summary information1

APPENDIX B

APPLICATION UNDER

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT-OST-2020-0231

SUMMARY INFORMATION1

All applicants must submit this Summary Information schedule, as the application coversheet, a completed standard form SF424 and the full application proposal on

www.grants.gov.

For your preparation convenience, this Summary Information schedule is located at https://www.transportation.gov/policy/aviation-policy/small-community-rural-air-

service/SCASDP 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:

Name of Signatory Party for Legal

Sponsor:

DUNS Number:

EIN/Tax ID:

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

1.____________________________________________________

2.____________________________________________________

3.____________________________________________________

4.____________________________________________________

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. 2.

1 Note that the Summary Information does not count against the 20-page limit of the SCASDP application.

Lea County Government

Michael Gallagher

010485308

Lea County Regional Airport (HOB)

Lea County Government

FlyHobbs

Economic Development Corporation of Lea County (501c6)

http://www.grants.gov/

https://www.transportation.gov/policy/aviation-policy/small-community-rural-air-service/SCASDP

https://www.transportation.gov/policy/aviation-policy/small-community-rural-air-service/SCASDP

APPENDIX B

3. 4.

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

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

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

intends to apply for a certificate or whether an application under Part 139 is pending.)

YES NO

_________________________________________________________________________

_________________________________________________________________________

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

1. Large hub airport: ________________________________________________

2. Medium hub airport:_______________________________________________

3. Small hub airport:__________________________________________________

4. Airport with jet service:______________________________________________

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. 2.

3. 4.

5- Lea County Regional Airport has jet service

402 miles to DFW Airport

322 miles to Albuquerque International Sunport

02

93 miles to Midland International Airport

APPENDIX B

F. APPLICANT INFORMATION: (CHECK ALL THAT APPLY)

Not a Consortium Interstate Consortium Intrastate Consortium

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

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):_______________________________; and, the text of the grant agreement section(s) setting forth the scope of the grant project: _________________________________________________________________________ _________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

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

PUBLIC PRIVATE

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.

H. PROJECT PROPOSAL:

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

Launch New Carrier Secure Additional Service Upgrade Aircraft

First Service New Route Service Restoration

Regional Service Surface Transportation Professional Services2

2 “Professional Services” involve a community contracting with a firm to produce a product such as a marketing plan, study, air carrier proposal, etc.

Lea County of Government

City of Hobbs

Economic Development Corp. of Lea County

N/A - Lea County Regional Airport has not previously received a SCASDP grant.

APPENDIX B

Other (explain below)

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.”)

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

1c. GRANT HISTORY:

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

CONSORTIUM (FOR EXAMPLE, A SPECIFIC DESTINATION AIRPORT)?

YES NO

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

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

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

YES NO

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

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

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

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

Revenue guarantee to restore United Airlines service between Lea County Regional Airport (HOB)

launch in Q2 of 2022, route self-sufficiency is expected within the three year granting period.

and Denver International Airport (DEN), suspended due to COVID-19. With an anticipated

APPENDIX B

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

PLEASE CONTACT THE DEPARTMENT.

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

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

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

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

Revenue Guarantee: an agreement with an air service provider setting forth a minimum

guaranteed profit margin, a portion of which is eligible for reimbursement by the

community

Recruitment of U.S. Air Carrier: air service development activities to recruit new air

service, including expenses for airport marketers to meet with air service providers to make

the case for new air service

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

counted as in-kind contributions only

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

wing) services provided by third party ground handlers

Travel Bank: travel pledges, or deposited monetary funds, from participating parties for

the purchase of air travel on a U.S. air carrier, with defined procedures for the subsequent

use of the pledges or the deposited funds; counted as in-kind contributions only

Other (explain below)

______________________________________________________________________________

______________________________________________________________________________

I. EXISTING LANDING AIDS AT LOCAL AIRPORT:

Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

Free vehicle parking and advertising on community owned media and electronicbillboards.

APPENDIX B

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

2 State cash financial contribution

Local cash financial contribution

3a Airport cash funds

3b Non-airport cash funds

3 Total local cash funds (3a + 3b)

4 TOTAL CASH FUNDING (1+2+3)

In-Kind contribution

5a Airport In-Kind contribution**

5b Other In-Kind contribution**

5 TOTAL IN-KIND CONTRIBUTION

(5a + 5b)

6 TOTAL PROJECT COST (4+5)

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.

$900,000

$120,741

$900,000

$21,600

$1,800,000

$800,000$100,000

$142,341

$1,942,341

$15,441 over three years; Community digital marketing & billboards @ $7,200 annually or $21,600 over three years.

HOB Parking Fee Waiver @ $35,100 annually or $105,300 over three years; HOB Landing Fee waiver @ $5,147 annually or

APPENDIX B

L. Is This Application Subject To Review By an Affected State Under Executive Order 12372

Process?

a. This application was made available to the State under the Executive Order 12372

Process for review on (date) _____________.

b. Program is subject to E.O. 12372, but has not been selected by the State for review.

c. Program is not covered by E.O. 12372.

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

Provide Explanation)

No Yes (explain)

______________________________________________________________________________

______________________________________________________________________________

Lea County Regional Airport Hobbs, New Mexico Restoring Service, Reviving Community Proposal to the Small Community Air Service Development Grant Program (DOT-OST-2020-0231)

Lea County Regional Airport (DOT-OST-2020-0231) 2

Table of Contents Executive Summary 3 I. Eligibility 3 II. Regional Map/Catchment Area 4 III. Background 4 IV. Priority and Secondary Selection Criteria 6 IV.A. Primary Criteria 6 IV.B. Secondary Criteria 9 V. Description of the Air Service Needs and Deficiencies 12 (1) Markets not served or underserved 13 (2) Driving distance to nearest airports 13 (3) Relevant fare levels 14 (4) Adverse air service developments (10 years) 14 (5) Service development efforts (3 years) 14 VI. Strategic Plan for Meeting Needs 15 (1) Goals and objectives 15 (2) Timeline 15 (3) Self-sufficiency 17 (4) List of airports considered in market 18 VII. Marketing and Promotion Plan 19 VIII. Funding Necessary for Project Implementation 19 IX. Difference from Previous Projects 20 X. Designation of a Legal Sponsor 20 XI. Ten Year Same Project Limitation (if applicable) 20 XII. Motion for Confidential Treatment (if applicable) 20

Tables, Figures, and Charts Table 1: Summary of Applicant/Project Eligibility 3 Table 2: Project Cost Categories and Contribution Types (3 Yr Period) 7 Table 3: High HOB Historical Average Fares and Comparison 8 Table 4: List of Project Support Letter Signatories 9 Table 5: New Mexico SCASDP Grants 10 Table 6: Summary of Alignment with SCASDP Criteria 11 Table 7: Area Airport Distances and Characteristics 14 Table 8: Project Cost Sources and Contribution (3-Yr Period) 20 Figure 1: Location of Airport and Applicant County 4 Figure 2: United Airlines DEN and IAH Hubs and Connecting Airports 13 Figure 3: Project Primary Goal and Objectives 15 Chart 1: Median Household Income 18


Executive Summary The Economic Development Corporation of Lea County (EDCLC), New Mexico, is requesting a three-year $800,000 Small Community Air Service Development Program (SCASDP) grant on behalf of Lea County Regional Airport (HOB). Funds will serve as a minimum revenue guarantee to support the restoration of United Airlines passenger air service from Lea County Regional Airport (HOB) to Denver International Airport (DEN). This application is submitted in partnership with the FlyHobbs Airline Committee, a regional public/private marketing and outreach initiative supporting HOB.

Initially established in October 2019, the launch of this long-needed HOB-DEN service was immediately meaningful to our community. After a highly successful first four months of operation, the route was terminated/suspended on April 7, 2020 due to the COVID-19 pandemic. Many uncertainties remain for the air travel industry going forward, however, DEN has been one of the most resilient and rapidly recovering hubs in the United Airlines network1 and timely restoration of service is critical to address Lea County’s air service needs and deficiencies. Restoring Service, Reviving Community is an eligible post-COVID service restoration project with strong public and private support and matching local funding. The support of a SCASDP grant will increase mobility and connectivity in Lea County with a sustainable, high-quality, and responsive service to northern and western markets. I. Eligibility As summarized in Table 1 and detailed below, this project meets all eligibility criteria. Lea County Government is the government entity legal sponsor. HOB is eligible as a commercial Non-hub airport as determined by the FAA’s most recently published classification2, with 0.003% percent of total U.S. enplanements. HOB does not currently receive subsidized air services from Essential Air Service (“EAS”) or Alternate Essential Air Service (“AEAS”) and is not currently a SCASDP grantee nor have we previously received a SCASDP grant. Restoring Service, Reviving Community is also eligible as a project, with the

1 “Message from CEO Kim Day - Denver International Airport Recovering Stronger Than Most U.S. Airports: Denver International Airport.” Denver International Airport. Access at: http://bit.ly/DENsurge. 2 “National Plan of Integrated Airport Systems (NPIAS) - Current.” National Plan of Integrated Airport Systems (NPIAS) - Current – Airports, October 7, 2020. https://www.faa.gov/airports/planning_capacity/npias/current/.

Table 1: Summary of Applicant/Project Eligibility Factor Meets? Detail

Public Applicant P Legal Sponsor: Lea County Project Assistance P Subsidized service request Hub Size P Non-hub Same Project Limitation P No prior grants Concurrent Grants P No prior grants Capital Improvement P Not a capital project Essential Air Service P Not EAS or AEAS


purpose being to subsidize service to and from an underserved airport for a period not to exceed 3 years, including improving air service through marketing and promotion. II. Regional Map/Catchment Area Lea County Regional Airport (HOB) is located in Hobbs, New Mexico, serving the City of Hobbs and Lea County, as well as surrounding areas. The HOB catchment area includes a population base of 129,974 people within a 60-mile radius. However, for Hobbs, residential usage is only one factor, with a large percentage of airport travelers generated through inbound travelers, primarily in the energy sector. See Figure 1 for map. III. Background Lea County is located in the southeastern corner of New Mexico, within the Permian Basin region bordering Texas, with a population of nearly 70,000. The largest community in the county is Hobbs City, which was founded in 1907. After the discovery of oil and natural gas in 1928, Hobbs rapidly grew to be the seventh largest city in the state, but it remains a closely knit, hardworking community, rich in traditional southwestern culture. Hobbs has a unique historical character, with many of its buildings dating to the early boomtown era, while Lea County is home to more professional rodeo world champions than any other place in the nation. The oil industry continues to play a central role in the regional economy. In January of 2019, Lea County was the top oil producing county within New Mexico and the second largest oil producing county in the United States.3

Known as the “EnergyPlex,” the county is home to multiple forms of energy production. Lea County and the surrounding region has become a leader in many nuclear related facilities over the last 10 years. We are home to the nation’s only operating commercial uranium enrichment facility, URENCO USA located near Eunice, NM. Lea County Regional Airport (HOB) is also the closest commercial airport to the nation’s only permanent nuclear storage facility, the Waste Isolation Pilot Plant (WIPP) located just 39 miles west. The area known as the southeastern New Mexico nuclear corridor also includes the Waste Control Specialists low-level waste disposal facility just over the border near Andrews, Texas, and the International Isotopes, Inc. facility to be built near Eunice, New Mexico. Numerous solar and wind projects have also been constructed and many others in the planning and construction stages including the Tip Top

3 “Associated Press News,” https://apnews.com/article/db2fbf3b14154ed19d2fca92b0255b44.

Figure 1: Location of Airport and Applicant

County


Solar farm set to produce up to 220 megawatts of energy. In addition, Intrepid Potash, Inc., headquartered in Denver, CO, has three large mines located within 36 miles of HOB.

Lea County Regional Airport (HOB) has evolved with the community. HOB opened as a commercial airport on July 23, 1937, with Continental Airlines delivering air mail in 1940. Continental served HOB until 1963, when it was replaced by Tran-Texas Airlines then by Trans Central Airlines until 1970. From 1970 to 2011, Lea County Regional Airport was served by various small carriers including Mesa Airlines and New Mexico Airlines. When New Mexico Airlines ceased service, the newly formed FlyHobbs air service support group began commercial air services in 2011 with a contract with Continental Airlines, now United Airlines, to begin daily regional jet service to George Bush Intercontinental Airport (IAH) in Houston.

With our strong energy sector, Houston was a natural fit as a starting point for regional air service. Even through an oil downcycle in 2014, FlyHobbs continued to support the service without a disruption in air service, with two daily round trips to Houston Intercontinental Airport. High load factors were experienced with the Houston service; in February 2020, the Houston (IAH)-HOB route operated at its highest February load factor ever of 77%. In the third quarter of 2019, this route was the third-most profitable spoke out of 105 destinations served from United Airlines’ IAH hub as measured by stage-length adjusted total revenue per available seat mile. In 2019 alone, over 54,000 passengers utilized the service.

With load factors so high, United was running out of inventory and additional flights from HOB were analyzed by both FlyHobbs and United Airlines. Instead of adding a third flight to Houston, United suggested route to their primary hub in Denver. With the continued development in drilling technologies and additional oil centers that have opened in northern portions of North America including Colorado, Wyoming, North Dakota, and Canada, northern and western destinations, Denver was confirmed as a natural next step to expanding air service in the region.

Subsidized by the EDCLC, Lea County, the City of Hobbs, and offset by the high-performance revenues of the HOB-IAH service, daily service from HOB to DEN began in November of 2019. The service included one departure per day (except Sunday) on a United/SkyWest 50-seat CRJ200. Our expectation was that the Denver service would be self-supporting by June of 2022. With over 5,000 passengers enplaned, 36% of which originated in Denver, and 35% of which came from 48 other connecting markets, the initial performance of the route indicated that we were well on our way towards achieving that goal, prior to the suspension of services due to COVID-19.

Similar to airports across the country, HOB and United were forced to reduce services. The Permian region faced a double shock to the economy due to oil prices dipping into negative territory as the Covid-19 crisis temporarily reduced petroleum use. However, oil and gas production in the Permian region has recovered to pre-pandemic levels and is considered essential and employees are categorized as essential workers. As a resource and region-specific industry, energy sector travel to and from Hobbs remained a priority and reduction of services


did not reduce demand. Despite our small size, together with our committed partners we were successful in our extraordinary efforts to continue services even through the worst months of the pandemic and have emerged in relative health and ready to recover and resume our growth trajectory.

A SCASDP grant will leverage existing financial, stakeholder, and landscape assets such as broad community support; a new state strategic aviation marketing plan and stimulus funding; and the rapid recovery of the DEN hub, to restore this service by Q2 of 2022.

IV. Priority and Secondary Selection Criteria IV.A. Primary Criteria: The Restoring Service, Reviving Community proposed project meets the following primary priority selection criteria (“PC”).

The assistance will be used to help restore scheduled passenger air service that has been terminated/The assistance will be used to help restore scheduled passenger air service that has been reduced or suspended as a result of the 2020 Coronavirus pandemic. SCASDP funds will be used as a revenue guarantee to restore United Airlines scheduled passenger air service from HOB to DEN, which was terminated/suspended on April 7, 2020 (see United Airlines Letter of Support, Appendix 1, for evidence of suspension attributed to coronavirus pandemic-related factors).

The community or consortium has established or will establish a public-private partnership to facilitate air carrier service to the public. The EDCLC is a private, non-profit organization dedicated to recruiting new, quality businesses to Lea County and assisting with the retention and expansion of existing industry. The EDCLC focuses our resources on business attraction, retention and expansion, government relations, and leadership development. These efforts are supported through contributions from our members, consisting of local and regional private businesses as well as public agencies, Lea County, and the City of Hobbs. FlyHobbs is a successful public/private partnership supporting HOB, and includes Lea County, the City of Hobbs, the EDCLC, and United Airlines. This highly active group meets regularly to analyze and optimize flight schedules, provide marketing and community outreach related to air service.

The community or consortium will provide a portion of the cost of the activity from local sources other than airport revenue sources. With a total project budget of $1,942,341, we are requesting an $800,000 SCASDP grant as a revenue guarantee to be matched with $900,000 coming from local community sources (see Tables 2 and 8). These funds will be supported by additional in-kind incentives, with a value of $142,341. An additional $100,000 will be contributed from state funds, to support related

PC

PC

PC


marketing activities to ensure a successful and sustainable restoration of services to the United Airlines hub at DEN.

Table 2: Project Cost Categories and Contribution Types (3 Yr Period)

Type Federal State

Government Local

Government In Kind

Source DOT SCASDP NMDOT Lea County,

City of Hobbs Airport,

Community Revenue Guarantee $800,000 $800,000 Marketing $100,000 $100,000 $21,600 Incentives (free vehicle parking, landing fees waived) $120,741

Subtotals $800,000 $100,000 $900,000 $142,341

Total Project Budget $1,942,341

The assistance will provide material benefits to a broad segment of the traveling public, including businesses, educational institutions, and other enterprises, whose access to the national air transportation system is limited. The New Mexico Department of Transportation Aviation Division partnered with the University of Arizona to analyze FlyHobbs’ economic impact to the region in 2014. With 17,000 enplanements, FlyHobbs was bringing $19 million to the region. With the extraordinary growth of enplanements over the last five years, we estimate that impact today at $25 million. Restoring HOB’s service to the DEN hub— and our only direct access northern and western markets— is critical to our development strategy and will bring material benefits to our growing community and industries.

As Lea County became part of the nation’s top energy center, massive growth has occurred in the area, bringing new development needs. These needs were identified through a consortium of local government and private entities and articulated in county-wide a quality-of-life initiative that prioritized: 1) Improvement of medical services; 2) A more accessible and connected transportation network; 3) Increased access to the two colleges/universities located in Hobbs; and 4) Economic diversification. While our unemployment rate has been impacted by COVID, going from 4% in February of 2020 to 11% today, a large portion of Lea County’s labor forces come from out of state. This is primarily to fill energy sector jobs, but also education and medical sector jobs in our communities. Both of

PC

Lea County is the top oil producing county within New Mexico and sits in largest oil- producing basin in the world, driving economic growth and travel demand.


these sectors are growing. Noting that nearly 50% of Lea County residents were traveling outside the county for medical services4, Covenant Health is launching a new facility in Hobbs. However, staffing that hospital will require recruiting medical personnel from outside the community and the state. Further, New Mexico has a significant teacher shortage, especially in rural and the southern regions of the state5, and is actively recruiting qualified teachers, making ease of travel key to achieving all of our identified development priorities.

Notably, as the Permian area energy development has boomed, there has been significant stress on the local road system, which was not designed for the heavy commercial and increased residential traffic we are seen. This has resulted in significant risk of traffic accidents and fatalities, so much so that New Mexico and Texas locals have dubbed Highway 285, our major north-south highway in the region, the “Death Highway.”6 With the second highest accident fatality rate in the state (tied with McKinley County in southeast) long hours on Lea County’s roadways is increasingly a public safety issue that makes travel by road to and from alternate airports riskier.

Air fares are higher than the national average air fares for all communities (pre-COVID). HOB airfares have been historically higher than the national average airfare. According to the Bureau of Transportation Statistics (BTS), the average U.S. domestic air fare reached its lowest fare average in the third quarter of 2020 at $245, but HOB fares were nearly double at $407. Table 3 shows HOB average fares, by year, in comparison with national levels and other airports in the region.

Table 3: High HOB Historical Average Fares and Comparison7

4 “Covenant to Buy Lea Regional, Still Plans New Hospital Building,” Hobbs News Sun, September 10, 2020, https://www.hobbsnews.com/2020/09/10/covenant-to-buy-lea-regional-still-plans-new-hospital-building/. 5 Sylvia Ulloa, “New Mexico Teacher Shortage Deeper, More Complex than Vacancies Suggest,” News (Las Cruces Sun-News, February 7, 2020), https://www.lcsun-news.com/story/news/local/new-mexico/2020/02/07/new-mexico-teacher-shortage-deeper-more-complex-than-vacancies-suggest/4680103002/. 6 April Reese, “Death Highway: A Massive Oil Boom in the Permian Basin Has Turned Rural Roads into Deadly Highways,” The NM Political Report, July 1, 2019, https://nmpoliticalreport.com/2019/07/01/death-highway-a-massive-oil-boom-in-the-permian-basin-has-turned-rural-roads-into-deadly-highways/#:~:text=Locals%20have%20a%20new%20name,%2Drelated)%20the%20year%20before. 7 US Department of Transportation, Bureau of Transportation Statistics, Average Domestic Airline Itinerary Fares. https://www.transtats.bts.gov/AverageFare/.

PC


The assistance will be used in a timely manner. The EDCLC, Fly Hobbs, Lea County Regional Airport, and United Airlines have already demonstrated the ability to partner and launch a successful Denver service within a reasonable timetable. Denver has been United’s strongest hub with Houston a near second in terms of hub recovery. Acknowledging that the COVID-19 pandemic continues to present uncertainties, we anticipate HOB-DEN service restoration in Q2, 2022, with self-sufficiency established within the three-year granting period.

IV.B. Secondary Criteria: The Restoring Service, Reviving Community proposed project meets the following secondary review criteria (“SC”).

Whether the proposed project has broad community support. There is broad community support for the HOB-DEN service, from the County level, to local municipalities, residents, and diverse business groups across industries. This support has translated into our extraordinary enplanement growth rate. Additional evidence of our community support can be seen in the letters of support included in this application from diverse sectors including hospitals, banks, energy industry partners, local, county, and state representatives. Letters of Support can be found in Appendix 1, a list of signatories supporting our proposed project is below, in Table 4:

Table 4: List of Project Support Letter Signatories Signatory Agency Title Daniel Malinowski United Airlines Managing Director, Domestic

Network Planning The Honorable Martin Heinrich, The Honorable Ben Ray Lujan, and the Honorable Teresa Leger Fernandez

Congress of the United States, Delegation Office, New Mexico

United States Senator, New Mexico United States Representative, District 3, New Mexico

The Honorable Yvette Herrell U.S. Congress United States Representative, District 2, New Mexico

Michael Gallagher, II Lea County Government County Manager Jennifer Grassham EDC of Lea County President & CEO Sam D. Cobb City of Hobbs Mayor Bill Belcher Zia Park Casino and Hotel, VP & General Manager Missi Currier Strategy 360 Director of Government Relations Bridgette Curtis Rice Operating Company VP/Secretary Mark Crowder Spinnaker Oilfield Services President & CEO Karen Fili Urenco, USA President & CEO

PC

SC

Enplanement for Hobbs increased 18.13% from 2018 to 2019, placing Hobbs in the top 80 airports for enplanement growth. This compares to an average growth of 4.2% for the 558 airports included in FAA Passenger Boarding Data.


Debra Hicks Pettigrew & Associates President & CEO Michael Hoyle Western Commerce Bank Division President Philip Ingram IPS President Richard Martin Martin Boot Company President TJ Parks Hobbs Municipal Schools Superintendent of Schools Bill Richards Richards Energy

Compression President

Daniel Russell Hobbs News-Sun Publisher David Shaw Nor-Lea Hospital District Chief Executive Officer Samuel Spencer Lea County State Bank President & CEO Quint Thurman University of the Southwest President

The community’s demonstrated commitment to and participation in the proposed project. The community commitment and participation in this project and the success of FlyHobbs is extremely high. Even during the worst months of COVID, we worked with United Airlines and other stakeholders in monthly meetings focused on maintaining a minimal level of service and staying ahead of the curve for planned build back of capacity for fall of 2020 (until a new round of state travel restrictions were imposed). Air service is simply a necessity for this community

and unlike other small airports, we kept our service in place long enough to guarantee the opportunity to recover. This was achieved as a direct result of the steadfast commitment of the local partners, the city and the county and that dedication is now focused on the restoration of our Denver service.

Whether the community’s proximity to an existing or prior grant recipient could adversely affect either its application proposal or the project undertaken by the other recipient. As summarized in Table 5, New Mexico has received only 6 of the over 400 SCASDP grants in the past 15 years.8 The only SCASDP grant recipient in proximity to Hobbs is Roswell, however fares are comparable, reducing incentives for residents in our respective catchment areas to make the 108-mile trip. Multiple service legs to Lea County are needed to address the challenges the poorly maintained roads and high commercial traffic for the EnergyPlex area.

There is not significant leakage between Hobbs and Roswell. The leakage that does occur is destination and carrier driven, for instance flying to Dallas vs. Houston. Residents using our

8 “Small Community Air Service Development Program (SCASDP) Grant Selections Archive,” U.S. Department of Transportation. https://www.transportation.gov/policy/aviation-policy/SCASDP-Recipient-Archive.

Table 5: New Mexico SCASDP Grants Year City SCASDP Award

Amount 2006 Gallup $600,000 2007 Roswell $400,000 2012 Los Alamos $272,000 2014 Roswell $450,000 2016 Santa Fe $500,000 2019 Roswell $750,000

SC

SC


airport for destinations outside of Hobbs are generally traveling in the opposite direction of the Roswell airport, while the majority of HOB business flyers are energy sector travelers who elect not to come through Midland, a significantly larger airport and community, due to the roads, drive time, and time zone differences. The only shared catchment community with Roswell is the small town of Artesia, home to one of the three residential Federal Law Enforcement Training Centers (FLETC) in the country and one of the largest sources of Roswell enplanements. Given these differences, HOB’s service to Denver is not directly competitive with Roswell’s; however, it does have increased potential for success and self-sufficiency having already initiated the route with a strong base of local, county, and community support.

Table 6: Summary of Alignment with SCASDP Criteria Criteria Meets? Detail

Insufficient Air Carrier Service

P • Direct air service limited to one eastbound route (United HOB to IAH)

• Lacks northbound direct hub flight and western access • Only 3-4 flights weekly, at present

Unique Circumstances

P • Located in key active oil and gas drilling area of the Permian Basin

• The only other airport in this active drilling area (Cavern City Air Terminal Airport in Carlsbad) lacks a major carrier, only offering PC-12 turboprop flights

High Air Fare P • HOB average airfares have been historically higher than the national average and average fares at nearby airports

Local Project Financial Support

P • $1.2M (60%) cash and in-kind match support (non airport revenue)

• Support coming from multiple sources (state, local government, airport, and city)

Public-Private Partnerships

P • Will leverage an established public-private partnership • Partnership includes local government, economic development

agency, air travel development, airport, and national air carrier Service Restoration

P • The project will restore service to Denver by United Airlines, which was terminated due to the pandemic

Material Benefit to Travelers

P • Resumes northbound direct flights to a hub • Doubles local traveler connections available • Location is within the Permian Basin, reducing drive time for

significant numbers of travelers heading to energy businesses from airports outside the region

• Mitigates traffic on oil and gas industry road infrastructure by reducing travel from distant airports

Timely Use of P • Project is resumption of successful and established service that


Funds was pulled due to overall reduction in pandemic travel, making for rapid deployment

Community Participation

P • Support from residents desiring travel access beyond the current single eastbound option to Houston

• Support from local businesses, many of which directly benefit from travelers

• City of Hobbs support resolution demonstrating support • Project plan includes community engagement

Location P • Significant area business activity in energy sectors with jobs predominately those of essential workers and tasks that cannot be completed remotely

• Resilient transportation access to region is of critical national interest

• Access to business activity from nearest hub airport problematic due to highway conditions

Other Factors P • Addresses need for more direct access to nationally critical energy industries

• Increases service to an airport experiencing enplanement growth of 4x the US average

• Partners commit to extend financial support and incentives beyond grant award term

• Letter of service intent from national air carrier, United Airlines • Project sustainability fueled by projected continued growth for

energy sector activity and employment growth in area • Meets SCASDP desires to geographically distribute funds as

NM has only 4 awards with active projects in areas far from Hobbs.

V. Description of the Air Service Needs and Deficiencies The restoration of our Denver flight and improved access to western air markets will address multiple community air service needs and deficiencies in Hobbs and Lea County, with impacts throughout southeastern New Mexico. These include critical commercial travel, connecting national personnel to the major energy regions in the United States and travel connecting this region to medical professionals, educational facilities, and other services that are currently underserved. This will also support our local hospitality industry by reducing passenger leakage, especially to the nearby and much larger Lubbock and Midland airports.

Restoration of the HOB-DEN flight will provide a northbound direct hub flight and more than double the number of connections available, adding service to 57 markets .


(1) Major origin/destination markets that are not now served or are not served adequately The proposed project aligns with SCASDP legislative criteria of supporting communities with insufficient air carrier service. The community and region lack any northbound or westbound direct flights including any to a connecting hub, despite the area’s critical role in national energy production. Prior to the initial establishment of the Denver service in November of 2019, Lea County Regional Airport had (and currently has) air service access from just one connecting hub. This is from HOB to IAH. Given the high level of energy sector traffic moving through Houston to Hobbs, this route has been vital to the region. However western access was limited, with many passengers required to connect through IAH, nearly 600 miles to southeast of Hobbs, to reach hubs to the north and west, which are currently not adequately served. The restoration of our HOB-DEN flight will more than double the number of connections available, adding service to 57 markets not currently served through HOB.

(2) The driving distance, in miles, to the nearest large, medium, and small hub airports, and airport with jet service. The catchment area of Lea County Regional Airport includes the communities of Artesia, Carlsbad, Tatum, Lovington, Hobbs, Eunice, and Jal, NM. The area also includes Texas communities of Seminole, Andrews, Denver City, and other smaller communities. The nearest large hub airport is DFW (402 miles) and the nearest medium hub is Albuquerque Sunport (322 miles). As shown in Table 7 (below), the closest airports in Midland, Lubbock, and Roswell are all over a 90-mile drive away (between an hour-and-a-half and two-hour drive) from most of the HOB population base. Roswell, the smallest of the alternatives, currently serves twice as many passengers while Lubbock and Midland airports are dramatically larger. With HOB serving only one major hub (IAH) this results in significant passenger leakage; prior to the launch of the HOB-DEN service, all of the estimated 13,200-15,000 annual Denver passengers generated in our service area used the Lubbock and Midland airports.

Figure 2: United Airlines DEN & IAH Hubs and Connecting Airports (Feb, 2021)


Table 7: Area Airport Distances and Characteristics

Airport Hub Size Enplaned*

2021-2025 Dev Estimate

Miles from Hobbs

Lea County Regional N 23,475 $23,510,945 5 Lubbock Preston Smith International S 484,010 $12,042,811 120 Midland International Air and Space Port S 618,794 $12,810,840 93 Roswell Air Center N 56,632 $129,020,000 108 (3) Fare levels that the community deems relevant to consideration of its application, including market analyses or studies demonstrating an understanding of local air service needs. Lea County has studied fares for airports that share capture areas. Fares for Lea County Regional Airport vs. Midland and Lubbock were analyzed in April of 2019. Lea County air fares are significantly higher than area competition in all but 2% of flights and fares at HOB are on average 30% higher than at Lubbock. See Table 3 for fare comparisons. As noted above, according to USDOT OD1B data, HOB ranks 24th in the nation for highest yield trend over the last 5 years with an average yield of 28.94 ¢. For a more detailed marketing analysis, please see section VII, Marketing and Promotion. (4) Air service developments within the past ten years that have adversely affected the community, including, but not limited to, termination of scheduled passenger service HOB has grown considerably over the last ten years. In 2011, when FlyHobbs first began commercial air service, there were just 7,346 enplanements at HOB, growing rapidly to 17,111 in 2012. By the close of 2019, there were 27,774 enplanements, a growth rate of 18% from the previous year. But the impact of COVID-19 on the United Airlines flights into HOB was devastating. We saw our load factor drop from 76.8% to 48.2% in March before reaching its lowest level in our history at 9.8% in April, 2020, and the DEN service was suspended. The economic impacts resonated throughout the community.

A survey of hotel owners and managers in Hobbs conducted by Tanya Sanchez, CVB Coordinator at COH found that the hotel industry here has hit an all-time low in occupancy and revenue due to the pandemic. According to an STR report on New Mexico’s hotel industry, the hotel occupancy rate was well over 85% in 2019 but dropped to less than 28% in 2020 on average. One Hobbs hotel has already closed down and another is on the verge of going out of business. This results in a considerable loss in GRT and Lodgers Tax funding for the City of Hobbs. (5) Service development efforts over the past three years and the results of those efforts (such as marketing and promotion (including advertising and public relations). HOB terminal expansion and development has been prioritized in the last three years, contributing to our high growth in our enplanement rates. This expansion has been a long-time


priority for the Lea County Commissioners in order to ensure access, opportunities for growth, and comfort for those who utilize FlyHobbs, which is crucial to our continued economic vitality in the Southeastern New Mexico (SENM).

The expansion was accomplished in three phases. The first phase included a larger passenger waiting area, a new TSA security area, a larger fire station, an improved baggage claim system and a larger parking lot. The second and third phase doubled the passenger waiting area to approximately 176 seats, nearly quadrupling the total area of the terminal from the previous 4,500 square feet to 17,000 square feet. A second gate and additional rental car spaces and other retails opportunities within the airport also are near completion.

The launch of our Denver service in 2019 was a major community development effort, grounded in our analysis of local county development and transportation needs and indicators. As noted above, we estimate that FlyHobbs brings $25 million in revenues into the region, due in part to our committed marketing and promotion efforts of Hobbs as a destination. Business travelers inbound to Hobbs who opt to fly into larger airports such as Midland or Lubbock frequently find accommodations in these cities as well, resulting in additional economic loss for our region. While these larger markets can offer more familiar amenities in terms of the variety of recognizable chain hotels and restaurants, the long drive time into Hobbs on often poorly maintained roads can be prohibitive, and our marketing strategy builds on not just the convenience but the unique character of Hobbs’ hospitality. VI. Strategic Plan for Meeting Needs (1) Fully and clearly outline the goals and objectives of the project The primary goal of our Restoring Service, Reviving Community project is to increase mobility and connectivity in Lea County with a sustainable, high-quality, and responsive service to northern and western markets.

Figure 3: Project Primary Goal and Objectives

Goal: Increase mobility and connectivity in Lea County with a sustainable, high-quality, and responsive service to northern and western markets

(2) Fully and clearly summarize the actual, specific steps (in bullet form, with a proposed timeline) that the community intends to take to bring about these goals and objectives.

Objective 1: Restore service from HOB to DEN with up to daily service beginning in the second Quarter of 2022.

Objective 2: Achieve route self-sufficiency, with expected load factors averaging between 70-75% with an anticipated $350 round trip ticket price, within the 3-year grant period.

Objective 3: Achieve a 75% favorable response to the Denver route and HOB service in annual surveys of residents and businesses.


Specific steps to bring about the above goals and objectives include: 2021 (June-Dec)

• Upon notification of an award, Lea County will initiate a formal process to accept the grant.

• Upon final grant approval by the County, the FlyHobbs support group will continue negotiations with United Airlines to restore the HOB-DEN service

• Contract negotiations with United Airlines finalized • A specific schedule will be developed to complement the HOB-IAH service and “right

fit” the available seats for the DEN market with projected passenger demand. • The HOB-DEN service will be announced in early December, targeting a start date of

either mid-February or late March 2022 to coincide with United’s schedule breaks. • The first report to the DOT SCASDP will be created to illustrate progress towards

establishment of the route, contract negotiation, scheduling and community input. • First update report to DOT SCASD

Q1 2022 (Jan-March)

• The FlyHobbs support group and the Economic Development Corporation of Lea County (EDCLC) will launch a marketing campaign targeting potential local passengers and businesses who travel outbound, the oil and gas businesses in Denver who traditionally send engineers and service employees to the Permian Base.

• Directly engage industry leaders currently operating in Lea County to promote employee travel to HOB with $205,000 in in-kind incentives and other promotions; partner with the New Mexico Department of Tourism to design promotional strategies with local hospitality assets.

• Resume nonstop service to DEN from HOB. • Conduct a resident and industry surveys to all HOB travelers which could include

passenger airport surveys, phone tracking device analysis and local business surveys. • Second quarterly report to DOT SCASD

Q2 2022 (April-July)

• Ongoing monitoring of weekly booking reports, with monthly and day of week load factors, fare comparisons, O&D data, financial updates and schedule adjustments.

• Initial evaluation of service data and suggested schedule adjustments. • Third quarterly report to DOT SCASD

Q3 2022 (August-Oct)

• Host second community stakeholder session and third quarterly survey.


• Evaluation of DEN service and passenger data, changes in fares, changes in passenger leakage % to Midland and Lubbock, and progress towards self-sufficiency.

• Assessment of marketing strategies including revenues, survey responses, summer hotel occupancy rates, fill-rate for education and medical services with out-of-state personnel in the region, and public/private partner feedback.

• Fourth quarterly report to DOT SCASD The timeline for the following two years will follow a similar cadence of implementation, assessment, and evaluation with required adjustments to ensure the service is meeting the stated goals and objectives, addressing deficiencies and satisfying community needs. (3) For applications involving new or improved service, explain how the service will become self-sufficient There are multiple factors supporting the self-sufficiency for the HOB-DEN route during the granting period including 1) Public support at the state, county, and local level; 2) Private support throughout the business sector; 3) Historical high load factors; 4) Positive aircraft and airport developments; and 5) A strong and growing local economy.

New Mexico’s Tourism Department and the Department of Transportation have partnered to Commission a strategic plan to position the aviation industry to capture more market share in the post-COVID-19 environment. Several strategies were developed to build a stronger aviation landscape throughout the state, including making interstate flights more accessible and increasing demand. With a new $25 million special stimulus appropriation to restore the tourism industry, key strategies include stabilizing commercial airports and increasing direct flight availability.9

The EDCLC and FlyHobbs represent both public and private as well as community interests that are so committed to the success of HOB-DEN route that before the public financial burdens brought on by the pandemic, we successfully leveraged public funding to provide United with a revenue guarantee. All of these stakeholders and beneficiaries will continue to have a role in supporting the self-sufficiency of the Denver service through direct participation, as well as primary and secondary marketing (see Marketing Plan below).

Further, unlike many smaller markets, the air service at HOB enjoys very strong load factors. While there is some seasonality, the overall situation is that the market is very underserved. A glance at load factors demonstrates that service to IAH is at or above 70% in most months, and in some months exceeding 80%. And HOB is growing, with an enplanement rate increase of 18% from the previous year as compared to the national average of 4.2%.

9 “Legislative Session: New Mexico Tourism Department,” Legislative Session | New Mexico Tourism Department. https://www.newmexico.org/industry/news/2021-legislative-session/?gclid=Cj0KCQiA7NKBBhDBARIsAHbXCB7mTrHq-mMSFb9iIWCH9hITBsxij7n7ZYLH58ZDMmigoWLsLLxBJcoaAlzWEALw_wcB.


Importantly, the underlying economic factors in the area present conditions for growth and sustainability of air travel by local residents. Higher area income levels are associated with SCASDP project success.10 Unlike most rural areas, which struggle economically, Lea County has a median household income 31.8% higher than the state and 4.2% higher than the nation (see Chart 1).

Additional factors in development that will contribute to the self-sufficiency of the route include the 70+ seat aircraft and United gate expansions at Denver.11 United will expand from 65 to up to 90 DEN gates total, expected to be online by early 2022, increasing connection flows. DEN has already surpassed IAH as an intercontinental hub, making this an especially strategic time for HOB to restore and ramp up our service. (4) For service to or from a specific city or market, (such as New York, Chicago, Los Angeles, or Washington, D.C., for example), a list of the airports that the applicant considers part of the market. Thirty-six percent of the 5,012 Hobbs-Denver enplanements originated in Denver, but after Denver, the top ten origination cities (representing 1.8-4.9% of the total share) were as follows:

1. Salt Lake City, UT (SLC) 2. Las Vegas, NV (LAS) 3. Grand Junction, CO (GJT) 4. Minneapolis/St. Paul, MN (MSP) 5. Seattle, WA (SEA) 6. Spokane, WA (GEG) 7. Los Angeles, CA (LAX) 8. Bakersfield, CA (BFL) 9. Phoenix, AZ (PHX) 10. Billings, MT (BIL)

This data is especially relevant because every one of these northern and western markets would have leaked through another airport and nearly all are oil & gas markets, representing our primary inbound business travel.

10 US Government Accountability Office, Small Community Air Service Development. March 2019. 11 “Improvements,” Gate Expansion & Concourse Renewal Program | Denver International Airport. https://www.flydenver.com/about/improvements/gate_expansion.

$65,712

$51,945

$68,457

United States New Mexico Lea County

Chart 1: Median Household Income

(US Census, 2019 ACS)


VII. Marketing and Promotion Plan The EDCLC will aggressively market United Airlines flights' ridership through a multi-faceted marketing campaign directed at the Greater Denver and Houston hub markets, Southeast New Mexico (SENM) counties, as well as the adjacent West Texas (WTX) counties that use these service hubs to come to Hobbs and SENM for work and as a gateway to NM tourism. The FY 2021-2023 marketing plan includes an expanded focus on alerting travelers of the restoration of the Denver service; the convenience of FlyHobbs air service to get to the region faster for business; and the quality of place benefits for our residents provided by expanded leisure travel to the Denver hub. The total estimated marketing budget for the restored Denver route alone is roughly $100,000. City of Hobbs Lodgers Tax funds will be leveraged on a 50-50 basis with New Mexico Department of Transportation Aviation Division marketing funds.

EDCLC’s staff has strong experience in marketing, graphics design, social media, research and other subject areas important to planning and implementation of an effective campaign to expand ridership and restoration of the Denver Service. A professional advertising agency, Wilson-Binkley was retained in December 2016 to 1) help us develop and sharpen traditional, social media, and streaming advertising, 2) identify the most productive initial target sectors, and 3) to help us measure results. Utilizing Wilson-Binkley’s research as well as passenger origination data provided by Airplanners LLC, in 2019-20 we identified key initial target sectors for marketing travel between Denver and the SENM/WTX market: energy, renewable energy, and medical travel. Social media and streaming services channels were recommended as strategies that will give the campaign room to pivot based on where data is proving strongest.

The social media marketing component has been significantly expanded from pre-pandemic levels, with geofencing target areas from origination and destination flights in the region on Facebook and Instagram, coupled with proposed advertising on select streaming services in radio and TV in the SENM/WTX, Denver and Houston markets. Measurement tools such as Google Analytics and AdWords are employed to gauge results and direct any needed changes in marketing focus to travel trends. This ongoing campaign also involves traditional media such as radio, print and electronic billboards.

In addition, the EDCLC staff carries out a comprehensive campaign of educating the public about the FlyHobbs service through regional community outreach. The staff will conduct many face-to-face visits with government agencies, site selectors for prospective new business, energy sector corporate executives, travel agencies, and corporate travel centers within the scope of our work as an organization to further the Fly Hobbs brand. VIII. Funding Necessary for Project Implementation Restoring service to Denver necessitates a risk-offset in the form of a minimum revenue


guarantee due to Covid-related challenges of relaunching what was previously a new service and City and County fund commitments allocated to supporting IAH service as the economy recovers. The EDCLC and FlyHobbs are requesting a grant of $800,000 to provide that offset in the form of a revenue guarantee to support flights accessing the United Airlines hub at Denver and ensure direct benefits to our community.

As shown in Table 8, SCASDP funds will be matched with $1,000,000 cash from local and state sources and will be augmented by additional in-kind incentives valued at $142,341:

Table 8: Project Cost Sources and Contribution (3-Yr Period) Source Amount Allocation

SCASDP Grant $800,000 Revenue guarantee Lea County $400,000 Revenue guarantee City of Hobbs $400,000 Revenue guarantee NM Department of Transportation (NMDOT) $100,000 Marketing (DEN & IAH) City of Hobbs (Lodgers Tax, matching funds for NM DOT funds) $100,000 Marketing (DEN & IAH)

HOB Parking Fee Waiver $105,300 Marketing/Incentive

HOB Landing Fee Waiver $15,441 Marketing/Incentive

Community digital marketing and billboards $21,600 Marketing IX. Explanation of how the proposed project differs from any previous projects for which the community received SCASDP funds within a ten-year period. Lea County Regional Airport has not previously received a SCASDP grant. X. Designation of a legal sponsor responsible for administering the proposed project. Lea County Government is the government entity legal sponsor and is able to legally, financially, and otherwise able to execute the grant agreement and administer the grant, including having the authority to sign the grant agreement and to assume and carry out the certifications, representations, warranties, assurances, covenants and other obligations required under the grant agreement with the Department and to ensure compliance by the grant recipient with the grant agreement and grant assurances. XI. A request for waiver of the Ten Year Same Project Limitation (if applicable); A motion for confidential treatment (if applicable) NA

Lea County Regional Airport

Hobbs, New Mexico

Restoring Service, Reviving Community

Proposal to the Small Community Air Service Development Grant Program (DOT-OST-

2020-0231)

Appendix 1, Letters of Support

# Signatory Agency Title

1 Daniel Malinowski United Airlines Managing Director,

Domestic Network

Planning

2 The Honorable Martin

Heinrich, The Honorable Ben

Ray Lujan, and the Honorable

Teresa Leger Fernandez

Congress of the United

States, Delegation Office,

New Mexico

United States Senator, New

Mexico

United States

Representative, District 3,

New Mexico

3 The Honorable Yvette Herrell U.S. Congress United States

Representative, District 2,

New Mexico

4 Michael Gallagher, II Lea County Government County Manager

5 Jennifer Grassham EDC of Lea County President & CEO

6 Sam D. Cobb City of Hobbs Mayor

7 Bill Belcher Zia Park Casino and Hotel, VP & General Manager

8 Missi Currier Strategy 360 Director of Government

Relations

9 Bridgette Curtis Rice Operating Company VP/Secretary

10 Mark Crowder Spinnaker Oilfield Services President & CEO

11 Karen Fili Urenco, USA President & CEO

12 Debra Hicks Pettigrew & Associates President & CEO

13 Michael Hoyle Western Commerce Bank Division President

14 Philip Ingram IPS President

15 Richard Martin Martin Boot Company President

16 TJ Parks Hobbs Municipal Schools Superintendent of Schools

17 Bill Richards Richards Energy

Compression

President

18 Daniel Russell Hobbs News-Sun Publisher

19 David Shaw Nor-Lea Hospital District Chief Executive Officer

20 Samuel Spencer Lea County State Bank President & CEO

21 Quint Thurman University of the Southwest President

Daniel Malinowski

Managing Director, Domestic Network Planning

Network Planning and Strategy

Willis Tower, 233 S. Wacker Drive, Chicago, IL 60606

Ms. Brooke Chapman

Associate Director

US Department of Transportation

Office of the Secretary

1200 New Jersey Avenue, SE

W Building, W86-490

Washington, DC 20590

Subject: United Airlines’ Letter of Support for Lea County Regional Airport’s

2020 Small Community Air Service Development Program Grant Application

Dear Ms. Chapman,

United Airlines supports the Small Community Air Service Development Program (SCASDP) grant

application submitted by Lea County Regional Airport (HOB). United provided air service to HOB from

Denver from October 2019 until April 2020 when it was suspended due COVID-19. United believes in its

promise for long term success as a part of our network and supports efforts to restore the service.

United has been very active in establishing our Denver hub as the premier connection point for customers

to travel across the country as well as abroad. Restoring the HOB-DEN service will bring quality air

service back to the region. In the current environment, these restoration efforts carry inherent risk and

significant costs. A SCASDP grant award with an associated Minimum Revenue Guarantee would help us

to overcome those risks.

We look forward to continuing to work with HOB to ensure the success of United service to DEN.

Sincerely,

Daniel Malinowski

Managing Director, Domestic Network Planning

February 26, 2021

The Honorable Pete Buttigieg

Department of Transportation

1200 New Jersey Avenue SE


Dear Secretary Buttigieg:

The New Mexico Congressional Delegation writes in support of the application submitted by Lea

County for a Small Community Air Service Development Program (SCASDP) grant as funded by

the Department of Transportation. This grant, DOT-OST-2020-0231, will allow the Lea County

Regional Airport (HOB) to restore its direct air service route to Denver International Airport

(DIA), which has been suspended as a result of the COVID-19 pandemic.

HOB is a nonhub airport located in Hobbs, New Mexico that serves as an air transit gateway for

the rural communities of southeastern New Mexico. In 2019, HOB established direct air service

to DIA through an agreement between Lea County, the City of Hobbs, the Economic Development

Corporation of Lea County, and United Airlines, with Lea County contributing to a minimum

revenue guarantee. The County reports that over 54,000 passengers utilized this air service route

in 2019, with an estimated economic impact of more than $25 million for southeastern New

Mexico.

However, the advent of the COVID-19 pandemic led to a dramatic decrease in air travel throughout

2020, forcing HOB to suspend air service to Denver. Lea County seeks to utilize SCASDP funds

to implement a revenue guarantee that will allow United Airlines to reinstate service to DIA while

minimizing the financial risk to taxpayers in the County.

We believe that Lea County’s SCASDP initiative is needed to restore this vital direct service route

for travelers and community members in the County and the surrounding region. If approved, we

expect that program funding will make a meaningful contribution towards the recovery and future

resiliency of southeastern New Mexico’s economy.

The New Mexico Congressional Delegation proudly supports the grant application submitted by

Lea County for a Small Community Air Service Development Program grant as funded by the

Department of Transportation and we request that you give their application thorough

consideration within your review guidelines.

Sincerely,

/s/ Martin Heinrich

United States Senator

/s/ Ben Ray Luján

United States Senator

/s/ Teresa Leger Fernandez

United States Representative

Lea County 100 North Main Avenue, Suite 4 Lovington, New Mexico 88260 www.leacounty.net

February 26, 2021

Brooke Chapman, Associate Director Small Community Air Service Development Program U.S. Department of Transportation 1200 New Jersey Ave, SE W86-310 Washington, DC 20590

Subject: Small Community Air Service Development Program Docket DOT-OST-2020-0231Lea County Government – Lea County Regional Airport

Dear Ms. Chapman,

On the behalf of Lea County Government, I would like to express our support for theSCASDP grant application for the Lea County Regional Airport. The Lea County RegionalAirport services Southeastern New Mexico and the Small Community Air Service Development grant application would help our community greatly. Increasing and maintaining air travel options to and from the Lea County Regional Airport is vital to continuing to expand our connections to other energy sector communities to the north and west of Lea County.

Growth in Southeast New Mexico over the past few years has been a direct result of the energy sector. Lea County is currently the highest largest oil producing county in the United States. As you evaluate this application, I ask that you not only evaluate the implications to the region but also the implications of supporting an economy that drives our energy independence goals. Expanding and keeping air service at Lea County Regional Airport is a key component of our future success and growth of our area.

Lea County would benefit greatly by being able to reinstate air service to/from DenverInternational and the destinations it serves to our employees, vendors and customers. The Lea County Regional Airport and the “FlyHobbs” airline support group has forged strong relationships with regional businesses that will greatly benefit from reinstating this airservice. We appreciate the opportunity to expand that partnership to the US Department of Transportation through the Small Community Air Service development program. We are pleased to have the opportunity to support this grant application. Sincerely,

Michael P. Gallagher, II County Manager

February 26, 2021

Ms. Brooke Chapman, Associate Director Small Community Air Service Development Program United States Department of Transportation 1200 New Jersey Ave SE Washington, DC 20590 Subject: Letter of Support - Lea County Regional Airport

Small Community Air Service Development Program (SCASDP) Dear Ms. Chapman, The Economic Development Corporation of Lea County fully supports Lea County’s application for the Small Community Air

Service Development Program (SCASDP) grant. The grant would assist Lea County, the City of Hobbs, the Economic

Development Corporation of Lea County (EDCLC), and United Airlines to restore suspended air service between Lea County

Regional Airport (HOB) in Hobbs, New Mexico, and Denver International Airport (DEN) in Denver,

Colorado. The DEN service was suspended in April 2020 due to COVID-19. Currently, there is only service between HOB and

Houston, Texas. The SCASDP grant award would assist Lea County, its municipalities, and surrounding communities continue

to recover from the economic devastation of COVID-19, further improve quality of life, and encourage economic development

and diversification throughout our region. The HOB air service is a vital and active part of the Southeastern New Mexico economy. It has proven to be a viable, regional

transportation gateway serving all of the Permian Basin for both business and leisure travel. In February 2020, the Houston-

Hobbs route operated at its highest February load factor ever at 77 percent. In the third quarter of 2019, this route was the third

most profitable spoke out of 105 destinations served from UA’s Houston hub as measured by stage-length adjusted total

revenue per available seat mile. The Denver service started in October of 2019 and was off to a strong start. In 2019 alone, over

54,000 passengers utilized the service. The economic impact to the region is estimated at over $25 million per

year. Connections through Houston and Denver connect passengers to over 350 destinations worldwide. With the onset of COVID-19, flight demand decreased dramatically in 2020. Despite the decrease in travel demand, Lea

County, the City of Hobbs, the EDCLC, and United Airlines worked diligently to maintain air service for essential businesses to

access southeastern New Mexico during such trying times. Moving forward, access is pivotal to recovery and economic

recruitment and diversification. The restoration of this flight is critical to the economic revitalization of Lea County, New Mexico. Furthermore, access by

residents in rural New Mexico to one of the most robust airline hubs in the nation is key to our quality of life in Lea County and

all of southeastern New Mexico. Thank you for your support and consideration of the application. Sincerely,

Jennifer Grassham

Interim President & CEO

February 26, 2021

Ms. Brooke Chapman, Associate Director

Small Community Air Service Development Program

United States Department of Transportation

1200 New Jersey Avenue SE


RE: Small Community Air Service Development Program (SCASDP) – Lea County

Dear Ms. Chapman,

On behalf of Strategies 360, I would like to express our support for Lea County, New Mexico’s Small

Community Air Service Development Program (SCASDP) grant application for the Lea County Regional

Airport (HOB) in Hobbs, New Mexico. The SCASDP grant award would help Lea County, its municipalities,

and surrounding communities recover from the economic devastation of COVID-19, continue to improve

quality of life, and encourage economic development and diversification throughout the region.

Through an agreement between Lea County, the City of Hobbs, the Economic Development Corporation of Lea

County (EDCLC), and United Airlines, HOB provides air service to Houston and Denver through a Minimum

Revenue Guarantee subsidized by the City of Hobbs and Lea County. The air service is a gateway to rural New

Mexico and connects New Mexico residents to over 350 destinations worldwide and brings business and leisure

travelers to our state. Due to the effects of COVID-19, flights to Denver have been temporarily suspended and

Houston flights reduced. The SCASDP grant award would allow for the Denver service to be reinstated and

minimize the monetary risk to taxpayers.

The HOB air service is a vital and active part of the Southeastern New Mexico economy. It has proven to be a

viable, regional transportation gateway serving all of the Permian Basin for both business and leisure travel. In

February 2020, the Houston-Hobbs route operated at its highest February load factor ever of 77 percent. In the

third quarter of 2019, this route was the third most profitable spoke out of 105 destinations served from UA’s

Houston hub as measured by stage-length adjusted total revenue per available seat mile. The Denver service

started in October of 2019 and was off to a strong start. In 2019 alone, over 54,000 passengers utilized the

service. The economic impact to the region is estimated at over $25 million per year.

With the onset of COVID-19, flight demand decreased dramatically in 2020. Despite the decrease in travel

demand, Lea County, the City of Hobbs, the EDCLC, and United Airlines worked diligently to maintain air

service for essential business to access southeastern New Mexico during such trying times. Moving forward,

access is pivotal to recovery and economic recruitment and diversification. The reestablishment of the Denver

air service would assist in revitalizing the economy and ensuring access to rural New Mexico.

We support Lea County’s efforts in applying for the SCASDP grant. Thank you for your consideration and

support of Lea County’s application.

Sincerely,

Missi Currier

Director of Government Relations

http://www.strategies360.com/

February 16, 2021




1200 New Jersey Ave SE


Subject: Letter of Support - Lea County Regional Airport

Small Community Air Service Development Program (SCASDP)

Dear Ms. Chapman,

Spinnaker Oilfield Services support Lea County’s application for the Small Community Air

Service Development Program (SCASDP) grant. The grant would assist Lea County, the City of

Hobbs, the Economic Development Corporation of Lea County (EDCLC), and United Airlines to

restore suspended air service between Lea County Regional Airport (HOB) in Hobbs, New

Mexico, and Denver International Airport (DEN) in Denver, Colorado. The DEN service was

suspended in April 2020 due to COVID-19. Currently, there is only service between HOB and

Houston, Texas. The SCASDP grant award would assist Lea County, its municipalities, and

surrounding communities continue to recover from the economic devastation of COVID-19,

further improve quality of life, and encourage economic development and diversification

throughout our region.

The HOB air service is a vital and active part of the Southeastern New Mexico economy. It has

proven to be a viable, regional transportation gateway serving all the Permian Basin for both

business and leisure travel. In February 2020, the Houston-Hobbs route operated at its highest

February load factor ever at 77 percent. In the third quarter of 2019, this route was the third most

profitable spoke out of 105 destinations served from UA’s Houston hub as measured by stage-

length adjusted total revenue per available seat mile. The Denver service started in October of

2019 and was off to a strong start. In 2019 alone, over 54,000 passengers utilized the service.

The economic impact to the region is estimated at over $25 million per year. Connections

through Houston and Denver connect passengers to over 350 destinations worldwide.

With the onset of COVID-19, flight demand decreased dramatically in 2020. Despite the

decrease in travel demand, Lea County, the City of Hobbs, the EDCLC, and United Airlines

worked diligently to maintain air service for essential business to access southeastern New

Mexico during such trying times. Moving forward, access is pivotal to recovery and economic

recruitment and diversification. The reestablishment of the Denver air service would assist in

revitalizing the economy and ensuring access to rural New Mexico.

Economic revitalization and access to rural New Mexico are key to our quality of life in Lea

County and all southeastern New Mexico. Thank you for your support and consideration of the

application.

Sincerely,

Mark Crowder

President & CEO

Spinnaker Oilfield Services

Louisiana Energy Services, LLC UUSA | P.O. Box 1789 | Eunice | New Mexico | 88231 | USA T: +1 (575) 394 4646 | W: www.uusa.urenco.com © 2021 Louisiana Energy Services, LLC 1

February 26, 2021 Ms. Brooke Chapman, Associate Director Small Community Air Service Development Program United States Department of Transportation 1200 New Jersey Ave SE Washington, DC 20590 Re: Letter of Support - Lea County Regional Airport Small Community Air Service Development Program (SCASDP) Dear Ms. Chapman, Urenco USA (UUSA) supports Lea County’s application for the Small Community Air Service Development Program (SCASDP) grant. The grant would assist Lea County, the City of Hobbs, the Economic Development Corporation of Lea County (EDCLC), and United Airlines to restore suspended air service between Lea County Regional Airport (HOB) in Hobbs, New Mexico, and Denver International Airport (DEN) in Denver, Colorado. The DEN service was suspended in April 2020 due to COVID-19. Currently, there is only service between HOB and Houston, Texas. The SCASDP grant award would assist Lea County, its municipalities, and surrounding communities continue to recover from the economic devastation of COVID-19, further improve quality of life, and encourage economic development and diversification throughout our region. The HOB air service is a vital and active part of the Southeastern New Mexico economy. It has proven to be a viable, regional transportation gateway serving all of the Permian Basin for both business and leisure travel. In February 2020, the Houston-Hobbs route operated at its highest February load factor ever at 77 percent. In the third quarter of 2019, this route was the third most profitable spoke out of 105 destinations served from UA’s Houston hub as measured by stage-length adjusted total revenue per available seat mile. The Denver service started in October of 2019 and was off to a strong start. In 2019 alone, over 54,000 passengers utilized the service. The economic impact to the region is estimated at over $25 million per year. Connections through Houston and Denver connect passengers to over 350 destinations worldwide. With the onset of COVID-19, flight demand decreased dramatically in 2020. Despite the decrease in travel demand, Lea County, the City of Hobbs, the EDCLC, and United Airlines worked diligently to maintain air service for essential businesses to access southeastern New Mexico during such trying times. Moving forward, access is pivotal to recovery and economic recruitment and diversification. The reestablishment of the Denver air service would assist in revitalizing the economy and ensuring access to rural New Mexico. Economic revitalization and access to rural New Mexico are key to our quality of life in Lea County and all of southeastern New Mexico. Thank you for your support and consideration of the application.

Sincerely,

Karen Fili President and CEO Urenco USA

100 E. Navajo Drive Suite 100 Hobbs NM 88240 T 575 393 9827 F 575 393 1543 http:\\www.Pettigrew.us

February 18, 2021




1200 New Jersey Ave SE


Subject: Letter of Support - Lea County Regional Airport

Small Community Air Service Development Program (SCASDP)

Dear Ms. Chapman,

Pettigrew & Associates, P.A. supports Lea County’s application for the Small Community Air

Service Development Program (SCASDP) grant. The grant would assist Lea County, the City of

Hobbs, the Economic Development Corporation of Lea County (EDCLC), and United Airlines to

restore suspended air service between Lea County Regional Airport (HOB) in Hobbs, New

Mexico, and Denver International Airport (DEN) in Denver, Colorado. The DEN service was

suspended in April 2020 due to COVID-19. Currently, there is only service between HOB and

Houston, Texas. The SCASDP grant award would assist Lea County, its municipalities, and

surrounding communities continue to recover from the economic devastation of COVID-19,

further improve quality of life, and encourage economic development and diversification

throughout our region.

The HOB air service is a vital and active part of the Southeastern New Mexico economy. It has

proven to be a viable, regional transportation gateway serving all of the Permian Basin for both

business and leisure travel. In February 2020, the Houston-Hobbs route operated at its highest

February load factor ever at 77 percent. In the third quarter of 2019, this route was the third most

profitable spoke out of 105 destinations served from UA’s Houston hub as measured by stage-

length adjusted total revenue per available seat mile. The Denver service started in October of

2019 and was off to a strong start. In 2019 alone, over 54,000 passengers utilized the service.

The economic impact to the region is estimated at over $25 million per year. Connections

through Houston and Denver connect passengers to over 350 destinations worldwide.

With the onset of COVID-19, flight demand decreased dramatically in 2020. Despite the

decrease in travel demand, Lea County, the City of Hobbs, the EDCLC, and United Airlines

worked diligently to maintain air service for essential business to access southeastern New

Mexico during such trying times. Moving forward, access is pivotal to recovery and economic

recruitment and diversification. The reestablishment of the Denver air service would assist in

revitalizing the economy and ensuring access to rural New Mexico.

tel:575-393-9827

http://www.pettigrew.us/

Economic revitalization and access to rural New Mexico are key to our quality of life in Lea

County and all of southeastern New Mexico. Thank you for your support and consideration of

the application.

Sincerely,

Debra P. Hicks, PE/LSI

President & CEO

INC.

Ingram Professional Services. inc. www.ipsaecorp.com 1612 W. Sanger Hobbs NM 88240

Hobbs Municipal Schools Central Office 1515 East Sanger P.O. Box 1030 Hobbs, New Mexico 88241

Phone: (575)433-0100 Fax: (575)433-0140

February 26, 2021 Ms. Brooke Chapman, Associate Director Small Community Air Service Development Program United States Department of Transportation 1200 New Jersey Ave SE Washington, DC 20590 Subject: Letter of Support - Lea County Regional Airport

Small Community Air Service Development Program (SCASDP) Dear Ms. Chapman, Hobbs Municipal Schools supports Lea County’s application for the Small Community Air Service Development Program (SCASDP) grant. The grant would assist Lea County, the City of Hobbs, the Economic Development Corporation of Lea County (EDCLC), and United Airlines to restore suspended air service between Lea County Regional Airport (HOB) in Hobbs, New Mexico, and Denver International Airport (DEN) in Denver, Colorado. The DEN service was suspended in April 2020 due to COVID-19. Currently, there is only service between HOB and Houston, Texas. The SCASDP grant award would assist Lea County, its municipalities, and surrounding communities continue to recover from the economic devastation of COVID-19, further improve quality of life, and encourage economic development and diversification throughout our region. The HOB air service is a vital and active part of the Southeastern New Mexico economy. It has proven to be a viable, regional transportation gateway serving all of the Permian Basin for both business and leisure travel. In February 2020, the Houston-Hobbs route operated at its highest February load factor ever at 77 percent. In the third quarter of 2019, this route was the third most profitable spoke out of 105 destinations served from UA’s Houston hub as measured by stage-length adjusted total revenue per available seat mile. The Denver service started in October of 2019 and was off to a strong start. In 2019 alone, over 54,000 passengers utilized the service. The economic impact to the region is estimated at over $25 million per year. Connections through Houston and Denver connect passengers to over 350 destinations worldwide. With the onset of COVID-19, flight demand decreased dramatically in 2020. Despite the decrease in travel demand, Lea County, the City of Hobbs, the EDCLC, and United Airlines worked diligently to maintain air service for essential businesses to access southeastern New Mexico during such trying times. Moving forward, access is pivotal to recovery and economic recruitment and diversification. The reestablishment of the Denver air service would assist in revitalizing the economy and ensuring access to rural New Mexico. Economic revitalization and access to rural New Mexico are key to our quality of life in Lea County and all of southeastern New Mexico. Thank you for your support and consideration of the application. Sincerely,

TJ Parks Superintendent of Schools

Nor-Leawwrv.nor-lea.otg

February 16,2021

Ms. Brooke Chapman, Associate DirectorSmall Community Air Service Development ProgramUnited States Department of Transportation1200 New Jersey Ave SEWashinglon, DC 20590

Subject: Letter of Support - Lea County Regional AirportSmall Community Air Service Development Program (SCASDP)

Dear Ms. Chapman,

Nor-ka Hospital District supports Lea County's application for the Small Community Air Service Development Program(SCASDP) grant. The grant would assist Lea County, the City ofHobbs, the Economic Development Corporation of l,€aCounty (EDCLC), and United Airlines to restore suspended air service between lra County Regional Airport (HOB) inHobbs, New Mexico, and Denver Intemational Airport (DEN) in Denver, Colorado. The DEN service was suspended inApril 2020 due to COVID-19. Currently, there is only service between HOB and Houston, Texas. The SCASDP gra.nt

award would assist Lea County, its municipalities, and surrounding communities continue to recover from the economic

devastation of COVID-19, further improve quality oflife, and encourage economic development and diversificationthroughout our region.

The HOB air service is a vital and active part ofthe Southeastem New Mexico economy. lt has proven to be a viable,regional transportation gateway serving all ofthe Permian Basin for both business and leisure travel. In February 2020,

the Houston-Hobbs route operated at its highest February load factor ever at 77 percent. In the third quarter of20l9, thisroute was the third most profitable spoke out of 105 destinations served fiom UA's Houston hub as measured by stage-

length adjusted total revenue per available seat mile. The Denver service started in Octohr of20l9 and was offto a

strong start. In 2019 alone, over 54,000 passengers utilized the service. The economic impact to the region is estimated at

over $25 million per year. Connections through Houston and Denver connect passengers to over 350 destinations

worldwide.

With the onset of COVID-19, flight demand decreased dramatically in 2020. Despite the decrease in travel demand, Lea

County, the City of Hobbs, the EDCLC, and United Airlines worked diligently to maintain air service for essential

business to access southeastem New Mexico during such trying times. Moving forward, access is pivotal to recovery and

economic recruitment and diversification. The reestablishment ofthe Denver air service would assist in revitalizing the

economy and ensuring access to rural New Mexico.

Economic revitalization and access to rural New Mexico are key to our quality of life in Lea County and all ofsoutheastern New Mexico. Thank you for your support and consideration ofthe application.

I Nor-Lea Hospital District I 1600 Nonh N'lain I Lovington, NM 88260 | Ph: (575) 396-661 t

UNITED IN SERVICE. TRUSTED FOR LIFE.

CEO/Administrator

University of the Southwest

February 16, 2021 Ms. Brooke Chapman, Associate Director Small Community Air Service Development Program United States Department of Transportation 1200 New Jersey Ave SE Washington, DC 20590 Subject: Letter of Support - Lea County Regional Airport

Small Community Air Service Development Program (SCASDP) Dear Ms. Chapman, University of the Southwest supports Lea County’s application for the Small Community Air Service

Development Program (SCASDP) grant. The grant would assist Lea County, the City of Hobbs, the

Economic Development Corporation of Lea County (EDCLC), and United Airlines to restore

suspended air service between Lea County Regional Airport (HOB) in Hobbs, New Mexico, and Denver

International Airport (DEN) in Denver, Colorado. The DEN service was suspended in April 2020 due to

COVID-19. Currently, there is only service between HOB and Houston, Texas. The SCASDP grant award

would assist Lea County, its municipalities, and surrounding communities continue to recover from the

economic devastation of COVID-19, further improve quality of life, and encourage economic development

and diversification throughout our region. The HOB air service is a vital and active part of the Southeastern New Mexico economy. It has proven to

be a viable, regional transportation gateway serving all of the Permian Basin for both business and leisure

travel. In February 2020, the Houston-Hobbs route operated at its highest February load factor ever at 77

percent. In the third quarter of 2019, this route was the third most profitable spoke out of 105 destinations

served from UA’s Houston hub as measured by stage-length adjusted total revenue per available seat mile.

The Denver service started in October of 2019 and was off to a strong start. In 2019 alone, over 54,000

passengers utilized the service. The economic impact to the region is estimated at over $25 million per

year. Connections through Houston and Denver connect passengers to over 350 destinations worldwide. With the onset of COVID-19, flight demand decreased dramatically in 2020. Despite the decrease in travel

demand, Lea County, the City of Hobbs, the EDCLC, and United Airlines worked diligently to maintain air

service for essential businesses to access southeastern New Mexico during such trying times. Moving

forward, access is pivotal to recovery and economic recruitment and diversification. The reestablishment of

the Denver air service would assist in revitalizing the economy and ensuring access to rural New Mexico. Economic revitalization and access to rural New Mexico are key to our quality of life in Lea County and all

of southeastern New Mexico. Thank you for your support and consideration of the application. Sincerely,

Quint Thurman,

President

/s/

Office of the President 6610 Lovington Highway, Suite 502 │ Hobbs, New Mexico 88240 │ 575.492.2123 │ www.usw.edu

http://www.usw.edu/

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