Traverse City, Michigan - Regulations.gov

service/SCASDP

1 Note that the Summary Information does not count against the 20-page limit of the SCASDP application.

http://www. .gov/policy/aviation-policy/small-community-rural-air-

Traverse City, Michigan

Northwestern Regional Airport Commission

Kevin Klein, AAE

1196957240000

Cherry Capital Airport (TVC)

______________________________________________________________________________

______________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

Detroit, MI (DTW) - 262 milesCleveland, OH (CLE) - 396 miles

Grand Rapids, MI (GRR) - 150 miles

Traverse City, MI (TVC) - 4 miles

2009/2015

2009: Replace air service capacity lost over the past five years at Cherry Capital Airport by

implementing and supporting new year-round service to United Airlines' Denver hub.

2015: Revenue guarantee, start-up cost offsets, and associated marketing costs to recruit, initiate, and

support new service to Charlotte, Houston, or Dallas/Ft. Worth Airport to improve service to the southern US.

✔

MI-001

✔

✔

a

2

(explain below)

b.

2 “Professional Services” involve a community contracting with a firm to produce a product such as a marketingplan, study, air carrier proposal, etc.

fee waivers to recruit, initiate and support a new entrant carrier.

✔ ✔

✔

Ground handling offset, station startup offset, marketing campaign and airport

Northwestern Regional Airport Comm. Traverse City Tourism

✔

promotion of the air service to the public

offsetting expenses to assist an air service provider in setting up a

new station and starting new service (for example, ticket counter reconfiguration)

an agreement with an air service provider setting forth a minimum

guaranteed profit margin, a portion of which is eligible for reimbursement by the

community

air service development activities to recruit new air

service, including expenses for airport marketers to meet with air service providers to make

the case for new air service

waiver of airport fees, such as landing fees, to encourage new air service;

counted as in-kind contributions only

reimbursement of expenses for passenger, cabin, and ramp (below

wing) services provided by third party ground handlers

travel pledges, or deposited monetary funds, from participating parties for

the purchase of air travel on a U.S. air carrier, with defined procedures for the subsequent

use of the pledges or the deposited funds; counted as in-kind contributions only

(explain below)

Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

✔

✔

✔

✔

✔

✔

✔ ✔

1 Federal amount requested

2 State cash financial contribution

Local cash financial contribution

Airport cash funds

Non-airport cash funds

3 Total local cash funds (3a + 3b)

4 TOTAL CASH FUNDING (1+2+3)

In-Kind contribution

Airport In-Kind contribution**

Other In-Kind contribution**

5 TOTAL IN-KIND CONTRIBUTION

(5a + 5b)

6 TOTAL PROJECT COST (4+5)

For funds in lines 5a (Airport In-Kind contribution) and 5b (Other In-Kind contribution), please

describe the source(s) of fund(s) and the value ($) of each.

a. This application was made available to the State under the Executive Order 12372

Process for review on (date) _____________.

b. Program is subject to E.O. 12372, but has not been selected by the State for review.

c. Program is not covered by E.O. 12372.

5a: Landing fee and terminal rent waivers

✔

$525,555

$1,125,555

$310,555$215,000

$100,000

$600,000

$50,000

$50,000

$500,000

$0

5b: Marketing

No Yes (explain)

______________________________________________________________________________

______________________________________________________________________________

✔

APPENDIX C

APPLICATION CHECKLIST

INCLUDED? ITEM

For Immediate Action

Determine Eligibility

New Grants.gov users must register with www.grants.gov.Existing Grants.gov users must verify existing www.grants.gov account has not expired and the Authorized Organization Representative (AOR) is current.

For Submission by :00 PM EDT on

Communities with active SCASDP grants: notify DOT/X50 of intent to terminate existing grant in order to be eligible for selection

Complete Application for Federal Domestic Assistance (SF424) via www.grants.gov

Summary Information schedule complete and used as cover sheet (see Appendix B)

Application of up to 20 one-sided pages (excluding any letters from the community or an air carrier showing support for the application), to include:

A description of the community’s air service needs or deficiencies.

The driving distance, in miles, to the nearest large, medium, and small hubairports, and airport with jet service.

A strategic plan for meeting those needs under the Small Community Program,including a concise synopsis of the scope of the proposed grant project.

For service to or from a specific city or market, such as New York, Chicago, LosAngeles, or Washington, D.C., for example), a list of the airports that theapplicant considers part of the market.

A detailed description of the funding necessary for implementation of thecommunity's project.

An explanation of how the proposed project differs from any previous projectsfor which the community received SCASDP funds (if applicable).

Designation of a legal sponsor responsible for administering the program.

Y

Y

N/A

YY

Y

Y

Y

Y

Y

Y

Y

Y

N/A

N/A

1

Application Under the Small Community Air Service Development Program │Cherry Capital Airport, Traverse City, Michigan

Northwestern Regional Airport Commission’s Application Under the Small Community Air Service Development Program _____________________

Docket DOT-OST-2020-0231

Cherry Capital Airport Traverse City, MI Contact: Kevin Klein, AAE, Airport Director 727 Fly Don’t Drive Traverse City, MI 49686 Phone: 231-947-2250 Email: [email protected]

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SECTION 1 SUMMARY OF PRIORITY SELECTION CRITERIA

This Small Community Air Service Development Program (SCASDP) grant application for Cherry Capital Airport (TVC), located in Traverse City, Michigan, meets the criteria of Docket DOT-OST-2020-0231. Northwestern Regional Airport Commission, the airport sponsor, is requesting $500,000 in federal investment to implement a $1,125,555 airline assistance program for a new entrant carrier. While TVC is isolated from alternate airports, such as Grand Rapid’s Gerald R. Ford International Airport (GRR) at three hours and Detroit Metropolitan Airport (DTW) at over four hours away, TVC suffers from significant passenger leakage to other airports. For catchment area residents, just 49 percent use TVC for their travel needs. Inbound visitation leakage is significantly higher. Just 2 percent of an estimated 7.45 million visitors annually to the greater Traverse City region originating from more than 200 miles away use TVC. Additional service to TVC is essential to help reduce catchment area leakage and to continue to attract critical out-of-state visitation. While TVC had success prior to the COVID-19 pandemic in increasing service from incumbent carriers, there are many routes that are top opportunities for TVC that do not fit into incumbent airline business plans. Only a new entrant carrier, such as Avelo Airlines, Breeze Airways, JetBlue Airways or Southwest Airlines, would be able to fill the numerous non-traditional market opportunities that will help to increase use of TVC by visitors and catchment area residents.

Higher than Average Airfares

The 51 percent of catchment area travelers and 98 percent of annual inbound visitors that do not use TVC for their travel do so because of high fares and lack of sufficient air service at TVC. According to the Bureau of Transportation Statistics (BTS) database for calendar year 2019, TVC had an average domestic roundtrip fare of $498, 41 percent higher than the national average of $352. In addition, TVC’s fares are greater than nearly every comparably-sized airport in the BTS report. A further review of airfares using Diio Mi for calendar year 2019 was completed to compare TVC to the closest 20 airports in terms of annual passengers in the BTS report. TVC’s fare was higher than all but three of the peer markets and was 11 percent higher than the average domestic fare generated by these 20 peer markets. When comparing average fares to the national average or to peer markets, TVC’s fares are higher than average.

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Community Cost Contribution

To support this air service initiative, the airport and the community will fund 55 percent ($625,555) of the proposed $1,125,555 Strategic Plan through cash and in-kind contributions. The public-private partners are funding 8 percent of the total cash outlay with non-airport funds. This is a strong commitment by northwestern Michigan to support a new entrant carrier.

Public-Private Partnership

TVC has a long history of air service development efforts and has enjoyed close cooperation with organizations throughout the region. The Northwestern Regional Airport Commission/TVC has teamed with Traverse City Tourism to form a public-private partnership to recruit a new entrant carrier. As a major tourist destination, Traverse City Tourism is an integral part of the success of this plan. Each partner has an active role to implement the Strategic Plan.

Impact from COVID-19 Pandemic

Due to the impact of COVID-19, TVC flights are down 41 percent and seats are down 37 percent for the year ended March 31, 2021. While the Strategic Plan to support a new entrant airline does not directly replace service lost due to COVID-19, the plan is part of the community’s goal of returning TVC’s scheduled commercial air service to pre-COVID-19 levels and meet the needs of catchment area travelers and the significant number of visitors to the area.

Material Benefits

Commercial air service at TVC benefits a broad section of the traveling public including businesses, educational institutions and leisure travelers. TVC serves a local population of more than 430,000 in the primary catchment area, which encompasses most of northwestern Michigan. As the largest city for the northern Michigan area and the Upper Peninsula, Traverse City plays a critical role in the entire region for shopping, entertainment and healthcare. TVC plays a similarly important role as the largest airport for all of northern Michigan and the Upper Peninsula. The greater Traverse City area is consistently voted as one of the top destination markets in the entire country. Numerous festivals and events attract millions of visitors to the region each year. With significantly higher economic impact from each visitor, airline passengers provide a critical economic impact to the entire region. Local businesses large and small rely upon TVC to be able to compete in the national and global economy, and without those ties would be forced to drive long distances or relocate elsewhere.

Ability to Implement Project

The public-private partnership and other stakeholders in the community support this plan and have the ability to implement this project as proposed. TVC has had numerous discussions with target airlines and has received positive feedback on potential new service to TVC. Northern Michigan has a well-thought-out, achievable Strategic Plan, strong desire, and a business and population base to support this air service initiative. In short, all of the pieces are in place to implement the proposed plan.

4


SECTION 2 AIR SERVICE ENVIRONMENT

Understanding community characteristics is important to identify its air service needs. This section shows the broad segment of the traveling public, including businesses, government institutions, tourism and other enterprises that benefit from local air service.

Large Northwestern Michigan Population

TVC serves the entire northwestern Michigan area, stretching from Manistee to Mackinac Island. As the largest city in northern Michigan or the Upper Peninsula, Traverse City plays a critical role for the entire region as the shopping, economic, healthcare and entertainment hub. The defined primary TVC catchment area is shown in Exhibit 2.1. While the primary TVC catchment area has a population of 430,000, TVC draws from a much larger area. The entire northern Michigan and Upper Peninsula use TVC for their air service needs. Traverse City’s Micropolitan Statistical Area (Micro) is growing faster than the rest of the state of Michigan. From 2010 to 2020, Traverse City’s Micro population increased by 5.8 percent, compared to just 1.5 percent for Michigan. It is projected to increase an additional 5.4 percent by 2030, nearly double the 2.8 percent population growth projected for Michigan.

Proximity to Alternate Airports

Northwestern Michigan is a growing region whose residents and visitors are forced to either pay high fares at the local airport or make long drives to access alternate airports. An analysis of TVC’s true market indicated that 51 percent of TVC catchment area travelers drive to alternate airports to access commercial air service including GRR, DTW and the

EXHIBIT 2.1 TVC CATCHMENT AREA

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Chicago-area airports. Table 2.1 provides an estimate of drive times without traffic congestion to the nearest airports to the Traverse City area. The closest large hub airport, DTW, requires a drive of approximately 262 miles, nearly four hours one-way. GRR is approximately a three-hour drive from Traverse City, and while it is just a small hub airport, it captures the largest share of diverting passengers, with about 23 percent of catchment area travelers using GRR. The only alternate airports with a drive of less than three hours are Manistee and Pellston, Michigan. While they are one to two hours distant, both airports are subsidized through the Essential Air Service program and offer limited service.

Thriving Economy

Northern Michigan is host to a diverse economic base with industries such as manufacturing, insurance, education and tourism. Table 2.2 provides a selection of top employers in the region. Several of the industries and employers are discussed in the following subsections.

Insurance

Traverse City is home to two of the specialty insurers that do business throughout the U.S. and the world, Hagerty Insurance and Global Marine Insurance. Hagerty Insurance is the worldwide leader in specialty classic car insurance. With their corporate headquarters in Traverse City, Hagerty Insurance employs over 1,200 people with significant travel needs throughout the world. Hagerty has offices in Denver, Canada, the United Kingdom and Germany. Global Marine Insurance specializes in boat, yacht, personal watercraft and commercial marine insurance.

Agriculture/Manufacturing

Traverse City is known as the “Cherry Capital of the World”, with the cherry industry driving significant economic benefit to the region. The National Cherry Festival attracts hundreds of thousands of visitors each July, and cherry manufacturing in the greater Traverse City area is big business. The Traverse City area produces 75 percent of the nation’s tart cherries on nearly four million cherry trees in the Traverse City region and also produces a significant number of sweet cherries. Hillshire Farms’ Sara Lee production facility employs more than 500 people and is an industry leader in frozen bakery products. Located on the 45th parallel, Traverse City shares the same growing season and weather as some of the most prestigious wine regions of Europe, like the Bordeaux and Piedmont areas. The greater Traverse

TABLE 2.2 TOP EMPLOYERS EMPLOYER INDUSTRY

Hagerty Insurance Insurance EJ Manufacturing

Skilled Manufacturing Manufacturing Britten Banners, Inc Manufacturing

Quantum Sails Manufacturing Hillshire Farms Agriculture

Grand Traverse Resort Hospitality

TABLE 2.1 DRIVE TIME TO ALTERNATE AIRPORTS

AIRPORT MILES ESTIMATED DRIVE TIME

HUB SIZE

Traverse City, MI (TVC) 4 0:12 Non Manistee, MI (MBL) 62 1:16 Non Pellston, MI (PLN) 87 1:52 Non

Grand Rapids, MI (GRR) 150 2:56 Small Detroit, MI (DTW) 262 3:57 Large

Chicago, IL (MDW) 323 4:59 Large Chicago, IL (ORD) 333 5:05 Large

Cleveland, OH (CLE) 396 6:10 Medium Source: Google Maps; from City of Traverse City proper

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City area boasts more than 40 wineries with many ties to vineyards found in both Europe and South America, driving significant travel between the regions. Traverse City has numerous small manufacturers in the region that are critical to the local economy that range in products from banners to precision metalworks to custom racing sales. Britten Banners is a large sign and banner company employing more than 250 in Traverse City that has produced more than 600,000 products for worldwide clients ranging from sports to commercial real estate to retail. Another example is Quantum Sails Design Group, a specialty manufacturer of sails for boats ranging from yachts to Americas Cup entrants that employs 250 people locally and provides products to worldwide customers. EJ Inc. is a worldwide leader in the manufacturing of custom iron casting and infrastructure access products (manhole covers). Headquartered in nearby East Jordan, Michigan, it has been in business for nearly 140 years and employs thousands worldwide.

Education

Traverse City offers a variety of opportunities for higher education within the local community including the Northwestern Michigan College, with more than 50,000 students annually enrolled in associate and bachelor level degrees. The Interlochen Center for the Arts is a world renowned institution for elementary and secondary school aged children for both summer arts programs and boarding school. The Summer Arts Camp attracts top talent from around the world for varying length, immersive programs during the summer. Interlochen’s programs generate many thousands of passengers each year at TVC, and limited service with high load factors force many students, faculty and families to fly into alternate airports.

Tourism

Tourism is a $1.23 billion annual industry for the Greater Traverse City area, supporting nearly 12,000 jobs in the region. Based on Mead & Hunt’s true visitation estimate, the Traverse City area drew 7.45 million visits in 2019 from people living more than 200 miles away, with the June to August peak season representing 4.39 million visits. Due to regional restrictions, especially in the Northeast, and reduced airline schedules from the COVID-19 pandemic, the 2020 peak season had a 20 percent decline in visits from beyond 200 miles year-over-year. The Traverse City region has numerous accolades for the tourism industry. The Sleeping Bear Dunes National Lakeshore has been voted the Most Beautiful Place in America by Good Morning America, and the Traverse City area is consistently ranked one of the top golf destinations in the U.S. with more than 30 courses. TVC is critical to the continued growth in the tourism industry for the entire northern Michigan area. As demonstrated in this section, assistance through a SCASDP award will provide material benefits to a broad segment of the traveling public, including businesses, educational institutions, and other enterprises, whose access to the national air transportation system is limited.

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SECTION 3 AIR SERVICE – EXISTING/HISTORICAL

This section provides an overview of existing air service. Carriers providing service, service frequency and nonstop destinations are included in the discussion. A summary of historical air service is also included. A description of air service development efforts concludes the section.

Existing Air Service

After many years of strong growth from incumbent carriers, TVC had a significant decline in destinations, flights and seats in the peak month of July 2020. While American Airlines held a fairly steady schedule with just 16 percent fewer departures and 18 percent fewer seats, TVC as a whole had a departure decline of 46 percent and a seat decline of 42 percent compared to July 2019. Delta Air Lines and United Airlines had declines in departures of more than 60 percent and the number of seats declined more than 55 percent each. Due to the uncertain situation with COVID-19 and airline schedules being finalized much closer to the month of travel, it is unknown how service levels will be impacted in summer 2021.

Historical Air Service

Exhibit 3.1 (next page) shows available seats and onboard passengers for the past 10 years. This chart demonstrates that following strong success by TVC and its local partners, there was a significant decline in passengers and seats in 2020. Even with the strong growth in passengers until early 2020, the leakage from the primary catchment area was 51 percent and a small fraction of the inbound visitors used the air service. New service, especially to markets that TVC’s incumbent airlines are unlikely to serve, will help to reduce leakage and increase access to inbound travelers that are critical to the economy of the Traverse City region.

TABLE 3.1 TVC FLOWN FLIGHTS/SEATS – JULY 2020

AIRLINE DESTINATION WEEKLY

FLIGHTS SEATS

American Airlines

Charlotte, NC (CLT) 11 715 Chicago, IL (ORD) 150 8,144

Dallas-Ft. Worth (DFW) 37 2,812 New York, NY (LGA) 3 228

Washington, DC (DCA) 3 228 Delta Air

Lines Detroit, MI (DTW) 124 9,776

Allegiant Air

Orlando-Sanford, FL (SFB) 9 728 Phoenix-Mesa, AZ (AZA) 9 750

Tampa-St. Petersburg, FL (PIE) 9 648 United Airlines Chicago, IL (ORD) 68 4,685

Total 423 28,714 Source: Diio Mi T100, July 2020

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EXHIBIT 3.1 HISTORICAL SEATS AND PASSENGERS

Source: Diio Mi

Past Air Service Development Efforts

The Traverse City community has been very active in air service development efforts over the past several years. Even in the midst of the COVID-19 pandemic, TVC has remained active, attending the Mead & Hunt Air Service Development Conference in March 2020, updating the catchment area leakage study (i.e., Passenger Demand Analysis), performing a true visitation estimate, and conducting virtual headquarters meetings with incumbent and new entrant airlines. TVC regularly updates detailed market analyses, including route forecasts and true market estimates. The community has also been involved with several community meetings to discuss air service development efforts held in the past few years. In addition, substantial marketing has been invested for TVC’s air service. Traverse City Tourism has invested $5.1 million over the past three years in air service marketing. TVC has invested an additional $1.6 million, for a combined investment in marketing over the three-year period of $6.7 million.

40,000

90,000

140,000

190,000

240,000

290,000

340,000

390,000

440,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Year Ended

Onboard Passengers Seats

TABLE 3.2 PAST AIR SERVICE DEVELOPMENT EFFORTS CALENDAR

YEAR INITIATIVE

2017 Mead & Hunt Air Service

Conference Airline Headquarter Meetings

2018

Mead & Hunt Air Service Conference Jumpstart

Airline Headquarter Meetings

2019 Mead & Hunt Air Service

Conference Airline Headquarter Meetings

2020

Passenger Demand Analysis True Visitation Estimate

Airline Headquarter Meetings (Virtual)

Mead & Hunt Air Service Conference

9


SECTION 4 AIR SERVICE NEEDS AND DEFICIENCIES

The Air Service Needs and Deficiencies section identifies the impetus behind this SCASDP grant application and demonstrates the need for additional service at TVC for local air travelers and inbound tourists to have adequate access to the national air transportation system.

High Diversion to Alternate Airports

A study was recently conducted of TVC’s passenger diversion for the year ended December 31, 2019. As shown in Exhibit 4.1, the study indicated that an estimated 51 percent of the travelers in the TVC catchment area drive to alternate airports. The true market estimate determined that there are 1,051,840 air travelers in the TVC catchment area. That equates to more than 1,440 passengers daily each way (PDEW) with the majority of those travelers, nearly 735 PDEW (51 percent), driving to distant alternate commercial service airports. Additional service from a new airline would help to reduce that leakage. On a market-by-market basis, diversion is significant. Table 4.1 provides the top 20 TVC true markets and retention by market. While TVC had nonstop service in 2019 to six of the top 10 markets, there is significant room for new service from TVC to reduce leakage. Only Chicago-O’Hare, Dallas-Ft. Worth, San Francisco, Minneapolis-St. Paul and Boston had retention rates over 60 percent in 2019.

TABLE 4.1 TVC RETENTION BY MARKET

RANK DESTINATION

TVC RETENTION

% TRUE

MARKET 1 Denver, CO 47% 42,300 2 New York, NY (LGA) 50% 39,153 3 Chicago, IL (ORD) 89% 34,463 4 Dallas, TX (DFW) 51% 34,317 5 Orlando, FL (MCO) 34% 32,439 6 Atlanta, GA 38% 30,954 7 Phoenix, AZ (PHX) 37% 30,732 8 Los Angeles, CA 57% 26,084 9 San Francisco, CA 61% 25,787 10 Newark, NJ 38% 25,185 11 Houston, TX (IAH) 45% 23,494 12 Tampa, FL 42% 23,178 13 Fort Myers, FL 45% 22,348 14 Las Vegas, NV 40% 20,669 15 Minneapolis, MN 71% 20,319 16 Washington, DC (DCA) 50% 19,764 17 Seattle, WA 54% 19,417 18 Boston, MA 60% 18,962 19 Fort Lauderdale, FL 34% 17,825 20 Miami, FL 33% 14,690

Domestic 50% 959,984 International 40% 91,857

Total 49% 1,051,840 Source: Mead & Hunt, Inc.; True Market Estimate YE Q4 2019

EXHIBIT 4.1 CATCHMENT AREA AIRPORT USE

TVC49%

GRR23%

DTW19%

ORD4%

Other5%

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True Visitation Estimate

While the true market estimate for TVC helps to quantify the outbound leakage from people living within the TVC catchment area, for a leisure market like Traverse City, the inbound visitor is critical to the local economy. With more than $1 billion in annual impact from tourism, Traverse City relies heavily upon the inbound tourism market and understanding where those tourists are coming from is important for the long-term success of TVC. Using industry leading Global Positioning System (GPS)-based data gathered from mobile devices, the true visitation estimate quantified the number of visitors to the Traverse City area. Table 4.2 summarizes the true visitation estimate for the Traverse City area by year, peak season and for visits that are generated beyond 200 miles of Traverse City. Traverse City as a whole attracts more than 36 million visits to the area. While the vast majority of visits come from the immediate area (within 200 miles), approximately 20 percent of visits (7.45 million) come from more than 200 miles of Traverse City. Since Traverse City is a very seasonal market, 59 percent of visits in 2019 occurred during the summer peak season. Overall, nearly 36,000 visits occur every single day from people coming from more than 200 miles of Traverse City. With TVC serving about 1,400 passengers per day in July 2019, TVC is capturing just 4 percent of peak season visitors that are coming from more than 200 miles of Traverse City. While some visitors drive long distances from their homes to the Traverse City area, the majority of visitors, especially from further away markets, are flying into alternate airports such as DTW and GRR, and then drive to the Traverse City area, adding significant time and expense to their travels.

Visitation to Traverse City shifted significantly due to COVID-19. While overall peak season visitation remained relatively steady, the makeup of visitors shifted dramatically to those coming from closer distances. The implementation of travel restrictions from historically strong markets (e.g., New York and New England) and the significantly reduced service at TVC resulted in a major decline in visitation from markets that are beyond a one day drive of Traverse City. Overall, visitation from 200 miles away

TABLE 4.2 TRAVERSE CITY TRUE VISITATION

TIME PERIOD ESTIMATED

VISITORS ESTIMATED

VISITS AVERAGE

VISITS/PERSON VISITS/DAY CY 2019 - Total 5,190,000 36,740,000 7.1 100,658

CY 2019 - Beyond 200 miles 1,580,000 7,450,000 4.7 20,411 Peak Season 2019 - Total 3,400,000 15,780,000 4.6 129,344

Peak Season 2019 - Beyond 200 miles 1,110,000 4,390,000 4.0 35,984 Peak Season 2020 - Total 3,390,000 15,630,000 4.6 128,115

Peak Season 2020 - Beyond 200 miles 844,600 3,520,000 4.2 28,852 Source: Mead & Hunt, Inc.; TVC True Visitation Estimate YE Q4 2019

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declined over 20 percent in 2020. The decline in longer distance visitation impacts the Traverse City economy significantly as visitors who fly tend to spend significantly more in the local economy than those who drive. Table 4.3 details the top Metropolitan Statistical Areas (MSAs) for visitation to Traverse City from beyond 400 miles. The 400-mile distance from TVC represents a threshold for travelers that will typically take a full day or longer to drive and is therefore the most likely to be able to support air service to TVC. TVC had service to just eight of the top 20 MSAs that are beyond 400 miles.

TABLE 4.3 TRAVERSE CITY TRUE VISITATION BY MSA (400+ MILES)

RANK MSA SUMMER

2019 SUMMER

2020 VISITATION

CHANGE 1 New York-Newark-Jersey City, NY-NJ-PA 101,786 68,538 (33%) 2 Phoenix-Mesa-Scottsdale, AZ 81,069 48,047 (41%) 3 St. Louis, MO-IL 78,112 65,550 (16%) 4 Los Angeles-Long Beach-Anaheim, CA 76,600 49,188 (36%) 5 Houston-The Woodlands-Sugar Land, TX 69,770 53,374 (24%) 6 Miami-Fort Lauderdale-West Palm Beach, FL 66,670 60,634 (9%) 7 Washington-Arlington-Alexandria, DC-VA-MD-WV 60,458 47,397 (22%) 8 Tampa-St. Petersburg-Clearwater, FL 60,433 31,477 (48%) 9 Naples-Immokalee-Marco Island, FL 56,906 40,076 (30%)

10 Dallas-Fort Worth-Arlington, TX 54,992 48,608 (12%) 11 Denver-Aurora-Lakewood, CO 53,936 36,227 (33%) 12 Atlanta-Sandy Springs-Roswell, GA 50,427 26,183 (48%) 13 Minneapolis-St. Paul-Bloomington, MN-WI 45,500 42,111 (7%) 14 North Port-Sarasota-Bradenton, FL 44,631 29,212 (35%) 15 San Francisco-Oakland-Hayward, CA 42,702 18,549 (57%) 16 Boston-Cambridge-Newton, MA-NH 39,573 45,937 16% 17 Orlando-Kissimmee-Sanford, FL 38,915 17,552 (55%) 18 Cape Coral-Fort Myers, FL 36,904 17,471 (53%) 19 Nashville-Davidson-Murfreesboro-Franklin, TN 36,551 25,646 (30%) 20 Louisville/Jefferson County, KY-IN 36,056 33,083 (8%)

Source: Mead & Hunt, Inc.; TVC True Visitation Estimate YE Q4 2019 Overall, the greater New York City area is the largest MSA with 101,786 visits in summer 2019; however, COVID-19 severely impacted the visitation in 2020, down 33 percent. While TVC has service to New York, it is primarily less-than-daily on the weekends. In summer 2019, TVC averaged approximately 90 PDEW to New York City, including Newark, New York-LaGuardia and New York-Kennedy airports, which is just 11 percent of the estimated visitation generated. Only Boston showed an increase in visitation in 2020, as the reduced flights available at TVC and COVID-19 severely impacted visitation to Traverse City. It is critical for the region that additional capacity is added to TVC, with many of the top markets being non-traditional that are suited to a new entrant carrier, such as Avelo Airlines, Breeze Airways, JetBlue Airways or Southwest Airlines.

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High Cost of Air Travel

The Order Soliciting Community Proposals indicated that the U.S. DOT will compare the local community’s airfares to the national average airfares for similar markets using the BTS database. The BTS report for calendar year 2019 shows that TVC’s average fare is excessively high compared to the national average for all markets. TVC has an average domestic roundtrip fare of $498, 41 percent higher than the national average of $352. Table 4.4 shows the average fare at TVC compared to the closest 20 airports in terms of annual passengers in the BTS report using Diio Mi average domestic fares for calendar year 2019. The airports range from New York to Florida to California to Alaska. TVC’s domestic one-way average fare of $236 based on Diio Mi calendar year 2019 was higher than all but three (Charleston, Jackson Hole and Key West) of TVC’s peer markets and was 11 percent higher than the average domestic fare generated by these 20 peer markets. When comparing average fares to the national average or to peer markets, TVC’s fares are higher than average, meeting the U.S. DOT priority selection criteria for this SCASDP grant application. As shown in this section, Air Service Needs and Deficiencies, there are considerable air service needs and deficiencies for the Traverse City community. The Strategic Plan helps to address these needs.

TABLE 4.4 AVERAGE ONE-WAY DOMESTIC FARE PAID

AIRPORT

DOMESTIC ONE-WAY

FARE TVC %

HIGHER Belleville, IL $63 273%

Newburgh, NY $151 57% Newport News, VA $224 6%

Charleston, WV $237 (1%) Bloomington, IL $162 46% Tri-Cities, TN $223 6%

Fayetteville, NC $232 2% Evansville, IN $210 13% Melbourne, FL $194 22%

Grand Junction, CO $219 8% Traverse City, MI $236 - Santa Rosa, CA $162 46%

Lafayette, LA $223 6% San Luis Obispo, CA $232 2% Gulfport/Biloxi, MS $211 12%

Mobile, AL $230 3% Bangor, ME $209 13% Juneau, AK $192 23%

Kalispell/Glacier, MT $216 9% Jackson Hole, WY $273 (13%)

Key West, FL $237 (0%) Total/Average $213 11%

Source: Diio Mi; YE Q4 2019

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SECTION 5 STRATEGIC PLAN

The Strategic Plan proposed by Traverse City will achieve the community’s goals and help to alleviate the community’s air service needs and deficiencies. This section provides a detailed description of the goals of the project, a plan for attaining those goals, the detailed market analysis proving long-term success of the proposed service and the necessary funding to support the service. This section also identifies the legal sponsor administering the program, the public-private partnership that has been formed to actively participate in implementing the proposed project, and how this plan differs from previous SCASDP grant awards.

Public-Private Partnership

Northwestern Regional Airport Commission is the sponsor of TVC and this grant application. Kevin Klein, AAE, Airport Director, is the signatory party of the legal sponsor. A public-private partnership has been established in support of this grant application with Traverse City Tourism. Support letters from the public-private partners are included in Appendix A. Each of the partners is committed to and has an active role in the public-private partnership (Table 5.1). Northwestern Regional Airport Commission will execute, manage and administer the grant and revenue guarantee. The Commission will also develop and administer the marketing campaign. Traverse City Tourism will work with TVC on sales and marketing efforts to support the new air carrier.

Project Goals

The Strategic Plan is to secure nonstop service by a new entrant airline to add additional capacity and routes at TVC. By adding an additional competing airline at TVC, many of the air service needs and deficiencies identified in the previous section will be alleviated. TVC suffers from significant leakage to alternate airports not only due to fares that are substantially higher than the national average but also due to the limited capacity available at TVC, especially during the peak summer period. Additional service by a new entrant airline will provide access to markets/airports that the incumbent airlines have be unwilling to serve. A new entrant airline such as Avelo Airlines, Breeze Airways, JetBlue Airways or Southwest Airlines would help to spur service to new unserved routes and add much needed capacity to TVC.

TABLE 5.1 PUBLIC-PRIVATE PARTNER ROLES PUBLIC-PRIVATE

PARTNER ROLE Public Partners

Northwestern Regional Airport Commission/TVC

Grant and revenue guarantee administration/

Develop & administer marketing campaign

Private Partners

Traverse City Tourism Marketing support and

airline promotion throughout the region

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Airline Participation

TVC has had recent correspondence with multiple airlines regarding potentially adding new service at TVC. Due to the COVID-19 pandemic and uncertainty of future schedules and demand, airlines have been unable to provide concrete timelines regarding adding service at TVC. These discussions have consistently raised the issue of startup risks post COVID-19 and the need to offset these financial risks due to airlines’ relatively weak balance sheets. TVC plans on having follow-up meetings with targeted new entrant airlines in the near future regarding new service for 2022 with support from a SCASDP grant.

Market Opportunities

Due to the uncertainty of COVID-19 and air travel demand over the coming months, there is not a single route that is the “best opportunity” for TVC. While TVC enjoyed a much stronger 2020 than most markets due to its leisure component, the uncertainty of how quickly travel rebounds and for which region remains. TVC’s SCASDP grant application is purposefully broad to recruit a new entrant carrier that will add service to unserved or underserved markets that TVC’s incumbent carriers are unlikely to serve. This subsection will discuss potential opportunities for two of the target airlines, JetBlue and Southwest. Other potential new entrant airlines, such as Avelo or Breeze, are new entrant airlines that are planning on commencing new service in 2021. Both airlines have kept their route offerings confidential while they finalize plans. It is likely that each airline will operate to key markets that have high visitation and demand to and from Traverse City; however, specific opportunity estimates are unable to be performed due to this confidentiality.

JetBlue Airways

Table 5.2 shows the potential passengers and revenue for JetBlue service at TVC. JetBlue’s hub operations at Boston Logan International Airport (BOS), Fort Lauderdale-Hollywood International Airport (FLL) and New York’s John F. Kennedy International Airport (JFK) fit well with demand from Traverse City. TVC does not have service to either BOS or FLL. While TVC does have service to Newark Liberty International Airport (EWR) and New York’s LaGuardia Airport (LGA), the demand to/from the New York metro area far exceeds current service levels. In a review of true market passengers alone, the New York area has over 190 PDEW and the overall true visitation from the New York area to Traverse City is more than 830 visits per day in summer 2019. Nonstop service to the New York metro area on

TABLE 5.2 TVC OPPORTUNITIES FOR JETBLUE AIRWAYS TYPE OF

PASSENGER (PAX)

2019 FLOWN PDEW

TRUE MARKET

PDEW

CY 2019 AVERAGE

FARE

POTENTIAL REVENUE (PER DAY)

Boston, MA (BOS) - Summer Seasonal Local Pax 27.3 44.5 $213 $9,479

Connecting Pax 103.0 212.2 $236 $50,076 Total Pax 130.3 256.7 $232 $59,554

Fort Lauderdale, FL (FLL) - Annual

Local Pax 19.6 53.8 $250 $13,450 Connecting Pax 8.4 23.6 $309 $7,293

Total Pax 28.0 77.4 $268 $20,743

New York, NY (JFK) - Summer Seasonal Local Pax 89.1 191.2 $226 $43,211


Source: Diio Mi, Mead & Hunt True Market Estimate; Connections limited to 1.5 circuity

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JetBlue would add service to a new airport, additional connectivity at JetBlue’s largest hub and much needed additional frequency to the New York City area. The Boston metro area was the only MSA in the top 20 that had an increase in visitation in summer 2020 and is one of the top true markets without nonstop service from TVC. While the local true market estimate for BOS was 44.5 PDEW in summer 2019, the overall visitation per day from the Boston metro area was 324. The Boston metro area has significant local demand for outbound TVC catchment area residents and the inbound visitor market. FLL offers a unique opportunity for JetBlue to serve TVC year-round. With significant traffic to and from south Florida, FLL service could be supported during the winter for TVC catchment area residents to go to south Florida and connect beyond on the myriad of connections at their hub and for visitors during the summer when south Florida becomes the sixth largest inbound MSA for visitation, with higher visitation than other markets currently with nonstop service such as Dallas, Denver, Atlanta or Minneapolis.

Southwest Airlines

Traverse City has had numerous conversations and meetings with Southwest over the years regarding TVC. With their recent route announcements, including seasonal service to Steamboat Springs, TVC believes that Southwest is an ideal candidate for adding service. Southwest’s hybrid model which relies on large connecting cities and point-to-point service is an ideal fit for TVC to add much needed capacity and service to markets that are unlikely to attract service by incumbent airlines. With significant visitation to Traverse City, there are several Southwest routes that could support summer seasonal service, either daily or less-than-daily, with many of the markets not having nonstop service offered today at TVC. Table 5.3 reviews the potential passengers and revenue for Southwest service at TVC for the top three potential markets. Baltimore/Washington International Thurgood Marshall Airport (BWI) is a large hub for Southwest and, with access to the greater Washington, DC metro area, it has significant local demand from TVC, with a true market of nearly 90 PDEW. Combined, the greater

TABLE 5.3 TVC OPPORTUNITIES FOR SOUTHWEST TYPE OF

PASSENGER (PAX)

2019 FLOWN PDEW

TRUE MARKET

PDEW

CY 2019 AVG

FARE

POTENTIAL REVENUE (PER DAY)

Baltimore, MD (BWI) - Summer Seasonal Local Pax 41.8 89.5 $215 $19,243


Houston, TX (HOU) - Summer Seasonal

Local Pax 24.4 59.8 $278 $16,624 Connecting Pax 163.4 338.8 $274 $92,991

Total Pax 187.8 398.6 $275 $109,615

Nashville, TN (BNA) - Summer Seasonal Local Pax 12.5 17.9 $219 $3,920


Source: Diio Mi, Mead & Hunt True Market Estimate; Connections limited to 1.5 circuity

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Washington, DC and Baltimore MSAs generated nearly 90,000 visits to Traverse City in summer 2019 (737 visits per day). Houston’s William P. Hobby Airport (HOU) is another top market for Southwest, with strong local and connecting market opportunities. With a local true market size of 59.8 PDEW and the Houston metro area being the fifth largest true visitation MSA in summer 2019 with 69,770 visits, the Houston metro area can easily support service to TVC. In addition, while Nashville International Airport (BNA) only has a true market estimate of 17.9 PDEW to/from TVC, the Nashville metro area is the 19th largest MSA for visitation, with 300 visits being generated each day. Combined with the large connecting potential, BNA is a top opportunity for Southwest at TVC.

Incentive and Support Plan

New service initiatives such as the one proposed in this Strategic Plan are expensive and financially risky for the airlines. Accordingly, airlines are cautious and highly risk averse requiring communities to partner with them to reduce economic uncertainty and the hurdles to success. The COVID-19 pandemic and subsequent financial challenges facing the airlines has only exacerbated the problem. In today’s industry, community risk mitigation programs have become an expectation. To be effective, airline support packages must be structured to address the realities of today’s industry and ensure that investments made are quick to respond. The public-private partnership proposes an incentive program that includes ground handling offset, station startup offset and airport fee waivers to reduce airline economic risk. The program also includes a marketing campaign to create service awareness.

Ground Handling Offset

The ability for a new entrant airline to start service at TVC in a cost-effective manner will help in recruiting a new entrant airline. By providing up to $250,000 for ground handling reimbursement for the first year of service, TVC will help to reduce the financial risk associated with starting new service. This will also allow TVC to incentivize more than a single route for a new entrant airline, since many times new service begins with less-than-daily service.

Station Startup Offset

The current economic crisis affecting the airlines due to the COVID-19 pandemic will likely continue to impact the industry for several years, and that has made airlines especially careful with capital expenditures. Starting up a station can be expensive, and TVC wants to alleviate as much of the cash outlay for a new entrant airline as possible. TVC will provide up to $50,000 for station buildout for a new entrant airline including signage, information technology (IT) infrastructure at the terminal and other station startup costs as identified.

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Airport Fee Waivers

The incentive program includes substantial fee waivers, covering landing fees and terminal rents for the first two years of service. Landing fees are assessed at $1.40 per 1,000 pounds of maximum landing weight. Assuming the use of an Airbus A320 or B737-800 daily, landing fees approximate $64,880. Waiver of the terminal rents includes the office space and joint use space and is estimated at $245,675.

Marketing Campaign

The comprehensive marketing plan will target residents of the TVC catchment area and visitors looking to travel to the Traverse City area in order to increase awareness of the new airline and its benefits to the traveling public. Service failure and continued drive diversion often result from a lack of awareness of available air service at the local airport. Air service supported by a well-designed marketing campaign can increase the level of passengers, reduce drive diversion and ultimately help the community retain the service long term. In addition, TVC has worked closely with the State of Michigan’s “Pure Michigan” marketing program, and there is no better region that defines “Pure Michigan” like the Traverse City area. TVC will coordinate with regional and state partners’ marketing efforts to promote the new entrant airline. TVC will be responsible for development and oversight of the marketing campaign. The target audience is leisure travelers and mid-to-upper income households. The goal of the promotion program at TVC is to increase ridership and decrease diversion to other airports. The marketing campaign will include traditional marketing (e.g., print, radio and outdoor advertising), digital marketing (e.g., social media and airport website) and promotional marketing (e.g., public relations, sales and promotions). TVC and Traverse City Tourism have a long history of working closely together on marketing air service and numerous marketing firms have combined to offer $215,000 for in-kind marketing efforts for a new entrant airline at TVC. The total proposed cash outlay for the marketing plan is $300,000, with $50,000 to float as needed between the marketing mediums for specific marketing targets. TRADITIONAL MARKETING ($130,000 CASH): Traditional marketing primarily consists of media outlets such as print, radio and outdoor advertising. The partnership will work closely with key print outlets to provide targeted marketing to promote air service through print ads. The partnership will work with a myriad of regional partners and Destination Marketing Organizations (DMOs) to increase awareness of visitors to Traverse City. TVC has partnered with media outlets in numerous cities to promote Traverse City and TVC as a destination, and those same mutually beneficial arrangements will be pursued for this new service. DIGITAL MARKETING ($100,000 CASH): Digital marketing has become a key facet of marketing. Working with DMOs and regional partners, TVC will create a digital marketing campaign to increase awareness of Traverse City and the new entrant airline. Using paid and earned digital media marketing, TVC will urge visitors who would otherwise use alternate airports to use the new airline’s service at TVC.

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PROMOTIONAL MARKETING ($20,000 CASH): The public relations campaign will include media releases, articles in the trade or industry press, local trade shows, media kits, newsletters and public speaking opportunities. The goal for the public relations campaign is to make the public aware of the new service.

Strategic Plan Funding

The public-private partnership is requesting U.S. DOT assistance in funding 45 percent, or $500,000, of the Strategic Plan. The remaining funds will be provided by airport and non-airport sources. Table 5.4 provides the Strategic Plan budget by element and sources of funding. The community will fund 55 percent of the Strategic Plan, with 8 percent of the cash requirement from non-airport sources. TABLE 5.4 STRATEGIC PLAN BUDGET

DESCRIPTION

FUNDING SOURCE

TOTAL U.S. DOT AIRPORT NON-AIRPORT

CASH CASH IN-KIND CASH IN-KIND Ground Handling Offset $250,000 - - - - $250,000 Station Startup Offset - $50,000 - - - $50,000 Airport Fee Waivers Landing fees - - $64,880 - - $64,880 Terminal rents - - $245,675 - - $245,675 Marketing Campaign $250,000 - - $50,000 $215,000 $515,000

Total $500,000 $50,000 $310,555 $50,000 $215,000 $1,125,555 Percent of total project 45% 4% 28% 4% 19% 100% Percent of cash outlay 84% 8% - 8% - 100%

Project Continuation and Sustainability

It is anticipated that a new entrant airline will be self-sustaining after the start-up period which can take up to a year. However, a leading cause of failure is lack of awareness of the service. If at the end of the first 12 months of service the load factor does not meet a level satisfactory to the airline, the public-private partnership will consider funding an additional marketing campaign. The public-private partnership is committed to the success of this project, has a vested interest in the outcome of this Strategic Plan, and understands the difficulties associated with profitably operating air service.

Previous Grant Recipient – New Project and Goals

TVC has been awarded two SCASDP grants, in 2009 and 2015. The 2009 grant targeted year-round Denver service to expand existing seasonal service. While United continues to fly summer seasonal Denver service, the service was not expanded to year-round due to aircraft constraints and lack of available resources. Grant funds were returned to the U.S. DOT. In 2015, TVC was awarded a grant to support Charlotte, Houston or Dallas-Fort Worth service to improve access to the southern U.S. In 2019, the grant was amended to include Sarasota as a new service option as American Airlines began Charlotte summer seasonal service in 2019 and Dallas-Fort Worth summer seasonal service in 2017 without grant assistance. After grant amendment, grant funds were used for Elite Airways service to Sarasota. The service was operated for an extended season in 2019; however, the service did not return in 2020 due to COVID-19. This grant is different from the first two grants. The primary and only objective of this grant is to add a new entrant air carrier. The previous grants targeted specific destinations. As demonstrated, this application qualifies as a new project and meets the requirements of the SCASDP.

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SECTION 6 SCHEDULE AND MONITORING

The public-private partnership has developed a realistic timetable to achieve the goals of this grant application. This section provides critical milestones to be achieved by the public-private partnership. A monitoring program is also provided to track the progress the new entrant airline. Due to the timing of the SCASDP grants, a start date of summer 2022 has been included; however, if the grant awards are available for a summer 2021 start, TVC will explore the ability to start sooner. Strategic Plan Schedule and Milestones

The following milestones are proposed to track the progress of this air service initiative. The timeline is highly dependent on the date of the U.S. DOT’s grant award and the service start date. Marketing Campaign (January 2022): Development of the marketing campaign will be completed upon notification by the airline of pending service. The marketing campaign will be completed in time to begin marketing service 60 days prior to service initiation, anticipated for May 2022. It is expected that the marketing campaign will continue throughout the first year of service at a minimum. Service Initiation (May 2022): The service start date is the critical date for the rest of the Strategic Plan. It is anticipated that new airline service will begin in late May 2022. Air service initiation is dependent on airline route planning and availability of right-sized aircraft for the TVC market. Incentive Agreement Completion (May 2024): At the end of the first two years of service, the incentives and marketing will be fully exhausted. If the service start date

changes due to airline circumstances and/or equipment availability, the incentive term will change accordingly. Service Sustainability (May 2023): If service performance is below airline expectations, the public-private partnership will invest in additional marketing to help the service reach the potential passenger levels required for carrier success.

Monitoring Program

The following methods will be used to monitor performance and impact of the new service: • Monthly: Review airline performance

indicators (e.g., load factors by flight, enplanements, flight cancellations, passenger ramp-up, ticket revenue)

• Quarterly: Track walk-up, business and leisure published airfares for the top 25 markets to ensure fares are competitive with competing airports. Fare issues will be communicated to incumbent airlines.

• 9 months: Complete an overall assessment of the program to determine if additional community support is needed beyond year one.

• Annually: Update the true market estimate and true visitation estimate to evaluate the use of TVC by local and inbound travelers.


APPENDIX A LETTERS OF SUPPORT

Appendix A includes letters of support for Northwestern Regional Airport Commission’s application to the U.S. DOT to recruit a new entrant airline. Support letters were submitted by participants in the public-private partnership and other members of the Traverse City community. The letters of support are included on the following pages of this Appendix A and are listed below.

Public-Private Partners

Northwestern Regional Airport Commission Traverse City Tourism

Federal, State and Local Government

Congress of the United States, Congressman Jack Bergman

United States Senate, Senator Gary C. Peters

Businesses and Organizations

EJ USA, Inc. Hagerty Group Interlochen Center for the Arts National Cherry Festival The Gaylord Area Convention & Tourism Bureau Traverse City Horse Shows Traverse Connect

DocuSign Envelope ID: C8DBFA7E-885E-4FEC-9F82-625C134222EE

February 8, 2021 Brooke Chapman, Associate Director Small Community Air Service Development Program Office of Aviation Analysis 1200 New Jersey Ave, SE W86-307 Washington, DC 20590 Subject: Cherry Capital Airport Small Community Air Service Development Program Grant Application Dear Ms. Chapman: I am writing this letter to show Traverse City Tourism’s (TCT) support for Cherry Capital Airport’s (TVC) grant application. TCT is the destination organization for the greater Traverse City region and a strategic partner with TVC in promoting the growth and sustainability of business and leisure travel via air travel. TCT has worked hard to establish the Traverse City region as a world class, Pure Michigan destination. As demand for our destination grows, more options for air service are essential. Such options serve to meet existing consumer demand, and also to fuel it. Our research shows that visitors traveling into market by air stay longer and, on average, spend more in market than those using other transportation modes, making continued growth of TVC’s flight offerings a high priority for the hospitality and travel sector. One in six jobs in the Traverse City area depends on tourism; increasing flight options and volume is critical to our region’s economic success now and into the future. While many destinations suffered significant losses in tourism due to COVID-19, the Traverse City area was far more resilient. Travelers are seeking out less populated yet sophisticated destinations like Traverse City more than ever, and market studies indicate they will likely continue to do so into the foreseeable future. The Traverse City hospitality community is prepared to accommodate this influx in visitors, but TVC needs adequate service to bring the visitors to market. This grant will support the essential work to increase visits by air and thereby stimulate our economy. Our region features many excellent host sites for conferences, conventions and meetings, and one of the challenges that meeting and event organizers often site is the transportation challenges for such events. Increasing and extending the season for key flight segments will bolster our competitiveness, allowing planners to bring more and larger groups to the area, thus jointly increasing the sustainability of our industry and TVC during what have typically been slower travel periods. While our driving distance can be prohibitive for large groups from Chicago or the East Coast, we are just a short flight away. TCT is philosophically and financially dedicated to partnering with TVC on the promotion and development of the travel economy in the Traverse City area. We’ve successfully partnered together on this effort for many years and are inextricably linked in this important marketing partnership. We are enthusiastic and will provide whatever support we can to any efforts that result in the increase of air travel options through TVC.

I’m happy to answer any questions or provide additional information should it be helpful. Thank you for your consideration of TVC for this grant opportunity. Kindest Regards,

Trevor Tkach President / CEO

February 17, 2021

Brooke Chapman, Associate Director

Small Community Air Service Development Program

Office of Aviation Analysis

1200 New Jersey Ave, SE W86-307

Washington, DC 20590

Subject: Cherry Capital Airport Small Community Air Service Development Program Grant

Application

Dear Ms. Chapman:

I write on behalf of Cherry Capital Airport, which is applying for a grant through the Small

Community Air Service Development Program (SCASDP). I urge your fair and full

consideration of Cherry Capital’s application.

Cherry Capital Airport is a pillar of travel, tourism, and economic prosperity in Grand Traverse

County and the surrounding communities in Michigan’s First Congressional District. The

SCASDP grant the airport is seeking will help them better meet the needs of families and small

businesses in our region. Specifically, Cherry Capital is seeking to use SCASDP grant funds to

address start-up costs, ground handling, and marketing. Additional support in these areas will

ensure this critical airport has the resources to continue safely and successfully connecting our

local – often rural and remote – communities to the world.

Thank you for your consideration of this request. Please do not hesitate to reach out to Remy

Fortin ([email protected]) should you have any questions.

Sincerely,

Jack Bergman

Member of Congress

mailto:[email protected]

February 24, 2021

Brooke Chapman, Associate Director

Small Community Air Service Development Program

Office of Aviation Analysis

1200 New Jersey Ave, SE W86-307

Washington, DC 20590

Dear Ms. Chapman:

RE: Cherry Capital Airport Small Community Air Service Development Program Grant Application

EJ has our corporate headquarters located in East Jordan, Michigan. The company was established here in 1883 and has continued to grow over the years. We currently have manufacturing, distribution, and branch offices located throughout the world. We have a very strong presence in North America, Europe and the Asia-Pacific Regions. We depend on the Cherry Capital Airport in Traverse City as our home base to travel from to the rest of the world. We also have many our team members, from across the globe, travel to our headquarters and facilities in Northern Michigan. This also has a ripple effect as many of our major suppliers and customers visit on a regular basis. A year ago, we held our last major meeting with approximately 250 people flying in from around the world for our annual meeting at the Grand Traverse Resort. This year we met virtually, but we do anticipate returning to a new normal, later this year. Obviously, we hope to see an increase in activity in the future and hope that the airport is supported by the major airlines. Our needs are on a year-round basis vs the large increase in tourist-based activities and flights in the summertime. Most of these schedules do not support business travel as they take place around the weekends. We are big supporters of the Cherry Capital Airport. They’ve done a great job and have continuously improved and grown, as we have grown. We appreciate the job they do and hope that they can continue to grow. Best Regards, EJ USA, INC.

Thomas M. Teske Vice President & General Manager

February 24, 2021 Brooke Chapman, Associate Director Small Community Air Service Development Program Office of Aviation Analysis 1200 New Jersey Ave, SE W86-307 Washington, DC 20590 Dear Ms. Chapman, Please consider the Cherry Capital Airport’s application for the Small Community Air Service Development Program grant. Interlochen Center for the Arts (ICA) is an international arts boarding school and arts camp that largely relies on the Airport for transporting students, families, staff, guest artists, and major stakeholders to and from our Interlochen campus. During the school year for our Academy, we have nearly 500 high school students and their families traveling from all over the nation and the world; and in the summer for our Camp, we have nearly 2,500 young people and their families and 1,200 summer staff also traveling to our campus both domestically and internationally. As a global institution, our staff travels regularly to connect with prospective students, alumni, donors, and trustees. ICA is fortunate to have a strong relationship with members of the Airport, which is necessary when coordinating the safe arrival and departures of our many students. The relationship is very important because quite often we have hundreds of young artists travelling alone and arriving and departing around the same times. It is notable that the Airport manages the logistics required professionally and with great care in full support of ICA and our community. Although the Airport does all it can to make it possible for our students, families, and staff to have a safe and pleasant travelling experience, we believe their growth and expansion is an absolute priority for our organization and our region. Our community would benefit from expanded flight options, including economical airlines and/or fares, more direct routes, and broader itineraries. With these improvements, ICA could more readily attract talented students, staff, and guest artists who may otherwise be intimidated by the difficulty and cost of travelling to northern Michigan. The Airport is the first impression that many experience of both Traverse City and the United States and, therefore, directly influences the growth of both ICA and the entire Grand Traverse region. We strongly support this grant request and will make ourselves available to discuss further at your convenience. Sincerely,

Trey Devey President

6535 Bates Rd. Williamsburg, MI 49690

February 23, 2021 Brooke Chapman, Associate Director Small Community Air Service Development Program Office of Aviation Analysis 1200 New Jersey Ave, SE W86-307 Washington, DC 20590 Dear Ms. Chapman, Recently, I learned of the Traverse City Airport’s effort to obtain a Small Communities Air Service Grant with the U.S. Department of Transportation. As a principal owner in the Traverse City Horse Shows the addition of a new carrier to the Cherry Capital Airport would be a boost to our business. We run 12 weeks of elite level show jumping competition in Traverse City. In 2020, in the midst of the pandemic, nearly 34,000 people visited the Flintfields Horse Park. Those attendees came from 43 states, over 20 different countries were represented and 58% of competitors are from outside the Midwest (MI, OH, IN, IL, WI) region. Air service is an extremely important to our business model. Many exhibitors fly back and forth to compete weekly while their horses remain on the grounds. Similarly, our organization has weekly flight needs as we rotate officials. The addition of a new carrier would not only make travel easier on our current customers and us; it would allow us to attract new attendees who currently do have easy flight routes to Traverse City. Convenient air travel is an important part of our customer’s decision-making process when choosing where to compete. We sincerely hope that the Cherry Capital Airport receives this grant, as there is a definite need for another carrier to service Traverse City. More direct flights and airline choices will have a positive impact on our business and the entire tourism industry in the Traverse City area. Sincerely,

Matt Morrissey Vice President Traverse City Horse Shows

February 12, 2021 Brooke Chapman, Associate Director Small Community Air Service Development Program Office of Aviation Analysis 1200 New Jersey Ave, SE W86-307 Washington, DC 20590

RE: Cherry Capital Airport Small Community Air Service Development Program Grant Applicant Dear Ms. Chapman: Please accept this letter of support for Cherry Capital Airport’s grant application for the Small Community Air Service Development Program. As the President and CEO of Traverse Connect, the lead economic development organization for the Grand Traverse region, I consider expanded air service a critical aspect of strengthening our local economy across every industry, from tourism, to manufacturing, to professional services. Our 1,100 member businesses rely on Cherry Capital Airport to bring tourists and conference attendees to this region and to allow local business development staff to access global markets. Travel and tourism are our largest industry in our area and a main driver of economic growth and jobs. Our current air service options are limited and place significant barriers on our ability to attract travelers and vacationers. By the same token, our professional service firms, technology companies, and manufactures face high airfare and long, multi-leg itineraries when leadership, sales, and marketing teams travel for work. These constraints hinder our ability to grow jobs and strengthen our community. We are several hours from larger hub airports and the need for more flight options is routinely mentioned in our local business surveys and business retention discussions. Expansion of air service at Cherry Capital Airport will provide much needed additional travel options for tourism visitors, allow our business to expand more successfully, and provide residents with better access to travel options as well. Your support for this request will allow us to address a key region-wide economic development priority. Please do not hesitate to contact me directly for further information in support of this application.

Sincerely, Warren M. Call President & CEO Traverse Connect

Documents

Traverse City, Michigan - Regulations.gov