Proposal under the Small 

Community Air Service 

Development Program

Docket DOT-OST-2011-0119

8/27/201

0

The Port Authority of New York & New The Port Authority of New York & New 

Jersey

225 Park Avenue 225 Park AvenueSouth 

New York, NY 10003 New York, NY 10003 

Phone: 212-435-7000 

Website:panynj.gov panynj.gov panynj.gov 
SMALL COMMUNITY AIR SERVICE DEVELOPMENT 

PROGRAM DOCKET DOT-OST-2011-0119

SUMMARY

INFORMATION

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

SF424 on http://www.grants.gov.

A. APPLICANT INFORMATION:(CHECK ALL THAT APPLY) 

 ☒ Not a Consortium □ Interstate Consortium□ Intrastate Consortium 

□ Community now receives EAS subsidy

☒ Community (or Consortium member) previously received a Small Community Grant

If previous recipient: Date of grant: 2005 Expiration date of grant: Closed 

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

PUBLIC PRIVATE 

1. The Port Authority of New York & New 

Jersey

1. Central Hudson Energy Group

2. 2. Orange County Industrial Development Agency

3. 3. 

4. 4. 

5. 5. 

c. PROJECT P R O P O S AL : (CHECK ALL THAT APPLY)

☒ 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 (explain below)
4 

D. EXISTING LANDING AIDS AT LOCAL AIRPORT:

☒ Full ILS ☒ Outer/Middle Marker ☒ Published Instrument Approach

☒ Localizer ☒ Other (specify) GPS, VOR. NDB 

E. PROJECT COST: DO NOT ENTER TEXT IN SHADED AREA

LINE DESCRIPTION SUB TOTAL TOTAL AMOUNT 

1 Federal amount requested 450,000

2 State cash financial contribution ---

Local cash financial contribution 

3a Airport cash funds 200,000

3b Non-airport cash funds 175,000

3 Total local cash funds (3a+3b) 375,000

4 TOTAL CASH FUNDING (1+2+3) 825,000

In-Kind contribution 

5a Airport In-Kind contribution**

Terminal Fee Waivers 383,250

5b Other In-Kind contribution** 

 

-------- 

5 

TOTAL IN-KIND CONTRIBUTION 

(7a + 7b) 383,250 

6 TOTAL PROJECT COST (4+8) 1,208,250

F. IN-KIND CONTRIBUTIONS** 

For funds in lines 7a (Airport In-Kind contribution) and 7b (Other In-Kind contribution), 

please describe the source(s) of fund(s) for each. 

Terminal Fee Waivers-Airport-$383,250 

F. IS THIS APPLICATION SUBJECT TO REVIEW BY STATE UNDER EXECUTIVE ORDER 12372 

PROCESS? 

□ a. This application was made available to the State under the Executive Order 12372 
5 

 Process for review on (date) _______________. 

□ b. Program is subject to E.O. 12372, but has not been selected by the State for review. 

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

G. IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT? (IF"YES", P ROVIDE 

EXPLANATION)

☒ No □ Yes (explain) 
6 

Table of Contents

SECTION 1. Existing Air Service 6 

SECTION 2. Synopsis of Community’s Historical Service 8 

SECTION 3. Description of Air Service Development Efforts Over Past 5 Years 9 

SECTION 4. Description of Air Service Needs or Deficiencies 11 

SECTION 5. Strategic Plan for Meeting Air Service Needs under the Small Community 

Air Service Program 11 

SECTION 6. Public – Private Partnership 14 

SECTION 7. Project Funding 15 

SECTION 8. Explanation of Monitoring the Funding 15 

SECTION 9. Grant Project Monitoring 15 

SECTION 10. Project Sustainability 16 

SECTION 11. Legal Sponsor 16 
7 

SECTION 1 – EXISTING AIR SERVICE

Stewart International Airport (SWF) serves an area within a roughly fifty-mile radius of the city of 

Newburgh, NY. The catchment area includes almost all of Orange, Rockland, Putnam, Dutchess and 

Ulster counties in NY plus Pike County, PA and Sussex County, NJ plus most of Sullivan and Wayne 

counties in PA and Passaic County, NJ. The area a little less than one-quarter of Fairfield and 

Litchfield counties in CT and Bergen County, NJ. With small shares of New Haven County, CT, Morris 

County, NJ, Columbia County, NY and Lackawanna County, PA. Access roads throughout the Region 

to the airport are excellent including two interstate highways. Figure 1 illustrates this point. 

Figure 1 – Stewart International Airport Catchment Area 

Stewart International Airport is currently served by Delta, US Airways and JetBlue airlines. Each of 

these airlines provides service to its respective hubs or focus cities. Table 1 provides details for 

each airline. 

SWF

EWR JFK

BDL

LGA

HPN

Congested 

Roadway 

Traffic Area

SWF Catchment 

Area

Interstate 84 & NYS 

Thruway (I-87)

New Interstate (84) 

Connection
8 

Table 1. SWF Airlines and Flights per Week

Non-Stop 

Destination Destination 

Coding Carrier Coding Carrier Operating 

Carrier Carrier 

Equipment 

Type 

Flights per 

Week 

Philadelphia US Airways US Airways 

Express 

Regional Jet 28 

Detroit Delta Delta 

Connection 

Regional Jet 20 

Atlanta Delta Delta 

Connection 

Regional Jet 14 

Orlando JetBlue JetBlue Airbus / RJ 14 

Ft 

Lauderdale 

JetBlue JetBlue Airbus 7 

Total 83 

Most of the service to Stewart International Airport (SWF) is provided by regional jets (83%) with 

the remainder provided by larger jet aircraft. SWF is one of eight primary commercial service 

airports that serve the SWF Service Area. While SWF is the closest airport for passengers in the 

service area, its lack of nonstop service choices and the abundance of service choices available at 

other local airports causes more passengers to use other airports in the area instead of SWF. For 

the 1.0 million domestic passengers in the market area, the preferred airports from the SWF Service 

Area are SWF with 32%, EWR with 26%, JFK with 13% and LGA with 11%. SWF is the airport of 

choice for SWF Area passengers because it is the closest airport for many passengers in the 

catchment area and it had service to popular Florida destinations in the year ended June 2008. Due 

to this, many passengers (68%) that could use SWF originate their flight at a different airport. 

Table 2. Top Destinations for the Stewart Area

SWF has been fortunate that over the course of its 

history many of the major US carriers have 

provided service. However, due to changes in 

business focus and initiatives, airlines such as 

American and United no longer serve the 

community. Additionally, except for seasonal 

Cancun service by Allegiant, no new carriers have 

initiated air service from SWF since Skybus in 

2008. (Skybus ceased operations due to 

bankruptcy.) 

Rank Market Passengers

1 Orlando (MCO) 183,948 

2 Fort Lauderdale (FLL) 76,530 

3 Las Vegas (LAS) 50,129 

4 West Palm Beach (PBI) 46,390 

5 Tampa (TPA) 36,788 

6 Atlanta (ATL) 35,724 

7 Chicago (ORD) 35,607 

8 Los Angeles (LAX) 21,481 

9 San Francisco (SFO) 21,304 

10 San Juan (SJU) 21,171 

Total 529,072
Figure 2 

Figure 3 

As Figure 2 illustrates, the dista

and other airports within th

passenger traffic to flow easily

airports to take advantage of lo

historically exists. 

SECTION 2. SYNOPSIS O

COMMUNITY’S HISTORI

Service levels at SWF have been changing 

dramatically over the past several years with 

the entrance and exit of AirTran and Skybus

the exit of American Eagle;

JetBlue and Delta Connection

with Northwest; and other minor schedule 

changes these carriers and US Airways have 

implemented along the way. Figure 

the decline in air service since

seen, average daily flights have

per day to 12 and the number

decreased 5 to 3. 

8

tance between SWF 

he region allows 

to those alternate 

lower pricing that 

OF 

ICAL SERVICE

Service levels at SWF have been changing 

dramatically over the past several years with 

the entrance and exit of AirTran and Skybus; 

the entrance of 

and their merger 

other minor schedule 

US Airways have 

Figure 3 illustrates 

since 2008. As can be 

ve shrunk from 20 

number of carriers has 
Figure 4- Market Share

Figure 4 illustrates the current market

JetBlue, controls over 43% of the

 

Figure 5. SWF Monthly Enplanemen

SECTION 3. AIR SERVICE D

Over the past four years, the Authority

importantly, retain air service in

adoption, visits with service provider

advertising campaigns, internet survey,

into the airport that would reduce

following summary: 

• O&D passengers peaked in YE 

1Q’08 at 938,540 (1,286 PDEWs)

• During this period, SWF also had 

AirTranAmerican Eagle

market share among carriers at SWF. Note that a

the passenger traffic at SWF. 

nements – 12 Month moving Average

DEVELOPMENT EFFORTS OVER THE PAST

Authority has been proactive in its efforts to attract,

service in the Stewart market. These efforts include: incentive

providers, cost reduction programs, charter

, internet survey, terminal survey and the introduction of share

uld reduce our airline cost per enplaned passenger. Each

938,540

O&D passengers peaked in YE 

1Q’08 at 938,540 (1,286 PDEWs)

During this period, SWF also had 

-ATL/FLL/MCO/PBI/TPA; 

American Eagle-ORD; JetBlue-PBI

9

single carrier, 

AST 4 YEARS

attract, and just as 

ncentive program 

flight programs, 

shared-use systems 

Each is explained in 

394,050
10

Incentive Program – An air service incentive program was adopted by the airport to encourage 

airlines to increase passenger service at Stewart International airport. The program provides a oneyear incentive package to any carrier or charter tour operator providing scheduled non-stop 

passenger service to a new destination from Stewart. Incentives include ground-handling cost 

offsets and marketing support. 

Allegiant has taken advantage of this incentive with the advent of Cancun service from SWF during 

this past winter season. It is this type of ongoing cost reduction that SWF is hoping to implement 

through the shared use passenger processing system. Cost per enplanement will reflect the 

reductions realized through the implementation of the shared use option. It is this ongoing cost 

reduction, along with the removal of potential barriers to entry that SWF believes will lead to 

greater consideration of the Stewart market. 

Communications with Airlines – Contacts with airlines are pursued via a number of avenues. Phone 

calls or emails are the most common, happening continuously, but face-to-face meetings are the 

most effective. These meetings take place during two distinct venues, one on one, or during 

conferences. SWF is very active in this arena, attending conferences sponsored by ACI-NA, AAAE, 

and others convened by industry associations. 

Charter Flights – SWF has been active in pursuing charters to satisfy local demand to markets that 

are currently un-served. As noted above, during this past winter season, SWF initiated a charter 

program aimed at providing weekly flights to Cancun for the winter break period. The program was 

well received by the travel agency community, as the contracted pricing for non-stop SWF-CUNSWF was attractive. 

Advertising Program- Over the past 4 years, SWF allocated approximately $750,000 to implement 

advertising programs aimed at promoting the benefits of using SWF. The campaigns have raised the 

visibility of the airport. Utilizing most areas of media; television, radio, print and web, the message 

is consistent in the need to support SWF. 

Business Travel Surveys – In 2010, the Airport, in partnership with the Orange and Dutchess County 

Chambers of Commerce initiated and internet survey to identify the travel patterns of business 

travelers in the region as well as identifying their existing views and perceptions of Stewart 

International Airport. The information compiled is being used to develop strategic marketing plans 

that will support efforts to overcome some of the perceptions that area travelers have about the 

airport. 

Passenger Surveys –Stewart International Airport staff will be conducting surveys of departing and 

arriving passengers to determine their perceptions of the airport, the decision making process to 

use SWF, their use of airport facilities as well as demographic information. This program is 

scheduled for implementation beginning in August 2011. 
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SECTION 4. DESCRIPTION OF AIR SERVICE NEEDS OR DEFICIENCIES

Reaching out to our users (and non-users) through surveys and engaging in the community has 

assisted us in identifying our air service needs and deficiencies. The best way to explain this is by 

categorizing the needs into needs of market and cost. 

First is to look at the market needs of the Stewart traveler. Of the top demanded markets, SWF 

currently does not offer service to Chicago and the West Coast. Additionally, with more than 43% of 

the traffic at SWF being controlled by JetBlue, and 37% by Delta, competition is needed. 

Second is cost. One of the biggest concerns heard from users and non-users is the need to reduce 

airfares in the market. Statistics bear out these concerns as legitimate. The proximity of other NY 

area airports, with lower average fares makes those alternate airports more attractive. Both 

business and leisure travelers use alternate airports due to this disparity in pricing. In order to 

combat the leakage that is occurring in the SWF market, the Port Authority of NY & NJ (PANYNJ) 

continually pursues air carriers to provide new destinations. 

SECTION 5. STRATEGIC PLAN FOR MEETING AIR SERVICE NEEDS UNDER THE 

SMALL COMMUNITY AIR SERVICE PROGRAM

The Port Authority of NY & NJ plans on using the Grant to implement further the shared use 

platform that has recently been installed in the Terminal; assist existing and entrant carriers in 

establishing new destinations by providing an operating cost offset; and provide marketing support 

toward the establishment of new destination service. This platform can be used by all existing air 

carriers as well as be used as an attractant for potential air carriers that would like to enter the 

market but are reluctant to do so because of barriers to entry. The information within this section 

outlines our case for why this project is needed, an outline for what would take place, and a timeline

for how we intend to accomplish our goal. 

Historically, SWF received a SCASD Grant in 2005 for the marketing of airline service. At the time, 

SWF had lost 34% of its capacity with the loss of Southeast Airlines, which served Ft. Lauderdale, 

Orlando and St. Petersburg in Florida. In seeking to replace this capacity, the Airport held 

numerous meetings with JetBlue Airways. To bolster the Airport’s commitment to JetBlue 

and ensure self- sustaining service, SWF developed a $500,000 marketing plan to promote 

potential new service to Florida or other destinations and enhance overall awareness of the airport 

and its service offerings to the Hudson Valley and Northern New York suburbs. A partnership 

comprising the Airport, Orange County Industrial Development Agency (IDA) and Clear Channel 

Communications offered $200,000 worth of marketing support and $50,000 of exclusive space 

rental waivers for the first 6 months of service. The DOT was asked to help fund the remaining 

$250,000 through this grant program. As a result of these efforts, JetBlue currently serves Ft 

Lauderdale and Orlando, Florida. 

Today, the challenge facing SWF is how to increase passenger and flight activity while reducing the 

cost associated with doing business at SWF. Utilizing commonly structured pricing practices, 

increases the number of passengers and flights, and consequently lowers the cost of per passenger 

handling. Today airports are no longer just lessors, they are active service providers. However, the 

current practice of depending on increased flight and passenger activity to lower per passenger 
12

costs do not take into consideration this fundamental change. Addressing this challenge becomes 

paramount as the economics surrounding this shift dictate radical changes in service levels. The 

airlines’ view of cost is no longer the number of square feet leased but the number of shoes. 

Airlines want to pay for only those items that they themselves use and only for as often as they use 

them. Additionally, they look to serve those airports that reduce barriers to entry and provide 

turnkey opportunities. In a large degree, there is no need for anything other than a runway, security 

and a means to identify who should be onboard. A passenger may need someone to help with a bag, 

otherwise airline personnel costs start with the aircraft door. The ability to provide for such a 

scenario becomes more evident, particularly in light of recent and proposed mergers. 

Understanding these issues has led to the conclusion that SWF should implement access to a shared 

use check-in and passenger processing capability for the airlines, both current and future. The 

implementation of such a system will ultimately lead to measurable cost reductions and facility 

efficiency. Shared use allows for infrastructure flexibility for airline co-location, and cross 

utilization of gates, allowing for expansion when necessary and contraction when needed. Having 

this flexibility will provide the cost savings needed to allow markets such as SWF to be more 

economically feasible, particularly during periods of reduced demand. In addition, having a flexible 

system that allows for increases could offset the need for the physical expansion of an airport, 

thereby significantly reducing future costs. 

Shared-use facilities provide savings to both airports and airline collaborates and allows the airport

operator to use existing space more efficiently, thus increasing airport capacity without necessarily 

constructing new gates, concourses, terminals, or check-in counters. It is anticipated that a grant 

would be used to purchase shared-use terminal equipment and/or shared-use passenger 

processing equipment. 

A shared use system at SWF will allow for the accommodation of an increase in flights, reduce an 

airlines risk during start up, eliminate costs for new construction to accommodate growth, and 

increase flexibility. As envisioned the shared-use system as implemented would provide the 

following to all airlines, both existing and new entrants: 

1. Modular design and flexibility for easy expansion/contraction of the system without 

degradation to the system’s performance. 

2. Allow multiple airlines to share ticket counter positions and departure podiums. This would be 

done by providing stable and secure application access to each airline’s respective host system. 

The shared-use workstation screen and keyboard user interfaces would be functionally 

identical to each airline’s self- deployed proprietary passenger processing system. 

3. Include a resource management system to facilitate flexible allocation and management of 

ticket counters, gates and baggage facilities. 

4. Integrate with the Airport’s existing flight information display system. 

5. Provide a reliable, stable and secure environment for airline operations. 
13

6. Adhere to open standards system architecture. 

7. Use, to the extent possible, commercial off-the-shelf systems and incorporate systems and 

technologies that have been developed and successfully implemented at other airports. 

New Destination Service Offset – The second program supported by this Grant is in regard the 

established incentive program for the Airport. Monies within the context of this program would be 

used to offset the cost to establish new destination service by existing or new entrant carriers. All 

elements of this program are metered pursuant to applicable FAA guidelines. 

Marketing Support – This initiative is designed to support service to new destinations by matching 

advertising dollars to airline service levels. The best way to ensure the success of new service is by

attracting passengers. This program is designed to increase the advertising reach particularly 

critical during the early days of new service start up. 

Phases of Implementation for SWF Shared Use System

Upon acceptance of the grant, the Port Authority would be prepared to begin work on design and 

development. We anticipate a 6-month project completion. Listed below is the implementation plan 

and timetable that the Airport would use. The Airport would break the project into four phases: a 

Planning phase, a Design and Installation phase, an Implementation phase, and finally a PostImplementation Phase. 

Planning Phase 

During this phase, the airport will establish the appropriate benchmarks that will be used to 

measure the success of the project. Probable benchmarks at this point could be – cost per enplaned 

passenger, terminal cost per enplaned passenger, and airline cost per square footage. It is the 

assumption of the Airport that reducing the other benchmarks as listed above would provide the 

impetus for future growth at the airport. 

Design & Installation Phase 

1. The Design and Installation of the shared use platform will be phased as necessary in order to 

minimize any disruption of normal Airport or Airline operations. Upon receipt of the grant, the 

Airport would pursue steps to acquire a system that meets the needs outlined in this proposal. 

Upon selection of the vendor, the contractor will be required to provide a detailed installationphasing plan for acceptance by the Airport prior to performing any work. We anticipate that 

this process would take approximately 90-120 days. 

2. The initial phase of Design and Installation will include the development of the final design and 

installation schedule; the development and finalization of all interface design documents for the 

system; the submittal of equipment and component documents; and coordination workshops or 

meetings with Airport and airline staff. 

3. The next phase of the process will be the installation of the counter, gate and all other shareduse components and connections required. 
14

Implementation Phase 

The Implementation phase would have some overlap with the final phase of Installation and will 

consist of the execution of performance verification testing, endurance testing, training, and final 

project closeout. This would take about 30-days. 

Post-Implementation 

This portion would be ongoing as we contend that the implementation of the shared-use system 

would provide the impetus for further market development. We would continue to monitor and 

track the metrics and performance measures outlined above to determine whether we are meeting 

our goal of reducing airport costs to the airline with the intent of attracting more air service. 

SECTION 6. PUBLIC-PRIVATE PARTNERSHIP

The Port Authority has a leading role within the community - an important partner in this grant. 

Continued involvement with its customers is the main contributor to the overall success of the 

region. 

The Orange County Industrial Development Agency (IDA) promotes economic development 

through a program of incentive - based allocations that assist in the construction, equipping and 

maintenance of specific types of projects and facilities. The IDA works to advance the health, 

prosperity and economic welfare of citizens by retaining and creating jobs and attracting new 

business. The IDA has assisted numerous companies and not-for-profit organizations with new 

business and capital expansions. As a direct result of the assistance provided by the IDA, companies 

have become more competitive by locating or expanding their facilities within Orange County, New 

York. The IDA recognizes the benefit of having an airport in the community that provides access to 

the country’s air service system. 

Central Hudson Energy Group has a long-standing tradition of good corporate citizenship and a 

strong commitment to environmental health and safety. The company and its employees work 

continually to improve the quality of life in the communities where they do business. Their Code of 

Business Conduct and Ethics sets forth the commitment of CH Energy Group to conduct business 

with its customers in accordance with the highest ethical standards and all applicable laws, rules 

and regulations. Central Hudson promotes economic development programs in the region around 

Stewart by offering incentives to businesses that create quality, sustainable jobs. Central Hudson 

supports the Airport in its contribution of creating jobs and economically supporting the 

community. 
15

SECTION 7. PROJECT FUNDING

Listed below are the anticipated project needs and anticipated costs. 

The Airport’s $150,000 cash share is included in the Port Authority’s budget for the Air Service 

Development Incentive Program described in Section 3. 

SECTION 8. EXPLANATION OF MONITORING THE FUNDING

The Airport proposes an initial investment of $450,000 toward the programs discussed in this 

request. To ensure that the anticipated amount goes toward this program the airport will track all 

efforts spent toward the program in a separate system and provide this detailed information with 

the program report. 

SECTION 9. GRANT PROJECT MONITORING

Upon the successful funding of this request, the Port Authority of NY & NJ will be responsible for the

administration of this program. The key milestones on the project come at the following stages: 

1. Development of benchmarks for measurement of progress. Appropriate benchmarks will be 

used to measure the effectiveness of this program. 

2. Planning, Design and Installation of the Shared Use System. The planning, design and 

installation of the shared use system would follow established processes and would measure 

progress using those same metrics and reporting procedures. 

3. New Destination Service Offset - Tracking this program will parallel management of the 

Airport’s air service incentive program described in Section 3. All controls required to 

administer this program will align with FAA required parameters. This element of the Grant is 

not utilized unless a carrier announces new service. 

4. Marketing Support – In line with the above referenced incentive program, this element of the 

grant is also contingent upon a carrier announcing new service. All efforts are tracked 

pursuant to the airport programs requirements, and again, match FAA required parameters. 

Project Initiative Federal Share Airport Share Local Contribution Total

Shared-Use System 300,000 $ 50,000 $ 100,000 $ 450,000 $ 

Airline Operational 

Offset $ 383,250 $ 383,250

New Destination 

Marketing Support $ 150,000 150,000 $ 75,000 $ 375,000 $ 

Total $ 583,250 450,000 $ 175,000 $ 1,208,250 $ 
16

SECTION 10. PROJECT SUSTAINABILITY

The implementation of the shared use platform at SWF will further transition from an atmosphere 

of operational constraints into an environment that provides flexibility and accessibility and 

removes barriers of time and cost. It is this transitional shift that provides the basis for the ongoing 

sustainability of the program, as the project implementation costs will ultimately lead to reduced 

long-term cost. 

Shared-use terminal equipment is not a one-time attempt at gaining additional air service. It is the 

future of the airport-airline interface with the passenger and SWF. It is this attempt to reduce 

airline terminal operating costs that we believe will help to reduce the fare disparity that prevents 

us from retaining more of our passengers. 

The elements of Operating Offsets and Marketing Support provide for a sustainable environment 

for additional flights and enplanements at SWF. We are confident that the project will provide 

benefit to the traveling passenger by reducing operating costs to the airlines and improving 

accessibility. 

SECTION 11. LEGAL SPONSOR

The Port Authority of NY & NJ will be the legal sponsor and administrator of this program. The Port 

Authority of NY and NJ is a municipal corporate instrumentality and political subdivision of the 

States of New York and New Jersey, created by Compact on April 30, 1921, with the consent of the 

Congress of the United States.