APPLICATION UNDER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST -2014-0133

SUMMARY INFORMATION 1

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:

Name of Signatory Party for Legal Sponsor:

DUNS Number:

EIN/Tax ID:

B. L IST THE N AME OF THE COMMUNITY OR CONSORTIUM OF COM MUNITIES APPLYING :

1.____________________________________________________

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 FOR THE AIRPORT ( S ) THAT ARE ACTUALLY

SEEKING SERVICE ).

1. 2

.

3

. 4

.

1 Note that the Summary Information does not count against the 20

- page limit of the SCASDP application.D OES THE AIRPORT SEEKING SERVICE HOLD AN AIRPORT OPERATING CERTIFICATE ISSUED BY

THE F EDERAL A VIATION A DMINISTRATION UNDER 14 CFR P ART 139? (I F “N O ”, P LEASE

EXPLAIN WHETHER THE AIRPORT INTENDS TO APPLY FOR A CERTIFICATE OR WHETHER AN

APPLICATION UNDER P ART 139 IS PENDING .)

Yes No (explain)

______________________________________________________________________________

______________________________________________________________________________

D. L IST THE 2- DIGIT CONGRESSIONAL DISTRICT CODE APPLIC ABLE TO THE SPONSORI NG

ORGANIZATION , AND IF A CONSORTIUM , TO EACH PARTICIPATING COMMUNITY

.

1. 2

.

3

. 4

.

E. A PPLICANT I NFORMATION : (C HECK A LL T HAT A PPLY )

Not a Consortium Interstate Consortium Intrastate Consortium

Community currently receives subsidized Essential Air Service

Community (or Consortium member) previously received a Small Community Air Service Development Program Grant

If previous recipient: Provide year of grant(s) :_______________________________; and, the text of the grant agreement section(s) setting forth the scope of the grant project :

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

F. P UBLIC /P RIVATE P ARTNERSHIPS : (L IST O RGANIZATION NAMES )

PUBLIC PRIVATE

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.G. P ROJECT P ROPOSAL :

1. G RANT G OALS : ( CHECK ALL THAT APPLY )

Launch New Carrier Secure Additional Service Upgrade Aircraft

First Service New Route Service Restoration

Regional Service Surface Transportation Professional Services 2

Other (explain below)

2. F INANCIAL T OOLS T O B E U SED : ( CHECK ALL THAT APPLY )

Marketing (including Advertising): promotion of the air service to the public

Start

- up Cost Offset : offsetting expenses to assist an air service provider in setting up a

new station and starting new service (for example, ticket counter reconfiguration)

R evenue Guarantee : an agreement with an air service provider setting forth a minimum

guaranteed profit margin, a portion of which is eligible for reimbursement by the

community

Recruitment of Air Carrier: air service development activities to recruit new air service,

including expenses for airport marketers to meet with air service providers to make the

case for new air service

Fee Waivers : waiver of airport fees, such as landing fees, to encourage new ai r service;

counted as in-kind contributions only

Ground Handling Fee : reimbursement of expenses for passenger, cabin, and ramp (below

wing) services provided by third party ground handlers

Travel Bank: travel pledges, or deposited monetary funds, from pa rticipating parties for

the purchas e of air travel on an air carrier , with defined procedures for the subsequent use

of the pledges or the deposited funds; counted as in-kind contributions only

2 “Professional Services” involve a community contracting with a firm to produce a product such as a marketing plan, study, air carrier proposal, etc.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)

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

2 State cash financial contribution

Local cash financial contribution

3a Airport cash funds

3b Non

- airport cash funds

3 Total local cash funds ( 3a + 3b )

4 TOTAL CASH FUNDING ( 1+2+3 )

In

- K ind contribution

5 a Airport In

- Kind contribution **

5b Other In

- Kind contribution **

5 TOTAL IN

- KIND CONTRIBUTION

( 5a + 5b )

6 TOTAL PROJECT COST ( 4+ 5 )

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.K. I S T HIS A PPLICATION S UBJECT T O R EVIEW B Y AN A FFECTED S T ATE 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 S tate for review.

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

L. I S T HE L EAD A PPLICANT OR A NY C O -A PPLICANTS D ELINQUENT O N A NY F EDERAL D EBT ?

(I F “Y ES ”, P ROVIDE E XPLANATION )

No Yes (explain)

______________________________________________________________________________

______________________________________________________________________________

APPLICATION CHECKLIST

I NCLUDED ? I TEM

For Immediate Action

Determine Eligibility

New Grants.gov users must r egister with www.grants.gov

. Existing Grants.gov users must verify ex isting www.grants.gov account has not expired

and the Authorized Organization R epresenta tive (AOR) is current

. For Submission by 5:00 PM EDT on July 31, 2014

Communities with active SCASDP grants: notify DOT/X50 of intent to terminate existing grant in order to be eligible for selection in FY2014

Complete Application for Federal Domestic Assistance (SF424) via www.grants.gov

S ummary Information schedule complete and used as cover sheet (see Appendix B )

A pplication of up to 20 one

- sided pages (excluding any letters from the community or an air carrier showing support for the application ) , to include:

• A description of the community’ s air service needs or deficiencies

.

• A strategic plan for meeting those needs under the Small Community Program

.

• A detailed description of the funding necessary for implementation of the community's project.

• An explanation of how the proposed project differs from any previous projects for which the community received SCASDP funds (if applicable).

• Designation of a legal sponsor responsible for adminis tering the program

.

• A motion for confidential treatment (if applicable)

– see Appendix D below.

# Application Under the Small Community Air Service Development Program

Docket DOT

- OST

- 2014

- 0113

July 30, 2014

Gulfport

- Biloxi International Airport

14035

- L Airport Rd Gulfport, MS 39503

Tel: 228

- 863

- 5951

Fax: 228

- 863

- 5953 

# Gulfport

- Biloxi Regional Airp ort Authority

DUNS

– 088924246

TAX ID

- 64

- 0602544

Congressional District Code

– MS 04

# Table of Cont ents

SECTION 1 Air Service Needs

SECTION 2 Strategic Plan

SECTION 3 Project Funding Plan

SECTION 4 Previous SCASDG Comparison

SECTION 5 Public

– Private Partnership

SECTION 6 Summary1 

## 1

– AIR SERVICE NEEDS

The past nine years have prese nted numerous economic challenges for the MS Gulf Coast. First, we experienced t he worst natura l disaster in American history Hurricane Katrina

, followed by record fuel prices and most recently

, the largest man

- made disaster in our nation ’s history t he De epwater Horizon Oil S pill that was compounded by the economic meltdown of

the Great Recession

. 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 . The noted declines in air service will continue to negatively affect the ability of the local economy to fully recover.

Our t ourism based economy has suffered a decline due to the loss of low co st air service in

our marke t

. The $1.7 billion dollar MS Gulf Coast tourism industry makes up 18 percent of all employment on the Mississippi Gulf Coast . It is not just important to the local economy ; it
represents the largest tourism economy in all of Mississippi. Nonstop l ow fa re air service

crucial in sustain ing this vital tourism sector

.

The loss of AirTran Airways low cost service in March 2011 marked the beginning of a precipitous decline of nearly 18% in passenger enplanements at GPT from 2010 through 2013. Enplanements t hrough June of 2014 are off an additional 9.8%.

Due to recent airline mergers and a cquisitions

, the scheduled air service offerings from GPT

have declined considerably. However, an exciting and realistic opportunity presents itself to

reverse the decli ne in air service at GPT

. Sun Country Airlines will operate from GPT to PIE

, 5

times a week beginning in August 2014. This service is a 1

- to

- 1 replacement for service recently lost when Vision Airlines, operating on behalf of the Beau Rivage Casino, ceas ed operations in June 2014.

The entry of Sun Country into the GPT market provides a unique and innovative opportunity to enhance the air service offerings at GPT. Our proposal is to begin 3x a week service from

GPT to Minneapolis/St. Paul , Minnesota (MSP ) . This service will both increase the low fare offerings at GPT and enhance the economic opportunities on the Mississippi Gulf Coast by providing direct, non

- stop service from Minneapolis/St. Paul to the Coast. Minnesota has more golfers per capita than any other state in the country and the Mississippi Gulf Coast has many of the finest golf courses to be found anywhere in the country designed by the likes of: Tom
Fazio, Jack Nicklaus, Davis Love and others

. This service may also become the lynchpin of a potential package of service that the carrier could offer from GPT. If this service is successful Sun Country may consider additional opportunities to connect GPT to other key markets.

The MS Gulf Coast C ommunity and Gulfport

- Biloxi Regional Airport Au thority believe that funds awarded through the SCASDP will provide the support needed to attract and retain

critical air service t o target underserved markets . We believe that our proposal meets the requirements of the Small Community Air Service Developm ent Program. The funds requested will address a major air service deficiency in the MS Gulf Coast R egion.2

The Gulfport

- Biloxi Regional Airport Authority is truly grateful for this opportunity and we thank you for considering our application.



## Locati on 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 commercial , industrial,

and entertainment focal point of the

area. Within 30 miles of GPT there are over 279,000 people with an Average Household Income (AHI) of $49,615. Within 60 miles, there are 857,000 people with an AHI of $50,787.



## Current Air Service

GPT 2014 ROUTE MAP

GPT is currently served by

American Airlines , De lta Air Lines

, United Airlines and US Airways. As stated above, Sun Country Airlines will begin service in August 2014 to

PIE under contract to the Beau Rivage

. Once Sun Country service begins, GPT will have nonstop

service to 4 hubs and 5 flights per

we ek to St. Petersburg

- Clearwater, FL (PIE).3 

## Air Service Deficiencies

Over the past 6 years, the national trend for many small hub airports has been one of continuous decline. There are numerous obstacles, most of which are outside the airports ’

dir ect control. The need for additional support at GPT is premised on obvious significant

declines in air service levels . A major component of the MS Gulf Coast market is leisure

inbound customers. The ability to capture this traffic is hinged on the avail ability of nonstop low cost air service options.

GPT has suffered significant declines in air service options since 2008. Nonstop destinations

fell from 10 in 2008 to only 5 today. As a result, total operations per week are down

- 51 % and

seats availabl e per week are down

- 48% in Q1 2014 compared to Q3 2008

.

GPT AVERAGE GROSS FARE COMPARISON

As a result of declining competition levels and the loss of AirTran Airways serv ice

, in 2011

GPT average fares are significantly higher than the national av erage and remain at near

record levels. DOT reports indicate average O&D one way fare incre ased to an all

- time high of $2 66 in Q1 2012

. Source: U.S. DOT, Origin

- Destination Passenger Survey, via DIIO

.4

GPT O&D PASSENGER HISTORY

GPT O&D passenger counts have followed a steady path of d ecline since the peak i n Q2

2010

. DOT reports indicate at peak Q2 2010 GPT served 91,275 passengers

. Q1 2014 DOT data indicates a steep decline down to 53,105 passengers. The l oss of low cost air service

from AirTran is the primary cause for this decline

.

GPT 2013 LEAKAGE

-

33% of passengers who would prefer to use

GPT make the trek to MSY instead.

Only 1% of the GPT Catchment uses MOB, which is a likely by

- product of the higher fares at MOB compared to GPT.

If passengers in the GPT Catchment Area are choosing to forego GPT, they’re doing so mainly

because of MSY’s lower fares and nonstop service options. Source: U.S. DOT, Origin

- Destination Passenger Survey, via DIIO

.5 

## Air Service Development Effort s

– Past 6 Years

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

retain air servi ce. 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 servic e 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 presentation s to targeted airlines.

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 priva te entities together to initiate air service development efforts. We also meet to discuss existing and new service initiatives with airline network planners on a regular basis at either headquarter meetings or in dustry functions like Jumpstart, Network an d Routes

.

Airline Meeting History:

2009 2010 2011

Delta Air Lines Continental Airlines Spirit Airlines US Airways Delta Air Lines Allegiant Air

American Airlines Spirit Airlines Frontier Airlines AirTran Airways Vision Airlines US Airways Allegiant Air Branson Air Express United Airlines

United Airlines Delta Airlines

2012 2013 2014

United Airlines Spirit Airlines Delta Airlines

Delta Airlines United Airlines United Airlines

American Airlines Delta Airlines Sun Country Airlines US Airways American Airlines Attending Routes in Sept. Spirit Airlines Sun Country Airlines

Southwest Airlines

In 2013 the Gulf Coast Regional Tourism Partnership, in coordination with the Gul fport

- Biloxi Regional Airport Authority completed an Economic Impact Study

. The study was authored by Ailevon Air Service Consulting with analytical support from Trillion Aviation.6 

## SECTION 2

– STRATEGIC PLAN

A Unique Opportunity

As stated earlier in t his proposal, Sun Country Airlines is operating under contract with the Beau Rivage to provide 5x per week service to PIE. In addition, Beau Rivage Resort & Casino, a MGM Resorts International property, currently flies passengers around twice per
quarter from Minneapolis to Gulfport

- Biloxi (GPT) on Sun Country Airlines. A transition from charters to scheduled service would provide a significant boost to the overall economy of an area that has seen a significant reduction in service in recent years. Beau Rivage supports this effort to transition to regularly scheduled service three days a week. Having lower air fares in the market will generate additional visitors and stimulate the local economy. Combining funding from the Small Community Air Service Dev elopment grant program with existing local support and incentives, this service would provide GPT the opportunity to open our market to new visitors traveling to the Mississippi Gulf Coast.



## Goals

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

service to Minneapolis/St. Paul (MSP)

.

 Attract more casino and golf tourism to the Mississippi Gulf Coast from MSP

 Lower fares and offer additional access to underserved markets

 Reverse the decline in GPT’s O&D traffic

 Reca pture traffic leaked to MSY



## Action Plan

In today’s volatile economic environment

, air carriers are extremely risk averse. Air carriers

continue to ration capacity and opportunity for growth has become a competition between airports across the country

. The addition of new air service in today’s environment requires a

solid business case depicting substantial demand

, it’s also backed by community support and in many cases a financial subsidy. The minimum revenue guarantee (MRG) has historically

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

With funds awarded through the Small Community Air Service Grant

, GPT is confident that

GPT

– MSP service will be successful in the long run.

Upon securing the air service through the use of a re venue guarantee, GPT wil l work with Sun Country as well as our public

- private partners to devise an aggressive ad campaign to promote

the new service in the MSP region . GPT will also create an aggressive ad campaign targeted7

at local customers in its air s ervice influence area. The marketing / promotional campaign will

launch a minimum of 90 days prior the service start date.

GPT will assist in the preparation of an agreement with the Sun Country i dentifying the revenue guarantee support allocation detai ls. 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 capacity and frequency levels

.

 It is intende d 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.

BUSINESS CASE FOR THE MISSISSIPPI GULF COAST BAS ED ON THE HARLINGEN (HR L)

– MINNEAPOLIS/ST. PAUL (MSP) PROXY

As discussed above, we believe we have the opportunity to leverage existing service with Sun Country into scheduled service to MSP. Harlingen, TX (HRL) is similar to the Mississippi Gulf

Coast in many ways. We believe that the Sun Count ry experience in Harlingen, TX serves as an excellent proxy for how well service from GPT to MSP could perform. Sun Country’s experience at HRL along the Texas Gul f Coast suggests that GPT service would likely

b lossom into a similarly strong market.

Sun Country began service between Minneapolis/St. Paul and Harlingen, TX in November 1999. The new service immediately resulted in strong demand to the Texas Gulf Coast, where there had previously been very few pass engers. The MSP market grew steadily to more than 100 daily passengers each way during the peak 1Q period.8

The entry of Delta Airlines into the nonstop market in 2013 stimulated 1Q 2014 demand by an
additional 35%, where the market now sits at 150 daily directional passengers:

Presently, the base Gulfport

– Minneapolis/St. Paul market is already larger in size than the

off

- peak Minneapolis/St. Paul

– Harlingen market, suggesting that peak seasonal demand to Gulfport has the potential to be larger than Harlingen if Sun Country were to begin service:9

During the previous four years of service, seasonal load factors to HRL have approached 90%. This is true even after Delta entered the market during 1Q14 and increased capacity by 124% :

Service to Gulfport from Minneapolis/St. Paul would not only benefit Gulfport, but also the other airports in the region. In fact, the Central Gulf Coast shows very strong demand to Minneapolis/St. Paul on an annual basis

– not just on a seasonal bas is.10

Thus, we believe that MSP

- GPT could be more successful than HRL . Why? Current fares are quite high at over $200 each way, and with the introduction of service, fares will likely

decline and create market stimulation to levels at or ex ceeding Harlingen:

The longevity of MSP

- HRL, along with Delta’s entry into the market, indicates that similarly strong demand exists from MSP to the Mississippi Gulf Coast. However, the HRL market
shows that for service to be successful, that service m ust be continuous and reliable. A SCASD grant would help ensure that Sun Country would be able to grow MSP

- GPT into a strong, sustainable, profitable market.

In summary:

1. MSP

- HRL is a successful market even with two

- carrier competition.

2. MSP

- GPT has a significant possibility of success given the existing size of the MSP

- Central Gulf Coast Region, which already exceeds Harlingen’s off

- peak demand.

3. The MSP

- Central Gulf Coast Region is far less seasonal than MSP

- HRL, making the feasibility of annual s ervice more likely than in HRL.

We believe that MSP

- GPT service would at a minimum be as successful as HRL. More realistically, GPT has the opportunity to be more successful thanks to a stronger demand base. Once stimulated by service and lower fares, MS P

- GPT is likely to support profitable,

year

- round service.11 

## Project Timeline

ACTIVITY 2014 to 2017

Negotiate Revenue Guarantee Agreement September 2014

Announce Service October 2014

Publish Schedule October 2014

Market N ew Route October 2014

– June 2015

Monitor Advance Bookings October 2014

– June 201 5

Begin Service February 201 5

Monitor Route Performance I n definitely

Submit Grant Status Reports to DOT Q1 2015

– Q1 2017

GPT will work wit h the public

- private partnership to secure additional funding for promotional / marketing support. We will also work closely with the Sun Country 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.



## 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 aggressiv e approach that demands attention an d presents itself as a valuable cost savings.

Historically the MS Gulf Coast Regional Convention and Visitors Bureau and Mississippi Development Authority have deployed innovative promotional strategies targeted at ent icing 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.1 2

HISTORICAL REBATE PROMOTION SUMMARY

Book two nights at a ho tel 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 for the Minneapolis/St. Paul service: Book two nights at a hotel property on the MS Gulf Coa st 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 Sun Country . We will aggressively market this offer with p ublic

- private partnership advertisement funding.



## SECTION 3

– PROJECT FUNDING PLAN

Project Description

The Gulfport

- Biloxi Regional Airport Authority is see king a grant in the amount of $3 50 ,000 from the Small Community Air Service Development Progra m to provide revenue and marketing support for the development of nonst op service to MSP.

The grant funds will be matched with $ 150,000 from public

- private partnership, $50,000 in Airport funds, and $ 81,600 in Airport In

- kind funds.13 

## Contact s

Clay Williams Jim Foster

Executive Director Assistant Executive Director Gulfport

- Biloxi International Airport Gulfport

- Biloxi International A irport

14035

- L Airport Road 14035

- L Airport Road Gulfport, MS 39503 Gulfport, MS 39503

Tel: 228

- 863

- 59 51 Tel: 228

- 863

- 5951

Fax: 228

- 863

- 5953 Fax: 228

- 8 63

- 5953

Email: cwilliams@flygpt.com Email: jfoster@flygpt.com



## Project Sponsor

The official sponsor of this project is the Gulfport

- Biloxi Regional Airport Authority.



## Critical Milestones

- Reporting

The effectiveness of the grant proposal objectives will be gauged through closely monitoring existing air service levels and ultimately through improvements in pa ssenger 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 nonstop air service to Minneapolis/St. Paul

 Annual O&D passenger growth of at least 7% after the first y ear 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.14 

## 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 indep endent 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 ex pected 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 a re 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

Princi ples (GAAP) as established by the Governmental Accounting Standards Board. 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 s pecifically 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 financi al 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 very successful with monitoring grant programs, given the tools and processes in place as standard operating procedure.



## SECTION 4

– PREVIOUS SCASDG COMPARISON

The Gulfport

- Biloxi Regional Airport Authority was awarded a SCAS D G in 2005. The 2005
grant w as amended from our original proposal due to changing needs of the airport and region

as a direct result of Hurricane Katrina. Our 20 14 grant proposal is substantial ly different in that

it seeks funding for a revenue guarantee program for a specifically i dentified air carrier , Sun Country Airlines, to provide acc ess to Minneapolis/St. Paul , Minnesota.

2005 SCASG SUMMARY

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

• $700,000

– Revenue Guarantee15 • $50,000

– Marketing / Promo / Market Assessment

• American Eagle began nonstop service from GPT

– ORD on December 13, 2007.

• The revenue guarantee funds were depleted o n April 2008. Due to increased operational costs associated with a significant increase in fuel costs, A merican Eagle

discon tinued the n onstop ORD service i n 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 range of destinations, thru use of a revenue guarantee, subsidy, o r 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

2014 SCASD PROPOSAL

 Commence 3x per week service to Minneapolis/St. Paul , Minnesota with Sun Country

Airlines

.

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

Minimum Revenue Guarantee

- $2 50 ,000

– Federal amount

Seat Purchase Promotion

- $ 100,000

– Federal am ount

Tourism Partner Marketing

- $ 150,000

Airport Marketing

- $50,000

Airport In

- ki nd (LANDING FEE WAIVER)

- $81,6 00

TOTAL $ 631,60016 

## S ECTION 5

– PUBLIC

- PRIVATE PARTNERSHIP

The Gulfport

- Biloxi International Airport and the Mississippi Gu lf 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, MS Gulf Coast Regional Convention and Visitor B ureau, 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 allocate d ($ 150,000 ) through the partnership will be used on supporting an aggressive advertisement campaign in the targeted Florida market.

• The MS Gulf Coast Regional Convention and Visitors Bureau is a consolidated tourism entity representing three coastal coun ties (Hancock, Harrison, Hancock)

.

• MS Gulf Coast Regional Convention and Visitors Bureau 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 Minneapolis/St. Pa ul metropolitan area

.

• 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.17 

## SECTION 6

- SUMMARY

 Detailed DOT fare information was provided depicting GPT ’s average fares have increased sharply and have surpassed all

- time highs (peak $ 266 for Q 1 201 2 )

.

 The community will provide a portion of the cost of the activity from local sources other than airport revenue source s 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,

in cluding business, education institutions, and other enterprises.

 Assistance will be used in a timely manner. (see project timeline)

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

service and low fare service alternative s. 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 request ed is 55% of t he project total.

 The applicant did previous receive an award in 2005 and include s an explanation of

how the 2012 request is different.

 The community has demonstrated commitment to and participation in the proposed grant project has been illustrated throug h 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.July 28, 2014

The Honorable Anthony Foxx Secretary, U.S. Department of Transportation 1200 New Jersey Ave, SE Washington, DC 20590

Dear Secretary Foxx:

I would like to express my support for Gulfport

- Biloxi International Airport (GPT)’s application for a Small Community Air Service Development Program Grant. The $350,000 grant is a critical element to helping GPT
restore lost air service. Leisure and business customers are crucial to the recovery and sustainability of t he MS Gulf Coast economy which has been deeply impacted in past years by Hurricane Katrina, the Gulf of Mexico oil spill and the nationwide economic downturn.

Due to the declining levels of overall airline competition and the loss of Gulfport

- Biloxi’s on ly low

- cost carrier in March of 2011, the Mississippi Gulf Coast tourism industry is missing much needed tourism revenue. As a result of the decline in air service, low cost fares are unavailable to the Mississippi Gulf Coast. Also, the Mississippi Gulf Coast region and business are hampered by a decline in nonstop flights and increasing air

fares.

The Gulfport

- Biloxi International Airport is aggressively pursuing new air service in an effort to kick start the local economy. The ultimate goal is to tar get carriers that can positively impact this tourist destination. The Small Community Air Service Development Grant is critical in finalizing an agreement with a targeted air carrier. It is my hope that you will give their application every possible con sideration.

Sincerely,

G ULF C OAST B USINESS C OUNCIL

Jack Norris

President

11975 Seaway Road, Suite A120
Gulfport, MS 39503

P : 228

- 897

- 2020 | F : 228

- 896

- 8384
www.msgcbc.org