### Docket OST-2010-0124

DUNS #071607675 New York Congressional District #25 Legal Sponsor: City of Syracuse, New York 

# Proposal Under The Small Community Air Service Development ProgramProposal Under The Small Community Air Service Deve lopment Program

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# Table of Contents

PROPOSAL SUMMARY INFORMATION 3

Airport and Community Name 3 Community Support 3 Statement of Air Service Deficiency 3 Proposed Solution 4 Project Contact 4

SYR CATCHMENT AREA DESCRIPTION 5

Geographic Location 5 Population & Demographics 6 Economic Base 7 Higher Education 9 Military Presence 9 Retail 10 SYR Catchment Area: Dependent on Air Transportation 10

AIR SERVICE TRENDS & CHALLENGES 11

Current Air Service at Syracuse 12 Service & Capacity Trends at Syracuse Hancock Inter national Airport 13 Higher Average Fares at SYR Relative to Other Thruw ay Corridor Airports 16 The Canadian Factor 18 Negative Enplanement Trends at SYR 19 Previous Air Service Development Activities at SYR 20

PLAN TO ADDRESS AIR SERVICE DEFICIENCIES 21

Recapping the Challenge Facing SYR 21 Plan to Address Deficiency 21 Objective: Access to An Additional Low-Fare Airline Network 22 AirTran Airways – Baltimore (BWI) 23 Frontier Airlines – Denver (DEN) and/or Milwaukee ( MKE) 24 Southwest Airlines – Baltimore (BWI) and/or Chicago (MDW) 25 Spirit Airlines – Fort Lauderdale (FLL) 26

PROGRAM ADMINISTRATION PLAN 27

Proposed Use of Grant Funds 27 Program Management 27 Promotional Support for New Service 28 Project Timeline 29 Project Monitoring 29 Continuation of Project Activities After The Grant Period 29

APPENDIX B 30Proposal Under The Small Community Air Service Deve lopment Program

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# Proposal Summary Information

Airport and Community Name

City of Syracuse Syracuse Hancock International Airport 1000 Col. Eileen Collins Boulevard Syracuse, New York 13212 Tel. (315) 454-3263 Fax: (315) 454-8757

DUNS #071607675 New York Congressional District #25

The City of Syracuse Department of Aviation (hereaf ter referred to as “the City”) as the owner and operator of Syracuse Hancock International Airp ort (SYR) is the official sponsor of this grant application. Syracuse Hancock International Airport is the primary gateway for Central New York and serves a population of approximately 1.5 millio n people and a diverse economy anchored by education, manufacturing, services, research, bi otechnology, and clean and renewable
energy.



### Community Support

The CenterState Corporation for Economic Opportunit y (CEO) is partnering with the airport in submitting this proposal and providing matching fun ds for the grant. CenterState CEO is a nonprofit regional growth organization that sets the r egional economic development agenda, communicates business priorities to community leade rs, pursues strategic investments, and responds to meaningful opportunities for the benefi t of the region.

Over 65 member companies of CenterState CEO have co ntributed to provide the matching community funds in this SCASD proposal.



### Statement of Air Service Deficiency

New York’s “Thruway Corridor” runs east to west alo ng Interstate 90 and is anchored by four commercial service airports (from east to west): Al bany International Airport, Syracuse Hancock International Airport, Greater Rochester Internatio nal Airport, and Buffalo Niagara International Airport. Of these airports, SYR has the lowest numb er of nonstop destinations, lowest amount of capacity, smallest percentage of capacity provided by low-fare carriers, smallest percentage of capacity operated with mainline jet aircraft, and t he highest average fares.

The air service deficiency at Syracuse Hancock Inte rnational Airport results in significant amounts of traffic leakage to other airports along the New York State Thruway. This results in artificially low enplanements giving both incumbent and potential new-entrant carriers the perception that the Syracuse market generates low l evels of demand relative to its peers along the “Thruway Corridor.” Additionally, because traff ic leakage results in fewer passengers utilizing SYR facilities it results in a higher cos t per enplanement relative to the other airports.Proposal Under The Small Community Air Service Deve lopment Program

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### Proposed Solution

The SCASD grant funds requested herein will be used to provide a risk abatement fund for a low-fare carrier to initiate service at Syracuse Ha ncock International Airport, supported with marketing activities intended to generate awareness of the new service. The airport and its community partners believe that such service can ma terially reduce current levels of traffic leakage and create an overall strong competitive en vironment at SYR that benefits consumers of air transportation throughout Central New York.

The City is requesting $1,000,000 in (SCASD) progra m funds in this grant proposal to be matched with $300,000 in cash from CenterState CEO. Syracuse Hancock International Airport will also contribute $750,000 in fee waivers and ot her community partners will provide $250,000 “in-kind” marketing support, resulting in a total p roject fund of $2,300,000.



### Project Contact

The City and its community partners appreciate the opportunity to submit this proposal and look forward to favorable consideration by the Departmen t. Correspondence regarding the contents of this proposal should be directed to:

Ms. Christina Reale Public Information Officer City of Syracuse, Department of Aviation 1000 Col. Eileen Collins Boulevard Syracuse, New York 13212 Tel. (315) 454-3263 Fax: (315) 454-8757 Email: realeC@syrairport.org

The DUNS number appearing on the cover of this appl ication is that of the City of Syracuse which is shared by the Department of Aviation. Any information related to the DUNS number should be directed to:

Janet Burke Acting Director City of Syracuse, Bureau of Research 233 E. Washington Street Room 419 Syracuse, New York 13202 Tel: (315) 448-8020 Fax: (315) 448-8008Proposal Under The Small Community Air Service Deve lopment Program

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# SYR Catchment Area Description

Geographic Location

Syracuse Hancock International Airport is located i n Upstate New York, approximately equidistant between Buffalo to the west and Albany to the east. The airport is advantageously located near the intersection of Interstate 90 (New York State Thruway) oriented east and west and Interstate 81 oriented north and south. 

# Primary Air Service Catchment Area
Syracuse Hancock International Airport

****

SYR Primary Catchment Area

The airport’s position near the intersection of two interstate highways allows it to serve a wide catchment area that stretches east past Utica and R ome, west approximately halfway to Rochester, south past Cortland, and north to the Ca nadian border. 1 As will be highlighted later in this proposal, the reach of SYR actually extends across the Canadian border to include the communities of Kingston, Brockville, Cornwell and B elleville, Ontario as a result of taxes imposed on air travel by the Canadian government an d which makes travel to/from SYR a (relative) bargain.

1 Note that the catchment area includes Watertown, NY , a recipient of EAS-subsidized air service by Cape Air. Syracuse Hancock International Airport does not believe that grantin g the SCASD funds requested in this proposal will n egatively impact the EASsubsidized service at Watertown because that servic e operates to the state capital in Albany at very r easonable fares and provides customers with the multiple connecting opportunitie s, including with Southwest Airlines albeit on an “ end-to-end” ticketing basis.Proposal Under The Small Community Air Service Deve lopment Program

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As will also be detailed later in this proposal, th e proximity to the New York State Thruway can (and often does) work against Syracuse Hancock Inte rnational Airport. The ease of access to other Thruway Corridor Airports that this highway f acilitates results in a high level of traffic leakage as residents of the SYR primary catchment a rea seek out the greater choice of carriers, nonstop destinations, and lower fares that are avai lable at Albany, Rochester, and Buffalo.



### Population & Demographics

Approximately 1.5 million people reside within the primary catchment area of Syracuse Hancock International Airport. This population has an average per capita income of approximately $22,631 annually and averag e household income of $56,101 annually. 2

The core of the catchment area is the Syracuse Metropolitan Statistical Area (MSA), which is prese ntly ranked 81 st in the United States based on population. The Syracuse MSA had estimated population in 2008 of 735,777. 3

The Syracuse region has been recognized in numerous national publications including:

• Named most affordable city for housing in the Unite d States by CNN Money

in August 2010;

• In 2009, Next Generation Consulting ranked Syracuse 14 th among “mighty micros” for in its “Next Cities” rankings of the best places for young professionals to live and work;

• Places Rated Almanac listed Syracuse in its top 10% of best places to li ve;

• In 2009, Forbes

rated Syracuse the 129 th best city in the country for jobs (out of 336 ranked), an overall ranking improvement of 121 plac es;

• Parenting magazine included Syracuse among its top 100 best c ities for raising small children in 2010, based on an assessment of afforda ble living, healthy economy, low crime rate, clean environment, and good schools;

• In 2008, Popular Science ranked Syracuse as the 17 th “greenest city” in the United States;

• Newsweek magazine included eight of the area’s high schools in “America’s Top Public High Schools.”

2 SOURCE: Microsoft MapPoint

3 SOURCE: ESRI Database of Census Data The City of Syracuse is the core of the Hancock International Airport catchment area and is undergoing an economic and
cultural renaissance.Proposal Under The Small Community Air Service Deve lopment Program

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### Economic Base

The catchment area of Syracuse Hancock Internationa l Airport serves a diverse and growing economic base that ranges from farming and agricult ure to the latest research in bioscience and renewable energy. Major employers in the airport ca tchment area listed on the table on the next
page.

Renewable Energy

Renewable energy in particular has become a focus o f the Central New York economy, anchored by the Syracuse Center of Excellence in Environmental and Energy Systems (SyracuseCoE). Representing a federation of over 200 firms, organizations, and institutions, SyracuseCoE is focused on research, product development, commercialization assistance, and education programs related to systems that monitor and control thermal comfort, air quality, lighting, sou nd, water quality, and innovative energy systems, including renewable and clean energy sources from wind and so lar power to geothermal and fuel cells.

In March 2010, SyracuseCoE moved into a 55,000 squa re foot, $41 million dollar headquarters building in d owntown Syracuse that includes office space, laboratories, and classrooms.

Biosciences

The biosciences have a strong presence in the Syrac use area economy, including a 90-acre campus in East Syracuse of Bristol-Myers Squibb. At this location, the company conducts in biotechnology development and manufacturing operati ons, and pharmaceutical research laboratories, primarily in the areas of oncology an d auto-immune diseases.

Another is Syracuse-based Hanford Pharmaceuticals, which specializes in the manufacture of antibiotics and compounds that require advanced ste rile production. Its 192,000 square feet of facilities are spread across three locations in Syr acuse and the company is a leading producer for firms such as American Home Products, Pfizer, B ristol-Myers Squibb, Geneva, and Watson. It also manufactures veterinary products that are m arketed under the USVet brand.

Building on this established base, The Central New York Biotechnology Research Center is a three-phase plan that envisions an $80 million, 240 ,000-square-foot facility containing research labs, technology-transfer space, offices, and confe rence rooms for biotechnology research and economic development efforts. The first phase of th is project, currently under construction with occupancy expected in early 2011, will house betwee n 20 and 30 companies and will target spin-off companies from area colleges, including SU NY Upstate Medical University, SUNY College of Environmental Science & Forestry, Syracu se University, and SUNY College of Agriculture & Technology at Morrisville. The $41 million headquarters of the Syracuse Center of Excellence in Environmental and Energy Systems, opened in March 2010.Proposal Under The Small Community Air Service Deve lopment Program

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# Major Employers in SYR Catchment Area

Firm City # of Employees Additional Information

SUNY Upstate Medical University Syracuse 6,400 Academic health science and acute referral center; recently opened $120 million Galisano Children’s Hospital

Syracuse University Syracuse 5,925 Higher education; over $400 million in construction recently completed or currently underway on campus

Wegman’s Food Markets Liverpool 3,760 10 food/pharmacy retail locations throughout Central New York

St. Joseph’s Hospital Health Center Syracuse 3,150 Presently undergoing $220 million expansion

Crouse Hospital Syracuse 2,400 Currently undergoing $35 million surgical center expansion

Lockheed-Martin MS2 Liverpool 2,350 Systems integrator of network-centric naval combat systems National Grid Syracuse 1,850 Electric and gas utili ty

Carrier Corporation East Syracuse 1,500 Research & development for air conditioning, heating and refrigeration equipment L.& J. G. Stickley, Inc. Manlius 1,445 Manufacturer of fine furniture The Hartford Financial Service Syracuse 1,200 Inves tments and insurance

Syracuse VA Medical Center Syracuse 1,150 $78 million northeast regional spinal cord injury center currently under construction

Welch Allyn Skaneateles Falls 1,100 Diagnostic medical instruments, automotive material handling devices, and specialty lamps and fiber optics; currently undergoing $30 million expansion of headquarters and manufacturing facilities AXA Equitable Life Insurance Syracuse 1,100 Life i nsurance and financial products Syracuse Research Corporation (SRC) Syracuse 1,100 Information technology

Commed Corporation Utica 1,000 Manufacturer of medical equipment and devices Excellus (Blue Cross & Blue Shield) Syracuse 980 In surance and health care Anheuser-Busch Inc. Baldwinsville 940 Brewery Remington Arms Herkimer 900 Firearms manufacturing Bank of New York East Syracuse 850 Back office fina ncial operations

Pall Corporation Cortland 800 Filtration, separation, and purification systems

Bristol-Myers Squibb East Syracuse 820 Antibiotic manufacturer; research and development of new pharmaceuticals Eagle Comtronics Clay 800 Cable television componen ts Sensis Corporation Syracuse 600 Surveillance equip ment

Anaren Microwave East Syracuse 600 Electronic combat warning and targeting receiver systems for military aircraft, ships, submarines and combat vehicle systemsProposal Under The Small Community Air Service Deve lopment Program

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### Higher Education

The catchment area of Syracuse Hancock Internationa l Airport includes a number of colleges and universities that rely on air transportation, n ot only for their student populations, but also for faculty and staff, recruiters, athletic events, and associated research activities. The major institutions within the catchment area are summariz ed on the table below: 

# Syracuse Area College & University Enrollment

College/University Total Enrollment Syracuse University 19,600 State University College at Oswego 8,282 State University College at Cortland 7,224 LeMoyne College 3,544 SUNY College of Agriculture & Technology at Morrisv ille 3,262 Colgate University 2,810 Utica College 2,505 SUNY College of Environmental Science & Forestry 2, 140 Hobart William & Smith College 2,091 Hamilton College 1,812 SUNY Upstate Medical University 1,445 Cazenovia College 1,205 Wells College 416

In addition to those listed on the table above, SYR serves as the gateway to the air transportation system for students from the followi ng colleges and universities in the surrounding region: Cornell University (20,358 enro llment), Clarkson University (3,200 enrollment), St. Lawrence University (2,400 enrollm ent), Ithaca College (6,408 enrollment), and SUNY Binghamton (12,400 enrollment).

When community college enrollment is factored in, t he catchment area of Syracuse Hancock International Airport has the third highest concent ration of higher education institutions in the United States, behind only Boston and San Francisco

. 

### Military Presence

Fort Drum Army Base is located one-hour north of Sy racuse and is a major generator of passenger enplanements for Syracuse Hancock Interna tional Airport. The base’s mission includes command of active component units assigned to the installation, administrative and logistical support to tenant units, support to tena nt units, support to active and reserve units from all services in training at Fort Drum, and pla nning and support for the mobilization and training of almost 80,000 troops annually.

Fort Drum is the largest single-site employer in Ne w York State, with nearly 30,000 civilian and military personnel, with additional growth expected to occur by 2013 as a result of the Base Realignment and Closure (BRAC) process. To support this growth, the base recently completed over $500 million in expansion consisting primarily of additional housing.Proposal Under The Small Community Air Service Deve lopment Program

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Syracuse Hancock International is also a joint-use facility with the New York Air National Guard
174 th Fighter Wing. This facility recently transitioned to unmanned MQ-9 “Reaper” drones and completed construction of an $8.0 million training and maintenance facility which will serve as only two such units for active and reserve military in the United States.



### Retail

Syracuse is also the retail hub of Upstate New York , anchored by the Carousel Center mall which is presently undergoing a major expansion tha t will transition it to the “Destiny USA” retail resort and make it one of the largest retail comple xes in the United States.

The first phase of the expansion, which is slated t o open in spring 2011, involves an investment of $540 mill ion and will include over 2.4 million square feet of re tail, dining, and entertainment venues. Two additional gr owth phases are planned.

A unique component of the Destiny USA development i s its “green credentials.” In 2007, the project was p recertified LEED Gold by the United States Green Buil ding Council (USGBC) and final certification will occur when construction is completed. During the construction process, Destiny USA has become the 5 th largest purchaser of green power in New York State, recycle d 95% percent of all construction debris and waste, a nd used hybrid and biodiesel powered vehicles.



### SYR Catchment Area: Dependent on Air Transportation

As outlined, the catchment area of Syracuse Hancock International Airport is home to a diverse and expanding economic base. The City and its commu nity partners clearly understand, however, that economic stability is fragile and tha t competitive air service is a critical component in business recruitment and retention.

The Small Community Air Service (SCASD) grant funds requested in this proposal, along with the matching funds from the community partner, are intended to ensure that Syracuse Hancock International Airport can continue to play a role a s an economic engine for all of Central New York by putting in place a financial mechanism to r ecruit new, low-fare airline service. When the first phase opens in spring 2011, Destiny USA will become one of the premiere retail destinations in the United
States.Proposal Under The Small Community Air Service Deve lopment Program

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# Air Service Trends & Challenges

As noted earlier in this proposal, Syracuse Hancock International Airport is conveniently located near the convergence of Interstate 90 and Interstat e 81. While this would generally be to an airport’s favor, the fact that SYR has measurably l ower levels of air service than airports in Albany, Rochester, and Buffalo (and particularly le sser levels of low-fare service) means that Interstate 90 actually functions as a conduit for t raffic leakage from Syracuse. The geographic position of the Thruway Corridor Airports is illust rated on the map below.


# New York State “Thruway Corridor” Airports

Buffalo Niagara International Airport

Albany International Airport Syracuse Hancock International Airport

Greater Rochester International Airport



## Approximate Drive Times: SYR and Thruway Corridor A irports

Alternative Airport Mileage Approx Travel Time Albany International Airport 145 2 hours 35 minutes Greater Rochester International Airport 93 1 hour 3 0 minutes Buffalo Niagara International Airport 142 2 hours 3 0 minutes

SOURCE: Microsoft MapPoint

By recruiting additional low-fare service with the assistance of SCASD grant funds requested in this proposal, the City and its community partner b elieve that traffic can be recaptured and the airport can play a significant role in ensuring con tinued economic vitality for all of Central New York.Proposal Under The Small Community Air Service Deve lopment Program

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### Current Air Service at Syracuse

As of August 2010, Syracuse Hancock International A irport was served by seven airline brands. These carriers provide an average of 3,774 departin g seats on 61 daily departures to 15 nonstop destinations. 

# Current Scheduled Air Service Syracuse Hancock International Airport: August 2010

SOURCE: Innovata, LLC via

NOTE: Map illustrates domestic routes only; Air Canada provides service to Toronto Carrier Destination Weekly Departures Weekly

Seats Average Seats

per Departure

American Chicago 33 1,536 46.5
Air Canada Toronto 14 252 18.0

New York - JFK 27 3,148 116.6 Orlando 7 1,092 156.0
Cleveland 20 883 44.2 Newark 27 1,288 47.7 Atlanta 27 1,890 70.0
Cincinnati 6 300 50.0 Detroit 33 2,264 68.6 New York - JFK 28 1,426 50.9 Washington - IAD 28 1,640 58.6 Chicago 42 2,596 61.8
Boston 19 646 34.0 Charlotte 15 1,748 116.5 Washington - DCA 27 1,721 63.7 New York - LGA 28 1,257 44.9 Philadelphia 48 2,730 56.9 429 26,417 61.6 Total Delta

United

US Airways Continental JetBlue

As illustrated on the table below, service levels a t Syracuse Hancock International Airport are the lowest among all Thruway Corridor Airports and are key contributor to the significant amounts of traffic leakage experienced at SYR. 

# Comparison of Scheduled Airline Service

Thruway Corridor Airports: August 2010

Airport SYR BUF ROC ALB
Airline Brands 7 8 8 7 Nonstop Destinations 15 23 20 25 Avg Daily Departures 61 105 72 69 Avg Daily Departing Seats 3,774 9,666 4,788 4,684 Avg # of Seats per Departure 61.6 91.6 66.6 68.3 % Capacity Provided by LCC 16.1% 48.2% 29.0% 37.2%Proposal Under The Small Community Air Service Deve lopment Program

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Of particular significance on the preceding table i s the percentage of capacity provided by lowfare carriers (otherwise referred to as “LCCs”). Th e percentage of low-fare capacity at SYR is a relatively meager 16.1% with the nearest being 29% at ROC, nearly double that of Syracuse. Moreover, in excess of one-third of the total seats available at ALB and BUF are provided by low-fare carriers. The SCASD grant funds requested in this proposal are intended to “close the gap” between SYR and the other Thruway Corridor Air ports by facilitating the recruitment of an additional low-fare carrier.



### Service & Capacity Trends at Syracuse Hancock Inter national Airport

The current service level deficiencies at Syracuse Hancock International Airport relative to peer airports long the Thruway Corridor is indicative of an ongoing trend that includes discontinuance of nonstop markets and an overall decline in availa ble seats.

Overall Market Capacity

Since the beginning of 2007, the average number of monthly departing seats at Syracuse Hancock International Airport has declined by 26,23 2, or 18.1%. In comparison, monthly departing seats at Albany International Airport and Greater Rochester International Airport have declined by lesser percentages, 13.7% and 13.9% res pectively. The number of monthly seats at BUF has actually increased over the same period, by 6.2%. 

# Scheduled Service Capacity Trend at SYR
Monthly Departing Seats: Jan 2007 – Aug 2010

SOURCE: Innovata, LLC via 145,106

118,874

90,000 100,000 110,000 120,000 130,000 140,000 150,000

January 2007

ALB: 167,786 ROC: 174,843 BUF: 278,145 August 2010 ALB: 144,824 ROC: 150,529 BUF: 295,321Proposal Under The Small Community Air Service Deve lopment Program

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Discontinued Routes Detail

It is important to note that the decline in number of seats at Syracuse is not simply a factor of reduced frequencies or average number of seats per departure. Nonstop service from SYR to a number of key destinations has been discontinued in recent years, as illustrated on the table below. 4



# Summary of Discontinued Nonstop Routes Syracuse Hancock International Airport: Aug 2005 – Aug 2010

SOURCE: T-100 data,

The loss of service in 2005 left SYR as the only th e Thruway Corridor Airport without flights to Baltimore and, in fact, Syracuse is the largest cit y in the northeast without nonstop service to BWI. There are low-fare air service recruitment tar gets for Syracuse Hancock International Airport that have large operations at BWI and which represent candidates for restoring nonstop flights. The availability of SCASD grant funds requ ested in this proposal would significantly assist in such recruitment efforts.

4 Data does not include a number of regional routes that were operated by Commutair dba US Airways Expr ess and Continental Connection as this carrier was not required to file d T-100 data. Example markets include Newburgh, Whi te Plains, Buffalo, Islip, etc.



### Market Carrier Date Discontinued Baltimore US Airways November 1, 2005 Dallas/Fort Worth American September 1, 2008 Fort Lauderdale jetBlue January 1, 2009 Hartford/Springfield US Airways September 1, 2008 Minneapolis/St. Paul Northwest November 1, 2005 Pittsburgh US Airways September 1, 2008Proposal Under The Small Community Air Service Deve lopment Program

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Dominance of Regional Jets at SYR

An additional challenge for Syracuse Hancock Intern ational Airport is the overwhelming dominance of regional jets that airlines schedule i nto the market. During the month of August 2010, a full 62% of capacity was provided by region al jet aircraft compared to 51%, 44%, and 24% at Rochester, Buffalo, and Albany, respectively

. 5 It is also significant to point out that SYR is the only Thruway Corridor Airport that neither D elta Air Lines nor United Airlines operate mainline equipment. 

# Capacity by Aircraft Type Thruway Corridor Airports: August 2010

SOURCE: Innovata, LLC via Mainline Jet 25%

Propeller 13% Regional Jet 62% 

### Syracuse Propeller 6% Regional Jet 24%

Mainline Jet 70% 

### Buffalo

Propeller 10%

Regional Jet 51% Mainline Jet 39% 

### Rochester Propeller 11%

Regional Jet 44% Mainline Jet 45% 

### Albany

The relatively small increments of capacity place S yracuse area consumers at a significant disadvantage when searching for low fares. In parti cular, it often means that price sensitive consumers are required to travel at off-peak times in order to obtain a fare that is competitive with those available at ALB, ROC, or BUF.

High Load Factors at SYR

Another factor that inhibits the ability of Central New York consumers in obtaining reasonable fares is the high average load factors experienced on the current air service at Syracuse Hancock International Airport. For the year ending May 31, 2010, the average load factor at SYR was 77.2%.

5 Mainline aircraft = Boeing 737, Embraer 190, Airbu s A319/A320 series; Regional jet = Embraer 170/175, CRJ 200/700/900, and Embraer 145; Propeller = DeHavilland Dash 8 series, Saab 340, and Cessna 402CProposal Under The Small Community Air Service Deve lopment Program

OST-2010-0124 Page 16



# Syracuse Hancock International Airport Scheduled Service Load Factors: YE May 31, 2010

SOURCE: 92.0%

41.7% 79.8% 83.9% 86.1%

71.8% 86.2%

79.2% 79.5% 75.0% 71.2%

60.6% 84.5% 84.1% 82.8%

71.3%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Market Avg = 77.2%

The problem of high load factors is particularly pr onounced to connecting hubs which provide critical connectivity throughout the national air t ransportation system. This includes Atlanta (92.0%), Charlotte (83.9%), Detroit (86.2%), and Ch icago (84.1%). When non-hub markets are excluded (Washington-National, New York-LaGuardia, and Boston), the market level average load factor for SYR increases to 79.5%.

Clearly the market area served by Syracuse Hancock International Airport can support additional service and the SCASD grant funds reques ted in this proposal are intended to assist in the recruitment of such service, specifically an additional low-fare carrier.



### Higher Average Fares at SYR Relative to Other Thruw ay Corridor Airports

The overall impact of percentage of low-fare seats offered in each of the Thruway Corridor airports is best measured by average fare paid. Usi ng this metric, consumers at SYR on paid a higher average fare in domestic markets that their peers at any of the other Thruway Corridor Airports during the 12-months ending March 31, 2010

.Proposal Under The Small Community Air Service Deve lopment Program

OST-2010-0124 Page 17



# Average OW Gross Fares Thruway Corridor Airports: YE March 31, 2010

SOURCE: $147.63 $166.53 $204.00

$198.10

$125.00 $150.00 $175.00 $200.00 $225.00

BUF ROC SYR ALB

28% lower than SYR 18% lower than SYR 3% lower than SYR

NOTE: Average OW fare includes taxes and fees (i.e. , segment fee, security, PFC, etc.)Average OW Gross Fare Paid – All Passengers/All Markets

As the data illustrates, consumers in the catchment area of Syracuse Hancock International Airport have sufficient economic motivation to util ize other airports, particularly ROC and BUF where the average savings on a one-way basis equate d to $37.47 and $56.37, respectively, over the past year. 6

Higher Fares: A Chronic Market Condition at SYR

It is important to point out the higher fares at SY R for the year ending March 31, 2010 are not a singular occurrence, but rather are indicative of a long-term market trend that has negatively impacted enplanement levels at Syracuse Hancock Int ernational Airport. This is illustrated on the graph on the next page which shows average OW g ross fares by quarter beginning in the first quarter of 2007.

6 Note that despite the presence of Southwest Airlin es, the fare differential between SYR and ALB is th e lowest. This is believed to be due to large number of last-minute tickets purch ased due to Albany’s role as the state capital and having a higher percentage of business travelers relative to the other Thruway Co rridor markets.Proposal Under The Small Community Air Service Deve lopment Program

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# Average OW Gross Fare Trend Thruway Corridor Airports: 1Q2008-1Q2010

SOURCE: NOTE: Average OW fare includes taxes and fees (i.e. , segment fee, security, PFC, etc.) $145.75 $144.45 $148.76 $154.62 $161.32 $164.05

$168.54

$157.28

$145.03

$138.26 $142.80 $152.45 $159.85 $168.98 $171.40 $172.50 $176.24 $186.52 $197.99 $195.84

$177.34

$162.94

$160.44 $161.15 $169.94 $175.93 $194.11 $196.33

$204.04 $207.38 $213.01 $232.04 $228.52

$210.99

$198.37

$193.11 $204.51 $207.88 $210.92

$187.30 $185.04 $190.87 $194.69 $197.23 $209.36

$220.26

$201.75

$181.86 $183.72 $197.96 $202.54 $210.31

$120.00 $140.00 $160.00 $180.00 $200.00 $220.00 $240.001Q 20072Q 20073Q 20074Q 20071Q 20082Q 20083Q 20084Q 20081Q 20092Q 20093Q 20094Q 20091Q 2010

BUF ROC SYR ALBAverage OW Gross Fare Paid – All Passengers/All Markets

The SCASD grant funds requested in this proposal wi ll be utilized to recruit additional low-fare service to SYR thereby closing (and potentially eli minating) the average fare differential with other Thruway Corridor airports.



### The Canadian Factor

A positive factor for Syracuse Hancock Internationa l Airport is the ability to draw passengers from across the Canadian border that seek to avoid much higher levels of taxation on air transportation than in the United States. A compar ison of air fare and taxes is provided on the below and illustrates why Canadian travelers are ma king the drive to SYR and other airports.

Base Fare $522.51 Base Fare $380.17 GST $27.99 US Excise Tax $30.83 HST $5.95 Federal Segment Tax $14.80 AIF $48.00 PFC $18.00 ATSC $23.08 9/11 Security Fee $10.00 US Taxes and Fees $50.78 Nav/Ins. $15.00 TOTAL $693.32 TOTAL $453.80

Effective Tax Rate 32.7% Effective Tax Rate 19.4%

NOTE: All figures in USD jetBlue Ottawa Departure 

### Orlando: Departing Oct 8, Returning Oct18

Westjet

SOURCE: carrier w ebsites Syracuse DepartureProposal Under The Small Community Air Service Deve lopment Program

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The phenomenon of Canadians crossing the border to avoid taxes on air transportation is not unique to SYR. A number of other airports are exper iencing similar benefits including Burlington, VT (BTV); Plattsburgh, NY (PBG); Buffalo, NY (BUF); Bellingham, WA (BLI); and Spokane, WA (GEG).

While Canadian travelers coming across the border t o avoid taxes on air travel is a benefit for Syracuse Hancock International Airport, it is impor tant to emphasize that these passengers also have the choice of using the other Thruway Corridor Airports, and often do. In this context, the potential to attract Canadian travelers should not be interpreted as minimizing the need of Syracuse Hancock International Airport for the SCAS D grant funds requested in this proposal.



### Negative Enplanement Trends at SYR

Notwithstanding the positive notes above regarding use of Syracuse Hancock International Airport by Canadian travelers, the overall impact o n enplanements of the air service deficiencies discussed in this section of the proposal has been extremely negative. In fact, SYR is on track to end the current decade with fewer annual passeng er enplanements than at the beginning.



# SYR Enplanement Trend

CY 2000- CY 2009

1,069,123

1,024,227

800,000 900,000 1,000,000 1,100,000 1,200,000 1,300,000 1,400,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

SOURCE: City of Syracuse, Department of Aviation Note that in the middle of decade, Syracuse Hancock International was able to generate a brief spike in passenger enplanements. This was the direc t result of a comprehensive marketing program that the airport and its community were abl e to implement as the result of an earlier SCASD grant (discussed below). Unfortunately, marke t conditions outside the control of Syracuse community including high fuel prices, bank ruptcies, consolidation, and economic recession have prevented this from being a sustaine d success.Proposal Under The Small Community Air Service Deve lopment Program

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The airport and its community partners are ready an d able, however to implement the same level of effective partnership to ensure that the S CASD funds are translated in sustainable improvements in the overall capacity and pricing en vironment at Syracuse Hancock International Airport and therefore request that th e Department act favorably on this proposal.



### Previous Air Service Development Activities at SYR

The City and CenterState CEO understand the critica l role that air transportation plays in economic development and quality of life, and are c ommitted to improving the quantity and quality of air service available at Syracuse Hancoc k International Airport. The City and CenterState CEO have cooperatively pursued an aggre ssive air service development program over the past several years, with the objective of securing new and improved services in underserved Syracuse markets.

These activities include on-going dialogue with inc umbent and potential new entrant airlines to the Syracuse market, participation in industry even ts including “speed dating” conferences that provide opportunities for meetings with potential n ew carriers, public relations activities including a public art program, and cooperative advertising e vents.

The City has also has an on-going “air service mark eting program” under which marketing support and fee/rent discounts are available to air lines that bring new lower-fare, non-stop service to key markets. The benefits of the marketi ng program are available to both incumbent and new entrant airlines in a non-discriminatory ma nner, if the new service meets specific eligibility criteria.

Earlier SCASD Grant Award

Many of the advertising and promotional activities referenced above were able to be implemented as a direct result of a SCASD grant tha t the Department awarded in 2004. This earlier grant provided funding for an extensive mar keting program focused around the theme of “Fly Syracuse” and which, as noted earlier, had suc cess in increasing passenger enplanements at Syracuse Hancock International Airport. Unfortun ately, significant events outside the control of the City and its community partners (i.e., spike in fuel prices, economic recession, airline bankruptcies) have handed this program a setback in terms of measurable success. Nonetheless, the City and CenterState CEO remain co mmitted to the “Fly Syracuse” program.

The project for which the SCASD grant funds are req uested in this proposal is materially different in that it seeks to provide revenue guara ntees for new, low-fare service at SYR, whereas the previous grant award was intended to in crease local use of the airport through marketing activities. 7

7 Note that community partners are providing $250,00 0 worth of “in-kind” marketing support for new serv ice which may be initiated using risk abatement funds requested in this propos al. These funds are specific to this project and ar e intended to ensure that the new service is successful and requires the least am ount of risk abatement funding. This marketing acti vity, therefore, does not overlap with the objectives of the “Fly Syracuse” p rogram.Proposal Under The Small Community Air Service Deve lopment Program

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# Plan to Address Air Service Deficiencies

Recapping the Challenge Facing SYR

To this point in the proposal, the City has identif ied numerous air service deficiencies at Syracuse Hancock International Airport which contri bute to significant levels of traffic leakage. To recap, major deficiencies are:

• Lowest percentage of LCC capacity among all Thruway Corridor Airports;

• Lowest percentage of overall capacity among all Thr uway Corridor Airports being provided by mainline aircraft;

• Highest average OW gross fares among all Thruway Co rridor Airports;

• A steady decline in overall capacity as measured by number of seats being offered in the market;

• Relatively high load factors which inhibit the abil ity of Central New York residents and businesses to obtain competitive a fare at SYR; and

• Limited access to hubs providing westbound connecti vity, particularly relative to Albany which has nonstop service to Las Vegas, and Buffalo which has nonstop service to Las Vegas and Phoenix.

The City and its community partner, CenterState CEO , believe that recruitment of additional low-fare service can rectify many of these deficien cies by creating a much stronger competitive environment at Syracuse Hancock International Airpo rt. This will, in turn, “level the playing field” between SYR and its Thruway Corridor Airport peers and reduce overall levels of traffic leakage.



### Plan to Address Deficiency

The City also recognizes, however, that airlines ar e increasingly reticent to initiate service at a new market without a reasonable level of risk abate ment funding to fund potential early losses. Indeed, this is often a point of discussion when th e City and CenterState CEO meet with carriers about the potential of launching new service at SYR

.
For this reason, the City is requesting a Small Com munity Air Service Development grant in the amount of $1,000,000, to be matched with $300,000 i n cash provided by the City’s partner, CenterState CEO. The risk abatement funds will be s upplemented by the City with airport fee waivers valued at approximately $750,000 plus an ad ditional $250,000 worth of “in-kind” marketing support provided by other community partn ers. In total, the project contemplated in this grant proposal will result in funding of appro ximately $2.3 million available to address the identified air service deficiencies at Syracuse Han cock International Airport.Proposal Under The Small Community Air Service Deve lopment Program

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### Objective: Access to An Additional Low-Fare Airline Network

As discussed, the objective of the City and its com munity partner is to recruit an additional lowfare carrier that creates a stronger competitive en vironment at Syracuse Hancock International and have identified the following candidates:

• AirTran Airways: Daily service to Baltimore/Washington;

• Frontier Airlines: Less-than-daily service to Denver and/or daily ser vice to Milwaukee;

• Southwest Airlines: Daily service to Baltimore/Washington and/or Chica go (Midway); and

• Spirit Airlines: Daily service to Fort Lauderdale. 8

It is important to note that above list is not spec ulative in nature. The City and/or CenterState CEO have held discussions with each of the carriers listed and some have agreed to provide letters of support for this proposal under separate cover and on a confidential basis.

Each of the potential options is discussed briefly over the following pages, along with an illustration of the likelihood for sustained profit ability based on a forecast prepared by a nationally-recognized air service development consu ltant. The carriers and routes are presented in no particular order of preference or stage of di scussions.

It is important to note that the City is requesting in this proposal the flexibility to negotiate with more than one carrier, taking into account changing strategies at each which may advantageous to the City depending on the timing by the Departme nt of grant awards. For this reason, the proposal herein is not specific to one carrier but rather focused on multiple options for addressing the identified deficiency.

8 With the exception of Frontier Airlines, all of th e carriers listed above have a significant presence at Orlando. The risk abatement funds requested in this proposal would not be avail able for MCO service as this route is already flown by jetBlue Airways. The same applies to the exclusion of AirTran service to ATL, a route that is already flown by Delta Air Lines. It noted that both AA and UA provide service from SYR to Chicago’s O’Hare Intern ational Airport and that if the City is successful in recruiting Southwest Airlines service would be Midway Airport, which serves a dif ferent local market. Nonetheless, the City would co nsult with the Department before agreeing to provide risk abatement funding f or SYR-MDW service.Proposal Under The Small Community Air Service Deve lopment Program

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### AirTran Airways – Baltimore (BWI)

AirTran Airways service to Baltimore-Washington Int ernational Airport would restore service to BWI that was previously operated by US Airways. As noted earlier in this application, Syracuse Hancock International Airport is the only Thruway C orridor Airport and the largest city in the northeast without nonstop service to BWI

AirTran service to BWI is projected to be profitabl e operation generating a 12.8% operating margin on a steady-state basis. Service is assumed to be operated three times daily (reduced frequencies on weekends) Boeing 717 equipment seati ng 117 passengers.



# Projected Market Performance

AirTran Airways @ SYR

Although risk abatement funds are not requested for the purpose of Atlanta service given that Delta Air Lines already operates SYR-ATL on a nonst op basis, it is anticipating that the presence of AirTran in Syracuse would have the desi red effect of placing downward pressure on Atlanta fares. The cost of travel to/from Atlanta ( particularly relative to ROC) is a continuing challenge for the Central New York business communi ty. Carrier AirTran
Route SYR-BWI

Key Operating Metrics

Sector Length (sm) 273 Aircraft Type Boeing 717 Seats per Departure 117 Weekly Segments 34 Completion Factor 99.0%
Estimated Block Time 1.1

Operating Revenues

Local Passengers 44,590 Average Fare $83.80 Local Revenues $3,736,708

Connecting Passengers 83,749 Average Revenue Allocation $51.20 Prorated Connecting Revenues $4,287,801

Ancillary Revenues $802,451

Annual Sector Revenues $8,826,959

Operating Expenses

Estimated CASM $0.140 Sector Cost $4,471.74 Cost per Block Hour $4,065.22

Annual Sector Operating Costs $7,826,976

Projected Operating Profit/(Loss) $999,984

Operating Margin 12.8%
Load Factor 62.7%Proposal Under The Small Community Air Service Deve lopment Program

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### Frontier Airlines – Denver (DEN) and/or Milwaukee ( MKE)

Frontier Airlines service would provide Syracuse ar ea travelers with enhanced connectivity to the western United States via either of its hubs at Milwaukee or Denver. Traffic and revenue forecasts for Frontier service have been prepared s howing on a steady-state basis that service to either hub can be profitable assuming recapture of traffic currently leaking to other Thruway Corridor Airports and stimulation of net-new traffi c resulting from the introduction of lower fares.



# Projected Market Performance

Frontier Airlines @ SYR

Note that DEN service is projected to have a limite d amount of connecting traffic. This is due to the fact that Denver service is assumed to be less than daily, consistent with the strategy that Frontier has implemented in a number of markets of similar size, including Newport News, Grand Rapids, and Des Moines. Given the less than d aily nature of the service, it assumed that Frontier’s ability to capture market share among co nnecting flows would be limited.

Carrier Frontier Frontier
Route SYR-MKE SYR-DEN

Key Operating Metrics

Sector Length (sm) 595 1,487 Aircraft Type ERJ-145 EMB-190 Seats per Departure 50 100 Weekly Segments 42 8 Completion Factor 99.0% 99.0%
Estimated Block Time 1.7 2.9

Operating Revenues

Local Passengers 20,993 28,224 Average Fare $105.98 $157.40 Local Revenues $2,224,761 $4,442,265

Connecting Passengers 63,053 8,118 Average Revenue Allocation $136.25 $148.63 Prorated Connecting Revenues $8,590,827 $1,206,523

Ancillary Revenues $1,297,871 $677,855

Annual Sector Revenues $12,113,458 $6,326,643

Operating Expenses

Estimated CASM $0.182 $0.099 Sector Cost $5,414.50 $14,721.30 Cost per Block Hour $3,185.00 $5,076.31

Annual Sector Operating Costs $11,707,015 $6,062,820

Projected Operating Profit/(Loss) $406,443 $263,822

Operating Margin 3.5% 4.4%
Load Factor 77.7% 88.2%Proposal Under The Small Community Air Service Deve lopment Program

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### Southwest Airlines – Baltimore (BWI) and/or Chicago (MDW)

As with AirTran Airways, Southwest Airlines service to Baltimore-Washington International Airport would restore service BWI that was previous ly operated by US Airways. As noted earlier in this application, Syracuse Hancock International Airport is the only Thruway Corridor Airport without nonstop service to BWI. Consistent with Sou thwest’s practice of initiating service to a new city from more than one hub, a forecast for Chi cago Midway service was prepared as well.



# Projected Market Performance

Southwest Airlines @ SYR

Southwest Airlines service at Syracuse is projected to be profitable to both MDW and BWI, generating operating margins of 9.0% and 8.1%, resp ectively. Note that in both cases, the local market is projecting to be stimulated significantly above reported historic O&D levels which is consistent with the “Southwest Effect.”

Carrier Southwest Southwest
Route SYR-BWI SYR-MDW

Key Operating Metrics

Sector Length (sm) 273 600 Aircraft Type 737-700 737-700 Seats per Departure 137 137 Weekly Segments 48 42 Completion Factor 99.0% 99.0%
Estimated Block Time 1.1 1.6

Operating Revenues

Local Passengers 35,657 39,489 Average Fare $83.80 $130.23 Local Revenues $2,988,108 $5,142,652

Connecting Passengers 191,012 174,313 Average Revenue Allocation $51.80 $75.43 Prorated Connecting Revenues $9,895,193 $13,148,901

Ancillary Revenues $901,831 $1,280,409

Annual Sector Revenues $13,785,132 $19,571,962

Operating Expenses

Estimated CASM $0.138 $0.101 Sector Cost $5,161.34 $8,302.20 Cost per Block Hour $4,692.13 $5,188.88

Annual Sector Operating Costs $12,753,873 $17,950,685

Projected Operating Profit/(Loss) $1,031,260 $1,621,2 77

Operating Margin 8.1% 9.0%
Load Factor 67.0% 72.2%Proposal Under The Small Community Air Service Deve lopment Program

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### Spirit Airlines – Fort Lauderdale (FLL)

Spirit Airlines service to Fort Lauderdale would re store nonstop service that was previously operated by jetBlue Airways, and provide low-fare c onnectivity to numerous destinations in the Caribbean and Latin America.

SYR-FLL service is projected to be profitable on a steady-state basis, generating an annualized operating margin of 5.2% assuming a single-daily ro tation using A320 aircraft configured for 172
seats. 

# Projected Market Performance
Spirit Airlines @ SYR

Carrier Spirit
Route SYR-FLL

Key Operating Metrics

Sector Length (sm) 1,198 Aircraft Type A320 Seats per Departure 172 Weekly Segments 14 Completion Factor 99.0%
Estimated Block Time 2.4

Operating Revenues

Local Passengers 70,838 Average Fare $101.86 Local Revenues $7,215,250

Connecting Passengers 32,662 Average Revenue Allocation $131.84 Prorated Connecting Revenues $4,306,231

Ancillary Revenues $2,073,867

Annual Sector Revenues $13,595,348

Operating Expenses

Estimated CASM $0.087 Sector Cost $17,926.87 Cost per Block Hour $7,469.53

Annual Sector Operating Costs $12,920,255

Projected Operating Profit/(Loss) $675,093

Operating Margin 5.2%
Load Factor 83.5%Proposal Under The Small Community Air Service Deve lopment Program

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# Program Administration Plan

The City is well aware that the Small Community Air Service Development program has limited funding and, therefore, that the Department must aw ard grant funds where the ability to resolve an identified air service deficiency on a sustainab le level can be achieved. The City believes that it has made such a case in this proposal.

If the Department acts favorably upon this proposal , the City and its community partner are prepared to implement a detailed program ready to a ssure successful use of SCASD grant funds in timely manner and applying the same level of cooperation that resulted in successful application of SCASD funds following award of the g rant in 2004.



### Proposed Use of Grant Funds

The City of Syracuse, Department of Aviation and Ce nterState CEO respectfully request a grant in the amount of $1,000,000 to provide a risk-abate ment fund to be used for the recruitment of a low-fare carrier into the SYR market. The SCASD gra nt funds will be supplemented with $300,000 provided by the City’s community partner, CenterState CEO. Combined, the $1.3 million will be utilized to provide an adequate ris k abatement fund for initiation of low-fare service at Syracuse. The risk abatement funds will be supported by the City with airport fee waivers valued at approximately $750,000 plus an ad ditional $250,000 worth of “in-kind” marketing support provided by other community partn ers, primarily media companies.

In total, the project contemplated in this grant pr oposal will result in funding of approximately $2.3 million available to address the identified ai r service deficiencies at Syracuse Hancock International Airport. The proposed allocation of S CASD and matching community funds is summarized on the following table 

# Proposed Allocation of SCASD & Matching Funds

Syracuse Hancock International Airport

Program Management

Immediately upon grant award, the City in cooperati on with its community partner will immediately initiate discussions with the carriers identified in this proposal regarding the availability of risk abatement and supporting marke ting funds, as well as to reinforce the opportunity in the Syracuse market.

It is the City’s goal that these discussions will t ranslate rapidly with one or more carriers into negotiations of service levels and performance guar antees in exchange for eligibility for risk abatement funds. At a minimum, these discussions wi ll include the following: Source of Funding Risk
Abatement % of

Total Marketing &
Promotion % of

Total Fee Waivers % of
Total TOTAL % of
Total SCASD Grant $1,000,000 76.9% $0 0.0% $0 0.0% $1,000,000 43.5% Matching Community Funds - CenterState CEO $300,000 2 3.1% $0 0.0% $0 0.0% $300,000 13.0% Marketing & Promotion - Community Partners $0 0.0% $25 0,000 100.0% $0 0.0% $250,000 10.9% Fee Waivers - City of Syracuse $0 0.0% $0 0.0% $750,000 1 00.0% $750,000 32.6%
TOTAL $1,300,000 100.0% $250,000 100.0% $750,000 100.0% $2,300, 000 100.0%Proposal Under The Small Community Air Service Deve lopment Program

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• Revenue and operating expense expectations for the new service will be based on the level of service provided (frequencies, equipment, schedule, etc.);

• Fares to be offered are competitive with those at o ther Thruway Corridor Airports, with particular emphasis on Greater Rochester Internatio nal Airport which is the nearest to SYR;

• Schedules timed for maximum connectivity thereby ma ximizing the number of markets impacted by low-fares;

• On-time performance and completion rates will be co nsistent with the carrier averages;

• Credit to SYR of all revenue generated by local pas sengers to the connecting hub;

• A pre-determined percentage of revenues for connect ing passengers beyond the connecting hub credited to SYR according to a indus try-standard practices, such as square root of mileage; and

• The carrier will serve the Syracuse market for the duration of the term that SCASD funds are available, allowing sufficient time for the rou te to achieve stand-alone profitability.

The above negotiations will be used as the framewor k for the City enter into an agreement that includes a formula for calculating SYR segment oper ating expenses, revenue credit, and operational performance standards. Prior to executi ng any agreement, however, the City will provide documents to Department staff for review an d approval.

Finally, it is important to note that the $1.3 mill ion in risk-abatement funding will be based on pre-determined quarterly maximums. The requested fu nding is not a subsidy, but rather a safety net intended for use only if negotiated revenue goa ls are not achieved. In this context, it is possible that the entirety of the SCASD funds reque sted in this proposal may not need to be expended.



### Promotional Support for New Service

To assure that traffic on recruited service builds rapidly, other community partners comprised primarily of media companies (i.e., cable and broad cast television, print, radio, outdoor, advertising agencies, etc.) are provided $250,000 w orth of “in-kind” marketing support. As currently envisioned, this will include:

• A targeted media and direct mail program, aimed at key travel generators in the region

• Mass media, including newspaper and billboard outle ts, to announce the service and to build brand identity in the region

• Cooperative activities as determined by the carrier , focusing on key travel segments.

The overall media and marketing plan will be provid ed to the U.S. Department for approval prior to implementation.Proposal Under The Small Community Air Service Deve lopment Program

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### Project Timeline

While the City and its community partner intend to initiate discussions with carriers immediately following notice of grant award, the variability of the airline industry means that it could take a while to recruit a carrier a negotiate an agreement that both addresses the air service deficiencies at SYR while also providing adequate p rotections of all parties funding. Given this, the City respectfully requests up to 24 months from the date of the grant award to enter into an agreement with a low-fare carrier.



### Project Monitoring

Working closely, the Department of Aviation and Cen terState CEO will monitor traffic levels on new services on a monthly basis, and will be poised to take remedial action should traffic levels fail to meet projections. Such actions include anal yses of fare and competitive data, preparation of targeted marketing efforts, and working with the airline regarding adjustments to scheduling, pricing, or reliability.



### Continuation of Project Activities After The Grant Period

Based on its extensive analyses, the community is c onfident that the high levels of current leakage to ALB, ROC, and BUF can be reversed and th at additional low-fare service can be self-sustaining at Syracuse Hancock International A irport,

Nevertheless, events in the airline industry and/or the national economy outside the direct control of Syracuse community have to potential to result in a longer period for the market to reach maturity with respect to revenues and/or pass engers. In such a case, the Department of Aviation and its community partners are prepared to work with the carrier to address options to support the service beyond the period of the grant. These include additional local incentives, promotional programs, and targeted marketing effort s on key travel generators.

These actions are consistent with the Department of Aviation’s current approach to air service development and retention.Proposal Under The Small Community Air Service Deve lopment Program

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# Appendix BProposal Under The Small Community Air Service Deve lopment Program

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# Letters of SupportProposal Under The Small Community Air Service Deve lopment Program

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