# Application Under the Small Community Air Service Development Program

Docket DOT

- OST

- 2012

- 0069

June 11, 2012

Gulfport

- Biloxi International Airport

14035

- L Airport Rd Gulfport, MS 39503

Tel: 228

- 863

- 5951

Fax: 228

- 863

- 5953 

# Gulfport

- Biloxi Regional Airport Authority

DUNS

– 088924246



# TAX ID

- 64

- 0602544

Congressional District Code

– MS 04SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST

- 2011

- 0119

SUMMARY INFORMATION

All applicants must submit this information with their proposal, along with a completed form SF424 on

http://www.grants.gov

.

A. A PPLICANT I NFORMATION : (C HECK A LL T HAT A PPLY )

Not a Consortium Interstate Consortium Intrastate Consortium

Community now receives EAS subsidy

Community (or Consortium member) previously received a Small Community Grant

If previous recipient: Date of grant: 9

- 6

- 2005 Expiration date of grant: 9

- 6

- 2008 Federal Funds Requested: $750,000
Carrier(s) Service Obtained: American Airlines / American Eagle Destination(s) Served: ORD

B. P UBLIC /P RIVATE P ARTNERSHIPS : (L IST O RGANIZATION NAMES )

PUBLIC PRIVATE

1. Gulfport

- Biloxi Regional Airport Auth 1. Gulf Coast Business Council

2. Harrison County CVB 2. Gulf Coast Chamber of Commerce

3. Mississippi Development Authority 3. MS Gulf Coast Tourism Partnership

4. 4.

5. 5.

C. 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) XD. E XISTING L ANDING A IDS AT L OCAL A IRPORT :

Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

E. 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 $950 ,000

2 State cash financial contribution

Local cash financial contribution

3a Airport cash funds $50,000

3b Non

- airport cash funds $600,000

3 Total local cash funds ( 3a + 3b ) $6 50,000

4 TOTAL CASH FUNDING ( 1+2+3 ) $1,60 0,00 0

In

- K ind contribution

5 a Airport In

- Kind contribution ** $60 ,000

5b Other In

- Kind contribution **

5 TOTAL IN

- KIND CONTRIBUTION

( 7a + 7b ) $ 60,000

6 TOTAL PROJECT COST ( 4+8 ) $1,6 6 0 ,00 0

IN

- KIND CONTRIBUTIONS**

For funds in lines 7a (Airport In

- Kind contribution) and 7b (Other In

- Kind contribution), please

describe the source(s) of fund(s) for each.

Airport In

- Kind contribution

– Air Service Development incentive program. Waiving of landing

fees for new service to Ft. Lauderdale , Orlando, or other hub , base, focus city in Florida

. Calculated based on a minimum of 3 flights per wk.F

. 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.

G. 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)

_____________________________________________ _______________________________________

________________________________________________________________________

# Table of Contents

SECTION 1 Air Service Needs

SECTION 2 Strategic Plan

SECTION 3 Project Funding Plan

SECTION 4 Previous SCASDG Comparison

SECTION 5 Public

– Private Partnership

SECTION 6 Summary1 

## SECTION 1

– AIR SERVICE NEEDS

The past seven years have presented numerous economic challenges for the MS Gulf Coast.
First, we experienced t he worst natural disaster in American history (Hurricane Katrina), then

record fuel prices, r ecession, and most recently

, the largest man

- made disaster in our nation ’s history ( T he Deepwater Horizon O il S pill). The resilience of the MS Gulf Coast has been put to

the ultimate test. Air service levels from the Gulfport

- Bil oxi International Airport (GPT) have

suffered as a result of these challenges . The noted decline s in air service will continue to negatively affect the ability of the local economy to fully recover.

T ourism establishments have suffered a decline due to the loss of low co st air service to key

Florida markets. The $1.6 billion dollar MS Gulf Coast tourism industry is not just important to the local economy but is also a substantial economic component for the State of Mississippi. Nonstop l ow fare air service to a hub and local inbound traffic from key Florida markets is

crucial in sustai n ing this vital tourism sector

.

March 2011 marked the loss of service from GPT’s only low cost carrier, AirTran Airways. AirTran provided a critical link to their network in Atlanta, GA (ATL) . AirTran also provided daily nonstop access to Ft. Lauderdale (FLL) from April 99 to Jan. 2009

.

Due to recent airline mergers and a cquisitions

, the scheduled air service offerings from GPT

have declined considerably. The realistic opportunity for GPT to restore low cost air service

, leads to air carriers with a base, hub, or focus city in Ft. Lauderdale (FLL) or Orlando (SFB / MCO) . Ft. Lauderdale , FL (FLL)

, historically a critical market for GPT

, produced over 27,500 annual enplanements in 2008. DOT reports indicate that o ver 68 % of the FLL traffic was

inbound to the MS Gulf Coast. Orlando, FL (SFB / MCO) produced over 49 ,000 annual pax at its peak in 2008. Over 51% of the Orlando, FL traffic was inbound to the MS Gulf Coast.

The MS Gulf Coast C ommunity and Gulfport

- Biloxi Regional Airport Authority believ e that funds awarded through the SCASDP will provide the support needed to attract and retain

critical air service t o target underserved markets . We believe that our proposal meets the requirements of the Small Community Air Service Development Program. The funds requested will address a major air service deficiency in the MS Gulf Coast R egion.

GPT is truly grateful for this opportunity and we thank you for considering our application.2 

## Location and Population

The Gulfport

- Biloxi International Airport (GPT) is the only commercial service airport on the MS Gulf Coast. GPT is centrally located in Harrison County, the commerce, industrial, and entertainment center of the area. GPT prim arily serves six counties in Southern Mississippi. The primary air service area has a population of approximately 400,000 while the overall air service influence area is comprised of a population of over 1 million.



## Current Air Service

GPT is currently served by American Eagle , Delta Air Lines

, United Airlines, US Airways, and Vision Airlines. GPT has nonstop service to 4 hubs and less than daily service (5 flights per week) to St. Petersburg

- Clearwater, FL (PIE).

GPT 2012 ROUTE MAP3 

## Air S ervice Deficiencies

Over the past 4 years, the national trend for small hub airports has been one of continuous decline. There are numerous obstacles, most of which are outside the airports direct control. The need for additional support at GPT is premised on obvious significant declines in air

service levels . The data clearly identifies the loss of inbound traffic due to the loss of nonstop low fare options, at the same time

, a significant loss to local generated traffic through leakage to neighbo ring airport MSY

. A major component of the MS Gulf Coast market is leisure

inbound customers. The ability to capture this traffic is hinged on the availability of nonstop low cost air service options.

GPT SCHEDULE COMPARISON

– JUN 08 / 12

Ops/Week Seats/Week
Mktg Al Dst Jun12 Jun08 Diff Pct Chg Jun12 Jun08 Diff Pct Chg

American Airlines DFW 28 21 7 33.33 1,400 1,008 392 38.89

American Airlines ORD 0 6

- 6

- 100.00 0 300

- 300

- 100.00

Continental Airlines IAH 0 42

- 42

- 100.00 0 1,957

- 1,957

- 100.00

Delta Air Lines ATL 41 55

- 14

- 25.45 3,870 3,530 340 9.63
AirTran Airways ATL 0 14

- 14

- 100.00 0 1,638

- 1,638

- 100.00
AirTran Airways FLL 0 7

- 7

- 100.00 0 819

- 819

- 100.00
AirTran Airways TPA 0 7

- 7

- 100.00 0 819

- 819

- 100.00
Allegiant Air SFB 0 3

- 3

- 100.00 0 450

- 450

- 100.00

Northwest Airlines MEM 0 21

- 21

- 100.00 0 1,050

- 1,050

- 100.00

United Airlines IAH 33 0 33 100.00 1,650 0 1,650 100.00 US Airways CLT 27 21 6 28.57 1,350 1,050 300 28.57

Vision Airlines PIE 5 0 5 100.00 610 0 610 100.00

Direct Air PIE 0 3

- 3

- 100.00 0 435

- 435

- 100.00

TOTAL 134 200

- 66

- 33.00 8,880 13,056

- 4,176

- 31.99

GPT has suffered significant declines in air service options since 2008. Nonstop destinations

fell from 10 in 2008 to only 5 today. As a result, total operations per week are down

- 33% and seats available per week are down

- %32. Both AirTran Airways and Allegiant Air have exited the market leaving GPT without low fare access to key Florida markets. Source: U.S. DOT, Origin

- Destination Passenger Survey, via DIIO

.4

GPT AVG FARE COMPARISON

As a result of declining competition levels and the loss of AirTran Airways serv ice in 2011

, GPT average fares have increased 28% over 2008 . DOT reports indicate average O&D one way fare incre ased to an all

- time high of $249 in Q3 2011.

GPT O&D PASSENGER HISTORY

GPT O&D passenger counts have followed a steady path of decline since the peak in Q2

2008. DOT reports indicate at peak Q2 2008 GPT served 119,751 passengers

. Q4 2011 DOT data indicates a steep decline down to 71 ,740 passengers. The l oss of low cost air service from AirTran and Allegiant Air to key Florida markets is the primary cause. Source: U.S. DOT, Origin

- Destination Passenger Survey, via DIIO

.

Source: U.S. DOT, Origin

- Destination Passenger Survey, via DIIO

.5

The significant decline in air service levels at GPT ultimately results in significant leakage to neighboring medium hub airport, Louis Armstrong International Airport (MSY)

. MSY is located approximately 90 miles to the west of GPT. On average GPT “leaks” over 36% of the traffic generated in its air service influence area. This leakage is primarily due to the availability of

numerous nonstop flights and the presence of low fare carriers at MSY.

GPT 2009 LEAKAGE

- POST AIRTRAN SERVICE

TOP 20 LEAKED MARKETS RANKED BY % LOST

– CY 2009 Source: GPT Airport Leakage Analysis.

Source: GPT Airport Leakage Analysis.6 

## Florida Service Restoration

The absence of nonstop service to Florida markets results in an immediate, easily identifiable

loss of traffic to/from GPT. Valuable l eisure in

- bound customers from Ft. Lauderdale and Orlando, FL, which are crucial to the MS Gulf Coast economy, are not being recaptured via connecting flight opportunities in the market today. Also, l ocal generated GPT customers are

forced to drive over 180 miles r ound trip to neighboring airport MSY to access low fare nonstop service to these key Florida cities. Low cost access to a hub, base, or focus city in Florida

would also provide additional connecting options to a broad spectrum of the traveling public to

n umerous cities in the East / NE. Increased competition on these beyond markets would offer additional travel options and potentially lower overall fares at GPT

.

GPT

- FLL

Restoration of FLL service will result in an immediate positive impact to overall air service

levels at GPT. The FLL route is viable opportunity due to significant historical local demand, the relatively short stage length, and the presence of a low cost carrier base with Spirit Airlines.7

GPT

- FLL DEMOGRAPHIC COMPARISON

– 60 mile radius

The value of the FLL customer to the MS Gulf Coast economy is clearly defined in the demographic comparisons. Low cost nonstop access offers a critical link to a massive population base with enormous purchasing power relative to that of South Mississippi,
Louisiana, and Alabama.

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000

2011 

## Population

GPT

FLL

$0

$20,000,000,000 $40,000,000,000 $60,000,000,000 $80,000,000,000 $100,000,000,000 $120,000,000,000

2011 

## Purchasing Power

GPT

FLL

$0 $20,000 $40,000 $60,000

2011 

## Avg. Household

Income

GPT

FLL8

FLL HISTORICAL O&D

AirTran Airways provided one daily nonstop flight to FLL from April 1999 until Jan. 2009. O&D traffic from South Florida (FLL, PBI, MIA) markets peaked at over 71,070 O& D passengers. The loss of the nonstop service to resulted in the loss of over 27,500 annual enplanements.

FLL

- AVG FARE / PDEW COMP

Source: U.S. DOT, Origin

- Destination Passenger Survey, via DIIO

. Source: U.S. DOT, Origin Destination Passenger Survey and T

- 100 Data, via Data Base Products, Inc.9

FLL average fares have increased over 42 % and passengers daily each way have declined sharply from the peak of 80 in Q2 2008 to just 10 today.

FLL

– GPT POINT OF ORIGIN

A clear indicator of leisure demand from the FLL market is depicted in point of origin data. At

its peak in 2008, over 78% of the GPT

- FLL traffic originated in the FLL market. This significant inbound demand is a direct result of the low cost nonstop option available. Without the nonstop option, inbound traffic is no longer traveling to GPT.

MSY vs. GPT

- FLL AVG FARE

The average one way fare to FLL from MSY was on average over $28 less than GPT in 2011. $0 $50 $100 $150 $200 $250

2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4 Avg OW Fare 

## FLL Avg. Fare Comp

GPT

MSY Source: U.S. DOT, Origin

- Destination Passenger Survey, via DIIO

.

Source: U.S. DOT, Origin

- Destination Passenger S urvey, via DIIO

.10

MSY vs. GPT

- FLL SCHEDULE COMP

Southwest Airlines currently operates 2 daily flights from MSY to FLL.

FLL LEAKAGE DATA

Over 23,520 FLL bound passengers are generated in the GPT air service influence area. Due

to the low cost nonstop access offered at MSY, GPT loses over 67% or 15,669 annual passengers to M SY. 0 10 20 30 40 50 60 70

Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Flights per month 

## FLL

- Nonstop Flight Comp

MSY - WN

GPT - FL

Source: OAG

.

Source: 2009

- 10 GPT Leakage Study

– Boyd Group11

GPT

- MCO

Restoration of MCO/SFB service will result in an immediate positive impact to overall air

service levels at GPT. The MCO/SFB route results in a truly viable opportunity due to significant historical local demand, the relatively short stage length, and the presence of a

new ly established low cost carrier base with Frontier Airlines. Historical service offered with Allegiant Air and Delta Air Lines resulted in substantial demand in both directions.12

GPT

- MCO DEMOGRAPHIC COMPARISON

– 60 mile radius

The value of the MCO customer to the MS Gulf Coast economy is clearly defined in the demographic comparisons. Low cost no nstop access offers a critical link to a massive population base with enormous purchasing power relative to that of South Mississippi,
Louisiana, and Alabama.

$36,000 $38,000 $40,000 $42,000 $44,000

2011 

## Avg. Household

Income

GPT

MCO

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

2011 

## Population

GPT

MCO

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

2011 

## Purchasing Power

GPT

MCO13

MCO/SFB HISTORICAL O&D

Allegiant Air provided less than daily service to SFB from Jun 07 to Jan 09. At the peak in 2008, O&D traffic from Orlando, FL produced over 49,000 annual passengers to GPT.

MCO/SFB

- AVG FARE / PDEW COMP Source: U.S. DOT, Origin Destination Passenger Survey and T

- 100 Data, via Data Base Products, Inc.

Source: U.S. DOT, Origin

- Destination Passenger Survey, via DIIO

.14

Due to the loss of nonstop low fare service, MCO/SFB average fares from GPT have increased over 61% and passengers daily each way have declined sharply from the peak of 72 in Q2 2008 to jus t 12 today.

MCO/SFB

– GPT POINT OF ORIGIN

A clear indicator of leisure demand from the MCO/SFB market is depicted in point of origin data. At its peak in 2008, over 57 % of the GPT

- MCO/SFB traffic originated in the Orlando, FL market. This significant inbound demand is a direct result of the low cost nonstop option available. Without the nonstop option, inbound traffic is no longer traveling to GPT.

MSY vs. GPT

– MCO/SFB AVG FARE

The average one way fare to MCO from MSY was over $35 less than GPT in 2011. $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200

2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4 Avg OW Fare 

## MCO/SFB

- Avg Fare Comp

GPT

MSY Source: U.S. DOT, Origin

- Destination Passenger Survey, via DIIO

.

Source: U.S. DOT, Origin

- Destination Passenger Survey, via DIIO

.15

MSY vs. GPT

– MCO/SFB SCHEDULE COMP

Southwest Airlines currently operates 4 daily flights from MSY to MCO. The absence of nonstop service at GPT leads to significant leakage rates.

MCO/SFB LEAKAGE DATA

Total traffic generat ed annual l y within the GPT air service influence area and Orlando , FL was nearly 47,000

, however

, GPT captured only 11,500 of these passengers. This equates to a leakage rate of greater than 75%. 0 20 40 60 80 100 120 140 160

Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Flights Per Month 

## MCO/SFB

- Nonstop Flight Comp

MSY - WN

GPT - G4

Source: OAG

.

Source: 2009

- 10 GPT Leakage Study

– Boyd Group16 

## Air Service Development Efforts

– Past 3 Years

Over the past three years the Airport Authority has been proactive in its efforts to attract and retain air service. We have devised innovative approaches for supporting new and existing air service. Our air service development efforts include: airline incentive pro grams, aggressive marketing support initiatives, creation of public

- private partnerships, air service development surveys and studies, composition of numerous business case proposals to key airline network planners.

We have employed consultants to provide support with conducting air service studies and also to compose data for business case presentations to targeted airlines.

We have recently completed the following studies:

2010 Airport Economic Impact and Leak age Study

2011 Airport Strategic Plan Update

In 2006, immediately following Hurricane Katrina, we created and hosted an annual Economic Development Summit with a primary focus on air service development. The Summit has been a valuable tool in bringing b oth public and private entities together to initiate air service development efforts. We also meet to discuss existing and new service initiatives with airline network planners on a regular basis at either headquarter meetings or industry functions like

J umpstart and Network.

Airline Meeting History:

2009 2010 2011

Delta Air Lines Continental Airlines Spirit Airlines US Airways Delta Air Lines Allegiant Air

American Airlines Spirit Airlines Frontier Airlines AirTran Airways Vision Airlines US Airways Allegiant Air Branson Air Express United Airlines

United Airlines17 

## SECTION 2

– STRATEGIC PLAN

Goals

GPT has four goals with its Small Community Air Service Development Grant Proposal for service to Ft. Lauderdale (FLL), Orlando (MCO), or other low cost carrier hub , base, focus city

in Florida.

Restore a nonstop link to key Florida markets

– Specifically FLL or MCO (SFB)

Lower fares and offer additional access to underserved markets

Rever se the decline in GPT’s O&D traffic Recapture traffic leaked to MSY



## Action Plan

In today’s volatile economic environment

, air carriers are extremely risk averse. Air carriers

continue to ration capacity and opportunity for growth has become a competition between airports across the country

. The addition of new air service in today’s environment requires a

solid business case depicting substantial demand

, it’s also backed by community support an d in many cases a financial subsidy. The minimum revenue guarantee (MRG) has historically been one of the most effective tools in securing new air service.

With funds awarded through the Small Community Air Service Grant

, GPT will first approach

carriers with a hub, focus, base city in Ft. Lauderdale (FLL) and/or Orlando (MCO / SFB). The targeted carriers will be Spirit Airlines and Frontier Airlines . If GPT is unable to attract the aforementioned carriers we will approach O&D carriers su ch as Allegiant Air to provide access to key Florida markets.

Upon securing the air service through the use of a revenue guarantee, GPT will work with the carrier and public

- private partners to devise an aggressive ad campaign in the Florida market to promote the new s ervice. GPT will also create an aggressive ad campaign targeted at local customers in its air service influence area. The marketing / promotional campaign will launch at minimum of 90 days prior the service start date.

GPT will assist in the preparation of an agreement with the carrier i dentifying the revenue guarantee support allocation details. This will include:

Definition of the revenue expectations for the route and what will constitute a fair revenue performance for the airline. The agreement will contain stipulations on scheduled air service of at least 3 flights per week and reasonable pricing and availability of seat inventory on the flights.18

It is intended that cost, revenue, and performance criteria will be monitored and reported on a mont hly basis and that the final accounting of any revenue support will be made at the end of the first year of operation.



## Project Timeline

ACTIVITY 2012

- 13

Negotiate Revenue Guarantee Agreement (1 yr) September 2012

Announce Service October 2012

Publish Schedule October 2012

Market New Route October

– June 2013

Monitor Advance Bookings October

– June 2013

Begin Service February 2013

Monitor Route Performance I n definitely

Submit Grant Status Repor ts to DOT Q1 2013

– Q1 2014

If the service is not initially successful and the revenue guarantee funds are depleted, GPT will work with the public

- private partnership to secure additional funding for promotional / marketing support. We will also work closely with the carrier and evaluate their requested needs to continue and sustain the service. If needed, the creation of a travel bank or seat

block commitment from stakeholders will be initiated.



## Promotion

- Seat Purchase Campaign

With today’s transportation challenges image advertising is not enough to entice customers to use available air service. There must be an aggressive approach that demands attention an d presents itself as a valuable cost savings.

Historically the Harrison County Convention and Visitors Bureau and Mississippi Development Authority have deployed innovative promotional strategies targeted at enticing visitors to the MS Gulf Coast. These strategies are premised on counteracting the ne gative effects of the increasing cost of transportation associated with escalating fuel prices.

HISTORICAL REBATE PROMOTION SUMMARY1 9

Book two nights at a hotel property on the MS Gulf Coast and receive a promotional gas card ($75) or a cash gift card ($ 100).

AIR SEAT REBATE PROMOTION

GPT proposes a similar strategy in key Florida markets where low cost air service access is
present.

Book two nights at a hotel property on the MS Gulf Coast and receive one free round trip airfare valued at $250.

We request that $100,000 from the grant funds be allocated to this promotion for the sole purpose of purchasing air seats directly from the targeted air carrier. We will aggressively

market this offer with a portion of the $6 00,000 in public

- private partners hip advertisement funding.



## SECTION 3

– PROJECT FUNDING PLAN

Project Description

The Gulfport

- Biloxi Regional Airport Authority is seeking a grant in the amount of $9 50 ,000 from the Small Community Air Service Development Program to provide revenue and marketing support for the restoration, recruitment and development of nonst op service to Ft. Lauderdale, Orlando, or other base, hub, or focus city in Florida

.

The grant funds will be matched with $600 ,000 from public

- private partnership, $50,000 in Airport funds, and $60,000 in Airport In

- kind funds.20 

## Contact

Clayton L. Williams

Executive Director Gulfport

- Biloxi International Airport

14035

- L Airport Road Gulfport, MS 39503

Tel: 228

- 863

- 5951

Fax: 228

- 863

- 5953



## Project Sponsor

The official sponsor of this project is the Gulfport

- Biloxi Regional Airport Authority.



## Critical Milestones

- Reporting

The effectiveness of the grant proposal objectives will be gauged throug h closely monitoring existing air service levels and ultimately through improvements in passenger volume and

service levels.

GPT will closely monitor:

Advanced bookings

– through direct airline reports Quarterly DOT traffic data

– O&D reports Strengths a nd weaknesses of ad campaign Monitor financial performance of the route

GPT proposes the success of the Small Community Air Service Development Grant Award be evaluated based on the following milestones.

Secure at a minimum 3 day per week nonstop air service to either Ft. Lauderdale, FL or Orlando, FL. Annual O&D passenger growth of at least 7% after the first year of project implementation.

The airport, as the sponsor of this grant application, will be r esponsible for overall administration of this program.

The Gulfport

- Biloxi Regional Airport Authority will provide quarterly reports to U.S. DOT regarding the progress of the ACTION PLAN objectives as well as an accounting of funds

used.21 

## Community Assura nces

Assurances that the grant money would be spent in accordance with the grant program stipulations and the proposal outline would be in the form of an independent annual audit, transaction recording standards, functional oversight of transactions by Ai rport Authority Staff, reporting to elected and appointed officials (not on the Authority staff), and a contractual obligation that designates proper use and expected outcomes of the marketing efforts.

Since the primary partners for the airport are munici palities, the reporting and audit requirements are stringent. An annual audit is required to be performed by an outside audit firm. The airport transactions are subject to all sampling, testing, and audit standards applied by that audit firm to ensure th at the information fairly and materially states the financial condition of the entity. All transactions are recorded using Generally Accepted Accounting Principles (GAAP) as established by the Governmental Accounting Standards Board. Compliance testing i s performed to ensure that grant funds (considered restricted) are being used as designated by the awarding entity.

The Finance Department has an Accountant specifically assigned to monitoring grants and reporting their status quarterly. The Executive D irector is responsible for approving all transactions on a day

- to

- day basis and reviewing the expenditures and performance measurement results. Monthly financial reports are delivered to the elected officials (Airport Board) and the Airport Steering Commi ttee (advisory committee for the operations of the airport). These reports are available for public review.

A contract for marketing services will be written to include performance standards. These standards are intended to ensure that the grant money (should we be granted the opportunity) would be spent in a manner consistent with the requirements of this program and our proposal.

The Airport Authority is traditionally very successful with monitoring grant programs, given the tools and processes in p lace as standard operating procedure.



## SECTION 4

– PREVIOUS SCASDG COMPARISON

The Gulfport

- Biloxi Regional Airport Authority was awarded a SCAS D G in 2005. The 2005 grant was amended from our original proposal due to changing needs of the airport and region

as a direct result of Hurricane Katrina. Our 20 12 grant proposal is substantial ly different in that

it seeks funding for a revenue guarantee program for a n air carrier to provide acc ess to key

local Florida market s which have historically been vital to the Gulf Coast economy. Although the targeted Florida markets are primarily based on local traffic, the new service will also provide access to additional beyond markets via the targeted carrier’s hub operation.22

2005 SCASG SUMMARY

• Grant funds awarded in the amount of $750,000

• $700,000

– Revenue Guarantee

• $50,000

– Marketing / Promo / Market Assessment

• American Eagle began non stop service from GPT

– ORD on December 13, 2007.

• The revenue guarantee funds were depleted on April 2008. Due to increased operational costs associated with a significant increase in fuel costs, AE discontinued the nonstop ORD service on November 200 8.

G RANT FUNDING COMPARISON

2005 SCASG AWARD

Recruit and build air service to CVG, or other hub that provides travelers convenient access to a broad range of destinations, thru use of a revenue guarantee, subsidy, or

other financial incentive.

Estab lish a marketing program to advertise/promote the new service.

Revenue Guarantee (ORD)

- $700,000

Marketing / promotion / Study

- $50,000

Federal Amount

- $750,000

TOTAL $750,000

2012 SCASG PROPOSAL

Recruit, r estore

, and sustain a ir service to Ft. Lauderdale and / or Orlando, FL or a low cost carrier hub, base, or focus city located in Florida, through the use of a minimum
revenue guarantee.

Establish a marketing program to advertise/promote the new service.

Minimum Revenue Guarantee

- $850 ,000

– Federal amount

Seat Purchase Promotion

- $ 100,000

– Federal amount

Tourism Partner Marketing

- $600 ,000

Airport Marketing

- $50,000

Airport In

- kind (LANDING FEE WAIVER)

- $60,000

TOTAL $1, 660 ,00023 

## S ECTION 5

– PUBLIC

- PRIVATE PARTNERSHIP

The Gulfport

- Biloxi International Airport and the Mississippi Gulf Coast area businesses through a public / private partnership are working together to support air service development

initiatives.

• The public / private partnership includes the Gulf Coast Business Council, Harrison County Convention and Visitor Bureau, The Gulf Coast Chamber of Commerce , and the recently created MS Gulf Coast Tourism Partnership.

• Together, their support of commit ting financial resources allows GPT to sustain existing air service and help attract new air service.

• Funds allocated ($600 ,000) through the partnership will be used on supporting an aggressive advertisement campaign in the targeted Florida market.

• The MS Gulf Coast Tourism Partnership is a consolidated tourism entity representing

three coastal counties (Hancock, Harrison, Hancock)

.

• MS Gulf Coast Tourism Partnership and the Harrison County CVB employ the services

of an advertisement firm to assist in creating strategic ad campaigns . GPT will assist and provide the performance monitoring reports to gauge the effectiveness of the campaign. GPT will offer assistance in creative, media selection, and ad placement.

• We will use the expertise of these tou rism development entities to formulate the strategic destination campaign focused in the Florida market.

• We will ensure that the mechanism to monitor the effectiveness of the campaign is in place and we will work with the public

- private partnership to ame nd the strategy as

necessary.24 

## SECTION 6

- SUMMARY

Detailed DOT fare information was provided depicting GPT ’s average fares have increased sharply and have surpassed all

- time highs (peak $ 249 for Q 3 201 1)

. The community will provide a portion of the cost of the activity from local sources other than airport revenue sources by utilizing the public

- private partnerships that we have in place. The community has established a public

- private partnership to facilitate air carrier

service.

The assistance will provide material benefits to a broad segment of the traveling public, including business, education institutions, and other enterprises.

Assistance will be used in a timely manner. (see project timeline) Geographic Location of each applican t, including proximity to larger centers of air service and low fare service alternatives. GPT is the only commercial service airport serving six counties on the MS Gulf Coast. Our largest competitor is MSY located 90

miles to the west. MSY has low fare service from numerous carriers. The proposed federal grant amount request ed compared to local share is 25 %. The applicant did previous receive an award in 2005 and include s an explanation of

how the 2012 request is different. The community has demonstrate d commitment to and participation in the proposed grant project has been illustrated through the destination marketing and promotional support presented.

The Gulfport

- Biloxi International Airport and its partner communities are grateful for the opportunity to apply for this grant. It is our belief that these funds are critical to the future of our airport and region. We believe the opportunities to serve the public are substantial given

the potential for growth specific to our regional market.

### .Dulf Coast I Business

The Honorable Ray LaHood
Secretary of Transportation
U.S. Department of Transportation

400 Seventh Street, SW Washington, DC 20590

Dear Secretary LaHood: Council 11975 Seaway Road, Suite A120, Gulfport, MS 39503

p : 228.897.2020 I F : 228.896.8384
www.msgcbc.org

June 9, 2012

I would like to express my support for Gulfport-Biloxi International Airport's (GPT) application for the Small Community Air Service Development Program. The $950,000 grant is

a critical element to helping GPT restore air service to/from key Florida markets. Leisure and

business customers from these markets are crucial to the recovery and sustainability of the Mississippi Gulf Coast economy which has been deeply impacted in past years by Hurricane

Katrina, the Gulf of Mexico oil spill and the nationwide economic downturn.

Due to the declining levels of overall airline competition and the loss of Gulfport- Biloxi's onlylow-cost carrier in March of 2011, the Mississippi Gulf Coast tourism industry is missing

much needed tourism revenue. As a result of the decline in air service, low cost fares are
unavailable from Ft. Lauderdale, Orlando, and other Florida markets to the Mississippi Gulf

Coast. Also, the Mississippi Gulf Coast region and businesses are hampered by a decline in nonstop flights and increasing air fares.

The Gulfport -Biloxi International Airport is aggressively pursuing new air service in an
effort to restore the vital link to Ft. Lauderdale, Orlando, or other Florida cities. The ultimate goal is to target carriers with a base, hub, or focus city in the Florida market. The Small Community Air Service Development Grant is critical in finalizing an agreement with a targeted

air carrier. It is my hope that you will give their application every possible consideration.

Sincerely,

PresidentSTEVEN M. PALAZZO

4 "' DISTRICT, MISSISSIPPI HOUSE ARMED SERVICES

COMMITIEE

SUBCOMMITTEE ON SEAPOWER AND

PROJECTION FORCES

ASSISTANT REPUBLICAN WHIP

### C!Congre~~ 

# of tbe Wnfteb**~tate~ ~ou~e**  

## of**l\epre~entatibt~ ~a~btngton,**  

### tllQC 20515-2404 SUBCOMMITIEE ON READINESS

HOUSE SCIENCE, SPACE, AND

TECHNOLOGY COMMITIEE

CHAIRMAN, SUBCOMMITIEE ON SPACE

AND AERONAUTICS

June 6, 2012

The Honorable Ray Lahood
Secretary

U.S. Department ofTransportation

1200 New Jersey Avenue SE Washington, DC 20590-0001

Dear Secretary Lahood: SUBCOMMITIEE ON RESEARCH AND

SCIENCE EDUCATION

I would like to express my support for Gulfport-Biloxi International Airport's (GPT} application for the

Small Community Air Service Development Program. The $950,000 grant is a critical element to helping GPT restore air service to / from key Florida markets. Leisure and business customers from these

markets are crucial to the recovery and sustainability of the MS Gulf Coast economy which has been deeply impacted in past years by Hurricane Katrina, the Gulf of Mexico oil spill and the nationwide

economic downturn.

Due to the declining levels of overall airline competition and the loss of Gulfport-Biloxi's only low-cost

carrier in March of2011, the Mississippi Gulf Coast tourism industry is missing much needed tourism

revenue. As a result of the decline in air service, low cost fares are unavailable from Ft. Lauderdale,
Orlando, and other Florida markets to the Mississippi Gulf Coast. Also, the Mississippi Gulf Coast region and businesses are hampered by a decline in nonstop flights and increasing air fares.

The Gulfport-Biloxi International Airport is aggressively pursuing new air service in an effort to restore

the vital link to Ft. Lauderdale, Orlando, or other Florida cities. The ultimate goal is to target carriers

with a base, hub, or focus city in the Florida market. The Small Community Air Service Development

Grant is critical in finalizing an agreement with a targeted air carrier. It is my hope that you will give

their application every possible consideration.

Sincerely,

# ~~~ Steven M. Palazzo

Member of Congress

WASHINGTON. DC"

331 CANNON HOUSE OFFICE

BUILDING
WASHINGTON, DC 20515

PHONE: (202) 225-5772

FAX: (202) 225-7074 GULFPORT1325 25TH A VENUE
GULFPORT, MS 39501

PHONE: (228) 864-7670

FAX: (228) 864-3099 HATIJESBURG:

641 MAIN STREET, SUITE 142

HATIIESBURG, MS 39401

PHONE: (601) 582

- 3246

FAX: (601) 582

- 3452

www .palazzo

. house

. gov PASCAGOULA:

3118 PASCAGOULA STREET

SUITE 181
PASCAGOULA, MS 39567

PHONE: (228) 202-8104

FAX : (228) 202-8105 .I..AllRE1.;

1514 W lOTH STREET, SUITE 3
LAUREL, MS 39440

PHONE: (601) 428-9711

FAX: (601) 428-9704ROGER F. WICKER

MISSISSIPPI

ARMED SERVICES

BANKING, HOUSING, AND URBAN AFFAIRS

COMMERCE, SCIENCE AND TRANSPORTATION

VETERANS' AFFAIRS

The Honorable Ray LaHood 

# tlnitro**~tares ~cnatc**  WASHINGTON, DC 20510

June 5, 2012

Secretary, U.S. Department of Transportation

400 Seventh Street, SW Washington, D.C. 20590-0001

Dear Ray, SUITE 555

DIRKSEN SENATE OFFICE BUILDING

WASHINGTON, DC 20510

(202) 224-6253

www.wicker.senate.gov

I would like to express my support for Gulfport-Biloxi International Airport (GPT)'s application for a Small Community Air Service Development Program Grant. Funding from the

U.S. Department of Transportation in the amount of$950,000 will help to restore vital air service

between Gulfport and key Florida locations. Leisure and business customers from these markets

are crucial to the recovery and sustainability of the Mississippi Gulf Coast economy.

My state has been deeply impacted in past years by Hurricane Katrina and the Gulf of

Mexico oil spill as well as the nationwide financial downturn. The loss of GPT's only low-cost

air carrier in 2011 and decreasing airline competition also have contributed to a loss of revenue
for the region's tourism industry. The Small Community Air Service Development Program is

critical to providing a link between Mississippi and the targeted Florida market.

I hope that you will give Gulfport-Biloxi International Airport's application every
consideration. Should additional information be required from my office, please contact Bevin

Wilkinson of my staff at (228) 604-2383.

With best wishes, I am

RFW/BW

P.O. Box 385

HERNANDO, MS 38632

(662)429-1002 P.O. Box 3777 TUPELO, MS 38803

(662) 844-5010 501 EAST COURT STREET, SUiTE 3.500 JACKSON, MS 39201

(601) 965--4644 452 COURTHOUSE ROAD, SUITE f

GULFPORT, MS 39507

(228} 604-2383 3118 PASCAGOULA STREET, SUITE 179
PASCAGOULA, MS 39567 (228) 762-5400THAD COCHRAN

MISS ISS I PP I

Mr. C l ay Williams

Executive Director

## ~CEIV£0 JU N 

## D ' 2

_

'2



# tinitrd**~tatrs ~rnatr**  WASH I NGTON, DC 20510

- 2402

May 31, 20 1 2

Gulfport-Biloxi International Airport

14 035-L Ai r por t Road

G

u lfpor t, MS 39503

Dear Mr

. Williams: COMM I TTEE ON

APPROPR I ATIONS

RANKING MEMBE R

COMM I TTEE ON

AGR I CULTURE

, N UTR I T I ON,

AND FORESTR Y

COMM ITT EE ON

RULES AND

ADMIN I STRAT I ON

Thank you for contacti n g my office regardi n g Gulfport

- Bi l oxi

International Airport's application for Small Community Air Service Developme n t Progra m grant fu n ds. In an e f fo r t to be of assistance, I

have written a letter of support on behalf of the airport to Secretary Ray LaHood

. I have also asked that my correspondence be attached to

your submission in f ile.

I thank you f or this opportunity to be o f service. Please d o not

hesita te to call on me again in th e future

.

Sincerely,

U

ni ted States Senator

TC/mbm