Application Under The 

Small Community Air Service 

Development Grant Program 

DOCKET OST-2010-0124 

DUNS #169182466 

Congressional District # ME 02 
Small Community Air Service Development Grant 2 

____________________________________________________________________________ 

_____________________________________________________________________ 

Bangor International Airport

Table of Contents 

EXECUTIVE SUMMARY ........................................................................................................... 3

THE AIR SERVICE DEFICIENCY .............................................................................................. 5

A GRANT WILL ASSIST IN ADDRESSING THESE DEFICIENCIES ..................................................... 6

THIS GRANT WILL RE-OPEN ACCESS FOR BANGOR.................................................................... 6

THE BANGOR MARKET ........................................................................................................... 8

AREA OF AIR SERVICE INFLUENCE ............................................................................................. 8

BANGOR AIR SERVICE .............................................................................................................. 9

MAJOR DEFICIENCIES IN CAPACITY & IN NETWORK ACCESS .......................................................11

LACK OF CAPACITY IS THE #1 DEFICIENCY ................................................................................12

LACK OF CAPACITY CREATES THE #2 DEFICIENCY – HIGH FARES...............................................13

CAPACITY TRENDS – FALLING CONSISTENTLY ...........................................................................14

PASSENGER TRENDS MIRROR THE LOST CAPACITY ..................................................................15

THE ECONOMIC DAMAGE IS REAL & DEMONSTRABLE ................................................................16

GRANT OBJECTIVE: ADDITIONAL HUB ACCESS ................................................................18

UNITED AIRLINES – ORD OR IAD .............................................................................................18

ROUTE PRO FORMA – CHICAGO/O’HARE ..................................................................................19

ROUTE PRO-FORMA – WASHINGTON DULLES ............................................................................20

PROPOSED GRANT STRUCTURE .........................................................................................21

COMPREHENSIVE MARKETING PROGRAM ..................................................................................22

PROGRAM ADMINISTRATION .....................................................................................................22

PROGRESS REPORTS TO DOT .................................................................................................22

POST-GRANT MARKETING SUPPORT.........................................................................................22

PROPOSED GRANT FUND ALLOCATION .....................................................................................23

BANGOR PRIOR AIR SERVICE DEVELOPMENT EFFORTS .............................................................24

SUMMARY ...............................................................................................................................25

APPENDIX B ............................................................................................................................26

LETTERS OF SUPPORT .........................................................................................................30
Small Community Air Service Development Grant 3 

____________________________________________________________________________ 

_____________________________________________________________________ 

Bangor International Airport

Executive Summary 

Official Proposer

City of Bangor, Maine 

Bangor International Airport 

DUNS # 169182466 

Contact: Ms. Rebecca Hupp 

 Director 

City of Bangor 

Bangor International Airport 

287 Godfrey Boulevard 

Bangor, ME 04401

Bangor International Airport is the main air gateway for central, eastern 

and northern Maine, and is a major waypoint for international flights 

between North America and Europe. 

Local Community Support Organization 

This proposal is supported by a community consortium including the City 

of Bangor, the State of Maine, the Bangor Region Chamber of 

Commerce, EMDC/Mobilize Maine, and the Bangor Regional 

Development Alliance. 

Official Sponsor

The City of Bangor, Bangor International Airport is the official sponsor of 

this application. 

Synopsis of Grant Request 

Bangor International Airport and the community are requesting a grant in 

the amount of $500,000, with a 50% community match, for a total 

program fund of $750,000. 

This will be used to alleviate a major air service deficiency represented by 

a lack of access to gateway connecting hubs. The grant will be targeted 

at specific hubs that offer such connectivity and are compatible and 

additive to existing incumbent service. 

Airline Targets 

The Airport has identified key target carriers, and in this grant request is 

focused on United Airlines. 
Small Community Air Service Development Grant 4 

____________________________________________________________________________ 

_____________________________________________________________________ 

Bangor International Airport

However, due to uncertainties in the airline industry, (for example, the 

outcome of the United merger with Continental) it is understood that there 

are a range of factors that could materially change a carrier’s strategies in 

the months ahead. 

For this reason, the Airport has also identified alternative carriers that 

offer similar connectivity. In this regard, in the event that a satisfactory 

agreement cannot be attained with United, or that carrier finds itself 

unable to participate, the Airport would reserve the right to alternatively 

approach American Airlines for access to its Chicago/O’Hare hub, or US 

Airways for access to its Charlotte hub. 

Proposed Application of Funds 

The grant and the community match will be allocated into two 

applications. The primary applications will be for a carefully-defined 

revenue guarantee that would be accessed only if pre-agreed revenue 

targets are not achieved. The second application will be focused on a 

targeted marketing and public awareness program to support the new 

service. 

Marketing & 

Promotional 

Support

Airline 

Revenue 

Guarantee

Total

Community $83,333 $166,667 $250,000

US DOT $166,667 $333,333 $500,000

TOTAL $250,000 $500,000 $750,000
Small Community Air Service Development Grant 5 

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Bangor International Airport

The Air Service Deficiency 

Bangor International Airport (BGR) has experienced significantly higher 

air fares and substantial traffic leakage over the past five years. The 

reason is that changes in the airline industry have caused capacity cuts, 

even in the face of strong traffic and revenues for incumbent carriers. 

The Airport has a clear plan to address this situation, but it requires the 

assistance of a grant under the Small Community Air Service 

Development Program. 

Despite a strong economy, air service levels have declined at Bangor 

over the past five years, as have the levels of access to the national and 

global air transportation system. Three years ago, Bangor was served by 

five major airline systems, accessing five major connecting hub gateways. 

Today, it has access to just two major carrier systems, and two true 

connecting hubs.1

• Continental dropped service to its hub at Newark, despite load 

factors exceeding 84%. The congestion and delays attendant to 

the New York metro area made the service difficult for the carrier 

to support. 

• Delta has deleted service to Cincinnati/Northern Kentucky 

International Airport, due to that carrier reducing operations at 

CVG. 

• American/American Eagle retired the majority of its 37-seat ERJ135 fleet. This eliminated not only AA branded service to 

LaGuardia and Boston, but also it resulted in closure of a 

maintenance facility at Bangor International. 

• Delta found it necessary to re-allocate New York capacity, moving 

its BGR-JFK service to LGA. This effectively cut off BGR from the 

international connectivity of the Delta hub at that airport, not to 

mention substantial domestic connections as well. 

None of these events are related to the economy or the traffic generation 

within the Bangor area of service influence. As will be noted in this 

document, ridership today at BGR is exceedingly strong, with load factors 

in excess of 81%. It is a matter of changes in the airline industry affecting 

Bangor, and resulting in declining flights and rising fares. 

 

1

 These were CO/ERW, DL/CVG, NW/DTW, DL/ATL and US/PHL. It was also served seasonally from 

NW/MSP. These were in addition to AA service to both BOS and LGA, which are not structured by 

that carrier as connecting hubs, per se, but where over half the traffic was flowing to and from other 

AA flights. Today, Bangor has only service to hubs at DL/DTW, and US/PHL. US Airways operates 

flights to both DCA and LGA, but these offer limited access to other on-line destinations. 

The Grant Will 

Address A 

Growing Shortfall 

In Seat Capacity 

At Bangor 

Bangor International 

Airport serves a vibrant 

market. But changes in 

the airline industry, as 

well as creeping fare 

levels have resulted in 

enormous leakage. 
Small Community Air Service Development Grant 6 

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_____________________________________________________________________ 

Bangor International Airport

A Grant Will Assist In Addressing These Deficiencies 

The Airport has an active and aggressive air service development 

program. It has identified key service shortfalls, which, if filled, will 

substantially reverse the decline in traffic that Bangor has experienced 

over the last several years. 

There are a number of air service deficiencies that Bangor is working to 

address. The most pressing, however, is gaining additional capacity 

through major airline systems’ connecting hubs. The current Delta service 

to Detroit, and the current US Airways service to Philadelphia are 

experiencing exceptionally high load factors. This represents an 

opportunity for Bangor to explore service to other carriers’ gateways. 

But in an industry that is not expanding fleets, airline planning 

departments will not just move airplane time to Bangor unless two criteria 

are met: 

1. There must be demonstrable net-new system revenue for the 

carrier; 

2. There must be minimal risk – i.e., the risk of moving aircraft from 

another market into service at BGR must be offset. 

Bangor has hard and accurate data to satisfy the first requirement. This 

grant application is crafted to meet the second criteria. 

This Grant Will Re-Open Access For Bangor 

In this application, the community is requesting a grant in the amount of 

$500,000, which will be matched by local funding in the amount of 

$250,000. Of this total of $750,000 a fund of $250,000 would be allocated 

to carefully-designed marketing and public awareness programs to 

assure success of the new service 

The remaining dollars will be applied as a revenue guarantee, based on 

clearly-defined goals, to offset the carrier’s risk in the first year of service. 

The Airport has identified two prime airline hub targets for this grant. 

United/Chicago-O’Hare. 

The Airport has had very encouraging discussions with United Airlines 

regarding implementation of service between Bangor and 

Chicago/O’Hare. The airline has noted the success of the current Delta 

service at Bangor, which runs at an 85% load factor and provides 

substantial system feed to Delta. United believes it can gain similar traffic 

with service to its hub at O’Hare. With the new additional runway at ORD, 

United can again contemplate adding additional capacity. 

Bottom Line 

Objective: 

Addressing An 

Access Deficiency

The community has 

identified a severe and 

increasing deficiency in 

air service accessibility 

to Bangor. 

The grant request 

focuses on riskabatement targeting 

carriers that will open 

BGR up to additional 

capacity and 

competition. 

The dollars would be 

available as a revenue 

risk guarantee, not as a 

subsidy. 

However, based on the 

data and projections 

accomplished by the 

Airport, it is felt that the 

risk to the DOT’s grant 

dollars is low. 
Small Community Air Service Development Grant 7 

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_____________________________________________________________________ 

Bangor International Airport

It is noted that American may also be a target for this service, as it also 

has a very large connecting operation at O’Hare. 

United/Washington-Dulles

United has also indicated interest in service to Bangor from its global hub 

at Washington Dulles International Airport. Like ORD, this satisfies the 

objective of the grant application by providing nationwide service 

connectivity. Like Chicago/ORD, IAD also offers substantial international 

connectivity. 

Bangor does not have year round service to Washington, which is a major 

O&D point, and this service would also address this deficiency. 

At this time, United is in the process of merging with Continental Airlines. 

This injects some uncertainty to its future hub strategies. For this reason, 

Bangor was encouraged to review potential for both ORD and IAD at 

United. 

Other Options

The Airport and the Department are aware that conditions change rapidly 

in the airline industry. While initial discussions with United Airlines have 

been encouraging, there are many events that could take place in the 

coming months to alter that airline’s market strategies. 

Therefore, as a back-up, the Airport has identified two fall-back targets for 

the grant, both of which would satisfy the objectives of this grant 

application, which are to open up additional connectivity and serve to 

bring additional fare discipline to the Bangor market. The first is 

American/O’Hare – which is very similar in structure to the United 

operation at that airport. The next alternative is US Airways’ hub at 

Charlotte. This facility offers strong connectivity to the South and West. 

It is expressly noted that these alternatives are identified due to the 

unsettled nature of the airline business and they both meet the criteria for 

Bangor – which is to restore and rebuild hub access. 
Small Community Air Service Development Grant 8 

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_____________________________________________________________________ 

Bangor International Airport

The Bangor Market 

Area of Air Service Influence 

Studies accomplished by the Airport indicate that BGR serves as the air 

transportation gateway for consumers over a very wide region of northern 

Maine, plus parts of New Brunswick and Quebec. 

The population base – not including the Canadian provinces – represent 

over 413,000. 

County Population Avg Household Income Median Disposable Income

Aroostook 73,075 $42,029 $30,446

Hancock 51,046 $56,002 $37,899

Kennebec 25,560 $56,564 $34,544

Penobscot 148,136 $54,096 $35,982

Piscataquis 17,659 $40,368 $29,846

Somerset 34,958 $44,693 $31,446

Waldo 29,356 $50,087 $34,910

Washington 33,378 $39,033 $27,433

Totals 413,168 $49,466 $33,738

The economy in this region remains strong, as demonstrated by 

substantial average household income and disposable dollars. 

Air Service 

Deficiencies 

Translate Into 

Severe Negative 

Economic Impact 

A population of over 

413,000 depend on 

Bangor International as 

the gateway to and 

from the region. 
Small Community Air Service Development Grant 9 

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_____________________________________________________________________ 

Bangor International Airport

Bangor Air Service 

Today, Bangor has service from two major airline systems, plus day-ofthe-week Allegiant flights to two leisure destinations in Florida. 

The above represents the service offered as of August, 2010. Below is 

the service offered in the same month just three years ago. Capacity is 

down by over 18%, representing over 108,000 fewer seats. This is a 

growing air service deficiency which the grant will help address. 

Source:

The service to MSP was offered seasonally on week-ends. With the reorganization of Northwest into Delta, this has not been restored. All of 

these hub-feed markets were highly successful, with strong load factors. 

Access To Bangor 

Has Been 

Severely Reduced

From access to five 

major airline 

connecting hubs just 

three years ago, 

Bangor now only has 

two true connecting 

hubs for national and 

global access. 

LGA and DCA service 

is mostly O&D, as US 

Airways does not bank 

flights at those airports 

to facilitate 

connections. 

Allegiant service is 

outstanding, but it is 

focused entirely on 

generating net-new 

leisure traffic by 

offering high-value, 

low-cost vacation 

packages to Florida, 

and not filling existing 

air travel demand, as 

such. 
Small Community Air Service Development Grant 10 

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_____________________________________________________________________ 

Bangor International Airport

As the capacity has been reduced, this has choked off not only local 

passenger ridership, but has had a devastating effect on the local 

economy, which depends heavily on in-bound tourist traffic visiting the 

region, including Acadia National Park, which is the nation’s tenth most 

visited park, with 2.2 million annual visitors, the vast majority in the 

summer period. 

This travel demand for Maine is illuminated by the fact that in the peakperiod third quarter of the year, 70% of all air travelers at Bangor are inbound generated – i.e., visitors. The reduction in air service access over 

the past three years has been exceptionally damaging to the region’s 

economy by not having the capacity or acceptable fare levels to meet this 

demand. The loss of capacity was not due to low passenger load factors. 

The airport would point out that the service example shown on the map 

on the prior page for August 2007 was one that was highly successful for 

the airlines – these flights were essentially full, and were meeting the 

strong demand in the Bangor marketplace. The load factors for August 

2007 tell the story...

Airport Airline System Total Pax Total Seats Load Factor Total Flights 

ATL 7,391 8,540 86.5% 122

DL 7,391 8,540 86.5% 122

BOS 9,877 11,646 84.8% 437

AA 6,154 7,010 87.8% 187

DL 3,723 4,636 80.3% 250

CVG 5,252 5,899 89.0% 118

DL 5,252 5,899 89.0% 118

DTW 7,084 8,250 85.9% 165

NW 7,084 8,250 85.9% 165

EWR 3,388 3,934 86.1% 87

CO 3,388 3,934 86.1% 87

LGA 4,973 5,884 84.5% 137

AA 2,376 2,884 82.4% 77

US 2,597 3,000 86.6% 60

PHL 10,118 11,982 84.4% 181

US 10,118 11,982 84.4% 181

Totals 48,083 56,135 85.7% 1,247

This point is made to illuminate the clear fact that the current deficiency in 

air service at Bangor is not due to lack of demand, but represents shifts in 

the airline industry that have left the market with what is now clearly 

insufficient capacity.2

 

2

 Source: Aviation DataMinerTM analysis of US DOT T-100 data for August, 2007. 

Flights Averaged 

Almost 86% Full In 

Summer of 2007

Using August 2007 - 

when capacity was 

much higher than today 

- as an example, the 

BGR market essentially 

filled all flights. 

Today, load factors 

remain well over 80%, 

yet capacity is down 

18%. 

Without question, the 

loss of this capacity 

has choked off demand 

– particularly for the 

inbound visitors in the 

summer who comprise 

70% of Bangor 

passengers. 
Small Community Air Service Development Grant 11 

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Bangor International Airport

Major Deficiencies in Capacity & In Network Access 

Since 2007, Bangor has lost over 40% of its scheduled network airline 

departures, and has seen its capacity drop by almost 30%.3

System Dest 2007 2010 Change % 

Change 2007 2010 Change % Change

AA 1,392 (1,392) -100.0% 51,504 -51,504 -100.0%

BOS 1,052 (1,052) -100.0% 38,924 -38,924 -100.0%

LGA 340 (340) -100.0% 12,580 -12,580 -100.0%

CO 432 (432) -100.0% 17,557 -17,557 -100.0%

EWR 432 (432) -100.0% 17,557 -17,557 -100.0%

DL 2,581 1,619 (962) -37.3% 104,412 82,850 -21,562 -20.7%

ATL 500 (500) -100.0% 35,000 -35,000 -100.0%

BOS 1,389 (1,389) -100.0% 34,792 -34,792 -100.0%

CVG 692 (692) -100.0% 34,620 -34,620 -100.0%

DTW 890 890 46,302 46,302

JFK 189 189 9,450 9,450

LGA 540 540 27,098 27,098

NW 809 60 (749) -92.6% 40,450 3,000 -37,450 -92.6%

DTW 798 60 (738) -92.5% 39,900 3,000 -36,900 -92.5%

MSP 11 (11) -100.0% 550 -550 -100.0%

US 1,199 2,165 966 80.6% 69,708 113,085 43,377 62.2%

DCA 32 32 1,600 1,600

LGA 131 979 848 647.3% 6,550 43,074 36,524 557.6%

PHL 1,068 1,154 86 8.1% 63,158 68,411 5,253 8.3%

6,413 3,844 (2,569) -40.1% 283,631 198,935 -84,696 -29.9%

Schedule Compare: Airport Drill Down 

Airport: BGR

Departures Seats

Total

As noted, this reduction has been entirely the result of changes in the 

airline industry, and not any lack of demand at Bangor. Flights have 

maintained load factors in the 80%+ range, which means that when seats 

are offered, they are quickly booked. Conversely, when seats are 

reduced, consumers simply are cut off from flying from – and most 

importantly, to – Bangor. 

Note that on an annualized basis, Bangor in 2010 will have almost 85,000 

fewer departing seats. Based on the simple math of the market’s 

traditional 80% load factors, this would indicate that today, Bangor is 

losing approximately 67,000 enplanements – or 134,000 O&D 

passengers per year. 

 

3

 This is in addition to Allegiant, which serves two Florida points on a 2 to 3 per week basis, and offers 

absolutely no connectivity whatsoever. It’s model is to generate vacation traffic, not to fill existing air 

service demand. 

It’s Not Just BGR 

That’s Being 

Hurt...

When consumers 

seeking to travel to the 

region can’t find a seat, 

or can only find one at 

high fares, they either 

use PWM or simply 

don’t come to Maine at 

all. 

The Airport estimates 

that Bangor is losing 

67,000 outbound and 

inbound passengers 

per year due to the loss 

of capacity. 

In terms of lost 

consumer spend, it is 

roughly projected that 

this costs the Maine 

economy at close to 

$20 million annually. 
Small Community Air Service Development Grant 12 

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_____________________________________________________________________ 

Bangor International Airport

 

Lack of Capacity Is The #1 Deficiency 

Bangor International has seen its traffic choked off simply due to declines 

in network airline capacity. For the full year ending 5/31/2010, the market 

filled just short of 80% of the network carrier seats offered. This includes 

both peak and off-peak periods.4

City System Total Pax Total Seats Load Factor Total Flights 

BOS 24,458 29,168 83.9% 583

DL 24,458 29,168 83.9% 583

DCA 1,691 2,250 75.2% 45

US 1,691 2,250 75.2% 45

DTW 66,135 77,220 85.6% 1,542

DL 66,135 77,220 85.6% 1,542

EWR 11,409 13,210 86.4% 237

CO 11,409 13,210 86.4% 237

JFK 60,300 71,445 84.4% 1,365

AA 2,307 2,616 88.2% 15

DL 57,993 68,829 84.3% 1,350

LGA 55,879 84,527 66.1% 2,125

US 47,360 73,477 64.5% 1,904

DL 8,519 11,050 77.1% 221

MSP 1,216 1,464 83.1% 22

DL 1,216 1,464 83.1% 22

PHL 96,106 120,572 79.7% 2,227

US 95,186 119,356 79.7% 2,211

YX 920 1,216 75.7% 16

Totals 317,194 399,856 79.3% 8,146

Of importance to this application are the load factors in the US Airways 

Philadelphia market, and in the Delta Detroit market. It is these airports 

that today serve as the main connecting hub gateways for Bangor. 

Buttressing the objectives of the requested grant are also the load factors 

that were experienced by Continental in the Newark market – over 86%. 

The service was deleted due to congestion issues at Newark, not due to 

lack of traffic or revenue. 

These data underscore the community’s contention that the addition of 

service to either the United hub at ORD or the United hub at IAD will 

 

4

 Source: Aviation DataMinerTM analysis of T-100 data. Note that Allegiant semi-charter service is not 

included. These flights run at 90% plus load factors and if included in the above data would skew the 

load factors for the market up over 80%. 

Lack of Capacity 

To Airline 

Gateways Is 

Deterring BGR 

Traffic.

Note that both PHL and 

DTW have very high 

load factors. These are 

the two main 

connecting gateways 

for BGR, and represent 

choke points for 

consumers to fly to or 

from the community. 

Clearly, these data 

show that the 

additional service 

which the grant will 

make possible will be 

successful from day 

one. 
Small Community Air Service Development Grant 13 

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_____________________________________________________________________ 

Bangor International Airport

alleviate a deficiency in capacity, and be profitable for the carrier. All that 

is needed is this grant, which will provide a risk “safety net” for the airline.5

Lack of Capacity Creates The #2 Deficiency – High Fares 

Fares at Bangor are disproportionately high, which is another result of 

lack of capacity. When flights are fully booked, particularly in the critical 

summer periods, airlines have no incentive to cut ticket prices. 

Rank Market Psgr Avg 

Fare Psgr Avg Fare Psgr. Gross Fare

1 MCO 20,640 $167.96 134,177 $145.85 306,612 $150.14

2 JFK 14,394 $161.39 93,124 $110.06

3 PHL 14,316 $267.57 64,216 $200.67 304,924 $104.10

4 ATL 12,779 $247.91 68,512 $182.16 30,030 $233.27

5 TPA 10,839 $219.38 60,740 $150.43 193,664 $155.69

6 LGA 9,458 $172.01 61,132 $120.93 18,996 $221.03

7 DCA 8,974 $277.96 59,648 $219.10 42,286 $251.47

8 BWI 7,483 $192.49 110,106 $109.46 371,923 $106.76

9 DTW 7,158 $250.14 19,534 $235.40 48,524 $223.93

10 PHX 6,899 $242.29 26,183 $213.26 82,234 $200.28

11 IAH 6,824 $280.16 20,703 $220.90 18,790 $219.14

12 CLT 6,637 $211.70 48,778 $156.20 29,153 $219.01

13 RDU 6,597 $202.39 28,175 $140.91 46,197 $152.92

14 EWR 6,453 $153.60 39,164 $159.03 21,802 $162.03

15 FLL 5,562 $254.50 35,780 $171.68 73,145 $161.65

16 CVG 5,449 $167.59 7,843 $197.51 10,212 $186.77

17 ORD 5,390 $277.54 51,827 $236.08 60,540 $175.27

18 MSP 5,338 $286.92 20,462 $248.51 30,648 $209.51

19 LAS 5,227 $289.35 26,171 $207.71 92,336 $192.50

20 DFW 5,091 $343.07 20,689 $227.43 27,623 $211.19

21 RSW 5,035 $223.58 32,710 $173.99 50,123 $170.98

22 LAX 4,831 $349.54 30,192 $232.68 39,574 $215.34

23 SFO 4,329 $323.17 31,481 $235.82 28,785 $238.48

24 DEN 4,263 $328.97 35,203 $222.79 57,192 $198.35

25 ORF 3,932 $240.65 16,296 $171.91 28,471 $141.18

382,193 $236.60 1,816,571 $185.73 3,107,184 $170.44

Variance From BGR -21.5% -28.0%

All Markets

BGR PWM MHT

Comparing Bangor fares to those of Portland reveals a 21.5% average 

fare differential, and much higher fares to all but one of the airport’s top 

25 destinations. Consumers at Bangor also pay an average of 28% more 

to fly than do consumers at Manchester, NH.6

 

5

 United is the prime target. However, if due to unforeseen circumstances, such as issues 

surrounding the Continental merger, United finds itself unable to participate, the US Airways hub at 

Charlotte is identified as an alternative. 

6

 Fares are for the full year ending 3/31/10, and are one-way, including federal fees and taxes. 

Source: Aviation DataMinerTM analyses of DB1B data, adjusted for each carrier and reconciled to 

airport and T-100 tables. 

Bangor 

Consumers and 

Visitors Are Paying 

Double-Digit Fare 

Premiums

Portland is now taking 

significant traffic from 

Bangor due to lower 

fares. 

If this is not addressed, 

PWM could evolve into 

the de facto entry point 

for Northern Maine, to 

the economic detriment 

of the entire region. 
Small Community Air Service Development Grant 14 

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Bangor International Airport

The constriction of capacity at BGR is one major culprit for this situation. 

However, both PWM and MHT also benefit from the presence of low-fare 

carriers. Bangor International has no illusions that the capacity which the 

grant will make possible will serve to completely resolve this situation. But 

the entry of an additional 200+ seats per day in the BGR market to a 

major connecting hub gateway will bring some fare discipline into play. 

Capacity Trends – Falling Consistently 

While passenger enplanements are down 10.7% (2009 compared to 

2002), airline capacity has been slashed by 35.4%. 

220,000

240,000

260,000

280,000

300,000

320,000

340,000

360,000

380,000

2002 2003 2004 2005 2006 2007 2008 2009

Bangor Annual Capacity – Seats Scheduled 

This again indicates that the additional capacity and air access this grant 

will provide will be profitable very soon after service initiation. This would 

mean that risk to the Department will be minimized as well. 

Add The Capacity, 

And The 

Passengers Will 

Follow

Since 2002, capacity 

has been cut by over 

35%. 

 Enplanements have 

declined by just 10.7% - 

resulting in a situation 

today where flights are 

effectively operating at 

capacity and BGR 

demand is spilling to 

Portland. 
Small Community Air Service Development Grant 15 

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Bangor International Airport

Passenger Trends Mirror The Lost Capacity 

Reviewing the traffic trends at BGR is very instructive – and of great 

concern – in regard to the gravity of the air service deficiencies of high 

fares and declining capacity. 

2002 2003 2004 2005 2006 2007 2008 2009

Enplanements 209,410 204,136 226,153 240,300 207,505 201,991 175,076 186,884

150,000

160,000

170,000

180,000

190,000

200,000

210,000

220,000

230,000

240,000

250,000

Bangor Historical Enplanements

The enplanement trend has been consistently down since 2005. Note on 

the chart below that the summer peak travel has declined each year as 

well. This is due to the decline in capacity offered by airlines, and not any 

weakness in the BGR and Northern Maine marketplace.

10,000

15,000

20,000

25,000

30,000

35,000

Jan-05

Mar-05

May-05

Jul-05

Sep-05

Nov-05

Jan-06

Mar-06

May-06

Jul-06

Sep-06

Nov-06

Jan-07

Mar-07

May-07

Jul-07

Sep-07

Nov-07

Jan-08

Mar-08

May-08

Jul-08

Sep-08

Nov-08

Jan-09

Mar-09

May-09

Jul-09

Sep-09

Nov-09

Enplanements Linear (Enplanements)
Small Community Air Service Development Grant 16 

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Bangor International Airport

The data are disturbing because lack of capacity clearly is causing visitor 

travel to decline. The summer peaks typically represent passenger traffic 

that is 70% to 75% inbound visitors. Gaining additional capacity will help 

to greatly alleviate this deficiency in seats. 

The Economic Damage Is Real & Demonstrable 

Because in-bound visitors represent 52% of Bangor’s year-round traffic, 

and 70%+ in summer months, the reduction in airline capacity represents 

significant loss of economic impact for the region.

Most of these lost passengers are likely using PWM, which has much 

lower fares and more service due to its access to much larger population 

centers. But a portion of this lost traffic really is “lost” to the Maine 

economy – when some consumers can’t book a seat, or can only do so at 

very high fares – they simply don’t come to Maine at all. 

The most recent example of the damage this lack of air service capacity 

has had on the Bangor economy is the major pull-down in summer 

cruises operated by American Cruise lines. 

Because of high airfares, American Cruise Lines Is Moving Most of Its Summer 

Departures To Portland. 

The cruise line found it necessary to cut departures at Bangor from 21 to 

just six. The reason for the loss of this business is singular: air service. 

There are insufficient seats, and the fares have resulted in the cruise line 

finding it difficult to fly customers into Bangor. 

Lack of Capacity 

and High Fares 

Inflict Long-Term 

Damage To The 

Region’s Economy

The dollar losses are in 

the tens of millions 

simply because 

consumers cannot get 

to Bangor from the rest 

of the nation. 
Small Community Air Service Development Grant 17 

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Bangor International Airport

The Vice President of Marketing of the American Cruise Lines made it 

quite clear: 

“We love Bangor. The city has been good to us. It was a tough 

decision... It all came down to a lack of flight options and the cost of 

flying into Bangor.” 

The Airport and the Community would point out that the service outlined 

in this application could be critical in getting the cruise line to return at all 

in 2011. 

This is just the tip of the financial iceberg threatening the Bangor 

economy. Simple back-of-the-envelope math can give an idea of the 

situation. Based on traditional load factors, we have estimated a loss of 

67,000 annual visitors arriving at Bangor, due to the reduction in airline 

capacity. 

It we assume that 70% of these visitors use Portland or other alternative 

entry points, but the remainder decline to travel to Maine at all because of 

lack of BGR capacity, the dollars lost to the economy are staggering. 

The State of Maine reports that each visitor spends an average of $962 

while in the state – and over $1,050 during summer months. If we just 

take the lower figure, and apply it to an estimated loss of 30% of the 

inbound visitors Bangor has experienced due to reductions in air service, 

it represents an economic hit of $19.4 million annually. 
Small Community Air Service Development Grant 18 

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Bangor International Airport

Grant Objective: Additional Hub Access 

While there are a number of options for attaining additional connectivity to 

the US air transportation system, the Airport has analyzed those that will 

provide the strongest return for the Department’s grant dollars. The 

following are the primary targets. 

United Airlines – ORD or IAD 

The Airport has identified two options that will address the need for 

additional hub gateway access at BGR. These are the United Airlines 

operations at Washington/IAD and at Chicago/ORD. 

While the Chicago option offers more connections, Washington 

represents less flying and strong connectivity to Europe as well as the US 

and Latin America. Because United is in the merger process with 

Continental, the carrier has not determined as yet the strategic roles 

these hubs will play at the combined airline. As a result, traffic and 

revenue analyses were accomplished for both. 

Route metrics and traffic forecasts follow. In both cases, it is felt that the 

projections are conservative and represent scenarios where traffic and 

revenue will build very quickly, minimizing the exposure of the grant fund 

to revenue guarantees. 
Small Community Air Service Development Grant 19 

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Bangor International Airport

Route Pro Forma – Chicago/O’Hare 

Market Distance 975

Aircraft CRJ-700

Service Pattern 2 Roundtrips

Annual Seats 82,431

Annual Flights 1,249

Completion Factor 96.0%

Block Time 2.3

Annual Block Hours 2,873

Annual Seats 82,431

Cost Per Hour $3,945

CASM $0.1410

Annual Segment Operating Cost $11,332,251

Local Traffic

ORD Local O&D 8,490

ORD Local PDEW 11.6

Average Fare $0.00

Local Revenue $2,400,578

Local Yield $0.2900

Connecting Traffic

Connecting Traffic 61,466 

Connecting PDEW 84.2

Connecting Revenue $10,837,992

Totals

 Onboard Passengers 69,955

Total PDEW 95.8

 Pro-Rated Revenue $13,238,570

 Less Displacement (10%) $1,323,857

 Net System Revenue $11,914,713

 Net Average Revenue per Passenger $189.24

Average Market Yield $0.1747

Market RASM $0.1482

Annual ASMs 80,370,576

Annual RPMs 68,206,389

Segment Load Factor 84.9%

Projected Segment Operating Profit $582,462

Operating Margin 5.1%

Projected Operating Metrics - BGR - ORD

Revenue & Traffic Projections

Load Factor Projections
Small Community Air Service Development Grant 20 

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Bangor International Airport

Route Pro-Forma – Washington Dulles 

Market Distance 600

Aircraft CRJ-700

Service Pattern 2 Roundtrips

Annual Seats 82,431

Annual Flights 1,249

Completion Factor 96.0%

Block Time 1.8

Annual Block Hours 2,248

Annual Seats 82,431

Cost Per Hour $4,290

CASM $0.1950

Annual Segment Operating Cost $9,644,469

Local Traffic

IAD Local O&D 6,282

IAD Local PDEW 8.6

Average Fare $213.72

Local Revenue $1,342,619

Connecting Traffic

Connecting Traffic 48,746 

Connecting PDEW 66.8

Connecting Revenue $9,940,399

Totals

 Onboard Passengers 55,028

Total PDEW 75.4

 Pro-Rated Revenue $11,283,018

 Less Displacement (10%) $1,128,302

 Net System Revenue $10,154,716

 Net Average Revenue per Passenger $205.04

Average Market Yield $0.3076

Market RASM $0.2053

Annual ASMs 49,458,816

Annual RPMs 33,016,777

Segment Load Factor 66.8%

Projected Segment Operating Profit $510,247

Operating Margin 5.3%

Revenue & Traffic Projections

Load Factor Projections

Projected Operating Metrics - BGR - IAD
Small Community Air Service Development Grant 21 

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Bangor International Airport

Proposed Grant Structure 

Bangor International Airport and the community fully believe that the 

market will support either of the hub access scenarios outlined in this 

document. 

The intended structure of the grant, combined with the local 50% match 

will be as follows: 

• This is not a subsidy program. It is merely a financial safety net to 

reduce the risk for the carrier. If the revenue goals are met – and 

there is every indication that the Bangor market can do so – the 

revenue guarantee portion of the grant will not be expended. 

• BGR and the airline will negotiate to provide two daily (week-day 

with reduced week-end flying) round trips in the market. The 

agreement will provide agreed-upon per-flight costs, including a 

reasonable profit hurdle. 

• Revenues generated across the United system by the Bangor 

service will be reviewed at the end of the first 6-month period. Any 

shortfall will be addressed by the revenue-guarantee portion of the 

grant funding. This will again be done at the end of the 

subsequent six months. 

• Monthly “short-stop" triggers will be built into the monitoring 

program. This will allow the Airport and the carrier to quickly 

determine if the traffic is materially below forecasts in each of the 

first six months. If so, the Airport and the airline can decide to take 

remedial actions, up to and including early termination of the 

program. 

• The carrier will agree to key performance standards. These 

include a 96% schedule completion, net of weather cancellations. 

On-time arrival performance, using the DOT standard of 15-

minutes of the carrier’s published schedule, will be required.7

• The carrier will make all reasonable efforts to schedule the BGR 

flights to connect inbound and outbound at the hub airport. 

• The carrier will agree to fare levels in the market commensurate 

with those at comparable peer cities on their route system. 

• The program will be for one year from start of service. 

Prior to executing any agreement, the airport will provide the revenue 

guarantee documents to Department staff for review and approval. 

 

7

 Typically a 98% completion would be used. However the reality is that both of the scenarios in this 

document involve both congested airports and congested air space. 
Small Community Air Service Development Grant 22 

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Bangor International Airport

Comprehensive Marketing Program 

Bangor International already has an aggressive marketing program. This 

will be applied to the proposed service. A point-by-point marketing plan 

for the new flights will be prepared and submitted to the Department for 

review. As envisioned, this will include: 

• Weekly banner ads in the Bangor Daily News to showcase the 

new flights as part of the overall air service access at Bangor 

International Airport. 

• The Airport will work with the carrier to use its marketing programs 

to promote Bangor on its global website. 

• The Airport will work with key local industries to determine 

customers, suppliers, and clients in other parts of the nation. 

These will then be targeted to assure awareness of the new 

convenience in accessing Bangor. 

• Targeted mailings will be accomplished, both locally and to key 

business targets across the airline’s route system 

The Airport proposes focus substantial funding to make this new service a 

success. 

Program Administration 

The Bangor International Airport will be the official point of contact for 

grant administration, and for liaison with the community, the airline and 

other stakeholders 

Progress Reports to DOT 

It will be the responsibility of the Airport to provide the required quarterly 

reports to the Department. However, the Airport has every intention of 

being pro-actively in contact to keep the Department updated on the 

progress of the program. 

Post-Grant Marketing Support 

The Bangor International Airport and the community have an on-going air 

service enhancement program that includes routine advertising, 

community meetings, and contact with travel generators and regional 

businesses. 

Subsequent to the end of the revenue-guarantee period, these activities 

will continue. The Airport monitors carrier load factors and traffic 

performance on an on-going basis, and takes appropriate action when 
Small Community Air Service Development Grant 23 

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Bangor International Airport

weaknesses in traffic or revenue are foreseen. The United service 

outlined in this document will be a part of that program. 

Proposed Grant Fund Allocation 

Marketing & 

Promotional 

Support

Airline 

Revenue 

Guarantee

Total

Community $83,333 $166,667 $250,000

US DOT $166,667 $333,333 $500,000

TOTAL $250,000 $500,000 $750,000

In addition, the Airport has a professional in-house ground handling 

operation, and this will be offered to reduce the capital costs of ground 

equipment and staffing should the carrier request such services. 
Small Community Air Service Development Grant 24 

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Bangor International Airport

Bangor Prior Air Service Development Efforts 

Bangor has an active air service development and enhancement program 

directed by a full-time staff member. 

• The Airport is in constant contact with current and potential 

airlines to assure that no air service opportunities are missed. 

• Thanks to a 2004 Small Community Air Service Development 

Grant, Bangor was able to offer sufficient marketing and 

promotional support to attract the entry of Allegiant. This company 

provides high-value, low-cost vacation packages to Florida, and 

has been very successful in the Bangor market. 

• The Airport continues to work with incumbents Delta and US 

Airways in regard to fare and capacity issues. 

• As the nation’s premier international gateway for charter and 

business aviation flights from Europe, the Airport is extensively 

engaged in pursuing expanded international second-tier and 

scheduled service options. 

• The Airport is working with carriers such as Continental and 

American, exploring options to get these carrier systems back into 

the BGR market. 

 
Small Community Air Service Development Grant 25 

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Bangor International Airport

Summary 

The Bangor International Airport and the Bangor community appreciate 

the opportunity to file this application. We believe that the situation at 

BGR is such as to fit the letter and the spirit of Congress in implementing 

this program. 

We ask favorable consideration for the following reasons: 

• The market has experienced significant reductions in air 

service over the last five years. 

• All of the reductions are due to changes in the structure of 

the airline industry – the Bangor economy is strong and 

vibrant. 

• Air fares are high – over 21% higher than at Portland. This, 

combined with lack of seat capacity, is literally driving 

consumers to use that airport instead of Bangor International. 

• The local economy is being harmed by this situation – the 

reduction in the cruise industry at Bangor, and its potential 

move in its entirety to Portland is just the latest example. 

• The service that this grant will facilitate will open Bangor to 

access from additional points, add significant new capacity, 

and bring new fare discipline to the market. 

If there is further data or information needed, we stand ready to assist the 

Department. 
Small Community Air Service Development Grant 26 

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Bangor International Airport

APPENDIX B 
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Bangor International Airport
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Letters of Support 
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Bangor International Airport
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Bangor International Airport
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Bangor International Airport
Small Community Air Service Development Grant 36 

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Bangor International Airport
Small Community Air Service Development Grant 37 

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Bangor International Airport