# Proposal Under the Small Community Air Service Development Program

Docket: DOT-OST-2010-0124

Sponsoring Entity: Lakeland Linder Regional Airport
Dun & Bradstreet Number: 020997912 2-digit Congressional District Code: 12 August 27, 2010Lakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010 

# Table of Contents Executive Summary __________________________________ 1 Community Overview _________________________________ 4 Local Community: The City of Lakeland and Polk County __________________ 4 Impact of Tourism on Polk County ____________________________________ 4 

# Lakeland Linder Airport (LAL) Overview ___________________ 7 Air Service Overview __________________________________ 9 Community’s Historical and Existing Air Service _________________________ 9 Community’s Air Service Development Efforts ___________________________ 9 

# Strategic Plan ______________________________________ 12
Goals __________________________________________________________ 12 Sky King Support ________________________________________________ 12 Market Analysis Study ____________________________________________ 12 Regional Overview _____________________________________________________ 12 Benchmarking Similar Service in the Region _________________________________ 14 Forecast _____________________________________________________________ 16 

### Alternate Plan ___________________________________________________ 16 

# Plan Implementation and Funding ______________________ 17 Public/Private Partnership __________________________________________ 17 Sources and Uses of Funds ________________________________________ 17 Airport Participation _______________________________________________ 19 Marketing Program ____________________________________________________ 19 Revenue Guarantee ____________________________________________________ 20 

### Funding Assurances ______________________________________________ 20 Milestones and Monitoring _________________________________________ 20 Measure of Success ______________________________________________ 21 Program Cont inuation _____________________________________________ 21 Legal Sponsoring Entity ___________________________________________ 22 Conclusion _____________________________________________________ 22 

# Appendix A: Required Summary Information ______________ 23 Appendix B: Letters of Support _________________________ 27Lakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 1 

# The FAA, State of Florida, City of Lakeland / LAL are investing more than $9.7M to prepare LAL for commercial service. 

# Executive Summary

Lakeland Linder Regional Airport (“LAL”) is currently implementing a major program to develop the infrastructure required to support scheduled airline service. The Florida Department of Transportat ion (“FDOT”) has invested $4.0M in the project, reflecting the strategic importance to Florida aviation of developing co mmercial service at LAL. The airport and the City of Lakeland are investing an additional $2.2M into the project and have secured $3.4M in FAA funds. The total cost of the project is $9.7M and completion of the improvements is estimated to be spring 2011. LAL, a Part 139 airport, has already submitted the airport security plan to the TSA fo r review and approval. LAL will have completed all requirements for commercial servic e by the first quarter of 2011.



### Exhibit 1: Expenditures to prepare LAL for Commercial Service Fund Uses FDOT City/LAL FAA Total Cost ILS 440,000.00 110,000.00 1, 000,000.00 1,550,000.00 TWY H&J 94,304.00 94,302.00 2, 407,300.00 2,595,906.00 Apron & Pond 1,000,000.00 614,229.88 1,614,229.88 Terminal expansion 2,000,000.00 400,000.00 2,400,000.00
FBO Construction* 475,000.00 475,000.00 Tail Enclosure* 400,000.00 400,000.00 Awos 200,000.00 50,000.00 250,000.00 TWY Lighting 80,000.00 20,000.00 100,000.00 Gates/Access Controls 213,000.00 53,250.00 266,250.00
Totals $4,027,304.00 $2,216,781.88 $3,407,300.00 $9,651,385.88
*The FBO Construction project is required for the preparations for commercial service; it is being relocated from the terminal to generate adequate spac e to accommodate passenger activity. The Tail Enclosure project was a requirement of relocating Sky King to Lakeland.

LAL is located in Polk County just off the Interstate 4 corridor in the heart of Florida’s tourism center. Disney World and Busch Gardens are fewer than 40 minutes away, and the new LEGOLAND park will be less than a 30 minute drive, located at the old Cy press Gardens. It takes no more than an hour to be onLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 2 the popular Gulf Coast beaches. The region has exper ienced strong development toward Lakeland from both the Orlando/Disney complex to the east and the Ta mpa/St. Petersburg area from the west. This strategic location in the mi ddle of the state makes LAL the perfect choice for new commercial air service; driving economic development for the Polk County region. Coming in the fall of 2011, LEGOLAND is scheduled to open in Polk County. The attraction represents a $150 million dollar investment for the first three years, with another $150 million dollar investment scheduled for the next three years. The second offering will include a resort hotel and conference cent er, a water park, and a Sea Life Aquarium. LAL will be the most convenient airport to access LEGOLAND.



### Map 1: Drive Times from LAL (90 minutes and 60 minutes)

LAL Busch Garden s Disney

LEGOLANDLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 3 LAL’s application seeks a $750,000 grant to support the launch of commercial service from the airport. Initial service would be seven or more low fare scheduled charter flights per week to multiple small U.S. communities (the “target communities”) that currently lack service to the Orlando / Tampa region. Each of the target communities would be e ligible for SCASDP in their own right. The benefit from awarding a grant to LAL works to achieve the goals for SCASDP to a far greater degree than just the impacts on the City of Lakeland and Polk County as th e targeted communities would benefit as well from the added low fare service. The grant is for a co mbination of marketing and revenue guarantee. The airport has already funded a $25,000 study, which is ongoi ng at the time of writing this grant, to identify target cities and assist with developing the marketin g and business plan for the service. Meetings have already been held with multiple airlines to provide the service and with multiple communities interested in partnering to make the service a success.

In early 2010, LAL recruited charter airline Sky King to relocate their corporate headquarters and maintenance base to LAL, creating an estimated 50 new jobs and $7M in local economic impact. Sky King is in the process of implementing the systems re quired to offer scheduled charter service (new host system, booking engine, etc...) and is actively involved in looking at the opportunity (see attached letter of support).

The airport along with regional community and city l eaders are committed to this project, pledging more than $1.2M dollars in cash and in-kind contributions wi th $512K from the airport and $700K from the community (see Exhibit 11: Sources for Community Cash Contributions). This is on top of the capital investments noted above which are not counted towards the commitment for the grant.

Long-term success will be achieved through:

• Completion of the $9.7M in facility upgrades wh ich are being made to support commercial service

• Providing low fare service to target communities who currently lack low fare options and in some cases may currently not have service at all

• Robust marketing to establish LAL as a gateway to Orlando / Tampa while establishing the region as a destination in its own right

• Revenue guarantee to support service through the initial spool with the service forecasted to be profitable in the long-term

• Community support of $1.2M

• Secondary option of securing non-stop service by a carrier other than Sky KingLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 4 

# Community Overview

Local Community: The City of Lakeland and Polk County
The City of Lakeland covers over 74.4 s quare miles and has a population of 94,163 based on April 2009 figures but that number is forecasted to be 100,000 with the 2010 census. When the unincorporated area is included the population swells to 236,460. It is located in Polk County, which has emerged as a leading logistics center due to its central location in Florida. From this platform on Inte rstate 4, companies have easy access to Interstates 75 and 95 as well as US Highway 27, a major north-south route.

Many prominent companies are headquartered in Polk County with operations across Florida and in surrounding states, such as Publix Super Markets, Flor ida’s Natural Growers, Ben Hill Griffin Corporation, Fed-Ex, Colorado Boxed Beef, MOSAIC, Comcar In dustries, W.S. Badcock Corporation, Gator Freightways, Room To Go and Saddle Creek Corporation.

Polk County has been one of the hardest hit by the re cession. The national unemployment figure is 9.7% and the Florida unemployment rate is 11.9%. In Janua ry, there were 1.1 million Floridians out of work. Polk County is tracking even higher at 13.3%. In a recent Florida Trend Article regarding poverty rates in the suburbs, Lakeland had the fifth -highest suburban poverty rate in t he nation in 2008. According to a Brookings Institute study, 75,000 pe ople in Lakeland’s surrounding suburbs or 15.8% of the population — live below the poverty level of $21,834 for a family of four. Within Lakeland’s city limits, meanwhile, 12,182 people, or 13.3% of t he population, live in poverty.

In short, the community is in need of the economic benef it that would come from LAL scheduled service. The community and City have shown their confidence in the potential for the service by investing a significant amount of resources in the improvements no ted above and in supporting this grant application.



## Impact of Tourism on Polk County

Tourism is one of Polk Co unty’s largest industries with an esti mated economic impact of $1.1 billion. Tourism supported more than 21,000 Polk County jobs in 2009. Visitors paid more than $31 million in sales taxes in Polk County. Lakeland is home to 37 area hotels and motels offering 3089 rooms. WithinLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 5 Polk County, there are 7,100 rooms in approximately 111 hotels and motels. The traditional tourist season runs January through March with an average occupancy rate of 60% and an average daily room rate (“ADR”) of $77.00. Obviously, this is an aver age of all Polk County hotels and motels. They have some properties that run an average of 84% in peak season. Off peak season would be from April through December, where the occupancy runs about 38% on average with an ADR of $61.00. Again however, in Lakeland, there are several properties th at run a much higher occupancy rate and their ADR is $65.00--$71.00.

Polk County is unique in that it also offers approxi mately 7,200 vacation rental homes on the east side of the county near Disney World. These homes account for 52% of the annual bed-tax collections. Their peak season is summer.

With significant hotel and rental home inventory with low daily rates and low occupancy, Polk County has tremendous potential to emerge as a low cost base fo r tourists wanting to access the attractions in the region, and in doing so driving significant economic benefit to the local economy

.

Last year, Polk County hosted 227 sporting events gener ating more than $126 million in economic impact alone. Lakeland is the Spring Training home to The Detroit Tigers and the annual home to their Class A team, The Flying Tigers. Together, they generate about $50 million in economic impact. During 2010 the Detroit Tigers at Joker Marchant Stadium in Lakeland held a total of 15 Spring Training games with a total attendance of 112,560, averaging 7,504 per game. The largest crowd ever recorded was Saturday, March 27 when the Tigers played The N.Y. Yankees.

The Lake Myrtle Sports Complex is home to the Flor ida Youth Soccer Association—bringing thousands of young soccer players to the area each year and the Russ Matt Central Florida Invitational, which brings more than 200 collegiate baseball teams to the area each March.

The Lakeland Center, a four- building multipurpose entertainment complex in Lakeland is home to many diverse performing arts programs, including the Lakeland Broadway and Entertainment Series, The Imperial Symphony Orchestra, The Lakeland Concert Band, and various contempor ary performances by professional artists. The venue also features 100,0 00 square feet of state-of-the art exhibit space for meetings and conventions and an arena that is the i deal location for many state, regional and national championships. In February and March alone, more than 100,000 fans from around the State of FloridaLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 6 enjoy the Florida High School Athletic Associati on State Wrestling and Boys and Girls State Basketball Championships. These numbers account for more than $6 million in direct ec onomic impact each year.

Lakeland is home to Explorations V Children’s Mu seum, Florida Air Museum, Sun ‘n Fun Fly-In, the largest single site collection of Frank Lloyd Wright Architecture, the Florida Dance Theatre, The Harrison School for the Arts, the Imperial Symphony Orchestr a, The Lakeland Community Theatre, Polk Museum of Art, and last but certainly not least, one of only th ree surviving atmospheric theatres left in the state— The Polk Theatre. The Historic Polk Theatre opened in 1928 as a vaudeville and movie house and is now in the National Register of Historic Places, alon g with many other historic locations in downtown Lakeland, including the Lake Mirror Promenade and The Terrace Hotel.

Each year, Lakeland provides access to a number of top tourist destinations and attractions. Bok Tower Gardens, Fantasy of Flight, Disney World and Busch Ga rdens are all within an hour’s drive of Lakeland. LAL is within an hour’s drive of eight Spring Training Major League teams. The Annual Sun ‘n Fun Fly-In brings in approximately 160,000 international, national , regional and statewide visitors to Lakeland and the entire Polk County area each Spring for a week long aviation convention. Mayfaire-by-the-Lake, in Lakeland, has grown into a regional juried art show t hat showcases more than 200 artists’ displays along the shores of Lake Morton each Mother’s Day weekend. It brings in about 35,000 annual visitors. Florida Southern College offers, in addition to the largest single- site collection of Frank Lloyd Wright Architecture with the “Child of the Sun” Collection, the Annual Festival of Fine Arts program featuring such international artists as The Moscow Festival Balle t! The Lakeland Annual Pig Festival each January brings 30,000 visitors to sample more than 300 BBQ teams finest food. In April, downtown Lakeland introduces the Florida Outdoor Sculpture Celebration and in October, more than 25,000 visitors enjoy 500 show vehicles in the Lake Mirror Classic Auto Festival.

In the Fall of 2011, LEGOLAND is scheduled to open in Polk County. The attraction represents a $150 million dollar investment for the first three years, with another $150 million dollar investment scheduled for the next three years. The second offering will include a resort hotel and conference center, a water park, and a Sea Life Aquarium. LEGOLAND has been recogni zed by Amusement Today as the Country’s best theme park for children for the 6th consecutive year.Lakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

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# Lakeland Linder Airport (LAL) Overview

The City of Lakeland, Florida, and the city’s aviation facility, Lakeland Linder Regional Airport, have grown and prospered together for some 65 years. Today the airport’s primary clientele is corporate, business and recreational/sport general aviation users. Situated approximately 30 miles east of Tampa and 55 miles south of Orlando, Lakeland Linder serves as an excellent, cost-effective reliever alter native for avoiding the heavy traffic at those two cities’ major airports.

LAL is an FAR 139 airport with an Index A ARFF capability and an ATCT operated 365 days per year. LAL has two asphalt runways. Runway 09/27 is 8,500 feet long by 150 feet wide and is served by a full-length parallel taxiway and can handle most aircraft available today. The 5,000 foot long by 150 f eet wide Runway 05/23 with its partial-length parallel taxiway is the precision runway for ILS users.

The airport is located just off the Interstate 4 corr idor in the heart of Florida’s prime tourism country. Disney World and Busch Gardens are fewer than 40 minutes away, and Cypress Gardens is only a 30- minute drive. It takes no more than an hour to be on the world famous Gulf Coast beaches.

However, visitors need not even leave the Lakeland Li nder’s 1,700 plus acres to enjoy themselves. The facility hosts events ranging from community art shows to Harley Owners Group fundraisers. Two international remote control airplane events, Flor ida Jets and Top Gun, have been growing in popularity.

A new facility for an aviation-oriented high school is under construction on the Sun ’n Fun campus at Lakeland Linder Regional Airport. T he new $7.5 million, 58,000-square-foot facility of the Central Florida Aerospace Academy (CFAA) will open in 2011. With a current enrollment of 150 high school students in grades 9 through 12, CFAA is now beginning its thir d year. The Polk County School Board estimates enrollment will grow to 400-500 students within five years; CFAA’s new facilit y will accommodate this anticipated increase. Funding for t he new facility was provided by a $7. 5 million grant to Sun ’n Fun from the Aviation Education Foundation. CFAA has had a significant impact on Lakeland Linder Regional Airport in several ways. The students, the airpor t, and local businesses benefit from the academy’sLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 8 presence on the airfield. As a Workforce Educatio n Career Academy, CFAA maintains partnerships with local businesses. The “partner” businesses, and other businesses on airport property, employ CFAA students. The students receive ha nds-on experience while still in high school, and the businesses have the benefit of motivated, interested student-empl oyee. CFAA’s efforts might also benefit aviation education throughout the U.S. In 2009 CFAA was one of nine schools in the country to receive a grant from NASA to write an aviation/aerospa ce curriculum for middle school th rough high school students. Of the nine school systems receiving the grant, Polk County received the largest sum, $1.4 million. The Polk County school system and the Univer sity of South Florida have now wr itten the curriculum, and CFAA will test the curriculum during the current (2010/ 2011) school year. Later, N ASA will package and market the curriculum.

LAL’s largest attraction, put on by one of it s biggest tenants, is the annual Sun ‘n Fun Fly-in convention. Begun in 1975, it has bec ome the second largest air show in the United States. It features every conceivabl e type of aircraft, offers a wide array of accessories and activities related to flyi ng, and draws aviation enthusiasts from around the world. The amount of in and out Sun ‘n Fun air tra ffic LAL handles allows it to lay claim to being the busiest general aviation airport in the co untry during the week of the convention.

For more information, go to www.lakelandairport.comLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 9 

# Air Service Overview

Community’s Historical and Existing Air Service
Currently, Lakeland and Polk County do not have a co mmercial service airport; LAL serves as a general aviation reliever airport. As such, there are no commercia l aviation statistics available for the community. Below is a summary of the GA activity at the airport over the past 5 years.



### Exhibit 2: LAL Annual Traffic Counts (total aircraft movements)



## Community’s Air Service Development Efforts
Within the past five years, the City of Lakeland an d LAL have been actively involved in efforts to prepare the airport for commercial service and in pursuing new service.

Starting in 2007 LAL began exploring options for comme rcial service. Since that time they have spent more than $300K on consulting with Daedulus Aviati on Strategies LLC and on marketing (2007 - $95,675; 2008 - $97,984; 2009 - $61,987 and 2010 - $50,000 est.).

Specific activities have included:

2008

• Participated in an extensive process attempting to secure service from Skybus Airlines, including making infrastructure improvements 92,402 2009 2008 118,175 2007 147,449 2006 118,713 2005 101,361Lakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 10 2009

• Hired new airport director Eugene B. Conrad III, C.M. who has sign ificant experience in recruiting commercial service to small communities incl uding being part of the team that opened Branson Airport, which was the first privately developed, and operated commercial service airport in the country

2010

• As described above, LAL secured funding for and launched a major project to develop the infrastructure required to support scheduled service

• LAL recruited Sky King corporate headquarters a nd maintenance operations to the airport with a key motivation being to establish a base from which they could offer scheduled charter service

• In summer 2010 the airport funded an air service study with Seabury APG which is currently underway

• In Summer 2010 LAL started holding meetings with targeted communities interested in low fare service to the Central Florida region

• LAL has spoken with multiple carriers who are interested in providing service to the market

• LAL has held meetings with the FAA Administrator, Randy Babbitt

• LAL has created marketing materials to promote the airport and to start preparing the community that commercial service is coming



### Exhibit 3: Sample airport marketing materialsLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 11Lakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 12 

# Strategic Plan

The strategic plan calls for bringing scheduled service to LAL with new scheduled public charter service from targeted communities either from Sky King or, as a secondary option, another carrier. This service is projected to be sustainable in the long-term.



## Goals
The community has three primary goals in seekin g a SCASDP grant; each of these will be met by the proposed strategic plan:

• Bring scheduled service, and the re sulting economic development, to LAL

• Provide low fare service to other targeted comm unities who currently lack nonstop service to the Central Florida region

• With successful flights and robust marketing, establish LAL as a viable access point for the Orland and Tampa regions



## Sky King Support
As the letter below indicates, Sky King strongly support s this application. The airline believes in the long term potential for the markets but is also realis tic about the high degree of marketing which will be necessary to establish the service an d the financial risk associated with the initial launch time period; thus necessitating the grant and associ ated revenue guarantee and marketing money. See attached letter of support from Sky King (in Appendix B).



## Market Analysis Study
The market analysis was perform ed by Seabury APG (“SAPG”), a leadi ng aviation consulting firm and represents the initial piece of work on a broader ma rket analysis which is currently being competed.



### Regional Overview Capacity into the Tampa and Orlando area remains cons trained following the pull-downs driven by recent economic conditions. Capacity to the region is down 10% versus 2005 and 20% since 2008.Lakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 13 

### Exhibit 4: Seats per month (M) to MCO, SFB, TPA and PIE (source: DOT T-100 via apgDat)

The capacity reduction has driven up load factors with 2010 up ~3 points higher year-over-year. The 80%+ load factors are a st rong indication that traffic is being spilled. 

### Exhibit 5: Load Factor per month to MCO, SFB, TPA and PIE (source: DOT T-100 via apgDat)

While average fares dipped during the recession, th ey had already recovered up 7% year-over-year by the first quarter of 2010 and are likely following nationa l trends with significant gains in the rest of 2010. D N ASO J J M J- 2007 M F J- 2006 D A 2.0 2.5 3.0 3.5

O N S A J J M- 2005 F M AM J J A S O ND J2008F M AM J J A S OND J2009F M AM J J A S OND J2010 FMAM -20%

-10%

68% 70% 72% 74% 76% 78% 80% 82% 84% 86% 88%

M2005 A OND F J- 2010 M A M A M F J- 2008 D N O S A J J M A M F J M M F N A J- 2006 O S A J J M J- 2007 D J J D N O J S S A M A M F J- 2009 D N O J A J SLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 14 

### Exhibit 6: Average net fares to MCO, SFB, TPA, PIE (source: DOT DB1B via apgDat)

All together, it is a strong environment into which to add new capacity to the region.



### Benchmarking Similar Service in the Region Developing service at LAL is very similar to the l aunch of new service from Allegiant at both OrlandoSanford (SFB) and St. Petersburg International Airport (P IE), which is an airport just outside of Tampa. In both cases, Allegiant has built up a viable seco ndary airport, using scheduled service to small communities, stimulating demand through aggressive advertising and attractive price points. While LAL is not asserting that by winning this grant it will s ee growth equivalent to PI E or that Sky King would be the next Allegiant; it is useful to benchmark the spoo l up and fares at those airports to use a benchmark for assumptions for LAL service. To be conservative, assumed that the LAL service will start with just a 65% load factor and spool to just 76% by year 3.

$110 $115 $120 $125 $130 $135 $140 $145 $150 $155

+7%

1Q10 4Q09 3Q09 2Q09 1Q09 4Q08 3Q08 2Q08 1Q08 4Q07 3Q07 2Q07 1Q07 4Q06 3Q06 2Q06 1Q06 4Q05 3Q05 2Q05 +17%

1Q05Lakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 15 

### Exhibit 7: Allegiant load factors at PIE and SFB (source: DOT T100 via apgDat)

While load factors spooled up in the markets, fares tre nded down. This is partially due to the fact that during this period Allegiant saw dramat ic spikes in ancillary revenue, which allowed them to offer lower price points and yet achieve superior total revenue pe r passenger. The fares were also impacted by the recession; but as 1Q10 shows the impact has already started to reverse out. To be conservative, LAL fares are being modeled at $62 in year 1 and only climbing to $70 in year 3. This recognizes the importance that price point advertising will play in dr iving awareness of LAL as an option to access the region. 

### Exhibit 8: Allegiant average net fares at PIE and SFB (source: DOT DB1B via apgDat) 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%

J2008 D N O S A J- 2009 MAMJ J ASOND J J M A M F J- 2007 D N O S A J J M A M F J- 2006 D N O S A 65%

J J M- 2005 F AM J J A S OND J2009 M AM F FM St. Petersburg International Airport (PIE) Orlando-Sanford (SFB) SFB saw spool, going from ~73% in year 1 to 78% in year 2 and 85%+ since
PIE saw almost no spool

$50 $55 $60 $65 $70 $75 $80 $85 $90 $95

2Q09 1Q09 4Q08 3Q08 2Q08 1Q08 4Q07 3Q07 2Q07 1Q07 4Q06 3Q06 2Q06 1Q06 4Q05 3Q05 2Q05 1Q10 4Q09 3Q09 $62

Orlando-Sanford (SFB) St. Petersburg International Airport (PIE)Lakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 16 

### Forecast In the first year of operation, the flights are expe cted to lose $604K as the market is introduced and revenue spool occurs. In 2011 the route is anticipated to make $322K and in 2012 $1,369K.



### Exhibit 9: Route P&L Forecast (000) Year 1 Year 2 Year 3 

### Route P&L Local revenue $4,617 $5,196 $5,825 Ancillary Revenue $692 $1,039 $1,456 Segment revenue $5,309 $6,235 $7,282

Total operating expenses $5,913 $5,913 $5,913
Segment P&L ($604) $322 $1,369



### Stats Ancillary revenue % 15% 20% 25% Flights / day 111 Seats / flight 150 150 150 Load factor 68.0% 73.0% 76.0% Average Segment Fare $62 $65 $70 Block hours / flight 1.8 1.8 1.8 Expenses / block hour $4,500 $4,500 $4,500



## Alternate Plan
While LAL has held advanced talks with Sky King, it re cognizes that the dynamics of the airline industry and the economic conditions are such that a deal may not ultimately be reached for the service proposed here. Should LAL not secure a deal with the Sk y King by June 2011, then the airport will seek an alternate carrier to provide service to meet the grant application goals.Lakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 17 

# Plan Implementation and Funding

Public/Private Partnership
The City of Lakeland and LAL have developed a robust par tnership with the community as is documented by the level of financial commitment and the letters of support. LAL has an Advisory Board which is headed by the Mayor of the City and consists of ni ne members. The members are representative of different aspects of both the business community and airport businesses. The Board meets six times a year and holds special sessions if required.
Lakeland Linder Airport Advisory Board

• Tom Dunn – Corporate Aviation Rep – Columbia Ai r Services – Director of Fuel Operations

• Robert Knight - Citizen-at-Large – Knight Industrial Equipment Inc. – Owner/President

• Ken Willaford - Airport Ten ant – Aeromech, Inc. - Owner

• John Burton – Citizen at Large – Sun ‘n Fun Fly-In - President

• Jeff Kincart – Citizen at Large – American Compliance Technologies, Inc. – Civil Engineer

• Joel Adams – General Aviation – Highland Homes - President

• Scott Franklin – LEDC Rep – Lanier Upshaw, Inc. – President and CEO

• Gow Fields – City Commission Representative - Mayor

• Justin Troller – City Commissi on Representative - Commissioner



## Sources and Uses of Funds

As detailed below, to initiate schedule service the community is committing $100,000 in cash towards marketing, this will be funded by the Central Flori da Development Council. The City of Lakeland will be providing Crash Fire Rescue Services and Police Se rvices at no charge to the airport, a $550,000 cash savings. The City of Lakeland will also be provid ing $50,000 in cash towards the revenue guarantee; 10% of the total for the guarantee. Total cash f unds from the community are $700,000. The airport will spend $100,000 in marketing while waiving $412,000 in fees. LAL is requesting a $750,000 grant to supplement local funds; the grant will be divided with $250,000 in marketing and $500,000 in revenue guarantee.Lakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 18 

### Exhibit 10: Source and Uses of Funds Community Airport DOT Total Fund Uses Cash In-Kind Cash In-Kind Grant Marketing 100,000 100,000 250,000 450,000 Fee Waiver 412,000 412,000 Crash Fire Rescue Services 450,000 450,000 Police Services 100,000 $100,000 Revenue Guarantee 50,000 $500,000 $550,000 Subtotal 700,000 100,000 412,000 $750,000 Total $700,000 $512,000 $750,000 $1,962,000 % of Total 36% 26% 38% % of Cash 45% 6% 48%



### Exhibit 11: Sources for Community Cash Contributions Source Fund Uses Cash Central Florida Development Council Marketing $100,000 City of Lakeland Crash Fire Rescue Services 450,000 Police Services 100,000 Revenue Guarantee 50,000 Subtotal City of Lakeland $600,000 Total Community Cash $700,000

Not included is a robust mix of local in-k ind promotional items from LAL partners:

• Semi Annual Promotional Inserts to 100,000 elec tric customers serviced by Lakeland Electric

• Chamber of Commerce Newsletter

• Lakeland Ledger, the local newspaper

• City of Lakeland’s public television station

• City of Lakeland’s web site

• Sky King’s website

• Marketing brochure for Lakeland

• Email marketing with LEGOLAND database

• Airport partners, tenants websites, emails

• Hotel and lodging emailsLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 19 

## Airport Participation
LAL airport will provide $100K in marketing m oney and fee waivers worth an estimated $412K.



### Marketing Program
As this new service will be leisure orientated, it will be critical to have a robust market ing campaign in the cities receiving service. LAL has pulled together a strong group of partners who are experts in marketing Lakeland and Polk County. LAL will rely heavily on th is group to provide resources (ad copy, graphics, etc...) and guidance on the most effective ways to market the service in the target communities the flights will serve. The key objective will be to generate awareness for the flight s and for Lakeland / Polk County. The marketing mix will likely be similar to what Allegi ant uses to create demand in the markets they have entered, relying heavily on print and radio to market aggr essive price points. LAL intends to partner with communities who are willing to contri bute to the marketing of the servic e, further spreading the reach of the budget presented in this application. Local grou ps have committed to continued marketing efforts well beyond the initial period of the grant.

Marketing partners include:

• City of Lakeland

• Central Florida Development Council

• Central Florida Visitors and Convention Bureau

• Lakeland Chamber of Commerce

• Lakeland Convention & Visitors’ Bureau

• Lakeland Economic Development Council

• LEGOLAND

• Polk County Sports Marketing

• Lodging Association

The marketing will likely invo lve a mix of the following:

• Print ads in local newspapers and publicationsLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 20 • Local radio ads and possibly television spots

• Internet – banner ads, feature content on partn er sites (LAL, CVB, target airports, marketing messages on Sky King site, etc...)

• Email blasts – LEGOLAND, hotels, rental cars, visitor bureaus, and other partners

• Travel agent blitzes and familiarization trips

• Public relations with press re leases, writer trips, etc...



### Revenue Guarantee As discussed above, the service is high risk and will require a revenue guarantee to help offset the risk during the spool up period. The projections indica te that a $550K guarantee will be needed as a financial backstop. Terms of the agreement will be subject to negotiations between LAL and the operating carrier.



## Funding Assurances
LAL will be the coordinator between the public/private partners for the DOT grant. LAL will also take responsibility for the grant funds.



## Milestones and Monitoring
LAL and its public / private partners have establis hed realistic timelines for implementing the plans presented here. Exhibit 12 establishes the key milest ones. LAL believes the targets to be conservative given the advance state of negotiations with Sky Ki ng and the progress made on terminal improvements and with the TSA. Should Sky King not start service to LAL by June 2011, then the airport will seek an alternate carrier to provide service to meet the grant application goals. LAL will have ultimate responsibility for monitoring the su ccessful implementation of the grant program. It will partner with the City of Lakeland and the Lakeland Linder Airport Advisory Board to ensure successful implementation of the strategic plan. Ke y areas that will be monitored include:

• Detailed project timelines and budgets

• Marketing plan implementation

• Monitoring flight performance relative to target s in the revenue guarantee using: airport collected enplanement data and internal carrier dataLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 21 

### Exhibit 12: Sample Project Timeline (Actual dependent on service announcement / start dates)



## Measure of Success

The ultimate measure of success will be if service to LAL is successful launched and is viable within the first couple of years of service. LAL and its partners will continually monitor flight performance including passenger volumes and average fares and will shift marketing resources as required. LAL will also monitor competitive developments at the other airports in the region.



## Program Continuation
This grant request will fund the initial launch of this new service. Once this air service has been launched and established, it will become part of the airport’s on-going marketing plan and will be part of the annual airport marketing budget. 2011 2012
12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 

### Grant Award
Announcement of Service
Start of Service Marketing campaign Design Phase

Advertising Campaign

Revenue Guarantee Activity

Status Report to DOT Implementation Phase

Project TrackingLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 22 

## Legal Sponsoring Entity
Lakeland Linder Regional Airport
3900 Don Emerson Drive, Suite 210
Lakeland, FL 33811 Contact: Eugene B. Conrad III, C.M.; Airport Director (863) 834-3298



## Conclusion
Lakeland Linder Regional Airport should be given pr iority consideration for the Small Community Air Service Program as an airport seekin g to establish its first commercial service and given that it will be providing low fare service to other small communities. It meets the criteria as se t forth in the statute as follows:

• Lakeland currently does not have commercial air service and will be able to meet all necessary requirements of the Federal Aviation Administration for the type of service involved in their grant proposals

• The community will provide $700,000 in cash, which is 36% of the cost of the program

• The Lakeland Linder Airport Advisory Board is public/private partnership formed to help promote the airport and focus on assisting with development opportunities

• Each of the target communities would be eligible for SCASDP in their own right. As such, the benefit from awarding a grant to LAL works to achieve the goals for SCASDP to a far greater degree than just the impacts on the City of Lakeland and Polk County

• This grant will be used immediately upon receipt of awardLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 23 

# Appendix A: Required Summary Information

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT-OST-2010-0124

Designated Legal Sponsor Point of Contact:
Lakeland Linder Regional Airport
3900 Don Emerson Drive, Suite 210
Lakeland, FL 33811 Contact: Eugene B. Conrad III, C.M.; Airport Director Phone: (863) 834-3298 Fax: (863) 648-3274 Email: gene.conrad@lakelandgov.net

Sponsoring Entity: Lakeland Linder Regional Airport

Dun & Bradstreet Number: 020997912



# A. Applicant Information
Not a Consortium Community now receives EAS subsidy

Interstate Consortium Intrastate Consortium Community previously received a Small Community Grant
If previous recipient, expiration date of grant: ______Lakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 24 

# B. Public/Private Partnership

Public:
1. Lakeland Linder Regional Airport 2. City of Lakeland

Private:
1. Lakeland Linder Airport Advisory Board 2. Central Florida Development Council



# C. Project Proposal
Marketing Upgrade Aircraft New Route Personnel Increased Frequency Low Fare Service Travel Bank Service Restoration Subsidy Surface Transportation Regional Service Other (specify)

Revenue Guarantee Launch New Carrier
Start Up Cost Offset First Competitive Service Study Secure Additional Carrier 

# D. Existing Landing Aids at Airport
Full ILS Outer/Middle Marker Published Instrument Approach

Localizer OtherLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 25 

# E. Project Cost

1. Federal amount requested: $750,000
2. State cash financial contribution: $0

3. Local cash financial contribution: 3a. Airport cash funds: $100,000 3b. Non-airport cash funds: $700,000 3c. Total local cash funds (3a. + 3b.): $800,000 4. TOTAL CASH FUNDING (1. + 2. + 3c.): $1,500,000
5. Local funds contributed from already-existing programs or projects included in line 3c. amount: $0

6. Local funds contributed from new commitments
or new resources included in line 3c. amount: $800,000 7. Airport In-Kind contribution: $412,000 in fee waivers
8. Other In-Kind contribution: $0 9. TOTAL IN-KIND CONTRIBUTION (7. + 8.): $412,000 10. TOTAL PROJECT COST (4. + 9.): $1,962,000



# F. Enplanements at Airport

None



# G. IS THIS APPLICATION SUBJECT TO REVIEW BY STATE UNDER EXECUTIVE ORDER 12372 PROCESS?
a. This application was made available to the State under the Executive Order 12372 Process for
review on (date) _____________. b. Program is subject to E.O. 12372, but has not been selected by the State for review. c. Program is not covered by E.O. 12372.Lakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 26 H. IS THE APPLICANT DELINQUENT ON ANY FE DERAL DEBT? (IF “YES”, PROVIDE EXPLANATION)
No Yes (explain) _____________________________________________



# Proximity of Other Airports:

• Non-hub and Low Fare Service (w/jet service): St. Petersburg, FL; 50 miles / 1 hour

• Small Hub and Low Fare Service: Orlando Sanford, FL; 90 miles / 1 hour 45 minutes

• Medium Hub and Low Fare Service: Fort Myers, FL; 215 miles / 3 hours 45 minutes

• Large Hub and Low Fare Service: Tampa, FL; 40 miles / 45 minutesLakeland Linder Regional Airport Small Community Air Service Development Grant Application – August 2010

Page | 27 

# Appendix B: Letters of Support228 S. Massachusetts Avenue  Lakeland, Florida 33801

- 5012 Phone 863/834

- 6000  www.lakelandgov.net 

### GOW B. FIELDS , Mayor

August 2 7 , 2010

The Honorable Ray LaHood Secretary U. S. Department of Transportation 400 7th Street, SW Room 10200 Washington, DC 20590

Secretary LaHood;
As Mayor of the City of Lakeland, I highly endorse Lakeland Linder Regional Airport’s grant application for the Department of Transportation’s Small Community Air Service Development Program. T he City of Lakeland share s the Airport’s goal of attracting lo w fare commercial service to the region to foster economic growth and improve quality of life options for the citizens in our community. The presence of a low fare carrier would play a pivotal role in our future growth.
Both the City of Lakeland and the Florida Department of Transportation ( FDOT) have recognized the importance of the airport to the region. The City is investing over $1.4M on infrastructure projects to prepare for commercial service. Additionally, the City provides police and fire servic es at no cost to the airport, saving over $450,000 annually from the rate base, which carriers would otherwise have to pay. FDOT in August 2010 granted the airport $2.0M to fund the improvements necessary to accommodate scheduled flight operations; these include ticketing areas, baggage claim, baggage make

- up areas, sterile areas, the security checkpoint, access controls, CCTV, additional facility square footage, and offices for T.S.A.
Lakeland Linder Regional Airport currently operates under a Part 139 Certificate and upon completion of its wor k with T.S.A., will be in a position to launch its commercial program in the beginning of 2011. Low fare service to Lakeland would not only benefit our region, but also to the small communities where the flights will operate, providing those cities with the economic benefit of stimulated air travel and lower airfares. The funds from the grant will be used exclusively at non

- primary airports, where low fare carriers can capitalize on the lower infrastructure costs to permit lower fares for passengers.
Lakeland is situated between Orlando and Tampa and its location by Polk Parkway, I

- 4 and proximity to the future high speed rail system will enable easy access to and from the Airport with ground transportation alternatives available to move them to their final destination within Polk County, or its neighboring Hillsboro ugh and Orange County. Lakeland i s less than an hour from either Tampa or from the major attractions in Orlando

### such as Disney World. Marketing money from the grant will not only be used to raise awareness about easy access from Lakeland to Orlando an d Tampa; but also to establish Polk Co unty as a convenient and affordable place to stay for tourists wanting to take advantage of both destinations. This will drive significant hotel, rental car, restaurant, and attraction revenue for the region.

Central Florida has been one of the hardest h it areas during this recession, and the increased traffic that the Air Service would bring to our region would be not only extremely beneficial to this Region, but also to the State through added tourist and business travel. We believe strongly in promotin g Air Service to Lakeland Linder Regional Airport and expect the economic, transportation and quality of life benefits to be im portant to the recovery of the

r egion.
The City of Lakeland fully supports this grant application , and I strongly encourage you r approval of the request. If you have any questions or need any additional information, please do not hesitate to contact me.
Kindest regards,

Gow B. Fields Mayor