to perform further analysis of the market. 

Assuming discussions are successful in September and October and American Eagle decides to enter the FargoDallas/Ft. Worth market, the next major schedule change date which would provide sufficient time for advance 

bookings is the April 2012 schedule change. American Eagle's annual April schedule change typically occurs 

within the first seven days of the month. Once the service begins, Hector International Airport will remain in close 

communication with American Eagle to monitor the performance of the route.

Exhibit 25: Proposed Project Timeline

Activity/Project Milestone Estimated Dates

SCASD Grant Award Announcement September 2011

Execute Grant Agreement with DOT September-October 2011

Negotiate Minimum Revenue Guarantee with Airline October-November 2011

Announce Service January 2012

Publish Schedule January 2012

Market Route (Pre-Launch) January-March 2012

Monitor Advance Bookings January-March 2012

Adjust Marketing Plan Based on Advance Bookings January-March 2012

Begin Service Early April 2012

Market Route (Post-Launch) April 2012 and Beyond

Operate Service with MRG April 2012 - March 2014

Monitor Route Performance April 2012 - March 2014 and Beyond

Submit Grant Status Reports to DOT Quarterly 2Q 2012 - 1Q 2014
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

34

PROJECT MONITORING AND FINANCIAL CONTROL

Success Metrics

Four goals have been established to measure the success of the proposed project. The goals of the project are 

aimed at increasing traffic and lower fares. These goals are objective and can be measured by comparing yearover-year market size changes and changes in fares on a quarterly basis as DOT traffic and revenue data is 

published. Another measure of success will be American Eagle's load factor performance on the flights operated 

in the proposed market. High load factors (defined as load factors in the upper 70s or greater) will constitute 

traffic metric success. The amount of subsidy required by American Eagle will also provide an indication of the 

route's success.

Project Goals Success Metric

 Nonstop access to Dallas/Ft. Worth and less 

circuitous connections to markets served by 

American and American Eagle via Dallas/Ft 

Worth.

 Inauguration of nonstop Fargo-Dallas/Ft. Worth 

service.

 Stimulation of the Fargo-Dallas/Ft. Worth market 

size and the markets served by American and 

American Eagle via Dallas/Ft. Worth.

 Fargo-Dallas/Ft. Worth market size growth and 

market size growth in the markets that could 

connect to markets beyond Dallas/Ft. Worth.

 Lower fares in the Dallas/Ft. Worth market and the 

markets connecting beyond Dallas/Ft. Worth.

 Quarterly year-over-year declines in fares for the 

local Fargo-Dallas/Ft. Worth market and the 

largest markets beyond Dallas/Ft. Worth.

 Recapture catchment area traffic leaked to 

Minneapolis/St. Paul.

 Increased retention (and less leakage) of the 

traffic generated in Fargo's immediate catchment 

area.
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

35

Legal Sponsor

The Municipal Airport Authority of the City of Fargo, North Dakota, is the legal sponsor responsible for 

administering the program and Fargo's Municipal Airport Authority is a government entity.

Municipal Airport Authority of the City of Fargo, North Dakota

Hector International Airport

Box 2845

Fargo, ND 58108

Shawn A. Dobberstein, A.A.E.

Executive Director

701-241-1501 (office)

701-241-1538 (fax)

Financial Controls

As the sponsor, the Municipal Airport Authority of the City of Fargo, North Dakota and its governing body, the 

Municipal Airport Authority Board, will be the responsible parties for all fiscal matters and the Department's

reporting requirements. The Municipal Airport Authority Board is established as a public governing body. As a 

public entity, the Department can be assured that proper financial controls are in place to guarantee that the 

Department’s Grant will be used in accordance with any subsequent agreement. The Municipal Airport Authority 

Board understands that the Grant is a reimbursable grant, meaning the Airport is responsible for program 

expenditures and will submit invoices to the Department for reimbursement, based on a percentage of the total 

grant request.
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

36

APPENDIX A: REQUIRED SUMMARY INFORMATION

A. Applicant Information

 Not a Consortium

 Interstate Consortium

 Intrastate Consortium

 Community now receives EAS subsidy

 Community (or Consortium member) previously received a Small Community Grant

If previous recipient:

Date of Grant: 9/12/2005

Expiration Date of Grant: 9/12/2008

B. Public/Private Partnerships

Public

 Fargo Municipal Airport Authority

Private

 Greater Fargo-Moorhead Economic Development Corporation

 Fargo-Moorhead Convention and Visitors Bureau

 Chamber of Commerce of Fargo-Moorhead and West Fargo

C. Project Proposal 

 Marketing Upgrade Aircraft New Route

 Travel Bank Service Restoration Subsidy

 Surface Transportation Regional Service Revenue Guarantee

 Launch New Carrier Start-up Cost Offset First Service

 Study Secure Additional Service Other (explain below)

Hector International Airport requests Small Community Air Service Development funding to provide a 

minimum revenue guarantee for American Eagle service between Fargo and Dallas/Ft. Worth.
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

37

D. Existing Landing Aids at Local Airport

 Full ILS Outer/Middle Marker Published Instrument 

Approach

 Localizer Other (specify)

E. Project Cost

F. In-Kind Contributions**

For funds in lines 5a (Airport In-Kind contribution) and 5b (Other In-Kind contribution), please describe the 

source(s) of fund(s) for each.

(5a) Hector International Airport will provide marketing and advertising funding of up to $25,000 over two 

years to market the proposed Fargo-Dallas/Ft. Worth service.

G. Is this application subject to review by state under Executive Order 12372 

Process?

 a. This application was made available to the State under the Executive Order 12372 Process for review 

on (date):

 b. Program is subject to E.O. 12372, but has not been selected by the State for review.

 c. Program is not covered by E.O. 12372

H. Is this applicant delinquent on any federal debt?

 No Yes (explain)

Line Description Sub Total Total Amount

1 Federal amount requested $750,000

2 State cash financial contribution $0

Local cash financial contribution

3a Airport cash funds $125,000

3b Non-airport cash funds $150,000

3 Total local cash funds (3a + 3b): $275,000

4 TOTAL CASH FUNDING (1 + 2 + 3): $1,025,000

In-Kind contribution

5a Airport in-kind contribution** $25,000

5b Other in-kind contribution** $0

5 TOTAL IN-KIND CONTRIBUTION (5a + 5b): $25,000

6 TOTAL PROJECT COST (4 + 5): $1,050,000
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

38

APPENDIX B: COMMUNITY BACKGROUND

The Cities of Fargo and Moorhead

Fargo (which includes its twin sister city, Moorhead, MN, located 

just across the state line) is a diverse, stimulating and familyoriented city with all the amenities that make for a satisfying and 

fulfilling life.

Those with firsthand experience talk about Fargo-Moorhead's exceptional K-12 and higher education systems, 

world-class health care, affordable housing, low cost of living and myriad cultural and entertainment options. They 

mention stress, crime and traffic jams, too, but only to say there isn't much of that here.

Economic Overview

The population of the Fargo MSA is approximately 200,000 residents. Since 2000, the population has grown 

14.5%. The median household income is $45,315 and the median home cost in Fargo Metro Area is $140,680. 

Unlike many areas of the country hit hard by the recession, Fargo actually experienced growth in home values 

and has one of the lowest foreclosure rates in the United States.

Despite the economic downturn in the rest of the 

U.S., Fargo-Moorhead’s economy continues to 

expand. In 2009, companies in Fargo-Moorhead 

added more than 300 new jobs, mitigating small 

job losses in smaller businesses.

Fargo is the economic engine that drives the 

Upper Great Plains, and a high-tech center for 

development that continues to grow.

 Fargo is a technological, manufacturing, retail, and educational hub with a regional population of almost 

700,000.

• Fargo has grown more than 20% in the last 15-years – and local businesses have created 13,000 new jobs 

since 2000.
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

39

• The Forum recently wrote, “North Dakota’s exports grew by more than 34% [in 2007] alone, giving it one of the 

fastest rates of export growth in the country.”

• According to the Fourth Quarter 2008 job survey released by Manpower, Inc., the Fargo-Moorhead area 

enjoyed the fourth-strongest job market in the nation.

• The Los Angeles Times featured Fargo as an, “improbably stylish, worldly, even luxurious [city].”

• National Public Radio recently reported, “Quietly, Fargo has been flourishing. Fargo has steadily created jobs

and over the last few years has consistently posted one of the nation's lowest unemployment rates." 

• Among the major corporations with operations in Fargo are Microsoft, Bobcat, NAVTEQ, Case New Holland, 

Wells Fargo, US Bank, and Caterpillar.

National Rankings of the Fargo-Moorhead Business Climate:

• #5 in Forbes ranking of the Top College Towns for Jobs in May 2009. 

• #7 in Forbes Best Places for Business and Careers in March 2009. The index ranks cities according to cost of 

doing business, educational attainment of the population, income growth, projected job growth and net 

migration. 

• #1 city in North Dakota for entrepreneurial start ups, according to Business Week. 

• #8 in MSN and CareerBuilder.com's October 2008 list of the 25 Best Markets to Find a Job. 

• #24 out of the Top 100 Best Places to Live and Launch a Business, according to Fortune Small Business in

April 2008. 

• #9 in America's Top 50 Business Opportunity Metros for 2007 - Expansion Mgmt Magazine.
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

40

The Second Lowest Unemployment Rate in the United States

With an Unemployment Rate of Just 3.5%, Fargo Has the Second Lowest Unemployment Rate among all 

metropolitan statistical areas (MSAs) in the United States. In fact, the three MSAs in North Dakota, Bismarck, 

Fargo and Grand Forks, are among the four MSAs with the lowest unemployment rates in the United States. 

North Dakota's 3.0% statewide unemployment rate is the lowest among all 50 states.

Exhibit 26: May 2011 Unemployment Rates – U.S. Average and the 25 Metropolitan Statistical Areas with the Lowest 

Unemployment Rates

9.1%

2.9%

3.5% 3.7% 4.0% 4.2% 4.2% 4.4% 4.5% 4.6% 4.6% 4.6% 4.8% 4.9% 4.9% 4.9% 4.9% 4.9% 5.1% 5.1% 5.2% 5.2% 5.2% 5.3% 5.3% 5.3%

0%

2%

4%

6%

8%

10%

Unemployment Rate
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

41

APPENDIX C: LETTERS OF SUPPORT
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

42
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

43
 

 

Hector International Airport; Fargo, North Dakota

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

44