HomeMy WebLinkAbout4/18/2002 - Regular
GREATER ROANOKE VALLEY LEADERS SUMMIT
AGENDA
April 28, 2002 at 12 Noon
Center for Applied Technology and Career Exploration
150 Technology Drive, Rocky Mount, Virginia,
WELCOME
Present: Vice-Chairman McNamara and
Supervisors Flora and Nickens
Absent: Chairman Church and Supervisor
Minnix
INVOCATION
LUNCH
OPENING STATEMENTS
Update on Regional Water Study
Update on Low Fare Air Carrier Efforts at Roanoke
Regional Airport
Overview of Franklin County and its role as a regional
player
Overview of the CATCE Center
(Center for Applied Technology and Career
Exploration)
CLOSING STATEMENTS
ADJOURNMENT AT 2:30 P.M.
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40 East Court Street n t t w t f * Richard E. Huff, II
Rocky Mount, Virginia 24151 4 µ 1 `Lp ~ a ,~~ ~~ ~~ l ~ Counry Adminisrraror
540-483-3030 (Voice) Odr of ~uperbi~ r~ countyadmin@franklincountyva.org
540-483-3035 (Fax) ~ kyj,~ ~ ~
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April 12, 2002
The Honorable Joseph P. McNamara, Vice Chairman
Roanoke County Board of Supervisors
Post Office Box 29800
Roanoke, Virginia 24018-0798
Dear Mr. McNamara:
To finalize the last minute details for our Regional Leadership Summit to be held at
the Center for Applied Technology and Career Exploration (CATCE) on Thursday, April
18, 2002, the following agenda topics have been proposed:
1. Update on Regional Water Study
2. Update on Low Fare Air Carrier Efforts at Roanoke Regional Airport
3. Overview of Franklin County and its role as a regional player
4. Overview of the CATCE Center
The Franklin County Board of Supervisors looks forward to hosting our regional
partners on April 18, 2002 for a lunch of Old Virginia Barbeque and a discussion on
topics of mutual interest. If we can in any way be of assistance, please do not hesitate to
contact my office.
S' cer ly,
~~
Richard E. Hu , II
County Administrator
40 East Court Street ~4u~*~ ~~ ~~~Y~~.Yi~
Rocky Mount, Virginia 24151 1~jiV l-l 1 ll
540-483-3030 (Voice) ~Odr~ Df ~U~lerb[~Org
540-483-3035 (Fax)
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MEMORANDUM
TO: Members of the Roanoke Valley Leadership Summit
FROM: Richard E. Huff, II
Franklin County Administrator
DATE: March 8, 2002
REF: Meeting Scheduled for April 18, 2002
Richard E. Huff, II
Cowin Atlminisn~ntor
countyadmin(cbfranklincountyva.om
The County of Franklin will host the next meeting of the Roanoke Valley Leadership
Summit on Thursday, April 18tH, 12:00 noon at the Center for Applied Technology and
Career Exploration (CATCE). To RSVP, or should a conflict arise and you will be
unable to attend, please contact Connie Stanley, Franklin County Administrator's Office,
at (540) 483-3030 or email at cstanleyna,franklincount~a.org
Further details and agenda will follow. Please mark your calendars for April 18tH
DIRECTIONS TO CATCE ARE ATTACHED
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Wanda Riley -Roanoke Valley Leadership Summit
____. ~-
From: Wanda Riley
To: cstanley@franklincountyva.org
Date: 3/13/02 12:12PM
Subject: Roanoke Valley Leadership Summit
Elmer Hodge will be attending the summit meeting on April 18. Thanks.
Wanda G. Riley, CPS
Executive Secretary
Roanoke County Administrator's Office
540-772-2004
wriley@co. roanoke.va. us
Page 1
Brendi±Holton -Message from Dr. Nickens Page 1
From: Brenda Holton
To: Butch Church; Fuzzy Minnix; Joe McNamara; Richard Flora
Date: 4/17/02 11:49AM
Subject: Message from Dr. Nickens
TO: Members of the Board
FROM: Harry Nickens
SUBJECT: APRIL 16, 2002 "BRANDING CHARETTE"
I was privileged to attend the Partners for Livable Communities (www.livable.com) "branding charette."
Also in attendance from the County was Jill Loop. Other Valley governments in attendance were
Roanoke, Vinton, Salem, Bedford County and Franklin County. Others, among the more than sixty in
attendance, were economic development, tourism, planning district, public higher education
representatives, marketers, etc.
I was favorably impressed with the "experts" from the Partners organization and with the five hour
presentation/dialogue. I will ask that Darlene Burcham try to get five minutes on the Government Summit
Agenda on April 18 to inform the local governments of the process and suggested direction for the near
future.
Brenda J. Holton
Deputy Clerk
Roanoke County Board of Supervisors
540-772-2005
bholton@co.roanoke.va.us
CC: Elmer Hodge; Harry Nickens; Jill Loope
VIRGINIA, CMARTEREO 1882
April 1, 2002
Honorable Harry C. Nickens
Roanoke Co. Board of Supervisors
P. O. Box 29800
Roanoke, VA 24018
Dear Mr. Nickens:
Office of the City Manager
The City of Roanoke is helping spearhead an effort to develop a regional brand, or
marketing identity, to enhance our area's tourism and economic development efforts.
We need your participation and your insights.
You are invited to attend a "branding charette," a forum to be facilitated by the Washington,
DC-based non-profit group, Partners for Livable Communities (www.livable.com). This
forum will be held Tuesday, April 16, from 8:30 a.m. to 1:00 p.m., in Fitrpatrick Hall
at the Jefferson Center. Alight breakfast and lunch will be served.
This should be a fun and creative time in which key stakeholders from all around our area
(government officials, business executives, marketing professionals, and others) come
together to share thoughts about our area's past, present and future; about our area's
strengths, challenges and opportunities; and about the things we feel we should be
communicating to the rest of the world. Through this forum, we hope to gain some direction
and consensus about the key messages a "Roanoke" regional brand should deliver.
Please RSVP by Wednesday, ril 10, to Cindy Ayers at (540) 853-2333.
We very much desire your participation, and we look forward to seeing you there. Please
extend our invitation to other key inaividuals in your organization who may wish to
accompany or represent you.
Sincerely,
C~~ ~~ ~G~e~~c~-
Christopher L. Slone
Director of Communications
CLS:ca
Room 364 Municipal South 215 Church Avenue, S.W, Roanoke, Virginia 24011-1591 (540) 853-2333 FAX (540) 853-1138
CityWeb:www.ci.roanoke.va.us
Brenda Holton - 4-18 Leadership Summit Meeting Page 1
From: Brenda Holton
To: Elmer Hodge
Date: 4/15/02 8:41AM
Subject: 4-18 Leadership Summit Meeting
Mr. Hodge, since all Board members are attending the Leadership Summit Meeting on 4-18, I am
planning to attend and made our reservations last week. I hope this meets with your approval.
I also asked if other staff was supposed to attend this meeting and was informed that only elected
officials, managers, administrators, clerks and deputy clerks have made reservations and are expected to
attend.
Brenda J. Holton
Deputy Clerk
Roanoke County Board of Supervisors
540-772-2005
bholton@co.roanoke.va.us
4
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40 East Court Street ~our~~p of ,~'r~rr~~riu
Rocky Mount, Virginia 24]51
540-483-3030 (Voicc) ~O~I'~ Of ~U}lerb[5Di'g
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Richard E. Huff, II
Cowzty Adminisn~ntor
countyadminwfranklincountyva.org
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TO: Members of the Roanoke Valley Leadership Summit
FROM: Richard E. Huff, II
Franklin County Administrator
DATE: March 8, 2002
REF: Meeting Scheduled for April 18, 2002
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The County of Franklin will host the next meeting of the Roanoke Valley Leadership
Summit on Thursday, April 18`n, 12:00 noon at the Center for Applied Technology and
Career Exploration (CATCE). ,~cr-RSV~', or sTioul~a c flict arise and you will be
unabl~"fo atteri , ase cont ct Connie Stanley,,F lin County Administrator's Office,
a '(540) 483-3030 email a~7stan~ai~chncoun a.org
Further details and agenda will follow. Please mark your calendars for April 18tH
~ ~ ~ ~~~
DIRECTIONS TO CATCE ARE ATTACHED
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THE CENTER FOR
APPLIED TECHNOLOGY AND
CAREER EXPLORATION
150 Technology Drive
Rocky Mount, VA 24151
(540) 483-5446
For more in/ormcr~ion ahou~ lhc~ C.aTCE.
risii thc~ Franklin Count~• School.~~
66'ebsile
h~ fE~: //tics car. f iro. k 1 _'. va. us
THE CENTER FOR
APPLIED TECHNOLOGY AND
CAREER EXPLORATION
150 Technology Drive
Rocky Mount, VA 241.51
(540) 483-5446
For i~no~~e i~iForrriulion aboiil the CATCE.
~~isit the Frun~lirt County Schools
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Roanoke Regional Airport Commission
5202 Aviation Drive
Roanoke, Virginia 2401 2-1 1 48
(540) 362-1999
FAX (540) 563-4838
~~
Elmer C. Hodge
County Administrator
County of Roanoke
P.O. Box 29800
Roanoke, VA 24018-0798
Dear Mr. Hodge:
April 30, 2002
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I am writing to thank you and your agency t~~r joining the Roanoke Regional Airport
Community Consortium. for Improved Air Service. To date, we have heard from seven (7)
cities/towns, nine (9) counties, and one other airport authority, all of whom are interested in doing
what they can to support their corporate and private citizens, as well as the Roanoke Regional Airport,
in obtaining low fares and improved air service.
Last Monday a grant application was filed with the United States Department of Transportation
seeking funds which would assist the Consortium. in obtaining the services of a low fare air carrier.
The joint applicants for the grant were the Consortium and the Roanoke Regional Airport Commission,
with the City of Roanoke agreeing to serve as the required legal sponsor. We expect to file a
supplement to the application which will include the names of the governmental agencies whose letters
of support were received after April 19, 2002.
We now have to wait for a couple of months to see if our grant application is funded; however,
iu the meantime, we need to consider whether we have the desire and ability to put together the
necessary financial package, even. if we are denied the benefit of federal funds. From discussions I
have had with. some of you or with other representatives of your governmental agency, this issue is
too important to ignore, even if the federal funds are not forthcoming.
The gra;it application contains a blueprint or strategy for obtaining the services of a low fare
carrier. Such a strategy requires both the Consortium and. a business group to be called the Roanoke
Regional Airport Alliance. I expect that within the next month or two, businesses and the chamber
in your area will be contacted about participating in this group. You will also be hearing more
regarding the Consortium, as we try to organize a group with. a geographical boundary that extends
far beyond the areas generally covered by traditional economic development regions or planning
districts.
Once again, let me thank you for your agency's willingness to participate in this endeavor.
The response from our air service are has been truly gratifying.
Very truly yours,
Jacqueline L. Shuck
Executive Director
F oaN°k
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1838
Memo
To: Board of Supervisors
From: Elmer C. Hodge ~ ~°'~~
Date: 6/7/2002
Re: Press conference on Friday, June 14 to announce the formation of a business
alliance to improve air service at the Roanoke Regional Airport
For several months, Chairman Church and I have been working with Mayor Smith and City
Manager Darlene Burcham to improve the quality of air service at the airport. It began in an
effort to recruit an additional airline to provide lower fares and more flights. Barry Duval,
former Mayor of Newport News and former Secretary of Commerce and Trade, has been
contracted to assist in this effort. The Board may recall that parallel to this process, Jackie
Shuck and the Airport Commission filed a grant request for $2,000,000 to achieve that
purpose. An executive summary of the grant request is included in your report. Note that on
the last page of this summary, Ms. Shuck shows how this might be accomplished. Please
understand that the exact methodology has yet to be determined, one of the primary
purposes of the new coalition being formulating a plan that consists of advance ticket
purchases via a travel bank and/or revenue guarantees by the business and government
community.
At the press conference, we will announce the formation of a coalition to achieve this
purpose. It has impressive support. Mr. Duval has met with business groups throughout
the 17 locality area serviced by the airport. Many of the business representatives will attend
and participate on the 14~'. Among these representatives are Charlie Steger, President of
Virginia Tech; Nick Taubman, Advance Auto; and Westvaco and elected representatives
from the Covington area. There is every indication that the coalition of business and
governmental representatives will be able to achieve its goal of improving service. I am
asking that you keep this information confidential until the press conference, but please
place this on your calendar if you will be able to attend. The press conference will be held in
the lobby of the airport at 1:30 p.m. on Friday, June 14.
Docket OST-2002-11590
Joint Application of
Roanoke Regional Airport Community
Consortium for Improved Air Service
and
Roanoke Regional Airport Commission
April 22, 2002
Small Community Air Service
Development Pilot Program
y
® Roanoke Small Community Air Service Development Pilot Program Application April, 22, 2002
it
The followin a lication for federal fitndin is bein filed in accordance with the re uirements of and
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pursuant to the Small Community Air Service Development Pilot Program, 40 U.S.C. 41743 et seq.
The co-applicants are the Roanoke Regional Airport Community Consortium for Improved Air Service
i and the Roanoke Regional Airport Commission.
The City of Roanoke has agreed to serve as the local sponsoring governmental entity for the requested
grant. Appendix A identifies the joint applicants and legal sponsor.
Since the date the Department's Order was published in the Federal Register, the Roanoke Regional
Airport Commission (Commission), owner and operator of the Roanoke Regional Airport (Airport), has
been contacting and working with the cities and counties located within the Airport's nineteen county
primary air service area to create the Roanoke Regional Airport Community Consortium for Improved
Air Service (Consortium). To date the follovv~ng commumries have chosen to participate in the
Consortium: City of Bedford; City of Roanoke; City of Salem; County of Botetourt; County of Craig;
County of Franklin; County of Roanoke; Town of Christiansburg; and the Town of Vinton. These
communities represent over a third of the 787,000 persons in the air service area. Each community was
asked to join the consortium, and, if possible during a very dismal fiscal year, to agree to contribute at
least $2,000 as seed money for the grant project. Since some of the official bodies meet only once per
month, it is expected that more communities will be added to the consortium as there is more time to
meet with them and discuss the funding and project being proposed.
The local air service community has long been aware of the high fares being charged by the carriers
operating at the Roanoke Regional Airport. This has been especially hard on the business community
which represents approximately 60 % of the passengers using the Airport. So hard, in fact, that at least
25 % percent of the Airport's potential passengers are driving to alternative airports. This is despite the
fact that the closest airport with a low fare carrier is nearly two hours driving distance away from
Roanoke, and even further for many of the outlying portions of the air service area.
Roanoke's average air fares, on a per mile basis, were 28% higher than the average of 58 small hub
airports, and Roanoke ranked 7`'' highest among these airports. In its top 15 business travel markets,
Roanoke air passengers paid an average of $50 more than the norm for markets of similar traffic density
and distance, based on a study using the DOT O&D Survey fare database. Moreover, Roanoke has
experienced one of the highest reductions in scheduled seat departures among small hub airports over
the past year. Roanoke's total seat capacity has been reduced by 25% and its jet seat capacity was
reduced by 43%. Roanoke is now served entirely by regional airlines with aircraft ranging from 29 to
50 seats.
In short, Roanoke has a critical and immediate need to attract aloes-cost, low-fare airline to provide
additional capacity and truly effective price competition that will adequately serve the Roanoke and
Western Virginia market area.
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Roanoke has designed an air service development initiat
Contacts have been made with glow-fare carrier; a feasibility study, a detailed route planning analysis,
Page 2
Roanoke Regional Airport Community Consortium for Improved Air Service
and the Roanoke Regional Airport Commission
and budgeting for the plan has been done; and the creation of a local area public-private partnership is
well underway. The plan is to enter into a "risk mitigation" agreement, including the provision for
advance ticket purchases and a revenue guarantee, with aloes-fare carrier for atwo-year service
commitment. The majority of the financial support required to implement this action plan will be
. provided by Roanoke's local public-private partnership.
Since the air service area is comprised of many relatively small communities and businesses, it
appeared that it would be impossible to put together the financial package which would be necessary to
lure a low cost carrier to the Airport. The Small Community Air Service Development Pilot Program
for the first time provides this air service community with an opportunity to put that package together.
The Consortium and Commission are seeking a grant in the amount of $2,000,000 to be used as a
portion of a revenue guarantee necessary to acquire the services of an established low fare carrier at
Roanoke Regional Airport. The remainder of the revenue guarantee and a supporting travel bank, as
well as co-operative advertising and some help with start-up costs, would then be the responsibility of
the of apublic-private partnership comprised of the Consortium, the Commission, and a new
organization of businesses and educational institutions which will be known as the Roanoke Regional
Airport Alliance. The local financial contribution for this plan is estimated at approximately
$4,000,000. This would be approximately two-thirds of the total planned risk minimization package.
The co-applicants and the business community are convinced that with assistance from the federal
government, an established low fare carrier can be recruited and begin service which should be viable
without any revenue guarantee within two years after the service starts. The benefits that will flow
from the new low-fare services will be enormous and widespread throughout the Roanoke Airport
service area. 'The proposed services are expected to lower air fares by as much as 50% on average to
travel destinations that account for about one-quarter of Roanoke's total air passengers. Equally
important, with the successful establishment of low-fare service, additional low-priced services are
likely to expand to other Roanoke markets in the future.
q
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Roanoke Regional Airport Community Consortium for Improved Air Service rage s
and the Roanoke Regional Airport Commission
April, 22, 2002
Roanoke Small Community Air Service Development Pilot Program Application
i~
~ A. Air Service Development Activities
Roanoke has for many years been active in the promotion and development of its airline services and in
the recruitment of new services from incumbent and other candidate airlines. The Roanoke Regional
Airport Commission is primarily responsible for this function and its programs are similar to those of
other small hub airports with relatively limited resources for these activities.
_ The Commission routinely conducts market research studies and travel surveys within its airport service
area, and analyzes published data sources to better understand, define and document the airports
principal service needs.
The Commission meets with incumbent airlines on a regulaz basis to propose and discuss new services,
fares and other air service issues. Potential new airlines not currently serving Roanoke are also
identified and meetings are often arranged to discuss and promote the service opportunities for those
carriers at Roanoke. The Commission also works with carriers that have expressed interest in future
service and provides them with relevant and up-to-date information on the airport's market area.
In addition, the Commission works closely with airlines in the promotion of new services that have
been launched. These activities include providing airlines with appropriate contacts in the local
business and travel agency communities; participating in various promotions and receptions, and
hosting special events.
The Airport Commission also places a high priority on marketing the airport and its services within its
19-county airport service area. The Airport's advertising programs are generally aimed to create a
greater awareness within the region of the convenience and pattern of services available at the airport,
and often provide fare information for top travel destinations. The Commission also markets the airport
through its website.
The Roanoke Regional Airport Commission's marketing budget is approximately $160,000 per year
(See Appendix E).
B. Current Top Air Service Development Objective
As discussed in the Section II, the establishment of low-fare airline service is one of Roanoke's top
objectives. To this end, Roanoke has had encouraging discussions with AirTran Airways regarding the
possibility of providing low-fare nonstop service to Atlanta. Because Atlanta is AirTran's primary
system hub, this service would offer low-fare connecting service to approximately 15 cities beyond
Atlanta. AirTran has been highly successful in developing low-fare services at other medium sized
communities.
However, although AirTran is interested in serving Roanoke, it has indicated that it is not presently in
position to assume the financial risk that is associated with launching service to Roanoke without a
it Service Page 20
Roanoke Regional Airport Community Consortium for Improved A
and the Roanoke Regional Airport Commission
Roanoke Small Community Air Service Development Pilot Program Application April, 22, 2002
"risk sharing" program with the community. AirTran has begun service to several other airports with
risk sharing~arrangements similar to those described below.
To further this initiative, Roanoke Regional Airport Commission retained SH&E, an aviation consulting
_ firm, to evaluate the feasibility of AirTran service to Roanoke and develop forecasts of traffic, revenue
and costs for the proposed services. (A summary of the consultants' report is contained in Appendix F.)
SH&E's conclusions were that the proposed services are economically feasible and have excellent
prospects to be profitable and self-sustaining within a reasonably short period of time. On a normalized
year basis, SH&E projects the three daily roundtrip service pattern to achieve a 62% load factor, and
generate $10.4 million in passenger revenues for the Roanoke-Atlanta segment. The operating costs for
the proposed B-717 services are forecast at $9.9 million. Thus, an operating profit of just over
$500,000 is projected for the first normalized year.
However, the normalized year forecast does not include the losses that would be expected during the
introductory period of service. This is estimated at approximately, $500,000, which essentially results
in a projected "break-even" operation for the first year of operation. Moreover, there is obviously
significant risk of financial loss if the traffic and revenue forecasts are not achieved Consequently,
notwithstanding the promising near term expectations of profitable services, AirTran would not be
~ willing at this time to institute the proposed service without a significant risk sharing program.
The main elements of the risk sharing plan are:
1. the creation of apublic-private partnership within the local community that will aggressively
promote the use of AirTran services, and provide a source for funding to reduce the carrier's
risk of significant financial loss.
2. an "advance ticket purchase" program that is intended to assure that commitments to use the
services are actually firm commitments.
3. a revenue guarantee agreement that will reimburse the airline for financial losses incurred
during the developmental phase, under an agreed formula.
This air service initiative is clearly a much greater undertaking and commitment of resources than those
encompassed by the Airport Commission's normal air service development efforts. But, the benefits of
anew low-fare service at Roanoke will be enormous, and the opportunity to obtain the service has
never been greater.
As described in Section III.D, the Commission, in conjunction with the City of Roanoke and the County
of Roanoke, is in the process of organizing the appropriate governmental and business consortiums that
are need to implement this program, and is investigating all sources of potential governmental and
private funding that will be required to achieve the program's goals.
Roanoke Regional Airport Community Consortium for Improved Air Service Page 21
and the Roanoke Regional Airport Commission
Roanoke Small Community Air Service Development Pilot Program Application April, 22, 2002
C. No Capital Cost Impacts
The Roanoke Regional Airport Commission has determined that the Airport's current airside, terminal
and groundside facilities are capable of handling the increased traffic and operations activity that would
result if Roanoke were successful in attracting the air services described in this proposal. As such, this
air service development program will have no impact on capital costs for Roanoke Regional Airport. It
maybe noted that a parking lot expansion project will be completed later this year and will improve the
Airport's capacity to accommodate higher levels of traffic demand.
D. Plan to Establish Low Fare Service
In order to convince a low fare carrier to provide service to and from Roanoke Regional Airport the
following is the action plan being pursued.
Public-Private Partnership
The Roanoke Regional Airport Community Consortium for Improved Air Service (Consortium) has
been created for the purpose of co-sponsoring this grant application, and to provide the financial and
other support necessary to obtain and retain a low fare carrier. Due to the relatively short time period
between the publishing of the Secretary's Order and the grant application deadline, not all cities,
counties and towns within the nineteen county air service area have had time to respond to the Roanoke
Regional Airport Commission's request that they join the Consortium. However, 6 cities/towns and 4
counties representing over 35% of the 787,000 people living within the air service area have already
joined the consortium, with the majority of these governments agreeing to pay at least $2,000 as earnest
money to begin the fund raising project. The City of Roanoke has agreed to serve as the legal sponsor
for the requested grant agreement. Appendix G contains letters of participation from local
governments.
The City and the County of Roanoke are negotiating for the services of a consultant to Contact
businesses throughout the Airport's service area and create the Roanoke Regional Airport Alliance
(Alliance). The Alliance would act as a support group for the Airport and a communications link
between the corporate community and the Airport Commission. The Alliance will partner with the
Consortium to raise the funds necessary to acquire the services of a low-fare carrier, and in particular
will be instrumental in creating the air travel bank.
In advance of the formal creation of the Alliance, numerous area businesses have submitted letters
supporting this application and pledging to support the low fare service. Some of these letters appear in
Appendix H.
Revenue Guarantee Agreement
The Airport Commission's own discussions with low-cost airlines, as well as the experience at other
communities, indicates that a revenue guarantee will be needed in order to attract an effective level of
service from low-fare carrier in the near term. The co-applicants for this grant believe that the total of
Roanoke Regional Airport Community Consortium for Improved Air Service Nage ~~
and the Roanoke Regional Airport Commission
Roanoke Smatl Community Air Service Development Pilot Program Application April, 22, 2002
such a revenue guarantee would be in the range of $2.5-3.0 million during the first two years of service.
The specific negotiated amount of the revenue guarantee and the circumstances for its payment would
be contained in a written contract between the Consortium and the low fare carrier. Since all of the
Consortium members are government agencies, all local and federal funds would have to be identified
and legally obligated at the time the contract is executed. In addition, as the legal sponsor for the grant,
the City of Roanoke would be subject to the requirements of the grant assurances and the federal single
audit obligations in the proper use and accounting of the grant funds.
Advance Ticket Purchase Travel Bank Program
In order to decrease the risk to the entities providing the revenue guarantee, a travel bank, which is a
fund established for the advance purchase of tickets on the selected low fare carrier, in the amount of
$2.0-3.0 million would be targeted. The travel bank is established to counteract the marketing power of
the frequent flyer programs that tend to draw passengers to the incumbent carriers when they drop their
fares to match the new entrant low fare carrier. With prepaid tickets on the low fare carrier, passengers
have an incentive to try the new service and assure themselves of its quality. This is extremely
important to establishing the self-sufficiency of the carrier's service.
Organizational and Program Operating Costs
Consulting and support staff fees to create and operate a new corporate airport support group, gather the
required cash and commitments, and complete negotiations with the airline would be in the range of
$150,000 to $200,000, although it is not anticipated that any full time staff positions would be required.
Advertising Program
Finally, the Airport Commission would provide up to $100,000 of funds for co-operative advertising
and would help defer some start up costs for the airline, within the limits of the federal regulations
governing revenue diversion. These funds would be derived from the Commission's reserves, not the
Airport's operating budget.
Timeframe for Implementing Low-Fare Service
AirTran Airways has indicated that the Roanoke Regional Airport is one of the airports that AirTran is
interested in serving, and such dialogue has been initiated. In addition, the co-applicants are willing to
talk to any other low-fare carrier or carrier willing to provide low fares which might have anear-term
interest in serving the Roanoke Regional Airport. If the services of a low-fare carrier cannot be
arranged within one year of the date of the federal grant, then the co-applicants will so notify the D.O.T.
and offer to cancel the grant. This one year period is necessary in order to firmly establish the new
organizations, gather the required funding and commitments, and to permit time to negotiate with the
targeted airline, including any time the airline may need to acquire or reposition its aircraft and
operations. If all arrangements are made prior to the end of one year, then D.O.T. will be so notified.
Roanoke Regional Airport Community Consortium for Improved Air Service Page 23
and the Roanoke Regional Airport Commission
Roanoke Small Community Air Service Development Pilot Program Application April, 22, 2002
Use of Federal Grant Funds and Reporting Procedures
Assuming that the Consortium is successful in acquiring the services of AirTran or another established
low fare carrier within twelve months after the effective date of the grant, then the co-applicants would
make the revenue guarantee, including the federal grant funds, available for a period of two additional
years, covering the air carrier's two year start-up time. Federal grant funds received under this program
would be used exclusively for the revenue guarantee agreement, and would not be used for any other
purposes or expenses. Monthly reports will be submitted to D.O.T. advising of the amount of the
revenue guarantee paid out in the prior month and seeking any proper reimbursement. .Additional
periodic reports will be provided to the D.O.T. regarding the performance of the services and their
impact on the Roanoke air travel market, or as requested by D.O.T. At the end of the two year start-up,
which would be three years after the grant is awarded, the Consortium would return the federal funds to
D.O.T., if any, which have not been paid to the air carrier as part of the revenue guarantee.
~ E. Financial Plan
The financial plan to support the program described in Part III.D. above, would be as follows:
Approximately $200,000 will be needed for consulting services necessary to establish and operate the
public/private partnership consisting of the Roanoke Regional Airport Community Consortium for
Improved Air Service (Consortium) and the Roanoke Airport Alliance (Alliance), as well as for the
professional services that will be required to negotiate with the low fare carrier for the targeted service.
Additional funds will most likely be needed to assist in advertising the new service within the airport
service area. The group would qualify for up to $25,000 of state funds for advertising the new service,
with a $25,000 local match being. required; otherwise, all of these funds will be provided by local
sources. It is expected that the sources of funding would be 50% public and 50% private.
A total revenue uarantee in the range of $2.5-3.0 million will be required for the first two years of
g
service by the low fare carrier. It is likely that some, and perhaps all, of these funds will need to be paid
to the carrier, especially during the first year of service. The $2,000,000 of federal funds being
requested in this application would be used exclusively for the revenue guarantee, with up to
$1,000,000 of local funds being committed for the guarantee. 'It is likely that the majority of the local
~~ funds will consist of public funds from local governments and planning agencies.
The Consortium and the Alliance will work together to create a travel bank representing pre-paid tickets
on the new low fare carrier. The goal would be to have $3,000,000 pledged to the bank with the
majority of these pledges coming from private businesses in the Airport's service area. Any funds
remaining in the bank after two years would be paid directly to the air carrier. Due to the relatively
small size of most of the region's businesses, this would have to be a true grass roots campaign and
involve even the smallest of businesses.
9, Finally, the Roanoke Regional Airport Commission would provide $100,000 for advertising to appear
within the airport service area which promotes the new, low fare air service. It would also assist by
waiving certain airport fees and charges for the new entrant carrier during a short promotional period
following the beginning of service. The funds would not come from the Commission's operating
budget, but would supplement the Commission's existing marketing program.
Roanoke Regional Airport Community Consortium for Improved Air Service Page 24
and the Roanoke Regional Airport Commission
Roanoke Small Community Air Service Development Pilot Program Application
April, 22, 2002
The chart below summarizes the budget for the proposed air service development program and the
planned sources of funds: '
Summary of the Roanoke's Low-Fare Air Service Development Financial Plan
Funding Source
Local Government
Consortium
Business Alliance
Airport Commission
Federal Grant
Total Program
Admin. 8 Adv. Purchase Revenue Total
Marketing Travel Bank Guarantee Funds
$100,000 $750,000 $850,000
$100,000 $3,000,000 $3,100,000
$100,000 $100,000
$2,000.000 $2,000,000
$300,000 $3,000,000 $2,750,000 $6,050,000
Note: The local government Consortium revenue guarantee shown is mid-point of $500,000 to $1,000,000 planned contribution.
Based on the total planned funding, the federal grant funds would represent approximately one-third of
the total amount committed by all parties to the public-private initiative.
Roanoke Regional Airport Community Consortium for Improved Air Service Page 25
and the Roanoke Regional Airport Commission
~ •
Barry E. Duval
President and CEO
Powering your growth ~ h leadership. 757.591.6501
July 12, 2002
Mr. Joseph B. Church
Chairman
11817 Canon Boulevard
Suite 400
Newport News,VA 23606
757.591.6500
fax 757.591.6519
beduval@kaufcanconsulting.com
Board of Supervisors
County of Roanoke
Post Office Box 29800
Roanoke, Virginia 4018-0798
Dear Mr. Ch ~~~
As you are aware, on June 14 we held a press conference at the Roanoke
Regional Airport to announce the creation of the Roanoke Regional Airport Alliance.
Since the press conference, I have compiled an overview of airport alliance initiatives
from other cities throughout the country. Enclosed is a copy of the document outlining
those action items and the cities approach to improving air service and securing low-
fare carriers. I hope you will find this material interesting and beneficial as we work
towards a mutual goal of airport growth in Roanoke.
Please do not hesitate to call upon me if you have any questions.
Sin r ,
Barry E. D al
BED:jcd
Enclosure
Docs#390
www.kaufcanconsulting.com
JUL-12-2802 09 32 ROANOKE CITY MANAGER
For Immediate Release
Contact:
Chris Slone
pirector Of Communications
City of Roanoke
54{3-853-2333
eslone(c'>Z~,i,roanoke.va.us
June 14, 2002
15408531138 P.82i05
vaic~n~r-, caAaseA~ saes
Busi>t~ess-Driven Alliance Announces Quest tv Help Improve
Regional Air Service
ROANOKE, Va. -Abroad coalition ofi public officials and private business leaders
unveiled today a regional alliance newsy created to assist the Roanoke Regional Airport
Commission in pursuing federal assistance and other means to improve focal air service.
The mission of the Roanoke Regional Airport Alliance-~nrhich includes the leadership of
private companies such as Carillon Health System, Advance Auty Parts, Virginia Tech,
MeadWestvaco and others-is to stimulate and enhance economic development in the
Roanoke Regional Airport's service area by providing the airport monetary support and a
forum for information exchange among the business community, the airport, and the
communities served by the airport.
"With open arms, the Roanoke Regional Airport Commission welcomes .the assistance
and support of these business leaders," said Jacqueline Shuck, executive director of the
Roanoke Regional Airport Commission, the body that owns and operates the airport.
"With the addition of these strategic partners, we feel we can be much more effec#ive in
our endeavors to enhance airport service.°
In what is developing Into a national trend, airports in smaller cities-Pensacola, Fla.,
Rochester, N.Y., Tallahassee, Fla., and Wichita, Kan., to name aflew-,are partnering
with local businesses to bring better service to their airports. Both Newport News and
Richmond have adopted this approach. "The Roanoke region is stepping up and saying
that we too want to control our own destiny," said Shuck.
"Simply put, this partnership puts local business leaders in the co-pilot's seat, alongside
the Roanoke Regional Airport Commission," said Roanoke Mayor Ralph Smith. The
mayor thanked the Regional Leadership Summit for sparking life into this idea. The
summit's mayors and chairs, along with the Airport Commission, have met and endorsed
the strategy. °They're the ones who'll together be developing a flight plan to get us to
where we need to be. It's certainly a proactive approach to one of our area's most
daunting challenges."
Office of Public tnfozzmation Municipal South, Room 364 215 Church Ave., S.W. Itaanoke, VA 24011 (540) $53-2336
CityWeb:www.ci.xoaaoke.va.u s
JUL-12-2002 09 32 ROANOKE CITY MANAGER 15408531138 P.03i05
The Roanoke Regional Chamber of Commerce will facilitate the administration of 'the
new alliance. "As a partner in the Roanoke Regional Airport Alliance, the Chamber wil!
be working to improve the region's air service and consequently its business climate,°
said Chamber Chairman G. Michael Pace. Roanoke's business community represents
approximately 60 percent of the passengers who use the Roanoke Regional Airport.
The airport's service area is comprised of 19 counties. Eighteen entities within the
service area have already expressed support for this development effork:
• City of Roanoke
• County of Roanoke
• City of Bedford
• City of Salem
• County of Bath
• County of Botetourt
• County of Floyc!
• County of Giles
• Town of Christiansburg
• Tawn of Vinton
• County of Wythe
• City of Covington
• County of Alleghany
• County of Bland
• County of Craig
• County of Franklin
• Town of Blacksburg
• Virginia Tech/Montgomery Regional Airport Authority
According to Joseph "Butch" Church, chairman of the Roanoke County Board of
Supervisors, the communities' goal is "to improve air service at the Roanoke Regional
Airport to benefit our citizens, corporations, and other institutions in this area of Virginia
and West Virginia. This regional initiative is a wonderful effort and Roanoke County
pledges its solid support."
In April, the Airport Commission and a coalition of communities it serves applied for a
federal grant of $2 million from the U.S. Department of Transportation through a Small
Community Air Service Development Pilot Project. That grant application is still pending:
With the assistance of the Fifth Planning district Regional Alliance, the local jurisdictions
have retained former state Secretary of Commerce and Trade, Barry E. DuVa1, to help
navigate the path ahead. DuVa! is president and chief executive officer of the Newport
News-based consulting firm, Kaufman & Canoles Consulting LLC. A former mayor of the
city of Newport News, Duval has for many years been actively involved in promoting
new air service.
JUL-12-2002 09:33 ROANOKE CITY MANAGER
15408531138 P.04i05
Statements t~rom Local Business Leaders
Raanoke's business cammunlty represents approxirnatsty 60 percent of the passengers who use the
Roanoke Regional Airport. The following area #ew statements matte recently by local business
leaders in support of the Roanoke Regianat Airport Alliance, Ita mission, and its goals.
"As a partner in the Roanoke Regional Airport Alliance, the Roanoke Regional Chamber
will be working to improve the region's air service and consequently its business
climate."
-G. Michael Pace, chairman of the Roanoke Regional Chamber of Commerce
"Reasonably priced airtare has proven to be critical to economic development in other
areas. Securing aloes-fare carrier to the Roanoke Regional Airport will certainly improve
the valley's economy."
-Heywood Fralin, chairman of the Roanoke Valley Business Council
"The valley region needs reliable, quality, air service to reach its full potential. High-tech
companies likely to result from Carillon Biomedical Institute will require quick, convenient
access to business and technology centers around the country. I believe this public-
private partnership can attract the kind of airline services we need."
-Edward G. Murphy, MD, president and chief executive officer of Carillon Health System,
the region's largest employ®r
"Virginia Tech has over 6,000 employees and 25,000 students who depend on the
Roanoke Regronaf Airport for their air travel needs. It is essential to the vi#ality of this
university that reasonably priced, quality air service be availai=!e at the airport."
-Dr. Charles W. Steger, president of Virginia Tech
"Timely service to our domestic and international customers is critical to our business
success. As part of the sale, our customers expect quick service, which often means a
face-to-face meeting, whether they are in Chicago or Singapore. The alliance creates a
unique liaison of regional government and business interests working togefher. We
welcome the opportunity to participate in this effort and we look forward to the benefits
an enhanced air service wilt bring our region through increased tourism, and improved
personal and business travel schedules."
-Dave Newkirk, vice president of MeadWestvaco--Covjngton Operations
JUL-12-2002 09 33 ROANOKE CITY MANAGER 15408531138 P.05i05
"I support this initiative as a businessman and as a student pilot. 1 cannot think of
anything our valley needs more than reasonably priced, competitive, quality air service."
Vlator F. Foti, executive vice-president of Viamac, Inc., which trades locally as Western
Sizzlin' and Fuddruckers, employing over 300 people in Raanake
"As an active participant in economic development efforts, I often hear inconvenient and
expensive air service as the primary reasons companies elect not to locate or expand in
Southwestern Virginia. Without reasonably priced, quality air service, our region will
continue to stagnate, thus continuing to put thousands of jobs at risk_
--G. Len Boone, president of t3oone & Company Realtors
"In the business communifiy, many of us believe that one of the largest impediments that
regionally based companies face in competing in national and global markets is the high
cost of air travel to and from Roanoke as compared to other regions in the country. Not
only is this an impediment to the growth of local companies, it has also hampered the
recn~itment of companies from outside this area."
-Victor lannello, president of Synchrony, a technology firm located in R.oanake County
"Our .home office is located in Atlanta, Oa., and frequent travel is required to that
location, as well as to other Cox locations and conferences across the United States.
Whatever we can do to improve our air service locally helps improve our business
efficiency."
-Catharine McCullough, vice president and general manager far Cox Communications of
Roanoke, which employs 166 in the Roanoke Valley
"Improved air service is important to my company because our corporate headquarters
is located in downtown Chicago. Improved access to the Roanoke Valley allows us to be
more effective in making Timely strategy decisions that impact the long-term viability of
this facility."
-Donal Robb, vice presldent/division director of RR Donnelly ~ Sons Co., Roanoke
Manufacturing Division, a book printer locat®d in Salem, which employs 237 people
"Jf the airport flourishes, we flourish."
slim Wade, president and chief executive efficer of Advance Auto Parts, aRoanoke-
based auto parts retail chain employing over 32,000 nationally and appraxlmately 1,200 in
the Roanoke Valley
TOTAL P.05
• Alliance to make airport soar
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Page 1 of 3
~~~° lam' ~ ~AttS ~~ ~1~IVS TIPS ~SU~~CIi~ APSE `k~ t1~CT S
Saturday, June 15, 2002
Group includes public officials and business leaders from at
least 17 different localities
Alliance to make airport soar
The Roanoke Regional Airport Alliance will try to bring new airlines
and cheaper fares to the airport.
By TODD JACKSON THE ROANOKE TIMES
On Friday, an unusually broad coalition of public-
and private-sector leaders stood shoulder to shoulder to announce a
major initiative that includes their formation of a new organization, the
Roanoke Regional Airport Alliance.
Efforts to improve air service at Roanoke Regional ~~end .~~~
Airport are climbing to a new altitude. {"- ~~o #o
~~`"~ a ~r end
The alliance's main goal will be to pursue strategies to bring more
airlines and cheaper fares to the airport, which would benefit local
airport users and also make the region a more attractive marketplace
nationwide.
One such strategy would tap the private sector. Businesses and other
airport users, including the largest, Virginia Tech, would be asked to
guarantee a certain number of flights for their employees, and the money
would be collected in a fund to lure a new airline to the airport. Business
travel makes up 60 percent of the airport's business.
"It's a proactive approach to one of the region's most daunting
challenges," said Roanoke Mayor Ralph Smith. "The cost of a plane
ticket, as we well know, can be high both in cost and time. We need
cheaper flights."
Public officials and business leaders from at least 17 different localities
from the Alleghany Highlands to the New River Valley were there for
Friday's announcement. They included mayors such as Smith and
Salem's Sonny Tarpley. They included business leaders such as Dave
Newkirk, vice president of Covington's MeadWestvaco, and Jim Wade,
president and CEO of Roanoke-based Advance Auto Parts.
And they included other public officials such as U.S. Rep. Bob
http : //www. ro anoke. com/ro atimes/news/story 13 2118 . html
6/26/2002
Alliance to make airport soar Page 2 of 3
Goodlatte, R-Roanoke, and Virginia Tech President Charles Steger.
Former state Commerce Secretary Barry Duval, who's been hired to lead
the new initiative, praised the local support and said it's the key to
success.
"Counties and cities aren't growing and prospering along political
boundaries," he said.
The alliance will assist the long-standing Roanoke Regional Airport
Commission, and Duval will be its point man.
He is no stranger to the subject. As mayor of Newport News from 1990-
96, Duval played a key role in airport improvements there. Officials
there lured AirTran to its airport by providing a public subsidy of about
$1 million, Duval said. AirTran initially offered three flights a day from
Newport News to Atlanta at substantially lower rates. It now offers five
and has extended its flights to include trips to New York and Florida,
Duval said.
At least one other airline that serves the Newport News airport has since
increased its flight schedule and reduced its prices, he said.
DuVal's ties to AirTran have led some to speculate that the airline may
come to the airport here.
However, Duval said Friday that it's too early to discuss such details.
He said medium-sized markets have used a variety of successful
strategies nationwide to entice airlines to offer service, and added that a
plan must be developed according to the resources and goals of a
specific locality.
Duval; now president of Kaufinan & Canoles Consulting in Newport
News, said he's set a goal to get something done here in 12 months or
less.
"It will take the entire community to make this successful," said Duval,
whose $4,100 monthly fee is being paid through an arrangement
between Roanoke, Roanoke County and a planning district partnership.
The new initiative could get a huge boost if the airport is awarded a
share of a federal grant that it applied for in April. The airport has asked
for $2 million out of a $20 million pot to be awarded to by the U.S.
Department of Transportation this year.
The Roanoke Regional Chamber of Commerce is administering the
alliance's program. For more information, call the chamber at 983-0700.
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Alliance to make airport soar
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