Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 APPLICATION UNDER
SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST

- 2013

- 0120

SUMMARY INFORMATION

A. P ROVIDE THE LEGAL SPO NSOR AND ITS DUN AND BRADSTREET (D& B) DATA UNIVERSAL NUMBE RING SYSTEM (DUNS)

NUMBER , INCLUDING +4, EMPLOYEE IDENTIFICAT ION NUMBER (EIN) OR TAX ID

. Legal Sponsor Name: Pangborn Memorial Airport
DUNS Number:
832579945 EIN/Tax ID:
91

- 0908966

B. L IST THE N AME OF THE COMMUNITY OR CONSORTIUM OF COMMUN ITIES APPLYING : 1._ P ANGBORN M EMORIAL A IRPORT , W ENATCHEE , W ASHINGTON

_

C. P ROVIDE THE FULL AIRP ORT NAME AND 3

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

PROVIDE CODES FOR TH E AIRPORT ( S ) THAT ARE ACTUALLY SE EKING SERVICE ).
1. Pangborn Memorial Airport (EAT)Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013

D. L IST THE 2

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

CONSORTIUM , TO EACH PARTICIPATIN G COMMUNITY

. 1. WA

- 04

E. A PPLICANT I NFORMATION : (C HECK A LL T HAT A PPLY )
Not a Consortium Interstate Consortium Intrastate Consortium Community now receives subsidized Essential Air Service Community (or Consortium member) previously received a Small Community Air Service Development Program Grant
If previous recipient: Year of grant(s):

F. P UBLIC /P RIVATE P ARTNERSHIPS : (L IST O RGANIZATION NAMES )
PUBLIC PRIVATE
1. Pangborn Memorial Airport 1. Wenatchee Valley Chamber
2

. Port of Chelan County 2. Leavenworth Chamber
3. Port of Douglas County 3.
4. Chelan County Lodging Tax Comm. 4.
5. 5.

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

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

H. E XISTING L ANDING A IDS AT L OCAL A IRPORT : Full ILS Outer/Middle Marker Published Instrument Approach Localizer Other (specify) 

### XProposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013

I. P ROJECT C OST : D O NOT ENTER TEXT IN SHADED AREA
L INE D ESCRIPTION S UB T OTAL T OTAL A MOUNT
1 Federal amount requested $200,000
2 State cash financial contribution $0
Local cash financial contribution
3a Airport cash funds $0
3b Non

- airport cash funds $50,000
3 Total local cash funds ( 3a + 3b ) $50,000
4 TOTAL CASH FUNDING ( 1+2+3 ) $250,000
In

- Kind contribution
5a Airport In

- Kind contribution** Various
5b Other In

- Kind contribution** Various
5 TOTAL IN

- KIND CONTRIBUTION ( 5a + 5b ) Various
6 TOTAL PROJECT COST ( 4+5 ) $250,000

J. IN

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

- Kind contribution) and 5b (Other In

- Kind contribution), please describe the source(s) of fund(s) and the value ($) of each. Airport will waive landing fees for additional flights; local media companies will offer discounts on advertising; partner airlines will offer free tickets for giveaways, etc.Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013

K. I S T HIS A PPLICATION S UBJECT T O R EVIEW B Y S TATE U NDER E XECUTIVE O RDER 12372 P ROCESS ?

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

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

L. I S T HE A PPLICANT D ELINQUENT O N A NY F EDERAL D EBT ? (I F “Y ES ”, P ROVIDE E XPLANATION )
No Yes (explain)

_____________________________________________________________________________________________

_______________________________________________________________Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 1

TABLE OF CONTENTS

Legal Sponsor 1
Introduction 2
The Wenatchee Air Service Market 3
Current and Historical Service 3 Airfare Challenges 7
Air Service Needs and Deficiencies 8 Regional Economic Growth 8
Load Factor Trends 9 Operational Reliability 10 Per Capita Capacity 11 Strategic Marketing Plan 1 3 Project Timeline 15 Public/ Private Partnership 16
Conclusion 18



## LEGAL SPONSOR

Pangborn Memorial Airport is the legal sponsor responsible for administering the proposed air service development program. The Airport is a government agency, operated under a joint powers agreement between the Port of Chelan County and the Port of Douglas County.

Pangborn Memorial Airport One Pangborn Drive Eas t Wenatchee, Washington 98802 Trent Moyers, Airport Director (509) 884

- 2494 trent.moyers@pangborn airport.com 

### Section Page NumberProposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 2

INTRODUCTION

Pangborn Regional Airport in Wenatchee, Washington, is the primary gateway for an isolated population of 220,000. Located on the east slopes of the Cascade Mountain Range in Washington State, Wenatchee is best known as “apple country,” drawing more than two million tourists each year. In ideal conditions, Wenatchee is two

- and

- a

- half h ours from Seattle by car, but drivers must cross the Cascades, and the weather is rarely cooperative. While Seattle is stuck in mist and rain, the Cascades see huge snowfall, often closing Interstate 90. Meanwhile in Wenatchee, a quickly diversifying eco nomy

– one of the fastest growing in the Pacific Northwest

– is boosting air service demand.

Pangborn Airport has suffered, over the last four years, from average fares that have risen by 14%. So far in 2013, published fares are trending 24% higher than 2012 average fares. Despite the increasing cost of air travel, 2012 was an excellent year for the Airport, with passengers at their highest po int in the
last decade.

Still, the Airport enters the summer of 2013 with less scheduled air service than it had last summer, as SeaPort Airlines has discontinued its flights to Portland, through Yakima. This has resulted in the loss of an average of 24 daily departing seats, or 11% of the market’s total capacity. Service was well

- supported in Wenatchee, despite the stop in Yakima,
but t he Yakima leg lagged expectations necessitating the cancellation of the route.

The Wenatchee market has long been a low load factor market. It is served by Alaska Airlines’ partner Horizon Air, with 76

- seat Q400 aircraft flying the route to Seattle

- Tacom a. The market only filled 62% of its available seats in 2012. It is imperative that this load factor improve in order to ensure Wenatchee retains its only air service link to the rest of the world.

This Grant application is part of that effort. The Air port has five regional partners that have committed cash to a project to market current service, with the goal of boosting load factors
into the mid

- 70s, and of providing marketing, fee waiver, and start

- up cost offset incentives to a carrier launching new service. To complement its current network connectivity, the Airport seeks
less

- than

- daily low cost service. This application is the key to that effort. 

## “The market only filled 62% of its available seats in 2012. It is imperative that this load factor improve...”Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 3

THE WENATCHEE AIR SERVICE MARKET Current and Historical Air Service

Pangborn Memorial Airport in Wenatchee, Washington
, sits at the center of a large and diverse region, known nationally for its apples, but also known up and down the West Coast for a number of tourist destinations. Wenatchee sits at the eastern base of the Cascade Mountains,
and acts as the gateway to an area that draws more than two million tourists each year. Visitors come to experience the outdoors, with mountain, lake, and river sports; to taste wines in one of the Pacific Northwest’s fastest growing viticulture regions; and to experience the unspoiled Bavarian village of Leavenworth.

The key access point is Pangborn Memorial Airport. The Airport’s primary catchment

a rea, seen in Map 1 in dark blue, covers
all those who live within an hour’s drive.
As of 2011 US Census estimates, 73,000 people live in this
area. The extended catchment area, seen in Map 1 in lighter blue, is home to 220,000 people.
The extended
catch ment goes to the crest of the Cascades in the west, and part Moses Lake in the east. The entire catchment area is isolated from other air service. The drive to the nearest alternate airport, Seattle

- Tacoma International, requires crossing the Cascades at Snoqualmie Pass on Interstate 90, a route that is often blocked by avalanches from October through May. 

### MAP 1: Pangborn Memorial Airport Catchment Area Source: Sixel Consulting Group, 2011 US Census EstimatesProposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 4

As of summer of 2013, Pangborn Memorial Airport has service on just one carrier to one destination, with Alaska Airlines subsidiary, Horizon Air, flying to Seattle

- Tacoma (see Map 2). Of note, last summer SeaPort Airlines operated one

- stop service to Port land International Airport, through Yakima. This service ended in October of 2012,
but was well

- supported in the Wenatchee market, with Wenatchee passengers representing almost 62% of all passengers using the service.

With the loss of SeaPort service, total
Wenatchee available airline seats will be down almost 11% in August of 2013 as compared to August of 2012 (see Fig ure 1). Service on the Alaska Airlines brand, through Horizon Air, is basically flat year

- over

- year , but the loss of Portland service removed an average of 24 daily departing seats from the market, on an average of 2.4 daily departures. SeaPort operated three flights per day on peak days and two flights per day on off

- peak days.

With two airlines serving the market throughout most of 2012, Pangborn Airport saw its highest passenger numbers in the last decade, despite rising fares. A total of 98,970 pass engers flew in and out of Pangborn in 2012, an average of 135.6 passengers per day each way (PDEW) (see Figure 2 on next page). Passengers were up 11%, or an average of 12.9 PDEW, from 2010 to
2012. Notably, the previous passenger peak at Pangborn was in 2009, with an average of 133.4 PDEW. 2012 eclipsed the 2009 mark by 2%, despite average fares that were 14% higher.

The Wenatchee market is fortunate to have Alaska Airlines, with its rational regional air service pricing model, as its sole carrier. Al aska’s choice to operate the low cost Q400 aircraft in the 

### MAP 2 : Current and Former Service at Pangborn Memorial Airport Source: Sixel Consulting Group; OAG Schedule Data, July 2013

FIGURE 1 : Scheduled Service at Pangborn Memorial Airport, 8/12 vs. 8/13 Source: Sixel Consulting Group; OAG Schedule Data, July 2013Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 5

market has allowed them to price the market in such a way as to stimulate passengers. Still, Alaska is not immune to rising fuel costs.

In the last four years, the average one way fare in Wenatchee has risen from $158 to $180

– an increase of $22 each way or $44 roundtrip, before taxes and fees (see Figure 2). This trend is
exp ected to continue as a July 2013 analysis of published fares in the market shows they are running 24% higher than the average fare during 2012.

Seattle

- Tacoma, itself is, far and away, the largest origin and destination passenger market for Wenatchee passengers. In 2012, an average of 20.7 passengers per day each way (PDEW), or 15,130 total passengers, purchased tickets between Pangborn Airport a nd Seattle

- Tacoma (see Figure 3 on next page). Due to the nature of Wenatchee service, with just a single carrier on a single route, this number likely includes a significant portion of passengers who purchased the
EAT

- SEA coupon, and then separately purc hased a coupon on another carrier out of Seattle

Tacoma that is not affiliated with Alaska Airlines. These passengers created their own connections at Seattle

- Tacoma, by buying two separate tickets. The way data is collected by 

### FIGURE 2 : O&D Passengers and Average One Way Fares, Source: US DOT OD1A, Calendar Year 2004

– Calendar Year 2012Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 6

the Department of Transpor tation, the connection would not be noted unless it was purchased as one interlined ticket. It is impossible to pinpoint the number of passengers who created their
own connections in this
manner at Seattle

- Tacoma, but it must be noted that a portion of these Seattle

Tacoma origin and destination trips were likely

non

- interline connections.

Illustrating the importance of migrant workers and their
families to the Wenatchee agriculture economy, Guadalajara, Mexico
, is the second largest origin and
destination market at Pangborn, averaging 4.5 passengers per day each way (PDEW) (see Figure 3). All but two of the top 25
markets are in the western
US or wester n Mexico. This is expected with the service pattern available at Pangborn Memorial Airport, with Alaska providing excellent connectivity throughout the West
, but lacking strong connectivity to markets in the East

. While Wenatchee benefits from Alaska’s

r egional pricing philosophy, the quality of Alaska Airlines service, and the easy connections up
and down the West Coast , the market is hurt by the lack of eastbound connectivity, with many of its passengers forced to drive to other airports to access servi ce to cities east of the Rockies.

As noted, in 2012, the average one way fare for Wenatchee passengers was $180 each way, not including ancillary fees or taxes (see Figure 4 on next page). This fare was up 14% in the last four years. The fare is brought down by the large number of origin and destination passengers to and from Seattle

- Tacoma, where the local average fare was just $73 each way in 2012. The 

### FIGURE 3: Top 25 O&D Passenger Markets at Pangborn Airport Source: US DOT OD1A, Calendar Year 2012Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 7

Wenatchee

– Seattle

- Tacoma route is just 86 nautical miles. Despite the seemingly low local fare, i t still provides an average yield to Alaska Airlines of 84.9 cents per mile

– which is among the highest local yields in the Alaska
network. When Seatt le

- Tacoma passengers are removed from the analysis, the average one way Wenatchee fare jumps to $192.

Also of note, fares at Pangborn Airport are rising at a rate faster than the national average. The lowest current published fares in the market are 24% higher than the 2012 average fare. This is notable in a number of the Airport’s top O&D markets.
For example, the lowest current published one way fare to San Diego, as of July 2013, is $189 (see Figure 5). The 2012 average
fare in the market was 20 % lower, at $158 each way. The lowest published Portland one way fare is $1 higher than the average
fare f rom 2012, while the lowest published Phoenix one way fare is $53 higher than the average from 2012. In the Wenatchee

– Las Vegas market, the lowest current published one way fare is 20% higher than the average from 2012.

Assuming these higher fares hold, as demand continues to increase in an improving Pacific Northwest economy, it is likely Wenatchee’s 2013 average fare will fall near $220

– a $40 increase each way over the 2012 average. It is clear higher fares will be the norm in the Wenatchee market, and their impact on total passengers has yet to be determined. 

### FIGURE 4: Average One Way Fares at Top 25 O&D Markets at EAT Source: US DOT OD1A, Calendar Year 2012

FIGURE 5: Published Fares vs. 2012 Average Fares at EAT Sources: ExpertFlyer, July 2013; US DOT OD1A, CY2012Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 8

AIR SERVICE NEEDS AND DEFICIENCIES IN WENATCHEE

Air service is a critical economic component in Wenatchee and its nearby communities. The region is isolated by geography, with the Cascade Mountains separating Wenatchee from the most populous areas of Washington State. Despite this geographic isolation, Wenatchee has
one of the fastest growing economies in the Pacific Northwest.

In 2011, the Wenatchee gross metropolitan product (GMP) grew to its highest level ever, at $3.8 billion in annual economic activity
, according to the US Council of Mayors (see Figure 6). Since 2008, the Wenatchee economy has grown by 5.6%, ranking it the seventh fastest growing economy in the Pacific
Northwest. Wenatchee is growing faster than many better

- known metropolitan areas, such as Boise, Spokane, Billings, and Anchorage. The new businesses generating this economic growth include Microsoft, Yahoo!, Intuit, and T

- Mobile. They all require air service to transport employees in and out of Wenatchee. Additionally, the growing tourist economy will more heavily lean on air service to bring visitors from out of state to the region.

Despite this economic growth, and increasing demand for air service, Pangborn Memorial Airport has the same ser vice it had at the beginning of the previous decade

– three daily non

stop flights on Alaska Airlines partner Horizon Air to Seattle

- Tacoma. Pangborn averages roughly 200 daily departing seats

– a number that has been fairly steady for the last three year s (see Figure 7 on next page ). The one exception to this service pattern was from April of 2012 to October of 2012, when SeaPort Airlines operated service to Yakima and Portland.

With steady service, passengers have remained at a steady state, with minor growth, over the last three years. In fact, the average load factor, or percentage of airline seats filled, at
Wenatchee has held in the mid

- to

- upper 60s since the beginning of 2010 (see Figure 7). The 

### FIGURE 6 : Gross Metropolitan Product of Pacific Northwest MSAs Source: US Council of Mayors, March 2013Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 9

market generates what appears to be sufficient dema nd to fill those empty airline seats, especially considering the relative isolation of most of its communities.

Of Pacific Northwest
markets with
scheduled air service (not including markets that only have floatplane service)
Wenatchee ranks in
the bottom four in load factor, with an average 2012 load factor of 61.8% (see Figure 8). The overall Northwest average fo r 

### FIGURE 7 : Passengers and Seats per Day Each Way, and Load Factor at Pangborn Memorial Airport Source: US DOT T100; January 2010

– March 2013

FIGURE 8 : Pacific Northwest Markets Ranked by Load Factor Sources: US DOT T100, Calendar Year 2012Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 10

2012 was an 87% load factor. Wenatchee’s load factor was 25.2 points below the regional average, lagging the region’s average by 29%. The region’s average is pushed up by exceptionally high load factors at its two largest airports

– Seattle

- Tacoma Inte rnational and
Portland International

– both of which saw a large number of connecting passengers on flights.

Nonetheless, it is clear the Wenatchee load factor must improve in coming years for carriers to continue to see the value of serving the market. It will be critical during the remaining months of 2013, and in 2014, for the Airport to do all it can to get passengers into the seats that are flying empty. To be assured of retaining air service, it is likely the Wenatchee load factor will need to

aver age in the mid

- 70s by 2015.

One extenuating circumstance impacting the load factor at Pangborn Memorial Airport is the operational reliability of current air service. Of regional Pacific Northwest airports, Pangborn saw the second highest percentage of cancelled flights at 4.6% of all scheduled flights in 2012 (see Figure 9). The Northwest regional average for 2012 was 1.5% of scheduled flights ca ncelled

– a full three points below the Wenatchee cancellation percentage.

Four of the top five airports in cancellation percentage for 2012 were served primarily by Alaska Airlines through its Horizon Air subsidiary (see Figure 9), with the exception b eing Klamath Falls. Horizon experienced a number of maintenance problems with its Q400 fleet during 2012, which led to an unusually high number of cancelled flights. Additionally, Wenatchee had an unusually high number of days with low visibility that im pacted the ability of morning flights to land.

In markets like Wenatchee, reliability of service is key. With low frequency, when a flight is cancelled, the next flight doesn’t leave for a number of hours. In high frequency markets, the 

### FIGURE 9 : Pacific Northwest Markets Ranked by Cancellation Rate Sources: US DOT T100, Calendar Year 2012Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 11

ability to hop o n a flight soon after the cancellation minimizes the impact of the cancellation. This is not the case at Pangborn Airport, where a cancellation can ruin the trip of a Wenatchee traveler. Once passengers have been affected by a cancellation, they think tw ice about booking their next trip from their local airport, and the y consider driving over the mountain pass to Seattle

- Tacoma to directly access service.

Despite the lower than average load factors at Pangborn Airport, data shows
the Wenatchee market is still underserved when compared to its peers. In fact, Wenatchee r anks in the top ten of the most underserved markets
in the Pacific Northwest with scheduled airline service. In 2012, Wenatchee had an average of just 1.45 available airline seats per capita (see Figure 10). Wenatchee had just 21% of the average
number o f available airline seats per capita in the Pacific Northwest, which averaged 7.02 in 2012. Only much smaller catchment areas had fewer available airline seats in 2012.

At the same time, Pangborn Airport lags the rest of the Pacific Northwest in the number of airline passengers it generates per capita. In 2012, the average Northwest market generated 5.81 passengers per capita (see Fi gure 11). Due to the
lack of available airline seats and the lack of reliability with service that was provided, Wenatchee generated just 0.89 passengers per capita in 2012. The Wenatchee market was able to generate just 

### FIGURE 10 : Seats per Capita in Pacific Northwest Markets Sources: US DOT T100, 2011 US Census; Calendar Year 2012

FIGURE 11 : Passengers per Capita in Pacific Northwest Markets Sources: US DOT T100, 2011 US Census; Calendar Year 2012Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 12

15% the number of passengers per capita as the average Northwest market. Smaller markets than Wenatchee, such as Klamath Falls, Walla Walla, Lewiston, and Pullman

- Moscow all were able to generate more passengers per capita.

A further air service deficiency in Wenatchee is the availability of service to only one hub on one
airline

– with Alaska Airline providing the market’s only scheduled service to Seattle

- Tacoma. This
results in the necessity for an unusually high number of passengers to have to take connecting flights to get to their destinations. The average passenger flying to and from Pangborn Memorial Airport in 2012 used 1.9 airline “coupons” each way on their journey (see Fig ure 12). One coupon is issued for each flight segment. Thus, the average passenger had one connection each way on their journey. Only those traveling to and
from Seattle

- Tacoma, itself, would have had a single flight coupon.

The average Pacific Northwe st traveler, in 2012, used 1.4 coupons to get to their destination (see Figure 12). Wenatchee passengers were 36% more likely to fly on connecting flights than the average traveler in the region. While connecting flights are a fact of life with regional air service, a number of Pacific Northwest regional markets have service on multiple carriers to multiple hubs, allowing for more of their passengers to travel non

- stop.

The key to the continuation of local air service in Wenatchee will be to convince mor e people to use Pangborn Memorial Airport, and to recruit additional service to the Airport to make it a better alternative to the freeway. The plan contained in this funding request will address the need to boost load factors through airport marketing, a nd the need to recruit additional service through offering financial incentives to prospective carriers that can offer new service that doesn’t directly compete with current scheduled air service. 

### FIGURE 12 : Average Coupons in Pacific Northwest Markets Sources: US DOT OD1A; Calendar Year 2012Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 13

PANGBORN MEMORIAL AIRPORT STRATEGIC AIR SERVICE PLAN

Pangborn Memorial Airport has a dual approach to its strategic air service plan. First, the Airport seeks funding to better market and advertise its current service, with the overarching goal of increasing load factors on current flights to ensure their l ong term success. Second, the Airport seeks to offer an incentive program, including fee waivers, start

- up cost offsets, and direct marketing and advertising cash, for new service to any destination outside the Pacific Northwest. The Airport is seeking a partnership with the Department of Transportation, through the Small Community Air Service Development Grant Program (SCASDGP) to achieve these air service goals.

The Airport has cultivated a coalition of regional support as the first step in achieving its strategic goals. The Wenatchee Valley Chamber of Commerce, the Leavenworth Chamber of Commerce, and the Chelan County Lodging Tax Advisory Committee have all committed hard dollars to the project. Additionally, the Ports of Chelan County and Douglas County have committed cash in the form of dollars for Pangborn Memorial Airport, which they jointly operate.

The total project cost of Pangborn’s Grant

- supported strategic air service development plan is $ 250,000. Of the total project cost, $50 ,000 has already been committed by local partners in air service development. The three main local partners, the Wenatchee Valley Chamber of Com merce, the Leavenworth Chamber of Commerce, and the Chelan County Lodging Tax Advisory Committee have each committed $2,500 to the project. The Airport’s two governing organizations have, together, committed $42,500, for a total local share of funding of $50,000. The remaining $2 00,000 for the program is earmarked from the federal Small Community Ai r Service Development Program.

From the total project cost of $250,000, at least $100,000 will be earmarked for advertising and marketing of current air servi ce. This marketing program will be a two

- pronged approach to 

### FIGURE 13 : Example of Out

- of

- Market Advertising Content Source: Wenatchee Valley Chamber of Commerce, July 2013Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 14

increase load factors on current Alaska Airlines

- coded flights. The first emphasis, in partnership with the Wenatchee Valley Chamber of Commerce, the Leavenworth Chamber of Commerce,
and the Ch elan County Lodging Tax Advisory Committee, will be to promote the service to inbound tourists traveling within the Alaska Airlines network. At least a portion of this program will use the current creative content, including the slogan, “what will you pick today?” (see Figure 13 on previous page). This slogan references the apple

- picking heritage of the region, while promoting the fact
that there are so many activities from
which to choose in the region.

The second emphasis of advertising will be within the Wenatchee market, as the Airport will work with Alaska Airlines to promote the local service as a lifeline for
both business and leisure travel for those based in the area. This campaign will seek to convert remaining drive diversion to local airline passengers, again with the goal of boosting load factor percentages from the low

- 60s to the mid

- 70s by 2015. Initially, it is anticipated that the local campaign will leverage Alaska Airlines’ own “Explore More, Spend Less” campaign, which is currently being used in markets throughout the Pacific Northwest (see Figure 14).

The remaining $150,000 of the total project budget is slated to be used to ad vertise new service at Pangborn Airport, to a destination outside the Pacific Northwest states of Washington, Oregon, and Idaho, so as not to compete directly with Alaska Airlines service. The current
Alaska

- coded service is of tremendous value to the com munity, so the Airport will work to ensure any new service does not directly compete with Alaska within its Pacific Northwest network.

This funding is directed primarily at the recruitment of less

- than

- daily, low cost, leisure

- oriented
service. The centr al portion of Washington State is without any kind of low cost service at any of its regional airports, which include Yakima and Moses Lake in addition to Wenatchee. Pangborn Memorial Airport could serve as a low cost gateway to a large area of central Wa shington State
for a less

- than

- daily carrier. 

### FIGURE 1 4 : Example of In

- Market Adver tising Content Source: Alaska Airlines, July 2013Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 15

The Wenatchee air service market is likely being suppressed by rising fares

– fares that have been documented to be trending at current levels 24% above last year’s averages. Low cost service, even on specifi c tourism

- based routes to cities such as Las Vegas, Phoenix, and Los Angeles, will help to bring overall fares in the market back down to historical levels. Service will also help to boost enplanements and revenue at the Airport, allowing it to invest the money in capital projects to ensure its long

- term viability.

In order to land new less

- than

- daily service, the Airport will offer a full

- scale marketing campaign funded by this project. Additionally, out of its own funds, the Airport will offer full

- scale fee waivers for landing fees and terminal rent for a period not to exceed two years. The Airport will also, out of its own funds, offer start

- up cost offsets for the new carrier. The funding from the
Grant

- supported project, of $150,000, will be competitive with incentives used by other Pacific
Northwest markets in bringing less

- than

- daily, low cost service to their airports.

The anticipated timeline for the project assumes a Grant would be awarded in September of 2013 (see Figure 15 ). If the Grant agreement with the DOT is finalized in October of 2013 , the current air service campaign will begin both in

- and out

- of

- market by January of 2014 . At the same time, during the fall of 2013 and into the spring of 2014, the Airport will wor k to recruit less

- than

- daily, low cost air service through the
incentives offered under this program. As soon as that service is launched, the remainder of the campaign will launch, in support of that new service. The Airport anticipates closing the Gran t by January of 2016, if not before.

This $250,000 project is critical to the continuing viability of Pangborn Memorial Airport, and subsequently, the economy of central Washington State. This amount of funding is out of the reach of the local community, which is why the Small Community Air Service Development Program is critical to this project’s success. 

### FIGURE 1 5 : Project Timeline Source: Pangborn Memorial Airport, July 2013Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 16

PUBLIC/PRIVATE PARTNERSHIP

This application for federal Small Community Air Service Development Grant funding is supported by a host of community partners which have pledged hard matching cash. These partners include local chambers of commerce, a lodging tax committee, and the two county ports which operate Pangborn Memorial Airport through a joint powers governance agreement.



### Wenatchee Valley Cha mber of Commerce

The mission of the Wenatchee Valley Chamber of Commerce is to strengthen the economic climate of the Wenatchee Valley, which includes a number of individual cities and towns. The Chamber represents hundreds of businesses with diverse interests

– but nearly all of its members rely upon air service to some degree. The Chamber has pledged $2,500 in cash as part of this proposal.



### Leavenworth Chamber of Commerce

The Leavenworth Chamber of Commerce is better known by its commercial name, “Visit Leavenworth.” Leavenworth is an untouched Bavarian community in the Cascades. It draws almost one million visitors per year. The business members of the Leavenworth Chamb er of Commerce seek to grow inbound tourism. Pangborn Memorial Airport is the closest airport to Leavenworth, and is a key component in bringing tourists to the region. The Chamber has pledged $2,500 in cash as part of this proposal.



### Chelan County Lodgi ng Tax Advisory Committee

The Chelan County Lodging Tax Advisory Committee is responsible for determining where lodging tax proceeds collected within the County are allocated. The lodging tax is designed to create a funding source to grow inbound tourism and business travel. As part of its mission, the Committee seeks ways to allocate lodging tax money into projects that will grow travel. This project fits perfectly with the Committee’s mission, and it has pledged $2,500 in cash as part of this proposal

.Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 17

Port of Chelan County and Port of Douglas County

In Washington State, port divisions within counties typically act as the economic development arms of those counties, in lieu of economic development corporations. The Ports of Chelan and Douglas Counties operate as independent government agencies, separate from their Counties’ general governance structure.

Due to the unique location of Pangborn Memorial Airport, sitting in Douglas County, but along the border with Chelan County, the Ports of Chel an and Douglas County have an intergovernmental agreement to share in the responsibility of the operation of the Airport. Both Ports realize how vital the Airport, and its commercial air service, is to the economic health of the region

– and to their gene ral missions. Both Ports are designed to invest in projects that create new jobs and diversify the economy.

This SCASD Grant application is supported by both Ports, which have agreed to share in a $42,500 local match, bringing the total local matching funds to $50,000.Proposal of Pangborn Memorial Airport • Wenatchee, Washington • July 2013 

## 18

CONCLUSION

Wenatchee is one of the more underserved air service markets in the Pacific Northwest. The sole carrier serving Pangborn Memorial Airport, Alaska Airlines, through subsidiary Horizon Air, offers an average of just 1.45 annual seats per capita. Wenatchee has just 21% of the average airline capacity per capita of other Northwest markets. This number has been exacerbated by the loss of 11% of the market’s capacity with the exit of SeaPort Airlines.

At the same time, the Wenatchee market only fills 62% of its available seats. Wenatchee’s load factors have long been lower than average. Part of the problem is the reliability of service. In 2012, almost 5% of Wenatchee’s flights were cancelled. The other part of the problem is the lack of regional awareness of the existence of local air service. It will be imperative that more airline seats get filled in order to ensure the long

- term stability of service in the region. The key to filling these seats will be the growth of both locally

- generated passengers and the increase in inbound tourism from outside
the immediate Pacific Northwest.

The marketing and airline recruitment project detailed in this application seeks to address t he major impediments to
successful air service in Wenatchee. The incumbent airline marketing program will help to immediately boost load factors by promoting Alaska Airlines’ current service within the market, and to new inbound tourists from outside the market. The new airline incentive program will help bring less

- than

- daily low cost airline service to a region that has been overlooked by leisure carriers. It will also help reduce fares that have been on the rise for the last four years.

The Airport h as worked hard to develop a broad coalition of support for the project. Five separate entities, from throughout the region, have committed cash to match the funds requested from the Department of Transportation. This coalition collectivity represents mor e than a thousand businesses in the broad Pangborn Airport catchment area, and helps to ensure the Airport’s message is widely distributed.

Pangborn Memorial Airport has never before been a recipient of funding under the Small Community Air Service Develo pment Program. The Airport believes its first Grant award will be the key to the sustainability of local air service. 

## “ Pangborn Memorial Airport has never before
been a recipient of funding...”