L egal sponsor: City of Sioux City

DUNS: 961522351

Tax ID: 42

- 6005220 Congressional District Code: IA

- 0 5

Contact: John Backer

Interim Airport Director

2403 Aviation Boulevard Sioux City, IA 51111
(712) 279

- 6165 jbacker @sioux

- city.org 

# S IOUX 

# G ATEWAY 

# A IRPORT



# C OLONEL 

# B UD 

# D AY 

# F IELD A PPLICATION UNDER

THE 

# S MALL 

# C OMMUNITY 

# A IR 

# S ERVICE


# D EVELOPMENT


# P R OGRAM

Docket DOT

- OST

- 2012

- 0069Prepared byAPPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD 

# T **ABLE OF** 

# C **ONTENTS**

Application Highlights

................................ .............. 1

New Airline and Destination

................................ ............... 1

Significant Community Involvement an d Support

.............. 2

Far Reaching Benefits to the Community

.......................... 2



### Air Service Environment

................................ .......... 3

Large Catchment Area

................................ ...................... 3

Long Drives to Competing Airports

................................ .... 4

Locally Headquartered Businesses

................................ ... 4

Significant Business Development

................................ .... 4

Substantial Educational and Medical Facilities

.................. 5



### Air Service

– E xisting and Historical

....................... 6

Existing Air Service

................................ ............................ 6

Historical Air Service

................................ ......................... 7

Destinations, Service Providers and Traffic

Levels

................................ ................................ ... 7

Extenuatin g Factors that have Affected Air

Service

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

Past Air Service Development Efforts

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

### Strategic Plan

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

Air Service Needs and Deficiencies

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

Project Goals

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

Public

- Private Partnership

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

Proposed Plan

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

Comprehensive Marketing Campaign

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

Service Monitoring and Strategic An alysis

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

Strategic Plan Funding

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

Previous Grant Recipient

- New Project and Goals

......... 14



### Schedule and Monitoring

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

Appendix A. Airline a nd Community

Support

................................ .............................. 16P AGE 1APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD 

# A **PPLICATION** 

# H **IGHLIGHTS**

his Small Community Air Service

Development Program (SCASDP)

grant application for the Sioux

Gateway Airport/Col. Bud Day

Field meets the criteria of Docket DOT

OST

- 2012

- 0069

. The City of Sioux City,

the air port sponsor, is requesting

$ 1 6 0 ,000 in federal assistance to

implement a $ 240 ,000 air service initiative.

The project goal is to create a marketing

campaign and comprehensive monitoring

program to ensure the success of new

Essential Air Service (EAS) to Chicago

O’Hare International Airport on

American Airlines.



### New Airline and Destination

The Sioux Gateway Airport had service

from Northwest Airlines/ Delta Air Lines for

many years without subsidies ; however

, in

2011

, Delta announced plans to eliminate unsubsidized service at Sioux Gateway Airport. In the fall

of 2011, the US Department of Transportation (DOT) issued a Request for Proposal s for air service

at Sioux Gateway Airport, along with 22 other markets affected by Delt a’s decision. As part of that

process, American Airlines submitted a proposal to provide twice daily , nonstop regional jet service to

Chicago O’Hare International Airport by its regional partner American Eagle

. Access to Chicago has

been a priority for man y years for the Siouxland area, and American service was supported and

selected. American commenced new service at the Sioux Gateway Airport on April 3, 2012. 

# TP AGE 2APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD Because of the change in both airline and destination, it is important for the new service to h ave as much

support as possible for success. With the current economic climate for airlines, especially for American

which entered bankruptcy protection at the end of 2011, there are limited airline funds availa ble for

marketing the S ioux Gateway Airport s ervice

. Historically

, 89 percent of Siouxland travelers found it

(i.e. Minneapolis, Omaha or Sioux Falls) to access adequate necessary to drive to an alternate airport

air service. With a new carrier serving the airport, it is important for Sioux Gateway A irport to do

everything possible to increase the awareness of the new service , increase the retention rates for

passengers using Sioux Gateway Airport and ultimately reduce or eliminate the need for EAS subsidies.



### Significant C ommunity I nvolvement and S upport

The City of Sioux City

, Sioux Gateway Airport/Col. Bud Day Field, the Siouxland Chamber of Commerce,

and The Siouxland Initiative have formed a public

- private partnership in support of this application.

Cooperatively, these organizations have a his tory of successful initiatives with broad support from the

community. To suppo rt this air service initiative, no n

- airport revenue sources will fund 17 percent

This is a strong commitment by the local community to ($ 33

, 000) of the $ 20 0 ,000 cash requirement

. support the new air service and ensure American’s success

.

The public

- private partnership and local businesses have the ability to implement the project. This was

demonstrated in 2007 by the successful effort by the community to entice Frontier Airlines to serve the

market. This cooperative effort was the sole reason behind Frontier entering the market.



### Far Reaching Benefits to the Community

Sioux Gateway Airport serves a region that includes a population exceeding 300,000 in Iowa, Nebraska

and South D akota

. As the region’s center for business, education and medical services, ensuring the

success of the new American Chicago O’Hare service is important to serve the diverse needs of these

sectors as well as those of its citizens. 

### N

**on**

**- airport revenue s**  **ources will fund 17 percent ($33,000) of the $200**  **,000 cash**
**requirement.**P AGE 3APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD 

# A **IR** 

# S **ERVICE** 

# E **NVIRONMENT**

he Siouxland community is large and dynamic. This section demonstrates the community’s

need for additional air service including: a catchment area with a population over 300,000;

inadequate alternative service; vibrant business community; and a region w ith substantial

educational and medical facilities

. Retaining air service and ensuring the success of the new

service on American Airlines will have a significant positive impact on the Siouxland economy

.



### Large Catchment A rea

L ocated on the Iowa, Ne bra ska and South

Dakota border , Sioux Gateway Airport /Col.

Bud Day Field serves portions of all three

states with a catchment area population

exceeding 300,000

. Sioux City, Iowa is the

largest city and the commercial hub of the

six

- city, tri

- state metropolita n region known

as Siouxland. The region consists of

Woodbury County, Iowa; Dakota County

and Dixon County, Nebraska; and Union

County, South Dakota. Exhibit 2 .1 provides

a depiction of t he 10,050 square mile area
served by the Airport. 

# T

E XHIBIT 2 .1 AIRPORT CATCHMENT AREA AND PROXIMITY TO

COMPETING AIRPORTSP AGE 4APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD 

### Long D rives to Co mpeting A irport s

Only 1 1 percent of catchment area passengers use Sioux Gateway Airport; 63 percent use Omaha’s Eppley Airfield

, 18 percent

use Sioux Falls’ Joe Foss Field and eight percent use the Minneapolis/ St

. Paul International Airport

. The Siouxland region is

located approximately 89 miles from Sioux Falls , 97 miles from Omaha , and 27 0 miles from Minneapolis ( Exhibit 2

. 1 , previous

page ). The distance and drive time required to each of these airports is costly for local businesses.



### Locally Headquar tered B usinesses

The strength of the Siouxland air travel market lies in its business

community. By any standard, the local business market is vigorous

and vibrant. Much of this success can be traced back to cooperative

efforts between the various governme nt entities, businesses and

citizens. These efforts have led to business growth, in

- migratio n of

new businesses and a well

- diversified economy. Many different

industries r anging from agriculture to high tech have a stake in the

Siouxland area. Wells Enterp rises Inc. is a multi

- billion dollar

corporation headquartered in Siouxland. Beef Products Incorporated

(BPI), Sioux Honey Association, American Pop Corn, Great West

Casualty and Wilson Trailer are multi

- million dollar organizations that

are also headquart ered in the Siouxland region. Tyson Fresh Meats

and Gelita North America operate large manufacturing facilities in the

area. All of these organizations rely on air service to move staff,

vendors and clients to and from Siouxland

.



### Significant Business D ev elopment

Siouxland continues to attract new business and investment with

recent developments like:

• N ew multi

- million dollar Events Cent er

• R enovated Orpheum Theatre

• Lewis and Clark Interpretive Center

• R iverfront development including a new marina

• D evelo pme nt of Historic Fourth Street 

### National Recognition

• Sioux City Metro

ranked #1 4 for Best

Small Places for

Businesses and

Careers

– Forbes.com (2010)

• Sioux City Metro

ranked in top 15 in

“2011 Best Places

for Businesses and

Careers”

– Forbes (July 2011)

• Sioux City Metro

ranked #8 in nation

in the nation for “Emerging Logistics/

Di stribution Growth

Centers”

– Business

Facilities , Aug 2011

• Sioux City Metro

ranked #4 in the nation in “Top 5 Food Processing Industry Growth”

– Business Facilities

, Aug 2011P AGE 5APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD • N ew downtown theater complex

• $400 million upgrade to Beef Products Inc complex in South Sioux City

• A dditions to St. Luke’s Regional Medical Center/ Mercy Medical Center

• Northeast Nebraska Community College and Wayne State Colle ge are building a joint facility in South Sioux City

• New 55,000 square foot public museum to open downtown Sioux City December 2010

- $13.5 million investment

In addition, over the last few years

, several new companies have begun operations in Siouxland including St ream, Alorica Inc

. , Vizio and GovConnection. T hese four companies alone added over 2,0 00 new jobs to the community. T here has also been an

additional one million square feet of retail development in the Siouxland area. A $400 million upgrade to BPI’s manufacturing

complex was constructed in South Sioux City ;

. In this was the largest single investment project in Nebraska history

addition to the above, Hyperion Energy has optioned 11,000 acres in southern Union County in South Dakota to build a re finery

. The project would create:

• $10 billion capital investment

• 400,000 barrels of oil refining per day

• 1,800 permanent jobs at $20 to $30 per hour and three “spin

- off” jobs

per permanent job; total support jobs will exceed 5,000



### Substantial Educational and Medical Facilities

Siouxland is fortunate to be home to many edu cation and medical institutions

( Table 2 .1 ) that serve both a regional and national customer base and

generate air service demand

.

In short, the partnerships between the business community and government in

Siouxland are strong. T hese partnerships can be leveraged to support air

service at Sioux Gateway Airport to attain similar success of other community

development projects in Siouxland

. TABLE 2 .1 INSTITUTIONS

U NIVERSITIES AND COLLEGES

Briar Cliff University

Morningside College

Tri

- State Graduate Center

Western Iowa Tech Community College

Northeast Nebraska Community College

Design West

– Iowa State University

Wayne State College

MEDICAL INSTITUTIONS

Mer cy Medical Center

St. Luke’s Regional Medical Center

The Center for Neurosciences, Orthopedics, & Spine

Siouxland Surgery Center

June E. Nylen Cancer CenterP AGE 6APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD 

# A **IR** 

# S **ERVICE**



# – **E XISTING AND** 


# H **ISTORICAL**

his section provides a n overview of

existing air service. Carriers

providin g service, service

frequency, direct and connecting

destinations offered, and equipment types

are included in the discussion

. A summary

of historical air service is also included with

destinations, traffic levels, service

providers and an overview of exten uating

factors that have affected air service. A

description of air service development

efforts concludes the section

.



### Existing Air S ervice

In April 2012, the carrier and hub at Sioux Gateway Airport changed. C urrently , the Airport has

nonstop service to Chicago O’Hare International Airport with twice daily service on American Airlines

subsidized by the EAS program

. In June 2012

, American will operate an average of two daily

roundtrips with 50

- seat Embraer ERJ

- 145 aircraft providing 650 weekly available se ats on 13

departures ( Table 3 .1 ).

TABLE 3 .1 EXISTING AIR SERVICE

NONSTOP

DESTINATION MARKETING

CARRIER AIRCRAFT WEEKLY

DEPARTURES WEEKLY

SEATS Chicago O’Hare American Airlines ERJ

- 145 13 650

Source: Diio Mi

, June 201 2 

# TP AGE 7APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD 

### Hi storical Air S ervice

Th is subsection summarizes Sioux Gateway Airport’s air

service history including: destinations, traffic levels and service

providers

. E xtenuating factors that have affected air service

over time are also reviewed

.



### Destinations, Service Providers and Traffic L evels

Over the last 10 years Sioux Gateway Airport ’s air service

declined significantly, a trend which was partially offset in

2007/2008 by Frontier Airlines ’ Denver service but was
stymied by the service cancellation in May 2008

. Exhibit 3 .1

provide s a summary of annual departures and passengers

from 2002 through 2011

. Table 3.2 shows the average

scheduled weekly departures by destination and airline

.

In the past 10 years, Sioux Gateway Airport’s departures decreased 6 3 percent. Average weekly departur es have declined from

approximately 49 weekly departures to only 18 departures in 2011

. Average weekly available seats declined from 2,234 to 883

,

a 60 percent decline. The reduction in departures and a vailable seats and high local fares resulted in onboar d passengers also

declining. From 2000 to 2006

, passengers declined 62 percent. Passengers rebounded somewhat in 2007 and 2008 with the

addition of Frontier’s Denver service and Northwest’s addition of one roundtrip per day to Minneapolis that began in Aug ust

2007. However, in 2009 passengers plunged to 32,791, a 36 percent decrease over 2008. Enplanements made a moderate

improvement in 2011 from 2010 but were still below historical numbers.

TABLE 3.2 HISTORICAL DESTINATIONS AND SERVICE PROVIDERS

DESTINAT ION AIRLINE ITEM AVERAGE SCHEDULED WEEKLY DEPARTURES/SEATS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Denver, CO Frontier Dept 16 17

Seats 1,227 1,258

Minneapolis, MN Delta/Northwest Dept 45 46 47 43 34 32 33 30 20 18

Seats 2,077 1,834 1,807 1,740 1,339 1,241 1,314 1,247 930 883

St. Louis, MO American Dept 15

Seats 628
Average weekly departures 49 46 47 43 34 36 41 30 20 18
Average weekly seats 2,234 1,834 1,807 1,7 40 1,352 1,548 1,838 1,247 930 883

Source: Diio Mi EXHIBIT 3.1 DEPARTURES AND ONBOARD PASSENGERS

Source: Diio Mi 0 12,000 24,000 36,000 48,000 60,000

0 500 1,000 1,500 2,000 2,5002002200320042005200620072008200920102011Onboard PassengersDeparturesP AGE 8APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD 

### Extenuating Factors that have A ffected A ir S ervice

Sioux Gateway Airport’s air service has suffered due to a combination

of factors. In 2011, Delta Air Lines filed to terminate service at Sioux

Gateway Airport , even though traffic levels had been improving.

Through EAS , the Airport was able to obtain service to Chicago

O’Hare. W ith service starting in April 2012 on a new airline and to a

new hub, it is imperative that Sioux Gateway Airport be able to ma rket

this service to ensure success, increase passenger retention rates, and

decrease the reliance upon the EAS subsidies.



### Past Air Service

Development E fforts

Sioux Gateway Airport plays a critical role in

the community’s economic health and quality of

life. Since 1996 and particularly over the past

several years, the City of Sioux City, Siouxland

Chamber of Commerce and The Siouxland

Initiative have worked together on air service

development efforts. These efforts have

included several market studies to determine

retention of local passengers, pro forma

analyses for many major hubs and

presentations to airlines. Table 3. 3 pro vides an

overview of the air servic e development efforts

from 2009 to present

. TABLE 3.3 PAST AIR SERVICE DEVELOPMENT EFFORTS

YEAR INITIATIVE RESULT

2009 Allegiant Air conference Completed

Network conference (met with AA/DL/F9/UA/US/YX) Completed
Passenger Demand Analysis Completed American Airlines' Chicago O'Hare pro forma analysis (positive) Completed

United Airlines’ Chicago O’Hare pro forma analysis (positive) Completed
United Airlines’ Denver pr o forma analysis (positive) Completed
Delta Air Lines' Salt Lake City pro forma analysis (positive) Completed
American Airlines' proposal in Dallas/Ft. Worth Pending
Delta Air Lines' proposal in Atlanta Successful
United Airlines' proposal in Chica go Completed
SCASDP grant application Unsuccessful

2010 Allegiant Air conference Completed
Air service marketing brochure

- update Completed
Network conference (met with AA/F9/UA/MX/AM) Completed
Delta Air Lines' proposal in Atlanta Completed

Un ited Airlines' proposal in Chicago Pending
SCASDP grant application Awarded

2011 Network conference (met with AA/F9/FL/RP/UA ) Completed
American Airlines' proposal in Dallas/Ft. Worth Completed
SkyWest Airlines proposal in St George Completed

Mead & Hunt EAS Conference Completed

American Airlines bid and award of EAS Successful

2012 Mead & Hunt Air Service Development Conference Completed
Network conference (met with AA, F9, G4, RP, UA ) Completed
Jumpstart conference (met with AA/G4) Complet ed 

### Extenuating

Factors

Delta Air L ines’

decision to discontinue service at Sioux City led to public

u ncertainty . N ow with

service to a new hub by a new carrier, public

awareness is critical.P AGE 9APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD 

# S **TRATEGIC** 

# P **LA N** 

he Strategic Plan will achieve the

communit y’s goals and help to

alleviate the air service needs and

deficiencies of Siouxland

. This

section iden tifies the public

- private

partnership and provides a detailed

description of the goals of the project and a

plan for attaining those goals. A detailed

description of the funding necessary for

implementation of the Strategic Plan,

including federal and non

- federal

contributions, is included.



### Air Service Needs and Deficiencies

T he Sioux Gateway Airport had Northwest Airlines/Delta Air Lines service to Minneapolis/St. Paul

International Airport for many years. The change in air carrier from Delta to American Airlines with

service to Chicago O’Hare will present a challenge to the community to not let the already high

diversion levels increase. With service on Delta, the Airport had a diversion rate of 89 percent, which

is ultimately why the air service is now s ubsidized through the EAS program.

Since American started service, they have made an effort to be more involved with the community

through sales and marketing efforts, as well as offering a more consistent fare in relation to the main

diversion airport, Omaha’s Eppley Field. However, the need for the community to closely monitor the

new service, fares and schedules to ensure a successful change is critical, while the comprehensive

marketing plan will help educate the public of the switch in air carrier an d hub destination. 

# TP AGE 10APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD 

### Project G oals

The project goal is to increase the us e of Sioux Gateway Airport by

providing awareness to the community through a comprehensive

marketing campaign accompanied by service monitoring and

strategic analysis of the passenge r traffic to ensure a successful

change of airline and hub.



### Public

- Private P artnership

The City of Sioux City, the owner/sponsor of Sioux Gateway

Airport/Col. Bud Day Field, has been designated as the sponsor of

this grant application. The City of Sioux City has fo rmed a public

- private partnership with The Siouxland Initiative and the Siouxland

Chamber of Commerce

.

All partners will be fully involved in the execution of the Strategic Plan

( Table 4 .1 ). The City of Sioux City will execute federal grant offers,

proce ss reimbursement requests and oversee grant administration.

The Siouxland Initiative and Siouxland Chamber of Commerce will be

responsible for administering the marketing campaign. The local

media partners will assist with the marketing campaign by providi ng in

-

kind match. Together these partners are a formidable team with a track

record of success who are committed to improving air service for the

Siouxland community.



### Proposed Plan

The strategic plan includes two primary elements to ensure the success

of American in the Siouxland market: a comprehensive marketing

campaign and service monitoring and strategic analysis. TABLE 4 .1 PUBLIC

- PRIVATE PARTNER ROLES

PUBLIC

- PRIVATE

PARTNER ROLE City of Sioux City Grant and administration

Siouxland Chamber of

Commerce Assist with local marke ting

efforts

The Siouxland Initiative Coordination of the marketing programP AGE 11APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD 

### Comprehensive Marketing Campaign

The most significant element of the Strategic Plan for Sioux Gateway Airport is a

comprehensive marketing plan that will target residents of the Sioux Gateway Airport

catchment area in order to increase awareness of the new air service provided by

American to Chicago O’Hare. Service failure and continued drive diversion often result

from a lack of awareness o f available air service at the local airport. N ew air service

supported by a well

- designed marketing campaign can increase the level of

passengers, reduce drive diversion, and ultimately reduce or eliminate the need for EAS

subsidies. This aggressive and c omprehensive air service marketing campaign will

ensure long

- term success of American’s service at Sioux Gateway Airport.

Since American announced service plans for Sioux Gateway Airport, they have been

very involved in the community and desire to increa se enplanements. The

comprehensive marketing plan will be developed in tandem with American in order to

maximize the effectiveness of the marketing dollars. American has provided a letter of

support for this grant application ( Appendix A ).

**MARKETING PLAN COMPONENTS** 

The Siouxland Initiative and the Siouxland Chamber of Commerce will be responsible for oversight of the marketing campaign.

The following components will be included in the marketing plan:

• Promotion of American’s Chicago O’Hare service to increa se ridership and decrease diversion to other airports

.

• Continual communication of air service updates and potential issues with stakeholders in the Siouxland area

.

• The target audience is business travelers and mid

- to

- upper income households.

**MEDIA SATURAT ION CAMPAIGN** 

The marketing campaign will include:

• Radio advertising

• Newspaper advertising

• Direct email and mail advertising

• Internet and social media marketing

• Television advertising

• Articles and news releases to local mediaP AGE 12APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD • Siouxland Chamber of Commerce “ Business After Hours” special event

• Direct mail promotional flyer to the Siouxland business community

The Airport has established an extensive partnership agreement with all media outlets. In addition to traditional paid media

advertising, the marketing campaign will use websites and social media. The Siouxland Chamber of Commerce’s website

receives nearly 5,000 visits monthly. The Siouxland Chamber of Commerce blog on the website showcases members and the

Chamber. Unlike other forms of social media, blog s allow the reader to have more information on a subject and allow another

avenue for communication. On the blog, the service will be highlighted and links to other forms of social media such as

Facebook and Twitter will be available. The blog has an avera ge of 1,300 hits monthly.

Social media is becoming a much more prominent and useful tool in marketing. Facebook and Twitter will be used in this

marketing campaign. The goal of the Facebook page is to promote the Siouxland Chamber of Commerce, its members and the

community as a whole. The Siouxland Chamber of Commerce uses Twitter as a means of publicizing and updating followers on

local business and what’s going on at the Chamber. Updates on the service will be posted on Facebook and Twitter.



### Service Mon itoring and Strategic Analysis

American’s service started in April 2012 to Chicago O’Hare . It is critical for the Sioux Gateway Airport to monitor the new service

and provide strategic analysis throughout the EAS contract in order to ensure success of the service. S ervice monitoring will

play an important role throughout the entire SCASDP process enabling the community to more effectively target and market the

service

. The comprehensive service monitoring and strategic analysis will be performed on a monthl y, quarterly and annual

basis and will include many different aspects including, but not limited to:

**MONTHLY**

• Published a ir fares at Sioux Gateway Airport will be monitored and comparisons to the primary diverting airports at

Minneapolis, Omaha and Sioux Fa lls will be performed.

• Enplaned passengers and load factors will be tracked monthly.

• Schedules at Sioux Gateway Airport will be tracked to ensure maximum connectivity to primary markets

, and

coordination with American will be completed if issues are found

.

**QUARTERLY**

• O rigin and destination passenger s and reported airfares will be monitored quarterly. 

### Marketing

Campaign

This $160,000

campaign will be the

backbone of the

Strategic Pl an to

promote the new

airline and hub for

Sioux Gateway Airport.P AGE 13APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD **ANNUALLY**

• A n update to the Passenger Demand Analysis (i.e. retention/diversion study) will be performed a fter one full year of

American Chicago O’Hare service. The update will allow the community to evaluate the first half of the marketing

program and be a key factor in adjusting the second half of the marketing program. This will also enable the community

to see what has changed in destination makeup for the ca tchment area, as well as which markets segments need to be

targeted more specifically for marketing dollars. Because both the airline and hub has changed , it is likely that travel

patterns will change

.

• After the first year of service a meeting with Americ an Airlines’ Network Planning, Sales and Marketing personnel at

their corporate headquarters will be scheduled. The goal of the meeting will be to recap the first year of service,

benchmarking the relative success of the community versus internal targets a t American, and to refine the marketing

plan for the second half of the EAS contract.



### Strategic Plan Funding

The public

- private partnership is requesting US DOT assistance in funding 67 percent, or $160 ,000, of the Strategic Plan.

Specifically, US DOT fun ding will be used to fund a portion of the marketing campaign

. The service monitoring and strategic

analysis will be paid for by the community

. Table 4

. 2 provides the Strategic Plan budget by element and sources of funding.

Non

- airport funding sources will provide 17 percent of the cash requirement and 30 percent of the funding fo r the total program

.

TABLE 4.2 STRATEGIC PLAN BUDGET

DESCRIPTION FUNDING SOURCE

TOTAL US DOT AIRPORT NON

- AIRPORT

CASH CASH IN

KIND CASH IN

KIND Marketing Campaign $16 0,0 00

- - $5,000 $40,000 $205 ,000 Service Monitoring & Strategic Analysis

- $7,000

- $28 ,000

- $35,000

Total $160,000 $7,000

- $33,000 $40,000 $240,000

Percent of total project 67 % 3%

- 14 % 16% 100%

Percent of cash contribution 80 % 3% N/A 17 % N/A 100%P AGE 14APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD 

### Previous Grant Recipient

- New Project and G oals

As a previous grant recipient, this application represents a new project with different goals than the

previous project s

. A lthough Sioux Gateway Airport was awarded a SCASDP grant in 2010, it was unable

t o use the grant due to becoming an EAS subsidized market. It is the hope of Sioux Gateway Airport that

a 2012 grant will help to reduce the EAS subsidies and potentially end reliance upon those subsidies in

the future.

Sioux Gateway Airport received gran ts in 2004 and 2010

. In both cases, the grant goals and plan were for

additional air service at the A irport. The 2004 grant included the following project goals:

• Introduce service by a second carrier to increase use of the airport and pr omote more

competit ive airfares

• Promote greater awareness of the services at Sioux Gateway Airport

• Increase use of services at Sioux Gateway Airport

• Generate a marketing plan to promote lower business fares, stabil ize the existing passenger

base and develop a frequent user p rogram

The US DOT’s portion of the project budget, $609,800, included partial funding of a revenue guarantee,

marketing support, promotional materials for a frequent user program, website development and ground

support equipment and facilities for a new c arrier.

The 2010 grant included the following project goals:

• Provide competitive eastbound air service to adequately serve the Siouxland area

• Reduce fares and mitigate the need to drive to alternate airports by increasing competition

• Introduce Chicago O’ Hare service on Unite d Airlines or American Airlines

The US DOT’s portion of the project budget, $500,000, included partial funding of a revenue guarantee

for new service. The 2010 grant was unable to be used by the Sioux Gateway Airport after becoming a

subsidized EAS commu nity.

Where the previous applications’ goals were for additional service, this year’s application is for marketing

support of new airline service under the EAS program. As demonstrated, this application qualifies as a

new project and m eets the requirements of the SCASDP

.P AGE 15APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD 

# S **CHEDULE AND**  

# M **ONITORING**

he public

- private partnership has developed a

realistic timetable to achieve the goals of this grant

application

. The following milestones are proposed to

track the progress of this air ser vice initiative

. The timeline is

highly dependent on the date of the US DOT’s grant award

and the service start date.

October 1, 2012: M arket Monitoring and

Strategic Analysis

Immediately following the award of the grant, Sioux Gateway

Airport will begin monthly and quarterly monitoring of

American Airlines Chicago O’Hare service

. As outlined on

pages 12 to 13, m onitoring will include airfares, passengers,

load factors, origin and destination markets, and schedule

connectivity at a minimum

. M onitoring is c ritical to ensure a

positive transition of service to American Airlines and to ultimately increase passenger retention and

reduce or eliminate the EAS subsidies required. After the first full year of service, a Passenger

Demand Analysis will be conducted a nd a meeting with American to discuss service performance will

be held. Ma rket monitoring will continue until April 1, 2014.

October 1 , 20 1 2 : Marketing Campaign Development and Initiation

Development of the marketing campaign will be completed im mediatel y following grant award

. The

marketing campaign will begin at the earliest date possible, estimated to be November 1, 2012

. The

marketing campaign will include all facets of promoting the new American Chicago O’Hare service

and will be completed with input from American and stakeholders from the Siouxland area. The

marketing campaign will continue until April 1, 2014, which is when American’s EAS contract expires. 

# TP AGE 16APPLICATIONUNDER THESMALLCOMMUNITYAIRSERVICEDEVELOPMENTPROGRAMSIOUXGATEWAYAIRPORT/COL.BUDDAYFIELD 

# A **PPENDIX** 

# A. **A IRLINE AND**  

# C **OMMUNITY** 

# S **UPPORT**

ppendix A includes letters of support for the City of Sioux City’s application to the US DOT

for a comprehensive advertising campaign to support American Airlines Chicago O’Hare

service

. Support letters were submitted by

, participants in the public

American Airlines

private partnership

, and members o f the Siouxland community. The letters of support are included on

the following pages of this Appendix A and are listed below.



### Airline

American Airlines



### Government

US Senate, Senator Charles E. Grassley

US Senate, Senator E. Benjamin Nelson

US Senate, S enator Mike Johanns

US Senate, Senator Tom Harkin

Congress of the US, Congressman Steve King

Office of the Governor, Lieutenant Governor of

Iowa Kim Reynolds

City of Sioux City, IA , Mayor Robert E. Scott

City of Sergeant Bluff, IA

, Mayor Dale Petersen

City of South Sioux City, IA , Mayor William I.

McLarty



### Public

- private partnership

City of Sioux City, IA (see cover letter)

Siouxland Chamber of Commerce

The Siouxland Initiative 

### Businesses and Organizations

Alorica

American Pop Corn Company

Briar Cliff Uni versity

CF Industries

CW Suter Services

GELITA USA Inc.

Great West Casualty Company

Mercy Medical Center

Midlands Clinic

Missouri Valley Steel Co.

Powell Broadcasting

Sioux Honey Association Cooperative

Siouxland National Bank

Tyson Fresh Meats

Wells Enterpri ses Western Iowa Tech Community College 

# ATOM HARKIN

towA l2o2l 224-3254

Fnx: (202) 224-9369

TTY (202) 2244633 http://ha rkin.senate.gov

COMMITTEES:

AGRICULTURE

APPROPRIATIONS

HEALTH, EDUCATION,
LABOR, AND PENSIONS

SMALL BUSINESS 

# lf,nited 

# Fntss Fsnste

WASHINGTON, DC 20510-1 502



### May 30, 2012



### Ms. Aloha Ley



### Associate Director, Small 

### Community Program

Office 

### of Aviation Analysis

1200 New Jersey 

### Avenue, 

### SE W86-310
Washington, 

### DC 20590



### Subject: Small 

### Community Air Service 

### Development Program

Docket DOT-OST-2012-0059

City 

### of Sioux 

### City, lA 

## - Sioux 

### Gateway 

### Airport

Dear Ms. Ley:

I 

### am 

### writing to offer my 

### support for the air service proposal 

### submitted by 

### the City 

### of Sioux 

### City



### for Small 

### Community Air Service 

### Development Program 

### funding.

ln 

### April 2012, American 

### Airlines became 

### the subsidized Essential 

### Air Service 

### carrier for the Sioux 

### Gateway 

### Airport by 

### initiating service 

### to Chicago 

### O'Hare 

### lnternational 

### Airport. I 

### strongly support EAS

assistance 

### to the Sioux 

### Gateway 

### Airport, which 

### will be a key 

### component in ensuring a successful



### transition 

### to American's service 

### from Sioux 

### City 

### into Chicago 

### O'Hare.

I ask 

### that you give every 

### consideration 

### to the City 

### of Sioux 

### City's Small 

### Community Air Service 

### Development Program 

### grant 

### application. Please 

### direct any 

### questions regarding 

### this matter 

### to my grants



### office in Des 

### Moines. Thank 

### you for this 

### opportunity to express my 

### views and all 

### that you do 

### to assist



### small 

### communities in providing 

### important air services 

### to 

### their businesses 

### and citizens.

Sincerely, 

# Lt+*

Tom Harkin



### United States 

### Senator



### THljnm

I5OFIRSTAVENUE,NE 21OWALNUTSTREET 16O6BRADYSTREET 35OWEST6THSTREET 32O6THSTREET

SUITE 370 733 FEDERAL BUILDING SUITE 323 315 FEDERAL BUILDING 110 FEDERAL BUILDING

CEDAR RAPIDS, IA 52401 DES MOINES, IA 50309 DAVENPORT, IA 52803 DUBUOUE, IA 52001 SIOUX CITY, IA 51101 (319) 36H504 l5't5l 284-4574 (563) 322-1338 (563) 582-2130 17121 252-1550

# SIC l UX 

# CITY

SUCCESSFUL SURPRISING 

# SIOUX CITY

Aloha Ley

Associate Director, Small Community Program

Office of Aviation Analysis

1200 New Jersey Avenue

. SE W86-310

Washington

, DC 20590

Subject: Small Community Air Service Development Program

Docket DOT -OST -2012-0069

City of Sioux City,IA - Sioux Gateway Airport

As the Mayor, I strongly supports the air service proposal detailed in the City of Sioux City ' s Small

Community Air Service Development Program grant application

.

In April 2012, American Airlines became the subsidized Essential Air Service carrier for the Sioux

Gateway Airport by initiating service to Chicago O ' Hare International Airport

. I fully support the need for

Essential Air Service at the Sioux Gateway Airport, and this Small Community Air Service Development

Program grant will be an important support mechanism for the air service to help ensure the successful

transition to American Airlines and service to Chicago O'Hare.

I t is my hope that you will give the City of Sioux City ' s application full consideration and award the funds

requested to ensure the success of American Airlines in the Sioux City market

.



# I!tk

R0 6 ert E

. Scott

Mayor, City of Sioux City

### June 1, 2012

Aloha Ley

Associate Director, Small Community Program

Office of Aviation Analysis

1200 New Jersey Avenue, SE W86-310

Washington, DC 20590

Subject: Small Community Air Service Development Program

Docket DOT-OST-2012-0069

City of Sioux City, IA – Sioux Gateway Airport

Dear Ms. Ley,

Alorica strongly supports the air serv ice proposal detailed in the City of Sioux City’s Small Community Air

Service Development Program grant application.

In April 2012, American Airlines became the subsid ized Essential Air Service carrier for the Sioux

Gateway Airport by initiating service to Chicago O’Ha re International Airport. I fully support the need for

Essential Air Service at the Sioux Gateway Airport, and this Small Community Air Service Development

Program grant will be an important s upport mechanism for the air service to help ensure the successful

transition to American Airlines and service to Chicago O’Hare.

It is my hope that you will give the City of Sioux Ci ty’s application full consideration and award the funds

requested to ensure the success of Americ an Airlines in the Sioux City market.

Sincerely,

Mike Freeman

Director of Operations

Alorica

North Sioux City, SD

# S UTER

C.W. SUTER SERVICES

1800 11TH ST • SIOUX CITY IA 51101 • PH 712-252-3007 • FAX 712-252-2410



### June 1, 2012

Aloha Ley

Associate Director, Small Community Program

Office of Aviation Analysis

1200 New Jersey Avenue, SE W86-310

Washington, DC 20590

Subject: Small Community Air Service Development Program

Docket DOT-OST-2012-0069

City of Sioux City, IA – Sioux Gateway Airport

Dear Ms. Ley,

C W Suter Services strongly supports the air service pr oposal detailed in the City of Sioux City’s Small

Community Air Service Development Program grant application.

In April 2012, American Airlines became the subsidized Essential Air Service carrier for the Sioux

Gateway Airport by initiating service to Chicago O’Hare International Airport. I fully support the need for

Essential Air Service at the Sioux Gateway Airport, and this Small Community Air Service Development

Program grant will be an important support mechanism for the air service to help ensure the successful

transition to American Airlines and service to Chicago O’Hare.

It is my hope that you will give the City of Sioux C ity’s application full consid eration and award the funds

requested to ensure the success of Ameri can Airlines in the Sioux City market.

Sincerely,

E. B. Baker

President

Name

## May 30, 2012

Aloha Ley

Associate Director, Sm all Community Program

Office of Aviation Analysis

1200 New Jersey Avenue, SE W86-310

Washington, DC 20590

Subject: Small Community Air Service Development Program

Docket DOT-OST-2012-0069

City of Sioux City, IA – Sioux Gateway Airport

Dear Ms. Ley,

As President and CEO of Mercy Medical Center , I have the responsibility to ensure that

Siouxland has the best health care possible. A critical part of my role is working to

attract new physicians to our community. Only with reliable and efficient air service is

that possible. Mercy uses the American Ai rlines service to SUX on a frequent basis,

with both our associates traveling elsewher e and brining in potential new physicians to

the community.

As a result, please allow me to convey my strong support for the air service proposal

detailed in the City of Sioux City’s Small Community Air Service Development Program

grant application.

In April 2012, American Airlines became the subsidized Essent ial Air Service carrier for

the Sioux Gateway Airport by initiating service to Chicago O’Hare International Airport. I

fully support the need for Essential Air Servic e at the Sioux Gateway Airport, and this

Small Community Air Service Development Program grant will be an important support

## mechanism for the air service to help ens ure the successful tr ansition to American

Airlines and service to Chicago O’Hare.

It is my hope that you will give the City of Sioux City’s appl ication full consideration and

award the funds requested to ens ure the success of American Ai rlines in the Sioux City

market.

Thank you for your kind consideration

Sincerely,

Bob Peebles, President and CEO Mercy Medical Cent er – Sioux City