APPENDIX B 

Page 1 

APPLICATION UNDER 

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM 

DOCKET DOT-OST-2013-0120 

SUMMARY INFORMATION

All applicants must submit this Summary Information schedule, as the application coversheet, 

a completed standard form SF424 and the full application proposal on 

www.grants.gov.

For your preparation convenience, this Summary Information schedule is located at 

http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/SCASDP

A. PROVIDE THE LEGAL SPONSOR AND ITS DUN AND BRADSTREET (D&B) DATA UNIVERSAL

NUMBERING SYSTEM (DUNS) NUMBER, INCLUDING +4, EMPLOYEE IDENTIFICATION NUMBER (EIN) 

OR TAX ID. 

Legal Sponsor Name: CAPITAL REGION AIRPORT COMMISSION

DUNS Number: 082871534

EIN/Tax ID: 54-1004464 

B. LIST THE NAME OF THE COMMUNITY OR CONSORTIUM OF COMMUNITIES APPLYING: 

1. RICHMOND, VA 

2.

3.

4.

C. PROVIDE THE FULL AIRPORT NAME AND 3-LETTER IATA AIRPORT CODE FOR THE APPLICANT(S)

AIRPORT(S) (ONLY PROVIDE CODES FOR THE AIRPORT(S) THAT ARE ACTUALLY SEEKING SERVICE). 

1. Richmond International Airport (RIC) 2. 

3. 4. 
APPENDIX B 

Page 2 

D. LIST THE 2-DIGIT CONGRESSIONAL DISTRICT CODE APPLICABLE TO THE SPONSORING 

ORGANIZATION, AND IF A CONSORTIUM, TO EACH PARTICIPATING COMMUNITY. 

1. VA-03 2. VA-07 

3. 4. 

E. APPLICANT INFORMATION: (CHECK ALL THAT APPLY) 

 Not a Consortium □ Interstate Consortium □ Intrastate Consortium D 

□ Community now receives subsidized Essential Air Service 

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

Development Program Grant 

If previous recipient: Year of grant(s): 2004

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

PUBLIC PRIVATE 

1. Capital Region Airport Commission 1. Greater Richmond Chamber 

2. 2. 

3. 3. 

4. 4. 

5. 5. 

G. PROJECT PROPOSAL: (CHECK ALL THAT APPLY) 

 Marketing  Upgrade Aircraft  New Route 

 Travel Bank  Service Restoration  Subsidy 

 Surface Transportation  Regional Service  Revenue Guarantee 

 Launch New Carrier  Start-up Cost Offset  First Service 

 Study  Secure Additional Service  Other (explain below) 

H. EXISTING LANDING AIDS AT LOCAL AIRPORT: 

Full ILS Outer/Middle Marker 

Localizer Other: WAAS LPV 

Published Instrument Approach 
APPENDIX B 

Page 3 

I. PROJECT COST: DO NOTENENTER TEXT IN SHADED AREAS

J. IN-KIND CONTRIBUTIONS** 

For funds in lines 5a (Airport In-Kind contribution) and 5b (Other In-Kind 

contribution), please describe the source(s) of fund(s) and the value ($) of each. 

Airport In-Kind contributions would include in-airport display media such as dioramas ($500-3000/month, 

based on size and location), digital displays ($1000-3000/month), wall murals ($2000-3000/month), and 

others. Additionally, the airport would include out-of-home (billboard) at airport entrance ($2000/month), 

website banners ($250-500/month), and e-newsletter banners ($500-750/month). New service would also be

eligible for consideration of landing fee reimbursement after twelve months of service. Landing fee 

reimbursement amounts vary due to frequency and type of aircraft used.

Other In-Kind contributions: various contributions via Greater Richmond Chamber communications and 

events. With previous award, we were fortunate to see additional community support, including grocery bag 

promotions, spot radio, TV and print support. 

 

LINE DESCRIPTION SUB TOTAL TOTAL AMOUNT

1 Federal amount requested 750,000

2 State cash financial contribution 40,000

Local cash financial contribution 

3a Airport cash funds 90,000

3b Non-airport cash funds 20,000

3 Total local cash funds (3a + 3b) 110,000 110,000

4 TOTAL CASH FUNDING (1+2+3) 900,000

In-Kind contribution 

5a Airport In-Kind contribution** 75,000

5b Other In-Kind contribution** 10,000

5 TOTAL IN-KIND CONTRIBUTION (5a + 5b) 85,000

6 TOTAL PROJECT COST (4+5) 985,000
K. IS THIS APPLICATION SUBJECT TO REVIEW BY STATE UNDER EXECUTIVE ORDER 12372 

PROCESS? 

□ a. This application was made available to the state under the Executive Order 12372 

Process for review on (date) _ . 

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

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

L. IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT? (IF "YES", PROVIDE

EXPLANATION) 

No □ Yes (explain) 
Proposal under the 

Air Service Development

Docket #DOT

RICHMOND

INTERNATIONAL 

Joint Application of the 

Capital Region Airport Commission

DUNS #082871534 

and the Greater Richmond Chamber

Virginia Congressional District

Docket DOT-OST-2013-0120

nder the Small Community

Air Service Development Program

Docket #DOT-OST-2013-0120

for

ICHMOND (RIC) 

NTERNATIONAL AIRPORT

Commission

and the Greater Richmond Chamber

ginia Congressional Districts VA-03/VA-07 

0120

Small Community

Program

IRPORT
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 2 

Table of Contents

1. TECHNICAL OUTLINE OF PROPOSAL ................................. 3 

Contact Information .................................................................... 3 

Legal Sponsor of Application .......................................................... 3 

Community Partner in Application .................................................... 3 

Project Description ..................................................................... 3 

2. GRANT PROPOSAL SUMMARY .......................................... 4 

Statement of Air Service Deficiency .................................................. 4 

Limited Westbound Air Service Access ............................................... 5 

3. RIC MARKET AREA AND CURRENT AIR SERVICE .................... 7 

RIC Market Area ......................................................................... 7 

Passenger Traffic Levels To/From West Coast are Concerning ................... 8 

Western U.S.: Top RIC O&D Markets.................................................. 9 

RIC Fare Comparison vs. Similar Sized Airports: Deficiency .................... 10 

Previous Air Service Development Efforts ......................................... 11 

Self Sufficiency of Proposed Service is the Goal .................................. 11 

4. GRANT ADMINISTRATION ............................................. 13 

Requested Term of Grant ............................................................ 13 

Program Fund Allocation ............................................................. 13 

Risk Mitigation/Revenue Guarantee Terms ........................................ 13 

Marketing and Promotional Activities .............................................. 14 

Proposed Grant Differs from Previous Grant Award in FY 2004 ................ 15 

 

 
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 3 

1. Technical Outline of Proposal 

Contact Information 

All contact regarding the grant application of the Capital Region Airport Commission should be 

directed to: 

 Mr. Jon E. Mathiasen, AAE 

 President and Chief Executive Officer 

 Capital Region Airport Commission 

 1 Richard E. Byrd Terminal Drive, Suite C 

Richmond International Airport, VA 23250-2400 

P: 804-226-3001 

E: jon-mathiasen@flyrichmond.com

Legal Sponsor of Application 

The legal sponsor of this Small Community Air Service Development Program grant application 

is the Capital Region Airport Commission. 

Community Partner in Application 

The Greater Richmond Chamber joins the Capital Region Airport Commission in support of the 

grant application, and is the community partner responsible for the community match portion 

of the grant. 

Project Description 

The community is requesting a grant in the amount of $750,000 with a community match of 

$150,000 (20%) for a total cash contribution of $900,000. The air service deficiency that exists 

at RIC is the limited westbound U.S. air service access, and the intent of the grant is to 

incubate new westbound service to Denver (DEN) or Salt Lake City (SLC) to improve 

connectivity and access to the national transportation system. The purpose is primarily for risk 

mitigation with a portion of the funding going towards marketing/advertising this new service. 
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 4 

2. Grant Proposal Summary 

Statement of Air Service Deficiency 

The Capital Region Airport Commission, which owns and operates the Richmond International 

Airport (RIC), respectfully submits its grant application for the Small Community Air Service 

Development Program. Richmond, being the capital of the Commonwealth of Virginia, 

experiences high demand for air travel from both business and leisure travelers, whether 

traveling to or from the region on vacation or business trips. 

However, over the last several years the airport has experienced a disturbing trend in 

decreasing enplanements coupled with significantly decreased capacity. This grant proposal 

aims to help rectify this situation and restore enplanement levels, while providing increased air 

service access to the national transportation system. 

RIC Enplanement Trend 

CY 2007 – CY 2012 

 Source: Federal Aviation Administration 

As the table above indicates, enplanements have decreased by over 12% since 2007, which is of 

great concern to the Greater Richmond Region. Decreasing scheduled seat capacity and 

1,400,000

1,500,000

1,600,000

1,700,000

1,800,000

1,900,000

RIC Enplanements

2007 2008 2009 2010 2011 2012

2012 vs. 2007 

% Decrease

RIC Enplanements 1,805,992 1,733,668 1,649,284 1,651,131 1,571,155 1,581,617 -12.4%
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 5 

departures have greatly impacted the enplanement levels, and while the Capital Region Airport 

Commission fully understands the changing dynamics in the U.S. aviation industry over the last 

several years, specific deficiencies have been identified and can be addressed to alleviate this 

downward trend. 

Limited Westbound Air Service Access 

The grant proposal respectfully requests $750,000 for revenue guarantee and marketing of the 

new air service for increased access to the western United States. Specifically, the western 

U.S. hubs of Denver and Salt Lake City will both meet this pressing RIC deficiency, and allow 

for greater air travel to and from this portion of the country. 

As the current service map indicates, there is an air service deficiency in terms of access to the 

larger western U.S. region. While access to the west is achievable through the westbound 

connecting hubs such as DFW, IAH, ATL, and ORD, there are limited available seats which make 

accessibility increasingly difficult for passengers to/from the greater Richmond region. 

 Source: Innovata, LLC via Aviation DataMiner

As evidence of the stated deficiency in westbound air service access, we would point to the 

high load factors experienced at RIC for CY 2012. The primary westbound gateways at RIC, 

illustrated in the table on the following page, achieve very high load factors, with the summer 

months being particularly high with load factors in the high 80% range. Therefore, passengers 

Air Service 

Deficiency Area
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 6 

wishing to travel to and from the Richmond region must look for alternative options, including 

Washington Dulles International Airport (IAD) and other Washington, DC-area facilities. 

RIC Load Factors for Nonstop Flights Which are 

Primary Connections to/from Western U.S. 

CY 2012 

 Source: Aviation DataMinerTM analysis of DOT/BTS Form 41 Traffic 

A Small Community Air Service Development Program grant award would allow Richmond 

International Airport to recapture a portion of the passengers that would prefer to fly to RIC, in 

addition to stimulating net new demand that will have an economic benefit on the region as a 

whole. 

 

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec CY 2012

DL - DTW 61.1% 67.7% 84.2% 85.4% 85.6% 88.9% 86.9% 83.6% 78.0% 86.1% 80.1% 74.1% 80.4%

DL - ATL 66.0% 70.5% 82.2% 83.1% 82.8% 85.5% 84.9% 82.3% 75.0% 81.6% 83.4% 80.9% 80.1%

DL - MSP 68.1% 75.0% 75.0% 75.0% 75.0% 89.2% 83.3% 80.1% 75.7% 78.5% 71.8% 71.3% 78.1%

UA - ORD 68.6% 68.9% 75.7% 81.3% 84.8% 87.8% 88.0% 86.3% 81.2% 87.7% 82.7% 79.6% 81.5%

UA - IAH 72.3% 75.1% 74.5% 70.3% 89.6% 85.1% 84.2% 88.9% 84.3% 94.2% 84.1% 88.6% 83.1%

UA - IAD 67.6% 71.2% 76.3% 80.5% 74.5% 83.1% 78.4% 78.6% 82.7% 82.6% 82.7% 82.5% 78.0%

US - CLT 72.7% 75.1% 77.1% 81.8% 82.3% 85.4% 83.2% 85.2% 79.9% 87.4% 86.7% 83.5% 81.5%

AA - DFW 70.5% 66.9% 77.9% 83.4% 82.7% 85.9% 87.3% 77.6% 68.6% 87.0% 81.5% 79.4% 79.1%
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 7 

3. RIC Market Area and Current Air Service 

RIC Market Area 

Richmond, as the capital of the Commonwealth of Virginia, is characterized as a highly 

populated area with major business and government interests, as well as several higher 

educational institutions within its service area. The population within a 45-minute drive time 

to Richmond International Airport is approximately 1.1 million and increases to 1.5 million 

within a 60-minute drive time. Clearly, efficient air service is the lifeblood of the Greater 

Richmond Region, with several entities relying heavily on domestic and international air service 

access. 

RIC Extended Market Area

 Source: Microsoft MapPoint

RIC

PHF

ORF

IAD DCA
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 8 

Several commercial airports are within a two – three hour drive from Richmond, which causes 

passenger traffic leakage to these markets due to lack of available westbound seats. The 

objective of this grant application is to recapture some of these leaking passengers, creating a 

more efficient mode of transportation for those who would prefer to utilize Richmond 

International Airport over the other neighboring airports, but either have a difficult time 

finding available seats or the ticket prices are prohibitive due to limited availability. 

Passenger Traffic Levels To/From West Coast are Concerning 

The westbound deficiency is unmistakably evident when analyzing the passenger traffic levels 

at Richmond International Airport and Washington Dulles International Airport. Dulles is used as 

a comparison because it is the airport with the highest levels of air service where RIC 

experiences traffic leakage. Overall, based on RIC’s top 10 westbound O&D markets from CY 

2012 (LAX, LAS, SFO, DEN, PHX, SAN, SEA, SLC, PDX, HNL), RIC suffers from approximately 

135,000 fewer O&D passengers than would be expected based on Metropolitan Statistical Area 

(MSA) population comparisons. 

RIC vs. IAD Westbound Traffic Capture 

CY 2012 

 Source: US Census Data and Aviation DataMinerTM analysis of DOT/BTS O&D Survey

While disappointing, this data is not particularly surprising due to the lack of available seats to 

westbound connecting hubs at RIC. Increased westbound capacity to either Denver or Salt Lake 

City would greatly improve the efficiency with which business and leisure passengers travel to 

IAD - MSA Population 5,636,232

RIC - MSA Population 1,208,101

Total Region Population 6,844,333

IAD Western US O&D - Key Cities 2,959,173

RIC Western US O&D - Key Cities 467,229

Total Region US Western O&D - Key Cities 3,426,403

Ratio of Region Western O&D To Population 0.50

RIC Population x Western US O&D Ratio 604,798

Current RIC Capture: 467,229

Net RIC Traffic / Service Deficiency: 137,569
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 9 

and from the Greater Richmond Region. The effects of increased options to/from the west 

coast would be numerous for the region, ranging from widespread economic and economic 

development benefit, reduced contribution to congestion on the I-95 corridor above 

Fredericksburg, and increased productivity for travelers no longer forced to take to the 

interstate highway system for better flight options.

Western U.S.: Top RIC O&D Markets 

Western US markets accounted for approximately 20% of the total passenger traffic during CY 

2012. Markets such as Los Angeles, Las Vegas, San Francisco, Denver, Phoenix, San Diego, and 

Seattle all had over 50 PDEW and were in the overall top 20 O&D markets at RIC. The fact that 

these cities all graced the top 20 O&D markets indicate that there is significant demand 

to/from the western US, and that increased capacity will not only reduce leakage but stimulate 

net new passenger traffic. 

RIC’s Top Western U.S. O&D Markets 

CY 2012 

 

 Source: Aviation DataMinerTM analysis of DOT/BTS O&D Survey 

It should also be noted that DEN and SLC had 81.9 and 31.2 PDEW each, respectively, for CY 

2012. This is a critical point, because airlines often look at the local O&D passenger traffic 

when analyzing the potential for nonstop service from any airport, and the higher the number 

Rank Market Psgr PDEW Gross OW 

Fare Gross Revenue % of Pax Rank Market Psgr PDEW Gross OW Fare Gross Revenue % of Pax

8 LAX 81,192 110.9 $278.51 $22,612,909 2.8% 107 BZN 3,031 4.1 $321.73 $975,139 0.1%

9 LAS 69,863 95.4 $265.44 $18,544,642 2.4% 108 PSP 2,991 4.1 $356.70 $1,067,065 0.1%

10 SFO 61,726 84.3 $290.82 $17,951,258 2.1% 113 OGG 2,653 3.6 $602.05 $1,597,177 0.1%

11 DEN 59,920 81.9 $231.64 $13,879,627 2.1% 114 GEG 2,613 3.6 $422.98 $1,105,369 0.1%

12 PHX 52,904 72.3 $241.61 $12,782,259 1.8% 128 FAT 1,797 2.5 $376.17 $675,898 0.1%

17 SAN 44,793 61.2 $278.98 $12,496,511 1.5% 133 FAI 1,642 2.2 $626.50 $1,028,443 0.1%

19 SEA 41,203 56.3 $304.95 $12,564,659 1.4% 135 LIH 1,569 2.1 $575.85 $903,413 0.1%

35 SLC 22,844 31.2 $321.53 $7,344,861 0.8% 136 EGE 1,560 2.1 $364.59 $568,879 0.1%

39 PDX 19,178 26.2 $339.02 $6,501,711 0.7% 146 SBA 1,367 1.9 $326.10 $445,639 0.0%

43 HNL 13,607 18.6 $571.02 $7,769,613 0.5% 147 KOA 1,330 1.8 $556.53 $740,333 0.0%

48 SMF 12,009 16.4 $359.11 $4,312,464 0.4% 148 MRY 1,330 1.8 $462.86 $615,595 0.0%

51 SNA 9,777 13.4 $386.57 $3,779,488 0.3% 152 EUG 1,240 1.7 $316.32 $392,098 0.0%

55 COS 8,318 11.4 $347.17 $2,887,841 0.3% 162 OAK 1,039 1.4 $400.59 $416,100 0.0%

57 ABQ 8,026 11.0 $323.54 $2,596,712 0.3% 168 GJT 960 1.3 $309.81 $297,493 0.0%

63 SJC 7,677 10.5 $362.95 $2,786,375 0.3% 170 FCA 932 1.3 $372.58 $347,162 0.0%

71 TUS 6,786 9.3 $380.23 $2,580,437 0.2% 172 HDN 871 1.2 $315.82 $275,154 0.0%

82 ONT 5,309 7.3 $400.32 $2,125,304 0.2% 174 MSO 859 1.2 $418.59 $359,709 0.0%

88 ANC 4,541 6.2 $506.03 $2,297,878 0.2% 178 PSC 802 1.1 $407.23 $326,702 0.0%

92 RNO 4,361 6.0 $378.41 $1,650,130 0.2% 179 ASE 796 1.1 $343.34 $273,464 0.0%

99 BOI 3,354 4.6 $388.55 $1,303,245 0.1% 180 BIL 783 1.1 $383.78 $300,459 0.0%

100 JAC 3,354 4.6 $355.42 $1,192,002 0.1% Total 570,907 779.9 $302.45 $172,671,221 19.6%
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 10 

of local passengers the better in order to capture higher revenues that are allocated solely to 

that segment. While Denver clearly has a higher local component, both hubs appear to provide 

opportunity based on its local O&D traffic. Passengers traveling beyond the hub are important 

as well, and are well represented in the western U.S. O&D markets table. 

RIC Fare Comparison vs. Similar Sized Airports: Deficiency 

A RIC air service deficiency has already been illustrated in terms of passengers per population 

compared to IAD. However, that is not the only area where an air service deficiency exists 

which can potentially be remedied by the award of a SCASD grant. When examining the average 

one way gross airfares for the RIC top 10 western O&D markets for CY 2012, and comparing to 

airports that are of similar size in terms of enplanements and air service access, it is clear that 

RIC has higher fares than its peer set of airports. The peer group of airports were also chosen 

based on geographic location, and are all airports on the east coast or in the eastern portion of 

the U.S.

RIC Top 10 Western O&D Markets Fares 

 vs. Peer Group Airports 

CY 2012 

 Source: Aviation DataMinerTM analysis of DOT/BTS O&D Survey 

Market RIC DAY SDF PVD MHT

LAX $278.51 $235.91 $291.64 $286.87 $283.63

LAS $265.44 $215.92 $227.00 $241.00 $245.92

SFO $290.82 $245.30 $276.87 $292.04 $273.71

DEN $231.64 $184.71 $196.30 $222.64 $201.45

PHX $241.61 $223.15 $236.60 $232.99 $230.91

SAN $278.98 $271.91 $273.53 $278.54 $269.69

SEA $304.95 $249.58 $307.79 $308.72 $309.14

SLC $321.53 $273.07 $236.21 $304.29 $268.64

PDX $339.02 $281.47 $303.97 $300.75 $299.65

HNL $571.02 $519.17 $548.40 $634.78 $577.83

Total $283.48 $232.30 $254.71 $271.93 $252.97
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 11 

Of the 10 markets above, RIC has higher average gross one way fares in 6 of the 10, including 

both Denver and Salt Lake City. In the markets where RIC is not the highest, it is near the top. 

Overall, RIC has the highest average one way gross fare for these 10 markets, which are the top 

markets at the airport. Increased capacity and a new hub destination could help bring fare 

discipline into the RIC marketplace. 

Previous Air Service Development Efforts 

RIC has been conscientious and steadfast in its air service development efforts over the last 

several years, recognizing the importance of this function to ensure adequate air service levels 

for the community. In addition to having dedicated staff focused on marketing and air service 

development, the following activities help RIC stay updated and knowledgeable of not only its 

air service landscape, but also that of the U.S. aviation industry. 

• Attend annual air service development conferences which include Network USA and ACI 

Jumpstart, in addition to other aviation-related conferences such as the Boyd Group 

International Aviation Forecast Summit. These conferences allow for RIC management 

to meet one on one with incumbent and potential carriers, in addition to learning from 

top airline executives, aircraft manufacturers, and other industry stakeholders. 

• Proactively monitor performance of incumbent airlines’ flights at RIC to address 

potential issues/concerns/opportunities in a timely manner. 

Self Sufficiency of Proposed Service is the Goal 

The Capital Region Airport Commission and the Greater Richmond Chamber fully understand 

that any new air service must achieve self sufficiency in order to be successful long term. 

Changing dynamics in the U.S. aviation industry can impact new service, and the Capital Region 

Airport Commission is prepared to be proactive to ensure that these changes, whether through 

consolidation of carriers, high fuel prices, or changing aircraft fleet mix do not have a negative 

effect on the performance of the proposed new route. The following are tactics that will be 

employed to ensure self sufficiency: 

• Regularly scheduled monthly calls with the carrier to discuss issues/concerns in order 

to proactively address potential traffic/revenue shortfalls. It is expected that from 
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 12 

these discussions will come a plan to address these problems, if they should exist, and 

an action plan will be put into place immediately to rectify the situation. 

• Continued marketing efforts on behalf of the community to bring awareness within the 

community of the new service, and to encourage potential travelers to utilize the new 

service in order for long term success. Should there be a passenger or revenue 

shortfall, marketing efforts will be redirected to better target potential passengers. 

It should be noted, that based on analyses of the airport and regional traffic levels, that the 

proposed route(s) has a high probability of achieving self sufficiency based on current traffic 

leakage and latent demand which is not being met. Should the performance become 

problematic, the Capital Region Airport Commission stands ready to assist in any way possible 

to achieve the sustainable performance levels. 

 
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 13 

4. Grant Administration 

Requested Term of Grant 

The Capital Region Airport Commission respectfully requests that the term of the grant be for 

one year from the start of the new service. Thereafter, any unused funds will be relinquished 

back to the U.S. Department of Transportation.

Program Fund Allocation 

The primary purpose of the grant request is for risk abatement/offset funding for increased 

western US hub access. The community strongly believes that this service will be successful, 

with a portion of the funding going towards a marketing/advertising program to increase and 

build awareness within the community of the new service. 

Risk Mitigation/Revenue Guarantee Terms 

The Capital Region Airport Commission already has an action plan in place to immediately 

contact potential carriers upon acknowledgement of the grant award. The steps to implement 

the grant award are as follows: 

• Funding would be available to an airline providing nonstop service to a western US hub, 

specifically Denver or Salt Lake City. 

• Upon award of grant funds, the Capital Region Airport Commission will negotiate with 

prospective airlines. Upon the decision of which service proposal most closely meets 

the needs of the RIC community, a risk mitigation agreement will be negotiated. 

Proposed Grant Activity

SCASD 

Grant 

Funds

Community 

Funds

TOTAL

Risk Mitigation/Revenue Guarantee $700,000 $100,000 $800,000

Marketing/Advertising Support $50,000 $50,000 $100,000

TOTAL $750,000 $150,000 $900,000
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 14 

• Risk mitigation funds would support the initial phase of new air service. The Capital 

Region Airport Commission 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 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 (local and beyond) will be agreed upon. 

From this, a targeted revenue figure per flight will be established. 

• Passenger traffic and revenue will be monitored by the airport 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. The Capital Region Airport Commission, in turn, will invoice 

the Department of Transportation for its share of funding in the agreed upon manner. 

Marketing and Promotional Activities 

The Capital Region Airport Commission and the Greater Richmond Chamber recognize the 

critical importance of marketing and advertising activities that must take place to spread 

awareness of the new service at RIC. For this reason, a comprehensive and all encompassing 

marketing/advertising plan will be implemented to ensure the success, and ultimately the self 

sufficiency, of the new service at RIC. Example activities and tactics which have been used 

successfully in the past and will be used for this new service include the following: 

• Print placements in local newspapers and other publications across the region. 

• Television advertisements. 

• Out-of-home (OOH) advertising in high traffic corridors to reach as many potential 

travelers as possible. 

• Radio advertisements during peak periods of the day to again reach as many potential 

travelers as possible and build awareness. 

• Digital campaigns via platforms like Twitter, Facebook, and others. 
2013 Small Community Air Service Development Program Grant Proposal 

Richmond International Airport (RIC) 

 Docket DOT-OST-2013-0120 Page 15 

Proposed Grant Differs from Previous Grant Award in FY 2004 

The Capital Region Airport Commission and the RIC community were fortunate recipients of a 

$950,000 SCASDP award during FY 2004. As noted in the application for that grant, RIC’s 

average airfare, at the time, was among the highest in the country. RIC used the SCASDP grant 

primarily for marketing/advertising/promotion of new low-fare service and was able to bring 

two low-fare carriers to the airport. 

AirTran utilized a portion of the SCASDP grant in 2005 when entering the RIC market with MCO, 

ATL, and PHL nonstop flights. In 2006, JetBlue also utilized a portion of the SCASDP funds to 

enter the market with BOS and JFK nonstop service. This initial investment has had long-term 

benefits and resulted in a good success story. Both JetBlue and AirTran attained self sufficiency 

and RIC is proud to have both airlines as incumbent carriers today. JetBlue has increased seat 

capacity by approximately 75% between 2006 and 2013, indicating that RIC is a profitable and 

self sustaining market and AirTran is in the process of transitioning to Southwest Airlines in 

Richmond. 

The current SCASDP application differs substantially from the previous grant award nearly ten 

years ago. The current proposal is for increased westbound access, where a deficiency clearly 

exists and is primarily for risk mitigation funding, with a smaller portion going towards 

marketing/advertising of new service. The prior award was primarily for marketing/advertising, 

with a lesser portion allocated to offsetting start up costs. Furthermore, the FY 2004 award 

focused on east coast passenger traffic, and not western US access. 

Today’s aviation environment is markedly different than 2004, with the proliferation of airline 

mergers, increased fuel costs, and changing fleet dynamics at the remaining carriers. Risk 

mitigation funding is attractive for carriers who do not have the tolerance for risk that once 

may have existed in 2004, and therefore the Capital Region Airport Commission believes that it 

is necessary to appeal to carriers considering new routes at RIC.