APPENDIX B Page 1

A PPLICATION UNDER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST

- 2013

- 0120

SUMMARY INFORMATION

All applicants must submit this Summary Information schedule, as the application coversheet, a completed standard form SF424 and the full application proposal on
www.grants.gov.

For your preparation convenience, this Summary Information schedule is located at http:// www.dot.gov/policy/aviation

- policy/small

- community

- rural

- air

- service/SCASDP

A. P ROVIDE THE LEGAL SPO NSOR AND ITS DUN AND BRADSTREET (D&B) DATA UNIVERSAL

NUMBERING SYSTEM (DUNS) NUMBER , INCLUDING +4, EMPLOYEE IDENTIFICAT ION NUMBER (EIN)

OR TAX ID

.
Lega l Sponsor Name: City of Del Rio

DUNS Number: 078482262 0000

EIN/Tax ID: 74

- 600066 5

B. L IST THE N AME OF THE COMMUNITY OR CONSORTIUM OF COM MUNITIES APPLYING :

1. City of Del Rio

2.

________________________________ __________________
3.

________________________________ __________________
4.

________________________________ __________________

C. P ROVIDE THE FULL AIRP ORT NAME AND 3

- L ETTER IATA A IRPORT C ODE FOR THE APPLICAN T ( S )

AIRPORT ( S ) (O NLY PROVIDE CODES FO R THE AIRPORT ( S ) THAT ARE ACTUALLY SE EKING SERVICE ).

1. Del Rio International Airport

- DRT 2.

3. 4.APPENDIX B Page 2

D. L IST THE 2

- DIGIT CONGRESSIONAL DISTRICT CODE APPLICABLE TO THE SPONSORING

ORGANIZATION, AND IF A CONSORTIUM, TO EACH PARTICIPATING COMMUNITY.

1. TX

- 23 2.

3

. 4.

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

X Not a Consortium □ Interstate Consortium □ Intrastate Consortium 

## D

□ Community now receives subsidized Essential Air Service

X Community (or Consortium member) previously received a Small Community Air Service Development Program Grant

I f previous recipient: Year of grant(s): 200 4

F. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION NAMES)

PUBLIC PRIVATE

1. City of Del Rio 1. Amistad Industrial Developers

2. Del Rio Chamber of Commerce 2. Pico Aviation, Kusy Ventures, RCGF Properties, Westex Capital ltd.

3. Del Rio Convention and Visitors Bureau 3. Rio Grande Aviation

4. Del Rio Hispanic Chamber of Commerce 4. The Bank & Trust

5. City of Acuna

– Acuna Economic Development 5. Texas Community Bank

6. Border Federal Credit Union

7. Del Rio Management Company,dba/Ramada

Del Rio

8. Hex Del Rio LC, San Antonio, TX dba/Holiday In Express Hotels & Suites of Del Rio

9. Levcor Inc.

– Plaza Del Sol Mall

10. Marathon Heaters, Inc.

11. Rio Bravo Cancer & Blood, P.A.

12. Baker Investment Company, dba Gatti’s Pizza

13. PLR Furniture Inc.

– Ashley Furniture

14. John F. White, Jr.

15. Sentry Security Service

16. Scott M. Ham

17. The Koury Group

18. Alamo Saddlery

19. Benton Wardlaw

. 20. Rio Grande Electric Cooperate Board

21. David Winters

22. Robert A. Eads

23. Billie Jo Grafton

24. Jackie RobinsonAPPENDIX B Page 2

25. Suzanne West

26. Aida Garcia

27. Josie Balderas

28. Esmeralda Meza

29. Martha Genera

30. Lydia Z. Esparza

31. Juanita Salazar

32. Alida Helgerman

33. Dora G. Alcala

34. Emily Cooper

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



### X Marketing 

# □ Upgrade Aircraft 

### X New Route



# □ Travel Bank X Service Restoration 

# □ Subsidy 

# □ Surface Transportation X Regional Service 

### X Revenue Guarantee



### X Launch New Carrier X Start

- up Cost Offset 

# □ First Service



# □ Study □ Secure Additional Service 

# □ Other (explain below)

H. E XISTING L ANDING A IDS AT L OCAL A IRPORT:

X Full ILS X Outer/Middle Marker

X Localizer X Other (specify) MALSR

, REIL, PAPI, HIRL

X Published Instrument ApproachAPPENDIX B Page 3

L INE D ESCRIPTION S UB T OTAL T OTAL A MOUNT

1 Federal amount requested 

### $500,000

2 State cash financial contribution
Local cash financial contribution

3a Airport cash funds

3b Non

- airport cash funds 

### $162,700

3 Total local cash funds (3a + 3b) 

### $162,700

4 TOTAL CASH FUNDING (1+2+3) 

### $662,700

In

- Kind contribution

5a Airport In

- Kind contribution** 

### $28,000

5b Other In

- Kind contributions 

### $298,816

5 TOTAL IN

- KIND CONTRIBUTION (5a + 5b) 

### $326,816

6 TOTAL PROJECT COST (4+5) 

### $989,516

J. IN

- KIND CONTRIBUTIONS**

5a. Airport In

- Kind Terminal Rent and User Fee’s, In Airport Advertising

5b. Other In

- Kind Advertising, Marketing, Free & Reduced Rate Crew Quarters, Reduced Rate Fuel, Reduced Rate A&P Licensed Aircraft Mechanic Services, Travel Pledges

For funds in lines 5a (Airport In

- Kind contribution) and 5b (Other In

- Kind contribution), please I. P ROJECT C OST : D O NOT ENTER TEXT IN SHADED AREA

describe the source(s) of fund(s) and the value ($) of each.

1. City of Del Rio

– Airport In

- Kind $28,000 No Cost Terminal Rental or User Fee’s $25,000, No Cost in Airport Advertising $3,000

2. Del Rio Convention & Visitors Bureau $60,000 In Kind Marketing $60,000

3. Hispanic Chamber of Commerce $3,000
Free advertising website, facebook

4. Acuna Economic Development Commission $25,000 $25,000 In Kind Advertising

5. Pico Aviation (FBO)

In to Plane fuel discount for 3

- 6 months

6. Rio Grande Aviation $4,248
20% Discount on labor for the first year $3,936, 2 RT

- DFW $300

7. Del Rio Bank and Trust $18,000APPENDIX B Page 3

10,000 Annual Ticket purchases

- $8,000 marketing

8. Texas Community Bank $6,000 $6,000 Annual Ticket purchases

9. Border Federal Credit Union $2,383
3 RT Washington DC, 2RT DFW, 3 RT other

10. Ramada Inn $17,803
In Kind 2 Crew Rooms 60 days free, thereafter special rate of $50.00, free transportation $12,000, 12 RT MEX, DFW, VER,MTY $5,803.56

11. Holiday Inn Express $28,800 2 Guest Rooms 30 days free ($6,900), thereafter special rate of $85.00 ($21,900), free transportation, corporate travel

12. Plaza Del Sol Mall $15,240 $15,240 Advertising

13. Marathon Heaters $7,500 $7,500 Annual Ticket purchase

14. Rio Bravo Cancer & Blood $4,789 4 RT ORD, 2 RT MCO, 5 RT Undetermined (DFW) $3,289, $1,500
towards marketing

15. Mr. Gattis $17,500 $2,500 Pre Purchase Tickets,$15,000 IN Advertising

16. Ashley Furniture $5,000 $5,000 Tickets first year

17. John F. White $4,370

10 RT New Orleans first 12 months

18. Sentry Security $2,000 Ticket Purchase $2,000 2 year period

19. Scott Ham, $3,418
(10 RT New Orleans)

20. The Koury Group $25,000 100% company travel estimated $25,000 annuallyAPPENDIX B Page 3

21. Alamo Saddlery $5,000 Annual estimated airfare purchases $5,000

22. Benton Wardlaw $2,500 Annual estimated airfare purchases $2,500

23. Rio Grande Electric Coop $6,000 Annual estimated airfare purchases $6,000

24. W. David Winters $25,000 $25,000 Ticket Purchase guarantee first year

25. Robert Eads $680

4 RT DFW

26. Billie Jo Grafton $1,560
(2

- RT

- BOI, $1410) (1

- RT

- DFW, $150)

27. Jackie Robinson $1,394

2 RT LGA, 2 RT PHX

28. Suzanne West $528

2 RT BNA

29. Aida Garcia $374

2 RT DFW

30. Josie Balderas $720

2 RT ORD 550, 1 RT DFW 170

31. Esmeralda Meza $510
3 RT DFW $510

32. Martha Genera $693
2 RT IAH $693

33. Lydia Z. Esparza $285

1 RT ELP 285

34. Juanita Salazar $510
3 RT DFW $510

35. Alida, Helgerman $600 $600 Ticket purchase to GuadalajaraAPPENDIX B Page 3

36. Dora Alcala $1,565
(2 RT SFO 415, 2 RT DFW 150)

37. Emily Cooper $885

2 RT DEN

- 590, 1 RT STL 295K. I S T HIS A PPLICATION S UBJECT T O R EVIEW B Y S TATE U NDER E XECUTIVE O RDER 12372

P ROCESS ?

□ a. This application 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.

X c. Program is not covered by E.O. 12372.

L. I S T HE A PPLICANT D ELINQUENT O N A NY F EDERAL D EBT ? (I F "Y ES ", P ROVIDE

E XPLANATION )

X No □ Yes (explain)

# Docket DOT

- OST

- 2013

- 0120



# Proposal under the Small Community Air Service Development Grant Program of

DUNS # 078482262 0000 Congressional District: TX

- 23Proposal of Del Rio International Airport

2013 Small Community Air Service Development Grant

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# Table of Contents

PROPOSAL OVERVIEW 3

DOT Primary and Secondary Selection Criteria

................................ ................................ ....................... 4 Grant Specifics

................................ ................................ ................................ ................................ .......... 7 The Del Rio and Ciudad Acuna Region Can Support New Service

................................ ......................... 8

Air Service Access

– Imperative for the Region’s Growth

................................ ................................ ....... 8

Contact Information

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



## 1. DRT MARKET AREA 10

Geographic Location and Market Population

................................ ................................ ........................ 10



## 2. DRT AIR SERVICE HISTORY AND FUTURE P OTENTIAL 11

Historical Air Service

................................ ................................ ................................ ................................ 11 Aging Aircraft Led to Operational Challenges

................................ ................................ ........................ 11

United Airlines Performance at DRT

– CY 2012

................................ ................................ .................... 12

DFW Hub: Win

- Win for AA , Del Rio, and Surrounding Multinational Region

................................ ........ 13



## 3 . DRT COMMUNITY: THE POWER OF PARTNERSHIP 1 5

Regional Business Revenue Guarantee Commitments

................................ ................................ ........ 15

In

- kind Incentives

................................ ................................ ................................ ................................ ..... 15

In

- kind Travel Pledges

................................ ................................ ................................ ............................. 15



## 4. SCASD GRANT ADMINIST RATION PLAN 1 7

Responsibility for SCASD Grant Funds and Term of Grant

................................ ................................ ... 1 7 Funding and Revenue Sources

................................ ................................ ................................ ............... 1 7

Revenue Guarantee

................................ ................................ ................................ ................................ 1 7 Marketing Support

................................ ................................ ................................ ................................ ... 18 Plan to Monitor Funds and Project Effectiveness

................................ ................................ .................. 1 8 Previous Air Service Development Efforts

................................ ................................ .............................. 1 8

Difference s Between Curre nt Grant Proposal and Previous Grant Award

................................ ........... 1 9Proposal of Del Rio International Airport

2013 Small Community Air Service Development Grant

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# Proposal Overview

The City of Del Rio, Texas and the Del Rio International Airport (DRT) respectfully submit its

proposal for a grant under the 20 13 Small Community Air Service Development Grant Program

(Docket DOT

- OST

- 2013

- 0120 )

.

As of April 8 th , 2013, commercial air service at Del Rio Internatio nal Airport was discontinued,

as a result of United Airlines decision to cancel its twice daily nonstop flights from Del Rio to

Georg e Bush Intercontinental Airport. This resulted in Del Rio having no effective airline access

to the national air transportation system. The only option is a nearly three hour drive to San

Antonio via mostly two

- lane highway. The economic vitality of the region is now severely

threatened. The air service

, which th is grant will make achievable, is critical to the economic

performance of the entire region

.

American that has indicated a strong interest in the opportunity at Del Rio as indicated by their

attached letter of support for the DRT grant proposal , therefore the information presented in

this proposal is spe cific to that carrier.

The community has a very high military component, with Laughlin AFB being the US Air Force’s

largest pilot training facility

. American Airlines

– which has shown strong success in tapping

small markets with military traffic, such a s Watertown an d Manhattan (KS)

– has interest in

Del Ri o for th ese reasons as well as several other factors

.

T he grant requested herein is to re

- establish air service for Del Rio via the American Airlines

hub at Dallas

- Fort Worth International Airport

. American Airlines’ DFW hub provides the

international and domestic connectivity that will generate the demand to establish the DRT

DFW route as a positive revenue generator for the carrier. It is noted that, in addition to the

strong military traffic , the US/Mexico Border City of Ciudad Acuna has an expanding

manufacturing industry that generat es significant demand for travel to many U.S. , Mexico as

well as European destinations.

Alternatively

, the community also believes that United may have renewed inter est in serving

Del Rio from its hub at Hous ton Intercontinental which may be considered for this grant

proposal. 1

1 United indicated that it suspended service due to fleet restraints as it restructured its IAH hub operation.Proposal of Del Rio International Airport

2013 Small Community Air Service Development Grant

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## DOT Primary and Secondary Selection Criteria

The City of Del Rio an d the community believe that its grant proposal meets, and in some cases

exceeds, the primary and secondary selection criteria put forth by the DOT.



### Primary Selection Criteria

1) DRT experienced high airfares prior to its scheduled service being discontinued. This

discouraged DRT

- IAH travel and encou raged passenger traffic leakage to larger airports,

specifically San Antonio International Airport. Based on DOT data, the average gross one way

fare from DRT was $307 compared to $226 at SAT. While there are no guarantees as to what

airfares would be if s cheduled air service were re

- established at DRT, there is every possibility

of bringing fare discipline to the market.

2) There has been an incredible level of support from the community for this grant proposal in

terms of cash contributions, I n

- kind supp ort and In

- kind travel pledges . While this support is

detailed l ater in the proposal, the following chart illustrates the level of commitment from the

City of Del Rio and its community and regional partners

.

This includes the City of Del Rio, local businesses, the US/Mexico Border City of Ciudad Acuna

, along with many others throughout the region who realize the importance of regularly

scheduled air passenger service to this remote area of southwest Texas

. $62,700.00

$126,368.00

$200,448.00 $100,000.00 

## DRT SCASD Grant Community Financial Support $489,516

Miniumum Revenue

Guarantees

In-Kind Travel Pledges

In-Kind Support

CODR SCASD Grant MatchingProposal of Del Rio International Airport

2013 Small Community Air Service Development Grant

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in their attached Resolution of support, has resulted in the concept of an A ir S ervice

C onsortium which is being developed to focus on and promote the air service in the region

. This group will aid in ensuring the new air service achieves self sufficiency through working

with the carrier to quickly address any issues/concerns, redirecting marketing su pport if

necessary, and work tirelessly to achieve the levels of passenge r traffic necessary to maintain

self

- sufficiency

.

4) New air service will serve a broad spectrum of stakeholders in the greater Del Rio R egion to

include local businesses, the maquiladoras (manufacturing operations and factories ) in bot h

Del Rio, Ciudad Acuna M exico and Eagle Pass, Peidras Negra s M exico

, Laughlin Air Force Base

, as well as the many leisure travelers . All of these travelers now have extremely limited access

to the national transportation system

. The n umerous letters of support are a ttached to this

proposal are listed below. C ash and in

- kind contributions from several sectors of the

community are also discussed later in this proposal

.
Letters of Support

Business , Civic and Governmental

American Airlines Elastomeros Tecnicos Moldeados , Inc. U.S. Congressman Pete Gallego subsidiary of Park Ohio Holdings Corp U.S. Senator John Cornyn Pico Aviation, Kusy Ventures, RCGF Properties, Westex Capital ltd. Texas House Representative Poncho Nevarez Rio Grande Aviation 9 County Middle Rio Grande Development Council The Bank & Trust City of Del Rio Texas Community Bank Val Verde County Border Federal Credit Union Del Rio International Airport Commission Del Rio Management Company,dba/Ramada

Del Rio

Del Rio Chamber of Commerce Hex Del Rio LC, San Antonio, Texas dba/Holiday In Express Hotels & Suites of Del

Rio

Del Rio Convention and Visitors Bureau Levcor Inc.

– Plaza Del Sol Mall Del Rio Hispanic Chamber of Commerce Marathon Heaters, Inc.

Del Rio Hispanic Chamber of Commerce #2 Val Verde Regional Medical Center City of Del Rio Housing Authority Rio Bravo Cancer & Blood, P.A. City of Acuna

– Acuna Economic Development Baker Investment Company, dba Gatti’s Pizza Tarrant County Commissioner Pct. 3 PLR Furniture Inc.

– Ashley Furniture Del Rio and Acuna Maquilla Association John F. White, Jr.

Alcoa Power and Production Division Alcoa Fastening Systems Group Sentry Security Service

Caterpillar Scott M. Ham Blueline Manufacturing The Koury Group Magna Seating Alamo Saddlery
North American Muller Textiles, Inc. Benton Wardlaw Amistad Industrial Developers Rio Grande Electric Cooperate Board Border Opportunity Savers Systems, Inc. and Hadlock & Fox mfg, LLC.Proposal of Del Rio International Airport

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Rodolfo Karisch Maria Dolores Pena

Robert A. Eads Lydia Z. Esparza

Jackie Robinson Lolina Pena

Suzanne West Juanita Salazar Lewis W. Nunley Alida Helgerman

Dora G. Alcala Dennis Robinson

Billie Jo Grafton Emily Cooper

Aida Garcia Eric & Sally Finkelstein

Josie Balderas John & Lisa Stipo

Esmeralda Meza Lou & Mary Ann Zylka

Martha Genera

5 ) It is fully expected that the grant will be utilized within the required time allotted by DOT , as

Del Rio has already held initial conversations with American Airlines on the potential o f new

service.

6) A very critical aspect to this proposal is the role Del Rio Intern ational Airport plays as a THE

Regional A irport for the southwest Texas R egion. There are no other commercial airports within

three hours of Del Rio, and the rural nature of southwest Texas make s road travel difficult and

time c onsuming. This is why the N ine C ounty Middle Rio Grande Development Council supports

this proposal , and why there is broad support not only from Del Rio citizens a nd businesses,

but also Ciudad Acuna

, Mexico and other Cities within the nine county area

.



### Secondary Selection Criteria

1) This proposal is innovative, and shows broad support by US and Mexico communities on the

southern US border. The partnership between these two communities is unwavering , and this

type of partnership is unique within the spectrum of Small Community Air Service Development

Program grant proposal s.

2) As mentioned previously, there is indeed broad support for this proposal as indicated by the

attached letters of support

.

3) The location of Del Rio International Airport cannot be understated

– this is truly a small

community , in a regional context, which relies on access to air service that is critical to

ec onomic development. DRT is the Regional A irport in southwest Texas, and re

- establishing air

service is essential to this rural area’s economic growth and well

- being

.Proposal of Del Rio International Airport

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## Grant Specifics

T he Del Rio community is requesting a grant in the amount of $5 00,000 to be m atched with

a combination of local cash contributions of $162

, 7 00 as well as $200 ,448 of i n

- kind services

and $126

, 368 of i n

- kind travel pledges

, for a total project cost of $9 89 ,516

.

The intent of the SCAS D grant funds would be for risk abatement for American Airlines’ DRT

DFW nonstop service, with a portion of the funding going toward marketing the new service.

The City believes this proposal meets the intent and spirit of the Small Community Air Service

Development Program, and also believes this particular opportunity is a perfect match for the

goals established by the DOT.

Analyses by the Community and the Airport indicate s strong market potential for a new carrier.

As a practical matter, however, the size of the DRT market restricts the service options to just

two relatively close airline connecting hubs. The first is American/DFW, and the second is

United/IAH. 2 While airline strategies change, currently the direc tion of United at IAH is movi ng

away from small airport feed however this may change as its fleet mix evolves therefore t he

possibility of United IAH service being reintroduced is something the community may also

consider.

On the other hand, American has indicated interest in the market, based on that carrier’s focus

on military traffic and in the current and future growth of international flows generated at

Ciudad Acuna. With the levels of community support and the growing economy in Del Rio and

Ciudad Acuna, the DRT market can become self sufficient through the unwavering regional

support of t he DRT grant proposal for an American Airlines nonstop DRT

- DFW service.

The American Airlines subsidiary American Eagle operates a modern regional jet fleet well

suited for a market the size of Del Rio. The momentum in passenger traffic from the second

ha lf of 2011 and first quarter 2012 , which is illustrated in detail later in this proposal, can be

reignited and successful with a reliable carr ier such as American Eagle to a DFW hub. The Del

Rio community, working with Ciudad Acuna as well as the entire s o uthwest Texas Region

, have

committed to providing the necessary resources to ensure that introduction of new scheduled

air service at DRT will be successful now and into the future.

2 The flying distance to other airline hubs, such as UA/DEN and US/PHX makes the economic viability of a small market such as DRT problematic.Proposal of Del Rio International Airport

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## The Del Rio and Ciudad Acuna Region Can Support New Service

The greater Del Rio region’s economy has been a growth story, one that is aid ed by its

geographic location on the US

- Mexico border. In addition to being a major trade crossing with

Mexico, Del Rio is home to the Laughlin Air Force Base, which is the largest employer i n the

region and the premier pilot training site for the US Air Force. Del Rio also has a number of

other major federal agencies including U.S. Customs, U.S. Border Patrol and FBI.

The presence of the maquiladoras , in both Del Rio and Ciudad Acuna, has cr eated significant

economic growth in the region over the last several years. Major companies such as Caterpillar,

General Electric, Kimberly

- Clark, and Alcoa and other major corporations have operations in

the region. In total

, there are over 50 maquiladoras in the region. These companies rely heavily

on the ability to travel effic iently, and the availability of air service is of great concern to the m

.

Laughlin Air Force Base graduates approximately 300 pilots per year and was recently named

the busiest airfield in the US Air Force. Laughlin provides over 1,200 jobs to local residents

and generates over $230 million dollars to local economy. In addition to the local businesses,

the AFB generates significant air service demand

– demand that now is unmet and which this

grant will help to resolve

.

T he lack of commercial air service now has a detrimental effect on the overall economy and

community if not restored. For this reason, American Airlines nonstop air service to its DFW

hub is a proposition that can create a win

- win for both the community and the airline.



## A ir Service Access

– Imperative for the Region’s Growth

With the elimination of air service in April, the closest airport with commercial air service is San

Antonio International Airport ( SAT), which is approximately 15 0 miles and a three hour drive

from Del Rio.

The effects have been immediate and economically devastating. Local businesses are having

an increasingly difficult time attracting and retaining top talent in the manufacturing

operations in the region due to the inability to easily travel to and from the region. The

reestablishment of commercial air service on American Airlines to DFW would greatly improve

this growing problem.Proposal of Del Rio International Airport

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- 0120 Page 9 Del Rio is emerging as the gateway to north central Mexico as indicated by one letter of support

pro vided by Tarrant County, Dall as

, and f or this region of Texas to continue to be part of the

global economy, commercial air service is imperative for thi s geographically isolated area

.

The traffic that can be generated to and through the AA hub at DFW can well support nonstops.

American, by virtue of its letter of support, has agreed to further analyze this opportunity

. However, it has made clear that a mechanism to off set the risk of entering a new market must

be in place. This is the critical importance of this grant.



## Contact Information

The City of Del Rio will serve as the legal sponsor and be responsible for administering the

grant. All correspondence regarding this proposal should be referred to:

Robert A. Eads, City Manager

% Billie Jo Grafton

- Airport Manager Del Rio International Airport

1104 West 10 th Street Del Rio, TX 78840 Tel: (830) 774

- 8538

Email: bgrafton@cityofdelrio.comProposal of Del Rio International Airport

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# 1

. DRT Market Area

Geographic Location & Market Population

Del Rio International Airport is the air access gateway for both Del Rio and Ciudad Acuna, with

whom Del Rio has a very close relationship. Both cities are critical to the overall economi c

prosperity of the region, DRT is the only airport option for the SW Texas region.



# Primary and Secondary Catchment Area

SOURCE: Microsoft MapPoint

Del Rio is a major trade gateway between the United States and Mexico

. The US population

within a 60 minut e drive time is approximately 95 ,000 and within 75 minutes the population

is well over 100,000 . Furthermore, the population of the Ciudad Acuna region of the Coahuila

state of Mexico is approximately 270,000 and Piedras Negras is 170,000

. Unlike many oth er

regions of the nation, this drive time population does not have easy access to another airport.

The closest commercially

- served airport is San Antonio International, which is a three

- hour

drive. Factoring i n timing for travel contingencies and for security clearance at SAT, the DRTProposal of Del Rio International Airport

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- 0120 Page 11 consumer must allow the equivalent of a full half day before they may begin an a ir trip. With

the loss of air service, this is lethal to the region’s global competitiveness. 3


# 2. DRT Air Service History and Future Potential

Historical Air Service

Historically, DRT began nonstop service to United’s George Bush Intercontinental Airport (IAH)

,

with a SCASD

- funded incentive program in March 2005

, and became self

- sufficient thereafter.

The IAH hub first with Continental, and later with United provided excellent connectivity both

domestically and internationally. There were, however, operational reliability problems in 2011

that discouraged ridership ; these were resolved by U nited in 2012, and traffic rebounded with

the introduction of jet service.

Subsequent to service initiation in 2005 , DRT had between two and three daily roundtrip s on

34 seat turboprop aircraft, and most recently 37 seat regional jets. For a period, there were

operational issues with reliability and on time performance associated with the aging

turboprop aircraft , however, this changed once United/Continental merger was solidified and

a more reliable carrier operated the flights on behalf of United with re gional jets

. However,

early in 2013 after a mere 6 months of reliable jet operations United found it necessary to

discontinue this air service, due to changes in the fleet mix at United Express. Today, Del Rio

International and the region it serves have n o scheduled air service

.



## Aging Aircraft Led To Operational Challenges

Because of the operational issues which impacted reliability of flights at DRT, air travel to and

from the region suffered traffic declines

. However, once the more reliable regional jets

replaced the turboprop aircraft in the DRT

- IAH market, passenger traffic began to rebound, as

is evidenced on the graph on the following page

.

3 The community believes that DRT has characteristics similar to those at Columbia, Missouri. The traffic demand i s strong, and loss of air service was due to airline operational factors. As has been seen with Columbia, the need for outside financial su pport is expected to be only pro

- tem.Proposal of Del Rio International Airport

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# DRT Passenger Traffic History

Five Year Trend: CY 2008

– CY 2012

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

Furthermore, while passenger traffic rebounded, the load factor achieved by United Airlines

increased as well. This was a clear indication that the community supported the switch from

the unreliable turboprop aircraft to the reliable regional jets.

The rebound in both passenger traffic and load factor performance illustrates that the DRT

market can become self

- sufficient with the assistance of a grant award from the DOT. The

proximate cause of United’s decision to drop the market was retirement of key fleet types from

the United Express system and corpo rate planning changes at the carrier . It was not due to

lack of traffic opportunities.



## United Airlines Performance at DRT

– CY 2012

The two daily nonstop frequencies between DRT and IAH flown by United Airlines in CY 2012

captured approximately 23,000 ori gin and destination passengers, accounting for nearly $6

million in net revenue. The inbound vs. outbound distribution of passengers was relativelyProposal of Del Rio International Airport

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limited season al fl uctuations in passenger travel and demand. Average One Way Gross Fares

as shown on the following page, were approximately $307, which is higher than the national

average for CY 2012 by approximately 39% ($307 vs. $221).



# United Performance at DRT

CY 2012

SOURCE : Aviation DataMinerTM analysis of DOT/BTS O&D Survey

The top domestic O&D markets for United’s IAH nonstop service are illustrated below, with

Houston, Cleveland, and Los Angeles comprising the top three markets. Overall, the top 10

markets accounted for 34% of the DRT total passengers in CY 2012, accounting for

approximately $1.8 million in net revenue.



# DRT Top 10 O&D Markets

– Revenue and Passenger Pe rformance

CY 2012

SOURCE : Aviation DataMinerTM analysis of DOT/BTS O&D Survey



## DFW Hub: A Win

- Win fo r AA, Del Rio & Surrounding Multinational Region

The American Airlines Dallas

– Fort Worth hub is the most suited match that has the potential

for DRT air service. Due to deteriorating economics primarily resulting from aging regional jet

aircraft along with increased fuel prices, the bar set for smaller communities is becoming

increasingly higher in order to attract new air service. However, the DFW hub is a perfect optionProposal of Del Rio International Airport

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- 0120 Page 14 for Del Rio, as it is not only one of the United States’ premier hubs, but also a prem ier global

hub. At a 335 mile stage length between DRT and DFW, operational costs can be limited and

a smaller regional jet is the appropriate aircraft to serve this market.

Based on currently filed schedules, American’s DFW hub offers approximately 37% mo re

departures and 63% more available seats than does United’s IAH hub. Therefore, th e loss of

air service with United’s DRT

- IAH, while certainly an unwelcome event for the Del Rio

community, has the potential to be substantially improved with American Airl ines with even

greater connectivity for passengers traveling to and from the Del Rio region.



# American Airlines Domestic Connectivity at DFW

SOURCE: Innovata, LLC via Aviation DataMiner

The following tables illustrate the average number of nonstop flights to Del Rio’s top domestic

and international O&D markets as of CY 2012. As can be seen, DFW allows for outstanding

connectivity.



# DRT 2012 Top 10 Domestic and Int’l O&D Markets

And Connectivity on American Airlines via DFWProposal of Del Rio International Airport

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# 3. DRT Community: The Power of Partnership

The City of Del Rio and the Del Rio International Airport understand that a public

- private

partnership is critical to the success of sche duled air service, and for this reason have been

diligently working with the community to garner support for new scheduled air service.

Furthermore, the City of Del Rio has been partnering with Ciudad Acuna as well as the Nine

County Economic Development C ouncil to further strengthen the level of su pport that the

greater region can offer.

Among the types of support that the community has committed , and illustrated through the

attached letters of support for the DRT Small Community Air Service Development Program

grant proposal , include the following:



## Regional Business Revenue Guarantee Commitments

The City of Del Rio, as one of the many community partner s in this proposal , will be responsible

for the $100,000 in loc al dollar match under this grant proposal

.

In addition to the City of Del Rio dollar match of $100,000

, local businesses in the region have

offered a n additional $62,700 towards a Revenue Guarantee Fund as a sho w of their support

and commitment

. These commitments are further detailed in the attached letters of support

submitted as part of t he DRT grant proposal.



## In

- kind Incentives

In addition to local cash in the form of revenue guarantees there are several organizations

which have agree d to offer in

- kind incentives for new ly scheduled air service at DRT. The total

dollar value of the in

- k ind incentives is estimated to be $200

, 448.



## In

- kind Travel Pledges

The Community and the Airport are cognizant of the Department’s counsel in the past

regarding r eliance on “travel banks” and other such pre

- purchase concepts

.Proposal of Del Rio International Airport

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, maintain close contact with numerous business interests

within the greater DRT service area, many of which have committed to support the new service

for business travel. It is noted that “demand” in terms of numbers of passengers using a small

airport is largely driven by the availability of capacity

.

These commitments of support are not only from companies located in Del Rio, but also from

companies loc ated in Ciudad Acuna and the greater region

. It is esti mated that the value of

the new traffic committed to the potential new AA flights just from these busin esses is a

minimum of $12 6,368 annually

. This type of commitment is evidence that the community will

support any new air service t o the greatest extent possible.

These commitments

– in addition to and outside of the local match for the grant

– represent

the depth of support the community for the new service.Proposal of Del Rio International Airport

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# 4 . SCASD Grant Administration Plan

Responsibility for SCASD Grant Funds and Term of Grant

The City of Del Rio will administer SCASD grant funds as this proposal ’s legal sponsor. It is

requested that the term of the grant be for two year s

.



## Funding and Revenue Sources

The grant requested is $500,000, with a match of $1 62

, 7 00 from the loc al community fo r a

total of $6 62

, 7 00 in cash . These funds will be allocated as follows:



## Revenue Guarantee

The structure of the $5 62

, 7 00 risk abatement/revenue guarantee portion of the grant is

envisioned as follows:

 DRT will negotiate with the airline an agreed upon target revenue per flight

 DRT and the airline will develop a structured, scheduled and formalized revenue

determination formula . This includes the local O&D revenue, plus the DRT segment’s

portion of system connecting traffic revenue, ancillary fees, c argo revenue and other

revenue

 A computation will be made on a monthly basis of the progress of the new service. The

carrier will agree to provide the Airport with advance booking reports and previous

month’s traffic and rev enue results every thirty days

 The settlement for the revenue guarantee will be accomplished preferably af ter each

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## Marketing Support

The C ity of Del Rio and the Del Rio International Airport will embark on an extensive marketing

communications and advertising campaign in order to fully support and publicize new air

service if the grant is approved by the DOT . With $100,000 of the grant propo sal aimed at

marketing and advertising, there will be sufficient funds to launch a full scale campaign in both

the greater Del Rio region, but also across the US

- Mexico border in the greater Ciudad Acuna

region.

Advertising will be aimed at both the busi ness community and general public, with special

consideration given to increase DRT usage by Laughlin Air Force Base. Billboards, print

advertisements, radio advertisements, and social media marketing will be utilized to increase

the awareness of Del Rio I nternational Airport within the region and to build ridership on the

new scheduled air service.



## Plan to Monitor Funds and Project Effectiveness

The City of Del Rio will be responsible for monitoring and administering the grant. Quarterly

reports will be provided to the Department of Transportation as well as the community detailing

the progress made in achieving stated project goals and expenditures.



## Previous Air Service Development Efforts

The City and airport have been active in its efforts to continue to provide scheduled commercial

air service at DRT. Since the decision of United to cancel its IAH nonstop flights,

representatives from the City of Del Rio in con junction with representatives from Ciudad Acuna

have met with potential airline partners to expound on how the community ca n help support

new air service.

Most recently, the City and airport issued a survey within the community to better understand

the travel needs of the region. Not only has this generated signific ant local support for

reinstatement of scheduled air service, but also allowed for full comprehension of the needs

of the community in order to ensure the success of new air service at DRT. Am erican Airlines’

DFW hub exceeds the criteria that were offered in the over 25 0 survey responses.

The City recognizes that minimizing airline operational costs is of utmost importance to regain

service, and offers waivers of terminal rentals and fees and no cost in airport advertising whichProposal of Del Rio International Airport

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- 0120 Page 19 would provide a guaranteed cost benefit of approximately $2 8 ,000 annually . Furthermore, the

airport has a newly renovated 13,333 square foot fully maintained air passenger terminal

which includes the following:

 The use of a cus tomer interface ticketing point

 Two managerial offices, a dispatch section, and a break area

 Use of all common areas including passenger outbound/inbound lounges, climate

controlled baggage area, a pilot lounge, and a conference room

 Fully fu nctioning baggage handling system, public announcement system and a

passenger load ramp would also be provided at no fee

 The City would also provide building maintenance, custodial services and utilities at no

cost.

 No vehicle parking fees for passenge rs

The City of Del Rio has been extremely proactive to act as a supportive partner to incumbent

airlines in the past, and look forward to the opportunity to do so again in the near future. There

is a strong commitment to ensure that any new airline service is successful for the airline and

community alike.



## Difference s Between Current Grant Proposal and Previous Grant Award

The City of Del Rio was the recipient of a $318,750 Small Community Air Service Development

grant award during FY 2004 for risk abatement to start scheduled air service at Del Rio

International Airport. The community match for this award was $106,250, for a total of

$425,000 in cash contribution. This award was utilized to negotiate with Continental Airlines

to being air service in March 2005 to its Houston (IAH) hub.

The grant was crucial in attracting the airline, and , pertinent to the immediate grant request,

i t is impor tant to note that the 2004 grant incubated service that became self

- sufficient at the

end of the grant period . This is a clear indication that the Del Rio community can support new

scheduled air service, and the AA/ Dallas

– Ft. Worth hub is the logical opt ion.Proposal of Del Rio International Airport

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- 0120 Page 20 Furthermore , the state of the US aviation industry has changed significantly since 2005

.

 Delta Airlines merger with Northwest Airlines

 United Airlines merger with Continental Airlines

 Southwest Airlines merger with AirTran Airways

 American Airlines announcement of a merger agreement with US Airways

 Price of crude o il increasing from $50/barrel to $100/barrel, thus having a negative

impact on the price of jet fuel and making airline profitability even more challenging

 General air line consolidation and capacity discipline

– in addition to the mergers that

have decreased the number of US airlines the total domestic US capacity on a seat

basis has decreased by approximately 12% between 2005 and 2012

 US and global economic recession over the last several years has severely hindered

growth in the aviation industry due to decreased business travel demand and fewer

discretionary dollars for the leisure traveler

For these reasons, the current grant request can be expected to result in air success equal to

and likely greater than the 2004 award. However f rom an airline

- requirement perspective, the

current grant proposal should be viewed in a completely different light than the previous

award. The revenue requirements and fleet mixes in t he industry have changed drastically over

the last several years, and scheduled air service between Del Rio and American Airlines ’ Dallas

– Ft. Worth is the most realistic opportunity for the community of Del Rio to regain scheduled

air service in today’s environment.

The City of Del Rio, the Community and the surrounding multinational region appreciate the

Department’s consideration of this grant request.Dale Morris

Regional Vice President, Government Affairs American Eagle & Regional Communities

4333 Amon Carter Blvd
MD 5673 Fort Worth, Texas
817 967 0175 Office dale.morris@aa.com 

### June 6, 2013

Brooke Chapman

Associate Director Small Community Air Service Development Office of Aviation Analysis U.S. Department of Transportation 1200 New Jersey Ave., SE Washington, DC 20590

Room W86

- 307

Dear Ms. Chapman,

On behalf of American Airlines, I am pleased to provide this letter in support of the Del Rio International Airport (DRT) Small Community Air Service Development Grant Application.

The Del Rio International Airport, the only airport serving the Border Region in Southwest Texas between Laredo and El Paso has applied for a SCASD grant with the funds primarily intended to

establish a new air service rout e with the focus being on a Dallas Fort Worth International

connection.

As a Regional International Airport along the Texas/Mexico border, representatives from the City of Del Rio and their neighboring City of Ciudad Acuna Mexico approached American Airl ines recently to discuss the possibility of establishing a new air service route with a focus on a DFW connection.

American Airlines is committed to providing access to more choices and increased service across the company’s larger worldwide network. As part of our plan to expand service from our hubs to offer increased service to existing markets and service new cities we continually seek opportunities to provide our customers the most connected, comfortable travel experience available.

Although we are in the preliminary stages of analyzing the Del Rio market area and have made no commitment at this time to provide service, there are clear indicators that this region may be better served by focusing on a Dallas Fort Worth connection.

It is evident that this region has developed a strong Public/Private Partnership that is far reaching to include International, Regional and Local Community support of this new air service route.2



### It is evident, that the growing international industrial base coupled with the Air Force’s largest training base, Laughlin A.F.B. along with this regions flourishing tourism industry would be well served through the receipt of the Department of Transportation Small Community Air Service Development Grant.

We believe that DRT meets the criteria established by the Department of Transportation for consideration to receive a grant award; therefore we would ask that you give the Del Rio International Airport Small Community Air Service Development Grant Application your highest

considera tion for funding.

Sincerely,

Dale Morris Regional Vice President, Government Affairs American Eagle and Regional Communities