## Proposal Under the Small Community Air Service Development Program

Date: August 27, 2010 Applicants: Wilkes-Barre/Scranton International A irport

Luzerne County, PA; Lackawanna County, PA
DUNS Number: 042623728
+4 Number: 7531 Congressional Districts: 10, 11

Contact: Barry J. Centini Wilkes-Barre/Scranton International Airport 100 Terminal Drive, Suite 1 Avoca, PA 18641 Phone: (570) 602-2000
E-mail: airport@flyavp.com

Docket #: DOT-OST-2010-0124Page 2 of 28



### I. EXECUTIVE SUMMARY

The Wilkes-Barre/Scranton International Airport and the Counties of Luzerne and Lackawanna are submitting this application for g rant funds available under the Small Community Air Service Development Program to address the deficiencies in the Airport’s air service, includin g high fares and an insufficient
level of service. These deficiencies are the result of the unique characteristics of the air transportation system in the Greater Nor theastern Pennsylvania region.

Air travelers using the Wilkes-Barre/Scranton Inter national Airport (AVP) pay among the highest fares of any similar sized airpor t in the country. AVP has aggressively recruited both legacy and low cost airl ines to enter its market for many years, but few carriers are willing to enter ev en AVP’s top O&D markets. This is in part because there are multiple airports served by low cost carriers, as well as legacy carriers with more flights, which surr ound the WilkesBarre/Scranton International Airport. As a result, AVP’s fares are not only high, but they are not competitive with the other airports . The lower fares and increased number of flights at the surrounding airp orts are sufficient to lure passengers from Wilkes-Barre/Scranton International Airport to airports more than 100 miles away, but these airports are not clos e enough to genuinely offer

convenient service.

Successful attraction of a low cost air carrier to A VP’s key markets has a track record of improving the cost differential in some A VP markets. However, successfully retaining those low cost carriers long- term has proven difficult. Maintaining legacy air carrier service to other AVP key markets has improved cost differentials in those markets. However, the n umber of seats on the legacy carriers has been steadily decreasing, which is forcing Northeastern Pennsylvania travelers to travel to another airport for their travel needs. Our described program is designed to address these conc erns.

With this in mind, the Airport continues to provide exceptional service to its community, while having no control or responsibility over the main variable in air travel – the customer. Currently, AVP has five legacy carriers, and three of those are handled by one airline. While airlines h ave in the past been more prone to provide their own employees for ground hand ling and customer support positions, the last few years have put that in jeopardy as airlines consolidate their employees at smaller airports.

For several years, the U.S. airline industry has be en struggling to control costs. Controllable costs have been dropping over the last half-decade, with carriers using methods, such as reducing airline employee wag es and the actualPage 3 of 28



### outsourcing of on-airport jobs. Many carriers are opting not to start additional markets without the Airport and community picking up the charges for those start-up costs. Also, many carriers that have serv ice at airports are decreasing their flights dramatically to control costs.

The current trend is a continued increase in the AVP passenger market leaking to alternative airports and a serious imbalance in Pennsylvania’s airport system. With no air carriers operating in some of AVP’s top O&D markets, there is a significant gap between the demand for service and the level of service being provided. Past experience in these markets has pro ven they can be operated successfully and profitably, however, current carrie rs at AVP have chosen not to seek operating to those markets from AVP.

The results of past efforts utilizing Air Service De velopment funds have been positive. Delta Connection’s (formerly Northwest Ai rlink’s) nonstop Detroit service, which began in April 2005, continues to pro vide a good destination to business travelers, with acceptable fares.

Wilkes-Barre/Scranton International Airport and its supporting communities have continually been engaged in marketing the airp ort and look forward to improving the air service at AVP with the additional support of the DOT Small Community Air Service Development Program.

II. SERVICE DESCRIPTIONS

A. Wilkes-Barre/Scranton International Airport’s Service Area

Wilkes-Barre/Scranton International Airport (AVP) i s a non-hub airport located in Northeastern Pennsylvania serving a surr ounding population of approximately one million residents. AVP is within a two-hour drive of several major east coast cities including Philadelp hia and New York, is approximately eight (8) miles from Wilkes-Barre, PA and Scranton, PA, and is centrally located among four (4) major inter state highways.Page 4 of 28 (Source – Google Maps)



### The Wilkes-Barre/Scranton/Hazleton metro-area has a population of over 600,000. There are over one million potential air p assengers within a one-hour drive time and just fewer than three millio n located within a 90-
minute drive time.

Within a One-Hour Drive Time is a Market of Over 1 Million Potential Air Passengers

(Source – SH&E Analysis, US Census, Maptitude)



### Wilkes-Barre/Scranton’s airport service is bound by Philadelphia International Airport and Lehigh Valley Internation al Airport to the south, each offering substantially greater numbers of sche duled flights and often significantly lower fares. These two airports are app roximately a 100- and 60-mile drive, respectively, from the Wilkes-Ba rre/ScrantonPage 5 of 28 

### International Airport. One factor of great concern to the Partnership submitting this application is that Southwest Airlin es offers competing service at Philadelphia International Airport and i s offering significantly lower fares to many of AVP’s top markets. An additi onal factor is that both AirTran and Allegiant Air provide low fare optio ns to leisure destinations at Lehigh Valley International Airport . AirTran is also providing nonstop Atlanta service from Lehigh Valle y International Airport.

To the east, John F. Kennedy International Airport, Newark Liberty International Airport, LaGuardia Airport and Stewart International Airport also compete with AVP, offering travelers numerous l ow fare options. As large hubs, John F. Kennedy International, Newark Li berty International and LaGuardia offer substantially more scheduled fl ights and direct service options both domestically and international ly.

B. Description of Community’s Existing Air Service

There are currently five (5) major airline networks s erving the WilkesBarre/Scranton International Airport. These carrier s are US Airways, Continental, Delta, United and American. Combined, these carriers serve a total of five (5) major hubs including Charlotte, Chicago, Detroit, Newark and Philadelphia.

The table below indicates the type of aircraft flown b y each carrier, equipment type, seats and frequency at AVP. It is important to note that
all service to and from AVP is flown with either a re gional jet or turboprop, yet O&D research and previous experience indicate that many AVP markets can support significantly larger aircra ft such as Boeing 737 or the new Embraer 170/190 series.

Carrier Market Code A/C Stops Daily Daily Monthly Monthly Seats/
Type Depts Seats Depts Seats Flight

AA Chicago ORD ER4 0 1.0 50 31 1550 50 AA Chicago ORD ERD 0 1.0 44 31 1364 44

CO Newark CLE DH2 0 3.8 140 117 4329 37

DL Detroit DTW CRJ 0 2.9 147 91 4550 50 UA Chicago ORD ER4 0 2.0 100 62 3100 50

US Charlotte CLT CR7 0 1.0 70 31 2170 70 US Philadelphia PHL CRJ 0 3.7 187 116 5800 50 US Philadelphia PHL DH3 0 0.1 3 2 100 50 US Philadelphia PHL DH8 0 2.2 81 68 2516 37

TOTALS 17.7 822 549 25479 46

Source: OAG Schedule Tapes, August 2010, via Sabre Airline SolutionsPage 6 of 28



### The chart below shows the cities serviced by AVP’s cur rent airlines from

AVP.

Source: OAG Schedule Tapes August 2010



### AVP Primary Catchment Area Usage, Retention & Total Booked

Rank Market PDEW AVP
Retention AVP Primary

Leakage Total

Booked

1 MCO 45.0 34% 88.6 133.6
2 LAS 26.7 37% 45.1 71.8
3 ORD 26.0 34% 49.8 75.8
4 TPA 20.8 33% 42.6 63.4
5 ATL 18.9 39% 29.4 48.3
6 PHX 17.6 37% 30.6 48.2
7 PHL 17.5 87% 2.6 20.1
8 LAX 15.5 34% 30.5 46.0
9 FLL 15.0 32% 32.2 47.2
10 DFW 12.7 34% 24.7 37.4
11 RSW 11.4 41% 16.1 27.5
12 CLT 11.3 30% 27.0 38.3
13 DEN 11.3 35% 20.7 32.0
14 CVG 10.8 67% 5.3 16.1
15 PBI 10.6 36% 18.8 29.4
16 BNA 9.4 53% 8.3 17.7
17 DTW 9.4 32% 20.4 29.8
18 STL 9.1 54% 7.8 16.9
19 MSP 8.5 43% 11.3 19.8
20 SAN 8.3 35% 15.6 23.9
21 JAX 8.0 37% 13.4 21.4
22 SEA 7.9 31% 17.6 25.5
23 MCI 7.5 43% 10.0 17.5
24 SFO 7.4 38% 12.1 19.5
25 IND 6.5 35% 12.0 18.5
26 IAH 6.1 28% 15.5 21.6
27 MIA 5.9 21% 22.6 28.5
28 CUN 5.8 10% 54.4 60.2
29 RDU 5.7 33% 11.5 17.2
30 SAT 5.6 29% 13.6 19.2
Subtotal 382.4 35% 710.1 1,092.5
Other 221.1 31% 498.9 720.0
Total 603.5 33% 1,209.0 1,812.5

Source: Adjusted SABRE MIDT and D.O.T. 10 % Coupon Sample for YE April 2010Page 7 of 28



### For 2009, Wilkes-Barre/Scranton International Airpo rt reported 413,001 combined enplaned & deplaned passengers. However, t he true Primary Catchment Area size is estimated to be triple that number (see table above), which indicates that AVP is leaking passenge rs to surrounding airports, with the primary reasons, based on market research, being competition from low-fare markets, frequency and av ailable seats.

US Airways has traditionally dominated the AVP marke t. Delta Connection has recently cut flights , which increases opportunities for other airlines. In 2009, Delta Connection has elim inated Cincinnati service (January 2009), which was AVP’s #9 O&D Market for CY 2008, and has eliminated Atlanta (August 2009), which was A VP’s #5 O&D
Market for CY 2008.

New service in the past several years include: Unite d Express to Washington Dulles in October 2004; Continental Conn ection to Boston in March 2005; Hooters Air to Orlando, Fort Lauderdale , St. Petersburg in October 2005; Myrtle Beach Direct Air to Myrtle Bea ch in June 2008; Continental Connection to Newark in October 2008; an d American Eagle to Chicago O’Hare in June 2010.

Source: OAG Schedule Tapes August 2010; Wilkes-Barr e/Scranton International Airport, YE 2Q 2010Page 8 of 28 AVP New Service During the Past Several Years

New Service Airline Began Ended Reason for Ending (1) Washington-Dulles, DC United Express October 2004 A ugust 2005 Shuttle America became US Airways
carrier – United did not have other
aircraft to maintain route Detroit, MI Northwest Airlink April 2005 N/A Orlando, FL Hooters Air October 2005 March 2006 Ris ing Fuel Costs Fort Lauderdale, FL Hooters Air October 2005 March 2006 Rising Fuel Costs St. Petersburg, FL Hooters Air October 2005 March 2 006 Rising Fuel Costs Myrtle Beach, SC Hooters Air March 2006 March 2006 Rising Fuel Costs Boston, MA Continental Connection March 2005 March 2007 Reduction of Continental Connection flights into BOS system wide Pittsburgh, PA US Airways Pre-1980 June 2007 Reduct ion of US Hub Myrtle Beach, SC Myrtle Beach Direct Air June 2008 August 2008 Seasonal service Cleveland, OH Continental Connection October 2008 Moving AVP’s service from #3 CO Hub
to #1 CO Hub Newark, NJ Continental Connection October 2008 N/A Cincinnati, OH Delta Connection March 1995 January 2009 Reduction of DL Hub Atlanta, GA Delta Connection May 2002 August 2009 P oor load factors; AVP-ATL route over 700 NM (too far for CRJ) Chicago, IL (O’Hare) American Eagle June 2010 N/A (1) “Reasons for Ending” comments were given by Airline Representatives to AVP

AVP Outbound Seats History

Annual Percent
Outbound Change vs.

Year Seats Prior Year

2001 366,429

2002 390,586 6.6%
2003 293,017 -25.0%

2004 338,714 15.6%

2005 396,224 17.0%

2006 331,991 -16.2%

2007 291,678 -12.1%

2008 278,908 -4.4%

2009 265,041 -5.0%

Seats
Month ('10 vs. '09) Diff (+/-) % Change
January 185 0.9% February -3,611 -17.5%

March -2,142 -9.1% April -1,684 -7.4% May -2,296 -9.7%

June 94 0.4%

Total for Period -9,454 -7.0%

Source: Wilkes-Barre/Scranton International AirportPage 9 of 28



### Losses in the past several years include: United Ex press to Washington Dulles in August 2005; Hooters Air to Orlando, Fort Lauderdale, St. Petersburg and Myrtle Beach in March 2006; Continen tal Connection to Boston in March 2007; US Airways to Pittsburgh in Ju ne 2007; Myrtle Beach Direct Air to Myrtle Beach in August 2008; Co ntinental Connection to Cleveland in October 2008; Delta Connection to C incinnati in January 2009; and Delta Connection to Atlanta in August 200 9.

With these losses, as well as the significant reduct ion in available seats (shown above), it is anticipated that the decrease in passenger enplanements (shown below), as well an increase in lo ad factors, will continue to drop throughout the remainder of 2010, even with the addition of American Eagle in June 2010.

AVP Enplanement History

Percent Annual Change vs.

Year Enplanements Prior Year

2001 189,036

2002 202,178 7.0%
2003 181,715 -10.1%

2004 201,765 11.0%

2005 221,348 9.7%

2006 212,865 -3.8%
2007 220,893 3.4%

2008 223,130 1.3%

2009 207,168 -7.2%

Enplanements
Month ('10 vs. '09) Diff (+/-) % Change
January -312 -2.0% February -2,227 -14.2%

March -858 -4.8% April -397 -2.2% May -851 -4.6%

June 587 3.1%

Total for Period -4,058 -3.9%

Source: Wilkes-Barre/Scranton International AirportPage 10 of 28



### To the south of AVP, Lehigh Valley International Air port has been increasing seats, which we feel is a detriment to AV P. Within the past year at ABE:

• AirTran has added new service to Orlando, Atlanta and Fort Lauderdale (beginning November 4, 2010) with 117-sea t Boeing
717 aircraft

• Allegiant Air has added new service to Myrtle Beach, and moved its
Florida service from Sanford to Orlando with 150-sea t MD-80
aircraft

• American Eagle added new service to Chicago O’Hare wi th three daily flights using 50-seat aircraft

• Direct Air added new service to Myrtle Beach and Pu nta Gorda with 150-seat Boeing 737 aircraft

• Delta has increased seat capacity to Atlanta from o ne daily 50-seat
aircraft to one 142-seat MD-88 aircraft

• Delta has increased service to Detroit from three t o four daily flights using 50-seat aircraft

• United has increased service to Chicago O’Hare from three to four daily flights using 50- and 66-seat aircraft

C. Analysis of Greater Northeastern Pennsylvania Needs and
Deficiencies

Over the past several years, AVP experienced a seve re reduction in jet service to Philadelphia and Pittsburgh, which inclu ded a reduction in the number of seats available. Additionally, the regio n does not currently have competitive year round low fare service to its number one O&D market: Orlando. Service to Orlando performed well when it was introduced in 2004, with the positive trend continui ng in 2005 and 2006,
until Hooters Air discontinued all air service due to multiple factors, including internal scheduling problems, rising fuel costs, airline scheduling problems and problems with their service model.

Atlanta, another AVP top O&D market, continued to p erform well since returning to AVP in 2002, but ended in August 2009. Delta’s primary reason for discontinuing the flight is that the sta ge length was too long for a regional jet.

As seen below, AVP is ranked as #6 by Delta’s Load F actors at ATL.Page 11 of 28 

### Delta Ranking by Load Factor at ATL

Source: U.S. D.O.T. Report T-100 YE Dec 2009.

All airlines (with the exception of American), incl uding Continental, Delta, United and US Airways, remain at constant capacity, with no future growth on
the horizon.

US Airways has had no growth to Charlotte since the y began with one daily flight in April 2005, with the exception of an occa sional short-term period extra Saturday only flight.

Delta has had no growth to Detroit since they began with three daily flights in April 2005. In October 2005, the Detroit flights d ecreased to twice daily because of problems with Mesaba Airlines. The thir d daily flight was reinstated in February 2009 after Delta discontinued all servi ce from AVP to Cincinnati.

United has had no growth to Chicago since they bega n with three daily flights in October 1998. In May 2003, the Chicago flights decreased to twice daily, and United has been satisfied with the performance to date with no additional

increase in service.

As seen below, 

### AVP is ranked as #11 to Charlotte, #19 to Detroit a nd #23 to Chicago O’Hare.Page 12 of 28 

### US Airways Ranking by Load Factor at CLT

Source: U.S. D.O.T. Report T-100 YE Dec 2009.



### Delta Ranking by Load Factor at DTW

Source: U.S. D.O.T. Report T-100 YE Dec 2009.Page 13 of 28 

### United Ranking by Load Factor at ORD

Source: U.S. D.O.T. Report T-100 YE Dec 2009.



### Although there has been no growth at AVP to these fo ur destinations listed above, airports near AVP, i.e. Lehigh Valley International, have been gaining seats, even though there load factors are lower than AVP’s.

From the charts listed above:

• For ATL, AVP is ranked #6; ABE is ranked #72

• For CLT, AVP is ranked #11; ABE is ranked #50

• For DTW, AVP is ranked #19; ABE is ranked #72

• For ORD, AVP is ranked #23; ABE is ranked #69

As seen below, here are the latest load factors from AVP to specific destinations, most destinations have load factors a t 87% or higher.

Sources: U.S. D.O.T. T-100 Reports and Wilkes-Barre /Scranton International AirportPage 14 of 28



### Another challenge for AVP is the fact that competin g airports are marketing their low-fare service to travelers in th e AVP market area, through television, newspaper, radio and billboard ( as seen below). The billboard below was actually placed less than 1⁄2 mile from the entrance

to AVP.

In light of these circumstances, AVP continues to a ctively pursue competitive low-fare service, as well as maintaining or even increasing legacy air service, to its top markets.

AVP’s air fares remain extraordinarily high for the level of service offered and the economic demographic of the area as evidenc ed in the table below. As shown on the chart below, AVP’s fares remai n above average and significantly higher than select markets with si milar sized O&D

passengers.Page 15 of 28 AVP vs. Selected U.S. Cities

- O&D Passengers & Avg

. Fare

Total Daily Avg. O&D Daily O&D

Rank Market Code State Enp. Psgrs Enp. Psgrs Fare Psgrs Psgrs 1 Rochester RST MN 151,359 415 $218 303,099 830 2 Appleton ATW WI 263,838 723 $214 522,567 1,432 3 Chattanooga CHA TN 265,181 727 $208 524,285 1,436 4 Asheville AVL NC 294,018 806 $204 582,663 1,596

5 Wilkes-Barre/Scranton AVP PA 173,606 476 $203 349,423 957 6 Rapid City RAP SD 284,856 780 $202 570,187 1,562 7 Wilmington ILM NC 283,369 776 $201 570,334 1,563 8 Durango DRO CO 148,685 407 $196 296,852 813 9 South Bend SBN IN 296,074 811 $196 589,771 1,616 10 Grand Junction GJT CO 207,759 572 $194 414,402 1 ,135 11 Peoria PIA IL 231,807 635 $193 461,012 1,263 12 Wausau CWA WI 161,322 442 $193 320,314 878
13 Erie ERI PA 116,009 318 $192 231,328 634 14 Medford MFR OR 279,429 766 $187 559,285 1,532 15 Redmond RDM OR 222,030 608 $185 441,989 1,211 16 Daytona Beach DAB FL 203,478 557 $185 411,235 1, 127 17 Allentown ABE PA 358,444 982 $173 713,499 1,955 18 Newburgh SWF NY 186,726 512 $166 371,271 1,017 19 Bloomington-Normal BMI IL 253,328 694 $156 504,1 98 1,381 20 Aguadilla BQN Other 242,339 664 $154 480,025 1,3 15 21 Nantucket ACK MA 141,321 387 $112 294,395 807 22 Atlantic City ACY NJ 536,335 1,469 $ 93 1,070,0 89 2,932

Average 241,014 660 $183 481,010 1,318
(Source: U.S. D.O.T. O&D Survey YE 2Q2010, via Sab re Airline Solutions, OAG Schedule Tapes



### III. STRATEGIC PLAN FOR USING GRANT FUNDING

A. Program Goals

The primary goals of this grant proposal are to incr ease enplanements at AVP by attracting new service and expanding current service, to address insufficient air service by attracting replacement service for such services recently lost, and to address unreasonably high far es to AVP’s prime markets by increasing competition between existing a ir carriers and new air carriers. Currently, the AVP markets are under served and it is apparent that travelers in the region are choosing to use alternative airports offering more scheduled service to a broad er range of
destinations with lower fare service.

Historically, the Northeastern Pennsylvania market has supported new service as it enters the region and it is anticipat ed by all Partners in this program that this trend will continue with a high lev el of success.

Specifically, the four program goals are as follo ws:Page 16 of 28 

### 1. Restore daily service to:

a. Hartsfield-Jackson Atlanta International Airport

b. Washington-Dulles International Airport

c. Pittsburgh International Airport

2. Secure daily service to Lester B. Pearson Internati onal Airport in Toronto, Canada.

3. Secure service to leisure destinations, i.e. but no t limited to, Central Florida Region (Orlando/Tampa/St. Petersburg ), Fort Lauderdale, West Palm Beach, Punta Gorda, Las Vegas , and/or Myrtle Beach.

4. Entice existing air carriers at AVP to expand their service with additional flights/markets.

From the successful implementation of these program goals, AVP anticipates a direct affect of reduced fares in key markets and a significantly increased level of service.

B. Target Audiences

The following is a list of target audiences for AVP:

• Low-fare carriers

1. AirTran Airways

2. Allegiant Air

3. Direct Air

4. Southwest Airlines

5. Vision Airlines

6. X Air

• Legacy carriers

1. Air Canada

2. American Airlines

3. Continental Airlines

4. Delta Air Lines

5. United Air Lines

6. US Airways

• Regional carriers

1. Cape Air

2. Colgan Air

3. Gulfstream International AirlinesPage 17 of 28



### C. Plan Implementation and Timetable

Key milestones for the Program will be:

• Securing meetings with carriers to negotiate new ser vice (October 2010 – March 2011).

• Announcing new service with local community marketing campaign (January 2011 – June 2011).

• Starting up new service (January 2011 – October 2011 ).

• Monitoring and analyzing monthly traffic numbers of new service (January 2011 – June 2012).

• Monitoring and analyzing fares to the target market s (January 2011 – June 2012).

IV. AIRPORT AND BI-COUNTY PARTNERSHIP FUNDING AND

MONITORING ASSURANCES

The Wilkes-Barre/Scranton International Airport will act as the sponsor of the program. The sponsorship will be managed by Barry J. Centini, Airport Director, and the program will be managed by an airp ort administration and bicounty partnership representing the counties of Luz erne and Lackawanna. The partnership will meet on a regularly scheduled month ly basis to review the progress and schedule of the program and more often when the program requires it.

At each meeting, goals, objectives, and milestones will be evaluated to measure progress. Additionally designated members of the P artnership will be assigned to evaluate any changes in the current market envir onment and to identify any potential obstacles. The Partnership will prepare an d submit quarterly reports to provide assurances that both the DOT and communit y funding are being spent in the manner proposed. At the time that new service is secured and the funding is successfully allocated, the quarterly re ports will provide the DOT updates on the success of the service.Page 18 of 28



### V. FUNDING DESCRIPTION

A. An airline to restore daily Atlanta service, minimu m one (1) daily flight. Risk abatement subsidy for daily service for a mini mum of six (6) months.

FAA: $ 200,000 Luzerne County: $ 25,000 Lackawanna County: $ 25,000 Total: $ 250,000

B. An airline or airlines to provide nonstop Washingto n (DC), Pittsburgh and/or Toronto service, minimum two (2) flights per w eekday per destination. Risk abatement subsidy for daily serv ice for a minimum of six (6) months.

FAA: $ 50,000 Luzerne County: $ 10,000 Lackawanna County: $ 10,000 Total: $ 70,000

C. An airline or airlines to provide service to one or more nonstop leisure destinations, i.e. but not limited to, Central Flor ida region, Fort Lauderdale, West Palm Beach, Punta Gorda, Las Vegas and/or Myrtle Beach, minimum two (2) flights per week per destinati on. Start-up costs for provided service.

FAA: $ 125,000 Luzerne County: $ 40,000 Lackawanna County: $ 40,000 Airport: $ 50,000 Total: $ 255,000

D. Local Market Advertising to provide needed baselin e support for new and/or restored airline service with a new or present airline, as well as support of additional flights with present airline s ervice.

FAA: $ 200,000 Luzerne County: $ 25,000 Lackawanna County: $ 25,000 Airport: $ 50,000 Total: $ 300,000Page 19 of 28



### E. TOTALS:

FAA: $ 575,000 Luzerne County: $ 100,000 Lackawanna County: $ 100,000 Airport: $ 100,000

Total: $ 875,000

VI. COMMUNITY ACTIVITIES

The Airport and supporting community organizations have been aggressively and actively marketing the airport for several year s. This effort has included many initiatives all undertaken to ensure that the Northeastern Pennsylvania community is served in the best possible way.

Specific activities have included: * Direct subsidy to carriers * Targeted carrier meetings * New service cost reduction incentives including:

- Advertising and marketing assistance for, but not limited to, television, radio, and newspaper coverage - Waiving of landing fees and space rentals for a n egotiated period - Donate local billboard advertising space and coun ty bus system promotion - Develop and direct a new service information maili ng initiative to local travel agents and community businesses * New service kick-off and promotional meetings with local travel agents * New service local community marketing support ini tiatives * Annual attendance and participation at ACI’s annu al Marketing “JumpStart” conference

VII. RESULTS OF PAST AIR SERVICE DEVELOPMENT EFFORTS

The results of past efforts utilizing Air Service De velopment funds are positive. Service continues to Detroit, MI, via Delta Airline s’ express carrier Pinnacle Airlines with load factors averaging 80% during 2008 , and averaging 88% during 2009, and averaging approximately 89.2% for the first seven months of 2009. Detroit service began at AVP in April 2005. Service to Orlando, FL, did better than expected despite Hooters Air’s end of s ervice in March 2006 due toPage 20 of 28



### its own internal financial issues, with load factors averaging in the 83% to 86% range by the end of their tenure at AVP.

The Detroit service continues to provide a good dest ination to business travelers, with acceptable fares. The Orlando servic e provided a great level of service for business and leisure travelers, with a v ery competitive fare structure.

With our past history and experience of being able to utilize funds for positive gains, we are confident that an award to Wilkes-Barre /Scranton International Airport will bring positive results.

VIII. PROGRAM SPONSORS

Program Legal Sponsor: Program Partners:

Barry J. Centini, Airport Director Luzerne County, PA Wilkes-Barre/Scranton Lackawanna County, PA International Airport Greater Pittston Chamber o f Commerce
100 Terminal Drive Greater Scranton Chamber of Com merce Avoca, PA 18641 Greater Wilkes-Barre Chamber of Commerce 570/602-2000 – Phone Lackawanna Co. Convention & Visitors Bureau 570/602-2010 – Fax Luzerne Co. Convention & Visit ors Bureau bcentini@flyavp.com Pocono Mountains Visitors Bureau

Attachments: 1) Attachment 1 – Gulfstream International Airlines 

### Letter of Support 2) Attachment 2 – US Airways 

### Letter of Support 3) Attachment 3 – X Air 

### Letter of Support 4) Attachment 4 – Cape Air 

### Letter of Support 5) Attachment 5 – Delta Air Lines 

### Letter of Support 6) Attachment 6 – Direct Air 

### Letter of Support 7) Attachment 7 – Program Partners “In-Kind” Contribut ionsPage 21 of 28 ATTACHMENT 1

Page 1

Order: 2010-7-16

Docket DOT-OST-2010-0124

The Honorable Raymond LaHood Date: August 23, 2010 Secretary of Transportation U.S. Department of Transportation 1200 New Jersey Ave., SW Washington, DC 20590

Dear Mr. LaHood,

I am writing today in support of Wilkes-Barre/Scran ton International Airport and their application for a Small Community Air Service Development Grant.

As you may be aware, the dissolution of the former US Airways hub in Pittsburgh has left a huge hole i n terms of regional air service in western Pennsylvania. More than thirty c ities within 350 miles of Pittsburgh that former en joyed non-stop service remain without that link. Besides being the second largest city in Pennsylvania, Pittsburgh is a true regional business center and while the Greater Pittsburgh International Airport has done a tremendous job of restructuring itself a s a true Origin/Destination traffic generator, it is noteworthy that the only o ther Pennsylvania city being served by air from Pit tsburgh is Philadelphia. Despite being the anchor of western Pennsylvania bu siness, cities such as Latrobe, Erie, Wilkes-Barre/ Scranton, Williamsport, Allentown, and even the State Capital in Harrisburg remain without a direct air link. Pennsylvania is the sixth largest state in the union in terms of population and this lack of regio nal access is problematic and economically restrict ive.

Gulfstream International Airlines continues to work diligently to restore service from the Greater Pit tsburgh International Airport to airports throughout the region and would welcome the possibility of adding Wilkes-Barre/ Scranton a s a destination. Conceived in cooperation with the Greater Pittsburg h International Airport, the “Pittsburgh Connector” , has the intent of restoring service in several regional markets, focu sing on Pittsburgh International Airport as its “hu b”. We remain very interested in serving the Wilkes-Barre/Scranton – Pittsburgh m arket and restoring that community’s link to the bu siness center of western Pennsylvania.

As with any new venture, the start-up costs constit ute a good deal of our forecast outlay. We fully en dorse WilkesBarre/Scranton’s effort to secure a SCASD Grant to aid in launching and marketing this venture.

We are confident that the restoration of this vital air link will benefit economic development in Penn sylvania. These funds will assure a means to grow and promote this new travel option and allow Gulfstream International to focus on providing seamless connectivity and operational reliability to assure this new service succeeds and the people of Pennsyl vania benefit.

Very truly yours,

Mickey Bowman Vice President of Corporate Development

Gulfstream International Airlines

3201 Griffin Road Ft. Lauderdale, FL 33312

• 3201 Griffin Road, 4th Floor • Fort Lauderdale • FL • 33312 •

• (954)985-1500 • fax (954)985-5245 • cell (270)303-8719 •

• mbowma@gulfstreamair.com • www.gulfstreamair.com •Page 22 of 28 ATTACHMENT 2

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Docket DOT-OST-2010-0124Page 23 of 28 ATTACHMENT 3

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Docket DOT-OST-2010-0124Page 24 of 28 ATTACHMENT 4

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Docket DOT-OST-2010-0124Page 25 of 28 ATTACHMENT 5

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Docket DOT-OST-2010-0124Page 26 of 28 ATTACHMENT 6

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Docket DOT-OST-2010-0124Page 27 of 28 ATTACHMENT 7

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Docket DOT-OST-2010-0124

In-Kind Contributions
Wilkes-Barre/Scranton International Airport

Small Community Air Service Grant

Luzerne County Convention and Visitors Bureau

In-Kind Item Amount

Staff Fulfillment $2,080.00
Mailing and Distribution of Visitor Guide $820.00

Attendance at Trade Shows $2,500.00

Ad Placement - Annual Visitors Guide $2,500.00
Ad Placement - Pennsylvania Pursuits Magazine $1,00 0.00
Total In-Kind: $8,900.00

Lackawanna County Convention and Visitors Bureau

In-Kind Item Amount

Staff Fulfillment $3,500.00
Mailing and Distribution of Visitor Guide $1,200.00

Attendance at Trade Shows $2,000.00
Half Page Ad Placement - This Week in The Poconos $ 1,300.00
Total In-Kind: $8,000.00

Pocono Mountains Visitors Bureau

In-Kind Item Amount

Staff Fulfillment $2,200.00
Mailing and Distribution of Visitor Guide $1,000.00

Attendance at Trade Shows $1,500.00
Ad Placement on 800poconos.com $2,800.00

Total In-Kind: $7,500.00

Greater Pittston Chamber of Commerce

In-Kind Item Amount Insert in Monthly Newsletter for 12 months $3,500.0 0
Total In-Kind: $3,500.00Page 28 of 28 ATTACHMENT 7

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Greater Wilkes-Barre Chamber of Commerce

In-Kind Item Amount Full Page Ad Placement - Annual Dinner Program $500 .00 Full Page Ad Placement - Legislative Breakfast $500 .00 Full Page Ad Placement - Awards Luncheon Program $5 00.00

Staff Fulfillment $2,000.00

Total In-Kind: $3,500.00

Greater Scranton Chamber of Commerce

In-Kind Item Amount
Ad Placement in News Briefs Newsletter $2,000.00

Web Site Exposure
Total In-Kind: $2,000.00APPENDIX B

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SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT-OST-2010-0124

SUMMARY INFORMATION

All applicants must submit this information with their proposal, along with a completed form SF424 on

http://www.grants.gov

.

A. A PPLICANT I NFORMATION : ( CHECK ALL THAT APPLY )

⌧ Not a Consortium Interstate Consortium Intrastate Consortium

Community now receives EAS subsidy

⌧ Community (or Consortium member) previously recei ved a Small Community Grant

If previous recipient: Date of grant: 09/1 5/2004

Expiration date of grant: 08/17/2006

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

Public Private

1. Wilkes-Barre/Scranton International Airport 1. Greater Pittston Chamber of Commerce

2. Luzerne County 2. Greater Scranton Chamber of Commerce

3. Lackawanna County 3. Greater Wilkes-Barre Chamber of Comm.

4. 4. Lackawanna Co. Conv. & Visitors Bur.

5. 5. Luzerne Co. Conv. & Visitors Bureau

6. Pocono Mountains Vacation Bureau

C. P ROJECT P ROPOSAL : ( CHECK ALL THAT APPLY )

⌧ Marketing ⌧ Upgrade Aircraft ⌧ New Route

Personnel ⌧ Increase Frequency ⌧ Low Fare Service

Travel Bank ⌧ Service Restoration ⌧ SubsidyAPPENDIX B

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Surface Transportation ⌧ Regional Service Other (specify)

Revenue Guarantee ⌧ Launch New Carrier

⌧ Start Up Cost Offset First Service

Study ⌧ Secure Additional Carrier

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 :
1. Federal amount requested: $ 575,000

2. State cash financial contribution: $ 0

3. Local cash financial contribution... $ 300,000

3a. Airport cash funds: $ 100,000

3b. Non-airport cash funds: $ 200,000

3c. Total local cash funds (3a. + 3b.): $ 300,000

4. TOTAL CASH FUNDING (1. + 2. + 3c.): $ 875,0 00

5. Local funds contributed from already-existing

programs or projects included in line 3c. amoun t: $ 0

6. Local funds contributed from new commitments

or new resources included in line 3c. amount: $ 0

7. Airport In-Kind contribution: $ 280,000 (est.)

(amount & description) min. 6 month waiver of l anding fees/sp.rent.,

billboard usage, direct mail campaigns

8. Other In-Kind contribution: $ 33,400

(amount & description) (See Attachment 7) Ad placements, trade show exposure, staff

fulfillments, mailings, web site exposure/ads,

newsletter inserts

9. TOTAL IN-KIND CONTRIBUTION (7. + 8.): $ 313 ,400 (est.)

10. TOTAL PROJECT COST (4. + 9.): $1,188,400 (es t.)APPENDIX B

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F. E NPLANEMENTS :

2000 221,522 2004 201,765 2008 223,130

2001 189,036 2005 221,348 2009 207,168

2002 202,178 2006 212,865

2003 181,715 2007 220,193

G. I S THIS APPLICATION SUBJECT TO REVIEW BY S TATE UNDER E XECUTIVE O RDER 12372 PROCESS ?

a. This application was made available to the St ate 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 THE A PPLICANT DELINQUENT ON ANY F EDERAL DEBT ? ( IF “ YES ”, PROVIDE EXPLANATION )

⌧ No Yes (explain) __________________________________

___________