Proposal Under the Small Community Air 

Service Development Program, Docket DOTOST-2012-0069 

Consortium:

Puerto Rico Tourism Company (PRTC) 

Rhode Island Airport Corporation (RIAC) 

DUNS: 883727786 

EIN: 050471772 

Congressional District Codes:

Island of Culebra = PR-98 

Island of Block Island = RI-02 
SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT-OST-2012-0069

SUMMARY INFORMATION

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

SF424 on www.grants.gov.

A. APPLICANT INFORMATION: (CHECK ALL THAT APPLY)

Not a Consortium Interstate Consortium Intrastate Consortium

Community now receives EAS subsidy

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

 

If previous recipient: Date of grant: Expiration date of grant:

Federal Funds Requested: 

Carrier(s) Service Obtained: 

Destination(s) Served: 

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

PUBLIC PRIVATE

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.

C. 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)
D. EXISTING LANDING AIDS AT LOCAL AIRPORT:

Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

E. PROJECT COST: DO NOT ENTER TEXT IN SHADED AREA

LINE DESCRIPTION SUB TOTAL TOTAL AMOUNT

1 Federal amount requested

2 State cash financial contribution

Local cash financial contribution

3a Airport cash funds

3b Non-airport cash funds

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

4 TOTAL CASH FUNDING (1+2+3)

In-Kind contribution

5a Airport In-Kind contribution**

5b Other In-Kind contribution**

5 TOTAL IN-KIND CONTRIBUTION 

(5a + 5b)

6 TOTAL PROJECT COST (4+5)

F. 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) for each.
F. 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.

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

EXPLANATION)

No Yes (explain) 

______________________________________________________________________________

______________________________________________________________________________


TABLE OF CONTENTS

1. Executive Summary 

2. Existing/Historical Air Service 

3. Air Service Needs 

4. Strategic Plan 

5. Public/Private Partnership 

6. Funding 

7. Ensuring funds are allocated properly & monitoring progress of 

project 

8. Long-term sustainability 
1. Executive Summary 

1.1 Block Island 

Block Island, located 12 miles off the southern coast of Rhode Island, offers the 

vacationer what does not seem possible anymore - simple relaxation in a startling 

beautiful place. The Island is famous for its miles of free public beaches, sparkling clear 

waters, dramatic bluffs, preserved open spaces, and fun-filled activities for visitors of all 

ages. Block Island has long been a haven for residents and visitors who have found 

here a quality of life that recalls the pleasures of a life that is simpler, slower, and 

somehow, more carefree. It's no wonder that the Nature Conservancy has designated 

Block Island "One of the 12 last great places in the Western Hemisphere." 

The Island is home to the town of New Shoreham and has approximately 1,000 yearround residents but swells to as high as 15,000 – 20,000 seasonal visitors per day 

during the peak summer season. With over 600 hotel rooms and 1,200 rental units, the 

island has become a hidden gem for those that have discovered its beauty. To access 

global travel via air, residents and visitors on the island must travel by ferry to 

Narragansett, RI, which is a 30 – 55 minute voyage and then a 45 minute taxicab ride 

just to get to T.F. Green Airport in Warwick, RI. Although being only 38 miles away, it 

currently takes over 90 minutes to simply get to an airport with commercial service that 

is connected to the world (PVD). The ferry service is prone to cancellation in certain 

wind and surf conditions and is often sold out without prior reservations in the peak 

season. The cab ride is also subject to severe delays during the southern Rhode Island 

summer beach commute leading to a high percentage of uncertainty in keeping a travel 

itinerary intact. The one-way trip will also cost close to $100.00 after the ferry ticket and 

cab fare. 

The peak visitor season starts at Memorial Day weekend and visitor patterns tend to be 

focused on getting to the island on Friday and departing Sunday evening or Monday 

morning. This pattern also holds true during the latter part of the peak season which is 

typically Labor Day weekend through Columbus Day weekend. The high point of the 

peak season runs during the months of July and August. Visitation comes from several 

geographic areas. The largest percentage is from the greater Rhode Island area, which 

is anchored by its largest city, Providence and its suburbs. The greater New York City 

area stretching east along the shoreline to New Haven is the next largest producer of 
Block Island visitation. The greater Boston area would be next, followed by the greater 

Philadelphia and surrounding Pennsylvania areas. 

In addition to the tremendous benefits that new air service would bring to travelers 

seeking to use T. F. Green Airport (PVD) for onward flights, residents and visitors would 

have new and convenient access to ground transportation options. Commuter rail 

service now connects PVD with downtown Providence and Boston with stops in 

between into various communities. High frequency public bus service runs to and from 

Providence as well. Direct air service between Block Island and PVD would open a 

plethora of mobility options for Block Island residents to access government services, 

business and employment opportunities as well as retail and social needs not currently 

available along the southern shore of RI. Block Island would be better linked to the 

state capitol in Providence, which is also the economic center of the region. The 

enhanced accessibility to PVD with the new air service would also provide better access 

to Block Island for workers, contractors, and visitors to the island. 

1.2 Culebra Island 

The island of Culebra lies 17 miles east of mainland Puerto Rico and nine miles north of 

Vieques. Besides the tiny town of Dewey and a small airport, Culebra is mostly a 

smattering of private homes, green hills and beaches. The island is home to a few 

thousand year-round residents, a seasonal destination for nesting turtles, and a low-key 

Eden for tourists who seek something different. 

Culebra is Puerto Rico’s resplendent “diamond in the rough.” A miniscule seven miles 

long by four miles wide, Culebra is the way the Caribbean used to be: undeveloped 

except for a few roads, small hotels and local eateries, and beautiful beaches! Visitors 

won’t find resort hotels here, or name-brand restaurant chains. On this island, people 

come to get away from city crowds, urban bustle and the world they know. 

It also boasts Flamenco Beach, recognized by many as one of the World’s most 

beautiful beaches. A picture-perfect horseshoe of white sand framed by green rolling 

hills, Flamenco Beach is one of the most beautiful places in all of Puerto Rico. This is a 

large beach that comfortably accommodates the sun seekers who come for its tranquil, 

multi-hued water and wide beachfront. Walk along the western shore and you’ll come to 

an unusual monument: a brightly painted rustic tank, one of two in the area. 
Culebra offers visitors a wide range of activities from sighting turtles, to diving and 

snorkeling. Leatherback and Hawksbill turtles are a common sight in Culebra during 

nesting season. Culebrenses take special care to protect their friends, who come in 

droves from March to July and August to October. Visitors can inquire about turtlewatching efforts and be part of this magnificent experience. Culebra’s reefs and keys 

make for excellent diving and snorkeling. Just off Carlos Rosario Beach is a healthy 

coral reef teeming with fish, and the keys of Cayo Norte, Luis Peña and Culebrita offer 

numerous dive and snorkel spots. Visitors can take a water taxi to Culebrita, the tiny 

islet close to Culebra, for a chance to explore its lovely beaches. There is only one 

manmade structure on Culebrita, a small lighthouse that is no longer operational. 

This new air service would bring tremendous benefits to travelers and residents seeking 

to use Luis Munoz Marin International Airport (SJU) for onward flights to the island of 

Culebra. Direct air service between Culebra and SJU would open a plethora of mobility 

options for Culebra Island residents to access government services, business and 

employment opportunities as well as retail and social needs not currently available in 

the island of Culebra. The enhanced accessibility to SJU with the new air service would 

also provide better access to Culebra for workers, contractors, and visitors to the island. 

Through a shared-risk approach, the consortium has structured a plan to market and 

promote the new service, provide a reduced-airport cost environment for the aircraft 

operator, and maximize the use of airline assets in a manner that accounts for 

complimentary seasonal fluctuations in two separate but similar markets which should in 

turn reduce the dependency on the revenue guarantee being sought and to provide the 

highest likelihood of long-term sustainability. 

2. Existing/Historical Air Service 

2.1 Block Island 

Block Island is currently served by New England Airlines with nonstop service to 

Westerly, RI, and has done so since 1970. Air service options at Block Island are very 

limited primarily due to the length of its runway, which is 2500 feet long. The runway 

length poses a barrier of entry to commercial service for carriers that do not operate 

specifically designed aircraft for that length of runway. New England Airlines is not 

interested in expanding their scheduled operations to include PVD, thus the need to 

partner with Cape Air. Cape Air’s willingness to procure new aircraft to serve the Block 
Island and Culebra markets offers an extremely unique and rare opportunity to greatly 

improve access to these communities. 

New England Airlines’ only route operates daily, year-round between Westerly, RI and 

Block Island. The route is 17 miles and takes about 15 minutes. The number of flights 

fluctuates by day of week as well as seasonally. New England Airlines’ service provides 

an important link for year-round island residents to provide access to the mainland of RI 

as well visitors from southern Rhode Island and along the Connecticut shoreline. Their 

service also facilitates the ability to access goods and services that might not be readily 

available on the island or when needed in a time critical manner. Westerly service does 

not provide a convenient means to access the global aviation grid because it is a “deadend” route. New Cape Air service is viewed as providing a key compliment to the 

existing service to Westerly. Annual enplanements at Block Island are listed below: 

Block Island CY 2006 CY 2007 CY 2008 CY 2009 CY 2010 

Enplanements 7,595 9,383 10,384 8,516 9,821 

* Data source: www.FAA.gov Passenger Boarding (Enplanement) and All-Cargo Data

2.2 Culebra 

Culebra Island is currently served by Air Flamenco and Vieques Air Link with nonstop 

service to Isla Grande’s regional airport and Ceiba’s regional airport. Air service options 

at Culebra Island are very limited primarily due to the length of its runway, which is 

2,600 feet long. The runway length poses a barrier of entry to commercial service for 

carriers that do not operate specifically designed aircraft for that length of runway. For 

this reason, Culebra currently does not have any air service that is connected to the 

national air transportation system or any service provided by airlines with codeshare or 

interline agreements. 

The other alternative to reaching Culebra from the mainland is through a ferry service 

from Fajardo, a municipality in the eastern coast of Puerto Rico. This service, 

specifically during the high season is not very reliable because the demand is much 

larger that the supply and many times visitors or residents cannot get tickets. Therefore, 

an expansion of air services is essential in order to maintain proper access to Culebra 

for the wellbeing of visitors and residents alike. 
New service from Luis Munoz Marin International Airport is viewed as a compliment to 

current services to Culebra from regional airports. Annual roundtrip passengers 

(reported metric) at Culebra Island are listed below: 

Culebra CY 2006 CY 2007 CY 2008 CY 2009 CY 2010 

Total 

Passengers 

N/A 34,751 75,964 69,579 70,595 

* Data source: Puerto Rico Ports Authority 
3. Air Service Needs 

3.1 Block Island 

The need for a direct air link between Block Island and PVD is evident. The island, by 

nature, is geographically constrained making surface transportation time-consuming, 

unpredictable, and cumbersome. The need for multiple modes of transport just to 

access PVD and its carrier mix, commuter rail service, and other regional transportation 

options is far less than ideal. Existing air service, while filling an important role by 

providing a local link, falls short in truly connecting Block Island to the rest of the world. 

Nonstop service to PVD would bring seamless connections for a broad base of users, 

both business and leisure. Island residents, workers and service providers from the 

greater Providence area, greater Boston area visitors, and interline air passengers 

would all benefit from this new service. 

The economic benefits for Block Island would also be enhanced. The new connectivity 

would allow Block Island to introduce and promote itself to a much broader audience. 

Tourism plays a key role for the island’s economy and improving the ease of access 

would clearly be a benefit. The Inn and Hotel industry, as well as retail, food and 

beverage, and other tourism-related enterprises would also benefit from their ability to 

expand their customer base. 

PVD service would improve access and connectivity to all of the primary geographic 

areas that Block Island’s visitors come from. Local regional passengers can take 

advantage of the easy access to T. F. Green Airport. PVD is centrally located in RI off 

of Interstate 95. It is also only a few miles away from I-295, I-195, which provides 

access to southeastern Massachusetts, and RT-146, which provides access to central 

Massachusetts. The commuter rail service at T. F. Green Airport offers service to 

Providence, Boston, and several places in between. PVD also currently has nonstop 

airline service to the New York/Newark area and Philadelphia. Collectively, those are 

the places that make up the vast majority of visitor traffic to and from Block Island. 
Current nonstop air service map from T. F. Green Airport – PVD (Spring/Summer 2012) 

3.2 Culebra 

The need for a direct air link between Culebra Island and SJU is evident. Culebra 

currently has less than 2,000 residents according to the 2010 US Census and has 260 

hotel rooms. Demand for air services is high for both residents and visitors. 

Culebra does not currently have direct service to the Luis Munoz Marin International 

Airport, where visitors can directly connect to onward flights. The new connectivity 

would allow Culebra Island to introduce and promote itself to a much broader audience. 

Tourism plays a key role for the island’s economy and improving the ease of access 

would clearly be a benefit. The Inn and Hotel industry, as well as retail, food and 

beverage, and other tourism-related enterprises would also benefit from their ability to 

expand their customer base. 

Culebra residents that wish to travel outside of Puerto Rico currently have to fly to a 

regional airport and then use transportation to the Luis Munoz Marin International 

Airport, or use the ferry to Fajardo and drive to SJU. Residents in Culebra need access 

to the mainland for medical, shopping, professional reasons. A direct service to the Luis 
Munoz Marin International Airport would provide another alternative for residents to 

reach the mainland for their everyday necessities. 

Connecting air service map from Culebra via Luis Munoz Marin International Airport – SJU 

(Spring/Summer 2012) 

4. Strategic Plan 

The goal of this project is to provide scheduled air service between Block Island, RI 

(BID) and Providence, RI (PVD) as well as between Culebra, PR (CPX) and San Juan, 

PR (SJU) with complimentary service in a similar pattern as shown below. 

The funding from the Small Community Air Service Development Program and the 

commitment of Cape Air Airlines (See attached letter of commitment) will allow this 

project to commence in the summer of 2013. 
Hyannis Air Service Inc. d/b/a Cape Air is an airline that specializes in markets like BIDPVD and CPX-SJU and is interested in providing service in these markets. Cape Air is 

one of the largest independent airlines operating in North America and has built a very 

successful business by providing schedule airline service in island communities such as 

Block Island and Culebra. Cape Air currently operates a fleet of nine seat Cessna 402’s 

and a smaller fleet of ATR-42 aircraft. Cape Air currently operates in several 

geographic locations including New England, Florida, Micronesia, upstate New York, 

and the Caribbean. 

Cape Air was founded in 1989 by Dan Wolf and has grown steadily since. Cape Air 

serves markets that it has a clear understanding of and is known for offering 

consistently reliable and friendly service. The airline thrives in providing vital air 

transportation in markets that other airlines have no interest in. Cape Air plans to 

continue to focus on this strategy and is currently undergoing the process to procure a 

new aircraft type that will allow it to enter similar markets that it cannot operationally do 

now with the Cessna 402. This will undoubtedly strengthen the airline’s core business 

model and bring much needed scheduled air service to Block Island and Culebra that 

links those islands with larger airports that offer onward connections. Cape Air is a 

code share partner with United Airlines and JetBlue Airways. Cape Air flights are listed 

in national global distribution systems, which allows travel agents to book passengers 

on the scheduled flights, and they also participate in interline agreements with all of the 

other major airlines. These interline agreements allow connecting passengers’ baggage 

to be transferred from their Cape Air flight from Block Island or Culebra to most other 

airlines when they connect though Providence or San Juan, respectively. 

With the assurance of grant funding, Cape Air, with the assistance of the consortium, 

will be able to enter these new markets with a shared-risk and start-up cost reduction 

approach. The process and costs involved in introducing a new fleet type is consuming 

and expensive but this project will help mitigate the initial phases (first two years) of 

starting new service in these new markets with a new aircraft. The consortium feels 

strongly that by using the new Cape Air aircraft during two-separate but complimentary 

seasons, the total amount of grant money needed is reduced and the initial service 

revenues maximized. Focusing on the two markets’ peak seasons will also maximize 

the use of promotional funds and related efforts to make the service sustainable sooner, 

therefore further reducing the necessary funding needed later in the project. 

Proposed number of daily roundtrip flights in each market, by month: 
MONTH BLOCK ISLAND-PVD CULEBRA-SJU 

January 4 

February 4 

March 4 

April 4 

May 3* 4* 

June 4 

July 5 

August 5 

September 4 

October 3* 4* 

November 4 

December 4 

* Aircraft will transition from market pairs mid-month 

The Rhode Island Airport Corporation and the Puerto Rico Tourism Company have both 

identified the importance of introducing this new service in their respective markets and 

are committed to partnering with Cape Air to make it successful and self-sustaining. In 

order to ease the risk and cost of starting this new service and to properly promote the 

service to help make it self-sustaining, the following strategic initiatives will take place: 

Below is the summary of the various elements of our funding proposal:

Item: Infrastructure Improvements for Non-Sterile operations

Sponsoring Organization: Rhode Island Airport Corporation

Estimated Value: $96,871.00 

Description: 

In the effort to create a streamlined and seamless experience for connecting 

passengers and their luggage arriving at PVD from Block Island, the Rhode 

Island Airport Corporation has included a $96,871.00 infrastructure plan to 

facilitate “non-sterile” arrivals in the airport terminal environment. This 

infrastructure represents an additional investment but allows for an unrivaled 

customer experience. The new gate allows Cape Air to feasibly operate under 

their existing TSA approved Limited Security Program. The location of this new 

gate is also in the same vicinity of Cape Air’s existing gate and its scheduled 

service from PVD to Martha’s Vineyard and Nantucket. 
Item: Marketing Support 

Sponsoring Organization: Rhode Island Airport Corporation

Estimated Value: $45,000.00 

Description: 

The consortium recognizes the great importance of creating awareness of the 

proposed new service. These efforts will increase demand and revenue, which 

in turn lowers the overall amount of revenue guarantee funds required to operate 

the service during the first two years of operations. As part of a broad marketing 

program, $25,000.00 in (airport cash) dollars will be specifically used to market 

and promote the new BID-PVD service. The consortium acknowledges that 

airport revenues cannot be used for revenue guarantees per 49 U.S.C. §§ 

47107, 47133 and therefore would like to clearly point out that these specific 

funds will be used solely for the purpose of marketing and promoting the new 

service and not the revenue guarantee portion of the project. In addition to these 

funds, several in-kind efforts valued at $10,000.00 will take place to heighten 

public awareness. These initiatives will take place in both years of the project: 

- Media release 

- Travel Agent outreach 

- E-newsletter (RIAC has over 15,000 subscribers) 

- Airport website announcement and service information with live web link to 

Cape Air 

- Social media announcement 

- Airport advertising (shuttle buses and in-terminal) 

- Co-op promotions 

- Inaugural event

Item: Landing fee & terminal rental/lease fee waivers 

Sponsoring Organization: Rhode Island Airport Corporation

Estimated Value: $83,354.00 

Description: 

The consortium also recognizes the great importance of reducing the cost and 

risk associated with starting air service in new markets. The Rhode Island 

Airport Corporation oversees operations at both Block Island and T.F. Green 

Airports and is pledging to waive all landing fees at BID (estimated annual 
value of $6,130.00), the terminal rental fee (estimated annual value of 

$12,000.00), and all landing fees at PVD for BID service (estimated annual value 

of $23,547.00) during the two-year project period. The net annual value of 

these fee waivers is $41,677.00 which yields a two-year project value of 

$83,354.00.

Item: Marketing Support 

Sponsoring Organization: Hyannis Air Services, d.b.a Cape Air

Estimated Value: $50,000.00 

Description: 

The consortium recognizes the great importance of creating awareness of the 

proposed new service. These efforts will increase demand and revenue, which 

in turn lowers the overall amount of revenue guarantee funds required to operate 

the service during the first two years of operations. Cape Air’s business is small 

community air service, and we have a successful history marketing air service to 

niche destinations. If Cape Air is able to provide service at Block Island and 

Culebra through a Small Community Air Service Development Grant, Cape Air 

commits to at least $50,000 in cash marketing annually for the new services. 

Item: Marketing Support 

Sponsoring Organization: Puerto Rico Tourism Company – Government of 

Puerto Rico

Estimated Value: $40,320.00 

Description: 

The consortium recognizes the great importance of creating awareness of the 

proposed new service. These efforts will increase demand and revenue, 

which in turn lowers the overall amount of revenue guarantee funds required to 

operate the service during the first two years of operations. As part of a 

broad marketing program, $40,320.00 in non-airport (cash) dollars will be used to 

market and promote the new CPX-SJU service. The consortium acknowledges 

that airport revenues cannot be used for revenue guarantees per 49 U.S.C. §§ 

47107, 47133 and therefore would like to clearly point out that these specific 

funds will be used solely for the purpose of marketing and promoting the new 

service and not the revenue guarantee portion of the project. Other in-kind 

marketing initiatives will include: 
-Use of the Puerto Rico Tourism Company sales force to communicate to 

 travel agents and consumers alike the new service 

 -Organize Fam Trips with travel agents using the new service 

 -Social media announcement and promotion of the new service 

 -Public relations efforts 

 -Media releases 

 -Inaugural event 

 -Puerto Rico Tourism Company website announcement and service 

 information 

Item: Landing fee & terminal rental/lease fee reimbursements 

Sponsoring Organization: Puerto Rico Tourism Company – Government of 

Puerto Rico

Estimated Value: $45,000.00 

Description: 

The consortium also recognizes the great importance of reducing the cost and 

risk associated with starting air service in new markets. The Puerto Rico 

Tourism Company will reimburse Cape Air up to $25,000.00 for associated 

airport start-up costs at Culebra and/or San Juan airports. Landing fee 

waivers of up to $20,000 will also be reimbursed to Cape Air for operating this 

new service. 

Item: Landing fee & terminal rental/lease fee reimbursements 

Sponsoring Organization: Puerto Rico Tourism Company – Government of 

Puerto Rico

Estimated Value: $45,000.00 

Description: 

The consortium also recognizes the great importance of reducing the cost and 

risk associated with starting air service in new markets. The Puerto Rico 

Tourism Company will reimburse Cape Air up to $25,000.00 for associated 

airport start-up costs at the Culebra airport. Landing fee waivers of up to 

$20,000 will also be reimbursed to Cape Air for operating this new service. 
Item: In-kind hotel rooms 

Sponsoring Organization: Hotels of Culebra

Estimated Value: $6,000.00 

Description: 

The hotels of the community of Culebra could provide in kind support to the 

service by providing hotel room nights. These room nights shall be used to 

bring travel agents to the island of Culebra via the new service as well as for any 

media that is brought to the island for publicity purposes. The estimated 

value of these room nights is $6,000.00.

5. PUBLIC-PRIVATE PARTNERSHIP 

The introduction and long-term viability of scheduled air service that links both Block 

Island and Culebra to the global aviation network is among the top initiatives by travel 

and tourism and key stakeholders in these communities. To that end, an innovative and 

unique partnership has been fostered between airport, tourism, community leaders, and 

an airline to make this project possible. 

Below is an outline of key stakeholders that have been identified as having a potential 

role and/or supporting this project: 

Governor of Rhode Island 

Elected Officials 

RI Economic Development Corporation 

Hotel and Motel 

Tourism 

Chamber of Commerce 

Travel Agents 

Airport Board 

Airport Management 

Cape Air 

Northstar Aviation (PVD FBO) 

Puerto Rico Hotel and Tourism Association 

Puerto Rico Ports Authority 

Department of Economic Development and Commerce of Puerto Rico 

Puerto Rico Tourism Company 
Asociacion Puertoriquena de Agentes de Viaje 

American Society of Travel Agents 

Municipality of Culebra 

The consortium plans to continue to work with stakeholders and will forward letters of 

support to the USDOT as they are received. 

6. FUNDING 

The communities of Block Island and Culebra are enthusiastic that an airline is 

committed to starting this service if the grant is provided from the U.S. Government. 

Cape Air has completed its own analysis about the future viability of the route including 

a route forecast. The total funding request from the US DOT to support this two year 

project is $900,000.00 ($600,000.00 in year 1 and $300,000.00 in year 2). This will be 

supplemented by $366,544 of local funding from the public/private partnership in place. 

The chart below identifies the breakdown of funding based on components of the 

project. 

Component

Revenue 

Guarantee

Marketing and 

Other Incentives

% of 

Total Local Funding % of Total

71.06% Cash (non-airport) 24.64%

28.94% In-kind (community) 1.64%

100.00% Cash (airport) 6.82%

In-kind (airport) 66.90%

Total 100.00%

Source Amount

DOT SCASD Grant $900,000 

Puerto Rico and Rhode Island Parties $366,544 

Total $1,266,544 

Program Funding

DOT Grant

Local Funding

Total
7. ENSURING FUNDS ARE ALLOCATED PROPERLY 

& MONITORING PROGRESS OF PROJECT 

The funding elements of this project are meant to be specific yet simple and 

straightforward at the same time. The sponsor of the grant will require a monthly 

income statement from Cape Air for the two new routes being served. If needed, 

reimbursement will be made every 6 months based on the financial performance of the 

routes. Marketing efforts will be closely coordinated with Cape Air to ensure maximum 

benefit and timely outreach to the market. 

8. LONG-TERM SUSTAINABILITY 

It is the absolute goal of the consortium to have these new market pairs be selfsustainable by the end of the two year funding timeframe of the project. We are highly 

confident that this will be the case based on the structure of this project and the strong 

partnership with the public and private entities involved. 

In the effort to not rest on the confidence we have on the sustainability of this project, 

the consortium has identified ways to continue to make these markets work. The 

consortium intends to work closely with Cape Air on the flexibility to optimize the flight 

schedule to offer both customer convenience as well as revenue opportunities. This 

can be done in many ways including day of week adjustments as well as weekend and 

monthly shifts to provide the air service during the true peak periods. This may seem 

trivial, but it is vital to match supply and demand so the operating carrier can continue to 

provide the service. 

The consortium plans to continue marketing and promotion of the service throughout 

the project and will work with other major carriers to ensure they are educated on the 

connecting opportunities from their networks to these island communities. This is a key 

reason that codesharing, interline baggage agreements, and convenient “non-sterile” 

passenger services are an important part of this project. These aspects will allow 

people from literally all over the globe to see that access is available and getting there is 

seamless. Island residents will also find the service invaluable as they will now have 

direct means to the global aviation network. Since both individual market pairs are 

intra-state, they are of high economic and social importance on that level as well. This 

new service will have a vested importance to the communities they serve by the people 
who live there as well as those passengers fueling the tourism and visitation aspects of 

these islands. 

9. PREVIOUS AIR SERVICE DEVELOPMENT EFFORTS 

Although identified as a need to link Block Island and Culebra to Providence and San 

Juan respectively some time ago, these two markets share similar but specific barriers 

to entry. The runway lengths at both island airports severely shrinks the available pool 

of scheduled airline operators that can physically serve these destinations. It is only 

now that Cape Air’s decision to procure a suitable aircraft opens the possibility to 

pursue the service. The number of carriers able to serve these markets that have 

interline agreements, existing codeshares, and the level of brand awareness is also 

extremely limited. The complimentary nature of Block Island and Culebra from a 

tourism perspective and Cape Air’s new ability to physically be able to serve the airports 

on these islands and the fact they are already operate in very close proximity 

geographically makes this project extraordinarily unique and special. 

10. LEGAL SPONSOR 

The legal sponsor responsible for administering the program is: 

The Rhode Island Airport Corporation 

Kevin A. Dillon, A.A.E. 

President & CEO 

2000 Post Road 

Warwick, RI 02886 

Phone: 401-691-2000 

Email: kdillon@pvdairport.com 

 








Andrew W. Bonney

Vice President of Planning

660 Barnstable Rd., Hyannis, MA 02601

Direct: 508 862-9719 Fax: 508 862-9791

Email: andrew.bonney@capeair.com

June 11, 2012

To Whom It May Concern,

Cape Air hereby supports the proposal of a consortium consisting of Block Island and 

Culebra advocates for a Small Community Air Service Development Grant for new air 

service that will connect both of these outstanding destinations with the national air 

transportation system. 

Cape Air now serves 40 airports with niche airline service, providing connections to the 

national air transportation system through our global distribution system participation, 

interline agreements, codeshares and reliable service. Both Block Island and Culebra 

appear highly suited to Cape Air’s type of service, but heretofore we have not had a 

suitable type of aircraft to serve their short runways. However, Cape Air is now poised to 

acquire short-field capable aircraft, which would allow service to Block Island and 

Culebra.

Therefore, we ardently support the consortium’s proposal for support of new connectable

service to Block Island and Culebra.

Sincerely,

Andrew W. Bonney