Dun & Bradstreet DUNS Number: 106201270

Tax Identification Number: 62-6001466

Two-Digit Congressional District Code: 01

Tri-Cities Regional Airport

Blountville, Tennessee

Proposal under the Small Community Air Service Development Program

Docket DOT-OST-2011-0119

TRI
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

2

TABLE OF CONTENTS

INTRODUCTORY LETTER .................................................................................................................... 4

EXECUTIVE SUMMARY ........................................................................................................................ 5

AIR SERVICE OVERVIEW..................................................................................................................... 7

Catchment Area and Access to Alternate Airports................................................................................................. 7

Tri-Cities' Existing Air Service ................................................................................................................................ 8

Air Service Development Efforts ..........................................................................................................................10

Marketing and Promotion of Tri-Cities' Air Service ..............................................................................................11

AIR SERVCE DEVELOPMENT NEEDS AND DEFICIENCIES............................................................. 12

Capacity Trends and Discontinued Air Service....................................................................................................12

Traffic Trends .......................................................................................................................................................14

Leakage to Other Airports in the Region..............................................................................................................16

Domestic Fare Trends..........................................................................................................................................17

Twentieth Highest Domestic Fare in the United States .......................................................................................18

International Traffic and Fare Trends...................................................................................................................19

STRATEGIC PLAN .............................................................................................................................. 20

Proposed New Route ...........................................................................................................................................20

Goals ....................................................................................................................................................................20

Target Airline Support ..........................................................................................................................................21

Tri-Cities-Dallas/Ft. Worth Traffic and Fare Trends .............................................................................................21

Connecting Traffic and Revenue on American via Dallas/Ft. Worth....................................................................23

American Eagle's Success in the Asheville-Dallas/Ft. Worth Market..................................................................26

Grant Amendments/Alternate Strategies .............................................................................................................29

PROJECT IMPLEMENTATION, MONITORING AND FUNDING.......................................................... 30

Public / Private Partnerships ................................................................................................................................30

Project Funding ....................................................................................................................................................30

Implementation Timeline......................................................................................................................................31

PROJECT MONITORING AND FINANCIAL CONTROL...................................................................... 32

Success Metrics ...................................................................................................................................................32

Legal Sponsor......................................................................................................................................................33

Financial Controls ................................................................................................................................................33

APPENDIX A: REQUIRED SUMMARY INFORMATION ..................................................................... 34

A. Applicant Information....................................................................................................................................34
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

3

B. Public/Private Partnerships ..........................................................................................................................34

C. Project Proposal ...........................................................................................................................................34

D. Existing Landing Aids at Local Airport ..........................................................................................................35

E. Project Cost ..................................................................................................................................................35

F. In-Kind Contributions** .................................................................................................................................35

G. Is this application subject to review by state under Executive Order 12372 Process? ................................35

H. Is this applicant delinquent on any federal debt? .........................................................................................36

APPENDIX B: LETTER OF SUPPORT ............................................................................................... 37
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

4

INTRODUCTORY LETTER
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

5

EXECUTIVE SUMMARY

The Tri-Cities Airport Commission is requesting a Small Community Air Service Development grant in the amount 

of $250,000 to fund a minimum revenue guarantee on American Eagle for regional jet service between Tri-Cities 

and Dallas/Ft. Worth. In addition to the amount requested from the Department, organizations in the community 

have pledged $50,000 in cash that can be applied to the minimum revenue guarantee. Tri-Cities Regional Airport 

will provide in-kind contributions valued at $132,000 in the form of landing fee waivers over a period of two years 

from the date service begins.

Dallas/Ft. Worth service is proposed

because the market generates 15.7

passengers per day each way (PDEW), 

and it would provide service in one of 

Tri-Cities' largest markets without 

nonstop service. In addition to the local 

market, the proposed service could

provide connections to 88 other markets 

American serves from Dallas/Ft. Worth. 

With Tri-Cities' current air service, many 

of the markets American serves from 

Dallas/Ft. Worth now require more than 

one connection for Tri-Cities travelers. 

All Tri-Cities markets American and 

American Eagle could logically flow via Dallas/Ft. Worth-Tri-Cities generated 153 PDEW in 2010 at a high 

average one-way fare of $256 each way or $512 roundtrip.

Tri-Cities-Dallas/Ft. Worth service could likely duplicate American Eagle's success in the Asheville-Dallas/Ft. 

Worth market, which was inaugurated on a seasonal basis in April 2010. American Eagle operated the service in 

the similarly-situated Smoky Mountain community as planned from April through October 2010 and resumed 

service in 2011. The market generated a load factor of 79.5% through its duration in 2010, with four of the seven 

months having load factors in excess of 80%. American Eagle's resumption of the seasonal Asheville-Dallas/Ft. 

Worth service, coupled with a high load factor in the market, is a strong indication the market has been 

successful, and the success in Asheville could translate to success in Tri-Cities. 

Tri-Cities' average domestic ex-Allegiant fares are high, and stood at $224 each way in 2010 -- up from $193 in 

2009. This compares to an average domestic fare among all airports in the lower 48 United States of $157 in 

2010 and $143 in 2009. 
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

6

Tri-Cities is currently served by three carriers to four hubs: Atlanta, Charlotte, Chicago, and Detroit (although

Delta will discontinue Detroit service in September). Allegiant carries only point-to-point traffic on its service from 

Tri-Cities to Orlando/Sanford and St. Petersburg/Tampa and does not connect traffic beyond these destinations.

Tri-Cities is a large market. 639,000 residents live within a one hour drive of the airport; 1,193,000 residents live 

within a 90-minute drive of the airport. Parts of northeastern Tennessee and southwestern Virginia lie within one 

hour of the airport, and the extended catchment area extends into North Carolina and Eastern Kentucky.
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

7

AIR SERVICE OVERVIEW

Catchment Area and Access to Alternate Airports

Nearly 640,000 residents live within a one hour drive of Tri-Cities Regional Airport, and 1,193,000 residents live 

within 90-minute drive of the airport.

Tri-Cities Regional Airport is the closest Airport to most residents within a one hour drive of the airport, while 90

minute drive time coexists with portions of the Asheville and Knoxville airport catchment areas. Downtown 

Kingsport and the Knoxville airport are separated by 113 road miles and roughly two driving hours. The airport in 

Asheville is 98 road miles from downtown Kingsport, taking over 1.5 hours to traverse. 

In August 2011, the airport in Knoxville had a daily average of 55 nonstop flights to 16 hubs on 6 network carriers 

at an average fare of $221 in 2010. The airport in Asheville had a daily average of 29 nonstop flights to 9 hubs on 

5 network carriers at an average fare of $171 in 2010. These compare to Tri-Cities which has 16 average daily 

flights on 3 carriers to 4 hubs at an average fare of $224 in 2010.

Exhibit 1: Tri-Cities Regional Airport Catchment Area
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

8

Tri-Cities' Existing Air Service

Three network carriers, American, Delta and US Airways, serve Tri-Cities from four hubs. American serves TriCities from Chicago with two flights (one flight on Saturday). Delta currently operates service to Atlanta and 

Detroit, (Detroit will be discontinued in September), and US Airways serves Tri-Cities from Charlotte. In addition 

to the network carrier service, Allegiant operates less-than-daily service to Sanford/Orlando and St. Petersburg. 

Allegiant operates its service as point-to-point service and does not connect traffic beyond these destinations as 

the network carriers connect passengers beyond their hubs.

The most recent addition to Tri-Cities' air service was American, entering the market in July 2011 with two daily

round trips to Chicago. 

Tri-Cities has northbound and southbound service, but only one western gateway and no gateway to the Greater 

Southwest – the proposed Tri-Cities-Dallas/Ft. Worth service would provide service in not only to Dallas/Ft. 

Worth, but it would also provide connections to many markets that currently require a double connection when 

traveling to or from Tri-Cities.

Exhibit 2: Routes Currently Operated from Tri-Cities Regional Airport
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

9

The number of departures per day, average seats per departure and seats per day by market and by carrier for 

December 2011 are displayed in Exhibit 4. Delta will account for 48.9% of Tri-Cities' capacity in December 2011, 

US Airways will account for 30.1% and American will account for 9.1% of Tri-Cities' capacity. Collectively, the 

three network carriers will account for 88.1%, and Allegiant will account for 11.9% of Tri-Cities' total capacity. 

Tri-Cities' capacity by hub is highly concentrated at Atlanta and Charlotte. Delta's service to the Atlanta accounts 

for 48.9% of total capacity and more than half – 55.6% – of network carrier capacity. The US Airways service to 

Charlotte accounts for 30.1% of total capacity and 34.2% of network carrier capacity. The combined Atlanta and 

Charlotte service accounts for 89.7% of network carrier capacity in Tri-Cities.

Exhibit 3: Departures per Day*, Seats per Departure and Seats per Day by Market and Carrier at Tri-Cities – December 2011

* The number of departures per day is displayed in increments of sevenths (because there are seven days in a week). "1 6/7" is read as one

flight seven days a week with a second flight operated six of the seven days in a week. 

Carrier Destination

Departures 

per Day*

Seats 

per Departure

Seats 

per Day

% of Total 

Capacity

American Chicago 1 6/7 44 81 9.1%

Total 1 6/7 44 81 9.1%

Delta Atlanta 8 5/7 50 435 48.9%

Total 8 5/7 50 435 48.9%

US Airways Charlotte 5 4/7 49 268 30.1%

Total 5 4/7 49 268 30.1%

Network Carrier Total 16 49 785 88.1%

Allegiant Orlando 3/7 150 58 6.5%

St. Petersburg 2/7 150 48 5.4%

Total 5/7 150 106 11.9%

Grand Total 16 5/7 53 891 100.0%

December 2011
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

10

Air Service Development Efforts

Tri-Cities Regional Airport officials have met on 13 occasions with 10 airlines in the first six months of 2011 to 

discuss air service development and present business cases for new service. These meetings have included two 

meetings with American Eagle to discuss both existing Tri-Cities-Chicago service and potential Tri-CitiesDallas/Ft. Worth service. Other meetings of note include four meetings with United Airlines to discuss 

Washington Dulles and Newark service, US Airways to discuss Washington Reagan service, and Vision Airlines 

and Spirit Airlines to discuss Florida Service. 

Over the past five years, Tri-Cities has been successful in attracting American Eagle to operate Tri-Cities-Chicago 

service and successful with Allegiant for service to Orlando/Sanford and St. Petersburg. 

Exhibit 4: Tri-Cities Regional Airport Air Service Development Meetings with Airlines – March 2011 through June 2011

Airline

Allegiant 

Conference

Network 

2011

JumpStart 

2011

AirTran X

Allegiant X

American Eagle X X

Delta X

Pinnacle X

Southwest X

Spirit X

United X X

US Airways X

Vision X X

Meeting Forum
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

11

Marketing and Promotion of Tri-Cities' Air Service

Tri-Cities Regional Airport actively markets air service within the Tri-Cities media market. The Airport's 

advertising and marketing stresses the convenience of flying from Tri-Cities and highlights attractions at 

destinations served from Tri-Cities. In 2011, the Airport has budgeted $275,000 to market air service. The 2011 

media plan calls for approximately $97,500 in television advertising, $29,000 in radio advertising, $30,000 in print 

advertising and $40,000 in on-line advertising, along with other creative and miscellaneous expenditures. Ongoing annual advertising and marketing can be supplemented with destination-specific advertising to market new 

routes just prior to the inauguration of new service, and the proposed Tri-Cities-Dallas/Ft. Worth service would be 

marketed separately from the Airport's planned marketing and advertising campaigns. 

Exhibit 5: Examples of Tri-Cities Regional Airport's Advertising 

 
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

12

AIR SERVCE DEVELOPMENT NEEDS AND DEFICIENCIES

Capacity Trends and Discontinued Air Service

Ex-Allegiant capacity at Tri-Cities reached a peak in 2005, and was down 35% to 712 seats per day each way in 

2010. Since 2005, Tri-Cities has lost network carrier service to Nashville, Cincinnati, Orlando, and Memphis –

service that accounted for more than one-third of Tri-Cities’ capacity in 2005. Without American's new Tri-CitiesChicago service in beginning in July 2010, Tri-Cities' ex-Allegiant capacity would be down much more since 2005.

Exhibit 6: Network Carrier Seats per Day Each Way at Tri-Cities Regional Airport by Carrier – 2001-2010 (DOT T-100 data) 

This Section Continued on Next Page

759 756

994

1,079 1,099

930

889

839

776

712

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Seats and Passenger per Day Each Way

Seats per Day Each Way (Ex-Allegiant)
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

13

While Tri-Cities' capacity appears only marginally down compared to recent years when Allegiant data is included, 

Allegiant serves only Sanford/Orlando and St. Petersburg/Tampa from Tri-Cities. Unlike the network carriers, 

Allegiant only carries point-to-point traffic to the two destinations it serves from Tri-Cities and does not provide 

connecting service to the larger worldwide route networks provided by the network carriers. Further, Allegiant's 

service is not operated on a daily basis.

Exhibit 7: Network Carrier and Allegiant Seats per Day Each Way at Tri-Cities Regional Airport by Carrier – 2001-2010 (DOT 

T-100 data)

This Section Continued on Next Page

756

994

1,079 1,099

930

889

839

776

712

34

104 131 109

759 756

994

1,079 1,099

930 923 943

907

822

1

201

401

601

801

1,001

1,201

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Seats per Day Each Way

Network Carriers Allegiant All Carriers
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

14

Traffic Trends

Tri-Cities' ex-Allegiant domestic traffic peak corresponds with the capacity peak in 2005. In 2005, Tri-Cities

generated 439,460 domestic ex-Allegiant origin and destination passengers. In 2010, the domestic ex-Allegiant 

traffic was down 34.7% versus 2005 to 286,940 origin and destination passengers. Tri-Cities' international traffic 

is up 1.8% since 2006, and Allegiant's traffic is up more than threefold since its first year of Tri-Cities service in 

2007. 

Exhibit 8: Annual Domestic and International Origin and Destination (O&D) Passengers at Tri-Cities Regional Airport

Year-End Fourth Quarter 2001-2010 (DB1B data)

This Section Continued on Next Page

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

381,460 371,660 359,330 376,640

439,460

373,040 350,840

299,190 307,870 286,940

20,250 

60,770 

79,570 

67,050 

25,200 25,330 

23,840 

31,320 

31,910 

31,240 33,260 

31,440 

28,470 

32,490 

Annual Domestic O&D (Ex-Allegiant) Annual Domestic O&D (Allegiant) Annual International O&D
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

15

When the annual origin and destination data is converted to passengers per day each way (PDEW), Tri-Cities

generated 393 domestic ex-Allegiant PDEW, 92 Allegiant PDEW and 45 international PDEW in 2010. 

Exhibit 9: Domestic and International Passengers per Day Each Way (PDEW) at Tri-Cities Regional Airport

Year-End Fourth Quarter 2001-2010 (DB1B data)

0

100

200

300

400

500

600

700

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

523 508 492 516

600

511 481

409 422 393

28

83

109

92

35 35 33

43

44

43 46

43

39

45

Domestic PDEW (Ex-Allegiant) Domestic PDEW (Allegiant) International PDEW
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

16

Leakage to Other Airports in the Region

The size of Tri-Cities’ population base and the economic activity in the region coupled with enplanement data

would suggest that Tri-Cities faces significant leakage to other airports in the region. Using each airport’s 

respective Combined Statistical Area as the basis for comparison, Tri-Cities captured only 0.7 passengers per 

resident in 2010. This is 46% fewer than Knoxville and 53% fewer than Asheville. Using Gross Domestic Product, 

a better indicator of travel demand, shows a similar pattern with Tri-Cities generating 34% less passengers per 

dollar of GDP than Knoxville and 49% less passengers per dollar of GDP than Asheville. Extrapolating this data 

would suggest that the Tri-Cities Combined Statistical Area generates more than 700,000 domestic origin and 

destination passengers per year. This is 350,000 more passengers than the airport currently captures, with 

regional airports being likely beneficiaries of Tri-Cities’ relatively low levels of service compared to Knoxville and 

relatively high fares compared to Asheville. 

Exhibit 10: Airline Passengers per Capita and per Million Dollars of Gross Domestic Product at Tri-Cities, Knoxville and 

Asheville 

Area Airport Population

Gross Domestic 

Product

Annual 

Domestic O&D

Passengers 

Per-Capita

Passengers Per 

$ Million GDP

Knoxville-Sevierville-La Follette, TN Combined Statistical Area TYS 1,057,838 $37.5 Billion 1,381,310 1.3 36.8

Tri-Cities, TN/VA Combined Statistical Area TRI 504,170 $14.5 Billion 353,990 0.70 24.4

Asheville-Brevard, NC Combined Statistical Area AVL 445,429 $13.9 Billion 659,910 1.5 47.5
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

17

Domestic Fare Trends

The average ex-Allegiant domestic fare at Tri-Cities was $224 each way in 2010. Tri-Cities' average domestic exAllegiant fare was at its lowest point in 2005 when the average fare was $173 and traffic peaked. Versus 2005, 

the fare is up $51 each way or 29.5%. The average fare has remained near or over $200 per direction since 2005.

Tri Cities’ ex-Allegiant domestic traffic was down 35% on 35% less capacity and 30% higher fares since its peak. 

While network carrier fare structures would likely not change significantly with the introduction of new network 

carrier service to a new destination, Tri-Cities travelers would benefit as more of the lowest fares within existing 

fare structures are made available with the additional capacity.

Exhibit 11: Ex-Allegiant Passengers per Day Each Way (PDEW), Seats per Day Each Way and Average Domestic One-Way 

Fare at Tri-Cities Regional Airport – Year-End Fourth Quarter 2001-2010 (DOT T-100 and DB1B data)

This Section Continued on Next Page

759 756

994

1,079 1,099

930

889

839

776

712

523 508 492 516

600

511

481

409 422

393

$191

$179

$187 $186

$173

$216

$222

$243

$193

$224

$100

$120

$140

$160

$180

$200

$220

$240

$260

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Average One-Way Fare

Seats and Passenger per Day Each Way

Seats per Day Each Way (Ex-Allegiant) Domestic PDEW (Ex-Allegiant) One-Way Domestic Fare (Ex-Allegiant)
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

18

Twentieth Highest Domestic Fare in the United States

The average domestic ex-Allegiant Tri-Cities domestic fare was $224 in 2010, and this fare ranked as the 

twentieth highest domestic fare among all lower 48 airports with at least 100,000 domestic origin and destination 

(O&D) ex-Allegiant passengers in 2010. The average domestic ex-Allegiant fare among all lower 48 airports in 

2010 was $158, so the average domestic Tri-Cities fare was 41.7% higher, or $66 higher each way ($132 

roundtrip), than the average lower 48 airport.

Exhibit 12: Average Domestic Ex-Allegiant One-Way Fares at Lower 48 Airports with at Least 100,000 Domestic O&D 

Passengers – Year-End Fourth Quarter 2010 (DB1B data)

Rank Market

Domestic O&D 

Passengers

Domstic 

PDEW

Average Domestic 

One-Way Fare

1 Minot 161,220 221 $294

2 Shreveport 376,170 515 $271

3 LaCrosse 182,910 251 $264

4 Bismarck 270,120 370 $255

5 Lawton 114,770 157 $252

6 Alexandria 242,570 332 $244

7 Great Falls 213,630 293 $241

8 Northwest Arkansas 857,290 1,174 $241

9 Kalamazoo 200,790 275 $240

10 Yuma 140,950 193 $237

11 Idaho Falls 222,310 305 $237

12 Casper 124,230 170 $235

13 Mobile 477,130 654 $235

14 Grand Forks 155,110 212 $231

15 Bakersfield 185,520 254 $231

16 Sioux Falls 466,270 639 $231

17 Columbia, SC 848,590 1,162 $227

18 Springfield, MO 466,080 638 $226

19 Monroe 174,040 238 $224

20 Tri-Cities, TN 286,940 393 $224

21 Bangor 284,130 389 $223

22 Killeen 390,120 534 $221

23 San Angelo 100,100 137 $220

24 Helena 177,140 243 $220

25 Kalispell 297,670 408 $220
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

19

International Traffic and Fare Trends

Even as domestic traffic has fallen on reduced capacity, Tri-Cities' international traffic has remained constant in 

recent years and has actually increased 10 PDEW to 45 PDEW in 2010, up 28% since 2001. The average 

international fare stood at $642 each way in 2010 – approaching the peak of $681 in 2008 and up 16.5% from 

2009. 

Exhibit 13: International Passengers per Day Each Way (PDEW), and Average One-Way International Fare at Tri-Cities 

Regional Airport – Year-End Fourth Quarter 2001-2010 (DOT T-100 and DB1B data)

35 35

33

43 44 43

46

43

39

45

$490

$455

$436

$455

$521

$564

$602

$681

$551

$642

$300

$350

$400

$450

$500

$550

$600

$650

$700

$750

0

5

10

15

20

25

30

35

40

45

50

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Average One-Way Fare International PDEW

International PDEW One-Way International Fare
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

20

STRATEGIC PLAN

Proposed New Route

Tri-Cities Regional Airport and its community partners in Tri-Cities are requesting Small Community Air Service 

Development funds to support a minimum revenue guarantee for regional jet service on American Eagle between 

Tri-Cities and Dallas/Ft. Worth. The proposed new service would benefit a mix of business and leisure travelers.

An American Eagle Embraer 140 Regional Jet after Arrival from Chicago at Tri-Cities Regional Airport

Goals

Tri-Cities has four goals with its Small Community Air Service Development Grant proposal for service to 

Dallas/Ft. Worth.

 Better access to Dallas/Ft. Worth and the connecting markets served via Dallas/Ft. Worth, particularly 

connecting markets in Texas such as Houston, Austin, San Antonio, McAllen and markets in Latin 

America.

 Lower fares in the local Tri-Cities-Dallas/Ft. Worth market and the largest connecting markets beyond 

Dallas/Ft. Worth.

 Recapture catchment area traffic leaked to other airports.
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

21

Target Airline Support

Tri-Cities Regional Airport has met with American Eagle on two separate occasions in 2011 and American Eagle 

has expressed interest in the proposed Tri-Cities-Dallas/Ft. Worth service. 

It should be noted American Eagle has used Small Community Air Service Development funds to begin service in 

two markets recently: Sioux Falls-Dallas/Ft. Worth and Springfield, IL-Dallas/Ft. Worth and began JoplinDallas/Ft. Worth and Grand Island-Dallas/Ft. Worth service under the Essential Air Service program. All four 

markets are examples of American Eagle willing to enter markets if risk is abated.

Tri-Cities-Dallas/Ft. Worth Traffic and Fare Trends

The Tri-Cities-Dallas/Ft Worth market size maintained its size of roughly 16 PDEW in 2010 and decreased only 

slightly (1.8%) as the fare rose 15.5% to $216 from 2009. Historically, as many as 20% more passengers have 

existed in the market at similar fares. It is only reasonable to expect that the actual market size is significantly 

larger as both neighboring airports have nonstop service and lower fares to Dallas/Ft. Worth. 

Exhibit 14: Tri-Cities-Dallas/Ft. Worth (DFW and DAL) Passengers per Day Each Way (PDEW) – Year-End Fourth Quarter

(DB1B data)

This Section Continued on Next Page

17.4

18.0

18.9 18.9

16.2

13.8 13.5

12.4

16.0 15.7

$205

$170

$197 $200 $203

$259

$223

$279

$187

$216

$100

$125

$150

$175

$200

$225

$250

$275

$300

0

5

10

15

20

25

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Average One-Way Fare

Passengers per Day Each Way (PDEW)

TRI-DFW/DAL PDEW TRI-DFW/DAL Fare
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

22

Analysis of quarterly data indicates Tri-Cities-Dallas/Ft. Worth traffic peaked in 2009 in third quarter, and moved 

only in seasonal cycles as the average fare rose more than $40 each way. The limited elasticity of the Tri-CitiesDallas/Ft. Worth market is a favorable point for discussions with American Eagle. 

Exhibit 15: Tri-Cities-Dallas/Ft. Worth (DFW and DAL) PDEW and Average Fare – Fourth Quarter 2008 through Fourth

Quarter 2010 (DB1B data)

This Section Continued on Next Page

13.7 11.0

15.3

10.9

12.4

13.1

14.5

18.4 18.0

13.4

14.2

18.2

17.1

$209

$252

$307 $307

$243 $241

$175

$162

$183 $200

$239

$220 $203

$100

$125

$150

$175

$200

$225

$250

$275

$300

$325

0

5

10

15

20

25

30

Average One-Way Fare

Passengers per Day Each Way (PDEW)

TRI-DFW/DAL PDEW TRI-DFW/DAL Fare
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

23

Connecting Traffic and Revenue on American via Dallas/Ft. Worth

Tri-Cities-Dallas/Ft. Worth service could connect with 88 markets American and American Eagle serve from their 

hub in Dallas/Ft. Worth that generated Tri-Cities traffic in 2010. Tri-Cities has no nonstop network carrier service

that provides access to the deep southwest, and the proposed service would enable new single connections in 

many markets that cannot be reached from Tri-Cities with a single connection. Of the 88 airports displayed on the 

map below, 30 of the airports now require a double connection to or from Tri-Cities because they are not served 

nonstop from Atlanta, Charlotte, Detroit, or Chicago. 

Exhibit 16: Non-Circuitous Markets American Could Serve with Tri-Cities-Dallas/Ft. Worth Service

This Section Continued on Next Page
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

24

The 30 largest Tri-Cities markets American could flow via its hub in Dallas/Ft. Worth generated 142 PDEW in 

2010; all markets that could flow via Dallas/Ft. Worth generated 153 PDEW. These 153 PDEW account for more 

than one-third – 38.6% – of the total 393 domestic ex-Allegiant PDEW Tri-Cities generated in 2010 

The local Dallas/Ft. Worth market was the largest market that could be logically served with new nonstop service, 

with the LA Basin and Las Vegas being the two largest connecting markets as measured by origin and destination 

traffic. Two other markets in Texas, Houston and San Antonio, are included in the ten largest markets, and Austin 

ranks as the eleventh (11th) largest market. 

Exhibit 17: Origin and Destination Passengers and PDEW in the 30 Largest Markets American Could Flow via Dallas/Ft. 

Worth – Year-End Fourth Quarter 2010 (DB1B data)

This Section Continued on Next Page

0 2,000 4,000 6,000 8,000 10,000 12,000

DFW/DAL - 1

LAX/SNA/ONT/BUR/LGB - 2

LAS - 3

IAH/HOU - 4

DEN - 5

SFO/OAK/SJC - 6

SEA - 7

PHX/AZA - 8

SAN - 9

SAT - 1 0

AUS - 1 1

SLC - 1 2

PDX - 1 3

SMF - 1 4

HNL - 1 5

OKC - 1 6

ABQ - 1 7

LHR/LGW - 1 8

SHV - 1 9

TUL - 2 0

TUS - 2 1

ANC - 2 2

FRA - 2 3

CDG/ORY - 2 4

ICT - 2 5

COS - 2 6

ELP - 2 7

OGG - 2 8

RNO - 2 9

MEX - 3 0

11,490

11,040

10,480

9,170

8,390

6,660

5,630

5,390

4,060

3,850

2,970

2,830

2,770

1,960

1,770

1,700

1,470

1,370

1,360

1,270

1,150

1,000

960

900

820

800

780

700

600

580

15.7

15.1

14.4

12.6

11.5

9.1

7.7

7.4

5.6

5.3

4.1

3.9

3.8

2.7

2.4

2.3

2.0

1.9

1.9

1.7

1.6

1.4

1.3

1.2

1.1

1.1

1.1

1.0

0.8

0.8

Annual O&D PDEW
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

25

The average one-way fare in the 30 largest Tri-Cities markets American could flow via Dallas/Ft. Worth was $245

in 2010; all markets that could flow via Dallas/Ft. Worth generated an average fare of $257. 17 of the 30 largest 

markets generated an average fare higher than $245; smaller markets tended to generate higher fares than the 

larger markets toward the top of the list. 

Exhibit 18: Average One-Way Fare in the 30 Largest Markets American Could Flow via Dallas/Ft. Worth (Excludes Allegiant 

Data) – Year-End Fourth Quarter 2010 (DB1B data)

$0 $100 $200 $300 $400

DFW/DAL - 1

LAX/SNA/ONT/BUR/LGB - 2

LAS - 3

IAH/HOU - 4

DEN - 5

SFO/OAK/SJC - 6

SEA - 7

PHX/AZA - 8

SAN - 9

SAT - 1 0

AUS - 1 1

SLC - 1 2

PDX - 1 3

SMF - 1 4

HNL - 1 5

OKC - 1 6

ABQ - 1 7

LHR/LGW - 1 8

SHV - 1 9

TUL - 2 0

TUS - 2 1

ANC - 2 2

FRA - 2 3

CDG/ORY - 2 4

ICT - 2 5

COS - 2 6

ELP - 2 7

OGG - 2 8

RNO - 2 9

MEX - 3 0

$216

$249

$206

$224

$209

$246

$239

$204

$225

$199

$205

$270

$218

$235

$349

$258

$249

$605

$247

$289

$248

$307

$617

$708

$238

$224

$289

$340

$278

$413
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

26

American Eagle's Success in the Asheville-Dallas/Ft. Worth Market

In April 2010, American Eagle began service in the Asheville-Dallas/Ft. Worth market with one daily round trip on 

a seasonal basis. American Eagle's performance in the Asheville-Dallas/Ft. Worth market could likely serve as a 

proxy for how Tri-Cities-Dallas/Ft. Worth service could perform.

As illustrated in Exhibit 19, American Eagle generated a load factor of 71.8% in the first month it operated the 

service, and the load factor grew to 83.6% in July 2010. Apparently satisfied with the initial performance of the 

market, American returned to operate Asheville-Dallas/Ft. Worth in 2011. During the route’s first season, between 

April and October 2010, American Eagle's Asheville-Dallas/Ft. Worth load factor was 79.5%.

Exhibit 19: American Eagle Asheville-Dallas/Ft. Worth Flights per Day Each Way, Load Factor by Month and Average April 

2010-October 2010 Load Factor (DOT T-100 Data)

This Section Continued on Next Page

0.8

1.0 1.0 1.0 1.0

1.0

1.0

71.8%

76.8%

82.0%

83.6%

80.5%

78.1%

81.8%

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

0.0

0.2

0.4

0.6

0.8

1.0

1.2 Load Factor Flights per Day Each Way 

AVL-DFW Flights per Day Each Way AVL-DFW Load Factor Average April 2010-2011 Load Factor
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

27

American Eagle's Asheville-Dallas/Ft. Worth service, which began in second quarter 2010, has resulted in terrific 

service-based stimulation of demand between Asheville and Dallas/Ft. Worth. The market produced an average 

of 11.2 PDEW between second and fourth quarter 2009. Over the same period in 2010, the market produced an 

average of 20.2 PDEW, a 80.4% increase over 2009. 

Exhibit 20: Asheville-Dallas/Ft. Worth Passengers per Day Each Way (PDEW) and Average One Way Fare – First Quarter 

2008 through Fourth Quarter 2010 (DB1B Data)

This Section Continued on Next Page

9.4

12.4 12.6

9.8

9.0

10.6

13.0

10.1

8.9

20.8

19.7

20.3

$219

$238

$267

$196

$212

$175

$196 $198 $191 $195

$203

$173

$0

$50

$100

$150

$200

$250

$300

0

5

10

15

20

25

Average One-Way Fare

Passengers per Day Each Way (PDEW)

AVL-DFW PDEW AVL-DFW Average One-Way Fare
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

28

If the Tri-Cities Dallas-Ft. Worth market size were to increase as the Asheville-Dallas/Ft. Worth quarterly market 

size increased year-over-year with the introduction of nonstop service, Tri-Cities-Dallas/Ft. Worth would increase

to 27.9 PDEW in second quarter 2010, 27.5 PDEW in third quarter 2010 and 34.3 PDEW in fourth quarter 2010. 

The actual Tri-Cities-Dallas/Ft. Worth average market size was 16.5 PDEW from second quarter 2010 to fourth 

quarter 2010 and would have been 29.9 PDEW with the year-over-year Asheville-Dallas/Ft. Worth market size 

growth. Historically, the Tri-Cities-Dallas/Ft. Worth market size has been larger than the Asheville-Dallas/Ft. 

Worth market size and could easily grow at least as much as the Asheville market size grew with the introduction 

of nonstop service.

Exhibit 21: Actual Asheville-Dallas/Ft. Worth PDEW, Actual Tri-Cities-Dallas/Ft. Worth PDEW and Tri-CitiesDallas/Ft. Worth Market Size at Asheville-Dallas/Ft. Worth Growth – First Quarter 2008 through Fourth Quarter 

2010 (DB1B Data)

9.4

12.4 12.6

9.8

9.0

10.6

13.0

10.1

8.9

20.8

19.7

20.3

11.0

15.3

10.9

12.4

13.1

14.5

18.4 18.0

13.4

14.2

18.2 17.1

27.9 27.5

34.3

5

10

15

20

25

30

35

40

45

50

Passengers per Day Each Way (PDEW)

Actual AVL-DFW PDEW Actual TRI-DFW PDEW TRI-DFW PDEW at AVL-DFW Growth Rate
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

29

Grant Amendments/Alternate Strategies

Nonstop Tri-Cities-Dallas/Ft. Worth service is the goal of the community's Small Community Air Service 

Development (SCASD) proposal. The community is proposing SCASD funding in the amount of $250,000 that 

will be supplemented with $50,000 in cash from community-based business and economic development 

organizations to offer a minimum revenue guarantee to American Eagle for Dallas/Ft. Worth service. An 

additional $132,000 of in-kind marketing, advertising, promotion and landing fee waivers would supplement the 

cash incentives offered by the community for the service. Analysis of traffic and revenue data indicates the 

proposed service should be an appealing opportunity for American Eagle.

If a grant is awarded for Tri-Cities-Dallas/Ft. Worth service, and the community is not successful in its effort to 

recruit American Eagle to Dallas/Ft. Worth, Tri-Cities Regional Airport would ask to Department to consider 

reallocation of the award funds for service to an alternate hub on a network carrier. Potential routes would include 

Washington on Delta, US Airways, or United; Houston on United; New York on American, Delta, US Airways, or 

United; Miami on American.

 
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

30

PROJECT IMPLEMENTATION, MONITORING AND FUNDING

Public / Private Partnerships

While the Tri-Cities Airport Commission is the project sponsor and is a partner in the project, the other project

partner is the Regional Alliance for Economic Development.

Project Funding

Tri-Cities Regional Airport is requesting a Small Community Air Service Development grant of $250,000 for its 

proposed minimum revenue guarantee for service between Tri-Cities and Dallas/Ft. Worth on American Eagle. 

The Regional Alliance for Economic Development has pledged $50,000 in cash to supplement the requested

award. The total cash pledged by the community-based organization to 20% of the requested grant amount. In 

addition, the Airport will provide up to $132,000 of in-kind support in the form of marketing, advertising, promotion

landing fee waivers over two years for the proposed Dallas/Ft. Worth service.

Exhibit 21: Sources and Types of Proposed Project Funding

.

Funding Source Grant Cash In-Kind Total

Department of Transportation $250,000 $250,000

Community $50,000 $50,000

Airport $132,000 $132,000

Total $250,000 $50,000 $132,000 $432,000
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

31

Implementation Timeline

Tri-Cities Regional Airport will begin discussions with American Eagle immediately after learning the Department 

awards a Small Community Air Service Development grant for the proposed Tri-Cities-Dallas/Ft. Worth service. 

The timing of the announcement, expected in September, will provide sufficient time to meet with American Eagle 

to continue previous discussions and provide time for American Eagle to perform further analysis of the market. 

Assuming discussions are successful in September and October and American Eagle decides to enter the TriCities-Dallas/Ft. Worth market, the next major schedule change date which would provide sufficient time for 

advance bookings is the April 2012 schedule change. American Eagle's annual April schedule change typically 

occurs within the first seven days of the month. Once the service begins, Tri-Cities Regional Airport will remain in 

close communication with American Eagle to monitor the performance of the route.

Exhibit 22: Proposed Project Timeline

Activity/Project Milestone Estimated Dates

SCASD Grant Award Announcement September 2011

Execute Grant Agreement with DOT September-October 2011

Negotiate Minimum Revenue Guarantee with Airline October-November 2011

Announce Service January 2012

Publish Schedule January 2012

Market Route (Pre-Launch) January-March 2012

Monitor Advance Bookings January-March 2012

Adjust Marketing Plan Based on Advance Bookings January-March 2012

Begin Service Early April 2012

Market Route (Post-Launch) April 2012 and Beyond

Operate Service with MRG April 2012 - March 2014

Monitor Route Performance April 2012 - March 2014 and Beyond

Submit Grant Status Reports to DOT Quarterly 2Q 2012 - 1Q 2014
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

32

PROJECT MONITORING AND FINANCIAL CONTROL

Success Metrics

Four goals have been established to measure the success of the proposed project. The goals of the project are 

aimed at increasing traffic and lower fares. These goals are objective and can be measured by comparing yearover-year market size changes and changes in fares on a quarterly basis as DOT traffic and revenue data is 

published. Another measure of success will be American Eagle's load factor performance on the flights operated 

in the proposed market. High load factors (defined as load factors in the upper 70s or greater) will constitute 

traffic metric success. The amount of subsidy required by American Eagle will also provide an indication of the 

route's success.

Project Goals Success Metric

 Nonstop access to Dallas/Ft. Worth and less 

circuitous connections to markets served by 

American and American Eagle via Dallas/Ft 

Worth.

 Inauguration of nonstop Tri-Cities-Dallas/Ft. Worth 

service.

 Stimulation of the Tri-Cities-Dallas/Ft. Worth 

market size and the markets served by American 

and American Eagle via Dallas/Ft. Worth.

 Tri-Cities-Dallas/Ft. Worth market size growth and 

market size growth in the markets that could 

connect to markets beyond Dallas/Ft. Worth.

 Lower fares in the Dallas/Ft. Worth market and the 

markets connecting beyond Dallas/Ft. Worth.

 Quarterly year-over-year declines in fares for the 

local Tri-Cities-Dallas/Ft. Worth market and the 

largest markets beyond Dallas/Ft. Worth.

 Recapture catchment area traffic leaked to other 

airports in the region.

 Increased retention (and less leakage) of the 

traffic generated in Tri-Cities' immediate 

catchment area.
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

33

Legal Sponsor

The Tri-Cities Airport Commission is the legal sponsor responsible for administering the program, and Tri-Cities 

Airport Commission is a government entity.

Tri-Cities Regional Airport Commission

P.O. Box 1055

Blountville, TN 37617-1055

Patrick W. Wilson

Executive Director

423-325-6001 (office)

423-325-6060 (fax)

Financial Controls

As the sponsor, the Tri-Cities Airport Commission will be the responsible parties for all fiscal matters and the 

Department's reporting requirements. The Tri-Cities Airport Commission is established as a public governing 

body. As a public entity, the Department can be assured that proper financial controls are in place to guarantee 

that the Department’s Grant will be used in accordance with any subsequent agreement. The Tri-Cities Airport 

Commission understands that the Grant is a reimbursable grant, meaning the Commission is responsible for 

program expenditures and will submit invoices to the Department for reimbursement, based on a percentage of 

the total grant request.
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

34

APPENDIX A: REQUIRED SUMMARY INFORMATION

A. Applicant Information

 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: 7/26/2002

Expiration Date of Grant: 7/26/2005

B. Public/Private Partnerships

Public

 Tri-Cities Regional Airport

Private

 Regional Alliance for Economic Development

C. Project Proposal 

 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)

Tri-Cities Regional Airport is requesting a Small Community Air Service Development grant to provide a

minimum revenue guarantee for regional jet service between Tri-Cities and Dallas/Ft. Worth on American 

Eagle.
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

35

D. Existing Landing Aids at Local Airport

 Full ILS Outer/Middle Marker Published Instrument 

Approach

 Localizer Other (specify)

E. Project Cost

F. 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) for each.

(5a) Tri-Cities Regional Airport will provide advertising, marketing, promotion and landing fee waivers valued 

at up to $132,000 over two years for the proposed Tri-Cities-Dallas/Ft. Worth service.

G. 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

Line Description Sub Total Total Amount

1 Federal amount requested $250,000

2 State cash financial contribution

Local cash financial contribution

3a Airport cash funds

3b Non-airport cash funds $50,000

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

4 TOTAL CASH FUNDING (1 + 2 + 3): $300,000

In-Kind contribution

5a Airport in-kind contribution** $132,000

5b Other in-kind contribution**

5 TOTAL IN-KIND CONTRIBUTION (5a + 5b): $132,000

6 TOTAL PROJECT COST (4 + 5): $432,000
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

36

H. Is this applicant delinquent on any federal debt?

 No Yes (explain)
 

 

Tri-Cities Regional Airport; Blountville, Tennessee

Proposal Under the Small Community Air Service Development Program; Docket DOT-OST-2011-0119

37

APPENDIX B: LETTER OF SUPPORT