## 1 APPLICATION UNDER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST

- 201 3

- 0120

SUMMARY INFORMATION

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

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

http://www.dot.gov/policy/aviation

- policy/small

- community

- rural

- air

- service/SCA SDP

A. P ROVIDE THE LEGAL SPO NSOR AND ITS DUN AND BRADSTREET 

## (D&B) DATA UNIVERSAL

NUMBERING SYSTEM 

## (DUNS) NUMBER 

## , INCLUDING 

## +4, EMPLOYEE IDENTIFICAT ION NUMBER 

## (EIN) OR TAX ID



## . Legal Sponsor Name: City of Klamath Falls, Oregon

DUNS Number: 01

- 074

- 3300

EIN/Tax ID: 93

- 6002195

B. L IST THE 

## N AME OF THE COMMUNITY OR CONSORTIUM OF COM MUNITIES APPLYING 

## :
1. K LAMATH 

## F ALLS 

## , O REGON



## 2.

3.

4.

C. P ROVIDE THE FULL AIRP ORT NAME AND 

## 3

- L ETTER 

## IATA A IRPORT 

## C ODE FOR THE

APPLICANT 

## ( S 

## ) AIRPORT 

## ( S 

## ) (O NLY PROVIDE CODES FO R THE AIRPORT 

## ( S 

## ) THAT ARE ACTUALLY

SEEKING SERVICE 

## ).

1. Klamath Falls Airport ( LMT ) 2.

3. 4.

## 2 D. L IST THE 

## 2

- DIGIT CONGRESSIONAL DISTRICT CODE APPLIC ABLE TO THE SPONSORI NG

ORGANIZATION 

## , AND IF A CONSORTIUM 

## , TO EACH PARTICIPATIN G COMMUNITY



## . 1. OR

- 02 2.

E. A PPLICANT 

## I NFORMATION 

## : (C HECK 

## A LL 

## T HAT 

## A PPLY 

## )

Not a Consortium Interstate Consortium Intrastate Consortium
Community now receives subsidized Essential Air Service
Community (or Consortium member) previously received a Small Community Air Service Development Program Grant

If previous recipient: Year of grant(s): 2007

F. P UBLIC 

## /P RIVATE 

## P ARTNERSHIPS 

## : (L IST 

## O RGANIZATION NAMES 

## )

PUBLIC PRIVATE

1. City of Klamath Falls, OR 1. D iscover Klamath

2. 2. Klamath County Chamber of Commerce

3. 3.

4. 4.

5. 5.

G. P ROJECT 

## P ROPOSAL 

## : ( CHECK ALL THAT APPLY 

## ) Marketing Upgrade Aircraft New Route

Travel Bank Service Restoration Subsidy Surface Transportation Regional Service Revenue Guarantee

Launch New Carrier Start

- up Cost Offset First Service Study Secure Additional Service Other (explain below)

H. E XISTING 

## L ANDING 

## A IDS AT 

## L OCAL 

## A IRPORT 

## :
Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify : )

## 3 I. P ROJECT 

## C OST 

## : D O NOT ENTER TEXT IN SHADED AREA



## L INE 

## D ESCRIPTION 

## S UB 

## T OTAL 

## T OTAL 

## A MOUNT



## 1 Federal amount requested $ 135 ,000

2 State cash financial contribution $0
Local cash financial contribution

3a Airport cash funds $ 0

3b Non

- airport cash funds $ 2 0 ,000

3 Total local cash funds ( 3a + 3b ) $ 20,000

4 TOTAL CASH FUNDING ( 1+2+3 ) $ 155 ,000

In

- Kind contribution

5a Airport In

- Kind contribution** $ 0

5b Other In

- Kind contribution** $ 2 0,000

5 TOTAL IN

- KIND CONTRIBUTION
( 5a + 5b ) $ 20,000

6 TOTAL PROJECT COST ( 4+5 ) $ 175 ,00 0

J. IN

- KIND CONTRIBUTIONS**
For funds in lines 5a (Airport In

- Kind contribution) and 5b (Other In

- Kind contribution), please describe the source(s) of fund(s) and the value ($) of each.

5a: N/A
5b: Marketing

## 4 K. I S 

## T HIS 

## A PPLICATION 

## S UBJECT 

## T O 

## R EVIEW 

## B Y 

## S TATE 

## U NDER 

## E XECUTIVE 

## O RDER 

## 12372

P ROCESS 

## ?

a. This application was made available to the state under the Executive Order 12372
Process for review on (date) _____________.

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

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

L. I S 

## T HE 

## A PPLICANT 

## D ELINQUENT 

## O N 

## A NY 

## F EDERAL 

## D EBT 

## ? (I F 

## “Y ES 

## ”, P ROVIDE



## E XPLANATION 

## )

No Yes (explain)

______________________________________________________________________________

______________________________________________________________________________

# Application Under the Small Community Air Service Development Program

Docket DOT-OST-2013-0120



# Klamath Falls Airport Klamath Falls, OR

Contact: John Longley Airport Director Klamath Falls Airport 6775 Arnold Avenue Klamath Falls, OR 97603

Phone: (541) 883-5372 Email: jlongley@flykfalls.com

# T ABLE OF 

# C ONTENTS

A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM K LAMATH F ALLS A IRPORT Prepared by 

### Page Page

Application Highlights .................................. 1

Air Service Issues ............................................... 1 Strategic Plan ...................................................... 1 Community Cost Contribution ............................. 1
Public-Private Partnership................................... 2
Material B enefits ................................................. 2 Ability to Implement Project ................................. 2



### Air Service Environment .............................. 3 Remote Airport Ca tchment Area ......................... 3 Proximity to Alte rnate Air port .............................. 4
Business Comm unity .......................................... 4
Educational and Governme nt Institutions ........... 5
Tourism ............................................................... 5 

### Air Service – Existing/Historical .................. 6
Existing Air Service ............................................. 6
Historical Ai r Service ........................................... 6
Past Air Service De velopment Efforts ................. 7



### Air Service Needs and Deficiencies ............ 8
Declining Air Service ........................................... 8 Market Profitability a Concern ............................. 8
Underserved Market with High Diversion ............ 9 High Airfar es ..................................................... 10 

### Strategic Plan .............................................. 11 Project G oals .................................................... 11
Public-Private Partnersh ip................................. 11 Proposed Pl an .................................................. 11 Marketing Obje ctives ................................. 12 Marketing Me ssage ................................... 12 Target A udience ........................................ 12 Marketing Plan ........................................... 12 Marketing Research Plan Overview ........... 13 Tactics/Implem entation .............................. 13 Marketing Bu dget ....................................... 14 Campaign Ti ming ....................................... 14 Program Me trics ........................................ 14 Strategic Plan Funding ...................................... 14 Project Continuation an d Sustaina bility ............. 15 Previous Grant Recipient - New Project and
Goals ................................................................ 15 

### Schedule and Monitoring ........................... 16

Critical Miles tones ............................................. 16 Monitoring Pr ogram .......................................... 16 

### Appendix A Letters of Support................. 17A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 1 K LAMATH F ALLS A IRPORT 

# S ECTION 

# 1

A PPLICATION 

# H IGHLIGHTS

This Small Community Air Service Development Program (SCASDP) grant application for KlamathFalls Airport (LMT) meets the criteria of Docket DOTOST-2013-0120. The City of Klamath Falls is requesting $135,000 in federal assistance to implement a $175,000 marketing campaign to support SkyWest Airlines’ existing Klamath Falls service.



### A IR 

### S ERVICE 

### I SSUES

Because of its isolated location in southern Oregon, air service is extremely important to the Klamath Basin. SkyWest Airlines is the sole service provider with one daily roundtrip to Portland and San Francisco, operated with the 30-seat Embraer Brasilia turboprop aircraft but is struggling to maintain
the service.

Since Horizon Air pulled out of the market in 2008 and SkyWest reduced service to one flight per day to Portland and San Francisco, the number of available seats has declined 50 percent within the last five years. Compared to markets of similar size across the Northwest, the Klamath Basin is significantly underserved and overpriced.

Because of the service degradation and high airfares, an estimated 53 percent of air travelers opt to drive to an alternate airport often choosing Medford, Reno or
Portland for air service . Given southern Oregon’s geography and climate during the winter months, driving to alternate airports can take an excessively long time in bad conditions and be a major safety
hazard. The lack of convenient access to and from the Klamath Basin hinders commerce and impedes economic vitality in the community.

Recently, SkyWest representatives indicated that poor load factor performance and increasing costs have led to the LMT market being unprofitable and potentially unsustainable without an improvement in ridership. 

### S TRATEGIC 

### P LAN

Immediate action is needed to increase load factors and bring SkyWest back to profitability in the LMT
market. Without immediate action the Klamath Basin is in danger of losing access to the national air transportation system.

The Strategic Plan to increase SkyWest’s load factors is to implement a comprehensive marketing campaign to generate awareness and as sociation that LMT is
the home of Crater Lake Na tional Park, and thereby capture more inbound air traffic. A unique brand identify, “Crater Lake-Klamath Connection”, will be established through this marketing campaign. The plan is contingent on getting the marketing funds through this SCASDP to complete it.

SkyWest Airlines supports the Strategic Plan outlined herein and has provided a letter of support for the City of Klamath Falls’ application ( Appendix A ).



### C OMMUNITY 

### C OST 

### C ONTRIBUTION

To support this air service initiative, non-airport revenue sources will fund 23 percent ($20,000 cash

This section addresses:



###  Project goals



###  Description of the Strategic Plan



###  Highlights of the grant application

# S ECTION 

# 1

A PPLICATION 

# H IGHLIGHTS

A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 2 K LAMATH F ALLS A IRPORT and $20,000 in-kind) of the proposed $175,000 Strategic Plan. This is a strong commitment by the Klamath Falls community to support SkyWest.



### P UBLIC 

### -P RIVATE 

### P ARTNERSHIP

The City of Klamath Falls, Discover Klamath, and the Klamath County Chamber of Commerce have formed a public-private partnership in support of this application. This is a long standing partnership founded in 2010. It was created as a top priority of the Klamath County Chamber of Commerce to support air service at LMT. In addition, eight entities have provided financial assistance in support of this application.



### M ATERIAL 

### B ENEFITS

Commercial air service at LMT benefits a broad section of the traveling public including businesses, educational institutions, military, healthcare providers and leisure travelers. LMT serves a local population in excess of 82,000, not includ ing the growing number of
inbound leisure travelers. The Klamath Basin includes a vibrant business community such as JELD-WEN, Inc., the military through the 173 rd Fighter Wing of the Oregon Air National Guard, educational institutions such as the Oregon Instit ute of Technology and the Klamath Community College, and healthcare facilities such as Sky Lakes Medical Center and the Sanford Pediatric Clinic, a regional healthcare provider.

The Klamath Basin and the surrounding area have many scenic attractions that attract thousands of visitors each year including Crater Lake National Park, Klamath Lake Migratory Bird Flyway, Lava Beds National Monument and the Running Y Ranch Resort. Many of these inbound leisure travelers benefit from
access to local air service and help drive the local tourism industry. Clearly, LMT air service is highly valued by the community and will meet the goals of the SCASDP to benefit air travelers by helping to
sustain air service at LMT and access to the national air transportation system. 

### A BILITY TO 

### I MPLEMENT 

### P ROJECT

The air service partnership listed above, and other
local businesses in the Klam ath Basin, fully support this plan and have the ability to implement this project as proposed. Key members of the air service partnership have been particularly active since Horizon Air left the market and have developed a good working relationship with the management of SkyWest. The air service partnership has met regularly with SkyWest management and the relevant local transportation authorities over the past few years to discuss proposed changes in air service or
make recommendations.

Staffing and funding for the proposed plan has been committed by all private and public partners. In addition, management at SkyWest supports the proposed plan. The Klamath Falls community has a strong desire and a population base to support the air service initiative. In short, all of the pieces are in place to implement the proposed plan.A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 3 K LAMATH F ALLS A IRPORT 

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# S ERVICE 

# E NVIRONMENT

To identify community air service needs, it is important to understand the characteristics of the community. The Klamath Basin is a remote region with declining air service access and few air service options remaining. Air service is critical to this isolated community. This section shows the broad segment of the traveling public, including businesses, educational institutions, military and ot her enterprises that benefit
from local air service.



### R EMOTE 

### A IRPORT 

### C ATCHMENT 

### A REA

The Klamath Basin is loca ted in south-central Oregon approximately 15 miles north of the Oregon/California border. It is situated on the eastern slopes of the Cascade Mountains and the southern shore of Upper
Klamath Lake.

Commercial air service at LMT has far reaching benefits to a population that is secluded from major population centers. LMT serves a large geographic area with a growing populat ion. The LMT catchment area (identified in blue in Exhibit 2.1 ) encompasses Klamath and Lake Counties in Oregon and portions of Modoc and Siskiyou counties in California. LMT serves the City of Klamath Falls, Oregon, as well as multiple cities in northern California and rural areas in both states. More than 82,000 people reside in the
LMT catchment area. Wit hin a 50-mile radius the population increases to almost 90,000.

This section addresses: Description of the Klamath Falls community in
relation to air service to demonstrate the benefit of the Strategic Plan to a broad segment of the traveling public.

EXHIBIT 2.1 LMT CATCHMENT AREA

Note: LMT catchment area identified in blue by zip code.

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# E NVIRONMENT

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### P ROXIMITY TO 

### A LTERNATE 

### A IRPORT

The Klamath Basin is an isolated community, having access to the Oregon state highway system but no interstate that passes through it. As a result, local access to the national air transportation system has more importance as a mode of transportation.

Based on a study of passenger retention, 53 percent
of LMT catchment area air travelers drive to an alternate airport to access air service. Twenty-six percent use Medford’s Rogue Valley International Airport (a non-hub airport), 78 miles west, and nine percent drive 290 miles north to use Portland International Airport (a medium hub airport nearly five hours away). The nearest large hub airport is 366
miles to the south. Table 2.1 provides drive miles, times, and airport hub size for alternate airports.

LMT catchment area travelers using alternate airports encounter road congestion, longer pre-boarding time requirements, and unsafe driving conditions in the
winter that increase travel time and potentially lead to delays and missed flights. The drive between Klamath Falls and Medford on Oregon Highway 140 is a major concern and safety issue in the winter with hazardous driving conditions in certain times of the year.



### B USINESS 

### C OMMUNITY

Local air service at LMT is valued by all sectors of the Klamath Basin, including government, business, education, healthcare, military and tourism. The region is becoming more economically diverse with many businesses and institutions reliant on air service for connections to customers, suppliers, consultants
and facilities located in other parts of the state or the country. Table 2.2 provides the top employers in
the Klamath Basin.

Historically, the region’s chief industries included manufacturing (generally associated with the timber trade), wood products, and agriculture. Manufacturers
and natural resource-related businesses in the area reliant on local air service include: JELD-WEN, Inc. (corporate headquarters, research and development, TABLE 2.2 TOP EMPLOYERS COMPANY/ ORGANIZATION PRODUCTS # OF EMPLOYEES Private Employers: JELD-WEN, Inc. Window, Doors 1,200 Sky Lakes Medical Center Medical Services 1,040

N.E.W. Customer Service Companies, Inc. Warranty Service 650

Columbia Plywood Hardwood, Plywood 430
Wal-Mart Super Center Retail Goods 400 Collins Products Particle Board, Hardwood 335 Sterling Savings Bank Banking 250 Public Employers: State Government Government 1,550 Local Government Government 1,430 Federal Government Government 870

Klamath County School District Educational Services 676

Klamath Falls School District Educational Services 421

Source: Herald & News (2010) TABLE 2.1 DRIVE TIME TO ALTERNATE AIRPORTS

AIRPORT MILES ESTIMATED DRIVE TIME HUB SIZE Medford (MFR) 78 1.4 hours Non-hub Redding (RDD) 148 2.3 hours Non-hub Redmond

(RDM) 153 2.7 hours Non-hub Eugene (EUG) 184 3.2 hours Small

Reno (RNO) 255 4.0 hours Medium Portland (PDX) 291 4.7 hours Medium San Francisco (SFO) 366 5.4 hours Large

Source: Microsoft MapPoint 2010

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# S ERVICE 

# E NVIRONMENT

A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 5 K LAMATH F ALLS A IRPORT millwork and window and door manufacturing) and Klamath Falls Biomass (renewable energy). In recent years, there has been an increase in business relocations to the area from other states, particularly high-tech businesses from California. This trend is likely to continue given Klamath Falls’ close proximity to California and Nevada. The healthcare industry is also growing in the Klamath Basin with the significant expansion of the Sky Lakes Medical Center which serves the healthcare needs of people in a 10,000 square mile area of Oregon and California,
and the Sanford Pediatric Cl inic. For all of these business sectors, maintaining local commercial air
service is critical.



### E DUCATIONAL AND 

### G OVERNMENT


### I NSTITUTIONS

In Klamath Falls, educat ional, non-profit and government entities benefit from local air service such as the Oregon Institute of Technology (Oregon Tech) and the Oregon Air National Guard. Oregon Tech, the Pacific Northwest’s only public institute of technology, has an enrollment of almost 4,000 annually. The university is home to the nation's first undergraduate program in renewable energy engineering, and todaythe school is working to become the first geothermally powered university in the country. Klamath Community College is also located in the area with over 2,000 full-time equivalent students enrolled.

The 173 rd Fighter Wing of the Oregon Air National Guard occupies 61 acres of leased land on LMT with 485 full-time personnel. A unit training drill is conducted once a month and results in a surge of up to 1,235 personnel, exclusive of personnel on temporary duty for formal training or any of a number of periodic air exercises. 

### T OURISM

LMT serves as the gateway to the nearly unlimited outdoor recreation opportunities offered by a pristine landscape of mountains, marshes, lakes, and the crown jewel of the Cascades, Crater Lake National Park. Crater Lake is 1,932 feet deep; the deepest lake in the US and the seventh deepest lake in the world.

Though resource gathering and manufacturing industries remain a vital part of the regional economy, over the last two decades, tourism has grown significantly and is the leading industry of the region. On a year-to-date basis (January through May 2013) the Klamath Basin’s lodging occupancy rates are up 17.3 percent (versus an over all increase at the state level of plus 5.1 percent) making the Klamath Basin
one of the hottest destinations in the state. However, stronger growth could have been achieved if the appropriate links with local commercial air service were in place. The Crater Lake-Klamath Connection campaign will achieve these results.

The Klamath Basin has a diversified economic base that includes a dynamic service industry. This is largely attributed to the extraordinary natural setting and the proximity of tourist attractions such as Crater Lake National Park, Lava Beds National Monument and the Running Y Ranch, a major destination resort just outside of Klamath Falls. Because of the area’s isolation and pristine beauty , the tourism industry is greatly dependent on maintaining air service access.A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 6 K LAMATH F ALLS A IRPORT 

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# S ERVICE



# – E XISTING 

# /H ISTORICAL

This section provides an overview of existing air service. Carriers providing se rvice, service frequency, nonstop destinations offered, and equipment types are included in the discussion. A summary of
historical air service is al so included. A description of air service development efforts concludes the section.



### E XISTING 

### A IR 

### S ERVICE

Currently, SkyWest Airlines (United Express) offers service to Portland International Airport and to San Francisco International Airport from LMT. The Portland and San Francisco services are operated with the 30-seat Embraer Brasilia 120 turboprop aircraft once daily. LMT had 14 weekly departures and 420 available seats in July 2013 ( Table 3.1 ), down significantly since 2009.

TABLE 3.1 EXISTING AIR SERVICE

NONSTOP DESTINATION CARRIER AIRCRAFT WEEKLY FLIGHTS WEEKLY SEATS
Portland, OR (PDX) United Express (SkyWest) EMB-120 7 210

San Francisco,

CA (SFO) United Express (SkyWest) EMB-120 7 210

Total 14 420 Source: Diio Mi, July 2013

While SkyWest has a codeshare with United Airlines at Portland and San Francisco to allow for connecting opportunities, SkyWest operates the LMT services on a pro-rate basis (i.e. at risk). This means that SkyWest ultimately decides the fate of the LMT service and must be profitable on the LMT segments to remain in the market. SkyWest has indicated that the LMT service is not currently profitable. There are currently no service changes scheduled through June 2014; however, if SkyWest does not return to profitability, LMT is at risk of losing access to the national air transportation system

. 

### H ISTORICAL 

### A IR 

### S ERVICE

From 1997 to 2008, Horizon was the exclusive provider of commercial air service at LMT with nonstop service to Portland, OR. In October 2008, due to a decision by Horizon to eliminate its fleet of 37-seat de Havilland Dash 8 Q200 turboprop aircraftand operate only the larger 76-seat Bombardier Q400, Horizon ceased serving LMT noting that airport use did not generate enough passengers in the market to fill the larger aircraft.

In July 2008, SkyWest began nonstop service to San Francisco, CA. By that October, SkyWest also began providing service between LMT and Portland with two nonstop flights per day after Horizon left the market.

Table 3.2 , next page, shows historical hub destinations and service providers over the past 10 years with the transition from Horizon to SkyWest service. Scheduled annual departures and seats are provided. With the partial overlap of the Horizon and SkyWest service in 2008, 2008 service levels almost reached the 10-year high provided in 2003. However, since then, the Portland se rvice was reduced to just one flight per day (October 2010) and in April 2012, SkyWest also reduced the San Francisco service to just one flight per day. This has resulted in a 10-year low in departures and seats in 2013, with seats

This section addresses:



###  Description of existing air service



###  Synopsis of historical air service



###  Description of air service development efforts

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# – E XISTING 

# /H ISTORICAL

A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 7 K LAMATH F ALLS A IRPORT declining 55 percent and departures declining 44 percent since 2003. In just the last five years, seats
and departures have decreased 50 percent.

Exhibit 3.1 provides a summary of annual seats and onboard passengers from 2003 through 2012.

EXHIBIT 3.1 HISTORICAL SEATS AND PASSENGERS

Source: Diio Mi

Over the 10-year period, outbound passengers (i.e. enplanements) at LMT have decreased by 44 percent, a slightly lesser amount than seats at a 55 percent decrease. From 2003 to 2007, outbound passengers remained near 30,000 with little change year to year. However, since 2008, passengers have declined to less than 16,000 during a time when tourism and business relocation were expanding. Of particular note is the percentage of originating passengers. In calendar ye ar 2012, 68 percent of passengers originated their trips at LMT. This is a high origination percentage fo r a market of this size indicating that inbound tr avelers are using alternative airports to reach the Klamath Basin. This shows an opportunity to try to capture those inbound passengers at LMT if a comprehensive marketing awareness campaign is initiated, such as the one proposed in the Strategic Plan with branding as
“Crater Lake-Klamath Connection”.



### P AST 

### A IR 

### S ERVICE 

### D EVELOPMENT 

### E FFORTS

For the past three years, management at LMT has been actively engaged in air service development. To understand the impact of air service on the market,
LMT studied its catchment area to quantify the level of demand and retention/diversion. In addition, LMT corresponds regularly with SkyWest to discuss existing service and performance. These discussions
are the reason behind submission of this SCASDP grant application as SkyWest has indicated concern over the performance of t he service. The community
needs financial assistance in order to conduct a comprehensive marketing campaign to retain SkyWest’s service in the LMT market. 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,0002003200420052006200720082009201020112012

Calendar year Passengers Seats 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Dept 1,300 1,128 1,034 1,150 828 Seats 48,166 41,802 38,258 42,550 30,636 Dept 162 728 636 365 366 365 Seats 4,860 21,840 19,080 10,950 10,980 10,950 Dept 349 728 729 728 457 365 Seats 10,470 21,840 21,870 21,840 13,710 10,950 1,300 1,128 1,034 1,150 1,339 1,456 1,365 1,093 823 730 48,166 41,802 38,258 42,550 45,966 43,680 40,950 32,790 24,690 21,900 TABLE 3.2 HISTORICAL HUB DESTINATIONS AND SERVICE PROVIDERS
SCHEDULED ANNUAL DEPARTURES/SEATS HUB AIRLINE ITEM

Annual seats
Source: Diio Mi Horizon Air

United Express

(SkyWest) Annual departures San Francisco,

CA (SFO) United Express (SkyWest) Portland, OR (PDX)A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 8 K LAMATH F ALLS A IRPORT 

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# N EEDS AND


# D EFICIENCIES

The Air Service Needs an d Deficiencies section identifies the impetus behind this SCASDP grant application. This section demonstrates the critical need for the Klamath Basin to take action to preserve the highly valued air service at LMT.



### D ECLINING 

### A IR 

### S ERVICE

Since 2008 LMT has had SkyWest Airlines nonstop service to Portland International Airport and San Francisco International Airport. Prior to SkyWest’s entrance in the market, Horizon Air was the only air service provider with service to Portland. When Horizon changed their fleet from the 37-seat Bombardier Q200 turbopro p aircraft to the 76-seat Bombardier Q400 aircraft small communities across the Northwest were impacted. While the larger aircraft provided more capacity per trip, market sizes necessitated the reduction in frequency and, in LMT’s case, cessation of service. Where LMT once had as many as five daily roundtrips and 1,160 seats, LMT now has only two roundtrips per day and 420 weekly seats ( Table 4.1 ).

The reduced departures and seats have deteriorated the quality of air service provided at LMT. When SkyWest reduced frequency to one roundtrip per day to Portland and San Francisco the community absorbed the loss of frequency although it impacted local businesses significantly. In a market with such limited air service, any reductions seriously impede the community’s access to the national air . LMT’s concern going forward transportation system is ensuring SkyWest’s profitability so that LMT service is not completely eliminated. This Strategic Plan is
crafted to address that concern.



### M ARKET 

### P ROFITABILITY A 

### C ONCERN

The reduction from two daily roundtrips to one was a result of SkyWest’s assessment of the LMT market performance. Prior to the reduction in San Francisco flights in April 2012, load factors averaged just 56 percent. To raise loads, the flights were reduced. As
shown in Table 4.2 , next page, the reduction to one daily roundtrip flight was effective in raising load factors. However, based on discussions with SkyWest, loads are still not adequate to meet their profitability targets. Conversely, while theSan Francisco loads improved year-overyear until March 2013, the LMT-Portland
load factors have decreased year-overyear in almost every month with a 12- month average decrease of seven percentage points. The Portland service is significantly under-performing. MON TUE WED THU FRI SAT SUN 2003 4 4 4 4 4 4 4 28 1,036 37
2004 4 4 4 4 4 3 4 27 999 37
2005 4 4 4 4 4 3 3 26 962 37
2006 3 3 3 3 3 2 3 20 740 37
2007 3 3 3 3 3 2 3 20 740 37 2008 5 5 5 5 5 4 5 34 1,160 34
2009 4 4 4 4 4 4 4 28 840 30
2010 4 4 4 4 4 4 4 28 840 30
2011 3 3 3 3 3 3 3 21 630 30
2012 2 2 2 2 2 2 2 14 420 30 TABLE 4.1 NONSTOP DAILY FLIGHTS

Source: Diio Mi AVG FLIGHTS PER DAY - JULY CALENDAR YEAR FLIGHTS/ WEEK SEATS/ WEEK SEATS/ DEPT This section addresses: Description of the Klamath Basin’s air service
needs and deficiencies.

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# D EFICIENCIES

A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 9 K LAMATH F ALLS A IRPORT TABLE 4.2 AVERAGE LOAD FACTOR BY MONTH

MONTH PDX SFO LOAD FACTOR % YOY CHANGE

% PT LOAD FACTOR % YOY CHANGE

% PT Apr-12 59 (9) 74 29 May-12 67 (0) 67 18 Jun-12 66 (10) 74 18 Jul-12 59 (14) 71 10 Aug-12 64 (7) 75 12 Sep-12 62 (0) 72 20 Oct-12 64 (3) 68 19 Nov-12 69 (4) 77 14 Dec-12 74 0 72 11 Jan-13 64 3 67 16 Feb-13 60 (16) 62 3 Mar-13 52 (19) 63 (3) Average 63 (7) 70 14 Source: Diio Mi, CY 2012; Note: YOY = year-over-year

SkyWest has indicated that at these load factors the market is no longer profitable, the result of worsening traffic and cost pressures over the past couple of years. Based on these results for both Portland and San Francisco, SkyWest is considering pulling the service. The public-private partnership ardently believes that positive tourism trends and assorted outbound travel opportunities, when combined with a strong local marketing effort as outlined in the Strategic Plan, will provide the growth in passengers that SkyWest needs to be profitable.



### U NDERSERVED 

### M ARKET WITH


### H IGH 

### D IVERSION

The magnitude of LMT’s passenger diversion was identified in a 2007 passenger analysis as part of the Northwest Regional Air Servi ce Initiative. The study indicated that approximat ely 53 percent of the
travelers in the LMT catchment area drive to other airports in search of bette r service and lower fares, particularly Medford’s Rogue Valley InternationalAirport approximately 80 miles to the west, RenoTahoe International Airport 255 miles to the southeast, and Portland International Airport, approximately 290 miles to the north. Exhibit 4.1 provides airport use by LMT catchment area travelers. The study suggests that there is potential to increase the number of passengers flying in/out of LMT by advertising the benefits of flying local

and the “Crater Lake-Klamath Connection”.

EXHIBIT 4.1 LMT CATCHMENT AREA AIRPORT USE

In terms of the extent this community is underserved,
Table 4.3 , next page, provides a comparison of communities with similar Metropolitan/Micropolitan Statistical Area populations in the Northwest region. LMT’s air service options in terms of weekly departures and weekly available seats are very low compared to other communities. LMT has, by far, either the lowest number of weekly departures or weekly available seats for t he size of their population.

The Strategic Plan proposed herein will create more awareness of SkyWest’s service in the Klamath Basin thereby increasing ridership and local airport retentionand returning SkyWest to profitability on the LMTPortland and LMT-San Francisco routes. LMT 47%

MFR 26% RNO 10% PDX 9% SMF 5% SFO 3%

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A IR 

# S ERVICE 

# N EEDS AND 

# D EFICIENCIES

A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 10 K LAMATH F ALLS A IRPORT 

### H IGH 

### A IRFARES

The Klamath Basin suffers from high airfares and overall cost of air travel. LMT is losing over 63,000 annual passengers to other airports. Consequently, the marketplace’s reaction has been to endure the inconvenience, major driver safety issues in the winter, and expense of driving to another airport.

As shown in Exhibit 4.1 , previous page, 53 percent of
LMT catchment area travelers drive between 78 to 366 miles to access alternate airports. At the IRS mileage rate of 56.5 cents per mile, the drive adds an out-of-pocket expense of $45 to over $200 one-way depending on the airport used, not including the cost
of the traveler’s time to make the drive.

Inconvenience and expense are not the only consequences. Southern Oregon’s geography and climate make travelling over mountain passes to
Medford or Portland in the winter a considerable safety issue. Snow and ice on the highway between
Klamath Falls and Medford can be severe. The extra time needed for these trips increases the likelihood of missed flights, further compounding the problem of added expense, inability to conduct business and slowing the economic recovery of the region.

LMT has a significant fare discrepancy with other surrounding airports, the state of Oregon, the Northwest region and the national average as shown
in Table 4.4 . In 2012, LMT’s one-way average domestic fare was $23 higher than the state of Oregon, $22 higher than the Northwest region and $18 higher than the US average. To further exacerbate the problem, LMT’s average fare has increased 16 percent within the last year while Medford’s fare increased only one percent. Since 2011, the Oregon average decreased slightly while the regional average increased three percent and the US national average increased only four percent. This puts LMT travelers at a si gnificant disadvantage.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 LMT $146 $158 $165 $182 $175 $173 $151 $168 $167 $194 Eugene, OR $142 $144 $156 $171 $167 $174 $160 $164 $174 $173 $21 Medford, OR $144 $153 $156 $172 $165 $172 $152 $157 $175 $176 $18 North Bend, OR $135 $144 $148 $164 $155 $165 $150 $180 $183 $186 $8 Pendleton, OR $106 $113 $107 $125 $118 $132 $101 $101 $100 $99 $95 Portland, OR $125 $128 $134 $146 $146 $154 $147 $161 $172 $171 $23 Redmond, OR $138 $149 $155 $161 $149 $148 $138 $147 $161 $173 $21 Oregon $127 $131 $137 $149 $148 $156 $147 $161 $172 $171 $23 Northwest Region $133 $133 $140 $151 $151 $155 $141 $155 $166 $172 $22 US $134 $131 $135 $147 $147 $157 $143 $157 $170 $176 $18 TABLE 4.4 AVERAGE ONE-WAY FARE PAID AVERAGE DOMESTIC FARE LMT $ DIFF

Source: Diio Mi; Domestic only

MSA/MICRO/AIRPORT POPULATION CARRIERS DESTINATIONS WEEKLY FLIGHTS WEEKLY SEATS Bozeman, MT 99,617 5 12 178 14,712 Cheyenne, WY 93,016 1 2 43 817 Great Falls, MT 81,697 5 7 85 6,146

Casper, WY 77,887 3 3 49 2,542 Port Angeles, WA 73,272 1 1 21 189 Klamath Falls, OR 67,615 1 2 14 420 Lewiston, ID 62,169 2 4 33 2,144 Walla Walla, WA 59,399 1 1 13 988

Durango, CO 57,761 4 3 83 5,543 Pullman, WA 45,418 1 1 13 988 Source: Diio Mi; July 2013; Woods & Poole Economics, Inc. Note: MSA = Metropolitan Statistical Area; Micro = Micropolitan Statistical Area TABLE 4.3 AIR SERVICE COMPARISONA PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 11 K LAMATH F ALLS A IRPORT 

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# P LAN

The Strategic Plan proposed by the City of Klamath Falls will achieve the community’s goals and help to
alleviate the air service needs and deficiencies of this community. This section provides a detailed description of the goals of the project and a plan for attaining those goals. This section also identifies the legal sponsor responsib le for administering the program and the public-private partnership that has been formed to actively participate in implementing the proposed project. A detailed description of the funding necessary for implem entation of the Strategic Plan, including federal and non-federal contributions,
is included.



### P ROJECT 

### G OALS

The project goal is to increase enplanements at LMT to return SkyWest Airlines’ Portland and San Francisco services to profitability and ensure this remote Oregon community continued access to the national air transportation system.



### P UBLIC 

### -P RIVATE 

### P ARTNERSHIP

The City of Klamath Falls is the owner and operator of LMT and the sponsor of this application. The City of Klamath Falls, Discover Klamath, and KlamathCounty Chamber of Commerce have formed a publicprivate partnership (refer to community support letters
in Appendix A ). This long-standing partnership was formed in 2010, created and sponsored by Klamath County Chamber of Commerce. Collectively, this partnership is committed to completing the Strategic
Plan outlined herein.

All partners in the public-private partnership will be fully involved in the exec ution of the Strategic Plan ( Table 5.1 ). The City of Klamath Falls will execute all federal grant offers and process all associated reimbursement requests. Discover Klamath, the official tourism agency for Klamath County, and a 501 (c)(3) non-profit entity, will be responsible for coordinating and administering the advertising and promotion program for this air service initiative in the Klamath Basin. The Klamath County Chamber of
Commerce will assist Discover Klamath with local marketing efforts, particularly to the local business community. In addition, eight entities are providing financial assistance in support of this grant application.



### P ROPOSED 

### P LAN

The City of Klamath Falls and other Klamath Falls representatives meet and/or speak regularly with SkyWest to discuss LMT’s market performance. SkyWest recently indicated that efforts must be made to return the market to pr ofitability. The public-private partnership believes that a comprehensive marketing campaign will increase ridership to the level that will meet SkyWest’s load factor and profitability targets. The purpose of the "Crater Lake Klamath Connection" marketing campaign is to ensure continued passenger growth on inbound and outbound LMT flights.

TABLE 5.1 PUBLIC-PRIVATE PARTNER ROLES PUBLIC-PRIVATE PARTNER ROLE City of Klamath Falls/ Klamath Falls Airport Grant administration

Discover Klamath Develop and administer the marketing campaign

Klamath County Chamber of Commerce Generate support from Klamath Falls’ business community; Assist with the marketing campaign This section addresses:



###  A Strategic Plan for meeting the Klamath

Basin’s air service needs and deficiencies



###  Previous grant recipient with new project

and goals



###  Description of the public-private

partnership



###  Designation of a legal sponsor



###  Funding necessary for implementation



###  Sustainability of the project

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A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 12 K LAMATH F ALLS A IRPORT SkyWest Airlines and Crater Lake National Park fully support the proposed plan. Both have provided letters of support which are included in Appendix A.



### Marketing Objectives

For SkyWest Airlines to meet its profitability targets, the goal is to increase enplanements by an average of two passengers daily each way (14 per week) on each of the services, Portland and San Francisco. On the 30-seat aircraft, this w ill increase the load factor from current levels to an average of 70 percent on the Portland flights and 77 percent on the San Francisco flights annually. Annual enplanements will increase by 1,460.

To accomplish this passenger increase, the marketing campaign has three objectives: 1. Increase the number of passengers flying in to LMT who originate elsewhere. 2. Increase the number of passengers originating out of LMT. 3. Conduct a marketing research study to obtain quantitative data on air service
into/out of LMT.



### Marketing Message

The marketing campaign will have two primary marketing messages.

BRANDING

The marketing program will generate awareness and
association that LMT is the home of Crater Lake National Park, and thereby capture more inbound air traffic. The first step will be to establish the brand identify, “Crater Lake-Klamath Connection” through this marketing campaign. Step one is contingent on getting the marketing funds through this SCASDP to complete it. The second step will be based on the success of establishing the brand identity. If the brand identity is successful, the public-private partnershipmay seek a change in the airport name, “Crater LakeKlamath Regional Airport”. The current airport name, Klamath Falls Airport, does not identify the region with its most valuable asset, Crater Lake National Park.

AIRPORT AMENITIES

The other general marketing message will stress the convenience and amenities available by flying local. LMT offers: free parking, high convenience, an onsite restaurant, and onsite national rental car agencies. LMT is close to town, significantly reducing travel
time. LMT offers short wait times at airline ticket counters for check-in, TSA and boarding.

This element of the marketing message will be to emphasize the benefits and convenience of using SkyWest Airlines at LMT.



### Target Audience

The marketing campaign will target both business and
leisure and inbound and outbound air travelers to the
Klamath Basin. The focus will be divided as follows:

 Leisure (70 percent of focus): Out of County (75 percent of leisure focus), In County (25 percent of leisure focus)

 Business (30 percent of focus); Out of County (20 percent of business focus); In County (80 percent of business focus)



### Marketing Plan

The marketing plan has been organized according to
leisure and business travelers and inbound (originating outside of Klamath Falls) and outbound (originating in Klamath Falls) travelers. Marketing strategies are identified for each group.

LEISURE TRAVELERS

Strategy 1 Out of County – LMT service will be promoted to Portland-area leisure travelers and San Francisco Bay area leisure travelers, attracting them to the Klamath Basin. To do so, the following will be completed.

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A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 13 K LAMATH F ALLS A IRPORT  Create alliances/partnerships with Destination Marketing Organizations (DMO’s) in Portland and San Francisco, to increase and leverage marketing dollars

 Develop bundled promotional packages for lodging, food, transpo rtation, and events and connect ‘Like’ things (e.g. theaters)

 Ensure message connects LMT as being the
‘Home of Crater Lake National Park’

Strategy 2 In County – Portland and San Francisco will be promoted as desirable destinations via Co-op Programming through bundling promotional packages for lodging, food, transportation, and events and connecting ‘Like’ things (e.g. theaters).

BUSINESS TRAVELERS

Strategy 1 Out of County – Twenty percent of the business traveler program will be allocated to Out of County business travelers with a focus on the
convenience of LMT.

Strategy 2 In County – The In County business traveler campaign will reinforce that local air travel is good for business. Public relations will be used to get the message out and local meetings will be used as a platform (e.g. Team Klamat h). High profile traveler(s) will be identified as spok esperson(s) (e.g. Chivas Regal Campaign) to show strong support for using the local airport.



### Marketing Research Plan Overview

A secondary objective of this project is to capture new and actionable consumer intelligence about air travel
into and out of LMT. We will do this via an “AA&U Study”. An Awareness, Attitudes, and Usage Study will use five percent of the project budget to gain a statistically relev ant study of passenger’s perceptions and experiences with air service into and out of LMT.

This information will be insightful, and actionable, in
terms of future me ssaging and in terms of prioritizing operational and/or service challenges which are currently creating barriers to incremental travel, resulting in a loss of market share to surrounding airports such as Medford and others.



### Tactics/Implementation

INTEGRATED MARKETING COMMUNICATIONS

This plan will use an integrated marketing approach, meaning multiple mediums will be used to communicate key message(s). Discover Klamath and its partners will use both old and new media approaches to reach key target audiences with its messaging. The following will be considered:

 Mobile technology is gaining momentum with nearly 40 percent of Americans owning and using a mobile device. Mobile marketing will be a key aspect of the marketing efforts.

 Social Media platforms, such as Pinterest, Facebook, YouTube, and others are viewed daily by millions who look to the opinions of others for guidance on trends and purchasing decisions.

 Travel and referral websites such as Trip Advisor and YELP! have huge user bases who seek information on travel (Trip Advisor has over 60 million monthly website visitors).

 Traditional media (e.g. Television, Radio, Newspapers, and Magazines) has not gone away, despite dire predictions a few years ago. Their audiences have become fractured and segmented, meaning advertisers must

# S ECTION 

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A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 14 K LAMATH F ALLS A IRPORT define target audiences well, then purchase the appropriate media. • Public relations remains a viable approach for generating “earned media” – that is, “free” stories. Klamath’s story, and its impending name change, provides plenty of public relations opportunities.

PARTNERSHIPS

While these have not been finalized, our group is in discussions with tourism organizations in the San Francisco Bay area and Portland (e.g. Visit San Francisco® and Travel Portland®) to explore cross promotional opportunities that will drive air traffic between our respective markets.

We envision creating and promoting offers that include airfare and lodging, and likely events,
activities and attractions. The Klamath Basin has
much to offer as demonstrated in the Tourism section on page 5.

AIRPORT NAME CHANGE

As evidenced by the support letters in Appendix A from the Southern Oregon Visitors Association, the United States Department of the Interior (Crater Lake National Park, and the company that runs Crater Lake National Park, Xanterra Parks and Resorts, it should be obvious the concept of a name change is a potentially big idea. The Klam ath Basin is the home of
Crater Lake National Park and to this end Discover Klamath and others are trying to solidify the link and association with Klamath and Crater Lake. Changing the airport name to Crater Lake-Klamath Regional Airport is a low risk, low co st move that should help solidify that link and with it add a few more occupied seats to inbound Klamath flights.

The name change provides the perfect vehicle for building a marketing campaign that is compelling and
relevant to audiences it will reach. 

### Marketing Budget

The total budget for the marketing campaign including development and implementation is $175,000 over a nine-month period.



### Campaign Timing

The marketing campaign will be implemented for a nine-month period. Table 5.2 provides the proposed timing for each of the elements.

TABLE 5.2 CAMPAIGN TIMING ELEMENT MONTH Plan development/application submission Jul-13 Determination of funding (grant award) Sep-13
Review/adjust plan Oct-Nov 2013 Launch Marketing Plan Feb-Mar 2014 Plan wraps up Sep-14 Analysis and reporting Oct-14



### Program Metrics

The effectiveness of the marketing campaign will be measured using the following metrics: 1. Measure/track number of enplanements 2. Communicate results of marketing research study
3. Measure/track web traffic to various websites, including: a. www.FlyKFalls.com
b. www.DiscoverKlamath.com c. www.KlamathCommunity.com
d. Others 4. Capture anecdotal information providing feedback on impact/results of campaign



### S TRATEGIC 

### P LAN 

### F UNDING

The public-private partnership is requesting US Department of Transporta tion (DOT) assistance in funding 77 percent, or $135, 000, of the Strategic Plan. The remaining cash funds for the marketingcampaign will be provided by nonairport revenue sources.

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A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 15 K LAMATH F ALLS A IRPORT Table 5.3 provides the Strategic Plan budget by element and sources of funding. The community will fund 23 percent of the total proposed air service program.

Local businesses are providing $20,000 for the local, non-airport cash contribution for the marketing program and $20,000 in-kind. Contributors include:

 Basin Mediactive, LLC

 Diversified Cont ractors, Inc.

 Herald & News

 JELD-WEN, Inc.

 Klamath County

 Klamath County Chamber of Commerce

 Klamath County Development Corporation

 South Central Oregon Economic Development District



### P ROJECT 

### C ONTINUATION AND


### S USTAINABILITY

The comprehensive marketing campaign, branding as “Crater Lake-Klamath Connection”, is anticipated to generate increased ridership at LMT. During the campaign, the public-private partnership plans to meet with SkyWest Airlines annually to assess the effectiveness of the program. If SkyWest indicates that the program has not achieved the desired average load factor and prof itability targets, the public-private partnership will consider funding further marketing efforts. Other programs to increase ridership and awareness in the community will also be considered. The public-private partnership is committed to making Sk yWest’s service selfsustaining.



### P REVIOUS 

### G RANT 

### R ECIPIENT


### - N EW 

### P ROJECT

AND 

### G OALS

In 2007, the City of Klamath Falls was awarded a SCASDP grant. The previous application’s goals were specifically targeted at San Francisco service and southbound connections by a second air carrier. The application was submitted in conjunction with North Bend, Oregon’s Southwest Oregon Regional Airport. The plan included a revenue guarantee and marketing to support the proposed service. With the assistance of the grant funds, the community was successful in implementing the program and obtaining nonstop service to San Francisco.

This application’s goals focus specifically on supporting existing air service through a comprehensive marketing campaign and branding the
Klamath Basin as the “Crater Lake-Klamath Connection”. As demonstrated, this application qualifies as a new project and meets the requirements
of the SCASDP. TABLE 5.3 STRATEGIC PLAN BUDGET

DESCRIPTION FUNDING SOURCE

TOTAL US DOT AIRPORT NON-AIRPORT CASH CASH IN-KIND CASH IN-KIND Marketing Campaign $135,000 $0 $0 $20,000 $20,000 $175,000 Total $135,000 $0 $0 $20,000 $20,000 $175,000 Percent of total project 77% 0% 0% 11% 11% 100% Percent of cash contribution 87% 0% N/A 13% N/A 100%A PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM Page 16 K LAMATH F ALLS A IRPORT 

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S CHEDULE AND


# M ONITORING

The public-private partnership has developed a realistic timetable to achieve the goals of this proposal. This section provides critical milestones to be achieved by the public-private partnership. A monitoring program is also provided to track the progress of the project.



### C RITICAL 

### M ILESTONES

Immediate action is needed to increase load factors and bring SkyWest Airlines back to profitability in theKlamath Falls market. Because of this, the publicprivate partnership has set an aggressive timeline for completion of the Strategic Plan. The following milestones are proposed. The timeline is highly dependent on the date of t he US DOT’s grant award.

: It is anticipated that the US DOT September 2013 will award SCASDP grants in September 2013. If the date of grant award changes, earlier or later, the remaining milestone dates will also change.

: Development of the October to December 2013 marketing campaign will be completed from October through December 2013. The marketing plan will be completed no later than December 31, 2013, so as to facilitate implementation of the advertising and promotion program on January 1, 2014.

: The marketing February to September 2014 campaign to increase enplanements at LMT will begin in February/March 2014 and continue through September 2014. 

### M ONITORING 

### P ROGRAM

The public-private partnership will monitor enplanement activity and load factors at LMT monthly
to track the effectivenes s of the market campaign. The public-private partnership will also meet at a minimum annually, likely more frequently, with SkyWest Airlines to discuss service performance and the progress of the marketing campaign. It is anticipated that the partnersh ip will work closely with SkyWest in marketing efforts and promotion of
the service.

This section addresses:



###  How the community will monitor the

progress of the project



###  The plan/schedule for timely completion of

the projectA PPLICATION U NDER THE S MALL C OMMUNITY A IR S ERVICE D EVELOPMENT P ROGRAM K LAMATH F ALLS A IRPORT 

# A PPENDIX 

# A

L ETTERS OF 

# S UPPORT

Appendix A includes letters of support for the City of Klamath Falls’ application to the US DOT for a comprehensive, marketing campaign to improve SkyWest Airlines’ load factors and profitability in the Klamath Falls market. Support letters were submitted by , participants in the public- SkyWest Airlines private partnership and othe r members of the Klamath Falls community. The letters of support are included on the following pages of this Appendix A and are
listed below.



### Airline SkyWest Airlines



### Government Department of the Air Force – 173 rd Fighter Wing Klamath County Commissioners Oregon Department of Aviation United States Department of the International,

National Park Service



### Public-private partnership City of Klamath Falls (refer to cover letter)
Discover Klamath Klamath County Chamber of Commerce



### Businesses and Organizations
Basin Mediactive, LLC Diversified Contracts, Inc. JELD-WEN, Inc. Klamath Community College Klamath Community Development Corporation Klamath Youth Development Center Ross Ragland Theater South Central Oregon Economic Development District Southern Oregon Visitors Association (Travel Oregon)
US Bank
Xanterra Parks & Resorts This section addresses: Letters of support from SkyWest Airlines, members of the public-private partnership, the local business community, and state government.

## DEPARTMENT OF THE AIR FORCE 173d FIGHTER WING KINGSLEY FIELD OREGON



### 19 July 2013

Colonel Jeremy O. Baenen Commander 211 Arnold Ave, Ste 11 Klamath Falls OR 97603

Mr. Brooke Chapman Associate Director Small Community Air Service Development Program 1200 New Jersey Ave, SE W86-310 Washington, DC 20590

Dear Associate Director Chapman

The 173d Fighter Wing supports the Klamath Falls Airport’s grant application for Small Community Air Service Development Program. Air service from Klamath Falls Airport to other major air service hubs provides the 173d Fighter Wing service members and their families a great resource for travel to temporary duty locations or leisure travel plans. The 173d Fighter Wing’s mission is to train F-15 pilots for the United States Air Force. Students attending training at Kingsley Field are temporarily assigned and often travel to their home of record for family visits abroad.

Pending Chief of Staff of the United States Air Force approval, the 173d Fighter Wing may see an increase in the number of airmen (approximately 80 families this year and an additional 70 families in two years). This increase will be a significant benefit to the Klamath Falls economy. It will also increase the number of travelers, many of which may be younger Airmen without dependents who will travel home to see relatives or who entertain family members traveling here. Additionally, the proposed increase will bring more travel requirements inherent to Active Duty personnel rotations and deployments. Having air carrier service at Klamath Falls will ease the logistics burden often times associated with traveling to temporary duty locations or traveling to one’s next assignment.

The 173d Fighter Wing considers air carrier service at Klamath Falls Airport a vital component to our mission success.

Sincerely,

JEREMY O. BAENEN, Colonel, ORANG Commander, 173d Fighter Wing 

## BAENEN.JEREMY. O.1145902890 Digitally signed by BAENEN.JEREMY.O.1145902890 DN: c=US, o=U.S. Government, ou=DoD, ou=PKI, ou=USAF, cn=BAENEN.JEREMY.O.1145902890 Date: 2013.07.22 09:43:06 -07'00'

# United States Department of the Interior
NATIONAL PARK SERVICE

Crater Lake National Park Post Office Box 7 Crater Lake, Oregon 97604

IN REPLY REFER TO:



## July 18, 2013

Ms. Brooke Chapman, Associate Director Small Community Air Service Development Program U.S. Department of Transportation 1200 New Jersey Ave, SE W86-310 W ashington, DC 20590

Subject: Letter of Support – Crater Lake National Park Small Community Air Service Development Program Grant Application Docket DOT-OST-2013-0120 City of Klamath Falls – Klamath Falls Airport

Dear Ms. Chapman:

We have been briefed by Discover Klamath Visitor and Convention Bureau, an active participant in this proposed grant, on plans to apply for an air service grant for marketing the Klamath Falls

a irport (LMT).

W e recognize the need for a stronger marketing connection for the longstanding re l ationship between Crater Lake National Park and Klamath County and Klamath Falls, Oregon. Crater Lake National Park has developed a long term strategy to increase and better manage visitation. Part of that plan is to conduct outreach to the large metropolitan centers of Seattle, Portland, and the San F rancisco Bay Area in order to maintain and enhance relevance to our ever changing society. F urther, the park is strongly encouraging inbound international travel through a variety of marketing and partnership agreements. This grant would complement our efforts and would allow Kla math County to better collaborate with the National Park Service in bringing more air travelers
to t he region.

We also understand the concept of linking the airport to the national park through renaming the airport the Crater Lake-Klamath Regional Airport. We agree that potential visitors and airlin e pa ssengers would be better able to identify LMT as the closest regional airport to Crater Lake.

The refore, we endorse awarding this air services grant to the group consisting of Discover Kla math Visitor and Convention Bureau, the Klamath Falls airport, and, the Klamath County Chamber of Commerce. We believe they will be successful in leveraging thes e g rant dollars to increase air traffic to LMT.

C raig W. Ackerman Superintendent

### July 15, 2013

Ms. Brooke Chapman, Associate Director Small Community Air Service Development Program U.S. Department of Transportation 1200 New Jersey Ave, SE W86- 310 Washington, DC 20590

Subject: Discover Klamath’s Letter of Support Small Community Air Service Development Program Grant Application Docket DOT-OST- 2013

- 0120 City of Klamath Falls – Klamath Falls Airport

Dear Ms. Chapman:

Discover Klamath Visitor and Convention Bureau is the official tourism agency for Klamath County, Oregon; and, we are an active participant in this Grant development and submission.

We are in full support and recommendation of the City of Klamath Falls receiving an air service development grant for the express purpose of marketing our local airport with the objective of increasing enplanements in 2013 -2014 and beyond.

Our community has a very active tourism marketing program that touches recreational travelers from Seattle, Portland and other points in the Pacific Northwest; to San Francisco, Los Angeles, and other points in California and the west coast.

Our outbound branding campaign appears to be working. On a year- to -date basis (January through May 2013) our lodging occupancy rates are at +17.3%* making Klamath one of the hottest destinations in the state, versus an overall increase at the state level of +5.1%.

Unfortunately, the majority of these lodging (and other) visitors are not flying into LMT (Klamath Falls) for a variety of reasons. With funds from this grant we have a very real opportunity to capture more air traffic by connecting Klamath Falls airport with being the home of Crater Lake National Park – a connection that today is not obvious at all. With nearly 500K visitors annually, Crater Lake National Park is a large economic draw/driver to our region but many fly into other ai rports including Portland, Medford, and Bend/Redmond.

We believe strongly that through our proposed name-change to Crater Lake-Klamath Regional Airport , we will clear-up much of the natural confusion about how best to get to Crater Lake National Park, and in the process stimulate much needed enplanement figures.

We thank you for your support and consideration of this grant.

Jim Chadderdon Executive Director

*Source: Smith Travel Research and State of Oregon Tourism Commission

DISCOVER KLAMATH 205 Riverside Drive, Suite B Klamath Falls, Oregon 97601 800- 445

- 6728“The Klamath County Chamber of Commerc e is committed to Klamath County by advancing its economic vitality and quality of life through the education, promotion and networking of our members” 

# Board	of	Directors

Stan Gilbert Klamath Youth Development Center Bridgitte Griffin
AG-SENSE Dan Keppen

Dan Keppen & Associates, Inc Heidi Wright
Herald and News Kathie Philp
Pacific Crest FCU Col. Curtis Waite 173d Fighter Wing, Kingsley Field Willie Riggs
OSU Extension Office Ellsworth Lang
Kla-Mo-Ya Casino Mike Angeli The Ledge Rachael Spoon

KBHBA Randy Shaw

Coldwell Banker/Holman Premier Realty Jason Chapman

Chapman Ranch Jennifer McKeon

County Cork Collectables George Ormsbee
Cal-Ore Communications Werner Reschke Wrinkledog, Inc Kelley Minty-Morris
Citizens for Safe Schools Maggie Polson Cascade Comprehensive Care



# Ex	Officio	Members

City of Klamath Falls Klamath County

KCEDA Oregon Institute of Technology Klamath Community College

KUHS DECA



# Staff

Charles Massie
Executive Director Heather Tramp Programs & Marketing Coordinator Andie Alvarez
Member Outreach Coordinator



### 205 Riverside Drive, Suite A

Klamath Falls, OR 97601 Phone: (541) 884

‐ 5193

Fax: (541) 884

‐ 5195 www.klamath.org July 11, 2013

Brooke Chapman Associate Director Small Community Air Service Development Program U.S. Department of Transportation 1200 New Jersey Ave, SE W86

‐ 310 Washington, DC 20590
Subject: Small Community Air Service Development Program Docket DOT

‐ OST

‐ 2013

‐ 0120 City of Klamath Falls, OR

– Klamath Falls Airport

Dear Ms. Chapman:

Klamath County Chamber of Commerce strongly supp ort s the air service proposal detailed in the City of Klamath Falls’ Small Community Air Service Development Program grant application for a comprehensive marketing
program to support SkyWest Airlines’ service at Klamath Falls Airport. With our remote location in southern Oregon, local businesses depen d on access to air service to continue to prosper.

SkyWest Airlines provides the link to the national air transportation system to

our region. Air service is vitally important to the health and growth of the Klamath business community. Given the unique transportation challenges which confront Klamath County, maintaining and supporting Sk yWe st’s service at Klamath Falls Airport is our highest priority.

Klamath County Chamber of Commerce is pleased to be one of the private partners in the public

‐ private partnership, and pledges $5,000 in in kind staff support to the marketing effort. The Airport has forged strong ties with the business com muni ty to attract better air service. We appreciate the opportunity
to expand that partnership to include the US Department of Transportation through the Small Community Air Service Development Program. We are pleased to have the opportunity to support this grant application.
Sincerely,

Charles “Chip” Massie Executive Director

### July 19, 2013

Brooke Chapman Associate Director Small Community Air Service Development Program U.S. Department of Transportation 1200 New Jersey Ave, SE W86-310 Washington, DC 20590

Subject: Small Community Air Service Development Program
Docket DOT-OST-2013-0120 City of Klamath Falls, OR – Klamath Falls Airport

Dear Ms. Chapman:

Radio broadcasting group, Basin Mediactive, LLC strongly supports the air service proposal detailed in the City of Klamath Falls’ Small Community Air Service Development Program grant application for a comprehensive marketing progra m to support SkyWest Airlines’ service at Klamath Falls Airport. With our remote location in southern Oregon, local businesses depend on access to air service to continue to prosper.

Our organization is pledging $5000.00 to this effort and will work with the Chamber, Airport, and Discover Klamath to implement the marketing pl an to rebrand and improve use of commercial air service in Klamath County.

SkyWest Airlines provides the link to the national air transportation system to our region. Air service is vitally important to the health and gr owth of the Klamath business community. Given the unique transportation challenges which conf ront Klamath County, maintaining and supporting SkyWest’s service at Klamath Falls Airport is our highest priority.

Basin Mediactive, LLC is pleased to be one of the private partners in the public-private partnership. The Airport has forged strong ties wi th the business community to attract better air service. We appreciate the opportunity to expand t hat partnership to include the US Department of Transportation through the Small Community Air Service Development Program. We are pleased to have the opportunity to support this grant application.

Sincerely,

Rob Siems General Manager - Basin Mediactive, LLC

# EM DIVERSIFIED CONTRACTORS1

P 0 Box 223 Klamath Falls OR 97601 (541) 884-1770 Oregon CCB #41320



### July 19, 2013

Brooke Chapman Associate Director Small Community Air Service Development Program U.S. Department of Transportation 1200 New Jersey Ave, SE W86-310 Washington, DC 20590

Subject: Small Community Air Service Development Program

Docket DOT-OST-2013-0120 City of Klamath Falls, OR — Klamath Falls Airport

Dear Ms. Chapman:

Diversified Contractors, Inc strongly supports the air service proposal detailed in the City of Klamath Falls' Small Community Air Service Development Program grant application for a comprehensive marketing program to support SkyWest Airlines' service at Klamath Falls Airport. With our remote location in southern Oregon, local businesses depend on access to air service to continue to prosper.

Our organization is pledging $500.00 to this effort and will work with the Chamber, Airport, and Discover Klamath to implement the marketing plan to rebrand and improve use of commercial air service in Klamath County.

SkyWest Airlines provides the link to the national air transportation system to our region. Air service is vitally important to the health and growth of the Klamath business community. Given the unique transportation challenges which confront Klamath County, maintaining and supporting SkyWest's service at Klamath Falls Airport is our highest priority.

Diversified Contractors, Inc is pleased to be one of the private partners in the public-private partnership. The Airport has forged strong ties with the business community to attract better air service. We appreciate the opportunity to expand that partnership to include the US Department of Transportation through the Small Community Air Service Development Program. We are pleased to have the opportunity to support this grant application.

Sincerely,

Mark R Wendt
President

### July 18, 2013

Brooke Chapman Associate Director Small Community Air Service Development Program U.S. Department of Transportation 1200 New Jersey Ave, SE W86- 310 Washington, DC 20590

Subject: Small Community Air Service Development Program
Docket DOT-OST- 2013 -0120 City of Klamath Falls, OR – Klamath Falls Airport

Dear Ms. Chapman:

JELD-WEN, inc. strongly supports the air service proposal detailed in the City of Klamath Falls’ Small Community Air Service Development Program grant application for a comprehensive marketing program to support SkyWest Airlines’ service at Klamath Falls Airport

. With JELD-WEN’s remote location in southern Oregon, local businesses depend on access to air service to continue to prosper.

Our organization is pledging $2,500.00 to this effort and will work with the Chamber, Airport, and Discover Klamath to implement the marketing plan to rebrand and improve use of commercial air service in Klamath County

.

SkyWest Airlines provides the link to the national air transportation system of our region. Air service is vitally important to the health and growth of the Klamath business community. Given the unique transportation challenges that confront Klamath County

, maintaining and supporting SkyWest’s service at Klamath Falls
A irport is our highest priority.

JELD-WEN, inc. is pleased to be one of the private partners in the public-private partnership. The Airport has forged strong ties with the business community to attract better air service. We appreciate the opportunity to expand that partnership to include

### the US Department of Transportation through the Small Community Air Service Development Program. We are pleased to have the opportunity to support this grant application.

Sincerely,

Ron Saxton
Executive Vice President

# Klamath Youth Development Center

2210 Eldorado Avenue ● Klamath Falls, OR 97601 ● (541) 883-1030

July 17, 2013

Brooke Chapman Associate Director Small Community Air Service Development Program U.S. Department of Transportation 1200 New Jersey Ave, SE W86-310 Washington, DC 20590

Subject: Small Community Air Service Development Program
Docket DOT-OST-2013-0120 City of Klamath Falls, OR – Klamath Falls Airport

Dear Ms. Chapman:

As the largest social service agency in the regi on, the Klamath Youth Development Center strongly supports the air service proposal detailed in the City of Klamath Falls’ Small Community Air Service Development Program grant application for a compre hensive marketing program to support SkyWest Airlines’ service at Klamath Falls Airport. With our re mote location in southern Oregon, local businesses depend on access to air service to continue to prosper.

SkyWest Airlines provides the link to the national air transportation system to our region. Air service is vitally important to the health and growth of the Klamath business community. Given the unique transportation challenges which conf ront Klamath County, maintaining and supporting SkyWest’s service at Klamath Falls Airport is our highest priority.

Klamath Youth Development Center is pleased to support Chamber and Airport efforts to market and improve commercial air service in the community. We are also pleased to have the opportunity to support this grant application.

Sincerely, 

# Stanley Gilbert

Chief Executive Officer

### southernoregon.org / office@southernoregon.org PO Box 1645 Medford, OR 97501

Travel Southern Oregon is a 501c6 non-profit organization dedicated to regional tourism marketing. 

## July 22 , 2013

Ms. Brooke Chapman, Associate Director Small Community Air Service Development Program U.S. Department of Transportation 1200 New Jersey Ave, SE W86-310 Washington, DC 20590

Letter of Support from Travel Southern Oregon on behalf of: Small Community Air Service Development Program Grant Application Docket DOT-OST-2013-0120 City of Klamath Falls

– Klamath Falls Airport

Dear Ms. Chapman: On behalf of the Board of Directors of the Southern Oregon Visitors Association (Travel Southern Oregon), I am pleased to submit this letter of support for the air service grant appl ication for the Klamath Falls airport (LMT).

The Discover Klamath Visitor and Convention Bureau has provided an excellent summary of the proposed grant, and of the ways in which creating vibrant marketing connections between Cr ate r Lake National Park and Klamath County will lead to success.

The two markets

– Portland and San Francisco

– that are served by the United/Skywest group out of Klamath Falls are critically important consumer tourism markets for the Southern Or egon region. Renaming the airport the “ Crater Lake-Klamath Regional Airport, ” and aggressively marketing it in these markets, will create momentum and increase air traffic at
LMT.

To the applicants for this grant (the Discover Klamath Visitor and Convention Bureau, the
K lamath Falls airport, and the Klamath County Chamber of Commerce), Travel Southern Or egon offers its support and endorsement

.
Thank you, and best regards,

Carolyn S. Hill, CEO

Travel Southern Oregon Executive Director, Crater Lake National Park Trust