# Proposal Under the Small Community Air Service Development Program

Do c ket OST

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August 1 , 2011

Submitted to: 

## U.S. Department of Transportation Docket Operations and Media Management Division

Submitted by: 

## San Angelo Regional Airport City of San Angelo
EIN # 75

- 60000659 DUNS# 13 203 6653 Texas Congressional District #11Proposal Under Small Community Air Service Development Program, Docket OST

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, San Angelo Regional Airport, August 1, 2011

i 

# T ABLE OF 

# C O NTEN TS

1 Executive Summary

................................ ................................ ................................ ......... 1
1.1 Introduction

................................ ................................ ................................ ................................ . 1

2 San Angelo Regional Airport Background

................................ ................................ ..... 2

3 Air Service Development Strategic Plan

................................ ................................ ......... 9
3.1 Introduction

................................ ................................ ................................ ................................ . 9
3.2 Current Air Service Development

................................ ................................ ............................... 9

4 Propos ed Funding Reques t

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Appendix A: Summary Information

................................ ................................ ...................... 18

Appendix B: Letters of Support

................................ ................................ ............................ 22Proposal Under Small Community Air Service Development Program, Docket OST

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1 

# 1 E XECUTIVE 

# S UMMARY

1.1 

### I NTRODUCTION
The following application for federal funding is being filed in accordance with the requirements of and pursuant to the Small Community Air Service Development Pilot Program, 4 9 U.S.C. 41743 et seq. The applicant is the San Angelo Regional Airport. The City of San Angelo has agreed to serve as the local sponsoring governmental entity for the requested grant.
San Angelo air service has been adversely affected by changes in the airline industry over the past few years. Service levels are now clearly deficient. San Angelo has the highest average one

- way fare among airports in West Texas and service by only one airline to one major hub airport.
The City of San Angelo, the San Angelo Regional Airport, and the San Angelo Chamber of Commerce (who have formed the Coalition for San Angelo Air Service Development) herein request a $500,000 grant u nder the terms of the Small Community Air Service Development Program. The federal funds being requested are being matched by a public/private contribution of $94,000 or 18.8% percent of the request amount.
Based on extensive market research, a community survey, leakage analysis, and significant community input, the region served by the San Angelo Regional Airport has a critical economic need for additional competitive access to a second major hub airport.
This proposal seeks to improve service to and from the San Angelo region by offering revenue guarantee s , marketing assistance, and operating cost relief for new air service.Proposal Under Small Community Air Service Development Program, Docket OST

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, San Angelo Regional Airport, August 1, 2011

2 

# 2 S AN 

# A NGELO 

# R EGIONAL 

# A IRPORT 

# B ACKGROUND

The San Angelo Regional Airport (SJT) is a Non

- Hub Airport, as designated by the FAA, which s erved 57,256 departing passengers in 2010. SJT rank ed 252 nd in the United States in ter ms of domestic O&D passengers in 2010.

Exhibit 2

- 1 : San Angelo Regional Airport is Located in Wes t Texas

San Angelo is the trade and services hub of a 13 county area, supported by agriculture, manufacturing, education, business and health services, military, tourism, and retirement. Vibrant, growing businesses are located in San Angelo including Goodfellow Air Force Ba se, Ethicon (John s on & Johnson), Sitel, Verizon, and the Shannon Health System.

Exhibit 2

- 2 : San Angelo Overview

Metro Area Population 111
, 823 U.S. Population Rank 362 nd
U.S. Domestic Travel Rank 252 nd

Median Household Income 40,791 (2009) Unemployment Rate 6.6%
5

- Year Forecast Population Growth 0.5%

Source: US Census, Bureau of Labor Statistics , Woods & Poole **Dallas/ Ft. Worth** 

**Houston IAH**  

### SJTProposal Under Small Community Air Service Development Program, Docket OST

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, San Angelo Regional Airport, August 1, 2011

3 The Airport serves the 13

- county Concho Valley with a passenger catchment area of almost 384 thousand within a two

- hour drive time radius.

Exhibit 2

- 3 : Catchment Area Map

Source : SH&E Analysis
Currently, the San Angelo Regional Airport has limited nonstop service and high average one

- way fares. San Angelo Regional Airport seeks to gain additional air service to a second major hub in order to increase the travel opportunities for the community and lower the cost of travel

. T he financial support of the Small Community Air Service Developme nt Program will increase significantly the Airport’s chances of successfully securing additional service operated by a new entrant airline.
San Angelo’s existing service pattern consists of three daily round

- trip nonstop flights to Dallas/Ft. Worth (DFW ). This route is served by American Airlines’ regional subsidiary American Eagle using a 64

- seat ATR

- 72 with 2,688 weekly seats (departing plus arriving)

. Drive Time Area Cumulative (hours) Population Population

0-1 122,878 122,878
1-2 261,000 383,878
2-3 609,288 993,166
3-4 5,211,738 6,204,904Proposal Under Small Community Air Service Development Program, Docket OST

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, San Angelo Regional Airport, August 1, 2011

4 Exhibit 2

- 4 : Current Nons top Service at San Ang elo, J uly 2011

Source: OAG airline schedules
In addition to (and likely because of) low levels of air service, San Angelo has the highest average one

way fare in West Texas

. San Angelo’s average one

- way fare of $ 243 is 9. 5 % higher than the State average of $ 222

. Both are factors in the proliferation of the current negative impact San Angelo’s air service has on economic development and the cost of securing air travel because of limited access and choices. It is the goal of San An gelo Regional Airport to utilize the Small Community Air Service Grant program in conjunction with the Airport’s innovative community partnerships to try and secure new additional air service to address one or all of these air service issues.

Exhibit 2

- 5 : Average One

- Way Fares at Wes t Texas Airports , CY 2010

Note: Houston includes both HOU and IAH. Source: US DOT, O&D Survey July 2011 Depart Arrive Direction Market Time Time

To SJT DFW 9:30 10:40 DFW 13:40 14:50 DFW 20:35 21:50

From SJT DFW 7:30 8:50 DFW 11:10 12:30 DFW 15:20 16:45

Average Fares Washington/ Las Los All Rank Airport Code O&D Psgrs Revenue (000s) Population Baltimore Dallas Houston Vegas Angeles Orlando Markets

1 El Paso ELP 2,795,040 $521,894 800,647 $198 $143 $161 $129 $134 $157 $187 2 Lubbock LBB 993,870 $156,534 284,890 $195 $95 $122 $131 $161 $155 $157 3 Midland Odessa MAF 875,720 $142,881 274,002 $222 $86 $138 $136 $171 $169 $163 4 Amarillo AMA 776,760 $124,539 249,881 $209 $87 $142 $134 $180 $168 $160 5 Abilene ABI 141,910 $34,290 165,252 $244 $97 $157 $215 $270 $195 $242 6 San Angelo SJT 105,750 $25,720 111,823 $267 $101 $149 $240 $234 $209 $243

W. Texas Total 5,677,200 $1,004,219 1,886,495 $204 $105 $142 $134 $147 $162 $177 Texas Total 61,362,970 $13,592,867 25,145,561 $201 $111 $117 $152 $186 $142 $222 National Total 478,052,720 $92,646,607 308,745,538 $157 $167 $172 $154 $197 $124 $194 CY 2010Proposal Under Small Community Air Service Development Program, Docket OST

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, San Angelo Regional Airport, August 1, 2011

5 In the last ten years, San Angelo’s nonstop service has undergone significant changes. The overall servic e level has fallen twice, once following September 11 th , 2001 and again in 2008 due to high fuel prices. Both falls in service involved the loss of a second carrier (Continental) and access to a second hub (Houston Intercontinental).

Exhibit 2

- 6 : His toric al Scheduled Daily Departures f rom San Angelo
, 2001

- 2011

Note: Sun Country offered 1 weekly flight using a narrowbody in 2009. Source: OAG airline schedules ; Service levels shown for August of each year.

Exhibit 2

- 7 : His toric al Weekly Departing Seats f rom San Angelo Regional Airport

Note: September of each year shown

. Source: OAG airline schedules 0 1 2 3 4 5 6 7 8 9

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Turboprop

Regional Jet

Jet Daily Departures

0 500 1,000 1,500 2,000 2,500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 DFW

IAH Weekly SeatsProposal Under Small Community Air Service Development Program, Docket OST

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, San Angelo Regional Airport, August 1, 2011

6 Following the trends in air service, passenger traffic at SJT has also fluctuated. As a result of the service cutbacks, and the increase in average fares, San Angelo has not been able to sustain a prolonged period of passenger growth.

Exhibit 2

- 8 : His toric al Pas s enger Traffic at San Angelo
, 2000

- 201 1E

Source: USDOT O&D Survey ; San Angelo Regional Airport Note: 2011 is annualized based on Jan

- June 2011 airport data growth rates applied to 2010 USDOT data

. Fare used for 2011 is 1Q 2011.
Continental first started San Angelo

- Houston (IAH) service in April 2000 stimulating total O&D passengers to grow 2 2.7 % in 2000 and average fares to drop by 8

. 1 %. Passe ngers fell in 2001 by 6.6 % following the withdrawal of Continental service in November 2001. With the re

- entry of Continental service to Houston in September 2003, O&D passengers grew 9.7 % annually (on average) from 2003 to 2007. During the same period, average fares grew only 2.4 % annually. In October 2008, Continental exited the San Angelo

- Houston market causing annual airport passengers to drop 1 4.7 % and average fares to rise by 21.0% compared to 2007.
Passengers from San Angelo travel to destinations across the US and abroad . Twenty

- seven percent of the market travels to/from the Southwestern United States (with 20.6 % of the traffic remaining in Texas). 0 20 40 60 80 100 120 140 160

$0 $50 $100 $150 $200 $250 $300

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E O&D Passengers

(thousands) Average

FareProposal Under Small Community Air Service Development Program, Docket OST

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, San Angelo Regional Airport, August 1, 2011

7 Exhibit 2

- 9 : San Angelo Domes tic O&D by Region, CY 2010

Source: US DOT, O&D Survey


### Many of the top O&D destinations are themselves major hubs

. Fifteen percent of the market is local traffic on the San Angelo

- Dallas/Ft. Worth route. Northeast **15%** Pacific **17%** Mountain **4%**

Great Lakes **9%** Central **6%**

Southwest **27%** Southeast **15%**

Florida **8%** San AngeloProposal Under Small Community Air Service Development Program, Docket OST

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8 Exhibit 2

- 10 : Top 10 O&D Markets

Source: US DOT, O&D Survey
In order to assist the San Angelo community in flying to these destinations, San Angelo Regional Airport has begun an air service development program which has focused on obtaining service to additional major hub airports. 2010 O&D Share CAGR Rank Market 2000 2010 2000 2010 '00-'10

1 Dallas/Fort Worth 17,100 16,100 18.0% 15.2% -0.6% 2 Washington/Baltimore 3,890 4,880 4.1% 4.6% 2.3% 3 Houston 9,180 3,120 9.7% 3.0% -10.2% 4 Las Vegas 2,370 3,000 2.5% 2.8% 2.4% 5 Orlando 1,330 2,530 1.4% 2.4% 6.6% 6 New York 2,990 2,330 3.2% 2.2% -2.5% 7 Atlanta 3,220 2,070 3.4% 2.0% -4.3% 8 Los Angeles 1,770 1,980 1.9% 1.9% 1.1% 9 Chicago 2,030 1,930 2.1% 1.8% -0.5% 10 Laughlin

- 1,880 0.0% 1.8%

- Subtotal Top 10 43,880 39,820 46.3% 37.7% -1.0%
Other Domestic 46,960 60,280 49.5% 57.0% 2.5% Other International 3,980 5,650 4.2% 5.3% 3.6%

Total 94,820 105,750 100% 100% 1.1% PassengersProposal Under Small Community Air Service Development Program, Docket OST

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, San Angelo Regional Airport, August 1, 2011

9 

# 3 A IR 

# S ERVICE 

# D EVELOPMENT 

# S TRATEGIC 

# P LAN

3.1 

### I NTRODUCTION
San Angelo Regional Airport is continually trying to address air service deficiencies and provide all airlines serving the SJT market the support required to ensure both short

- and long

- term success.
The proposed new incentive package to airlines provides an effective amount of marketing support and airport operational cost abatements for the first two year s of new service. The strategic plan for meeting the community’s needs through the Small Community Air Service Development Program involves a public pri vate partnership between San Angelo Regional Airport, the City of San Angelo, the City of San Angelo Development Corporation (COSADC), and the San Angelo Chamber of Commerce. These groups have formed the Coalition for San Angelo Air Service Development (“ the Coalition”) which also includes prominent businesses from the community.

The Coalition was formed to complement the Airport’s efforts in marketing the airport to prospective airlines, local and regional businesses , visitors, and other users o f the airp ort . Each member organization has provided resources to ensure that new air service opportunities are pursued quickly and jointly.
The following section explains what ste ps the Coalition has taken so far in pursuing its goals and an action plan for attr acting new hub service.

3.2 

### C URRENT 

### A IR 

### S ERVICE 

### D EVELOPMENT
In the spring of 2011, San Angelo Regional Airport implemented an air service development action plan after learning that its current, sole carrier American Airlines would be removing another flig ht from the daily schedule. The overarching goal of this plan was to attract service to another major US hub airport in order to enable the community to reach its desired destinations as well as provide easy connections for those traveling to San Angelo f rom across the United States.
In order to reach this goal, the Airport defined the following steps:

1. Determine community priorities in air service
2. Define a goal for pursuing new or expanded service
3. Engage the community around a common goal
4. Gauge airline in terest in San Angelo
5. Pursue service from target airlines In order to pursue these objectives, the Airport hired outside consultants, ICF SH&E, to both conduct a community survey and aid in defining a strategy.Proposal Under Small Community Air Service Development Program, Docket OST

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, San Angelo Regional Airport, August 1, 2011

10 Community Survey
In the first step, f our surve ys were completed for the San Angelo community:

 A passenger intercept survey

 Interviews of local business owners

 An online survey of community business travelers

 An online survey of community leisure travelers
This survey initiative was the first joint eff ort of the Coalition for San Angelo Air Service Development

. Links to the online surveys were distributed via the City of San Angelo’s website, the City’s Facebook
page, a n e

- mail from the Chamber of Commerce to its membership, and via personal emails fro m COSADC and city council members as well as local business owners. The Airport conducted the passenger intercept survey itself handing out surveys to passengers waiting in the departure lounge . The Chamber of Commerce provided contact information for th e local business interviews.
The surveys were very successful: the online surveys received 311 responses; 1 14 passenger intercept surveys were collected, and 17 local businesses were interviewed. N ot all responses were from residents of the greater San Angelo area, some inbound travelers responded as well . In all, 73% of the responses were collected from local residents reflecting a 92.3% confidence level, making certain that the surveys were representative of the community.
The surveys revealed how l ocal travelers and businesses currently use the airport as well as their priorities for new service. Major insights from the surveys are shown on the following pages.

M

any passengers currently use alternative , regional airports due to lack of service at SJT

.
Exhibit 3

- 1 : Dis tribution of San Angelo Area Pas s engers by Airport Us ed

Source: San Angelo Regional Community Survey San Angelo (SJT) 71% Dallas/Ft. Worth (DFW) 13% Midland (MAF)

9% San Antonio (SAT)

5% Austin (AUS) 2%Proposal Under Small Community Air Service Development Program, Docket OST

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11 Airfare cost is the most important factor in d eciding which airport travelers use.

Exhibit 3

- 2 : Ranking of Reas ons for Us ing Alternative Airports

Question: Rank the importance of the following factors in determining which airport you fly from

(Most Imp ortant = 6, Least Important = 1)

Source: San Angelo Regional Community Survey 2.25 3.21 3.38 3.94 4.09 4.67

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 Parking cost Availability of carrier choices Airport convenience Availability of flight times Closest airport Airfare cost

Average RankProposal Under Small Community Air Service Development Program, Docket OST

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12 Increased service frequency and more carriers are the main areas that survey respondents would like San Angelo Regional Airport to improve

.
Exhibit 3

- 3 : Community Priorities

Source: San Angelo Regional Community Survey
Defining a Goal
The results from the survey initiative clearly demonstrated that the community would like a wider variety of airlines and nonstop service t o choose from. San Angelo Regional Airport and the City of San Angelo then conducted an analysis (via outside consultants) of O&D passenger data to determine which hubs would enable the most San Angelo residents to reach their final destination. This ana lysis revealed several potential hubs including (but not limited to): Houston Intercontinental (IAH), Denver (DEN), Atlanta (ATL), Memphis (MEM), and Phoenix (PHX) among others. The Airport then defined its goal as obtaining affordable, self

- sustaining se rvice to a second major hub airport

. Engaging the Community
The Airport has been working to generate community support around the issue of air service development. Airport officials have submitted op

- eds to the local newspaper, been interviewed on the loc al news, and presented the ir air service development strategy at City Council meetings. In addition, the Airport has generated support for its pursuit of new service t hrough meetings with the Chamber of Commerce and prominent local businessmen. 76.2%

63.2%

47.5%

26.1% 20.1% 17.5% 17.0% 16.2% 13.3% 6.0% 1.8% 0.5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% **Share of Responses** Proposal Under Small Community Air Service Development Program, Docket OST

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13 Such meetings led to the form ation of a coalition together with the City and the Chamber of Commerce in order to encourage community dialogue regarding airport issues. The success of any new air service introduced at the airport will depend on community s upport.
Gauging Airline Interes t
In order to gauge airline interest in serving San Angelo, the Airport traveled to the annual Jumpstart Conference in June 2011. The Airport met with five different airlines to present San Angelo as a possible destination for their service. Overall, the meetings we re successful and helped the Airport to narrow down its list of target carriers based on perceived carrier interest.

Purs uing Service from Target Airlines
San Angelo Regional Airport is now pursuing leads generated from the Jumpstart conference including a meeting with United Airlines scheduled for August 5 th

. In addition, the Airport has kept an open dialogue with the existing carrier, American Airlines, r egarding the potential for expanded service.
The Airport has created a program to help carriers begin new service to San Angelo Regional Airport. It is this program t hat would benefit the most from the SCASDP grant. Grant funds would be use to offset

a n airline’s cost of operating at San Angelo Regional Airport, including landing fees and ground handling. Without the grant, the Airport will not be able to offer the full benefits of the program to airlines.

The next section describes the Airport’s grant request.Proposal Under Small Community Air Service Development Program, Docket OST

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14 

# 4 P ROPOSED 

# F UNDING 

# R EQUEST

The San Angelo Regional Airport, under the direction of the Airport’s Director , will have responsibility for development and management of this program on the local level . The City of San Angelo will be designated as th e legal sponsor that will accept program reimbursements.
The San Angelo Regional Airport herein requests a $500,000 grant under the terms of the Small Community Air Service Development Program to attempt to secure affordable, self

- sustaining, nonstop servi ce to a second major U.S. hub airport. The Airport is pursuing several airlines that could operate such service: United Airlines to Houston Intercontinental (IAH) or Denver (DEN), Delta Airlines to Atlanta (ATL) or Memphis (MEM), Allegiant to Las Vegas (L AS) 1

The $500,000 of requested federal money is being matched by public/private contributions of $94,000 or 18.8% of the federal funds requested. , and U.S. Airways to Phoenix (PHX).

Through discussions that the Airport has had with target airlines, the Air port has iden tified three major factors that heavily influence an airline’s decision to serve S an Angelo :
1. Revenue potential (route economics)
2. Airport operating costs (landing fees, ground handling charges , etc. )
3. Public awareness costs (marketing and promotion)
The first year of a new service is critical to an airline being successful in a new market. A SCASDP grant would help San Angelo Regional Airport to share the start

- up risk of new service; without this grant, the community would be unable to sh are as much of the risk and thus decrease the likelihood of a new carrier entering the market

. The federal funds would be used to provide a revenue safety net and offset t he airline’s operating costs.
Approximately $425,000 of the grant would be used to provide revenue guarantees to a carrier providing service to U.S. hub

. The airline would be able to draw on these funds to cover any revenue short

- fall that may occur in the first year of service. The details of the payment terms to the airline will be n egotiated with the prospective airline once San Angelo has received notice from the Department of Transportation that it has been awarded its requested grant.
In order to take advantage of the revenue guarantee funds, the participating airline will have to make the following commitments:

 Provide a schedule of at least 2 daily departures to its hub with timely connections to connecting banks

1 Although Allegiant does not operate LAS as a connecting hub, service to Las Vegas would allow San Angelo residents to interline onto one of Las Vegas’ 450 daily departing flights.Proposal Under Small Community Air Service Development Program, Docket OST

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15  The airline must agree to serve the Airport for at least one year

 The airline must meet operational reliability and sc hedule standards

 The airline must provide fares that are comparable to fares charged from similar West Texas communities on their system

Exhibit 4

- 1 : Program Funding Reques t Breakdown

The Coalition is co nfident that once new service is started and extensively promoted to the public, it will become self

- sustainable and the revenue guarantees will no longer be needed. The community has demonstrated considerable interest in new service and if fares similar to those charged at other West
Texas airports are charged for flights from San Angelo (as will be required in the payment terms negotiated with the entrant airline), the Airport is confident that revenue will be high enough to cover the airline’s costs. I f at the end of the first year of service, any portion of the revenue guarantee funds were to remain unused, the Airport may request from the Department of Transportation the option to continue to provide revenue guarantees in the second year of service to the same carrier or to provide revenue guarantees to another entrant carrier. If the revenue guarantee funds expire before the end of the grant term, the Coalition may seek funds from the City of San Angelo Development Corporation (COSADC) in order to co ntinue the air service until it is self

- sustainable. It is the goal of the Coalition to convert new service to self

- sustaining as soon as possible.
In the first year of operation, the Airport will contribute $34,000 of in

- kind funds by waiving landing fees (ap proximately $22,000) and providing fuel for ground support equipment (GSE) free

- of

- charge (approximately $12,000). In addition, the Airport will reimburse the carrier up to $20,000 for aircraft turn costs (i.e. gr ound handling). This $20,000 will be comprised of $5,000 from the City and $15,000 from the grant. In the second year of operation, these operating costs will be covered by $54,000 from the grant. Airport Public Private Private Federal Funds Year Category In Kind Dollars In Kind Dollars Requested

1 Airline Revenue Guarantee 425,000 $

1 Airline's Airport Operating Costs 34,000 $ 5,000 $ 15,000 $ 2 Airline's Airport Operating Costs 54,000 $

1 Marketing Support 5,000 $ 15,000 $ 10,000 $ 2 Marketing Support 25,000 $ 6,000 $

Total Program Funding 34,000 $ 35,000 $ 15,000 $ 10,000 $ 500,000 $

Total Federal Funds Requested by San Angelo 500,000 $ Total Matching Public and Private Funds/Contributions 94,000 $Proposal Under Small Community Air Service Development Program, Docket OST

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16 During both the first and second years of operation, approximately $30,000 will be spent on a marketing campaign from funds provided by the City and the Chamber of Commerce. The campaign will be targeted both toward informing the residents of San Angelo regarding the new service offering as well as resident s of nearby towns who may use an alternative airport today. The marketing campaign is expected

to include a combination of TV, newspaper, radio, billboard, and community project ( e.g. movie theaters and ball parks) advertisements. The Chamber of Commerce would be responsible for much of the marketing and plans to place advertisements in Texas Monthly, Family Circle, Texas Highways, inserts and publications of the Texas Tourism Industry Association, regional newspapers, and publications that target nature tourism, historic tourism, and hunting.
In addition to the public and private funds described above, the Airport will use any other means feasible and within budget to promote and support any new service. As the designated legal sponsor, the City of San A ngelo has requested its private community partner, the Chamber of Commerce, to submit its contribution plan (see the letter of support from the Chamber in Appendix B )

. In order to ensure that is own funding contribution is spent in the manner proposed, t h e city will also require its partners (both the Airport and the Chamber) to pro vide a paper trail of invoices and advertising tear sheets ( proof of placement of advertisements )

. In addition, t he Airport will brief the City and the Chamber on a monthly bas is via City Council meetings or meetings of the City of San Angelo De velopment Corporation (COSADC). The amount of money remaining in the revenue guarantee fund will serve as a metric to be monitored and reported.
The City will set a project goal of secu ring the targeted new service within 24 months from the date of receiving a commitment of funds from the Depar tment of Transportation. Within this period, there are several milestones, as shown in the table below.

Number Milestone Timing (Goal)
1 Initiati on of hub service by a new airline 3 mo nths from grant commitment
2 Initial evaluation of new service 6 months from initiation of service
3 Second evaluation of new service 12 months from initiation of service
4 Project completion 24 months from grant commitment

The first milestone occurs three months following the grant signing; by this point the Coalition plans to have negotiated a contract with a carrier to bring hub service to San Angelo Regional Airport in return for the incentive package. If aft er three months, such a contract has not been executed the Coalition will evaluate progress and re

- evaluate the strategy timing.
The second milestone will occur six months following the initiation of new air service. The Coalition will assess the amount o f the revenue guarantee funds that have been paid to the airline and evaluate the potential for the service to be self

- sustaining at the end of its first year of operation.
The third milestone occurs at the end of the first year of new service. At this po int, the level of resources remaining in the revenue guarantee fund will be identified. If all of the funds have been exhausted (i.e.Proposal Under Small Community Air Service Development Program, Docket OST

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17 the service is not self

- sustaining), the Coalition will decide if it will continue to provide revenue guarantees from its own funds. If funds remain, the Coalition will request the option to apply these funds towards another entrant carrier offering hub service.
The fourth and final milestone will occur at 24 months from commitment of the grant funds. At this point, if any grant funds remain, the Coalition may petition the DOT to extend the grant term in order to utilize the unused funds.
On an as needed basis, the Airport will provide status reports to the DOT on how negotiations are progressing. If it looks as if the obj ective of obtaining service to a second hub within 24 months will not be reached, the City would like the option to request an extension to t he grant terms.

Exhibit 4

- 2 : Project Timeline

Once the new se rvice is secured and the Department of Transportation has authorized funds, the Airport will keep the Department advised on the success of obtaining new service via such reports as the Department may require. In addition, the Airport will ask for an evaluation report from any entrant airline of the effectiveness of the program.

Task 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Carrier Negotiations

New Service Operated

Revenue Guarantee Availability

Marketing Campaign

Waiver of Landing Fees

GSE Fuel Provided Free-of-Charge

Ground Handling Reimbursement

Status Reports to Community Months from Commitment of Grant Funds

# Appendix A: 

# Summary InformationProposal Under Small Community Air Service Development Program, Docket OST

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19 SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM DOCKET DOT

- OST

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### All applicants SUMMARY INFORMATION

must

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

### submit this information with their proposal, along with a completed form SF424 on http://www.grants.gov

.

Not a Consortium Interstate Consortium Intrastate Co nsortium Community now receives EAS Subsidy Community (or Consortium member) previously received a Smal l Community Grant
If a previous recipient: Date of grant:

____ Expiration date of grant:

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

### ____

PUBLIC PRIVATE

1. San Angelo Regional Airport 1. San Angelo Chamber of Commerce

2. City of San Angelo 2.

3. City of San Angelo Development Corporation 3.

4. 4.

5. 5.

C. P ROJECT P ROPOSAL : (C HECK A LL T HAT A PPLY ) 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)

________________________________ ___________________________________________________

________________________________ ___________________________________________________Proposal Under Small Community Air Service Development Program, Docket OST

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20 D. E XISTING L ANDING A IDS A T L OCAL A IRPORT Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)



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### L INE 

### D ESCRIPTION 

### S UBTOTAL 

### T OTAL 

### A MOUNT


### 1 Federal amount requested $500,000.00

2 State cash financial contributions $0.00

Local cash financial contribution

3a Airport cash funds $0.00

3b Non

- airport cash funds $45,000.00

3 Total local cash funds (3a + 3b) $45,000.00

4 T OTAL 

### C ASH 

### F UNDING 

### (1+2+3) $545,000.00

In

- Kind contribution

5a Airport In

- Kind contribution** $34,000.00

5b Other In

- Kind contribution** $15,000.00

5 T OTAL 

### I N



### - K IND 

### C ONTRIBUTION 

### (7a +7b) $49,000.00

6 T OTAL 

### P ROJECT 

### C OST 

### (4+8) $594,000.00

F. I N 

### - K IND 

### C ONTRIBUTIONS 

### **

For funds in lines 7a (Airport In

- Kind contribution) and 7b (Other In

- Kind contribution), please describe the source(s) of fund(s) for each.

Airport In

- Kind contributions will be in the form of waived landing fees and free ground service equipment fuel. Other In

- Kind contributions will be provided by the San Angelo Chamber of Commerce and will include marketing and promotion of new air service.Proposal Under Small Community Air Service Development Program, Docket OST

- 2011

- 0119
, San Angelo Regional Airport, August 1, 2011

21 

### G. I S 

### T HIS 

### A PPLICATION 

### S UBJECT 

### T O 

### R EVIEW 

### B Y 

### S TATE 

### U NDER 

### E XECUTIVE 

### O RDER 

### 12372 P ROCESS 

### ?

a. This application wa s 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.

H. I S 

### T HE 

### A PPLICANT 

### D ELINQUENT 

### O N 

### A NY 

### F EDERAL 

### D EBT 

### ? (I F 

### “Y ES 

### ”, P ROVIDE 

### E XPLANATION 

### )

No Yes (explain)

___________________________________________________________________________

___________________________________________________________________________Proposal Under Small Community Air Service Development Program, Docket OST

- 2011

- 0119
, San Angelo Regional Airport, August 1, 2011

22



# Appendix B: 

# Letters of Support