Proposal Under the Small Community

Air Service Development Program

Docket: DOT-OST-2011-0119

Sponsoring Entity: Savannah/Hilton Head International Airport

Dun & Bradstreet Number: 059534529000

2-digit Congressional District Code: 01

July 28, 2011

Savannah & Hilton Head – Served by One Great Airport
Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July, 2011

Executive Summary

The Savannah/Hilton Head International Airport (SAV) 

serves the communities of Savannah, GA and Hilton Head 

Island, SC. According to the Bureau of Transportation 

Statistics, SAV currently has one of the highest average 

airfares in the nation.

SAV, by filing this grant application, seeks an award of 

$400,000. from the Department of Transportation with the 

following goals and objectives in mind: 1. Acquire a low-cost 

carrier 2. Reduce airfares 3. Increase capacity 4. Reduce 

leakage.

The grant ($400,000), along with contributions from 

Savannah/Hilton Head International Airport and the 

communities of Savannah and Hilton Head Island would 

allow SAV to pursue new carriers and assist with the 

tremendous start up costs incurred with any new service.

High fares at SAV continue to drive significant traffic to 

neighboring Jacksonville, FL. Southwest Airlines recent 

start-up in Charleston, SC poses and additional threat of 

losing traffic to the north.

SAV has defined its deficiencies and is optimistic that with 

the benefit of the grant it will be able to successfully compete 

in the SC/GA/FL market.
Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July, 2011

Community Overview

Diverse Regional Economy

Tourism

Distribution & Logistics

Manufacturing

Paper Products

Military

Area’s Largest Employers

Gulfstream Aerospace

o Over 6,000 employees

o Recent expansion will add an 

Additional 1,000 jobs in 2012

o #1 Corporate Travel Customer

The Port of Savannah

o Fourth-busiest and fastest-growing

container terminal in the U.S.

o Supports nearly 300,000 jobs

and nearly $80 billion in taxes

o East Coast Distribution center

for several major corporations.
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

This & That

Mitsubishi Power Systems recently opened 

construction a new manufacturing facility.

A project that brings $325 million in investment 

and more that 500 jobs.

Gulfstream Aerospace is currently in the fifth year of a 

seven-year, $400 million Long Range Facilities Master Plan.

Portuguese manufacturer EFACES’s has invested in a 

power transformer manufacturing plant in nearby Rincon,GA.

Since 2009, nearly a dozen industries either 

located new facilities in the area or 

announced major expansions, bringing close 

to $500 million in investment and the 

promise of as many as 1,500 new jobs. 

Military Involvement & Presence

Home to two bases employing more than 

42,000

Savannah/Hilton Head International awarded 

contract by the US Marines to act as receiving 

port to all incoming trainees to Paris Island 

Marine Corp Station, SC.

o Approximately 20,000 trainees and 10,000 family and 

friends arrive annually.

Over 50,000 military personnel & dependents currently in 

Savannah area
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

Tourism – Savannah Area

Tourists had direct spending of $1.7 Billion

More than 6.5 million visitors annually

14,964 Rooms - Luxury Hotels/Historic Inns

One of the Largest National Historic Districts 

Tourism – Hilton Head Island

 2.5 million overnight visitors annually

 Tourism brings over $1 billion in 

 economic impact to the area

 9,000 rooms: home/villa rentals and 

 resort hotel accommodations

 Travel and tourism is the #1 economic 

 driver for Hilton Head Island and for the 

 State of South Carolina

Savannah Accolades

*Savannah Convention & Visitors Bureau

"Top 10 Cities in the US and Canada" - Travel + Leisure Magazine 

"A merica's Most Mannerly City" - Charleston School of Protocol and Etiquette

"#7 of the Top 10 Cities in the US and Canada" - Travel + Leis ure Mag azine

"15 Coolest Cities in North America" - MSN.com

"Best Southern City" - Southern Living Mag azine

"Top 10 American Travel Destination" - Conde Nas t Traveler Mag azine

"Top 25 City for the Arts" - American Style Mag azine

"50 Great Cities to Visit in America" - London Daily Teleg raph

"A merica's Prettiest Town's" - Forbes Traveler

"Top Ten Cities in the USA" - Condé Nast Traveler Magazine

“ Top 100 Places to Retire” - Money Magazine 

Hilton Head Accolades 

Hilton Head/Bluffton Chamber of Commerce

Top 10 Islands of North American – Conde Nast Travler

Top 10 Family Beach – MSNBC.com

Top 10 Best Family Destinations – Southern Living Magazine

“Think top-of-the-line spas, world-class resorts, tennis courts 

and golf courses galore, upscale shopping, and snazzy 

restaurants....Hilton Head is a family-friendly destination with 

miles of uncrowded beaches -- The Miami Herald

Over 770 stories/mentions and broadcast segments on Hilton 

Head Island last year resulting in over 378 million impressions.
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

Air Service Overview

Historical Service

Since realizing a record number of enplanements in 2005 & 2007, air

traffic has decreased at SAV by double digits through 2009 with a 

very slight increase in 2010 (See Exhibit 1) Contributing factors were: 

loss of service by AirTran, loss of non-stop destinations by current 

carriers, reduction of flights, and capacity reductions. 

Exhibit 1: Enplaned passengers past five years
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

Source: Savannah/Hilton Head International Airport

The airport growth in 2011 remains slightly above flat, based on: 

current airline fuel prices, airline’s continued reduction of capacity, 

and the lack of any additional air service by a current legacy carrier or 

new entry by a low cost carrier. (See Exhibit 2).

Exhibit 2: Enplaned Passengers YTD as of June 2011 vs 2010

Source: Savannah/Hilton Head International Airport

The charts below show the enplanement history by carrier (See 

Exhibit 3) and also the capacity by destination (See Exhibit 4).

Exhibit 3: Passenger Enplanement History by Carrier

2006 2007 2008 2009 2010

Allegiant 1,122

American Eagle 32,754 34,185 45,401 52,665 49,445

AirTran 89,839 94,940 62,450

Charter 321 366 383 790 1,897

CO Express/Express Jet 77,456 77,869 87,758 74,225 71,114

Delta 348,371 343,265 356,262 247,429 241,441

DL Connection/Comair 80,663 81,431 69,102 48,627 11,012

DL Connection/Chautauqua 5,169 9,591 3,893 11,459 40,263

DL Connection/ASA 20,064 19,164 4,885 59,165 62,067

DL Connection/Shuttle 

America 1,859 3,070 1,155 7,596

DL Connection/Pinnacle 660 11,323 45,211

DL Connection/Sky West 255
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

DL Connection/Compass 5,749

Independence Air 603

Northwest 5,889 13,307

NW Airlink/Pinnacle 30,559 18,172 52,925 23,480

United Express Jet 2,351 18,762 16,196

UA Express/ASA 48,920

UA Express/Mesa 68,273 87,669 71,374 48,467 19,821

UA Express/SkyWest 48,897 28,757 25,877 1,131

UA Express/Air Wisconsin 21,873

UA Express/Trans States 9,438 29,236 14,917

US Airways 51,849 58,636 49,370 11,448 3,141

US Air Express/PSA 15,574 38,928 44,766 45,702 47,225

US Air Express/Air Wisconsin 18,978 7,354 4,375 14,576

US Air Express/Mesa 66,070 56,750 38,758 68,842 69,174

US Air Express/Piedmont 430 957 590 8

US Air Express/Republic 2,986 19,933 50,036 61,406 64,578

US Air Express/Chautauqua 6,585 1,859 149

967,210 1,010,815 988,929 820,426 835,728

Exhibit 4: Airline and Destination Capacity History (average seats per week)

3Q06 3Q07 3Q08 3Q09 3Q10

American Airlines Dallas/Ft Worth, TX 793 980 1,027 1,330 1,050

American Airlines Miami, FL 448 448 448

Continental Airlines Cleveland, OH 466.7

Continental Airlines Newark, NJ 1,164 1,087 1,204 988 983

Continental Airlines Houston Intercontintal 900 1,017 1,000 933 933

Delta Air Lines Atlanta, GA 10,095 9,738 9,137 8,502 9,071

Delta Air Lines Boston, MA 350 367

Delta Air Lines Cincinnati, OH 817 926 700 650

Delta Air Lines Washington-National, DC 17

Delta Air Lines Detroit, MI 738

Delta Air Lines New York-La Guardia, NY 950 1,150 983 967 1,000

Air Tran Airways Atlanta, GA 2,730 2,379 1,638 Srvc End 10/08

Northwest Airlines Detroit, MI 700 350 350 359

Northwest Airlines Memphis, TN 100 67 1,050

Northwest Airlines Minneapolis, MN 50 33 17

United Airlines Washington-Dulles, VA 1,321 1,083 1,353 1,267 1,464

United Airlines Chicago-O'Hare, IL 1,557 1,451 1,387 1,152 1,219

US Airways Boston, MA 83

US Airways Charlotte, NC 4,221 5,378 4,297 4,193 4,441

US Airways Washington-National, DC 148 222 76 86 150

US Airways New York-La Guardia, NY 50 567 371 507

US Airways Philadelphia, PA 241 623 566 644 795

US Airways Pittsburth, PA 48 216

Total 52,641 55,243 52,155 44,053 44,585

Source: APGDat Internet-Based Aviation Data as of 07/01/2010
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

Current Service

SAV has non-stop service to eleven airports in ten cities, with hub 

connections to every major airline (see Exhibit 5 & Exhibit 6).

Exhibit 5: Current Air Service Map as of 07/25/2011

Exhibit 6: Current Air Service as of July 29, 2011

Airline Destination

Equipment 

Type Flights/Day Seats/Day

American Eagle Dallas/Ft Worth, TX Regional Jet 3 150

American Eagle Miami/FL Turbo-prop 1 64

Continental Express Houston-Inter, TX Regional Jet 3 150

Continental Express Newark, NJ Regional Jet 3 150

Delta Air Lines Atlanta, GA Narrow Body 10 1400

Delta Connection Atlanta, GA Regional Jet 1 50

Delta Connection Detroit, MI Regional Jet 2 100

Delta Connection New York-La Guardia, NY Regional Jet 3 150

United Express Chicago-O'Hare, IL Regional Jet 3 150

United Express Washington-Dulles, VA Regional Jet 4 200

US Air Express Charlotte, NC Regional Jet 8 636

US Air Express Philadelphia, PA Regional Jet 1 76
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

Source: Savannah/Hilton Head International Airport 8/1/10

Efforts to Improve Air Service

In 1997 the Savannah Hilton/Head International Airport approved an 

air service incentive package. The plan offered $50,000 in marketing 

assistance for any new or additional flights into the Savannah/Hilton 

Head area. The Airport was able to secure air service from 

Continental Airlines and United Airlines the following year.

In 1999, the Airport successfully lobbied for and received operating 

slots at the Chicago O’Hare Airport. It was the first time a non-airline 

had received the slots. This resulted in non-stop service provided by 

United Express.

In 2004/2005, NW Airlink added service to Memphis, Continental 

Express added service to Cleveland, and Independence Air began 

service to Washington DC, all due to the incentives offered through 

the Small Community Air Service Grant awarded to The 

Savannah/Hilton Head International Airport.

In 2010, The Savannah Airport Commission amended the incentive 

package (see Exhibit 7) in an effort to add a low cost carrier and 

increase capacity.

Exhibit 7: 2010 Air Service Incentive Package

Air Service Development Program.

Objective: The Air Service Development Program (ASDP) of the 

Savannah Airport Commission (SAC) outlines the range 

of options available to the Airport Staff in seeking to 

develop new air service.

Introduction: The SAC has established the ASDP as a tool for the 

Staff to use in developing new airline services by offering 

incentives to incumbent and new entrant airlines for 

additional new air service at the Savannah/Hilton Head 

International Airport.
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

The Program:

1) For new, nonstop service to an existing destination 

currently being served by an incumbent carrier, the 

following ranges of options are available:

Marketing assistance of $50,000 per flight up to a 

maximum of $150,000.

2) For new, nonstop service by an incumbent or new 

entrant carrier to a new location not currently being 

serviced:

Marketing assistance of $50,000 per flight up to a 

maximum of $200,000.

Waiver of one or more of the following fees/rents for a 

period of twelve (12) months.

~ Landing fees for the expanded portion of the service.

~ Ticket counter, Holdroom, gate and apron fees/rents as 

a result of the expanded service.

~ Common area charges (baggage claim, concourse, 

public areas) associated with the expanded service.

Assistance with start-up costs (installation of counter, 

communications, signs, computers, etc.) not to exceed 

$100,000.

3) For new, nonstop service by an incumbent or new 

entrant carrier to at least two new locations not currently 

serviced:

Marketing assistance of $50,000 per flight up to a 

maximum of $250,000.

Waiver of one or more of the following fees/rents for a 

period of from twelve (12) to twenty-four (24) months.
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

~ Landing fees for the expanded portion of the service.

~ Ticket counter, Holdroom, gate and apron fees/rents 

as a result of the expanded service.

~ Common area charges (baggage claim, concourse, 

public areas) associated with the expanded service.

~ In-kind contributions such as Terminal advertising, 

Airport advertising, local marketing assistance from 

local Chambers of Commerce and Convention & 

Visitors Bureaus.

~ Assistance with start-up costs (installation of 

counters, communications, signs, computers, etc.) not 

to exceed $200,000.

~ Assistance with ground handling on a no cost basis 

to SAC.

Documentation: To document the ASDP incentives negotiated with 

each incumbent or new entrant carrier, the Staff will 

prepare a written outline of the incentives to be provided 

with the requirement that the carrier’s official 

representative sign a copy of the outline which will be 

placed in the SAC files for documentation. The 

Commission will be copied on the outline of incentives.

Air Service Needs

1. Lower Air Fares 

2. Increase Capacity

3. 5

th Largest Destination – Boston – Currently without non-stop 

service

4. Access to Southwest Airlines Atlanta market & beyond

5. Reduce Leakage
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

High Air Fares:

According to the Bureau of Transportation Statistics, SAV has 

continually ranked in the top five airports with the highest average 

airfares. And in 2009, showed the highest percentage (16%) increase 

in the nation. Exhibit 8 illustrates the large discrepancy between 

SAV’s average fare and the national average.

Exhibit 8: Average Airfares (2005-2009) SAV vs US Average

312 371 372 386 396

306 328 360 330 306

0

100

200

300

400

500

3Q05 3Q06 3Q07 3Q08 3Q09

Savannah/Hilton

Head

National

Average

Capacity Losses:

Since 2008 SAV has experienced a dramatic reduction in capacity. 

The number of daily flights has either remained constant or was 

slightly elevated, but the carriers have reduced the equipment size.

Exhibit 9: Airport Capacity
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

Available Seats (2005 – 2012)

1,412,194

1,224,943

1,333,908 1,319,238

1,107,511

1,124,093

1,140,985

1,158,100

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2005 2006 2007 2008 2009 2010 2011 2012

2009 – 2012 Estimated

Top Market (BOS) Not Served

According to Department of Transportation, Boston ranks as the 

number five market out in the Savannah MSA. This is the only market 

that is not served with a daily non-stop flight. 

Exhibit 10: Top Markets Savannah/Hilton Head International

Dst Pax Fare Gross Fare N/S Deps/Day Seats

LGA 132.66 149 171 3.57 198.07

EWR 92.13 158 182 2.87 144.21

ORD 79.68 171 196 2.95 168.48

PHL 69.88 144 170 1.07 80.10

BOS 68.61 144 173 0.00 0.00

DFW 61.13 172 196 2.62 150.00

ATL 55.34 143 163 9.64 1,140.94

DTW 49.23 156 182 1.25 62.81

IAD 48.80 166 189 3.44 175.24

IAH 39.87 195 220 2.44 122.02

DCA 32.61 170 201 0.15 12.02
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

Leakage:

The Savannah/Hilton Head International Airport has experienced a 

substantial amount of leakage to the Jacksonville, FL airport. 

Jacksonville is served by Southwest, AirTran, and JetBlue. Without a 

low cost carrier in our market, SAV is unable to compete price wise 

with JAX (See exhibit 11). Southwest recently began service in 2011 

to Charleston. The Savannah/Hilton Head Airport’s goal is to partner 

with a low cost carrier that would aid in keeping the airfares at a 

reasonable level.

Exhibit 11: Air Fare 

Comparisons

DESTINATION

AVG O/W 

FARE CARRIER

AVG O/W 

FARE CARRIER

AVG O/W 

FARE CARRIER

Atlanta $163.00 Delta $101.00 AirTran $80.00 AirTran

New York $165.00 Delta $136.00 Delta $183.00 US Airways

Boston $165.00 Delta $141.00 Delta $145.00 Delta

Dallas $189.00 American $174.00 American $172.00 American

Chicago $195.00 Delta $164.00 United $173.00 US Airways

Denver $183.00 Delta $138.00 AirTran $171.00 Delta

Detroit $171.00 Delta $153.00 Delta $175.00 Delta

Houston $217.00 Continental $173.00 Continental $209.00 Continental

Los Angeles $200.00 Continental $187.00 Delta $225.00 Delta

San Francisco $233.00 United $177.00 Delta $231.00 Delta

Newark $176.00 Continental $159.00 Continental $175.00 Continental

Philadelphia $152.00 Delta $110.00 Southwest $150.00 Delta

Wash Dulles $183.00 United $192.00 United $189.00 United

Charlotte $132.00 US Airways $203.00 US Airways N/A

SAVANNAH JACKSONVILLE CHARLESTON

Fare Comparison CY2009

• Even before WN enters CHS, SAV fares are highest in the region. 

27
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

Community Demographics, Business 

Development, Community Involvement, 

Airport Service Information & Air Service 

Arguments (See attachment #2)

Plan Implementation and Funding

In the past three years The Savannah/Hilton Head International 

Airport has experienced a major drop in enplanements. This has 

been caused by: Loss of carrier (AirTran Airways 10/08), reduction 

in capacity and leakage due to extremely high air fares. It is 

apparent that in order to reverse the trends the airport must secure 

a low cost carrier to promote competition among the existing

carriers.

The Savannah/Hilton Head International Airport and the 

communities of Savannah and Hilton Head Island have been 

pursuing JetBlue Airways and Southwest Airlines. as two low cost 

carriers that can be successful in the “low country” area. Both 

carriers fit the needs of the area. JetBlue services two of our top five 

markets (NYC & BOS), while Southwest Airlines would bring much 

needed competition into the Atlanta area & beyond, once the 

merger is complete with AirTran Airways. (Arguments are presented 

in attachment #2).

Our proposal to JetBlue and SW is based on the Air Service 

Incentive Program (Exhibit 8) assumes the airline would operate 3 

or 4 daily flights from Savannah. Total compensation is listed in 

Attachment #2.

The Savannah/Hilton Head International Airport is grateful of its long 

term relationship with The Savannah Area Chamber of 

Commerce/The Savannah Convention & Visitors Bureau, and Hilton 

Head Island-Bluffton Chamber of Commerce. Our partners have 

pledged their support and help with $30,000 in-kind advertising 

assistance. 
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

Funding Overview:

Community Airport DOT

Fund Uses Cash

InKind Cash In-Kind Grant Total

Marketing $315,000 $250,000 $250,000

Packages/Rooms $30,000 $30,000

Fee Waivers $1,925,494 $1,925,494

Direct Subsidy $400,000 $400,000

Total $315,000 $30,000 $250,000 $1,925,494 $400,000 $2,605,494

Airport and In-Kind Participation:

The community participation will include almost $2 million towards 

the program from SAV.

Marketing Program:

SAV will provide the following to accompany the launch of any new 

service:

Media Coverage

Public Relations

Public Speaking events

Internet and Social Media

Airport Advertising

Funding Assurances:

SAV will be the coordinator between the public/private partners for 

the DOT grant. SAV will take responsibility for the grant funds.

Measure of Success:

Success will be attained if market is able to reduce the average 

airfares, increase capacity, and reduce leakage.
 Savannah/Hilton Head International Airport

Small Community Air Service Grant Application – July 2011

 

Legal Sponsoring Entity:

Savannah/Hilton Head International Airport

400 Airways Rd

Savannah, GA 31408

Contact: Patrick S. Graham, Executive Director

912-964-0514

Conclusion:

The Savannah/Hilton Head International Airport and the community it 

serves should be given priority consideration for the Small 

Community Air Service Grant as one of the highest airfare airports in 

the nation and by having met the criteria as set forth in the statue as 

follows:

A. BTS reports SAV has one of the highest average airfares in 

the country.

B. The community and airport will provide over 80% of the cost

C. The requested grant would bring immediate benefits to the 

traveling communities of two states.

D. The grant will be used immediately upon receipt of the 

award.