# June 11, 2012

Sponsor: Metropolitan Topeka Airport Authority, Topeka, Kansas

Eric Johnson, President/Director of Airports Congressional Code: KS

- 02
Dun & Bradstreet Number: 150947141 Tax Identification Number (EIN): 48

- 0878790 

# FORBES FIELD AIRPORT , TOPEKA, KANSAS
Application Under the Small Community Air Service Development Program Docket DOT

- OST

- 2012

- 0069
Application for Federal Support for New Air Service via Revenue Guarantees
, Advertising and Marketing , and Start

- Up Cost Offsets
Targeted towards Introduction of Local Air ServiceMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 2

TABLE OF CONTENTS

Introductory Letter of Support 3 Summary Information

– Appendix C 5
Introduction 8
The Topeka Air Service Market 9
Current and Historical Service 9
Potential for New Service 13
Air Se rvice Development Efforts 15
Air Service Needs and Deficiencies 17 Regional Capacity Trends 17 Increased Cost of Driving 18 Strategic Plan for New Air Service 20 Targeted Route: Topeka

– Chicago O’Hare 21 Potential Passenger Traffic 22 Implementation Timeline 26 Public/ Private Partnership 28 Legal Sponsor 30
Conclusion 31



## INTRODUCTORY LETTERS OF SUPPORT Section Page NumberMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 3

INTRODUCTORY LETTER OF SUPPORTMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 4Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 5

SUMMARY INFORMATION

– APPENDIX C

Small Community Air Service Development Program
Docket DOT

- OST

- 2012

- 0069



### A. Applicant Information

Not a Consortium Community now receives EAS subsidy
Interstate Consortium Intrastate Consortium Community previously received a Small Community Grant If previous recipient, Date of Grant: ________________________________ Expiration date of G rant: _______________________ Federal Funds Requested: ______________________ Carrier(s) Service Obtained: ____________________ Destination(s) Served: __________________________



### B. Public/Private Partnership

Public:

1. State of Kansas 2. Metropolitan Topeka Airport Authority 3. City of Topeka 4. Shawnee County Commission

Private:

1. Greater Topeka Area Chamber of Commerce 2. Coalition of Topeka Area BusinessesMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 6

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 Additiona l Service Other (Specify)



### D. Existing Landing Aids at Airport

Full ILS Outer/Middle Marker Published Instrument Approach
Localizer Other:



### E. Project Cost

1. Federal amount requested: $ 1,00 0,000
2. State cash financial contribution: $ 1, 0 00,000
Local cash financial contribution:
3a. Airport cash funds: $ 0
3b. Non

- Airport cash funds: $ 0
3. Total local cash funds: $ 2 ,0 00 ,000
4. TOTAL CASH FUNDING: $ 2,0 00 ,000
In

- Kind Contribution:

a. Airport In

- Kind contribution: $ Various
b. Other In

- Kind contribution: $ Various
5. TOTAL IN

- KIND CONTRIBUTION: $ Undetermined
6. TOTAL PROJECT COST: $ 2,0 00 ,000 + In

- Kind



### F. 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. Fee waivers: landing and terminal fees (airport) Advertising and marketing match money (media companies)Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 7

G. Is Application Subject to Review by State Under Executive Order 12372 Process?

This application was made available to the s tate under the Executive Order 12372 Process
for review on ______. Progr am is subject to E.O 12372, but has not been selected by the state for review

. Program is not covered by E.O 12372

.



### H. Is Applicant Delinquent on any Federal Debt?

NoMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 8

INTRODUCTION

Topeka is one of the few state capitals in the country without local air service. The State of Kansas is beginning to realize the economic hardship the lack of air service causes the capital. As such, the State is beginning a partnership with the Metropolitan Topeka Airport Authority to bring scheduled airline service to Forbes Field. The partnership is modeled after the successful effort to bring American Eagle service to Manhattan, Kansas. As part of this project, t he State will provide $1 million in revenue guarantee funding, in conjunction with Small Community Air Service Developm ent Program dollars and local funding.

T he Airport Authority met with SkyWest in April of this year, and identified United Express service to Chicago O’Hare as the target of the effort. The Topeka catchment area generates almost 50 local passengers per day each way to and from Chicago right now, with fares that have increased by a lmost 40% over the last four years. Moreover, Kansas City

– Chicago O’Hare available airline seats have been cut by an average of 627 seats per day each way since the fall of 2009, making it more difficult for those living in
east central Kansas to access Chicago as a destination, and as a gateway to connecting cities.

Another factor working in favor of the success of air service is the new development happening in the South Topeka Economic Growth Corridor

– adjacent to Forbes Field. In the last three ye ars, major companies such as Frito

- Lay, Home Depot, Mars Chocolate, Target, and Bimbo/Allen Foods have built logistics centers and manufacturing plants in the Corridor. These companies have added almost 1,500 new jobs to the region, with an average wage o f $52,000 per year.

For the Corridor’s growth to continue, companies have made it clear there must be scheduled air service at Forbes Field Airport. The Airport Authority has worked tirelessly in the last 12 months to secure State funding for a revenue g uarantee . The Governor signed the bill allocating $1 million in State funding for this project on June 1 of this year. The Airport has also worked hard, spending considerable time and expense, to find an airline partner. Now it is requesting its first
S mall Community Air Service Development Grant in support of bringing scheduled service back to Kansas’ capital. 

## “ As part of this project, the State 

## will provide $1 million in revenue guarantee funding...”Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 9

THE TOPEKA AIR SERVICE MARKET Historical and Future Air Service

Topeka has supported air service in the past, and there are clear indications it can support future air service. Topeka’s most recent service, on Allegiant, averaged a 79% load factor for its duration. Tope ka generates almost 600,000 current annual passengers

– the vast majority of whom travel in and out of Kansas City International. The Topeka catchment area is vibrant and growing.

The 2010 US Census
showed that the 45

- minute drive around Topeka’s Forbes Field Airport, seen in the map in blue, now has a total of 275,477 residents

– up from roughly 250,000 residents in the year 2000 (see map 1). The
more immediate Forbes Field Airport catchment area, within the 30

- minute drive radius seen in gray, is home to 176,147 people as of
2010.

The Topeka catchment area is distinct from Kansas City. The larger population centers within the
catchment tend to be on the west side of the catchment

– away from Kansas City. Forbes Field
is located well within the catch ment to pull from the major population centers, unlike Kansas City International, which is located on the north side of the Kansas City metro area.

Topeka lost its last commercial hub service in 2003, when the Department of Transportation
ended its status as an Essential Air Service (EAS) market. The judgment was made due to the fact that the average subsidy, per passenger, had topped the $200 cap. Otherwise, Topeka 

### MAP 1 : Forbes Field Airport Catchment Area, 30

- Minute and 45

- Minute Drive 

### Source: Sixel Consulting Group; 2010 US CensusMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 10

would still qualify as an EAS service point today, as it had commercial service at the en d of deregulation and it lies more than 70 miles from the nearest medium hub airport, in Kansas City.

The reason Topeka’s previous hub service didn’t perform well is that it connected, only, to Kansas City, itself. The service was designed to use Kansas City as a hub

– which didn’t work for several reasons. One, there was no value to a connection at a hub that was only 90 minutes’ drive away. Two, there was no potential for local traffic to offset the cost of the service. And three, Kansas City didn’t operate as a hub for any carrier

– there were few flights to connect to.

The loss of Essential Air Service was viewed as a sign that the market could not support service

– which is not the case. The market will support service, as long as that service connects to a true hub, and as long as there is some value to the local segment. With shifts in regional air service strategy, Topeka is better suited now than it has been before for a regional jet service, supporting premium fares, to a major airline hub

.



### FIGURE 1 : O&D Passengers from the Topeka Catchment Area Sources: US DOT Table OD1A, Sixel Consulting Group Analysis ; CY2003

– CY2011Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 11

In calendar year 2011, the Topeka catchment area generated an estimated 821 passengers per day each way, or a total o f almost 600,000 passengers (see figure 1 on previous page ). However, Topeka catchment area passengers have declined by an average of 114 passengers per day each way since 200 7 , or 12%, mainly because of rising fares.

In the last three years, the average fare paid by passengers from the Topeka catchment area has gone up by 23% or an average of $34 one way (see figure 1 on previous page ). The fare has hit a decade high, at an average of $182 each way, despite the fact that there is low fare
service at both Kansas City and Wichita. The impact of rising fares in the region has been the suppression of travel from the Topeka market.

The top passenger markets for
travelers who live within the immediate Topeka catchment area are spread throughout the country, indicating the region
would be best served with
service that can connect omni

directio nally. A total of 12 of Topeka’s top 20 origin and destination passengers markets are to the east of the region, while eight are to the west. Topeka’s largest O&D market is Chicago, which generates an average of almost 49 passengers per day each way

as o f calendar year 2011 (see figure 2). Other large O&D
markets to the east include New York/Newark, which generates an average of 33 passengers per day each way; Orlando, which generates an average of 26 passengers per day each way; and Washington, DC, whic h also generates an average of 26 passengers per day each way. 

### FIGURE 2 : Topeka’s Estimated Top 20 O&D Passenger Markets, Sources: US DOT Table OD1A, Sixel Consulting Group Analysis; CY2011Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 12

As previously noted in this application , the average fa re in the Topeka region is up 23 % in the last three years

. The 201 1 average one way fare was $182 each way

– up from $14 8 each way in 2009 (refer to previous figure 1 ). One of t he reason s for the regional fare increase is the loss of airline capacity in the region surrounding the Topeka catchment area

– with total available
seats down 2 5 % since the
summer of 2008.

Average fares to markets east of Topeka are generally higher than average f ares to markets
to the west. There are exceptions, but examples abound. Chicago’s average one way fare for Topeka catchment area passengers is estimated at $134 as of calendar year 2011, while the average one way fare to Denver was $109 (see figure 3). The average one way fare to New York/Newark is estimated at $182, while the average fare to Las Vegas is $143 each way. The average one way fare to Washington, DC is estimated at $160, while the average fare to Los Angeles is $154 each way. The impact of these rising fares

, and the corollary loss of airline capacity in the region surrounding Topeka, is that access to air service is more difficult than it has been at any
time since the end of 2001.

The Forbes Field Airport lost its last scheduled air se rvice in July of 2007. Allegiant Air provided

non

- stop flights, twice per week, between Topeka and Las Vegas from March of 2006 through the summer of 2007. The service performed well, from an analysis of all data points, but it was ended as Allegiant was beginning to see margins in the 20% to 25% range

– slightly higher than the projected margin it was likely earning in Topeka. 

### FIGURE 3 : A verage One Way Fare at Top 20 O&D Passenger Markets, Sources: US DOT Table OD1A, Sixel Consulting Group Analysis ; CY 2011Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 13

For the full 17

- month operation of Topeka

– Las Vegas service, Allegiant averaged a load factor of 79% (see figure 4 ). The carrier averaged 44 available seats per day each way (SDEW), and boarded an average of 36 passengers per day each way (PDEW)

– despite the fact that the service operated just twice per week.

Topeka

– Las Vegas service performed best just before it was pulled. In the last two months of Allegiant service, the route averages 40.3 passengers per day each way

– the highest two

month average for the entire duration the route was served (see figure 4 ). In the last two months of service in Topeka, Allegiant averaged a load factor just above 91%.

The past performance of Allegiant service in the marke t indicates that Topeka travelers will choose their local airport, and fill local airline seats, when service is available. Since the service ended there have been a number of other changes in the market that make it more attractive
for airlines. 

### FIGURE 4 : Departing Seats per Day, Departing Passengers per Day, and Load Factor Topeka

– Las Vegas Service, March 2006

– July 2007; Source: US DOT T100 DataMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 14

In the last several years, more than 4,000 new jobs have been created on land directly adjacent to the Forbes Field Airport. The area is now known as the South Topeka Econom ic Growth Corridor (see map 2). The corridor
has seen new investment from a number of major national and international corporations. Allen Foods/Bimbo has developed a bakery and shipping center on the
site. Frito

- Lay opened a major expansion to its chip bakery and shipping center. Home Depot opened its rapid deployment center that sends last minute good s to stores all over the country. Mars Chocolate spent more than $250 million on a new plant to produce its Snickers bars
and its M& M chocolates

– hiring 200 new employees. And Target chose
the Corridor for its Midwest
distribution center. All of these companies are Airport partners in developing new schedule service adjacent to their facilities. 

### MAP 2 : South Topeka Economic Growth Corridor Source: GO! Topeka Economic PartnershipMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 15

AIR SERVICE DEVELOPMENT EFFORTS

In the last 12 months, the Metropolitan Topeka Airport Authority has focused its air service development effort on building a coalition for financial risk

- sharing in conjunction with new scheduled service. The most significant support for the coa lition will come from the State of Kansas. The Airport is work ing diligently with the State, conducting a series of meetings with key decision makers, to replicate the success of a revenue guarantee program used in Manhattan, Kansas to bring American Eagle to the market. The result of this hard work was the Governor’s approval, on June 1, 2012, of $1 million in State funding as 50% of the funding for this project.

The Manhattan revenue guarantee program has resulted in successful service, with the vast

ma jority of the State’s money being returned, unused, as the service was profitable for American Eagle on its own. The Metropolitan Topeka Airport Authority will be able to use the returned funds to duplicate the program.

An analysis of the performance of American Eagle in Manhattan shows an increasing number of available seats over the last two years, with in creasing passengers and strong load factors (see figure 5). American Eagle now offers service to both Dallas/Ft. Worth and Chicago O’Hare from
Manhattan.



### FIGURE 5 : Departing Seats and Passengers per Day, and Load Factor; Manhattan, Kansas (MHK) Source: US DOT T100 Data; January 2010

– February 2012Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 16

In February of 2012, the airline offered an average of 249 departing seats per day in Manhattan,

an d averaged 176 onboard passengers per day each way (see figure 5). The Manhattan market averaged a 77% load factor for the 12 months ended February of 2012.

The Metropolitan Topeka Airport Authority does not want to duplicate the exact service at
Manhatt an

– even though the two airports don’t generally compete for passengers. The Authority met, in person, with SkyWest in April of 2012 to discuss regional jet service under the United Express brand to Chicago O’Hare. SkyWest has expressed interest in the plan, if the Authority can more fully develop its revenue guarantee plan.Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 17

AIR SERVICE NEEDS AND DEFICIENCIES IN TOPEKA

Being one of the few State capitals without scheduled airline service, Topeka’s needs and
deficiencies are clear

– economic connections in the capital of Kansas suffer from a lack of access to other markets, and the region needs to do whatever it can to bring air service to Forbes Field Airport. But the challenges go beyond a simple lack of service. The fact is the airports Topeka residents and businesses rely on for service have seen capacity cuts, fare increases, and more difficult flight availability.

Since the summer of 2008, Kansas City International Ai rport has seen it s most significant seat cuts
in more than a decade . Kansas City has lost an average of 7 1. 2 daily departures

– a loss of 31 %
of tha t Airport’s daily flights , since the s ummer of 2008 (see figure 6 ). During that same time period, Kansas C ity has lost an average of 5,600 daily available departing seats, or 25% of the market’s available airline capacity.



### FIGURE 6 : Available Seats, Flights, and Passengers per Day at MCI Source: US DOT T100 Data ; June 2008

– January 2012Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 18

The Kansas City cuts are bigger when they are put into a regional ai r service perspective. The 5,600 daily departing seats lost represent a total of 112 daily 50

- seat regional jet flights. Even if SkyWest adds two 50

- seat regional jet flights at Topeka, the added capacity would only replace 1.8% of the capacity lost at K ansas City.

It also costs Topeka catchment area residents more to access air service in Kansas City than it did several years ago. Topeka’s city center is 76 miles, by the most commonly driven route, from the first terminal at Kansas City International.
Based on IRS reimbursement rates for employees driving their own vehicles on business, the cost of that roundtrip drive in 2006 was $68.40, or 45

- cents per mile (see figure 7). In 2012, the IRS reimbursement rate
is 55.5

- cents per mile. The cost of the roundtrip drive between Topeka and Kansas City’s airport has gone up to $84.36

– an increase of 23%.

Very few people in the Topeka catchment area choose to fly from Wichita’s airport because it’s 70 miles farther away than Kansas City. But those who do have found their cost of driving increase by that same 23%. In 2006, the average roundtrip drive cost between Topeka’s city center and Wichita’s airport was $131.40 (see figure 8). By 2012 that roundtrip cost had jumped to $162.06 which is an increase of $30.66 roundtrip.

The increasing cost of ac cessing the national air transportation system makes it more difficult for businesses in Topeka to compete with businesses in other parts of the country

– in regional cities that have regional air service. The increased cost of driving to access air servi ce also makes Topeka unattractive for new investment.

Meanwhile, potential airlines that could serve Forbes Field Airport have told the Authority they are worried about breaking passenger habits in the catchment area, and convincing those 

### FIGURE 7 : Cost of Drive, Topeka

– Kansas City Airport 

### Sources: IRS Statistics, Sixel Consulting Group

FIGURE 8 : Cost of Drive, Topeka

– Wichita Airport Sources: IRS Statistics, Sixel Consulting GroupMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 19

passengers to use their local airport instead of driving to Kansas City to access service. The cost
of the drive makes this a little bit easier. Still, t his Grant application is a key to funding an adequate marketing program to accomplish the goal of retaining passeng ers, and to convincing airlines the proper amount of funding is available to achieve this goal.

The Airport has worked for the last several years to develop significant matching funding for this application. Finally, less than two weeks before this appli cation was submitted, the Governor signed an agreement for the State of Kansas to provide matching funds of $1 million for a revenue guarantee under this program. Now is the time for the Department of Transportation to quickly act to make new service a re ality in 2013.Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 20

STRATEGIC PLAN FOR NEW AIR SERVICE

Working together with the State of Kansas, local partners, SkyWest Airlines, and the Department of Transportation, the Metropolitan Topeka Airport Authority has developed a plan to bring United Express Chicago O’Hare service to Forbes Field Airport. The p lan includes funding from the State of Kansas and the Department of Transportation for a revenue guarantee, a marketing and advertising program, start

- up cost offsets, and fee waivers during the launch phase.

Through a detailed statistical market analysis of passengers and fares, the Airport believes the service can be supported by its immediate, 30

- minute drive time catchment area. The Forbes
Field Ai rport 30

- minute
catchment area represents 6.59% of the total population of the
90

- minute Kansas City
catchment area (see map 3 )

. The immediate Topeka catchment area
, represented in map 2 in purple, includes 176,147 people

.

Only those living in the immediate, 30

- minute Topeka catch ment area
are considered in the origin and destination
passenger analysis included in this proposal

, as Forbes Field would be significantly more convenient for them than Kansas City International Airport (MCI)

. For the pur poses of these projections, it is assumed service at Topeka would draw
passengers only from its 6.59% share of the Kansas City catchment area (see map 3 )

.

The United Airlines Chicago O’Hare hub would provide Topeka area travelers the most wide

ranging collection of one

- stop des tinations of any hub to the east of the market. The 

### MAP 3 : Forbes Field Airport Immediate Catc hment Area Sources: Sixel Consulting Group, 2010 US CensusMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 21 Metropolitan Topeka Airport Authority has had recent discussions, in the spring of
201 2 , with SkyWest, about serving the Topeka

– Chicago
O’Hare market under the United
code. It was made
clear in these
discussions that a risk mitigation program would be a key to new
service.

United Express service from Topeka to O’Hare on the United code would connect to 117 one

- stop cities throughout the east ern US, Mexico, Canada, Europe, South America, and Asia (see map 4). Chicago O’Hare provides the best possible c onnectivity to destinations on the East Coast

– which rank as 12 of the region’s 20 largest origin and destination passenger markets.

The Airport proposes two daily flights on the route in each direction. The route between Topeka
and Chicago O’Hare (ORD) would cover 459 miles in a block ti me of one hour and 3 0 minutes

, on average, assumi ng an average groundspeed of 400 knots on a Canada ir CRJ200 regional jet aircraft seating 50 passengers in an all

- economy layout (see figure 9).

Origin Destination Departs Arrives Block Time Equipment
FOE ORD 6:45 am 8 :1 5 am 1: 3 0 CRJ
ORD FOE 11:4 5am 1:1 5pm 1:3 0 CRJ
FOE ORD 1: 4 5pm 3:1 5pm 1:3 0 CRJ
ORD FOE 7 :1 5 pm 8:45 pm 1:3 0 CRJ 

### MAP 4 : One

- Stop Connections over Chicago O’Hare on United Source: Sixel Consulting Group Hub Builder, May 2012

FIGURE 9 : Proposed Schedule: Topeka

– Chicago O’Hare Source: Sixel Consulting GroupMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 22

The proposed schedule would allow for the overnight of an aircraft at the Forbes Field Airport, which positions the aircraft for an early morning departure to Chicago O’Hare to connect to the first departing block of flights of th e day on the United Airlines network (see figure 9 ). This schedule connects into the main midday and evening banks at Chicago O’Hare , as well, with a late evening arrival. The schedule is designed for the Topeka area business traveler to be able
to make a one day trip to Chicago, and a two day trip to most East Coast markets

– providing the best possible competition with the schedule at Kansas City. The schedule also conforms to new crew scheduling requirements for longer crew overnight rest.

In analyzing the opportunity it is important to understand the performance and capacity on current competing service between Kansas City and Chicago O’Hare. Since the fall of 2008, airlines flying between Kansas City and O’Hare have cut their capacity by 41% (see figure 10). At the same time, load factors on the route have pushed to an average of 80% for the 12 months ended January 2012, indicating the potential for success of additional Chicago O’Hare service in the region.



### FIGURE 1 0 : Available Seats, Flights, and Passengers per Day between MCI and ORD June 2009

– January 2012 ; Source: US DOT T100 DataMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 23

Since September of 2008, airlines have cut an average of 627 daily departing seats in each direction between Kansas City and Chicago O’Hare (see figure 10 on pr evious page ). The seats proposed in this application

– 100 per day in each direction

– will replace only a small proportion of those already cut from the local region.

Average origin and destination fares paid in the Topeka catchment area on the Chicago route have been steadily increasing for the last decade. In 2003, the average one way fare for Topeka catchment area passengers to Chicago (including both O’Hare and Midway airports) was $66 each way. As of the year ended third quarter 2011 the fare had risen to $126 each way

– an overall increase of $ 60 each way or 91 % (see figure 11 ).

With steady fare increases between the Topeka catchment area and Chicago, passengers have been falling each year since 2007 (see figure 11). As of the year ended third quarter 2011, the Topeka

– Chicago (O’Hare plus Midway) market generated an average of 48.7 passengers per day each way. The market has lost an average of 18.2 passengers per day each way since
2007

– a loss of 27% of its local passengers. Despite the passenger loss, the local Topeka

– 

### FIGURE 11 : Estimated O&D Passengers from the Topeka Catchment Area to/from Chicago (ORD+MDW) Sources: US DOT Table OD1A, Sixel Consulting Group Analysis ; YE3Q03

– YE3Q11Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 24

Chicago market is large enough to support one regional jet flight per day in each direction with
a 97 % load factor

– not taking into account any connecting traffic or any traffic stimulation with

new non

- stop service.

The Topeka catchment area currently gene rates an estimated average of 520 origin and destination passengers per day each way to destinations that naturally connect over the United
Airlines Chicago O’Hare hub. A s of the year ended third quarter 2011 , Topeka is estimated to
have generated 379,600 total origin and destination passengers that would flow over O’Hare on United and the Star Alliance. At the same time, Topeka
markets that flow over the
United Chicago O’Hare hub generate more t han $64.2
million in annual airlin e revenue, or $87,90 0 in revenue per day each way

.

The United/Star Alliance hub
at Chicago O’Hare has potential to capture large portions of traffic in many of Topeka’s largest estimated origin a nd destination
markets. The O’Hare hub is especially well positioned to capture traffic traveling to
the East Coast and to
international markets

. Among the large markets
that would be served over Chicago O’Hare on United is Chicago , itself, which is esti mated to generate 48.9 passengers per day each way to and from the Topeka catchment area as of the year ended third quarter 2011 (see figure 12). Other large East Coast markets over O’Hare on the UA code include Washington

- Baltimore, with an average of 39 .5 passengers per day each way; New York/Newark, with an average of 32.1 passengers per day each way; Orlando, with 

### FIGURE 1 2 : Topeka’s Top 20 Passenger Markets over ORD on United Sources: US DOT Table OD 1A, Sixel Consulting Group Analysis ; YE3Q11Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 25

an average of 26.8 passengers per day each way; and Atlanta, with an average of 19.2 passengers per day each way.

The average fare from the Topeka
catchment area to markets that flow over the Chicago O’Hare hub on United and its partners is $ 169 one way as of the year ended
third quarter 2011 (see figure 13).
As demonstrated earlier in this application, Topeka catchment
fares to East Coast markets, on average, tend to be higher than
fares to West Coast markets, even though Topeka is closer to the East
Coast than the West Coast

. This is evidenced by high average one way fares such as $197 to Detroit, $180 to Philadelphia, $179 to New York/Newark, and $157 to Washington

- Baltimore. The proposal for local air service at Forbes Field Airport is targeted to help bring down these fares through new access to service and increased competition.

In order to make this service a reality, the Airport has been working diligently with the State of Kansas, its air service experts, and its local business partners to develop a sufficient package for risk mitigation. The lynchpin in this application is th e matching funding provided by the State of
Kansas. The State has commit ted $1 million dollars under this application to match a federal request for $1 million in Small Community Air Service Development Grant funding. The total project cost is $2 million

– each partner has a 50% stake

.

All of the funding included in this application will be dedicated to a revenue guarantee, benchmarked against airline cost targets. A dditiona l funding from other sources, including GO!Topeka, the Chamber, and the Airport, will be used in support of marketing and advertising 

### FIGURE 13 : Average One Way Fare at Top 20 Passenger Markets

over ORD on UA; Source : US DOT Table OD1A ; YE3Q11Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 26

programs. Start

- up expenses and fee waivers will be provided to the new carrier outside of this proposal, with additional A irport cash.

The proposed implementation timeline for the project assumes the Department of Transportation will award Small Community Grant Funding in September of 201 2 (see figure 14)

. Once the award is announced, the Metropolitan Topeka Airport Authority will conduct additional airline meetings to secure
new service

. Based on airline planning lead
times and the need for
advance bookings, it is

assume d the new
carrier would not be able to begin service
until at least June of
2013

.

The first three milestones on the Airport's timeline are to execute the grant agreement with the Department of Transportation, meet with prospective airlines to negotiate for service, and sign the minimum revenue guarantee agreement with the appropriate airlin e partner (see figure 14)

. Once service is announced and schedules are published, the Airport would begin marketing the new route and working with the new carrier to monitor advance bookings. The Airport will continue its marketing program and continue t o work with the new carrier to monitor the route once service begins. The Airport would submit grant status reports on a quarterly basis to the Department throughout the proposed two

- year term of the minimum revenue guarantee.

While the estimated dates are targets, it is possible service could be secured and launched on a more aggressive timeline once Grant funding is awarded. It is also possible tha t new service could slip to 2014 should an airline require additional risk mitigation, beyond that includ ed in this proposal, from the community.

If, for some unforeseen reason, service is not commenced in a timely manner by a carrier serving
the United Airlines hub at Chicago O’Hare , the Metropolitan Topeka Airport Authority proposes to use federal grant mo ney awarded under the Small Community Air Service Development 

### FIGURE 14 : Grant Implementation Timeline Source: Metropolitan Topeka Airport AuthorityMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 27

Program for service to another hub with wide

- ranging connectivity. Among the options the Airport will consider would be service to Chicago O’Hare on American Eagle or another AA

affiliated carr ier; service to Memphis on Delta or one of its affiliated carriers; service to Dallas/Ft.
Worth on American Eagle or one of its affiliated carriers; service to Minneapolis/St. Paul on Delta or one of its affiliated carriers; or service to Detroit on Delta or one of its affiliated carriers.

Should these options, for an unforeseen reason, not be available for new service at the Forbes
Field Airport, the Airport will continue its discussions with all other carriers that can provide
service . Since the communi ty has never before received a Small Community Air Se rvice Development Grant, it should have few limitations on which new hub the DOT could help fund.Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 28

PUBLIC/PRIVATE PARTNERSHIP

The Topeka area partnership for air service involves a number of agencies and businesses from east central Kansas. The major support for this proposal comes from the State of Kansas, modeling the revenue guarantee for new service after the successful project in Manhattan,
Kans as. The State has formally agree d to provide $1 million of the funding for this project. Other organizations are working closely with the Metropolitan Topeka Airport Authority to develop marketing materials, advertising placement, in

- kind support, and to ensure local businesses use
the service proposed in this application.



### State of Kansas

The State of Kansas is the 15 th largest in the United States by land area and the 33 rd largest in terms of population. The State is home to 2.87 million people as of the 2010 US Census. The capital is in Topeka. As such, the State realizes the value of having local air service in its capital city, and is partnering with the Metropolitan Topeka Airport Authority in this application. The Governor signed an agreement allocating $1 million in State funding to this project, in the form of a revenue guarantee for first air service. The funding will only be allocated if the Airport is
successf ul in this Grant application.



### Metropolitan Topeka Airport Authority The Metropolitan Topeka Airport Authority owns and operates Forbes Field Airport in Topeka. The Authority has long been advocating for increased commercial air service at the Airport, an d this application is just part of that advocacy. The Airport Authority has already approved the money to be spent to match this Grant, recognizing how important the addition of viable air service is to the region.



### Greater Topeka Area Chamber of Commerce The Greater Topeka Chamber of Commerce has the mission of working to get the things done
that a company cannot do alone. A Chamber membership is seen as an investment in both a company's and the community's future. The membership of the Greater Topeka Ch amber of Commerce represents the entire community with members from business and industry, private associations, civic organizations, home based businesses, social service agencies, education, government, and individuals. Over 1,200 member firms, represent ing over 1,900 individuals, are Chamber members, joining in their support of the Forbes Field Airport in Topeka.Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 29

City of Topeka As the State’s second largest city, and Kansas’ capital, the City of Topeka is glad to have the opportunity to partner with Forb es Field Airport to bring competitive air service to the City. Community leaders have long been working to recruit additional air service to the region.



### Shawnee County Commission This three person board oversees the operation of Shawnee County, the home of the City of Topeka and Forbes Field Airport. The Commission is publically elected, and in charge of a multi

million dollar annual budget. The Commission has a current emphasis on economic development and
, as such, supports the effort to bring air service to Forbes Field.



### Coalition of Topeka Area Businesses Dozens of local businesses will work together to support the push to bring air service to eastern Kansas. These businesses will not only pledge to use new service at Forbes Field Airport, but also work to make sure the air service marketing message is spread throughout the community.Metropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

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LEGAL SPONSOR

The Metropolitan Topeka Airport Authority is the legal sponsor responsible for administering the
program

. The Metropolitan Topeka Airport Authority is a government entity.

Metropolitan Topeka Airport Authority Forbes Field Airport PO Box 19053 Topeka, Kansas 66619 Eric Johnson

, President/Director of Airports 785.862.2362 ejohnson@ mtaa

- topeka.orgMetropolitan Topeka Airport Authority • Small Community Air Service Development Grant Proposal • June 11, 2012 

## 31

CONCLUSIONS

Bringing scheduled airline service to a market like Topeka comes down to building a risk sharing package that can ensure an airline it can enter the market without losing money on the front
end. The numbers airlines talk about in risk sharing aren’t what they used to be. Just six or seven years ago a market could offer an airline a $500,000 revenue guarantee and that was enough to entice the airline to start service. Today, airlines expect revenue guarantee s, for new, unproven markets, in the seven figure range.

This reality drove the Metropolitan To peka Airport Authority to work with State of Kansas leaders to develop revenue guarantee funding in excess of what the Authority would ask for from the
federal Small Community Air Se rvice Development Program. The State share of the pro ject in
this application is $1 million

– or 50 % of the total project cost. The money is officially committed to this project, and is dependent upon this proposal being awarded.

Forbes Field Airport lies at the center of a market that generates more than 800 airline
p assengers per day each way. Since there is
no scheduled service at the Airport, virtually all of them use Kansas City International Airport (MCI). The cost of the drive to MCI has gone up by 23% in the last five years to almost $90 roundtrip, with fuel p rices still on the rise. Moreover, local fares paid by Topeka catchment area residents are up more than 25% in the last three years to an average of $182 each way before
taxes and fees.

The Metropolitan Topeka Airport Authority has never been awarded a S mall Community Air
Se rvice Development Grant. Never before has it asked the Department of Transportation for
such a reasonable portion of the overall project cost. This application demonstrates the will of the people of Kansas in building local air servi ce, the local economy, and connections to the
rest of the world. 

## “ This application demonstrates the will of the people of Kansas in building local air service, the local 

## economy, and connections to the

rest of the world.”