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California Air Travel Update and LAX Modernization Plan Preview Prepared for: The 21 st Annual Southern California Visitor Industry Outlook COnference October 30, 2009 Pasadena Conference Center Pasadena, California

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california air travel update and lax modernization plan preview
California Air Travel Update and LAX Modernization Plan Preview

Prepared for:

The 21st Annual Southern California Visitor Industry Outlook COnference

October 30, 2009

Pasadena Conference Center

Pasadena, California

slide2

The Two Major Demographic Factors That Drive Demand for Air Travel: Population Growth and GDP/Household Income

los angeles is the second largest metro area in the u s and still growing
Los Angeles is the Second-Largest Metro Area in the U.S. and Still Growing

2007 Metro Area Population for U.S. Large Hubs

(000s)

Los Angeles

Los Angeles is Growing Faster, in Terms of Total Population Increase, Than Any Other U.S. Metropolitan Area

Note: Combined Statistical Area Populations; Washington Includes Baltimore MSA

Source: Population Division, U.S. Census Bureau, Release Date March 27, 2008

slide4
California’s Population Will Increase by Almost 12.6 M by 2030 – With Over Half the Increase Concentrated in Greater Los Angeles

Projected Population Growth of Top 10 States (Millions) 2000 - 2030

California

Source: U.S. Census, 2005

slide5
Population in the Los Angeles has Exceeded the U.S. Growth Rate Area Since 2000 - Impressive for the Second-Largest City in the U.S.

Average Annual Population Growth Rate in Los Angeles, California, and the U.S.

2000-2007

Note: LA Area Includes LA, Orange, Ventura, Riverside and San Bernardino Counties

Source: U.S. Census Bureau, American Factfinder

slide6
Los Angeles’ GDP Ranks Third Among Major Cities In the World, and its Economic Strength is Projected to Continue Through the Next Decade

GDP Estimates for Major Cities In the World

2005 & 2020

Note: GDP is Estimated at 2005 Purchase Price Parity (PPP) Using UN Population Definitions and Projections

Source: PricewaterhouseCoopers Projections

23 fortune 500 companies are headquartered in the los angeles region
23 Fortune 500 Companies are Headquartered in the Los Angeles Region

Fortune 500 Companies Headquartered in Southern California

2008

Source: "America's Largest Private Companies," Special Report, Forbes.com, November 3, 2008.

"Fortune 500 Rankings," CNN Money.com (2008).

the los angeles region is also home to some of america s largest privately held companies
The Los Angeles Region is Also Home to Some of America’s Largest Privately-Held Companies

Largest Privately-Held Companies in America Headquartered in Southern California

2008

Source: "America's Largest Private Companies," Special Report, Forbes.com, November 3, 2008

"Fortune 500 Rankings," CNN Money.com (2008)

personal income in the los angeles area has more than doubled in the last two decades
Personal Income in the Los Angeles Area has More Than Doubled In the Last Two Decades

Total Personal Income for Five-County LA Region and Year-Over-Year Percent Growth

1991 - 2007

Note: Southern California Includes LA, Orange, Ventura, Riverside and San Bernardino Counties

Source: U.S. Department of Commerce, Bureau of Economic Analysis, http://www.bea.doc.gov/ (April 2008)

slide11
Most Major U.S. Airlines and Low Cost Carriers Made Money During 3Q 2009 (Fewer Seats + Ancillary Revenue Overcome Weak Fares)

Operating Profit Margin of U.S. Carriers

3Q 2009

Note: System Totals

Source: Airline Press Releases

slide12
California has Weathered the Recent Downturn in Air Travel About as Well as Have its Peer States, but…

Percentage Change in O-D Passenger Traffic Activity

YE July 2007 Peak versus YE July 2009

Source: Sabre Airline Solutions MIDT Passenger Bookings

slide13
California’s O-D Passenger Traffic Growth Lagged That of its Peers During Recent Years, Then Declined as Rapidly During the Past 12 Months

Annual Percentage Change in Origin-Destination Passenger Bookings

12 Months Ending July 31st

Source: Sabre Airline Solutions MIDT Passenger Bookings

this holds true for domestic o d passenger traffic
This Holds True for Domestic O-D Passenger Traffic…

Annual Percentage Change in Domestic Origin-Destination Passenger Bookings

12 Months Ending July 31st

Source: Sabre Airline Solutions MIDT Passenger Bookings

as well as international activity
… as Well as International Activity

Annual Percentage Change in International Origin-Destination Passenger Bookings

12 Months Ending July 31st

Note: Combined Statistical Area Populations; Washington Includes Baltimore MSA

Source: Population Division, U.S. Census Bureau, Release Date March 27, 2008

slide16
Nevertheless, California Remains the Largest O-D Passenger Market in the U.S., in Terms of Both Passenger Traffic…

Annual Indexed O-D Passenger Traffic, Versus California Total

12 Months Ending July 31st

Source: Sabre Airline Solutions MIDT Passenger Bookings

as well as revenue generation
…as Well as Revenue Generation

Annual Indexed O-D Passenger Revenue, Versus California Total

12 Months Ending July 31st

Source: Sabre Airline Solutions MIDT Passenger Bookings

slide18

Within California, Demand Has Declined Sharply in Each of the Three Major Metropolitan Areas… Except for International Demand in the Bay Area

Percentage Change in O-D Passenger Traffic Activity

YE July 2007 Peak versus YE July 2009

Source: Sabre Airline Solutions MIDT Passenger Bookings

slide19
However, O-D Revenue Has Held up Comparatively Well, Particularly for International Traffic in Southern California

Percentage Change in O-D Passenger Revenue

YE July 2007 Peak versus YE July 2009

Source: Sabre Airline Solutions MIDT Passenger Bookings

slide20
In Fact, Market Share of O-D Passenger Demand Within the State has Remained Relatively Constant, in terms of Both Domestic Traffic…

Annual Indexed Domestic O-D Passenger Traffic, Versus Southern California Total

12 Months Ending July 31st

Source: Sabre Airline Solutions MIDT Passenger Bookings

as well as international passenger activity
…as Well as International Passenger Activity

Annual Indexed International O-D Passenger Traffic, Versus Southern California Total

12 Months Ending July 31st

Source: Sabre Airline Solutions MIDT Passenger Bookings

slide22
Within California, O-D Passenger Demand has Actually Declined More Rapidly than Seat Capacity (i.e., Supply)…

Percentage Change in Seat Capacity and O-D Passenger Traffic

YE July 2007 Peak versus YE July 2009

Source: Sabre Airline Solutions MIDT Passenger Bookings

slide23
O-D Passenger Traffic has Declined at Every Airport in Southern California, Although Disproportionately so at LA/Ontario

Percentage Change in Seat Capacity and O-D Passenger Traffic

YE July 2007 Peak versus YE July 2009

Source: Sabre Airline Solutions MIDT Passenger Bookings

slide24
In the Bay Area, O-D Passenger Demand and Seat Supply Have Increased at San Francisco, but Declined Drastically at Oakland

Percentage Change in Seat Capacity and O-D Passenger Traffic

YE July 2007 Peak versus YE July 2009

Source: Sabre Airline Solutions MIDT Passenger Bookings

slide26

Although Traffic at LAX Never Recovered to 2000 Peak Levels, the Southern California Region Did Grow by 3.4M Passengers (at Least Until 4Q 2008)

Passenger Traffic Growth at Southern California Airports

(in millions), 1975 – 2007

Only domestic traffic declined – international actually grew to record levels

Source: Airport records.

slide27

However, Since the Second Half of 2008, LAX has Begun to Re-Gain Market Share Within the Region, a Trend that Will Likely Continue Until Recovery

Percentage Share of Southern California Passenger Traffic

YE3Q 2008 vs. YE3Q 2009

Source: Airport records.

slide28
LAX Passenger Traffic Exceeded 2008 Forecasts and New Air Service Should Help the Airport to Weather Existing Economic Turbulence…

LAX Total Airport Passengers

CY 2000 – CY 2009

67.3

New LAX Service:

Emirates (Dubai)

V Australia (Sydney)

Delta (Sydney)

Korean (São Paulo)

Delta (Sydney & São Paulo)

JetBlue (New York JFK and Boston)

Mexicana (Oaxaca)

Allegiant (13 U.S. cities)

Southwest (St. Louis)

62.4

61.5

60.7

61.6

61.0

59.4

59.4

56.2

55.0

17.4

55.4

16.0

17.5

17.2

16.9

16.5

16.7

16.6

14.6

15.6

14.8

49.9

45.7

45.2

44.2

44.1

44.0

41.4

43.1

42.7

40.4

39.8

Source: Airport Records

slide29
…but LAWA Has Serious Cause for Concern Regarding the Health of its Other Major Commercial Airport, LA/Ontario

ONT Total Airport Passengers

CY 2000 – CY 2009

7.2

7.2

7.0

6.9

6.8

6.7

6.5

6.5

6.2

5.2

Source: Airport Records

slide30

LAX Modernization

(Yes, even in a global recession)

overview of the lax modernization plan
Overview of the LAX Modernization Plan

TBIT

Midfield Concourse

New Terminal Facilities Are Shown in Blue

view of taxi lane between the new tbit and the midfield concourse from the north
View of Taxi Lane Between the New TBIT and the Midfield Concourse from the North

Midfield Concourse

TBIT

New Terminal Facilities Are Shown in Blue

view of taxi lane between the new tbit and the midfield concourse from the north34
View of Taxi Lane Between the New TBIT and the Midfield Concourse from the North

Midfield Concourse

TBIT

New Terminal Facilities Are Shown in Blue

view of taxi lane between the new tbit and the midfield concourse from the southwest
View of Taxi Lane Between the New TBIT and the Midfield Concourse from the Southwest

Midfield Concourse

TBIT

New Terminal Facilities Are Shown in Blue

view of taxi lane between the new tbit and the midfield concourse from the northeast
View of Taxi Lane Between the New TBIT and the Midfield Concourse from the Northeast

Midfield Concourse

TBIT

New Terminal Facilities Are Shown in Blue

view of lax from the east after completion of new facilities
View of LAX from the East After Completion of New Facilities

New Terminal Facilities Are Shown in Blue

slide40
View of the Elevated Walkway Between the New TBIT and the Midfield Concourse (not shown) from the West

TBIT