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Examples of The Boyd Group
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Air Service With SCASD Funds

GAO SCASD Report

The Boyd Group, Inc.
Advisors to the Aviation Industry
Since 1984

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The Boyd Group Advantage

The Small Community Air Service Development
Grant Program - 2006
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JANUARY 20, 2006. The DOT has issued a docket calling for applications under the Small Community Air Service Development Grant Program. Deadline for filing is April 7, 2006.

First, Order The Guide. The 2006 SCASD program has a number of significant changes from prior years. The required application format has been clarified. This year, applicants now need to "register" and file yet another clumsy non-DOT form that has almost no relationship whatsoever to the issue of small community air service. furthermore, the grant criteria, reading between the lines, have changed.

The Boyd Group has prepared an in-depth Guide To Filing A Successful SCASD Application that covers all the details of the 2006 docket. The Guide will give you the competitive advantage. It's blunt, to the point, and gives incisive information on the 2006 program.

It reviews the the changes in this year's SCASD program, including format requirements and de facto revised grant award criteria. It also reviews the new filing paperwork that's required this year. We even include a copy of the dreaded Standard Form SF424 - Application For Federal Domestic Assistance - that now must be completed on-line. (Despite the name, it has nothing to do with applying for Welfare.) It's part of the new requirement for applicants to pre-register at "grants.gov" - an attractive federal website that's about as intuitive as the Dead Sea Scrolls.

The Boyd Group Guide To Filing A Successful SCASD Application includes reviews of what works and what doesn't, including a list of traps to avoid in crafting an application, and some of the awards that went nowhere simply because the intended use wasn't viable from the start. Since the inception of the SCASD program, The Boyd Group has been more successful than any other consultant in helping develop winning grant applications, and this Guide is a product of this expertise. We know of what we speak, and our clients will agree.

Bona fide candidates for the SCASD program can request a complimentary copy of the Guide by e-mail at mooney@aviationplanning.com and we'll have a copy right off to you.  We reserve the right to limit copies.

Basic Outline of 2006 Program

In the meantime, here are the bare basics of the 2006 SCASD program:

Overall Program Structure: On the surface, not much has changed from prior years. However, the de facto award guidelines have shifted materially since the program's introduction, which are reviewed below.

Again, a maximum of 40 grants can be made, although there's no requirement that this many be awarded. No more than four per state, just as before. Consortium applications are accepted, but, again apparently referring to the rejected "consortium" application made by a group of Illinois cities in 2004, the DOT emphasizes that it must be a truly integrated proposal, instead of several individual applications bundled together. (As a practical matter, the very few consortium applications that have won grants have had dismal results in improving air service.)

Bring Some Cash: Between the lines: a local match is pretty much essential. The DOT wants a commitment from the community. The Guide reviews this in more detail.

Don't "Bank" On Anything: Again this year, the DOT is openly wary about travel bank schemes and "community pledges" aimed at pre-purchasing tickets. There's been some experience with these trendy concepts failing to interest carriers. Unless there is a hard and fast, clear and concise written commitment from an airline specifically supporting the travel bank or pledge scheme, the net effect will probably be the application being relegated to the round file.

Funding: The Program's Been Raided. The news is not good. After four years of overall success, the SCASD program is being financially sacked. This year, congress has hijacked over half the  SCASD funding, and slipped it into the Essential Air Service Program, which has degenerated into one of the most outdated and wasteful government programs in existence. Net amount: $10 million, less a 1% "rescission" for a bottom line of $9.9 million.

The reason is pure, naked politics. The EAS system can be almost effortlessly mis-used by Senator Snort and Representative Ripoff as soapbox pork. The SCASD program is essentially merit-based (in most cases) and that makes it less vulnerable to sticky-fingered mis-appropriation to win votes.

EAS is in some instances used to support lost-cause programs that sound good in a press release, but which often have no earthly relationship to airline and consumer realities. Examples abound, such as one-stop service from Huron SD to Omaha, which is passed off by politicians and others who know zip about the airline industry as a "connecting hub." Or, hour-and-a-half one-stop service nobody wants to use between Manistee and Milwaukee.

Instead of overhauling the EAS program to make it work within the context of the new airline industry realities, congress just wants to toss more money at it. SCASD funding is a victim of this inept leadership from the marble playpen on The Hill.

For 2006 - New Realities & A New Airline Industry Context. But there's still $9.9 million in the SCASD program that the congressional porkers have left in place.

Some key points for this year:

• Plan on <60 Applications. Last year, only 84 communities applied. We would suspect that it may be fewer this year, making the odds really good for an award for a well-crafted application.

• Smaller Is Better. Because of the reduced funding, the days of $1 million+ awards are probably over, with the possible exception of some really nuclear-level political pressure in a few cases. Therefore, this year, grants will likely focus on applications that are in the <$450K range.

• New Political & Other Pressure. Some types of awards that in past years have produced successful new air service are now out of the picture. If you're seeking a grant to recruit Frontier service to Denver, and United's already on the route - don't bother to file an application. Same with AirTran to ATL in any market where Delta is.

This is part of the revised award criteria: Any grant that's aimed at supporting service into a connecting hubsite where there's already nonstop service will be dead on arrival at the DOT. That's regardless of how insufficient the existing service might be, or how the requested service would increase traffic, lower fares, and open connectivity and competition to dozens of new markets.  Between the lines, the 2006 docket essentially says DOT won't approve any such grants in the future.

Even in light of the success of such SCASD-enabled service at airports such as SRQ (where a grant made SRQ-ATL service possible, and ultimately spiked enplanements by 20% and lowered fares) or Fresno (FAT-DEN low-fare service), complaints by a couple of major carriers have essentially cowed the DOT from issuing any further grants for this type of service improvement.

We can thank United for this consumer-averse shift in policy. Last year, United's government affairs department filed a series of amateur and inept missives regarding Fresno's grant. Riddled with inaccuracies and supported by embarrassingly uninformed arguments (the writer clearly didn't do even cursory research on the program before firing off letters), United basically claimed that the grant represented unfair competition, leaving out the fact that its monopoly flights on the route approached 90% load factors.

Although the grant did exactly what the program was aimed at - increasing competition, lowering fares, and reducing monopoly markets - it's clear in the 2006 docket that the DOT doesn't want any more arguments with big-airline government relations hacks, or to pick a fight with the politicians who may be residing inside certain big carriers' back pockets. (Remember where the Speaker of the House is from.)

• Airline Service: The Bar Is Higher. Mega-carriers are in the process of making significant reductions in the number of RJs they lease from small jet providers. That means the bar to attract new service is up - way up. In light of the reduced funding this year, any applications intended for use as revenue guarantees ultimately will need some very convincing numbers to get past the first-level airline planners.

• Shorter Decision Time. Assuming the DOT has the staff, the decisions on grants should be a lot quicker this year. Figure by the end of July, as a very rough guess.

Even though it's been scaled back, the SCASD program is still an excellent source of funding to support a whole range of possibilities - a new marketing program, airline incentives to tweak service, an updated traffic-generation analysis, or establish a time-definite advertising program. Just keep in mind that the SCASD program is now much smaller in scope that in prior years.

The Air Service Development Zone - A Waste of Time

As with prior years, there is the option of also applying to be designated an "Air Service Development Zone." This was probably slipped into the legislation by some congressional staffer who had no clue about the subject matter. All this designation does, according to the DOT, is provide assistance in contacting government agencies that can help in economic development around the airport itself. There’s no money involved, and it appears that the designation simply gives access to the DOT’s federal Rolodex.

In the past, requesting this designation was a putting a check mark in the appropriate box on Appendix B. This year, a separate justification document is required that must outline all sorts of information, such as the property available for development, demographics and a detailed plan of development. Since this exercise brings in no money, and no real support from the feds, we would strongly suggest this whole silly burlesque be ignored.

In short, the Air Service Development Zone concept is unfocused and essentially useless. The December 2005 GAO analysis of the SCASD program tended to agree with this assessment.

The Real Challenges Come After The Grand Award. Over the past three years, The Boyd Group has been more successful than any other consultant in assisting clients in winning air service grants. Not only that, but we've been more successful, too, in helping communities turn their grants into viable additional air service - including some communities who used other consultants to originally prepare their application.

So, order the Guide, and give Mike Mooney a call at (303) 674-2000, or e-mail us at Info@AviationPlanning.com, and we can get started helping your community get its share of this grant funding.

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The Boyd Group Provides Results
After The Grant Is Awarded

The Boyd Group's track record of helping clients file winning grant applications is just the start.

Since the inception of the Small Community Air Service Development Grant Program (SCASD), no other consultant can match our record of helping communities actually translate their SCASD grant into materially improved air service.

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. 

Sarasota/Bradenton, Florida: After helping the community win the second-largest grant award in the history of the SCASD program, The Boyd Group worked with SRQ to attract low-fare AirTran service to Atlanta. This has since incubated additional LCC service, resulting in 20%+ gains in enplanements through the first half of 2005. 

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 The Boyd Group 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. The Boyd Group was chosen, and the result is successful service to Delta’s Salt Lake City hub that has eliminated this deficiency.

Fresno, California: The Boyd Group helped the community win a $1 million grant, which was then used to negotiate new low-fare service to Frontier’s Denver hub. The Boyd Group developed traffic, route and revenue data to convince the airline to enter the market.

Erie, Pennsylvania: Their grant was applied toward implementation of new service to Philadelphia and seasonal service to Charlotte via US Airways. The Boyd Group 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, The Boyd Group 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: The Boyd Group 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 The Boyd Group helped the community win has been used to successfully incubate an upgrade to jet service by Delta Connection to Atlanta.

Chattanooga, Tennessee: Continental has implemented service to its hub at IAH to take advantage of the growing levels of commerce between Eastern Tennessee and Central America.

Rhinelander, Wisconsin: The Boyd Group 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%.

Kalamazoo/Battle Creek, Michigan: After assisting AZO in winning their SCASD grant, The Boyd Group 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 The Boyd Group, 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: The Boyd Group 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.

The track record is clear. The Boyd Group is unrivaled in helping communities make the best use of their SCASD grants. Give us a call to find out how we can help your community achieve its air service goals.

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Highlights of GAO 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 crackpot 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 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 2006. Give us a call, or e-mail us at info@AviationPlanning.com and we can get started ahead of your competitors in developing a tactical and strategic plan to get your share of the SCASD dollars.

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