August 27, 2010 

An Integrated Program of Air Service Development via: 

An Enhanced Marketing and Advertising Campaign 

 In Support of Current Essential Air Service to/from Washington Dulles 

Sponsor: Shenandoah Valley Regional Airport 

 Weyer’s Cave, Virginia 

 Greg Campbell, Airport Director 

 Congressional Code: VA-006 

 Dun & Bradstreet Number: 040154247 

SHENANDOAH VALLEY REGIONAL AIRPORT, VIRGINIA

Proposal Under the Small Community Air Service Development Program 

 

Docket: DOT-OST-2010-0124

Before the Office of the Secretary of Transportation 

US Department of Transportation
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 2

TABLE OF CONTENTS

Section Page 

Introductory Letters of Support 3 

Summary Information 7 

Introduction 10 

Primary Objectives of Proposal 11 

Executive Summary 12 

Detailed Explanation of Proposal 17 

Letters of Support 20 

Current Air Service 31 

Air Service Deficiencies 36 

Extenuating Factors Affecting Air Service 41 

Availability of Alternate Airports 43 

Use of Local/Federal Funds 44 

Public/Private Partnerships 45 

Implementation Timeline 46 

Air Service Advisory Groups 47 

Local Air Service Development Efforts 48 

In-kind Services from the Community 49 

Performance Measures 50 

Legal Sponsor 51 

Financial Controls 52 

Return on Investment 53 

DOT Exit Strategy 54 

Airport Information 55 

Community Profile 56 

Conclusions 67 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 3

INTRODUCTORY LETTERS OF SUPPORT 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 4
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 5

 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 6
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 7

SUMMARY INFORMATION 

Small Community Air Service Development Program 

Docket DOT-OST-2010-0124 

A. Applicant Information 

 Not a Consortium Community now receives EAS subsidy 

 Interstate Consortium Intrastate Consortium 

 Community previously received a Small Community Grant 

 If previous recipient, date of Grant: __________2003__________________ 

 expiration date of Grant: __October 28, 2006_____ 

B. Public/Private Partnership

Public: 

1. Shenandoah Valley Regional Airport 

2. Shenandoah Valley Regional Airport Commission 

Private: 

 

1. Shenandoah Valley Partnership 

2. Harrisonburg-Rockingham Chamber of Commerce 

3. Greater Augusta Chamber of Commerce 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 8

C. Project Proposal 

 Marketing Upgrade Aircraft New Route 

 Personnel Increased Frequency Low Fare Service 

 Travel Bank Service Restoration Subsidy 

 Surface Transportation Regional Service Other (Specify) 

 Revenue Guarantee Launch New Carrier 

 Start Up Cost Offset First Competitive Service 

 Study Secure Additional Carrier 

D. Existing Landing Aids at Airport

 Full ILS Outer/Middle Marker Published Instrument Approach 

 Localizer Other:

E. Project Cost 

1. Federal amount requested: $ 150,000 

2. State cash financial contribution: $ 0

3. Local cash financial contribution: $ 20,000

 3a. Airport cash funds: $ 20,000

 3b. Non-Airport cash funds: $ 0 

 3c. Total local cash funds: $ 20,000

4. TOTAL CASH FUNDING: $ 170,000

5. Local funds contributed from already existing

Programs of projects included in line 3c: $ 0

6. Local funds contributed from new commitments 

Or new resources included in line 3c: $ 20,000

7. Airport In-Kind contribution: $ Various

Description: Additional In-Kind Marketing

8. Other In-Kind contribution: $ Various

Description: Advertising and marketing match money

9. TOTAL IN-KIND CONTRIBUTION: $ Undetermined

10. TOTAL PROJECT COST: $ 170,000
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 9

F. Enplanements at Airport

 2000: 19,100 

2001: 17,525

 2002: 6,115

 2003: 7,085

 2004: 6,900

 2005: 4,285

 2006: 3,220

 2007: 3,310

 2008: 6,690 

2009: 7,890 

G. Is Application Subject to Review by State Under Executive Order 12372 Process?

 This application was made available to the State on ______. 

 Program is subject to review, but has not been selected by the State. 

 Program is not covered. 

H. Is Applicant Delinquent on any Federal Debt? 

 No 

 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 10

INTRODUCTION 

Just ten years ago the Shenandoah Valley Regional Airport was busy with eight departures a 

day from two airlines to two regional hubs. Much has changed since the year 2000, when the 

Airport generated 52.3 passengers per day each way (PDEW). By 2006, with EAS service 

provided only by US Airways Express to and from Dulles, passengers fell to just 8.8 per day each 

way (PDEW). 

The Airport has worked hard to reverse this trend. First, it was able to convince its air service 

provider, Colgan Air, and its codeshare carrier, United Airlines, to place the UA code on local 

flights to Dulles. Then, it spent more than $100,000 of its own money in publicizing this change in 

service. In the three years since then the Airport has 

seen passengers grow to 21.6 per day each way 

(PDEW) – an increase of 146% since the lows from the 

middle part of the decade. 

The Airport has partnerships with more major media 

outlets in the Valley, and it is able to leverage those 

partnerships for extensive ad space and air time. The 

challenge is that the Airport’s budget is small, so it is 

unable to sufficiently blanket the area in such a way 

as to better discourage passenger “leakage.” Due to the real, or in some cases perceived, 

inconvenience of using the Shenandoah Valley Regional Airport, many travelers from the 

immediate Shenandoah Valley catchment area don’t even check fares and schedules on local 

service before booking out of other airports in the region. 

The Airport believes the best way to reduce the Department of Transportation’s current Essential 

Air Service (EAS) burden at the Shenandoah Valley Regional Airport is to increase the number of 

passengers flying through the Airport, spreading out the federal government investment over 

more passengers. As passenger traffic increases at the Airport, revenues will grow, and the 

federal subsidy required to support the air service will be reduced. The best way to grow 

passengers in the short term in the Shenandoah Valley will be to promote the current service to 

potential local travelers. The Department of Transportation has a unique opportunity to invest a 

small amount in this grant proposal, that could help save it millions of dollars in Essential Air 

Service (EAS) funding in the years to come. 

“[The Airport] spent more than 

$100,000 of its own money in 

publicizing [service changes]... 

[causing a passenger] increase of 

146% since the lows from the 

middle part of the decade.” 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 11

PRIMARY OBJECTIVES OF PROPOSAL 

Objectives for Program: 

 Bolster performance of an Essential Air Service (EAS) route 

 Increase enplanements through increased awareness 

 Lower fares in the market through increased enplanements 

 Decrease leakage to other regional airports in the region through lower fares 

 Long term service improvements due to increased viability of local air service 

Means to Achieve Objectives: 

 Build a larger budget for marketing and advertising efforts in the Shenandoah 

Valley 

 Target segments of the population in the region most likely to use local air service 

 Work with businesses to increase usage of current air service through increased 

awareness 

Course of Action to Support Means: 

 Develop targeted marketing and local advertising campaign for potential airport 

users in the Shenandoah Valley 

 Ensure campaign saturates the market with the message that local air service is 

competitive with service offered at other airports in the region 

 Ensure campaign has funding to run for a significant period of time – at least 12 

consecutive months 

 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 12

EXECUTIVE SUMMARY 

For the first time in almost 20 years, the Shenandoah Valley Regional Airport has seen passenger 

growth for three years in a row. This is an excellent indicator that the market’s Essential Air 

Service (EAS) is finally performing well, once again. Still, the market’s total passengers are down 

59% from the passenger peak seen in 2000. 

The Shenandoah Valley Regional serves the heart of one of the most famed valleys in all of 

America. While the Airport isn’t located in any one large city, it draws passengers from a 

number of large cities throughout the Valley. In fact, the Airport was located in the center part 

of the Valley in order to be able to attract and serve passengers from a number of cities, instead 

of just one city. 

The majority of passengers who fly in and out of the Shenandoah Valley Regional Airport come 

from the immediate area, of which the Airport sits at the center. This immediate catchment 

area includes the communities of Staunton, Harrisonburg, Waynesboro, Augusta, and 

Rockingham. The 30 minute drive 

Shenandoah Valley Regional 

Airport catchment area (seen 

inside the dotted line in Figure 1) 

is home to 153,094 people as of 

the latest US Census estimates, 

while the one hour drive 

catchment area (seen inside the 

solid line in Figure 1) is home to 

334,421 people. The Shenandoah 

Valley Regional Airport has the 

ability to draw from an even 

larger area due to its relative 

isolation – located between two 

ranges of the Appalachian 

Mountains. 

Since the Airport joined the ranks 

of those receiving Essential Air 

FIGURE 1: Shenandoah Valley Regional Airport’s immediate

(30 minute) and extended (60 minute) catchment areas
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 13

Service (EAS) subsidies, its total passengers have dropped precipitously. The problems have 

been exacerbated by the fact that Airport has seen numerous changes in its Essential Air Service 

(EAS) provider, including airline and destination changes. The Airport’s long standing service to 

US Airways Pittsburgh hub was cancelled at the end of 2004 (see Figure 2). Colgan Air, the EAS 

provider in the Shenandoah Valley, elected to move service to Washington Dulles, but retain the 

US Airways affiliation in 2005. This caused a lack of connectivity, due to the limited number of US 

Airways flights at Dulles that dramatically suppressed local passenger traffic and revenue. 

Only recently has this problem been solved, as Colgan switched the affiliation on its Dulles 

service to United Express, allowing for connections through United’s Dulles hub in spring of 2008. 

The increased connectivity with Dulles service on a United-affiliated airline began to become 

apparent in 2008, as passengers jumped by 56% over 2007, despite the fact that the average 

fare in the market also increased (see Figure 2). As of calendar year 2009 the market’s average 

one way fare sat at $199 – up 107% since 2007. 

37,250

34,130

11,880

14,000 13,590

8,470

6,430 6,540

12,660

14,950

950

920

350

170 210

100

10 80

720

830

52.3

48.0

16.8

19.4 18.9

11.7

8.8 9.1

18.3

21.6

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 

PDEW International Domestic

$193

$187 $190 $188

$195

$148

$115

$96

$231

$199

4/Day PIT (US) +

4/Day IAD (UA)

2/Day PIT (US)

2/Day IAD (US)

3/Day IAD (UA)

FIGURE 2: O&D Passengers and Average One Way Fares at SHD

CY2000 – CY2009; Source: US DOT Table DB1A
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 14

In the early 2000s, when the Airport had four flights a day to each Pittsburgh and Dulles, with 

service on both the US Airways and the United Airlines codes, the Shenandoah Valley generated 

as many as 52.3 passengers per day each way (PDEW) (see Figure 2). By 2006, with EAS service 

provided only by US Airways Express to and from Dulles, passengers fell to just 8.8 per day each 

way (PDEW). In the three years since then the Airport has seen passengers grow to 21.6 per day 

each way (PDEW) – an increase of 146% since the lows from the middle part of the decade. 

The Airport’s extensive marketing campaign has been part of the reason for the passenger 

gains. The Airport has partnerships with more major media outlets in the Valley, and it is able to 

leverage those partnerships for extensive ad space and air time. The challenge is that the 

Airport’s budget is small, so it is unable to sufficiently blanket the area in such a way as to better 

discourage passenger “leakage.” 

Another challenge to curbing leakage is the fact that the Shenandoah Valley Regional Airport is 

among the most expensive, in terms of average fare, among the airports in its immediate region. 

As of the year ended first 

quarter 2010, the 

average domestic one 

way fare at 

Shenandoah Valley was 

$193 (see Figure 3). 

Average fares in the 

Shenandoah Valley are 

10% higher than the 

regional average 

domestic one way fare 

of $175 (see Figure 3). 

Moreover, the Shenandoah Valley’s average one way domestic fare is $ higher each way than 

the average fare at Richmond, of $146 each way as of the year ended first quarter 2010. This 

causes a large number of passengers who live in the SHD catchment area to make the drive to 

Richmond – which is 124 miles each way with a roundtrip drive time of 4:44 – in order to access 

lower priced air service. 

$193

$182

$180

$174

$146

$125 $135 $145 $155 $165 $175 $185 $195

Shenandoah Valley

Charlottesville

Washington Dulles

Roanoke

Richmond Regional Average: $175

FIGURE 3: Average Domestic One Way Fares at Regional Airports

YE1Q10; Source: US DOT Table DB1A
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 15

Despite high average fares in 2008, the Shenandoah Valley air service market was able to 

reverse its passenger traffic downward trend, growing total passengers in each of the last two 

years. This growth was largely due to the increased convenience of service on the United 

Airlines code to the Washington Dulles. 

Month over month growth has also been noted so far in 2010. January passengers in 2010 were 

up 79% over January passengers in 2008 (see Figure 4). At the same time March 2010 

passengers were up 11% over the last two years, and April 2010 passengers were up 33% over 

the same time period. Only February saw a decrease in passengers, and much of that was due 

to the fact that many flights were cancelled due to the four consecutive snowstorms that hit 

both the Shenandoah Valley and the United hub at Dulles. 

Now is the time for the Airport to capitalize on this success, by marketing the availability of 

additional seats in a more aggressive way. The Airport cannot undertake a wide ranging 

advertising campaign on its own – its revenues simply cannot cover that kind of expense. It 

needs a federal partner for financial assistance in this case. The Airport believes a federal Small 

665

799

1421 1392

983

1174 1272 1283 1193

995

1579

1855

0

200

400

600

800

1000

1200

1400

1600

1800

2000

January February March April

2008 2009 2010

East Coast Storms Caused

Cancellations in February 2010

FIGURE 4: O&D Passengers at Shenandoah Valley Regional Airport

January, February, March, and April 2008 – 2010; Source: Shenandoah Valley Regional Airport
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 16

Community Air Service Development Grant will not only help it publicize its flight availability, but 

that it will also limit leakage, and capture more local passenger traffic, eventually leading to 

lower fares. 

The Airport has a comprehensive plan to achieve its air service goals – in line with the SCASDG 

Program. The Airport’s marketing and advertising program includes many media platforms, and 

will blanket the region, ensuring widespread outreach. The program is the best for the DOT to 

ensure its EAS funding is being put to its best possible use in the Shenandoah Valley. 

 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 17

DETAILED EXPLANATION OF PROPOSAL 

The United Airlines hub at Washington Dulles has been, and continues to be, a key connecting 

point for many cities in the mid Atlantic region. The Shenandoah Valley Regional Airport’s 

access to the Dulles hub is an essential key to its economic success. The Airport currently has 

three daily flights on Colgan Air, dba United Express, to Dulles, on 34 seat Saab SF340 aircraft 

(see Figure 5). While the breadth of service at SHD cannot compete with the service found at 

other regional airports, it plays an essential role in connecting the isolated Shenandoah Valley to 

the national air transportation 

system. 

The Airport seeks a Small Community 

Air Service Development Grant in 

order to provide marketing and 

advertising support for Colgan’s 

service to Dulles. With the support of 

advertising and marketing provided 

by the grant, Colgan should 

continue to see passenger 

increases, allowing it to lower fares in 

the market to levels closer to those 

found at Richmond. 

At the same time, the Airport would hope the increased enplanements from a marketing and 

advertising program would reduce the burden on the Essential Air Service (EAS) program to 

provide subsidies in the market. The long term goal under the program would be to increase 

enplanements to a level where the community’s Essential Air Service funding is no longer 

needed. 

One of the main reasons for the continued passenger leakage from the Shenandoah Valley 

Regional Airport, even with lower fares than its competing airports in some cases, is the lack of 

local knowledge about available air service at SHD. Those who live in the Airport catchment 

area are not conditioned to check local fares first, before booking flights from other airports 

throughout Virginia. Local area travelers immediately book flights from Charlottesville, Roanoke, 

and Richmond, without ever checking to see if fares would be cheaper in the Shenandoah 

FIGURE 5: Current Service at the Shenandoah Valley Regional Airport

August 2010; Source: Airline Schedules
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 18

Valley itself. This lack of general air service awareness is draining the local economy of valuable 

travel dollars, as travelers spend more than they would locally by flying from other airports. 

In order to counteract this harmful trend, which, in effect, wastes valuable Essential Air Service 

(EAS) dollars, the Airport plans a wide-ranging marketing campaign, saturating the entire 

Shenandoah Valley. The campaign will include frequent radio, 

television, billboard, and newspaper advertising, along with 

giveaways. The Airport seeks $150,000 in federal funds, to be paired 

with $20,000 in local funds, which is above and beyond the current 

Airport marketing budget, to support this marketing and advertising 

campaign. The campaign is planned to last for at least 12 months, 

and possibly as long as 18 month depending on the in-kind matching 

donations made by local media companies. 

The Airport has already developed a comprehensive marketing and 

advertising placement plan, which will include large buys on local 

and regional radio stations, along with local and regional newspapers and magazines (see 

Figures 6, 7, and 8). The campaign will be focused in the immediate Shenandoah Valley MSA, 

however it will also have limited ad placement in bordering counties. It will not include any 

placement in the immediate Charlottesville and/or Richmond airport catchment areas. 

Other types of marketing will include new website materials for 

ease of booking and better awareness of specific flight 

schedules (see Figures 6, 7, and 8). The Airport also plans 

specific outreach to area businesses, through Airport-affiliated 

employees, to meet with those who travel most frequently 

and ensure they are aware of the benefit of using local air 

service. 

The actual advertising will build upon the targeted campaigns 

that the Airport has been running for the last 18 months. These 

campaigns push local catchment area residents to check the 

fares at the local airport before booking their flights, and to 

think about the time and expense of driving to other airports 

in the region to access air service (see Figures 6, 7, and 8). 

FIGURE 6: Current Website

Banner Advertising

FIGURE 7: Current  

Print Advertising
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 19

The campaigns also advertise larger aircraft, as Colgan Air has replaced the 19-seat Beechcraft 

1900D with the 34-seat Saab SF340 on the Shenandoah Valley – Washington Dulles route. 

Airport leaders believe the marketing and advertising 

campaign will dramatically increase awareness of the 

service offered at the Shenandoah Valley Regional 

Airport, thus increasing enplanements, and helping, in 

the long-term, to lower fares in the market, making the 

Airport more competitive with other airports in the 

region. Moreover, the Airport believes the marketing 

and advertising campaign will have an immediate 

impact. 

FIGURE 8: Current  

Print Advertising
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 20

LETTERS OF SUPPORT 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 21
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 22
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 23
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 24
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 25
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 26
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 27
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 28
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 29
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 30
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 31

CURRENT AIR SERVICE IN THE SHENANDOAH VALLEY 

The Shenandoah Valley Regional Airport currently has three daily flights on Colgan Air, dba 

United Express, to Washington Dulles, on 34 seat Saab SF340 aircraft, operated under the 

Essential Air Service (EAS) program. The flights operate under an annual subsidy of $1.9 million. 

This air service is preferable to previous service, provided by Colgan under the US Airways Express 

brand, offering few onward connections at Dulles. This current service has caused an increase 

in passengers over the last three years – the first such increases in the last decade. 

Current Passenger Traffic in Shenandoah Valley 

From the year ended first quarter 2001 to the year ended first quarter 2008, the Shenandoah 

Valley Regional Airport recorded origin and destination passenger declines of 79%, from 42,650 

total origin and destination passengers, or 58.4 passengers per day each way (PDEW), to just 

8,930 total passengers, or 12.2 passengers per day each way (see Figure 9). But in the year 

ended first quarter 2009 and in the year ended first quarter 2010 the Airport finally saw the trend 

reverse. 

41,030

28,190

11,430

15,780

13,120 12,130

9,870 8,660

15,070 16,120

1,620

280

1,160

300

280

340

250

270

1,310

1,370

58.4

39.0

17.2

22.0

18.4

17.1

13.9

12.2

22.4

24.0

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

YE 2001-Q1 YE 2002-Q1 YE 2003-Q1 YE 2004-Q1 YE 2005-Q1 YE 2006-Q1 YE 2007-Q1 YE 2008-Q1 YE 2009-Q1 YE 2010-Q1

PDEW International Domestic

$202

$182

$210

$195

$203

$178

$160

$167

$246

$219

FIGURE 9: O&D Passengers and Average One Way Fares, Shenandoah Valley Regional Airport

YE1Q01 – YE1Q10; Source: US DOT Table DB1A
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 32

In the year ended first quarter 2009 passengers grew by 83% over the year ended first quarter 

2008, with an increase of 10.2 passengers per day each way (PDEW) (see Figure 9). Passengers 

again grew from the year ended first quarter 2009 to the year ended first quarter 2010 – up 

slightly by 6.8%, or 1.5 passengers per day each way (PDEW). 

Much of the passenger growth in the last two years can be attributed to the re-timing of flights 

on the Shenandoah Valley – Washington Dulles route. In the year ended first quarter 2008, flights 

from Shenandoah Valley to Dulles did not connect to the early morning bank, and the return 

flights did not connect from the last evening bank. Colgan made major changes to its SHD 

schedule in the year ended first quarter 2009, allowing for an aircraft to overnight at 

Shenandoah Valley Regional Airport, connecting to the two most important banks of the day at 

Dulles on United Airlines. This new schedule allowed total enplanements to grow despite 

average airfares that jumped by 31%, to almost $420 

roundtrip as of the year ended first quarter 2010 (see 

Figure 9). 

Previous passenger declines were also due to the 

fact that the Shenandoah Valley Regional Airport 

had seen numerous changes in its Essential Air Service 

(EAS) provider, including airline and destination 

changes. The Airport’s long standing service to US Airways Pittsburgh hub was cancelled in 2004. 

Colgan Air, the EAS provider in the Shenandoah Valley, elected to move service to Washington 

Dulles, but retain the US Airways affiliation. This caused a lack of connectivity, due to the limited 

number of US Airways flights at Dulles that dramatically suppressed local passenger traffic and 

revenue. As of the year ended first quarter 2008 that problem was solved, as Colgan switched 

the affiliation on its Dulles service to United Express, allowing for connections through United’s 

Dulles hub. But the re-timing of the flights was the key ingredient to allow Shenandoah Valley 

travelers to use their hometown airport more efficiently. 

An interesting trend emerged in 2008 in terms of the ranking of origin and destination cities for 

Shenandoah Valley travelers – and it continues in the year ended first quarter 2010. For the first 

time since 2004 a market other than Washington, DC was ranked as the number one passenger 

destination. As of the year ended first quarter 2010, Chicago O’Hare ranks as SHD’s number one 

origin and destination passenger airport, as Washington Dulles continues its fall – down to 

number 13 on the list (see Figure 10). 

“[A] new schedule allowed total 

enplanements to grow despite 

average airfares that jumped by 

31%, to almost $420 roundtrip...” 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 33

As of the year ended first quarter 2010, the SHD – ORD market saw 1,200 total origin and 

destination passengers (see Figure 10). Boston, Denver, and Orlando were the next largest 

passenger markets, 

each averaging around 

a passenger per day 

each way (PDEW) as of 

the year ended first 

quarter 2010. 

Washington Dulles local 

traffic fell to just half a 

passenger per day 

each way (PDEW) as 

average fares in the 

market continued to 

increase. 

This passenger traffic 

shift is indicative of the 

fact that, in the year 

ended first quarter 2008, 

the number of 

passengers connecting beyond Washington Dulles was low largely due to the fact connections 

required a change of airline, with Colgan service operating under the US Airways Express name, 

instead of the current United Express service. Moreover, connections beyond Dulles were 

difficult, suppressing origin and destination passenger numbers, due to the poorly timed 

schedule. 

With more conveniently timed schedules and better connectivity directly to United Airlines 

destinations on the same ticket, connecting traffic grew in the year ended first quarter 2009, 

allowing Chicago to become the top passenger destination. This connectivity also allowed 

Shenandoah Valley to grow total passengers despite some of the highest average fares in the 

mid-Atlantic region. 

1,200

980

900

680

560

560

500

450

450

400

380

380

370

370

360

300

300

290

270

270

240

240

230

200

190

1.64

1.34

1.23

0.93

0.77

0.77

0.68

0.62

0.62

0.55

0.52

0.52

0.51

0.51

0.49

0.41

0.41

0.40

0.37

0.37

0.33

0.33

0.32

0.27

0.26

0 200 400 600 800 1,000 1,200

Chicago O'Hare

Boston

Denver

Orlando

Dallas/Ft. Worth

San Francisco

Seattle

Hartford

Phoenix

New York LaGuardia

Newark

Houston

Washington Dulles

Los Angeles

Kansas City

Cleveland

Indianapolis

Tampa

Columbus

San Diego

Sacramento

St. Louis

Atlanta

Nashville

Austin

Annual Passengers 

PDEW

FIGURE 10: Top 25 O&D Passenger Markets, Shenandoah Valley

Regional Airport, YE1Q01 – YE1Q10; Source: US DOT Table DB1A
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 34

As of the year ended first quarter 2010, the overall average one way fare at the Shenandoah 

Valley Regional Airport was $219 each way, or $418 roundtrip (see Figure 11). Fares on even 

short itineraries were much higher than the same fares at other airports in the region. For 

example, the average fare to Washington Dulles was $137 each way before taxes and fees. At 

the same time, the average one way fare to New York LaGuardia was $197 each way – almost 

$400 roundtrip. 

High average fares in the 

Shenandoah Valley 

market have the effect 

of, not only, suppressing 

overall passenger traffic, 

but also causing much of 

the region’s passenger 

traffic to “leak” to other 

airports. With fares at 

Charlottesville, 

Richmond, and the 

Washington, DC airports 

all lower than the fares at 

the Shenandoah Valley 

Regional Airport the 

majority of local 

passengers access air 

transportation from these other airports. Another effect is that local travelers become 

conditioned not to check fares at SHD – booking tickets directly from these other airports without 

ever looking at the local fare. The Airport must use this Grant opportunity to educate its 

catchment area to, at least, check local fares first. 

$159

$133

$207

$184

$189

$210

$204

$136

$270

$197

$166

$153

$137

$193

$165

$162

$186

$124

$156

$223

$217

$161

$251

$171

$216

$0 $50 $100 $150 $200 $250

Chicago O'Hare

Boston

Denver

Orlando

Dallas/Ft. Worth

San Francisco

Seattle

Hartford

Phoenix

New York LaGuardia

Newark

Houston

Washington Dulles

Los Angeles

Kansas City

Cleveland

Indianapolis

Tampa

Columbus

San Diego

Sacramento

St. Louis

Atlanta

Nashville

Austin

SHD Average: $219

FIGURE 11: Average One Way Fares at Top 25 O&D Markets,

YE1Q01 – YE1Q10; Source: US DOT Table DB1A
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 35

Current Aircraft Serving the Shenandoah Valley 

In 2007, Colgan operated two different turboprop aircraft at the Shenandoah Valley Regional 

Airport. However, in 2008, Colgan concentrated all operations on 34 seat Saab SF340 

turboprops (see Figure 12), eliminating all service in 19 seat Beech B1900s. This move was 

encouraged by Airport leaders, as it offers all service on larger aircraft, with flight attendants and 

lavatories. The Airport had long pushed for the end of service on B1900s, due to the cramped 

cabin and the lack of amenities. 

The Airport did find, with all flights now on larger 

aircraft, it was in a better position to compete with the 

service at other airports in the region. Moreover, the 

larger aircraft resulted in a net gain of available seats 

that allowed passengers to find additional low fare 

seats in the market. 

The biggest challenge, however, has been the general lack of knowledge about the size of the 

aircraft serving the market. Most in the market still believe flights are provided on cramped 19-

seaters, so they don’t bother to check local service before choosing other airports in the region. 

The Airport still hopes to overcome this perception by launching its advertising campaign will the 

help of a Small Community Air Service Development Grant. 

FIGURE 12: Colgan Air Saab SF340

In United Express Color Scheme
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 36

AIR SERVICE DEFICIENCIES IN THE SHENANDOAH VALLEY 

Although the Shenandoah Valley Regional Airport catchment area represents a relatively small 

proportion of the population of the larger region, the Airport does not come close to retaining 

the number of passengers equal to its share of the regional population. In other words, the 

Airport is “leaking” a large percentage of its passengers to other airports – even though those 

airports are not particularly close. 

The Shenandoah Valley Regional Airport metropolitan area had a population of 235,579 as of 

the latest US Census estimates (see Figure 13). The larger region comprised of the metro areas of 

Washington, DC (through Dulles Airport), Richmond, Roanoke, and Charlottesville has a current 

population of 10,249,101. The Shenandoah Valley’s share of the regional population is 2.3%. 

Washington Dulles (IAD) 8,295,397 80.9%

Richmond (RIC) 1,225,626 12.0%

Roanoke (ROA) 298,108 2.9%

Charlottesville (CHO) 194,391 1.9%

Shenandoah Valley (SHD) 235,579 2.3%

Population Share

SHD

RIC

CHO

IAD

Regional Population

Source: US Census Share of Population of Combined SHD/IAD/RIC/CHO/ROA Catchment

ROA

FIGURE 13: Regional Population Distribution

Source: US Census Estimates
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 37

In many markets, an Airport draws a number of passengers proportional to its overall population 

in the region. If that were to be the case in the Shenandoah Valley market, one could 

reasonably expect the Airport to retain about 2.3% of the total passengers using all five airports 

in the larger region. However, in the case of the Shenandoah Valley, the Shenandoah Valley 

Regional Airport does not retain anywhere close to that percentage of the region’s passengers. 

While the Shenandoah Valley metro area is home to 2.3% of the region’s total residents, its 

airport retains just 0.12% of the region’s total origin and destination passengers (see Figures 14 

and 15). In the region, the Shenandoah Valley has the 

lowest share of passenger retention of any airport. As of the 

year ended first quarter 2010, the Shenandoah Valley 

Regional Airport saw a total of 17,490 passengers. If the 

Airport had been able to retain the number of regional 

passengers proportional to its share of population in the 

region, it would have been used by another 329,940 

passengers. In effect, the Shenandoah Valley Regional 

Airport “leaked” these passengers to other airports in the 

region – a leakage rate of 95%. The Shenandoah Valley 

Regional Airport only retains about 5% of the passengers that 

should be expected based on its share of the regional 

population. 

The largest beneficiary of the Shenandoah Valley’s passenger 

leakage is Richmond – which is two hours and 20 minutes 

away by car. Richmond had “reverse leakage” as of the 

year ended first quarter 2010, when it drew 50% more 

passengers than its proportion of the regional population. 

While the Richmond area makes-up 12% of the region’s 

population, it boards almost 21% of the region’s total origin and destination passengers (see 

Figures 14 and 15). If Richmond retained a number of origin and destination passengers 

proportional to its regional population share, it would be expected to generate 1.8 million 

passengers annually. As of the year ended first quarter 2010, Richmond saw a total of 3.2 million 

O&D passengers – 50% above its regional share. At least 250,000 of those passengers likely came 

at the expense of the Shenandoah Valley Regional Airport. 

CHO 1.90%

IAD 80.90%

RIC 12.00%

ROA 2.90% SHD 2.30%

CHO 2.28%

IAD 72.91%

RIC 20.93%

ROA 3.76% SHD 0.12%

FIGURE 14: Regional Population Share

Source: US Census Estimates

FIGURE 15: Regional O&D Passenger Share

Source: US DOT Table DB1A
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 38

Another way of determining passenger leakage from the Shenandoah Valley market to other 

airports in the region is by comparing the economy of the Shenandoah Valley to the economies 

of the nearest four cities with commercially-served airports. The easiest way to gauge each 

catchment area’s contribution to the economy of the region is to compare the gross 

metropolitan products (GMP) of each. A GMP is much like a gross national product – an overall 

gauge of economic activity in a specific area, measured in dollars earned. 

The United States Council of Mayors reports the Shenandoah Valley metro area produced a 

GMP of $7.7 billion, which represented 1.6% of the total gross regional product (GRP) of the area 

including the Washington, DC (through Dulles Airport), Richmond, Roanoke, and Charlottesville 

metro areas (see Figure 16). 

Sources: United States Council of Mayors, June 2008

Washington Dulles (IAD) $383.4 Billion 81.0%

Richmond (RIC) $61.2 Billion 12.9%

Roanoke (ROA) $8.7 Billion 1.8%

Charlottesville (CHO) $12.4 Billion 2.6%

Shenandoah Valley (SHD) $7.7 Billion 1.6%

GMP Share

SHD

RIC

CHO

IAD

ROA

Gross Metropolitan Product (GMP)

FIGURE 16: Regional Gross Metropolitan Product (GMP) Distribution

Source: US Council of Mayors
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 39

The Washington, DC/Dulles area generated the largest portion of the GRP, with $383.4 billion, or 

81.0%, while Richmond produced a GMP of $61.2 billion – good for 12.9% of the GRP (see Figure 

16). Charlottesville, despite a smaller population than Roanoke, produced a larger GMP, with 

$12.4 billion in economic activity or 2.6% of the region’s GRP. Roanoke produced 1.8% of the 

GRP on total economic activity of $8.7 billion. 

Despite producing 1.6% of the total gross regional product (GRP), the Shenandoah Valley 

Regional Airport retains just 0.12% of the region’s total origin and destination passengers (see 

Figures 17 and 18). In the region, the Shenandoah 

Valley has the lowest share of passenger retention 

relative to its gross metro product (GMP), of any airport. 

As of the year ended first quarter 2010, the 

Shenandoah Valley Regional Airport generated a total 

of 17,490 origin and destination passengers. If the 

Airport had been able to retain the number of regional 

passengers proportional to its share of the GRP, it would 

have been used by another 224,200 passengers. In 

effect, the Shenandoah Valley Regional Airport 

“leaked” these passengers to other airports in the 

region – a leakage rate of 93%. The Airport only retains 

about 7% of the passengers that should be expected 

based on its share of the gross regional product. 

There appears to be a large beneficiary of the 

Shenandoah Valley’s passenger leakage: once again, 

it’s Richmond. Richmond experienced “reverse 

leakage” as of the year ended first quarter 2010, when 

it drew almost 50% more passengers than its proportion 

of the gross regional product (GRP). While the area surrounding Richmond generates 12.9% of 

the GRP, Richmond’s Airport boards more than 20.9% of the region’s total origin and destination 

passengers (see Figures 17 and 18). If Richmond retained a number of origin and destination 

passengers proportional to its GRP share, it would be expected to generate 1.9 million 

passengers annually. As of the year ended first quarter 2010, Richmond saw a total of 3.2 million 

O&D passengers – nearly 50% above its projected GRP share. 

CHO 2.60%

IAD 81.00%

RIC 12.90% ROA 1.80%

SHD 1.60%

CHO 2.28%

IAD 72.91%

RIC 20.93%

ROA 3.76% SHD 0.12%

FIGURE 17: Regional GMP Share

Source: US Council of Mayors

FIGURE 18: Regional O&D Passenger Share

Source: US DOT Table DB1A
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 40

It has been established that the Shenandoah Valley Regional Airport is losing a significant 

number passengers from its catchment area. Attention then turns to the reasons why travelers 

are driving to other airports – airports that aren’t particularly close. As is the case with many 

other airports experiencing leakage, it all 

comes down to the availability of flights on 

the right airlines at the right times and the 

fares on those flights. 

It appears that travelers in the region’s 

smaller airport catchment areas don’t 

necessarily have a realistic idea of the air 

service available at their hometown 

facilities, versus what’s available at larger 

airports. The Shenandoah Valley Regional Airport could make the case, with its flight schedule, 

that the time savings of avoiding Dulles on the ground would more than make up for the lack of 

specific flight frequencies and non-stop destinations. At this point, it appears the airports in the 

region, including the Shenandoah Valley Regional Airport, aren’t doing a sufficient job of 

educating the public about the availability of local air service, despite fewer available seats 

and higher fares. 

 

“The Shenandoah Valley Regional 

Airport could make the case... that the 

time savings of avoiding Dulles on the 

ground... would make up for the lack 

of... flight frequencies and non-stop 

destinations.” 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 41

EXTENUATING FACTORS AFFECTING AIR SERVICE 

Due to Shenandoah Valley Regional Airport’s status as an Essential Air Service (EAS) market, the 

Airport is only allowed to have service on one airline. This manifests itself in the form of no local 

competition for air service, which leads to local fares that have been demonstrated to not be 

competitive with the other airports in the region. Due to the fact that the EAS program only 

allows for certain flight activity to be maintained, the Airport can have no more than three daily 

weekday departures. This limits, not only, connectivity beyond the Dulles hub on United, but also 

the convenience of the scheduled departure and arrival times. 

Moreover, airlines that serve the 

Shenandoah Valley Regional 

Airport offer far fewer seats 

available for sale in the 

Shenandoah Valley than they do 

at other adjacent airports in the 

region. Airlines offered just 45,680 

total available seats in the 

Shenandoah Valley as of the year 

ended first quarter 2010, or 63 

departing seats per day (see 

Figure 19). 

As of the year ended first quarter 

2010, airlines offered six times the 

available seats in Charlottesville 

that they offered in the 

Shenandoah Valley, nine times 

the available seats in Roanoke, 

more than 47 times the available seats in Richmond, and 234 times the available seats at 

Washington Dulles as they offered in the Shenandoah Valley (see Figure 19). The lack of 

sufficient available seats for sale in the Shenandoah Valley market forces many travelers to drive 

to other airports to access the national air transportation system. The small number of available 

seats at the Shenandoah Valley Regional Airport as of the year ended first quarter 2010 is 

10,665,359

2,167,653

437,439 275,216 45,680

14,610.4

2,969.7

599.6 377.4 63.0

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000 SDEW Departing Seats

FIGURE 19: Available Departing Seats at Regional Airports

Source: US DOT T100 Data
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 42

partially responsible for the Airport’s inability to retain a number of origin and destination 

passengers proportional to its population and gross metropolitan product. 

It must be noted that straight available departing seat data doesn’t necessarily fairly compare 

subject markets. A better way to determine how underserved a market really is, is to compare 

the number of available departing seats per capita – or per resident of each airport’s 

immediate catchment area. 

Airlines serving the Shenandoah Valley Regional Airport offered just 0.19 departing seats per 

capita as of the year ended first quarter 2010 (see Figure 20). That was, by far, the lowest 

number of departing seats of any 

airport in the immediate region. By 

comparison, airlines serving 

Washington Dulles offered 1.29 seats 

per capita as of the year ended first 

quarter 2010, airlines serving 

Charlottesville offered 1.42 seats per 

capita, airlines serving Roanoke 

offered 1.47 seats per capita, and 

airlines serving Richmond offered 

1.77 seats per capita as of the year 

ended first quarter 2010. 

With fewer available seats and higher average fares, there isn’t much incentive for Shenandoah 

Valley travelers to fly from their hometown airport, other than its convenience. In many cases, 

the convenience does not outweigh the greater flight offerings and lower fares at other airports 

in the region – even though the closest of those other competitive airports is a two and a half 

hour drive away. 

The only proven way to get more people to use local airline service is to better market its 

benefits. As seen in the detailed explanation of this proposal, the Airport has a creative, eyecatching, and focused advertising and marketing program ready to go, to promote its local air 

service and to boost local enplanements. All the Airport needs to make the program a reality is 

the assistance of federal funding, to help spread the message on a wide scale, and ensure the 

best possible advertising distribution.

1.77

1.47

1.42

1.29

0.19

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0

Richmond

Roanoke

Charlottesville

Washington Dulles

Shenandoah Valley Regional Average: 1.33 Seats

FIGURE 20: Available Departing Seats Per Capita

Source: US DOT T100 Data, US Census Estimates
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 43

AVAILABILITY OF ALTERNATE AIRPORTS 

The Shenandoah Valley Regional Airport serves the geographically isolated Shenandoah Valley, 

which is surrounded on all sides by mountains in the Appalachian Range. As such, the region is 

not well served by alternate airports, even though there are a number of airports nearby. The 

closest alternate airport is Charlottesville, which lies 58 miles away, a drive of an hour and 15 

minutes (see Figure 21). Access to Charlottesville is more difficult than it would appear due to 

steep topography and the lack of 

interstate access. 

A number of Shenandoah Valley 

travelers fly in and out of 

Washington Dulles, which is 132 

miles to the northeast of the area 

(see Figure 21). The drive from the 

Shenandoah Valley to Dulles takes 

more than two hours and 30 

minutes. 

Other alternates include 

Richmond, Roanoke, and 

Washington Reagan National, but 

none of these airports is close 

enough to the Shenandoah Valley 

to offer true air service access. 

FIGURE 21: Airports in the Same Region as

Shenandoah Valley Regional Airport
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 44

USE OF LOCAL FEDERAL FUNDS 

Marketing and Advertising 

The Shenandoah Valley Regional Airport proposes to spend a total of $170,000 on marketing 

and advertising promotions in support of United Express service to Washington Dulles. This 

funding should be sufficient to blanket the market with the message that local service is more 

convenient than service provided at other airports in the region. The campaign will be 

developed so that it targets specific segments of the population who are most likely to fly locally. 

For examples, see the “detailed explanation of the proposal” section of this application. 

Additional Costs 

As part of this program, the Shenandoah Valley Regional Airport understands that additional 

expenses will be incurred, such as monitoring the results of the program and reporting those 

results back to the US DOT. The Airport will pay for these additional expenses out of other airport 

sources and will not incorporate these fees and charges into this proposal. 

 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 45

PUBLIC/PRIVATE PARTNERSHIPS 

A number of local partners will be working with the Shenandoah Valley Regional Airport to 

promote and market the new service. Contacts will be made to all regional members of 

chambers of commerce and similar organizations, and those with an interest in growing the 

economic base of the community through local business growth, attraction of new businesses 

and the promotion of tourism and visitor traffic via the airport. 

Shenandoah Valley Partnership 

The Shenandoah Valley Partnership acts as an information bridge between the Shenandoah 

Valley Regional Airport and the region’s businesses. The Partnership represents thousands of 

businesses in 16 counties across the Shenandoah Valley. As the lead marketing agency in the 

region, the Partnership is in a unique position to spread word about new air service in the market, 

and to promote its use. The Partnership is ready to use its resources to promote service to 

Washington Dulles.

Harrisonburg-Rockingham Chamber of Commerce 

The Harrisonburg-Rockingham Chamber of Commerce works to promote the development of its 

region of the Shenandoah Valley market. As such, its leaders realize the importance of 

convenient air service at the Shenandoah Valley Regional Airport. The HarrisonburgRockingham Chamber is proud to partner with the Airport in advertising and marketing new 

service. Moreover, the Chamber continues to work closely with Airport leaders to ensure the 

success of air service in the market.

Greater Augusta Chamber of Commerce 

The Greater Augusta Chamber of Commerce plans to partner with the Shenandoah Valley 

Regional Airport to help promote and market Washington Dulles service. The Chamber will 

communicate with all business and community members through e-mail, mailings, and events, 

the importance of supporting local air service at the Shenandoah Valley Regional Airport. 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 46

IMPLEMENTATION TIMELINE 

The Airport’s proposed implementation timeline for the project assumes the Department will 

award Small Community Grant Funding in December 2010. Once the award is announced, the 

Shenandoah Valley Regional Airport will begin work with private marketing and advertising firms, 

along with Colgan Air and United Airlines, to build the campaign materials and to finalize the 

placement plan. 

The first two milestones on the Airport's timeline are to execute the grant agreement with the 

Department and execute an agreement with a marketing and advertising firm to begin work. 

These milestones should be achieved by the end of January 2011. Additionally, the Airport will 

submit grant status reports on a quarterly basis to the Department throughout the proposed term 

of the marketing and advertising program. The specific timeline is listed below. 

Activity/Project Milestone Estimated Date

SCASD Grant Award Announcement December 2010

Executive Grant Agreement with DOT January 2011

Executive Agreement with Marketing Firm January 2011

Develop Creative February 2011

Develop Comprehensive Placement Strategy February 2011

Launch Campaign March 2011

Sustain Campaign March 2011 - May 2012

Monitor Route Performance March 2011 - May 2012

Submit Grant Status Reports to DOT Quarterly Q1 2011 - Q2 2012

Close Grant May 2012
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 47

AIR SERVICE ADVISORY GROUPS 

The Shenandoah Valley Regional Airport Commission oversees all air service provided at the 

Airport, along with efforts to increase local air service. The group is made-up of a number of 

community leaders, who all share the common goal of keeping the Shenandoah Valley wellconnected. The Commission will be in charge of administering the Small Community Air Service 

Development Grant under this program. The Commission also oversees all the marketing and 

advertising activities of the Airport. 

 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 48

LOCAL AIR SERVICE DEVELOPMENT EFFORTS 

Over the past seven and half years, the Shenandoah Valley Regional Airport has been working 

diligently to restore air service and passenger traffic to pre-2001 levels. Since that time, the 

Airport has experienced numerous set-backs including US Airways’ elimination of the Pittsburgh 

hub in 2004. The carrier serving the market at the time switched the hub destination to 

Washington Dulles – a large United hub – but it continued to operate service as US Airways 

Express. The net result was high fares and poor connectivity due to the limited service US Airways 

provided at Dulles. 

The Airport, in conjunction with the incumbent air carrier, Colgan Air, made a substantial 

change in service in 2008, when Colgan received permission, from United, to operate the service 

to Washington Dulles under the United Express name. This change brought about significantly 

lower fares, along with significantly improved connectivity. Moreover, the 19 seat Beechcraft 

1900 previously operated in the Shenandoah Valley was changed to a 34 seat Saab 340 

aircraft. The Airport maximized local resources to help inform the community of the significant 

changes, and while substantive increases passenger traffic have been achieved, the Airport 

does not have the local financial resources to make the change in service widely known. 

After seven and half years of having service which was not competitive or attractive, the Airport 

needs to execute a well funded marketing and promotional program to educate the public 

that even though the hub destination has not changed, the fares, connectivity, schedules and 

equipment have improved dramatically as a result of the switch to United Express and the larger 

aircraft. The goal is to recapture passengers that have been lost in the past several years and 

lessen the region’s dependence upon, or possibly eliminate the need, for Essential Air Service 

funding. 

 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 49

IN-KIND SERVICES FROM COMMUNITY 

The following organizations will help promote the new service through their various membership 

groups. There is no estimated value to these services. 

 Shenandoah Valley Regional Airport Commission 

 Shenandoah Valley Partnership 

 Harrisonburg-Rockingham Chamber of Commerce 

 Greater Augusta Chamber of Commerce 

 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 50

PERFORMANCE MEASURES 

The success of the program will be based on a pair of variables. The Airport will judge the first 

measure of success by the increased number of enplanements on United Express service to 

Washington Dulles. The second measure of success will be based on how much average 

airfares charged in the community have gone down, with the increase in enplanements. The 

measurement of enplanements will include a monthly comparison, once the program begins, to 

past enplanements numbers. The measurement of airfares will be derived from US DOT OD1A 

reports. 

 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 51

LEGAL SPONSOR 

The Shenandoah Valley Regional Airport is the legal sponsor responsible for administering the 

program. The Shenandoah Valley Regional Airport is a government entity. 

Shenandoah Valley Regional Airport 

77 Airport Circle 

Weyer’s Cave, Virginia 24486 

Greg Campbell, Airport Director 

540.234.8304 

gcampbell@flyshd.com 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 52

FINANCIAL CONTROLS 

As the sponsor, the Shenandoah Valley Regional Airport will be the responsible party for all fiscal 

matters and DOT reporting requirements. The group is established as an Airport Authority, which 

is a public governing body. As a public entity the DOT can be assured that proper financial 

controls are in place to guarantee that the DOT’s grant will be used in accordance with any 

subsequent agreement. The Airport understands that the grant is a reimbursable grant, meaning 

the Airport is responsible for program expenditures and will submit invoices to the DOT for 

reimbursement, based on a percentage of the total grant request. 

 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 53

RETURN ON INVESTMENT 

The Shenandoah Valley Regional Airport has developed a cost effective and achievable 

strategy to increase enplanements and lower airfares at the Airport. The proposal uses proven 

methods of achieving air service improvements, allowing the DOT to be comfortable with 

choosing this proposal. The increased awareness of air service, increased enplanements on the 

service, and access to lower airfares with increased enplanements, is in line with the major goals 

of the Small Community Air Service Development Program. 

 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 54

DOT EXIT STRATEGY 

The Shenandoah Valley Regional Airport has developed this proposal as a one-time grant. The 

advertising and marketing program will commence as soon as this grant is awarded and last for 

at least twelve months. It is projected that local enplanements will grow within the first few 

months of the launch of the advertising program. 

 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 55

AIRPORT INFORMATION 

The Shenandoah Valley Regional Airport is located in Weyer’s Cave, Virginia, a short drive for 

residents of three major regional cities and a number of smaller towns. The Airport was placed in 

its current location as a gateway to the region, instead of a portal to just one city, and as such, it 

draws passengers from a large swath of the Shenandoah Valley region. Convenient to 

Harrisonburg, Waynesboro, and Staunton, as well as Augusta and 

Rockingham counties in Virginia, and Interstates 81 and 64, the 

Shenandoah Valley Regional Airport serves thousands of passengers each 

year for both business and pleasure. 

SHD is constantly working to improve not only their facilities, but the 

services they offer to those who use them. Their goal is to make travel 

affordable and convenient. 

While the Airport has just one commercial carrier currently, it averages more than 71 operations 

a day, or more than 26,000 operations per year, making it one of the busier one runway airports 

in Virginia. That one runway is just over 6,000 feet long, 

with an ILS (instrument landing system) approach on one 

end (see Figure 22). The runway can handle virtually any 

regional aircraft in virtually any weather conditions. 

The Airport has a modern terminal, with plenty of room for 

additional passengers. The incumbent airline, Colgan, is 

the only tenant at the ticket counter, with plenty of 

space. The terminal is designed to handle additional 

airlines and additional passengers.

Figure 22: Aerial Photo, Shenandoah Valley

Regional Airport, 2010
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 56

SHENANDOAH VALLEY COMMUNITY PROFILE 

The Shenandoah Valley of western Virginia and eastern West Virginia is nestled between the Blue 

Ridge Mountains to the east and the Appalachian Mountains to the west and is a part of the 

Great Appalachian Valley that runs though Virginia and North Carolina. The Valley is home to 

the large cities of Staunton, Harrisonburg, and Waynesboro. It encompasses seven counties in 

Virginia and two in West Virginia. 

The Valley was named by the Native Americans who first settled it 

thousands of years ago. The word “Shenandoah” means 

“beautiful daughter of the stars” in their native language. The 

Valley has long been a major migratory path, first for the 

Delaware and Catabwa tribes, and later for the European settlers 

who formed the United States. 

Today the Shenandoah Valley has grown beyond is transitory and agricultural roots to become 

the economic and tourist center of the northern Appalachian Mountains. The Valley is home to 

a number of major resorts including the world renowned Homestead, which is a nationally 

recognized golf and ski resort. The region is also home to a number of cultural attractions, as it is 

situated just 153 miles from the Nation’s capital. The Valley is the birthplace of the Blue Ridge 

Parkway – arguably the most famous drive in the eastern US – winding through the majestic Blue 

Ridge Mountains. 

“Tourism services” is the largest sector of employment in the 

Shenandoah Valley, with more than 41,000 people working in the 

field. The region also has major investment in food processing, 

with worldwide companies such as Coors, Hershey, Perdue, Tyson, 

and Pilgrim’s Pride operating large processing facilities in the 

region. 

The Shenandoah Valley economy has grown more diversified, and more high-tech in the last 

decade, with Merck operating a large pharmaceutical plant and Wayn-Tex opening a major 

operation developing new age plastics and resins. With new economic development, per 

capita personal income in the Shenandoah Valley is at an all-time high, keeping pace with the 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 57

major urban areas of the mid-Atlantic region, at $32,229 according to statistics from the Virginia 

Economic Development Partnership. 

The Valley is home to no fewer than 15 colleges and universities, 

including such well known schools as the University of Virginia, 

Virginia Military Institute, James Madison University, and Liberty 

University. Together, these schools enroll more than 75,000 full-time 

students within a two-hour drive of the Shenandoah Valley Regional 

Airport. 

What’s New in the Shenandoah Valley 

The Shenandoah Valley is growing in the diversity of its economic interests. The colleges and 

universities located in the region have become incubators for new, high-tech ideas, allowing 

companies located in the area to make great strides in research and development. The 

Shenandoah Valley partnership offers a number of grants and research sponsorships, allowing 

universities to recoup the cost of the development of new technologies, then transfer those 

technologies to new companies that can market the ideas. 

At the same time, the Airport has seen significant new development, as detailed in this recent 

press release: 

Shenandoah Valley Regional Airport and Dynamic Aviation 

Announce Agreement for Future Development 

The Shenandoah Valley Regional Airport Commission announced today that Dynamic Aviation 

of Bridgewater, Va. has agreed to a long-term ground lease agreement with the Airport 

Commission for future Corporate Hangar construction at Shenandoah Valley Regional Airport. 

Dynamic Aviation through its affiliate, Shenandoah Hangar, LLC., has agreed to a ground lease 

in the Airport’s North Corporate Hangar Development Area for potentially the next 40 years. This 

will allow Dynamic Aviation the opportunity to construct Hangar space to support their growing 

flight operations. 

Dynamic Aviation Group, Inc. is a leading supplier of aerial platforms throughout the world. The 

company was founded in 1967 and has enjoyed continued growth and diversification in their 

business since that time. They are headquartered in Bridgewater, Virginia and now employ 

approximately 400 aviation professionals. According to Michael Stoltzfus, President and Chief 

Executive Officer of Dynamic Aviation, "We are excited about the growth opportunities this 

agreement provides. The Shenandoah Valley Regional Airport provides the necessary 

infrastructure, facilities and all weather capabilities that will be required to support a portion of 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 58

our growing operation in the years to come. We look forward to growing our business in the 

Shenandoah Valley." 

Gerald Garber, Chairman of the Shenandoah Valley Regional Airport Commission commented, 

"We are extremely pleased that Dynamic Aviation has decided that Shenandoah Valley 

Regional Airport will be a part of their continued growth. We look forward to partnering with 

Dynamic Aviation to meet their future aviation needs here in the Valley." 

The Interstate 81 corridor is now known as the “Education and Technology Corridor,” 

which runs the length of the Shenandoah Valley 

Universities in the Corridor are currently working on 

a number of new research projects, with more 

than $100 million in grants and start-up capital. 

The projects range from the pharmaceutical field 

to improving the internet and preventing terrorist 

attacks. 

 James Madison University received $25 

million in external funding to improve laboratory 

facilities with new high-tech research instruments. 

The money came from various sources, including 

the federal and State government, private 

industry, and foundations. 

 The Shenandoah Valley Technology 

Council is working with James Madison University on a full-scale study of broadband 

internet access and connectivity. The study will likely lead to major changes in the 

availability of broadband in the State, connecting many more residents to reliable 

internet access. 

 Researchers at James Madison University are developing new strategies to protect the 

nation’s high-tech infrastructure from acts of terrorism. The University is one of the few in 

the US names as a “center for excellence” by the National Security Agency. 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 59

 The Shenandoah Valley is a center for biofuels, as both James Madison University and the 

City of Harrisonburg were noted for their outstanding research and development of an 

alternative fuel refinery in the region. 

Shenandoah Valley Economic Overview 

The Shenandoah Valley has long been a center for trade, transportation, and agriculture. The 

region’s good growing climate and easy access has made it a center for processing facilities 

producing everything from chocolate to chicken. These facilities form a strong, stable 

economic base. But today, the economy of the region has 

grown and diversified from its roots. 

More people in the Shenandoah Valley work in sales and 

office support jobs than in any other occupation (see Figure 

23). Managerial and administrative jobs also make up a 

large portion of current employment by occupation in the 

Valley. Altogether, 50.1% of job in the region are considered 

“white collar” – business services and administrative positions with very high relative pay. This is 

the reason why the Shenandoah Valley’s per capita income tops $32,229 annually. The 

Harrisonburg area also has an unemployment rate of only 6.7% (June 2010), quite a bit lower 

than the national average of 9.5% 

Figure 23: Employment by Occupation,  

Shenandoah Valley, 2009
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 60

The Shenandoah Valley’s high quality of life has drawn many major companies to locate 

facilities in the area. The Valley is currently home to five Fortune 1000 companies. These 

companies employ more than 10,000 people in the Shenandoah Valley Regional Airport’s 

catchment area – many in highly mobile sales and administrative positions.

Employer Approx. # of Employees 

James Madison University 4,000 

Augusta Medical Center 2,000 

Merck Pharmaceuticals 1,300 

INVISTA 1,250 

Lee’s Carpets 1,250 

McKee Foods 1,250 

Pilgrim’s Pride 1,200 

Target Stores 1,200 

The Homestead Resort 800 

Hershey Chocolate 750 

Marshall’s Stores 750 

Coors Brewing 500 

Graham Packaging 500 

American Safety Razor Company 500 

Perdue Farms 400 

Tyson Foods 400 

Mohawk 400 

Firm Rank Revenues 

Target 28 $64.9 Billion 

Tyson Foods 89 $28.1 Billion 

Merck 103 $23.9 Billion 

Pilgrim’s Pride 304 $ 8.5 Billion 

Figure 24: Top Employers in the Shenandoah Valley

Source: Virginia Economic Development Partnership, 2010

Figure 25: Fortune 1000 Companies in the Shenandoah Valley

Source: Fortune Magazine, 2009
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 61

Select Company Profiles

Merck Pharmaceuticals 

Established in 1891, Merck is one of the country’s oldest pharmaceutical firms, producing a 

number of drugs used to treat hundreds of ailments. Merck is also one of the world’s largest 

companies, employing more than 50,000 people worldwide. With markets in 100 countries, 

Merck is based in New Jersey. Its Shenandoah Valley operation draws upon the research and 

development of a number of area colleges and universities to develop new medical solutions. 

INVISTA 

INVISTA is a pioneering firm in the manufacturing of synthetic fibers and 

polymers. INVISTA’s best known brand is Lycra, the stretchy material used in a number of 

clothing applications. INVISTA is one of the Shenandoah Valley’s largest employers, with a major 

research and manufacturing facility in Waynesboro. The company is based in Wichita, Kansas. 

Target Stores 

Based in Minneapolis, Target is one of the world’s largest and most 

recognized retailers. With annual sales topping $59 billion, Target is 

listed as the 33rd largest company in the US. Target operates its largest east coast distribution 

center in the Shenandoah Valley, sending products to all of its stores in the northeastern and 

mid-Atlantic corridors. 

Pilgrim’s Pride 

The largest poultry producer in the US, Pilgrim’s Pride has operated farms in the 

Shenandoah Valley for more than 60 years. The company has 54,000 worldwide employees, 

with major farms and processing facilities in Alabama, Arkansas, Florida, Georgia, Kentucky, 

North and South Carolina, Iowa, and Tennessee. The company is based in Texas. The company 

exports chicken products to more than 80 countries. 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 62

Coors Brewing Company 

A subsidiary of Molson-Coors, Coors Brewing Company is the second 

largest brewer in the US, and one of the oldest – as the company was founded in 1873. The 

company has two major brewing facilities in the country – in Golden, Colorado, and in the 

Shenandoah Valley of Virginia. Coors produces products that are sold in all US states, along with 

Canada, Mexico, and the Caribbean. 

Shenandoah Valley Tourism 

In recent years, the Valley’s economy is has also grown to accommodate the tourist trade. 

“Shenandoah” is a well known destination around the country. The Valley’s beautiful mountain 

setting draws more than two million annual visitors. The region offers outdoor activities for all 

seasons, with many ski resorts, and golf resorts. Moreover, the Valley is located 

in the cultural heartland of the country, as many of the nation’s founders lived 

and worked in the region. Today their homes, businesses, and communities 

draw tens of thousands of tourists seeking historical pursuits. In 2008 the 

Shenandoah Valley saw total travel expenditures of nearly $800 million. 

The Shenandoah Valley stretches for nearly 200 miles, along the 

Shenandoah River, between the Blue Ridge and Allegheny 

Mountains – both ranges in the Appalachian chain. Nicknamed 

“the big valley,” Shenandoah has been immortalized in a number of 

films, songs, and television shows. The Valley was first settled by 

Europeans in the mid-1700s. It has some of the oldest and most 

significant historical sites in the country, many of which relate to the 

founding of the United States, and its early leaders. During the Civil War the Shenandoah Valley 

was nicknamed the “breadbasket of the Confederacy” due to the wide swaths of agricultural 

lands and the fertile soil that grew crops to help feed Confederate soldiers. Later, the Valley was 

home to President Woodrow Wilson – who’s family has established a library and museum in the 

Valley today. 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 63

The Shenandoah Valley features picture-postcard farms and inns along country roads and the 

popular Skyline Drive and Blue Ridge Parkway, probably the most beautiful parkway in the 

nation. One of the natural wonders of this world is the 100-million-year-old Natural Bridge. The 

region also has many caverns, which include Shenandoah Caves, with an elevator to take you 

underground. The region is home to dozens of hiking trails, paddle sports, and horseback riding 

in the Blue Ridge Mountains. Moreover, there are a number of popular resorts in the 

Shenandoah Valley, including Bryce, the Homestead, and Massanutten. 

Shenandoah National Park 

Appropriately, the Shenandoah Valley Regional Airport is the gateway 

to Shenandoah National Park, which draws more than 1.2 million visitors 

to the region per year. The Park is located along the crest of the Blue 

Ridge Mountains, with hiking trails that lace the hillsides. The Park also 

has the largest wilderness area on the east coast – 40% of its area is 

designated as wilderness that cannot be developed. 

Blue Ridge Parkway 

The famed Blue Ridge Parkway runs along the ridge of the 

Blue Ridge Mountains from Shenandoah National Park all the 

way to the Great Smoky Mountains National Park in North 

Carolina and Tennessee. The Parkway hosts more than three 

million vehicle trips per year. The Parkway runs a total of 469 

miles, with the Shenandoah Valley Regional Airport located at 

its north end – the perfect gateway for a drive from north to 

south. 

The Homestead Resort 

“The Homestead,” as its known locally, is Virginia’s most well-known and 

spectacular mountain resort. The Homestead features a huge, red brick 

resort hotel, with hundreds of rooms and a number of restaurants. But the 

real attraction is what lies outside. The Homestead features three 

championship golf courses, equestrian facilities, a fly fishing school, a 

European-style spa, skiing, snowboarding, ice skating, and a conference 

center. The Homestead has long been considered one of the world’s 

finest getaways. 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 64

Natural Bridge 

Considered one of the seven natural wonders of the world, the Shenandoah 

Valley’s Natural Bridge is a 215 foot tall and 90 foot wide rock formation that 

created a bridge over a valley in the Appalachian Mountains. The Bridge 

has been visited by historical figures such as Thomas Jefferson and George 

Washington – it is initialed by both. Today, the Bridge draws more than a 

million annual visitors. 

Shenandoah Caves 

Located in the heart of the Valley, the Shenandoah Caves are 

considered the most spectacular on the east coast. But the real 

attraction is the fact that the Caves are the only ones in the east that 

have an elevator descending into the depths, instead of a long hike, 

making them the most accessible caves in the US. 

New Market Battlefield 

The 300 acre New Market Battlefield marks the site, near Virginia Military Institute (VMI), where 

VMI cadets joined the fight, helping to defeat the North in a pivotal battle. Today, the 

battlefield is also home to the Hall of Valor Civil War Museum. The site is often the first visited on 

the Civil War trip from Virginia through Maryland and Pennsylvania. 

Shenandoah Folk Art and Heritage Center 

The Folk Art and Heritage Center has the region’s foremost collection of artifacts from the 1700s, 

when the Shenandoah Valley was first settled by European immigrants. Located in Harrisonburg, 

the Center is also known for its fine collection of folk art from the region, ranging from the early 

years of settlement through current times. 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 65

Higher Education in the Shenandoah Valley 

The Shenandoah Valley is home to one of the largest and most prestigious collections of 

colleges and universities in the world. There are no less than 15 universities, colleges, and 

community colleges in, and immediately surrounding, the Valley. Together, these institutions 

enroll almost 100,000 full-time students (see Figure 26), and employ more than 20,000 highly 

skilled and educated full-time faculty members. The institutions of higher learning in the 

Shenandoah Valley are among the most highly respected in the world, truly training the leaders 

of tomorrow. 

 

Figure 26: Virginia’s Higher Education Facilities

Source: Virginia Economic Development, 2008
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 66

James Madison University

Long considered one of the finest public research universities in the 

country, James Madison University (JMU) provides research in emerging 

fields that helps fuel the economy of the Shenandoah Valley. Located in 

Harrisonburg, JMU provides more than 100 courses of studies in science and liberal arts fields. 

The school launched its School of Engineering in 2007. Kiplinger’s Magazine ranks JMU the 21st

best buy in higher education in the US. 

Virginia Military Institute

Also located in Lexington, Virginia Military Institute is best known as “VMI.” It is the 

oldest military college in the US, founded in 1839. VMI cadets going through a 

strenuous selection process before admission, and the Institute draws the best 

students from the top of their classes around the country. VMI is considered the 

“West Point of the South,” as it served that purpose during the Civil War. 

Liberty University

Located in Lynchburg, Virginia, Liberty University is the largest institution of 

higher education in the Shenandoah Valley. The University is a Baptist 

college, modeled after the theological education offered at Notre Dame 

and Brigham Young. Liberty’s current chancellor is Rev. Jerry Falwell. Liberty offers 71 programs 

of study for undergraduates, and 36 programs from graduate students. 

Mary Baldwin College

Founded in 1842, Mary Baldwin College has long been one of the nation’s 

premier women’s liberal arts institutions. US News and World Report ranks the 

College as a top tier master’s level university. Today, the highly-selective school 

enrolls more than 2,000 full-time students from all 50 states and around the world. 

Washington and Lee University

Located in Lexington, Virginia, Washington and Lee University was founded in 

1749, making it one of the oldest private universities in the US. The University is 

currently ranked as one of the top 15 private liberal arts universities in the country 

by US News and World Report. As a highly selective institution, the University enrolls some of the 

best and brightest students from around the country, and around the world. 

 
Shenandoah Valley Regional Airport – Small Community Air Service Development Grant – August 2010 67

CONCLUSIONS 

The Shenandoah Valley Regional Airport has difficulty in retaining local passengers due to 

several factors. For one, local fares on even short itineraries are much higher than the same 

fares at other airports in the region. Additionally, the Airport has far fewer seats for sale than 

other airports in the region. As of the year ended first quarter 2010, airlines offered six times the 

available seats in Charlottesville that they offered in the Shenandoah Valley, nine times the 

available seats in Roanoke, more than 47 times the available seats in Richmond, and 234 times 

the available seats at Washington Dulles as they offered in the Shenandoah Valley 

High average fares and the lack of sufficient seats in the Shenandoah Valley market have the 

effect of, not only, suppressing overall passenger traffic, but also causing much of the region’s 

passenger traffic to “leak” to other airports. With fares at Charlottesville, Richmond, and the 

Washington, DC airports all lower than the fares at the Shenandoah Valley Regional Airport the 

majority of local passengers access air transportation from these other airports. Another effect is 

that local travelers become conditioned not to check fares at SHD – booking tickets directly 

from these other airports without ever looking at 

the local fare. The Airport must use this Grant 

opportunity to educate its catchment area to, 

at least, check local fares first. 

The Airport’s current marketing budget isn’t large 

enough for a wide scale marketing and 

advertising blitz, so the Airport must apply for 

funding from other sources. It is essential that the Airport take advantage of the current trend – 

using it to increase the number of passengers who fly locally, before average fares rise even 

more significantly. 

The Airport believes a marketing blitz will cause passengers to book locally, rather than “leaking” 

to other airports. Then, as passenger traffic grows in the market, through the increased 

marketing and advertising proposed in this application, revenues will grow, and the federal 

subsidy required to support Essential Air Service (EAS) in the Shenandoah Valley will be reduced. 

The Department of Transportation can invest a small amount in this grant proposal, that could 

help save it millions of dollars in EAS funding in the years to come. 

“...local travelers become 

conditioned not to check fares at 

SHD – booking tickets directly from 

these other airports without ever 

looking at the local fare.”