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Docket DOT-OST-2010-0124 

Proposal under the Small Community Air Service 

Development Grant Program for 

 ALBANY, NEW YORK, 

CAPITAL DISTRICT AREA 

DUNS #145701699 

New York Congressional District #’s 22, 21, 20, 19 

Legal Sponsor: Albany County Airport Authority
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Proposal Introduction 

The Albany County Airport Authority proposes it be allocated funds under the 

2010 Small Community Air Service Development Grant Program (Docket DOTOST-2009-0149) to implement a comprehensive air service marketing strategy 

for the Albany International Airport (ALB). The Albany International Airport is an 

important transportation resource to the community known as the Albany Capital 

District Area. Based upon a stronger than average economy and measurable 

success in economic development a proposal is being made to over set the longterm trend in airport usage resulting in continued reductions in service. The 

proposal seeks a grant of $300,000 for which the Albany County Airport Authority 

will will contribute an $200,000 of additional funds. 

Need for Air Service to the Support Local Economy 

New York's Capital District, also known as the Capital Region or Capital Land, is 

a region in upstate New York that includes four counties surrounding Albany, the 

capital of the state: 

Albany County, 

Schenectady County, 

Rensselaer County, and 

Saratoga County. The 

Albany International 

Airport is centered in the 

Albany-SchenectadyTroy Metropolitan 

Statistical Area (ASTMSA) and supports a 

population of 1.4 million 

within 60 mile car drive. 

The next nearest airports 

are 90 minutes to more 2 

hours drive time from 

ALB. The airport’s traffic 

is approximately 98% 

Origination and Destination. The major New York City Airports (JFK, LaGuardia, 

Newark are a 3 hour drive south of the Airport or less from the airport’s Southern 

trade area. The per capita personal income in the AST-MSA in 2008 was 

$40,909 compared to a national average of $39,582. The Capital District has 

more than 31 employers with more than 1,000 employees, the largest of which is 

the State of New York with 54,000 area employees. The Unemployment rate in 

the AST-MSA was 6.5% in April 2010, compared to 8.4% for New York State and 

9.9% for the nation. Over the past ten years the Capital District has become a 

leader in nanotechnology and is the center of a 19-county region branded as 

“Tech-Valley”. The Capital District is home to Global Foundries (formerly AMD) 

which is currently constructing one of the largest semiconductor manufacturing 

facilities in the US, 20 miles north of the Airport. The State University at Albany 

College of Nanoscale Science and Engineering has attracted $5.5 billion in public 
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and private investment and services as a primary R&D complex for IBM, Global 

Foundries, Toshiba, Applied material, Novellus Systems, Atotech and others. 

 

Air Service and Airport Usage has Declined at ALB 

1,556,796 1,550,402

1,447,553

1,440,385

1,380,483 1,318,819

1,258,000

2004 2005 2006 2007 2008 2009 2010

Enplanements 

Projected

While the Capital District Economy has performed much better than the State or 

national economy with a modestly growing population and increased presence of 

high tech business, air service and airport usage has declined at ALB. 

Factors Effecting Decline in Enplanements 

There are a number of possible factors that have lead to the decline in airport 

usage at ALB. Chief among them are capacity reductions and fare increases. 

Capacity reductions have come from both Industry cut back and airline 

consolidation. ALB was one of the first Airlines in nation to experience the 

consolidation of Northwest Airlines with Delta Airlines. Delta’s post-merger 

enplanements have declined approximately 20 percent from pre-merger levels. 

ALB has also experienced the fading away of the effect of the appearance of 

Southwest Airlines at ALB in 2000. ALB is currently the only major airport in New 

York that lacks jetBlue. jetBlue is not only a low cost carrier but also an Airline 

important to New York and is branded New York’s airline and the stated granted 

the jetBlue to the right to put the State seal on its aircraft as part of a $30 million 

incentive to retain jetBlue headquarters in New York. 

Currently ALB has contracted with Sixel Consulting to perform a service leakage 

study which is underway. The results of the study will provide additional insight 

to the loss of airport usage at ALB. However, a US DOT study has revealed that 
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ALB has the highest airfares in New York. The following facts were reported in 

the (Albany) Times Union newspaper on August 2, 2010. 

 “Of the nation’s largest 100 airports, Albany airfares ranked 25th, 

putting it ahead of Syracuse (27), JFK (37), LaGuardia (55), 

Rochester (76), White Plains (77), Islip (81), and Buffalo/Niagara 

(87). Still, Albany was less expensive than two other regional 

airports, Hartford (18) and Newark (5). Anyone who has flown from 

Albany in recent months likely won’t be surprised by the rankings. 

Overall, airfares nationally climbed 4.7 percent in the first quarter 

from a year earlier, the DOT found. But Albany saw the fifth largest 

annual increase, with the average fare rising 14.6 percent to 

$361.35.” 

The facts above are not exhaustive, and an important study underway on airport 

leakage will add to them, however, the decline in the enplanements at ALB is a 

long-term trend that runs opposite of the trends in the population levels and 

economic activity in the Capital District region. 

 The long-term decline in enplanements at ALB presents a challenge to induce 

incumbent airlines or new airlines to increase service at ALB. We find the 

general feeling among airlines is there is no need to expand at a declining market 

location. We also note that at least for now, our average fares are less than 

Bradley and Newark. With these two facts we believe a marketing campaign 

may be able to increase enplanements at ALB and allow it to turn the corner on 

the long-term decline in airport usage before capacity reductions and fare 

increases get to the point that there is little to market to but a new airlines. It 

would than be poised to encourage incumbent airlines to increase capacity and 

fare offerings to return the service offerings required by this almost all Origination 

and Destination airport. 

Existing Air Service 

The significant decline in enplanements since 2006 threatens the loss of current 

air traffic routes and low-fare destinations available from Albany serving both the 

Albany metropolitan area and many nonmetropolitan communities that should 

rely upon Albany commercial service. This indicates the need for additional 

public awareness out reach efforts to attract the potential passenger within the 

1.4 million person 60 minute drive time in the airport-trade area. 

Albany International Airport currently provides direct service to 25 direct 

destinations and one-stop service to over 12 destinations. The table on the 

following page presents the current destinations, carrier equipment and current 

fare range. 
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Airline Destination R/TRIP

1-Day

2-Weeks

Air Canada Toronto 3 Daily Beech 1900 $391-919

Cape Air Massena 3 Daily Cessna $119

Ogdensburg 3 Daily Cessna $119

Watertown 3 Daily Cessna $119

Continental Cleveland 3 Daily RJ $244-872

Newark 4 Daily Q-400/200 RJ $258-408

Delta Detroit 5 Daily RJ $338-554

Atlanta 3 Daily RJ $533-1198

Cincinnati 1 Daily RJ $282-562

Minneapolis 1 Daily RJ $468-1056

JFK 1 Daily RJ $178-338

Southwest Baltimore 6 Daily 737 $142-259

Chicago-Mwy 2 Daily 737 $282-500

Ft. Lauderdale 1 Daily 737 $288-588

Las Vegas 1 Daily 737 $450-784

Orlando 2 Daily 737 $249-580

Tampa 1 Daily 737 $268-594

United Chicago-O'Hare 5 Daily A-320-RJ $268-530

Wash-Dulles 4 Daily RJ $249-1,262

US Airways Boston 2 Daily Saab 340 $204-342

Buffalo 1 Daily Saab 340 $342-520

Charlotte 3 Daily 737 $299-498

NY LaGuardia 4 Daily Dash 8 $179-338

Philadelphia 4 Daily RJ Dash 8 $398-798

Wash-Nat 3 Daily RJ $250-1129

Synopsis of the Community’s Historical Service 

The Airport being operations on June 1, 1928 in the City of Albany. In 1960, the 

City of Albany sold the Airport to Albany County to further its development as a 

regional airport. In 1993, the Albany County Airport Authority was created to 

oversee the Airport's operation and further development. In June of 1998, a new 

terminal officially opened. In February of 1999, the Airport officially opened a 

new, 1600-car parking garage. An 800-car addition was opened in 2001. 

AirTran made a brief but welcome stay at Albany during the 1990s. Albany 

successfully implemented low fare and competitive air service in May of 2000 

with the arrival of Southwest Airlines. With the arrival of Southwest Airlines, 

Airport enplanements increased from 1.1 million to 1.5 million passengers. 
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In 2002, CommutAir established a “micro hub” at Albany International Airport with 

three banks of 13 flights to underserved New York and New England 

destinations. Also in 2002, American Airlines, which had served Albany for 

nearly 80 years discontinued service to New York City. 

The rising price of aviation fuel contributed to CommutAir’s decision to shift its 

operation to the Midwest in 2005. In 2008 American Eagle discontinued all 

service to Albany. This resulted in a reduction in the level of competition on both 

New York and Chicago flights and ended Albany’s important connectivity to 

American’s national and international destinations. In 2008, Cape Air, a regional 

airline based in Massachusetts, began serving the upstate community of 

Massena, Ogdensburg and Watertown from a base established at Albany 

International Airport under the Essential Air Service program. 

In 2009 Delta Airlines and Northwest Airlines merged resulting in a decrease in 

the combined carriers enplanements of approximately 24 percent from premerger 

levels. Currently Continental Airlines and United Airlines account for 20% of the 

Airports enplanements and are in the process of merging. Continental Airlines 

and United Airlines have both declined to sign the Signatory Airport Use and 

Lease Agreement renewal for January 1, 2011. 

Total enplanements for calendar year 2010 are currently projected to decline to 

1.25 million. Air Carrier capacity at Albany has been reduced by 5 percent in the 

past 12 months and 11 percent in the past 24 months. 

Future Requirements

Albany is the Capital of New York State and has long benefited from a 

combination of high levels of government employment and private sector 

investment. The unemployment rate in the Albany-Schenectady-Troy MSA was 

6.5% in April 2010, compared to 8.4% in New York State and 9.9% nationally. 

Albany has had noteworthy success establishing itself as a host to technology 

companies and has become a leader in nanotechnology and continues to grow in 

this sector as evidenced by current development of the largest semi-conductor 

manufacturing facility in the United States only 20 miles north of the Airport, 

comprising 1.3 million square feet and $4.5 billion in investment, which is 

schedule to being manufacturing in 2012. There are 31 employers with more 

than 1,000 employees in the area, the largest being the State of New York with 

54,000 Albany area employees. 

The nearest airports to Albany are Hancock International, Stewart International 

and Bradley International all of which are 90 minutes to two hours drive time 

distance from the Albany. The population within a 60 minute and 90 minute drive 

from the Airport are 1.4 million and 2 million respectively. 

While the population, employment levels and economic development in Albany 

International Airport’s prime service area are stable and growing, the reduction in 

air carriers, seat capacity and enplanements coupled with the highest air fares in 

the state inconvenience the community which is now being forced to travel longer 

distance to airports with more attractive fares and destinations. 
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Description of the Community’s Air Service Development 

Until 1997, Albany had been served primarily by mainline carriers. Albany fares 

were well above average. Albany’s high fares were the primary reason that Key 

Bank abandoned its national headquarters in Albany and relocated in Cleveland 

in the 1980s. 

It was clear then that Albany would require a low-fare carrier that could 

dramatically reduce air fares if the region was to attract new businesses and jobs 

and retain existing businesses. On October 9, 1996, the Authority along with 

community leaders met with Southwest Airlines executives in an effort to 

introduce Albany as a possible location for Southwest. 

In 1997, the Airport was successful in attracting AirTran which offered discount 

fares to Orlando. While load factors were in the acceptable 70% range for legacy 

carriers, AirTran terminated service to Albany on August 1, 1998 citing low sales 

and underperforming load factors. Since then, the Albany County Airport 

Authority has been working in concert with Senator Charles Schumer to restore 

AirTran Service. 

In an effort to remain on Southwest’s “radar,” periodic visits were made to 

Southwest headquarters and Southwest was invited to Albany to view the 

Airport’s new terminal when it opened in 1998. 

 

In 1999, the Authority retained Siena College Research Institute to conduct a 

survey of Chief Executive Officers and business leaders within a 150 mile radius 

of Albany to access the need and potential support for Southwest Airlines. The 

results revealed overwhelming support. The survey results were forwarded to 

Southwest Airlines. 

In late 1999, Southwest informed the Authority that it would begin service to 

Albany in May of 2000. The Authority, recognizing what has come to be known 

as the “Southwest Effect,” immediately began the construction of a new economy 

parking lot. Crews were completing the blacktop process as Southwest began 

Albany service on May 7, 2000. 

Southwest Airlines also received the benefit of a New York State Department of 

Transportation grant to pay for two dual over the wing jet bridges to shorten 

boarding times by 50% and significantly increase passenger boarding efficiency. 

After the arrival of Southwest Airlines, average fares at Albany have dropped 

dramatically and enplanements rose to a record 1.6 million before contraction 

began in 2006. Since 2006 four airlines have consolidated and American Eagle 

terminated service. Airlines, other than Southwest Airlines, have also 

substantially reduced the size of the equipment operating at Albany which has 

lost service by 5 Jets and 2 Regional Jets in the past 24 months. The Airport has 

contracted for an Airport Passenger Leakage study which should be available in 

the next six weeks. The Airport intends to use the leakage study to target 
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specific air travel audiences in the Airport’s trade area that are currently inclined 

to use other more distant airports. 

In February 2010 ALB representatives made a strong pitch to jetBlue based upon 

a consultants study which was met with a response to give them a call back 

when enplanements start to pickup. 

In May of 2010 ALB representative went to Delta in Atlanta with a consultant to 

try to get convince them to lower ALB fares to Atlanta. Delta indicated they 

would add another Delta flight in the summer of 2011 and asked if ALB had any 

funds for marketing as they do not have marketing funds for a small hub airport. 

Community Air Service Marketing Needs and Deficiencies 

Albany is primarily an origin-destination (O&D) airport with 98% of enplaned 

passenger originating in Albany. Many of the flights are very early in the morning 

and require early and timely arrival at the Airport to allow sufficient time for 

parking and security check point clearance in order to ensure timely boarding 

and successful travel to clear airport security checks. It is clear early morning 

departing pastures have little time to resolve any uncertainty where they will park. 

ALB is opening new parking access and exit from Exit 5 of Interstate-87 which 

offers nearly direct airport access. Albany will also institute a parking loyalty 

program offering frequent flyer miles for persons using a credit card registered 

with the program to pay for parking or other services. The airport will use this as 

a one of its marketing features to increase enplanements on existing service to 

encourage incumbent airlines to expand service offerings to support the regional 

community known as the Albany Capital District. 

Strategic Plan 

The Albany International Airport has historically depended on its tenant airlines to 

advertising their air service, fares and special offers. This practice produced little 

in tangible advertising of unsubstantiated benefit to the Airport and community. 

The Airport has maintained a limited advertising budget that has been used 

primarily for telephone directories and promotion of in-house Airport services 

such as parking, Airport Business Center and Foreign Currency Exchange. 

Excepting phone directories, the Albany International Airport’s advertising budget 

has been limited to annual local newspaper ads targeted at travelers living within 

a 20 mile range of the Airport. 

Albany proposes to significantly expand strategic marketing opportunities and 

outreach with the proposed three-year initiative to establish develop the 

FlyAlbany “brand”. The development of the FlyAlbany portal would be more than 

a simple web page but rather a state of the art, interactive computer application 

that interfaces with our real time airline flight purchase systems maintained by 

airlines, our own Amano Parking system and the TravelEx currency exchange 

trading system and provide promotional information about the Airport rebate 

rewards program as well as other critical travel information. It would not be a 
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simple or conventional web page, but would set a new paradigm for interactive 

real-time intelligent travel service. 

While many airports use the name of their city, as we have proposed, to market 

their airport and have a similarly named website such as flydenver, flysyracuse, 

etc. FlyAlbany would be unique and set a new standard in establishing a robust 

and user-friendly system to actually use the internet domain name 

FlyAlbany.com to transact air transportation business transactions. We believe 

that, in the current air transportation market this is essential as many travelers 

start and finish their air transportation purchases using a website like 

Priceline.com or Travelocity.com to first pick an airport, than purchase a flight 

from a commercial airline and often buy in advance a parking reservation from a 

similar site. 

Albany proposes to establish use of the FlyAlbany.com domain for all 

communities served by the Albany International Airport. We would be 

encouraging these service areas to begin and complete their air travel search 

and purchase, plan their trip to the airport and confirm their travel and parking 

arrangements on the FlyAlbany.com portal. 

Target Audience 

The target audience for the Airport’s FlyAlbany initiative will be business and 

leisure travelers that live or work in New York counties located within one hour 

drive time from the Airport using the I-87/I-90 Corridors from the Airport.

Web Site Design 

The Albany County Airport Authority will seek competitive bids to design and host 

a FlyAlbany web site. This web site will provide several interactive components 

that will enable travelers to search Albany fares and fare specials, book flights, 

plan parking arrangements, rental car reservations, make on-line foreign 

currency exchange transactions and receive real-time Airport updates on safety 

or security travel alerts, highway travel conditions, weather, flight delays and 

cancellations. 

Advertising and Promotion 

Radio 

FlyAlbany radio advertising will be designed to cover the entire primary trade 

area of the Albany International Airport. 

Television 

FlyAlbany television advertising will include the Albany New York television 

market. 

Newspaper 

FlyAlbany newspaper advertising will placed on the following New York 

newspaper markets: 

Plattsburgh, Glens Falls, Saratoga Springs, Albany, Utica, Amsterdam and 

Kingston. 
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Billboards 

A comprehensive billboard campaign will be developed to include both Interstate 

Highway and regional highway locations with in one hour of the Airport. 

Promotional

The Airport’s Office of Public Affairs will contact civic organizations and 

governmental agencies within the targeted area and offer to provide on-site 

presentations that outline the Airport’s web-based services and the advantages 

of using Albany International Airport. The program will include a 30-minute 

PowerPoint presentation followed by a question and answer period. 

Timetable 

We will begin offering the enhanced parking access from I-87 in October of 2010 

along with the Airport frequent flyer rebate program. 

While grant announcements were circulating and being evaluated, a vendor 

would begin on internet portal development and appropriate advertisers and 

rates would be finalized in the target communities surrounding the airport. The 

initial phase will include internet portal development to be completed within 120 

days. 

The second phase of the FlyAlbany program will begin 121 days following the 

announcement of the grant approval and will include: 

Targeted newspaper, radio and television advertising that will alert business and 

leisure travelers to the new FlyAlbany Internet portal and the advantages of 

choosing Albany International Airport to identify the many direct destinations and 

attractive fares to choose from, its convenient parking and online parking 

information, its online currency purchase and Travel cash cards through 

TravelEx, and its status as the only airport in the Northeast featuring dual over 

the wing jet bridges. 

We have already procured the FlyAlbany.com domain name, redirected it to our 

current web site and are ready to develop and roll it out. Like wise we have 

developed and are ready to roll out the online currency purchasing system 

developed by TravelEx at no cost to the airport. 

Accountability 

The Albany County Airport Authority Chief Financial Officer will monitor and 

evaluate the performance of the strategic plan and certify that the grant funding 

is spent in accordance with grant requirements and Airport financial guidelines 

and facilitate the Albany team’s efforts to make adjustments to the program to 

achieve initial stated goals of sustaining and expanding Albany direct 

destinations along with capture of outlying regional markets unaware of Albany’s 

air travel and direct destination opportunities. 

The Airport Chief Financial Officer will report the performance of the FlyAlbany 

initiative to ensure it is meeting or exceeding goals on a monthly basis by 

expanding the Airports already peer leading robust financial and statistical 

reporting process which include annual awards from the National Government 
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Finance Officer’s Association for Excellence in financial reporting and 

achievement in budgeting. The Airport Authority Board is highly qualified and 

very involved in program development and will continue to actively participate in 

program oversight to ensure project success. 

Local media is in regular attendance and is sure to include progress reports on 

the progress of this project. 

Project Continuity 

Project continuity will be maintained utilizing Airport funds which are expected to 

increase as a result of this program. We also believe the initial promotion of the 

FlyAlbany domain will create ongoing awareness. Albany staff has explored and 

evaluated the effectiveness of marketing programs at other airports that let the 

program lapse when funding ran out and are committed to avoiding this short 

lived burst and are committed to continue operating and funding the on-going 

program. 

Project Budget by Major Component 

FLY ALBANY BUDGET

Multi-media advertising

Radio, Television, Bill Board, Newspaper $ 375,000

Web Site Portal Development 55,000

Administration 40,000

Airport Patron Rebate Program 30,000

Total 500,000

Authority Share 200,000

Grant Share $ 300,000