Okaloosa County BOCC — April 7, 2015 — Destin-Fort Walton Beach Airport Air Service Incentive Plan

Supporting and Growing Air Service at VPS Since Deregulation, Only Four Carriers Now Dominate The Big Four Have 91% of US Seats They Can Focus on Yield (Driving High Fares) Instead of Market Share 1978 2000 Today Source: Sixel Consulting Group VPS Continues to Grow Service (With Existing Carriers) All Three Carriers Add Seats This Summer United Met at HQ in January Added Larger Planes, More Flights 16% More Seats Delta Met at Conference in November Additional ATL Flight; 5.5% More Seats American Met at Conference in November DCA Coming Back; 4.8% More Seats Jun-14 Jun-15 Non-Stop Departures Seats Departures Seats Capacity Carrier Destination Per Day Per Day Per Day Per Day Change American CLT 3.4 183 3.9 195 6.2% DCA 0.2 12 0.2 12 0.0% DFW 6.9 338 7 353 4.2% American Total 10.5 533 11.1 560 4.8% Delta ATL 6 734 7.1 777 5.5% Delta Total 6 734 7.1 777 5.5% United IAH 3.7 185 4 220 15.9% United Total 3.7 185 4 220 15.9% VPS Total 20.2 1452 22.2 1557 6.7% Source: Sixel Consulting Group; Airline Schedules  VPS Growth Outpaces Others Change in Passengers on the Gulf Coast January 2014 vs. January 2015 10.0% 8.0% 6.0% 8.9% 4.0% 2.0% 4.0% 4.0% 0.0% -0.4% -2.0% VPS ECP PNS MOB VPS was the Second Busiest Airport in the Region in January 2015 Source: Sixel Consulting Group; Airline Schedules  VPS Continually Pursues Service Will Meet, in Person, with Many Carriers This Year Meet at Headquarters, Conferences Host in Market, When Appropriate Meetings in the Last 12 Months: Source: Sixel Consulting Group Other Airports Have Advantages ECP/Panama City St. Joseph Corp: $26 Million Incentive $1.8 Million Tax Money for JetBlue No Land Lease Payments PNS/Pensacola $10 Million Southwest Incentive Tax Funding Available from City No Land Lease Payments Source: Sixel Consulting Group Research  VPS Must Compete Regionally Nearby Airports Offer Aggressive Incentives ECP: Tens of Millions Available (Private) and Bed Tax (Bay AND Walton Co) PNS: City Funding Available VPS Has Additional Cost Burdens Land Lease for Terminal One of Very Few Land Lease Airports in the US Landing Fee Paid to Eglin Not Competitive with Neighbors $400,000 per Year in Lost Revenue VPS Must Develop Incentive Sources Source: Sixel Consulting Group  VPS Current Incentives New Carrier to the Market Terminal Rent Waived for One Year Landing Fees Waived for One Year Free Ground Handling Check-in Desk Baggage Loading Gate Staffing/Boarding $85,000 for Mar