APPLICATION UNDER
SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM
DOCKET DOT -OST -2013-0120

SUMMARY INFORMATION (Note : Only blue shaded areas in Sections A-L can be edited)

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

For your preparation convenience, this Summary Information Form is located at http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/SCASDP

A. PROVIDE THE LEGAL SPONSOR AND ITS DUN AND BRADSTREET (D&B) DATA UNIVERSAL
NUMBERING SYSTEM (DUNS) NUMBER, INCLUDING +4, EMPLOYEE IDENTIFICATION NUMBER (EIN) OR TAX ID.

Legal Sponsor Name: 

### Montrose Regional Airport DUNS Number 

### 0764710770000
EIN/TIN 

### 846000787

B. LIST THE NAME OF THE COMMUNITY OR CONSORTIUM OF COMMUNITIES APPLYING :
1. 

### Montrose County Colorado 2. 

### Colorado Flights Alliance 3.
4.

C. PROVIDE THE FULL AIRPORT NAME AND 3-LETTER lATA AIRPORT CODE FOR THE APPLICANT(S) AIRPORT(S) (ONLY PROVIDE CODES FOR THE AIRPORT(S) THAT ARE ACTUALLY
SEEKING SERVICE).
1.


### 2.
3. 

### 4.D. LIST THE 2-DIGIT CONGRESSIONAL DISTRICT CODE APPLICABLE TO THE SPONSORING
ORGANIZATION, AND IF A CONSORTIUM, TO EACH PARTICIPATING COMMUNITY.
1. 

## c,



## - qy

2. 

### 3. 

### 4.

E. APPLICANT INFORMATION: (CHECKALL THAT APPLY) [{]Not a Consortium 

# II I Interstate Consortium 

# II I Intrastate Consortium 

# D Community now receives subsidized Essential Air Service 

# iliJ Community (or Consortium member) previously received a Small Community Air Service

Development Program (SCASDP) Grant Ifprevious recipient: Year(s) ofgrant(s): 18-24-06 thru 8-31-091



### F. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION NAMES)
PUBLIC PRIVATE
1. Montrose County 1. Telluride Ski and Golf
2. Town of Telluride 2. Telluride Mountain Village Visitor Center 

### 3. City of Montrose 

### 3. Other Montrose and Telluride Businesses 4. Town of Mountain Village 

### 4. 5. 5.

G. PROJECT PROPOSAL: (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 (describe)

H. EXISTING LANDING AIDS AT LOCAL AIRPORT: (CHECK ALL THAT APPLY) 

### .{ FulliLS 

### .{ Outer/Middle Marker 

# l./ J

Published Instrument Approach 

### .{ Localizer Other (specify)I. PROJECT COST: (ONLY ENTER DATA IN BLUE SHADED AREAS)
LINE DESCRIPTION SUBTOTAL TOTAL AMOUNT

1. Federal amount requested 750,000 

### 2. State cash financial contribution Local cashfinancial contribution 

### 3a Airport cash funds 

### 3b Non-airport cash funds 150,000 

### 3. Total local cash funds (3a 

### + 3b) 150 

### 4. TOTAL CASH FUNDING (1+2+3) 900 In-Kind contribution 

### Sa Airport In-Kind contribution** 

### 5b Other In-Kind contribution** 

### 5. TOTAL IN-KIND CONTRIBUTION (5a+5b) 0 

### 6. TOTAL PROJECT COST (4+5) 900

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.

K. IS THIS APPLICATION SUBJECT To REVIEW BY STATE UNDER EXECUTIVE ORDER 12372

PROCESS? 

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

# I I 

# D 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. IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT? (IF "YES", PROVIDE
EXPLANATION)
[Z]No 

# 0 Yes (explain)

# G rant Proposal Under The

Small Community Air Service Development Program

For 

# Montrose Regional Airport

DUNS # 076471077 Colorado Congressional District #3Propos al under the Small Community Air Service Development Program

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# Table of Contents
1. Technical Details of Proposal

................................ ........................ 3

Contact Information

................................ ................................ ............................... 3 Legal Sponsor of Proposal

................................ ................................ ...................... 3 Community Partner

................................ ................................ ................................ 3 Air Service Deficiency: Lack of Eastbound Capacity and Very High Fares

................... 3 Overview of Grant Request

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



### 2. MTJ Market Area and Air Service Deficiency

................................ 6
Geographic Location & Market Population

................................ ................................ 6 Seat Capacity vs. Other Regional Airports

................................ ................................ 7 Total Market Fare Comparison

................................ ................................ ................ 8 MTJ O&D Passenger Distribution: Eastern U.S. Dependent

................................ ....... 8



### 3. Grant Implementation Plan

................................ ........................ 10
Funding and Distribution Sources

................................ ................................ .......... 10 Risk Abatement Terms

................................ ................................ ......................... 10 Marketing the New Service

................................ ................................ ................... 11 Plan for Self Sufficiency

................................ ................................ ........................ 12Propos al under the Small Community Air Service Development Program

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# 1. Technical Details of Proposal

Contact Information

All correspondence regarding this proposal should be referred to:

Lloyd D. Arnold, C.M. Director of Aviation Montrose Regional Airport Montrose, Colorado 970

- 249

- 3433



### Legal Sponsor of Proposal

The Montrose Regional Airport (MTJ) is the legal sponsor of this grant pro posal.



### Community Partner

Colorado Flights Alliance joins the Montrose Regional Airport in its support for this grant proposal and is the community partner responsible for the matching portion of the grant funding.



### Air Service Deficiency: Lack of Eastbound Capacity and Very High Fares

Montrose Regional Airport suffers from having little available capacity to/from key eastbound markets during its peak season, which is typically Q1 due to the region being a premier winter recreation area . As the load factor table on the following p age illustrates, the primary eastern hubs operate with essentially full flights, making getting to/from the greater Montrose region time consuming and inefficient for those travelers
not fortun ate enough to be on one of the existing flights from Atlanta, D allas

– Ft. Worth, or Chicago.Propos al under the Small Community Air Service Development Program

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### In addition to the lack of available capacity, MTJ experiences significantly higher airfares than other regional airports, specifically Durango La

- Plata County Airport (DRO) and Grand Junction Regional Airport (GJT). The average one way gross fare at MTJ is approximately 29% higher than DRO and 17% higher than GJT to major eastern markets. This causes potential travelers to either utilize other airports in the region, or simply to not travel at all. The lost economic impa ct is significant on the Montrose region, which relies heavily on inbound visitors that enjoy the recreational activities in
the area.



# MTJ Avg. One Way Gross Fares to Key Ea stern Markets vs. Other Regional Airports

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### Overview of Grant Request

Due to the lack of available seat capacity and the extremely high airfares, Montrose Regional Airport respectfully submits its Small Community Air Service Development Program (SCASDP) grant proposal for revenue guarantee to increase and expand upon
the a lready successful east coast air service access. A portion of the grant funding and the community match will go towards targeted marketing and advertising of the new
service. C arrier s’ hubs east of MTJ with strong connectivity will be considered by the
air port, including increasing access at already successful hubs such as ORD, DFW, and
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# 2. MTJ Market Area and Air Service Deficiency

Geographic Location & Market Population

Montrose Regional Airport is the main gateway to the Colorado Western Slope, and

serves a resident population of over 7 0,000. In addition to agriculture, the region is a major recreational destination, and a large resort industry is dependent on Montrose
R egional Airport for access to and from the rest of the nation and the globe.

The local population base is located along the north/south US 50/550 corridor, bordered by Delta, Colorado in the north, and Ouray/Red Mountain Pass to the south. In addition to agriculture and recreational tourism, the region has been attracting interest of lightPropos al under the Small Community Air Service Development Program

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### manufacturing industries. The additional air service, which this grant request can deliver, will be an enormous boost to the competitiveness of Colorado’s Western Slope within the global economy

.


### Seat Capacity vs. Other Regional Airports

The air service deficiencies at MTJ are illuminated when analyzing scheduled capacity at MTJ compared to other regional airports on the Western Slope of Colorado. Since 2007, MTJ has lost 4% of its seats, but approximately 34% of its scheduled departures. When

co mpared to DRO and GJT, the contrast is stark.



# MTJ Scheduled Departures and Seat Capacity vs. Other Regional Airports: CY 2013 vs. CY 2007

While DRO has lost 5% of its scheduled departures during this time period, its scheduled seat capacity has increased by an astounding 51% . In addition to DRO’s dramatic increase in seat capacity, GJT has also shown a 22% increase between 2007
and 2013. Whi le departures have decreased at all three of the airports, MJT’s decreasePropos al under the Small Community Air Service Development Program

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### is much greater, causing difficulty for travelers to access the region, and for outbound passengers to use MTJ for their travels. All three of the airports have seen increases in
air craft gauge, but again, MTJ has been hit hardest of the three Western Slope airports.



### Total Market Fare Comparison

In addition to fares to key eastern markets being higher at MTJ than both DRO and GJT, on a total market scale average one way gross fare s are even higher at MTJ than the other airports. MTJ has a 30% fare premium when compared to DRO, with an average one way gross fare of $323 for CY 2012. This is over $75 each way, and adds up quickly for a family of four wanting to take a vacation on the Western Slope.



# MTJ Avg. One Way Gross Fares vs. Other Regional Airports

– CY 2012

In addition to being higher than both DRO and GJT, the Montrose Regional Airport’s average fare is 46% higher than the national average ($323 vs. $221) for CY 2012. While the airport and community understand the realities of today’s airline industry, it is
th eir hope that new service will help bring fare parity to the community to be more in line with the other Western Slope airports.



### MTJ O&D Passenger Distribution: Eastern U.S. Dependent

Montrose Regional Airport and the region are dependent on passenger traffic to/from the eastern U.S. Over 60% of all passenger traffic come from the Great Lakes, Central, New England, Eastern, and Southern portions of the country. For this reason, it isPropos al under the Small Community Air Service Development Program

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### cr itical for the airport to gain increased air service access to/from these geographical locations, and that is the intent of this grant proposal.



# MTJ O&D Passenger and Revenue Distribution

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# 3. Grant Implementation Plan

Funding and Distribution Sources

As previously mentioned, Montrose Regional Airport is joined by Colorado Flights Alliance as its community partner in this grant application. It is proposed that the funding for new service is split between revenue guarantee and marketing/advertising, with the majority of the funding going towards the revenue guarantee portion.



### Risk Abatement Terms

Montrose Regional Airport, subject to Department of Transportation Approval, proposes to implement a risk abatement program with the following terms:

 Funding would be available to an airline providing nonstop service to a hub that is east of MTJ and provides increased eas tern U.S. access, including increased capacity for existing hubs.

 Upon award of grant funds, Montrose Regional Airport and its community partner will negotiate with prospective airlines. The best service proposal will be identified and a risk mitigation a greement between Montrose Regional Airport and the carrier will be negotiated.Propos al under the Small Community Air Service Development Program

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###  Risk mitigation funds would support the initial p hase of new air service. Montrose Regional Airport will negotiate a detailed service agreement with the carrier that is consistent with DOT guidelines for grant fund use.

 The costs of operating the new service will be defined in discussions with the
selected carrier and outlined in a contractual manner. Industry cost data for appropriate aircraft type and stage length will help guide the airport in these
discussions.

 A target for overall revenue associated with the new service and the component
of that revenue that will be credited to th e new rou te will be agreed upon, and a targe te d revenue figure per flight will be established.

 Montrose Regional Airport will monitor traffic and revenue reports for the new service, which will be provided by the selected carrier.

 Any revenue shortfall will be of fset with risk mitigation funds upon detailed
invoice fr om the selected carrier. Montrose Regional Airport, in turn, will invoice the Department of Transportation for its share of funding in the agreed upon

manner.

 Montrose Regional Airport will seek a on e year risk mitigation agree ment with
the selected airline.



### Marketing the New Service

Marketing and advertising will be critical to the success of the new service, and MTJ and its community partner are prepared to work tirelessly to increase awareness in specifically targeted markets. C ompone nts of the program will include the following:Propos al under the Small Community Air Service Development Program

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###  Local print media advertising illuminating the new service.

 Electronic and social media initiatives.

 A series of presentations at key civic organization s.



### Plan fo r Self Sufficiency

MTJ understands that there can be factors that will adversely affect ridership on a new route. Therefore, it will be in close liaison with the airline to quickly identify any reduction in traffic and/or revenue growth on the new service

.

1) MTJ and Colorado Flights Alliance have an extensive background in recruiting seasonal service and taking quick action when indicated to assure success.

2) This program is, at its foundation, a partnership with the airline. The Airport and Community will work to identify any areas or dynamics which can enhance ridership,
and will be in on

- going contact with the carrier.

3) In this regard, MTJ and Colorado Flights Alliance have access to local, regional and
ai rline industry data and business intelligence. This includes sophisticated programs that track passengers by market, zip code and travel segment.

These will be used to support the carrier and provide input regarding matters such as scheduling shifts. Impo rtantly, this new service will be operated with airliners capable of moving travel groups a nd their sports equipment. Colorado Flights
Alliance will assure that this portion of the travelling public is attracted to the new
service.July 22, 2013

Ms. Brooke Chapman
, Associate Director 

# MONTROSE COUNTY
U

0 L 0 IL\ U 0

ADMINISTRATION

Small Community Air Service Development Program U.S. Department of Transportation 8th Floor, Room W86-307 1200 New Jersey Avenue SE, Washington D.C. 20590

Dear Ms. Chapman:

On behalf of the Montrose County Commissioners I want to express our County ' s unwavering support for the 2013 Small Community Air Service Development G r ant proposal. Our organization realizes the benefit and importance of decreasing the higher than average airfares into our region and increasing access to the east coast.

Increasing and expanding service will have a significant impact on stimulating our regional
economy. This grant opportunity will provide additional resources to support our continuing efforts to provide a national and international conduit to the Western Region of Colorado.

We are committed to the economic diversification of our region and expanding air service provides the economic impact that allows us to execute our diversification efforts. Our airport receives overwhelming community and regional support to mature our air service program and
your support will strengthen our ability to that end.

Thank you very much for your consideration of our grant submission, we truly appreciate it.

Sincerely
,

# ~,d;C0S**~o;/.** Eckert County Manager

RC: lda

Cc: Ronald Henderson
, Chairman David White, Commissioner, Gary Ellis, Commissioner
161 South Townsend Avenue, Montrose
, CO 81401. Te l ephone : 970-249-7755 F ax : 970-249-7761July 26, 2013

Ms. Brooke Chapman, Associate Director Small Community Air Service Development Program U.S. Department of Transportation 8th Floor, Room W86-307 1200 New Jersey Avenue SE, Washington D.C. 20590
Re: Small Community Air Service Development Grant (SCASDG)

Dear Ms. Chapman:

I am writing on behalf of the Montrose Economic Development Corporation, (MEDC), its Board of Directors and our business investor partners in support of the Montrose Regional Airport’s application for the 2013 Small Community Air Service Development Grant.

The mission of the MEDC is to strengthen and diversify the economy for all of Montrose County. Montrose is home to many primary employers who do business globally. In order for these companies to do business in our community and remain competitive, they need diverse, dependable and affordable air service. As these businesses have grown, so has their need for additional air travel. Currently flights are at capacity and rates are high.

The 2013 SCASDG would allow Montrose Regional Airport to increase the availability of flights to the east coast and that in turn should assist in keeping flights more affordable. Efforts such as this will help increase business opportunities in our community which will benefit all citizens of Montrose County.

We strongly encourage you to make a favorable decision when considering the Montrose Regional Airport’s application for the 2013 Small community Air Service Development Grant.

Respectfully,

Executive Director Montrose Economic Development Corporation 100 Tessitore Ct. Suite A Montrose, CO 81401 sandyh@MontroseEDC.org