Examples of The Boyd Group
Success In Gaining New
Air Service With SCASD Funds
Check It Out:
More Success In Applying
SCASD Grants Than Any
Other Consultant
The
Boyd Group, Inc.
Advisors to the Aviation Industry
Since 1984
78 Beaver Brook Canyon Road
Evergreen, Colorado, 80439
303-674-2000
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The Boyd Group Advantage
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Flash! - SCASD Grants Awarded. Finally.
Boyd Group Clients Win BigThe DOT finally announced 2007 Small Community Air Service Grant Awards.
We're proud to note that more than 20% of total program funds - almost $2 million dollars - went to clients of The Boyd Group. Again as in prior years, that's more than any other consultant.
Along those same lines, since the inception of the Small Community Air Service Development Program, clients of The Boyd Group have won over $21 million in grant funding - and that's way more than any other consultant, too.
Particularly, we're happy to announce that two of the awards this year - to Golden Triangle and to Rhinelander - represent repeat SCASD successes for our clients.
Ominous Cloud: Awards That Are Intended Not To Be Spent. While the awards are exciting, it must be noted that the current SCASD program has morphed fundamentally from its original intent and implementation back in 2002. It is increasingly
clear that the focus at the DOT has shifted to looking for ways not to spend the dollars, instead of using it innovatively to actually fund programs that have a chance of real air service success.
The point is clear that Congress wants DOT to shift the money to EAS, a program that Congress refuses to bring into the 21st century. The original $35 million intended for the SCASD program was never funded, and half of the $20 million that was appropriated in the first years was taken away two years ago to fund EAS.
This year, not only did the the DOT award less than authorized, a number of the awards could be considered as nothing less than sure-thing "never-grants" - money for applications that under any earthly set of circumstances the DOT knows will never get used.
For example, a grant to attract a second carrier - indeed, a jet carrier, no less - to a market now experiencing barely a 30% load factor simply isn't going to happen within current or future airline economics, particularly when carriers are today dropping RJ routes with demonstrated load factors of nearly 80%.
DOT staff are well aware of current airline industry economics, and they certainly know that no carrier in its right mind, and without a political gun to its head, would even consider such a market. Today, with oil prices in the $90 range, ATC congestion delays, and huge gate constraints at big connecting hubs like Atlanta, it would take a pretty big gun to convince any airline to take such a risk. Furthermore, unlike the early days of the SCASD program, the DOT isn't likely to allow changes to the service target noted in the application.
So it's easy money back into the DOT kitty, but the political points of making an award have been achieved.
Then We Have The Interstate Airline Fantasy. As for other awards that are in little danger of getting spent, or are doomed to near-instant failure, there are those to support independent intrastate air service. This is regardless of whether they're for scheduled flights or for (non-existent) on-demand air taxi service.
The DOT knows full well that such schemes are DOA. The $1.5 million wasted in the first year of the program for a doomed-to-fail fruitcake air taxi deal in the Dakotas is not something the DOT could have forgotten. That money was completely and embarrassingly squandered.
Even as the DOT was preparing the 2007 grant announcement, a program providing intrastate commuter air service between Chicago/Midway and small airports in Illinois collapsed under its own weight and lack of traffic. Ray Charles could see that these things just don't work. So can the DOT.
So the awards given this year for intrastate scheduled and on-demand air taxi service raise real questions regarding how serious DOT is in regard to spending the money. In terms of market viability, these schemes are just slightly behind a snowball in the Sahara.
It's unfortunate that DOT staff are put in this position by misguided congressional policies aimed at under-funding programs such as SCASD, as well as pressuring the DOT to shift dollars to an outdated EAS program that's in desperate need of total revision.
Ominous Cloud II - Rule-Playing At The DOT. In the first years of the SCASD program, the DOT would bend over backwards to adjust terms of an award, and the intent was to have the grant result in more air service.
Today, it's playing by a different rulebook, or in some cases, a rulebook they make up on the fly. It's clear that, instead of trying to use the program to produce maximum new service, the objective is to simply try to not spend the money. Unlike in the first years of the program, grants have been reneged upon based on subjective technicalities. Grant extensions - once no real problem - are being rejected on the shakiest of logic. Applications aimed at communities gaining low-fare service are now tossed in the round file if another carrier has a monopoly on service to the hubsite city. Again, there's no doubt that the focus is now on how not to spend the money, instead of being a vehicle to build new air service.
But The Program Has Been A Success. Nevertheless, we are proud that again this year clients of The Boyd Group received more of the program award money than those of any other consultant.
And over the past five years, we can point to huge successes at our client airports as a result of assisting them in turning the grants into real air service improvements.
The most most successful of any grant in the history of the program is that of SRQ. Enplanements annually have grown by over 55% - that's 600,000 additional 0&D - due to
the results of a SCASD grant attracting and incubating AirTran. That carrier's initial success in adding ATL has led it to add several other markets from SRQ, most recently St. Louis. The success of AirTran was crucial to convincing other carriers, including jetBlue, and most recently, American Eagle, to enter the SRQ market.
As for next year, it's possible that there may not be a program, but time will tell. In the meantime, we're proud to once again be able to have assisted our client communities in gaining their share of SCASD money.
We'll be working with several of them in the coming months, as we did with SRQ, to turn the dollars into enplanements.
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Highlights of 2005 GAO SCASD Program Review
In the first week of December, 2005, the Government Accountability Office (GAO) issued a report to congress on the effectiveness of the Small Community Air Service Development Grant Program.
The report concluded that the program "Achieved Mixed Results" - which in the context of the paltry amount of money allocated by Congress, means it was a huge success.
Not In The Zone. Most of the report's focus on the downside of the "mixed results" was related to the portion of the SCASD program that involved the "Air Service Development Zone" designation. Nobody, it seems, can figure out what that really is, or what it's
supposed to do. There was no additional grant money, and almost nothing in the legislation that gave any idea what the "Zone" was supposed to accomplish.
As for the rest of the program, the only real concern the GAO seemed to have was that a lot of the grant money simply hasn't been applied to any real local program as yet. There are two reasons for this, neither of which were discussed in much detail in the report. The first reason is that it takes a lot of time to negotiate with carriers. The second reason - not mentioned at all - was that some of the grants were for projects that had no earthly chance of becoming reality.
Gimme The Money Back. According to the GAO, in a couple of communities, the grant was actually terminated, with the DOT recovering some or all of the dollars awarded. One of these was the 2002 program where a couple of Wyoming communities were Svengali-ed into investing grant money, as well as some locally-generated gelt, into buying a 19-seat Metro III, an airliner that as an investment made about as much sense as a down payment on the Brooklyn Bridge. They then turned it over to an airline, with the idea of accessing the huge
untapped O&D market to Billings. After costing the airline involved enough to almost put it out of business, the communities finally peddled the airplane, likely at a loss. How much of the grant money was recovered was not noted in the study.
DOT SCASD Staff: Great Work. Nevertheless, the SCASD program is an example of how government can do things right.
One of the key indicators of this was the results of a survey conducted among airports which have received grants. In general, over 90% reported that they were "satisfied" or "very satisfied" with the program, and - tellingly - with the way the DOT staff have handled the program. When one considers the political pressures that these people had to probably tolerate, that's a real tribute.
Great GAO Examples, Too. The Boyd Group was particularly gratified that a number of the SCASD successes reviewed by the DOT were at communities we assisted in filing the grant application. These included Charleston WV, Lynchburg VA, and Rhinelander WI. In the last instance, only about half the grant was needed, and the net result was a 20% increase in enplanements.
The point again: The Boyd Group has had more success than any other consulting in both developing winning applications and in working to use them to build better air service.
We'd be honored to assist with your airport's application in 2007. Give Mike Mooney a call at (303) 674-2000, or e-mail us at info@AviationPlanning.com and get the jump on your competitors in developing a tactical and strategic plan to get your share of the SCASD dollars.
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