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 04
SMALL 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. APPLICANT INFORMATION: (CHECK ALL THAT APPLY)

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. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION 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. 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 (explain below)

X
D. EXISTING LANDING AIDS AT LOCAL AIRPORT:

Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

E. PROJECT COST: DO NOT ENTER TEXT IN SHADED AREA

LINE DESCRIPTION SUB TOTAL TOTAL AMOUNT

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) $650,000

4 TOTAL CASH FUNDING (1+2+3) $1,600,000

In-Kind contribution

5a 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) $1,660,000

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

PROCESS?

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. IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT? (IF “YES”, PROVIDE 

EXPLANATION)

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 Summary
1

SECTION 1 – AIR SERVICE NEEDS

The past seven years have presented numerous economic challenges for the MS Gulf Coast. 

First, we experienced the worst natural disaster in American history (Hurricane Katrina), then 

record fuel prices, recession, and most recently, the largest man-made disaster in our nation’s 

history (The Deepwater Horizon Oil Spill). The resilience of the MS Gulf Coast has been put to 

the ultimate test. Air service levels from the Gulfport-Biloxi International Airport (GPT) have 

suffered as a result of these challenges. The noted declines in air service will continue to 

negatively affect the ability of the local economy to fully recover. 

Tourism establishments have suffered a decline due to the loss of low cost 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 low fare air service to a hub and local inbound traffic from key Florida markets is 

crucial in sustaining 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 acquisitions, 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 over 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 Community and Gulfport-Biloxi Regional Airport Authority believe that 

funds awarded through the SCASDP will provide the support needed to attract and retain

critical air service to 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 Region.

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 primarily 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 MAP
3

Air Service 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 neighboring 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 service in 2011, 

GPT average fares have increased 28% over 2008. DOT reports indicate average O&D one 

way fare increased 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 loss 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

Market Traffic Generated Traffic Lost % Lost Reason

Houston - Hobby 52,432 52,084 99.34% Southwest Airlines @ MSY

New York - JFK 19,335 16,535 85.52% jetBlue Airways @ MSY

Orlando 46,698 35,198 75.37% Southwest Airlines @ MSY

Newark 21,319 14,940 70.08% Nonstops from MSY

Dallas/Ft. Worth 50,438 35,313 70.01% Pricing pressure on DFW service due to Southwest service MSY-DAL

Fort Lauderdale 23,520 15,669 66.62% Southwest Airlines @ MSY

Denver 25,962 15,956 61.46% United, Southwest & Frontier provide nonstops from MSY

Nashville 14,633 8,490 58.02% Southwest Airlines @ MSY

Tampa/St. Petersburg 23,915 13,485 56.39% Southwest Airlines @ MSY

Los Angeles 30,899 16,579 53.66% Southwest, United, and Delta provide nonstops from MSY

Seattle/Tacoma 20,657 10,693 51.77% Southwest pricing pressure

Houston - Intercontinental 35,159 17,970 51.11% Pricing pressure on IAH service due to Southwest service MSY-HOU

Chicago - O'Hare 24,591 12,108 49.24% Pricing pressure on ORD service due to Southwest service MSY-MDW; also nonstops on United & American

Boston 19,440 8,319 42.79% jetBlue Airways @ MSY

Baltimore 37,639 15,288 40.62% jetBlue & AirTran @ MSY

San Antonio 16,285 6,182 37.96% Southwest pricing pressure

San Francisco 14,634 4,723 32.28% Southwest pricing pressure - UNITED RECENTLY ANNOUNCED RESTORATION OF NONSTOP SERVICE

Detroit 14,848 4,744 31.95% Larger capacity increments @ MSY plus Southwest pricing pressure

Philadelphia 21,988 5,610 25.51% Larger capacity increments @ MSY plus Southwest pricing pressure

Charlotte 15,145 3,412 22.53% Larger capacity increments @ MSY

New York - LGA 23,039 4,954 21.50% Nonstops from MSY

Las Vegas 23,780 4,521 19.01% Southwest Airlines @ MSY

San Diego 18,056 3,056 16.93% Southwest connecting service @ MSY Washington - National 18,753 -4,954 -26.42% Premium on nonstops via MSY v connecting on AirTran

Atlanta 32,501 -27,811 -85.57% AirTran @ GPT

Other 380,419 76,250 20.04%

Total 1,026,085 369,316 35.99%

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 leisure 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, local generated GPT customers are 

forced to drive over 180 miles round 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 

numerous 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

FLL

Note: U.S. Source data is from U.S. 2000 Census. However, U.S. Business data is from 2006 while U.S. Estimated Population and Purchasing Power data are for 2011.

Note: Source: Statistics Canada, Profile for Forward Sortation Areas, 2006 Census, catalogue 94-581-XCB2006003.
8

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 Q12008 Q22008 Q32008 Q42009 Q12009 Q22009 Q32009 Q42010 Q12010 Q22010 Q32010 Q42011 Q12011 Q22011 Q32011 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 Survey, 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 MSY. 

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 Group
11

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 

newly 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 nonstop 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

MCO

Note: U.S. Source data is from U.S. 2000 Census. However, U.S. Business data is from 2006 while U.S. Estimated Population and Purchasing Power data are for 2011.

Note: Source: Statistics Canada, Profile for Forward Sortation Areas, 2006 Census, catalogue 94-581-XCB2006003.
13

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 just 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 Q12008 Q22008 Q32008 Q42009 Q12009 Q22009 Q32009 Q42010 Q12010 Q22010 Q32010 Q42011 Q12011 Q22011 Q32011 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 generated annually 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 Group
16

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 programs, 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 Leakage 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 both 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 

Jumpstart 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 Airlines
17

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 

Reverse 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 and 

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 such 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 service. 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 identifying 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 monthly 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 Indefinitely

Submit Grant Status Reports 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 and 

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 negative effects of the 

increasing cost of transportation associated with escalating fuel prices. 

HISTORICAL REBATE PROMOTION SUMMARY
19

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 $600,000 in public-private partnership advertisement 

funding. 

SECTION 3 – PROJECT FUNDING PLAN

Project Description

The Gulfport-Biloxi Regional Airport Authority is seeking a grant in the amount of $950,000 

from the Small Community Air Service Development Program to provide revenue and 

marketing support for the restoration, recruitment and development of nonstop 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.

Deliverables GPT Contribution Community Investment Grant Funds

Minimum Revenue Guarantee $850,000

Advertisment Local Destination

Promotion - Seat Purchase Campaign $100,000

Ad Campaign $50,000 $600,000

In-Kind

Landing Fee Waiver $60,000

Total $110,000 $600,000 $950,000
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 through 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 and 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 responsible 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 Assurances

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 Airport 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 municipalities, 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 that 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 is 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 Director 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 Committee (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 place as standard operating procedure.

SECTION 4 – PREVIOUS SCASDG COMPARISON

The Gulfport-Biloxi Regional Airport Authority was awarded a SCASDG 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 2012 grant proposal is substantially different in that 

it seeks funding for a revenue guarantee program for an air carrier to provide access to key 

local Florida markets 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 nonstop 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 2008. 

GRANT 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.

Establish 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, restore, and sustain air 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 $1,660,000
23

SECTION 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 committing 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 tourism 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 amend 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 Q3 2011). 

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 applicant, 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 requested compared to local share is 25%.

The applicant did previous receive an award in 2005 and includes an explanation of 

how the 2012 request is different.

The community has demonstrated 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, 

President 
STEVEN 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) 428-9704 
ROGER 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) 762-5400 
THAD COCHRAN 

MISSISSIPPI 

Mr. Cl ay Williams 

Executive Director 

~CEIV£0 JUN D ' 2 _ '2 

tinitrd ~tatrs ~rnatr WASHINGTON, DC 20510- 2402 

May 31, 20 12 

Gulfport-Biloxi International Airport 

14035-L Air port Road 

Gu lfport, MS 39503 

Dear Mr . Williams: 

COMMITTEE ON 

APPROPRIATIONS 

RANKING MEMBER 

COMMITTEE ON 

AGRICULTURE, NUTRITION, 

AND FORESTRY 

COMMITTEE ON 

RULES AND 

ADMINISTRATION 

Thank you for contactin g my office regardin g Gulfport-Bi l oxi 

International Airport's application for Small Community Air Service 

Developmen t Program grant fun ds. In an e f for 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 do not 

hesitate to call on me again in the future . 

Sincerely, 

United States Senator 

TC/mbm