A brief overview of lax s position in world airport passenger traffic rankings
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A Brief Overview of LAX’s Position in WORLD AIRPORT PASSENGER TRAFFIC RANKINGS. A Management Presentation for the:. Los Angeles Board of Airport Commissioners. Monday, August 3, 2009.

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A brief overview of lax s position in world airport passenger traffic rankings l.jpg


A Management Presentation for the:

Los Angeles Board of Airport Commissioners

Monday, August 3, 2009

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LAX Has Fallen in the ACI World Airport Passenger Traffic Rankings from #3 in 2000 to #6 in 2008, as Traffic Has Not Fully Rebounded From 2001

Total Airport Passengers


Note: Traffic Includes Connecting Passengers

Source: Airports Council International (ACI)

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Several Factors Have Contributed to LAX’s Decline in Traffic Levels and Descent in the ACI World Rankings

  • After the Events of 9/11/2001, Airlines Operating Hub and Spoke Networks Re-Trenched at the Major Hub Airports

    • As a result of this strategy, total passenger traffic at nearly every major airline connecting hub has increased… despite significant reductions in seat capacity

  • LAX is no Longer a Major Connecting Hub for any Single Airline

    • United, the last airline to operate a hub at LAX, has cut 45.8% of its seat capacity (more than 225,000 seats per week) since 2000

    • American (-26.6%), Delta (-32.8%) and Northwest (-25%) have, combined, cut an additional 159,000 weekly seats at LAX during the same period

    • Low-cost carriers such as JetBlue and Virgin America have entered the LAX market relatively recently… it will take time for these airlines to replace lost seat capacity

  • Regionalization Has Worked During the Current Decade

    • From 2000 until the 2007 cyclical peak, LAX lost nearly 5 million annual passenger trips, while the other 4 airports in the region grew by nearly 6 million annual passenger trips

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LAX has Faced Steeper Capacity Declines Than Other Top U.S. Gateways Since the 2007 Cyclical Peak… Especially by U.S. Legacy Airlines

Weekly Seats Change

August 2007 vs. August 2009

Note: Majors Include American, Continental, Delta, Northwest, United and US Airways

Source: OAG Schedules

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U.S. Legacy Airlines Have Cut Seat Capacity at LAX Because High Levels of Competition Prevent Market Dominance (and Resultant Revenue Premium)

Weekly Seats at LAX, by Global Alliance August 2009

Source: OAG Schedules

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Despite Airlines’ Seat Capacity Cuts During this Decade, LAX Continues to Rank #3 in the U.S., in Terms of Scheduled Seat Capacity

Weekly Seats from U.S. Airports

August 2002, August 2005, August 2009

Source: Official Airline Guide (OAG) Schedules, for the month(s) noted.

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While Annual Passenger Traffic Totals at LAX Matter, They’re not the Most Accurate Measure of the Relative Health of our Local Air Service Market

  • Total Passenger Numbers Include Connecting and Origin-Destination (O-D) Passenger Traffic

    • Both O-D and connecting passengers are vital to the financial health of any airport

    • However, connecting passenger traffic is largely the result of airlines’ network and route system decisions. Such decisions are typically influenced by factors outside of any airport’s control

    • Many of the airports listed in the Top 25 of the ACI World rankings are major connecting hubs, 33-50+% of the passenger traffic is connecting. At LAX, connecting passengers comprise just 27% of the total

  • O-D Passenger Traffic Represents Demand for Air Travel to/from a Particular Market, and is Therefore a Better Measure of Market Vitality

    • O-D passengers are those who “begin and/or end a trip” at a particular airport

    • During CY 2008, approximately 43.5 million O-D passengers passed through LAX (73% of the airport’s total traffic)

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LAX Finished CY 2008 Ranked 3 They’re not the Most Accurate Measure of the Relative Health of our Local Air Service Marketrd in the World (and #1 in The Americas), in Terms of O-D Passenger Traffic

Top 10 World Airports, by Estimated Number of O-D Passenger Bookings

CY 2008

Note: MIDT Booking Data Adjusted for Underreporting

Source: MIDT Bookings, Sabre Airline Solutions, for the year(s) noted.

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As of YE2Q 2009, Continues to Rank Among the World Top 5 in Terms of Both O-D Passenger Bookings (#3) and O-D Passenger Revenue (#5)

Top 10 World Airports, O-D Passenger Bookings and Revenue

YE 2Q 2009, Indexed Against LAX Totals (LAX = 100)

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LAX has Ranked Among the World’s Top 3 O-D Passenger Airports During the Most Recent 7 Years (and #1 in the Americas Each Year)

LAX World Ranking, O-D Passenger Bookings

YE 2Q 2003 – YE 2Q 2009

Note: MIDT Booking Data Adjusted for Underreporting

Source: MIDT Bookings, Sabre Airline Solutions, for the year(s) noted.

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The Unmatched Concentration of Foreign Flag Airlines at LAX Indicates the Comparative Strength of the Southern California O-D Passenger Market…

Top 10 U.S. Airports for International Capacity Distribution By Carrier Flag Country

August 2009

Los Angeles


Source: OAG Schedules

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… as Does the Fact that LAX has Gained More New Foreign Flag Service Than Any Other U.S. Airport Since 2007

Edmonton-LAXNovember 2008

London-LAXMarch 2008

Osaka-LAXMarch 2008

Oaxaca-LAXDecember 2008

Dubai-LAXOctober 2008

Monterrey-LAXMarch 2007

Rome-LAXJune 2008

Rarotonga-LAXApril 2007

San Jose Del Cabo-LAXAugust 2008

Brisbane-LAXApril 2009

Puerto Vallarta-LAXDecember 2007

São Paulo-LAXJune 2008

Melbourne-LAXSeptember 2009

São Paulo-LAXMay 2009

Santiago-LAXJune 2007

Sydney-LAXFebruary 2009

Melbourne-LAXDecember 2008

Sydney-LAXJuly 2009

Notes: Includes New Nonstop Services That Began Since January 2007 United Melbourne Service is Seasonal During the WinterSource: OAG Schedules

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Conclusion: What Can LAWA do to Return LAX to it Previous Position in the World Passenger Traffic Rankings?

  • Recognize Industry Trends and be Realistic

    • Many of the fastest-rising airports, in terms of both total and O-D passenger rankings, are in countries (e.g., China, India, the Middle East, etc.) with positive demographic growth and decades of pent-up demand for air travel

  • Continue to Attract as Much New Nonstop Air Service as Possible

    • Strategic new domestic routes (to replace lost legacy airline service and to provide feed for international services)

    • International destinations without nonstop (or attractive one-stop) service

    • Competitive service on existing international routes (as demand indicates)

  • Monitor Industry Consolidation, and Seek Opportunities to Re-establish Legacy Airline Hub/Gateway Operations

    • Example: Increased focus at LAX by Delta/SkyTeam, post Delta-Northwest merger

    • Hub/gateway operations will increase connecting passenger traffic, as well as O-D