Proposal Under the Small Community Air Service 

Development Program

Docket DOT-OST-2011-0119

August 2, 2011

Gulfport-Biloxi International Airport

14035-L Airport Rd

Gulfport, MS 39503

Tel: 228-863-5951

Fax: 228-863-5953

Gulfport-Biloxi Regional Airport Authority

DUNS – 088924246

Congressional District Code – MS 04
SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT-OST-2011-0119

SUMMARY INFORMATION

All applicants must submit this information with their proposal, along with a completed form SF424 on 

http://www.grants.gov. 

A. APPLICANT INFORMATION: (CHECK ALL THAT APPLY)

Not a Consortium Interstate Consortium Intrastate Consortium

Community now receives EAS subsidy

Community (or Consortium member) previously received a Small Community Grant

 

If previous recipient: Date of grant: 9-6-2005 Expiration date of grant: 9-6-2008

B. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION NAMES)

PUBLIC PRIVATE

1. Gulfport-Biloxi Regional Airport Auth 1. Gulf Coast Business Council

2. Harrison County CVB 2. Gulf Coast Chamber of Commerce

3. Mississippi Development Authority 3. MS Gulf Coast Tourism Partnership

4. 4. 

5. 5.

C. PROJECT PROPOSAL: (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)

X
D. EXISTING LANDING AIDS AT LOCAL AIRPORT:

Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

E. PROJECT COST: DO NOT ENTER TEXT IN SHADED AREA

LINE DESCRIPTION SUB TOTAL TOTAL AMOUNT

1 Federal amount requested $900,000

2 State cash financial contribution

Local cash financial contribution

3a Airport cash funds $50,000

3b Non-airport cash funds $200,000

3 Total local cash funds (3a + 3b) $250,000

4 TOTAL CASH FUNDING (1+2+3) $1,150,000

In-Kind contribution

5a Airport In-Kind contribution** $60,000

5b Other In-Kind contribution**

5 TOTAL IN-KIND CONTRIBUTION 

(7a + 7b)

$60,000

6 TOTAL PROJECT COST (4+8) $1,210,000

 IN-KIND CONTRIBUTIONS**

For funds in lines 7a (Airport In-Kind contribution) and 7b (Other In-Kind contribution), please 

describe the source(s) of fund(s) for each.

Airport In-Kind contribution – Air Service Development incentive program. Waiving of landing 

fees for new service to Ft. Lauderdale or other low cost carrier hub city in Florida. Calculated 

based on a minimum of 3 flights per wk.
F. IS THIS APPLICATION SUBJECT TO REVIEW BY STATE UNDER EXECUTIVE ORDER 12372

PROCESS?

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.

G. IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT? (IF “YES”, PROVIDE 

EXPLANATION)

No Yes (explain) 

____________________________________________________________________________________

________________________________________________________________________
Table of Contents

SECTION 1 Executive Summary

SECTION 2 Outline of Proposal

SECTION 3 Market Overview

SECTION 4 Air Service Overview

SECTION 5 Air Service Deficiencies

SECTION 6 Strategic Plan

SECTION 7 Public – Private Partnership

SECTION 8 Project Funding Plan

SECTION 9 Critical Milestones and Reporting 

SECTION 10 Summary
1

SECTION 1 – EXECUTIVE SUMMARY

The past six years have presented numerous economic challenges for the MS Gulf Coast. 

We’ve endured the worst natural disaster in American history (Hurricane Katrina), coped with 

record gas prices, fought through the great recession, and most recently dealt with the largest 

man-made disaster in our nation’s history (the Deepwater Horizon oil spill). The resilience of 

the MS Gulf Coast has been put to the ultimate test. Air service levels from the Gulfport-Biloxi 

International Airport (GPT) have suffered as a result of these challenges. The noted declines 

in air service have and will continue to negatively affect the ability for our local economy to fully 

recover. 

More specifically, tourism related establishments have realized a decline due to the absence of 

vital low cost air service to key markets. The $1.6 billion dollar MS Gulf Coast tourism industry

is not just important to the local economy but is also a substantial economic component for the 

State of Mississippi. Low cost air service access to a hub and local traffic from key Florida 

markets is crucial to sustaining our vital tourism sector.

January 2009 marked the loss of daily service from GPT’s only low cost carrier, AirTran 

Airways. AirTran provided a critical link to a key network over Atlanta, GA (ATL) along with

daily access to Ft. Lauderdale (FLL) and Tampa, FL (TPA). 

Due to recent airline mergers and acquisitions, the scheduled air service offerings from GPT 

have declined considerably. The realistic opportunity for GPT to restore low cost air service 

leads us to opportunities with carriers with a presence in Florida. More specifically, Ft. 

Lauderdale has historically been a strong market for GPT, producing over 25,000 annual 

passengers at its peak in 2008. Over 68% of the FLL traffic was inbound to the MS Gulf 

Coast. 

The community and Gulfport-Biloxi Regional Airport Authority believe that funds awarded 

through the grant will provide the support needed in attracting and retaining critical low cost air 

service to currently underserved markets. We believe that our proposal meets the 

requirements of the Small Community Air Service Development Program. The funds 

requested will address a major air service deficiency for our region.

GPT appreciates this opportunity and we thank you for considering our application. 

 
2

SECTION 2 – OUTLINE OF PROPOSAL

Project Description

The Gulfport-Biloxi Regional Airport Authority is seeking a grant in the amount of $900,000 

from the Small Community Air Service Development Program to provide revenue and 

marketing support for the restoration, recruitment and development of nonstop service to Ft. 

Lauderdale, FL or other low cost carrier hub city located in Florida.

The grant funds will be matched with $200,000 from public-private partnership, $50,000 in 

Airport funds, and $60,000 in Airport In-kind funds.

Contact 

Bruce Frallic, AAE

Executive Director

Gulfport-Biloxi International Airport

14035-L Airport Road

Gulfport, MS 39503

Tel: 228-863-5951

Fax: 228-863-5953

Project Sponsor

The official sponsor of this project is the Gulfport-Biloxi Regional Airport Authority.

Statement Regarding Previous SCASD Grant

The Gulfport-Biloxi Regional Airport Authority was awarded a SCASG grant in 2005. The 2005 

grant was amended from our original proposal due to changing needs of the airport and region 

as a direct result of Hurricane Katrina. Our 2011 grant proposal is substantially different in that 

it seeks funding for a revenue guarantee program for a carrier to provide access to key local 

Florida market/s which are vital to the Gulf Coast economy. Although the needed targeted 

Florida markets are primarily based on local traffic, they may also provide access via a low 

cost carrier’s hub.
3

2005 SCASG SUMMARY 

• Grant funds awarded in the amount of $750,000

• $700,000 – Revenue Guarantee 

• $50,000 – Marketing / Promo / Market Assessment

• American Eagle began nonstop service from GPT – ORD on December 13, 2007. 

• The revenue guarantee funds were depleted on April 2008. Due to increased 

operational costs associated with a significant increase in fuel costs, AE discontinued 

the nonstop ORD service on November 2008. 

GRANT FUNDING COMPARISON

2005 SCASG AWARD 

Recruit and build air service to CVG, or other hub that provides travelers convenient 

access to a broad range of destinations, thru use of a revenue guarantee, subsidy, or 

other financial incentive.

Establish a marketing program to advertise/promote the new service.

Revenue Guarantee (ORD)- $700,000

Marketing / promotion / Study - $50,000

Federal Amount- $750,000

TOTAL $750,000

2011 SCASG PROPOSAL

Restore, recruit, and build air service to Ft. Lauderdale or other low cost carrier hub city 

located in Florida through use of a revenue guarantee.

Establish a marketing program to advertise/promote the new service.

Revenue Guarantee - $800,000

Seat Purchase Promotion - $100,000

Marketing - $250,000

Airport In-kind (LANDING FEE WAIVER) - $60,000

Federal Amount- $900,000

TOTAL $1,210,000
4

SECTION 3 – MARKET OVERVIEW

Location and Population

The Gulfport-Biloxi International Airport (GPT) is the only commercial service airport on the MS 

Gulf Coast. GPT is centrally located in Harrison County, the commerce, industrial, and 

entertainment center of the area. GPT primarily serves six counties in Southern Mississippi. 

The primary air service area has a population of approximately 400,000 while the overall air 

service influence area is comprised of a population of over 1 million. 
5

MS Gulf Coast Economy

The MS Gulf Coast is home to a diverse mix of business and industry. Military installations, 

space and oceanographic agencies, shipbuilding and tourism industries are critical to the local 

economy.

Aerospace

Advanced Materials

Shipbuilding

Defense

Gaming

Tourism

Retail

Seafood / Marine Science

TOP EMPLOYERS

Name County Est. # Employees Business Type

Ingalls Shipbuilding Jackson 12300 Manufacturing

Keesler Air Force Base Harrison 10848 Military

NASA Stennis Space Center Hancock 5,286 Federal / Military

Naval Construction Battalion Center Harrison 7000 Military

Chevron USA, Inc. Pascagoula Refinery Jackson 1569 Manufacturing

Signal International Jackson 1550 Manufacturing

Mississippi Power Company Harrison 1295 Utilities

Hancock Bank Harrison 1213 Financial

VA Gulf Coast Veterans Health Care System Harrison 1050 Health Care

DuPont DeLisle Harrison 973 Manufacturing

Omega Protein Corporation Jackson 615 Manufacturing

Ingalls Shipbuilding Harrison 550 Manufacturing

Trinity Yachts Harrison 500 Manufacturing
6

Tourism

Located on the Gulf of Mexico, the MS Gulf Coast is home to the world’s longest man-made 

beach (26 miles). The tourism product consists of sport fishing, boating, water activities, 

numerous restaurants, cultural festivals, museums, shopping, 20 golf courses, and world class 

gaming offered by 11 casino properties.

Gaming on the MS Gulf Coast is a critical component to the local economy. Casinos directly 

employ over 11,000 and indirectly are the largest contributor to over 25,000 tourism related 

jobs on the MS Gulf Coast. The largest amounts of gaming visitors originate primarily in 

Louisiana, Alabama, Georgia, and Florida. 

 

MS GULF COAST GAMING EMPLOYMENT

Name County Est. # Employees

Beau Rivage Resort & Casino Harrison 2889

IP Casino Resort Spa Harrison 1989

Island View Casino Resort Harrison 1170

Grand Biloxi Casino Hotel Spa Harrison 876

Hard Rock Hotel & Casino Harrison 845

Hollywood Casino Bay St Louis Hancock 733

Isle Casino Hotel Harrison 695

Boomtown Casino Biloxi Harrison 602

Palace Casino Resort Harrison 577

Treasure Bay Casino and Hotel Harrison 563

Silver Slipper Casino Hancock 552

TOTAL 11,491
7

MS GULF COAST ROOM INVENTORY - 2011

On average approximately over 2 million gaming visitors from Florida markets travel to the MS 

Gulf Coast every year. Availability of low cost nonstop air service access is vital in attracting 

and retaining these customers. 

2010 GAMING VISITORS

Pre - Katrina Current Difference

Hotel Inventory - County

Hancock County 1,312 819 62%

Harrison County 13,565 9,575 71%

Jackson County 2,657 2,813 106%

Total - Hotel Inventory - County 17,534 13,207 75%

Hotel Inventory - Casinos - County

Hancock County 492 291 59%

Harrison County 7,292 5,321 73%

Total Hotel Inventory - Casinos - County 7,784 5,612 72%

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1Q

2Q

3Q

4Q

VISITORS

MISSISSIPPI

LOUISIANA

FLORIDA

ALABAMA

GEORGIA

OTHER

Source: MS Gaming Commission.
8

Gaming, a massive revenue producer for the overall economy on the MS Gulf Coast and the 

State of Mississppi has been experiencing steady decline in visitors since 2007. 2010 

Visitation from out of state visitors is down -7.3 million in comparison to peak 2007- 08 levels. 

These declines are heavily hinged on the loss of low cost air serivce from GPT in 2008-09.

GAMING COMPARISON 2007 - 2008

MS GAMING TOURISM SPENDING

Source: COA 2011 Annual Report.

Source: COA 2011 Annual Report.
9

SECTION 4 – AIR SERVICE OVERVIEW

Current Air Service

GPT is currently served by American, Continental / United, Delta, US Airways, and Vision 

Airlines. GPT has nonstop service to 5 hubs and 3 day per week service to St. PetersburgClearwater, FL (PIE). 

GPT 2011 ROUTE MAP

Ops/Week Seats/Week Seats/Dep

CARRIER DESTINATION Aug11 Aug11 Aug11 

American Airlines Dallas/Fort Worth, TX, US 28 1,358 48.50

Continental Airlines Houston-Intercontinental, TX, US 33 1,650 50.00

Delta Air Lines Atlanta, GA, US 48 3,688 76.83

Delta Air Lines Memphis, TN, US 7 350 50.00

US Airways Charlotte-Douglas, NC, US 20 1,000 50.00

Vision Airlines St. Petersburg, FL, US 3 366 122.00

TOTAL 139 8,412 60.52

Source: OAG.
10

Due to the loss of low cost carrier service in 2008-09 and recent airline mergers, air service 

competition levels at GPT have declined considerably. The shrinking competitive mix has 

resulted in a suppressed air market with high load factors and leakage to competing airports. 

GPT CARRIER MARKET SHARE

Delta

48%

Continential

17%

American

14%

US Airways

12%

Vision

9%

2011

Source: GPT Airline Activity Reports.
11

Notable declines in ATL traffic is the result of lack of competition and Delta’s capacity pull 

downs in an effort to increase fares. 

GPT TOP 25 O&D CY2010

Source: U.S. DOT, Origin-Destination Passenger Survey, CY 2010, via Data Base Products.

Rank Airport 

Code Airport Name PAX PDEW Avg Fare YOY Growth

1 ATL Atlanta Hartsfield-Jackson Intl 60 $ 118 -23%

2 TPA Tampa Intl 45 $ 68 132%

3 DCA Washington Reagan National 30 $ 171 -2%

4 LGA New York La Guardia 22 $ 138 0%

5 BWI Baltimore Washington Intl 22 $ 156 -22%

6 IAH Houston George Bush Intl 22 $ 242 -46%

7 DFW Dallas/Fort Worth Intl 22 $ 190 15%

8 LAS Las Vegas McCarran Intl 21 $ 184 -12%

9 SAN San Diego Intl 19 $ 216 1%

10 ORD Chicago O'Hare Intl 18 $ 146 19%

11 PHL Philadelphia Intl 18 $ 178 -10%

12 CLT Charlotte 18 $ 154 18%

13 LAX Los Angeles Intl 18 $ 236 3%

14 MSP Minneapolis Intl 17 $ 165 17%

15 BOS Boston Logan Intl 16 $ 166 17%

16 SEA Seattle/Tacoma Intl 16 $ 246 31%

17 MCO Orlando Intl 16 $ 156 7%

18 ORF Norfolk Intl 15 $ 236 10%

19 DTW Detroit Wayne County 15 $ 160 22%

20 PHX Phoenix Sky Harbor Intl 14 $ 166 10%

21 SFO San Francisco Intl 14 $ 191 16%

22 SAT San Antonio Intl 13 $ 197 10%

23 MCI Kansas City Intl 13 $ 139 24%

24 PIT Pittsburgh Intl 12 $ 120 7%

25 DEN Denver Intl 12 $ 174 -1%
12

GPT passenger traffic is concentrated heavily in the Southeast region (27%). This is primarily 

due to local traffic to Atlanta and inbound tourism traffic from O&D Florida markets.

Strong Mid-Atlantic (20.7%) traffic is driven by industry mix of our numerous government and 

military installations on the MS Gulf Coast. 

O&D PASSENGER TRAFFIC BY REGION 2010

*Other includes Alaska, Hawaii, Puerto Rico, U.S. Virgin Islands, Guam and Saipan

Source: U.S. DOT, Origin-Destination Passenger Survey, CY 2010 via Data Base Products.
13

Historical Air Service

GPT CY 2010 traffic is -24% below peak levels realized in 2008 when the competitive carrier 

mix was at its peak. It’s also important to note the negative effects of the loss of AirTran 

Airways nonstop daily service to Atlanta, Ft. Lauderdale, and Tampa. More specifically, the 

loss of daily nonstop flights to Ft. Lauderdale (FLL) resulted in a loss of approximately 26,000 

annual enplanements from which an average of approximately 65% originated in FLL

.

GPT O&D PASSENGER HISTORY

Source: U.S. DOT, Origin-Destination Passenger Survey, via Data Base Products.
14

Since August 2008, GPT has lost nonstop service from American Eagle (ORD), Allegiant Air 

(SFB), AirTran Airways (ATL, FLL, TPA). 

NONSTOP DESTINATION COMPARISON – AUG 08 / 11

As a result of declining competition and the loss of AirTran Airways daily service offerings in 

2009, GPT average fares have increased 35% over pre-Katrina levels (2005). DOT reports 

indicate average O&D one way fare has increased to an all-time high of $230 in Q1 2011. The 

ultimate result will lead to increased leakage to the largest competitor in the region, MSY. 

 

Mktg Al Org Dst Miles Aug11 Aug08 Diff Pct Chg Aug11 Aug08 Diff Pct Chg

American Airlines Gulfport/Biloxi, MS, US Dallas/Fort Worth, TX, US 500 28 28 0 0.00 1,358 1,358 0 0.00

American Airlines Gulfport/Biloxi, MS, US Chicago-O'Hare, IL, US 800 0 6 -6 -100.00 0 300 -300 -100.00

Continental Airlines Gulfport/Biloxi, MS, US Houston-Intercontinental, TX, US 376 33 42 -9 -21.43 1,650 1,905 -255 -13.39

Delta Air Lines Gulfport/Biloxi, MS, US Atlanta, GA, US 352 48 53 -5 -9.43 3,688 3,794 -106 -2.79

Delta Air Lines Gulfport/Biloxi, MS, US Memphis, TN, US 324 7 0 7 100.00 350 0 350 100.00

AirTran Airways Gulfport/Biloxi, MS, US Atlanta, GA, US 352 0 14 -14 -100.00 0 1,638 -1,638 -100.00

AirTran Airways Gulfport/Biloxi, MS, US Fort Lauderdale, FL, US 620 0 7 -7 -100.00 0 819 -819 -100.00

AirTran Airways Gulfport/Biloxi, MS, US Tampa, FL, US 429 0 7 -7 -100.00 0 819 -819 -100.00

Allegiant Air Gulfport/Biloxi, MS, US Orlando-Sanford, FL, US 484 0 3 -3 -100.00 0 450 -450 -100.00

Northwest Airlines Gulfport/Biloxi, MS, US Memphis, TN, US 324 0 21 -21 -100.00 0 1,050 -1,050 -100.00

US Airways Gulfport/Biloxi, MS, US Charlotte-Douglas, NC, US 578 20 20 0 0.00 1,000 1,000 0 0.00

Vision Airlines Gulfport/Biloxi, MS, US St. Petersburg, FL, US 422 3 0 3 100.00 366 0 366 100.00

TOTAL 139 201 -62 -30.85 8,412 13,133 -4,721 -35.95

Ops/Week Seats/Week

Source: U.S. DOT, Origin-Destination Passenger Survey, via Data Base Products.

Source: U.S. DOT, Origin-Destination Passenger Survey.
15

GPT was served by 9 airlines to 13 nonstop destinations at its peak in 2008. Currently the 

airport is served by 5 airlines and 6 nonstop destinations.

2008 / 2010 GPT CARRIER MARKET SHARE

Air Tran

25%

ASA/Delta

25%

Allegiant

3%

Continential

14%

Northwest

11%

American

10%

Myrtle Beach 

Direct

2%

Skybus

7%

US Airways

3%

2008

Delta

48%

Continential

17%

American

14%

US Airways

12%

Vision

9%

2011

Source: GBRAA Airline Activity Reports
16

GPT annual scheduled airline capacity has yet to return to levels realized in 2008 when carrier 

mix was diverse and low cost air service existed. Average weekly departures per week in Aug 

2011 are down -31% compared to Aug 2008. Average weekly seats per week are down over -

36% in comparison to Aug 2008. 

GPT ANNUAL SCHEDULED AIRLINE CAPACITY HISTORY

GPT SCHEDULED DEPARTURES / SEATS PER WK COMPARISON – AUG 11 / AUG 08

Mktg Al Aug11 Aug08 Diff Pct Chg Aug11 Aug08 Diff Pct Chg

American Airlines 28 34 -6 -17.65 1,358 1,658 -300 -18.09

Continental Airlines 33 42 -9 -21.43 1,650 1,905 -255 -13.39

Delta Air Lines 55 53 2 3.77 4,038 3,794 244 6.43

AirTran Airways 0 28 -28 -100.00 0 3,276 -3,276 -100.00

Allegiant Air 0 3 -3 -100.00 0 450 -450 -100.00

Northwest Airlines 0 21 -21 -100.00 0 1,050 -1,050 -100.00

US Airways 20 20 0 0.00 1,000 1,000 0 0.00

Vision Airlines 3 0 3 100.00 366 0 366 100.00

TOTAL 139 201 -62 -30.85 8,412 13,133 -4,721 -35.95

Ops/Week Seats/Week

 -

 10,000

 20,000

 30,000

 40,000

 50,000

 60,000

 70,000

1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 Seats

2011

2010

2009

2008

Source: GPT Airline Activity Reports.

Source: OAG.
17

GPT scheduled passenger enplanements are down -30% primarily due to decline in capacity 

and access to key nonstop markets. This point is supported by the substantial increase in load 

factor since 2008. The average annual year to date load factor for 2011 is currently at 86%. 

These extremely high load factors or indicative of an underserved airport. 

GPT ANNUAL SCHEDULED PASSENGER ENPLANEMENT REPORT

 -

 5,000

 10,000

 15,000

 20,000

 25,000

 30,000

 35,000

 40,000

 45,000

 50,000

1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 Passengers

2011

2010

2009

2008

Source: GPT Airline Activity Reports.
18

GPT ANNUAL LOAD FACTOR ANALYSIS

Clearly GPT’s depiction of current air service levels and challenges associated with higher 

fares and leakage are evident by the data provided. Air service levels point to an underserved 

community. Due to the numerous uncontrollable variables unique to the MS Gulf Coast our 

community has been adversely impacted by loss of air service access to key markets. 

Primarily, low cost access to Florida markets which historically provided the required link to 

generate vital revenues for our local economy. 

50%

55%

60%

65%

70%

75%

80%

85%

90%

2008 2009 2010 2011

Load Factor

Source: GPT Airline Activity Reports.
19

Air Service Development Efforts – Past 5 Years

Over the past five years the Airport Authority has been proactive in its efforts to attract and 

retain air service. We have devised innovative approaches for supporting new and existing air 

service. Our air service development efforts include: airline incentive programs, aggressive 

marketing support initiatives, creation of public-private partnerships, air service development 

surveys and studies, composition of numerous business case proposals to key airline network 

planners.

We have employed consultants to provide support with conducting air service studies and also 

to compose data for business case presentations to targeted airlines. 

We have recently completed the following studies: 

2010 Airport Economic Impact and Leakage Study

2011 Airport Strategic Plan Update

In 2006, immediately following Hurricane Katrina, we created and hosted an annual Economic 

Development Summit with a primary focus on air service development. The Summit has been 

a valuable tool in bringing both public and private entities together to initiate air service 

development efforts. We recently hosted the 6th annual Summit this year and had 

representatives from 5 different airlines in attendance. 

We also meet to discuss existing and new service initiatives with airline network planners on a 

regular basis at either headquarter meetings or industry functions like Jumpstart and Network.

Airline Meeting History:

2006 2008 2010

Delta Airlines Delta Airlines Continental Airlines

US Airways US Airways Delta Airlines

American Airlines United Airlines Spirit Airlines

AirTran Airways AirTran Airways Vision Airlines

Branson Air Express

2007 2009 2011

Continental Airlines Continental Airlines Spirit Airlines

Skybus Delta Airlines Allegiant Air

Allegiant Air American Airlines Vision Airlines

United Airlines United Airlines Frontier Airlines

US Airways Allegiant Air US Airways
20

SECTION 5 – AIR SERVICE DEFICIENCIES

GPT vs. MSY 

The Gulfport-Biloxi International Airport is located approximately 90 miles the east of the Louis 

Armstrong International Airport (MSY). MSY currently offers 128 daily nonstop flights to over

45 destinations. Due to low average fares and numerous nonstop options in MSY, GPT 

leaked over 36% of its local customers to MSY in 2009. Furthermore, the presence of 

numerous low cost carriers at MSY leads to tremendous obstacles in attracting a low cost 

carrier to GPT. This in turn adversely affects the ability for tourism entities to access key 

visitors, such as inbound traffic from Ft. Lauderdale and Orlando, FL. 

(GPT) GULFPORT-BILOXI, MS – 2011 ROUTE MAP

(MSY) NEW ORLEANS, LA – 2011 ROUTE MAP
21

GPT vs. MSY – MONTHLY DEPARTURE / CAPACITY COMPARISON AUG 11

Carrier Org Gulfport/Biloxi, MS, US New Orleans, LA, US Difference

American Airlines Flights 115 371

American Airlines Seats 5,564 51,866

Air Canada Flights 31

Air Canada Seats 2,325

JetBlue Airways Flights 88

JetBlue Airways Seats 10,350

Continental Airlines Flights 141 415

Continental Airlines Seats 7,050 50,898

Delta Air Lines Flights 228 811

Delta Air Lines Seats 17,336 95,476

Frontier Airlines Flights 32

Frontier Airlines Seats 3,462

AirTran Airways Flights 151

AirTran Airways Seats 17,667

United Airlines Flights 285

United Airlines Seats 28,982

US Airways Flights 89 355

US Airways Seats 4,450 34,525

Vision Airlines Flights 13

Vision Airlines Seats 1,586

Southwest Airlines Flights 1,206

Southwest Airlines Seats 163,782

Grand Total Flights 586 3,745 -3,159

Grand Total Seats 35,986 459,333 -423,347

Source: OAG – Aug 11 

GPT vs. MSY – Average Fare Comp

Time Series Gulfport/Biloxi, MS, US New Orleans, LA, US Fare Difference

2008 Q1 171 175 -5

2008 Q2 188 178 10

2008 Q3 184 172 11

2008 Q4 169 169 -1

2009 Q1 198 152 46

2009 Q2 192 159 33

2009 Q3 193 156 37

2009 Q4 200 174 27

2010 Q1 214 181 33

2010 Q2 204 194 9

2010 Q3 208 171 37

2010 Q4 198 170 28

2011 Q1 230 184 46

Source: U.S. DOT, Origin-Destination Passenger Survey, via Data Base Products.
22

Florida Service Overview – FLL / MCO (SFB)

AirTran Airways provided one daily nonstop flight to FLL until Jan. 2009. O&D traffic from 

South Florida (FLL, PBI, MIA) markets peaked at over 71,070 O&D passengers. The loss of 

the AirTran Airways daily service in 2009 resulted in a loss of over 27,500 enplanements. 

FLL HISTORICAL O&D

Source: U.S. DOT, Origin Destination Passenger Survey and T-100 Data, via Data Base Products, Inc.
23

Allegiant Air provided less than daily service to SFB from Jun 07 to Jan 09. At its peak in 

2008, O&D traffic from Orlando, FL produced over 49,000 annual passengers to GPT.

MCO / SFB HISTORICAL O&D

Source: U.S. DOT, Origin Destination Passenger Survey and T-100 Data, via Data Base Products, Inc.
24

Historically over 68% of GPT-FLL traffic was inbound to GPT. This inbound traffic was 

primarily leisure oriented and was a major contributor to our local economy.

GPT-FLL HISTORICAL POINT OF ORIGIN

Since the loss of nonstop service to FLL, average fares have risen sharply from $120 to over 

$190 each way. Passenger traffic has fallen from 70 PDEW to 10 PDEW.

FLL AVERAGE FARE / PDEW COMPARISON

0

10

20

30

40

50

60

70

80

2007 Q1 2007 Q2 2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4

PERCENT

FLL

GPT

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

170

180

190

200

2008

Q1

2008

Q2

2008

Q3

2008

Q4

2009

Q1

2009

Q2

2009

Q3

2009

Q4

2010

Q1

2010

Q2

2010

Q3

2010

Q4

2011

Q1

Passengers

Average Fare

Source: U.S. DOT, Origin Destination Passenger Survey..

Source: U.S. DOT, Origin Destination Passenger Survey..
25

In 2009 (post AirTran) GPT generated 23,520 local passengers to FLL from its “air service 

influence area” but leaked over 67% or 15,669 passengers to MSY. The loss of low cost 

nonstop service is clearly the cause. 

2009 traffic generation between GPT air service influence area and Orlando, FL was nearly 

47,000 annually, however GPT captured only 11,500 of these passengers. This equates to a 

leakage rate of greater than 75%.

GPT 2009 LEAKAGE - POST AIRTRAN SERVICE

Source: GPT Airport Leakage Analysis.
26

TOP 20 LEAKED MARKETS RANKED BY % LOST – CY 2009

SECTION 6 – STRATEGIC PLAN

Market Traffic Generated Traffic Lost % Lost Reason

Houston - Hobby 52,432 52,084 99.34% Southwest Airlines @ MSY

New York - JFK 19,335 16,535 85.52% jetBlue Airways @ MSY

Orlando 46,698 35,198 75.37% Southwest Airlines @ MSY

Newark 21,319 14,940 70.08% Nonstops from MSY

Dallas/Ft. Worth 50,438 35,313 70.01% Pricing pressure on DFW service due to Southwest service MSY-DAL

Fort Lauderdale 23,520 15,669 66.62% Southwest Airlines @ MSY

Denver 25,962 15,956 61.46% United, Southwest & Frontier provide nonstops from MSY

Nashville 14,633 8,490 58.02% Southwest Airlines @ MSY

Tampa/St. Petersburg 23,915 13,485 56.39% Southwest Airlines @ MSY

Los Angeles 30,899 16,579 53.66% Southwest, United, and Delta provide nonstops from MSY

Seattle/Tacoma 20,657 10,693 51.77% Southwest pricing pressure

Houston - Intercontinental 35,159 17,970 51.11% Pricing pressure on IAH service due to Southwest service MSY-HOU

Chicago - O'Hare 24,591 12,108 49.24% Pricing pressure on ORD service due to Southwest service MSY-MDW; also nonstops on United & American

Boston 19,440 8,319 42.79% jetBlue Airways @ MSY

Baltimore 37,639 15,288 40.62% jetBlue & AirTran @ MSY

San Antonio 16,285 6,182 37.96% Southwest pricing pressure

San Francisco 14,634 4,723 32.28% Southwest pricing pressure - UNITED RECENTLY ANNOUNCED RESTORATION OF NONSTOP SERVICE

Detroit 14,848 4,744 31.95% Larger capacity increments @ MSY plus Southwest pricing pressure

Philadelphia 21,988 5,610 25.51% Larger capacity increments @ MSY plus Southwest pricing pressure

Charlotte 15,145 3,412 22.53% Larger capacity increments @ MSY

New York - LGA 23,039 4,954 21.50% Nonstops from MSY

Las Vegas 23,780 4,521 19.01% Southwest Airlines @ MSY

San Diego 18,056 3,056 16.93% Southwest connecting service @ MSY Washington - National 18,753 -4,954 -26.42% Premium on nonstops via MSY v connecting on AirTran

Atlanta 32,501 -27,811 -85.57% AirTran @ GPT

Other 380,419 76,250 20.04%

Total 1,026,085 369,316 35.99%

Source: GPT Airport Leakage Analysis.
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SECTION 6 – STRATEGIC PLAN

Goals

GPT has four goals with its Small Community Air Service Development Grant Proposal for 

service to Ft. Lauderdale, FL or other low cost carrier hub cities in Florida.

Restore a nonstop link to key Florida markets – Specifically FLL / MCO (SFB)

Lower fares and offer additional access to underserved markets 

Reverse the decline in GPT’s O&D traffic

Recapture traffic leaked to MSY

Action Plan

In today’s volatile economic environment, air carriers are extremely risk averse. Most airlines 

are still pulling down capacity and opportunity for growth has become a competition between 

airports from coast to coast. The addition of new air service in today’s environment is not just 

secured through the solid business case depicting adequate demand, it’s also backed up with 

community support and in many cases a subsidy of some sort. The revenue guarantee has 

historically been one of the most effective risk abatement tools in securing new air service.

With funds awarded through the Small Community Air Service Grant, GPT will first approach 

low cost carriers with a hub presence in Ft. Lauderdale, FL or other Florida cities such as 

Orlando, FL. The primary targeted carriers will be Spirit Airlines and JetBlue Airways. If GPT is 

unable to attract the aforementioned carriers we will approach O&D carriers such as Allegiant 

Air, and Vision Airlines to provide access to key Florida markets. 

Upon securing the air service through the use of a revenue guarantee, GPT will work with the 

carrier and public-private partners to devise an aggressive ad campaign in the Florida market 

to promote the new service. GPT will also create an aggressive ad campaign targeted at local 

customers in its air service influence area. The marketing / promotional campaign will begin at 

minimum of 90 days prior the service start date. 

GPT will assist in the preparation of an agreement with the carrier identifying the revenue 

guarantee support allocation details. This will include:

Definition of the revenue expectations for the route and what will constitute a fair 

revenue performance for the airline.

The agreement will contain stipulations on scheduled air service of at least 3 flights per 

week and reasonable pricing and availability of seat inventory on the flights.
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It is intended that cost, revenue, and performance criteria will be monitored and 

reported on a monthly basis and that the final accounting of any revenue support will be 

made at the end of the first year of operation.

Project Timeline

ACTIVITY 2012

Negotiate Revenue Guarantee Agreement (1 yr) January 

Announce Service February 

Publish Schedule February 

Market New Route February – September 

Monitor Advance Bookings February – May

Begin Service May

Monitor Route Performance May – Indefinitely

Submit Grant Status Reports to DOT Q2 2012 – Q2 2012

If the service is not initially successful and the revenue guarantee funds are depleted, GPT will 

work with the public-private partnership to secure additional funding for promotional / 

marketing support. We will also work closely with the carrier and evaluate their requested 

needs to continue and sustain the service. If needed, the creation of a travel bank or seat 

block commitment from stakeholders will be initiated. 
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Promotion - Seat Purchase Campaign

With today’s transportation challenges image advertising is not enough to entice customers to 

use available air service. There must be an aggressive approach that demands attention and 

presents itself as a valuable cost savings.

Historically the Harrison County Convention and Visitors Bureau and Mississippi Development 

Authority have deployed innovative promotional strategies targeted at enticing visitors to the 

MS Gulf Coast. These strategies are premised on counteracting the negative effects of the 

increasing cost of transportation associated with escalating fuel prices. 

HISTORICAL REBATE PROMOTION SUMMARY

Book two nights at a hotel property on the MS Gulf Coast and receive a promotional gas card 

($75) or a cash gift card ($100).

AIR SEAT REBATE PROMOTION

GPT proposes a similar strategy in key Florida markets where low cost air service access is 

present. 

Book two nights at a hotel property on the MS Gulf Coast and receive one free round trip 

airfare valued at $250. 

We request that $100,000 from the grant funds be allocated to this promotion for the sole 

purpose of purchasing air seats directly from the targeted air carrier. We will aggressively 

market this offer with the $200,000 in public-private partnership advertisement funding. 
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SECTION 7 – PUBLIC-PRIVATE PARTNERSHIP

The Gulfport-Biloxi International Airport and the Mississippi Gulf Coast area businesses 

through a public / private partnership are working together to support air service development 

initiatives.

• The public / private partnership includes the Gulf Coast Business Council, Harrison 

County Convention and Visitor Bureau, The Gulf Coast Chamber of Commerce, and the 

recently created MS Gulf Coast Tourism Partnership.

• Together, their support of committing financial resources allows GPT to sustain existing 

air service and help attract new air service. 

• Funds allocated ($200,000) through the partnership will be used on supporting an 

aggressive advertisement campaign in the targeted Florida market.

• The MS Gulf Coast Tourism Partnership is a consolidated tourism entity representing 

the three coastal counties. 

• MS Gulf Coast Tourism Partnership and the Harrison County CVB employ the services 

of an advertisement firm to assist in creating strategic ad campaigns. GPT will assist 

and provide the performance monitoring reports to gauge the effectiveness of the 

campaign. GPT will offer assistance in creative, media selection, and ad placement.

• We will use the expertise of these tourism development entities to formulate the 

strategic destination campaign focused in the Florida market.

• We will ensure that the mechanism to monitor the effectiveness of the campaign is in 

place and we will work with the public-private partnership to amend the strategy as 

necessary.
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SECTION 8 – PROJECT FUNDING PLAN
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SECTION 9 – CRITICAL MILESTONES AND REPORTING

The effectiveness of the grant proposal objectives will be gauged through closely monitoring 

existing air service levels and ultimately through improvements in passenger volume and 

service levels.

GPT will closely monitor:

Advanced bookings – through direct airline reports

Quarterly DOT traffic data – O&D reports

Strengths and weaknesses of ad campaign 

Monitor financial performance of the route

GPT proposes the success of the Small Community Air Service Development Grant Award be 

evaluated based on the following milestones.

Secure at a minimum 3 day per week low cost nonstop air service to either Ft. 

Lauderdale, FL or Orlando, FL.

Annual O&D passenger growth of at least 10% after the first year of project 

implementation.

The airport, as the sponsor of this grant application, will be responsible for overall 

administration of this program.

The Gulfport-Biloxi Regional Airport Authority will provide quarterly reports to U.S. DOT 

regarding the progress of the ACTION PLAN objectives as well as an accounting of funds 

used.

Community Assurances

Assurances that the grant money would be spent in accordance with the grant program 

stipulations and the proposal outline would be in the form of an independent annual audit, 

transaction recording standards, functional oversight of transactions by Airport Authority Staff, 

reporting to elected and appointed officials (not on the Authority staff), and a contractual 

obligation that designates proper use and expected outcomes of the marketing efforts.

Since the primary partners for the airport are municipalities, the reporting and audit 

requirements are stringent. An annual audit is required to be performed by an outside audit 

firm. The airport transactions are subject to all sampling, testing, and audit standards applied 

by that audit firm to ensure that the information fairly and materially states the financial 

condition of the entity. All transactions are recorded using Generally Accepted Accounting 

Principles (GAAP) as established by the Governmental Accounting Standards Board. 
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Compliance testing is performed to ensure that grant funds (considered restricted) are being 

used as designated by the awarding entity.

The Finance Department has an Accountant specifically assigned to monitoring grants and 

reporting their status quarterly. The Executive Director is responsible for approving all 

transactions on a day-to-day basis and reviewing the expenditures and performance 

measurement results. Monthly financial reports are delivered to the elected officials (Airport 

Board) and the Airport Steering Committee (advisory committee for the operations of the 

airport). These reports are available for public review.

A contract for marketing services will be written to include performance standards. These 

standards are intended to ensure that the grant money (should we be granted the opportunity) 

would be spent in a manner consistent with the requirements of this program and our proposal.

The Airport Authority is traditionally very successful with monitoring grant programs, given the 

tools and processes in place as standard operating procedure.
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SECTION 10 - SUMMARY

Detailed fare information was provided explaining GPT average air fares are at their 

historical peak of $230 for Q1 2011. 

The community will provide a portion of the cost of the activity from local sources other 

than airport revenue sources by utilizing the public-private partnerships that we have in 

place.

The community has established a public-private partnership to facilitate air carrier 

service.

The assistance will provide material benefits to a broad segment of the traveling public, 

including business, education institutions, and other enterprises.

Assistance will be used in a timely manner starting in May 2012 and ending in May 

2013.

Geographic Location of each applicant, including proximity to larger centers of air 

service and low fare service alternatives. GPT is the only commercial service airport 

serving six counties on the MS Gulf Coast. Our largest competitor is MSY located 90 

miles to the west. MSY has low fare service from numerous carriers.

The proposed federal grant amount requested compared to local share is 27%.

The applicant did previous receive an award in 2005 and includes an explanation of 

how the 2011 request is different.

The community has demonstrated commitment to and participation in the proposed 

grant project has been illustrated through the destination marketing and promotional 

support presented.

The Gulfport-Biloxi International Airport and its partner communities are grateful for the 

opportunity to apply for this grant. It is our belief that these funds are critical to the future of 

our airport and region. We believe the opportunities to serve the public are substantial given 

the potential for growth specific to our regional market.