August 27, 2010 

An Integrated Program of New Service Development via: 

Start-Up Cost Offsets, Advertising/Marketing, and Revenue Guarantees 

 In Support of New Scheduled Air Service to/from San Jose 

Sponsor: McClellan-Palomar Airport 

 Carlsbad, California 

 Peter Drinkwater, Director of County Airports, County of San Diego 

 Congressional Code: CA-050 

 Dun & Bradstreet Number: 1870326770000 

McCLELLAN-PALOMAR AIRPORT, CARLSBAD, CA

Proposal Under the Small Community Air Service Development Program 

 

Docket: DOT-OST-2010-0124

Before the Office of the Secretary of Transportation 

US Department of Transportation
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 2

TABLE OF CONTENTS

Section Page 

Introductory Letter of Support 3 

Summary Information 4 

Introduction 7 

Primary Objectives of Proposal 8 

Executive Summary 9 

Detailed Explanation of Proposal 14 

Expected Results 17 

Letters of Support 21 

Current Air Service 24 

Air Service Deficiencies 27 

Extenuating Factors Affecting Air Service 31 

Availability of Alternate Airports 34 

Use of Local/Federal Funds 35 

Public/Private Partnerships 36 

Implementation Timeline 39 

Air Service Advisory Groups 40 

Local Air Service Development Efforts 41 

In-kind Services from the Community 42 

Performance Measures 43 

Legal Sponsor 44 

Financial Controls 45 

Return on Investment 46 

DOT Exit Strategy 47 

Alternate Plan 48 

Airport Information 49 

Community Profile 50 

Comparison to Other Communities in Region 58 

Conclusions 60 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 3

INTRODUCTORY LETTER OF SUPPORT 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 4

SUMMARY INFORMATION 

Small Community Air Service Development Program 

Docket DOT-OST-2010-0124 

A. Applicant Information 

 Not a Consortium Community now receives EAS subsidy 

 Interstate Consortium Intrastate Consortium 

 Community previously received a Small Community Grant 

 If previous recipient, date of Grant: ____________________________ 

 expiration date of Grant: ___________________ 

B. Public/Private Partnership

Public: 

1. County of San Diego 

2. McClellan-Palomar Airport 

Private: 

 

1. Carlsbad Chamber of Commerce 

2. San Diego North Convention and Visitors Bureau 

3. San Diego North Chamber of Commerce 

4. San Diego North County Economic Development Council 

5. Palomar Airport Association 

6. Horizon Air 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 5

C. Project Proposal 

 Marketing Upgrade Aircraft New Route 

 Personnel Increased Frequency Low Fare Service 

 Travel Bank Service Restoration Subsidy 

 Surface Transportation Regional Service Other (Specify) 

 Revenue Guarantee Launch New Carrier 

 Start Up Cost Offset First Competitive Service 

 Study Secure Additional Carrier 

D. Existing Landing Aids at Airport

 Full ILS Outer/Middle Marker Published Instrument Approach 

 Localizer Other: GPS Approach

E. Project Cost 

1. Federal amount requested: $ 500,000 

2. State cash financial contribution: $ 0

3. Local cash financial contribution: $ 50,000

 3a. Airport cash funds: $ 25,000

 3b. Non-Airport cash funds: $ 25,000 

 3c. Total local cash funds: $ 50,000

4. TOTAL CASH FUNDING: $ 550,000

5. Local funds contributed from already existing

Programs of projects included in line 3c: $ 0

6. Local funds contributed from new commitments 

Or new resources included in line 3c: $ 50,000

7. Airport In-Kind contribution: $ Various

Description: Fee waivers: landing and terminal fees

8. Other In-Kind contribution: $ Various

Description: Advertising and marketing match money

9. TOTAL IN-KIND CONTRIBUTION: $ Undetermined

10. TOTAL PROJECT COST: $ 550,000
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 6

F. Enplanements at Airport

 2000: 73,383 

2001: 67,815

 2002: 55,864

 2003: 51,801

 2004: 52,583

 2005: 49,586

 2006: 55,645

 2007: 52,598

 2008: 40,683 

2009: 24,705 

G. Is Application Subject to Review by State Under Executive Order 12372 Process?

 This application was made available to the State on ______. 

 Program is subject to review, but has not been selected by the State. 

 Program is not covered. 

H. Is Applicant Delinquent on any Federal Debt? 

 No 

 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 7

INTRODUCTION 

The McClellan-Palomar Airport in Carlsbad, California has seen dramatic passenger declines in 

the last two years. That doesn’t mean the market is shrinking, and demand for air service is 

declining. The reality is, with seat cuts and flight frequency reductions at the McClellan-Palomar 

Airport, more and more Carlsbad area passengers are being forced to use other airports in the 

region to access the national air transportation system. 

While this passenger “leakage” is common in markets with smaller airports served by fewer 

carriers, it creates a unique problem in southern California. The Carlsbad area of north San 

Diego County features some of the most congested freeways in the country. Passenger 

leakage to both San Diego Lindbergh Field and Los Angeles International (LAX) adds to this 

congestion, creating a situation where accessing the 

national air transportation system is especially difficult 

for Carlsbad area travelers. 

To better quantify this “leakage” of passengers, the 

McClellan-Palomar Airport commissioned a True 

Market/Leakage Study that was completed for this 

Grant proposal in August of 2010. The Study was 

designed to better determine the size of the Carlsbad market and the potential for additional air 

service. The study found that the immediate Carlsbad catchment area generates a total of 

almost 3.3 million origin and destination passengers per year. The McClellan-Palomar Airport 

retains less than 2% of those passengers. It is clear additional service is needed. 

The McClellan-Palomar Airport proposes to use a combination of locally raised funding in 

conjunction with federal Small Community Air Service Development Grant funding in support of 

the addition of a new airline to the market: Horizon Air. In the Airport’s discussions with Horizon 

Air, most recently at an in-person meeting at the Airport in June of 2009, the Airline indicated an 

interest in flying its Bombardier Q400 aircraft on a routing from Carlsbad to San Jose. Horizon is a 

partner is this application, writing a letter of support. This routing fills a major need for Carlsbad 

service, by linking the Carlsbad region non-stop, for the first time, to the San Francisco Bay Area. 

The Bay Area ranks as Carlsbad’s top combined destination. But Horizon has indicated it must 

have risk mitigation in place to consider this unproven market. The Airport seeks a partnership 

with the DOT to ensure this new service is launched. 

“...the immediate Carlsbad 

catchment area generates a total 

of almost 3.3 million... passengers 

per year [but]... the Airport retains 

less than 2% of those passengers.” 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 8

PRIMARY OBJECTIVES OF PROPOSAL 

Objectives for Program: 

 Increase connectivity between California intrastate markets 

 Create better opportunities for business connections to and from Carlsbad 

 Increase connections 

 Recruit a competing airline to the market 

 Increase the use of local air service 

 Decrease inefficient leakage to other airports 

Means to Achieve Objectives: 

 Continue discussion with Horizon Air and other potential carriers about entrance 

into the market 

 Develop risk mitigation package 

 Work towards launch of routes by summer of 2011 

Course of Action to Support Means: 

 Provide start-up cost offsets 

 Make available revenue guarantee in first 12-months of new service 

 Initiate marketing and advertising campaign to publicize new air service 

 Work with local business partners to ensure new service success 

 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 9

EXECUTIVE SUMMARY 

Despite serving one of the largest catchment areas in southern California, the McClellanPalomar Airport in Carlsbad, California has been underserved for the last several decades 

compared to the other airports in the region. The Airport only has service on one route – to Los 

Angeles International Airport (LAX) – on one airline, SkyWest operating as United Express. 

The Carlsbad catchment area, seen in orange in Figure 1, is home to almost 1.15 million people 

as of the latest US Census estimates. The Carlsbad area comprises 12.3% of the overall 

population of the entire 

shaded area – the area 

that includes San Diego, 

Carlsbad, Orange 

County, and Long Beach. 

The total population of 

the shaded area in Figure 

1 – which is entirely within 

an hour’s drive of the 

McClellan-Palomar 

Airport – is 9.3 million, 

making it one of the most 

populous one-hour 

catchment areas of any 

airport in the country. 

Despite comprising 12% 

of the region’s 

population, most of 

Carlsbad catchment 

area passengers fly from 

other airports in the 

region, largely due to the 

breadth of service offered at those other airports. 

Despite the relative size of the Carlsbad catchment area, the Airport has much less service than 

other California markets home to more than a million people. As of July of 2010, the McClellanCatchment Area Population Share of Pop.

Carlsbad/McClellan-Palomar Airport 1,146,522 12.3%

Santa Ana-Orange County/John Wayne Airport 2,635,931 28.3%

Long Beach/Daugherty Field 3,621,575 38.9%

San Diego Lindbergh International 1,902,720 20.4%

Total of Region 9,306,748 100.0%

FIGURE 1: The McClellan‐Palomar Airport Catchment Area

Relative to the Catchments of Other Southern California Airports
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 10

Palomar Airport had service to just one non-stop destination – LAX (see Figure 2). As other 

markets are finally seeing a rebound in seats during the summer of 2010, Carlsbad is still having 

flights and available seats trimmed from the market. In July of 2009 the Carlsbad market had an 

average of 6.2 departures per day to LAX, with 184 daily available departing seats. By July of 

2010, SkyWest cut daily departing flights to 5.4 – a loss of 21 departing seats per day, on 

average, or 11.4% of all 

Carlsbad seats. 

The McClellan-Palomar 

Airport has seen 

dramatic passenger 

declines in the last two 

years, after a near 

record 2007. That 

doesn’t mean the 

market is shrinking, and 

demand for air service 

is declining. The reality 

is, with seat cuts and 

flight frequency 

reductions at the 

McClellan-Palomar Airport, more and more Carlsbad area passengers are being forced to use 

other airports in the region to access the national air transportation system. 

In the year ended first quarter 2007 the McClellan-Palomar Airport saw an average of 199 

passengers per day each way (PDEW) at an average fare of $147 each way (see Figure 3 on 

next page). The number of passengers using the Airport dropped to just 73.5 passengers per day 

each way (PDEW) on average by the year ended first quarter 2010 – a loss of 125.5 passengers 

per day each way. 

Non-Stop Departures Seats Departures Seats Capacity

Carrier Destination Per Day Per Day Per Day Per Day Change

United LAX 6.2 185 5.5 164 -11.4%

United Total 6.2 185 5.5 164 -11.4%

Carlsbad Total 6.2 185 5.5 164 -11.4%

Jul-09 Jul-10

FIGURE 2: Current Service at the McClellan‐Palomar Airport,

July 2010; Source: Airline Schedule Data
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 11

Most of those “lost” passengers found their way to service at other airports in the region, such as 

San Diego International and John Wayne Airport in Orange County. Fares are up since 2007 – 

and are much higher than the fares found at other airports in the region – helping to spur 

passenger “leakage.” Moreover, available seats are down 32% in the last two years at the 

McClellan-Palomar Airport. 

Of all southern California markets, Carlsbad has the third highest average fare for the year 

ended first quarter 2010, at an average of $151 each way (see Figure 4 on next page). Only Los 

Angeles and Palm Springs had higher fares in the same period. Carlsbad’s average fare is 

higher than the fare at San Diego, Ontario, and Orange County – the main airports that most 

Carlsbad catchment area passengers use. 

The lower fares found at other airports in the region cause Carlsbad catchment area passengers 

to clog southern California freeways to access air service at other airports. The McClellanPalomar Airport commissioned a leakage study that was completed for this Grant proposal in 

August of 2010, to better determine the size of the Carlsbad market and the potential for 

150,640

118,830

94,330 89,980

80,870 79,670

132,940

102,230

58,710

47,220

7,240

6,670

6,450

6,190

6,050 5,470

12,300

10,900

9,010

6,430

216.3

171.9

138.1

131.7

119.1 116.6

199.0

155.0

92.8

73.5

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

YE 2001-Q1 YE 2002-Q1 YE 2003-Q1 YE 2004-Q1 YE 2005-Q1 YE 2006-Q1 YE 2007-Q1 YE 2008-Q1 YE 2009-Q1 YE 2010-Q1

PDEW International Domestic

$181

$168

$172

$177

$180

$186

$147

$139

$156

$151

FIGURE 3: O&D Passengers and Average Fares at McClellan‐Palomar Airport,

YE1Q01 – YE1Q10; Source: US DOT Table DB1A
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 12

additional air service. The study found that the immediate Carlsbad catchment area, as seen in 

Figure 1, generates a total of almost 3.3 million origin and destination passengers per year. 

The majority of Carlsbad area 

passengers currently fly out of 

the San Diego airport at 

Lindbergh Field. As of the year 

ended first quarter 2010, the 

McClellan-Palomar Airport’s 

catchment area generated 

2,485,803 total passengers who 

flew out of San Diego (see 

Figure 5). The Airport’s 

catchment area generated 

an additional 518,394 

passengers who flew out of Los 

Angeles International (LAX); 

184,677 passengers who flew 

out of John Wayne Airport in Orange County; 59,393 passengers who flew out of Ontario; and 

6,403 passengers who flew out of Long Beach. Only 53,520 Carlsbad-area passengers actually 

flew out of the McClellan-Palomar Airport as of the year ended first quarter 2010 – or 1.6% of the 

catchment area’s total passengers. In other words, Carlsbad leaks 98.4% of its origin and 

destination passengers to other airports in southern California. 

It will be difficult for a new airline in the market to re-capture these “leaked” passengers. That is 

why it is essential the Airport offer risk mitigation to the new carrier – to make sure the new carrier 

has a sufficient “ramp up” phase 

to win back passengers to the 

McClellan-Palomar Airport. 

The Airport has recently hosted 

Horizon Air officials, on field, for a 

tour and an in-person meeting in 

the summer of 2010 to explore 

$182

$175

$151

$150

$141

$140

$133

$124

$111

$102

$75 $95 $115 $135 $155 $175

Palm Springs, CA

Los Angeles, CA

Carlsbad, CA

San Diego, CA

Orange County, CA

Ontario, CA

Imperial, CA

Burbank, CA

Long Beach, CA

Visalia, CA

FIGURE 4: O&D Average Fares at Southern California Airports

YE1Q10; Source: US DOT Table DB1A

Airport Passengers PDEW Share

1 SAN San Diego, CA 2,485,803 3,405.2 76.0% 

2 LAX Los Angeles, CA 518,394 710.1 15.8% 

3 SNA Orange County, CA 184,677 253.0 5.6% 

4 ONT Ontario, CA 59,393 81.4 1.8% 

5 CLD Carlsbad, CA 53,520 73.3 1.6% 

6 LGB Long Beach, CA 6,403 8.8 0.2% 

Total Carlsbad Area Passengers 3,270,633 4,480 100.0% 

Rank

FIGURE 5: Carlsbad Area O&D Passengers by Airport Used

YE1Q10; Source: Sixel Consulting Group True Market Study, 2010
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 13

options for new service. Horizon has indicated it does find interest in the Carlsbad market. It 

would like to serve San Jose non-stop from Carlsbad, but it will not enter the market without 

marketing support, start-up cost offsets, and a revenue guarantee. The McClellan-Palomar 

Airport seeks this Small Community Air Service Development Grant to provide this start-up 

support, and to move Carlsbad up Horizon’s list of communities for new service. 

Horizon is a partner in this project, submitting a letter of support to the Airport, and to the 

Department of Transportation. If Grant money is awarded, it is likely Horizon will enter the 

Carlsbad market by the summer of 2012. 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 14

DETAILED EXPLANATION OF PROPOSAL 

The McClellan-Palomar Airport proposes to use a combination of locally raised funding in 

conjunction with federal Small Community Air Service Development Grant funding in support of 

the addition of a new airline to the market: Horizon Air. In the Airport’s discussions with Horizon 

Air, most recently at an in-person meeting at the Airport in June of 2009, the Airline indicated an 

interest in flying its Bombardier Q400 aircraft on a routing from Carlsbad to San Jose (see Figure 

6). 

This routing fills a major need for Carlsbad service, by linking the Carlsbad region non-stop, for 

the first time, to the San Francisco Bay Area. The Bay Area ranks as Carlsbad’s top combined 

destination, when taking into account all passengers traveling to all of the Bay Area airports – 

San Jose, San Francisco, and Oakland. The route also 

provides one-stop connections to many of Carlsbad’s 

major origin and destination passenger markets on 

Horizon, Alaska, and its partners, American and Delta. 

It effectively adds four brands to the Carlsbad market, 

as well, through airline codeshares on the route. 

The McClellan-Palomar Airport seeks a Small 

Community Air Service Development Grant, in the 

amount of $500,000, to help mitigate Horizon’s initial 

monetary risk in launching service in an unproven 

market. 

The Airport proposes two daily flights on the route in each direction. The route between the 

McClellan-Palomar Airport and San Jose’s Mineta International Airport would cover 393 miles in 

a flight time of one hour and three minutes, on average, assuming an average groundspeed of 

325 knots on a Bombardier Dash 8 Q400 aircraft seating 76 in an all-economy layout (see Figure 

7). The block time on the flight, from gate to gate, will be one hour and 30 minutes, with 27 

minutes added for total taxi time. 

FIGURE 6: Proposed Route:  

Carlsbad – San Jose
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 15

The proposed schedules work within the framework of current Alaska Airlines, American Airlines, 

Delta Air Lines, and Horizon Air service at San Jose. The flight times do not take into account 

upper level winds or weather. For the purposes of these schedules it is assumed an aircraft 

would overnight at Carlsbad, where Horizon might be able to take advantage of free overnight 

parking offered as part of this proposal (see Figure 7). 

Origin Destination Departs Arrives Block Time Equipment 

CLD SJC 5:30am 7:00am 1:30 DH4 

SJC CLD 12:00n 1:30pm 1:30 DH4 

CLD SJC 2:15pm 3:45pm 1:30 DH4 

SJC CLD 8:00pm 9:30pm 1:30 DH4 

The scheduled is timed to connect into the first set of flights offered by Alaska/Horizon in the 

morning, including early morning Hawaii flights (see Figure 7). Additionally, the flights are timed 

to offer connectivity to the Pacific Northwest and the east coast. The flights are also timed for 

the Carlsbad business traveler, with an early morning Carlsbad departure and a late evening 

return flight. 

The McClellan-Palomar Airport proposes that a small portion of the cost of starting the new 

service be supported up-front with federal funds from the Small Community Air Service 

Development Program. Of the total Grant request of $500,000, the entire amount will be used 

for a revenue guarantee and start-up cost offsets. The Airport’s local share, which is $50,000, will 

be used for marketing and advertising projects, with 

only a small portion of the Grant award going to 

immediate start-up costs. The federal share of the 

project will be $500,000. 

The McClellan-Palomar Airport projects that the bulk 

of the grant money be available to provide 

insurance in case Horizon Air incurs a loss during the 

first year of operations. With demand for intrastate service in the Carlsbad market, and demand 

for connectivity over the Alaska/Horizon focus cities, the Airport projects the new flights will be 

profitable within one year. 

FIGURE 7: Proposed Schedule,  

Carlsbad – San Jose

“The flights are... timed for the 

Carlsbad business traveler, with an 

early morning Carlsbad departure 

and a late evening return...” 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 16

If, for some unforeseen reason, service is not commenced in a timely manner by Horizon, the 

McClellan-Palomar Airport proposes to use federal grant money awarded under the Small 

Community Air Service Development Program for other carriers that can provide connections to 

a large origin and destination market in the west, or connectivity through a large hub. The 

Airport will continue its discussions with all other than can provide additional seats to strong 

markets. Since the community has never before received a Small Community Air Service 

Development Grant, it will have no limitations on which new hub the DOT could fund. Among 

the options are California Pacific Airlines service to intra-state California destinations; Delta 

service to Salt Lake City; US Airways service to Phoenix; Frontier Airlines service to Denver; and/or 

United service to Denver. The Airport will not, however, be limited by this list of potential 

destinations, as the landscape for service could change before the Grant is awarded. 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 17

EXPECTED RESULTS 

Route Specific Data: Carlsbad – San Jose 

Horizon service to San Jose would offer the McClellan-Palomar Airport its first shot at true 

competition in several years – since US Airways left the market after the merger with America 

West Airlines. Moreover, the San Francisco Bay Area currently ranks as Carlsbad’s largest origin 

and destination passenger market, averaging more than 434,000 annual “true” passengers, 

including those flying from other airports in the region – but not including those who make the 

drive. The service would offer one-stop connections in 13 markets over San Jose (see Figure 8) 

FIGURE 8: Connections Over San Jose on Alaska/Horizon and Codeshare Airlines,  

YE1Q10; Source: Sixel Consulting Group Hub Builder
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 18

The Airport’s August 2010 True Market/Leakage Study shows that the Carlsbad market currently 

produces 1,531 unstimulated origin and destination passengers per day each way to 

destinations that naturally connect over the Alaska Airlines/Horizon Air San Jose focus city, 

including 595 passengers per day each way to and from the San Francisco Bay Area (see Figure 

9). 

In all, the Carlsbad – San Jose route has the potential to capture 38% of the current passengers 

flying in and out of the Carlsbad region (see Figure 9). This includes a large majority of 

passengers who currently fly from other airports in southern California to the Bay Area. At the 

same time, the San Jose focus city could capture 26% of the current revenue generated in the 

Carlsbad market – most of which is generated at other airports in the region, such as San Diego 

and Los Angeles International (LAX). 

Currently, Alaska/Horizon markets from Carlsbad that flow over the San Jose focus city generate 

more than $127 million in annual airline revenue, or $174,000 in revenue per day each way 

(RDEW) to and from Carlsbad (see Figure 9). This includes revenue that is “leaking” from the 

Carlsbad market to other airports in southern California. 

San Jose 

37%

Other 

Hubs 63%

San Jose 

26%

Other 

Hubs 74%

Estimated Carlsbad O&D Revenue $566,074,685 100%

Revenue Flowing Over SJC $147,179,418 26%

Estimated Carlsbad O&D Passengers 3,270,633 100%

Passengers Flowing Over SJC 1,117,531 37%

FIGURE 9: O&D Passengers and Revenue Over San Jose on Alaska/Horizon and Codeshare Airlines,  

YE1Q10; Source: Sixel Consulting Group Hub Builder
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 19

The Alaska/Horizon focus city at San Jose has potential to capture large portions of traffic in 14 

of Carlsbad’s largest origin and destination markets. The San Jose focus city is especially well 

positioned to capture traffic traveling to the Bay Area, the Pacific Northwest, and the middle of 

the country, from 

the 

intermountain 

west to the 

Midwest – 

including large 

markets such as 

the San 

Francisco Bay 

Area, itself, which 

produces 595 

passengers per 

day each way 

(PDEW) to and 

from Carlsbad as 

of the year ended first quarter 2010,; Sacramento, which produces 171 PDEW; Seattle/Tacoma, 

which produces 154 PDEW; Chicago, which produces 147 PDEW; Dallas/Ft. Worth, which 

produces 91 PDEW; and Salt Lake City, which produces 79 PDEW as of the year ended first 

quarter 2010 (see Figure 10). All of those figures are generated by the Airport’s August 2010 

Leakage Study, and focus city connection analysis completed using the Sixel Consulting Group 

Hub Builder software. 

It is likely Horizon would stimulate the passenger market significantly in Carlsbad, while curbing 

the huge amounts of leakage by a significant rate. Horizon’s low fare structure has been shown 

to have a similar impact in other markets in the west. This gives the Airport reason to be 

optimistic that the service can be self-sustaining in as little as 12 months from the start of flights. 

Carlsbad’s top eight true revenue markets that would flow over San Jose on Alaska/Horizon, 

including “leaked” revenue from the Carlsbad catchment area that currently flows through 

other southern California airports, each produce more than $10,000 in revenue per day each 

way (RDEW) (see Figure 11). The top potential Carlsbad revenue market over Alaska/Horizon’s 

434,164

124,934

112,634

107,491

66,247

57,924

53,237

50,335

40,628

27,490

14,399

11,530

11,160

5,358

594.7

171.1

154.3

147.2

90.7

79.3

72.9

69.0

55.7

37.7

19.7

15.8

15.3

7.3

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000

San Francisco Bay Area - 1

Sacramento - 2

Seattle/Tacoma - 3

Chicago Area - 4

Dallas/Ft Worth Area - 5

Salt Lake City - 6

Portland - 7

Minneapolis - 8

Atlanta- 9

Austin - 10

Spokane - 11

Boise- 12

Kahului - 13

Kona - 14 Annual Passengers PDEW

FIGURE 10: Top O&D Passenger Markets Over San Jose on Alaska/Horizon,  

YE1Q10; Source: Sixel Consulting Group Hub Builder
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 20

San Jose focus city is the San Francisco Bay Area, itself, producing more than $47,000 in revenue 

per day each way (RDEW). 

The Alaska/Horizon focus city at San Jose is in a unique position to generate additional traffic 

and revenue to any number of Carlsbad’s top true origin and destination markets. 

Alaska/Horizon service has the potential to capture as much as $127 million in current airline 

revenue, not 

taking into 

account any 

revenue 

stimulation 

through lower 

fares and 

additional nonstop service. 

Moreover, the 

San Jose focus 

city of 

Alaska/Horizon 

is also designed 

to connect to 

codeshares on many other airlines, such as American and Delta, whose connections are 

included in this analysis. 

The Airport believes there is sufficient passenger traffic and revenue that would flow over 

Alaska/Horizon’s San Jose focus city to make the service profitable. Alaska/Horizon would not 

be forced to offer rock-bottom fares in Carlsbad to be competitive – even fares slightly higher 

than those found in other western markets, and at other southern California airports, would be 

considered low for local Carlsbad travelers. The McClellan-Palomar Airport believes in the San 

Francisco Bay Area market, and must develop a risk mitigation package to ensure Horizon can 

enter the market without major up-front investments.

34,385,925

17,138,958

13,705,641

11,313,907

10,848,933

8,083,719

7,402,696

7,384,977

5,810,995

3,730,360

2,754,319

1,838,959

1,389,356

1,294,971

47,104.0

23,478.0

18,774.9

15,498.5

14,861.6

11,073.6

10,140.7

10,116.4

7,960.3

5,110.1

3,773.0

2,519.1

1,903.2

1,773.9

0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000

San Francisco Bay Area - 1

Chicago Area - 2

Seattle/Tacoma - 3

Dallas/Ft Worth Area - 4

Sacramento - 5

Atlanta - 6

Minneapolis- 7

Portland - 8

Salt Lake City - 9

Austin - 10

Kahului - 11

Spokane - 12

Boise - 13

Kona - 14

FIGURE 11: Top O&D Revenue Markets Over San Jose on Alaska/Horizon,  

YE1Q10; Source: Sixel Consulting Group Hub Builder
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 21

LETTERS OF SUPPORT 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 22
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 23
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 24

CURRENT AIR SERVICE IN CARLSBAD 

The McClellan-Palomar Airport has seen continuous flight reductions over the last three years, 

resulting in fewer local available seats, and ultimately, fewer passengers. Many markets can tell 

the same story. But the story in Carlsbad is punctuated by the fact that the flight reductions 

have drastically increased the region’s passenger “leakage” to other airports in southern 

California. This is a more critical situation in southern California than in almost any other part of 

the country, due to the heavy congestion on virtually all freeways in and out of Carlsbad, at 

virtually all times of day. The McClellan-Palomar Airport must do a better job serving its local 1.13 

million population by attracting additional air service. 

Current Passenger Traffic in the Carlsbad Market 

Since the beginning of 2007 the McClellan-Palomar Airport has gone from an average of 7.4 

daily departures to an average of 4.3 daily departures as of April 2010 – a loss of 42% of daily 

flights (see Figure 12). During the same time period Carlsbad has seen a loss of an average of 95 

daily departing seats – or 42%.

FIGURE 12: Average Daily Departures, Daily Available Seats, Daily Onboard Passengers

Source: US DOT T100 Data, June 2008 – April 2010

225 226 225 229 229 226 223 229

213 216

238 233

219

208

184 189 185

208

195

201

172

185

165

173

184

163

189

180

172

204

182

192

171

183

169

156 160

145

170

111 130

123 123

131 128 125

131

118

112 113

138

119

97 98 99 96

89

101 98

103

83 88

74 74

66 61

69 73

62

69 71 66 62

73

66

59 60 61

78

61

0

50

100

150

200

250

Available SDEW Onboard PDEW Flights Per DEW

7.3 7.3 7.3 7.4 7.4 7.4 7.3 7.4

6.9 7.0

7.6 7.5

7.1

6.8

6.1 6.3 6.2

6.9

6.5 6.7

5.7

6.2

5.5

5.8

6.1

5.4

6.3

6.0

5.7

6.8

6.1

6.4

5.7

6.1

5.6

5.2 5.3

4.8

5.7

4.3
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 25

While flights in Carlsbad are down 42%, and daily seats are down an identical 42%, onboard 

passengers haven’t fallen as far. This means flights are going out with more passengers per flight 

– or a higher load factor. Carlsbad’s onboard passengers have fallen by 32% - which is a large 

loss in passengers flowing through the airport – but it is 10% less than the loss in seats and flights in 

the market (see Figure 12). 

In preparation for this application for Grant funding, the McClellan-Palomar Airport 

commissioned a True Market/Leakage study, so that it could better understand its local air travel 

market before requesting federal funding for additional flights. The study results, released in 

August of 2010, show that the Airport retains just 1.6% of the passengers generated by its local, 

immediate catchment area. 

This is illustrated very clearly when passenger retention is analyzed in Carlsbad’s top 20 true 

passenger markets (see Figure 13). San Francisco ranks as Carlsbad’s top true passenger 

market, generating more than 187,000 total passengers per year as of the year ended first 

quarter 2010. But just 5.7% of those passengers used the McClellan-Palomar Airport, with most 

using service provided by airlines at San Diego. 

This passenger “leakage” makes the Carlsbad market appear to be much smaller than it really 

is. When the airlines considering Carlsbad service pull DOT data, and it shows San Francisco as a 

market with just 6.4 passengers per day each way (PDEW), they immediately lose interest in 

serving the market (see Figure 13). But that simple analysis is missing the 260 passengers per day 

Total

Rank Airport Paxs PDEW Paxs PDEW Paxs PDEW Paxs PDEW Passengers

1 San Francisco, CA 142,542 195.3 10,590 14.5 29,726 40.7 4,688 6.4 187,546 

2 Oakland, CA 113,413 155.4 8,426 11.5 23,651 32.4 3,730 5.1 149,220 

3 New York J F Kennedy, NY 111,717 153.0 8,300 11.4 23,298 31.9 3,674 5.0 146,988 

4 Seattle/Tacoma, WA 104,528 143.2 7,766 10.6 21,798 29.9 3,438 4.7 137,529 

5 Las Vegas, NV 102,711 140.7 7,631 10.5 21,420 29.3 3,378 4.6 135,140 

6 Sacramento, CA 94,932 130.0 7,053 9.7 19,797 27.1 3,122 4.3 124,905 

7 Phoenix, AZ 87,602 120.0 6,508 8.9 18,269 25.0 2,881 3.9 115,260 

8 San Jose, CA 86,701 118.8 6,441 8.8 18,081 24.8 2,852 3.9 114,075 

9 Denver, CO 76,754 105.1 5,702 7.8 16,007 21.9 2,524 3.5 100,988 

10 Chicago O'Hare, IL 64,285 88.1 4,776 6.5 13,406 18.4 2,114 2.9 84,582 

11 Dallas/Fort Worth, TX 54,184 74.2 4,025 5.5 11,300 15.5 1,782 2.4 71,291 

12 Boston, MA 50,901 69.7 3,782 5.2 10,615 14.5 1,674 2.3 66,971 

13 Portland, OR 50,767 69.5 3,772 5.2 10,587 14.5 1,670 2.3 66,795 

14 Washington Dulles, DC 48,800 66.8 3,625 5.0 10,177 13.9 1,605 2.2 64,207 

15 Salt Lake City, UT 47,907 65.6 3,559 4.9 9,991 13.7 1,576 2.2 63,033 

16 New York New ark, NJ 43,619 59.8 3,241 4.4 9,096 12.5 1,435 2.0 57,391 

17 Honolulu, HI 43,505 59.6 3,232 4.4 9,073 12.4 1,431 2.0 57,241 

18 Atlanta, GA 41,471 56.8 3,081 4.2 8,649 11.8 1,364 1.9 54,565 

19 Minneapolis, MN 32,779 44.9 2,435 3.3 6,836 9.4 1,078 1.5 43,128 

20 Philadelphia, PA 32,542 44.6 2,418 3.3 6,786 9.3 1,070 1.5 42,816 

San Diego, CA Los Angeles, CA Other Airports Orange County, CA

FIGURE 13: Carlsbad’s Top 20 O&D Passenger Markets by Airport Used

YE1Q10; Source: Sixel Consulting Group True Market/Leakage Study, August 2010
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 26

each way (PDEW) flying out of other southern California airports. It is a fair assumption that the 

right service pattern would retain, at least, a small portion of these “leaking” passengers. 

Air Carrier Market Share in Carlsbad’s “True Market” 

While United Express/SkyWest has a 100% market share of both passengers and revenue at the 

McClellan-Palomar Airport due to its position as the only carrier offering service at the Airport, 

United does not rank as the top airline for Carlsbad catchment area passengers. It is important 

in markets such as Carlsbad to analyze not just the market share at the local Airport, but the 

market share including those 

passengers who “leak” to other 

airports in the region. 

The Airport’s recently completed 

True Market/Leakage Study 

shows that most Carlsbad 

catchment area passengers use 

Southwest Airlines – not United 

service provided directly at the 

Airport, itself (see Figure 14). 

These Southwest passengers are 

“leaking,” primarily, to San Diego 

and Los Angeles International (LAX). Despite the fact that Southwest does not serve Carlsbad, it 

captures almost a third of all Carlsbad catchment area passengers at other airports in southern 

California. United ranks as the market’s second largest carrier, with 14% of the total market, 

while American ranks third with 12.5% of the market’s origin and destination passengers. 

Somewhat surprisingly, low cost carriers not named Southwest draw just a combined 6.6% of 

Carlsbad area passengers, which suggests fare is not the major consideration in choosing with 

airline and airport to use. 

In direct reference to this proposal, it must be noted that Alaska Airlines and Horizon Air capture 

just 5.9% of Carlsbad area passengers as of the year ended first quarter 2010 (see Figure 14). This 

is an indication that both airlines need a stronger brand presence in the Carlsbad market, and it 

further explains why service to Carlsbad might be attractive to the Alaska Air Group. 

Airline Passengers PDEW Share

1 Southw est 1,062,528 1,455.5 32.5% 

2 United 456,948 626.0 14.0% 

3 American 408,645 559.8 12.5% 

4 Delta (+Northw est) 331,287 453.8 10.1% 

5 US Airw ays 213,731 292.8 6.5% 

6 Continental 206,610 283.0 6.3% 

7 Alaska 191,451 262.3 5.9% 

8 jetBlue 86,228 118.1 2.6% 

9 Virgin America 67,919 93.0 2.1% 

10 Frontier 62,240 85.3 1.9% 

Total of Above 3,087,587 4,230 94.4% 

Total Carlsbad Area Passengers 3,270,633 4,480 100.0% 

Rank

FIGURE 14: Carlsbad’s True Airline Passenger Share

YE1Q10; Source: Sixel Consulting Group True Market Study
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 27

AIR SERVICE DIFFICIENCES IN CARLSBAD 

The McClellan-Palomar Airport’s recently completed True Market/Leakage Study shows that the 

Carlsbad catchment area produces enough passengers – almost 3.3 million as of the year 

ended first quarter 2010 – to fill an average of 59 departing Q400 aircraft everyday of the year. 

This large, and growing, market has been underserved for years. But the lack of service is more 

apparent as the community grows (now 1.13 million residents in the immediate catchment 

area), and as freeways in southern California become more congested and difficult to 

navigate. 

When Carlsbad’s 

combined origin and 

destination passenger 

market areas and 

analyzed the level by 

which the region is 

underserved becomes 

even more apparent. 

The San Francisco Bay 

Area’s combined market 

area generates almost 

618 passengers per day 

each way (PDEW) to 

and from Carlsbad as of 

the year ended first 

quarter 2010 (see Figure 

15). Enough passengers 

travel between Carlsbad 

and the Bay Area each 

day to support 10 flights 

in each direction on 76-

seat Q400 aircraft with an average load factor of 91%. 

While San Jose is the least used Bay Area airport for Carlsbad catchment area passengers, it still 

generates 156 passengers per day each way (PDEW) as of the year ended first quarter 2010 (see 

Airport Area Paxs Airport Paxs Share of Total PDEW

1 San Francisco Bay Area 450,840 13.8% 617.6 

San Francisco, CA 187,546 41.6%

Oakland, CA 149,220 33.1%

San Jose, CA 114,075 25.3%

2 New York/Newark 221,344 6.8% 303.2 

New York J F Kennedy, NY 146,988 66.4%

New York Newark, NJ 57,391 25.9%

New York La Guardia, NY 16,964 7.7%

3 Seattle/Tacoma 137,529 4.2% 188.4 

4 Las Vegas 135,140 4.1% 185.1 

5 Sacramento 124,905 3.8% 171.1 

6 Washington/Baltimore 118,845 3.6% 162.8 

Washington Dulles, DC 64,207 54.0%

Baltimore, MD 33,778 28.4%

Washington National, DC 20,860 17.6%

7 Phoenix 115,260 3.5% 157.9 

8 Chicago 114,318 3.5% 156.6 

Chicago O'Hare, IL 84,582 74.0%

Chicago Midway, IL 29,736 26.0%

9 Denver 100,988 3.1% 138.3 

10 Dallas/Fort Worth 79,997 2.4% 109.6 

Dallas/Fort Worth, TX 71,291 89.1%

Dallas Love Field, TX 8,706 10.9%

11 Boston 66,971 2.0% 91.7 

12 Portland 66,795 2.0% 91.5 

13 Salt Lake City 63,033 1.9% 86.3 

14 Honolulu 57,241 1.8% 78.4 

15 Houston 56,336 1.7% 77.2 

Houston Intercontinental, TX 38,493 68.3%

Houston Hobby, TX 17,843 31.7%

Total Carlsbad Area Passengers 3,270,633 4,480 

Rank

FIGURE 15: Carlsbad’s True Airline Passenger Share, Top 15 Markets

YE1Q10; Source: Sixel Consulting Group True Market Study
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 28

Figure 15). Even if none of the passengers using San Francisco International or Oakland decided 

to trade airports for the convenience of a non-stop, the San Jose market alone generates 

enough Carlsbad passengers to support three Q400 flights per day with an average load factor 

near 80%. 

There are two key reasons behind Carlsbad’s “leakage” to other airports in southern California. 

One: a lack of sufficient available seats in the market to allow local travelers to use their local 

airport. And two: airfares that are much higher than those found at competing airports. 

Average fares in Carlsbad aren’t accurately reported, as SkyWest does not report fare 

information to the DOT as part of Table DB1A. As SkyWest operates Carlsbad service “at risk,” 

average fares reported by the DOT in the Carlsbad are arbitrarily assigned by on stage length. 

Due to these fare reporting issues, a simple comparisons of average fares in the Carlsbad market 

is not accurate. 

When comparing Carlsbad fare data to the main airports its passengers use, it is important to dig 

deeper than the DOT data. A better illustration is the lowest published fare from each airport for 

a set period of time. This data shows, essentially, exactly what passengers trying to book a flight 

would see if they checked multiple airports – which more passengers in the Carlsbad catchment 

area have been 

demonstrated to do. 

When fares for a one 

week period in August 

of 2010 are compared, 

looking at Carlsbad, 

Los Angeles 

International (LAX), 

and San Diego sideby-side, it becomes 

clear that Carlsbad’s 

lowest published fares 

are typically higher 

than the lowest 

published fares at the 

other airports – especially on the busiest days of the week for passenger demand. 

$335

$375 $375

$208

$395

$208

$150

$286 $286

$109 $109

$286

$172 $172

$335 $335 

$131 $131 

$335 

$175 

$119 

$75

$125

$175

$225

$275

$325

$375

$425

Wed, Aug 18 Thu, Aug 19 Fri, Aug 20 Sat, Aug 21 Sun, Aug 22 Mon, Aug 23 Tue, Aug 24

CLD-SFO

LAX-SFO

SAN-SFO

FIGURE 16: Lowest Published Fares to San Francisco (SFO)

August 2010; Source: Farecompare.com
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 29

Between southern California and San Francisco International Airport, from Wednesday, August 

18 through Tuesday, August 24, Carlsbad’s lowest published fare is higher than the fares found at 

LAX and San Diego on all but one day (see Figure 16). On the peak days of the week, 

Carlsbad’s lowest published fare is significantly higher. On Friday, August 20th, the lowest 

published fare between Carlsbad and SFO was $375 roundtrip before taxes and fees. 

On the same day, San Diego’s lowest published fare to SFO was just $131, while LAX’s lowest 

published fare was even lower – at just $109 roundtrip before taxes and fees (see Figure 16). On 

peak days in August of 2010, Carlsbad’s lowest published fare to SFO averages 65% higher than 

the same fare from San Diego and 71% higher than the same fare from LAX. 

The same dynamic is at 

play between southern 

California and San Jose 

– although this disparity 

is not quite as 

pronounced. While 

Carlsbad’s lowest 

published fares to San 

Jose are relatively on 

par with those found at 

San Diego for the 

period between August 

18th and August 24th, 

the fare from the 

McClellan-Palomar Airport is much higher than the same fare from LAX (see Figure 17). 

On Friday, August 20th, the lowest published fare between Carlsbad and San Jose was $405 

roundtrip before taxes and fees (see Figure 17). On the same day, the lowest published fare 

from San Diego was marginally lower, at $403 roundtrip. However, the lowest published fare 

from LAX to San Jose was 60% lower than the fare from Carlsbad, at $161 roundtrip before taxes 

and fees. 

With this fare disparity between southern California and the San Francisco Bay Area it is very 

difficult for local Carlsbad travelers to justify the extra expense of flying locally – especially when 

$365

$405 $405 $405

$425

$365

$231

$314 $314

$161 $161 $161

$314

$161

$370 

$403 $403 $403 

$430 

$370 

$217 

$100

$150

$200

$250

$300

$350

$400

$450

Wed, Aug 18 Thu, Aug 19 Fri, Aug 20 Sat, Aug 21 Sun, Aug 22 Mon, Aug 23 Tue, Aug 24

CLD-SJC LAX-SJC SAN-SJC

FIGURE 17: Lowest Published Fares to San Jose (SJC)

August 2010; Source: Farecompare.com
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 30

the service to any of the Bay Area airports is non-stop from either San Diego or LAX. Only an 

airline such as Horizon, with a low cost structure and a low fare structure, will be able to retain 

Carlsbad area passengers at the McClellan-Palomar Airport. Non-stops to and from the Bay 

Area – the Carlsbad catchment area’s number one market – are, and will continue to be, the 

Airport’s top priority. 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 31

EXTENUATING FACTORS AFFECTING AIR SERVICE 

It has been established in this proposal that the McClellan-Palomar Airport has lost 42% of its 

available airline seats and daily departures on scheduled air carriers in the last two years. While 

this, in and of itself, represents a hardship for the Airport and the community it serves there are 

additional extenuating circumstances regarding seat loss and flight declines to consider in the 

larger region. 

At the same time Carlsbad, itself, sees airline service declines, San Diego’s Lindbergh 

International Airport has see its most significant seat cuts since the recession in the early 1990s. 

Since the summer of 2008, San Diego has lost an average of almost 65 daily departures – a loss 

of 23% of that Airport’s daily flights (see Figure 18). During that same time period, San Diego has 

lost an average of 6,873 daily outbound available seats, or 19% of all the market’s available 

airline capacity. 

34,028

35,410 35,447

34,508

30,849 30,774

30,361

29,333

28,800

29,240 29,534 29,585

30,423

32,070 32,330

31,560

29,200 29,008

28,302 27,994

26,667

27,057

28,017

28,604

25,783

28,259 28,038 27,842

22,585

23,534

21,919 21,718

19,713

21,476

22,732

23,943

23,227

25,835

27,307

26,250

22,611

23,579

22,496

21,989

20,193

20,684

22,741

23,127

17,000

22,000

27,000

32,000

37,000

2008-05 2008-06 2008-07 2008-08 2008-09 2008-10 2008-11 2008-12 2009-01 2009-02 2009-03 2009-04 2009-05 2009-06 2009-07 2009-08 2009-09 2009-10 2009-11 2009-12 2010-01 2010-02 2010-03 2010-04

277.1 Available SDEW Onboard PDEW Flights Per DEW

286.7 286.3

276.9

241.4 240.1

233.8

227.4 225.3 229.0 230.9 232.7 236.5

247.7 249.2 244.0

225.8 223.8 218.0 216.3

205.9 211.0

218.4 222.1

FIGURE 18: Available Seats, Flights, and Passengers Per Day at SAN

May 2008 – April 2010; Source: US DOT T100 Data
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 32

These overall air carrier flight and seat losses not only hurt the immediate San Diego catchment 

area, but also Carlsbad. As Carlsbad has seen its flights and seats cut even more drastically 

over the last two years, Carlsbad area travelers have had to rely more on service provided at 

San Diego for access to the national air transportation system. This access is becoming more 

difficult as the region, as a whole, sees huge cuts in airline service. 

The same is true, specifically, of service between San Diego Lindbergh International and the San 

Francisco Bay Area. In June of 2008, San Diego averaged 53.3 daily departures to airports in the 

Bay Area, including San Francisco International (SFO), San Jose Mineta International, and 

Oakland (see Figure 19). By April of 2010, the number of daily departures had fallen to 41.9 – a 

loss of 11.4 daily departures, or 21% of all San Diego – Bay Area flights. 

At the same time, available seats between San Diego and the Bay Area have fallen from an 

average of 6,768 daily departing seats in June of 2008 to an average of 5,747 daily departing 

seats in April of 2010 – a loss of 15% of the market’s total seats (see Figure 19). 

6,837 6,768 6,750

6,573

6,356 6,353 6,391

6,271 6,208 6,188

6,294 6,230

6,129

6,275 6,272

6,007

5,582 5,584 5,519 5,511

5,377

5,497

5,603

5,747

4,763

4,877

4,689

4,787

4,207

4,358

4,066 4,060

3,504

3,980

4,160

4,478

4,262

4,530

4,615

4,487

4,171

4,272 4,250

4,166

3,655

3,741

4,062

4,182

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

7,500

2008-05 2008-06 2008-07 2008-08 2008-09 2008-10 2008-11 2008-12 2009-01 2009-02 2009-03 2009-04 2009-05 2009-06 2009-07 2009-08 2009-09 2009-10 2009-11 2009-12 2010-01 2010-02 2010-03 2010-04

Available SDEW Onboard PDEW Flights Per DEW

53.2 53.3 53.0

51.5

49.8 49.5 49.2 48.5 47.9 48.1

49.0 49.2

48.2

49.3 49.4

46.7

40.5 40.5 40.6 40.4

39.1

40.4

41.3 41.9

FIGURE 19: Available Seats, Flights, and Passengers Per Day Between SAN and the Bay Area

May 2008 – April 2010; Source: US DOT T100 Data
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 33

The San Diego – San Jose route has seen similar cuts to the overall Bay Area market. In July of 

2008, airlines offered an average of 1,519 daily departing seats from San Diego to San Jose (see 

Figure 20). By April of 2010 that number had fallen to 1,314 daily departing seats between the 

two markets – a loss of 13% of available seats between San Diego and San Jose. 

Flight cuts between San Diego and San Jose have been even more dramatic. In July of 2008 

airlines offered an average of 14.3 daily non-stop departures in each direction between the two 

markets (see Figure 20). By April of 2010 that number had fallen to just 9.6 daily departures – a 

loss of a third of all flights between San Diego and San Jose. 

The result of these flight and seat cuts between San Diego and the Bay Area has been to make 

access to service between these two areas more difficult to obtain. Should non-stop service be 

launched between Carlsbad and San Jose the new flights wouldn’t even begin to make up for 

the capacity lost in the last two years. This gives the Airport extra confidence new service will be 

successful – as it merely replaces a small portion of capacity lost in recent years. 

1,502 1,517 1,519

1,476 1,485 1,482 1,478

1,410

1,461 1,479 1,491 1,513

1,477

1,505 1,508

1,443

1,265 1,267 1,244 1,237

1,200

1,249

1,290

1,314

1,146

1,175

1,139 1,146

1,054

1,080

972

915

822

933

986

1,095

980

1,104 1,101 1,104

946 957 943 954

812

862

946

976

500

700

900

1,100

1,300

1,500

1,700

2008-05 2008-06 2008-07 2008-08 2008-09 2008-10 2008-11 2008-12 2009-01 2009-02 2009-03 2009-04 2009-05 2009-06 2009-07 2009-08 2009-09 2009-10 2009-11 2009-12 2010-01 2010-02 2010-03 2010-04

Available SDEW Onboard PDEW Flights Per DEW

14.1 14.3 14.3

13.9 14.0 13.8 14.0

13.5

13.9 14.1 14.2 14.4 14.1 14.4 14.3

13.1

9.3 9.3 9.1 9.1 8.8

9.2 9.5 9.6

FIGURE 20: Available Seats, Flights, and Passengers Per Day Between SAN and SFO

May 2008 – April 2010; Source: US DOT T100 Data
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 34

AVAILABILITY OF ALTERNATE AIRPORTS 

Carlsbad, California is serviced by the McClellan-Palomar Airport, located 2.9 miles off Interstate 

5. The Carlsbad catchment area, seen in orange (See Figure xx), is home to almost 1.15 million. 

• The Carlsbad area comprises 12.3% of the overall population of the entire shaded area – 

the area that includes San Diego, Carlsbad, Orange County, and Long Beach. 

• The total population of the shaded area – which is entirely within an hour’s drive of the 

McClellan-Palomar Airport – is 9.3 million, making it one of the most populous one-hour 

catchment areas of any airport in the country. 

• Despite comprising 12% of the region’s population, most of Carlsbad catchment area 

passengers fly from other airports in the region, largely due to the breadth of service 

offered at those other airports. 

FIGURE 21: Location of San Luis Obispo County in relation to other Southern California airports
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 35

USE OF LOCAL FEDERAL FUNDS 

Marketing and Advertising 

The McClellan-Palomar Airport proposes to spend $50,000 in funds on marketing and advertising 

promotions in support of new service introductions. The goal is to increase ridership and usage 

of new service through targeted regional campaigns. 

Revenue Guarantee 

The McClellan-Palomar Airport proposes to make available at least $500,000 in funds for a 

revenue guarantee to the new carrier, to cover start-up losses that may occur during the first 

twelve months of service. Subject to negotiation, payments will be made to the new airline 

quarterly when income derived from passengers and cargo is less than agreed expenses on the 

route. Revenue generated that exceeds expenses will be carried forward and tapped before 

any grant funds are used. 

Startup Cost Offsets 

The McClellan-Palomar Airport proposes to spend only existing airport funds and matching funds 

to pay for start-up costs in support of new service introductions. The Airport, and its partners, will 

provide essential terminal space and equipment to handle the new service.

Additional Costs 

As part of this program, the McClellan-Palomar Airport understands that additional expenses will 

be incurred, such as monitoring the results of the program and reporting those results back to 

the US DOT. In addition, the Airport expects to incur some expenses in the recruitment of the 

new carrier. The Airport may choose to use DOT funding in these efforts. 

 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 36

PUBLIC/PRIVATE PARTNERSHIPS 

San Diego County and the McClellan-Palomar Airport consistently work together, with several 

community organizations, on air service development projects. Many local partners have 

committed to work with the Airport to promote and market the new service. The Airport and the 

County will manage and coordinate the marketing program. 

Major partners are listed below, with profiles of their organizations. Other, smaller partners, 

including many area businesses, will also work with the Airport and the County to promote and 

support additional local air service, beyond the major organizations listed below. 

San Diego North County Economic Development Council 

The San Diego North County Economic Development Council has a mission is to grow and 

sustain the economy of San Diego North County through attraction, retention and new business 

development. The group is a member-driven coalition of the private and public sectors working 

together to sustain and carefully grow the economic base of San Diego North. The Group’s 

main goal is to market the area internally and externally in an effort to retain and attract quality 

businesses and create additional, higher paying jobs. The San Diego North EDC works with 

businesses, chambers of commerce, health organizations, local governments and educational 

institutions to improve the quality of life and economic sustainability of North County. The EDC 

also undertakes initiatives to establish North County as a "business-friendly" region and promote a 

regional approach to marketing North County as "San Diego's Smart Place to Grow" a business. 

San Diego North Chamber of Commerce 

The San Diego North Chamber of Commerce is the steward for business in the region’s 

communities, supporting businesses of every size through proven programming, a unified voice 

in front of government, and dedicated committees. Strong support from membership allows the 

Chamber to thoroughly focus on each individual community while providing the benefit of a 

regional Chamber of Commerce. 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 37

The Chamber has three main areas of focus: 

1. Business Development - To identify and promote policies and programs that allow 

companies to invest in the region either through retention or expansion. 

2. Workforce Development – Provide a regional workforce that is capable and competent 

through collaboration with business and education. 

3. Infrastructure – Develop and implement strategies to ensure regional capacity in six 

business critical categories: water, housing, energy, transportation, economic 

competitiveness and environmental stewardship. 

Carlsbad Chamber of Commerce 

With more than 1,600 member businesses employing 65,000 or more, the Carlsbad Chamber is 

the second largest chamber in San Diego County and the 10th largest in California. It truly is an 

influential force for the region’s business community. It’s important to note that the Carlsbad 

Chamber is independent from government. The Chamber receives no operating funds from the 

City of Carlsbad or any other government agency. 

San Diego North Convention and Visitors Bureau 

The San Diego North Convention & Visitors Bureau is a full-service organization providing 

information and assistance to the region's tourism and hospitality industries, including the areas 

of La Jolla north to Oceanside, Rancho Bernardo north to Fallbrook, Julian and the Anza-Borrego 

Desert. The CVB works closely with its members to promote San Diego North as a premier, yearround resort destination, including the McClellan-Palomar Airport. 

Palomar Airport Association (PAA) 

The Palomar Airport Association (PAA) is an all-volunteer California Corporation. The PAA is a 

general-interest, public-benefit community service organization for pilots and non-pilots alike, for 

McClellan-Palomar Airport. The PAA is an aviation resource for the community, government 

agencies and the press for the Palomar Airport. 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 38

The PAA works together with neighboring aviation organizations and supporters for the benefit of 

McClellan-Palomar Airport. The Group’s focus is airport preservation and education, and it 

promotes balanced public airport use for all types/classes of aviation--from small private 

aviation through commercial operations. PAA hosts community programs, events, education, 

public relations and coordination of volunteer support activities. The PAA believes that when 

everyone gets together, things are better for all; for aviation users, businesses and the 

community. 

Horizon Air/Alaska Air Group 

Horizon Air and the Alaska Air Group have made a commitment, under this Grant application, to 

work towards a partnership with the McClellan-Palomar Airport. Today, Horizon is 4,000 

employees strong and serves more than 45 cities in Arizona, California, Colorado, Idaho, 

Montana, Nevada, Oregon, Washington, British Columbia, and Alberta. The company is 

recognized as one of the leading regional airlines in the country and holds the highest rank of all 

regional airlines in Condé Nast Traveler Magazine's Readers Choice Awards list. Horizon supports 

this application, as noted in its letter of support, and hopes to work with the Airport, the DOT, and 

the SCASD Grant program to launch additional service in Carlsbad. 

 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 39

IMPLEMENTATION TIMELINE 

The proposed implementation timeline for the project assumes the Department of Transportation 

will award Small Community Grant Funding in December 2010. Once the award is announced, 

the McClellan-Palomar Airport will conduct additional airline meetings to secure a new service 

that is mutually beneficial. Based on airline planning lead times and the need for advance 

bookings, we assume the new carrier would not be able to begin service until at least March of 

2012. 

The first three milestones on the Airport's timeline are to execute the grant agreement with the 

Department of Transportation, meet with prospective airlines to negotiate for service, and sign 

the minimum revenue guarantee agreement with the appropriate airline partner. Once service 

is announced and schedules are published, the Airport would begin marketing the new route 

and working with the new carrier to monitor advance bookings. The Airport will continue its 

marketing program and continue to work with the new carrier to monitor the route once service 

begins. The Airport would submit grant status reports on a quarterly basis to the Department 

throughout the proposed two year term of the minimum revenue guarantee. 

While the estimated dates are targets, it is possible service could be secured and launched on a 

more aggressive timeline once Grant funding is awarded. It is also possible that new service 

could slip to 2013 should an airline require additional risk mitigation, beyond that included in this 

proposal, from the community. 

Activity/Project Milestone Estimated Date

SCASD Grant Award Announcement December 2010

Executive Grant Agreement with DOT January 2011

Meet With Prospective Airlines February - June 2011

Negotiate Minimum Revenue Guarantee (MRG) With Airline July/August 2011

Announce Service December 2011

Publish Schedule December 2011

Begin Marketing of New Route January 2012

Monitor Advance Bookings January - March 2012

Service Launch March 2012

MRG Available for Service March 2012 - March 2014

Monitor Route Performance March 2012 - March 2014

Submit Grant Status Reports to DOT Quarterly Q1 2011 - Q1 2014

Close Grant April 2014
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 40

AIR SERVICE ADVISORY GROUPS 

The McClellan-Palomar Airport has its own Airport Advisory Committee. The Palomar Airport 

Advisory Committee (PAAC) had its first meeting on July 9, 1979. Among other roles, including 

air service development and retention, airport advising, and general aviation monitoring, the 

PAAC provides a forum for residents with noise concerns and tried to provide them with 

accurate information about what the County can and cannot mandate. The committee also 

gave invaluable input to Palomar officials and 

designers regarding the new terminal’s development 

and design of the bridge. PAAC offered suggestions 

and input for the new restaurant as well. 

Outside the formal Airport Advisory Committee, the 

Palomar Airport Association (PAA) works together with 

neighboring aviation organizations and supporters for 

the benefit of McClellan-Palomar Airport. The Group’s focus is airport preservation and 

education, and it promotes balanced public airport use for all types/classes of aviation--from 

small private aviation through commercial operations. PAA hosts community programs, events, 

education, public relations and coordination of volunteer support activities. The PAA believes 

that when everyone gets together, things are better for all; for aviation users, businesses and the 

community. 

 

“The PAAC provides a forum for 

residents... [giving] valuable input 

to Palomar officials and designers 

regarding the new terminal’s 

development.” 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 41

LOCAL AIR SERVICE DEVELOPMENT EFFORTS 

For the last several years, the McClellan-Palomar Airport has been working to retain, expand, 

and attract new airline service at the Airport. The Airport has seen the number of available seats 

and the number of daily departures decline. It realizes it must work to recruit additional service, 

so it can better serve its catchment area of 1.13 million people. 

In the summer of 2010, the McClellan-Palomar Airport commissioned a True Market/Leakage 

Study, using its own funding, so it could better understand the travel patterns of local catchment 

area residents. The results of this study were completed for inclusion in this Grant application. 

The Study shows a local market for almost 

3.3 million annual passengers. 

The Airport also hired an air service 

development consulting firm to aid in the 

preparation of specific airline case 

studies, and to facilitate direct airline 

one-on-one meetings. In the summer of 

2010, the Airport hosted officials from both Horizon Air and California Pacific Airlines for meetings 

on field. Additionally, the Airport has met with airlines such as Frontier and Cape Air in the 

summer of 2010 to discuss new service opportunities. 

The airlines considering serving the McClellan-Palomar Airport have been clear in their message: 

the Airport must fully develop its risk mitigation program to land additional service. A Small 

Community Air Service Development Grant is an essential part of this effort. 

 

“...the McClellan-Palomar Airport 

commissioned a True Market/Leakage 

Study, using its own funding, so it could 

better understand the travel patterns of 

local... residents.” 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 42

IN-KIND SERVICES FROM COMMUNITY 

The following organizations will help promote the new service through their various membership 

groups. There is no estimated value to these services. 

 Carlsbad Chamber of Commerce 

 San Diego North Convention and Visitors Bureau 

 San Diego North Chamber of Commerce 

 San Diego North County Economic Development Council 

 Palomar Airport Association 

 County of San Diego 

 City of Carlsbad 

 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 43

PERFORMANCE MEASURES 

The success of new service will be based on three measurable variables: the increase in 

available seats in the market, the number of enplanements on the route, and the average 

airfares charged in the affected city pairs. The first two measurements will include a monthly 

comparison once the program begins to past numbers. The second measurement will be 

derived from US DOT OD1A reports. 

 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 44

LEGAL SPONSOR 

The McClellan-Palomar Airport is the legal sponsor responsible for administering the program. 

The McClellan-Palomar Airport is a government entity. 

McClellan-Palomar Airport 

2192 Palomar Airport Road 

Carlsbad, California 92011 

Peter Drinkwater, Airport Director 

760.431.4646 

Peter.Drinkwater@sdcounty.ca.gov 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 45

FINANCIAL CONTROLS 

As the sponsor, the McClellan-Palomar Airport, and the Airport’s operator, San Diego County, will 

be the responsible parties for all fiscal matters and DOT reporting requirements. As a public 

entity the DOT can be assured that proper financial controls are in place to guarantee that the 

DOT’s grant will be used in accordance with any subsequent agreement. The Airport 

understands that the grant is a reimbursable grant, meaning the Airport is responsible for 

program expenditures and will submit invoices to the DOT for reimbursement, based on a 

percentage of the total grant request. 

 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 46

RETURN ON INVESTMENT 

The McClellan-Palomar Airport has developed a cost effective and achievable strategy to 

increase enplanements at the airport. The proposal uses proven methods of achieving air 

service improvements, allowing the DOT to be comfortable with choosing this proposal. The 

increased competition and access to increased competition with airfares by adding service on 

a new route is a major goal of the Small Community Air Service Development Program. 

Approximately $50,000 of the $550,000 in cash is committed to being spent. The remaining 

$500,000 in cash will be available for the revenue guarantee portion of the project. Should the 

revenue guarantee be unused, or unneeded for the new airline, funding may be used to widen 

the marketing and advertising program. 

 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 47

DOT EXIT STRATEGY 

The Airport has developed this proposal as a one-time grant. The advertising and marketing 

program will commence a few months before service starts and last for at least twelve months. 

The revenue guarantee program will also be in place for twelve months, with two additional 

twelve-month periods available for negotiation. It is projected that the service will be financially 

self-sustaining within the second twelve months of service. 

 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 48

ALTERNATE PLAN 

If, for some unforeseen reason, service is not commenced in a timely manner by Horizon, the 

McClellan-Palomar Airport proposes to use federal grant money awarded under the Small 

Community Air Service Development Program for other carriers that can provide connections to 

a large origin and destination market in the west, or connectivity through a large hub. The 

Airport will continue its discussions with all other than can provide additional seats to strong 

markets. Since the community has never before received a Small Community Air Service 

Development Grant, it will have no limitations on which new hub the DOT could fund. Among 

the options are California Pacific Airlines service to intra-state California destinations; Delta 

service to Salt Lake City; US Airways service to Phoenix; Frontier Airlines service to Denver; and/or 

United service to Denver. The Airport will not, however, be limited by this list of potential 

destinations, as the landscape for service could change before the Grant is awarded. 

 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 49

AIRPORT INFORMATION 

Expansion has been ongoing since the airport’s opening in 1959, culminating in the 2008 Grand 

Opening of a new 18,000 sq. ft. state-of-the-art terminal building. This building combines airline 

terminal/security screening with a restaurant, Customs facility and other amenities. The 

terminal’s overhead canopies mimic sailboats and shell-encrusted floors form sweeping conch 

shell patterns, reminiscent of the ocean only a few miles away. Floor-to-ceiling windows and 

several outdoor areas provide passengers the opportunity to 

watch aircraft come and go. Rocking chairs offer a place to 

sit and wait for passengers or take a quick break. 

The airport has a single 5,000 ft. runway that is currently 

undergoing a major renovation with an anticipated August 

2010 completion date. With the new terminal building and 

5,000-foot runway, McClellan-Palomar Airport will be one of 

the most modern airports in the country, an airport that the 

citizens of Carlsbad and all of San Diego County can be 

proud of, and one of the finest bases for aviation businesses 

on the west coast. 

New Terminal Building

McClellan‐Palomar Airport
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 50

COMMUNITY PROFILE 

The City of Carlsbad prides itself on providing an exceptionally high level of service to its 

residents. This mid-sized city has maintained its small-town feel by carefully managing growth, 

encouraging community involvement and preserving almost half the city as open space. 

Carlsbad is home to 106,804 residents as of 2010 with a median age of 41 years. The median 

family income in Carlsbad is $104,412 in 2009 – one of the highest median incomes in the State of 

California – and an increase of 9.5% over 2008. Carlsbad CA residents spend an average of 

$8,000 on vacation each year – almost $2,000 above the national average spent on vacation. 

The City offers its residents a thriving Parks and Recreation system as well as an extensive trail 

system. While the citywide trails system provides many recreational opportunities to enjoy the 

City's unique natural areas, it also provides a comprehensive network for non-motorized 

transportation routes, connecting neighborhoods to commercial and business areas, schools, 

parks, and Carlsbad beaches. 

Tourism in the Carlsbad Region 

Carlsbad is an area worthy of the 30 million visitors it attracts each year. San Diego County 

enjoys more than 30 million leisure travelers a year and those travelers spend more than $8 billion 

throughout the county. Boasting nearly seven miles of beautiful beaches, picturesque lagoons 

and the charm of a European village coupled with world class golf, spas and shopping -- 

Carlsbad provides something for every travel taste and budget. 

Carlsbad is host to unmatched shopping, dining, beaches, golf, nature and attractions such as 

LEGOLAND® California, sporting events and seasonal festivals. 

Major Events: Carlsbad Marathon, Carlsbad 5000, Junior Carlsbad, Carlsbad Village Street Faire, 

Carlsbad Triathlon, Art in the Village, ArtSplash, Beach'n 101 Cruise, Bike MS Bay to Bay Tour, 

Oktoberfest, Jazz in the Park (seasonal) Shakespeare in the Park (seasonal) 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 51

Beaches 

Carlsbad is home to seven miles of 

pristine, uncrowded and sundrenched beaches. Renowned as 

one of the best surf spots in southern 

California, there’s still plenty of water 

and sand for all to enjoy. Visitors can 

walk along the water’s edge, splash in the waves or soak in the sun. For the more adventurous, 

the area also offers surfing, sailing, jet skiing, fishing, kayaking, swimming, boogie boarding, 

biking, birding, nature walks, golf, tennis, hiking, whale watching 

Resorts 

In Carlsbad, golf isn’t just a game, it’s an experience. Beautifully designed, world-class courses 

offer unmatched amenities, such as GPS-equipped golf carts that help gauge your next shot, 

gorgeous clubhouses to relax in, golf classes with top golf pros, and nearby resorts and spas for 

when you’re done playing and want to unwind. 

LEGOLAND® California and Water Park 

The 128-acre Park is designed specifically to appeal to families with children ages 3 to 12. The 

Park features roller coasters, LEGO-themed rides, interactive shows, hands-on attractions, LEGObuilding play areas, and the famously breathtaking Miniland, restaurants, 

shopping, landscaped features and gardens. 

Opening June 2010, LEGOLAND® California Resort will feature the world’s 

first and only LEGOLAND Water Park. The imagination will really flow at this 

interactive, splash-filled, fun time for the entire family. 

The centerpiece of the Water Park is a 45-foot-tall tower designed to immerse children in the 

creative world of LEGO®. The park will also include The Build-A-Raft river – a lazy river where 

guests float on their own custom-built LEGO raft as well as several water slides including sixperson raft slide and one-person tube slides as well as slides designed especially for toddlers. 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 52

Leo Carrillo Ranch Historic Park 

Once part of the original 2,538 acre working rancho 

and vacation retreat of Leo Carrillo (who acted in 

almost 100 films from 1927n to 1950 and co-starred in 

the TV series The Cisco Kid,) this historic ranch is an 

extraordinary educational and recreational resource. 

The City of Carlsbad has stabilized, preserved and 

restored many of the buildings on this 27 acre parcel. 

Historic ranch structures include a visitors center, handcrafted adobe buildings, hacienda, reflecting pool, cabana, cantina, carriage house tack shed, 

stable, barn and foundry and equipment shed. 

SEA LIFE Aquarium 

Merlin's SEA LIFE® attractions are an ideal, friendly and 

authoritative guide to the last great frontier...the seas 

and oceans of the world and their myriad mysterious 

and amazing inhabitants. Unrivalled display technology, 

biological expertise and entertainment skills combine to 

provide seamless journeys through US and tropical waters, and astonishing close encounters with 

everything from humble shrimps and starfish to seahorses, sharks and stingrays. 

SEA LIFE® is designed to be a child’s first interactive guide to the life of the sea, combining 

active, hands-on learning with fascinating educational talks, and opportunities to have up close 

and personal encounters with a variety of sea creatures. A visit to SEA LIFE® is an experience like 

no other! 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 53

Carlsbad Economic Overview 

At a time when many cities are experiencing population and job losses, Carlsbad is exceeding 

state and national averages in both areas. Population growth in Carlsbad has outpaces growth 

throughout California. As of 2009 it is four points better than San Francisco and Los Angeles (see 

Figure 21). 

From 2000 to 2008, jobs in Carlsbad grew by 22.80%. Since February, the Carlsbad/San Diego 

Economy Has Added 1,100 New Full-Time Jobs – the Second Best Job Growth in California. 

1.5%

2.7%

3.6%

3.9%

4.1% 4.3%

5.3%

6.9%

8.1%

1.04%

0.70%

0.40%

0.17% 0.31%

0.63% 1.58%

2.99%

4.38%

0.42% 0.57%

0.65%

0.34%

0.12%

‐0.28%

0.18%

0.97%

1.82%

1.02% 1.90%

2.57%

2.95% 2.92%

2.54% 2.37%

2.98%

3.84%

-2%

0%

2%

4%

6%

8%

2001 2002 2003 2004 2005 2006 2007 2008 2009

Carlsbad-San Diego

San Francisco-Oakland

San Jose

FIGURE 21: Cumulative Population Growth in Southern California

Source: US Census
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 54

Employment in the Carlsbad Area 

Select Company Profiles

Callaway Golf Co. 

Headquartered in Carlsbad, Callaway Golf Company is one of the world’s 

designers and manufacturers of golf equipment, including clubs, balls and 

apparel. High-end clientele include customers for their custom-made 

products. With ever-expanding global markets, including India, Korea, 

China, Europe and Latin America, the need for air service is undeniable. 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 55

ViaSat, Inc. 

 ViaSat, Inc. is a high-technology company, specializing in the design and 

manufacture of communications and networking equipment with its global 

headquarters in Carlsbad. Sectors within which they work include the military, 

aviation, maritime and mass transit. With thirteen additional offices of ViaSat 

and their subsidiaries around the world, employee air travel is frequent. The company also has a 

regular presence at industry conferences on both a national and global scale, requiring 

additional employee travel several times a month. 

LEGOLAND® California, LLC 

LEGOLAND® California is a 128-acre family theme park located in 

Carlsbad, featuring more than 15,000 LEGO® models in the Park 

created from more than 35 million of the iconic LEGO® bricks. In 

additional to employing 1,100 people in the Carlsbad office, the park brings in more than 

1,750,000 visitors annually.

LaCosta Resort and Spa 

Providing employment for 1,000 people in the Carlsbad area, La Costa 

Resort and Spa, “California's Playground for All Ages”, brings a taste of the 

coastal California lifestyle to each and every visitor. Set within a lovely 400-

acre village, La Costa Resort and Spa offers 610 spacious and wellappointed guestrooms including luxury Villas and 76 suites. La Costa is a place where high-end 

clientele with busy schedules escape the everyday to experience a life of play and leisure. 

More convenient air service would furnish this destination well. 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 56

Life Technologies 

The systems, consumables and services of Life Technologies enable researchers to accelerate 

scientific exploration, driving to discoveries and developments that make life even better. Their 

customers do their work across the biological spectrum, working to 

advance personalized medicine, regenerative science, molecular 

diagnostics, agricultural and environmental research, and 21st century 

forensics. While the Carlsbad headquarters employs 960, the corporation itself employs more 

than 9,500 company-wide in 60 offices in 28 countries, so local, national and global travel is 

essential for this diverse company. 

Gemological Institute of America

Established in 1931, the Gemological Institute of America is 

headquartered in Carlsbad and is the world’s foremost 

authority on diamonds, colored stones, and pearls. GIA 

exists to protect all purchasers of gemstones, by providing 

the education, laboratory services, research, and instruments needed to accurately and 

objectively determine gemstone quality. The headquarters in Carlsbad, which also includes a 

laboratory and instrument center, employs 600 people, while the organization itself has 17 offices 

globally. 

Military Presence 

The Carlsbad Area is Home to a Major Military Installation with 38,000 Active Duty 

and Over 60,000 Military and Civilian Personnel. Camp Pendleton is located in 

North San Diego County, in Southern California. The base is adjacent to the City 

of Oceanside, a military town, by the Main Gate in the South. The size of Camp 

Pendleton is comparable to the size of the State of Rhode Island. The cost of 

living is high in San Diego County. The mild climate and beautiful scenery attract 

a lot of new residents and tourists to our area each year. 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 57

Marine Corps Base has the responsibility of providing housing, training facilities and logistical 

support for the Fleet Marine Force elements and other units assigned here. In addition, the base 

conducts specialized schools and other such training as the Commandant of the Marine Corps 

may direct. 

Major commands are Marine Corps Base, 1st Marine Expeditionary Force, 1st Marine Division, 1st 

Marine Logistics Group, elements of the 3rd Marine Aircraft Wing, and many tenant units (Marine 

Corps Air Station, ACU-5, Naval Hospital, the Marine Corps Tactical Systems Support Activity 

(MCTSSA), Naval Weapons Station Fallbrook, and a Reserve Support Unit). 

The neighboring cities of Carlsbad, Escondido, Fallbrook, Oceanside, San Clemente, San 

Marcos, Temecula and Vista provide employment, housing and services needed by the Camp 

Pendleton population. 

Many military personnel use commercial flights for their personal travel during leaves and other 

uses. With nearly 100,000 people to accommodate, many of whom are on tight schedules, air 

service that provides a more convenient location and greater options in schedule would be a 

major benefit to this base.

 
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 58

COMPARISON TO OTHER COMMUNITIES IN REGION 

Itinerary Average

Airport YE 1Q 08 YE 1Q 09 YE 1Q 10 Mileage Fare 08-10 09-10

1 Grand Canyon, AZ 55.11¢ 51.38¢ 52.05¢ 172 $89.44 -2.8% 1.3% 

2 Las Vegas North, NV 52.03¢ 52.03¢ 52.03¢ 172 $89.50 0.0% 0.0% 

3 Visalia, CA 23.37¢ 31.21¢ 38.97¢ 263 $102.43 29.1% 24.9% 

4 Show Low , AZ 37.14¢ 34.73¢ 37.31¢ 295 $109.93 0.2% 7.4% 

5 Vernal, UT 32.06¢ 33.19¢ 28.57¢ 691 $197.31 -5.6% -13.9% 

6 Kingman, AZ 19.86¢ 25.94¢ 28.41¢ 409 $116.12 19.6% 9.5% 

7 Mammoth Lakes, CA 0.00¢ 25.94¢ 26.84¢ 391 $104.95 100.0% 3.5% 

8 Inyokern, CA 20.84¢ 25.88¢ 25.42¢ 1,723 $438.08 10.4% -1.8% 

9 Page, AZ 24.83¢ 24.72¢ 22.40¢ 678 $151.83 -5.0% -9.4% 

10 Moab, UT 23.54¢ 24.55¢ 21.75¢ 868 $188.86 -3.9% -11.4% 

11 Santa Rosa, CA 21.32¢ 20.71¢ 19.96¢ 585 $116.82 -3.2% -3.6% 

12 Prescott, AZ 20.20¢ 20.34¢ 19.56¢ 601 $117.65 -1.6% -3.8% 

13 Oxnard/Ventura, CA 18.34¢ 20.45¢ 18.10¢ 1,522 $275.53 -0.7% -11.5% 

14 Santa Maria, CA 17.59¢ 19.66¢ 17.25¢ 972 $167.75 -1.0% -12.3% 

15 Elko, NV 23.55¢ 16.55¢ 16.91¢ 907 $153.45 -15.3% 2.2% 

16 Redding, CA 18.52¢ 20.07¢ 16.79¢ 1,163 $195.25 -4.8% -16.3% 

17 Yuma, AZ 16.16¢ 16.54¢ 15.87¢ 1,485 $235.60 -0.9% -4.1% 

18 Arcata/Eureka, CA 17.51¢ 16.66¢ 15.80¢ 1,254 $198.13 -5.0% -5.2% 

19 Burbank, CA 15.05¢ 16.10¢ 15.33¢ 808 $123.93 0.9% -4.8% 

20 Bakersfield, CA 15.99¢ 16.13¢ 15.03¢ 1,444 $217.08 -3.0% -6.8% 

21 Crescent City, CA 14.62¢ 16.99¢ 14.18¢ 1,199 $170.04 -1.5% -16.5% 

22 Salt Lake City, UT 15.10¢ 14.53¢ 13.97¢ 1,130 $157.88 -3.8% -3.9% 

23 Santa Barbara, CA 16.21¢ 15.73¢ 13.85¢ 1,385 $191.76 -7.6% -12.0% 

24 Flagstaff, AZ 16.76¢ 16.04¢ 13.85¢ 1,199 $166.09 -9.1% -13.7% 

25 Stockton, CA 13.79¢ 13.29¢ 13.73¢ 359 $49.28 -0.2% 3.3% 

26 San Luis Obispo, CA 14.66¢ 15.24¢ 13.72¢ 1,564 $214.58 -3.3% -10.0% 

27 Reno, NV 13.21¢ 14.31¢ 13.68¢ 1,102 $150.72 1.8% -4.4% 

28 Monterey, CA 16.84¢ 16.50¢ 13.65¢ 1,363 $186.09 -10.0% -17.3% 

29 Imperial, CA 14.54¢ 13.70¢ 13.39¢ 992 $132.89 -4.0% -2.3% 

30 Palm Springs, CA 14.74¢ 14.57¢ 13.37¢ 1,360 $181.78 -4.8% -8.2% 

31 Fresno, CA 15.67¢ 15.81¢ 13.14¢ 1,418 $186.29 -8.4% -16.9% 

32 Tucson, AZ 13.14¢ 13.91¢ 13.12¢ 1,230 $161.34 -0.1% -5.7% 

33 Saint George, UT 18.00¢ 13.83¢ 13.01¢ 780 $101.44 -15.0% -5.9% 

34 Ontario, CA 13.29¢ 14.21¢ 12.89¢ 1,086 $140.02 -1.5% -9.3% 

35 Cedar City, UT 18.51¢ 10.92¢ 12.89¢ 969 $124.84 -16.6% 18.0% 

36 Oakland, CA 11.97¢ 13.39¢ 12.89¢ 953 $122.90 3.8% -3.7% 

37 Sacramento, CA 12.82¢ 13.33¢ 12.62¢ 1,130 $142.65 -0.8% -5.3% 

38 San Jose, CA 12.94¢ 13.12¢ 12.57¢ 1,065 $133.88 -1.4% -4.2% 

39 Orange County, CA 13.91¢ 13.78¢ 12.49¢ 1,127 $140.76 -5.2% -9.4% 

40 Bull. City/Laughlin, AZ 11.38¢ 11.27¢ 12.28¢ 1,104 $135.53 3.9% 9.0% 

41 Phoenix, AZ 12.39¢ 13.00¢ 12.10¢ 1,210 $146.35 -1.2% -6.9% 

42 San Diego, CA 11.77¢ 12.15¢ 11.10¢ 1,350 $149.86 -2.9% -8.6% 

43 Los Angeles, CA 11.89¢ 12.01¢ 10.90¢ 1,610 $175.48 -4.3% -9.2% 

44 San Francisco, CA 12.38¢ 12.09¢ 10.76¢ 1,609 $173.18 -6.8% -11.0% 

45 Las Vegas, NV 11.05¢ 11.58¢ 10.75¢ 1,260 $135.40 -1.4% -7.2% 

46 Carlsbad, CA 11.81¢ 11.61¢ 10.11¢ 1,437 $145.29 -7.5% -12.9% 

47 Modesto, CA 11.02¢ 11.19¢ 10.08¢ 1,432 $144.33 -4.4% -9.9% 

48 Chico, CA 10.90¢ 10.46¢ 9.55¢ 1,372 $130.99 -6.4% -8.7% 

49 Long Beach, CA 9.98¢ 10.16¢ 9.52¢ 1,169 $111.33 -2.3% -6.3% 

50 Mesa Gatew ay, AZ 9.59¢ 8.65¢ 7.90¢ 1,096 $86.61 -9.2% -8.7% 

Average Regional Yield 12.35¢ 12.63¢ 11.63¢ 1,299 $151.12 -3.0% -7.9% 

Avg. Ann. Change

Rank

FIGURE 22: Top 60 Southwest Region Markets Ranked by Average Yield

YE1Q10; Source: US DOT Table DB1A
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 59

 

Itinerary Average

Airport YE 1Q 08 YE 1Q 09 YE 1Q 10 Mileage Yield 08-10 09-10

1 Inyokern, CA $359.42 $446.99 $438.08 1,723 25.42¢ 10.4% -2.0% 

2 Oxnard/Ventura, CA $266.57 $301.91 $275.53 1,522 18.10¢ 1.7% -8.7% 

3 Yuma, AZ $225.13 $244.44 $235.60 1,485 15.87¢ 2.3% -3.6% 

4 Bakersfield, CA $215.14 $225.97 $217.08 1,444 15.03¢ 0.4% -3.9% 

5 San Luis Obispo, CA $219.35 $239.58 $214.58 1,564 13.72¢ -1.1% -10.4% 

6 Arcata/Eureka, CA $196.38 $200.26 $198.13 1,254 15.80¢ 0.4% -1.1% 

7 Vernal, UT $145.44 $193.91 $197.31 691 28.57¢ 16.5% 1.8% 

8 Redding, CA $198.94 $213.76 $195.25 1,163 16.79¢ -0.9% -8.7% 

9 Santa Barbara, CA $214.71 $209.12 $191.76 1,385 13.85¢ -5.5% -8.3% 

10 Moab, UT $147.25 $194.93 $188.86 868 21.75¢ 13.3% -3.1% 

11 Fresno, CA $199.80 $207.42 $186.29 1,418 13.14¢ -3.4% -10.2% 

12 Monterey, CA $218.99 $214.57 $186.09 1,363 13.65¢ -7.8% -13.3% 

13 Palm Springs, CA $199.25 $199.61 $181.78 1,360 13.37¢ -4.5% -8.9% 

14 Los Angeles, CA $186.30 $191.04 $175.48 1,610 10.90¢ -2.9% -8.1% 

15 San Francisco, CA $210.30 $198.61 $173.18 1,609 10.76¢ -9.3% -12.8% 

16 Crescent City, CA $152.10 $177.43 $170.04 1,199 14.18¢ 5.7% -4.2% 

17 Santa Maria, CA $173.24 $185.63 $167.75 972 17.25¢ -1.6% -9.6% 

18 Flagstaff, AZ $211.83 $190.82 $166.09 1,199 13.85¢ -11.5% -13.0% 

19 Tucson, AZ $159.46 $170.63 $161.34 1,230 13.12¢ 0.6% -5.4% 

20 Salt Lake City, UT $169.47 $161.63 $157.88 1,130 13.97¢ -3.5% -2.3% 

21 Elko, NV $238.94 $155.08 $153.45 907 16.91¢ -19.9% -1.1% 

22 Page, AZ $141.72 $151.65 $151.83 678 22.40¢ 3.5% 0.1% 

23 Reno, NV $140.86 $151.46 $150.72 1,102 13.68¢ 3.4% -0.5% 

24 San Diego, CA $157.18 $162.15 $149.86 1,350 11.10¢ -2.4% -7.6% 

25 Phoenix, AZ $146.43 $155.57 $146.35 1,210 12.10¢ 0.0% -5.9% 

26 Carlsbad, CA $132.70 $153.80 $145.29 1,437 10.11¢ 4.6% -5.5% 

27 Modesto, CA $122.73 $156.91 $144.33 1,432 10.08¢ 8.4% -8.0% 

28 Sacramento, CA $140.49 $147.32 $142.65 1,130 12.62¢ 0.8% -3.2% 

29 Orange County, CA $158.15 $159.10 $140.76 1,127 12.49¢ -5.7% -11.5% 

30 Ontario, CA $140.87 $148.86 $140.02 1,086 12.89¢ -0.3% -5.9% 

31 Bull. City/Laughlin, AZ $133.17 $130.40 $135.53 1,104 12.28¢ 0.9% 3.9% 

32 Las Vegas, NV $138.01 $145.09 $135.40 1,260 10.75¢ -1.0% -6.7% 

33 San Jose, CA $139.91 $143.17 $133.88 1,065 12.57¢ -2.2% -6.5% 

34 Imperial, CA $133.26 $138.97 $132.89 992 13.39¢ -0.1% -4.4% 

35 Chico, CA $132.08 $136.53 $130.99 1,372 9.55¢ -0.4% -4.1% 

36 Cedar City, UT $121.78 $98.83 $124.84 969 12.89¢ 1.2% 26.3% 

37 Burbank, CA $122.89 $129.64 $123.93 808 15.33¢ 0.4% -4.4% 

38 Oakland, CA $124.58 $128.57 $122.90 953 12.89¢ -0.7% -4.4% 

39 Prescott, AZ $152.22 $122.54 $117.65 601 19.56¢ -12.1% -4.0% 

40 Santa Rosa, CA $119.09 $120.54 $116.82 585 19.96¢ -1.0% -3.1% 

41 Kingman, AZ $155.97 $179.10 $116.12 409 28.41¢ -13.7% -35.2% 

42 Long Beach, CA $137.73 $126.68 $111.33 1,169 9.52¢ -10.1% -12.1% 

43 Show Low , AZ $91.90 $105.26 $109.93 295 37.31¢ 9.4% 4.4% 

44 Mammoth Lakes, CA $0.00 $116.45 $104.95 391 26.84¢ 100.0% -9.9% 

45 Visalia, CA $145.76 $124.78 $102.43 263 38.97¢ -16.2% -17.9% 

46 Saint George, UT $153.09 $102.69 $101.44 780 13.01¢ -18.6% -1.2% 

47 Las Vegas North, NV $89.50 $89.50 $89.50 172 52.03¢ 0.0% 0.0% 

48 Grand Canyon, AZ $81.23 $89.47 $89.44 172 52.05¢ 4.9% 0.0% 

49 Mesa Gatew ay, AZ $106.11 $94.77 $86.61 1,096 7.90¢ -9.7% -8.6% 

50 Stockton, CA $55.71 $51.68 $49.28 359 13.73¢ -5.9% -4.6% 

Average Regional Fare $157.46 $162.29 $151.12 1,299 11.63¢ -2.0% -6.9% 

Avg. Ann. Change

Rank

FIGURE 23: Top 60 Southwest Region Markets Ranked by Average Domestic Fare

YE1Q10; Source: US DOT Table DB1A
McClellan-Palomar Airport, Carlsbad, California – Small Community Air Service Development Grant – August 2010 60

CONCLUSIONS 

The McClellan-Palomar Airport has seen continuous flight reductions over the last three years, 

resulting in fewer local available seats, and ultimately, fewer passengers. Many markets can tell 

the same story. But the story in Carlsbad is punctuated by the fact that the flight reductions 

have drastically increased the region’s passenger “leakage” to other airports in southern 

California. This is a more critical situation in southern California than in almost any other part of 

the country, due to the heavy congestion on virtually all freeways in and out of Carlsbad, at 

virtually all times of day. The McClellan-Palomar Airport must do a better job serving its local 1.13 

million population by attracting additional air service. 

Flight and seat cuts have also been seen between the airport most used by Carlsbad area 

travelers – San Diego – and the Bay Area. The effect has been to make access to service 

between these two areas more difficult to obtain. Should non-stop service be launched 

between Carlsbad and San Jose the new flights 

wouldn’t even begin to make up for the capacity lost 

in the last two years. This gives the Airport extra 

confidence new service will be successful – as it 

merely replaces a small portion of capacity lost in 

recent years. 

The Airport has recently hosted Horizon Air officials, on 

field, for a tour and an in-person meeting in the 

summer of 2010 to explore options for new service. Horizon has indicated it does find interest in 

the Carlsbad market. It would like to serve San Jose non-stop from Carlsbad, but it will not enter 

the market without marketing support, start-up cost offsets, and a revenue guarantee. The 

McClellan-Palomar Airport seeks this Small Community Air Service Development Grant to provide 

this start-up support, and to move Carlsbad up Horizon’s list of communities for new service. 

“The Airport has recently hosted 

Horizon Air officials, on field, for a 

tour and an in-person meeting in 

the summer of 2010 to explore 

options for new service.”