APPLICATION UNDER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT-OST-2014-0133

SUMMARY INFORMATION

All applicants must submit this Summary Informatio n schedule, as the application coversheet, a completed standard form SF424 and the full application proposal on www.grants.gov

. For your preparation convenience, this Summa ry Information schedule is located at

http://www.dot.gov/policy/aviation-policy/sm all-comm unity-rural-air-service/SCASDP

A. Provide the legal sponsor and its dun a nd bradstreet (D&B) data universal numbering
system (DUNS) number, including +4, employee identification number (EIN) or tax id.

Legal Sponsor Name: City of Alamogordo

DUNS Number: 0868548250000

EIN/Tax ID: 85-000099

B. List the Name of the community or consortium of communities applying:

1._ City of Alamogordo

___________________________________ 2._________________________________

3._______________________________

4.____________________________________________________

C. Provide the full airport name and 3-Le tter IATA Airport Code for the applicant(s)
airport(s) (Only provide codes for the airpor t(s) that are actually seeking service).

1. Alamogordo -White Sands Regional
Airport ALM 2.

3. 4.

D. List the 2-digit congression al district code applicable to the sponsoring organization,

and if a consortium, to each participating community.1. NM-2 2.

3. 4.

E. Applicant Information: (Check All That Apply)

X Not a Consortium Intersta te 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 previous recipient: Year of grant(s):

F. Public/Private Partnerships: (List Organization names)

PUBLIC PRIVATE

1. City of Alamogrodo 1.

2. 2.

3. 3.

4. 4.

5. 5.

G. Project Proposal: (c heck all that apply)

X Marketing Upgrade Aircraft X New Route

Travel Bank Service Restoration Subsidy

Surface Transportation X Regional Service X Revenue Guarantee

Launch New Carrier X Start-up Cost Offset First Service

Study Secure Additional Service Other (explain below)

H. Existing Landing Aids at Local Airport:

Full ILS Outer/Middl e Marker Published Instrument Approach
Localizer Other (specify)
I. Project Cost: Do not enter text in shaded areaLine Description Sub Total Total Amount

1 Federal amount requested $456,950

2 State cash financial contribution 0
Local cash financial contribution

3a Airport cash funds 0

3b Non-airport cash funds $150,000

3 Total local cash funds ( 3a + 3b ) $150,000

4 TOTAL CASH FUNDING ( 1+2+3 ) $606,950

In-Kind contribution

5a Airport In-Kind contribution** $64,931

5b Other In-Kind contribution** $28,119

5 TOTAL IN-KIND CONTRIBUTION

( 5a + 5b ) $93,050

6 TOTAL PROJECT COST ( 4+5 ) $700,000

J. IN-KIND CONTRIBUTIONS**

For funds in lines 5a (Airport In-Kind contributi on) and 5b (Other In-Kind contribution), please

describe the source(s) of fund( s) and the value ($) of each.

The funds in lne 5a stem from airport personnel funds to account for the time that airport personnel will

be engaged in implementing the marketing plan.

The funds for 5b stem from general local municipal funds accounting for the time city personnel will be

assist in the implementation of the marketing plan.

K. Is This Application Subject To Review By State Under Executive Order 12372 Process?

NO

• This application was made available to the state under the Executive Order 12372

Process for review on (date) _____________.

• Program is subject to E.O. 12372, but has not been selected by th e state for review.

• Program is not covered by E.O. 12372.L. Is The Applicant Delinquent On Any Fede ral Debt? (If “Yes”, Provide Explanation)
No Yes (explain)

___No________________________________________________________________________

______________________________________________________________________________

___A PROPOS AL TO THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Community Proposal City of Alamogordo, New Mexico DUNS # 08-685-4825

A PROPOSAL UNDER THE

SMALL COMMUNITY AIR SERVICE DOCKET DOT-OST-2014-0113

Under 49 U.S.C. § 41743 et. seq

Mr. Matt McNeile Assistant City Manager City of Alamogordo 1376 E. Ninth Street Alamogordo, NM 88310

INTRODUCTION (Summary Information)

The City of Alamogordo, a muni cipal corporation within the State of New Mexico, is in the process of publishing a Request for Propos als (RFP) to solicit car riers interested in providing services to and from the Dallas/Fo rt Worth, TX metropolitan area. This RFP is being carried out after a commercial airline service company expre ssed a strong interest in providing services to the area. Alam ogordo, in collaboration with communities in the Otero-Lincoln County area, is submitting this proposal to the Small Community Air Service Development Program to fund a reve nue guarantee pool a nd to support initial marketing. The investment for this grant will allow for the City to develop selfsustaining regional jet service for the area. It is anticipated that the selected airline carrier will use a 70 passenger Embraer Regional Jet nineteen (19) times a week.

The Alamogordo-White Sands Airport has a long record of providing commercial air services. Prior to deregulation in 1978, several major airlines provided well-used service. After deregulation, the Essential Air Service (EAS) program provided air service but to destinations that had little to no interest by prospective air travelers. Transitioning to an unsubsidized regional jet service is a long delayed step in providing an important service to the community while supporting econom ic development in the area.

The projected market area has a robust service and retail industry that is primarily driven by a very strong Air Force and Army military-b ased industry as well as tourism. All of the requested funds will initially be used for a revenue guarantee, but the City is optimistically anticipating thatnot all of the funds may be needed. Those projected un1used funds will firs t be used to support a revenue guarantee for a second destination and any remaining funds will eventually be used for marketing and promotion. The City has formed a team of marketing professionals w ho will implement a marketing plan designed to drive up passenger demand based on a tier system, taking in account funding availability.

City of Alamogordo – White Sands Ai r Service Projected Market Area

The City of Alamogordo believes that this ap plication precisely m eets the criteria and spirit of the Small Community Air Service Development Program and eagerly awaits a positive response to effectively implement this proposal.

Please send correspondence regard ing this app lication to:

Mr. Matt McNeile Assistant City Manager City of Alamogordo
1376 E. Ninth Street Alamogordo, NM 88310

On behalf of the residents of Alamogordo, I thank you for this opportunity and urge a speedy approval of our request.

City of Alamogordo, NM

Susie Galea Mayor of Alamogordo

2

### A PROPOSAL TO THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

CITY OF ALAMOGORDO PROPOSAL UNDER THE SMALL COMMUNITY AIR SERVICE

ALAMOGORDO-WHITE SANDS REGIONAL AIRPORT AIRLINE SERVICE TO DALLAS/FORT WORTH, TEXAS

3Community Proposal Under 49 U.S.C. § 41743 et. seq

City of Alamogordo, New Mexico DUNS # 08-685-4825 DOCKET DOT-OST-2014-0113

Table of Contents:

I. Alamogordo -White Sands Regi onal Airport History.................. 5

II. Airport Needs and Deficiencies.......................................... 6

III. Project Sponsor ............................................................. 7

IV. Proposal...................................................................... 8

V. Community Profile........................................................... 9

VI. Air Service History.......................................................... 12

VII. Material Benefits/Market Analysis ...................................... 12

VIII. Program Goals ................................................................ 13

IX. Program Timeline............................................................ 13

X. Funding/ Budget.............................................................. 14

XI. Monitoring Program........................................................ 15

XII. Marketing Plan Outline.................................................................... 15

4I. Alamogordo-White Sands Regional Airport History

The Alamogordo-White Sands (ALM) Regional Airport is a general aviation airport owned and operated by the City of Alamogor do in accordance with Section 3-39-1 NMSA 1978. The airport is located at 32’ 50” N 105” 59” W at an elevation of 4197’. Airport construction began in 1954 and the airport opened in 1958 as the Alamogordo Municipal Airport, with commercial air se rvice provided by Continental Airlines. Initially, the airport only had a 7,005’ long by 150’ wide asphalt paved runway but from 1960-1969 major development projects occurre d, including the construction of the commercial terminal building, auto parking and access roads, an as phalt paved parallel taxiway to 3-21, an aircraft parking apron, a 3,500’ by 200’ dirt crosswind runway, as well as several other improvements. In 1974 the heavy aircraft parking apron and the U.S. Forest Service (USFS) airtanker base - including three slu rry load pits - was constructed. The airport name was changed in 1974, to Alamogordo-White Sands Regional Airport, and at this time a VOR instrument approach was established and a taxiapron project was completed.

As indicated, Alamogordo-White Sands Regional Airport ha s had a long tradition of providing commercial service to the Otero-Lincoln region. Commercial ai rlines such as; Continental Airlines (1958- 1962), Frontier Airlines (1962- 1979), Volare Air Charter (2001-2004), Rio Grande Airlines (2003-2004) , Westward Airways (2005), and Mesa Airlines (2006-2008) provided commercial air services using ALM. The latest, commercial airline, New Mexico Airlines – Pacific Wings, began commercial air service in October 2008. They made two departure fights a day to Albuquerque and one arrival flight seven days a week. These services were provided under the Essential Air Service (EAS) program, and became unavailable in April 2012, when funding was eliminated. The critical limiting factor with the EAS service was that th e flights did not provide for the customer's primary need – flight to a ma jor airline hub where they could connect with nationwide or internatio nal flights. This point cannot be over-emphasized! The major air carrier who has expressed a ve ry strong desire in establis hing RJ service at ALM is primarily motivated to do so due to the ve ry large number of o fficial military air travelers. Yet, during the over three decad es of EAS provided service at ALM, the military had almost no use of the EAS flights!

After the airlines were deregulated in the late 70s, the major air carriers gradually transitioned from a point-to- point to a hub based system. Yet the various local EAS service providers didn't respond resulting in a dwindling number of passengers while the actual local demand for airline service increas ed dramatically. The transition from EAS service to regional jet service direct to a hub will provide a sustainable business model by appealing to a large base of air travelers with a wide range of needs. We expect that this service will not require long te rm subsidies to be successful.

The Alamogordo-White Sands Regional Airpor t’s mission is to provide a necessary transportation hub for the continued gr owth of Alamogordo, the surrounding communities, Holloman AFB (HMN) and White Sands Missile Range (WSMR). The mission also requires the airport to maintain the highest standards of safety and utility,

5and to preserve the airport for future gene ral aviation. W ith this in mind, the City Commission of Alamogordo has assigned th e Alamogordo Airport Advisory Board, made up of five board members, two of wh ich must be licensed pilots, who have the responsibility of providing policy recomme ndations to the govern ing body on matters pertaining to the airport.

The Alamogordo-White Sands Regional Airport is one of eight (8) regional airports within the state of New Mexico, and consis ts of two runways, a terminal building, maintenance shop, fire station and 1,500 acres of fenced-in property. The primary runway is a 7005’ paved runway that will be extended anot her 2200’ over the next few months. This regional airport is designated as a United States Forest Service Fire Tanker Base, hosting 109 based aircraft; of which Neptune Aviation (the largest tenant) will soon house seven P-2 and one Bae-146 airtankers as well as accomplish all of their aviation training

Airport fees are subject to §4-06-060 of the Alamogordo Muni cipal Code. Airport user landing fees for commercial operators over twelve thousand five hundred pounds, who are not covered by a lease or agreement, must pay $0.20 per thousand pounds per landing. The code also requires a fee of $30.00 a month for an aircraft over twelve thousand five hundred pounds for parking. Airport users’ la nding transient or overnight rates are charged $10.00 per night for airc raft over twenty five thousand pounds.

The primary goals of the Alamogordo-W hite Sands Regional Airport are: 1. maintain current airport services 2. increase the use by wildland aer ial firefighting organizations 3. establish regional jet service to Dallas followed by Phoenix 4. support and increase general aviation to include medical transport, shipping and cargo, business and personal air service

II. Airport Needs and Deficiencies

South-Central New Mexico is adversely affect ed by a lack of cap acity access from ALM to a major commercial airline hub. Currently, ALM has no commercial air passenger services. Otero and Lincoln residents must e ither drive 90 miles to El Paso, TX or 210 miles to Albuquerque, NM to board a plane that w ill take them to an airport. A round trip drive to El Paso takes 4 hours and 8 hours fo r Albuquerque. Connecting flights from El Paso to Albuquerque are few or non-existent.

The airport is also in need of implementing a strategic marketing plan to promote both its proposed regional jet services to Dallas to the traveling publ ic and existing services in order to improve patronage at the airport.

III. Project Sponsor

The City of Alamogordo is the offi cial sponsor of this application.

6IV. Proposal

The City of Alamogordo is contributing a total of $243,050 for the proposed project: which includes $150,000 as cash match from local non-airport revenue fund sources, and $93,050 of in-kind services. Th e proposal consists of providing regional jet services nineteen (19) times per week, whereby flight s will be landing and departing three times a day except for Wednesday and Saturday when service will be accomplished twice daily. The air service will be direct non-stop f lights to and from the Dallas/Fort Worth International Airport (DFW) using 70 seat Em braer Regional Jets. All US DOT funds will be matched 35/65 - City to DOT - and used as a revenue guarantee to the air service provider to offset any financial shortfalls. Similarly, a marke ting plan will be carried out to promote the proposed air service to DFW a nd airport services being offered at ALM.

Initially, the City of Alamogor do will allocate all the cash - six hundred and six thousand nine hundred and fifty dollars ($606,950) - for the financial revenue guarantee. After ten (10) months of providing commercial air services, the City wi ll conduct a monthly financial assessment of the revenue guarantee e xpenses and decide if they want to agree with the air service provider's desire to add Phoenix as an additional destination. If so, excess funds will be used as a portion of a second revenue guarantee for the service to Phoenix. After another ten (10) month fina ncial assessment, any excess funds will be diverted to marketing and promotions prior to the end of the thre e-year grant period.

The City feels confident that once established, the regional jet service will become a successful, self-sustaining indus try. This is based on severa l factors, the three primary reasons being: an early 2 013 survey on passengers needs, a Spring 2013 study conducted by Boyd Group International and a Fall 2013 vis it by a representative of the interested major air carrier.

In February 2013 a market study was conducted to evaluate the area’s ability to support regional jet service. The 6-question surv ey was conducted in 31 organizations whose members well represented a cr oss section of the communit y. There were 699 responses that covered the flying habits of 2,722 indivi duals resulting in a sample size of 3.2% of the 85,000 population. The data was analyzed using 16 household income levels from the 2010 Census data then extrapolated to the population size of 85,000. The results show that there are about 120,000 enplanements per year, 4 times the 30,000 required to sustain and make the service profitable. In addition, about a third are for business travel and a tenth for international travel - the type of travel the airlines are most interested in due to the average cost of those tickets.

In the spring of 2013, Boyd Group International, a leader in aviation consulting, research and forecasting, was contracted by the City of Alamogordo to conduct an Air Service Feasibility Analysis. Their report, presen ted in May 2013, showed that Alamogordo was in a singularly unique position for a commun ity of its size. Alamogordo provides the essential characteristics highly desirable by American Airlines: a very large military presence resulting in high-yield military air line tickets. In addition, the German Air Force's presence at Holloman drives extensiv e high-yield internationa l travel to Europe by employees and family members. This repor t served as the catalyst for the later visit by American Airlines.

7In Septem ber 2013, the American Airlines ( AA) VP for Regional Je t service throughout North and Central America visited Alam ogordo. Over several days, he had the opportunity to meet with representatives fr om a wide variety of local communities and organizations. During this mix of private and public meetings, a number of critical points were learned:

 American Airlines' primary emphasis for establishing RJ service in Alamogordo is on military travelers. RJ service to a co mmunity of Alamogordo’s size and location would not be considered without it.

- Holloman AFB has traditionally had mo re than 11,000 airline travelers on official orders per year.

- Military fares are all refundable fare s which are higher than normal – the primary reason American is interested in this service.

- Although almost 85% of Holloman tic kets are eastward bound, the “City Pairs” contract will result in close to 100% of all official Holloman airline travel using ALM as the departure poin t, even when traveling to the west.

- Our estimate is that there are at least as many military travelers on official orders purchased from other locations with Holloman as the destination. These travelers will quickly learn ab out the ALM connection – even without any marketing – and begin using the ne w service in a short period of time.

 The secondary emphasis is on international travel, primarily by the members, dependents, family and friends of the Holloman based German Air Force (GAF).

- The GAF has a major presence at HAFB including Tornado Primary training, Tornado Weapons School and Headquarters for the GAF in the United States.

- Other significant GAF facilities in the USA that fall under the HAFB GAF and are visited on a regular basis include:

- Primary flight screening program at Goodyear, AZ

- Undergraduate Pilot Training at Sheppard AFB, TX

- Undergraduate Navigator Traini ng at Corpus Christie, TX

- Air Defense School at Ft Sill, OK

- Every active duty GAF member, each cont ractor and all of their dependents are paid for one round trip back to Germany per year.

- The majority of Germans in Alamogor do have frequent visitors from Germany during their stay in Alamogordo.

 The American Airlines representative felt that service should consist of a newer model 70 passenger RJ three times a day (possibly only two on Wednesday and Saturday) to Dallas. In a ddition, he felt the market was significant enough to also have the same type of service to the AA hub in Phoenix. However, the City of Alamogordo would like to delay the Phoeni x connection until the Dallas service is well established and proves economically sustainable.

- The larger RJ aircraft includes a First Class sectio n that the AA representative felt would be well used in this location.

- Although larger than planned, the 70 s eat aircraft operational costs are comparable to the smaller, older model RJs.

8- Hollom an’s new mission of F-16 training fa lls under the cont rol of Luke AFB near Phoenix, AZ. For that reason, th e military traffic between Alamogordo and Phoenix will build to significant numbers over the next couple years as the F-16 training builds to its full planned size.

 Several important points were learned about the cost of the tickets which will have major positive effects on potential cust omers using RJ service from Alamogordo.

- There will be no additional charge for th e connection. The ticket price from ALM to DFW will be comparable to the price from El Paso to DFW.

- The price of domestic airline travel be tween American Airlines and Southwest Airlines should be roughly equivalent and improving in American’s favor as Southwest’s business model changes over the next few years.

- American will have international connections from Alamogordo while Southwest from El Paso will offer primarily domestic with some Caribbean connections.

The American Airlines represen tative left the C ity with two concerns about setting up new RJ service at Alamogordo: the merger and lack of pilots . In September 2013, American Airlines and US Airways were in the middle of their merger. Unexpectedly, they were sued in mid-August by the DOJ and the future was unclear. Since that time, the suit has been settled, the merger has b een completed and the New American Airlines is operating. The second concern is still not solved. At the beginning of August 2013, the FAA issued a new requirement that incr eased the required flight time for a newly hired co-pilot in the right seat of an RJ from 250 to 1500 hours. This has had a devastating effect on the entire commercial airl ine industry. In a time when an increasing number of Viet Nam era pilots are reaching the mandatory 65 year retirement age, there is no way of replacing them due to the new 1500 hour requirement. It has resulted in an increasing number of cancellations of flights and aircraft parked on the tarmac. Although this is the issue that is delaying furthe r action on RJ service at Alamogordo, it is a problem on the national level and can't be contro lled or influenced from the local level. However, due to the severity of this issue to the commercial airlin e industry, we expect a resolution to the issue before the end of the year and have modified our schedule appropriately.

V. Community Profile

The targeted service area for this proposal is the Otero-Lincoln counties in the SouthCentral section of the state of New Mexi co, which has a combined population of 86,350 (U.S. Census: 2012). Economically, this region consists primarily on a service and retail based economy. The service and retail industr y in this region is supported traditionally by a strong military-based industry driven by both active-duty and retired military personnel. In addition, it attracts its customers from tourists drawn to its magnificent natural sites and rich Western and Southwestern New Mexican history.

9Otero County

Otero County, with a population of 66,041, has three municipalities: the City of Alam ogordo (county seat), the Village of Cloudc roft, and the Village of Tularosa; and the Mescalero Apache Indian Reservation that relies heavily on the service and retail industry. The City of Alamogordo (populati on 31,300, U.S. Census 201 2), which acts as the economic center and county seat of Oter o County, is a significant component to the economic drive of the region and one of the key places where the service and retail based industry for the region has coalesced.

Otero’s military-based industry is an importa nt economic contributor to service retail. Otero County is home to the U.S. Holloman Air Force Base (including a German Air Force Base Tactical Training Center), a nd a number of White Sands Missile Range (WSMR) tests sights. It is estimated that the U.S. Holloman Air Force Base provides support to more than 17,000 military and civili an personnel. The base objective is to defend national security and provides combat -ready military personnel, F-16 Falcon jet fighter training, and MQ-1 Predator and MQ-9 Reaper training for pilots and sensor operators to fulfill such objective. The WSMR, in contrast, is the U.S. Army's largest range, dedicated primarily to testing by all military services but also hosting significant training of which a portion of the site is w ithin the Otero County. Mi litary and civilian personnel frequently conduct military test firing operations. These active-duty personnel and their families contribute to the local economy while in the area and many retired military personnel, after experiencing the area, opt to make it their home. In addition to the civilian business community, the presence of the U.S. Air Force and the German Air Force contributes significantly to the need for regional jet service from the AlamogordoWhite Sands Regional Airport.

In addition to the military industry, RJ serv ice will support regional annual events that contribute to the local tourism industry, incl uding: the Balloon Fes tival, the Cottonwood Festival, the Earth Day Celebr ations, Southern New Mexico Wine Festivals, the Otero County Fair, and the October Fest – Hollo man Air Force Base Air Show and other military activities assist to further contribute to the regi onal service and retail industry. Additionally, the Village of Cloudcroft draw s tourists throughout the region with the Lodge Resort and Spa and events such as the May Fair, July Jamboree, Lumberjack Day, the October Art Fest, and Marti Gras. The Village of Tularosa attracts tourist with its annual Rose Festival that includes a Rose Quee n, arts and crafts, the Fiesta of St. Francis de Paula, and for Christmas Eve luminarias line the church plaza. The Mescalero Apache’s rich culture and history, native craf ts, jewelry, and the Inn of the Mountain Gods Casino and four-star hotel, and Ski Apach e ski area is a major attraction, drawing tourists from all over the United States and as far south as Chihua hua, Mexico. Finally, the Village of Ruidoso draws a very large num ber of tourists and vacation home owners based on their cool mountain climate, Ru idoso Downs horse ra cing and neighboring Mescalero reservation recreati onal activities. The beginning of Space Tourism flights out of Spaceport America, projecte d to begin either in late 2014 or in 2015, may bring unimaginable levels of tourism to the region. Although Spaceport America is located more than two hours away, the Alamogordo area is in the center of the projected space

10tourism sites due to its close association with the first launches of the initial space program after World War II. The New Mexi co Museum of Space History's location in Alamogordo is due to that critical phase in the development of manned space flight.

The City of Alamogordo alone has over 1,900 re gistered businesses. Tourist attractions, such as the New Mexico Museum of Sp ace History, and the Clyde W. Tombaugh Planetarium and Omnimax Theater, and the Alameda Park Zoo have become iconic destination columns and economic engines for the city. Businesses such as: 1st National Bank, Caldwell Banker, Bank 34, Western Ba nking, Desert Sun, Vision Ford, Lowes, Desert Lakes Golf Course, franchise, restaurant s, hotels, retails stor es, churches of many denominations and RV camp grounds are part of the economic mix. Also, a significant contributor to Alamogordo’s economy is its edu cation institutions facilities, such as its public school system, the New Mexico School fo r the Blind and Visually Impaired, and a branch of New Mexico State University. Pr esent are other federal, state, and local government entities, such as: U.S. Border Patr ol, the US Forest Service, the NM National Guard, the Otero County building a nd the Alamogordo City Hall.

Another of Otero County’s at tributes is its natural attractions of national and state significance. Places such as: White Sands National Monument, Lincoln National Forest, the Sacramento Mountains, and the Oliver Lee State Park ar e frequented tourist attractions. Considered one of the worl d’s greatest natural wonders, White Sands National Monument, is 275 square miles of natural white gypsum sand dunes in the middle of the New Mexican desert that has crea ted an ecosystem of its own, attracts over 450,000 tourists a year. The Lincoln National Forest, which consists of over a million acres that stretches over four different count ies and is known as the birth place to the world-famous Smokey Bear, attracts thousands of tourists who co me to enjoy the camp grounds, avoid the harsh heat of the Chihua huan Desert or simply enjoy its natural wonders. In turn, the Oliver Lee Memorial State Park was an early Apache stronghold located in the Sacramento M ountains that is known for its quiet green oasis where water flows year round in Dog Canyon.

Lincoln County

Lincoln County’s service and retail based economy stems largely from its superb natural wonders, and rich historical sites. Although Carrizozo is the county seat, the largest community in the county is Ruidoso, with 8,029. Other towns in the county include Ruidoso Downs, Capitan, and Corona, and communities such as Alto, Ancho, Lincoln, Nogal, White Oats, and Robsart. Ruidoso is known as a tourist destination as it lies within the Lincoln National Forest and is home of the Ruidoso Downs Racetrack and Casino, and Grindstone Lake. Lincoln Count y has similar amenities as the City of Alamogordo in the retail sector while the service sector is geared more towards catering to the tourism industry due to the Apache Ski Resort and camp grounds , as well as other popular visitor destinations.

11VI. Air Service History

As indicated, Alamogordo-White Sands Regional Airport ha s had a long tradition of providing commercial service to the Otero-Lincoln region. Commercial ai rlines such as; Continental Airlines (1958- 1962), Frontier Airlines (1962- 1979), Volare Air Charter (2001-2004), Rio Grande Airlines (2003-2004) , Westward Airways (2005), and Mesa Airlines (2006-2008) provided commercial air services using ALM. The latest, commercial airline, New Mexico Airlines – Pacific Wings, began commercial air service in October 2008. They made two departure fights a day to Albuquerque and one arrival flight seven days a week. These services were provided under the Essential Air Service (EAS) program, and became unavailable in April 2012, when funding was eliminated. The critical limiting factor with the EAS service was that th e flights did not provide for the customer's primary need – flight to a ma jor airline hub where they could connect with nationwide or internatio nal flights. This point cannot be over-emphasized! The major air carrier who has expressed a ve ry strong desire in establis hing RJ service at ALM is primarily motivated to do so due to the ve ry large number of o fficial military air travelers. Yet, during the over three decad es of EAS provided service at ALM, the military had almost no use of the EAS flights!

After the airlines were deregulated in the late 70s, the major air carriers gradually transitioned from a point-to- point to a hub based system. Yet the various local EAS service providers didn't respond resulting in a dwindling number of passengers while the actual local demand for airline service increas ed dramatically. The transition from ESA service to regional jet service direct to a hub will provide a sustainable business model by appealing to a large base of air travelers with a wide range of needs. We expect that this service will not require long te rm subsidies to be successful.

VII. Material Benefits/Market Analysis

Providing commercial air serv ices to and from Dallas/Fort Worth, TX through the Alamogordo-White Sands Regional Airport, will allow a new market to easily access the Otero-Lincoln region and will afford a broa d segment of the locally based traveling public direct commercial air service. Given the military industry in the region, military personnel and contractors will be able to use the Alamogordo-White Sands Regional Airport to travel to the Dallas/Fort Wort h, TX International Airport and board other national and internatio nal connecting flights. Similarly, business members in the community, as well as those throughout the nation and abroad, will now have direct access to and from the Alamogordo-White Sand s Regional Airport, reducing travel time and ground travel cost. Educati onal institutions both at the st ate and local levels, as well as employees of local, state, and federal governmental units will also stand to benefit when they are required to travel to fu lfill their duties and re sponsibilities.

Members of the general public and touris ts will now have the option to use the Alamogordo-White Sands Regional Airport. Th is option will allow the public convenient travel times, help obviate the need to drive long distance, reduce tr avel cost, and have direct access to other destinations. For communities in the Otero-Lincoln region, a commercial air service from the Alamogordo air port will mean increased job creation that

12stem s not only as a result to the new air serv ices, but from the air travel and community access. This will allow communities to pr omote the Otero-Lincoln region to new markets, and will most likely result in an increa se in service and retail sales, such as in the hotel and restaurant industry.

The Alamogordo-White Sands Regional Airport Ma ster Plan is in the process of being updated. AS part of the upda te, an Air Service Feasibil ity Study was c onducted by the Boyd Group International. The study conclu ded that it is estimated that the ALM extended service area generates approximately 45,000 annual enplanements, or passenger boardings. Of the estimated 45,000 annual e nplanements, a large percentage are high yielding military traffic and international tra ffic due to the presence of the German Air Force Tactical Training Center in Alamogordo. It is estimated that ALM would achieve approximately a 74% load factor with two daily flights on 50 seat regional jets to DFW, but could be higher given the levels of military traffic that the region experiences. Although the load factor would be less with a 70 seat regional jet, American Airlines prefers to fly this size of aircraft due to th e fact that the operational costs are similar and there is a market for first class seating.

XIII. Program Goals:

1. Create a self-sustaining ai r service program to and from Dallas/Fort Worth, TX by providing a minimum financial guarantee of up to $606,950 to the air service provider for any pot ential revenue shortfalls.

2. Provide a marketing program, with any prior year allocated unspent guarantee funds, that suppor ts the new air service, w ith initiatives targeted o the local Otero–Lincoln Counties and the Dallas/Fort Worth area by:

a. Attracting the public with the convenience of using the Alamogordo Regional Airport, targeting passengers who are using the more distant El Paso and Albuquerque Airports.

b. Promoting economic growth in the ar ea by demonstrating th at the City can support more travel and tourism through the benefit of regi onal jet service.

XIV. Program Timeline:

The City of Alamogordo is ready to implement the plan as soon the gr ant agreement is in place. The project has the support of our U. S. Congressional delegation, the New Mexico Governor, as well as regional, and community support. The marketing plan will start immediately and air services can begin by April 2016. By the time the US DOT announces the grant awards, the City of Alam ogordo will have appr oved an air service contract agreement. Once the grant agreement is in place, the City of Alamogordo will complete the project within no later than three (3) years.

13Date Activity

________________________________________________________________________ Aug 2015 - Finalize Request for Proposal (RFP) document Sep 2015 - Publish RFP
Oct 2015 - Select Air Servi ce Carrier & Draft Agreement
Oct 2015 - Approve Contract between City & Air Carrier Oct 2014 – Mar 2016 - Make provisi ons for Part 139 Cert, TSA ops, etc
Nov 2015 - Implement the Marke ting Plan using local in-kind Apr 2016 - Begin RJ Operations
Jan 2017 - Implement Phase II of the Marketing Plan
Oct 2017 - End of three-year grant

________________________________________________________________________

XV. Funding/Budget:

Funding:

Federal Share: $456,950 Local Direct Cash: $150,000 Local In-Kind: $93,050

____________________________________________ Total Project Costs: $700,000

The City of Alamogordo will commit a comb ined total of $243,050 of both direct cash and in-kind services and is requesting the assistance of U.S. DOT of $456,950 to complete the project.

Budget

Financial Guarantee/Marketing $606,950 Marketing/Promotions (Local In-Kind $93,050

______________________________________________ Total Project Costs: $700,000

The proposed project will fund a financia l guarantee of up to $606,950 for any potential
revenue shortfalls to the air service provider for services to and from Dallas/ Fort Worth, TX. After ten (10) months of air servic es, the City of Alamogordo will conduct a financial assessment to determine if and how much funds will be transferred to the marketing and promotion component of the project. The funds for marketing and promotion will then be used consistently with the marketing plan.

14In-Kind

Alam ogordo will be contributing $93,050 as in -kind contribution fo r the proposal. The $93,050 is derived from city employees who will be part of a marketing team.

Employee: % of Annual Hours Years Total 1. Airport Manager 30% 3 $64,931 2. Public Information Officer 5% 3 $ 7,177 3. Community Service Exec. Assist. & Film Liaison 10% 3 $ 13,594 4. Grants Coordinator 5% 3 $ 7,348
Total In-Kind Contribution $93,050

The marketing team will be responsible for implementing the marketing plan and consist of the Airport Manager, Public Informa tion Officer, and the Community Services Executive & Film Liaison. In addition, an addition amount is included to account for the monitoring of the grant by the Grants Coordinator.

XVI. Monitoring Program:

The monitoring program consists of providing quarterly updates to the U.S. DOT of the marketing plan and the financial guarantee, proof of advertising, paid invoices and an outline of services rendered during this peri od. Booking performance dates will be traced weekly with monthly financial reports.

XVII. Marketing Plan Outline

Current Status:

The City of Alamogordo is in the process of publishing a Re quest for Proposals (RFP) to solicit carriers interested in providing services to and from the Dallas/Fort Worth, TX metropolitan area using the Alamogordo-White Sands Regional Airport. It is anticipated that the selected air service carrier will be using a 70 passenger Embraer Regional Jet to provide services. The service will operate nine teen (19) times a week with three flights per day except Wednesday and Saturday when flights may be decreased to two daily.

Targeted Market:

The Marketing plan focuses on two market areas: the Otero-Lincoln County area and the Dallas-Fort Worth, Texas area, with the idea of eventually expanding to other potential markets. The primary market objective is to focus on the Otero-Lincoln County to establish the air service market base. This marketing plan targets four local retail markets: military (military personnel and fa mily members), local leisure travelers, tourists and visitors, and business and government travelers (to include military contractors). The marketing strategic plan aims to cross communicate the Fly White Sands-Alamogordo message using a broad marke ting approach that incorporates retail advertising, sales and promotions, community s ponsorship, and public relations to target

15the specified m arkets. Businesses, govern ment and non-profit organizations will be targeted using established communication channels via the chamber of commerce, trade and professional organizations, a nd other community organizations.

The second market target is in the Dallas- Fort Worth business and leisure community. The marketing team, with the assistance of the Chamber of Commerce will develop relationships with the travel industry organizations, busines s, clubs, trade associations, media associations, and Chamber of Comm erce in the Dallas-Fort Worth area.

Finally, if funding permits, the marketing plan will also target other market areas such as the City of Las Cruces, NM, Truth or Cons equences business and leisure communities aware of the Fly White Sands-Alamogordo air service.

Marketing Organizational Structure

The City of Alamogordo has a marketing team that consists of: the airport manager, the City of Alamogordo public information officer , the administrative a ssistant-film liaison, and other members of a coalition in the Ot ero-Lincoln County area to implement the marketing plan. The marketing team will be responsible for implementing the marketing plan consistent with the actual funding availability.

Marketing Details

The marketing plan is designed to follow a four (4) tier marketing and promotional structure that takes into account both funding availability and targeted markets. Each market will be assessed separately by the ma rketing team using this system. Each tier outlines specific marketing and promotional act ivities that are compatible in cost, with the least expensive in tier one and the most expensive in tier four. The tier system allows for tasks to be prioritized acco rding to funding availability.

The marketing team will begin by implementing Tier One of the marketing plan immediately after the grant agreement is a pproved. Activities in Tier One can begin quickly, since this piece of the project is being funded directly through a local in-kind contribution. Once Tier One begins, it is perceived that these activities will continue after the grant agreement expire s as long as the air service ca rrier is providing services.

Phase II of the marketing plan will start af ter the ten (10) month financial assessment, when the marketing team will reassess their approach based on the program’s funding availability for marketing and promotions. Using the 4 tier structure the team will implement marketing based on priority tasks, according to the available funds. If marketing funding is non-existent, given that the guarantee will require the entire grant amount and local cash match, the marketing team will continue to perform the activities in Tier One. If funding is limited af ter conducting the financial assessment, the marketing team will evaluate its options in Tier Two and engage in activities to meet the marketing plan objective with the available funding. The more marketing funding that is available, if few or no funds were spent in the financial guarantee, the broader the marketing team will expand their efforts, using the same market strategy for targeting additional markets but moving up the Tiers.

1617 1. Tier One – Public Relations & Community Outreach: General Market -

a. Official Kick-Off & Press Conference. b. Press Releases.

c. Utility Billing Notices. d. Email distribution list

e. Mailer – City Bulletin. f. Include Air Service in City Website. i. Fly White Sands-Alamogordo (WSA) Air Service message and logo in City Website. ii. Include directions to airpor t (or map) & airport location. iii. Specify details of air service available at White Sands-Alamogordo Airport (WSA). iv. Create links to Fly White Sands-Alamogordo homepage.

g. Facebook Campaign h. Add Fly White Sands-Alamogordo me ssage to phone hold messages. Market Specific - i. Targeted Community Outreach and Public Relations – Attend and present to targeted organizations, such as: Ch ambers of Commerce, business groups, civic groups( Rotary Clubs, Elks Club, the Sertoma Club, etc), j. Development of a trade and consumer email database to send messages to a targeted group of air service supporters and consumers.

2. Tier Two – Advertising A – Local Markets (Otero-Lincoln Counties / Dallas Fort Worth)

a. Produce professional promotional brochures and distribute to guest at checkin and concierge desks b. Banners at special events

c. Tabletop collateral at guest rooms, front desk, and in restaurants. d. Affix Fly White Sands-Alamogordo s ticker to envelops or mailings

e. Radio f. Newspaper

g. Billboards h. Arrange for travel agencies to promote and support service

3. Tier Three – Advertising B – Local Markets (Otero-Lincoln Counties / Dallas Fort Worth)

a. Televis ion Commercials b. Websites & E-media

4. Tier Four – Outside Markets

a. Radio b. Newspaper

c. Billboards d. Television Commercials

e. Websites & E-media