Proposal of MidAmerica St. Louis Airport • Mascoutah, Illinois • July 2014 APPLICATION UNDER
SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST

- 2014

- 011 3

SUMMARY INFORMATION

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

NUMBER , INCLUDING +4, EMPLOYEE IDENTIFICAT ION NUMBER (EIN) OR TAX ID

. Legal Sponsor Name: St. Clair County, Illinois Name of Signatory Party for Legal Sponsor: Tim Cantwell, Airport Director
DUNS Number:
07

- 5897371 EIN/Tax ID:
37

- 6001924

B. L IST THE N AME OF THE COMMUNITY OR CONSORTIUM OF COM MUNITIES APPLYING : 1._ S T

. C LAIR C OUNTY , I LLINOIS

_

C. P ROVIDE THE FULL AIRP ORT NAME AND 3

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

PROVIDE CODES FOR THE AIRPOR T ( S ) THAT ARE ACTUALLY SE EKING SERVICE ).
1. MidAmerica St. Louis Airport (BLV)

D OES THE AIRPORT SEEK ING SERVICE HOLD AN AIRPORT OPERATING CE RTIFICATE ISSUED BY THE F EDERAL A VIATION A DMINISTRATION UNDER 14 CFR P ART 139? (I F “ NO ,” PLEASE EXPLAIN WHETH ER THE AIRPORT INTEN DS TO APPLY FOR A CERTIFICATE OR WHETH ER AN APPLICATION UN DER P ART 139 IS PENDING .)

Yes No 

### XProposal of MidAmerica St. Louis Airport • Mascoutah, Illinois • July 2014

D. L IST THE 2

- DIGIT CONGRESSIONAL DISTRICT CODE APPLIC ABLE TO THE SPONSORI NG ORGANIZATION , AND IF A

CONSORTIUM , TO EACH PARTICIPATIN G COMMUNITY

. 1. IL

- 12

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

Not a Consortium Interstate Consortium Intrastate Consortium Community now receives subsidized Essential Air Service Community (or Consortium member) previously received a Small Community Air Service Development Program Grant
If pre vious recipient: Year of grant(s):

F. P UBLIC /P RIVATE P ARTNERSHIPS : (L IST O RGANIZATION NAMES )
PUBLIC PRIVATE
1. MidAmerica St. Louis Airport 1. Leadership Council of Southwestern Illinois
2

. St. Clair County 2. Greater Belleville Chamber of Commerce

G. P ROJECT P ROPOSAL : 1. G RANT G OALS : ( CHECK ALL THAT APPLY )
Launch New Carrier Secure Additional Service Upgrade Aircraft
First Service New Route Service Restoration Regional Service Surface Transportation Professional Services Other (explain below) 

### X

X X
X
XProposal of MidAmerica St. Louis Airport • Mascoutah, Illinois • July 2014

2

. F INANCIAL T OOLS T O B E U SED : ( CHECK ALL THAT APPLY )

Marketing (including Advertising): promotion of the air service to the public
Start

- Up Cost Offset: offsetting expenses to assist an air service provider in setting up a new station and starting new service (for example, ticket counter reconfiguration)
Revenue Guarantee: an agreement with an air service provider setting forth a minimum guaranteed profit margin, a portion of which is eligible for reimbursement by the community
Recruitment of Air Carrier: air service development activities to recruit new air service, including expenses for airport marketers to meet with air service providers to mak e the
case for new air service
Fee Waivers: waiver of airport fees, such as landing fees, to encourage new air service;
counted as in

- kind contributions only Ground Handling Fee: reimbursement of expenses for passenger, cabin, and ramp (below wing) services provided by third party ground handlers
Travel Bank: travel pledges, or deposited monetary funds, from participating parties for the purchase of air travel on an air carrier, with define d procedures for the subsequent

use of the pledges or the de posited funds; counted as in

- kind contributions only
Other (explain below)

H. E XISTING L ANDING A IDS AT L OCAL A IRPORT : Full ILS Outer/Middle Marker Published Instrument Approach
Localizer Other (specify) 

### X
X

X

XProposal of MidAmerica St. Louis Airport • Mascoutah, Illinois • July 2014

I. P ROJECT C OST : D O NOT ENTER TEXT IN SHADED AREA
L INE D ESCRIPTION S UB T OTAL T OTAL A MOUNT
1 Federal amount requested $2 00,000
2 State cash financial contribution $0
Local cash financial contribution
3a Airport cash funds $ 0
3b Non

- airport cash funds $50,000
3 Total local cash funds ( 3a + 3b ) $ 50 ,000
4 TOTAL CASH FUNDING ( 1+2+3 ) $25 0,000
In

- Kind contribution
5a Airport In

- Kind contribution** Various
5b Other In

- Kind contribution** Various
5 TOTAL IN

- KIND CONTRIBUTION ( 5a + 5b ) Various
6 TOTAL PROJECT COST ( 4+5 ) $25 0,000

J. 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) and the value ($) of each. Airport will waive landing fees for additional flights; local media companies will offer discounts on advertising; partner airlines will offer free tickets for giveaways, etc.

K. I S T HIS A PPLICATION S UBJECT T O R EVIEW B Y AN AFFECTED S TATE U NDER E XECUTIVE O RDER 12372 P ROCESS ?

a. This applica tion was made available to the S tate under the Executive Order 12372 Process for review on (date) _____________.
b. Program is subject to E.O. 12372, bu t has not been selected by the S tate for review.

c. Program is not covered by E.O. 123 72.

L. I S T HE LEAD A PPLICANT OR ANY CO - APPLICANTS D ELINQUENT O N A NY F EDERAL D EBT ? (I F “Y ES ”, P ROVIDE
E XPLANATION )
No Yes (explain)

_____________________________________________________________________________________________Proposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 1

TABLE OF CONTENTS

Legal Sponsor 1
Introduction 2
The St. Louis Air Service Market 3
Greater St. Louis Catchment Area 3 Top Origin and Destination Markets 6
Air Service Deficiencies in the St. Louis Area 7 Regional Capacity Reductions 7 Average Regional Fares 8 Airport Use 8 Per Capita Capacity 9 Strategic Plan for Additional Air Service 11 New Target Markets 12 Project Timeline 16 Public/ Private Partnership 17
Conclusion 18



## LEGAL SPONSOR

St. Clair County, Illinois

, sponsor of MidAmerica St. Louis Airport

, is the legal sponsor responsible for administering the proposed air service development program.

St. Clair County, Illinois MidAmerica St. Louis Airport 9656 Air Terminal Drive, Suite 100 Mascoutah, Illinois 62258 Tim Cantwell , Airport Director (877) 643

- 2637 director@flymidamerica.com 

### Section Page NumberProposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 2

INTRODUCTION

MidAmerica St. Louis Airport serves as the low cost alternate for the St. Louis metro area, and an airport catchment area that is home to almost 4.1 million people. While the “metro east”

– the 18 Illinois counties in the greater St. Louis region

– make up 25% of the po pulation of the region, MidAmerica can effectively serve as an alternate airport to Lambert

– St. Louis for the entire two

state area.

Average fares in the St. Louis area are quickly rising

– up 28% in the last five years. Service at Lambert Airport continues to decline. In fact, since the summer of 2013, airlines serving Lambert have cut an average of 5,387 daily departing seats, or 22% of all capacity. This will likely result in even higher fares before the end of
2014.

MidAmerica Airport, meanwhile, has seen Allegiant’s servic e grow load factors and passengers, as Allegiant’s low fare philosophy offers an alternative to the high average fares at
Lambert. In the 12 months end ing March 2014, Allegiant averaged an 83% load factor at MidAmerica on its flights to Orlando/Sanford.

A llegiant’s success on the Orlando/Sanford route proves that MidAmerica can be an effective low fare airport for the St. Louis area. MidAmerica recently met, in person, with Allegiant planners who did discuss the expansion of local service to other points in Florida. Allegiant expressed the need to additional marketing in the St. Louis region before the launch of additional service, as it works to draw more passengers, not only, from the metro east counties,
but also from the Missouri counties in t he catchment area.

The Airport has defined its role as the low cost alternative to Lambert

. In order to recruit additional service, the Ai rport is seeking its first Small Community Air Service Development Grant. It intends to use $200,000 in Grant fundi ng, matched by $50,000 in non

- airport local cash, to offer marketing incentives to carriers launching service to new non

- stop destinations. This service will help replace lost airline seats, provide additional competition in the region, and better serve o ne of the most underserved market s in the Midwest. 

## “ Allegiant’s success on the Orlando/Sanford route proves that
MidAmerica can be an effective low fare airport for the St. Louis area.”Proposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 3

THE ST. LOUIS AIR SERVICE MARKET Current and Historical Air Service

MidAmerica St. Louis Airport, located in the “metro east” of the St. Louis area, is positioned as the low cost, hassle

- free alternate airport for the St. Louis metro area. The Airport is located on Scott Air Force Base, and is a joint use facility shared with St. Clair County. The County operates the
commercial side of the
A irport while the US Air Force operates the
base.

MidAmerica serves the greater St. Louis region,
an area of 55 counties
in both Illinois and Missouri (see map 1).
This region is home to 4.06 million people as of
the latest US Census estimates. The 18
counties on the Illinois
side of the St. Louis
metro area comprise 36% of the St. Louis metro population with 1.1 million people living on the Illinois side of the Mississippi River.

The greater St. Louis area depicted in map 1 generates total personal income of $162.4 billion dollars per year as of the la test US Census estimates (see figure 1). The St. Louis area has an average annual personal income of $39,950. The 

### MAP 1: Greater St. Louis Catchment Area Sour ce: Sixel Consulting Group, 2013 US Census Estimates

FIGURE 1 : Economic Breakdown of “Metro East” Counties Source: Sixel Consulting Group; US Census DataProposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 4

18 Illinois counties comprise 24% of the regional St. Louis economy. Collectively, the 18

- county “metro east” has annual earnings of almost $23.4 billion and total personal income of almost $39.4 billion. The 1.1 million people who live in this region make an average of $34,000 per year per capita, which is slightly lower than the overall greater St. Louis average.

MidAmerica Airport has seen steadily improving loads on its Allegiant Air

- provided service to Orlando/Sanford. Allegiant e ntered the market in November of 2012 with load factors in the low 70s for the first two months of service (see figure 2). Allegiant does take a hiatus in service at MidAmerica in September, which is common in its Florida network. Still, for the 12 month s ended March 2014 Allegiant averaged an 83% load factor at MidAmerica. MidAmerican has seen load factors above 90% in peak months.

Allegiant had previously served MidAmerica Airport from 2005 through the beginning of 2009,
but ended service due to low ancillary revenue and the long length of haul between MidAmerica and Las Vegas

. MidAmerica service does perform better on a shorter stage length
due to the limited fuel burn.

Between 2009 and 2012, market dynamics in the St. Louis area changed appreciabl y, with service at Lambert Airport continuing to decline, making MidAmerica service more attractive. At its peak in 2007 , MidAmerica generated 51,190 annual passengers on Allegiant

, or an average of 70 passengers per day each way (PDEW) (see figure 3 on n ext page)

. Still

, that peak number represented just 0.5% of the total passengers generated in the St. Louis metro area, with the other 99.5% using Lambert Airport. 

### FIGURE 2 : S eats per D ay Each W ay , Flights per Day Each Way, and Load Factor, MidAmerica

– Orlando/Sanford Source: US DOT T100, November 2012

– March 2014Proposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 5

Since the 2007 passenger peak at St. Louis’ two airports with scheduled air service, origin and
destination passengers have dropped by 10% or an average of 1,600 PDEW (see figure 3)

. At the same time, the average one way fare in the region has increased from $167 to $203

– a jump of 22% or an average of $36 each way.

The fare increase in the market is even more pronounced since 2009. In the last five years, the average fare at Lamb ert Airport is up $44 each way, or 28% (see figure 3). Rising fares have clearly had the impact of suppressing the market’s passengers. The greater St. Louis area can generate more passengers than it currently does, but it needs lower fares and more avai lable seats for that to happen.

Lambert Airport is returning to its role as a connecting hub. It is not near the connecting point it was when Trans World Airlines (TWA) operated its major hub , but Lambert’s share of connecting passengers rose to 21% in 2 013, up from just 15% in 2012. As airlines like Cape Air and Air Choice One continue to grow their regional operations at Lambert, connecting passengers from 

### FIGURE 3 : O&D Passengers and Average One Way Fares, at MidAmerica and Lambert Airports Source: US DOT OD1A, Calenda r Year 2004

– Calendar Year 2013Proposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 6

Essential Air Service (EAS) markets to the national air transportation system in St. Louis, the s hare of connecting passengers will continue to grow. This will also begin to fill seats at Lambert that would have otherwise been available to local St. Louis area passengers, further squeezing St. Louis’ airline capacity.

The Illinois side of the larger St. Louis catchment area generates almost 25% of all the region’s passengers. The Airport’s True Market/Leakag e Study shows the Illinois side share by the region’s top 25 origin and
destination markets (see Figure 4 ). The
MidAmerica Illinois

side catchment area generates an even higher proportion of St. Louis’ passengers
to leisure destinations. For example, the
“metro east” generates 31% of
passengers, or 112,201 annual passengers, to Orlando/Sanford; 36% of passengers, or 106,872 annual passengers to Las Vegas; 34% of passengers, or 91,396 annual passengers to Phoenix/Mesa; and 37% of passengers, or 47,523

annu al passengers to Southwest Florida, which includes Ft. Myers and Sarasota.

While MidAmerica is especially well positioned to draw from the St. Louis area’s Illinois counties, it can also draw from the Missouri side of the area. In fact, MidAmerica’s Mis souri retention will grow as Lambert continues to see capacity cuts, and as low fares continue to undercut the pricing of airlines serving Lambert. 

### FIGURE 4 : Top 25 O&D Markets in the St. Louis Area, by Catchment, YE3Q12 Source: Sixel Consulting Group BLV True Market/Leakage StudyProposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 7

AIR SERVICE DEFICIENCIES IN THE ST. LOUIS AREA

Airlines serving the St. Louis area continue to cut capacity. Airline capacity cuts have resulted in steadily increasing fares and continued passenger suppression. Despite the reduction in
available airline seats at Lambert

– St. Louis International Airport passengers who travel to and
from the Illinois c ounties of the catchment area still overwhelmingly use Lambert, since so little service is offered at the cheaper and more convenient MidAmerica St. Louis Airport.

The airlines serving Lambert Airport have continually reduced available seats over the last few years, but the trend became much more pronounced between summer of 2013 and winter of
2014

. Between June of 2013 and January of 2014, Lambert lost an average of 43 daily departures, or 18% of all departing flights (see figure 5).

Similarly, between June of 2013 and January of 2014 airlines cut an average of 5,387 daily departing seats (see figure 5). This capacity cut represents 22% of all capacity offered by the airlines serving Lambert Airport. Despite the capacity cuts, load factors have not improved. This indicates that passengers have declined, and many trips are being suppressed by the lack of available seats and subsequently high fares.

As airlines have cut St. Louis seats, fares have continued to rise. As documented in the previous section of this Grant application, the average St. Louis area fare is up 28% in the last five years

. 

### FIGURE 5 : Seats per Day Each Way, Flights per Day Each Way, and Load Factor, Lambert

– St. Louis Int’l Airport Source: US DOT T100, June 2012

– January 2014Proposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 8 Fare increases made St. Louis one of the most expensive air service markets in the Midwest. In 2013, St. Louis had the fifth highest average
fare of al l non

- Essential Air Service (EAS) markets in Illinois, Indiana, and Missouri (see figure 6). The average St. Louis one way fare was $203, up from $159 five years ago. The four markets that had higher average fares
than St. Louis in 2013 are all much smal ler, with only a fraction of the capacity that airlines
offer at Lambert.

Other large airports, with similar available seats as the St. Louis area, had much lower
fares than St. Louis. For example, in 2013 the average one way fare at Indianapolis was $19 0, which was $13 lower each way than the St. Louis fare, or 6% less (see figure 6). Chicago O’Hare, Chicago Midway, and Kansas City all had significantly lower average fares than St. Louis in 2013, as well. St. Louis’ average fare was 15% higher than the overall region average of $176 each way in 2013.

To better understand i ts market, and the ability of the market to support additional air service, MidAmerica St. Louis Airport commissioned a True Market/Leakage Study in April of 2013. The study pulled actual ticket stock, from the Airline Reporting Corporation (ARC) from the zip
codes in the 18

- county “metro east” area, as defined previously in this application. The ticket data represented t he year ended third quarter 2012

. This was the period before Allegiant reinstated
MidAmerica service. 

### FIG URE 7 : Originating Airport for BLV Catchment Passengers, YE3Q12 Source: Sixel Consulting Group BLV True Market/Leakage Study FIGURE 6 : Average O/W Fare s at Midwest Airports Source: US DOT Database DB1A, Calendar Year 2013Proposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 9 The study shows

the MidAmerica catchment area,
on the Illinois side
of the St. Louis metro area, generates almost
2.4 million annual airline passengers, or an average of 3,264 passengers per d ay each way (PDEW) (see Figure 7 on previous page ). In the study period, an average of 3,146 PDEW used Lambert Airport while another 67 PDEW drove all the way to Indianapolis to
access air service.

Not surprisingly, 96% of MidAmerica Airport catchment area passengers choose to use Lambert St. Louis Airport instead of other airports in the region (see map 2)

. I n rare cases, s mall percentages were found to use Springfield, Peoria, Bloomington/Normal, or Indianapolis, among other airports. Passengers use Lambert Airport despite the fact that its fares tend to be higher than the fares found at other airports in th e

r egion.

MidAmerica Airport ranks as the most underserved airport in
the Midwest

– with less service than even the Essential Air Service (EAS) markets. The average airport i n Miss ouri and
Illinois had 4.3 available airline seats per capita of its metro

area in 2013

. Lambert

– St. Louis International had an average of 6.0 seats per capita of the population of the Missouri counties in the greater St. Louis area (see figure 8). Meanwhile, MidAmerica St. Louis Airport had an average of just 0.029 available airline seats per capita of only the 18

- county Illinois section of the greater St. Louis area. 

### FIGURE 8 : Seats per Capita in Midwest Markets Source: US DOT T100, Calendar Year 2013 MAP 2 : Airport Use for MidAmerica Catchment Area Passengers Source: Sixel Consulting Group BLV True Market/Leakage Study, YE3Q12Proposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 10 MidAmerica had just 15% of the available seats at the next most underserved market in the Midwest, Cape Girardeau. MidAmerica had just one

- half of one percent
of the available seats of Lambert Airport, even after major capacity cuts by the airline s serving Lambert.

At the same time, the lack of available seats at MidAmerica results in the Airport generating far fewer passengers per capita than any other Midwest market. In 2013, the average Midwest market generated 3.4 passengers per capita of it s metro area. MidAmerica Airport, with so few available seats, only generated an average of 0.024 passengers per capita of the 18

- county Illinois side of the St. Louis metro area (see figure 9). Meanwhile, Lambert Airport was able to generate an
average of 4.6 passengers per capita of the Missouri side of the greater region. MidAmerica Airport generated just 24% the passengers per capita of the second lowest ranked airport in 2013, Decatur, Illinois.

Despite these numbers, which make it clear MidAmerica Airport is underserved, the Airport is well positioned to continue to grow its leisure

- oriented traffic base, bringing
much needed fare relief to the wider St. Louis area. MidAmerica’s position in the larger St. Louis region is that of a low fare alternate airport. As airlines continue to cut capacity at Lambert Airport, and as fares at Lambert continue to rise, MidAmerica’s fare relief will become more critical to the region’s overall economy. 

### FIGURE 9 : Pax per Capita in Midwest Markets Source: US DOT T100, Calendar Ye ar 2013Proposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 11

STRATEGIC PLAN FOR ADDITIONAL AIR SERVICE

There are a number of cities in the US where alternate airports have become part of the travel fabric of the region. In the St. Louis metro area, Lambert Airport has been the sole gateway to the region for decades. MidAmerica St. Louis Airport is beginning to create a foothold for itself, as the St. Louis area’s low cost airport. This trend will continue as long as MidAmerica can
conti nue to work with low cost carriers to expand their service.

The Airport’s primary target markets for additional low cost service are in Florida, building off the success of current service between MidAmerica and Orlando/Sanford (see map 3, route in blue). The Airport ’s True Market Study shows the region has a sufficient market to support additional Florida service, with routes to St. Petersburg

– Clearwater, Ft. Lauderdale, and Punta Gorda/Southwest
Fl orida being the prime targets (see map 3,
routes in re d). These markets are just far enough apart in Florida that they can be served simultaneously without poaching prospective passengers from each other. All three routes also have high, and increasing, average fares on current service at Lambert Airport.

In 2013, with its twice

- weekly service on Allegiant, MidAmerica Airport was able to capture 6.3% of all St. Louis area passengers to and from Orlando (including all airports). With similar passenger retention on additional routes to and from Florida, MidA merica can serve as both a convenient and profitable alternate with low cost service. 

### MAP 3: Target Routes for MidAmerica St. Louis Airport Source: MidAmerica St. Louis Airport , July 2014Proposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 12 The MidAmerica Airport catchment area, which
consists of the Illinois side of the larger St. Louis metro area, generates 31% of all current Florida passengers to and fr om the region. In all, the MidAmerica Airport catchment area generates almost 329,000 annual passengers to and from Florida destinations (see f igure 1 0 ), or an average of 450 passengers per day each way (PDEW), while the St. Louis area generates 1,442 PDEW

.

Orlando/Sanford is the larg est origin and destination market in Florida to and from the St. Louis area, which is likely why Allegiant chose it as its first MidAmerica Airport destination (see figure 10) . The next three largest markets are the targeted markets for MidAmerica Airport

– South Florida, through Ft. Lauderdale; Tampa/St. Petersburg; and Southwest Florida, through Punta Gorda. Each market generates at least 178 passengers per day each way (PDEW) , so all are large enough to support new less

- than

daily service without signi ficant passenger
stimulation.

The average fare from the St. Louis area to these Florida markets was $148 each way as of the year ended third quarter 2012 (see f igure 1 1 ). The Orlando/Sanford fare is the lowest, at $133 each way, but the
fare at MidAmeric a is much lower

– averaging just $65 each way in 2013

. Allegiant loses money on its MidAmerica

– Orlando/Sanford fare, but makes money on its ancillary fees. Of the top four markets, South Florida and Southwest Florida support the highest fares

– and als o have the least non

- stop service from Lambert Airport.

Fares between Lambert Airport and Florida markets keep rising. In the case of Orlando, MidAmerica represents the outlet for fare relief. In the last five years the average fare between 

### FIGURE 10 : Top O&D Markets from the St. Louis Area to Florida, YE3Q12 Source: Si xel Consulting Group BLV Study

FIGURE 1 1 : Average One Way Fares in Top Florida Markets, YE3Q12 Source: Sixel Consul ting Group BLV StudyProposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 13

St. Louis an d Orlando has risen by an average of $32 each way, or 29%, to an average of $141 one way (see figure 12). At the same time, passengers using the route have declined slightly, by an average of ten passengers per day each way (PDEW).

The average fare between MidAmerica and Orlando, in the last year, was just 46% the average
fare between Lambert and Orlando. While Allegiant averaged a $65 one way fare between MidAmerica and Sanford, all other carriers at Lambert averaged a one way fare of $141 (see figure 12). This illustrates how MidAmerica can effectively be the low fare airpor t for the region, especially to leisure destinations.

South Florida, which includes Ft. Lauderdale, Miami, and West Palm Beach, ranks as the St. Louis area’s second largest origin and destination market in Florida. It has also seen quickly increasing
air fares and a loss of passengers due to those increasing fares. The St. Louis

– South Florida market peaked in 2006, with an average of 441 passengers per day each way (PDEW) (see figure 13 on next page). At that time, the average one way fare between St. Louis and the South Florida airports was $114.

By the year ended third quarter 2013 the average fare between St. Louis and South Florida had risen to $153 each way, an increase of $39 each way since the peak year of 2006, or 34% higher (see figure 13 on n ext page). These fare increases have resulted in the suppression of passengers in the market, down by an average of 30 PDEW over the last eight years, or 7 %. 

### FIGURE 12 : O&D Pass engers and Average One Way Fares, St. Louis

– Orlando (All Airports) Source: US DOT OD1A, Year Ended Third Quarter 2004

– Year Ended Third Quarter 2013Proposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 14

The Illinois side of the St. Louis area generated almost a third of all demand between St. Louis and South Florida airports. In year ended third quarter 2013, the Illinois counties generated an average of 117 PDEW in the market, or 29% of all passengers (see figure 13).

Similarly, the 18 Illinois counties in the greater St. Louis area generate 30% of demand between St. Louis and Tampa/St. Petersburg (see figure 14). That passenger share represents 83 of the 282 PDEW traveling between St. Louis and Tampa in an average day as of the year ended third quarter 2013.

Passengers between St. Louis and Tampa/St. Petersburg have been flat for the last decade. Rising fares are likely the reason the market has not seen any sustained growth. Since the year
ended t hird quarter 2008 the average fare between St. Louis and Tampa/St. Petersburg has risen from $121 each way to $143 each way

– an increase of 18% (see figure 14)

. 

### FIGURE 13 : O&D Passengers and Average One Way Fares, St. Louis

– South Florida (FLL+MIA+PBI) Source: US DOT OD1A, Year Ended Third Quarter 2004

– Year Ended Third Quarter 2013

FIGURE 14 : O&D Passengers and Average One Way Fares, St. Louis

– Tampa/St. Petersburg Source: US DOT OD1A, Ye ar Ended Third Quarter 2004

– Year Ended Third Quarter 2013Proposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 15

The St. Louis

– Southwest Florida market (served currently through Ft. Myers) is much smaller than either the South Florida or Tampa markets. Moreover, it has been suppressed by 12 % in the last five years, primarily by rising fares. The average one way fare between St. Louis and Ft. Myers is up by $40 each way in the last five years, to an average of $151 each way (see figure 15).

MidAmerica St. Louis Airport’s True Market Study s hows that 34% of all passenger demand between the St. Louis area and Southwest Florida is generated in the 18

- county “metro east” (see figure 15). MidAmerica’s side of the greater St. Louis area generates an average of 65 passengers per day each way (PDEW ).

It is clear that rising fares are suppressing passengers in virtually all St. Louis markets to and from
Florida destinations. Overall, St. Louis

– Florida average fares are up by 25% in the last five years, with passengers down just under 10%. Allegi ant’s low cost service at MidAmerica Airport has the opportunity to re

- stimulate the market, bring average fares down, and provide an alternative to expensive network service at Lambert Airport.

For additional Allegiant service to be successful, MidAmerica Airpor t must break consumer habits. Even p eople in the “metro east” are trained to cross the Mississippi River to access flights at Lambert Airport, regardless of the cost differential. Marketing is paramount to brea king the
habit

– especially in cases where service from MidAmerica is more convenient and cheaper.

MidAmerica Airport is seeking its first federal Small Community Air Service Development Grant in support of additional non

- stop destinations on less

- than

- da ily low cost carriers. The total project cost is $250,000, with $50,000 coming from non

- airport local sources, including the Leadership Council of Southwestern Illinois and the Greater Belleville Chamber of Commerce. The funding 

### FIGURE 15 : O&D Passengers and Average One Way Fares, St. Louis

– Ft. Myers (RSW) Source: US DOT OD1A, Year Ended Third Quarter 2004

– Year Ended Third Quarter 2013Proposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 16

will be used as a marketi ng incentive to a carrier beginning non

- stop service to a market without
current non

- stop service from MidAmerica.

The Airport’s marketing plan for new service would include a wide range of media, based on the success the Airport has seen in building its load factors on Orlando/Sanford service. For Allegiant’s reinstatement of service, the Airport provided a number of marketing efforts, including targe ted web

- based advertising (see f igure 1 6 ). The Airport will continue to build upon the low fare message it has developed, as it works to become the low fare alternate airport for the
St. Louis metro area.

The anticipated timeline for the project assumes a Grant would be
awarded in September of 2014 (see
f igure 1 7 ). If the Grant agreement
with the DOT is finalized in October
of 2014

, during the fall of 2014 and into the spring of 2015 , t he Airport will
work to recruit less

- than

- daily, low cost air service through the
incentives offered under this
program. The Airport has met, in person, with Allegiant Air planners in the last eight weeks to
discuss additional service. As soon as that se rvice is launched, the campaign in support of that
new service will launch. The Airport anticipates closing the Grant by September of 2016 , if not
before. 

### FIGURE 1 7 : Project Timeline Source: MidAmerica St. Louis Airport, July 2014 FIGURE 1 6 : Exampl e of Advertising Content Source: MidAmerica St. Louis AirportProposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 17

PUBLIC/PRIVATE PARTNERSHIP

This application for federal Small Community Air Service Development Grant funding is supported by several community partners who have pledged matching cash. These partners
include the local Chamber of C ommerce, the area economic development authority, an d the county that owns and operates MidAmerica St. Louis Airport

.



### Greater Belleville Chamber of Commerce The Greater Belleville Chamber of Commerce is a membership organization that supports and advances business and community interests, as well as the quality of life in Belleville and surrounding communities. The mission of the Chamber is to identify and se rve the needs of businesses. That means working to increase prosperity by encouraging growth of existing businesses and fostering the establishment of new ones. In addition, it translates to providing representation in government affairs, and working with educational, cultural, c ivic and service organizations. The Chamber has supported each effort to bring scheduled air service to MidAmerica Airport.



### Leadership Council of Southwestern Illinois
The Leadership Council of Southwestern Illinois is the premier organization fostering economic growth in Ma dison and St. Clair counties. It developed the first regional economic development agenda and

, for almost 30 years, the organization has strengthened public/private partnerships throughout Southwestern Illinois to lay the foundation for job growth and retention. The Leadership Council’s membership includes approximately 150 top executives and decision
makers from the five sectors it unite s , providing a level of diversity that makes the organization unique. The Council understands the importance of MidAmerica Airport to the economy of the region and continues to work with the Airport to recruit additional service.



### St. Clair County St. Clair County was one of the guiding forces in developing Scott Air Force Base into a joint use facility

. The County was responsible for developing MidAmerica Airport’s passenger terminal
and other facilities. While Scott Air Force Base pumps $2 billion each year into the region's

economy , the addition of commercial service to the facility is the key to continued growth in the County.Proposal of MidAmerica St. Louis Airport • Mascoutah, I llinois • July 2014 

## 18

CONCLUSION

MidAmerica St. Louis Airport has seen success in its growing role as the low fare alternate airport for the greater St. Louis area. Lambert

– St. Louis International Airport has seen its fares increase quickly as capacity has been slashed in the decade following American Airlines’ p urchase of the assets of Trans World Airlines (TWA)

– Lambert’s main hub airline.

Between June of 2013 and January of 2014, Lambert lost an average of 43 daily departures, or 18% of all departing flights . Similarly during the period airlines cut an average of 5,387 daily departing seats at Lambert

– representing 22% of all capacity. These capacity cuts have

c aused St. Louis fares to rise by 28% in the last five years. In 2013, St. Louis had the fifth highest average fare of all markets in Illinois, Indiana, and
Missouri . St. Louis had the highest average fare of all airports in markets with 500,000 or more r esidents in the
Midwest.

While Lambert Airport hosts a large Southwest Airlines operation, Southwest’s pricing in the market has changed dramatically in the last several years. Lambert does not offer low fares that would be expected at an airport with se rvice from seven airlines. Moreover, Lambert has not seen any major expansion from airlines in several years, much less
low fare carriers.

With an expansion of Allegiant service

, MidAmerica Airport has the potential to be the low cost, low fare gateway to the Gateway to the West. Low cost carriers like Allegiant offer something unique in the region, and provide excellent competition ag ainst the established carriers serving Lambert Airport.

MidAmerica St. Louis Airport seeks a federal Grant of $200,000, matched by $50,000 in non

airport local cash, to offer a marketing program to low cost carriers launching service to new

non

- stop destinations. MidAmerica serves a large metro area, where advertising and marketing costs are much higher than the regional markets where most non

- hub airports are located. This federal funding is the key to spreading the low cost message throughout the St. Louis area

– on both sides of the Mississippi Ri ver. 

## “ With an expansion of Allegiant service MidAmerica Airport has the potential to be the low cost, low fare gatew ay to the Gateway to the West.”