Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 APPLICATION UNDER
SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST

- 2014

- 011 3

SUMMARY INFORMATION

A. P ROVIDE THE LEGAL SPO NSOR AND ITS DUN AND BRADSTREET (D& B) DATA UNIVERSAL NUMBE RING SYSTEM (DUNS)

NUMBER , INCLUDING +4, EMPLOYEE IDENTIFICAT ION NUMBER (EIN) OR TAX ID

. Legal Sponsor Name: City of Concord, North Carolina Name of Signatory Party for Legal Sponsor:
Rick Cloutier , Aviation Director
DUNS Number:
079067484 EIN/Tax ID:
56

- 6001207

B. L IST THE N AME OF THE COMMUNITY OR CONSORTIUM OF COM MUNITIES APPLYING : 1. C ITY OF C ONCORD , N ORTH C AROLINA

C. P ROVIDE THE FULL AIRP ORT NAME AND 3

- L ETTER IATA A IRPORT C ODE FOR THE APPLICAN T ( S ) AIRPORT ( S ) (O NLY

PROVIDE CODES FOR TH E AIRPORT ( S ) THAT ARE ACTUALLY SE EKING SERVICE ).
1. Concord Regional Airport (USA )

D OES THE AIRPORT SEEK ING SERVICE HOLD AN AIRPORT OPERATING CE RTIFICATE ISSUED BY THE F EDERAL A VIATION A DMINISTRATION UNDER 14 CFR P ART 139? (I F “ NO ,” PLEASE EXPLAIN WHETH ER THE AIRPORT INTEN DS TO APPLY FOR A CERTIFICATE OR WHETH ER AN APPLICATION UN DER P ART 139 IS PENDING .)

Yes No 

### XProposal of Concord Regional Airport • Concord, North Carolina • July 2014

D. L IST THE 2

- DIGIT CONGRESSIONAL DISTRICT CODE APPLIC ABLE TO THE SPONSORI NG ORGANIZATION , AND IF A

CONSORTIUM , TO EACH PARTICIPATIN G COMMUNITY

. 1. NC

- 08

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

Not a Consortium Interstate Consortium Intrastate Consortium Community now receives subsidized Essential Air Service Community (or Consortium member) previously received a Small Community Air Service Development Program Grant
If previous recipient: Year of grant(s):

F. P UBLIC /P RIVATE P ARTNERSHIPS : (L IST O RGANIZATION NAMES )
PUBLIC PRIVATE
1. Concord Regional Airport 1. Cabarrus County CVB
2

. City of Concord 2. Cabarrus Regional Chamber
3. Cabarrus County 3. Cabarrus Economic Development Corp.

G. P ROJECT P ROPOSAL : 1. G RANT G OALS : ( CHECK ALL THAT APPLY )
Launch New Carrier Secure Additional Service Upgrade Aircraft
First Service New Route Service Restoration Regional Service Surface Transportation Professional Services Other (explain below) 

### X

X X
X
XProposal of Concord Regional Airport • Concord, North Carolina • July 2014

2

. F INANCIAL T OOLS T O B E U SED : ( CHECK ALL THAT APPLY )

Marketing (including Advertising): promotion of the air service to the public
Start

- Up Cost Offset: offsetting expenses to assist an air service provider in setting up a new station and starting new service (for example, ticket counter reconfiguration)
Revenue Guarantee: an agreement with an air service provider setting forth a minimum guaranteed profit margin, a portion of which is eligible for reimbursement by the community
Recruitment of Air Carrier: air service development activities to recruit new air service, including expenses for airport marketers to meet with air service providers to make the
case for new air service
Fee Waivers: waiver of airport fees, such as landing fees, to encourage new air service;
counted as in

- kind contributions only Ground Handling Fee: reimbursement of expenses for passenger, cabin, and ramp (below wing) services provided by third party ground handlers
Travel Bank: travel pledges, or deposited monetary funds, from participating partie s for the purchase of air travel on an air carrier, with define d procedures for the subsequent

use of the pledges or the deposited funds; counted as in

- kind contributions only
Other (explain below)

H. E XISTING L ANDING A IDS AT L OCAL A IRPORT : Full ILS Outer/Middle Marker Published Instrument Approach
Localizer Other (specify) 

### X
X

X

XProposal of Concord Regional Airport • Concord, North Carolina • July 2014

I. P ROJECT C OST : D O NOT ENTER TEXT IN SHADED AREA
L INE D ESCRIPTION S UB T OTAL T OTAL A MOUNT
1 Federal amount requested $2 5 0,000
2 State cash financial contribution $0
Local cash financial contribution
3a Airport cash funds $ 0
3b Non

- airport cash funds $5 0,000
3 Total local cash funds ( 3a + 3b ) $ 5 0,000
4 TOTAL CASH FUNDING ( 1+2+3 ) $3 0 0,000
In

- Kind contribution
5a Airport In

- Kind contribution** Various
5b Other In

- Kind contribution** Various
5 TOTAL IN

- KIND CONTRIBUTION ( 5a + 5b ) Various
6 TOTAL PROJECT COST ( 4+5 ) $ 3 0 0,000

J. IN

- KIND CONTRIBUTIONS** For funds in lines 5a (Airport In

- Kind contribution) and 5b (Other In

- Kind contribution), please describe the source(s) of fund(s) and the value ($) of each. The Airport will waive terminal rent and landing fees for two years; l ocal media companies will offer discounts on advertising; partner airlines will offer f ree tickets for giveaways

.

K. I S T HIS A PPLICATION S UBJECT T O R EVIEW B Y AN AFFECTED S TATE U NDER E XECUTIVE O RDER 12372 P ROCESS ?

a. This applica tion was made available to the S tate 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 S tate for review.

c. Program is not covered by E.O. 12372.

L. I S T HE LEAD A PPLICANT OR ANY CO - APPLICANTS D ELINQUENT O N A NY F EDERAL D EBT ? (I F “Y ES ”, P ROVIDE
E XPLANATIO N )
No Yes (explain)

_____________________________________________________________________________________________Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 1

TABLE OF CONTENTS

Legal Sponsor 1 Introductory Letter of Support 2
Introduction 3
The Concord/North Charlotte Air Service Market 4
Performance of New Air Service 5 Regional Passenger and Fare Trends 6
Air Service Needs and Deficiencies in Concord 9 Average Southeast Region Fares 9 Average East Coast Hub Fares 10 Capacity Allocation: Connecting vs. Local 10
Florida Market Fare Increases 11 Strategic Plan for Scheduled Air Service 12 New Target Markets 12 Project Funding Plan and Timeline 15 Public/ Private Partnership 16
Conclusion 18



## LEGAL SPONSOR
The Concord Regional Airport is the legal sponsor responsible for administering the proposed air service development program. The Airport is a government agency, owned and operated by the City of Concord.

City of Concord, North Carolina 26 Union Street, South Concord, North Carolina 28025 Rick Cloutier , A viation Director (704 ) 920

- 5913 cloutier@concordnc.gov 

### Section Page NumberProposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 2

INTRODUCTORY LETTER OF SUPPORTProposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 3

INTRODUCTION

Concord Regional Airport has become the alternate option for the Charlotte metro area. Allegiant launched service at Concord in December of 2013. It was met with immediate success. Since then, the market has filled more than 90% of the available seats. People all over the Charlotte area have clamored for affordable air service. While Charlotte Douglas International Airport is a major hub with non

- stops to many cities, it is not priced for local traffic and high fares have, for years, s uppressed passengers.

The average fare in the Charlotte market has increased by 29% in the last five years. The percentage of Cha rlotte origin and destination passengers using Charlotte Douglas has dropped to just 24%, with 76% of all passengers using the airport just connecting through it. Air service at Charlotte is dominated by American Airlines, after it took over the Charlotte hub from US Airways following their merger. Few carriers have wanted to challenge US Airways, and now American, by adding flights at Charlotte. This has resulted in the highest average fare of all E ast C oast hub markets, and made access to air service d ifficult for people living in the region.

Concord Regional Airport represents the best opportunity to bring more wide

- ranging low cost air service to the region. Allegiant will operate four flights per week from Concord to Orlando

Sanford in the coming fall. But Concord needs additional flights to truly be able to bring low
fares to the Charlotte metro area.

The Airport and its pri vate partners have developed $5 0,000 in funding to help recruit additional low cost flights. The Airport is seeking $250,0 00 in federal Small Community Air Service Development (SCASD) Grant funding to support this effort by being able to offer a marketing
incentive for new routes

.

The recruitment of additional routes, despite the success of current service, will be difficu lt because Concord has no record of being able to support air service on a larger scale. This Grant application will help the Airport in offering a sufficient incentive package for future air service development success. 

## “Concord Regional Airport represents the best opportunity to bring more wide

- ranging low cost air service to the region.”Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 4

THE CONCORD

- CHARLOTTE AIR SERVICE MARKET The Regional Economy and Air Service Environment

Concord lies on the north side of the Charlotte metro area. While Charlotte is well known as a center for biotech and banking, Concord is the center of world motorsports as the headquarters of NASCAR and most of its teams. As Charlotte has grown to one of the t op 20 largest metro areas in the country, Concord , itself, has seen unparalleled growth. The Charlotte metro area is home to 1.8 million people, with 668,000 of them living closer to Concord Regional Airport than
to Charlotte Douglas International Airport

.

With Allegiant now serving Concord Regional Airport, and seeing success in the market, Concord has become a true second airport for
the Charlotte metro area. Concord is able to provide fare relief to the entire region. Moreover, Concord is perfectly p ositioned to serve those
who tend to travel the most.

The households with the highest income level in
south central North Carolina are clustered around Concord. While the Charlotte Metropolitan Statistical Area (MSA) had a median household income of $50, 671 in 2012, the Concord median household income was $69,126, or 36% higher than Charlotte (se e Map 1 ). The average Concord household made $18,455 more in 2012 than the average Charlotte household. B ut Concord Regional Airport can draw from a much wider area, including regions to the south and north of the airport where the income level is lower and low cost service is even more attractive.

The Charlotte economy is also driven by tourism. More than 1.5 million people come to Concord each year for events at the Charlotte M otor Speedway. The facility seats 140,000 people at 15 main events, and a number of smaller events. The Speedway is just a mile and a half from the
Concord Regional Airport terminal . Concord is working hard with its partners to grow inbound
tourism. Air service at Concord Regional Airport has become a key to that growth. 

### MAP 1: Concord Regional Airport Catchment Area Source: US Department of Commerce, 2012Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 5

C oncord Regional Airport was able to successfully recruit Allegiant Air to the market in 2013, marking the first time the Airport has ever had scheduled service. Allegiant saw opportunity in the Charlotte market, using Concord as its gateway , largely due t o the large population and high average fares at Charlotte’s airport. Allegiant saw immediate success. It has carried nearly 11,500 passengers in just its first five months of service, operating just two departures per week to Orlando/Sanford (see figure 1). In March of this year Allegiant average 366 passengers per week in each direction, it best month to date.

Allegiant’s load factors have been strong, and t hey continue to improve. Outbound load factors are now averaging 90% with inbound load factors climbing from 77% in the first month of service, last December, to 90% in April of 2014 (see figure 2). It is clear Charlotte metro area travelers were seeking alternative low cost service, escaping high fares at Charlotte’s main airport. The service has done so well, so quickly, Allegiant will expand to four flights per week in each direction to and from Orlando/Sanford
this fall. It also intends to add servi ce to other Florida destinations in 2015.

The Charlotte market generates more than 10 million annual passengers

– it is sufficiently large to support service at more than one airport. But Concord’s niche is unique in the market. While Charlotte is a maj or hub for American, following its merger with US Airways which used to operate the Charlotte hub, Concord is the easy and low fare alternative. Charlotte has
unmatched non

- stop offerings, with almost 150 cities served non

- stop. Concord does not aim to
d uplicate this service. Concord’s goal is, and has always been, to provide convenient low cost
service to those who cannot afford the rising fares in Charlotte. 

### FIGURE 1 : Passengers on Allegiant at Concord Source: Concord Regional Airport, December 2013

– April 2014

FIGURE 2 : Allegiant Load Factors at Concord Source: Concord Regional Airport, 12/13

– 4/14Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 6

The Charlotte market has seen only modest origin and destination (O&D) passenger growth over the last five years

. Since 2009, Charlotte’s O&D passengers have grown by 17 % (see figure 3)

. The fact that passengers have grown at all during that period illustrates the strength of the Charlotte market, as fares have risen substantially

.

In the last five years the average Charlotte fare has risen by 29%, or an average of $51 each way, to $229 each way (see figure 3)

. Rising fares have had the impact of suppressing passengers. Some Charlotte passengers also sought out
low fare servic e at airports more than two hours away

– Greenville/Spartanburg and
Greensboro.

Service in the greater Charlotte market is geared toward origin and
destination business travel. This is evidenced by Charlotte’s top 25 passenger markets (see Figure 4 ).
Ei ght of the top ten markets are business travel destinations, including New York/Newark, w hich generates an average of 1,183 passengers per day each way as of 2013 ; Boston, 

### FIGURE 3 : O&D Passengers and Average One Way Fares at Charlotte Douglas International Airport Source: US DOT OD1A, Calendar Year 2004

– Calendar Year 2013

FIGURE 4 : Statistical Analysis of Top 25 O&D Markets at Charlotte Source: US DOT OD1A, Calendar Year 2013Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 7

w hich generates an average of 455 PDEW; and Chicago, w hich generates an average of 4 11
PDEW. Business markets tend to support higher average fares than leisure markets, as business travelers are less fare sensitive than leisure travelers, which is part of the reason Charlotte fares have been rising so rapidly.

As previously mentioned, the average Charlotte one way fare for 2013 was $229

. In markets where fares are below $200 each way, it is almost solely due to the short di stance of the route from Charlotte. The New York/Newark fare, for example, averaged $140 each way in 2013 (see figure 4 on previous page) , which works out to a yield of 2 5

- cents per mile

– much higher than the regional average yield of 17

- cents per mile. Even on
short

- haul flights, Charlotte’s fares are much higher on a mileage basis than other markets up and down the East
Coast

.

Allegiant service at Concord Regional Airport has started to bring some fare relief to the Charlotte market. The
Charlotte

– Orlando fare in 2013 was $148 each way (see figure 4 on previous page). While there is no complete data for Concord

– Orlando/Sanford service during this period, the highest fare Allegiant offered for sale in the market was $109 each way, which is 36% les s than the average at Charlotte. With fares so low, new markets will see significant passenger stimulation

– passengers who might otherwise not have traveled will find the low fares so affordable they will fly when they might have driven had fares been hi gher.

The Airport also continues to improve its facilities so that it can handle expanded air service. Two major projects are underway to increase passenger capacity for air carriers. First, the Airport will expand its south apron parking area. The c ur rent ramp doe s not allow enough space to handle all operations. The scheduled charter and air carrier operations have grown beyond the current
ramp space. The expansion of the ramp is needed to accommodate these operations, increase operational efficienc y , an d maintain safety regulations. The project will cost $4.3 million
and is i n the F ederal A viation A dministration (FAA) work plan for funding in 2014

.

The second project is the $3.5 million project to construct a new passenger terminal for scheduled airline operations. Concord Regional Airport is c urrently using a temporary terminal that was converted from a hangar. This space does not m eet projected s pace needs, nor does
it meet current T ransportation S ecurity A dministration (TSA) requirements. The TSA, while doing its 

## “Allegiant service at Concord Regional Airport has started to bring some fare relief to the
Charlotte market.”Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 8

best in the current converted hangar, has informed the Airport that the current facilities will not be sufficient for additional opera tions. This new terminal is in the FAA work plan for funding in fiscal year 2015

.

Through facility improvements and other challenges,
Concord Regional Airport is committed to continuing its air service development work. Its next goal is to recruit service to additional Florida airports. In support of this goal the Airport has put together a community coalition. That coalition has pledged $5 0,000 in direct cash for marketing of expanded service. The Airport is also seeking federal assistance from the Small Community Air Service Development (SCASD) Grant Program of $250,000 to allow it to ensure the message of low cost service is spread throu ghout the Charlotte metro area. 

## “...the Airport has put together a community coalition. The coalition has pledged $100,000 in direct cash...”Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 9

AIR SERVICE NEEDS AND DEFICIENCIES IN CHARLOTTE

- CONCORD

The Charlotte metro area is home to a large airline hub, with more than a thousand flights per day to cities all over the world. Despite this, there are a number of deficiencies in air service for
Charlotte

- area travelers. The se challenges include high average fares that continue to climb, the high cost of travel on a seat

- mile basis

– with high fares in even short

- haul markets, and the fact that Charlotte’s hub carrier , American, actually provides more access to connecting
passe ngers than it does to local origin and destination traffic at Charlotte Douglas International Airport

.

Concord Regional Airport is the Charlotte metro area’s secondary airport and a designated
rel ie ver airport for the Charlotte flight service area . Concord’s position is that of a low fare alternative. Allegiant’s presence a t Concord is good for the entire Charlotte market, as it helps to provide more affordable air service, and it provides competition for American, which controls more than 80% of the
available seats in the metro area.

Of all s outheast region airports in 2013

, which , for the purpose of this analysis, includes the airports in North Carolina, South Carolina, and Virginia, Charlott e has the second highest average fare at $229 each way (see f igure 5). Only Columbia had a higher average fare in 2013, and it was only $2 more each way
than the fare at Charlotte. This is
remarkable as
, typically

, the larger the airport the more competition and the
lower the fares. Am erican’s large share of capacity at Charlotte gives it significant pricing power.

The regional aver age fare for c alendar year 2013 was $185 each way, which is $44 less than the Charlotte average (see figure 5) . Charlotte area passenge rs paid an average premium of 24 % 

### FIGURE 5 : Average One Way Fares in So utheast Markets Source: US DOT OD1A, Calendar Year 2013Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 10

over the regional average for access to scheduled air service. Airports adjacent to the
Charlotte market

– within a three hour drive

– offer lower fares and do pull some passengers away. The average fare at Greensboro in 2013 was

$199 each way, wh ich is 15% less than the Charlotte fare. Similarly, the average fare at Greenville/Spartanburg in 2013 was $180 each way

– 27% less than the fare at Charlotte.

As Charlotte is a major hub airport for American

, after its merger with US Airways , it is also important to analyze it against it s peers

– other hub airports . Among
East Coast airports that operate as hubs for one or more carriers, Charlotte had the sing le highest average fare in 2013, at $229 each way (see f igure 6). The
average for these hub airports was $185 each way in the same period, with Charlotte’s average 2 4% above
the East Coast hub average. Those who use Charlotte as their home airport pay, o n average, $44 more each way then those who live in other east coast hub markets. Surprisingly, Charlotte’s average fare is higher than fares at more congested, larger city hubs, such as Washington, DC, New York City, and Miami.

The average fares for E ast C oast hubs do not include those passengers merely changing planes at the hub. Charlotte has one of the largest splits between local origin and destination
p assengers and connecting passengers of any hub airport in the country. While Charlotte saw more than 40 million domestic passengers in 2013, only 9.6 million of those passengers were actually departing from, or bound for, Charlotte, itself.
The rest were connecting through the airport.

In 2013, just 23.7% of Charlotte’s available domestic seats were filled by Charlotte origin and destination passengers (see figure 7). In the same period, 76.3% of Charlotte’s domestic



### FIGURE 6 : Average One Way Fares at East Coast Hubs Source: US DOT OD1A, Calendar Year 2013

FIGURE 7 : Passenger Breakdown at Charlotte Source: US DOT T100 and OD1A, Calendar Year 2013Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 11

available seats were filled by passe ngers connecting through the airport. It does appear there is a deliberate pricing strategy to flow passengers over the Charlotte hub, rather than to fill seats with local passengers. In other words, it can be argued that the main hub carrier actual ly

su ppresses local traffic in favor of carrying flow traffic

– or passengers making connections at
Charlotte. Charlotte acts as American’s major north

- south hub on the East Coast , and is vital in its competitiveness aga inst other large eastern hubs.

The same theory appears to be proven out in Florida markets. Fares have continually been rising on flights between Charlotte and major Florida cities. Orlando is not considered in this analysis since Allegiant already launched Concord service, a nd since the service has already lowered the region’s average fare in the city

- pair. But fares to Tampa,
Ft. L auderdale, and Ft. Myers
have all risen since the beg inning of 2011 (see figure 8).

The average one way fare in
the Charlotte

– Ft. Lauderdale market has risen from $151 each way in the first quarter of 2011 to $180 each way in the third quarter of 2013 ( see figure 8), an increase of 19%. At the same time the average fare between Charlotte and Ft. Myers has risen from $156 each way to $171, an increase of 10%. And finally, the average one way fare between Charlotte and Tampa has risen from $164 in the fi rst quarter of 2011 to $200 in the third quarter of 2013, which is an increase of 22%.

While the breadth of service offered at Charlotte Douglas International Airport is impressive, it is dominated by a strong hub carrier. This results in high average fa res that suppress the local Charlotte market. Concord Regional Airport represents the relief

- valve for high fares, as its low cost service slowly works to reinvigorate the local passenger market and bring down fares at both airports. 

### FIGUR E 8 : One Way Fares between Charlotte and Florida Markets Source: US DOT OD1A, First Quarter 2011

– Third Quarter 2013Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 12

STRATEGIC PLAN FOR ADDITIONAL SERVICE

Before carrier recruitment began, Concord Regional Airport developed its low cost air service strategy. Since Charlott e is a large legacy carrier hub, the Concord airport leaders realized
l egacy carrier service at Concord would likely be unsuccessful in c ompeting against the sheer
breadth of service in Charlotte. Charlotte is , however, missing a significant low cost carrier presence. Concord’s strategy was to become the low cost and low fare airport for the region, re

- stimulating passengers by bringing d own the high
fares

.

This strategy proved to be solid, as
Concord leaders were able to recruit Allegiant to the market with its flights to Orlando/Sanford beginning last
December. As chronicled in this application, Allegiant has seen strong
loads on its initial service and is already planning an expansion in Concord frequency for this fall. Allegiant has been able to re

- stimulate the greater Charlotte market, and there i s much potential for the same model
to work in a number of non

- stop markets where current Charlotte fares are high.

Concord’s next air service targets are additional markets in Florida. These relatively short stage lengths can be operated at lower expens es than long haul markets and they have high current fares at Charlotte. Orlando is the largest Florida market from the Charlotte area, with an average of 325 passengers per day each way (PDEW) in calendar year 2013, which is why Allegiant chose to
launch Concord service to that market first (see figure 9). This top market list yields insight into the next set of potential markets for Allegiant to launch from Concord. 

### MAP 2: Target Routes for Concord Source: Concord Regional Airport, July 2014 FIGURE 9 : Statistical Analysis of Charlotte’s Top Florida O&D Markets Source: US DOT OD1A, Calendar Year 2013Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 13

Ft. Lauderdale, which can access passengers to Miami and West Palm Beach, is a natural future market (see map 2 on previous page), especially considering the current average one way fare is $175, which is 12% higher than the Orlando fare before Concord service began. Tampa is another target market, which Allegiant could serve through St. Pe tersburg

- Clearwater International Airport. Tampa currently generates 206 PDEW to and from Charlotte at an average one way fare of $197. The final natural Florida target for air service would be Ft. Myers, which could be served by Allegiant through Punta Gorda. Ft. Myers currently generates 83 PDEW to and from Charlotte at an average one way fare of $178.

It should be noted, t he passenger and fare numbers in figure 9 are not seasonally adjusted. Florida markets can be highly seasonal. A good example is the Charlotte

– Ft. Lauderdale market which peaks in the first quarter and sees a lull in the hot summer mo nths of the third quarter (see figure 10). Airlines in
Charlotte boarded an average of 1,118 passengers per day each way (PDEW)
between Charlotte
and Ft. Lauderdale in first quarter of 2013, but only 954 PDEW in third quarter of the
same year.

Interestin gly, less than 30% of passengers flying between Charlotte and Ft. Lauderdale are beginning or ending their trip in Charlotte (see figure 10). In the first quarter of 2013, just 21% of passengers on non

- stop flights between Charlotte and Ft. Lauderdale wer e origin and destination (O&D) Charlotte

– 79% were connecting at Charlotte from other cities. This passenger split reinforces the impression that local passengers in Charlotte are being suppressed by high local pricing in favor of carrying connecting tra ffic over Charlotte.

The same passenger split is seen in Charlotte’s other Florida markets and can be even more pronounced. Between Charlotte and Tampa, just 18% of passengers carried on non

- stops were 

### FIGURE 10: Local and Connecting Passengers, Charlotte

– Ft. Lauderdale Source: US DOT OD1A and T100, First Quarter 2011

– Third Quarter 2013Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 14 O&D Charlotte in first quarter of 2013 (see figure 11). On the route, an average of 82% of passengers on each flight were connecting at
Charlotte to or from another city. The
Charlotte

– Tampa market repeatedly sees fewer than 20% of passengers flying on origin and destination itineraries.

The Charlotte

– Tampa market is another Florida market that peaks in first quarter. The market saw an average of 1,192 onboard PDEW in first quarter of 2013 (see figure 11). Charlotte

– Tampa onboard passengers have increased by 12% since first quarter of 2011, but the local share of passengers on the route has declined, with more Charlotte planes being filled with connecting passengers.

On the Charlotte

– Ft. Myers route, just 12% of passengers fly ing non

stop between the cities were local, with 88% connecting at Charlotte from other cities (see figure 12). Ft. Myers’ seasonal spikes are the most pronounced of any Charlotte

– Florida market. While the route generated an average of 776 onboard PDEW in first quarter of 2013, it generated just 521 onboard PDEW in third quarter of the same year

– a variance of 49%. If 

### FIGURE 11: Local and Connecting Passengers, Charl otte

– Tampa Source: US DOT OD1A and T100, First Quarter 2011

– Third Quarter 2013

FIGURE 12: Local and Connecting Passengers, Charlotte

– Ft. Myers Source: US DOT OD1A and T100, First Quarter 2011

– Third Quarter 2013Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 15

Allegiant serves the Concord

– Punta Gorda market it would likely begin as seasonal service in the winter and spring.

The Airport has developed a comprehensive local public

- private partnership in support of this Grant application. The City of Concord is the Airport’s main public partner. The Airport’s private partners include the Cabarrus County Convention and
Visitors Bureau, the Cabarrus Regional Chamber of Commerce, and the Cabarrus Economic Development Corporation. The City and thes e organizations have pledged $5 0,000 in cash funding for this air service development project (see figure 13)

. With this local cash
in hand, the Airport is seeking $250,000 in federal SCASD Grant funding, for a total project cost of $30 0,000. The local share of the total proje ct is 17 % of the funding needed, with the federal share comprising the remaining 83 % of the total project cost.

All funding will be used for marketing and advertisin g of alternate low cost airline service for the
Charlotte metro area . The funding amount is larger than some other airports’ p revious requests for marketing support, but it reflects the relatively high cost of media placement in the Charlotte market.

The anticipated timeline for the project assumes a Grant would be
awarded in September of 201 4 (see Figure 1 4 ). If the Grant agreement with the DOT is finalized in October
of 2014

, during the fall of 2014 , the Airport will work to finalize an agreement for additional less

than

- daily, low cost air service through the incentives offered under this program. As soon as
that service is launched, the campaign , in support of that new service, will launch. The Airport anticipates closing the Grant by March of 2016

. 

### FIGURE 14 : Project Timeline Source: Concord Regional Airport, July 2014 FIGURE 13 : Project Funding Plan Source: Concord Regional Airport, July 2014Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 16

PUBLIC/PRIVATE PARTNERSHIP

This application for federal Small Community Air Service Development Grant funding is supported by a number of community partners who have pledged matching cash. The public partners include the Concord Regional Airport, the City of Concord, which owns and operates the Airport, and Cabarrus County, in which the Airport is located. The t hree major economic development and outreach organizations in the region are also partners in this application.



### City of Concord
Concord, North Carolina

, is likely best known as the home to the famous Charlotte Motor Speedway and NASCAR headquarters. But Concord is the second largest city in the Charlotte area, with a population just under 80,000. The City owns and operates Concord Region al Airport.



### Cab arrus County Cabarrus County is home to approximately 175,000 residents living within the Charlotte metro

area

. The county’s business community is diverse with a mix of small and large organizations and industries ranging from bioscience, motorsports, tou rism, retail, and manufacturing. While the County has no official oversight of Concord Regional Airport, it is a partner with the Airport due to the Airport’s role in developing the County’s economy.



### Cabarrus County Convention and Visitors Bureau
The Cabarrus County Convention and Visitors Bureau (CVB) is working to grow the travel industry to become the number one economic activity in the County. Visitors to the county are critical in sustaining the local economy. A ccording to the North Carolina Dep artment of Commerce Division of Tourism, Travel and Trade , d omestic tourism in Cabarrus County generat ed an economic impact of $281 million in 2009

. As local businesses benefit, tourism generates tax revenues which equal savings for county residents. In 2009, state and local tax revenues from
travel to Ca barrus County amounted to $21.8 million. This represents a tax savings of approximately $310 for each household in Cabarrus County. Air service is the key to additional tourism growth, and the CVB will f inancially support efforts to bring visitors to Cabarrus County.Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 17

Cabarrus Economic Development Corporation
The Cabarrus Economic Development Corporation is the premier organization fostering economic growth in Concord and surrounding communities

. Cabarrus County continues to be defined by its 20 percent annual population growth, low cost of living, diversified workforce, favorable climate, employment opportunities and reduced tax base. Here, you will find the

reasons Site Selection Magazine has nam ed North Carolina the number one business climate for eight consecutive years. The economic development will be best supported through additional
local air service.



### Cabarrus Regional Chamber of Commerce The Cabarrus Regional Chamber of Commerce has been serving businesses in Cabarrus County

, North Carolina

, and the entire Charlotte region as a trusted advocate, excellent resource, and proactive catalyst for quality business and community service. The Chamber accomplish es this through programs focused on advocacy, economic development, e vents and direct services to
its members. Th e Cabarrus Regional Chamber is a community leader in positive change, while fostering prosperity and building a stronger economic future. As the trusted voice for all
Cabarrus C ounty businesses, it works with education, government, and non

- profits to address the region’s current and future needs. Its members are supporters of the effort to bring
additional low cost air service to Concord Regional Airport.Proposal of Concord Regional Airport • Concord, North Carolina • July 2014 

## 18

CONCLUSION

Concord , as part of the fast

- growing Charlotte metro area, is “where racing lives,” as the slogan says. It is the home to NASCAR, the Charlotte Motor Speedway, and 90% of the teams in racing. Racing is a huge economic driver in the region, ge nerating more than $280 mil lion per year in
local economic impact and bringing in more than 1.5 million tourists each year. Beyond racing,
the Charlotte

- Concord area is home to almost two million people with jobs in dozens of high
tech industries

– from racing to bioscie nces to advanced manufacturing.

Concord Regional Airport is now the Charlotte metro area’s secondary airport. Concord’s position is that of a low fare alternative. Allegiant’s presence at Concord is good for the entire Charlotte market, as it helps to provide more affordable air service, and it provides competition for American, which controls more than 80% of the
available seats in the metro area.

Bec ause of its status as a “fortress hub,” Charlotte Douglas International Airport has some of the highest fares in the nation. In fact, of all E ast C oast airports that serve as hubs for one or more airlines, Charlotte has the highest average fare, at $229 e ach way. In the southeast region, Charlotte has the second highest average fare, even when compared to smaller regional airports with only one carrier and few daily flights.

Charlotte Douglas Airport is not designed to serve the local customer as much as it is designed
to connect traffic between the northeast US and the S outheast. Just 24% of the passengers that passed through Charlotte in 2013 were either starting or ending their journey. The majority

– 76%

– of passengers were connecting through the a irport.

Concord Regional Airport ’s low cost service is designed to serve all of Charlotte, helping to lower fares in the region and making more local seats available. To expand this service the Airport is seeking federal assistance, in the form of a Small Community Air Service Development (SCASD) Grant of $250,000, to ensure low cost service is successful. The Airport has already developed a local pub lic

- private partnership with $5 0,000 in cash funding for this proposal

– evidence that the region see s the expansion low cost air service as a priority. 

## “Concord Regional Airport
is now the Charlotte metro area’s secondary airport.”