## 1 APPLICATION UNDER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST

- 201 3

- 0120

SUMMARY INFORMATION

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/SCA SDP

A. P ROVIDE THE LEGAL SPO NSOR AND ITS DUN AND BRADSTREET 

## (D&B) DATA UNIVERSAL

NUMBERING SYSTEM 

## (DUNS) NUMBER 

## , INCLUDING 

## +4, EMPLOYEE IDENTIFICAT ION NUMBER 

## (EIN) OR TAX ID



## . Legal Sponsor Name: Friedman Memorial Airport Authority

DUNS Number: 155993603

EIN/Tax ID: 820474066

B. L IST THE 

## N AME OF THE COMMUNITY OR CONSORTIUM OF COM MUNITIES APPLYING 

## :
1. S UN 

## V ALLEY 

## /K ETCHUM 

## , I DAHO



## 2.

3.

4.

C

. P ROVIDE THE FULL AIRP ORT NAME AND 

## 3

- L ETTER 

## IATA A IRPORT 

## C ODE FOR THE

APPLICANT 

## ( S 

## ) AIRPORT 

## ( S 

## ) (O NLY PROVIDE CODES FO R THE AIRPORT 

## ( S 

## ) THAT ARE ACTUALLY

SEEKING SERVICE 

## ).

1. Friedman Memorial Airport ( SUN ) 2

. 3

. 4

.

## 2 D. L IST THE 

## 2

- DIGIT CONGRESSIONAL DISTRICT CODE APPLIC ABLE TO THE SPONSORI NG

ORGANIZATION 

## , AND IF A CONSORTIUM 

## , TO EACH PARTICIPATIN G COMMUNITY



## . 1. ID

- 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): 2002

F

. P UBLIC 

## /P RIVATE 

## P ARTNERSHIPS 

## : (L IST 

## O RGANIZATION NAMES 

## )

PUBLIC PRIVATE

1. Friedman Memorial Airport Authority 1. Fly Sun Valley Alliance

2. 2. Sun Valley Resort

3. 3. Sun Valley Marketing Alliance

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 : )

## 3 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 $500,000

2 State cash financial contribution $0
Local cash financial contribution

3a Airport cash funds $34,000

3b Non

- airport cash funds $175 ,000

3 Total local cash funds ( 3a + 3b ) $209 ,000

4 TOTAL CASH FUNDING ( 1+2+3 ) $709 ,000

In

- Kind contribution

5a Airport In

- Kind contribution** $ 25 ,000

5b Other In

- Kind contribution** $ 5 ,000

5 TOTAL IN

- KIND CONTRIBUTION
( 5a + 5b ) $ 30 ,000

6 TOTAL PROJECT COST ( 4+5 ) $ 7 3 9 ,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: Fee waivers ($18,000) and g rant administration ($7,000)

5b: S ervice monitoring ($5 ,000 )

## 4 K. I S 

## T HIS 

## A PPLICATION 

## S UBJECT 

## T O 

## R EVIEW 

## B Y 

## S TATE 

## U NDER 

## E XECUTIVE 

## O RDER 

## 12372

P ROCESS 

## ?

a. This application was made available to the state under the Executive Order 12372
Process for review on (date) _____________.

b. Program is subject to E.O. 12372, but has not been selected by the state for review.

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

L. I S 

## T HE 

## A PPLICANT 

## D ELINQUENT 

## O N 

## A NY 

## F EDERAL 

## D EBT 

## ? (I F 

## “Y E S 

## ”, P ROVIDE



## E XPLANATION 

## )

No Yes (explain)

______________________________________________________________________________

______________________________________________________________________________Legal sponsor: Friedman Memorial Airport Authority

Contact: Rick Baird, Airport Manager Friedman Memorial Airport PO Box 929 Hailey, Idaho 83333

(208) 788-4956 rick@flyfma.com 

# Application Under the Small Community Air Service Development Program

Docket #: DOT-OST-2013-0120



# Friedman Memorial Airport Hailey, IdahoApplication Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityTable of Contents

Prepared by 

# Table of Contents

Page

Section 1. Application Highlights ............................................... 1 Underserved Co mmunity ........................................................................ 1 Significantly Higher Fa res ....................................................................... 2 Community Involvem ent and S upport ..................................................... 2 Demonstrated Ability to Implement Project ............................................. 2 Far Reaching Benefits ............................................................................ 2


### Section 2. Air Service Environment ........................................... 3 Isolated Central Idaho Catchment Area .................................................. 3 Tourism - the Foundation of the Local Economy

..................................... 4 Local Global Business ............................................................................ 5 

### Section 3. Air Service – Existing and Historical ....................... 6 Existing Air Service ................................................................................. 6 Historical Ai r Service ............................................................................... 7 Past Air Service De velopment Efforts ..................................................... 8


### Section 4. Air Service Needs and Deficiencies ......................... 9 Underserved Resort Destination ............................................................. 9 Excessive Ai rfares ................................................................................ 11 

### Section 5. Strategic Plan – Air Service .................................... 12 Project Goal .......................................................................................... 12 Proposed Air Service ............................................................................ 12 Detailed Market Analysis ...................................................................... 12 Alternate Plan ....................................................................................... 14 Previous Grant Recipient - New Project and Goals .............................. 14 

### Section 6. Strategic Plan – Implementation and Funding ........................................................................... 15 Public-Private Partne rship..................................................................... 15 Incentive and S upport P lan ................................................................... 15 Project Continuation and Sustai nability ................................................. 17 Strategic Plan Funding .......................................................................... 17 

### Section 7. Schedule and Monitoring ........................................ 18 Strategic Plan Sched ule and Mile stones ............................................... 18 Monitoring Program .............................................................................. 19 

### Appendix A. Airline and Community Letters of Support ....... 20Application Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityApplication Highlights 1



# Section 1. Application Highlights

his Small Community Air Service Development Program (SCASDP) grant application for Friedman Memorial Ai rport (SUN) meets the criteria of
Docket DOT-OST-2013-0120. Friedman Me morial Airport Authority, the grant sponsor, is requesting $500,000 in federal assistance to implement a $739,000 air service initiative. The goal of this project is to increase eastern connectivity through an additional nonstop hub providing much needed air service to key eastern airports not curr ently served through Salt Lake City such as Washington-Dulles (IAD), New York (L GA), Cleveland (CLE), Pittsburgh (PIT), Columbus (CMH) and others plus provide additional frequencies to current
destinations as well as lower airfares to top eastern destinations. In 2002, the City of Hailey, ID on behalf of SUN received a SCASDP grant to help secure air service to Los Angeles that was succe ssful and continues today. The proposed project’s goals differ from the prev ious grant application and award.



### Underserved Community

At an elevation of 5,317 feet with a single 7,550 foot runway, SUN is operationally challenged. The airfield is located in a valley with mountainous terrain on both sides of the runway. Historically, this has restrained SUN’s air service opportunities. Current service is limited to 30-seat Embraer Brasilia 120 aircraft operated by SkyWest Airlines to Delta Air Lines’ Salt Lake City hub and 76-seat Bombardier Q400 service operated by Horizon Air to Seattle and Los Angeles seasonally. Recently the FAA appr oved regional jet operations at SUN. This development has dramatically increased SUN’s air service opportunities.

The Sun Valley area is isolated from alte rnate airports. Boise Airport, the nearest small hub airport, is 150-plus miles to the west or an estimated 2.4 hour drive in good weather conditions. The nearest medium or large hub airport is Salt Lake City, an estimated 285 miles distant or over a four-hour drive.

Service has been declining in the SUN market. Since 2003, SUN’s seats have decreased by 53 percent with the loss of Boise and Oakland service and the significant reduction in annual departures to Los Angeles, Salt Lake City, and Seattle. Compared to other summer and winter resort destinations such as Aspen, Eagle/Vail, and Jackson Hole, SUN is significantly underserved with the number of available seats and nonstop des tinations considerably lower than the other resort destinations putting the Su n Valley area at a serious disadvantage. 

# T This section contains:



###  Project goals



###  Description of the

Strategic Plan



###  Highlights of the grant

applicationApplication Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityApplication Highlights 2



### Significantly Higher Fares

With limited air service, local residents and visitors are subject to significantly higher fares. Over the last five years, SUN’s average fares have far exceeded other airports within the state of Idaho, the state average, region average, and national average. In 2012, SUN’s one-way, domestic airfares exceeded the state of Idaho average by $25, the Northwest region by $34 and the US average by $29. On a market-by-market basis, compared to Boise and Twin Falls, SUN’s average fare differentials exceed $100 o ne-way in four of the top 10 eastern markets compared to Boise and five of the top 10 markets compared to Twin Falls. Improved eastern connectivity will help to alleviate these high fares.



### Community Involvement and Support

Friedman Memorial Airport Authority, the Fly Sun Valley Alliance, the Sun Valley Marketing Alliance and the Sun Valley Resort have formed a public-private partnership in support of this applicat ion. Cooperatively, these organizations have a history of successful initiatives wi th broad support from the community. To support this air service initiative, the Airport Authority and community will fund 32 percent of the proposed $739,000 Strategi c Plan. Non-airport revenue sources will fund 25 percent ($175,000) of t he $709,000 cash requirement. This is a strong commitment by the local community to improve service to
eastern destinations.



### Demonstrated Ability to Implement Project

History indicates that the public-priv ate partnership and local businesses have the ability to successfully implement th is project. In 2002, with the help of a SCASDP grant, the community enticed Horizon Air/Alaska Airlines to enter the Los Angeles market. The service was successful, and Alaska continues to serve
the market over a decade later. As show n, this partnership has been successful in past air service efforts and is dedicated to the success of this initiative.



### Far Reaching Benefits

Due to the presence of Sun Valley Reso rt the economy of the Sun Valley/Wood River Valley is largely based on tourism. Tourism is the economic backbone of the region. The area is home to Sawtooth National Recreation area, Silver Creek (world-class fly fishing), and Craters of the Moon National Monument.

In addition to the travel requirements of the tourist industry, local businesses and
residents need to be connected to the national air transportation system. Multiple global companies are headquartered in the Sun Valley area. These companies among others rely heavily on air service to SUN to conduct business. In addition, many local area residents commute by air to jobs outside the area. 

### Cooperatively, the public-private partnership has a history of successful initiatives with broad support from the community.Application Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityAir Service Environment 3



# Section 2. Air Service Environment

he Sun Valley area is a year-round, world-renowned destination for outdoor and cultural enthusiasts, with strong summer, fall and winter visitation. It is home to Sun Valley, t he nation’s first destination ski resort developed in 1936, and provides world-cl ass skiing as well as numerous outdoor pursuits. This section demonstrates the community’s economic dependence on commercial air service at the local airport.



### Isolated Central Idaho Catchment Area

SUN is located in Hailey, Idaho, 12 miles south of Ketchum/Sun Valley. The counties of Camas and Blaine, Idaho are co nsidered SUN’s primary service area.
Exhibit 2.1 shows the geography of the Sun Va lley area located in the Wood River Valley and encompasses a large po rtion of Central Idaho. The towns of Hailey and Bellevue lie 11 to 14 miles to the south of Sun Valley and are home to the majority of the residents of Blaine County. To the north lies the 750,000-acre Sawtooth National Recreation Area.

Within a 25-mile radius is a populati on of 21,990, increasing to 37,495 within a 50-mile radius (source: ESRI Business Analyst Online). The primary SUN user, however, are visitors with 60 percent of SUN passengers visiting the Sun Valley area. An additional 17 percent are second homeowners.

EXHIBIT 2.1 SUN ISOLATED LOCATION

Despite the shortage of service offered at SUN, Sun Valley area residents and tourists rely on it for commercial air service due to the long travel time to competing airports (as shown in Table 2.1 , next page). The 151-mile drive to 

# T This section contains: Description of the Sun Valley community in
relation to air service

SUNApplication Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityAir Service Environment 4

Boise Airport can take an estimated 2.4 hours to travel not considering poor winter travel conditions or congestion. Twin Falls’ Magic Valley Regional Airport to/from the Sun Valley resort area takes ar ound 1.6 hours to drive, irrespective of winter driving conditions. Pocatello and I daho Falls’ airports would each take 2.5 plus hours to access.

While Boise offers low-fare service by airlines such as Southwest Airlines and Allegiant Air, Boise is classified as a small hub airport and has limited
service. The nearest medium or large hub airport is Salt Lake City, an estimated 285 miles
distant or over a four-hour drive.

Considering drive distances, SUN is the only convenient connection for visitors and local outbound passengers to the national air transportation network. Convenient air access to this destination resort community is crucial for the health of its tourist-based economy and to local non-tourism global businesses.



### Tourism - the Foundation of the Local Economy

Due to the presence of Sun Valley Reso rt the economy of the Sun Valley/Wood River Valley is largely based on tourism. Tourism is the economic backbone of the region. SUN provides access to all of central Idaho and is the gateway to the Sawtooth National Recreation area, Silver Creek (world-class fly fishing), Craters of the Moon National Monument, Salmon Ri ver area, and the Frank Church-River
of No Return Wilderness area. Additio nal information on winter and summer
tourism follows.



### Winter Tourism

In the winter, the Sun Valley area offers world-class Alpine skiing on two mountains. We also offer world-class Nordic skiing and are an official US Olympic/Paralympic training site. The area offers ice skating, sleigh rides, snowshoeing, hot springs, snowmobiling, galleries, theatre, and more. Sun Valley was rated as the #7 US Ski Resort by SKI Magazine and was in the Top 10 Ski Resorts by Men’s Fitness. Signature wi nter events include: Holiday Winter Wonderland in December, the Sun Valley No rdic Festival in February, and the Sun Valley Film Festival and Solfest in March.



### Summer Tourism

In the summer, the Sun Valley area continues to offer unrivaled recreation. Visitors enjoy four golf courses, biking, hiking, climbing, whitewater rafting, fly fishing, horseback riding, and other out door recreation. In addition, the Sun TABLE 2.1 DRIVE TIME TO ALTERNATE AIRPORTS

AIRPORT RESORT AREA TO: MILES DRIVE TIME SUN 12 0.3 hrs Twin Falls (TWF) 97 1.6 hrs Boise (BOI) 151 2.4 hrs Idaho Falls (IDA) 156 2.5 hrs Pocatello (PIH) 169 2.7 hrs



### Due to the presence of the Sun Valley Resort,

the economy of the Sun Valley/Wood River Valley is largely based on tourism.Application Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityAir Service Environment 5

Valley area offers world-class arts and culture with summer performances of the Sun Valley Summer Symphony and top galleries, concerts, theatre and other events. The Sun Valley area has bee n named one of the Top 10 Adventure Towns by National Geo Adventure an d one of the Top 75 Resort Golf Destinations by Golf Digest. Signat ure summer and fall events include:

 Sun Valley Summer Symphony

 Ride Sun Valley Bike Festival

 Sun Valley Summer Ice Show

 Sun Valley Writers Conference

 Sun Valley Arts Festival  Sun Valley Wine Auction

 Sun Valley Harvest Festival

 Sun Valley Wellness Festival

 Wagon Days

 Trailing of the Sheep Festival



### Local Global Business

In addition to the travel requirements of the tourist industry, local residents need to be connected to the national air transportation system. The Sun Valley area attracts a highly skilled and well educated labor force. There are a significant
number of veteran rehabilitation facilities dependent on air service. In addition, multiple companies are headquartered in the Sun Valley area including:

 POWER Engineers is a global consulting, engineering firm with a worldwide client base and 33 US offices, three international offices, and 1,700 employees (200-plus in the Sun Valley area).

 Smith Sport Optics has 75 employees, with 40 employees that travel extensively. Their parent company, Fa filo, is the second largest optical company in the world and is based in Italy.

 Marketron is a market leader in media advertising software with six US offices, 120 employees (45 in the Sun Valley area) and an active, traveling sales force.

 Rocky Mountain Hardware is a high-end construction hardware manufacturer with 85 employees and a traveling sales force.

 Scott Sports is a top sporting hard-goods manufacturer (e.g. bikes, skis). They have four offices in the US with 125 total employees (55 in the Sun Valley area). They have a traveling sales force and a parent company located in Switzerland; however, the sales force will be relocating to Salt Lake City due to limited Sun Valley air service.

 ESS Eye Pro is the sole authorized i ssuer of eyewear to the US Marine Corp and a leading supplier to ot her branches of the Department of Defense and military/security per sonnel in more than 100 nations.

These companies, along with others an d a variety of nationally-recognized organizations such as Higher Ground (Sun Valley’s renowned Wounded Warrior program), rely heavily on SUN air service to conduct business.Application Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityAir Service – Existing and Historical 6



# Section 3. Air Service – Existing and Historical

his section provides an overview of the current and historical air service at SUN. Carriers providing service, service frequency, and destinations offered are included in the discussion. A summary of historical air service is also included. A description of air service development efforts concludes
the section.



### Existing Air Service

Given the seasonal nature of the Sun Valley tourism market, commercial air service including the number of departures and seats available per week and nonstop destinations fluctuate wi th the demand of the season. Table 3.1 shows SUN’s scheduled air service from January through December 2013.

In 2013, service will be provided to three nonstop markets including Los Angeles, Salt Lake City and Seattle. The Los Angeles and Seattle services, provided by
Alaska Airlines with the 76-seat Bom bardier Q400 turbopro p aircraft, is provided seasonally with one roundtrip per day in the winter and summer seasons. Delta Connection operated by SkyWest Airlines provides annual service to Salt Lake City with the 30-seat Embraer Brasilia 120 turboprop aircraft. The Salt Lake City service fluctuates with seasonal demand with weekly departures almost doubling during July and August. In total, SUN’s peak months are during the summer with 63 total departures and 2,534 seats in Ju ly and August. Air service tapers off during the low seasons at just 21 week ly departures and only 630 seats. Although SUN has been approved for regional jet operations, all service is currently operated with turboprop aircraft.

TABLE 3.1 EXISTING AIR SERVICE - AVERAGE WEEKLY DEPARTURES/SEATS

DESTINATION AIRLINE AIRCRAFT ITEM CY 2013
JAN/ FEB MAR APR/ MAY JUN JUL/ AUG SEP OCT NOV DEC Los Angeles, CA Alaska Bombardier Q400 Dept 7 7 7 7 Seats 532 532 532 532 Salt Lake City, UT Delta Embraer Brasilia 120 Dept 28 35 21 37 49 35 28 21 25 Seats 840 1,050 630 1,110 1,470 1,050 840 630 750 Seattle,

WA Alaska Bombardier Q400 Dept 7 7 3 7 7 Seats 532 532 228 532 532 Average Weekly Departures 42 49 21 40 63 49 28 21 25 Average Weekly Seats 1,904 2,114 630 1,338 2,534 2,114 840 630 750 Source: Diio Mi; as of July 2013; outbound only 

# T This section contains:



###  Description of existing air

service



###  Synopsis of historical air

service



###  Description of air service

development effortsApplication Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityAir Service – Existing and Historical 7



### Historical Air Service

Air service at SUN has been declining over the last four years lessened somewhat by the use of revenue guarantees supported by the local community. This subsection summarizes SUN’s air service history including: destinations, traffic levels, and service providers as well as obstacles to air travel demand.



### Destinations, Service Providers, and Traffic Levels

Since 2003, passengers at SUN have fluctuated with the change in seating capacity ( Exhibit 3.1 ). Onboard passengers peaked in 2005/2006 at over 73,000 dropping since then to less than 50,000 in 2012, representing a decrease of 37 percent. Seats peaked in 2003 and have since dropped by 53 percent.

EXHIBIT 3.1 HISTORICAL PASSENGERS AND SEATS

Source: Diio Mi

Table 3.2 displays SUN’s total departures for the past 10 years by destination and airline. Total departures and seats peaked in 2003. The primary changes since 2003 is the loss of Boise and Oakland service and the significant reduction in annual departures to Los Angeles, Salt Lake City, and Seattle. Declining air service has a direct impact on t ourism and the local economy.

TABLE 3.2 HISTORICAL DEPARTURES/SEATS BY DESTINATION AND AIRLINE

DESTINATION AIRLINE TOTAL DEPARTURES BY CALENDAR YEAR 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Boise, ID Alaska 145 0 9 65 5 0 24 178 2 0 Idaho Falls, ID Alaska 0 0 0 0 0 107 69 0 0 0 Los Angeles, CA Alaska 313 149 169 155 171 140 80 142 171 157

Oakland, CA Alaska 9 76 86 82 96 71 0 0 0 0 Salt Lake City, UT Delta 2,983 2,881 2,930 2,950 3,035 2,714 2,311 2,066 1,864 1,472 Seattle, WA Alaska 346 326 324 285 271 300 153 134 176 176 Twin Falls, ID Delta 115 181 185 116 64 66 23 0 0 0 Total Departures 3,909 3,612 3,701 3,652 3,641 3,397 2,659 2,520 2,212 1,805 Total Seats 144,947 133,155 134,376 134,667 133,340 129,913 94,740 96,446 82,362 69,430 Source: Diio Mi 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 12-Months Ended Seats PassengersApplication Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityAir Service – Existing and Historical 8



### Extenuating Factors that have Affected Air Service

There are two primary factors which have affected SUN’s air service. The first factor is that the Sun Valley market is pr imarily a discretionary travel market. It is a prominent summer and winter resort destination prized by leisure travelers and second home owners. Travel demand decreases significantly during the spring and fall shoulder seasons when travel is primarily business related.

The second factor impacting SUN’s air servic e is the operational limitations of the airport. Runway length, elevation, te mperature, and approach/departure requirements restrict the aircraft types and flight segment distances that can be operated at the airport without incurring unacceptable weight/capacity restrictions which in turn limits markets that can be served. Recently, Canadair Regional Jet 700 aircraft have been approved for operations at SUN and have significantly expanded the air service opportunities for the Sun Valley market.



### Past Air Service Development Efforts

SUN provides local residents and businesses in the Wood River Valley with access to the national air transportation system and feeds the local tourism industry with visitors from all over the wo rld. In recognition of the importance of air service to the region, Fly Sun Valley Alliance was formed in 2008 including members from the cities of Hailey, Ketchum, Sun Valley, Blaine County and major local businesses to increase support for air service. Members of the Alliance have worked closely wi th the airlines serving SUN. Table 3.3 provides an overview of air service development efforts over the last five years.

TABLE 3.3 PAST AIR SERVICE DEVELOPMENT EFFORTS YEAR INITIATIVE RESULT

2009 Horizon Air Headquarters Meeting Completed SkyWest Airlines Headquarters Meeting Completed Negotiated agreement with Horizon to retain service to Seattle in 2010 Completed
Submitted SCASDP proposal Unsuccessful 2010 Route Forecast - Frontier DEN Completed 2011 Retention/Diversion Study Completed

2012 SkyWest Airlines Headquarters Meeting Completed Route Forecast - United DEN/SFO Completed Retention/Diversion Study Completed Airfare Monitoring Completed

2013 United Airlines Headquarters Meeting Completed Network USA 2013 (Met with Alaska, Delta, Seaport, SkyWest, United) Completed 

### In recognition of the

importance of air service to the region, Fly Sun Valley Alliance was formed

in 2008 to increase support for air service and have worked closely with the airlines serving SUN.Application under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityAir Service Needs and Deficiencies 9



# Section 4. Air Service Needs and Deficiencies

he Air Service Needs and Deficiencies section identifies the issues at
SUN that have stunted t he growth of commercial air service to the community. This section provides a det ailed analysis to demonstrate that the Sun Valley area is underserved, and t he average airfares in this community are higher than other comparable communities.



### Underserved Resort Destination

The Sun Valley area’s visitors and residents do not have adequate commercial air service within an acceptable prox imity. SUN’s air service fluctuates considerably with seasonal demand and is significantly lower than other resort destinations. A high percentage of air travelers are forced to use alternate airports, primarily Boise Airport, a distant 150-plus miles away.



### Comparison to Other Resort Destinations

SUN’s air service has been limited to Delta Air Lines’ turboprop service to its Salt Lake City hub, and Alaska Airlines’ Los Angeles and Seattle turboprop service. Compared to other summer and winter resort destinations such as Aspen, Eagle/Vail, and Jackson Hole, SUN is significantly underserved. Table 4.1 provides a comparison of air service prov ided at other resort communities. While the number of flights at SUN exceeds so me of the other resort airports, the number of seats and nonstop destinations at SUN are significantly lower.

TABLE 4.1 COMPARISON OF AIR SERVICE AT RESORT AIRPORTS
RESORT AIRPORT SCHEDULED CY 2012 FLIGHTS SEATS DESTINATIONS Aspen, CO 5,195 345,526 6 Hayden, CO 1,812 165,733 8 Jackson Hole, WY 3,243 359,212 10

Montrose, CO 1,736 103,828 9 Sun Valley, ID 2,029 79,224 3 Vail/Eagle, CO 2,152 288,266 11
Source: Diio Mi

Until recently, SUN’s airport limitations precluded consideration of similar services to other resort communities; however, with the approval of regional jet operations, the opportunity for the number of destinations and type of aircraft has been greatly improved. The air service support program funded through this grant application is critical to improving SUN’s air service. 

# T This section contains: Description of the Sun Valley area’s air service
needs and deficienciesApplication under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityAir Service Needs and Deficiencies 10



### Significant Seasonal Reductions

SUN’s flights are significantly reduced in off-peak months leaving the community with very limited air service. Table 4.2shows SUN’s monthly flights in 2012. Departures in the offseason are almost half of the winter season departures and less than half of the summer season departures. This leaves a major gap in air service in several months of the year. Service to an additional hub could become year-round as the
market matures.



### High Diversion to Alternate Airports

In 2012, SUN conducted a retention/diversion study to estimate the number of passengers using alternate airports. It was estimated that SUN has a passenger retention rate of 28 percent, with 72 percent driving to alternate airports ( Exhibit
4.1 ). This equates to an estimated 368 passengers daily each way on the roadways due to inadequate local air service.

The majority of diverting passengers choose Boise and accept the almost 2.5 hour drive to access adequate air service. An additional six percent of SUN catchment area travelers use Salt Lake City, a drive of over four hours.

On a market-by-market basis, the highest diversion occurs in the eastern
markets. Table 4.3 shows the top 10 SUN catchment area eastern destinations. Denver is the second largest eastern destination and ranks as SUN’s fifth overall largest market. The Denver hub could provide access to many of SUN’s top
eastern destinations and relieve the high diversion to alternate airports.

TABLE 4.3 SUN TOP 10 TRUE MARKETS

RANK DESTINATION ORIGIN AIRPORT % PDEW SUN BOI SLC OTHER 1 New York, NY (JFK) 28 41 22 9 24.8
2 Denver, CO 15 75 5 5 18.8 3 Philadelphia, PA 10 75 9 6 10.0 4 Washington, DC (IAD) 9 79 3 10 9.8 5 Houston, TX (IAH) 11 65 22 2 8.9 6 Dallas, TX (DFW) 32 45 15 8 7.0 7 Boston, MA 46 44 5 5 6.2 8 Detroit, MI 12 55 14 19 6.1 9 Minneapolis, MN 25 71 1 3 5.3 10 New York, NY (LGA) 10 87 3 0 5.1 Total domestic 28 62 6 4 484 Total international 15 70 14 1 24.7 All markets 28 62 6 4 508.7 TABLE 4.2 SCHEDULED DEPARTURES BY PERIOD IN 2012
TIME PERIOD DESTINATION/HUB TOTAL FLIGHTS LAX SEA SLC Dec-Mar 103 103 570 776 Jun-Sep 87 106 662 855 Off-peak 0 0 398 398

Total 190 209 1,630 2,029
Source: Diio Mi

EXHIBIT 4.1 SUN CATCHMENT AREA AIRPORT USE

SUN 28%

BOI 62% SLC 6% Other 4%Application under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityAir Service Needs and Deficiencies 11



### Excessive Airfares

Over the last five years, SUN’s averag e fares have far exceeded other airports within the state of Idaho, the state average, r egion average, and national average. Shown in Table 4.4 , in 2012, SUN’s one-way, domestic airfares
exceeded the state of I daho average by $25, the Northwest region by $34 and the US average by $29. Over the last 10 years, SUN’s domestic airfares exceeded the state of Idaho in each y ear, ranging from $25 to $53 one-way.
SUN’s domestic fares have exceeded the Northwest region average fares by as much as $48 one-way (2009).

TABLE 4.4 AVERAGE DOMESTIC AIRFARE (NON-DIRECTIONAL)

AIRPORT AVERAGE DOMESTIC FARE 2012 SUN DIFF 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 SUN $151 $159 $168 $195 $182 $193 $190 $181 $189 $205 Boise, ID (BOI) $110 $113 $118 $130 $131 $135 $132 $145 $159 $176 $29 Idaho Falls, ID (IDA) $144 $151 $160 $192 $193 $195 $192 $204 $204 $204 $2 Lewiston, ID (LWS) $123 $120 $131 $165 $163 $154 $160 $165 $178 $190 $15 Pocatello, ID (PIH) $124 $120 $150 $210 $179 $172 $134 $155 $170 $166 $39 Twin Falls, ID (TWF) $128 $127 $154 $208 $174 $145 $132 $124 $115 $166 $39 Idaho $116 $119 $125 $142 $140 $144 $140 $152 $164 $180 $25 Northwest Region $133 $133 $140 $151 $151 $155 $141 $155 $166 $172 $34

United States $134 $131 $135 $147 $147 $157 $143 $157 $170 $176 $29 Source: Diio Mi

To further demonstrate the excessi ve fares in the SUN market, Table 4.5 compares SUN’s average fares in the top 10 eastern markets to the average
fares for Boise and Twin Falls.

TABLE 4.5 AVERAGE FARE COMPARISON – ONE-WAY
SUN TOP 10 EASTERN MARKETS AVERAGE FARE ($) SUN FARE VS. ($) SUN BOI TWF BOI TWF New York, NY (JFK) 370 291 347 79 23 Denver, CO 179 149 137 30 42 Philadelphia, PA 407 237 278 170 129 Washington, DC (IAD) 382 245 186 137 196

Houston, TX (IAH) 331 230 178 100 153 Dallas, TX (DFW) 306 188 161 118 145 Boston, MA 339 267 266 72 73 Detroit, MI 308 257 197 51 111 Minneapolis, MN 251 230 213 21 39 New York, NY (LGA) 313 266 398 47 (86) All domestic markets 205 176 166 29 39 Source: Diio Mi

SUN’s average one-way fares exceed Boise fares by $100 or more in four of the top 10 markets and five of the top 10 markets when compared to Twin Falls. In markets such as Philadelphia and Washington Dulles, the one-way fare differential is almost $200 more. Nonst op service with eastern connecting opportunities will provide more competitio n in the SUN market and lower airfares to SUN’s top eastern destinations.Application Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityStrategic Plan – Air Service 12



# Section 5. Strategic Plan – Air Service

he previous section, Air Service Needs and Deficiencies , identified improved service and competition to eastern destinations as the Sun Valley area’s primary air service need. This section establishes the project goal and lays out a plan for its achievement. An in-depth analysis of the proposed air service is summarized in this section along with an alternate plan. Because SUN participated in a prior grant award, a summary of the project and how the goals differed from this project is presented.



### Project Goal

The goal of the Strategic Plan is to acquire nonstop service to a hub that significantly improves connections to eastern destinations adding key destinations not currently served via Salt Lake City. This goal will provide much needed additional capacity in the market as well as provide competition to eastern destinations thereby lowering airfares.



### Proposed Air Service

The most beneficial hub service to provide improved eastern connectivity is
United Airlines’ hub at Denver. United has the type of aircraft that could serve the SUN market and provides nonstop service to 118 domestic markets and 13 international markets from Denver. Denver is also the second largest eastern destination for Sun Valley area travelers and the fifth largest overall market. The proposed service has been discussed with United and United has provided a (refer to Appendix A ). letter of support for this Strategic Plan



### Detailed Market Analysis

A detailed market analysis has been completed for United service to Denver International Airport. Key points of the analysis are described below. Projections were completed for a one roundtrip schedule on a 66-seat Canadair Regional Jet 700 aircraft. With the seasonality of t he SUN market, the pro forma includes separate analyses for summer and winter service. The operating and market assumptions are listed below:

 United will capture a share of t he existing market currently served by Delta Air Lines with a lesser impact on Alaska Airlines.

 The Denver local market will be stimulated 200 percent and connecting markets will be stimulated up to 25 percent depending on United’s market share of existing passengers. 

# T This section contains:



###  A Strategic Plan for

meeting the Sun Valley
area’s air service
needs and deficiencies



###  Alternate plan to meet

the goal



###  A discussion of how

the new goal materially
differs from SUN’s previously awarded projectApplication Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityStrategic Plan – Air Service 13

 United’s SUN-Denver service will capture a share of the passengers now driving to an alternate airport (i.e. Boise, Twin Falls).

 United’s fully allocated operati ng cost between SUN and Denver was estimated using Diio Mi Form 41 data for SkyWest, adjusted by the manufacturer’s cost curve and SkyWest feedback.

Table 5.1 provides a summary of the United Denver market analysis for one roundtrip per day on a 66-seat regional jet for the winter and summer seasons. Passenger projections were based on a mature market (i.e., passenger projections would be at 100 percent on the first day of service). It is estimated that one roundtrip per day will generate $531,086 (15 percent margin) in system profit for United. The SUN-Denver rout e is forecast to be a strong economic performer for United after ramp-up is complete.

TABLE 5.1 SUMMARY OF ROUTE FORECAST
STATISTICAL CATEGORY SUN-DEN WINTER SUMMER COMBINED Days of operation 100 70 170 Seats/departure 66 66 66 Onboard passengers 8,434 5,404 13,838 Total seats 13,200 9,240 22,440 Load Factor 64% 58% 62% Average fare $251 $253 $252 System revenue $2,114,586 $1,368,826 $3,483,412

System cost $1,759,279 $1,193,047 $2,952,326 System profit/loss $355,307 $175,779 $531,086

System margin 17% 13% 15%

Although it is estimated that United will ea rn a profit after the SUN-Denver market matures, United will not generate this amo unt of profit at start-up. New markets typically have losses during the first year of operation, hence the need for a revenue guarantee to temper the airline’s risk. The uncertainty in the airline industry including the fluctuating cost of fuel will play a large part in the revenue guarantee negotiations with United.

For purposes of estimating the shortfall, for the first month of service (June 2014), it is estimated that 60 percent of the projected passengers in a mature
market will be attained . It is estimated that the market will reach full maturity by the end of the winter season. The ramp- up period is speculative and may differ depending on the effectiveness of the marketing campaign. It is also assumed that fares will be reduced by an estimated 10 percent.

To calculate the effect of t he ramp-up period on net profit, Table 5.2 , next page, shows revenue by month from the June 2 014 start date, the associated cost per month, and the net shortfall. With a first year estimated cost of $2.95 million, the service will incur an estimated shortfall of $480,361. 

### Although it is estimated

that United will earn aprofit after the SUNDenver market matures, United will not generate this amount of profit at start-up.Application Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityStrategic Plan – Air Service 14

TABLE 5.2 SERVICE RAMP-UP/START-UP PERIOD

MONTH DAYS OPERATING ESTIMATED O&D PAX RAMPUP % RAMP-UP ADJ. PAX REVENUE ESTIMATED COST NET SURPLUS/ SHORTFALL June 8 618 60% 371 $84,476 $136,348 ($51,872) July 31 2,393 65% 1,556 $354,624 $528,349 ($173,726) August 31 2,393 70% 1,675 $381,902 $528,349 ($146,447) September 0 0 0% 0 $0 $0 $0

October 0 0 0% 0 $0 $0 $0 November 0 0 0% 0 $0 $0 $0 December 17 1,434 75% 1,075 $242,649 $299,077 ($56,429) January 31 2,615 80% 2,092 $471,976 $545,376 ($73,401) February 28 2,362 90% 2,125 $479,588 $492,598 ($13,010)

March 24 2,024 100% 2,024 $456,751 $422,227 $34,524 April 0 0 0% 0 $0 $0 $0 May 0 0 0% 0 $0 $0 $0 Total 170 13,839 N/A 10,918 $2,471,965 $2,952,326 ($480,361)
Source: Mead & Hunt, Inc.; Note: In cludes ramp-up and 10% reduction in fares during the start-up period



### Alternate Plan

If United does not provide nonstop service to Denver International Airport by December 31, 2014, alternate carriers will be approached for service to Denver or another hub that provides improved eastern connectivity. Minneapolis, Chicago and Dallas represent potential hub opportunities and discussions will be initiated late in 2014 if Denver service is not planned.



### Previous Grant Recipient - New Project and Goals

In 2002, the US Department of Trans portation (DOT) awarded the City of Hailey/SUN a SCASDP grant. The 2002 grant included the following goals:

 Stimulate year-round travel between Blaine County and its number one destination, Los Angeles.

 Balance the seasonality of the loc al economy by improving year-round movement of people between Blaine County and Los Angeles.

 Improve the air service options av ailable at SUN, an airport that is significantly restricted by airfield elevation and mountainous terrain.

 Reduce the number of air travelers that must drive 154 miles to Boise to access lower airfares and nonstop service.

The $944,243 project included $600,000 in federal funds to guarantee revenue for service. It was successful in establishing the Los Angeles service that continues today on a seasonal basis.

The current application seeks assistance with an air service support program to initiate nonstop service to a hub with significant eastern connectivity. This project clearly has different goals than the previous SCASDP grant project. This application qualifies as a new pr oject and meets the requirements of
the SCASDP. 

### This application qualifies as a new project and meets the

requirements of the SCASDP.Application Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityStrategic Plan – Implementation & Funding 15



# Section 6. Strategic Plan – Implementation and Funding

here the previous section provided details and analysis associated with the proposed service, this section, Strategic Plan – Implementation and Funding , details SUN’s plan for effectively addressing the associated risk. A legal sponsor responsible for administering the program has been designated, and a public-private partnership has been formed to actively participate in implementing the proposed project. In addition, this
section identifies self-su fficiency of the service as an integral part of the community’s goals and provides a description of the community’s plan to continue with the project if it is not self -sustaining after the grant award expires. A detailed description of the funding necessa ry for implementation of the Strategic Plan, including federal and non-f ederal contributions, is included.



### Public-Private Partnership

SUN is jointly owned by the City of Hailey and Blaine County, Idaho and is operated by the Friedman Memorial Airport Authority, the spons or of this grant application. For the purpose of this app lication, Friedman Memorial Airport Authority, Fly Sun Valley Alliance, Sun Valley Resort, and the Sun Valley Marketing Alliance have formed a public-private partnership (refer to community support letters in Appendix A ).

All partners in the public-private partnership will be fully involved in the execution of the Strategic Plan ( Table 6.1 ). Friedman Memorial Airport Authority will execute federal grant offers, process al l associated reimbursement requests, and oversee grant administration. Fly Sun Va lley Alliance will manage the overall new air service plan implementation. Sun Valley Resort and Sun Valley Marketing Alliance will execute the marketing plan for the new service. Together these partners form a team committed to improvin g and retaining air service at SUN.



### Incentive and Support Plan

The current airline financial landscape with airline bankruptcies and volatile fuel prices is rough. Accordingly, airlines are highly risk averse requiring communities to partner with them to reduce risk. This incentive and support plan has two primary objectives: first, to effectively ma rket the service to inbound travelers and local residents; and second, to offset an airline’s liability during the passenger ramp-up period. In short, the partnership’s task is to market the new service and cover the airline’s risk while passenger traffic builds. Each of the elements included in the support plan are described below. 

# W

TABLE 6.1 PUBLIC-PRIVATE PARTNERSPUBLICPRIVATE PARTNER ROLE Public: Friedman Memorial

Airport Authority Grant administration

Private: Fly Sun Valley Alliance Air service plan management Sun Valley

Resort Marketing plan development and implementation Sun Valley Marketing Alliance This section contains:



###  Description of the

public-private partnership



###  Designation of a legal

sponsor



###  Funding necessary for

implementation of the Strategic Plan



###  Sustainability of the

projectApplication Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityStrategic Plan – Implementation & Funding 16



### Revenue Guarantee

An airline’s consideration of nonstop service between SUN and a hub with significant eastern connections depends heavily on financial support. In the current airline and economic environment, it has become expected that a small community share in an airline’s risk of se rvice start-up. Depending on the aircraft used and frequency, airlines are typically requesting $500,000 to $1 million revenue guarantees. Like most communities, SUN does not have the funds available to offer such a guarantee withou t the assistance of the US DOT through this program.

Based on preliminary estimates of the shortfall in the first year of service ( Table
5.2 , page 14) and recent information on revenue guarantees in other similar markets, it is anticipat ed that a minimum $500,000 revenue guarantee will be required. Terms of the revenue guarantee agreement are subject to further negotiations and changing industry conditions.



### Marketing Campaign

In this environment, destination specific ma rketing efforts are largely left to the community. Marketing programs must be targeted to the unique market and designed to increase market awareness. The public-private partnership proposes a marketing program designed to increas e the Sun Valley area’s reputation as the nation’s premiere destination resort and create new service awareness in
order to make this service sustainable.

The target audience is primarily potential visitors to the Sun Valley area. Table 6.2 provides the marketing budget. Sun Valley Resort and Sun Valley Marketing Alliance will use a media firm to coordinate timing and optimal placement of each element of the marketing campaign and will be responsible for oversight of the mark eting campaign. The following marketing efforts will be included in this campaign.

 Digital presence in key on-line sites

 A mix of traditional advertising whichcould encompass print, radio or outof home

 PR outreach to key publications

 Utilization of owned media (social media, blog, database) to encourage travel TABLE 6.2 MARKETING BUDGET MEDIA VEHICLE BUDGET

Online Ski-specific sites Onthesnow.com Powder.com
$50,000 Skinet.com liftopia.com weather.com Snowforecast.com sno-country.com Search engines Google, Yahoo, Bing and travel specific search engines, Google ad words $20,000

Video display ads YouTube, Tremor Media $15,000 Video.egg Yahoo! Network
Target city local sites Travel section sponsorships on newspaper/broadcast sites, ski council sites $20,000

Other online sites TripAdvisor links $25,000 Facebook, Twitter, other social sites

Email Targeted e-mails to Opt-in Travel category lists, skiers, travel agents, airline frequent fliers, etc. $10,000

Print Travel sections in local print Local magazines, air line publications, golf publications $30,000

PR Target media News releases, media outreach & press trips, etc. $5,000

Local emphasis Airport signage, print/radio, online, email in airport catchment area $10,000

Total $185,000Application Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityStrategic Plan – Implementation & Funding 17

The marketing campaign created by an outside firm addresses awareness in the
local market but concentrates the effort on potential visitors from Denver and eastern markets beyond Denver. This aggressive and comprehensive air service marketing campaign will ensure long-term continuation of this air
service initiative.



### Fee Waivers

The incentive program includes a landing fee waiver for the first 12 months of seasonal air service. The fee waiver will vary depending on the type of aircraft used and the frequency of service. The fee waiver is estimated to be $18,000.



### Project Continuation and Sustainability

The preliminary analysis indicates that after the ramp-up period, daily service to Denver will be profitable (i.e. self-sustaining ). However, a rise in fuel costs or any number of factors could result in fewer passengers or less ticket revenue than anticipated. During the course of the pr oject, the public-private partnership will track the performance of the service, and, if at the end of the first nine months of service it is not meeting expectations, t he partners will evaluate the program and draw up a plan that targets the shortc omings. Depending on the specifics at the time, the public-private partners will consider appropriate support mechanisms.



### Strategic Plan Funding

The public-private partnership is reques ting US DOT assistance in funding 68 percent, or $500,000, of the Strategic Plan. Table 6.3 provides the Strategic Plan budget by element and sources of funding. SUN and the community will fund 32 percent of the proposed Strategic Plan. N on-airport funding sources will provide 25 percent of the cash requirement and 25 percent of the funding for the total program including in-kind services.

TABLE 6.3 STRATEGIC PLAN BUDGET

DESCRIPTION FUNDING SOURCE

TOTAL US DOT AIRPORT NON-AIRPORT CASH CASH IN-KIND CASH IN-KIND Revenue guarantee $500,000 $500,000 Marketing campaign $10,000 $175,000 $185,000 Fee waivers $18,000 $18,000 Monitoring program $24,000 $5,000 $29,000 Grant administration $7,000 $7,000 Total $500,000 $34,000 $25,000 $175,000 $5,000 $739,000 Percent of total project 68% 5% 3% 24% 1% 100% Percent of cash contribution 71% 5% N/A 25% N/A 100%Application Under the Small Community Air Service Development Program Friedman Memorial Airport AuthoritySchedule and Monitoring 18



# Section 7. Schedule and Monitoring

his section provides critical milestones to be achieved by the publicprivate partnership. A monitoring progr am is also provided to track the progress and performance of the new service.



### Strategic Plan Schedule and Milestones

The following target dates are proposed to track the progress of this air
service initiative:

TABLE 7.1 STRATEGIC PLAN SCHEDULE
DATE ACTION ITEM DESCRIPTION

October 2013 - January 2014 Airline meetings/negotiations After grant award, SUN will meet with airlines at their headquarters to discuss nonstop eastern hub service. Upon airline interest, the

terms of the airline incentive package will be negotiated.

FebruaryMarch 2014 Marketing campaign development Development of the marketing campaign will be completed in February/March 2014 in order to begin the marketing campaign 60 days prior to new service initiation.

April 2014 Marketing initiation It is anticipated that the marketing campaign will begin by April 2014 and continue throughout the first year of service.

June 2014 Nonstop Denver
service The service start date is the critical date for the rest of the Strategic Plan. It is anticipated that, with successful airline negotiations,
service would start in June 2014. Service start-up is dependent on airline route planning and aircraft availability.

December 2014 Alternate plan If an airline has not implemented nonstop Denver service by December 31, 2014, SUN will contact other potential carriers to increase connectivity to eastern
destinations which would meet the

goals of this grant application. 

# T This section contains:



###  The schedule for timely

completion of the project



###  How the community

will monitor the progress of the projectApplication Under the Small Community Air Service Development Program Friedman Memorial Airport AuthoritySchedule and Monitoring 19

TABLE 7.1 STRATEGIC PLAN SCHEDULE
DATE ACTION ITEM DESCRIPTION

May 2015 Revenue guarantee contract completion At the end of the first year of nonstop service, with a service

start date of June 2014, the revenue guarantee will be
calculated. If the service start date changes due to airline circumstances and/or equipment availability, the revenue guarantee contract term will change accordingly.



### Monitoring Program

The monitoring program includes: service performance tracking; impact on airfares; and determining the influence of new service on retention at SUN. Table
7.2 provides the action items and frequency to monitor the Strategic Plan. Fly Sun Valley Alliance has committed funds to hire a consultant to monitor advance bookings and passenger revenue performance.

TABLE 7.2 STRATEGIC PLAN MONITORING

FREQUENCY ACTION ITEM DESCRIPTION

Monthly Airline performance Load factors by flight, enplanements, flight
cancellations
Market performance Passenger ramp-up

Revenue guarantee
indicators Ticket revenue, cost, drawdown

Quarterly Airfares Track walk-up, business, and leisure published fares for the top 25 markets to ensure fares are competitive with competing

airports (i.e. Boise and Twin Falls). Fare
issues will be communicated to incumbent
airlines.

9 months Program

assessment Complete an overall assessment of the program to determine if additional community support is needed beyond

year one.

12 months True Market
Estimate Complete a true market estimate to evaluate the use of SUN by local travelers compared to their use of Boise and Twin Falls. Analyze output and communicate with airline.Application Under the Small Community Air Service Development Program Friedman Memorial Airport AuthorityAppendix A. Airline and Community Letters of Support 

# Appendix A. Airline and Community Letters of Support

ppendix A includes letters of support for Friedman Memorial Airport Authority’s application to the US DOT. Support letters were submitted by , participants in the public-private partnership, United Airlines government representatives, and members of the community. The letters of support are included on the following pages of this Appendix A and are
listed below.



### Airline

United Airlines



### Public-private partnership Fly Sun Valley Alliance Friedman Memorial Airport Aut hority (refer to cover letter) Sun Valley Marketing Alliance Sun Valley Resort



### Government Blaine County City of Hailey City of Ketchum City of Sun Valley Idaho Congressional Delegation Idaho State Legislature



### Businesses and Organizations Blaine County School District #61 Haily Chamber of Commerce Higher Ground Sun Valley
Marketron POWER Engineers, Inc. Rocky Mountain Hardware Smith Optics
St. Luke’s Wood River Medical Center
Sustain Blaine Wood River Economic Partnership 

# A

### July 12, 2013

Brooke Chapman, Associate Director Small Community Air Service Development Program United States Department of Transportation 1200 New Jersey Avenue SE Washington, DC 20590

Dear Ms. Chapman:

Fly Sun Valley Alliance (FSVA) is pleased to submit this letter of support for the Friedman Memorial Airport’s Small Communities Air Service Development Program grant application. We fully support the proposed plan to increase east coast connecting air service to SUN. Supporting and i mproving air service to Sun Valley is the mission of our community

- wide organization. We recognize that commercial air service is critical to the economy of our entire region through access for visitors and support to area
b usinesses, organizations and institutions. In fact, improving our commercial air service access is the single most effective way to improve our econom y.

We can confirm that FSVA is part of a public

- private partnership that has been formed with Friedman

Me morial Airport for the purpose of supporting air service improvement. Where small community air service initiatives like this are concerned, it is partnership like this that can make a difference. If this grant is awarded to SUN, we will be actively comm itted to ensuring the success of this new air service.

Thank you for your consideration of this application. We will continue to work diligently to insure the long

- term success of air service in our community.

Sincerely,



# Eric G. Seder

Eric Seder , President Fly Sun V alley Alliance Board of Directors

Fly Sun Valley Alliance PO Box 6316 Ketchum, ID 83340 www.flysunvalleyalliance.com

## Randy Hall, Mayor

480 East Avenue North P.O. Box 2315, Ketchum, Idaho 83340 Telephone: (208) 726-3841 Fax: (208) 726-8234



## July 15, 2013

Brooke Chapman, Associate Director Small Community Air Service Development Program United States Department of Transportation 1200 New Jersey Avenue SE Washington, DC 20590

Dear Ms. Chapman:

We write in support of the 2013 application for Friedman Memorial Airport (SUN) in Hailey, Idaho under the Small Community Air Service Development grant program. The goal of this project is to increase eastern connectivity through an additional nonstop hub providing much needed air service to key eastern airports not currently served through Salt Lake City. I n Ketchum we rely heavily on tourists, second homeowners and business travel in and out of the SUN airport. We are supportive of all initiatives that will expand our local air service and strengthen our economy. We urge the Department of Transportation to give this application all due consideration.

Sincerely,

Mayor Randy Hall**MikcCrapo United** **Slalti Senator** **239 Dirfcicn** **Senate Office** **Dldg. Washington.** **D.C.20S 10** **James E.** **Rtech Unlle** **Stales Senator** **483 Russell** **Senate Office** **Mike Simpson** **.Member of** **Congress 2312** **Raybum House** **Office Bldg.** **Washington, D.C** **20515 July** **9, 2013** **Brooke Chapman,** **Associate Director** 

### Small**Community Air** **Service Development** **Program United** **States Department** **of Transportation** **1200 New** **Jersey Avenue** **SE Washington,** **DC 20590** **Dear Ms.** **Chapman:**

### We**write in** **support of** **the 2013** **application for** **Friedman Memorial Airport** **(SUN) in** **Hailey,**

### Idaho**under the** **Small Community** **Air Service** **Development grant** **program. The** **goal of** **this project** **is to** **increase eastern** **connectivity through** **an additional** **nonstop hub** **providing much** **needed air** **service to** **key eastern** **airports not** **currently served** **through Salt** **Lake City.** **Due to** **the presence** **of the** **Sun Valley** **Resort the** **economy of** **the Sun** **Valley/Wood River** **Valley is** **largely based** **on tourism.** **The area** **is also** **the home** **to the** **Sawtooth National** **Recreation area,** **Silver Creek** **(famous fishing)** **and Craters** **of the** **Moon National** **Monument. In** **addition to** **the travel** **requirements of** **the tourist** **industry, local** **residents and** **businesses need** **to be** **connected to** **the national** **air transportation** **system. Multiple** **companies are** **headquartered in** **the Sun** **Valley area** **and rely** **heavily on** **air service** **to SUN** **to conduct** **business. We** **fully understand** **and appreciate** **the importance** **of eastbound** **commercial service** **for the** 

### business**community and** **citizens of** **the region** **and urge** **the Department** **of Transportation** **to give** **this application** **all due** **consideration. Sincerely,** **Mike Crapo** 

### United States**Senator James** **E. Risch** **United States Senator** **Mike Simpsfon** **Member of** **Congress**SENATOR MICHELLE STENNETT (208) 332

- 1353 mstennett@senate.idaho.gov REP DONNA PENCE (208) 332

- 1032 dpence@house.idaho.gov



# Idaho State Legislature

STATE CAPITOL P.O. BOX 83720 BOISE, IDAHO 83720

- 0081



# District 26
Blaine, Camas, Gooding & Lincoln Counties



## July 16, 2013

Brooke Chapman, Associate Director Small Community Air Service Development Program United States Department of Transportation 1200 New Jersey Avenue SE Washington, DC 20590

Dear Ms. Chapman:

Idaho’s Legislative District 26 is home to Friedman Memorial Airport (SUN) and we are writing in support of their application for a US Department of Transportation Small Community Air Service Development Program Grant. Currently, SUN is significantly underserved in part due to operational challenges that include mountainous terrain and isolation from neighboring hub airports. The $500,000 SCASDP Grant would be augmented by private-public partnership monies for a total of $674,000 in funding to increase air service to vital hubs on the east
coast.

Tourism is a driving economic force in our community and having limited air travel options disadvantages Sun Valley when competing against other winter resorts in our region. Furthermore, businesses operating in our district need efficient air travel to remain competitive in the U.S. marketplace, much of which requires travel to eastern cities. Finally, our local residents and large population of second homeowners require more robust travel options. It is for these reasons that this initiative has the broad support and cooperation of our community which is funding approximately one quarter of the proposed plan.

Because improved air service is important to our constituents and local economic interests, we would encourag e your serious consideration of Friedman Memorial Airport’s grant application which would lead to increased travel options and lower fares for travelers to America’s first destination resort.

Sincerely,

Senator Michelle Stennett Representative Donna Pence

### July 18, 2013

Ms. Brooke Chapman, Associate Director Small Community Air Service Development Program United States Department of Transportation 1200 New Jersey Ave, SE Washington, D.C. 20590

Dear Ms. Chapman,
Higher Ground Sun Valley (HG) is a local nonprofit organization located in Ketchum, Idaho, whose mission is to enhance qua lity of life through inclusive therapeutic recreation and education for people of all ab ilities. As part of our military program for injured service members and veterans, HG flies 200 individuals into Sun Valley each year for a week of therapeutic recreation an d rehabilitation at no cost to them. As we aim to increase our programming for these in dividuals and travel remains an essential component of helping our veterans in their he aling efforts, we at HG view this Small Community Air Service Development Program Gr ant as a means to be able to serve even more deserving veterans. We are confiden t this collaborative initiative will support community disability awareness, enhance vetera ns support efforts, and help stimulate the local Ketchum economy.
Some examples of how FMAA and this Air Service grant will benefit individuals with disabilities, including HG participants:

 Accessibility to the Wood River Valley

 Safety through the elimination of excessive travel

 Affordability

 Ease of access to adaptive recreational opportunities

Higher Ground Sun Valley supports the FM AA proposal and its potential to provide travel options that are affordable and acce ssible for our participants and programs.
Respectfully,

Kate Weihe

Executive Director



# Achieving New Heights Through Adaptive Sports

### July 13

, 2013

Brooke Chapman, Associate Director Small Community Air Service Development Program US Department of Transportation 1200 New Jersey Avenue SE Washington

, DC 20590

Dear Ms. Chapman:

Our local non-profit Wood River Economic Partnership (WREP) represents 100 businesses whose 2500 employees work in a county of 22

, 000 people. Because we are a mountain resort community

, air service is ou r economic lifeline. Many location-neutral businesses here rel y on air tra v el and some are leaving because we have been losing air service. In addition

, we ha v e had four high-end hotel projects entitled

, but not y et financed and built. The fmancier ' s consultants are wary of our declin i ng air ser v ice and are hesitant to recommend investment until we can bolster our air service. This is almost a billion dollars' worth of new direct investment into our community that won't get started unti l we solve our transportation challenges.

As a community we are working hard to raise money for additional air ser v ice. Securing this grant would significantly help our efforts to grow our economy

. Like many other communities we have suffered from the Great Recession with a 30% loss in our county GDP. We are very motivated to improve our situation and we'll do our part.

Thank you for y our consideration, 

# O~

Doug Brown Executive Director WREP Wrepofidaho.com dougbrownsv@g m ail

. com 208-309-0187