Getting Your Share

July 26, 2010 - The 2010 Docket will now be reissued by July 30, 2010.

Program Background

The Small Community Air Service Development Grant Program has been in place since 2002, and is designed to provide monetary assistance to communities seeking to build or restore air service.

It's time for small communities across the US to assess whether they want to seek to gain some of these dollars. The program is not a panacea, and it isn't even well-funded. But it can offer some support to communities that have a legitimate air service deficiency, and existing potential to address it.

The key is to have a well-developed plan that addresses a well-defined air service shortfall. Boyd Group International stands ready to help communities in reviewing the real-world potential of winning a SCASD grant, and subsequently translating it into air service improvements.

Since the inception of the program in 2002, Boyd Group International has assisted its clients in capturing over 25% of the total grant dollars awarded - far more than any other consultant. The reason is that we are expert at identifying air service needs and at crafting grant applications that are more effective in winning dollars for our clients.

If It'll Work, Great. If Not, We'll Tell You Up Front. Our success is based on our unrivaled understanding of airline industry trends and realities. We understand what works and what does not. And we're not reticent to tell clients that a particular grant idea simply won't fly.

Applying for a grant, even if it is awarded, is a waste of time when from the start airline realities rule out the intended use. But lots of such applications are made each year - it's what happens when consultants lose sight of what the real objective is. Or, when the individual consultant is paid on commission, based on how many projects he can bring in, regardless of whether the grant makes sense. Boyd Group International does not do business that way.

In 2009, Boyd Group International declined a number of requests to prepare SCASD applications. The reason was that in our professional opinion we determined that the grant could not be successfully used, even if awarded. So, we passed.

The Program

Here's the nitty-gritty on the 2010SCASD program:

Funds Appropriated: This year, depending on what Congress does, it will be $6.5 to $7 million available. When the program was first envisioned, the funding was intended to be $35 million annually, but Congress never allocated anywhere near that amount. In 2009, DOT awarded about $6 million,

Match: The community is not officially required to provide a match, but in reality it must have financial skin in the game - at least a 20% match is the de facto minimum.

Who's Eligible: Any airport that was classified within the FAA's definition of a "small hub" or smaller in 1997 can file an application. (That is not a typo. The base year is 1997 - thirteen years ago. It's how the legislation was written, and the folks at the DOT are stuck with it.)

Uses of Funds: The initial intent was to allow communities to experiment with programs to enhance air service, and the program was written to encourage creativity. That much said, most the of the "creativity" has already been attempted over the last eight years. And most did not work. But, again, that was the intent of the program - to explore new approaches.

The Uses Are Clear. So, as of today, what works and what does not is clear. The SCASD grants that have provided the most concrete and fundamental results have been those that were intended to provide risk-offsets in the form of revenue guarantees for new or expanded service. Other uses that make great sense are in developing marketing programs for existing service, or focusing the dollars on specific activities to bolster ridership. The fundamental requirement is to have hard data projections to back up the application.

We urge our clients to stick to grant applications that shoot for concrete results and/or concrete new data that can assist in gaining new service. It's another reason we're more successful than other consultants in not only helping airports get grants, but in applying them to build improved service.

The Award Process. The DOT staff involved in the SCASD program are air service experts. They know the business, and they do their best to identify the applications that they feel have the most value. That much said, it is not beyond the realm of reality that there could be enormous pressure put on these people by various congressional entities or from the offices upstairs. They do their best based on the realities of Washington.

Up to 40 grants can be awarded, with a maximum of four in any one state. That doesn't mean that 40 will be awarded, however. Communities with prior awards are eligible for a new grant, as long as it is for a different objective. (In fact, over the years, Boyd Group International has assisted a number of its clients in winning two or more grants.)

How We Build A Compelling Application

Boyd Group International assists the client not just in writing an application, but in developing a clear strategy for winning the grant. We walk you through every step of the process.

We identify what makes your community different and more qualified for the money. DOT wants to see real results, so we dig deep, looking at the short-term and long-term benefits the grant will produce. For projects that entail incubating new service, the forecasting expertise of Boyd Group International brings provides clear, direct route and revenue proformas. We relate the benefits the grant will bring to the community, and how the award will satisfy the letter and the spirit of the intent of Congress in establishing the SCASD program.

One of our hallmarks is being direct and to the point. DOT wants data and information in a concise and quickly-determined format. They are not interested in whether Lewis & Clark came through town in 1803, and they have no intention of vacationing in your region. So, we concentrate on hard data, not pages of fluff.

Give Us A Call & We'll Discuss Your Objectives

Applications Unique To Your Community.  Each client is different. Therefore, each grant application crafted by Boyd Group International is prepared as a focused "battle plan" to convince the DOT of your airport's specific needs and specific planned use of the funds.

After we complete your application and it gets filed, what you won't  find on the DOT website are a dozen other applications that curiously look exactly like yours. Unlike some consultants, Boyd Group International does not cut corners by using trite, pre-designed cookie-cutter applications that all look alike and sometimes even have the same repeated text and format.

This grant application is all about showcasing your community, not the consultant who develops it. Your community is unlike any other, and that's the way Boyd Group International develops your SCASD grant application. Each one begins with a clean sheet and ends with a document that is unique to your airport.

Let's Talk. Please feel free to give Brian Siler at Boyd Group International a call. He can guide you on strategy and approach in regard to your SCASD application.

And, as we noted above, Brian will be up-front about the prospects not only of grant success, but also of the potential for the ultimate use of the funds if a grant is awarded.

Brian can be reached at 303 674 2000 or by e-mail Brian at aviationplanning.com.

Some Program Points

Here are some factors to consider for 2010's SCASD Program...

Knowing What Not To Do Is Important, Too. Things that really don't work - proven only too clearly by the wreckage of past awards - include programs to use the funds to subsidize airlines to offer lower fares for a period of time. Other grant awards were to buy ground equipment to be used supposedly to lower the cost for new or existing airlines. To some extent, that might help an airline's bottom line, but for an incumbent, it already has GSE  in place or a vendor doing its ground handling. As an incentive to attract new carriers, it has not proven to be a very effective option.

No Grants For Overlapping Service. The most successful single grant award (which we assisted with) - to Sarasota Bradenton International - attracted AirTran service to Atlanta in competition with Delta. This eventually cascaded into other low-fare service to a number of destinations - delivering over 1 million additional passengers to SRQ over the past five years.

But this is not to be repeated. The DOT has determined that no grants will be awarded to subsidize flights where another airline already operates. They are crystal clear on this point. Incredibly, some consultants still take clients down this road, assuring them with a wink-wink that the DOT will make an exception. They won't. (It's what happens when consultants get paid on a commission basis. Getting the project is more important than the client's needs.)

Airlines Don't Make Much Money In The Airline Business. Communities can't make any. There have been several grant applications actually intended to start airlines. The proven reality is that communities have no business getting into the airline business.

Related to this are grant applications each year requesting money to establish intra-state or intra-regional air service - a concept that has never worked. The economics are terrible, and the operators that may be eventually interested are not the type that most consumers are able to use. Not unsafe, by any means, but an independent airline with single-engine aircraft, no interline agreements, and minimal system retail exposure won't fix a community's lack of air service connectivity. 

This year, there will probably be several applications with a new twist on this failed concept - "community-supported" air service. This is where a community guarantees the cost of a regional airline flying one of its (excess) RJs to a specific hubsite, with the ridiculous promise that the community and the operator will share the profits. (?) It's an amateur and cockamamie scheme and should be avoided. If the market were profitable, the airline system would be there, and wouldn't be sharing any of the alleged profits. A grant from the feds won't change this. Run from this one - it's mostly a scheme to keep an otherwise-dormant RJ flying, at your expense.

There's Usually No Current Air Service For A Reason. Another grant objective that's proven dicey is attracting an airline to a community that currently has no air service whatsoever. Typically accessorized with glowing studies showing the enormous undiscovered gold mine the airport represents, the application is intended to either attract a carrier, or to fund more studies to analyze just what carrier that the community should chase after, as if there are dozens out there.

To our knowledge, a SCASD grant was successful in bringing back major airline system connectivity to only one community - Latrobe, Pennsylvania, and it was one that Boyd Group International assisted with. Our analyses identified strong domestic and Asian traffic that had value to Northwest over Detroit. It worked fine until the recession hit, cutting traffic. Then the rapid introduction of flat-screen TVs into American homes torpedoed the #1 product of the local Japanese-owned Sony plant - CRTs. Good-bye plant. Good-bye jobs. Good-bye traffic flows.

Unless there is a specific, demonstrable traffic generator that can be identified as a revenue stream for a network carrier, bringing back scheduled airline connectivity to rural communities is nigh-impossible. Getting Air Fred to toss a Cessna Caravan three days a week into the market isn't air service. It's a waste of money running empty airplanes across the sky.

More Success Than Any Other Consultant
In Translating SCASD Grants
Into Additional Air Service
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Since the inception of the Small Community Air Service Development Program, Boyd Group International has been more successful than any other consultant in assisting clients in winning air service grants. Well over $23 million.

Not only that, but we've been more successful, too, in helping communities actually turn their grants into viable additional air service - including some communities who used other consultants to originally prepare their application.  

Take A Look...

Note that these are just some of the communities that we've helped so far in translating SCASD dollars into better air service. We're currently in progress with a number of other clients in building better air service with their grants. Read on - and then give us a call.

Durango, Colorado. Boyd Group International worked with the community in crafting a SCASD strategy that would attract additional Eastbound service. The grant was awarded, and Delta Air Lines service was recruited to its Salt Lake City hub. The carrier initiated operations based on the SCASD grant. The DOT, unfortunately, eventually later reneged on awarding the grant for Delta service on the technicality that the service to the hub went north to access eastbound flights. (Strange, but true.)

Sarasota/Bradenton, Florida: The $1.5 million grant - the second-highest in the program's history - also represents the greatest success. After helping the community win the grant award, Boyd Group International worked with SRQ to attract low-fare AirTran service to Atlanta. This has since incubated additional LCC service, resulting in over 1 million additional local passengers since 2002.

Binghamton, New York: Enhanced westbound and international connectivity was accomplished using grant funds to support upgraded capacity to Northwest’s Detroit hub. Traffic analyses by Boyd Group International were a central part of the data used to attract this service.

Lewiston, Idaho: After having won their grant, the community looked for a consultant that could best showcase their need for access to the East. Boyd Group International was chosen, and the result is successful service to Delta’s Salt Lake City hub that has eliminated this deficiency.

Fresno, California: Boyd Group International helped the community win a $1 million grant, which was then used to negotiate new low-fare service to Frontier’s Denver hub.

Erie, Pennsylvania: Their grant was applied toward implementation of new service to Philadelphia and seasonal service to Charlotte via US Airways. Boyd Group International worked with the community in crafting presentations and assisting in negotiations with the carrier.

Latrobe, Pennsylvania: After working with the community to win their grant, Boyd Group International developed presentations and data that convinced Northwest Airlink to enter the market, re-establishing flights at a community that had earlier lost all scheduled service.

Charleston, West Virginia: Boyd Group International identified a specific need for service to Houston on the part of the local petro-chemical industries, and after the grant was awarded, the firm provided data to convince Continental to enter the market from its hub at Houston Intercontinental.

Lynchburg, Virginia: The grant that Boyd Group International helped the community win has been used to successfully incubate an upgrade to jet service by Delta Connection to Atlanta.

Chattanooga, Tennessee: A successful grant assisted Continental in implementing RJ service to IAH

Rhinelander, Wisconsin: Boyd Group International worked with Northwest in crafting a program to increase capacity at this community. Subsequent to completing negotiations and initiation of the new service, traffic levels increased over 20%. In 2007, Boyd Group International assisted RHI in winning a second SCASD grant.

Kalamazoo/Battle Creek, Michigan: After assisting AZO in winning their SCASD grant, Boyd Group International completed comprehensive analyses that convinced Delta Air Lines to implement nonstop RJ service to Atlanta.

Muskegon, Michigan: Working closely with the community, a program was accomplished that convinced Northwest to upgrade service by adding RJs into the schedule to Detroit/Metro.

Tupelo, Mississippi: After being awarded a grant, the community turned to Boyd Group International, which identified significant potential traffic flows – both domestic and international – that induced Delta to enter the market with new RJ flights to Atlanta.

Shreveport, Louisiana: Boyd Group International identified emerging automotive industry traffic flows in the region, which Northwest found to be highly valuable to its Detroit hub. The resulting nonstop SHV-DTW service was so successful that the grant was shifted to upgrading capacity to Memphis.

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The point again: Boyd Group International has had more success than any other consulting in both developing winning applications and in working to use them to build better air service.

This year, we'd be honored to assist with your airport's air service development needs. We'll give you the straight facts - if there's a chance for SCASD Grant success, we'll discuss it. If not, we won't hesitate to outline the reasons.

 

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