# 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

Congress ional District Code

– MS 04SMALL 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. A PPLICANT I NFORMATION : (C HECK A LL T HAT A PPLY )

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 d ate of grant: 9

- 6

- 2008

B. P UBLIC /P RIVATE P ARTNERSHIPS : (L IST O RGANIZATION 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 Dev elopment Authority 3. MS Gulf Coast Tourism Partnership

4. 4.

5. 5.

C. P ROJECT P ROPOSAL : ( CHECK ALL THAT APPLY )

Marketing Upgrade Aircraft New Route

Travel Bank Service Restoration Subsidy

Surface Transportation Regional Servic e Revenue Guarantee

Launch New Carrier Start

- up Cost Offset First Service

Study Secure Additional Service Other (explain below) XD. E XISTING L ANDING A IDS AT L OCAL A IRPORT :

Full ILS Outer/Middle Marker Published Instru ment Approach

Localizer Other (specify)

E. 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 $900 ,000

2 State cash financial contribution

Local cash financial contribution

3a A irport 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 ) $1,1 50,00 0

In

- K ind contribution

5 a 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 ) $1,2 10 ,00 0

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

. 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 s elected by the State for review.

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

G. 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)

_____________________________________________ __________________________________ _____

________________________________________________________________________

# Table of Contents

SECTION 1 Executive Summary

SECTION 2 Outline of Proposal

SECTION 3 Market Overview

SECTION 4 Air Service Overview

SECTI ON 5 Air Servic e Deficiencies

SECTION 6 Strategic Plan

SECTION 7 Public

– Private Partnership

SECTION 8 Project Funding Plan

SECTION 9 Critical Milestones and Reporting

SECTION 10 Summary1 

## SECTION 1

– EXECUTIVE SUMMARY

The past six years have presented nu merous 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 disaste r 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

- Bil oxi

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

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

recover.

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

vital low co st 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 Flo rida

markets is crucial to sustain ing 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

da ily acc ess to Ft. Lauderdale (FLL) and Tampa, FL (TPA)

.

Due to recent airline mergers and a cquisitions

, the scheduled air service offerings from GPT

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

leads us to opportuni ties with carriers with a presence in Florida. More s pecifically

, Ft.

Lauderdale has historically been a strong market for GPT

, producing over 25 ,000 annual

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

Coa st.

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 t o currently underserved markets . We believe that ou r 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 $ 9 00,000

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

marketing sup port 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 wa s 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 20 11 grant proposal is substantial ly 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 t he Gulf Coast economy. Although t he needed targeted

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

cost carrier’s hu b

.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 wi th a significant increase in fuel costs, AE discontinued

the nonstop ORD service on November 2008.

G RANT FUNDING COMPARISON

2005 SCASG AWARD

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

access to a broad rang e 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, r ecrui t, and build a ir 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

- $9 00,000

TOTAL $1,210,0004 

## SECTION 3

– MARKET OVERVIEW

Location and Popu lation

The Gulfport

- Biloxi International Airport (GPT) is the only commercial servi ce 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 cou nties in Southern Mississippi.

The primary air service area has a population of approxima tely 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 ho me 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

Se afood / 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 Constructi on 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 Manufacturing6 

## Touris m

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 co urses, and world class

gaming offered by 11 casino properties.

Gaming on the MS Gulf Coast is a critical component to the local economy. C asin os 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 S pa 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

Pa lace Casino Resort Harrison 577

Treasure Bay Casino and Hotel Harrison 563

Silver Slipper Casino Hancock 552

TOTAL 11,4917

MS GULF COAST ROOM INVENTORY

- 2011

On average approximately over 2 million g aming visitors from Fl orida markets travel to the MS

Gulf Coast every year

. Availability of low cost nonstop air service access is vital in attracting

and retain ing these customers.

2010 GAMING VISITORS

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

S ource: MS Gaming Commission

.8

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

State of Mississppi has been experien cing 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 h eavily hinged on t he 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 A irways, and Vision

Airlines. GPT has nonstop service to 5 hubs and 3 day per week service to St. Petersburg

Clearwater, 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 shr inking 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 capac ity pull

downs in an effort to increase fares.

GPT TOP 25 O&D CY2010

Source: U.S. DOT, O rigin

- Destination Passenger Survey, CY 2010, via Data Base Products.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 f rom 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. Mor e specifically, t he

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 t o the largest competitor in the region, MSY.

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 Reports16

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 seat s per week are down over

- 36% in comparison to Aug 2008.

G PT ANNUAL SCHEDULED AIRLINE CAPACITY HISTORY

GPT SCHEDULED DEPARTURES / SEATS PER WK COMPARISON

– AUG 11 / AUG 08 Source: GPT Airl ine Activity Reports

.

Source: OAG

.17

GPT scheduled passenger enplanements are down

- 30% primar ily 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

Source: GPT Airline Activity Reports

.18

GPT ANNUAL LOAD FACTOR ANALYSIS

Clearly GPT’s depiction of current air service levels and challenges associat ed 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 ser vice 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. 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, aggres sive

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 airline s

.

We have recently completed the following studies:

2010 Airport Economic Impact and Leakage Study

2011 Airport Strategic Plan Update

In 20 06, i mmediately 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 6 th 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

regu lar 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 Airli nes 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

Alleg iant Air American Airlines Vision Airlines

United Airlines United Airlines Frontier Airlines

US Airways Allegiant Air US Airways20 

## SECTION 5

– AIR SERVICE DEFICIENCIES

GPT vs. MSY

The Gulfport

- Biloxi International Airport is located approx imately 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 customer s to MSY in 2009 . Furthermore, the presence of

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

carrier t o GPT. This in turn adversely a ffects the ability for tourism entities to access key

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

(GPT) GULFPORT

- BILOXI, MS

– 2011 ROUTE MAP

(MSY) NEW ORLEANS, LA

– 2011 ROUTE MAP21

GPT vs. MSY

– MONTHLY DEPARTURE / CAPACITY COMPARISON AUG 11

Carrier Org Gulfport/Biloxi, MS, US New Orleans, L A, 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

Contine ntal 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 F lights 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 F lights 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 1 1

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)

Air Tran 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 en planements.

FLL HISTORICAL O&D

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

- 1 00 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 49,00 0 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 p assengers 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

Sou rce: GPT Airport Leakage Analysis.26

TOP 20 LEAKED MARKETS RANKED BY % LOST

– CY 2009



## SECTION 6

– STRATEGIC PLAN

Source: GPT Airport Leakage Analysis.27 

## 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 ke y 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 soli d 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 fu nds 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 Ai rways. If GPT is

unable to attract the aforementioned carriers we will approach O&D carriers su ch 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 w ill 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 m arketing / 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 i dentifying the revenue

guarantee support allocation details. This will include:

Definiti on 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 sea t inventory on the flights.28

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

bloc k commitment from stakeholders will be initiated.29 

## 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 appr oach that demands attention an d

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 visitor s 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 t he 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 aggressive ly

market this offer with the $200,000 in public

- private partnership advertisement funding.30 

## S ECTION 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 Coa st 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) thro ugh 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 Pa rtnership 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 formulat e 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.31 

## SECTION 8

– PROJECT FUNDING PLAN32 

## 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 im provements 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

M onitor 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 wil l 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 co ntractual

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 a re recorded using Generally Accepted Accounting

Principles (GAAP) as established by the Governmental Accounting Standards Board.33

Compliance testing is performed to ensure that grant funds (considered restricted) are being

used as designated by the awardin g 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 revie w.

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.34 

## SECTION 1 0

- SUMMARY

Detailed fare informatio n 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 part nerships 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 institutio ns, 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 on ly 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 2 7%.

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 destinat ion 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 a nd region. We believe the opportunities to serve the public are substantial given

the potential for growth specific to our regional market.