# June 11, 2012

Sponsor: Jackson County/ Rogue Valley International

– Medford Airport, Medford, Oregon

Bern Case, Airport Director Congressional Code: OR

- 0 2
Dun & Bradstreet Number: 155788276 Tax Identification Number (EIN): 93

- 6002298 

# ROGUE VALLEY INTERNATIONAL

– MEDFORD AIRPORT
Application Under the Small Community Air Service Development Program Docket DOT

- OST

- 201 2

- 0069
Application for Federal Support for Growth of Current Air Service via Advertising and Marketing ProgramRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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TABLE OF CONTENTS

Introductory Letter of Support 3 Summary Information

– Appendix C 4
Introduction 7
The Rogue Valley

– Medford Air Service Market 8
Current and Historical Service 8 Alternate Airports 11 Air Service Development Efforts 16
Air Service Needs and Deficiencies 17 Regional Fare Environment 17 Per Capita Capacity 18 Market Seasonality 20 Strategic Marketing Plan 21 Funding Plan 23 Implementation Timeline 24 Public/ Private Partnership 25 Legal Sponsor 27
Letter s of Support 28
Conclusion 31 

### Section Page NumberRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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INTRODUCTORY LETTER OF SUPPORTRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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SUMMARY INFORMATION

– APPENDIX C

Small Community Air Service Development Program
Docket DOT

- OST

- 201 2

- 0069



### 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: __________________

______________ Expiration date of G rant: _______________________ Federal Funds Requested: ______________________ Carrier(s) Service Obtained: ____________________ Destination(s) Served: __________________________



### B. Public/Private Partnership

Public:

1. Rogue Valley International

– Medford Airport 2. Jackson County 3. City of Medford

Private:

1. Medford/Jackson County Chamber of Commerce 2. Southern Oregon Regional Economic Development, Inc. 3. Medford Visitors Convention Bureau 4. Southern Oregon Media Group 5. California Oregon Broadcasting, Inc.Rogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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C. Project Proposal

Marketing Upgrade Aircraft New Route
Travel Bank Service Restoration Subsidy Surface Transportation Regional Service Revenue Guarantee Launch New Carrier Start

- Up Cost O ffset First Service Study Secure Additional Service Other (Specify)



### D. Existing Landing Aids at Airport

Full ILS Outer/Middle Marker Published Instru ment Approach Localizer Other:



### E. Project Cost

1. Federal amount requested: $ 15 0,000
2. State cash financial contribution: $ 0
Local cash financial contribution:
3a. Airport cash funds: $ 5 ,000
3b. Non

- Airport cash funds: $ 15 ,000
3. Total local cash funds: $ 2 0,000
4. TOTAL CASH FUNDING: $ 17 0,000
In

- Kind Contribution:

a. Airport In

- Kind contribution: $ Undetermined
b. Other In

- Kind contribution: $ Undetermined
5. TOTAL IN

- KIND CONTRIBUTION: $ Undetermined
6. TOTAL PROJECT COST: $ 17 0,000 + In

- Kind



### F. In

- Kind Contributions

For funds in lines 4 a (airport in

- kind contribution) and 4 b (other in

- kind contribution), please describe the source(s) of fund(s) for each. Advertising and marketing matching funds (media companies)Rogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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

This application was made available to the s tate under the Executive Order 12372 Process
for review on ______. Program is subject to E.O 12372, but has not been selected by the state for review

. Program is not covered by E.O 12372

.



### H. Is Applicant Delinquent on any Federal Debt?

NoRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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INTRODUCTION

The Rogue Valley International

– Medford Airport has lost more departing airline seats in the last three years than it has in any other time in the last 20 years. Since 2009, airlines have culled an average of 382 departing seats per day out of the market

– or 30% of the market’s total airline capacity. At the same time, Medford’s average, no n

- Allegiant, one way fare has risen to $212 each way

– an increase of 17%, or an average of $62 roundtrip. Medford’s average, non

Allegiant fare is now the highest of any airport in the Pacific Northwest states of Oregon, Washington, and Idaho.

Another major challenge in the Medford market is the seasonality of passenger traffic. The Airport sees a 50% passenger swing from the peak summer months to the lowest winter months, as inbound traffic dries up and outbound traffic is suppressed by ever

- increasing fares. The result is load factors in the low 70s in the winter.

To address these deficiencies, the Airport has worked with its community partners to develop a plan for an advertising and market campaign, designed to help fill those empty seats. The campaign is two

- pronged, with part of the advertising focused on the l ocal market, and the other part focused on large inbound markets. The campaign will explain all there is to do in the Rogue Valley during the shoulder and winter months. Among the partners in the campaign are the local chambers, visitors bureaus, and two local media companies, which have long supported the Airport.

Unlike all of its commercially

- served counterparts in the State of Oregon, t he Rogue Valley International

– Medford Airport has never been a Small Community Air Service Development Grant reci pient. It has applied in the past with more aggressive proposals for additional air service. This year the Airport has chosen to take a different approach

– helping to support its current carriers and fill their empty seats before it goes about recruitin g service to new destinations. It seeks the Department of Transportation as a partner in its project. 

## “Medfo rd’s average, non

Allegiant fare is now the highest of any airport in the Pacific Northwest states of Oregon, Washington, and Idaho.”Rogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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THE MEDFORD/ROGUE VALLEY AIR SERVICE MARKET Current and Historical Air Service

Medford, and the rest of the Rogue Valley in Oregon and northern California, is isolated. In fact, it’s one of the most isolated areas in the lower 48 states. There are not any other air service options within a two hour drive. Add to that the mountain passes one has to cross driving out of
th e Valley in any direction and you have a region that relies on air service for connectivity to the
rest of the world.

Despite this isolation, t he Rogue Valley has become one of the most desirable places in the country to live. Because of this, the catchment area served by the Medford/Rogue Valley
International Airport (see map 1) has grown to almost
three

- quarters of a million people as of
the 2010 US Census.

The one

- hour Medford catchment

area , seen in map 1 in red, is home to 278,200 people as of
the 2010 US Census.
Mean while
, the two

hour catchment

area , seen in map 1
in blue, is home to
730
, 900 people. The population of the
two hour catchment

area has grown by 30 %

- or 220 ,000 people

– in the last decade

. The Rogue Valley International

-- Medford Airport catchment area is the second largest in the State of Oregon, but t he Airport is
still classified as a non

- hub. 

### MAP 1: The Rogue Valley International Airport’s immediate (60 minute) and extended (120 minute) catchment areas; Source: Sixel Consu lting GroupRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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The Medford market is served by four airlines , with non

- stop flights to nine destinations

– four of
which are served less

- than

- daily by Allegiant, and six of which are served on a daily basis by
network carriers (see map 2)

. Only one destination has non

- stop competition

– Los Angeles (LAX) which is served by both Allegiant and Alaska Airlines (throu gh its subsidiary, Horizon Air). In the last 12 months, Medford lost Portland service on United Express (operated by SkyWest),
but added less

- than

- daily
service to Oakland, with
twice

- per

- week flights operated by Allegiant. Other than Allegiant, t he Rogue Valley International

– Medford Airport has no service on low cost
carriers.

The Rogue Valley International

– Medford Airport has seen its
network carrier seats
decline over the last several years , with June 2012 seats down almost 2%
over June 2011 network carrier seats (see figure 1 on next page ). The largest source of seats cuts has been from United, and its United Expres s operators, which will offer 8.3 % fewer departing seats per day in June of 2012 than it did in June of 2011

. For summer of 201 2 United will operate the fewest number of flights in the Medford market it has in the last decade, with Denver capacity down by a quarter

– and with fewer than two flights per day on average. This decline in United capacity comes just one year after Unit ed eliminated Medford

– Portland service. 

### MAP 2 : Medford’s Scheduled Service June 2012; Source: OAG Airline Schedule DataRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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Both Alaska Airlines (through partner Horizon Air) and Delta (operated by SkyWest) will have summer 2012 capacity that is, essentially, flat over summer 2011 ( see figure 1 ) . Alaska has added an average of eight s eats a day each way to and from Portland, while Delta has added an average of two seats a day each way to and from Salt Lake City, with true daily service.

Allegiant has steadily grown is low

- cost leisure presence in Medford over the last five years. In June of 2012 its overall capacity will be up almost 10% over June of 2011 (see figure 1). Allegiant
added ser vice

on the Medford

– Oakland route in May of 2012, with two weekly flights
in each
direction. At
the same time, it has pulled back service on its
three other Medford routes, with Phoenix/Mesa capacity cut in half over last summer. Additionally, Allegian t has informed the Airport it will seasonally discontinue service on both the Phoenix and Oakland routes at the end of the summer. The date for the return of these routes is not yet set. It is also important to note that Allegiant does not provide the ne twork connectivity that is so important
to most of the region’s travelers.

Passengers declined in 2011 at the Rogue Valley International

– Medford Airport

. Passengers have been, basically, steady over the last seven years in the market. The most striking trend is the drop in the number of passengers using the Airport’s network carriers and the connectivity that they provide. Since Allegiant entered the Me dford market in 2007, network carrier passengers have fallen by 91,740 in 2011 or an average of 126 fewer passengers per day each way (see figure 2 on next page). This represents a network carrier passenger decline of 16%.



### FIGURE 1 : Scheduled Service at the Rogue Valley International

– Medford Airport June 2011 vs. June 2012; Source: OAG Airline Schedule DataRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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Since 2007, Allegiant has gro wn its Medford passengers from 18,720 per year to 81,440 per year

– an increase of 335% (see figure 2). This increase comes from Allegiant’s pricing, which is well below the overall market average. Still, in 2011

– for the first time

– Allegiant saw a pa ssenger decline in Medford. Allegiant’s 2011 passengers were down by 15,880 for the year, which is a decline of 16%.

Allegiant saw passengers decline in Medford in 2011 despite fares that were well below the averages on the market’s network carriers. Allegiant’s average fare was $68 each way in 2011 in Medford (see figure 2). The average one way fare for network carrie rs was $212, which ranks
Medford as one of the West’s most expensive air travel markets. Over the last three years, Medford has seen its Network carrier passengers suppressed by fare increases, in conjunction with a loss of available seats. In 2009, the average one way network carrier fare in Medford was $181. In 2011, the same fare was $212

– up 17% or an average of $62 roundtrip, pricing some
travelers out of the market.

B y contrast, the average Allegiant fare in 2011 in Medford was just $68 each way

– but it was up 18% over the 2010 fare (see figure 2 on previous page)

. It’s important to separate the Allegiant 

### FIGURE 2 : O&D Passengers and Average One Way Fares at the Rogue Valley International

– Medford Airport; 2003

– 2011; Source: US DOT Table OD1ARogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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fare from the network carrier fare as Allegiant does not provide the broad connectivity that most of the travelers in the market need, and its specialized service, when averaged, tends to make the Medford air travel market appear to be less expensive than it really is for most travelers.

Medford continues to see steep cuts in the number of available seats, leading to those fare increases. Sin ce 2009, the market has lost nearly a third of its available airline seats. Specifically, Medford has lost an average of 382 departing seats per day since the last peak in the summer of 2009, and in February of 2012 the market averaged just 915 departing seats per day (see figure 3).

While Medford’s airline capacity has been squeezed through seat cuts, the market has been filling a higher percentage of its available seats. The Airport’s overall load factor averaged 83%
in 2011

– the highest in the last decade

– peaking at almost 91% in June of 2011 (see figure 3).
There is d emand for air service that is not being met by the availability of current seats. Any time load factors top 80%, it is likely airlines are leaving behind passengers on high demand days such as Thursdays and Sundays. 

### FIGURE 3 : Available Seats and Passengers per Day Each Way, and Load Factor at the Rogue Valley International

– Medford Airport; June 2009

– December 201 1 ; Source: US DOT T100Rogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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Despite overall capacity cuts in the market, Allegiant has significantly stimulated passengers on routes to its three main destinations: Los Angeles, Las Vegas, and Phoenix. Los Angeles is the

o nly market from Medford that has service on two carriers

– Allegiant and Alaska/Horizon

– and as such, it is Medford’s top origin and destination (“O&D”) passenger market, averaging almost 113 passengers per day each way (see figure 4). Allegiant’s two ot her non

- stop markets served in calendar year 2011, Las Vegas and Phoenix

Mesa, also rank in Medford’s top five O&D passenger markets with 56 passengers per day each way and 48 passengers per day each way, respectively.

Medford’s passenger traffic is distributed around the country, with most passengers traveling
on domestic itineraries. Not a single international destination ranks among Medford’s top passenger markets (see figure 4). Nine of Medford’s top 20 O&D passeng er markets are on the West Coast , while seven are east of
the Rockies.

The Allegiant impact has been good for leisure travelers in the Rogue Valley to Los Angeles, Las Vegas, and Phoenix

– growing each of those passenger markets in excess of 25% over the last three years. Allegiant’s impact has also lowered fares

– but only to the markets it serves non

stop. The Airline does not provide the network connectivity that is so impor tant for business travelers. Despite having little impact on overall fares in the Medford market, Allegiant has depressed the average fare

– taking into account all airlines

– meaning network carriers worry 

### FIGURE 4 : Medford’s Top 20 O&D Pass enger Markets Source: US DOT Table OD1A, Calendar Year 2011Rogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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their yields will be too low on new routes to and from Medford, when the non

- Allegiant average
fare would indicate otherwise.

The only Medford passenger
markets that have fares under $190 each way are those served by Allegiant and those
in the Pacific Northwest sta tes of Oregon and Washington, where the stage lengths are sufficiently short to offer the
airline serv ing the route low operating costs. Allegiant’s average fare was $68 one way in 2011, with the average fare to LAX on all carriers at $109 each way, the a verage fare to Las Vegas at $87, and the average fare to Phoenix

- Mesa on all carriers at $113 (see figure 5). Beyond those cities, Portland, Seattle/Tacoma, and Spokane, all other cities have fares above $190 each way, with the overall average Medford far e on carriers other than Allegiant at $212 one way.

With rising fares and declining capacity the Rogue Valley International

– Medford Airport has worked hard to ensure passengers are retained. The Airport has partnered with local media companies, including California Oregon Broadcasting, which owns and operates the local NBC affiliate TV station, and Southern Oregon Media Group, which owns and publishes the Medford
Mail

- Tribune Newspaper, to advertise air service throughout the region. Nonetheless, the Airport does not have a large marketing budget, as it invests significant money in keeping airline costs
low in order to encourage airlines to r etain and expand service. 

### FIGURE 5 : Average Fares in Medford’s Top 20 O&D Passenger Markets Source: US DOT Table OD1A, Calendar Year 2011Rogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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This Small Community Air Service Development Grant will be an essential part of a coordinated regional effort to better market the service available at Rogue Valley International

– Medford Airport . The ultimate goal will be incr eased enplanements and load factors, which, over time should help to lower Medford’s high airfares. The secondary goal will be to better prove local demand for air service, to help airlines understand the need for a wider breadth of flights and
destinatio ns.Rogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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AIR SERVICE DEVELOPMENT EFFORTS

In just the last year, the Rogue Valley International

– Medford Airport has met, in person, with six airlines and delivered materials to several others. The Airport sees its role as that of a partner in airline success. To that end, it is constantly working with its contracted experts to explore new route opportunities, to develop attractive incentive programs, and to market and advertise its
current service.

So far
, in 2012 , the Airport has spent considerable time talking directly with airline planners and producing materials in support of expanded service. T he Airport has met, in person, with Alaska Airlines, SkyWest, Frontier, US Airways, American Airlines, and Allegiant Air (see figure 6) . The Airport also put together an advertising and marketing campaign, leveraging the support of its media companies, in conjunction with the
launch of new Medford

– Oakland service on Allegiant

.

The Airport has had much success in bringing additional service to the Rogue Valley. Among the new routes recruited by the Airport is Delta’s service to Salt Lake City, Horizon’s service to Los Angeles, and Allegiant’s routes to Las Vegas, Los Angeles, Phoenix/Mesa , and Oakland

. The Airport also worked with America West on service to both Phoenix and Las Vegas before that Airline’s merger with US Airways.

The Airport will contin ue to recruit new service where it makes sense. The Airport is focused on sustainable service opportunities. The Airport has been able to achieve its success despite the
fact that it has never been awarded a Small Community Air Service Development Grant. It seeks a Grant in the 2012 cycle to help it better support its carriers through a more widespread advertising and marketing campaign. 

### FIGURE 6 : Medford’s Presentation to Allegiant Air May 2012; Source: Sixel Consulting GroupRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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AIR SERVICE NEEDS AND DEFICIENCIES IN MEDFORD

As Medford capacity has been trimmed by virtually all carriers over the last two years, its fares have risen much faster than the fares at other airports in the Pacific Northwest. In fact, for the
first time in the last deca de, Medford’s average domestic

- plus

- international average fare (excluding Allegiant) ranks as the highest of all commercially served airports in Oregon, Washington, and Idaho. As of calendar year 2011, the average one way fare in Medford jumped to $212 (se e figure 7).
The Medford non

- Allegiant average is 24% higher than the regional average of $171 each way, or an average of $41 more each way than the rest of the airports in
the three Northwest states.

Communities on par with Medford, in terms of popul ation, have much lower average fares. For example, Pasco’s average fare is $186 versus Medford’s $212 (see figure 7)

. Similarly, Eugene’s average fare is $176

– an average of 21% lower than the Medford
fare. Medford and Eugene are quite similar, in term s of their catchment area population. Eugene was a Small Community Air Service Development Grant selectee for 2010. Eugene, however,
benefitted from lower 2011 fares than Medford.

The main factor driving Medford fare increases is the loss of capacity. As noted in the air service summary section of this application, Medford’s total airline capacity, in terms of available seats,
is down 30 % since the summer of 20 09

– a loss of an average of 382 departing seats per day according to Department of Transportation statistics . Capacity dropped by an average of 70 departing seats per day in 2011. 

### FIGURE 7 : Average One Way Fares in OR, WA, and ID Source: US DOT Table OD1A, Calendar Year 2011Rogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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Fare increases , however, have not been limited to the

s pecific markets in which seats were lost. Virtually all of Medford’s top 20 markets
saw fare increases from 2010 to 2011. The average Medford top 20 market saw a fare increase of 9.9% in 2011 (see figure 8). The largest
fare increase was in the Phoenix/Mesa market, where Allegiant dropped service to
seasonal status. Medford

– Phoenix overall average fares were up more than 46% from 2010 to 2011. Other Medford
markets with fare increases of at least 20% in 2011 i nclude Las Vegas, Denver, San Diego, and New York/Newark. Only three markets saw fares fall

– and all three saw decreases of less than 5%
year over year.

Another measure of the capacity cuts that have led to higher average fares in Medford is the number of available departing seats per capita in the Medford Metropolitan Stati stical Area (MSA )

. In 2010, carriers serving the Rogue Valley International

– Medford Airport offered an average of 2.05 departing seats per year per
resident of the Medford MSA. In 

### FIGURE 8 : Average Medford Fare Change, 2011 vs. 2010 Source: US DOT OD1A

FIGURE 9 : Available Departing Seats per Capita Source: US DOT T100, US Census, Calendar Year 2011Rogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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2011 the number fell to 1.77 departing seats per capita in Medford (see figure 9). Medford had the third fewest departing seats per capita of compar able and larger airports in the Pacific
Northwest

– only Pasco and Eugene had fewer seats per resident of their MSAs. Medford had fewer available departing seats per capita than Bend/Redmond, Boise, Portland, Spokane, and Seattle/Tacoma in 2011

.

The Pacific Northwest average for available departing a irline seats per capita was 4.0 as of calendar year 2011 (see figure 9 on previous page ). Medford’s available depart ing seats per capita was less than half the regional average

– meaning Medford is underserved when compared to its surrounding region. A good corollary airport to Medford is Redmond/Bend. It had an average of
2.03 av ailable seats per capita in 2011

- 15 % above the Medford average despite a smaller population.

Another measure of the relative quality of local air service, and the air service market, is departing, or enplaned, passengers per capita. Medford is ahead of Bend/Redmond on that list for 2 011, by one one

- hundredth of a point

– meaning Medford
filled a higher percentage of its available departing seats than Bend/R edmond (see figure 10). Medford still lags behind most other major Northwest cities as of calendar year 2011 largely due
to its la ck of available seats

. While t he Northwest region enplanes 3. 3 passengers p er capita, Medford enplanes 1.48 passengers per ca pita

- 55 % behind the regional average. The reason for the disparity is the lower number of available seats per capita, illustrat ing, again, that Medford is underserved relative to its peers.

While it is clear t he Rogue Valley International

– Medford Airport is relatively underserved when compared to corollary cities in its own region , it is not easy to make the case for additional service when meeting with airline planners . The challenge for the Airport is the statistical impression of low fares caused by specific leisure fares offered only by Allegiant. Medford is actually a high fare market, as illustrated in this proposal, alt hough simple DOT data analyzed by airline planners would indicate otherwise. 

### FIGU RE 10 : Departing Passengers per Capita Source: US DOT T100, US Census, Calendar Year 2011Rogue Valley International

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Another Medford market deficiency is the seasonality of passengers. Medford sees huge seasonal swings in its passengers, with less pronounced swings in airline capacity. Looki ng at the seasonality of Medford passengers over the last three years, the market saw a summer peak between 122% and 124% of normal each summer from 2009 to 2011 (see figure 11). By contrast, the market sees a winter passenger lull between 75% and 83% of normal annualized passengers.

There are several reasons for this seasonality

– but it, generally, cannot be blamed on airline
available seats. Medford’s winter airline capacity runs about 20% below its capacity in summer

– yet the seasonality swing spans almost 50%. Medford’s winter load factor has averaged around 73% over the last three winters, while its summer load factor has averaged near 90%.

The challenge in Medford, where outdoor attractions such as Crater Lake National Park, the Rogue River, and the Siskiyou Mountains draw large numbers of visitors in the summer, is getting the word out that the region is also a wintertime destination. The Airport simply does not have sufficient funding available for counter

- seasonal marketing. One of the focuses of this proposal will be wintertime marketing to fill seats that are otherwise going empty. 

### FIGURE 11 : Seasonality of Medford Passengers Source: US DOT T100; January 2009

– December 2011Rogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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STRATEGIC MARKETING PLAN

The challenges in the Medford market are clear: an airline capacity cut of almost a third in the
last three years that has precipitated large increases in the average fare, driving local passengers away from their Airport. While there is still enough local demand to fill the market’s seats at exceptionally high fares in the summer, the rest of the year sees lag ging load factors and the threat of even greater air service cuts. The Airport must act now to ensure it grows passengers in off

peak periods.

In support of this goal, t he Airport seeks a Small Community Air Service Development Grant in order to provide essential marketing and advertising support for all carriers and service offered

. The marketing program will be targeted to two primary segments:

1) In

- market residents who may not fully understand the availability of service, the breadth
of non

- stop destinations, and the availability of seats

2) Out

- of

- market visitors who don’t fully realize all there is to do in Medford and the Rogue Valley during the off

- peak, non

- summe r months

Under the first part of this strategic plan, the Rogue Valley International

– Medford Airport plans a wide

- ranging marke ting campaign, saturating the airport catchment area in southern Oregon and northern California . The main local messages will include information about the breadth and depth of locally provided service, highlighting the availability of nine non

- stop destinations, and the connectivity beyond the major hubs. The campaign will focus on television and print

– working with the media companies who are partners in this application.

Rough drafts have been created for some the advertising slated for newspaper and television

runs. The first example is one of the newspaper ads that could potentially run as part of this campaign. The foc us of this first example is to explain the breadth of service provided at the Airport, making special mention of the number of non

- stop and one

- stop destinations and the number of airlines serving the market (see figure 12 on next page). 

## “While there is s till enough local demand to fill the market’s seats at exceptionally high fares in the summer, the rest of the year sees lagging load factors...”Rogue Valley International

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Similarly, the local television campaign would

initially focus on explaining the breadth of local air service currently available mainly by mentioning all
the available non

- stop cities by name. The specific example in this proposal includes the sound of f light attendants and gate agents announcing boarding and departure of flights to specific Medford non

stop destinations (see figure 13).

Under the second part of the strategic plan, the Airport will work with local partner agencies in this application including the Medford/Jackson County Chamber of Commerce, Southern Oregon Regional Economic Development, Inc. , and the Medford Visitors Conve ntion Bureau to 

### FIGURE 12 : Proposed Print Advertisement for the Rogue Valley International

– Medford Airport

FIGURE 13 : Pr oposed Television Advertisement Script for the Rogue Valley International

– Me d ford AirportRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 23

promote inbound travel to the region

– especially in non

- peak months, outside the summer. This campaign will focus on tourism publications in cities that can generate more off

- peak passenger demand to the Rogue Valley.

An example of an out

- of

- market print ad included in this proposal builds upon the new regional marketing campaign recently launched by the Medford Visitors Co nvention
Bureau , now called Travel Medford. The new slogan is “great performances daily,” referring to the Oregon Shakespeare Festival in Ashland

– about 20 minutes south of the Airport

– which draws more than 400,000 out

- of

- market visitors
to more than 2 60 productions each year (see figure 14). The campaign uses its slogan to talk about “performances” involving its wine industry, its outdoor attractions, and its food culture. This example lets people know they can experience all the region has to offer

– especially in the off

- peak months

– by flying through the Rogue Valley

– Medford International Airport.

The Airport has already received commitments from its community partners for $15,000 in marketing funding for this project. The Airport is adding $5,000 in new funding to the local commitment, for a total community match of $20,000. The Airport is seeking $1 5 0,000 in
federal funds to support this marketing and advertising campaign. The total project cost
fo r the campaign will be $1 7 0,000.

With the help of its community media partners, including Southern Oregon Media Group, which publishes the Medford Mail

- Tribune among other regional newspapers, and California Oregon 

### FIGURE 14 : Proposed Out

- of

- Market Print Advertisement for the Rogue Valley International

– Medford AirportRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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Broadcasting, which owns and operates the NBC affiliate for southern Oregon and northern California, a comprehensive marketing and advertising placement plan has already been developed. The plan inclu de s significant time on NBC affiliated broadcasts along with significant newspaper space throughout the region. The Airport will also be able to “piggy back” on buys from its other community partners in tourism publications, to lower the cost of
each indi vidual piece of advertising. Other types of marketing will include new website materials for ease of booking and better awarene ss of specific flight schedules.

The Airport’s proposed implementation timeline for the project assumes the Department will award Small Community Grant Funding in September 201 2 (see figure 15)

. Once the award is announced, the Airport will begin work with private marketing and advertising firms, along with its airlines, to finalize
the ca mpaign
materials and 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 October 2012

. Additionally, t he Airport w ill submit grant status reports on a quarterly basis to the Department throughout the proposed term
of the marketing and advertising program

. 

### FIGURE 15 : Marketing Program Implementation Timeline Rogue Valley International

– Medford AirportRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

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PUBLIC/PRIVATE PARTNERSHIP

The Rogue Valley International

– Medford Airport has put together a renewed public

- private partnership for this application, with new members, and a new commitment to matching funding. The Airport understands it cannot market its service alone

– it must have the partnership of many community organizations to effectively grow its passengers.

Among the partners in this application are the Southern Oregon Re gional Economic
Develo pment and the Medford/Jackson County Chamber of Com merce. These partners will play vital roles in ensuring new service is a success. New to the coalition are its community media partners, including Southern Oregon Media Group, which publishes the Medford Mail

Tribune among other regional newspapers, and California Oregon Broadcasting, which owns and operates the NBC affiliate for southern Oregon and northern California.

Specifics about each of the Airport’s partners are listed below, including their role in the effort to
retain current air service and recruit additional air service.



### Southern Oregon Regional Economic Development, Inc.

Southern Oregon Regional Economic Development, Inc. (SOREDI) is the primary economic development agency for Jackson Count y and the rest of southern Oregon. Covering a wide geographic region, SOREDI assists local and relocating companies with a variety of business resources and services including business attraction and creation; business retention and expansion; site locatio n, commercial property acquisition, and building permits; international
trade
, and import and export issues.



### Medford/Jackson County Chamber of Commerce

The Medford/Jackson County Chamber of Commerce is a totally independent non

- profit corporation (not affiliated with government or any other agency) . I t is uniquely able to serve the needs of its southern Oregon members. Over 1,500 small and large businesses collectively work together to achieve this goal by promoting the community, providing networking opportunities and representing business issues through lobbying and political action.

The Chamber is the number one business resource citizens look to in the community. The area'sRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 26

economic well

- being benefits from the work performed by The Chamber. The Chamber seek s to have a major impact on business, income and future growth of the Medford/Jackson County

area.



### Medford Visitor Con vention Bureau /Travel Medford

The Medford Visitor Convention Bureau works to promote the Rogue Valley throughout the
countr y. The Bureau spends much time and money publicizing the region’s outdoor activities, unique festivals, exciting events and spectacular scenery. The Bureau works with the Airport to spur additional inbound travel to southern Oregon.



### Southern Oregon Media Group

The Southern Oregon Media Group owns and publishes newspapers and magazines all over the Rogue Valley. In all, it publishes on nine platforms, both on

- line and in print. Its major newspapers, the Medford Mail Tribune and the Ashland Daily Ti dings have circulation of tens of
thousands of local households.



### California Oregon Broadcasting

California Oregon Broadcasting
, Incorporated (or COBi for short) is a family

- owned broadcast franchise based in Medford, Oregon

. COBi continues to be one of the only remaining family

owned television companies in the country. It is the longest, continuously independent broadcast group in the West and one of the thr ee oldest in the country. Viewers in 12 counties in Oregon and Californi a receive programming from Channels 5 and 2. The stations hold a number of television "firsts" in their over 50 year history. KOBI was the first VHF television station in Oregon. It was the first TV station in Medford to offer local color programming, the first station to operate in stereo, the first Medford station to employ electronic news gathering technology, and was the first Medford station with statewide microwave news coverage.Rogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 27

LEGAL SPONSOR

The Jackson County/ Rogue Valley International

– Medford Airport is the legal sponsor responsible for administering the program. The Jackson County/ Rogue Valley International

– Medford Airport is a government entity.

Jackson County/Rogue Valley International

– Medford Airport 1000 Terminal Loop Park way, Suite 201 Medford, Oregon 97504 Bern Case, AAE , Airport Director 541.776.7222 CaseBE@jacksoncounty.orgRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 28

LETTER S OF SUPPORTRogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 29Rogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 30Rogue Valley International

- Medford Airport • Small Community Air Service Development Grant Proposal • June 2012 

## 31

CONCLUSION

Medford ranks as one of the most underserved markets in the Pacific Northwest. In 2011, Medford had just 1.77 available departing airline seats per capita of its Metropolitan Statistical Area (MSA). The Pacific Northwest average number of available departing a irline seats per capita was 4.0 in 201 1 . Medford’s available departing seats per c apita were less than half the
average

– and less than other, similar airports in the region, such as Redmond/Bend, Boise, and Spokane

.

The result of the limited number of available seats in the market is hig her than average fares. In
2011 , Medford has the dubious honor of having the highest network carrier average fare in the
Northwest states of Oregon, Washingt on, and Idaho

– at $212 each way. One reason for the high fares is that a irlines hav e reduced Medford capacity by 30 % since 2009 . The result: they now have strong control over the amount they can charge passengers for each seat.

Medford is at the center of the quickly growing Rogue Valley region of southern Oregon and northern California. The two hour Medford Airport catchment area has added more than 200,000 new
residents in the last decade

– growing by a third in that time. Po pulation growth has helped the Airport add new airline service. T he Rogue Valley International

– Medford Airport has recruited

seven new routes in the last 15 years. But the current fare environment is driving down load factors and suppressing traffic. The Airport seeks to better market its available seats to help
reverse this trend.

The Airport has never been a DOT recipient of a Small Community Air Service Development Grant. Medford now seeks the same kind of support that has been afforded to other N orthwest cities such as Eugene, Idaho Falls, North Bend/Coos Bay, Kalispell, and Helena. The Airport will be an excellent steward of SCASD Grant funding, as it works to better market air service throughout its catchment area

. 

## “...the current fare environment is driving down load factors and suppressing traffic. The Airport seeks to better mar ket its available seats...”