592 Hangar Road, Suite 200 Rome, NY 13441 Telephone: 315

- 736

- 4171 / Fax: 315

- 736

- 0568 ANTHONY J. PICENTE, JR. County Executive

Chad Lawrence Acting Commissioner of Aviation

**COVER SHEET**

APPLICATION UNDER THE SMALL COMMUNITY AI R SERVICE DEVELOPMENT PROGRAM Docket DOT

- OST

- 2012

- 0069

Community

& Legal Sponsor: Oneida County Airport: Griffiss International Airport Duns Number: 075814186 Employ er Identification Number (EIN): 15

- 6000460 Congressional District: NY 24

Attached is our applicat ion for a $500,000 grant under the Small Community Air Service Development Program. The grant application is to support Oneida County’s effort to attract air carrier service to Florida vacation destinations departing from Griffiss International Airport.

The Oneida Count y Community has traditionally

supported air carrier activity and in the late eighties nearl y 100,000 passengers annuall y flew out of the former Oneida County Airport. The recent success of vacation destination, point to point vacation chart er carriers like Allegiant and Spirit Airlines has renewed interest b y Oneida County in attracting air carrier service. Oneida County recentl y completed an Air Service Feasibility Study , prepared by

R.A. Wiedemann & Associates, Inc.

The Feasibility

Stu dy provides a description of Griffiss International Airport’s air service area b y geograph y and demographics and potential passenger demand. This data is shown in Table 1 on page 2 of the stud y. The study determined that the total air service area genera tes approximately 131,000 enplanements per y ear. A cop y of the study is provided as Attachment 3

.
The Feasibility

Study analy zed potential demand for vacation travel to the Fort Lauderdale and Orlando markets served by Allegiant Airlines and Spirit Airlin es respectively, two low cost carriers that serve these markets. The stud y concluded that the Griffiss International Air Service Market can support between 40 and 45 seasonal flights to Orlando b y Allegiant Airlines and a similar number of flights to Fort Lauderdale.Prior to completing the Air Service Feasibility study , Oneida County

officials have been in contact with Allegiant Airlines regarding air service out of Griffiss International Airport. These conversations have included financial assistance for start up costs as well as the waiver of airport fees during the initial 2 years of operation. This application also includes the marketing dollars to promote and support Allegiant Service at Griffiss I nternational Airport.

Additional funding request ed in this application is required to provide temporary departure lounge and baggage make up facilities required to accommodate passenger loads of an Allegiant
MD

- 80 aircraft and required TSA screening criteria. The current plan includes the leasing of

mo dular buildings to provide additional departure lounge and bag make up space. The County

, with FAA dollars, has completed a Passenger Terminal design project and has applied for MAP funding for construction. Once the Passenger Terminal is complete, tempor ar y leased modular facilities will no longer be required.

A letter from Allegiant supporting the Count y’s effort to secure the Small Community Air Service development grant can be found in Attachment 4

.

You consideration of this application is greatl y appreciated.

Sincerel y,

Chad Lawrence Acting Commissioner of Aviation Griffiss International AirportSMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST

- 2012

- 0069

SUMMARY INFORMATION
All applicants must submit this information with their proposal, a long with a completed form SF424 on www.grants.gov

.

A. A PPLICANT I NFORMATION : (C HECK A LL T HAT A PPLY )

Not a Consortium Interstate Consortium Intrastate Consortium

Community now receives EAS subsidy

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

If previous recipient: Date of grant: Expiration date of grant: Federal Funds Requested: Carr ier(s) Service Obtained: Destination(s) Served:

B. P UBLIC /P RIVATE P ARTNERSHIPS : (L IST O RGANIZATION NAMES )

PUBLIC PRIVATE

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.

C. P ROJECT P ROPOSAL : ( CHECK ALL THAT APPLY )
Marketing Upgrade Aircraft New Route

Travel Bank Service Restoration Subsidy
Surface Transportation Regional Service Revenue Guarantee

Launch New Carrier Start

- up Cost Offset First Service
Study Secure Additional Service Other (explain below)D. E XISTING L ANDING A IDS AT L OCAL A IRPORT :

Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

E. P ROJECT C OST : D O NOT ENTER TEXT IN SHADED AREA

L INE D ESCRIPTION S UB T OTAL T OTAL A MOUNT

1 Federal amount requested

2 State cash financial contribution
Local cash financial contribution

3a Airport cash funds

3b Non

- airport cash funds

3 Total local cash funds ( 3a + 3b )

4 TOTAL CASH FUNDING ( 1+2+3 )

In

- K ind contribution

5 a Airport In

- Kind contribution **

5b Other In

- Kind contribution **

5 TOTAL IN

- KIND CONTRIBUTION

( 5

a + 5b )

6 TOTAL PROJECT COST ( 4+ 5 )

F. IN

- KIND CONTRIBUTIONS **

For funds in lines 5 a (Airport In

- Kind contribution) and 5 b (Other In

- Kind contribution), please

describe the source(s) of fund(s) for each.F

. I S T HIS A PPLICATION S UBJECT T O R EVIEW B Y S T ATE U NDER E XECUTIVE O RDER 12372

P ROCESS ?

a. This application was made available to the s tate 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 s tate for review.

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

G. I S T H E A PPLICANT D ELINQUENT O N A NY F EDERAL D EBT ? (I F “Y ES ”, P ROVIDE

E XPLANATION )

No Yes (explain)

______________________________________________________________________________

______________________________________________________________________________Griffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 1 

## Griffiss International Airport Air Service Feasibility Study – Phase 1

1. INTRODUCTION

HE G RIFFISS I NTERNATIONAL A IRPORT A IR S ERVICE F EASIBILITY Study was initiated in January 2012, with the express purpose of dete rmining local air service potential from the Utica/Rome New York area to Dayton, OH and/or other specific air service destinations. In determining air service potential, an aviation consultant, R.A. Wiedemann & Associates, Inc., was retained to work with Oneida County, NY, in a potential two-Phase project. The purpose of the first phase is to determine if there is sufficient demand in the Utica/Rome area to warrant scheduled air service to Dayton, OH. The feasibility of such a service would be determined in general terms such as potential aircraft sizes, flig ht frequencies, and aircra ft load factors. If the initial demand indicators show potential feasibility, a second phase would be conducted. The second phase of the study would examine poten tial air carriers, rout e economics, and route

structures.

It is likely that existing sc heduled airlines (FAR Part 121 carriers) would not undertake this new service because of the potential risk. Rather, scheduled charter carriers (FAR Part 135 carriers) are more likely to offer service in th is market. In the evaluation phase of the study, charter carriers indicating an in terest in serving the Utica/Rome area would be solicited and information concerning the route economics anal yses would be given to Oneida County to present to these carriers. If the Griffiss Intern ational - Dayton route analysis does not prove feasible, secondary routes will be examined, in cluding those to vacation destinations such as central Florida or Myrtle Beach, SC.

The Phase 1 assessment sets the stage for subsequent sections of the study. As such, this task includes the documentation of data collection and forecast tasks. Remaining sections in this interim report include:

 Description of the Air Service Area

 Forecast of Potential Air Service Demand 

# TGriffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 2 2. DESCRIPTION OF THE SERVICE AREA

HE AIRLINE SERVICE AREA FOR U TICA /R OME N EW York can be defined as including two counties: Oneida and Herkimer. Together, the two counties make up the Utica/Rome Metropolitan Statistical Area (MSA), as defined by th e United States Census Bureau. This service area incorporates the communities of Utica, Rome, German Flatts, Kirkland, New Hartford, Whitestown, and Herkimer. Figure 1 presents a graphic depiction of the potential air service area as defined in this analysis. There are a number of key economic and demographic measures of potential air service demand from within the region. The following factors are incl uded in this section:

 Demographic Characteristics

 Area Amenities and Tourism Attractions

 Local Business that May Attract Air Travelers to the Region Figure 1 - Utica/Rome Service Area

2.1 Demographic Characteristics

Table 1 presents the historical population tre nds for the Utica/Rome MSA, that make up the airline service area. As shown, each count y has experienced negative growth in population since 1990. Oneida County recorded the largest d ecrease in population at -8.7 percent, followed by Herkimer County at -5.9 percent. These ar eas are significantly below the New York State average population growth over the same period, which recorded a popul ation increase of 8.4 percent.

Table 1 - Historical Population Trends: Utica/Rome Service Area

1990 1995 2000 2005 20 09 Percent Change

Oneida, NY 251,191 244,736 235,045 231,563 231,044 -8.7%

Herkimer, NY 65,883 66,711 64,383 62,873 62,236 -5.9%

Utica/Rome MSA 317,074 311,447 299,428 299,436 293,280 -8.1%

New York State 18,020,784 18,524,104 18,998,044 19,330,891 19,541,453 8.4%
Source: Regional Economic Information System (REIS), Bureau of Economic Analysis, U.S. Department of Commerce 

# TGriffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 3 Table 2 shows historical PCPI for the Utica/Rome service area for the same time period. As shown, the income growth in the Utica/Rome MSA has outpaced the entire State since 1990. The combined MSA has grown 7 percent more than the State average during that period. This local socioeconomic growth is a positive benefit for potential air service demand.

Table 2 - Historical Per Capita Personal Income Trends: Utica/Rome Service Area

1990 1995 2000 2005 20 09 Percent Change

Oneida, NY $16,823 $19,561 $24,148 $28,498 $33,920 102%

Herkimer, NY $14,621 $17,513 $21,431 $26,033 $30,853 111%

Utica/Rome MSA $16,366 $19,123 $23,563 $27,972 $33,269 103%

New York State $23,710 $27,106 $34,630 $40,687 $46,516 96%
Source: Regional Economic Information System (REIS), Bureau of Economic Analysis, U.S. Department of Commerce

Employment and economic activity in the Utica/Rome area impact the demand for aviation facilities and air carrier services. Companies such as MetLife, Remington Arms, The Hartford, Damier Buses North America, Premier Aviation, PEMS Tool & Machine, and Assured Information Security provide for a well-divers ified employment base. By way of background, Table 3 displays the primary industries and employe rs in the Mohawk Valley area. Most of these businesses maintain separate br anches across the country, and therefore could make use of scheduled air service.

Table 3 - Key Industry Cluster Employ ers in the Utica/Rome Service Area

Finance & Insurance Aviation & Aerospace Distribution & Logistics IT & Cybersecurity Advanced Metals & Metallurgy Electronics & Manufacturing
Metropolitan Life Goodrich Corp Walmart Air Force Research Lab Remington Arms Idium

Defense Finance and Accounting Service Premier Aviation Family Dollar ITT Industries International Wire PAR Technology

Bank of America TECT Utica BAE Systems Damier Commercial Bus NA JH Rhodes

Bank of NY Mellon Pratt & Whitney (HMI) Assured Information Systems Special Metals Corp Davis Inotek

Utica National Insurance Co. Lockheed Martin Alion Revere Copper Products
The Hartford Insurance Group Eastern Air Defense Sector SAES Getters

Source: Economic Development Growth Enterprises Corporation (EDGE)

To better understand the employment generated by these non-government businesses, Table 4 list the larger industries within the Utica/Rome area by rank order of the total number of jobs for each industry.Griffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 4 Table 4 - Current Employment by Industr y in the Utica/Rome Service Area

Industry Type Jobs % of Total MSA Private Industry

Healthcare 22,158 24%

Retail 13,560 15%

Manufacturing 10,974 12%

Accommodations & Food Services 8,624 10%

Finance & Insurance 6,182 7%

Information 1,884 2%
Source: NYS Department of Labor

Table 5 presents historical employment tre nds for the Utica/Rome MSA. As shown, both Oneida and Herkimer County are well behind the State average employment growth percentage. In this regard, the Utica/Rome MSA had a 1.7 pe rcent growth over the 19 year period while the State had a 12.4 percent growth over the same ti meframe. Airlines will consider the economic activity in a region as a part of their market evaluation.

Table 5 - Historical Employment Trends: Utica/Rome Service Area

1990 1995 2000 2005 20 09 Percent Change

Oneida, NY 132,060 129,035 133,521 133,830 134,560 1.9%

Herkimer, NY 24,431 25,255 26,130 25,513 24,627 0.8%

Utica/Rome MSA 156,491 154,290 159,651 159,343 159,187 1.7%

New York State 9,727,348 9,511,472 10,346,129 10,648,866 10,929,753 12.4%
Source: Regional Economic Information System (REIS), Bureau of Economic Analysis, U.S. Department of Commerce

Local Businesses That May Attrac t Air Travelers to the Region

Of particular interest to this study are two of the largest single employers in the Utica/Rome service area. These companies have a profound impact on the local area, and together could form the main driver of dema nd for commuter air service between Utica/Rome and Dayton, OH.

 Air Force Research Laboratory (AFRL): Located less than a mile from Griffiss International Airport in Rome, NY, the facil ity serves as the Information Directorate headquarters for the AFRL. Their primary fo cus is on the development of information technology for today's cyberspace battlefield. In the Rome area, the AFRL supports more than 1,300 jobs.

 Defense Finance Accounting Service (DFAS): Also located less than a mile from Griffiss International Airport, the DFAS serv es to facilitate financial needs from theGriffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 5 Department of Defense including vendor pay, accounting data processing, reports production, and system support to numerous U. S. Army activities around the world. With an operating budget of $60 million, the DFAS supports over 1,000 jobs in the local area.

2.2 Area Amenities

In addition to business use, area amenities associated with the demand for airline service include, but are not limited to, the amount of tour ism, regional entertainment, and transportation infrastructure available. These area amenities and attractions in the region are described in the following sections.

Tourism and Entertainment

There are several tourist attractions in the region that may pot entially use Griffiss International Airport as an entry point. These attractions include:

 Turning Stone Resort & Casino: Located 15 miles from Griffiss International Airport, this facility includes a luxury hotel with 268 rooms and 28 suites, gambling, entertainment, golf, spa, indoor pool, and dance clubs.

 Baseball Hall of Fame: Located in Cooperstown, 54 mile s from Griffiss International Airport. Visitors from around the worl d are attracted to the Hall of Fame.

 Fenimore Art Museum: Also located in Cooperstown, this museum is one of America's premier art institutions, home to American folk art and American Indian art.

 The Adirondack Park: Located about 50 miles from Griffiss International Airport, the Adirondack Park is the largest state park in the country, encompassing nearly 6 million acres. The Park offers skiing, whitewater raf ting, canoeing, hiking, picnicking and other outdoor activities.

 Old Forge: Located in the Adirondack Mountains, 53 miles from Griffiss International Airport. Old Forge is th e home of Water Safari - New York's largest water theme park with over 50 rides & attractions. Also at Old Forge: Camping, Mini-Golf, Museums, Educational Centers, Snowmobile Recreation, and Boat Tours.

It is understood that most of th ese attractions are accessed by au tomobile. However, there is a small percentage that would use air transporta tion, particularly if a tour package was prearranged with a travel agency.Griffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 6 3. POTENTIAL PASSENGER DEMAND ESTIMATES

HE FORECAST OF POTENTIAL PASSENGER DEMAND METHODOLOGY and results are described in this report followed by conclusions and recommendations for further consideration. Based on the forecast of potential passenger demand, the study sponsors can assess the feasibility of such services and make informed decisions on air service development strategies.

Currently, Utica/Rome does not have any sc heduled commercial air service. Thus, the establishment of new airline service must ta ke into account the demand hubs which have the greatest attraction to existing Utic a/Rome air travelers who already use other airports to initiate their airline trips. Most airline travelers in the area must currently drive to Syracuse, Albany, or another airline service hub to access scheduled service.

Study sponsors suggested that Dayton, OH, ma y be a significant origin and destination (O&D) point for the area, thanks to the travel between AFRL offices in Rome and in Dayton. Currently, travelers that utilize commercial air serv ice to Dayton are likely to travel to the nearby larger airports in Syracuse and Albany to do so. While using other airports is a viable option for many, there are several employers in Utica/Rome that maintain offices in the Dayton area who could benefit from locally-based air services. It is believed that new air services could ease the travel burdens of local businesses while providi ng significant convenience to business customers, vendors, and other partners visiting from outside the region. Likewise, leisure travelers would also enjoy the benefits of improved access to the national aviation tran sportation system.

Key to estimating the need for new air servi ce in the study area is an accurate estimate of potential air passenger demand. Every characteri stic of the service is based upon this demand assessment - type of aircraft, flight frequency, fa res, hub destinations, etc. Therefore, the product of this analysis is the determination of a realistic forecast of potential demand for a commuter air service from Griffiss International Airport to Dayton, OH. In this regard, estimates of potential enplanement demand were generated using the following methods:

 Comparative Analysis

 Existing Air Travel Data from Surrounding Airports

 Newspaper Survey/E-mail Correspondence/Direct Questioning

Each of these methods will be developed and a pr eferred forecast will be selected. The preferred forecast may be selected from one of the met hodologies or it may represent an average of the three.

3.1 Comparative Analysis

Obviously, there are numerous factors that contribute to the success of an airline operation and no two community airline service areas are exactly alike. Bu t there is value in looking at the common measures of airline dema nd, including the number of enplanements-percapita that occur in different communities and the impact of larger nearby airline airports on demand. 

# TGriffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 7 For this study, a model was used that estimates total potential air travel demand from small cities located near major alternate airports . Because we know that large airports attract a certain percentage of passengers from smaller air ports, one way of estimati ng the effects of this phenomenon is to chart the information from many different airports con cerning their number of enplanements, their population, and their distance to the nearest larger airline airport. Recent statistical information from 91 communities thr oughout the U.S. was gathered in developing the model. Information input to the model includ ed: enplanements, city/county population, and distance to the nearest large hub air terminal.

One other factor was important in measuring the actual ability of an airport to capture local airline passengers: the type of air service offered. In this regard, airports with jet service enplaned more passengers per capita than did airports with turbo- prop service only. For these reasons, three estimates of local demand were generated. These estimates predicted the existing demand that could be captured with good local servic e using: 1) all mainline jet aircraft service, 2) all regional jet aircra ft service and, 3) 19-seat turboprop aircraft only.

Annual Enplanements

 Mainline Jet market potential: 131,000

 All Regional Jet aircraft market capture potential: 17,300

 19-seat market capture potential: 2,800

For 19-seat only airline se rvice, a total of 2,800 annual enplan ements would be an average level of actual demand. With regional jet service, a total of 17,300 annual enplanements would be an average level of demand. The mainline jet estimate is that of the total market potential. This is the likely amount that is generated by the MSA each year that uses Syr acuse, Albany, or other airline service hubs. It is key to note that the nu mbers produced by this comparative analysis are average levels of demand. That means that local factors coul d drive actual performance either higher or lower than the estimate.

It is also important to remember that these totals represent the total air service potential for Utica/Rome. Consequently, the demand for ai r service specifically between Utica/Rome and Dayton would only be a small per centage of these figures.

3.2 Existing Air Travel Data from Surrounding Airports

While the Utica/Rome area does not have scheduled commercial air service to Dayton, travelers to and from the region do utilize commerc ial air transportation. However, as mentioned, all of these airline services are pr ovided at airports locat ed outside the region. For this analysis, it was assumed that airports in Syracuse and Al bany attract the majority of Utica/Rome air travelers due to their close proximity to the region and their numerous air service offerings. Depending on the traveler starting lo cation in Utica/Rome, these air ports can be reached within a one to two hour drive. Therefore, one method of estimating the total or igin and destination market for scheduled air service from Utica/Rome to Dayton, is to first examine the total O&D travel between the Dayton and the larger markets of Syracuse and Albany. It can be assumed that the Utica/Rome O&D to Dayton is a subset of th e larger Syracuse-Albany to Dayton O&D total.Griffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 8 2010 Annual O&D Passengers

 Albany - Dayton 6,570

 Syracuse - Dayton 5,590

A total of 12,160 O&D passengers was recorded in 2010 from Syracuse and Albany to Dayton. It is important to recognize that this number repr esents not only the tota l air service demand for Utica/Rome to Dayton, but a much larger area en compassing Syracuse and Albany as well. It can be assumed that even if up to 25 percent of that to tal were attributed to the Utica/Rome area, that translates into an actual generated demand of 3,0 40. This is surprisingly close to the Comparative Model estimate of 19-seat aircraft commuter servi ce generating capability of the area. On a daily basis, this equates to a high estimate of 8 pa ssengers (4 enplanements and 4 deplanements).

3.3 E-mail Corresponden ce / Direct Survey

As previously stated, there are a divers e number of businesses in the Mohawk Valley region that require air travel. On January 3, 2012, a press release was published in the local newspaper that spoke about the project and urge d potential users to contact R.A. Wiedemann & Associates with input and data. Appendix A presen ts a copy of that press release. Emails and letters received from that press release were included in the survey information relative to local demand generation. From this newspaper response, the following business demand was discovered (in addition to a numbe r of personal travel requests):

 Assured Information Security (AIS): Located less than a mile from Griffiss International Airport, AIS is a software company that focuses on cyber technology, command and control, human effectiveness and signals . A ssured Information Secur ity showed to have an office in Dayton. In 2011, they could a ccount for an estimated 6 enplanements between New York and Dayton.

 Burrows Paper Corporation: Located 40 miles from Griffiss International Airport in Little Falls, NY, Burrows Paper Corporati on is a worldwide supplier of paper and packaging solutions. With a packaging bran ch located in Franklin, OH, they could account for an estimated 96 enplanements pe r year between New York and Dayton.

In addition to the newspaper response, two leading employers in the service area were contacted: the AFRL, and the Defense Finan ce Accounting Service (DFAS). Both of these companies were contacted via e-mail and telephone to gauge their annual air travel between New York and Dayton.

 Air Force Research Laboratory (AFRL): In 2011, Rome Labs accounted for a total of 496 enplanements between New York a nd Dayton, OH (334 outgoing + 162 incoming).

 Defense Finance Accounting Service (DFAS): In 2011 the DFAS was responsible for zero flights between New York and Dayton, as they have no office or affiliation inGriffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 9 Dayton that would require coordination. Prim arily, the DFAS in Rome conducts regular air travel with offices in Indianapolis, Cleveland, Columbus, and Washington D.C.

In total, of all the businesses co ntacted as a part of this study, three companies maintained offices in the Dayton area, and together could account for 598 O&D (say 600) in 2011 between Utica/Rome and Dayton. That number translates into 1.6 passengers per day. If service was only offered on the weekdays, it would result in 2.3 passengers per day.Griffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 10 4. PRELIMINARY FINDINGS

N A PRELIMINARY BASIS
, IT CAN BE concluded that the demand for airline service to Dayton, OH from the Utica/Rome area is ve ry light. Examining the demand generation from a number of different methods reveals that the total area generates roughly 131,000 enplanements per year, according to our modeling. From this total, the amount of demand that could be captured using regional jet service wa s only 17,300 enplanements. Because the distance to Dayton is more than 500 miles, a small turbop rop aircraft would not be appropriate to serve the market. This would leave the 50-seat regional jet as the smallest airc raft capable of serving the market. Even if every potenti al enplanement shown in our forecast for the regional jet were to use the service to Dayton, there would not be enough passengers to make the load factors attractive to any of the airlines.

The hypothetical best case for th e regional jet service would be:

 Minimum 2 round-trips per day, 7 days per week = 36,500 outbound seats

 Total enplanement (outbound passenger) potential = 17,300

 Passenger load factor = 47.4 percent

 Average load factor on regional je t airlines for 2010 = 76.5 percent 1

Thus, if every potential enplanemen t used the service to Dayton, th e route would still generate 29 percent less than the aver age load factor being carried by regi onal jet airlines in 2010. Without subjecting this to economic route an alysis, it can be concluded that regional jet service would not last very long without significant local s ubsidy and revenue guarantee for the route.

If the analysis considers the identifiable O&D traffic between Utica/Rome and Dayton, OH, the passenger numbers are reduced dramatically. In this regard, the analysis showed that direct travel between those cities totaled about 600 in 2011. As mentioned, this translates into 2.3 passengers per day, if service is restricted to just weekdays. No concept of scheduled airline service with such a low demand could be consid ered feasible. Even periodic charter service would be challenged to make such a routing work.

In light of the above, and considering that Allegiant Airlines has expressed interest in serving the Utica/Rome market from Griffiss In ternational, it is recommended that the route evaluation of the potential Dayton market not be undertaken. Instead, it is recommended that the Phase 2 investigation of the potential Allegiant markets be undertaken and that the route economics of that market be subjected to evaluation.

1 Source: http://www.raa.org/Portals/0/IndustryStats/usRegionalFactSheetMay2011.pdf 

# OGriffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 11 

## Griffiss International Airport Air Service Feasibility Study – Phase 2

HE ORIGINAL WORK SCOPE CALLED FOR THE economic route evaluation of the GriffissDayton market, to be followed by an examin ation of any other potential air service options. Because it was preliminarily determin ed that the Griffiss-Dayton market was not a feasible route, that intermediate task of route evaluation was postponed until after the examination of potential vacation markets for A llegiant/Spirit/etc. Therefore, the following sections present the demand estimate for vacation travel from Griffiss, to include Myrtle Beach, SC and Orlando, FL. This forecast of potential enplanements will then be subjected to an economic route evaluation.

5. POTENTIAL DEMAND ESTIMATES FOR VACATION TRAVEL

HE P HASE 1 ANALYSIS DETERMINED THAT THE potential capture of total passengers generated in the Utica/Rome area was roughly 13 percent for a regiona l jet airline service (17,300 regional jet enplanements divided by 131,000 total enplanements). For turboprop service, that capture rate dropped to 2 per cent (2,800 turboprop enplanements divided by 131,000 total enplanements). It was shown that these numbers would not support the conventional scheduled airline service model (7 day/week operations).

Rather, a non-conventional model that has b een used successfully by smaller air service markets has been developed by carriers such as Allegiant Air and Spirit Airlines. These carriers have found that by keeping costs low and providi ng very low frequencies (e.g. two flights per week), they can fill narr ow-body jets to 90+ percent load fact or capacity. Allegiant Air features low fare, all-jet non-stop service from small cities to “world-class destinations.” Their desire is to make leisure travel affordable and convenient. It is important to note that Allegiant Air has indicated an interest in serving the Utica/Rome ar ea. Thus, this analysis can be tailored to their service profile.

In addition to Allegiant Air, Spirit Airlin es offers a customer-oriented product that empowers customers to save money on air travel by offering ultra low base fares with a range of optional services for a fee, allowing customers th e freedom to choose only the extras they value. Spirit's route structure also serves vacation destin ations such as Myrtle Beach, Orlando and other Florida cities. However, Spirit also serves a number of Caribbean, Latin American, and South American destinations. It is not eworthy that Spirit Airlines f ounder, Ben Baldanza, was born in Rome, NY. It is also noteworthy that Spirit Airlines, although contacted by the County has not responded with any interest in serving Griffiss International.

The non-conventional model that was investigated for the Utica/Rome area involved the estimation of demand for popular vacation destinations that are offered by these low fare airlines. In this regard, Allegiant offers several Flor ida destinations from Plattsburgh, NY, including:

 Fort Lauderdale

 Orlando 

# T

TGriffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 12  St. Petersburg/Tampa

Allegiant also serves Elmira/C orning (Orlando, FL) and Niagar a Falls International Airport (Orlando and St. Petersburg/Tampa). From Plattsbur gh, Spirit offers flights to Fort Lauderdale, with connections from there to more than 40 de stinations in Latin America and the Caribbean. From Niagara Falls, Spirit serv es Myrtle Beach and Orlando.

Thus, the model for Griffiss is to examine the potential traffic to Florida, with possible seasonal traffic to Myrtle Beach, SC. To de velop a model that accurately projects nonconventional O&D traffic, a method was used that took a “top-down” approach. The method used a three step process to identify local demand in these vacation markets:

 Determine Potential Capture of Area (Syr acuse and Albany) O&D to These Markets

 Perform Comparative Market Analysis for Other Allegiant Cities

 Estimate Load Factors and Flight Frequencies

5.1 Regional O&D to Vacation Markets

Similar to the comparison made for the Griffiss-Dayton market, the O&D data for two vacation markets were gathered for comparison. In this regard, the Orlando and Myrtle Beach markets were examined for their O&D with Syr acuse and Albany. Because there is no airline service available from Griffiss International, it is believed that Syracuse and Albany capture most of the airline demand from the Utica/Rome area. Thus, the combined Syracuse and Albany O&D for any particular market is likely to be inclusive of the Utica/Rome passengers. With this in mind, the following O&D statistics were recorded (Table 6):

Table 6 – Albany & Syracuse O&D to Orlando and Myrtle Beach

Year Market ALB SYR Total Pax 2006 MCO 28,346 16,020 44,366 2007 MCO 27,270 18,730 46,000 2008 MCO 24,599 18,479 43,078 2009 MCO 23,159 17,484 40,643 2010 MCO 21,859 17,216 39,075

Market ALB SYR Total Pax 2006 MYR 620 481 1,101 2007 MYR 1,091 1,068 2,159 2008 MYR 1,133 580 1,713 2009 MYR 1,567 402 1,969 2010 MYR 1,185 393 1,578 Legend: MCO=Orlando, MYR=Myrtle Beach, ALB=Albany, SYR=Syracuse, Pax=Passengers

As shown in Table 6, the Orlando market ha s a combined passenger total averaging more than 40,000 per year. Myrtle Beach, on the other hand, averages less than 2,000 O&D annually. Thus, it can be quickly concluded that Myrtle Beach can be dropped from the analysis andGriffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 13 instead, the focus can be on Orlando. This is in keeping with Allegiant’s primary service pattern of providing Orlando service before adding ot her Florida destinations such as St. Petersburg/Tampa or Fort Lauderdale.

It can be assumed that if up to 25 percent of the total Orlando O&D were attributed to the Utica/Rome area, that translat es into an actual generated de mand of about 10,000 annual O&D. This translates into 5,000 enplanements and 5, 000 deplanements. For the proposed airline service to achieve its goals and the goals of the County, there is a n eed to enplane at least 10,000 passengers, annually.

5.2 Comparative Market Analysi s for Other Allegiant Cities

In progressing the analysis, the focus was shifted from all potential carriers (Allegiant, Spirit, Direct Air, etc.) to just Allegiant Air. The lack of interest from Spirit Airlines and the difficulty of getting other start- up carriers into Griffiss International made it easier to concentrate the analysis on the one carrier that has expressed interest in the Utica/Rome market – Allegiant Air. Therefore, this section examined other cities within Allegiant’s route structure that resemble Utica/Rome.

One method of predicting the local air trav eler response to Allegiant Air scheduled service to Griffiss International is to examine the characteristics of other ci ties that are currently served by Allegiant. In this regard, five citi es were identified that may have some similar characteristics with the Utica/Rome market. Initi ally, ten cities were selected for analysis, however, four of these cities have had Allegian t service for less than one year. Therefore, only six cities had data that could be used in this co mparative analysis. These cities are listed in Table 7 and include Plattsburgh, Elmira/Corning, Rockford (IL), Grand Island (NE), Ft. Collins (CO), and Pueblo (CO). Also listed ar e the Allegiant enplanement tota ls, the city populations, and the distance to the nearest larger hub.

Table 7 – Allegiant Market Enplanement Comparisons City Population Allegiant Enplanements Enplanements/Capita Distance to Hub

Plattsburg, NY 82,100 64,350 0.78 60 mi. to Montreal Elmira/Corning, NY 88,800 25,150 0.28 110 mi. to Rochester

Rockford, IL 152,900 75,600 0.49 60 mi. to Chicago (ORD) Grand Island, NE 58,800 29,750 0.51 140 mi. to Omaha
Ft. Collins, CO 144,000 31,300 0.22 60 mi. to Denver Pueblo, CO 106,600 13,300 0.12 45 mi. to Colo Spngs.
Utica/Rome 97,000 11,650 – 21,350 0.12 – 0.22 50 mi. to Syracuse

Within this analysis the data seems to indicat e that cities with Allegiant Air service that are nearby much larger markets (Montreal, Chica go, Denver) tend to attract a portion of that larger market, thereby increasing the apparent enplanement per capita ratio. Conversely, a city such as Grand Island, NE has a large capture rate of their own local population due to theGriffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 14 distance from the nearest larger alternative (Oma ha). Perhaps the closest comparative example to the Utica/Rome case involved Pueblo, CO, where the city population of 106,600 was very close to the combined population of Utica/Rome (97,000). In addition, the distance to the nearest hub (Colorado Springs) is only 45 miles – very close to the roughly 50 mile distance between Syracuse and Utica/Rome. Ft. Collins presents a somewhat similar case to the north of Denver. This community is only served by Allegiant and produces over 31,000 e nplanements annually. Given the comparisons, the most likely enplanem ent activity for Utica/Rome would be in the 0.12 to 0.22 enplanements per capita range. This would put the average potential generation of enplanements for Allegiant at 16,500 as a mid-range estimate. This estimate is very close to the hypothetical best case of 17,300 enplanements for a regional jet airline service scenario at Griffiss (see Section 3.1).

In considering the range of potential e nplanements for Allegiant Air, the most conservative estimate of demand was selected for evaluation. If the low range of demand proves to be economically feasible, it is certain that th e high range will be feasible. Selection of the low range of demand involved using the 0.12 enplanem ents per capita ratio (from the Pueblo, CO example) for Utica/Rome. This produced a low-end estimate of 11,650 when applied to the Utica/Rome combined population. That estimate is above the 10,000 enplanement level, which makes an airport eligible for FAA primary air port entitlement funding. By attracting nearly 12,000 enplanements to Griffiss International, it is likely that the Alle giant service would not only stimulate new enplanement demand from Utica and Rome, but it would also attract potential passengers from outside the immediate area because of the low fares.

5.3 Estimate Load Factors and Flight Frequencies

The next aspect of the analysis involved the estimation of aircraft lo ad factors and flight frequencies. In addition, some idea of the fares could be estimated by examining the fares from the three existing Allegiant serv ice points in NY to Orlando, FL. The load factors experienced system-wide for the scheduled Alle giant service are presented in Ta ble 8. As shown, the overall load factors for the ai rline remained near 90 percent in 2010 and 2011.

Table 8 – Allegiant Operating Statistics for 2010 and 2011
Measure 2011 2010 % Change
Passengers 1,392,092 1,295,703 7.4% Revenue Passenger Miles (000's) 1,283,218 1,190,960 7.7%
Available Seat Miles (000's) 1,431,430 1,325,364 8.0%

Load Factor 89.6% 89.9% -0.3%
Departures 10,360 9,774 6.0%
Average Passengers/Departure 134 133 0.8% Average Stage Length (miles) 904 904 0.0%

If the average load factor for the Allegiant Air system is used for Griffiss International, the following process could be used to estimate the num ber of flights:Griffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 15  Average number of seat s per departure = 150

 Average number of passengers per departure = 134

 Average load factor (passengers/seats) = 89.6%

 Total number of enplaned passengers (annual) = 11,650

 Total number of departures = 87 (say 90)

 Service for 2 roundtrips per week = 45 weeks

As shown, Allegiant Air could se rvice the Griffiss Inte rnational market with two roundtrips per week to Orlando on a seasonal basis (40 to 45 w eeks per year) and still achieve their minimum estimated passenger targets. Allegiant does provide seasonal service at many of their smaller airport locations.

Should demand for Allegiant Air’s service ex ceed the minimum totals, they could easily add frequencies or other destinations to their se rvice offerings. This has been a common growth tactic used by the airline at other service poin ts. For example, if the higher number of passengers is achieved (21,350), a total of 160 departures would be needed. Th is could transl ate into three weekly roundtrips on a year-r ound basis, or four weekly r oundtrips on a seasonal basis.

The next step in the process is to exam ine the route structure, potential fares, and economics of a start-up service at Griffiss International. From the existing fare structure, it can be noted that flights from Plattsburgh to Orlando currently range between $200 and $330 oneway. Similar flights between Elmira/Corning and Orlando range between $112 and $203, depending upon how far in advance the flights are booked. From Niagara Falls International Airport, the fares range between $120 and $226 for one-way flights. Some of these costs may be influenced by the increased de mand over “Spring Break” but they are indicative of current air fares. If air service is initiated at Griffiss Inte rnational, it is believed that similar competitive pricing would stimulate local demand for air travel.Griffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 16 6. ECONOMIC ANALYSIS OF POTENTIAL AIR SERVICE ROUTES

S PART OF PHASE 2 OF THE Griffiss International Airport Air Service Feasibility Study, potential commercial air service routes for U tica/Rome were analyzed from an economic perspective. To the extent possible, the pot ential routes were analyzed using information from the existing operations of the target airlines. Airline cost and revenue information can be found in company financial documents, U.S. Department of Transportation filings, corporate communications, and news articles. Care was taken to incorporate only that information that was most relevant to the Griffi ss situation. For instance, markets with similar stage lengths as those pr oposed at Griffiss were included in the analysis as were markets with air service profiles similar to Utica/Rome’s.

The objective of the economic analysis is to determine the financial viability of the potential Griffiss air service routes studied. Ba sed on these results, oppor tunities can prioritized and levels of community-wide support can be gauged.

6.1 Potential Routes and Service Levels

Based on the current situation at Griffiss, only one air service model appears possible. This involves a leisure-oriented air service by a niche airline. It was found in the potential passenger estimation analysis that a regularly sc heduled connecting servic e to a larger hub would not be feasible due to a lack of adequate dema nd. Thus, only one service route appears viable: a part-time schedule to a Florida destination.

Allegiant Air: Griffiss In ternational – Orlando Sanford International Airport

Allegiant Air has expressed an interest in th e Utica/Rome, NY market. In the near term, the most likely market for service at Griffiss International is Orlando, Florida. Allegiant’s business model is based on flying passengers from small, underserved communities to major U.S. leisure destinations like Las Vegas, Phoeni x and Orlando. To experience lower costs and avoid competition with larger airlines, Allegian t often serves secondary airports like Orlando Sanford International Airport in Sanford, Florid a which is 18 miles northeast of Orlando. The airline typically operates flights between markets at low weekly frequencies, but offers low fares and significant discounts on package deals in volving hotels, car rentals and other service providers. Allegiant’s Utica/Rome-Orlando servi ce would likely operate with 150-seat MD83 jet aircraft with two weekly departures.

Spirit Airlines: Griffiss International – Orlando International Airport

Although Spirit Airlines has already indicate d that they are not likely to serve this market, they were included in the analysis to provide contrast for the Allegiant Air evaluation. Spirit Airlines’ business model allows them to compete princi pally through offering low base fares. For 2011, 2010 and 2009, their average base fare was approximately $81, $77, and $85, respectively, and they have offered promotional base fares of $9 or less. Since 2007, when Spirit’s average base fare was approximately $98, they have unbundled components of their air 

# AGriffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 17 travel service that have traditionally been included in base fares, such as baggage and advance seat selection, and offer them as optional, an cillary services for additional fees (which are recorded in their financial statements as non-ticket revenue). This strategy enables their passengers to identify, select and pay for the se rvices they want to use. While many domestic airlines have also adopted some aspects of th eir unbundled pricing strate gy, unlike Spirit, they generally have not made a corres ponding reduction in base fares.

Spirit Airlines uses Airbus aircraft for all of their routes. They have three models: the A319, A-320, and the A-321. For the Griffiss market , it is assumed that th e A-319 would be used. This aircraft has 145 seats and pred ominates the Spirit Airlines fleet.

6.2 Analytical Met hodology and Results

In Phase 1 of the Feasibility Study, forecasts of the Griffiss International market showed base levels of demand adequate to support the niche market served by Allegiant or Spirit Airlines. However, due to lack of specificity in available data sources, the details of the market’s air service demand are largely un known. In order to analyze th e economics of the services described above, assumptions were developed rega rding the specific airlin es and routes. The major assumptions and results of th e analysis are described below.

Allegiant Air Analysis

The Allegiant Air analysis c onsiders two weekly roundtrip flights between Griffiss International and Orlando Sanford on MD83 aircraft with 150 seats. Allegiant is very much a point-to-point carrier an d it does not seek out passengers wishing to c onnect beyond the non-stop segments it serves. Therefore, the analysis for Griffiss International is centered on local Utica/Rome-Orlando passenger traffic and the costs and revenues associated with serving those

passengers.

As a public company, Allegiant publishe s many documents about its operations and finances. Information from these sources allo wed for good estimations of proposed operations at Griffiss International. In Allegiant’s 10-K repo rt for 2011, system-wide cost per available seat mile (CASM) was reported at 10.9 cents. Appl ying this CASM to the two weekly roundtrips with the MD83 results in annual costs as shown below:

Table 9 - Allegiant Air: Utica/Rome – Orlando Stanford

Estimated Cost 2011 CASM (cents) 10.9 Roundtrip Mileage 2,098
Available Seats/Aircraft 150 Cost per Roundtrip $34,302 Total Annual Cost $3,087,207

Allegiant’s revenue estimates are a function of the average air fare to be charged on Utica/Rome flights and the number of paying passengers onboard those flights. Another component, called ancillary revenu e, is extremely important to the Allegiant revenue model.Griffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 18 Allegiant has successfully monetized many services related to transporting leisure travelers. These services include charges for preferred s eats, onboard meals, checked baggage and travelrelated packages. So, while base airfares are low a nd attractive, Allegiant passengers tend to generate significant revenue for the airline outsid e of air fares. In a recent financial report, Allegiant reported ancillary revenue of $36.40 per passenger system-wide.

Analysis of Allegiant’s fares in its exis ting Orlando Sanford markets shows that the average one-way fare in the Utica/Rome market would be approximately $92. Add in the $36.40 in ancillary revenue and each passenger is expect ed to generate $128.40 in revenue on flights to and from Utica/Rome. Allegiant is adept at ma ximizing it revenue per flight by flying as full with passengers as possible. While industry load factor averages tend to hover around 80 percent, Allegiant often fills close to 90 percent of its seats per flight. To be conservative in our estimates, this analysis assumed Allegiant’s Utica/Rome – Orlando average load factor at 86.3 percent, which is below their system wi de average of 89.6 percent.

Table 10 - Allegiant Air: Total Grif fiss Intl. O&D Traffic and Revenue

Enplaned Passengers Total Passengers Average Fare (One-Way) Ancillary Revenue Total Onboard Revenue Total Utica/Rome Passengers 11,650 23,300 $92 $36.40 $3,466,735 Total Seat Capacity 13,500 27,000 Average Load Factor 86.3% 86.3%

Having estimated costs and revenues for the poten tial Allegiant service at Griffiss International, a final calculation yields the a nnual profit expected on the route.

Table 11 - Allegiant Air: Utica/Rome – Orlando Sanford Route Profitability Summary Total Passengers 23,300 Total Revenue $3,466,735 Average Roundtrip Fare $257
Total Cost $3,087,207 Operating Profit (Loss) $379,528 Estimated Profit (Loss) Margin 12%

The $380,000 profit estimated for the Allegiant service is the result of a sound strategy whereby costs are held low by infrequent servi ce to non-traditional airports using inexpensive aircraft. The high average load factors drive up passenger revenue for every flight that is operated. Allegiant’s service would appear to work well for a market like Utica/Rome and the concept has been a proven succe ss in many similar markets.

To estimate the upper range of route economic s – those for the higher forecast of 21,350 enplanements – an extension of the above me thodology was used to derive the results for Allegiant Air. Table 12 shows the summary of route economics for the upper range of forecast potential. As shown, more pa ssengers mean better economic pe rformance in this routing.Griffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 19 Table 12 – Allegiant Air Route Economics – Upper Forecast Range
ROUTE FACTOR Uppe r Forecast Range Distance (One way) 1,049 miles One-way Fare $128.40
RASM = $0.1224/availabl e seat mile $128.40
CASM = $0.109/available seat mile $114.34
Annual Enplaned Passengers 42,700
Total Route Seats 48,000

Total Route Revenues $6,163,084.80

Total Route Costs $5,488,368.00
Route Earnings $674,716.80
Profit Margin 12%

Spirit Airlines Analysis

The Spirit Airlines analysis considers tw o weekly roundtrip flights between Griffiss International and Fort Lauderd ale-Hollywood International Air port on Airbus A-319 aircraft with 145 seats. Spirit’s route network incl udes 98 markets served by 48 airports throughout North America, the Caribbean and Latin America. Th e majority of their rout es operate to or from their South Florida gateway at Fort Lauderdale- Hollywood International Airport. As measured by available seat miles, or capacity, for 2011 Spirit had approximately 54 percent of their capacity operating to or from Fort Lauderdale Air port providing service to the domestic U.S., the Caribbean and Latin America. Spirit is also a point-to-point carrier, except for its international destinations that connect from Fort Lauderdale, FL. However, for this analysis only the local Utica/Rome-Fort-Lauderdale passenger traffic is considered, along with the costs and revenues associated with serving that traffic.

As a public company, Spirit Airlines also publishes many documents about its operations and finances. Information from these sour ces allowed for good estimations of proposed operations at Griffiss International. In Spir it’s 10-K report for 2011, system-wide cost per available seat mile (CASM) was reported at 9. 91 cents. Applying this CASM to the two weekly roundtrips with the Airbus A-319 aircraft results in annual costs as shown below:

Table 13 - Spirit Airlines: Utica/Rome – Fort Lauderdale-Hollywood International Airport

Airline Profile Item Estimated Cost 2011 CASM (cents) 9.91 Roundtrip Mileage 2,520
Available Seats/Aircraft 145 Cost per Roundtrip $36,211 Total Annual Cost $3,403,847

Spirit’s revenue estimates are a function of the average air fare to be charged on Utica/Rome flights and the number of paying passengers onboard those f lights. Similar toGriffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 20 Allegiant, Spirit Airlines has increased their ancillary revenue on their flights, growing from about $5 in 2006 to almost $45 in 2011. These se rvices include charges for preferred seats, onboard meals, checked baggage and travel-related packages. So, while base airfares are low and attractive, Spirit Airlines passengers tend to generate significant revenue for the airline outside of air fares.

Analysis of Spirit Airlines fares in its existing Fort Lauderdale markets shows that the average revenue per available seat mile (RASM) is $0.1145. Applyi ng this factor to the one-way mileage from the Utica/Rome market to would be approximately $289. Spirit Airlines is adept at maximizing it revenue per flight by flying as fu ll with passengers as possible. In this regard, Spirit’s average load factor was 85.6 percent in 2011. In concert with these averages, this analysis assumed Spirit’s Utica/Rome – Fort Laud erdale average load fact or at 85.5 percent.

Table 14 - Spirit Airlines: Total Grif fiss Intl. O&D Traffic and Revenue

Enplaned Passengers Total Passengers Average Fare (One-Way) Total Onboard Revenue Total Utica/Rome Passengers 11,650 23,300 $144 $3,932,800 Total Seat Capacity 13,630 27,260 Average Load Factor 85.5% 85.5%

Having estimated costs and revenues for the poten tial Allegiant service at Griffiss International, a final calculation yields the a nnual profit expected on the route.

Table 15 - Spirit Airlines: Utica/Rome – Fort Lauderdale Route Profitability Summary Total Passengers 23,300 Total Revenue $3,932,800 Average Roundtrip Fare $289
Total Cost $3,403,847 Operating Profit (Loss) $528,953 Estimated Profit (Loss) Margin 16%

The $529,000 profit estimated for the Spirit Airlines service is the result of a sound strategy whereby costs are held low by infreque nt service to non-tradi tional airports using Spirit’s Ultra Low Cost Carrier (ULCC) busine ss model. The high average load factors drive up passenger revenue for every flight th at is operated. Spirit Airlines ’ part time service schedule of two flights per week would appear to work we ll for a market like Utica/Rome-Fort Lauderdale, FL.

To estimate the upper range of route economic s – those for the higher forecast of 21,350 enplanements – an extension of the above methodol ogy was used to derive the results for Spirit Airlines. Table 16 shows the summary of r oute economics for the upper range of forecast potential. As shown, more passengers mean better economic performance in this routing.Griffiss International Airport Draft Air Service Feasibility Study April 2012

R.A. Wiedemann & Associates, Inc. 21 Table 16 – Spirit Airlines Route Economics – Upper Forecast Range
ROUTE FACTOR Uppe r Forecast Range Distance (One way) 1,260 miles One-way Fare $144
RASM = $0.1145/availabl e seat mile $144.27
CASM = $0.0991/availabl e seat mile $124.87
Total Passengers 42,700
Total Route Seats 49,880

Total Route Revenues $7,196,188

Total Route Costs $6,228,316
Route Earnings $967,872
Profit Margin 16%

6.3 Summary and Findings

The economic route analysis of potential commercial airline services at Griffiss International Airport produces results that are over all consistent with niche airline experiences in other similar markets. Airline accounting practi ces and modal alternatives (e.g. automobiles) tend to hamper the realizable revenue of these services. Further, because of the sensitive elasticity of demand for aviation serv ices, operators risk significant loss of passengers if fares are raised beyond currently accepted levels.

Both Allegiant and Spirit Airlines’ jet serv ice to Florida destinations appear to be economic winners. This niche, leisure air serv ice product fits well with Utica/Rome’s market profile in terms of destination, fare level and flight frequency. It is not eworthy that the overall Origin and Destination traffic from Albany a nd Syracuse to Orlando, Fort Lauderdale, and Miami, Florida totaled 187,390 in 2011. This large number indica tes that Griffiss International should not have a problem in attracting passengers from the region. The expected route profits ranging from $380,000 to $675,000 for Allegiant Ai r service adds weight to these positive analysis results and should gene rate further interest by Allegi ant in the Griffiss market. Although Spirit Airlines has not indicated an interest in serv ing Griffiss International Airport, this analysis provides information on the potential revenue and ear nings that could be realized from initiating service.**Commercial Service** 

**Flights /Year**  **Cost /Year**  **Square Foot**  **Gallon Total**  Landing Fees 50 $300.00

- - $ 30 ,000.00 Lounge & Office Space

- $12.00 1500

- $ 36 ,000.00 Fuel Uplift Fee 50 $0.08 0 2440 $ 1 9, 52 0.00 NO PARKING FEES 50 $0.00

- - $0.00
$ 85

, 52 0

**These fees will n**  **ot be charged**

Numbers are based on 2 years

Chad Lawrence Acting Commissioner of Aviation 315

- 736

- 4171 W 315

- 736

- 0568 F clawrence@ocgov.net Oneida County Department of Aviation 592 Hangar Road, Suite 200 Rom e, NY 13441 Telephone: 315

- 736

- 4171 / Fax: 315

- 736

- 0568 ANTHONY J. PICENTE, JR. County Executive

Chad Lawrence Acting Commissioner of Avia tion592 Hangar Road, Suite 200 Rome, NY 13441 Telephone: 315

- 736

- 4171 / Fax: 315

- 736

- 0568 ANTHONY J. PICENTE, JR. County Executive

Chad Lawrence Acting Commissioner of Aviation

SMALL COMMUNITY AI R SERVICE DEVELOPMENT PROGRAM

Oneida County , Griffiss International Airport

Financial Summary

Direct Airline Operating Subsidy $100,000.00

Marketing Program $100,000.00 Startup costs including setup and rental of Modular facilities for 24 months $300,000.00

Total Request $500,000.00

In

- kind Servic e: Waiver of Airport Fees $85,520.00

Total Program $585,520.00MODSPACE

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