APPLICATION UNDER SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM DOCKET DOT-OST SUMMARY INFORMATION

Transcription

1 APPLICATION UNDER SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM DOCKET DOT-OST SUMMARY INFORMATION A. PROVIDE THE LEGAL SPONSOR AND ITS DUN AND BRADSTREET (D&B) DATA UNIVERSAL NUMBERING SYSTEM (DUNS) NUMBER, INCLUDING +4, EMPLOYEE IDENTIFICATION NUMBER (EIN) OR TAX ID. Legal Sponsor Name: Branson Regional Airport Transportation Development District DUNS Number: EIN/Tax ID: B. LIST THE NAME OF THE COMMUNITY OR CONSORTIUM OF COMMUNITIES APPLYING: 1._BRANSON, MISSOURI C. PROVIDE THE FULL AIRPORT NAME AND 3-LETTER IATA AIRPORT CODE FOR THE APPLICANT(S) AIRPORT(S) (ONLY PROVIDE CODES FOR THE AIRPORT(S) THAT ARE ACTUALLY SEEKING SERVICE). 1. Branson Airport (BKG) Proposal of the Branson Regional Airport Transportation Development District July 2013

2 D. LIST THE 2-DIGIT CONGRESSIONAL DISTRICT CODE APPLICABLE TO THE SPONSORING ORGANIZATION, AND IF A CONSORTIUM, TO EACH PARTICIPATING COMMUNITY. 1. MO-07 E. APPLICANT INFORMATION: (CHECK ALL THAT APPLY) 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. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION NAMES) PUBLIC PRIVATE 1. Branson Transportation Development Dist. 1. Branson Airport 2. Taney County 3. City of Branson 4. Branson/Lakes Area Chamber 5. Branson/Lakes Area CVB G. PROJECT PROPOSAL: (CHECK ALL THAT APPLY) Marketing Upgrade Aircraft New Route Travel Bank Service Restoration Subsidy Surface Transportation Regional Service Revenue Guarantee Launch New Carrier Start-up Cost Offset First Service Study Secure Additional Service Other (explain below) H. EXISTING LANDING AIDS AT LOCAL AIRPORT: Full ILS Outer/Middle Marker Published Instrument Approach Localizer Other (specify) Proposal of the Branson Regional Airport Transportation Development District July 2013

3 I. PROJECT COST: DO NOT ENTER TEXT IN SHADED AREA LINE DESCRIPTION SUB TOTAL TOTAL AMOUNT 1 Federal amount requested $750,000 2 State cash financial contribution $0 Local cash financial contribution 3a Airport cash funds $125,000 3b Non-airport cash funds $250,000 3 Total local cash funds (3a + 3b) $375,000 4 TOTAL CASH FUNDING (1+2+3) $1,125,000 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) $1,125,000 J. IN-KIND CONTRIBUTIONS** For funds in lines 5a (Airport In-Kind contribution) and 5b (Other In-Kind contribution), please describe the source(s) of fund(s) and the value ($) of each. Advertising and marketing matching funds from media companies. Proposal of the Branson Regional Airport Transportation Development District July 2013

4 K. IS THIS APPLICATION SUBJECT TO REVIEW BY STATE UNDER EXECUTIVE ORDER PROCESS? a. This application was made available to the state under the Executive Order Process for review on (date). b. Program is subject to E.O , but has not been selected by the state for review. c. Program is not covered by E.O L. IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT? (IF YES, PROVIDE EXPLANATION) No Yes (explain) Proposal of the Branson Regional Airport Transportation Development District July 2013

5 TABLE OF CONTENTS Section Page Number Introduction 2 Letter on Eligibility to Participate in SCASD Grant Program 3 The Branson/Southwest Missouri Air Service Market 5 Current and Historical Service 6 Inbound Tourist Overview 9 Air Service Needs and Deficiencies 11 Regional Airline Capacity 11 Per Capita Capacity 11 Average Midwest Fares 12 Branson Visitor Trends 14 Strategic Air Service Development Plan 15 Marketing/Advertising Plan 15 Potential for Additional Service 16 Public/Private Partnership 20 Conclusion 21 LEGAL SPONSOR The Branson Regional Airport Transportation Development District (TDD) is the legal sponsor responsible for administering this Grant. The TDD is a public government entity. Branson Regional Airport Transportation Development District (TDD) 4000 Branson Airport Boulevard Hollister, Missouri Pamela Laboi, Secretary (417) plaboi@flybranson.com Proposal of the Branson Regional Airport Transportation Development District July

6 INTRODUCTION The region surrounding Branson Airport is home to 600,000 people, but the Airport serves many more than those who live in southwest Missouri. It is the hub for one of the largest tourist draws in the middle of America, as Branson brought in 7.3 million tourists in While the region had been a drive destination for many years, it is in the process of a transition in which more travelers than ever before are arriving through the region s airports. The challenge to growing Branson tourism from outside the Midwest has been the decline in airline capacity at the region s two main airports Branson Airport and Springfield National Airport. Airlines have cut available seats at both airports by 44% since the summer of Together, in that period, the two airports have lost an average of 978 departing seats per day High fares have suppressed airline passengers, and hurt the tourist-driven economy of the region. even as Southwest Airlines inaugurated service at Branson Airport. Branson Airport has just 14% the number of seats per capita as the rest of the region. Branson Airport has low cost service on Southwest and Frontier Airlines, but fares in the region have continued to increase despite the presence of those carriers. In the last four years, the average fare in southwest Missouri is up 20%, to $220 each way. The southwest Missouri fare is 27% above the regional average fare. As the closest airport to the main tourist draws of the region, Branson Airport has become the lifeline for hundreds of tourism-related businesses. Those businesses, represented by the Branson/Lakes Area Chamber, are partners in this application for federal Small Community Air Service Development (SCASD) Grant funding. The Airport has never before been awarded a SCASD Grant. It has developed $375,000 in local funding to match a request for $750,000 in federal funding supporting marketing and advertising of current service, and a revenue guarantee for service to a new non-stop market. The return on investment for the DOT under this application would be 18-to-1. Each incremental enplaned passenger at Branson Airport generates an average of $628 in new spending. New service would generate an estimated 36,208 new roundtrip passengers. These roundtrip passengers would generate $22.7 million in additional spending in the Branson area. Proposal of the Branson Regional Airport Transportation Development District July

7 LETTER ON ELIGIBILITY TO PARTICIPATE IN SCASD GRANT PROGRAM Proposal of the Branson Regional Airport Transportation Development District July

8 Proposal of the Branson Regional Airport Transportation Development District July

9 THE BRANSON/SOUTHWEST MISSOURI AIR SERVICE MARKET Current and Historical Air Service More than 600,000 people live within a 90-minute drive of the Branson Airport, but local residents only represent a small portion of the market for air service. Branson is one of the largest tourist destinations in the Midwest, drawing almost 7.3 million people to the market each year. In the last two decades regional tourism people driving to Branson was responsible for the market s growth, but the establishment of the Branson Airport, in 2009, has helped pull in new visitors to the region by air. The Branson Airport has a somewhat unique market area, spanning a wide region in southwestern Missouri and northwest Arkansas (see Map 1). Within 30 minutes drive of the Branson Airport the area shaded in the MAP 1: Branson Airport s Catchment Area, by Drive Time Source: Sixel Consulting Group, 2011 US Census Estimates deepest blue the current population is 99,825 as of the latest US Census estimates. The 60 minute drive time radius seen in the next darkest shade of blue is currently home to 403,042 people, while the 90 minute drive time population is 603,512 as of the most recent US Census estimates. The Airport serves a large population that is isolated from the service of major airports, such as Kansas City and St. Louis. But the local population generates only a small portion of the overall passenger demand as many of the passengers using the Branson Airport, in particular, are inbound to the region as tourists. Proposal of the Branson Regional Airport Transportation Development District July

10 MAP 2: Current Service at the Branson Airport Source: Sixel Consulting Group; OAG Schedule Data, July 2013 added a daily flight to Dallas Love Field. As of summer of 2013, Branson Airport has nonstop service on two carriers to five destinations from the East Coast to the Rocky Mountains (see Map 2). The Airport was chosen as one of 22 that Southwest Airlines retained as it integrates AirTran into its network. That transition, completed earlier this year in Branson, has resulted in the end of AirTran service to Atlanta and Baltimore/Washington. At the same time, Southwest It s important to remember the Branson Airport cannot be analyzed in a vacuum. It is a part of a larger air transportation network in southwestern Missouri that also includes the Springfield National Airport. The two airports are separated by about 70 minutes of highway, but Springfield is the more established airport with, traditionally, a wider breadth of service. The combined Springfield-Branson route map shows non-stop service from the region to 12 cities (see Map 3). While Branson has MAP 3: Current Service at Springfield and Branson, Combined Source: Sixel Consulting Group; OAG Schedule Data, July 2013 Proposal of the Branson Regional Airport Transportation Development District July

11 service to Chicago Midway, Springfield has service to O Hare. Similarly, Springfield has service to Orlando/Sanford while Branson has service to Orlando International, and Springfield has service FIGURE 1: Branson Airport Schedule Comparison, 8/12 vs. 8/13 Source: Sixel Consulting Group; OAG Schedule Data, July 2013 Aug-12 Aug-13 Non-Stop Departures Seats Departures Seats Capacity Carrier Destination Per Day Per Day Per Day Per Day Change Branson Air Express AUS % MQY % Branson Air Express Total % Frontier DEN % Frontier Total % AirTran/Southwest ATL % BWI % DAL % HOU % MCO % MDW % AirTran/Southwest Total % Branson Total % to Dallas/Ft. Worth instead of Branson s Dallas Love. Springfield duplicates service to Denver, but with United, instead of Frontier. In all, Branson Airport capacity will be up 10.5% in August 2013 as compared to August 2012 (see Figure 1), despite the loss of nonstop service in four markets: Atlanta, Austin, Baltimore/Washington, and Milwaukee. Total daily departures will actually be down in August of 2013, as carriers serving Branson operate larger aircraft. Branson will have an average of five daily departures in August of 2013 to five destinations. Capacity will have increased on routes to Dallas, Houston, and Chicago, while capacity will be cut on the Orlando route, which sees its Saturday-only service end in August. Springfield National Airport has 38% more daily departing seats than Branson Airport, but while Branson s capacity has been FIGURE 2: Springfield Airport Schedule Comparison, 8/12 vs. 8/13 Source: Sixel Consulting Group; OAG Schedule Data, July 2013 Aug-12 Aug-13 Non-Stop Departures Seats Departures Seats Capacity Carrier Destination Per Day Per Day Per Day Per Day Change American DFW % ORD % American Total % Delta ATL % MEM % Delta Total % United ORD % DEN % United Total % Allegiant LAS % PIE % SFB % LAX % AZA % Allegiant Total % Springfield Total % Proposal of the Branson Regional Airport Transportation Development District July

12 increasing, Springfield s capacity has been declining. In August 2013, Springfield will have 2.2% fewer daily departing seats than it had in August 2012 (see Figure 2 on previous page). While American has increased its seats at Springfield, the largest cuts come from Allegiant, which has total August capacity down almost 28% in August Allegiant has pulled all service from Springfield to Los Angeles. The loss of service, and the impact of Allegiant s smaller regional footprint, can be seen in average fares in southwest Missouri. In the last four years, the combined Branson-Springfield average one way fare has climbed by 20% to $220, or an average of $37 each way (see Figure 3). Higher average fares have caused Springfield passengers to decline by 8% since 2009, while Branson passengers have grown by 162% in that period. FIGURE 3: O&D Passengers and Average One Way Fares, BKG+SGF Source: US DOT OD1A, Calendar Year 2004 Calendar Year 2012 Together, the airports generated an average of 1,263 passengers per day each way (PDEW) in 2012 (see Figure 3). The overall market grew slightly from 2011, adding an average of 58 PDEW for a 5% annual growth rate. Springfield is still the dominant airport in the region, as the Branson Airport captured 24% of total passengers to and from southwestern Missouri in While Branson is thought of as a tourist market with predominately drive visitors, data shows the opposite to be the case. Branson is able to draw visitors from all over the country due to its Proposal of the Branson Regional Airport Transportation Development District July

13 family-friendly attractions and low overall costs. While it is true Branson draws well from Missouri, Arkansas, and Illinois all areas within a day s drive it also draws heavily from places such as south Texas, Southern California, the northern tier including Minnesota and Wisconsin, and from Florida (see Map 4). The success of non-stop service at the Branson Airport to cities such as Denver, Dallas, and Houston has illustrated the fact that tourists will seek out the most convenient route to the place FIGURE 4: Top 25 O&D Passenger Markets, BKG+SGF Source: US DOT OD1A, Calendar Year 2012 MAP 4: Branson Visitors by Origin County Source: Branson/Lakes Area VCB, Calendar Year 2011 where they want to vacation. There are a number of potential unserved airline markets from which Branson draws heavily. According to the heat map compiled by the Branson/Lakes Area VCB, those markets include Los Angeles, Las Vegas, Tampa/St. Petersburg, Dallas/Ft. Worth, New York City, Minneapolis/St. Paul, Proposal of the Branson Regional Airport Transportation Development District July

14 Phoenix, San Francisco, Boston, Detroit, Milwaukee, Indianapolis, Des Moines, and Seattle/Tacoma (see Map 4 on previous page). Indeed, the largest current southwestern Missouri origin and destination passenger market without non-stop service is Los Angeles, generating an average of 45.4 passengers per day each way (PDEW) in 2012 (see Figure 4 on previous page). A large portion of travelers choose to fly to and from the Branson Airport, instead of the Springfield National Airport, when they have the option especially in markets where Branson, itself, has non-stop service. These markets include Orlando, Chicago, and Denver. Nonetheless, there are a number of markets where there is potential for non-stop service from the region. FIGURE 5: Average One Way Fares at Top 25 O&D Markets, BKG+SGF Source: US DOT OD1A, Calendar Year 2012 Overall fares in the region have risen dramatically in the last three years, as the southwestern Missouri market now has some of the highest average fares in the Midwest. Even markets where Branson s Airport offers low cost service have high fares as compared to markets with more competition. The overall average fare at the combined Branson Airport and Springfield National Airport region was $220 one way in 2012 (see Figure 5). Surprisingly, some fares, such as the fare to and from Chicago which is $185 each way, are high despite low cost service penetration. The result of rising fares and declining capacity has been a reduction in passengers flying in and out of southwestern Missouri. While many markets have seen passenger declines and fare increases over the last three years, it is a particularly critical situation in Branson, as the majority of the economy relies upon inbound tourism. In the last three years it has become increasingly difficult for non-drive tourists to get to Branson, despite the efforts to grow low cost service at the Branson Airport. Proposal of the Branson Regional Airport Transportation Development District July

15 AIR SERVICE NEEDS AND DEFICIENCIES IN SOUTHWEST MISSOURI Even with the addition of service at Branson Airport overall southwest Missouri air service capacity continues to decline. At Branson Airport, summer 2013 departures are down 11% from summer The overall region s capacity cuts are more striking, when service at both Branson Airport and Springfield National Airport is taken into account. Since summer of 2010, the Branson-Springfield market has lost an average of 12.5 departures per day, or 37% of its airline departures from the Branson Airport and Springfield National Airport (see Figure 6). The market has just 20.5 departures per day, on average, as of February FIGURE 6: Passengers, Seats, and Flights per Day Each Way, BKG+SGF Source: US DOT T100; July 2010 February 2013 At the same time, the Branson-Springfield combined market has lost more than 44% of its available airline seats, or an average of 978 daily departing seats (see Figure 6). In July of 2010, FIGURE 7: Seats per Capita in Missouri and Arkansas Markets Sources: US DOT T100, 2011 US Census; Calendar Year 2012 the combined market had an average of 2,206 seats per day each way in and out. By February of 2013 that number has fallen to 1,228 seats per day each way. While it is true there are summertime peaks in Proposal of the Branson Regional Airport Transportation Development District July

16 capacity, Branson-Springfield s peak summer capacity in 2012 was 206 seats per day each way below its peak capacity in 2010 a peak capacity decline of 9%. The net result is higher fares and a suppression of potential tourist traffic. With those capacity cuts, the Branson market has become one of the most underserved in the region. Despite the fact that Branson is a huge inbound passenger draw, service at Branson Airport provides just 0.67 seats per capita of its immediate catchment area per year, as of 2012 (see Figure 7 on previous page). Of airports in Missouri and Arkansas, only Texarkana and Columbia/Jefferson City have fewer airline seats per capita. The regional average is 4.65 seats per capita per year, as FIGURE 8: Passengers per Capita in Missouri and Arkansas Markets Sources: US DOT T100, 2011 US Census; Calendar Year 2012 of The Branson market has just 14% the average number of seats per capita as the region. Similarly, Branson generates just 0.43 passengers per capita per year, which is just 12% of the regional passenger average of 3.61 trips per capita per year (see Figure 8). Other airports in the region, such as Northwest Arkansas with an average of 2.27 passengers per capita in 2012, are able to generate more trips per capita due to their higher airline capacity. This trend goes FIGURE 9: Average One Way Fares in Missouri and Arkansas Sources: US DOT OD1A; Calendar Year 2012 against expectations for the region, as of all the markets listed Branson is the biggest tourist draw. Branson should outpace the rest of the group, as many of its passengers are travelers inbound from other markets on vacation. Part of the reason for the low number of passengers per capita in the Branson market, beyond a lack of airline capacity, is increasing Proposal of the Branson Regional Airport Transportation Development District July

17 average fares which drive passengers away. As of calendar year 2012, the combined Branson- Springfield market had an average one way fare of $220 or $440 roundtrip which is $47 more each way or $94 more roundtrip than the Missouri-Arkansas average fare of $173 (see Figure 9 on previous page). Travelers in and out of the airports in Branson and Springfield pay 27% more than the average of all travelers to and from other airports in the region. Remarkably, the Branson-Springfield combined fare is higher than the fares at some smaller markets, with fewer seats and access to fewer carriers, such as Columbia/Jefferson City. With increasing fares in the market, passengers have been pushed away from local service at the Branson Airport. This has been evidenced by the average load factors in the market. In calendar year 2012, the Branson market had filled just 65% of its available airline seats, meaning 35% of seats in the market arrived and departed empty (see Figure 10). In 2012, Branson Airport had the second lowest average load factor of all markets in Missouri and Arkansas. The regional average load factor was 79.4% in Branson s load factor was almost 15 points below the regional average. It is clear the Airport would benefit from additional awareness of service as it works to support the region s only low cost network carrier. Nonetheless, both Branson carriers will be profitable, without subsidy, in 2013 despite lower load factors. But additional passengers would benefit the region. FIGURE 10: Load Factors in Missouri and Arkansas Markets Sources: US DOT T100; Calendar Year 2012 Increasing fares and reduced load factors are at least partially responsible for the declining number of visitors traveling to Branson. Since the visitor peak in 2007, when 8.3 million people traveled to Branson, the region has seen a 12% decline in visitors (see Figure 11 on next page). In that period, Branson lost an average of 1,792 visitors per day, or a little more than a million total annual visitors. Visitors to Branson have been essentially flat since 1999, as visitors have normalized in the last several years. But from 1991 to the present, Branson s visitor market has grown by an average of 11,773 visitors per day, or 143% (see Figure 11 on next page). The biggest key to ensure Branson s long-term success as a destination is the diversification of its visitor base. Reaching out to Proposal of the Branson Regional Airport Transportation Development District July

18 potential visitors traveling by air not only opens the market to a new set of tourists, but it also increases the average revenue per stay, as air travelers are likely to stay longer and budget more money for their trips. FIGURE 11: Annual Visitors to Branson Source: Branson/Lakes Area Chamber of Commerce & Convention and Visitors Bureau, This project has the potential to fill empty airlines seats, not only, at the Branson Airport, but throughout the region. The result will be increased demand and increased low cost service, lowering fares. With more people flying to and from the region there will be additional jobs generated through additional visitor spending. Proposal of the Branson Regional Airport Transportation Development District July

19 STRATEGIC AIR SERVICE DEVELOPMENT PLAN Until the last decade, Branson was not known as an air travel tourism market, but it has become a market where inbound air travelers make up a significant portion of the nearly 7.3 million annual visitors. A recent economic impact study conducted by Dr. Lee McPheters, a professor at Arizona State University, found that the Branson Airport generated more than $45 million in visitor spending and nearly 1,000 local jobs. The study also estimates that with half a million enplanements, the airport could generate an estimated $204 million in visitor spending. Air travel tourism growth has exploded in the last three years, as service launched at the nearby Branson Airport supplemented the air service provided at the Springfield National Airport, which is more than an hour away. To effectively serve the region, Branson Airport must continue to increase its load factors, and continue to grow a dual-effort to grow passengers on current service and recruit additional service options. service options. As noted, Branson visitors have declined by 12% in the last six years. Branson Airport s strategic air service development plan is a dual effort to grow passengers on current service and to recruit additional service options. The first part of the plan proposed by the Branson Regional Airport Transportation Development District (TDD) is a targeted air service marketing and advertising campaign to grow local enplanements and the usage of local air service. The campaign will be designed with two main objectives: 1) Do a better job filling airline seats with both in-market, outbound travelers, and with outof-market, inbound tourists; 2) To grow passengers to a level where additional service is necessitated, and where additional routes to targeted new destinations can be added. In order to fulfill those objectives, the TDD plans to leverage all that people know about Branson, and all that Branson has to offer, with the messaging that people can get to Branson by flying into the local airport from their hometown. As such, the out-of-market campaign will be focused on markets that have current non-stop or one-stop service to the Branson Airport. Proposal of the Branson Regional Airport Transportation Development District July

20 Inside the Branson market, the TDD plans to use a smaller portion of the campaign budget to better educate local travelers on the breadth of local service. There is still a knowledge gap in the market due to the fact that the Branson Airport has only had commercial air service for four years, and the fact that Southwest has only recently launched service. FIGURE 12: Branson Brand Position Source: Branson/Lakes Area Convention and Visitors Bureau The updated brand strategy will focus on a clear positioning of Branson as a wholesome, intimate, and authentic alternative to Las Vegas and Orlando. Branson will be branded as the heartland (see Figure 12). The campaigns will appeal to those with the most disposable income, including Baby Boomer couples, younger adults, and families, in that order. In addition to the marketing campaign supported by this Grant, the TDD seeks to grow non-stop air service to a destination without current service through the use of Grant funding, and the local matching cash, as a revenue guarantee. The top target for this new service is Los Angeles. FIGURE 13: O&D Passengers and Average One Way Fares, BKG+SGF Los Angeles Basin Airports Source: US DOT OD1A, Calendar Year 2004 Calendar Year 2012; Includes LAX, BUR, LGB, ONT, SNA Proposal of the Branson Regional Airport Transportation Development District July

21 The Branson-Springfield combined market generated almost 58,000 total passengers in 2012, or an average of 79 passengers per day each way (PDEW) (see Figure 13 on previous page). The market has been stimulated by 108% since 2008, adding an average of 41 PDEW. While average fares have declined since 2008, they have been climbing again for the last three years. In fact, the average one way fare between Branson-Springfield and Los Angeles has increased by $25, or 17% in the last five years. MAP 5: Connections Over LAX on Alaska Airlines and Partners Source: Sixel Consulting Group Hub Builder CY2012; July 2013 FIGURE 14: Top 20 Markets Over LAX on AS, BKG+SGF Source: Sixel Consulting Group Hub Builder CY2012 While the local Springfield-Branson market is sufficiently large to support daily regional jet service, flights are more likely to be successful if they are operated by a carrier that has some level of connectivity at a Los Angeles focus city. The TDD has targeted Alaska Airlines as, potentially, the best match for service on the route. Service between Branson and LAX would connect to 29 one-stop cities on Alaska and its codeshare partners (see Map 5), accessing an average of 274 PDEW at a $206 average one way fare, based on 2012 data. The route would open new one-stop connections from Branson to a number of cities, including Honolulu, Anchorage, Fresno, Shanghai, and Tokyo. In addition to the 79 PDEW the Branson-Springfield market currently generates to Los Angeles Basin Proposal of the Branson Regional Airport Transportation Development District July

22 airports, the service would be able to access large numbers of passengers to cities such as Las Vegas, which averages 77 PDEW; San Francisco, which averages 20 PDEW, Seattle/Tacoma, which averages 19 PDEW; and Phoenix, which averages 15 PDEW (see Figure 14 on previous page). Altogether, the top 20 markets over LAX on the Alaska network generated an average of 272 PDEW in FIGURE 15: Average One Way Fares at Top 20 Markets Over LAX Source: Sixel Consulting Group Hub Builder CY2012; July 2013 The overall average fare over LAX on Alaska and its codeshare partners was $206 each way in 2012 (see Figure 15). But fares in just two markets are below the overall average Los Angeles, itself, at $170 each way and Las Vegas at $124 each way both skewed lower because of the presence of Allegiant at Springfield National Airport. All 18 other top markets have fares above the average, at levels where passenger traffic would likely be suppressed due to pricing. A new non-stop provider to Los Angeles, with new one stop options to these markets, would have the impact of lowering fares and stimulating new passengers. The total cost of this project is $1,125,000, with $375,000 in the cash needed coming from local partners. The TDD is requesting federal funding, under the Small Community Air Service Development Program (SCASDP), of $750,000. Of the total funding amount, the TDD expects to use $625,000, or 56% of the project s funding, for the marketing and advertising campaign in support of incumbent service at the Branson Airport. The remaining $500,000 will be used as revenue guarantee funding for new non-stop service to a destination not currently served by a carrier at the Branson Airport. As the Airport has never before won a SCASD Grant, the revenue guarantee could be used for any new service initiative, as long as that service does not directly compete with current service. Proposal of the Branson Regional Airport Transportation Development District July

23 This Grant proposal will generate significant return on investment. According to the Arizona State University Study, each incremental enplaned passenger at Branson Airport generates an average of $628 in new spending. Assuming single-daily service, with 124 seats per flight, and an average 80% load factor, new flights would generate an average of 72,416 passengers per year, or 36,208 roundtrip passengers (visitors). These roundtrip passengers would generate $22.7 million in additional spending in the Branson area. The return on investment for the DOT under this application would be 18-to-1. As creative development for Branson s marketing and advertising efforts is continually underway, and $375,000 of the funding has already been secured, the campaign is turnkey FIGURE 16: Branson s Grant Timeline, July 2013 Source: Branson Regional Airport Transportation Development District Activity/Project Milestone Estimated Date SCASD Grant Award Announcement Sepetmber 2013 Executive Grant Agreement with DOT October 2013 Develop Creative/Launch Marketing October 2013 Meet with Airlines to Recruit Route Fall/Winter Targeted Announcement Date for Service April 2014 Targeted Start Date for Service June 2014 Submit Grant Status Reports to DOT Quarterly Q Q Close Grant Sepetmber 2016 and ready to launch as soon as a contract has been signed with the Department of Transportation. The anticipated timeline for the campaign assumes a Grant would be awarded in September of 2013 (see Figure 16). If the Grant agreement with the DOT is finalized in October of 2013, the campaign will begin both in- and out-of-market that month. The campaign will have sufficient funding to be sustained through the second quarter of 2016, with the Grant-supported portion of the air service development campaign ending in September of The TDD and the Branson Airport have been in discussions with a number of airlines about expanded service so far in The recruitment effort will be stepped up as soon as funding is awarded, with a hope to launch new service in summer of Branson has found itself competing against dozens of other tourist drive markets throughout the Midwest. But Branson has something unique an airport located just minutes from all of its major attractions. The Branson Airport has seen tremendous growth, generating all the air travel growth for southwestern Missouri. As Branson evolves, it will become increasingly reliant on its airport to bring in the visitors that sustain the local economy. This Grant is a key in helping to make the transition from drive market to fly market. Proposal of the Branson Regional Airport Transportation Development District July

24 PUBLIC/PRIVATE PARTNERSHIP This application for federal Small Community Air Service Development Grant funding is presented by the Branson Regional Airport Transportation Development District (TDD). The government District owns the land on which Branson Airport sits, and is responsible for the oversight of the Airport. It has a number of public and private partners in funding this application, with the largest groups mentioned in this section of the application. Branson Regional Airport Transportation Development District (TDD) Branson Airport opened on May 11, The airport is located on 922 acres in the Ozark foothills of Taney County, Missouri, just south of Branson in the southwestern part of the State. The land on which the Airport sits is owned by the Branson Regional Airport Transportation Development District (TDD). The Airport land is a government asset, and publically controlled by the Board of the TDD. Branson/Lakes Area Chamber of Commerce & Convention and Visitors Bureau (BLACVB) The Branson/Lakes Area Chamber of Commerce & Convention and Visitors Bureau (BLACVB) is the designated marketing organization for the Branson area. The BLACVB implements a comprehensive area-wide marketing plan that includes, but is not limited to, television, radio, print and web advertising, publicity, research, convention and group tour and travel programs and fulfillment. The marketing program is supported by local tax dollars. City of Branson The City of Branson has long been a popular destination for vacationers from Missouri and neighboring areas. Branson Airport helps link the City with tourists from around the world. The City of Branson is not financially obligated to the airport in the way most municipal airports would be. The City has signed a 30-year "pay-for-performance" agreement with the airport, under which is pays the Airport enplanement fees. Taney County Taney County is a partner with the Branson Airport. While Taney County officials have no financial obligation to the airport, they have agreed to accept ownership of the property and provide a long-term lease to Branson Airport LLC, allowing the Airport to finance construction with municipal debt. Proposal of the Branson Regional Airport Transportation Development District July

25 CONCLUSION The Branson Regional Airport Transportation Development District (TDD), the public government entity overseeing Branson Airport, is seeking federal assistance for a project to grow passengers on current service at the Airport, while offering a revenue guarantee for service to new non-stop markets. The project is designed to help replace some of the 500,000-plus airline seats the southwest Missouri market has lost since the summer of % of the market s previous capacity. With the loss of airline capacity, fares in the region continue to climb, averaging 27% above the rest of the region s airports in Average fares in southwest Missouri are up 20% in just the last four years, despite Southwest Airlines establishing new low cost service at Branson Airport this year. Rising fares are also having an impact on tourism to the region. Branson ranks as the most visited tourist center in Missouri, and one of the most visited in the Midwest. In 2012, Branson drew 7.3 million unique visitors about two million more In 2012, Branson drew 7.3 million visitors about two million more visitors than the Grand Canyon. visitors than the Grand Canyon. Tourism is the lifeblood of the region s economy, with a total impact of $2.6 billion per year. But Branson tourist visits have declined by 12% in the last five years. Air service will be the key to stimulating additional visits. The return on investment for the DOT under this application would be 18-to-1. Each incremental enplaned passenger at Branson Airport generates an average of $628 in new spending. New service would generate an estimated 36,208 new roundtrip passengers. These roundtrip passengers would generate $22.7 million in additional spending in the Branson area. This project will help to fill available airline seats in the Branson market through extensive inmarket and out-of-market advertising. It will also help to secure additional service to a new destination through a proven revenue guarantee program. This support is critical to the future of the region, which is why regional partners have pledged $375,000 in matching cash for this application. The federal portion of the project is necessary to bring the total funding to the seven figure mark, and to provide incentives that are competitive with other airports across the country. Proposal of the Branson Regional Airport Transportation Development District July