National Academies Press: OpenBook
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2020. Building and Maintaining Air Service Through Incentive Programs. Washington, DC: The National Academies Press. doi: 10.17226/25758.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2020. Building and Maintaining Air Service Through Incentive Programs. Washington, DC: The National Academies Press. doi: 10.17226/25758.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2020. Building and Maintaining Air Service Through Incentive Programs. Washington, DC: The National Academies Press. doi: 10.17226/25758.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2020. Building and Maintaining Air Service Through Incentive Programs. Washington, DC: The National Academies Press. doi: 10.17226/25758.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2020. Building and Maintaining Air Service Through Incentive Programs. Washington, DC: The National Academies Press. doi: 10.17226/25758.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2020. Building and Maintaining Air Service Through Incentive Programs. Washington, DC: The National Academies Press. doi: 10.17226/25758.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2020. Building and Maintaining Air Service Through Incentive Programs. Washington, DC: The National Academies Press. doi: 10.17226/25758.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2020. Building and Maintaining Air Service Through Incentive Programs. Washington, DC: The National Academies Press. doi: 10.17226/25758.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

A I R P O R T C O O P E R A T I V E R E S E A R C H P R O G R A M ACRP RESEARCH REPORT 218 2020 Research sponsored by the Federal Aviation Administration Subscriber Categories Aviation • Economics • Planning and Forecasting Building and Maintaining Air Service Through Incentive Programs David Ballard David Weingart GRA, IncoRpoRAted Jenkintown, PA w i t h Laurie Garrow Jordan Herring AtlAntA AnAlytIcs, llc Atlanta, GA a n d Russell W. Mills Will Burns Justin M. Rex Michael Caniglia centeR foR ReGIonAl development BowlInG GReen stAte UnIveRsIty Bowling Green, OH

AIRPORT COOPERATIVE RESEARCH PROGRAM Airports are vital national resources. They serve a key role in trans- portation of people and goods and in regional, national, and interna- tional commerce. They are where the nation’s aviation system connects with other modes of transportation and where federal responsibility for managing and regulating air traffic operations intersects with the role of state and local governments that own and operate most airports. Research is necessary to solve common operating problems, to adapt appropriate new technologies from other industries, and to introduce innovations into the airport industry. The Airport Cooperative Research Program (ACRP) serves as one of the principal means by which the airport industry can develop innovative near-term solutions to meet demands placed on it. The need for ACRP was identified in TRB Special Report 272: Airport Research Needs: Cooperative Solutions in 2003, based on a study spon- sored by the Federal Aviation Administration (FAA). ACRP carries out applied research on problems that are shared by airport operating agen- cies and not being adequately addressed by existing federal research programs. ACRP is modeled after the successful National Cooperative Highway Research Program (NCHRP) and Transit Cooperative Research Program (TCRP). ACRP undertakes research and other technical activi- ties in various airport subject areas, including design, construction, legal, maintenance, operations, safety, policy, planning, human resources, and administration. ACRP provides a forum where airport operators can cooperatively address common operational problems. ACRP was authorized in December 2003 as part of the Vision 100— Century of Aviation Reauthorization Act. The primary participants in the ACRP are (1) an independent governing board, the ACRP Oversight Committee (AOC), appointed by the Secretary of the U.S. Department of Transportation with representation from airport operating agencies, other stakeholders, and relevant industry organizations such as the Airports Council International-North America (ACI-NA), the American Associa- tion of Airport Executives (AAAE), the National Association of State Aviation Officials (NASAO), Airlines for America (A4A), and the Airport Consultants Council (ACC) as vital links to the airport community; (2) TRB as program manager and secretariat for the governing board; and (3) the FAA as program sponsor. In October 2005, the FAA executed a contract with the National Academy of Sciences formally initiating the program. ACRP benefits from the cooperation and participation of airport professionals, air carriers, shippers, state and local government officials, equipment and service suppliers, other airport users, and research organi- zations. Each of these participants has different interests and responsibili- ties, and each is an integral part of this cooperative research effort. Research problem statements for ACRP are solicited periodically but may be submitted to TRB by anyone at any time. It is the responsibility of the AOC to formulate the research program by identifying the highest priority projects and defining funding levels and expected products. Once selected, each ACRP project is assigned to an expert panel appointed by TRB. Panels include experienced practitioners and research specialists; heavy emphasis is placed on including airport professionals, the intended users of the research products. The panels prepare project statements (requests for proposals), select contractors, and provide technical guidance and counsel throughout the life of the project. The process for developing research problem statements and selecting research agencies has been used by TRB in managing coop- erative research programs since 1962. As in other TRB activities, ACRP project panels serve voluntarily without compensation. Primary emphasis is placed on disseminating ACRP results to the intended users of the research: airport operating agencies, service pro- viders, and academic institutions. ACRP produces a series of research reports for use by airport operators, local agencies, the FAA, and other interested parties; industry associations may arrange for workshops, training aids, field visits, webinars, and other activities to ensure that results are implemented by airport industry practitioners. ACRP RESEARCH REPORT 218 Project 03-44 ISSN 2572-3731 (Print) ISSN 2572-374X (Online) ISBN 978-0-309-48120-5 Library of Congress Control Number 2020933108 © 2020 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FRA, FTA, Office of the Assistant Secretary for Research and Technology, PHMSA, or TDC endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The research report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the National Academies of Sciences, Engineering, and Medicine. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the Airport Cooperative Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report. Published research reports of the AIRPORT COOPERATIVE RESEARCH PROGRAM are available from Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet by going to http://www.national-academies.org and then searching for TRB Printed in the United States of America

The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, non- governmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president. The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. John L. Anderson is president. The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The National Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.national-academies.org. The Transportation Research Board is one of seven major programs of the National Academies of Sciences, Engineering, and Medicine. The mission of the Transportation Research Board is to provide leadership in transportation improvements and innovation through trusted, timely, impartial, and evidence-based information exchange, research, and advice regarding all modes of transportation. The Board’s varied activities annually engage about 8,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. Learn more about the Transportation Research Board at www.TRB.org.

C O O P E R A T I V E R E S E A R C H P R O G R A M S CRP STAFF FOR ACRP RESEARCH REPORT 218 Christopher J. Hedges, Director, Cooperative Research Programs Lori L. Sundstrom, Deputy Director, Cooperative Research Programs Marci A. Greenberger, Manager, Airport Cooperative Research Programs Joseph D. Navarrete, Senior Program Officer Hana Vagnerova, Senior Program Assistant Eileen P. Delaney, Director of Publications Natalie Barnes, Associate Director of Publications Kami Cabral, Editor ACRP PROJECT 03-44 PANEL Field of Policy and Planning Pamela J. Hinman, Eastern Iowa Airport, Cedar Rapids, IA (Chair) Patrick Dooley, Greater Fort Wayne, Inc., Fort Wayne, IN Mark B. Gibbs, Lake Tahoe Airport, South Lake Tahoe, CA Barbara Halverstadt, Jacksonville International Airport, Jacksonville, FL Kevin Schorr, Campbell-Hill Aviation Group, LLC, Alexandria, VA Timothy K. Skipworth, American Airlines, Inc., Fort Worth, TX Miguel Vasconcelos, FAA Liaison Tom Devine, Airports Council International–North America Liaison Mark Holding Raggio, U.S. Department of Transportation Liaison Christine Gerencher, TRB Liaison

ACRP Research Report 218: Building and Maintaining Air Service Through Incentive Programs (herein after referred as the Guidebook) offers advice for using incentive pro- grams for growing and maintaining commercial air service. The development, execution, and monitoring of air service incentive programs can be complex, involve multiple stake- holders, and must address federal compliance issues. The Guidebook will help airports and communities gain a better understanding of the opportunities and limitations of air service incentive programs, assess potential benefits and risks, and develop a program that addresses their unique goals. Airports and the communities they serve view robust air service as an important element for economic well-being and overall quality of life. Incentive programs are often used to encourage airlines to maintain or augment service to a community. Recent airline industry trends, including airline consolidation, use of larger aircraft, the rise of ultra-low-cost air- lines, and challenges with pilot supply as well as regulatory and policy developments, have affected the significance of these programs. Research was needed to objectively evaluate patterns in the use of air service incentive programs and to provide advice for airports and communities considering their use. The research, led by a team from GRA, Incorporated, began with a review of recent trends in air service, incentives, regulations, and policies. Next, the team developed a comprehen- sive database of airports, incentives, air service levels, and regional economic activity. The database was used to conduct statistical analyses to identify correlations between the use of incentives and changes to air service and a region’s economy. The research also used case studies featuring a cross section of airport and community sizes, incentives [e.g., fee or rent waivers, baggage handling services, marketing assistance, minimum revenue guarantees (MRGs), and travel banks], incentive sponsorship strategies (airport-led, community-led, or partnerships), airline types (legacy or low-cost), and types of air service (domestic or international). To ensure a balance of perspectives, the research team obtained input from airport management, tourism and visitor bureaus, chambers of commerce, economic devel- opment officials, metropolitan planning organizations, business owners, airline route plan- ners, and air service consultants. Based on the results of this research, the team developed the advice contained in this Guidebook. The Guidebook begins with an overview of common air service incentives offered by airports and communities. It then summarizes how incentive programs have affected air service and economic activity. Because the FAA and airlines are closely involved in incentive programs, the Guidebook features a discussion of FAA compliance issues in a question and answer (Q&A) format and a summary of how airlines view incentives. F O R E W O R D By Joseph D. Navarrete Staff Officer Transportation Research Board

The Guidebook concludes with a valuable “lessons learned” section to help airports and communities decide if incentives might be appropriate, and, if so, which ones might be most effective. The accompanying Contractor’s Final Technical Report, available on the TRB website (www.trb.org) by searching for “ACRP Research Report 218,” provides detailed findings from the research, including the statistical analyses and the perspectives offered by the stakeholders contacted during the case studies. A geographic information system (GIS) database tool, available at https://arcg.is/vKmyr, is an interactive map based on the airport database previously described. Users can display the use of specific types of incentives by airport and select individual airports to display a callout box summarizing airport and community characteristics along with the types of incentive that have been used.

1 Chapter 1 Introduction 1 Background 2 Summary of Current and Emerging Trends Influencing Air Service in the United States 4 Chapter 2 Air Service Incentives and Their Use 4 Types of Air Service Incentives 6 How Are Air Service Incentives Used and What Kinds of Airports Are Using Them? 15 Case Studies of Airports, Communities, and Air Service Incentive Programs 19 FAA Role and Perspectives Regarding Air Service Incentives 26 Airline Perspectives on Airports and Air Service Incentives 31 How Do Air Service Incentives Affect Airport Activity and Regional Economies? 38 Chapter 3 Lessons Learned 41 Acronyms and Glossary 43 Bibliography C O N T E N T S Note: Photographs, figures, and tables in this report may have been converted from color to grayscale for printing. The electronic version of the report (posted on the web at www.trb.org) retains the color versions.

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Airports and the communities they serve view robust air service as an important element for economic well-being and overall quality of life. Incentive programs are often used to encourage airlines to maintain or augment service to a community. Recent airline industry trends, including airline consolidation, use of larger aircraft, the rise of ultra-low-cost airlines, and challenges with pilot supply as well as regulatory and policy developments, have affected the significance of these programs.

The TRB Airport Cooperative Research Program's ACRP Research Report 218: Building and Maintaining Air Service Through Incentive Programs is a guidebook offering advice for using incentive programs for growing and maintaining commercial air service. The development, execution, and monitoring of air service incentive programs can be complex, involve multiple stakeholders, and must address federal compliance issues.

An additional resource accompanying the report is Building and Maintaining Air Service Through Incentive Programs:Contractor’s Final Technical Report.

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