Docket DOT-OST-2013-0120

Proposal under the Small Community Air Service 

Development Grant Program 

Boise, Idaho

Under 49 U.S.C. 41743 et seg 

DUNS # 155795230

Congressional District # ID-02
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 2

Table of Contents

I. PROPOSAL OVERVIEW 3

Technical Outline 3

II. EXECUTIVE SUMMARY 5

Statement of Deficiency 5

Proposed Grant Solution Error! Bookmark not defined.

III. THE BOISE AIR SERVICE CHALLENGE 6

An Expanding Air Service Need – Within A Shrinking Airline Industry 6

Airline Shares and Fare Trends 8

Boise’s East-Oriented Gateways Are At Capacity 8

Boise – Airline Consolidation = Higher Fares & Less Capacity 9

Boise Suffers Substantially Higher Fares To The East 11

III. THE GRANT SOLUTION 12

Allocation of Grant Program Funds 13

Mechanism: Risk-Offset 13

Air Service Development Program At Boise 14

Marketing & Community Support 15

Continuing Support – Post-Grant 15

IV. SUMMARY 16
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 3

I. Proposal Overview

Boise Airport, in partnership with the Boise Chamber of Commerce herein submits an 

application for a grant under the 2013 Small Community Air Service Development Grant 

Program.

Boise has seen substantial economic and business expansion over the last decade, 

particularly in the high-tech sectors. Historically, the air service demand at Boise has been 

primarily generated to and from points in the U.S. West. Today, however, analyses indicate 

growing demand for access to key commercial centers east of the Mississippi. Because of 

the lack of capacity and connecting hub access to key commercial centers on the US East 

Coast, Boise is at a disadvantage in attracting and expanding its now-vibrant high-tech 

economy.

Current Hub Connectivity: Insufficient. While there is service to connecting hubs at MSP and 

ORD, the load factors to these points are at the point that traffic is spilled – or, more 

typically, totally deterred – because of lack of seat capacity. There are very limited options to 

alleviate this at these specific hub airports. At MSP, Delta is not postured for additional 

growth. At ORD, the congestion and slot constraints puts United in the position of attempting 

to maximize limited airport resources. 

The Airport and the Community are requesting a grant in the amount of $700,000, with a

local hard-dollar match in excess of 25%, to attract and establish access to an additional 

east-oriented connecting hub. These have been identified as: American/JFK, Delta/Atlanta, 

United/Newark, United/IAD and JetBlue/JFK. Each of these can also open up additional 

single-connect markets for Boise on the East Coast.1

Technical Outline

A. Official Sponsor

Boise Airport

Point of Contact For This Application:

Ms. Rebecca Hupp

Executive Director

Boise Airport

3201 Airport Way, Suite 1000

Boise, Idaho, 83705

(208) 424-5601

 

B. Additional Community Members 

 

1

It is recognized that JetBlue does not have a “hub” per se at JFK, but the scope of its service allows connectivity. 

Furthermore, both United and JetBlue have shown interest – and success – in serving points in Montana from New York. 

This indicates strong potential for much larger BOI to support nonstops.
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 4

This application has wide local support. The Boise Chamber of Commerce, representing a 

coalition of business in the Boise Valley, many making cash contributions to fund the local 

match, will be the point organization representing the Community Members in this 

application. The City of Boise and the Idaho Department of Tourism will also be part of the 

community coalition supporting this application.

C. Brief Project Description: 

The application requests a grant $700,000, to be accompanied by a local cash match of 

$175,000, plus in-kind incentives to provide funding to alleviate a major air service 

deficiency – access to the Eastern United States – via a revenue-guarantee program. The 

structure of the program is envisioned as similar to others that SCASDP grants have 

successfully made possible over the last ten years.

 

D. Eligibility 

 

Boise is fully compliant with the eligibility requirements as outlined in the Docket. 

 
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 5

II. Executive Summary

 

Statement of Deficiency

Boise has evolved into one of the nation’s top high-tech regions. One of the emerging 

deficiencies is the lack of access to the commercial and high-tech centers in the Eastern 

United States. Because traditionally the focus of business interaction at Boise was with 

points in the West the airline service patterns developed over the years to meet this 

geographic need.

Today, with the expansion of business scope at BOI, particularly in the high-technology 

sectors, there is a growing deficiency in access to and from key commercial centers in the 

East.2

As will be noted below, the current hub access to the East is severely restricted by high load 

factors and inability to expand service at current east-west connecting hubs served from 

Boise.

 

The Airport and the Community have been in contact with a number of carriers that can 

address this service shortfall. In all cases, however, it has been made clear that risk-offsets

will be necessary to support the decision to add service to Boise. This grant will make that 

possible.

 

2 Map shows service offered in 2013. Nonstops to Honolulu have been discontinued, but the operator has indicated this may be 

a seasonal change, and will return in 2014.
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 6

III. The Boise Air Service Challenge

An Expanding Air Service Need – Within A Shrinking Airline Industry

Boise, as with most communities, is experiencing changes brought on by shifts in the airline 

industry. Since 2008, the airport has suffered the loss of literally one fourth of its airline 

seats – over half a million – due to changes in airline strategies, consolidation and mergers. 

This loss of air service at Boise is, unfortunately, continuing. More capacity is being cut from 

schedules in the second half of 2013.

The US airline industry is not in a growth mode. One of these is the challenge of meeting the 

new air service needs of the Boise business community within an airline industry that is 
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 7

simply not expanding its fleets or its capacity. To illustrate this point, the Airport would note 

that US air carriers are planning to cut capacity even more in the second half of 2013. This 

underscores the need for risk-offsets to convince an airline that Boise is a better use of 

resources.3

With air carriers planning on fewer flights and fewer seats, to attract the air service needed 

to address this deficiency, Boise will need the support of the grant requested herein.

US airlines are acquiring new fleet mixes. Another factor that must be considered in the 

Boise air service planning process is that major network carriers are not expanding the raw 

number of aircraft in their fleets. In fact, with the retirement of large numbers of 50-seat jets, 

the US airline industry will see approximately 230 fewer total aircraft in service in 2015, 

compared with 2012.4

Pertinent – and positive – to this grant application is the entry of new-generation 90 – 120 

seat airliners into major airline fleets. As these come into service starting in the next 12 to 

18 months, carriers will have the fleets to economically add more hub-spokes to Boise, 

particularly to the East. This grant will facilitate this process.

 

 

3 Source: Analysis of airline schedule filings with Innovata, LLC as of 7/10/12. Note that Innovata is the only “official” source to 

which IATA requires airlines to report such data.

4 There were 6,119 turbojet airliners in operation in 2012. This drops to an estimated 5,998 in 2015. The decline is entirely due 

to retirement of 50-seat jets. Concurrently, more single-aisle airliners in the 90 – 120 seat category will come into service. 

These aircraft are well suited to expansion markets from Boise to the East Coast. Source: Boyd Group International Global 

Airliner Trend & Demand Forecast 2013 – 2022.
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 8

Airline Shares and Fare Trends

The current airline share picture at BOI shows no one dominant carrier. Since 2010, both 

American and Frontier exited the Boise market. Allegiant entered the BOI market in 2013, 

offering day of week leisure flights to Las Vegas, and briefly, to Honolulu.

Boise’s East-Oriented Gateways Are At Capacity

The recorded O&D traffic at BOI is specifically the result of the service patterns 

offered – and not the true demand that exists for additional air service, particularly to 

the East. If there are no seats, the “demand” cannot manifest. That is exactly the 

situation Boise now faces.

Today, it is difficult – and as will be shown below – disproportionately expensive - to 

access Boise from key commercial centers in the Eastern United States. That is 

because the service to the key hubsite gateways – Denver/United, MSP/Delta, 

SLC/Delta, and ORD/United – is at seat capacity – particularly in the third quarter of 

the year:

 

When flights are at or above 80% load factors, it means that traffic is being spilled 

due to inability of consumers to find seats at desired times. Note that the load factors 

at BOI to and from these key Eastern gateways are all in excess of 80%. This not only 

results in high fares, but deters consumers from traveling to and from Boise. This 

cuts the region off from the economic impact of having access to the major 

commercial centers along the East Coast.

Boise consumers do not have the luxury of driving to an alternative larger airport. The 

nearest larger airport is Salt Lake City, which is over five hours – almost a full day’s 

System Psgr % Psgr Avg OW 

Fare

Alaska 589,186 24.2% $145.57

Delta 451,137 18.6% $237.48

United 506,629 20.8% $250.77

US Airways 146,089 6.0% $226.24

Southwest 731,052 30.1% $158.18

Total 2,431,216 100.0% $193.16

Full Year Third Q

United/Denver 87.6% 90.2%

United/O'Hare 87.3% 91.9%

Delta/MSP 84.0% 86.1%

Delta/SLC 86.6% 92.1%
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 9

drive – away. This is another reason that this grant is so important to Boise and the 

economy of Idaho.

The air service development staff at BOI have analyzed the potential of simply adding 

more capacity to these four gateways. The response from the carriers is that there 

are functional barriers to this. The congestion at these gateways – both in terms of 

handling more flights and handling more passengers at peak connecting-bank 

periods – largely precludes additional capacity for the foreseeable future.

 

Boise – Airline Consolidation = Higher Fares & Less Capacity

Since 2007, Boise has suffered a traffic loss of almost 21%. Average one-way fares are up by 

over 40%. In light of the booming economy of Boise, these dynamics are due entirely to 

constrictions in air service and competition. This has inflicted economic damage to the 

regional economy. The air service that this grant will make possible will largely alleviate this 

situation.

5

 While the average one-way fare in the US rose 22.3%, Boise fares increased at nearly 

double the national average, by 40.9%.

 O&D passengers have declined by 20.8%

These data clearly show that Boise has absorbed considerable damage from the on-going 

consolidation of the airline industry – far more than the rest of the nation.

 

 

5 Source: Analysis of BTS data, expressed in average OW fares paid, including federal fees and taxes. The national average is 

computed from one-way fares from the top 200 US airports.

2007 2008 2009 2010 2011 2012 Pct Change

O&D Traffic 3,267,352 3,041,460 2,745,234 2,747,006 2,818,815 2,588,281 -20.8%

Avg OW Fare $179.78 $189.98 $183.49 $201.99 $234.43 $253.28 40.9%

Load Factor 72.0% 69.5% 71.3% 73.3% 75.3% 79.9% N/A

US OW Fare $180.44 $220.76 22.3%
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 10

Traffic Declines & Fare Increases Continue 

The air service enhancement that this grant will bring to Boise will be instrumental in opening 

new capacity and new access to the Eastern US. A snapshot of fares and passengers for just 

the last two years paints a disturbing picture:

Average one-way fares (here shown net of federal taxes) are up over 23%, while quarterly 

passenger traffic – comparing the 4Q of 2012 with that of 2010 – is down almost eight 

percent.

The damage to the Boise economy is three-fold:

 Because of lack of capacity, overall fares are high (see below);

 The penalty is most severe for business travelers, which tend to book close to time of 

travel;

 Travel to and from Boise is being artificially dampened and economic impact is lost. 

Without seats, and with those available only at high costs, consumers simply do not 

make the trip.

2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q4 % Change

Psgr. 671,444 591,734 658,208 717,444 670,903 576,032 617,256 618,294 -7.92%

Net One Way Fare $156.21 $164.76 $174.06 $172.47 $182.53 $182.23 $197.12 $193.15 23.65%

2012Q3

619,634

$199.50
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 11

Boise Suffers Substantially Higher Fares To The East

One of the outcomes of the decline in airline capacity at BOI is higher fares. The fact that 

flights to East-oriented gateways are essentially full year-round deters traffic and as a result, 

business growth in the region. Fares now reflect this situation. 

To demonstrate this, fares between key markets in the West/Northwest to nine 

representative destinations in the East were compared with those at Boise. Actual fares paid 

per-ticket are not valid comparisons, due to differences in sector distances. Therefore, the 

fares charged per-mile (FPM) to these cities is the true apples-to-apples metric.

Based on this approach, it is clear that the cost of air travel is much higher at BOI than other 

Points in the region:

The data are illustrative of the air service deficiency that the grant will address.6

 

6 Source: BTS data for 2012, analyzed by Aviation DataMinerTM and expressed in fares per mile, including federal fees and 

taxes.
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 12

III. The Grant Solution

It is clear that the current access to the Eastern US is a major air service deficiency, which is 

a threat to the continued growth of Boise as a center of commerce and high-technology.

The solution is recruiting service to an additional gateway to, or at, the Eastern United States. 

The Airport’s on-going air service development efforts have identified the following as targets 

for the grant:

 American Airlines – JFK International. American has evinced interest in returning to 

the Boise market. We fully intend to pursue this in regard to initiating flight to the 

carrier’s hub at JFK.7

 Delta Air Lines – Atlanta. Delta is acquiring a wider fleet of single-aisle jets, and is 

restructuring its regional partners. Atlanta would open the entire East Coast to Boise.

 United Airlines – Newark. This service would open the East Coast to Boise, plus give 

Idaho its first nonstop service to New York/Tri-State region. United already operates 

successful seasonal service to Montana.

 JetBlue – JFK International. It is noted that JetBlue does not focus on generating 

connecting passengers at its JFK operation. However, the airline has successfully 

established service to Montana, and Boise would be a very strong addition to their 

system.

 

7 The airline also has a strong operation at New York/LGA. This remains an option, but slot restraints are a challenge at that 

facility.
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 13

 United Airlines – Washington/Dulles. As with the JFK options, this opens Boise to not 

only the New York/Tri-State Region, but also to a strong access point to other 

communities on the East Coast.

 American Airlines (US Airways) – Charlotte. At the time of this application, it is 

believed that the AA/US merger will be finalized in by the end of 2013. Because 

American has expressed interest in BOI, and since it will inherit the current BOI-PHX 

traffic base, CLT is also a very strong target to new access to points from New 

England to Florida.

These are not a wish list. It is noted that:

 They are all options to establish strong viable service from Idaho to the US East.

 All of these carriers have route strategies that fit well with the suggested expansion 

to BOI. 

 

 All of these carriers have indicated willingness to discuss expansion to the 

Northwestern United States. 

All of these options can and will address the deficiency outlined in this application. As the 

Department knows, airlines are not in an expansion mode. Therefore, the Airport and 

Community will endeavor to recruit these carriers on a first-come, first-served basis in regard 

to use of the grant funds.

Allocation of Grant Program Funds

In addition, the Airport will provide fee-waivers approximating $100,000 for the 

selected carrier and the Boise Metro Chamber of Commerce has pledged 

$10,000 for marketing, along with an additional $20,000 of in-kind donations from 

the Convention and Visitor’s Bureau, for the new service. This represents a total 

of $389,000 in local support, including in-kind and hard dollars.

Mechanism: Risk-Offset

The risk offset will be engineered similar to others that have been made possible by SCASDP 

grant awards.

1. Upon final grant approval the Airport will apprise the target carriers of the program 

and begin negotiations as appropriate. Because all four of the identified target 

carriers meet the criteria to alleviate the Boise deficiency, contact with each will be 

Local Department TOTAL

Marketing $100,000 $50,000 $150,000

Risk Abatement $159,000 $650,000 $809,000

TOTAL $259,000 $700,000 $959,000
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 14

made to establish negotiations. The Airport and Community will determine which 

offer(s) are most beneficial to Boise.

2. The negotiations will establish the specific revenue-generation requirements for the 

carrier, as well as pre-determined cost factors on a per-flight basis. Adjustment 

factors will be included for shifts in fuel price.

3. Specific schedule and reliability metrics will be established for the carrier. For 

example, it is envisioned that there will be a requirement for 98% flight reliability, exweather, and that fare levels will be commensurate with yields charged in markets 

with similar characteristics.

4. The revenues will include the local passengers to the hub, as well as an agreed-upon 

prorate for the passengers that BOI generates to the airline beyond the hub,

5. The grant period is envisioned for a two-year period, starting with the initiation of new 

service. Each six months, a settlement will be made regarding any shortfall in 

revenues.

6. The Airport will provide the Department with quarterly reports on the performance of 

the new, grant-assisted route.

These are general guidelines. The exact agreement will depend on negotiations and the full 

agreement of the Airport and the Department.

Air Service Development Program At Boise

Boise has an active, on-going and fully-staffed air service development department. The 

Boise team works with incumbent carriers to build on existing service, and has an aggressive 

program to recruit new service.

Most recently, the Airport has been successful in recruiting:

 Las Vegas – Allegiant Air

 Honolulu – Allegiant Air

 San Diego – Alaska Airlines

 

As the route map of current service at Boise clearly illustrates, the access patterns are 

consistent with the historical business orientation of the region – i.e., with commercial 

centers in the western US.

The challenge facing Boise, as noted earlier, is opening up new capacity and air service 

channels to the East. Specific to this application, the Airport has established groundwork 

with carriers that have route strategies that would benefit from adding service to the East 

from BOI. Discussions with key airlines are held on a regular basis in this regard. While the 

traffic and revenue opportunities are recognized, the near universal response from airlines is 

that risk-offset is absolutely necessary.
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 15

Marketing & Community Support

The wide range of community sectors supporting this grant illuminates the commitment from 

the businesses in the region.

The new service recruited under this grant will be supported by an already in-place marketing 

and regional promotion program. The Airport and Community will extend the current 

aggressive community outreach used to attract and support Allegiant and new Alaska Air 

flights to San Diego to the service acquired under this grant.

While the actual media and promotion mix will be tailored to the specific carrier recruited, the 

program includes pre-service social events to assure full support from the business 

community, promotional e-mail campaigns to companies and consumers based on new 

destinations accessed, and as appropriate, media placements. A key part of the marketing 

outreach will be to key businesses located in cities accessed by the new service. While it is 

important to have local support, fully 46% of consumers using Boise Airport are visitors. 

Therefore, the Airport will work with the selected airline in identifying key businesses at outstations that have a commercial relationship with industries in Boise.

Continuing Support – Post-Grant

The Air Service Development staff at BOI is prepared to continue to support the new service 

at the end of the grant period. As shown above with the new service additions, the Airport 

has the full support of the community in assuring that any new service is supported and 

utilized. 
Proposal of Boise Airport 

2013 Small Community Air Service Development Grant Program

Docket DOT-OST-2012-0120 Page 16

IV. Summary 

This application meets both the spirit and the intent of Congress in enabling the Small 

Community Air Service Development Grant Program:

 Boise has a material air service deficiency. The lack of adequate access to the East 

deters traffic and economic investment in the region. The current gateway hubs to 

the East are at capacity

 Fares to the entire Eastern United States are substantially higher than peer cities in 

the region

 The proposed solution – made possible by this grant – is based on an approach that 

has proven successful in SCASDP programs across the nation over the past decade. 

It is what airlines want when they take a risk on a new market, and it has worked.

 The airline systems identified in this application all have a track record of assisting 

communities such as Boise in building air service with the support of revenue 

support.

Based in this, the Boise Airport and the Boise Chamber respectfully request favorable 

consideration of this grant application.