# Missouri Department of Transportation

Aviation Section

Dun and Bradstreet Date Universal Numbering System (DUNS)

Number

- 025280335 

# August 27, 2010

Missouri Department of Transportation

Aviation Section City of Columbia City of Joplin City of Kirksville
City of Waynesville 

# Proposal Under the Small Community Air Service Development Program

Docket DOT

- OST

- 2010

- 0124

M issouri Congressional District Codes:
Missouri Department of Transportation

- 09 City of Columbia

- 09 City of Joplin

- 07 City of Kirksville

- 09 City of Waynesville

- 04

# Table of Contents

Application for Federal Domestic Assistance form SF 424

Appendix B

Overview

.................................................................................................................. ....... 1

Background

............................................................................................................... ...... 1

Description of Community’s Existing Air Service

................................................... ....... . 4

Historical Service and Air Service Needs

.................................................................. ..... 5

Description of the Community’s Air Service Development Efforts over the Past Five

Years and the Results of those Efforts

........................................................... ............. 34

Strategic Plan for meeting those needs under the Small Community Program

... .... 35

Description of Any Public

- Private Partnership that will Participate in the Project

... 36

Description of Funding Necessary for Implementation of the Community ’s Project

.......................................................................................................................... 37

Explanation of How the Community will Ensure that its Own Funding Contribution is Spent in the Manner Proposed

.................................................................................... 37

Descriptions of How the Community will Monitor the Progress of the Grant Project

.......................................................................................................................... 38

Description of How the Community Plans to Continue with the Project if it is not Self

Sustaining after the Grant Award Expires

... ...................................................................38

Designation of a Legal Sponsor Responsible for Administering the Program ...............38

### 1 

# Overview

The Missouri Department of Transportation

– Aviation Section is working in conjunction with the communities of Columbia, Joplin, Kirksville and Waynesville to improve and enhance air service. We respectfully submit this proposal for marketing

funds to ass ist these communities in bringing awareness to the traveling public about the benefits provided by local air service. One goal of this application will be to provide three communities with marketing funds to promote new Essential Air Service (EAS) at thei r airport. Another goal will be to provide marketing assistance to a successful air service program at the Columbia Regional Airport. A goal of the Missouri Department of Transportation

– Aviation Section is to inform the traveling public within the stat e of all easily accessible modal choices that are available to

them.



# Background

Nine airports in the State of Missouri provide scheduled commercial airline service. Commercial service airports include Lambert St. Louis International (STL), Kansas City

I nternational (MCI), Springfield

- Branson National (SGF), Columbia Regional (COU), Joplin Regional (JLN), Waynesville

- St. Robert Regional (TBN), Cape Girardeau Regional (CGI), and Kirksville Regional (IRK). The ninth airport, Branson Airport (BKG), is a pri vately owned commercial service airport that opened in May, 2009.

In 2000, the State of Missouri accommodated over 20 million annual enplanements at eight commercial service airports. As with airports across the country, the effects of
9/11 had a deva stating impact on commercial airline service. In Missouri, this was

### 2 coupled with a significant reduction in flights by American Airlines at Lambert

- St. Louis

International in 2003. These two factors led to considerable decreases in enplanements from 2000 to 2004 at the state level. The comb ination of these two

events has had a dramatic negative effect not only on Lambert, but at the smaller airports in the state as well.

The graph below compares Missouri’s statewide passenger enplanements with state levels in Arizona and Washington. The comparison to the states of Washington and Arizona is used because the three states maintain similar population totals. Missouri has responded differently since 9/11 in enplanement activity. As shown on the graph

be low, all three states felt the effects of 9/11 but did not also experience a substantial service reduction from a legacy carrier, thus the impact to Arizona and Washington was less dramatic than it was to Missouri and these states have subsequently

rebound ed and surpassed pre

- 9/11 enplanement levels.

This dramatic decrease in passenger enplanement activity, principally at Lambert

- St. Louis International Airport, has played a role in the ability of the state’s smaller commercial service airports to provide adequate air service from their local

communities.

A number of factors come into play when the traveling public is considering using their local airport. These factors could include but would not be limited to: fares or
cost, aircraft size, code

- shar ing availability with a major carrier, flight schedules, service reliability and service convenience.

Along with these challenges, the four airports participating in this application are also faced with competition from the larger commercial service air ports in the state. Both Lambert and Kansas City International have substantially larger service levels and have historically provided a competitive fare structure.

A 10 percent ticket sample of all airline tickets sold annually in the state is used to

i llustrate this point. As part of this sampling process, USDOT publishes information on 11.8 12.4 13.0 13.4 12.5 11.7 21.9 23.0 23.4 23.7 22.4

16.1 16.5 16.9 17.8 18.3

0.0 5.0 10.0 15.0 20.0 25.0

2004 2005 2006 2007 2008 2009(E)Enplanements



### Calendar Year Statewide Passenger Enplanements (In Millions)

MO

AZ

WA

### 3 the average one

- way fare for all airports. The table below provides this information for the eight commercial service airports in the state.



### Average One

- way Fares

Miss ouri Airports, Selected Years 2000

- 2007

A i r p o r t

N a m e 1 9 9 0 1 9 9 5 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7

Cape

Girardeau 146.54 156.04 154.99 155.04 152.95 161.11 205.92 181.77 202.66 170.07

Columbia 166.46 182.34 179.13 188.02 173.52 174.80 185.91 174.60 165.07 143.37

Kirksville .00 80.90 78.11 161.14 137.13 175.68 166.13 170.70 155.85 120.62 Joplin 200.98 210.33 180.65 179.23 178.53 200.55 192.78 185.36 155.39 133.70 Kansas City

Int’l. 123.98 114.08 130.98 121.70 117.98 118.35 121.48 128.60 133.53 132.87

Springfield 162.94 162.48 189.05 173.18 162.84 170.42 176.96 165.58 192.14 192.74

St. Louis

Int’l. 144.49 127.82 156.13 142.97 131.05 137.69 138.72 137.21 143.86 140.98

Waynesville 144.09 188.30 182.84 184.68 216.95 240.11 283.72 267.50 301.00 238.22

All MO Airports 137.07 123.54 145.87 134.33 126.41 130.08 132.33 134.72 141.13 139.13

All US Airports 143.81 138.69 157.23 145.55 136.44 138.19 134.37 137.13 149.49 149.04

Information in this table shows average one

- way fares for each airport and Missouri’s weighted average for all one

- way fares from the eight airports. In addition, Missouri’s average annual one

- way fare is compared to the U.S. average for the same year. As this information shows, while some of the smaller commercial airports in Missouri have had average one

- way fares that exceeded the national average, both Kansas City International and Lambert

- St. Louis International have had average one

- way fares that have consistently been below the national average. This finding accounts for the fact that Missouri’s average

- one way fare has consistently been below the U.S.

average.

While there are many factors that have contributed to smaller commercial airports in Missouri facing diminished levels of airline service and falling passenge r counts, the comparatively lower fares at both Kansas City International and Lambert St. Louis International have contributed to the redistribution of Missouri’s departure patterns

for commercial airline travelers.

Recognizing these challenges, the state aviation community worked with the Missouri State Legislature in 2008 and pursued a change in state statutes to expand the eligibility of State Aviation Trust Funds. The State Aviation Trust Fund is a fund that uses a portion of the sales tax on jet fuel sold within the state for capital and maintenance improvement projects at airports. This state program is similar to the Federal Aviation Administration’s Airport Improvement Program. The expanded eligibility included funding for the study or promotion of expanded domestic or international scheduled commercial service, the study or promotion of intrastate scheduled commercial service, or to assist airport sponsors participating in a federally funded air service program supporting intrastate scheduled com mercial service.

Three of the four the communities participating in this application are Essential Air Service communities. This application is for marketing efforts to enhance new Essential Air Service that will be starting at three of the four communiti es this fall. Marketing funds will also be used at the Columbia Regional Airport for their existing service which has been successful in coming off EAS. It is proposed that federal DOT

### 4 funds pursued as part of this application will be utilized with state and local funds to increase marketing efforts at these four small commercial service airports.



# Description of Community’s Existing Service

Columbia Regional Airport Columbia Regional Airport is currently served by the Delta Connection (Mesaba) with service to Memphis. The carrier maintains three flights per day Sunday through Friday and two flights on Saturday. The service is provided to Memphis in Canadair Regional jet aircraft. Fares are determined at the time reservations are made.



### Joplin Regi onal Airport The Joplin Regional Airport is currently served by Great Lakes Airlines with service to Kansas City International Airport. The carrier maintains three flights per day. The service is provided to Kansas City using Beechcraft 1900 aircraft. F ares are determined at the time reservations are made. New EAS service is proposed for the Joplin Regional Airport starting in October, 2010.



### Kirksville Regional Airport Kirksville Regional Airport is currently served by Air Choice One with service to

La mbert St. Louis International Airport. The service includes two round trips on weekdays and one round trip on Sundays. Fares are determined at the time reservations are made. New EAS service will begin in Sept ember when CapeAir begins service between Ki rksville and St. Louis International Airport.



### Waynesville Regional Airport The Waynesville Regional Airport is served by Great Lakes Airlines. Great Lakes operates three round trips per day to Kansas City using Beechcraft 1900 aircraft.

Fares are determ ined at the time each reservation is made. A significant number of enplanements at TBN are milit ary. New EAS service is scheduled to begin in

Wa ynesville in the Fall of 2010.

The following exhibit displays the current air service provided by the four ai rports

### 5 

## Daily Flight Summary



# Historical Service and Air Service Needs

Columbia Regional Airport (COU)

COU Catchment Area

The reasonable catchment area of Columbia Regional Airport represents an area within an approximately 60

- minute drive of the airport. The north end of the catchment area reaches that of Kirksville Regional Airport, while the south end

extends to that of W aynesville/Fort Leonard Wood. On the east and west sides the catchment area extends along Interstate 70, overlapping with the catchment areas of St. Louis and Kansas City, respectively.

The catchment area includes a population base of approximately 376,000 people and an average household income of approximately $52,000 dollars a year. This results in

COU r anking #1 among the four Missouri airports in this application , both in terms of population and income. The Columbia area experienced strong househ old income growth during the 1990s, far outpacing real dollar level of inflation. Population growth during the 1990s was also strong, averaging 4.9% per year, a level only exceeded by

the Fort Leonard Wood area.

The largest employer in the region is the U niversity of Missouri, with over 30,000 enrolled students and approximately 8,500 employees. The university’s hospital system generates an additional 4,500 jobs. Columbia Regional Airport also serves as the primary commercial airport for the State Capital in Jefferson City, which generates government related travel.

### 6 

# Columbia Regional Airport

Traffic Catchment Area

1990 2000 2007 % Change % Change 90-00 % Change 00-07

$29,451 $43,986 $51,764 75.8% 49.4% 17.7%

1990 2000 2007 % Change % Change 90-00 % Change 00-07

311,430 358,207 375,801 20.7% 15.0% 4.9% Average Household Income

Population

### 7 Service History

Since the beginning of the decade, Columbia has received service from four different

airlines:

**•** Between 2000 and 2006, service to St. Louis was provided by Trans States Airlines doing business first as Trans World Express and then transitioning to
American Connection in 2001;

**•** For a brief period in 2000 and 2001, Columbia had a “hometown airline” th at returned the Ozark Airlines brand to the skies and offered regional jet service to Chicago and Dallas; 1

**•** From 2006 to 2008, Air Midwest provided service to Kansas City that was code

shared with both US Airways and Midwest Airlines; and

**•** Since 2008, Columbia Regional Airport has been served by Mesaba Airlines operating as Delta Connection (formerly Northwest Airlink) providing 20 weekly roundtrips to Memphis onboard 34

- passenger Saab 340 turboprops. Recently, this service has been upgrade d to Canadair Regional Jet service.

Arguably, the current air service at COU is the best the airport has experienced at any point in the dec ade and superior to the other three Missouri airports that are the focus of this application

. At Memphis, Columbia passengers have online access to 83 domestic destinations and 3 international destinations, including the SkyTeam global

alli ance with nonstop service Amsterdam (see next page).



# Delta Air Lines

– MEM Hub

Nonstop Destinations: November 2009

SOURCE: Schedule data from Innovata , LLC extracted using Airports:USA ® DataMiner TM

1 Ozark Airlines was unprofitable, sold to a group in Oklahoma, rebranded as Great Plains Airlines, and subsequently went bankrupt. Columbia Regional Airport was briefly

home to a “hometown airline” that attempted to reestablish the Ozark

Airlines brand.

### 8 

# Delta Air Lines

– MEM Hub Operations
Departures and Arrivals by Hour: November 2009

Traffic Trends at COU

The strength of the current Delta Connection service is r eflected in recent O&D traffic trends. For a majority of the decade, traffic at Columbia was steadily declining albeit

at a slower rate t han other airports in this application

.

Restoration of branded service in late 2008 has resulted in a sharp rebound of traffic, currently projected to reach levels of service not seen since 2001. The experience of COU underscores the importance of branded, code

- share service in building traffic levels at EAS airports

. This is illustrated on the graph and table below. 2

2 2009 data is Boyd Group International’s estimate based on T

- 100 data through July, extrapolated for the

remainder of the year based on historical seasonality. 0 10 20 30 40 50 60

Departures Arrivals

### 9 

# C OU O&D Passenger Trend

CY 2000

– CY 2009



# COU Air Service & Traffic Trend

CY 2000

- July 2009

Traffic Generation & Capture Rates

An aviation consultant hired by MoDOT estimates approximately 650,000 O&D passengers are generated within the Columbia Regional Airport catchment area on an annual basis. Notwithstanding the quality of current Delta Connection service, easy

access via I

- 70 to extensive low

- fare service at both St. Louis and Kansas City results in leakage of over 90% of all tra ffic generated in the catchment area.

To quantify the impact of competitive service St. Louis and Kansas City , the consultant calculated traffic leakage in Columbia’s top 25 O&D markets for the fourth quarter of 2008 and the first quarter of 2009, represe nting the first two full quarters operated by Mesaba Aviation dba Delta Connection. These markets represent 76.6% of all

Columbia traffic. 3

3 Metro area markets have been consolidated such that, for example, the LA Basin includes O&D traffic to and from all five airports in the greater Los Angeles metropolitan area. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

Psgr. 67,985 45,801 45,600 41,513 35,569 39,542 27,245 18,972 21,335 48,638

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Load Factor 34.4% 33.6% 50.2% 50.1% 50.1% 52.3% 48.7% 41.4% 44.4% 69.7%

Passengers 67,985 45,801 45,600 41,513 35,569 39,542 27,245 18,972 21,335 28,443

Daily Deps. 9.1 6.2 4.3 4.0 3.3 3.7 2.5 3.4 3.6 2.9

Daily Seats 540 376 250 232 190 214 153 130 168 194

Aircraft Type J-41,

D328Jet J-41,

D328Jet J-41 J-41 J-41 J-41 J-41, Beech

1900 Beech 1900 Beech 1900,

Saab 340 Saab 340

Destinations STL, DFW,
MDW, JLN STL, JLN, MDW STL STL STL STL STL, MCI STL, MCI MCI, MEM MEM

Airlines TW/ZO AA/ZO AA AA AA AA ZV/AA ZV ZV/NW DL

Gross OW Fare $243.28 $231.14 $205.48 $212.70 $226.71 $222.03 $244.85 $258.58 $220.29 $203.74

### 10 

# Estimated COU Traffic Leakage Rates
Top 25 Markets: 4 th 

## Qtr 2008 & 1 st 

## Qtr 2009

As illustrated, this analysis revealed that Columbia Regional Airport is leaking approximately 317,500 enplanements on annualized basis.

It is noteworthy that over the past two quarters Columbia has recaptured a significantly higher number of international passengers. From 2000 to 2006, air service at Columbia Regional Airport generated approximately 700 annual O&D international passengers. Since service was initiated by Mesaba/Delta Connection, however, international passengers have comprised approximately 3% of all O&D traffic, pu tting the airport on pace to capture approximately 1,200 annual international O&D passengers.

Assuming air service quantity and quality on par with current levels, and assuming no major change in air service at STL o r MCI, the MoDOT air service consulta nt projects that Columbia Regional Airport could reasonably capture a maximum of 50,000 to 60,000 annual O&D passengers. 4

Regional Distribution of Traffic

4 It is noted that Columbia exceeded th is number during 2000, however this was a “bubble” largely attributable to Ozark Airlines and is unlikely to be repeated in the foreseeable future. Market COU Captured
Passengers Total Regional Passenger Enplanements (COU, MCI, & STL) COU % COU Catchment Area

Generated Enplanements COU Leaked
Enplanements

Dallas 1,675 449,896 0.4% 31,628 29,953

Memphis 1,600 20,247 7.9% 1,423 0

Baltimore/Washington 1,656 445,166 0.4% 31,295 29,639

Orlando 1,287 335,306 0.4% 23,572 22,285

Austin 983 80,886 1.2% 5,686 4,703

New York 976 362,124 0.3% 25,457 24,481

Atlanta 928 284,905 0.3% 20,029 19,101

Houston 911 192,351 0.5% 13,522 12,611

Tampa 747 183,769 0.4% 12,919 12,172

Detroit 747 158,214 0.5% 11,122 10,376

Philadelphia 611 178,075 0.3% 12,519 11,908

San Antonio 592 103,095 0.6% 7,248 6,655

Raleigh-Durham 591 87,443 0.7% 6,147 5,556

New Orleans 582 75,609 0.8% 5,315 4,733

Columbus 564 76,176 0.7% 5,355 4,791

Phoenix 563 294,281 0.2% 20,688 20,125

LA Basin 553 419,571 0.1% 29,496 28,943

Nashville 510 87,563 0.6% 6,156 5,646

South Florida 465 237,498 0.2% 16,696 16,231

Cleveland 455 107,871 0.4% 7,583 7,128

Birmingham 385 33,831 1.1% 2,378 1,993

Oklahoma City 292 64,092 0.5% 4,506 4,214

Boston 288 129,766 0.2% 9,123 8,835

Greensboro 277 9,974 2.8% 701 424

Denver 275 347,164 0.1% 24,406 24,131

Pensacola 260 15,805 1.6% 1,111 851

Total 18,773 4,780,678 0.4% 336,082 317,485

Dallas = DFW, DAL | Houston=HOU, IAH | Baltimore/Washington=BWI, IAD, DCA | New York=LGA, EWR, JFK | LA Basin = LAX, ONT, BUR, SNA | South Florida = MIA, FLL

### 11 R egional distribution of t raffic is partially a factor of communit ies interest but also impacted by the specific air service offered at a particular airport and, therefore, levels of traffic captured. Shifts in regional distribution of traffic at Columbia that coincide with shifts in air service support this assertion.


# Shifts in Regional Distribution of Traffic at COU
Market Response to Changing Airline System s and Hub s

As illustrated on the above maps, distribution of traffic “shifts” based on the orientation of the service offered by a specific airline. In other wo rds, when percentages of total traffic shift between regions it does not necessarily translate into a underlying or fundamental shift in demand. Rather, it provides a gauge of how current or historical service levels met market demand for travel to a speci fic region by offering convenient and competitively priced connecting options. For example, demand as a percentage of passengers doubled in the far west region as a result of service to Kansas City on Air Midwest. Likewise, Delta Connection service has res ulted in a doubling in the demand a percentage of passengers to the southeast region.

It is recognized that new nonstop service, especially when accompanied by a
reduction in fares, can stimulate “net new” demand, as is often the case when an

airline su ch as Southwest or AirTran enters a market. 

### However, in a market such as Columbia, resultant levels of stimulation are likely too small particularly when the relatively small increments of capacity offered are considered.

### 12 Pricing & Fares

The MoDOT air se rvice consultant analyzed average gross fare paid at Columbia relative to those paid at MCI and STL for the first quarter of 2009 with the intent of determining whether such were a major cause of traffic leakage. 5 As illustrated on the graphs on the follow ing pages, fares at COU are generally competitive with neighboring airports and, therefore, not believed to result in significant traffic leakage. Rather, convenience of nonstop service and higher frequencies are likely greater

factors.

Of note and as ill ustrated on the following g raphs, the consultant found that (in most cases) Delta’s pricing at COU appeared to focus more on remaining competitive with nearby St. Louis and Kansas City rather than simply pricing the market at MEM plus

an add

- on (either fla t fee or percentage), which is often the strategy employed in EAS markets. We believe the rebound in Columbia passenger traffic reflects the success of this pricing strategy and efforts should be made to ensure it continues

.



# Columbia

– Dallas/Fort Worth
Average Gross OW Fare Paid: 1 st 

## Quarter 2009

SOURCE: Airports:USA ® DataMiner TM

5 Gross fare includes all taxes and fees. Columbia Memphis St. Louis Kansas City

Gross OW Fare $115.01 $225.38 $126.24 $129.74 $0.00 $50.00 $100.00 $150.00 $200.00 $250.00

Columbia

Memphis

St. Louis

Kansas City

### 13 

# Columbia

– Baltimore/Washington
Average Gross OW Fare Paid: 1 st 

## Quarter 2009

SOURCE: Airports:USA ® DataMiner TM

To Dallas, Columbia’s largest O&D market, consumers using COU had the lowest average fare of the compared airports. To the Baltimore/Washington metro area, COU’s average fare is only $30 to 40 dollars higher than either St. Louis or Kansas City, less than the cost of driving from Columbia and parking at either ci ty.



# Columbia

– Los Angeles Basin
Average Gross OW Fare Paid: 1 st 

## Quarter 2009

SOURCE: Airports:USA ® DataMiner TM Columbia Memphis St. Louis Kansas City

Gross OW Fare $231.11 $247.64 $199.50 $191.48 $0.00 $50.00 $100.00 $150.00 $200.00 $250.00 $300.00

Columbia

Memphis

St. Louis

Kansas City

Columbia Memphis St. Louis Kansas City

Gross OW Fare $270.23 $256.94 $215.42 $180.63 $0.00 $50.00 $100.00 $150.00 $200.00 $250.00 $300.00

Columbia

Memphis

St. Louis

Kansas City

### 14 

# Columbia

– Orlando
Average Gross OW Fare Paid: 1 st 

## Quarter 2009

SOURCE: Airports:USA ® DataMiner TM

Fares between Columbia and the Los Angeles basin are higher than St. Louis or Kansas City, but slightly lower than Memphis which is interesting when considering the fact that Delta has to carry a COU passenger over MEM on the way to or from Los Angeles.

The average fare premium paid by Orlando passengers at COU is only $20 dollars, easily cheaper than driving and parking at STL or MCI. However, in leisure markets of this nature such a differential is often sufficient to drive traffic leakage. For a family of five this equates to $100 each way, or $200 roundtrip. Columbia Memphis St. Louis Kansas City

Gross OW Fare $166.04 $141.46 $150.12 $144.50 $0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 $160.00 $180.00

Columbia

Memphis

St. Louis

Kansas City

### 15 

# Columbia

– New York City Area
Average Gross OW Fare Paid: 1 st 

## Quarter 2009

SOURCE: Airports:USA ® DataMiner TM

Like the LA Basin, average fares paid at Columbia to and from New York City are higher than St. Louis or Kansas City. Going forward, it is reasonable to expect that approximately $40 gap will increase given Southwest’s recently entry into New York

LaGuardia, which will put downward pressure on fares to both STL and MCI.



### Jop lin Regional Airport (JLN)

JLN Catchment Area

Geographically, the catchment area of Joplin Regional Ai rport is the largest of the four Missouri airports in this application and reaches into three states: Missouri, Oklahoma, and Kansas. The northern reaches of the catchment area bound that of Kansas City International Airport, which as outlined below, is a major source of traffic leakage. The eastern fringes of the catchment area share traffic with Springfield

- Branson National Airport, which provides access to multiple airline brands and leisure service by Allegiant Air, while the western fringes are shared with Tulsa, which offers access

to low

- fare carriers Southwest and Fr ontier. 6

The JLN catchment area has a population of approximately 300,000 with an average household income of approximately $45,000. Since 1990 and relative to the other

Missour i markets analyzed in this application , Joplin has been in the middle of the pack in terms of both population and household income growth.

6 The northwest quadrant of the catchment area likely leaks some t raffic to Wichita, which has multiple

national airline brands and limited low

- fare service from AirTran Airways.

### 16 

# Joplin Regional Airport

Traffic Catchment Area

Like most communities around the US, Joplin has experienced economic challenges during the curre nt recession albeit not the same degree as others. During September 2009, unemployment in the Joplin area was 7.8%, two full points below the national

average. 1990 2000 2007 % Change % Change 90-00 % Change 00-07

$25,365 $38,611 $45,170 78.1% 52.2% 17.0%

1990 2000 2007 % Change % Change 90-00 % Change 00-07

262,958 291,810 300,719 14.4% 11.0% 3.1% Average Household Income

Population

### 17 A key factor in this may be Joplin’s diverse economic base. Major employers include

Freeman H ealth System (3,200 people), Conway Truckload Corporation (2,700 people), Leggett & Platt (2,400 people), and a relatively new AT&T call center. Joplin also serves as the agricultural center for southern Missouri and southeastern Kansas.

Service Histor y & Traffic Trend

During 2000, Joplin Regional Airport was served by three airlines providing service to five nonstop destinations:

**•** Trans States Airlines dba Trans World Express to St. Louis;

**•** Express I Airlines dba Northwest Airlink to Memphis and Louisville; and

**•** Ozark Airlines to Dallas/Fort Worth and Chicago, tied to Columbia.

I n early 2001 Ozark was sold to a group that moved the airline to Oklahoma and discontinued service in Missouri. Following the September 11 terrorist attack s, Express I restructured its fleet and, along with a temporary downsizing of the Memphis hub by Northwest, discontinued service at JLN during 2002.

This left Tran States as the sole provider of service at Joplin Regional Airport for approximately three years. During this period, service was incrementally reduced in response to downsizing of the STL hub and a run

- up in fuel prices. 7 During 2006, Trans States discontinued all turboprop operations and exited the market.

Air Midwest was selected as th e provider of Essential Air Service at Joplin, serving both Kansas City and Dallas/Fort Worth. In 2008, Air Midwest closed its doors as

economics of 19

- seaters became increasingly challenged and parent

- company Mesa Air Group began to implement a strategic restructuring.

After a period without any service, Great Lakes Aviation initiated EAS service at Joplin, operating three roundtrips each weekday (reduced frequencies on weekends) to Kansas City with Beechcraft 1900D equipment at an annual subsidy rate of $997,700. The current EAS contract is set to expire on September 30, 2010.

As would be expected, the declining levels of air service have resulted in concurrent declines in passenger traffic. Annual passengers utilizing Joplin Regional Airport have declined from 66,589 during 2000 to just 9,700 during 2008

– a decrease of 85%.

7 While Trans States had previously operated as Trans World Express, during this period it was operating as

American Connection.

### 18 

# JLN O&D Passenger Trend

CY 2000

– CY 2009

NOTE: Data for 2009 is forecast based on T

- 10 0 filings through July 2009 with the balance of year adjusted to reflect market sesonality.



# JLN Air Service & Traffic Trend

CY 2000

- July 2009

Of all the Mi ssouri communities in this application , Joplin experienced the most dramatic decline in air service and traffic over the past decade. From three airlines nonstop service to five destinations and nearly 67,000 passengers in 2000, to one airline, one destination, and less than 10,000 passengers in 2009. The events at Joplin encapsulate the challenge facing air service at small communities, not only in Missouri

but across the United States. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Psgr. 66,589 59,892 52,683 29,426 20,604 19,415 21,966 29,505 9,700 7,432

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Load Factor 38.3% 39.8% 62.2% 46.4% 47.7% 48.7% 51.0% 58.0% 28.6% 20.1% Passengers 66,589 59,892 52,683 29,426 20,604 19,415 21,966 29,505 9,700 4,346 Daily Deps. 7.6 6.6 3.7 2.9 2.0 1.8 2.5 3.7 2.4 2.6 Daily Seats 476 412 232 174 118 109 118 140 93 101

Aircraft Type J-41, J-31,
D328Jet,

Saab 340 J-41,
D328Jet,

Saab 340 J-41, Saab

340 J-41 J-41 J-41 J-41,

B1900 B1900 B1900 B1900

Destinations STL, MEM,
DFW, COU,

SGF STL, MEM,
DFW, COU,

SGF STL, MEM STL STL STL STL, DFW,

MCI MCI, DFW MCI MCI

Airlines Trans

States/

Ozark/
Express I Trans

States/

Ozark /Express I Trans

States/ Express I/

Pinnacle Trans

States Trans

States Trans

States Air

Midwest/

Trans

States Air Midwest Air

Midwest/

Great

Lakes Great

Lakes

Gross Average

OW Fare $229.82 $212.63 $216.98 $243.99 $234.52 $238.06 $249.88 $227.95 $252.74 $235.55

### 19 In 2002

, over 52,600 passengers utilized Joplin Regional Airport. This passenger count exceeds that gen erated by t he three airports in a Delta Eight EAS docket

– Eau Claire, WI; Hancock/Houhgton, MI; and Paducah, KY

– and which were awarded to SkyWest Airlines dba United Express using 50

- seat regional jets. With US DOT apparently more open to regional jets in the Essential Air Service pr ogram, the MoDOT aviation consultant has suggested that Joplin begin the dialouge now with potential carr iers to

educate them on the potential of the Joplin market with the aim of receiving multiple

bids when the Great Lakes Aviation contract expires in September 2010.

Traffic Generation & Leakage

Based on population and the economic base, the catchment area of Joplin Regional Airport generates approximately 250,000 O&D passengers annually. With enplanements during 2009 forecast to be approximate ly 7,400, the market presently suffers a leakage rate of 98 percent. If, as outined above, improvements in air service

can be achieved it is estimate d that traffic at Joplin could reach 50,000 annual O&D passengers, reducing the leakage rate to approximate ly 80 percent.

The primary leakage points for Joplin are Kansas City International Airport and Tulsa International Airport, both of which are within reasonable driving distance and provide

access to low

- fare carrier service.

**•** Tulsa International Airport is approximately 120 miles (two hours drive time ) away, and receives nonstop service from four Comprehensive Network Carriers (American, Continental, Delta, and United) and two Low

- Cost Network Carriers (Southwest and Frontier). Tulsa provides travelers wi th an average 5,767 seats on 62 daily departures to 17 nonstop destinations. Approximately 39% of the departing seats each day on the Low

- Cost Network Carriers. 8

8 Schedule dat a for both TUL and MCI is for October 2009 and sourced from Innovata, LLC via Airports:USA ® DataMiner TM Traffic leakage at Joplin Regional Airport is estimate d to approximate 98 percent. This is the result of

insufficient air service under th e current EAS contract, as well as traffic leakage to low

- fare carriers at MCI and

TUL.

### 20 

# Nonstop Service from Kansas City International Airport (MCI)

October 2009

SOURCE: Schedule data from Innovata, LLC extracted using Airports:USA® DataMinerTM



# Nonstop Service from Tulsa International Airport (TUL)

October 2009

SOURCE: Schedule data from Innovata, LLC extracted using Airports:USA® DataMinerTM

### 21 **•** Kansas City Intern ational airport is approximately 190 miles (two hours and 45 minutes drive time) away, and provides travelers with the choice of seven CNC brands (Air Canada, America, Continental, Delta, Midwest, United, and US Airways) three low

- cost network carriers (Ai rTran, Frontier, and Southwest), and

Great Lakes Aviation. 9 Collectively, these carrier s offer an average of 19,275 departing seats on 186 departures to 50 destinations. Approximately, 46% of the daily departing seats from MCI are on Low

- Cost Network Carri ers.

Compare these service patterns, as illustrated on the maps on the previous page, with the single carrier offering service to a single destination currently available at Joplin Regional Airport.

While Tulsa is closer than Kansas City to Joplin, and t he drive on Int erstate 44 is
easier to TUL, we believe the greater choice of carriers and overall availability of low

fare seats at MCI negates much of this advantage, resulting in a fairly even split of traffic leakage to the two airports.

A secondary p oint of traffic leakage for Joplin is Springfield

- Branson National Airport. While at approximately 70 miles (one hour and 20 minutes), SGF is a shorter drive than either MCI or TUL, the options this airport offers to travelers is significantly less

than th e former two. It offers access to three CNC brands, and one leisure carrier (Allegiant Air) and 1,515 seats on an average of 27 daily departures. Equally as important, there is little economic incentive for utilizing SGF given that, on average,

passengers using Joplin Regional Airport pay a lower fare. 

# Average Gross OW Fare Paid

YE 1Q2009: JLN, MCI, TUL, SGF

$246.87

$176.93 $195.35 $262.56

$0.00 $50.00 $100.00 $150.00 $200.00 $250.00 $300.00

Joplin Kansas City Tulsa Springfield/Branson

SOURCE: Airports:USA ® DataMiner TM

Of the four Mi ssouri communities in this application , Joplin appeared to have the strongest level of international O&D demand during the first six years of the decade,

9 Midwest Airlines is not a CNC is the sense of network breadth, however its fundamental pricing model does not categorize this airline as Low

- Cost Netwo rk Carrier either.

### 22 averaging approximately 1,000 passengers annually. Reductions in service during the latter half of the decade, and particularly loss of branded airline service with international destinations as a route network component, has resulted in a decline of

inter national passengers at JLN to less than 100 annually.

As with domestic traffic, the decline in international passengers does not reflect shrinking demand but rather passengers in the Joplin Regional Airport opting to utilize other airports with greater frequency (i.e., increased traffic leakage).

Regional D istribution of Traffic

At most airports, regional distribution of traffic skews toward those regions where
convenient connections are available. This was illustrated above at Columbia, where traffic was weighted toward the southeast United States due to t hat region being the primary orientation of the Memphis hub. Amplifying this situation in markets with significant traffic leakage is the breadth of service at those airports where traffic is leaking. For example, there’s little economic incentive for a p assenger to pay an “add

on” fare from JLN to MCI for a connection to Las Vegas when there are multiple nonstops from both MCI and TUL, and both airports are a reasonably convenient

drive.

Regional distribution of traffic at Joplin Regional Airport has shi fted as service options at the airport dissipated. As with other markets, while there may be minimal shifts in true demand resulting from changes in communities of interest, on a macro

- level this is less likely the result of changing demand but rather chan ges in how air service

meets demand.

As the maps on the next page illustrate, the loss of connections via hubs other than MCI has resulted in significant shifts of a regional distribution of traffic. What is hidden in the shifting percentages, however, is the large increase in the amount of traffic leakage that the airport experiences, which is best reflected by the overall declining numbers of passengers.

Equally as important, what the data does not show are the large number of “hidden

connections” t hat result from passengers utilizing two separate tickets for a single itinerary. In these instances, a passenger may buy a ticket from Joplin to Kansas on Great Lakes Aviation and then a separate ticket on AirTran Airways to Atlanta. This
traffic, because it is two separate tickets, tends to understate the true market demand

between JLN and Atlanta and then overstate market demand between JLN and MCI as well as between MCI and ATL. While such ticketing practices are believed to be a relatively low percenta ge of all itineraries, in a market with as few total passengers as Joplin it can easily alter the validity of data. This is illustrated by the change in traffic percentages to the Plains region increasing from 9.1% of total traffic during 2000 to

over 27% of traffic in 2009. International traffic at Joplin Regional

Airport has declined by 90% from approxima tely 1,000 O&D passengers annually early in the decade to presently less than 100 per year

.

### 23 

# Regional Distribution of Traffic at JLN

2 nd 

## Quarter 2000 v 2 nd 

## Quarter 2009

### 24 The point is two

- fold: First, it is unlikely that fundamental traffic demand at Joplin

shifted as much as indicated between 2000 and 2009. Rather, because of changes in air service, what changed was the profile of the traffic that the airport captured. Second, during 2000 Joplin Regional Airport had a wider breadth of air service and captured a larger percentage of overall traffic generated i n the region thereby minimizing the statistical impact of small shifts in regional demand. Based on this, the

MoDOT aviation consultant believes it provides a more accurate representation of regional demand distribution in the Joplin catchment area, both in 2000 and 2009.



### Kirksville Regional Airport (IRK)

IRK Catchment Area

Kirksville is the smallest of all airports analyzed as part of this study, serving a catchment population area of less than 68,000.

The economic base of Kirksville’s catchment area is diverse. It is composed of agriculture, manufacturing, and a plethora of regional health care facilities. The community serves as a regional hub for retail, health care, and higher education.

The p opulation has remained static. The area did experience a period of strong income growth during the 1990’s, however this slowed during t he current decade. Of the four markets in this application , Kirksville experienced the slowest rate of income growth and as a result of its rural location, has the lowest ave rage household income.

Kirksville has two universities and a community college

- Truman State University, A.T. Still College of Osteopathic Medicine, and Moberly Area Community College.

Kraft Foods operates a meat processing plant as well as manufacturer s exist in medical equipment, commercial envelopes, steel and wood products, and electronic

sensors. Also within the catchment area but outside of Kirksville are value add ed agricultural manufacturers

– Farmland Industries Hog Slaughter Plant in Milan,

eth anol production and recycling manufacturers in Macon, and other small manufacturers in Marceline and Brookfield. While many of these industries typically are drivers of traffic demand, the overall lack of population of this rural area points to relatively low generation of passenger traffic aroun d Kirksville Regional Airport. Moreover, and as discussed below, both the more comprehensive service at neighboring metropolitan airports captures the majority of the limited traffic that is generated and the histo rical unreliability of past air service in Kirksville reduces passenger numbers.

### 25 

# Kirksville Regional Airport

Traffic Catchment Area

Market Service History & Current Service

Since the beginning of the decade, Kirksville has been served by three carriers. Redwing Airways, which was based at Kirksville Regional Airport, shut down in late 2000 and was replaced by RegionsAir operating Jetstream 31 aircraft under the Trans

World Ex press banner and later as American Connection. This provided the market 1990 2000 2007 % Change % Change 90-00 % Change 00-07 $22,730 $35,784 $41,036 80.5% 57.4% 14.7%

1990 2000 2007 % Change % Change 90-00 % Change 00-07

67,299 68,841 67,624 0.5% 2.3% -1.8% Average Household Income

Population

### 26 with branded service to St. Louis. Following revocation of RegionsAir operating certificate, service was provided by Air Midwest to Kansas City for a brief period until

that carrier ce ased operating during 2008 for economic reasons. 10



# IRK O&D Passenger Trend

CY 2000

– CY 2009

SOURCE: T

- 100 filings in Airports:USA ® DataMiner TM



# IRK Air Service & Traffic Trend

CY 2000

- July 2009

SOURCE: Airports:USA ® DataMiner TM

Air service at Kirksville is currently provided by Air Choice One, operating 11 weekly roundtrips to St. Louis with Beechcraft Baron 58 aircraft at an annual subsidy rate of $806,169. The current EAS contract awarded is set to expire in 2010.

As the graph and data table on the previous page illustrate, until recently Air Choice One made little inroad with regard to increasing passe nger enplanement levels at IRK.

10 Revocation of RegionsAir operating certificate was the result of an FAA investigation of the carrier following a fatal accident at Kirksville Regional Airport in October 2004 that killed 11 and seriously injured two, and was determined by the National Transportation Safety Board to be the result of pilot performance and training. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Psgr. 1,544 4,794 4,714 4,428 4,140 2,793 3,428 3,517 1,921 1,936

0 1,000 2,000 3,000 4,000 5,000 6,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Load Factor 16.5% 21.6% 21.2% 19.8% 19.1% 12.7% 16.0% 10.7% 14.0% 27.8%

Passengers 1,544 4,794 4,714 4,428 4,140 2,793 3,428 3,517 1,921 1,132

Daily Deps. 2.8 1.6 1.6 1.6 1.5 1.6 1.5 2.5 1.4 1.7

Daily Seats 26 31 31 31 29 30 29 47 19 10

Aircraft Type Queenair/

J-31 J-31 J-31 J-31 J-31 J-31 B1900/ J-31 B1900 Baron/

B1900 Baron

Destinations STL/MCI STL STL STL STL STL STL/MCI UIN/MCI MCI/STL STL

Airlines Redwing/ RegionsAir RegionsAir RegionsAir RegionsAir RegionsAir RegionsAir Regions Air/

Air Midwest Air Midwest Air Midwest/

Air Choice

One Air Choice

One

Gross OW Fare $145.29 $199.57 $174.08 $205.14 $204.98 $219.20 $225.09 $261.96 $386.21 $53.74

### 27 T he fact that Air Choice One service operates to the FBO terminal at St. Louis , does not offer interline connections, and is not available for sale in major GDS systems means that Kirksville lacks basic connectivity with the national air transportation system.

Discussions with the Kirksville community indicate that Air Choice One h as provided a much higher level of reliability than previous operators, flights crews and station personnel are very customer oriented, and that ridership has been increasing. These are all positive steps that have resulted in Air Choice One garnering su pport in the Kirksville community.

Still lacking, however, is availability of flights in key Internet distribution channels (i.e., Travelocity, Kayak, Expedia, etc.) and GDS systems. Air Choice One has indicated to the community that sales through these c hannels will be effective in 2010, and plans to implement interline tic keting and baggage during 2010 as well

.

Traffic Generation & Leakage

MoDOT’s air service consultant estimates that the relatively small population and economic profile of the Kirksvi lle Regional Airport catchment area generates approximately 30,000 O&D passengers annually. With current air service capturing less than 2,000 of these passengers, the traffic leakage exceeds 95 percent.

The vast majority of traffic leakage is occurring to St. Louis and Kansas City, both of which are reasonably accessible down State Highway 63 which interchanges with Interstate 70, and which provide consumers with a large choice of nonstop destinations, including a substantial number of departures on low

- fare carriers.

Traffic capture rates could be marginally improved with a change in carrier as discussed above, however we do not believe that the number of O&D passengers utilizing IRK will ever return to the peak levels experienced during the early part of the decade when RegionsAir provided American Connection service on 19

- seater turboprops. This is a factor of both the pull

- down of the STL hub by American Airlines, the reality that future capacity increments at Kirksville are likely to be on 9

- seaters

, and the fact that IRK pricing is unlikely to competitive with fares offered at STL or

MCI.

### 28 Regional Distribution of Traffic

As Air Choice One does not provide interline connections and travelers must buy a separate ticket for travel beyond St. Louis, data that quantifies regional distribution of traffic at Kirksville is virtually non

- existent. The situation at IRK is more pronounced

than at Joplin, as was discussed previously.

However, if it is assumed that communities of interest have not shifted too dramatically during the intervening period, a look back to the second quarter of 2004 when RegionsAir provided American Connection branded can provide a reasonable

estimate of like ly distribution of traffic demand at Kirksville Regional Airport.


# Regional Distribution of Traffic at IRK

2 nd 

## Quarter 2004

As the map indicates, the strongest demand was for travel to the southwest region of the United States, followed by the Plains region and then the Great Lakes region. Lacking data to the contrary and a major significant economic shift, we believe that this a reasonable representation



### Waynesville/Fort Leonard Wood (TBN)

TBN Catchment Area

Waynesville/Fort Leonard Wood is served by Waynesville

- St. Robert Regional Forney Field Airport (TBN) which is a public use facility owned and operated by the US Army.

### 29 The Waynesville/Fort Leonard Wood catchment area is bordered to the south by that of Springfield

- Branson National Airport a nd the north by that of Columbia Regional Airport. To the east, and easily accessible via Interstate 44, is St. Louis.

Over the past two decades the Waynesville/Fort Leonard Wood catchment area has seen strong growth both in terms of average household in come and population. Of a ll the communities in this application , the Waynesville/Fort Leonard Wood had the highest percentage growth in population and it had the second highest in average

household income.


# Waynesville

– St. Robert Regional Forney Field Airport

Traffic Catchment Area

1990 2000 2007 % Change % Change 90-00 % Change 00-07 $25,601 $39,553 $46,085 80.0% 54.5% 16.5%

1990 2000 2007 % Change % Change 90-00 % Change 00-07

107,423 114,585 123,838 15.3% 6.7% 8.1% Average Household Income

Population

### 30 The Fort Leonard Wood military installation is the primary economic driver within the catchment area. At any given time, the base and surrounding area has a population of approximately 100,000. This includes over 7,000 civilians, 14,000 military trainees, and approximately 6,000 permanent military personnel. The remainder of the supported “population” constitutes families of active duty personnel and retirees. Fort

Leonard Wood has benefited from the Defense Base C losure and Realignment Committee (BRAC), experiencing facility expansion and assignment of additional personnel. In this context, the future of the base as an important part of the US military infrastructure and local economy is deemed secure.

Market Serv ice History

For most of the current decade, Waynesville/Fort Leonard was provided branded

service to the St. Louis hub, first as Trans World Express and then American Connection. RegionsAir served the market until revocation of its operating certificate by the FAA in 2007, when Great Lakes Aviation bid and was awarded the EAS contract to provide 18 weekly roundtrips to Kansas City and St. Louis at an annual subsidy rate of $519,858. Great Lakes Aviation service is not affiliated with a global airline brand,

but does of fer interline connections and distribution via GDS and Internet booking engines.

In October 2009, US DOT awarded Great Lakes Aviation the EAS designation at Waynesville/Fort Leonard Wood for another two year period ending October 31, 2011

at an annual su bsidy rate $1.29 million. In awarding the contract, US DOT granted Great Lakes the flexibility to operate service to Kansas City or St. Louis, but at a minimum of 18 weekly roundtrips. Great Lakes has been pulling down its St. Louis operation and current s chedule data indicates service to Kansas City o nly

US DOT renewal of Great Lakes Aviation as the EAS provider was done so despite comments submitted by the military regarding the low

- level of reliability that the carrier provides. This, along with the fac t service is not branded an on

- line connection, has resulted in declining passenger traffic since Great Lakes took over

service at T BN.

In May 2010, Great Lakes Aviation provided notice to terminate Essential Air Service at TBN. Waynesville/Fort Leonard Wood is expected to begin working with a new EAS provider in the Fall of 2010. In recent years, Great Lakes Aviation has provided nonstop service between Waynesville/Fort Leonard Wood and two hubs. MCI service was supported by EAS subsidy, whereas Great Lakes

flew STL at its own risk.

### 31 

# TBN O&D Passenger Trend

CY 2000

– CY 2009

SOURCE: T

- 100 filings in Airports:USA ® DataMiner TM , 2009 traffic is actual through July and forecast for remainder of year



# TBN Air Service & Traffic Trend

CY 2000

- July 2009

SOURCE: Airports:USA ® DataMiner TM

Note the sharp drop in traffic during 2007 reflects a temporary period without air service following the revocation of RegionsAir operating certificate.

Traffic Generati on & Leakage

The Waynesville/Fort Leonard Wood catchment generates an estimated 75,000 O&D passengers annually. With O&D passengers forecast to approximate 14,000 during 2009, this equates to a market leakage rate of 81 percent. While not as pronounced

a s in s ome of the markets in this application , it nevertheless represents a significant level of leakage.

There are two major factors resulting in traffic leakage at Waynesville/Fort Leonard

Wood: 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Psgr. 15,026 17,182 13,898 13,273 14,252 17,114 16,537 3,429 10,501 14,054

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Load Factor 40.6% 51.6% 41.8% 42.1% 42.5% 50.9% 50.9% 34.5% 25.4% 23.5%

Passengers 15,026 17,182 13,898 13,273 14,252 17,114 16,537 3,429 10,501 7,027

Daily Deps. 2.4 2.4 2.4 2.3 2.4 2.4 2.3 0.7 3.0 3.6

Daily Seats 91 91 91 86 92 92 89 27 114 140

Aircraft Type J-31 J-31 J-31 J-31 J-31 J-31 J-31 J-31/B1900 B1900 B1900

Destinations STL STL STL STL STL STL STL STL MCI/STL MCI/STL

Airlines Transtates/ Regions Air RegionsAir RegionsAir RegionsAir RegionsAir RegionsAir RegionsAir RegionsAir/

Great Lakes Great Lakes Great Lakes

Gross OW Fare $244.73 $241.96 $262.91 $279.37 $327.36 $318.94 $349.68 $369.47 $369.69 $342.82

### 32 **•** Proximity and ease of access to low

- fare service at both St. Louis and Tulsa (to a lesser degree, Springfield

- Branson) via Interstate 44 ; and

**•** Low market confidence in Great Lakes Aviation, partiuclarly among the military

which is t he largest driver of pas senger traffic in the region, due to past operational reliability.

While there is little that can be done to counteract the impact of low

- fare service, the community and airport can work with the EAS provider to improve overall operational reliability. Under the best of circumstances, it is estimated that the airport could capture approximately 20,000 O&D passengers, slightly more than the peak levels achieved during the early part of the decade.

In addition to Kansas City and St. Louis, a small amount of traffic leakage may be occurring to Springfield

- Branson National Airport, located along the southern boundary of the Waynesville

- St. Robert Regional Forney Field Airport catchment area. While the only low

- fare service at SGF is on Allegiant Air, the mar ket does provide access to CNC branded carriers and multiple hubs.

Finally, we would note that leakage of international traffic at Waynesville/Fort Leonard Wood is exceptionally high and has been for some time. To illustrate this, despite

branded access t o the TWA (and later American hub) at STL, Waynesville/Fort Leonard Wood only generated an average of 200 international passengers on an annual basis in the early part of the decade. Since Great Lakes assumed operations at TBN, not a single international p assenger has shown up in the O&D traffic database. This is exceptionally unusual for a market with such a high dependence on military traffic and indicates high levels of “high value” traffic leakage. At the very least, traffic to points such as Frankfurt and Seoul, South Korea should appear in O&D tables. 11

Regional Distribution of Traffic

Notwithstanding service reliability issues, the reported regional distribution of traffic at Waynesville/Fort Leonard Wood probably provides a more accurate picture of true demand distribution given that the airport had service to two hubs.

Data for the second quarter of 2009 indicates strong demand to the Plains and Southeast regions of the United States (see map on next page). As with other markets, a portion of the Plains region demand is likely attributable to an exaggerated percentage of ticket sales to STL and MCI, when passengers then connect to another flight on separate ticket. That said, indicated demand to and from the Southeast region likely reflects a true community of interest.

11 Airport personnel at TBN indicate that there are 2

- 3 international PDEW. While this may be accurate, these passengers presently do not appear on the interna tional O&D data as reported by the airlines to the US Department of Transportation.

### 33 

# Regional Distribution of Traffic at TBN

2 nd 

## Quarter 2009

Pricing Issues

As with virtually any market that depends on unbranded service using interline agreements for access to the national air transportation system , competitive fares relative to MCI and STL are an issue for the Waynesville/Fort Leonard Wood market.

Great Lakes interline agreements require the passenger to either pay a higher fare by connecting to a Comprehensive Network Carrier (CNC) or a separat e ticket to connect

with Low

- Fare Network Airlines. This discourages travel from TBN and encourages traffic leakage.

Summary

As evidenced by a historical analysis of air service activity at these airports, all airports

have at one time or another supported substantially larger numbers of passenger enplanements and have catchment areas with adequate population and income to support higher enplanement levels . A number of circumstances can influence the use of these airports that could include but wo uld not be limited to fares or cost, aircraft
size, code

- sharing availability, flights sche dules and service reliability.

Since three of the four communities in this application will be receiving new EAS service in late 2010, the marketing funds proposed within this application for those communities will go toward promoting awareness within the local communities of this new service. The Columbia Regional Airport has been successful with the Delta Connection service to Memphis. The proposed funding in thi s application will go toward enhancing and securing a continued growth of this service. While the three remaining EAS communities have population levels, income and catchment areas that

### 34 would support higher enplanement levels, all communities are pursuing enhanced air service to accommodate existing demand.



# Description of the Community’s Air Service Development Efforts over the Past Five Years

and the Results of those Efforts

Columbia Regional Airport The City of Columbia has actively pursued additi onal air service in recent years with the assistance of an air service consulting firm. The City has also worked successfully

with other communities and mid

- Missouri entities to provide a financial commitment for air service to Chicago O’Hare Internationa l Airport but have not been successful in attracting a carrier. The City has utilized local funding for airline marketi ng purposes and has secured State Aviation Trust Fund Air Service Grant s . The local funding and state air service grant s have allowed C OU to ma rket the current Delta Connection

service to the mid

- Missouri region through means not previously utilized, and the City has been effective in educating the public and increasing enplanement levels in 2009

and 2010 to pre 9/11 enplanement levels.

Joplin Regional Airport The Joplin Regional Airport has been active in air service development for a number of years. JLN has worked with an air service consultant and has aggressively pursued new markets and carriers. In 2005, Joplin received a Small C ommunity Air Service Development Grant that was used as a revenue guarantee for Joplin to Dallas service. The Joplin Regional Airport participates in the State Aviation Trust Fund Air Service Development Grant program.

Kirksville Regional Airport

Little marketing has been done at the Kirksville Regional Airport p rior to 2006. In
2007, the Kirksvi lle Regional Airport received a Small Community Air Service grant for $30,000. T he Kirks ville Regional Airport participates in MoDOT’s State Aviation Trust

Fund Air Service Grant program and has initiated a print, radio, TV and b illboard advertising campaign.

Waynesville Regional Airport Air service development is in its infancy at TBN. Great Lakes Airlines has devoted funds for the development and marketing of service from the airport. The community has also undertaken marketing efforts in partnership with Lambert

- St. Louis International Airport. The Waynesville Regional Airport also participates in the State Aviation Trust Fund Air Service Development Grant program. This program has provided funding for billboards/signage along Interstate 44, local print

- media advertising, promotional activities, and radio and television advertising.

### 35 

# Strategic Plan for Meeting those Needs under the Small Community Progr am

Advertising Campaign The target audiences for the advertising campaign will consist of the approximat e catchment area for each of the airports. The advertising plan will consist of a

mult imedia campaign promoting the new EAS service in three communities, the Delta

Connection service at Columbia and the benefits of such. The campaign will use radio, billboards, newspapers, internet and television.



### Communication Campaign Along with the advertising campaign, a secondary campaign consist ing of educating the local public, businesses, chambers of commerce, community organizations, etc. about local air service, its economic value and the requirements for local support.



### Travel Agent Outreach A travel agent outreach will be implemented to comm unicate with travel agents and corporate travel departments that support mass

- market activities and which emphasize the benefits of local air service.



### Timetable The proposed advertising, communication and outreach campaign is proposed for a period of appro ximately 18 months once a notice to proceed is given for the project. The following timeline is proposed:

Grant Selection Process December, 2010 Contract Negotiation February, 2011 Advertising Campaign February, 2011 to August, 2012 Communication Camp aign February, 2011 to August, 2012 Travel Agent Outreach At outset of Advertising and Communication campaigns with follow

- ups

The timing of the Small Community Air Service Program fits well for the three EAS communities who will be supporting new EAS serv ice in the Fall of 2010



### Past Projects

Two of the f our communities within this application have received a prior Small Community Air Service Grant. The Joplin Regional Airport received a Small Community Air Service Grant in 2003 that was used as a revenue guarantee for Joplin to Dallas service. In 2007, the Kirksville Regional Airport received a Small Community

Air Service Grant. Part of this grant was used to purchase an electronic LED sign.



### Goals and Objectives The goals an d objectives of this proposal are to bring awareness to the traveling public, local businesses, community organizations, corporate e ntities, etc. about new EAS service at the three communities and the promotion of the existing service at the Columbia Regional Airport . A goal of the Mi ssouri Department of Transportation

–

### 36 Aviation Section is to inform the traveling public within the State of all easily

accessible modal choices that are available to them. The utilization of other accessible modes of transportation can assist in decreasi ng capacity and other constraint issues on other modes of transportation.



# Description of any Public

- Private Partnership that will Participate in the Project

In 2008, the aviation industry in the State of Missouri including the four communities participat ing in this application pursued a change through the state legislature to expand the eligibility of State Aviation Trust Funds. The State Aviation Trust Fund is a fund that uses a portion of the sales tax on jet fuel sold within the state for capital

and maintenance improvement projects at airports. This state program is similar to the Federal Aviation Administration’s Airport Improvement Program. The expanded eligibility included funding for the study or promotion of expanded domestic or

international s cheduled commercial service, the study or promotion of intrastate scheduled commercial service, or to assist airport sponsors participating in a federally funded air service program supporting intrastate scheduled commercial service.

In 2008 and 2009, the Missouri Department of Transportation issued State Aviation

Trust Fund

– Air Service grants to nine communities that operate commercial service airports in the state. With the 2009 State Aviation Trust Fund Air Service Grant Program already underway, eac h community is pledging a portion of these funds as part of their non

- federal contribution as part of this application. The combination of

federal and non

- federal funds allows the community’s to fully develop a marketing program that utilizes a combinatio n of local, state and federal funding.

The Missouri Department of Transportation

– Aviation Section and the four communities partic ipating in this application have recently completed an air service study.

MoDOT Aviation contracted with an air service development consulting firm to perfor m an air service study at these four airports , along with the Cape Girardeau Regional Airport . In turn, the five airports have contracted with MoDOT for their local participation in the study. From a contracting and a dministration perspective, t his same approach has proven successful and will be used for the administration of the Small Community Air Service Development Grant

.

This study has provided important information concerning potential passenger activity

and was used to assist communities with their review of upcoming EAS proposals.

The combination of State Aviation Trust Fund Air Service grants, local funds and funding made available from USDOT through the Small Community Air Service Development Grant program w ill be used on a marketing program for each airport.

### 37 

# Description of Funding Necessary for Implementation of the Community’s Project

As part of the Small Community Air Service Development Program, the federal grant amounts for each community are shown below along with a corresponding State Aviation Trust Fund Air Service grant amount and a 10 percent local match requirement for the State Air Service grant.



### Federal and Non

- Federal Contribution Breakdown

Airport Proposed

Federal

Contribution Non

- Federal

Contribution

State Air

Service

Grant Local Match

on Non

Federal

Contribution

Cash Total

Columbia Regional $7 0,000 $ 18,000 $2,000 $90,000

Joplin Regional $7 0,000 $ 18,000 $2,000 $90,000

Kirksville Regional $7 0,000 $ 18,000 $2,000 $90,000

Waynesville Reg. $7 0,000 $ 18,000 $2,000 $90,000

Subtotals $280 ,000 $72,0 00 $8,000 $360,000



# Explanation of How the Community will Ensure that its own Funding Contribution is Spent in the Manner Proposed

Upon approval of this application, MoDOT and the four participating communities will submit a detailed plan for expenditure of grant funds to the Department for review and approval prior to the plan’s implementation.

MoDOT will also provide grant administration and will review documentation to assure

its in compliance with grant requirements.

### 38 

# Descriptions of How the Community will Monitor the Progress of the Grant Project

MoDOT is a State Block Grant State and has a long working relationship with the federal government with respect to federal grants and sub

- grants. MoDOT is accustomed to and familiar with reporting requirements and maintains a full staff of accounting and technical professionals and routinely provides grant administration on federal projects. MoDOT plans to act as the point of conta ct on this project as well as providing project management and oversight responsibilities. MoDOT and t he four airports will submit status and financial reports as required.

The selection of a professional marketing consultant will be utilized to identify critical milestones and to make sure the advertising and communication campaigns and travel agent outreach are functioning at their fullest capabilities.



# Description of How the Community Plans to Continue with the Project if it is not Self

Sustaining aft er the Grant Award Expires

The goals and objectives of this proposal is to bring awareness to the traveling public, local businesses, community organizations, corporate entities, etc. about new EAS

service to three communities and the continued success of the Delta Connection service at the Columbia Regional Airport . A goal of the Missouri Department of Transportation

– Aviation Section is to inform residents within the State of all easily

accessible modal choices that are available to them. The utilizat ion of other accessible modes of transportation can assist in lessening demand on existing

constrained modes.

Upon compl etion of this marketing campaign, the four commercial service airports will continue to pursue State Aviation Trust fund Air Service gr ants through the Missouri Department of Transportation

– Aviation Section for air service improvements at each airport.



# Designation of a Legal Sponsor Responsible for Administering the Program

The sponsor for administering the program will be:

The Misso uri Department of Transportation

– Aviation Section
Mr. Joe Pestka, Administrator of Aviation 2217 St. Marys Boulevard Jefferson City, Missouri 65102

Phone: (573) 526

- 7912 , Fax (573) 526

- 4709 joseph.pestka@modot.mo.gov