Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### APPLICATION UNDER
SMALL COMMUNITY AIR SERV ICE DEVELOPMENT PROGRAM
DOCKET DOT-OST-2014-0113

SUMMARY INFORMATION

A. PROVIDE THE LEGAL SPONSOR AND ITS DUN AND BRADSTREET (D&B) DATA UNIVERSAL NUMBERING SYSTEM (DUNS) NUMBER, INCLUDING +4, EMPLOYEE IDENTIFICATION NUMBER (EIN) OR TAX ID. Legal Sponsor Name: Millington Airport Authority Name of Signatory Party for Le gal Sponsor: Roy Remington
DUNS Number: 0081302180000
EIN/Tax ID: 62-1534081
B. LIST THE NAME OF THE COMMUNITY OR CONSORTIUM OF COMMUNITIES APPLYING:

1. Millington, Tennessee
C. PROVIDE THE FULL AIRPORT NAME AND 3-LETTER IATA AIRPORT CODE FOR THE APPLICANT(S) AIRPORT(S) (ONLY PROVID E CODES FOR THE AIRPORT(S) THAT ARE ACTUALLY SEEKING SERVICE).

1. Millington Regional Jetport (NQA) 2.

3. 4.
DOES THE AIRPORT SEEKING SERVICE HOLD AN AIRPORT OPERATING CERTIFICATE ISSUED BY THE FEDERAL AVIATION ADMINISTRATION UNDER 14 CFR PART 139? (IF “NO,” PLEASE EXPLAIN WHETHER THE JETPORT INTENDS TO APPLY FOR A CERTIFICATE OR WHETHER AN APPLICATION UNDER PART 139 IS PENDING.)

Yes No (explain)Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### D. LIST THE 2-DIGIT CONGRESSIONAL DISTRI CT CODE APPLICABLE TO THE SPONSORING ORGANIZATION, AND IF A CONSORTIUM, TO EACH PARTICIPATING COMMUNITY.
1. TN-09 2.
3. 4.

E. APPLICANT INFORMATION: (CHECK ALL THAT APPLY)
Not a Consortium Interstate Consortium Intrastate Consortium Community now receives subsidized Essential Air Service Community (or Consortium member) prev iously received a Small Community Air Service Development Program Grant If previous recipient: Provide Year of grant(s): ________________________________________; Did not execute contract with DOT and, th e text of the Grant agreement section(s) setting forth the scope of the grant project: __________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________ F. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION NAMES)
PUBLIC PRIVATE 1. Millington Airport Authority 1. Millington Industrial Development Board 2. City of Millington, Tennessee 2. Millington Chamber of Commerce
3. 3.

4. 4.
5. 5.Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### G. PROJECT PROPOSAL: 1. GRANT GOALS: (CHECK ALL THAT APPLY)
Launch New Carrier Secure Additional Service Upgrade Aircraft
First Service New Route Service Restoration Regional Service Surface Transportation Professional Services Other (explain below)

_____________________________________________________________________________________

_____________________________________________________________________________________

__________________________________________________________________________________ 2 . FINANCIAL TOOLS TO BE USED: (CHECK ALL THAT APPLY) Marketing (including Advertising): promotion of the air service to the public Start-Up Cost Offset: offsetting expenses to assist an air service provider in setting up a new station and starting new service (for example, ticket counter reconfiguration)
Revenue Guarantee: an agreement with an air service provider setting forth a minimum guaranteed profit margin, a portion of which is eligible for reimbursement by the community
Recruitment of Air Carrier: air service development activities to recruit new air service, including expenses for airport marketers to meet with air service providers to make the case for new air service
Fee Waivers: waiver of airport fees, such as landing fees, to encourage new air service; counted as in-kind contributions only Ground Handling Fee: reimbursement of expenses for passenger, cabin, and ramp (below wing) services provided by third party ground handlers
Travel Bank: travel pledges, or deposited monetary funds, from participating parties for the purchase of air travel on an air carrier, with defined procedures for the subsequent use of the pledges or the deposi ted funds; counted as in-kind contributions onlyMillington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### Other (explain below)Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### H. EXISTING LANDING AIDS AT LOCAL AIRPORT:
Full ILS Outer/Middle Marker Published Instrument Approach
Localizer Other (specify)
I. PROJECT COST: DO NOT ENTER TEXT IN SHADED AREA
Line Description Sub Total Total Amount

1 Federal amount requested $250,000 2 State cash financial contribution Local cash financial contribution 3a Airport cash funds $0 3b Non-airport cash funds $37,500 3 Total local cash funds (3a + 3b): $37,500 4 TOTAL CASH FUNDING (1 + 2 + 3): $287,500 In-Kind contribution 5a Airport in-kind contribution** $75,722 5b Other in-kind contribution** 5 TOTAL IN-KIND CONTRIBUTION (5a + 5b): $75,722 6 TOTAL PROJECT COST (4 + 5): $363,222



### J. IN-KIND CONTRIBUTIONS** For funds in lines 5a (Airport In-Kind contribution) and 5b (Other In-Kind contribution), please describe the source(s) of fund(s) and the value ($) of each. The Jetport willwaive landing fees and ramp fees for the first two years of new service. The Jetport inkind contribution is estimated based on a landing fee of $1.90 per one thousand pounds and an $80 ramp fee per turn. The estimate assumes the airline would operate two MD-80 departures per week for the two year length of the incentive.
K. IS THIS APPLICATION SUBJECT TO REVI EW BY AN AFFECTED STATE UNDER EXECUTIVE ORDER 12372 PROCESS? a. This application was 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.Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### L. IS THE LEAD APPLICANT OR ANY CO-APPLICANTS DELINQUENT ON ANY FEDERAL DEBT? (IF “YES”, PROVIDE EXPLANATION)

No Yes (explain)

___________________________________________________________________________________Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 1 Contents
INTRODUCTORY LETTER............................................................................................................ ...................... 2
INTRODUCTION................................................................................................................... ............................ 3
AIR SERVICE OVERVIEW ........................................................................................................... ..................... 4
Catchment Area and Alternate Airports.......................................................................................... ..... 4
AIR SERVCE DEVELOPMENT NEE DS AND DEFI CIENCIES............................................................................ 5 Capacity Trends ................................................................................................................ ........................ 5
Traffic Tren ds................................................................................................................. .............................. 6
Traffic Retentio n and Le akage .................................................................................................. ............. 8 The Relationship of Capacity, Domestic Traffic and Domest ic Fare Trends .................................... 9 Memphis Fares Versus Fares at Ot her Airports in the Region............................................................ 11 Memphis Fares Versus Fares at Other Airp orts in the Lower 48 United States................................ 12
STRATEGI C PLAN ................................................................................................................. ......................... 13 Ground Handling and Marketing for Ultra-Low-Cost Carrier Service.............................................. 13
Goals .......................................................................................................................... ............................... 15 PARTNERSHIPS, FUNDING, IMPLEMENTATION, SUCCESS METRICS AND FINANCIAL CONTROL ......... 15 Public / Private Partnerships.................................................................................................. ................. 15 Project Funding................................................................................................................ ........................ 16 Implementation Timeline........................................................................................................ ................ 17
SUCCESS METRICS................................................................................................................ ........................ 18 Legal Sponsor.................................................................................................................. ......................... 18
Financial Controls ............................................................................................................. ....................... 19
CONCLUSION ..................................................................................................................... .......................... 20Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 2 

## INTRODUCTORY LETTERMillington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 3 

## INTRODUCTION Millington Regional Jetport is seeking a Small Community Air Service Development (SCASD) Grant in the amount of $250,000 fo r marketing and ground handling assistance to help secure its first scheduled air service. The Jetport is targeting an ultra-low-cost airline such as Allegiant or Spirit for service as an alternative to the service operated by airlines at Memphis International Airport. Millington Regional Jetport can offer either airline lower rates and charges than the rates and charges the airlines would pay at Memphis International Airport. The Jetport can best serve the community and catchment region with less-than-daily service on an ultra-low-cost carrier. Allegiant Air, with potential nonstop service to several Florida destinations, Phoenix-Mesa and Las Vegas, is the primary choice. Additionally, Spirit Airlines with potential nonstop service to Fort Lauderdale, Dallas/Fort Worth or Las Vegas. The Millington catchment region home to more than 1.2 million people within a 60 minute drive of the Jetport Within the region, Memphis International Airport has experienced significant declines inboth capacity and traffic over the last ten years. In 2013, the average domestic oneway fare at Memphis was $212, 17.6% higher than the average domestic one-way fare at the average Lower 48 airport. Capacity at Memphis International Airport is down more than 60% since its peak in 2005. The re gion lacks a true ultra-low-cost carrier and Millington Regional Jetport, with extremely low airport operating costs, is best suited for attracting an ultra-low-cost carrier. Millington Regional Jetport is seeking modest grant funding of $250,000 to help secure ultra-low-cost scheduled air service. The gran t will assist with the start-up with no-cost ground handling and a marketing program for a period of two years to support new air service at the Jetport. Earlier this year, the Jetport held preliminary discussions with Allegiant Air to begin the recruitment process, and has continued the discussions with Allegiant. The proposed service of Alle giant at Millington can be compared to Allegiant’s successful service at Concord, North Carolina, where Allegiant serves Concord as a low-cost alternative to Charlotte Douglas International Airport. The proposed ultra-low-cost service will fill a void for residents of Millington and the rest of Southwest Tennessee.Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 4 

## AIR SERVICE OVERVIEW Catchment Area and Alternate Airports Millington Regional Jetport serves Southwest Tennessee and is located approximately 25 miles north of Memphis International Airport. Based on a recently completed leakage study and traffic at Memphis International Airport, nearly 4,800 passengers originated or terminated in the region around Memphi s, with most of these passengers using Memphis International Airport. Approximately 78% of the traffic originating within a 60- minute drive of Millington Regional Jetport use Memphis International Airport, and approximately 22% use Nashville International Airport. The map in Exhibit 1 below illustrates the location of Millington Regional Airport, the 30, 60 and 90-minute drive times from the Jetport, and the locations of other airports in the region with commercial service. The population within a 60-min ute drive of the Jetport is approximately 1,288,000 residents.
Exhibit 1: 30, 60 and 90-Minute Drive Times from Millington Regional Jetport and Locations of Other Airports in the Region Relati ve to Millington Regional Jetport.Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 5 

## AIR SERVCE DEVELOPMENT NEEDS AND DEFICIENCIES Capacity Trends Although Millington Regional Airport has no scheduled commercial service, capacity at the primary airport in the region, Memphis International Airport, has declined 62.2% from more than 22,602 seats per day each way in 2005 to just 8,540 seats per day each way in 2013. Exhibit 2 illustrates the downward tr end in the average number of seats per day each way scheduled at Memphis Internationa l Airport over the last ten years. Northwest Airlines operated a hub at Memphi s International Airport, and Northwest filed for bankruptcy protection in late 2005. Northwest subsequently merged with Delta Air Lines in 2008, and as the Delta/Northwest me rger evolved, Delta has removed capacity from Memphis as aircraft have been retired and capacity has shifted to other Delta hubs. Exhibit 2: Seats per Day Each Way at Memphis International Airport; 2004-2013 (OAG Data).

21,727 22,602 21,341 21,250 20,388 18,793 18,145

15,704

11,922

8,540

0 5,000 10,000 15,000 20,000 25,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Seats per Day Each Way Seats per Day Each Way



### This Section Continued on Next PageMillington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 6 Traffic Trends While capacity at Memphis International Airport peaked in 2005, traffic peaked in 2007. Like capacity, traffic is also down significan tly since it peaked. Total Memphis traffic is down 31.3% from 4,772,610 O&D passengers in 2007 to 3,278,920 O&D passengers in 2013. Domestic traffic is down 32.5% since 2007 to 2,982,130 O&D passengers in 2013, and international traffic is down 16.2% sinc e 2007 to 296,790 O&D passengers in 2013. The majority of the decline in traffic can be attributed to Delta Air Lines reducing its capacity in Memphis following its merger with Northwest Airlines merger in 2008. Exhibit 3: Annual Origin and Destination Passen gers at Memphis International Airport; 2004-2013 (DOT DB1B Data).

3,810,430 4,002,420 4,160,810 4,418,510 3,612,730 3,226,310 3,182,140 3,070,300 2,913,840 2,982,130 295,350 315,710 341,300 354,100

326,220 291,020 295,210 291,380 291,160 296,790

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Annual Origin and Destination (O&D) Passengers Annual Domestic O&D Annual International O&D



### This Section Continued on Next PageMillington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 7 The annual 2013 O&D Memphis traffic data translates to 4,085 domestic and 407 international passengers per day each way (PDEW) as illustrated in Exhibit 4. Exhibit 4: Passengers per Day Each Way (P DEW) at Memphis International Airport; 2004-2013 (DOT DB1B Data).

5,206 5,483 5,700 6,053
4,935 4,420 4,359 4,206 3,981 4,085 403 432 468 485

446 399 404 399 398 407

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Passengers per Day Each Way (PDEW) Domestic PDEW International PDEW



### This Section Continued on Next PageMillington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 8 Traffic Retention and Leakage Sixel Group completed a leakage study in March 2104 using data for the 12 months ending in September 2013. The leakage study found Memphis International Airport retains just 76.9% of the domestic traffic originating in the Memphis metropolitan area; 22.8% of the domestic traffic leaks to Nashville International Airport. Analysis of fare data for the tickets sampled in the leak age study indicated the average one-way domestic fare for ticket for travelers using the airport in Memphis was $221, while the average one-way domestic fare for a ticket for travelers using the airport in Nashville was $166 – a difference of 33.1% or $55 each way. A summary of the domestic leakage data is illustrated in Exhibit 5. Exhibit 5: Domestic Origin and Destination (O&D) Passengers per Day Each Way (PDEW), Average Fare and Share for Memphis Area Passengers – Year-End Third Quarter 2013 Data (Source: Sixel Consulting Group) Airport O&D Passengers PDEW Average Fare Share Memphis International Airport 2,456,291 3,365 $221 76.9% Nashville International Airport 727,402 996 $166 22.8% Little Rock National Airport 10,280 14 $129 0.3% Total Memphis Area Passengers 3,193,973 4,375 $209 100.0%Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 9 The Relationship of Capacity, Domestic Traffic and Domestic Fare Trends Exhibit 6 illustrates the relationship between capacity, domestic traffic and the average domestic one-way fare at Memphis International Airport. As capacity and traffic have trended down, the average domestic one-way fare has increased and stood at $212 in 2013. The 2013 fare of $212 represents an average fare 26.5% higher than 2005 when capacity peaked and 24.6% higher than 2007 when traffic peaked. Exhibit 6: Seats per Day Each Way, Domestic Passengers per Day Each Way (PDEW) and Average Domestic One-Way Fare at Memphis International Airport; 2004-2013 (DOT DB1B Data).

21,727 22,602 21,341 21,250 20,388 18,793

18,145 15,704

11,922

8,540

5,206 5,483 5,700 6,053 4,935 4,420 4,359 4,206 3,981 4,085 $168 $168 $179 $170 $198 $180 $199 $218 $230 $212

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

0 5,000 10,000 15,000 20,000 25,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Average One-Way FareSeats and Passengers per Day Each Way Seats per Day Each Way Domestic PDEW Average Domestic One-Way Fare



### This Section Continued on Next PageMillington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 10 Analysis of capacity, traffic and the average domestic fare by quarter for the last nine quarters shows Memphis capacity declined 47.1% from 14,078 seats per day each way in fourth quarter 2011 to 7,443 seats per day in fourth quarter 2013. Versus fourth quarter 2012, capacity is down 24.1% in four th quarter 2013. Exhibit 7 illustrates the relationship between capacity, domestic traffic and the average domestic fare. Exhibit 7: Seats per Day Each Way, Passengers per Day Each Way (PDEW) and Average Domestic One-Way Fare at Memphis International Airport; Fourth Quarter 2011 through Fourth Quarter 2013 (DOT DB1B Data).

14,078 12,760 13,081 12,060
9,808 9,179 9,005 8,554 7,443

4,073 3,666 4,216 4,083 3,996 3,694 4,229 4,108 4,303 $220 $242 $237 $225 $217 $219 $218 $213 $201

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

0 5,000 10,000 15,000 20,000 25,000

2011-Q4 2012-Q1 2012-Q2 2012-Q3 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4Average One-Way FareSeats and Passengers per Day Each Way Seats per Day Each Way Domestic PDEW Average Domestic One-Way Fare



### This Section Continued on Next PageMillington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 11 Memphis Fares Versus Fares at Other Airports in the Region The average domestic one-way fare at Memphis International Airport was $212 in 2013. Among the larger airports in the region – Little Rock, Nashville and St. Louis – Memphis had the highest average domestic fare. In fact, the average domestic Memphis fare was 17.1% or $31 higher than the next highest fa re, at Little Rock, as illustrated in Exhibit 8. Exhibit 8: Average One-Way Domestic Fares in 2013 at Memphis, Little Rock, Nashville and St. Louis (DOT DB1B Data).

$212
$181 $173 $167

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

Memphis Little Rock Nashville St. LouisMillington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 12 Memphis Fares Versus Fares at Other Airports in the Lower 48 United States In 2013, the average domestic Memphis fa re of $212 was 17.6% higher than the average domestic fare of $181 at the average Lower 48 airport. Exhibit 9 illustrates the average domestic fare trend over the last ten years at Memphis relative to the average domestic fare at the average lower 48 airport. Exhibit 9: Average One-Way Domestic Fares at Memphis International Airport Versus the Average One-Way Domestic Fare at the Average Lower 48 Airport ; 2004-2013 (DOT DB1B Data).

$168 $168 $179 $170 $198 $180 $199 $218 $230 $212

$134 $136 $149 $149 $159 $143 $157 $171 $177 $181

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

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Average Domestic One-Way Fare Memphis Average Domestic One-Way Fare Average Lower 48 Airport Average Domestic One-Way FareMillington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 13 

## STRATEGIC PLAN Ground Handling and Marketing for Ultra-Low-Cost Carrier Service All proposed funding will be used to provid e ground handling to the carrier operating the proposed ultra-low-cost service at the Jetport and to market and advertise the ultra-low-cost service within the Memphis Metropolitan Statistical Area. 80% of SCASD funding would be used for ground handling (up to $100,000 per year) and 20% of SCASD funding would be used for marketing and advertising (up to $25,000 per year). The same ratios would apply to community cash matching funds (up to $15,000 per year for ground handling and up to $3,750 per year for advertising and marketing). The proposed budget and sources of funding for the project are summarized in Exhibit 10. Exhibit 10: Proposed Source s and Uses of Project Funds.

Year 1 Year 2 Total Year 1 Year 2 Total Total SCASD Funding $100,000 $100,000 $200,000 $25,000 $25,000 $50,000 $250,000 Community Funding $15,000 $15,000 $30,000 $3,750 $3,750 $7,500 $37,500 Total Project Funding $115,000 $115,000 $230,000 $28,750 $28,750 $57,500 $287,500 *Does not included airport in-kind incentives in the form of fee waivers valued at $75,722. Marketing Ground Handling



### Allegiant Air and Spirit Airlines would be ta rgeted to operate the ultra-low-cost service at Millington Regional Jetport. The Jetport would target routes to destinations already served by each carrier. For Allegiant, Sanford/Orlando (SFB), St. Petersburg/Tampa (PIE) Punta Gorda (PGD) and Ft. Lauderdale (FLL) would be targeted in Florida, and Las Vegas (LAS) and Mesa/Phoenix (AZA) would be targeted in the West. The targeted Allegiant routes are illustrated in Exhibit 11. For Spirit, Dallas/Ft. Worth (DFW), Ft. Lauderdale (FLL) and Las Vegas would be targeted as Spirit already operates a significant number of flights from each of these markets. The target Allegiant routes are illustrated in Exhibit 12.Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 14 Exhibit 11: Potential Routes Allegiant Air Co uld Operate from Millington Regional Jetport.

Exhibit 12: Potential Routes Spirit Airlines Could Operate from Millington Regional Jetport.Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 15 Goals Millington Regional Jetport has three primary goals for the proposed project to recruit an ultra-low-cost carrier to the community.

 Establish service on an ultra-low-cost carrier such as Allegiant or Spirit to at least one destination.

 Generate enough traffic to maintain a load factor of at least 90% within the first 60 days of the beginning of service.

 Generate at least 10,000 enplanements in the first full calendar year of service (this equates to 67 departures at a 90% load factor on a 166-seat aircraft).


## PARTNERSHIPS, FUNDING, IMPLEMENTATION, SUCCESS METRICS AND FINANCIAL CONTROL Public / Private Partnerships The Millington Airport Authority has partnered with the Millington Industrial Development Board and the City of Millington to promote economic growth at the Jetport. The three entities meet on a regular basis to discuss potential economic development projects forMillington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 16 the Jetport, and establishing the first commercial airline service is a top priority for the Jetport . 

### Project Funding In addition to the Small Community Air Service Development Grant of $250,000 requested from the Department, the Millin gton Industrial Development Board will commit a cash amount of $15,000, and the City of Millington has committed to a cash amount of $22,500. The total cash match from both sources is $37,500, or 15.0% of the total proposed federal funding of $250,000.
In addition to cash funding, Millington Regional Jetport will waive rent and landing fees for the first two years of service, and the amount of these fees are valued at $75,722 based on two weekly arrivals on an MD-80 aircraft, a landing fee of $1.90/thousand pounds and a ramp fee of $80 per operation. A summary of funding sources is shown in Exhibit 13 on the following page.Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 17 Exhibit 13: Summary of Sources and Types of Project Funding
Funding Source Grant Cash In-Kind Total Department of Transportation $250,000 $250,000 Community $37,500 $37,500 Airport $0 $75,722 $75,722 Total $250,000 $37,500 $75,722 $363,222 

### Implementation Timeline The proposed implementation timeline for the project assumes the Department will award Small Community Grant Funding in September or October 2014. Once the award is announced, Millington Regional Airport will advise airlines of the grant award. Based on airline planning lead times and the need for advance bookings, we assume no airline would begin service until sometime in 2015, and we have conservatively assumed the service could not begin no earlier than June 2015. The first two milestones on the Jetport's timeline are to execute the grant agreement with the Department and to negotiate a service agreement with the airline. Once service is announced and schedules are published, the airline, the Jetport and the community would begin marketing the new route and working with the airline to monitor advance bookings. The Jetport will continue its marketing program and continue to work with the airline to monitor the route once service begins. The Jetport will submit grant status reports on a quarterly basis to the Department throughout the proposed two year term of the minimum revenue guarantee. The proposed pr oject timeline is illustrated in Exhibit 14.
Exhibit 14: Proposed Project TimelineMillington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 18 Activity/Project Milestone Estimated Dates SCASD Grant Award Announcement September 2014 Execute Grant Agreement with DOT September/October 2014 Airline Meetings October 2014 - January 2015 Announce Service February or March 2015 Publish Schedule February or March 2015 Market Route (Pre-Launch) April - June 2015 Monitor Advance Bookings April - June 2015 Adjust Marketing Plan Based on Advance Bookings April - June 2015 Begin Service June 2015 Market Route (Post-Launch) June 2015 and Beyond Operate Service with Incentives June 2015 - May 2017

Monitor Route Performance June 2015 - August 2017 and Beyond Submit Grant Status Reports to DOT Quarterly 3Q 2015 - 2Q 2017 

## SUCCESS METRICS The success of the proposed project can be measured by assessing whether the three primary goals of the project are achieved. The goals and the success metrics are summarized in Exhibit 15. Exhibit 15: Project Goals and Success Metrics

Project Goals Success Metric

 Establish service on an ultra-low-cost

carrier such as Allegiant or Spirit to at least one destination.  Allegiant or Spirit begins service from Millington to at least one destination within the grant award period.

 Generate enough traffic to maintain a

load factor of at least 90% within the first 60 days of the beginning of service.  Millington service generates a load factor of at least 90% within the first 60 days from the date new service begins.

 Generate at least 10,000 enplanements

in the first full calendar year of service (this threshold would be achieved at 67 departures operating with a 90% load factor on a 166-seat aircraft).  Airline service at Millington generates at least 10,000 enplanements within the first calendar year of service



### Once service begins, the Jetport will rely on traffic and revenue data provided directly by the airline and the amount of reimbursements requested by the airline as indications of project success. T-100 data will be used as the official source of data to verify load factor and enplanement data when measuring success metrics. 

### Legal Sponsor Millington Airport Authority is the legal sponsor responsible for administering the proposed air service development program. The Jetport is a government agency, operated by the Millington Airport Authority.Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 19 Millington Airport Authority 8182 Hornet Ave. Millington, TN 38053 Roy Remington, Executive Director (901) 873-5792 rremington@cityofmillington.org



### Financial Controls As the sponsor, Millington Airport Authority and its governing body, the Millington Airport Authority Board, will be the responsible parties for all fiscal matters and the Department's reporting requirements. The Jetport Authority Board is established as a public governing body. As a public entity , the Department can be assured that proper financial controls are in place to guarantee that the Department’s Grant will be used in accordance with any subsequent agreement. The Millington Airport Authority Board understands that the Grant is a reimbursable grant, meaning the Jetport is responsible for program expenditures and will subm it invoices to the Department for reimbursement, based on a percentage of the total grant request.Millington Airport Authorit y; Millington, Tennessee Small Community Air Service Development Program Proposal; Docket DOT-OST-2014-0113 

### 20 

## CONCLUSION Based on the traffic generated at Memphis International Airport, the capacity lost at Memphis over the last ten years, and the relatively high domestic fares paid by travelers using Memphis International Airport, the Millington market could likely support air service to one or more destinations by an ultra-low-cost airline such as Allegiant or Spirit. The Millington Airport Authority believes l ess-than-daily nonstop service to one or more Allegiant destinations, such as Sanford/Orlando (SFB), St. Petersburg/Tampa (PIE) or Las Vegas (LAS) could be supported. In addition, service by Spirit to a destination such as Dallas/Ft. Worth (DFW), Las Vegas (LAS) or Ft. Lauderdale (FLL) could also be supported because the low fares offered by Allegiant and Spirit would stimulate demand at sustainable levels. The Jetport’s recruitment effort for Allegiant service to Florida began earlier this year, the Jetport has continued its dialog with Allegiant. The on-going dialogue has assisted and helped determine the amount of federal funding that will be required for the startup project. The anticipated timeline for the project assumes a Grant would be awarded in September or October 2014. If the Grant agreement with the DOT is finalized in October 2014, the Jetport will step-up its recruitment efforts in the fall, continuing to meet with both Allegiant and Spirit through the winter. In a best-case scenario, one of the carriers would announce service from Millington beginning no later than June 2015. Millington Regional Jetport has not applied for a Small Community Air Service Development Grant in the past. The Jetport realizes the scheduled air service environment has changed, and in order to be competitive with other non-hub airports it must assist with marketing and cost incentives to help recruit ultra-low-cost airline service. A small community air service development grant application is an important element in securing scheduled flights and gaining passenger service for the Millington catchment region.