# Proposal under the Small Community Air

Service Development Program

Docket DOT

- OST

- 2011

- 0119

Sponsor: Casper/ Natrona County International Airport

DUNS Number: 092766013

Congressional District Code: WY 01

Contact: Mr. Glenn S. Janu ska , A.A.E.

Airport Manager

Casper/ Natrona County International Airport

8500 Airport Parkway

Casper, WY 82604

gjanuska@iflycasper.com

Due Date: August 2, 2011Small Community Air Service Development Program Page I

Casper/Natron a County International Airport Proposal A PPENDIX C

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET OST

- 2011

- 011 9

SUMMARY INFORMATION

All applicants must submit this information with their proposal, along with a completed form SF

424 on http://www.grants.gov

A. APPLICANT INFORMATION: (CHECK ALL THAT APPLY)

Not a Consort ium Interstate Consortium Intrastate Consortium

Community now receives EAS subsidy

Community previously received a Small Community Grant in 2002 . Grant was

completed in 2003

.

B. PUBLIC/PRIVATE PARTNERSHIP

Public: Private:

1. Casper/ Natrona County Int’l Airport 1. Casper Area Chamber of Commerce

2. Natrona County 2. Casper Area Economic Dev. Alliance

3. City of Casper 3. Frontier Airlines

4. Town of Edgerton 4. Allegiant Airlines

5. Town of Midwest 5. Casper Journal

6. WYDOT Aeronautics 6. Casper Star Tribune

7. KCWY News 13

8. Town square Media

9. Casper Area Convention & Visitors Bureau

10. KTWO Television

11. Atlantic Aviation

- Casper

C. PROJECT PROPOSA L

Project Proposal: (Check All That Apply)

X Marketing Upgrade Aircraft X New Rout e

_X_ Travel Bank Service Restoration

___ Subsidy

____ Surface Trans. Regional Service

_ X

_ Revenue Guarantee

X Launch New Carrier X Start

- up Cost Offset

____ First Service

Study X Secure Additional Service

____ Other (explain below) X

XSmall Community Air Service Development Program Page II

Casper/Natrona County International Airport Proposal D. EXISTING LANDING AIDS AT LOCAL AIRPORT:

X Full ILS X Outer/Middle Marker X Published Instrument Approach

X Localizer Other (Specify) ____

E. PROJECT COST:

Description Sub Total Total

1. Federal Amount Requested: $ 500 ,000

2. State ca sh financial contribution $ 30,000

Local Cash Finan cial Contribution

3a. Airport cash funds: $ 30 ,000

3b. Non

- A irport cash funds (CVB): $ 1 0,000

3c. Other Non

- Airport cash funds: $ 2 0 ,000

3. To tal local cash funds: $ 6 0 ,000

4 . TOTAL CASH FUNDING $ 59 0 ,000

In

- Kind contributi on

5a. Airport In

- Kind contribution $6,24 0

5b. Other In

- Kind contribution $219 ,240

5. TOTAL IN

- KIND CONTRIBUTION $ 225,480

6. TOTAL PROJECT COST $ 8 15

, 480

F. IN

- KIND CONTRIBUTIONS

1. Barter Advertising $ 60 ,000

2. Travel Bank $ 150,000

3. Ch amber of Commer ce $9,240

Total $2 19

, 240

G. IS THIS APPLICATION SUBJECT TO REVIEW BY STATE UNDER EXECUTIVE ORDER

PROCESS?

a. This application was made available to the State under Executive Order 12372

Process for review on _______________.

b. P rogram 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

.

H. IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT?

No Yes (explain)

_________________________ x

xSmall Community Air Service Development Program Page III

Casper/Natrona County International Airport Proposal CASPER/NATRONA COUNTY INTERNATIONAL AIRPORT MARKET AREASmall Community Air Service Development Program TOC i

Casper/Natrona County International Airport Proposal 

### Table of Contents

Summary of Community Proposal 1

New Grant Proposal 2

Previous Grant 2

Our Community Team 2

Our Airport 2

Plan is Consistent with DOT Priorities 3

Unique Circumstances 3

Air Service Background 3

Casper/Natrona County International Airport (CPR) 3

Air Service History 4

Current Air Service 5

Casper /Natrona County Community Profile 6

Economic Indicators 7

Unique Air Trave l Problems of the Market Area 8

Passenger Market for Casper 8

Local Market Demand 8

Market Stimulation 9

High Air Fares 9

Passenger Forecast 11

Action Plan 12

Action Plan Elem ents 12

Marketing Program 12

Marketing and Media Selection 13

Advance T icket Sales Program (Travel Ban k) 14

Cost Offset Program 14

Revenue Guarantee 14

To tal Support Package 15

Innova tive Marketing Program 16

Economic Stimulus 16

Performance Measurement and Schedule 17

Performance M ea surement 17

Schedule 18

Community Support 19

Assurances 20

Frontier Air lines Letter of Support 21

Allegiant Air Letter of Support 22

Additional Letters of Support 24Small Community Air Service Development Program Page 1

Casper/Natron a County International Airport Proposal



### PROPOSAL OF C ASPER/NATRONA COUNTY

INTERNATIONAL AIRPORT

Summary of Proposal

New Grant Proposal

The Casper/Natrona County International Airport ( CPR ) suffers from very high air fares

, particularly t o Denve r. Since 2007 the average one way fare without taxes and fee s for the four

year period has been approximately $247.00 for a market that is only 230 miles away . This

average fare resulted in a yield of $1.07 per mile, three times the 34 cent per mile U.S. average

for markets unde r 500 miles . Meetings and discussio n s have been held over the past four years

with United Airlines, the only airline providing service in the Casper

- Denver market. We have

asked United to lower the local fare in the Casper

- Denver market back to the fare levels

experienced in the period fro m 1990 to 2005 which resulted in an average fare of approximately

$115 one way without taxes and fees

, or a n average rate of $.50 per mile, still higher than the

U.S. average. These meetings and discussions have not been successful to date

.

Thes e high fa res are causing many air travelers to make a four hour d rive to Denver to do

business, participate in leisure activities , or in many cases to fly to beyond destinations . A

leakage analysis developed by Sabre Airline Solutions in 2010 indicated that the Ca sper /Natrona

County International Airport is only retaining 23% of the Casper

- Denver local passenger and

that Casper is only retaining 45% of all the Casper area passengers that travel by air. United did

upgrade their flights from 30 seat EMB

- 120 turbo pr op aircraft and 37 seat DH8

- 200 turbo prop

aircraft to 50 seat CRJ

- 200 jet aircraft

, but they did not lower the fares to reflect the economic

efficiencies of this change of aircraft

.

Casper/Natrona County International Airport and the supporters of this p roposal believe that the

only way that the fares will be lowered to a reasonable level to meet the communities ’ air service

demand is by instituting competitive air service by a low cost carrier (LCC) that will charge

lower fares. In so doing, we are seek ing a grant to support the establishment of new air service

to Denver by Frontier Airlines. Initial service will be one round trip flight per day with E

- 190 jet

aircraft

. Frontier is well known for having fares that are lower than the fares of United Air lines

and also known for stimulating passenger demand when they enter a market.

The high airfares are negatively impacting the passenger enplanements at Casper/Natrona

County International Airport. The leakage analysis developed by Sabre Airline Solution s shows

that the local market is generating 239.4 passengers per day at CPR with 290.4 passengers per

day being leaked to other airports.

Frontier Airlines has air service to almost all of Casper/Natrona County International Airport’s

top markets and this combination of airline and airport should be a great partnership. Frontier

Airlines has indicated that it is interested in providing air service between Casper and Denver if

the sponsor can provide a support package to help offset start up cost and fund a marketing

program to support the new air service. The Airline has indicated that it could start service with

one daily round trip flight with 99 seat E

- 190 aircraft in 2012.Small Community Air Service Development Program Page 2

Casper/Natrona County International Ai rport Proposal Casper/Natrona County International Airport is also seeking grant funds to su pport new air

service to Phoenix/Mesa Airport by Allegian t Airlines and existing airline air service to Las

Vegas, Salt Lake City, and Denver with the implementation of a local marketing and advertising

program. Allegiant Airlines has indicated that it wo uld like another marketing and advertising

campaign similar to the 2008 campaign to help support new nonstop ser vice to Phoenix/Mesa

Airport. Starting i n 2008, the Airport and State contributed over $ 8 0 ,000 for marketing and

advertising for new service by Allegiant Airlines to Las Vegas and promoting the regional jet

service to Denver and Salt Lake City by the other airlines . The key to this new marketing and

advertising program was that it focused on an enlarged catchment area to include communities

over two hours from Casper/Natrona County International Airport. This campaign was

extremely successful and the Airport would like to do this again in conjunction with the new,

low fare air service to Denver.

Casper/Natrona County International Airport is r equesting a grant of $ 500 ,000, with a local and

state cash contribution of $ 9 0 ,000

, an in

- kind contribution of $ 7 5 ,480 plus a $ 150 ,000

commitment for tickets for a t otal incentive package of $ 81 5 ,480

. With the receipt of the Small

Community Air Service De velopment grant funds, our airline assistance package will have

sufficient resources to provide a strong marketing program for the new air service and provide a

revenue guarantee and cost offset for the airline during the initial months of operation.

Prev ious Grant

Casper/Natrona County International Airport received a grant under the Small Community Air

Ser vice Development program jointly with Gillette Wyoming in 200 2 . The grant was $ 500 ,000

and was intended to support new air service between Casper/Nat rona County International

Airport , Gillette

- Campbell County Airport

, and Billings Montana by providing funds to lease a

B

- 1900 aircraft for Big Sky Airlines. The airline had a small community hub in Billings and it

was thought that Casper and Gillette c ou ld be contributor s to the Big Sky operations at Billings.

Air service was started in 2003 but the passenger demand was minimal and the airline ceased

operations after a year in Casper and Gillette and returned the aircraft to the leasing company.

Our Com munity Team

Our community team includes Natrona County, the City of Casper, the Casper Area Convention

and Visitors Bureau, the Casper Area Chamber of Commerce, the Casper Area Economic

Development Alliance

, and will be led by the Casper/Natrona County In ternational Airport. This

group has been able to develop incentive programs that have led to new nonstop jet service to

Minneapolis, Chicago, and Las Vegas.

Our Airport

The Casper/Natrona County International Airport meets all FAA and TSA requirements f or the

type of service we are seeking. T he Airport has the ticket counter and gate space to conveniently

handle the current service of Allegiant, Delta Connection, United Express

, and new service by

Frontier to Denver.Small Community Air Service Development Program Page 3

Casper/Natrona County International Ai rport Proposal Plan Is Consistent With DOT Prioriti es

This project to add service to Denver is consistent with the priorities established by the Secretary

of Transportation. The new air service will not detract from the current air service and should

help create a stronger awareness of the Casper/Natrona County International Airport . The

Community and the Airport will work with Frontier Airlines to provide low fares in the Casper

Denver market b y offering a support package to advertise the new service, a revenue guarantee

and cost offset program to offset initial losses, and establish a ticket bank to support passenger

use. Additionally, the Community and Airport will work with Allegiant Airlines to advertise the

new Phoenix/Mesa service should that service be established. Finally, a dvertising and market ing

funds will also be utilized to promote existing air service to Las Vegas, Denver, and Salt Lake

City.

The proposed Denver service will benefit local businesses, education institutions, the general

public, and especially the leisure traveler during thi s economic recession and in the future . It

will also get the air traveler out to their car and back onto an airplane for trips to Denver and

beyond

.

Unique Circumstances

Low fare service to Denver will recapture the leaked passengers and expand the reac h of

Casper/Natrona County International Airport. As an example, t he new low fare air service

initiated by Allegiant Airlines to Las Vegas in 2008 proved that Casper/Natrona County

International Airport can be the “ airport of choice ” for almost half of th e people in the state of

Wyoming. Prior to the Allegiant service, there were 5,770 annual passengers in the Casper

- Las

Vegas market. Allegiant Airlines service expanded this market to 29,200 passengers. These

passengers were from counties and cities ove r 150 miles from Casper. In fact, over 79% of the

Las Vegas passengers from the twelve county catchment area now use Casper/Natrona County

International Airport as their originating point to Las Vegas. Only 22.7% of the passengers from

these twelve count ies use Casper/Natrona County International Airport for flights to Denver.



### Air Service Background

The Casper/Natrona County International Airport ( CPR )

The Casper/Natrona County International Airport meets all FAA and TSA requirements for the

type of se rvice we are seeking. It is the primary commercial airport for jet airline service for

approximately half of the State of Wyoming. It is estimated that the population of the Airport

catchment area is over 254,000

. Casper/Natrona County Airport has tradit ionally provided the

best link to the National Transportation System for the residents of the many small, rural

communities throughout the central part of Wyoming . The economies of the region continue to

grow. Population is increasing, retail sales are up , and new companies are moving into the area

and demand for airline service continues to be high.

The Casper/Natrona County International Airport is a full service Airport. The passenger

terminal has space to accommodate six airlines , and currently has three rental car companies andSmall Community Air Service Development Program Page 4

Casper/Natrona County International Ai rport Proposal other customer amenities . Convenient, reasonably

- priced automobile parking is available on

Airport. The Airport is seven miles northwest of downtown Casper and is owned and operated

by Natrona County . The primary runway at the Airport is 10,165 feet long and 150 feet wide.

Tenants and vendors at the Airport provide a full range of aviation services including fuel

service, student instruction, charter flights, aircraft and engine repair, and aircraft storage.

Air Service Hi story

The Airport passed from military control to ownership by Natrona County in 1949. The Airport

is governed by a five member Board of Trustees that are each appointed for a five year term.

The Airport has had scheduled air service since the early 195 0’s. Prior to the Airline

Deregulation Act of 1978, the Casper/Natrona County International Airport had frequent service

by Western Airlines to Denver, Salt Lake City, Minneapolis, and through points in M ontana to

Calgary, Canada with B

- 737 aircraft. The peak year for enplaned passengers for CPR was 1979

with 142,079.

In the 1990’s, service at the Airport was transferred from the mainline air carriers to the regional

airline partners of Delta Air Lines and United Airlines. Flights we re provided with co mmuter

turbo prop aircraft. Northwest Air Link established service to Minneapolis in the summer of

200 4 with 50 seat regional jets. Allegiant Airlines started service to Las Vegas in the fall of

2008 with MD

- 83 aircraft. The flights to Minneapolis were eliminated when Delta acquired

Northwest in early 2009

. Flights declined but seats remained somewhat constant due to United

Express replacing turbo prop aircraft with regional jet aircraft.

HISTORICAL NONSTOP SERVICE AT CPR

Year Nonstop Markets We ekly Flights Weekly Seats

2000 DEN, SLC 83 2,487

2001 DEN, SLC 89 2,667

2002 DEN, SLC 68 2,180

2003 DEN, SLC 76 2,280

2004 DEN, SLC, MSP 77 2,590

2005 DEN, SLC, MSP 88 2,920

2006 DEN, SLC, MSP 69 2,2 10

2007 DEN, SLC, MSP 76 2,692

2008 DEN, SLC, MSP, ORD, LAS 77 3,102

2009 DEN, SLC, LAS 43 2,110

2010 DEN, SLC, LAS 42 2,300

2011 DEN, SLC, LAS 43 2,030

Source: Official Airline Guide, summer issue

Since 1995, the Airport has ex perienced a growth in passengers. For the fifteen year period, the

Airport saw enplaned passengers increase 42%. There was a drop in passengers in 2002 after

the impact of 9/11

, but growth thereafter. Passenger enplanements leveled off with the

switchov er to regional jet aircraft where the airline reduced flights but added larger aircraft. TheSmall Community Air Service Development Program Page 5

Casper/Natrona County International Ai rport Proposal major contributor to recent growth in enplaned passengers is due to the addition of Allegiant

Airlines service to Las Vegas.

CASPER/NATRONA COUNTY INTERNATIONAL AIRPORT PASSENGER S

Source: Casper/Natrona County International Airport Data

Current Air Service

As of August 20 11

, Casper/Natrona County International Airport had nonstop service to Denver,

Las Vegas, and Salt Lake City. The servi ce to Denver is provided by Sky West Airlines

operating as United Express. There are 25 nonstop flights per week with 50 seat CRJ

- 200

aircraft. Allegiant Airlines operates two flights per week to Las Vegas with 150 seat MD

- 83

aircraft. The ser vice to Sa lt Lake City is provided by Sky West Airlines operating as Delta

Connection. There are 16 flights per week with 30 seat EMB

- 120 aircraft.Small Community Air Service Development Program Page 6

Casper/Natrona County International Ai rport Proposal CASPER AIR SERVICE

– AUGUST 2011

Market Airline Depart Arrive Aircraft Frequ ency

CPR

- DEN United Express 6:07 am 7:16 am CRJ x Sa.

United Express 6:24 am 7:30 am CRJ Sa.

United Express 10:21 am 11:20 am CRJ x Sa., Su.

United Express 12:44 pm 1:45 pm CRJ Daily

U nited Express 5:03 pm 6:02 pm CRJ Daily

DEN

- CPR United Express 8:57 am 9:57 am CRJ x Sa., Su.

U nited Express 11:22 am 12:21 pm CRJ Daily

United Express 3:32 pm 4:37 pm CRJ Daily

United Express 6:45 pm 7:46 pm CRJ Sa

United Express 10:23 pm 11:31 pm CRJ x Sa.

CPR

- LAS Allegiant 6:05 pm 7:00 pm MD

- 83 Mo, Fr.

LAS

- CPR Allegiant 2:35 pm 5:25 pm MD

- 83 Mo, Fr.

CPR

- SLC Delta Connection 6:00 am 7:48 am EM

- 120 Daily

Delta Connection 11:30 am 1:15 pm EM

- 120 Sa, Su.

Delta Connection 12:50 pm 2:35 pm EM

- 120 x Sa, Su

Delta Connection 5:32 pm 7:20 pm EM

- 120 Sa, Su

SLC

- CPR Delta Connection 9:40 am 11:15 am EM

- 120 Sa, Su

Delta Connection 11:00 am 12:35 pm EM

- 120 x Sa, Su

Delta Connection 3:20 pm 4:55 pm EM

- 120 Sa, Su

Delta Connection 9:55 p m 11:30 pm EM

- 120 Daily

Source: Official Airline Guide, August 2011



### C asper /Natrona County Community Profile

The Casper/Natrona County c ommunity is a growing, diverse area that needs and depends upon

airline service to connect its populace to the nation’s air transportation system and to assist

others who serve and visit the area from throughout the United States and abroad. Casper is the

number one market for the state of Wyoming. The Airport catchment area now covers almost

half of the sta te’s residents.

The Casper/Natrona County area has a diverse group of employers, a low cost of living, and a

relatively high median household income. The main industries are in retail/wholesale trade,

services, natural resources, and medical. Oil and ga s plays a prominent role in the community.

In 2010, Casper was ranked as the highest rated family

- friendly small city in the West and

ranked eighth overall in the nation. In 2010 Wyoming ranked third in business tax friendly

climate. Casper also topped the list of happiest people in 2010. The June 2011 unemployment

rate was reported as 5.9 %

, dow n from 7.7% in 2009, and significantly lower than the national

average of 9.2%.Small Community Air Service Development Program Page 7

Casper/Natrona County International Ai rport Proposal

NATRONA COUNTY HAS A DIVERSE ECONOMY

Sector % of Employment

Retail /wholesale Trade 19.7%

Government 14.5%

Services 14.3%

Health Care 12.7%

Hospitality/entertainment 10.9%

Mining 8.8%

Construction 7.7%

Finance/real estate 5.1%

Manufacturing 4.7%

Transport ation 2.3%

Source: Casper Area Economic Development Alliance

The business market is strong and diverse in Natrona County. Community leaders will continue

to support existing employers while attracting new businesses that will contribute to the

economic well being of the area. The major employers have indicated that they will use the air

service to Denver if there is a reasonable fare

.

MAJOR EMPLOYERS IN THE AREA

Casper College True Companies

City of Casper U.S. Postal Service

Hillt op National Bank Walmart

Mountain View Regional Hospital Westech/WOTCO

Natrona County Wyoming Behavioral Institute

Natrona County School District Wyoming Machinery

Poplar Living Center Wyoming Medical Center

Sheppard of the Valley Car e Cent er

It should also be noted that Casper is the media and communications center for the state of

Wyoming. There are nine television stations in Wyoming with five of them based in Casper (all

of the networks plus PBS). There are eight radio stations based in Casper. The largest

newspaper in the state is the Casper Star Tribune.

Economic Indicators

In 2010 , the Casper/Natrona County International Airport total catchment area had a popu lation

of approximately 254,260 residents with 113,370 housing units

. Total retail sales for the Airport

primary catchment area was approximately $51,632 per household. The effective buying income

for the Airport primary market area was $ 49,900 per household. Approximately 4 0% of the area

households have an annual buying income in excess of $50,000. The economic indicators for

the Airport market area are about the same as the average for the state of Wyoming.Small Community Air Service Development Program Page 8

Casper/Natrona County International Ai rport Proposal Unique Air Travel Problems of the Market Area

Due to the high airfares of United Ai rlines to Denver and beyond, a majority of passengers are

driving to Denv er as their final destination and a significant number originating their flights at

DEN to take advantage of the lower fares of Frontier Airl ines and Southwest Airlines. M ost all

of the other airports in Wyomin g have air service to Denver by Great Lakes Airlines. Even

though Great Lakes operates smaller and less efficient aircraft

, the fares are most ly lower than

the fares from Casper to Denver.



### Passenger Market for Casper

Local Market Demand

An analysis of passenger bookings was developed by Sabre Airline Solutions for the tw elve

months ending June 2010 . T he analysis came up with 203 outbound passenger bookings per day

from the Casper/Natrona County International Airport primary catchment ar ea. This equate d to

74,000 outbound passengers and total 2 96, 000 origin and destination passengers. There were

529.8 passengers per day for the total catchment area. This equates to 773,000 total origin and

destination passengers for the total catchment area.

Even tho ugh there are 12 airports in the total catchment area, t he low fare service by Allegiant

Airlines to Las Vegas from Casper/Natrona County International Airport has been responsible

for capturing 65.5 outbound passengers per day or 79% of the total passenge rs from the primary

and secondary catchment areas. On the other hand, the high fare service of United Airlines to

Denver only captured 23% share of the total market. This indicates a leakage rate of 77%.

CHOICE OF AIRPORT FOR CPR AREA PASSENGERSSmall Community Air Service Development Program Page 9

Casper/Natrona County International Ai rport Proposal The Sabre Study presented the passenger bookings from the Global Distribution System for the

total Casper/Natrona County International Airport total catchment area for a twelve

- month

period. Approximately 239 passengers per day orig inated at Casper/Natrona County

International Airport and approximately 290 passengers per day went to other airports to

originate their trips. Overall, Casper was able to retain 45% of the total passenger from its total

catchment area.

TOP CPR DESTINATI ONS FROM SABRE STUDY

Annual Outbound

Market PDEW Passengers

LAS* 82.8 30,222

PHX 19.0 6,935

DEN* 18.5 6,752

MCO 16.0 5,840

LAX 15.1 5,511

IAH 13.8 5,037

ATL 13.3 4,855

SLC* 12.0 4,380

SEA 11.5 4,198

SAN 10.0 3,650

DTW 9.5 3,468

MCI 9.0 3,285

DFW 8.9 3,249

SFO 8.8 3,212

DCA 8.1 2,956

* Current Markets Served

Sourc e: Sabre MIDT data YE June 2010

Market Stimulation

The air service by Allegiant Airlines to Las Vegas provides an excellent example of what low

fares will do for the Casper market. In 2007, prior to the entry of Allegiant Airlines, the average

o ne way fare between Casper and Las Vegas was $207.11. In 2009, after the entry of Allegiant

Airlines, the average one way fare between Casper and Las Vegas was lowered to $79.78, a

reduction of 61.5%. It is interesting to note that this new low fare air service was able to

increase the passengers in the Casper

- Las Vegas market 406 % (2007 vs. 2009)

.

High Air Fares

As mentioned earlier, the Casper air traveler is paying very high fares for travel to Denver and

beyond

. The average fare between Casper and Denver since 2006 has ranged from $.96 per mile

to $1.21. The average fare for markets in the 1

- 500 mile range in the United States in 2010 was

34.2 cents per mile. Prior to that time, the average fare was around $.49 from 1990 to 2005.

Both now and pri or to 2006, Casper had a fare level that greatly exceeded the national

average

. The high fares have forced many customer s to drive to Denver. The table on the next

page shows that as fares have doubled, the passenger demand has dropped more than half.Small Community Air Service Development Program Page 10

Casper/Natrona County International Ai rport Proposal

P ASSENGER HAVE DECLINED WHILE FARES HAVE INCREASED

IN THE CASPER

- DENVER MARKET

Local O&D Average

Year Passengers Fare Yield

1990 49,500 $111.90 $.48

1995 31,970 111.87 .49

2000 13,140 115.12 .49

2005 13,650 113.87 .49

2006 7,440 219.72 .96

2007 7,810 233.61 1.02

2008 6,640 277.49 1.21

2009 4,820 253.93 1.11

2010 6,350 228.37 .99

Source: U.S. DOT O&D data

When compared to other regional markets from Denver, the Denver

- Casper fare is two to three

times higher. Most of these markets are exclu sive United Airlines markets and are f lown with

regional jet airc raft so the disparity make s no sense.

THE CASPER

- DENVER FARE IS THE HIGHEST FARE

AND YIELD IN THE REGION

Average

Market One way Fare Mile s Yield

DEN

- CPR $228 .37 230 $.991

DEN

- BZN 134.62 523 .253

DEN

- COD 158.56 392 .378

DEN

- FAR 155.12 659 .23 5

DEN

- JAC 157.06 414 .3 8 0

DEN

- LNK 154.46 426 .367

DEN

- RAP 119.25 300 .397

DEN

- RKS 110.79 258 .407

DEN

- FSD 175.95 503 .350

So urce: DOT O&D and Fare data, 2010

The high fares continue today. A survey of current fares listed on United Airlines website for

travel to Denver from Casper in August shows that travel on one day notice results in a one way

fare without tax of $611. Booking one week in advance results in a one way fare withou t tax of

$311.50. This is the same fare for booking 14 days in advance. If you book 21 days in advance,

the one way fare without tax is $219. Booking one month in advance results in a one way fare

wi thout tax of $183.50. W ith yields ranging from $1.35 to $2.65 per mile travelers are driving

four hours to Denver.Small Community Air Service Development Program Page 11

Casper/Natrona County International Ai rport Proposal As a comparison, Great L akes Airlines operates routes from Denver to markets in Wyoming and

Colorado with rates 30% to 50% of the rat es in Casper.

THE GREAT LAKES AIRLINES FARES IN THE REGI ON ARE

MUCH LOWER THAN THE CASPER

- DENVER FARES

Average

Market One way Fare Miles Yield

DEN

- CPR $228.37 230 $.991

DEN

- ALS 91.11 179

. 509

DEN

- CEZ 110.34 276 .397

DEN

- DRO 108.33 250 .482

DEN

- FMN 112.33 28 9 .407

DEN

- GCC 108.96 313 .349

DEN

- LAR 67.83 113 .595

DEN

- PUB 66.45 108 .308

DEN

- RIW 112.68 295 .381

DEN

- SHR 118.51 258 .329

So urce: DOT O&D and Fare data , 2010

The addition of air service by Frontier Airlines in the Casper

- Denver market will lower the fares

and boost passenger demand. Frontier is a low cost carrier and a low fare carrier and has the

ability to stimulate passenger demand with lower fares. Five markets in the Mou ntain West

region served by Frontier Airlines exhibi t fare levels 50% to 75% lower than what the current

fares are in the Casper

- Denver market.

AVERAGE FARES IN MARKETS IN THE REGION SERVED BY FRONTIER

Average

Market One way Fare Miles Yield

DEN

- AB Q $80.25 352 $

. 228

DEN

- BIL 1 23.27 459 .269

DEN

- BZN 134.62 531 .254

DEN

- DRO 10 8.33 250 .482

DEN

- OMA 87.53 475 .184

S ource: DOT O&D and Fare data, 2010

If Frontier Airlines reduces the average fare to an attractive rate of $ 99 each way, th e market will

still have a rate per mile or yield of $.43 . This is an economically viable fare level and should

stimulate passenger demand in the local market and for beyond travel.

Passenger Forecast

It was previously mentioned that the Sabre leakage a nalysis indicated that Casper/Natrona

County International Airport was only capturing approximately 23% of the total passengers inSmall Community Air Service Development Program Page 12

Casper/Natrona County International Ai rport Proposal the catchment area that were booking travel to Denver or from Denver to a beyond point. In

total, the Casper/Natrona County International Airport captured approximately 45% of the total

passengers in the catchment area to all destinations. On the other hand, the low fare service by

Allegiant to Las Vegas is capturing 93% of the passengers in the Casper

- Las Vegas market.

Over the past five years, the local Casper

- Denver passenger s have averaged 6,600 per year.

Total onboard passengers have been approximately 100,000 per year. There will be stimulation

for the new low fare service and the recapture of the leaked passengers. T aking the stimulation

and leakage into consideration, it is forecasted that there are approximately 47,300 passengers

available for the low fare service by Frontier Airlines, 1 6,300 local passengers and 31,0 00

beyond passengers. Based on one round trip fl ight per day, the estimated load factor is 65.4%.

PASSENGER FORECAST FOR FRONTIER AIRLINES

IN THE CASPER

- DENVER MARKET

Local Beyond Total Segment

Passengers Passengers Passengers

C ur rent 6,600 93,400 100,000

Leaked 22,000 114,000 136,000

Total 28,600 207,400 236,000

Capture Adjustme nt 8 0% 60 %

Available Passengers 2 2,9 00 1 24,400 1 47,300

United Passengers 6,600 93,400 100,000

Frontier Passeng ers 16,300 31,0 00 47,300

Frontier Seats 72,270

Frontier Load Factor 65.4%



### Action Plan

Action Plan Elements

The goal of the Action Plan is to address issues associated with the proposed air service that are

critical to the long

- term success of that service. In this regard, this action plan will address thr ee

areas for Casper/Natrona County International Airport : (1) funding for marketing, advertising

and promotion for the new air service and for existing air service ; (2) funding to offset the start

up cost of new air service by Frontier Airlines at CPR ; and (3) funding for a revenue guarantee

for initial air service losses by Frontier Airlines in the CPR

- DEN market

.

Marketing Program

We believe that the succe ss of the previous grants under the Small Community Air Service

Development Program was due to stro ng marketing and advertising program s developed by the

sponsor s and the airline s . For this project, we are allocating $ 234 ,240 to advertising and

marketing for the new air service by Frontier Airlines to Denver and by Allegiant Airlines to

Phoenix and $ 5 0

, 000 for the existing air service . If we include advanced ticket sales , then theSmall Community Air Service Development Program Page 13

Casper/Natrona County International Ai rport Proposal marketing, advertising, public relations, and sales accounts for $ 434 ,240 or 5 3 % of the total

project.

The advertising, promotions, and public relations program are all part of a marketing p lan to

support new air service. The target market for Casper air service is a combination of local

business, leisure travel, and visiting friends and relatives in the Casper market area. The

marketing in the local area will include adv ertising, promotions, and public relations in the

twelve county region served by CPR . These mediums will be combined in a campaign to

introduce and promote the new air service and promote existing air service to Las Vegas, Salt

Lake City

, and Denver

.

The strong marketing and advertising program instituted by the community in the Casper market

will allow Frontier Airlines to concentrate its marketing and advertising funds in the Denver

market . T he mo st effective way to contact the new customer is by targe ting: (1) the traveler ; ( 2 )

the travel agent ; ( 3 ) the c orporate travel coordinator; (4 ) the business associations , and (5) social

media . All of these targets can be approached utilizing the same advertising media

– television,

radio, newspaper, magazine, direct mail, email, internet

, and billboards

.

Marketing and Media Selection

The market in the Casper/Natrona County International Airport total catchment area ca n best be

reached by using television, newspaper, radio, billboards , direct mail, online adv ertising via the

internet , and social media . Upon review of the local medium for the market, the following is

recommended.

SELECTED MEDIA FOR NEW AIR SERVICE

Media Type Media Selected Location

Television KTWO

– ABC Casper

KCWY

– NBC Casper

KGWC

– CBS Casper

Newspaper Casper Star Tribune Casper

Casper Journal Casper

Radio KWYY

- FM Country Casper

KRNK

- FM Rock Casper

KQLT

- FM Country Casper

KZQL

- FM Hits Casper

KTWO

- AM Talk Casper

KVOC

- AM Talk C asper

KKTL

- AM Sports Casper

As can be seen, Casper is the media capital for central Wyoming. The media based in Casper

will give the advertiser reach throughout the entire state. The media plan goes heavy on

electronic media with a good budget for public relations, and social media. The budget listedSmall Community Air Service Development Program Page 14

Casper/Natrona County International Ai rport Proposal below will cover the ninety day period to start of service and for six months after the air new air

service has started.

ESTIMATED MARKETING AND ADVERTISING EXPENDITURES

Cash In Kind Total

Advertising

Television $50,000 $20,000 $ 7 0,000

Newspaper $ 30,000 $15 ,000 $ 45 ,000

Radio $ 30 ,000 $ 10 ,000 $ 40 ,000

Outdoor (Billboards) $ 15 ,000 $ 5 ,000 $ 2 0 ,000

Production $ 20 ,000 $ 5 ,000 $ 25 ,000

Intern et $ 10 ,000 $ 5 ,000 $ 15 ,000

Direct Mail $ 10 ,000 $ 10 ,000

Public Relations $ 2 5,000 $ 2 5 ,000

Chamber of Commerce $ 9

, 240 $9,240

Outside Marketing Services $ 25 ,000 $ 2 5 ,000

Total $ 215,000 $69,24 0 $ 284 ,240

Advance Ticket Sales Program (Travel Bank)

The A irport will coordinate the advanced ticket sales program in cooperation with a local bank

or credit union. Based on the previous programs, it is estimated that approximately $150,000 of

tickets for service on Frontier Airlines will be purchased by various corporate accounts. The

local Bank or Credit Union will accept deposits and issue debit cards that can be used for travel

on Frontier Airlines . Allegiant Airlines targets the leisure traveler and will not need a travel

bank to support new service to Pho enix/Mesa Airport.

Cost Offset Program

There will be a cost to Frontier Airlines for the start of new air service to Casper/Natrona County

International Airport. Th e cost will include preparation of the facilities at the Airport, hiring and

training new employees for Casper, installation of communic ations equipment at the Airport, and

an open house to introduce the new air service. It is estimated that the cost of these activities

will be approximately $25,000.

Revenue Guarantee

Frontier Airlines has told the Casper/Natrona County International Airport Manager that they

would need a risk mitigation program that includes a revenue guarantee to cover initial operating

losses. Based on the analysis of our consultants, it is believed that a $ 375 ,000 reven ue guarantee

should be sufficient to support the n ew air service.

The passenger forecast on page 12 estimates 47,300 passengers per year for Frontier. This

equates to approximately 130 passengers per day in each direction. It is estimated that Frontier

Airlines will be able to have an average one way fare of $99 (after start up promotions) . This

equates to passenger revenue of $ 6, 435 p er flight or $ 386,100 per month for thirty round trip

flights

.Small Community Air Service Development Program Page 15

Casper/Natrona County International Ai rport Proposal It is as sumed that there will be a ramp

- up of passenger s during the start

- up period. Lo ad factors

are estimated to be 4 0 % for the first month and increasing to 65 % by the sixth month. It is also

assumed that the average fares will be lower in the first few months as a motivator for air travel.

The fare for the first two months is estimated to be $69, a discount of approximately 3 0%. It is

estimated that the average fare will increase until the average of $99 per local passenger is

reached. It is also assumed that there will be through passengers on board the aircraft and the

dilution for their beyond fares has been estimated to be 20 % , netting a fare of $79

.

The expense forecast is based on the estimated cost per block hour for the Frontier E

- 190 aircraft

flying from CPR to Denver and return . It is est imated that Frontier Airlines will fly at the same

block times a s the regional existing jet service. It is esti mated that the market will breakeven in

month six at a load factor of approximately 65%.

Allegiant Airlines does not require a revenue guarante e. They already provide service at Casper

to Las Vegas which has been very successful. Allegiant only requires marketing support.

ESTIMATED REVENUE GUARANTEE TO COVER FRONTIER AIRLINES INTIAL

OPERATING LOSSES FOR SERVICE FROM CASPER TO DENVER

Month Passengers Revenue Block Hrs. Expense Profit/(Loss)

One 2,370 $163,940 66 $297,000 ($133,060)

Two 2,670 $ 204,240 66 $ 2 97 ,000 ($92,760 )

Three 2,970 $2 19,780 66 $ 297 ,000 ($77,220 )

Four 3,260 $ 241,240 66 $297 ,000 ($55,760 )

Five 3,560 $ 2 81 ,240 66 $ 297 ,000 ($15,760 )

Sub Total 14,830 $1,110,440 330 $ 1,485,000 ($374,560)

Total Revenue Guarantee ($ 3 75 ,00 0)

Total Support Package

Combining the Small Community Air Service Development Program grant and local

part icipation, the Casper/Natrona County International Airport will be able to offer a very

complete package to support new service and help promote the existing air service . The

combined incentive package will create an extremely strong marketing component, cost offset

program, flight guarantee program, and a strong public/private partnership.

T he total pa ckage will be $ 815,48 0. Total Federa l participation requested is $ 500 ,0 00 with the

community providing $ 90,000 in cash, $75,48 0 of in

- kind advertising / services , and $150,000 in

a travel bank . It is estimated that $ 43 4,24 0 (5 3 %) of the incentive package will be spent on

advertising

, marketing , and ticket sales. The sponsors will contribute 38.7 % of the total

incentive package and 10.2 % of the total cash for the incentive package.Small Community Air Service Development Program Page 16

Casper/Natrona County International Ai rport Proposal

SUMMARY OF INCENTIVE PACKAGE FOR NEW AIR SERVICE

Federal Local Total

Flight Guarantee / Cost Offset $375,000 $375 ,000

Marketing, Advertising , In

- Kind $ 1 25,000 $165, 480 $ 285 ,000

Pre

- purchased tickets $ 150

, 000 $ 15 0,000

T otal $ 500 ,000 $ 335 ,480 $ 815,480

Innovative Marketing Program

The Airport has been successful in utilizing traditional and non

- traditional advertising and

marketing programs. The Airport would support additional service by a comprehensive

marketing program which could/would include:

 Extensive exposure on the Airport ’s w ebsite ;

 Extensive exposure on the Airport ’s Faceb ook ;

 Extensive exposure on the Airport ’s Twitter ;

 Chamber of Com merce e

- mail blasts ;

 Airport s peaking engagements at c ivic and social g roups ;

 Live television and radio broadcasts;

 Exposure at area events;

 Utilization of giveaways, contests, etc.;

 Extensive exposure during the I Fly Casper night and advertising exposure on the

Airport’s dasherboard (Wyoming Cavalry IFL Football);

 Advertising on the Airport’s outfield wall (Casper Ghosts Pioneer League Baseball).



### Economic Stimulus

The proposed new air service will act as an economic stimulus and generate new re venue for the

community and the Airport. The new service will bring passengers from Denver and points

beyond and will make a n economic impact to the Casper market area during this recessionary

period and in the future . It is estimated that the new Frontier Airlin es flight will deplane

approximately 2 4 ,000 passengers in Casper . A ppr oximately 1⁄2 will be new visitors (1 2,0 00)

projected to visit Casper

.

Allegiant Airlines will be selling Phoenix as a destination market for the Casper air traveler.

Based on the Caspe r

- Las Vegas experience of Allegiant Airlines, approximately 80% of the total

passengers originated in the Casper market area. Based on this experience, it is projected that

Allegiant service will produce approximately 3,000 new visitors per year to the Ca sper market

area.

Using information derived from a recent survey developed by the Casper Area Convention and

Visitors Bureau (August

– October, 2010) regarding average stay s and average expenditure s , the

new service alone is projected to contribute close to $10 million to the local economy.Small Community Air Service Development Program Page 17

Casper/Natrona County International Ai rport Proposal

VISITOR EXPENDITURES FOR NEW AIR SERVICE

Frontier Allegiant Total

Esti mated Visitors 1 2

, 0 00 3,000 15,000

Estimated Visitor Days in the area 42 ,000 10,500 52,500

Average Da ily Expenditure $230 $230 $2 30

New Visitor Expenditures $ 9,660 ,000 $2,415,000 $12,075,000

The new air service will also create new jobs at the A irport and in the local hospitality and

tourism industry. Based on industry averages for staffing and wages, an estimate of the number

of jobs has been developed. It is estimated that th e new air service will create 50 jobs in the area

and an annual payroll increase of $ 2.2 million.



### Performance Measurement and Schedule

Performance Measurement

The support package as outlined in this ap plication focuses on the Casper market area. The

marketing, advertising

, and promotional program presented herein should develop good

awareness for new airline service. Passenger response can be measured by the res ervations

volume at the airline and by th e passengers en planed and deplaned at the Casper/Natrona County

International Airport

.

The performance of the proposed air service will be tracked on a monthly and quarterly basis.

This tracking will measure the number of passengers using the new air ser vice and monitor the

airline revenue and related incentive requirements.

Monthly. The airline will provide flight segments flown, on

- board passengers and

gross revenue data. This data will be compared to the forecast projections to

measure the performa nce of the program.

Quarterly. The Sponsor will aggregate the year to date flight data, passenger statistics

and gross revenue date. The goal is for the passengers carried and the gross

revenue to exceed the projections by the sixth month.

By acceptin g the support package as outlined, Frontier Airlines will be re quested to agree to

accept the support package and the joint marketing program for a period of not less than twelve

months. This should be sufficient time to establish the viability of the new service. During this

twelve

- month period we w ill work with Frontier , and i f they are missing their projections, then

we will re

- evaluate options and work with them to adjust their service and our support program

in order to achieve sustainable operation s. After the twelve month period has lapsed, the

c ommunity and the Airport will continue to work with Frontier in supporting its ’ air service

similar to what has been done with Allegiant Airlines

.Small Community Air Service Development Program Page 18

Casper/Natrona County International Ai rport Proposal Schedule

It is the assumption of the Casper/Natrona Cou nty International Airport that the following

schedule would be employed should the grant application be successful. The Casper/Natrona

County International Airport commits to the completion of the grant, if awarded, within twenty

four months of acceptance and will diligently pursue an earlier closeout. The Casper/Natrona

County International Airport proposes the following timeline:

PROPOSED TIMELINE

Item Time Frame Estimated Date

Submission of Grant Proposal August 2, 2011

Execution of Gra nt Agreements December 2011

Airline Negotiations two months January

- February 2012

Marketing Program

Commencement 90 days p rior to Service March 2012

Completion 1 yr. after start of service

Start of Service June 2012Small Community Air Service Development Program Page 19

Casper/Natrona County International Ai rport Proposal 

### Communit y Support

The following is only a partial list of some of the community agencies and organizations who

have consistently supported the Casper/Natrona County International Airport and air service in

the Casper area.

 Natrona County

 City of Casper

 Town of Edgerton

 Town of Midwest

 Casper Area Chamber of Commerce

 Casper Area Economic Development Alliance

 Casper Journal

 Casper Star Tribune



###  KCWY News 13



###  Town square Media



###  Casper Area Convention & Visitors Bureau



###  Atlantic Aviation

– Casper



###  KTWO TelevisionSmall Community Air Service Development Program Page 20

Casper/Natrona County International Ai rport Proposal 

### Assurances

The Casper/Natrona County International Airport (hereinafter referred to as “Sponsor”) hereby

provides the U.S. Department of Transportation with the following assurances:

 The Sponsor will comply with all of the applica ble Federal laws, regulations,

executive orders, policies, guidelines, and requirements as they relate to the

application, acceptance, and use of the Federal funds for this project.

 The Sponsor has the legal authority to apply for the Small Community Air Service

Development Program grant, and to finance and carry out the proposed project; that a

resolution, motion, or similar action has been duly adopted or passed as an official act

of the applicant’s governing body authorizing the filing of the applicatio n, including

all understanding and assurances contained herein, and directing and authorizing the

person identified as the official representative of the applicant to act in connection

with the application and to provide such additional information as may be required.

 The Sponsor has access to the funds available f or that portion of the project which are

not to be paid by the United States government. The Sponsor has sufficient funds to

assure operating and maintenance of items funded under the grant agre ement, which

it will own or control.

 The Sponsor shall keep all project accounts and records which fully disclose the

amount and disposition by the recipient of the proceeds of the grant, the total cost of

the project in connection with which the grant is given or used, and the amount or

nature of that portion of the cost of the project supplied by other sources, and such

other financial records pertinent to the project. The accounts and records shall be

kept in accordance with an accounting system that w ill facilitate an effective audit in

accordance with the Single Audit Act of 1984.

 The Sponsor shall make available for the purpose of audit and examination, any

books, documents, papers, and records of the recipient that are pertinent to the grant.

 The Sponsor will execute the project in accordance with the approved program

narrative contained in the project application or with the modifications similarly

approved.

 The Sponsor will furnish such periodic reports as required pertaining to the project

and activities.Small Community Air Service Development Program Page 21

Casper/Natrona County International Ai rport Proposal



## Frontier Airline Letter of SupportSmall Community Air Service Development Program Page 22

Casper/Natrona County International Ai rport Proposal



## Allegiant Air Letter of SupportSmall Community Air Service Development Program Page 23

Casper/Natrona County International Ai rport ProposalSmall Community Air Service Development Program Page 24

Casper/Natrona County International Ai rport Proposal 

## Letters of SupportSmall Community Air Service Development Program Page 25

Casper/Natrona County International Ai rport Proposal 

## Letters of SupportSmall Community Air Service Development Program Page 26

Casper/Natrona County International Ai rport Proposal 

## Letters of SupportSmall Community Air Service Development Program Page 27

Casper/Natrona County International Ai rport Proposal 

## Letters of SupportSmall Community Air Service Development Program Page 28

Casper/Natrona County International Ai rport Proposal 

## Letters of SupportSmall Community Air Service Development Program Page 29

Casper/Natrona County International Ai rport Proposal 

## Letters of SupportSmall Community Air Service Development Program Page 30

Casper/Natrona County International Ai rport Proposal 

## Letters of SupportSmall Community Air Service Development Program Page 31

Casper/Natrona County International Ai rport Proposal 

## Letters of SupportSmall Community Air Service Development Program Page 32

Casper/Natrona County International Ai rport Proposal 

## Letters of Support