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GAO SCASD Report

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

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The Boyd Group Advantage

2008 SCASD Grant Program

June 30, 2008 - Update

The applications will likely be posted some time this week.

The DOT has advised that they, too, have been victimized by the clunky grants.gov filing requirements. Apparently, the system turned into one giant cyber-mess, and the DOT hopes to have it sorted out this week.

As for awards, probably late August at the earliest.

The turmoil in the airline industry may have some effect on the awards. Applications for new RJ service at airports where none exists now may be DOA, simply because they have no earthly chance of resulting in air service.

Point-to-point service, particularly where the applicant has no operator lined up, might also be round-filed.

In any case, deal with this: major carriers are trying to get out from under RJ flying. A proposal to implement new service in an unknown market probably won't even get a phone call returned, let alone a meeting. It's a lot different today than even four weeks ago.

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The 2008 Small Community Air Service Development Grant Program (SCASD) has been tentatively appropriated $10 million. We can assume a 1% recission (for whatever reason) leaving $9.9 million.

Applications are due June 6, 2008. D-Day. But there's no guarantee this year that the program will make the beaches.

Funding: Tentative. Be aware that the 2008 program could be effectively cancelled at any time. The DOT is mandated by Congress to shift money from SCASD or just about any other program to assure that Essential Air Service is fully funded. This year, EAS is in complete financial chaos, with potential operators getting scarce and fuel expense causing existing contracts to be re-bid for higher subsidy. There is a very real chance - much greater than any time in the past - that the SCASD funds could be completely hijacked into EAS this year.

Some points this year:

Second Time Around Is Okay. If a community received a grant in the past, it can ask for another one for the same purpose, as long as it's not exactly the same. Meaning, another risk-abatement grant is not out of the question, as long as it's not for the same carrier, the same route, and to address the exact same deficiency. This is a major change.

No Money For Competition. The prohibition regarding grants for service on routes already operated by an airline is now stated and official. In the first years of the program, a grant to get more competition or a low fare carrier into a connecting hub was okay, even if there was another carrier in the market. In fact, some of the most successful grants were for just that purpose. A couple of airlines complained, and now, any such application is headed directly for the round file. Last year, some consultants had communities believing they can word-smith an application around this. Didn't get to first base at the DOT, and won't this year, either.

Stay Out of The Zone. This year's docket still includes the Air Service Development Zone designation. One lucky applicant can get it each year. The only problem is that nobody really knows what it is. Since the program started in 2002, there's not been anything that's ever resulted from a community being designated as an Air Service Development Zone. Don't bother - it brings no additional funds, and wastes a lot of time to apply for.

Make It Brief. State The Case. Outline Facts. Then Close. One of the reasons, we believe, that The Boyd Group is more successful than any other consultant in helping communities win SCASD grants is that we craft applications with the DOT staff in mind. They have to read dozens of documents, and their time is important. That means we concentrate on brevity, focus, and clarity. No fluff. No discussions of the sheer beauty of the community, or that Pizzaro passed through town in 1534 on his way to convert savages to the True Religion.

We're not kidding - some consultants insist on including this type of filler-sludge in SCASD applications. The DOT doesn't care. Or, more correctly, they do care - they care not to have to wade through such drivel, and his year, they actually make it clear that brevity gets points.

Things To Avoid. Again, avoid "travel banks" - even the mention of them. It's clear in the docket this year that the DOT views them as being just short of snake oil. This year, they specifically stated that "travel banks" (under whatever name) are not to be listed as cash/monetary support, but as "in-kind" contributions.

Get The Guide. We've updated our Guide To Filing A Successful SCASD Application. It reviews key points in the 2008 docket and provides tips on what to focus on and what to avoid. Bona fide communities can get a copy by e-mailing Tim Sieber at tsieber at AviationPlanning.com.

Please let us know if we can help with your SCASD application. Take a look at our successes, and give Mike Mooney a call at (303) 674-2000.

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, The Boyd Group has been more successful than any other consultant in assisting clients in winning air service grants. Well over $20 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. The Boyd Group 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.) Nevertheless, the service is in place and is successful.

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, The Boyd Group worked with SRQ to attract low-fare AirTran service to Atlanta. This has since incubated additional LCC service, resulting in enplanement levels jumping 55% between 2002 and 2006.

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.

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%. In 2007, The Boyd Group assisted RHI in winning a second SCASD grant.

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 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 supposedly-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 air service development needs. 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 assure your community has the air service it needs to compete in the global marketplace.

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