Small Community Air Service

Development Program Grant Proposal

For

Ithaca Tompkins

Regional Airport

DUNS # 135638682

NY Congressional District: #23

Docket DOT-OST-2013-0120
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 2

1. TECHNICAL OVERVIEW OF APPLICATION 4

Contact Information 4

Legal Sponsor of Application 4

Community Partner 4

2. STATEMENT OF AIR SERVICE DEFICIENCY 5

Grant Solution: Additional Hub Access 6

Primary Grant Targets 7

Service Potentiality – Very High 8

Grant Application Differs from FY 2005 SCASDP Award 8

A Risk-Abatement Grant Will Be Successful 9

3. ITH MARKET AREA AND AIR SERVICE DEFICIENCY 10

ITH Service Area 10

Air Service Deficiency at ITH 11

Traffic Mix 12

Airline Mix & Market Shares 13

Load Factors: Demonstrate Need For More Capacity 13

Fares – Higher At ITH 14

4. GRANT ADMINISTRATION OUTLINE 15

Allocation of Funds 15

Revenue Guarantee Program 15
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 3

Marketing Support for New Service 16

In-Kind Incentives 16

Project Term 16

Air Service Development Efforts – Past And Future 16
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 4

1. Technical Overview of Application

Contact Information

All correspondence related to the grant proposal should be directed to:

Mr. Robert Nicholas, A.A.E.

Airport Manager

Ithaca Tompkins Regional Airport

72 Brown Rd.

Ithaca, NY 14850

T: (607) 257-0456

E: bnicholas@tompkins-co.org

Legal Sponsor of Application

The Ithaca Tompkins Regional Airport (ITH) is the official sponsor of this grant 

application. 

Community Partner

Tompkins County Area Development (TCAD) joins the airport in its support of 

this grant application. TCAD’s mission is as follows: TCAD is dedicated to building 

a thriving and sustainable economy that improves the quality of life in Tompkins 

County by fostering the growth of business and employment.
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 5

2. Statement of Air Service Deficiency

The Ithaca Tompkins Regional Airport (ITH) today experiences two key 

deficiencies. 

• The first is lack of air service capacity to meet the demand generated in 

the region. Load factors are high to the point of causing traffic spill. 

• The second deficiency is an outcome of the first: high air fares.

Because of the high load factors and the strong local economy, there are choke 

points within the current air service at ITH which cause travelers to use alternate 

airports for their travel, even when ITH is the closest and most convenient for 

their purposes. 

The economic effects of these deficiencies are not inconsequential. The lack of 

capacity renders access to Ithaca difficult, and as a result makes the region less 

competitive for new investment.

As just one example, one of the major cornerstones of the regional economy is 

higher education. Cornell University, Ithaca College, and other educational 

institutions rely on Ithaca Tompkins Regional as the gateway to handle both 

domestic and international visitors. It is not well recognized, but air access is a 

fundamental part of educational institutions remaining competitive. They 

compete with other schools for the best professors, research staff and students 

from around the globe.1

Today, this is particularly true for Tompkins County, which is a thriving region of 

the southern tier of Upstate NY. The institutions of higher education and 

business interests rely heavily on the ITH air service, as is evidenced by the high 

load factors from the incumbent carriers. 

As of today, one of the main parts of the world where universities compete is in 

Asia. But for Cornell and other institutions, this access is severely constricted, 

making it difficult and expensive for travel from that region. Both incumbent 

 

1 Paucity of international access is just one example of the damage being done to the regional economy. To be clear,

additional domestic access is equally important.
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 6

airlines that offer connectivity with Asia – United and Delta – are essentially full, 

with load factors now consistently at, near, or above 85%.

Grant Solution: Additional Hub Access

The objective of this grant application is to provide risk-abatement funding to 

support access to another major US hub to increase air service access at ITH. 

Chicago O’Hare (ORD) and Charlotte/Douglas International (CLT) have been 

identified as gateways which would fit well into the ITH route network. In 

addition, because of the very close geographic proximity of Ithaca with New York 

City, LaGuardia and JFK International represent omni-directional gateways for 

ITH, and will also satisfy this air service access deficiency. 

A visual of the load factors in the ITH-DTW market is illustrative of the challenge 

faced by Ithaca.

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

DL - DTW

Limited Westbound Capacity

Due To High Load Factors

 Source: Aviation DataMinerTM analysis of DOT/BTS Form 41 Traffic

When load factors exceed 80%, that represents a situation where during all but 

short off-season periods or weekends, flights generally are booked full, and there 

is “spill” of demand. This spill can take the form of consumers driving to 

Syracuse, or – simply not traveling at all. This represents significant economic 

harm to Ithaca – a situation which the airport and the community believe can be 

addressed with a grant-supported risk-offset program.
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 7

The current ratio of trip originations (starting at ITH) to in-bound visitor trips 

supports this contention. In a market such as ITH – which is a non-leisure, 

business community – the mix of these two ratios should be approximately 50% 

- 50%. Half of the traffic being local consumers taking trips, and the other half 

consumers coming into Ithaca and later returning home. 

At Ithaca, however, almost 57% of all traffic is local originations. This indicates 

that much of the visiting traffic is using Syracuse, simply because of lack of 

capacity at ITH.

Primary Grant Targets

In the evolving state of the airline industry, there are a number of new gateway 

access points that may or may not be options. With mergers, retirement of 

smaller jet airliners, slot swaps between carriers, and major changes in the 

strategies of the few network airlines left in existence, the potentiality of service 

to any one connecting gateway can shift materially. 

The Airport recognizes this, and as a practical matter, is focused on the following 

gateways – any one of which will quickly and cost-effectively address the lack of 

access at Ithaca.2

• Chicago O’Hare (ORD) is a logical and efficient addition to ITH air service 

to serve the westbound traffic demand. Both United and American have 

connecting hubs at ORD. 

• US Airways (soon to be American) CLT hub will also provide excellent 

additional air service access, as a growing hub with great connectivity. 

• New York Metro: JFK International – American or Delta, and LaGuardia –

Delta as the key target carriers in that region.3

 

2 For small communities such as Ithaca, there is not a wide range of airline brand options, and as a practical matter, 

some access requires service to a hub that may represent some back-tracking. The option of AA-US to CLT represents 

access to the entire west/southwest of the US.

3 Adding service to either the Delta/LGA hub or the American hub at JFK will be net additive and represent new markets

from ITH.
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 8

Service Potentiality – Very High

The targets carriers of this grant application are not new to the ITH market. 

They already have a market presence, and – importantly – a strong frequentflyer program base.

• Delta – which can provide excellent access to its hubs at LGA and JFK –

also has a strong market presence at Ithaca, and that represents low-risk 

for the carrier.

• United has found strong success at ITH. For a variety of reasons, after its 

merger with Continental, and the brand switch at ITH to United, traffic 

spiked strongly. For United, adding service to O’Hare would also be a 

logical strategic move.

• Post-merger, American will be the major – but not dominant – airline at 

ITH, with a 48% market share. Adding a spoke to that carrier’s hub at 

Chicago/O’Hare represents limited risk for the carrier – risk that this grant 

will address. The option of CLT service is essentially the same. To make 

either market work, AA begins with a strong, installed base of frequent 

flyers. It is also likely that when the brand changes from “US Airways” to 

“American” a demand-spike as experienced with the UA/CO merger may 

be experienced.

Grant Application Differs from FY 2005 SCASDP Award

The Ithaca Tompkins Regional Airport was awarded a Small Community Air 

Service Development Program grant award for $500,000 in 2004. The objectives 

of this grant were met, and were entirely different from addressing the current 

air service deficiencies. That earlier grant had the following goals: 

• market definition study and demand analysis

• new airport business model analysis

• air service options analysis including scheduled service, charter, etc.

• creation of new marketing program

• carrier partnering funding

The current SCASDP application differs significantly from the previous grant 

award. The intent of this grant is solely as a revenue guarantee and marketing of 

new service, and does not include any studies or analyses. 
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 9

A Risk-Abatement Grant Will Be Successful

As illustrated on the following pages, there is no question that today, Ithaca is 

underserved. This not only inflicts higher fares to access the region, but also 

harms the competitiveness of the region in the global economy.

The grant request herein is simple, straight-forward, and proven highly 

successful over the last decade. An airline will be offered a clearly-defined 

revenue/risk abatement program, based on tightly defined airline cost factors 

and operational performance requirements.

The Airport and the community strongly feel that Ithaca will join the list of 

airports that have seen air service improvements as a result of the Small 

Community Air Service Development Program.
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 10

3. ITH Market Area and Air Service Deficiency

ITH Service Area

The Ithaca Tompkins Regional Airport encompasses approximately 220,000 

people within a 45 minute drive time to the airport. Due to the fact that Elmira 

Corning Regional Airport (ELM) and the Greater Binghamton Airport (BGM) are to 

the south of ITH, and with Syracuse Hancock International Airport (SYR) to the 

north, there is a finite catchment area. 

With SYR service levels being approximately 5x greater than ITH, there is 

significant passenger traffic leakage due to the greater levels of air service. A 

primary outcome of this grant award will be to recapture a portion of the leaking 

passenger traffic. 

ITH Primary Service Area
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 11

Air Service Deficiency at ITH

As previously mentioned, the current hub gateways that are served from Ithaca 

are now at the capacity point resulting in choke points for passengers traveling 

to/from the region. 

Detroit (DTW), Newark (EWR), and Philadelphia (PHL) all experience high load 

factors and operational inefficiencies at EWR and PHL are also of concern, 

causing travelers to use other regional airports instead of ITH. 

As the map below illustrates, both ORD (588 miles) and CLT (557 miles) are 

examples of logical connecting hubs that will address this deficiency.

Upon grant approval, the Airport will initiate further discussions with carriers 

operating connecting hubs at each of these airports. (United and American at 

Chicago/O’Hare, and American/US Airways at CLT.) The carrier with which the 

most attractive agreement can be reached will be the selectee.
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 12

Traffic Mix

Being a globally-relevant community, Ithaca attracts travelers from all over the 

globe. This is represented by the fact that it is markets to the west that have the 

strongest demand – San Francisco, Los Angeles, Denver, and Dallas – Ft. Worth 

are in the top ten. The service made possible by this grant will facilitate this 

unique demand pattern. 

ITH Top 25 Domestic O&D Markets - CY 2012

Rank Market Psgr PDEW % Originating 

@ ITH

Gross OW 

Fare % of Pax

1 SFO 15,879 21.7 58.9% $321.68 7.1%

2 LAX 13,295 18.2 57.2% $307.96 6.0%

3 ORD 10,501 14.3 55.7% $179.61 4.7%

4 BOS 8,427 11.5 57.1% $171.65 3.8%

5 DEN 7,983 10.9 58.2% $235.79 3.6%

6 ATL 7,160 9.8 56.1% $197.90 3.2%

7 DFW 6,737 9.2 53.3% $205.66 3.0%

8 MSP 6,449 8.8 53.2% $205.54 2.9%

9 TPA 6,438 8.8 59.0% $187.26 2.9%

10 SEA 6,326 8.6 56.7% $333.21 2.8%

11 FLL 6,057 8.3 56.1% $194.03 2.7%

12 DCA 5,624 7.7 63.8% $225.06 2.5%

13 MCO 5,328 7.3 65.8% $198.75 2.4%

14 DTW 5,107 7.0 42.2% $305.45 2.3%

15 PHX 4,948 6.8 66.4% $267.56 2.2%

16 RDU 4,820 6.6 53.4% $177.82 2.2%

17 SAN 4,493 6.1 60.7% $297.88 2.0%

18 IAH 4,360 6.0 53.4% $249.40 2.0%

19 LAS 3,994 5.5 77.1% $262.92 1.8%

20 RSW 3,448 4.7 68.2% $220.25 1.5%

21 EWR 3,229 4.4 8.4% $132.95 1.5%

22 CLT 3,101 4.2 49.0% $219.94 1.4%

23 IND 2,884 3.9 50.0% $199.08 1.3%

24 PHL 2,655 3.6 47.4% $219.39 1.2%

25 MIA 2,601 3.6 63.5% $263.76 1.2%

Total 151,842 207.4 56.5% $237.97 68.3%

Attention is directed to the trip origination rates, particularly in the top ten O&D 

markets. All are well over 50% - which is an indicator that there are barriers to 

in-bound traffic generation.4

 

4 Local consumers are a mix of leisure and business travel – typically with some flexibility and with knowledge of the local 

airport. Visitors, which typically have time-definite travel needs, are less flexible, and will use other airports – in this case, 

Syracuse – due to high load factors resulting in seats not available directly to ITH.
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 13

Airline Mix & Market Shares

Ithaca Tompkins Regional Airport is served by three network airline systems.

Airline Share at ITH

CY 2012

Airline System Psgr % Psgr % Originating 

@ ITH

Avg Gross 

OW Fare

Routing 

Efficiency

Delta 64,399 29.0% 55.1% $252.30 93.1%

United 50,626 22.8% 54.4% $237.86 84.3%

US Airways/AA 107,415 48.3% 59.2% $250.03 84.9%

Total 222,441 100.0% 56.9% $247.94 87.0%

Note that the routing efficiency – the difference between nonstop miles for all 

passenger itineraries vs. the miles consumers actually travel, as through 

connecting hubs – is below 85% for both United and for US Airways. This 

indicates that there is substantial backtracking in many O&D markets, making 

travel more expensive and time-consuming. Fares are expressed as average oneway, including federal fees and taxes.

Keeping in mind that, a) the top O&D markets at ITH are dominated by points in 

the West, and b) the only true western connecting hub – Delta/DTW –

experiences nearly 90% load factors on ITH-DTW segments, this routing 

efficiency number indicates that there will be support for the service noted in this 

application.

Load Factors: Demonstrate Need For More Capacity

Load factors – shown for the second half of 2012 – are exceptionally high –

particularly to Detroit (Delta) and Newark (United).

Hub Load 

Factor

DTW - Delta 83.7%

EWR - United 79.8%

PHL - US Airways 74.2%

ITH Average 78.3%
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 14

Fares – Higher At ITH

In addition to lack of available seat capacity at ITH, the average one way gross 

fares also indicate a deficiency. Over the last four years, ITH fares have been 

consistently higher than the national average, and were approximately 12% 

higher in CY 2012. The potential of opening access to another major network 

hub at ITH will bring some fare discipline to the market, allowing for recapture of 

passengers leaking to other regional airports. 

ITH vs. National Avg. Fare Comparison

2009 2010 2011 2012

ITH Avg. OW Gross Fare $200.77 $210.87 $242.22 $247.94

National Avg. OW Gross Fare $179.85 $196.58 $214.52 $221.54

ITH Fare Premium vs. National Avg. 11.6% 7.3% 12.9% 11.9%
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 15

4. Grant Administration Outline

Allocation of Funds

The primary purpose of the funding is for a revenue guarantee/risk mitigation 

mechanism to offset risk to the airline for the commencement of new service. In 

addition, a portion of both the grant and the community match will be used for 

marketing and advertising the new service. This will help build awareness in the 

community and ensure maximum ridership once the service begins. 

Revenue 

Guarantee

Marketing/

Advertising 

Support

TOTAL

SCASDP Grant - DOT $550,000 $200,000 $750,000

Community Matching Funds $200,000 $0 $200,000

TOTAL $750,000 $200,000 $950,000

As previously mentioned, the community match will come from Tompkins County 

Area Development, a local organization focused on economic development within 

the region. 

Revenue Guarantee Program

The revenue guarantee program is intended to offset the risk of operating a new 

route at ITH, and will largely resemble other successful revenue guarantee terms 

that the DOT is familiar with from previous SCASDP awards. Specifically, the plan 

will include the following, subject to approval from the DOT:

• The cost – on a per segment basis – will be agreed upon, including a 

reasonable profit hurdle. 

• The new service will generate significant new system revenues (i.e., 

passengers beyond the hub) and therefore a portion of this new revenue 

must be accrued to the community’s side of the ledger. Local revenues on 

the flight will be allocated fully to the segment, while connecting/beyond 

revenues will be allocated based on an agreed proration methodology.
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 16

• Schedule performance will be a critical component in building traffic. 

Therefore, it is proposed that an agreed upon flight reliability factor 

(~98%) and on time arrival metric (at the hub) will be included in the 

agreement.

• It is proposed that the accounting for costs and revenues be accomplished 

six months in arrears. The airline will provide advanced booking reports 

and passenger traffic/revenue performance reports to the airport each 

month. The actual passengers and actual revenue accrued to the 

community will be compared to the agreed-upon costs, and settlement 

made.

Marketing Support for New Service

The Community has an aggressive marketing, advertising and regional 

communications program to be applied to the new service.

The focus will be on the total air service advantages in using ITH, with emphasis 

on the destinational additions of the new service. Pertinent to the region, the 

educational institutions will assist in identifying key travel generators in other 

parts of the nation and other parts of the globe, and surgically-targeted 

marketing will be applied to these sources of new traffic.

In-Kind Incentives

ITH is prepared to offer 12 months of landing fee waivers to a carrier that starts 

one of the new routes proposed in this application. This is an estimated benefit 

of $102,930. 

Project Term

The Ithaca Tompkins Regional Airport respectfully requests that the term of the 

grant be one year from the start of new service. 

Air Service Development Efforts – Past And Future
2013 Small Community Air Service Development Grant Proposal

Ithaca Tompkins Regional Airport (ITH)

Docket DOT-OST-2013-0120 Page 17

The Airport has had strong success in maintaining existing capacity over the past 

five years – a period when many small communities have seen major traffic 

drops. The Airport was successful in recruiting Northwest (now Delta) – which 

has proven a success. 

The Airport maintains contact with both incumbent and potential new entrants 

on an on-going basis. The Airport is cognizant, however, that there are very few 

airlines left in branded operations, and there are fewer still that have strategies 

that involve small markets such as Ithaca. Therefore, the efforts are to 

concentrate on incumbents, carefully monitoring changes in strategy and fleets 

at each.

This is the foundation of this grant application. Going forward, subsequent to the 

end of the grant period, the Airport is confident that the approach taken over the 

past five years will result in growing the new service into the future.