Sponsor: Toledo-Lucas County Port Authority – Toledo Express Airport

Dun & Bradstreet DUNS Number: 051625127

Tax Identification Number: 34-6406986

Congressional District Code: OH-09

Toledo Express Airport

Toledo, Ohio

Proposal Under the Small Community Air Service Development Program

Docket DOT-OST-2011-0119
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

2

TABLE OF CONTENTS

INTRODUCTORY LETTER.......................................................................................................................... 4

SUMMARY INFORMATION (SOLICITATION APPENDIX C)..................................................................... 5

A. Applicant Information.......................................................................................................................................... 5

B. Public/Private Partnership .................................................................................................................................... 5

C. Project Proposal .................................................................................................................................................... 6

D. Existing Landing Aids at Airport .......................................................................................................................... 6

E. Project Cost............................................................................................................................................................. 6

F. In-Kind Contributions** .......................................................................................................................................... 7

G. Is Application Subject to Review by State Under Executive Order 12372 Process?................................ 7

H. Is Applicant Delinquent on any Federal Debt?............................................................................................... 7

EXECUTIVE SUMMARY ........................................................................................................................... 8

AIR SERVICE OVERVIEW ........................................................................................................................ 9

Catchment Area........................................................................................................................................................ 9

Existing Air Service.................................................................................................................................................... 10

Alternative Airports / Leakage Study ................................................................................................................... 11

Historical Air Service................................................................................................................................................. 12

Air Service Development Efforts............................................................................................................................ 14

AIR SERVICE NEEDS AND DEFICIENCIES ............................................................................................. 16

Comparable Communities.................................................................................................................................... 16

Retention Analysis Details....................................................................................................................................... 17
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

3

TABLE OF CONTENTS (continued)

STRATEGIC PLAN.................................................................................................................................. 19

Proposed New Route .............................................................................................................................................. 19

Goals .......................................................................................................................................................................... 19

Target Airline Support .............................................................................................................................................. 20

Toledo-Denver Traffic and Fare History................................................................................................................ 21

Connecting Traffic and Revenue on Frontier via Denver................................................................................ 22

Connecting Traffic and Revenue on United via Denver.................................................................................. 24

Connecting Traffic and Revenue on Southwest via Denver........................................................................... 26

Grant Amendments / Alternative Strategies...................................................................................................... 28

Path to Sustainability ............................................................................................................................................... 28

Previous Grant Award and Return........................................................................................................................ 29

PROJECT IMPLEMENTATION, MONITORING, AND FUNDING ............................................................. 31

Public / Private Partnerships................................................................................................................................... 31

Project Funding......................................................................................................................................................... 32

Implementation Timeline........................................................................................................................................ 33

Success Metrics ........................................................................................................................................................ 34

Legal Sponsor............................................................................................................................................................ 35

Financial Controls..................................................................................................................................................... 35

Use of Local and Department Funds ................................................................................................................... 36

Return on Investment .............................................................................................................................................. 36

APPENDIX: LETTERS OF SUPPORT ........................................................................................................ 37
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

4

INTRODUCTORY LETTER
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

5

SUMMARY INFORMATION (SOLICITATION APPENDIX C)

Small Community Air Service Development Program

Docket DOT-OST-2011-0119

A. Applicant Information

 Not a Consortium Community now receives EAS subsidy

 Interstate Consortium Intrastate Consortium

 Community previously received a Small Community Grant

 If previous recipient, date of Grant: __August 31, 2006________

 expiration date of Grant: __August 29, 2010________

B. Public/Private Partnership

Public:

1. The Toledo-Lucas County Port Authority

2. Lucas County Improvement Corporation

3. The City of Toledo

4. Lucas County

5. The University of Toledo

6. Northwestern Ohio Regional Economic Development Association

Private:

1. Regional Growth Partnership

2. The Toledo Chamber of Commerce

3. Quick Flight Aviation
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

6

C. Project Proposal

 Marketing Upgrade Aircraft New Route

 Travel Bank Service Restoration Subsidy

 Surface Transportation Regional Service Revenue Guarantee

 Launch New Carrier Start-Up Cost Offset First Service

 Study Secure Additional Service Other (Specify)

D. Existing Landing Aids at Airport

 Full ILS Outer/Middle Marker Published Instrument Approach

 Localizer Other:

E. Project Cost

Line Description Sub Total Total 

Amount

1 Federal amount requested $ 750,000

2 State cash financial contribution $ -

Local cash financial contribution

3a Airport cash funds $ 250,000

3b Non-airport cash funds $ 250,000

3 Total local cash funds (3a+3b) $ 500,000

4 TOTAL CASH FUNDING (1+2+3) $ 1,250,000

In-Kind contribution

5a Airport In-Kind contribution** $ 642,025

5b Other In-Kind contribution** $ 235,500

5 TOTAL IN-KIND CONTRIBUTION 

(5a+5b)

$ 877,525

6 TOTAL PROJECT COST (4+6) $ 2,127,525
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

7

F. In-Kind Contributions**

For funds in lines 5a (airport in-kind contribution) and 5b (other in-kind contribution), please describe the 

source(s) of fund(s) for each.

In-Kind Contributions from Toledo-Lucas County Port Authority: $ 642,025

Waived Airport Fees $ 542,025

Value of Marketing/Sales Professional employee provided to air 

carrier $ 100,000

In-Kind Contributions community partners: $ 235,500

Media partners in-kind advertising support $ 235,500

G. Is Application Subject to Review by State Under Executive Order 12372 Process?

 This application was made available to the State on ______.

 Program is subject to review, but has not been selected by the State.

 Program is not covered.

H. Is Applicant Delinquent on any Federal Debt?

 No
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

8

EXECUTIVE SUMMARY

Due to a series of events, Toledo Express Airport has been left with access to only one hub airport via 

service on one network airline. These events, driven by the dramatic changes in the airline industry 

during the past decade, have forced most Toledo-area passengers to use other airports, with Toledo 

Express Airport retaining only 7.6% of passengers in its catchment area in 2009. Despite this background, 

the airport has been able to successfully introduce and maintain focused less-than-daily leisure service. 

With the help of the Department and community partners, we anticipate increasing airline network 

access through initiatives such as this proposal to bring new nonstop service to the region and create 

an economic impact of up to $2.7 million for northwest Ohio.

The Toledo-Lucas County Port Authority is 

requesting a Small Community Air Service 

Development Grant in the amount of $750,000

as part of a $2.1 million effort to increase 

retention of Northwest Ohio passengers at 

Toledo Express Airport (TOL) through the 

introduction of new air service. The Department 

of Transportation’s role would be to support a $1 

million minimum revenue guarantee with a 

$750,000 grant. The remaining $250,000 would 

be financed by the Northwest Ohio Development Fund. Furthermore, the minimum revenue guarantee 

would be supported by over $250,000 of cash marketing support and $877,525 of in-kind services from 

the airport and community. The minimum revenue guarantee would be made available for a two year 

term for service between Toledo and Denver International Airport on Frontier Airlines.

The proposed service would establish new air service from Toledo to the western United States, one of 

the regions least retained at the airport, as well as introduce a new network carrier brand to the airport. 

We estimate the total market size from the Toledo area to Denver to be 77.8 Passengers per Day Each 

Way, and between the Toledo area and the destinations accessible on Frontier Airlines at 665.6

Passenger per Day Each Way. Frontier would only need to increase retention of Toledo area 

passengers at Toledo Express Airport from 7.6% to 11% in order for this service to be successful.
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

9

AIR SERVICE OVERVIEW

Catchment Area

Toledo Express Airport is the primary commercial air service airport serving Northwest Ohio. The ToledoFreemont Combined Statistical Area has a population of 729,662. The population within a one-hour

drive of the airport is approximately 1.1 million and within a two-hour drive is over 6.8 million.

Exhibit 1: Drive Time Map for Toledo Express Airport

Source: Sixel Consulting Group
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

10

Existing Air Service

The existing air service at Toledo Express Airport consists of only one network carrier and leisure-focused 

carriers offering less-than-daily and seasonal flights. American Eagle currently offers three daily regional 

jet flights to the American Airlines hub at Chicago O’Hare International Airport. The airport recently 

concluded negotiations on a minimum revenue guarantee with American Eagle to increase service to 

four daily flights beginning in November 2011. Allegiant and Direct Air offer less-than-daily flights to 

alternative airports in major Florida tourist destinations. The frequency of these services changes 

continuously throughout the year, based on the seasonal patterns of the markets, as determined by the 

carriers.

Exhibit 2: Current Service Map from Toledo

Source: OAG Schedules Data
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

11

Alternative Airports / Leakage Study

In April 2010, the Toledo-Lucas County Port Authority commissioned Sixel Consulting Group to create the 

Passenger Retention Study and True Passenger Market Size Analysis, more commonly referred to as a 

leakage study. The study concluded that Toledo Express Airport was only retaining 7.6% of the 3,091 

passengers originating in the Toledo area in 2009. Over 82% of traffic from the region was carried by 

flights from Detroit/Wayne County International Airport, approximately one hour north of Toledo. The 

current retention rate is likely worse than the reported 7.6% for 2009 as Delta Airlines has subsequently 

discontinued its Toledo-Detroit service which operated during the study period,

Exhibit 3: Leakage of Toledo Area Passengers to Alternative Airports

Source: Sixel Consulting Group 2008 Leakage Analysis

0.8%

7.6%

82.8%

1.6%

3.2%

1.9%
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

12

Historical Air Service

The airport traffic has declined 71% since its last peak in 2003. The traffic reductions have been largely a 

function of decreasing capacity. The capacity reductions have been driven by specific events at the 

air carriers and are not a reflection of the Toledo market. Flights to Atlanta, Cleveland, and Detroit were 

a function of carriers retiring fleets of aircraft, including the only aircraft deemed economically viable 

for services to Toledo for that carrier. Cincinnati and Pittsburgh services were eliminated as part of 

major hub realignments by air carriers. 

Exhibit 4: Capacity and Traffic by Year 2003-2010

Source: US DOT Data, Table DB1A

The network air service situation at Toledo Express Airport is actually worse than the airport-wide 

perspective would have it appear. The Airport has had success in recruiting less-than-daily leisure 

focused carriers, including specialist Allegiant Air in 2005, and public charter company Direct Air in 2009. 

While these services are important to, and well supported by, the community, they mask the true 

decline in network air service available at the airport.

The decline in traffic on network carriers is 82% as network carrier capacity has declined 78% since 2003. 

By 2010, the number of network carriers at the Airport has declined from six to two. The Delta brand, 

which was removed from the Toledo market in late 2008, was reintroduced in January 2010 following 

0

200

400

600

800

1,000

1,200

1,400

2003 2004 2005 2006 2007 2008 2009 2010

1,230

1,148

957

834

695

549

400 352

756 705

569 518

444

326

232 216

Seats per Day Each Way Passengers per Day Each Way
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

13

the carrier’s integration of Northwest Airlines and its long-running Toledo service. The Northwest/Delta 

Detroit service from Toledo ended in October 2010, in favor of service to Delta’s Minneapolis/St. Paul 

hub. On March 31, 2011, Delta Air Lines has removed its Minneapolis service from Toledo and withdrew 

from the airport. This has left American Eagle as the only network carrier at Toledo today.

Exhibit 5: List of Toledo Service Reductions and Extenuating Circumstances

Source: US DOT Data T-100 Data

Destination Carrier End Date Circumstances

Pittsburgh US Airways Express Q3-2004* Hub Reduction/Re-alignment

Chicago (Midway) ATA Connection Q1-2005* Carrier Liquidation

Atlanta Delta Connection 2Q-2008 Equipment Strategy Change

Cincinnati Delta Connection 3Q-2008* Hub Reduction/Re-alignment

Cleveland Continental Connection 3Q-2008* Equipment Strategy Change

Detroit Delta Connection 4Q-2010 Equipment Strategy Change / Merger

Minneapolis/St. Paul Delta Connection 1Q-2011* Equipment Strategy Change

*Note: Indicates the removal of the brand from Toledo, in addition to the end of nonstop service to that city.

Exhibit 6: Capacity and Traffic by Year 2003-2010; Network Carriers

Source: US DOT Data, Table DB1A

0

200

400

600

800

1,000

1,200

1,400

2003 2004 2005 2006 2007 2008 2009 2010

1,230

1,148

949

717

605

464

308 263

755 704

562

426 368

249

147 136

Seats per Day Each Way Passengers per Day Each Way
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

14

As capacity at the airport has decreased, average fares for network carriers have risen dramatically. 

Average one-way fares for network carriers have increased 49% at Toledo since 2003, versus an 

increase of 9% at Detroit over the same period. In 2010, average one-way fares from Toledo, at $210, 

were 23% higher than the next closest regional airport, Cleveland.

Exhibit 7: Average One-Way Fare (excluding Allegiant) in Select Markets

Source: US DOT Data, Table DB1A

Air Service Development Efforts

In order to combat the capacity reductions and leaked passengers, the Toledo-Lucas County Port 

Authority has engaged in an aggressive Air Service Development campaign. The Authority has created 

a comprehensive package of airport incentives to offer air carriers that initiate new service at the 

Airport. The package includes waived airport fees, marketing assistance, and marketing professionals 

to be employed by the Authority.

$141 $140

$153

$179

$174

$196

$193

$210

$120

$130

$140

$150

$160

$170

$180

$190

$200

$210

$220

2003 2004 2005 2006 2007 2008 2009 2010

TOL DTW CLE CMH DAY
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

15

The Authority routinely communicates with air carriers about the incentive package and other data 

relevant to Toledo air service at air service development conferences, headquarters meetings, and 

other events where air carriers are present. Year-to-date, the Authority has held twelve meetings with 

nine air carriers regarding the potential for new air service in Toledo.

Exhibit 8: Toledo Express Airport Air Service Development Meetings with Air Carriers, 2011 Year to Date

Air Carrier Sixel Consulting 

Conference 2011

JumpStart 2011 Airline 

Headquarters

Other Opportunity

Allegiant X

American Eagle X X

Frontier X X

Gulfstream X X

SkyWest X

Southwest X

Sun Country X

US Airways X

Vision X

The Airport has been successful in recruiting less-than-daily leisure service. In 2005, Toledo was able to 

recruit Allegiant Air to the Airport, with service to Orlando-Sanford and Las Vegas. While Allegiant 

decided to end the Las Vegas service, the airport worked with the carrier to add service to St. 

Petersburg/Tampa Bay in 2006. The airport recruited public charter company Direct Air in 2009 to 

provide service to the southwest Florida region through Punta Gorda. 

Due to the end of Delta service at Toledo, the Authority has negotiated a minimum revenue guarantee 

for American Eagle, to support an increase from three to four daily flights. This $200,000 guarantee is 

funded by the Authority’s reserve fund. While the American guarantee is a completely independent 

project, it emphasizes the community’s commitment to maintaining network carrier service.

Finally, Toledo was also the recipient of a prior Small Community Air Service Development grant in 2006, 

which did not result in the desired air service. This is discussed in more detail later in the application.
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

16

AIR SERVICE NEEDS AND DEFICIENCIES

With a retention rate of air traffic of only 7.6% in 2009, it is clear that Toledo is experiencing a 

comprehensive lack of air service. This will be demonstrated by comparing Toledo to other regions with 

a similar profile. We will also demonstrate that Toledo’s largest air service deficiencies are low-fare 

access to the large cities in the western United States and access to large eastern metropolitan areas.

Comparable Communities

When evaluating the strengths and weaknesses of air service in a community, it is important to compare 

the subject community to strong corollaries in terms of both population and air service profile. Two 

communities with similar profiles to Toledo are Lexington, Kentucky, and South Bend, Indiana. All three 

communities share the common trait of being in close proximity to large airline hubs in major cities.

While Toledo is the largest of the three cities with the highest per capita income, it is also the city with 

the least air service and highest fares. Toledo also has the shortest drive-time to the primary airport to 

which it leaks. These factors appear to be the primary drivers of the poor retention rate. Other potential 

factors, such as population and total market size (indicated by Passengers per Capita if fully retained) 

indicate that the markets are comparable, and that Toledo Express Airport fits the profile of an airport 

which should retain at least half of the air traffic generated in its region.

Exhibit 9: Table of Comparable Statistics for Toledo, Lexington, and South Bend

Source: US Census Bureau; US DOT Data, Table DB1A; Sixel Consulting Group

Statistic Toledo Lexington South Bend

Regional Population 729,662 692,392 563,596

Income per Capita $33,098 $33,044 $32,320

2010 O&D Passengers 157,560 1,029,740 595,780

Retention Rate 7.6% 52.6% 50.5%

Primary Airport Leaked To DTW CVG ORD

Airport to Airport Drive time 1:16 1:29 2:06

Passengers per Capita 0.22 1.49 1.06

Passengers per Capita If Fully Retained 2.84 2.83 2.09

Seats per Day Each Way 263 1,939 1,116

Seats per Capita 0.26 2.04 1.45

Average One-Way Fare (excludes Allegiant) $210 $187 $185
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

17

Retention Analysis Details

Among Toledo’s least retained markets are those in the west and northwest regions of the United States 

as defined by the Federal Aviation Administration.

Exhibit 10: Toledo Retention by FAA Region

Source: Sixel Consulting Group

DTW TOL Other TTL

Region PDEW PCT PDEW PCT PDEW PCT PDEW

Southeast 674.8 78.2% 115.8 13.4% 71.4 8.3% 862.9

Great Lakes 238.9 77.1% 31.3 10.1% 39.1 12.6% 310.1

Alaska 7.7 93.0% 0.5 6.3% 0.1 0.7% 8.3

International 181.0 89.7% 11.6 5.8% 8.3 4.1% 201.9

Northeast 72.5 82.9% 4.3 4.9% 9.8 11.2% 87.4

Southwest 284.3 82.1% 16.5 4.8% 44.8 12.9% 346.4

East 325.1 85.3% 17.1 4.5% 37.9 10.0% 380.9

West 384.7 87.3% 18.8 4.3% 36.4 8.3% 440.8

Northwest 148.9 84.6% 7.5 4.2% 18.8 10.7% 175.9

Central 198.0 88.2% 8.9 4.0% 16.7 7.4% 224.5

Total 2,515.9 82.8% 232.3 7.6% 283.3 9.4% 3,091.1
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

18

In addition to being among the least retained regions for Toledo travellers, the West and Northwest

Regions are the location of seven of the twenty-five largest airport-pairs from the Toledo region.

Exhibit 11: Distribution of Air Traffic for Toledo’s Largest Markets in 2009

Source: Sixel Consulting Group

DTW TOL OTHER TOTAL

Rank Airport PDEW PCT PDEW PCT PDEW PCT PDEW

1 STL 109.8 91.8% 3.7 3.1% 6.1 5.1% 119.6

2 MCO 103.4 90.0% 3.7 3.2% 7.7 6.7% 114.9

3 ATL 95.6 84.8% 4.4 3.9% 12.8 11.4% 112.8

4 MSP 84.8 84.7% 5.0 5.0% 10.2 10.2% 100.1

5 TPA 74.2 82.8% 3.0 3.3% 12.4 13.8% 89.5

6 LAX 78.7 89.0% 3.7 4.2% 6.0 6.8% 88.4

7 ORD 60.7 70.1% 19.4 22.4% 6.4 7.4% 86.5

8 DEN 64.6 83.1% 2.8 3.6% 10.3 13.3% 77.8

9 FLL 71.3 92.5% 2.0 2.6% 3.8 4.9% 77.1

10 BWI 61.0 82.5% 2.1 2.8% 10.9 14.7% 74.0

11 PHX 64.3 87.1% 3.2 4.3% 6.3 8.6% 73.8

12 LAS 63.6 91.6% 2.8 4.0% 3.0 4.3% 69.4

13 DFW 48.9 89.3% 2.8 5.1% 3.0 5.5% 54.7

14 LGA 57.5 90.3% 2.7 4.2% 3.5 5.5% 63.7

15 SAN 50.8 88.0% 2.3 4.0% 4.6 8.0% 57.7

16 DCA 44.1 86.6% 2.7 5.3% 4.1 8.1% 50.9

17 SFB 0.0 0.0% 46.1 100.0% 0.0 0.0% 46.1

18 BNA 39.2 87.2% 1.5 3.4% 4.2 9.4% 45.0

19 AUS 38.1 84.9% 1.9 4.3% 4.8 10.8% 44.9

20 BOS 37.9 85.3% 2.3 5.1% 4.3 9.6% 44.5

21 MCI 37.5 86.6% 1.7 3.9% 4.1 9.5% 43.3

22 SFO 36.9 85.6% 2.1 4.9% 4.1 9.5% 43.1

23 SEA 35.1 85.3% 1.9 4.7% 4.1 10.0% 41.2

24 RSW 37.2 91.8% 1.3 3.1% 2.0 5.0% 40.5

25 PIE 0.0 0.0% 39.8 100.0% 0.0 0.0% 39.8
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

19

STRATEGIC PLAN

Proposed New Route

The Toledo-Lucas County Port Authority is proposing a Small Community Air Service Grant to support a 

$1 million minimum revenue guarantee for service to Denver. The proposed service would provide 

Toledo with service to a destination with a large base of traffic and facilitate connections throughout 

the western United States. Additionally, this service would help Toledo Express Airport retain passenger 

traffic to regions with the lowest retention rate. Even without nonstop flights to Denver, the Toledo area 

produces 78 passengers per day each way (PDEW) to Denver, and only retains 2.6% of that traffic at 

Toledo Express Airport.

In addition to the minimum revenue guarantee created through program and local funding, the Toledo 

Express Airport would support the new air service with incentives. Incentives available to the air carrier 

include waived airport fees, marketing assistance, and a Toledo-based sales and marketing professional 

to be employed by the Authority, but work at the discretion of the carrier.

Goals

The Toledo-Lucas County Port Authority has three goals with its Small Community Air Service 

Development proposal for service to Denver:

 Improve access to Denver and other western destinations with the addition of 95 to 140 daily 

nonstop seats from Toledo to Denver

 Improve retention of Toledo area passengers at Toledo Express Airport

 Reverse the decline in O&D passenger traffic at the Airport
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

20

Target Airline Support

Frontier Airlines has expressed interest in operating the proposed service from Toledo to Denver. While 

Frontier cannot commit to operating the service if the Toledo Express Airport receives a Small 

Community Air Service Development grant, the carrier has indicated a minimum revenue guarantee 

would reduce the financial risk associated with new service and could move Toledo-Denver ahead of 

other new service opportunities. A letter of support from Frontier Airlines has been included with this 

application.

Should the Airport be unsuccessful in its attempts to recruit Frontier Airlines to Toledo, United Airlines and 

Southwest Airlines also have large operations in Denver, which would facilitate connections throughout 

the West.
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

21

Toledo-Denver Traffic and Fare History

In 2000, the competitive environment at Toledo shifted and the average fare for Toledo-Denver service 

decreased by 39%, leading to a 177% increase in traffic. While Toledo was unable to retain all of that 

traffic, the traffic levels remained elevated through 2004. When ATA and ATA Connection ceased 

operations in early 2005, fares increased 43% and traffic declined 35%. Traffic declines since 2005 

correspond to reductions in network carrier capacity.

Exhibit 12: Passengers per Day Each Way and Average One-Way Fares for Toledo-Denver by Year

Source: US DOT Data; Table DB1A

Assuming the Toledo region continues produce 77.8 Passengers per Day Each Way as it did in 2009, then 

the retention rate for Toledo Express Airport has dropped to 2.6% in 2010. This would be consistent with 

expectations, given the Year-over-Year declines in network carrier capacity.

10.2 10.3

28.5

18.5

15.5

11.1

14.7

9.6

6.6 5.7

3.9

2.8 2.0

$191

$241

$147 $156 $146 $147

$134

$191

$204

$180

$200

$180 $174

$0

$50

$100

$150

$200

$250

$300

0

5

10

15

20

25

30

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Average One-Way Fare

Passengers per Day Each Way (PDEW)

Passengers per Day Each Way Average One-Way Fare
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

22

Connecting Traffic and Revenue on Frontier via Denver

Service between Toledo and Denver on Frontier Airlines would also create new access to 26 additional 

cities the carrier offers beyond Denver. 

Exhibit 13: Non-Circuitous Markets Frontier Could Serve from Toledo via Denver

Source: Sixel Consulting Group Hub Builder
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

23

While the total market size available to Frontier appears small, when retention of leaked passengers is 

considered, the total potential market size available is 665.6 Passengers per Day Each Way with a 

current retention rate of 3.8%. In order to be successful with one daily flight on a 100-seat aircraft, 

Frontier would only need to increase retention of these markets to approximately 12%, and retention of 

all Toledo markets to 10%.

Exhibit 14: 2010 Daily Passengers and Estimated Toledo Market Size in Potential Frontier Markets

Source: US DOT Data, Table DB1A and Sixel Consulting Group

Airport PDEW from TOL Retention Rate Total Market

DEN 2.0 2.6% 77.8

LAS 4.0 5.8% 69.4

LAX 3.3 3.7% 88.4

PHX 2.5 3.4% 73.8

SFO 2.2 5.1% 43.1

SAN 1.8 3.1% 57.7

SEA 1.5 3.7% 41.2

AUS 1.1 2.5% 44.9

SNA 1.0 5.1% 20.1

TUS 0.9 5.5% 16.6

SAT 0.8 3.2% 25.2

ABQ 0.6 2.0% 32.2

PDX 0.8 4.8% 16.4

SLC 0.7 4.2% 16.1

SMF 0.5 4.3% 12.7

ANC 0.4 6.3% 5.7

GEG 0.2 4.2% 3.6

SBA 0.2 4.3% 3.5

Others 0.8 4.7% 17.3

TOTAL 25.2 3.8% 665.6
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

24

Connecting Traffic and Revenue on United via Denver

Service between Toledo and Denver on United Airlines would also create new access to over 50 

additional cities the carrier offers beyond Denver. 

Exhibit 15: Non-Circuitous Markets United Could Serve from Toledo via Denver

Source: Sixel Consulting Group Hub Builder
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

25

While the total market size available to United appears small, when retention of leaked passengers is 

considered, the total potential market size available is over 750 Passengers per Day Each Way with a 

current retention rate of 3.9%. In order to be successful with two daily flights on 70-seat aircraft, United

would only need to increase retention of these markets to 14% and retention of all Toledo markets to 

11%

Exhibit 16: 2010 Daily Passengers and Estimated Toledo Market Size in Potential United Markets

Source: US DOT Data, Table DB1A and Sixel Consulting Group

Airport PDEW from TOL Retention Rate Total Market

DEN 2.0 2.6% 77.8

LAS 4.0 5.8% 69.4

LAX 3.3 3.7% 88.4

PHX 2.5 3.4% 73.8

SFO 2.2 5.1% 43.1

SAN 1.8 3.1% 57.7

SEA 1.5 3.7% 41.2

SJC 1.2 7.2% 16.0

AUS 1.1 2.5% 44.9

SNA 1.0 5.1% 20.1

TUS 0.9 5.5% 16.6

SAT 0.8 3.2% 25.2

ABQ 0.6 2.0% 32.2

PDX 0.8 4.8% 16.4

SLC 0.7 4.2% 16.1

SMF 0.5 4.3% 12.7

HNL 0.5 4.3% 12.1

ELP 0.5 4.8% 9.4

RAP 0.4 4.0% 8.9

FAT 0.3 4.3% 7.0

PSP 0.3 4.3% 6.7

Others 3.2 4.6% 68.4

TOTAL 30.0 3.9% 764.1
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

26

Connecting Traffic and Revenue on Southwest via Denver

Service between Toledo and Denver on Southwest Airlines would also create new access to 21

additional cities the carrier offers beyond Denver. 

Exhibit 17: Non-Circuitous Markets Southwest Serve from Toledo via Denver

Source: Sixel Consulting Group Hub Builder
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

27

While the total market size available to Southwest appears small, when retention of leaked passengers is 

considered, the total potential market size available is over 650 Passengers per Day Each Way with a 

current retention rate of 3.8%. In order to be successful with one daily flight on a 137-seat aircraft, 

Southwest would only need to increase retention of these markets to 15% and retention of all Toledo 

markets to 11%.

Exhibit 18: 2010 Daily Passengers and Estimated Toledo Market Size in Potential Southwest Markets

Source: US DOT Data, Table DB1A and Sixel Consulting Group

Airport PDEW from TOL Retention Rate Total Market

DEN 2.0 2.6% 77.8

LAS 4.0 5.8% 69.4

LAX 3.3 3.7% 88.4

PHX 2.5 3.4% 73.8

SFO 2.2 5.1% 43.1

SAN 1.8 3.1% 57.7

SEA 1.5 3.7% 41.2

SJC 1.2 7.2% 16.0

AUS 1.1 2.5% 44.9

SNA 1.0 5.1% 20.1

TUS 0.9 5.5% 16.6

SAT 0.8 3.2% 25.2

ABQ 0.6 2.0% 32.2

PDX 0.8 4.8% 16.4

SLC 0.7 4.2% 16.1

SMF 0.5 4.3% 12.7

Others 0.7 4.3% 15.2

TOTAL 25.6 3.8% 666.8

While at this time, Southwest Airlines entering smaller markets like Toledo seems unlikely, one of the 

stated goals of the carrier in its merger with AirTran is to learn new ways to be successful in smaller 

markets. One implication of that is that Southwest may be more willing to consider smaller markets such 

as Toledo than it has been in the recent past.
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

28

Grant Amendments / Alternative Strategies

The primary air service development goal of the Toledo-Lucas County Port Authority is for the Toledo 

Express Airport to retain a greater portion of the air traffic generated in its catchment area. This 

application seeks to increase retention in some of Toledo’s largest markets with the smallest retention 

rates. The Authority believes the success of this service, as well as recently announced additional 

American Eagle service, will serve as the springboard for additional service restoration and improved

retention rates at the Airport.

In the event the Department grants Toledo an award to for service to Denver, but the community is 

unsuccessful in its efforts to recruit Frontier Airlines to operate the service, the Authority would then 

approach other carriers to service the route. The most likely would be United Airlines and Southwest 

Airlines, as they also have major connecting operations in Denver which support access to the western 

United States. If all attempts to secure Denver service are not successful, the Authority may request the 

Department consider redirecting award funding to assist in recruiting service to other hub airports which 

would also service regions with large traffic bases and low retention rates from the Airport. These hubs 

would include Charlotte on US Airways, Dallas/Fort Worth on American Airlines, Houston on United, 

Philadelphia on US Airways, and Washington-Dulles on United.

Path to Sustainability

The Authority agrees with the Department that the air service developed must be sustainable without 

assistance in the long term. The Authority’s application seeks to mitigate the air carrier’s risk during the 

start-up period of the new service. It is anticipated that at the end of the two-year minimum revenue 

guarantee program, the flight service will be economically viable. While the revenue guarantee would 

expire at the end of two years, the Authority would continue to provide the Toledo-focused sales and 

marketing professional to ensure continued success of the new air service.
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

29

Previous Grant Award and Return

On August 31, 2006, the Toledo Express Airport was awarded a Small Community Air Service 

Development Grant to support a minimum revenue guarantee for JetBlue Airways or other service to 

the New York City region. The Authority had over twenty-five meetings with air carriers regarding New 

York service between 2006 and 2010. The Authority recruited a new entrant carrier, Air Azul / Jet 

America to fly between Toledo and Newark-Liberty International Airport in 2009. Despite selling tickets 

to passengers, Jet America never began any operations, including the Toledo-New York route. The

grant funds were returned to the Department on August 30, 2010. 

At the time of the 2006 grant application, the trend towards capacity reductions was established. Even 

so, Toledo Express Airport enjoyed access to five hub airports within four airline systems. The airport had 

also successfully recruited Allegiant Air to operate nonstop flights to targeted leisure destinations. During 

the subsequent years, there were several changes in the airline industry beyond the control of the 

Authority which contributed to its inability to successfully utilize the grant.

We discussed earlier in this application the airlines’ changing aircraft utilization, fleet, and hub strategies, 

and their impact on Toledo’s deteriorating capacity. In fact, Toledo’s average daily seat capacity 

declined 57% between 2006 and 2010. These same influences impacted any attempt to increase 

service at Toledo during this period, including the utilization of the grant awarded in 2006. Particularly,

JetBlue announced in December 2006 a plan to defer deliveries of the 100-seat EMBRAER E-190, 

deemed critical to success on the Toledo-New York route in the 2006 application. This was followed by 

additional announcements of fleet changes in May 2008 and June 2011. The most recent 

announcement included the information that JetBlue ultimately plans to operate a smaller fleet of E190’s and a larger fleet of higher-capacity Airbus aircraft. These events significantly altered Toledo’s 

opportunities in the JetBlue network.

Additionally, the Authority could not predict the outcome of New York airspace reform to include 

massive new slot administration programs. Announced by Department Secretary Peters in late 2007 

and implemented in early 2008, the slot programs capped hourly airport activity at John F. Kennedy 

International Airport and Newark Liberty International Airport and issued slots, or operating authorities,

by time and airport, to the carriers. With slot restrictions already in place at LaGuardia Airport, all three 
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

30

airports became instantly constrained, from an economic perspective. While runway constraints are 

considered by carriers, a formal slot program has the impact of increasing “opportunity cost”, as carriers 

must then decide the best use for each individual slot with no ability to entertain increased capacity

through other means, such as operational or scheduling changes. This worked against the 2006 Toledo 

grant.

Other restraints from utilizing the 2006 grant were a lack of air carrier support and lack of alternative 

options. While the target of the 2006 grant was clearly defined as JetBlue service to the New York/New 

Jersey metropolitan area, JetBlue (or any other air carrier) declined to formally support the service, even 

with a non-committal letter. Also, the lack of a clearly defined alternative plan in the 2006 grant 

application left the Department and Authority with no ability to change the plan when some of the 

other issues became apparent.

We believe all of the issues outlined above are addressed in this application, and will not inhibit the 

Authority from making use of any grant funding that may be awarded related to this application. 

Specifically,

 This application includes specific and considered alternative plans should they become 

necessary.

 This application includes a letter of support from Frontier Airlines, the primary air carrier target.

 Denver International Airport, nor any of the alternative plan airports, have or are anticipated to 

have any type of airport capacity restraints now or in the future. All are well functioning hub 

airports which have been designed with capacity additions in mind.

 Frontier Airlines, as well as the alternative carriers mentioned, have a wider range of aircraft 

types, utilization, and hub strategies, which should enable the Authority maximum flexibility when 

recruiting the air carrier.
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

31

PROJECT IMPLEMENTATION, MONITORING, AND FUNDING

Public / Private Partnerships

The Public / Private partnerships supporting this grant application include:

 The Toledo-Lucas County Port Authority and Toledo Express Airport – the Authority is the legal 

sponsor of the application and manages the airport on behalf of the City of Toledo.

 Lucas County Improvement Corporation – The LCIC is a private, non-profit organization founded 

in 1964. The LCIC and its member agencies provide economic development assistance for 

Lucas County.

 Regional Growth Partnership – The Regional Growth Partnership is a private-sector driven and 

funded economic development company, focused to meet the needs of clients in a 

confidential, innovative, and time-sensitive fashion.

 The Toledo Chamber of Commerce – The Chamber is an active supporter of the Airport.

 The City of Toledo – The City is an active supporter of the Airport.

 Lucas County – The County is an active supporter of the Airport.

 The University of Toledo – The University, the largest in northwest Ohio, recognizes the critical 

need for good and affordable air service that supports the ability of the University to recruit and 

retain staff and students.

 Northwestern Ohio Regional Economic Development Association – NORED is an association of 

twelve counties in Northwest Ohio which has been assisting business growth in Northwest Ohio 

since 1988. Its large board membership includes private and public sector representatives with a 

stake in the economy of northwest Ohio. The association has been very effective in developing 

a unified voice among its members and impacting decisions at the state capitol and in 

Washington, D.C.

 Quick Flight Aviation – Quick Flight provides airline ground handling services at airports 

nationwide, including at Toledo Express Airport.
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

32

Project Funding

The community is seeking a Small Community Air Service Development grant in the amount of $750,000 

in order to support a $1 million minimum revenue guarantee. The remaining $250,000 is proposed to be 

supported by the Northwest Ohio Development Fund, financed by members of the Lucas County 

Improvement Corporation (LCIC). The LCIC, a private, non-profit organization, was founded in 1964 to 

encourage and promote the economic and civic development of the Toledo area. It is anticipated 

that the minimum revenue guarantee will be provided to the air carrier for a term of two years from the 

start of service.

In addition to the minimum revenue guarantee, the airport will provide $250,000 in cash marketing 

support to the carrier. It carrier will also receive $877,025 worth of in-kind support, including waived

airport fees, a sales and marketing professional at no cost, and additional marketing support from 

media outlets in our community.

Exhibit 19: Summary of Sources, Type, and Uses of Funding

Funding Use Minimum Revenue 

Guarantee

Marketing 

Support

Marketing 

Support

Airport Fee 

Waivers

Total

Funding Type Cash Cash In-Kind In-Kind Combination

Department of 

Transportation

$750,000 $750,000

Northwest Ohio 

Development Fund

$250,000 $250,000

Toledo-Lucas County Port 

Authority and Toledo 

Express Airport

$250,000 $642,025 $892,025

Various Media Partners $235,500 $235,500

Total 1,000,000 $250,500 $235,500 $642,025 2,127,525
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

33

Implementation Timeline

The proposed implementation timeline for the project assumes the Department will award Small 

Community Air Service Development grant funding in September 2011. Once the award is announced, 

the Airport and the Authority will begin discussions with Frontier Airlines to begin service between Toledo 

and Denver. Based on airline planning lead times, the need for advanced bookings, and the ideal 

seasonality for service start, we would anticipate flights would begin in May 2012.

The first two milestones on the Airport’s timeline are to execute the agreement with the Department and 

to negotiate the minimum revenue guarantee details with Frontier Airlines. Once the new service is 

announced and schedule and fares made public in reservations systems and on-line booking engines, 

the Airport and the carrier will begin marketing the service and monitoring advanced bookings. The 

marketing program can and will be adjusted through the life cycle of the program, based on 

advanced bookings and carrier feedback. The Airport will submit quarterly grant status reports to the 

Department through the two-year term of the agreement.

Exhibit 20: Proposed Project Timeline

Activity/Milestone Conservative Schedule

SCASD Grant Award Announcement September 2011

Execute Grant Agreement with DOT November 2011

Negotiate Minimum Revenue Guarantee with Airline November 2011 – January 2012

Announce Service/Publish Schedule January 2012

Market Service/Monitor Advance Bookings January 2012 – May 2014

Launch Service May 2012

Operate Service with MRG May 2012 – May 2014

Submit Grant Status Reports to DOT Quarterly Q2 2012 – Q2 2014
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

34

Success Metrics

Success will be based on achieving the objectives of the program. The Airport will work with the carrier 

to continuously monitor advanced bookings and other financial metrics of the service. With a joint 

understanding of the market conditions, the airport and air carrier can work to adjust marketing 

programs and other factors to ensure success of the project.

Exhibit 21: Project Goals and Success Metrics

Project Goal Success Metric

 Improve access to Denver and other 

western destinations with the addition of 95 

to 140 daily nonstop seats from Toledo to 

Denver

 Market Size growth in the Toledo-Denver 

and largest beyond markets in the western 

United States

 Improve retention of Toledo-area 

passengers at Toledo Express Airport

 Increased retention of Toledo-area 

passengers in targeted markets

 Reverse the decline in O&D passenger 

traffic at the Airport

 Increased O&D traffic measured quarterly 

on a Year-over-Year basis

Once service begins, the Airport will rely upon traffic and revenue data provided directly by the airline 

and the amount of reimbursements requested by the airline as indications of project success. 

Department data, including Tables T-100 and DB1B, will be analyzed quarterly to compare year-overyear market size growth. The Airport will conduct a leakage analysis after at least one year of service in 

order to ensure that the retention goal is being met. The Airport will report its success metrics in quarterly 

grant status reports to the Department.
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

35

Legal Sponsor

The legal sponsor of this project is the Toledo-Lucas County Port Authority. Toledo Express Airport is 

owned by the City of Toledo, but operated (at a loss) by the Authority under a long-term management 

agreement. The Authority is a government agency with the ability to levy property taxes, however it 

currently derives over 90% of its revenues through user fees.

Toledo-Lucas County Port Authority

11013 Airport Highway

Toledo, Ohio 43558

Paul L. Toth

Chief Executive Officer and Airports Director

(419) 865-2351

www.toledoportauthority.org

Financial Controls

As the sponsor, the Toledo-Lucas County Port Authority will be responsible for all fiscal matters related to 

the grant, as well as the Department’s reporting requirements. The Department can be assured that 

adequate financial controls are in place at the Authority to guarantee that any grant awarded is used 

in accordance with the program as administered by the Department. The Toledo-Lucas County Port 

Authority understands that the Small Community Air Service development program grants are 

reimbursable, meaning the Authority is responsible for program expenditures and will submit invoices to 

the Department for reimbursement for the portion of the minimum revenue guarantee funded by the 

Department.
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

36

Use of Local and Department Funds

The Port Authority and designated legal sponsor will ensure that both Department and local funds 

associated with this project are expended in a manner consistent with the Grant intention and the 

contract between the Department and the Airport. This is a Grant for a minimum revenue guarantee

with a clear target market and established methods that will be utilized with Grand funds.

Return on Investment

Toledo’s true catchment area demand for travellers to destinations it serves in the western United States 

is estimated at 433,000 annual O&D passenger trips. For Frontier to be successful and increase retention 

to approximately 15% from the western United States, that would require an increase in annual traffic by 

almost 55,000 passengers, or just 10% of the Toledo-area market share. 

A study in 2004 indicated that each Airport passenger has a value of $50 to the airport and local 

economy in direct, indirect and induced economic impact. Thus, the impact of Frontier Airlines service 

to the Toledo region could be as high as $2.7 million. 
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

37

APPENDIX: LETTERS OF SUPPORT
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

38
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

39
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

40
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

41
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

42
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

43
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

44
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

45
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

46
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

47
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

48
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

49
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

50
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

51
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

52
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

53
 

 

Toledo Express Airport

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

54