PROPOSAL OF LINCOLN, NEBRASKA 

Submitted By: Lincoln Airport Authority

Docket OST-2010-0124

AUGUST 2010

PROPOSAL UNDER THE SMALL COMMUNITY AIR 

SERVICE DEVELOPMENT PROGRAM

Legal Sponsor: Lincoln Airport Authority

DUNS #197601685

Nebraska Congressional District 01 
pg. 2

AUGUST 2010

TABLE OF CONTENTS 

 

Proposal Summary 3 

Community and Airport 3

Official Project Sponsor 3

Statement of Air Service Deficiency 3

Proposed Grant Solution 3

Community Partners 3

Project Description 4

Lincoln Market Overview 5 

Population Base 5

Economic Base 5

LNK Primary Service Area 7

Current Air Service and Deficiency 8 

Current Lincoln Air Service 9

Enplanement Trends at Lincoln 9

Service Pattern and Fares 9

Current and Potential Connectivity 11

Previous Air Service Development Efforts 12

Proposed Solution 13 

Overview 13

Targeted Solution #1: Delta - Memphis 13

Targeted Solution #2: Continental - Houston 14

Targeted Solution #3: American – Dallas 15

Need for Risk Mitigation 16

Marketing Support 16

Grant Administration Plan 17 

Grant Request Summary 17

Risk Mitigation Terms 17

Project Term 18

Role of Community Partners 18

Project Monitoring 18

Appendix B 19 
pg. 3

AUGUST 2010

 

PROPOSAL SUMMARY 

 

Community and Airport: 

 

Community: Lincoln, Nebraska

Airport: Lincoln Airport (LNK)

Address: P.O. Box 80407, Lincoln, Nebraska 68501

Phone: 402.458.2400

Fax: 402.458.2490

Official Project Sponsor: 

Lincoln Airport Authority

Statement of Air Service Deficiency: 

Lincoln today is losing over 875,000 passengers annually, due to air service deficiencies which are resulting 

in loss of economic growth in the region. These deficiencies are demonstrable and quantifiable: 

 High leakage to Omaha, due to air service cutbacks at Lincoln over the past five years

 Unreasonably high fares due to lack of sufficient air service to key connecting hubs

 Insufficient capacity offered by incumbent carriers, resulting in a lack of incentive to offer higher 

numbers of discount seats

The airport is working with both new and incumbent airlines to address these deficiencies. One of the key 

solutions is additional service to an airline hub that will provide capacity to the East and the South. Today, 

the only air access between Lincoln and the entire US East Coast, Middle-Atlantic and Deep South is via just 

three 50-seat jets daily via Chicago/O’Hare. The load factors on these flights approach 80%.This literally 

drives local consumers – both inbound and outbound – into using Omaha as their point of entry to the 

region.

Proposed Grant Solution: 

This proposal is for a $500,000 grant, matched by $130,000 in local funds to provide risk mitigation for 

service to an additional connecting hub that will provide increased capacity to and from points in the MidAtlantic and Deep South. It is clear from data provided in this document that the service can be selfsupporting. Due to the fact that US airlines are actually reducing the number of small “regional” jets in their 

fleets, it is necessary to offer incentives to offset their risk in implementing new service. This grant will satisfy 

that requirement.

Community Partners: 

This proposal is supported by the City of Lincoln, Lancaster County, Lincoln Airport Authority, Lincoln 

Chamber of Commerce, and the Lincoln Partnership for Economic Development. 

The aforementioned community partners will play an active role in the following:
pg. 4

AUGUST 2010

 Providing matching community funds for SCASD grant dollars

 Working with Lincoln Airport to negotiate agreements with target air carriers subsequent to award

 Liaise with Department of Transportation regarding carrier performance during grant period

 Administration of total project funding

 Preparation of quarterly reports, as necessary, for the Department of Transportation

 

Project Description: 

This proposal requests $500,000 in SCASD grant funds. Grant dollars will be matched with $130,000 in 

local community funds ($50,000 community match and $80,000 in airport marketing dollars) and “in-kind” 

contributions provided by Lincoln airport in the form of fee and rent waivers for new service valued at 

approximately $100,000. Total project funding level will be approximately $730,000.

The goal of the project outlined herein is to provide risk abatement funding for service to an additional airline 

hub in the Southern/Southeastern area of the United States. Currently LNK lacks access to much of the 

Southern/Southeastern United States and is leaking most of this traffic to nearby Omaha. The Lincoln 

Airport and its partners believe the Lincoln market can generate sufficient traffic and revenue to support this 

new service. 

It is important to note that while risk abatement funding may be necessary to recruit this new service, these 

funds will only be dispersed should the recruited carrier fall short of profitability on the route. It is possible 

that Lincoln Airport may only utilize a portion of the dollars requested, and should this prove to be the case, 

Lincoln is prepared to return any unused funds to the DOT for future use in the SCASD program.

Planned Distribution of Project Funds 

 

Component SCASD Grant Funds % Share Airport Funds % Share Community Partner Funds % Share TOTAL PROJECT COST

Risk Mitigation $480,000 91% $0 0 % $50,000 9 % $530,000 

Marketing $20,000 20% $80,000 80% $0 0 % $100,000 

TOTAL $500,000 79% $80,000 13% $50,000 8 % $630,000 
pg. 5

AUGUST 2010

LINCOLN MARKET OVERVIEW 

 

Population Base: 

Approximately 630,000 people live within the Lincoln Airport primary service area (see next page for service 

area map). Lincoln is also home to the University of Nebraska, Nebraska Wesleyan, Union College, and 

Southwest Community College. Altogether, these institutions are home to an additional 35,000 students.

In addition to the strong commercial ties between Lincoln and the East and South, Lincoln’s geographic 

location and demographics result in a large number of “snowbirds” who travel to spend the winter season in 

warmer climates. Many of these people own second homes in the South/Southeast United States. These 

second home owners make numerous trips throughout the year to check on their properties in addition to 

their annual pilgrimage to sunshine. Currently this segment of Lincoln air travelers lacks a convenient

Southbound connecting option at LNK.

Lincoln Airport has seen a material reduction in air service connectivity over the past five years. The air 

service and capacity cutbacks at Lincoln have resulted in increasing numbers of consumers being forced

into using OMA as their point of entry and egress to the Lincoln catchment area. This has resulted in a 

downward spiral in airline service levels at Lincoln.

The establishment of access to a connecting hub providing access to the East and Southeast will begin a 

process of recapturing lost traffic and re-building consumer usage of Lincoln Airport. With the assistance of 

the SCASD grant program and the successful recruitment of air service to a Southern hub airport, it is 

estimated that a significant portion of this leakage could be recaptured at LNK.

Economic Base: 

Lincoln, Nebraska is home to a very diverse economic base with industries including:

 Higher Education

 City, County, and State Government

 Manufacturing

 Health Care

 Insurance

 Agriculture

The public sector is the largest employer in the area, as Lincoln is the state capital, county seat, and home of 

the largest state university. That being said, there are a number of large manufacturers located in the 

Lincoln area as well, such as: Kawasaki, and Good Year Tire and Rubber. Additionally, Ameritas Acacia is 

headquartered in Lincoln and is the holding company for multiple insurance brands. It is also important to 

note that Kawasaki has recently been awarded the contract to manufacture rail cars for the Washington D.C. 

metro system, which will increase demand for air travel significantly.
pg. 6

AUGUST 2010

All of these Lincoln area companies have a need for air travel, and most have strong demand for 

Southern/Southeastern destinations. With the help of risk abatement dollars from the SCASD grant program, 

LNK could pursue access to this region and increase levels of service for existing businesses while improving 

the attractiveness and viability of the Lincoln area in a competitive regional economy.
pg. 7

AUGUST 2010

Source: Microsoft MapPoint

The primary service area for Lincoln Airport extends from the Eastern border of Nebraska, 

runs just North of the Kansas border and follows the existing highway system to the North 

of Grand Island and Columbus, Nebraska. While the service area extends to much of 

Western Nebraska, the Eastern edge of the service area is curtailed due to extensive 

nonstop and low fare service at neighboring Omaha. A large portion of the traffic currently 

flying from OMA originates in the LNK primary service area. In fact, a recent study 

completed for the LNK airport estimates that more than 75% of passengers in the LNK 

service area travel to OMA for lower fares and more nonstop flight options. New service 

from LNK to a hub in the South/Southwest would add competition to the market and 

additional connecting options to Lincoln passengers, likely resulting in recapture of traffic 

currently being lost to OMA.

LNK PRIMARY SERVICE AREA 
pg. 8

AUGUST 2010

CURRENT AIR SERVICE AND DEFICIENCY 

 

Current Lincoln Air Service: 

Lincoln Airport currently has access to two airline networks – United Airlines via Chicago and Denver, and 

Delta Air Lines via Minneapolis. Existing service results in 68 weekly departures and 3,512 weekly seats in 

the LNK market. It is important to note that LNK currently lacks Southern/Southeastern service.

Current Service Map 

August 2010 

Source: Schedule Data from Innovata LLC via Aviation DataMiner

Current capacity in the LNK market reflects a year-over-year decrease in seats and departures, including the 

loss of Delta Air Lines service to Atlanta and Salt Lake City as well as a decrease in Delta capacity to 

Minneapolis/St. Paul. The loss of this capacity has resulted in a 9.2% decline in departures and a 7.9% 

decline in available seats at LNK year-over-year. 

Enplanement Trends at Lincoln: 

Enplanements at LNK have been in a steady decline since 2005 as carriers have continued to increase fares 

and decrease capacity. Fare premiums in the LNK market compared to nearby OMA have grown rapidly over 

the past five years and as such, have significantly limited market stimulation. Despite the decrease in 

enplanements, Lincoln flights continue to run load factors near 90% in peak time periods while still 

achieving load factors in the neighborhood of 80% in off-peak time periods.

As expected, the loss of Delta Air Lines service to ATL and SLC, as well as the capacity pull-down in MSP, has 

resulted in a corresponding decline in enplanements at LNK. However, it should be noted that Delta service 

to ATL was not removed due to a lack of demand. The Delta ATL service achieved load factors above 70% in 
pg. 9

AUGUST 2010

the three months that service was offered, but with high fuel prices and a struggling economy, the 50-seat 

regional jet used on the route was not profitable on such a long stage length. 

The graph below shows enplanement trends, by year, since 2005 at Lincoln Airport. It is important to note 

that 2009 is the lowest level of enplanements at LNK in the last five years.

Lincoln Enplanement Trend 

2005-2009 

Source: T-100 data from Aviation DataMiner

Service Pattern and Fares: 

Air service at Lincoln has remained somewhat steady over the past five years with the exception of 2010.

From 2009 to 2010, Lincoln has experienced a drop-off in airline brands, nonstop destinations, and daily 

seats. These year-over-year service pattern changes, combined with fare increases in the market, have likely 

been the driver of decreased enplanements in LNK.

Service Pattern Trend 

August 2006 – August 2010

 

Source: Schedule data from Innovata, LLC via Aviation DataMiner

8000

10000

12000

14000

16000

18000

20000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2005 2006 2007 2008 2009

2006 2007 2008 2009 2010

Airline Brands 2 3 3 3 2

Nonstop Destinations 4 5 5 5 3

Avg Daily Departures 15 12 12 12 11

Avg Daily Seats 737 654 653 629 567

Avg Seats per Departure 50 54 53 54 53

AUGUST 2010
pg. 10

AUGUST 2010

 

In addition to service pattern adjustments, average fares play a large part in market performance at Lincoln.

With OMA being a one hour drive from LNK, large fare differences encourage passengers in the LNK service 

area to look for alternative airport options. The table below shows average, net, one-way fares in the top 25 

O&D markets at LNK compared to OMA. While the top 25 markets are illustrated individually in the table, the 

“All Markets” total at the bottom of the table reflects all O&D markets at LNK. The $40 one-way fare 

difference is significant and in most cases would be more than the cost of making the trip to OMA. 

 

Net One-Way Fare Comparison 

LNK v. OMA Top 25 O&D Markets

Year Ending 2010 Q1

Source: DB1B data via Aviation DataMiner

It is important to note that, while average fares reflect a difference of $40 one-way between the two 

markets, the disparity between available fares on any given day are often much more exaggerated. This is 

due to the limited capacity at LNK which results in any available low fare seats being sold out well in 

advance of departure, leaving only high priced walk-up fares remaining. OMA on the other hand has 

significantly greater capacity, resulting in many more low fare seats being available in the market. As such, 

passengers purchasing tickets close in to their flight date are more likely to be utilizing OMA, where lower 

walk-up fares exist.

Rank Market LNK Fare LNK Yield OMA Fare OMA Yield Diff Fare Diff Yield

1 ORD $161.97 34.51¢ $110.98 26.65¢ $50.99 7.86¢

2 DEN $139.03 32.85¢ $93.54 19.75¢ $45.50 13.09¢

3 DCA $194.42 17.99¢ $178.61 17.31¢ $15.81 0.69¢

4 LAX $195.89 14.68¢ $134.78 9.94¢ $61.11 4.74¢

5 SAN $162.74 12.57¢ $142.53 10.67¢ $20.21 1.90¢

6 LAS $160.13 15.15¢ $124.78 11.23¢ $35.35 3.92¢

7 SEA $216.30 14.70¢ $162.50 10.73¢ $53.81 3.97¢

8 PHX $176.90 17.14¢ $144.65 13.40¢ $32.25 3.75¢

9 PDX $205.84 14.22¢ $188.25 12.69¢ $17.59 1.52¢

10 LGA $216.20 17.78¢ $194.44 16.66¢ $21.76 1.12¢

11 BWI $176.07 16.03¢ $151.32 14.36¢ $24.75 1.67¢

12 SFO $226.08 15.97¢ $169.07 11.49¢ $57.01 4.48¢

13 MCO $185.60 12.34¢ $136.30 9.38¢ $49.29 2.96¢

14 SMF $196.77 14.67¢ $157.56 11.34¢ $39.21 3.33¢

15 PHL $200.50 17.45¢ $149.20 13.59¢ $51.29 3.86¢

16 BOS $224.19 16.80¢ $195.07 15.08¢ $29.11 1.72¢

17 SNA $187.64 14.55¢ $131.07 9.89¢ $56.57 4.66¢

18 IAD $232.30 21.01¢ $199.04 19.10¢ $33.26 1.91¢

19 RDU $168.36 15.06¢ $132.55 12.32¢ $35.81 2.73¢

20 ATL $233.66 21.53¢ $206.42 19.49¢ $27.24 2.04¢

21 ABQ $152.81 19.79¢ $140.18 17.05¢ $12.63 2.74¢

22 IND $186.08 28.78¢ $138.63 23.32¢ $47.45 5.46¢

23 AUS $181.58 14.08¢ $139.66 11.04¢ $41.92 3.03¢

24 CMH $176.97 22.70¢ $139.87 19.47¢ $37.10 3.23¢

25 EWR $268.88 22.18¢ $237.61 20.53¢ $31.27 1.65¢

All Markets $190.13 19.23¢ $150.12 14.59¢ $40.01 4.65¢
pg. 11

AUGUST 2010

Current and Potential Connectivity at Lincoln: 

While Lincoln currently has very good air access to the West, North, and East, it lacks access to a large 

number of Southern markets. Additionally, any passengers to Southern markets that can currently be 

accessed from LNK are forced to take circuitous routings over ORD, MSP, and sometimes even DEN. The 

best new connecting option for Lincoln is Delta service to Memphis. Delta’s Memphis hub offers strong 

connectivity to the Southern and Southeastern markets not available to LNK passengers today. The two 

route maps below show connectivity with current air service and the improved connectivity, should Delta 

decide to add Memphis service.

 

Current Domestic Connectivity 

Potential Domestic Connectivity (Delta MEM service)
pg. 12

AUGUST 2010

Delta service to Memphis is not the only option for much needed southbound access. Continental Airlines 

service to Houston and American Airlines service to Dallas/Ft. Worth are both viable options as well. Both 

Continental and American would also provide connecting options to a wide variety of Southern markets, as 

well as access to their extensive Latin/South American international networks.

Previous Air Service Development Efforts: 

In the past, Lincoln Airport has been very proactive in regards to air service development. Airport 

representatives have attended numerous air service development events such as the Jumpstart and 

Network conferences. In addition to conference attendance, the airport has taken numerous meetings with 

both incumbent and prospective carriers regarding service in the Lincoln market. Lincoln Airport officials 

plan to continue this commitment to air service development independent of this proposal.
pg. 13

AUGUST 2010

PROPOSED SOLUTION 

 

Overview: 

To address the large gap in service at Lincoln Airport, and to improve overall access to the national air 

transportation system, it is important that Lincoln recruit new air service to a Southern/Southeastern hub. 

For this reason, the Lincoln Airport and its community partners are seeking a Small Community Air Service 

Development grant in the amount of $500,000 to provide risk mitigation funding in support of nonstop 

service to a Southern/Southeastern airline hub. Grant funds will be matched with local funds of $130,000

made up of $50,000 from the Lincoln Partnership for Economic Development and $80,000 in airport funds 

to be used for marketing the new service. In addition to the aforementioned cash contributions, Lincoln 

Airport will waive landing fees and terminal rent (for new carriers to the market only) for any new service.

This will result in approximately $100,000 in “in-kind” contributions.

The Lincoln community has identified three carrier/hub combinations that would fill the air service gap at 

Lincoln Airport: Delta Air Lines service to Memphis, Continental Airlines service to Houston (merger with 

United expected to occur prior to dispersal of grant funds), and American Airlines service to Dallas/Ft. Worth.

Proforma projections of market performance for all three suggested routes were completed by the airport 

and included below. All three routes are forecast to be profitable, but with economic uncertainty in the airline 

industry, it is essential that small and mid-size communities such as Lincoln offer risk mitigation options to 

successfully recruit new airline service. The SCASD grant funds requested in this proposal, combined with 

matching community funds will provide this option to the Lincoln community.

Targeted Solution #1: Delta Air Lines service to Memphis 

Access to the Delta hub at Memphis is a strong solution to existing gaps in air service at Lincoln. Delta has 

an existing brand presence in the market and would stand to benefit from economies of scale by ramping up 

their operation at LNK. Access to MEM would create new market options for Lincoln passengers that are not 

currently available via ORD, DEN or MSP. 

The following forecast summary shows two daily round trips to Memphis on 50-seat regional jet equipment 

to be profitable for Delta Air Lines.

 Total onboard passengers are projected to be 56,687, of which 1,286 are projected to be local 

passengers. The remaining O&D passengers are a combination of domestic and international 

connections.

 Load factor, based on two daily round trips on a CRJ-200, is estimated to be over 78% 

 Annualized projected operating profit in the market is just over $4.4 million resulting in an operating 

margin of 38%

 For the purpose of this forecast, fuel was assumed to be $2.00 per gallon, including into plane fees 

and taxes
pg. 14

AUGUST 2010

It is important to note that this forecast assumes that Delta maintains a revenue premium in the LNK 

market, but decreases existing one-way average fares by approximately 10%.

Targeted Solution #2: Continental Airlines service to Houston 

In the event that efforts to recruit Delta service to Memphis are unsuccessful, Lincoln Airport and its 

community partners believe that Continental Airlines service to Houston is a viable alternative that could 

provide similar connectivity to the Southern/Southeastern United States. United Airlines is the largest carrier 

at LNK and has announced merger plans with Continental. Following the completion of this merger, the 

existing United brand presence will help to drive demand for the new route, as will an increased Star Alliance 

presence in international markets, especially those markets in Latin/South America where Continental has 

significant capacity and brand presence.

A forecast of LNK-IAH route performance was completed by the airport and shows Continental to be 

profitable in the market with two daily round trip flights on 50-seat regional jet equipment.

 Load factor, based on two daily round trips on a ERJ-145, is estimated to be in excess of 73% 

 Annualized projected operating profit in the market is just over $3.6 million resulting in an operating 

margin of 30%

 For the purpose of this forecast, fuel was assumed to be $2.00 per gallon, including into plane fees 

and taxes

Sector Mileage (sm) 544

Equipment CRJ-200

Seats 50

Service Pattern (daily round trips) 2

Annual Operations 1,445

Completion Factor 99%

Annual Seats 72,270

Estimated Cost per ASM (CASM) $0.184

Sector Cost $4,997

O&D 

Traffic Net Revenue Avg Rev Per Pax Prorated Share

Local O&D Traffic 1,286 $310,167 $241.14 $310,167

Domestic Traffic Flows 54,778 $11,164,645 $203.82 $5,537,513

International Traffic Flows 623 $206,360 $331.37 $71,521

Total System Traffic & Revenues 56,687 $11,681,173 $206.07 $5,919,201

Annual Sector Operating Cost $7,222,664

Annual System Operating Revenues $11,681,173

System Profit $4,458,509

System Operating Margin 38.2%

Calculated Load Factor 78.4%

Summary of Projected Operating Stats

Delta Air Lines: LNK-MEM

Key Operating Metrics

Annualized Traffic & Revenue Summary

Annualized Economic Performance Projection
pg. 15

AUGUST 2010

Targeted Solution #3: American Airlines service to Dallas/Ft. Worth 

If efforts to recruit both Delta and Continental to the market fall short, Lincoln Airport and its community 

partners have identified American Airlines service to Dallas/Ft. Worth as an alternative option. American 

service to LNK would bring a third airline brand to the market and increase competition in regard to fares 

and service. American would provide good access to Latin/South American markets where they have a 

strong existing brand presence; however the Oneworld alliance would not be as effective at driving additional 

international demand due to its limited presence in other areas of the world.

The following route forecast for American service to Dallas was completed by the airport and shows 

American to be profitable on the route assuming two daily round trips with 50-seat regional jet equipment.

 Load factor, based on two daily round trips on a ERJ-145, is estimated to be over 72% 

 Annualized projected operating profit in the market is just over $3.5 million resulting in an operating 

margin of 33%

 For the purpose of this forecast, fuel was assumed to be $2.00 per gallon, including into plane fees 

and taxes

Sector Mileage (sm) 755

Equipment EMB-145

Seats 50

Service Pattern (daily round trips) 2

Annual Operations 1,445

Completion Factor 99%

Annual Seats 72,270

Estimated Cost per ASM (CASM) $0.153

Sector Cost $5,768

O&D 

Traffic Net Revenue Avg Rev Per Pax Prorated Share

Local O&D Traffic 6,766 $1,172,917 $173.36 $1,172,917

Domestic Traffic Flows 44,659 $9,992,511 $223.75 $4,991,730

International Traffic Flows 1,674 $841,706 $502.66 $271,859

Total System Traffic & Revenues 53,100 $12,007,133 $226.12 $6,436,505

Annual Sector Operating Cost $8,337,067

Annual System Operating Revenues $12,007,133

System Contribution $3,670,066

System Operating Margin 30.6%

Calculated Load Factor 73.5%

Summary of Projected Operating Stats

Continental Airlines: LNK-IAH

Key Operating Metrics

Annualized Traffic & Revenue Summary

Annualized Economic Performance Projection
pg. 16

AUGUST 2010

It is important to note that this forecast assumes that American maintains a revenue premium in the LNK 

market versus other area airports, but decreases existing one-way average fares by approximately 10% in 

connecting markets at 20% in the local market.

Need for Risk Mitigation: 

While each of the three targeted markets above is projected to be profitable, airlines tend to be risk averse 

relative to the addition of new routes. Compounding this already risk averse nature is uncertainty in the 

current economic environment and the vulnerability of new air service to sudden spikes in oil prices and 

declining demand due to economic instability.

It is also important to note that the previous route forecasts were completed on a steady-state basis. It is 

likely that revenues early in the route development process will result in negative operating margins for the 

carrier. The purpose of SCASD grant dollars requested in this proposal is to mitigate the risk for airlines 

initiating new service in the face of these barriers to market entry.

Marketing Support: 

As was mentioned previously in this proposal, the Lincoln Airport and its community partners have set aside 

$80,000 specifically for the purpose of marketing any new service outlined in this proposal. In addition to 

marketing efforts for new service, the Lincoln Airport will continue to engage in marketing and 

communication activities in the course of normal business.

Sector Mileage (sm) 549

Equipment EMB-145

Seats 50

Service Pattern (daily round trips) 2

Annual Operations 1,445

Completion Factor 99%

Annual Seats 72,270

Estimated Cost per ASM (CASM) $0.179

Sector Cost $4,903

O&D 

Traffic Net Revenue Avg Rev Per Pax Prorated Share

Local O&D Traffic 6,518 $1,427,724 $219.04 $1,427,724

Domestic Traffic Flows 43,960 $8,614,323 $195.96 $3,884,646

International Traffic Flows 1,610 $683,932 $424.71 $186,852

Total System Traffic & Revenues 52,089 $10,725,979 $205.92 $5,499,223

Annual Sector Operating Cost $7,086,796

Annual System Operating Revenues $10,725,979

System Contribution $3,639,183

System Operating Margin 33.9%

Calculated Load Factor 72.1%

Summary of Projected Operating Stats

American Airlines: LNK-DFW

Key Operating Metrics

Annualized Traffic & Revenue Summary

Annualized Economic Performance Projection
pg. 17

AUGUST 2010

GRANT ADMINISTRATION PLAN 

 

Grant Request Summary: 

In summary, Lincoln Airport and its community partners are requesting a Small Community Air Service 

Development grant in the amount of $500,000 to provide risk mitigation funding for new service to a 

Southern/Southeastern airline hub as outlined in this proposal. Awarded grant dollars will be matched with 

$130,000 ($50,000 community match and $80,000 in airport marketing funds) match from the local 

community and approximately $100,000 of “in-kind” support in the form of landing fee and rent waivers. 

Total project funding is approximately $730,000.

Risk Mitigation Terms: 

Lincoln Airport, subject to Department of Transportation Approval, proposes to implement a risk abatement 

program with the following terms:

 Funding would be available to an airline providing nonstop service to a Southern/Southeastern hub.

 Upon award of grant funds, Lincoln Airport and its community partners will negotiate with prospective 

airlines. The best service proposal will be identified and a risk mitigation agreement between Lincoln 

Airport and the carrier will be negotiated.

 Risk mitigation funds would support the initial phase of new air service. Lincoln Airport will negotiate 

a detailed service agreement with the carrier that is consistent with DOT guidelines for grant fund 

use.

 The costs of operating the new service will be defined in discussions with the selected carrier and 

outlined in a contractual manner. Industry cost data for appropriate aircraft type and stage length 

will help guide the airport in these discussions.

 A target for overall revenue associated with the new service and the component of that revenue that 

will be credited to the new route will be agreed upon. From this, a targed revenue figure per flight will 

be established.

 Lincoln Airport will monitor traffic and revenue reports for the new service, which will be provided by 

the selected carrier.

 Any revenue shortfall will be offset with risk mitigation funds upon detailed invoice from the selected 

carrier. Lincoln Airport, in turn, will invoice the Department of Transportation for its share of funding 

in the agreed upon manner.

 Lincoln Airport will seek a one year risk mitigation agreement with the selected airline, meaning that 

in exchange for the lower risk profile for the carrier, the airport expects that the new route will be 

given adequate time to achieve revenue maturity.
pg. 18

AUGUST 2010

Project Term: 

Given the current state of the airline industry, where fleet sizes are deflated due to previous economic 

conditions, Lincoln Airport respectfully requests that it be given up to two years from the date of grant award 

to select an airline and enter into an agreement. Any risk mitigation agreement will have a term of one year.

Role of Community Partners: 

The City of Lincoln, Lancaster County, Lincoln Airport Authority, Lincoln Chamber of Commerce, and the 

Lincoln Partnership for Economic Development are partnering to ensure the success of the project outlined 

in this proposal. The primary role of the partners will be to provide matching funds for the SCASD grant, 

negotiate any carrier agreements, communicate with the Department of Transportation during the grant 

period, and administer total project funding.

Project Monitoring: 

To ensure that grant dollars and community matching funds are used in a manner that achieves the 

aforementioned objectives, Lincoln Airport will submit a quarterly progress report to the Department of 

Transportation outlining route performance, including but not limited to:

 Load Factor

 Average Fares

 Traffic Origin and Destination

 Total Segment Revenue compared to Targeted Revenue
pg. 19

AUGUST 2010

APPENDIX B

 Page 1 of 3

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET OST-2010-0124

SUMMARY INFORMATION

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

SF424 on http:// www.grants.gov. 

A. APPLICANT INFORMATION: (CHECK ALL THAT APPLY)

X Not a Consortium ⁭ Interstate Consortium ⁭ Intrastate Consortium

⁭ Community now receives EAS subsidy

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

 If previous recipient, expiration date of grant: _ _2006__ _______

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

Public Private

1. ___________________________________ 1. Lincoln Partnership for Economic Development

2.____________________________________ 2.______________________________________

3.____________________________________ 3.______________________________________

4.____________________________________ 4.______________________________________

5.____________________________________ 5.______________________________________

C. PROJECT PROPOSAL: (CHECK ALL THAT APPLY)

X Marketing ⁭ Upgrade Aircraft X New Route

⁭ Personnel ⁭ Increase Frequency ⁭ Low Fare Service

⁭ Travel Bank ⁭ Service Restoration ⁭ Subsidy
pg. 20

AUGUST 2010

 

 APPENDIX B

 Page 2 of 3

⁭ Surface Transportation ⁭ Regional Service ⁭ Other (specify)

_________________

X Revenue Guarantee ⁭ Launch New Carrier _________________

_________________

X Start Up Cost Offset ⁭ First Service _________________

_________________

⁭ Study X Secure Additional Carrier

D. EXISTING LANDING AIDS AT LOCAL AIRPORT:

X Full ILS X Outer/Middle Marker X Published Instrument 

Approach

X Localizer ⁭ Other (specify)

E. PROJECT COSTS:

1. Federal Amount Requested: ____$ 500,000 ________________

2. State cash financial contribution: ____$ 0______________________

3. Local cash financial contribution...

3a. Airport cash funds: ____$ 80,000 (Marketing)____ __

3b. Non-Airport cash funds: ____$ 50,000_________________

3c. Total local cash funds (3a. + 3b.): ____$130,000_________________

4. TOTAL CASH FUNDING (1. +2.+3.) ____$630,000_________________

5. Local funds contributed from already-existing

 programs or projects included in line3c. amount: ____$ 80,000__________________

6. Local funds contributed from new commitments

 or new resources included in line 3c. amount: ____$ 50,000__________________

7. Airport In-Kind contribution: ____$ 90,680__________________

 (amount & description) Landing fee Credit – 2 RJ’s a day

8. Other In-Kind contribution: ____$ 0_______________________

 (amount & description)

9. TOTAL IN-KIND CONTRIBUTION (7.+8.): ____$ 90,680__________________

 
pg. 21

AUGUST 2010

10. TOTAL PROJECT COST (4.+9.) ____$720,680__________________

APPENDIX B

Page 3 of 3

F. ENPLANEMENTS:

2000____266,375 ______ 2004____221,228 _________ 2008____162,929 _________

2001____238,948 ______ 2005____202,917 _________ 2009 142,025 _ 

 

 2002____230,389_______ 2006____190,461 _________

2003____211,594_______ 2007____168,894 _________

G. IS THIS APPLICATION SUBJECT TO REVIEW BY STATE UNDER EXECUTIVE ORDER 12372 PROCESS?

⁭ a. This application was made available to the State under the Executive Order 12372 Process for review on 

(date)___________________.

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

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

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

X No ⁭ Yes (explain) _______________________________________________________________
pg. 22

AUGUST 2010

LINCOLN AIRPORT AUTHORITY 

2400 West Adams St, Lincoln, NE 68524 • Phone: 402.458.2400 • Fax: 402.458-2490 

jwood@lincolnairport.com • www.lincolnairport.com