Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 

### BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.
Proposal under the Small Community Docket OST-2010-0124 Air Service Development Program

SUBMITTED BY THE BRUNSWICK GOLDEN ISLES AIR SERVICE PARTNERSHIP

SPONSORED BY The Glynn County Airport Commission Brunswick, Georgia DUNS Number: 052625662

Congressional Code: GA1
All communications with respect to this document should be sent to:

August 26, 2010 

### Steven V. Brian Executive Director Glynn County Airport Commission 295 Aviation Parkway Suite 205 Brunswick, GA 31525-6804 (912) 265-2070 - Telephone (912) 264-0228 - Facsimileii Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 

## 2010 Grant Description

The Brunswick Golden Isles Air Service Partnershi p is proposing to implement a new program to "Retain Air Service at the Brunswick Golden Isle s Airport (BQK),” with specific initiatives to support a new fare strategy by Delta Air Lines. The Pa rtnership is applying for a grant in the amount of $360,000 and has identifie d $235,000 in local funding and in-kind services from members of the Partnership to augment the grant funds. The initiativ es proposed are designed to support three specific actions taken by the incumbent carrier (Delta) that will provide competitive air fares to the Atlanta Hub, to beyond markets, and to support government travel from BQK. The support will take the shape of marketing programs that will have th e objective of improving ridership on the existing frequency by 15%, or to reach an average load f actor of 75% per month. This objective must be met or the community will be faced with the departure of Delta Air Lines service, which has been in this market for 37 years. The promotion of Delta’s ne w fare strategy is essential to the success of regaining passenger traffic, curren tly being lost to competing serv ices at other airports (JAX and SAV). The Brunswick area is highl y dependent on the tourism industry and has suffered due to economic conditions. Once economic conditions improve , normal market forces that have sustained service over the years will improve ridership without market intervention. The initiatives will include: market analyses, development of ma rketing plans, marketing to spec ific audiences to include inbound and outbound traffic to Atlanta (a strong market for BQK), changi ng the perception of the Federal Law Enforcement Training Center st udents and staff of high fares to BQK, and changing the general community’s perception of high fares. Delta Air Lines has made a commitment to maintain a consistent fare structure that competes with surr ounding airports to allow passengers to see the value of traveling out of the Bruns wick Golden Isles Airport.iii Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 

## Table of Contents
Page 1. Brunswick and the Golden Isles 1 2. Air Service Trends and Issues at BQK 3 3. Previous Small Community Air Se rvice Improvement Grant Efforts 12 4. Brunswick Golden Isles Air Se rvice Retention Initiative 15 5. The Brunswick Golden Isles Air Service Partnership 18 6. Requested Funding for the Initiative 20 7. Concluding Statement 211. Bru n The Gly n McKinn o Golden I identifie r
Brunswi c growing home to commun growing quality o location o Training thousan d personn e
The Bru n McIntos h 2000 lev e Area. B Q the broa d
The Bru n key air t r

- T S l o

- S a r n swick and t

n n County A o n St. Simo n sles Airport r of BQK.

c k and the G community a vibrant se a i ty, renown e residential b f life that pr o f the Fede r Center (FL E d s of U.S. a n e l.

n swick Met r h counties, h e l. More th a Q K serves a n d er Coastal G

n swick area r avel genera t
T he Federal L

ecurity, the o cated imm e ea Island C o r eas in the G t he Golden A irport Com m n s Island Ai r

is the com m

G olden Isles (

on the Geo r a port, a stro n e d tourist att r b ase, and an omotes gro w r al Law Enf o E TC), whic h d internatio n

r opolitan St a h ad an estim a a n 77,000 o f n estimated G eorgia regi
generates m t ors that are
L aw Enforc e p rimary so u e diately adja o mpany, a d e G olden Isles. Isles

m ission ope r r port and th e m ercial servi c

( Figure 1) i s r gia Coast t h n g business r actions, a exceptional w th. It is al s o rcement h trains tens n al security

a tistical Are a a ted popula t f these resid e air service c on.

m uch more ai r

located in t h

e ment Train i u rce of traini n

cent to the B e veloper an d Sea Island 1

S m r ates two ai r e Brunswick c e airport s e

s a h at is

s o the
of

a (MSA), co m t ion in 2009 e nts are in t h c atchment ar

r travel tha n h e immediat e
i ng Center ( F n g for more B runswick G d operator o f

was the ve n Br u

Brunswick G

m all Communit y r ports in the

Golden Isl e e rving the re g

m prised of G of 103,841, h e immediat e r ea of appro x

n its modest s

e area (Figu
F LETC) of t than 88 fed e G olden Isles A

f worl d -clas s n ue for the G

Figure 1: u nswick A r

G olden Isles Ai r

U.S. Departm y

Air Service D e Coastal Ge o e s Airport. T g ion, with a n

G lynn, Bran t

an 11.6% i n e Brunswic k x imately 22 0

s ize would s u re 2). Amo n

t he Depart m e ral agencie Airport; s residential G 8 Summit i n

Brunswick r ea

r Service Part n ent of Transp o e velopment P r August 2 6 o rgia area: T he Brunsw i n airport

t ley and n crease ove r k

Metropolit 0 ,000 reside n

s uggest, due n g these are :

m ent of Hom e

s. FLETC i s
and touris m n June 2004 ;

n ership o rtation r ogram 6 , 2010 i ck

r the

an n ts in

to :

e land s

m

;2 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 - Saint Simons Island, a premier tourism destin ation and year round re sidential area known for its beaches, golf, sports to urnaments and other attractions;

- Jekyll Island, operated by a state authority as a coastal park and convention resort destination for the southeast US. The Island ha s a rich heritage and restored historic cottages of the early 1900 century aristocrats who used the Island as a retreat. The Island now attracts visitors for y ear round conventions and spor ting events on the pristine beaches and the many golf course, tennis f acilities, soccer complex and biking paths located on the Island.

- The Port of Brunswick, operated by the Georgi a Ports Authority, a major point of entry for maritime cargo. International Auto Processing operates one of the largest imported vehicle receiving port facilities in the U.S. The capacity of the Port of Brunswick is now substantially enhanced with the completion of a recently completed high-clearance bridge over the main shipping channel;

- The development of a regional medical center at the Southeast Georgia Health System campuses in all three counties making up th e MSA with over 350 hospital beds serving this area.

- Natural resource industries base d in the Brunswick area, in cluding fisheries, pulp and paper processors, and related industries.

- The demographic profile for the Brunswick and Golden Isles area exhibits strong growth, high disposable income, excellent tourism infrastructure, and a solid business base.Air Ser v Air servi

1. Air
Air s Co n turb freq u 198 9 agai airc r pas s fact o (air l atte n v ice trends a

ce at BQK i

Service Tr e

s ervice at B Q n nection, wit h

o prop aircr a u ency was r 9 to 37,803 i n to 37,990 r aft with re g s enger grow t o rs that hav e ine bankrup n tion to the f B Fe a

a nd Issues a s currently l

e nds and Is s Q K is curre n h non-stop s a ft on this ro u

e duced to f o i n 1996. Pa s in 2001. Af t ional jet eq u t h from 200 2 e caused the t cy, econo m f

actors that a F B runswick a a ture Ke y A

a t BQK

imited to o n

s ues at BQ K

n tly limited t s ervice to an u te, with as m o ur and total s senger leve t er the even t u ipment and 2 to 2005. S i market to d e m y and fuel c

a re longe r -t e
3

S m F i g ure 2: a nd the Gol A ir Travel G

n e carrier

K

t o one carri e d from Atla n m any as six passenger l e ls rebounde d t s of 9/11, D e

the Brunsw i i nce 2005, t h e cline, whic h risis). The c e rm problem

Brunswick G
m all Communit y

den Isles G enerators

e r, Atlantic S n ta. Prior t o daily flight s e vels at BQ K d to 50,524 b elta Air Lin e ick market r h ere have b e h are not a d c ommunity n m s and have t Federal L a (FLETC) FLETC is (area in bl u
Sea Isla n hosted the June, 200 4 Saint Sim o expandin g
Fisheries p resources i economic b a
Port of Br u Auto Proce s imported ve h

G olden Isles Ai r

U.S. Departm y

Air Service D e S outheast A i o 2002, AS A s . Over tim e K

declined f b y 1999, bu t e s replaced t r esponded w e en a numbe r d irect sympt o n ow needs t o t he potential a w Enforcem e

is a ma j or next to the u e).

n d, a world -

G8 Summit o 4 . ons Island a n g tourism loca t

p ulp/paper a n

industries p a se.

u nswick, incl s sin g , a ma j h icles and oth e

r Service Part n ent of Transp o e velopment P r August 2 6 i rlines-the D A operated o n

e , daily f rom 81,529 t then decli n t urbo-prop w ith signific a

r of fundam e o m of the ti m o turn its to reverse t h e nt Trainin g travel g en Brunswick A

- class resort o f World Lea d

n d Jek y ll Isl a t ions.

n d other n a p rovide a s

udin g Inter n or entr y po i e r maritime c a

n ership o rtation r ogram 6 , 2010 D elta

n ly
in n ed

a nt e ntal m es
h e Center erator. A irport

area, d ers in

a nd are

a tural s table

n ational i nt for a r g o4 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 passenger decline. (See Figure 3 for a recent hist ory of total passengers using the Brunswick Golden Isles Airport.)
The decline in traffic has been the result of several factors:

- The proximity of Jacksonville Internati onal Airport (JAX), one hour and 15 minute’s drive south of Brunswick on I-95, with its diversified services and the presence of Southwest Airlines and AirTran. Air fares offered by the incumbent carrier have not remained competitive with air fares offered by carriers at JAX, resulting in significant loss of passengers to JAX;

- The proximity of Savannah International Air port (SAV), within one and half hour drive north of Brunswick on I-95, also with an excellent variety of services;

- Higher fares generally at BQK than at JAX or SAV;

- Lack of government fares by the incumbent carrier;

- Reliability problems with the ASA service for substantial periods of time, and resulting reduced connectivity in Atlanta. The first two causes of traffic decline (the proxi mity of JAX and the proximity of SAV) cannot, in themselves, be remedied. However, the othe r three (fares, equipment and service reliability) can be remedied, and thus can mitigate the effect of the first two causes. Service reliability has been a problem for Bruns wick for many years. As the EM2 Brasilia turboprop aircraft became less reliable prior to 2002 and congestion at ATL became worse, service reliability became a major reason for travelers to choose to fly from neighboring airports. Since the introduction of regiona l jet service after 2002, substan tial progress has been made by ASA, the Delta Connection to improve reliability of the BQK – ATL service. However, inconsistent delivery of service (r eliability and on-time performance) has been an issue for years,and caus e with sub s

The Ma r In 2001, service t o introduc e CRJ-50 r The equi immedia t the mid a The intr o b oarded a e d travelers s tantially m o

r ket Respo n
intensive e ff o Atlanta. A e , effective F r egional jet a p ment upgr a t ely well re c a nd uppe r -9 5 o duction of t a t BQK. to have less o re service.
B

n se to Servi c
ff

orts were m A series of d i F ebruary 10 , a ircraft. a de resulted c eived in th e 5 % range, s u t he regional j confi d ence
F B runswick G

c e Improve m

m ade by the P

i scussions w

, 2002, thre e in improve d e marketplac u bstantially b j ets in the fi r

5

S m in BQK ser v
F i g ure 3: G olden Isle s

m ents fro m
P artnership t w ith Delta A i e daily roun d
d service rel i e . Flight co m b etter than d r st quarter o

Brunswick G
m all Communit y

v ices than f o

s Airport

m 2002-2005

t o improve t h i r Lines cul m d -trip non-st o
i ability and r m pletion of t d uring the p e

f 2002 resu l

G olden Isles Ai r

U.S. Departm y

Air Service D e o r services a t

he quality o f m inated in it s o p operatio n

r educed trip t he ATL-B Q e riods of tur b l ted in an in c

r Service Part n ent of Transp o e velopment P r August 2 6 t other airp o

f the ASA s decision t o n s to Atlanta

time and w a Q K service r a b oprop serv i c rease in tra f

n ership o rtation r ogram 6 , 2010 o rts

o with

a s a n in i ces. f fic6 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 - Passenger traffic for the month of April 2002 was 32% higher than in April 2001 (the pre-September 11, 2001 peak);

- The introduction by Delta of a fourth freque ncy to ATL resulted in a 41% increase in passenger traffic in 2003 over the 2002 level;

- Total passenger traffic in 2003 reached 77,499, a 38% increase from 2002;

- February of 2004 passenger traffic was 37% ah ead of the same month the prior year, and March of 2004 was up 29% even though capacity remained at four daily 50-seat round trips. The availability of more reliab le regional jet service enabled passenger levels at BQK to rebound strongly in 2004 to nearly all-time high levels. The responsiveness of th e Brunswick and Golden Isles market to service improvement at BQK was clearly demonstrated.
The Current Situation: Service Cutbacks , Higher Fares and Fewer Enplanements The Brunswick and Golden Isles community once ag ain faces the deteriorat ion of its air service at BQK. As the financial difficulties of Delta Air Lines become more severe, BQK experienced a reduction of seat capacity and rising fares on the ASA service from 2006 through 2008. When Delta filed for Chapter 11 reorganization, it pursu ed broader efforts to restructure its systemwide operations, resulting in a cu t-back of daily frequency at BQK to three round trip flights (2006), and further increases in B QK fares. Seats availabl e at affordable fares have been reduced at BQK; forcing the Brunswick and Golden Isle s community to, once again, increase their usage of alternate airports. The increase in fares resulting from Delta’s actions under Chapter 11 and subsequent fuel escalation crisis caused histor ically high fares at BQK in 2005 through 2008. Average spot fares at BQK for all destinations e xperienced a 28% increas e in 2005, compared to 2004. These fare differentials between BQK, JAX a nd SAV continue to be a major factor upon which air travelers7 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 base their choices. Average round trip spot fa res at JAX for the month of July 2010 were 31.5% lower than average fares at BQK (Figure 4). Figure 4: BQK Fares Compared to Competition at JAX (Top 15 Markets)

Fare Basis BQK DL (Round Trip) JAX DL (Round Trip) Southwest (Round Trip) All Other JAX Carriers (Round Trip) Diff. from BQK to Lowest Fare 21 Day Advance Purchase $280 $221 $220 $212 $68

7 Day Advance Purchase $374 $299 $293 $263 $111

3 Day Advance Purchase $605 $510 $436 $385 $220 Average $419 $343 $316 $287 $132 The Brunswick market has always been very sensitive to the fare differentials between BQK and JAX or SAV. Even a small fare differential (m ore than $40 round trip or 10%) has been shown to severely aggravate traffic leakage from BQK. Evidence of this resurgence of traffic leakage is clear in the reductions in passenger boarding’s at BQK reported to the U.S. DOT (See figure 3). Figure 4 reflects an in-house survey by the Ai rport Commission using delta.com, southwest.com and expedia.com search engines for July 2010 ro und trip fares to the top 15 BQK markets. The current fare and capacity situation at BQK is inadequate to meet the community’s needs. The Brunswick and Golden Isles community has resolved that, with present economic conditions, an aggressive campaign to improve th e incumbent airline boarding’s is essential to maintain the incumbent service.
The True Size of the Br unswick Air Travel Market
The Brunswick Golden Isles market has dem onstrated that it responds very positively to improvements in air service. Unfortunately, the cu rrent levels of service are not reversing traffic8 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 leakage and the current fare structure is not stimul ating the local market for air travel. In fact, current service levels are only meeting a small fr action of the air service needs of the Brunswick market. The decline in passenger boarding’ s at BQK has been, and remains, the result of local market traffic “leaking” to alternative airports where jet service at lower fares to more airline networks is offered. Notwithstanding, the convenience of Br unswick Golden Isles Airport in the center of the Brunswick and Golden Isles market, inferior availability and higher fares at BQK simply cannot compete with the options av ailable to travellers at JAX. In 2002, the Glynn County Airport Commission undertook an analysis to quantify the leakage from the Brunswick Golden Isles market to the co mpeting airports and to determine the true size of the Brunswick Golden Isles market. A trav el survey conducted by the Commission at that time, and analysed by PA Consulting Group, fo und that over 80% of the business travel generated to or from the Brunswick area enplaned or deplaned at JAX. In addition, over 70% of the leisure travel generated to or from the Bruns wick area enplaned or deplaned at JAX. The leakage to SAV was significantly lower than to J AX. Subsequent informal surveys and inquiries conducted by the Airport Commission continue to validate this esti mation of the size of traffic leakage from BQK to JAX and SAV. Travel information recently received from the Federal Law Enforcement Training Center (See figures 5 and 6) indicates a significant percenta ge of its student population and staff travel is conducted to and from competing airports. In 2009, FLETC reported that 9,961 of its Brunswick-based personnel and students from ot her agencies who were sent to Brunswick for training used JAX for their government-funded air tr avel in the year. To put this number in perspective, the FLETC leakage was equal to mo re than one third of the total O&D traffic reported to DOT for BQK at that time.Comp a

C o Bruns w 1 3 

### FLET C a rison of Ar e

Com m Jacks o 7 o mparison o f F

F w ick, G A ,097 3 3% 

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Com m Via B r
1 m ercial Air

Via o nville, FL 7 ,992 34% 

## FLE T f Transport a J

9

S m F i g ure 5:

F igure 6: Jac k

Savan 2 7 

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Georgia 0 09 ‐ June 2 0

m ercial Air

r unswick,

GA 1 ,139 5% 

## T C Stud e a tion Modes Geor g J uly 2009 ‐ J u

Brunswick G
m all Communit y k sonville, F L 1,969 60%

n nah, G A 2 18 7 % 

### a l Air Tr a v el to and F r
0 10

Personal Vehicle

14,018 61% 

## e nt Tra v for Travel t o g ia u ne 2010

G olden Isles Ai r U.S. Departm y

Air Service D e L 

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vel r om Brunsw i

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o and From B

r Service Part n ent of Transp o e velopment P r August 2 6 i ck,

B runswick,

n ership o rtation r ogram 6 , 201010 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 Similarly, recent survey responses from the resort operators on Sea Island, St. Simons Island and Jekyll Island indicate that appr oximately 10,000 visitors to their f acilities enplane and deplane at JAX. This number equates to over 20% of th e O&D traffic reported to DOT for BQK at that time. The various surveys, analyses and estimati ons performed by the Airport Commission, FLETC and tourism interests in Brunswick and the Golden Isles clearly indi cate that the true O&D travel market for the Brunswick Golden Isles area is at least double and more lik ely triple, that which was reported to DOT. The strong growth in passenger enplanements at BQK during 2003 and the early months of 2004, concurrent with the regional jet service and the marketing efforts of the Brunswick Golden Isles Partnership, have validated the 2002 assessment. Federal Law Enforcement Training Center (FLETC) A major driving force of BQK’s air travel market growth is the growi ng needs of the Federal Law Enforcement Training Center (FLETC), an ag ency of the U.S. Department of Homeland Security. Based upon summary information pr ovided by FLETC to the Glynn County Airport Commission, its training activity is expanding dramatically. (See figure 7) Compared to the 16,635 trainees for 2000 that were included in th e 2002 leakage assessment, FLETC is projected to host 26,189 trainees for FY2011, a 57% increase.Historic a above, i n air used J in figure s FLETC’ s b y the la c During C enforce m originati o

-

-

-

- ‐ 5,000 10,000 15,000 20,000 25,000 30,000

F

a lly, the vas t n 2000, FLE T J AX. In 20 1 s 5 and 6. s training lo a c k of adequ a
C Y2009, 1,1 3 m ent agencie

o n areas for
Texa s Calif o Wash Flori d 16,297 16,635

F Y1999 FY2000 majority o f T C estimate 1 0, 82% of F

a d is growi n a te seat cap a
3 9 FLETC t r s and organ i FLETC trai n

s o rni a i ngton, DC da 19,435 22,1 5

FY2001 FY20 0 FLE T F

f air travel t o

d that over 8 F LETC trav e

n g, and the u s a city during p

r ainees use d i zations thr o n ees in CY 2
11.2% 10.5% 8.9% 5.3% 5 8 24,798

22

0 2 FY2003 FY 2 T C
‐ Glynco: N u

11

S m F i g ure 7:

o FLETC ha s 8 0% of the a e l was out o f

s e of BQK b p eak times o
d BQK for a i o ughout the U 2 009 were:

,290 19,016

2 004 FY2005 F u mber of Stu d

Brunswick G
m all Communit y s arrived via a pproximate l f JAX accor d
b y FLETC t r o f the day a n
i r travel. Tr a U .S., as wel l

21,657 24,900

F Y2006 FY2007 d ents Traine d

G olden Isles Ai r

U.S. Departm y

Air Service D e a Jacksonvill l y 8,000 trai n d ing to the s

r ainees is be n d week.

a inees are g e l as oversea s 20,237 23, 4

FY2008 FY20 d

*FY2010 and

r Service Part n ent of Transp o e velopment P r August 2 6 e. As note d n ees arrivin g s tatistics pro v ing constrai n

e nerated by s . The large s 4 12 22,516 2 6

09 FY2010* F Y 2011 are estimat e

n ership o rtation r ogram 6 , 2010 d

g by v ided

n ed

law st 6 ,189

Y 2011* e d12 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 - Georgia 5.2% - Arizona 4.9% - Maryland 4.9% - New York 4.8% - Virginia 3.8% It is notable that a majority of FLETC staff (who are based in Brunswick) traveling by air to or from Brunswick use JAX rather than BQK (See figure 5). FLETC staff members are aware of the convenience of using the airport located adja cent to the training facility but use JAX more often because of government fare issues (lack ther eof) as well as reliability and frequency issues. BQK JAX SAV - FLETC staff travel by air 33% 60% 7% The single most important factor that is impeding the use of BQ K by FLETC staff and student is the lack of competitive government fares. With the assistance of a previous grant under this program, the Partnership was able to conduct re search and determine ways to improve the situation. The incumbent airline is now ready to institute changes in government fares, but has indicated that it is e ssential that FLETC and the community provide marketing support to this effort to ensure that the new fare initiatives are widely known and understood.
2. Previous Small Community Air S ervice Improvement Grant Efforts The Brunswick Partnership previously received a grant under the program , with a completely different set of economic circumstances, in 2006. At that time, the community was growing a rapid rate, and real estate in coastal Georgia was selling at an unprecedented rate. The market was under-served, and being held back by unreasona bly high fares and poor service. Service reliability has markedly improved with the introduction of the regional jets, but fares have remained relatively high through the last decade. W ith the assistance of the prior DOT grant, an air service consultant was retained to provide advice, expertise and resources to continue to work13 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 on fare issues and met the objectives of the previo us grant program. The key project goals of the previous grant were to:

- To increase passenger use of BQ K by travellers based in th e region and by visitors to Brunswick and the Golden Isles; - To expand the level of regiona l jet service to Atlanta; and
- To secure the introduction of service to a second non-stop destination by a new entrant carrier in 2007. The federal grant enabled the Partnership to ag gressively pursue the following primary areas of activity under the Initiative. General Marketing The objective of this initiative was to design general marketing efforts that would inform travellers about air services av ailable at BQK and promote the use of BQK. Information efforts were focused on the advantages in time, cost a nd convenience of using BQK when compared to driving to Jacksonville or Savannah. These effo rts were multi-faceted, in volving initiatives in the Brunswick region and in the travel trade press. The grant significantly assisted the efforts of the Pa rtnership to inform the market of the services and conveniences offered at BQK. Research wa s conducted in the FLETC market to determine the needs of these travellers and an awaren ess campaign was executed using grant funds. Development of comprehensive marketing materials to promote the use of Brunswick Golden Isles Airport was also accomplished. Under the grant, the Partnership was able to hire a marketing consultant to plan and impl ement the overall marketing program.14 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 Market Research and Analysis Market research and analysis wa s completed by the air service cons ultant, which was essential in making a business case to carriers for additional service. The research and analysis included passenger leakage analysis, air service deficiency analyses, and business case development regarding the ability of the mark et to support additional service. Presentations were provided to US Airways a nd SkyWest under the grant using the information gathered under this initiative. As a result of the presentation and information provided, US Airways indicated that Brunswick was on its expansion list, with the understanding that economic conditions and equipment/facility constraint s will need to be overcome before any new service would be initiated. Unfo rtunately, these conditions have prevented US Airway from initiating service to BQK. The presentation to SkyWest was conducted to provide background on a new market for them, and to inform them of the potential of the mark et for independent flying to another hub or major destination. Many other carriers were approached with the as sistance of the consultant/grant resources, including American Airlines, United Airlines, Vi sion Air, Northwest Airlines and several other independent carriers. Marketing to Air Service Providers This Initiative included marketing efforts directed at specific air service providers, driven by the various analyses noted above. Those effo rts included preparation of comprehensive presentations to airlines designed to present th e market opportunity, make the business case, and address operational issues related to the proposed services. Thos e presentations were made as provided above to carriers who e xpressed interest. Again, this ha s not been an opportune time to attract new airline service due to th e state of the industry and economy.15 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 Incentive Program An incentive program was established to help at tract new and expanded se rvice. Through risk and cost mitigation, the initiative was designed to assist air service providers in their brand penetration of the market, their service start-up n eeds, and other activities to ensure the viability of the service. These efforts involved airpor t facility and service arrangements, discounted airport rates and charges, mark eting and advertising support, pr e-launch promotional events, and co-op marketing activity. This initiative was presented to US Airways to start new service to the Charlotte Hub and to Delta to expand service to the Atlanta Hub. Unfo rtunately, both carriers were not prepared to either start service or expand th e market due to the economic condi tions at the time. The efforts funded by the grant, however, opened new dialogue s with these carriers, and created continuous communication throughout the grant period.
3. Brunswick Golden Isles Air S ervice Retention Initiative The Brunswick community has dedicated substantial effort to improving air service at BQK. It is now focused on retaining the incumbent carri er in this market. The economic downturn has significantly harmed the Brunswick market with tourism and business travellers reducing their overall flying by commercial airline and seeking th e most cost effective way to their destination. The incumbent carrier, whose serv ice decisions are determined by Delta Air Lines, has recently communicated to the Brunswick community its de sire to improve ridership, and has requested the help of the “Partnership” to execute a plan for revitalizing the market. Delta has made it clear that, if the plan to improve ridership does not accomplish an increase in ridership 6 to 10 passengers per flight, air service to Brunswick will be terminated within a 6 to 12 month window. The “Partnership” that was formed and energized by the previous DOT grant is now committed to a new set of goals and initiatives designed to retain the valued service being provided by the incumbent carriers. The community r ealizes that the region is at an all-time low in terms of economic activity, due the linge ring economic recession. The Brunswick Golden Isles community was especially hard hit with the real estate collaps e, as it is a destination market for people with second homes, and tourism is the number one industry. Many of the high- end16 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 resorts were also hit by the backlash of re duction in corporate flying for meetings and conventions. These economic conditions have create d a perfect storm in a small community that has had commercial air service for 70 years and continuous service from Delta Air Lines or its affiliate for 37 years. On August 4, 2010, Delta met with community lead ers and indicated its requirements for the retention of its service at BQK. A plan was developed by the co mmunity, and agreed to by Delta whereby certain changes in the fare structure at Brunswick would be instituted by September of 2010. Once these changes were in place, the plan calls for an aggressive effort by the community to communicate the new fare programs to the tr avelling public. The primary objective is to change passenger perception in a timely manner, and thereby increase ridership on services at BQK. The community has agreed to provide a marketin g effort that will suppor t the initiatives each party believes will increase ridership to and from Brunswick. Both the community and Delta believe there are sufficient passengers in the Br unswick catchment area to support air service. The objective is to encourage these passengers to us e the local airport with the right fare strategy to support Delta’s need to generate a profit. Delta has agreed to the following initiatives:

• Introduce discount fares in the local Atlanta market. Delta will determine a fare strategy that will compete with surroundi ng airports and serve to reduce passenger motivation to drive the five hours to Atlant a. (BQK has very strong traffic to ATL for business and tourism reasons.)

• Implement government fares usable for FLETC travel- Delta will install competitive government fares that can be accessed by students and staff at FLETC.

• Refine fare benchmarking rel ated to Jacksonville fares- Delta will review the pricing environment and refine the fare premium that will be charged at BQK17 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 compared to fares at JAX. A reduction in the fare premium is needed as passengers have become more price-sensi tive in the current recession. The Community has agreed to these initiatives:

• Implement a new marketing effort to increase traffic to/from Atlanta- The community has important ties to ATL, a nd the drive distance (5 hours) tends to encourage use of air service if the air fare is competitiv e with the car travel option. The Partnership will provide a specific marketing effort to both inbound and outbound passengers to highlight fare impr ovements and educate passengers on the true cost of travel using air versus car.

• Implement FLETC marketing program- The Partnership will implement a new FLETC marketing program designed to sp ecifically highli ght the range of government fares in the BQK market that co mpete with those offered at JAX. Very detailed travel information is available re garding FLETC travel, as a result of the work funded by the previous grant. This understanding of the FLETC situation can now be used to implement an effective marketing program, and to measure progress. The new program will illustrate how governme nt employees travel to/from BQK can save money for the Federal Government.

• Establish program to regain business and tourism usage of the service- The Partnership will develop a marketing plan specifically to publ icize the new fare strategy that will maintain competitive fares verses JAX. This program will be targeted to business and tourism markets that have traditionally used other airports than BQK. Again, the previous grant was in strumental in enabli ng the Partnership to collect detailed travel information that can be used to measure progress in this area.

• Secure an extension of the Partners hip’s Small Community Air Service Improvement Grant or a new Grant- The community agreed to utilize any tools available to it that would help market th e above initiatives, in cluding the DOT grant18 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 process. The effectiveness of the Partnership is closely tied to its success in securing grant funds through this application. Delta ha s already sent a letter of support to DOT regarding the Partnership’s re cent request for an extens ion of the previous grant. The community, through the Partnership, will need to support the Delta initiatives with a robust and timely marketing plan that focuses on the change s in fare strategy which have been agreed to by Delta. The marketing program will be measured by the key indicator of load factor on the three flights provided per day by Delta. The objective is to raise the load f actor to an average of 75% per month using the fare strategies listed above.
4. The Brunswick Golden Isles Air Service Partnership
The Brunswick Golden Isles Air Service Partnershi p was formed in the previous grant and will continue specifically formed to support air service initiatives and component activities. The Partnership is comprise d of the following entities:

♦ Glynn County Airport Commission (Sponsor) ♦ Brunswick and Glynn County Development Authority ♦ Brunswick Golden Isles Visitors and Convention Bureau ♦ Brunswick Golden Isles Chamber of Commerce The sponsoring public member of the Partnershi p is the Glynn County Airport Commission. The Commission will execute the appropriate assurance documents with DOT and will incur and submit expenses of the Partnership, with a ppropriate supporting documentation, to DOT for reimbursement under the grant agreement. The Airport Commission will serve as the executive of the Partnership and will perform all administrative, financial and implementation ta sks of the Partnership. Decisions about the priorities and direction of the Initiative will be made by a Partnership Steering Group. Funds provided by the Partnership members will be po oled and expended by the Partnership for the19 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 implementation of the initiative activities. However, in the case of in-kin d services, the provider of the in-kind services will implement those services on behalf of the Partnership. Cash funding for the initiative is committed by the Partnership as follows:

♦ Glynn County Airport Commission $60,000 cash ♦ Brunswick Golden Isles Visitors and Convention Bureau $10,000 cash ♦ Brunswick and Glynn County Development Authority $10,000 cash ♦ Brunswick Golden Isles Chamber of Commerce $ 5,000 cash In addition, the Brunswick Golden Isles Visito rs and Convention Bureau are committing in-kind services with an estimated value of $150,000 for the Initiative. These servic es will be primarily in the form of advertis ing tie-ins with Bureau campaigns, lite rature and events. This cooperative effort is a major expansion and elaboration of curr ent efforts, and will be cr itical to the effective marketing of services available at BQK in key markets outside the Brunswick area (particularly the Atlanta market). The Glynn County Airport Commissi on will continue the relationship formed in the last grant with a marketing consultant to assist with the implementation of the initiative and will perform other duties as well. The cost of this servic e is not part of the in-kind contribution, but demonstrates the commitment of the Glynn County Airport Commission to the initiative, and the air service development needs of the community.
The committed funds and in-kind value from Part nership members for the two-year Initiative are comprised of the following types of support: Cash from non-airport revenues $ 25,000 Cash from airport revenues $ 60,000 In-kind contributions from the community $150,000 TOTAL Partnership Participation Value $ 235,00020 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 5. Requested Funding for the Initiative The Partnership is requesting a grant of $360,000 from DOT to a ssist with the funding of the initiatives. The following budget, including both local and federal funds, has been developed. The initiatives are intended to encompass a two- year period. However, the spending rate may be accomplished in less time to improve ridership as soon as possible. Items 1 through 4 of the budget will be expende d on a programmatic basis over the two-year period. The total budget levels shown indicate the maximum levels programmed over two years for each line item. The preliminary budget fo r the two-year ini tiatives (October 2010 – September 2012) is shown below. Actual pr ogramming of funds will be determined by the Partnership, in conformance with the leve l of funding provided by the grant and the commitments reflected in the DOT grant agreement. Total Value Partnership Share Federal Share

1. Marketing to the ATL market $300,000 $ 150,000 $ 150,000 2. Marketing to the business/ tourism community 175,000 25,000 150,000 3. Marketing to FLETC 20,000 10,000 10,000 4. Marketing support and analysis 100,000 50,000 50,000 TOTAL $595,000 $235,000 $360,000

The $150,000 in in-kind services from the Brunswi ck Golden Isles Visitors and Convention Bureau will be applied to Line Item 1-Marketing to the ATL market.21 Brunswick Golden Isles Air Service Partnership U.S. Department of Transportation Small Community Air Service Development Program August 26, 2010 In summary, the initiativ e budget is comprised of: Partnership Cash Commitments $ 85,000 Partnership In-kind Commitments $150,000 Federal grant funds $360,000 TOTAL THREE-YEAR BUDGET $595,000 The time frame to executing the initiatives and expend the f unds within the budget are as follows:
• September-October 2010: Marketing analysis and plan formation
• November 2010-April 2011: Execute marketing plan for Atlanta market
• November 2010-April 2011: Execute marketing plan for business and tourism community beyond Atlanta hub
• October 2010-March 2011: Develop new marketing effort aimed at attracting students and staff to use government fares and improve e fficiency in their business travel.
• May 2011-December 2011: Execute second market ing campaign for both Atlanta market and beyond to follow up on first campaign.
6. Concluding Statement
The Brunswick and Golden Isles Air Service Partne rship has worked hard to maintain and try to build the air service market at BQK. Howeve r, the current economic conditions in the local community have caused a complete rethinking of the marketing efforts needed to maintain air service to Brunswick. Delta Air Lines has made it clear that progress must be made in the next several months to retain their company’s servic es. The Brunswick market must have new fare initiatives to regain traffic that is leaking mostly to JAX. Delta has agreed to install a new fare strategy and has asked the commun ity to support this new strategy with a major marketing effort that will educate and change th e perception of potentia l passengers in a timely manner. The Partnership, formed to improve air service at BQK, is prepared to execute a marketing plan that has measurable goals to retain th e current service level at Brunsw ick. The success of this effort requires the support of Delta Air Li nes, which we have secured. Th e success of this effort alsorequires t is expec t strength a this requ e Respect fu

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