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California Air Travel Update and LAX Modernization Plan Preview

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  1. 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

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

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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).

  8. 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)

  9. 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)

  10. Trends in the California Air Travel Market

  11. 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

  12. 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

  13. 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

  14. 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

  15. … 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

  16. 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

  17. …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

  18. 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

  19. 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

  20. 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

  21. …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

  22. 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

  23. 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

  24. 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

  25. What’s Ahead for the Southern California Air Travel Market

  26. 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.

  27. 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.

  28. 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

  29. …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

  30. LAX Modernization (Yes, even in a global recession)

  31. Seven New Large Aircraft Gates will be Added to TBIT by August 2012 New NLA gates

  32. Overview of the LAX Modernization Plan TBIT Midfield Concourse New Terminal Facilities Are Shown in Blue

  33. 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

  34. 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

  35. 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

  36. 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

  37. View of LAX from the East After Completion of New Facilities New Terminal Facilities Are Shown in Blue

  38. Interior View of the New TBIT

  39. Interior View of New Concessions Space Within the New TBIT

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

  41. Thank You for Your Time!