1 APPLICATION UNDER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST

- 201 3

- 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/SCA SDP

A. P ROVIDE THE LEGAL SPO NSOR AND ITS DUN AND BRADSTREET (D&B) DATA UNIVERSAL

NUMBERING SYSTEM (DUNS) NUMBER , INCLUDING +4, EMPLOYEE IDENTIFICAT ION NUMBER

(EIN) OR TAX ID

.

Legal Sponsor Name:

City of West Wendover

DUNS Number: 197602675

EIN/Tax ID: 88

- 0272071

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

1.

_ C ITY OF W EST W ENDOVER , N EVADA (A ND T OOELE C OUNTY , U TAH )

_____________
2._ C ITY OF E LKO , N EVADA

____________________ _______________________________ 3._

___________

________________________________________
4.____________________________________________________

C

. P ROVIDE THE FULL AIRP ORT NAME AND 3

- L ETTER IATA A IRPORT C ODE FOR THE

APPLICANT ( S ) AIRPORT ( S ) (O NLY PROVIDE CODES FO R THE AIRPORT ( S ) THAT ARE ACTUALLY

SEEKI NG SERVICE ).

1. Wendover Airport (ENV) 2

.

3

. Elko Regional (EKO) 4

.2

D. L IST THE 2

- DIGIT CONGRESSIONAL DISTRICT CODE APPLIC ABLE TO THE SPONSORI NG

ORGANIZATION , AND IF A CONSORTIUM , TO EACH PARTICIPATIN G COMMUNITY

.

1. 2nd 2

.

3

. 4

.

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

Not a Consortium √ Interstate Consortium Intrastate Consortium

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) : 2009

F

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

PUBLIC PRIVATE

1. City of West Wendover, Nevada 1. Wendover Resorts Consortium

2. City of Elko, Nevada 2. West Wendover 1% Tourism Committee

3. Tooele County, Utah 3. Elko Chamber of Commerce

4. 4. Northeast Nevada Reg. Dev. A uthority

5. 5. Nevada Commission on Eco. Development

G

. P ROJECT P ROPOSAL : ( 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

. E XISTING L ANDING A IDS AT L OCAL A IRPORT :

Full ILS Outer/Middle Marker √ Published Instrument Approach

Localizer √ Other (specify) RNAV3

I

. P ROJECT C OST : D O NOT ENTER TEXT IN SHADED AREA

L INE D ESCRIPTION S UB T OTAL T OTAL A MOUNT

1 Federal amount requested $95 0,000

2 State cash financial contribution $0

Local cash financial contribution

3a Airport cash funds $0

3b Non

- airport cash funds $180 ,000

3 Total local cash funds ( 3a + 3b ) $180 ,000

4 TOTAL CASH FUNDING ( 1+2+3 ) $180 ,000

In

- K ind contribution

5 a Airport In

- Kind contribution ** $275,000

5b Other In

- Kind contribution ** $120,000

5 TOTAL IN

- KIND CONTRIBUTION

( 5 a + 5b ) $395,000

6 TOTAL PROJECT COST ( 4+ 5 ) $ 1,525 ,000

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.

EKO: Landing $27 ,000 , Ramp: $12,000

ENV: Landing $13 ,000

RNO: Landing $30 ,000, Terminal : $ 1 5 6 ,000, Ramp: $37 ,000 (Year One)4

K

. I S T HIS A PPLICATION S UBJECT T O R EVIEW B Y S T ATE U NDER E XECUTIVE O RDER 12372

P ROCESS ?

a. This application was made available to the s tate under the Executive Order 12372

Process for rev iew on (date) _____________.

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

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

L. I S T HE A PPLICANT D ELINQUENT O N A NY F EDERAL D EBT ? (I F “Y ES ”, P ROVIDE

E XPLANATION )

√ No Yes (explain)

_____________________________________________ _________________________________

______________________________________________________________________________i 

# Application Narrative

West Wendover

/Elko, Nevada Consortium

United States Department of Transportation
Office of Aviation Analysis
Small Community Air Service Development Program

Application under the:

Wendell H. Ford Aviation Investment and Reform Act for the 21 st Century
(P.L. 106

- 181 )

, As Reauthorized by the Vision 100

- Century of Aviation Reauthorization Act
(P.L. 108

- 176)

Pursuant to Order 2013

- 6

- 14 As Authorized by 49 U.S.C. § 4173

Proposal Sponsor: City of West Wendover

AOR : Mr. Chris J. Melville
City Manager
1111 North Gene L. Jones Way

West Wendover, Nevada 89883

Docket: DOT

- OST

- 201 3

- 0 120

Date: July 26 , 201 3ii TABLE OF CONTENTS

Subject Page

Executive Summary 1

Introduction 3

Consort ium Communit ies 4

Consortium Airport s 5

Factors That Have Affected Air Service 6

ENV Market Research 6

Catchment Area and Community Profile s 7

Market Analysis 9
Potential Passengers 9

Potential Air Service 10
Proposed Fares and Passenger and Revenue Forecast 11 Calculation of Subsidy Required for Operation 1 2

Action Plan for the Consortium 1 3

Public

- Private Partnershi p 1 3 Project Goals 1 3

Action Plan Elements 1 3
Marketing Program 1 3
Target Audience 1 4

Marketi ng and Media Selection 1 4

To tal Incentive Package 1 4 Sponsor Participation 1 5

Performance Measur ement 1 5

Finalization of Rec ru itment of Air Service 1 5

Mar keting and Media Plan 1 5

Ai r Service Performance 1 5

Community Support 1 6

Appendix A

- Letters of SupportWendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

1 EXECUTIVE SUMMARY

Our application seeks funding for reinstated service for the E lko, Nevada community via Elko Regional Airport (EKO) and new service to West Wendover, Nevada/Tooele County, Utah

communit ies via Wendover Airport (ENV), both to Reno International Airport (RNO). This is
envisioned as a single route RNO

- EKO

- ENV.

The Orde r says our application should help our communities secure air service enhancements that will be responsive to their air transportation/air fare needs on a long

- term basis after the

financial s upport of the grant has e xpired, and our application does this.

For purposes of this executive summary, we have identified and summarized the priority and
secondary criteria directly from the 2013 Order to preview our comprehensive, competitive

response. First to your primary selection criteria:

1. Higher air fares than the national average.

ENV has no scheduled service. ENV currently accommodates unscheduled gaming
charters via Allegiant Airlines. Scheduled or unscheduled air carrier service to RNO is not

available for either consortiu m community . Scheduled or unsc heduled air carrier s ervice to

SLC is available only via EKO. This total cost is above average for the distance

. 2. Local revenue cost sharing from other than airport revenues.

The consortium has committed to $180 ,000 in local non

- airport cash, plus $120,0 00 in
community in

- kind for marketing and plan execution, plus $275,000 in airport in

- kind in the

form of waived fees for this application. The cash and community in

- kind revenues are

committed from area community businesses

. 3. Public

- private partnership.

The cities of West Wendover , Nevada, and Elko , Nevada, along with Tooele County, Utah

and the business communities within the region are the C onsortium. The C onsortium i s the
public

- private partnership for purposes of this application. S ubstantial discuss ion and
strategic planning has been underway for some time . In fact, the C onsortium has been in existence since the execution of the 2009 SCASD grant and we have been synthesizing our
market strategy since that time

, culminating in this application. Mr. Ch ris Melville has been leading the charge and is the AOR for purposes herein.
4. Benefits broad segment of the traveling public.
Consortium airports are an important part of the a bility of our business communities to remain competitive and for the citizenr y’s local access to the national air transportation
system. Consortium leadership believes that that DOT selection of this application will work
to fill an unmet demand and create new opportunities in scope and role of scheduled air
service in the region a cross the various consortium community industries.
5. The assistance will be used in a timely manner.

I nitiation of the service would begin as soon as the service is funded with the SCASDP
grant and coordinated with the airline. A two

- year time period is envisioned to allow a meaningful market to develop. The AOR commits and grant assurance stipulates that the
timely execution of the appropriate funds will be made.

6

. Multiple communities

. As has been described, this application meet s the spirit and inten t of this priority criteria,
with regional, intrastate consortium community participation. Importantly, RNO is the larger
airport involved with meaningful connections and timely banks to the nation’s airports.Wendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

2 Now to your secondary selection criteria and additional guidance specified in Section C :

1. Innovation

. While a regional, intrastate consortium is not necessarily innovative for SCASD
purposes, several other important factors combine that when taken as a whole, suggest

that this application is re sponsive. These factors include geographic distance, restoration
of service while filing an unmet demand at both consortium comminutes, and a positive

impact on travel and tourism, including the resort/ gaming industry. We note that previous SCASD grants in volving gaming, tourism and travel have fared well

. Not only do we

believe that this model will be successful, but believe variants of this model have been
successful elsewhere. We hope to refine and improve upon previous business models

and share that inf ormation with those to follow.

2. Participation

. The consortium has invested a substantial amount of time and resources to define the
market and make a responsive plan for market penetration. Mr. Melville, the AOR has spent
the better part of four years cr afting, guiding and garnering support within consortium

communities and business es for meaningful participation.

3. Location.
Consortium communities are (1) relatively isolated

, fully meeting the intent of ‘ geographic

isolation

, for applicati on purposes; (2) have relatively expensive or non

- existent scheduled

commercial air service; (3) fit the intent and meaning of ‘small community’ for application

purposes ; and

, (4) have spent a good amount of time and effort via the 2009 SCASD grant

and other follow

- on planning to craft a responsive application.

4. Other factors.
As you will read, this narrative demonstrates resolution of unmet consortium community air

service needs, namely scheduled service restoration for EKO to RNO , and access to a
national airport f or ENV. Existing consortium community air service volumes are defined in

this narrative. Contingency and longevity planning are defined in this narrative. This
application’s grant request $950,000 (62 % of total ) combined with cash $ 180 ,000 ( 12 % of

total ) a nd in

- kind dollars $395 ,000 (26 %) could be construed to create value for DOT, and

demonstrate substantial ‘skin

- in

- the

- game’. A letter from our proposed air carrier follows as
Appendix A. Scheduled air service to RNO is primary to the consortium and contin gency and longevity planning has been completed to perpetuate. G rant funds will be d istributed

over all of Northern Nevada and Northwest Utah, functionally the catchment area.

C. Additional guidance

Market analysis and been completed and update d for this application. Analysis
demonstrates that only a specific number of seats on meaningful times on the proposed

route will make the service viable and sustainable. Due to the 20

- page limit the entirety of
the analysis is not herein included, but condensed for application purposes. The

Consortium

, through the AOR and community in

- kind funds

, proposes to retain a marketing

consultant firm to execute the marketing plan; and, perhaps more importantly ‘tweak’ the
plan as market conditions will seemingly inevitably d ictate over the proposed two

- year period. No subsidy is proposed herein for an existing city

- pair. This narrative specifies
relatively large cash and in

- kind contributions for ‘skin

- in

- the

- game’, and the consortium will
expend dollars per the grant assura nces.Wendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

3 INTRODUCTION

The West Wendover, Nevada and Wendover, Utah communities ha ve, for a number of

years

, been prep aring ENV to be a sched ul ed commercial service airport. Joining the
Wendover community in the public

- private partnership is the Elko c ommun ity

. The catchment area includes Tooele County, Utah and Elko County, Nevada , with a total
market catchment area of approximately nearly 37,664 people.

Community leaders believe that restoration of scheduled commercial service to key
hubs will help to con tinue the development of the area business es and avail the

communities to its constituencies . To add new air service an air carrier need s to view

consortium communit ies as being more beneficial an d profitable to their long

- term goals

than other city

- pairs

. Airlines are seeking route profitability, good facilities, community
support, available resources for long

- term improvements, and limited competition. Initial

or short

- term incentives such as reduced fees, free rents, and promotional funds will be

necessa ry to attract new air service.

Scheduled commercial air service at consortium communities will produce new jobs andWendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

4 bring revenue to the community. Revenue from new air service will create visitor

expenditures at hotels, restaurants, ca r rentals, and local shops. Consortium airports
will receive new fees in the form of terminal rents, landing fees, fuel flowage fees, and
passenger facility charges in the long

- term. The new airline will purchase fuel, supplies,
and crew meals. All of these expenditures will translate into new jobs.

The upcoming passenger forecast indicates that there is sufficient demand to support
daily flights to RNO, via EKO

. Utilizing fares comparable to the average fares at SLC,
flights to these airports using the scheme presented herein

, are projected to be
profitable with 1 9

- seat aircraft only. This functionally limited the number and type of
potential suitor carriers.

Note that much of the discussion in this narrative focuses on ENV. This is because the
City of West Wendover was a 200 9 SCASD grant recipient and the analysis performed
pursuant to that funding focused on Wendover nee ds. Synthesis and study conducted
as part of the 2009 grant identified EKO as a viable and mutually

- beneficial partner to

RNO. The addition of RNO is what ma kes the model and the dollars work, effec tively
serving two eligible communities and connect ing them to a reasonably

- hubbed RNO
airport, meeting the spirit/ intent of SCASD authorizing legislation and the 2013 order

.

Due to drastic shifts in the commercial aviation business model, the air traveler in the United States has had to endure a much longer transit time through airports, higher

load factors and generally poorer service on the airlines. A reduction in capacity to many markets has occurred a s capacity is somewhat managed for pricing power . To
remain competitive and profitable, airlines continue to cut costs through reducing
employee wages/benefits, staffing levels and disco ntinuing non

- performing routes.

Several carriers have exited , while consolidatio n has served to maximize pricing power

as i ndustry consolidation was expected for some time

. The number and type of viable, responsive carriers to perform SCASD supported

service has been somewhat lessened in this environment. Upstart and smaller entrant s have surfaced, yet FAA’s new 1500

- hour rule has often diminished the availability of

those carriers.

Consortium Communities
The City of West Wendover, Nevada was awarded a grant on February 18, 2010 from
the USDOT under the SCASD Program. The City reques ted a grant for the purpose of
completing a study with regard to the development and implementation of a regional
scheduled air service program at Wendover Airport.

The Study focused on establishing air service to additional communities in the region,

Elko and Ely, with flights to Salt Lake City, Reno, and Las Vegas. The Study focused on
specific regional needs of the market and took an expansive , wider ranging view of

scheduled service possibilities.

The City of West Wendover, Nevada and the City of Wendo ver, Utah have a relatively
small population of 6,679 residents, but are the home to over 2,500 hotel and motel
rooms. This large room total supports the gaming and recreation industry in the area.Wendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

5 Resorts at Wendover began providing a flight charter progr am from over 60 cities t o Wendover Airport utilizing Xtra Airways in 2005 . Allegiant Air lines took over this service
in February 2011 with MD

- 83 equipment. This program generate s over 58 ,000

passengers per year (2011 ACAIS Report)

. This study addressed the passenger potential for scheduled passenger air service to
Wendover Airport to be operated in addition to the Allegiant Charter service. Passenger

forecasts were based up on surveys of the local residents and local businesses.
Comparisons of economic facto rs and scheduled passengers for other small airports in
the region was used as a yardstick to measure the potential of the ENV market.

The feasibility of scheduled service by various commuter aircraft types was analyzed

and a determination of feasibility and profitability was developed. Various airlines were
listed as potential air carriers for Wendover Airport. The consortium was formed and
continues today, as part of this study process.

Both ENV and EKO have a strong history of casino charter activity w ith the former
Casino Express at EKO

, and Great American Airways, Xtra Airways and Allegiant

Airlines service at ENV dating back to 1993.

EKO and its sponsor, t he City of Elko support leisure, gaming and business activity.

EKO is a certificated, scheduled commercial service facility with SkyWest (OO) service

to SLC with EMB

- 120 equipment . The most important air service concern within the City
of Elko and consortium leadership is the lack of service to RNO. OO served the EKO

RNO city pair from 2002

- 2005, and reinitiating is a high priority for the EKO portion of
the consortium. At the time (2005) approximately 27,000 annual enplanements were
attributed to this city pair, 35 percent of EKO total annual enplanements and all of its
scheduled enplanements. OO not ed that business losses were the reason for
discontinued service on the city pair. Enplanements fell from 75,000± to 35,000± as a

consequence. This figure was halved again two years later. Analysis completed for this
application suggests that a potential r eason for the OO decision was excess capacity
(30 seats) each way. This application proposes to resolve at least this one issue with
less initial capacity (19 seat) until and unless a mature market is once again created.

At one time, the State of Nevada sh epherded approximately $500,000 worth of funds

for air service development, but the funds became unavailable due to several financial

constraints with the 2008 recession an inability to use the funds

. Financial conditions
have improved and are expected to continue to improve, suggesting that funds
availability may become viable within the next two years

.

Consortium Airport s

ENV is sponsored, owned and operated by Tooele County, Utah. The Airport's budget
is approved by the Tooele County, and annual surplus /deficient is made up solely by
the Tooele County. However, West Wendover is the destination for resort/ gaming

visitor s

. ENV is a certificated facility and has completed major improvements to its
runways. The Wendover Airport presently accommodates charter operations, small
cargo, air taxi operations, general aviation, aircraft storage, and aircraft maintenanceWendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

6 and repair. Wendover Airport abuts Interstate 80, giving it easy access to all

communities in the catchment area.

ENV has an 8,000 foot by 150 foot runway with instrument approaches. Also has a
secondary runway 8,000 foot by 100 foot with circling approaches. It can handle all
regional jets and standard twin jet aircraft. The Airport has a new er 10,000 square foot
terminal building with three airline ticketing positions, ramp space for two B

- 737 or three
regional jet aircraft, and large passenger hold room, space for rental car counters, and
a common baggage claim area. More than adequate c ustomer parking is adjacent to

the terminal. ENV provides easy access to all of West Wendover, casinos, hotels,

attractions, and Interstate 80.

These are the necessary aviation infrastructure items to safely accommodate
scheduled air carrier operations

. P assengers will utilize the existing terminal building;

with ch eck

- in counters for airlines, a departure lounge with security and a common
baggage claim area all exist within the building. Discussions with TSA regarding space,
security equipment and personnel have already occurred and await a scheduled carrier.

EKO i s sponsored, owned and operated by the City of Elko, Nevada The Airport's
budget is approved by the City, and annual surplus/deficient is made up solely by it.

L i ke West Wendover , Elko is also a destination for the gaming visitor. E KO is a

certificated fac ility with TSA operations

. EKO presently accommodates scheduled and

unscheduled operations, small cargo, air taxi operations, general aviation, aircraft
storage, and aircraft maintenance and repair. The Elko community also abuts Interstate
80, giving it ea sy access to all communities in the catchment area.

EKO has a 7

, 214 foot by 150 foot runway with instrument approaches. It handle s regional jets and standard twin jet aircraft. EKO has larger, new er terminal building with

four airline ticketing positions, ramp space for two B

- 737 or three regional jet /turboprop
aircraft, and large passenger hold room, space for rental car counters, and a common
baggage claim area. Customer parking is adjacent to the t erminal.

Factors That Have Affected Air Service

Both co nsortium communities are destination s with resort/ casinos, general business

ties, entertainment, golf, nature tours, and outdoor activities. Leisure and recreation
activities include golf, hiking, auto and motorcycle speed racing, ATV activities, fishing,

softball and soccer tournaments.

Consortium economies have expanded and continue to expand in a big way with mining
and natural resources development. Also occurring is development of warehousing and

stora ge and light manufacturing. Consortium communities are functionally a low cost
alternative to Reno, Salt Lake City and other markets in the region.

ENV Market Research Over thirty businesses and organizations were contacted to participate in a telephone
survey to determine travel needs and patterns in We ndover. Fifteen participated and
these are the findings:Wendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

7 1. Over 70% did not have a need for air travel for business, they tended to drive for
business travel, likely to SLC.

2. Most requested destination was Las Vegas followed by Reno, points in California

an d Denver. 75% used Salt Lake City and 25% used Elko.

3. Over 75% of the respondents use air travel for pleasure/holiday trips.
Destinations include Mexico, East Coast, points in California.

4. Over 75% of respondents book their own travel. Airline selection was based on

lowest fare . R espondents liked Southwest’s “Bag Fly Free” program. Business
visitors to Wendover use SLC as the airport of choice and then travel by car.

5. No particular point of origin for visiting air travelers. Field sales representatives

seem to be visiting Wendover as part of a sales trip that includes other cities and

communities.

6. The respondents did not object to flying in commuter aircraft but want flight
reliability, good schedule, and affordable flights.

A online travel survey via Zoomera ng was completed to determine market
characteristics. Respondents were given 24 questions to answer regarding their air
travel needs. 104 local residents responded to the survey. Respondents to the survey
were eligible to win prizes at a drawing. The surve y indicated:

1. Of the past five trips, respondents stated that only 4% of the trips
were for business. Almost all travel by automobile. Few of the respondents
receive vendors or customers visiting by air.

2. Over 80% of the respondents are familiar with Wendo ver Airport and 98% are
interested in airline service at the airport. Over 80% of respondents take 12 or

less trips per year.

3. The most requested destinations are Salt Lake City, Las Vegas, and Reno. Of
these three, Salt Lake City accounted for 38%, Las Veg as accounted for 34% and Reno accounted for 28%. Respondents were willing to pay up to $150 per

trip for air service.

4. More than half of the respondents traveled by air during the past 12 months and
most respondents booked their own travel (92%). Respondent s generally
indicated no issue with traveling via commuter aircraft.

5. The airline most frequently used was Delta/Sky West at 40%, with Southwest
second at 28%. Over 90% of the respondents said they would support new air

service at Wendover Airport with over 90% willing to participate in a pre

purchase ticket program.

Catchment Area and Community Profile s

Consortium communities are convenient for the residents of northwestern Utah,
northeastern Nevada and the gaming visitor. The ENV catchment area encompass es a population of approximately 8,325. Catchment area population growth averaged 5.8% from 2000 to 2008. Household income and per capita income totaled $41,587 andWendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

8 $14,465, respectively. The median age is 23.85 years and the average household size

is 3.52 persons.

ENV Catchment Area Population

West Wendover, NV 4,954

Wendover, UT 1,725

Wells, NV 1,300

Oasis, NV 30

Montello, NV 216
Pilot Valley, NV 100

Sub Total 8,325

EKO Catchment Area Population

Elko, NV 16,708 Spring Creek, NV 10,584

Carlin, NV 2,083

Sub Total 29,339

Catchment Area Grand Total 37,664

Wendover share of the Catchment area hotels rooms number 2,500.

West Wendover Hotels Rooms Wendover Hotels Rooms
Montego Bay 558 Motel 6 130
Nugget 492 Quality Inn 101
Peppermill 302 Bonneville Motel 85

Rainbow 427 Days Inn 80

Red Garter 106 Heritage 52

America’s Best Value 80 Western Ridge 52

Total 1,965 Salt Fl ats Inn 24

Western Motel 20

Total 544Wendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

9 MARKET ANALYSIS

The consortium market area exhibits the characteristics of other gaming destination

markets like Branson, MO

. The catchment area is experiencing positive ec onomic
growth, and citizens and businesses in the area are seeking a more convenient way to
travel by commercial airline than the major airport. There is a bit of a drive from the
market area to SLC and especially RNO and this creates longer driving times, extra hassle and adds to area pollution.

Given a mature air service market along with the primary catchment area
demographics, market potential can effectively accommodate a substantial number of
passengers and markets.

P otential Passengers

The consort ium catchment area includes all of Elko County and the western part of
Tooele County

, Even though the area is large, population is sparse in comparison to
other markets. West Wendover and Wendover have a service based economy with
tourism as the primary ma rket. There are over 2,500 hotel and motel rooms in the area
supporting the casino’s and the recreation market. Expected growth is in in mining and natural resources. West Wendover can be a low cost alternative to Reno, Salt Lake City

and other mountain we st markets for business.

Similarly, the Elko market supports gaming, but also the medical industry and medical
visits, along with, and perhaps more importantly mining and the natural resources
extraction industry. Long

- time business Newmont, Barrick and o ther firms regularly
transit the Elko community.

E nplaned passenger counts at ENV are greater than or approximate to the enplaned

passenger counts at Page, Twin Falls, Elko, Cedar City, and Vernal. This is due to the
strong Allegiant program. Elko Airport had good passenger participation when it had
nonstop service to Reno and has sub

- o ptimal loads to Salt Lake City today.

Two surveys were conducted to determine air travel trends of local residents and local
businesses. Both surveys indicated a low demand for business travel by air, but
respondents would use air service for leisure travel needs. Key destinations were Las
Vegas, Reno, points in California and Denver. Respondents would use Salt Lake City
as a connecting airport.

Since there is no historical scheduled airline passenger data for ENV and there is no
passenger booking data for the region, the passenger forecast is based on economic
allocation, survey of customers, casino/hotel inbound customers, and comparisons to

similar markets.Wendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

10 Historic s cheduled EKO passengers :

were: Year Airline O&D

Passengers Year 2008 2009

1999 SkyWest 19,720 EKO

- SLC 8,400 6,940

2000 SkyWest 17,830 EKO

- All

Other 34,010 28,320

2001 SkyWest 16,110 Totals 42,410 35,260

2002 SkyWest 39,970 %
connecting: 80.2% 80. 3%

2003 SkyWest 11,140 To DEN/LAS 4,160/2,120 3,500/1,900

2004 SkyWest 12,260 To PHX/LAX 1,820/900 1,970/1,170

2005 Scenic 7,740

The forecast is based on economic allocation and comparison to similar markets and
resulted in a passenger forecast for Wendover of between 7,500 to 18,600 annual

passengers:

ENV Forecasts : Based upon Share of Population 7

, 50 0 Based upon Passengers Per Capita 12,000 Based upon Per Capita and Inbound Visitors 18,600
Based upon Passenger per Hotel Room 46,000

Erring on the somewhat conservative side

, 18,600 passengers per year was used.

Potential Air Service
Based upon upcoming data, a decision was reached to solicit Public Charter s and their

J31 equipment for the route. Both Public Charter s and the consortium agree that there
will be a ramp

- up period of passengers and revenue until the carrier reaches a nominal
market share. In this instance, it is assumed that the ramp

- up period will take
approximately six months.

Following is a sample schedule that may w e ll meet local ne eds as well as connecting

needs:

City Pair Depart Arrive Frequency

ENV

- EKO 0630 0603 ex. Sun

EKO

- RNO 0623 0742 ex. Sun

RNO

- EKO 0802 0921 ex. Sun

EKO

- ENV 0941 1114 ex. Sun

ENV

- EKO 1630 1603 ex. Sat

EKO

- RNO 1623 1742 ex. Sat

RNO

- EKO 1802 1921 ex. Sat

EKO

- ENV 1941 2114 ex. SatWendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

11 Proposed Fares and Passenger and Revenue Forecast

Because all of the ENV passengers on this new route are expected to be connecting through EKO , special attention will be required to make sure that the fares are
competitive and that times are coordinated with RNO banks.

P lanning for this proposal suggests t hat the route will have a conservative penetration
rate for the planned daily f lights. Fares from ENV will need to be competit ive with SLC
in order to attract passengers and develop the ENV passenger base. The following

information is generated from the calculation tables on the following page

.

I t is estimated that the consortium will need a revenue guarantee of $ 1,159 ,000± to

co ver operating losses over the 24

- month period

. 400± passengers are planned for the
first month’s worth of activity and 800± are planned in the final month.

As can be seen on the following page, i t is estimated that Public Charters will achieve a

4 0% load f actor in the first month and increase to 70% at the end of the first year . This
assumption is based on experience at other markets in the west which have introduced
new service to an airport that did not previously or recently have air service. Based on

th ese ramp

- up assumptions and small increases in fares through the start

- up period, it
is estimated that the airline will achieve 80% market penetration on the route following

month 21 and reach a near break

- even point.Wendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

12 CALCULATION O F SUBSIDY REQUIRED FOR 24 MONTHS OF OPERATIONWendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

13 ACTION PLAN FOR THE CONSORTIUM

Public

- Private Partnership

The Consortium ’s action plan will be administered through the AOR

. C onsortium

member c hamber s , select businesses, and eco nomic development professionals
constitute the private portion of the Partnership ’s consortium

. K ey leaders from these

groups within the consortium will work with the AOR throughout the proposal term. The

consortium know s that continued economic developmen t depends on scheduled air

service with reasonably connecting flights.

The consortium is committed to completing the following a ction plan. The AOR will
administer this program with Consortium guidance

. The AOR will execute all federal
grant offers and pro cess reimbursement requests.

Project Goals
The goal of the Partnership is to establish sustainable scheduled a ir service with Public

Charters’s J31 aircraft to RNO from ENV via EKO. Sched uled air service will allow

consortium communit ies to better compet e for new business and allow consortium

communities businesses, industry, government organizations and the gaming
community as a whole to significantly reduce the amount of travel time and increase
passenger convenience

.

Action Plan Elements
The goal of the Action Plan is to address issues associated with the proposed air
service that are critical to the long

- term success of that service. In this regard, this Action Plan will address these elements for the City of West Wendover:

1. Finalize r ecruit ment of ne w air service from Public Charters.

2. Employ air service marketing firm to m arket, promote, and support new air

service; follow firm recommendations and implement the plan. This will be done
with community in

- kind funds via the AOR with substantial assistan ce from the

Consortium.

3. Execute the plan, monitor for results, adjust where appropriate.

4. Work to s ecure additional rev enu e to support airline service for contingency

purposes and to ensure longevity.

Marketing Program
The advertising, promotions, public relations program are all part of the marketing

progr am to support new air service. The target market for the proposed service is the

business and the leisure /gaming traveler.

An air service marketing firm with a winning record of successes working with S CASD
grants for air service enhancement will be retained. The budge t for this firm’s activities

is currently planned at $ 120 ,000. New marketing dollars will be spent in the local

Wendover, Elko and other surrounding areas as specified by the marketing firm

. M arketing in these areas will include advertising, promotions, and public relations ; advertising mediums will be combined in a campaign to introduce the new air service.Wendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

14 Other avenues , unknown but suspected at this time, will be followed, as specified in the
marketing plan development by the marketing firm. Substantial assistance and
guidance from the consortium, namely the gaming industry is anticipated.

Target Audience
The target audience for the new air service is the business and leisure traveler. Th e likely most effective way to contact this audience is by targeting its consumer at a critical time. All of these targets could be approached utilizing the same advertising

media . For a market like Wendover

, or Elko , the use of television, radio, newspap er,

and outdoor is seemingly the best media. Even though television is the best media for
reaching the leisure market, the small amount of air service that will be offered makes

television potentially less cost

- effective. Consortium communit ies may find th at a combination of local radio, newspaper, and outdoor billboards is the most cost effective

approach to an advertising program. The overall direction the marketing effort takes will
be predicated upon the selected marketing firm ’ s recommendations.

Market ing and Media Selection

Consortium communities’ constituencies can best be reached by using local
newspaper, outdoor, direct mail, and the internet. Upon review of the local medium for

the each market, the following may be valuable . Run advertisements in t he Salt Lake
Tribune, Deseret News, the Elko Nevada News, along with the Wendover Times and on
various local radio stations along with the network affiliate television stations.

The consortium may elect to coordinate a direct mail program to its constitue ncies and
to other businesses in the surrounding areas. The development of a promotion with
area businesses with promotional material at the airport will also be undertaken should
recommendation find these activities of value. Again, an air service marketi ng firm
specializing in these needs will be retained to provide recommendations.

Total Incentive Package

In order to initiate the air service from Public Charters an incenti ve package has been

established. The total incentive package developed herein inclu des: flight guarantees to

off

- set operating losses, funds for marketing and advertising, and waiver of certain
airport fees.

TOTAL INCENTIVE PACKAGE FOR NEW AIR SERVICE

Category Estimated Cost

Proposed SCASD Grant $95 0,000

Consortiu m Cash Contribution $ 18 0,000

Consortium In

- K ind Contribution $ 395 ,000
Total Package Costs $ 1, 525 ,000Wendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

15 Sponsors Participation
The Small Community Air Service Developme nt grant is proposed to cover $95 0,000 of

the tot al propose d and the remaining $ 575 ,000 in cash and in

- kind shall be used for
either further subsidy or other expenses.

Upon the award of this requested gran t, the consortium is prepared to launch a drive to sell tickets in advance under a “travel bank” program and d evelop a barter program

from local businesses to front

- load and off

- set large upfront subsidy; or, front

- load the
marketing, advertising, and public relations for the new air service if that is a
recommendation of the marketing firm

.

PERFORMANCE MEASUREM ENT

Finalization of Recruitment of Air Service

The AOR and Public Charters representatives have been in communication for the past
three years to discuss , modify and update the proposal. Public Charters executive staff
indicated a willingness to perform a nd consortium representatives will again meet with

Public Charters staff to flesh out details for service initiation . Public Charters has
provided a letter found in the Appendix following this narrative.

Marketing and Media Plan

The AOR will work with the Consortium as a whole and with the marketing firm to
develop a marketing and media plan to define and support the proposal . This plan will
be shared and coordinated through Public Charters at inception and as it evolves.

Air Service Performance

The cons ortium will need Public Charters to provide monthly reports listing the number
of passengers carried in all directions, the number of flights flown, passenger revenue
for the month, other revenue for the month, and the cost of the operation. The

consortium will cover the shortfall of any monthly loss until the grant money has been
exhausted. If the carrier achieves profitability earlier than projected, then the cost offset
funds will be either transferred to supplement marketing and advertising for the air

service or be refunded to the US DOT. If Public Charters continues to need some form
of incentive after the grant funds have been expended, the consortium will continue to provide marketing and advertising for Public Charters and the consortium will conti nue

to offer lower fees.

Finally, The AOR will Work to secure additional revenue to support airline service to for
contingency and to ensure longevity. As previously noted the State of Nevada shepherded approximately $500,000 worth of funds for air servi ce development a number of years ago , but the funds became unavailable due to several financial

constraints with the 2008 recession. The AOR and the consortium will work with the
State legislature to once again garner these funds for air service contingenc y planning.Wendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

16 COMMUNITY SUPPORT

L etters of support from select congressional delegation s and state and local airport
representatives are included in the Appendices. Various civic and business
organizations in the each consortium communities have also sub mitted letters
supporting this proposal and scheduled air service for consortium communities and
these are included in the Appendices.Wendover Consortium

2013 Small Community Air Service Deve lopment Program Application Narrative

17 APPENDIX AJuly23,2013BrookeChapmanAssociateDirectorSmallCommunityProgramViaSCASDApplicationPackageSubject:CityofWestWendover,NevadaSupportforSmallCommunityAirServiceDevelopmentProgramApplication,DocketDOT-OST-2013-0120DearSecretaryFoxx,CityofElkoCityHall1751CollegeAvenueElko,Nevada89801Phone:775-777-7110Fax:775-777-7119IamwritingtosupporttheCityofWestWendover,whichhasfiledanapplicationwiththeDepartmentofTransportationtoparticipateintheSmallCommunityAirServiceDevelopmentGrantProgramforairservicefromWendoverAirport,UtahtoElkoandReno,Nevada.Theproposalhassupportfromlocalgovernmentandbusinessinterestsinbothcommunities.WestWendoverhascompletedanAirServiceStudy,whichshowsexcellentpotentialfortheWestWendovermarket.Separately,theStateofNevadahasstudiedthenorthernNevadamarket,includingElko.BothstudiesshowthepotentialforservingthecommercialandgovernmenttiesthesecommunitieshavewithRenoandCarsonCitybyair.CommercialairservicefromWendoverandElkotoReno,includingpassengerandcargooperations,willsignificantlyimprovethecompetitiveenvironmentforlocalbusinessesinthenationalandglobalmarketplace.Byimprovingaviationservicesalongthisroute,localtravelerswillbebetterabletoaccessanimportantbusinessandgovernmentdestination.TheCityofElkoisverysupportiveoftheinitiativetobringscheduledairservicefromtheWendoverAirporttotheElkoandRenoairports,andwouldappreciateyourconsiderationofWestWendover’sapplicationforassistancethroughtheSmallCommunityAirServiceDevelopmentGrantProgram.Cc:ElkoCityCouncilMarkGibbs,AirportDirector(EKO)FileThankyouforyourtimereviewingthisapplicationCurtisCalderElkoCityManager

# ET 

# AITTA

July 24,2013 

# &nuqace

Subject: City of West Wendover, Nevada

Support for Small Community Air Service Development Program

App I ication, Docket DOT-OST-201 3-01 20

Dear Secretary Foxx,

I am writing to support the City of West Wendover, which has filed an application with the Department

of Transportation to participate in the Small Community Air Service Development Grant Program for

air service from Wendover Airport, Utah to Elko and Reno, Nevada. The proposal has support from

local government and business interests in both communities.

West Wendover has completed an Air Service Study, which shows excellent potential for the West

Wendover market. Separately, the State of Nevada has studied the northern Nevada market, including

Elko. 

### Both studies show 

### the potential 

### for serving 

### the commercial 

### and government 

### ties these

communities have with Reno and Carson City by air. Commercial air service from Wendover and Elko 

### to Reno, including passenger 

### and cargo operations, 

### will significantly improve 

### the competitive

environment 

### for local businesses 

### in the national and global marketplace. 

### By improving aviation

services along this route, local travelers will be better able 

### to access 

### an important business and

government destination.

The Elko Area Chamber of Commerce is very supportive of the initiative to bring scheduled air seruice

from the Wendover Airport to the Elko and Reno airports, and would appreciate your consideration of

West Wendover's application for assistance through the Small Community Air Seruice Development

Grant Program.

Thank you for your time reviewing this application

Sincerely, 

## i.r')f'

'i 

# rt';,y"{k,:rf-

t; i .j 

# lt L -r

Jennifef Sprout

Chief Executive Officer

Elko Area Chamber of CommerceJuly 26, 2013

Brooke Chapman

Associate Director Small Community Program
Via SCASD Application Package

Subject: City of West Wendover, Nevada

Support for Small Community Air Service Development Program Application,

Docket DOT

- OST

- 201 3

- 0 120

Dear Secretary Foxx,

I am writing to support the City of West Wendover, which has filed an application with the Department of
Transportation to participate in the Small Community Air Service Development Grant Program for air service

from Wendover Air port, Utah to Elko and Reno, Nevada

. The proposal has support from local government and

business interests in both communities.

West Wendover ha s completed an Air Service Study, which shows excellent potential for the West Wendover

m arket. Separately, the State of Nevada has studied the northern Nevada market, including Elko. Both studies
show the potential for serving the commercial and government ties these communities have with Reno and
Carson City by air. Commercial air service from Wendover and Elko to Reno, including passenger and cargo
operations, will significantly improve the competitive environment for local businesses in the national and
global marketplace. By improving aviation services along this route , local travelers will be better able to acc ess

an important business and government destination

.

Great Basin College is very supportive of the initiative t o bring scheduled air service from the Wendover
Airport to the Elko and Reno airports , and would appreciate your consideration of West Wendover’s application for assistance through the Small Community Air Service Development Grant Program.

Thank you for your time reviewing this application

.

Sincerely,

Mark A. Curtis

President Great Basin College

### WENDOVER AIRFIELD PO Box 159, Wendover Utah 84083

July 2 4 , 2013

Brooke Chapman

Associate Director
Small Community Program
Via SCASD Application Package

Subject: City of West Wendover, Nevada

Support for Small Community Air Service Development Program
Application, Docket DOT

- OST

- 2013

- 0120

Dear Secretary Foxx,

The City of West Wendover has filed an application with the Department of Transportation to
participate in the Small Community Air Service Development Grant Program for air service from

Wen dover Airport, Utah to Elko and Reno, Nevada. Wendover Airport is very much in support of
this proposal and is further willing to grant some financial concessions to insure that the program is

successful.

I participated in the Air Service Study with Wes t Wendover and it showed very promising potential
for the air service market in the two communities. With a growing business climate and new large
business development such as the Newmont gold mine, Wendover Airport has an excellent
opportunity to service the markets of Elko, Reno and Carson City as the Nevada stu dy on the

Northern Nevada market indicated. With the geographic location of Wendover, air service is
extremely important in supporting the business climate and growth. Providing air service for both
passengers and cargo is critical to our economy in these challenging economic times and it will
serve both government and commercial travelers.

In summary, Wendover Airfield and Tooele County are very supportive of the initiative to bring

scheduled ai r service to our airport from the Elko and Reno, Nevada airports. Your consideration
of the West Wendover application for assistance through the Small Community Air Service
Development Grant Program will be greatly appreciated.

Sincerely,

James S. Pet ersen

Tooele County/

Wendover A viation Director