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Support for Minimum Revenue Guarantee to attract an Ultra Low Cost Carrier to Dubuque Regional AirportCity of Dubuque City Council Meeting Action Items # 01. Copyrighted October 3, 2022 ITEM TITLE: Support for Minimum Revenue Guarantee to attract an Ultra Low Cost Carrier to Dubuque Regional Airport SUMMARY: City Manager recommending the City of Dubuque budget $250,000 a year for two years for a total of $500,000 towards a Minimum Revenue Guarantee to get an Ultra Low Cost Carrier to provide four flights a week, two to Orlando, Florida and two to Fort Myers, Florida on a 737-800, 180-seat aircraft. Airport Director Todd Dalsing will make a presentation. SUGGESTED Receive and File; Approve; PresentationSuggested Disposition: DISPOSITION: ATTACHMENTS: Description Type Support for Minimum Revenue Guarantee to attract an Ultra Low Cost Carrier to Dubuque Regional Airport- City Manager Memo MVM Memo Airport New Air Service Agreement -City Manager Staff Memo Memo Airport New Air Service Agreement -Airport Supporting Documentation Commission Memo Airport New Air Service Agreement- D RA Letter of Supporting Documentation Support Airport New Air Service Agreement-GDDC Letter of Supporting Documentation Support Airport New Air Service Agreement -Chamber Letter of Supporting Documentation Support Presentation Supporting Documentation THE CITY OF Dubuque DUB TEE1. All -America City Masterpiece on the Mississippi � pp zoo�•*o 13 zoi720zoi9 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Support for Minimum Revenue Guarantee to attract an Ultra Low Cost Carrier to Dubuque Regional Airport DATE: September 29, 2022 The Dubuque Regional Airport Commission and Airport Staff continue to work with travel partners, especially the Dubuque Area Chamber of Commerce Air Service Task Force, to provide options to improve commercial air service with a three pronged strategy: a. Restore daily commercial air service to major hub(s) with connecting fights. b. Begin weekly commercial air service to leisure destination(s). c. Support Dubuque Area Chamber of Commerce coalition to restore, sustain and enhance air service. In furtherance of strategy "b", Airport Director Todd Dalsing is recommending that the City of Dubuque budget $250,000 a year for two years for a total of $500,000 towards a Minimum Revenue Guarantee to get an Ultra Low Cost Carrier to provide four flights a week, two to Orlando, Florida and two to Fort Myers, Florida on a 737-800, 180-seat aircraft. This request has been approved by the Dubuque Regional Airport Commission and is supported by the Dubuque Area Chamber of Commerce Air Service Task Force. Letters of support have been submitted by the Greater Dubuque Development Corporation and the Dubuque Racing Association. The actual Minimum Revenue Guarantee is $500,000 a year for two years, for a total of one million dollars. A request is being considered by the Dubuque County Board of Supervisors for the remaining funding. The source of the City of Dubuque funding would be $150,000 from the Urban Development Action Grant Business Loan repayments and $350,000 from the allocation of American Rescue Plan Act funding the city of Dubuque had received from the federal government. This was $350,000 that had been allocated for fiber optic projects leaving $2,650,000 for that purpose. In 2019 the Dubuque area generated 20,355 visits to Orlando and in 2021 the Dubuque area generated 11,601 visits to Fort Myers. Airport Director Todd Dalsing will have a presentation to City Council on this item. I concur with the recommendation and respectfully request Mayor and City Council approval. v Mic ael C. Van Milligen MCVM:sv Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Todd Dalsing, Airport Director Molly Grover, Dubuque Area Chamber of Commerce President & CEO Q ' ' Telephone: (563)589-4233 Fax: (563)589-4108 e-mail: tdalsing@cityofdubuque.org DUBUQUE REGIONAL AIRPORT Memorandum To: Mike Van Milligen, City Manager From: Todd Dalsing, Airport Director Date: September 29, 2022 Subject: Commercial Air Service Agreement Negotiations INTRODUCTION Airport Commission and Staff continue to work with travel partners to provide options to improve commercial air service: a. Restore daily commercial air service to major hub(s) with connecting flights. b. Begin weekly commercial air service to leisure destination(s). c. Support Dubuque Area Chamber of Commerce coalition to restore, sustain and enhance air service. Current negotiations with an Ultra -Low -Cost Carrier (ULCC) for new air service agreement, 4 flights a week, 2 to Orlando, 2 to Fort Meyers on 737-800, 189 seat aircraft. (Option b. above) BACKGROUND See attached Commercial Air Service Agreement Negotiations memo to Airport Commission. Dubuque Regional Airport Commission following Chamber Air Service Task Force recommendation seeking financial assistance toward minimum revenue guarantee (MRG) to continue negotiations with ULCC. City of Dubuque $500,000 Dubuque County $500,000 Board of Supervisor Agenda, October 3, 2022 Minimum Revenue Guarantee (MRG) definition: With this type of incentive, the airline is guaranteed it will generate a specified amount of revenue from ticket sales associated with the new service. If the airline does not meet the target revenue, the local entity providing the guarantee makes a payment to the airline for the shortfall. The terms and guarantee periods associated with these agreements vary. Revenue guarantees are provided to limit the airline's risk associated with the service provided. Source: Airport Cooperative Research Program (ACRP) Using one flight as example: If ULCC requires $20,000 for each flight, if flight revenues equal $17,000, $3,000 would come from MRG to offset cost. ULCC will provide monthly reports to monitor progress. MRG pending payout will be based on a quarterly average of all flights. RECOMMENDATION City of Dubuque financial assist of $250,000 per year for 2 years ($500,000) toward ULCC minimum revenue guarantee portion of negotiations to provide weekly commercial air service to leisure destinations. BUDGET Current negotiations with ULCC: 1. Airport Commission waive rates and charges for 1 year - Approved 2. Marketing, $75,000 per year a. $25,000 Airport — In 2023 city budget b. $25,000 IDOT Aviation Grant — In 2023 DOT budget c. $25,000 Chamber — Pending board approval 3. Minimum Revenue Guarantee (MRG) $500,000 per year a. 2 destinations, Orlando/Fort Meyers, Florida, 4 flights a week 4. 2 Year Contract Above unfunded negotiations requiring funding totals in FY: FY 2023 1 st Year = $ 525,000 FY 2024 2nd Year = $ 575,000 2 Year Contract = $1,100,000 Dubuque Regional Airport Commission Waived Rates and Charges for one year during Tuesday, September 13, 2022, meeting. Breakdown included in attached Commercial Air Service Agreement Negotiations memo to Airport Commission. #3 pending above require $500,00 per year for 2 years = $1,000,000 MRG. Requesting: City of Dubuque $500,000 Dubuque County $500,000 ACTION TO BE TAKEN Respectfully request, City of Dubuque financial assist of $250,000 per year for 2 years ($500,000) toward ULCC minimum revenue guarantee to offer during final negotiations to provide weekly commercial air service to leisure destinations. Ro Q '' Telephone: (563) 589-4233 Fax: (563)589-4108 1.10 DUBUQUE REGIONAL AIRPORT e-mail: tdalsing@cityofdubuque.org Memorandum To: Airport Commission From: Todd Dalsing, Airport Director Date: September 9, 2022 Subject: Commercial Air Service Agreement Negotiations INTRODUCTION The Dubuque Regional Airport mission is to provide quality, viable, competitive airport services and facilities while promoting sustainable economic development within the region. Airport Commission and Staff continue to work with travel partners to provide options to improve commercial air service: a. Restore daily commercial air service to major hub(s) with connecting flights. b. Begin weekly commercial air service to leisure destination(s). c. Support Dubuque Area Chamber of Commerce coalition to restore, sustain and enhance air service. Current negotiations with an Ultra -Low -Cost Carrier (ULCC) for new air service agreement, 4 flights a week, 2 to Orlando, 2 to Fort Meyers on 737-800, 189 seat aircraft. (Option b. above) BACKGROUND In March 2022, Molly Grover, President and CEO of Dubuque Area Chamber of Commerce and I attended the Mead and Hunt Air Service Conference to listen to updated status of the airline industry from airline professionals and air service consultants and held face-to-face meetings with legacy and ULCC carriers. During meeting with ULCC's, carriers were provided data showing area demand. Negotiations lead to an initial proposal to one ULCC May, 2022. (Prior to American announcement). DBQ True Market Study top 5 destinations from airport catchment area: 1. Orlando, FL (MCO) 2. Denver, CO 3. Tampa, FL 4. Fort Myers, FL 5. Phoenix, AZ Airport Catchment Area Catchment area population 176,498- Population within 60-minute drive 400,000 MSN 103 2 hr, 0 min _ ... MU 80 1 hr, 20 min ORD 164 3 hr, 00 min CID 82 1 hr, 30 min MKE 178 3 hr, 60 min ! -- Proposed new service agreement would provide 4 flights each week. 2 to Orlando, 2 to Fort Meyers on Boeing 737 aircraft. 2021 market study shows 15,021 passengers flew to Orlando and 11,601 flew to Fort Myers. Total 26,802 from DBQ catchment area (approx. 40-mile diameter). Additional 35,440 flew from DBQ catchment area to other Florida airports in our top 25 domestic markets: # 3 Tampa, #8 Miami, #15 Fort Lauderdale, #18 St. Petersburg, #19 Orlando St. Pierre (FSP), #22 Punta Gorda. 2 Orlando Visitation Analysis ► Dubuque area generated 20,385 visits to Orlando in 2019 —392 visits per week on average Winter and school holidays are peak season for Dubuque visitation to Orlando ItUMEMISM r January 1,328 2,975 1,072 February 1,633 1,828 1,235 March 6,344 1,623 2,757 April 812 1,124 May 923 145 744 June 1,417 53 1,266 July 2,048 446 2,325 August 2,028 246 353 September 573 209 266 October 569 496 793 November 1,121 557 895 December 1,589 1,170 2,192 rXIS1 Fort Meyers/Punta Gorda Visitation Analysis ► Dubuque area generated 1 1,601 visits to Fort Meyers/Punta Gorda areas in 2021 —392 visits per week on average Winter and school holidays are peak season for Dubuque visitation to Southwest Florida �Mln January 1,024 733 754 February 1,012 1,309 1,411 March 1,047 1,519 2,493 April 869 86 651 May 103 120 423 June 264 105 1,005 July 366 388 26S August 247 145 340 September S7 203 112 October 1,011 588 673 November 557 452 584 December 380 11280 869 ULCC Air Service Agreement Local Impact: 1.) Economic Impact (Direct and Secondary) Economic Impact with Air Service DBQ Airport Master Plan, Total Economic Benefit — August 2022: 789 Jobs $35.0 Million Payroll $90.8 Million Output Economic Impact without Air Service DBQ Airport Master Plan, Total Economic Benefit — Updated August 2022: 596 Jobs $26.5 Million Payroll $64.1 Million Output 2.) AIP Program — Airport Improvement Program Funding Commercial Airport which has greater than 10,000 Enplanements - Primary Airports receive $1,000,000/year entitlement Commercial Airport which has less than 10,000 Enplanements — Non -Primary Airports receive $150,000/year entitlement Type of service (aircraft design group) at airports also impact the funding and ranking of FAA AIP eligible projects, for example an airport that has scheduled service with larger aircraft will qualify for increased design standards on taxiways and runways than airport that does not have service. ULCC would achieve 10,000+ enplanements to maintain DBQ AIP $1,000,000 entitlement eligibility status and larger aircraft design group. 3.) Passenger Facility Charge DBQ Airport received $4.39 passenger facility charge (PFC) for each passenger enplaned. DBQ has FAA approved PFC Plan dedicated to Airport Improvement Program Projects to pay annual debt service on local 10% match. 189 seat aircraft at 90% load factor = 35,381 passengers flying out of DBQ annually. ULCC Proposed Annual 35,381 pax X $4.39 = $155,323 4.) Job Retention -Terminal Employees Dubuque Jet Center Ground handling varies per flight TSA 5 FT, 5 PT = 10 Avis 1 FT, 1 PT = 2 Restaurant 2 FT = 2 5.) Perception Providing service reduces the public perception "airport is closed". ULCC = 4 flights a week to two destinations, 189 seat aircraft at 90% load factor = 35,381 passengers flying out of DBQ annually. 4 Pre-covid, 2019 American had 36,592 enplanements. 6.) Business Community ULCCs do not provide daily scheduled service that connect with other destinations but do provide leisure service. Employees can utilize this service and in the event of a conference or meeting at destination can take advantage of low fares. Option to book through Orlando International purchasing a second ticket on preferred air carrier. RECOMMENDATION Work with travel partners, follow Chamber of Commerce Air Service Task Force recommendations: a. Restore daily commercial air service to major hub(s) with connecting flights. b. Begin weekly commercial air service to leisure destination(s). c. Support Dubuque Area Chamber of Commerce coalition to restore, sustain and enhance air service. Accomplish letter b. above while continue to work on a. and c. BUDGET Current Negotiations with ULCC: 1. Airport Commission waive rates and charges for 1 year 2. Marketing, $75,000 per year a. $25,000 Airport — In 2023 city budget b. $25,000 IDOT Aviation Grant —In 2023 DOT budget c. $25,000 Chamber — Pending board approval 3. Minimum Revenue Guarantee (MRG) $500,000 per year* a. 2 destinations, Orlando/Fort Meyers, Florida, 4 flights a week 4. 2 Year Contract Above negotiations required funding totals in FY: FY 2023 1 st Year = $ 525,000 FY 2024 2nd Year = $ 575,000 2 Year Contract = $1,100,000 ULCC Airlines Air Service Incentives (assuming 4 flights weekly, 90% load factor, Boeing 737-800, 189 seats): Incentives Provided ULCC (100% Flights Completed) Year 1 ARFF Index B---- $200 per flight (waived) $41,600 Building Rent ----- $755 per month (waived) $ 9,060 DRO---------------- $60 per operation (waived) $12,480 Landing Fees ---- $132.18 per operation (waived) $27,493 Total Fees Waived $90,633 Revenues Received (100% Flights Completed) Year 1 Ground Handling--$700 per flight $145,600 Public Safety ------- $75 per flight 15,600 Total Revenues Received $161,200 Revenues Received Year 2 No Fees Waived $ 90,633 Revenues Received $161,200 Total Revenues Received $251,833 ACTION TO BE TAKEN Respectfully request Airport Commission approve: Resolution A1300-1-2022 Authorizing the Airport Director to Offer a One -Year Air Service Incentive Agreement to an Ultra -Low -Cost -Carrier Airline Providing New Air Service to the Dubuque Regional Airport. Airport Director and Staff will continue to work with Dubuque Area Chamber, City of Dubuque and Dubuque County to request funds for minimum revenue guarantee options. Enter into two year lease agreements for new commercial air service, ground handling and minimum revenue guarantee with an ULCC, pending final negotiations and City Legal review. RESOLUTION NO A1300-1-2022 RESOLUTION AUTHORIZING THE AIRPORT DIRECTOR TO OFFER A ONE-YEAR AIR SERVICE INCENTIVE AGREEMENT TO AN ULTRA -LOW -COST -CARRIER AIRLINE PROVIDING NEW AIR SERVICE TO THE DUBUQUE REGIONAL AIRPORT WHEREAS, the Federal Aviation Administration has generated an Air Carrier Incentive Program Guidebook that outlines an airport's ability to utilize air service incentives to air carriers; and WHEREAS, the proposed agreement may include, but is not limited to, waiving, or reducing landing fees, rental fees or fuel flowage fees and marketing assistance up to one year; and NOW, THEREFORE, BE IT RESOLVED BY THE DUBUQUE AIRPORT COMMISSION OF THE CITY OF DUBUQUE, IOWA: Section 1. That the Airport Director is authorized to offer a one-year air service incentive agreement waiving Airport Rates and Charges (fees), to include Aircraft Rescue Fire Fighting (ARFF), Building Rent, Designated Ramp Observer (DRO), and Landing Fees, to an Ultra -Low -Cost -Carrier Airline for providing new service to the Dubuque Regional Airport. Section 2. The Dubuque Regional Airport Commission Chair is hereby authorized and directed to sign this Resolution. Passed, approved, and adopted this 13th day of September 2022. Attest: irk) ��f l ��' Todd E. Dalsing, Michael J hillips, Airport Director Airport Commission Chair Mayor Brad Cavanagh City of Dubuque 50 W 13th Street Dubuque, IA 52001 RE: Support for an Ultra -Low -Cost Carrier (ULCC) in Dubuque Dear Mayor Cavanagh: We were all disappointed when it was announced earlier this summer that commercial airline services would be halted at the Dubuque Regional Airport. So, it was definitely a sad and frustrating day when American Airlines officially ceased local operations on September 7, 2022. This was clearly not the outcome we wanted, but now that the pullout of American Airlines has occurred, the community needs to rally around a common cause and do whatever is needed to find a way to return commercial air service to Dubuque as soon as possible. With this in -mind, the DRA Board fully supports the City of Dubuque helping fund the Minimum Revenue Guarantee (MRG) needed to attract an Ultra -Low -Cost Carrier (ULCC) for air service to the Florida market. As we understand it, the yet -to -be -named carrier proposes to board passengers in Dubuque for up to four roundtrip flights per week to Orlando and Fort Meyers. These are key leisure destinations for our market, so this would certainly be a step in the right direction and provide some welcome options for local travelers. But we cannot stop here, as we also need to continue looking for ways to bring back air service for area business travelers who regularly visit places like Chicago, Denver, Dallas, etc. We understand there are things occurring in the commercial airline industry that are well -beyond everyone's control, especially as it relates to staffing shortages and airlines trying to meet ever -changing market demands. However, it is also vitally important that the Dubuque Regional Airport does what it can to maintain its staffing, infrastructure and access to federal funding— all of which are needed if future investments are to be made to help facilitate the return of commercial service long-term. Bottom line, we simply cannot allow the airport to sit idle and "hope" that something changes, which is why action on many fronts is needed. Once again, we encourage the Dubuque City Council to commit to financially supporting the MRG funding request. By doing so, the city is making an investment in the future of our community — a community where we want families, businesses, job seekers and students to not only visit, but also call home. Thank you for your time and consideration and thank you for all you do on behalf of our community. Sincerely, Alex Dixon President & CEO Cc: Kevin Lynch, DRA Board Chair 1855 Greyhound Park Road I Dubuque, IA 52001 1 dradubuque.com TOGETHER, WE CAN MAKE AN IMPACT September 28, 2022 Mayor Brad Cavanagh City of Dubuque 50 W 13th Street Dubuque, IA 52001 RE: Support for Ultra -Low -Cost Carrier (ULCC) Dear Mayor Cavanagh: I4 Greater Dubuque DEVELOPMENT CORP. Schmid Innovation Center 900 Jackson 5t., Suite 109 Dubuque, IA, 52001 www. greo terd u b uq ue. org As you are well -aware, commercial airline services were halted at the Dubuque Regional Airport on September 7, 2022, when American Airlines ceased operations. While Greater Dubuque Development looks forward to American Airlines returning service to Dubuque, we also believe that actions must be taken immediately to maintain commercial service at the Dubuque Regional Airport. To that end, on September 27, 2022, the Greater Dubuque Development Board of Directors voted unanimously to support the Dubuque Regional Airport's request that the City of Dubuque help fund the Minimum Revenue Guarantee (MRG) to attract an Ultra -Low -Cost Carrier (ULCC) for air service to the Florida market. The ULCC (to -be -named) proposes to board passengers in Dubuque for round trip destinations to Orlando and Fort Meyers, for a total of four flights per week. These cities are two of the top five leisure destinations for commercial airline passengers from our market. This is a necessary stop -gap measure. Going forward, Greater Dubuque Development believes we must work to attract a legacy carrier that will carry passengers to major hubs like Chicago, IL and/or Denver, Co, to meet the needs of our region's business traveler. The realities are that in the current landscape, rural communities are losing air services and the carriers are struggling to train enough pilots to meet the increasing consumer demands of a post -pandemic world. The proposed ULCC offers important continuity for ensuring that the Dubuque Regional Airport maintains the infrastructure, staffing, and federal funding needed to continue investments necessary to expand and attract commercial services long-term. We have to keep the lights on. We encourage the Dubuque City Council's support for the MRG funding request as an important investment in our community's future. We strive to be a community of choice where businesses, job seekers, families, and students can be great here. We must invest in a future where our citizens can access the world from the Dubuque Regional Airport, and in turn, the world can access us. In your service, Rick Dickinson, President & CEO Greater Dubuque Development Corporation cc: Mike Van Milligen, City Manager �;_- ud,� Jason E. White, Vice President of Business Services Greater Dubuque Development Corporation Member of Dubuque Air Service Task Force DUBUQUE AREA CHAMBER WHERE BUSINESS BELONGS 300 Main Street I Suite 200 1 Dubuque, IA 52001 September 29, 2022 Mayor Brad Cavanagh 50 W. 13t" Street Dubuque, IA 52001 RE: Support for Ultra -Low -Cost Carrier in Dubuque Dear Mayor Cavanagh, The Dubuque Area Chamber of Commerce has long held air service among our top priorities. Our air service taskforce representing leaders from the public and private sector have worked to enhance local air service to support our growing business community. The departure of American Airlines from the Dubuque market disconnects us from the global marketplace stifling our ability to attract and retain both businesses and workforce alike. The Chamber recognizes the urgency of these circumstances and the need for short and long-term solutions. Working with our air service taskforce we have updated our strategy to include a three -pronged approach which includes restoring daily commercial air service to major hubs, expand offerings to include leisure carriers, and build a national coalition with similarly impacted communities that have lost or reduced service. Our efforts are already yielding results. The Chamber has been working closely with our partners at the Dubuque Regional Airport on a proposed opportunity to contract with an ultra - low -cost carrier that would restore our local commercial air service with direct flights to the Florida market within months. Negotiations for this potential contract with the said carrier requires a Minimum Revenue Guarantee (MRG) to mitigate risk from entering a new market. The destinations proposed include Orlando and Fort Meyers, both top five destinations for the Dubuque catchment area. We are writing to encourage the Dubuque City Council to approve the funding request for the minimum revenue guarantee. This will help ensure we can secure service from the interested ULCC, and officially return air service to the Dubuque Regional Airport. DUBUQUE AREA CHAMBER WHERE BUSINESS BELONGS 300 Main Street I Suite 200 1 Dubuque, IA 52001 Beyond this, we want to reassure council and the community that this opportunity is not the end but only the beginning of our efforts to restore and local air service. We remain relentlessly committed to our tenacious efforts to secure service through a legacy carrier to major hubs. The Chamber believes a diverse portfolio of options that meet the needs of businesses and residents alike is key to ensuring Dubuque is a community of choice. Sincerely, Molly Grover, CCE, IOM President & CEO Dubuque Area Chamber of Commerce City of Dubuque ULCC Funding Request October 3, 2022 DUBUCZUE AREA CHAMBER WHERE BUSINESS BELONGS Apo-;V�,, 'r000loo DUBUQUE REGIONAL AIRPORT Dubuque Chamber Air Service Task Force • The task force is comprised of Dubuque community and business leaders who meet monthly to partner with the DBQ Airport's effort to restore, maintain and increase air service. • Air Service Task Force members educate, advocate and engage the community on air service issues. • Task force members assist the DBQ Airport with recruitment and retention of air service. DU BUQU E AREA CHAMBER WHERE BUSI NESS BELONGS O D DUBUQUE REGIONAL AIRPORT amnipr Alr Nprvicp 12 Tyson Leyendecker Zach Keeling Andy Butler President & CEO President & CEO Executive Chairman Dubuque Bank & Trust Medical Associates Cottingham and Butler Clinic and Health Plans Alex Dixon Amy Wagner- Josh Mallamud President & CEO Wagner Accounting and Q Casino Tax Service/Ex-Airport President & CEO Commissioner I Cartegraph Kurt Strand Kevin Dragotto Teri Goodmann President & CEO City of Dubuque Mississippi River Dubuque County Director of Strategic Museum and Aquarium Auditor Partnerships Karin Spisak Molly Grover Ryan Sempf President & CEO V.P. of Government and DBQ Airport Marketing Dubuque Chamber of External Affairs Coordinator Commerce I DBQ Chamber us ! - I © 011[eI:.Jmk1lIZjIaIII: Alex Fernandez SVP of Mike Fortman Facilities/Operations Associate Publisher John Deere Dubuque I TH Media Mariann Kurtz Weber Keith Rahe DBQ Airport President & CEO Commissioner/Clarke Travel Dubuque University Jason White Vice President of Todd Dalsing Business Services DBQ Airport Director GDDC Brad Cavanagh Tom Chesney Mayor of Dubuque President Clarke University Chamber Air Service Task Force Goal The Dubuque Area Chamber of Commerce in partnership with our public/private sector seeks to restore, sustain, and enhance commercial air service to the Dubuque Regional Airport. DUBUQUE AREA CHAMBER WHERE BUSINESS BELONGS l L iiL DUBUQUE REGIONAL AIRPORT Cha Objective Is Restor 9 enha r Air Service Task Force commercial air service to major hub(s) with connecting flights. air service to leisure destination(s). 719mercial Xrpa Chamber of Commerce coalition to restore, sustain air service,. - - is carriers for dailY air service from s utili ing Small Community Air Service Development ow -Cost Carriers providircly service to,�; Ong Association Mission coifterci '. DUBUCZUE AREA I - Q CHAMBER ❑i� WHERE BUSINESS BELONGS DUBUQUE REGIONAL AIRPORT rm a ki Status of Air Service • American Airlines, Delta Air Lines, and United Airlines have exited 59 airports since the start of the pandemic — including DBQ. • According to Regional Airline Association (RAA) — more than 300 airports have seen air service reductions in last 3 years. • Regional markets have suffered the most in recent years due to increased operating costs, retirement of aircraft, pilot and aviation work force shortages. • Airline capacity is down but air travel demand is up— especially leisure. DUBUQUE AREA CHAMBER � wnene eusirvess eeLor+cs DUBUQUE REGIONAL AIRPORT Opportunity - ULCC Air Service Agreement We are currently negotiating with an Ultra Low -Cost Carrier to enter into an air service ag reement for new weekly commercial air service. The agreement is performance based and has the potential of adding more destinations. To date parties have negotiated: • Two-year contract • Airport Fees Waived • Marketing Funds • Ground Handling • Minimum Revenue Guarantee $1 M (final component) • $500K City, $500K County • Unspent funds may be returned or applied to new service DUBUQUE AREA CHAMBER WHERE BUSINESS BELONGS DUBUQUE REGIONAL AIRPORT Risk Management= Incent'ives Entering a new market can be risky and airlines require some form of risk management to help cover upfront costs. Risk Management includes: • Airport fee waivers — such as landing fees and/or office rents • Marketing funds • Ground support equipment use • Ground Handling - Wide range of services provided to facilitate an aircraft flight or aircraft ground repositioning, preparation for and upon conclusion of a flight which will include both customer service and ramp service functions. • Minimum Revenue Guarantees (MRG) —An airline is guaranteed to generate a specified amount of revenue from ticket sales associated from new service to a community. If airline does not meet the targeted revenue, the local entity providing the guarantee will make a payment to the airline for any shortfall. DU BUQU E AREA CHAMBER WHERE BUSINESS BELONGS vt_�l DUBUQUE REGIONAL AIRPORT 2021 True Market Estimate Data ULCC Flight Proposal: Four flights a week to Florida Two to Orlando, Two to Fort Meyers 737 aircraft with seating capacity of up to 189 Pax. • # of travelers from DBQ catchment area (1 way) • To Orlando (MCO) — 20,937 passengers • To Ft. Myers (RSW) — 16,701 passengers • 37,638 total passengers • # of travelers to other Florida destinations (1 way) • 52,453 passengers Total 90 091 passengers flew from DBQ catchment area to Florida from competing airports in 2021. �NAY�+k rtnn tl Rr AX .. Hrpere F ,gewen 1 aaaa., nx4,.9iepe- a!e wwa� " e.Rx pt �- RI� aXre.ea .... - -iir per . urAen � W! S C O X S l p .r.nre a n, swn ar s.e,�e` �nrRR a. osa ae Roan Pan�.rMeew .., na�nrrt y GUWk — 'uRsie in,nvson Ek cr oeringon, :`4r9}sa vbWUPa ' •i' FIh RIme' - v PoWzi ov WeYrerP " .wee aeon e= e1m '— Meek ae l i... rvR - ......... w�,. ......C..lsR.hu9...'.......!�L .. Bdlorvn ,oa:kev.nk VYutn . �esrrt w.enwe ,vx.r y,e cey .'�.ru�:d�[ R.� .1 o w A -�n'�e nnrre O wennec4.ranoe, as a -� 6cem f ak n 1 Prbmivunr 1 RreaG SeGe�l�e Ncw xoar+�s [ra14 �� 3odh N/m+s R✓'w oeM1 � ox�d m,r, e.ras DBQ Catc e�nt ��@ rrwzneat� .a ,x.w amu Mxraannai nec �M.--..... npp. vrxr _ r�,M � ° qel. s o ae Rpwnxn �,m oxx 1, .r.r.. I 'oro�cenl �cR� oaw x. Raky 11 Gakna GUXMC MCCmneJM„ O.rtaHebn '.. =Go een VYorIM1rMm .... en . n � SE;t e a.e.P.. .. .,,.M scW;en;a -� 6Ya� eM+ls En�.r. -- Geec.[k N4.ah .gyp, _ _ Mah x -' v xertn n.�o Mat\ e kp C­ caxk cr et hAM1 Sry E, Er „ Bart C.V Prerx 9 MmbcN. V,ae BBdlcw ` xenerer Pk "- cWtrai�tr A� . R.r�. , •5 �S�eM1�e m.n�. :: ,. , ��., s r.�x�a� �e�w� ..1� °; • � r a� ! � ar x. -GrR� � �. a� P. „ ' l Rniu 5?MHk ,m Ywr.n� wbn Ma el �_.. - Faa: b fyn. =. M, :R oRa Mertux a rc+e - eM.�,a c - J a,. Po''L' Fn m a rre,e. o .k � yap Bertrnn Mwa -, ,i rri �oR nitlm � tee Tnomsm � Mlkrtkeax DBQ Airport Catchment Area DUBUCZUE AREA AWW�`� s� CHAMBER ail WHERE BUSINESS BELONGS DUBUQUE REGIONAL AIRPORT Approx. 40-mile radius Estimated 200,000 population City of Dubuque Request Respectfully request approval for Minimum Revenue Guarantee (MRG) funds of $250,000/year for 2 years for total of $500,000. • Restore commercial air service & regain passenger traffic • Reduce negative economic impact to airport and community (jobs, payroll, total economic output) • Protect airport federal funding • Provide access to quality -of -life amenity • Employer workforce recruitment and retention tool • Increase/retain more of the market share of DBQ's catchment area to demonstrate profitability to add future ULCC routes and potential scheduled daily service. DUBUCZUE AREA CHAR Qo� WHERE BUSINESS BELONGS DUBUQUE REGIONAL AIRPORT LL10 AlkyrAffe UBUQUE .AREA HAMBER WHERE BUSINESS BELONGS