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: Metropolitan Topeka Airport Authority Name of Signatory Party for Legal Sponsor: Eric Johnson, President DUNS Number: 15-094-7141 EIN/Tax ID:

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

1. Metropolitan Topeka Airport Authority, Topeka, Kansas

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. Topeka Regional Airport, FOE

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 X

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 (explain) X

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 1

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

1. Large hub airport: Dallas/Ft. Worth Int’l (DFW), 481 miles 2. Medium hub airport: Kansas City Int’l (MCI), 79 miles 3. Small hub airport: Wichita (ICT), 150 miles 4. Airport with jet service: Manhattan (MHK), 70 miles Note: Provide the airport name and distance, in miles, for each category.

E. LIST THE 2-DIGIT CONGRESSIONAL DISTRICT CODE APPLICABLE TO THE SPONSORING ORGANIZATION, AND IF A CONSORTIUM, TO EACH PARTICIPATING COMMUNITY.

1. KS-02

F. APPLICANT INFORMATION: (CHECK ALL THAT APPLY)

Not a Consortium Interstate Consortium Intrastate Consortium X

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

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. See Section C.1. (“Essential Air Service Communities”)

If previous recipient: Provide year of grant(s): 2012; and, the text of the grant agreement section(s) setting forth the scope of the grant project:

Revenue guarantee, start-up cost offsets, and associated marketing to recruit, initiate, and support new non-stop service from Forbes Field Airport to Chicago.

G. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION NAMES)

PUBLIC PRIVATE

1. Metropolitan Topeka Airport Authority 1. Greater Topeka Area Chamber of Commerce 2. City of Topeka 2. Coalition of Topeka Area Businesses 3. Shawnee County Commission

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 2

H. PROJECT PROPOSAL:

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

X Launch New Carrier Secure Additional Service Upgrade Aircraft

X First Service X New Route Service Restoration

Regional Service Surface Transportation X Professional Services

Other (explain) ______

1b. GRANT GOALS: (SYNOPSIS)

CONCISELY DESCRIBE THE SCOPE OF THE PROPOSED GRANT PROJECT (FOR EXAMPLE, "REVENUE GUARANTEE TO RECRUIT, INITIATE AND SUPPORT NEW DAILY SERVICE BETWEEN ___ AND ___. OR "MARKETING PROGRAM TO SUPPORT EXISTING SERVICE BETWEEN ___ AND ___ BY ____ AIRLINES."

Topeka Regional Airport and its community funding partners seeks a Small Community Air Service Development Grant in support of a revenue guarantee to recruit non-stop service to Dallas/Ft. Worth, providing broad connectivity to much of the country.

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 X

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 X

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 3

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 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)

X 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)

X 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 X 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; X counted as in-kind contributions only

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

______

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 4

I. EXISTING LANDING AIDS AT LOCAL AIRPORT:

X Full ILS X Outer/Middle Marker X Published Instrument Approach

Localizer Other (specify) X

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 $800,000 2 State cash financial contribution $0 Local cash financial contribution 3a Airport cash funds $50,000 3b Non-airport cash funds $300,000 3 Total local cash funds (3a + 3b) $350,000 4 TOTAL CASH FUNDING (1+2+3) $1,150,000 In-Kind contribution 5a Airport In-Kind contribution** Fee Waivers 5b Other In-Kind contribution** $0 5 TOTAL IN-KIND CONTRIBUTION (5a + 5b) Undetermined – based on aircraft size 6 TOTAL PROJECT COST (4+5) $1,150,000

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.

Topeka Regional Airport will offer one year of full terminal rent and landing fee waivers as an in-kind contribution. The amount of the waiver will depend on aircraft size and the amount of terminal space required by the carrier operating service.

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 5

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. X

M. IS THE LEAD APPLICANT OR ANY CO-APPLICANTS DELINQUENT ON ANY FEDERAL DEBT? (IF “YES”, PROVIDE EXPLANATION)

No Yes (explain) X

______

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 6

TABLE OF CONTENTS

SECTION PAGE NUMBER

Legal Sponsor 7 Introduction 8 The Topeka Air Service Market 9 Catchment Area Demographics 9 Regional Pandemic Service Losses 10 Performance of Previous Service 12 Air Service Needs and Deficiencies 14 Passenger Retention and Drive Diversion 14 Point-of-Origin on Previous Service 15 Air Service Development Plan 16 Targeted Service: Topeka – Dallas/Ft. Worth 17 Project Timeline 19 Funding Plan 19 Public/Private Partnership 20 Conclusion 21

LEGAL SPONSOR

The Metropolitan Topeka Airport Authority is the legal sponsor responsible for this Grant program. The Authority is the governmental agency that owns and operate Topeka Regional Airport.

Metropolitan Topeka Airport Authority Topeka Regional Airport 6510 SE Forbes Avenue, Suite One Topeka, Kansas 66619 Eric Johnson, President/Director of Airports (785) 862-2362 [email protected]

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 7

INTRODUCTION

Airline service in Kansas and nearby Missouri has been decimated by the pandemic. The two states have lost 40% of their airline capacity – an average of 9,400 departing seats each and every day that have been removed from service. Topeka’s main alternate airport, Kansas City, has lost 42% of its capacity, or an average of 8,400 departing seats per day.

Topeka is looking to take advantage of this shift is airline capacity to secure its own scheduled airline service, post-pandemic. Topeka Regional Airport is seeking Small Community Air Service Development Grant funding for daily scheduled service to Dallas/Ft. Worth on the American Airlines code. The project will re-allocate some of the region’s lost capacity to Topeka – an airport without current scheduled flights.

In preparation for this application, the Airport has been working with its community partners to grow its local risk mitigation funding. It has increased the local share in this application from $250,000 in 2019 to $350,000 in 2021. Community support for service has not “Topeka is looking to take lagged, even during the pandemic. advantage of this shift is

airline capacity to secure its The Airport met with executives from American Airlines and own scheduled airline SkyWest Airlines, in person, this fall to discuss this specific service, post-pandemic. The project and earn each Airline’s support. While both carriers are project will re-allocate some still working to determine what their networks will look like as of the region’s lost capacity to the pandemic wanes, both were very supportive of the concept Topeka – an airport without of serving Topeka from DFW. current scheduled flights.”

Topeka is one of only a handful of state capital cities without scheduled airline service. The region is quickly growing with the lowest unemployment in the region. Yet business development will be hindered following the pandemic due to the difficulty in traveling to and from the community.

Topeka Regional Airport has seen success in leveraging a Small Community Air Service Development Grant award airline service. In 2014, United launched service between Topeka and Chicago O’Hare – the exact goal of the application. The Airport converted the award into service in less than 12 months. That service brought fares to the Topeka catchment area that were 19% below the prevailing average offered at other airports – which it hopes to duplicate with this project.

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 8

THE TOPEKA AIR SERVICE MARKET

Topeka is at the center of a region that has lost more than 40% of its capacity during the pandemic. While Topeka does not have current air service, the airports the region relies on for access to the world have seen flight schedules slashed. While demand is currently down, it will return and Topeka has the opportunity to be better positioned to serve east central Kansas than it was before the pandemic.

The Topeka area is home to 8% of the population of the State of Kansas but Topeka Regional Airport is one of the few state capitals without airline service. The Airport is at the center of an area with a population

of almost 360,000 people (refer to MAP 1: TOPEKA REGIONAL AIRPORT CATCHMENT AREA map 1). The Topeka metro area CY2019; SOURCE: US CENSUS DATA (MSA) is home to 232,594 people as of the 2019 US Census estimate. The 30-minute drive time catchment area for Topeka Regional Airport is home to 176,500 people. The 45-minute drive time catchment has a population of 295,500 people. The hour drive time catchment has a population of 359,000 people.

Topeka has weathered the pandemic much better than most other areas of the Midwest, and of the country. Topeka unemployment in September was 5.9%, which was two points better than the national average of 7.9%. Lawrence unemployment was 6.2%, which is still better than average. Kansas City, by comparison, had unemployment at 6.1%. People are still able to work in the region – as it has a high percentage of essential jobs in health care and agriculture.

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 9

Colleges and universities surrounding Topeka enrolled more than 72,000 full-time students for the fall 2020 semester – with most of the learning taking place in person. The nearby University of Kansas (also known as KU) in Lawrence is just 25 minutes from the terminal at Topeka Regional Airport. In a typical Athletic Year, University of Kansas teams and the teams they are scheduled to play, will travel by air at least 70 times. Major KU teams use Topeka for charters to events. The smaller teams and fans of KU are forced to fly through Kansas City, with no local travel option. The University would like to move that travel to Topeka, post-pandemic, if service was offered.

CHART 1: SCHEDULED AIRLINE SEATS IN KANSAS AND MISSOURI Its currently more difficult 2020 VS. 2019; SOURCE: AIRLINE DATA, INC. SCHEDULES than ever for passengers traveling to and from the Topeka catchment area to fly. While a new study of 2019 data completed for this application shows the catchment generates an average of 1,600 passengers per day each way (PDEW), airports in the region have had service levels collapse during the pandemic.

The region, including all CHART 2: SCHEDULED AIRLINE SEATS AT KANSAS CITY (MCI) airports in both Kansas and 2020 VS. 2019; SOURCE: AIRLINE DATA, INC. SCHEDULES Missouri, had 17 million scheduled seats in 2019 (refer to chart 1). That dropped to 10 million in 2020. The region has lost an average of 9,400 departing seats per day – or more than 120 departing flights per day. A total of 40% of available seats were pulled from airports in the region in 2020.

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 10

Topeka’s main alternate airport, Kansas City, has been even more impacted. Airlines serving MCI cut available seats by 42% in 2020, as compared to 2019 (refer to chart 2 on the previous page). Kansas City had 15 million scheduled seats in 2019. That dropped to 8 million in 2020. Kansas City has lost an average of 8,400 departing seats per day during the pandemic.

MAP 2: ROUTES PERMANENTLY CANCELLED AT KANSAS CITY (MCI) Kansas City has lost more than AS OF JANUARY 2021; SOURCE: AIRLINE DATA, INC. SCHEDULES just available seats and flights. It has lost nonstop service in 15 markets (refer to map 2). It no longer has nonstops to many cities on the east and west coast, along with some primary leisure markets. With fewer nonstops from MCI, many who fly to and from Kansas City will be forced to make connections in the future, where they once had the convenience of flying direct. This will make it easier for Topeka to convert local passengers to Topeka flights, even if those flights are not as well timed or if they require connections. Kansas City’s competitiveness has been permanently weakened by the pandemic resulting in new opportunity for Topeka to support air service.

The current situation is much different than it was the last time Topeka had air service. In 2014, Topeka Regional Airport successfully leveraged its previous Small Community Air Service Development Grant award for United Airlines-coded regional jet service to Chicago O’Hare. It took the Airport less than a year to secure service once its Grant was awarded. But the service immediately ran into difficulty due to operational challenges. Topeka had the unique, unfortunate distinction of having its inaugural flight – the very first flight to and from Chicago – cancelled due to weather. The immediate media narrative was that Topeka’s new airline service was unreliable.

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 11

Unfortunately, that narrative proved to be true. United cancelled 14% of flights in the first month of service and 10% of flights in the second month (refer to chart 3). United cancelled 1.3% of all scheduled flights for the full period. United only had two months with fewer than 4% of flights cancelled. The businesses that supported the introduction of CHART 3: OPERATIONAL RELIABILITY OF FOE-ORD SERVICE service quickly found their JANUARY 2014 – AUGUST 2014; SOURCE: AIRLINE DATA, INC. employees booking away from Topeka, flying instead out of Kansas City as so many of their flights were cancelled.

With such poor operational reliability, it is no mystery as to why the service ended so quickly. The impact of the Topeka community’s perception that service to Chicago was often cancelled and delayed is clear in the passenger origin and destination data. Most passengers were worried about making connections at Chicago; those flying to other cities often drove to Kansas City for flights instead of attempting to connect at O’Hare.

Topeka’s previous Grant did achieve the goal of lowering fares for passengers in the Airport’s catchment area. The average fare they paid to use United service at Topeka Regional Airport was $183 each way. Those who continued to drive to other airports in the region paid a premium of 19% over the Topeka fare, or $218 each way. The fact that travelers were willing to pay this premium, while still spending hours in a car to access air service, indicates just how much the poor initial operational reliability of service damaged community perceptions.

Topeka Regional Airport has learned a number of lessons from its previous network carrier service. First, with the breadth of service available at Kansas City and the high share of business travelers, it must have service that is reliable. Second, it must have service to a hub with better weather than Chicago. Third, it must work to launch service in a favorable time of the year, as the effects of the pandemic are waning.

This application for support from the Small Community Air Service Development Grant Program achieves all three of these goals. The Airport seeks service to Dallas/Ft. Worth, on a regional carrier that can offer connections to American Airlines’ large DFW hub. The service is targeted to begin between spring and fall and not in the winter.

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 12

The Airport has conducted meetings with stakeholders in the community to determine whether or not regional businesses even want local air service. Despite the previous experience, the vast majority of local businesses are behind this application. They believe Topeka can support the right service. They are willing to back their demand for air service with matching funds for this application – which have been increased from $200,000 to $300,000 from the last application in 2019.

The end of the pandemic will represent a unique opportunity for Topeka Regional Airport. Air service in the region will be re-distributed. Kansas City will not regain all of the seats and nonstop destinations it had in 2019. With air service less convenient at Kansas City, more passengers will be interested in using Topeka. This Grant is the key to securing that service.

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 13

AIR SERVICE NEEDS AND DEFICIENCIES

Many areas of the country have seen massive aviation impacts due to the pandemic. Topeka does not have scheduled airline service – but its residents have been impacted by huge capacity cuts at Kansas City, Wichita, Omaha, and Manhattan. The pandemic is likely to change the way Topekans travel for many years to come. But it also presents an opportunity to reprogram passengers to fly from their local airport. And there is no question that the underlying market demand is sufficient to support flights.

The withdrawal of United Airlines service from Topeka Regional Airport in 2014 left eastern Kansas with no scheduled airline service. With a large and growing economy, more than 360,000 people who live closer to Topeka Regional Airport than any other airport, and a state capital, the Airport will be able to support

the right air CHART 4: TOPEKA PASSENGER LEAKAGE service. CY2019; SOURCE: VOLAIRE AVIATION, INC. Rank Airport Code Airport Location and Name O&D Passengers PDEW Share 1 MCI Kansas City International Airport 1,133,463 1,552.7 98.8% The Airport 2 ICT Wichita Dwight D. Eisenhower Nat'l Airport 7,707 10.6 0.7% commissioned a 3 OMA Omaha Eppley Airfield 4,487 6.1 0.4% 4 MHK Manhattan Regional Airport 1,684 2.3 0.1% new passenger All Airports 1,147,342 1,571.7 100.0% retention study for this application. Data from 2019 was analyzed, to provide a market baseline, pre- pandemic. The study shows the immediate Topeka Regional Airport catchment area generates more than 1.1 million annual airline passengers (refer to chart 4). Before the pandemic, the catchment area generated an average of 1,572 passengers per day each way (PDEW), enough to fill 31 daily 50-seat regional jet departures. CHART 5: FARE BY AIRPORT OF ORIGIN CY2019; SOURCE: VOLAIRE AVIATION, INC.

Topeka catchment area Rank Airport Code Airport Location and Name RDEW Fare passengers pay high fares no 1 MCI Kansas City International Airport $332,107 $214 2 ICT Wichita Dwight D. Eisenhower Nat'l Airport $2,246 $213 matter what airport they use for 3 OMA Omaha Eppley Airfield $1,174 $191 service. The average fare in the 4 MHK Manhattan Regional Airport $567 $246 All Airports $336,093 $214 catchment, paid by all passengers at all the airports they use, is $214 one-way. The vast majority of Topeka catchment area passengers, 99%, use flights at Kansas City International. Other airports get much smaller shares of Topeka area passengers. Topeka’s closest airport, Manhattan, has an average one-way fare of $246 on flights to Chicago and Dallas/Ft. Worth.

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 14

The Airport also wanted to understand passenger behavior from its last scheduled service, United to Chicago, which operated in 2014. It commissioned a point-of-origin study to determine where the passengers using that United service were coming from. The study shows that while passengers came from miles away, the majority who used the service were from the immediate area.

CHART 6: POINT-OF-ORIGIN FOR TOPEKA UNITED PASSENGERS The study further showed an CY2014; SOURCE: VOLAIRE AVIATION, INC. average of 27 passengers per day State of Origin Passengers PDEW Fare Revenue Pax Share Rev Share Kansas 9,056 24.8 $240 $2,175,846 93.1% 91.5% (PDEW) originated their trips at Missouri 440 1.2 $347 $152,718 4.5% 6.4% Topeka Regional Airport. 93% of Nebraska 232 0.6 $208 $48,141 2.4% 2.0% Totals 9,728 26.7 $244 $2,376,706 passengers came from Kansas, while 5% came from Missouri, and 2% came from Nebraska (refer to chart 6). The passengers who came from Topeka paid an average of $240 one way and generated $2.2 million in ticket revenue.

Zip codes in Topeka generated 47% of outbound passengers, while Lawrence generated 21%, Overland Park generated 16% (refer to map 3). Topeka did draw a small number of passengers from Manhattan (3%), Kansas City (3%), and MAP 3: ROUTES PERMANENTLY CANCELLED AT KANSAS CITY (MCI) Wichita (1%), but the number AS OF JANUARY 2021; SOURCE: AIRLINE DATA, INC. SCHEDULES of passengers from those areas was negligible. The bottom line: Topeka service was supported by Topeka passengers.

While the pandemic has undoubtedly changed travel patterns, the Airport knows from the study of past experience it can pull local travelers away from far-away alternate airports. The pandemic is creating an unforeseen opportunity to bring Topeka travelers back to their local airport. To do that, the Airport will need to mitigate risk, cultivate its relationship with the airline partner, and effectively market its benefits to the community.

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 15

AIR SERVICE DEVELOPMENT PLAN

Even during the pandemic, Topeka Regional Airport leadership continued to work with business partners throughout the eastern half of Kansas on its strategic plan to secure network airline service. Those business partners have been clear their preference of hub CHART 7: DALLAS/FT. WORTH’S TOP 30 UNSERVED MARKETS is Dallas/Ft. Worth and that DFW serves most YE1Q20; SOURCE: AIRLINE DATA, INC.

of their destinations with a single stop. With Market Passengers PDEW O/W Fare confidence that business travelers will use local Green Bay, WI 15,695 21.5 $247 Appleton, WI 14,996 20.5 $234 service once the pandemic relents, the Airport Topeka True Market 13,832 18.9 $168 seeks a minimum revenue guarantee in support Akron, OH 10,828 14.8 $234 Flint, MI 10,532 14.4 $199 of American Airlines-coded service to DFW. Kalamazoo, MI 7,858 10.8 $229 Lansing, MI 7,309 10.0 $206

Mosinee, WI 6,957 9.5 $231 Topeka’s market, including passengers that Rochester, MN 6,690 9.2 $201 Williston, ND 6,391 8.8 $342 drive to other airports to access airline service, La Crosse, WI 5,973 8.2 $200 ranks as the third-largest in the Midwest Minot, ND 5,678 7.8 $283 Saginaw/Bay City/Midland, MI 5,489 7.5 $242 without a Dallas/Ft. Worth nonstop flight (refer Duluth, MN 5,477 7.5 $213 to chart 7). The Topeka catchment area Grand Forks, ND 3,503 4.8 $259 Dubuque, IA 2,992 4.1 $245 generated an average of 19 passengers per day Toledo, OH 2,857 3.9 $242 Marquette, MI 2,725 3.7 $242 each way (PDEW) to and from Dallas before Lincoln, NE 2,486 3.4 $244 the pandemic. With such a large local traffic Dickinson, ND 1,654 2.3 $258 Rhinelander, WI 1,641 2.2 $220 component, Topeka Regional Airport is Bemidji, MN 1,506 2.1 $230 confident flights to and from DFW will be full. Aberdeen, SD 1,374 1.9 $219 Waterloo, IA 1,342 1.8 $205 The size of the local market also makes it International Falls, MN 1,323 1.8 $226 Pellston, MI 1,209 1.7 $324 attractive for a carrier that is considering Sault Ste. Marie, MI 1,160 1.6 $243 service. Pierre, SD 1,065 1.5 $190 Muskegon, MI 936 1.3 $167 Eau Claire, WI 903 1.2 $201 Topeka was able to quickly leverage its previous Small Community Air Service Development Grant (SCASDG) award for service, with United announcing its Chicago flights less than a year after Topeka’s Grant was awarded. Topeka’s Grant also lowered the average fare paid by its catchment area passengers by 19%, meeting the main goal of the SCASDG Program, to provide fare relief. Service to and from Dallas/Ft. Worth should have the same positive impact on the community.

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 16

The Dallas/Ft. Worth hub MAP 4: CONNECTIVITY OVER DALLAS/FT. WORTH ON THE AMERICAN CODE would connect Topeka to 158 AS OF JANUARY 2021; SOURCE: VOLAIRE AVIATION, INC. cities, omni-directionally (refer to map 4), even taking into account current pandemic schedules at the DFW hub. The Topeka catchment area currently generates more than 845,000 passengers that could flow over Dallas/Ft. Worth to those cities, or an average of 1,159 passengers per day each way (PDEW). If the market is served with two daily 50-seat regional jet flights, the carrier providing service would need to capture just 14% of available passengers to achieve an 85% load factor. CHART 8: TOP 25 MARKETS OVER DFW ON AA CODE CY2019; SOURCE: VOLAIRE AVIATION, INC. As mentioned, in the local Dallas/Ft. Worth market, the Topeka catchment area generates an average of 19 PDEW (refer to chart 8). Dallas ranks as Topeka’s 19th largest origin and destination passenger market overall.

Uniquely among major airline hubs in proximity to Topeka, Dallas/Ft. Worth provides connectivity to both the east and west coast. Dallas service would be able to access passengers in the large Washington/Baltimore market, which generates an average of 86 PDEW, just as well as it would access passengers in the

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 17

Los Angeles market, which generates 80 PDEW (refer to chart 8 on the previous page). The wide breadth of connectivity should help ensure the service’s success and differs from previous Chicago service that only connected directionally to the east. CHART 9: FARE IN TOP MARKETS OVER DFW ON AA CY2019; SOURCE: VOLAIRE AVIATION, INC. The current Topeka catchment area average fare over Dallas/Ft. Worth is $191 one-way, including all passengers to all available destinations (refer to chart 9). Somewhat unusually, the highest fares are not found in the longest haul markets. For example, the New York/Newark fare is significantly higher than the Los Angeles fare.

Overall, Topeka catchment area passengers would benefit from fare relief with nonstop DFW flights. They would also have reduced expenses, which average $80 roundtrip, by avoiding the drive to Kansas City on the Kansas Turnpike tollway.

Service would also be good for the State of Kansas, and its capital. Data from the Airport’s leakage study showed that Kansas lost $245 million in airline ticket revenue to Missouri in 2019. Keeping that revenue from leaving the State is a focus of its leadership post-pandemic.

In preparation for this application, Topeka Regional Airport met with executives from both American Airlines and SkyWest Airlines, in person, in October. While neither American nor SkyWest could commit to serving the market, both stated the market would be high on their list of new options post-pandemic should the Airport be able to develop a revenue guarantee.

If the Airport is awarded a Small Community Air Service Development Grant by May of 2021 it would work to finalize a contract for new service with a carrier, including the details of its minimum revenue guarantee (MRG), by winter of 2021 (refer to chart 10 on the following page). It would hope to announce

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 18

new service in February of 2022, with service CHART 10: PROJECT TIMELINE launch in May of 2022, pending the trajectory SOURCE: TOPEKA REGIONAL AIRPORT of the pandemic. The goal would be to wrap- Task Targeted Date up the project after two years, by June of 2024, SCASD Grant Award May 2021 Finalized SCASD Grant Contract May 2021 assuming most potential travelers get Continue Meetings with Targeted Carriers Summer/Fall 2021 vaccinations in 2021. Negotiate Minimum Revenue Guarantee (MRG) Winter 2021 Development of Initial Advertising Winter 2021 Service Announcement February 2022 Collectively, businesses and governmental Advertising Launch February 2022 Service Launch May 2022 agencies in Topeka have pledged $300,000 in End of MRG Program May 2024 cash support for a minimum revenue guarantee SCASD Grant Closed June 2024 (MRG) for service between Topeka and Dallas/Ft. Worth, which is up from $200,000 in the last application filed by the Airport in 2019 (refer to chart 11). Additionally, the Airport has committed $50,000 in marketing cash to advertise and promote the new service. Beyond the matching cash in this application, Topeka Regional Airport will offer the carrier landing fee and terminal rent waivers for a period of one

CHART 11: FUNDING SOURCES year. The value of these in-kind contributions is undetermined and will SOURCE: TOPEKA AIRPORT depend on the size of aircraft used for the service and the amount of terminal Funding Source Amount space the airline requires. Local Contributors $300,000 Airport $50,000 SCASD Grant Award $800,000 The Airport and its community partners seek a federal Small Community Total $1,150,000 Air Service Development Grant of $800,000 to enhance the minimum revenue guarantee (MRG) for service to Dallas/Ft. Worth (refer to charts 11 and 12). The grant will allow the Airport to offer a total MRG of $1.1 million for new service. This amount is believed to be sufficient to cover a potential loss in the start-up phase of service as we exit the pandemic. The total project amount is $1.15 million. The vast majority of funding, 96%, will support CHART 12: FUNDING PLAN the minimum revenue guarantee (MRG). The Airport’s SOURCE: TOPEKA REGIONAL AIRPORT contribution will support the marketing effort. Funding Use Amount Minimum Revenue Guarantee (MRG) $1,100,000 Marketing and Advertising $50,000 While the main target of service in this application is service to Landing Fee Waivers TBA Dallas/Ft. Worth, with broad connectivity, Topeka Regional Total $1,150,000 Airport is prepared to shift the focus should that service be found to be unattainable. The alternate project would be to connect to a hub to the south and/or west of the market that could provide similar connectivity. Hubs in Houston and Denver would be strong alternate choices.

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 19

PUBLIC/PRIVATE PARTNERSHIP

Topeka Regional Airport works with multiple community partners on support for air service development and expansion. It has continued to keep contact with these partners throughout the pandemic. The Airport counts upon its partners to develop support and funding for the recruitment of airline service. Many in the community realize the value of scheduled air service in growing the local economy and in supporting the capital of the State of Kansas.

GREATER TOPEKA AREA CHAMBER OF COMMERCE

The Greater Topeka Chamber of Commerce has the mission of working to get the things done that a company cannot do alone. A Chamber membership is seen as an investment in both a company's and the community's future. The membership of the Greater Topeka Chamber of Commerce represents the entire community with members from business and industry, private associations, civic organizations, home based businesses, social service agencies, education, government, and individuals. Over 1,200 member firms, representing over 1,900 individuals, are Chamber members, joining in their support of Topeka Regional Airport.

Dozens of local businesses will work with the Chamber to support the push to bring air service to eastern Kansas. These businesses will not only pledge to use new service at Topeka Regional Airport, but also work to make sure the air service marketing message is spread throughout the community.

As the State’s capital, the City of Topeka is glad to have the opportunity to partner with the Greater Topeka Chamber of Commerce and Topeka Regional Airport to bring air service to the City. Community leaders support the effort to bring sustainable network carrier service to the region.

A three-person board oversees the operation of Shawnee County, the home of the City of Topeka and Topeka Regional Airport. The Commission is publicly elected, and in charge of a multi-million-dollar annual budget. The Commission has a current emphasis on economic development and, as such, supports the effort to bring air service back to Topeka Regional Airport, as it supports the efforts of the Greater Topeka Chamber of Commerce.

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 20

CONCLUSION

The end of the pandemic will represent a unique opportunity for Topeka Regional Airport. Air service in the region will be re-distributed. Kansas City will not regain all of the seats and nonstop destinations it had in 2019. With air service less convenient at Kansas City, more passengers will be interested in using Topeka. This Grant is the key to securing service.

Before the pandemic, the Topeka market generated almost 1,600 passengers per day each way (PDEW) despite an average fare near $200 each way. The fundamentals of the market are strong. While demand has been suppressed by the pandemic, once vaccination is widespread, Topeka’s passengers will be traveling again.

American-coded flights to Dallas/Ft. Worth are considered to be the ideal service for Topeka. The market is the third-largest in its region without any DFW nonstop. Connections over Dallas on the American code also access 75% of the Topeka catchment area’s 1.1 million “Kansas City will not regain all annual passengers. Topeka Regional Airport would need to of the seats and nonstop capture less than 15% of its market to entirely fill all DFW destinations it had in 2019. flights once the pandemic subsides. With air service less convenient at Kansas City, more Topeka did win service under a previous Small Community passengers will be interested in Air Service Development Grant. That Grant achieved its goal using Topeka. This Grant is of lowering fares. And unlike the Airport’s previous Grant, the key to securing service.” the matching funding for this proposal comes from a large collection of businesses instead of a block grant from the state. This should ensure the very people who are providing funding will use the service.

Topeka’s Airport continues its hard work, even in the midst of the pandemic to develop local air service. It has met with both targeted carriers in this application, American Airlines and SkyWest Airlines, in person in the last few months. It believes either American or SkyWest would be an excellent partner with service using the American code. The community and the Airport have committed $350,000 to this project. The Airport seeks a $800,000 Small Community Air Service Development Grant match to bring total risk mitigation to $1.15 million for daily scheduled service.

PROPOSAL OF METROPOLITAN TOPEKA AIRPORT AUTHORITY ▪ TOPEKA, KANSAS ▪ PAGE 21