### Small Communities Air Serv ice Development Program Grant Application

Table of Contents

Executive Summary.............................................................................................................. .........2 Sponsor ........................................................................................................................ ................2 Community Partners ............................................................................................................. .......2 Project Goals.................................................................................................................. ..............2 Communities and Region Served .................................................................................................4 Existing Air Service ........................................................................................................... ............6 Fares and Market Leakage ....................................................................................................... ....7 Air Service History ............................................................................................................ ............9

Prior SCASDP Grant ............................................................................................................. .....10

Air Service Deficiencies and Goals............................................................................................. 11 American Eagle Service to MIA................................................................................................11

Incumbent Air Carriers ......................................................................................................... .....12

Previous Air Service Develo pment Marketing Activities.........................................................14 Public-Private Partnership: GNV Air Service Task Force ........................................................14 Proposed Two-Year Airline Marketing Campaign ..................................................................14 Project Monitoring and Grant Administration ........................................................................16 Sustainability................................................................................................................. ...............17

Conclusion ..................................................................................................................... ...............17 Exhibit A – Two Year Marketing Campaign............................................................................19 Exhibit B - Gainesville Regional Airport – Primary Service Area & Demographics ...........44 Exhibit C - Gainesville Region al Airport – Leakage Map .......................................................47 Exhibit D - Gainesville Regional Ai rport – Air Carrier History Charts................................48 Exhibit E - Gainesville Regional Airport – Airlin e Flight Frequency / Capacity as of August 25, 2010....................................................................................................................... ...................51 Exhibit F – Community Letters of Support ..............................................................................53

American Airlines.............................................................................................................. ........54 University of Florida – Offi ce of University Relations .............................................................55 SantaFe HealthCare, Inc. ....................................................................................................... ....56 Alachua County Tourist and Conventi on Bureau – Visit Gainesville.......................................57

Gainesville Area Chamber of Commerce..................................................................................58 Ocala/Marion County Economic Development Corporation ...................................................59 Heart of Florida Regional Coalition ..........................................................................................60

Clear Channel Outdoor – Ocal a / Gainesville Division.............................................................61

The Gainesville Sun............................................................................................................ .......62

WCJB-TV – ABC Affiliate .......................................................................................................6 3

Gainesville Television Networ k – NBC and CBS Affiliate ......................................................64

Entercom - WKTK-FM and WSKY-FM...................................................................................65 University of Florida – Divi sion of Multimedia Properties.......................................................66 Asterisk Communications, Inc................................................................................................... 67

The Ocala Star Banner.......................................................................................................... .....68 The Florida Independent Alligator.............................................................................................6 9

### Executive Summary

Sponsor

This application is s ponsored by the Gainesville-Alachua County Regional Airport Authority (GACRAA). GACRAA was created by the Florida Legislature to operate the Gainesville Regional Airport for the benefit of North Central Florida. The nine member Authority is appointed by the City of Gainesville (5 members), Alachua County (1 member) and the State of Florida (3 members). The operation of the Gain esville Regional Airport is entirely selfsupporting.

GACRAA is an eligible, legal en tity with the staff expertise to administer this grant.

GACRAA routinely contracts and administers federal and state infrastructure and planning grants worth millions of dollars annually.

GACRAA undergoes an annua l, independent audit of each proj ect and has a solid history of no findings and completing projects on time.

Community Partners
GACRAA has close ties to the region that it serves . Along with outreach to local businesses, GACRAA works directly with economic developm ent agencies in the region on air service priorities and marketing initiatives. These in clude: the Gainesville Area Chamber of Commerce;

the Gainesville Council for Ec onomic Outreach; The City of Gainesville Department of Economic Development, The Ocala/Marion County Chamber of Commerce and the Ocala/Marion County Economic Development Corporation. GACRAA is also a member of the technical advisory committee for the North Central Florida Regional Planning Council and represented on the Coordinating Board of the Heart of Florid a Regional Coalition.

Project Goals
GACRAA requests federal aid in the amount of $190,000 to assist with a comprehensive advertising and public awareness campaign.

The program aims to promote American Eagle service to Miami (MIA) scheduled to begin October 1, 2010 as well as the existing service offered by our two incumbent carriers, Delta

Connection service to Atlanta (ATL) and US Airways Express service to Charlotte (CLT).

Long-awaited service by American Eagle to MIA f ills an important niche and is expected to stimulate local air service demand. It is also hoped to have a very positive effect on area economic development. American Eagle provides a unique, third hub option and much desiredconnection to the population and cultural centers of south Flor ida, Latin America and the

Caribbean.

Competitive, convenient, commercial air service is vital to maintaining employment and continued economic growth in North Central Flor ida. Surrounding hubs are simply too far from regional commerce centers to adequately serve the local business community.

GNV leaks approximately 85% of potential traffic from its catchment area to competing hubs. Our research indicates many potential travelers ar e not adequately acquainted with the level of service, competitive fares and potential savings in time, mileage, tolls and parking fees offered by their regional airport.

The recapturing of a significant number of leak ed passengers supports additional capacity and frequency, perhaps by larger, more fuel efficien t aircraft. Either se rvice improvement would

serve to further stimulate the market.

GACRAA has constructed a two-year advertising and promotional campaign aiming to achieve the following two goals:

1. A minimum average of 90 passengers per da y on American Eagle’s GNV to MIA service for the last six months of the program. This represents 70%+ load factor on twice daily ATR72 aircraft configured for 64 passenger seats.

2. A combined increase of 80 enplaned pa ssengers per day for Delta Connection and USAirways Express (40 per day each) averaged over the last six months of the program. This represents a 21% increase in total enplanements over our CY2010 forecast and 23% increase over CY2009 average daily enplanements (per FAA -ACAIS). It is anticipated

that this increased demand will result in either an upgrade from 50-seat to 70-seat aircraft on four flights per day or addi tional frequency of two flight s per day aboard regional jet

aircraft or some combination of the above.

The above goals are specific, easily measured by airport management and easily confirmed through DOT/FAA sources.

Fares offered by all three airlines are now amon g the most competitive ever offered at GNV vs. competing hubs. This affords us a unique, but tim ely opportunity to raise awareness, recapture leaked traffic and solidify ai rport support through a carefully designed marketing campaign.

GACRAA has a golden opportunity to achieve afford able and sustainable service to MIA and a

third hub connection via American Airlines. Most all local organizations, including GACRAA have been negatively impacted by the economy, which is putti ng substantial pressure nonessential budget items. While GNV employs a nu mber of very effective, low cost marketing techniques, our advertising budget is less than $37,800 annually. Pub lic awareness is key to the success of this venture, which begins on Oct ober 1, 2010. Award of this SCASDP grant would be perfectly timed, and in our view , has a high probability of success.

### Communities and Region Served

The Gainesville Regional Airport (GNV) primar ily serves the citizens of Gainesville and Alachua County, the City of Ocal a and parts of Marion; Bradford ; Clay; Columbia; Gilchrist; and Levy counties. In 2008, The Boyd Group cal culated that GNV’s primary service area included 914,000 persons and generates approximately 1.2 million annual enplanements. Demographic data of the catchment area is shown in Exhibit B.

Gainesville Regional Airport’s Total Catchment Area and Primary Target Market Primary Target Market Total Catchment Area

Downtown Gainesville is located 4.9 miles from GNV. The City of Gainesville has a population of 124,491. (2008 UF estimate) and The Gainesville

MSA includes Alachua and Gilchrest counties and has a population of 261,000 ( 2009 est.). Downtown Ocala is approximately 42 miles from GNV. The City of Ocala has a popul ation of 54,801 (2008 est.).

The Ocala MSA includes Marion County and has a population of 328,000 (2009 est.).

Unlike many Florida locations, the North Central Florida is not a major tour ist destination. Arriving passengers are mainly traveling on business or have

ties to local communities. While GNV’s catchment area generates nearly a million potential air travelers annually, it covers a large area and most communities are relatively small and well dispersed. Gainesville and Ocala are, by far, the regions two largest cities. Gainesvill

e

Ocala

Gainesville and Ocala Metropolitan

Statistical AreasGainesville is home to the University of Florid a, one of the nation’s top universities with a student body of over 50,000 students. The area is a leading center for medical research,

advanced and critical medical ca re, engineering specialties and in surance services. The area is also experiencing a budding bio-technology industry.

Ocala is a regional center fo r manufacturing and distribution including specialty vehicles, aerospace and building products. It is also home to some of the most productive thoroughbred

horse farms in the world.

Competitive, convenient, commercial air service is vital to maintaining employment and continued economic growth in North Central Flor ida. Surrounding hubs are simply too far from regional commerce centers to adequately serve the local business community.



## 4 4 4

Drive Times from downtown Gainesville to Other Airports Jacksonville International Airport (JAX)

Orlando International Airport (MCO) 124 miles, 2 hr. 15 min. Tampa International Airport (TPA) 136 miles, 2 hrs. 25 min.



## 4 4 4

Drive Times from downtown Ocala to Airports Jacksonville International Airport (JAX)

Orlando International Airport (MCO) 86.5 miles, 1 hr. 25 min. Tampa International Airport (TPA) 103 miles, 2 hrs.

### Existing Air Service

GNV is currently served by two regional carriers averaging 10 daily departures, combined.

US Airways Express (operated by Piedmont Airlines ) provides 26 flights w eekly to US Airway’s

Charlotte hub. Aircraft load factor s average approximately 83% for the 2 nd quarter of 2010.

Delta Connection provides 44 flights weekly to Delta’s Atlanta hub aboard 50 seat Canadair Regional Jet aircraft. Aircraft load factors average approximately 90% for the previous twelve

months.

American Eagle (operated by Executive Airlines will begin twice daily service to American’s Miami hub on October 1, 2010. The service will average 128 seats daily aboard 64-passenger ATR72, turboprop aircraft. The ATR72 was operated by successfully from GNV by Delta to ATL for many years. It has good customer acceptance vs. other, smaller turbo-props.

GACRAA has provided a two-year incentive package worth $207,800 to American Airlines to assist with start-up costs. These include waiver of landing f ees and exclusive use counter and office space and marketing support. The community was unable to provide any

revenue guarantees. Miami
Beginning October 1, 2010 Atlanta Charlotte

Gainesville

### Fares and Market Leakage

The average net One Way fare from GNV in the first quarter of 2010 was $200.90 vs. $165.97 nationally, 21% above the national average. GNV’s average one-way fare

differential for CY2009 was $47.77 vs. the national average (Aviation Data Miner – Boyd Group). GNV experiences significant leakage to Orlando (MCO), Jacksonville (JAX) and Tampa (TPA). GNV leaks the largest number of passengers to

MCO. Orlando is the region’s foremost tourist gateway with vigorous competition and the lowest per passenger yields in the Southeast. All of these compe ting airports are intensively served by low cost carriers (LCCs). The GNV fare differential with these LCC’s, particul arly on shorter notice travel, is much greater than the national average differential.

GNV’s catchment area has a popula tion of almost 1 million and generates 1-1.2 million annual enplanements (Boyd Group Study, 2008). Leakage to GNV’s top 100 destinations is estimated at 79.2%. Ticket yields from large, competing airports are am ong the lowest in the southeast, which affects potential yields and profitability from GNV. While these competing airports may

offer lower fares and considerable air servic e options, they are not conveniently located, particularly for business travelers. Survey data indicates that wh ile our citizens prefer the ease of flying from GNV, many “leak” in search of discount fares and direct flights.

The MSA’s of Gainesville and Ocala have a combined population of 589,237. GNV market share and enplanements have been declining however, due to high fares and limited flight options. Taking into account the population density and the prox imity of competing airports, GACRAA believes GNV should capture at least 0.55 enplanements per person in the combined MSA. This amounts to 324,080 passengers per year. We believe this is an achievable level which will support the intensity of air service desired by the business community.Gainesville Regional Airport Specific Leakage Rates Top 25 Markets

0 10,000 20,000 30,000 40,000 50,000 60,000

ATL LGA PHL ORD BOS DCA BWI EWR LAS DFW LAX JFK DEN IAD DTW BNA MSP SEA SFO PIT PHX IND BDL ORF STLPassengers Lost Annually

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%Percentage Lost

PAX Lost % Lost GNV leaks over 900,000 passengers annually to the top 100 markets.

Leakage to Gainesville Region al Airport’s Top 25 Markets



### Yield and Fare Comparison Table

Enplaned Passengers - Year Ending March 31,

2010 Average
OneWay

Fare Change

vs. Prior

Year Fared Avgerage

Yield Change

vs. Prior

Year Airport

117,260 $200.03 -6% 18.11

t -6% Gainesville, FL

13,135,050 $125.52 -6% 11.29

t -6% Orlando, FL

2,537,050 $142.73 -3% 13.95

t -4% Jacksonville, FL

6,961,430 $133.04 -4% 12.09

t -5% Tampa, FL GNV Comparison to Similar SE

R i l 117,260 $200.03 -6% 18.11

t -6% Gainesville, FL

186,160 $179.30 -15% 18.22

t -17% Tri Cities, TN

180,400 $217.67 -11% 21.04

t -11% Augusta, GA

152,430 $238.50 -7% 22.87

t -6% Montgomery, AL

115,490 $239.64 0% 19.71

t 0% Jacksonville, NC

114,980 $179.67 -5% 15.47 Melbourne, FL -5% t 16.44

t New Bern, NC 109,330 $188.77 -6% -7%

Mead & Hunt, Inc.

### Air Service History

Despite continued growth in population and dema nd for air service, air traffic has generally

declined since the decline and eventual cessa tion of Eastern Airlines service in 1991. EA provided mainline service to its Miami hub and consistently enplaned more than 10,000 passengers per month until1989. Eastern was the dominant carrier at GNV for many years. Since then, several carriers have provided S outh Florida service utili zing 19 seat turbo-prop aircraft and smaller piston engine aircra ft. Service was conducted under code share arrangements with US Air and Continental Airlin es and without code share arrangements. These services tapped a small niche market only. While the public has a strong de sire for South Florida service, these smaller aircraft did not have good public acceptance and the services did not offer significant connecting opportunities. We believe EA’s previous success carrying large numbers of passengers to their Miami hub bodes we ll for American Eagle MIA hub service.

At its peak in 1990, GNV enplaned 216,724 passenge rs and was serviced by seven different carriers. (Please see carrier history shown in Exhi bit D.) Delta mainline service began in early 1991 and was very strong until 1997. DL mainlin e service to ATL was phased out in 1998, in favor of concurrent Delta Connection service pr ovided by Atlantic Sout heast Airlines. USAir

introduced mainline service to CLT in 1989. Like wise, mainline service was discontinued in favor of concurrent US Air Express Se rvice (operated by Mesa Airlines) in 1994.

Since the ascendance of the LCC’s, Gainesville’s trend has been one of declining enplanements and consolidation. Today, only two carriers re main and commercial enplanements have stabilized at around 130,000 per year.

Gainesville Regional Airport Enplanement History

1961 - 2009

0 50,000 100,000 150,000 200,000 250,000

1961 1963 196 5 1967 196 9 1971 19 73 1975

1 977 197 9

1 981 19 83 1985 19 87 198 9

1 991 199 3 1995 19 97 1999
2 001 2003
2 005 2007 2009

ENPLANED PASSENGERS Delta Connection and

Piedmont Airlines enter GNV (10/1/85) Delta mainline starts (6/1/91) Eastern Airlines terminates service (1/18/91)

Continental

Connection and

Northwest Airlink enter

GNV (Sept. 2004) Northwest Airlink exits

GNV (May 2006) Continental Connection exits GNV (June 2007)

US Airways eliminates mainline jet

service to CLT

(11/1/93) Eastern Airlines begins

service to GNV in 1950 Delta eliminates mainline jet service to

ATL (12/6/97)

### Prior SCASDP Grant

GACRAA was previously awarded a $660,000 SC ASDP grant in September of 2003. The project goals were as follows:

1. Provide additional frequency and destinations

2. Bring airfare relief to Gainesville

Project components included revenue guarantees , awareness, advertising, promotion and communications, airline meetings and site visits, common-use ticketing kiosks, and airline equipment and rolling stock.

GACRAA proceeded to prepare route analyses and forecasts of underserved hub markets and arranged meetings with top airline prospects. Air Service agreements were executed with two new entrants, Northwest Air Link service operated by Pinnacle Ai rlines and intrastate service provided by Gulfstream Inte rnational Airlines.

Northwest Airlines began twic e per day GNV-MEM service in Se ptember 2004, utilizing 50 seat CRJ aircraft. Response to the service was stro ng, resulting in lower overall fares and a 20% increase in enplanements at GNV. Northwest generated 80%+ load factors to Memphis (MEM) during the fourth quarter of 2005 through April 2006. Service was terminated when Northwest repositioned regional jet aircraft to replace larger aircraft types in larger markets. Northwest explained to GNV management that they were pleas ed with the load factors from GNV but that financial conditions required the company to retrac t routes and focus on traditional core markets in the Midwest. Northwest filed for Chapte r 11 bankruptcy protections on September 14, 2005. As Northwest eventually merged with Delta, the dominant carri er at GNV, MEM service was not likely to continue rega rdless of the outcome.

Gulfstream International Airlines secured a code sharing arrangeme nt with Continental Airlines and began GNV-MIA service with three round trips per weekday and one on Sunday. The airline also provided two round-tr ips per weekday to TPA. A ll service was provided by 19 passenger, EE1900D aircraft. Gulfstream exited GNV in June of 2007. Gulfstream management cited high fuel and operating co sts as the primary reason for termination. Aircraft were repositioned to serve EAS subsidized routes in Pennsylvania and elsewhere. High operating costs resulted in higher than anti cipated O&D fares to MIA. In addition, poor acceptance of the

Be1900D aircraft and Continenta ls very limited connections from MIA and TPA resulted in lackluster demand. Most flights required two stops, which is unaccept able to most travelers. Although the service was highly va lued by a small segment of lo cal business travelers, we believe it captured only a fragment of the GNV- MIA potential. American’s use of larger ATR72 aircraft, its extensive hub connections in MIA and its intention to be competitive with service from surrounding hubs, should allow AA to capture a large share of demand. The full amount of the SCASDP grant was essentially expended and the grant was terminated.GACRAA considers the project to be an unqualified success. The project goals were met but

outside factors led to eventual cessation of se rvices. Load factors on the GNV-MEM route were strong. Competition from a third hub carrier decreased air fares across the board and traffic increased by 20%.



### Air Service Deficiencies and Goals

American Eagle Service to MIA
South Florida is one of the regions top travel de stinations and has been a priority of our air service development efforts for many years. GACRAA has received numerous requests and support letters for MIA service (see attached). While the primary mode of trav el to south Florida is by automobile, drive-time to Miami is in excess of 5 hours. Our community has actively

courted American Airlines since 1995. Now that American Eagle MIA service has been announced, we must make every e ffort to ensure it becomes pr ofitable quickly, as it may be many years before we have the opportunity again.

Several regional employers have facilities and busine ss interests in south Florida and vise versa. The University of Florida has more than 51,000 students, 18,000 employees and alumni from 130 countries. A large percentage of these live or have ties in the Miami area. The University also has significant relationships with institutio ns in Latin America and the Caribbean. Many associated with the University have an inte rest in scheduling and attending conferences, activities and major sporting events in Gainesvill e, but the drive time from the Miami area can be prohibitive.Incumbent Air Carriers
GNV’s Delta Connection and US Airways Expre ss carriers both utilize 50-seat, Canadair regional jet aircraft. Both ai rlines currently enjoy good load factors from GNV, but operating

costs for 50 seat aircraft remain hi gh and profitability is greatly affected by spikes in fuel prices. Also, airline yields at GNV are significantly lo wer than many other smaller communities in the

southeast. This is due in la rge part to the fierce competitive environment at surrounding hubs within driving distance (alb eit inconvenient) of GNV.

The future of 50 seat aircraft may be in doubt due to their high cost per seat mile. These small units of capacity offer a limited number of discounted seats, putting GNV at further disadvantage.

GACRAA believes the community must support service by larger, more fuel efficient aircraft at acceptable frequencies in order to en sure stable, effective and profitabl e air service in the future. In 2007, GNV lost daily service to Miami by Con tinental Connection (ope rated by Gulfstream Airlines) due to high fuel and operational costs associ ated with its 19 se at, BE-1900 aircraft.

Gulfstream chose to relocate these aircraft to EAS subsidized routes in Pennsylvania and the

Northeast.

GNV leaks a disproportionate number of passengers travelling to the Midwes t, Mid Atlantic and New England regions. With their higher population de nsities, these regions have been identified as a good opportunity for our incumbent carriers to garner additional traffic. More capacity with additional discount seating is necessary to capture this market.

Gainesville Regional Airport Average Annual Load Factors by Fiscal Year

FY 2005 - 3Q FY2010

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

FY2005 FY2006 FY2007 FY2008 FY2009 1Q FY2010 2Q FY2010 3Q FY2010Total Enplaned and Deplaned

All AirlinesGainesville Regional Airport Load Factor by Airline FY2005 - 3Q FY2010

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

FY2005 FY2006 FY2007 FY2008 FY2009 1Q FY2010 2Q FY2010 3Q FY2010Total Enplanded and Deplaned

Delta US Airways Northwest Continental

With present GNV load factors in excess of 85%, it is anticipated that a modest increase in

demand will result in one or more of the fo llowing from Delta and US Airways Express.

4 Enable the use of larger, more fuel effici ent aircraft, i.e. 70-seat regional jets or narrow body aircraft, one or more flights to ATL and CLT. This is important to continued service viability. These aircraft also have greater acceptance by passengers

and their use should further stimulate the market.

4 Provide additional flight frequency. This will result in reduced connection times,

reduced overall travel time and more conve nient travel options, which should further

stimulate the market.

4 Improve load factors for existing service. Maintaining viability of airline service to smaller communities is very difficult, particularly in the current economic and competitive environment. A successful advertising and public awareness campaign

will serve to make all of our carriers financially stronger a nd less likely to exit the

market.

While the region is best served by, and is best able to support servic e to large system hubs, consumers prefer the reliability of direct service. Significant tra ffic gains may also assist us in

our efforts to attract direct GNV service to select O&D markets. Potential destin ations include the New York area, Baltimore/Washington area, Boston, Dallas and Philadelphia.

### Previous Air Service Development Marketing Activities

Over the past five years GACRAA has been very focused on air service development, despite the weakened economy. GACRAA employs a full-ti me marketing profe ssional to design and execute advertising and public aw areness programs. These include mass media advertising, web advertising, promotional materials, area trade show s, special events, visits to major employers and outreach to community and civic organiza tions. The airport has employed some unique, low-cost but effective technique s to reach air travelers.

GACRAA has a “Low Fare Alert” system that continually e-mails over 7,000 voluntary

subscribers. Subscribers ar e notified of discount fares available from GNV to popular

destinations.

GACRAA has also implemented a “GNV Road Wa rrior” program that encourages frequent business travelers to register their trips, be recognized, and comment on local service needs and amenities. This program serves to en courage loyalty and repeat business.

Airport staff works closely with area agencies and Chambers of Commer ce to survey citizens and business to better identify trav el patterns and preferences. Su rvey data is combined with data from professional air service consultants to prepare and presen t proposals to major airlines. Both the airport CEO and Marketing and Pub lic Relations Manager, and even Authority members make visits to airline headquarters and attend popular airline ne tworking meetings to present air service proposals.

While GACRAA employs a number of very effectiv e marketing techniques, its total advertising budget is only about $24,000 annuall y. Airport resources have be en greatly impacted by the economy and are putting substantial pressure on marketing and non-essential budget items.

Public-Private Partnership: GNV Air Service Task Force

With the assistance of the Gainesville and Ocala Chambers, the airport organized an air service task force responsible for helping promote air se rvice in the region. The Task Force was created

in March of 2010. Members consist of some of the airport’s most frequent fliers and leadership at economic development agencies in Alac hua and Marion Counties. Members represent companies and organizations, including the numer ous departments, colleges and organizations affiliated with the University of Florida. Exactech, RTI Biologics, GE Healthcare, AvMed HealthPlans and a growing number of technology companies in the area participate in this grassroots effort to improve and promote re gional air service. Add itionally, Ocala is well represented with members from the Chamber, Economic Development Corporation, the Ocala Star-Banner and several financial institutions. All of the organizations assist with delivering key air service messages and news to their members and contacts (internet sites, publications, e-mail blasts, and community outreach).



### Proposed Two-Year Airline Marketing Campaign

The proposed marketing campaign encompa sses $270,150 annually in advertising for Gainesville Regional Airport’s ne w air carrier, American Airlines, and the existing carriers, Delta Air Lines and US Airways. Approximate ly half ($135,075) will be dedicated to the promotion of the new American Eagle GNV-MIA serv ice and half will be used to promote allthree airlines. Additiona lly, the local media outlets have dona ted $106,000 in adver tising to help promote the new American Eagle GNV-MIA route and our existing air car riers (Appendix B). VisitGainesville (VCB) has dedicated $25,000 cash to advertise the new service, and the University of Florida (UF) and AvMed H ealthPlans are providi ng combined $20,000 cash contribution (Appendix B). Marketing efforts also include barter agreements ($19,150) between the airport and media outlets/organiz ations to promote air service.

The proposed campaign would begin in January with marketing efforts continuing year-round for two years. The Audiences targeted include the primary market area in Gainesville, the University of Florida population (faculty, staff, students, alumni and visitors), the business community, higher-income households and retirement communitie s in the Ocala market. There is significant potential to recapture business and leisure traffic in Marion Count y. Efforts targeting UF will be concentrated in the Spring and Fall of 2011 an d 2012, the busier periods of the year for the

Gainesville area. Traffic associated with the University of Florid a semesters and sports activities presents the opportunity to reach more people (business and leisure travelers) in Gainesville and recapture traffic in the primary ma rket area currently lost to airp orts in other cities outside of GNV’s market. While marketing initiatives will focus on those time periods, efforts will continue year round and will also include count ies surrounding Gainesville and Alachua County. A wide range of media outlets will be used to di versify marketing efforts, including print, radio, television, outdoor advertising, new media to include web and social media, UF campus advertising and event outreach (Exhibit A). The fr equency of advertising and variety of outlets will successfully reach a broad spectrum of dem ographics with an emphasis on reaching business travelers, high-income households and the UF population. Radio and tele vision coverage areas and outdoor advertising will r each counties surrounding Gainesville including Marion County (Exhibit A).

Total Two-Year Public Awareness Campaign $565,300

Summary of Community Support University of Florida (cash for AA marketing support) $15,000
AvMed Health Plans (cash for AA marketing support)) $5,000
Airport marketing support for all airl ines ($40,000/yr x 2 years) $80,000
Total Community Cash Match $100,000

Media Advertising Match (in-kind) $212,000
Visitors and Convention Bureau Miami market advertising for AA $25,000
Barter agreements (advertising trades with airport) $38,300
Less total community support of campaign $375,300
Federal Funds Requested $190,000

Please Note: Additional Airport S upport of American Airlines
Service Fee abatement for American Airlines ($103,900/ yr x 2 years) $207,800 (landing fees and exclusive use terminal space)

* See complete program details in Exhibit A.

Should American Eagle Terminate Service before the Marketing funds pub licizing their service are expended, the remaining portion of the DOT funds for this item would be returned.GACRAA would propose to continue the por tion of the marketing program promoting

incumbent carriers and GACRAA will supply the local match.



### Project Monitoring and Grant Administration

GACRAA staff will administer this grant. The current staff has experience with more than thirty million dollars of infrastructure and planning pr ojects over the last seven years with individual projects ranging from a few thousand dollars up to approximately $11 million. This includes the previous SCASDPP grant which was billed out in 2005. A separate account will be set up for this project and all project invoi ces will be approved by three sta ff members prior to payment. These include the Project Manager, the Grants and Contracts Administrator and the Airport CEO. All records and documentation will be kept and provided to the DOT in accordance with the grant agreement.

The Project Manager will prepare monthly progr ess reports, reimbursement requests and other data and reports as required by DOT.

Progress reports shall include the following:

4 Status report on all marketing activitie s undertaken, including purchases of advertising time, target market/message a nd coverage, run schedules and invoices. A summary report of all special events at tended and promotional activities will be included. The Project Manage r shall keep copies of advertisements, scripts, recordings, etc. and submit samples to DOT as required. Expenditures and materials for activities supporting Amer ican Eagle MIA service will be separated and tracked separately from those suppor ting all three carriers.

4 Status of community support f unds and in-kind contributions

4 Status report of current ai r service flight schedule an d equipment capacity with any changes from the previous month highlighted.

4 Status report on changes in passenger e nplanements by carrier and by individual flight

4 Enplanements as of the beginning of the project shall be compared with monthly statistics from at least two years prior.

4 Feedback and comments received from customers regarding the adequacy of the new American Eagle service, including fares, sc hedules, equipment and customer service.

4 Status report on progress to secure additiona l air service capacity, to include airline meetings, site visits and communications.

4 Any other items required by DOT.

Should American Eagle Terminate Service before the Marketing funds pub licizing their service are expended, the remaining portion of the DOT funds for this item would be returned.GACRAA proposes to continue th e marketing program for the incumbent carriers and GACRAA will supply the local match.



### Sustainability

As noted, GNV’s catchment area has a population of almost 1 million and generates 1-1.2 million annual enplanements (Boyd Group Study, 2008) The MSA’s of Gainesville and Ocala have a combined population of 589,237 and have been growing in excess of the state average. Estimated leakage from the catchment area for calendar year 2009 is 87% and estimated leakage from the combined MSA is 78%. GNV needs only to capture a small portion of this leakage to sustain its marketing program.

Should GACRAA reach its project goals of 80 addi tional passengers per day on existing carriers, plus 90 passengers per day on future American Eagle service, total a dded enplanements would be 62,050 annually. This is an increase of 48.8% above CY2009 levels and 44% above projected 2010 enplanements. Please recall that Northwest’s entry in 2004 with twice daily MEM service created a sustained increase in enplanements of more than 20% with 80+% load factors at termination. We believe American Eagle service to MIA has even greater potential due to the unique connections available from MIA and the high O&D demand that exists between the two

communities.

GACRAA is able to accommodate the anticipated increa se in passengers w ithout a proportionate increase in operating costs. GNV derives approximately 42% of its annual operating revenue from automobile parking fees a nd rental car concessions. If su ccessful, the gross revenue from

these activities is conserva tively expected to rise by $500,000 - $600,000 per year. Should GACRAA achieve only one of its goals, the resu lting revenue increase will allow us to significantly increase our advertising budget a nd continue the public awareness campaign. Community media outlets have noted that they w ill continue to support us with local match and

“in-kind” services.



### Conclusion

GACRAA is seeking federal funds in the amount of $190,000 to assist with a comprehensive, two-year public awareness campaign. GACR AA has a treasured opportunity to achieve

affordable and sustainable service to MIA and connection to a third hub. Public awareness is key to the success of Am erican Airlines venture, which begins on October 1, 2010. The proposed PA campaign also aims to assist our existing carri ers capture substantial traffic lost to larger airports. Most local organizations, and particul arly GACRAA, have been impacted by the slow economy, which has put substantial pressure non- essential spending. While GNV employs a number of very effective, low cost marketin g techniques, our adver tising budget is less than $37,800 annually and cannot effectively reach our intended audience. GACRAA has therefore

enlisted the assistance of a nu mber of organizations, businesse s and media outlets to provide federal match and assist with a comprehensive public awareness campaign. The project can be readily accomplished as the carrier is already secured. American Eagle has announced service and a detailed marketing plan has already been developed. The contra ct can be efficiently

administered as well. GACRAA has considerable experience as a grant sponsor and our request is for marketing support only. No revenue gua rantees are required an d GACRAA has alreadycommitted to providing all other incentives over the two-year period. Awa rd of this SCASDP grant would be perfectly timed, and in our view, has a high probability of success.

### Exhibit A – Two Year Marketing Campaign1Gainesville Regional AirportTwo-Year Marketing PlanExhibit A2QuartersMonth Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.Outdoor Advertising - Gainesville & OcalaRadio - WSKY & WKTKRadio - WXJZ, WBXY, WKZYRadio WUFT & WRUFTV - WCJB, WGFL, WNBW, Cox CableAlligator - Student NewspaperGainesville Sun and gainesville.com (print and online)Ocala - (newspaper, retirement comm, magazines)North Central Florida Business ReportPhonebooks and UF Directory/GuideQuarter 1Quarter 4Quarter 3Quarter 2Marketing Campaign Annual ScheduleOutdoorPrint/NETRadioTVDirectory(Duplicate Year 1 in Year 2)3Marketing Campaign – Funding DetailsPublic Awareness Campaign Program Budget Year 1 Year 2 TotalCash ExpendituresClearchannel Outdoor(Gainesville & Ocala) $20,000 $20,000North Central Florida Business Report (print) $4,000 $4,000Ocala - magazines (high-income households) $4,000 $4,000Ocala - retirement communities(newsletters/outreach) $2,000 $2,000Phonebooks,UF Directory/Guide,Chamber Guides $2,000 $2,000The Alligator - StudentNewspaper $10,000 $10,000The Gainesville Sun (newspaper)and gainesville.com $10,000 $10,000The Ocala Star-Banner $6,000 $6,000TV20 WCJB with production $10,000 $10,000TV - WGFL CBS-4, WNBW NBC-9 & Cox $20,000 $20,000Radio - WKTK &WSKY $10,000 $10,000Radio - WUFT Public Radio,WRUF Rock 104 $15,000 $15,000Radio - WXJZ Jazz, WBXYnews/talk, WKZY $10,000 $10,000Misc. (Newsletter printing, Website updates, etc.) $2,000 $2,000Social Media outlets $4,000 $4,000On-campus advertising $8,000 $8,000Events & Promo items (on and off-site outreach) $8,000 $8,000Total$145,000 $145,000$290,000Proposed GACRAA Contribution($40,000) ($40,000)80,000Community Contribution($10,000) ($10,000)20,000Total Cash Contributions($50,000) ($50,000)50,000Federal Share Requested$95,000 $95,000 $190,0004Community Support and Total AmountMedia Outlet Match Annually (in-kind)Clearchannel Outdoor (Gainesville & Ocala) $20,000 $20,000The Alligator - Student Newspaper $10,000 $10,000The Gainesville Sun (newspaper) and gainesville.com $10,000 $10,000The Ocala Star-Banner $6,000 $6,000TV20 WCJB with production $5,000 $5,000TV - WGFL CBS-4, WNBW NBC-9 & Cox $20,000 $20,000Radio - WKTK & WSKY $10,000 $10,000Radio - WUFT Public Radio, WRUF Rock 104 $15,000 $15,000Radio - WXJZ Jazz, WBXY news/talk, WKZY $10,000 $10,000Total Match Annually from Outlets$106,000 $106,000$212,000Barter AgreementsUF Performing Arts $3,000 $3,000Hippodrome State Theater $1,650 $1,650Home Magazine - high income households $2,400 $2,400Gainesville Today Magazine 1/8 page - high income $4,200 $4,200Good Life Community Magazine $2,000 $2,000CBS WGFL $3,500 $3,500WSKY $2,400 $2,400Total Trade Annually$19,150 $19,150$38,300Miami Market Advertising for American Eagle to GNV ServiceAlachua County Visitors and Convention Bureau$25,000$25,000Total Public Awareness Campaign $295,150 $270,150$565,3005Community Support and Total AmountTotal Two-Year PublicAwareness Campaign $565,300Summary of Community SupportUniversity of Florida (cashfor AA marketing support) $15,000AvMed Health Plans (cash for AA marketing support)) $5,000Airport marketing support for all airlines ($40,000/yr x 2 ye$80,000Total Community Cash Match $100,000Media Advertising Match (in-kind) $212,000Visitors and Convention Bureau Miami market advertising$25,000Barter agreements (advertisingtrades with airport) $38,300Total community support of campaign$375,300Federal Funds Requested $190,000Please Note: Additional airport support of American Airlines serviceFee abatement for American Airlines ($103,900/ yr x 2 yea$207,800(landing fees and exclusive use terminal space)6Outdoor Advertising – Clearchannel for Ocala• Ocala typical 25 GRP posters7Outdoor Advertising – Clearchannel for Gainesville• Gainesville typical 25 GRP posters8Radio – WSKY & WKTKWKTK includesthe larger circleand WSKY coversthe smallercircle.• WSKY and WKTK have179,000 listeners!• Both stations have largecoverage areas thatmore than cover theairport’s market area.• They are widely knownas a regional radiostation covering NorthCentral Florida.• They also reach keyaudiences the airport istargeting (next slide).9Radio – WKTK demographics10Radio – WSKY demographics11Radio - WXJZ Smooth Jazz• Smooth Jazz 100.9reaches adults 35-64with a secondaryaudience on Bob andSheri of Women 25-54.• 29 percent of thelisteners have ahousehold income of$50,000-$75,000 and29 percent are$75,000+12Radio - WBXY The StarWBXY The Star 99.5reaches Adults 35 plus.41 percent have ahousehold income of$75,000+24 percent have ahousehold income of$50,000-$75,00013Radio – WUFT & WJUF National Public Radio forNorth Central Florida• WUFT-FM/WJUF is aNational Public Radio(NPR) station for NorthCentral Floridafeaturing popularnews/talk andinformation andreaches ages 25-64,skewing slightly towardfemales (100,000 wattsignal broadcast fromGainesville on 89.1).14Radio – WRUF Rock 104• Rock 104 WRUF isa 100,000 watt activerock format stationwith a primaryaudience of menages 25-54.• This station coversGator football/basketball games.The campaignincludes spots duringthe pre/post-gameshow and during thegames.15Radio – WKZY 106.9WKZY-FM 106.9 KZY The BestMix of the 80s, 90s and Today!Coverage:Alachua, Marion,Gilchrist, Dixie, Levy, Bradford,ColumbiaPrimary Cities:Gainesville, Ocala,Lake City, Starke, High Springs,Chiefland, Trenton and Cross CityAudience Target:Women, Men(18-49)Listenership:41,40016TV – CBS and NBC My11The GainesvilleTelevision Network(GTN) providestelevisionprogramming to131,100 householdsin the GainesvilleDMA and 420,500households in thetotal viewing area onthree networkaffiliates: WGFLCBS4, WNBW-NBC9and WMYG-MY11.17TV – CBS and NBC• The GainesvilleTelevision Network isadding local news startingthis Fall, which will give theNorth Central Florida areatwo local TV news stations(WCJB TV20 page 18).• The GTN will debut its‘GTN News’ broadcasttwice daily on all threenetworks and will featuresome familiar faces to localviewers.18TV – ABC WCJB TV2019Gainesville/Ocala104,541 HH’sGainesville Zone | Cox67,837HH’sZip Codes: 32601, 32603,32605, 32606, 32607, 32608,32609, 32611, 32615, 32618, 32641, 32653, 32669Western Zone | Communicomm4,246HH’sZip Codes: 32008, 32615, 32626, 32628, 32643OcalaGainesvilleWestern ZoneWestern ZoneWestern ZoneGainesville ZoneOcala ZoneIndicates Cox Media ZonesUniversity of Florida Zone | Cox4,488HH’sZip Codes: 32601 (7500 residents)Ocala Zone | Cox27,970HH’sZip Codes: 34470, 34471, 34472, 34474, 34475, 34476,34479, 34480, 34482, 34488Cox Communications, aFortune 500 Company, isthe nation’s third largestcable television company.TV – Cox Communications20SportsNews MusicNews MusicEntertainment & InformationEntertainment & InformationKidsTV – Cox Communications21Print/Online – Gainesville Sun/gainesville.com• Gainesville.com,gatorsports.com andgainesvillemoms.com, afamily of sites as part ofthe Gainesville Sun – aNew York Timesbranch, receives morethan 1 million uniquevisitors monthly.• Gainesville.com is the#1 local site inGainesville and reachespeople in our entireservice area while alsoreaching visitors.• The campaign willinclude presence inprint and online.193,000 DailyReaders – SeeAppendix B for theGainesville Sun’sletter of support.22Print/Online – Ocala Star-Banner• The Ocala Star-Banner/Ocala.com is the communityportal for the Ocala/Marion County region with 7 high trafficand targeted websites combined into one huge site thatcovers "Everything Ocala."• Covering news, sports, entertainment, classifieds,employment, automotive, real estate and more online andprint, they offer a number of different options for the airportto reach out to Marion County area residents.• 200,000 daily readers – see Appendix B for letter ofsupport from the Ocala Star-Banner publisher.23Print/Online – The Independent Florida AlligatorThe Alligator is circulated on theUniversity of Florida campus atlocations determined to be hightraffic areas of classroom,administration, residential andservice buildings. It is alsocirculated at Santa Fe College.With a circulation of 35,000, theAlligator primarily targetsstudents. However, it alsoreaches a significant number ofUF faculty, staff, alumni, arearesidents and visitors.6,000 daily visitors toalligator.org as well24North Central Florida Business Report25Additional Targeted Marketing InitiativesOCALA RETIREMENT COMMUNITIES (NEWSLETTERS)Ocala has a large retired population and 26 retirementcommunities. The airport will place ads in some of thearea retirement newsletters and magazines as well as participate in events at the retirement communities.OCALA MAGAZINES (HIGH HOUSEHOLD INCOME)There is a significant horse industry in Marion County and an opportunity to reach outto that specific industrythrough equestrian magazines (i.e. the Florida Horse). Additionally, we will be advertising in the Ocala Chamberdirectory and high-income household magazinessuch as the Ocala Magazine and Ocala Style.SOCIAL MEDIA OUTLETSIt has increasingly become more of a challenge to reachcertain demographics through traditional media outlets.Social media sites and internetadvertising allow businesses to easily and cost effectively reach target audience.The airport will also include advertisements on sites suchas Facebook to obtain more supporters and createmore opportunities for on-going, two way communication.ON-CAMPUS ADVERTISINGA significant part of the airport’s effort will include a focus on students, faculty and staff at the University ofFlorida. Vehicle advertising (bus wraps) and on-campus advertising options in high-traffic areas will allow us toeasily reach this target audience inaddition to the Alligator advertising.EVENTS AND PROMO-ITEMSParticipation in community events and large events at UFwill allow for direct, personal outreach to promote allairlines and continue to develop theairport’s “Low Fare Alert” program.There are numerous opportunitiesincluding UF sporting events (UF homecoming parade, football and basketball games, etc...), large charitableevents, Chamber business events (Gainesville and Ocala), and the Biotechnology tradeshow in Alachua.

### Exhibit C - Gainesville Regional Airport – Leakage Map• Approx. 85 percent ofthe residents in our totalservice area use otherairports.GNVGenerationRankMarket Passengers Lost Percentage Lost1ATL 48,532 77.4%2LGA 52,752 92.1%3PHL 48,546 91.7%4ORD 46,796 88.6%5BOS 32,330 79.5%6DCA 28,562 73.2%7BWI 31,140 81.2%8EWR 27,912 80.8%9LAS 28,019 85.3%10DFW 27,574 84.1%Market Specific Leakage RatesGainesville Regional AirportSoutheast66.5%Mid Atlantic82.5%New England81.5%Midwest82.5%Rocky Mtn84.9%Southwest80.0%Far West80.1%Northwest78.2%Rank Market GNVGenerationCurrent GNV Leakage Pct Lost1 ATL 62,669 14,137 48,532 77.4%2 LGA 57,289 4,537 52,752 92.1%3 PHL 52,962 4,416 48,546 91.7%4 ORD 52,789 5,993 46,796 88.6%5 BOS 40,643 8,313 32,330 79.5%6 DCA 39,037 10,475 28,562 73.2%7 DFW 32,788 5,214 27,574 84.1%9 EWR 34,527 6,615 27,912 80.8%10 BWI 38,327 7,187 31,140 81.2%GNV’s Top Markets

### Exhibit D - Gainesville Regional Ai rport – Air Carrier History Charts

### Exhibit E - Gainesville Regional Airpor t – Airline Flight Frequency / Capacity as of August 25, 2010GNV Airline Flight Frequency/Capacity as of August 25, 201 0

Carrier Freq. Seats Freq. Seats Freq. Seats Freq. Seats Freq. Seats Freq. Seats Freq. Seats Freq. Seats

Delta Connection 5 250 7 350 7 350 7 350 7 350 6 300 5 250 44 2200 USAirways Express 3 150 4 200 4 200 4 200 4 200 4 200 3 150 26 1300

*Alll flights aboard 50 seat CRJ-200 aircraft Sun Mon Tues Wed Thurs Fri Sat Weekly Total

### Exhibit F – Community Letters of Support2121 SW 19 th Avenue Road . Ocala, Florida 34471

352.867.4020

Allen Parsons August 27, 2010

Publisher

Aloha Ley

Associate Director Small Community Air Service Development Program (SCASDP)

Dear Ms. Ley,

The Ocala Star-Banner fully supports th e Gainesville-Alachua County Region al Airport Authority’s request for a Small Community Air Service Development grant to he lp support the new American Eagle Airlines service between Gainesville and Miami and the existing local ai r carriers, Delta Air Lines and US Airways. The StarBanner recognizes the importance of air service to ec onomic development and the quality of life for residents and visitors in our region.

We want to help ensure the success of the new American Airlines service between Gainesville and the Miami hub. We are already working closely with the Airport Authority and are committed to matching funds spent. The lack of air service to South Florida and adequate connecting service to international destinations has forced many to commute to and from other airports or make the exhausting 4+ hour trip to Miami by auto. Additionally, American’s extensive domestic and inte rnational route structure from Miami will provide new travel options and a greater level of frequency.

Due to the critical importance of qua lity air service for our region, the Star-Banner is willin g to match funds spent with our organization to help American Airlines establish its new route between GNV and MIA. With nearly 200,000 daily readers in print and online, we believe our donation for advertising will help make the new

service successful.

I urge you to proceed with approving the Airport Authority’s request for a grant to assist with marketing efforts for the next two years. If I can offer additional insights, please don’t hesitate to contact me

Sincerely,