## Proposal under the Small Community Air Service Development Program Docket DOT

- OST

- 2013

- 0120

Town of Islip/Long Island MacArthur Airport

DUNS: 14

- 351

- 9200

- 0000 Congressional Code: NY

- 02

Sponsor:
Town of Islip, New York
Operator of Long Island MacArthur Airport
Tom Croci, Town Supervisor
Robert Schaefer, Airport Commissioner

### APPLICATION UNDER
SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM
DOCKET DOT

- OST

- 201 3

- 0120

SUMMARY INFORMATION (Appendix C)

All applicants must submit this Summary Information schedule, as the application coversheet , a completed standard form SF424 and the full application proposal on www.grants.gov

. For your preparation convenience, this Summary Information schedule is located at http://www.dot.gov/policy/aviation

- policy/small

- community

- rural

- air

- service/SCASDP

A. P ROVIDE THE LEGAL SPO NSOR AND ITS DUN AND BRADSTREET (D&B) DATA UNIVERSAL NUMBE RING S YSTEM (DUNS) NUMBER , INCLUDING +4, EMPLOYEE IDENTIFICAT ION NUMBER (EIN) OR TAX ID
. Legal Sponsor Name: Long Island Macarthur Airport/ Town of Islip

DUNS Number: 14

- 351

- 9200

- 0000 EIN/Tax ID: 11

- 6001931

B. L IST THE N AME OF THE COMMUNITY OR CONSORTIUM OF COMMUN ITIES APPLYING :
1

. _T OWN OF I SLIP

______________________________________ 2._____________________

_______________________________ 3.____________________________________________________
4.____________________________________________________

C

. P ROVIDE THE FULL AIRP ORT NAME AND 3

- L ETTER IATA A IRPORT C ODE FOR THE APPLICAN T ( S ) AIRPORT ( S ) (O NLY PROVIDE CODES FO R THE

AIRPORT ( S ) THAT ARE ACTUALLY SE EKING SERVICE ). 1. Long Island Macarthur Airport (ISP) 2

. 3

. 4

.D. L IST THE 2

- DIGIT CONGRESSIONAL DISTRICT CODE APPLIC ABLE TO THE SPONSORI NG ORGANIZATION , AND IF A CONSORTIUM , TO EACH

PARTICIPATING COMMUN ITY
. 1. NY

- 02 2

. 3

. 4

.

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



### Not a Consortium Interstate Consortium Intrastate Consortium

Community now receives subsidized Essential Air Service Community (or Consortium member) previously received a Small Community Air Service Development Program Grant
If previous recipient: Year of g rant (s) :

F

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

PUBLIC PRIVATE

1. Town of Islip 1.

2. 2.

3. 3.

4. 4.

5. 5.

G

. P ROJECT P ROPOSAL : ( CHECK ALL THAT APPLY ) Marketing Upgrade Aircraft New Route
Travel Bank Service Restoration Subsidy Surface Transportation Regional Service Revenue Guarantee
Launch New Carrier Start

- up Cost Offset First Service Study Secure Additional Service Other (explain below)



### H

. E XISTING 

### L ANDING 

### A IDS AT 

### L OCAL 

### A IRPORT 

### :
Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)I

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

L INE D ESCRIPTION S UB T OTAL T OTAL A MOUNT
1 Federal amount requested $ 750,000

2 State cash financial contribution $

- Local cash financial contribution
3a Airport cash funds $ 100,000

3b Non

- airport cash funds $

- 3 Total local cash funds ( 3a + 3b ) $ 100,000

4 TOTAL CASH FUNDING ( 1+2+3 ) $ 850,000

In

- K ind contribution
5 a Airport In

- Kind contribution ** $ 200,000
5b Other In

- Kind contribution ** $ 100,000

5 TOTAL IN

- KIND CONTRIBUTION ( 5

a + 5 b ) $ 300,000

6 TOTAL PROJECT COST ( 4+ 5 ) $ 1,150,000

J . IN

- KIND CONTRIBUTIONS**

For funds in lines 5a (Airport In

- Kind contribution) and 5b (Other In

- Kind contribution), please describe the source(s) of fund(s) and the value ($) of each. 5a. $ 200,000 figure based on annual value of waiver of landing fees and terminal rent for two new da ily narrow body B737/A320 type aircraft operating from ISP on routes that are also operated from LGA or JFK by the same
airline. 5b. $ 100,000 for regional marketing and awareness provided by the Town of Islip outside of the enterprise budget
of the air port.K

. Is This Application Subject To Review By St ate Under Executive Order 12372 Process?



### a. This application was made available to the s tate under the Executive Order 12372 Process for review on (date) _____________.
b. Program is subject to E.O. 12372, but has not been selected by the s tate for review.

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

L. Is The Applicant Delinquent On Any Federal Debt? (If “Yes”, Provide Explanation)

No Yes (explain)

_____________________ ________________________ _______________________________________________________

________________________________________________________

END OF SUMMARY INFORMATIONIntroduction

Long Island MacArthur Airport (ISP)
, a small hub airport which is currently ranked No. 103 out of 560 airports in terms of passenger enplanements according to the Federal Aviation Administration’s (FAA) 2012 calculations, is seeking financial support in the amount of $ 7 50,000 through its application for a grant from Small Community Air Service Development Program (SCASDP). Like many small hub airports, MacArthur Airport has seen enplanement totals drop over the last few years despite a location that includes a catchment area of 1.8 million people. The loss of passenger traffic from 2007

- 20 12 was greater at Long Island MacArthur Airport (46. 4% ) than any other small hub facility in the nation.

The Town of Islip, operator of the airport , has been pursuing a multi

- phase air service development program at the airport since 2010. Prior cash investments since 2010 made directly by the Town and the Airport have included over $500,000 in marketing, promotion and awareness programs, and have
p roduced new service to Washington, DC (DCA) from USAirways, and to Boston (BOS) from PenAir.

The funding from this grant would be used to develop additional service at ISP in a way that begins the next phase of air service development at ISP. The Region al Planning Association report commissioned by the Port Authority (PANYNJ) identified ISP as the primary regional airport that can provide immediate benefits to the NY region. Further air service development at ISP will provide the following benefits to
t he region:

1. More efficient use of airspace

- The RPA report directly ties the ability of the NY region to meet the needs of the economic growth to its airport capacity. Increasing capacity at LGA and JFK is critical to meeting this demand, and runway capaci ty and airspace capacity cannot be added quickly. Passengers from the Long Island catchment area that are now driving to LGA or JFK can be matched with air service at ISP within the same airline hub system. This matches the catchment area demand with the flight capacity on Long Island plus opens up capacity at LGA and JFK for the growth in demand there as well. ISP is a key component for near

- term capacity increases at JFK and LGA, and this grant will enable this phase of the ISP air service development
to commence.

2. More efficient use of existing airport infrastructure

- Similarly to the airspace, the addition of infrastructure capacity is going to be a long and expensive process. Based on ISP leakage studies, redirecting the Long Island catchment area tr affic to ISP through increased and improved air service could open up as much as 15% more capacity at LGA alone for growth in air service there, which is needed to meet the demands of the economic growth of the NY region.

3. More efficient airline operations and marketing

- The airlines have completed major mergers and operational changes over the past five years, reducing capacity and costs as part of their return to profitability. The Airport has presented to the airlines that the next step in this operation al efficiency will be to consider ISP as part of a co

- terminal operation with the NY airports. Long Island is in the same media market as LGA and JFK, so marketing efforts for air service are shared. Airport costs per passenger for the overall NY airport market will be averaged downwhen airlines add the lower airport costs at ISP ($3.50/enplaned passenger) to the higher costs at JFK ($25/enplaned passenger) and LGA ($15/enplaned passengers).

4. Positive environmental impacts from passengers making shorter t rips to the airport

- By better matching air service at ISP with its catchment area and providing benefits to the airlines and airport operators to facilitate this new service, passengers from the ISP catchment area that are now driving to JFK and LGA will have an opportunity to make shorter trips to ISP. This will reduce the environmental footprints of these passengers with the positive results accruing to the region.

Background

After generating an enplanement total of 1,167,515 in 2007, the number dropped steadily to just 667,573 in 2012 as reported last year to the FAA from MacArthur Airport’s only two carriers

— Southwest Airlines and US Airways Express. A community with an airport that has the potential to serve nearly two million residents of Nassau and S uffolk County

— the catchme nt area of MacArthur Airport

— has seen its choices dwindle and airline costs rise. In fact, a boom in passenger traffic at Long Island MacArthur Airport earlier last decade was due in large part because of cheaper fares and excellen t service choices. A consistent rise in ticket prices coupled with the challenge to the national economy has only complicated the issues for the airport’s management.

Long Island MacArthur Airport believes an approach involving complementary service betwee n ISP and the NY region’s airports at LGA and JFK is the key to regaining the type of traffic that had the Airport just shy of ranking among the t op 85 US airports only a few years ago. Long Island MacArthur Airport isn’t seeking to expand and compete wit h the much bigger New York City airports, but an increase in air service from the current level of 25 flights back to the 40 or 50 daily flights that existed less than 10 years ago would provide the benefits listed above for the region’s travelers.

To begi n the process of developing complimentary new commercial air service, the To wn of Islip implemented an Air S ervice Development Incentive Program at the airport effective March 1, 2012 through February 29, 2016 (See Appendix A), and the first 18 months of t he program have helped advance commercial service by two destinations and three flights per day. USAirways Expres s expanded its service in March 2012 to include two daily, nonstop flights to Washington D.C., and PenAir began taking advantage of the Incenti ve Program effective July 25 , 2013 with two daily round

- trip flights to Boston, a long

- underserved market for the region, and one that previously performed well for Continental Airlines.

An example of the target market for air service that this grant woul d be used for is ISP

- Chicago. Connecting service to Chicago represented 70,960 passengers in 2012, and an additional 60 ,760 used MacArthur Airport on the way to Chicago as a destination

. Updated research on the ISP

- Chicago route conducted on behalf of t he airport demonstrates that adding three daily, nonstop flights to Chicago would net an increase in passenger enplanements at ISP of 122,841
, with more than half (72,786) forecasted as Chicago O&D passengers and the balance (50,055) continuing on to a western destination.According to surveys conducted by the New York State Labor Department in 2011, the Long Island economy has a diverse base of industries particularly in defense, aerospace, biotech, healthcare and
energy, a nd the airport’s catchment area has a median income ranging from $79,000

- $123,000, according to the Census Bureau’s 2011 American Community Survey. The passenger traffic is out there, the airport just needs to continue its efforts with air service developm ent and awareness.

# Small Community Air Service Development Grant Town of Islip, New York

July 26, 2013

### 1 

# Contents

 Description of Air Service Needs/Deficiencies

 Strategic Plan

 Description of Funding Needed to Implement the Project

 Designation of Legal Sponsor

### 2 

# Description of Air Service Needs/Deficiencies

### 3 

# Passengers in MacArthur’s catchment area are using alternative airports to travel to both leisure and business destinations
Top 10 MacArthur Market Area Passengers via Kennedy and LaGuardia YE 1Q 2011 

## Via JFK **Via LGA**

Leaked Percent Leaked Percent Rank City Psgrs of Total Rank City Psgrs of Total

1 Orlando 333,789 13.5% 1 Atlanta 179,519 8.9% 2 Los Angeles 242,057 9.8% 2 Orlando 122,280 6.1% 3 Las Vegas 198,871 8.0% 3 Fort Lauderdale 110,222 5.5% 4 Phoenix 145,255 5.9% 4 Chicago 108,310 5.4% 5 San Francisco 118,539 4.8% 5 Denver 99,426 4.9% 6 Fort Lauderdale 118,138 4.8% 6 Washington 91,344 4.5% 7 Tampa 107,618 4.3% 7 Charlotte 89,519 4.4% 8 West Palm Beach 94,054 3.8% 8 West Palm Beach 79,527 3.9% 9 Seattle/Tacoma 92,864 3.8% 9 Tampa 64,565 3.2% 10 Buffalo 82,490 3.3% 10 Dallas/Fort Worth 64,536 3.2%

Total Via JFK 2,475,136 100.0% Total Via LGA 2,016,290 100.0%

Source: Travelport, MIDT Data, YE 1Q 2011.

### 4 

# Passengers in MacArthur’s catchment area are using alternative airports to travel to both leisure and business destinations

Top 10 MacArthur Market Area Passengers via Kennedy and LaGuardia YE 1Q 2011 

## Via JFK **Via LGA**

Leaked Percent Leaked Percent Rank City Psgrs of Total Rank City Psgrs of Total

1 Orlando 333,789 13.5% 1 Atlanta 179,519 8.9% 2 Los Angeles 242,057 9.8% 2 Orlando 122,280 6.1% 3 Las Vegas 198,871 8.0% 3 Fort Lauderdale 110,222 5.5% 4 Phoenix 145,255 5.9% 4 Chicago 108,310 5.4% 5 San Francisco 118,539 4.8% 5 Denver 99,426 4.9% 6 Fort Lauderdale 118,138 4.8% 6 Washington 91,344 4.5% 7 Tampa 107,618 4.3% 7 Charlotte 89,519 4.4% 8 West Palm Beach 94,054 3.8% 8 West Palm Beach 79,527 3.9% 9 Seattle/Tacoma 92,864 3.8% 9 Tampa 64,565 3.2% 10 Buffalo 82,490 3.3% 10 Dallas/Fort Worth 64,536 3.2%

Total Via JFK 2,475,136 100.0% Total Via LGA 2,016,290 100.0%

Source: Travelport, MIDT Data, YE 1Q 2011.

### 5 

# After years of steady fares since 2000, average fares have increased 6.7% annually since 2007

MacArthur’s Domestic O&D Passenger and Average Fare CY 2000

– YE 3Q 2012

Source: USDOT, O&D Survey O&D Passengers (thousands) Avg. Fare

0 500 1,000 1,500 2,000 2,500

$80 $90 $100 $110 $120 $130 $140 $150



### 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 YE 3Q 12 

## Average **Fare**

Avg. Annual Growth (Fares)

2000

– YE 3Q 2012 2.7%
2005

– YE 3Q 2012 5.2%

### 6 

# Summary of Air Service Issues

 ISP has lost 46.6% of its passenger traffic from 2007 through 2012, the largest loss among small hub airports in the US

 ISP has seen air fares increasing at a 7% annual rate as the air service at the airport has decreased.

 ISP is leaking almost 75% of its catchment area to LGA and JFK at a time where LGA and JFK are capacity constrained with no immediate infrastructure or airspace improvements in sight.



# ISP is seeking to continue its efforts to develop air service that is complimentary to air service at LGA and JFK and that provides benefits to the airlines, the passengers, the region’s airport operators and the region’s economy.

### 7 

# Strategic Plan

### 8 

# Strategic Plan

 The funding from this grant would be used to develop additional service at ISP in a way that begins the next phase of air service development at ISP. The Regional Planning Association report commissioned by the Port Authority (PANYNJ) identified ISP as the primary regional airport that can provide immediate benefits to the NY region. Further air service development at ISP will provide the following benefits to the region:

 More efficient use of airspace

- The RPA report directly ties the ability of the NY region to meet the needs of the economic growth to its airport capacity. Increasing capacity at LGA and JFK is critical to meeting this demand, and runway capacity and airspace capacity cannot be added quickly. Passengers from the Long Island catchment area that are now driving to LGA or JFK can be matched with air service at ISP within the same airline hub system. This matches the catchment area demand with the flight capacity on Long Island plus opens up capacity at LGA and JFK for the growth in demand there as well. ISP is a key component for near

term capacity increases at JFK and LGA, and this grant will enable this phase of the ISP air service development to commence

.

### 9 

# Strategic Plan

 More efficient use of existing airport infrastructure

- Similarly to the airspace, the addition of infrastructure capacity is going to be a long and expensive process. Based on ISP leakage studies, redirecting the Long Island catchment area traffic to ISP through increased and improved air service could open up as much as 15% more capacity at LGA alone for growth in air service there, which is needed to meet the demands of the economic growth of the NY region.

 More efficient airline operations and marketing

- The airlines have completed major mergers and operational changes over the past five years, reducing capacity and costs as part of their return to profitability. The Airport has presented to the airlines that the next step in this operational efficiency will be to consider ISP as part of a co

- terminal operation with the NY airports. Long Island is in the same media market as LGA and JFK, so marketing efforts for air service are shared. Airport costs per passenger for the overall NY airport market will be averaged down when airlines add the lower airport costs at ISP ($3.50/enplaned passenger) to the higher costs at JFK ($25/enplaned passenger) and LGA ($15/enplaned passengers).

### 10 

# Strategic Plan

 Positive environmental impacts from passengers making shorter trips to the airport

- By better matching air service at ISP with its catchment area and providing benefits to the airlines and airport operators to facilitate this new service, passengers from the ISP catchment area that are now driving to JFK and LGA will have an opportunity to make shorter trips to ISP. This will reduce the environmental footprints of these passengers with the positive results accruing to the region.

### 11 

# Description of Funding

### 12 DESCRIPTION OF PROJECT FUNDING

L INE D ESCRIPTION S UB T OTAL T OTAL A MOUNT
1 Federal amount requested $ 750,000

2 State cash financial contribution $

- Local cash financial contribution
3a Airport cash funds $ 100,000

3b Non

- airport cash funds $

- 3 Total local cash funds ( 3a + 3b ) $ 100,000

4 TOTAL CASH FUNDING ( 1+2+3 ) $ 850,000

In

- K ind contribution
5 a Airport In

- Kind contribution ** $ 200,000
5b Other In

- Kind contribution ** $ 100,000

5 TOTAL IN

- KIND CONTRIBUTION ( 5

a + 5 b ) $ 300,000

6 TOTAL PROJECT COST ( 4+ 5 ) $ 1,150,000

J . IN

- KIND CONTRIBUTIONS**
For funds in lines 5a (Airport In

- Kind contribution) and 5b (Other In

- Kind contribution), please describe the source(s) of fund(s) and the value ($) of each. 5a. $ 200,000 figure based on annual value of waiver of landing fees and terminal rent for two new daily narrow body B737/A320 type aircraft operating from ISP on routes that are also operated from LGA or JFK by the same
airline. 5b. $ 100,000 for regional marketing and awareness provi ded by the Town of Islip outside of the enterprise budget of the airport.

### 13 

# Designation of Legal Sponsor

### 14 

# Designation of Legal Sponsor

 Town of Islip, New York

 Department of Aviation

 Mr. Robert Schaefer, Airport Commissioner

 rschaefer@townofislip

- ny.gov