Application under the Small Community Air Service Development Program Docket DOT-OST-2020-0231 By the Appleton International Airport For the Appleton International Airport Congressional Districts: WI-08 Dun & Bradstreet Number: 11-862-0140

Figure 1 Fox River in Appleton

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APPLICATION UNDER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT-OST-2020-0231

SUMMARY INFORMATION

A. PROVIDE THE LEGAL SPONSOR AND ITS DUN AND BRADSTREET (D&B) DATA UNIVERSAL

NUMBERING SYSTEM (DUNS) NUMBER, INCLUDING +4, EMPLOYEE IDENTIFICATION NUMBER

(EIN) OR TAX ID.

Legal Sponsor Name: Outagamie County

Name of Signatory Party for Legal Sponsor: Patrick Tracey, Marketing Manager

DUNS Number: 11-862-0140

EIN/Tax ID:

B. LIST THE NAME OF THE COMMUNITY OR CONSORTIUM OF COMMUNITIES APPLYING:

1. Outagamie County

C. PROVIDE THE FULL AIRPORT NAME AND 3-LETTER IATA AIRPORT CODE FOR THE

APPLICANT(S) AIRPORT(S) (ONLY PROVIDE CODES FOR THE AIRPORT(S) THAT ARE ACTUALLY

SEEKING SERVICE).

1. ATW-Appleton International Airport

IS THE AIRPORT SEEKING SERVICE NOT LARGER THAN A SMALL HUB AIRPORT UNDER FAA HUB

CLASSIFICATIONS EFFECTIVE ON THE DATE OF SERVICE OF THE ATTACHED ORDER?

YES NO

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Does the airport seeking service hold an airport operating certificate issued by the Federal

Aviation Administration under 14 CFR Part 139? (If “No”, Please explain whether the

airport intends to apply for a certificate or whether an application under Part 139 is

pending.)

YES NO

D. SHOW THE DRIVING DISTANCE FROM THE APPLICANT COMMUNITY TO THE NEAREST:

1. Large hub airport: Chicago O’Hare International Airport, ORD – 185 miles

2. Medium hub airport: Milwaukee Mitchell Int’l Airport, MKE – 115 miles

3. Small hub airport: Madison Dane County Regional Airport – 102 miles

4. Airport with jet service: ATW has jet service

E. LIST THE 2-DIGIT CONGRESSIONAL DISTRICT CODE APPLICABLE TO THE SPONSORING

ORGANIZATION, AND IF A CONSORTIUM, TO EACH PARTICIPATING COMMUNITY.

1. 08

F. APPLICANT INFORMATION: (CHECK ALL THAT APPLY)

Not a Consortium Interstate Consortium Intrastate Consortium

Community (or Consortium member) previously received a Small Community Air Service Development Program Grant

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NOTE: A community that currently receives subsidized Essential Air Service funding, receives assistance under the Alternate Essential Air Service Pilot Program, or is a participant in, and has received a grant under, the Community Flexibility Pilot Program, is not eligible for SCASDP grant funds. If previous recipient: Provide year of grant(s): 2009 ; and, the text of the grant agreement section(s) setting forth the scope of the grant project: _The 2009 grant was for $150,000 in marketing money to assist ATW in targeting leakage in the face of strong competitive threat in MKE, as Southwest Airlines was launching service and AirTran was growing dramatically. ATW utilized the 2009 SCASD grant with an initial market research study which revealed there was a low awareness of the services offered at ATW. From that study, ATW created a clear advertising message: Quick, Close, Convenient. The grant was a success, with ATW regaining four percent of the passengers from its natural catchment area. G. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION NAMES)

PUBLIC PRIVATE

1. Appleton International Airport 1. Fox Cities CVB

2. Outagamie County 2. Fox Cities Chamber of Commerce

3. Heart of the Valley Chamber of Commerce

4. Oshkosh Chamber of Commerce

5. Mile of Music

6. Appleton Downtown Inc.

7. The Karma Group Creative Agency

8. Element Public Relations

9. Fox World Travel

10. Midwest Communications Radio

11. FastSigns

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H. PROJECT PROPOSAL:

1a. GRANT GOALS: (CHECK ALL THAT APPLY)

Launch New Carrier Secure Additional Service Upgrade Aircraft

First Service New Route Service Restoration

Regional Service Surface Transportation Professional Servicesi

Other (explain below)

1b. GRANT GOALS: (SYNOPSIS)

CONCISELY DESCRIBE THE SCOPE OF THE PROPOSED GRANT PROJECT.

Appleton International Airport seeks to recruit nonstop service to Dallas to connect cities

throughout the West and Southwest United States. Community partners pledged $330,500

in cash and in-kind contributions, and the Airport will provide $330,000 cash and in-kind

contributions to fund marketing and operations to make this route a success. The Airport

seeks a $750,000 Grant award in support of the revenue guarantee for Dallas service with

American Airlines.

1c. GRANT HISTORY:

DOES THIS APPLICATION SEEK TO REPEAT A PAST GRANT PROJECT OF THE COMMUNITY OR

CONSORTIUM (FOR EXAMPLE, A SPECIFIC DESTINATION AIRPORT)?

YES NO

IF THE ANSWER TO THE ABOVE QUESTION IS ‘YES’:

A: WHAT YEAR WAS THE FORMER GRANT AGREEMENT SIGNED? _____

B: HAVE 10 YEARS PASSED SINCE THE PREVIOUS GRANT AGREEMENT WAS SIGNED?

YES NO

IF THE ANSWER TO ‘B’ ABOVE IS ‘NO,’ THE APPLICANT SHOULD APPLY FOR A FORMAL WAIVER

OF THE TEN-YEAR SAME PROJECT LIMITATION (SEE SECTION C.1. “SAME PROJECT

LIMITATION”). THE REQUEST FOR WAIVER SHOULD INCLUDE A) A STATEMENT THAT THE

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COMMUNITY OR CONSORTIUM IS REQUESTING A WAIVER OF THE LIMITATION IN ACCORDANCE

WITH THE PROVISIONS OF 49 U.S.C. § 41743(C)(4)(C); AND B) INFORMATION AND EVIDENCE TO

SUPPORT A FINDING THAT THE APPLICANT SPENT LITTLE OR NO MONEY ON ITS PREVIOUS

PROJECT OR ENCOUNTERED INDUSTRY OR ENVIRONMENTAL CHALLENGES, DUE TO

CIRCUMSTANCES THAT WERE REASONABLY BEYOND THE CONTROL OF THE COMMUNITY OR

CONSORTIUM. IF YOU HAVE ANY QUESTIONS ABOUT YOUR COMMUNITY’S PAST GRANTS,

PLEASE CONTACT THE DEPARTMENT.

2. FINANCIAL TOOLS TO BE USED: (CHECK ALL THAT APPLY)

Marketing (including Advertising): promotion of the air service to the public

Start-up Cost Offset: offsetting expenses to assist an air service provider in setting up a

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

Revenue Guarantee: 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

Recruitment of U.S. Air Carrier: 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

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

counted as in-kind contributions only

Ground Handling Fee: reimbursement of expenses for passenger, cabin, and ramp (below

wing) services provided by third party ground handlers

Travel Bank: 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

Other (explain below)

$250,000 cash pledge from the Fox Cities Convention & Visitor’s Bureau.

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I. EXISTING LANDING AIDS AT LOCAL AIRPORT:

Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

J. PROJECT COST: DO NOT ENTER TEXT IN SHADED AREA REMINDER: LOCAL CASH CONTRIBUTIONS MAY NOT BE PROVIDED BY AN AIR CARRIER (SEE “TYPES

OF CONTRIBUTIONS” FOR REFERENCE).

LINE DESCRIPTION SUB TOTAL TOTAL AMOUNT

1 Federal amount requested $750,000

2 State cash financial contribution $0

Local cash financial contribution

3a Airport cash funds $90,000

3b Non-airport cash funds $250,000

3 Total local cash funds (3a + 3b) $340,000

4 TOTAL CASH FUNDING (1+2+3) $1,090,000

In-Kind contribution

5a Airport In-Kind contribution** $240,000

5b Other In-Kind contribution** $80,500

5 TOTAL IN-KIND CONTRIBUTION

(5a + 5b)

$320,500

6 TOTAL PROJECT COST (4+5) $1,410,500

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K. IN-KIND CONTRIBUTIONS**

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.

ATW will contribute $75,000 in joint use fee waivers, $40,000 in landing fee waivers, and

$125,000 in into-plane fuel waivers.

Community marketing and business partners will contribute $80,500 from their

marketing/advertising budgets.

L. Is This Application Subject To Review By an Affected State Under Executive Order

12372 Process?

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.

M. Is The Lead Applicant or Any Co-Applicants Delinquent On Any Federal Debt? (If “Yes”,

Provide Explanation)

No Yes (explain)

Contents Executive Summary ............................................................................................................................................... 3

Our Proposal ........................................................................................................................................................... 4

About Appleton ...................................................................................................................................................... 4

Regional Air Service .............................................................................................................................................. 5

ATW Air Service ............................................................................................................................... 5

Competitive Landscape .................................................................................................................... 6

Loss of Service has Greatly Reduced Connectivity ........................................................................... 6

Regional Competition has Adversely Affected ATW ........................................................................ 7

ATW Suffers From High Fares .......................................................................................................... 7

American Service to Dallas-Fort Worth (DFW) Will Restore Lost Connectivity .................................. 8

Appleton Airport Proposal .................................................................................................................................... 9

Summary of Incentives ..................................................................................................................... 9

Program Funding Sources – Cash..................................................................................................... 9 Community Cash ................................................................................................................................... 9

Airport Cash ........................................................................................................................................... 9

Program Funding Sources – In Kind ............................................................................................... 10 Community In-Kind ............................................................................................................................. 10

Airport In-Kind ..................................................................................................................................... 10

Combined Incentive Program ......................................................................................................... 10

Administration of the Program ....................................................................................................... 10

Timeline ......................................................................................................................................... 10

Goals and Measures of Success ..................................................................................................... 11

Marketing and Advertising to Ensure Route Success ..................................................................................... 11

ATW is the Right Choice ...................................................................................................................................... 11

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Executive Summary The Appleton International Airport (ATW) is the primary commercial service airport for the Appleton-Oshkosh-Neenah, Wisconsin Combined Statistical Area (CSA) and surrounding areas. It is served by the three largest network airlines via regional carriers to five major hubs; Atlanta, Charlotte, Chicago O’Hare, Detroit, and Minneapolis. United Airlines serves Chicago O’Hare and has been serving Denver since 2018, however the Denver service has been canceled since April 2020 due to the COVID-19 pandemic. Delta Air Lines serves Atlanta, Detroit, and Minneapolis, and American Airlines serves Chicago O’Hare and Charlotte. Allegiant Air offers service to six leisure destinations: Las Vegas, Phoenix/Mesa, Nashville, Orlando/Sanford, Fort Myers/Punta Gorda and Tampa/St. Pete. ATW’s greatest challenge is the continual and growing passenger leakage to airports in Milwaukee and Chicago. The key contributing factor to passenger traffic leakage is high fares and lack of non-stop service to top destinations. These three airports (MKE, ORD and MDW) offer a constantly growing portfolio of network and low-cost carrier service that attract passengers from the ATW catchment area. In addition, reduction in seats and the cancellation of service to major hubs has increased passengers leaking away from ATW’s natural catchment area. Average fares are well above national average and that of our peer markets. Appleton’s average fare, $200 each way, is 21% higher than the national average for the year ending 2019. High fares are cited by consumers as the main reason that many area residents avoid ATW and drive south to Milwaukee (MKE) and Chicago (ORD and MDW), causing Appleton to leak 68.6% of potential customers in the ATW natural catchment area to these larger airports. Starting in 2020, COVID-19 has caused a reduction in direct flights and the reduction in nonstop routes from ATW. United eliminated ATW-DEN service in April 2020, removing one of ATW’s key nonstop routes, and greatly reducing connectivity to the West and Southwest. Likewise, Delta has reduced seats between ATW-MSP by 40%, Q1 2021 vs Q1 2020, further reducing connectivity to the West and Southwest. Our proposal is to replace the lost seats and connectivity to the West and Southwest by adding service through American Airlines from Appleton to Dallas. DFW is ATW’s top unserved market; this new service will replace major connections lost when Denver was eliminated and ATW-MSP frequency and aircraft gauge were reduced. ATW-DFW service will also add new unique markets that will serve Appleton customers by connecting beyond DFW to the West and Southwest U.S. Finally, this new service will increase competition to the West and Southwest, bringing Appleton’s fares more in-line with national average and our peer set, reducing leakage from our natural catchment area, and providing customers within the Appleton-Oshkosh-Neenah CSA with access to more competitive air service. American fully supports this application for one daily roundtrip to DFW on 76-seat regional jets. This service will not only provide nonstop service to one of the nation’s most important markets, it will also connect to American’s global network from DFW providing vastly improved connections for business and leisure travelers. We believe that this application is a strong fit for the SCASD program. ATW is a non-hub airport in a populated region that has suffered greatly due to leakage caused by high fares and lack of non-stop service to top destinations; both of which have been exacerbated by the COVID-19 pandemic.

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We have a willing partner in American Airlines, considering new service to a desirable hub. Our community has stepped up with strong cash and marketing in-kind contributions, plus several letters of support. Partnering with the SCASD program puts ATW at the head of the line for DFW service on American Airlines. Our Proposal Appleton Airport proposes a $750,000 SCASD grant to fund a (2) two-year revenue guarantee associated with year-round, once-daily American Airlines service to Dallas (DFW). Area tourism partners have pledged $250,000 cash to help ensure success of the service. Appleton Airport will provide $90,000 cash for marketing and $240,000 Airport in-kind contributions. Marketing and community partners have committed $80,500 in-kind marketing support.

About Appleton Appleton is located in the center of the Fox Cities, 19 communities clustered along the Fox River with a combined population of 250,000. The Fox Cities constitute a portion of the Appleton-Oshkosh-Neenah, WI CSA, which also includes rural portions of three adjoining counties. As of 2019 the CSA had an estimated population of 410,000 making it the third largest CSA in Wisconsin, behind Milwaukee and Madison.

The Fox Cities earned the nickname ‘Paper Valley’ in the 1900’s, and today Wisconsin still leads the nation in paper production, with 35 pulp, paper, and paperboard mills clustered along the Fox and Wisconsin rivers. Kimberly-Clark, our ‘first’ paper company, is now a global brand marketing Kleenex, Huggies, Kotex, and Depends to 175 countries around the world. Paper companies have adapted to changing consumer tastes, and today the demands of Amazon and other online retailers for corrugated boxes, labels, and shipping tape have given fresh life to the paper companies.

The paper-making-machine business grew up alongside the paper mills, creating a manufacturing hub in Appleton that thrives to this day. Modern factories in the area build four-story high paper machines, firetrucks, military vehicles, and hundreds of other products, supported by hundreds of smaller companies which fill their supply chains. Figure 2 shows that manufacturing jobs comprise 23% of the area’s employment, triple the national average. This stable employment base has provided the Appleton area robust job growth and relatively strong wages. Area companies have successfully recruited many young, high-tech workers to the area to fill the technology-intensive jobs required by modern manufacturing. One result of these recruitment efforts is that Appleton has the highest percentage of millennials with home mortgages of any city in the U.S. People are drawn to the Fox Cities by the strong family culture in Wisconsin, the multitude of outdoor and cultural opportunities, great schools, and the relative safety of the community. The Appleton area currently enjoys a 96.34% employment rate (November 2020).

Figure 2 Area Employment Mix

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The community has a history of collaboration on large projects. In January 2018 the $31.9 million Fox Cities Exhibition Center opened in downtown Appleton. This 30,000 sq. ft. facility hosts regional and national exhibitions and tradeshows. In fall 2019, the $30 million Community First Champion Center, a 164,000 sq. ft. sports center which features three competition pods; a year-round ice rink; a fieldhouse; and a seasonal arena that transitions between an ice rink and hardwood courts, opened to the public. Both the Exhibition Center and the Champion Center were ‘all-hands-on-deck’ community efforts, blending public and private investment in order to create funding for these projects. The Airport receives similar support for our projects from the community, such as the Airport/Fox Valley Technical College – Regional Aircraft Rescue and Fire Fighting Training Facility, and the User Fee Customs and Border Protection Facility. We expect a strong community rally in support of our new route efforts as well. Finally, manufacturing in the Fox Cities is a primary travel generator – comprised of product sales in and out, vendor sales in and out, and reciprocal customer traffic. Local manufactures require access to quality air service to connect their people and products to the global economy. Each seat lost through route reductions and flight frequency decline due to COVID-19 will increase fares and reduce non-stop flights to top destinations further aggravating Appleton’s leakage. Regional Air Service ATW Air Service Appleton Airport is currently serviced by three legacy carriers American Airlines, Delta Air Lines and United Ailines plus Allegiant Air. Based on the strong manufacturing base, ATW’s customer mix is approximately 70% business travel and 30% leisure travel. American Airlines is the smallest carrier operating at Appleton Airport, only capturing 14% of daily seats and providing very little to no connectivity to the West and Southwest. Allegiant Air also operates at Appleton Airport, however their business model is focused on moving leisure traffic to top leisure destinations and provides no connectivity beyond their current service points nor do they serve ATW’s top business connections.

Figure 3 ATW Flight Schedule, February 2021

Airline Destination Equipment Flights SeatsAmerican Charlotte - CLT Regional Jet 28 2128American Chicago - ORD Regional Jet 47 2350

Delta Atlanta - ATL Regional Jet 30 2280Delta Detroit - DTW Regional Jet 69 3450Delta Minneapolis - MSP Regional Jet 70 3500

United Chicago - ORD Regional Jet 121 6050Allegiant Phoenix - AZA Narrow-body Jet 13 2400Allegiant Nashville - BNA Narrow-body Jet 5 885Allegiant Las Vegas - LAS Narrow-body Jet 8 1248Allegiant Punta Gorda - PGD Narrow-body Jet 13 2418Allegiant St. Pete - PIE Narrow-body Jet 8 1461Allegiant Orlando - SFB Narrow-body Jet 13 2028

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Competitive Landscape In a time when many non-hub airports are struggling to remain relevant, ATW has a tremendous amount of pressure applied from large airports like Milwaukee (MKE), Chicago O’Hare (ORD) and Chicago Midway (MDW) being right down the road. These three airports offer a constantly growing portfolio of air service options both from legacy carriers as well as from low cost and ultra-low cost carriers focused at the leisure passenger. With current air fares significantly higher than our competitors and getting worse with reduced flight activity and schedules, ATW is at a substantial disadvantage. Loss of Service has Greatly Reduced Connectivity When Appleton’s nonstop to DEN was cancelled by United and Delta reduced flights to MSP in April 2020 due to COVID-19, the Airport lost access to a critical western hub and connectivity to the West and Southwest. Both the Denver route and Minneapolis route carried business, leisure, and VFR (visiting friends and relatives) customers, serving both ‘local’ traffic and ‘flow’ traffic to the West coast and Southwest United States. Connectivity to the West and Southwest have been crippled by the canceled and reduced flights. As shown in Figure 4, canceled and reduced flights have led to a reduction in seats to the West through Denver and Minneapolis of 100% and 34% respectively. The loss of capacity becomes even more impactful when seen against the context of Figure 5, ATW outbound travel by region. 31% of Appleton travelers are flying to Texas or the Southwest. 4% are heading to the Northwest. Combined, 35% of Appleton traffic has now been adversely affected by the elimination of the DEN flights and the schedule reduction of the MSP flight. Figure 6 highlights the connecting service lost when United stopped operating the flight from ATW to DEN in April. The one-stop connections through DEN provided our community with easy access to over 22 destinations and account for 17.2 passengers each day.

Figure 6 December 2020 Schedule and YE Q4 2019 Demand

Rank Market PDEW Fare Annual REW Rank Market PDEW Fare Annual REW1 SJC* 4.3 268$ 420,626$ 12 FLG 0.4 249$ 34,239$ 2 ABQ* 2.5 225$ 205,313$ 13 GJT 0.4 324$ 43,941$ 3 RNO* 2.2 292$ 234,476$ 14 SBA* 0.4 255$ 34,289$ 4 LIH 1.1 488$ 203,189$ 15 MRY 0.2 418$ 34,747$ 5 ONT 1 290$ 105,850$ 16 SBP 0.2 307$ 23,948$ 6 FAT* 1 370$ 135,050$ 17 DRO 0.2 317$ 23,860$ 7 KOA 0.9 390$ 128,069$ 18 CPR 0.2 247$ 15,956$ 8 BUR 0.5 201$ 39,335$ 19 SAF 0.1 232$ 9,184$ 9 MFR 0.5 271$ 51,690$ 20 COD 0.1 374$ 9,984$

10 HLN** 0.4 200$ 29,200$ 21 SGU 0.1 223$ 5,410$ 11 RDM* 0.4 326$ 47,596$ 22 BFL 0.1 427$ 8,306$

TOTAL 17.2*Suspended from ORD until Spring 2021**Suspended from MSP until Spring 2021

Some markets accessible via ATL on circuitous routing i.e. (ATW-ATL-ABQ)

Figure 4 Seat Reduction April-December 2019 v. 2020

Figure 5 ATW Outbound Travel by Region, YEQ4 2019

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Regional Competition has Adversely Affected ATW With the relative close proximity to much larger airports, travelers have the opportunity to drive for much lower fares as well as many more non-stop flight options. Milwaukee is currently 115 miles to the south and Chicago is 185 miles to the south of Appleton. This equates to roughly a 2 hour or 3 hour drive respectively. We hear frequently from would-be customers that these 2 and 3 hour drives are often completed during the very early hours of the day, late at night, and in adverse weather conditions. Both Milwaukee and Chicago airports offer dozens of non-stop destinations at much lower fares which, in turn, puts tremendous pressure on ATW to retain passengers from its natural catchment area. ATW Suffers From High Fares As a result of few service options and strong regional pressure to the south, ATW suffers from high fares vs the U.S. average. Looking at fares throughout the year of 2019, ATW fares were 21% higher than the U.S. average. When looking at legacy carrier fares only, ATW fares are 27% higher than the U.S. average.

High Fares and Poor Connectivity Lead to Substantial Leakage Leakage from ATW has climbed from 55% in 2007 to 68.6% in 2016 and now has jumped to an average of 75% in Q3 of 2020; driving factors have been higher ATW fares compared to MKE, ORD, and MDW and loss of non-stop flights. ATW’s natural catchment area extends north to the City of Kaukauna, south throughout the City of Oshkosh, and approximately 30 miles east and west of the airport and the City of Appleton. According to ATW’s 2016 airport catchment leakage report, only 24% of all passengers in the Appleton natural catchment area use ATW as their primary airport. If we use 2019 daily passenger numbers, that means approximately 3,000 passengers every day are choosing to drive out of ATW’s catchment area and fly from another airport due to high fares and lack of non-stop flights.

Figure 7 ATW Drive Times to Competitive Airports

Figure 8 ATW 2016 Leakage

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A majority of the leaked passengers are choosing to use Milwaukee (MKE) at 43% and Chicago (ORD & MDW) airports at 26%. Due to the elimination in Denver service and the schedule reductions to Minneapolis caused by the COVID-19 pandemic, our leakage has increased. Based on these COVID-19 related schedule reductions, travelers in our natural catchment area have very little options remaining to fly out of ATW, especially when trying to go west or to the southwest. American Service to Dallas-Fort Worth (DFW) Will Restore Lost Connectivity American’s DFW hub is well-positioned to restore destinations lost when Denver was cancelled and Minneapolis service was reduced. Its geography is well suited to serve markets in the West and Southwest, plus, it will also will improve connectivity to ATW’s top Latin American markets. Figure 9 shows that adding DFW service will allow Appleton travelers easy one-stop connections to over 30 markets equating to 18.7 Passengers Daily Each Way (PDEW), exceeding the 17.2 PDEWS lost when ATW-DEN was removed. New service to American’s DFW hub would improve connections to destinations important to Appleton travelers, enabling travelers to use ATW, rather than leak to a distant airport. American Airlines service to Dallas fills the most important network gap for ATW but also gives American a more comprehensive network footprint at the airport. The result is that all three incumbent carriers will have balanced, competitive networks at ATW, further contributing to market stability and traffic retention. Plus Appleton’s catchment area is the largest market under 1,000 miles without a non-stop flight to DFW as of calendar year 2019, shown in Figure 10.

Rank Market PDEW Fare Annual REW Rank Market PDEW Fare Annual REW1 SJC* 4.3 $ 268 $ 417,519 17 YUM 0.1 $ 245 $ 10,577 2 QRO** 2.8 $ 209 $ 210,576 18 SLP 0.1 $ 265 $ 10,849 3 ABQ* 2.5 $ 225 $ 205,338 19 MZT 0.1 $ 223 $ 8,926 4 RNO* 2.2 $ 292 $ 229,143 20 SAF 0.1 $ 232 $ 9,184 5 ONT 1.0 $ 290 $ 105,243 21 STS 0.1 $ 195 $ 5,035 6 FAT* 1.0 $ 370 $ 133,882 22 AGU 0.1 $ 580 $ 11,661 7 KOA 0.9 $ 390 $ 128,069 23 BFL* 0.1 $ 427 $ 8,306 8 BJX 0.9 $ 279 $ 90,147 24 CUU 0 $ 398 $ 5,471 9 BUR 0.5 $ 201 $ 39,335 25 MLM 0 $ 226 $ 2,287

10 FLG 0.4 $ 249 $ 34,239 26 ACA 0 $ 241 $ 2,414 11 GJT 0.4 $ 324 $ 43,941 27 TRC 0 $ 423 $ 3,998 12 SBA* 0.4 $ 255 $ 34,289 28 DGO 0 $ 567 $ 2,869 13 MRY 0.2 $ 418 $ 34,747 29 GUC 0 $ 184 $ 931 14 SBP 0.2 $ 307 $ 23,948 30 OAX 0 $ 214 $ 1,083 15 DRO 0.2 $ 317 $ 23,860 31 HUX 0 $ - $ - 16 ROW 0.2 $ 400 $ 23,008 32 ZCL 0 $ - $ -

Total 18.7*Suspended from ORD until Spring 2021**Discontinued via ATL/DTW indefinitely

Figure 9 December 2020 Schedule and YE Q4 2019 Demand

Destination Miles PDEW FareATW 908 19.12 237.72$ CRW 946 15.91 263.52$ DAB 981 14.18 229.21$ AZO 900 10.27 232.77$ RST 798 9.83 193.88$

CWA 911 9.69 233.56$

Figure 10 Largest market without a non-stop flight

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Appleton Airport Proposal The total budget for this incentive program is $1,410,500, which provides almost a 50/50 airport-community / grant dollars split. Discussions with American Airlines have been extremely positive. With the strong community support and our recent discussions with American Airlines, we feel strongly we have a high probability of success if we are able to capture this SCASD grant. Discussions with American Airlines indicated they desire a revenue guarantee for the first two (2) years of the start-up period. Summary of Incentives During the first two years of service, the airport and our community partners will collaborate to support this route effort with over $660,000 split between cash and in-kind contributions. The contributions are focused towards both reducing the overall financial investment required for American Airlines to start a new route at ATW and driving awareness towards the new route with 10 local partners pledging marketing contributions towards this effort. Our marketing partners are excited to participate in this effort, and they understand that awareness will be a key component in the success of this market.

Figure 11 Airport and Community Route Investment Summary

Program Funding Sources – Cash The community cash contribution amounts to $250,000. The Appleton Airport will also contribute $90,000 in marketing funding consistent with D.O.T. guidelines. Total airport and community cash funding for the program is $340,000. Community Cash The Fox Cities Convention & Visitors Bureau (CVB) has pledged up to $250,000 as a Tourism Development Grant to support a DFW route on American Airlines. The CVB is an economic development organization that strengthens the Fox Cities economy by attracting meetings, sports, and leisure visitors through sales, marketing and destination development. The CVB is funded by hotel room taxes and has an annual budget of $1.4 million dollars. The CVB’s Tourism Development Grant program is a proven tool for economic development. A 15-member board representing area hotels, entertainment venues, and municipalities oversees the work of the CVB and its staff. Airport Cash The Appleton Airport will also contribute $90,000 in cash to market the route in our region. In year 1, ATW will provide $15,000 for launch and start-up marketing, and $50,000 to create community, social media, and digital marketing campaigns. In year 2, the Airport will invest an additional $25,000 to continue marketing the route to success. A detailed marketing plan is outlined in the ‘Marketing and Advertising’ section as part of our application.

Fund UsesCommunity

CashCommunity In-

KindAirport Cash Airport In-Kind Total

Operations $250,000 $0 $0 $240,000 $490,000 Marketing $0 $80,500 $90,000 $0 $170,500

Total $250,000 $80,500 $90,000 $240,000 $660,500

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Program Funding Sources – In Kind The community will contribute $80,500 towards in-kind marketing and awareness efforts to push this new route program to success. The Airport will provide an estimated $240,000 towards fee waivers to lower the airline’s operating costs for a total contribution of $320,500 of in-kind incentives. Community In-Kind The community in-kind contributions amount to $80,500. These contributions come from ten key marketing partners of Appleton Airport and together, these partners align to deliver a strategic marketing campaign that will ensure success of the Dallas route covered by this application. Our application represents a coalition of regional partners dedicated to the long-term success of quality air service at ATW. Figure 11 below outlines the airport and community effort put forth to ensure this SCASD program is selected and ensure this route will be a success. Airport In-Kind ATW will provide an operations incentive of $240,000 comprised of fee waivers outlined below:

- Waived landing fees, estimated $40,000. - Waived joint use fees, estimated $75,000. - Waived fuel into-plane fees, estimated $125,000.

Combined Incentive Program

Figure 12 Combined Incentive Program

Administration of the Program The Appleton International Airport will implement and administer the SCASD program. Timeline ATW is ready to implement this program immediately. We are in ongoing discussions with American Airlines and we have received a letter of support for this application from American Airlines Director of Domestic Network Planning. We anticipate that this service could start as early as summer 2021.

Cash Funding Sources Operations Marketing TotalAppleton International Airport $240,000 $90,000 $330,000 Fox Cities Convention & Visitors Bureau $250,000 $0 $250,000 Fox Cities Chamber of Commerce $0 $10,000 $10,000 Heart of the Valley Chamber of Commerce $0 $5,000 $5,000 Oshkosh Chamber of Commerce $0 $5,000 $5,000 Mile of Music $0 $25,000 $25,000 Appleton Downtown Inc. $0 $5,000 $5,000 The Karma Group Creative Agency $0 $7,000 $7,000 Element Public Relations $0 $7,500 $7,500 Fox World Travel $0 $5,000 $5,000 Midwest Communications Radio $0 $10,000 $10,000 FastSigns $0 $1,000 $1,000 U.S.D.O.T. SCASD Grant $750,000 $0 $750,000

Total $1,240,000 $170,500 $1,410,500

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Goals and Measures of Success This program will be successful when American Airlines adds new non-stop service from ATW to DFW. The addition of the new route will increase competition thereby reducing local fares and increase connectivity to the West and Southwest ultimately reducing traffic leaking to our competitive airports. Marketing and Advertising to Ensure Route Success Appleton Airport has created a strategic marketing plan that will deliver broad community awareness. In concert with our strategic community partners, we will implement a comprehensive, multi-faceted program that will include, but not be limited to the following initiatives: - Align with American Airlines current marketing initiatives - Develop and deliver targeted markets for current and future destinations to the West and Southwest - Maximize earned media - Partner with airline sales to target both business and leisure traffic - Take advantage of social and digital marketing campaigns - Leverage our community partnerships that have pledged $80,500 in in-kind contributions - Support with community engagements and events ATW is the Right Choice ATW’s application meets most of the Priority Selection Criteria set out in the solicitation. 1. Air fares are higher than the national average air fares for all communities.

ATW air fares are amongst the highest in the nation and are 21% higher than the national average. 2. The community or consortium will provide a portion of the cost of the activity from local sources

other than airport revenue sources. The Airport and local community are contributing an 88% match of our requested SCASD Grant amount. The Airport is contributing $330,000. The Fox Cities Convention & Visitors Bureau is contributing $250,000 cash as an airline incentive, and ten key marketing in-kind partners are contributing $80,500 for a total community contribution of $330,500.

3. The community or consortium has established or will establish a public-private partnership to facilitate air carrier service to the public. ATW has a detailed strategic marketing plan which delivers broad community awareness of the proposed new route. The community marketing in-kind budget will be administered by a public-private partnership and include the Fox Cities Convention and Vistors Bureau, three area Chambers of Commerce (Fox Cities, Heart of the Valley, and Oshkosh), three creative partners (Karma Group, Element PR, and Midwestern Communications Radio), and two community event partners (Mile of Music and Appleton Downtown Inc.), plus Fox World Travel.

4. The assistance 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. Appleton Airport customers suffer from high fares and lack of non-stop flights that puts them on the road 2 and 3 hours to seek air travel at alternative airports, often times in adverse weather conditions. This new route to DFW will increase local competition that will drive air fare down and increase connectivity to the west and southwest. This new route will assist all travelers in the Appleton-Oshkosh-Neenah, WI CSA with new flight options and lower air fares.

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Attached to our application you will find over twenty local businesses pledging their support for this new route. One of these letters of support comes from Lawrence University, a local liberal arts college and they note that Texas is one of the fastest growing student recruit areas for their college. Another letter comes from Mile of Music, which notes several music synergies between Appleton and Texas, especially Dallas and Austin. This new route will truly assist a wide range of users from our manufacturing businesses to our music makers.

5. The assistance will be used in a timely manner. This project has been coordinated with our partner carrier, American Airlines. We anticipate new DFW service could begin as early as summer 2021.

6. Multiple communities cooperate to submit a regional or multistate application to consolidate air

service into one regional airport. Appleton Airport’s strategic model is not compatible with this criterion.