Toledo-Lucas County Port Authority Toledo Express Airport Proposal under the Small Community Air Service Development Program Docket: DOT-OST-2010-0124 Before the Office of the Secretary of Transportation U.S. Department of Transportation A Proposal to Support Air Service Development with Marketing Funding Sponsor: Toledo-Lucas County Port Authority Toledo Express Airport Toledo, Ohio Paul Toth, CM, President and CEO, Toledo Lucas County Port Authority Congressional Code: OH-09 Dun 7 Bradstreet Number: 051625127 August 27, 2010 1
Table of Contents Description Page number Table of Contents 2 Airport Letter 3 Summary Information (Appendix B) 4 Introduction and Proposal Objectives 7 Toledo, Ohio: Location and Population 9 Toledo Air Service and Traffic 11 Toledo Domestic Average Fares 15 Alternative Airports and Leakage Estimate 18 Traffic Leakage Details 19 Air Service Needs and Deficiencies 22 Local Air Service Development Efforts 23 Toledo s Previous Grant Award 24 Detailed Explanation of Proposal 25 Extenuating Circumstances Affecting Toledo Air Service 27 Strategic Plan for Success 28 Public/Private Partnership 28 Grant Funding 29 Target Audience & Marketing Plan 30 Grant Timeline, Milestones and Monitoring 32 Performance Measures 32 Financial Controls, Grant Oversight & Return on Investment 33 Alternative Timeline, Use of Funds & Legal Sponsor 34 Airport Information & Facilities and Ground Handling Plan 35 Community Profile 37 Summary 47 2
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Summary Information Small Community Air Service Development Program Docket DOT-OST-2010-0124 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: August 31, 2005 Expiration date of Grant: August 10, 2010, grant was due to expire August 29, 2010, the Port Authority formally advised the Department of early termination on August 10, 2010. B. Public/Private Partnership Public: 1. The Lucas County Port Authority 2. Lucas County Improvement Corporation 3. The City of Toledo 4. Lucas County 5. The University of Toledo 6. Northwestern Ohio Regional Economic Development Association Private: 1. Regional Growth Partnership 2. The Toledo Chamber of Commerce 3. Quick Flight Aviation 4
C. Project Proposal Marketing Upgrade Aircraft New Route Personnel Increased Frequency Low Fare Service Travel Bank Service Restoration Subsidy Surface Transportation Regional Service Other (Specify) Revenue Guarantee Start Up Cost Offset Study Launch New Carrier First Competitive Service Secure Additional Carrier D. Existing Landing Aids at Airport Full ILS Outer/Middle Marker Published Instrument Approach Localizer Other: E. Project Cost 1. Federal amount requested: $ 200,000 2. State cash financial contribution: $ 0 3. Local cash financial contribution: $ 100,000 3a. Airport cash funds: $ 100,000 3b. Non-Airport cash funds: $ 0 3c. Total local cash funds: $ 100,000 4. TOTAL CASH FUNDING: $ 300,000 5. Local funds contributed from already existing Programs of projects included in line 3c: $ 0 6. Local funds contributed from new commitments Or new resources included in line 3c: $ 100,000 7. Airport In-Kind contribution: $ 0 8. Other In-Kind contribution: $ in determinant Description: Toledo area major media outlets will make in-kind contributions. Value no known until program fund allocations among different media occurs. 9. TOTAL IN-KIND CONTRIBUTION: $ 0 10. TOTAL PROJECT COST: $ 300,000 5
F. Enplanements at Airport 2000: 274,805 2001: 328,396 2002: 322,718 2003: 296,634 2004: 301,252 2005: 232,871 2006: 189,434 2007: 166,554 2008: 125,518 2009: 91,885 G. Is Application Subject to Review by State Under Executive Order 12372 Process? This application was made available to the State on. Program is subject to review, but has not been selected by the State. Program is not covered. H. Is Applicant Delinquent on any Federal Debt? No 6
Introduction and Proposal Objectives During the past eight years the Toledo Express Airport has suffered the largest loss of capacity of any airport within a 150 mile radius. Since 2002 Toledo has lost 66.3% of its airline capacity, essentially two of every three seats offered in the market in 2002 are gone in 2009. At the same time that Toledo has lost two thirds of its airline capacity, average fares paid at Toledo have sky rocketed and for the past five years have been well above average fares paid at nearby Detroit, Columbus or Dayton. Furthermore, as has been recently documented in an extensive Passenger Retention Study and True Passenger Market Size Analysis (April 2010), Toledo is only retaining an estimated 7.6% of its true air travel demand O&D. While the market catchment area is generating an estimated 2.2 million annual passenger trips (3,039 PDEW) the Toledo Express Airport only generated about 184,000 on and off passengers in 2009. Delta Air Lines, one of Toledo Express s two network airlines, is retiring its SF-340 turboprop aircraft and as a result will drop Toledo s air link to the Delta hub at Detroit, replacing it with twice daily service to Minneapolis in November of 2010. This entire decline has taken place despite consistent and aggressive efforts by the Airport Authority to retain existing air service and recruit new carriers. The Authority believes that an aggressive and extended air service marketing and promotional campaign is needed to draw catchment area traffic back to Toledo Express Airport. The recapture of even a modest percentage of the estimated catchment area true demand will significantly improve Toledo boardings and assist the airport in rebuilding air service capacity, both from incumbent carriers and potentially from new entrants. Therefore, the Toledo Lucas County Port Authority and Toledo Express Airport herein submit a Small Community Air Service Development Grant proposal. The air service declines that Toledo Express has endured and the challenges the Airport faces in retaining and rebuilding its air service are exactly what the Small Community Air Service Development Grant program was 7
designed to address. This proposal document will provide detailed information on the Airport s air service challenges and the marketing and promotional program that the Airport would begin with Grant funding. Objectives for Proposal: Reverse some of the massive true traffic demand leakage documented in the April 2010 Passenger Retention Study. Support the shift in Delta service in November when Detroit hub service, which has been at Toledo for decades, is replaced by Minneapolis service. Provide marketing and promotional support to incumbents carriers American (Chicago), Allegiant (Orlando and St. Pete). Gain the capability to apply some of the Grant marketing and promotional funding to one or more new airline services that the Airport may recruit in the next year. Improve incumbent carrier traffic and revenue performance at the Airport, which is the first step in gaining the reinstatement of lost frequencies and capacity. Means to Achieve Objectives: Use SCASD Grant and local match to provide a large pool of marketing and promotional funding for new air service. Compliment marketing funding with a comprehensive ground facilities and handling package that will provide significant cost savings for prospective airlines or incumbent carriers that start new routes or reinstate lost flights and capacity. Course of Action to Support Means: Deploy an extensive Grant supported multimedia marketing and promotional campaign to project the existing air service and convenience of Toledo Express Airport, including easy airport access, low cost parking and hassle free check in and TSA screening. Continue the extensive air service development efforts the Airport has undertaken for the past five plus years, including extensive contact with both incumbent carriers and prospective new entrants, regarding the potential for additional air service at Toledo Express. 8
Toledo, Ohio: Location & Population Toledo is located in northwest Ohio, along Lake Erie and adjacent the Ohio/Michigan border. The city is the fourth largest in Ohio and has grown about 2% in the past decade while the state of Ohio has only shown about 1% growth in the same time period. Two hour drive radius One hour drive radius Toledo is a major multi modal transportation hub. It sits at the junction of Interstates I-80/90 and Interstate I-75 and some 100 over-the-road trucking companies have warehouse or distribution facilities in the Toledo area. It is the fifth largest freight railroad hub in the nation and four major railroad systems have rail lines at Toledo. The Port of Toledo has modern intermodal train or truck to ship capability. Toledo Express Airport is the distribution hub for BAX Global Air Cargo. In short, Toledo is a key transportation and distribution center for all of North American. 9
The Toledo MSA had nearly 3% population growth from 2000 thru 2007, however, the economic slowdown has tempered population growth in the past two years. Toledo MSA Population: U.S. Census Bureau Data 2000-2009 800,000 Toledo MSA Population 700,000 MSA Population 600,000 500,000 400,000 300,000 659,224 663,781 666,252 669,292 671,681 673,162 673,647 675,351 673,345 672,220 Nine Year Growth 2% 200,000 100,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 The Toledo MSA population only hints at the large population in close proximity to the Toledo Express Airport. Over 1.6 million people live within a one hour drive of the Airport and about 10.2 million people live within a two hour drive of the Airport. 10
Toledo Air Service and Traffic Currently Toledo receives air service from two network carriers and two less than daily leisure carriers. American Eagle flights to Chicago ORD are operated with regional jets. Delta flights to Detroit are operated primarily with SF-340 turboprops Allegiant Air averages four flights per week in the Orlando (Sanford) and St. Petersburg markets, however weekly frequency can vary slightly by time of year. Direct Air public charter flights to Punta Gorda, Florida are winter seasonal only. Carrier Route Weekly Flights American ORD 40 Delta DTW 68 Allegiant MCO 4 PIE 4 Direct Air PGD 4 Toledo will endure a significant loss of capacity and flights in November of 2010 when Delta Air Lines ends existing high frequency Detroit service and substitutes twice daily regional jet flights to Minneapolis. This change by Delta will result in a loss of 39% of weekly Delta seat capacity and a 59% loss of weekly flight arrivals and departures. It will also mean that Toledo has no hub service available for reasonable access to the eastern and southeastern United States. 11
This sudden and significant loss of flights and capacity is simply a repeat of what has happened in the Toledo market repeatedly over the past five years. 1,000,000 Toledo Annual Airlines Seats 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 877,237 905,422 845,175 704,459 613,952 513,557 405,802 295,210 100,000 0 2002 2003 2004 2005 2006 2007 2008 2009 The Toledo market has lost a staggering 66.3% of its airline seats in the period between 2002 and 2009. If the other incumbent airlines hold constant at 2009 capacity levels and the Delta reduction is accounted for then in 2011 Toledo annual airline seat capacity will be approximately 232,000. This is a further reduction from the 2009 level shown above of 21%. And Toledo s huge capacity losses are not typical of other airports in the region. CAPACITY COMPARISON: TOLEDO REGION AIRPORTS 2002 Seat 2009 Seat Change Airport Capacity Capacity Seats Percent Toledo 877,237 295,210-582,027-66.3% Kalamazoo 741,256 404,742-336,514-45.4% Akron 950,566 1,836,772 886,206 93.2% Cleveland 15,700,082 12,526,499-3,173,583-20.2% Columbus 9,215,339 8,415,831-799,508-8.7% Dayton 3,049,053 3,342,810 293,757 9.6% Detroit 42,768,024 35,951,537-6,816,487-15.9% Flint 981,375 1,297,225 315,850 32.2% Fort Wayne 873,444 763,991-109,453-12.5% Grand Rapids 2,968,062 2,381,769-586,293-19.8% Lansing 795,540 427,134-368,406-46.3% Saginaw 652,244 445,542-206,702-31.7% South Bend 1,192,361 852,530-339,831-28.5% Total 80,764,583 68,941,592-11,822,991-14.6% 12
Measured against other medium and large airports in the Toledo region, the Airport s loss of capacity is by far the largest. The group of airports as a whole incurred a 15% loss of seat capacity, again quite modest compared to the huge 66% loss at Toledo. Toledo s air service decline can also be seen in the number of carriers and routes offered. Three network airlines have abandoned Toledo in the past six years and five network carrier hub routes have been lost in that time as well. TOLEDO AIR SERVICE SEATS BY ROUTE SUMMARY: 2003-2009 Carrier Route 2003 2004 2005 2006 2007 2008 2009 American ORD 135,058 129,632 133,934 138,660 130,238 123,864 98,772 ATA MDW 121,108 138,002 1,122 Continental CLE 30,645 33,397 35,115 35,965 34,114 36,888 Delta ATL 145,145 130,505 125,920 95,734 64,290 11,550 CVG 239,712 233,535 242,209 128,440 96,335 57,380 Northwest (Delta) DTW 123,341 126,145 145,301 127,789 120,194 111,872 127,344 US Airways PIT 106,890 51,519 Allegiant Air SFB 3,000 63,930 43,740 37,200 36,600 PIE 1,430 22,080 24,900 31,050 US Airways abandoned Toledo Pittsburgh service in 2004. American Trans Air ended Chicago Midway service in early 2005 and Continental dropped Cleveland service in late 2008. Delta ended Atlanta and Cincinnati service in 2008 as well. This is a cumulative loss of over 400,000 annual seats (when each route was mature) flown by the three airlines that exited Toledo. At the same time Chicago ORD and Detroit hub routes, while retained, saw a cumulative reduction in annual seats offered of about 30,000 between 2004 and 2009. The Airport, thru hard recruiting work, was able in late 2005 to bring Allegiant Air to the market. Allegiant generated about 67,650 seats on two Florida leisure routes in 2009. The Airport has also recruited Direct Air to operate seasonal public charters to Punta Gorda, Florida. While these less than daily leisure services are welcome by the airport, they do not serve the fundamental and critical need of the Toledo region for network carrier access to the national transportation system. 13
The significant loss of airlines, hub routes and capacity would have an obvious negative impact on Toledo market traffic. 350,000 Annual Toledo Enplanements 300,000 250,000 200,000 150,000 322,718 296,634 301,252 232,871 100,000 189,434 166,554 50,000 125,518 91,885 0 2002 2003 2004 2005 2006 2007 2008 2009 Toledo enplanements have declined 71.5% since 2002. The declines track almost exactly with the annual reductions in capacity. Toledo s top twenty domestic market list is reflective of a typical Midwestern business center. Toledo s Top Twenty Domestic O&D Markets: 12 months ended 3/31/2010 Orlando Sanford St. Pete Chicago ORD Minneapolis Atlanta Los Angeles Orlando MCO St. Louis Dallas Phoenix Tampa TPA Las Vegas Denver New York La Guardia Washington D.C. DCA San Diego Boston San Francisco Baltimore Fort Lauderdale 3,680 5.0 3,180 4.4 2,730 3.7 2,700 3.7 2,680 3.7 2,480 3.4 2,310 3.2 2,170 3.0 2,050 2.8 2,040 2.8 1,970 2.7 1,950 2.7 1,700 2.3 1,650 2.3 1,540 2.1 1,510 2.1 1,480 2.0 14,160 33,630 29,040 19.4 O&D Passengers PDEW 39.8 46.1 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 14
The top two markets are those of Allegiant, with its high volume, low fare, less than daily service to select sun spots in Florida. The next four top markets are key national business centers. There then is a mix of business and leisure markets nationwide. Note that four of the top markets are on the east coast. The shift of Delta service in November to Minneapolis, coupled with the existing American service to Chicago ORD, means Toledo will have no practical air service access to the east coast. 15
Toledo Domestic Average Fares Toledo average fares are significantly higher than at the four nearest airports that draw off the bulk of Toledo s leaked traffic. The vast majority of Toledo traffic leakage is to Detroit, while Cleveland, Columbus and Dayton draw off smaller percentages. For purposes of calculating Toledo average fares the Allegiant Air traffic and revenue was removed. The Airport believes that the Allegiant Air service, being strictly to two Florida sun spots and currently constituting a significant (39%) share of over all Airport traffic, distorts the comparison of what typical travelers pay at each airport. While the other four airports certainly have low fare carriers, they all function in somewhat of a network capacity at those four airports. Comparison of Domestic Average Fare: Toledo with Cleveland, Columbus, Dayton and Detroit: Years 2005 2009 Cleveland Columbus Toledo Dayton Detroit $200 $196 $193 $190 $180 $179 $174 $170. $153 $137 $141 $136 $135 $151 $147 $146 $145 $148 $148 $140 $132 $157 $156 $154 $149 $143 $143 $135 $130 $160 $150 $140 $130 Average Fare $120 $110 2005 2006 2007 2008 2009 $100 Toledo average fares paid have soared in the past five years. In 2005 the Toledo average fare was less than $20 higher than the lowest competing airport fare (Columbus). By 2009 Toledo s average fare paid is some $50 to $63 higher than at the four nearby airports. This means on a round trip basis, including taxes and fees, Toledo average fares are $100 to $150 higher. 16
Toledo Airport undertook an extensive study of its pricing in April of 2010. The study revealed that Toledo travelers pay much higher fares than do passengers originating at Detroit, except in the two Allegiant markets of Orlando and St. Pete (Tampa). TOL Top 15 Domestic Markets vs. DTW Market Toledo Detroit Difference TOL Higher Rank City Avg Fare Avg Fare Dollars Percent 1 Orlando MCO & SFB) $77 $90 -$13.00-14.4% 2 Tampa/St. Pete (TPA & PIE) $74 $106 -$32.00-30.2% 3 Chicago ORD $122 $88 $34.00 38.6% 4 Atlanta $190 $118 $72.00 61.0% 5 Minneapolis $220 $213 $7.00 3.3% 6 Los Angeles LAX $201 $169 $32.00 18.9% 7 St Louis $124 $99 $25.00 25.3% 8 Dallas $214 $166 $48.00 28.9% 9 Phoenix $182 $148 $34.00 23.0% 10 Washington DC (DCA) $156 $120 $36.00 30.0% 11 Las Vegas $174 $136 $38.00 27.9% 12 Denver $188 $144 $44.00 30.6% 13 New York LGA $173 $111 $62.00 55.9% 14 San Diego $213 $174 $39.00 22.4% 15 Boston $210 $191 $19.00 9.9% Average fare of all carriers in both markets. Even when adjusted for just a Delta/Northwest vs Delta/Northwest comparison at the two airports, Toledo average fares paid were still significantly higher that at Detroit. TOL Top 15 Markets vs. DTW (Delta only) Market Toledo Detroit Difference TOL Higher Rank City Avg Fare Avg Fare Dollars Percent 1 Orlando MCO & SFB) $149 $95 $54.00 56.8% 2 Tampa/St. Pete (TPA & PIE) $145 $113 $32.00 28.3% 3 Chicago ORD $143 $84 $59.00 70.2% 4 Atlanta $179 $130 $49.00 37.7% 5 Minneapolis $238 $224 $14.00 6.3% 6 Los Angeles LAX $233 $185 $48.00 25.9% 7 St Louis $127 $104 $23.00 22.1% 8 Dallas $238 $164 $74.00 45.1% 9 Phoenix $187 $148 $39.00 26.4% 10 Washington DC (DCA) $149 $120 $29.00 24.2% 11 Las Vegas $196 $146 $50.00 34.2% 12 Denver $202 $147 $55.00 37.4% 13 New York LGA $168 $120 $48.00 40.0% 14 San Diego $194 $189 $5.00 2.6% 15 Boston $221 $198 $23.00 11.6% Average fare of Delta and Northwest in both markets. The Detroit Airport is only about 49 miles drive from downtown Toledo so pricing discrepancies of this magnitude most certainly fuel drive leakage of Toledo area traffic demand to Detroit. 17
Alternative Airports and Leakage Estimates The extensive Passenger Retention and True Passenger Market Size Study commissioned by the Airport and finished in April 2010 illustrates the huge traffic leakage at Toledo Express. The Toledo area is blessed with an excellent freeway system, which supports the city s role as a transportation hub. However, this fine road system also facilitates air travel demand leakage to other airports as Toledo s air service has suffered the capacity declines, service declines and fare increases this document has illustrated. The drive distances and times shown are from Toledo City Hall to the respective airports shown and are per MapQuest.com. ALTERNATIVE AIRPORT DRIVE DISTANCES Airport Road Distance Drive Time Leakage Percentage Detroit 49 :51 82.8% Cleveland 104 1:48 4.0% Lansing 126 2:05 0.8% Dayton 143 2:25 1.6% Columbus 146 2:30 3.2% Total Leakage 92.4% 18
Traffic Leakage Details The extensive Passenger Retention Study and True Passenger Market Size Analysis completed in April 2010 reached the following conclusions about Toledo traffic demand and leakage; The Toledo catchment area produced an estimated 2.2 million annual O&D passengers, an average of 3,039 PDEW. The 2.2 million catchment area annual O&D generate an estimated $391.5 million dollars in annual airline revenue. Only 7.6% of Toledo catchment area passengers use Toledo Express Airport. 82.8% of Toledo catchment area passengers use Detroit Metro Airport. The Southeast and West regions of the US comprise 43% of catchment area traffic. Delta/Northwest carries 57% of Toledo catchment area traffic, Southwest has 9%, American 8%, US Airways 6% and Spirit 4%. The top five traffic market pairs are; - Orlando, with an estimated 117,457 annual O&D or 160.9 PDEW - Washington/Baltimore, with an estimated 108,843 annual O&D or 149.1 PDEW - Tampa/St Pete, with an estimated 94,389 annual O&D or 129.3 PDEW - South Florida (FLL/MIA/PBI), with an estimated 89,571 annual O&D or 122.7 PDEW - St. Louis, with an estimated 87,308 annual O&D or 119.6 PDEW The study analysis determined the following detailed breakdown of Toledo catchment area traffic leakage by airport and carrier type. Originating Airport For Toledo Area Passengers True Market with LCC Adjustment Calendar Year 2009 Rank Airport LCC Network Total Paxs PDEW Share 1 Detroit, MI 342,389 1,494,203 1,836,592 2,515.9 82.8% 2 Toledo, OH 62,670 106,940 169,610 232.3 7.6% 3 Columbus, OH 16,911 54,349 71,260 97.6 3.2% 4 Cleveland, OH 5,073 37,100 42,173 57.8 1.9% 5 Dayton, OH 5,763 29,648 35,411 48.5 1.6% 6 Lansing, MI 0 17,441 17,441 23.9 0.8% 7 Other Airports 6,131 40,024 46,156 63.2 2.1% Total Toledo Area Passengers 438,937 1,779,706 2,218,643 3,039.2 100.0% 19
The top true passenger markets list for the Toledo catchment area is a combined list. It consolidates traffic to different airports that are in the same destination market, such as Baltimore, Regan National and Dulles being consolidated for Washington/Baltimore. Top 15 "True" Passenger Markets For Toledo Area Passengers Calendar Year 2009 Rank Airport Area Paxs Airport Paxs Share of Total PDEW 1 Orlando/Sanford 117,474 5.3% 160.9 Orlando, FL 83,844 71.4% Sanford, FL 33,630 28.6% 2 Washington/Baltimore 108,808 4.9% 149.1 Baltimore, MD 54,015 49.6% Washington National, DC 37,147 34.1% Washington Dulles, DC 17,646 16.2% 3 Tampa/St Petersburg 94,390 4.3% 129.3 Tampa, FL 65,350 55.6% St. Petersburg/Clearwater, FL 29,040 24.7% 4 South Florida 89,548 4.0% 122.7 Fort Lauderdale, FL 56,291 62.9% Miami, FL 23,328 26.1% West Palm Beach, FL 9,930 11.1% 5 St. Louis 87,301 3.9% 119.6 6 Los Angeles Basin 84,705 3.8% 116.0 Los Angeles, CA 64,561 76.2% Orange County, CA 14,636 17.3% Ontario, CA 3,546 4.2% Burbank, CA 1,962 2.3% 7 Atlanta 82,322 3.7% 112.8 8 New York/Newark 80,032 3.6% 109.6 New York La Guardia, NY 46,488 58.1% New York Newark, NJ 25,924 32.4% New York J F Kennedy, NY 7,620 9.5% 9 Minneapolis/St Paul 73,038 3.3% 100.1 10 Chicago 71,092 3.2% 97.4 Chicago O'Hare, IL 63,134 88.8% Chicago Midway, IL 7,958 11.2% 11 Dallas/Fort Worth 67,949 3.1% 93.1 Dallas/Fort Worth, TX 48,457 71.3% Dallas Love Field, TX 19,492 28.7% 12 Denver 56,772 2.6% 77.8 13 Phoenix/Mesa 53,868 2.4% 73.8 Phoenix, AZ 53,868 100.0% Mesa Gateway, AZ 0 0.0% 14 Las Vegas 50,693 2.3% 69.4 15 San Francisco Bay Area 49,116 2.2% 67.3 San Francisco, CA 31,473 64.1% San Jose, CA 11,712 23.8% Oakland, CA 5,931 12.1% Total Toledo Area Passengers 2,218,643 3,039 This list illustrates the significant passenger traffic volume that the Toledo catchment area is generating for specific domestic destinations. 20
However, actual traffic capture rates for Toledo Express Airport are extremely weak, with the exception of Orlando and Tampa, which have Allegiant service from Toledo and Chicago ORD, where American Eagle has service from Toledo. TOP TOLEDO CATCHMENT AREA MARKETS & SHARE AMONG REGIONAL AIRPORTS Detroit Toledo Cleveland Columbus Dayton Airport O&D Share O&D Share O&D Share O&D Share O&D Share STL 80,170 91.8% 2,680 3.1% 540 0.6% 0 0.0% 3,911 4.5% MCO/SFB 75,488 64.3% 36,330 30.9% 1,950 1.7% 870 0.7% 2,836 2.4% ATL 69,782 84.8% 3,180 3.9% 2,580 3.1% 0 0.0% 6,779 8.2% MSP 61,891 84.7% 3,680 5.0% 1,160 1.6% 110 0.2% 6,198 8.5% TPA/PIE 54,138 57.4% 31,210 33.1% 820 0.9% 2,160 2.3% 6,062 6.4% LAX 57,446 89.0% 2,730 4.2% 1,960 3.0% 70 0.1% 2,354 3.6% ORD 44,284 70.1% 14,190 22.4% 1,620 2.6% 440 0.8% 3,070 4.9% DEN 47,184 83.1% 2,040 3.6% 1,350 2.4% 400 0.7% 5,758 10.1% FLL 52,043 92.5% 1,480 2.6% 190 0.3% 2,460 4.6% 2,178 3.9% BWI 44,562 82.5% 1,510 2.8% 2,040 3.6% 940 1.7% 3,443 6.4% PHX 46,943 87.1% 2,310 4.3% 430 0.8% 80 0.2% 3,246 6.0% LAS 46,440 91.6% 2,050 4.0% 640 1.3% 0 0.0% 1,482 2.9% DFW 35,662 73.6% 2,480 5.1% 1,160 2.4% 10 0.0% 9,155 18.9% LGA 41,972 90.3% 1,970 4.2% 540 1.2% 330 0.8% 1,997 4.3% SAN 37,057 88.0% 1,700 4.0% 1,330 3.2% 0 0.0% 1,711 4.1% It is interesting to note that Toledo Express Airport s share of catchment area true traffic demand is in the 20% to 30% range in market instances where Toledo has nonstop service, whereas Toledo leakage rates to other airports are extremely high in all other market examples. In summary, the devastating loss of airline capacity and air service, combined with market fares that are well above those available at nearby airports, have combined to create extensive leakage of catchment area traffic from the Toledo area to other nearby airports. 21
Air Service Needs and Deficiencies In 2004 Toledo had six airlines serving seven hub routes and just over 300,000 enplanements were generated that year. In 2009 Toledo has only two network carriers serving two hubs and limited less than daily service to three Florida cities (one being seasonal public charters). Just about 92,000 enplanements were generated. A recent extensive airfare analysis undertaken by the Airport has demonstrated that airfare pricing is non competitive in many instances. A recent extensive leakage analysis undertaken by the Airport shows conclusively that only 7.6% of Toledo catchment area true traffic demand is using the local airport. And now, Delta Air Lines, owing to the retirement of its SF-340 turboprop fleet, is shifting Toledo service from the nearby Detroit hub to the westbound Minneapolis hub. Because the other network carrier at Toledo (American Eagle) operates to Chicago ORD, this means that effective in November Toledo will have no practical air service options to the east coast. The Department will be hard pressed to find an example of a domestic city that has lost so much air service in such a short time. The Airport is not aware of any example that equates to what Toledo has lost in the past few years. For a business center in northwest Ohio, this combination of circumstances is devastating to efforts to retain local business and industry and recruit new companies. Like the entire nation and especially the upper Midwest, Toledo has suffered from the effects of the recent recession. As is illustrated in the community profile section of this document, Toledo is working hard to diversify its economy toward more balance between traditional manufacturing and other forms of commerce, including green energy, health care and education. As the Department well knows, local air service is an important element in business location decisions, be it retention or expansion of an existing local firm or recruitment of new industry. In either case jobs are at stake and jobs are critical to the economic recovery of the Toledo area. 22
Local Air Service Development Efforts The Toledo Express Airport has been extremely active in Air Service Development for many years. Below is a summary of activities during the past five years; 2006 Attended Jumpstart & Network Conferences and made presentations to seven airlines Applied for and was awarded Small Community Grant for New York City service Phone conference call with jetblue and meeting with ExpressJet Airlines regarding SCASD grant option for New York City Remained in contact with incumbent carriers American, Northwest, Delta and Allegiant regarding route performance and promotional opportunities 2007 Met with both American 2/14/07 and jetblue 3/5/07 to discuss New York City option Attended both Network and Jumpstart Conferences. Made presentations to six airlines Remained in contact with incumbent carriers American, Northwest, Delta and Allegiant regarding route performance and promotional opportunities 2008 Attended Allegiant Air Conference in Las Vegas Attended Jumpstart & Network Conferences and made presentations to eight airlines. Met with or conference called with nine airlines during the year, including incumbents Reviewed new service options with jetblue, SkyKing, Continental Express, AirTran, Spirit and SkyBus, including New York City. Remained in contact with incumbent carriers American, Northwest, Delta and Allegiant regarding route performance and promotional opportunities Established airport supported ground handling function. The Airport purchased ground equipment and secured a ground handling vendor to offer low cost ground handling options to incumbent and new entrant airlines 2009 Attended Allegiant Conference in Las Vegas Secured winter seasonal public charter service by Direct Air service to Punta Gorda Attended both Jumpstart & Network Conferences. Made presentations to nine airlines 23
Recruited Air Azul/Jet America to operate 3 times weekly from Toledo to Newark However the carrier failed to startup any of its routes Remained in contact with incumbent carriers American, Northwest/Delta and Allegiant regarding route performance and promotional opportunities 2010 Attended Allegiant Conference in Las Vegas Attended Jumpstart & Network Conferences and made presentations to eight airlines Meetings or conference calls with jetblue, Direct Air, and American Eagle regarding New York option Commissioned a study of true market demand leakage; the study concluded that Toledo is only capturing 7.6% of its true traffic demand Commissioned a study of Toledo published air fares and airfare pricing in comparison to peer airports. Study concluded that Toledo average fares paid are well above those at nearby airports Toledo s Previous Grant Award Toledo Express Airport applied for and received a Small Community Air Service Development Grant in 2005. This Grant was specifically aimed at providing revenue guarantee and supporting promotional funding for new nonstop service to New York City. The Airport aggressively recruited numerous airlines to consider Toledo New York City service, including; jetblue, Continental, Delta, American and a variety of less than daily or low cost carriers. Service was even announced with one less than daily carrier in 2008. However, that carrier chose to reverse its plans and ended up not starting Toledo New York City flights. Toledo s efforts with other carriers ran into strategy and tactical changes at one carrier or the other. Also changes in the rules and limitations of slot access at key New York City airports that occurred after the Grant was awarded compromised the ability of some carriers to react to the Toledo New York City option, even when they wanted to seriously consider it. This Grant application is for marketing and promotional funding to help the Airport market its existing services and reverse traffic leakage to other airports. It has no revenue guarantee element and is not focused on any one route or carrier. 24
Detailed Explanation of Proposal Toledo Express Airport has suffered a devastating loss of air service capacity, airline options and route options and has seen its average fares paid soar well above the averages at nearby airports. Now incumbent Delta Air Lines intends to drop high frequency Detroit service and replace it with twice daily regional jet flights to Minneapolis, depriving Toledo of any practical air service option for the east coast. The Airport has undertaken considerable study of its leakage metrics and its airfare pricing challenges. The Airport has, of its own volition, established a low cost ground handling option for use by its incumbent carriers and any prospective new entrant airlines. The Airport has left absolutely no stone unturned in efforts to recruit new air service, from both its incumbent carriers and from possible new entrants. And yet Airport traffic continues to decline. The Airport and its partners believe that some aspects of Toledo Express Airport air service, even as it stands today, are a good value proposition for consumers looking for a hassle free and low cost (when the total cost of travel, both in dollars and time, is considered) air service option. The Airport s comprehensive airport infrastructure and ground handling package, coupled with generous waivers and incentives for new air service, is designed to assist its incumbent airlines in retaining and growing service and to help with the recruitment of new air service from new entrant carriers. One key piece is missing. The Airport and its partners, in these difficult economic times, do not have the large scale and extended run marketing and promotional funding needed to market and promote remaining air service and support any new service that is recruited. This Grant will create that missing key piece. Grant funding, both from the Department and from the local match, will enable the Airport to project its value as an air service option to the general public on a consistent basis. This will draw traffic back to the airport and begin the long process of rebuilding frequency and capacity service options. Both incumbent and prospective new entrant airlines will benefit as will the traveling public. 25
Specifically the Toledo Express Airport and its partners will use Grant funding and local matching funding to; Market the positive and competitive aspects of Toledo Express Airport air service. The Airport does have competitive pricing and service in some markets. Continue to stress the airport s convenience and hassle free air travel experience. Deliver the marketing message on multiple media venues and over an extended timeframe, with periodic adjustments to message and venue as feedback loops suggest. Coordinate carrier and service specific marketing and advertising efforts with incumbent carriers, ensuring that their advertising protocols and formats are properly included. This coordination will also include constant communication about service or pricing changes. Toledo Express Airport has long standing and excellent relationships with its airline partners. The Airport and its partners will use all traditional and some non-traditional means to market the rebranded airport and its service. Traditional media such as billboards, radio and radio giveaway promotions, newspaper and TV will be supplemented by more cutting edge, and in some cases lower cost, venues like Facebook, twitter and other internet driven options. The Airport has in the past and will expand with Grant funding the use of sports sponsorships; Toledo has several minor league sports franchises that have well attended sporting events. The overall marketing and promotional program will run in waves and in multiple media venues, with the Port Authority in-house professional marketing staff working closely with the airport. 26
Extenuating Factors Affecting Toledo Air Service There are numerous extenuating factors that have adversely impacted Toledo air service. The pending substitution of high frequency Detroit service (an Omni directional hub for Toledo) with westbound service to Minneapolis is happening because Delta is retiring its turboprop SF-340 fleet. The SF-340 is perfect for the short hop from Toledo to Detroit so, in effect, the route substitution is the cause of a fleet retirement decision that has nothing to do with Toledo market performance. The route substitution does, however, deprive Toledo of all practical eastbound air service access. Another example of an extenuating factor impacting Toledo s air service situation is the 2006 Grant for improved east bound access via New York City. The Airport worked very hard to make new air service from this Grant a reality. Strategic circumstances at various candidate airlines and changes in the rules and limitations of slot access at key New York City airports that occurred after the Grant was awarded compromised the ability of some carriers to react to the Toledo New York City option, even when they wanted to seriously consider it. The Delta / Northwest merger was announced in early 2008. Delta eliminated all service at Toledo in that timeframe. Atlanta service was dropped in May of 2008 and Cincinnati flights ended in September. Absent the merger the Airport feels Delta would have retained either Atlanta or Cincinnati flights. So the merger cost Toledo a hub route and an airline. 27
A Strategic Plan for Success The Toledo Express Airport and its air service development partners see clearly that air service is an essential element in a healthy economy. Despite huge losses in airline options, route options and seat capacity, the Airport and its partners continue aggressively working to bring new air service, by incumbents or new entrants to the market. The Airport and its partners understand that it is essential to stabilize Toledo Express Airport air service and reverse the leakage of traffic. This will lay the foundation for successful recruitment of new air service and begin the long process of returning to traffic and service growth. Public / Private Partnership The Public / Private Partnership supporting this Grant application includes; The Toledo Lucas County Port Authority and the Toledo Express Airport The Authority is the legal sponsor of the application and oversees the Airport. The Authority will be the recipient of all Grant related activities. Lucas County Improvement Corporation The LCIC and its member agencies provide economic development assistance for Lucas County. Regional Growth Partnership The Regional Growth Partnership (RGP) is a private-sector-driven and funded economic development company, focused to meet the needs of clients in a confidential, innovative and time-sensitive fashion. The Toledo Chamber of Commerce The Chamber is an active supporter of the Airport. The City of Toledo - The City is an active supporter of the Airport. Lucas County The County is a active supporter of the Airport. 28
The University of Toledo The University, the largest in northwest Ohio, recognizes the critical need for good and affordable air service that supports the ability of the University to recruit and retain staff and students. Northwestern Ohio Regional Economic Development Association NORED is an association of twelve counties in Northwest Ohio. Since 1988 NORED has been assisting the business growth of Northwest Ohio. The charter members of NORED include Defiance, Erie, Fulton, Hancock, Henry, Lucas, Ottawa, Paulding, Sandusky, Seneca, Williams, and Wood Counties. At large board membership also includes private sector and public sector representatives with a stake in the economy of Northwest Ohio. The association has been very effective in developing a unified voice among its members and impacting decisions at the state capitol and in Washington D.C. Quick Flight Aviation Quick Flight provides airline ground handling services at fifteen airports nationwide, including at Toledo. Grant Funding Grant Funding Allocation The Airport requests in this Grant document $200,000 in Grant funding for the purpose of supporting the marketing and promotion of existing and potentially new air service at the Toledo Express Airport. The Grant funding of $200,000 would be supported by $100,000 in local cash match funding for a total Grant funding of $300,000. GRANT FUNDING BREAKDOWN Toledo Toledo Allocation DOT Share DOT Percent Share Airport Percent Marketing & Promotion $300,000 $200,000 67% $100,000 33% The Airport and its partners will provide 33% of the total Grant funding while the Department will provide 67%. The Airport understands that all Grant related expenditures will be paid in that formula. The Airport and its partners understand that the Small Community Program is a reimbursable program therefore communities are required to make advance payments for funds expended in association with the project implementation under the program and then seek reimbursement. 29
Target Audience and Marketing Plan The Toledo Express Airport has an extensive list of email contacts for users and potential users of the Airport. The list has a great variety, both in terms of user location as well as user travel profile. The Airport is used by both business and leisure passengers and by both local residents and visitors from all over the country and the world. Using the variety of the existing contact list as a guide, the comprehensive marketing and promotional program the Airport will undertake with Grant funding will have to be aimed at consumers with a broad variety of air travel needs and preferences. For local business travelers and corporate travel departments the Airport will; Build upon its existing relationships with major travel generators. The Grant funded media message for local business travelers and Corporate Travel Planners will identify and emphasize elements of Toledo air service that are competitive with other travel options. Toledo Airport convenience and hassle free features will also be emphasized. The message to local businesses will also have a home town appeal aspect, reminding local businesses that local air service is critical to the overall economic health of the region. A variety of media venues will be used. For local leisure travelers the Airport will; Emphasize elements of current Airport air service that are competitive, for example the Allegiant and public charter service to Florida. Emphasize the family friendly nature of the Airport as compared to alternative airports. One phenomena of smaller airports that experience large scale leakage due to service reductions and non-competitive pricing is that some consumers stop checking the local airport and actually automatically begin to use a distant airport (and perhaps low cost carrier) based on a perception that it is always cheaper. Defeating this perception and 30
re-introducing the concept of always check local first is often a long term marketing and promotional process. Marketing to these target audiences in the Toledo market will require a multi media approach and an extended and phased approach. The Airport has worked in the past with several advertising firms, including Ace Advertising, Communica Public Relations and Allied Media. The funding made possible by the Grant will enable the Port Authority s in-house marketing team to professionally manage the marketing program. With this professional support a media program will be designed that reaches out to the target markets the Airport has identified. The marketing program will be budgeted to run for an extended period. A feedback loop of evaluation of the success or failure level of each aspect of the program will be installed and closely monitored. The Authority and Airport recognize the importance of ensuring that media spending is correctly targeted and effective in message and comprehension. If feedback data suggests a shift in message or medium the Airport will adjust the program as needed. 31
Timeline, Milestones and Monitoring The timeline for implementation of the marketing and promotional programs outlined in this application are driven by the timing of Department award of Grant. Below is a timeline sequence based on fourth quarter 2010 Grant award. The Airport envisions a 12-18 month Grant funded marketing program. Date Aug, 2010 Sept, 2010 Q4 2010 Q4 2010 Q1 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Event Grant Application Letters of support Receive Grant Award Plan initial marketing effort Begin marketing and promotional efforts Begin quarterly DOT Grant status reports Prepare summer 2011 campaign, with appropriate shifts in emphasis from initial program Prepare Fall 2011 campaign, with appropriate shifts in emphasis from initial program Prepare winter 2011 campaign, with appropriate shifts in emphasis from initial program Repeat cycle steps listed above from first year The timeline shown is based on an assumption of a fourth quarter 2010 Grant award. Should award be sooner or later than fourth quarter the timeline would be adjusted accordingly. The timeline shown is representative of how a marketing program would unfold; exact timing of each element may change. Toledo Express Airport Grant Implementation Timeline Ongoing Efforts Review initial feedback on campaign from all avaiable sources File quarterly reports with DOT on Grant Program status Continue recruitment of new air service from both incumbent and new entrant carriers Performance Measures Marketing and promotional campaigns always face the difficult tasks of measuring effectiveness. While it is easier to measure if an ad or promotion was seen or heard it is harder to determine if behavior was influenced or changed. With Toledo Express Airport traffic down significantly and facing further disruption of service pattern and capacity, any increase or even stabilization of traffic demand post marketing program implementation will be credited to the program. The Airport will deploy all means at its disposal to track the effectiveness of the overall marketing campaign and, to the extent possible, individual components of the campaign. 32
Financial Controls and Program Oversight The legal sponsor of this application is Paul Toth, President and CEO of the Toledo Lucas County Port Authority. Mr. Toth and his staff have ample experience with government grants and the administration of Grant funding. Mr. Toth and his staff will manage the implementation of this Grant. This will include; Timely filing of all quarterly Grant status update reports with the Department. Negotiation and attainment of all agreements with prospective media vendors and other companies that will support the marketing and promotional plan. Management of the implementation of Grant supported marketing efforts. Responsibility for regular review of the Plan and its results by all parties involved in Plan creation and implementation. Review of and management of Plan changes based upon regular performance reviews of Grant supported efforts to ensure program success. Approval of all expenditures of Grant funding, in close coordination with the Department and Grant program stakeholders. Return on Investment Toledo Express Airport is currently only capturing an estimated 7.6% of the true traffic demand of its catchment area. True catchment area demand is estimated at 2.2 annual O&D passenger trips. This means 1% of catchment demand is 22,200 O&D and 10% is 222,000 O&D. Therefore even a modest 5% shift in Airport traffic post implementation will result in 111,000 new O&D. If all Program funding was expended to get this shift the cost per passenger would be a few dollars. A study in 2004 indicated that each Airport passenger has a value of $50 to the airport and local economy in direct, indirect and induced economic impact. Thus each 1% of recapture is worth at least $1.11 million in economic impact (22,200 X $50). 33
Use of Local and Department Funds The Port Authority and designated legal sponsor will ensure that both Department and local funds associated with this project are expended in a manner consistent with the Grant intention and the contract between the Department and the Airport. This is a Grant for marketing and promotions with a clear target market and established methods that will be utilized with Grand funds. Marketing Program Self Sufficiency The Airport and its partners envision this Grant funded marketing program to run for a twelve month to eighteen month period. The Airport and its partners are prepared to fund more modest message reinforcement marketing efforts after the Program ends. Changes in air service patterns, both at Toledo Express and surrounding airports, will affect both the path of the Marketing program and the scope and tactics of post Program reinforcement marketing. Alternate Timeline and Plan The Airport and its partners recognize the volatility of the airline industry and as this document shows have firsthand experience with the results of industry dislocations. Every effort will be made to keep this Grant on track and successful in its intent and timeline. Legal Sponsor The Legal Sponsor of this Grant application is the Toledo Lucas County Port Authority. The designated Legal Sponsor contact is: Paul Toth, CM, CEO and President Toledo Lucas County Port Authority One Maritime Plaza, Suite 700 Toledo, Ohio 43604 Phone 419 243 8251 Fax 419 243 1835 Email: ptoth@toledoportauthority.org 34
Toledo Express Airport The Toledo Express Airport is owned by the city of Toledo and operated by the Toledo-Lucas County Port Authority. It is a publicly operated airport located adjacent Interstate I-80/90 about sixteen miles west of downtown Toledo. The Airport has a 10,600 foot primary runway and a 5,599 foot cross wind runway. The Airport has a control tower and full instrument approaches. The Airport hosts three airlines and public charter flights. BAX Global operates an international cargo hub at the Airport. Numerous major local corporations have Flight Department facilities on the field. The 180 th Fighter Wing of the Ohio National Guard is based at Toledo Express. Fixed Base Operations are available for general aviation, corporate aircraft and transient flights. Several flights schools use the airport. The Airport has an annual economic impact of $640 million on northwest Ohio. The Aviation businesses, on-airport operations and construction, visitors arriving in the area via the Airport and the associated economic impact multiplier effects create more 7,500 jobs. A Comprehensive Facilities & Handling Program Toledo Express Airport works with its incumbent airlines and prospective new entrant carriers to reduce the overall cost of Airport operations. It is an issue that cost conscious airlines want airports to address and Toledo Express is on the forefront of attacking this challenging issue. The Airport has purchased its own ground handling equipment and contracted with a well known ground handling staffing company to offer airlines a complete above and below wing service package at very reasonable rates. Currently Allegiant Air and public charter operator Direct Air use these services at Toledo Express. Discussions are ongoing with other incumbent airlines to use this Airport infrastructure and service to reduce their costs as well. All prospective new entrant airlines are offered the use of this ground handling service to easy startup and lower carrier operating costs. 35
The Airport also has an aggressive incentive package for new airlines or incumbent carriers that add a new route. The incentive package consists of; All Airport fees and rentals associated with the new service are waived for the first two years. If the size and scale of the new service is sufficient the Airport will hire a dedicated part time Sales and Marketing representative to work directly for the Airline in the Toledo area. Local marketing funding will be assigned to the new carrier or service, the amount will depend on the scale and scope of the new service. Above and below wing complete turn-key ground handling to the Airline s specifications will be available at much reduced rates on a graduated scale the first and second year. Long term rates then will apply but those are at extremely competitive rates. 36
COMMUNITY PROFILE The City of Toledo The city of Toledo is located in, and is the county seat of Lucas County in northwestern Ohio, approximately 75 miles east of the Ohio-Indiana border. The City covers an area of 84 square miles and borders on Lake Erie to the east and the State of Michigan to the north. The City's population of 293,201 makes it the fourth largest city in Ohio. Toledo has a regional population of 2.2 million. Many cultural and recreational opportunities are available in the City. The Toledo Museum of Art, located within the City, is a privately endowed, nonprofit institution noted for the quality of its permanent collection and art education programs, as well as for its display of traveling exhibits. In 2001, the Museum of Art celebrated its 100th anniversary, completed a major renovation and restoration of its existing facilities and dedicated a new sculpture garden. The Toledo Zoo has received nation attention for its exhibitions. This child friendly zoo has many hands-on exhibits for the little ones, as well as carousal, a playground and various other activities that would interest children. This zoo is one of the largest of its kind in the Midwest. People travel from all over the Midwest, and even from the eastern seaboard, to experience this lovely zoo. Toledo owns and operated 144 parks covering 2,367 acres, and the Metropolitan Park District of the Toledo Area operates eight parks covering 6,879 acres in the County. Sailing, boating and fishing are common activities on Lake Erie and the Maumee River, which flows through the City. The City is also the home of the Toledo Mud Hens, a Triple- A minor league baseball team that is an affiliate of the Detroit Tigers and the Toledo Walleye Hockey Team, a member of the ECHL. Both teams play in downtown Toledo in new facilities - Fifth-Third Field and the Huntington Center, which opened in 2009. 37
Toledo Economic Overview The Toledo Express Airport Catchment Area (ACA) is home to almost 1.42 million people within a one hour drive of the Airport. In the last 15 years, the Toledo economy has added more than 16,000 new jobs, mostly in new trade and technology. The median family income in Toledo was more than $53,371 in 2010, but that income translated to the purchasing power of more than $56,537 due to the low cost of living in Toledo. The low cost of living is partially due to the extremely low cost of housing as Toledo s median home price in 2010 was just $60,000 which is $180,000 less than the national median. Toledo ACA residents spend an average of $6,200 on vacation each year. Since 1994, major international companies have invested more than $19.4 billion in new industry in Toledo. The Big Three automakers all have factories in metropolitan Toledo. The city is home to three Fortune 500 companies: Dana Corporation, Owens Corning, and Owens-Illinois. Toledo is quickly becoming one of the country s premier freight terminals, with BAX Global s air freight hub, along with ground hubs for both UPS and FedEx, making Toledo the 15th busiest cargo center in America. CSX recently broke ground on a multi-million dollar intermodal complex 40 miles south of Toledo. 38
What s New in Toledo The Toledo economy is getting stronger. Significant local capital investments are being made right now by First Solar and local auto factories. And the ongoing transition from traditional manufacturing to high-tech manufacturing, education and health-care and renewable energy sectors continues to gain strength. Solar Panel Manufacturing Toledo is gaining national prominence as one of the forerunners of the solar industry. Building on Toledo s traditional glass manufacturing infrastructure through Owens Corning, Toledo is now one of the nation s major producers of solar energy. First Solar Corporation is the largest solar panel manufacturer in the U.S. On August 20, 2010, a $44 million solar farm was dedicated by First Solar, that even on overcast days can produce power for 4,500 houses - an amount that doubles on sunny days. The solar farm has 159,200 solar panels and eight power stations housing transformers and other equipment and next to the Perrysburg solar panel factory. Other solar manufacturing support companies and additional solar panel companies are evaluating Toledo for expansion. The University of Toledo Solar Research Lab came about through the school s Science, Technology and Innovation Enterprises initiative. It is bringing together world-class researchers, venture capitalists, entrepreneurs and public-sector investors to foster and grow a new industry cluster based upon alternative energy. The University selected thin-film photovoltaics as an area of research focus in 2001 and worked to build expertise, laboratories and recognition in this area. Funding to jumpstart the region's alternative energy cluster was provided by the National Science Foundation's Partnership in Innovation Program in 2002. The NSF was so impressed by the University's accomplishments, that UT was asked to host the first national workshop on this NSF program. Auto and auto part manufacturing is on the rebound. Top officials with the state of Ohio confirmed earlier this year that Chrysler Group LLC is in discussions to expand its operations in Toledo, adding hundreds of new jobs. Chrysler plans to expand sales of Jeepbranded vehicles as part of a global effort to increase overall sales. 39
GM's Defiance Foundry received more than $170 million in investments from the automaker, and the award-winning Toledo Powertrain plant is about to become the company's only North American source of a new transmission that will go into GM's new smaller cars. Toledo Powertrain will begin building a six-speed front-wheel-drive automatic transmission that will be used in as many as seven brand-new or redesigned vehicles, including the new Chevrolet Cruze. The new line and the expected 600 jobs that will go with it complements one that now builds fuel-efficient six-speed rear-wheel-drive transmissions for high-volume vehicles including the Chevy Silverado pickup and Chevy Tahoe sport utility vehicle. And it means that the Toledo plant, as well as the Defiance Foundry, will manufacture critical components for high-volume GM vehicles of all sizes, providing job security more than any single product could. More than one hundred recently returning employees who had previously been laid off will be assigned to the current rear-wheel-drive line, and an additional one hundred will start ramping up the upcoming front-wheel-drive line, plant officials said. All remaining laid-off employees are expected to return by the end of the year, which could result in the first off-the-street hiring the Toledo plant has had in years. Multi modal logistics and distribution (air/land/sea): Toledo Express Airport serves as a cargo hub for BAX Global. The Port of Toledo has modern intermodal transloading facilities and warehousing facilities. Toledo sits within a day s drive of almost half of U.S. and Canadian industrial markets and over 100 trucking companies have warehousing and transfer facilities in the Toledo area. Toledo is also the fifth largest freight rail hub in the U.S. 40
Firm # of Employees ProMedica Health System 9,810 University of Toledo & Hospital 8,300 Mercy Health Partners 6,675 Bowling Green State University 5,400 Toledo City Schools 4,554 Lucas County 3,934 Kroger 2,747 City of Toledo 2,745 Jeep/Daimler Chrysler 2,261 Sauder Woodworking 2,354 Wal-Mart 2,320 State of Ohio 2,286 General Motors/Powertrain 2,112 United Parcel Service 2,108 The Andersons 1,766 Owens Technical College 1,750 HCR Manor Care 1,750 Meijer 1,721 Toledo Machine/Daimler Chrysler 1,600 Owens Corning 950 Owens-Illinois 723 Dana Corporation 850 CSX Corporation 775 BAX Global 770 Lear Corporation 750 First Solar 700 Major Employers in the Toledo area Source: Toledo Regional Growth Partnership, Jan. 2010 41
Four Fortune 1000 Companies are Headquartered in the Toledo MSA, While 36 Fortune 500 Companies Have Significant Operations in the Area 2010 Fortune 100 Companies Headquartered in the Toledo MSA (with rank) Owens Illinois (322) Dana Holding (398) Owens Corning (432) Cooper Tire (707) 2010 Fortune 500 Firms in Northwest Ohio (with rank; excluding retail operations/facilities) General Electric 4 Sunoco - 78 CSX 259 AT&T 7 Johnson Controls 83 Praxair 262 Ford Motor 8 Whirlpool - 136 Norfolk Southern 287 Berkshire Hathaway 11 Illinois Tool Works -169 Crown Holdings 289 General Motors 15 ConAgra Foods 178 Campbell Soup 299 IBM 20 First Energy - 179 Owens Illinois 322 Archer Daniels Midland 27 Aramark - 189 NiSource 336 Walgreens 32 Cummins - 218 Calpine 338 Pfizer, Inc. 40 Parker Hannifin - 230 KeyCorp 356 United Parcel Service 43 H.J. Heinz - 233 Newell Rubbermaid 373 Fed Ex 60 Lear - 242 Dana Holding 398 Honeywell International 74 Fifth Third Bancorp - 248 Owens Corning 432 Select Company Profiles Promedica Health Systems ProMedica Health System, a locally owned, not-for-profit health care organization, was formed in Toledo, Ohio, in 1986. Since its inception, ProMedica has grown into one of the nation's most integrated health systems. ProMedica is comprised of over 70 corporations and joint ventures, serving 27 counties throughout northwest and west central Ohio, and southeast Michigan. It is comprised of ten hospitals and more than 283 sites, employing over 15,000 employees. More than 2.5 million patients are served by ProMedica annually and are cared for by more than 2,900 physicians 42
Owens Corning Headquartered in Toledo, Owens Corning invented glass fiber, and glass fiber insulation, over 50 years ago. Today, the company has become a leading home building products company. Owens Corning is also the world's leading producer of glass fiber materials used in composites. Owens Corning is a global company with operation and partnerships around the world. Jeep/Daimler Chrysler Jeep/Daimler Chrysler s Toledo Complex has operated as an automobile assembly plant since 1910. The Toledo complex has assembled Jeeps since the 1940s. The Toledo South Assembly Plant is the original Jeep CJ assembly factory. It was rebuilt to manufacture the JK Wrangler for Jeep, starting on August 28, 2006. Now, basic assembly and painting of the Jeep Wrangler is done in the Parkway facility. The Toledo North Assembly Plant was opened in 2001 building the Jeep Liberty. The 2.14-million-square-foot plant sits on 200 acres. A third Chrysler plant is located in nearby Perrysburg, Ohio. Toledo Tourism The Toledo area (Lucas County) has 81 hotel and motel properties with 4,478 rooms. Hotel occupancy in 2009 was 43.9%. Average rent rate was $69.49. Since 2010 bookings are up 8%. The Toledo Mud Hens Baseball Club The Toledo Mud Hens Baseball Club, a Triple-A affiliate of the Detroit Tigers, plays at Fifth Third Field. This state-of-the-art 8,943 seat facility is located in the heart of downtown Toledo. The first row of infield seats is as close as 40 feet to first and third base and just eight inches above the playing field. Fans seated in the first row behind home plate are closer to the batter than the pitcher! Fifth Third Field also includes 28 private suites, three party suites available to rent, and 1,200 club level seats, which span from first base to third base. 43
The Toledo Zoo This world-renowned zoo is home to the world's first Hippoquarium, an underwater viewing area where patrons can watch the daily activity of a hippopotamus family. The zoo exhibits more than 5000 animals, including polar bears, elephants, cheetahs, snow leopards, orangutans, gray wolves, gorillas, African dogs and a variety of monkeys. The zoo also hosts a summer concert series (Bob Dylan, the Moody Blues and Sheryl Crow have all played here), and a other fun family events. Fort Meigs State Memorial Fort Meigs is the largest walled fortification in the United States. William Henry Harrison ordered his troops to build this fort, located on the south side of the Maumee River, in 1812, and it was the site of two important battles during the War of 1812. Restoration and archaeological excavation of the site began in the 1960s, and the project was completed in 1975. Toledo Botanic Gardens A museum for plants, Toledo Botanical Garden offers visitors the opportunity to discover and enjoy nature's beauty. With over 60 acres of display gardens and relevant plant collections, TBG is full of opportunities for exploration and reflection. Toledo Botanical Garden is the only botanical garden in the region, is free to the public and is visited by more than 120,000 people annually. Toledo Museum of Art This museum's main building holds pieces by Bearden, Cézanne, Degas, van Gogh, Matisse, Monet, Picasso and Rembrandt. Other parts of the museum campus include the Peristyle Concert Hall, the stunning Glass Pavilion, a beautiful sculpture garden, the Museum Café and the Museum Store, featuring Collector's Corner. Also part of the campus (and home to the museum's Art Reference Library) is the University of Toledo's Center for Visual Arts, an architecturally significant building designed by Frank Gehry. Toledo Walleye The Toledo Walleye is a professional ice hockey team and an affiliate of the Detroit Red Wings and Chicago Blackhawks. And as such, the team is not only a great source of community entertainment, but also a great source of pride for the Toledo region and its hockey fans. The team plays at the new $105 million dollar state-of-the-art Huntington Center located in downtown Toledo, Ohio. There are 20 private suites and 750 prestige club seats as well as a club-level lounge, a banquet facility, a team merchandise store and a modern scoreboard. 44
The Imagination Station This is a non-profit, hands-on science museum located on the riverfront in downtown Toledo, Ohio. The facility has over 300 exhibits for children of all ages, including the High Wire Cycle, a thrill ride that hovers over 20 feet above the ground, suspended on a 2-inch cable with a 275 pound counterweight that enables any person to defy gravity as well as a mock TV news studio, where. visitors can be the sports reporter reading a prepared script from a teleprompter. Willis B. Boyer Museum Ship In the shadow of the Toledo skyline, moored alongside the rolling landscape of International Park, a splash of history awaits visitors aboard the museum ship S.S. WILLIS B. BOYER. Upon her launching in 1911, the S.S. WILLIS B. BOYER, then called the COL. JAMES M. SCHOONMAKER was proclaimed to be The World s Largest Bulk Freighter. Maintaining her crown as Queen of the Lakes from July 1, 1911 to April 14, 1914, the SCHOONMAKER established multiple cargo records for iron ore, coal, and rye cargoes. Retiring in 1980, and opened as a museum in 1987, the S.S. WILLIS B. BOYER serves as a floating testament to Toledo s rich maritime heritage. Toledo Higher Education Numerous campus, thirteen in all, call the Toledo, Ohio area home and represent a large combined student body. Some of these colleges and universities include the University of Toledo and Bowling Green State University. University of Toledo The University of Toledo is a public university in Toledo, Ohio that currently has a student population of 23,336. The University of Toledo and the Medical University of Ohio merged July 2006 to form the third-largest public university operating budget in the state. The Main Campus features nine modern residence halls, a gothic bell tower, a Student Recreation Center, a state-of-the-art classroom center in one of our original buildings, Memorial Field House, opening fall 2008, and a football stadium and new Savage Hall basketball and athletic complex, set to open fall 2008. Health Science Campus is home to graduate health programs and the UT Medical Center, a Level 1 trauma center, offering innovative treatments for strokes and cancer found nowhere else in the state. The UT Medical Center, also features the new $5.8-million Orthopaedics Center. With such a large student body, a research-oriented faculty of 2,232 and numerous major athletic teams, the travel needs of this school are extensive. 45
Bowling Green State University Bowling Green State University is a public four-year institution located in Bowling Green, Ohio, about 20 miles south of Toledo, Ohio. The institution was granted a charter in 1910 by the State of Ohio as part of the Lowry bill. The campus is laid out in a rectangle roughly one and a half miles long and a mile wide and includes Science Research Complex and an Arts Village. BGSU has a student body of around 23,000, of which 3,000 are graduate students. BGSU offers over 200 undergraduate programs, as well as various master's and doctoral degrees. The school has a combined faculty and staff of 2,833. 46